bitcoin: fad or the future of currency?
DESCRIPTION
In today's payment technology marketplace, Bitcoin is still considered a newcomer in the early stages of adoption. While it is garnering a lot of attention, the emerging payment option is often overshadowed by the fear of the unknown and the discussions around its future can be polarizing. Some companies are starting to embrace it and show traction, while others are publically stating that they will not support it, for now. This session will explore the virtual currency landscape and the impact of Bitcoin, why it is stealing the spotlight and the challenges associated with adoption and regulation.TRANSCRIPT
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BitcoinFad or The Future of Currency?
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Latest HeadlinesCounterterrorism Program Names Virtual Currencies As Area Of Interest
China Construction Bank shuts down bitcoin, litecoin transactions
State regulators issue virtual currency warning
Bank of Canada unconcerned about growing popularity of bitcoin
Wisconsin State Assembly Candidate Accepts Bitcoin Contributions
Wisconsin Government Accountability Board Forces Candidate To Return Bitcoin Donation
New York casino offers latest virtual currency site
MasterCard is paying lobbyists to concentrate on Bitcoin and mobile payments.
Buying Beer With Bitcoin is Legal in California
Ohio Bans Buying Booze With Bitcoin
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2014 Tesla Model S91.4 Bitcoins ($103,000)December 12, 2013
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2014 Lamborghini Gallardo LP560-4216.843 Bitcoins ($209,995)December 13, 2013
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Two bedroom apartment, Olso, Norway 5,600 Bitcoins ($680,000)October 29, 2013
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NASCAR Sponsorship67,000,000 Dogecoin ($55,000)March 25, 2014
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10,000 Bitcoins ($25)May 22, 2010
“I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day.
I just think it would be interesting if I could say that I paid for a pizza in bitcoins ”
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James GagliardiJames Gagliardi is Vice President of Product and Innovation at Digital River. He is responsible for the strategy behind the company’s global product roadmap and ensuring its suite of cloud commerce products and solutions meet, exceed and anticipate the needs of Digital River’s world-renowned clients.
Views and opinions expressed here are my own.
http://jamesgagliardi.com
@jamesgagliardi1LC2QvM8zrhtD57ewygsRnJZK65nCE3DuG
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Digital River
http://www.digitalriver.com
WORLDWIDE
COMMERCEWORLDWIDE
PAYMENTSWORLDWIDE
MARKETING
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OUR CUSTOMERS INCLUDE TOP GLOBAL BRANDS
$390M in 2013 revenue
$30B annual online transactions (ttm)
20 years of experience
31 offices around the world
1,300+ commerce experts
243 serving countries and territories
200 payment methods
Digital River
http://www.digitalriver.com
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Virtual Currencies
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Virtual Currencies“An unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community”- European Central Bank
“A medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency” - US Department of Treasury
http://en.wikipedia.org/wiki/Virtual_currency
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Virtual Currencies
GOA
Virtual Currency
U.S. Dollars
Real Goods & Services
Virtual Goods & Services
Closed Flow
Virtual Currency
U.S. Dollars
Real Goods & Services
Virtual Goods & Services
Hybrid
Virtual Currency
U.S. Dollars
Real Goods & Services
Virtual Goods & Services
Open Flow
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Closed SystemSuper Mario Bros.
100 coins gives Mario an extra life
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Semi-Closed System
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Hybrid SystemChuck E. Cheese’s Tokens and Tickets
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Hybrid SystemChuck E. Cheese’s Tokens and Tickets
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Hybrid/Open SystemDelta SkyMiles
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Open SystemSecond Life – Linden Dollar
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Abandoned Currencies
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Microsoft PointsMicrosoft Points
Users' existing Microsoft Points will be converted into a currency amount equal to or greater than their current Points balance.
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Facebook Credits
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Canadian Digital CurrencyMint Chip
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Failed and Abandoned Virtual CurrenciesFlooz (1999-2001)
Beenz (1998-2001)
E-Gold (1996-2009)
InternetCash (1999-2001)
DigiCash (1990-1998)
CyberCash (1994-2001)
Microsoft Points (2006-2013)
Facebook Credits (2009-2012)
Canadian MintChip (2012-2014)
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Bitcoin
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Decentralized Virtual CurrencyBitcoin is a peer-to-peer payment system that is not controlled by one central authority.
Cryptocurrency coins are "mined" with computers by solving complex mathematical equations called "hashes".
