Cryptocurrency is a digital currency. It is also popularly known as a 21st-century unicorn as it is the money of future. It is a currency where encryption techniques are taken into use so as to formulate unit generation of currency. It is also said to be the revolution amongst all the types of currencies. It has a value owing to the people who perceive that it has a value just like other currencies (Brennan& Lunn, 2016). There are various kinds of currencies. Some of them are supported by precious metals while the remaining are supported by nothing and still has value for users construe it has value and use it to initiate transactions.
Cryptocurrency was invented so as to not depend on the central bank for it acts as a tool of exchange and as a place for storing assets. The price of many items is dependent on their demand and supply. On account of its utility and limited supply, precious metals derive their value and their price always fluctuated owing to its supply and demand. It is observed that Bitcoin and other cryptocurrencies were denoted as an asset in few countries while as a currency in other countries (Berkman et. al, 2012). For instance, Bitcoin has around 20 million whole units that are 100 million times divisible. Even if 2 billion people out of world population of 7 billion on Earth opt for Bitcoin, still 20 million whole units will not be able to reach far if there is no legitimate price tag.
The supply is very limited and people pay more to secure coins because of the conscious rules for the supply is enacted at a constant rate which cannot be altered or changed. Bitcoin is not only the most supported but also the first mainstream cryptocurrency. Other cryptocurrencies are often impacted by the price of Bitcoin. In 2016, a price of a lot of cryptocurrencies was affected for Bitcoin halving influenced in such a way that the prices slowly went up as the supply of new coins imminent were reduced. However, the scenario was quite opposite for Litecoin as it did not even buy a minor change in price. In the cryptocurrency market, Bitcoin is always looked upon as the ‘reserve currency’. Not only Bitcoin but other cryptocurrencies are also affected by the rise and fall in the price of Bitcoin. With the rise and fall of Bitcoin price, Litecoin has proportional price reactions.
There are fractional increments when a single Bitcoin is spent. It could be as low as 0.00000001 BTC per transaction. This tiniest and lowest increased value with regards to Bitcoin which is termed after the original whitepaper author is also famous as Satoshi. If in any case, the value of BTC goes up to the point at which micro trades becomes a regular place, the protocol will still allow incremental trades (Crosby, 2015). It is expected that the value of BTC will rise as a result of the limitation in the overall value of Bitcoin. The users can easily pass on the coin that still exists if the Bitcoin blockchain is completed. Bitcoin is the oldest and it is why the most trusted of all cryptocurrencies. Due to the rapid market fluctuations and charges and also for having an innovative technical concept it has garnered a lot of media attention. Over the years, Bitcoin shall be regarded as the ‘gold standard’ of cryptocurrency for every alternated cryptocurrency market costs are compared and marked same as the price of BTC.
As opposed to SHA-256, Litecoin or LTC utilizes Scrypt encryption algorithm. In order to facilitate a transaction that has a speed higher than Bitcoin network and also to utilize an algorithm that was resistant to accelerate ASIC and other hardware mining technologies are one of the main goals of Litecoin. It is a simpler cryptographic algorithm that makes the block generation 4 times faster. There is going to be quadruple the quantity of Litecoin accessible to Bitcoin for the total value of Litecoin which can be utilized due to its availability for mining and circulation is 4* the quantity of Bitcoin.
Difference between Characteristics of Bitcoin & Litecoin
On the contrary characteristics of Litecoin are
Cryptocurrency is a currency where encryption techniques are utilized so as to formulate unit generation of currency and verify funds transfer. In the last 1 year, it has successfully created a buzz and catered the market attention. Central banks have no rights to interfere in transactions related to cryptocurrencies. This is why the traditional financial systems are at risks of infiltration and might get exposed to certain failures. This has become a concern in the market (Clancy,2016). Taking the current market scenario into consideration cryptocurrencies can be observed as a speculative instrument owing to its characteristics. If the market value of cryptocurrencies ever collapse it is believed that the first ones to suffer will be the retail investors. Due to the direct or indirect exposure to cryptocurrencies that seems to be limited, it is expected that the banks rated by S&P global ratings might be hugely affected (Lee, 2015).
There will be a gradual impact on financial transactions and services if cryptocurrencies become an asset class. The future performance of cryptocurrencies so as to regulate and enhance market participant’s confidence in it might hugely rely on the assembled approach of global regulators and policymakers. It is also assumed and expected that blockchain technology might act as a positive disrupter for many financial value-chains as it underpins cryptocurrencies and enables the creation of a shared digital transaction ledger. Blockchain can be more meaning-oriented and impactful on the celebrity, traceability, and cost of financial transactions if globally taken into use (Lam & Lee, 2015). With the launch of new income generating products like futures or cryptocurrencies transactions or replacing present practices by new ones based on the blockchain, the financial market infrastructure segment may experience benefits valid for medium-term from cryptocurrencies and blockchain (Barney & Ray, 2015).
