An attempt at demystification.

1. What the
f***
is Bitcoin?
An attempt at demystification
by Naveed Lalani

2. Hello, I’m Naveed and I like Bitcoin.
@naveed_l @PortableBtque

3. I can has Bitcoin?!
For buying drugs?
Money to fuel terrorism?
Internet Gold?
Will Bitcoin steal my money?
A digital cryptocurrency? Wtf?
Protocol layer for exchanging value? Huh?

4. I promise it’s legit!
But don’t believe me…
Source: WeUseCoins.com
“I do think Bitcoin is the
first [encrypted money]
that has the potential to
do something like change
the world.”
Peter Thiel, Co-Founder of
PayPal
“[Virtual Currencies] may hold
long-term promise, particularly
if the innovations promote a
faster, more secure and more
efficient payment system.”
Ben Bernanke, Former Chairman of
the Federal Reserve
"Bitcoin is a remarkable
cryptographic achievement
and the ability to create
something that is not
duplicable in the digital
world has enormous value.”
Eric Schmidt, CEO of Google

5. So why all the hate? Follow the $$$

6. Okay fine! But what is it… really?
Source: WeUseCoins.com

7. A distributed p2p digital currency.
Digital cash that can be used to pay
friends or merchants via the internet
without any central authority controlling
the exchange. It is transacted via a
Bitcoin address and associated keys.
Sample Private Key:
Kb8kLf9zgWQnogidDA76MzPL6TsZZY36hWXMssSzNydYXYB9KF
Sample Public Key:
3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy

8. Secured via a public ledger.
Bitcoin transactions go into a decentralized
public ledger called the block chain which
is protected with cryptography.
Whenever a new Bitcoin transaction is
initiated, miners earn Bitcoin to verify and
record the transaction in the block chain
and thus new Bitcoins are created.

9. Millions of Bitcoins will be created.
In Jan 2009, Satoshi Nakamoto, the creator of Bitcoin, mined the
first block of Bitcoins ever (known as the “genesis block”) – getting
a reward of 50 Bitcoins.
Every four years of operation of the Bitcoin network, half the
amount of Bitcoins created in the prior 4 years are created
through mining.
~12M Bitcoins are currently in circulation.
A total, final number of 21M Bitcoins will be created by 2140.
Bitcoin is divisible by 8 decimal places – i.e. 0.00000001 BTC -
called a Satoshi. Can be divided further if needed.
Unique individuals that currently own Bitcoin maybe 1-5M.

10. Valued the same way as “normal” money.
Valuable because of utility and scarcity.
No different than cash – depends on if people
selling goods and services will accept it.
Bitcoins are limited so value should go up and
volatility should go down over time, since there will
be fewer major owners and fewer major
movements.
Similar to stock market – fairly stable and few major
crashes.

11. 1 BTC USD Value
Peak in Dec 2013: $1,151 per BTC
Current Value in May 2014: $451 per BTC

12. It is money created for the digital age!
You can’t exchange cash online without central authority like PayPal – and they
have high fees and usability barriers.
Credit Cards launched in the 1950s – not created for the internet! That is why
there is fraud, chargeback issues, fees, require a lot of personal information, cv2
numbers, etc. They were retrofitted for the internet.
No central authority with Bitcoin = much lower fees.
No chargebacks because it is digital cash – once transferred, can’t be taken
back.
Fast international money transfer – pay family member in another country same
way as your neighbor. No ridiculous fees like with Western Union.
Little to no personal information required to send or receive Bitcoin since it is
essentially cash. Protects you while still minimizing risk for merchant.

13. You can buy and sell it easily.
Can earn Bitcoin by mining, which requires large investment.
Wiring fiat currency to an exchange like Bitstamp or a direct
deposit from your bank account to a wallet like Coinbase to buy
Bitcoins. Or by accepting Bitcoins as a merchant.
Can hold in a offline wallet like Hive or online wallets like
Coinbase, Blockchain.info or Bitpay. Can also hold in paper
wallet or in cold storage.
Think of it like cash - many ways to get and store your cash.
Can sell your Bitcoin for fiat currency via exchanges and some of
the wallets or even take money out using a Bitcoin ATM.
US Tax laws have defined Bitcoin as property – so for now you
pay capital gains taxes on it.

14. It is accepted in a lot of places!
Source: usebitcoins.info
10s of thousands of merchants accept it directly – Overstock, Zynga, Tesla,
Square Market, Virgin Galactic, Wordpress, Reddit, some Subways, etc.
Buy a gift card via Gyft using Bitcoin – use at Amazon, CVS/pharmacy, Dell,
Fandango, Gamespot, Sears, Target, Home Depot, and many more.
Bitcoin debit card providers such as Xapo and FreshPay will allow you to use it
anywhere Visa and MasterCard is accepted.

15. May 2014 Daily Bitcoin Volume
Source: CoinMetrics.com

16. But, its not all rainbows and unicorns.
Same risk as cash. Can be stolen if you don’t secure it
safely (never give out your private key!).
Price is volatile and will be for a while.
Can’t be reversed. Can only be refunded by person who
has it.
It is NOT anonymous. Everything is recorded publicly. Can
create new wallet addresses easily though.
Still experimental and under active development. New
changes will be adopted.
Government taxes and regulation still uncertain.

17. bitcoin protocol > Bitcoin currency

18. Creating more bling-bling
Source: cryptocoinsnews.com

19. Content monetization

20. Eliminating email spam
Source: Stanford IRT

21. Decentralized Domain Name
System - namecoin

22. Internet for the world via
micropayment channels

23. Autonomous cars and roads
Source: MotorAuthority.com

24. The Truth: No one really knows.
Source: The Social Network
As Zuck said…

25. Curious? Learn more!
"Bitcoin isn’t Money—It’s the Internet of Money” by Eli Dourado via THE ÜMLAUT
http://theumlaut.com/2014/01/08/bitcoin-internet-of-money/
“Why Everybody Who Doesn’t Hate Bitcoin Loves It” by Greg Rosalsky via Freakonomics Radio Podcast
http://freakonomics.com/2014/03/27/why-everybody-who-doesnt-hate-bitcoin-loves-it-a-new-freakonomics-
radio-podcast/
“Bitcoin. Sweat. Tide. Meet the future of branded currency.” by Paul Kemp-Robertson via TEDGlobal 2013
http://www.ted.com/talks/paul_kemp_robertson_bitcoin_sweat_tide_meet_the_future_of_branded_currenc
y
“State of Bitcoin 2014 Report” via CoinDesk
http://media.coindesk.com/report/CoinDesk-State-of-Bitcoin-2014.pdf
“Professor Bitcoin” by Reihan Salam via The Vice Podcast
http://www.vice.com/read/the-vice-podcast-professor-bitcoin
"Why Bitcoin Matters” by Marc Andreessen via The New York Times
http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/
“The Fifth Protocol” by Naval Ravikant via Startup Boy Blog
http://startupboy.com/2014/04/01/the-fifth-protocol/

26. Try it for yourself!
Pull up TryBTC.com from your laptop (preferred)
or smart phone.

27. Thanks! :) Questions?
Follow me on twitter:
@naveed_l and @PortableBtque
Contact me: naveed@portableboutique.com
Sign-up at www.PortableBoutique.com