Critical Review of Cryptocurrency: Financial Market Impact

This report presents a critical review of cryptocurrency, focusing on its advantages and disadvantages within the financial industry. The paper begins with an introduction to cryptocurrency as a digital currency secured by cryptography and highlights its organic nature, free from central authority control. It then discusses the benefits of cryptocurrency, such as easy fund transfers and minimal transaction fees, while also acknowledging the drawbacks, including the risk of hacking. The report reviews existing literature on the topic, including an analysis of the effectiveness of Bitcoin in business transactions. The evolution of cryptocurrency, from its origins in cryptography to its implementation by Satoshi Nakamoto, is also discussed. The report concludes by emphasizing the need for further research to predict the future of cryptocurrency, given its inherent risks and benefits.

Running head: CRITICAL REVIEW
CRITICAL REVIEW
Name of Student:
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Introduction
The topic relating to cryptocurrency and bit coin has been very famous in the financial
industry. Cryptocurrency is known as the digital currency that comes cryptography, which is
used for security. The security feature is the one that makes it difficult to counterfeit. On the
contrary, cryptocurrency has multiple benefits and drawbacks. The paper is a critical review of
an article based on the effectiveness of cryptocurrency.
Discussion
The paper starts with a brief description of the financial market and how instruments are
created to make easiest transaction. The evolution of cryptocurrency has developed he market
structure and simplified the transaction pattern. However, cryptocurrency is not used by any
central authority due to its organic nature. The author has mentioned that bit coin has been
accomplished as theoretically immune for manipulation or government interference.
The effectiveness of cryptocurrency is that funds are easily transferred from one party to
another party, which are facilitated though the usage of public and private keys. The procedure
does not need much fees and users have to pay minimal transfer fees in comparison to what is
being charged by the banks for online transactions. The author has properly described about the
benefits of cryptocurrency although use of cryptocurrency remains a puzzlement for the people
and the author has not properly described about its functioning.
The narrator has efficiently acknowledged about the disadvantages of bitcoin or
cryptocurrency. The biggest drawback is that the threat of hacking that comes up from the usage
of payment system of cryptocurrency. The history of bitcoin mentions about the concurrence of
40 thefts of the company, where a few has also exceeded the value of one million US dollars. In

spite of these potential risks and negative effects, cryptocurrency is preferred over other means
of transactions because a currency can exist the preservative value. Bitcoin facilitates an easier
exchange system which is portable in comparison to the hard metals. Moreover, the usage of the
cryptocurrency does not need the influence of government and central banks.
In the second chapter the author has carefully written about the conclusion of other
authors who has worked on the same topic. It has been pointed that the effectiveness of Bitcoin
that lies in the provision of the greater business transactions with respect to core outcomes
(Bunjaku, Gorgieva-Trajkovska, & Miteva-Kacarski, 2017).
Some people has said that usage of cryptocurrency will solve the problems arousing at
the financial market. They must be used effectively by firms to facilitate greater transaction and
deals. This will benefit the economy with positive profit. The bitcoin becomes more sensitive to
the economic factors such as inflation, inflation rate, demand, supply and financing. The system
is less sensitive to technological factors that enhances productivity of market outcomes.
On the contrary, several authors have addressees about the advantages such as
confidentiality, privacy and anonymity. According to many experts, the risk factors can be
beaten with many core competencies. If government tries to regulate the functioning, then the
processing will not be the same any more. The system of cryptocurrency is very transparent and
so government will prevent the integration of the system.
In the net portion, the author has given every detail on the functioning of cryptocurrency,
which will help several users or observers to understand about its effectiveness. The concept of
cryptocurrency is very old, yet is not known by many people around the globe. The story starts
with the theory of cryptography which was mostly used by militants, intelligence agencies and

secret services as a secured system of sharing information. Then the author describes about the
evolution of cryptocurrency in 1975 by a pioneer who implemented the Digital Encryption
standards (DES) in the Federal Register. After that several things has happened and many people
has pointed about the effectiveness of cryptocurrency. Finally, it has introduced in January 2009
by Satoshi Nakmato who became the first person to gain a reward of about 50 bit coins.
However, the future of Bitcoins very optimistic and no one is able to predict about its outcomes.
The topic requires more research before making any conclusion that will properly demonstrate
about the future of bitcoin.
Conclusion
Thus, it can be concluded that the paper greatly acknowledges about the topic of
cryptocurrency. The author has mostly mentioned everything on the topic. An analysis has been
made about its advantages and disadvantages. The theory relating to its evolution has been
written and the range of work done on the topic by other authors. Thus, the future of
cryptocurrency remains unexplored due its risks and benefits.