 Okay party people I think I was West stage. I welcome you to a amazing talk held by an amazing person. That's him Michael This is a self-organized session. So all the talks that are held here. They really come from you guys and We made up the plan. I think on day zero or day one Michael. When did you have the idea to hold this talk? Two days ago, okay, so this is the strength of this stage. It's a very spontaneous and It's from from us for us so I'm happy to to host this together with my team and I'm happy to hear some more about Magic Internet money from Michael. Give him an applause, please Thank you. So hi everyone. Thanks for coming to my talk My name is Michael. I'm a security researcher and the cryptocurrency enthusiast and I'm here to talk about Money Right, but not this kind of money. This is a boring old money I'm here to talk about money of the future so Cryptocurrency is digital money and Bitcoin Right, I know most of you are already familiar with Bitcoin So what is Bitcoin? It's many things Right, it's the first cryptocurrency It's a way to achieve trust a way to achieve consensus without trusting It's a decentralized peer-to-peer network It's a ledger which can't be modified It's a money you pay when your computer gets encrypted with ransomware It's probably the greatest invention since the internet and greatest bubble in history at the same time and It's dead, right 200 times now. It's been declared dead So it all started in nine years ago when this white paper was published by an anonymous actor a group or person calling himself Satoshi Nakamoto and It talked about this crazy idea of creating a new form of money where There is no central bank. It's digital and it's protected by cryptography and math and It sounded crazy and still sounds a bit crazy It took some existing ideas and created the whole new form of money technology and More but when you talk to people about Bitcoin, they say yeah. Yeah. Yeah, whatever consensus Blockchain, but what about the price, right? So This chart is very outdated It's the Bitcoin price chart up until a year ago So here you can see the famous Bitcoin bubble of 2013 2014 Where the price went from less than hundred dollars to more than a thousand dollars in a matter of days or weeks But what you may not be aware of is this little bubble here Which was the first Bitcoin bubble Where the price went from 30 cents to 30 dollars also in a matter of weeks and then crammed cash came crashing down now This thing looks a lot like a roller coaster, right? So it's going up It's coming down. It's going up again So let's see what's what did we miss this year? So this is this is the current Bitcoin chart and Where is the where are those bubbles, right? Well, here they are the first bubble is invisible and the second bubble looks pretty much like the first bubble a year ago and while a Bitcoin is a roller coaster, it seems like the train has left the rails and launched into space But this is probably just another bubble Which will be fixed soon And Bitcoin is not alone right So Bitcoin is one cryptocurrency and it only went up by 20 times in value while other cryptocurrencies like Ethereum Ripple and Whole of others shitcoins even down where you can see them went hundred in times of Hundred times in value. So we are witnessing some kind of bubble where people are going crazy and just Buying this stuff because they think the price is going to go up And Another example of how crazy things have become Let's say you want to buy a cat, right? So you want to buy a very expensive cat. You're doing your research and you found that this cat say Persian cat Persian cat it costs $3,000 and you tell yourself. Well, it's a lot of money, but at least I get a real cat a quality cat Now you can see the face of that cat and he's shocked because that cat has discovered that a Crypto kitty, which is nothing more than a virtual cat Can cost $120,000 and you can't do anything with it except breed it and sell it Reminder this is the crypto kitty and this is the real kitty just if you if you're confused So Yeah, interesting, right? Well, it seems this whole thing is Exploding and why shouldn't we be part of it? Let's invent our own cryptocurrency. Let's be part of the game. Yeah. Yeah So chaos coin nice, I have a better name. So What are our goals with this cryptocurrency? Well, most important, we should have a cool name and the logo so everybody will think it's cool But more serious things it should be decentralized like all cryptocurrencies or most cryptocurrencies Because there is no bank. We are the bank Transactions cannot be reversed and The most important you can't fake not currency and not transactions So How should we name it? Well, you know, I want a name that people understand when when they see the name They understand what this thing is and for many people Cryptocurrencies are magic money which you can use on the internet, right? So why not call it magic internet money coin or meme coin? Right and this is the logo I designed it myself. Thank you. Thank you. Thank you Okay So meme coin Is a protocol like Bitcoin and we should write this protocol now together But let's start with something simple. Forget everything. You know about Bitcoin We want to invent everything from the ground up, right? Okay, so we will use a Log file. Let's call it a ledger I'm not stealing from Bitcoin. No It's my invention. I want to use a file that all the participants maintain Right and it contains all the accounts and all the transactions and When someone wants to transfer money, he just tells everyone. Hey, I want to transfer money this this amount of meme coin to this account and