BITCOIN AS REAL MONEY: A STATISTICAL APPROACH RESEARCH PROJECT

This project undertakes a comprehensive statistical analysis of Bitcoin, examining its viability as a real currency. The research investigates the relationship between Bitcoin's price and the value of the USD, the rate at which new cryptocurrencies are introduced, and trends in Bitcoin transactions, which reflect the activity of mining firms. The study also explores the correlation between Bitcoin's price and the number of vendors accepting it, along with the impact of inflation on its value. The project aims to provide a broad understanding of Bitcoin and its trends, offering insights into its potential as a payment method and investment, considering factors like the increasing demand, the growth of mining firms, and the role of regulations. The research utilizes statistical tools to analyze data and address key research questions related to Bitcoin's performance and its influencing factors.

BITCOIN AS A REAL MONEY: A
STATISTICAL APPROACH

ACKNOWLEDGEMENT
I am grateful to all people who gave me huge support and suggestions in respect to completion of
research study which is based on factors affecting Bitcoin price. I am thankful to my mentor who
teach me lots of ways by following which disseration can be prepared in better way. Without
support of mentor it was not possible for me to carry out this research study to final stage.
Finally, I am greateful to all those that support me in completion of my work.

ABSTRACT
Current research study is based on Bitcoin which is one of well known crypto currency and is
used at wide level. Present research is focusing on identifying various variables that have impact
on Bitcoin in terms of price. It is identified on analysis of results that price of Bitcoin is affected
by value of USD. Number of vendors, people doing trasactions and inflation also have impact
on Bitcoin. Thus, after considering number of factors investment must be made in Bitcoin. It is
also identified that in upcoming time period demand of Bitcoin will increase and along with this,
number of mining firms will enhanced. Thus, it can be said that more and more use of Bitcoin
will takes place for making transactions.

TABLE OF CONTENTS
ACKNOWLEDGEMENT...............................................................................................................2
ABSTRACT....................................................................................................................................3
CHAPTER1:INTRODUCTION......................................................................................................1
1.1 Background of study..............................................................................................................1
1.2 Problem statement.................................................................................................................2
1.3 Research questions.................................................................................................................2
1.4 Research aims and objectives................................................................................................3
1.5 Rationale of study..................................................................................................................3
1.6 Significence of research study...............................................................................................4
1.7 Strcuture of report..................................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................7
2.1Theoritical framework............................................................................................................7
2.2.2 List of cyptocurrencies introduced...................................................................................10
2.2.3 To identify trends in number of transaction of Bitcoin which will reflect number of
mining firms increase or decrease across the globe...................................................................13
2.2.4 Relationship between price of bitcoin and vendors..........................................................17
2.2.5 Inflation and bitcoin price.................................................................................................18
CHAPTER 3:RESEARCH METHODOLOGY............................................................................26
3.1 Research introduction..........................................................................................................26
3.2 Research design...................................................................................................................26
3.3 Research approach...............................................................................................................27
3.4 Research philosophy............................................................................................................27
3.5 Data collection.....................................................................................................................28
3.6 Data analysis........................................................................................................................28

3.7 Research limitation..............................................................................................................29
3.8 Ethical considerations..........................................................................................................30
CHAPTER 4: DATA ANALYSIS SECTION..............................................................................31
To identify relationship between Bitcoin and USD...................................................................31
Identifying number of cryptocurrencies introducted.................................................................37
To identify number of transaction of Bitcoin which will reflect number of mining firms........38
To identify relationship between inflation and price of Bitcoin................................................40
CHAPTER 5: DISCUSSION........................................................................................................43
CHAPTER 6: CONCLUSION......................................................................................................47
REFERENCES..............................................................................................................................50

