A high level overview of cryptocurrencies focused on Bitcoin (BTC), Ether (ETH) and ICOs presented to the "Pay-it-Forward" group in Bangalore in October 2017.
International Business Environments and Operations 16th Global Edition test b...
Crypto for the Rest of Us
1. “Crypto” for the Rest of Us
Pay It Forward
20th October, 2017
Copyright 2017, Pankaj Jain
2. What is “Crypto” or
“Cryptocurrency”?
• Digital money used for transacting
• Store of value, like gold
• Decentralized - no central bank like the RBI, usually,
no corporation
• Based on math and cryptography
• Transactions stored on a “Blockchain”
Copyright 2017, Pankaj Jain
3. What is a “Blockchain”
• A public ledger of all transactions
• Everyone can see every transaction that occurs
4. • Transactions are transmitted to the network and then
“miners” use sophisticated computers to solve a
mathematical equation to verify the transaction.
• A transaction is considered irreversible after 6 confirmations
are transmitted on the network.
• A “Public Key” is your address
• A “Private Key” is essentially your password to make a
transaction
• Typically, each transaction on a blockchain has a cost which
is usually paid by the sender
• Transactions are made from a wallet
Copyright 2017, Pankaj Jain
6. Why is this a Big Deal?
• Relatively quick transfers (as low as a few seconds to 10 minutes)
• Removal of barriers to transact with anyone, anywhere, any time
• Completely decentralized, do not need bank permission to transfer
money or sell a security to another person, or check who owns a home,
etc.
• Every transaction is immutable and public
• Transaction doesn’t have to be “money”, it can be the record of a
marriage, divorce, purchase of a home, sale of a business, etc.
• There will always be a record of the transaction as long as nodes are
sharing the database
Copyright 2017, Pankaj Jain
7. Bitcoin
• Created by “Satoshi Nakamoto” in 2009
• Finite amount of “coins” can be mined - 21 million Bitcoins
• Value is created by “mining” and good old fashioned economics -
supply and demand
• Bitcoins (BTC) can be transferred to any address, anywhere for low
transaction fees
• Bitcoin addresses start with a “1” or “3”
• It operates almost as the reserve cryptocurrency
• Market cap ~ $100 Billion
Copyright 2017, Pankaj Jain
11. Ethereum
• Created by Vitalik Buterin, Gavin Wood and others in 2014
• Similar to Bitcoin as it is based on Blockchain and
cryptography.
• Ether is the “currency” used to transact on the Ethereum
blockchain
• Enables creation of “tokens” using a programming language
called “Solidity”
• Tokens created on Ethereum benefit from the development of
the Ethereum Blockchain
Copyright 2017, Pankaj Jain
12. Ethereum
• Building blockchain apps on Ethereum has fueled a
new generation of apps or “dApps” that use
blockchain while hiding the complexity of blockchain
• Examples of tokens on Ethereum are:
• Basic Attention Token (BAT) +370% since ICO in May
• Civic (CVC) +240% since ICO in July
Copyright 2017, Pankaj Jain
13. ICOs
• ICOs (Initial Coin Offerings) are crowdfunding campaigns to
raise capital via cryptocurrencies by selling tokens
• Many tokens are “ERC20” tokens which means they comply
with a standard and usually operate on top of the Ethereum
blockchain
• ICOs have raised over $2.3 Billion this year alone
• Many ICOs are utility tokens, others are securities (shares),
many others are scams!
• “If it looks too good to be true, it usually is.”
Copyright 2017, Pankaj Jain