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How Bitcoin Can and Will Disrupt The Financial System

BITCOIN IS Banking пл HOW CRYPTOCURRENCY CAN AND WILL DISRUPT THE CURRENT FINANCIAL SYSTEM The recent emergence of cryptocurrency has the POTENTIAL TO CHANGE THE WAY PEOPLE BUY AND SELL SERVICES throughout the world. Near the end of 2013, bitcoin alone approached a $ 14 billiont market capitalization. 0.7% Bitcoin and altcoins have gained rapid momentum, but there is still much more room for IMPACT. Each day, the amount of bitcoins traded is equal to only 0.7% of the credit card transaction volume in the U.S. alone. TRANSACTIONS VALUE PER DAY (in $USD) U.S. CREDIT CARD TRANSACTIONS (2013) $11.2 billion PAYPAL TRANSACTIONS WORLDWIDE (2013) $493 million WESTERN UNION WORLDWIDE (2013) $225 million BTC TRANSACTIONS WORLDWIDE (Last 6 months ending June 15, 2014) $78.2 million However, to truly understand why cryptocurrency could change the game, one must look at how and why our financial institutions were created in the first place. THE ORIG INS OF BANKING & PAYMENT SYSTEMS BANKING OVER TIME Retail banking as we know it took thousands of years to develop. It has taken THOUSANDS OF YEARS for the financial system to develop. However, retail banking has always relied on many of the same principles: ANCIENT TIMES Security Before banks, people used to store currency at temples for safety. A SAFE PLACE TO KEEP MONEY Some of the first financial intermediaries were "money changers", merchants who would take money in one currency, and exchange it to another for a profit. Convenience AN EASY WAY TO ACCESS THEIR MONEY 14 TH CENTURY Modern banking begins in early Renaissance Italy. Saving & Investing TO GROW MONEY THROUGH INTEREST AND ACCESS TO INVESTMENTS 15 TH CENTURY The world's oldest continually operating bank, Monte die Paschi di Siena, is founded in 1472. In order to offer these services, banks and other intermediaries need to pay rent, staff & other expenses. Thus, adding additional costs and inefficiencies to consumer transactions. 17 TH CENTURY THESE COSTS ARE WELL EMBEDDE D IN THE S YSTEM: Cheques are invented in England. ACCOUNT FEES WIRE TRANSFER COSTS CHEQUE COSTS MERCHANT FEES 19 TH CENTURY ATM FEES Bills are used for the first time. OVERDRAFT FEES ATM It is not until today that people have a new method to bypass these intermediaries and transact directly with one another. 20 TH CENTURY ATMS, electronic payment systems, and online services are all offered for the first time. THE INNOVATION OF THE QUICK RISE OF BITCOIN & ALTCOINS CRYPTOCURRENCY Instead of having a person or company as an intermediary in a transaction, cryptocurrencies use a mechanism called the BLOCKCHAIN. In just SIX SHORT YEARS, the popularity of cryptocurrencies have soared. LEDGER AVG BTC TRANSACTIONS PER DAY: ($USD) 2010 <$100,000 2011 $1.1 MILLION 2012 $1.7 MILLION 2013 $40.5 MILLION 2014 $74.3 MILLION The blockchain is a public ledger of transactions that is TRUSTED, SECURE, AND SHARED. Cryptography allows it to happen, and it removes the middleman. Today, over 100,000 MERCHANTS accept bitcoin. Each transaction is verified extensively by the network to be true, so it is NEAR IMPOSSIBLE FOR A FRAUDULENT TRANSACTION. NOTABLE COMPANIES OTHER CRYPTOCURRENCIES SPUN OFF OF BITCOIN PROTOCOL EXPEDIA WORDPRESS SHOPIFY LITECOIN PEERCOIN d sh NETWORK N NAMECOIN DOGECOIN: DISH NETWORK REDDIT VIRGIN