CHAPTER1:INTRODUCTION
1.1 Background of study
Technology is evolving at rapid pace across the globe. In past few years lots of work is done on development of technology.
Bitcoin is one of the electrtonic currency that is used at wide scale across the globe. Before going in to deep research on Bitcon it is
necessary to develop broad understanding about same. Under this electronic mode of payment online currency is issued that remain
in our account. Online payments are made by the business firm 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 are those
entitiesd that enter in to network and try to develop block of bitcoin . In this regard they needs do 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 then threshold value one can successfully build a block and add same to the block chain. Block basically refers to the
vector which contains list of the current transactions that are done by the people through Bitcoin ( What is Crypto currency
everything you need to know, 2017). Miners verify the transactions that are covered in block and in return receive bitcoin’s and
transaction fee which is their income. This is the entire process that is going on while transaction happened through bitcoin. Like bank
account each holder of bitcoin have some unique number that is encrypted and linked to specific algorithm ( Reynolds and Angela,
Irwin., 2017). Algorithms are basically set of instructions that execute specific thing on execution of command. When anyone enter
key in respect to account through algorithm verification is done and it is ensured that data will remain safe and no one can steal
same easily. Thus, it can be said that payment through bitcoin is safe. In the current report , different aspects of bitcoin are covered.
In the report detail analysis of importance and relevance of bitcoin as payment method is done. Apart from this, application of
bitcoin technology is analyzed in terms of its use that is done by the people and number of countries that are accepting bitcoin for
making and receiving payment. Apart from this, in the report it will be identified whether regulation related to bitcoin is developed. It
can be said that scope of the present research study is very wide in nature and in future lots of new things can be observed in respect
to bitocoin (Ram, Maroun and Garnett, 2016). Inflation is the factor that to great extent affects the nation and economic growth as
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well as currency exchange rate. Thus, in the research study an attempt will be made to identify the impact that inflation rate have on
the bitcoin. USD also affects the currency value and in the present research study an attempt will be made to identify the relationship
between bitcoin value and currency. It can be said that there is significent importance of bitcoin for the business firms. There are
lots of things that can be covered in research about bitcoin. With passage of time use of 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 (Coins, 2017). It can be said that time will come when more and more payments will be made and accepted in Bitcoin in the
market. With passage of time period it is very important that number of dealers that execute trade related to Bitcoin must be increase.
This is because more will be dealers less will be control of same on the network which is very important in the current time period.
This will prove good for the Bitcoin across the globe.
1.2 Problem statement
Bitcoin is one of the most popular crypto currency in the world as its use is increasing at fast rate. Most of people does not
have strong knowledge of Bitcoin and due to this reason they think that it would not be better to make investment in mentioned crypto
currency and they avoid making payment or accepting payment in Bitcoin. There are number of things about Bitcoin that people does
not know and due to this reason they avoid making use of Bitcoin. This is the major problem that is associated with the Bitcoin and in
response to this in the current research study different aspects of crypto currency are analyzed in the report. In this regard, relationship
between price of Bitcoin and USD is meaured and in this regard data is gathered and same is analyzed by using statistical tools. Rate
at which transactions in Bitocoin increased are also analyzed and conclusion is prepared. Interlationship between price of Bitcoin and
inflation is also explored. In this way, different aspects of Bitcoin are measured and problem is addressed.
1.3 Research questions
 What is the relationship between Bitcoin and USD?
 What is the rate at which ceypto currency are issued in the market?
 What are the trends in the market in respect to Bitcoin?
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 What is the relationship between price of Bitcoin and number of vendors?
 What is the relationship between inflation and price of Bitcoin?
1.4 Research aims and objectives
Aim: To developing 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 number of transaction 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.
1.5 Rationale of study
It is important to identify the reasons due to which research study must be carried out in the specific domain. As this reflect the
importance of the present research study. It was important to perform the current research study because bitcon is in market for more
then 5 years but today also it is not use as a popular medium for making a payment. Transaction cost is low and instant payment
happened 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 lots of positive sides of the bitcoin as a a currency. Like it is a single currency that is accepted across the nations. Thus, one does
not need to care or concern about exchange rates in the market. Then also it failed to achieve expected success in the market. Thus, it
was importnant to conduct the present research study because by doing so different aspects that are related to bitcoin can be covered
easily add deep analysis of same can be done in systmeatic manner. Thus, it can be said that there is significent importance of the
