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BITCOIN- A Presentation.

  2. INTRODUCTION • Digital currency created in 2009 by Satoshi Nakamoto. • It offers lower transaction fees than traditional online payment mechanisms. • There are no physical bitcoins, only balances kept on a public ledger. • It allows online payments to be sent directly from one party to another without involving any third party. • Bitcoins are not issued or backed by any banks or governments.
  3. HOW BITCOIN WORKS ? • The blockchain is a distributed database – to achieve independent verification of the chain of ownership of any and every bitcoin amount, each network node stores its own copy of the blockchain. • The blockchain is nothing but a public ledger that records bitcoin transactions. It is virtually existing in the cloud and it can’t be owned by anyone, but can be used by everyone. • Transaction fees is the amount that is paid extra with the transaction in order to process the transaction faster. Transaction fee is not mandatory. The
  4. HOW BITCOIN WORKS ? • There can be only one owner of any Bitcoin. For every bitcoin an owner holds, that bitcoin has a unique address and this address changes only when a transaction of that bitcoin takes place. This address is nothing but a unique set of characters that one bitcoin can have and it does not overlap with others. • Miners are responsible for handling the Blockchains. They make sure all the transactions are recorded and they generate new addresses to Bitcoins when the transaction is completed. • The best thing about Bitcoin is that, despite using a public distributed system where people can see the transactions, use of private keys hides the owner’s identity thereby preserving the privacy.
  5. PUBLIC PRIVATE KEY ENCRYPTION • In Bitcoin, we hold the private key, a key to our money. • When we send a bitcoin to someone else, we send it to a public key. Then we need to sign with our private key where the bitcoin currently resides to actually send it to the person we want to pay. • It is estimated that Bitcoin Miners will produce bitcoins till year 2140. • Today 0.001 Bitcoin is equal to around 45 cents. • It is estimated that till year 2140, price of one hundred millionth of a bitcoin will be less than one
  6. GOVERNANC E • Bitcoin’s system of radically decentralized governance is facing perhaps the biggest test in the digital currency’s history. • Bitcoin was initially led by Satoshi Nakamoto. Nakamoto stepped back in 2010 and handed the network alert key to Gavin Andresen. He subsequently sought to decentralize control. • Bitcoin’s current governance structure prevents undue influence from any single individual or organization.
  7. PRICE AND VOLATILITY According to Mark T. Williams, as of 2014, bitcoin has volatility seven times greater than gold, eight times greater than the S&P 500, and 18 times greater than the US dollar. • In 2011, The price of Bitcoin rose to US$32 before returning to US$2. • It was as high as US$266 on 10 April 2013, before crashing to around US$50. • On 29 November 2013, the cost of one bitcoin rose to a peak of US$1,242. • On 3 March 2017, the price of a bitcoin surpassed the market value of an ounce of gold for the first time as its price surged to an all-time high of $1,268. A study in Electronic Commerce Research and Applications, going back through the network's historical data, showed the value of the bitcoin network as measured by the price of bitcoins, to be roughly proportional to the square of the number of daily unique users participating on the network.
  9. CRIMINAL ACTIVITIES BLACK MARKET • 4.5% to 9% of all transactions on all exchanges in the world were for drug trades on a single dark web drugs market. • Illegal goods and services like child pornography, murder-for-hire services, and weapons are also allegedly available on black market sites that sell in bitcoin. THEFT • One way bitcoin theft can be done involves a third party accessing the private key to a victim's bitcoin address, or of an online wallet. • The network does not have any provisions to identify the thief, block further transactions of those stolen bitcoins, or return them to the legitimate owner. • In one of the many cases, an Australian wallet service, was hacked twice in October 2013 and lost more than $1 million in bitcoins.
  10. CRIMINAL ACTIVITIES MALWARE Malware Stealing • Some malware can steal private keys for bitcoin wallets allowing the bitcoins themselves to be stolen. • Malwares also log keystrokes to record passwords, often avoiding the need to crack the keys. Ransomware • A program called CryptoLocker, typically spread through legitimate-looking email attachments. • The email encrypts the hard drive of an infected computer, then displays a countdown timer and demands a ransom,
  11. ADVANTAGES •Freedom in Payment •Control and Security •Information is Transparent •Low Fees •It’s Fast DISADVANTAGE S •Lack of Awareness •Not widely accepted •Risk and Volatility •Still Developing •High uncertainty •No backup for private key
  12. FUTURE OF BITCOIN • Bitcoin frees people from the traditional gatekeepers of their wealth. People will be in possession of their money. • Even people with no IDs or bank accounts can use bitcoin with just access to internet and a cell phone and be part of the world economy. • No government or bank can stop a transaction through bitcoin. • It gives financial privacy. • Financial institutions will not be able to cause bail-outs or bail-ins. • Japan is already working on cyber currency laws. Bitcoin is already popular in some countries like Argentina, China, Iran and Japan. • It will disrupt our financial industry and laws but will also rapidly decentralize the capital.
  13. THANK-YOU!