Blockchain FINTECH and BTC Name: Aakash K V

Introduction Ways for one to invest in the blockchain depending on the goals and risk tolerance Buy shares in ccompanies using blockchain (e.g., Visa, Walmart, and Siemens) on traditional stock exchanges like the NYSE. Invest in companies with Bitcoin on their balance sheet, but bookkeeping toompanies using blockchain Buy cryptocurrencies like Bitcoin or Ethereum directly on Centralized Finance (CeFi) or Decentralized (DeFi) exchanges.

RIM - PGDM SEMESTER 1
Subject: Crytocurrency
Name: Aakkash K V
Reg no: 211001
Section: A
BATCH: 2021-2023
(Group Discussion on)
Blockchain
FINTECH and
BTC

Crytocurrency
Table of Contents
Sl No Details Page No
1 Introduction 2
2. Blockchain 8
3. FINTECH 21
4. Bitcoin (BTC) 27
2

1. Introduction
• Meaning of cryptocurrency
• Internet money or Digital currencies secured by cryptography
• Cryptocurrencies let one transfer value faster and cheaper
across borders without a bank.
• Besides Bitcoin and Ethereum, other digital currency
examples include Polkadot (DOT), NEO, Cardano (ADA), Tether
(USDT), Binance Coin (BNB), and Litecoin (LTC).
3

1. Introduction
• Ways for one to invest in the blockchain depending on the goals
and risk tolerance
• Buy shares in ccompanies using blockchain (e.g., Visa, Walmart,
and Siemens) on traditional stock exchanges like the NYSE. You can
buy shares by using an online broker such
as Vanguard and Betterment (U.S.).
• Invest in companies with Bitcoin on their balance sheet,ompanies
using blockchain
• Buy cryptocurrencies like Bitcoin or Ethereum directly on
Centralized Finance (CeFi) or Decentralized (DeFi) exchanges.
• Invest in crypto exchange-traded funds (ETFs). ETFs are a basket of
securities that track an asset or index you can buy or sell on an
exchange throughout the day
• Invest in crypto mining companies such as Riot, Hive, Marathon.
4

1. Introduction
• Ways for one to invest in the blockchain depending on the goals
and risk tolerance
• Buy crypto hardware and mine cryptocurrency yourself.
• Invest in mining pools: An alternative to mining cryptocurrency
yourself is to join a mining pool. Mining pools pool together the
computational power of others on the network to improve the
chances of mining a block. The rewards for all blocks mined are
shared among miners in the pool. Slush Pool is a popular mining
pool.
• An investment strategy that is unique to the blockchain and
cryptocurrencies, is yield farming. It involves lending one’s
cryptocurrency to someone else via smart contracts. The lendee
pays the lender a fee for these services. Yield farmers often move
their cryptocurrency between different lending platforms to
maximize returns. A few yield farming platforms include Compound
Finance, Aave, and MarketDAO
5

1. Introduction
• Some Companies to invest in
• Banking: VISA MasterCard
• Supply chain: Walmart, Unilever
• Healthcare: Pfizer
• Energy: Shell, Siemens and Tesla
• Insurance: MetLife, Prudential
• Travel: Lufthansa, DHL
• Real estate: Brookfield
• Tech: Amazon, Microsoft, IBM, PayPal
• Exchanges: coinbase
• Mining: Hive, Marathon
6

2. Blockchain
• Meaning of blockchain
• A blockchain is essentially a digital ledger of transactions that
is duplicated and distributed across the entire network of
computer systems.
• Blockchain is a shared, immutable (unchangeable) (double
entry type) ledger that facilitates the process of recording
transactions and tracking assets in a business network
• It is a system in which a record of transactions made in bitcoin
(BTC) or another cryptocurrency are maintained across several
computers that are linked in a peer-to-peer network.
7

2. Blockchain
• Meaning of blockchain (book keeping concepts)
• Bookkeeping mostly relies on double-entry accounting to store
transactions. Single-entry accounting lacks transparency and
accountability, but double-entry accounting also has its pitfalls:
Entries are accounted for separately, making it difficult for one
counterparty to verify the other’s records.
• Records stored using traditional ledgers are also easy to tamper
with, meaning you can easily edit, remove, or add a record. As a
result, we cannot always trust that the information is accurate.
• Public blockchains solve both these problems – and the way we
trust – by evolving the traditional bookkeeping model to triple-
entry bookkeeping: transactions on a blockchain are
cryptographically sealed by a third entry. This creates a tamper-
proof record of transactions stored in blocks and verified by a
distributed consensus mechanism. 8

2. Blockchain
• Meaning of blockchain (book keeping concepts)
• These consensus mechanisms also ensure new blocks get
added to any blockchain. An example of a consensus
mechanism is proof-of-work (PoW), often referred to as
“mining.”
• Mining isn’t universal to all blockchains; it’s just one type of
consensus mechanism currently used by Bitcoin and
Ethereum, though Ethereum plans to move to another—
proof-of-stake.
• Primary concept of the Blockchain or Scalability Trilemma:
Decentralization, Security, and Scalability
9

