BITCOIN REPORT OFFICIAL

TỔNG LIÊN ĐOÀN LAO ĐỘNG VIỆT NAM TON DUC THANG UNIVERSITY - R REPORT SUBJECT: MACROECONOMIC TOPIC: BITCOIN – THE CURRENCY OF SECOND HALF OF 21ST CENTURY Lecture: Pham Van Quynh Group members Tran Hai Yen Nhi B20K0122 Vo Duy Thang B20K0134 Phan Minh Huy 720K0229 Phong My Hanh B20K0132 Ngo Huynh Duy Khang 720K0791 Hoang Ha Chi B20K0130 Ho Chi Minh City, 21 December 2021 Group BITCOIN REPORT Group BITCOIN REPORT TABLE OF CONTENT 1.WHAT IS THE BITCOIN 2/ HISTORY OF BITCOIN BITCOIN & FUNTION OF MONEY 3.1 Medium Of Exchange 3.2 Unit Of Value 3.3 Store Of Value BITCOIN & CHARACTERISTIC OF MONEY 4.1 Easy Standardized 4.2 Widely Accepted 4.3 Divisible 10 4.4 Not Deteriorate Quickly 11 4.4 Easy To Carry 12 HOW DOES BITCOIN WORK? 13 5.1 WHAT IS BITCOIN MINING? 13 5.2 HOW DOES BITCOIN MAKE MONEY? 14 BUYING BITCOIN: PROS AND CONS 15 BITCOIN’S PRICE HISTORY 17 7.1 WHICH FACTORS INFLUENCE CURRENT BITCOIN PRICE? 20 7.2 SHOULD PEOPLE BUY BITCOIN? 21 7.3 WHERE CAN PEOPLE BUY BITCOIN? 22 IS BITCOIN DIFFERENT 23 FROM TRADITIONAL CURRENCIES? 23 8.1 COULD CRYPTOCURRENCIES (BITCOIN) REPLACE CASH? 23 8.2 ARE CRYPTOCURRENCIES AND FIAT MONEY THE SAME? 24 BITCOIN REPORT – GROUP MACROECONOMICS Group BITCOIN REPORT 1.WHAT IS THE BITCOIN Bitcoin, which debuted in 2009, is a decentralized digital currency that eliminates the need for intermediaries such as banks and governments, instead relying on a peer-to-peer computer network to confirm transactions directly between users The government that issues fiat money backs and regulates it Bitcoin, on the other hand, is powered by a combination of networking technology and softwaredriven cryptography, the science of sending secret information that only the sender and receiver can read This results in a currency backed by code rather than physical items of value such as gold or silver, or by trust in central financial authorities Group BITCOIN REPORT 2/ HISTORY OF BITCOIN The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto The currency began use in 2009 when its implementation was released as opensource software Bitcoins are created as a reward for a process known as mining Group BITCOIN REPORT BITCOIN & FUNTION OF MONEY 3.1 Medium Of Exchange • Money’s most important function is as a medium of exchange to facilitate transactions Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another • The difficulty with a barter system is that in order to obtain a particular good or service from a supplier, one has to possess a good or service of equal value, which the supplier also desires In other words, in a barter system, exchange can take place only if there is a double coincidence of wants between two transacting parties The likelihood of a double coincidence of wants, however, is small and makes the exchange of goods and services rather difficult • Money effectively eliminates the double coincidence of wants problem by serving as a medium of exchange that is accepted in all transactions, by all parties, regardless of whether they desire each other’s goods and services 3.2 Unit Of Value Group BITCOIN REPORT Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase 3.2.1 PRICE OF BITCOIN o Latest Bitcoin = 8227.10USD = /Equivalent to/ 191,403,563 VND However, Bitcoin price is not stable, in recent transactions, Bitcoin price always has a bullish transaction o The time in the table is based on international time, so please +1 day Vietnam time Group BITCOIN REPORT 3.3 Store Of Value A store of value is an asset that’s capable of retaining value over time If you purchased a good store of value today, you could be reasonably certain that its value would not depreciate over time In the future, you would expect the asset to be worth Group BITCOIN REPORT just as much (if not more so) When you think of such a “safe haven” asset, gold or silver probably come to mind Bitcoin is already a store of value within the world of cryptocurrencies and could be embraced on a wider scale Gold has been accepted as a store of value globally for centuries, but the amount available on Earth is finite and the mining rate has been relatively stable, with World Gold Council estimates of above-ground supply increasing