The last Bitcoin block will be released near the year 2040 WITH ALL THE BUZZ, FEW KNOW MUCH ABOUT BITCOIN OR THE POTENTIALLY MASSIVE IMPACTS THIS CRYPTO-CURRENCY HOLDS Bitcoin = The System “You know, Bitcoin is nothing like traditional currency.” bitcoin = The currency “I bought a new car with 20 bitcoins.” Download a Bitcoin Wallet On your PC or Mobile Device Generates addresses to exchange BTC (like an email address) Each wallet has a private key (acts like a signature) It’s a decentralized, global, peer-to-peer, digital, online, currency. Lingo = No single entity / everybody owns or controls Bitcoin = Anyone can use it, anywhere = Direct transfers, no 3rd parties necessary = No physical “coinage” = Only requirement for use is an internet connection 1 BTC 0.01 BTC 0.001 BTC 0.000 001 BTC $ 600 $ 6.00 $ 0.60 $ 0.0006 = 1 bitcoin = 1 centibitcoin = 1 millibitcoin = 1 microbitcoin bitcoin bitcent mbit, millibit, or bitmill ubit, microbit BTC cBTC mBTC μBTC EXAMPLE DECENTRALIZED GLOBAL PEER TO PEER DIGITAL ONLINE Using Bitcoin Get bitcoins Keep an eye on the value 1PHVXxuz FtXCVp2yit9M5 caFxFjCUL4jux A UNIQUE IDENTIFIER OF 27-34 alphanumeric characters, beginning with the number 1 or 3. “This-is-my super-secret-pass word-for-bitcoin” FOR YOU ONLY!!!! Never share this, or lose it, because if you do your bitcoin will be lost. CC BY 2.0 @ Konrad Förstner • Online purchases from vendors who accept bitcoin • Face to Face purchases via Mobile and QR codes Scan Vendor’s Wallet QR code, enter agreed amount, done • ATMs Scan a user's palm print, face, and government-issued ID to verify identity • Miners volunteer necessary computer power for security and transaction verification (run by the app) • Rewards for Miners 1. Small voluntary “thank you” transaction fees paid in bitcoin 2. Blocks of bitcoins are “Mined” or released from the 21,000,000 total bitcoins approximately every 10 minutes CC BY 2.0 @ Jesus Solana Sell bitcoin and withdraw local cash Get bitcoin by depositing local currency Accept bitcoin as payment for goods or services Mine bitcoins Anyone with a connected computer can be a Miner free “Bitcoin Miner” app or The Bitcoin Wallet allows you to use Bitcoin On your PC or Mobile Device Exchanges buy bitcoins with traditional currency Online exchanges Bitcoin ATMS $ € $ £ More computer power donated = more chances to get the released Bitcoin block (like a raffle) A block currently yields 25 BTC but the block yield halves over time. Today there are over 12,450,000+ bitcoins in circulation. THAT’S 59 % OF TOTAL BITCOINS LIKE MOST CURRENCIES, BITCOIN’S VALUE IS BACKED ONLY BY SUPPLY AND DEMAND, NOTHING PHYSICAL. Bitcoin is very new and extremely volatile 1,400 1,200 1,000 800 600 400 200 0 06.14 05.14 04.14 03.14 02.14 01.14 12.13 11.13 10.13 09.13 08.13 07.13 06.13 Over the past year 1 bitcoin value ranged from between & $ 68 $ 1,151 A common misconception: the US dollar is backed by gold – however, it hasn’t been backed by anything since 1971. Value is a combination of • Strength of economy • Risk of economy changing • Number of notes in circulation Bitcoin has no official value • Buyers and sellers must agree on price • Usually based around value of recent trades elsewhere Why people do like it Why people don’t like it No country controls Bitcoin • A global online currency can be set up, accessed, and used anywhere with no prerequisites Especially good for emerging markets where banks, ATMs, and credit card machines are rare • Accounts cannot be frozen for any reason No country or company can own or regulate P2P bitcoin use • More bitcoins cannot be printed, controlling inflation • Value is not tied to a country's political security or trustworthines No banks or companies • Less fees Credit Card companies charge sellers 2-3% Financial Services like Western Union charge