A

MINI PROJECT REPORT

ON

“CRYPTOCURRENCY "

Submitted for the partial fulfillment towards the awards of the degree in

Master of Business Administration

of

Dr. A.P.J Abdul Kalam Technical University, Lucknow

Batch: 2020-2022
Under the Guidance of: Submitted By:
Ms. Srishti Banerjee Suhani Bhatia
Assistant Professor Roll No:- 2005330700033
MBA 2nd Sem

R.V. NORTHLAND INSTITUTE OF

MANAGEMENTCHITEHRA, DADRI, G.B.NAGAR
(U.P.)
DADRI, GREATER NOIDA
 CERTIFICATE

This is to certify that the summer training project entitled, “CRYPTOCURRENCY " submitted by "Suhani
Bhatia" bearing Roll No. 2005330700033 in partial fulfillment of the requirements for the award of Master
of Business Administration (MBA) at the R.V. Northland Institute of Management, Chitehra, Dadri,
(Affiliated to Dr.APJ Abdul Kalam Technical University, Lucknow) is an authentic work carried out by
him/her.

It is further certified that the project has been submitted to Dr.APJ Abdul Kalam Technical University,
Lucknow for the partial fulfillment of the requirement of the course of study.

Director

Date:

Place:

Note- Printed on Institute’s letterhead

 DECLARATION

The research project on “CRYPTOCURRENCY ." has been undertaken as a partial fulfillment of the

requirement for the award of the degree of Master of Business Administration of Dr. APJ AKTU, Lucknow .

I hereby declare that this mini Project is my original work and the analysis and findings are for academic

purposes only. This mini project has not been submitted by the any student earlier to any other

institution/ university.

Suhani Bhatia
 ACKNOWLEDGEMENT

This project is the outcome of sincere efforts, hard work and constant guidance of not only me but a
number of individuals. First and foremost, I would like to thank RV North Land, DADRI GREATER NOIDA
for giving me the platform to work with such a prestigious company in the financial sector. I am thankful

to my faculty guide Ms. Srishti Banerjee for providing me help and support throughout the
Mini Project Report period.

I owe a debt of gratitude to my faculty guide who not only gave me valuable inputs about the industry
but was a continuous source of inspiration during these months, without whom this Project was never
such a great success.

Last but not the least I would like to thank all my Faculty members, friends and family members who
have helped me directly or indirectly in the completion of the project.

Suhani Bhatia

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 TABLE OF CONTENT

S.NO TABLE OF CONTENT PAGE NO.

1 INTRODUCTION & OBJECTIVE 1 - 24

2 RESEARCH METHODOLOGY 25 - 26

3 DATA ANALYSIS AND 27 - 37

INTERPRETAIONS
4 SUMMARY 38 - 39

5 CONCLUSION 40

6 REFERENCE 40

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 INTRODUCTION

What is cryptocurrency?

At the time of writing, the concept of decentralized cryptocurrency is still in its infancy,having been conceived in
January 2009 by a pseudonymous researcher going by the name Satoshi Nakamoto. The open source project known
as Bitcoin was created on the proof-of-concept principle that transactions can be securely processed on
adecentralized peer to peer network without the need for a central clearinghouse.
Centralized management has always been a part of other digital forms of payment, such as credit cards or wire
transfers. The nature of the open source cryptocurrency protocol does not allow for traditional disadvantages such as
chargebacks or double spendingdue to the use of signed encryption keys, effectively removing fraud risk from the
merchant.
The prominence and popularity of cryptocurrency technology has quickly spread through the general public as
means to store and transfer wealth, as well as engage in secure e-commerce. As with any new technology that
generates rapid global interest, cryptocurrencies have been targeted by malicious actors seeking exploitation of the
experimental nature of the protocol. These attacks have come in the form of databreaches, targeted attacks against
end users, and state sponsored regulation.
Cryptocurrencies are physical precomputed files utilizing a public key / private key pairs
generated around a specific encryption algorithm. The key assigns ownership of each
key pair, or ‘coin,’ to the person who is in possession of the private key. These key pairs
are are stored in a file named ‘wallet.dat,’ which resides in a default hidden directory on
the owners hard drive. The private keys are sent to users using dynamic wallet addresses generated by the users
engaged in transactions. The destination paymentaddress is the public key of the cryptocurrency keypair. There is a
finite amount of each cryptocoin available on the network, and value of each unit is assigned based on supply and
demand, as well as the fluctuating difficulty levels required for mining each coin.
The wallet.dat file is the most important file of the cryptocurrency software architecture, as that is where the
physical cryptographic private key file is stored. Much like cash, if a user loses their wallet.dat file, or has it stolen,
the cryptocurrency is lost.
The decentralized nature of open source protocol ensures that the control of the network remains in the hands of the
users. Transactions are dependent on participants in the network, and the user responsible for the security of their
own finances and data, without the need for reliance on third parties such as banking institutions.
Bitcoin operates as a p2p file sharing protocol, and therefore the concept is similar to .torrent technology. The p2p
network relies on user participation for successful trusted data exchange. Each transaction is confirmed through key
verification on multiple nodes in the network before reaching its destination. This crowdsourced key verification
process guarantees the integrity of the data transfer.

