These slides: slides.cuban.tech/crypto.intro.html
Network: cubantech
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- Cuban Central Bank issues informative note about crypto
- Discourage joining crypto investment schemes
- Bitcoin logo everywhere
- Stop the F.U.D
- Fear
- Uncertainity
- Doubt
- Q&A
- Cryptocurrencies are they real money ?
- What's a cryptocurrency all about?
- How can I trust cryptocurrencies if I can't see them coins?
- Crypto are not regulated. I trust my bank and my government
No previous knowledge to understand
--
- How #cryptocurrency could work from #Cuba ?
--
- How #cryptocurrency could work from #Cuba ?
- continued ...
- How Bitcoin price is determined?
- How Google determines Bitcoin price?
- Is Bitcoin obsolete?
--
- I'll use cryptocurrencies once I understand what they doing ...
- How do cryptocurrencies work?
- What's the difference between cryptocurrency , banks and accounting bookkeping?
--
- Gimme them crypto ! Do I need a bank account?
- How do I actually use crypto?
--
- What does the Cuban cryto law says? Implications?
- What does the Cuban cryto law says? Implications?
- Do I always need a wallet ? What's the best one ?
- Can anybody confiscate my crypto ?
- Who can see how many crypto coins I have ?
--
- Q&A
- Financial freedom vs Bitcoin vs Government
- All crytpocurrencies are fraud 'cause invented by Ponzi
- Hey Mom! John Doe offered me crypto. Is he a criminal?
- Gimme them crypto ! Do I need a bank account?
- How do I actually use crypto?
- Do I always need a wallet ? What's the best one ?
- How can I make money by mining crypto?
--
- Q&A
- How much expensive are Bitcoin transactions ? Higher than 3% fee in ATM ?
- If I buy crypto and its price sinks ... do I lose my money?
- I want crypto no more ... can I get my money back? ... I'm Cuban ...
- Where do people mine Bitcoin?
- Is any special equipment needed to mine crypto?
- Does crypto mining pollute the environment ?
- How to launch a decentralized #cryptocurrency from #Cuba ?
--
- Q&A
- Who can see how many crypto coins I have ?
- Can anybody confiscate my crypto ?
- How to implement crypto in Cuba for country-level money transfer?
- ... circumvecting the embargo ...?
- ... what if I buy a quantum computer? ... hein !
- Is there anybody really using this ?
No previous knowledge to understand
--
- What's volatility ?
- If Satoshi Nakamoto gives away its/their crypto ( ≈ 1M BTC) what would happen to Bitcoin price?
- Beyond cryptocurrencies ...
- Medium of exchange
- Unit of account
- Relative value of goods and services
- Store of value
- Stable, save, store, and retrieve
Fetichism of exchange
- Commodity
- gold, silver, salt, conch shells
- Cash
- Paper money
- Coinage
- Representative
- Face value
- Backed by commodity, not being the commodity
- Value by government regulation
- Maintains value
- No intrinsic value
- No use value
- First use in China 11th century
- 1971 - Nixon decoupled US from gold
- Progressively adopted world-wide
- Demand deposit account
- Funds can be withdrawn at any time by check or cash withdrawal
- No prior notice to the bank or financial institution.
- ATM & payment cards
- Credit cards
- Debit cards
- Gift cards
- Fleet cards
- Money represented digitally
- 1990 - In USA all money transferred between central bank and commercial banks was electronic
- Central bank-issued
- Peer-to-peer
- Electronic
- Universally accessible
--
- USA Precious Metal Coins
- Legal tender enacted by Gold Bullion Coin Act of 1985
- Commodities : bullion gold, gold, palladium, platinum , silver
--
- Commodity money None (that I know)
- Cash CUP only
- Cryptocurrency : All ( no legislation )
- Central-bank issued crypto None
- Wholesale crypto markets None . US embargo
--
- Central bank reserves
- 10% of all state-owned profit ( Instrucción 9/2011 BCC )
- International reserves
- Central bank digital currency MLC
- Vrtual currency unknown
- Bank deposits
- Cryptocurrencies are
- Peer-to-peer
- Electronic money
- Retail vs wholesale
- Decentralised vs regulated
- Large sums of money lent by financial institutions in money markets
- Large corporations
- Financial institutions
- Short-term financing
- It is critical to the U.S. and global financial systems
- U.S., new money market regulations came into force in 2016
- Voice OTC : directly with trader e.g. via Bloomberg, Skype, or Slack
- Electronic OTC : via an API e.g. FIX , REST
- Digital asset for medium of exchange
- Coin ownership records
- Computerized database ledger
- Strong cryptography
- Secure transaction records
- Control the creation of additional coins
- Verify the transfer of coin ownership
- Unless otherwise noted, let's talk #Bitcoin
- Should crypto be legally regulated in Cuba?
