Bitcoin & Cryptocurrency

A Seminar Report
By

Charmy Patel
(PRN:8021000223)

MSc Information Technology

Semester-II

under the guidance of

Ms. Ankita Soni

Department of Computer Applications,

Faculty of Science,

The Maharaja Sayajirao University of Baroda,

Vadodara, Gujarat-390002

CERTIFICATE

This is to certify that the work contained in this seminar report entitled “BITCOIN &
CRYPTOCURRENCY” submitted by CHARMY PATEL (PRN No: 8021000223) to the
Contents

1 Introduction 2

1. BlockChain 3
1 3
1.2 Merkle Patricia tree 4
1.3 The Process of Mining 4
1.4 Hash Algorithms
5
1.4. Bitcoin uses Hashcash (the algorithm used in SHA 5
1 256) 5
1.4. Ethereum uses EtHash
2
1.4. Litecoin uses Scrypt
3
2 Literature Survey 6
3 Algorithms 7

3.1 Hash Algorithms 7

3.1. SHA256 7
1 8
3.1. EtHash 9
2
3.1. Scrypt
3
4 Advantages/Disadvantages 11

4.1 Bitcoin 11
 4.1. Advantages 11
1 12
4.1. Disadvantages
2 14
4.2 Ethereum
14
4.1. Advantages 16
1
16
4.1. Disadvantages
2 16
4.3 Litecoin 17
4.1. Advantages
1
4.1. Disadvantages
2
5 Application 18
6 Conclusion & Future Scope 20

6.1 Conclusion 20
6.2 Future Scope 20
7 Reference 20

List of Figures

1.1 Blockchain Diagram 3

3.1 Flowchart for the working of SHA256 8
3.2 Flowchart for the working of Ethash 9
3.3 Flowchart for the working of Scrypt 10
5.1 Applications of cryptocurrencies 19
Introduction
History of Bitcoins

The primary Bitcoin protocol and proof of conception were announced in a

very Whitepaper in 2009 through a shadowy person or cluster below the
name Satoshi Nakamoto. In the end, Nakamoto, United Nations agency that
remained mysterious, left the project due in 2010. different developers took
over and also the Bitcoin network has fully grown exponentially.

Even as Satoshi Nakamoto's actual identity stays shrouded in mystery, it is

on record that he communicated appreciably in Bitcoin's period. allow us to
speculate on queries like where he began operative on Bitcoin, to what
volume he turned into galvanized victimization similar concepts, and what
turned into the motivation for bitcoin.

Creation of the first bitcoin domain

It's miles believed that Satoshi commenced committal to writing Bitcoin

around might 2007. He's declared to own registered the domain bitcoin.
Org in August 2008. Spherical at that point, he began causation emails to
three people he thought could be interested in the construct of bitcoins.

In October 2008, he in public announce a report that dwelt on the Bitcoin

protocol and launched the Bitcoin code as nicely. Then he stayed connected
for about 2 years, throughout that he interacted actively on boards,
communicated with many developers, and later he conjointly submitted
patches to the preliminary code. He maintained the ASCII text file beside
totally different developers, confronting issues as they materialized. bypath
in December 2010, as others had slowly confiscated, he quietly left the
scene.

Entities

The entities involved in the implementation and maintenance of Bitcoins

area unit area unit

• The Blockchain platform.

• Cryptographic algorithms.
• Bitcoin miners are often computers or specialized
machines that mint the foreign cash and modify
transactions.
• Those UN agencies participate in the transactions and for that
reason assist to maneuver the payment gizmo.

The philosophy of Bitcoin, and in fashionable, of all cryptocurrencies is

that they are distributed systems during which there isn't any very important
entity that manages the activities besides transactions, among others. it is a
peer-to-peer (p2p) system that operates to the extent of people.

Bitcoin transactions

We will now see how a brand new block of a bitcoin transaction is created.
 Bitcoin/ Cryptocurrency is a virtual currency transaction built on blockchain
technology. It has gained attention for

1. Its enhanced encryption & inability to counterfeit:

Making the technology feasible for large secured transactions.

2. Decentralized:

Free to government interface: the need for regulatory body grant

more freedom of transaction amount.
Most supremely its volatility has attracted the attention of most corporate and
other retail investors.

How did the concept of Bitcoin/ Cryptocurrency start?

