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Digital Currency: Cryptocurrency: A New Kind of Money in The Modern Epoch

The document discusses cryptocurrency and how it uses cryptography and a decentralized blockchain ledger to allow for digital transactions without a central authority. Cryptocurrency like bitcoin uses a peer-to-peer network of miners who validate transactions by solving complex math problems and are rewarded with new cryptocurrency. The blockchain records all transactions in an ongoing linked list of record blocks that are secured through cryptography.

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Suzanne Buckley
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72 views13 pages

Digital Currency: Cryptocurrency: A New Kind of Money in The Modern Epoch

The document discusses cryptocurrency and how it uses cryptography and a decentralized blockchain ledger to allow for digital transactions without a central authority. Cryptocurrency like bitcoin uses a peer-to-peer network of miners who validate transactions by solving complex math problems and are rewarded with new cryptocurrency. The blockchain records all transactions in an ongoing linked list of record blocks that are secured through cryptography.

Uploaded by

Suzanne Buckley
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Digital Currency

Cryptocurrency: A New Kind of


Money in the Modern Epoch
History of Currency
What is cryptocurrency?
Cryptocurrency is a digital currency in which
transactions are verified and records maintained
by a decentralized system using cryptography,
rather than by a centralized authority.
Cryptography is a method of storing and
transmitting data in a particular form so that only
those for whom it is intended can read and
process it. In other words: a secret code!!

[Shhhh…“Crypto” means hidden or secret].


What is the medium of exchange?
The first decentralized cryptocurrency, bitcoin, was created in
2009 by a Japanese developer, Satoshi Nakamoto (a pseudonym;
many people have claimed to be Satoshi Nakamoto).

You buy Bitcoins through apps like Zebpay, UnoCoin, CoinSecure.


They will issue you a wallet.

Today one Bitcoin costs you somewhere around 18 lakhs. But


you can start with buying a part of a Bitcoin. The minimum
amount that is needed to begin investing in Bitcoins is around
Rs.500.
How does cryptocurrency work?
It works as a medium of
exchange wherein a payment
is made and individual
coin ownership records are
stored in a ledger existing in
the form of computerized 
database, using strong cryptography to
• secure transaction records,
• control the creation of additional coins
• verify the transfer of coin ownership
Could you put that into
plainer English?
It means buying and selling and trading with
“virtual money” on the Internet, person to
person, as someone in between keeps records.
What are the pros and cons?
• Speed
• Convenience
• Global reach
• Decentralized control

• Hacking
• Power failure
• Unregulated global person-to-person economy
How does the actual exchange work?

•Centralized bitcoin exchanges act as


intermediaries between a buyer (taker) and
seller (maker), for a fee.
•Decentralized bitcoin exchanges are user-to-
user, direct transactions.
•Bitcoin wallets are where a user can store
bitcoins with a private “key”
to authorize transactions.
How are the records kept?
A blockchain is the mechanism for keeping track of cryptocurrency
exchanges.

A blockchain is a distributed ledger that serves as a public financial


transaction database.

It is a chain of records stored in the form of blocks which are controlled by


no single authority across a computer network. Each block of data comes
from an individual.
The languge of the blockchain
The blockchain or continuously growing list
of records called blocks is linked and secured
using cryptography, or code.
Who maintains the blockchain?
In cryptocurrency networks, mining is a validation of transactions. The “miners”, or
“nodes” on the network, are people running
purpose-built computers that are actually competing to solve complex
mathematical problems in order to make a transaction go through.

For this effort, successful miners obtain new


cryptocurrency as a reward. 

Cryptocurrencies use various timestamping schemes


to"prove" the validity of transactions added to the
blockchain ledger, without the need for a trusted
third party.
Are bitcoins the only virtual currency used?

There are other digital currencies, with various


advantages. They are called “Altcoins” .
Litecoin aims to process a block every 2.5
minutes, rather than bitcoin's 10 minutes which
allows Litecoin to confirm transactions faster
than bitcoin.
 Another example is Ethereum, which is cheaper
to use, harder to fake and the most-actively
used blockchain in the world.
Want to know more?
Ask your Mathematics teacher!

Or your Computer teacher!

Or your Economics teacher!

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