Cryptocurrency solving problems
- 1. Made by: SUMAN NAYAK
- 2. Index: What is cryptocurrency? How cryptocurrency works? How cryptocurrency works? Working of crptocurrency What is virtual currency? How virtual currency works? Which problem have virtual cryptocurrency come to solve? Solving problems Solving problems
- 3. What is cryptocurrency? A cryptocurrency (or crypto currency) is digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrency is a kind of digital currency, virtual currency or alternative currency. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems.The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database. Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency.
- 5. How cryptocurrency works? Transactions are sent between peers using software called “cryptocurrency wallets.” The person creating the transaction uses the wallet software to transfer balances from one account (AKA a public address) to another. To transfer funds, knowledge of a password (AKA a private key) associated with the account is needed. Transactions made between peers are encrypted and then broadcast to the cryptocurrency’s network and queued up to be added to the public ledger. Transactions are then recorded on the public ledger via a process called “mining”.
- 6. Diagram
- 7. Working of cryptocurrency All users of a given cryptocurrency have access to the ledger if they choose to download a “full node” wallet (as opposed to holding their coins in a third party wallet like Coinbase). The transaction amounts are public, but who sent the transaction is encrypted . Each transaction leads back to a unique set of keys. Whoever owns a set of keys, owns the amount of cryptocurrency associated with those keys (just like whoever owns a bank account owns the money in it). Many transactions are added to a ledger at once. These “blocks” of transactions are added sequentially by miners. That is why the ledger and the technology behind it are called “block” “chain.” It is a “chain” of “blocks” of transactions.
- 8. What is virtual currency? Virtual currency, or virtual money, is a type of unregulated, digital money, which is issued and usually controlled by its developers and used and accepted among the members of a specific virtual community. The U.S. Commodity Futures Trading Commission has warned investors against pump and dump schemes that use virtual currencies.The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, defined virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defined virtual currency as "a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically". By contrast, a digital currency that is issued by a central bank is defined as "central bank digital currency".
- 9. Diagram
- 10. How virtual currency works? Carrying on a business - If you use cryptocurrencies to pay for (or accept them as payment for) goods or services, the transactions will be subject to goods and services tax (GST). Mining bitcoin - If you are mining bitcoins or other digital currencies, any profits you make will be included in your assessable income. A cryptocurrency is a digital currency using cryptography to secure transactions and to control the creation of new currency units. Since not all virtual currencies use cryptography, not all virtual currencies are cryptocurrencies. ... At the end of February 2015 transactions of electronic money will be possible.
- 11. How it works?
- 12. Which problem have virtual currency come to solve? The cryptocurrency, assets of the gender digital currency, is a virtual monetary tool that uses cryptography to secure transactions and control the creation of new units of the currency. The most famous of them is bitcoin, created in 2009 by Satoshi Nakamoto. Bitcoin allows you to make financial transactions without a broker, verified by “us” (the network participants) P2P (Peer-to-Peer) and recorded in a distributed databank called Blockchain.
- 13. Solving problems Thus, the Blockchain Bitcoin technology allows such data to be transmitted to all the participants of the network, in a decentralized and transparent way, making unnecessary the work of a broker to guarantee the accounting and reliability of the relations developed through the Internet. With the decentralization of the Bitcoin network and the absence of a central administrator, it is impossible for any governmental entity to manipulate the emission and the value of the bitcoins or even to induce inflation by “printing” new coins.
- 14. Solving problems Besides the evident advantages of the decentralization of the Bitcoin network, which problems has Bitcoin come to solve? Now, much more than software running on computers spread around the world, it is a network of independent electronic transfers of a third part, which enliven a free monetary system through the Internet. Its invention, however, came to unravel something much bigger: the problems inherent in the current centralized system of financial transfer and intermediation. Let us check the main ones (Centralized Monetary Policy, intermediation costs)
- 15. Diagram
- 16. Thank you: