1. Cryptocurrency is a mathematically based decentralized convertible currency that is protected by cryptographic methods, i.e. it uses cryptography to create a distributed, decentralized and secure information economy. Bitcoin replaces the issuer with cryptographic algorithms.
Bitcoin is pseudo-anonymous, in fact, all transactions from each wallet are open by default, and a single contact with the wallet reveals information about all transactions of this wallet, but mostly users hide their ownership of a particular wallet. Even if the user is anonymous, it is possible to identify him by the counterparties known to him.
Bitcoin is omnipresent, a transaction takes place within a few minutes, with virtually no commission, without the possibility of being blocked by a third party, and it can take place between unidentified (anonymous) participants.
Thus, the pros and cons of Bitcoin:
Pros
- extremely low transaction cost;
- Bitcoin is omnipresent - transactions can be sent very quickly to any point on the planet;
- emission is not subject to the human factor - everything is decided by algorithms;
- ultra-small transactions open the way to new business models;
- a Bitcoin wallet cannot be taken away, service cannot be denied for any reason;
- Bitcoins cannot be collected through courts or banks;
- unlimited transactions;
- the system is almost impossible to hack and the account remains safe;
- pseudo-anonymity, the level of which can be developed to perfection with proper preparation. Cons
- Bitcoin can be used to create a shadow economy;
- a simpler tool for tax evasion;
- anonymous transactions of criminals;
- a simplified tool for legalizing criminal funds;
- the impossibility of seizing accounts;
- no mechanism for canceling, stopping and returning a transaction;
- no mechanism for distinguishing dirty bitcoins;
- high volatility.
2. Complexity of the reverse encryption operation > discrete arithmetic root modulo
Key recovery difficulty > factorization problem
c = m^e mod n – direct operation
m = e√c mod n – inverse operation, discrete arithmetic root of degree e.
Humanity has not yet learned how to efficiently calculate such roots, there is no such algorithm only by iteration. Although this can be circumvented, first calculate the private key from the public key, and then decrypt it using the formula (n, e) →(n, d) n→p*q.
The problem of calculating such a root and the factorization problem are complex computational problems.
To date, there are no effective algorithms for solving this problem on classical computers, which ensures the security of RSA.
Shor's algorithm allows us to solve this problem (through the factorization of n), but this requires sufficiently powerful quantum machines, which do not yet exist.
Biting the hand that feeds IT