the founders of this meme coin gets 100 meme coin each which is the money which The economy starts with So meet our founders This is Pikachu and we're going to look at everything from the point of view of Pikachu and Pikachu has friends Alice Bob and Charlie and They decided to create a network between them and This is the ledger This is from the point of view of Pikachu We can see that the ledger contains only four transactions which are basically the from air to Alice 100 meme coin from air to Bob 100 meme coin and so on when I say from air It means there is no sender. There is only a receiver And the network is live. We are live. The main net is launched. Let's see how it goes So Pikachu is just sitting there listening for transactions and he gets a transaction that Bob is transferring 20 meme coin to Charlie and he says great. It looks okay. I'll just add it to the ledger, right? Then Pikachu agreed to buy a hammer from Bob and for that hammer. He agreed to pay 100 meme coin so what Pikachu did is he added the transaction to his ledger and Broadcast it to everyone Everything's everything is looking great, right? So meme coin is working. We're done well a few minutes later Pikachu sees this transaction Which supposedly he transferred all his remaining money to Alice and He's angry because he never did that So apparently Alice is malicious and she just wrote this transaction and nobody can dispute it so fake transactions issue number one How can we prevent others from fake introductions? How can we verify that the sender of the transaction is really the sender? so There is a solution for that. It's not related to Bitcoin digital identities or digital signatures Powered by public e-cryptography So I'll explain For those of you who are not familiar public e-cryptography. I have a really quick explanation high-level explanation how it works. So Pikachu So here we have Pikachu and he has two keys a private and a public now. These keys have a special relationship What one key creeps that only the other can decrypt? Okay, so Say Pikachu has a message he wants to broadcast He encrypts it with his private key. He gets something called a signature It's a signature because you can verify that if you use Pikachu's public key, which is a public knowledge You get the message back So how would it work? We have Pikachu and Bob Pikachu has private and public keys. He wants to transfer money to Bob. So he has this message He uses the private key Creates a signature He then appends the public key and Sends the the thing to Bob Now Bob can verify that it came from Pikachu or actually Pikachu's public key by taking the signature using the attached public key Getting the same message as the original message We know it works. However, if Pikachu does that and all he gets is Something else. He knows Sorry Bob if Bob does that and all he gets is something else then we know The signature is invalid, but we have another problem How how do we know those keys belong to Pikachu in the first place like okay? So I got a message and it has a valid signature, but how do I know those keys belong to Pikachu? so There's a simple solution to that so Who the hell is Pikachu anyway? Pikachu is someone in real life, but we don't really care about Pikachu in real life We only care that it's Pikachu's account. It's someone's account. So if we just change the Account to be a public key then now if Alice wants to fake a transaction and send money on Pikachu's behalf she needs Pikachu's private key because it says that the money is coming from Pikachu's public key and As a bonus we we got a pseudo anonymity since there are no more accounts We don't know exactly who is behind the public key and it's good. I mean we don't need to know But it can lead to other problems so-called problems So how does it look now? You can see now the ledger is Contains names, but those names actually are just for readability for you and for me What it really contains is the thing in brackets which are the public keys, right? So now instead of Alice getting 100 meme coin it's Alice's public key getting 100 meme coin So how does it work now? It's the same thing. We have the first the transaction. It's great. The second transaction is great and We have this transaction, which is not valid anymore and everybody can know it's not valid because Pikachu never did this transaction it was Alice and Alice doesn't have Pikachu's private key. So this thing Can easily be Verified to be fake and removed from the ledger. So Pikachu does that and so does everyone else now What you may not know about Pikachu is that he is doing well in life and Here's a Ferrari and he decided to sell his Ferrari to Alice So he doesn't care that Alice is malicious. He says I trust the system as long as I see a transaction from Alice That I'm getting 100 meme coins and it's signed by Alice Then the money is mine and I don't care So I can give her my Ferrari however What Pikachu doesn't know is that Bob has made a deal with Alice as well to sell his toolbox For all of Alice's money, which is supposed to be zero, but but Bob doesn't know that so he waits for a transaction from Alice of Hair transferring to him 100 meme coin and he receives it and it tells okay great I can give my toolbox to Alice now Neither of neither Pikachu nor Bob know that Alice actually spent double her money But what will happen? When Charlie who is oblivious to all of this and Simultaneously receives two transactions claiming Alice has transferred all her money both to Bob and Pikachu So what does Charlie do? He gets angry and Everybody gets angry except Alice who is driven to Mexico with Pikachu's Ferrari