5 Bitcoin, Crypto, and Blockchain

This week we talk about what Bitcoin is, how it works in theory, how it works in practice, and what the criticisms are.

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Crypto

• Disclosure – I own 0.00666 Bitcoins
• What is a block chain
• What’s a transaction
  • On chain
  • Off chain
• Why is cryptocurrancy a thing?
  • Decentralized – No one entity owns it
  • Universal – Not tied to fiat currencies
  • Private – Can’t be tracked and tied to your personal identity
• How’s that worked?
  • As of April 3, 2022 the top 10,000 addresses or about 0.03% (0.0277794%) own about 60% (59.16%) meaning the remaining 99.97% own the remaining 40%
  • Until China banned mining in 2021 60-70% of all mining was in China
  • Universal – Can get around sanctions
  • Private – KYC
  • Fees on transactions can easily match Paypal, Stripe, or Credit Cards
• Criticisms
  • Volatility – It’s gambling
  • It’s insecure – By 2017 data breaches resulted in about 1 million bitcoin being stolen from exchanges
  • An estimated 20% of bitcoin have been lost due to people losing their private keys
  • Crime – Estimated to be about 3%, but transcations still happen between KYC exchanges and Russian black market exchanges
  • Climate

Sources
– https://mitsloan.mit.edu/ideas-made-to-matter/bitcoin-who-owns-it-who-mines-it-whos-breaking-law
– https://bitinfocharts.com/
– https://en.wikipedia.org/wiki/Bitcoin#Design
– https://news.climate.columbia.edu/2021/09/20/bitcoins-impacts-on-climate-and-the-environment/
– https://www.bbc.com/news/technology-56012952

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