Cryptocurrency: A Brief Overview and Impact on the Economy

This research project includes all the required details and reports about cryptocurrency. It provides a brief overview of cryptocurrency, its importance, and its impact on the economy. The findings highlight the positive impact of cryptocurrency on society and the challenges faced by Bitcoin. The research also discusses the acceptance of cryptocurrency and the verification of transactions.

MANAGEMENT
ACCOUNTING
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EXECUTIVE SUMMARY
This research project includes all the required details and reports about the cryptocurrency. The
following assignment is prepared with all the requisite information related to cryptocurrency.
What is the cryptocurrency? What is the importance of cryptocurrency? and what roles does
cryptocurrency play? answer to all these questions is briefly described and given in this research.
The word crypto is derived from Greek origin that means hidden or secret. The word currency is
generally used in a particular country in terms of money. Thus the word cryptocurrency is
combined of two words crypto and currency. The term cryptocurrency is defined as the digital
currency which is used as a medium of exchange for the generation of currencies and certify
fund transferring. The cryptocurrency has had a great impact on the economy. The following
given research briefly explains the objective, the methodology and the findings of the topic
cryptocurrency. The findings that are the conclusion and literature part we get from this topic and
methodology will be briefly explained below, along with these the conclusion of this research is
also given below. The following given data and source is accurate and realistic. There are many
types of cryptocurrency that are shown below other than Bitcoin. The types of crypto currencies
are:
 Lit coin (LTC)
 Dash (DASH)
 NEO (NEO)
 EOS (EOS)
 Cardano (ADA)
And other than this there are many types of different cryptocurrency. The cryptocurrency play a
vital role as they use encryption techniques for different kind works. The cryptocurrency are
tokens and coins in a digital form and they also have a physical existence like credit cards, and
more. The transactions done in the cryptocurrency are very safe and secured; all the transactions
done here are encrypted and safe. the cryptocurrency is also known as a digital asset. All the
topics and points mentioned above will be briefly discussed in the following research and there
problems and results will also be given below.
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Contents
EXECUTIVE SUMMARY.............................................................................................................2
Contents...........................................................................................................................................3
INTRODUCTION/ BACKGROUND.............................................................................................4
SCOPE OF STUDY.....................................................................................................................5
METHODOLOGY.......................................................................................................................7
FINDINGS...................................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
Appendix........................................................................................................................................13
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INTRODUCTION/ BACKGROUND
The term cryptocurrency is defined as the digital form of any coin or token that is used as a
medium of exchange to certify the transactions of funds for a central bank. the cryptocurrency is
a digital asset for anyone, cryptocurrency uses encrypted techniques to keep the transactions
safer and secure. The crypto currency plays a vital role in the economy as it is an important and
good source of investors who want to invest a small amount or large amount. The cryptocurrency
is important in different ways. People can trust cryptocurrency blindfolded. These are one of the
safest kind of transactions, and also doesn't bind people at one place. While talking about
cryptocurrency people don't really need to involve or contact any third party, people can just
directly visit cryptocurrency and buy or sell what they want, this procedure skips the middleman.
The cryptocurrencies are the cheap means of transaction as you do not need to spend or invest a
lot of money anyway; you just need some basic knowledge about them and a network with cell
or computers. Cryptocurrency is the safest means to keep the money and investments secure, you
can store your currencies for later and also buy them at any time. The term cryptocurrency is
outlined because of the digital variety of any coin or token that's used as a medium of exchange
to certify the transactions of funds for a financial institution. thecryptocurrency is Associate in
Nursing digital quality for anyone, cryptocurrency uses encrypted techniques to stay the
transactions safer and secure. The cryptocurrency plays a significant role within the economy
because it is a very important and sensible supply of investors WHO wish to speculate a little
quantity or great amount.
OBJECTIVE:
Objectives of this research are as follows:
 Meaning of cryptocurrency
 Role of cryptocurrency
 Importance of cryptocurrency
 Impact of cryptocurrency
 History of cryptocurrency
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SCOPE OF STUDY
According to Swartz, 2018 the alternatives to money, credit cards and checks nowadays is the
cryptocurrency, the 3rd party like banks and other institutions are skipped as you can directly
transfer your money or any other source of investment to anyone at any time sitting at one place.
The cryptocurrency are just like the virtual accounts which keep a record of all transactions and
for this, you do not even need to keep any collateral security or do not need any credit points or
score. The cryptocurrency has many exciting policies and which even help people to send money
to their family members without charging any fee. The most leading and trending cryptocurrency
these days is, of course, the Bitcoin, but it doesn't end up here there is many more cryptocurrency
which have been leading on a good position like Dash coin (DASH), Ethereum (ETH), Ripple
(XRP) and the Litecoin (LTC). In the end, cryptocurrency is a virtual asset as a medium of
exchange with the fullest encryption which keeps the transactions safe and secure.
