Cryptocurrencies
What are they?
And what they are good for
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A digital currency
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Decentralized
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Based on cryptography
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Uses 'blockchain' technology
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Few examples: BitCoin(BTC), Ethereum(ETH), LiteCoin(LTC), etc.
Short history
- The idea was first conceived by David Chaum in 1983 and implemented in 1995 as Digicash
- Electronic currency technology further developed in the 90's, thanks to the work of Wei Dai and Nick Szabo
- The first cryptocurrency as we know it today was BitCoin, released in 2009
- Soon followed NameCoin, LiteCoin and PeerCoin in 2011
- Today there are over 4000 'altcoins'
How it works
- Distributed ledger
- Digital signatures
- Proof of work
- Cryptographic hash functions
- Block chain
Distributed ledger
aka block-chain
- A platform where all transactions are recorded
- In the case of cryptocurrencies, this is the internet
- Everyone has a copy of this ledger, hence the name distributed
- Old ledgers don't get deleted, instead newer ones are added ->blockchain
- Always the longest blockchain ought to be trusted, because that contains the most computational work (proof of work)
Digital signatures
- Every transaction needs to be signed by both parties
- In our case these are really just bitstrings (256 bits long)
- Transactions themselves have their unique code
- Every user has a private and public key
- Private key + transaction code -> signature
- Signature + public key -> transaction code
- Private key cannot be traced back
- This is ensured by special cryptographic functions called hash functions
Rates of exchange
as of 4/20/19
Thank you for your attention!
Got any questions?
Crytocurrencies
By Godra Adam
Crytocurrencies
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