1) Cryptocurrencies like Bitcoin present a new, decentralized way of transferring money internationally without fees or oversight from governments or banks. This could help solve problems like poverty and unemployment by enabling new forms of lending and funding for entrepreneurs. 2) Bitcoins work using cryptography and a public ledger called the blockchain to allow secure digital payments directly between individuals without middlemen. This bypasses traditional barriers to accessing funds that often prevent ideas from being realized or help from reaching those in need. 3) Several organizations are exploring ways to use Bitcoin and other cryptocurrencies to help address social issues like funding relief efforts during the Ebola crisis more efficiently and enabling the homeless to more easily accept donations.

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www.albany.edu/seed
/
Mentored by Professor Paul Miesing

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ABSTRACT
Traditional form of money involves bank fees and is controlled by the government. Though this financial
oversight is necessary to enable secure transactions the complexity has risen manifold. Most of the time this
complexity turns away a great idea from becoming a reality. Moreover, according to Businessweek, half of
the world doesn’t own a bank account and are happy with that. This makes lending money even more
difficult. Consequently, addressing societal problem becomes time consuming and difficult. With the rise of
mobile and internet, a new form of currency known as crypto currency is presenting a new, democratic way
of leveraging the power and reach of internet and mobile to solve poverty and unemployment. This
academic research paper will analyze the power of crypto currency specifically the Bitcoins to solve current
social issues by the growing breed of radical social entrepreneurs known as Bitpreneurs.

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With the advent of paper and coin currency, the need for presence of double coincidence of wants and difficulty
in storing wealth was eliminated. As the population grew, the money started growing too and the exchange of
goods became faster and efficient. However, this growth presented new challenges in form of adoptability,
control and regulations by the regional and national governments. Today, if a cash strapped entrepreneur has
a great idea to solve societal problems he/she has to resort to traditional money borrowing. This requires cash,
collateral and great credit. Most of the time lender goes through due diligence and tight scrutiny of the
borrower, making it difficult for all the borrowers to get funded simultaneously irrespective of their credit.
On the other hand, today’s ever growing network of smart phones, irrespective of nation’s wealth, has
presented the world with a new and exciting decentralized form of currency known as crypto currency. This
crypto currency is a digital medium of exchange that uses cryptography to secure the transactions and to control
the creation of new units. Bitcoin is first crypto currency founded in 2009. Peer coin, Lite coin and Prime coin
are the other leaders that have market capitalizations over $10 million. Not only are these coins decentralized
but also purely digital. Unlike modern fiat money, Bitcoin is not controlled or backed by any bank or central
government authority, like the Federal Reserve, for example. Moreover, it is exchanged directly between two
parties online with no middle man. This eliminates regulatory fees and makes it democratic.
In short, Bitcoins are pieces of computer code -- mathematical algorithms -- that represent monetary
units. There are currently approximately 11 million Bitcoins in existence. In all, only about 21 million Bitcoin will
ever be generated through the year 2140. Unlike credit card transactions, Bitcoin transactions, which take place
internationally every day, are irreversible; they can only be refunded by the person receiving the funds. While
Bitcoin users don’t have to divulge certain pieces of identifying information, like their bank account and Social
Security numbers or physical addresses, a traceable trail of each of transaction is left behind in a public log
known as the block chain. The public record prevents people from spending the same bitcoins more than once.
CRYPTOCURRENCY

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Bitcoin Vis-à-vis traditional currencies
Scarce? Convenient? Secure? Central backing?
Gold
Yes,
There is only so
much of it in the
earth.
No,
It’s very heavy.
Kind of,
Depending on where
you store it.
No, no single
authority owns gold.
US
Dollar
No,
The government
can print money,
which they often
do (inflation).
Yes,
Its lightweight
paper.
No, it can be
counterfeit.
Yes, the government
provides its full faith
and credit to the US
dollar.
Bitcoin
Yes,
Only ~21M bitcoins
will ever be
created. Yes, it’s digital.
Yes, it’s secured by
math puzzles that only
super computers can
solve.
No, like the internet,
it’s not owned or
controlled by any
single entity.

