Topic: This case study investigates the growing use of crypto currency. Students are required to provide an analysis of this growing world industry. Students should base their discussion on at least...

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Answered Same DayOct 03, 2019

Answer To: Topic: This case study investigates the growing use of crypto currency. Students are required to...

David answered on Nov 26 2019
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Introduction
There is more growth in the cryptocurrency usage across the world, and it is increasing more challenges to an entire financial system as these transactions are highly private and difficult to track them. Trading in crypto-currencies is increasing on daily basis with a new currency coming out almost every other day. In this paper, crypt-currencies are analyzed in great detail.
Background
Growing dependence on online systems coupled with the decreasing trust in establishments has necessitated the birth of peer-to-peer payment system; Peer to peer cash system where one party sent cash to another party without passing through any financial institution. Using cryptocurrency one can avoid direct intermediaries who are charging more amount for every transaction made by them. Bitcoins are mainly used for the international transactions; about 86% of the cross-currency transactions (in crypto-currencies) are performed through the bitcoins (Hileman and Rauchs, 2017). Using bitcoins both the parties can forfeit the exchange rate loss associated with the currency conversion. Initially, trusted institutions were moderating the purchase and sale of bitcoins in the market.
Generally, international payments take more time for settlement that results in more waiting time for the recipient of the payments (Crypto Mining Blog, 2014). Using Bitcoins (or other crypto-currencies), all the transaction takes place instantly, and it reduces the overall time involved in such transactions. There is increase in the number of participants participating in bitcoin mining that created more trouble in handling the transactions through trusted institution (Greenberg, 2014). It resulted in direct transactions without intermediaries and less governed by the government about the transaction. Every transaction is verified based upon the user of the bitcoin or any other cryptocurrency. Any new transaction entered is broadcasted in all the nodes, and every node will collect the new transaction and block them.
They determine the proof-of-work for its block and then broadcasts them and nodes will accept the transaction if they are valid and not being spent (Nakamoto, 2017). Nodes will accept the block by working on creating the next block chain using a previous hash or creating a new hash. The level of privacy is higher by using the bitcoin. Initially cryptocurrency trading was done by a niche community (mostly engineers) but today many individuals are participating in the bitcoin mining activities (Johnson, 2015). It is essential to make an in-depth analysis about these cryptocurrencies especially bitcoins as the number of participants participating in bitcoin mining are increasing.
PESTEL
It is an external environment analysis that provides an outline about the influence of various factors over the cryptocurrency market.
Political Factor
. Government are considering either to ban or legalize the trading on cryptocurrency. There is an increase in the use of these cryptocurrencies because these transactions are not monitored by banking services or any government bodies. Therefore, more people prefer them. Political factors have a negative impact on the bitcoin market because they are focusing on implementing various strategies that would reduce the usage of these cryptocurrencies by the people (Durden, 2017).
Economic Factor
People are making a massive amount of profit using the bitcoin mining which is closed market; for instance in China alone the bitcoin mining is about $1.5 million per month. Bitcoin market capitalization is $73.5 billion and the current value of 1 bitcoin $4,483.55 (Kharpal, 2017). Ethereum is another cryptocurrency which has a market capitalization of $28.587 billion, ripple cash with $9.19 billion in the global market (Enjin Coin, n.d.). It provides more economic benefit to the individuals and to the business of handling the transaction.
Socio-Culture
There is a change in the social-cultural after the cryptocurrency introduction. Many people are unaware of the system that is how they are working and how to use while others are making the best use of the opportunity. Most of the business is making use of cryptocurrency, and there is more shift in the culture of buying and selling the pattern.
Technology
It is making use of high-end of technology, and it is an open system. The bitcoin block and nodes connection and movement are known transparently to all people. It is essential to have a high-end technology for mining the bitcoins (Coin Brief, 2014). There is various technology requirement for mining the bitcoins. There is continuous growth in the technology that is providing best facilities to the people in using them. An Even nontechnical person can use them using the best technology savvy or intermediaries who are trading them.
Environment Factor
The cryptocurrency market does not create any environmental problem as it completely based on online. But the bitcoin mining requires higher-end network and hardware setup that will cause carbon emission. Another primary concern is that it requires a...
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