BITCOINS : THE EMERGING CRYPTOCURRENCY

BITCOINS : THE EMERGING CRYPTOCURRENCY

CRYPTOCURRENCY :

                          It is a digital asset designed to work as a medium of exchange wherein the digital coin ownership records are stored in a digital ledger or computerized database.

BITCOINS :

• It is a type of cryptocurrency .It was first described in 1998 ,by WEI DAI and proof of concept in 2009, by an unknown group of people (SANTOSHI NAKAMOTO) .
• It is first decentralized cryptocurrency.
• It is decentralized digital currency although it is not backed by any government or central bank.
• It can be exchanged for products, services and traditional currencies , can be sent from USER TO USER  on the peer to peer bitcoin network without any intermediaries.
• 1 BITCOIN = 691775.71 INDIANH RUPEES.

HOW AND FOR WHAT YOU CAN AQUIRE BITCOINS ?

• As payment for goods and services.
• Purchase bitcoin at a bitcoin exchange.
• Earn through competitive mining.

   BTM (BITCOIN TELLER MACHINE)

BLOCKCHAIN technology ?

 Blockchains technology records all the transactions  between bitcoin clients.

• It is revolutionary technology which going to change the ways of interest just like open source software did.
• A blockchain is a distributed P2P (peer to peer) ledger system , anyone can see others entry , but no one can alter it , which increases its level of transparency in the system.
• This network will connect the user directly to other party. As all the data or ledger is maintained by the system itself  , which means  you would not required  any third party in the system .

HOW IT WORKS…..?

1. Blockchain will keep a record of exchange of data in its ledger system which generally known as TRANSACTIONS. So after verification, every transaction will automatically get added to the3 ledger as a BLOCK.
2. It uses a different kind of distributed networks to ensure that every transaction is up to mark between P2P network or node.
3. After a block get added plus verified, undoubtedly no one can alter its information.
4. As we know blockchain ensures security, after adding block you will get a UNIQUE IDENTIFICATION id  that no one can break. (i.e, set of encryption keys).
5. You will get a public and private key using this you will get a unique identity  , with the help of public key ,others would find you on the network and on the other hand with the help  of private key you would be able to sign any action or authorize any transaction.

IN SIMPLE WORDS :

PUBLIC KEY = WALLET ADDRESS.

PRIVATE KEY =FOR WITHDRAWL, SEND, OR BUY DIGITAL MONEY.

UNIQUE ID =STRING OF 27 TO 34 ALPHANUMRIC CHARACTERS.

ADVANTAGES OF BLOCKCHAIN

ISSUES RELATED TO BITCOINS

• Bitcoin is a cryptocurrency that has emerging as a popular system for medium for exchange. For a simple user Bitcoin is a something like cash on the internet. Bitcoin is known as cryptocurrency as it relies on cryptography to generate currency.

We know it is a purely digital currency that has no physical existence. The mining process as well as transactions are secured but not fully secured  and colliding users can take advantage of the flaws in the process . There are some organizations and services which facilitates this process on online digital wallet and later they can target clients through hacking attacks. Like for example some hacking threats are mentioned below with their targets :

ATTACKS

TARGETS

MINING PROCESS

• We have a very strong example related to bitcoin’s encryption in front of us. i.e., the example of the late Gerald cotten, co-founder and chief executive of QuadrigaCX (Canadian’s largest cryptocurrency exchange).

As he’s the only one who knows they password of the digital wallet, where cryptocurrency was stored. Where more than 100000 user’s money got stuck, in simple words their money got lost they will never get back (approx $33 million Canadian dollars are recovered as per the auditors and rest cryptocurrency remain elusive) .As no one can encrypt the bitcoin’s key due to security purpose which is also a major drawback.

WHERE YOU CAN USE BLOCKCHAIN TECHNOLOGY?

•MAINTAINING HEALTH CARE RECORDS

•STORING PROPERTY DEED RECORDS

•CAN BE USE IN SMART CONTRACTS

•CAN BE USE IN SUPPLY CHAIN

•CAN BE USE IN VOTINGS

PROS AND CONS OF BITCOINS

FUTURE OF BITCOINS……

• No system is unbreakable on the internet. But blockchains makes sure that it is one of the most secured ones so far. It does not work like traditional means like banks. So to hack it you have to hack all the computers using it, that is why it is the utterly tricky and considered extremely secured .

                      As the bitcoins is the first known successful implementation of cryptocurrency but it is still in immature state. More economic analyst predicts that it will bring a big change in money institutions in the market. Moreover there is the possibility that digital money will be floated on the Nasdaq (stock market), which could further add creditability to blockchain and its uses as an alternative to conventional currencies. Some predicts that digital money needs verified exchange traded fund (ETF). As ETF would definitely  make it easier for people to invest in bitcoin/ digital currency.

SOURCES:WIKIPEDIA,YOUTUBE AND OTHERS.

THANK YOU

-Bhavya Niharika