Cryptocurrency &

Blockchain Seminar
-
Nerav Parekh
 DISCLAIMER:
THIS IS AN EDUCATIONAL SEMINAR
WE ARE NOT INVESTMENT ADVISORS
WE CONFIRM THAT THERE ARE RISKS
INVOLVED IN THE INVESTMENT & USE OF
CRYPTOCURRENCY
 What is Money ?

• Money is any item or verifiable record that is generally

accepted as payment for goods and services and
repayment of debts in a particular country or socio-
economic context.
• Money in & of itself is nothing
• Can be a shell, metal coin or a piece of paper with a
historic image on it
 Functions of Money

• Medium of Exchange
• Unit of Account (Measurement) – Interpretation of Prices,
Costs & Profits
• Store of Value – Can be saved, retrieved & exchanged at a
later time
• Standard of Deferred Payment
 History of Money

• Bartering
• Gift Economy / Debt Economy
• Commodity Money Representative Money
• Gold Standard
• Fiat Money
 Barter

• Bartering is a direct trade of goods and services

• System of Exchange without using a medium of
exchange such as money
• Important Phenomenon – ‘double coincidence of wants’
• Example: I'll give you a stone axe if you give me a chicken
 Gift Economy / Debt Economy

• Valuables are not traded or sold

• No Explicit Agreement for gifts
• Goods / Services provided in absence of Barter / Gifts
• Money = Credit / Debt
 Commodity Money – Representative Money

• Value comes from a commodity of which it is

made
• consists of objects that have value in themselves
(intrinsic value) as well as value in their use as
money
• Examples: Gold, Silver, Copper, Salt, Tea etc
 Gold Standard

• A monetary system in which the standard economic unit

of account is based on a fixed quantity of gold
• After 2nd World War a gold exchange standard was
established by the Bretton Woods agreement
• All countries fixed their exchange rates relative to the
U.S. dollar
 Gold Standard

• Central banks could exchange dollar holdings into gold at

the official exchange rate of $35 per ounce
• All currencies pegged to the dollar thereby had a fixed
value in terms of gold
• President Richard Nixon ended international
convertibility of the U.S. dollar to gold on August 15, 1971
– Nixon Shock
 Fiat Money
• Intrinsically valueless money used as money because of
government decree
• Greatly loses its value should the issuing government or
central bank either lose the ability to, or refuse to, further
guarantee its value
• Examples: Zimbabwe
 Problems with Fiat Money
• Relies on the confidence people have in the
currency & the nation backing it
• Government controls the printing press so it can
print how much it wants
• Government can force people to accept the fiat
currency
• Example: In 18th century France, death penalty
was imposed on people for simply asking by what
means a business deal or personal transaction
was to be paid
 Problems with Fiat Money
• Relies on the confidence people have in the
currency & the nation backing it
• Government controls the printing press so it can
print how much it wants
• Government can force people to accept the fiat
currency
• Example: In 18th century France, death penalty
was imposed on people for simply asking by what
means a business deal or personal transaction
was to be paid
 Why Cryptocurrency ?
• Irresponsible Central Authorities controlling
currency – Financial Crisis of 2008 in USA, NPA
Crisis in India, Greece government debt crisis,
2012–13 Cypriot financial crisis,
• Transferring money (value) from one party to
another (X to Y) involves a cost to a 3rd party (Z)
• Why can’t we transfer money just like we transfer
files, contacts, information, messages, videos &
images to others without having to wait or
needing permission from a 3rd party
 Why Cryptocurrency ?
• Irresponsible Central Authorities controlling
currency – Financial Crisis of 2008 in USA, NPA
Crisis in India, Greece government debt crisis,
2012–13 Cypriot financial crisis,
• Transferring money (value) from one party to
another (X to Y) involves a cost to a 3rd party (Z)
• Why can’t we transfer money just like we transfer
files, contacts, information, messages, videos &
images to others without having to wait or
needing permission from a 3rd party
Introduction of Cryptocurrency – What
is Blockchain / Bitcoin?

