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Bitcoin

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  • 1. Bitcoin Double spending problem Transactions Conclusion Bitcoin Tejas Shembalkar Department of Information Technology, Shri Guru Gobind Singhji Institute of Engineering and Technology, Nanded IET, Present around the World, 2014 Tejas Shembalkar Bitcoin
  • 2. Bitcoin Double spending problem Transactions Conclusion Index 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 3. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 4. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? A decentralized digital currency like virtual cash or gold No bank or government prerequisites or control Notations: BTC, XBT, ฿ Tejas Shembalkar Bitcoin
  • 5. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? A decentralized digital currency like virtual cash or gold No bank or government prerequisites or control Notations: BTC, XBT, ฿ Tejas Shembalkar Bitcoin
  • 6. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? A decentralized digital currency like virtual cash or gold No bank or government prerequisites or control Notations: BTC, XBT, ฿ Tejas Shembalkar Bitcoin
  • 7. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Peer to peer network First Bitcoin issued in 2009 -Satoshi Nakamoto No requirement of third party intermediary Tejas Shembalkar Bitcoin
  • 8. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Peer to peer network First Bitcoin issued in 2009 -Satoshi Nakamoto No requirement of third party intermediary Tejas Shembalkar Bitcoin
  • 9. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Peer to peer network First Bitcoin issued in 2009 -Satoshi Nakamoto No requirement of third party intermediary Tejas Shembalkar Bitcoin
  • 10. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Limited to 21 million Bitcoins -X amount released every 10 minutes -until 2140 Divisible to .00000001 Very difficult and expensive to hack Controlled by consensus of market participants Tejas Shembalkar Bitcoin
  • 11. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Limited to 21 million Bitcoins -X amount released every 10 minutes -until 2140 Divisible to .00000001 Very difficult and expensive to hack Controlled by consensus of market participants Tejas Shembalkar Bitcoin
  • 12. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Limited to 21 million Bitcoins -X amount released every 10 minutes -until 2140 Divisible to .00000001 Very difficult and expensive to hack Controlled by consensus of market participants Tejas Shembalkar Bitcoin
  • 13. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Limited to 21 million Bitcoins -X amount released every 10 minutes -until 2140 Divisible to .00000001 Very difficult and expensive to hack Controlled by consensus of market participants Tejas Shembalkar Bitcoin
  • 14. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? What is Bitcoin? Limited to 21 million Bitcoins -X amount released every 10 minutes -until 2140 Divisible to .00000001 Very difficult and expensive to hack Controlled by consensus of market participants Tejas Shembalkar Bitcoin
  • 15. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 16. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why is it important? People don’t have access to banking services Flat currencies getting inflated by printing money Cross currency transfers are expensive Tejas Shembalkar Bitcoin
  • 17. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why is it important? People don’t have access to banking services Flat currencies getting inflated by printing money Cross currency transfers are expensive Tejas Shembalkar Bitcoin
  • 18. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why is it important? People don’t have access to banking services Flat currencies getting inflated by printing money Cross currency transfers are expensive Tejas Shembalkar Bitcoin
  • 19. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 20. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 21. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 22. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 23. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 24. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 25. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 26. Bitcoin Double spending problem Transactions Conclusion What is Bitcoin? Why is it Important? Why does it have value? Why does it have value? Limited/Scarce Decentralized Peer-to-peer Can be anonymous Transparent Easy to buy and sell Very low transaction fees Tejas Shembalkar Bitcoin
  • 27. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 28. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem Double spending problem Without a third party, digital money could be spent twice Digital cash-simply a computer file Same file can be sent to Charlie Tejas Shembalkar Bitcoin
  • 29. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 30. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem How does it solve this problem Distribute the necessary ledger among all the users of the system. Every transaction is registered in a public, distributed ledger, which is called the block chain. New transactions checked against the block chain. Ensure that the same bitcoins haven’t been previously spent Tejas Shembalkar Bitcoin
