A Study of Digital Currency Cryptography for Bbusiness Marketing and Finance Security
A medium of exchange is an intermediary used in trade or business to avoid the inconveniences of a pure barter system. While many things could be used as a medium of exchange in an economy, fiat money including currency bills and coins is the most common and generally accepted as a unit of account which is deemed to represent a standard and store of value. In engaging in e commerce, people may opt to send money through money remittance agents or through banks for a fee. The Age of the Internet has finally brought upon us a new phenomenon known as digital currency cryptography. No intermediaries. No service charges. No legal fees. No delays. With ease, people of any country can be able to send, receive and store value on their digital wallets. Keywords Digital Currency, Cryptography, Currency, Business marketing, Business Security 1. Introduction A digital currency is new class of virtual currencies with high degree of decentralization. It is a peer to peer using the process called cryptography, wherein ordinary information is converted into a secret code or unintelligible text in order to secure transactions, increase supply and prevent fraud[1][2] The idea of using cryptography to make digital currencies aims to control the creation and transfer of money without relying on financial institutions and it is considered as an attempt to replace monetary transactions with a digital medium of exchange using peer to peer networking[3][4] Digital currency has several important features. First thing is that it is decentralized. It is not being controlled by central authority or banking institutions. Being decentralized means that it is resistant to shutdown attempts, that if one part of system is offline, other transactions can still keep on going. Another thing is that it's easy to set up. Creating an online account is fast and does not file much legal documentary requirements. A bank account is not even necessary. Signing up with such ease, gives an opportunity to all netizens to be able to engage in such activity. Digital wallet software which can be accessed through desktop computer or mobile phones may be utilized to check your account balance and make some transactions. Transactions, being Received(December 18, 2015) Review request(December 19, 2015) Review Result(1st: December 28, 2015, 2nd: January 09, 2015) Accepted(January 18, 2016) Published(January 31, 2016) 02844, Convergence Security Department, Sungshin Women's University, Bomun ro 34da gil, Seongbuk gu, Seoul, Korea email: taihoonn@sungshin.ac.kr A study of digital currency cryptography for business marketing and finance security Copyright c 2016 HSST 366 held online, give an opportunity for e commerce participants to send digital currency cryptography fast in their respective online wallets or accounts in whatever country they are with minimal or no additional fees at all.Making business online can also give the buyer or seller the option to disclose their identities or not. Digital currency adopts the process of anonymization. There are many types of digital currency cryptography. Common types include, Bitcoins, Ripple, Altcoins, Litecoins, Ethereum, Dash, Dogecoin, Stellar, Peercoin, Bitshares, NXT, etc. As of date, some types of digital currency cryptography having good reputation and large market capitalization are being used and accepted as payment for goods and services offered by legitimate merchants and e commerce sites[3 6] 2. Brief Digital Currency Cryptography History In the year 1982, David Chaum proposed a cryptographic untraceable payment system[7] After six years, in the year 1998, a description of "b money" an anonymous, distributed electronic cash system was published by Wei Dai[8][9] B money was a purely personal project, it was more conceptual than practical. After a short period of time in the same year, Nick Szabo then created the "Bit Gold" In Szabo's bit gold scheme, a participant must dedicate computer power in solving cryptographic equations assigned by the system[9] Bit Gold was an electronic currency system which required users to complete a function with solutions being cryptographically put together and published. The solved equations will be sent to the Bit Gold community and the work will be credited to the person who solved it. The solution will then become a part of their computation, thus creating a chain of new property. Majority of the party must agree to accept new solutions in order to start on the next equation. The first decentralized digital currency cryptography was introduced by a pseudonymous author Satoshi Nakamoto in 2009 with his article entitled "Bitcoin: A Peer to Peer Electronic Cash System"[4][9] Bitcoin, being the first type of decentralized digital currency cryptography introduced in online market, made a worldwide impact. It used a cryptographic hash function, as its scheme[1] After this, many other digital currency cryptography have been created, with some having distinct features. Other types of digital currency cryptography which had low market capitalization have died and some survived until the present. 