Bitcoin for Professionals
Technology, Economics & Banking Integration
Instructor: David Stancel, MSc.
Format: 2 × 90 min Workshop
davidstancel.com
About me
  • Researching crypto since 2012
  • MSc in Digital Currencies @Univeristy of Nicosia, BA in Economics @Masaryk University
  • Advisor to multiple crypto startups and companies like Vacuumlabs & Aaro Capital
  • Co-Founder Blockchain Slovakia & Paralelna Polis
  • exCTO @ Fumbi
  • Lecturer @FIIT STU, EUBA FHI
  • Author of Coinstory.tech, a book on the Evolution of Cryptocurrencies
  • Advisor National Bank of Slovakia
  • Co founder of Cork Protocol (USA) & CEO & Amagi Labs (USA)
Seminar Goals
Understand Bitcoin as a monetary technology
Master its architecture, economics, and security model
Explore its intersection with banking and finance
Gain familiarity with current tools, data, and 2025 trends
Agenda
01
History, Architecture, Monetary Design
02
Bitcoin Network, UTXO, Mining, Energy
03
Lightning Network & Second Layers
04
Wallets, Custody, ETFs, and Regulation
05
Practical Exercises & Discussion
Why Banks Must Understand Bitcoin
Growing client demand for BTC custody and advisory
ETFs and institutional inflows are reshaping exposure
Clients expect financial sovereignty and transparency
MiCA & Basel III define a regulated entry path
HISTORY
Bitcoin as a Response to the Trust Crisis (2008)
1
Collapse of confidence in central institutions after the 2008 crisis
2
The Cypherpunk movement and the quest for digital privacy
3
Satoshi Nakamoto's vision: "Peer-to-Peer Electronic Cash System"
The Precursors of Bitcoin
1
DigiCash (David Chaum)
2
Hashcash (Adam Back, Proof-of-Work)
3
b-money (Wei Dai)
4
Bit Gold (Nick Szabo)
Engineering a New Form of Money
Core Components
  • Cryptography: Secures transactions and controls the creation of new units
  • Open-Source Software: Transparent, auditable, and community-driven development
  • Economic Incentives: Aligns participants to maintain network integrity
Key Characteristics
  • No Central Authority: Governed by pre-defined, deterministic rules
  • Fixed Supply: Capped at 21 million BTC, contrasting with discretionary fiat monetary policies
  • Predictable Issuance: New bitcoins created at decreasing and predictable rate
Bitcoin represents a shift from discretionary to algorithmic monetary policy.
Bitcoin Architecture
Blocks, transactions, cryptography (hash + signature)
Decentralised consensus via Proof-of-Work
Fixed supply: 21 million BTC, 10-minute blocks
No central authority or organisation
Consensus & Security
Miners validate blocks for rewards + fees
Every node independently verifies transactions
Mining secures the protocol economically
51% attack = financially irrational strategy
Predictable Supply Reduction Every Four Years
2009-2012: 50 BTC per block
Initial issuance rate after Bitcoin's launch
2012-2016: 25 BTC per block
First halving reduces new supply by 50%
2016-2020: 12.5 BTC per block
Second halving further reduces issuance
2020-2024: 6.25 BTC per block
Third halving continues the disinflationary schedule
2024-2028: 3.125 BTC per block
Fourth halving further reduces new supply entering market
Unlike central bank policy changes, halving events are known years in advance, allowing market preparation.
Key Network Data (October 2025)
1.19 ZH/s
Hashrate
(near ATH)
$112,000
Price
1.2M
Active addresses/day
10,000
Lightning capacity (BTC)
850,000
ETF holdings (BTC)
Mining & Energy Use
Energy Consumption
Energy consumption (CBECI): ~190 TWh/year
<1% of global energy usage
~55–60% renewable energy share
Transparent, flexible, and location-independent energy demand
Blockchain Consensus Process
1. Transaction Broadcast
A new transaction is created and broadcast to the network.
2. Block Assembly
Nodes in the network collect these new transactions, along with others, into a block.
3. Mining & Proposal
In each round, a randomly selected node (miner) solves a cryptographic puzzle to validate the block and proposes it to the network.
4. Block Propagation
The proposed block is then broadcast across the entire network for peer validation.
5. Verification & Confirmation
Other nodes verify the block's validity and accept it into their copy of the blockchain, expressing acceptance by including its hash in subsequent blocks.
UTXO Model vs. Account Model
Bitcoin tracks Unspent Transaction Outputs
No account balances — only spendable outputs
Every transaction creates new UTXOs
Benefits: auditability, privacy, simplicity
How Bitcoin Transactions Work
Inputs
References to previous UTXOs being spent
Outputs
New UTXOs created, specifying amounts and recipient addresses
Digital Signatures
Cryptographic proof of ownership and authorization
Transaction Fee
Difference between input and output amounts
Digital signatures (ECDSA) ensure only private key holder can spend bitcoins. Once confirmed in blockchain, transactions cannot be reversed (unlike traditional payment systems).