• Blockchain is the technology behind Bitcoin

• 1st Blockchain was conceptualized in 2008 by an
anonymous person or group known as Satoshi Nakamoto
• Implemented in 2009 as a core component of Bitcoin
• It serves as the public ledger / digital ledger for all
transactions that everyone on the network can see
 Introduction of Cryptocurrency – What
is Blockchain / Bitcoin?
• Network is essentially a chain of computers that must all
approve an exchange before it can be verified and
recorded
• Uses Cryptography to keep exchanges secure
• Blockchain stores the details of every transaction of the
digital currency, and the technology stops the same
Bitcoin being spent more than once
 Why was Bitcoin invented?
• To put an end to Fractional Reserve Banking which leads to
over issuing of debt instruments that can cause failure of
banking systems such as in 2008
• It’s globally inclusive -- bitcoin is enabling millions across the
globe to transact, save, and hedge their way to a better
financial future
• As a global currency you can send bitcoin to anyone, anywhere
in the world without worrying about cross border remittance
fees
• Keeping your bitcoin safe in a non-custodial wallet (like
Blockchain’s) means there is no entity that can lock you out of
your funds
• 1st digital currency to solve the double spending problem
without the need of a trusted authority or central server
 Basic Technical Details of Bitcoin /
Blockchain

• Bitcoin transactions are recorded on a public ledger which is known

as blockchain
• Blockchain is a continuously growing list of records
• These list of records are knows as blocks
• They are linked and secured using cryptography
• Data cannot be modified on the blockchain
 Basic Technical Details of Bitcoin /
Blockchain

• Bitcoin transactions are recorded on a public ledger which is known

as blockchain
• Blockchain is a continuously growing list of records
• These list of records are knows as blocks
• They are linked and secured using cryptography
• Data cannot be modified on the blockchain
 Basic Technical Details of Bitcoin /
Blockchain
• Bitcoins are registered to bitcoin address
• There is a public key & a private key (digital equivalent of
a safe vault)
• Never lose or forget the private key
• Always take a backup of your private key
• Mining is a record-keeping service done through the use
of computer processing power
Sample Bitcoin Address & Ledger
 Why should you use Bitcoin ?

