Blockchain For Managers Additional Notes PDF

Blockchain for Managers: Students
Blockchain for Managers

Students Handbook

Program Management Team

Program Managers:

Camila Thury
Shewit Doherty
Victor Silva
Richard Magpantay

Email: students@productschool.com
Slack ID: @camila, @shewit, @victor, @richard

We’re here to help you with any questions about the course, student perks,
workshops, and logistics throughout the program. You can reach out to us via email
to students@productschool.com

In addition to that, please take a moment to read the student handbook where you
can find valuable information to help you get ready for the class.

UX Design
Course Syllabus
Week 1: ● Public vs. private blockchain technology
Introduction to the Blockchain ● Distributed ledger technology
● Cryptography
● Proof of work (vs. proof of scale)
● Consensus verification
● Regulation and Legal Frameworks
● Security (Attacks, Private Keys, DAO)
Week 2: ● Smart Contracts

Practical Applications ● Consensus Protocols & Byzantine Fault
of Blockchain-Based Products ● Use Cases & Applications of the Blockchain
● Successful companies/products leveraging blockchain
in different tech industries
○ (ecommerce, gaming, fintech, edtech, etc.)
● How can the industry you work in leverage the
blockchain?
● Regulatory Environment
● Examples of programming languages being used to
code on the blockchain
● Demonstration of building dapps on Ethereum and
overview of the different stacks
○ (DNSChain, Eris, Dapps, DOs, DOAs)
Week 3: ● Bitcoin

Cryptocurrencies and ICO’s ○ What is Bitcoin? vs Bitcoin cash? - Forks and
why they happen?
○ What can Bitcoin become?
○ What makes Bitcoin different?
○ Mechanics of Bitcoin transactions
○ What determines the price of bitcoin?
○ Can bitcoin become the global currency?
● Ethereum
○ What is Ethereum? Vs Ethereum Cash?
○ What are the applications of ethereum?
● Other Cryptocurrencies
○ Cover top 5 altcoins and their applications
○ Why the crazy volatility?
○ Why so many of these are going to fail?
○ Public and private keys
○ Anonymity
○ Safety
● ICO’s
○ What are ICOs?
○ Why are ICOs better/worse for entrepreneurs?
- Investors (VCs and buyers of coins)?
○ What does this mean for raising money and
the VC landscape?
○ How are ICOs di!erent than IPOs?
○ Regulatory landscape
○ Geographical landscape of ICOs (China, Korea,
○ UK are large players along the US)
Week 4: ● How to use GDAX, Bitstamp, Bittrex, Binance and other
Trade Cryptocurrencies pro tools to trade like a pro?
& Launch Your Own Coins ● Hands-on experience trading cryptocurrencies
● Cryptocurrency futures, ETFs and other emerging asset
classes
● Examples of secure wallets and vaults
● Examples of payment processing tools
● How to accept payments in cryptocurrencies?
● How to launch your own coin/do an ICO?
● Mechanics of ICO launch
● Companies handling the legality and operations of ICOs
● Case studies of successful ICOs - How to invest in an
ICO?
Week 1A
Introduction to the Blockchain
OVERALL AIM OF THE COURSE

Product School’s Blockchain for Managers Course is designed for
professionals who wish to learn how to trade cryptocurrencies and build
products using the blockchain.
The blockchain is regarded as the next revolutionary technology after the

Internet, which will transform every part of life.
Blockchain and Cryptocurrency jobs postings tripled from 2016 to 2017 and
are expected to grow at an even higher rate in the future.
Blockchain jobs offer salaries that are 20% higher than an average
equivalent tech industry job.
Blockchain is predicted to disrupt dozens of tech and non-tech industries
The market capitalization of cryptocurrencies rose from $17.7B at the
beginning of 2017 to $500B within a year.
You do not need to be technical or have any prior knowledge on the

blockchain or cryptocurrencies.
What will you learn in this course?
1. Fundamentals of the blockchain

2. Practical applications of the blockchain across major industries
3. Underlying technologies used to develop application on the blockchain
4. Cryptocurrencies (Bitcoin, Ethereum, altcoins)
5. ICOs and mechanics of launching an ICO
6. How to trade cryptocurrencies
7. How to write a white paper, “light paper” version

Learning Objectives:
LO1: Overview of Blockchain technology.
LO2: Overview with detailed examples of Blockchain applications.
Lecture Notes
What is a blockchain?
Brief history (initially created for digital currency bitcoin by a group or an
individual under pseudonym, Satoshi Nakamoto, is a revolutionary
technology that has found thousands of other applications)
● Created in 2008
● Satoshi disappears in 2011 but has a strong community to continue his
work (Great book for the history is Digital Gold).
● Satoshi created Bitcoin in response to Financial Crisis of 2008 because
banks failed the people, even the people who were not investing or
buying homes with mortgages.
● Satoshi imagined bitcoin:
○ peer to peer transaction in old days was 3 fish for 10 potatoes.
○ modern days: peer to peer is done through banks, it’s
institutional.
○ Satoshi wanted a real peer to peer transaction, you can trade as
an individual without middle men with trust and secure, you can
trust that the assets are actually being transferred.
Since then, the blockchain as a platform (protocol) has grown to be a

technology that has found thousands of other applications, besides just
Bitcoin.
● Think of bitcoin as an app on the app store, blockchain is the iPhone

Many noteworthy investors and entrepreneurs spoke about in support of the

blockchain technology
● Marc Andreessen, most known as the founder of Netscape and

Andreessen Horowitz (one of the top Silicon Valley Venture Capital
firms) has been an early supporter and investor in various blockchain
applications
○ He believes in the big future of Blockchain
Blockchain technology has given rise to hundreds of ventures that leverage

the blockchain technology across industries, including:
● Currencies
● Fintech
● Supply Chain
● Real Estate
● Music & Entertainment
● Sharing Economy
● Government
● others
Blockchain...is a digitized, decentralized, immutable public ledger that

facilitates transactions without going through an intermediary (i.e. bank or a
governing body). OK...Let’s break this down
Think of it as a database, like a Google Docs, where you can see the history
of when an individual contributor made a change, that is…:
● Public - not owned by anyone; blockchain database not stored in a

single location, so records are truly public and can be easily verified.

● Distributed - no single point of failure; stored across many computers
all over the world and not in a single location that it can be lost or
easily hacked.

● Synchronized - to keep information up to date constantly.

● Secured by cryptography to ensure that information cannot be
tempered with (deleted, changed, Added or hacked).

So how’s this actually possible?
● Distributed Ledger (or Distributed Ledger Technology)

● Definition of ledger (outside of blockchain) in layman’s term
- platform to store information, bookkeeping.
Taking the title of a house, what are the flaws/what could go wrong
with this ledger?
● Ownership might not be assigned correctly

● Escrow for payments will require a physical party to release funds
● Current ledgers for a house deed can be tampered with (delete OR add
a record)
● So you must spend a lot of time verifying and correcting
● This has led to the rise of a whole bunch of INTERMEDIARIES (banks,
DMV, title and mortgage companies, credit reporting companies)

So how’s the blockchain distributed ledger technology better than the

ledger used today?
● Smart contracts can automate and streamline the terms of a

transaction.

● Dependency between records / transactions (blocks): the next record
can only be written with the information of ALL the previous records in
it.

● Immutability: very difficult to tamper the previous blocks as all
previous and future blocks will have a copy of all the previous blocks.
To tamper the block, you’d need to hack and change all the previous.

● Consensus Algorithm: so let’s say someone did try to tamper a block,

the Consensus algorithm would run through the ledger and identify
the tampered block because it does not match with the information of
the previous blocks and then replacing it with the block with the right
information.

● So let’s think about how much time, friction, fraud and cost the
process with having the information (deed) on the house on the
blockchain vs. the way it is right now?
The need for establishing trust and simplifying the process will increase
exponentially. In 2020, 50B smart devices (7 times more than humans) that
we will need to build trust and make transactions with.
Let’s look at the individual components of blockchain:
● Transactions: Bob sends Alice 1 BTC.

● “Blocks” - most recent transactions that are recorded and added to it
in chronological order, this allows participants of the blockchain to
keep track of transactions without central recordkeeping. Each node (a
computer connected to the network) gets a copy of the blockchain,
which is downloaded automatically.
● “Chain”
● Nodes
● Trust Protocol - trusted transactions directly between multiple parties
are authenticated by mass collaboration and powered by collecting
self-interest instead of large corporations or governments.
● Cryptography.
● Hashing:
○ Input (any form: character, entire novel, spreadsheet, even entire
Internet, can be infinitely big) > hashing algorithm (many
publicly available tools ) > Output Hash (Finite number of bits
i.e. 256 bit)
■ Examples: Files that are downloaded on the internet
■ Genesis Hash
■ How hashes in subsequent blocks are created based on
previous blocks
■ Why tampering is easy to detect
■ Why this is awesome

● Digital signatures
○ Used to prove that someone is who they say they are
○ Handwritten signatures can be easily forged
○ How digital signatures are better?
■ SSL to establish trust between user and server
■ Public + Private keys

● Proof of work (vs. proof of stake, vs. delegated proof of stake)
● Digitalization
● Decentralization
● Immutability
○ Publishes to the ledger to everyone at once and is indestructible
So, how can blockchain be truly revolutionary?
Internet has changed the world and Blockchain is addressing some of the
existing problems we still face across the board
Benefits to using the blockchain as a framework:
● Email, world wide web, social media, mobile web, big data, cloud
computing, IoT
● Blockchain reminds many of us of the emergence of the internet.
● Reduced cost of searching, collaborating, exchanging information,
e-commerce
● Expediting transactions to the milliseconds
● Assigns transactions to irrefutable parties
● Self-sovereign identity
But what are the outstanding problems?
● Establishing correct identity

● Transactions without a third party (bank, government)
● High transaction fees
● Double spending
● Invasion of privacy for commercial gain and national security
● Exclusion of over 2.5B people from financial system
● Identity theft, phishing, spying, hacking, cyber bullying, etc
● Computer power & electricity needed to support mining operations
● Regulation and Legal Frameworks (expect these to be constantly
changing)
● Security (Attacks, Private Keys, DAO)
● You are not necessarily anonymous as ip addresses can be captured

aka pseudonymous
● Public vs. private blockchain technology

Week 1B
Cases & Applications of the Blockchain

● Finance:
○ Cryptocurrency (Bitcoin): faster, less expensive as cut out
middlemen, more secure, more transparent
○ Remittances & International transfers: Western Union takes up
to 10% of the transaction amount and 4-7 days. With
blockchain, this would take 10 minutes and significantly less
$$$, currently Abra delivers the amount in cash to someone in
Manila, Philippines in under 30 minutes (Don Tapscott, Ted
Talk)
○ Smart Bonds
○ Audit & Compliance
○ Insurance
○ Asset Management: Trade processing and settlement

● Sharing Economy:
Blockchain can replace the middlemen, such as Uber and Airbnb,
connecting drivers directly to the passengers, processing payments
upon arrival, submission of positive review or expiration of 24 hours
post stay without complaint, collection of reviews and rating
(“reputation”). An argument can be made that there’s no need for
these multi billion dollar companies that act as middlemen ($25 and
$60B in valuation)

● Real Estate:
○ Smart (self-executing) contracts
○ Mortgage approval, financing verification
○ Reduction of fraud
○ Land title/property rights management
○ Data:
■ “Every real estate transaction goes through the multiple

listing service (MLS), which tracks what agents represent
which clients, contracts, listing agreements, appraisals and
more. However, the MLS is notoriously fragmented. The
information is decentralized and restricted, making access
difficult for people who are not real estate professionals.
It’s often out-of-date as well, which hampers an agent’s
ability to make comparisons and spot trends.

■ Blockchain technology can be used to overcome these
barriers within the MLS. By providing a way to securely
share data, the blockchain makes a shared, nationwide
database possible, one that offers real-time access to
property information straight from the source and enables
a more holistic view. It also opens up more opportunities
for collaboration among players in the real estate industry.

● Music & Entertainment:
○ IP Rights attribution
○ Royalty distribution
○ Speed of payout to musicians
○ Alternative sources of capital
Companies in the space: HelloSugoi, Mycelia, Ujo Music, dotBlockchain
● Internet of Things (IoT):

○ Supply Chain: track locations of good and times when they are
shipped, track the conditions have been kept at the agreed
terms
○ Asset tracking: Record activity levels of assets and machinery
○ Healthcare: Enable sharing and editing of medical records by
various parties with different permission levels, encrypt data
○ Smart appliances: Devices (oven, laundry machine, pot, AC, car)
are connected on the blockchain to stop when the chicken is
cooked, the laundry is finished. This saves energy, prolongs the
life of appliances and keeps you informed.
Overview of companies/products leveraging blockchain in different tech

industries (ecommerce, gaming, fintech, edtech, etc.)