- What key aspects would that include?
- What institutions should lead the process?
- Stacks
- Insight Notes Linked to the J.P. Morgan Basket of Companies with Exposure to Cryptocurrency (Mar 2021) due May 5, 2022
- Telegram TON rejected by SEC
- SEC press release to see why ...
- HALT !
--
| Ticker | Share Value | Stock Weight | Stock Type | |
|---|---|---|---|---|
| MicroStrategy Inc | MSTR | $0.001 | 20% | Class A |
| Square, Inc. | SQ | $0.0000001 | 18% | Class A |
| Riot Blockchain, Inc | RIOT | - | 15% | Common |
| NVIDIA Corporation | NVDA | $0.001 | 15% | Common |
| PayPal Holdings, Inc. | PYPL | $0.0001 | 10% | Common |
| Advanced Micro Devices, Inc. | AMD | $0.01 | 5% | Common |
--
| Ticker | Share Value | Stock Weight | Stock Type | |
|---|---|---|---|---|
| Taiwan Semiconductor Manufacturing Company Ltd | TSM | NT$10.00 | 5% | American depositary shares 1x5 common shares |
| Intercontinental Exchange, Inc. | ICE | $0.01 | 4% | Common |
| CME Group Inc. | CME | $0.01 | 4% | Class A |
| Overstock.com, Inc. | OSTK | $0.0001 | 2% | Common |
| Silvergate Capital Corp. | SI | $0.01 | 2% | Class A |
- One of many models
- Based on Initial Public Offering
- Regulation of ICOs depends on how an ICO is categorized.
- Varies according to jurisdiction
- Taxation
--
- Depends on whether the token offered is categorized as
- Debt security
- Equity security
- Managed investment product
- Derivative
--
Netherlands, the rules applicable to a specific ICO depend on whether the token offered is considered a security or a unit in a collective investment, an assessment made on a case-by-case basis
--
- Israel : taxed as asset
- Bulgaria : taxed as financial asset
- Switzerland : taxed as foreign currency
- Argentina & Spain : subject to income tax
- Denmark : subject to income tax and losses are deductible
- United Kingdom:
- corporations pay corporate tax
- unincorporated businesses pay income tax
- individuals pay capital gains tax
█ legal █ regulated █ indirect ban █ hostile █ no record
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- China's digital yuani... videos
- Venezuela Petro
- ECCB DCash legal tender
- Ireland
- Lithuania LBCOIN
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- Sovereign (SOV)
- 2018 Sovereign Currency Act
- SOV Whitepaper
- Problem: High costs of remittances
- Inspired by EOS cryptocurrency work
- Decentralised (community) vs centralised (government)
- Regulatory framework for crypto
- Legal ramifications
Poll via @cubantech
- 3 votes ... 1%
- Exactly what ICO's all about
- No Stock Exchanges , it's ilegal
- ... in few words , FORGET IT !
- Will change with forthcoming enterprise law and regulation ?
- Socialism vs capitalism ?
