Implications of Cryptocurrency: A New Business Proposition of Today's Entrepreneurial Horizon
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The study explores the present scenario of the cryptocurrency business in India, with a focus on Bitcoin. It examines the business prospects of Bitcoin cryptocurrency business in India and whether India is ready for the changing form of new currency business. The study uses statistical techniques to find out the recent trends, yearly return on investment ratio, and future scope of the cryptocurrency business in India. A SWOT analysis is also done to identify the overall working mechanism of the new business proposition in today's entrepreneurial horizon from the Indian context.
Implications of Cryptocurrency: A New Business Proposition of Today's Entrepreneurial Horizon
Write a 2000-word proposal on risk and crisis management in the context of the Hospitality and Tourism industries, considering legal, financial, ethical, environmental, and sociocultural impacts.
Added on 2022-10-19
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ABSTRACT
IJRTBT IMPLICATIONS OF CRYPTOCURRENCY: A NEW BUSINESS
PROPOSITION OF TODAY'S ENTREPRENEURIAL HORIZON
Institute of Management Study, Maulana Abul Kalam Azad University of Technology, West Bengal, India.
*Corresponding Author's Email: snigdhabasu13@gmail.com
International Journal on Recent Trends in Business and Tourism | Vol. 2 (3) 2018 | 64JULY
Cryptocurrency is in a unique position as a forerunner in a possibly transformative technology to long
standing financial systems. Businesses are beginning to see the value in using cryptocurrencies for
international transactions, especially when transactions need to occur quickly in response to an emergency.
We live in a world where everything around us is becoming digital. Along with the digitalization, money and
investment are getting digitalized too. Crypto currency is the new concept of money and can be termed as
digital currency in which encryption techniques are used to regulate the generation of units of currency and
verify the transfer of funds, operating independently of a central bank. There are approximately 1300 other
crypto currencies that exist in the digital currency market such as Ethereum, Ripple, NEM, Lit coin etc.
Whereas bit coins are the most sought after Crypto currency in the market. Eight years since its introduction,
bitcoin is today the most widely used and accepted digital currency. Pricing in bitcoin transactions is demand
based, it is exceptionally volatile. Volumes of trading happen every second. The price of a bitcoin is largely
dependent on the trading i.e. demand and supply factors. In the present study the primary objective is to find
out the present scenario of the crypto currency business in India. It also studies the business prospect of
bitcoins crypto currency business in India and to look out if India is ready for the changing form of new
currency business. To fulfill the objectives of the study relevant statistical techniques will be used to find out
the recent trends. Yearly return on investment ratio and future scope of the crypto currency business in India
with special reference to bitcoins will be examined in the recent article. A much-focused SWOT analysis will
also to be done to identify the overall working mechanism of the new business proposition in the today's
entrepreneurial horizon from Indian context.
Keywords: Virtual Currency, Crypto Graph, SWOT Analysis, Bitcoin Exchanges, Block Chain, Trends
INTRODUCTION
A crypto currency is a digital or virtual currency that
uses cryptography for security. They are disruptive
economic innovations that have the potential to
revolutionize the current economic structure and
change how banks and financial institutions are
operating now. If compared with current traditional fiat
currency system a cryptocurrency is far more efficient
in terms of usage and transaction cost. The first
Cryptocurrency to begin trading was Bitcoin back in
2009. Cryptocurrency is not only a virtual money or
transaction system, but it is also the monetary aspect
that is just the tip of an iceberg. Cryptocurrencies are
based on block chain technology. The public ledger, or
block chain, means that every user can see every
transaction. By using a cryptocurrency, users can
exchange value digitally without third party oversight.
Cryptocurrency works on the theory of solving
encrypted algorithms to create unique hashes that are
finite in number. Also, according to Oza & Mandhanya,
(2017) the results generated from the change
management of the banking sector could be utilized by
the policy makers, management/owners of banks,
employees and employers for refining the overall
management of this industry which will profit all the
Snigdha Basu*, Tapash Ranjan Saha, Swapan Kumar Maity
people directly or indirectly.
A. Classification
There are hundreds of virtual currencies in the market.
The leaders of virtual currency world can be classified
into four major categories.
a. Bitcoin
It is first widely accepted virtual currency, being a
trendsetter, it had opened the door of cryptocurrency in
the global economic market.
b. Ethereum
After Bitcoin, second most popular currency is
Ethereum, launched back in 2015.
c. Litecoin
Litecoin secured third ranking in the crypto market in
terms of acceptance. It has been launched in 2011 and
uses the same fundamental structure as bitcoin
therefore often referred as 'silver to bitcoin's gold'.
d. Ripple
Ripple works on consensus ledger which does not need
mining process to be involved, reducing utilization of
computing power and network latency.