about 1-2% a year To be more simple, in the past (up to now), we all considered gold as money, but finite gold and gold could not be born from heaven, but had to dig gold Similar to bitcoin, we can liken bitcoin to "Digital gold" (presently, “Digital Currency”); to have it, it must be mining, and is as finite as gold because only 21 million Bitcoins are issued BITCOIN & CHARACTERISTIC OF MONEY 4.1 Easy Standardized a In the case of bitcoin and other digital currencies, however, there is no standardized physical representation (like a dollar bill) — the assets exist only in digital form There's also no regulation b It examines the lessons from the “Classical Gold Standard” period, 18801914, for the bitcoin standard The paper describes the “rules of the game” that countries on the gold standard were supposed to follow 4.2 Widely Accepted As mentioned, Bitcoin is already a store of value within the world of cryptocurrencies and could be embraced on a wider scale However, it’s not unaccpted in few nations: Vietnam, Group BITCOIN REPORT 4.4 Not Deteriorate Quickly Bitcoin supply restrictions could lead to demand as a store of value, therefore sell-ability across time okay 11 Group BITCOIN REPORT 4.4 Easy To Carry Bitcoin payments are processed through a connected personal computer network through a sharing program.Each transaction is recorded simultaneously in a "blockchain" on each computer that updates and informs all accounts.So this is purely a transaction on the internet and computers, we can trade with people thousands of kilometers away in just a few moments, even much faster than cash.This means that buyers never have to go to a bank or store to buy a product.In addition, unlike online payments made with bank accounts, (or credit cards), personal information is not necessary to complete any transaction  Save the procedure (saves time) ➢ So everyone only needs a phone, or personal computer, to be able to trade in Bitcoin 12 Group BITCOIN REPORT HOW DOES BITCOIN WORK? Each bitcoin (trading symbol "BTC"; "XBT" is also used) is a computer file that is stored in a digital wallet on a computer or smartphone My group will go over the cryptocurrency's workings in greater detail to help you understand how it works • Blockchain: Bitcoin is powered by blockchain, an open-source code that generates a shared public ledger of transactions organized into "blocks" that are "chained" together to prevent tampering This technology creates a permanent record of each transaction and is at the heart of the more than 10,000 cryptocurrencies that have sprung up in the wake of bitcoin • Private and public keys: A bitcoin wallet contains a public key and a private key that work together to enable the owner to initiate and digitally sign transactions, thereby providing proof of authorization • Bitcoin miners: Miners, or members of the peer-to-peer platform, independently confirm the transaction using high-speed computers, usually within 10 to 20 minutes 5.1 WHAT IS BITCOIN MINING? 13 Group BITCOIN REPORT • Bitcoin miners, also known as "nodes," own high-speed computers that independently confirm each transaction and add a completed "block" of transactions to the ever-growing "chain," which contains a complete, public, and permanent record of every bitcoin transaction • Miners are compensated in bitcoin for their efforts, incentivizing the decentralized network to independently verify each transaction This independent network of miners also reduces the possibility of fraud or false information being recorded, because the majority of miners must confirm the authenticity of each block of data before it is added to the blockchain, a process known as "proof of work." 5.2 HOW DOES BITCOIN MAKE MONEY? • Bitcoin value follows the law of supply and demand — and because demand waxes and wanes, there’s a lot of volatility in the cryptocurrency’s price • Besides mining bitcoin, which requires technical expertise and an investment in high-performance computers, most people purchase bitcoin as a form of currency speculation — betting that the market value of one bitcoin will be higher in the future than it is today But that's difficult to predict Bitcoins can be stored