(Sharing economy) Uber equivalent:
● Case study on Lazooz: A Decentralized Transportation Platform owned

by the community and utilising vehicles` unused space to create a
variety of smart transportation solutions. By using cryptocurrency
technology La`Zooz works with a “Fair Share” rewarding mechanism
for developers, users and backers.
(http://lazooz.org/)

● ArcadeCity - (https://arcade.city/)

(Sharing Economy) Airbnb equivalent:
Case study on BeeToken “Future of home sharing”, raised $5M, founded by
ex Uber developers; (https://www.beenest.com/)
● instead of paying in dollars or euros, guests use site-specific tokens to

rent rooms that they purchase using either bitcoin or ether (paying for
the tokens with credit cards will become possible at a later date, the
startup says).

● The other big difference compared to Airbnb: while the former charges
hosts 15% on every transaction on its platform, with Bee Token, hosts
will pay no fees to rent out their rooms. The platform, which is
soft-launching in the next three weeks, plans to make money from
licensing its technology to other startups, and by charging fees of
1%-2% if users choose to pay for rooms using bitcoin or ether instead
of buying tokens. (Token systems incentivize users to buy into their
currency to push up its value.)

● In the beginning, the platform will settle disputes using a five-person
arbitration team randomly selected from its user-base (they’ll be
rewarded with tokens for their trouble). Over time, Chou says the
self-executing smart contracts will decide everything. In other words,
disputes will be settled according to contractual computer code.

(Social Media) Reddit equivalent
● Case study on Steemit: A blogging and social networking website on

top of the Steem blockchain.

● Steemit is a social network that looks and functions a lot like Reddit,
but with one HUGE difference:

● Steemit pays both the content creators when their work gets upvoted,
as well as the people who curate the best content on the site by
upvoting others work.

● Steemit platform is built on top of a new kind of digital currency called
Steem.

● Every day, new units of the currency are created by the network and
distributed to its users, who can exchange these digital currency units
for actual real money.
(Social Media) Youtube equivalent
● Case study on DTube

● D.Tube aims to become an alternative to YouTube that allows you to
watch or upload videos on IPFS and share or comment about it on the
immutable STEEM Blockchain, while earning cryptocurrency doing it.

● Because of the decentralized nature of IPFS and the STEEM blockchain,
D.Tube is not able to censor videos, nor enforce guidelines. Only the
users can put a censorship, through the power of their upvotes and
downvotes.

● On DTube, there are no hidden algorithms controlling the visibility or
monetization of certain videos over others. All of DTube's data is
public, and can be analyzed by anyone with an internet connection.

● To deliver the best user experience D.Tube runs without advertising.
Users remain free to advertise any product or service they would like,
directly inside their own videos, at their own risk of losing their
subscribers.
Large established companies incorporating blockchain:
(Supply chain) Walmart blockchain:
● Can track the history of mangos it sells in 2 seconds, a process that

would alternatively take over 6 days using standard tracking methods
(http://fortune.com/2018/01/16/ibm-blockchain-maersk-company/)

● (Tracking) IBM/Maersk blockchain:
○ intends to help shippers, ports, customs offices, banks, and
other stakeholders in global supply chains track freight as well
as replace related paperwork with tamper-resistant digital
records.
○ The pilot traced a container of flowers that sailed from
Mombasa, Kenya to Rotterdam in the Netherlands
(Ownership) Kodak blockchain:
KODAKOne platform will create an encrypted, digital ledger of rights

ownership for photographers to register both new and archive work that they
can then license within the platform. With KODAKCoin, participating
photographers are invited to take part in a new economy for photography,
receive payment for licensing their work immediately upon sale, and for both
professional and amateur photographers, sell their work confidently on a
secure blockchain platform.
● Facebook: Zuck said TBD

● Amazon AWS invests and launched partnerships with a number of
blockchain based companies
● Google is the second largest backer of blockchain companies (after SBI
Holdings):
○ its investments include cryptocurrency derivatives-trading
platform LedgerX, data storage provider Storj, and merchant
services provider Veem.
● Overstock.com’s tZERO launches $250M ICO
Investment into blockchain companies:
Overview of how much VC/ICO funds raised towards blockchain companies:

around $1.2B as of early January 2018

The largest ICOs/VC-backed blockchain companies:

Top Blockchain investors.
1. SBI Holdings
2. Google
3. Overstock.com
4. Citigroup
5. Goldman Sachs
Week 1 Activities
FINAL PROJECT - Write your own White Paper
1. Name of your Blockchain Technology Project

2. Define the Problem
3. Explain why the blockchain solution is better
4. How does your technology work for this particular solution workflow.
a. Define players.
b. Describe ecosystem.
c. Define interactions (include diagrams)
5. What blockchain/smart contract protocol would you choose and why?
6. What is the token sale mechanic? Why?
7. How does your coin get allocated?
8. How would you use the proceeds from the ICO?
9. What's vesting schedule?
10.Introduce your team.
Document that describes your blockchain project

Filecoin White Paper “Light” | AdChain White Paper “Light”
https://coinlist.co/filecoin | https://adtoken.com/overview/
Project Options: Pick one
1. Sharing Economy: Ride sharing company (“Blockchain equivalent of

Uber”)
2. IoT: Supply chain tracker for a US-based e-commerce company
manufacturing t-shirts in China and selling online in the US

3. Music industry: Service helping songwriters whose songs are streamed

on Spotify to:
a. Get paid for royalties
b. Track number of streams
c. Get connected with others who want to buy the rights to use
their music
Exercise
1. Create a new Google Doc file

2. Name it “PS Blockchain [First] [Last Name] [Sharing Economy OR IoT
OR Music]
3. Name of your Blockchain Technology Project
4. Define the Problem
5. Explain why the blockchain solution is better
6. Explain why you think you need a token on your platform
Exercise: Define the Problem
Example for Define the Problem from FileCoin: “The world’s storage is vastly
underutilized: More data will be created in 2017 than the previous 5,000
years of humanity. Yet around 50% of the world’s storage sits unused —
from hard-drives in basements to data centers. Filecoin creates a frictionless
market to put this extra storage to work. With significantly more supply, we
can drop the price of storage and meet growing demand.”
Exercise: Why Blockchain solution is better
● Example from FileCoin:

Decentralization creates a better network/Disintermediation
Filecoin uses IPFS, a peer-to-peer hypermedia protocol to make the
web faster, safer, and more open. Each file has a unique fingerprint
called a cryptographic hash. Indexing files by hash allows us to find
and distribute high volumes of data with high efficiency. The
peer-to-peer network rebalances and recovers in response to events,
keeping data safe and flowing.

● Filecoin is a token with fundamental value
Today’s blockchains use wasteful Proof-of-work consensus. Filecoin is
like Bitcoin, but with hard drives instead of hashers. The novel
Proof-of-Replication function creates a useful and valuable storage
service as a byproduct of the mining process. Miners are incentivized
to be efficient: the more they store, the more filecoin they earn.
Week 2A
Smart Contracts & Consensus Protocol

LO1: What are “Smart Contracts”?
LO2: The purpose of “Smart Contracts” on the Blockchain
LO3: What is Consensus Protocol and which are the main objectives
Lecture Notes
Smart Contracts or “Self-executing” Contracts
What are Smart Contracts?
● “Smart contracts” is not the best name; They are neither “smart”
or“contracts; they are “stored procedures”

● Program that runs code, validates conditions and automatically
determines whether a certain asset (cryptocurrency or ownership of a
house) should go person one or refunded to another person.

● Operate on conditional statements - “if-then premise”

● Code that runs on Ethereum’s platform

● Smart contracts already exist to an extent, outside of the

blockchain.Example: Auto-bill pay (recurring subscription payments)
(if it’s first of the month, then deduct payment).
Example of Smart Contract Use Case:
“Suppose you rent an apartment from me. You can do this through the
blockchain bypaying in cryptocurrency. You get a receipt which is held in our
virtual contract;
I give you the digital entry key which comes to you by a specified date. If the
key doesn’t come on time, the blockchain releases a refund. If I send the key
before the rental date,the function holds it releasing both the fee and key to
you and me respectively when the date arrives.
The system works on the If-Then premise and is witnessed by hundreds of
people, so you can expect a faultless delivery. If I give you the key, I’m sure
to be paid.
If you send a certain amount in bitcoins, you receive the key. The document
is automatically canceled after the time, and the code cannot be interfered
by either of us without the other knowing since all participants are
simultaneously alerted.
You can use smart contracts for all sorts of situations that range from
financial derivatives to insurance premiums, breach contracts, property law,
credit enforcement,financial services, legal processes and crowdfunding
agreements.”
What do smart contracts do?
● Convert contracts that are currently on paper to code○Stored and

supervised by the blockchain○Contracts automatically update, validate
conditions and take the next step(i.e. transfer money when product is
received)

● Cut out the middlemen

● Facilitate decentralized escrow

Use cases
● Government:
○ Hacking would become infinitely more difficult
○ Higher turnaround: It is believed that many (especially
millennials) fail to vote because of the cumbersome processing
of showing up, showing IDand completing forms.
○ With smart contracts, voting can be done online and will also
reduce chance of double counting

● Management:
○ No more discrepancies: Many business deals are complicated by
the discrepancies that occur when opposite sides keep their own
records and independently process information. This even leads
to lawsuits and costly settlements later. With smart contacts,
there is just one single ledger,which is accurate, transparent and
automated.

● Supply Chain:
○ “UPS can execute contracts that say, ‘If I receive cash on delivery
at this location in a developing, emerging market, then this
other [product], many, many links up the supply chain, will
trigger a supplier creating a new item since the existing item
was just delivered in that developing market.”’
All too often, supply chains are hampered by paper-based
systems, where forms have to pass through numerous channels
for approval, which increases exposure to loss and fraud.
The blockchain nullifies this by providing a secure, accessible
digital version to all parties on the chain and automates tasks
and payment. (Jeff Garzik)

● Healthcare:
○ Expenses and bills from medical visits and procedures can be
automatically sent to insurance companies and settled. The
blockchain records would also be available to help the insurance
company make decisions on payouts

Real Life Use cases:
● “In 2015, the Depository Trust & Clearing Corp. (DTCC) used a
blockchain ledger to process more than $1.5 quadrillion worth of
securities,representing 345 million transactions.”

● Barclays Corporate Bank uses smart contracts to log change of
ownership and automatically transfer payments to other financial
institutions upon arrival.
How are they better than regular contacts?
● “Code as Law”; Reduce disputes

● Reduce human error
● “Self-executing”; Save time and administrative work due to increased
automation
● Enhance trust
● Reduce involvement of middlemen
● Faster transactions
What are the limitations of smart contracts?
● Cannot ascertain certain non-objection extrinsic events / values (i.e.

did the party put best efforts into coming up with the best possible
recommendations?
Did the painters paint the wall to the best satisfaction of their clients
and all regulations?)

● Currently still require legislative intervention, which would require the
court to have a private key to be able to “undo” certain conditions

● System outages and bugs are always a potential riskSource:
https://www.coindesk.com/when-is-a-smart-contract-actually-a-co
ntract/
Consensus Protocol:
What is Consensus?
“Consensus decision-making is a group decision-making process in which
group members develop, and agree to support a decision in the best interest
of the whole.Consensus may be defined professionally as an acceptable
resolution, one that can be supported, even if not the “favourite” of each
individual.
Consensus is defined by Merriam-Webster as, first, general agreement, and

second, group solidarity of belief or sentiment.”
Note: consensus is a dynamic way of reaching agreement in a group.

While voting just settles for a majority rule without any thought for the
feelings and well-being of the minority, a consensus on the other hand
makes sure that an agreement is reached which could benefit the entire
group as a whole.
What are the objectives of reaching consensus?
● Agreement Seeking:
A consensus mechanism should bring about as much agreement from
the group as possible.

● Collaborative:
All the participants should aim to work together to achieve a result
that puts the best interest of the group first.

● Cooperative:
All the participants shouldn’t put their own interests first and work as
a team more than individuals.

● Egalitarian:
A group trying to achieve consensus should be as egalitarian as
possible. What this basically means that each and every vote has equal
weightage. One person’s vote can’t be more important than another’s.

● Inclusive:
As many people as possible should be involved in the consensus
process. It shouldn’t be like normal voting where people don’t really
feel like voting because they believe that their vote won’t have any
weightage in the long run.

● Participatory:
The consensus mechanism should be such that everyone should
actively participate in the overall process.