--
China's 3 in top ten, plus
- Caracas Stock Exchange
- Completely electronic since Feb 1992
- SIBE (Sistema Integrado Bursátil Electrónico) since July, 1999
- Ticker: BVC
- Currency: VES
- 5 votes ... 1%
- Regulated
- Enerprise can use it ONLY in case of not having profit
- Accumulates 10% of enterprise profit
- Central-bank issued cryptocurrency wholesale
- Payment between central banks
- Domestic payments between commercial banks
- Cross-border payments between commercial banks
- Needs consensus among national states
Project Aber - Saudi Arabia and UAE
Project Aber - Saudi Arabia and UAE
Project Aber - Saudi Arabia and UAE
- Architectural infrastructure resilience
- Decentralizaton => no single point of failure
- Failure of single not will not lead to whole country collapse
- Improved security
- CDBC as a backup to RTGS
- DLT fundamentally different technology
- Attack vectors to core system cannot be reproduced
- on-boarding of non-bank participant easier and lower costs
- Solve Delivery vs Payment problem
- Atomic swap of assets for CBDC
- Call for applications to experiment CBDC for interbank settlement
- Wholesale vs retail
- Interbank use cases
- Delivery vs payment
- Payment vs payment
- Payment vs delivery of digital assets
- Results
- 5 votes ... 1%
- Non-fungible tokens
- ICO's ... coming soon
- Fidelity
- Soccer
- Zilliqa
- Olyseum
- FCB and Chiliz fan voting
- Public figures
- Soccer
- 22 votes ... 5%
- Stablecoins
- USD (i.e. MLC) vs CUP
- Exchange => CADECA
- Solve many problems
- Double spending in TuEnvio.cu, EnZona, etc ...
- No paper money or coinage needed
- DApps on top
- Pegged to fiat
- Regulated reserve for fintech apps: USDC and VISA
- Used by exchanges: BUSD, BGBP
- Backed by other cryptocurrencies
- Over-collaterized
- Mirror tokens => e.g. DEX
- No reserve
- Working mechanism for stable price
- ... like central banks do
- Complicated for regulators
- Basecoin shut down by SEC on Dec 2018
- Bank of England new discussion paper on CBDC
- G7 Working Group on Stablecoins recommendations on stablecoins
- 24 votes ... 5%
- Awesome for boosting manufacturing sector
- Power (generation , distribution , comsumption)
- Water
- Supply chains (tracking)
- 57 votes ... 12%
- Local development !!!
- Recently approved in Cuba
- Pegged to local dev fund assets
- Transparency
- Social cryptocurrency
- Lebrija, Sevilla, Spain => Elio
- Girona, Catalonia, Spain => Eurakos
- Belgium => RES
- Bilbao, Euskadi, Spain => Ekhi
- Bristol, England => Bristol Pound
- Bay Bucks, San Francisco, USA
- 58 votos ... 12%
- Solomonic solution
- I voted for it !!!
- 86 votes ... 18%
- Regulated by current legislation
- What would be the regulation framwework?
- 208 votes ... 48%
- Original intent
- Open debate
- Pros
- Cons
- Really?
- Exchanges
- Coin supply vs market demand
- Consumer fidelity
- Speculation
- Coin supply vs market demand
- Mining
- 1 BTC cost
- Miner rewards
- Regulations governing its sale
- Competing cryptocurrencies
- Its internal governance
--
- Total :
2,100,000,000,000,000satoshi - In circulation 86% (Dec 2020)
- Emission : on a regular basis
- algorithmic
--
21.000.000BTC x100.000.0002,100,000,000,000,000satoshi /7,900,000,000people26,582satoshi /100,000,0000.00026582BTC x36,765.10USD/BTC$9.77USD per person in the world- BTC market cap
$653,000,000,000. - ... equivalent to just
1.7%of the world's money. - ... about
5.3%of the world's gold supply. - if Bitcoin captures
15%of the global currency market- Total price roughly
$514,000USD.
