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week-10/Assignments_beeline.html
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This week you have 1 assignment to complete.
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week-10/Bitcoin ecommerce (1)_beeline.html
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Bitcoin and e-commerce
ITS 836
What is Bitcoin?
Bitcoin is software-based online payment system described by Satoshi Nakamoto in 2008 and introduced as open-source software in 2009.
Payments are recorded in a public ledger using its own unit of account (Bitcoin).
is a form of digital currency (physical form is absent), created and held electronically. It can be used to buy things electronically and in that sense it is no different than conventional dollars.
Bitcoin is commonly referred to as cryptocurrency and it can be divided into smaller unit called Satoshi (one hundred millionth of a BTC).
What is Bitcoin based on?
System is run by The Bitcoin protocol
is based on mathematics unlike conventional currencies that had been based on fixed quantity of metal (gold, silver…) or fiat currencies.
Bitcoin has several features that set it apart from fiat currencies:
is decentralized
is easy to set up and it is fast
is anonymous
is completely transparent
Transaction fees are miniscule
Transactions are irreversible
Decentralized
Base for the Bitcoin protocol is a peer-to-peer system which means that there is no need for a third party.
Therefore, in theory, bitcoin network is not controlled by central authority (fully decentralized monetary system).
Bitcoins are being created by a community of people that anyone can join.
theory, there is no authority (financial institution) which can tinker with monetary policy and in that sense devalue or revalue Bitcoin currency.
.
Animosity & Transparency
Bitcoins are stored in wallet with digital credentials for your bitcoin holdings and allows you to access them.
Wallet uses public-key cryptography, in which two keys, one public and one private are generated. Public key can be thought of as an account number or name and the private key, ownership credentials.
Bitcoin is transferred to the next owner when the next owner gives a public key and previous owner uses his private key to publish a record into system announcing that the ownership has changed to the new public key.
Bitcoin protocol stores details of every single transaction that occurred in the network in huge version of general ledger (Block chain).
Negligible Fees
Bitcoin doesn’t charge fees for either national or international transfers.
Bitcoin is not the first private money, not the first digital currency, and not first currency based on cryptography, but it has been the first to rely on peer to peer network decentralization to avoid double spending.
Bitcoin protects against double spending by verifying each transaction added to the block chain to ensure that the inputs for the transaction had not previously already been spent.
Mining
Miners use special software to solve math problems (Bitcoin algorithm), and upon completing the task they receive certain amount of coins.
They are created each time a user discovers new block (finds hash value).
Software is creating new units until it reaches amount of 21 million unites (currency with Finite Supply).
The rate of block creation is approximately consistent over time (6 per hour) with 50 % reduction every four years.
Halving (in theory) continues until 2110-2140 when 21 million BTC have been issued.
Total Bitcoin Unit Supply Over Time
Period
Number of Units in Circulations
Obtaining Bitcoins
Earn Bitcoins from mining
Earn Bitcoins by accepting them as a means of payment
Earn Bitcoins trough trading
Earn Bitcoins as a regular income
Earn Bitcoin from interest payments
Various ways (donations, gambling, getting tipped, completing tasks on websites…)
Why the price of bitcoins soared and why it became the world pioneer in virtual currency field
Why the price of bitcoins soared and why it became the world pioneer in virtual currency field
Financial crisis that caused meltdown of the economy started 2008-2009.
caused a transfer of assets form real-estate and financial sphere to investment into commodities that are traditionally considered as a stable store of values.
Historically, Gold is best known commodity of that type because quantity of this metal is limited and, therefore, it is great way how to hedge your portfolio in times when usage of expansive monetary policy is highly likely.
this sense, bitcoin is similar to gold (except there is no intrinsic value) and when the value of gold started to decrease due to the price roof that it had reached and partial recovery of financial market, value of bitcoin soared because it was cleverly designed financial product with finite quantity.
Theoretical and Technical Problems
Illegal activities, speculations and nature of this currency
Theoretical base for digital currency usage
Regulation and taxation issue
Disputable status of independent and decentralized currency
Mining problems
Skepticism towards implementation of new, unregulated, theologies in finance sphere
Illegal Activities and Speculations
Can currency be anonymous and transparent at the same time?
Why would somebody give you approximately 27,000 $ for solving impractical mathematical equations?
According to Forbes, more than 90 percent of bitcoin accounts are in a buy-and-hold mode!
Regulating Virtual Currency
FED?
SEC?
Question: is bitcoin a security?
The strongest regulatory hook for deeming Bitcoin to be a security may be categorizing it a an “investment contract”.
think it’s important to understand that this is a payment innovation that’s taking place entirely outside the banking industry, The Federal Reserve simply does not have the authority to supervise or regulate Bitcoin in any way.”
Federal Reserve Chair Janet Yellen
Regulating Virtual Currency
US TREASURY?
