BITCOIN THE NEW CURRENCY Na biwi na bacha
BITCOIN – THE NEW CURRENCY
“Na biwi na bacha, na baap bada na maiya, The whole thing is that ki bhaiya sabse bada rupaiya”
Revolutionary changes in society Freedom Revolution Industrial revolution Monetary Revolution Technological revolution Social Media revolution
Why do we need money?
Evolution 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 different bank notes in circulation in US alone • Each US dollar bill was issues by a different 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”
Evolution 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 Global Citizen • Physical money can be moved anywhere • With e-money, 3 rd parties are involved, so portability of the money is at their mercy • National currencies are limited to national boundaries • For international transactions, hefty transaction fees needs to be paid (up to 15%) • Approx 6 trillion dollars are exchanged daily and its still growing • Unlimited Supply and free to use • Supply depends on the central authority controlled by monetary policies Hyperinflati • Supply is increased for various reasons – give economy a lift or elections or fund a war on
Hyper Inflation • Inflation arises when there is increase in supply of money and hence increase in demand • With inflation, the value of our money reduces • Increase in supply in a very short period of time causes hyperinflation • In less than 100 years, more than 55 cases have been recorded of hyperinflation • Examples: • 1946 – Hungary, the daily inflation rate rose to almost 200% • 2008 - Zimbabwe Dollar was loosing half its value every 25 hours • 2014 – Russian Rubble lost almost 40% of its value
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 invention • It is peer-to-peer pseudonymous digital currency • "Peer-to-peer" (P 2 P) – No central authority creating new money or clearing transactions • "Pseudonymous" - The real world identity of the parties of a transaction can be kept hidden from the public identified by address only • It is precious as supply will be only to 21 mn units • It has benefits of both physical and digital money * Digital currency using encryption techniques for regulated generation & verification of transactions & operating independently across all boundaries
Bitcoin
Characteristics & Benefits of Bitcoin Easily transferable anywhere in the world – Digital Cash Decentralized currency – no 3 rd party involved Cryptocurrency Bitcoin Is legal Global currency- no country owns it and no country can shut it down
Characteristics & Benefits of Bitcoin Privacy is maintained. You have the right to spend your money anywhere without disclosing the identity Precious and rare – only 21 Mn units can be generated, 14 Mn generated so far Limited Supply – resistant to hyper inflation Bitcoin is a number – so it is infinitely divisible. At present, divisible to 8 th unit. 1 BTC = 100, 000 Satoshi No transaction 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 blocks every 210, 000
Bitcoin Mining
Why do we bother? – Future of Bitcoin Trading Volume (In Mn USD) 25 23 Bitcoin Wallets (Nos) 9 7. 95 8 20 15 6 10 300 3. 19 3 200 2 5 100 1 0 0 2013 2014 Trading Volume (In Mn USD) 510 400 5 4 600 500 7 15 Bitcoin ATMs (Nos) 0 2013 2014 Bitcoin Wallets (Nos) 3 2014 2016 Bitcoin ATMs (Nos)
Why do we bother? – Future of Bitcoin VC Investment (In Mn USD) 400 355 350 300 Top 03 VC deals in 2014 Companies Type Funded by Amount (Mn USD) Xapo Online Wallet Index Ventures & Greylock Partners 40 Bitpay Bitcoin payment service provider Index Ventures 30. 5 250 200 Blockchain 150 100 96 50 0 2013 VC Investment 2014 (In Mn USD) Online Wallet & other bitcoin related services Lightspeed Venture Partners and Wicklow Capital 30 • Ex CEO Citibank 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 75 Mn 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 accepting bitcoins - 2014
Influential people on Bitcoin It’s a bold entrepreneurial technology It's a technical tour de force Bitcoin is better than currency in that you don’t have to be physically in the same place
Influential people on Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable I do think Bitcoin is the first [encrypted money] that has the potential to do something like change the world It is a huge deal, it's a huge, huge deal
Influential people on Bitcoin [Virtual Currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system Every informed person needs to know about bitcoin because it might be one of the world’s most important developments Bitcoin actually has the balance and incentives right, and that is why it is starting to take off
Challenges - Bitcoin • Resistance from the 3 rd parties • Value of bitcoin is very fluctuating • The basic of bitcoin is technology, but it is still a challenge for developing economies • Security • Bitcoin transaction fees • Processing time of transactions • Low adoption rate
Other Virtual/Cryptocurrencies Litecoin Created by – Charles Lee Creation date – 2011 Peercoin Created by – Sunny King Creation date – 2012 Currencies Market Capitalization Price (USD) (As of 19 th 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 Darkcoin Created by – Sunny King Creation date – 2013 Dogecoin Created by – Shibu Inus Creation date – 2013
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