Bitcoin working

1. BIT COINS

2. Introduction
What is Bitcoin
Who created Bitcoin
Why Bitcoin
How does Bitcoin work
Acquiring Bitcoins
Transfers
Mining
Owning Bitcoin
Anonymity
Who controls the Bitcoin network
Sponsors for free Bitcoins
Exchanges company
CONTENTS

3. Bitcoin is an innovative payment network and a new
kind of money.
Bitcoin offers the promise of lower transaction fees
than traditional online payment mechanisms and is
operated by a decentralized authority, unlike
government issued currencies.
INTRODUCTION

4. Bitcoin uses peer-to-peer technology to operate with no
central authority or banks; managing transactions and the
issuing of bitcoins is carried out collectively by the
network.
Bitcoin is open-source; its design is public, nobody
owns or controls Bitcoin and everyone can take part.
Through many of its unique properties, Bitcoin allows
exciting uses that could not be covered by any previous
payment system.

5. There are no physical Bitcoins, only balances associated
with public and private keys.
These balances are kept on a public ledger, along with all
Bitcoin transactions, that is verified by a massive amount
of computing power.
In March 2014, the IRS stated that all virtual currencies,
including Bitcoin, would be taxed as property rather than
currency.
Gains or losses from Bitcoin held as capital will be
realized as capital gains or losses, while Bitcoin held as
inventory will incur ordinary gains or losses

6. Bitcoin price so volatile everyone is curious.
Bitcoin, the category creator of blockchain
technology, is the World Wide Ledger yet extremely
complicated and no one definition fully encapsulates
it.
By analogy it is like being able to send a gold coin via
email.
WHAT IS BITCOIN?

7. It is a consensus network that enables a new payment
system and a completely digital money.
It is the first decentralized peer-to-peer payment
network that is powered by its users with no central
authority or middlemen.
Bitcoin was the first practical implementation and is
currently the most prominent triple entry bookkeeping
system in existence
CONT….

8. Everyone has access to all of the source code all of the
time and any developer can review or modify the
software code.
As such, the identity of Bitcoin's inventor is probably
as relevant today as the identity of the person who
invented paper.
CONT….

9. The authenticity of each transaction is protected by
digital signatures corresponding to the sending
addresses therefore allowing all users to have full
control over sending bitcoins.
Thus, there is no fraud, no chargebacks and no
identifying information that could be compromised
resulting in identity theft.
CONT….

10. The first Bitcoin specification and proof of concept
was published in 2009 by an unknown individual
under the pseudonym Satoshi Nakamoto who revealed
little about himself and left the project in late 2010.
The Bitcoin community has since grown
exponentially.
Satoshi's anonymity often raises unjustified concerns
because of a misunderstanding of the open-source
nature of Bitcoin.
WHO CREATED BITCOIN?

11. Bitcoins can be used to buy merchandise
anonymously.
In addition, international payments are easy and cheap
because bitcoins are not tied to any country or subject
to regulation.
Small businesses may like them because there are no
credit card fees.
Some people just buy bitcoins as an investment,
hoping that they’ll go up in value.
WHY BITCOINS?

12. From a user perspective, Bitcoin is nothing more than
a mobile app or computer program that provides a
personal Bitcoin wallet and enables a user to send and
receive bitcoins.
Behind the scenes, the Bitcoin network is sharing a
massive public ledger called the "block chain".
This ledger contains every transaction ever processed
which enables a user's computer to verify the validity
of each transaction
HOW DOES BITCOIN WORK?

13. Buy on an
Exchange
Several marketplaces
called “bitcoin
exchanges” allow
people to buy or sell
bitcoins using
different currencies.
Mt. Gox is the
largest bitcoin
exchange.
ACQUIRING BITCOINS

14. People can send
bitcoins to each
other using mobile
apps or their
computers. It’s
similar to sending
cash digitally.
TRANSFERS

15. People compete to
“mine” bitcoins
using computers to
solve complex math
puzzles.
This is how bitcoins
are created.
Currently, a winner
is rewarded with 25
bitcoins roughly
every 10 minutes.
MINING

16. Bitcoins are stored in a
“digital wallet,” which
exists either in the cloud
or on a user’s computer.
The wallet is a kind of
virtual bank account
that allows users to send
or receive bitcoins, pay
for goods or save their
money.
Unlike bank accounts,
bitcoin wallets are not
insured by the FDIC.
OWNING BITCOINS

17. Though each bitcoin transaction is
recorded in a public log, names of buyers
and sellers are never revealed – only their
wallet IDs.
While that keeps bitcoin users’
transactions private, it also lets them buy
or sell anything without easily tracing it
back to them.
That’s why it has become the currency of
choice for people online buying drugs or
other illicit activities.
ANONYMITY

18. Nobody owns the Bitcoin network much like no one owns
the technology behind email or the Internet.
Bitcoin transactions are verified by Bitcoin miners which
has an entire industry and Bitcoin cloud mining options.
While developers are improving the software they cannot
force a change in the Bitcoin protocol because all users
are free to choose what software and version they use.
WHO CONTROLS THE BITCOIN NETWORK?

19. In order to stay compatible with each other, all users need
to use software complying with the same rules.
Bitcoin can only work correctly with a complete
consensus among all users.
Therefore, all users and developers have a strong
incentive to protect this consensus.
WHO CONTROLS THE BITCOIN NETWORK?

20. Many people new to Bitcoin are curious about how to
get some.
Bitcoin faucets, places where bitcoins are given away
for free, have been a part of spreading Bitcoin since
the earliest days.
But one problem is running out of bitcoins to give!
That is why we have figured out a sustainable way to
give away free bitcoins with sponsors.
SPONSORS FOR FREE BITCOINS

21. EXCHANGES
Exchange About Based
oinbase operates one of the most popular wallets and is an simple way to buy
bitcoin. $5 bonus on sign up.
USA
Localbitcoins matches buyers and sellers online and in-person, locally
worldwide.
Finland
BitQuick claims to be one of the fastest ways you can buy bitcoin. USA
Bitbargain has a vast range of different payment options for UK
buyers.
UK
CoinCorner allow purchases with credit and debit cards for verified
users.
Isle of
Man
A peer-to-peer platform for individuals to buy, sell or trade bitcoin
and altcoins
UK
Xapo is Known for it's ease of use and bitcoin cold-storage vault. USA

22. ADVANTAGES
No Third-party Interruptions
One of the most widely publicized benefits of Bitcoin is that
governments, banks and other financial intermediaries have no way to
interrupt user transactions or place freezes on Bitcoin accounts. The
system is purely peer-to-peer; users experience a greater degree of
freedom than with national currencies.
Purchases Are Not Taxed
Since there is no way for third parties to identify, track or intercept
transactions that are denominated in Bitcoins, one of the major
advantages of Bitcoin is that sales taxes are not added onto any
purchases.

23. CONT……
Mobile Payments
• Like with many online payment systems, Bitcoin users
can pay for their coins anywhere they have Internet
access.
• This means that purchasers never have to travel to a bank
or a store to buy a product.
• However, unlike online payments made with U.S. bank
accounts or credit cards, personal information is not
necessary to complete any transaction.

24. No one knows what
will become of
bitcoin. It is mostly
unregulated, but that
could change.
Governments are
concerned about
taxation and their
lack of control over
the currency.
FUTURE IN QUESTION