Hazards and Welfares of Virtual Currency: Analysis and Recommendations

This report, focusing on the hazards and welfares of virtual currencies, begins with an introduction to the topic, discussing its background, problem statement, aims, objectives, and research questions. A literature review then explores the concept of virtual currency, its associated hazards, and potential welfares. The research methodology section outlines the research onion, philosophy, approach, design, data collection, sampling, and ethical considerations. The data analysis and findings chapter presents the foremost benefits and drawbacks of virtual currency along with strategies to address related issues. Finally, the report concludes with recommendations, addressing the initial aims and objectives, and providing suggestions for managing risks and challenges within the current virtual currency environment. The report also includes references and appendices.

Running head: HAZARDS AND WELFARES OF VIRTUAL CURRENCY
Hazards and Welfares of Virtual Currency
Name of the Student
Name of the University
Author’s Note

1HAZARDS AND WELFARES OF VIRTUAL CURRENCY
Acknowledgement
I would like to thank my University and the professor for allowing me to contribute as well as
providing opportunity to complete my research despite of all challenges that I have faced. It will
not forget the efforts that are made by the professors and other for guiding me with patience,
guidance and understanding. I would not have completed this research without their guidance
and understanding and you are all special to me.

2HAZARDS AND WELFARES OF VIRTUAL CURRENCY
Abstract
The research is mainly focused on the hazards and welfare of virtual currencies which points out
the limitations and benefits of virtual currencies. The primary chapter is the presentation which
centres out the common information around the thought in conjunction with the company. The
targets of the research roughly has been talked around in this parcel next to the research
limitations. Besides, it in expansion solidifies the research questions near to point and targets of
the research. Interior the second chapter, it contain of composing outline which centres out the
variables that are to be tended to interior the study. It incorporate of openings and threats
adjacent assessment of competitive advantage and strategies for moving forward the execution.
In chapter three, it highlights the strategy which centres out the techniques through which the
research has been conducted. It solidifies the considering, approach, organize, information
collection strategy and test of the research nearly sheds light. The fourth chapter joins the results
around and revelations where the outcomes about nearly are to be assessed and reviewed as per
the current circumstance which it highlights the surveying, evaluation, openings, dangers and
competitive strategy. Inside the final chapter, it deals with the conclusion alongside proposal and
usage with the concluding considerations have been said at the side tending to the goals and
certain suggestion. The suggestion that have been demonstrated would offer assistance the
company to supervise with the dangers and challenges that are going up against in current
circumstance.

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Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Background of the Study.......................................................................................................6
1.2 Problem Statement.................................................................................................................7
1.3 Aims and Objectives..............................................................................................................9
1.4 Research Questions..............................................................................................................10
1.5 Scope of the Research..........................................................................................................10
Chapter 2: Literature Review.........................................................................................................12
2.1 Concept of Virtual currency................................................................................................12
2.2 Hazards of Virtual Currency................................................................................................16
2.3 Welfares of Virtual Currency..............................................................................................21
Chapter 3: Research Methodology................................................................................................25
3.1 Research Onion....................................................................................................................25
3.2 Research Philosophy............................................................................................................26
3.3 Research Approach..............................................................................................................27
3.4 Research Design..................................................................................................................27
3.5 Data Collection process.......................................................................................................28
3.6 Sampling method and sample size.......................................................................................28
3.7 Ethical Consideration...........................................................................................................28

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3.8 Summary..............................................................................................................................29
Chapter 4: Data Analysis and findings..........................................................................................30
Theme 1: Foremost benefits and drawback of virtual currency................................................30
Theme 2: Strategies points out the issues with virtual currencies.............................................38
Chapter 5: Conclusion and recommendations...............................................................................45
References......................................................................................................................................52
Appendices....................................................................................................................................59

