BitcoinStratégie

On Thursday 26 March 2015, the Pay Forum exhibition reviewed the virtual currency: the Bitcoin. Bitcoin_PayForum

The current situation of the bitcoin in the Hexagon

Participant: Benjamin May, Aramis Firm

  1. The revolutions of the currency

The currency is:

  • A means of payment and a measuring instrument
  • Values standard
  • A store of value

1st paperless office: Banknotes

2nd paperless office: the scriptural money

– Emergence of central banks

– Bretton Woods agreement: End of the gold standard

– The virtual currencies are decentralized

  1. Who has created the bitcoin and when?

Created by an “anonymous” person in 2008, Satochi Nakamato

  • A cryptocurrency
  • Transaction without bank and currency
  • Transaction carried out by sending a code to the recipient, without an intermediary
  1. Bitcoin functioning
  • Validation of transactions (Blockchain) and issuance of bitcoins (mining)
  • Use of cryptology to secure transactions: authentication and integrity
  • Wallet that consists of a public key and a private key, which allows the bitcoins holder to spend them
  • Limiting the number and the issuance speed of bitcoins
  1. The benefits of the bitcoin
  • Decentralized system that ensures the high security of transactions
  • No credit risk: bankruptcy of a debtor bank of several other banks
  • No liquidity risk: a risk that a bank may not have the necessary funds to make a payment
  • Little operational risk because it is a decentralized system
  • A real innovation regarding the validation of transactions
  1. The weaknesses of the bitcoin
  • High volatility
  • Security issues for users
  • Transactions that cannot be rejected
  • Fraud: hacking, Ponzi, false safety deposit boxes
  • Money laundering, illegal activities
  1. The development opportunities
  •  Low transaction costs
  • Increasing convertibility
    •   Coinbase, 1st bitcoin exchange platform approved in the US
  • Currency more and more accepted by commercial sites (Paypal, Rakuten, Expedia, Monoprix)
  • Initiatives to secure transactions
  • Development of derivatives market
  1. Threats on the development
  • Intrinsically inflationary system subject to price manipulation
  • Too strict control of the system that could slow down innovation
  • The bad buzz (MtGox platform in bankruptcy, 850.000 bitcoins stolen. An estimated loss of 350 million euro)
  • Bitcoin use for illicit purposes (silk road marketplace specialized in the sale of weapons and drugs)
  • Risk linked to the network (hacking, Bilstamp platform hacking in Europe)

Bitcoin: What are the opportunities available for the persons involved in payment?

Participant: Eric Larcheveque, the House of Bitcoin

  1. The facts, the reality, the issues
  • 3 billion people have no access to the banking system
  • -Use, facility
  • No need to enter the payment information anymore
  • Respect of personal data and payment data
  • Technology and interoperability
  • No central authority
  • Decentralized confidence
  • The mining replaces clearing houses
  • The bitcoin is more than a currency it is a technology
  • Technology will bring much more than the problems that the currency must face (money laundering)
  • Global impact
  • There is a bitcoins derivative market (securitization options)
  • Narrowness of the market, USA land is more welcoming
  • Political consensus on the bitcoin (suspicious countries: Russia, Ecuador, welcoming countries: USA, United Kingdom, Unwelcoming countries: France)
  • The Silicon Valley and Wall Street invest in the bitcoin

What about the technological developments linked to this innovation?

Participant: Gonzague Grandval, CEO, Paymium

  1. Elements regarding the bitcoin
  • Virtual or digital currency
  • Numerical value
  • It is a technology
  • It is a rare digital asset
  • Peer to peer transactions network
  • Decentralized database
  • All the transactions saved since 3 January 2009
  • All is signed, unencrypted
  • Everybody can see everything that circulates on the network
  • No regulation related to the bitcoin
  • Free technology
  • The bitcoin will change all the payment transactions
  • The transaction is signed through a private key
  1. Anonymity
  • Any transaction leaves a clear and indelible mark (unencrypted database)
  • Maintaining your anonymity depends on you, maintaining your anonymity depends on others
  • Need to develop analytical tools of the blockchain (entry point, exit point)
  • Mining : Another way to create bitcoin (100 miners cooperatives)