Digital Currencies
& Blockchain
From cryptography and the cypherpunks to Bitcoin, mining, consensus, NFTs, DeFi and stablecoins — built up from first principles, with demos you can play with.
Who's teaching this
Researching crypto since 2012. MSc in Digital Currencies. I build, advise, write and teach across the space.
- ◇ Founder — Blockchain Slovakia · Co-founder — Paralelná Polis
- ◇ ex-CTO @ Fumbi · Advisor @ Vacuumlabs & NBS
- ◇ Lecturer @ STU FIIT · Author of Coinstory
- ◇ Founder — Cork.tech, Amagi Labs, Polystate.io
david@amagilabs.io · davidstancel.com
You're closer to this than you think
Blockchain isn't a separate magic world — it's built from the exact things you're already learning: code, databases, networks and security.
Goal for today: not to make you a blockchain engineer. By the end you'll understand crypto, use a wallet safely, spot a scam, and know how the apps are built — solid professional literacy you can build on.
The AI you already use is about to need crypto
You use ChatGPT and Copilot to get answers. The next step is AI that does things for you — books the trip, buys the tool, pays the invoice. And to pay, an AI agent can't pull out a credit card. It needs money built for software.
So the crypto we cover today isn't just "internet money for traders." It's quietly becoming the payment layer for the AI economy — the world many of you are moving into.
How one AI agent pays another
The "money" here is a stablecoin — a crypto coin pinned to $1, so the price doesn't swing. That's what makes it usable for actual payments. We'll cover stablecoins properly at the end — keep this picture in mind.
x402
An open payment standard — backed by Coinbase, Stripe, Visa, Mastercard & Circle — that lets a service charge an AI agent a tiny fee per request. It reuses "Payment Required," an error code built into the web decades ago.
Stablecoins (USDC)
$1-pegged crypto. The currency agents actually settle in — fast, global, programmable.
Agent wallets
Coinbase, Stripe & Visa now give an AI agent its own spending account, with limits a human sets.
History & evolution of digital money
Money is a shared agreement about who owns what. Bitcoin didn't fall from the sky — it's the last piece of a 40-year cryptography puzzle.
It all starts with cryptography
Three ideas from the 1970s make digital money even thinkable: Diffie & Hellman (1976, public-key exchange), Merkle (hash trees), and the math that lets you prove who you are without revealing your secret.
- ◇ Hash functions — turn any data into a unique fixed-length fingerprint
- ◇ Digital signatures — prove a message is really from you
- ◇ Public / private keys — share one, keep one secret
Symmetric encryption
One shared secret key locks and unlocks the message. Fast — but how do two strangers agree on the key without meeting?
same key
same key
The "key distribution problem" is exactly what the next idea solves.
Asymmetric (public-key) encryption
Two keys that are mathematically paired. Anyone can lock with your public key; only your private key opens it. No shared secret needed — the breakthrough that makes crypto possible.
public key
private key
David Chaum & DigiCash (1990)
The first real digital cash — with genuine cryptographic privacy ("blind signatures"). Brilliant tech, but one fatal flaw: a company ran it. When DigiCash went bankrupt in 1998, the money died with it.
Great cryptography isn't enough. If one company can be shut down, so can the money. We needed to remove the company.
The Crypto Wars
In the 1990s the US classified strong encryption as a munition — illegal to export. Activists printed the RSA algorithm on a t-shirt to make the point: is a few lines of math really a weapon?
The right to encrypt — to have private communication and money — had to be fought for. Crypto was political from day one.
The Cypherpunks
A 1990s mailing list of cryptographers and activists with a creed: "Cypherpunks write code." Don't lobby for privacy — build tools that make it real. Satoshi posted the Bitcoin whitepaper to their descendants.
- ◇ Eric Hughes — "A Cypherpunk's Manifesto"
- ◇ Tim May — "The Crypto Anarchist Manifesto"
- ◇ Hal Finney, Wei Dai, Nick Szabo, Adam Back — the direct ancestors of Bitcoin
A 40-year march to decentralization
Bitcoin
The first system to remove the company — and still keep everyone honest.
What is Bitcoin, anyway?
Digital gold you can email. A money no government, bank or company controls — its rules enforced by math and a global network of computers.
No CEO. No printing press. A fixed supply of 21 million coins and an open ledger anyone can verify. The first time in history we've had digital scarcity without a gatekeeper.
Bitcoin's changing narratives
The "story" of Bitcoin evolved as it grew — and all of them are still alive at once.
Bitcoin by the numbers
The Halving — programmed scarcity
Every ~4 years the faucet of new bitcoins is turned half-off. Fewer new coins, forever — until the tap runs dry at 21 million.