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Chapter 1: Introduction
Virtual currency is the type of digital currency which is mainly unregulated in nature that
are generally issues and controlled by the developers. It is mainly accepted by certain specific
virtual community in the world and it is mainly represented in the terms of tokens which might
be remained unregulated without any further legal tender (King et al. 2018). The backdrop of the
financial crisis in the year 2007 and 2008 led to the development of virtual currency which
decentralised the virtual currency in the world or the crypto currency which is also coined as bit
coins. These help in taking of the transaction in a quicker ways which points out the approval of
the solutions in a better way (Walsh and Hallegatte 2019). Moreover, it is easily accessible by
the public as they can use the virtual current at any time and at any place. The electronic
representation of the monetary value that are required to be issued and controlled by the
developers in the funding organisations. They are represented in terms of tokens and those have
to be associated with legal tender in an unregulated manner. The virtual currency is totally based
on the system of trust which have to be associated with the central bank or other regulatory
authority (Van Leeuwen 2016). The underlying value of mechanism is based on the overall
system which have to be associated with the cases of crypto currencies that are mainly backed by
whole assets. The price of crypto currency are mainly affected by the seesaw effect of the
psychological trading process.
This particular term that is crypto currency or the virtual money mainly came into
existence in the year 2012 during the time when European Central Bank classified it as the
digital money in the nature of unregulated environment. The developers mainly issues and
controlled as it is being used as one mode of payment within the specific virtual community
(Burgess, Alemanno and Zinn 2016). After certain period, the common public started to use the

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virtual currency which makes them easy in different mode of payment but they have the
restriction in their overall usages as it is acceptable only for the members. The overall usage of
virtual currency within the common public highlights the online transaction along with finding
the increasing usage of goods and services. Digital currency is the overall superset of the virtual
currency which lacks the concepts of hard cash and their volatility is also more the hard cash
(Bierbaum et al. 2019). The dedicated block chain based network are mainly open within the
common public and that have to be included within the concept of virtual currency. The
transaction of the virtual currency mainly follows the particular system which have to be
associated with the monetary assets in the digital form of digital currency.
1.1 Background of the Study
The study mainly highlights the hazards and the welfare of the virtual currencies in the
current economic conditions which would be beneficial for the people. The uniqueness of each
has is to be highlighted by the ledgers and the block chains and that would be distributed among
the members of the network (Qian 2019). The study also points out the hazards that is to be faced
by the users of the virtual currency and welfare that are to be provided by the virtual currencies
to the common public. The time at which the new technology has been emerged in their normal
course of actions due to certain factors that affects the overall virtual currencies. The current
market condition mainly consist of the certain laws and regulation which are not at all accepted
in the states of the country (Yermack 2017). It does not consist of any laws or regulation which
might affect the virtual currencies along with the ordinary currencies as that are solely associated
in the market. The block chain of information that is to be transacted in data set includes the
underlying distribution of networks. The majority of the included network includes the effective
thumb print that highlights the effective connection between the system and the virtual currency

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(Reiners 2019). The majority of the systematic network points out the new block that connects
the further supplemented connection along with highlighting the decentralised registers.
The uniqueness of each hash is to be publicly accessible which restricts the overall block
chain along with extremely for the manipulation of data. The value of the virtual currency is
totally based on the dynamic value which have to be included with their major network that
points out the uniqueness of each of the factors that are included in these currencies (Mesa-Lago
2017). The regulatory standards regarding the virtual currency has been emerged and grown
stronger and for that reason these required certain need of the regulation which have to be
included with different other type of currencies. There are different types of currencies in the
world and each currency have to be associated with virtual currency which would be easier for
payment by the mode of virtual currencies (Trautman 2018). It is also considered as one of the
most important part that have to be included with the regulators and barely clears any kind of law
for using the virtual currencies. The value of the currency differs from country to country which
makes them connect with the overall valuation of the currencies that throws the direct impact on
the handling charges for removing bans in certain countries. The constant flux in the competitive
market highlights the virtual currency that points out the attitudes for the virtual currencies
(Twumasi, Merem and Ayala-Silva 2016). The handing ranges within the effective outrights
points out the regulatory density that would be beneficial for the risks and the opportunities.
1.2 Problem Statement
The problem statement mainly points out the overall issues which is to be addressed in
the study along with mentioning the block chains of the crypto currencies. The positive and the
welcoming nature also points out the overall path of innovation that help in driving the policy
along with philosophy of virtual currencies (Böhme, Laube and Riek 2017). European Union has