and Is living a good life now? Thank You Alice So this is called the double spending problem, which is the main thing that Bitcoin actually solved And enabled what we call digital currencies now so What's double double spending problem exactly what we witnessed Alice can spend her money twice how do we Now it wouldn't happen if we had a way of ordering transactions so when The second transaction would come we would know that there is no more money to spend But how how can we achieve consensus? In this setting so this is actually a complex problem, so we're not going to solve it in This slide Instead we're going to have some ideas so First we don't add transactions to the ledger immediately since once they are in inside the ledger they already happened Now we will group transactions into pages and we will wait We will group them into pages and each participant will group transactions into a page And then we will have some kind of a vote where which we will say This is the page. This is the next page that should be added to the ledger So how does it look now? We have The ledger which is the page number one and we have the transaction pool which we where we are adding or our transactions So we have the first transaction. It does not enter the ledger immediately. So meaning it didn't happen yet It just wants to happen We have the second one and we have the third one where Alice transferred our money to Pikachu and at this point Pikachu didn't give Alice a his Ferrari yet And it's a good thing. He didn't do that because now he sees that Alice is trying to spend more than she can so Pikachu crafts a candidate page. It's not a page in the ledger. It's just the page he wants to add and he starts adding transactions So he puts the first the second and the third now He won't put the fourth because that transaction doesn't make sense in this context. It's it's more money than Alice has Great now what? How do we vote? How do you vote in an anonymous digital world? so While it's an anonymous world We trust that the majority of the peers are honest We don't trust any specific peer But we do but we do trust that the majority of the network participants will not try to game the system so What's important for this voting system? Voting should should cost something because otherwise Someone who is dishonest will just vote a million times And voting should be fair meaning people who are legitimate who are honest We'll get their fair chance in saying what should happen now as I said, it's an anonymous digital world. So Digital identities have no cost when when when we go to vote we The cost is our identity. We can only what vote once each person can only vote once when we go to vote I don't know elections or whatever in real life, but in the digital digital world The digital identity means nothing because I can create millions of identities and vote million of time But what do all the participants have in common that has a cost? Well, it's computing power you can't fake computing power it costs Hardware it costs electricity. It costs time alright now what's fair a Competition is fair right So when I say fair, what do I mean? It means that someone if someone has the majority of computing power It's not fair if he always gets to a say if he always says what should happen It should be proportionate to the amount of computing power. I have so we need an element of randomness That depends on the amount of power I have So We need more crypto Okay We need something We need to put our computing power to work, right? How can computing power vote? I mean it doesn't make sense when you think about it because when you think of voting you you think that you're going to a booth and Putting a note, but voting is actually saying I want this This is the right thing. So If we have some kind of puzzle that we can use our computing power to solve and the puzzle can't be faked Then when our computing power is actually trying to solve this puzzle, it's actually voting. It's voting on the solution We will see in a second what it means. So the puzzle should be easy to verify, but very hard to solve So There is this thing called hash functions which answer this criteria If you want to know what the what's the hash value for I like bananas You just calculate the hash value of I like bananas and The difficulty of that is one hash calculation Great Now if I give you a hash value and tell you What's the input that creates this hash value? This is an extremely difficult problem and this is actually why it's used in cryptography. We build we actually We want it to be hard. That's the main feature of hash functions Hash functions are random and you can't predict what which input creates which output. So this is not good but What if we instead of saying we want the whole input What what if we say we want a partial match, right? We only care that our input results in the M bytes being equal to this requirement So what's the difficulty of that? That's according to the birthday problem to in the power of M divided by 2 So why is it important? Because M is a variable and we can control it if you want to make it very hard We can just increase M if you want to make it very easy. We can just decrease M Amazing So let's play a guessing game. So how can Pikachu say? This is the page I want guys So we can just try to play this game What X should I add to this page? That will result in some kind of requirement So this requirement in this case is 20 zero bits. So M is 20 So Pikachu calculates The hash value of the page without adding anything and he says it doesn't feel the requirement So how hard is it finding these six? well It should take