Bitcoin Remains Impractical, Treasury Will Let it Be” BloombergBusinessWeek, 2014.
CFTC?
Investing in Bitcoins could come under CFTC jurisdiction as being a commodity for future delivery
CFTC would have a colorable claim to regulate derivative products of Bitcoins (i.e., Bitcoin futures, swaps, rolling spot Bitcoin transactions, etc.).
However, market for those products remains small and outside of the United States.
There are three ways how bitcoin generate income:
Since value of a bitcoin fluctuates, one can generate net income selling them at the higher price than the original purchase price (capital gains taxation).
they are received by merchants sa payment for goods and services.
Bitcoins obtained through mining activities are a subject of standard income taxation.
Can a country have an adequate taxation program if regulatory framework is not defined and if status of “currency or commodity” is unknown?
take the anonymity of bitcoin into account then one can simply deduct that tax evasion is not only feasible but inevitable.
Mining Problems
Using computing power of third parties to achieve faster mining performance (without knowledge and consent of the third party)
Distributed Denial of Service Attacks (DDoS)
The 51% cartel attack
Goldfinger attack
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week-10/ITS836 Intro Bitcoin_beeline.html
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Introduction to Bitcoin
ITS 836
What is Bitcoin?
Peer-to peer digital currency
public ledger of transactions
Mining
Cap of about 21 million bitcoins
Blockchain’s Three Parts
Private key cryptography
distributed network with a shared ledger
Auditing of transactions (mining)
Features of Bitcoin
Deflationary
Eight decimal places – 0.00000001
Minimal Transaction Fees
Consensus Driven – no central authority
Counterfeit Resilient
repudiation
.
Transaction Fees
The transaction fee is received by the bitcoin miner
Transaction fees are mining income in excess of “mined” coins
Transaction Fees
Transaction fees are voluntary – but kind of like tips
Ensures the a transaction gets reviewed
Fewer coins mined, but transaction fees ramp up
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week-10/Objectives_beeline.html
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By the end of this week, students should be able to:
Explain how Bitcoin developed
Describe Bitcoin
Identify security methods protecting cryptocurrencies
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week-10/Plagiarism_ How not to get caught and some writing tips_beeline.html
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It is easy to commit plagiarism by mistake; it can happen to anyone. Sometimes plagiarisms happen because we are writing so much on a topic, and we want to make sure we get it all on paper- however, that can lead to accidents in plagiarisms. Please view this presentation on how to avoid this trap, and a way to gather your thoughts down on paper and avoiding the plagiarism trap.
https://us-lti.bbcollab.com/recording/558196b037a041d2b481ffc8a0853075
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week-10/Reading Assignments_beeline.html
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Alejandro Mario Hernandez. (2019). Blockchain security as a global disruption for bitcoin and other applications. Revista Abierta de Informática Aplicada, 3(2), 23–30.
Aparecido Maciel da Silva, W., Brasil Martins, N. C., de Andrade Miranda, I., Silva da Penha, R., & Reina, D. (2020). Cryptocurrencies and Finance: The Relationship between the Return of Bitcoin and the Main Digital Currencies. Brazilian Journal of Management / Revista de Administração Da UFSM, 13(2), 394–407. https://doi.org/10.5902/1983465930491
Pavlus, J. (2018). The World Bitcoin Created. Scientific American, 318(1), 32–37.
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week-10/research-paper-4-pages.txt
This week’s reading centered around Bitcoin Economics. For this week’s research paper, search the Internet and explain why some organizations are accepting and other organizations are rejecting the use of Bitcoins as a standard form of currency. Your paper needs to identify two major companies that have adopted Bitcoin technology as well as one that has refused accepting Bitcoin as a form of currency. Be sure to discuss each organization, how they adopted (or why they won’t adopt) Bitcoin, and what recommendations you have for them to continue to support Bitcoin (or why they should support Bitcoin).
Your paper should meet the following requirements:
Be approximately four pages in length, not including the required cover page and reference page.
Follow APA7 guidelines. Your paper should include an introduction, a body with fully developed content, and a conclusion.
Support your answers with the readings from the course and at least two scholarly journal articles to support your positions, claims, and observations, in addition to your textbook. The UC Library is a great place to find resources.
Be clearly and well-written, concise, and logical, using excellent grammar and style techniques. You are being graded in part on the quality of your writing
week-10/Week 10 Overview – Bitcoin Economics_beeline.html
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Bitcoin’s History
Blockchain begins with the cryptocurrency Bitcoin. How did Bitcoin come about? The first notion of Bitcoin was a paper published in November 2008 on a cryptography mailing list. The paper authored by Satoshi Nakamoto was titled A Peer-to-Peer Electronic Cash System. “Satoshi” may be a pseudonym for a group of people. It is believed that the paper and its proposal was a response to the financial crisis of the late 2000s, exceptionally bad loan practices, dubious financial schemes, and a brittle banking system created enormous havoc across national economies.