IJRTBT IMPLICATIONS OF CRYPTOCURRENCY: A NEW BUSINESS
PROPOSITION OF TODAY'S ENTREPRENEURIAL HORIZON
Institute of Management Study, Maulana Abul Kalam Azad University of Technology, West Bengal, India.
*Corresponding Author's Email: snigdhabasu13@gmail.com
International Journal on Recent Trends in Business and Tourism | Vol. 2 (3) 2018 | 64JULY
Cryptocurrency is in a unique position as a forerunner in a possibly transformative technology to long
standing financial systems. Businesses are beginning to see the value in using cryptocurrencies for
international transactions, especially when transactions need to occur quickly in response to an emergency.
We live in a world where everything around us is becoming digital. Along with the digitalization, money and
investment are getting digitalized too. Crypto currency is the new concept of money and can be termed as
digital currency in which encryption techniques are used to regulate the generation of units of currency and
verify the transfer of funds, operating independently of a central bank. There are approximately 1300 other
crypto currencies that exist in the digital currency market such as Ethereum, Ripple, NEM, Lit coin etc.
Whereas bit coins are the most sought after Crypto currency in the market. Eight years since its introduction,
bitcoin is today the most widely used and accepted digital currency. Pricing in bitcoin transactions is demand
based, it is exceptionally volatile. Volumes of trading happen every second. The price of a bitcoin is largely
dependent on the trading i.e. demand and supply factors. In the present study the primary objective is to find
out the present scenario of the crypto currency business in India. It also studies the business prospect of
bitcoins crypto currency business in India and to look out if India is ready for the changing form of new
currency business. To fulfill the objectives of the study relevant statistical techniques will be used to find out
the recent trends. Yearly return on investment ratio and future scope of the crypto currency business in India
with special reference to bitcoins will be examined in the recent article. A much-focused SWOT analysis will
also to be done to identify the overall working mechanism of the new business proposition in the today's
entrepreneurial horizon from Indian context.
Keywords: Virtual Currency, Crypto Graph, SWOT Analysis, Bitcoin Exchanges, Block Chain, Trends
INTRODUCTION
A crypto currency is a digital or virtual currency that
uses cryptography for security. They are disruptive
economic innovations that have the potential to
revolutionize the current economic structure and
change how banks and financial institutions are
operating now. If compared with current traditional fiat
currency system a cryptocurrency is far more efficient
in terms of usage and transaction cost. The first
Cryptocurrency to begin trading was Bitcoin back in
2009. Cryptocurrency is not only a virtual money or
transaction system, but it is also the monetary aspect
that is just the tip of an iceberg. Cryptocurrencies are
based on block chain technology. The public ledger, or
block chain, means that every user can see every
transaction. By using a cryptocurrency, users can
exchange value digitally without third party oversight.
Cryptocurrency works on the theory of solving
encrypted algorithms to create unique hashes that are
finite in number. Also, according to Oza & Mandhanya,
(2017) the results generated from the change
management of the banking sector could be utilized by
the policy makers, management/owners of banks,
employees and employers for refining the overall
management of this industry which will profit all the
Snigdha Basu*, Tapash Ranjan Saha, Swapan Kumar Maity
people directly or indirectly.
A. Classification
There are hundreds of virtual currencies in the market.
The leaders of virtual currency world can be classified
into four major categories.
a. Bitcoin
It is first widely accepted virtual currency, being a
trendsetter, it had opened the door of cryptocurrency in
the global economic market.
b. Ethereum
After Bitcoin, second most popular currency is
Ethereum, launched back in 2015.
c. Litecoin
Litecoin secured third ranking in the crypto market in
terms of acceptance. It has been launched in 2011 and
uses the same fundamental structure as bitcoin
therefore often referred as 'silver to bitcoin's gold'.
d. Ripple
Ripple works on consensus ledger which does not need
mining process to be involved, reducing utilization of
computing power and network latency.
IJRTBT IMPLICATIONS OF CRYPTOCURRENCY
65 | Vol. 2 (3) 2018 | International Journal on Recent Trends in Business and TourismJULY
Few examples of various Crypto currencies:
1) Currency token- A token pegged officially on the
Japanese Yen. J-COIN
2) Utility token- Decentralized one that runs smart
contracts. - ETHEREUM
3) Membership token- It is a decentralized cloud
storage platform that allows anyone to rent their idle
hard drive space to earn revenue. - STORJ
4) Security token- It is an investment fund designed
to invest in block chain markets. -TaaS.