3. Cryptocurrency Transaction Processes In digital cryptography, the original text known as "plaintext" is turned into a coded equivalent called "ciphertext" via an encryption algorithm. The ciphertext is then decrypted at the receiving end and turned back into plaintext[3] This is the basic process done by the computers during the transaction processes in the digital currency cryptographysystem. Asia pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology Vol.6, No.1, January (2016) ISSN: 2383 5281 AJMAHS Copyright c 2016 HSST 367 So how can someone obtain digital currency cryptography? In the present market, there are three primary ways. Buying them, accepting them as payment and mining new ones. Users may store their digital currency cryptography in their digital wallets including online wallets and mobile wallets. 3.1 Buying digital currency cryptography The first way of obtaining digital currency cryptography is through buying it. One can be able to purchase digital currency cryptography by paying cash. There are online stores where you can buy through your credit or debit cards. Bitcoin, being the top digital currency cryptography, has partnered with machine manufacturing entities to produce bitcoin ATM. [Figure 1] shows two different models of Bitcoin ATM[10][11] With the use of mobile phones, cash can be easily convertible into Bitcoins. [Figure 1] Digital Currency Cryptography ATM 3.2 Accepting Cryptocurrencies as Payment The second way of obtaining digital currency cryptography is through accepting them as payment for goods sold and services rendered[12][13] People or business entities use bitcoins in e commerce, in order to gain more coins[14] Some of them advertise their products through websites and expand their payment channels by accepting digital currency cryptography payments. A few stores even post that they are accepting bitcoins as payment for the goods that they sell. To ensure profitability, merchants post that they accept bitcoins as payment but actually, it made partnership with business intermediaries. Intermediaries that accept the bitcoins, convert them into cash, and delivers the cash to the merchant. 3.3 Mining Cryptocurrencies A study of digital currency cryptography for business marketing and finance security Copyright c 2016 HSST 368 The third way to obtain cryptocurrencies is by mining them[15] Simply stated Mining is the process of adding transaction records into the cryptocurrency's public ledger of past transactions commonly known as the block chain[13] Mining cryptocurrencies is not that easy because it was intentionally designed to be resource intensive and difficult. It takes time and money to mine. Common investment and expenses required in this activity would be the hardware software used the electricity to run the computers and rent of office space if you don't have one. In the mining ecosystem, users have used various types of hardware to mine these blocks. Early digital currency cryptography used Central Processing Unit (CPU) Mining. After a while, Graphics Processing Unit (GPU) mining[16][17] a more efficient way was introduced. Other mining techniques such as Field Programmable Gate Arrays (FPGA) mining[17] Application Specific Integrated Circuit (ASIC) mining[17][18] was also integrated in other digital currency cryptography systems. Mining digital currency cryptography has a limit. As for the Bitcoin digital currency cryptography, it only has a maximum limit of about 21million bitcoins[19] This will just be the amount that will circulate in the bitcoin system. [Figure 2] shows a simplified diagram of how digital currency cryptography transactions work in a decentralized peer to peer network. One possible scenario in this figure is that Miners use past transactions and solve a mathematical function to produce a digital currency cryptography this will then be put on the digital currency cryptography exchange. A person may then obtain a digital currency cryptography by buying on the exchange. His digital wallet balance will then increase while the balance of the exchange will decrease. This person can also use this to buy goods on a store, after buying his balance decreases while the balance of the business man's digital wallet increases. [Figure 2] Cryptocurrency Transaction Process Asia pacific Journal of Multimedia Services Convergent with Art, Humanities, and Sociology Vol.6, No.1, January (2016) ISSN: 2383 5281 AJMAHS Copyright c 2016 HSST 369 4. Top 10 Cryptocurrencies This part discusses things regarding the top 10 Cryptocurrencies based on their Market Capitalization (from greatest to least) as of December 5, 2015[13] Ranking may vary in future dates. [Figure 3] shows the logo image of a Bitcoin (BTC) It is the first implementation of the digital currency cryptography concept. It is open