Confidence was shattered. Bitcoin offered the opportunity to have a trustless monetary system and one in which banks and other financial intermediaries became unnecessary. After all, the status quo had failed so many and it was believed an alternative would be welcomed.
The term trustless can seem a little confusing because it suggests that we can’t trust it. But let’s explain: The existing financial markets rely heavily on a system of trust. For example, you deposit money in a bank and you expect and trust the bank to manage it for you. That reliance on trust has inherent risk. We saw that in the late 2000s during the Great Recession banking crisis. Therefore, if we build a system that does not rely on trust, which we’ll call trustless, then we can reduce the risk. Instead, the system should function on a set of unalterable digital rules.
In January 2009, only a few months after the paper was published, a first release of the proposed Bitcoin open source software appeared. Instead of software owned by someone, being open source allowed anyone to inspect, modify and enhance the software. From day one, the software enabled a creation of a digital currency absent of any intermediaries or governing authority and with no physical coins or notes. Fundamentally, it enabled anyone to send and receive money directly with anyone else. This notion is profoundly disruptive because it counters every contemporary concept we have of how money works. For one thing, how can a digital unit created from nothing possibly have value? For something to have value as payment, typically, it must be scarce and it must be accepted by others for payment. Gold, silver, diamonds, and oil for example all derive their value from being both scarce and expensive to mine. Most modern money originally derived value from being underpinned by the price of gold.
In the 20th century with popular currencies well established such as the dollar and pound, the gold connection was abandoned and they became fiat currencies. Those enforced and supported by governments. A digital currency cannot be born as a fiat currency because there is no supporting organization. It must be initially underpinned by some scarce resource. That scarce resource for Bitcoin is the process of running a hash algorithm to arrive at a predetermined data output as discussed previously. This requires increasing amount of processing power and electricity. After that, the currency can be freely exchanged and its value can fluctuate based on supply and demand just like regular currencies.
Review the PowerPoints (attached) – FYI Bitcoin Ecommerce PowerPoint is relevant for weeks 10 and 11
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week-9/Assignments_beeline.html
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This week you have 1 assignment to complete.
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week-9/discussion-1-page-work.txt
This week’s discussion centers around the concept of Blockchain. There is still much confusion regarding what Blockchain is and what it is not. Please discuss your explanation of Blockchain to include why it has been gaining so much popularity.
Write 250 words.
Use Scholarly articles and APA 7 format.
Mandatory to site the given 2 articles
week-9/Informational_ Literature Review_beeline.html
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As doctoral students, you will undertake an extensive review of the literature once you have decided on a topic. There are many ways to write a literature review. Here is one approach after you decided on a topic.
There is a wealth of writing help at UC’s writing Center: https://www.ucumberlands.edu/learningcommons/writingcenter
There are additional resources listed in the syllabus as well
Make sure as you are working on your your topic and conducting the literature review to visit the Graduate School, as you want to make absolutely certain you are following the guidelines written in the dissertation handbook: https://www.ucumberlands.edu/gradschool/dissertation (Select and download the dissertation handbook)
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week-9/Objectives_beeline.html
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By the end of this week, students should be able to:
Describe Blockchain
Explain how cryptocurrency is used within Blockchain
Identify models in Blockchain
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week-9/Reading Assignments_beeline.html
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Hossein Hassani, Xu Huang, & Emmanuel Silva. (2018). Big-Crypto: Big Data, Blockchain and Cryptocurrency. Big Data and Cognitive Computing, 2(4), 34. https://doi.org/10.3390/bdcc2040034
Narman HS, Uulu AD. Impacts of Positive and Negative Comments of Social Media Users to Cryptocurrency. 2020 International Conference on Computing, Networking and Communications (ICNC), Computing, Networking and Communications (ICNC), 2020 International Conference on. February 2020:187-192. https://doi.org/10.1109/ICNC47757.2020.9049693
Waldo, J. (2019). A Hitchhiker’s Guide to the Blockchain Universe. Communications of the ACM, 62(3), 38–42. https://doi.org/10.1145/3303868
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week-9/Week 9 – Discussion_beeline.html
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Initial post due Thursday
At least two peer responses due Sunday
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week-9/Week 9 Overview – Blockchain (Overview)_beeline.html
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Blockchain is the backbone Technology of Digital CryptoCurrency BitCoin.
A blockchain is a distributed software network that functions both as a digital ledger and a mechanism enabling the secure transfer of assets without an intermediary. Just as the internet is a technology that facilitates the digital flow of information, blockchain is a technology that facilitates the digital exchange of units of value. Anything from currencies to land titles to votes can be tokenized, stored, and exchanged on a blockchain network.
In addition to the secure transfer of value, blockchain technology provides a permanent forensic record of transactions and a single version of the truth – a network state that is fully transparent and displayed in real time for the benefit of all participants.
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