Intro to Blockchain & Cryptocurrencies by Coin Gamma Founder



first off thanks for being here it's it's the unofficial last Thursday of the summer whether it's beautiful and cryptocurrency market is down over 50% but you're still here on us on Thursday night I'm learning about the space so kudos to you because we did this about a year ago even in January this woman will have to get massive garden to get as many people I want to learn about it but I think the people I want to learn about it now or a lot more impressive because they're not in it for the quick buck so you know I'm glad to kind of speak to you guys like you said my name is fritz I have a startup called Corinne gamma we're we're accommodating we like we like to call ourselves a bloomberg of crypto we have a Content site so we have a website we write content we have a podcast where we interview people some of the leaders in the blockchain and crypto space but we also have a data side where we're building data analytics so you know my issue with the space was that you know I used to work on Wall Street then I moved into tech but when I got into cryptocurrency I wanted to analyze Kirke do the same way I would analyze stocks and bonds when I used to work at Barclays Capital and the data in the space was lacking and so that's kind of where I got the idea to start the company but yeah it's an awesome space obviously it's very volatile but I think the fact that you're here it means a lot so I guess the question is obviously you you guys know why it's important does he like I said you're here on a Thursday with beautiful weather but just to reiterate like why what's the point of even learning about cryptocurrencies revolutionary technology it's something that is it's a lot of people say that our time right now is is is mirrors what the internet was in the 90s you know we're only at the beginning of it even though you know Bitcoin was created in 2009 so we're roughly almost a decade in where we're at the infancy so not barely the first inning if you if you're baseball fans and you know lives a lot a good thing to do sometimes when you don't know what to do is follow what smart people are doing right and I like to start follow a smart money right so andreessen horowitz just made their biggest investment in the cryptocurrency based startup this week and like I said the cryptocurrency market has been down over 50% since January they still believe in it Goldman Sachs obviously the biggest and best investment bank on Wall Street they were the first one to announce that they have a trading desk they also have a venture capital fund that's been investing in cryptocurrency for years so one of their investments is in circle which is a large crypto currency trading platform you Square Ventures which is you know down the street is probably the most popular venture capital firm in New York and you know they're they are very active in the space and they're led by you know fred wilson which is a legendary venture capitalist if if if following the money doesn't kind of pique your interest follow follow a future Talent right so coin coin base one of the biggest trading platforms did a survey they found that 18 percent of students have cryptocurrency one of the biggest things that happened last year obviously last year was on undeniably you know driven by a lot of fluff there was a lot of greed but there was a lot of energy people really want to get into the space and a lot of younger folks wanna get into space people that didn't care about investing in stocks didn't care about investing in real estate would you know they this was the first time they'd ever made an investment and so you know it's it's incredible that you know one almost 195 every five students have already put money into crypto if you look at if it's hard to see but basically this is a list of its some of the top institutions Stanford has ten crypto and blockchain classes Cornell has nine UPenn six Berkeley for Princeton has two and yes.2 so I mean and now you're here on trying to figure out so you you guys also on that list of people that of taking courses and looking to learn just just show hands who owns any crypto okay about fifty percent so I guess we're here blockchain 101 obviously what what is blockchain you know it's blockchain is a chain of blocks what blocks blocks are our digital containers that contain information and the information is there without any centralized supervision what does that even mean right the best parallel to you know so we like to a lot of people who say blockchain but they also use DLT interchangeably so distributed ledger technology ledger is as accounting term that kind of takes that basically looks at a history history of transactions a more basic parallel to that would be a Google spreadsheet so historically before Google Google Spreadsheets were well we used to use Microsoft Excel sheets and so there was only one copy you make changes to and then you email it to your colleagues or whoever has to look at it now you have something that's somewhat decentralized that many people could work on at one time that's what the paranoia is to what a normal database is to weather blockchain is right so blockchain kind of lives out there and many people could write to the blockchain and it's it's that's what that's where the decentralization comes from right so if you look at a normal set up right so a normal set up has basically a bunch of devices connected to one centralized server so we're when we're on Google and we're our Facebook and we you know either put up a status update that status update goes to Facebook's centralized server and then Facebook redistributes it out to everybody else imagine if we were able to kind of like send it out and or it automatically went to a wide array of in visuals without Facebook being in the middle right and so obviously the biggest use case that we know around blockchain is around money right and so money historically has a centralized party so even when I use venmo which is digital venmo hooks into my bank account who Dan hooks into your bank account right but now in this case venmo is not even in there I'm just sending you the money directly right and so this is the decentralized model where everybody's kind of connected to each other obviously I don't want this to be one way and I know that I might have used some terminology it may not be that clear anybody's a quick question or is there any part of that I should kind of spend more time on okay so I guess the another question is