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INTRODUCING CRYPTOCURRENCY

Article · October 2017

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Alexander Okhuese Victor

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Alexander Victor Okhuese INTRODUCING CRYPTOCURRENCY
Cryptocurrency
A cryptocurrency (or crypto currency) is a digital asset
designed to work as a medium of exchange using
cryptography to secure the transactions and to control the
creation of additional units of the currency.1
Cryptocurrencies are classified as a subset of digital
currencies and are also classified as a subset of alternative
currencies and virtual currencies.
Bitcoin, which is regarded as one of the most populous
cryptocurrency, was created in 2009 as the first
decentralized cryptocurrency2. Since then, numerous other
cryptocurrencies have been created.3 They are frequently
called “altcoins” as a blend of bitcoin alternative. 4 Bitcoin
and its derivatives use decentralized control5 as opposed
to centralized electronic money/centralized banking
systems.6 The decentralized control is related to the use of
bitcoin’s blockchain transaction database in the role of a
distributed ledger.
Source: Paymentsleaders.com
Overview of Cryptocurrency
Decentralized cryptocurrency is produced by the entire
cryptocurrency system collectively, at a rate which is
defined when the system is created and which is publicly
known. In centralized banking and economic systems such
as the Federal Reserve System, corporate boards or
governments control the supply of currency by printing
units of fiat money or demanding additions to digital
banking ledgers. In the case of decentralized
1 Andy Greenberg (20 April 2011). “Crypto Currency”. Forbes.com.
Retrieved 8 August 2014.
2 What is Bitcoin? http://bitguru.co.uk/bitcoininfo/ biGuru News
retrieved 24 October 2017
3 Tasca, Paolo (7 September 2015). “Digital Currencies: Principles,
Trends, Opportunities, and Risks”. SSRN 265798
4 Wilmoth, Josiah. “What is an Altcoin?”. Cryptocoinsnews.com Retrieved
4 March 2014.
5 McDonnell, Patrick “PK” (9 September 2015). “What is the difference
between Bitcoin, Forex, and Gold”. NewsBTC. Retrieved 15 September
2015.
6 Allison, Ian (8 September 2015). “If Banks Want Benefits of Blockchains,
They Must Go Permissionless”. NewsBTC. Retrieved 15 September 2015.
READS Capital, Schemas Group
cryptocurrency, companies or governments cannot
produce new units, and have not so far provided backing of
other firms, banks or corporate entities which hold asset
value measured in it. The underlying technical system
upon which decentralized cryptocurrencies are based was
created by the group or individual known as Satoshi
Nakamoto.7
As of October 2017, over a thousand cryptocurrency
specifications exist; most are similar to and derived from
the first fully implemented centralized cryptocurrency,
bitcoin. Within cryptocurrency systems the safety,
integrity and balance of ledger are maintained by a
community of mutually distrustful parties referred to as
miners: members of the general public using their
computers to help validate and timestamp transactions
adding them to the ledge in accordance with a particular
timestamping scheme. Miners have a financial incentive to
maintain the security of a cryptocurrency ledger.
Most cryptocurrencies are designed to gradually decrease
production of currency, placing an ultimate cap on the
total amount of currency that will be in circulation
mimicking previous metals (Andy, 2011). Compared with
ordinary currencies held by financial institutions or kept
as cash on hand, cryptocurrencies can be more difficult for
seizure by law enforcement (Andy, 2011). This difficulty is
derived from leveraging cryptographic technologies. A
primary example of this new challenge of law enforcement
comes from the Silk Road case, where Ulbricht’s bitcoin
stash “was held separately and encrypted”8.
Cryptocurrencies such as bitcoin are pseudonymous,
though additions such as Zerocoin have been suggested,
which would allow for true anonymity.9
History of cryptocurrency
In 1998, Wei Dai published a description of "b-money", an
anonymous, distributed electronic cash system. 10 Shortly
thereafter, Nick Szabo created "bit gold".11 Like bitcoin and
other cryptocurrencies that would follow it, Bit Gold was
7 Economist Staff (31 October 2015). “Blockchains: The great chain of
being sure about things”. The Economist. Retrieved 18 June 2016.
8 The FBI’s Plan For the Millions Worth of Bitcoins Seized From Silk Road,
Forbes, 4 October, 2013
9 Matthew Green (26 May 2013). “Zerocoin: Anonymous Distributed E-
Cash from Bitcoin”. John Hopkins University.
10 Wei Dai (1998). “B-Money”.
11 “Bitcoin: The Cryptonarchists’ Answer to Cash”. IEEE Spectrum.
“Around the same time, Nisc Szabo, a computer scientist who now blogs
about law and the history of money, was one of the first to imagine a new