present research study for varied entities. In the current time period while doing trade with any nation companies have to consider
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exchange rate. Fluctuation in these rates significently affect 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.
1.6 Significence of research study
There are lots of significence of the present research study because it cover varied aspects of the bitcoin. In the current research
study, importance of bitcoin will be discussed in detail. Different areas where bitcoin benefits the firm will be discussed in the firm.
Thus, it can be said that scope of the present research study is very wide and lots of things can be done make use of bitcoin as mode of
payment. It can be said that there is huge significence of the present research study. In the current research study number of people
and countries that are covered in the report are discussed in detail. This will show the extent to which bitcoin is prefererd by the
people and the business firms. Bitoin is the one of the important currency that can be used by the busienss firms in the curculation and
to perform business transactions across the globe. Thus it is very important to identify that after having such a strong positive points
what are the reasons due to which still at wide level bitcoin is not used by the firms to accept and to make payment online at wide
level. Thus, it can be said that scope of current research study is very wide. Governments alos may keep an eye on usage of bitcoin
and it may intended to interfere in usage of bitcoin in the nation. In this regard government can prepare some of the important rules
and regulations. In the current report, all these things will be covered extensively. This resarch study will help readers in
undersranding the extent to which govewrnment intervene on use of bitcoin in the Malaysia by preparing rules and regulations tightly.
This reflect that there is significent importance of the present research study for the individuals. Inflation is the another factor that
indirectly affect the currency value. Increase or decrease in the currency value heavily affect the usage of specific currency in the
nation or across the globe. Present research study is focusing on identifying whether inflation rate have any impact on the bitcoin. This
reflects that there is significence of the present research study as it help one in understanding whether there is any impact of inflation
on the bitcoin value and if there is any impact then to what extent it lead to up and down in the bitcoin value. Finally, in the research
study relationship will be identified between USD and bitcoin. Usually, in case of paper currency each nation currency value is
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compared with USD and strength and weakness is identified and accordingly payments are exchanged by the firm. In the present
research study also same relationship will be identified between bitcoin and USD.
It can be said that like issues are observed in paer currency same are evalated in respect to electronic currency. This reflects
that at vast level relationship is identified among variables. Thus, scope of the present research study is very wide and lots of things
are covered in the report which reflects that at single place reader will become familiar with number of facts.
1.7 Strcuture of report Introduction: In order to prepare dissertation in systematic manner first of all introduction part is prepared and under this
detail discussion is carried out on bitcoin and its advantages as well as issues that can be associated with it (DeWaal and
Dempsey, 2015). In this section of the report, rationale and signfiicence of research is discussed briefly. It can be said that
there is huge significence of the present research study for researchers. Literature review: This is second part and one of the important section of the present research study. In this stage literature of
different scholars are reviewed in detail and positive and negative points that they speak in respesct to research objectives are
discussed in detail. Research methodology: It is another important segment of the current research study. Research methodology segment reflect
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 research appraoch, research philosophy, ethics and limitations of research. It can be said that there is
huge significence of this part of research because it reflect whether research is carried out in legitimate way by the researcher. Data analysis section: In this part of the research report data is analyzed by using relevant tools like thematic analysis and
SPSS. On the basis of analysis of results it is identified 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. It is the tool that
reflect relationship among variables. It can be said that SPSS is the one of the most important tool that is used for analysis
purpose by the researchers.
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 Conclusion and recmonedation: Finally after preparation of data analysis section conclusion and recommendation section is
prepared in the report. Under this results obtained on analysis are taken in to account in order to form conclusion and preparing
recommendation. It can be said that in this segment of the report overll conclusion of research study is described in detail.
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CHAPTER 2: LITERATURE REVIEW
2.1Theoritical framework
In the image given below theoritical framework is explained below. Some of factors are taken in consideration to identify
trends that are assoicated with crypto currency. Factors that are considered to identify trends in Bitcoin are relationship between
Bitcoin and USD, varied years in which crypto currencies introduced, trends in number of transactions that are happened in Bitcoin,
price of bitcoin and number of vendors and inflation.
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