Overview of Bitcoin - Sweden

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Information about Overview of Bitcoin - Sweden
Business & Mgmt

Published on March 12, 2014

Author: eteigland

Source: slideshare.net


My presentation providing a general overview of Bitcoin for Länsstyrelsernas betaltjänstkonferens

Bitcoin ---- Challenging the fiat money system or catalyzing economic development? March 2014

Today’s presentation  Brief history of Bitcoin  What is a cryptocurrency?  How does Bitcoin work?  Variations on Bitcoin  Benefits and drawbacks  Recent events  Moving forward

Within 5 years: Challenging the fiat money system? Bitcoin – An emergent phenomenon • Open source project on SourceForge in Jan 2009 • Original source code by “Satoshi Nakamoto” – pseudonym? • Developed by self-organizing community of thousands of strangers across globe • Approx USD 7.8 bln in circulation (March 2014) and 80,000 daily transactions • SEK 50 bln of Bitcoin vs Swedish Crown: 91 bln SEK Teigland, Yetis, Larsson 2013 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2263707

Bitcoin Online Forums

Bitcoin Foundations across the globe

Institutions Emergent Collective vs E.g., Bitcoin Community ~ Emergent collective of users across globe connected through internet Teigland, Yetis, Larsson 2013 E.g., Central Bank ~ Long-standing financial institutions and regulations

What is a cryptocurrency?  Digital  Decentralized, peer-to-peer (P2P), i.e., no central, third party  Uses cryptography to validate transactions  Also uses cryptography to generate currency itself

How does Bitcoin work? Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor” Block chain • Shared public ledger • All transactions ever made included • Chronology and integrity enforced by cryptography

Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor” Transactions between Bitcoin wallets secured through digital signatures

Screenclip from: How Bitcoin Works under the hood, by “Curious Inventor” Verifying a transaction

“Mining” confirms waiting transactions through distributed consensus system Generates new Bitcoins (at decreasing rate) Does coding and de-coding that verifies and stores transactions (increasingly complex)

Screenclips from: How Bitcoin Works under the hood, by “Curious Inventor” Preventing double spending fraud

Mycelium Bitcoin Wallet

Where can I buy Bitcoins in Sweden?

Benefits of Bitcoin  Improved transaction security  Trust in cryptography rather than institution(s)  Transparency  Lower transaction costs  Cross-border, faster transactions  No outside intervention  No inflation (although market volatility)

Who accepts Bitcoin? http://coinmap.org/

Bitcoin becoming more mainstream?

Drawbacks of Bitcoin  Tax concerns  Only as safe as wallet holding coins or exchange’s servers  Consumer uncertainty  Market volatility (commodity or currency?)  Potential for illicit use  High electricity consumption to “mine”

Bitcoin – one of many cryptocurrencies Currency Code Year Est. Founder(s) Active Website PoW PoS Bitcoin BTC or XBT 2009 Satoshi Nakamoto (pseudonym) Yes N/A Yes No Ripple XRP 2013 Chris Larsen & Jed McCaleb Yes ripple.com No No Litecoin LTC 2011 Charles Lee Yes litecoin.org Yes No Peercoin PPC 2012 Sunny King (pseudonym) Yes peercoin.net Yes Yes Dogecoin DOGE 2013 Jackson Palmer & Billy Markus Yes dogecoin.co m Yes No Namecoin NMC 2011 N/A Yes dot-bit.org Yes No Mastercoin MSC 2013 J. R. Willett Yes mastercoin.or g No No Primecoin XPM 2013 Sunny King (pseudonym) Yes primecoin.or g Yes No

Variations on a theme  Finite (e.g., Bitcoin) or infinite number of coins available to be mined to no mining at all  Differing levels of transparence, e.g., of identities of those transacting  Proof of work, i.e., show work in order to generate value (mining)  Proof of stake, i.e., show legitimate ownership of currency (so possession /= ownership)

Recent events  Closure and bankruptcy filing of world’s largest Bitcoin exchange, Mt Gox in Japan − Unclear what happened – Exchange says it was hacked − Others allege CEO, Mark Karpeles, stole millions of dollars of Bitcoin  Will the “real” Satoshi Nakamoto please step forward?

Optimism prevails among users, new and old

Future scenarios?

vs Opportunity? Threat?

We are stuck in our old ways …

People • “Net generation” • 24x7 “mobile” workforce • Social entrepreneurship Technology • Broadband access • Mobile hardware • ICTs • 3D printing • Robotics Open Source • Software • Hardware • Physibles Convergence of….. Finance • Microlending/microfinance • Crowdfunding/equity • Digital, non-fiat currencies

“Made in Africa” 3D printer (Togo) crowdfunded through Ulele Winner of International Space Apps Challenge http://www.engineering.com/3DPrinting/3DPrintingArticles/ArticleID/5712/E-Waste-3D-Printer-to-Mars.aspx

Recommended viewing: How Bitcoin Works under the hood, by “Curious Inventor” http://youtu.be/Lx9zgZCMqXE

Karinda Rhode aka Robin Teigland robin.teigland@hhs.se www.knowledgenetworking.org www.slideshare.net/eteigland www.nordicworlds.net RobinTeigland Photo: Lindholm, Metro Photo: Nordenskiöld Photo: Lindqvist If you love knowledge, set it free…

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