# Cryptocurrency · Terminal

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Category: Business
Slides: 40
Updated: 2026-05-17T20:52:21.104Z
Tags: business, cryptocurrency

## Summary

Distributed ledgers · permissionless money · contested asset class Key sections include: CRYPTO currency; The 2008 Whitepaper; Problem stated; Solution; What is a Blockchain?; Bitcoin · The Original; Specs; Price History; Ethereum · The World Computer; Key Concepts.

## Slide Outline

1. CRYPTO currency
2. The 2008 Whitepaper
3. Problem stated
4. Solution
5. What is a Blockchain?
6. Bitcoin · The Original
7. Specs
8. Price History
9. Ethereum · The World Computer
10. Key Concepts
11. Proof of Work vs. Proof of Stake
12. Other consensus mechanisms
13. Wallets & Keys
14. Hot wallet
15. Cold wallet
16. Custodial
17. Seed phrase
18. Exchanges
19. CEX · Centralized
20. DEX · Decentralized
21. Stablecoins
22. Why stablecoins matter
23. DeFi · Money Lego
24. Layer 2 · Scaling
25. Case · Mt. Gox 2014
26. Aftermath
27. Case · FTX 2022
28. Regulation
29. U.S.
30. EU
31. Asia
32. El Salvador
33. How People Lose Money
34. Self-inflicted
35. External
36. The Defensive Playbook
37. Recommended Reading & Watching
38. Books
39. YouTube
40. On-chain tools

## Slide Transcript

### Slide 1: CRYPTOcurrency

- CRYPTO > DECK 07.07 > COVER001 / 016
- Distributed ledgers · permissionless money · contested asset class
- "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." — Satoshi Nakamoto, 2008
- Sixteen pages on what cryptocurrency is, how it works, who owns it, what it does (and does not do), and where the regulators stand.
- BITCOINETHEREUMWALLETDEFISTABLECOINL2
- Illustrative placeholder datacenter image · proof-of-work mining used ~150 TWh/yr in 2024 (~Argentina)

### Slide 2: The 2008 Whitepaper

- CRYPTO > ORIGIN002 / 016
- Oct 31, 2008. Anonymous "Satoshi Nakamoto" posts a 9-page paper to a cryptography mailing list. "Bitcoin: A Peer-to-Peer Electronic Cash System."
- Problem stated
- Internet commerce relies on financial institutions as trusted third parties. Banks reverse transactions, charge fees, exclude users. Double-spending is the digital-cash hard problem — without a central server to track who has what, how do you stop the same coin being spent twice?
- Solution
- A timestamp server distributed across nodes. Transactions hashed into blocks; blocks chained by including the previous hash. Proof-of-work makes rewriting history exponentially expensive.
- block_n.hash = SHA256(block_n.tx + block_n-1.hash + nonce)
- while hash >= target: nonce++; recompute
- when found: broadcast; longest-chain wins
- First block (Genesis) mined Jan 3, 2009. Coinbase contained a Times headline: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks"

### Slide 3: What is a Blockchain?

- CRYPTO > PRIMITIVES003 / 016
- A blockchain is an append-only, cryptographically-linked, replicated ledger.
- DecentralizedThousands of nodes. No single authority. Anyone can run a node.
- ImmutableChanging block N requires re-mining N, N+1, N+2 ... faster than the rest of the network.
- PublicAll transactions readable. Pseudonymous, not anonymous. Chain analysis is a multibillion-dollar industry.

### Slide 4: Bitcoin · The Original

- CRYPTO > BITCOIN004 / 016
- Specs
- SUPPLY21,000,000 hard cap. ~19.7M mined as of 2026.
- BLOCK TIME~10 minutes (2,016-block difficulty adjustment)
- BLOCK SIZE~1MB (segwit can pack ~2MB)
- HALVINGBlock reward halves every 210,000 blocks (~4yr). 6.25 → 3.125 BTC in Apr 2024.
- CONSENSUSProof of Work (SHA-256)
- HASHRATE~600 EH/s (2026)
- Price History
- Four major cycles. Drawdowns of 70-85% have followed each peak. Bitcoin remains the highest-Sharpe asset of the 21st century — and the most volatile.

