What is Bitcoin?

Changing the dimensions of Currency

• INTRODUCTION

•NEED OF STUDY

According to me, it was a new type of Self-Emerging Economy.

AND, there was no one to control it or owe it.

It gives me a curiosity about its working and its Impacts on Real world.

Rather than discuss what

Bitcoin is...

What is Bitcoin?

Here we go...

Let’s independently design

something that resembles Bitcoin

Let’s imagine we’re playing

a board game like Monopoly.

Where we have tradable assets

(such as houses and hotels)

To trade effectively, we need

mutually interchangeable tokens

that we all agree have some valueIn other words, we need a currency

Now, with this currency, we’ll

want to easily trade in any

denomination, as getting exact

change can be a hassle

And we’ll also want it to be

immune to counterfeiting

So, we’ll avoid paper bills

And instead, we’ll give ourselves

“balances” and record them in anotebook.

Ali

Sam

Trevor

Arianna

100

100

100

100

tokens

tokens

tokens

tokens

We’ll refer to this list of balances as

our ledger

A book or other collection of

financial accounts of a

particular type.

ledger

This ledger is “law”

OR, In other words, one’s balance is

whatever the ledger says.

And that’s final

But what if we have a large

game with say 20 or 30 players?

Then who holds the ledger?

If only I have the ledger, I can

increase my balance and cheat

So... we give everyone a notebook

with a copy of the ledger

And when balances are updated,

the changes are propagated

Like this..

Ali

Sam

Trevor

Arianna

Ali

Sam

Trevor

Arianna

100

100

100

100

100

100

100

100

tokens

tokens

tokens

tokens

tokens

tokens

tokens

tokens

Ali

Sam

Trevor

Arianna

Ali

Sam

Trevor

Arianna

100

100

100

100

100

100

100

100

tokens

tokens

tokens

tokens

tokens

tokens

tokens

tokens

Now, let’s say Ali sells something

to Sam for 7.5 tokens

On Ali’s copy of the ledger,

he decreases Sam’s balance by 7.5

and increases his by 7.5

Ali

Sam

Trevor

Arianna

107.5

92.5

100.0

100.0

tokens

tokens

tokens

tokens

Then Ali shows everyone his copy

and says “make these updates”

Ali 107.5 tokens

Sam 92.5 tokens

Trevor 100.0 tokens

Arianna 100.0 tokens

Ali 107.5 tokens

Sam 92.5 tokens

Trevor 100.0 tokens

Arianna 100.0 tokens

Ali 107.5 tokens

Sam 92.5 tokens

Trevor 100.0 tokens

Arianna 100.0 tokens

Ali 107.5 tokens

Sam 92.5 tokens

Trevor 100.0 tokens

Arianna 100.0 tokens

But there are another issues

What if we want to have

more players in the game?

And what if some of them are

halfway around the world?

How do we synchronize all of

these paper ledgers?

We’ll have a software that

does the ledger syncing for us..

Well, we could just move from

paper records to digital records

And a math to ensure that our

digital signatures can’t be forged, &

thus nobody can spend our money

And... we’ll have balances listed next

to account numbers instead of names

(our ledger needs unique lookup values, because names

are not guaranteed to be unique)

With these modifications, our game

will allow millions and even billionsof people to transact and trade

Come to think of it, we could

probably even use this system as

a real world global currency andpayment mechanism

Notice that with this system,

nobody owns it or controls it

Just as with in-person cash

transactions, only the sender and

recipient are involved -

there are no middle men

And because there are no middle

men, no fees are required

So for the 1st time, you and I can

trade directly online and from

anywhere in the world

We just record a

transaction amongst ourselves

and broadcast it to the world,

proving that it actually occurred

Our currency and payment system

is powerful but simple, and we

designed it together

And we’ll call it Bitcoin

•CONCLUSIONSUnderstood the working and Decentralization of currency which gives Bitcoins a Unique identity to FLOW as a Independent currency.

Understood the all emerging problems regarding a virtual currency.

The Related Risk of Currency in every country is different , so every country can use the bitcoins with some modifications in Economic and legal policies.

BITCOINS IN INDIA are not completely banned or illegal but still there is no strict stand of government or central bank for its regulation.

Thank you

Munish chopra