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The most popular cryptocurrency at the time of writing is Bitcoin, with alternatives such as Litecoin rapidly gaining
market traction. The source code for these programs, as well as the code for other cryptocurrencies, are available on
all major open source code repositories.

Something around three years ago a Bitcoin was worth $300, this week (January 2018) Bitcoin was traded around
$16,700. Over the last five years, the total value of all bitcoin (i.e., “market capitalization”) has grown from less
than $1 billion to over $262 billion with daily notional turnover on December 8, 2017 exceeding $21 billion. The
total value of all cryptocurrency tokens outstanding now (January 2018) approximately $423.7 billion. But this is
not only about the value of Bitcoin and other that has gained in the last few years, but also the excitement about the
technologies they have introduced to world of technology. We are on the verge of perhaps one of the biggest
transformation in the financial industry.

Let’s get to the point, you might have heard about Bitcoin and how interesting it is for people in and out of
technology, but Bitcoin is not alone. There are many other cryptocurrencies which each use a different technology
and they have different approaches to trading using digital currency.

History of Cryptocurrency

Cryptocurrency existed as a theoretical construct long before the first digital alternative currencies debuted. Early
cryptocurrency proponents shared the goal of applying cutting-edge mathematical and computer science principles
to solve what they perceived as practical and political shortcomings of “traditional” fiat currencies.

Technical Foundations

Cryptocurrency’s technical foundations date back to the early 1980s, when an American cryptographer named David
Chaum invented a “blinding” algorithm that remains central to modern web-based encryption. The algorithm
allowed for secure, unalterable information exchanges between parties, laying the groundwork for future electronic
currency transfers. This was known as “blinded money.”

By the late 1980s, Chaum enlisted a handful of other cryptocurrency enthusiasts in an attempt to commercialize the
concept of blinded money. After relocating to the Netherlands, he founded DigiCash, a for-profit company that
produced units of currency based on the blinding algorithm. Unlike Bitcoin and most other modern
cryptocurrenncies, DigiCash’s control wasn’t decentralized. Chaum’s company had a monopoly on supply control,
similar to central banks’ monopoly on fiat currencies.

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DigiCash initially dealt directly with individuals, but the Netherlands’ central bank cried foul and quashed this
idea. Faced with an ultimatum, DigiCash agreed to sell only to licensed banks, seriously curtailing its market
potential. Microsoft later approached DigiCash about a potentially lucrative partnership that would have permitted
early Windows users to make purchases in its currency, but the two companies couldn’t agree on terms, and
DigiCash went belly-up in the late 1990s.

Around the same time, an accomplished software engineer named Wei Dai published a white paper on b-money, a
virtual currency architecture that included many of the basic components of modern cryptocurrencies, such as
complex anonymity protections and decentralization. However, b-money was never deployed as a means of
exchange.

Shortly thereafter, a Chaum associate named Nick Szabo developed and released a cryptocurrency called Bit Gold,
which was notable for using the blockchain system that underpins most modern cryptocurrencies. Like DigiCash,
Bit Gold never gained popular traction and is no longer used as a means of exchange.

Pre-Bitcoin Virtual Currencies

After DigiCash, much of the research and investment in electronic financial transactions shifted to more
conventional, though digital, intermediaries, such as PayPal (itself a harbinger of mobile payment technologies that
have exploded in popularity over the past 10 years). A handful of DigiCash imitators, such as Russia’s WebMoney,
sprang up in other parts of the world.