• Its Fast: When you pay a cheque from another bank into your
bank, the bank will often hold that money for several days,
because it can’t trust that the funds are really available.
Similarly, international wire transfers can take a relatively long
time. Bitcoin transactions, however, are generally far faster.
• It’s Cheap: What’s that you say? Your credit card transactions
are instantaneous too? Well, that’s true. But your merchant
(and possibly you) pay for that privilege. Some merchants will
charge a fee for debit card transactions too, as they have to
pay a ‘swipe fee’ for fulfilling them. Bitcoin transaction fees are
minimal, or in some cases free
 Why should you use Bitcoin?
• Central governments can’t take it away: Remember what
happened in Cyprus in March 2013? The Central Bank wanted to take
back uninsured deposits larger than $100,000 to help recapitalize
itself, causing huge unrest in the local population. It originally wanted
to take a percentage of deposits below that figure, eating directly
into family savings. That can’t happen with bitcoin. Because the
currency is decentralized, you own it. No central authority has
control, and so a bank can’t take it away from you. For those who find
their trust in the traditional banking system unravelling, that’s a big
benefit. Demonetisation in India (2016) is also another episode where
the common man was put to trouble by the ruling government.
• There are no chargebacks: Once bitcoins have been sent, they’re
gone. A person who has sent bitcoins cannot try to retrieve them
without the recipient’s consent. This makes it difficult to commit the
kind of fraud that we often see with credit cards, in which people
make a purchase and then contact the credit card company to make
a chargeback, effectively reversing the transaction
 Why should you use Bitcoin?
• People can’t steal your payment information from merchants:
This is a big one. Most online purchases today are made via credit
cards, but in the 1920s and ’30s, when the first precursors to credit
cards appeared, the Internet hadn’t yet been conceived. Credit cards
were never supposed to be used online and are insecure. Online
forms require you to enter all your secret information (the credit card
number, expiry date, and CSV number) into a web form. It’s hard to
think of a less secure way to do online business. This is why credit
card numbers keep being stolen. Bitcoin transactions, however, don’t
require you to give up any secret information. Instead, they use two
keys: a public key, and a private one. Anyone can see the public key
(which is actually your bitcoin address), but your private key is secret.
When you send a bitcoin, you ‘sign’ the transaction by combining
your public and private keys together, and applying a mathematical
function to them. This creates a certificate that proves the
transaction came from you. As long as you don’t do anything silly like
publishing your private key for everyone to see, you’re safe.
 Why should you use Bitcoin?
• It isn’t inflationary: The problem with regular fiat currency is that
governments can print as much of it as they like, and they frequently
do. If there are not enough US dollars to pay off the national debt,
then the Federal Reserve can simply print more. If the economy is
sputtering, then the government can take newly created money and
inject it into the economy, via a much-publicised process known as
quantitative easing. This causes the value of a currency to decrease.If
you suddenly double the number of dollars in circulation, then that
means there are two dollars where before there was only one.
Someone who had been selling a chocolate bar for a dollar will have
to double the price to make it worth the same as it was before,
because a dollar suddenly has only half its value. This is called
inflation, and it causes the price of goods and services to increase.
Inflation can be difficult to control, and can decrease people’s buying
power. Bitcoin was designed to have a maximum number of coins.
Only 21 million will ever be created under the original specification.
This means that after that, the number of bitcoins won’t grow, so
inflation won’t be a problem. In fact, deflation – where the price of
goods and services falls – is more likely in the bitcoin world.
 Why Should You Use Bitcoin?
• It’s as private as you want it to be: Sometimes, we don’t want people
knowing what we have purchased. Bitcoin is a relatively private currency. On
the one hand, it is transparent – thanks to the blockchain, everyone knows
how much a particular bitcoin address holds in transactions. They know
where those transactions came from, and where they’re sent. On the other
hand, unlike conventional bank accounts, no one knows who holds a
particular bitcoin address. It’s like having a clear plastic wallet with no visible
owner. Everyone can look inside it, but no one knows whose it is. However,
it’s worth pointing out that people who use bitcoin unwisely (such as always
using the same bitcoin address, or combining coins from multiple addresses
into a single address) risk making it easier to identify them online.
• You don’t need to trust anyone else: In a conventional banking system, you
have to trust people to handle your money properly along the way. You have
to trust the bank, for example. You might have to trust a third-party payment
processor. You’ll often have to trust the merchant too. These organizations
demand important, sensitive pieces of information from you. Because
bitcoin is entirely decentralized, you need trust no one when using it. When
