LQG 11/10/22 – Hybrid / BlackRock – Blockchain & Intro to Bitcoin – Julien Riposo

Blockchain, the Essence of Bitcoin
and a Mathematical Introduction to Bitcoin

Seminar by Julien Riposo

11th October 2022 – In-Person and On-Line – Hybrid

The LQG is very grateful to BlackRock – for hosting this in-person and on-line hybrid LQG.

In July Andrew Ang Managing Director at BlackRock delivered a spirited explanation of how to think about the asset allocation of crypto currencies in the portfolio context. In this seminar Julien Riposo will show how the essence of the blockchain the fundamental technology of Bitcoin may be understood and valued in itself. Julien is not going to consider the value of bitcoin as a financial asset. There is more to blockchain technology than crypto currencies.

You may not be a crypto believer now or even after Julien’s seminar but you will certainly be much better informed about the machinery and some of the people that combine to make it all work.

In 2009, a new technology arose as a global currency independent of states. Many see bitcoin (and other cryptos) as pure digital assets, highly volatile potential additional constituents of a portfolio. Worse, some state that bitcoin must be treated as any financial instrument. However, how could one pretend to understand this asset while skipping a basic knowledge of its essence?

This presentation will to clarify the basics. We will focus on Bitcoin (capital `B’), i.e. the underlying mechanism which makes bitcoin (the cryptocurrency) live. The concept of the decentralized ledger arose with Bitcoin, and the first blockchain was born. More specifically, in this presentation and in a mathematical fashion, we will introduce

• the Bitcoin Network, full of miners, users, exchanges, who share any type of information, in particular transactions. We will understand the concept of Proof-of-Work, as well as the important tool which sums-up the information stacked into the blocks, the Merkle tree (https://novapublishers.com/shop/blockchain-technology-advances-in-research-and-applications/, Chapter 2).

• the notion of stability and robustness of Bitcoin, through a mathematical statement that an attacker is more and more unlikely to violate the history of Bitcoin. Linked to mining, the halving process will be decrypted, and the Digit Pattern will be shown, as well as its symmetry breaking.

• the important concept of diffusion of information on the Peer-to-Peer Network. We will go deep down to elaborate on the diffusion differential equation, and exhibit many numerical illustrations which reveal important features that appear in the network (https://doi.org/10.3390/jrfm15020047).

I aim to show this amazing technology’s potential, and I want to give inspiration on the complementarity potential Bitcoin possesses with respect to the standard financial system. Join me this evening, and gain understanding of the Bitcoin technology, without prejudice to its economic validity and value.

 

Julien Riposo

Researcher

Julien’s extensive research features in prominent academic publications such as Nature, Wilmott Journal, and Non-Linear Studies. In addition, he was awarded the Louise Arconati Visconti prize from the Chancellerie des universités de Paris (2011) as well as the Wilmott Award from the Wilmott Institute (2019) when completing his Certificate in Quantitative Finance.

Julien holds a Masters degree in Theoretical Physics from École Normale Supérieure (France), as well as a PhD in Applied Mathematics from Pierre and Marie Curie University (France).

Julien held senior analytical positions at the likes of Fintegral, NetOTC, ICE and ISDA, and he is now leading the research department of Bitstocks as its Chief Research Officer.

In addition, Julien has particularly been attracted by topics such as general mathematics, philosophy, and video games.