itcoins

Topics to be discussed

• What is bitcoin• How it works• How is it valued• Pros and Cons

Value of Bitcoin

1 BTC= 1165 USD

What is Bitcoin?

Bitcoin is a digital currency and form of decentralized electronic money which was developed by Satoshi Nakamoto in 2008.

The developer released a software that could be used to digitally send, receive, and store bitcoins.

The project is now maintained by a community of developers and is available as an open-source software.

Bitcoins can be sent and received through the internet, similar to sending cash digitally.

The currency is exchanged through the decentralised Bitcoin network, without going through an external bank/financial institution, or government.

Bitcoins are saved in digital wallets ad transactions are verified by decentralized network of computer users from across the globe.

What is Bitcoin?

Popularity among different countries

How it works?

• Every “account” consists of the public key ( = bitcoin address) and the private key.

• Anyone who knows your public key, can send you bitcoins.

• To spend bitcoins, you have to know the private key.

• The transaction is broadcasted to the bitcoin network.

• The miners confirm the transactions.

”14nRKoXJAUpKYYbzw6Yrqh9gW2p26zerpW”

How is it valued?

A number of electronic marketplaces called “Bitcoin exchanges” allow for the purchase or sale of bitcoins using different currencies.

Jan 2014: There were about 14 million Bitcoins in circulation

Acceptance!!!

You can use Bitcoins to buy music, books, food, etc.

Many retailers like Overstock, OkCupid have started accepting BitCoins as a payment.Many others like Amazon etc. may soon join.

Acceptance!!!

A subway shop in Russia has started accepting Bitcoins

Pros

• No unpredictable inflation by ”printing more money” by political decision.

• Transactions travel instantly• Send money in seconds to anyone with

internet access – with zero transaction costs.• Highly anonymous, in certain conditions• Every transaction is public, though!• If you memorize your private key, the only way

to steal your bitcoins (even for the authorities) is to torture you (or spy or hack your computer).

• Easy to use• You can choose the tool (usability / security)

Cons

Bitcoin is rather new and its still in marginal use -> high volatility. BTC money supply: 500,000,000 € EUR money supply: 5,000,000,000,000 €

It’s currency for the internet – take down the internet, and you cannot use bitcoins. Perhaps not suitable for any country’s offi cial

currency. Lose your private key -> lose your bitcoins.

No means to cancel the transaction!

Reactions and critics

The Chinese government restricted Chinese banks from making transactions using bitcoins

The Bank of France also warned users regarding the usage of bitcoins

The Reserve Bank of India has cautioned the users, holders and traders of Bitcoins, about the potential financial, legal, customer protection and security related risks that they are exposing themselves to

Reactions and critics

The Chinese government restricted Chinese banks from making transactions using bitcoins

The Bank of France also warned users regarding the usage of bitcoins

The Reserve Bank of India has cautioned the users, holders and traders of Bitcoins, about the potential financial, legal, customer protection and security related risks that they are exposing themselves to