B. How are they created
With paper money government decides when to supply,
print and distribute the money in the economy. But
cryptocurrencies do not have a central government. It is
not issued by any central authority.
C. The King of the Cryptocurrencies-Bitcoins
A bitcoin is a virtual currency first introduced in the
year 2009 by an anonymous group called Satoshi
Nakamoto. Frank Holmes, the chief executive officer at
U.S. Global Investors said that the digital currency
market rose above $300 billion for the first time on
Sunday evening, according to industry website
(Amaro, 2017). It's a peer to peer crypto graphical
system where transactions happen through a public
ledger called Block Chain. It is a technology to transfer
and store data or information that is generated while
transacting it in a cryptocurrency.
Block Chain may be described as a tamper evident
ledger shared within a network of entities, where the
ledger holds a record of transactions between the
entities exploiting the cryptographic hash function. The
Bitcoin Block chain often referred to as the ledger of the
Bitcoin system.
Bitcoin mining is the process by which transactions are
verified and added to the public ledger, known as the
block chain, and the means through which new bitcoins
are released. Anyone with access to the internet and
suitable hardware can participate in mining.
A miner collects pending Bitcoin transactions, verifies
their legitimacy, and assembles them into what is
known as a 'block candidate.' The goal is to earn newly
created Bitcoin units through this activity. Bitcoin
mining is permission less. Anyone can become a miner
by downloading the respective software and the most
recent copy of the Bitcoin Block chain. The consensus
among miners is that every miner who receives a block
candidate with a valid fingerprint adds it to his or her
own copy of the Bitcoin Block chain.
Figure 1: Interdisciplinarity
D. Bitcoin Pricing
Pricing in bitcoin transactions is demand based,
exceptionally volatile. Volumes of trading happen
every second and largely depends on supply & demand
factors. More the demand, higher is the price. Price of
bitcoin in Indian cryptocurrency market has gained
remarkably. As per the statistics since 2009 till March
2017, the number of bitcoins circulation has not only
increased but reached to an all-time high 1,63,77,437 in
number. Bitcoin does not have intrinsic value like gold
in that case it cannot be used to make any physical
objects like jewelry that have value.
Bitcoin Exchanges
A bitcoin exchange is a platform that facilitates
exchange of bitcoins for another currency including fiat
currency, thereby allowing the users to trade and make
profit.
Service Provided by the Bitcoin Exchanges in India
Ø Storing bitcoin in a bitcoin wallet after deposit /
receipt of the same in the wallet.
Ø Exchange of bitcoin with other currency like a fiat
currency.
Ø A merchant gateway services used to pay to
merchants in bitcoins and acceptance by them
thereon.
Ø Mobile application providing ease of accessing
bitcoin wallets.
Ø Sending bitcoins stored in the wallet to another
wallet.
65 | Vol. 2 (3) 2018 | International Journal on Recent Trends in Business and TourismJULY
Few examples of various Crypto currencies:
1) Currency token- A token pegged officially on the
Japanese Yen. J-COIN
2) Utility token- Decentralized one that runs smart
contracts. - ETHEREUM
3) Membership token- It is a decentralized cloud
storage platform that allows anyone to rent their idle
hard drive space to earn revenue. - STORJ
4) Security token- It is an investment fund designed
to invest in block chain markets. -TaaS.
B. How are they created
With paper money government decides when to supply,
print and distribute the money in the economy. But
cryptocurrencies do not have a central government. It is
not issued by any central authority.
C. The King of the Cryptocurrencies-Bitcoins
A bitcoin is a virtual currency first introduced in the
year 2009 by an anonymous group called Satoshi
Nakamoto. Frank Holmes, the chief executive officer at
U.S. Global Investors said that the digital currency
market rose above $300 billion for the first time on
Sunday evening, according to industry website
(Amaro, 2017). It's a peer to peer crypto graphical
system where transactions happen through a public
ledger called Block Chain. It is a technology to transfer
and store data or information that is generated while
transacting it in a cryptocurrency.
Block Chain may be described as a tamper evident
ledger shared within a network of entities, where the
ledger holds a record of transactions between the
entities exploiting the cryptographic hash function. The
Bitcoin Block chain often referred to as the ledger of the
Bitcoin system.
Bitcoin mining is the process by which transactions are
verified and added to the public ledger, known as the
block chain, and the means through which new bitcoins
are released. Anyone with access to the internet and
suitable hardware can participate in mining.
