![Bitcoin:
Why & What?
◦ Why is Bitcoin revolutionary?
◦ Censorship resistant & Privacy oriented
◦ Enabled pseudonymous transaction of value without a trusted third party[1]
◦ What problem did Bitcoin solve?
◦ Problem of double spending[2] on a network without a trusted third party
Source: https://upload.wikimedia.org/wikipedia/commons/b/bb/1in_god_we_trust.jpg
[1] Trusted Third Parties are Security Holes, Nick Szabo, 2001, https://nakamotoinstitute.org/trusted-third-parties/
[2] Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto, October 31, 2008, https://nakamotoinstitute.org/bitcoin/](https://image.slidesharecdn.com/whybitcoin-190720214615/85/Why-Bitcoin-Matters-5-320.jpg)
Why Bitcoin Matters
- 1. Why Bitcoin matters? BITCOIN IS NOT SOMETHING YOU BUILD COMPANIES ON TOP OF. BITCOIN IS SOMETHING YOU BUILD ECONOMIES ON TOP OF - ANDREAS ANTONOPOULOS Vishal Kankani @kankanivishal
- 2. Unlearning No, bitcoin does not have to destroy fiat money to exist No, it does not have to become global currency to exist No, it’s only use cases are not drugs, gambling and other illegal uses No, Bitcoin protocol has not been hacked till date No, governments cannot practically shut down Bitcoin And NO, something intangible can have value – social construct – video game avatars?
- 5. Bitcoin: Why & What? ◦ Why is Bitcoin revolutionary? ◦ Censorship resistant & Privacy oriented ◦ Enabled pseudonymous transaction of value without a trusted third party[1] ◦ What problem did Bitcoin solve? ◦ Problem of double spending[2] on a network without a trusted third party Source: https://upload.wikimedia.org/wikipedia/commons/b/bb/1in_god_we_trust.jpg [1] Trusted Third Parties are Security Holes, Nick Szabo, 2001, https://nakamotoinstitute.org/trusted-third-parties/ [2] Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto, October 31, 2008, https://nakamotoinstitute.org/bitcoin/
- 6. Audience, Value and Security ◦ Who can possibly need Bitcoin? ◦ Everyone ◦ What is the fundamental driver of bitcoin’s value? ◦ Trust of users in the Bitcoin protocol which is not centrally controlled ◦ What is it secured by? ◦ The net total honest CPU power of network
- 7. Security Network with maximum computational power on Earth with hash rate of approximately 70 TH/s and ever-growing Source: https://www.blockchain.com/charts/hash-rate?timespan=all&daysAverageString=7
- 8. Currency use case: Why money? To trade good and services Produced using time and resources Are they practically finite? Should money be practically finite? Create your choice of money
- 9. Hyperinflation: Case for sound money? "While there can be a number of causes of high inflation, most hyperinflations have been caused by government budget deficits financed by money creation. Peter Bernholz analysed 29 hyperinflations and concludes that at least 25 of them have been caused in this way. A necessary condition for hyperinflation is the use of paper money, instead of gold or silver coins. Most hyperinflations in history, with some exceptions, such as the French hyperinflation of 1789-1796, occurred after the use of fiat currency became widespread in the late 19th century...“ Source: https://en.wikipedia.org/wiki/Hyperinflation#Causes Source: https://bitcointalk.org/ Source: https://www.reddit.com/r/HistoryPorn/comments/5fimet/german_ kids_flying_a_kite_made_of_worthless_money/
- 10. Opinion – Characteristics of sound money Source: https://medium.com/@vijayboyapati/the-bullish-case-for-bitcoin-6ecc8bdecc1
- 11. Use cases for Bitcoin Currency Store of value Global remittances Banking the unbanked: Financial inclusion Internet of Things Current payments infrastructure needs revamp to support the imminent IoT revolution Control your Own Data Microsoft is building a digital decentralized ID (DID) scheme on Bitcoin – Project ION Human Rights in authoritarian regimes “A lot of the dismissals, criticisms and attacks on Bitcoin come from people who have the luxury of having a stable financial system.” — Alex Gladstein, CSO, Human Rights Foundation The best part is that we are just getting started … Let’s BUIDL together
- 12. Governmental & Institutional acceptance What does USA government think? US Treasury classified bitcoin as a convertible decentralized virtual currency in 2013 CFTC classified bitcoin as a commodity in September 2015 IRS classifies bitcoin as property for tax purposes SEC routinely evaluates proposals for ETFs …. … .. . Merchant acceptance? Microsoft, Starbucks, Nordstrom, Wikipedia, Whole Foods, GameStop, Crate & Barrel, Barnes & Noble, Lowe’s, etc. accept bitcoin payments and the list is growing fast …. … .. . Institutional investments? CME and CBOE are traditional exchanges in the US with futures contracts VCs, hedge funds, family offices and investment banks are investing billions in this ecosystem …. … .. . Technology development by corporations? Microsoft is building a digital decentralized ID (DID) scheme on Bitcoin – Project ION Square is funding open source development on Bitcoin Facebook is experimenting with its own currency … .. .
- 13. How will you uninvent an invention? • "Too often we judge other groups by their worst examples while judging ourselves by our best intentions." - George W Bush • Be careful if you ONLY compare positives of fiat with current negatives of Bitcoin • What happened when electricity, automobiles, internet, etc. were invented? • Bitcoin is more than a currency. Evolve your understanding of what this technology truly is and its enormous potential in designing our future. • Bitcoin is a choice – a choice on what our future society should be like. Choose wisely!
- 14. Risk Considerations Software bugs Competition Regulatory issues Security risks Price volatility Adoption never happens