### Slide 5: Ethereum · The World Computer

- CRYPTO > ETHEREUM005 / 016
- Vitalik Buterin proposes Ethereum (Nov 2013) at age 19. Mainnet launches July 30, 2015. Where Bitcoin is digital gold, Ethereum is a programmable platform — a decentralized state machine that runs smart contracts.
- Key Concepts
- EVMEthereum Virtual Machine. Turing-complete bytecode interpreter.
- GASComputational unit. Each opcode costs gas. Gas limit caps cost.
- SOLIDITYStatically-typed contract language. Compiles to EVM bytecode.
- ERC-20Token standard. ~99% of altcoins are ERC-20 contracts on ETH or its clones.
- ERC-721Non-fungible token standard (NFT).
- MERGESep 15, 2022. Ethereum transitioned PoW → PoS. ~99.95% energy reduction.
- contract Counter {
- uint256 public count;
- function increment() public { count += 1; }
- ~32 ETH staked = a validator. ~1M validators secure the chain in 2026. Issuance is dynamic; ETH became net-deflationary post-Merge.

### Slide 6: Proof of Work vs. Proof of Stake

- CRYPTO > CONSENSUS006 / 016
- PropertyProof of WorkProof of Stake
- Sybil resistance viaComputation (hashes)Capital (staked tokens)
- Energy useHigh (Bitcoin ~150 TWh/yr)Low (ETH ~0.01 TWh/yr post-Merge)
- HardwareASICs (specialized)Commodity laptop
- Attack cost51% of hashrate33% of stake (slashed if caught)
- IssuanceBlock subsidy + feesValidator rewards + tips/MEV
- Used byBTC, LTC, DOGE, BCHETH, SOL, ADA, AVAX, DOT
- Other consensus mechanisms
- DPoS (delegated) PoH (Solana — proof of history) PoA (private chains) DAG-based (IOTA, Hashgraph)

### Slide 7: Wallets & Keys

- CRYPTO > WALLETS007 / 016
- A wallet is not where coins are stored. Coins live on the chain. A wallet is software that holds the private keys that authorize spending the UTXOs/balances assigned to derived addresses.
- Hot wallet
- Connected to internet. Browser extensions (MetaMask, Rabby), mobile apps (Trust, Phantom). Convenient. Vulnerable to phishing, malware.
- Cold wallet
- Air-gapped. Hardware (Ledger, Trezor, Coldcard) or paper. Signs transactions offline. Best for long-term holdings.
- Custodial
- Exchange holds keys for you. Coinbase, Kraken, Binance. Easy. Not your keys, not your coins. Mt. Gox (2014) and FTX (2022) showed why.
- Seed phrase
- BIP-39: 12 or 24 words, a deterministic encoding of a 128- or 256-bit master key. From this, all addresses derive (BIP-32 hierarchical wallet).
- witness lazy salute jacket fabric narrow inquiry crystal champion idea swift forest
- Anyone who reads those words can drain your wallet. Store them on metal. Never on a computer. Never in a photo.

### Slide 8: Exchanges

- CRYPTO > EXCHANGES008 / 016
- CEX · Centralized
- Operate like brokers. KYC required. Custody assets. Match orders off-chain.
- ExchangeVolume rankFoundedNotes
- Binance#1 globally2017$4.3B settlement w/ DOJ Nov 2023; Zhao stepped down
- Coinbase#1 in U.S.2012NASDAQ-listed Apr 2021. The crypto blue-chip CEX.
- Krakentop 52011Most security-respected. Proof-of-reserves leader.
- OKXtop 52017Hong Kong / Seychelles. Strong derivatives.
- FTXdefunct2019–2022$8B customer-fund hole. SBF convicted 7 counts of fraud Nov 2023.
- DEX · Decentralized
- Smart contracts. No KYC, no custody. Uniswap (AMM, ~$2T cumulative volume), Curve (stablecoin pools), dYdX (perps), Jupiter (Solana aggregator).
- AMM (automated market maker) replaces order books with liquidity pools. Constant product formula: x · y = k.