A miner collects pending Bitcoin transactions, verifies
their legitimacy, and assembles them into what is
known as a 'block candidate.' The goal is to earn newly
created Bitcoin units through this activity. Bitcoin
mining is permission less. Anyone can become a miner
by downloading the respective software and the most
recent copy of the Bitcoin Block chain. The consensus
among miners is that every miner who receives a block
candidate with a valid fingerprint adds it to his or her
own copy of the Bitcoin Block chain.
Figure 1: Interdisciplinarity
D. Bitcoin Pricing
Pricing in bitcoin transactions is demand based,
exceptionally volatile. Volumes of trading happen
every second and largely depends on supply & demand
factors. More the demand, higher is the price. Price of
bitcoin in Indian cryptocurrency market has gained
remarkably. As per the statistics since 2009 till March
2017, the number of bitcoins circulation has not only
increased but reached to an all-time high 1,63,77,437 in
number. Bitcoin does not have intrinsic value like gold
in that case it cannot be used to make any physical
objects like jewelry that have value.
Bitcoin Exchanges
A bitcoin exchange is a platform that facilitates
exchange of bitcoins for another currency including fiat
currency, thereby allowing the users to trade and make
profit.
Service Provided by the Bitcoin Exchanges in India
Ø Storing bitcoin in a bitcoin wallet after deposit /
receipt of the same in the wallet.
Ø Exchange of bitcoin with other currency like a fiat
currency.
Ø A merchant gateway services used to pay to
merchants in bitcoins and acceptance by them
thereon.
Ø Mobile application providing ease of accessing
bitcoin wallets.
Ø Sending bitcoins stored in the wallet to another
wallet.
IJRTBTIMPLICATIONS OF CRYPTOCURRENCY
International Journal on Recent Trends in Business and Tourism | Vol. 2 (3) 2018 | 66JULY
Table 1: List of Major Bitcoin Exchanges in India
NAME OF THE
EXCHANGES
DATE OF
FORMATION
LOCATIONS
Coin secure 2014 Delhi, India
Bitxoxo 2016 Warangal, Tela ngana, India
Unocoin 2015 Bengaluru, Karnataka, India
ZebPay 2015 Ahmedabad, GJ, India
Bitcoin India 2014 Hyderabad, Telangana, India
LITERATURE REVIEW
Related Work
Kelly (2014) valued the existence for bitcoin because
its users have trust that if they accept it as payment, they
could use it elsewhere to purchase something they want
or need.
Desjardins (2016) stated that due to the limited number
of bitcoins, it will never become inflated from an
overabundance of bitcoins. Also, bitcoin and other
cryptocurrencies are generally regarded as being
protected from inflation originating from national
government changes or restrictions (Magro, 2016).
This creates a 'haven' for investors to put their wealth
into, as it generally does not lose value based on
inflation. The combination of demand for a haven
option and its price volatility helped Bitcoin to become
the best performing currency of 2015 using the US
Dollar Index. A haven is an investment that is expected
to retain or increase in value during times of market
turbulence. Safe havens are sought by investors to limit
their exposure to losses in the event of market
downturns.
South America has seen a huge increase in bitcoin
transactions, increasing to 510% from 2014 to 2015
(Bitcoin: A New Global Economy, 2015).
According to Magro (2016) Argentina is a hotbed for
increased cryptocurrency usage due to its extremely
high Inflation rate and high population of unbanked
citizens.
The public block chain is shared with all users, which
means that it is susceptible to attacks due to easy access
(King, Williams & Yanofsky, 2013).
As per the reports of (Pricewaterhouse Coopers Report,
2015) price volatility generates risk, which discourages
both merchants and consumers from holding
cryptocurrency for any significant length of time. In
general, online shopping for individuals accounted for
nearly 23 percent of transactions processed by BitPay
in the second quarter of 2015.
Kasiyanto (2016) explained that cryptocurrency has the
advantage over traditional card-based for the vendor in
that it eliminates those fees.
According to Reuters (2016) cryptocurrencies could
potentially become a big player in the commodity
market. They have a unique attribute of being
purchased through a direct online mechanism, which
creates easy entry for buyers. If bitcoin continues to be a
valid refuge for inflating currencies, it will gain validity
to investors and push deeper into becoming more
mainstream.
Objectives of the Study
q To explore the cryptocurrency business scenario in
India with special reference to bitcoin business for
the last five years' time frame.
q To fit a trend equation to forecast the Bitcoin prices.
q To examine the regulatory status of the Virtual
Currency business in India.
q To design a SWOT analysis framework to find the
issues concern.
RESEARCH METHODOLOGY
Data sources: All the secondary data (such as opening
& closing price per day, market capitalization, trade
volume, no. of coins in etc.) taken from various online
sources.
