In today's payment technology marketplace, Bitcoin is still considered a newcomer in the early stages of adoption. While it is garnering a lot of attention, the emerging payment option is often overshadowed by the fear of the unknown and the discussions around its future can be polarizing. Some companies are starting to embrace it and show traction, while others are publically stating that they will not support it, for now. This session will explore the virtual currency landscape and the impact of Bitcoin, why it is stealing the spotlight and the challenges associated with adoption and regulation.

1. Bitcoin
Fad or The Future of Currency?

2. Latest Headlines
Counterterrorism Program Names Virtual Currencies As Area Of Interest
China Construction Bank shuts down bitcoin, litecoin transactions
State regulators issue virtual currency warning
Bank of Canada unconcerned about growing popularity of bitcoin
Wisconsin State Assembly Candidate Accepts Bitcoin Contributions
Wisconsin Government Accountability Board Forces Candidate To Return Bitcoin Donation
New York casino offers latest virtual currency site
MasterCard is paying lobbyists to concentrate on Bitcoin and mobile payments.
Buying Beer With Bitcoin is Legal in California
Ohio Bans Buying Booze With Bitcoin

3. 2014TeslaModelS
91.4Bitcoins($103,000)
December 12, 2013

4. 2014LamborghiniGallardoLP560-4
216.843Bitcoins($209,995)
December 13, 2013

5. Twobedroomapartment,Olso,Norway
5,600Bitcoins($680,000)
October 29, 2013

6. NASCARSponsorship
67,000,000Dogecoin($55,000)
March 25, 2014

7. 10,000 Bitcoins ($25)
May 22, 2010
“I'll pay 10,000 bitcoins for a
couple of pizzas.. like maybe 2
large ones so I have some left over
for the next day.
I just think it would be interesting
if I could say that I paid for a pizza
in bitcoins ”

8. James Gagliardi
James Gagliardi is Vice President of Product and Innovation
at Digital River. He is responsible for the strategy behind the
company’s global product roadmap and ensuring its suite of
cloud commerce products and solutions meet, exceed and
anticipate the needs of Digital River’s world-renowned
clients.
Views and opinions expressed here are my own.
http://jamesgagliardi.com
@jamesgagliardi
1LC2QvM8zrhtD57ewygsRnJZK65nCE3DuG

9. Digital River
http://www.digitalriver.com
WORLDWIDE
COMMERCE
WORLDWIDE
PAYMENTS
WORLDWIDE
MARKETING

10. OUR CUSTOMERS INCLUDE TOP GLOBAL BRANDS
$390M in 2013 revenue
$30B annual online transactions (ttm)
20 years of experience
31 offices around the world
1,300+ commerce experts
243 serving countries and territories
200 payment methods
Digital River
http://www.digitalriver.com

11. Virtual Currencies

12. Virtual Currencies
“An unregulated, digital money, which is issued and usually controlled by its
developers, and used and accepted among the members of a specific virtual
community”- European Central Bank
“A medium of exchange that operates like a currency in some environments, but does
not have all the attributes of real currency” - US Department of Treasury
http://en.wikipedia.org/wiki/Virtual_currency

13. Virtual Currencies
GOA
Virtual Currency
U.S.
Dollars
Real
Goods &
Services
Virtual
Goods &
Services
Closed Flow
Virtual Currency
U.S.
Dollars
Real
Goods &
Services
Virtual
Goods &
Services
Hybrid
Virtual Currency
U.S.
Dollars
Real
Goods &
Services
Virtual
Goods &
Services
Open Flow

14. Closed System
Super Mario Bros.
100 coins gives Mario an extra life

15. Semi-Closed
System

16. HybridSystem
Chuck E. Cheese’s Tokens and Tickets

17. HybridSystem
Chuck E. Cheese’s Tokens and Tickets

18. Hybrid/OpenSystem
Delta SkyMiles

19. Open System
Second Life – Linden Dollar

20. Abandoned Currencies

21. Microsoft Points
Microsoft Points
Users' existing Microsoft Points
will be converted into a currency
amount equal to or greater than
their current Points balance.

22. FacebookCredits

23. CanadianDigital Currency
Mint Chip

24. Failed and Abandoned Virtual Currencies
Flooz (1999-2001)
Beenz (1998-2001)
E-Gold (1996-2009)
InternetCash (1999-2001)
DigiCash (1990-1998)
CyberCash (1994-2001)
Microsoft Points (2006-2013)
Facebook Credits (2009-2012)
Canadian MintChip (2012-2014)

25. Bitcoin

26. Decentralized
Virtual Currency
Bitcoin is a peer-to-peer payment
system that is not controlled by
one central authority.
Cryptocurrency coins are "mined"
with computers by solving
complex mathematical equations
called "hashes".

