CRYPTOCURRENCY

B Y S A U R A B H S H R I V A S TA V A
AGENDA

• Definition
• History
• Introduction of block chain
• How does block chain technology works
• Timestamping network
• Use of blockchain
• Everyday application of blockchain
• Ico
• Legal issues
• Impact
• Benefits
• Futures
CRYPTOCURRENCY
• A digital currency designed to ensure the anonymity and security of online money transactions.
It uses cryptographic encryption to generate and to verify transactions.
• New currencies are created using a process called Extraction, while all transactions are
recorded in a public registry, a transaction block chain.
HISTORY

• In 1983 the American cryptographer david chaum conceived an anonymous cryptographic

electronic money called eecash
• Later, in 1995, he implemented it through digicash an early form of cryptographic electronic
payments which required user software in order to withdraw notes from a bank and designate
specific encrypted keys before it can be sent to a recipient
• Later, in 1995, he implemented it through digicash an early form of cryptographic electronic
payments which required user software in order to withdraw notes from a bank and designate
specific encrypted keys before it can be sent to a recipient. This allowed the digital currency to
be untraceable by the issuing bank, the government, or a third party
INTRODUCTION OF BLOCKCHAIN

• The blockchain is a digital ledger of online transactions that can keep records of not only just
financial transactions but virtually every kind of data transaction.
• To simplify this, let us take an analogy of a database that is available across a network of
computers, this network is designed to keep this data updated regularly. This idea of shared
data available across a network is the basic concept behind blockchain.
• It was originally invented to create a database that will record Cryptocurrency transactions. To
manage transparency the transaction of cryptocurrency is managed by its peer to peer
network, and not by just one central authority. This decentralization of data creates a robust
shared peer to peer network.
HOW DOES BLOCK CHAIN TECHNOLOGY
WORK?
• Blockchain technology is a public, distributed, and a cryptographically secure ledger that
automatically records and verifies numerous digital transactions.
• Blockchain is a decentralized timestamping network
 technology consists of a chain of blocks that carries valuable information. It is entirely open to
anyone on this platform. Its interesting property doesn’t let the data modified once it is stored.
Blockchain involves all parties involved in a business for safe and synchronized transactions. The
blockchain ledger records each and every transaction and put it into a block.
These blocks are connected to the previous blocks holding the fingerprint of each block. Since
the ledger is distributed, it works as a shared platform not giving access to one central
administration. As a result, it makes a tamper resistant and highly secured.
TIMESTAMPING NETWORK
• The document you want to be timestamped, is hashed along with
1. the timestamp of the previous document that was timestamped, and
2. proof-of-work, and this hash is encrypted using a secret only known to the auditor (a.k.a
miner) who discovered the proof-of-work. This encrypted hash is then broadcast to everyone to
see. In blockchains like that of the bitcoin, the auditor (a.k.a the miner) is then rewarded in
bitcoins for doing this labor.
 Proof-of-work is a way to prove to others that you did a lot of work using your computer
before you do something else like timestamp a document. Proof-of-work is used to prevent
auditors from making fraudulent claims without significant costs to themselves.
 In bitcoin, the first blockchain, the proof-of-work is to find a number which when
cryptographically hashed together with the transaction details gives another number less than
a threshold. The bitcoins network uses blockchains to timestamp transactions so that
ownership of bitcoins can be known without dispute, and giving the same coin to two people is
impossible.
WHAT IS THE USE OF BLOCKCHAIN?
• The question is legit but there are many practical uses of this technology that will help you to
sort your everyday life. For example, the finance sector is one of the strongest use cases for
the technology. The World Bank estimated that over $430 billion US in money transfers were
sent in 2015 and the blockchain will potentially cut out the middleman for these types of
transactions making the transactions more cost-efficient.
• Today, personal computing is the inseparable part of our lives this became possible due to the
invention of the Graphical User Interface (GUI), commonly known as “desktop”. The “wallet”
applications are the GUI devised for the blockchain, which is used to do financial transactions
using cryptocurrencies like Bitcoin and Ethereum.
• Transactions online are closely associated with the processes of identity verification for the
security and safety purpose. These wallet apps will evolve in the near future to include other
types of identity management.
WHAT ARE THE EVERYDAY APPLICATIONS
OF BLOCKCHAIN?
• Smart contracts
The distributed ledgers enable the coding of self-executing contracts that will execute when specific
conditions are met. For instance, a payer will only pay for a specific service once a service provider
meets certain benchmark, using the blockchain technology and Cryptocurrency enabling the payout to
be automated.
• File storage
files will be safe from hackers on a decentralized file storage network, this distribution of data
throughout the network protects the database from getting hacked or lost.
• Data management
Blockchain will empower users to manage and sell the data their online activity generates by easily
distributing in small fractional amounts, Cryptocurrency will be used for this type of transaction.
MAJOR CRYPTO-CURRENCIES –
5/12/2013
1.Bitcoin 11. Nxt
2. Litecoin 12. Novacoin
3. Peercoin 13. Freicoin
4. Namecoin 14. Anoncoin
5. Megacoin 15. Terracoin
6. Quarkcoin 16. CryptogenicBullion
7. Protoshares 17. Infinitecoin
8. Worldcoin 18. Zetacoin
9. Primecoin 19. BBQCoin
10. Feathercoin 20.Stablecoin
ICO
• ICOs (Initial Coin Offerings) are the vital lymph of cryptocurrency exchanges and for them to
function well, there needs to be trust in their legitimacy. ICOs provide a channel for fresh fiat
money into the Bitcoin world – which now has some 1300 cryptocurrencies, though only a
dozen or so matter, chief among them, Bitcoin, Ethereum, Litecoin, Monero, Bitcoin Cash,
Ripple.
• Without ICOs, the Bitcoin world would wither and die. Or at least find itself reduced to
anonymous exchanges serving illegal activities in the dark Web.
• So ICOs are key: They provide the link with the legal world of fiat money, banks and capital.
Unfortunately, in the absence of regulation and oversight from financial authorities, ICOs are
also the Wild West. The regulatory panorama is a veritable smorgasbord of varying (and no)
regulations that ICO issuers take advantage of.
 LEGAL ISSUES IN WORLD
• The European Union has passed no specific legislation relative to the status of bitcoin as a currency, but
has stated that VAT/GST is not applicable to the conversion between traditional (fiat) currency and bitcoin.
• VAT/GST
• and other taxes (such as income tax) still apply to transactions made using bitcoins for goods
and services
• In October 2015, the Court of Justice of the European Union ruled that "The exchange of traditional
currencies for units of the ‘bitcoin’ virtual currency is exempt from VAT" and that "Member States must
exempt, inter alia, transactions relating to ‘currency, bank notes and coins used as legal tender’", making
bitcoin a currency as opposed to being a commodity
• "Internet-based payment services that allow third party funding from anonymous sources may face an
increased risk of [money laundering/terrorist financing]." They concluded that this may "pose challenges to
countries in [anti-money laundering/counter terrorist financing] regulation and supervision"
LEGAL ISSUES IN INDIA