digital currency from the ground up. Although many consider his scheme,
which he calls “bit gold”, to be a precursor to Bitcoin”.
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Alexander Victor Okhuese INTRODUCING CRYPTOCURRENCY
an electronic currency system which required users to
complete a proof of work function with solutions being
cryptographically put together and published. A currency
system based on a reusable proof of work was later
created by Hal Finney who followed the work of Dai and
Szabo.
The first decentralized cryptocurrency, bitcoin, was
created in 2009 by pseudonymous developer Satoshi
Nakamoto. It used SHA-256, a cryptographic hash function,
as its proof-of-work scheme.12 In April
2011, Namecoin was created as an attempt at forming a
decentralized Domain Name Servers (DNS), which would
make internet censorship very difficult. Soon after, in
October 2011, Litecoin was released. It was the first
successful cryptocurrency to use script as its hash function
instead of SHA-256. Another notable
cryptocurrency, Peercoin was the first to use a proof-of-
work/proof-of-stake hybrid.13 IOTA (Distributed Ledger
Technology) was the first cryptocurrency not based on a
blockchain, and instead uses the Tangle. 14 Many other
cryptocurrencies have been created though few have been
successful, as they have brought little in the way of
technical innovation.15 On 6 August 2014, the UK
announced its Treasury had been commissioned to do a
study of cryptocurrencies, and what role, if any, they can
play in the UK economy. The study was also to report on
whether regulation should be considered.16
The evolution of cryptocurrency memes, and bitcoin
street art 17
Block Bills
Matthias Dorfelt created a type of physical bitcoin that
looks similar to the fiat money. He used the hashes fro 64
random blocks and turns them into an eccentric design
that was created by his own software. He further created
his own symbols for the hexadecimal numbers that he
used along the bottom of every bill. Dorfelt acknowledged
the work of Satoshi where he created the bill with codes
except the signature of the name of “Satoshi” on the bill
where he used the number of transfers stored in each
block to tell the worth of each bill.
12 Jerry Brito and Andrea Castillo (2013). “Bitcoin: A Primer for
Policymakers”. Mercatus Center. George Mason University. Retrieved 22
October 2013.
13 Wary of Bitcoin? A guide to some other cryptocurrencies, ars tecnica,
26-05-2013
14 Sonstebo, David (2016). “IOTA First Chapter Synopsis”.
15 Are Any Altcoins Currently Useful? No, Says Monero developer
Riccardo Spagni”. Bitcoin Magazines. Retrieved 31 May 2016.
16 UK Launches initiative to explore potential of virtual currencies”. The
UK News. Retrieved 8 August 2014.
17 Jamie Redman (2017). “The Evolution of Cryptocurrency Visuals,
Memes, and Bitcoin Street Art”. Emerging Markets
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Satoshi Gallery
Valentina Picozzi brought cryptocurrency to the masses
with Satoshi Gallery, a collection of crypto infused images
and wearable. He opined that “Bitcoin needed art” and
hence he created Satoshi Gallery. This Gallery includes
images of the most expensive slice of pizza, dollar bills
saying “oh no”, and an iconographic landscape of the other
crypto-related subjects.
Art for Crypto
Vesa Kivinen, the founder of Artevo Contemporary started
a new cryptocurrency infused platform called
ArtForCrypto.com. His work used various mediums such
as digital photography mixed with oil and canvas
paintings. The paintings consisted of visual depictions of
the bull and bear, Satoshi Nakamoto, and one called the
split among many others.
Phneep
Phneep is a crypto-artist and very good in pixel blending
as he is known for manipulating movie covers, logos, and
other images from pop-culture with bitcoin-related
imagery. After joining bitcoin in 2012, he decided to focus
on bitcoin satire in 2014 as he wanted to contribute to the
crypto-ecosystem, although he had coding limitations.
Friends of Satoshi
This is a resource for bitcoin artists and creators that aim
to empower a decentralized collective of individuals. The
team created a Zimnote series that consist of ten notes
hand painted or drawn. Each note contains a fractional
amount of bitcoin, and only four notes were publicly
released.
Cryptograffi
As an early bitcoin adopter, Cryptograffi was the first artist
to utilize a public-facing cryptocurrency wallet to receive
donations for street art. His work has been seen all over
the crypto-circuit, shared by luminaries, and featured in
online publications.
Conclusion
Cryptocurrency has come to stay and bitcoin and the
altcoins are the definitely the way forward to eliminate fist
money and go digital with payment systems in the world.
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