in two kinds of digital wallets: • Hot wallet: Digital currency is stored in the cloud on a trusted exchange or provider, and accessed through a computer browser, desktop or smartphone app • Cold wallet: An encrypted portable device much like a thumb drive that allows you to download and carry your bitcoins Basically, a hot wallet is connected to the internet; a cold wallet is not But you need a hot wallet to download bitcoins into a portable cold wallet 14 Group BITCOIN REPORT BUYING BITCOIN: PROS AND CONS Bitcoin cons • Price volatility While the value of bitcoin has risen dramatically over the years, the fortunes of buyers have varied greatly depending on the timing of their investment Those who bought in 2017 when bitcoin was nearing $20,000, for example, would have to wait until December 2020 to recoup their losses Moreover, despite the fact that 2021 has been a strong year for bitcoin, it lost half of its value between April and July before recovering and reaching new highs in November • • • • Hacking concerns While supporters claim that the blockchain technology underlying bitcoin is more secure than traditional electronic money transfers, bitcoin hot wallets have proven to be a tempting target for hackers A number of high-profile hacks have occurred, such as the news in May 2019 that more than $40 million in bitcoin was stolen from several high-net-worth accounts on cryptocurrency exchange Binance (the company covered the losses) Limited (but growing) use In May 2019, telecommunications giant AT&T joined companies such as Overstock.com, Microsoft and Dish Network in accepting bitcoin payments But these companies are the exception, not the rule Not protected by SIPC The Securities Investor Protection Corporation insures investors up to $500,000 if their brokerage fails or their funds are stolen, but cryptocurrency is not covered by this insurance Environmental concern As we mentioned above, the only way to explore new bitcoins is to mine This action requires an enormous amount of power to operate computer systems to mine bitcoin As the result, these computer systems requires a large amount of electricity, which certainly does harm for the environment In some 15 Group BITCOIN REPORT • countries – such as China, Peru, Kazakhstan where electricity price is cheap, many bitcoin miners have come their to bitcoin mining This tendency has decrease living standard of local resident in which bitcoin mining occurs Political economic As we have known that issue money is the priviledge of the central bank Now the central bank even can not issue bitcoin, this may affect to fiscal policy of the country If certain country not have enough modern facility to mine bitcoins, the wealth gap between countries will be broaden largely Bitcoin pros • Private, secure transactions anytime — with fewer potential fees Once you have bitcoin, you can transfer it whenever and wherever you want, reducing the time and potential cost of any transaction Transactions not include personal information such as a consumer's name or credit card number, reducing the risk of consumer information being stolen for fraudulent purchases or identity theft (Keep in mind, however, that in order to buy bitcoins on an exchange, you must first link your bank account.) • The potential for big growth Some investors who buy and hold the currency are betting that once bitcoin matures, greater trust and more widespread use will follow, and therefore bitcoin’s value will grow • Decentralization Following the financial crisis and the Great Recession, some investors are eager to embrace an alternative, decentralized currency — one that is essentially independent of traditional banks, governing authorities, or other third parties • Publicity As we mentioned above, basically, bitcoin is an application of blockchain – which is the technology almost unchangeable and public for everyone to observe Every transaction of bitcoin will be recorded and public for everyone to observe This is the innovation in daily transaction 16 Group BITCOIN REPORT BITCOIN’S PRICE HISTORY • 2009–2015 When Bitcoin was first introduced in 2009, its price was zero On July 17, 2010, its value increased to $.09 