Cryptocurrency Essay

Open, View, and/or
Download this Document

Total Length: 1805 words ( 6 double-spaced pages)

Total Sources: 7

Page 1 of 6

Cryptocurrencies: Background, Details, Advantages

Anyone mildly acquainted with cryptocurrency has probably heard of a currency called Bitcoin. Bitcoin and the success of bitcoin are what helped surge interest within the entire cryptocurrency market, as many view bitcoin as the pioneer of the market as a whole. According to the authoritative website cointelegraph.com, “A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled” (2017). The marketplace of cryptocurrency now has several digital-based coins, and many investors view it as where the future of money is headed, though to many it remains a nebulous somewhat mysterious place. 

Most Popular

As stated earlier, bitcoin is probably one of the most popular and most well known forms of cryptocurrency, and this is largely because its success helped put other cryptocurrencies on the map. In November of 2017, bitcoin surged in the stock market, instantly transforming it from an alternative investment, to a viable option of future currency trading. At this time in the stock market, the price of a single bitcoin was $3,000, something that was unheard of just a few months earlier. The next month, it was as high as $19,000. These dramatic upward trending movements guaranteed one thing: cryptocurrency was going to definitively change the future of finance and how money is traded. Since bitcoin has enjoyed all of the success within this market, it has in many ways set the standard for all cryptocurrencies to copy. Virtually every cryptocurrency have worked hard to brand themselves as better versions of bitcoins, and some of them are in fact easier to use—though usually at a certain cost. For example, Charlie Lee (MIT grad and Google engineer) launched Litecoin in 2011 as a peer to bitcoin, sometimes being referred to as the “silver to bitcoin’s gold” (Bajpai, 2017). “Litecoin is based on an open source global payment network that is not controlled by any central authority and uses ‘scrypt’ as a proof of work, which can be decoded with the help of CPUs of consumer grade” (Bajpai, 2017). Some users of Litecoin like it because it offers faster transaction validation and some find that it is being accepted more and more.

Ethereum debuted in 2015 as a specific type of decentralized software platform that empowers something known as “Smart Contracts” and Distributed Applications to be developed and used without any waiting or intrusion from third parties. Thus, the cryptocurrency, Ether, allows one to engage on the Ethereum platform and trade virtually anything one wants (Bajpai, 2017). The privacy and security that this platform offers is very appealing to many investors and those in the tech world. 

Finally, there’s a cryptocurrency referred to as Zcash, one that is also decentralized and open-source (Bajpai, 2017). Zcash appeals to many users because of the extreme privacy it offers and the ability to have transparency with certain transactions, based on the users preferences and decisions (Bajpai, 2017). Hence, this gives the user an added amount of security and privacy—since bits of data such as the sender, recipient and other details remain concealed. Zcash also allows the user to engage in shielded transactions for extra security, which means each exchange is swathed in a cryptographic technique (Bajpai, 2017).

Stuck Writing Your "Cryptocurrency" Essay?

View All Our Example Cryptocurrency Essay

Have A Custom Example Essay Written



Use of Cryptocurrencies: Legal and Illegal

The use of cryptocurrencies demonstrates just how and why people find them so exciting. Cryptocurrencies are decentralized, meaning no corrupt banks or other institutions have a hand in them, they orbit around anonymity, and they’re essentially electric and digital at their core means that they can drastically alter how we live. Examining some of the more common uses of cryptocurrencies in this day and age can help provide insight into how they will be used in the future and how they will continue to develop. For example, some experts believe that cryptocurrencies will be the way that people battle electoral fraud, or any other corruption that is money-based—due to the incorruptibility of the blockchain (Medal, 2017). Speaking of corruption, more and more charities are accepting cryptocurrencies as a way to thwart corruption from within charitable organizations and foundations. “Because of its ability to keep companies accountable, blockchain can eliminate many problems occurring with charities, such as fund leaks. That's why the World Food Programme (WFP) is using blockchain to securely distribute cash assistance to the hungry” (Medal, 2017). More and more websites connected to travel are using bitcoin so that travelers can use them to book airfare, hotels and car rentals (Medal, 2017). Likewise, there has been an uptrend in the number of institutions for higher learning that are accepting bitcoin. It has not just been schools in the United States, but universities in Switzerland, Germany and Cyprus who are taking the currency from students to allow them to pay for tuition and fees (Medal, 2017). This is very significant, since universities are major institutions with major funding and their actions with currencies and their behavior around the stock market can influence the direction of the future very significantly. Finally, more and more fundraising websites are using cryptocurrency to as means of bankrolling their ideas and the things they want to accomplish. While sites like IndieGoGo and Kickstarter are still taking traditional forms of payment, other startups are looking to gather capital using cryptocurrency. This is largely due to a variety of reasons but its transparency and how easy it is track definitely makes it appealing to investors (Medal, 2017). 

