Future Money: Paper or Data? Kuldar Taveter, Professor in Software - - PowerPoint PPT Presentation

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Aug 25, 2023 237 likes •477 views

Future Money: Paper or Data? Kuldar Taveter, Professor in Software Engineering, Department of Informatics, Tallinn University of Technology, Estonia Who am I? n Name: Kuldar Taveter n Position: Professor, Chair of Software Engineering

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Future Money: Paper or Data?

Kuldar Taveter, Professor in Software Engineering, Department of Informatics, Tallinn University of Technology, Estonia

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Who am I?

n Name: Kuldar Taveter n Position: Professor, Chair of Software Engineering n Education:

n Dip.Eng., TUT, 1988 n M.Sc., TUT, 1995 n Ph.D., TUT, 2004

n Work experience:

n 1985-1989: Institute of Cybernetics n 1989-1993: Private companies n 1993-1998: Department of Informatics of TUT n 1997-2005: Technical Research Centre of Finland n 2005-2008: The University of Melbourne, Australia n 2008- : Department of Informatics of TUT n Jan-Aug 2011: University of South Carolina, USA

n Research areas: Agent-oriented software engineering, engineering

f sociotechnical systems, multiagent systems, intelligent systems,

ambient intelligence, agent-based simulation

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Background

63% of all monetary transactions in

Estonia are conducted by a debit or credit card

Getting rid of paper money?
Mistaken transactions?
Can we trust centralized banking

solutions in any country?

50 million digital signatures are

given each year in Estonia

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Requirements for money

Durable
Portable
Divisible
Storable
With intrinsic value

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Cryptocurrency - Bitcoin

Durable
Portable
Divisible
Storable
With intrinsic value
In addition:

ü Homogeneous ü Easily cognizable ü Imperishable ü In practice fully shielded from counterfeiting

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Foundations for Bitcoin

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Biggest P2P system

https://bitcoin.org/bitcoin.pdf

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Sending and receiving money (source: Yevgeniy Brikman)

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How does Bitcoin work? (Wikipedia)

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Blockchain

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How is scarcity guaranteed?

Collective mining: repeatedly verifying and

collecting newly broadcast transactions into a new group of unlinked transactions called a block

Each new block is a cryptographic hash of

the previous block containing a link to the previous block

Every approximately 14 days, the difficulty

target is adjusted based on the network's recent performance, with the aim of keeping the average time between new blocks at ten minutes

Incentives for mining:

ü Newly created Bitcoins ü Transaction fees

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Bitcoin mining farm in Iceland

(Wikipedia: "Cryptocurrency Mining Farm" by Marco Krohn

Own work. Licensed under CC BY-SA 4.0 via Commons)

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Adding a block by mining (source: Yevgeniy Brikman)

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Adding a block by mining (source: Yevgeniy Brikman)

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Increase of the mining difficulty (Wikipedia)

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Number of Bitcoin transactions per month (Wikipedia)

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Smart Contracts and Agents

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Pros and Cons of a Cryptocurrency

Pros:

ü Intrinsic value is collectively rather than voluntarily assigned ü Anonymity is preserved ü Lower transaction fees ü Repudiation of transactions is not possible ü Supports smart contracts

Cons:

ü Requires both parties of the exchange to possess the necessary technology that gives access to Bitcoins or units of other cryptocurrencies ü One may have to wait until the transaction gets registered in a new block ü Requires the acceptance by the governments

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Future Money: Paper or Data?

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