BITCOIN THE NEW CURRENCY Na biwi na bacha, na baap bada na - - PowerPoint PPT Presentation

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 Technologica l revolutjon Social Media revolutjon Monetary 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

meaning – something which has no 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

Portability

• Physical money can be moved anywhere
• With e-money, 3rd partjes are involved, so portability of the money is at their mercy

Global Citzen

• Natjonal currencies are limited to natjonal boundaries
• For internatjonal transactjons, hefuy transactjon fees needs to be paid (up to 15%)
• Approx 6 trillion dollars are exchanged daily and its stjll growing

Hyperinflat

• n
• Unlimited Supply and free to use
• Supply depends on the central authority controlled by monetary policies
• Supply is increased for various reasons – give economy a lifu or electjons or fund a war

Hyper Infmatjon

• Infmatjon arises when there is increase in supply
• f 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
• It has benefjts of both physical and digital money

* Digital currency using encryptjon techniques for regulated generatjon & verifjcatjon

• f

transactjons &

• peratjng

independently across all boundaries

Bitcoin

Characteristjcs & Benefjts of Bitcoin

Easily transferable anywhere in the world – Digital Cash Decentralized currency – no 3rd party involved Bitcoin Is legal Cryptocurrency Global currency- no country

• wns 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 8th

• 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 every 210,000 The Bitcoin block mining reward halves blocks

Bitcoin Mining

Why do we bother? – Future of Bitcoin

15 5 10 15 20 25

Trading Volume (In Mn USD)

23 2013 2014 Trading Volume (In Mn USD) 3.19 7.95 3 2 1 7 6 5 4 9 8

Bitcoin Wallets (Nos)

2013 2014 Bitcoin Wallets (Nos) 3 510 100 200 300 400 500 600

Bitcoin ATMs (Nos)

2014 2016 Bitcoin ATMs (Nos)

Why do we bother? – Future of Bitcoin

96 355 50 100 350 300 250 200 150 400

VC Investment (In Mn USD)

2013 2014 VC Investment (In Mn USD)

Companies Type Funded by Amount (Mn USD) Xapo Online Wallet Index Ventures & Greylock Partners 40 Bitpay Bitcoin payment service provider Index Ventures 30.5 Blockchain Online Wallet &

• ther bitcoin

related services Lightspeed Venture Partners and Wicklow Capital 30

Top 03 VC deals in 2014

• Ex CEO Citjbank Vikram Pandit and NYSE have also invested 75 Mn USD in

bitcoin startups in 2015

• Paypal founders, Ebay founders & Expedia have invested 116 Mn USD in

2015

• Blockstream raised 55 Mn USD in 2016 & Coindesk raised 75Mn USD in

2015 some of the largest funding in the history of virtual currency

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

Bitcoin is better than currency in that you don’t have to be physically in the same place It's a technical tour de force It’s a bold entrepreneurial technology

Infmuentjal people on Bitcoin

It is a huge deal, it's a huge, huge, huge deal I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable

Infmuentjal people on Bitcoin

Bitcoin actually has the balance and incentives right, and that is why it is starting to take off Every informed person needs to know about bitcoin because it might be one of the world’s most important developments [Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system

Challenges - Bitcoin

• Resistance from the 3rd 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

Litecoin Created by – Charles Lee Creatjon date – 2011 Peercoin Created by – Sunny King Creatjon date – 2012 Darkcoin Created by – Sunny King Creatjon date – 2013 Dogecoin Created by – Shibu Inus Creatjon date – 2013

Currencies Market Capitalizatjo n Price (USD) (As of 19th Aug, 2016) Bitcoin $4,754,296,898 $574.40 Litecoin $121,860,749 $3.53 Dogecoin $20,112,825 $0.25 Peercoin $14,882,010 $0.68 Darkcoin $11,066,538 $2.24 Primecoin $961,543 $0.12