Presented by:

RAJESH AND RIZA

What’s in it for you ?

Issues with current banking system

How bitcoin solved these issues

What is block chain technology

Features of block chain

Public distributed ledger
Encryption
Proof of work
Mining
 Issue with current banking

High transaction fee:

Transaction fee

A transaction fee is a charge that a business has to pay every time it processes a customer’s
electronic payment. The cost of the transaction fee will vary depending on the service
used.
Transaction Fees is a type of a fee when the client needs to pay every moment it
processes an electronic payment.

Transaction Fees can vary among the services. ... The interchange fee that goes to the
issuing bank, The network fee that goes directly to Visa or Mastercard, The
acquirer fee that goes to acquiring the bank.
 Issue with current banking

Double spending

The issue of double-spending is a problem that cash does not have; if you pay for a
sandwich with a $10 bill, turning that bill over to the maker of the sandwich, you
cannot turn around and spend that same $10 elsewhere.

A transaction using a digital currency like bitcoin, however, occurs entirely digitally.
 Issue with current banking

HACKING

Hackers attacks financial institutions and gain unauthorized access data

They can do transactions on your behalf which your are not aware of or they can do
the transfer of money to same illegitimate account
How bitcoin solved these problems :

Decentralized system

Decentralization is the process by which the activities of an organization, particularly those

regarding planning and decision making, are distributed or delegated away from a central,
authoritative location or group.

Bitcoin follows a decentralized system where no third party is involved during the transactions
between sender and receiver.
How bitcoin solved these problems :

Transaction verification is a process of comparing and then verifying all transactions within a specific product
type, group or region over a given time period.

Double spending is avoided through the basic structure of blockchain which involves verification of
transactions
In a block chain each block is linked to its previous block. The transactions became invalid for
specific bitcoin which has already been spent

And this will happen because after the first transaction has been confirmed your balance will be
verified in the second transactions your address identity will b validated and if suppose you are
trying to spend more than what the balance you have the miners the validators of the blockchain
network will discard that particular transaction and will not added to the main block chain .
How bitcoin solved these problems :

NOTE: though the public ledger accessible to everyone, only the users address and transactions
details are visible to the users of the bitcoin network
 BLOCKCHAIN :

Blockchain is a type
of DLT in which
transactions are
recorded with an
immutable
cryptographic
signature called
a hash.

Blockchain is a system of recording information in a way that makes it

difficult or impossible to change, hack, or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated

and distributed across the entire network of computer systems on the
blockchain. Each block in the chain contains a number of transactions, and
every time a new transaction occurs on the blockchain, a record of that
transaction is added to every participant’s ledger.
.
TRANSACTIONS:

Blockchain is a system of recording information in a way that makes it difficult or

impossible to change, hack, or cheat the system.

A blockchain is essentially a digital ledger of transactions that is duplicated and

distributed across the entire network of computer systems on the blockchain.
 Components of block

Data is consists of details of the sender address , receivers address and the
transactions amount

Nonce ,so the bitcoin basically uses a proof of work algorithm in order to execute the
algorithm ,nonce is a random value used to vary the output of the hash value

Hash is like a digital fingerprint ,it is the finger print of the current block .
 FEATURES OF BLOCKCHAIN

Public distributed ledger :

A distributed ledger is a database that is
consensually shared and synchronized across
multiple sites, institutions, or geographies,
accessible by multiple people.

It allows transactions to have public "witnesses".

public ledger is used as a record-keeping system

that maintains participants' identities in secure and
(pseudo-)anonymous form, their respective
cryptocurrency balances,

and a record book of all the genuine transactions

executed between network participants.
EXAMPLE:

Now lets take an example

where these bitcoin users
are transferring money,
here we have example
like Bella is trying to
transfer money to John,
John to Elsa and elsa is
trying to transform money
to Jack so there are the
three transactions which
are to be initiated

Central ledger
v Now it ensure that users, part of this cycle have a copy of the transaction details

Each user will have a copy of each to a transaction and this fat is called distributed ledger
 ENCRYPTION:

Encryption is the process that scrambles readable text so it

can only be read by the person who has the secret code, or
decryption key. It helps provide data security for sensitive
information.

Encryption , blockchain eliminates unauthorized access by

using cryptographic algorithm to ensure the blocks are kept
secure

Each user in the blockchain has their own keys- one is

private, one is public

private key is known only to the sender and public key i to

identify the user.
 ENCRYPTION:

Transaction verification is a process of comparing and then verifying all transactions within
a specific product type, group or region over a given time period. Certification bodies will be
notified when transaction verification is necessary.
A hash function is any function that can be used to map data of arbitrary size to fixed-size values. The values
returned by a hash function are called hash values, hash codes, digests, or simply hashes. The values are
usually used to index a fixed-size table called a hash table Use of a hash function to index a hash table is
called hashing or scatter storage addressing
PROOF OF WORK:

Proof of work (Pow) is a form of cryptographic

zero-knowledge proof in which one party (the
prover) proves to others (the verifiers) that a
certain amount of a specific computational effort
has been expended. Verifiers can subsequently
confirm this expenditure with minimal effort on
their part.
PROOF OF WORK:
Proof of work was later popularized
by Bitcoin as a foundation for consensus in
permissionless blockchains and

cryptocurrencies in which miners compete

to append blocks and mint new currency,
each miner experiencing a success
probability proportional to their
computational effort expended
MINING:
Bitcoin mining is the process by which new bitcoins are
entered into circulation, but it is also a critical component
of the maintenance and development of the blockchain
ledger.

It is performed using very sophisticated computers that

solve extremely complex computational math problems.