Bitcoin's price increased once more on April 13, 2011, from $1 to a high of $29.60 by June 7, 2021, a gain of 2,960 percent in three months Following a sharp decline in cryptocurrency markets, Bitcoin's price fell to $2.05 by mid-November The price rose from $4.85 on May to $13.50 by August 15 the following year 2012 was a relatively uneventful year for Bitcoin, but 2013 saw significant price gains It began the year trading at $13.28 and reached $230 on April 8; an equally rapid deceleration followed, with the price dropping to $68.50 a few weeks later on July Bitcoin was trading at $123.00 in early October; by December, it had risen to $1,237.55 before plummeting to $687.02 three days later Bitcoin prices fell throughout 2014, peaking at $315.21 at the start of 2015 2016–2020 Prices gradually increased throughout 2016, reaching over $900 by the end of the year Bitcoin's price hovered around $1,000 in 2017 until it broke $2,000 in mid-May, when it skyrocketed to $19,345.49 on December 15 Investors, governments, economists, and scientists took notice, and other entities began developing cryptocurrencies to compete with Bitcoin 17 Group BITCOIN REPORT For the next two years, Bitcoin's price fluctuated sideways with brief bursts of activity In June 2019, for example, there was a resurgence in price and trading volume, with prices exceeding $10,000 However, by mid-December, it had dropped to $6,635.84 The economy shut down in 2020 due to the COIVD-19 pandemic—price Bitcoin's exploded once more The value of the cryptocurrency at the start of the year was $6,965.72 The pandemic shutdown and subsequent government policy exacerbated investors' concerns about the global economy, hastening Bitcoin's rise At the end of the day on November 23, Bitcoin was worth $19,157.16 Bitcoin's price reached just under $29,000 in December 2020, having risen 416 percent since the beginning of the year • 2021–Present Bitcoin broke its 2020 price record in less than a month in 2021, surpassing $40,000 on January 7, 2021 As Coinbase, a cryptocurrency exchange, went public in mid-April, Bitcoin prices reached new all-time highs of over $60,000 for the first time Institutional interest pushed its price even higher, and Bitcoin reached a high of more than $63,000 on April 12, 2021 18 Group BITCOIN REPORT Prices had dropped by half by the summer of 2021, with the lowest being $29,795.55 on July 19 Autumn experienced another bull run in September, with prices reaching $52,693.32 before plummeting to $40,709.59 about two weeks later On November 7, 2021, Bitcoin reached an all-time high of $67,549.14 Bitcoin fell to $49,243.39 in early December 2021 before fluctuating further as investors were alarmed by the emergence of a new variant of COVID-19, Omicron 19 Group BITCOIN REPORT  Bitcoin Price Predictions (source: predictions/) https://time.com/nextadvisor/investing/cryptocurrency/bitcoin-price- Conservative predictions of Bitcoin say the cryptocurrency will reach $100,000 by 2023 Here are some predictions we found, ranked from low to high over the next year:  Ian Balina • • • Point of View: Bitcoin investor and founder of crypto research and media company Token Metrics Prediction: $75,000 by the end of 2021 Why: Technical data certainly proves $100,000 isn’t out of the question, but Balina told NextAdvisor he prefers to take a more conservative stance  Matthew Hyland • • • Point of View: Technical analysis and blockchain data analyst Prediction: $250,000 by January 2022 Why: According to Hyland's Twitter account, Bitcoin passing the $100,000 mark will trigger a euphoric bull run Hyland used the 150 percent increase in Bitcoin from $8,000 to $20,000 immediately after Thanksgiving in 2017 as an example  Robert Breedlove • • • Point of View: Founder and CEO of the digital assets marketing and consulting firm Parallax Digital Prediction: $307,000 by October 2021 (now passed), and $12.5 million by 2031 Why: Following COVID-19, inflationary forces will boost interest in cryptocurrency, pushing the price of Bitcoin higher than prior estimates Breedlove also mentioned in an interview earlier this year that the fourth quarter of 2021 is around 510 days after a "halving" event, in which Bitcoin's algorithm lowers the incentive for mining transactions on the blockchain Previous halving episodes, according to Breedlove, have been followed by new highs 500 days later 7.1 WHICH FACTORS INFLUENCE CURRENT BITCOIN PRICE? Bitcoin and other cryptocurrency prices, like other currencies, products, or services within a country or economy, are determined by perceived value as well as supply and demand By design, only 21 million Bitcoins will ever be created As long as demand remains constant or increases, the closer Bitcoin gets to its limit, the higher its price will be 20 Group BITCOIN REPORT SUPPLY AND DEMAND Bitcoins are generated at a predetermined rate by mining software and hardware This rate divides in half every four years, slowing the creation of coins Following the laws of supply and demand, the price of Bitcoin should continue to rise as its supply may not be able to meet its demand—as long as it remains popular However, if Bitcoin's popularity dwindles and demand falls, there will be more supply than demand, and the price will fall unless it retains its value for other reasons FAST FACT Economic circumstances can also affect Bitcoin's price as seen during the COVID-19 pandemic Another factor influencing Bitcoin's price is supply and demand; Bitcoin has also evolved into a tool that investors and financial institutions use to store value and generate returns Brokers, investors, and traders are creating and trading derivatives in order to further influence Bitcoin's price Speculation, investment product hype, irrational exuberance, or investor panic and fear can all be expected to have an impact on Bitcoin's price, as demand rises and falls in tandem with investor sentiment Other cryptocurrencies may also have an impact on Bitcoin's price There are several cryptocurrencies, and the number is growing as regulators, institutions, and merchants address concerns and accept them as forms of payment and currency Finally, if consumers and investors believe that other coins will prove to be more valuable than Bitcoin, demand will fall, dragging prices down with it—or demand will rise, dragging prices down, if sentiments shift in the opposite direction 7.2 SHOULD PEOPLE BUY BITCOIN? Bitcoin is a highly speculative and volatile investment It's important to remember that stock trading can provide a similar rush — and picking stocks from established companies is generally less risky than investing in bitcoin (A common rule of thumb is to allocate a small portion of our overall portfolio to individual stocks or speculative assets such as bitcoin.) 21 Group BITCOIN REPORT 7.3 WHERE CAN PEOPLE BUY BITCOIN? There are several ways to obtain bitcoin, but the following are the most common: • Bitcoin ATMs There are more than 26,000 bitcoin ATMs in the U.S (Search Coin ATM Radar to find one near you.) • Investment brokerage firms Robinhood was the first mainstream investment firm to provide bitcoin and other cryptocurrencies (Robinhood Crypto is available in the majority, but not all, of the United States.) Cryptocurrency trading is also available in most U.S states through Tradestation, eToro, and Sofi Active Investing • Exchanges for cryptocurrencies There are numerous exchanges both in the United States and abroad Coinbase is the largest cryptocurrency exchange in the United States, offering over 100 cryptocurrencies • Of the online brokerages and cryptocurrency exchanges that NerdWallet reviews, the following currently offer bitcoin The following online brokerages and cryptocurrency exchanges are currently offering bitcoin, according to NerdWallet Available for: Binance.US Access to buy and sell nearly 60 cryptocurrencies Coinbase Access to buy and sell nearly 100 cryptocurrencies eToro Trading platform with access to 17 cryptocurrencies Gemini Ability to buy and sell more than 50 cryptocurrencies 22 Group BITCOIN REPORT Robinhood Seven cryptocurrencies including bitcoin, bitcoin cash and ethereum SoFi Active Investing Offers more than 20 cryptocurrencies for trading including bitcoin, ethereum and litecoin TradeStation Offers trading for five cryptocurrencies, including bitcoin, bitcoin cash and ethereum Webull Offers 10 