1. The document provides an overview of Bitcoin, including its origins, how it works as a decentralized digital currency, and some of its key features and advantages.
2. It discusses Bitcoin's theoretical underpinnings and compares it to traditional fiat currencies and commodities like gold. However, it notes that Bitcoin faces significant challenges from its volatility, lack of regulation, and theoretical shortcomings regarding use as a stable currency.
3. In conclusion, the document outlines both advantages and disadvantages of Bitcoin, questioning its independence and stability as a currency due to issues like its unregulated status, anonymity enabling tax evasion, and lack of a clear theoretical framework supporting its use as money.
Embark on an inspiring journey into the world of digital finance with this captivating PowerPoint presentation on the pioneer of cryptocurrency, Bitcoin. Be amazed when you discover the transformative power and game-changing capabilities of this groundbreaking innovation. Enter a world where traditional banking meets cutting-edge technology as we delve into the birth and evolution of Bitcoin. We shine a light on its enigmatic creator Satoshi Nakamoto, revealing the groundbreaking concept of blockchain that lies at the heart of this digital marvel. Enjoy the unparalleled benefits that Bitcoin has to offer. Free us from the control of financial intermediaries and experience first hand the decentralized nature where individuals have complete control over their own funds. Find out how Bitcoin implements unprecedented privacy and security measures to ensure every transaction is confidential and non-peeping. Feel the adrenaline rush as we uncover Bitcoin's incredible potential to revolutionize the global economy. Marvel at its ability to enable lightning-fast peer-to-peer transactions across borders, eliminate expensive intermediaries, and reduce transaction costs to a fraction of the traditional methods. Let's see how Bitcoin's limited supply and deflationary nature can protect us from the devastating effects of inflation and preserve our hard-earned wealth. As we continue our presentation, we'll delve into the myths surrounding Bitcoin, dispel skepticism, and shed light on doubts about its volatility. Gain a deeper understanding of the underlying factors driving Bitcoin market dynamics and separate fact from fiction. Be captivated by captivating imagery, captivating stories, and real-life success stories surrounding Bitcoin's rise to fame. See how early adopters became millionaires overnight and how multinationals are integrating this digital currency into their business processes. Witness the unstoppable momentum behind Bitcoin's global adoption as more individuals and businesses realize its intrinsic value. Join us on an exciting quest for cryptocurrency pioneer Bitcoin and witness the transformative power within. Get ready for an immersive experience that will captivate your audience and leave them hungry to learn more about this dynamic digital revolution.
What is Bitcoin and How is it related to Satoshi Nakamoto White Paper.pdfSuraj Sharma
Well the terms like bitcoin & block chain are being coined and referred to everywhere over the internet or over any investment or financial platform the reason being its increasing popularity and the mammoth returns that people have made by investing in these avenues.
Although the concept of bitcoin is known to many but still there are many that are confronted with this question that what is a bitcoin and how does it work? so, in this blog I have made a sincere effort to explain the same in the easiest of manner for you to understand this concept. So as we move ahead we will dive in this concept of What is Bitcoin? How is it related to White paper of Satoshi Nakamoto? to understand the basics of bitcoins and how would its future be like.
The term crypto currency is being coined everywhere due to its increased popularity worldwide, it is being looked at with great aspiration to park one’s money for a lucrative and manifold return. One can well imagine the return percentage on his/her investment in bitcoins by the fact that 1 bitcoin was worth $0 in 2009 and it now values at $55,353 (at the time of writing this article).
This means you could have been a millionaire or a billionaire if a reasonable investment was made in bitcoins in 2009 and was to be redeemed now.
Cryptocurrency- A Digital asset as a medium of exchange:
Crypto currency is a digital asset that is designed in such a manner that it offers the benefits of a medium of exchange like any other currency, so you can buy any item in exchange of these digital assets that you possess from the seller that accepts these forms of payments.
These digital assets are stored in computerized databases as they do not exist in physical form, using strong cryptography to secure the transaction records.
Decentralized Cryptocurrency Explained in Easy:
Whenever these digital currencies are minted, mined or created by the originator , the process is said to have exercised a centralized control, however when these are further disseminated to larger groups a decentralized control is said to have exercised. Each cryptocurrency functions through a distributed ledger technology that is typically known as block chain technology that serves as a public financial transaction database.
