hello i’m george dawn of a senior here
at HPA and today i’m going to tell you a
story about Alice Bob and bananas Alice
and Bob are sitting at a lunch table
Alice has one banana and she wants to
give it to Bob so Alice gives Bob the
banana she placed it in his hand and
gives it to him
Alice now has zero bananas and Bob has
one we saw what happened it was a
physical transaction Alison Bob really
didn’t need a friend or a witness to
prove that the transaction happened they
both knew the transaction occurred so
their friend could be chatting away
happily with someone else the
transaction just occurred is what we
know to be very standard transaction for
centuries a personal barter so on give
something to another person and they are
both happy Alice can’t give more bananas
then she has because there are no more
in her possession Bob can’t receive more
than one banana because Alice has no
more to give Bob can even give his
banana to someone else if he chooses to
do so but in this case no matter what
happens there’s only one banana and in
our world Alice and Bob would use the
dollar to make the physical transaction
so if I was wanted to give Bob a dollar
she would use something that has a
trustable ledger a ledger is a large
collection of data in which transactions
and bounces of dollars or perhaps
bananas are recorded for both Alice and
Bob this transaction would become record
in a ledger that some institution
controls in this way if Alice and Bob
trust whomever controls the institution
they know their transactions will be
verifiable even if Alice isn’t at the
lunch table and doesn’t know Bob she
will be certain that the transaction
will be recorded in the ledger
and so Alice will no longer have the
dollar and now Bob will what if the
dollar
or should I say banana
was virtual so Alice wants to give Bob a
virtual banana so Alice sends Bob her
virtual banana
well okay Alice how did you send it if
Alice sent his virtual banana through an
email to Bob then how does Bob know that
he received an exact banana and not just
a copy
bob can confirm that alice has discarded
her virtual copy of the banana so Bob
isn’t sure the banana his he has
received is actually worth anything what
if Bob tries to send that virtual banana
to his friends would they trust Bob
ensured that Alice discarded her copy
and that Bob would also discard his or
perhaps I was downloaded that virtual
banana from the same place that a
hundred people got that exact same copy
of it then what does the verb then what
value does the virtual banana even have
Wow well this just got very complex
looks like a virtual transaction is
nothing like a physical transaction the
problem that Alice encountered is called
the double spending problem a bunch of
very very smart folks ranging from
economists to computer scientists have
been trying to solve the double spending
problem for centuries
how can Alice and Bob both ensure that
one virtual banana is not sent twice or
many times how can the data of the
virtual banana be removed from Alice in
a way that Bob knows is trustable
well let’s see if we can figure it out
if Alice and Bob use some sort of
digital ledger much like a physical one
well that haven’t we solved the problem
now Alice and Bob can transact bananas
virtually as much as they’d like whoever
controls the ledger would be in full
control and of also everyone using it or
also any transactions coming in and out
of the ledger would also have to trust
the controller well that’s just great
there are some problems with this
solution what if the controller of that
ledger just made more bananas or perhaps
gave bananas to someone without a proof
of transaction that doesn’t sound like
someone that Alice or Bob would trust in
the first place just knowing that the
person controlling the ledger would be
able to do that to the data what if the
person controlling Pledger no longer
wants to control it or just simply goes
out of business and poor Alice this
entire process is so complicated
what if Alice just wants to give Bob a
virtual banana the normal way can Alice
and Bob replicate the lunch table
transaction in the same way virtually
okay well here’s an idea what if we gave
this ledger to both Alice and Bob what
if we gave this ledger to everyone what
if everyone had a virtual copy of
decider on their computer and they all
kept track of all the transactions this
ledger would have to contain all
transactions of bananas that have ever
occurred Alice or Bob or any other
person wouldn’t be able to cheat the
ledger since it wouldn’t agree with
everyone else
in the system and this ledger wouldn’t
would be very difficult to destroy
especially if it became huge with many
people using it this ledger system had a
defined set of rules from the beginning
everyone transacting within the ledger
can know how virtual bananas are
transacted if everyone within the ledger
agrees the set of rules then everyone
has trust of all transactions of all
virtual bananas and so there is not one
person that has full control over this
virtual ledger Alice Bob and all their
