CRYPTOCURRENCY essay

There have been major fluctuations in the price of cryptocurrencies because of security concerns and mafia involvement. The commonly discussed topics will be background of cryptocurrencies, the five largest cryptocurrencies, security, rates and the future of both Bitcoin and the USD. Introduction Cryptocurrency is a medium of exchange that utilizes cryptography to control the creation of new units and secure transactions. In recent times, cryptocurrency has emerged worldwide sensation known by many people. Though some are nerdy and not properly understood many individuals, governments, banks and some other organizations are aware of their existence and their value. The crucial thing about Santoshi is that he came up with an idea to create an electronic cash transfer system. In the nineties, there were many efforts to start electronic money but all was in failure.

After keen observation in all efforts of making digital money system fail, he tried to try to make an electronic cash system without a centralized unit. Satoshi thought of a peer–to–peer file transfer network. By this thinking, this idea became the origin of cryptocurrency. The main setback that each payment network obliged to unravel is to curb what is commonly referred as double spending – to avoid that one entity uses the exact charges twice. This is achieved by the main server that stores record about the equilibriums. In most cases for a decentralized network, the network is unavailable. In other words, you need every single unit of the network to carry out the task (Franco, 2015). Each peer that is in the network is required to be in possession of a list with all the transactions to verify if the upcoming transactions are true or there is an effort for a double spending to occur.

Confirmation is crucial in cryptocurrency. If the transaction is not confirmed, it is termed as incomplete and can be forged (WANG, 2018). For miners to make coins and have their transactions confirmed certain steps are followed. Bitcoin which is the leading cryptocurrency has a network of peers. Miners are the only ones allowed to make transactions. They are insecure as they are store online and therefore a hacker may hack the system and take the online wallets. Finally, many traders have found it difficult to understand how it works especially with Bitcoins (Reichental, 2017). Is Cryptocurrency Money? Recent studies show how difficult it is for the Cryptocurrency to supply growth, credibility and stability which are the three core functions of money. Being digital currencies operating in a network connectivity, they can simply attain the functioning of a medium of exchange.

Cryptocurrencies are inadequate due to the fluctuating nature and inflexibility constant supply. It is compelled to retain its stability in order to be called as safe. Currently, cryptocurrencies are at a maximum risk, with high-return asset and it is also will be the foreseen future. To ensure all this the price of the cryptocurrencies needs to be stable in the market. If this does not happen, then cryptocurrency cannot be termed as a safe haven. Rapid Increases/Decreases in Cryptocurrency Values. Upgrading of SegWit software leads to increase in prices of Bitcoin as it can be traded easily. Another external factor affecting Bitcoin is mass media and global advertisements. This can affect either negatively or positively. Through its content evaluation on the media daily it can affect its rise or fall off its value.

Lastly are the political campaigns. (WHITE K, 2018) Comparing and Contrasting the Cryptocurrency Crisis with Prior Currency Crises A currency crisis is a sudden and unexpected rapid fall in the value of the currency. The US Dollar is stable as compared to Bitcoin since it is bigger. Federal Reserve System and the US government regulates and controls it. Bitcoin lacks enough support, thus, a small currency with a rate of a small number of billions keeping fluctuating its value. The increased value has of Bitcoin been major for its hype. Other governments have remained reluctant on the issue. However, some of the economic giants have shown that they are not ready for this system. Cryptocurrency has a lot to offer; anonymity, no middle-man is required, easy to transfer.

Hence, they are a better method of transaction and store of value (Molyneux and Iqbal, 2016). Governments operate successfully through control and oversight. Advantages The most evident advantage of making an international transaction using USD is safety. Transactions are risk-free. As every party involved is identified. In case of fraud, all parties involved are liable. cryptocurrency is not risk-free. National currencies induce high transaction fees since the third parties need to make a profit and government need to collect revenue through taxes. Since cryptocurrency transactions have no third-party involvement, the transaction costs are kept very low. In addition, transaction done through the national currency is slower than in cryptocurrency. In cryptocurrency, transactions are done quickly, eradicating the annoyance of typical authorization requirements and waiting periods.

Benefit of Cryptocurrencies to Multinational Corporation in Volatile Markets Converting cryptocurrency to the current fiat currency regardless of market rates helps to counter the volatility of cryptocurrency. In the end, instability generates as many opportunities as losses (Judmayer et al. Conclusion Money is one of the most treasured and desirable commodities worldwide. A recent innovation of cryptocurrency has brought about controversies among governments and financial institution such as banks. Forecasting the five-year anticipated value of either Bitcoin and Ethereum necessitates considering several factors. The currency is not controlled by any government. l. ]: ALMA CLASSICS. Franco, P.  Understanding Bitcoin. Chichester, West Sussex: Wiley. Bitcoin: First Decentralized Payment System.  International Journal Of Engineering And Computer Science. Molyneux, P. and Iqbal, M.  Banking and Financial Systems in the Arab World.