A brief description about cryptocurrency. Types of cryptocurrency, About miners, About block chain. About public ledger

1. THE EMERGENCE OF DIGITAL
CURRENCY: CRYPTOCURRENCY
SHREYAS.SUMESH.MENON

2. What is Cryptocurrency
■ A cryptocurrency is a digital or virtual currency designed to work as a medium of
exchange.
■ It uses cryptography to secure and verify transactions as well as to control the
creation of new units of a particular cryptocurrency.
■ Cryptocurrencies use decentralized control as opposed to centralized digital
currency and central banking systems.

3. PUBLIC LEDGER
■ All confirmed transactions from the start of a cryptocurrency’s creation are
stored in a public ledger.
■ The identities of the coin owners are encrypted, and the system uses other
cryptographic techniques to ensure the legitimacy of record keeping.
■ The ledger ensures that corresponding “digital wallets” can calculate an
accurate spendable balance. Also, new transactions can be checked to ensure
that each transaction uses only coins currently owned by the spender. Bitcoin
calls this public ledger a “transaction block chain.”

4. TRANSACTIONS
■ : A transfer of funds between two digital wallets is called a transaction.
■ That transaction gets submitted to a public ledger and awaits confirmation.
Wallets use an encrypted electronic signature when a transaction is made..
■ The signature is an encrypted piece of data called a cryptographic signature and
it provides a mathematical proof that the transaction came from the owner of the
wallet. The confirmation process takes a bit of time (ten minutes for bitcoin)
while “miners” mine.
■ Mining confirms the transactions and adds them to the public ledger.

5. What Are Miners Doing?
Principally everybody can be a miner.
Since a decentralized network has no authority to delegate this task, a
cryptocurrency needs some kind of mechanism to prevent one ruling party from
abusing it.
Imagine someone creates thousands of peers and spreads forged transactions. The
system would break immediately.

6. BLOCK CHAIN
The transaction is known almost immediately by the whole network. But only after a
specific amount of time it gets confirmed.
Confirmation is a critical concept in cryptocurrencies. You could say that
cryptocurrencies are all about confirmation.
Only miners can confirm transactions. This is their job in a cryptocurrency-network.
They take transactions, stamp them as legit and spread them in the network. After a
transaction is confirmed by a miner, every node has to add it to its database. It has
become part of the block chain.

7. Types
■ Bitcoin (BTC)
■ Lite coin (LTC)
■ Ethereum (ETH)
■ Ripple (XRP)
■ Bitcoin Cash
■ Ethereum Classic
■ Zcash (ZEC)
■ Dash (DASH)

8. What is Ethereum?
Like Bitcoin, Ethereum is a distributed public block chain network.
Although there are some significant technical differences between the two, the most
important distinction to note is that Bitcoin and Ethereum differ substantially in purpose
and capability.
In the Ethereum block chain, instead of mining for bitcoin, miners work to earn Ether, a
type of crypto token that fuels the network.
Beyond a tradeable cryptocurrency, Ether is also used by application developers to pay
for transaction fees and services on the Ethereum network.
There is a second type of token that is used to pay miners fees for including
transactions in their block, it is called gas, and every smart contract execution requires
a certain amount of gas to be sent along with it to entice miners to put it in the block
chain.

9. Conclusion
Bill Gates, co-founder of Microsoft, investor and philanthropist:
“Bitcoin is exciting because it shows how cheap it can be. Bitcoin is
better than currency in that you don’t have to be physically in the same
place and, of course, for large transactions, currency can get pretty
inconvenient.”