It is likely that the monetary system will be replaced by blockchains owing to extreme certainty, media and the internet and parallels of e-commerce and traditional stores. This system when used by everyone works best and is no doubt the strongest and so it allows more people on the same platform (Halaburda, 2016). Therefore, a limited number of cryptocurrencies is being adopted in blockchain technology. Both the economic and regulatory demands are satisfied with the bitcoin app’s code. How the new, automated and decentralized financial system shall work is well understood with the bitcoin app. The monetary policies are automated and money can be easily supplied without any limits and it does not even need a regulator to monitor financial compliance (Shaw, 2017). The dental community is supported by developing solutions for enhancing dental care globally with the infusion of cryptocurrency value as Dentacoin (an Ethereum based blockchain) platform is formulated by small contracts. The users have blind faith in blockchain’s economic value owing to its capability to attack and non-adherence to government policies and regulations despite all the arguments on its flexibility. Bitcoin smoothen financial operations, makes easier for everyone who has access to the internet to use the system and is also the simplest.
The blockchain is a danger to the operations of the banking industry. Banks are always at risk and are regulated by the government. In a centralized system, banks spend too much in their infrastructure and operations. Centralization of banks is affected by blockchain. It eliminates the requirement of a middleman or physical operational system by creating transparency in its transactions. It is impossible for the poor to make savings owing to the rural marginalization (Shaw, 2017). At least 65 percent of the Asians and sub- Saharan Africans are not able to save and therefore they have a high risk of spending and being poor for the rest of their lives. It is seen that in every 10 adults only 6 in Africa has access to the cyber for using the internet. Here, the significance of this is that the bank’s inadequacies can be outdone with the implication of cryptocurrencies (Halaburda, 2016). Blockchain provides more efficient and hassle-free lending system by examining spending and loan access rather than traditional banks that pressurizes by opting for collateral and payback means (Cohen, 2015).
References
Barney, J. and Ray, G. (2015) How information technology resources can provide a competitive advantage in customer service. Planning for Information Systems [online]. 3(2), p. 444-460. DOI: 10.4236/me.2015.63038
Berkman, H, Koch, P.D, Tuttle, L. and Zhang, Y. (2012) Paying Attention: Overnight Returns and the Hidden Cost of Buying at the Open. Journal of Financial and Quantitative Analysis. [online]. 47(4), p. 715-741.Available from: https://pkoch.faculty.ku.edu/myssi/_pdf/102_Berkman%20Koch%20Tuttle%20Zhang_JFQA_2012.pdf [Accessed 20 April 2018]
Brennan, C & Lunn, W. (2016) Blockchain [online]. Available from: https://www.finextra.com/finextra-downloads/newsdocs/document-1063851711.pdf [Accessed 18 May 2018]
Clancy, T. (2016) Ecommerce at Large Coming Around to the Idea of Bitcoin [online]. Available from: https://www.cryptocoinsnews.com/ecommerce-atlarge-coming-around-to-the-idea-of-bitcoin/ [Accessed 18 May 2018]
Cohen, A. (2015) Top defense contractors spend millions to get billions [online]. Available from: https://www.publicintegrity.org/2015/08/05/17776/topdefense-contractors-spend-millions-get-billions [Accessed 18 May 2018]
Crosby, M. (2015) Block chain technology. [online]. Available from https://scet.berkeley.edu/wp-content/uploads/BlockchainPaper.pdf [Accessed 20 April 2018]
Halaburda, H. (2016) Digital Currencies: Beyond Bitcoin. DigiWorld Economic Journal. [online]. 103, p. 77-92. Available from: https://jai.iijournals.com/content/20/3/16 [Accessed 18 May 2018]
Lam, P.N and Lee,, D.K. (2015) Introduction to Bitcoin: Handbook of Digital Currency, San Diego: Elsevier, 2015.
Lee, D.K.(2015) Handbook of Digital Currency. San Diego: Elsevier, 2015.
Shaw, J. (2017) The Blockchain Transformation of Accounting and Auditing. [online]. Available from: https://njcpa.org/stay-informed/topics/article/2017/09/14/the-blockchain-transformation-of-accounting-and-auditing [Accessed 20 April 2018]
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download