Although there are several other Cryptocurrencies that exist in the digital world and they too have offered good returns over a period of time, but the major issue involved in these digital currencies is that they are not backed by any of the apex bank of any country nor do they are traded in any banking channel.
Usually these digital currencies or cryptocurrencies that are not backed by any government or banking channel have no intrinsic value and nor do they will have in future.
Their values are derived purely on the basis of market forces of demand and supply and are a private fiat money. The market of these digital assets is highly volatile and have no capping on their price increase or decrease.
Unlock the secrets of profiting from the cryptocurrency revolution with "Bitcoin Explosion: Don't Miss Out on the Gold Rush!" This comprehensive eBook is your ultimate guide to understanding, investing in, and profiting from Bitcoin and the exciting world of cryptocurrencies.
Are you intrigued by the rise of Bitcoin and want to seize the opportunities it offers? Whether you're a novice looking to get started or an experienced trader seeking advanced strategies, this eBook has you covered.
Embark on an inspiring journey into the world of digital finance with this captivating PowerPoint presentation on the pioneer of cryptocurrency, Bitcoin. Be amazed when you discover the transformative power and game-changing capabilities of this groundbreaking innovation. Enter a world where traditional banking meets cutting-edge technology as we delve into the birth and evolution of Bitcoin. We shine a light on its enigmatic creator Satoshi Nakamoto, revealing the groundbreaking concept of blockchain that lies at the heart of this digital marvel. Enjoy the unparalleled benefits that Bitcoin has to offer. Free us from the control of financial intermediaries and experience first hand the decentralized nature where individuals have complete control over their own funds. Find out how Bitcoin implements unprecedented privacy and security measures to ensure every transaction is confidential and non-peeping. Feel the adrenaline rush as we uncover Bitcoin's incredible potential to revolutionize the global economy. Marvel at its ability to enable lightning-fast peer-to-peer transactions across borders, eliminate expensive intermediaries, and reduce transaction costs to a fraction of the traditional methods. Let's see how Bitcoin's limited supply and deflationary nature can protect us from the devastating effects of inflation and preserve our hard-earned wealth. As we continue our presentation, we'll delve into the myths surrounding Bitcoin, dispel skepticism, and shed light on doubts about its volatility. Gain a deeper understanding of the underlying factors driving Bitcoin market dynamics and separate fact from fiction. Be captivated by captivating imagery, captivating stories, and real-life success stories surrounding Bitcoin's rise to fame. See how early adopters became millionaires overnight and how multinationals are integrating this digital currency into their business processes. Witness the unstoppable momentum behind Bitcoin's global adoption as more individuals and businesses realize its intrinsic value. Join us on an exciting quest for cryptocurrency pioneer Bitcoin and witness the transformative power within. Get ready for an immersive experience that will captivate your audience and leave them hungry to learn more about this dynamic digital revolution.
What is Bitcoin and How is it related to Satoshi Nakamoto White Paper.pdfSuraj Sharma
Well the terms like bitcoin & block chain are being coined and referred to everywhere over the internet or over any investment or financial platform the reason being its increasing popularity and the mammoth returns that people have made by investing in these avenues.
Although the concept of bitcoin is known to many but still there are many that are confronted with this question that what is a bitcoin and how does it work? so, in this blog I have made a sincere effort to explain the same in the easiest of manner for you to understand this concept. So as we move ahead we will dive in this concept of What is Bitcoin? How is it related to White paper of Satoshi Nakamoto? to understand the basics of bitcoins and how would its future be like.
The term crypto currency is being coined everywhere due to its increased popularity worldwide, it is being looked at with great aspiration to park one’s money for a lucrative and manifold return. One can well imagine the return percentage on his/her investment in bitcoins by the fact that 1 bitcoin was worth $0 in 2009 and it now values at $55,353 (at the time of writing this article).
This means you could have been a millionaire or a billionaire if a reasonable investment was made in bitcoins in 2009 and was to be redeemed now.
Cryptocurrency- A Digital asset as a medium of exchange:
Crypto currency is a digital asset that is designed in such a manner that it offers the benefits of a medium of exchange like any other currency, so you can buy any item in exchange of these digital assets that you possess from the seller that accepts these forms of payments.
These digital assets are stored in computerized databases as they do not exist in physical form, using strong cryptography to secure the transaction records.
