2. Bitcoin Quick Facts
• Decentralized digital currency
• P2P based Crypto-Currency
• Shorthand/Unit: BTC
• Bought and sold at a variable price against other currency
• Allows for fast transfer of value through Internet without
middlemen
• 21 million coins will ever exist
• ~5 million coins at present
• Divisible up to 0.00000001 or 10-8 of a BTC allowing for
micro-payments
3. How does it work?
• Bitcoins payments can be sent/received through websites and
softwares from/to “addresses” or “public keys”.
• The network confirms the transaction and store the
transaction log(blockchain) across the P2P network.
• The operators of bitcoin servers -- called “bitcoin miners”, cost
electrical power and CPU calculation for each transaction, get
mined(newly created) bitcoins and transaction fees in return.
• Through “mining”(transaction processing), the network
generate new bitcoins into the economy.
• The reward for solving a block is reducing over time and the
total bitcoin value will finally approach 21,000,000 BTC around
the year 2040.
4. How do users get bitcoins
• Accept bitcoins as payments
• Buy bitcoins on bitcoin exchanges or from other people
• Participate in a mining pool (Shared hardware)
• Solo mining (Owned hardware) and attempt to create a new
block(currently yield 25 bitcoins plus transaction fees)
5. For merchants
• Low fees
• No chargebacks
• No risk of fraud
• Point-of-Sale (POS) transactions
6. Financial
• Exchange
• In march 2013, 1BTC traded from
$40-$95.The monetary base of the
Bitcoin network stands at over $1
Billion USD.
• Major financia organization have
shown interest in the bitcoin markets.
• Hedge funds
• Exante Ltd., launched a bitcoin hedge
fund marketed towards institutional
investors and high net-worth individuals.
• Derivatives
• iCBIT offers futures contracts on bitcoins against multiple currencies.
• In April 2013, IG Group began to offer binary options on the price of
bitcoins at a given date.
7. Real world business for Bitcoin
• Largest & oldest Bitcoin Exchange:
• Mt.Gox
• Lending
• BTCJam, Peer to Peer Bitcoin Lending.
• Equities
• MPEX (info), Equities exchange.
• PicoStocks, Equities exchange.
• BTC-TC, Equities exchange.
• Options
• MPOE (info), Use bitcoins to buy and sell Bitcoin CALL and PUT option contracts.
• Futures
• ICBIT (info), Use bitcoins to buy and sell futures contracts for Gold, Crude (WTI), and the
BTC/USD.
• MPEx), Use bitcoins to buy and sell futures contracts for many commodities, indexes, and
more.
• Forex
• FNIB, professional level forex trading in USD, EUR and other currencies. Account opening and
settlement in BTC.
• LiteForex, deposit and withdraw bitcoins to your LiteForex account.
• Interest on Bitcoin
• Real Bitcoin Pays interest on bitcoins deposited.
