Descriptif

BLOCKCHAIN I :
BITCOIN AND SMART-CONTRACTS
Instructor: Julien Prat (CNRS, CREST and Ecole Polytechnique)
Course prerequisites
The course is designed for students in Economics, Business and Computer Science. Besides
their training in quantitative methods, no specific knowledge about Blockchains is required.
Basic programming skills in Python will also be useful.
Course content
The financial industry was until recently a very concentrated sector. This is becoming less and
less true as a wave of innovations greatly lowers the barriers to entry and intensifies the degree
of competition among providers of financial services. Disruptive technologies are being
implemented at an increasing pace, leading to major changes in the realms of payments, lending
and borrowing, insurance, wealth management, venture capital.
To understand this revolution, one needs to have a good grasp of technological innovations as
well as of the economics of the financial sector. This course will introduce students to both
dimensions, allowing them to identify how financial services can be improved with new
approaches.
The course will put a strong emphasis on the blockchain protocol because of its disruptive
potential, hopefully preparing the audience for the next wave of innovations. We will adopt a
hands-on approach with the objective of enabling students to monitor transactions over
Bitcoin’s blockchain.
On completion of this course, students should understand:
 The ongoing trends in the Fintech industry and their technological underpinnings;
 How cryptographic functions make it possible to secure transactions over a public network;
 Why the blockchain technology can replace third-party certification;
 What are the main differences between the most prominent blockchain infrastructures;
 How the market for cryptocurrencies operates, and critically assess its functions and
vulnerabilities;
 What are “smart contracts”.
Course structure
1. Introduction to Banking, Fintech and Payment Systems.
2. Basics of Cryptography: Public/private keys, Hash functions…3. Blockchains: Tamper-evident database, Industrial application of Blockchains (supply
chains, payment networks, smart grids, online banking…)
4. Decentralization of the Blockchain under “Nakamoto” consensus: Byzantine general’s
problem, transactions, mining, Proof-of-work.
5. Using Bitcoin core: How to operate a node in Bitcoin’s network
6. The structure of transactions in Bitcoin: UTXOs and Bitcoin Script.
7. Theory of Money and Cryptocurrencies: Credit economy vs. Cash economy, Fundamental
analysis of Bitcoin and alternative coins.
8. Smart Contracts: Algorithmic Decision making, Programing self-executing contracts in
Bitcoin script, Atomic Swaps.
9. Advanced topics:
a. Initial Coin Offerings;
b. Alternative protocols: Proof-of-stake;
Literature
The subject being quite new, the literature is still in its embryonic stage. The slides of the course
will be self‑contained as all the required material will be covered during the lectures. Additional
material can be found in the following books:
 Bitcoin and Cryptocurrency Technologies, by Arvind Narayanan, Joseph Bonneau,
Edward Felten, Andrew Miller, Steven Goldfeder.
 Mastering Bitcoin: Programming the Open Blockchain, by Andreas Antonopoulos