Seminar Report On Cryptocurrency: Bachelor of Computer Application
Seminar Report On Cryptocurrency: Bachelor of Computer Application
Seminar Report On Cryptocurrency: Bachelor of Computer Application
CRYPTOCURRENCY
IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF
2019-2022
DEPARTMENT OF COMPUTER SCIENCE
PIN: 686673
ARAFA COLLEGE OF ARTS AND SCIENCE
PEZHAKKAPPILLY
CERTIFICATE
This is to certify that this seminar work entitled “CRYPTOCURRENCY” is a bonafide work
done by “AHAMED JABIR P.A”, (Reg. No: 190021094124) submitted in partial fulfillment
for the degree of BACHELOR OF COMPUTER APPLICATION of MAHATMA GANDHI
UNIVERSITY, KOTTAYAM during the academic year 2019-2022.
COLLEGE SEAL
Internal Examiner
ARAFA COLLEGE OF ARTS AND SCIENCE
PEZHAKKAPPILLIY
(AFFILIATED TO MAHATMA GANDHI UNIVERSITY)
BONAFIDE CERTIFICATE
This is to certify that the seminar work entitled "CRYPTOCURRENCY” submitted to
MAHATMA GHANDHI UNIVERSITY in partial fulfillment of the requirements for the
award of the Degree of Bachelor of Computer Application is a record of the original work
done by “AHAMED JABIR P.A” under my supervision and guidance and that this seminar
work has not formed the basis for the award of any Degree/Diploma/Fellowship or similar title to
any candidates of any University.
COLLEGE SEAL
INTERNAL EXAMINER
DECLARATION
I hereby declare that the seminar work entitled “CRYPTOCURRENCY” submitted in the
partial fulfillment of the requirement for the award of BACHELOR OF COMPUTER
APPLICATION of M.G UNIVERSITY, KOTTAYAM is a report of original work done by
me during the period of study at Arafa College Of Arts And Science, Muvattupuzha under the
supervision and guidance of Mrs. RASMI SASIDHARAN, Department Of Computer
Science.
Date:
ACKNOWLEDGEMENT
If words are considered as symbols of approval and tokens of acknowledgement then words play
the heralding role of expressing our gratitude.
First of all, I thank GOD Almighty, the guiding light of our life, for giving me the strength and
courage to complete this seminar successfully.
I extend my deep gratitude and heartfelt thanks to Mrs. RASMI SASIDHARAN Asst.
Professor, Department of Computer Science, for rendering me help and immense
encouragement.
Here, I am also wish to thank my family members, friends and all those who either directly or
indirectly help me in this endeavor.
1. Introduction ............................................................................................................ 1
1.1 Block Chain .................................................................................................. 2
1.2 Merkle Patricia Tree ..................................................................................... 3
1.3 The Process of Mining ................................................................................. 3
1.4 Hash Algorithms .......................................................................................... 4
1.4.1 Bitcoin uses Hashcash (the algorithm used in SHA 256) ...................4
1.4.1 Etherium uses ETHash ........................................................................ 4
1.4.1 LitCoin uses Scrypt ............................................................................. 4
2. Algorithms ............................................................................................................... 5
2.1 Hash Algorithms .......................................................................................... 6
2.1.1 SHA256 ............................................................................................ 6
2.1.2 EtHash .............................................................................................. 7
2.1.3 Scrypt............................................................................................... 8
3. Advantages/Disadvantages .................................................................................... 9
3.1 Bitcoin ........................................................................................................ 10
3.1.1 Advantages ........................................................................................ 10
3.1.2 Disadvantages.................................................................................... 11
3.2 Ethereum .................................................................................................... 13
3.2.1 Advantages ....................................................................................... 13
3.2.2 Disadvantages................................................................................... 15
3.3 Litecoin....................................................................................................... 15
3.3.1 Advantages ...................................................................................... 15
3.3.2 Disadvantages.................................................................................. 16
4. Applications........................................................................................................... 17
5. Conclusion and Future Scope .............................................................................. 19
5.1 Conclusion ........................................................................................................ 20
5.1 Future Scope ..................................................................................................... 20
6. References ............................................................................................................. 21
1
1. INTRODUCTION
1. INTRODUCTION
has its own public ledger. The maximum size of a block differs from cryptocurrency to
cryptocurrency. But each cryptocurrency has its own upper bound for each block. For
example, the maximum size of a bitcoin block is 1MB. Bitcoin and Litecoin consists of fi
elds in its block, namely:
1. Magic Number
2. Block Size
3. Block Header
4. Transaction Counter
5. Transactions
2. ALGORITHMS
2. ALGORITHMS
It is a mathematical algorithm that maps data of arbitrary size to a bit string of a fixed
size (a hash) and is designed to be a one-way function, that is, a function which is
infeasible to invert. The only way to recreate the input data from an ideal cryptographic
hash functions output is to attempt a brute force search of possible inputs to see if they
produce a match.
