Crypto-currency

What is digital currency ???• Digital currency or digital money is an Internet-based medium of exchange distinct

from physical (such as banknotes and coins) that exhibits properties similar to physical currencies, but allows for instantaneous transactions and borderless transfer-of-ownership.

• Both virtual currencies and cryptocurrencies are types of digital currencies, but the converse is incorrect.

What is cryptocurrency ???• A cryptocurrency (or crypto currency) is a medium of exchange using cryptography to

secure the transactions and to control the creation of additional units of the currency.

• Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.

• There were more than 710 cryptocurrencies available for trade in online markets as of 11 July 2016, but only 9 of them had market capitalizations over $10 million.

List of cryptocurrencies :-• Bitcoin - BTC• Ethereum – ETH• Ripple - XRP• Steem - STEEM• Litecoin - LTC• Ethereum Classic – ETC• Dash - DASH• NEM - XEM and many more…

Now, we will discuss about one of the cryptocurrency:-

• How did it get started?

• How is the currency created?

• Why does it have value?

• Who controls the value?

• Who Accepts Bitcoin?

• How Would I buy some Bitcoins?

• Why would I want some Bitcoins?

• Problems with Bitcoin currency.

Queries about bitcoin :

How Did It Start ?

• In 2009 A technical paper was posted on the internet by Satoshi Nakamoto titled Bitcoin: A Peer-to- Peer Electronic Cash System

• It described a system of cryptocurrency that was not backed by any government or any form of existing currency.

• Interestingly, there is no such person. It’s a pseudonym.

Where Do Bitcoins Come From ?• Bitcoin is based on solving an encryption formula which requires extreme amounts of computing power.

Each time you solve a portion of the formula you earn a “Bit Coin.”

Websites like Deepbit.net help you set up the mining formula.

Companies began to sell hardware called gate array miners to enhance the processing speed.

Only 21 million Bit Coins will ever exist

• Nearly all Bitcoins have been mined and are now in circulation.

How are Bitcoins created - Mining process

• 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.

• The rate of block creation is approximately consistent with 50 % reduction every four years.

• Supply growth -12.5 bitcoins per block (approximately every ten minutes) until mid 2020, and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued.

Mining hardware – ASIC CardApplication-specific integrated circuit

Bitcoin Mining Farm in India

• Bitcoins are intended to be digital currency.

• Buyers and sellers will use them and eliminate all the middlemen such as credit cards, ATM machines, etc.

• Bitcoins will be safer than carrying a plastic card.

• Bitcoins will be an international currency with no exchange transaction fees.

What is the Vision of Bitcoins ?

What is the Value of a Bitcoin ?

• Bitcoins are like diamonds or gold – no intrinsic value.

As more people want to buy Bitcoins, sellers will charge more.

It’s a free market and as wild as you can imagine. No rules, regulations or oversight.

• Speculators who think Bitcoins will be successful, buy as many as they can and hold them price appreciation.

• If 21 million Bitcoins are in circulation and current price is $500, then total market value is ~$10 Billion.

Who Sells Bitcoins ?

• Larger Buyers go to Exchanges

• An Exchange is a website with significant software and funding

• There are at least 25 Bitcoin Online trader in the India alone

• We can buy and sell the bitcoins using our bank account

• We can get the list from localbitcoins.com

Who Accepts Bitcoin in India? Unocoin has partnered with various merchants in India to bring

bitcoin to the daily lives of every individual. The merchants which are currently on board with us are:

eTravel smart - Online bus ticket booking portal. Reload - Online mobile recharge platform. Indsoft - Web hosting portal. Tecdoc365- Utility Software management Fightshop - Flights/Holiday booking portal. Dharwad International School - Educational Institute. Fashiondiva - Online cloth, accessories and home decor

portal. People place - Training and recruitment firm

Unocoin and MobiKwik partner to boost Bitcoin adoption across India with over 75,000 merchants

Merchants that have integrated with MobiKwik include Domino’s Pizza, Pizza Hut, eBay, Uber, GoDaddy, WHSmith India, Cleartrip, IRCTC, Meru Cabs, Shuttl, Big Bazaar, OYO Rooms, Zomato, Barista, PVR, Archies, BookMyShow, Grofers, Big Basket, ShopClues, Myntra, Jabong, Pepperfry, MakeMyTrip, Sagar Ratna, TastyKhana, JustEat, PVR, Snapdeal, HomeShop18, Naaptol, Fashionara, FashionAndYou, Ferns N Petals, Café Coffee Day, and Yatra.