It is an acknowledged truth that Satoshi Nakamoto changed into the founder of

bitcoin software when it changed into released in early 2009. Even though the
authentic identification of Nakamoto is still unknown and it is speculated
whether or not it's miles an actual man or woman or a set of individuals that
advanced the open-source code for bitcoin. It's miles envisioned that Nakamoto
mined about 1 million bitcoins. Therefore its price will recognize extra
individuals participating in bitcoin transactions because of the economics of
delivery and call. Gavin Anderson later became the developer of the Bitcoin
basis and decentralized the management. This created possibility for other
individuals to participate in bitcoin mining. The procedure of bitcoin mining
produces a new bitcoin. The position of bitcoin miners is by and large to
evaluate the authenticity of the cryptocurrency transaction via sizeable
computational processing.

The Architecture of Cryptocurrency Ledger

To apprehend the idea of cryptocurrency, it is crucial to realize the significance

of the ledger. A ledger is a laptop record that statistics economic transactions
such as financial balances. When you consider that those ledger transactions are
decentralized they're more likely to be perceived as precarious. Subsequently,
to shield such transactions “digital signatures” play a tremendous position.

Every transaction has a character identity, followed with the aid of public and
private key “virtual signatures” specific for that precise transaction. Therefore
to affirm a transaction all three criteria: Transaction identity, non-public key,
and Public key has to be in shape. The private secret is a 256-bit binary code
and it's miles inevitable to get the aggregate correct from simply “guessing”.

Any other vital aspect is cryptography: which interprets the study of encryption.
The ledger transaction has a cryptographic hash function and consequently
encrypts and protects the decentralized transaction ledger. SHA 256
cryptographic hash feature is used for cryptocurrency and is a single-way
cryptographic hash feature, which means it cannot be decoded backward.
Bitcoin apps allow users to buy, promote and change BTC from their cellular
devices. Of course, expenses, download options, and security vary among
programs. Our listing of the pinnacle Bitcoin buying and selling apps includes
distinct reviews of capabilities, costs, and customer support. Find out how to
start shopping for and promoting Bitcoin with the quality answers available on
the market.

What is a bitcoin app?

A Bitcoin app is without a doubt a mobile utility that helps the shopping and
selling of Bitcoin. With a few solutions, you can trade fiat currency for BTC
whilst with others, you may purchase and sell Bitcoin the usage of different
cryptos.

The fine solutions let you screen fees in actual time and make predictions on the
sector’s biggest virtual forex by way of market cap. Most Bitcoin apps also are
to be had 24/7. Pinnacle programs commonly show a whole listing of buy and
promote orders, let you control your Bitcoin investment portfolio, and set up
cell notifications and signals.

As well as Bitcoin trading apps, there are more than a few different loose BTC
revolution packages that serve a couple of functions:

 Game apps – Earn Bitcoin by taking part in games

 Shopping apps – Purchase new stock things with BTC
 Wallets apps – Store your BTC safely in an exceedingly digital billfold
 Gambling apps – Gamble in online casinos victim your
 News apps – This mixture of BTC market news from varied sources
 Video apps – Get paid in Bitcoin to look at videos, the same as survey
apps
 Mining & generating apps – These apps generate Bitcoin onto the
legitimate blockchain ledger
 Chatting apps– Connect with fellow Bitcoin traders on news
announcements, trends, and methods

These sorts of Bitcoin apps are normally to be had to download on iPhone (iOS)
from the Apple save and Android (APK) on Google Play.

How a bitcoin app works

A few apps let you purchase Bitcoin directly from a platform, while other
exchanges require you to connect and deposit with an e-wallet.

Centralized exchanges are the maximum common type with huge names like
Coin base, Bianca, and Gemini. Those apps paintings as non-public groups that
offer a platform to trade Bitcoin. Normally, those are extra at ease as they have
a registration, identity, and KYC verification system. In addition, they run on
their non-public servers and shop finances within the agency’s custodial
pockets.

The disadvantage is that if servers are compromised, the whole system could be
shut down and user facts plus price range may be lost. With that said, pinnacle-
 Conclusion

let us look at the head-to-head differences between bitcoin and cryptocurrency...

The basis for

comparison between
Bitcoin vs. Bitcoin Cryptocurrency
Cryptocurrency

To simplify and boom the To provide low-cost,

Main Aim velocity of transactions secure, and at ease
without numerous transactions.
government restrictions.