Bitcoin's addressable market
If Bitcoin is "digital gold," the comparison is to the world's stores of value. The pools it could tap into are enormous.
Illustrative orders of magnitude · gold ~$30T, broad money ~$120T, Bitcoin ~$1.5T"Doesn't Bitcoin waste energy?"
The energy isn't wasted — it's what buys the security. Like a vault's steel walls, the cost is the point. The real question is: is it worth it, and where does the power come from?
- ◇ Bitcoin's footprint is comparable to other large industries (gold mining, data centres) — and a growing share is stranded / renewable energy.
- ◇ Ethereum cut its energy use ~99.9% in 2022 by switching from proof-of-work to proof-of-stake ("The Merge").
The two giants: Bitcoin vs Ethereum
The #1 beginner question. Easiest mental model: Bitcoin = digital gold (money you store). Ethereum = a world computer (a platform you build apps on).
Almost everything else (Solana, Cardano…) is a variation on one of these two ideas: better money, or a better/faster world computer.
Blockchain
The machine underneath. How a crowd of strangers keeps one honest ledger.
So… why blockchain at all?
Nobody woke up wanting a blockchain. It's what you're forced to build to grant one wish: open, unstoppable money.
The Byzantine Generals problem
How do strangers who don't trust each other — where some are outright liars — still agree on one single version of the truth?
Generals surround a city; they win only if they all attack together. Messengers can be intercepted; some generals are traitors. Reliable agreement over an untrusted network is the whole game.
The evolution of the ledger
The leap isn't "copies everywhere" — it's agreeing on which copy is true without a referee.
What is a blockchain?
A shared notebook everyone has a copy of. You can only add pages, never erase one — and the whole network checks every new page before accepting it.
"A tamper-proof, shared digital append-only ledger that records transactions grouped into blocks in a decentralized peer-to-peer network."
The magic ingredient: hashing
A hash is a one-way fingerprint. Change a single character and the entire fingerprint changes unpredictably — which is what makes tampering obvious.
How a block is agreed — 5 steps
- 1A new transaction is broadcast to the whole network
- 2Each node collects pending transactions
- 3A node wins the right (via proof-of-work) to canonize "the truth" in a block
- 4Other nodes accept or reject it based on validity
- 5Acceptance = including that block's hash in the next block
Next slide: do step 3 yourself.
Mine a block: proof-of-work
Type a transaction, hit Mine. Your browser hashes the block over and over — changing a number (the nonce) — until the hash starts with enough zeros. That hunt is proof-of-work. Real SHA-256, running locally.
Immutability by chaining
Each block carries the previous block's fingerprint. Tamper with an old block and every fingerprint after it breaks — instantly, visibly, for everyone.
Click to edit an old block — watch the whole chain after it turn invalid.
Bitcoin vs the card networks
Not just "faster vs slower" — a fundamentally different shape. Bitcoin pushes value directly. Cards pull it through a chain of middlemen.
Bitcoin — value is pushed
sumer → Mer-
chant
One direct step. The consumer sends; the merchant receives. Done.
Cards — value is pulled
sumer→ Issuer→ Switch→ Acqui-
rer→ Mer-
chant
The consumer thinks they're paying — really they authorize others to pull funds, each taking a cut.
What if two people add a page at once?
The notebook briefly forks. The rule that fixes it: keep the longest chain. The version most of the network built on wins; the orphaned page is dropped.
This is why a payment grows "more final" with each block on top — reversing it gets exponentially harder.
The scalability trilemma
Pick any two. A blockchain struggles to be scalable, secure and decentralized all at once — improving one usually costs another.
Public vs consortium vs private
The more open and trustless, the slower and more expensive. Enterprises often trade decentralization for speed.
From Web2 apps to Web3 dApps
Web1 = read. Web2 = read + write (but platforms own your data). Web3 = read + write + own — you control your identity, data and assets.
Using crypto — safely
You know how it works. Now the part that actually protects you: wallets, keys, and how not to get robbed.
Who holds your crypto?
Two ways to hold crypto: let a company keep it for you (like money in a bank), or hold it yourself (like cash in your pocket). The difference is who has the key.
What a wallet actually is
A "wallet" doesn't hold coins — it holds keys. A public address you share to receive money, and a private key you guard to spend it. Click create — watch one appear.
How do you actually buy crypto?
Euros in your bank → an exchange (think "crypto broker") → buy → and the big choice: leave it there, or move it to your own wallet.
The 12 words that ARE your money
Your whole wallet backs up to ~12 random words — the seed phrase. Anyone with these words owns everything inside. Lose them and it's gone forever. There's no "forgot password."
