This document provides an overview and comparison of e-money and cryptocurrency. It begins with defining money and its functions, then describes the evolution of money from precious metals to digital currencies. E-money is defined as fiat money in digital form issued by financial institutions, while cryptocurrency uses blockchain technology and decentralization without a central authority. The key differences between the two are that e-money has centralized control and backing from governments or banks, while cryptocurrency operates on peer-to-peer networks without middlemen. Security issues for each such as private key theft and cyberattacks are also discussed. In conclusion, e-money provides consumer protections but cryptocurrency allows for faster transactions and tamper-proof data.

1. E-Money
vs
Cryptocurrency
Dimaz Ankaa Wijaya

2. ▸Education
▹UGM – B. Computer Science (2007)
▹MONASH Uni.– M. Networks & Security (2016)
▹MONASH Uni. – Ph.D Student (2017-current)
▸Field of Expertise
▹Dig. forensic, cybersecurity
▹Cryptocurrency, Blockchain
▸Work Experience
▹Indonesian Government official (2009-2017)
Dimaz Ankaa Wijaya
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3. Today’s Menu
▸Money
▸E-Money
▸Cryptocurrency
▸E-Money vs Cryptocurrency
▸Cryptocurrency in Depth
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4. MONEY
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5. Functions of Money (Mankiw, 2014)
▸Medium of exchange (to buy stuff)
▸Unit of account (to measure prices and
values)
▸Store of value (to transfer purchasing
power to the future)
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6. Evolution of Money
▸Simple form (salt, shells, etc)
▸Precious metals (gold, silver)
▸Paper money and coins (fiat money)
▸Digital currency
▹Electronic money (electronic fiat money)
▹Cryptocurrency?
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7. Challenges With Physical Money
▸International Trade
▸Internet
▸E-Commerce
▸Smartphone Apps
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8. E-Money
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9. Electronic Money / e-Money
▸Fiat money in digital form
▸Issued by bank/financial institution
▹Hardware-based: credit card
▹Software-based: e-Cash, Go-Pay
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10. Why e-Money Has Value
▸E-Money reflects your fiat currency
▸Convenience: no physical money needed
▸Highly regulated
▸Financial technology
▸Fits the function of money
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11. International Trade System: e-Money Needed
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12. Attacks on e-Money
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13. Cryptocurrency
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14. Various Types of Cryptocurrency
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Source: bitslog

15. Overview of Bitcoin
▸Created by “Satoshi Nakamoto”
▹A Peer-to-Peer Electronic Cash System (Nakamoto, 2008)
▸Limited supply
▸“Low” transaction fee
▸ID theft protection
▸“Fast” settlement
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16. What’s Special About Bitcoin
▸Blockchain (public ledger)
▸No central authority
▹Double spending
▹Peer-to-Peer network
▸No middleman
▸Customized transaction
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17. Blockchain: Identical Ledgers Across Nodes
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18. How Blockchain Works
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19. Double Spending Problem
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20. Peer-to-Peer Network
▸Identical information in each server/node.
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21. No Central Authority: Byzantine Generals Problem/BGP
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22. Proof of Work / PoW
▸Solving BGP
▸Required to construct a new block
▸Find a hash value based on a criteria
▸Mining
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23. Remove The Middleman
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24. Customized Transaction
▸Escrow transaction
▸Hash-locked transaction
▸Time-locked transaction
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25. Comparisons
E-money vs Cryptocurrency
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26. E-Money vs Cryptocurrency
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No Characteristics E-Money Cryptocurrency
5 Authentication Method ID card, password, PIN Digital signature
1 Medium Digital Digital
2 Transaction network Banks or Financial Institution Peer-to-peer
3 New money creation Government Miners
4 Validator Banks or Financial Institution Node and Miners

27. E-Money vs Cryptocurrency (2)
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No Characteristics E-Money Cryptocurrency
9 Collateral asset Fiat money N/A
6 Money Supply Government Consensus
7 Backer Government N/A
8 Exchange rate Currency market & Government Currency market

28. Summary: Centralized vs Decentralized
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29. Cryptocurrency
Security Issues
Attacks and Mitigation Strategies
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30. Cryptocurrency Exchange Hacks
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31. Private Keys Theft/Lost
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32. 51% Attack
▸Controlling the majority of the consensus.
▸Mitigation:
▹Discourage such event
▹Evaluate consensus method
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33. Denial of Service
▸Flooding nodes with invalid requests.
▸Flooding network with dust transactions.
▸Mitigation:
▹Drop requests, filtering
▹Prioritize transactions.
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34. Sybil Attack
▸Several malicious nodes providing wrong
information.
▸Mitigation:
▹Whitelist of trusted nodes.
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35. Selfish Mining
▸Not broadcasting a new block.
▸Keep mining based on the block.
▸After a certain length, the blocks are
published.
▸Double spending potential.
▸Mitigation?
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36. Private Key Theft
▸Stealing private keys.
▸Mitigation:
▹Shamir secret sharing
▹Multisignature
▹Security hardening
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37. Conclusion
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38. Comparing Benefits: E-Money vs Cryptocurrency
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No Criteria E-Money Cryptocurrency
1 Consumer Protection V X
2 Well Regulated V X
3 Stable Value V X
4 Fast Settlement X V
5 Infeasible to tamper the data X V
6 Transaction Fee X V

39. Comparing Problems: E-Money vs Cryptocurrency
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No Criteria E-Money Cryptocurrency
1 Single Point of Failure V X
2 Consensus Problems X V
3 Privacy and Anonymity V V

40. Attack Vectors: E-Money vs Cryptocurrency
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No Criteria E-Money Cryptocurrency
1 Software Security V V
2 Network Security V V
3 Dishonest Authority V X
4 ID Theft, Secret Key Theft V V

41. NEXT: Government-issued Cryptocurrency?
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42. Blockchain on Other Areas?
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THANKS!
Any questions?
You can find me at @kriptologi & dimaz@kriptologi.com