cryptocurrencies for trading, including bitcoin, bitcoin cash, ethereum and litecoin Kraken Offers more than 90 cryptocurrencies IS BITCOIN DIFFERENT FROM TRADITIONAL CURRENCIES? • • Fiat currencies are a physical medium of exchange with unlimited supply that is issued and controlled by a government, bitcoin, on the other hand, has a set maximum supply of 21M coins and is not controlled by any government or entity Both crypto and fiat currencies coexist alongside each other and have their advantages and disadvantages Bitcoin has some resemblances to fiat money: value changes according to market variables, as a virtual currency is used to buy things or pay for services, load cards and people already use it in their daily lives as any other fiat currency, but this is where similarities end 8.1 COULD CRYPTOCURRENCIES (BITCOIN) REPLACE CASH? • Bitcoin seemed to be the undisputed leader at the beginning of the cryptocurrency boom Bitcoin accounted for the vast majority of the industry's market price until early this year, while Ethereum, Ripple, and other currencies pushed to catch up in a matter of weeks While Bitcoin remains the most popular cryptocurrency, the industry's fast volatility has some analysts questioning whether cryptocurrencies are genuinely currencies 23 Group BITCOIN REPORT • Some believe that even more drastic changes are on the way Are you one of them? The notion that cryptocurrency may one day completely replace cash 8.2 ARE CRYPTOCURRENCIES AND FIAT MONEY THE SAME? • Cryptocurrencies are money in the sense that they allow two parties to exchange value and act as a store of value However, they also provide benefits that the traditional money system does not currently provide: cryptocurrencies can be spent and received by anyone, anywhere, at any time around the world, and without the need for a bank or a government This is the most ground-breaking aspect of cryptocurrencies • Furthermore, fiat money basically equates to debt When a central bank issues banknotes, it is simultaneously issuing you, the consumer, a percentage of your government’s debt How is this the case, you might logically ask? Think about how, for example, the EU and the United States create money Fiat money has attributed value because a government declares it legal tender – it has no intrinsic value • The majority of the money created by a government is when loans are made When people borrow money, banks create money Consider the US dollar: if no loans were made, there would most likely be no dollars in circulation In other words, the US dollar would not exist if consumers did not borrow money from banks • Unlike fiat money, which appears to derive a large portion of its value from debt, Bitcoin does not Beyond the trust of its community, Bitcoin has intrinsic value Bitcoin does not rely on a debt system; its value is determined by how effective it is as a medium of exchange Cryptocurrencies can be spent and received by anyone, anywhere, and at any time without the need for a bank or a government This is what makes them so revolutionary References 24 Group BITCOIN REPORT REFERENCE https://time.com/nextadvisor/investing/cryptocurrency/bitcoin-price-predictions/ https://www.forbes.com/sites/billybambrough/2021/12/09/us-could-embrace-crypto-in2022-huge-bitcoin-and-ethereum-price-prediction-revealed/?sh=16b821a4672a https://primexbt.com/for-traders/bitcoin-price-prediction-forecast/ https://coinmarketcap.com/currencies/bitcoin/ https://www.bitcoin.com/ https://www.coinbase.com/ https://en.wikipedia.org/wiki/History_of_bitcoin https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp https://finance.yahoo.com/quote/BTC-USD/history/ 25 ...Group BITCOIN REPORT Group BITCOIN REPORT TABLE OF CONTENT 1.WHAT IS THE BITCOIN 2/ HISTORY OF BITCOIN BITCOIN & FUNTION OF MONEY 3.1... CRYPTOCURRENCIES (BITCOIN) REPLACE CASH? 23 8.2 ARE CRYPTOCURRENCIES AND FIAT MONEY THE SAME? 24 BITCOIN REPORT – GROUP MACROECONOMICS Group BITCOIN REPORT 1.WHAT IS THE BITCOIN Bitcoin, which... entire bitcoin all at once Bitcoin is divided into units as small as 0.00000001 BTC, which makes bitcoin perfect for micropayments 10 Group BITCOIN REPORT 4.4 Not Deteriorate Quickly Bitcoin