Pikachu on average 1024 guesses so Let's get to work By the way, it doesn't matter What value Pikachu starts with because hash functions are random. So He can try one. It's the same as trying 99. He doesn't know what will come out So he decides to to try one It doesn't work try two nope three nope so on until it rise this number 1045 it suddenly it works So Pikachu actually did 1045 calculations more a bit more than the average to get to this value so his computing power actually cast 1045 votes if you want an analogy and Once once he adds this value. This is not a candidate page anymore This is the page two of the ledger because it answers the criteria and It's very easy to verify right? So this is called proof of work Work is when you spend computing power time to solve difficult puzzle The difficulty of that work Can be changed by modifying the requirements Changing the ledger from now on requires proof of work So if you want to modify the ledger if you want to modify if you want to Claim that something happened you have to work for it and The winner of the competition gets to hedge add his page to the ledger So Pikachu won so what he does is First of all he looks at the remaining transactions in the pool and he says well this remaining transaction Doesn't make any sense anymore because this will never be valid at least spend all her money already so he removes it and Then he broadcasts this page to everyone else so they can add it to the ledger now Charlie Didn't participate in the game He didn't understand why the hell he needs to spend computing power on this thing, but he's an honest guy So yeah, he got this page he verified That the hash is valid it makes it matches the requirement of the game and Then he cleans up his transaction pool He removes the transactions that are already in the page and then like Pikachu he removes this transaction because it doesn't make any sense anymore So the next thing he does is broadcast it to everyone else and Bob Well Bob was working on it on on his own page now Before he could finish serving the puzzle he received the page from Charlie So Bob verifies this page and this is it's a valid page But Bob gets angry because although he he respects the rules of the game He says it's not fair. I wasted computing time. I wasted power I wasted electricity and all I got was nothing although he didn't lose his toolbox because he didn't sell it yet This transaction did not occur yet. He still feels like he wasted his time which bring us to the next problem Nobody works for free, right? So it doesn't make any sense that the whole system is Working to maintain this ledger But getting nothing of it except that it's working So there is no incentive to do work. We need some kind of incentive for those who want to work We need to reward them somehow So how do we reward them? Well, we can Demanded participants pay some kind of a fee when they want to use the network and this is also a good idea because this Prevents spam attacks. So if someone wants to spam the network now he has to pay some kind of fee and But this is not enough we We actually I'll take you back. We have only in the whole economy We have only 400 meme coin which we started with so we need some kind of way to create new meme coins So why not give the The guy who solved the puzzle 50 meme coins It creates this gold rush mentality and We have a fair way to introduce new money to the economy now So this is actually what we call mining Miners are nodes That secure the network by playing this game and In return they get a reward now mining is what introduces new money and Miners are the ones who dictate the consensus they dictate what happens or actually what happened because they write the history and And mining is a zero sum game. So If I buy a super computer now, I can't just solve this easy puzzle over and over again and Super inflate the whole economy, right? I want it to be difficult. So We want to keep the issuance of new money at a stable rate So we need to increase the difficulty accordingly to keep every x minutes Let's say 10 So only every 10 minutes new money is created and only every 10 minutes a new page is added to the ledger Now the more of obviously the more computing power is competing to Do this thing then the harder it is to attack the network so Pikachu Fair and square he solved the problem and He gets a reward So the reward is first of all the 50 meme coins which he gets for solving the puzzle and then you can see that Now the transactions are missing one meme coin each from the receiving side These are the fees actually this went to Pikachu. So you can see in total he received 53 meme coin This is called the coin based transaction and this is the first transaction in each page This is the only transaction where you have no sender and everybody Closes their eyes and pretend it's okay because it's okay to create money out of thinner as long as it was done in this way now We were very successful with this so Pikachu told all is all of his friends about meme coin and We are expending guys. We have a new participant well, apparently this participant is jigglypuff and The first thing jigglypuff is doing he wants to seek with the rest of the network So he wants to get the most up-to-date ledger now He knows this first page. He doesn't need to get it from anyone because actually this first page is Hard-coded into the protocol if if you remember I told you that the founders get 100 meme coin each So jigglypuff knows the first page Now the Something strange happened when jigglypuff sync with the network and he received Simultaneously two pages claiming both to be page two Now he he