### Slide 9: Stablecoins

- CRYPTO > STABLECOINS009 / 016
- Crypto assets pegged to fiat. The bridge between crypto-native and traditional finance. Annual stablecoin volumes (~$10T+ in 2024) exceed Visa.
- CoinIssuerBackingCap (~2026)
- USDT (Tether)Tether LtdReserves attested quarterly · mostly T-bills$110B
- USDCCircleBank deposits + T-bills · monthly attestation$45B
- DAIMakerDAOCrypto + RWA over-collateralized$5B
- FDUSDFirst DigitalHong Kong-regulated, T-bill backed$3B
- Algorithmic stablecoins are not stablecoins. UST (Terra/Luna) collapsed May 2022, wiping ~$45B of value over four days. The market's lesson: collateral matters.
- Why stablecoins matter
- Crypto trading pair denominator (vs. BTC/ETH) Cross-border payments — sub-second settlement, sub-1¢ fees Onshore for those without dollars (Argentina, Turkey, Nigeria) DeFi base layer

### Slide 10: DeFi · Money Lego

- CRYPTO > DEFI010 / 016
- Decentralized Finance: smart-contract-based replicas of traditional financial primitives. Permissionless, transparent, composable.
- LendingAave, Compound, Spark. Deposit collateral; borrow against it. Interest rates set by utilization curves.
- DEX / AMMUniswap, Curve, Balancer. Provide liquidity → earn fees. Impermanent loss is real.
- DerivativesdYdX, GMX, Synthetix. On-chain perpetual futures and synthetic exposure.
- Liquid stakingLido, Rocket Pool. Stake ETH; receive stETH that's tradeable and composable.
- Real-world assetsOndo, Maple. Tokenized T-bills, private credit. The institutional bridge.
- Yield aggregatorsYearn, Convex. Rotate capital across pools to optimize APR.
- Total Value Locked peaked at $180B (Nov 2021), bottomed at $36B (Oct 2023), recovered to ~$95B in 2026. Concentration: ~50% of TVL on Ethereum.

### Slide 11: Layer 2 · Scaling

- CRYPTO > L2011 / 016
- Ethereum mainnet handles ~15 tx/sec. Visa handles ~24,000. Layer 2 networks bundle transactions off-chain, post compressed proofs back to L1.
- L2TypeTPS (target)Notes
- ArbitrumOptimistic rollup~40,000Largest L2 by TVL
- Optimism / BaseOptimistic rollup (OP Stack)~2,000Coinbase-backed Base on OP Stack
- zkSync EraZK rollup~2,000STARK-based proofs
- StarkNetZK rollup~1,000Cairo language, validity proofs
- LightningBTC payment channelmillions (theoretical)Off-chain BTC payments
- EIP-4844 (Mar 2024) added "blobs" — cheap data slots specifically for L2 calldata. L2 fees dropped 10×.

### Slide 12: Case · Mt. Gox 2014

- CRYPTO > CASE: MT.GOX012 / 016
- Founded 2010. By 2013, Mt. Gox processed ~70% of all Bitcoin transactions. Feb 2014: withdrawals halt. Site goes offline. 850,000 BTC missing (~$450M then; ~$57B at 2026 prices).
- Cause: years of slow-leak theft. CEO Mark Karpelès' code lacked basic accounting. Hot wallet keys stolen iteratively. Trustees recovered ~200,000 BTC in cold storage.
- Aftermath
- Bankruptcy proceedings still being settled in 2024–2026. Creditors voted for in-kind BTC distribution. The case set the template: never trust an exchange's "audit" demand proof of reserves withdraw to self-custody.