what Bitcoin versus botched blockchain everybody uses those two things differently what's the difference why does it matter right obviously Bitcoin is the digital currency that runs on the blockchain and it cannot without the blockchain Bitcoin cannot exist the reason why it cannot exist without blockchain is that when Bitcoin was created it was like you know if there was something digital that I sent to you if I send you an email or I send you a PDF file that I created on my computer how do I know that how does the and I tell you oh well this is worth something right how does the person know that I just didn't make ten copies of that and just send it to ten people and then all automatically say that that's what it is right that's the reason why up to this point anything digital cannot be considered money right because money has to be scarce you have to make sure that people who cannot double count it you have to make sure that the person that sent it actually has what they have and that's where the ledger comes in right and so that's why banks are evolved right so when I my bank America account sending you money by venmo if I only have ten dollars and I try to send 10,000 to people it's gonna break the second time right blockchain technology kind of takes what block what Bank of America does for us in that scenario and puts it on this and so leveraging that allows you to take something as digital make it scarce and you can make anything into money on it on that end all right so money that what is money in general money is basically what people say is money right so you know the US dollar is money because it's backed by the faith of government right but you know like we all know you know the US dollar is not the only currency in the world right so you know just to cut past couple of weeks we see in Turkey they have a currency and people are not believing in it and so it's being devalued right people use art as currency people have used salts and sugar as currency you know I like to argue that basically half the world was it was basically discovered because people were so into spices right and wanted to kind of get to India and they ended up in the in the Caribbean or India I've been in Africa and and and obviously there was a lot of civilization that was expanded but you know it's it's it's it's pretty interesting but in at the end of the day the reason why bitcoin is of value is because quite frankly people say it's not value but the only reason why it's usable and people cannot cheat it cheap the system is because of blockchain when it comes to crypto bitcoins the gateway drug it's the first thing that people kind of step into is the first large crypto currency is the first cryptocurrencies the first use case for the blockchain but there's over 2,000 coins out there why can't anybody create a coin I mean product school could create their own coin tomorrow and just and make people who use their coin to buy the courses right why is that even possible the reason why it's possible is because bitcoin is open source a theorem is open source right so meaning that the they take the the code that you use to create the coin is actually consumable for the world to see right so anybody could take it tweak it and then make it their home and just kind of introduce it that's why we have so many coins s create create out out there an especially last year with the ICO s initial coin offering hype people were doing it all day because they saw it some people were actually legitimately trying to improve on the technology because they saw limitations with Bitcoin limitations in the etherium but a lot of people were just trying to like take money from people right and so that's why you saw like this big run up and now you see the market has has kind of pulled back quite a bit sure no no so I guess mining sorry they actually I need it I should probably talk about that a little bit so like I said the blockchain is is almost like this Google spreadsheet that has all the transactions right but obviously a Google spreadsheet it's cool that everybody could write to it but they're like somebody could put a cell in and if somebody could just change it tomorrow so like I could say I could have had ten Bitcoin yesterday and then go on the spreadsheet and add a zero and have a hundred right so just because it's decentralized doesn't make it doesn't make it good right what makes it good is that it's decentralized and the verification can be decentralized so the verifications the verification of the transaction happens through a process called mining right and so mining is people use mining basically they try to use it it's kind of obviously copied from gold and silver and stuff like that and people like to say this is digital gold mining means I you know I as a person say I want to put up my computer or my internet access or my energy and say I I'm willing to be a validator to transactions right and to be and when you're and why why would anybody just want to be a validator the reason why they want to be a validator is because they do get big an effete so you could basically get you could get Bitcoin just for offering you're just I could just hook in my I mean it doesn't work anymore but it used to work where I could just hook in my my my back book and basically download some code and say I validate and why Evans's when transactions are happening on the blockchain it basically he gets shouted out to the network and people say and they says all right well I just set one one Bitcoin to her we need the network to validate it right and so everybody that kind of raises their hand and say they're a miner they Dale fouled it right the question is how do you know who validates and who gets the fee the way that you get the fee is that there's this mathematical equation that's why that's what a cryptic cryptography comes in basically your computer has to like solve a math problem the fastest then it says all right well then the system says all right that person basically solved a mathematical puzzle first that person gets to be them the validator and therefore that person gets a part of the fee right and so the reason why I said that I used to be able to do this with my laptop is that in the beginning you didn't need that much computing power to do it because the network was small but obviously over the past few years with Bitcoin being more valuable the competition to become miners and get those fees has have gone up so now people are having like servers and people are testing all type of