• On December 24, 2013, the reserve bank of India cautioned, the users, holders and traders of
virtual currencies, including bitcoins, about the potential risks that they are exposed to.
• The RBI had stated five major risks of trading in bitcoins.
• On February 1, 2017, the central bank again reminded the users of risk involved in bitcoin
trading.
• If any amount is earned by buying and selling of Bitcoins on a regular basis, the income would
be charged under the head “Profits and Gains from Business and Profession”
• If any amount is earned by investing in Bitcoins for a longer period of time, the income may be
charges under the head “Income from Capital Gains”
IMPACT OF CRYPTOCURRENCY
• Power to the Dark Web: Dark web is the place where you can find assassins, weapons and a
lot more illegal stuff. By using crypto currencies like Bitcoins people can make illegal
transactions without giving any information about themselves. Cryptocurrencies like Bitcoins
are a way to empower such transactions across the globe which will ultimately result in
increased cyber crime
• Speculations: Due to the extreme highs and lows BitCoins present a massive possibility for
speculation. Just like trading in shares, trading in Bitcoins is massive and seeing the rise in
traction around cryptocurrencies it is likely to grow further.
• Another reason accounting to this is the increasing cost of investing in the stock markets
IMPACT OF CRYPTOCURRENCY

• Politicization of Money: Earlier all the monetary transactions were enabled through central
banks (directly or indirectly). Now, with the evolution of Bitcoins, the scenario has changed.
The power that was vested in the governments and central banks is shifting to the masses. This
revolutionary change in transaction handling has the power to change the economic structure.
To bring security and enable scrutiny, central banks and financial institutions maintain a record
of all the transactions undertaken by the people. Now with digital currencies, this economic
power can be challenged by people. This has led to the creation of a new autonomous body
which can facilitate transactions. Ultimately if adopted on a large scale, Bitcoins can lead to the
politicization of money.
IMPACT OF CRYPTOCURRENCY

• Apprehension among the Central Banks: There have been implications that Bitcoins can be used to
secretly launder money outside the country. Central banks across the world have been wary of Bitcoins as an
uncontrollable and unpredictable form of currency. Cryptocurrencies are leading to loopholes in the current
bank’s data about the money transactions leading to inability to track economic activities. Crypto and
Cyberspace has emerged as a power in itself thus bringing a check on the activities of the so powerful
governments.

• The Emergence of New Markets: Cryptocurrencies have led to the emergence of new markets
Cyberspace will rise up as the managing body that will handle and maintain such disruptive markets. The near
zero transaction cost (along with other characteristics) has made these currencies even superior to the
traditional money we are accustomed to using. What can be surely stated is that it is just the beginning and
the number of possibilities is endless.
BENEFITS OF CRYPTOCURRENCY

• cryptocurrencies can offer to digitization:

 Real Estate

• Immediate Settlement:

 Transaction Done at Fraction of a Unit

 No Theft in Transaction

 They are Global

FUTURES OF CRYPTOCURRENCY

• Cryptocurrency is the future of financial around the globe. Reports shows that they have given
remarkable returns on Investments.
• Talking about future in India, In my personal opinion GOI can legalise and can bring them to
main stream. It will be regulated and can be traded as other stock and assets. Like other
countries it will be eligible for capital gain taxes. Lets see what discussion is taken by GOI.
• If you want to invest in cryptos its the right time.You can use cryptoniumX.They are releasing
there alpha platform soon in August. This platform has all that is needed to safely trade or
invest in cryptos and educates about cryptos at the same time.
THANK YOU!