In the United States, the most notable virtual currency of the late 1990s and 2000s was known as e-gold. e-gold was
created and controlled by a Florida-based company of the same name. e-gold, the company, basically functioned as
a digital gold buyer. Its customers, or users, sent their old jewelry, trinkets, and coins to e-gold’s
warehouse, receiving digital “e-gold” – units of currency denominated in ounces of gold. e-gold users could then
trade their holdings with other users, cash out for physical gold, or exchange their e-gold for U.S. dollars.

At its peak in the mid-2000s, e-gold had millions of active accounts and processed billions of dollars in transactions
annually. Unfortunately, e-gold’s relatively lax security protocols made it a popular target for hackers and phishing
scammers, leaving its users vulnerable to financial loss. And by the mid-2000s, much of e-gold’s transaction activity
was legally dubious – its laid-back legal compliance policies made it attractive to money laundering operations and
small-scale Ponzi schemes. The platform faced growing legal pressure during the mid- and late-2000s, and finally
ceased to operate in 2009.

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Bitcoin and the Modern Cryptocurrency Boom

Bitcoin is widely regarded as the first modern cryptocurrency – the first publicly used means of exchange to
combine decentralized control, user anonymity, record-keeping via a blockchain, and built-in scarcity. It was first
outlined in a 2008 white paper published by Satoshi Nakamoto, a pseudonymous person or group.

In early 2009, Nakamoto released Bitcoin to the public, and a group of enthusiastic supporters began exchanging
and mining the currency. By late 2010, the first of what would eventually be dozens of similar cryptocurrencies –
including popular alternatives like Litecoin – began appearing. The first public Bitcoin exchanges appeared around
this time as well.

In late 2012, WordPress became the first major merchant to accept payment in Bitcoin.
Others, including Newegg.com (an online electronics retailer), Expedia, and Microsoft, followed. Dozens of
merchants now view the world’s most popular cryptocurrency as a legitimate payment method. Though few other
cryptocurrencies are widely accepted for merchant payments, increasingly active exchanges allow holders to
exchange them for Bitcoin or fiat currencies – providing critical liquidity and flexibility.

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Advantages of Cryptocurrency

1. Built-in Scarcity May Support Value

Most cryptocurrencies are hardwired for scarcity – the source code specifies how many units can ever exist. In this
way, cryptocurrencies are more like precious metals than fiat currencies. Like precious metals, they may
offer inflation protection unavailable to fiat currency users.

2. Loosening of Government Currency Monopolies

Cryptocurrencies offer a reliable means of exchange outside the direct control of national banks, such as the U.S.
Federal Reserve and European Central Bank. This is particularly attractive to people who worry that quantitative
easing (central banks’ “printing money” by purchasing government bonds) and other forms of loose monetary
policy, such as near-zero inter-bank lending rates, will lead to long-term economic instability.

In the long run, many economists and political scientists expect world governments to co-opt cryptocurrency, or at
least to incorporate aspects of cryptocurrency (such as built-in scarcity and authentication protocols) into fiat
currencies. This could potentially satisfy some cryptocurrency proponents’ worries about the inflationary nature of
fiat currencies and the inherent insecurity of physical cash.

3. Self-Interested, Self-Policing Communities

Mining is a built-in quality control and policing mechanism for cryptocurrencies. Because they’re paid for their
efforts, miners have a financial stake in keeping accurate, up-to-date transaction records – thereby securing the
integrity of the system and the value of the currency.

4. Robust Privacy Protections

Privacy and anonymity were chief concerns for early cryptocurrency proponents, and remain so today. Many
cryptocurrency users employ pseudonyms unconnected to any information, accounts, or stored data that could
identify them. Though it’s possible for sophisticated community members to deduce users’ identities, newer
cryptocurrencies (post-Bitcoin) have additional protections that make it much more difficult.

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5. Harder for Governments to Exact Financial Retribution

When citizens in repressive countries run afoul of their governments, said governments can easily freeze or seize
their domestic bank accounts, or reverse transactions made in local currency. This is of particular concern in
autocratic countries such as China and Russia, where wealthy individuals who run afoul of the ruling party
frequently find themselves facing serious financial and legal troubles of dubious provenance.

Unlike central bank-backed fiat currencies, cryptocurrencies are virtually immune from authoritarian caprice.
Cryptocurrency funds and transaction records are stored in numerous locations around the world, rendering state
control – even assuming international cooperation – highly impractical. It’s a bit of an oversimplification, but using
cryptocurrency is a bit like having access to a theoretically unlimited number of offshore bank accounts.

