Literature Review: Contributing Part of Cryptocurrency like Bitcoin
1) The group is to meet on a regular basis, both within and outside of class. Brief details of these meetings should be recorded including date and time of meetings, who attended, and a short paragraph detailing what was discussed. This information is to be included in the appendix of your group report.
2) The group is required to use at least one form of groupware technology to assist in the sharing of information. For example: a discussion forum within Moodle, Facebook, Google Docs, Drop box, Trello or any other suitable form of groupware. A review of the groupware used (2-3 paragraphs) should be included in the appendix of your group report.
3) The group is required to redevelop the initial mind map that was developed for the annotated bibliography. The new mind map should take into account the readings of all of the group members. A copy of the final mind map is to be included in the final report.
4) The group is required to write a literature review on the topic that they have selected and should be structured according to the outline below. The report should read as if it was written by one person, ie the fonts, formatting and tone of voice of the writing should all be the same. In order to complete the report the following tasks are required to be undertaken:
- Each student is to write a 1000 to 1500 word literature review on their section of the mind map. This piece of writing may be based upon the reading undertaken to complete the annotated bibliography and/or on any extra resources that have been sourced.
- Each group member’s writing should be proof-read for use of reference material, typing, spelling and grammatical errors by another member of the group and the writing generally reviewed in a constructive manner. The review can take a number of forms including:
- A marked-up copy of the commentary with suggested changes to be made; and/or
- Two to three paragraphs indicating the suggested changes and improvements.
- A review done by each member of the group is to be include in the final report.
- Each student should revise their writing using the review provided by the group member. Note: only if the feedback is appropriate.
- The group should collate their final pieces of writing into a single report. Each individual literature review should have a heading indicating the topic and author.
- The group is to write an introduction and a conclusion for the report.
Bitcoin – The unique Cryptocurrency of the millennium: In the technological era, the technical terms such as cryptocurrency and bitcoins have captured the attention of both tech-savvy individuals and the internet experts. As per the published article “A Short Introduction to the World of Cryptocurrencies” by Fabiana Schar and Aleksander Berentsen, the bitcoin first came into existence with a white paper that was published in the year 2008 (Berentsen & Schar, 2018). The creators of the model intended to introduce a “cash-less payment model” that would allow electronic transactions instead of the physical cash-based transactions. In order to help understand the readers the concept of the bitcoin, the authors have highlighted the cash transactions as well as the electronic payment system (Abdi, 2014).
The major difference between the traditional payment model and the electronic payment via bitcoin is that there is no involvement of physical cash in the later system. The bitcoin is a virtual monetary unit that has no physical or tangible representation (Abramaowicz, 2016). In order to effectively use this currency, it is necessary to establish at all times, the total number of monetary units that exist and the number of new monetary units that have been created. Such an approach is highly important to make sure that all the involved participants consent about the ownership rights relating to the digital currency units.
Cryptocurrency has revolutionized the payment system: In the recent times, the cryptocurrency has brought about transformational change in the online payment system and according to Chiu and Koeppl, in the coming years the different kinds of cryptocurrencies will expand at a faster rate. Various kinds of cryptocurrencies have come into existence such as the Litcoin, Zcash, Dash, Ripple, Bitcoin and many more (Ahmad, et al., 2018). But the most successful cryptocurrency that has captured the attention of the tech freaks is the Bitcoin. Appendix 2 highlights the value of one Bitcoin unit in terms of the U.S. dollar. This rising trend shows that the innovative currency has gained high popularity and it will further gain more popularity due to its usefulness and unique value.
Most of the types of cryptocurrencies are fundamentally built by the professional computer experts and scientists who emphasize on overall feasibility, effectiveness and security aspects of this virtual payment model. Chiu and Koeppl in their research paper have defined the term cryptocurrency as the digital “record-keeping device” that uses the balances for the purpose of keeping track of different responsibilities or obligations from trading and that is openly known to all the traders (Badertscher, et al., 2018). The simplicity of using the Bitcoin cryptocurrency has been presented in Appendix 3.
Without this new digital payment system, people need to use the money that they have in their bank accounts by taking the help of an intermediary so that they can transfer it to the bank account of another party. But when people use the cryptocurrency system, they just need to enter into the Bitcoin networking system in order to carry out a hassle-free payment transaction (Chan, et al., 2017). The Bitcoin network is fundamentally peer-to-peer network that works on the “decentralized distributed self-clearing ledge” system. The Bitcoins are the virtual currency units that are issues on the basis of a fixed set of rules so that a sound money model can come into existence that cannot be controlled by any central authoritative body or a malicious controller.
Bitcoin – One of the best innovations of the century: Bitcoin is the very first decentralized cryptocurrency that has gained tremendous following from various sections of the society including the media, the financial industry and its experts and the academic professionals. According to the published article “A statistical analysis of cryptocurrencies” by Chan and Nadarajah, the global interest in Bitcoin has increased in the past few years (Chan et al., 2017). In the United Kingdom, the government is thinking of paying various research grants by using the online cryptocurrency – Bitcoin. Similarly, various Information Technology-based organizations are accumulating the Bitcoins so that they can effectively defend against harmful ransomware (Darlington III, 2014).