Decentralized Cryptocurrency Explained in Easy:
Whenever these digital currencies are minted, mined or created by the originator , the process is said to have exercised a centralized control, however when these are further disseminated to larger groups a decentralized control is said to have exercised. Each cryptocurrency functions through a distributed ledger technology that is typically known as block chain technology that serves as a public financial transaction database.
Although there are several other Cryptocurrencies that exist in the digital world and they too have offered good returns over a period of time, but the major issue involved in these digital currencies is that they are not backed by any of the apex bank of any country nor do they are traded in any banking channel.
Usually these digital currencies or cryptocurrencies that are not backed by any government or banking channel have no intrinsic value and nor do they will have in future.
Their values are derived purely on the basis of market forces of demand and supply and are a private fiat money. The market of these digital assets is highly volatile and have no capping on their price increase or decrease.
Unlock the secrets of profiting from the cryptocurrency revolution with "Bitcoin Explosion: Don't Miss Out on the Gold Rush!" This comprehensive eBook is your ultimate guide to understanding, investing in, and profiting from Bitcoin and the exciting world of cryptocurrencies.
Are you intrigued by the rise of Bitcoin and want to seize the opportunities it offers? Whether you're a novice looking to get started or an experienced trader seeking advanced strategies, this eBook has you covered.
Among the learning objectives:
A. Crypto-currencies :
• The definition, history and evolution of the thousands of
crypto-currencies in the market, with their pros and
cons.
• Getting, mining and trading using cryptocurrencies.
• The legal status of this new technology in Lebanon and
different countries of the world.
• The possible future of crypto-currencies.
B. Blockchain :
• The technology behind crypto-currencies : concepts,
history, security, pros and cons.
• Examples and case studies of Blockchain applications.
C. ICOs :
• A new way for raising capital for companies and start-
ups.
• History and ICO phases.
Bitcoin price today BTC to USD market cap.pdfFranck La Rocca
As of 4:11 p.m., the price of Bitcoin is $16,171.30, changing -2.19% from the previous day. The market capitalization of the tokens was $310,785,787,847.95 after the recent fluctuations in the price of bitcoin. Bitcoin has had a shift of -65.00% so far this year. According to the CoinDesks Digital Asset Classification Standard, Bitcoin is categorized as a currency (DACS).
Here is the Bitcoin Report. The report involves every aspect of Bitcoin that one need to understand Bitcoin from scratch. Following are the contents that are being covered by the report:-
· Abstract
· Introduction
· History and its Creation
· Working of Bitcoin
· Advantages
· Disadvantages
· Challenges to Bitcoin
· Scope of Bitcoin
· Conclusion
Hope this will help
This e-book is a comprehensive guide to crypto-quantum, the revolutionary technology that enables secure communication, data storage, and authentication. It provides an in-depth look at the cryptographic algorithms that make crypto-quantum secure, and how they can be used in a variety of applications. It also covers the basics of quantum computing and its implications for the future of cryptography. With the help of this e-book, you can gain the knowledge and skills to apply this emerging technology to your own projects.
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
Bitcoin 101: The Currency, The Network, The CommunityEarthsite
Bitcoin and the underlying technology of cryptocurrency is poised to revolutionize the world of banking and financial equity. Can Bitcoin make it through the volatile startup years and be adopted as a global currency? With an estimated 50,000 businesses now accepting Bitcoin and more than $100 million in venture capital investments, 2014 could be the tipping point for this new form of value exchange.
In this introductory presentation, you'll learn what Bitcoin is, why the technology is revolutionary and how you can get involved in the community. Find out how businesses can save 2-3% on credit card fees and have instant access to a global market. Discover how digital currencies are supporting thriving local economies. Don't miss this opportunity to educate yourself on the fundamentals of Bitcoin and see how you and your business will benefit.
Bitcoin is a decentralized electronic cash system using peer-to-peer networking to enable payments between parties without relying on mutual trust. It was first described in a paper by Satoshi Nakamoto (widely presumed to be a pseudonym) in 2008. Payments are made in bitcoins (BTC's), which are digital coins issued and transferred by the Bitcoin network.
Among the learning objectives:
A. Crypto-currencies :
• The definition, history and evolution of the thousands of
crypto-currencies in the market, with their pros and
cons.
• Getting, mining and trading using cryptocurrencies.
• The legal status of this new technology in Lebanon and
different countries of the world.
• The possible future of crypto-currencies.
B. Blockchain :
• The technology behind crypto-currencies : concepts,
history, security, pros and cons.
