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Bitpreneurship - Bitcoins Whitepaper

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Traditional form of money involves bank fees and is controlled by the government. Though this financial oversight is necessary to enable secure transactions the complexity has risen manifold. Most of the time this complexity turns away a great idea
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  1 | Page  www.albany.edu/seed    Mentored by Professor Paul Miesing  2 | Page  ABSTRACT Traditional form of money involves bank fees and is controlled by the government. Though this financial oversight is necessary to enable secure transactions the complexity has risen manifold. Most of the time this complexity turns away a great idea from becoming a reality. Moreover, according to Businessweek, half of the orld does’t o a ak aout ad are happ ith that. This akes ledig oe ee ore difficult. Consequently, addressing societal problem becomes time consuming and difficult. With the rise of mobile and internet, a new form of currency known as crypto currency is presenting a new, democratic way of leveraging the power and reach of internet and mobile to solve poverty and unemployment. This academic research paper will analyze the power of crypto currency specifically the Bitcoins to solve current social issues by the growing breed of radical social entrepreneurs known as Bitpreneurs.  3 | Page  With the advent of paper and coin currency, the need for presence of double coincidence of wants and difficulty in storing wealth was eliminated. As the population grew, the money started growing too and the exchange of goods became faster and efficient. However, this growth presented new challenges in form of adoptability, control and regulations by the regional and national governments. Today, if a cash strapped entrepreneur has a great idea to solve societal problems he/she has to resort to traditional money borrowing. This requires cash, collateral and great credit. Most of the time lender goes through due diligence and tight scrutiny of the borrower, making it difficult for all the borrowers to get funded simultaneously irrespective of their credit. On the other hand, toda’s eer   groig etork of sart phoes, irrespetie of atio’s ealth, has presented the world with a new and exciting decentralized form of currency known as crypto currency. This crypto currency is a digital medium of exchange that uses cryptography to secure the transactions and to control the creation of new units. Bitcoin is first crypto currency founded in 2009. P  eer coin, L ite coin and P  rime coin are the other leaders that have market capitalizations over $10 million. Not only are these coins decentralized but also purely digital. Unlike modern fiat money, Bitcoin is not controlled or backed by any bank or central government authority, like the Federal Reserve, for example. Moreover, it is exchanged directly between two parties online with no middle man. This eliminates regulatory fees and makes it democratic. In short, Bitcoins are pieces of computer code -- mathematical algorithms -- that represent monetary units. There are currently approximately 11 million Bitcoins in existence. In all, only about 21 million Bitcoin will ever be generated through the year 2140. Unlike credit card transactions, Bitcoin transactions, which take place internationally every day, are irreversible; they can only be refunded by the person receiving the funds. While Bitcoin us ers do’t hae to diulge ertai piees of idetifig iforatio, like their ak aout ad “oial Security numbers or physical addresses, a traceable trail of each of transaction is left behind in a public log known as the block chain. The public record prevents people from spending the same bitcoins more than once. CRYPTOCURRENCY  4 | Page  Bitcoin Vis-à-vis traditional currencies Scarce? Convenient? Secure? Central backing? Gold Yes, There is only so much of it in the earth. No, I t’s er hea.   Kind of,  Depending on where you store it. No,  no single authority owns gold. US Dollar No,  The government can print money, which they often do (inflation). Yes,  Its lightweight paper. No,  it can be counterfeit. Yes , the government provides its full faith and credit to the US dollar. Bitcoin Yes,  Only ~21M bitcoins will ever be created. Yes , it’s digital.   Yes, it’s seured  math puzzles that only super computers can solve. No,  like the internet, it’s ot oed or controlled by any single entity.  5 | Page  Bitcoins are bought online using real analog money (U.S. dollars, Japanese yen, etc.)  via Bitcoin exchanges and private sellers. Some of the more popular Bitcoin exchanges include Bitstamp and Coinbase, though there are dozens to choose from around the globe. To start using it one has to simply install Bitcoin wallet on the computer or smartphone or use a web wallet in the cloud. Some desktop Bitcoin wallets (also sometimes called clients) include Bitcoin-Qt, Armory, Electrum, Hive, and MultiBit. Mobile Bitcoin wallets, like Bitcoin Wallet for Android, lets us use Bitcoin to pay for items in phsial stores that aept the  saig a QR ode or usig NFC tap to pa. We allets, suh as Coiase and Blockchain.info enables us to use Bitcoin from any browser or mobile device and often offer additional services, like current Bitcoin prices, news and the ability to buy, use and accept the crypto currency. Once signed up, the Bitcoin wallet provider generates your first Bitcoin address. You can then share these addresses with friends and contacts for payments. Thousands of businesses throughout the world currently accept Bitcoin as a form of payment. While once notorious as payment for illegal goods online, thousands of reputable e-commerce businesses have started accepting BTC as payment, including Etsy vendors, Wordpress, Overstock.com, Amazon.com and even PayPal. Larger brick and mortar retailers have started accepting Bitcoins in their stores, including Kmart, Sears, Home Depot and CVS. As of June 27, 2014, Albany, NY has been the home to first bitcoin ATM in New York State.   Customers can insert a $20 bill in the ATM. That money is converted into Bitcoin, at the current exchange rate and is placed into the customer's digital wallet, which is located in cloud-based software or through a phone or tablet application.   As of 6:00 p.m. ET December 10, 2014, the currency was trading at $346.44, according to the Coin Desk Bitcoin Price Index. Values often fluctuate wildly from day to day. Though itois are relatiel e, ut the’re growing at a breakneck pace. The Bitcoin market is worth approximately $7 billion at current market rates, with millions of dollars of the digital currency being traded daily. USING BITCOINS
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