Even the U.S. Federal Reserve” has expressed its interest in this digital payment model. It is encouraging the central banks in the nation to explore new areas in the financial industry. A number of research studies have been carried out on the Bitcoin cryptocurrency in order to highlight the main advantages of the virtual payment system (Duong, et al., 2016). Schar and Berentsen in their article believe that the optimum potential of the Bitcoin model can be properly understood in the coming years. In the current scenario, the best possible application of this virtual currency model is as an asset.
In the near future, there is a high possibility that the Bitcoin currency will strengthen as “cryptoassets” and develop into a useful investment instrument. Similarly, the strong data integrity model of the Bitcoin technology could encourage the people in the future to gain better knowledge on the cryptocurrency system (Fry & Cheah, 2016). In the current times, the robust data integrity system makes sure that any kind of a manipulation attempt is made apparent to the users. All these key features of the Bitcoin cryptocurrency indicate that the virtual Bitcoin unit has a lot of scope in the current times as well as in the near future.
Benefits of Cryptocurrency: The key advantages of the digital currency includes easy access to the general public, quick and easy payment system, fast and proper settlements, lower fees charged to the users, robust security model, private system, lack of any kind of chargeback, no involvement of third party, etc. The cryptocurrency is easily available to the people (HERBERT & Stabauer, 2015). Due to the simple and effective non-cash system, most people can have access to this electronic payment model irrespective of the location of the users. The users can easily make payment by using this online currency. In order to make the transactions, one just needs a few seconds. Bitcoins make sure that the waiting time of the users is minimum.
The Bitcoin users do not need to wait for a long time while carting out their business activity and receive money. The easy settlement model makes sure that the delays are eliminated in the virtual transaction model. In case of the cryptocurrency system, a very small charge is cut from the users which are almost negligible (Iwamura, et al., 2014). The transaction charge is very low and only the buyers in the transaction setting get affected by it. Another major advantage of this innovative cryptocurrency is the high level of security. All the transactions that are carried out are highly secured as the system uses the “NSA created cryptography” system.
It is not possible for an individual other than the owner of a wallet to make use of it to make a payment transaction. This secure model has further increased the popularity of the Bitcoin technology in the current times. There is limited or negligible scope for the outsiders to steal the virtual identity of a Bitcoin user (Kazan, Tan & Lim, 2015). The authentic and legitimate users have the option to create a proxy ID for themselves so that they can ensure that no one can know anything about their private information and data. All these advantages of the new and innovative Bitcoin cryptocurrency have led to the sudden surge in the overall popularity of the virtual currency system.
It is expected that the new digital cryptocurrency system can bring about transformational changes in the online payment model. When this concept came into existence it captured the attention of a large number of market audience due to its unique attributes and feasible use. The innovative element of the digital transaction system eliminates the chances of fraud (Khairuddin, et al., 2016). The unique nature of the technological currency system encourages all the involved parties to be honest and sincere while getting involved in an online payment transaction. Since a complete layer of the “banking bureaucracy” is removed from this digital; current platform, the users find it easier to use this model as compared to the traditional cash-based model.
Latent aspects of the cryptocurrency model: According to the article “Cryptocurrency: Beneath the bubble” by Sundeep Gantori, since the very inception of the cryptocurrency concept in 2008, the cash-less transaction has surged in its popularity and overall effectiveness (Li & Wang, 2017). Currently it is really early to say whether this virtual currency system has the power to be at par with the mainstream model of exchange or not. In spite of this uncertainty, the cryptocurrency especially the Bitcoin has brought about a significant level of changes in the payment system and it has increased the instances of cash-less transactions on the virtual platform.
According Rosen, et al, today there are over 1000 cryptocurrencies whose aggregate value is more than that of IBM’s market capitalization. This statement shows the power of the cryptocurrency in the digitalized era. The cryptocurrency technology and the Bitcoin technology has various advantages and benefits that are currently not present in the traditional cash-based model (Rosen, et al., 2014). The distributed set-up of the virtual payment system creates a set of advantages over the currency that is backed by the national governments. The author of the article is not exactly sure of this innovative cryptocurrency system as it is still in its inception or early stage.
Similarly, according to the published article “How Cryptocurrency begun and its impact to financial transactions”, the emergence of the Bitcoin cryptocurrency brought about a vital degree of change in the existing monetary and financial system due to its unique feature (Mining, 2018). Today, various people, all around the globe have the option to have access to the digital currency so that they can use it in a safe and secure virtual setting. Some of the core aspects of the virtual model include the stability that is offered to the online users or member and the lack of government intervention. The author just like Vandervort, Gaucas & St Jacques stats that the future of the cryptocurrency including the Bitcoin cannot be revealed in the present times as a number of factors would determine its popularity and success (Vandervort, Gaucas & St Jacques, 2015).
