Cryptocurrency: Introduction, Creation, Value Fluctuation, Types

This article provides an introduction to cryptocurrency, its creation, value fluctuation, and types. It discusses the decentralized nature of cryptocurrency, the creation process, and factors affecting its value. It also covers the three main types of cryptocurrency.

Running head: CRYPTOCURRENCY
CRYPTOCURRENCY
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Introduction to the cryptocurrency:
Cryptocurrency is a digital asset which uses advanced technology for the operation. The
main characteristics of the cryptocurrency are that it acts like the parallel monetary system, the
nature of the cryptocurrency is decentralized in nature (Roja, Peevitha and Lakshmi 2018). The
traditional monetary system operated and controlled through the centralized bank, while the
block chain is managed through the use of the block chain technology. The base of the block
chain is distributed ledger technology which is used for maintaining the transaction of the public
finance (Roja, Peevitha and Lakshmi 2018). The first cryptographic cash was invented at 1983,
which was first known as the ecash. Later it was implemented through digicash (Akira 2018).
There are six conditions regarding the characteristics of the cryptocurrency- the whole
cryptocurrency system does not require the central monitoring, rather it is distributed in nature
(Abraham et al. 2016). The whole system keeps track of the ownership of the cryptocurrency
units, ownership of the cryptocurrency can be proved cryptographically, new cryptocurrency can
be created, in case if the ownership of the cryptocurrency is changed the system allows to
perform the transaction on the changed ownership of the crypto currency, in case, if two requests
for changing the owner is entered into the system, the cryptocurrency will process one of the
requests.
Creation of the cryptocurrency:
The creation of the new crypto currency can be developed through the modification of the
existing code of the cryptocurrency (Hayes 2017). The users who are willing to create new
cryptocurrencies can develop and modify the existing code (Roja, Peevitha and Lakshmi 2018).
As the platform for the creation is open source, the code can be available in different platforms.
The respective source code will help to create the altcoin of the users. Some of the platforms for

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the creation of the cryptocurrencies are CryptoNight, CryptoNote. Apart from that there are
many host services which provides the services for hosting of the code for making new crypto
currencies. One of the hardest part for creating of the cryptocurrency is the adaptation part.
Without adaptation and the network effect the cryptocurrency will have no significance (Roja,
Peevitha and Lakshmi 2018). Once the cryptocurrency gained enough to tract, people can make
transaction using the crypto currencies (Hayes 2017). In order to monitor the transactions in the
crypto currencies, the public ledger is maintained (Kim et al. 2016). The use of this ledger
makes the nature of the crypto currency decentralized. The maintenance of the ledger is operated
by the use of the block chain technology (Hayes 2017). The decentralized nature of the
cryptocurrency makes it impossible to identify the both parties in the transaction(Roja, Peevitha
and Lakshmi 2018). Apart from that the mining of the currencies in the system can help to
generate the new currencies.
Raise and fall of the value of the cryptocurrency
There are different factors regarding the raise and the fall of the value of the crypto
currencies. The factors can be divided into two categories- internal factor and external factor.
Trader of the crypto currencies: It can be said that the major traders have less significance
or the impact on the price for the high digital currency capitalization (Thelwall 2017). The price
of the crypto currency depends on the readiness of the major traders regarding the buying and
selling of the cryptocurrencies.
Price of other crypto currencies: There are several cryptocurrencies available in the
market (Hayes 2017). The price of the different crypto currency is different (Li and Wang 2017).
It can be seen that the price of one type of crypto currency goes up and can affect the price of the

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other crypto currency. In this context the example of the bitcoin and the altcoins can be given
(Roja, Peevitha and Lakshmi 2018). The price of the bitcoin goes high and it affects the price of
altcoin by decreasing the value of the altcoin. This is because that the fund of the altcoins is
pushed for the bitcoin.
External Factors:
Acceptance of the cryptocurrency: The acceptance of the cryptocurrency has made the
devaluation of the traditional money (Hayes 2017). This raises the value of the different
cryptocurrencies.
Technical upgrade of the crypto software: The upgrade in the crypto software affect the
price of the crypto currencies in a significant way (Partanen 2018). In this context the example of
the Litecoin and the bitcoin can be taken. After the update of the crypto software SegWig the
LTC has experienced the increase in the rate of the price (Roja, Peevitha and Lakshmi 2018).
Bitcoin has also experienced the same thing which is increase the value in terms of price.
Evaluation of the crypto currencies by the government and the media. The evaluation and
the impression of the government and the media has certain affect on the pricing of the
cryptocurrency (Hayes 2017). In case, if the government and the media has the negative impact
on the evaluation of the crypto currency the price of the crypto currency may fall.
Block chain collaboration and the security of the crypto currencies: The collaboration of
the block chain technology has ceratinaffect on the pricing of the bitcoin. It can be said that the
proper use of the block chain technology can be helpful in maintaining the security of the bitcoin
technology (Roja, Peevitha and Lakshmi 2018). The secured way of the transaction for certain

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crypto currency will help to gain the positive impact and will be beneficial for the enhancement
of the value of the respective cryptocurrency.
Types of crypto currency:
In general there are three type of crypto currencies- the first ever cryptocurrency was
bitcoin which used block chain for maintain the ledger and the security. After the bitcoin the
new block chains are created named altcoins. Some of the examples of the altcoin are
NEO,Litecoin (Roja, Peevitha and Lakshmi 2018). The third main type of the crypto currency is
tokens or dApps. Some of the examples of tokens or dApp are Civic, BitDegree and Wepower.

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References
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incentive-compatible cryptocurrency based on permissionless byzantine
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Akira, S., 2018. Cryptocurrency Investment Strategy: How To Get Rich With
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Hayes, A.S., 2017. Cryptocurrency value formation: An empirical study leading to a cost
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Kim, Y.B., Kim, J.G., Kim, W., Im, J.H., Kim, T.H., Kang, S.J. and Kim, C.H., 2016.
Predicting fluctuations in cryptocurrency transactions based on user comments and
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Li, X. and Wang, C.A., 2017. The technology and economic determinants of
cryptocurrency exchange rates: The case of Bitcoin. Decision Support Systems, 95,
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Partanen, C., 2018. The viability of cryptocurrency in relation to the response of financial
institutions and governments.
Roja, R., Peevitha, B. and Lakshmi, A.B., 2018. Cryptocurrency Exchange Interface
Platform that Translate Human to Robotic Intelligence.
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