The existence of digital currencies total distributing the world
economy to change we use todays traditional way. the invention of
internet ,encyclopedia, amazon they are break the way information
are transferred to one another.
A digital currency is electronic money but even if it can be used to
buy services or physical goods like traditional money.
Bitcoin uses peer-to-peer technology to operate with no central
authority or banks; managing transactions and the issuing of
bitcoins is carried out collectively by the network.
Bitcoin is money what internet is to information.
To understand the applications and implications of the technology,
it’s first important to define the terminology.
Cryptocurrency is an electronic currency and asset.
Bitcoin is the today well-known Cryptocurrency underpinned by
A blockchain is a type of distributed ledger, which enables
records to be stored and sorted into blocks. Blockchain can create
trust, which may remove the need for third parties.
Distributed ledger technology- is a family of technologies that
includes blockchain, where a ledger is maintained by a group of
peers rather than a single central authority.
Miner – A peer in the Bitcoin blockchain network that confirms or
verifies a transaction by solving a challenging cryptographic
problem and adds the transaction or ‘block’ to the blockchain.
Keys: Addresses used to validate and secure transactions. Public
keys can only be used to view the balance and transactions. To
make transactions, a private key is needed to verify ownership of
Node: A computer connected to the blockchain network that
stores a copy of the public ledger. Some nodes also mine to verify
Bitcoin is a peer-to-peer electronic payment system introduced as
open source software in 2009 by developer Satoshi Nakamoto.
The digital currency created and used in the system is also called
Bitcoin and is alternatively referred to as a virtual currency,
electronic money, or crypto currency
How it works?
The basics for a new user
you have installed a Bitcoin wallet on your computer or mobile
phone, it will generate your first
Bitcoin address and you can create more whenever you need one.
You can disclose your addresses to your friends so that they can
pay you or vice versa. In fact, this is pretty similar to how email
works, except that Bitcoin addresses should only be used once
As we know information was copied not transfer completely. For
example when I use email attach document to send somebody the
file is already copied /attached to that person.
So the interesting thing was value/material should give to peers
so how digital coin can transfer? How to exchange the value of
thing(money) transfer without copied was difficult to the pervious
If Somebody assign to validate the transaction of money .
how can we trust ? How are trust that digital orange transfer
between two peers are also copied for himself and share for other
peers before transaction?
To solve this problem the book keeping or ledger to make public see
by everybody in the internet and everyone can check/control digital
orange . If some one interruption /change the ledger but all rest
computer record are to different because the leger are distributed to
all computer so disqualified .
This orange are Bitcoin and the techniques called Bitcoin protocol.
What block chain ?
-community base technology which manages by public and maintain
Update check to how the information was correct based on
distributed computing ledger keeping work.
Simple Meaning definition -block –box, Chain-interconnected.
the first block was created by Satoshi Nakamoto called “Genesis
Bitcoin mining is the processing of transactions in the digital
currency system, in which the records of current Bitcoin
transactions, known as a blocks, are added to the record of past
transactions, known as the block chain.
By solving a challenging cryptographic problem updating the
ledger. Bitcoin are created as a reward for payment processing
work in which users who offer their computing power verify and
record payments into a public ledger. Called mining, 12.5 BTC per
block are awards. (*** Now 1BTC= 8,130.58$ in USA Dollar***)
Bitcoin generally started with individuals and small organizations
Public Key Cryptography is an asymmetric encryption scheme that
uses two sets of keys: a public key that is widely disseminated and
a private key that is only known to the owner.
Public key cryptography can be used to create digital signatures
and is used in a wide array of applications, such as HTTPS
internet protocol, for authentication in critical applications and
also in chip-based payment cards.
Wallet: The digital keys are not actually stored in the network, but
are instead created and stored by users in a file, or simple
database, called a wallet
Think of the public key as similar to a bank account number and
the private key as similar to the secret PIN.
A private key is simply a number, picked at random. Used to
create signatures that are required to spend Bitcoins.
The private key must remain secret at all times, because revealing
it to third parties is equivalent to giving them control over the
Bitcoins secured by that key.
The private key must also be backed up and protected from
accidental loss, because if it’s lost it cannot be recovered and the
funds secured by it are forever lost, too.
The public key is calculated from the private key using elliptic
curve multiplication, which is irreversible:
k is the private key
K is the resulting public key
G is a constant point called the generator point.
A private key can be converted into a public key, but a public key
cannot be converted back into a private key because the math
only works one way.
It is a string of digits and characters that can be shared with
Addresses are produced from Public Keys through the use of one-
way cryptographic hashing.
For key exchange use Diffe-Hellman key exchange
For hashing SHA 256,RIPEMD and Elliptic curve for generating a
finite group Discrete logarithmic problem hard to solve
All information concerning the Bitcoin money transaction are free see
.No individual or organization can control or manipulate the Bitcoin
protocol because it is cryptographically secure.
Security :-protect from single point of attack.
Payment freedom - It is possible to send and receive any
amount of money instantly anywhere in the world at any time. No
bank holidays. No borders. No imposed limits. Bitcoin allows its
users to be in full control of their money.
Very low fees - Bitcoin payments are currently processed with
either no fees or extremely small fees.
Security and control - Bitcoin users are in full control of their
transactions; Bitcoin payments can be made without personal
information tied to the transaction. This offers strong protection
against identity theft. Bitcoin users can also protect their money
with backup and encryption.
Can be use for other malicious activities because of unknown as
No one can regulate the Cryptocurrency .
Government issue because of Bitcoin so powerful.
Denial of service.
How to use Bitcoin ?
Using Bitcoin as an Individual simple just Install the official
Bitcoin client on your computer.
To get started using Bitcoin, Bitcoin page to set up your account
on the computer. Software are compatible for Mac, Windows, and
Set up your wallet:
Like regular money, you've got to have a place to keep your digital
money. Wallets are basically programs that sort and track your
digital currency via your account settings.
There are a variety of options available, depending on your
intentions for using Bitcoin.
Software wallet ( eg. BitcoinQT, Armory)
Web wallets are always available online, making them probably
the most convenient and user friendly. Web wallet options include:
eg.( Coinbase, Blockchain, Coinjar)
Bitcoin also link with bank to buy and sell for the transaction fees.
Behind Bitcoin it was a block chain are not only limited to Bitcoin we
can transfer services like smart contract, vote ,digital identity ,house
selling and buying option .
Ecommerce:- Airline ticket reservation (Expedia).
Microsoft XBOX Game:-purchase game through Bitcoin.
Health -transfer of patient information securely.
Smart Contract :-are contracts whose terms are recorded in a
computer language instead of legal language. Smart contracts can
be automatically executed by a computing system, such as a
suitable distributed ledger system By to create a digital agreement.
Rural Area :-which that are not infrastructure of Banking system.
My recommendation to this technology , anybody can invest in
the Bitcoin and participate in the mining activity.it was difficult
for individual but can join to other organization by contributing
of some hardware material. According to the donation of
material for mining process you can have get profit distribution.
you can customize and develop own digital Cryptocurrency the
code because Bitcoin was 100% free open source platform.