The future of Cryptocurrency: The Bitcoin cryptocurrency uses the “peer-to-peer” technological model that enables different kinds of functions such as the issuance of currency, the processing activities relating to the transactions, and the verification process. This technology-based virtual model has grown to a large degree just in a decade and it is expected that the trend is likely to continue in the future as well (Vigna & Casey, 2016). The unique advantages of the Bitcoin cryptocurrency that have been highlighted in the previous section of the literature review makes this cryptocurrency quote different and unique as compared to the “fiat currency model” which is backed by the government of different nations.
In the recent years, this Bitcoin technology has come under high scrutiny so that the overall security aspects of the new model can be strengthened for its users. The main limitations that are presently faced by this innovative cryptocurrency model include the threats and risks from the online hacker, erase of the sensitive data from the computer system, etc (Abdi, 2014). In spite of the challenges that are faced by the Bitcoin cryptocurrency, the total number of the merchants that have started using the cryptocurrency has increased in the recent years. In order to boost the merchants to use this virtual monetary system, there is need for the customers and the market audiences to accept and have faith in this virtual cryptocurrency model.
Currently, the exact future of the Bitcoin cannot be determined due to the dynamic nature of the technology and innovation. The emergence of the “Bitcoin” currency system has sparkled a lot of debate about the future of the cryptocurrency and its application for the customers in the coming times (Abramaowicz, 2016). In order to increase the overall longevity and reliability of this model there is need for the technological experts to effectively and thoroughly address the current challenges that appear before the system today so that they will not act as bottlenecks for the cryptocurrency model in the near future. In the coming years, the future of the Bitcoin cryptocurrency can be understood in a better and simplified manner.
Abdi, B. (2014). Is Bitcoin here to stay?-A case study on cryptocurrency, Bitcoin.
Abramaowicz, M. (2016). Cryptocurrency-based law. Ariz. L. Rev., 58, 359.
Ahmad, F. A., Kumar, P., Shrivastava, G., & Bouhlel, M. S. (2018). Bitcoin: Digital Decentralized Cryptocurrency. In Handbook of Research on Network Forensics and Analysis Techniques (pp. 395-415). IGI Global.
Badertscher, C., Garay, J., Maurer, U., Tschudi, D., & Zikas, V. (2018, April). But why does it work? A rational protocol design treatment of bitcoin. In Annual International Conference on the Theory and Applications of Cryptographic Techniques (pp. 34-65). Springer, Cham.
Berentsen, A., & Schar, F. (2018). A Short Introduction to the World of Cryptocurrencies. Federal Reserve Bank of St. Louis Review, 100(1), 1-16.
Chan, S., Chu, J., Nadarajah, S., & Osterrieder, J. (2017). A statistical analysis of cryptocurrencies. Journal of Risk and Financial Management, 10(2), 12.
Darlington III, J. K. (2014). The Future of Bitcoin: Mapping the Global Adoption of World’s Largest Cryptocurrency Through Benefit Analysis.
Duong, T., Fan, L., Veale, T., & Zhou, H. S. (2016). Securing Bitcoin-like Backbone Protocols against a Malicious Majority of Computing Power. IACR Cryptology ePrint Archive, 2016, 716.
Fry, J., & Cheah, E. T. (2016). Negative bubbles and shocks in cryptocurrency markets. International Review of Financial Analysis, 47, 343-352.
HERBERT, J., & Stabauer, M. A. R. T. I. N. (2015). Bitcoin & Co: An Ontology for Categorising Cryptocurrencies. M-sphere: Book of papers, 45-55.
Iwamura, M., Kitamura, Y., Matsumoto, T., & Saito, K. (2014). Can we stabilize the price of a Cryptocurrency?: Understanding the design of Bitcoin and its potential to compete with Central Bank money.
Kazan, E., Tan, C. W., & Lim, E. T. (2015). Value Creation in Cryptocurrency Networks: Towards A Taxonomy of Digital Business Models for Bitcoin Companies. In PACIS (p. 34).
Khairuddin, I. E., Sas, C., Clinch, S., & Davies, N. (2016, May). Exploring motivations for bitcoin technology usage. In Proceedings of the 2016 CHI Conference Extended Abstracts on Human Factors in Computing Systems (pp. 2872-2878). ACM.
Mining, W. (2018). How Cryptocurrency Begun and Its Impact To Financial Transactions. Retrieved from https://www.bitcoinmining.com/how-cryptocurrency-begun/
Li, X., & Wang, C. A. (2017). The technology and economic determinants of cryptocurrency exchange rates: The case of Bitcoin. Decision Support Systems, 95, 49-60.
Rosen, E., Wengrowski, E., Clark, G. D., & Gao, X. (2014). Bitcoin: An Empirical Study of Cryptocurrency.
Vandervort, D., Gaucas, D., & St Jacques, R. (2015, January). Issues in designing a Bitcoin-like community currency. In International Conference on Financial Cryptography and Data Security (pp. 78-91). Springer, Berlin, Heidelberg.
Vigna, P., & Casey, M. J. (2016). The age of cryptocurrency: how bitcoin and the blockchain are challenging the global economic order. Macmillan.
Initial individual pieces of writing and reviews