Bitcoin as a Real Money: A Statistical Approach

Bitcoin AS A REAL MONEY: A
STATISTICAL APPROACH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
1.1 ...............................................................................................................................................3
1.2 Research aims and objectives................................................................................................4
1.3 Rationale of study..................................................................................................................5
1.4 SignificenceSignificance of research study...........................................................................6
StrcutureStructure of report.........................................................................................................7
CHAPTER 2: LITERATURE REVIEW.........................................................................................9
List of cyptocurrencies introduced............................................................................................10
To identify trends in number of transaction of Bitcoin which will reflect number of mining
firms increase or decrease across the globe...............................................................................14
Relationship between price of bitcoin and vendors...................................................................17
Inflation and bitcoin price..........................................................................................................18
REFERENCES..............................................................................................................................21

INTRODUCTION
1.1 Background of study
Technology is evolving at a rapid pace across the globe. In past few years, a lot of work
is done on the development of technology. Bitcoin is one of the electronic currency that is used
at a wide scale across the globe. Before going in to deep research on Bitcon, it is necessary to
develop broad understanding about it. Under this electronic mode of payment, online currency
is issued that remain in our account. The business firm makes online payments and currency is
not related to specific government or central bank. Under electronic mode of payment that is
done through Bitcoin, there are some entities like miners (Simser, 2015). These entities enter in
to network and try to develop block of Bitcoin. In this regard, they need to perform a tough job.
They need to develop hash below threshold limit that is commonly determined for all miners that
are operating in the network of Bitcoin. When hash value is less than threshold value, one can
successfully build a block and add it to the block chain. Block refers to the vector, which
contains list of the current transactions that are done by people through Bitcoin.
Miners verify the transactions that are covered in block and in return, Bitcoin receive Bit
coin’s and transaction fee, which is their income. This is the entire process that is going on while
transactions take place through Bitcoin. Like bank account, each holder of Bitcoin has some
unique number that is encrypted and linked to specific algorithm (Reynolds and Angela, Irwin.,
2017). Algorithms are set of instructions that execute specific thing on the execution of
command. When anyone enters key with respect to account through algorithm, verification is
done and it is ensured that data will remain safe and no one would steal it easily. Thus, it can be
said that payment through Bitcoin is safe. In the current report, different aspects Bitcoin of
Bitcoin are covered. Along with that, detailed analysis of importance and relevance of Bitcoin as
a payment method is done. Apart from this, application of Bitcoin technology is analysed in
terms of its use that is done by the people and number of countries, which are Bitcoin accepting
Bitcoin for making and receiving payment. Apart from this, in the report, it will be identified
that whether regulation related to Bitcoin is developed or not. It can be said that scope of present
research study is wide in nature and in future, many new things can be observed with respect to
Bitocoin (Ram, Maroun and Garnett, 2016).
Inflation is the factor that largely affects the nation and economic growth as well as
currency exchange rate. Thus, in the research, an attempt will be made to identify the impact that
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inflation rate has on Bitcoin. USD also affects the currency value and in the present study,
relationship Bitcoin between Bitcoin value and currency will be identified. It can be said that
there is significant importance of Bitcoin. Bitcoin for the business firms. Many things can be
covered in research about Bitcoin. With passage of time, use of Bitcoin. Bitcoin is increasing
across the nations. Now, more and more vendors are accepting payments in the mentioned
currency. Due to this reason, demand for same increased in the market. It can be said that time
will come when more payments will be made and accepted in Bitcoin in the market. With
passage of time, it is very important that number of dealers that execute trade related to Bitcoin
must be increased. This is because; when more will be the dealers, less will be control of it on
the network, which is very important in current scenario. This will prove to be good for Bitcoin
across the globe.
1.2 Research aim and objectives
Aim: To develop a broad understanding of Bitcoin and exploring trends related to crypto
currency.
Objectives:
 To identify relationship between Bitcoin and USD
 To identify number of crypto currency introduced
 To identify trends in that prevailed in respect to number of transactions of Bitcoin which
will reflect number of mining firms increase or decrease across the globe
 To identify relationship between price of Bitcoin and number of vendors To identify relationship between inflation and price of Bitcoin
Research questions
 What is the relationship between Bitcoin and USD?
 What is the rate at which crypto currency is issued in the market?