you send a transaction, it is digitally signed, and secure. An unknown miner
will verify it, and then the transaction is completed. The merchant need not
even know who you are, unless you’ve arranged to tell them.
 Why Should You Use Bitcoin?
• It’s as private as you want it to be: Sometimes, we don’t want people
knowing what we have purchased. Bitcoin is a relatively private currency. On
the one hand, it is transparent – thanks to the blockchain, everyone knows
how much a particular bitcoin address holds in transactions. They know
where those transactions came from, and where they’re sent. On the other
hand, unlike conventional bank accounts, no one knows who holds a
particular bitcoin address. It’s like having a clear plastic wallet with no visible
owner. Everyone can look inside it, but no one knows whose it is. However,
it’s worth pointing out that people who use bitcoin unwisely (such as always
using the same bitcoin address, or combining coins from multiple addresses
into a single address) risk making it easier to identify them online.
• You don’t need to trust anyone else: In a conventional banking system, you
have to trust people to handle your money properly along the way. You have
to trust the bank, for example. You might have to trust a third-party payment
processor. You’ll often have to trust the merchant too. These organizations
demand important, sensitive pieces of information from you. Because
bitcoin is entirely decentralized, you need trust no one when using it. When
you send a transaction, it is digitally signed, and secure. An unknown miner
will verify it, and then the transaction is completed. The merchant need not
even know who you are, unless you’ve arranged to tell them.
 Why Should You Use Bitcoin?
• You own it: There is no other electronic cash system in which your account
isn't owned by someone else. Take PayPal, for example: if the company
decides for some reason that your account has been misused, it has the
power to freeze all of the assets held in the account, without consulting you.
It is then up to you to jump through whatever hoops are necessary to get it
cleared, so that you can access your funds. With bitcoin, you own the private
key and the corresponding public key that makes up a bitcoin address. No
one can take that away from you (unless you lose it yourself, or host it with a
web-based wallet service that loses it for you).
• You can create your own money: In spite of the amazing advances in home
office colour printing technology, most national governments take a fairly
dim view of you producing your own money. With bitcoin, however, it is
encouraged. You can certainly buy bitcoins on the open market, but you can
also mine your own if you have enough computing power. After covering
your initial investment in equipment and electricity, mining bitcoins is simply
a case of leaving the machine switched on, and the software running. And
who wouldn't like their computer to earn them money while they sleep?
 Why Should You Use Bitcoin?
• You own it: There is no other electronic cash system in which your account
isn't owned by someone else. Take PayPal, for example: if the company
decides for some reason that your account has been misused, it has the
power to freeze all of the assets held in the account, without consulting you.
It is then up to you to jump through whatever hoops are necessary to get it
cleared, so that you can access your funds. With bitcoin, you own the private
key and the corresponding public key that makes up a bitcoin address. No
one can take that away from you (unless you lose it yourself, or host it with a
web-based wallet service that loses it for you).
• You can create your own money: In spite of the amazing advances in home
office colour printing technology, most national governments take a fairly
dim view of you producing your own money. With bitcoin, however, it is
encouraged. You can certainly buy bitcoins on the open market, but you can
also mine your own if you have enough computing power. After covering
your initial investment in equipment and electricity, mining bitcoins is simply
a case of leaving the machine switched on, and the software running. And
who wouldn't like their computer to earn them money while they sleep?
 Why Should You Use Bitcoin?
• You own it: There is no other electronic cash system in which your account
isn't owned by someone else. Take PayPal, for example: if the company
decides for some reason that your account has been misused, it has the
power to freeze all of the assets held in the account, without consulting you.
It is then up to you to jump through whatever hoops are necessary to get it
cleared, so that you can access your funds. With bitcoin, you own the private
key and the corresponding public key that makes up a bitcoin address. No
one can take that away from you (unless you lose it yourself, or host it with a
web-based wallet service that loses it for you).
• You can create your own money: In spite of the amazing advances in home
office colour printing technology, most national governments take a fairly
dim view of you producing your own money. With bitcoin, however, it is
encouraged. You can certainly buy bitcoins on the open market, but you can
also mine your own if you have enough computing power. After covering
your initial investment in equipment and electricity, mining bitcoins is simply
a case of leaving the machine switched on, and the software running. And
who wouldn't like their computer to earn them money while they sleep?
 Bitcoin Disadvantages