approx. $7 for every $100 sent to Mexico from the US Bank fees are outrageous checking accounts, ATMs, minimum balance, overdraft, traveling to another country etc. Most Bitcoin transactions are processed without fee Voluntary fees automatically put higher priority for miners to process. (Faster transaction verification) • Nearly instant Direct P2P takes minutes to set up Takes computers minutes to verify • Easy to carry $1 billion worth of Bitcoin fits in your pocket encrypted onto a memory stick Moving $1 billion of gold, bills, or wampum is not easy • Accounts are anonymous (when used correctly) Added security from hackers and thieves Equal playing field, no special treatment for rich or punishment for poor Massive security risks Criminal currency • Without countries, banks, or companies Bitcoin security is the responsibility of the individual • No 3rd parties No insurance to replace your money No police to find your culprit • If a thief dupes you or a hacker accesses your bitcoin wallet payment cannot be stopped or refunded without recipient’s consent mtgox.com bitcoin.org/en bitcoinatm.com historyofbitcoin.org coindesk.com/information/why-use-bitcoin cs.stanford.edu/people/eroberts/courses/cs181/projects/2010-11/DigitalCurrencies/advantages/index.html FUTURE PROJECTIONS FOR BITCOIN Is Bitcoin the future of currency? “Bitcoin today is at the level where the Internet was in 1994 or 1995, with 20 years of application in its future” Antonis Polemitis, Bitcoin venture capitalist Presented by Bitcoin’s anonymity has attracted criminals seeking quick untraceable riches Silk Road: an online blackmarket used Bitcoin to generate $1.3 billion in anonymous trafficking of drugs and firearms plus employing hackers and assassins. Usability Anonymous • Not accepted Bitcoin is not accepted many places, especially in physical shops. • No measure of trustworthiness or accountability • Credit Cards are faster, free for consumers, and more available in developed countries Unusable Losses due to lack of regulation $ 367 million USD worth of bitcoin Mt Gox Exchange lost $ 600,000 USD worth of bitcoin Flexcoin Exchange lost $ 50,000 USD worth of bitcoin Poloniex Exchange lost Bitcoin Exchanges aren’t banks “Uppercase B” “Lowercase B” In the future, virtual currency exchanges like Bitcoin will benefit from implementing Know Your Customer (KYC) policies modeled after reputable exchanges Why? Because it bolsters a safe and trust-driven environment.
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The last Bitcoin block will be released near the year 2040
WITH ALL THE BUZZ, FEW KNOW MUCH ABOUT BITCOIN OR THE POTENTIALLY MASSIVE IMPACTS THIS CRYPTO-CURRENCY HOLDS
Bitcoin = The System“You know, Bitcoin is nothing like traditional currency.”
bitcoin = The currency“I bought a new car with 20 bitcoins.”
Download a Bitcoin WalletOn your PC or Mobile Device
Generates addressesto exchange BTC
(like an email address)
Each wallet has a private key(acts like a signature)
It’s a decentralized, global, peer-to-peer,
digital, online, currency.
Lingo
= No single entity / everybody owns or controls Bitcoin
= Anyone can use it, anywhere
= Direct transfers, no 3rd parties necessary
= No physical “coinage”
= Only requirement for use is an internet connection
1 BTC
0.01 BTC
0.001 BTC
0.000 001 BTC
$600$6.00$0.60
$0.0006
= 1 bitcoin
= 1 centibitcoin
= 1 millibitcoin
= 1 microbitcoin
bitcoin
bitcent
mbit, millibit, or bitmill
ubit, microbit
BTC
cBTC
mBTC
μBTC
EXAMPLE
DECENTRALIZED
GLOBAL
PEER TO PEER
DIGITAL
ONLINE
Using Bitcoin
Get bitcoins
Keep an eye on the value
1PHVXxuzFtXCVp2yit9M5caFxFjCUL4jux
A UNIQUE IDENTIFIER OF 27-34 alphanumericcharacters, beginning with
the number 1 or 3.
“This-is-mysuper-secret-password-for-bitcoin”
FOR YOU ONLY!!!!Never share this, or lose it,
because if you do yourbitcoin will be lost.