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Bitcoins are bought online using real analog money (U.S. dollars, Japanese yen, etc.) via Bitcoin exchanges and
private sellers. Some of the more popular Bitcoin exchanges include Bitstamp and Coinbase, though there are
dozens to choose from around the globe.
To start using it one has to simply install Bitcoin wallet on the computer or smartphone or use a web wallet in
the cloud. Some desktop Bitcoin wallets (also sometimes called clients) include Bitcoin-Qt, Armory, Electrum,
Hive, and MultiBit. Mobile Bitcoin wallets, like Bitcoin Wallet for Android, lets us use Bitcoin to pay for items in
physical stores that accept them by scanning a QR code or using NFC “tap to pay.” Web wallets, such as Coinbase
and Blockchain.info enables us to use Bitcoin from any browser or mobile device and often offer additional
services, like current Bitcoin prices, news and the ability to buy, use and accept the crypto currency.
Once signed up, the Bitcoin wallet provider generates your first Bitcoin address. You can then share these
addresses with friends and contacts for payments. Thousands of businesses throughout the world currently
accept Bitcoin as a form of payment. While once notorious as payment for illegal goods online, thousands of
reputable e-commerce businesses have started accepting BTC as payment, including Etsy vendors, Wordpress,
Overstock.com, Amazon.com and even PayPal. Larger brick and mortar retailers have started accepting Bitcoins
in their stores, including Kmart, Sears, Home Depot and CVS.
As of June 27, 2014, Albany, NY has been the home to first bitcoin ATM in New York State. Customers can insert
a $20 bill in the ATM. That money is converted into Bitcoin, at the current exchange rate and is placed into the
customer's digital wallet, which is located in cloud-based software or through a phone or tablet application. As
of 6:00 p.m. ET December 10, 2014, the currency was trading at $346.44, according to the Coin Desk Bitcoin
Price Index. Values often fluctuate wildly from day to day. Though bitcoins are relatively new, but they’re
growing at a breakneck pace. The Bitcoin market is worth approximately $7 billion at current market rates, with
millions of dollars of the digital currency being traded daily.
USING BITCOINS

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Unlike fiat money, no central authority controls the supply of Bitcoins. The currency is governed by an open
source code which dictates the rules governing the currency. The distributed nature of the system means there's
no master server to attack, so physically taking down the network would be arduous. This decentralized
architecture and freedom from third-party intermediaries is what insulates the system from unilateral control;
it's also what makes it problematic for governments to regulate it and open to competition.
Argentina may be the first to feel the Bitcoin constraint. It has a storied history of monetary dysfunction. In
2001, the government froze USD-denominated bank accounts and prohibited the purchase of dollars during
what became known as the Corralito. At the time, authorities had been inflating away the value of the peso and
had to resort to capital controls in order to stave off a flight to the dollar. Argentines, well versed in peso-crisis
management, have started dumping the currency. Besides fleeing to traditional safe havens like the dollar or
gold, they're also turning to Bitcoin with some success. Mercadolibre, Ebay's affiliate in Latin America, has begun
supporting Bitcoin transactions, which is no small thing considering the site has 49 million registered users.
In China, citizens already have experience with a digital currency called Q Coin. These online credits were issued
by the internet company Tencent to customers who traded in points earned via online gaming. The Q Coins
were then used to upgrade avatars and could be transferred between user accounts; from there they quickly
became a standard for black-market trade in real-world goods. The Chinese government eventually forced
Tencent to disable transfers between user accounts, but it's easy to see how a distributed system like Bitcoin
might fulfill the same function without giving authorities any central point of control to attack. And because
currency controls make it difficult for Chinese to access the hard currency needed to buy foreign products,
there's almost certainly pent-up demand for an alternative with Bitcoin's international reach.
Europeans may be another group ready to start taking Bitcoin seriously. In Greece, the capital saunter has finally
turned into full-fledged capital flight. Greeks fearing that their local deposits could be turned into drachma at
The Global Clout of Bitcoins