Understanding transaction finality and irreversibility is important for payment system oversight.
Different Approach to Transaction Recording
UTXO Model (Bitcoin)
  • Tracks individual "coins" (Unspent Transaction Outputs)
  • Each transaction consumes existing UTXOs and creates new ones
  • No account balances stored - only lists of spendable outputs
Account Model (Traditional Banking)
  • Maintains running balances for each account
  • Transactions modify account balances directly
Advantages of UTXO
Enhanced privacy, parallel validation, easier auditing
Disadvantages
More complex for users and developers to understand
Understanding helps evaluate different blockchain architectures for central bank applications.
Transaction Demo (Hands-On)
Identify inputs, outputs, fees, confirmations
Bitcoin Monetary Policy
Fixed supply: 21 million BTC
Halving every 4 years (latest: April 2024)
Inflation <1% annually → deflationary asset
Comparison: Gold ~2%, EUR ~6% (2024)
Game Theory & Incentives
Miners protect the network for profit
Consensus = economic equilibrium
Attacks are costly and self-defeating
Market incentives replace legal enforcement
Bitcoin as an Asset Class
  • "Digital gold" with fixed supply
  • Correlation with Nasdaq: ~0.3
  • Diversifier vs. fiat and bonds
  • Institutional adoption accelerating
  • Credibly Neutral Asset for International Trade
  • New Reserve Asset?
The ETF Revolution (2024–2025)
$93B
BlackRock IBIT AUM
850k
Total ETF holdings (BTC)
$5.9B
Weekly inflows record (Oct 2025)
Bitcoin enters mainstream financial infrastructure
Break (10 min)
☕️ Take a short coffee break — back in 10 minutes
Lightning Network Overview
Payment network built on top of Bitcoin
Instant and low-fee transactions
Enables microtransactions and B2B settlement
Architecture: channels, routing, liquidity hubs
Lightning Network Data (2025)
10,000
Capacity (BTC)
  • Real transaction volume increasing
  • Shift toward private channels and batching
  • Tools: amboss.space, mempool.space/LN, bitcoinvisuals.com
Lightning for Banks & Fintechs
Benefits
  • Real-time settlement without blockchain fees
  • Use cases: micropayments, treasury flows
Risks
  • Liquidity, routing complexity, AML compliance
Example
Internal LN hub for inter-branch transfers
Other Bitcoin Layer-2 Solutions
Liquid Network
Federated settlement for institutions
RSK, Stacks
EVM-compatible smart contracts on Bitcoin
Fedimint
Community custody via multisig federations
Experiments
DeFi on Bitcoin, Ordinals, Taproot Assets
Wallets & Custody Basics
Types of wallets:
Custodial
(exchange, broker)
Non-custodial
(Ledger, Trezor)
Multisig
(Casa, Caravan, Specter)
Institutional solutions: Fireblocks, BitGo, Copper
Custody Rules for Banks
Segregated accounts and auditable ledgers
HSM or MPC for signing
Travel Rule compliance (TRISA, Notabene)
Internal reporting and audit readiness
Practical Exercise: Custody Policy Design
Scenario: Design a custody policy for a €10M client:
Number of signers
Backup strategy
Insurance coverage
Notifications and limits
Bitcoin ETFs as Banking Products
Types & Structure
  • Spot vs. futures ETFs
  • Custody pipeline: BlackRock → Coinbase → cold storage
Bank use cases:
  • Discretionary mandates
  • Lombard loans
  • Structured yield products
ETF Dominance: Risks & Tradeoffs
Centralised custody concentration
Reduced on-chain activity
Potential governance and transparency risk
Debate: "Bitcoin as gold vs. Bitcoin as collateral"
Regulation 2025: MiCA & Basel III
MiCA effective Dec 30, 2024
  • Stablecoins under ART/EMT regime
  • CASP licensing for service providers
Basel III:
1250% risk weight for unhedged crypto exposure
Regulatory clarity = entry point for conservative institutions
Practical Scenario A
Client wants BTC exposure: ETF or self-custody?
Compare: security, liquidity, fees
Design fee and reporting structure
Key Takeaways
Bitcoin = infrastructure for digital trust
Banks should build internal BTC expertise
ETFs, custody, LN = new product categories
Biggest risk = lack of understanding
DeFi
Tokenized BTC
Stablecoins
ETH Has dollarized
WEB 3
Recommended Resources
📘 Bitcoin Whitepaper — Satoshi Nakamoto
📗 BIS "Crypto Asset Exposure Framework"
📊 CoinShares & Glassnode data
🧠 Nakamoto Institute essays
📰 Bitcoin Magazine Pro reports
Coinstory.tech
My book on Evolution of Crypto
Final Discussion
Recap: technology, economics, regulation
Open questions:
  • How can private banks integrate BTC responsibly?
  • What role will Bitcoin play in global finance?
Q&A session
Thank You
Workshop: Bitcoin for Professionals
Instructor: David Stancel, MSc.
🌍 www.davidstancel.com
🌍 www.amagilabs.io