- Bitcoin is a digital currency that operates on a peer-to-peer network without central authorities or banks. It was created in 2009 by an anonymous developer known as Satoshi Nakamoto. - Transactions are recorded in a public ledger called the blockchain, and bitcoins are issued as a reward for processing transactions through mining. Users store bitcoins in digital wallets and can send and receive bitcoins for transactions. - While Bitcoin provides advantages like low fees and financial freedom, it also faces challenges of market volatility and a need for wider acceptance to benefit from network effects. Development of Bitcoin software and services is ongoing as the currency continues to mature.

1. SKASC
TECHNICAL PRESENTATION REPORT ON :-
SUBMITTED BY :
-Arun.P (13bca005)

2. INTRODUCTION
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing
transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source;
its design is public, nobody owns or controls Bitcoin and everyone can take part. Bitcoin is a
network that enables a new payment system and a completely digital money.
In detail, Bitcoin is a peer-to-peer payment system introduced as open source software in 2009 by
developer Satoshi Nakamoto. The digital currency created and used in the system is also called bitcoin
and is alternatively referred to as a virtual currency, electronic money, or cryptocurrency. The bitcoin
system is not controlled by a single entity, like a central bank, which has led the US Treasuryto call
bitcoin a decentralized currency. Economists generally agree that it does not meet the definition of
money Bitcoins are created as a reward for payment processing work in which users who offer their
computing power verify and record payments into a public ledger. Called mining, individuals engage in
this activity in exchange for transaction fees and newly minted bitcoins. Besides mining, bitcoins can be
obtained in exchange for other currencies, products, and services. Users can buy, send, and receive
bitcoins electronically for a nominal fee using wallet software on a personal computer, mobile device,
or a web application.

3. HISTORY
Bitcoin was first mentioned in a 2008 paper published under the name Satoshi Nakamoto. In 2009, an
exploit in an early bitcoin client was found that allowed large numbers of bitcoins to be created.
The price of bitcoins has fluctuated wildly since its inception, going through various cycles of
appreciation and depreciation, which have been referred to by some as bubbles and busts. In 2011, the
value of one bitcoin rapidly rose from about US$0.30 to US$32 before returning to US$2. In the latter
half of 2012 and during the 2012-2013 Cypriot Financial Crisis, the bitcoin price began to rise, reaching a
peak of US$266 on 10 April 2013, before crashing to around US$50. In the end of 2013, the cost of one
bitcoin rose to the all-round peak of US$1135, but fell to the price of US$693 three days later.
Some mainstream websites began accepting bitcoins c. 2013. WordPress started in November 2012
followed by OKCupid in April 2013, TigerDirect in January 2014, andOverstock.com that same month.
Certain non-profit or advocacy groups such as the Electronic Frontier Foundation allow bitcoin
donations. (Although this organization subsequently stopped accepting bitcoin.) October 31, 2008 The
white paper publishes… Nakamoto publishers a design paper through a metzdowd.com cryptography
mailing list that describes the Bitcoin currency and solves the problem of double spending so as to
prevent the currency from being copied.

4. CREATION OF BITCOIN
Bitcoin is the first implementation of a concept called "crypto-currency", which was first described in
1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses
cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin
specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi
Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community
has since grown exponentially with many developers working on Bitcoin.
Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of
the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any
developer around the world can review the code or make their own modified version of the Bitcoin
software. Just like current developers, Satoshi's influence was limited to the changes he made being
adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is
probably as relevant today as the identity of the person who invented paper.

5. WORKING OF BITCOIN
Introduction
The basics for a new user- As a new user, you can get started with Bitcoin without understanding the
technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will
generate your first Bitcoin address and you can create more whenever you need one. You can disclose
your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how
email works, except that Bitcoin addresses should only be used once.

6. Balances - block chain: The block chain is a shared public ledger on which the entire Bitcoin network
relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate
their spendable balance and new transactions can be verified to be spending bitcoins that are actually
owned by the spender. The integrity and the chronological order of the block chain are enforced with
cryptography.
Transactions - private keys: A transaction is a transfer of value between Bitcoin wallets that gets
included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which
is used to sign transactions, providing a mathematical proof that they have come from the owner of the
wallet. The signature also prevents the transaction from being altered by anybody once it has been
issued. All transactions are broadcast between users and usually begin to be confirmed by the network
in the following 10 minutes, through a process called mining.
Processing – mining: Mining is a distributed consensus system that is used to confirm waiting
transactions by including them in the block chain. It enforces a chronological order in the block chain,
protects the neutrality of the network, and allows different computers to agree on the state of the
system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules
that will be verified by the network. These rules prevent previous blocks from being modified because
doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive
lottery that prevents any individual from easily adding new blocks consecutively in the block chain.
This way, no individuals can control what is included in the block chain or replace parts of the block
chain to roll back their own spends.

7. PAYMENT METHOD
Using Bitcoin as an Individual
Install the official Bitcoin client on your computer.
To get started using Bitcoin, whether you want to set it up on your phone or online, you'll need to
download the client and visit the main Bitcoin page to set up your account on the computer. The client
is suitable for Mac, Windows, and Linux. Set up your wallet: Like regular money, you've got to have a
place to keep your digital money. Wallets are basically programs that sort and track your digital
currency via your account settings. There are a variety of options available, depending on your
intentions for using Bitcoin. Software wallets don't run on a third-party service after download. These
wallets are operated from your computer, where you'll have to run a local blockchain to keep your
transactions anonymous. This is the wallet for which the Bitcoin was originally conceived. Software
wallets include:
 BitcoinQT
 Armory

8.  Multibit
Software Wallets For PC For Mobile Web wallets are always available online, making them probably the
most convenient and user- friendly. All you need to do is set up an account and log in. They are,
however, potentially somewhat less secure than hardware wallets, though each of these is also
compatible with most Mobile phone providers. Web wallet options include: Blockchain Coinbase
 Coinjar
 Coinpunk
 BitGo

9. ADVANTAGES AND DISADVANTAGES

10. Advantages: Payment freedom - It is possible to send and receive any amount of money instantly
anywhere in the world at any time. No bank holidays. No borders. No imposed limits. Bitcoin allows
its users to be in full control of their money. Very low fees - Bitcoin payments are currently processed
with either no fees or extremely small fees. Users may include fees with transactions to receive priority
processing, which results in faster confirmation of transactions by the network. Additionally, merchant
processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and
depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin,
they can be offered for much lower fees than with PayPal or credit card networks. Fewer risks for
merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or
personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks,
and there is no need for PCI compliance. Merchants can easily expand to new markets where either
credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger
markets, and fewer administrative costs. Security and control - Bitcoin users are in full control of their
transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen
with other payment methods. Bitcoin payments can be made without personal information tied to the
transaction. This offers strong protection against identity theft. Bitcoin users can also protect their
money with backup and encryption. Transparent and neutral - All information concerning the Bitcoin
money supply itself is readily available on the block chain for anybody to verify and use in real-time. No
individual or organization can control or manipulate the Bitcoin protocol because it is
cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral,
transparent and predictable.
Disadvantages: Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more
businesses accept bitcoins because they want the advantages of doing so, but the list remains small and
still needs to grow in order to benefit from network effects. Volatility - The total value of bitcoins in
circulation and the number of businesses using Bitcoin are still very small compared to what they
could be. Therefore, relatively small events, trades, or business activities can significantly affect the
price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never
before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will

11. play out. Ongoing development - Bitcoin software is still in beta with many incomplete features in
active development. New tools, features, and services are being developed to make Bitcoin more
secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin
businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.