Bitcoin

BitcoinDouble spending problem

TransactionsConclusion

Bitcoin

Tejas Shembalkar

Department of Information Technology,

Shri Guru Gobind Singhji Institute of Engineering and Technology, Nanded

IET, Present around the World, 2014

Tejas Shembalkar Bitcoin



Index

1 BitcoinWhat is Bitcoin?Why is it Important?Why does it have value?

2 Double spending problemDouble spending problemHow bitcoin solves this problem

3 TransactionsHow does it work?How to buy Bitcoins?Earning profit using Bitcoins

4 Conclusion




What is Bitcoin?Why is it Important?Why does it have value?

Outline




4 Conclusion





What is Bitcoin?

A decentralized digital currency like virtual cash or gold

No bank or government prerequisites or control

Notations: BTC, XBT, ฿





What is Bitcoin?








What is Bitcoin?








What is Bitcoin?

Peer to peer network

First Bitcoin issued in 2009 -Satoshi Nakamoto

No requirement of third party intermediary





What is Bitcoin?








What is Bitcoin?








What is Bitcoin?

Limited to 21 million Bitcoins -X amount released every 10minutes -until 2140

Divisible to .00000001

Very difficult and expensive to hack

Controlled by consensus of market participants





What is Bitcoin?









What is Bitcoin?









What is Bitcoin?









What is Bitcoin?









Outline




4 Conclusion





Why is it important?

People don’t have access to banking services

Flat currencies getting inflated by printing money

Cross currency transfers are expensive





















Outline




4 Conclusion





Why does it have value?

Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent

Easy to buy and sell

Very low transaction fees






Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent








Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent








Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent








Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent








Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent








Limited/Scarce

Decentralized

Peer-to-peer

Can be anonymous

Transparent






Double spending problemHow bitcoin solves this problem

Outline




4 Conclusion





Double spending problem

Without a third party, digital money could be spent twice

Digital cash-simply a computer file

Same file can be sent to Charlie





Outline




4 Conclusion





How does it solve this problem

Distribute the necessary ledger among all the users of thesystem.

Every transaction is registered in a public, distributed ledger,which is called the block chain.

New transactions checked against the block chain.

Ensure that the same bitcoins haven’t been previously spent































How does it work?How to buy Bitcoins?Earning profit using Bitcoins

Outline




4 Conclusion





How does it work?

Money-deposited into a bank account

Bitcoin-stored in public ledger

Sending/receiving BTC as easy as sending an email

Coins stored in wallets





How does it work?









How does it work?









How does it work?









How does it work?

Each user is assigned two keys

1 Public Key- Account no / Address 27-34 alphanumericcharacters

2 Private Key- Password to access bitcoins in the account.

Public Key example 12kj2F35MB09Ida453reTYU6i730v





Wallet





Transactions

Fact

Bitcoin transactions are pseudonymous





Outline




4 Conclusion





How to buy Bitcoins?

There are three ways

1 Currency exchange

2 Barter

3 Mine





How to buy Bitcoins?





Outline




4 Conclusion





Earning profit using Bitcoins

1 Mine, then sell

2 Invest or trade

3 Offer discounts in products /services for payment in BTC






1 Mine, then sell

2 Invest or trade







1 Mine, then sell

2 Invest or trade






Bitcoin Transaction




Challenges

1 Volatility.

2 Security breaches.

3 Criminal uses -Silk Road.

4 Not widely used.

5 Losing Your Wallet.




Conclusion

Undoubtedly Bitcoin has changed the way transactions occur, noweven the currency is virtual. There are many challenges that stillremain unanswered, since bitcoin is not regulated by any bank, soin case you lose your computer or format your hard drive then allyour bitcoins just vanish. Since no bank regulation is applied on thetransactions, we still need a way to make it work in such a way thatthere are regulated transactions and no illegal activities such as SilkRoad happen again.


Economy & Finance

Bitcoin