different technologies – in order to have the power to you know perform that calculation and as fast as they could and win that prize so to speak different blockchain they are they know they are they're different because every coin basically has its like own mining algorithm so it was created when the blockchain was created so like let's say what's your name top so the top coin right so you you create a coin and you create your own blockchain and how it will work you will in the code that you make you will create what I guess the standard is for people to be able to get fees all right so that's already fixed once it is so then the people that want to kind of get a coin they kind of code their computer to basically compete for the calculation you have and that's it so that I mean miners so the blockchain engineers boxing developers or create the coins miners just see what is already created and kind of create a hardware structure that could kind of basically compete on that they make it's almost like you created an equation all right and so one blockchain has a craziness based on algebra and one has creation based on on I don't know trigonometry like I just know all right well trigger it up like I'm not trying to solve for X I'm trying to solve for cosine or what-have-you right and so like I hold my computer to do that but now it's like you can't really use a company it's not really a computer like it's a computer but they're like there's like a lot of machines behind it it's almost like a large server farm that you have to do depending on how competitive the coin is but yes two different skill sets and what stops the miner from ya there well because it's mathematical they can't cheat it so I mean they can't dating the power yeah yeah right right no the computers doing it they're not verbally doing it but that's a good point so what happens is because it's got is so competitive to be a miner you have there are certain firms that well the certain place places and firms that have advantages so it takes a ton of energy to mind Bitcoin so you know if you were to try to mine Bitcoin in this room like a few fuses will probably pop because it would be it would be tough so a lot of like places that like like Iceland places I have like we energy that's either free or subsidized have advantages places that create hardware that are used for other things so like basically the biggest miners are actually in China and the biggest company one of the biggest company is called bit Maine and they actually make like this this kind of machine that mines crypto for you it's like / it's like made for that and they've gotten so good at it that instead of selling and out they'll just use it for themselves so what what the controversy is that a lot of times they're they're basically like there's almost of us shows if I'm selling the market iPhone 5s but I have the iPhone 7 in my pocket so like I'm mine and then like once I have the iPhone 9 I'll sell the iPhone 7 to everybody else and then they're trying to compete with my iPhone 9 all right so that's some of the controversies happens so even though it's decentralized people are worried that if they keep doing it they can get a majority of the mining power or they call a hash power and then they can just like basically do what they want because they could be the transaction and the validates right we're a long way from doing that obviously this space is so new and there's always conspiracy theorists so you know we'll see how it goes so yeah I mean this is – the last time you saw wow this has been as Wella so you know the nobody's really checking for a big coin that much this year it's it's gotten humongous because people are are they're not looking forward to get rich you're looking forward to survive or to you know to get the things they need bitcoin is the first and most popular one is over 2000 coins out there I personally believe that 99% of them will be worthless and in the next we use it what they've dropped they've dropped over against Bitcoin – but they're I mean it's a bitch thing is if it's dropping that earlier you could switch it out to Bitcoin the better right because what happens is as its dropping bread becomes ten times as more the more time to goals but if you guys are bigger on early or the early got a Bitcoin like you you know you have like yet fixed buying power so you don't have to worry about that as much so a theorem is the next most popular one a lot of people asked all right I hear about Bitcoin a about theory and what what's difference so Bitcoin is is basically like it's it's boolean so for people that don't know I mean you know boolean obviously is more of a computer science term but boolean just means binary 0 or 1 right that's it a theorem is turing-complete meaning that it could be a lot more complex and and what I guess the why that matters is that basically Bitcoin just Bitcoin is basically could tell you like whether somebody has it or not right so it's good for like a turns actually like me send you money and that's it so my my balance goes down your balance goes up it's just kind of a basic thing a theorem is a lot more complicated it can be a lot more complicated so I material allows you to write programs on top of it the theory allows you to do smart contracts and so what is a smart contract a smart contract is a contract that could basically exercise automatic right so we know regular contracts if something happens in rental contract you have lawyers that write it you have to go and in get you know if it's a house you have to get title search all that kind of stuff I guess I'm looking at that right now so basically like a smart contract similar to a vending machine right so I go I go to the store I give him a dollar I get coke right but somebody was doing that like somebody like took the money put into the cash register and saw me receive the coke from the from the refrigerator and put it in and then we kind of do it that way but a vending machine is like all right I put the dollar in the machine programmatically sends me the coke right then and there right and so that's very that's a very simple example but if you can do that programmatically there are so many things you could do right and it could be a lot but you could build things on top of each other right so people are so when I told you about those 2000 coins they're being created a lot of people are creating coins on top of aetherium because you you can do you can almost do like all type of permutations right because at the end of a