• Examples and case studies of Blockchain applications.
C. ICOs :
• A new way for raising capital for companies and start-
ups.
• History and ICO phases.
Bitcoin price today BTC to USD market cap.pdfFranck La Rocca
As of 4:11 p.m., the price of Bitcoin is $16,171.30, changing -2.19% from the previous day. The market capitalization of the tokens was $310,785,787,847.95 after the recent fluctuations in the price of bitcoin. Bitcoin has had a shift of -65.00% so far this year. According to the CoinDesks Digital Asset Classification Standard, Bitcoin is categorized as a currency (DACS).
Here is the Bitcoin Report. The report involves every aspect of Bitcoin that one need to understand Bitcoin from scratch. Following are the contents that are being covered by the report:-
· Abstract
· Introduction
· History and its Creation
· Working of Bitcoin
· Advantages
· Disadvantages
· Challenges to Bitcoin
· Scope of Bitcoin
· Conclusion
Hope this will help
This e-book is a comprehensive guide to crypto-quantum, the revolutionary technology that enables secure communication, data storage, and authentication. It provides an in-depth look at the cryptographic algorithms that make crypto-quantum secure, and how they can be used in a variety of applications. It also covers the basics of quantum computing and its implications for the future of cryptography. With the help of this e-book, you can gain the knowledge and skills to apply this emerging technology to your own projects.
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
Bitcoin 101: The Currency, The Network, The CommunityEarthsite
Bitcoin and the underlying technology of cryptocurrency is poised to revolutionize the world of banking and financial equity. Can Bitcoin make it through the volatile startup years and be adopted as a global currency? With an estimated 50,000 businesses now accepting Bitcoin and more than $100 million in venture capital investments, 2014 could be the tipping point for this new form of value exchange.
In this introductory presentation, you'll learn what Bitcoin is, why the technology is revolutionary and how you can get involved in the community. Find out how businesses can save 2-3% on credit card fees and have instant access to a global market. Discover how digital currencies are supporting thriving local economies. Don't miss this opportunity to educate yourself on the fundamentals of Bitcoin and see how you and your business will benefit.
Bitcoin is a decentralized electronic cash system using peer-to-peer networking to enable payments between parties without relying on mutual trust. It was first described in a paper by Satoshi Nakamoto (widely presumed to be a pseudonym) in 2008. Payments are made in bitcoins (BTC's), which are digital coins issued and transferred by the Bitcoin network.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
MATATAG CURRICULUM: ASSESSING THE READINESS OF ELEM. PUBLIC SCHOOL TEACHERS I...NelTorrente
In this research, it concludes that while the readiness of teachers in Caloocan City to implement the MATATAG Curriculum is generally positive, targeted efforts in professional development, resource distribution, support networks, and comprehensive preparation can address the existing gaps and ensure successful curriculum implementation.
Thinking of getting a dog? Be aware that breeds like Pit Bulls, Rottweilers, and German Shepherds can be loyal and dangerous. Proper training and socialization are crucial to preventing aggressive behaviors. Ensure safety by understanding their needs and always supervising interactions. Stay safe, and enjoy your furry friends!
Safalta Digital marketing institute in Noida, provide complete applications that encompass a huge range of virtual advertising and marketing additives, which includes search engine optimization, virtual communication advertising, pay-per-click on marketing, content material advertising, internet analytics, and greater. These university courses are designed for students who possess a comprehensive understanding of virtual marketing strategies and attributes.Safalta Digital Marketing Institute in Noida is a first choice for young individuals or students who are looking to start their careers in the field of digital advertising. The institute gives specialized courses designed and certification.
for beginners, providing thorough training in areas such as SEO, digital communication marketing, and PPC training in Noida. After finishing the program, students receive the certifications recognised by top different universitie, setting a strong foundation for a successful career in digital marketing.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
How to Add Chatter in the odoo 17 ERP ModuleCeline George
In Odoo, the chatter is like a chat tool that helps you work together on records. You can leave notes and track things, making it easier to talk with your team and partners. Inside chatter, all communication history, activity, and changes will be displayed.
Normal Labour/ Stages of Labour/ Mechanism of LabourWasim Ak
Normal labor is also termed spontaneous labor, defined as the natural physiological process through which the fetus, placenta, and membranes are expelled from the uterus through the birth canal at term (37 to 42 weeks
1. To BIT or not to BID?
(Theoretical and practical analysis of virtual currencies in case of Bitcoin)
How Bit Coin Works???
