Cryptocurrency Essay

Total Length: 655 words ( 2 double-spaced pages)

Total Sources: 2

Page 1 of 2


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 of that state to raise revenues. These are considered to be the strongest currencies. Other currencies have values that are fixed by the state – as a medium of exchange those official values may or may not reflect the ability of the state to raise funds, but the value is enforceable by law regardless.

A cryptocurrency is different in that its value is derived solely by its supply and demand. The demand for cryptocurrency is driven by consumer trust in the currency as a medium of exchange, which is common to all currencies, and by the demand for a currency that is not subject to government control.
The lack of oversight over the exchange of cryptocurrencies makes them especially popular for illicit activity (Investopedia, 2018), and from that they can derive demand.

Bitcoin was introduced in 2009 and has become the most well-known of the cryptocurrencies. A major feature of Bitcoin that has helped it rise to prominence is the idea of the blockchain. Bitcoin works when the Bitcoin client software generates" unique, mathematically linked keys", one private and one public, and these keys are used to bring two parties together and verify that the money being exchanged is real (Simonite, 2011). The client will then verify the transaction by sending it to all other users who are online. The transaction will be logged by Bitcoin miners who race to solve a cryptographic puzzle (Simonite, 2011). This process in theory guarantees security and trust in the transaction.

The mining is the means by which Bitcoins are created, answering the supply part of the equation. The necessity for transactions to be verified and entered into the public log means that the system only works when there is incentive to perform these tasks, and the creation of Bitcoin for the….....

Show More ⇣

     Open the full completed essay and source list


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


Investopedia (2018) Cryptocurrency. Investopedia. Retrieved April 13, 2018 from

Simonite, T. (2011). What Bitcoin is, and why it matters. MIT Technology Review. Retrieved April 13, 2018 from
Related Essays

Trading Strategy of Cryptocurrencies

(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

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...


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 13) Retrieved July 4, 2022, from

Latest MLA Format (8th edition)

Copy Reference
"Cryptocurrency" 13 April 2018. Web.4 July. 2022. <>

Latest Chicago Format (16th edition)

Copy Reference
"Cryptocurrency", 13 April 2018, Accessed.4 July. 2022,