Cryptocurrency Seminar for Information Technology
- 2. AGENDA • What is cryptocurrency ? • Terminalogies used in cryptocurrency • Use of Block chain in cryptocurrency • How does it work ? • How to buy cryptocurrency • How to store cryptocurrency • What can you buy with cryptocurrency? • Crypto currency examples • Cryptocurrency fraud • Cryptocurrency scams • Case Study • Pros & Cons • Conclusion
- 3. WHAT IS CRYPTOCURRENCY ? • Cryptocurrency is a digital currency that uses cryptography for security and operates on a decentralized network, typically based on blockchain technology • It enables peer-to-peer transactions without the need for a central authority like banks. • Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers
- 4. TERMINALOGIES USED IN CRYPTO CURRENCY • Blockchain : A blockchain is a digital ledger that records all transactions in cryptocurrency. It’s like a public notebook where every transaction is written down, but once it's added, it can't be changed. • Wallet : A crypto wallet is a tool (app or hardware) where you store your cryptocurrencies. It has a public key (like your email address) and a private key (like your password). • Cryptocurrency Exchange : A crypto exchange is a platform where you can buy, sell, and trade cryptocurrencies (like WazirX or Coinbase). • Cryptocurrency Broker : A cryptocurrency broker is a service that helps you buy or sell cryptocurrencies by acting as a middleman, often offering guidance and handling transactions for you. • Mining : Mining is the process of creating new cryptocurrency coins and verifying transactions. It’s done by solving complex puzzles on a network.
- 5. USE OF BLOCK CHAIN IN CRYPTOCURRENCY • Secure Transactions : Blockchain ensures that all crypto transactions are safe and protected using strong encryption. • Decentralization : It removes the need for banks or middlemen, allowing people to send and receive money directly. • Transparency : All transactions are recorded on a public ledger, so anyone can verify them, increasing trust. • Immutability : Once a transaction is recorded on the blockchain, it cannot be changed or deleted, preventing fraud. • Faster & Cheaper Transfers : Blockchain allows quick and low-cost transfers of cryptocurrency across the world without delays.
- 6. HOW DOES IT WORK ? Key Concepts in Cryptography Used in Cryptocurrency Before we explain the process, here are some key cryptographic terms involved: •Public Key: A cryptographic code (like your account number) that others use to send you cryptocurrency. •Private Key: A secret code (like your password) used to access and send your cryptocurrency. Must be kept secure. •Hash Function: A cryptographic function that turns any data (like a transaction) into a fixed-size unique code (called a hash). •Digital Signature: Like an electronic signature created using your private key — proves you’re the real sender. •Encryption: A method to protect and hide information so only the intended recipient can read it.
- 7. Step 1: Transaction Creation • You decide to send cryptocurrency (e.g., Bitcoin) to someone. • Your wallet software creates a transaction that includes: • The amount of crypto • The receiver's public key (wallet address) • Your digital signature (made using your private key) Cryptographic Term Used: Digital Signature ensures the transaction is really from you and not forged. Step 2: Broadcasting to Network • The transaction is broadcasted to the peer-to-peer (P2P) network of nodes. • Each node checks the validity of the transaction, including verifying: • The digital signature • That you have enough balance Cryptographic Term Used: Asymmetric Encryption (public-private key pair) helps validate the transaction without exposing your private key.
- 8. Step 3: Transaction Verification (Mining or Validation) •Transactions are grouped into a block. •Miners (or validators) verify the transactions using cryptographic hash functions. •For Bitcoin (and some others), miners solve a complex puzzle (Proof of Work) to add the block. Cryptographic Term Used: •Hash Function (SHA-256) is used to create a hash of the block. Even a small change in data will create a totally different hash, making tampering nearly impossible. Step 4: Adding to the Blockchain Once the transaction is verified and the block is solved, it is added to the blockchain. The blockchain is a linked chain of blocks, each containing a cryptographic hash of the previous block. Cryptographic Term Used: Hash Pointers ensure that each block is linked securely to the previous one, maintaining the order and integrity of transactions. Step 5: Confirmation & Completion Once added to the blockchain, the transaction is confirmed. The receiver sees the new balance in their wallet, and you cannot reverse or change the transaction
- 10. HOW TO BUY CRYPTOCURRENCY ? Step 1: Choose a Crypto Exchange or Broker First, you need to decide whether you want to buy crypto directly from an exchange or through a broker. Some popular exchanges in India are WazirX, CoinDCX, and Unocoin. Pick one based on things like ease of use, fees, and security. Step 2: Create and Verify Your Account After choosing, you need to create an account. For brokers, sign up with your email and password. For exchanges, create a trading account on their website. You’ll also need to complete a KYC (Know Your Customer) process by submitting documents like ID proof. It might take a few hours or days for verification.
- 11. Step 3: Deposit Money Once your account is verified, deposit money into your account. For exchanges, deposit money into your crypto wallet using your bank account. You can also send crypto if you already own some. For brokers, you can deposit money via debit/credit cards, e-wallets, or other payment methods. Step 4: Place Your Crypto Order After depositing money, you can browse through the cryptocurrencies on the exchange and buy the one you want. Once you place the order, the exchange will match your buy order with a seller. For brokers, they will help find a seller for you. Step 5: Choose Where to Store Your Crypto Once you’ve bought your crypto, you need to store it safely.
- 12. HOW TO STORE CRYPTOCURRENCY ? Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. There are different wallet providers to choose from. The terms “hot wallet” and “cold wallet” are used: • Hot wallet storage: "hot wallets" refer to crypto storage that uses online software to protect the private keys to your assets. • Cold wallet storage: Unlike hot wallets, cold wallets (also known as hardware wallets) rely on offline electronic devices to securely store your private keys.