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any time have been sprinting to relocate their savings. If the situation continues to deteriorate both these
countries could be primed for a flight either to Bitcoin or at least through it on the way to safer currencies.
As a system for settlement, price volatility doesn't matter much. Buyers can acquire Bitcoins as needed to make
payment and sellers can, all in less than an hour, convert back to a local currency on the other end,. The short
time frame minimizes exposure to exchange rate volatility making the whole process faster and cheaper than
existing wire services. This means Bitcoin is already a useful tool for international funds transfer with the added
bonus of being able to duck those pesky capital controls. This usefulness as a payment and transfer platform is
what will drive wider, less speculative adoption, which is exactly what Bitcoin needs to reduce its volatility.
Years ago, information was controlled and distributed by single entities. This is why media conglomerates and
newspaper companies were so powerful. When we talk about how the internet disrupted those companies, we
are really saying that new protocols created the disruption. The protocols provided a way to send and receive
instantaneous information without anyone’s permission. The protocol behind Bitcoin is providing the same type
of disruption only instead of sending information without any third-party involvement, we are now able to send
money without any third-party involvement. In essence, we are democratizing money and rewriting the rules
for how commerce can be conducted. This creates a tremendous amount of opportunity. Naval Ravikant, CEO
of Angel List published a piece in Wired magazine about the future possibilities of Bitcoin:
“Just as the web democratized publishing and development, Bitcoin can democratize building new financial
services. Contracts can be entered into, verified, and enforced completely electronically, using any third-party
that you care to trust, or by the code itself. For free, within minutes, without possibility of forgery or revocation.
Any competent programmer has an API to cash, payments, escrow, wills, notaries, lotteries, dividends,
micropayments, subscriptions, crowdfunding, and more. While the traditional banks and credit card companies
lock down access to their payments infrastructure to a handful of trusted parties, Bitcoin is open to all.”
Disruptive Technology

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There is a growing ecosystem of legitimate Bitcoin companies -- many with investment funding -- and businesses
accepting Bitcoin as legal tender. Plug and Play Tech Center, an early investor in PayPal, is starting an accelerator
program exclusively for Bitcoin-related startups. Between April and June 2013, investors gave a total of $12
million to Bitcoin startups, according to research firm CB Insights. If anything, the pace of funding seems to be
accelerating. Light speed Venture Partners, working with its Chinese counterpart, just invested $5 million in BTC
China, the world's largest Bitcoin exchange.
The growing clout of businesses(digital as well as brick and mortar) accepting bitcoins and the ATMs is akin to
what Cars did to America and mobiles did to the world.
SOCIO-BUSINESS SIDE OF IT

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Rosetta Kargbo and her team delivering food Orphans near Waterloo receiving food / sanitary items
In an effort to assist during the Ebola crisis, Beam
developed the not-for-profit initiative - Bitcoin
against Ebola. It used the transfer technology to
allow anyone around the world to donate to
organizations and individuals, on the ground, fighting
Ebola in Sierra Leone.
By serving grass roots organizations such as Build on
Books, Beam helped empower local crisis workers
within the communities afflicted by the disease.
This is 20 year old Nsubugar Ronald studying Bachelors in accounting and
Finance. He lives in Makindye, Uganda. He gets money from his family in
US. It takes 2 days and 10% extra fees to transfer it through Western Union
or Moneygram.
Banks in Uganda can gulp 100 $ saved money in 5 months. As a result he
tried using bitcoins through Facebook. Not only did he get his money
instantly but also was able to convert it to Uganda Shillings with minimal
fees. Matter of the fact is it’s cheaper to buy a cell phone in India than to
own a bank account. So is the case in other developing countries like INDIA.

