What is Bitcoin and how does it Work?
Bitcoin is 2 things, a currency and a payment network.
1) Bitcoin the currency
Only 21 million bitcoins will ever exist. New bitcoins cannot be created after the 21 million limit is reached.
Can spend instantly at over 100,000 places online and at thousands of places offline.
Not issued or controlled by a government or central bank.
Bitcoin is valuable because it’s better money.
2) Bitcoin the payment system
Anyone can open an account (No ID required. No forms to fill out)
Accounts are free. Impossible for anyone to freeze your account.
Send and receive payments – Peer-to-peer. No middle man. No mandatory fees.
Instant transfers. 24 hours a day 7 days a week.
A borderless network. No restrictions on what country you can send money to, who to, how much, or for what reason.
No third party has the ability to interfere. Impossible for anyone to block you.
The network is decentralized so the only way for governments to shut it down is to shut down the entire internet.
January 2009: The first ever bitcoin transaction. No value. $0.00
May 2010: The first bitcoin purchase. 2 Pizzas ($25) bought for 10,000 bitcoins
July 2010: 1 Bitcoin = $0.08
November 2010 = $0.5
February 2011 = $1
June 2011 = $10
2012 = $15
April 2013 = $100
November 2013 = $1,100
July 12th 2014 = $620
POTENTIAL BUSINESSES TO START
Total VC Funding for Bitcoin Businesses so Far = $248 million
1 – Wallets – $113 mill in Funding
A place to send, receive, and store bitcoins
2 – Exchanges – $108 mill in Funding
A place to trade currencies. Buy and sell bitcoin.
3 – Payments (Merchants) – $98 mill in Funding
Helps merchants accept bitcoin. Sets up payment gateways and offers advice.
Send money to foreign countries for less than Western Union
Buy shares in a vehicle that holds bitcoins
Bitcoin Based Marketplaces
Yelp / LinkedIn for Bitcoin
BTCfx – Bitcoin Trading
Bitcoin payments using Google Glass
Games / Casinos (Pay / Prizes in Bitcoin)
Betting in mobile games
BEST OPTION TO MAKE MONEY: BUY AND ACCUMULATE AS THE PRICE WILL APPRECIATE
If demand increases, the price has to go up because the supply is limited (fixed at 21 million).
The amount of people using bitcoin right now is tiny compared to amount of people on the internet (0.01%) It wouldn’t take too much adoption on a worldwide scale for the price of 1 bitcoin to = $100,000
The total size of the transactional currency market is around $60 trillion. As the currency of the internet, it’s reasonable to expect bitcoin to capture at least 1 – 10% of this.
Value of all the bitcoins in the world at today’s exchange rate is only $8 billion. To be a large global currency this would have to be $ trillions (as the Euro, Yen, British pound are)
Only 0.003 Bitcoin for each person in the world if distributed equally (21 million bitcoins for 7 billion people)