Are Online Currencies, Bitcoin and Ethereum, the Future of Money?

This report examines the role of online currencies, specifically Bitcoin and Ethereum, in the global financial landscape. It explores the background of these cryptocurrencies, defining key terms like wallets, exchanges, and smart contracts, and delves into their benefits and risks. The study employs a comprehensive methodology, including a literature review, outlining the research philosophy, approach, and design, and details the data collection and analysis processes. The report presents data analysis findings through frequency analysis, descriptive statistics, and correlation, followed by detailed discussions. The conclusion provides recommendations for future research, assessing whether Bitcoin and Ethereum could improve the global economy and function as future currencies. The report provides an in-depth look into the applications and impacts of cryptocurrencies in the real world, assessing their potential and challenges.

Running head: ARE ONLINE CURRENCIES SUCH AS BITCOIN AND ETHEREUM THE
FUTURE OF MONEY OR JUST THE NEW GLOBAL FINANCIAL CRISIS
Research Topic: Are online currencies such as Bitcoin and Ethereum the future of money or just
the new global financial crisis
Name of the Student:
Name of the University:
Author’s Note:

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ARE ONLINE CURRENCIES SUCH AS BITCOIN AND ETHEREUM THE FUTURE OF
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Abstract
This paper has been constructed in order to have an understanding of the applications of the
crypto currencies in the real practical world. The thesis creates an explanation on the crypto
currencies and how these frameworks are segmented. The literature review explains the
suggestions and the comments that have been provided by several researchers. The methodology
has indicated the data that is collected and which are suitable for the research and thereafter an
idea can be attained with respect to the use of the data with the help of which the results that are
desired by the researcher can be obtained. The results that have been obtained addresses the fact
that crypto currencies like Bitcoin and Ethereum can improve the economy of the world and
thereby these currencies can used for future money.

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Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Background of the Study.......................................................................................................6
1.2 Purpose of the research........................................................................................................10
1.3 Research Aims.....................................................................................................................10
1.4 Objectives of the Study........................................................................................................11
1.5 Research Questions..............................................................................................................11
1.6 Scope of the Research..........................................................................................................12
1.7 Research Limitations...........................................................................................................12
Chapter 2: Literature Review.........................................................................................................13
2.1 Introduction..........................................................................................................................13
2.2 Crypto Currencies................................................................................................................13
2.3 Definition.............................................................................................................................14
2.3.1 Bitcoin...........................................................................................................................14
2.3.2 Wallet............................................................................................................................16
2.3.3 Bitcoin Exchanges........................................................................................................17
2.3.4 Ethereum.......................................................................................................................18
2.3.4 Wallet............................................................................................................................20
2.3.5 Smart Contracts............................................................................................................20
2.4 App Platforms based on Blockchain....................................................................................21

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2.5 Crypto currencies and their benefits and risks.....................................................................22
2.6 Crypto currency as a currency.............................................................................................24
Chapter 3: Research Methodology................................................................................................25
3.1 Introduction..........................................................................................................................25
3.2 Method Outline....................................................................................................................26
3.3 Justification for the choice of the methodology..................................................................26
3.4 Research Onion....................................................................................................................27
3.5 Research Philosophy............................................................................................................27
3.6 Research Approach..............................................................................................................28
3.7 Research Design..................................................................................................................29
3.8 Process of Data Collection...................................................................................................29
3.9 Quantitative Data.................................................................................................................30
3.10 Primary Data......................................................................................................................31
3.11 Secondary Data..................................................................................................................31
3.12 Sampling and Sample Size................................................................................................31
3.13 Data Analysis.....................................................................................................................32
3.14 Ethical Consideration.........................................................................................................32
Chapter 4: Data Analysis and Discussion......................................................................................33
4.1 Introduction..........................................................................................................................33
4.2 Frequency Analysis.............................................................................................................33

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Answer to Question No 1......................................................................................................33
Answer to Question No 2......................................................................................................34
Answer to Question No 3......................................................................................................35
Answer to Question No 4......................................................................................................36
Answer to Question no 5.......................................................................................................37
Answer to Question No 6......................................................................................................39
Answer to Question No 7......................................................................................................40
Answer to Question No 8......................................................................................................41
Answer to Questions No 9.....................................................................................................42
4.3 Descriptive Statistics...........................................................................................................44
4.4 Correlation...........................................................................................................................45
4.5 Discussions..........................................................................................................................47
4.6 Summary..............................................................................................................................47
Chapter 5: Conclusion, Recommendation and Future Work.........................................................49
5.1 Conclusion...........................................................................................................................49
5.2 Recommendation.................................................................................................................54
5.3 Future Work.........................................................................................................................55
Reference List................................................................................................................................56
Appendix........................................................................................................................................67