  • 31. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem How does it solve this problem Distribute the necessary ledger among all the users of the system. Every transaction is registered in a public, distributed ledger, which is called the block chain. New transactions checked against the block chain. Ensure that the same bitcoins haven’t been previously spent Tejas Shembalkar Bitcoin
  • 32. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem How does it solve this problem Distribute the necessary ledger among all the users of the system. Every transaction is registered in a public, distributed ledger, which is called the block chain. New transactions checked against the block chain. Ensure that the same bitcoins haven’t been previously spent Tejas Shembalkar Bitcoin
  • 33. Bitcoin Double spending problem Transactions Conclusion Double spending problem How bitcoin solves this problem How does it solve this problem Distribute the necessary ledger among all the users of the system. Every transaction is registered in a public, distributed ledger, which is called the block chain. New transactions checked against the block chain. Ensure that the same bitcoins haven’t been previously spent Tejas Shembalkar Bitcoin
  • 34. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 35. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How does it work? Money-deposited into a bank account Bitcoin-stored in public ledger Sending/receiving BTC as easy as sending an email Coins stored in wallets Tejas Shembalkar Bitcoin
  • 36. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How does it work? Money-deposited into a bank account Bitcoin-stored in public ledger Sending/receiving BTC as easy as sending an email Coins stored in wallets Tejas Shembalkar Bitcoin
  • 37. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How does it work? Money-deposited into a bank account Bitcoin-stored in public ledger Sending/receiving BTC as easy as sending an email Coins stored in wallets Tejas Shembalkar Bitcoin
  • 38. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How does it work? Money-deposited into a bank account Bitcoin-stored in public ledger Sending/receiving BTC as easy as sending an email Coins stored in wallets Tejas Shembalkar Bitcoin
  • 39. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How does it work? Each user is assigned two keys 1 Public Key- Account no / Address 27-34 alphanumeric characters 2 Private Key- Password to access bitcoins in the account. Public Key example 12kj2F35MB09Ida453reTYU6i730v Tejas Shembalkar Bitcoin
  • 40. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Wallet Tejas Shembalkar Bitcoin
  • 41. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Transactions Fact Bitcoin transactions are pseudonymous Tejas Shembalkar Bitcoin
  • 42. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 43. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How to buy Bitcoins? There are three ways 1 Currency exchange 2 Barter 3 Mine Tejas Shembalkar Bitcoin
  • 44. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins How to buy Bitcoins? Tejas Shembalkar Bitcoin
  • 45. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Outline 1 Bitcoin What is Bitcoin? Why is it Important? Why does it have value? 2 Double spending problem Double spending problem How bitcoin solves this problem 3 Transactions How does it work? How to buy Bitcoins? Earning profit using Bitcoins 4 Conclusion Tejas Shembalkar Bitcoin
  • 46. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Earning profit using Bitcoins 1 Mine, then sell 2 Invest or trade 3 Offer discounts in products /services for payment in BTC Tejas Shembalkar Bitcoin
  • 47. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Earning profit using Bitcoins 1 Mine, then sell 2 Invest or trade 3 Offer discounts in products /services for payment in BTC Tejas Shembalkar Bitcoin
  • 48. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Earning profit using Bitcoins 1 Mine, then sell 2 Invest or trade 3 Offer discounts in products /services for payment in BTC Tejas Shembalkar Bitcoin
  • 49. Bitcoin Double spending problem Transactions Conclusion How does it work? How to buy Bitcoins? Earning profit using Bitcoins Bitcoin Transaction Tejas Shembalkar Bitcoin
  • 50. Bitcoin Double spending problem Transactions Conclusion Challenges 1 Volatility. 2 Security breaches. 3 Criminal uses -Silk Road. 4 Not widely used. 5 Losing Your Wallet. Tejas Shembalkar Bitcoin
  • 51. Bitcoin Double spending problem Transactions Conclusion Conclusion Undoubtedly Bitcoin has changed the way transactions occur, now even the currency is virtual. There are many challenges that still remain unanswered, since bitcoin is not regulated by any bank, so in case you lose your computer or format your hard drive then all your bitcoins just vanish. Since no bank regulation is applied on the transactions, we still need a way to make it work in such a way that there are regulated transactions and no illegal activities such as Silk Road happen again. Tejas Shembalkar Bitcoin