Decentralization is problematic for governments accustomed to employing financial leverage (or outright bullying)
to keep troublesome elites in check. In late 2017, CoinTelegraph reported on a multinational cryptocurrency
initiative spearheaded by the Russian government. If successful, the initiative would have two salutary outcomes for
those involved: weakening the U.S. dollar’s dominance as the world’s de facto means of exchange, and affording
participating governments tighter control over increasingly voluminous and valuable cryptocurrency supplies.

6. Generally Cheaper Than Traditional Electronic Transactions

The concepts of blockchains, private keys, and wallets effectively solve the double-spending problem, ensuring that
new cryptocurrencies aren’t abused by tech-savvy crooks capable of duplicating digital funds. Cryptocurrencies’
security features also eliminate the need for a third-party payment processor – such as Visa or PayPal – to
authenticate and verify every electronic financial transaction.

In turn, this eliminates the need for mandatory transaction fees to support those payment processors’ work – since
miners, the cryptocurrency equivalent of payment processors, earn new currency units for their work in addition to
optional transaction fees. Cryptocurrency transaction fees are generally less than 1% of the transaction value, versus
1.5% to 3% for credit card payment processors and PayPal.

7. Fewer Barriers and Costs to International Transactions

Cryptocurrencies don’t treat international transactions any differently than domestic transactions. Transactions are
either free or come with a nominal transaction fee, no matter where the sender and recipient are located. This is a
huge advantage relative to international transactions involving fiat currency, which almost always have some

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special fees that don’t apply to domestic transactions – such as international credit card or ATM fees. And direct
international money transfers can be very expensive, with fees sometimes exceeding 10% or 15% of the transferred
amount.

Cons of Cryptocurrency

1. Lack of Regulation Facilitates Black Market Activity

Probably the biggest drawback and regulatory concern around cryptocurrency is its ability to facilitate illicit activity.
Many gray and black market online transactions are denominated in Bitcoin and other cryptocurrencies. For
instance, the infamous dark web marketplace Silk Road used Bitcoin to facilitate illegal drug purchases and other
illicit activities before being shut down in 2014. Cryptocurrencies are also increasingly popular tools for money
laundering – funneling illicitly obtained money through a “clean” intermediary to conceal its source.

The same strengths that make cryptocurrencies difficult for governments to seize and track allow criminals to
operate with relative ease – though, it should be noted, the founder of Silk Road is now behind bars, thanks to a
years-long DEA investigation.

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2. Potential for Tax Evasion in Some Jurisdictions

Since cryptocurrencies aren’t regulated by national governments and usually exist outside their direct control, they
naturally attract tax evaders. Many small employers pay employees in bitcoin and other cryptocurrencies to avoid
liability for payroll taxes and help their workers avoid income tax liability, while online sellers often accept
cryptocurrencies to avoid sales and income tax liability.

According to the IRS, the U.S. government applies the same taxation guidelines to all cryptocurrency payments by
and to U.S. persons and businesses. However, many countries don’t have such policies in place. And the inherent
anonymity of cryptocurrency makes some tax law violations, particularly those involving pseudonymous online
sellers (as opposed to an employer who puts an employee’s real name on a W-2 indicating their bitcoin earnings for
the tax year), difficult to track.

3. Potential for Financial Loss Due to Data Loss

Early cryptocurrency proponents believed that, if properly secured, digital alternative currencies promised to support
a decisive shift away from physical cash, which they viewed as imperfect and inherently risky. Assuming a virtually
uncrackable source code, impenetrable authentication protocols (keys) and adequate hacking defenses (which Mt.
Gox lacked), it’s safer to store money in the cloud or even a physical data storage device than in a back pocket or
purse.

However, this assumes that cryptocurrency users take proper precautions to avoid data loss. For instance, users who
store their private keys on single physical storage devices suffer irreversible financial harm when the device is lost
or stolen. Even users who store their data with a single cloud service can face loss if the server is physically
damaged or disconnected from the global Internet (a possibility for servers located in countries with tight Internet
controls, such as China).

4. Potential for High Price Volatility and Manipulation

Many cryptocurrencies have relatively few outstanding units concentrated in a handful of individuals’ (often the
currencies’ creators and close associates) hands. These holders effectively control these currencies’ supplies, making
them susceptible to wild value swings and outright manipulation – similar to thinly traded penny stocks. However,
even widely traded cryptocurrencies are subject to price volatility: Bitcoin’s value doubled several times in 2017,
then halved during the first few weeks of 2018.