- 13. WHAT CAN YOU BUY WITH CRYPTOCURRENCY ? • Retail Products – Buy electronics, clothing, and gadgets from online stores like Newegg or Overstock. • Food & Drinks – Pay for meals at select restaurants and cafes that accept crypto. • Software & Web Services – Subscribe to VPNs, web hosting, and cloud storage using crypto. • NFTs & Digital Art – Use Ethereum or other coins to buy digital collectibles. • Education – Enroll in online courses or donate to educational platforms accepting crypto. • Real Estate – Buy or invest in properties through companies that accept crypto payments. • Services – Pay for freelancing, marketing, or development services with crypto. • Software & Web Services – Subscribe to VPNs, web hosting, and cloud storage using crypto.
- 14. CRYPTO CURRENCY EXAMPLES • Bitcoin is a digital currency that allows people to send and receive money over the internet without using a bank. • Ethereum is a digital platform where people can create and run apps and agreements without needing a middleman. • Ripple is a digital payment network that helps people and banks send money quickly and cheaply across countries. • Litecoin is a digital currency like Bitcoin, but it is faster and has lower fees. It's used for quick and easy online payments.
- 15. CRYPTOCURRENCY FRAUD 1. Pump and Dump Schemes: 1. What It Is: Fraudsters artificially inflate the price of a lesser-known cryptocurrency by spreading misleading information, then "dump" their coins, causing the price to crash. 2. How It Works: They hype up the cryptocurrency through social media or fake news, and once prices go up, they sell their holdings, leaving investors with worthless coins. 2. Fake ICOs (Initial Coin Offerings): 1. What It Is: Scammers launch a fake cryptocurrency project and sell tokens to investors promising huge returns. 2. How It Works: After raising money through the ICO, the creators disappear, and the investors lose their money since the project never existed.
- 16. CRYPTOCURRENCY SCAMS 1. Phishing Scams: • What It Is: Scammers trick you into providing your private keys or wallet credentials by posing as legitimate services (exchanges, support staff). • How It Works: They send fake emails or links that appear to come from legitimate sources, leading you to websites where your information is stolen. 2. Ponzi Schemes (Crypto-based): • What It Is: Scammers promise high returns on investments, but payouts are made using money from newer investors, not actual profits. • How It Works: Early investors may receive payouts, but eventually, the scheme collapses when new investors stop coming in, leaving later investors with nothing.
- 17. Case Study: The 2024 WazirX Cryptocurrency Exchange Hack What is WazirX? WazirX is one of India’s biggest cryptocurrency exchange platforms. People use it to buy, sell, and store cryptocurrencies like Bitcoin and Ethereum. What Happened in the Hack? In July 2024, hackers attacked WazirX and stole about 2,000 crore ($234 million) ₹ worth of cryptocurrencies. This became one of the biggest crypto hacks in India. Who Was Behind It? The hack was reportedly done by the Lazarus Group, a North Korean hacking group known for stealing money through cyberattacks.
- 18. How Did the Hackers Do It? 1. Created a Fake Account: Hackers made a fake user account on WazirX and started buying a cryptocurrency called GALA tokens. 2. Targeted WazirX's Wallet: WazirX used a multisignature (multisig) wallet – this means more than one person must approve a transaction. Hackers tricked WazirX into opening this wallet, which gave them a chance to sneak in. 3. Changed the Smart Contract: A smart contract controls how the wallet works. The hackers changed the code of this contract secretly, giving themselves full control over the wallet. 4. Stole All the Funds: Now in control, the hackers emptied all the money from WazirX's wallet — both from online (hot) and offline (cold) storage.
- 19. What Did WazirX Do After the Hack? •Paused Trading: They stopped all transactions to prevent further damage. •Faced Lawsuits: Another exchange called CoinSwitch sued WazirX to recover about 80 crore ₹ that got stuck during the hack. •Started Recovery Process: In January 2025, a court in Singapore allowed WazirX’s parent company to meet with creditors and discuss how to get back or repay the lost money What Can We Learn from This? 1.Crypto platforms need strong security – even a small mistake can cost millions. 2.Smart contracts must be checked regularly – hackers can change the code if there’s a loophole. 3.Multisig wallets aren't enough – they need extra protection and careful handling. 4.People should use trusted platforms and be cautious with where they keep their crypto.
- 20. PROS 1. Decentralization - No central authority (e.g., banks or governments) controls the currency. This reduces the risk of government interference or manipulation. 2. Security - Cryptocurrencies use strong cryptographic techniques that make transactions secure and nearly impossible to counterfeit. 3. Transparency - Blockchain ledgers are public and immutable, making it easy to verify and audit transactions. 4. Fast and Cheap Transactions - Especially useful for international payments — no need for intermediaries, lower fees, and faster processing.
- 21. CONS 1. Volatility - Prices can change rapidly, making cryptocurrencies risky for short-term investors and difficult for use in daily transactions. 2. Regulatory Uncertainty -Laws and policies vary across countries; some have banned crypto while others are still figuring out how to regulate it. 3. Irreversible Transactions - If you send crypto to the wrong address or fall for a scam, there's no way to reverse the transaction. 4. Risk of Loss - If you lose your private key or hardware wallet, your funds are permanently lost. There is no “forgot password” option.
- 22. CONCLUSION Cryptocurrency represents a revolutionary shift in the way we think about money, offering decentralized, secure, and transparent transactions without the need for intermediaries. While it brings many advantages like financial inclusion and innovation, it also comes with challenges such as volatility, regulatory uncertainty, and security risks. As technology and regulations evolve, cryptocurrencies have the potential to reshape global finance and open new doors in digital economies.
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