people use consensus through algorithms
to confirm that transactions are
legitimate this ledger is decentralized
you two could transact virtual bananas
with Alice and Bob in the ledger network
and make sure the yours and everyone
else’s transactions are legitimate what
if wait a second haven’t we solved the
problem and oh that solution exists
right now it’s called the Bitcoin
protocol there is no double spending in
the Bitcoin ledger there there is no one
person that has complete control
everyone knows the rules of the Ledger’s
and transactions are completely
transparent allison and bob have
addresses in this ledger much like an ID
number except no one in the ledger knows
what addressed belongs to Alice or Bob
unless Alice and/or Bob give that
information to whoever they
transacting with this provides a layer
of anonymity for Alice and Bob towards
everyone in the system that is not
transacted with them but still holds
transactions as identifiable and
legitimate Wow that’s quite the concept
a virtual object now does actually
behave like a physical one but how is a
virtual ledger even useful
well because it’s virtual just like an
email it can be sent almost instantly
from anywhere by anyone Alice can be in
China and transact with Bob in the
United States using a common rule set
ensures that there is one value to all
of these virtual objects and because
every everyone agrees to that value when
using the system it is in their best
interest to pitch in and set their
computer to help them to help confirm
transactions so the network can grow
while still being as trusted as before
the more confirmations per transaction
the more trust the better because this
network is virtual I also can put
something else than a banana as a
transaction she could transact many
different types of objects like apples
or oranges or perhaps Fox contracts or a
confirmation certificate if everyone
agrees on these relationships of how all
these objects are presented within the
network then anything can be represented
as a transaction okay fantastic
there’s a functional and active solution
to the double spending problem the
solution is indeed so fantastic that it
allows people from all over to world all
over the world to have any transactions
with anyone using a fully common
denomination of value a Bitcoin there is
no more currency valued disparity
Bitcoin is fundamentally a way of
transacting data all within a virtual
ledger working through a consensus
network and now you know more about
Bitcoin than most thank
[Applause]
at HPA and today i’m going to tell you a
story about Alice Bob and bananas Alice
and Bob are sitting at a lunch table
Alice has one banana and she wants to
give it to Bob so Alice gives Bob the
banana she placed it in his hand and
gives it to him
Alice now has zero bananas and Bob has
one we saw what happened it was a
physical transaction Alison Bob really
didn’t need a friend or a witness to
prove that the transaction happened they
both knew the transaction occurred so
their friend could be chatting away
happily with someone else the
transaction just occurred is what we
know to be very standard transaction for
centuries a personal barter so on give
something to another person and they are
both happy Alice can’t give more bananas
then she has because there are no more
in her possession Bob can’t receive more
than one banana because Alice has no
more to give Bob can even give his
banana to someone else if he chooses to
do so but in this case no matter what
happens there’s only one banana and in
our world Alice and Bob would use the
dollar to make the physical transaction
so if I was wanted to give Bob a dollar
she would use something that has a
trustable ledger a ledger is a large
collection of data in which transactions
and bounces of dollars or perhaps
bananas are recorded for both Alice and
Bob this transaction would become record
in a ledger that some institution
controls in this way if Alice and Bob
trust whomever controls the institution
they know their transactions will be
verifiable even if Alice isn’t at the
lunch table and doesn’t know Bob she
will be certain that the transaction
will be recorded in the ledger
and so Alice will no longer have the
dollar and now Bob will what if the
dollar
or should I say banana
was virtual so Alice wants to give Bob a
virtual banana so Alice sends Bob her
virtual banana
well okay Alice how did you send it if
Alice sent his virtual banana through an
email to Bob then how does Bob know that
he received an exact banana and not just
a copy
bob can confirm that alice has discarded
her virtual copy of the banana so Bob
isn’t sure the banana his he has
received is actually worth anything what
if Bob tries to send that virtual banana
to his friends would they trust Bob
ensured that Alice discarded her copy
and that Bob would also discard his or
perhaps I was downloaded that virtual
banana from the same place that a
hundred people got that exact same copy
of it then what does the verb then what
value does the virtual banana even have
Wow well this just got very complex