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5. Often Can’t Be Exchanged for Fiat Currency

Generally, only the most popular cryptocurrencies – those with the highest market capitalization, in dollar terms –
have dedicated online exchanges that permit direct exchange for fiat currency. The rest don’t have dedicated online
exchanges, and thus can’t be directly exchanged for fiat currencies. Instead, users have to convert them into more
commonly used cryptocurrencies, such as Bitcoin, before fiat currency conversion. By increasing exchange
transactions’ cost, this suppresses demand for, and thus the value of, some lesser-used cryptocurrencies.

6. Limited to No Facility for Chargebacks or Refunds

Although cryptocurrency miners serve as quasi-intermediaries for cryptocurrency transactions, they’re not
responsible for arbitrating disputes between transacting parties. In fact, the concept of such an arbitrator violates the
decentralizing impulse at the heart of modern cryptocurrency philosophy. This means that you have no one to appeal
to if you’re cheated in a cryptocurrency transaction – for instance, paying upfront for an item you never receive.
Though some newer cryptocurrencies attempt to address the chargeback/refund issue, solutions remain incomplete
and largely unproven.

By contrast, traditional payment processors and credit card networks such as Visa, MasterCard, and PayPal often
step in to resolve buyer-seller disputes. Their refund, or chargeback, policies are specifically designed to prevent
seller fraud.

7. Adverse Environmental Impacts of Cryptocurrency Mining

Cryptocurrency mining is very energy-intensive. The biggest culprit is Bitcoin, the world’s most popular
cryptocurrency. According to estimates cited by Ars Technica, Bitcoin mining consumes more electricity than the
entire country of Denmark – though, as some of the world’s largest Bitcoin mines are located in coal-laden countries
like China, without that progressive Scandinavian state’s minute carbon footprint.

Though they’re quick to throw cold water on the most alarmist claims, cryptocurrency experts acknowledge that
mining presents a serious environmental threat at current rates of growth. Ars Technica identifies three possible
short- to medium-term solutions:

 Reducing the price of Bitcoin to render mining less lucrative, a move that would likely require concerted
interference into what’s thus far been a laissez-faire market
 Cutting the mining reward faster than the currently scheduled rate (halving every four years)

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  Switching to a less power-hungry algorithm, a controversial prospect among mining incumbents

Over the longer term, the best solution is to power cryptocurrency mines with low- or no-carbon energy sources,
perhaps with attendant incentives to relocate mines to low-carbon states like Costa Rica and the Netherlands.

Types of Cryptocurrency

Bitcoin
The first cryptocurrency to emerge was Bitcoin (BTC), based on the SHA-256 algorithm. This virtual commodity
was conceptualized in a whitepaper written in 2009 by a pseudonymous author who went by the name Satoshi
Nakamoto.
Over the course Bitcoin’s first four years, the market price of a single Bitcoin has fluctuated from below $0.01USD
to over $250USD. The highly volatile price has made Bitcoin an attractive investment alternative for traders seeking
to profit from market speculation, while at the same time the market volatility has made long term investors and
daily users hesitant to participate for long periods of time.
A single Bitcoin can be spent in fractional increments that can be as small as 0.00000001 BTC per transaction. The
smallest increment of a Bitcoin is known as a Satoshi, named after the original hitepaper author. The protocol allows
for incremental transactions in the event the value of BTC to rises to the point where micro transactions will become
commonplace. The rise in the value of BTC is anticipated because there is a limit to the total amount of Bitcoin will
ever be created. Once the Bitcoin blockchain is completed, users can only circulate the coin that still exists on the
network. As time goes on, Bitcoin will be lost and destroyed through daily use. The principles of supply and demand
economics will
come into play, increasing value of remaining Bitcoin.
Bitcoin is currently the most reputable of all cryptocurrency, as it is the oldest, and has been the subject of
mainstream media coverage due to rapid market fluctuations and an innovative technical concept. At the time of
writing, Bitcoin can be interpreted as being the ‘gold standard’ of cryptocurrency because all alternative
cryptocurrency market prices are matched to the price of BTC.

