NOTES FOR 1 800x600/bad PROJECTORS: Use at least 22pt* font. *FIXED, Proxima Nova is a bit larger than Arial. BITCOIN MECHANICS See here: http://www.pptfaq.com /FAQ00125_How_big AND OPTIMIZATIONS _should_text_be-_Wh at-s_the_ideal_font_si ze-.htm The font size on the Max Fang first 15 slides is fine. Those are most likely Philip Hayes going to be the most used slides. The rest of the slides have 25 pt font in the paragraphs. However, the subtitles need to be resized (20pt, hard to see in current position for those other slides).
1 Cryptocurrency Mining: Proof-of-Work Consensus Nadir Akhtar
2 LECTURE OUTLINE 1 Intro and Terminology 2 Bitcoin and Consensus 3 Bitcoin Concepts 4 Mining Sketch 5 Bonus Content: Merkle Trees and Consensus Updates
3 1 INTRODUCTION
4 TERMINOLOGY ● ● ● ● ●
5 2 BITCOIN AND CONSENSUS
6 SATOSHI NAKAMOTO'S INNOVATION ● ○ ● ○ ○ Dorian Satoshi Nakamoto (not actually Satoshi Nakamoto)
Slide by Viget v1 Alice writes and signs a message describing her transaction A “I, Alice, am giving Bob one bitcoin.”
G A Slide by Viget v1 C E Alice sends her message to the world F A B J H D
G A Slide by Viget v1 C E Alice sends five identical messages F A A B ? J H D
G A Slide by Viget v2 C E Introducing uniquely identifiable serial numbers F A B 8732 J H D
Slide by Viget v2 Where do serial numbers come from? 8732 ?
Slide by Viget v2 A central bank manages transactions and balances E D G B H A I C
Slide by Viget v2 Centralization E D G B H 01 01 A I C 01 01
Slide by Viget v3 Making everyone the bank. Everyone has a complete record of transactions E D G B C A I
Slide by Viget v3 Alice sends her transaction to Bob E D G B C A I
Slide by Viget v3 Bob announces the transaction to the world E D G B C A I
Slide by Viget v3 Alice double spends on Bob and Charlie E D G B C A I
Slide by Viget v4 Everyone verifies transactions E D G B C A I
Slide by Viget v4 Alice is prevented from double spending E D G B C A I
Slide by Viget v4 Alice sets up multiple identities A A A B C A A
Slide by Viget v4 Alice double spends with her multiple identities Sybil Attack : Creating many fake identities to subvert a system A A A B C A A
G A Slide by Viget v5 C E Proof-of-work F A B J H D
Slide by Viget v5 Other users add to list of pending transactions 1. I, Tom, am giving Sue one bitcoin, with serial number 3920. 2. I, Sydney, am giving Cynthia one bitcoin, with serial number 1325. 3. I, Alice, am giving Bob one bitcoin, with serial number 1234.
Slide by Viget v5 Verifying transactions 1 2 3 Check Solve Announce blockchain puzzle block
Slide by Viget v5 Why the math?
Slide by Viget v4 Alice double spends with her multiple identities A A A B C A A
Slide by Viget v5 Proof-of-work as a competition
Slide by Viget Summary Version Major feature Value added 1 Signed messages announced to the Basis of entire system network 2 Serial numbers Uniquely identifiable transactions 3 The block chain Shared record of transactions 4 Everyone verifies transactions Increased security 5 Proof-of-work Prevents double spending
29 BASIC CONCEPTS - IDENTITY IN BITCOIN ● ○ ● ○ ■ ○ ● ○ ○ ○ ○ ○
30 TRANSACTION - A BASIC VERSION ● ○ ○ ● ○ ● Coinbase interface
ACCOUNT VS TRANSACTION BASED 11 LEDGERS CRYPTOCURRENCY DECAL LECTURE 4 Account-based ● must track every transaction affecting Alice Requires additional maintenance, error-prone ● Bitcoin is a transaction-based ledger (triple-entry accounting). Features: ● Change addresses - Required since tx outputs only spent once ● Efficient verification - only read recent history Joint payments - Alice + Bob form 1 tx ● (Credit for content organization and figures goes to Princeton textbook)
35 MINING SKETCH ● ● ● ● ● ● ●
36 MINING SKETCH - FINDING BLOCKS ● ○ ■ ○ ○ ● ○ ■ ○ ■ ● ○ ○ ○ ○
GENERAL TIPS FOR 10 GOOD SLIDES WHAT A MINER DOES -Highlight (bold, underline, or yellow ● A Bitcoin miner must: highlight in B@B yellow) DECAL LECTURE 5 key words that people 1. Download the entire Bitcoin blockchain to ought to remember. store the entire transaction history because if people even 2. Verify incoming transactions by checking remember what few word or phrase links to the signatures and confirming the existence of topic, it’s often enough to valid bitcoins come up with a definition 3. Create a block using collected valid on their end. Readability transactions is king for slides! -Do some testing on 4. Find a valid nonce to create a valid block readability, not just header (the “mining” part) legibility (font size is 5. Hope that your block is accepted by other good) when you’re done nodes and not defeated by a competitor with the slides. This is simply based on how block things are laid out 6. Profit ! (bullets, highlights, bolds, more white space - these are things that help), so pop it up on the projector and go through it quick, maybe like how :efficiencymaster: would