What is Consensus Protocol ?
= “Mechanism by which consensus is reached”

Examples: Proof of Work, Proof of Stake
● Some others to keep in mind are proof of activity, proof of capacity,

proof of burn,and proof of elapsed time as noted here:
https://www.coindesk.com/short-guide-blockchain-consensus-protoc
ols/
● So, what consensus protocol or mechanism should be used for the
Blockchain?
Note: there were various peer to peer decentralized currency systems
prior to Bitcoin,however, they were not successful because they did not
offer an effective way to reach consensus.
Why is it important?
Byzantine Two Generals Problem
“This problem (first published in 1975 and given its name in 1978) describes
a scenario where two generals are attacking a common enemy.
General 1 is considered the leader and the other is considered the follower.
Each general’s army on its own is not enough to defeat the enemy army
successfully, thus they need to cooperate and attack at the same time.
This seems like a simple scenario, but there is one caveat:

In order for them to communicate and decide on a time, General 1 has to
send a messenger across the enemy’s camp that will deliver the time of the
attack to General2.
However, there is a possibility that the messenger will get captured by the
enemies and thus the message won’t be delivered.
That will result in General 1 attacking while General 2 and his army hold
their grounds.
Even if the first message goes through, General 2 has to acknowledge (ACK,
notice the similarity to the 3-way handshake of TCP ) that he received the
message, so he sends a messenger back, thus repeating the previous scenario
where the messenger can get caught.
This extends to infinite ACK’s and thus the generals are unable to reach an
agreement.
There is no way to guarantee the second requirement that each general be
sure the other has agreed to the attack plan. Both generals will always be
left wondering whether their last messenger got through.”
Since the possibility of the message not getting through is always > 0, the
generals can never reach an agreement with 100% confidence.
The Two Generals Problem has been proven to be unsolvable.
2. Byzantine Generals Problem:
”Generalized version of the Two Generals Problem with a twist

It describes the same scenario, where instead more than two generals need
to agree on a time to attack their common enemy. The added complication
here is that one or more of the generals can be a traitor, meaning that they
can lie about their choice (e.g. they say that they agree to attack at 0900
but instead they do not).”
Byzantine Fault Tolerance
System that tolerates and address the failures that belong to Byzantine
GeneralsProblemIt has no assumptions about the kind of behavior a node
will have (any node can generate arbitrary data or take arbitrary actions
while posing as an “honest” actor)There are many applications for this.

Examples: airplane engine systems, nuclear power plants, any system whose
actions depend on the results of a large amount ofsensorsWorks as long as
number of traitors does not exceed ⅓ of all generals (Bitcoin TrustProtocol
requires 51% consensus)
So how does this all relate to the Blockchain?
There’s a high incentive for bad actors to cause faults due to high economic
value plus there’s no central authority to manage and fix the damage;
therefore BFT is much needed to protect the systemConsensus Protocol, in
case of Bitcoin = Proof of Work, was a huge breakthrough as a probabilistic
solution to Byzantine General Problem.
Week 2B
Technical Stack
LO1: What are the technical specification of a public Blockchain
LO2: Most commonly used “programming languages” for some

cryptocurrencies
Lecture Notes
Programming languages being used to code on the blockchain
What are some of the technical specifics/needs of the public blockchain?
● Security - must be highly secure because if hacked, billions of dollars

are at stake
● Open-source - public code that can be seen by everyone
● Interaction with various untrusted endpoints while still giving quick

service to allnodes
● Isolation: All transactions must be deterministic, meaning the
workflow is consent throughout the platform (ex: “Hash functions are
deterministic, meaningA’s hash will always be H(A)”).
● Resource Management: Need to keep pace with the network demands
reference: https://blockgeeks.com/guides/blockchain-
Bitcoin languages:
● The reference implementation, Bitcoin Core, is written primarily in

C++, with various resource files and scripts in other languages.
Another implementation,mainly used in lightweight clients like
MultiBit and Bitcoin Wallet (Android), is bitcoinj. It is written in Java.

● However, most algorithms used in Bitcoin have been written in almost
every language.
Ethereum languages:
● Solidity: Programming Language for Smart Contracts which runs on

EthereumVirtual Machine on Blockchain. It is a contract-oriented,
high-level language whose syntax is similar to that of JavaScript and it
is designed to target theEthereum Virtual Machine

● Serpent, Python-like with extension .se,

● 3rd, LLL, based on Lisp.
Other programmable Blockchain languages:
● NEO - Microsoft.net, Java, Kotlin, Go, Python;

● QTUM - C, C++, Rust, Haskell;
● Stratis - C#; WAVES - C++;
● EOS - C#, Java; Lisk - Javascript
The Blockchain Technology Stack consists of the following:
● User Experience
● Application Layer
● Blockchain Protocol
○ Transaction Record (distributed ledger)
○ Consensus Rules (cryptography)
○ P2P Computer Network (nodes, mining, tokens)
The Blockchain Technical Hierarchy is organized as follows:
● “Products sit at the top of the stack and are what end users interact
with. Theseare often standalone assets: cryptocurrencies and tokens.
Sometimes these assets serve a function within larger products called
smart contracts orde centralized applications (dapps). Tokens are
generally built by developers on top of a platform.

● Platforms are a kind of middleware. Platforms facilitate the creation of
products(in this case, tokens) and are usually associated with things
like IDEs, high level languages, compilers, and other tools. These
platforms, along with the products built on top of them, abide by
conventions and procedures defined in their respective protocols.

● Protocols are the set of rules that govern the network. Blockchain
protocols usually include rules about consensus, transaction validation,
and network participation. Protocols are often dependent on economic
incentives—which generally means the protocol hinges upon an asset.”
● Demonstration of building dapps on Ethereum

● Scalability issues and existing solutions:

○ Lightning as a scalability solution for bitcoin:
https://arstechnica.com/tech-policy/2018/02/bitcoins-lightning
-network-a-deep-dive/
○ Proof of Stake as a scalability and speed solution for Ethereum

Week 3A
Cryptocurrencies & Token Mechanics

LO1: Understanding differences in some Major cryptocurrencies.
LO2: What are tokens? What types of tokens exist.
Lecture Notes
Warning: As with many definitions in blockchain / crypto space, a lot of
these definitions are not set in stone, so you may have heard a different
name for the same concept we’ll cover here.
How to think of a token?
“One way to think about the token model is to imagine if the internet and
web hadn’t been funded by governments and universities, but instead by a
company that raised money by selling off domain names.
People could buy domain names either to use them or as an investment

(collectively,domain names are worth tens of billions of dollars today).
Similarly, domain names could have been given out as rewards to service
providers who agreed to run hosting services, and to third-party developers
who supported the network.
This would have provided an alternative way to finance and accelerate the
development of the internet while also aligning the incentives of the various
network participants.”
Why do we need tokens?
● Decentralizing the power of proprietary services / large companies

● Fund operating expenses required to host it as a service
● Provide a model for creating shared computing resources (including
databases,compute, and file storage) while keeping the control of
those resources decentralized (and without requiring an organization
to maintain them)
● Align incentives among network participants (users, core developers,
third-party developers, investors, service providers):
○ Growth of the network
○ Appreciating of the token value
There are different types of tokens...others also exist and are variations
/ hybrids of these:
1. Cryptocurrency, Currency Tokens

2. Tokenized Securities
3. Utility Tokens
4. Asset Tokens
5. Reputation/Reward Tokens

1. Currency Tokens
“Currency tokens, coins, or cryptocurrencies are digital tokens that act

as online currencies that can be used to buy and sell goods and
services and can be held as a store of value.
The main differences between cryptocurrencies and digital versions of

fiat currencies are that cryptocurrencies are decentralized and thus
function independently of a central bank, they do not require the use
of a financial intermediary, and they use cryptography and a
peer-to-peer network to ensure transaction security.
The most prominent example of this would be the world’s leading

digital currency,bitcoin.”
2. Tokenized Securities
“Tokenized securities, also known as equity tokens or security tokens,

represent a share in a company that has completed a token sale.
Tokenized securities are,therefore, effectively similar to stocks and
imply ownership and control.Tokenized securities now fall under the
regulatory scope of the U.S. SEC and several other global regulators
since they have been deemed securities under securities laws.
An example of tokenized securities would be the new tokens from the

upcoming tZeroICO, which is a portfolio company of Overstock Inc.
that is developing a regulated token trading platform.”
3. Utility Tokens
“Utility tokens, also referred to as app coins or user tokens, provide

access to a company's platform, product, or service. Unlike tokenized
securities, utility tokens are not actually designed as investments and,
therefore, do not fall under any regulatory restrictions (yet) in
countries where ICOs are permitted.
An example of a utility token would be the filecoin token. Filecoin

raised over$250 million – one of the largest ICO to date – through
the sale of its token that will enable access to its decentralized cloud
storage service.
Utility tokens are not designed as investments; however, many people

contribute to utility token ICOs with the hope that the value of the
tokens will increase as demand for the company’s product or service
increases.
Utility token price fluctuations can be compared to those of sporting
event tickets. The value of a ticket to a future sporting event may
increase if one or both of the teams wins a significant number of
games and becomes a contender for the championship.
On The other hand, that same ticket may decrease in value if a star
player suffers an injury or a team goes on a prolonged losing streak.
(Utility tokens are speculative).

How does it compare to equity tokens?
While both equity and utility token prices may fluctuate, the key
difference is that equity tokens entitle the holder to ownership rights,
while utility tokens function as coupons and do not provide holders
with an ownership stake in a company’s platform or another asset.”

4. Asset Tokens
“Asset tokens are digital tokens that represent a physical asset or
product. A great example of asset tokens would be tokenized gold.
Startup projects such as Goldmintare digitizing and tokenizing physical
gold holdings to allow investors to purchase difficult-to-store physical
assets such as gold online.They are generally not as popular among
investors because the value of the tokens does usually not exceed the
value of the asset and thus have less upside potential than other types
of tokens.”
5. Reward Tokens
“Finally, there are also reputation and reward tokens, which are given
as rewards trousers on a platform. They can symbolize a user’s
reputation or simply a reward for being active on a specific blockchain
platform.These type of tokens are difficult to value and are thus not
very popular among investors (speculators). An example of this would
be Steem Power on the blockchain-powered social media network
Steemit.”
Here’s one of the proposed frameworks to classify a token
(Many others exist and will emerge)
● Purpose:
What is the token’s main purpose? What is it designed to do? This

dimension illustrates why the people who call any token a
cryptocurrency err.Tokens can certainly be intended as a
cryptocurrency. But often they are meant to enable a specific network
and catalyze its growth (network tokens) or merely present a way to
invest in an entity or asset (investment token).
● Utility
The term “utility token” has become commonplace¹ but there are
various types. When looking at different tokens, you’ll find many
approaches to creating utility for token owners. But on an abstract
level, there are two major ways to provide utility: by giving access to
network or service features (usage tokens) or by allowing token
holders to actively contribute work to the system (work tokens).
Some tokens do both (hybrid tokens) and some tokens don’t provide
any utility at all.
● Legal Status
The legal perspective is extremely relevant as of now, so it is reflected

in the framework. The category’s content, however, is expected to
change quite a bit in the upcoming months as it is a volatile
environment and more regulation is expected to emerge. Moreover,
every jurisdiction can differ.The general outline of the current state in
multiple countries is that tokens which aren’t clearly a utility token —
i.e. a means to access features of a network/service — or which aren’t
a pure cryptocurrency can easily be classified as a security token by
regulators. In some jurisdictions, such as Germany, there is some
definition by regulators as to what constitutes a cryptocurrency.
Several cases we found hover between two types, due to the fact that
current legal frameworks have been created before tokens existed and
most haven’t been updated so far. (This isn’t legal advice).
● Underlying Value
Most tokens are created to have a monetary value. But the sources of
their value differ considerably. Some basically work as IOUs to
areal-world asset which they are tied to (asset-backed tokens). Others
showcasestock-like properties as they are linked to the commercial
success of the issuing entity. Those share-like tokens would be
regarded as securities in most jurisdictions (actual enforcement by the
regulator is a different subject).
Finally,there are tokens which are tied to the value of a network, not a
central entity(network value tokens). The latter might be the hardest to
wrap one’s head around and the most interesting value source at the same
time.
● Technical Layer
Tokens can be implemented on different technical layers of

blockchain-based systems: on the blockchain level as the chain’s
native token (blockchain-native tokens), as part of a crypto-economic
protocol that sits on top of the blockchain (non-native protocol
tokens), or on the application level ((d)App tokens).
Bitcoin
Type of digital asset that can be bought, sold or transferred between parties
securely over the internet:
● Store value (i.e. gold, silver, other types of investments)

● Form of digital currency make payments electronically
● (Form of speculation)
How is it different from other types of currency, like fiat?
● No physical coins, same could be said for fiat, however...