27. Bitcoin
2008: Bitcoin.org registered
2008: Satoshi Nakamoto published Bitcoin:
A Peer-to-Peer Electronic Cash System that
describes everything you need to know
about Bitcoin
2009: Open Source Software Launched
2010: Mt.Gox, Bitcoin exchange was
established
2010: Silk Road Launched
2011: Wikileaks started accepting BTC donation
2011: EFF Stops accepting Bitcoin
2011: First Bitcoin conference
2012: Wordpress accepts Bitcoin
2013: First Bitcoin ATM unveiled
2014: Overstock.com begins accepting Bitcoin,
$124,000 in sales on first day.
2014: Mt.Gox, loses 800,000 bitcoin
http://historyofbitcoin.org/

28. Bitcoin vs. bitcoinsSystem, protocol, community currency

29. Bitcoin Currency
BTC/XBT
1 bitcoin= 1 BTC
1 cBTC = 0.01 BTC
1 mBTC = 0.001 BTC
1 μBTC = 0.000001 BTC
1 satoshi= 0.00000001 BTC
$4.00 = 0.009324 BTC
$4.00 = 9324.00 Bits (μBTC)
Dominican Joe Coffee Shop

30. BitcoinCurrency
Exchange Rate

31. Commodity
Bitcoin is actually a commodity with its own fluctuating value, like a stock or bond.
The proper way to think about Bitcoin for now is not as a currency, due to its lack of price-
stability, but rather as a commodity
- Salil Deshpande, Managing Director at Bain Venture Capital
Scarcity helps drive up the price of a commodity. Food prices rise when a drought chokes off
supplies, for example, and bitcoin has its scarcity built in.
Bitcoin has been classified as a commodity in Finland after the Scandinavian country’s central
bank declared that it did not meet the definition of a currency.

32. Bitcoin System
WalletMining Transferring Blockchain

33. MiningMiners bring new Bitcoins into the
circulation through a complex
mathematical and computing
process.
The total number of Bitcoin is
capped at 21 million BTC.

34. Wallet
1LC2QvM8zrhtD57ewygsRnJZK65nCE3DuG
Wallets are computer files that hold
bitcoins.
Similar to how emails are sent between
email addresses, bitcoins are sent between
wallets.
Each wallet has a unique address that
distinguishes it from other wallets.
If you lose the address, that Bitcoin is lost
to you forever.

35. Transfer
Email or Bitcoin Address

36. Transfer
QR Codes

37. Blockchain
The blockchain stores a public
leger of every transaction made.
It is used to verify transactions
and prevent fraud and double-
spending, making Bitcoin secure.
Bitcoin transactions are generally
irreversible, and users could lose
their principal if they hold onto
bitcoins for an extended period of
time.

38. How to buy Bitcoin
Bitcoin ATM In-PersonOnline Exchange

39. In-Person

40. Bitcoin ATM

41. Bitcoin ATM
Authentication Requirements
Email Face Palm Print Government ID

42. BitcoinOnline Exchange
Mt.Gox

43. Bitcoin Exchange

44. Buying Bitcoin
Verification Method

45. Buying Bitcoin
Verification Method

46. Buying Bitcoin
Link A Bank Account

47. Buying Bitcoin
Verification Method

48. Buying Bitcoin
Verification Method

49. Silk Road

50. Using Bitcoin

51. Vending Machine
Marijuana vending machine
accepts Bitcoin

52. Paying with Bitcoin

53. Paying with Bitcoin
Notable Brands

54. Paying with Bitcoin
Overstock.com

55. Yelp
Adds Bitcoin

56. Bitcoin Debit Card
Xapo debit card

57. Alternatives

58. Cryptocurrency
Name Market Cap Price
1 Bitcoin $5,511,150,639 $432.88
2 Litecoin $286,348,565 $10.19
3 Peercoin $43,851,072 $2.05
4 Ripple $39,426,230 $ 0.005202
5 Dogecoin $34,645,538 $0.000455
6 Nxt $22,512,348 $0.022512
7 Namecoin $17,674,551 $2.04
8 Mastercoin $17,587,609 $31.23
9 BlackCoin $9,271,423 $0.12
10 DarkCoin $7,037,259 $1.67

59. CreditCard

60. PayPal

61. Amazon

62. Apple

63. Google

64. Facebook

65. Carrier Billing

66. Wire Transfer

67. Bitcoin
ADVANTAGES
Low transaction fees
Fewer risks for merchants
Security and control
No Risk of “Charge-backs”
Global
DISADVANTAGES
Consumer onboarding difficulty
Wallets Can Be Lost
No Buyer Protection
Volatility
Regulation uncertainty
Bitcoin is property, subject to
capital gains

68. Sound Off
Questions, Comments, Thoughts

69. References
Bitcoin
http://bitcoin.org
TryBTC
http://trybtc.com
Coindesk
http://www.coindesk.com
History of Bitcoin
http://historyofbitcoin.org/
BitLegal
http://www.bitlegal.io/
United States Government Accountability Office
http://www.gao.gov/assets/660/654620.pdf
Internal Revenue Service
http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-
Guidance
Financial Crimes Enforcement Network
http://www.fincen.gov/news_room/testimony/pdf/2013
1119.pdf

70. Bitcoin
Fad or The Future of Currency?