GENERAL TIPS FOR 11 GOOD SLIDES BLOCK DIFFICULTY -Highlight (bold, underline, or yellow highlight in B@B yellow) DECAL LECTURE 5 key words that people ought to remember. because if people even remember what few word or phrase links to the topic, it’s often enough to come up with a definition on their end. Readability is king for slides! -Do some testing on readability, not just legibility (font size is good) when you’re done with the slides. This is simply based on how things are laid out (bullets, highlights, bolds, more white space - these are things that help), so pop it up on the projector and go through it quick, maybe like how :efficiencymaster: would
GENERAL TIPS FOR 12 GOOD SLIDES BLOCK DIFFICULTY -Highlight (bold, underline, or yellow highlight in B@B yellow) DECAL LECTURE 5 key words that people ought to remember. because if people even remember what few word or phrase links to the topic, it’s often enough to come up with a definition on their end. Readability is king for slides! -Do some testing on readability, not just legibility (font size is good) when you’re done with the slides. This is simply based on how things are laid out (bullets, highlights, bolds, more white space - these are things that help), so pop it up on the projector and go through it quick, maybe like how :efficiencymaster: would
GENERAL TIPS FOR 13 GOOD SLIDES BLOCK DIFFICULTY: ANALOGY -Highlight (bold, underline, or yellow highlight in B@B yellow) DECAL LECTURE 5 ● Mining is like throwing darts at a target key words that people ought to remember. while blindfolded: because if people even Invalid Block ○ Equal likelihood of hitting any ring remember what few word or phrase links to the ○ Faster throwers ⇒ more hits / second topic, it’s often enough to ○ Target: within green ring come up with a definition on their end. Readability ○ Difficulty inversely proportional to Valid Block is king for slides! green ring size -Do some testing on ■ Green ring adjusts depending readability, not just legibility (font size is on average time to produce good) when you’re done valid result with the slides. This is simply based on how ○ If people get better at throwing darts, things are laid out green circle needs to get smaller (bullets, highlights, bolds, more white space - these H ( nonce || prev _ hash || merkle_root ) < target are things that help), so pop it up on the projector and go through it quick, maybe like how :efficiencymaster: would
GENERAL TIPS FOR 14 GOOD SLIDES BLOCK DIFFICULTY: PUZZLE PREREQS -Highlight (bold, underline, or yellow highlight in B@B yellow) DECAL LECTURE 5 key words that people ● Hash puzzles: the requirement to find a nonce that satisfies the inequality in the lower left ought to remember. because if people even region beneath the target: remember what few word H ( nonce || prev _ hash || merkle_root ) < target or phrase links to the topic, it’s often enough to ● Hash puzzles need to be: come up with a definition 1. Computationally difficult. on their end. Readability is king for slides! ■ If finding the proof-of-work requires little work, what’s the point? -Do some testing on ■ That’s why we blindfold the dart-throwers. readability, not just 2. Parameterizable (variable) cost. legibility (font size is good) when you’re done ■ Allows for adjustments with global hashrate increases with the slides. This is 3. Easily verifiable. simply based on how things are laid out ■ Should not be a need for a central authority to verify nonce validity; instead, (bullets, highlights, bolds, other miners can rehash the nonce to verify validity. more white space - these are things that help), so ■ If darts fell out of the dartboard, how can we prove where it hit? pop it up on the projector and go through it quick, maybe like how :efficiencymaster: would
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