bit coin technology

1. BIT COIN
MINING & ATM
BY
SUMBAL JAHAN
267/2011
CSE-A2

2. What is BITCOIN????
•Bitcoin is an innovative payment network and a new kind of
money.
• Bitcoin is a software-based online payment system.
•Digital currency
•decentralized cryptocurrency
•Bit coin is a peer-to-peer virtual currency.

3. •Additional cost : About 1%
for each transaction : limits
the possibility of small
transactions.
•Slow system : Checking
services take days to
complete.
•No anonymity.
•Accounts can be frozen
•If fraudulent use of credit
card, the seller has to pay a
fee charged by the banking
company.Classic electronic payment systems
Disadvantages

4. WHY BIT COIN ???
•Its fast
•Its cheap
•Central governments can’t take it away
•There are no chargebacks
•It isn’t inflationary
•It’s as private as you want it to be
•You don’t need to trust anyone else
•You own it
•You can create your own money

5. FEW THINGS ABOUT BIT COIN
•Satoshi Nakamoto
•Open source
•Limited bit coins
•Decentralized
•Peer to peer virtual currency

6. HOW DOES ONE ACQUIRE BITCOIN ??
•As payment for goods or services.
•Purchase bitcoins at a Bitcoin exchange .
•Exchange bitcoins with someone near you .
•Earn bitcoins through competitive mining

7. You will need a place to store your new bitcoins????
BITCOIN WALLET
• A Bitcoin wallet is a file that contains a collection
of private keys.
• Store private keys
• Software wallet: hard drive of your computer
• Online wallet: web based services
• Different type of wallets:
1. Desktop wallet
2. Mobile wallet
3. Online wallet
4. Hardware wallet

8. At its core, Bitcoin is just a digital file that lists accounts and money like a
ledger. A copy of this file is maintained on every computer in the Bitcoin
network.
Bit coin at core ??

9. •To send money, you broadcast to the
network that the amount on your
account should go down, and the
amount on a receiver’s account up.
• nodesIn the bitcoin network apply that
transaction to their copy of the ledger, and
then pass on the transaction to other
nodes. (using math based security)
•In bitcoin every one knows about everyone
transaction
How the ledger works ??/

10. How Sending Money in Bitcoin Works
broadcasts a message with the accounts and the amount:
“Send 5.0 BTC from Alice to Bob.”
.
• a completely different Digital Signature is required for every transaction.
• Digital siqnature requires:
1. Private key :create signature
2. Public key :others to check it
3. Elliptic Curve Digital Signature Algorithm or ECDSA is a cryptographic
algorithm used by Bitcoin to ensure that funds can only be spent by their
rightful owners
•Bit coin rule:to spend funds a password is required called
DIGITAL SIQNATURE

11. ownership of funds
•5.0 BTC to Bob: Alice must
reference other transactions
where she received 5 or more
Bitcoins.
• These referenced
transactions are called
“inputs.” Other nodes verifying
this transaction will check
those inputs to make sure
Alice was in fact the recipient,
and also that the inputs add up
to 5 or more Bitcoins.
•Input should be used completely
•Verfiy every transaction
• index of Unspent transaction

12. Anonymity
•If you access Bitcoin through a TOR network
that hides your IP address, you can use
Bitcoin without ever revealing anything more
than your public key.
•Bitcoin is often described as an anonymous
currency because it is possible to send and
receive bitcoins without giving any personally
identifying information
•Bitcoin is pseudonymous.
• In Bitcoin, your pseudonym is the address to
which you receive Bitcoin.
•Wallet can generate a new public and private
key

13. Double Spending in Bitcoin
For example, if I have an mp3 file or an
ebook on my computer, I can freely
copy that file a thousand times and
send it to a thousand different people.
•Digital signature
•Owner ship of funds
•Trasaction is passed node by node

14. •The Bitcoin system orders transactions by placing them in groups
called blocks, and linking those blocks together in something called
the block chain.
The Block Chain: an Ordering of
Transactions
•Each block has a reference to the previous block,
and this is what places one block after another in
time
•Unconfirmed transaction: not yet in the block chain
•Any node can collect a set of unconfirmed
transaction into a block :next block in chain
•Block must contain the answer to a mathematical
problem using cryptographic hash
cryptographic hash is as follows: Alice poses a tough
math problem to Bob and claims she has solved it. Bob
would like to try it himself, but would yet like to be sure
that Alice is not bluffing. Therefore, Alice writes down her
solution, computes its hash and tells Bob the hash value
(whilst keeping the solution secret). Then, when Bob
comes up with the solution himself a few days later, Alice
can prove that she had the solution earlier by revealing it
and having Bob hash it and check that it matches the
hash value given to him before.

15. MINING
• Process of spending computer power to process transaction
1. Secure the network
2. Synchorinsed
• Mining is the process of adding transaction records to Bitcoin's public ledger
of past transactions.
• Mining is intentionally designed to be resource-intensive and difficult so that
the number of blocks found each day by miners remains steady.
• Mining is also the mechanism used to introduce Bitcoins into the syste9m:
Miners are paid any transaction fees as newly created coins.
1. new coins in a decentralized manner
2. provide security for the system.
• Proof of work :data difficult to produce as to satisfy certain requirement(hash
cash proof of work : next block to be accepted using mathamatical race )

16. Bitcoin ATMs
•A bitcoin ATM is an electronic communications device that allows
someone to exchange bitcoins and cash
•number of different vendors
• BitAccess, CoinOutlet, Genesis Coin, Lamassu and Robocoin.
• Like a face-to-face exchange but with a machine, you insert your cash
and either scan your mobile wallet QR code or receive a paper receipt .
•On October 29, 2013, a Robocoin ATM operated by Bitcoiniacs opened in
the Waves coffee shop in downtown Vancouver, Canada

17. ADVANTAGES
•No third party can prevent or control your transactions
•Transactions fees are much lower
• Bitcoin is free software
•No inflation risk, coin’s creation is limited
•Bitcoins Cannot be Stolen
•No Tracking
•No Risk of “Charge-backs”
•Security and control
•Transparent and neutral
•Micro transactions Global

18. DISADVANTAGES
•Degree of acceptance
•Volatility
•Wallets can be lost
• Lack of price stability.
• No buyer protection
• Lack of regulations
• Bitcoins Are Not Widely Accepted
•Bitcoin Valuation Fluctuates
•Risk of Unknown Technical Flaws
•No Valuation Guarantee
•No Physical Form

19. Thankyou 