Cryptocurrency: A revolution in financial market

Running head: COMPARISON OF SOME CRYPTOCURRENCIES
COMPARISON OF SOME CRYPTOCURRENCIES
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1COMPARISON OF SOME CRYPTOCURRENCIES
Executive Summary
The concept of cryptocurrency has brought in a revolution in the financial market. These
digital currencies are secured by the help of cryptography that helps resolving problem of
double spending. The cryptocurrencies rely on decentralized network that relies upon
blockchain technology which is a distributed ledger enforced by a disparate network of
computer systems. The examples of cryptocurrencies include Bitcoins, Litecoin, Ethereum
and many more. In this paper, the technology involved in cryptocurrencies and how
blockchain technology can be used in the same has been discussed. Comparisons in between
two cryptocurrencies that are Bitcoin and Ethereum have been given. Lastly, the paper
provides some recommendations for usage of cryptocurrencies.

2COMPARISON OF SOME CRYPTOCURRENCIES
Table of Contents
Introduction................................................................................................................................3
History of encrypted, blockchain cryptocurrencies...............................................................4
Description of Bitcoin and Etherium.........................................................................................5
Bitcoins..................................................................................................................................5
Ethereum................................................................................................................................7
Comparison in between Bitcoin and Etherium........................................................................10
Conclusion................................................................................................................................10
Recommendations....................................................................................................................11
References................................................................................................................................12

3COMPARISON OF SOME CRYPTOCURRENCIES
Introduction
The crypto market is expanding at a rapid rate and with every passing day large
numbers of unregulated cryptocurrencies are being circulated in the market. The government
is paying more attention to this so are the stakeholders. Reports suggest that total market
capitalization of almost 100 largest cryptocurrencies have exceeded the equivalent amount of
EUR 330 billion around the world early in the year 2018 (ElBahrawy et al., 2018). The total
market capitalization of cryptocurrencies in this specific span of time has reached higher
USD of 728 billion. Thereafter which it has dropped to an approximate value of USD 360
billion and thus the regulators are busy finding ways to impose proper regulations on these
digital currencies (Caporale, Gil-Alana & Plastun, 2018). Till date there is no such univocal
view on how to impose proper regulations on cryptocurrencies. There are many reasons as to
why these cryptocurrencies should be scrutinized by the regulators and supervisors. The
reasons being price volatility, hack attacks, terrorist financing, speculative trading and money
laundering. According to researchers, cryptocurrencies require strict regulations so that illegal
activities can be prevented along with illegitimate usage of these digital currencies. Apart
from the issue of instable prices of cryptocurrencies, the regulators are worried about the
criminal activities surrounding cryptocurrencies. The criminals are making use of
cryptocurrencies for various activities such as fraud, manipulation, evasion of tax, hacking,
money laundering and funding terrorist activities. This is a huge topic at present times and
there are numerous cryptocurrencies available in the market. The applications of blockchain
technology are also huge. In this paper, focus will be given on two popular cryptocurrencies
that are Bitcoin and Ethereum. The difference in between the two cryptocurrencies will be
discussed as well. The legal contexts related to cryptocurrencies and blockchain technology
will also be addressed in the discussion. The various aspects of the cryptocurrency being a
part of the financial framework will also be discussed.