CRYPTOCURRENCIES

And its Data mining

CONTENTS

CONTENTS
1 Introduction

2 History

3 Mining

4 Future

5 Conclusion
Introduction

A cryptocurency is a medium of exchange like normal currencies

such as USD, but designed for the purpose of exchanging digital
information through a process made possible by certain principles
of cryptography.

Fully decentralised
History
Digicash-In 1983 David
chaum invented the blinding
formula, which is an
extension of the RSA
algorithm still used in the
web's encryption.
In 1998,Wei Dai published a
description of "b-money", an
anonymous, distributed
electronic cash system.
Nick szabo created "Bit
Gold", was an electronic
currency system which
required users to complete a
proof of work function with
solutions being
cryptographically put
together and published.
 Decentralised
The first decentralised cryptocurency, bitcoin was created in 2009 by
pseudonymous developer satoshi Nakamoto
In April 2011, Namecoin the first altcoin, was created to form a
decentralised DNS to make internet censorship more difficult
 In October 2011,Litecoimm was released and became the first
successful cryptocurency to use scrypt as its hash function.
Ripecoin, (2011),was built on the same protocol as Bitcoin but
services as a payment system - PayPal that supports any fiat
currency, cryptocurency, commodity.
 Normal currencies and cryptocurrencies
For normal currencies the government controls the value of currency

But cryptocurrencies are fully decentralised.

Low transaction fees to transfer money all over the world. The fee is
same independent of distance, country, borders

Most cryptocurrencies are produced is controlled by a algorithm that

no single person or company country can change
Major crypto-currencies

1.Bitcoin 7.Protoshares

2.Litecoin 8.Worldcoin

3.Peercoin 9.Feathercoin

4.Namecoin 10.Nxt

5.Megacoin 11.Navacoin

6.Quarkcoin 12.Terracoin
 Bitcoin-BTC
Peer to peer technology and no control authority or banks
Transaction fees are lower
Managing transactions and issuing of bitcoins is carried out
collectively by the network
Open-source, design is public, nobody owns of controls Bitcoin.
21million Bitcoins to be issued
Market cap-$12 billion

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 Cryptocurency mining
Mining is the process by which a computer solces a complex math
problem in the hopes of uncovering a new crypto coin.

Cryptocurrency algorithms are used to mine coins There are two

different algorithms that are used for almost all the coins that is in
existence today, which is SHA-256 and scrypt algorithms

Anyone can mine with their computers processor, more advanced

graphics cards

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 CPU mining
Was the original way to do it,, was initially solo mining and you got
the all of the block or the none of it.

Slow compared to today's standards.

Core i5 2500 about 20.6 megahash/s

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 GPU mining
GPGPU:general purpose computing on graphic processing unit

 This was discovered to be more energy efficient per hash, and gave
you an advantage in higher hash rates.

AMD/ATI GPU's were much faster and more efficient

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 ASIC mining
Faster

Expensive
 Proof-of-work-scheme:based on SHA-256.Used by currencies like
litecoin
This type of mining requires an investor to take an active part in
mining data blocks, which helps verify transaction data and create
new coins.
Proof-of-stake scheme:request to show ownership of certain amount
of currency.
It provides for higher currency security, for those who invest more
heavily.

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 Block chain
A block chain is a transaction database shared by all
nodes participating in system based on the bitcoin
protocol.
It works like a ledger and is shared by everyone
All bitcoin transactions, without expectation, are
recorded here
Once it is recorded, it cannot be reserved (To prevent
the double-spending problem)
Everyone will have the same blockchain and
therefore the actions to the recorded history
transactions
E-Wallet
Bitcoins obtained from mining or purchasing can be stored in an
"E-Wallet" in one of two ways:
 Locally on your computer
 Online
E-Wallet use private and public keys(Cryptography) to secure and
transfer your coins
Bitcoins are traded by sending from wallet to the "address" of the
recipient wallet. Or by scanning a QR code that corresponds to the
recipient's wallet
 E-Wallet security :
If your hard drive gets distroyed you will lose all of your coins
(unless have a backup).
If the power of the online wallet gets hacked you could lose all of
your coins.
 Security
 Difficulty in finding hash set intersecting-task done by miners

51%attack- A miner who has the mining power more than

51% of the network, can take control of the global block chain
ledger & enerate an alternative block chain. The attacker could
reverse his transaction or block other transaction.
Converting to normal currencies
 www.btc-e.com and bitstamp. com

Youthen send the currency from your wallet to the exchange,

convert it whatever currency you desire (INR, USD, Euro).

You can send it to your bank account through a wire transfer.

 Legality and taxes
Cryptocurrencies are legal in most countries except Iceland,
Vietnam.

Iceland mainly due to their freeze on foreign exchange they are not
free from regulations and restrictions.

China has banned financial institutions from handling bitcoins.

In US bitcoin treated as property for tax purposes.

Future
More retailers will begin to accept BTC
Used in international trading to avoid currency exchanges.

Become as common place as credit cards

Less volatility in hard currency value

Reduces the limitations of cryptocurency presently face

Conclusion
Cryptocurency is an impressive technical achievement, but it
remains a monetary experiment. Even if cryptocurrencies survive,
they may not fully displace fiat currencies.
We should use cryptocurrencies since it is a step in the right
direction for global trade where everyone can be involved.
To neglect the idea of cryptocurrencies on a decentralised network
today is like neglecting the idea of internet and the Hypertext
Transfer protocol(http)back in the early nineties.
 Reference

http://en.wikipedia.org/wiki/Crypto-currency

http://www.thorschorck.com/2004/02/22/introduction - to-crypto-
currency-mining terminology

https://bitcoinmagazine.com

https://github.com
Any Questions
T H A N K