I can proudly say that our first meeting Crypto@Cracow is in the books now! What initially had been just a child of the imagination of 5 men (Adam Kotucha, Jacek Sieradzki, Wojciech Kwiatek, Tomasz Korwin-Gajkowski and Tomasz Kurowski), turned out to be a successful event. Undoubtedly, we are really built up by the outcome of the work. We have to admit, we are kind of lucky since there had not been any similar group in Cracow until we started with Crypto@Cracow. Even though, we know there is room for improvement, we do feel that we did a decent job. Definitely, we are going to carry on to build a blockchain community in Cracow:)
The Agenda may have looked plain simple, but the whole presentation took nearly 90 minutes to delivery. There were like 50 people in the audience – quite nice:)
Important: The presentation is available under the below link
What is the motivation behind the Bitcoin/Blockchain? – Wojciech Kwiatek
The first part was covered by Wojciech Kwiatek, who has been following the development of the cryptocurrencies and blockchain technology for several years now. No question, he is the person of an incredible spectrum of economic knowledge.
Wojciech started with a brief definition of the blockchain, stating that it is not only a technology but primarily, a cultural paradigm shift. Later on, we could hear about the Cypherpunks group and which one of them was Satoshi Nakamoto – a creator of Bitcoin. The main purpose to create such a system was described:
“What is needed is an electronic payment system based on
cryptographic proof instead of trust, allowing any two willing
parties to transact directly with each other”
Then, we had a wonderful visualization what is the difference between Centralized, Decentralized and Distributed models of the network. In addition, Wojciech told us where the most of the bitcoin nodes are located in the world. There was no surprise that the Western Hemisphere is still topping the list.
The next part of his delivery was to explain how BTC is able to fulfill all of the seven characteristics of money. There was also a shortened history of money and monetary base.
- Scarcity – Limited, predictable supply
- Durability – Will not decay
- Divisibility – Easy to subdivide
- Recognizability – Units are recognized
- Fungibility – Units are exchangeable
- Transportability – Simple to move
- Difficulty of Counterfeiting – Hard to be copied or stolen
How does it work? – Tomasz Korwin-Gajkowski
The second party was focused on the technical aspects of the blockchain technology. It was delivered by Tomasz Korwin-Gajkowski who, privately a huge cryptocurrencies/DLT enthusiast, is a Java developer.
We set off with building a block in bitcoin cryptography technology. What must be stated is the fact that, the hashes SHA-256 and RIPMD-160 were not invented by Satoshi Nakamoto, only widely used by him. Cryptography, a part of advanced mathematics, helps to make bitcoin safe and to obtain a consensus between the involved parties.
Then Tomasz did present what is a UTXO – Unspent Transaction Output – crucial to creating a block.
Nextly, we could learn what is a difference between a public and a private key and how they are created. Every bitcoin transaction must have them both included being passed by the system. Later on, Tomasz told us about the bitcoin mining and its goals:
- Bitcoin mining is needed to prevent double-spends
- New transactions are added to the block (current block size: 1MB)
- Blockchain acts as a distributed timestamp server
- Proof Of Work (POW) is used as a consensus algorithm to choose which block to append to the blockchain
- Bitcoin nodes accept the longest and “strongest” chain
- Miner gets a reward for “finding” a new block (new coins are created)
What are the practical use cases of blockchain? – Tomasz Kurowski and Jacek Sieradzki
The third chapter was provided by Tomasz Kurowski and Jacek Sieradzki, both folks work in investment banks (Brown Brothers Harriman and UBS) and are mainly responsible for technical projects. They are interested in blockchain technology, not only in the financial sector but also, and mainly, in a commercial and administrative use.
Tomasz initiated their piece with a story about a woman from Honduras who lost their property because she was not able to provide the proof that she was a legal owner. Later on, we emphasized that such a situation could have been prevented once all of the ownership acts could be stored on the blockchain.
Then, it was Jacek’s turn to speak about two small countries – Estonia and Georgia, which are known for their drive towards implementing blockchain technologies locally. We could learn a lot looking at how such miniature entities are able to be global leaders in successful projects.
First government Blockchain – a transparent, public and secure ledger — for managing land
❑Public Notary – is an “electronic version” of a notary with remote access from anywhere
globally. It was designed by developers of the e-Residency project, allowing foreign citizens to
establish a business within Estonian jurisdiction.
❑ The eHealth Foundation – The system will secure citizen health data storage and allow to
monitor patient conditions in real-time.
❑Blockchain-based Voting for Exchanges – Estonian subdivision of Nasdaq has successfully
completed testing of the e-voting system designed for voting among shareholders of a company.
Later on, there was a part about the commercial use of the blockchain applications, e.g., Slock (sharing economy), La Zooz (ride sharing), Steemit (blogging), Followmyvote (voting system), Mycelia for Music (music distribution). Additionally, the guys located other potential use cases of blockchain: Gambling Industry, Issuing Diplomas, and Legal Documents.
Is it legal? – Adam Kotucha
Even tough the answer to Adam’s part seem plain simple, it turned out to be more complicated that anyone from the audience had previously thought. Adam took us for a trip around the Polish and European legislation trying to provide as accurate information as he could find regarding the subject of the presentation. No doubt, he was clearly on a mission looking like a professor during his speech.
We started with discussing what is the difference between a criminalization and penalization, and whether bitcoin can be used as legal means of payment in Poland. Then, we moved to the more sophisticated aspects of acts of the law such: taxation, violations, protections against the frauds and potential penalties. Fortunately for us all, Adam told us a lot of future amendments to the both, the Polish and European law that may impact the bitcoin/blockchain technology.
He finished the lecture with a summary of the most important legal facts about the cryptocurrencies in Poland.
“According to the Polish law, using cryptocurrencies isn’t punishable and
criminalized. With some caution, we could assume that using cryptocurrencies as
a mean of payment could effectively redeem pecuniary obligation. Using
cryptocurrencies is taxed, the customer remains under the protection of the
customer law. Other administrative regulations apply to the service providers, not
to the customers. Currently, there’s a lack of cryptocurrencies’ definition in the
Polish legal system but it could change in a short time.”
As the final slide of the presentation, we wanted to admit that, as great as blockchain is, it is not suitable for every aspect of our lives. Some areas are just not meant to be to include that technology. Whether we accept it or not.
What for the future?
On behalf of everyone who was involved in creation the meetups, I would like to thank you for signing up to the community and paying us a visit. Our next meetup will probably take place at the end of April. Detail soon to follow – there will be a surprise:)
We do hope that we will be able to fulfill your expectations and give you the opportunity to learn more about the blockchain-related technologies.
We are looking forward to seeing you once again:)