• Lack of Awareness & Understanding (which is

why you are here)
• Risk and Volatility
• Still Developing
 Bitcoin in India
• Mark-up of around 15-20% to the international price
• Regulation is not clear
• Total Number Of Cryptocurrency Exchange Startups In
India: 15
• Year Most Of The Cryptocurrency Exchange Startups
Were Launched In: 2017
• Most Common Cryptocurrencies & And Number Of
Platforms Offering Them: Bitcoin , Ethereum, Ripple &
Litecoin
• Mukesh Ambani is introducing JIOCOIN
• Infosys is looking to introduce its own cryptocurrency &
blockchain tech
 Bitcoin in India

• Axis Bank has started cross-border payments over the

blockchain using fintech company Ripple’s technology
• SBI - will be deploying a smart contract for KYC solution
over BankChain
• YES Bank is using a smart contract developed by fintech
startup Cateina Technologies on a blockchain which will
allow Bajaj Electricals to process disbursement of funds
and discounting to its vendors.
• ICICI Bank created a blockchain application and piloted
transactions on its blockchain network in partnership with
Emirates
 Bitcoin in other nations
• Bitcoin in Belguim: The Federal Public Service Finance has also given Bitcoin a
value-added tax exempt status
• Bitcoin in Cyprus: Authorities adopted a neutral stance in relation to Bitcoin. The
island legislature does not have any regulations or controls related to the digital
currency
• Bitcoin in the UK: The UK Financial Conduct Authority is favoring the
cryptocurrency and plans to advance its regulatory framework to make it more
Bitcoin-friendly
• Bitcoin in Switzerland: The Swiss are now moving towards regulation of Bitcoin
slowly and steadily. The government has classified the digital currency as a
foreign currency
• Bitcoin in Italy: Italian government believes that certain regulations and
oversight is necessary in relation to Bitcoin transactions. This is done in order to
prevent the use of digital currencies in illegal activities
• Bitcoin in the Netherlands: The Dutch have granted Bitcoin transaction a status
of barter transactions. This implies that it does not need to follow specific
licensing or compliance rules. The Dutch Finance Minister has stated: “Bitcoin is
not a financial product as defined by law, purchase or sale of bitcoins is not a
financial service either, so the financial services act does not apply”
 Bitcoin in other nations
• Bitcoin in France: The French have set onerous regulation and a form of Green listing on the
Bitcoin sector. This implies that the French government is claiming that it is necessary that
any exchange or wallet must hold data about the user, which is not a feature of Bitcoin
• Bitcoin in Singapore: The government of Singapore has declared Bitcoin as a good to buy
another, thus determining the taxation need. The Monetary Authority of Singapore also
obliged exchanges and ATM provides to Green list, similar to the French Bitcoin law
• Bitcoin in Japan: Bitcoin in Japan is a big trend. Japanese government has a positive stance
in relation to the Digital currency, in spite of the Mt. Gox Bitcoin’s $460 Million Disaster.
Back in March 2014, Japanese authorities ruled out that Bitcoin must be self-regulated.
Presently, the country is striving to ensure the safest transactions in Bitcoin
• Bitcoin in Israel: Bitcoin in Israel is also gaining momentum. At the moment, the Israeli
government is seeking introduction of the tax on Bitcoin.
• Bitcoin is legal in Canada
• Bitcoin is legal in the United States, partially
• Bitcoin in Austria: Bitcoin Bank in Austria. Austrian postal services provider Österreichische
Post has confirmed it is now offering offline exchange trading for bitcoin, ether, dash and
litecoin in a collaboration with Bitpanda, a Vienna-based cryptocurrency exchange.
• Cryptocurrency in Russia: Russian President Vladimir Putin endorsed cryptocurrency and
Bitcoin rival, Ethereum, earlier this year. Russian state-owned development bank
Vnesheconombank (VEB) and other government ministries unveiled a blockchain research
center to be headquartered at the National University of Science and Technology in Moscow
 Other Cryptocurrencies
• Ethereum
• Litecoin
• Dash
• Monero
• Ripple
• Bitcoin Cash
• Bitcoin Gold & many more
 Exchanges in India

• Unocoin
• Zebpay
• Coinome
• Coinbase
• Coinsecure
• Koinex
 Exchanges in India

• Unocoin
• Zebpay
• Coinome
• Coinbase
• Coinsecure
• Koinex
 Global Exchanges
• Bitfinex
• Bithumb
• GDAX
• BTCC
• Poloniex
• Bitstamp
• bitFlyer
• Gate
• Binance
 Global Exchanges
• Bitfinex
• Bithumb
• GDAX
• BTCC
• Poloniex
• Bitstamp
• bitFlyer
• Gate
• Binance
 Hardware Wallets

