PRESENTATION ON CRYPTOCURRENCY

Filiere : L2-B
Course : English
Course Instructor : M. KPOBLAHOUN

Students :
ALI Bouaké Boris
ESSIBA Kodjo Victoire
NYANONENE Akou Katé
POTCHO Maxime

PLAN
I- INTRODUCTION
II- FUNCTIONING PRINCIPLES
III- ADVANTAGES AND DISADVANTAGES
IV- CONCLUSION

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 I- INTRODUCTION
Definition of cryptocurrency
A cryptocurrency (or crypto currency) is a digital asset designed to work as a
medium of exchange strong cryptography to secure financial transactions, control
the creation of additional units, and verify the transfer of assets. Cryptocurrencies
use decentralized control as opposed to centralized digital currency an central
banquing 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.]Since the release of bitcoin, over
6,000 altcoins (alternative variants of bitcoin, or other cryptocurrencies) have been
created.

II- FUNCTIONING PRINCIPLES

Unlike traditional currencies such as the franc CFA, the euro, the dollar, ...
cryptocurrency’s transactions are done peer to peer via the Internet, that is to say
without the need for a central banking systems to play the role of intermediary
during financial transactions. Several varieties of cryptocurrencies have been
developed since the first cryptocurrency: bitcoin, introduced in 2009 and
developed by an anonym person named Satoshi Nakamoto. Cryptocurrencies use
a validation system such as proof of work to protect them from electronic
counterfeits. With few exceptions, the majority of cryptocurrencies are designed
so that the creation of new currency units(*mining) is gradual and verified, while
fixing, for most of them, a maximum quantity for the money supply that will
eventually be in circulation. This cap aims to mimic the scarcity (and value) of
precious metals and to avoid *hyperinflation. Compared to coins with a legal
tender issued by financial institutions or kept in cash, cryptocurrencies are
managed by a register that can be consulted by everyone (the *blockchain) which
lists all of the transactions from the outset. Transactions are in principle supposed
to be tamper-proof and inviolable, due to the intensive use of cryptography. Note
that there are exceptions to the anonymity rule, such as Darkcoin, Zerocoin,
Bytecoin and Black Coin.
* blockchain : public database which contains all exchanges and cryptocurrency
transactions around the world.

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* mining : fabrication of new cryptocurrency units.

*Hyperinflation : an atypical form of inflation manifested by an extremely rapid rise

in prices

III- ADVANTAGES AND DISADVANTAGES

1- ADVANTAGES
 Designed for the Internet, they offer alternatives to payment systems based on
legal tender currencies. They increase the accessibility of online commerce in
developing countries.
 All transactions are public, the owners and recipients of these transactions being
identified by addresses.
 Cryptocurrency cannot be counterfeited or usurped. The encryption protocol is
also designed to be very resistant against most known computer threats,
including distributed denial of service attacks.
 Transfer fees sometimes zero and lower than those of payment institutions or
those of funds transfer companies (such as PayPal, Western Union)
 Fast transfers from a few seconds to a few minutes compared to bank transfers
(a few hours to a few days).
 Transfers possible worldwide regardless of country.
 Absence of intermediary (payment institution, intermediary in payment
services, bank, depositary): the amount credited is taken directly to the reception
address.
 Any individual or company can transfer cryptocurrency.
 Remote cryptocurrency storage on a server or download on a medium (USB
key, for example).
 For some cryptocurrencies, the total quantity that can be created is capped,
making this type of currency deflationary in essence (the quantity of money can
only decrease over time).

2- DISADVANTAGES
 Low impact of cryptocurrencies on the general public (~ 150 million USD / day
in March 2016 for Bitcoin).
 Poorly developed but growing payment network.
 Different cryptocurrencies, incompatible with each other, with the development
of several types of cryptocurrencies in parallel.
 High volatility.
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 Risk of *deflation (or *inflation) due to insufficient (or too large) monetary
creation (quantity of bitcoins limited in time, for example).
 Security required (like any deposit or payment account): password, double
authentication.
 Illegality in some countries.
 The lost cryptocurrency (following a download to a USB key or hard drive) is
permanently lost.
 Increasing energy consumption due to mining activities.

*Deflation is a gain in the purchasing power of money, which results in a lasting

fall in the general price level.

*Inflation is the loss of the purchasing power of money which results in a general
and lasting increase in prices.

IV- CONCLUSION