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Bitcoin-qt wallet GUI

Litecoin
Litecoin (LTC) can be considered the ‘silver standard’ of cryptocurrency, as it has been the second most adopted
cryptocurrency by both miners and exchanges.
Litecoin makes use of the Scrypt encryption algorithm, as opposed to SHA-256.
One of the goals of Litecoin was to have transactions confirm at a faster speed than on the Bitcoin network, as well
as make use of an algorithm that was resistant to accelerated hardware mining technologies such as ASIC. At the
time of writing, the Scrypt algorithm is resistant to ASIC mining due to intense RAM
requirements.
The total amount of Litecoin that is available for mining and circulation is four times the amount of Bitcoin,
meaning there will be quadruple the amount of Litecoin available to Bitcoin.

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Litecoin-qt GUI wallet

Altcoins
‘Altcoin’ a is slang term for the dozens of project forks that have emerged within the cryptocurrency software
development community. Altcoins are ‘forks’ of either Bitcoin or Litecoin, meaning they make use of SHA-256 or
Scrypt encryption algorithms and feature their own unique properties. Names of various altcoins
range from memorable to comical (Feathercoin, Terracoin, P2PCoin, BitBar, ChinaCoin, BBQCoin). The
profitability of mining and trading altcoin varies on a daily basis. Some altcoins exceed the profitability of Bitcoin at
times, while others are less profitable.
It is believed by some cryptoeconomists that altcoins contribute to a diverse cryptocommodities marketplace, which
is a good thing as there is more opportunity for speculative arbitrage and mining difficulty levels are spread over
many different networks. Other cryptoeconomistsdisagree about the beneficial aspects of altcoins, citing overuse of
the cryptocoin concept will dilute widespread adoption and restrict the use of the technology to speculative trade

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markets instead of daily commerce.

Fig 1.5 - A few examples of altcoin logos - PPCoin, Feathercoin, BBQCoin, IXcoin, Mincoin, Terracoin,
Freicoin

Ethereum (ETH)

Platform that enables smart contracts and distributed applications (DApps) to be built and operate with no
downtime, fraud, interference or control from a third party. Throughout 2014, Ethereum had established a pre-sale
for ether that had obtained an overwhelming response. The applications on Ethereum are conducted on its own
platform-specific cryptographic token, Ether. Ether is similar to a vehicle for moving around on the Ethereum
system, and is sought by mostly developers seeking to develop and operate programs inside Ethereum. According to
Ethereum, it can be employed to “codify, decentralize, trade and secure just about anything.” Following the attack
on the DAO in 2016, Ethereum was split into Ethereum (ETH) and also Ethereum Classic (ETC). Ethereum (ETH)
has a market capitalization of $4.46 billion, second after Bitcoin among all cryptocurrencies.

Characteristics: 
1. Ethereum could be used as a platform to create blockchain applications and new tokens
2. Uses smart contracts

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 Zcash

A decentralized and open-source cryptocurrency launched in the second part of 2016, and it really looks promising.
In case Bitcoin is like http for money, Zcash is https, this is how  Zcash defines itself. Zcash offers privacy and
discerning transparency of trades. Thus, like https, Zcash claims to give extra privacy or security where all
transactions are recorded and printed within a blockchain, but details such as the sender, recipient, and amount stay
private. Zcash offers its users the option of ‘shielded’ transactions, which allow for content to be encrypted using
advanced cryptographic procedure or zero-knowledge proof structure called a zk-SNARK developed by its team.

Characteristics: 
1. Zcash uses a specific proof to secure the network or proof of construction. This leads to maintain the
network with secure ledger of balances without disclosing parties or amounts involved in transactions.

Dash

Dash (originally known as Darkcoin) is a more secretive variant of Bitcoin. Dash offers more anonymity as it
functions on a decentralized mastercode system which produces transactions almost untraceably. Launched in
January 2014, Dash experienced a growing fan after in a brief span of time. This cryptocurrency was made and
manufactured by Evan Duffield and could be mined using a CPU or GPU. The rebranding did not change any of its
technological features such as Darksend, InstantX.

1.  Dash uses a two-tier architecture to power its network

2. Decentralized Autonomous Organization (DAO)
3. DASH aims to be the first privacy-centric cryptographic currency with fully encrypted transactions and
anonymous block transactions, this feature is called PrivateSend

Ripple (XRP)

Ripple is a real-time worldwide settlement network that provides instant, certain and low-cost international payments.
Ripple “empowers banks to repay cross-border payments in real time, together with closing transparency, and at lower
prices.” Released in 2012, Ripple currency has a market capitalization of $1.26 billion. Ripple’s consensus ledger is a
method of conformation. Ripple does not need mining, a quality that deviates from bitcoin and altcoins. Since Ripple’s

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structure does not need mining, it reduces the use of computing power, and minimizes network latency. Ripple considers
that ‘distributing value is a powerful means to incentivize certain behaviors and consequently currently intends to
distribute XRP mostly “through business development agreements, incentives to liquidity providers who offer tighter
spreads for payments, and selling XRP to institutional buyers interested in investing in XRP.”