• Ledger Nano S
• Trezor
• KeepKey
• CoolWallet
• Jaxx – Windows Desktop Application
• The Swiss Bank in Your Pocket – Windows Desktop
Application
• Armory – Windows Desktop Application
 Hardware Wallets

• Ledger Nano S
• Trezor
• KeepKey
• CoolWallet
• Jaxx – Windows Desktop Application
• The Swiss Bank in Your Pocket – Windows Desktop
Application
• Armory – Windows Desktop Application
 Latest News

• Indian IT Dept is finding ways to tax Bitcoin

• Israeli Prime Minister (PM) Benjamin Netanyahu claimed
that Bitcoin could replace banks
• Saudi, UAE Central Banks Team Up to Test
Cryptocurrency
• GMO Internet Inc., a multi-billion dollar Japanese
technology conglomerate, will process salaries of its
4,710 full-time employees in bitcoin.
 Positive Blockchain Developments

• Microsoft looking to build a business-friendly blockchain-

as-a-service (BaaS) platform
• Microsoft has been integrating BaaS modules into Azure,
which is its cloud computing platform
• Microsoft has been a founding member of the Enterprise
Ethereum Alliance which is a move towards exploring
business adaptations of blockchain technology
• Stratis partnered with Microsoft over a year ago to enable
blockchain-as-a-service (BaaS) for the Azure Marketplace
• Ripple counts Standard Chartered Bank, Bank of America
Merril Lynch, UBS Group, Mizuho etc as partner banks
 Positive Blockchain Developments

• Microsoft looking to build a business-friendly blockchain-

as-a-service (BaaS) platform
• Microsoft has been integrating BaaS modules into Azure,
which is its cloud computing platform
• Microsoft has been a founding member of the Enterprise
Ethereum Alliance which is a move towards exploring
business adaptations of blockchain technology
• Stratis partnered with Microsoft over a year ago to enable
blockchain-as-a-service (BaaS) for the Azure Marketplace
• Ripple counts Standard Chartered Bank, Bank of America
Merril Lynch, UBS Group, Mizuho etc as partner banks
Step by step process to buy Bitcoin in India
• Step 1: Open an account with an Indian & foreign
exchanges by following their KYC process
• Step 2: Linking Bank Account is a must as no exchange
will accept any cash money
• Step 3: Once linked you just have to transfer INR into that
account to buy Bitcoins or any other crypto currency
available with the exchange
• Step 4: Buy the crypto currencies you are interested to
buy through the exchange. Your coins will be deposited in
the exchange wallets
• Step 5: If you intend to hold your currencies for a long
time then buy a hardware wallet like Ledger Nano, Trezor
& KeepKey
 What is an ICO ?

• Initial Coin Offering or Token Sale

• Blockchain project offering their
cryptocurrency in exchange of bitcoin /
ethereum
• Most ICO’s are held by startups in early
stages
 WHAT IS AN ICO ?

• INITIAL COIN OFFERING OR TOKEN SALE

• BLOCKCHAIN PROJECT OFFERING THEIR
CRYPTOCURRENCY IN EXCHANGE OF BITCOIN /
ETHEREUM
• MOST ICO’S ARE HELD BY STARTUPS IN EARLY
STAGES
 Types of ICO

• Security tokens – debt or equity

• Utility tokens – right to use a product /
service or a specific function of the
blockchain
 ICO Landscape

• Last quarter of 2017 has seen the highest

number of launches in ICO ever
• In q2 of 2017 ICO’s US $797 million ~ INR
5300 crores
• Top 3 ICO = Bancor, Status & TenX
 ICO LANDSCAPE

• LAST QUARTER OF 2017 HAS SEEN THE HIGHEST NO

OF LAUNCHES IN ICO EVER
• IN Q2 OF 2017 ICO’S RAISED
USD 797 MILLION = INR 5300 CRORES
• TOP 3 ICO = BANCOR, STATUS & TENX
Questions ?