CryptocurrencyPeter Carnesciali

Marcus Rivera

Bitcoin Dogecoin

Litecoin Peercoin

What is Cryptocurrency?

• A type of digital currency which relies on cryptographyo 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

History• 2008 - Satoshi Nakamoto’s white paper

• 2009 - Bitcoin was created

• 2011 - Litecoin

• 2011 to present - Many Cryptocurrencies

Addresses: 27-34 alphanumeric chars

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

Addresses

• Generally disposableo Generate address for every transaction you receive

• 2^160 possible addresseso 2^63 grains of sand on all beaches on earth

• Wallet holds keys for every address you owno If you lose the private keys, you are screwed

Traditional Bank Methods

• Bank keeps a ledgero Account numbers and balances

• Bank verifies all transactions

• Transfers money between accounts

Cryptocurrency Methods

• Members of community (miners) keep a ledgero Addresses and balances

• Verify transactions as they happeno Approve them if the balance exists

• Transfer balance to other address

• Issue Confirmation

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 powero All of Google's processing power not enough

• More people mining, more secure

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

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

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 permanento No chargebacks like with credit cards/PayPal

Struggles

• Government trying to regulate

• Price fluctuates a loto Started at under 1 cento Got above $1000o Currently around $450

● Output Overflow Bug○ August 15, 2010○ Only major security flaw found and exploited

Bitcoin Price

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

Strange Donuts

• In St. Louis

• Accept Bitcoin and Dogecoin

• Scan QR code for address

• Send payment

Questions?

Sources"Cryptocurrency." Wikipedia. 28 Apr. 2014. Wikimedia Foundation. 29 Apr. 2014

<http://en.wikipedia.org/wiki/Cryptocurrency>.

"History of Bitcoin." Wikipedia. 26 Apr. 2014. Wikimedia Foundation. 27 Apr. 2014 <http://en.wikipedia.org/wiki/History_of_Bitcoin>.

Ingraham, Nathan. "Dogecoin has its day: The unlikely success of a joke cryptocurrency." The Verge. 29 Apr. 2014. 29 Apr. 2014 <http://www.theverge.com/2014/4/29/5665470/dogecoin-has-its-day-the-unlikely-success-of-a-joke-cryptocurrency>.

"What's the History of Cryptocurrency?" Cryptocurrency. 30 Apr. 2014 <https://www.coinpursuit.com/articles/whats-the-history-of-cryptocurrency.140/>.

"Quantitative Analysis of the Full Bitcoin Transaction Graph" The Weizmann Institute of Science, Israel. 1 May. 2014. <http://eprint.iacr.org/2012/584.pdf>