RIM PGDM Semester 1 Cryptocurrency: Blockchain, Fintech, and Bitcoin

This assignment, a group discussion for a PGDM Semester 1 course, delves into the multifaceted world of cryptocurrency, exploring key concepts such as blockchain technology, Fintech, and Bitcoin (BTC). The document provides a comprehensive introduction to cryptocurrencies, explaining their meaning, functionalities, and examples beyond Bitcoin, including Polkadot, Ethereum, and others. It outlines various investment avenues within the blockchain ecosystem, from investing in blockchain-based companies and cryptocurrencies directly to exploring ETFs and crypto mining. The discussion further elaborates on blockchain's core principles, contrasting it with traditional bookkeeping and highlighting its advantages in terms of trust, immutability, and decentralization. The assignment examines the four types of blockchains – public, private, hybrid, and sidechains – and their respective applications. It also covers the uses of blockchain in cryptocurrencies, smart contracts, supply chain, and healthcare, among others. The discussion concludes with a brief overview of Fintech, its integration with financial services, and the technologies it uses, including AI, big data, RPA, and blockchain itself, along with the challenges faced by Fintech companies.

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