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Bit-Gov is an initiative by Bitpreneurs that enables citizens to vote on proposed legislation anywhere and
anytime, regardless of nationality. It aims to not only make it easy for people to understand legislation, but
also to express their opinions and join in the decision-making process.
Here’s how the technology works: Public opinion is gauged using algorithms to find the most significant
social media posts and the opinion leaders. We also provide policy makers with clear insights into the
sentiments of voters. The endgame is to create a platform for global governance without borders. Egypt’s
most successful example of using technology to watchdog government was the Mursi Meter.
Homelessness in extreme weather can be a curse. So while people think that it’s been taken care by charity
organizations and government alike, there are still substantial people who are homeless. In a developed
economy like USA, as of January 2012, nearly 633,782 people were homeless. Though the centralized
organizations are doing their part yet because of grants with strings attached, many organizations have their
hands tied by the state and this limits their ability to reach as many people in need. By diversifying the type
of funds that these homeless outreaches can collect, Bitcoin not Bombs (BnB) firm allows them to take
advantage of new and growing markets. With access to extra funding, the goals of any homeless outreach
can be expanded. BnB is a launching pad for NGOs and social entrepreneurs who wish to enter into the
financial freedom of the Bitcoin economy.
BnB is working to coordinate with existing homeless outreach organizations, such as the San Francisco
Community Clinic Consortium, Project Homeless Connect, the Bay Area Rescue Mission, and Food Not
Bombs, Pensacola, FL to help them decentralize the charity options in the Bitcoin ecosystem. Cooperation
between these organizations is helping them reach more people. Increasingly bitcoin is accepted by major
charities including the Red Cross.
SnapCard.io offered them a free merchant processing account with zero processing fees and a free tablet to
the homeless outreach centers in San Francisco, California. The offer from “SnapCards Integrate SF project”
is very compelling since for a new merchant or organization getting immediate conversion to USD to mitigate
the risk of volatility is critical for turning donations into care.

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Since he was 11, Jeremy Gardner has been determined to leave the world
better than he found it, harboring a dream of solving global warming
problem. The son of a leading expert in Confucianism, he discovered Sun
Tzu's The Art of War in high school and it came as a revelation.
Things flowed naturally from there: At Bard College, where he was an
honors student, he built his own major, political strategy -- blending
elements of political studies, economics, psychology and military
strategy. For the last of these, he obtained special permission to take
classes at West Point, the military academy.
In the fall of 2013, he joined the campaign of Maura Healey, who was
running for attorney general of Massachusetts. And that's where his life
plan went sideways. Although Gardner believed Healey was the best
candidate and deserved to win, he soon became frustrated with the role
of money in politics, with the sheer amount of time that has to be spent
raising funds rather than shaping policy, and he left.
For the first time in years, he didn't know what the future held. "There
was this void in my life, where I wondered how I was going to change the
world," he says. Bitcoin has filled that void. It is a technology that Gardner
believes could lead to the betterment of millions of lives. As a global
transaction network, it could be used for remittances -- the practice of
workers, usually recent immigrants, sending a portion of their pay back
home to their families in another country. Remittances are a $550 billion
industry, according to the World Bank. Established international money
transmitters Western Union and MoneyGram charge fees as high as 10
percent for some amounts and destinations. Many like Nsubugar Ronald
of Uganda will benefit from Jeremy Gardner’s work. Undoubtedly
Mexico, where remittances represent the first source of income will be
bitcoin’s biggest social and economic impact.

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With all its democratic, accountable and secure advantages, Bitcoins still isn’t free of challenges and pitfalls.
There’s a growing concern about it being used by criminals because of its ease of use. Moreover, the technology
is still in nascent stage, its valuation fluctuates and there is a built in deflation. The good news is that Bitpreneurs
are trying to address these concerns at a breakneck speed. Found in 2009, Bitcoins generated lot of concerns
from regulators. However regulators have now started looking at it favorably. In fact, Government
Accountability Office (GAO), which oversees Congressional spending and policies has formally asked US
Consumer Protection Agency to boost bitcoin oversight. However states differ in their oversight policy. In stark
contrast to states such as Texas, New York is considering a licensing system that would require bitcoin operators
to verify customers’ identities, maintain payment records and actively protect against cyber threats.
Another property of bitcoin, namely fungibility is concerning. Fungibility is the property of a good or commodity
whose individual units are capable of mutual substitution. For instance, one bitcoin is considered the same as
any other bitcoin when it comes to price and acceptance. Gold bullion has fungibility with identical degrees of
fineness or purity. Government paper cash has fungibility provided that the bills have not been marked or serial
numbers have not been 'blacklisted.' In other words, one cannot be held responsible for the historical path of
that banknote prior to its acceptance by you. In case of bitcoin no law establishes it is fungible. Wallets and
similar software technically handle bitcoins as equivalent, establishing the basic level of fungibility to bitcoin.
Researchers however point out that the history of every single bitcoin is registered and publicly available in the
block chain ledger, and that some users may refuse to accept bitcoins coming from controversial transactions,
which would harm their fungibility. Herein lies the controversy. Should one care where one’s money came from
and how does a monetary system cope with the resultant risk placed upon the bearer?
CONCERNS