Bitcoin is restricted to Several cryptocurrencies

Trade trading using its usage of might be used for trading
it as forex. as nicely.

Bitcoin is the most The range of

Popularity popular bitcoin. cryptocurrencies has
improved, but their
percentage remains much
less than bitcoin.

Bitcoin makes a specialty Cryptocurrency

of lowering the price of ambitions to trade items
Strategy influencers and lowering and offerings in secure
the time of transactions, and cozy surroundings
but it is much less flexible. with little or no or no
government and
middleman interference.

Bitcoin loves to be Many cryptocurrencies

nameless. for this reason, that got here currently
Status even though we will view are following
their transactions in the transparency in their
ledger, they are dealings. as a result, they
meaningless numbers that can paint in many other
are not in any particular industries.
sequence.
For the reason that Bitcoin is a brand new rising era that is underway,
unforeseen tendencies could make its life and continuation tough. Regarding its
security and future, there are various questions that no person can answer. How
far are we able to believe Bitcoins? Are they a bubble this is going to burst? Are
they a passing phenomenon and a fad that might fizzle out over a time frame?
Or are they going to stay placed and possibly dominate different currencies in
the future?

As of now, bitcoins are typically unregulated, but this will alternate.

Governments are concerned approximately losing taxes and managing the
currency. They'll carry laws to adjust bitcoin which may additionally extremely
impact the benefits that bitcoins have over different currencies. The volatility of
bitcoin expenses is one massive difficulty. The wild fluctuations in its index are
signals of such volatility. In the latest years, bitcoin fees have risen
exponentially and after a few corrections have dipped but they are on the high
side. Many expect that the rate will in addition boom.

Bitcoin has a head start over different cryptocurrency technology because of the
first cryptocurrency. due to the fact then, many cryptocurrencies have come, and
some focus on some sectors.

The most essential aspect is competition. due to heavy competition,

cryptocurrencies are continually improving themselves and the technology that
they may be the use of. It paves the way for innovation and progressed overall
performance and security measures.

Bitcoin may additionally have had an extra chunk of share within the region
first of all. however, with the introduction of new cryptocurrencies, and
sophisticated and transparent technology, the space is diminishing as every day
passes. So quickly, this marketplace can even end up extra dispersed with the
cryptocurrency that offers the most fee being on the pinnacle.

Favoring growth factors

The matters that choose the boom of bitcoin adoption are as follows -

 There are confined wide variety of bitcoins.

 The awareness approximately bitcoins is growing and so are their
attractiveness and adoption.
 The variety of bitcoin transactions is increasing each day.
 A large number of rich human beings do now not want the government's
policies on their wealth and might rather decide on storing it in bitcoins.

Subsequent halving is scheduled to arise in 2022. This can similarly lower the
rate of delivery of bitcoins while bitcoin utilization could have improved
manifold by using 2022. As of now, the number of bitcoin transactions is the
manner in the back of the range of credit score card transactions and the
previous has to noticeably grow to realize the total capacity of bitcoins.

Some of the issues which ought to be tackled to assist bitcoin's boom are as
follows-
 References

1. https://www.academia.edu/Documents/in/Bitcoin

2. https://www.tutorialspoint.com/bitcoin/index.htm+

3. https://en.wikipedia.org/wiki/Bitcoin

4. https://www.bitcoin.com/get-started/what-is-bitcoin/

5. https://www.bitcoin.com/tools/

6. https://medium.datadriveninvestor.com/the-architecture-behind-bitcoin-
and-other-cryptocurrency-9538dd1e5748

7. https://www.wallstreetmojo.com/bitcoin-vs-cryptocurrency/

8. http://fernfortuniversity.com/hbr/case-solutions/15175-bitcoin.php

9. https://bitcoin.org/bitcoin.pdf

10.https://www.totalassignmenthelp.com/free-sample/cryptocurrency-
assignment-ethreum-bitcoin

11.http://bitcoinbasics101.com/

12.https://www.researchgate.net/publication/
318131748_An_Overview_of_Blockchain_Technology_Architecture_Co
nsensus_and_Future_Trends

13.https://bitcoin.org/en/bitcoin-paper

14.https://www.researchgate.net/figure/The-basic-cryptocurrency-
architecture-Source-blockgeekscom_fig1_330513654