What is Cryptocurrency, how does it work etc

1. WHAT IS CRYPTOCURRENCY: 21ST-CENTURY
UNICORN – OR THE MONEY OF THE FUTURE?
• Cryptocurrency is an internet-based medium of exchange which uses cryptographical functions to conduct financial transactions. Cryptocurrencies leverage blockchain
technology to gain decentralization, transparency and immutability.
• The most important feature of a cryptocurrency is that it is not controlled by any central authority: the decentralized nature of the blockchain makes cryptocurrencies
theoretically immune to the old ways of government control and interference.
• Cryptocurrencies can be sent directly between two parties via the use of private and public keys. These transfers can be done with minimal processing fees, allowing
users to avoid the steep fees charged by traditional financial institutions.

2. HISTORY OF CRYPTOCURRENCY
• Cryptocurrency is a completely new digital form of currency created by the mysterious
and still relatively unknown Satoshi Nakamoto. He published a white paper
called Bitcoin: A Peer-to-Peer Electronic Cash System.
• The whitepaper revealed the workings of the “Bitcoin blockchain network,” and it would
eventually lead to the first Bitcoin ever found in January 2009. By March 2010, the first
cryptocurrency exchange was launched, and by 2011, you could exchange Bitcoins for
US dollars. Well, it was only worth a few cents in the beginning.
• Over the next decade, Bitcoin would grow in worth, but there were ups and downs.
Many other cryptocurrencies also popped up during this period including Ethereum,
Litecoin, Dogecoin, and a variety of others.
• Today, 11 years later in January 2020, each Bitcoin is worth $8,429. The
cryptocurrency recently received a huge boost after it was revealed that Craig Wright
held the keys to $8.9 billion in Bitcoins also known as the Tulip Trust.

3. UNDERSTANDING CRYPTOCURRENCY TERMS
There are a few terms that commonly pop up when looking at cryptocurrencies. These include but are not limited to:
• Altcoins
Bitcoin was the first ever created cryptocurrency.
Everything else falls under “altcoins,” including
Ethereum, Litecoin, Dogecoin, Bitcoin Cash,
Ethereum Classic, and hundreds of others.
• Blockchain
Every cryptocurrency transaction is recorded on a
blockchain, which is a public record that verifies the
digital currency transactions in order to prevent
fraud and other scams. Transactions are saved as
blocks, and each new block adds to the chain.
There is a new block added about every 10
minutes, but this changes over time.
• Cryptography
This is the art of writing in or deciphering code. It
uses mathematics and algorithms to create secure
transactions in online platforms, which is how we
have encrypted accounts and digital currencies.
• Fiat
Fiat currency is the paper money represented in
Euros, British pounds, or US dollars.

4. • Mining
Cryptocurrency mining uses the proof-of-work
(PoW) system where digital miners can solve math
problems to validate all cryptocurrency transactions.
These miners discover cryptocurrency in exchange
for their time and computer resources. Since these
mathematical calculations require a lot of time and
resources, larger computers with higher GPU
requirements are necessary.
• Public Address
Just like a physical house address, a public address
is a combination of letters and numbers that is used
to send cryptocurrency to and from owners. It’s the
only public-facing piece of data that exists on the
blockchain. Each transaction has its own address.
• Private Key
A private key is used to store the password that
gives a cryptocurrency owner access to their
wallets. Each wallet relates to its own key, and
without that key, users cannot access their coins.
• Nodes
A node is a computer that has joined the worldwide
cryptocurrency blockchain network. These nodes
serve as a way to check transactions recorded on
the blockchain. Even if one node shows an incorrect
transaction, then the transaction won’t complete,
which means that cryptocurrency is incredibly hard,
maybe even impossible, to corrupt

5. USE OF NETWORKS AND NODES IN
CRYPTOCURRENCIES.
• The peer-to-peer network structure in cryptocurrency is structured according to the consensus
mechanism that they are utilizing. For cryptocurrency like Bitcoin and Ethereum which uses a
normal proof-of-work consensus mechanism (Ethereum will eventually move on to Proof of Stake), all the
nodes have the same privilege. The idea is to create an egalitarian network. The nodes are not given any
special privileges, however, their functions and degree of participation may differ. There is no centralized
server/entity, nor is there any hierarchy. It is a flat topology.
• Example- Mycelia uses the blockchain to create a peer-to-peer music distribution system. Founded by the
UK singer-songwriter Imogen Heap, Mycelia enables musicians to sell songs directly to audiences, as
well as license samples to producers and divvy up royalties to songwriters and musicians — all of these
functions being automated by smart contracts. The capacity of blockchains to issue payments in fractional
cryptocurrency amounts (micropayments) suggests this use case for the blockchain has a strong chance
of success.

6. UNDERSTANDING CRYPTOCURRENCY PROPERTIES
• 1) Irreversible: After confirmation, a transaction can‘t be reversed.
• 2) Pseudonymous: Neither transactions nor accounts are connected to real-world identities. You
receive Bitcoins on so-called addresses, which are randomly seeming chains of around 30 characters.
While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the
real-world identity of users with those addresses.
• 3) Fast and global: Transactions are propagated nearly instantly in the network and are confirmed in a
couple of minutes. Since they happen in a global network of computers they are completely indifferent
of your physical location.
• 4) Secure: Cryptocurrency funds are locked in a public key cryptography system. Only the owner of
the private key can send cryptocurrency. Strong cryptography and the magic of big numbers make it
impossible to break this scheme.
• 5) Permissionless: You don‘t have to ask anybody to use cryptocurrency. It‘s just a software that
everybody can download for free. After you installed it, you can receive and send Bitcoins or other
cryptocurrencies.