says to himself. Well, okay, one of those pages is probably fake So I'll just verify and and see which one is true. So he just Calculates the hash of the first page That's correct. It it matches the game's requirement Calculates the house of hash of the second page It also matches the requirements So he's confused How come it happened? Well, what what actually happened is that After Pikachu solved the puzzle Alice kept working on the puzzle on her free time and also managed to craft a page that Contains doesn't contain her transaction. Basically. She still has the money for Pikachu's Ferrari and She kept it until somebody new is joined will join the network and once somebody new joined the network She sent it immediately So the new guy has no way of knowing which one of those pages is the real page So what's now? There's those those two pages and The third page arrives Jigglypuff is confused How can I how can I construct a ledger? I don't know Which one of those pages is the second page? We're missing something in this setting somebody can craft alternative pages on their own free time and then actually dupe new participants into thinking Into breaking consensus basically now The solution is simple because all of this wouldn't happen if the pages were linked So let's just link the pages Meaning every new page that is created Contains the hash of the previous page That way if I want to replace or modify some kind of page I have to replace and modify all the following pages Because they're linked and it's protected by proof of work And the last bit of information which is probably the most important bit of information Which makes this whole thing work is that as long What we what we trust is the longest chain the longest chain is the real ledger while that may change throughout the time of Chain Sorry, I forgot the name I forgot the world Let's just see how it works it's better Hmm So now we can see that and we have a new field in the page which points to the previous page Right, so we have a previous hash field now. Both of these pages are valid. They point to the first page But when a third page arrives when page number three arrives It points to a certain page it points to Pikachu's page because it was the first page and everybody knew Everybody existing in the network already knew So we can see in the previous hash field that it matches Pikachu's page number two so jigglypuff just links it and Notice is this is the longest chain So this chain is True this is the true history This is either a temporary fork or an attacked attempt So this can happen by a malicious sector or it can happen simply when two miners solve the puzzle at the same time and Then the network can't agree for a second or for a few minutes on what is the real Version of history great Now I want you to close your eyes and While I replace every occurrence of the word page with the word block and Oh my god, we just invented the blockchain So this thing is actually the blockchain. We didn't mean to invent it, but we did So this is the famous blockchain that you keep hearing about For those who are unfamiliar So a few words about blockchain Blockchains are coded with a Genesis block meaning You have to know what's the first block. It's part of the protocol Now when I said about when I talked about voting back then it makes a whole lot of sense now What miners do is not only vote on the current page They actually vote on which history they believe in when they create a new page They link it to a previous page now what they essentially are saying with their computing power is This chain is the chain. I believe in this is that this is the real chain So I'm going to put my computing power to work in order to extend that chain So miners vote on History basically and my majority of mining power dictate history and They can also modify history if they desire But the majority of nodes majority of participants are the ones who enforce the protocol So miners can't just decide to give themselves 1000 meme coins out of thin air in the coinbase transaction because nobody will accept that block or page Now every new block that gets added adds a new confirmation to the previous blocks So a one confirmation Meaning we are in the forefront of the chain We are the highest block in the chain the farthest is risky because it's part of a for it can be part of a fork six confirmations Depending on what's the time of the creation of new blocks? Let's say it's 10 minutes. It's considered very secure and 100 confirmations is basically considered ancient history And lastly a different way to look at this whole thing So you probably heard about this thing called the theorem and some of you are probably developing a theorem and a little different way to look at meme coin so Meme coin is a distributed application basically if we if we do a An analogy to github Blockchain is the master repository and And Transactions are poor requests transactions are attempting to modify the blockchain or actually extend the blockchain While the users are the contributors because they are creating new transactions the ones who are approving them are miners But meme coin is also a distributed and single-purpose computer the whole Logic of this computer is money transfer so What do I mean by distributing computer meaning all the nodes who are enforcing the protocol are actually running meme coin application So meme coin the computer is running the meme coin the application And this is similar to Bitcoin, which is a single-purpose computer But Ethereum is what happens when you say I want to allow more than money transfers I want to allow more than simple transactions