economic aspects of bitcoins

40
Economic Aspects Of Bitcoin Shivek Khurana Cluster Innovation Centre University of Delhi

Upload: shivek-khurana

Post on 06-May-2015

302 views

Category:

Economy & Finance


2 download

DESCRIPTION

Bitcoin is a new type of money. This presentation talks about how bitcoins can possible break the fiat banking system protocol. The first set of slides were there to depict the following story: Think of a forest, Where a mouse, Morton, befriended an elephant called Joe. Now Morton would threaten other mice in his clan in the name of Joe and take hold of their food. Other mice were helpless because Morton was backed by a bigger animal, and had no option, but to give away their hard earned food. In the course of time, all mice befriended a bigger animal. Dave befriended Carroll the fox and Alice befriended Ethan befriended Noah the Lion and so on. Assuming all of them were collecting food, each one of them could now threaten everyone else and force others to give away their food. The food each mouse ends up with will be proportional to the strength of their big animal friend. In 2008 came a smart mouse who knew about the happenings in the alienated human world. He was called Satoshi Nakamoto. He thought that he could take on the elephant, fox and lion with a machine gun. So he invested in them, and was able to survive in his population, among other mice with big animal friends. His threatening was way more powerful.

TRANSCRIPT

Page 1: Economic aspects of bitcoins

Economic Aspects Of BitcoinShivek Khurana

Cluster Innovation CentreUniversity of Delhi

Page 2: Economic aspects of bitcoins
Page 3: Economic aspects of bitcoins
Page 4: Economic aspects of bitcoins

Give me your food !

Page 5: Economic aspects of bitcoins
Page 6: Economic aspects of bitcoins
Page 7: Economic aspects of bitcoins

Banks are bigger animals

You are the mouseAnd mouse’s threatening is currency

Page 8: Economic aspects of bitcoins

In 2008 came a smart mouse

Page 9: Economic aspects of bitcoins

In 2008 came a smart mouse

Page 10: Economic aspects of bitcoins

In 2008 came a smart mouse

Page 11: Economic aspects of bitcoins
Page 12: Economic aspects of bitcoins

Bitcoin is not

online money transferbacked by any state

Page 13: Economic aspects of bitcoins

Bitcoin is Distributed

No big animal friend

Page 14: Economic aspects of bitcoins

Bitcoin is Distributed

No big animal friendAn ecosystem of miners

Page 15: Economic aspects of bitcoins

Government(s) no like Bitcoin

1. state can track issued money = earn taxes2. seigniorage

Page 16: Economic aspects of bitcoins

Government(s) no like Bitcoin

1. state can track issued money = earn taxes2. seigniorage

1. No track, no taxes :P2. No printing, no seigniorage

Page 17: Economic aspects of bitcoins

The dark side

1. Promotes illegal transfer (Peer to peer transactions)2. Controversial : backed by an algorithm

Page 18: Economic aspects of bitcoins

Transaction

Bank transactions are never final

Page 19: Economic aspects of bitcoins

Transaction

Bank transactions are never finalBitcoin transactions are

Page 20: Economic aspects of bitcoins

Legislative and Judiciary

The justice or legislative system can take your money at any time

Page 21: Economic aspects of bitcoins

Legislative and Judiciary

The justice or legislative system can take your money at any timeYour bitcoins are only yours to keep

Page 22: Economic aspects of bitcoins

Limits

The bank limits access to your own money

Page 23: Economic aspects of bitcoins

Limits : Lifted

The bank limits access to your own moneyNo bank, no limit

Page 24: Economic aspects of bitcoins

Macro Manipulation

The legislative manipulates the value of your money

Page 25: Economic aspects of bitcoins

No Macro Manipulation

The legislative manipulates the value of your moneyOnly the community can manipulate the value

Page 26: Economic aspects of bitcoins

Restricted Geographic Mobility

Difficult to move money across geographic boundaries

Page 27: Economic aspects of bitcoins

Geographic Mobility

Difficult to move money across geographic boundariesLong live internet

Page 28: Economic aspects of bitcoins

Mathematically Controlled Supply

Normal currencies are produced at the will of the legislative

Page 29: Economic aspects of bitcoins

Mathematically Controlled Supply

Normal currencies are produced at the will of the legislativeBitcoin is controlled by an algorithm. And generated by a process called mining.There cannot be more than 21m bitcoins ever.

Page 30: Economic aspects of bitcoins

Bitcoin Today

Is a mainstream currencywith a total value of 8,822,045,700 USDand real atms in Canadaand companies like Virgin Galantic, Shopify accepting them

Page 31: Economic aspects of bitcoins

Supply Chart

Page 32: Economic aspects of bitcoins

Is bitcoin real ?

Yes. Bitcoin is real and interconvertible. Current Rate : $807 (yesterday’s price)

Page 33: Economic aspects of bitcoins

Bitcoin is open by design

Nobody owns itNobody controls itAnyone can take part in it

And that’s why most government institutions/ finance dudes don’t like it

Page 34: Economic aspects of bitcoins

Bitcoin Bubble

Page 35: Economic aspects of bitcoins

$600 variation in 2 months

1. The currency is not mature2. But bubble can be justified

Page 36: Economic aspects of bitcoins

Why Bubble ?

1. More mouses have started believing in the power of bitcoin

2. The bitcoin follows supply/ demand principle. More the demand, more is the price.

Page 37: Economic aspects of bitcoins

Bitcoin is not a bubble

The value of a currency increases as the issuing authority becomes more powerful. The bitcoin issuing authority has gained sudden traction, hence the value of bitcoin has increased.

Page 38: Economic aspects of bitcoins

We are passing a milestone

Page 39: Economic aspects of bitcoins

Bitcoin Ecosystem aims to change finance as the internet changed publishing.

And it is doing quite well as of now.

Page 40: Economic aspects of bitcoins

Stay Tuned protocol specification

Thank you