Naturally, given how private, anonymous and secure cryptocurrencies are, they inherently appeal to those who desire to commit crimes. A recent study conducted found that almost half of all Bitcoin transactions were connected to illegal activity (Foley et al., 2018). “For example, approximately one-quarter of all users (25%) and close to one-half of bitcoin transactions (44%) are associated with illegal activity. The estimated 24 million bitcoin market participants that use bitcoin primarily for illegal purposes (as at April 2017) annually conduct around 36 million transactions, with a value of around $72 billion, and collectively hold around $8 billion worth of bitcoin” (Foley et al., 2018). Some experts have concluded that this is precisely why the price of bitcoin has soared so high, because criminals are using the currency to bankroll expensive trades such as the illegal drug industry. Criminals like the anonymity that bitcoin provides them with, and with that anonymity, the inherent protection. Hence, bitcoin is used not….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


Related Essays

Cryptocurrency

Cryptocurrency A cryptocurrency is a medium of exchange (currency) that is digital in form, non-governmental, and relies on cryptography for its security (Investopedia, 2018). It is the latter component of the definition that gives cryptocurrency its name. The vast majority of currency in the world comes in the form of exchangeable units that are issued and have their value controlled by governments. Nations will either allow their currency to float freely on the market, where the value derives in part from supply and demand, and is backed by the ability… Continue Reading...

Trading Strategy of Cryptocurrencies

be used to formulate trading strategies. However, Qunitero (2018) notes that there is more than one cluster in the cryptocurrency space—in fact, there are numerous ones. Identifying them and understanding the relationship among assets is critical to devising a successful trading strategy. Identifying clusters as part of developing a trading strategy for cryptocurrencies could help make the space far more viable for investors and speculators alike. “There do seem to exist natural clusters of coins that move in tandem,” Quintero (2018) states—which means more cryptocurrency samples need to be examined in order to clarify the seeming relationships. 2. Method and Results Part I: Developing a Method The problem of… Continue Reading...

Bitcoin Essay

The finance world is finally abuzz with news of bitcoin and other cryptocurrency. What are cryptocurrencies, and what do potential investor need to know about them? This bitcoin essay offers a brief background of bitcoin and other cryptocurrencies, also referring to the blockchain software that underlies them. Then, this bitcoin essay explores what financial analysts say about the viability of bitcoin as an investment. Finally, this essay will how and why people purchase bitcoin, as well as how bitcoin can be used as both currency or as investment. Because they are taking the financial world by storm, is important to learn about… Continue Reading...

Banking and Blockchain Technology

high as $19,511 or more, before plummeting to $6,750 in mid-April of this year. “The cryptocurrency has fallen more than 65 percent since peaking in December at $19,511. Bitcoin rose 2.2 percent to $6,750 on Monday” (Wolf, 2018). So many people are interested in replicating the success of bitcoin during its meteoric and fast rise, that other digital currencies have been created. Furthermore, many companies have become accepting digital currency, with the most popular option being bitcoin. Some companies that accept bitcoin are Expedia, Microsoft, and Overstock (Heston, 2018(. Other digital currency competitors to bitcoin are Ethereum, ripple, and BitcoinCash. Ethereum was developed by a… Continue Reading...

Dark Net Essay

cryptocurrency for their own use.  Being flipped from a user to a victim is always a risk in criminal activity, and the frenzy surrounding nucleus suddenly becoming unresponsive highlights that this possibility exists even in the realm of cybercrime. AlphaBay Market was another famous dark net marketplace.  It operated on the Tor network and rapidly expanded to about ten times the size as Silk Road.  It was used for a variety of types of illegal transactions, but was probably best known for trafficking in identity theft.  It was targeted by… Continue Reading...

Blockchain

friction, especially in business (Marr, 2018). Over the past couple of years, blockchain has been unpacked from cryptocurrency and a wealth of applications using the technology are in development. Many observers predict that blockchain technology will revolutionize a wide range of businesses (Marr, 2018). What is Blockchain? The heart of blockchain is the concept of the distributed ledger. The original idea behind Bitcoin was to develop a peer-to-peer currency, in the sense that a store of value and unit of exchange could be created without the intermediary of a central bank. The value of this currency would be determined by the forces of supply and demand, based… Continue Reading...

sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Cryptocurrency" (2018, April 30) Retrieved April 29, 2024, from
https://www.aceyourpaper.com/essays/cryptocurrency-2166828

Latest MLA Format (8th edition)

Copy Reference
"Cryptocurrency" 30 April 2018. Web.29 April. 2024. <
https://www.aceyourpaper.com/essays/cryptocurrency-2166828>

Latest Chicago Format (16th edition)

Copy Reference
"Cryptocurrency", 30 April 2018, Accessed.29 April. 2024,
https://www.aceyourpaper.com/essays/cryptocurrency-2166828
   

Open, View, and/or
Download this Document
order custom essay example