University Report: Cryptocurrencies, Blockchain, and Bitcoin's Role

This report delves into the realm of cryptocurrencies, with a specific focus on Bitcoin and blockchain technology. The executive summary provides a concise overview of the report, highlighting the anonymity, awareness, and legislative effects of cryptocurrencies. The introduction establishes cryptocurrencies as a significant concept in the global economy, tracing their evolution and the emergence of Bitcoin as the first major cryptocurrency. The discussion section examines Bitcoin's functionality, its distinction between ordinary users and miners, and the concept of blockchain. The literature review synthesizes existing research, exploring the increasing acceptance of cryptocurrencies, their underlying mathematical principles, and their advantages, such as cost savings, rapid transactions, and global accessibility, as well as the disadvantages like volatility and regulatory uncertainties. The report also addresses the basic aspects of cryptocurrencies, including their influence on prices, transaction fees, transparency, and anonymity. The importance of blockchain technology and its role in the cryptocurrency landscape are explained. The report concludes by summarizing the key findings and implications of cryptocurrencies in international trade and finance.

Running head: International trade and finance
International trade and finance
Name of the Student
Name of the University
Author Note

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Executive Summary
Cryptocurrencies is one of the virtual currency that is based on the cryptography and
electronic communication. Recently, in the current economy it can be seen that the bitcoin
was the first cryptocurrency that was introduced which does get a lot of attention. The basic
aspects of cryptocurrency which does includes the anonymity, awareness and legislation
effects are all briefly discussed here. There are multiple legislation barriers that affect the use
of cryptocurrency are detected. In the later part, the mechanism of block chain has been
discussed and the relationship between the cryptocurrency has been conversed.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Literature Review.......................................................................................................................4
Basic aspects of Cryptocurrencies.............................................................................................6
Block chain.................................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10
Appendix..................................................................................................................................13

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Introduction
The cryptocurrencies are one of new concept that is in the global economy. With this
concept it does attracted a lot of attention in a span of five years, and from the year 2013 it
has experienced a turbulence change in the exchange rates. It is considered under the group of
virtual currencies and as a digital medium of exchange, which is usually based upon the
principles of cryptography that allows the performance to be secure, decentralized a
distributed economy. The theoretical foundations in cryptocurrencies was founded first time
in the year 1983, in which it was integrated that it was an electronic virtual money that was in
the principles of cryptography. It does allow the individuals in transferring virtually costless
of the cryptocurrency units between the client applications through the computer peer
network.
Discussion
The most famous cryptocurrency that was first introduced in the year 2009 was the
bitcoin. It was designed by the group of persons that does work under the pseudonym Satoshi
Nakamoto. There are usually two types of bitcoin that does exists one is for the ordinary
users and other is the bitcoin miners. The ordinary users of the bitcoin do use the digital
wallet, which is usually similar to the applications of electronic banking. The wallet in which
the transactions are been done is like a software in which all the bitcoin cash is bene
managed, which includes the sending and receiving payments in the bitcoins. The bitcoin
does exist as the information that is kept in the files in the computer or smart devices like the
smart phones. This is done by the normal group of users and for the group of miners they do
use the mathematical problem which is been dedicated for the computational power to the
bitcoin network. The miners do use the process of mining in which they do wait for

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confirming the transactions which does include themselves in the block chain. The block
chain of the transactions for bitcoin is created for every 10 minutes in which the payment is
been confirmed in that period only.
With the introduction of bitcoin, the other cryptocurrencies also emerged which do
have similar specifications as the bitcoin and does represents the implementation of the
cryptocurrency protocol. After the bitcoin, the second most popular cryptocurrency is the lite
coin, which do have the same mechanism as the bitcoin but the transactions are much faster if
compared. The maximum capital of cryptocurrency does aims in assuring the scarcity, which
is as the similar case for the precious metals which the investors does invest in. The traders
do have to keep in mind that in preventing the hyperinflation, where there is amount of
currency that is in the circulation which it approaches to the present finite capital. All the
cryptocurrencies that are existed are treated as the pseudonymous, which do have the high
degree of anonymity. Since the introduction of cryptocurrencies, it does gain the attention
from the media both are positive and negative which is specially in the fast price rise of
bitcoin and lite coin in the year of 2013.
Literature Review
The theoretical and empirical research of cryptocurrencies are bene done by many
economists and there are several data through which an analysis can be done through an
organized way. Many researchers have said that in the recent days, the level of
cryptocurrencies has been increased day by day as it has a widespread acceptance in the
conditions of monetary stability, also there is absence of government support (Chohan 2017).
As the cryptocurrencies like the bitcoin and lite coin can be directly interchangeable, most of
the markets like the Bit Stamp, Vircurex, BTC-e, BTC China accepted as it is the flat
currencies (Fry 2018). As the virtual currencies does base on some mathematical problems