You get a general purpose computer or crypto kiddies So let's review Do we have a cool name in the logo? Yeah, I believe we do are we decentralized Yes our transactions reversible nope currency and transactions can they be forged nope And we have a few bonus achievements We managed to make transactions pseudo anonymous and We have a predictable currency issuance rate so I Got word that meme coin is the most successful coin now Few minutes after we launched we managed to take bitcoins market cap. So congratulations guys And That's it. Thank you very much Thank you very much. We do have time for questions. So no, yeah, if you have any questions, I'll be happy to answer Hi, can you tell us a bit about the energy consumption of the transactions? What do you mean by energy consumption the computing power? No, the electricity that's consumed and like the impossible environmental impact of the whole system Yeah, so the idea behind the energy consumption is actually Logical it makes sense because you want a mining to cause something That is ten like it has a real value. Okay, you want to tie it to something real now It's not the most efficient solution. So that's why you have other solutions like proof of stake Which are currently somewhat experimental, but they don't require mining. They require proof of work. Sorry. They rather in You get a say in what happens or you get a say in the mining Business according to the amount of coins you own. So yeah bitcoins mining for example is very very costly. It's Taking a lot of power. Actually, I think I read it's like power consumption of Small country or something. I don't remember like it's equivalent to the the consumption of Bulgaria right now Yes, each transaction consumes about as much as Almost ten of us households in a day Yeah, that's because mining is a very In a fish. I mean the proof of work mining is very It's a zero-sum game. So if the coin costs The insane value it does now People are very incentivized to mine and there is a lot of competition which results in a lot of power consumption So the part of the problem is probably because of the ridiculous evaluations Which you can see the ridiculous is not because I don't believe in Bitcoin, but because of the huge transaction fees and relatively currently relatively poor use so Regarding your question. Yeah, I think I think the consumption is problematic And I think proof of stake will solve that hopefully Hi there. I don't quite understand in MIM coin. Let's say Bob has a MacBook Pro and the others have Arduino's why Bob can't win every single proof of work challenge and the others get bored and you know Bob then retires and no one's Processing these transactions anymore. Yeah, that's a good question Because the way mining works is there is an element of chance. So and It's like flipping a dice So you can get your number on the first try and you can get your number on the 6th try or the 50th try As long as you get the number you win So if you have an Arduino, you have a lower chance of winning, but you still have a chance Hello, I wanted to ask how the adjustment of the difficulty for computing the next block How is this actually enforced? For example, I am Bob and I want to mine the next block How do I know the the difficulty of the next block and who who dictates this difficulty or what's the consensus about the difficulty? Okay, so the difficulty is actually self-adjusting meaning it's part of the protocol So you can take a look at of how many new blocks or pages you created in the last Let's say two weeks and then you say It was too many pages or too few pages and then you change the difficulty accordingly You do it on your own as part of as a participant So does everybody else and if you if you arrive to the wrong conclusion You will be alone because you're supposed to be running the same Client the same protocol basically So if the if the difficult if the protocol says you should have only 1000 blocks every two weeks Just making this up then you will adjust it accordingly every two weeks Thanks for the talk was pretty nice What happens to transactions as you set the fee you are You want to pay too low do the transaction stay in limbo or what happens? You mean Bitcoin or Bitcoin especially yes Well, that's actually an implementation thing, but well simply simply speaking as long as like It depends on the mining Software basically so you can write a mining software where you choose to insert low fee transactions That's your choice, but Bitcoin's mining software will always I mean it makes sense that will always choose the highest fees first So if you put a fee that is very low and there is a lot of load on the network You will your transaction will take either a lot of time or we'll never enter the blockchain Thanks So why do you have a Monero sticker on your laptop when you're talking about Bitcoin and Mim coin? That's a good question. I didn't have time to print the stickers from Mim coin Next time yeah Hi, thanks for the great explanation And what are your thoughts on non-public blockchains and technologies like hyper ledger? I'm not very familiar with hyper ledger So but if you mean non-public blockchains like I know some companies are trying to create private blockchains Which is a bit ridiculous in my opinion in my understanding of how this works Because why do you need it if you still need to trust the company then why bother with blockchain? I mean the whole idea of this is that you don't need to trust anyone So you just taking a building a database. I guess yeah, but why do it in blockchain? Why not build another database? Hi, thanks for your talk. I want to ask So