Characteristics:
1. Ripple is not an average cryptocurrency, obtaining Ripple can only be done by buying the currency from
various exchanges.
2. Backed by many banks and financial institutions.
3. In Ripple there is no mining involved.

Monero (XMR)

Monero is a secure, confidential and untraceable currency. This Open source cryptocurrency was launched in April
2014 and shortly spiked great interest among the cryptography community and fans. The development of this
cryptocurrency is totally donation-based and community-driven. Monero enables complete privacy by employing a
special technique known as ‘ring signatures.’ with this technique, there seems a bunch of cryptographic signatures
like at least one real player — but since all of them appear valid, the real one cannot be isolated.

Characteristics:
1. Monero is not like other cryptocurrencies that derivatives of Bitcoin, Monero is based on the
CryptoNightPoW hash algorithm, which came from CryptoNote protocol.
2. Monero is fungible, that means, every unit of the currency can be substituted by another unit.

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 REVIEW OF LITERATURE :

Babaioff et al. 2012Bitcoin protocol (Andrychowicz et al. 2014, Babaioff et al. 2012, Bentov et al. 2014,
Jayasinghe et al. 2014, Kumaresan and Bentov 2014). In addition, Bentov et al. (2014) state, that all other
cryptocurrencies share the same fundamentals and ideas with Bitcoin. Only Danezis et al. (2013) and Miers et al.
(2013) have researched Zerocoin, which implements a stronger transaction anonymity than other CCs.

All papers analyze the Bitcoin protocol, identify existing weaknesses and develop enhancement to the existing
protocol. Bentov et al. (2014) see a "Tragedy of the Commons" problem in the protocol, in that fees from
transactions could not cover the mining costs. A Proof of Activity protocol is developed to solve the problem and to
"decentralize the power that synchronizes the transactions in a quite pronounced fashion" (Bentov et al. 2014).
Kumaresan and Bentov have also developed a Bitcoin protocol enhancement which "captures the amount of
computational effort required to validate Bitcoin transactions" (2014). This change would foster honest behavior and
boost the robustness of Bitcoin transactions. Babaioff et al. (2012) suggest changes to the Bitcoin protocol to
incentivize information sharing in Bitcoin.

Danezis et al. 2013 The developed protocol from Jayasinghe et al. "guarantees strong-fairness while preserving
anonymity of the consumer and the merchant" (2014). Andrychowicz et al. (2014) engineer a protocol to secure
multiparty lotteries without a trusted authority which is built on the Bitcoin protocol. Only the work of Danezis et al.
(2013) and Miers et al. (2013) are built on Zerocoins, a cryptocurrency for anonymous decentralized transactions.
The protocol uses "modern techniques based on quadratic arithmetic programs resulting in smaller proofs and
quicker verification" (Danezis et al. 2013).

As all papers focus on the technical development or enhancement of cryptocurrency protocols, a design science
orientation for all papers can be stated (Hevner et al. 2004). Therefore, three of the papers discuss the protocol on a
conceptual basis (Babaioff et al. 2012, Bentov et al. 2014, Danezis et al. 2013). Andrychowicz et al. (2014),
Jayasinghe et al. (2014), Kumaresan and Bentov (2014) and Miers et al. (2013) use prototyping methods with their
proposed changes implemented and tested iteratively.

Bissias et al. (2014)Network LayerThe second cluster of cryptocurrency related research focuses on the network
layer. The majority of the papers grouped in this section examine the Bitcoin peer-to-peer network, only Bissias et
al. (2014) included Litecoin as alternative to Bitcoin into their research. Anish Dev (2014) names also other
cryptocurrencies, but sees them as derivates of Bitcoin.

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The research on the peer-to-peer network of cryptocurrencies is multi-faceted. One of the earliest papers on
cryptocurrency research (Reid and Harrigan 2011) analyses the anonymity in the Bitcoin network. The authors state,
that despite the claim that Bitcoin is a secure and anonymous currency, peers in the network can easily be identified
by analyzing the topology of the Bitcoin network.