looks like a virtual transaction is
nothing like a physical transaction the
problem that Alice encountered is called
the double spending problem a bunch of
very very smart folks ranging from
economists to computer scientists have
been trying to solve the double spending
problem for centuries
how can Alice and Bob both ensure that
one virtual banana is not sent twice or
many times how can the data of the
virtual banana be removed from Alice in
a way that Bob knows is trustable
well let’s see if we can figure it out
if Alice and Bob use some sort of
digital ledger much like a physical one
well that haven’t we solved the problem
now Alice and Bob can transact bananas
virtually as much as they’d like whoever
controls the ledger would be in full
control and of also everyone using it or
also any transactions coming in and out
of the ledger would also have to trust
the controller well that’s just great
there are some problems with this
solution what if the controller of that
ledger just made more bananas or perhaps
gave bananas to someone without a proof
of transaction that doesn’t sound like
someone that Alice or Bob would trust in
the first place just knowing that the
person controlling the ledger would be
able to do that to the data what if the
person controlling Pledger no longer
wants to control it or just simply goes
out of business and poor Alice this
entire process is so complicated
what if Alice just wants to give Bob a
virtual banana the normal way can Alice
and Bob replicate the lunch table
transaction in the same way virtually
okay well here’s an idea what if we gave
this ledger to both Alice and Bob what
if we gave this ledger to everyone what
if everyone had a virtual copy of
decider on their computer and they all
kept track of all the transactions this
ledger would have to contain all
transactions of bananas that have ever
occurred Alice or Bob or any other
person wouldn’t be able to cheat the
ledger since it wouldn’t agree with
everyone else
in the system and this ledger wouldn’t
would be very difficult to destroy
especially if it became huge with many
people using it this ledger system had a
defined set of rules from the beginning
everyone transacting within the ledger
can know how virtual bananas are
transacted if everyone within the ledger
agrees the set of rules then everyone
has trust of all transactions of all
virtual bananas and so there is not one
person that has full control over this
virtual ledger Alice Bob and all their
people use consensus through algorithms
to confirm that transactions are
legitimate this ledger is decentralized
you two could transact virtual bananas
with Alice and Bob in the ledger network
and make sure the yours and everyone
else’s transactions are legitimate what
if wait a second haven’t we solved the
problem and oh that solution exists
right now it’s called the Bitcoin
protocol there is no double spending in
the Bitcoin ledger there there is no one
person that has complete control
everyone knows the rules of the Ledger’s
and transactions are completely
transparent allison and bob have
addresses in this ledger much like an ID
number except no one in the ledger knows
what addressed belongs to Alice or Bob
unless Alice and/or Bob give that
information to whoever they
transacting with this provides a layer
of anonymity for Alice and Bob towards
everyone in the system that is not
transacted with them but still holds
transactions as identifiable and
legitimate Wow that’s quite the concept
a virtual object now does actually
behave like a physical one but how is a
virtual ledger even useful
well because it’s virtual just like an
email it can be sent almost instantly
from anywhere by anyone Alice can be in
China and transact with Bob in the
United States using a common rule set
ensures that there is one value to all
of these virtual objects and because
every everyone agrees to that value when
using the system it is in their best
interest to pitch in and set their
computer to help them to help confirm
transactions so the network can grow
while still being as trusted as before
the more confirmations per transaction
the more trust the better because this
network is virtual I also can put
something else than a banana as a
transaction she could transact many
different types of objects like apples
or oranges or perhaps Fox contracts or a
confirmation certificate if everyone
agrees on these relationships of how all
these objects are presented within the
network then anything can be represented
as a transaction okay fantastic
there’s a functional and active solution
to the double spending problem the
solution is indeed so fantastic that it
allows people from all over to world all
over the world to have any transactions
with anyone using a fully common
denomination of value a Bitcoin there is
no more currency valued disparity
Bitcoin is fundamentally a way of
transacting data all within a virtual
ledger working through a consensus
network and now you know more about
Bitcoin than most thank
[Applause]
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