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Current Payment System
• Token-based system
1. Paper cash
2. Stamp
3. Gift card
• Account-based system
1. Credit card
2. P...
Problems of current payment system
Cash:
Easy to carry and transact, untraceable...
Lose, stolen…
Electronic payment syste...
Digital Cash
Introduced by Chaum in 1982
Features:
• security
• privacy
• transferability
• off-line payment
• divisibilit...
BitCoin
Designed by Satoshi Nakamoto in 2008

•Account
•Transaction
•Block
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
...
How it works
Blocks:
•
•
•

Hash of previous block
Transactions happened in
last ten minutes
A nonce
How does BitCoin solve double spending problem
Problems of BitCoin:
Technical bottleneck:
• Space: huge disk space will be required for chain of
blocks
• SHA256: safe fo...
Problem of BitCoin
Financial problem: Cause deflation
Equation of Exchange
P*Q=M*V
•
•
•
•

M, is the total nominal amount...
Market price of BitCoin
http://blockchain.info/charts/market-price
What’s happening now:
A story about success
Cameron and Tyler Winklevoss,
the twins best known for their
role in the early...
What’s happening now:
A sad story…
Homeless, Unemploy
ed, and Surviving on
Bitcoins
http://www.wired.com/wirede
nterprise/...
Future work for BitCoin
1. Solve technical bottleneck
2. Combine BitCoin with economic activities
Presentation of Bitcoin
Presentation of Bitcoin
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Presentation of Bitcoin

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Transcript of "Presentation of Bitcoin"

  1. 1. 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
  2. 2. 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...
  3. 3. Digital Cash Introduced by Chaum in 1982 Features: • security • privacy • transferability • off-line payment • divisibility Problems: Double spending
  4. 4. BitCoin Designed by Satoshi Nakamoto in 2008 •Account •Transaction •Block
  5. 5. BitCoin Account • 19MrhxNSDyMRQ8NXn8BR9kLmntQMEQofNc • Public key & Private key • Wallet file
  6. 6. How it works: Transactions • • • • • • Payer’s account ID Payee’s account ID Amount Payer’s signature Payee’s public key Hash of previous transaction
  7. 7. How it works Blocks: • • • Hash of previous block Transactions happened in last ten minutes A nonce
  8. 8. How does BitCoin solve double spending problem
  9. 9. Problems of BitCoin: 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
  10. 10. Problem of BitCoin Financial 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
  11. 11. Market price of BitCoin http://blockchain.info/charts/market-price
  12. 12. What’s happening now: A story about success 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."
  13. 13. What’s happening now: A sad story… Homeless, Unemploy ed, and Surviving on Bitcoins http://www.wired.com/wirede nterprise/2013/09/bitcoinhomeless/
  14. 14. Future work for BitCoin 1. Solve technical bottleneck 2. Combine BitCoin with economic activities
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