Cryptocurrencies: by Rui Sakurai and Shane Spears

Cryptocurrencies
By Rui Sakurai and Shane Spears

What is it?
Cryptocurrency is a peer-to-peer form of virtual
money that uses cryptography to secure itself from
tampering.
The cryptocurrency can be sent to other people

just like any normal real-world currency.
It is stored in a virtual software wallet.

Notable Examples
Bitcoin (BTC)
•First decentralized cryptocurrency
•Created with the idea of a decentralized online currency
•Has a level of anonymity to it
•By far the largest and most known Cryptocurrency
•Open source
•Has maximum amount of 21,000,000

Ethereum (ETH)
•The cryptocurrency with the second largest market cap.
•Does many of the things that Bitcoin does, but has a blockchain
that’s much easier to program off of.
•Is popular due to how easy it is to develop off of.

Monero (XMR)
•Key value is anonymity
•It’s blockchain is completely anonymous
•It is popular due to its anonymity, which is very important to people
for many different reasons.

History
The first attempt was B-money in 1998, which Bitcoin took
large inspiration and many ideas from.
Bitcoin was the first to succeed in 2009.
They are created as an alternative to centralized fiat money that

requires a government to back it.
There are over a thousand different cryptocurrencies as of

September 2017.
How They Work
People ‘mine’ the currency as a way to generate it
and earn it.
People looking to use the currency download a

software ‘wallet’.
This wallet generates an address that can be used

to send and receive the currency.
Transactions are sent through a ‘blockchain’

that verifies that the transaction is legitimate
The blockchain is managed by a peer-to-peer

network of computers.
Wallets
Cryptocurrency wallets are software that
generates an address that allows you to receive and send
the currency.
When sending or receiving currency, your

address and the other person's address form a ‘contract’
in the blockchain.
Once the contract is proven valid, the currency

is distributed to your wallet.
Example of a Bitcoin address:

1HB5XMLmzFVj8ALj6mfBsbifRoD4miY36v
The Blockchain
The blockchain is like a ledger for all
transactions of a cryptocurrency.
The blockchain is maintained by a peer-to-

peer network of miners.
The blockchain uses transaction history to

prove that a wallet address has the correct amount of
currency assigned to it.
Transactions create “blocks” that cannot be

edited, which makes it impossible to cheat the system.
Mining
Is broken up into two types: Proof of Work and
Proof of Stake.
Is typically done with a high end graphics card

or through computers specifically designed with mining in
mind.
Mining is verifying blocks generated by

transactions in the blockchain.
Mining is essentially bookkeeping for the

network and getting rewarded a small amount for it.
An example of a mining setup.
Mining Pools
To make Proof of Work mining effective for
people without high powered machines or large amounts
of equipment, people often form mining pools.
Mining pools are groups of people putting their

work together to mine a block.
These people are rewarded based on how

much they contribute to solving the block.
Why a GPU over a CPU?
CPUs can’t process the mining information
nearly as fast as a GPU can.
GPUs are designed for repetitive work, while

CPU’ are not.
CPUs are designed to be an executive and

make decisions, while GPUs are laborers made for
constant video and mathematical processing.
Cloud Mining
Some companies offer a “cloud mining”
service.
For a fee the company will dedicate a certain

amount of hardware to mine a currency for you.
The company handles maintenance and

oversees the hardware, while all you have to is pay the
fee and collect your currency.
Ethereum mining contracts offered by the cloud mining company Genesis Mining
Altcoins
Bitcoin is the most popular cryptocurrency, but
there are over a thousand different alternative, lesser
known cryptocurrencies known as ‘altcoins’.
Altcoins are just like Bitcoin, except that they

usually have something that sets them apart.
42-coin, for example, is special in the fact that

only 42 of 42-coin exist.
Most of the time it’s a slight variation in how

the coin's blockchain functions or something similar.
Why use it?
It’s relatively anonymous
-With most coins the blockchain is
publicly visible to everyone
Its value is global, so it’s not limited by

borders.
It doesn’t require a government to back it.
Many companies such as Steam and Newegg

have started accepting Bitcoin as a form of payment.
References
http://www.pngpix.com/wp-
content/uploads/2016/10/PNGPIX-COM-Bitcoin-PNG-
Transparent-Image.png
https://www.genesis-mining.com/pricing
https://bitcoin.org/img/icons/opengraph.png
http://files.coinmarketcap.com.s3-website-us-east-
1.amazonaws.com/static/img/coins/200x200/ethereum.png
https://steemit.com/bitcoin/@steemitguide/2017-top-list-of-
big-companies-that-accept-bitcoin-and-cryptocurrencies
References
http://blockgeeks.com/wp-
content/uploads/2017/03/infographics2017-01.png
https://www.burniegroup.com/wp-
content/uploads/2017/05/Blockchain-infographic.png
https://fossbytes.com/wp-content/uploads/2017/04/bitcoin-
working.jpg
https://bitcoin.org/en/how-it-works
https://en.bitcoin.it/wiki/Why_a_GPU_mines_faster_than_a_
CPU
https://en.bitcoin.it/wiki/Category:Mining_contractors
References
https://en.bitcoin.it/wiki/Mining
https://www.lifewire.com/cryptocoin-mining-for-beginners-
2483064
https://neufund.org/cms_resources/tutorial/coins-2.png
http://files.coinmarketcap.com.s3-website-us-east-
1.amazonaws.com/static/img/coins/200x200/monero.png
https://en.bitcoin.it/wiki/B-money
http://www.allwhitebackground.com/images/2/2270.jpg
https://www.odt.co.nz/sites/default/files/styles/odt_story_slid
eshow/public/slideshow/node-
389965/2016/07/bitcoin_mining_computers_are_pictured_in
_bitmain_s_57830be267.jpg?itok=8CRP1Osb

Cryptocurrencies: by Rui Sakurai and Shane Spears

Uploaded by

Copyright:

Available Formats

Cryptocurrencies: by Rui Sakurai and Shane Spears

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cryptocurrencies: by Rui Sakurai and Shane Spears

Uploaded by

Copyright:

Available Formats

Cryptocurrencies

By Rui Sakurai and Shane Spears

The cryptocurrency can be sent to other people

It is stored in a virtual software wallet.

•Created with the idea of a decentralized online currency

•Has a level of anonymity to it

•By far the largest and most known Cryptocurrency

•Has maximum amount of 21,000,000

•Is popular due to how easy it is to develop off of.

•It’s blockchain is completely anonymous

•It is popular due to its anonymity, which is very important to people

for many different reasons.

Bitcoin was the first to succeed in 2009.

They are created as an alternative to centralized fiat money that

There are over a thousand different cryptocurrencies as of

People looking to use the currency download a

This wallet generates an address that can be used

Transactions are sent through a ‘blockchain’

The blockchain is managed by a peer-to-peer

When sending or receiving currency, your

Once the contract is proven valid, the currency

Example of a Bitcoin address:

The blockchain is maintained by a peer-to-

The blockchain uses transaction history to

Transactions create “blocks” that cannot be

Is typically done with a high end graphics card

Mining is verifying blocks generated by

Mining is essentially bookkeeping for the

Mining pools are groups of people putting their

These people are rewarded based on how

GPUs are designed for repetitive work, while

CPUs are designed to be an executive and

For a fee the company will dedicate a certain

The company handles maintenance and

Altcoins are just like Bitcoin, except that they

42-coin, for example, is special in the fact that

Most of the time it’s a slight variation in how

Its value is global, so it’s not limited by

It doesn’t require a government to back it.

Many companies such as Steam and Newegg

You might also like