Bitcoins
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Bitcoin is a digital currency that uses cryptography to secure transactions. Transactions are recorded on a public ledger called the blockchain. Users can transfer bitcoins to each other without going through a bank by using private keys to sign transactions. Some countries have banned bitcoin while others have no regulations yet. Businesses and individuals can use bitcoin to lower fees on international payments and gain visibility from new customers.
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Bitcoins
- 1. BITCOINS Made by-Drishesh Nair Presented to- Mrs. Divya chaudhary Prn-13021021035 Subject-Indian banking & financial system
- 2. INTRODUCTION • Bitcoin is a software-based online payment system described by Satoshi Nakamoto in 2008 and introduced as open-source software in 2009. Payments are recorded in a public ledger using its own unit of account, which is also called bitcoin. • Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.
- 3. Bitcoin for Individuals • Mobile payments made easy Bitcoin on mobiles allows you to pay with a simple two step scan-and-pay. No need to sign up, swipe your card, type a PIN, or sign anything. All you need to receive Bitcoin payments is to display the QR code in your Bitcoin wallet app and let your friend scan your mobile, or touch the two phones together. • Security and control over your money Bitcoin transactions are secured by military grade cryptography. Nobody can charge you money or make a payment on your behalf. So long as you take the required steps to protect your wallet, Bitcoin can give you control over your money and a strong level of protection against many types of fraud.
- 4. • Fast international payments Bitcoins can be transferred from Africa to Canada in 10 minutes. There is no bank to slow down the process, level outrageous fees, or freeze the transfer. You can pay your neighbours the same way as you can pay a member of your family in another country. • Protect your identity With Bitcoin, there is no credit card number that some malicious actor can collect in order to impersonate you. In fact, it is even possible to send a payment without revealing your identity, almost just like with physical money.
- 5. Bitcoin for Businesses • The lowest fees out there Bitcoin's high cryptographic security allows it to process transactions in a very efficient and inexpensive way. You can make and receive payments using the Bitcoin network with almost no fees. In most cases, fees are not strictly required but they are recommended for faster confirmation of your transaction. • Get some free visibility Bitcoin is an emerging market of new customers who are searching for ways to spend their bitcoins. Accepting them is a good way to get new customers and give your business some new visibility. Accepting a new payment method has often shown to be a clever practice for online businesses.
- 6. • Accounting transparency Many organizations are required to produce accounting documents about their activity. Using Bitcoin allows you to offer the highest level of transparency since you can provide information your members can use to verify your balances and transactions. Non-profit organizations can also allow the public to see how much they receive in donations.
- 7. How does Bitcoin work? • As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. • Balances - block chain The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.
- 8. • Transactions - private keys A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.
- 9. • Processing - mining Mining is a system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.
- 10. Legal status and regulation • China China restricted bitcoin exchange for local currency in December 2013.On 10 April 2014 the People’s Bank of China ordered banks and all third-party payment services to stop dealing with anyone in the bitcoin business. The ruling de-funds all Chinese bitcoin trading websites, as they will no longer have bank accounts in China. • India Digital or virtual currencies such as bitcoin have gained widespread acceptance in India. After the Reserve Bank of India warning in December 2013, a number of bitcoin operators shut shop. The actions of I-T (income-tax) department have sent tremors throughout the mainstream bitcoin community in India, if only for the reason that there is still no official regulation on how companies involved in dealing with digital currencies should comply with anti-money laundering and financial transaction laws.
- 11. • European Union In July 2014 the European Banking Authority advised European banks not to deal in virtual currencies such as bitcoin until a regulatory regime was in place. • Bolivia Bitcoin is banned by the Bolivian central bank.