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that does has an enormous computing power in which there is a built in security mechanism
that will help in the processing power that does comes under nothing, rather than something
which can be meaningful at times (Sovbetov 2018). There are several researchers from
Microsoft Research, Cornell Tech and the University of Maryland that does proposes the use
of computer resources which is used in the cryptocurrency mining, that are more useful, so
they do propose a new virtual currency that is named as Permacoin (Iwamura et al. 2019).
With the help of Permacoin, it can be generated at times when the users do archive the data
from the huge data fund. Thus, the mining of Permacoin is been less dependent on the
computing power and mainly on the storage space.
There are several advantages that the cryptocurrencies possess, which the
organizations will be befitted are discussed here. It will help in saving the money in the
medium to long term (Yaya, Ogbonna and Mudida 2019). There are savings which can be
undermined through the installation cost of the essential hardware and software. There is
volatility in the cryptocurrency trading rates, which can be used for potentially as there can be
losses in any point of time. the transactions will be processed quickly, as it is claimed to be
said that has happened due to the speedy transfers which can be done through the debit card
or the swift transaction (Yi, Xu and Wang 2018). The currency does works worldwide, as the
real time electronic transfers can be done thorough various ways. There will be less
possibility of fraud and chargebacks, in which it can vary through the suppliers of
cryptocurrency (Zimmer 2017). There can be fraud at times of using the cryptocurrency, in
buying large value items, and the fraud can be discoverable at the time of delivery of goods
and services. There can be certain jurisdiction which will help the seller in returning the
currency that is stolen to the rightful owner (Bouri, Shahzad and Roubaud 2019). The
jurisdictions can be related to the administer consumer protection, finance and insurance laws
that will help in generalizing the cryptocurrency vendor and the trader which can be exposed

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to the cryptocurrency crime. In acquiring the new consumers, the statement is usually true if
can there can be trade with the vendor, who does accept the cryptocurrency.
Basic aspects of Cryptocurrencies
The price of cryptocurrencies does influence the prices and reflects the trust of the
users which has been given for the future development. It does have a freedom to the
payments that helps the users in possibly sending and receiving the payment which is been
needed and can be done from anywhere of the world, so it has a full control in the money
(Gandal et al. 2018). There include the fees which has to be paid at the time of transaction in
receiving the priority processing which do have faster transactions that does help in
converting the bitcoins to the flat currency and in depositing the funds to the bank accounts of
merchants on a daily basis (Chen et al. 2018). The services that are usually based on bitcoin,
so they do offer in a much lower fees which is with the credit card or PayPal networks.
The information that is concerned with the money supply of cryptocurrencies, is been
readable and does available in block chain in which everybody can verify through the use of
real time, in which the cryptocurrencies can be more transparent (Bakar, Rosbi and Uzaki
2017). The payments of cryptocurrencies can be done without the requirement of personal
information which do not have any link with the transaction. So, it does offer a strong
protection that are against the identification of theft and is almost with full anonymity
(DeVries 2016). The users of cryptocurrencies can also protect money through the encryption
who can help in backing up the wallets. It will also help the merchants to protect and hide any
charges which will help them from any fraudulent chargebacks (Brown 2016). Thus, it will
help in allowing the merchants in which they do have a lower fee, decrease the administrative
cost and enlarge markets (Hayes 2017). On the other hand, there is total value of
cryptocurrencies, which will help in circulation and there are number of business that are

