Ashok Misra gave a presentation on Bitcoin at Inside Bitcoins in Las Vegas. He has decades of experience in banking and ecommerce. He discusses the growth of ecommerce, the evolution of online payments, and how Bitcoin works as a payment method. He covers topics like how Bitcoin is acquired and stored securely, its application for ecommerce, and potential pitfalls.

1. Inside
Bitcoins
Las
Vegas
Oct
5th
2014
Ashok
Misra
ashok@alinaconsultants.com
@epaymentsNut

2. Bitcoin
–
My
background
and
involvement
• Couple
of
decades
experience
in
building
banking
applicaIons,
funds
transfer.
• Worked
on
ecommerce
applicaIons
&
security
for
Amazon.com
,
Real
Networks,
Linden
labs.
• Founded
an
ecommerce
consultancy
company
2
years
ago.
• Read
‘the
peer
to
peer
Electronic
Cash
System
paper
about
3
years
ago
and
dismissed
it.
• Re
read
it
six
months
later
and
was
completely
mesmerized.

3. Abstract
• Ecommerce
growth
• Genesis
of
payments
for
ecommerce
• Bitcoin
as
a
payment
method
• The
Bitcoin
ecosystem.
• How
do
you
acquire
bitcoin?
• How
do
you
keep
bitcoin
safely
?
• ApplicaIon
of
Bitcoin
for
ecommerce
• Pi[alls

4. Ecommerce
Whirlwind
Tour
• Growth
of
ecommerce
• Technologies
such
as
ssl,
etc.
• Ecommerce
verIcals

5.
Ecommerce
payment
methods
• Credit
/
Debit
cards
• Redirect
payment
methods,
paypal
• Push
payments
/
Bank
transfer
• Mobile
payments
• Invoicing
• COD

6. Ecommerce
CC
Purchase
Path
High
Level
Steps

7. Money
–
Some
Background
• What
is
wrong
with
a
barter
system
?
• First
MinIng
of
Money
began
2500
years
ago.
• 1945
Bre_on
Woods
• 1971
Nixon
Shock
–
USD
become
fiat
&
worlds
reserve
currency.
• FracIonal
reserve
banking,
monetary
mulIplier.
• Problems
with
paper
money.

8.
What
is
Bitcoin
?
What
is
bitcoin
(BTC)
?
• Created
in
2009
by
Satoshi
Nakamoto
• Digital
Currency
• Opensource
• Non
poliIcal
• No
central
authority

9. Bitcoin
Basics
• Opensource
• Digital
currency
• Peer
to
Peer
• Non
poliIcal
• No
central
authority
• ~Double
Spend
• ~Chargeback
• ~High
Fees
• ~Intermediaries

10. Bitcoin
Purchase
path

11. Concepts
&
Misconcepts
• No
central
authority
• Does
not
solve
problems
that
Fiat,
Gold
can
not.
• Bitcoin
is
backed
by
processing
power.
• Bitcoin
is
not
backed
by
anything.
• Bitcoins
have
no
intrinsic
value.
• Bitcoin
is
illegal.
• There
is
no
way
to
control
inflaIon
with
bitcoin.
• Bitcoin
has
been
hacked.

12. High
Level
Legal
Issues
• FinCEN
March
18th
2013
Guidance
• US
Tax
treatment,
Capital
gains,
• ECB
Warning
• Denmark,
Germany,

13. Some
Stats
• BTC
mined
thusfar:
11
million
• Market
Cap
USD
:
One
Billion
• One
BTC
=
apprx
$
350
USD
• No
of
mining
computers:
1600
• Block
Count:
275000

14. Bitcoin
Ecosystem
• Users
/
Merchants
• Hardware
Vendors
• Miners
• Exchanges
• Wallets

15. Crypto
primer
• The
need
for
cryptography
• Symmetric
&
Asymmetric
cryptography
• pgp
key
pairs
• EllipIc
Curve
Digital
Signature
Algorithm
ECDSA
• SHA
hashes

16. What
is
the
blockchain?
• The
block
chain
is
collaboraIvely
maintained
on
a
peer-­‐to-­‐peer
network
• Chaining
blocks
together
make
it
impossible
to
modify
transacIons
in
a
block
without
modifying
subsequent
blocks
• The
concept
of
the
‘proof
of
work’
is
built
on
random
nature
of
hashes.

17. Why
is
Bitcoin
a
be_er
payment
method
for
ecommerce
?
• Merchant
underwriIng
/
Acquiring
• Receipt
of
funds
/
Se_lements
• Processing
Costs
• Security
• Refunds
/
Chargebacks
• Availability
/
Single
point
of
failure
• Magstripes,
EMV,
CNP
…..

18. What
is
a
bitcoin
wallet
?
• Can
refer
to
a
wallet
program
or
a
wallet
file.
• Wallet
files
are
a
collecIon
of
private
keys
• Wallets
interact
with
the
peer
to
peer
system
• Full
service
wallets
• Signing
only
wallets
• Offline
wallets
• Hardware
wallets

19. Bitcoin
Security
• What
does
it
mean
to
say
that
Bitcoin
can
get
hacked
?
• Protocol
has
a
strong
track
record.
• Online
wallets
• MulI
signature
to
protect
against
thep.
• Is
Bitcoin
vulnerable
to
quantum
commuIng?

20. Gotchas
/
Caveats
• Price
point
/
VolaIlity
• Consumer
ProtecIon
• TaxaIon
• Refunds

21. Intro
Reading
List
• Satoshi
Nakamoto
-­‐
Bitcoin:
A
Peer-­‐to-­‐Peer
Electronic
Cash
System
• Bitcoin
Developer
Guide
• Prof
Hyak
-­‐
The
DenaIonalizaIon
of
Money
• Alan
Greenspan's
'Gold
and
Economic
Freedom’
• Paul
Krugman
-­‐
Bitcoin
Is
Evil

22. Watching
Pleasure
1. Why
Bitcoin
terrifies
Big
Banks
Interview
with
Andreas
Antonopoulos
2. Follow
The
Coin
weekly
roundup
3. The
rise
and
rise
of
Bitcoin
-­‐
Documentary

23. Resources
/
links
• Bitcoin.org
(
official
project
web
site
)
• BitcoinfoundaIon.org
(
non
profit
org
)
• Github.com/bitcoin/bitcoin
(
project
repo
)
• en.bitcoin.it/wiki
(
bitcoin
wiki
)

24. QuesIons?