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Bitcoin & The Sharing Economy - BDI 11/06 The Future of Financial Services Communications Summit

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Presentation: Bitcoin & The Sharing Economy

Presented by: Nikos Bentenitis, Chair, Education Committee, Bitcoin Foundation, and Founder, CoinSimple

Bitcoin is a digital currency and payment network that has attracted significant attention recently. In his talk, Nikos will briefly describe Bitcoin and a few potential applications of the technology in financial services. The purpose of the talk is to provide you with a framework that you can use to think about the Bitcoin technology in your business.

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Bitcoin & The Sharing Economy - BDI 11/06 The Future of Financial Services Communications Summit

  1. 1. Bitcoin & The Sharing Economy Nikos Bentenitis, PhD CoinSimple, Bitcoin Foundation
  2. 2. Bitcoin Decentralized Applications Contact
  3. 3. Bitcoin
  4. 4. What is Bitcoin? An open-source computer program that includes ▶ A peer-to-peer Internet protocol for the exchange of messages (transactions) ▶ A de-centralized programming language (transaction verification system) ▶ A de-centralized and public ledger for transactions (the block chain) secured by a de-centralized process (mining)
  5. 5. How can value be transfered with Bitcoin? ▶ The block chain does not hold balances, only transactions (check analogy) ▶ Transactions are denominated in Satoshis ▶ 1 bitcoin (BTC) = 100,000,000 Satoshis
  6. 6. Why do we need bitcoins for Bitcoin to work? ▶ Participants who do the most work (miners) need incentives ▶ Bitcoin ▶ is scarce: There will never be more than 21 million bitcoins ▶ is released over time with declining rate ▶ has no central issuing authority and it is distributed ▶ is based on a computer code that is open, transparent, tested and usable by anybody for any reason ▶ provides financial privacy ▶ carries no counter-party risk ▶ allows complete ownership of money (storage and transfer)
  7. 7. Application 1: Bitcoin as a currency Bitcoin is like other currencies ▶ It can be divided and combined seamlessly ▶ It can be traded for national currencies ▶ It is scarce and useful as a means of exchange
  8. 8. Application 2: Bitcoin as a payment network Bitcoin transactions are ▶ International ▶ Irreversible ▶ Have very low fees (about 0.0001 bitcoin) ▶ Independent of ▶ Banks ▶ SWIFT, SEPA and other inter-bank funding networks ▶ PayPal and other payment processors ▶ Western Union and other remitters
  9. 9. Decentralized Applications
  10. 10. Decentralized Applications are 1. Open-source computer programs 2. Autonomous, block chain-based 3. Self-sustaining 4. Consensus-based 5. Monetized with tokens
  11. 11. Growth of Decentralized Applications 1. White paper 2. Initial token distribution 3. Development-token distribution 4. Wider acceptance
  12. 12. Classification of DAs ▶ Type I: Bitcoin (has its own block chain) ▶ Type II: Counterparty, Mastercoin (needs Bitcoin for block chain) ▶ Type III: ComputeCoin (needs Counterparty or Mastercoin for tokens)
  13. 13. Possibilities ▶ Digital assets ▶ Derivatives, such as contract for differences ▶ Multisignature escrows ▶ Saving accounts ▶ Peer-to-peer gambling ▶ Decentralized exchanges ▶ Decentralized data storage ▶ Decentralized identity and reputation ▶ Bounties for solutions to computational problems. ▶ Autonomous agents
  14. 14. nikos@coinsimple.com Nikos Bentenitis

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