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Voting is a fundamental requirement for a functioning democracy. It enables individuals to express opinions
on how they believe their country should be run and who should run it. This process can be an extremely
difficult task, especially in larger countries such as India, as collecting votes for millions of people is far from
simple.
The primary problem with the antiquated methods come down to a single fundamental issue, centralization.
Current voting methods require a large amount of human involvement, from poll workers, to vote counters,
to the companies and engineers that design the voting machines. Then you have the oversight groups who
employ individuals to oversee the election workers. Current voting methods are inefficient and expensive,
susceptible to fraud and manipulation, and need to be vastly improved. Bitcoin technology can provide us
with a new and improved voting system built from the ground up, a decentralized and secure alternative.
Through the concepts of game theory and cryptography, the Bitcoin protocol creates a financial incentive to
secure its network. The way this incentive is structured, it ensures that no single party can manipulate the
data that has been written into the ledger. This makes it superior to state sponsored alternatives, especially
in countries with a history of corruption, since the ruling government is unable to manipulate any voting
data stored on the ledger.
Electronic voting machines aim to reduce some of the inefficiencies and vulnerabilities of paper ballot voting
machines, but introduce a whole new set of issues. These machines are made by private corporations and
their source code is proprietary. Voters are forced to not only trust that the creators of the machine aren’t
malevolent but also that they have created a secure platform, not susceptible to outside tampering. In this
respect, the current class of electronic voting machines are actually a step backwards from paper ballots
because they are much easier to tamper with and manipulate on a large scale. Since current machines are
not inter-operable, with different companies running different software, it becomes a security and
compliance quagmire.
Bitcoin technology offers a fundamentally different approach to vote collection with its decentralized and
automated secure protocol. It solves the problems of both paper ballot and electronic voting machines,
enabling a cost effective, efficient, open system that is easily audited by both individual voters and the entire
community. Bitcoin technology can enable a system where every voter can verify that their vote was
counted, see votes for different candidates/issues cast in real time, and be sure that there is no fraud or
manipulation by election workers.

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We all know that demand is mostly inflexible -- when one’s kid is screaming for that Tickle-Me-Elmo, one’ll
buy it, even if it means that someone else's kid in Bangladesh is slightly more likely to die in a warehouse
fire as a result. Even when BP opened a gaping hole in the earth's mantle that was gushing a thick brown
liquid of death into the ocean, approximately nobody changed their driving habits. Most of the consumers
mostly do not care about social causes, as evidenced by the sad number of signatures on change.org for
even the worthiest petitions. And consumption is a terminal activity that starts and ends at the point of sale.
There is no leverage. How to change that? A radical social entrepreneur’s (RSE) idea might work here. What
is needed is a network effect, one by which a small group of cognoscenti can leverage their power and exert
a force on an even larger populace to do the right thing. Why not, instead of boycotting a company's
products, boycott their cash flow? For this, all that is needed is a currency that records where the money
has been. The idea is that, if someone hands one a dollar bill that he got from the Koch brothers, one could
say, with righteousness dripping from the voice, "Your money's no good here". That will certainly make
people think twice about working for companies that their first-hop social network does not approve. Sure,
one could work for Bechtel or the Carlisle group or Halliburton, and one could even get rich doing so, but
one would have to do all the shopping at Walmart. The quaint cafes would be inaccessible to that person.
This approach allows one to go beyond the first-hop neighborhood in the social graph, put leverage on third-
parties and enlist them to your cause. This, in a very real sense, is the opposite of a regular boycott, one
directed not at products but at cash. Whereas regular boycotts don't work because they're negative, product
oriented, devoid of network effects, and, most importantly, go counter to people's overwhelming urge to
buy things, a cash-boycott harnesses people's desire to buy things into a desire to act for the social good.
With Bitcoin this idea is completely feasible. Every Bitcoin already records every single transaction it has
been in, every single wallet it has passed through. All it takes to go from Bitcoin as it is today to a cash-
boycott is a registry that maps Bitcoin wallets to their owners in the real world.
Such a list is not hard to compile: many addresses are already public. For instance, the Bitcoin donation
address for virtual-notary.org is right on the web page itself.

