Document 2497055

Bitcoin – a digital currency
and its underlying technology
The Bitcoin is a digital currency and one of the most popular topics in the last
months. But not just the fact that Bitcoin is decentralized and works apparently on
its own is fascinating but also the technology that underlies the cryptocurrency.
The blockchain technology makes that the transactions work without a central
institution and therefore the money is transferred directly between the participating
parties. With its possibilities of usage it can get such a disruptive innovation like the
internet was.
Source: Financial News, Forrester Research, TEDx Talks
Key facts of the bitcoin
max. 10
minutes
21
2009
million
Bitcoin was
launched with
the first
trans-action –
within 6 years it
rocketed
are needed to
verify a
trans-action
is the limit of
Bitcoins that
can ever be
created and
used
150,000
is the number of
transactions that
are performed
averagely per day
Source: Economist
What Makes It So Popular? What Needs to Be Kept in Mind?
Benefits
Cheap
•
•
•
•
•
Decentralized
Price is volatile
Cost of
maintaining
the blockchain
might rise
No central
institution that
is responsible
in case of
mistakes
Fast
Reliable
Simple
Transparent
Paying with Bitcoin
is not everywhere
possible
Legal
status is
questionable
Keep in Mind
Source: The Economist, Financial Times, Financial Times, TEDx Talks, Financial News, BBC, coindesk.com
Blockchain
The technology that makes bitcoin so strong
Blockchain is NOT Bitcoin
Blockchain
Crypto-Currency
Crypto-Technology
•
A crypto-currency is merely one application
of crypto-technology, allowing the transfer of
1. value
A crypto-currency
merely
via transactions is
recorded
on aone
Blockchain.
application of crypto-
1. The crypto-technology, or
Blockchain, is the technology with
which the Bitcoin functions.
•
2. The Blockchain does not require
crypto-currency.
technology,
allowing
the transfer
There
are many existing
crypto-currencies,
of value
via Bitcoin.
transactions recorded on
most
notably
a Blockchain.
Specific
to currencies or finance, benefits
include preventing double spending, and
2. There are many existing cryptosingle ledger arrived at by consensus.
•
3. It is similar to the work of banks,
where bookkeepers kept track of
every transaction. The blockchain
represents that books as a big
computer file and every block of the
blockchain therefore represents one
transaction. Block after block it starts
the creation of a chain of
transactions.
currencies, most notably Bitcoin.
Source: PwC
What does it have to do with me?
Challenges to Core Strategic & Operating Models
that would require specific actions
Potential Future State
Current State
Unknown
user
Known
user
Known
user
Unknown
user
Known
user
Unknown
user
Central
authority
Known
user
Known
user
Unknown
user
Known
user
Central
authority
Source: PwC
Benefits of blockchain
Reduced
Transaction Time
• peer-to-peer
Reduced Cost
Increased Security
network and
• Significant savings by • System requires
decentralization
banks and end-users
multiple network
lead to fast
by bypassing existing
users to authorize
transaction
intermediaries
transactions
settlement (a few
• Decentralized
• No single point of
minutes) compared
network reduces
failure given the use
to days currently
technology
of distributed
• Near real-time
networks
infrastructure costs
settlement
Increased
Transparency
• Publicly accessible
(but coded)
historical record
of all transactions
• Public ledger
allows effective
monitoring and
auditing
Source: PwC
Some usage cases of blockchain
The car leasing process is administered
and processed through the blockchain
where one could choose the options of
the car leasing, including the insurance
and other modalities, among others.
The blockchain technology can
be used to transfer the
ownership of a piece of land
without the need of a notary.
Land Registry
The technology helps to
track the origin of diamonds
or other things of value.
Diamonds
The blockchain prove sthe
ownership of a company or
even the amount of the
dividend that the owner is
allowed to receive.
Source: BBC, The Telegraph, Forrester Research
© 2016 PwC Mexico. All rights reserved.
Car Leasing
Possibilities
of the
Blockchain
technology
Equity,
Shares,
Dividends
Banks,
Financial
Institutions
Digital currency is used to test the
efficiency of financial transactions.
Consulting
The blockchain technology is used on an
internal platform where own blockchain
applications can be build.