Crypto Currency Analysis: Regulations and Effect on Int'l Business

This report provides an overview of crypto currencies, exploring their increasing popularity, advantages, and disadvantages. It discusses the decentralized nature of crypto currencies like Bitcoin and their reliance on blockchain technology. The report analyzes the absence of a central regulatory body and the implications of this lack of oversight, including potential risks and benefits for international business. It examines the effects of crypto currencies on international trade, such as streamlining transactions, reducing inflation risks, and facilitating crowdfunding. The report concludes that crypto currencies have established a significant presence in the global economy but require careful consideration due to their unregulated nature.

Research on Crypto Currency

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Contents
INTRODUCTION.................................................................................................................................2
Crypto currency and its popularity....................................................................................................2
Pros and Cons of Crypto currency.....................................................................................................2
Crypto currency regulation................................................................................................................3
Effect of Crypto currencies on international business........................................................................4
Conclusion.............................................................................................................................................4
REFERENCES......................................................................................................................................5

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INTRODUCTION
New form of digital money named crypto currencies are used in all over the world
(Narayanan, Bonneau, Felten, Miller & Goldfeder, 2016). This has expanded a lot in the past
few years especially with the development of Bitcoins. This has made its presence felt after
the development of distributed ledger system like Blockchain. The use of crypto currencies
these days have been widely used in various businesses.
Crypto currency and its popularity
A crypto currency is a digital asset created to work like an exchange mediums which utilises
cryptography to make transactions secure, to regulate the generation of additional units and to
verify asset’s transfer (Vigna & Casey, 2016). Alternative currencies, digital currencies and
virtual currencies are some of the type of crypto currencies. As opposite to the centralised
systems like central banking system and centralised electronic money, crypto currencies have
decentralised control. Bitcoin was the first decentralised crypto currencies which were
created in the year 2009.
The major reason for crypto currency becoming popular is that it is a form of digital money
that is highly safe and has a decentralised structure. No-VAT in the European region has
assisted to enhance the value and popularity of this digital currency (Al Shehhi, Oudah &
Aung, 2014). Since people understand it to be safe and making frauds is impossible hence its
value has increased in the digital space.
Pros and Cons of Crypto currency
Crypto currency is a relatively new kind of technology and it is in the developmental stage.
There are various pros and cons associated with crypto currencies.
Advantages of crypto currencies:

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 It is a highly transparent form of money since there is an open and distributed ledger
(Surowiecki, 2011). In this all the transactions are monitored and recorded hence no
duplication or alterations can be made. These transactions can be verified by anyone
and no single entity has manipulation over it.
 In traditional form of currency inflation enhances due to more printing of money or
shifting prices in economies. Crypto currencies do not experience inflation since there
are a limited number of minable crypto currencies. It is programmed to have 21
million Bitcoins that is capable of handling 10 billion people.
 This is a highly portable for of money as it can be carried easily without detection.
Billions of dollars cam ne transferred with the use of portable devices.
 It is independent of other identities in the transactions which assists hem in keeping it
safe.
 It does not have any intermediate hence they have no fear regarding any organisation
monitoring transaction details. It provides freedom to buy and sell without the source
of your funds being traced.
Disadvantages
 Since there is no particular organisation that monitors these transactions hence there is
a feeling of distrust in the minds of people. This misunderstanding will rupture the
growth of this system.
 Due to lack of centralised system, it is unlikely that anybody will lose any money but
if anybody loses it then there will be no one to provide security cover. The encryption
identifies the currency and not the owner (Raymaekers, 2015).
 If there are any criminal transactions then there will be no chance that the transaction
can be traced. This can be problems for the government.

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 These are subjected to be under threat of the market fluctuations like the changing
market prices. While investing in crypto currencies this is the biggest challenge that
any person can face.
Crypto currency regulation
There are no central agencies to regulate the crypto currency but the governments inside the
nation are responsible for regulating it (Harwick, 2016). This makes the system more flexible
and government all around the world regulate it as per their financial regulatory norms. Many
countries have made laws against it and many have made it a legal tender. It is also the matter
of fact that the design of the system of crypto currency is as such that they cannot be
regulated as the transactions are recorded at various nodes which can be present anywhere
around the world.
This is not good in many ways as there is no one responsible for the loss if any faults occur. It
is hard to hack the system of crypto currencies but if it is somehow done then a lot of money
is at stake. Due to non-presence of any governing authority making rules and regulations of
the transactions and deciding the prices of the commodity or services can be a difficult task.
Apart from this it reduces the chances of detecting any frauds in the system. This is a major
issue in any financial transactions.
Effect of Crypto currencies on international business
There are wide ranges of effect on the international business by the use of Crypto currencies.
This can be understood by the following points:
 It brings uniformity in the currencies as there will be single money like Bitcoins that
can be used for the international border trades.

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 As it can be seen in the above part that it helps in controlling inflation and hence there
will be reduction in the chances of business failures which differed from country to
country.
 It cuts out the middle man from the business (Heid, 2013). This help in the easing on
the ways of doing business on the global level. On few cents are required as a
transaction fees.
 It has simplified the crowd funding process. Developers and entrepreneurs do not
want to invest a large number of times in raising funds trying to convince banks,
angels, and investors to give equity in their start-ups.
 It helps in reducing the time that was consumed in the transaction as it was a fast
system that helps a business to do transactions. It also reduces the complex system of
transactions and hence making the business process easier.
Conclusion
From the above report it can be said that the digital currencies have made their position in the
global economy. Crypto currencies have become one of the best forms of digital money. It
has become popular because it is safe and free of any middle man. Crypto currencies have
several advantages and disadvantages in their business. There is no specific regulatory
authority of crypto currencies but this is not good for the whole system and it creates lack of
faith in the minds of people. Crypto currencies have higher effect on the international
business.

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REFERENCES
Al Shehhi, A., Oudah, M., & Aung, Z. (2014, December). Investigating factors behind
choosing a cryptocurrency. In Industrial Engineering and Engineering Management (IEEM),
2014 IEEE International Conference on (pp. 1443-1447). IEEE.
Christensen, A., (2017). Retrieved from:
https://www.businessload.com/run-grow-business/cryptocurrency-future-international-
business/
Harwick, C. (2016). Cryptocurrency and the Problem of Intermediation. The Independent
Review, 20(4), 569-588.
Heid, A. (2013). Analysis of the Cryptocurrency Marketplace. Retrieved February, 15, 2014.
Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and
Cryptocurrency Technologies: A Comprehensive Introduction. Princeton University Press.
Raymaekers, W. (2015). Cryptocurrency Bitcoin: Disruption, challenges and opportunities.
Journal of Payments Strategy & Systems, 9(1), 30-46.
Surowiecki, J. (2011). Cryptocurrency. Technology review, 114(5), 106-107.
Vigna, P., & Casey, M. J. (2016). The age of cryptocurrency: how bitcoin and the blockchain
are challenging the global economic order. Macmillan.

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