1. INTRODUCTION
1.1 CRYPTO CURRENCY
What is Crypto Currency?
A cryptocurrency 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. Cryptography is used to secure the transactions and to control the creation of new coins.
Why Crypto Currency?
Money exists to facilitate trade. Through the centuries trade has become incredibly complex everyone trades
with everyone worldwide. Trade is recorded in book keeping, this information is often isolated in closed to
the public. This is the reason why we use third parties and middlemen we trust to facilitate and approve our
transactions. Think governments, banks, accountants, notaries and the paper money in your wallet. We call
these trusted third parties. Cryptocurrency software enables a network of computers to maintain a collective
bookkeeping via the internet. This bookkeeping is neither closed nor in control of one party or a central
authority. Rather, it is public, and available in one digital ledger which is fully distributed across the
network. We call this the blockchain. In the blockchain all the transactions are logged, including
information on the time, date, participants and amount of every single transaction.
Each node in the network
owns a full copy of the blockchain. On the basis of complicated state-of-the-art mathematical principles the
transactions are verified by the cryptocurrency miners, whom maintain the ledger. The mathematical
principles also ensure that these nodes automatically and continuously agree about the current state of the
ledger and every transaction in it. If anyone attempts to corrupt transaction the nodes will not arrive at a
consensus and hence will refuse to incorporate the transaction in the blockchain. So every transaction is
public and thousands of nodes unanimously agreed that a transaction has occurred on date X at time Y. It’s
almost like there’s a notary present at every transaction. This way everyone have access to a shared single
source of truth. The ledger does not care wetter a cryptocurrency represents a certain amount of Euros or
Dollars, or anything else of value, or property for that matter. Users can decide for themselves what a unit
of cryptocurrency represents. A cryptocurrency like Bitcoin is divisible in to 100 million units and each
unit is both individually identifiable and programmable. This means that users can assign properties to each
unit, users can program a unit to represent a Euro cent, or a share in a company, a kilowatt our energy or
digital certificate of ownership. Because of if this cryptocurrencies and blockchain technology could be
used for more than simply money and payments. A cryptocurrency can represent many kinds of property.
A thousand barrels of oil, award credits or a vote during an election for example. moreover cryptocurrency
protocols allows us to make our currency smarter and to automize our cash and money flows. Imagine a
health care allowance in dollars or Euros that can only be used to pay for health care at certified parties. I
in this case, whether someone actually follows the rules is no longer verified in the bureaucratic process
afterwards. You simply program these rules into the money, compliance up front. The unit can even be
programmed in such a way that it will automatically be returned to the provider if the receiver doesn’t use
it after a certain amount of time. This way the provider can ensure that allowances are not horded. A
company can control its spending in the same way. By programming budgets for salaries machinery,
materials and maintenance so that the respective money is specified and cannot be spent on other things.
automating such matters leads to considerable decrease in bureaucracy.
1.2 BITCOIN
Bitcoin is a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.
Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need
to give your real name. More merchants are beginning to accept them. You can buy webhosting services,
pizza or even m Buy on an Exchange. Bitcoins are stored in a “digital wallet,” which exists either in the
cloud or on a user’s computer. The wallet is a kind of virtual bank account that allows users to send or
receive bitcoins, pay for goods or save their money. Unlike bank accounts, bitcoin wallets are not insured
by the FDIC. Though each bitcoin transaction is recorded in a public log, names of buyers and sellers are
never revealed – only their wallet IDs. While that keeps bitcoin users’ transactions private, it also lets them
buy or sell anything without easily tracing it back to them. That’s why it has become the currency of choice
for people online buying drugs or other illicit activities.
Exchange Bitcoins: Several marketplaces called “bitcoin exchanges” allow people to buy or sell bitcoins using different
currencies. Mt. Gox is the largest bitcoin exchange.anicures.
Transfer:
People can send bitcoins to each other using mobile apps or their computers. It’s similar to sending cash
digitally.
Mining:
People compete to “mine” bitcoins using computers to solve complex math puzzles. This is how bitcoins
are created. Currently, a winner is rewarded with 25 bitcoins roughly every 10 minutes.
Symbol:
Ƀ is not a logo but a symbol: Unicode Character U+0243 can be used any Unicode text editor. This unicode
character was originally used as a phonetic symbol to represent or transcribe the sound [β]. Thus the context
of this use does not allow any confusion with the Bitcoin currency.
Facts: The baht (sign: ฿; code: THB) is the currency of Thailand. Thailand’s population is 67 million people
(vs. Bitcoin’s debated 1–4 million users) and they’re not really cool with the community trying to “steal”
their sign.
Unit:
Unit Value in BTC
BTC 1
mBTC 0.001
uBTC 0.000001
Satoshi 0.00000001
1.3 HISTORY OF BITCOIN
He is said to be from Japan but his mail ID was from Germany, plus the bitcoin software was not available
in Japanese. He developed the system and the Bitcoin software (that is used to run the system) in 2009 but
disappeared into thin air in 2010. The other developers of the system stopped hearing from him in 2010,
and plenty of speculation turned up about his real identity. Some even suggested that his name was just a
mashup of popular Japanese companies — SAmsung TOSHIba NAKAmichi MOTOrola. But what he
created was definitely the fantasy of every tech guy in the world.
2007, Satoshi Nakamoto
According to legend, Satoshi Nakamoto began working on the Bitcoin concept in 2007. While he is on
record as living in Japan, it is speculated that Nakamoto may be a collective pseudonym for more than one
person.
August 2008, An interesting patent application
Three individuals, Neal Kin, Vladimir Oksman, and Charles Bry file an application for an encryption patent
application. All three individuals deny having any connection to Satoshi Nakamoto, the alleged originator
of the Bitcoin concept. The three also register the site Bitcoin.org in the same month, over on
anonymousspeech.com – which allows people to buy domain names anonymously.
Learn more and click to download the free PDF eBook - Be a BITCOIN MILLIONAIRE
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