GALACTIC What does it all mean? The marriage of concepts behind bitcoin and cryptocurrency creates the opportunity to disrupt traditional finance and even other areas of life: P2P BLOCKCHAIN Self-sustaining. public ledger OPEN SOURCE Interactions without intermediaries Code is public and can be built upon LEDGER LED DECENTRALIZED CRYPTOGRAPHY Enforces integrity of blockchain No central authority 010011 10101 101010 101001 011010 001011 10101 01010 00101 NETWORK Massive computing power Examples of how this CAN & WILL DISRUPT THE ECONOMY Every year, billions of dollars go to companies that process transactions - in the digital age, this is as simple as transferring digits between computers. PAYMENT SYSTEMS Inefficient Transaction Efficient Transaction (No intermediary) (Intermediaries: Bank, Credit Card, etc.) YOU BUY LUNCH FOR $20 YOU BUY LUNCH FOR 0.03 BTC BITCOINS GO DIRECTLY TO VENDOR AND TRANSACTION IS VERIFIED TO BE TRUE BY NETWORK CREDIT CARD CHECKS WITH YOUR BANK 3 CREDIT CARD SENDS MONEY MERCHANT GETS 0.0299 BTC TO RESTAURANT'S BANK, (0.0001 BTC fee to miners, AND CHARGES 3% who process transaction) (merchant gets $19.40) IN THIS CASE FEE WORKS OUT TO 0.3% 10X 4 MORE EFFICIENT! CREDIT CARD CHARGES YOU INTEREST / ANNUAL FEES Cryptocurrencies remove the middleman and make the transaction more efficient. BANK ACCOUNTS The average Canadian SPENDS NEARLY $200 IN BANK FEES each year. BANK BITCOIN Allows you to keep money safe and make transactions for a Allows you to store money safe in a digital or paper wallet at virtually no cost. Bitcoin also has a known monthly fee. money supply (21 million BTC) Risk Risk Bank run, fiat money with Without proper preventative unknown future risks measures, someone could (inflation, deflation) break into wallet Cryptocurrencies remove the middleman and make it more efficient. DOWN THE ROAD Because bitcoin is open source, mechanisms such as the blockchain can be built upon to spur even more financial innovation. It's never easy to predict how disruptive technologies will be applied, but here are some that experts have identified: ESCROW SERVICES DIGITIZING BUY HARD ASSETS SUCH AS GOLD FOR LIQUID TRADING STOCKS, TRADING FOREX, & BONDS USING DIGITAL CURRENCIES BITCOIN BASED LOANS PAYMENT SYSTEMS CONNECTING INSURANCE BITCOIN TO RELATED BIG RETAILERS SERVICES And some less obvious areas: WWw. STOCK EXCHANGES VOTING MUSIC DISTRIBUTION INTERNET DNS CRYPTOCURRENCIES AND THE BLOCKC HAIN ARE CHANGING THE GAME FAST. THIS DISRUPTIVE TECHNOLOGY CAN AND WILL TRANSFORM OUR ECONOMY. THE MIGHTY TITANS OF THE FINANCIAL WORLD BANKS, INSURERS, CREDIT CARDS, PAYMENT SYSTEMS, AND EXCHANGES MAY BE THE NEXT INDUSTRIES FUNDAMENTALLY DISRUPTED BY THE DIGÍTAL REVOLUTION. NF Newnote Financial CSE: NEU / ESE: 1W4 Did you enjoy this graphic? You can donate here: BITCOIN DOGECOIN Visual Capitalist is a new way to discover business opportunities and learn about investment trends. VISUAL CAPITALIST @visualcap f /visualcapitalist ........ :...........•…............... TSCUOR ..... ...... %24 org don 57478689976-8

How Bitcoin Can and Will Disrupt The Financial System

shared by visualcap on Jul 13
Bitcoin and other altcoins have the very real potential to disrupt the existing financial system as we know it. In this infographic we look at the future of bitcoin and the blockchain, and what it could hold.


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