cold and most of the internet is just math right it's like a bunch of if-then that that's that gotta get packed on top of top of each other so people are creating all the type of stuff on theorem so when it comes to like when you look at crypto and you look at what is actually used for different things bitcoin is not that useful for much other than you know most people are just using it as kind of like a big a gold storage kind of like a commodity some people obviously like in Venezuela Turkey we have you are using it for money in theory and people are actually calling it on top of it right it's almost as if it's almost like a coding language like Python or HTML or what have you like people do the same way you build websites on top of languages people are doing that on top of Atheneum the only problem with interior made a lot of these Kryptos is that they don't scale very well so like if if you if you do have something where a lot of people are using it the network quote-unquote could be slowed down right and so the reason why the network could be slowed down is because you need everything that happens needs to go out to this blockchain network people have to validate it then the thing could happen right and so in theory it sounds like something that could be having it happen quick but in actuality it actually could take quite a bit of time because you you need enough people to be validating things and things of that sort and-and-and what happens with a theorem is so many different there's so many things that are trying to happen on top of it is that as if you took your laptop and you had you know ten different chrome windows and then you had all these tabs you know you could be to get slow when you do that it's the same kind of thing because it's almost like a decentralized computer versus a decentralized you know money network or bank so hypothetically you can create your own better version etherium but what happens is the reason why the SME coins is actually you have other you have other people that are trying to create better experience right so you do there are other options so like there's things there's something called stellar it's gonna call Neil there's something called stellar Neos is another one that's popular so these are all so you have that you have coins that are trying to be better currencies the Bitcoin you have coins that I've been trying to be better smart contract platforms like aetherium and then you just have this it's kind of like this arms race and you know you have a bunch of engineers that are trying to code that one and try to make it better you have another one and then what happens with this space is what when people are buying into it it becomes like people betting on what technologies are gonna take over at all if I'm worried about the scale I'm better off using it yeah that's what most we were doing but some people are realizing that stellar is a better option like for instance even large companies so like IBM has a blockchain initiative I actually met with the person that runs it earlier this week and she said yeah they were trying to you know and their thing is they're building blockchain technologies for other fortune 500 companies and they're like we wanted to build our kind of corporate block chains for our clients on top of ether but it's just too slow and so they kind of create their they part of a consortium that's creating their own called hyper ledger so you know what we're saying right now in the market is just like a bunch of technologies being kind of battling with each other and trying to be creating it's like this happened in the beginning the internet people were trying to figure out what protocols are best and but HTML one out JavaScript one out right there's so many different ways you could build out websites but the whole world is kind of like over time kind of collapsed and combined over different technologies and those became the kind of like standards so that's where we are right now so it's basically like different technologies betting against each other or people trying to figure out what's best but I guess that's the other point right so like a theory why limited has a huge community of people right so a lot of the smartest engineers are going there so the theory is like you have a bunch of smart people in the room and they kind of bang their heads against each other as for the longest period of time they're going to make things the best because they're gonna kind of compete with each other and sharpen each other out not every not every night to make coins had that like for instance is a firm called consensus which is like a huge firm based in Brooklyn they have about a thousand people and all their thing is like you wonder the person that invented that created it was one of the founders of a theorem he became a billionaire he took his own money and create as large organization and all the organization does is build things on top of a theory whether it's building startups whether it's advising companies to use it advising governments so like they have they just open up they have a team that goes to Saudi Arabia that is pushing Saudi government to leverage ethereum this open up office in Israel they have been and Ireland they're trying to become like kind of like the Y Combinator / McKenzie of the space so yeah I guess I was this this kind of talks about the course but before we go there I guess I've been speaking a lot and obviously I appreciate some of the questions but does anybody have any other questions kind of that's like the only formalized part of it sure good question so that's two so what's happening with the wallet so the hacks happened on wallets and there have been on exchanges so the blockchain is the blockchain but what gives you access to whatever you have on a blockchain let's say yeah let's assume you're a person is it's basically it's I guess two parallel it's like our emails like my email is my gmail is not in my pocket right if my gmail is on Google servers and I could access it with my my email address and my password they say it works the same way for crypto so your Bitcoin holdings are actually on the blockchain all the time it's always like on the this decentralized server but what allows you to access it is it's a public key and private key so public key is like an email address private key is like your password and if somebody has access to that they can just grab your stuff and there's ways to trick just like I could trick you to get your you know credit card information