Bitcoin sent through Unocoin can be used to purchase anything at all of these merchants and more.

How Would I buy some Bitcoins? To Buy Bitcoins on an Exchange:

Create an account at an exchange like coinsecure.in Wire them some money (no credit cards allowed) Funds will show up in your account Purchase or sell Bitcoins whenever you wish from your account. You can have all or some sent to your Bitcoin wallet on your

Computer

• Buying small amounts of Bitcoins is popular by locally.

Find a dealer with an acceptable price (price is posted on the internet.)

Arrange a meeting place that is safe. Bring cash since he/she doesn’t accept any form of credit. You pay him and he initiates a transfer from his account in a

Bitcoin Exchange. He gives you a secure code which deposits them in your

“wallet.”• ATM’s that sell Bitcoin are in a very few locations.

First one was in Texas in a gun store. Bitcoin ATM’s only take cash. They only sell Bitcoin, you can’t convert Bitcoin to cash.

• Currently not available in India.

Activity Level

• Currently there are 60,000 to 70,000 Bitcoin transactions each day

• The level hasn’t changed significantly in the last year.

• Log into Blockchain.info to see the transaction activity.

Bitcoin Value – 1 Year History

Why is all the Money Flowing into Bitcoins ?

90% of Bitcoin buyers are speculators !!!

A speculator is a person who trades derivatives, commodities, bonds, equities or currencies with a higher than average risk in return for a higher-than-average profit potential.

Speculators take large risks, especially with respect to anticipating future price movements, in the hope of making quick, large gains.

Why Would You Want Some Bitcoin ?

• It’s a novelty and would be fun to try.

• Show your friends that you are a true ground breaker.

• You like to gamble.

• You don’t trust Credit Cards and want to buy stuff online.

• You want to buy something on the internet that is “unconventional.”

• You want to sell something that is “unconventional”.

Problems with Bitcoin currency• According to RBI, virtual currencies being in digital form are stored in digital/electronic media that are called electronic wallets (e-wallets). Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc.

• Since they are not created by or traded through any authorized central registry or agency, the loss of an e-wallet could result in the permanent loss of the virtual currencies held in them.

• Payments made through virtual currencies, such as bitcoins, takes place on a peer-to-peer basis without an authorized central agency regulating it.

• The absence of information of counterparties in such peer-to-peer anonymous/pseudonymous systems could subject the users to

unintentional breaches of anti-money laundering and combating the financing of terrorism.

Bitcoin Outlawed in Some Countries• Russia was first to outlaw Bitcoin transactions

• They have enough corruption without Bitcoin

• China is restricting it use• Too much speculation

• Korea outlaws it’s use – claims it’s not a legitimate currency

• Thailand shutdown the Bitcoin exchange in their country

Bitcoin in a Perfect World• There are many promises to be fulfilled by a universal digital currency.

• Lowers the cost of processing.

Credit cards charge ~5% to the supplier. Bitcoin transactions would cost almost nothing.

• Reduces Fraud

Credit card fraud costs billions of dollars each year Don’t need to carry plastic in your wallet Smartphone Apps can work with Bitcoin

Will Bitcoin Succeed ?• Digital currency makes a lot of sense.

It could eliminate a lot of middle man costs (credit cards, wire fees, etc.)

It could be extremely easy to use It could eliminate billions of dollars in credit card fraud and

identity theft.

• Bitcoin may utterly fail but some form of digital currency will probably emerge.

It must be safe It must be traceable by government entities It must be easy to use. People must have trust in it’s value

Any Questions ?

Thank You For Your Attention !!!

-Dinesh Muniandy313106410013