2.1.1 SHA256: SHA 256 is a set of Secure Hash Functions that has six
algorithms, which produce digests (results) that are of different bit lengths.
SHA 256, produces a digest of 256 bits. SHA 256 satisfies the requirement
of unidirectional hashes (that is, any change in the input, however
insignificant, leads to a completely different hash, and determining the input
from the hash is practically impossible). Also, the same input will always
produce the same digest. SHA 256 pads input to convert its length to a
multiple of 512 bits. Then, it divides the input into blocks of 512 bits each.
The round function of SHA-256 is as follows: The XOR of the following three quantities:
• the fifth word in the block rotated right 6 places
• that word rotated right 11 places
• that word rotated right 25 places
2.1.2 EtHash:
The large data set is updated once every 30000 blocks, so the vast majority of a
miner’s effort will be reading the data set, not making changes to it.
2.1.3 Scrypt
Scrypt was designed to be a Key-Derivation Function (KDF). All Key-Derivation
Functions are resource intensive in order to mitigate large-scale custom hardware attacks.
Scrypt takes an input and generates a large vector of pseudo-random bits. Since
these vectors are generated at runtime, the algorithms require large memory. More memory
leads to faster computation. Within the algorithm, there are two functions called Smix and
Blockmix. Blockmix performs permutation operations on the input blocks using binary
logic operands and, in each iteration, the output of the Block mix is again processed in
Smix, which performs bitwise permutations. Scrypt was modified for the purposes of
mining. Since the original Scrypt uses pseudo-random bits, the outputs of the same input
would be different. This makes it harder to verify. When Scrypt was used for KDF, there
was no need for such verification.
3. ADVANTAGES/DISADVANTAGES
3.ADVANTAGES/DISADVANTAGES
3.1 Bitcoin:
3.1.1 Advantages:
• Freedom in Payment
– With Bitcoin it is very possible to be able to send and get money anywhere
in the world at any given time.
– You don’t have to worry about crossing borders, rescheduling for bank
holidays, or any other limitations one might think will occur when
transferring money.
– You are in control of your money with Bitcoin. There is no central
authority figure in the Bitcoin network.
customers. This will definitely take some time and effort. Otherwise, what
is the benefit of such large companies accepting Bitcoin if its staff doesnt
even know what digital currencies are?
Still Developing
– Bitcoin is still at its infancy stage with incomplete features that are in
development.
– To make the digital currency more secure and accessible, new features,
tools, and services are currently being developed.
– Bitcoin has some growth to do before it comes to its full and final
potential.
– This is because Bitcoin is just starting out, and it needs to work out its
problems just like how any currency in its beginning stage would need to
further development.
3.2 Ethereum:
3.2.1 Advantages:
• The mining process:
The mining process is the first point that stands out to those who prefer
Ethereum. You can mine ethers using graphics processing units (GPUs), also
known simply as graphic cards. The process is different from Bitcoin mining,
which uses the more expensive customized application-specific integrated
circuits (ASICs). Indeed, owing to its ever-growing cost, Bitcoin mining has
become the preserve of companies backed by venture capitalists. The Ethereum
community is considering doing away with the proof-of-work (POW)
consensus-making protocol on which Bitcoin is run. They want to replace it
with proof of stake (POS), which only require users to hold in stake the amount
of ether necessary for mining, instead of requiring people to buy expensive,
specialized hardware and pay for large amounts of electricity.