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accepting them which can be very small can are compared to the fiat currencies (Mensi, Al
and Kang 2019). Thus, there is relatively small number of events that can be significantly
done that affects the prices of cryptocurrencies. With this volatility, it will might decrease the
market of cryptocurrencies and in the meantime the technologies will be mature.
The most of cryptocurrencies and software which are used at the time of functioning
are been developed. There will be additional tools and features that will be added, which are
still developing in the current scenario (Li and Wang 2017). In the present world, many of the
individuals do not have the knowledge about the thing called cryptocurrencies, though many
of the users and individuals does accept the cryptocurrencies, so that they can take advantage
of the thing and in future the numbers will increase very rapidly (Taskinsoy 2018). There are
several aspects that does have the influence of the exchange rate of cryptocurrencies, that are
in acceptance and have usability in the various applications. Though, the bitcoin is the most
widely accepted cryptocurrency all over the universe and use by many merchants. There are
legal sites that does have accept payments in terms of bitcoins, though there are sites which
do unofficial transfers also accept this as it very easy in terms of payments (Halaburd and
Gandal 2016). In most of the countries there are ATMs, from there the bitcoin can be
purchased and the exchange rate can be used for the major e-markets that does allow the
cryptocurrency exchange with the small fee which helps in covering the maintenance and
operation.
Moreover, there are some changes in the legislation where the countries are getting
influenced positively or negatively has the possibility of using the cryptocurrencies also in
the legal money transactions. In several countries there are legislative arrangements, which is
been induced through the possible illegal transactions of cryptocurrencies that does bought
into the restrictions of use in the particular country (Narayanan et al. 2016). Though there are
several influences of legislation which is lower, that has been depend upon the new

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legislation which does restricted the usage of cryptocurrencies (Chiu and Koeppl 2017). All
the aspects do have the influences which will help in the use of cryptocurrencies and do have
the final exchange rate in converting to the normal currencies. With the higher trust, it does
come more stability to the cryptocurrencies in the market.
Block chain
Block chain is a mechanism, which employs in an encryption method that is known as
the cryptography and do uses several algorithms which help in creating and verifying the
continuous growth data structure. In this module, the data can be added in which the existing
data cannot be removed from there and it does takes the form of chain of the transaction
blocks. The principle through which block chain woks is that it can propose the additional
new information that has been in the block chain (Saiedi, Broström and Ruiz 2020). In order
to validate the additional information, it is important to note the reads of agreement; thus
there is a consensus mechanism which have a big role in this. To discuss the mechanism, it is
a validation method which does helps in ensuring the correct sequence of the transactions
upon the block chain. In case of the cryptocurrencies, there is requirement of sequencing
upon the transaction s in the block chain (Akyildirim et al. 2019). Moreover, in case of
cryptocurrencies, there is a requirement of the issues which does includes the double
spending which means that the issue can be one and same payment instrument or the asset
can be transferred more than once if the transfer is not registered and are mot controlled
centrally. Thus, the consensus mechanism can usually be structured in a various number of
ways.
The block chain and cryptocurrencies become the hot topic in the couple of years.
Block chain is considered as one of the distributed ledger technology, which helps in forming
the backbone of crypto market. With the help of this technology, it does helps in the variety

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of circulation of crypto currencies currently in the market (Hayes 2016). There is a scope and
a field of action in which there is no limit. So, as a set out the block chains can be applied
through the various sectors and do have a wide variety of applications (ElBahrawy et al.
2017). Thus, it is important to draw a clear line between the crypto currencies and the
applications that are used, which can be one but there is a specific application that is been
related to the block chai technology. In against the background, the regulators do not need to
fear as it helps in stifling the innovation when it is being tackled which is related to the
subject of crypto currencies.
Conclusion
The virtual currencies and cryptocurrencies are being recently subject to the economy
as there are multiples aspects which are related to the use in economy. Several researchers
have initiated and confirmed that there has been an enormous volatility of the
cryptocurrencies exchange rates in which there are levels which is many times higher than the
basic indices, money pair and the commodities. Thus, the high volatility can cause the high
risk at the time of trading the cryptocurrencies an it is reflected in the formation of price
bubbles. Moreover, there are great growth which can be on the exchange rates which will be
attracted to the many speculators, bit it can be seen that the retention value of
cryptocurrencies is much less compared to previous. With all this it can be seen that it does
lead to the understanding of cryptocurrencies which can be act as a medium of payment,
rather than it serves a commodity. If the cryptocurrencies are being compared to the
commodities, then there has been an advantage the it can be easy portability which will be act
as the virtual character, but on the other hand there are virtual character that can be useless or
it can be nonexistent outside the electronic environment.

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References
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Mensi, W., Al-Yahyaee, K.H. and Kang, S.H., 2019. Structural breaks and double long
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Appendix

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