Deva Sharma

BITCOIN
&
CRYPTOCURRENCY
TECHNOLOGIES
 • It is a Digital(virtual currency).
• It can always be seen virtually over the
internet.
• Bitcoin: A Peer-to-Peer Electronic Cash
System
Bitcoin: What is it? • It is an Electronic Payment System.
• It's use is same as of INR,USD,etc (egs).
• It is Nothing but a Programmed
Algorithms(Highly complex and
confidential).
• One example of an Electronic transaction:

Priya Rahul
(using any software/ third party xxxxx/algo (using any software/ third party
service like Bitmex) service like Bitmex)

These numbers have

some mathematical
properties,so it is hard to
defraud the system.
Famous Exchanges of
cryptocurrency

Poloniex
Bittrex
Bitfinex
Bitmex
 Why couldn't Priya and Rahul
use Paypal?

Aren't there
Why couldn't Priya just sent
other more an electronic check?
standard
ways?
Why Priya haven’t used other
approaches that are more well
understood???
 PRIVACY.

OPEN.
Properties of
Bitcoin:- DECENTRALIZED.

EASY TO STORE.
 Bitcoin is Created by
XXXXXXX XXXXXXXX.

Who Created
it? Don't run behind XXXXXXX
XXXXXXXX, it is time
wasting and risky to find
that person.
 How Bitcoin works:High-level explanation
Bitcoin
(decentralised- no central INFACT
banks moniroring its creation
and transaction activity)

It operates on a P2P networki.e peer 2 peer network which is collection of individual

hosts that share their resources with each other.However in context of bitcoin
transactions, they agree on the Bitcoin Protocol and implement it and use it.

(Note: Bitcoin Protocol is created by Bitcoin creator, and as glitches found it has been
timely improvised.
 P2P
NETWORK:-
BITCOIN CRYPTOCURRENCY?

BECAUSE

It involves a lot of cryptographic

methods in order to facilitate Bitcoin
transactions could really take place.
Let's Understand the Whole Protocol.......Shall we?

We have again our earlier friends ALICE and BOB.

30BTC'S

PRIYA RAHUL

TOTAL FUND 50 BTC'S TRANSACTION FEES: 2 BTC(LET)

ALICE BALANCE AFTER SUCCESFUL TRANSACTION: 18 BTC'S

 30BTC'S
PRIYA RAHUL

TOTAL FUND 50 BTC'S TRANSACTION FEES: 0.1 BTC(LET)

INCENTIVE/REWARD of other nodes in bitcoin

Network/system to help Alice in validating the details of
this transaction for Bob.
DG AND BINDING.
 30BTC'S
PRIYA RAHUL

TRANSACTION FEES: 0.1 BTC(LET)

NODE

NODE
NODE
NODE
 30BTC'S
PRIYA RAHUL

TRANSACTION FEES: 0.1 BTC(LET)

NODE

NODE NOW, Rahul

NODE will Receive
NODE
Alert
 If PRIYA wants , he can be
cheated easily.
Can Rahul be Cheated?
Concept of Double Spending.
How do we reduce the risk of double
spending?
• BY using the specific nodes in this P2P network/Bitcoin system who
are known as Bitcoin miners.

BITCOIN MINERS
They see all the transactions
and place and compile them

TRANSACTION BLOCK
 TRANSACTION BLOCK

ENCODE'S
TRANSACTION
SUMMARY OF
ALSO RECORDS ALL
RECORDS ALL LAST
THE TRANSACTIONS
UNRECORDED TRANSACTION
HAVING THE DETAILS
TRANSACTIONS BLOCK FOR
OF MINER'S
MAINTAING THE
REWARD/INCENTIVE
LEVEL OF
CONTINUITY
BITCOIN INCLUDES
MINER

A SPECIALLY CRAFTED SEQUENCE OF

NUMBERS WHICH IS ASSOCIATED
WITH THIS TRANSACTION

PROOF OF WORK
CONCEPT OF BLOCKCHAIN
BLOCKCHAIN: A DISTRIBUTED TRANSACTION
LEDGER
• Every Block contains multiple transactions.

• Massively duplicated across network nodes.

• Shared with a P2P file transfer protocol.

 Very high volatility.

Moving average systems.

TRADING Psar type of trading system.

METHODOLOGIES:
Swing trading systems.

Plus can do insider trading in BTC as well as in alts.

Possible Risks and Risks:-
Rewards for
trading in 1.Liquidity risk.
cryptocurrencies:- 2.Information asymmetry.
3.Highly manipulated market.
4.Defraud of Bitcoins from wallet.
5.The Risk of Breaking the law and heavy
penalties.
 1.Highly volatile, so if one have high
accuracy then higher earning ROE.
2.Higly manipulated market(alts),so if
one can do insider trading and earn a
nice ROE in very short period of time eg:-
1000%.
Rewards:- 3.can create wealth if one cathces a
strong move in these markets.
4. None can't track your income,even
intelligences can't track, so no income
tax,permission.
To be continued…