Dr.S.HARIHARA GOPALAN
2. What is Bitcoin?
(Introduction)
• Bitcoin is 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 (Bitcoin).
• It is a form of digital currency (physical form is absent), created and
held electronically. It can be used to buy things electronically and in
that sense it is no different than conventional dollars.
• Bitcoin is commonly referred to as cryptocurrency and it can be
divided into smaller unit called Satoshi (one hundred milionth of a BTC).
2
3. • System is runned by The Bitcoin protocol
• It is based on mathematics unlike conventional currencies that had been
based on fixed quantity of metal (gold, silver…) or fiat currencies.
• Bitcoin has several features that set it apart from fiat currencies:
1. It is decentralized
2. It is easy to set up and it is fast
3. It is anonymous
4. It is completely transparent
5. Transaction fees are miniscule
6. Transactions are irreversible
3
What is it based on?
(coindesk.com)
4. • Base for the Bitcoin protocol is a peer-to-peer
system which means that there is no need for
a third party.
• Therefore, in theory, bitcoin network is not controled by central
authority (fully decentralized monetary system).
• Bitcoins are being created by a community of people that anyone can
join.
• In theory, there is no authority (financial institution) which can tinker
with monetary policy and in that sense devalue or revalue Bitcoin
currency.
4
1. It’s decentralized
5. • Bitcoins are stored in wallet with digital credentials for your bitcoin
holdings and allows you to access them.
• Wallet uses public-key cryptography, in which two keys, one public and one
private are generated. Public key can be thought of as an account number
or name and the private key, ownership credentials.
• Bitcoin is transferred to the next owner when the next owner gives a public
key and previous owner uses his private key to publish a record into system
announcing that the ownership has changed to the new public key.
• Bitcoin protocol stores details of every single transaction that occurred in
the network in huge version of general ledger (Block chain).
5
2. It’s anonymus and transparent
6. • Bitcoin doesn’t charge fees for either national or international
transfers.
• Bitcoin is not the first private money, not the first digital currency, and
not first currency based on cryptography, but it has been the first to
rely on peer to peer network decentralization to avoid double
spending.
• 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 already been spent.
6
3. Negligible fees and irreversible process
7. How are Bitcoins created - Mining process
7
• Miners use special software to solve math problems (Bitcoin algorithm),
and upon completing the task they receive certain amount of coins.
• They are created each time a user discovers new block (finds hash value).
• Software is creating new units until it reaches amount of 21
million unites (currency with Finite Supply).
• The rate of block creation is approximately consistant
over time (6 per hour) with 50 % reduction every four years.
• Halving (in theory) continues until 2110-2140 when
21 million BTC have been issued.
8. Total bitcoin unit supply over time
(Projection)
8
Period
Number
of
units
in
circulation
data source: bitcoin.it
9. How can one obtain Bitcoins?
1. Earn Bitcoins from mining
2. Earn Bitcoins by accepting them as a means of payment
(Time magazine: „All transactions using digital or alternative currencies had been termed illegal)
3. Earn Bitcoins trough trading
4. Earn Bitcoins as a regular income
5. Earn Bitcoin from interest payments
6. Various ways (donations, gambling, getting tipped, completing tasks on
websites...)
9
10. 10
Why price of bitcoins soared and why it became
the world pionner in virtual currency field?
data source: quandl.com and bundesbank.de, own calculations
11. • Financial crisis that caused meltdown of the economy started 2008-2009.
• It caused a transfer of assets form real-estate and financial sphere to investment
into commodities that are traditionally considered as a stable store of values.
• Historically, Gold is best known commodity of that type because quantity of this
metal is limited and, therefore, it is great way how to hedge your portfolio in
times when usage of expansive monetary policy is highly likely.
• In this sense, bitcoin is similar to gold (except there is no intrinsic value) and
when the value of gold started to decrease due to the price roof that it had
reached and partial recovery of financial market, value of bitcoin soared because
it was cleverly designed financial product with finite quantity.
11
Why price of bitcoins soared and why it
became the world pionner in virtual currency field?
12. 1. Illegal activities, speculations and nature of this currency,
2. Theoretical base for digital currency usage,
3. Regulation and taxation issue,
4. Disputable status of independent and
decentralized currency,
5. Mining problems,
6. Skepticism towards implementation
of new, unregulated, theologies in
finance sphere.
12
Theoretical and tehnical problems which
goes against favour of bitcoin usage:
13. Illegal activities, speculations and nature of bitcoin currency
• Can currency be anonymous and transparent at the same time? (Slide 5)
• Why would somebody give you approximately 27,000 $ for solving impractical
mathematical equations?
• According to Forbes (2014.), currently, more than 90 percent of bitcoin accounts are
in a buy-and-hold mode!
„At some point in the growth of a boom all aspects of property ownership
become irrelevant except the prospect for an early rise in price. Income
from the property, or enjoyment of its use, or even its long-run worth is now
academic.”
J. K. Galbraith (The Great Crash 1929.)
13
14. Brief history of bitcoin commodity
Source: selected data available at historyofbitcoin.org
14
Date Event
2007 Satoshi began working on the Bitcoin concept
18.8.2008 Bitcoin is registered
3.1.2009 The Genesis Block is mined
12.1.2009 First Bitcoin transaction
5.10.2009 An exchange rate is established
6.2.2010 A currency exchange is born
17.7.2010 MtGox is established
15.8.2010
A vulnerability in the system is discovered and
exploited, resulting in the generation of 184 billion Bitcoins
18.9.2010 First collective mining starts
29.9.2010 Another exploit discovered
28.10.2010 First ever short sale
9.12.2010 First call option contract sold
2011 Silk Road opens for business
28.1.2011 25% of total Bitcoins generated
9.2.2011 Bitcoin reaches parity with USD (1:1)
12.4.2011 First put option sold
15. 15
Brief history of bitcoin commodity
Source: selected data available at historyofbitcoin.org
Date Event
12.6.2011 The Great Bubble of 2011
13.7.2011 25,000 BTC theft reported
19.7.2011 Major breach at MtGox
26.7.2011 Bitomat (Poland) loses 17,000 Bitcoins
5.8.2011 MyBitcoin loses 150,000 Bitcoins
6.9.2011 Creation of physical Bitcoins
13.2.2012 Second largest Bitcoin exchange shuts down
1.3.2012 Linode hacked 46,000 BTC stolen
9.5.2012 FBI report on Bitcoin leaked
11.5.2012 Bitcoinica hacked (18,000 BTC)
3.9.2012 Bitfloor hacked (24,000 BTC)
24.9.2012
Bitcoin Savings and Trust investigated for
running Ponzi scheme
8.3.2013 BitInstant hacked (12,000 $)
11.3.2013 Glitch causes halt in transactions
28.3.2013 Market cap reaches $ 1 billion
1.4.2013 Bitcoin surpasses $100
20.4.2013 Bitcoin Central is hacked
1.5.2013
Gaming company caught secretly mining
Bitcoins from customer computers
16. 16
Brief history of bitcoin commodity
Source: selected data available at historyofbitcoin.org
Date Event
2.5.2013 First Bitcoin ATM (San Diego)
14.5.2013 MtGox funds seized by Homeland
18.5.2013 Online casino that accepts Bitcoin is founded
23.5.2013 Bitcoin central gets hacked
1.6.2013 Winklevoss Bitcoin Trust filed
6.8.2013 Bitcoin ruled currency by Texas judge
12.8.2013 22 Bitcoin companies subpoenaed
20.8.2013 Bitcoin ruled private money in Germany
2.10.2013
FBI shuts down Silk Road
(3.6 milllion USD seized)
2.10.2013 BitcoinTalk.org hacked
31.10.2013 BitMarket.eu closes the doors
13.11.2013
Senate hearing of potential Bitcoin
risks and threats
19.11.2013 Bitcoin goes above $ 1000
2.12.2013
96,000 Bitcoins are stolen from
Sheep Marketplace
5.12.2013 China bans Bitcoin transactions
26.1.2014
BitInstant CEO charged with
money laundering
12.09.2014 First bitcoin swap approved
17. • Money is commodity that has a status of universal equivalent in trade.
• Money functions:
• Schlichter, D. (2011): „All additional functions that can be assigned to
money are the result of money being the accepted medium of exchange.”
17
Conventional money theory
(simplified)
1. Medium of Exchange 2. Store of Value 3. Unit of Account
Gold *** **** ***
Fiat currencies ***** *** ***
Cryptocurrencies **** ??? ???
