2. Submitted to:
DR R.K CHAUHAN
Miss pooja mam
(assistance professor)
Submitted by :
Komal rani
Roll no: 43
Sec.: A(MCA 3rd)
21th NOV, 2018
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
3. CONTENT
Executive Summary
What is Bitcoin?
Who created bit coins?
How does the technology work?
The current uses of Bitcoin: An Introduction
Acquiring Bitcoin
Storing Bitcoin
Making Purchases with Bitcoin
Investing in Bitcoin
Bitcoin and the Dark Web
Bitcoin in Ireland
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
4. CONTENT
Bit Coins Compitition
Commidity:-bitcoin Vs Gold
Currency:-bitcoin Vs Fiat Money
Technology:network And Protocol
Implication
Implication In United States
Future
Pay And Show Proof Payment
Refrence
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
5. Bitcoin is in simple terms a digital currency. It was originally developed
in 2009 by a pseudonymous developer named Satoshi Nakamoto.
It is a decentralized peer to peer innovative payment network that is
powered by its users with no central authority, banks or middlemen.
Bitcoins are transferred directly from person to person via the internet
without the need to go through a bank or clearing house. This means
there are no transaction fees.
open source ,You can send, trade and purchase Bitcoins from your
computer, tablet, smartphone or other device to anyone in the world,
day or night.
EXECUTIVE SUMMARY
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
6. WHAT IS BITCOIN ?
DIGITAL MATH-
BASED ASSET
INTERNET
OF MONEY
DECENTRALIZED
LEDGER
PEER-TO-PEER
NETWORK
• Bitcoin is a peer-to-peer network that
maintains a public decentralized ledger of
digital math-based assets known as
bitcoins . The integrity of this ledger Is
backed and secured by a subnetwork of
computers (miners) who audit and archive
its transactions for a reward.
•
Their ownership cannot be changed within
the ledger without instructions from their
current owner that have been
cryptographically authenticated (digital
signatures) by a majority of nodes on the
Bitcoin network. In essence, “sending a
bitcoin” is sending instructions to the
network to make a change of custody in the
public ledger.
•
These attributes make the Bitcoin network
a financial network, or the “Internet of
Money”.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
7. WHO CREATEDBITCOIN?
JANUARY 3, 2009
Satoshi releases Bitcoin
source code and
software client to the
world.
2009-2010
Satoshi updates the source
code and writes hundreds of
posts totaling 80,000 words
(length of a novel).
APRIL 23, 2011
Satoshi vanishes from the
Internet after emailing a
developer saying he has
“moved onto other things”.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
8. From a user perspective, Bitcoin is nothing more than a
mobile app or computer programme that provides a personal
bitcoin wallet and allows a user to send and receive bitcoins
with them.
The Bitcoin website (2014) breaks the technology down into
three parts
Balances – the Block Chain
Transactions – Private Keys
Processing – Mining
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
9. Every transaction that occurs in the
Bitcoin economy is registered in a public,
distributed ledger, which is called a
BLOCK CHAIN.
Bitcoin protects against DOUBLE
SPENDING by verifying each transaction
added to the block chain to ensure that the
inputs for the transaction had not
previously been spent.
In essence, the global PEER-TO-PEER
NETWORK takes the place of the
intermediary (Ramzan, 2013)
In other words, the Bitcoin currency is
controlled by the consensus of the
market participants and to reiterate no
one person or one group controls the
Bitcoin network.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
10. Bitcoin.org (2014), “a transaction is
a transfer of value between Bitcoin
wallets that gets included in the block
chain”.
“The private key acts as a digital
signature during a transaction to verify
the identity of the Bitcoin user. The
signature also prevents the transaction
from being altered once it has been
issued”
So in summary the public and
private keys are designed to
protect the security of Bitcoin
users’ transactions.
public key and a private key, A
public key is a code you share with
people to receive money and
transfers. A private key is used to
protect Bitcoin user’s transactions.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
11. Originally, Bitcoin mining was
conducted on the CPUs of individual
computers, with more cores and greater
speed resulting in more profitability
Bitcoin generally started with individuals and small organizations mining. At
that time, start-up could be enabled by a single high-end gaming system. Now,
however, larger mining organizations might spend tens of thousands on one
high-performance, specialized computer.
In the malware world, one of the
more prevalent current threats is
mining botnet infections, in which
user systems mine for Bitcoin without
the owners' knowledge and funds are
channelled to the botnet master.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
12. 1 ACQUIRE BITCOINS
Essentially there are three different
ways to acquire Bitcoins (Dunn, 2013):
1) Buy (From a person or an
Exchange)
2) Barter (Sell product or service for
Bitcoins)
3) Mine (Run software to find
Bitcoins)
Most people will not have the
resources to set up as a merchant
selling products or services just to
acquire bitcoins. Similarly, mining
bitcoins requires expertise and very
expensive software. Buying is simplest
and there are two routes to acquiring
Bitcoins; to buy them from a person or
from an exchange.
2 STORING BITCOIN
Once you have Bitcoins you will need to store
them somewhere and there are normally four
types of Bitcoin wallet (Dunn, 2014):
1) Software on local hard drive
2) Mobile
3) Hosted Online
4) Paper
3 MAKING PURCHASES WITH BITCOIN
You can either spend Bitcoins or you can use
them as an investment. If spending, there are
a number of retailers that are accepting
Bitcoins both online and offline.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
13. 4. Bitcoin and the Criminal Underworld
the anonymous nature of Bitcoin transactions it has been adopted as the new
currency of the criminal underworld.