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been currently introduced the law which is known as Anti Money Laundering directives which
would be beneficial for the changes that has to be taken in the consideration. The stipulation in
the exchanging platform is to be highlighted with the virtual currencies that points out the
providers of the wallets in which the virtual currencies would be stored (Gupta 2019). The main
problem is that it consist of certain issues that are required to be highlighted in the overall study.
The European Union mainly revels that the approach to the block chains mainly follows the path
of innovation that drives the business philosophy which supports the overall development of
different virtual currencies. The European Union also discussed the plans for submitting the
virtual currencies in the G20 summit in the year 2018 and those have to be included with
formatted proposal within the regulation of currencies (Faure and Nieuwesteeg 2017). The
Financial Stability Board might not attach sufficient evidence on the past time as it includes the
valuation which are to be associated with the characteristics of virtual currency.
Certain type of tax would not be helpful in resolving the conflicts among the real money
and the virtual money for lately enforced actions against the taxable purpose. The exchange trade
products includes of crypto currencies that points out the trade license for enforcing actions
against the fraudulent activities (Lemma 2018). The Initial Coin Offerings classified the virtual
currency as a commodity which allows to perform in trading platforms. The IRS has accepted the
virtual currency which have to be associated with property and applicable for different tax
purpose. The profits that were made from the virtual currency has been declared to the
Department of Treasury which focuses on the process of reduction of financial risks. Some of the
countries might not accept the overall approach of the virtual currencies which have to be
criticised with the laws for its performance in current economic condition (Raghunandan 2018).
The notable concept has accepted the laws that has been passed with the legal tender which have

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to be associated with the introduction of crypto currencies and imposing the stiffs for using the
virtual currencies. At the end of the spectrum which have to be associated with the disruptions in
the financial order and those have outlawed within the banned token sales (Novak 2019).
Banning of virtual currency is also been associated with the process of trading that would be
allowed in one certain authenticated bank accounts.
1.3 Aims and Objectives
The aim of the study is to point out the issues that are associated with the hazards and
welfares of virtual currencies along with providing with better benefits and solution for the
issues. The aims and objectives of the study has been mentioned and discussed in the part below.
Aims
The essential part of the research is to bring an assessment that highlights the hazards as
well as the welfares of the virtual currencies in the competitive market of the current economic
condition. The study takes about the consideration about the common portrayal of the issues and
benefits of the virtual currencies. The biased stem of financial commitment includes the sources
which have to be included with the process of trading and providing the overall security of the
virtual currency. Virtual currency cannot be stolen, hacked or lose during any kind of transaction
and that have to be gone with the broker along with the security of the bank. The overall rapidity
of the currencies is more associated with the rapidity of the currencies which have to be dealt for
buying any other currencies. The gains is associated with the virtual currency includes the
effective process of purchase and sale process that cannot be expected with the opportunity of
earnings. Moreover, the effect of leverage is also to be increased that points out the process of
highlighting the overall opportunity. The promising nature of the virtual currency is directly

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associated with the price of the currency that would be beneficial to the hold of that particular
currency.
Objectives
The objectives of the study is to portray the hazards that are associated with the use of
virtual currencies along with the welfares which would be highlighted by the crypto currencies.
The structure of the dissecting of the virtual currencies is to be highlighted along with the
technologies that are associated in making the virtual current in the real world. This also points
out the procedures by which the virtual currencies have been introduced within the public. The
non-financial arbitrary data that are associated with the block chains highlights the contents that
highlights the inserted data by pointing out the controversial content. The block chains for
transaction related information includes the effective functionality which would be beneficial for
the people as well as the user of the virtual currency. The practice of showing the virtual
currency in the technical related information which points out the hazards as well as the welfares
of the virtual currency.
1.4 Research Questions
The following are the research questions which has been gathered from different sources
about the hazards and welfares of virtual currency.
1. What are the foremost benefits and limitations of virtual currencies?
2. What are the strategies that are helpful for overcoming the issues and the security concerns of
the virtual currency?

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1.5 Scope of the Research
The research is totally based on the hazards and the welfares of virtual currency that is to
be considered in the study. Moreover, the multidisciplinary field on the virtual currency is to be
included within the social components that points out the monetary framework of the virtual
currencies (Schmidt and Sandner 2017). The specific requirement is to be included with the
emphasis on the overall development that continues to happen within their distinctive approaches
that are associated with the variance of crypto currencies. The changes that has been
incorporated with different policies in the virtual currencies includes the compensation of
opportunity payment. The regulation that are varying in the nature might create another problem
which points out the possession in varying their values in different countries (Robles et al. 2016).
The trade of virtual currencies are legal within several countries as it has been accepted by the
bank of virtual currencies. In addition to this, there are certain issues which have to be included
with the effective transaction related as well as non transaction related content which have to be
associated with the block chains of transaction and that have to be included with the mechanism
of virtual currencies. The immutability of the virtual currencies includes the percent of attraction
that would attract most of the public to its nature and increase its overall viability in the targeted
community (Trzcionka 2018). The arbitrary data that is associated with the virtual currency also
points out the content that are transaction related and those have to be included at the time of
transaction.