18. Money circulation
18
M x V = P x Q
• M – total amount of money in circulation
• V – velocity of money
• P – price level
• Q – indeks of real value of final expenditures
• Bitcoin as currency increases amount of money and hence leads to increasing price
levels (V and Q constant).
• Since bitcoin is inherently deflationary it will benefit in a way that its usage will
cause value decline of other currencies while bitcoin will experience rise.
19. • Theoretical background for bitcoin currency can be
found within Hayek’s work „Denationalization of
money, free banking and inflation targeting” 1977.
(Claim of bitcoin advocates).
• Hayek claims that the government should be depived of its monopol
to issue of money.
• Central argument is that a price level stability can be achieved only by
removing national governments of their monopoly to create money.
19
Theoretical background?
20. • Hayek suggests that allowing private enterprise to supply public
with other media of exchange is a solution to monopoly problem,
and that we need a free market with concurrent currencies.
• In his model, creation of money would be under control of private banks and
they would supply the market with various types of currencies, therefore,
creating competitiveness.
• In order to acchieve price stability every bank should tie its liabilities to certain
basket of commodities for keeping its rate of change in-line with its promises.
• This theory faces strong objections which can be the subject of another
lecture, but for now the important fact is that Hayek’s theory is not
appropriate in case of bitcoin.
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BASED ON FOLLOWING ARGUMENTS, WE WILL CONCLUDE THAT
THERE IS NO ECONOMIC THEORY THAT WOULD APPROVE AND
EXPLAIN USAGE OF BITCOIN CURRENCY
21. USD/Bitcoin Weighted Price (Volatility analysis)
21
Source: quandl.com
China restricted Bitcoin
exchange for local RMB
Russia defined Bitcoin
as dubios activity
MtGox filed for bankrupcy
(theft of 477 million USD in
BTC)
Soaring caused by wide
acceptance of Bitcoin
22. Volatility dilemma
• How to achieve price stability with inelastic fixed supply of bitcoins?
22
Source: Ametrano, F. M. 2014. „Hayek Money” p. 19
23. Volatility dilemma solution
• If obtaining price stability is main target supply of bitcoin should be
adjusted (fixed) to the price of goods.
• The monetary base increment should be distributed pro-quota to every
digital wallet, without unfair wealth distribution.
• It is farly easy to achieve ballance if we consider only one good in a model,
however, if monetary policy targets commodity price stability as basket of
goods, implementation is becoming complicated!
• What if a price of good decreases and amount of coins in wallet is not big
enough to adjust falling price?
• It also implies that final quantity of bitcoins is changing which is
contradictory to the main concept.
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24. • Unknown issuer
• Currency (Bank) Runs and
absence of deposit insurance
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Other dilemmas
• Bitcoin nature as a global
phenomenon
• Physical currency as a necessity
• Deflationary spiral problem
25. • There are three ways how bitcoin generate income:
1. Since value of a bitcoin fluctuates, one can generate net income selling them
at the higher price than the original purrchase price (capital gains taxation).
2. If they are received by merchants sa payment for goods and services.
3. Bitcoins obtained through mining activities are a subject of standard income
taxation.
• Can a country have an adequate taxation program if regulatory framework is not
defined and if status of „currency or commodity”
is unknown?
• If take the anonymity of bitcoin into account then
one can simply deduct that tax evasion is not only
feasible but inevitable.
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26. Does statement that bitcoin is independent and
decentralized currency holds water?
• Independence is defined as freedom from
the control, influence…
• As long as bitcoin is a part of the society, it cannot
be independent because a simple ban from one
relevant country can cause collapse of the currency.
• What will happen when a bitcoin will eventually
confront the full weight of the regulatory state?
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27. 5. Mining problems
• Using computing power of third parties to achieve faster mining
performance (without knowledge and consent of the third party)
• Distributed Denial of Service Attacks (DDoS)
• The 51% cartel attack
• A Goldfinger attack
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28. Conclusion
ADVANTAGES
• It is easy to set up and
it is fast
• Low and irreversible
transaction fees
• Without central
authority???
(possible disadvantage)
DISADVANTAGES
• New and uninvestigated financial product
• History is full of illegal and questionable activity
• Absence of relevant theoretical background
• Highly volatile value and an unknown issuer
• Undefined legal status
• Unregulated commodity and absence of consumer
protection
• Anonymity and blurry taxation status
• Illegal or undefined in most countries of the world
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29. Thank you for your attention!
Questions, comments or remarks?
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