● No central authority or any type of 3rd party clearing house (trust is
built into the network protocol)
● Therefore, no single point of failure
● You send Bitcoin directly to another party (securely and almost
instantly)
● Record of the transaction is kept across hundreds, possibly millions of
nodes(immutable)
● 24/7 market (bitcoin doesn’t close on the weekends)
● Some coins, like bitcoin, have a hard-coded fixed supply
● Censorship resistant
Why can’t you send money like an email?
● With money exchange, you need to make sure that both parties have
held their side of the bargain and done what they were supposed to
● For example, when sending a photo, you are simply sending a COPY of
that image
● This is called a double-spend problem, meaning I could send the
same$100 to both you and another person, effectively making it $200,
which is illegal (before bitcoin, code had no intrinsic value)
● Therefore, we needed authorities and clearing houses to mitigate the
problem (acting as the source of trust)
● But with the blockchains, on which Bitcoin is built, the double spend
problem is addressed
So how’s it possible to send Bitcoin without a third party authority or

clearinghouse? As a review!
● Blockchain keeps decentralized record of all the transactions that have

taken place on the Blockchain
● The data is stored and verified across thousands and possibly millions
of nodes
● No need for a trusted 3rd party. The network is economically
incentivized to act as a source of truth.
Bitcoin CashThe Difference Between Bitcoin and Bitcoin Cash
● Bitcoin scalability problem was the trigger for the hard fork and
creation of Bitcoin Cash:
“Since its inception, there have been questions surrounding Bitcoin’s
ability to scale effectively and it’s really slow.
○ Visa processes 150 million transactions per day, averaging out to
roughly 1,700 transactions per second. And their capability far
surpasses that, at 24,000 transactions per second.

○ How many transactions can the Bitcoin network process per
second? 3-4,7 at most.

○ Transactions take about 10 minutes to process. And as the
network ofBitcoin users grows, waiting times will get longer,
because there are more transactions to process without a change
in the underlying technology that processes them.

● The latest debates around Bitcoin’s technology have been concerned
with this central problem of scaling and increasing the speed of the
transaction verification process. There are two major solutions to this
problem, either to make the amount of data that need to be verified in
each block smaller, making transactions faster and cheaper or to make
the blocks of data bigger, so that more information can be processed
at one time.
● Bitcoin Cash is a different story. Bitcoin Cash was started by Bitcoin
miners and developers equally concerned with the future of the
cryptocurrency, and its ability to scale effectively.
These individuals had their reservations about the adoption of a
segregated witness technology, though.
They felt as though SegWit2x did not address the fundamental

problem of scalability in a meaningful way, nor did it follow the
roadmap initially outlined by Satoshi Nakamoto, the anonymous party

that first proposed the blockchain technology behind cryptocurrency.
Furthermore, the process of introducing SegWit2x as the road forward

was anything but transparent, and there were concerns that its
introduction undermined the decentralization and democratization of
the currency.
● On August 1st, 2017 some miners and developers initiated what is
known as a hard fork, effectively creating a new currency: Bitcoin Cash.

● Bitcoin Cash has implemented an increased block size of 8mb, to
accelerate the verification process, with an adjustable level of difficulty
to ensure the chain’s survival and transaction verification speed,
regardless of the number of miners supporting it. This has raised
concerns about the security of Bitcoin Cash.”
Forks and Why they happen?Why do forks happen?
Most common forks (they get resolved):
When different miners discover a block at the same time. This situation
presents two blocks essentially competing for the position of the longest
chain. This fork doesn’t result in a split of the blockchain because it is
resolved once the next block is added to one of these competing blocks and
not the other. Wherever this newest block is added will determine which
chain is longest. The longest chain will be considered valid,while the other is
invalid, or also called orphaned. The miner of the valid block will be given
their block reward while the miner of the orphaned block will receive
nothing.
Unlike the forks described earlier, soft forks and hard forks are results of
decisions made by the network of the blockchain.
1. Soft forks:
Commonly referred to as backward compatible, or also, a tightening of

the rules.
Basically this means that soft forks happen when the network wants to
make changes to the rules of their blockchain that will enable nodes
that do not upgrade to still agree on the new rules and still consider
the new blocks to be valid.
2. Hard forks:
Change the rules of the blockchain in such a way that requires allnodes
to upgrade.
The consequences of not upgrading will result in miners creating

blocks that the upgraded nodes will consider invalid, resulting in them
missing out on block rewards.
A blockchain splits when a hard fork occurs and for whatever reason,
but most of the time the reasons seem to be political or philosophical,
a group of miners,nodes and developers decide to continue mining,
validating and building onto the chain with the original or older set of
rules.
Examples:
● Ethereum Classic:
○ Ethereum is the chain that decided to change the rules- in this
instance it was in regards to past transactions.
○ A blockchain can also split when a group of miners, nodes and
developers have decided they want to change the way that
blockchain should work. They take it upon themselves to create
new rules, and split from the original blockchain to pursue their
own goals.
This can be seen with the latest Bitcoin Cash and BitcoinGold hard forks.
Token Mechanics: MV=PQ
Another way to think about evaluation tokens:“The equation of exchange is

MV = PQ,:
● M = size of the asset base

● V = velocity of the asset
● P = price of the digital resource being provisioned
● Q = quantity of the digital resource being provisioned
A crypto asset valuation is largely comprised of solving for M, where

M = PQ / V. M is the size of the monetary base necessary to support a
crypto-economy of size PQ, at velocity V.
Let’s start with P and Q, as those seem to trip people up the most. The first
thing to note is that P does not represent the price of the crypto asset, but
instead the price of the resource being provisioned by the crypto network.
For example, in the case of Filecoin it
would be the price per gigabyte (GB) of storage provisioned, represented as
$/GB. Q represents the quantity of that resource provisioned, in the case of
Filecoin the GBs of storage. Multiplying $/GB x GB = $.
This dollar amount represents the exchange of value in the Filecoin economy
to provision cloud storage (and whatever other utilities Filecoin may provide
over time). In other words, it is the GDP of the Filecoin economy, which fits
with classical monetarism where PQ is the gross domestic product (GDP) of a
country. Fortunately for crypto folks,we have transparent and immutable
ledgers to track this GDP—they’re calledblockchains.Hence, the GDP of a
crypto network is represented by the on-chain transaction volume of its
crypto asset.V: velocity shows the number of times an asset changes hands
in a given time period.Re-arranging MV = PQ, we can calculate V = PQ / M.
Taking bitcoin in 2016 as an example, that year the network processed an
average of $160 million in estimated USDtransaction value per day, for a
total of $58 billion in the year (PQ). The average size of bitcoin’s asset base
through 2016 was $8.9 billion (M). Hence, V = $58B / $8.9B, or 6.5.
A velocity of 6.5 means that in 2016 each bitcoin changed hands 6.5 times.
In reality, a small percentage of bitcoin in the float likely exchanged hands a
lot more than that,while a larger percentage sat locked in holders’ hands, but
more on that later. Forperspective, the velocity of the USD M1 money stock is
5.5 right now, though this has declined precipitously since the Financial
Crisis of 2008 (increase M significantly, whilePQ squeaks along, and V is
bound to decline).
M: Note that I have used an average size of bitcoin’s asset base through the
year, which is necessary due to the inflationary nature of the asset.

Accounting for an expanding monetary base is particularly important for
younger crypto assets that could be classified as hyper-inflationary with

annual rates of supply increase that clock in north of 20%.
Now that we’ve covered the variables of the equation of exchange, and
touched upon the idea of a total addressable market and percent penetration
of that market, there’s one more key concept to cover: discount rates. We’ll
do that in the context of an actual model.”
Ether (and Ethereum)
● Cryptocurrency generated by Ethereum platform

● Transferred between Ethereum accounts and given as compensation to
minersThe total supply of ether and its rate of issuance was decided by
the donations gathered on the 2014 presale. The results were roughly:
● 60 million ether created to contributors of the presale
● 12 Million (20% of the above) were created to the development fund,
most of it going to early contributors and developers and the
remaining to the EthereumFoundation
● 5 ethers are created every block (roughly 15 seconds) to the miner of
the block
● 2-3 ethers are sometimes sent to another miner if they were also able
to find a solution but his block wasn't included (called uncle/aunt
reward)
● Supply is capped at 18 million ether per year
Ether and Ethereum ClassicIn 2016, as a result of the collapse of The DAO
project, Ethereum was split into two separate blockchains – the new
separate version became Ethereum (ETH), and the original continued
asEthereum Classic (ETC). The value of the Ethereum currency grew over
13,000 percent in2017
● Ethereum hard forked into Ethereum and Ethereum Classic in 2016 as
a result of a $50M hack and the collapse of the DAO project
● Ethereum Classic is the original blockchain
● Ethereum is the new separate version○Vitalik Buterin went with the
new version.

Ethereum Classic
Pros
● Stays true with the philosophy of the immutability of the blockchain.

● Has recently got the backing of a few big players
Cons
● Doesn’t get access to all the new updates made in the ETH chain (e.g.,.
The move from POW to POS).
● All the heavyweights of the Ethereum have moved on to ETH.
● Considered an insult and an attack on the Ethereum community.
● Is known to be full of scammers.
Ethereum
Pros
● Is growing at an exponential pace.

● Has the majority of the original big dogs who have created Ethereum
in its corner.

● Has reversed the DAO hack and given back the stolen money to its
rightful owners (the DAO token holders).

● Is being constantly updated with the latest changes.

● Has a higher hash-rate than ETC.

● A powerful example of what the Ethereum community is capable of
when it comes together to solve a problem.

● ETH is backed by a powerful group of over 200 corporations called the
Enterprise Ethereum Alliance (EEA) which aims to use the blockchain

technology to run smart contracts at Fortune 500 companies. Members
include: Microsoft,JP Morgan, Toyota, ING, etc.
Cons
● Goes against the policy of immutability.

● Also full of scammers, arguably more, given the number of ICOs
● Gas prices are prohibitive
● Network speed cannot support the promise of the the dApps that have
launched
Week 3B
Crypto-economics & Alternative

Cryptocurrencies
LO1: Understand the concept of crypto-economics.
LO2: What are alt-coins?
Lecture Notes
Crypto-economics
Cryptoeconomics is what makes the blockchain truly revolutionary. The

technology of decentralized ledgers has existed before, but the economic
incentives along with cryptography that disincentivize players from
becoming bad actors to enable a self-sustaining decentralized system is
what’s unique.
There are two main building blocks:
● Cryptography proves that if you used your digital signature to sign a

message and that message 1 came before message 2; it proves that
certain properties about messages happened in the past.

● Economics here is about economic incentives that make sure that

certain desired properties hold into the future.
Bitcoin: As an example, let’s look at Bitcoin and what are its desired
properties?
● Create chain of blocks

● Include transactions in every block
● Maintain timestamps
● Maintain correct state (i.e. how much money does everyone have?)
● Convergence: new blocks can be added to the chain but blocks cannot
be replaced or removed
● Validity:
○ If you have 70 Bitcoins and you sent 70 Bitcoin to someone, the
next transactions should validate that you no longer have
anyBitcoin and reject the next transaction you make
● Data availability: it should be possible to download full data associated
with a block
○ If a malicious mining cartel creates a chain of valid
transactions,but hides the access to the chain, then it’s bad
● Availability: transactions should be able to get quickly included if they
pay a reasonable fee
Bitcoin: Cryptography
● Proof of work - proves that a certain amount of expected

computations effort was put in ( measured in Joules)
● Digital signatures - proves the identity of who sent the transactions
● Hashes - prove topological orderof transactions (if that’s the order in
the blockchain, B came after A, C came after B)
○ Establishes which transaction are in which block
○ That blocks are in a particular order, so you cannot
remove/replace blocks and transactions
● Bitcoin: Economic IncentivesThere are two ways to think about
economic incentives:
1. Tokens (replace with “tokens” with “Coins”): incentivize actors
by awarding them units of cryptocurrency (12.5BTC for block
rewards)
OR penalized by deleting how many coins you have

2. Privileges: incentivize actors by giving them decision-making

rights-Mining: when you create a block, the winning miner gets
decide whether to include a certain transaction in that block
(They also get to decide transaction fees)
Another way to think about it:
1. Rewards - give them crypto or privileges

2. Penalties - take away their crypto or privileges (Only in the PoS
consensus family)
Why do we even need cryptocurrency? Don’t we already have fiat

currency?
Historically, currency came in 2 forms - precious metals and paper currency,

which represented ownership of said precious metal
● Precious metals:
○ Intrinsic value (scarce and desirable)
○ Governments do not have direct price control
○ “Catastrophe insurance”
● Fiat currency:
○ No intrinsic value
○ Governments declare the value (when not backed by a physical
asset)
● Cryptocurrency:
○ Digital (convenience)
○ Decentralized (more protected)○Broken into tiny fractions
○ Fairly secure
But…
○ No intrinsic value
○ Governments technicallycannot declare value
○ Scarce...but not really
■ Even if per cryptocurrency the number of coins are
limited,there can be an unlimited number of
cryptocurrencies issue.

