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Cryptocurrency Peter Carnesciali Marcus Rivera BitcoinDogecoin LitecoinPeercoin.

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Presentation on theme: "Cryptocurrency Peter Carnesciali Marcus Rivera BitcoinDogecoin LitecoinPeercoin."— Presentation transcript:

1 Cryptocurrency Peter Carnesciali Marcus Rivera BitcoinDogecoin LitecoinPeercoin

2 What is Cryptocurrency? A type of digital currency which relies on cryptography o Uses SHA-256 hash functions or scrypt, a password based key derivation function Decentralized - no governing bank No physical coin. Value by scarcity, supply and demand

3 History 2008 - Satoshi Nakamoto’s white paper 2009 - Bitcoin was created 2011 - Litecoin 2011 to present - Many Cryptocurrencies

4 Addresses: 27-34 alphanumeric chars

5 How transactions work Each address has a public key and private key Sign the transaction, proving you are the owner of the address Specify which address sending to, and how much

6 Addresses Generally disposable o Generate address for every transaction you receive 2^160 possible addresses o 2^63 grains of sand on all beaches on earth Wallet holds keys for every address you own o If you lose the private keys, you are screwed

7 Traditional Bank Methods Bank keeps a ledger o Account numbers and balances Bank verifies all transactions Transfers money between accounts

8 Cryptocurrency Methods Members of community (miners) keep a ledger o Addresses and balances Verify transactions as they happen o Approve them if the balance exists Transfer balance to other address Issue Confirmation

9 Majority Rules If miners disagree about a balance, the majority rules, and all align to that. Therefore, to commit fraud you would need >50% of mining power o All of Google's processing power not enough More people mining, more secure

10 Mining Transactions grouped into blocks Solve a "proof-of-work" problem for the block Artificially difficult hash. o SHA-256 Hash of transactions has to meet certain criteria  Leading zeros, etc. If you solve, you are rewarded with bitcoins

11 Leading Zeros If we need 4 leading zeros "Hello, world!0" => 1312af178c253f84028d480a6adc1e25e81caa44c749ec8197619... "Hello, world!1" => e9afc424b79e4f6ab42d99c81156d3a17228d6e1eef4139be78e9... "Hello, world!2" => ae37343a357a8297591625e7134cbea22f5928be8ca2a32aa475...... "Hello, world!4248" => 6e110d98b388e77e9c6f042ac6b497cec46660deef75a55ebc... "Hello, world!4249" => c004190b822f1669cac8dc37e761cb73652e7832fb81456570... "Hello, world!4250" => 0000c3af42fc31103f1fdc0151fa747ff87349a4714df7cc52ea4... Took 4251 tries to get 4 leading zeros

12 Benefits Anonymous Instant (within few seconds) o For large transactions, wait 10 minutes to fully confirm No (or very low) fees o (usually none, sometimes 0.0005 BTC)  Could send $100,000 for max fee of $0.23 Transactions are permanent o No chargebacks like with credit cards/PayPal

13 Struggles Government trying to regulate Price fluctuates a lot o Started at under 1 cent o Got above $1000 o Currently around $450 ●Output Overflow Bug ○August 15, 2010 ○Only major security flaw found and exploited Bitcoin Price

14 Dogecoin One of the most popular altcoins Based on the "doge" meme Founded on the framework of Bitcoin Sponsored Jamaican Bobsled team for Olympics Sponsoring NASCAR driver this weekend


16 Strange Donuts In St. Louis Accept Bitcoin and Dogecoin Scan QR code for address Send payment

17 Questions?

18 Sources "Cryptocurrency." Wikipedia. 28 Apr. 2014. Wikimedia Foundation. 29 Apr. 2014. "History of Bitcoin." Wikipedia. 26 Apr. 2014. Wikimedia Foundation. 27 Apr. 2014. Ingraham, Nathan. "Dogecoin has its day: The unlikely success of a joke cryptocurrency." The Verge. 29 Apr. 2014. 29 Apr. 2014. "What's the History of Cryptocurrency?" Cryptocurrency. 30 Apr. 2014. "Quantitative Analysis of the Full Bitcoin Transaction Graph" The Weizmann Institute of Science, Israel. 1 May. 2014.

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