2. Blockchain
• Meaning of blockchain (continued)
• Blockchains are typically managed by a peer-to-peer network
for use as a publicly distributed ledger, where nodes
collectively adhere to a protocol to communicate and validate
new blocks.
• Each transaction or record on the ledger is stored in a “block.”
• The information contained in a block is dependent on and
linked to the information in a previous block and, over time,
forms a chain of transactions. Hence the word blockchain.
10

2. Blockchain
• Meaning of blockchain (continued)
• Although blockchain records are not unalterable as forks are
possible, blockchains may be considered secure by design and
exemplify a distributed computing system with high Byzantine
fault tolerance.
• There are four types of blockchains:
• Public blockchains
• Private blockchains
• Hybrid blockchains or consortiums
• Sidechains
11

2. Blockchain
• Meaning of blockchain (continued)
• Public blockchains
• Public blockchains are open, decentralized networks of
computers accessible to anyone wanting to request or
validate a transaction (check for accuracy).
• Private blockchains
• Private blockchains are not open, they have access
restrictions. People who want to join require permission from
the system administrator. They are typically governed by one
entity, meaning they’re centralized.
12

2. Blockchain
• Meaning of blockchain (continued)
• Hybrid blockchains or consortiums
• Consortiums are a combination of public and private
blockchains and contain centralized and decentralized
features. For example, Energy Web Foundation, Dragonchain,
and R3.
• Sidechai
• A sidechain is a blockchain running parallel to the main chain.
It allows users to move digital assets between two different
blockchains and improves scalability and efficiency. An
example of a sidechain is the Liquid Network.ns
13

2. Blockchain
• Uses of blockchain
• Cryptocurrencies
• Smart Contracts
• Decentralized Banking
• Video Games/Art
• Peer to Peer Energy Trading
• Supply chain and logistics tracking
• Healthcare process optimization
• Real estate processing platform:
• NFT marketplaces: These are marketplaces that allow you to
buy nonfungible tokens (NFTs): digital tokens of things like
paintings and clothing.
14

2. Blockchain
• Uses of blockchain (continued)
• Music royalties tracking: Blockchain can trace music streams and
immediately pay those who contributed to a song.
• Anti-money laundering tracking system: Authorities can more
easily track the original source of money because every transaction
on the blockchain is recorded and leaves behind a tamper-proof
trail.
• Personal identity security: Traditional systems for storing identities
are insecure and fragmented. Blockchain provides a unified,
immutable, and interoperable infrastructure so you can store and
manage records securely and efficiently.
• New insurance distribution methods: For example, peer-to-peer
insurance, parametric insurance, and micro-insurance.
• Automated Advertising Campaigns: Advertisers can use smart
contracts to automate advertising campaigns, e.g., an audience is
only shown an ad when specific criteria are met.
15

2. Blockchain
• Founders of blockchain
• The blockchain was popularized by a person (or group of
people) using the name Satoshi Nakamoto in 2008 to serve as
the public transaction ledger of the cryptocurrency bitcoin,
based on work by Stuart Haber, W. Scott Stornetta, and Dave
Bayer.
• The invention of the blockchain for bitcoin made it the first
digital currency to solve the double-spending problem
without the need of a trusted authority or central server. The
bitcoin design has inspired other applications[3][2] and
blockchains that are readable by the public and are widely
used by cryptocurrencies.
16

2. Blockchain
• Benefits of blockchain
• Trusted: automated trusted transactions between
counterparties who do not need to know each other.
Transactions are only executed when programmed conditions
are met by both parties.
• Unstoppable
• Immutable
• Decentralized
• Lower cost
• Peer to Peer
• Transparent
• Universal Banking
17

2. Blockchain
• Disadvantages of blockchain
• Environmental Impact: Blockchain networks like Bitcoin use a
lot of electricity to validate transactions, leading to
environmental concerns
• Personal Responsibility: One of blockchains and
cryptocurrencies’ most significant advantages is also its
biggest weakness. When one invests in public open-source
blockchains by mining or buying cryptocurrencies and store it
in one’s cryptocurrency wallet (the wallet is like a bank
account, except only the owner can access it and have the
passwords), only the owner can control the money.
• If one loses the seed phrases – the list of words that give one
access to recover wallets – there is no recourse (compared to
banks where one can reset your password). The money is lost
forever.
18

2. Blockchain
• Disadvantages of blockchain (continued)
• Growing Pains: Even though public blockchains remain more
efficient than traditional banking systems, decentralization
comes at the cost of scalability. Trying to grow blockchain
networks to global capacity, in turn, is the root cause of speed
inefficiencies. It’s why, Bitcoin can only process a maximum of
seven and 30 transactions, respectively, compared to Debit
card or Credit card Visa’s 24,000.
• False Narratives: Description associated with the transaction
need not be accountable or associated with real intent. Some
cryptocurrencies are undoubtedly used in unlawful activity
19

