1. About Chimezie Chuta
CHIMEZIE CHUTA is an Advisory Board Member at Kinesis Money, Caymans, and
formally Regional Director for Africa at Paxful Inc.
He is the Founder of Blockchain Nigeria User Group, protem Chairman Organization of
Blockchain Technology User (OBTU), Africa Lead, Technology & Innovation at Blockspace
Africa Technologies and CEO of both Techbuild Innovation Partners and Lagos Drupal
Varsity.
He is also the author of a series of books including; Seizing Opportunities in Blockchain
and Digital Currency Revolution: A Handbook for Enthusiasts and The Building
Blocks of Blockchain StartUP Entrepreneurs.
He is a regular speaker at various blockchain, cryptocurrency, and technology conferences
both locally and internationally. As a Certified Technology Innovation Expert, he plays a key
role in organizing Nigeria's biggest Blockchain and Cryptocurrency events in Lagos, Abuja
and Port Harcourt for three consecutive years.
With his involvement as a community lead organizer, he is involved in a number of industry-
government projects working towards technology innovation. This includes being a member
of Fintech Roadmap Committee of The Nigeria Capital Market, set up by SEC Nigeria,
Blockchain, Virtual Financial Assets Regulations Working Group also set up by SEC
Nigeria, and NITDA National Blockchain Strategy Team.
He is a Member of Government Blockchain Association (GBA), member Blockchain Group,
Africa Progress Group (APG), ISSAN, Fintech Association of Nigeria etc.
He is regularly featured as a tech commentator and innovation subject matter expert on
CNBC Africa, Channels TV and BBC UK, to mention a few.
@mezie16

2. Conceptual Issues and Basic
Method of BitCoin, Cryptography,
Economics & The future of Banking
2019 VIRTUAL
FINANCE
PROGRAMME

3. 1. The origin of Digital Currencies.
Outline
2. The origin of Cryptocurrency
3. Cryptographic Hash Functions
4. What is Bitcoin?
5. Bitcoin Protocol/ Consensus Rules
6. The Bitcoin Ecosystem
8. Bitcoin & the Future of Money
7. Bitcoin: Order without Law.
9. Bitcoin Challenges
10. The Future of Banking
11. StableCoins to the Rescue
12. Conclusion/ Questions

4. -Amazon Cash
- DigiCash
-Liberty Dollar
….all were single entity controlled instruments!
--------------------------------------
Each type of money plays a crucial role in transactional activities in
some period of time.
1. The origin of Digital Currencies.
Bitcoin, Cryptocurrencies, and Tokens: What are they to
Regulators?

5. 2. The origin of Cryptocurrency
Cryptocurrency is a digital or virtual currency that uses cryptography for security.
Cryptography means…
"crypt" = "hidden" or "vaulted"
"graphy" = "writing“
Confidentiality | Integrity | Non-repudiation |Authentication
The main benefits of using cryptocurrencies are that they transfer the funds more easily between
two parties in any given transaction. These transactions are facilitated through the use of public
and private keys for security purposes. These fund transfers are carried out with minimal
processing costs, allowing users to avoid the large fees for online transactions charged by most
banks.

6. 3. Cryptographic Hash Functions
A hash function is a mathematical process that takes input data of any size,
performs an operation on it, and returns output data of a fixed size.
Its is the “Finger Print” of Digital Records!
Its is the core technology behind Bitcoin.
It is the "crypt" = "hidden" or "vaulted“ "graphy" = "writing“ FingerPrint of online Digital Transactions!
Its is the 'hash value', 'message digest', 'digital fingerprint', 'digest' or 'checksum‘ out put of the processed data .

7. A trustless Peer-to-Peer "Cash System" to prevent double spend!
– Satoshi Nakamoto, 09 January 2009
-A pseudonymous software using Cryptography;
- A decentralized electronic payment system based on peer-to-peer (P2P) network
-A probabilistic distributed consensus protocol.
The idea was to produce a means of exchange, independent of any central authority,
that could be transferred electronically in a secure, verifiable and immutable way.
The smallest unit of a bitcoin is called a satoshi. It is one hundred millionth of a bitcoin (0.00000001)
It’s the “Killer app” against Fractional Reserve Banking (FRB)
4. What is Bitcoin?