Properties that define a store of value (SoV)

● the good must not be perishable or easily destroyed. Thus wheat is not
an ideal store of value

● Portable: the good must be easy to transport and store, making it
possible to secure it against loss or theft and allowing it to facilitate
long distance trade. A cow is thus less ideal than a gold bracelet.

● Fungible: one specimen of the good should be interchangeable for
another of equal quantity. Without fungibility the coincidence of wants
problem remains unsolved. Thus gold is more ideal than diamonds
which are irregular in shape and quality.

● Verifiable: the good must be easy to quickly identify and verify as
authentic. Easy verification increases the confidence of its recipient in
trade and increases the likelihood a trade will be consummated.

● Divisible: the good must be easy to subdivide. While this attribute was
less important in early societies where trade was infrequent, it became
more important as trade flourished and the quantities exchanged
became smaller and more precise.

● Scarce: As Nick Szabo termed it, a monetary good must
have“unforgetable costliness”. In other words, the good must not be
abundant or easy to either obtain or produce in quantity. Scarcity is
perhaps the most important attribute of a store of value as it taps into
the innate human desire to collect that which is rare. It is the source of
the original value of the store of value.

● Established history: the longer the good is perceived to have been
valuable by society, the greater its appeal as a store of value. A long
established store of value will be hard to displace by a new upstart
except by force of conquest or if the arriviste is endowed with a
significant advantage among the other attributes listed above.

● Censorship resistant: a new attribute that has become increasingly
important in our modern, digital society with pervasive surveillance is
censorship resistance. That is, how difficult is it for an external party
such as a corporation or state to prevent the owner of the good from
keeping and using it. Goods that are censorship resistant are ideal for
those living under regimes that are trying to enforce capital controls or
to outlaw various forms of peaceful trade.


Ways to think about “pricing” (betting?!) on cryptocurrency
Treat it like a startup!
● Team
● Product (built? Is it good? Do people want to use it?)
● Do you believe blockchain/”Internet of value” will be the future?
○ Do you believe that our devices (i.e. phones) will start paying
each other for things like in-game perks? Using each other’s idle
capacity?
○ Do you believe that blockchain will replace banks?
Litecoin
● Peer to peer Internet currency that enables instant, net-zero

costpayments to anyone in the world
● Litecoin was one of the first “altcoins.” It’s a fork of the bitcoin
blockchain.
● “Gold is to silver as bitcoin is to litecoin”
Similar to Bitcoin:
● Open-source
● Secure
● No central authority
● Limited supply
● Proof of Work
Better than Bitcoin:
● Faster & more transaction capacity

○ 56 tps vs.7 tps for Bitcoin and 15 tps for Ethereum
○ Blocks generated every 2.5 minutes vs 10 minutes for Bitcoin
○ Easier mining (simpler algorithms) - Bitcoin’s SHA-256
vs.Litecoin’s Scrypt
○ Cheaper (“near zero cost”)
○ Total supply of coins
○ More upside?
○ Possibly a way to hedge against Bitcoin

Ripple (XRP)
● The world’s only enterprise blockchain solution for global payment

● There’s debate whether XRP is really a cryptocurrency.
● It’s highly centralized and more akin to a PayPal account than a
trustless system like bitcoin. It’s hard to come up with a rational
reason why XRPexists in the Ripple protocol, other than as a means for
Ripple to make money. More than 50% of XRP are owned by one
company, and most trusted nodes are run by the same company, and
some assets on ledger can be frozen = not a cryptocurrency.
● Enterprise focused:
○ moving large sums of money as soon as possible
○ Banks use Ripple to shift money between different fiat
currencies
● “Not technically a blockchain”;
○ Maintains Unique Node List (UNL)
■ On one hand, this helps to protect from malicious servers
■ On the other, the governing body can come in and decide
to change the rules
● Any type of currency can be exchanged, from fiat currency to gold
toeven airline miles
● Does not rely on Proof of Work
○ Based shared public database that makes use of a consensus
process between those validating servers to ensure integrity
● Fast:
○ 1500 tps vs. 7 tps for Bitcoin○Settles in 3 seconds vs. 10 mins
for Bitcoin
● Not mined; issued at inception
● Number of coins is not cappedNEO
● “The Ethereum of China”
● Both want to be platforms for the new internet:
○ for dApps (Decentralized Applications),
○ ICOs (Initial Coin Offerings)
○ smart contracts
● Differences:
○ Compliance with regulations:NEO is focused on the future of

smart economy where government will still govern the
regulations. NEOis particularly focused on staying regulatory
compliance
○ Protocol:
■ Ethereum uses Proof of Work
■ NEO uses a protocol called dBFT(Delegated Byzantine
FaultTolerance). NEO’s dBFT is a modification of the
classic PoSprotocol, with some significant advantages and
one primary disadvantage.
■ An interesting analogy was made by Noam
Levenson:imagine dBFT as working similar to how the U.S.
Senate works If every person in America — all 323.1
million—was allowed to directly participate in the
governmental decision making process, it would be
catastrophic. It would be brutally slow as millions
competed for the microphone, all shouting their opinions
and arguing with each other. Making decisions would also
be agonizingly slow. So instead,everyone in the country
gets a vote. And with this vote, they can elect their
representatives, someone to speak for them.This system
directly reflects NEO’s governance. Instead of everyone
participating in the validating process — which can be
incredibly limiting in terms of transaction speed — those
who hold NEO tokens can vote for delegates. These
delegates(called bookkeepers) maintain the network for
everyone.Thus, NEO can run faster, more efficiently, and
with quick errand more finite decisions
■ these bookkeepers will have their digital identity
known,making NEO much more compliant with national
regulations
○ Speed of transactions: NEO can theoreticallyprocess 10,000 tps
vs.Ethereum’s 15 tps
■ This is a clear advantage for NEO, but Ethereum is
wellaware and taking steps towards improving their
speeds
○ Forking:
■ Ethereum, like Bitcoin, forks to update its software
■ “Forks happen because there is no finalityin the consensus
mechanism of Ethereum. Multiple chains in the blockchain
can be created at once — ultimately, both are valid chains
and can continue to be mined on. Forks happen constantly
but are usually resolved when the chain with the most
computer power is chosen as legitimate. With Ethereum,
it’s always recommended that when you place a
transaction, you wait until a few blocks have been mined
on top of yours before considering the transaction
permanent.
■ NEO has finality. This is because the bookkeepersmust
reacha 66% consensus for the transaction to be placed
into the blockchain. Here is an analogy to understand this.
Imagine a first grade class. Timmy asks how much
chocolate milk costs. Cynthia has no concept of price
(she’s in first grade forGod’s sake) and shouts $15! A few
students walked over to her in agreement. Bobby’s a
chocolate milk aficionado — he knows his milk. He says
$1.25. Most of the room walks over to him. He has a
majority. Now assuming Cynthia’s group realizes their flaw
and joins Bobby’s group, then the group reaches
consensus. But if Cynthia is having a particularly stubborn
day, she could keep on with her decision — a fork. It
might not be the right answer, but she still has a valid
answer. This is how Ethereum works.
■ NEO works like this. Imagine the same scenario. Timmy
again asks how much chocolate milk costs. First Cynthia
speaks up: “$15!” A few murmur in support, but it’s clearly
not 66% of the class so her idea is discarded. Next
Bobbysays “$1.25.” 66% of the class support his claim and
thus,his idea is final. With NEO, the bookkeeperseach
propose the correct state of the next block. When 66% of
them support the proposition, the block is finalized.
■ The implications of this are huge. Finality is incredibly
important for the type of economy NEO hopes to
support.The financial industry and other complicated, fast
moving markets (stock markets for example), can’t
operate on a system without finality. They need to know
that when their information is placed into the blockchain,
it is there for good. They also need the assurance that
their blockchain won’t suddenly become irrelevant because
of a fork”.

Tokens: Ether vs. NEO/GAS

● NEO decoupled NEO and GAS: “This may very well be NEO’s most
ingenious characteristic. The native token of Ethereum is ether.The gas
needed to run the Ethereum network (execute contracts,conduct
transactions, etc.) is actually just small units of ether.There is no
separation between ether and gas.
● However, NEO decoupled itself from the token needed to run the
network: GAS. The NEO token is like partial ownership of the
EOplatform. NEO token holders are entitled to vote for bookkeepers.
NEO’s use as a share in the company rather than a token is furthered
by the fact that NEO is non-divisible. NEO is not meant to be
transacted with — that’s why there is GAS.
○ GAS is used for all operations on the NEO network. Now when a
company registers or changes assets on the NEO blockchain,
they pay in GAS — this GAS is then distributed to all NEO
holders.Anyone can claim this GAS by just holding their NEO in a
personal wallet. Such as this one: NEON
○ Bookkeepersare entitled to charge a transaction fee (in GAS)
forgeneral transactions on the blockchain that only they (the
bookkeepers) receive. However, by decoupling NEO and GAS,
there is an incentive to keep transaction fees low; here’s why:
○ High transaction fees, which only benefit the bookkeepers will
prevent people from wanting to register their assets on the
blockchain. The less assets registered, the less rewards
NEOholders will get. Thus, NEO holders are incentivized to vote
in bookkeepers who will keep transaction fees low. Bookkeepers
are primarily incentivized by their desire to secure the network.
They use the network, benefit from it, and have money staked in
NEO.Thus, it is advantageous for them to secure it.
● It is unclear how rewards will be divided amongst ether holders
whenEthereum becomes Proof of Stake. However, it appears that only
large Ethereum holders will be able to stake and receive rewards. The
genius of the NEO token is a paper wallet. GAS is collected when you
physically push the “claim GAS” button. This also ensures that the
NEO network doesn’t need to calculate the interest of NEO holders
with every block,reducing traffic and simplifying the compound
interest formulas. The delegated bookkeepers maintain the network;
your investment gains interest. This would not be possible without two
separate tokens.
○ Both NEO and GAS are capped at 100 million tokens.”
● Programming Languages: NEO allows 5 most known vs. Ethereum
developed its own Solidity
○ NEO facilitates faster adoption
● Virtual Machine organization: NEO does it, Ethereum does not

○ Basically NEO reorganizes the code before VM runs it to make
computing more efficient, Ethereum does not○Ethereum is
planning to introduce the upgrade
NEO’s dBFT vs. Ethereum’s PoW
● Protocol:
○ Ethereum uses Proof of Work
○ NEO uses a protocol called dBFT(Delegated ByzantineFault
Tolerance). NEO’s dBFT is a modification of the classic PoS
protocol, with some significant advantages and one primary
disadvantage.
○ An interesting analogy was made by Noam Levenson:imagine
dBFT as working similar to how the U.S.Senate works If every
person in America — all 323.1million—was allowed to directly
participate in the governmental decision making process, it
would be catastrophic. It would be brutally slow as millions
competed for the microphone, all shouting their opinions and
arguing with each other. Making decisions would also be
agonizingly slow. So instead,everyone in the country gets a vote.
And with this vote,they can elect their representatives, someone
to speak for them. This system directly reflects
NEO’sgovernance. Instead of everyone participating in the
validating process — which can be incredibly limiting in terms of
transaction speed — those who hold NEOtokens can vote for
delegates. These delegates (called bookkeepers) maintain the
network for everyone. Thus,NEO can run faster, more efficiently,
and with quick errand more finite decisions
○ These bookkeepers will have their digital identity known, making
NEO much more compliant with national regulations
○ The disadvantage with this system is a lack of decentralization.
In its purest sense, instead of thousands of validators being
scattered all across the world, governance is concentrated in a
few dozen validators. The majority of these nodes are currently
operated by the NEO team.However, as of Quarter 1, 2018, NEO
will hold less than 2/3and will continue to hold fewer as time
progresses.Regardless, NEO will never be as decentralized as
other purePoS platforms.
● that it allows users to passively acquire GAS in their wallet. Noneed to
run the computer, keep the wallet open, or expendelectricity. No need
to “stake” your tokens — bookkeepers do this for you. You could even
have your NEO inSo how do Ethereum and NEO differ?
● NEO is China focused and China likes to do everything it’s own way
(other examples include WeChat, AliBaba)

● Digital Identity:
○ NEO is issuing identities in accordance with Public
KeyInfrastructure (PKI) standards - existing standard for what
constitutes a digital identity
○ Ethereum requires other DApps to develop digital
identities●Digital assets
○ NEO is planning to issue digital asset certificates that
arecomplian with existing regulation
○ Ethereum is not necessarily going to be compliant
● NEO’s OnChain = Ethereum’s Enterprise Ethereum Alliance
○ OnChain is a company founded by the founders of NEO. It’s two
separate companies but designed with each other in mind to
create the Smart Economy
● On chain designs and develop blockchain solutions for businesses. The
company envisions large-scale adoption of distributed ledger
technology across private and public sector organizations, and has
worked steadily to make this goal a reality . Onchain’s Distributed
Networks Architecture(DNA), its first major project , focuses on digital
asset applications and supports businesses in multiple ways,chiefly by
simplifying creation of both private and public blockchains scenarios.
On chain is dedicated to constant improvement, and continuously
track innovations in distributed ledger technologies with the aim of
enhancing the DNA and developing comprehensive distributed ledger
solutions to Enterprise-level challenges.
○ The Ethereum Comparison: Ethereum’sequivalent is the
Enterprise Ethereum Alliance,an open source blockchain
initiative dedicated to linking Ethereum with the business
world.Their list of partnerships is robust and impressive — no
surprise for those familiar withEthereum. Included among their
members are:BP, HP, Toyota, MasterCard, Microsoft, and Intel,
among many others.
● NEO’s City of Zion = no real equivalent
○ City of Zion (CoZ) is an independent, open source community of
developers, translators,and designers who work towards the
betterment of NEO. They have received funding from NEO to
help incentivize project development.