3. Fintech
• About Fintech
• FinTech or fintech stands for Financial Technology, and fintech
firms specialize in technology growth to support the banking and
financial industries.
• Fintech refers to the integration of technology into offerings by
financial services companies in order to improve their use and
delivery to consumers. ·
• Financial technology is the technology and innovation that aims to
compete with traditional financial methods in the delivery
of financial services. It is an emerging industry that uses technology
to improve activities in finance.[3] The use of smart
phones for mobilebanking, investing, borrowing services, and
cryptocurrency are examples of technologies aiming to make
financial services more accessible to the general public
20

3. Fintech
• About Fintech (continued)
• Financial technology has been used to
automate investments, insurance, trading, banking services and risk
management.
• The services may originate from various independent service
providers including at least one licensed bank or insurer. The
interconnection is enabled through open APIs and open
banking and supported by regulations such as the
European Payment Services Directive.
• Robo-advisers are a class of automated financial advisers that
provide financial advice or investment management online with
moderate to minimal human intervention. They provide digital
financial advice based on mathematical rules or algorithms, and
thus can provide a low-cost alternative to a human advisers.
21

3. Fintech
• About Fintech (continued)
• Fintech companies use a variety of technologies,
including artificial intelligence (AI), big data, robotic process
automation (RPA), and blockchain.
• AI algorithms can provide insight on customer spending
habits, allowing financial institutions to better understand
their clients. Chatbots are another AI-driven tool that banks
are starting to use to help with customer service.
• Big data can predict client investments and market changes in
order to create new strategies and portfolios, analyze
customer spending habits, improve fraud detection, and
create marketing strategies.
22

3. Fintech
• About Fintech (continued)
• Robotic Process Automation is an artificial intelligence
technology that focuses on automating specific repetitive
tasks.RPA helps to process financial information such as
accounts payable and receivable more efficiently than the
manual process and often more accurately.
• Blockchain is an emerging technology in finance which has
driven significant investment from many companies.The
decentralized nature of blockchain can eliminate the need for
a third party to execute transactions.
23

3. Fintech
• About Fintech (continued)
• Challenges: High startup costs
• Fintech companies often face doubts from financial regulators
like issuing banks and the Federal Government
• Data security is another issue regulators are concerned about
because of the threat of hacking as well as the need to
protect sensitive consumer and corporate financial data.
Leading global fintech companies are proactively turning to
cloud technology to meet increasingly stringent compliance
regulations.
• Any data breach, no matter how small, can result in direct
liability to a company and ruin a Fintech company's
reputation.
• The online financial sector is also an increasing target
of distributed denial of service extortion attacks. 24

4. Bitcoin (BTC)
• Summary on Bitcoin
• The Bitcoin network is a public, decentralized peer-to-peer
payment network that allows users to send and
receive bitcoins without a bank getting involved. The digital
currency or bitcoin token uses the ticker symbol BTC, and is
the only cryptocurrency traded on the Bitcoin network.
• Transactions are recorded using a digital ledger, and nodes
ensure the PoW (Proof of Work) consensus mechanism is
followed (or that mining happens). For many, Bitcoin seems
complicated, but it isn’t when you view it as a combination of
three things.
25

4. Bitcoin (BTC)
• Summary on Bitcoin
• A peer-to-peer payment system: You can send money (BTC)
from one person or company to another without the need for
a bank. Sending money this way is faster, more secure, and
cheaper than using traditional methods.
• A decentralized system like the Internet, so it’s not controlled
by one entity and cannot be stopped by a third party.
• A store of value
26

4. Bitcoin (BTC)
• Mining Process used in Bitcoin
• When sending Bitcoin, you pay a small fee (in bitcoin) for a
network of computers to confirm your transaction is valid.
Your transaction is then bundled with other transactions
pending in a queue to be added to a new block.
• The computers (nodes) then work to validate this list of
transactions in the block by solving a complex mathematical
problem to come up with a hash, which is a 64-digit
hexadecimal number.
• Once solved, the block is added to the network—and your
fee, combined with all other transaction fees in that block, is
the miner’s reward. It’s that simple.
27

4. Bitcoin (BTC)
• Mining Process used in Bitcoin (continued)
• Each new block added to the network is assigned a unique key
(via cryptography). To obtain each new key, the previous
block’s key and information are inputted into a formula.
• As new blocks are continually added through the ongoing
mining process, they become increasingly secure and harder
to tamper with. Anyone caught trying to edit a record will
simply be ignored. All future blocks then depend on
information from prior blocks—and this dependency from
one block to the next forms a secure chain: the blockchain.
28

References
Related URLs
https://blockgeeks.com/guides/what-is-blockchain-technology/
https://en.wikipedia.org/wiki/Financial_technology