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Chapter 1: Introduction
The crypto or the virtual currencies in the current time period have become and practical.
The process is no longer a monopoly of the money that was used in order to buy contents that are
digital in nature but this aspect has observed significant development towards the society in
which the virtual money can be utilised in order to buy tangible services and goods (Hayes
2017). “European Central Money” addresses the process of virtual or crypto currencies as the
digital money that is not regulated and its application and roles are several among the industrial
sectors that are functional all over the globe. In the present time period, the schemes related to
crypto currencies are an alternative to the several processes of micro payment services that are
inclusive of the use of debits and credit cards and other various prepaid solutions for several
service providers and thereby this has been influencing the answer for the companies to
undertake events that would lead to customer loyalty. The organizations that have been looked
upon as the bigger players of the market are looking to take the benefits of the crypto currencies
that was available earlier in the gaming sector and in the frequent flying programs.
The development and innovation in the crypto currency processes and techniques has
created complex processes, which has led to several problems and threats. Gandal and Halaburda
(2016) addressed that crypto currency can create several practical issues in the global economy.
As it is seen that these kinds of currencies are functioning outside the real regulatory frameworks
in most of the nations, numerous sectors like the banking industries and telecommunication
industries are facing difficulties of how and when to go ahead with the process. The official and
the legal aspects that looks into the aspect of trading and issuing of trade in accordance to crypto
currencies are observed to be a new sector and therefore is in a requirement of specific kinds of
interpretations and it is observed that the issuers as well as the retailers needs to come under the

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extensive legal reproaches that is reliant on how the currency is applied. Dyhrberg (2016)
expressed that there are several stories that are associated to the accomplishments of the crypto
currencies in accordance to the strategy of monetization in order to create a specific profit level
and it is observed that the level of interest is considerable high during the time of the
development of the innovative solutions.
Eagar (2016) cited that this aspect is a new area and therefore there are new companies
and players in the market who are coming from several other industries in order to discover new
opportunities in order to expand their level of business. For instance, the area related to the
payment through mobile is related closely with the crypto currencies and it is observed that
transfer through electronic money is very close to the process of crypto currencies.
Delmolino et al. (2016) addressed that crypto currencies provide a very effective
opportunity for numerous industries in the present scenario however, in order to provide
extensive information to the companies that demands more of these information. On the other
hand, the materials that are accessible on the crypto currencies in the current time period is
distributed all over the internet and there have been numerous trials in order to explain the crypto
currency process. This method may be supportive in mitigating the gap that is existent among the
current global economy and the crypto currencies with the help of the development of
frameworks and models for the purpose of assessment.
1.1 Background of the Study
In the past decades crypto currencies are looked upon as the fictional money and this sort
of money was used generally in the gaming sector but there have been numerous researchers
who have debated that this kind of money is gaining power and can create a challenge to the

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actual paper currencies that are authorised by the government of different countries. The
definition of the crypto currencies has been known to be money that is not regulated and are
digital in nature and are intangible and this money is used for buying virtual goods from the
gaming companies. In the current time period, one of the most attractive factors is that the trend
of the crypto currencies are expanding and therefore are moving out of the virtual aspect and
therefore is being used in order to buy services and products that are tangible in nature. Dallyn
(2017) explained that the utilisation of crypto currencies have been limited to a specific level but
with the initiation of the branded companies who are creating their own crypto currencies, the
researcher has created a debate that it would have an extensive impact on the economy of the
actual world in the future course of time. Hence, it can be explained that crypto currencies are
becoming real.
The theory of crypto currencies is related to the days when internet was initiated and
during the time of the initial events related to customer loyalty in which one attained the
motivation for functioning for a specific company. Carrick (2016) explained that anything that as
a virtual value can be looked upon as crypto currencies. In the process of crypto currencies, there
exists no association among the practical world and the crypto currency and the money that is
created is saved within the fictional world itself. Brown (2018) explained that a small amount of
the crypto currencies are purchased by taking assistance of the real world money and this crypto
money is used by distinct companies or for the purpose of software based applications. The rate
of exchange is only valid in order to buy the crypto currencies as the money is not transferrable
but is exchanged with the real again at some point of time. However, on the other hand, the open
loop based crypto currencies can be exchanged the way real currencies are done and they have
the exchange rate for the purchase and sales of the currency.