A detailed BBC documentary titled “Inside the Dark Web” highlighted how
criminals using Tor, free software for enabling online anonymity, and one of its
online anonymous marketplaces Silk Road were facilitating the sale and purchase
of drugs.
we need to examine how you can acquire Bitcoin and then what you can use Bitcoin for.
5. BITCOIN IN IRELAND:
In Ireland, the very first Bitcoin ATM arrived in late 2013 and is located in the
GSM solutions store in Upper Abbey Street in Dublin (Irish Bitcoin Foundation,
2014). The Irish Bitcoin foundation also provides a list of businesses that now
accept Bitcoin and these range from bakeries and takeaways to web design
companies (Irish Bitcoin Foundation, 2014).
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
14. BITCOIN COMPETITION: AN INTRODUCTION
Bitcoin is revolutionising two overlapping areas; traditional currency systems,
and online payment systems/trechnology. As a decentralised crypto-
currency, Bitcoin offers many advantages over traditional currencies.
COMMIDITY:-BITCOINS VS GOLD
CURRENCY :- BITCOINS VS FIAT MONEY
TECHNOLOGY:- ONLINE PAYMENT AND
BITCOIN
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
16. Scarce: The supply of bitcoin is more fixed
than the supply of gold. While gold can still
be found on earth and possibly mined on
asteroids, there will never be more than 21
million bitcoins minted.
Durable: Due to its decentralized and
distributed public ledger, Bitcoin could
survive a nuclear attack, whereas Ft. Knox
could not. Gold boils at 2,856°C (5,127°F),
while the temperature of a nuclear
explosion is
~100,000,000°C (~180,000,000°F) or 10x
the surface temperature of the sun.
Moreover, there are plans to launch a
Bitcoin node with the public ledger into
space via satellite.
Portable: Any amount of bitcoin can be
sent around the world instantly and for free
with a data connection. Gold is heavy, and
transporting large quantities requires
infrastructure (i.e., armored truck, bonded
guards) and customs declarations if cross-
border.
Divisible: A bitcoin can be divided into 100
million pieces. Gold must be smelted,
which is possible but not easy. Gold
cannot be divided into infinitesimal
amounts.
Authenticity Verification: A bitcoin is digital,
therefore, it must be identified in the public
ledger by software. Gold requires a trained
eye or chemical test.
Storage: Private keys that control bitcoin
ownership can be stored on paper, in your
brain (brain wallet) or on a USB stick.
Storing large quantities of gold requires
infrastructure (i.e., safe or vault).
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
17. Scarce Durable Portable Divisible Authenticity
Verification
Storage
Fiat
Bitcoin
YES
NEUTRAL
NO
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
18. Scarce: Bitcoin's supply is fixed at 21M;
fiat’s is not. Since 2008, the Fed has more
than tripled the U.S. Monetary Base with its
quantitative easing policies.
Durable: Bitcoins have been lost or stolen,
but never destroyed. Fiat currency can be
easily lost, stolen, or destroyed, however,
damaged bills can be replaced without
loss of value. With proper backup, bitcoins
can last forever.
Portable: Bitcoins are digital, therefore, any
amount can easily be transported over any
distance with an internet/data connection
for free. It is relatively easy to transport
cash up to a certain amount (i.e., wallet),
however, larger amounts can require
infrastructure (i.e., armored truck), customs
declarations for cross-border transportation
and/or instruments (i.e., debit/credit cards
and their fees).
Divisible: One bitcoin can be divided into
100 million pieces; the USD, for example,
is divisible into 100 pieces (i.e., penny).
Authenticity Verification: Bitcoins are digital,
therefore, they must be identified in the
public ledger by software; the USD is easily
identifiable by eye or chemical tests (i.e.,
markers).
Storage: Private keys that control bitcoin
ownership can be stored on paper, in your
brain (brain wallet) or on a USB stick. You
can only store a limited amount of fiat
before requiring infrastructure (i.e.,
mattress, bank vault).
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
19. net·work: a system of devices that are connected to each other.
Global
computer
network
INTERNET
Server-
based
network
AMAZON
Peer-
to-
peer
network
BITCOIN
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
22. • April 5, 1933- President Roosevelt signs
Executive Order 6012 “forbidding the hoarding
of gold coin, gold bullion and gold certificates
within the continental United States”.
• A bitcoin lives in a distributed public ledger and
is associated with a specific 256-bit private key,
the possession of which determines its
ownership.
• A private key can be stored in your memory (i.e.,
brain wallet), making it and the bitcoins
associated with it difficult to appropriate.
IMPLICATIONS:UNITED STATES
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
23. IMPLICATIONS:UNITED STATES
2008 - Global Financial
Crisis
•
• 2009-2014 - The U.S. Federal Reserve
more
triples the monetary base in five years.
• Outcome of these policies remains to be
seen.
• Bitcoin’s supply is fixed at 21MBTC.
St. Louis Adjusted Monetary
Base
100
0
200
0
300
0
400
0
0
1984 1988 1992 1996 2000 2003 2005 2007 2009
2011 2013
Reserves (US$
billion) US
Recession
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
24. FUTURE
Bitcoin should have a bright future such as the lack of
transaction fees, the ease of use and the support Bitcoin
has received both commercially and institutionally
there is also evidence to suggest that the future of
Bitcoin may be overshadowed by a lack of consumer
confidence, security issues and the fact that its
anonymity has been embraced by the criminal
underworld.
11/20/2018 KURUKSHETRA UNIVERSITY,KURUKSHETRA