CC BY 2.0 @ Konrad Förstner
• Online purchases from vendors who accept bitcoin
• Face to Face purchases via Mobile and QR codes Scan Vendor’s Wallet QR code, enter agreed amount, done
• ATMs Scan a user's palm print, face, and government-issued ID to verify identity
• Miners volunteer necessary computer power for security and transaction verification (run by the app)
• Rewards for Miners 1. Small voluntary “thank you” transaction fees paid in bitcoin 2. Blocks of bitcoins are “Mined” or released from the 21,000,000 total bitcoins approximately every 10 minutes
CC BY 2.0 @ Jesus Solana
Sell bitcoin and withdraw local cashGet bitcoin by depositing local currency
Accept bitcoinas payment for
goods or services
Mine bitcoinsAnyone with a
connected computercan be a Miner
free “Bitcoin Miner” app
or
The Bitcoin Wallet allows you to use BitcoinOn your PC or Mobile Device
Exchangesbuy bitcoins with
traditional currencyOnline exchanges
Bitcoin ATMS
$ €
$£
More computer power donated = more chances to get the released
Bitcoin block (like a raffle)
A block currently yields
25 BTCbut the block yield halves over time.
Today there are over
12,450,000+ bitcoins in circulation.
THAT’S 59% OF TOTAL BITCOINS
LIKE MOST CURRENCIES, BITCOIN’S VALUE IS BACKED ONLY BY SUPPLY AND DEMAND, NOTHING PHYSICAL.
Bitcoin is very new and extremely volatile
1,400
1,200
1,000
800
600
400
200
006.1405.1404.1403.1402.1401.1412.1311.1310.1309.1308.1307.1306.13
Over the past year
1 bitcoinvalue ranged from between
&$68 $1,151
A common misconception: the US dollar is backed by
gold – however, it hasn’t been backed by anything since 1971.
Value is a combination of
• Strength of economy
• Risk of economy changing
• Number of notes in circulation
Bitcoin has no official value• Buyers and sellers must agree on price • Usually based around value of recent trades elsewhere
Why people do like it Why people don’t like it
No country controls Bitcoin• A global online currency can be set up, accessed, and used anywhere with no prerequisites Especially good for emerging markets where banks, ATMs, and credit card machines are rare
• Accounts cannot be frozen for any reason No country or company can own or regulate P2P bitcoin use
• More bitcoins cannot be printed, controlling inflation
• Value is not tied to a country's political security or trustworthines
No banks or companies • Less fees Credit Card companies charge sellers 2-3%
Financial Services like Western Union charge approx. $7 for every $100 sent to Mexico from the US
Bank fees are outrageous checking accounts, ATMs, minimum balance, overdraft, traveling to another country etc.
Most Bitcoin transactions are processed without fee Voluntary fees automatically put higher priority for miners to process. (Faster transaction verification)
• Nearly instant Direct P2P takes minutes to set up Takes computers minutes to verify
• Easy to carry $1 billion worth of Bitcoin fits in your pocket encrypted onto a memory stick
Moving $1 billion of gold, bills, or wampum is not easy
• Accounts are anonymous (when used correctly)
Added security from hackers and thieves
Equal playing field, no special treatment for rich or punishment for poor
Massive security risks
Criminal currency
• Without countries, banks, or companies Bitcoin security is the responsibility of the individual
• No 3rd parties No insurance to replace your money No police to find your culprit
• If a thief dupes you or a hacker accesses your bitcoin wallet payment cannot be stopped or refunded without recipient’s consent
mtgox.combitcoin.org/enbitcoinatm.comhistoryofbitcoin.orgcoindesk.com/information/why-use-bitcoincs.stanford.edu/people/eroberts/courses/cs181/projects/2010-11/DigitalCurrencies/advantages/index.html
FUTURE PROJECTIONSFOR BITCOIN
Is Bitcointhe future of
currency?
“Bitcoin today is at the level wherethe Internet was in 1994 or 1995, with
20 years of application in its future” Antonis Polemitis,
Bitcoin venture capitalist
Presented by
Bitcoin’s anonymity has attracted criminalsseeking quick untraceable richesSilk Road: an online blackmarket used Bitcoin to generate $1.3 billion in anonymous trafficking of drugs and firearms plus employing hackers and assassins.
Usability
Anonymous
• Not accepted Bitcoin is not accepted many places, especially in physical shops.
• No measure of trustworthiness or accountability
• Credit Cards are faster, free for consumers, and more available in developed countries
UnusableLosses due to lack of regulation
$367 millionUSD worth of bitcoin
Mt GoxExchange lost
$600,000USD worth of bitcoin
FlexcoinExchange lost
$50,000USD worth of bitcoin
PoloniexExchange lost
Bitcoin Exchanges aren’t banks
“Uppercase B”
“Lowercase B”
In the future, virtual currency exchanges like Bitcoin will benefit from implementing Know Your Customer (KYC) policies modeled after reputable exchangesWhy? Because it bolsters a safe and trust-driven environment.
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