Bitcoin report

Bitcoin is the first Cryptocurrency to be developed and has seen electronic currency industry evolve from crypto-mathematical or a Block-chain concept into an actively expanding economy. The Bitcoin global market is currently estimated to be more than 10 billion dollars and millions of people and businesses are accepting and adopting the Cryptocurrency concept. Bitcoin has over 17 million units in circulation and to improve its liquidity it has split into two Cryptocurrencies; Bitcoin cash and Bitcoin. Government regulations, heightened volatility and security concerns are some of the challenges highlighted to be facing Cryptocurrencies today. Introduction The money and finance world is transforming every day and new financial transaction’ paradigms are being created through innovative financial instruments, channels, systems and digital assets which facilitates alternative capital conduits (Burniske & White, 2016).

Through the digital era, it has evolved with elements of computer science and mathematical theory to become a way to secure information, money online and communications. Cryptocurrencies were first developed as a side product of a different invention; the Bitcoin inventor Satoshi Nakamoto had no intentions of inventing a currency. In 2008, Satoshi suggested that he was only developing “A peer-to-Peer Electronic Cash System”. However, his invention was significant in building decentralized digital cash system. Many failed attempts were made in the 1990s to develop digital money; therefore, building digital cash system with no central entity became the Cryptocurrency birth. Ethereum has developed itself as a family of Cryptocurrencies and not only a single currency through its clones and several host tokens such as Augur and DigixDAO.

Ripple has a market capitalization of $290,446,848 with a 24 hour volume of $2,386,420 and is more about IOUs network process than Cryptocurrency itself. It serves more as a token to protect network against span and does not provide medium to exchange and store value. Ripple has a native currency- XRP which has no medium of exchange or store value and the XRP-token is distributed on will by the Ripple company. According to New Hampshire & Hunt, (2018), Ripple been is pre-minded for this reason and community have dissed it that does not qualify a real Cryptocurrency and not good enough to store value. Monero on its part introduced ring-signatures and cryptonite algorithm to enhancing cutting through such trail. By 2016, Monero’s popularity picked and some dark-net-markets accepted Monero as a currency (Dannen, 2017).

 As a result steady price increase was recorded but actualusage of Monero still remains low. Ethereum Classic which is developed by Ethereum developers based on smart contract without consensus has a market capitalization of $80,817,441 and a usage volume of $603,573 in 24 hours. Functions of money can be evaluated effectively through stability, credibility and the monetary supply growth. For example, US regulators rejected the first proposal for Bitcoin Exchange Trading Fund in March 2017. This could have been a game changer, and with large institutions failing to accept and adopt the currency, it is difficult to see how it will grow to become widely accepted currency. However, various attempts are being made to get Cryptocurrencies such as Bitcoin listed and this may determine their success in the future (Ammous & Saifedean, 2015).

Part 2. Similarities/Dissimilarities of a Cryptocurrency crisis with a currency crisis The graph below shows that Bitcoin value increase by 1600% over the past two years. al, 2016).   An example is the Cyprus banking crisis where funds were seized by the government and restrictions led to drastic price changes. China’s decision to ban coin offerings and several Bitcoin exchanges for example made the Bitcoin value drop by 29% within 24 hours. The bubble has not burst for Cryptocurrencies as they still have a large number of enthusiasts. However, if most businesses and people stop accepting Cryptocurrencies, then the “bubble” might burst in the future. Russia is considering regulations to control and reduce the risk of fraud and to create a transparent tax regime in virtual money trading and Cryptocurrencies operation; it aims at increasing the tax revenues.

According to Michael & Lloyd(2015), the central banks accuse Cryptocurrency of lack of internal risk controls like in Beijing and Shanghai and therefore governments are concerned with vulnerability to drug deals, money laundering, illegal fundraising and smuggling. Whether the government and the central banks will allow Cryptocurrencies to continue is still a matter that will unfold in the future. However, I think Cryptocurrencies such as Bitcoin has been able to maintain stability for over 8 years and have made the central banks recognize its potential upsides and downsides. Bitcoin mainstream acceptance has resulted to central banks trying to develop their own digital currencies in an effort to destroy rival competition. With globalization on the rise, Cryptocurrencies will become popular as it easier to transfer money in different locations globally.

However, if Cryptocurrency is to become a global currency various factors will be a drawback. Cryptocurrencies have proved to be very volatile and their prices fluctuate often and drastically considering that no centralized institution or government ties them and its vulnerability to cybercrime and transparency will remain to be an issue. References Burniske, C. & White, A. Unpublished; slides of preliminary findings (state: April 2016). Ammous& Saifedean. "Economics beyond Financial Intermediation: Digital Currencies' Possibilities for Growth, Poverty Alleviation, and International Development. " The Journal of Private Enterprise, 30(3): 19-50. Casey, Michael J. London, Henry Stewart Talks. https://hstalks. com/bm/3626/. Rockefeller, J. D. Concord [N. H. ], State of New Hampshire, General Court. Crypto Merchant Association.  Crypto retailer. International Journal of Electronic Commerce. https://nls. ldls.