9 Digital Currencies and Blockchain-Hry

Digital Thinking and Innovation
Digital Currencies and Blockchain
Digital Thinking and Innovation: CT109-3-1-DGTIN Digital Currencies and Blockchain-hry SLIDE 1
Learning Outcomes for the Lecture
• At the end of this lecture you will be able to:

– Explain digital currency
– Define cryptocurrency
– Provide the advantages and cons of cryptocurrency
– Explain the blockchain, bitcoin, and mining
Digital Currency
• Digital currencies or e-money, are now more popular than ever

• They fill all the uses of traditional forms of money
• Only exist on the internet, and is completely intangible
• Every aspect of their issuance, transfer, and record-keeping is digital
• Digital currency (digital money, electronic money or electronic currency) is
a balance or a record stored in a distributed database on the Internet, in
an electronic computer database, within digital files or within a stored-value
card.
• Digital money is not tangible like a dollar bill or a coin. It is accounted for and
transferred using computers. The most successful and widely-used form
of digital money is the cryptocurrency Bitcoin. Digital money is exchanged
using technologies such as smartphones, credit cards, and
online cryptocurrency exchanges
Advantages of Digital Currency
• Provide users with a more streamlined alternative

• Peer-to-peer transactions
• Digital currency payments are both instantaneous and low-cost
• Introduce a higher level of record-keeping and transparency to the
sector
• A cryptocurrency (or “crypto”) is a digital currency that can be used to
buy goods and services, but uses an online ledger with strong
cryptography to secure online transactions.
• The first cryptocurrencies were made to be independent of government-
issued currencies. ?
• Cryptocurrencies use 'decentralized control', which means that they
aren't controlled by one person or government.
• This decentralized structure allows them to exist outside the control of
governments and central authorities
Cryptocurrency
• Digital currencies encountered a problem known as “double-spend”. Double-

spending is a potential flaw in cryptocurrency systems referring to the risk
that a digital currency can be spent twice.
• Cryptocurrency makes it nearly impossible to counterfeit or
double-spend
• This issue saw resolution with the introduction of the world’s
first Cryptocurrency – Bitcoin.
• Many cryptocurrencies are decentralized networks based on blockchain technology
Advantages of Cryptocurrency
• Easy to Use : just need a device that able access the internet with the help of
the device, you can create your wallet and use where ever and whenever you
want.
• The procedure for opening a simple bank account they are asking you several
documents if there are any mistakes in documents then they refuse to open an
account, also accessing your funds in different geographical location is a little
bit hard.
• Decentralization : the network is distributed to all participants, each

computer mining nodes is a member of this system.
• the central authority has no power to dictate rules for owners of coins. And
even if some part of the network goes offline, the payment system will
continue to operate stably
• Transparency: In cryptocurrency, every transaction recorded on the

blockchain. The blockchain keeps the information about everything.
• If anyone has publicly used the crypto address, then anyone can
see how much crypto is owned. If the address is not publicly
confirmed, then no one will ever know that it belongs to someone.
• No Inflation: In cryptocurrencies coins are limited to use and mine

therefore neither political forces nor corporations able to change
this order, there is no possibility for the development of the
inflation in the system.
• Anonymity: In cryptocurrencies, you’re able to create an infinite
number of wallets without reference to the name, address or any
other information.
Disadvantages of Cryptocurrency.
• Lack of Knowledge: Most people are not aware of how to use cryptocurrency
and hence open themselves to the hacker. The digital currency technology is
somewhat complex and therefore one needs to be mindful of it before
investing.
• Strong Volatility: the main reasons mass adoption is taking longer than it
should. Many corporations don’t want to deal with a form of money that is
going to go through huge swings in volatility.
• Large Risks of Investing in Cryptocurrency: Crypto investments are

involved high risk because of its volatile nature and terrorist and other
illegal activity financings, lack of a central issuer, which means that there is
no legal formal entity to guaranty in case of any bankruptcy.
• Not Accepted Widely: cryptocurrencies are not acceptable in countries and
online websites, Very few countries have legalized the use of cryptocurrencies.
It makes it impractical for everyday use. Due to a lack of acceptance.
Not Able to Reverse the Payment:If you mistakenly pay someone by using
cryptocurrency, then there is no way to get a refund of the amount paid. All you
can do is to ask the person for a refund and if your request is turned down, then
just forget about the money.
Storing of Cryptocurrencies:If you have stored digital currency on your
phone or computer, you better remember your password and not lose those
devices. Losing your coins means you won’t be able to retrieve it.
Digital Currency Vs. Cryptocurrency
Digital Currency Cryptocurrency

