Name: Karl Heintz Title: Introduction to Bitcoin General Purpose: To inform. Specific Purpose: To inform my audience about the development of Bitcoin, what Bitcoin is, and recent developments concerning Bitcoin.
Introduction I.
Attention Getter: What would your reaction be if I told you that there is a form of currency now worth over $1,000 USD per unit?
II.
Relevance of Topic to Audience: This actually describes a new currency called Bitcoin, which has been in the news over the recent year.
III.
Thesis Statement: Today you will learn about Bitcoin, a new form of ecurrency that has been in the news over the past year.
IV.
Speaker’s Credibility: I learned about Bitcoin a few years ago, and have been reading frequently about it since.
V.
Preview of Main Points: In this presentation you will learn a short history of Bitcoin’s development, what Bitcoin is, and about two recent developments concerning Bitcoin.
Transition/Connective to Body: I will now move onto some of the history of Bitcoin.
Body
I.
I will now talk a little bit about the history of Bitcoin. A. The basic idea of bitcoin began among a group now known as the “crypto-punks”, the group responsible for such developments as BitTorrent (AmherstMedia). B. In 1998, Wei Dai first suggested the idea of a new form of currency that “uses cryptography to control its creation and transactions, rather than a central authority” (Bitcoin Project). C. In 2009, a figure by the name of Satoshi Nakamoto published the paper “Bitcoin: A Peer-to-Peer Electronic Cash System”, which outlined how “crypot-currency” could work (Bitcoin Project). D. Shortly after the publication of this paper, Satoshi released the code for Bitcoin through a cryptography mailing list. Satoshi left the Bitcoin project to others in 2010 (Bitcoin Project).
Transition: Now that you know some of the history of Bitcoin’s development, I will now move onto a description of what Bitcoin is.
II.
I will now tell you what Bitcoin is. A. Gavin Andresen, principal of the BitCoin Virtual Currency Project: “The short, geeky answer is BitCoin is the world's first distributed electronic currency. If you are not a geek, some of those words probably don't make any sense to you. The non-geeky short answer is that it is a new kind of money that we are using on the Internet” (Andresen).
i. Basically, Bitcoin is an electronic form of currency. B. Bitcoin utilizes P2P (Peer-to-peer) technology, and is open-source and decentralized. i. Peer-to-peer technology: Bitcoin operates through a peer-to-peer system ii. Open-source: the source code is available to everyone to copy, edit, etc. As Gavin Andresen stated in his 2009 EconTalk interview, “Open source means that the source code, the computer programming language code, is available for anybody to look at; in this case it's available for anybody to take and modify, do whatever you like with it. Completely free and open” (Andresen). iii. Decentralized: No central organization manages or controls the movement of Bitcoins.
Transition: Now that you understand what Bitcoin is, you should know about two recent developments concerning the new e-currency.
III.
I am now going to talk about some recent developments concerning Bitcoin. A. The first major development concerning Bitcoin is the Mt. Gox crash earlier this year in February. i. According to the PBS Newshour segment “Virtual Bitcoins worth $425 million disappear”, Mt. Gox, an online Bitcoin exchange, lost 850,000 Bitcoins, which were valued at $425 million USD.
ii. Mark Karpeles, CEO of Mt. Gox, stated after the crash, “There was a weak area in the system, and, as a result, we lost Bitcoins. I am deeply sorry that I have caused trouble to everyone” (“Virtual Bitcoins worth $425 million disappear”). B. The second major development concerning Bitcoin is the IRS ruling that took place earlier this year. i. Earlier this year in March, the Internal Revenue Service ruled that Bitcoin will be considered property rather than currency for all legal and taxation purposes (Biggs). ii. According to John Bigg’s Techcrunch article "IRS Rules Bitcoin Is Property, Not Currency", “The IRS has officially stated that bitcoin is a property – similar to any other valuable commodity – rather than a currency. What does this mean? Not much. In short, if you pay someone in bitcoin – in the same way you could pay them in gold – the wages are taxed accordingly. It is also not considered legal tender but a capital asset” (Biggs). iii. In its ruling, the IRS wrote that “In some environments, virtual currency operates like ‘real’ currency … but it does not have legal tender status in any jurisdiction”, while for U.S. tax purposes, “A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property” (United States of America).
Transition to Conclusion: I will now move onto my final comments.
Conclusion I.
Restate Thesis: Today you have been informed about Bitcoin, an electronic currency.
II.
Review Main Points: I covered the history of Bitcoin, what Bitcoin is, and two recent developments.
III.
Closing Remarks: Perhaps my talk today has sparked an interest for some of you. Thank you for listening.
Bibliography AmherstMedia. “Making Money- Gavin Andresen @ Ignite Amherst.” Video recording, YouTube. YouTube, 17 Feb. 2011. Web. 4 Nov. 2014. Andresen, Gavin. "Andresen on BitCoin and Virtual Currency." Interview by Russ Roberts. Audio blog post. Library of Economics and Liberty. Liberty Fund, 4 Apr. 2011. Web. 3 Nov. 2014. Biggs, John. "IRS Rules Bitcoin Is Property, Not Currency." Web log post. Techcrunch. AOL Inc., 25 Mar. 2014. Web. 5 Nov. 2014. Bitcoin Project. "Frequently Asked Questions." FAQ. Bitcoin Foundation, n.d. Web. 05 Nov. 2014. “Virtual Bitcoins worth $425 million disappear.” PBS Newshour. PBS. KPBS, San Diego. 28 Feb. 2014. Television. Transcript.
United States of America. International Revenue Service. IRS Virtual Currency Guidance : Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply. By International Revenue Service. International Revenue Service, 25 Mar. 2014. Web. 5 Nov. 2014.
