BITCOIN – THE NEW CURRENCY
“Na biwi na bacha, na baap bada na maiya, The whole thing is that ki bhaiya sabse bada rupaiya”
Revolutjonary changes in society Freedom Revolutjon Industrial revolutjon Monetary Revolutjon Technologica Social Media l revolutjon revolutjon
Why do we need money?
Evolutjon of Money • Portability • Durability • Scare • Divisibility
Backed by the Gold Standards • Before 1918, which is less than 100 years back, there were more than 5,000 difgerent bank notes in circulatjon in US alone • Each US dollar bill was issues by a difgerent bank • The dollar bill can be exchanged against the precious metal like gold or silver • This kind of money is called as “backed by the gold standards”
Evolutjon of Money FIAT Money • Portability • Durability • Scare • Divisibility
FIAT Money • FIAT – something which has no meaning intrinsic value • Contrary to our belief, the money we currently use is the FIAT money and not backed by the “gold standards” • Features of FIAT Money • It is a centralized currency • It is less than 100 years old • The value to the currency is assigned by the central authority and we believe it
Scope of Improvement • Physical money can be moved anywhere • With e-money, 3 rd partjes are involved, so portability of the money is at their mercy Portability • Natjonal currencies are limited to natjonal boundaries • For internatjonal transactjons, hefuy transactjon fees needs to be paid (up to 15%) Global • Approx 6 trillion dollars are exchanged daily and its stjll growing Citzen • Unlimited Supply and free to use • Supply depends on the central authority controlled by monetary policies Hyperinflat • Supply is increased for various reasons – give economy a lifu or electjons or fund a war on
Hyper Infmatjon • Infmatjon arises when there is increase in supply of money and hence increase in demand • With infmatjon, the value of our money reduces • Increase in supply in a very short period of tjme causes hyperinfmatjon • In less than 100 years, more than 55 cases have been recorded of hyperinfmatjon • Examples: • 1946 – Hungary, the daily infmatjon rate rose to almost 200% • 2008 - Zimbabwe Dollar was loosing half its value every 25 hours • 2014 – Russian Rubble lost almost 40% of its
Bitcoin • Came into existence in Jan 2009 • An anonymous person named Satoshi Nakamoto invented it • Australian Entrepreneur Craig Wright recently claimed that it was his inventjon • It is peer-to-peer pseudonymous digital currency • "Peer-to-peer" (P2P) – No central authority creatjng new money or clearing transactjons • "Pseudonymous" - The real world identjty of the partjes of a transactjon can be kept hidden from the public identjfjed by address only • It is precious as supply will be only to 21 mn units * Digital currency using encryptjon techniques for regulated generatjon & verifjcatjon of transactjons & operatjng • It has benefjts of both physical and digital money independently across all boundaries
Bitcoin
Characteristjcs & Benefjts of Bitcoin Easily transferable anywhere Decentralized currency – no Bitcoin Is legal in the world – Digital Cash 3 rd party involved Global currency- no country Cryptocurrency owns it and no country can shut it down
Characteristjcs & Benefjts of Bitcoin Privacy is maintained. You have the right to spend your money anywhere without disclosing the identjty Precious and rare – only 21 Mn units can be generated, 14 Mn generated so far Limited Supply – resistant to hyper infmatjon Bitcoin is a number – so it is infjnitely divisible. At present, divisible to 8 th unit. 1 BTC = 100,000,000 Satoshi No transactjon costs are involved currently for procurement/trade It is easily portable with the use of bitcoin wallet There are no issues with durability with the currency The Bitcoin block mining reward halves every 210,000 blocks
Bitcoin Mining
Why do we bother? – Future of Bitcoin Trading Volume Bitcoin Wallets Bitcoin ATMs (In Mn USD) (Nos) (Nos) 25 9 600 23 7.95 510 8 500 20 7 6 400 15 15 5 300 4 3.19 10 3 200 2 5 100 1 3 0 0 0 2013 2014 2013 2014 2014 2016 Trading Volume (In Mn Bitcoin Wallets (Nos) Bitcoin ATMs (Nos) USD)
Why do we bother? – Future of Bitcoin Top 03 VC deals in 2014 VC Investment Amount (In Mn USD) Companies Type Funded by (Mn USD) 400 Index Ventures & 355 Xapo Online Wallet 40 350 Greylock Partners Bitcoin payment 300 Bitpay Index Ventures 30.5 service provider 250 Lightspeed 200 Online Wallet & Venture Partners other bitcoin Blockchain 30 and Wicklow 150 related services Capital 96 100 • Ex CEO Citjbank Vikram Pandit and NYSE have also invested 75 Mn USD in bitcoin startups in 2015 50 • Paypal founders, Ebay founders & Expedia have invested 116 Mn USD in 0 2015 2013 • Blockstream raised 55 Mn USD in 2016 & Coindesk raised 75Mn USD in 2014 2015 some of the largest funding in the history of virtual currency VC Investment (In Mn USD)
Why do we bother? – Future of Bitcoin Top 5 Countries where bitcoin is used - 2014 Companies which started acceptng bitcoins - 2014
Infmuentjal people on Bitcoin It's a technical tour de force It’s a bold entrepreneurial Bitcoin is better than currency in that you don’t technology have to be physically in the same place
Infmuentjal people on Bitcoin Bitcoin is a remarkable I do think Bitcoin is the first It is a huge deal, it's a huge, cryptographic achievement and [encrypted money] that has the huge, huge deal the ability to create something potential to do something like that is not duplicable change the world
Infmuentjal people on Bitcoin [Virtual Currencies] may hold Every informed person needs Bitcoin actually has the long-term promise, particularly to know about bitcoin because balance and incentives if the innovations promote a it might be one of the world’s right, and that is why it is faster, more secure and more most important developments starting to take off efficient payment system
Challenges - Bitcoin • Resistance from the 3 rd partjes • Value of bitcoin is very fmuctuatjng • The basic of bitcoin is technology, but it is stjll a challenge for developing economies • Security • Bitcoin transactjon fees • Processing tjme of transactjons • Low adoptjon rate
Other Virtual/Cryptocurrencies Market Price (USD) Currencies Capitalizatjo (As of 19 th Aug, 2016) n Bitcoin $4,754,296,898 $574.40 Litecoin $121,860,749 $3.53 Litecoin Darkcoin Created by – Charles Lee Created by – Sunny King Creatjon date – 2011 Creatjon date – 2013 Dogecoin $20,112,825 $0.25 Peercoin $14,882,010 $0.68 Darkcoin $11,066,538 $2.24 Dogecoin Peercoin Primecoin $961,543 $0.12 Created by – Shibu Inus Created by – Sunny King Creatjon date – 2013 Creatjon date – 2012
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