Introduction to Blockchain and Bitcoin

DISCLAIMER……
This is just an introduction to give you basic
knowledge of Blockchain technology and Bitcoin. We
don’t intend to give you any kind of investment
advice.
Prepared and Presented by….
Devendra Jain

WHAT IS BLOCKCHAIN TECHNOLOGY ?

HOW WILL YOU TRANSFER THE MONEY FROM ONE
PERSON TO ANOTHER PERSON??
The bank will first deduct the amount from Alice’s account and then it will
deposit the amount in the Richie’s account

SO WHAT HAPPENED IN THE ABOVE
TRANSACTION ?
 There was a Third Party Involved.
 To transfer the amount it will take about two to three
days.
 Both the parties trusted the third party for the
transaction.
 The transaction history and the ledger is maintained
only with the Bank.
 Sometimes the transaction cost is too much higher
when more than one, third parties are involved

NOW WHAT IS BLOCKCHAIN ?
 A blockchain,
 is a continuously growing list of records, called Blocks,
 Linked and Secured using cryptography.
 Contains a cryptographic hash of the previous block, a
timestamp and transaction data.
 Inherently resistant to modification of the data.
 Managed by a peer-to-peer network

TRANSACTION IN A BLOCKCHAIN….

MAIN CRUX OF BLOCKCHAIN…
A Distributed Database
Information held on a blockchain is
 Shared database.
 Meaning the records it keeps are truly public and easily
verifiable.
 Difficult for a hacker to corrupt.
 The data is accessible to anyone on the internet.
 Real time information

CONTINUED……..
Blockchain Durability and robustness:
Blockchain technology is like the internet in that it has
a built-in robustness. By storing blocks of information
that are identical across its network, the blockchain
cannot:
 Be controlled by any single entity.
 Has no single point of failure.

CONTINUED……
Transparent and incorruptible:
The blockchain network
 Automatically checks in with itself every ten minutes.
 Each group of these transactions is referred to as a “block”.
And this results in properties of blockchain:
 Transparency.
 It cannot be corrupted.
“ It allows people to exchange value without knowing the
identity of each other necessarily, in a secure way on the
back end. On the front end, it's simplicity, transparency and
trust. Think of all the cost, time and often waste that
happens in the exchange of value – blockchain rids that
from the system.”
-- Jason Kelley (IBM Global Manager for Blockchain
Services).

YOU CAN SEE ALL THE LATEST TRANSACTIONS THAT
TOOK PLACE THIS IS TRANSPARENCY……

BLOCKCHAIN IS LIKE DNA
 Blockchain:
 Record of transactions.
 Similarly, DNA is a record of genetic transactions and
mutations that spread as life expanded across the earth.
 Both become more complicated over time as our DNA
evolves and new blocks are added to the blockchain.

PRACTICAL USAGE OF BLOCKCHAIN
 Government Service
 Land Revenue Department – How?
 Transporters
 Voting System
 What about Tax System?
 Any idea about Blockchain in Hospitals?
With the goal of advancing towards a decentralised world where
collaboration and incentivisation will drive ecosystems, the
pioneers of Blockchain technology in South Asian Region are
organising World Satoshi Summit– a series of global events
aimed at bringing stakeholders together for a seamless
exchange of ideas on the impact of the underlying tech on world
economy.
The Summit is being held in New Delhi on 12th May,2018 and
13th May, 2018.

BLOCKCHAIN WILL CHANGE HOW WE RIDE AND
TRANSPORT GOODS IN THE WORLD

BLOCKCHAIN CAN ENABLE ACCURATE
VOTING SYSTEMS

BLOCKCHAIN HAS THE POTENTIAL TO MAKE OUR
GOVERNMENTS TRULY DEMOCRATIC
 Implementing Blockchains can
 Reduce bureaucracy and
 Increase Security
 Efficiency
 Transparency of Government operations
 Indian Government to launch its first official
blockchain solution called IndiaChain in
collaboration with Niti Aayog to issue tamper-proof
degree certificates.

COULD BLOCKCHAIN TRANSFORM TAX
ENTIRELY?
 Possible usages for further discussion and exploration
include:
 Tracking where and when VAT has been paid, and in doing so
reduce VAT fraud
 Helping multinational companies provide a consistent data set for
multiple tax authorities
 Giving tax authorities and other regulators more confidence in the
data supplied to them
 Verifying judgements and assumptions involved in establishing
the profit global businesses make in different jurisdictions
 Giving more visibility to micro transactions such as those done by
individuals as part of the sharing economy
 While blockchain is not the cure all for the tax system, it could
be applied in a number of areas to reduce the administrative
burden and collect tax at a lower cost, helping to narrow the
tax gap

WHAT IS BITCOIN ?
 Bitcoin uses peer-to-peer technology to operate
with no central authority or banks; managing
transactions and the issuing of bitcoins is carried
out collectively by the network. Bitcoin is open-
source; its design is public, nobody owns or
controls Bitcoin and everyone can take part.
Through many of its unique properties, Bitcoin
allows exciting uses that could not be covered by
any previous payment system.
Is this a Bitcoin?

HOW DOES ONE ACQUIRE BITCOINS?
 As payment for goods or services.
 Purchase bitcoins at a Bitcoin exchange.
 Exchange bitcoins with someone near you.
 Earn bitcoins through competitive mining.
While it may be possible to find individuals who wish to
sell bitcoins in exchange for a credit card or PayPal
payment, most exchanges do not allow funding via
these payment methods. This is due to cases where
someone buys bitcoins with PayPal, and then reverses
their half of the transaction. This is commonly referred
to as a chargeback

WHAT DETERMINES BITCOIN’S PRICE ?
 The price of a bitcoin is determined by supply and
demand. When demand for bitcoins increases, the
price increases, and when demand falls, the price
falls. There is only a limited number of bitcoins in
circulation and new bitcoins are created at a
predictable and decreasing rate, which means that
demand must follow this level of inflation to keep
the price stable. Because Bitcoin is still a relatively
small market compared to what it could be, it
doesn't take significant amounts of money to move
the market price up or down, and thus the price of a
bitcoin is still very volatile.

LEGALITY OF BITCOIN IN INDIA
 RBI Press Release on December 24, 2013
 RBI Press Release on February 01, 2017
 RBI Press Release on December 05, 2017
 Shri. Arun Jaitely Statement on November 30, 2017
 December 13, 2017 Survey by ITD u/s 133A of
Income Tax Act

I-T NOTICES TO
CRYPTOCURRENCY
INVESTORS ON
SUSPICION OF TAX
EVASION

RISKS IN BITCOIN
 Loss of Passwords
 Digital currency prone to fraud
 Lack of any authorized central agency to regulate
the payments or to turn to for redressal of
grievances.
 No underlying of asset for VCs, thereby making the
value a matter of speculation
 Exchanges are located in various parts of the world
 Ponzi Schemes

Introduction to Blockchain and Bitcoin

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