Week 3 Activities
Exercise - Token Allocation

Week 4A
White Paper & ICOs

LO1: What are White Papers?
LO2: What are ICOs?
Lecture Notes
What are ICOs?
Initial Coin Offerings
“An unregulated means by which funds are raised for a new cryptocurrency
venture. An Initial Coin Offering (ICO) is used by startups to bypass the
rigorous and regulated capital-raising process required by venture capitalists
or banks. Inan ICO campaign, a percentage of the cryptocurrency is sold to
early backers of the project in exchange for legal tender or other
cryptocurrencies, but usually forBitcoin”
“A controversial means of crowdfunding centered around cryptocurrency,

which can be a source of capital for startup companies”
Point out the''unregulated `` and''controversial `` themes. This means there’s

a lot happened and happening to regulate and make it more transparent
and“controllable” by the government
History of ICOs
Maybe the 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 somemillion 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 isEthereum. In mid-2014 the Ethereum Foundation sold ETH
against 0.0005Bitcoin 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 ofEthereum.
As Ethereum itself unleashed the power of smart contracts, it opened the

door for a new generation of Initial Coin Offering.
Why do some startups choose ICOs?
● Lower costs:
○ ICOs are a low cost fundraising option because they avoid
regulatory compliance and other interactions with intermediary
financial institutions.This means that projects can keep costs
related to launching low.
Regulators are taking a closer look at ICOs and this may change,
but for now there is no more cost effective way to raise money
for a cryptocurrency project. This seems a bit dated. Facilitating
an ICOmay cost upwards of $500k to $1m in digital marketing,
roadshow, legal,accounting, entity structuring, smart contract
auditing, etc.
● Speed:
○ ICOs can raise funds quickly and save the development team
time compared to raising funds through traditional means, like
venture capital.While this is arguably both a good and a bad
thing, it means that project shave the opportunity to get off the
ground quickly which can be important for their momentum and

success. Also a but dated. At one time (before June 2017), yes.

I know founders who’ve been raising money in pre-sale for up to
6 months. Token sale speed is an illusion. Much of an ICO is sold
before the public sale (sometimes upwards of 70%).
Deals are made with investors before the “public sale” so as to
drive demand and to create the perception of an instant sell out

● Marketing:
○ Attracting developer community
○ Growing token users
○ “Perhaps the most underreported reason is that for some of
these projects to succeed it is essential to get many individuals
using the token and many developers building on top of the
protocol created by the token.
ICOs are a great way to do this while also raising funds for development, a
win-win. This fact makes an ICO practically a requirement for some coins.
Even the best projects must be adept at marketing and telling their
story to gain funding and developer adoption;having a good team and a
promising white paper (a document which details the goals and plans
for a cryptocurrency project) is not enough.”
The lifecycle of an ICO is usually as follows:
1. A team will release a “white paper”

2. A project raising an ICO will have a web page and some form of large
group chat to keep people who are interested in the project updated
about developments and important dates. These chats often take place
onTelegram, a mobile chat application.

3. Before the ICO launches, the project will invite or allow people to
register for the whitelist to gain access to the pre-sale round. For
popular projects there is usually more interest than availability for the
pre-sale white list so spots are allocated by the founding team or by a
lottery, or some combination of the two.
4. When the pre-sale or public sale period happens people will contribute
funds by sending Bitcoin (BTC) or Ethereum (ETH) to a designated
wallet address.If the project reaches its funding goal, tokens of the
new cryptocurrency will be sent in return when the coin is launched. If
the project does not meet its funding goals, the contributed funds will
be returned. In this way, the funding model is similar to crowdfunding.
How are ICOs different than IPOs?
“In order to understand the features of ICOs, it will be more pronounced to
compare it with something similar in the financial market, called an Initial
Public Offering (IPO). IPO refers to the public sale of the shares of a
company for the first time, with the
purpose of collecting funds for business expansion and development. Let’s

look at the differences between a cryptocurrency ICO and a stock IPO.
1. Regulatory Oversight
● As part of the mandatory requirement to register with the regulatory
authority, a legal document – called a prospectus – must be created
by any company looking to issue an IPO. Theprospectus represents a
legal declaration of its intention to issue its shares to the public, and
must meet certain standards of transparency. It must include key
information about the company and its upcoming IPO, so as to assist
potential investors in making an informed decision.

● ICOs are not bound by any legal requirements to issue any form of
legal documentation. However, a document in the form of a
whitepaper is often conceived by the developing team to outline key
information of the project, such as its purpose and
mechanics.However, it’s important to note that there is no standard
for anICO whitepaper; any project could construct a white paper with
the ability to include or exclude any information they deem fit.

2. Track Record & Credibility
● There are a host of requirements that a company has to fulfill before
listing its shares through an IPO, including having a minimum earnings
threshold and a good track record. The process requires professional
accounting firms to verify accounts,investment banks to act as the
underwriter for the deal as well as liaising with exchanges to fulfill
certain requirements. These processes act as a natural filter for
credible companies to issue their shares to the public.
In addition, most companies thinking of going public have been

funded by institutional investors (which includes angel investors,
private equity firms, venture capitalists,etc) that have done rigorous

due diligence on the viability of the business.
● Since ICOs do not require adherence to any regulatory framework and

legal protocol, a majority of them do not have a track record and only
have a white paper to back up their project. While some have a
working prototype (in alpha or beta stagecos), most projects only have
a conceptual framework manifested through their whitepaper.

This makes assessing their fundamentals almost impossible; your due
diligence is focused towards the project’s future expectations rather
than its past history since there’s none. This is the main reason why
investing in ICOs is extremely risky. It’s true you can extract some
form of credibility by looking at the project developers’ experience or
renowned individuals backing the project, but you can never actually
know whether the project will work.

3. Utility
● The stocks acquired through an IPO represents an ownership stake on
the future earnings on the company. Stocks can be divided into
different classes such as common stocks, preferred stocks or a hybrid.
The utility of holding stock is the entitlement of the shareholders in
receiving dividends and having a vote in the shareholders meeting.

● Unlike an IPO, acquisition of ICO coins does not grant ownership of the
project. There are many ways that investors of the coins may reap
future benefits, and that depends on how the coin is structured.
Generally, a cryptocurrency’s value directly correlates with its perceived
utility. Some coins generate value by conferring a stake in the future
revenue of the projects, while some coinsequate its value to usage
within its ecosystem; the more adoption the coin gets, the higher its
value will be.

4. Duration of Offerings
● Traditional IPO issuance can be a lengthy process, due to the
requirement of legal and compliance processes. From getting approval
through the regulatory authorities to the IPO itself, it can take up to
4-6 months.


● The entire ICO process is much shorter in duration. The duration
depends on the nature and timeline of the project itself. Once awhite
paper is conceived and a smart contract for the crowdsale is finalized,
the crowdsale can begin. The length of the crowdsale can be
dependent on reaching the maximum hard cap, or a fixed sale
duration, which usually lasts a month. However, hyped-ICOscan
mostly be over pretty quickly

5. Access to Offerings
● IPOs are often allocated only to institutional investors such as
investment banks, mutual funds and endowments. Sometimes,only a
small portion is allocated to normal, retail investors. This means that
unless you’re in the big boys club, it will be extremely hard, if not
impossible, to acquire shares at the IPO. We can only buy the stocks
once they are traded on exchanges.

● Literally anyone can participate in an ICO; all you need is the
basecurrency of either Bitcoin or Ether, and you can convert them into
the ICO tokens. This level playing field breaks the “oligarchist”nature
of traditional fundraising, empowering the masses to participate in
investments that can potentially earn them multiples over their
capital. This democratization is a huge appeal to many,since it gives
“power back to the people” instead of a close-knit club of elites.
ICOs vs Venture Capital Financing
● Equity & Control:

○ VC: Entrepreneurs have to give up equity and often with that
control
○ ICOs: Entrepreneurs can retain 100% of their equity and control
● Perception:
○ Only about 1% of startups receive funding from VCs, so there’s a
perception that these companies have been vetted
○ As we’ve seen with UET (useless Ethereum token) raising
$40,000 in anICO, not much over site there
● Speed & Easiness of Access:○Not sure how this will go, but ICOs raise
millions of dollars in a matter of days (of course there’s prep time)
○ VC: ask any entrepreneur raising for the first time, and they will
tell you what a painful and long process (with very low success
rate this is)

● Risk for investors:
○ LPsNote: not all ICOs are the same, depends on the type of
token and terms
● There’s a concept of “smart money” in VC world where investors are
not justgiving financing but are also helping with various advice
● Venture Capital firms often help with more than financing
● Raising money through ICOs does not give this benefit
Does ICO make sense for your product/company?
“Regardless of all other factors which may affect any particular ICO, there is
one question every startup should ask itself before deciding to even have a
campaign. That is whether the ICO digital token can be integrated into the
business model in a meaningful way.
Does ICO make sense for your product/company?
“Regardless of all other factors which may affect any particular ICO, there is
one question every startup should ask itself before deciding to even have a
campaign. That is whether the ICO digital token can be integrated into the
business model in a meaningful way.
For example, the value of Ethers- the tokens which have been released
during the ICO Ethereum- is strongly secured by the fact that they are
required to run the DApps in the network.
If on the other hand, the only use for your coin is being bought and sold on
an exchange, it practically guarantees that the price will crash very soon
after the end of the ICO. As such,the campaign will be unlikely to meet
interest from the discerning users in the first place.
A fundamental problem for any digital token released during an ICO is that
it’s going to come under massive speculative pressure as soon as it hits the
markets. The only thing which can counteract that, and prevent the token
from ending up as a useless gimmick, is a similar level of demand for it. And
that demand can only be produced by real utility.
To sum it all up, if you think that the use of a decentralized token can
increase the value of your product, or it is by design a fundamental part of
it- feel free to read on. Otherwise, the rare probably betterwaystoraisefunds
for your project, such as plain old crowdfunding or VC funding.”
Write a white paper communicating
● Team:
○ “Avoid hiring unfamiliar team members.
○ From an investor’s standpoint, a great team behind the project is
one of the most important factors when deciding on
contributing to an ICO. Conversely, an unproven, or worses till,
an ananonymous team is likely to serve as a major red flag and
stop people from investing.
○ As such, it is crucial to have a list of all major team members,
along with their faces and social media profiles, openly available
to any potential contributor. One example of an ICO successfully
leveraging an accomplished team is ICONOMI's.
○ The members of that project were known for having
createdCashila, the project in operationsinc 2014. Staking their
reputations the ICO helped them to secure over $10 mln.
○ However, not all teams are created equal and some projects may
lack high-level professionals. But you may always search for
relevant professionals in the industry and get them on board as
advisors for the project, which is often enough to ensure trust
from the audience.
○ Another important thing is to avoid having major team shifts in
the periods right before and during the campaign: it may cause a
drop in investors confidence and result in under performance of
your ICO.”
Project Goals:
● “Make sure that your goals are clearly defined and realistic.

● It is one more crucial task. Unrealistic or unclear goals area major
deterrent to investment because they make an impression that the
team either don’t know what it’s doing or, worse still, is trying to
actively scam people out of their money.

● Because of that, it is imperative to have a white paper and a roadmap
prepared before the launch of an ICO. The white paper has to clearly
outline the technical aspects of the product, the problems it intends to
solve and how it is going to solve them. Likewise, the roadmap has to
list clearly defined and realistically achievable goals and their
timeframes

● Of course, both the team and the white paper take a back seat to a
Proof of concept. Being able to present a working, tested product to
the audience is the best thing you could wish for when preparing for
an ICO. If that is the case, it is strongly advisable to make the
prototype the main focus of the campaign and wait for investor
confidence to go off the charts.”
Protection of investor interest:
● “Premiums for early investors, an escrow wallet for the contributions

and a process for returning the funds in case of failure.

