Upload
fan-jin
View
593
Download
1
Tags:
Embed Size (px)
DESCRIPTION
COM700 Final report presentation
Citation preview
BitCoin:An implementation of Digital Cash
Fan Jin
4047 8963
Current Payment System• Token-based system
1. Paper cash
2. Stamp
3. Gift card• Account-based system
1. Credit card
2. Paypal
3. Bank account
Problems of current payment system
Cash:
Easy to carry and transact, untraceable...
Lose, stolen…
Electronic payment system:
Reduces the risk to lose, stolen
Losing privacy, traceable…
Current financial system is controlled by government, may lead to inflation...
Digital CashIntroduced by Chaum in 1982
Features:• security• privacy• transferability • off-line payment • divisibility
Problems:
Double spending
BitCoin
• Account• Transaction• Block
Designed by Satoshi Nakamoto in 2008
BitCoin
Account
• 19MrhxNSDyMRQ8NXn8BR9kLmntQMEQofNc• Public key & Private key• Wallet file
How it works:
Transactions• Payer’s account ID• Payee’s account ID• Amount• Payer’s signature• Payee’s public key• Hash of previous transaction
How it works
Blocks:• Hash of previous block• Transactions happened in
last ten minutes• A nonce
How does BitCoin solve double spending problem
Technical bottleneck:
• Space: huge disk space will be required for chain of blocks
• SHA256: safe for now• Anonymity: Can be analysed by some interested
party
Problems of BitCoin:
Problem of BitCoinFinancial problem: Cause deflation
Equation of Exchange
P * Q = M * V• M, is the total nominal amount of money in circulation on average in an economy.• V, the velocity of money, that is the average frequency with which a unit of money is
spent.• P, is the price level.• Q, is an index of real expenditures (on newly produced goods and services).
When M * V keeps same or increase in a fixed speed
the price of goods and services (P) is inversely proportional to the amount of goods and services in market
Market price of BitCoinhttp://blockchain.info/charts/market-price
What’s happening now:
Cameron and Tyler Winklevoss, the twins best known for their role in the early days of Facebook, believe the online currency bitcoin is "digital gold."
A story about success
What’s happening now:
Homeless, Unemployed, and Surviving on Bitcoins
http://www.wired.com/wiredenterprise/2013/09/bitcoin-homeless/
A sad story…
Future work for BitCoin
1. Solve technical bottleneck
2. Combine BitCoin with economic activities