6. The War On Cash â Whatâs It All
About?
6
ď§ Global financial surveillance
ď§ Using money for identity tracking
ď§ Traceability of all personal transactions
ď§ Absolute efficiency in tax collection
ď§ Blockading and confiscating payments
ď§ Elimination of informal or grey economy
7. Paper Cash And Bitcoin Are
Similar
7
ď§ User-defined privacy (anonymity)
ď§ Untraceable (unlinked from source)
ď§ Irrevocable (bearer nature)
8. Precursors To Bitcoin
ď˝ Hashcash (1997) Adam Back
ď˝ Proof-of-work system to limit email spam
ď˝ SHA-1 hash of the header
ď˝ B-money (1998) Wei Dai
ď˝ Public keys identify pseudonyms
ď˝ Broadcast solution to computational problem
ď˝ Arbitrator and fine schedule
ď˝ Broadcasted subset account servers with bail
ď˝ BitGold (2001-2005) Nick Szabo
ď˝ Public challenge string of bits
ď˝ Client puzzle functions
ď˝ Securely timestamped
ď˝ Distributed property title registry solved double spending
8
9. Bitcoin Is A Reaction To...
ď§ Dominant legacy infrastructure
ď§ Centralised monetary authority
ď§ Diminishing financial privacy
9
10. Bitcoin Merchant
Benefits
10
ď§ Extend acceptance to countries not reached
by Visa, MasterCard, and PayPal (60+)
ď§ Provide payment method for the unbanked
ď§ No disallowed merchant categories codes
(MCCs)
ď§ Not subject to payments embargo
ď§ Eliminate chargeback and fraud risk
ď§ Processing fees approaching zero
ď§ Near immediacy of settlement
12. Summary Of Bitcoin Key Features
12
ď§ First mover network advantage
ď§ Independent unit of value with fixed supply
ď§ Decentralized nature inhibits shutdown
ď§ Financial intermediary not required
ď§ Dramatically lower fees
ď§ Brings the unbanked into the monetary system
ď§ Cannot be politically manipulated
ď§ Borders and capital controls are irrelevant
ď§ Reduces government ability to fund itself
Whatâs not to love?
14. Impact On Monetary
Policy
14
ď§ Fractional reserve banking becomes nearly
impossible without the emergence of money
substitutes
ď§ Opportunistic and unrestrained inflation
gives way to natural deflation
ď§ Interest rates respond more to the risk of the
lending activity rather than central bank open
market operations
ď§ Reduction in detrimental business cycles
15. Impact On Fiscal Policy
15
ď§ Governments gradually shift from taxing
income to taxing consumption
ď§ Registration of exchanges and merchants
facilitate higher consumption taxes
ď§ Government spending becomes constrained
by actual revenue raised which means that
unpopular expenditures will be difficult to
fund
22. Quotes From Others
22
âBitcoin is the beginning of
something great: a currency without a
government, something necessary and
imperative.â -Nassim Taleb
âI think the fact that within the bitcoin
universe an algorithm replaces the
functions of [the government]⌠is
actually pretty cool.â -Al Gore
âI think [bitcoin] is a technical tour
de force.â -Bill Gates