 What are the trends in market with respect to Bitcoin?
 What is the relationship between price of Bitcoin and number of vendors?
 What is the relationship between inflation and price of Bitcoin?
l 1.3 Rationale of study
It is important to identify the reasons due to which research study is carried out in the
specific domain. As this reflect the importance of present research study, it was important to
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perform the current research study as Bitcon is in market for more than 5 years but today also,
Bitcoin is not a popular medium for making a payment. Transaction cost is low and instant
payment happened is case of mentioned virtual currency while doing transactions then also
Bitcoin does not achieve a huge success (S.M. Irwin. and Milad, 2016). Thus, it is very
important identify and evaluate Bitcoin on number of factors. This will reflect the reasons due to
which Bitcoin achieve success of failure in the market. There are many positive sides of the
Bitcoin as a currency. Like a single currency is accepted across the nations.
Thus, one does not need to care or concern about exchange rates in the market. Thus, it
was important to conduct present research study as by doing so, different aspects that are related
to Bitcoin can be covered easily add deep analysis of same can be done in a systematic manner.
Thus, it can be said that there is significant importance of the present research study for varied
entities. In current scenario, while doing trade with any nation, companies have to consider the
exchange rate. Fluctuation in these rates significantly affects the profit that firms earned in their
business. Bitcoin is the currency whose value is increasing rapidly and due to this reason, firms
are increasingly making use of mentioned electronic currency in their business.
l 1.4 Significance of research study
There is huge significance of the present research study as it covers varied aspects of
Bitcoin. In the current research study, importance of Bitcoin will be discussed in detail along
with discussing different areas where Bitcoin benefits the firm. Thus, it can be said that scope of
the present study is wide and many things can be done with making use of Bitcoin as a mode of
payment. In this research, number of people and countries that are covered will be studied in
detail. This will show the extent to which Bitcoin is preferred by the people and business firms.
Bitcoin is one of the important currencies that can be used by business firms to perform business
transactions across the globe. Thus, it is highly important to identify that after having such a
strong positive points what are the reasons due to which still at global level Bitcoin is not
accepted by the firms. Government can impose some of the important rules and regulations as
well.
This research study will help readers in understanding the extent to which government
intervene on use of Bitcoin in Malaysia by imposing strict rules and regulations. This reflects
that there is high importance of the present research study for individuals. Inflation is another
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factor that indirectly affects the currency value. Increase or decrease in currency value heavily
affects the usage of specific currency in nation or across globe. Present research study is
focusing on identifying whether inflation rate has any impact on Bitcoin. This reflects that there
is significance of study as it helps one in understanding whether there is any impact of inflation
on Bitcoin value or not. If there is any impact then to what extent it leads to up and down in the
Bitcoin value. Finally, in the research study, relationship will identified between USD and
Bitcoin. Usually, in case of paper currency, every nation’s currency’s value is compared with
USD as well as strengths and weaknesses are identified. Accordingly, the firm exchanges
payments.l It can be said that like issues are observed in pear currency same are evaluated in
respect to electronic currency. This reflects that at vast level relationship is identified among
variables. Structure of report
 Introduction: In order to prepare dissertation in a systematic manner, first introduction part is
prepared and in this, detailed discussion is carried out on Bitcoin along with its advantages and
issues that can be associated with it (DeWaal and Dempsey, 2015). In this section of report,
rationale and significance of research is explain briefly. It can be assumed that there is huge
importance of the present research study for researchers.
 Literature review: This is the second part and one of the important sections of present research
study. At this stage, literature of different scholars is review in detail and positive and negative
points that they speak with respect to research objectives are explained.
 Research methodology: It is another important segment of the current research study. Research
methodology section reflects the approach that is followed to conduct the present research study.
There are number of sub parts of the research methodology section, which will cover approach
which will be followed for carrying out research study. In this section of report research
philosophy, ethics and limitations of study will also be included. It can be said that there is huge
significance of this part of research as it shows whether research is carried out in a legitimate
way by the researcher or not.
 Data analysis section: In this part of the research report, data is analysed through using relevant
tools like thematic analysis and SPSS. Based on analysis of results, it is find out that in what
specific direction research variable move like customers are satisfied from the firm etc. In many
researches on collected data, SPSS is also used for analysis purpose. The tool reflects
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