● Last but not least is defining the terms for investors. Early bird
discounts for investors which contribute in the first few days the
campaign are basically a must.

● Another convention which has by now become a defacto requirement
is collecting all contributions in a multi-signature escrow wallet, with
all the names of all key holders announced to the public. Some of
those keys have to be held by people otherwise uninvolved myproject,
which serves as an additional guarantee for investors’ funds safety.

● You should also make sure that there is a process in place for the
returning of the funds to their contributors- there is always a
possibility that you will fail to reach the targets and will be forced to
roll the campaign back.”

What’s important during the actual ICO?
● “Timing and good communications are the most important.

● It may be tempting to launch your crowdsale as soon as possible.
However, in most cases ICO’s are limited in time,which means that you
have to come in prepared - hence, timing is important.

● The most important things to cover are the ones listed above: the
team, the goals and investors’ terms. This means that it should be safe
to launch the campaign after those are firmly established, which can
likely take about two to four months after the inception of a project.

● Another important aspect of a crowdsale campaign is PR. Getting
enough attention is actually one of the hardest parts, as the market is
growing and there is an ICO launch almost everyday. Make sure to
constantly communicate with your audience both before and
throughout the campaign.
This Will Help Get More People Onboard,as well as provide feedback,
allowing you to tweak while the ICO is underway.
● The main channels of communication here are the social

media-Twitter and Facebook, and the forums-Bitcoin talk and Reddit.
Consider the option of hiring a professional whose only job will be to
monitor and participate in the dialogue with your audience those
websites-there's nothing worse than having a well-prepared campaign
fail simply due to the lack of outreach.”
Week 4B
Trading Cryptocurrencies
LO1: How to trade Cryptocurrencies
There are a lot of different exchange platforms, but please be careful which
ones you use. THere are a lot of scams out there.
Overview of the flow of more popular platforms

● Coinbase/GDAX
● Bittrex
● Binance
● Robinhood made trading a lot easier, however, you can only buy a
limited number of coins (BTC, ETH)
This is the flow of how trading works outside of Robinhood:
● Step 0: Create accounts. Verification is lengthy, may take up to 2

weeks
● Step 1: Buy certain crypto on Coinbase, Bitstamp or Gemini for fiat.
This usually takes a while anywhere from 2-3 upto 14 business
days-New coins are added all the time, but it’s usually limited to the
more popular ones, such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash
andRipple
● Step 2: Transfer the crypto to exchanges, such as Bittrex, Binance and
Kraken to be able to trade them for other alt coins
● Step 3: Trade the crypto for alternative coins
Robinhood combines both layers of the trading exchanges
There are fewer coins on Robinhood than the second layer of platforms such
as Binance or Bittrex, but they are adding new ones
This is incredibly easy
-It’s free-Go through the motions:
Choose what coins you want to buy-Input how much USD you want to buy, it
will show you the equivalent in the BTC or whatever other coin you’re buying
You will need to “SWIPE UP TO SUBMIT”
Centralized vs. Decentralized Exchanges:
● Decentralized Exchanges: “A decentralized exchange is an exchange

market that does not rely on a third party service to hold the
customer's funds. Instead,trades occur directly between users (peer to
peer) through an automated process. This system can be achieved by
creating proxy tokens (crypto assets that represent a certain fiat or
crypto currency) or assets (that can represent shares in a company for
example) or through a decentralized multi-signature escrow system,
among other solutions that are currently being developed.”


● Centralized Exchanges: “ A centralized exchange is a website that
handles the trading of Bitcoin to fiat or other cryptocurrencies. An
exchange's purpose is to allow you to trade BTC for fiat currency and
to other cryptocurrencies ( like bitcoin, eth, etc, ripple, xmr )”
Decentralized Exchanges Centralized Exchanges
PROS: PROS:
1. Users control their own funds 1. Advanced features
2. Anonymous 2. Easy to use (not for all)
3. No hack for central server & 3. Advanced tools
downtime 4. Liquidity
4. No trading fees5.No personal
documents to apply
CONS: CONS:
1. Not easy to use 1. Exchange control funds
2. Basic features 2. Personal documents require
3. If your computer has been (for some features)
hacked, coins are lost 3. May be faced with downtime
or hacking attempts
4. Not anonymous
1. Bitsquare 1. Poloniex
(http://www.bitsquare.io) (http://www.poloniex.com)
2. NVO (Still in developing) 2. Bittrex (http://bittrex.com)
3. BlackHalo 3. Simplefx
(http://blackhalo.info) (http://simplefx.com)
4. Coinffeine 4. CEX (http://cex.io)
(http://www.coinffeine.com) 5. BTC-E (http://btc-e.nz)
5. Blocknet (http://blocknet.co) 6. Bitcoin Investment Trust

Cryptocurrency Theft happens
Beware!
1,198,921 BTC
;3,003,800 Litecoins;
3,880,837 ETH
1. June, 2011 – 25,000 BTC ($775k by a user known as “ALLINVAIN”)

2. March, 2012 – 46,703 BTC ($6M on Bitcoinica)
3. September, 2012 – 24,000 BTC ($250k on Bitfloor)
4. November ,2012 – 263,024 BTC ($3.42M on Bitcoin Saving & Trust)
5. November, 2013 – 1,296 BTC ($1.46M on BIPS); 4,100 BTC ($5.6M
onInputs); $6,000 BTC ($6.7M on PicoStocks)
6. February, 2014 – 650,000 BTC ($368M on MT.GOX)
7. March, 2014 – 150 BTC ($101k on bitCoin); 896 BTC ($572k on
Flexcoin)
8. July, 2014 – 3,700 BTC ($2M on Mintpal $2m); 5000 BTC ($1.8M on
Bitpay)
9. January, 2015 – 7,170 BTC ($1.82M on BTer.com); 3,000 BTC ($777k
onKipcoin); 1,000 BTC ($230k on 796 Exchange); 18,866 BTC ($4.3M
onBITSTAMP)
10.March, 2015 – 150 BTC ($3.2k on COINAPULT)
11. May, 2015 – 1,500 BTC ($350k on BITFINEX)
12. October, 2015 – 10 BTC ($3.2k on Purse)
13. January, 2016 – 13,000 BTC; 3,000,000 Litecoin ($5.8M on Cryptsy)
14. March, 2016 – 81 BTC ($33k on COINTRADER); 469 BTC, 5,800 ETH
1,900Litecoins ($230k on ShapeShift)
15. May, 2016 – 250 BTC, 185,000 ETH, 1,900 Litecoin ($2.14M on
gatecoin)
16.June, 2016 – 3,500,000 ETH ($53M on DAO)
17. July, 2016 – $85k on Steemit
18. August, 2016 – 119,756 BTC ($65M on Bitfinex)
19.October, 2016 – 2,300 BTC ($2.6M on Bitcurex)
20. February, 2017 – $444,000 on erocoin
21. July, 2017 – 153,037 ETH (Parity); 37,000 ETH ($7M on COINDASH);
$1M onBithumb; $8.5M on Veritaseum
22. August, 2017 – 1,500 BTC ($500k on enigma)

Blockchain ETFs
Crypto Index Funds:
● Index funds have also been launched in the space. Bitwise is the first
one.
○ Bitwise holds 10 top cryptocurrencies (whatever they are on a
monthly basis), weighted by 5-year diluted market cap - in the
proportion of their market capitalization
○ They rebalance it monthly
○ Review Bitwise Overview:
https://www.bitwiseinvestments.com/index
○ Review Bitwise Fact Sheet (please search for the most recent
one):
http://static.bitwiseinvestments.com/Bitwise-Fact-Sheet-April.p
df
What are the different types of Cryptocurrency wallets?
There are several types of wallets that provide different ways to store and
access your digital currency. Wallets can be broken down into three distinct
categories – software,hardware, and paper. Software wallets can be a
desktop, mobile or online.


● Desktop: wallets are downloaded and installed on a PC or laptop. They

are only accessible from the single computer in which they are
downloaded. Desktop wallets offer one of the highest levels of security
however if your computer is hacked or gets a virus there is the
possibility that you may lose all your funds.
● Online: wallets run on the cloud and are accessible from any
computing device in any location. While they are more convenient to
access, online wallets store your private keys online and are controlled
by a third party which makes them more vulnerable to hacking attacks
and theft.
● Mobile: wallets run on an app on your phone and are useful because
they can becaused anywhere including retail stores. Mobile wallets are
usually much smaller errands simpler than desktop wallets because of
the limited space available on a mobile.
● Hardware: wallets differ from software wallets in that they store a
user’s private keys on a hardware device like a USB. Although hardware
wallets make transactions online, they are stored offline which delivers
increased security.Hardware wallets can be compatible with several
web interfaces and can support different currencies; it just depends on
which one you decide to use.
What’s more, making a transaction is easy. Users simply plug in their

device to any internet-enabled computer or device, enter a pin, send
currency and confirm.
Hardware wallets make it possible to easily transact while also keeping

your money offline and away from danger.
● Paper: wallets are easy to use and provide a very high level of security.
While the term paper wallet can simply refer to a physical copy or
printout of your public and private keys, it can also refer to a piece of
software that is used to securely generate a pair of keys which are then
printed. Using a paper wallet is relatively straight forward. Transferring
Bitcoin or any other currency to your paper wallet is accomplished by
the transfer of funds from your software wallet to the public address
shown on your paper wallet. Alternatively, if you want to withdraw or
spend currency, all you need to do is transfer funds from your paper
wallet to your software wallet. This process, often referred to as
‘sweeping’ can either be done manually by entering your private keys

or by scanning the QR code on the paper wallet.
Crypto Payment Processing:
1. Blockchain.info: solves the major challenge of generating a unique

address for each invoice or user. With Blockchain Receive payments
API, Bitcoin addresses are always generated and monitored. Their
callback function notifies users when payment is received.

2. Coinify: With coinify, you can receive payments in over 16 digital
currencies, includingBitcoin, whether online or at a physical location,
risk-free. You can also accept pay-out in your local currency ensuring
your protection of value.

3. Xapo: Get powerful development tools to easily integrate Bitcoin
Wallets and payments into your websites and applications. To get
started, you need to create an account at https://account.xapo.com

4. BitcoinPay: BitcoinPay is a payment processing provider (PSP) for
Bitcoin.BitcoinPay has made it easy for enterprise owners and
operators to accept Bitcoin as a means of payment just like a regular
credit card, Paypal or cash.The merchant can choose to keep payments
in Bitcoin or have the Bitcoin converted toEUR, USD, PLN, CZK and
other currencies and have them deposited into their regular accounts.

5. Bitpay: With Bitpay Payment processors, you are charged a flat
settlement fee of 1%.They allow users to make and receive payment in
any amount, from across the world.Merchants that sign up with BitPay
can receive payments in Bitcoin and have funds sent directly to their
bank account from over 33 countries, settled in USD, Euro, GBP, and
other currencies.

6. Coinbase: This is a U.S based Bitcoin merchant solution provider that
has the following features: Setup in minutes, 2-Click Coinbase
payments, Accept any Bitcoin payment, Customizable options, Mobile
Friendly interface, Full API.Coinbase has the largest e-commerce
presence and the largest customers. Coinbase confirms Bitcoin
payments in just a few seconds with no chargebacks.
Week 4 Activities
FINAL PROJECT - Write your own White Paper
1. What blockchain/smart contract protocol would you choose and why?