Figure: Charts of Ethereum
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Figure: Dash Charts
According to Phillips and Gorse 2018, in the 90's technological boom there were a lot of failures
and a lot of unsuccessful attempts to bring the digital currency, some of the examples were
digital cash, Beenz and more. All these failures had different reasons some had fraudulent
activities some had a lot of manipulation and others had a different kind of technical issues and
errors. Then after some time in 2009 a guy Satoshi Nakamoto invented Bitcoin, every person had
to see and complete his own job here as there was no decentralization; this digital form of
currency worked and is still leading its quality.
The importance of cryptocurrency is that it is the safest kind of digital asset, it skips the third
person, it is the cheapest means of transaction, some people believe in keeping their accountings
their investments and transactions private they do not want to share and the cryptocurrency helps
in maintaining the privacy of each and every transaction. The freedom of amount you want to
invest is totally up to the person who is investing, there are no limits of investing. Any kind of
fee, commission or mediator money is not required and you save a lot through this.
At some time telegram was one of the most used and renowned way of networks to send any
messages, but it took too long to send a small message to anyone, the process of sending a
telegram was so long that it included three to four mediators and the telegram reached in three to
four days, and to complete this process a person needed to pay a lot of money to different people.
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Hence in this environment lightning network became mandatory through which you could easily
get connected to your friends family or any other person. You could even make payments in just
one go (Poon and Dryja, 2017). This network is so fast as it is directly between two people it
became the fastest network to contact and make payments to anyone and as there are no
mediators the fees was either negligible or non existing.
METHODOLOGY
The methodology is of different types like types of source that is Primary sources or secondary
sources. There are two types of methodology the qualitative and the quantitative, the qualitative
methodology shows the theory based and fact-based research while the quantitative shows the
practical, accurate and exact figures of the research. The primary data means that data which is
accurately collected by me from the exact resource and the secondary data is collected from the
resources already available and already taken from the exact source. In my research, I have
taken the secondary source of data from different articles and journals. I have shown all the
qualitative facts about this research. This research project is being accomplished with the help of
all kind of secondary data and different kinds of journals (Catania, Grassi, and Ravazzolo, 2018).
The examples of the secondary data are mentioned in the reference list below.
There are two types of qualitative and quantitative methodology, the qualitative methodology
shows the theory-based and fact-based research, while the quantitative shows the research's
practical, accurate and accurate figures. The primary data means that data collected accurately by
myself from the exact resource and the secondary data are collected from the available resources
(Linton, et. al., 2017).
FINDINGS
The crypto-currency has a great impact on the economy and has influenced the people a lot to
use this new technology. This technology has become an eye-catcher for the audience, the
cryptocurrency and Bitcoin have gained a lot of public attention. This technology has a good
magnetic power to attract people as it has made it easy to make money from home, today each
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and every person who has good and basic knowledge about computers, cell phones, and
cryptocurrency and has an internet network use this technology very well and get a lot of benefit
from it (Potekhina and Riumkin, 2017)
People had different views about this technology some thought it was the best technology ever to
earn money by sitting home and some other people thought it was an absolute waste of time and
nothing else. These different views and volatile nature of different people made each and every
person curious about this. People in society started using this technology and got benefited by the
same. This was the impact of cryptocurrency on society (Krafft, Della Penna, and Pentland,
2018).
The transactions that were done through Bitcoin were very encrypted and safe. the privacy was
maintained for the same transactions, and there was no fees or negligible fees to be paid for the
transactions even when you transferred money to your wallet non existing fees was to be paid.
Since your cryptocurrency does not transfer your money to your cards or any other wallets you
are safe to keep you essential or important information with you. People get guarantee and
assurance from this cryptocurrency due to which these lead for investment today and in the
future (Corbet, et. al., 2018).
The cryptocurrency has a great economic impact and has greatly influenced people to use this
new technology. This technology has become an eye-catcher for the audience, a lot of public
attention has been given to the cryptocurrency and Bitcoin. This technology has a good magnetic
power to attract people because it has made it easy to make money from home, everybody who
has a good one today (Potekhin and Riumkin, 2017).
DIFFICULTIES FACED BY THE BITCOIN
 Security and reliability: The biggest hurdle of Bit coin and crypto currency was its
safety and reliability. As the criminals and hackers both used these source due to the
decentralized policies, this made people uncomfortable of using them and they could not
rely on their safety and security, in the year 2014 almost 69 million dollars were hacked
by MT. Gox which made almost bankruptcy (Katsiampa, 2017). Yet Bitcoin did not lose
its reputation and paid back all of the people who were hacked in this tragedy. Due to
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this, some people did not lose their hope and confidence in Bitcoin. This was one of the
focused and eye catchy hurdle of Bitcoin and cryptocurrency.
 Denied by the government: This concept was not understandable by the world’s
government and many other common people which made it difficult for the Bitcoin and
cryptocurrency to get the license and work all over the world. This hurdle was the biggest
hurdle as it would stop the use of cryptocurrency and digital money in all the world. In
recent years the US government and security forces rejected the proposal and denied the
license of Bitcoin to do any funding Based work on the digital currency which made the
Bitcoin difficult to work on its projects and expand there (Sapovadia, 2015).
