Bitcoin Forensics

Abstract

Virtual Currency is a form of digital currency that only exits in an electronic form and not in any physical form. Unlike traditional money or fiat currency, virtual currency does not rely on a banking authority. Virtual currencies were originally meant for online games and entertainment. These are mostly centralized, and its control is in the hands of the developer. In 1998, Wei Dei, a computer engineer developed 'B-money'-a concept on a decentralized payment system. Taking that idea forward was Nick Sabzo who suggested employing cryptography to facilitate the generation of fresh units of currency. Proof of Work is a concept where the participant systems' computing power is used to solve complex mathematical equations that are assigned to the system. The solved calculations would be used to verify the transaction and also reward the participant that solved the problem. Cryptocurrency Cryptocurrency is a form of virtual currency created to serve as a medium of trade, and it uses cryptography to secure and verify transactions and to control the creation of new units. Currently there are over 2,000 registered cryptocurrencies and many in development. Most cryptocurrencies are not governed by any banks, governments, or private firms, making them completely "decentralized." After seeing the massive cryptocurrency revolution, even some governments are developing their own cryptocurrency. Every cryptocurrency developer has decided on a way to continue the supply of his or her cryptocurrency. Nodes of the platform engage in a process called 'Mining' , and the nodes are called 'Miners' .