Bitcoin
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Bitcoin is a digital currency created by an unknown person using the alias Satoshi Nakamoto and operates on a decentralized peer-to-peer network without any central authority or government involvement. It can be used to send or receive money internationally with very low transaction fees compared to traditional payment methods. The network works by having users validate transactions through mining and maintaining a public record of all transactions in the blockchain. While it offers advantages like anonymity and lack of third party control, bitcoin also faces issues with volatility, irreversible payments, and lack of anonymity in transactions.
Bitcoin
- 2. FLOW OF PRESENTATION INTRODUCTION WHAT IS BITCOIN? WHO CREATED IT? WHY BITCOINS? HOW DOES BITCOIN WORK? WHO CONTROLS? 1 3 4 5 6 2 ADV. & DISADV.7 COCLUSION REFERENCES 8 9
- 3. INTRODUCTION Bitcoin is an innovative payment technology and a new kind of VIRTUAL currency Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government issued currencies.
- 4. 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.
- 5. 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. It’s the first example of a growing category of money known as cryptocurrency. WHAT IS BITCOIN?
- 6. The first Bitcoin specification and proof of concept was published in 2009 by an unknown individual under the pseudonym Satoshi Nakamoto who revealed little about himself and left the project in late 2010. The Bitcoin community has since grown exponentially. Satoshi's anonymity often raises unjustified concerns because of a misunderstanding of the open-source nature of Bitcoin. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees. WHO CREATED IT?
- 7. WHY BITCOINS? Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. Some people just buy bitcoins as an investment, hoping that they’ll go up in value.
- 8. HOW DOES BITCOIN WORK? From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and enables a user to send and receive bitcoins. Behind the scenes, the Bitcoin network is sharing a massive public ledger called the "block chain". This ledger contains every transaction ever processed which enables a user's computer to verify the validity of each transaction
- 9. 1.ACQUIRING BITCOINS:- *Buy on an Exchange(trading) Several marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different currencies. Mt. Gox is the largest bitcoin exchange(Tokya, Japan).
- 10. 2.TRANSFERS:- • People can send bitcoins to each other using mobile apps or their computers. • It’s similar to sending cash digitally.
- 11. 3.MINING:- • People compete to “mine” bitcoins using computers to solve complex math puzzles.This is how Bitcoins are created. • Currently, a winner is rewarded with 25 bitcoins roughly every 10 minutes.
- 12. 4.OWNING BITCOINS:- • Bitcoins are stored in a “digital wallet,” which exists either in the cloud or on a user’s computer. • The wallet is a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money.
- 13. WHO CONTROLS THE BITCOIN NETWORK? Nobody owns the Bitcoin network much like no one owns the technology behind email or the Internet. Bitcoin transactions are verified by Bitcoin miners which has an entire industry and Bitcoin cloud mining options. While developers are improving the software they cannot force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
- 14. ADVANTAGES No Third-party Interruptions One of the most widely publicized benefits of Bitcoin is that governments, banks and other financial intermediaries have no way to interrupt user transactions or place freezes on Bitcoin accounts. The system is purely peer-to-peer; users experience a greater degree of freedom than with national currencies. Purchases Are Not Taxed Since there is no way for third parties to identify, track or intercept transactions that are denominated in Bitcoins, one of the major advantages of Bitcoin is that sales taxes are not added onto any purchases.
- 15. Mobile Payments • Like with many online payment systems, Bitcoin users can pay for their coins anywhere they have Internet access. • This means that purchasers never have to travel to a bank or a store to buy a product. • However, unlike online payments made with U.S. bank accounts or credit cards, personal information is not necessary to complete any transaction.
- 16. Volatile price Payments are irreversible Non anonymous system (All transactions are stored publicly and permanently on the network, so anyone can see transactions of any Bitcoin address.) Less secure transaction DISADVANTAGES
- 17. FUTURE IN QUESTION No one knows what will become of bitcoin. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency.
- 18. CONCUSION Bitcoin is a revolutionary currency system which can work in parallel or even replace the existing forms of currencies in the future. Bitcoin can be used as a reliable alternative for fast cashless payments by proposing solutions. The low transaction fees of the network and the instant availability of money to the merchant might render bitcoins interesting for vending machine operators.