Aditya Sharma English Pration

CRYPTOCURRENCY:
THE FUTURE
NAME- ADITYA SHARMA
STUDENT ID- 20200180142
CLASS- XII ‘A
BOARD ROLL NO.-26657267
SCHOOL ID- 87219
SCHOOL NAME- RSV NO.4 ROOPNAGAR
WHAT IS CRYPTO OR what?
CRYTOCURRENCY?
• Crypto is a virtual currency. A cryptocurrency, crypto-
currency, or crypto is a digital currency designed to work as a
medium of exchange through a computer network that is not
reliant on any central authority, such as a government or
bank, to uphold or maintain it. Cryptocurrency does not exist
in physical form (like paper money) and is typically not issued
by a central authority. Cryptocurrencies typically use
decentralized control as opposed to a central bank digital
currency (CBDC). When a cryptocurrency is minted or created
prior to issuance or issued by a single issuer, it is generally
considered centralized. When implemented with
decentralized control, each cryptocurrency works through
distributed ledger technology, typically a blockchain, that
serves as a public financial transaction database.
HISTORY OF CRYPTOS
• In 1983, the American cryptographer David Chaum conceived an
anonymous cryptographic electronic money called ecash.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 any third party.
• In 1996, the National Security Agency published a paper entitled How
to Make a Mint: the Cryptography of Anonymous Electronic Cash,
describing a Cryptocurrency system, first publishing it in an MIT
mailing list and later in 1997, in The American Law Review.
• In 1998, Wei Dai published a description of "b-money", characterized
as an anonymous, distributed electronic cash system.Shortly
thereafter, Nick Szabo described bit gold.Like bitcoin and other
cryptocurrencies that would follow it.
ARCHITECTURE OF
CRYPTO
• Decentralized cryptocurrency is produced by the entire cryptocurrency
system collectively, at a rate which is defined when the system is created and
which is publicly known. In centralized banking and economic systems such
as the US Federal Reserve System, corporate boards or governments control
the supply of currency. In the case of decentralized cryptocurrency,
companies or governments cannot produce new units, and have not so far
provided backing for other firms, banks or corporate entities which hold asset
value measured in it. The underlying technical system upon which
decentralized cryptocurrencies are based was created by the group or
individual known as Satoshi Nakamoto.
• As of May 2018, over 1,800 cryptocurrency specifications existed. Within a

proof-of-work cryptocurrency system such as Bitcoin, the safety, integrity and
balance of ledgers is maintained by a community of mutually distrustful
parties referred to as miners: who use their computers to help validate and
timestamp transactions, adding them to the ledger in accordance with a
particular timestamping scheme.
BLOCKCHAIN
• The validity of each cryptocurrency's coins is provided by a blockchain. A

blockchain is a continuously growing list of records, called blocks, which are
linked and secured using cryptography. Each block typically contains a hash
pointer as a link to a previous block, a timestamp and transaction data. By
design, blockchains are inherently resistant to modification of the data. It is
"an open, distributed ledger that can record transactions between two parties
efficiently and in a verifiable and permanent way". For use as a distributed
ledger, a blockchain is typically managed by a peer-to-peer network
collectively adhering to a protocol for validating new blocks. Once recorded,
the data in any given block cannot be altered retroactively without the
alteration of all subsequent blocks, which requires collusion of the network
majority.
• Blockchains are secure by design and are an example of a distributed

computing system with high Byzantine fault tolerance. Decentralized
consensus has therefore been achieved with a blockchain.
MINING
• In cryptocurrency networks, mining is a validation of transactions. For this effort,
successful miners obtain new cryptocurrency as a reward. The reward decreases
transaction fees by creating a complementary incentive to contribute to the processing
power of the network. The rate of generating hashes, which validate any transaction, has
been increased by the use of specialized machines such as FPGAs and ASICs running
complex hashing algorithms like SHA-256 and scrypt. This arms race for cheaper-yet-
efficient machines has existed since the first cryptocurrency, bitcoin, was introduced in
2009.
• With more people venturing into the world of virtual currency, generating hashes for
validation has become more complex over time, forcing miners to invest increasingly
large sums of money to improve computing performance. Consequently, the reward for
finding a hash has diminished and often does not justify the investment in equipment and
cooling facilities (to mitigate the heat the equipment produces), and the electricity
required to run them. Popular regions for mining include those with inexpensive
electricity, a cold climate, and jurisdictions with clear and conducive regulations. As of
July 2019, bitcoin's electricity consumption is estimated to about 7 gigawatts, 0.2% of the
global total, or equivalent to that of Switzerland.
• Some miners pool resources, sharing their processing power over a network to split the
reward equally, according to the amount of work they contributed to the probability of
finding a block.
WALLETS
• A cryptocurrency wallet stores the public and private "keys" (address) or seed
which can be used to receive or spend the cryptocurrency.With the private
key, it is possible to write in the public ledger, effectively spending the
associated cryptocurrency. With the public key, it is possible for others to send
currency to the wallet.
• There exist multiple methods of storing keys or seed in a wallet from using
paper wallets which are traditional public, private or seed keys written on
paper to using hardware wallets which are dedicated hardware to securely
store your wallet information, using a digital wallet which is a computer with a
software hosting your wallet information, hosting your wallet using an
exchange where cryptocurrency is traded. or by storing your wallet
information on a digital medium such as plaintext.
INCREASING REGULATION
• The rise in the popularity of cryptocurrencies and their adoption by financial
institutions has led some governments to assess whether regulation is needed
to protect users. The Financial Action Task Force (FATF) has defined
cryptocurrency-related services as "virtual asset service providers" (VASPs)
and recommended that they be regulated with the same money laundering
(AML) and know your customer (KYC) requirements as financial institutions.
• In May 2020, the Joint Working Group on interVASP Messaging Standards

published "IVMS 101", a universal common language for communication of
required originator and beneficiary information between VASPs. The FATF and
financial regulators were informed as the data model was developed.
• In June 2020, FATF updated its guidance to include the "Travel Rule" for
cryptocurrencies, a measure which mandates that VASPs obtain, hold, and
exchange information about the originators and beneficiaries of virtual asset
transfers. Subsequent standardized protocol specifications recommended
using JSON for relaying data between VASPs and identity services. As of
December 2020, the IVMS 101 data model has yet to be finalized and ratified
by the three global standard setting bodies that created it.
INDIA’S POLICY
• The government will move a bill to frame rules for

cryptocurrencies aimed at prohibiting private coin
while providing a framework for the creation of an
official digital currency to be issued by the Reserve
Bank of India (RBI).
• The bill is listed among 26 items of legislation for
consideration in the winter session of parliament,
according to a bulletin issued by the Lok Sabha on
Tuesday. The crypto industry is hopeful there won’t
be a complete ban on cryptocurrency.

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CRYPTOCURRENCY:

• As of May 2018, over 1,800 cryptocurrency specifications existed. Within a

• The validity of each cryptocurrency's coins is provided by a blockchain. A

• Blockchains are secure by design and are an example of a distributed

• In May 2020, the Joint Working Group on interVASP Messaging Standards

• The government will move a bill to frame rules for

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