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Bitcoin and the idea of crypto currencies in the current time period have become one of
the key topics of research in the current time period. Begušić et al. (2018) discussed that of a few
years ago digital currencies were looked upon as a “bubble” but in the current time period,
everyone is concentrating on how it needs to be regulated and connected with the conventional
money process and how to get accustomed to this scenario. Uncertainty towards the validity of
Bitcoin and crypto currencies has not decreased with time but there has been a rise in people who
are in support with the crypto currency process. These aspects have been fundamental in creating
this topic a vital trend in the current global economy.
The new and the innovative theory incorporates their own principles and beliefs which
are inclusive of the protocols that are decentralised, non-limiting transactions, lower level of
fees, breaches in the security, low rate of implementation and these issues have become the
significant issues that are related to crypto currency.
In the year 2009, Bitcoin was established and this was the first crypto currency. The
process makes use of the transactions that are peer-to-peer and is reliant in the open source
software known as Bitcoin Core. The open source code of Bitcoin leads to the development of
the crypto currency network and hence there are several alternatives for Bitcoin in the current
time period. The alternatives that are known to Bitcoin are Ethereum, Litecoin and Ripple and
each one of them have looked to improve the theory of crypto currencies by bringing in new and
innovative features (Ali et al. 2016). This paper has looked to assess Bitcoin and Ethereum as
these are two that have the largest trading volumes and market capitalisation. Furthermore,
Ethereum has introduced a platform that is block-chain based and this has becomes a foundation
for huge number of altcoins and applications that are decentralized, which is unlike the other
processes like the Lite coins that are oriented primarily to act for the network for the payments.

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Crypto currencies are becoming a key substitute to the current, conventional money and
therefore now it is not only a software process but is an approach that is completely digitalised
with respect to money. During the past few years, this process has been assisted by the societies
that have been enthusiastic and there has been a development of ideology on this approach even.
The assessments have been able to express the factors that have been behind the development of
the network along with their impacts on the aspect of the customers.
The theoretical section related to this topic is disclosed and assessed in order to attain the
aims and objectives that are related to this paper thereby assisting in giving out an insight on
Ethereum and Bitcoin along with their innovative features and the extensive technology related
to the blockchain (Fry and Cheah 2016). It would even explain that each of the two currencies
have been explained in an explicit manner. The Blockchain technology is assessed and is
addressed with the help of which the issues and the benefits related to crypto currencies along
with their probable development and potential use among all the sectors and their industries
would be known in an effective manner.
The analysis that is macroeconomic in nature is addressed with the help of the overview
of the value transformations of the currencies, their associated prices and the history of their
market capitalisation and the regulations that are implied towards the crypto currencies. The
views of the new and innovative trade theory with respect to the concept of crypto currencies are
even disclosed and are explained (Décourt et al. 2017).
The process of crypto currency is a difficult and a complex process and therefore
attaining information and understanding of the nature of the market and the interactions among
the crypto currencies and the real world currencies becomes a much more harder issue because

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with the help of this an understanding as to crypto currencies are beneficial for the economy or
can lead to financial crisis for a nation or the world as a whole can be known in an explicit
manner. This thesis will be supportive in creating knowledge and understanding of crypto
currencies and how it can bring in monetary stability and can be a beneficial or a threat to the
economy of the world.
1.2 Purpose of the research
The actual intention of this thesis paper is synthesizing and the reviewing the present
understanding and knowledge in order to create a new outcome that is with respect to the current
and the future development of the crypto currency methods. The idea is to bring in certain
additional current researches that are academic in nature by creating an enhanced structure and
network for the purpose of assessing the entire crypto currency aspect globally. Therefore, the
primary deliverance of the thesis is to fill in the gaps that are present between the several kinds
of crypto currencies and thereby make use of frameworks and models for assessing and
categorising the crypto currencies. It is observed that most of the researchers have focused on the
explanation of crypto currency and how it functions in the present world in accordance to the real
world paper currencies.
1.3 Research Aims
The thesis has the aim of assess whether the crypto currencies and in this paper Bitcoin
and Ethereum are essentially the future of the money or this kind of currencies would a threat or
a financial crisis for the actual world. This replicates that the present paper looks to undertake an
analytical assessment of the potentiality of the crypto currency. In the same manner, the present
paper even looks to assess the applications of both the conditions that are inclusive of the
comparative assessment of the crypto currencies that can have negative and positive after effects.

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Furthermore, this can be helpful in assessing the way it can establish a theoretical shift in the
entire economic condition. The concept of crypto currency has been a hot topic because of the
various factors and in the current time period when there are several countries that are making
use of these kinds of transactions, the necessity has increased in order to have an understanding
of whether crypto currencies are beneficial for the society or is brining financial issues that may
lead to financial crisis globally. The results that would be obtained would be helpful in
determining whether the countries which have incorporated this currency and the countries who
have not incorporated this currency are facing benefits or losses. Hence, this thesis paper tries to
assess the key and primary features of crypto currencies, changes in the crypto currencies,
diversified implications along with the outcome for understanding their effect from the point of
view of the economy.
1.4 Objectives of the Study
The specific objectives that have been recognised for this thesis paper are given as follows:
 To critically assess the features of the crypto currencies, their alterations, various
implications along with the outcome it would attain
 To assess the opportunities and the threats related to Bitcoin and Ethereum currencies for
gaining knowledge about their impact and influence on creating a shift of the financial
theories either for the good or for the bad.
1.5 Research Questions
The research questions are related to the questions that would be assessed by the
researcher with respect to the topic with the help of which an effective understanding can be
known so that the benefits and the threats of the crypto currencies namely Bitcoin and Ethereum