I'll get tricky to get your email password there are people that you know you could use that hacked into your computer maybe there's many ways where you can be tricked into giving up your public and private keys and that's what usually happens yeah yeah so there is I mean the problem is you know legally sometimes for the largest ones I mean so that I guess there's two big tax issues it's people but more importantly what you probably in hearing are exchanges cuz what happens with people trade on exchanges the exchanges have basically people's keys and then if people could have exchange and then you could have access to you know billions of dollars right so let's say if coinbase was to get hacked you know that probably be you know upwards of 500 billion dollars and somebody could take right but the reason what echoing bases they've done things to kind of protect against that but yes there there was a large hack that happened to a crypto currency exchange earlier this year in Japan they were able to track it by looking at the different point I mean wallets that the coins were going to and in kind of check the person but you have to be quick you have to be good you have to have legal you have to have law enforcement that's gonna be along with it if that was happened to us probably want to work out like NYPD FBI are not synced out with the cryptocurrency space well enough and you have to be very very fast because I mean somebody could like do some of the way like you take it put it into one wallet then fast move it to like 500 different wallets then like I mean it can become like this cat-and-mouse game and you know as the space grows hackers would be as a space become more sophisticated hackers are maybe even more sophisticated oh sure sure there's a lot so you know people are using the blockchain to track right so you know remember how Chipotle had a big issue because you know there was a coal I didn't know what where the lettuce came from what people are doing is they're trying they're basically stamping produce putting that on a blockchain and using that to track where something coming from so that way if there is something like that that happens in the future people know well like that fish came from you know that fish farm or that piece of tomato came from there it's almost like it gets what's happening between companies people are realizing like historically you know was at Chipotle would have its own database and so they would see the boxes right but then the the the person that gives them the stuff let's say it's you know farmer Joe in Montana you don't know farmer Joe has the same code like you know they may they may hold their produce on you know five digits and you may do 100 teaches what happened right so using the blockchain you kind of just centralize it and you could track it and you can see what's going on so people are leveraging the blockchain that kind of between different things in general you know technology the one of the leaders in technology is usually gaming actually if you look at some of the different technology that came out before there's a lot of different things that are happening with gaming for instance you know people that have familiar with Second Life basically like you could basically you basically have this decentralized world where people could buy things you could you have a character you could buy a coat of armor or what happened right it sounds silly but people actually spend money on that kind of stuff right you could kind of have that kind of stuff on the blockchain where you could take your character and put it on to into another game you're nice you're not it's historically you would let's say you play candy crush and you would have to just use all the things digital digital stuff you use on candy crush now you can do it off it can crush there to be on the more serious side you know there are things are happening in finance right so people are thinking you're trying to use a blockchain to digitize equity right or digitize hard assets right so historically you you know if you had a apartment building and you wanted to share ownership around it you know it would be a lot of legalities around it it would be hard to track the folks people are trying to figure out how can I take that blockchain ledger and take asset like that split it up and then the ownership will be there and it could be tradable all right so people would take taking these coins and actually put it on top of real assets what else I mean there's this so many different things that uh people are testing Nicolle coin ordered some beers corn somebody's talking independent of the project that is the the there's the blockchain is kind of like the environment and that's what's being passed around an environment to basically compensate for resources right because if you didn't have a currency you know how would you know what trans actually goes first how would you how would you track people to validate transactions but yes it goes on top of it so the blockchain is the is the Bank of America and in Chase and the coin and the coin is always the dollar that goes between those players but in the example I was giving him when you have block chains that are within corporate environments you don't need the coins because it's kind of like all trusted parties right so a lot of times let's say Chevrolet was to use a blockchain for something all the trusted parties would be probably a business partner so you don't have to like compensate you just like every well this is this is a technology we want to use so that's it's not really decentralized its kind its quasi decentralized because it's like between Chester parties but it's a lot better than what they have now so you have in different use cases you obviously electronical medical records are sure so I mean you can the records can be electronic put on a blockchain and you could be the only person that has the keys to it and then when you want when you go to see your dentist you give the person here put your access to your I guess your your data and then once you left that office and you could pull that data access from that individual right right right so yeah if it's only you then I mean it's just like you know yeah it's just like your pocket like but if you if it's something you need other people to view you would have to have it that it's open but you could control the access yeah she probably would past the public key yeah which is like her email address

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