Understanding Cryptocurrency

Cryptocurrency

Kapil Gupta4/12/2013

Bitcoin - BTC

• Peer–to-Peer technology and no central authority or bankso Transaction fees are lower

• Managing transactions and issuing of bitcoins is carried

out collectively by the network

• Open-Source, design is public, nobody owns of controls

Bitcoin

• 21 million Bitcoins to be issued

• Currently the dominant cryptocurrency by far

• Market cap - $12 billion

Bitcoin anonymity

• Bitcoin is pseudonymous, not anonymous, and bitcoins

cant just disappear

• It works because every transaction is public and visible to

each and every other person using bitcoin network

• A person is only as anonymous as their link to their wallet

Major Crypto-currencies – 5/12/2013

1. Bitcoin2. Litecoin3. Peercoin4. Namecoin5. Megacoin6. Quarkcoin7. Protoshares8. Worldcoin9. Primecoin10.Feathercoin

11.Nxt12.Novacoin13.Freicoin14.Anoncoin15.Terracoin16.CryptogenicBullion17.Infinitecoin18.Zetacoin19.BBQCoin20.Stablecoin

Differentation

Litecoin

• Based on Bitcoin protocol

• Can be efficiently mined on consumer grade hardware

• Faster transaction confirmations (2.5min on average)

• Proof-of-stake in addition to proof-of-work

• Scheduled to produce 84 million currency units

• Current market cap - $867 million

Peercoin

• Increased security via Proof-of-work + proof-of-stake

hybrid algorithm

• Energy efficiency - generating proof-of-stake blocks

• Current market cap - $116 million

Namecoin - NMC

• Key/Value registration and transfer system

• Based on Bitcoin technology

• Allows you to:– Securely register and

transfer arbitrary names (keys)

– Attach value (data) to the names

– Trade and transact namecoins

• Use cases:– Timestamping– Bonds, shares– Voting / Web of Trust

• Market cap - $62 million

WorldCoin

• Faster transaction time – 30 sec (over 20 x faster that

Bitcoin)

• 1% reward reduction weekly, encouraging quicker

adoption

• 1 hour, maximum 10% difficulty retargeting to

prevent pool abuse

• Market cap - $24.5 million

Other major cryptocurrencies

• Quark– Uses nine rounds of secure

hashing from six different algorithms

– Extra secure– Market cap - $30 million

• Primecoin– Cryptocurrency with Prime

Number Proof-Of-Work– First currency to have non-

hashcash proof-of-work– Market cap - $16.9 million

• Feathercoin– Market Cap - $15.9

million

• Megacoin– Restricted to 42 million– Market cap - $26

million

Tumbling

• A couple of reddit users realised that the sheer size of the heist makes “tumbling” the coins - the normal method of laundering bitcoins - impossible, as long as they kept on their toes.

• Someone with bitcoin can send some to a tumbler like bitcoinfog, where it will be split into smaller subdivisions and mixed with other bitcoins from other places, recombining and splitting again several times over until the whole amount eventually comes out the other end, theoretically in such a way that it’s impossible to track.

• Silk Road’s in-built tumbler successfully foiled the FBI, allegedly.