Everything is public
Every transaction is on a public ledger anyone can read with a block explorer (like Etherscan). No login. Click a transaction to inspect it — this is a superpower for checking that something really happened.
Spot the scam
Crypto has no "undo" and no fraud department. Recognising scams is the security skill. Read each one — real or scam?
Crypto hygiene — the 6 rules
Screenshot this slide. It's most of what keeps people safe.
Smart contracts
How a blockchain goes from "just money" to "apps." This is where crypto meets the software engineering you're learning.
What is a smart contract?
A vending machine, as code. Put the right input in, the rule runs automatically and gives the output — no cashier, no trust, no "let me check with my manager." It can't be stopped or changed once deployed.
waiting for input…
A real (tiny) smart contract
This is real Solidity — a "tip jar" anyone can send money to, and only the owner can empty. Tap each line to see what it does. It's just code with rules.
How a dApp is built
A "decentralized app" is mostly a normal web app. Same front-end you'll learn — only the database is swapped for a blockchain. Tap each layer.
Immutable cuts both ways
A smart contract can't be stopped — which is the whole point, and also the danger. If there's a bug, it's public, permanent, and attackers can drain it before anyone fixes it.
This is exactly why security & auditing is one of the best-paid careers in crypto — and why the IT fundamentals you're learning matter here.
Want to actually try it?
Everything here you can do for free, with no real money, on practice networks ("testnets"):
- ◇ Remix — write & run a smart contract in your browser, zero setup.
- ◇ MetaMask — a real wallet; switch it to a testnet to practice safely.
- ◇ Sepolia testnet + faucet — free practice coins, real explorer.
Rule of thumb: learn on a testnet until you're bored. Then, and only then, touch real funds.
Beyond money
Smart contracts let a blockchain record anything of value — not just coins. NFTs and DeFi are smart contracts in action.
Non-fungible tokens (NFTs)
A blockchain receipt proving you own one specific digital thing — and that it's the original, not a copy.
Virtual worlds & the metaverse
Gamers already spend billions on skins and items they don't truly own (Fortnite). If digital ownership is real, virtual land, items and identities become real, portable assets the platform can't quietly confiscate.
- ◇ The Metaverse Primer — Matthew Ball (essays & book)
- ◇ Matthew Ball — essays (streaming, gaming, the metaverse)
- ◇ Virtual Economy — L'Atelier (BNP Paribas)
A unified token taxonomy
"Token" is a huge umbrella. Most fall into three families — tap each to expand.
Convergence: DeFi
Traditional finance, rebuilt as open software anyone can use, audit, or build on.
The evolution of finance
Each step removes a layer of trust you have to place in an institution.
Traditional vs decentralized finance
| Traditional finance | DeFi | |
|---|---|---|
| Custody | Institution / custody provider | You — non-custodial wallet / smart contract |
| Unit of account | Fiat currency | Digital asset or stablecoin |
| Execution | Via intermediaries | Via smart contract |
| Settlement | ~3–5 days, business hours | Seconds–minutes, 24/7 |
| Clearing | Clearinghouses | Blockchain transaction |
| Governance | Exchanges & regulators | Protocol developers & users |
| Auditability | Authorized third-party audits | Open source + public ledger — anyone |
| Collateral | Often none; intermediaries take risk | Usually over-collateralized |
| Risks | Hacks & data breaches | Smart-contract bugs & exploits |
The DeFi stack
DeFi is composable — each layer builds on the one below, like money Lego.
Apps you can actually use
Uniswap
Trade any token for any other — no broker. Prices set by a math formula, not an order book.
lend / borrowAave
Deposit crypto to earn interest, or borrow against it. A money market run entirely by code.
predictPolymarket
Bet on real-world outcomes. Prices become a crowd-sourced probability of what happens next.
Links open the live apps — explore, but don't connect a wallet unless you know what you're doing.
Stablecoins
The bridge between crypto and the dollar — and crypto's quiet killer app.
What is a stablecoin?
Crypto dollars: the speed and openness of a blockchain, but a price that stays put at $1.
A classification framework
Don't memorize names — ask four questions about any stablecoin:
A $320B+ market
Stablecoins are the workhorse of crypto — most trades and transfers move through them. Two issuers dominate.
Want the whole story?
I wrote Coinstory — the full arc of cryptocurrency, from 1970s cryptography and the cypherpunks to Bitcoin, Ethereum, NFTs and DeFi. Everything in this course, with the history and the people.
Thank you
Questions, ideas, collaborations — always welcome.
David Stancel · Digital Currencies & Blockchain