Bitcoin ExplorationA Futuristic Odyssey of Magic Internet Money

What are bitcoins?

● Decentralized cryptographic currency.● Digital money you can send through the

internet.● 1 BTC = $438.5 USD (May 13, 2014 1:53

PM)

Why bitcoins?

● Transferred without interference.● Send to anyone in the world.● No prerequisites or arbitrary limits.

Where do bitcoins come from?

● Mined by users.● Users run bitcoin miners, which solves

math problems.● Bitcoin generates random 256-bit

number.● If application finds number less than

random number:o User awarded bitcoins.

What data can we collect?

● Data recorded through “blocks”.● New block every ~10 minutes.● A block contains:

o Recent transactionso Difficulty of math problemo Other various data

What does this data tell us?

a) Rate of growthb) Transactions per dayc) Prominence of bitcoin in the worldd) Transaction fees

(a) When will bitcoin reach its cap?

● Bitcoin has a 21 million btc cap.● No more Bitcoins will be mined after this

cap is reached.

(a) When will bitcoin reach its cap?

● Approximately 50 bitcoins made every 10 minutes (6 intervals per hour)

● Bitcoin generation decreasing geometricallyo 50% reduction generation rate every 4

years● Bitcoin will reach their 21 million btc cap

in 2140 (theoretically)

(c) Prominence of bitcoin in the world

Number of nations relates to bitcoins:● First data, 89/196 nations now in the

bitcoin network in April 28 2014 at 23:23:00 pm.

● Second data, 110/196 nations have a relationship with bitcoin from past to now

(b) How many transactions are handled per day compared to other retailers?● Total transactions up til now (Apr 30): 37,798,377● Day of highest number of transactions: 102,010 on Nov 28, 2013

● Compare to amazon.com (26.5 million transactions per day)● Compare to eBay.com (1 billion transactions per day)● Compare to Walmart (24 million transactions per day)

(d) How do the bitcoin transaction fees compare to financial service companies?

● Three types of fees associated with buying/selling/using bitcoins.o Entry fee (0.1% -

0.25%)o Transaction fee

(optional based on size - typical less than 0.1%)

o Exit fee (0.1% - 0.25%)

Retail E-Commerce Remittances

Dollar volume by market

10,383 609 549

Prevailing average pricing (fees)

2.5% 2.9% 8.9%

Bitcoin pricing (fees)

1.0% 1.0% 1.0%

Prevailing transaction fees

259.6 17.8 48.9

Bitcoin transaction fees

103.8 6.1 5.5

Savings 155.7 11.8 43.4

Conclusion

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