 The competitors and failures: The Bit-coin made itself so strong and bold in front of its
competitors which lead the Bitcoin to come over by a 100% rise in shares, but from past
one year it has lost reputation and workings in the society that its shares have come down
by 50 percent to 85 percent. This was the rise of rivals in the life of Bit-coin and crypto
currency (Aste, Tasca, and Di Matteo, 2017).
 The challenging 2017: In early 2017, most of the companies came up together so that to
approve the transactions from the Bitcoin but yet were not able to do anything till now
and the results have not been felt till now (Hileman and Rauchs, 2017).
THE IMPACT OF BITCOIN ON THE REAL WORLD
There was a good impact on the world and bad too of Bitcoin and cryptocurrency some of these
impacts are mentioned as follows:
 The market capitalization and more of trading volume: The crypto currency and Bit
coin got all the focus and market capitalization due to first come and first serve basis now
any other kind of digital money may not set its reputation and will not be able to spread
this large market hence the cryptocurrency was benefited due to market capitalization and
daily trading (Chuen, 2015).
 Acceptance of crypto-currency: As any other form of digital marketing would not be
supported and accepted by the retailers and other businessmen the cryptocurrency and
Bitcoin were highly benefited as people had slowly started accepting those and now it is
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leading in all the ways. Most of the businessmen would not accept any other digital
currency as they did not even accept the Bitcoin early but due to its wide uses, they had
to accept it from the general public (Inshyn, Mohilevskyi, and Drozd, 2018).
 Verification of transactions: The verification of the transaction by the “proof of stake”
method was easily accepted as it did not take much time and hence it was very much
helpful to the Bitcoin to be accepted and give proofs of all the transactions.
CONCLUSION
It is hereby concluded that the Bitcoin had a great impact on the society even after facing so
many difficulties Bitcoin is still leading in the world. This research profs that Bitcoin has
attracted the audience towards itself and is the best way to earn money from home. Bitcoin faced
hurdles in the past but now it has improved itself to an extent that every can trust Bitcoin
blindfold. It is the most secured and safe ways to transact.
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REFERENCES
Andrianto, Y. and Diputra, Y., 2017. The effect of cryptocurrency on investment portfolio
effectiveness. Journal of Finance and Accounting, 5(6), pp.229-238.
Aste, T., Tasca, P. and Di Matteo, T., 2017. Blockchain technologies: The foreseeable impact on
society and industry. Computer, 50(9), pp.18-28.
Catania, L., Grassi, S. and Ravazzolo, F., 2018. Predicting the volatility of cryptocurrency time-
series. In Mathematical and Statistical Methods for Actuarial Sciences and Finance (pp. 203-
207). Springer, Cham.
Chuen, D.L.K. ed., 2015. Handbook of digital currency: Bitcoin, innovation, financial
instruments, and big data. Academic Press..
Corbet, S., Lucey, B., Peat, M. and Vigne, S., 2018. Bitcoin Futures—What use are
they?. Economics Letters, 172, pp.23-27.
Hileman, G. and Rauchs, M., 2017. Global cryptocurrency benchmarking study. Cambridge
Centre for Alternative Finance, 33.
Inshyn, M., Mohilevskyi, L. and Drozd, O., 2018. The issue of cryptocurrency legal regulation in
Ukraine and all over the world: a comparative analysis. Baltic Journal of Economic Studies, 4(1),
pp.169-174.
Katsiampa, P., 2017. Volatility estimation for Bitcoin: A comparison of GARCH
models. Economics Letters, 158, pp.3-6.
Krafft, P.M., Della Penna, N., and Pentland, A.S., 2018, April. An experimental study of
cryptocurrency market dynamics. In Proceedings of the 2018 CHI Conference on Human
Factors in Computing Systems (p. 605). ACM.
Linton, M., Teo, E.G.S., Bommes, E., Chen, C.Y. and Härdle, W.K., 2017. Dynamic topic
modeling for cryptocurrency community forums. Applied Quantitative Finance (pp. 355-372).
Springer, Berlin, Heidelberg.
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Phillips, R.C., and Gorse, D., 2018. Cryptocurrency price drivers: Wavelet coherence analysis
revisited. PloS one, 13(4), p.e0195200.
Poon, J. and Dryja, T., 2017. The bitcoin lightning network: Scalable off-chain instant payments.
Potekhina, A. and Riumkin, I., 2017. Blockchain–a new accounting paradigm: Implications for
credit risk management.
Sapovadia, V., 2015. Legal Issues in Cryptocurrency. In Handbook of Digital Currency (pp. 253-
266). Academic Press.
Swartz, L., 2018. What was Bitcoin, what will it be? The techno-economic imaginaries of a new
money technology. Cultural Studies, 32(4), pp.623-650.
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Appendix
1. Ripple (XRP Charts)
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2. Litecoin
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3. Ethereum
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4. Dash
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