• Faster transactions:
The Ethereum network, on its part, confirms a transaction in about 14
seconds. Closely related to the block size is the time the network takes to confirm
a transaction. The Bitcoin network takes about ten minutes. Occasionally it
might run into hours. Or even days. This works against Bitcoin’s adoption. The
delays especially make it inconvenient as a payment method. Users don’t want
to wait longer at checkout for the network to confirm a transaction, just so they
can purchase a bottle of soda. The Ethereum network, on its part, confirms a
transaction in about 14 seconds. This makes the ether a more convenient method
of payment.
3.2.2 Disadvantage:
Ethereum also has its downsides. One is security risk. This has already been
witnessed with the theft in June of close to USD 60 million from the DAO, the
first decentralized anonymous organization to be built on the Ethereum
blockchain. Ethereum also has its downsides. One is security risk. Ethereum
also has features that make it weaker than Bitcoin. For one example, Bitcoin is
deflationary, meaning the highest number of Bitcoins that will ever be placed
in circulation is capped at 21 million. Ether, on the other hand, is inflationary,
meaning it can have an infinite supply.
3.3 Litecoin
3.3.1 Advantages
• Faster transaction times
• Less expensive transactions
• First to successfully implement Lightning network for instant, zero-fee
transactions
• First to complete a cross-chain atomic swap (with Decred)
• In the process of adding confidential transactions
• Faster to adopt new technology, without community infighting over upgrades.
mining the coins, Litecoin’s can be mined by a wider base of users, for example
a PC built for gaming would be perfect for mining Litecoin’s.
The time it takes to officially confirm a Bitcoin transaction has taken place
is 10 minutes, and for a Litecoin it’s just 2 and a half minutes, meaning
purchases online or in stores can be performed much faster.
3.3.2 Disadvantages
Currently very few stores accept payment in Litecoin’s, though this is
changing by the day.
Litecoin’s are still relatively unknown compared to Bitcoins. This is mainly
due to there being no central Litecoin authority.
The largest virtual currency trading websites still don’t support Litecoins.
Though this should change in the near future.
4. APPLICTAIONS
4. APPLICTAIONS
Cryptocurrency is a form of digital money that is designed to be secure and, in
many cases, anonymous. It is a currency associated with the internet that uses
cryptography, the process of converting legible information into an almost uncrackable
code, to track purchases and transfers. Cryptography was born out of the need for secure
communication in the Second World War. It has evolved in the digital era with elements
of mathematical theory and computer science to become a way to secure communications,
information and money online.
It has various applications:
• Payments can be performed with ease; money can be transferred hassle free
without any losses.
• Inter-company transactions can be easily performed.
• Cryptocurrencies like Ethereum can be used for keeping track of contracts, it has
a system called smart contracts which can keep track of and validate contracts.
• Faster international transactions, which are free of cost.
5.1 Conclusion
Thus, we understood the working of cryptocurrencies, the various domains
it can be used in other than as an alternative payment. We also acquainted ourselves
with the concept of mining and how a currency is formed. We understood the
various security issues and how implementation of blockchain prevents malicious
users from using the system in their advantage. We finally understood the various
hashing algorithms and the resource intensive tasks.
6. REFERENCES
6.REFERENCES
[1] Mukhopadhyay, Ujan, et al. A Brief Survey of Cryptocurrency Systems. 2016 14th
Annual Conference on Privacy, Security and Trust (PST), 2016
[2] Watanabe, Hiroki, et al. Blockchain Contract: A Complete Consensus using Blockchain
, 2015 IEEE 4th Global Conference on Consumer Electronics (GCCE)
[3] Bitcoin: A Peer-to-Peer Electronic Cash System Satoshi Nakamoto [4] Understanding
the Ethereum Trie. Easy There Entropy, 27 Aug. 2015,
easythereentropy.wordpress.com/2014/06/04/understanding-the-ethereum trie/.
[5] Merkle Patricia Tree - Steemit. - Steemit, Nadifsd, 1 Oct. 2017,
steemit.com/cryptocurrency/@nadifsd/merkle-patricia-tree.
[6] Ethereum/Wiki. GitHub, Dwardu, 19 Dec. 2017,
github.com/ethereum/wiki/wiki/Problems. [7] 1 And SHA-256. Description of SHA,
quadibloc.com/crypto/mi060501.html.