Every currency need to have some sort of authority over its volume. Also one may have to protect money from fraud and alteration. Considering fiat money one ought to have a central bank which controlls the quantity of the money. Besides that, it is essential to have protection over the money, although its not impossible to produce base coins. Finally one has to compile with the laws, or else everybody may make fake cash.
Cryptocurrencies can be considered as a bracket of currencies, so the above mentioned properties has to apply to them too. Let’s look at an example. Anna wants to double spend some coins. In this scenario Anna is paying the same digital coin to Thomas and to Charles too. We need to develope a system which can prevent such manners from happening. In contrast with fiat money, a cryptocurrency need to solve this problem purely on a technological level, withou the need of a central person.
In this thesis I am going to analyze the most famous cryptocurrency, called Bitcoin. After analyzing the system I am going to develope a software. Through this software I am going to demonstrate how Bitcoin and its blockchain system works, including all of its major algorithms. Then I am going to make a statistical analysis over the information that can be extracted from the blockchain. Through these results I am going to show a deeper connection between the last 6 years most important economic events, which had an effect over the aformentioned system.
As the name suggests the base of all cryptocurrencies is cryptography. With the help of cryptography one can prevent the event of a fraud, or ambiguity. I am going to show, that the production of digital coin is purely based on mathematial protocols. To understand Bitcoin, one ought to have some base knowledge of the basics of cryptography.