TABLE OF CONTENTS

TOPIC PAGE NO

DECLARATION 2

CERTIFICATE 3

ACKNOWLEDGEMENT 4

ABSTRACT 5

1. INTRODUCTION TO CRYPTOCURRENCY 10-12

1.1 WHAT IS MONEY?
1.1 CRYPTOCURRENCY 10
1.2 FEATURES OF CRYPTOCURRENCY 10
1.3 PROPERTIES OF CRYPTOCURRENCY 10

2. BLOCKCHAIN- ARCHITECT OF CRYPTOCURRENCY 13-14

2.1 BLOCKCHAIN 13
2.2 NEED OF BLOCKCHAIN 13

3. CRYPTOCURRENCY AND ITS PROPERTIES 15-16

3.1 TRANSACTIONAL PROPERTIES 15
3.2 MONETARY PROPERTIES 16
3.3 EXCHANGES 16

4. CRYPTOCURRENCY MERITS AND DEMERITS 17-18

4.1 MERITS 17
4.2 DEMERITS 17

5. CRYPTOCURRENCY PROJECTS 19-20

5.1 BITCOIN 19
5.2 LITECOIN 19
5.3 MONERO 19

7. CONCLUSION 22

8. REFERENCES 2
 Chapter 1: Introduction to cryptocurrency

What is money?

Before getting into the nitty-gritty of cryptocurrencies, you need to

understand the definition of money itself. In the old days, when you traded
your chicken for shoes, the values of the exchanged materials were inherent
to their nature. But when coins, cash, and credit cards came into play, the
definition of money and, more importantly, the trust model of money
changed.

Another key change in money has been its ease of transaction. The
hassle of carrying a ton of gold bars from one country to another was one of
the main reasons cash was invented. Then, when people got even lazier,
credit cards were invented. But credit cards carry the money that your
government controls. As the world becomes more interconnected and more
concerned about authorities who may or may not have people’s best interests
in mind, cryptocurrencies may offer a valuable alternative.

Cryptocurrency

What is cryptocurrency?

1) A cryptocurrency (or crypto currency ) is a digital asset designed

towork as a medium of exchange that uses cryptography to secure its
transactions, to control the creation of additional units, and to verify the
transfer of assets.

2) Cryptocurrencies are a type of digital currencies, alternative currencies and

virtual currencies. Cryptocurrencies use decentralized control as opposed to
centralized electronic money and central banking systems.
Features of cryptocurrency

According to Jan Lansky, a cryptocurrency is a system that meets all of the

following six conditions:

a) Independent: The system does not require a central authority,

distributed to achieve consensus on its state.
b) Supervision: The system keeps an overview of cryptocurrency units
and their ownership.
c) Efficiency: The system defines whether new cryptocurrency units can
be created. If new cryptocurrency units can be created, the system
defines the circumstances of their origin and how to determine the
ownership of these new units.
d) Ownership: Ownership of cryptocurrency units can be proved
exclusively cryptographically.
e) Accuracy: The system allows transactions to be performed in which
ownership of the cryptographic units is changed. A transaction
statement can only be issued by an entity proving the current ownership
of these units.
f) Decision making: If two different instructions for changing the
ownership of the same cryptographic units are simultaneously entered,
the system performs at most one of them.

Properties of Cryptocurrency

1) Controlled supply: Most cryptocurrencies limit the supply of the

tokens. In Bitcoin, the supply decreases in time and will reach its final
number sometime around the year 2140. All cryptocurrencies control
the supply of the token by a schedule written in the code. This means
the monetary supply of a cryptocurrency in every given moment in the
future can roughly be calculated today. There is no surprise.
 2) No debt but bearer: The Fiat-money on your bank account is created
by debt, and the numbers, you see on your ledger represent nothing but
debts. It‘s a system of IOU. Cryptocurrencies don‘t represent debts,
they just represent themselves.
Whether you’re a seasoned investor who has been exposed only to
investment assets other than cryptos or you’re just starting to invest (in
anything!) for the first time, you’re probably wondering why you should
consider including cryptocurrencies in your portfolio. You’ve probably heard
about Bitcoin here and there. Heck, you may have even heard of other
cryptocurrencies such as Ethereum and Litecoin. But what’s the big deal
about all these funny-sounding coins anyway? Is Litecoin just a very light
coin that won’t take much space in your physical wallet? Is a Bitcoin made of
bits and pieces of other valuable coins? Why on earth should you invest in
bits of coins?
You can read all about the different types of cryptocurrencies, what they’re
made of, and what their purpose is in Chapter 8. Here, I give you a general
overview of the market as a whole. That way, you can decide whether the
cryptocurrency industry is the right route for you to grow your wealth.
Cryptocurrency investing may make sense for many investors, for a growing
number of reasons — from things as simple as diversification to more
exciting stuff like joining the revolutionary movement toward the future of
how we perceive money. In this chapter, I show you some exciting features of
this new investment kid on the block.
Although you can read this book in any order, I encourage you to read
Chapter 3right after this one. That’s where I explain the other side of the coin,
which involves the risks surrounding cryptocurrencies.
Diversifying from Traditional Investments
Diversificationis the good ol’ “don’t put all your eggs in one basket”
Stocks
The stock market gives you the opportunity to take a bite of the profits a
company makes. By buying stocks of that company, you become a
part-owner of that firm. The more stocks you buy, the bigger your slice of the
cake. And of course, the higher the risk you face if the whole cake is thrown
out in the garbage.
The stock market is perhaps one of the most appealing investment assets.
Novice investors may pick up a stock or two just because they like the
company. For most investors, the charm of stock investing is the possibility
that the prices will increase over time and generate significant capital gains.
Some stocks even provide you with a periodic income stream through
something called dividends.(I explain more about capital gains and dividend
income in Chapter 3.) Regardless, for most stocks, the dividends paid within
a year are nothing compared to the increase of the stock’s value, especially
when the economic environment is upbeat.