cryptocurrency: virtual currency solving real problems

1. Made by: SUMAN NAYAK

2. Index:
 What is cryptocurrency?
 How cryptocurrency works?
 How cryptocurrency works?
 Working of crptocurrency
 What is virtual currency?
 How virtual currency works?
 Which problem have virtual cryptocurrency come to solve?
 Solving problems
 Solving problems

3. What is cryptocurrency?
 A cryptocurrency (or crypto currency) is digital
asset designed to work as a medium of exchange that
uses strong cryptography to secure financial transactions,
control the creation of additional units, and verify the transfer
of assets. Cryptocurrency is a kind of digital currency, virtual
currency or alternative currency. Cryptocurrencies use
decentralized control as opposed to centralized electronic
money and central banking systems.The decentralized control
of each cryptocurrency works through distributed ledger
technology, typically a blockchain, that serves as a public
financial transaction database.
Bitcoin, first released as open-source software in 2009, is
generally considered the first decentralized cryptocurrency.

4. CRYPTOCURRENCY

5. How cryptocurrency works?
 Transactions are sent between peers using software called
“cryptocurrency wallets.” The person creating the
transaction uses the wallet software to transfer balances
from one account (AKA a public address) to another. To
transfer funds, knowledge of a password (AKA a private
key) associated with the account is needed. Transactions
made between peers are encrypted and then broadcast to
the cryptocurrency’s network and queued up to be added
to the public ledger. Transactions are then recorded on the
public ledger via a process called “mining”.

6. Diagram

7. Working of cryptocurrency
 All users of a given cryptocurrency have access to the ledger if
they choose to download a “full node” wallet (as opposed to
holding their coins in a third party wallet like Coinbase). The
transaction amounts are public, but who sent the transaction is
encrypted . Each transaction leads back to a unique set of keys.
Whoever owns a set of keys, owns the amount of
cryptocurrency associated with those keys (just like whoever
owns a bank account owns the money in it). Many transactions
are added to a ledger at once. These “blocks” of transactions
are added sequentially by miners. That is why the ledger and
the technology behind it are called “block” “chain.” It is a
“chain” of “blocks” of transactions.

8. What is virtual currency?
 Virtual currency, or virtual money, is a type of unregulated, digital
money, which is issued and usually controlled by its developers and
used and accepted among the members of a specific virtual
community. The U.S. Commodity Futures Trading Commission has
warned investors against pump and dump schemes that use virtual
currencies.The Financial Crimes Enforcement Network (FinCEN), a
bureau of the US Treasury, defined virtual currency in its guidance
published in 2013. In 2014, the European Banking Authority defined
virtual currency as "a digital representation of value that is neither
issued by a central bank or a public authority, nor necessarily
attached to a fiat currency, but is accepted by natural or legal
persons as a means of payment and can be transferred, stored or
traded electronically". By contrast, a digital currency that is issued
by a central bank is defined as "central bank digital currency".

9. Diagram

10. How virtual currency works?
 Carrying on a business - If you use cryptocurrencies to
pay for (or accept them as payment for) goods or services,
the transactions will be subject to goods and services tax
(GST). Mining bitcoin - If you are mining bitcoins or
other digital currencies, any profits you make will be
included in your assessable income. A cryptocurrency is a
digital currency using cryptography to secure transactions
and to control the creation of new currency units. Since
not all virtual currencies use cryptography, not
all virtual currencies are cryptocurrencies. ... At the end
of February 2015 transactions of electronic money will be
possible.

11. How it works?

12. Which problem have virtual
currency come to solve?
 The cryptocurrency, assets of the gender digital currency,
is a virtual monetary tool that uses cryptography to secure
transactions and control the creation of new units of the
currency. The most famous of them is bitcoin, created in
2009 by Satoshi Nakamoto. Bitcoin allows you to make
financial transactions without a broker, verified by “us”
(the network participants) P2P (Peer-to-Peer) and recorded
in a distributed databank called Blockchain.

13. Solving problems
 Thus, the Blockchain Bitcoin technology allows such data
to be transmitted to all the participants of the network, in a
decentralized and transparent way, making unnecessary
the work of a broker to guarantee the accounting and
reliability of the relations developed through the Internet.
 With the decentralization of the Bitcoin network and the
absence of a central administrator, it is impossible for any
governmental entity to manipulate the emission and the
value of the bitcoins or even to induce inflation by
“printing” new coins.

14. Solving problems
 Besides the evident advantages of the decentralization of the
Bitcoin network, which problems has Bitcoin come to solve?
 Now, much more than software running on computers spread
around the world, it is a network of independent electronic
transfers of a third part, which enliven a free monetary system
through the Internet. Its invention, however, came to unravel
something much bigger: the problems inherent in the current
centralized system of financial transfer and intermediation. Let
us check the main ones (Centralized Monetary Policy,
intermediation costs)

15. Diagram

16. Thank you: