CS6320

CS6320: SW Engineering of Web Based Systems

Bitcoin – cryptocurrency based on Blockchain technology

Satoshi Nakamoto paper on the concept of Bitcoin (some say in response to 2008 crisis and getting Banks out of the picture of currency and transactions) - https://bitcoin.org/bitcoin.pdf

Based on blockchain technology
21 million coins (that it ) up to 10 decimals division
Uses concept of peer network trust (>50%) to decentralize authentication/security process (no longer need 3^rd party authenticator, keeps everything decentralized)
Keep adding blocks to original block in a “chain” for new transactions (like selling / buying coins)
Bitcoin miners = machines (typically special purpose hardware) that computes hashes for transactions –see point c above

Players– ethereum, ripple xrp, cryptokitties
5^th largest currency in world in 2017
Overstock has 30% revenue from bitcoin investment
Bitcoin headed into bubble?
https://steemit.com/bitcoin/@younis/is-bitcoin-heading-into-classic-bubble-territory

Block and Chain Size

Bitcoin block has gone from initial size of maximum 1MB to 2MB (2018)
Size of Chain obviously grows over time over 150MB in 2018... see https://blockchain.info/charts/blocks-size

Bitcoin Minning

NiceHash – Crypto mining marketplace https://www.nicehash.com/

AN ICO - and "Initial Coin Offering" rather than an IPO (initial public offering

where you raise money by offering people to buy crypto-"tokens" (like shares) or new company specific cyrpto-currency (your companies coins) in your company in exchange giving you "standard" cryptocurrency coins (bitcoins or ehtereum).

--- these "bitcoin or ethereum" coins your startup raises doing this can be used to fund your project/company

History of some beginning ICOs

first cryptocurrency distributed by an ICO was Ripple. In early 2013 Ripple Labs started to develop the Ripple called payment system and created around 100 billion XRP token. The company sold these token to fund the development of the Ripple platform.
Later in 2013, Mastercoin promised to create a layer on top of Bitcoin to execute smart contracts and tokenize Bitcoin transactions. The developer sold some million Mastercoin token against Bitcoin and received around $1mio.
Several other cryptocurrencies have been funded with ICO, for example, Lisk, which sold its coins for around $5mio in early 2016. Most prominent however is Ethereum.
In mid-2014 the Ethereum Foundation sold ETH against 0.0005 Bitcoin each. With this, they receive nearly $20mio, which has become one of the largest crowdfunding ever and serves as the capital base for the development of Ethereum.

Early days -- like the wild west

2018 --- GAINS: ETH, for example, was sold at 0.0005 Bitcoin and is worth today 0,05 BTC. Profit: 10,000 percent. Augur token (REP) were sold for around 0,005 each and are now traded at 0,01. The gain in value of 100 to 500 percent in Bitcoin is common for successful ICO.

2018 - LOSSES: many ICO ends with losses. Cryptocurrencies like Lisk, IOTA-token or Omni did not hold the value in Bitcoin the token has been assessed at the ICO (or struggle to keep it). Often ICO is even used by scammers and semi-scammers.

Block and Chain Size

Bitcoin block has gone from initial size of maximum 1MB to 2MB (2018)

Size of Chain obviously grows over time over 150MB in 2018... see https://blockchain.info/charts/blocks-size

Bitcoin Minning

AN ICO - and "Initial Coin Offering" rather than an IPO (initial public offering

where you raise money by offering people to buy crypto-"tokens" (like shares) or new company specific cyrpto-currency (your companies coins) in your company in exchange giving you "standard" cryptocurrency coins (bitcoins or ehtereum).

--- these "bitcoin or ethereum" coins your startup raises doing this can be used to fund your project/company

History of some beginning ICOs

first cryptocurrency distributed by an ICO was Ripple. In early 2013 Ripple Labs started to develop the Ripple called payment system and created around 100 billion XRP token. The company sold these token to fund the development of the Ripple platform.

Later in 2013, Mastercoin promised to create a layer on top of Bitcoin to execute smart contracts and tokenize Bitcoin transactions. The developer sold some million Mastercoin token against Bitcoin and received around $1mio.

Several other cryptocurrencies have been funded with ICO, for example, Lisk, which sold its coins for around $5mio in early 2016. Most prominent however is Ethereum.

In mid-2014 the Ethereum Foundation sold ETH against 0.0005 Bitcoin each. With this, they receive nearly $20mio, which has become one of the largest crowdfunding ever and serves as the capital base for the development of Ethereum.

Early days -- like the wild west

2018 --- GAINS: ETH, for example, was sold at 0.0005 Bitcoin and is worth today 0,05 BTC. Profit: 10,000 percent. Augur token (REP) were sold for around 0,005 each and are now traded at 0,01. The gain in value of 100 to 500 percent in Bitcoin is common for successful ICO.

2018 - LOSSES: many ICO ends with losses. Cryptocurrencies like Lisk, IOTA-token or Omni did not hold the value in Bitcoin the token has been assessed at the ICO (or struggle to keep it). Often ICO is even used by scammers and semi-scammers.