International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056 Volume: 08 Issue: 04 | April 2021 www.irjet.net p-ISSN: 2395-0072 © 2021, IRJET | Impact Factor value: 7.529 | ISO 9001:2008 Certified Journal | Page 55 Crypto-Currencies how secure are they? Gopal Vishwas Patil 1 , Dr. Aniruddha S Rumale 2 1 M.Tech. Scholar, G H Raisoni COE&M, SFPU, Pune, Maharashtra, India 2 Professor and HoD, Dept. of AI, G H Raisoni COE&M, SFPU, Pune, Maharashtra, India ---------------------------------------------------------------------***--------------------------------------------------------------------- Abstract - A cryptocurrency is a digital or virtual currency that uses cryptography for security. Every cryptocurrency has its governance model, according to which it functions and secures its network. However, there are two factors that keep the cryptocurrency secure, i.e., the blockchain technology and consensus algorithm. However, there are issues with blockchain and crypto currency security that should be addressed. Also, if you are investing in popular and trusted cryptocurrencies then you are almost safe from the asset point of view. But what matters is where you store your cryptocurrencies which is important. There are various options like hot wallets, cold wallets, physical wallets to choose from with respect to security. Recently, cryptocurrencies have become the main topics in the financial industry. This paper elaborates different user privacy aspects, technology used for security, benefits, challenges, tips to avoid frauds using cryptocurrencies. Successful attacks on crypto currencies are possible and in action; it is important to understand the ways to save cryptocurrency. Many hackers are trying out new ways to counterfeit the cryptocurrency transaction processes and intending to draw the secured cryptocurrency. But being technologically advanced, it has become a challenge for hackers. Key Words: cryptocurrencies, security, blockchain, financial fraud, ransomware 1.INTRODUCTION This section discusses about what is cryptocurrency, how cryptocurrency works while transaction takes place with virtual currencies and cryptocurrency properties. 1.1 Cryptocurrency A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets [1]. Cryptocurrencies are a type of digital currencies, alternative currencies and virtual currencies. If we takeaway all the noise around cryptocurrencies and reduce it to a simple definition, we find it to be just limited entries in a database no one can change without fulfilling specific conditions. Take the money on your bank account: What is it more than entries in a database that can only be changed under specific conditions? You can even take physical coins and notes: What are they else than limited entries in a public physical database that can only be changed if you match the condition than you physically own the coins and notes? Money is all about a verified entry in database of accounts, balances, and transactions. 1.2 How cryptocurrency Works A cryptocurrency consists of a network of peers. Every peer has a record of the complete history of all transactions and thus of the balance of every account. A transaction is a file that says, “A gives X cryptocurrency to B” and is signed by A private key. After signed, a transaction is broadcasted in the network, sent from one peer to every other peer. The term "virtual currency" refers to a medium of exchange existing entirely in intangible form that is not a legal tender but can be substituted for legal tenders. Older forms of "currency" that are not "legal tender" include paper- based currency substitutes, such as military scrip and depression scrip. In recent times, the term "virtual currency" has developed an added connotation that it exists only in an electronic or digital form and is used only as a medium of valid, ends up in a block in the blockchain for the purpose of transferring the ownership of an amount of cryptocurrency to a designated digital address. The diagram below (Fig.1) shows basic steps involved in a transaction. Fig.1: Steps involved in a cryptocurrency transaction.[2]