### Slide 13: Case · FTX 2022

- CRYPTO > CASE: FTX013 / 016
- Sam Bankman-Fried, Stanford physics, Jane Street, MIT. Builds FTX in 2019. Raises at $32B valuation. Buys SuperBowl ad with Larry David. Endorsed by Tom Brady, Steph Curry. Sponsors Miami Heat arena.
- Nov 2, 2022: CoinDesk publishes Alameda's balance sheet. ~$5B of $14.6B "assets" are FTT — FTX's own token. Binance announces it will dump its FTT. Run begins.
- Nov 8: withdrawals halted. Nov 11: bankruptcy. Customer funds had been routed to Alameda Research, used for venture investments, real estate, political donations. $8B hole.
- SBF convicted Nov 2, 2023 on all 7 counts. Sentenced to 25 years. Customer recovery via bankruptcy estate ultimately exceeded 100% in nominal dollars (driven by BTC/ETH appreciation).
- "I fucked up." — SBF, on Twitter, two days before bankruptcy

### Slide 14: Regulation

- CRYPTO > REGULATION014 / 016
- U.S.
- Jurisdictional ambiguity. SEC claims most tokens are securities (Howey test); CFTC claims BTC and ETH are commodities. Spot Bitcoin ETFs approved Jan 10, 2024 (BlackRock IBIT, Fidelity FBTC). Spot ETH ETFs approved July 2024.
- MiCA (Markets in Crypto-Assets), in force from Dec 2024. Comprehensive: licensing for issuers, stablecoin reserves, market-abuse rules.
- Asia
- Singapore · MAS payment-services license · cautious-but-open. Hong Kong · 2023 retail framework · trying to retake Asia hub status. Japan · oldest framework (post-Mt.Gox 2017). China · domestic ban since 2021; CBDC piloted instead.
- El Salvador
- First country to make BTC legal tender (Sep 2021). National wallet (Chivo). Citizens still mostly use USD. Symbolic more than transactional.

### Slide 15: How People Lose Money

- CRYPTO > PITFALLS015 / 016
- Self-inflicted
- Lost seed phrase. Estimated ~3–4M BTC permanently lost.Phishing — fake wallet popups asking for seed.Approve scams — signing infinite-allowance approvals on dapps.Buying tops, selling bottoms.Leverage. 100× perps annihilate accounts on 1% moves.
- External
- Exchange bankruptcy (FTX, Celsius, BlockFi)Smart-contract exploit (Ronin $625M, Poly Network $611M)Rug pulls — devs drain liquidity, vanishPump-and-dumps — usually orchestrated on TelegramAlgorithmic stablecoin depeg (UST/Luna)Bridge hacks — cross-chain bridges have lost billions
- The Defensive Playbook
- Self-custody for >$10k Hardware wallet, two locations Verify URLs Never sign blind — read the prompt Diversify — BTC + ETH + stablecoin yield is most of the alpha Position size you can lose

### Slide 16: Recommended Reading & Watching

- CRYPTO > READING016 / 016
- Books
- Nakamoto — Bitcoin Whitepaper (2008). 9 pages. Required.
- Antonopoulos — Mastering Bitcoin · Antonopoulos & Wood — Mastering Ethereum
- Saifedean Ammous — The Bitcoin Standard · Lewis — Going Infinite (FTX/SBF)
- Popper — Digital Gold (Bitcoin's early history) · Faux — Number Go Up (the 2022 collapse)
- YouTube
- CNBC — crypto coverage and FTX documentary
- Bloomberg — crypto markets segments
- Bankless — deep on-chain interviews
- Andreas Antonopoulos — timeless Bitcoin lectures
- Stanford GSB — crypto seminars (Vitalik 2018)
- On-chain tools
- etherscan.io · defillama.com · dune.com · glassnode.com · l2beat.com
- ← Catalog · Business & Economics index · Vol. VII · Deck 07 · Crypto


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