Bit coin fiat_barcampbangalore BCB11 Feb 2011Presentation Transcript
Akhil Kodali (@akhilkodali)
Work for Lexity Labs, Bangalore - Simple advertising for ecommerce.
I am no expert on BitCoins
I am reasonable common sense “expert” on monetary system
Cryptography gives me headache
Fiat Money Defined
any money declared by a government to be legal tender
state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard
money without intrinsic value
fiat itself is not the problem but people in charge of that fiat money
Characteristics of Money
Recently... The RBI said year-on-year reserve money growth was 11% in the week to Feb. 3, compared with 24.5% a year earlier. http://economictimes.indiatimes.com/markets/money-markets/january-27-money-supply-grows-14-4-on-year-rbi/articleshow/11806572.cms
>30% CAGR 3 year period before that
asset liability mismatch?
Mother Nature provides real assets all else is ' Maya '
Feeling patriotic !?
Geeks fight back
Why should Indians care?
Current perception RBI saved is from the world wide banking crisis...yes true...but
Its has miserably failed to save us from Inflation
It has always favoured the needs of the government of the day rather than save Indians from the monster of Inflation
Look around...significant chunk of the loans are given to entities who can influence the government machinery i.e. Large corporates and realtors
Small businesses still find it extremely hard to raise loans from banks...the reality on the ground and numbers speak for themselves
The banking system is getting more and more derivative based(euphemism for hiding risks) inspite of 2007/08
Answer is self evident
We need a system where individual liberties are up held
No Central Control
Independence form governments and bankers
Low transaction costs
Bankers and financiers should actually “allocate capital” instead of making a killing on transactions
What is Bitcoin?
A digital currency powered by a peer to peer network, used primarily for internet transactions.
Anonymous as Cash...not really but close enough
No central control
How does bit coin work
“Owners transfer bitcoins by sending them to another Bitcoin address using a website or program designed for this purpose. Under the hood, the software transfers the coins by generating a digital signature to link the prior transaction with the public key of the next owner. Bitcoin nodes record all data necessary to make any valid transaction in a publicly distributed database called the block chain. Nodes build the block chain using a proof-of-work system that prevents double-spending and confirms transactions”
Do you see disruption?
Postal service – email
Banking system – bitcoin
Why should I care about banking?
Customer Support – seriously?
Pay to store?
Govt Vs Math
Rise and fall
Fall and Rise?
Money is information?
Wallet (Desktop and online)
Good drive out bad?
Generating Blocks used to record bitcoin transactions over the network. Blocks are necessary to prevent double spending. Miners are awarded Bitcoins for generating Blocks (Currently 50BTC per Block + Transaction Fees) 1 Block is generated every 10 minutes
Bitcoins mining will end at 21 million coins in 2140
The rate of generation is slowing down exponentially
Satoshi Nakamoto – The Mystery?
Pseudonym, no one knows his/her/their real identity and email address
Started working on it in 2007
Published in 2008
First transaction in 2009 – The Genesis Block
Left the project in 2010
Disappeared in 2011
Team of volunteer developers working now
No cost transfer (anonymous?)
Revenge of Geeks
Geeks are becoming “Monetary Scientists”
This is a good thing as opposed to government mouth pieces(keyensian economists)
Bitcoin is designed to fight big brother's control on us
Does not scale – in the long term
“Let's assume an average rate of 2000 tps, so just VISA …. Shifting 60 giga bytes of data in, say, 60 seconds means an average rate of 1 giga byte per second, or 8 giga bits per second.” >200MB of history Switches to a banking model as things get big
Can't Create Money
Can't Steal Money
Can reject blocks though
I hate banks
40 – 200 petaflops
Several times largest supercomputer
“Security through ostracism”
DDOS against #1
Not banks again
Random names equals anonymity
Morphes into a banking system
http://bitcoin.stackexchange.com/ I need to add more sources Most of the content has been picked up from other source. Please let me know so that I can(I need to) acknowledge them