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Bitcoin2008: Bitcoin.org registered
2008: Satoshi Nakamoto published Bitcoin: A Peer-to-Peer Electronic Cash System that describes everything you need to know about Bitcoin
2009: Open Source Software Launched
2010: Mt.Gox, Bitcoin exchange was established
2010: Silk Road Launched
2011: Wikileaks started accepting BTC donation
2011: EFF Stops accepting Bitcoin
2011: First Bitcoin conference
2012: Wordpress accepts Bitcoin
2013: First Bitcoin ATM unveiled
2014: Overstock.com begins accepting Bitcoin, $124,000 in sales on first day.
2014: Mt.Gox, loses 800,000 bitcoin
http://historyofbitcoin.org/
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Bitcoin vs. bitcoinsSystem, protocol, community currency
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Bitcoin CurrencyBTC/XBT1 bitcoin = 1 BTC
1 cBTC = 0.01 BTC
1 mBTC = 0.001 BTC
1 μBTC = 0.000001 BTC
1 satoshi= 0.00000001 BTC
$4.00 = 0.009324 BTC$4.00 = 9324.00 Bits (μBTC)
Dominican Joe Coffee Shop
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Bitcoin CurrencyExchange Rate
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CommodityBitcoin is actually a commodity with its own fluctuating value, like a stock or bond.
The proper way to think about Bitcoin for now is not as a currency, due to its lack of price-stability, but rather as a commodity
- Salil Deshpande, Managing Director at Bain Venture Capital
Scarcity helps drive up the price of a commodity. Food prices rise when a drought chokes off supplies, for example, and bitcoin has its scarcity built in.
Bitcoin has been classified as a commodity in Finland after the Scandinavian country’s central bank declared that it did not meet the definition of a currency.
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Bitcoin System
WalletMining Transferring Blockchain
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MiningMiners bring new Bitcoins into the circulation through a complex mathematical and computing process.
The total number of Bitcoin is capped at 21 million BTC.
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Wallet
1LC2QvM8zrhtD57ewygsRnJZK65nCE3DuG
Wallets are computer files that hold bitcoins.
Similar to how emails are sent between email addresses, bitcoins are sent between wallets.
Each wallet has a unique address that distinguishes it from other wallets.
If you lose the address, that Bitcoin is lost to you forever.
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TransferEmail or Bitcoin Address
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TransferQR Codes
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BlockchainThe blockchain stores a public leger of every transaction made. It is used to verify transactions and prevent fraud and double-spending, making Bitcoin secure.
Bitcoin transactions are generally irreversible, and users could lose their principal if they hold onto bitcoins for an extended period of time.
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How to buy Bitcoin
Bitcoin ATM In-PersonOnline Exchange
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In-Person
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Bitcoin ATM
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Bitcoin ATMAuthentication Requirements
Email Face Palm Print Government ID
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Bitcoin Online ExchangeMt.Gox
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Bitcoin Exchange
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Buying BitcoinVerification Method
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Buying BitcoinVerification Method
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Buying BitcoinLink A Bank Account
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Buying BitcoinVerification Method
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Buying BitcoinVerification Method
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Silk Road
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Using Bitcoin
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Vending MachineMarijuana vending machine accepts Bitcoin
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Paying with Bitcoin
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Paying with BitcoinNotable Brands
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Paying with BitcoinOverstock.com
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YelpAdds Bitcoin
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Bitcoin Debit CardXapo debit card
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Alternatives
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CryptocurrencyName Market Cap Price
1 Bitcoin $5,511,150,639 $432.88
2 Litecoin $286,348,565 $10.19
3 Peercoin $43,851,072 $2.05
4 Ripple $39,426,230 $ 0.005202
5 Dogecoin $34,645,538 $0.000455
6 Nxt $22,512,348 $0.022512
7 Namecoin $17,674,551 $2.04
8 Mastercoin $17,587,609 $31.23
9 BlackCoin $9,271,423 $0.12
10 DarkCoin $7,037,259 $1.67
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Credit Card
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PayPal
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Amazon
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Apple
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Carrier Billing
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Wire Transfer
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Bitcoin
ADVANTAGES
Low transaction fees
Fewer risks for merchants
Security and control
No Risk of “Charge-backs”
Global
DISADVANTAGES
Consumer onboarding difficulty
Wallets Can Be Lost
No Buyer Protection
Volatility
Regulation uncertainty
Bitcoin is property, subject to capital gains
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Sound OffQuestions, Comments, Thoughts
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ReferencesBitcoin
http://bitcoin.org
TryBTC
http://trybtc.com
Coindesk
http://www.coindesk.com
History of Bitcoin
http://historyofbitcoin.org/
BitLegal
http://www.bitlegal.io/
United States Government Accountability Office
http://www.gao.gov/assets/660/654620.pdf
Internal Revenue Service
http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance
Financial Crimes Enforcement Network
http://www.fincen.gov/news_room/testimony/pdf/20131119.pdf
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BitcoinFad or The Future of Currency?