economic aspects of bitcoins
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
Economic Aspects Of BitcoinShivek Khurana
Cluster Innovation CentreUniversity of Delhi
Give me your food !
Banks are bigger animals
You are the mouseAnd mouse’s threatening is currency
In 2008 came a smart mouse
In 2008 came a smart mouse
In 2008 came a smart mouse
Bitcoin is not
online money transferbacked by any state
Bitcoin is Distributed
No big animal friend
Bitcoin is Distributed
No big animal friendAn ecosystem of miners
Government(s) no like Bitcoin
1. state can track issued money = earn taxes2. seigniorage
Government(s) no like Bitcoin
1. state can track issued money = earn taxes2. seigniorage
1. No track, no taxes :P2. No printing, no seigniorage
The dark side
1. Promotes illegal transfer (Peer to peer transactions)2. Controversial : backed by an algorithm
Transaction
Bank transactions are never final
Transaction
Bank transactions are never finalBitcoin transactions are
Legislative and Judiciary
The justice or legislative system can take your money at any time
Legislative and Judiciary
The justice or legislative system can take your money at any timeYour bitcoins are only yours to keep
Limits
The bank limits access to your own money
Limits : Lifted
The bank limits access to your own moneyNo bank, no limit
Macro Manipulation
The legislative manipulates the value of your money
No Macro Manipulation
The legislative manipulates the value of your moneyOnly the community can manipulate the value
Restricted Geographic Mobility
Difficult to move money across geographic boundaries
Geographic Mobility
Difficult to move money across geographic boundariesLong live internet
Mathematically Controlled Supply
Normal currencies are produced at the will of the legislative
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.
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
Supply Chart
Is bitcoin real ?
Yes. Bitcoin is real and interconvertible. Current Rate : $807 (yesterday’s price)
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
Bitcoin Bubble
$600 variation in 2 months
1. The currency is not mature2. But bubble can be justified
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.
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.
We are passing a milestone
Bitcoin Ecosystem aims to change finance as the internet changed publishing.
And it is doing quite well as of now.
Stay Tuned protocol specification
Thank you