8. The Bitcoin consensus rules are the specific set of rules that all Bitcoin full nodes
will unfailingly enforce when considering the validity of a block and its transactions.
-Consensus Mechanism (PoW)
- Incentives (Block Rewards)
- Security (Rules)
- Miners (Transaction Fees)
Agreement Seeking | Collaborative | Egalitarian | Inclusive | Participatory
5. Bitcoin Protocol and its Consensus Rules

9. The Byzantine General’s Problem
The proof-of-work CONCENSUS mechanism of Bitcoin definitely answered a lot of
questions when it came to solving the Byzantine General’s Problem, but
unfortunately there are some issues with proof-of-work.

10. - Scarcity
- Utility
- Demand/ Inelastic Supply
- Mining Difficulty (Bitcoin uses the SHA-256 hashing algorithm )
- Forks
The decentralization of money offered by virtual currencies like bitcoin has
its theoretical roots in the Austrian school of economics, which advocates a
complete free market in the production, distribution and management of
money to end the monopoly of central banks.
Economics of Bitcoin

11. Academia
Associations
BitCoin Advocacy Groups
BitCoin Developers
Investors
Bitcoin Lenders
Merchants
Miners
Mining Hardware
Research and Development initiatives
Speculators
Traders
Wallets Providers
6. The Bitcoin Ecosystem

12. Modern law makes currency a creature of the state and ultimately the value of
its currency depends on the public’s trust in that state.
Bitcoin represents a potential third currency regime far more resistant to state
control, because it is minted in no physical place, operates under encryption,
and places a numerical ceiling on the number that can be created.
The trust required is not in any government but in the decentralized order of
those who verify Bitcoin transactions.
7. Bitcoin: Order without Law.

13. The Digital Currency Revolution will spread further in the coming years, and
efforts to ignore it or legislate against it will likely fail.
Bitcoin is the “Killer APP” of Fractional Reserve Banking (FRB)
8. Bitcoin & the Future of Money
Blockchain technology--which is what underpins cryptocurrencies, could be a positive disrupter for
various financial value-chains.
Blockchain could have a meaningful and lasting impact on the celerity, traceability and cost of financial
transactions.
The possibility of Bitcoin replacing failing fiat currencies is supported by the increasing adoption of
cryptocurrency in nations which are undergoing severe economic turmoil, such as Venezuela.
Interestingly, Venezuelan citizens are flocking to Bitcoin even as the government imposes its own
fiatcoin, the Petro.
The elite notwithstanding, if a country were to adopt Bitcoin (rather than some localized fiatcoin) and
then go on to economically out-compete its rivals, it’s likely that other countries would be forced to
follow suit. The result would be a top-down version of hyperbitcoinization, with opposing nations
likely forced to resort to sabotage and warfare to resist the process.

14. - High energy consumption (Denmark: 32TWh Anually)
- Wallets can be lost
- Irreversible transactions
- (Facilitate) Criminal activity
- Social risks, Legal risks, Regulatory concerns
- Economic risks
- High Volatility
9. Bitcoin Challenges

15. Futuristic Banking, will include….
- Challenger Banks/ Disruptors
- Digital Only Services
- Cloud Banking
- Openness
- Financial Inclusion
- venture Investing
- Collaboration
10. The Future of Banking
Will Banks Go Extinct?
Will Bitcoin mark the end of Money as we know it?

16. Stablecoins key disadvantage is that that they are usually,
overtly centralized!
Stablecoins leverage the benefits of cryptocurrencies — such as
transparency, security, immutability, digital wallets, fast transactions, low
fees, and privacy — without losing the guarantees of trust and stability
that come with using fiat currency.
Stablecoins are…..
-Digital money that aims to mimic traditional, stable currencies.
- Collateralized to the value of an underlying asset.
-Typically pegged at a 1:1 ratio with certain fiat currencies
11. StableCoins to the Rescue

17. 12. Conclusion/ Questions
https://Slides.com/chuta
http://chuta.com
https://www.linkedin.com/in/chimeziechuta/
Twitter: @mezie16