7. THE CRYPTO MARKET
Bitcoin
• It is common knowledge that whenever cryptocurrency is
mentioned, Bitcoin is the first to come to all of our minds.
• Bitcoin, since its inception, has seen steady growth. It had reached an
all-time high on Dec 2017, around $19k. Following that, the BTC price
has seen a downtrend with occasional upsurge.

9. ETHEREUM
• It is the second most popular cryptocurrency next to the BITCOIN. Ethereum went
live in July 2015. Since then, if we look at the growth chart, there is a steady
increase until 2017 end. However, in Jan 2018 the ETH price took a great upsurge
reaching its highest ETH/USD price of $1396.42. Following that, the year 2018 and
2019 price saw a decline in the ETH prices. As of now, Ethereum’s price has a slight
variation of around 1 to 2% leaning either on the positive or negative side.

11. XRP MARKET CAP
• Moving onto the next altcoin. Ripple (XRP) is also among the top 5
cryptocurrencies. After Ripple was created in 2012. However, the price
gained momentum, not until 2017. In Jan 2018, the XRP/USD price
reached its peak at approx $3. Since then, to date, we see a lot of
activity in the price chart

13. FACTORS THAT WILL AFFECT THE CRYPTO
MARKET IN 2020
• China’s Blockchain Adoption
As we all know, China is all set to adopt Blockchain into its day-to-day activities. The Chinese Government is
diligently working towards this adoption. The news has already created quite a stir in the industry and the prices of
most of the cryptos including Bitcoin have surged. This Bitcoin and crypto price trend would likely continue in the
coming year 2020.
• Halving and Hard forks
2019 year-end and 2020 have many halving and hard forks events lined up. Bitcoin halving in May 2020, Bitcoin
Cash Halving by May end, Ethereum hard fork in June 2020, Bitcoin hard fork in Jan 2020, Monero Hard Fork are
some from the wide lists of such events. Each event will affect the crypto industry and prices will swing.
• Updated Crypto Regulations
As every country is either launching digital currency or adopting blockchain, new crypto regulations are bound to
come into the market. Either the rules will be more strict towards crypto trading or will push the traders to alternate
options. All-in-all, the crypto market will be affected in 2020 by these regulations.
• Introduction of New Coins/ Tokens
Every alternate day, there is a new coin being either launched or announced. Facebook’s Libra is the most sought
out coin of 2020. With the anticipation of these coins, it is hard to predict on which side the crypto industry will lean.

14. HOW CRYPTOCURRENCIES CAN HELP
GLOBAL ECONOMY AND BUILD A BETTER
FUTURE
• 1. A Beneficial Rise in Economic Activities
There is already an entire industry built around cryptocurrencies and it’s held by institutions dedicated to supervising all the
digital coin exchanges taking place throughout the world. The rate at which the cryptocurrency industry is growing is earth-
shattering and this can be confirmed by early adopters that became rich overnight and found opportunities to grow
financially.
• 2. Great Opportunities for Poorly Banked Countries
More than a third of the world population does not have access to basic banking services that can help them out in case of a
personal financial crisis - loans, checking accounts and the list can go on. There are now many apps and programs that
facilitate the use of cryptocurrencies and bring them closer to the wider audience. An added benefit of cryptocurrency use is
that it’s completely decentralized, so trading can be done freely across borders.
• 3. Low Transaction Costs
Because cryptocurrencies and blockchain don’t need an actual brick-and-mortar building to exist, the costs associated with
their transactioning are minimal. There is no need for employee wages, utility bills or rent to be paid, so these savings
naturally morph into low transaction fees. This in turn encourages more and more people to trust these new financial tools
and start transactioning, allowing for the global economy to be more closely intertwined.

15. • 4. Increased Transparency of Transactions
Since all blockchain and cryptocurrencies transactions are automated and digitized, they are all
tracked in a distributed ledger. The best part about it is that it cannot be manipulated by either
people or companies, which greatly diminishes the risk of fraud and corruption. This means that
underdeveloped countries also have a greater chance of entering the financial transactions
game and boost their own economy and social prospects. What’s more, citizens will be able to
keep track of where state funds will be oriented and will thus have a say within their own political
climate.
• 5. More Power to Entrepreneurs
• There’s never been a more prosperous time to do business than it is now, in the sense that
blockchain technology and cryptocurrencies can help entrepreneurs receive payments in
more currencies. BitPesa is one such company that helps business owners in Africa make
financial transactions with European, American and Asian companies. The aim is to help small
and medium business everywhere get better financial coverage and a liberated financial
connection with the rest of the world.

16. WRAPPING UP
Cryptocurrency may be the way that you forge your fortune, and it’s become a well-established part of the economy.
However, not all merchants and marketplaces offer Bitcoin. Our economy has become more open-minded towards digital
currencies, and it’s likely that won’t change. There may be another thousand cryptocurrencies developed in the next years.
• VIDEO LINK
https://www.youtube.com/watch?v=IWeCQkIJNkY

17. THANK YOU FOR YOUR PATIENCE !