2. How does your technology work?
● Draw workflow for the solution
● Describe how blockchain technology works for this particular
solution workflow
● Define the Players
● Describe the Ecosystem
● Define the Interactions (include diagrams when possible)
● What rules does your smart contract follow? (come up with at
least 5)

Additional Reading
● History of Blockchain
○ https://bitcoin.org/bitcoin.pd
○ https://www.amazon.com/dp/B00P6TZLOU/ref=dp-kindle-redir
ect?_encoding=UTF8&btkr=1

● Blockchain beyond Bitcoin
○ https://www.coindesk.com/information/what-is-blockchain-technol
ogy/
○ https://www.amazon.com/Blockchain-Revolution-Technology-C
hanging-Business-ebook/dp/B0141ZP32E/ref=sr_1_1?s=digital-
text&ie=UTF8&qid=1522954796&sr=1-1&keywords=blockchain+
revolution+by+don+and+alex+tapscott

● Blockchain/Distributed Ledger Technology
○ https://www.youtube.com/watch?v=k53LUZxUF50

● Proof of Work (PoW) Protocol/Proof of Stake (PoS) Protocol
○ https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/

● Cryptography: Hashing
○ https://medium.com/@robertgreenfieldiv/explaining-proof-of-stake
-f1eae6feb26f

● Mining
○ https://www.weusecoins.com/en/questions/

● Blockchain & Finance: Cryptocurrency & Remittances
○ https://www.ted.com/talks/don_tapscott_how_the_blockchain
_is_changing_money_and_business?utm_campaign=BeepBee
pBites%20-%20Nieuwsbrief&utm_source=hs_email&utm_med
ium=email&_hsenc=p2ANqtz-9mZIuF3_U7wmY7FbPICU7T2IXD
6MqFJxgcfpLrFjpt87SWxmx6HZN7Vet_wKw6Fji5uMu7


● Blockchain & Insurance
○ https://www.forbes.com/sites/bernardmarr/2017/10/31/blockchain-i
mplications-every-insurance-company-needs-to-consider-now/#4
a5ecf47026e

● Blockchain & Finance
○ http://smartbonds.co/
○ https://www2.deloitte.com/mt/en/pages/audit/articles/mt-blockchai
n-a-game-changer-for-audit.html

● Blockchain & Real Estate
○ https://www.forbes.com/sites/forbesrealestatecouncil/2018/01/12/th
ree-ways-blockchain-could-transform-real-estate-in-2018/#2276
e38b3638

● Blockchain & Music
○ https://www.mdx.ac.uk/__data/assets/pdf_file/0026/230696/Music
-On-The-Blockchain.pdf
○ https://www.berklee.edu/sites/default/files/Fair%20Music%20-%20Transparen
cy%20and%20Payment%20Flows%20in%20the%20Music%20Industry.pdf
● Blockchain & IoT

○ http://www.businessinsider.com/blockchain-technology-applications
-use-cases-2017-9

● Case Study (Sharing Economy): BeeToken “Future of Home
Sharing”
○ https://www.fastcompany.com/40524021/on-this-blockchain-b
ased-version-of-airbnb-theres-no-middleman

● Case Study (Streaming): DTube “YouTube Equivalent”
○ https://d.tube/

● Case Study (Supply Chain): Walmart Blockchain
○ https://www.coindesk.com/walmart-blockchain-food-tracking-
test-results-encouraging

● (Tracking) IBM/Maersk blockchain
○ https://fortune.com/2018/01/16/ibm-blockchain-maersk-compa
ny/
● (Ownership) Kodak Blockchain
○ https://www.kodak.com/corp/press_center/kodak_and_wenn_
digital_partner_to_launch_major_blockchain_initiative_and_
cryptocurrency/default.htm

● The Tech Giants & Blockchain
○ https://techcrunch.com/2018/01/05/mark-zuckerberg-is-right-
to-explore-the-potential-of-the-blockchain-for-facebook/

○ https://aws.amazon.com/pt/partners/spotlights/blockchain-part
ner-spotlight/

○ https://www.bloomberg.com/news/articles/2017-10-17/goldman
-google-make-list-of-most-active-blockchain-investors

○ https://www.coindesk.com/apple-patent-filing-hints-blockchai
n-timestamp-use

● Overstock.com tZERO $250M ICO
○ https://www.coindesk.com/overstocks-tzero-ico-yet-launch-to
ken-sale-stalls-unexpectedly

● Investments in Blockchain - VC & ICO
○ https://www.cbinsights.com/research/blockchain-startups-most
-well-funded/

● Smart Contracts
○ https://www.youtube.com/watch?v=WSN5BaCzsbo

○ https://blockgeeks.com/guides/smart-contracts/

○ https://hackernoon.com/blockchain-for-voting-and-elections-
9888f3c8bf72

○ https://www.youtube.com/watch?v=k53LUZxUF50

○ https://www.coindesk.com/when-is-a-smart-contract-actually
-a-contract

○ https://www.youtube.com/watch?v=cteBu4npnDw

○ https://bitcoinmagazine.com/articles/chainalysis-and-wave-sho
wcase-blockchain-fintech-products-at-new-york-barclays-acc
elerator-sign-deal-with-barclays-1445454899/

● Consensus
○ https://en.wikipedia.org/wiki/Consensus_decision-making

○ https://hackernoon.com/a-hitchhikers-guide-to-consensus-alg
orithms-d81aae3eb0e3

○ https://blockgeeks.com/guides/blockchain-consensus/

● Byzantine Two Generals Problem
○ https://medium.com/loom-network/understanding-blockchain-
fundamentals-part-1-byzantine-fault-tolerance-245f46fe8419

● Consensus Protocol
○ https://www.coindesk.com/short-guide-blockchain-consensus-
protocols

● CryptoEconomics
○ https://blockgeeks.com/guides/what-is-cryptoeconomics/

● What are some of the technical specifics/needs of the public
blockchain?
○ https://medium.com/@ConsenSys/a-101-noob-intro-to-progra
mming-smart-contracts-on-ethereum-695d15c1dab4

○ https://blockgeeks.com/guides/blockchain-coding/

● Blockchain Technology Stack
○ https://www.youtube.com/watch?v=pcilyT3fh-0&t=719s

○ https://steemit.com/blockchain/@acdevan/the-blockchain-tech
nology-stack

○ https://blog.usejournal.com/products-platforms-and-protocols-
bbef1c726561

● Turing Completeness of Ethereum
○ https://cs.stackexchange.com/questions/71473/what-does-bein
g-turing-complete-mean

● Decentralized Autonomous Organizations (DAOs)
○ https://www.coindesk.com/learn/ethereum-101/what-is-ethere
um

● dApps (Decentralized Applications)
○ https://medium.com/@RadJavXRJ/whats-the-difference-betwee
n-an-app-and-a-dapp-13fb52848556

● Scalability Challenges
○ https://www.youtube.com/watch?v=WSN5BaCzsbo

○ https://steemit.com/cryptocurrency/@steemhoops99/transactio
n-speed-bitcoin-visa-iota-paypal

○ https://www.fool.com/investing/2018/01/14/which-cryptocurren
cies-have-the-fastest-transactio.aspx

○ https://medium.com/@jonaldfyookball/why-does-bitcoin-have
-ridiculously-high-fees-and-slow-confirmations-e3fd58258a6
d

● Possible scalability Solutions for Bitcoin
○ https://arstechnica.com/tech-policy/2018/02/bitcoins-lightning
-network-a-deep-dive/

● Anonymity? “Pseudonymous and fully traceable”
○ https://hackernoon.com/privacy-on-the-blockchain-7549b501
60ec

○ https://www.quora.com/How-is-blockchain-verifiable-by-publi
c-and-yet-anonymous

● Public and Private Keys
○ https://www.quora.com/What-are-the-differences-between-pri
vate-key-and-public-key-encryption

● Crypto-Economics
○ https://hackernoon.com/making-sense-of-cryptoeconomics-5e
dea77e4e8d

○ https://www.youtube.com/watch?v=pKqdjaH1dRo

● Overview of different trading platforms
○ https://hackernoon.com/how-to-earn-passive-income-for-you
r-crypto-5950b83d8190

● Centralized vs. Decentralized Exchanges
○ https://steemit.com/exchange/@nyinyinaing/decentralized-exch
ange-vs-centralized-exchange

● Beware - Hacks are possible!
○ https://bitcoinexchangeguide.com/bitcoin/scams-hacks/

● Crypto ETFs, Block & Block holdings
○ https://seekingalpha.com/article/4143066-4-new-cryptocurren
cy-etfs-consider-portfolio?page=2

○ https://www.marketwatch.com/investing/fund/blok

○ https://www.amplifyetfs.com/blok-holdings

● Crypto Index Funds - Bitwise
○ https://www.bitwiseinvestments.com/

● Wallets
○ https://blockgeeks.com/guides/cryptocurrency-wallet-guide/

○ https://coincentral.com/best-bitcoin-wallet-reviews-for-2018/

● Overview of Cryptocurrencies - why do we need cryptocurrency?
○ https://www.lynalden.com/cryptocurrencies/#comparison

○ https://coinmarketcap.com/all/views/all/

● Ways to think about “pricing” (betting?) cryptocurrencies
○ https://techcrunch.com/2018/01/22/how-to-price-cryptocurren
cies/

● Litecoin (LTC)
○ https://litecoin.org/


● Ripple
○ https://ripple.com/

○ https://bitcoinmagazine.com/guides/what-ripple/

● Ethereum Classic
○ https://blockgeeks.com/guides/what-is-ethereum-classic/

● Neo and ETH
○ https://hackernoon.com/neo-versus-ethereum-why-neo-might
-be-2018s-strongest-cryptocurrency-79956138bea3

○ https://twitter.com/bytesizecapital

○ https://hackernoon.com/neo-onchain-and-its-ultimate-plan-d
na-4c33e9b6bfaa

● White Paper & ICOs
○ https://en.wikipedia.org/wiki/Initial_coin_offering

○ https://www.investopedia.com/terms/i/initial-coin-offering-ico.
asp

○ https://blockgeeks.com/guides/initial-coin-offering/

○ https://www.visualcapitalist.com/video-ico-explosion-one-ani
mated-timeline/

○ https://hackernoon.com/evaluating-an-initial-coin-offering-ico
-f9c24be0698b

○ https://masterthecrypto.com/crypto-ico-vs-stock-ipo/

○ https://www.bitcoinmarketjournal.com/icos-vs-ipos/

○ https://medium.com/swlh/can-ico-replace-venture-capital-63a
1311c5296

○ https://2017.stateofeuropeantech.com/chapter/deep-tech/article
/europe-front-and-centre-race-in-ico-boom/

○ https://www.coindesk.com/tag/ico-regulations

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Blockchain for Managers: Students

Blockchain for Managers

Program Management Team

Week 2: ● Smart Contracts

Week 3: ● Bitcoin

Introduction to the Blockchain

OVERALL AIM OF THE COURSE

The blockchain is regarded as the next revolutionary technology after the

You do not need to be technical or have any prior knowledge on the

What will you learn in this course?

1. Fundamentals of the blockchain

LO1: ​Overview of Blockchain technology.

LO2: ​Overview with detailed examples of Blockchain applications.

Since then, the blockchain as a platform (protocol) has grown to be a

● Think of bitcoin as an app on the app store, blockchain is the iPhone

Many noteworthy investors and entrepreneurs spoke about in support of the

● Marc Andreessen, most known as the founder of Netscape and

Blockchain technology has given rise to hundreds of ventures that leverage

Blockchain...is a digitized, decentralized, immutable public ledger that

● Public - not owned by anyone; blockchain database not stored in a

So how’s this actually possible?

● Distributed Ledger (or Distributed Ledger Technology)

● Ownership might not be assigned correctly

So how’s the blockchain distributed ledger technology better than the

● Smart contracts can automate and streamline the terms of a

● Consensus Algorithm: so let’s say someone did try to tamper a block,

Let’s look at the individual components of blockchain:

● Transactions: Bob sends Alice 1 BTC.

So, how can blockchain be truly revolutionary?

Benefits to using the blockchain as a framework:

But what are the outstanding problems?

● Establishing correct identity

● You are not necessarily anonymous as ip addresses can be captured

Cases & Applications of the Blockchain

■ “Every real estate transaction goes through the multiple

Companies in the space: HelloSugoi, Mycelia, Ujo Music, dotBlockchain

● Internet of Things (IoT):

Overview of companies/products leveraging blockchain in different tech

(Sharing economy) Uber equivalent:

● Case study on Lazooz: A Decentralized Transportation Platform owned

(Sharing Economy) Airbnb equivalent:

● instead of paying in dollars or euros, guests use site-specific tokens to

(Social Media) Reddit equivalent

● Case study on Steemit: A blogging and social networking website on

(Social Media) Youtube equivalent

● Case study on DTube

Large established companies incorporating blockchain:

(Supply chain) Walmart blockchain:

● Can track the history of mangos it sells in 2 seconds, a process that

(Ownership) Kodak blockchain:

KODAKOne platform will create an encrypted, digital ledger of rights

● Facebook: Zuck said TBD

Investment into blockchain companies:

Overview of how much VC/ICO funds raised towards blockchain companies:

The largest ICOs/VC-backed blockchain companies:

1. Name of your Blockchain Technology Project

Document that describes your blockchain project

Project Options: Pick one

1. Sharing Economy: Ride sharing company (“Blockchain equivalent of

3. Music industry: Service helping songwriters whose songs are streamed

1. Create a new Google Doc file

Exercise: Define the Problem

Exercise: Why Blockchain solution is better

LO1: Overview of Blockchain technology.

LO2: Overview with detailed examples of Blockchain applications.

LO1: What are “Smart Contracts”?

LO2: The purpose of “Smart Contracts” on the Blockchain

● Cannot ascertain certain non-objection extrinsic events / values (i.e.

The Two Generals Problem has been proven to be unsolvable.

”Generalized version of the Two Generals Problem with a twist

LO1: What are the technical specification of a public Blockchain

LO2: Most commonly used “programming languages” for some

LO1: Understanding differences in some Major cryptocurrencies.

LO2: What are tokens? What types of tokens exist.

An example of a utility token would be the filecoin token. Filecoin