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National Mining University
Bitcoin.General informationBulgakov Dmitry, 2013
Content
1. Bitcoin Versus Conventional Currencies
2. How Bitcoin works
3. Bitcoin pros and cons
Bitcoin Versus Conventional CurrenciesBitcoin uses P2P technology without a central authority
Bitcoin Versus Conventional CurrenciesBitcoin is primarily digital
Bitcoin Versus Conventional CurrenciesBitcoin has a maximum 21 million limit
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Bitcoin Versus Conventional CurrenciesBitcoin transactions have limitations
Bitcoin Versus Conventional CurrenciesBitcoin balances are not insured
How Bitcoin works
key pair
public private
What is encrypted with the one key → сan be decrypted with the other
Bitcoin uses asymmetric encryption method
сan be decrypted with the other ← What is encrypted with the one key
How Bitcoin worksBitcoin can be acquired through a number of ways
How Bitcoin worksAll Bitcoin transactions are included in a block chain
Bitcoin pros and consBitcoin has a number of advantages:
Bitcoin is the fi rst cryptocurrency to capture the public imaginati on
Total issuance is l imited to 21 million, so it is unlikely to be devalued
As a decentralized currency, Bitcoin is free from government interference and
manipulati on.
Transacti on costs are much lower than with conventi onal currencies.
Bitcoin pros and consBitcoin's disadvantages include:
The price of a Bitcoin has been increasingly volati le, making it diffi cult to assess its
real value and increasing the risk of losses for investors in the cryptocurrency.
The relati ve anonymity of Bitcoin may encourage its use for il legal and ill icit
acti viti es such as tax evasion, weapons procurement, gambling and circumventi on of
currency controls.
The fact that bitcoins exist primarily in digital form renders them vulnerable to loss.
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