Centralized location for transaction Decentralized location for transaction
Confidential transaction Transparent transaction
Central Authority to deal with issues Govern by the respective communities
• Cryptocurrency includes:
– Bitcoin
– Litecoin – Etherium
– Ripple
– Dogecoin Read
– Coinye
Blockchain
• A Blockchain is a type of diary or spreadsheet containing

information about transactions.
• Each transaction generates a hash. Each block refers to the
previous block and together make the Blockchain.
• Blockchain is the master ledger that records and stores all prior
transactions and activity, validating ownership of all units of the
currency at any given point in time.
Blockchain
• A blockchain technology is an online ledger that user data structure, to

simplify the way we transact.
• It allows users to manipulate the ledger in a secure way without the help of a
third party.
• It allows a free cryptocurrency through a decentralized environment.
Blockchain
• A blockchain is a peer-to-peer system with no central authority managing data flow.

• Blockchain be used:
Secure sharing of medical data.
Music royalties tracking.
Cross-border payments.
Real-time IoT operating systems.
Personal identity security.
Anti-money laundering tracking system.
Supply chain and logistics monitoring.
Bitcoin
• Blockchain is a technology and many cryptocurrencies

like bitcoin using blockchain for secure and anonymous transactions.
• Blockchain is a transparent mechanism, whereas bitcoins operate on
anonymity.
• Bitcoin is the name of the best-known cryptocurrency, the one for
which blockchain technology was invented.
• Bitcoin is one of the first digital currencies to use peer-to-peer technology to
facilitate instant payments.
Bitcoin
• Bitcoin marked a change in financial theory within the market

– A medium of exchange
– A unit of account One common use for Bitcoin is
– A store of value
making purchases online. There
• Additionally, Bitcoin was
– Scarce are hundreds of online
– Unduplicable shops and retailers that
– Portable
accept Bitcoin. Using a search
engine like Spendabit
you can search through millions of
products, all available
for purchase with bitcoins.
Bitcoin
• Solved the double-spend issue through the integration of timestamped

cryptographic blocks
• Utilizes part of the time stamp in the hashing algorithm of the following block
• Bitcoin became the first immutable and unalterable digital currency in
existence
• A hacker would need to redo the entire blockchain to alter it
Miners
• Miners serve as record-keepers for cryptocurrency communities.

• Miners provide security and confirm Bitcoin transactions. The role
of miners is to secure the network and to process every Bitcoin transaction.
• Miners achieve this by solving a computational problem which allows them to
chain together blocks of transactions (hence Bitcoin's famous “blockchain”).
• One of the oldest bitcoin mining software, CGMiner is open-source build,
ability to run on any computer, and compatibility with multiple mining
hardware.
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Digital Thinking and Innovation

Digital Currencies and Blockchain

• At the end of this lecture you will be able to:

• Digital currencies or e-money, are now more popular than ever

• Provide users with a more streamlined alternative

• Digital currencies encountered a problem known as “double-spend”. Double-

• Decentralization : the network is distributed to all participants, each

• Transparency: In cryptocurrency, every transaction recorded on the

• No Inflation: In cryptocurrencies coins are limited to use and mine

• Large Risks of Investing in Cryptocurrency: Crypto investments are

Digital Currency Cryptocurrency

• A Blockchain is a type of diary or spreadsheet containing

• A blockchain technology is an online ledger that user data structure, to

• A blockchain is a peer-to-peer system with no central authority managing data flow.

• Blockchain is a technology and many cryptocurrencies

• Bitcoin marked a change in financial theory within the market

• Solved the double-spend issue through the integration of timestamped

• Miners serve as record-keepers for cryptocurrency communities.

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