when in Europe we have the ECB and in the US they have the Fed and in different countries different central banks who basically Dictate the monetary rules monetary policy monetary supply how fast and how slow to increase it or not And in your talk you said the miners decide the consensus which works fine if maybe like you have an Whatever 2% inflation or whatever economists think is is healthy but if you look at countries like Venezuela or Zimbabwe Then you have the same people just like dictating like now we just like print more and more money to I Don't know pay police forces and military to keep us in power But if you said in your talk that minor dictate consensus, what does prevent? The same system just repeating with even more electricity consumption So my minor dictate consensus. They don't dictate the protocol. So if the protocol says every 10 minutes 50 new meme coins should be created then All the network is enforcing this protocol meaning people who are not miners people who have relatively poor computing power And they say if a minor decides to today verse from the protocol The the participants simply say no your your your page or your block or your transaction is invalid Hello again You said you were a crypto currency enthusiast if I want to become one what are the interesting things to play around with? Bitcoin mining seems rather expensive. Should I run a copy of the grab a copy of the ledger and validate stuff? What interesting currencies should I look at? Where's the fun stuff? Where's the exciting stuff? Thanks. Well, currently the exciting stuff is if you ask me at the Ethereum because it has the largest group of developers, so every Every day you have a new thing happening in the Ethereum. There are a lot of Ethereum killers out there Who are claiming to be the next Ethereum and that that may be that may happen? But they have almost nothing on Ethereum mean in in terms of they they may have a better technology, but they don't have any Developers or or applications or anything basically so they have a long way to go if you want to to play around I would suggest learning solidity and playing around with it. It's very fun Hi, you said by linking the public key to an account we gained this pseudo anonymous anonymity What exactly is that and why is it not fully anonymous? So we we don't link public key to an account. We actually say that an account is a public key a public key is an account So it's pseudo anonymous because I can see transfers between public key, but if I don't know who the public key belongs to Then I don't know who is the real guy behind it So there is nothing preventing me from creating thousands of accounts basically public and private keepers and Using each one for a different transaction But if you know my public event, it's not anonymous anymore because you can track my transactions Yeah, hi. Thanks for a great talk. I am so I assume all crypto currencies are like inherently a scale bound But what technologies can actually take this scalability issue and maybe increase it by one order of magnitude two orders of Magnitude and really help push the transaction rate So there's there's two things There is the There are three things there is the block size increase which is very limited and very controversial There is the lightning network, which is very promising but has some I mean I Don't want to sound negative, but and I'm not negative actually. I'm very optimistic But I think it has to prove itself yet because it has some questionable Characteristics and then you have the tango which is Iota Which claims to be not which Iota is like a cryptocurrency that is not based on a blockchain So this whole talk Doesn't like it's not relevant for Iota and Iota use something called the the tango which is a proprietary like Directic acyclic graph for in which basically the the concept is sounds almost magical where you You verify transactions basically the trans there is no real mining Simply it's when you want to make a transaction you have to verify two other transactions. So Basically if you spam the network, you're actually doing it a favor So Iota is like this magical thing, but since it's magical and almost like all things magical It sounds a bit shady There is no proven method. There is no proof behind it and it's a proof of concept and also nowadays There it's very centralized because they can't really use it as it should should be used instead They use something called the coordinator, which is like basically a central bank. So they say they will remove the coordinator once the There are enough users But yeah, that's yet to be seen Let's say after one day since you launched your meme coin a flow is discovered in the mining algorithm And so how could you fix this? You Again, you said it's there is a flow in the mining algorithm Yeah, zero day or something that allows other people to do fast mining and stuff So how could you update or just cancel the whole system or yeah? Well, you do what's called the hard fork. So basically you hard fork is like you change the rules You change the protocol and you say, okay from now on the old mining algorithm doesn't work anymore So everybody needs to update at this minute to the new protocol But the hard part hard forks are very controversial because you actually enforce a new Protocol on on all the users so a hard fork can solve this and the hard forks have been have happened in Ethereum and in Bitcoin were actually in Bitcoin only I Think only in the early days, but in a theorem they happen. They happened when the Dow hack to restore the stolen funds Hello, thank you for your talk First be very careful with iota