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Us Trendy, an online fashion community is empowering independent designers by allowing them to get their
designs rated by consumers and see the light of the day. In the same veins, Akkera Dorsey - a budding
entrepreneur and a participant of SEED program – a joint venture between SEFCU and UAlbany is envisioning
her online community Next-Label. She’s vying for the coveted loan of up to $35,000 for her idea to see the
daylight. One of the idea she is toying with is the use of bitcoin incentive for consumers to like the design on
social sites like Pinterest. Moreover, she’s planning to use LinkedIn community to popularize the local
designer’s profile and leverage their network for benefitting the consumer’s taste.
Crypto currency like bitcoins can immensely help here. Since the nature of her business is digital, use
of bitcoins as financial incentive will not only be instantaneous but also free of fees. With PayPal accepting
bitcoins and majority of consumers already using PayPal, there is a high potential of easy integration.
Moreover, the goal of her business is democratizing fashion industry by empowering independent designers
and consumers alike. This is in tandem with the goal of Bitcoins – democratizing exchange of goods.
Take for example a lady consumer who is surfing Pinterest for fun. She comes across an interesting design
board and instinctively likes the design. What if she is awarded a bitcoin in return? This will immediately get
noticed by her friend list on Pinterest and other communities which her profile is linked to, thus growing the
network of likers based on bitcoin incentive. Since there’s no need to remember any numbers with bitcoins
like credit card or bank account it’s highly likely that a consumer will instinctively like without thinking. Also,
there’s no middlemen involved. The bitcoin gets deducted from designer’s wallet whose design is liked by
the consumer. The consumer’s wallet immediately gets credited with the bitcoin. Not only Pinterest but also
sites like LinkedIn can be leveraged to increase Next-Label’s business. Think of this: Every designer with a
LinkedIn profile has a count of liked and funded design. This is directly proportional to the bitcoins they own
thus providing the transparency in gauging the value of their design from consumer’s point of view.

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A former CRM Consultant and a finalist of NYBPC in social
entrepreneurship segment for Nanowater, Kavit Panchani has served
the IT industry for 9 years harboring a passion for social good.
Professor Paul Miesing is a renowned UAlbany professor of “Strategic
Management”, spearheading G3-“Going Globally Green” and SEED
internship.
Proposed in 2013, the Winkle Voss Bitcoin Trust was the first Bitcoin ETF to be filed with the Securities and
Exchange Commission (SEC), but the Bitcoin Investment Trust announced plans in early 2014 to release
a counter Bitcoin ETF. The latter is taking a different regulatory approach that does not require approval
from the SEC, and has projected a launch in the fourth quarter of 2014. When approved, its shares will be
issued at a price arrived at through a volume-weighted average of the Bitcoin price on leading Bitcoin
exchanges across the world. Anyone with access to a brokerage account will be able to purchase shares or
exercise other investment strategies made available by the brokerage. With this new index Winkdex in the
offing we can expect Bitcoin to,
 Fuel new, innovative micropayment-based online business models.
 Deeply integrate with traditional banking sector.
 Enable businesses to crowd source using their mobile phones.
 Increase entrepreneur’s outreach for funding.
 Distribute the wealth equally among humans.
 Enable Facebook in providing remittance, and person-to-person money transfer services.
The author would like to thank,
UAlbany for providing an opportunity to
participate in SEED internship.
Professor Paul Miesing for his expert
guidance and support.

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Bitcoin Control | http://mic.com/articles/41349/bitcoin-price-2013-could-bitcoin-destroy-government-control-of-currency
Bitcoin Basics | http://www.forbes.com/sites/danreich/2013/12/03/bitcoin-and-the-two-things-you-need-to-know/
Bitcoin not Bombs | http://www.bitcoinnotbombs.com/decentralize-all-the-homeless-outreach/
Grassroots Org | http://skollcentreblog.org/2014/12/02/how-bitcoin-empowers-grassroots-organizations-fighting-ebola/
Bitcoin not Bombs | http://www.bitcoinnotbombs.com/decentralize-all-the-homeless-outreach/
Oversight Policy | http://www.coindesk.com/us-consumer-finance-investigate-bitcoin/