Date period: Daily data ranging from the period of
March 2014 to March 2018.
Data type: Secondary data collected (Amaro, 2017;
Kelly, 2014)
Tools for analysis: MS-Excel.
This paper attempts to find the trend line based on the
market capitalization for the last five years in bitcoin
2
business. Based on the highest R value, best fitted
trend line & the equation for the trends was derived.
RESULTS
Market capitalization or market cap is the aggregate
valuation of a company based on its current share price
and the total number of outstanding shares. In case of
cryptocurrency sector, market cap is used to determine
the relative size of a digital currency or of all the digital
currencies combined. The cryptocurrency market cap is
calculated by multiplying the price by the circulating
supply. Market cap=cryptocurrency price X
cryptocurrency circulating supply.
International Journal on Recent Trends in Business and Tourism | Vol. 2 (3) 2018 | 66JULY
Table 1: List of Major Bitcoin Exchanges in India
NAME OF THE
EXCHANGES
DATE OF
FORMATION
LOCATIONS
Coin secure 2014 Delhi, India
Bitxoxo 2016 Warangal, Tela ngana, India
Unocoin 2015 Bengaluru, Karnataka, India
ZebPay 2015 Ahmedabad, GJ, India
Bitcoin India 2014 Hyderabad, Telangana, India
LITERATURE REVIEW
Related Work
Kelly (2014) valued the existence for bitcoin because
its users have trust that if they accept it as payment, they
could use it elsewhere to purchase something they want
or need.
Desjardins (2016) stated that due to the limited number
of bitcoins, it will never become inflated from an
overabundance of bitcoins. Also, bitcoin and other
cryptocurrencies are generally regarded as being
protected from inflation originating from national
government changes or restrictions (Magro, 2016).
This creates a 'haven' for investors to put their wealth
into, as it generally does not lose value based on
inflation. The combination of demand for a haven
option and its price volatility helped Bitcoin to become
the best performing currency of 2015 using the US
Dollar Index. A haven is an investment that is expected
to retain or increase in value during times of market
turbulence. Safe havens are sought by investors to limit
their exposure to losses in the event of market
downturns.
South America has seen a huge increase in bitcoin
transactions, increasing to 510% from 2014 to 2015
(Bitcoin: A New Global Economy, 2015).
According to Magro (2016) Argentina is a hotbed for
increased cryptocurrency usage due to its extremely
high Inflation rate and high population of unbanked
citizens.
The public block chain is shared with all users, which
means that it is susceptible to attacks due to easy access
(King, Williams & Yanofsky, 2013).
As per the reports of (Pricewaterhouse Coopers Report,
2015) price volatility generates risk, which discourages
both merchants and consumers from holding
cryptocurrency for any significant length of time. In
general, online shopping for individuals accounted for
nearly 23 percent of transactions processed by BitPay
in the second quarter of 2015.
Kasiyanto (2016) explained that cryptocurrency has the
advantage over traditional card-based for the vendor in
that it eliminates those fees.
According to Reuters (2016) cryptocurrencies could
potentially become a big player in the commodity
market. They have a unique attribute of being
purchased through a direct online mechanism, which
creates easy entry for buyers. If bitcoin continues to be a
valid refuge for inflating currencies, it will gain validity
to investors and push deeper into becoming more
mainstream.
Objectives of the Study
q To explore the cryptocurrency business scenario in
India with special reference to bitcoin business for
the last five years' time frame.
q To fit a trend equation to forecast the Bitcoin prices.
q To examine the regulatory status of the Virtual
Currency business in India.
q To design a SWOT analysis framework to find the
issues concern.
RESEARCH METHODOLOGY
Data sources: All the secondary data (such as opening
& closing price per day, market capitalization, trade
volume, no. of coins in etc.) taken from various online
sources.
Date period: Daily data ranging from the period of
March 2014 to March 2018.
Data type: Secondary data collected (Amaro, 2017;
Kelly, 2014)
Tools for analysis: MS-Excel.
This paper attempts to find the trend line based on the
market capitalization for the last five years in bitcoin
2
business. Based on the highest R value, best fitted
trend line & the equation for the trends was derived.
RESULTS
Market capitalization or market cap is the aggregate
valuation of a company based on its current share price
and the total number of outstanding shares. In case of
cryptocurrency sector, market cap is used to determine
the relative size of a digital currency or of all the digital
currencies combined. The cryptocurrency market cap is
calculated by multiplying the price by the circulating
supply. Market cap=cryptocurrency price X
cryptocurrency circulating supply.
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