- Total price roughly
--
--
- Scarcity
- No backdoors (e.g. no national debt bonds for CUP )
- Well-understood chrystal-clear rules
- No fraudulent schemes
- No minting machines to inject coins into the system
| Cryptocurrency | Banks | Bookkeeper |
|---|---|---|
| Address | Card number | Client name |
| Output | Cheque (rather than cash) | Money In/Out |
| Input | Cancellation | Money Out |
| Transaction | Transaction | Money In/Out |
| Mempool | Order queue | OTC sheet |
| Block | - | Signed page |
| Blockchain | Database | Ledger book |
blocktrail.com
- Scalability
- Users
- Transactions / operations
- Branching
- Hierarchy
- Distribution
- First paragraph
- Money laundry
- Terrorism financing
- Mass destruction weapons
- Now we are talking ... :D
- National currency stability
- Control inflation
- Crypto under control
- FACT : Crypto beyond Central bank control
- Handling implies a risk
- ... to financial stability (think of decentralisation)
- Volatility
- "Cyberspace" data networks
- Decentralization is a threat
- What's key (i.e. must haves)
- Minting control (none for BCC)
- Regulation of usage
- Official supervision
- Punishments
- Financing of "criminal" activities
- (Excessive) anonymicity and neutrality
- Control money and exchange market
- Surveillance and monitoring
- i.e. hard to think of community crypto assets
- Regulation and control of all payment gateways in use in #Cuba
- Respect Cuban legal tender
- iow stable coins bound 1x1 to either
CUPorMLC
- iow stable coins bound 1x1 to either
- ... but open the window to viryual assets
- Decreto-Ley 362 2018/09/14 about financial (fintech) nstitutions
- May be applied to any person
- ... not explicitly mentioned in the body of thhe law
- Central bank authorisation required
- ... transactions performed in Cuban soil
- ... high volumes or finance, exchange, credit policies
- Keep crypto inside he (legal) box
- Crypto service providers will require a license
- i.e. centralisation
- License under current fintech institution terms Decreto ley 362/2018
- quite restricted ... legal person
- not just any legal person ...
- Crypto service providers will require a license
- Any crypto transaction has to be authorized by BCC
- Anyone / anything that :
- does business
- participates in money exchange
- transfers transactions
- holds assets under custody
- who owns financial instruments (fintech)
- middlemen participating in fintech services between issuer and consumer
- Understand what it is
- Determine if you actually need it
- Learn to use it securely
- Avoid common pitfalls
- What is a wallet? Why do I need it?
- CRITICAL: Receive and spend coins (e.g. satoshi)
- Not necessarily both of them
- Generate privete / public key pairs
- Distribute public keys
- Sign transactions
- Scan blockchain to determine "account" balance
- Interact with the P2P network
- Read blockchain incrementally
- Broadcast transactions for confirmation
- Watch-only wallet
- Connects to P2P network
- Offline
- Do the rest ...
- Full node
- Download the whole blockchain and verify
- Fooling becomes expensive after 6 confirmations
- Only a single honest P2P node needed
- SPV client
- Initial sync headers only, delay transactions
- Scalability 4.2 MB per year
- API layer over blockchain
- Increase security
- Private keys stored in a more secure environment
- Separate networked wallet for P2P
- Dedicated plug-and-play device
- Hardened firmware and hardware
- True random number generator
- Standardized tes suites
- e.g. NIST
- Immune to viruses
--
--
- Run in difficult-to-secure environments, such as webservers
- Designed to distribute public keys and nothing more.
- Two implementations
- Pre-populated database (public keys or addresses)
- Pubkey generator
- BIP-32 HD protocol
- No repeated communication between multiple programs
- Child accounts
- Simplify wallet backups
| Entropy Bits | Words |
|---|---|
| 128 | 12 |
| 160 | 15 |
| 192 | 18 |
| 224 | 21 |
| 256 | 24 |
- PIN protects device from being used
- Passphrase prevents seed/wallet from being used
- Impervious to physical attack
- Protects Bitcoins if recovery seed (mnemonic) stolen
- Hidden wallets
- Gun point $5 wrench attack
- Improved UX
- Facilitate payments in physical stores
- NFC
- Touch-to-pay
- QR code scanning
- Prone to malware
- Zero-conf ubiquitous access to Bitcoins
- Built on HTTP(S) client server architecture
- By default stores your private keys in the server.
- SECURITY RISK
- Examples
- Ransomware extortion of DarkSide targets Colonial Pipeline
- Totalling
75BTC - Gasoline shortages along the East Coast
- Totalling
- DoJ seized 63.7 BTC
- ... about
$2,300,000USD
- ... about
- How?
... based on affidavit
- FBI reviewed the Bitcoin public ledger
- ... hence the
63.7BTC amount
- ... hence the
- Sequence of Bitcoin transactions
- FBI follows the money ...
- ... until it reaches a said Subject Address
- FBI claims they had the private key
- Only speculations
- FBI penetrated DarkSide infra
- DarkSide used a service that owned the private key
- Never imagine ECDSA was broken
- Ledger is public
- Can anyone see?
blocktrail.com