it gets a lot of hype for a very kind of unproven and shady system saying I have a question Right now. There's a lot of concentration going on of the mining power So I think kind of around 50% of the mining power are concentrated in like four Chinese big mining conglomerates Do you think there's a danger there? And if so, is there a way to kind of contract this? Yeah, there is definitely a danger there though It depends on your definition of danger like if you think Bitcoin will Collapse because of it. Yeah, I think it depends on what what you mean by Bitcoin like because today when you say Bitcoin Some people think of Bitcoin cash and So they they claim they're the real Bitcoin and everybody's forking Bitcoin now to to Either make a quick profit or claim they they have a better solution. So mining power concentration is a big issue because They can be like one day dictate that they control the currency but Essentially when when they do that the currency will lose all of its value in a second and then the problem is solved, right? Just there is no they control now thin air. So they are not very incentivized to They have the incentive to remain honest and play along I don't know how it will work out if there is someone who has nothing to lose and doesn't care about it Then he can attack the network, but I would imagine the most harm he can do is just Enforce a fork in which they change the mining mining algorithm basically Could you tell something about the downsides of blockchain because everybody says? Oh, it's it's a magical thing and We must use it and it's so nice. Can you can you talk a little bit of the downsides that this brings with it? Yeah, it's very it's very inefficient you mean You know the whole scaling issue It's there for a reason. I mean You can't really scale on chain If you if you want to scale then you need to increase the block size the block size is basically how many Transactions are allowed to be included in each block if each block is in 10 minutes And you can only include a thousand transaction in its block that means that's your throughput So if you want to scale you need to increase that block And then when you when you increase the block the blockchain gets huge and then you have this huge file which which like Size of a couple of terabytes or more which is what Bitcoin is trying to avoid That's why it's not increasing the block size and then you are actually Causing more centralization because you and I can't run a node anymore because the block is The blockchain is too big for our computer. So we have to buy a good computer to support that and then So this is when talking about Bitcoin, but blockchain It's it's not magical at all like it. It's very It's very powerful technology and if you use correctly it can literally When I say change the world, I mean it can like a theorem is very very like When people think about Bitcoin Bitcoin is one thing But if you now look at the theorem it created this whole new ecosystem But it's very limited in some ways. So private blockchains are probably bullshit and Blockchain for like every possible solution is also probably bullshit like when you look today at the coins that are available I mean, why do they exist? They okay, they they most of the coins claim to be some kind of a currency But why do you need it if you have a currency already a five or ten currencies that work on a blockchain? So I think definitely it's overused. It's the new cyber or the new IOT or the new cloud But at the same time it is really an amazing technology Yeah, so thanks for sharing your knowledge As we saw in my MIM coin and the value of the MIM coin himself is increasing pretty fast The result out of that is that nobody is spending the coin as a real currency or using it as a real currency And how can we motivate them to use it as a currency at the end? Yeah, so if you ask me, yeah, that's Bitcoin is is very bad money Very very bad. It's not it's a store. It's a it's an extremely good store of value But it's a very very bad money because it's it you have no incentive to use it essentially so You have a few solutions first you can introduce inflation if it's a controlled inflation Then it's probably a good thing because inflation is there for a reason if it's a controlled inflation though if it's not if you can't decide one day to you know and then I Mean yeah, probably Bitcoin as you know it now in my opinion won't be the currency of choice so I Don't have any more ideas of what what can be done Hello, thanks for the talk. I have a small question. What is secure witness? I heard something about that, but I don't know what it is. So Segwit is like it's a it's a Basically Mim coin is very very very simple and it has a lot of abstraction in Bitcoin What actually happens is that transactions are? scripts written in a special language and The thing called with the script which is the actually the I want to sound I it's not the digital signature, but it's like the It's the unlocking. It's the locking or unlocking script. I don't remember which one the the script that allows you to spend the money that you received They removed it from the from the blockchain itself so from the transaction so Block is one megabyte right so you can fit only X amount on transactions the reason is because each transaction takes space So the segwit essentially reduces the space that the transaction takes by removing the witness script out of the transaction in a clever way So this is the I think we should stay at this high level because otherwise it will get complex Some more questions. Is that is that a question? Well done. Thank you very much. Thank you guys