National Mining University

Bitcoin.General informationBulgakov Dmitry, 2013

Content

1. Bitcoin Versus Conventional Currencies

2. How Bitcoin works

3. Bitcoin pros and cons

Bitcoin Versus Conventional CurrenciesBitcoin uses P2P technology without a central authority

Bitcoin Versus Conventional CurrenciesBitcoin is primarily digital

Bitcoin Versus Conventional CurrenciesBitcoin has a maximum 21 million limit

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Bitcoin Versus Conventional CurrenciesBitcoin transactions have limitations

Bitcoin Versus Conventional CurrenciesBitcoin balances are not insured

How Bitcoin works

key pair

public private

What is encrypted with the one key → сan be decrypted with the other

Bitcoin uses asymmetric encryption method

сan be decrypted with the other ← What is encrypted with the one key

How Bitcoin worksBitcoin can be acquired through a number of ways

How Bitcoin worksAll Bitcoin transactions are included in a block chain

Bitcoin pros and consBitcoin has a number of advantages:

Bitcoin is the fi rst cryptocurrency to capture the public imaginati on

Total issuance is l imited to 21 million, so it is unlikely to be devalued

As a decentralized currency, Bitcoin is free from government interference and

manipulati on.

Transacti on costs are much lower than with conventi onal currencies.

Bitcoin pros and consBitcoin's disadvantages include:

The price of a Bitcoin has been increasingly volati le, making it diffi cult to assess its

real value and increasing the risk of losses for investors in the cryptocurrency.

The relati ve anonymity of Bitcoin may encourage its use for il legal and ill icit

acti viti es such as tax evasion, weapons procurement, gambling and circumventi on of

currency controls.

The fact that bitcoins exist primarily in digital form renders them vulnerable to loss.

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