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Bit Coins – Can it pose challenge to Existing System?

By Lokesh Aggarwal

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POPULAR OPINION ???

"Bitcoin is a technological tour de force."

Bill Gates (Microsoft Co-founder)

"I'm a big fan of Bitcoin … Regulation of money supply needs to be depoliticized. “

Al Gore (Former US vice president)

"Every informed person needs to know about Bitcoin because it might be one of the world's most important developments."

Leon Louw (Nobel Peace Prize nominee)

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BITCOINS, WHAT???

• Bitcoin is a form of Digital Currency

• Created and held Electronically

• Produced by lots of people running Computers all around the world using Software

• Bitcoins aren’t printed like Dollars or Euros

• Bitcoin client software called a Bitcoin Wallet allows a user to transact Bitcoins

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FATHER OF BITCOINS - Satoshi Nakamoto

• Created the Bitcoins protocol and reference software

• Published a paper on the Cryptography Mailing list in 2008

• Released the first Bitcoin software in 2009

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UNITS OF BITCOINS ???

• Bitcoin can be broken up into small fragments of 0.00000001 BTC, which is one hundred millionth of a Bitcoin.

• This unit is called satoshi in homage to Bitcoin's creator. Satoshi is the smallest, atomic fragment of Bitcoin.

• There are also two other subunits of Bitcoin, and those are called Millibitcoin (mBTC) and Microbitcoin (µBTC).

• One Millibitcoin equals to 0.001 BTC, which is one thousandth of Bitcoin, or 100,000 Satoshis, or 1,000 µBTC.

• One Microbitcoin equals to 0.000001 BTC, which is one millionth of Bitcoin, or 100 Satoshis, or 0.001 mBTC.

• Microbitcoins are sometimes referred to as simply bits.

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FEATURES ???

Easy - Send Bitcoin from your computer, tablet, smart phone or other device, to anyone, anywhere in the world, day or night

Secure - Bitcoin verifies transactions with the same state-of-the-art encryption that is used in military and government applications.

Open - Bitcoin is open-source. Nobody owns it; the most popular client is maintained by a community of open-source developers.

Fair - Using the Bitcoin network is free, except for a voluntary fee you can use to speed up transaction processing.

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USE IN CRIMINAL ACTIVITIES???

"Like cash, it can be used for ill as well as for good.”

• Money laundering

• Use in Black markets

• Bitcoin theft

• Malware

• Unauthorized mining

• Malware stealing Bitcoins

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SECURITY ???

Security Issues

Unauthorized Spending

Double Spending

Race AttackHistory Modification

Selfish Mining

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LEGAL STATUS OF BITCOINS ???

Country Legal Country Legal

Australia Yes Ecuador No

Austria Yes  Finland Yes

Bangladesh No Germany Yes

Belgium Yes Hong Kong Yes

Bolivia No Iceland No

Brazil Yes India Restricted

Bulgaria Yes Indonesia Restricted

Canada Yes Israel Yes

China Restricted Japan Yes

Colombia Yes Jordan Restricted

 Denmark Yes Kyrgyzstan NoSource: - Wikipedia

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LEGAL STATUS OF BITCOINS ???

Country Legal Country LegalLebanon Restricted Switzerland Yes

Lithuania Yes Taiwan Restricted

Malaysia Yes Thailand Yes

Norway Yes Turkey Yes

Philippines YesUnited Kingdom

Yes

Poland Yes United States Yes

Russia Restricted Vietnam Yes

Slovenia Yes

Singapore Yes

South Korea Yes

Source: - Wikipedia

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BITCOINS VS RBI ???

• On 24 December 2013, the Reserve Bank of India issued an advisory to the Indian public not to indulge in buying or selling of virtual currencies, including Bitcoin.

• On 28 December 2013, the Deputy Governor of the RBI, K. C. Chakrabarty, made a statement that RBI had no plans to regulate Bitcoins.

• The consolidated legal position in the month of August 2014 is that the legality of Bitcoin is in doubt in India.

• ED believes that Bitcoins money can be used for hawala transactions and funding terror operations.

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Thank You!!!