Economic aspects of bitcoins

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Bitcoin is a new type of money. This presentation talks about how bitcoins can possible break the fiat banking system protocol.

The first set of slides were there to depict the following story:

Think of a forest, Where a mouse, Morton, befriended an elephant called Joe. Now Morton would threaten other mice in his clan in the name of Joe and take hold of their food. Other mice were helpless because Morton was backed by a bigger animal, and had no option, but to give away their hard earned food. In the course of time, all mice befriended a bigger animal. Dave befriended Carroll the fox and Alice befriended Ethan befriended Noah the Lion and so on. Assuming all of them were collecting food, each one of them could now threaten everyone else and force others to give away their food. The food each mouse ends up with will be proportional to the strength of their big animal friend.

In 2008 came a smart mouse who knew about the happenings in the alienated human world. He was called Satoshi Nakamoto. He thought that he could take on the elephant, fox and lion with a machine gun. So he invested in them, and was able to survive in his population, among other mice with big animal friends. His threatening was way more powerful.

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Economic aspects of bitcoins

  1. 1. Economic Aspects Of Bitcoin Shivek Khurana Cluster Innovation Centre University of Delhi
  2. 2. Give me your food !
  3. 3. Banks are bigger animals You are the mouse And mouse’s threatening is currency
  4. 4. In 2008 came a smart mouse
  5. 5. In 2008 came a smart mouse
  6. 6. In 2008 came a smart mouse
  7. 7. Bitcoin is not online money transfer backed by any state
  8. 8. Bitcoin is Distributed No big animal friend
  9. 9. Bitcoin is Distributed No big animal friend An ecosystem of miners
  10. 10. Government(s) no like Bitcoin 1. state can track issued money = earn taxes 2. seigniorage
  11. 11. Government(s) no like Bitcoin 1. state can track issued money = earn taxes 2. seigniorage 1. No track, no taxes :P 2. No printing, no seigniorage
  12. 12. The dark side 1. Promotes illegal transfer (Peer to peer transactions) 2. Controversial : backed by an algorithm
  13. 13. Transaction Bank transactions are never final
  14. 14. Transaction Bank transactions are never final Bitcoin transactions are
  15. 15. Legislative and Judiciary The justice or legislative system can take your money at any time
  16. 16. Legislative and Judiciary The justice or legislative system can take your money at any time Your bitcoins are only yours to keep
  17. 17. Limits The bank limits access to your own money
  18. 18. Limits : Lifted The bank limits access to your own money No bank, no limit
  19. 19. Macro Manipulation The legislative manipulates the value of your money
  20. 20. No Macro Manipulation The legislative manipulates the value of your money Only the community can manipulate the value
  21. 21. Restricted Geographic Mobility Difficult to move money across geographic boundaries
  22. 22. Geographic Mobility Difficult to move money across geographic boundaries Long live internet
  23. 23. Mathematically Controlled Supply Normal currencies are produced at the will of the legislative
  24. 24. Mathematically Controlled Supply Normal currencies are produced at the will of the legislative Bitcoin is controlled by an algorithm. And generated by a process called mining. There cannot be more than 21m bitcoins ever.
  25. 25. Bitcoin Today Is a mainstream currency with a total value of 8,822,045,700 USD and real atms in Canada and companies like Virgin Galantic, Shopify accepting them
  26. 26. Supply Chart
  27. 27. Is bitcoin real ? Yes. Bitcoin is real and interconvertible. Current Rate : $807 (yesterday’s price)
  28. 28. Bitcoin is open by design Nobody owns it Nobody controls it Anyone can take part in it And that’s why most government institutions/ finance dudes don’t like it
  29. 29. Bitcoin Bubble
  30. 30. $600 variation in 2 months 1. The currency is not mature 2. But bubble can be justified
  31. 31. Why Bubble ? 1. More mouses have started believing in the power of bitcoin 2. The bitcoin follows supply/ demand principle. More the demand, more is the price.
  32. 32. Bitcoin is not a bubble The value of a currency increases as the issuing authority becomes more powerful. The bitcoin issuing authority has gained sudden traction, hence the value of bitcoin has increased.
  33. 33. We are passing a milestone
  34. 34. Bitcoin Ecosystem aims to change finance as the internet changed publishing. And it is doing quite well as of now.
  35. 35. Stay Tuned protocol specification Thank you

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