Luo et al. (2013)Methods to analyze the Bitcoin network are described by Luo et al. (2013). They use a parallel
computing approach to analyze transaction, making tracing and searching of transactions faster and easier. By
adding available external information and the tracking of marked Bitcoins, de-anonymization of user is very easy for
the everyday user. Biryukov et al. (2014) also use network topology methods to deanonymize user even if they are
connected to the Bitcoin network via a Tor network (which masks the user's IP address). The authors state, that "the
cost of the deanonymization attack on the full Bitcoin network is under 1500 EUR" (Biryukov et al. 2014).
Therefore, anonymity should not be seen as a core feature of cryptocurrencies (Reid and Harrigan 2011). A possible
way to unlink Bitcoins from known users and therefore hinder deanonymization of the network peers is a mixing
method, "which is the process of transferring funds between two address without recording their relationship to the
public block chain" (Bissias et al. 2014). As existing methods are vulnerable to various cyber attacks (e.g. denial-of-
service attacks), Bissias et al. (2014) propose an alternative method named Xim, which has a strong robustness
against these attacks and allows finding anonymous mixing partners.

Karame et al. 2012The second stream of research on the network layer of cryptocurrencies analyzes fast transaction
support in Bitcoin. As each transaction needs an average time of ten minutes to be included into the blockchain and
up to one hour to be robust against double spending attacks, Bitcoin is not suitable for e-Commerce scenarios where
the exchange of services or goods and Bitcoins happens at the same time (Karame et al. 2012). Singh et al. (2013)
develop a scheme for fast transaction support in Bitcoin, as long as payer and payee know and trust each other. If
both parties of the transaction do not trust each other, other mechanisms have to be found. Bamert et al. (2013)
suggest that the payee connect to random peers in the network and check if inconsistencies occur during the
validation phase of a Bitcoin transaction. This gives the attacker only a "0.088% chance of performing a successful
double-spending attack" (Bamert et al. 2013). The authors tested their proposal at a snack vending machine
accepting Bitcoins. An alternative, suggested by Karame et al. (2012), introduces observer to the Bitcoin network
which informs peers about double-spending attacks.

19
Gervais et al. 2014aSimplified payment verification (SPV) clients are an additional important concept to foster
Bitcoin as an alternative for e-Business transactions. As specific devices (like mobile phones) have a limited amount
of data storage and cannot store the complete blockchain. SPV clients allow peers to extract Bitcoin transactions
relevant for the client while outsourcing transaction validations to more powerful network peers (Gervais et al.
2014a). Gervais et al. show that these "filters incur serious privacy leakage in existing SPV client implementations"
(2014a) and suggest a lightweight modification of the SPV clients.

Hevner et al. 2004Research on the network layer has a strong design science orientation (Hevner et al. 2004). Based
on identified limitation of the existing cryptocurrency peer-to-peer network, several papers (like Biryukov et al.
(2014), Luo et al. (2013) or Singh et al. (2013)) design solutions to meet the limitations. Research methods for
designing concepts are based on conceptual work like Miller et al. (2014) who introduce a concept to use the Bitcoin
network for distributed storage of archival data or use experiments (Anish Dev 2014) or prototyping methods
(Bissias et al. 2014). In addition, a more descriptive or analytical approach can be identified. Authors like Decker
and Wattenhofer (2013) analyze the public available Bitcoin blockchain to research information shared in the
Bitcoin network. This quantitative data analysis approach is also used by Karame et al. (2012) and Reid and
Harrigan (2011).

El Defrawy and Lampkins (2014)Ecosystem Layer The majority of literature looked at examined the
cryptocurrency ecosystem. Like in the previous sections, Bitcoin is the dominant CC examined. El Defrawy and
Lampkins (2014), Malone and O'Dwyer (2014) and Taylor (2013) mention other cryptocurrencies like Litecoin, but
base their research on Bitcoin. BenSasson et al. (2014) present Zerocash as an alternative for decentralized
anonymous payments. Many papers in this section are new introductions to the Bitcoin ecosystem. Papers like
Cusumano (2014), Evans-Pughe et al. (2014), Grier (2014), Hurlburt and Bojanova (2014), Parthemer and Klein
(2014), Peck (2012) and Peck (2013) give positivistic insights to the ecosystem and explain how Bitcoin works. This
type of research can be used as a good starting point for researchers who want to understand the Bitcoin ecosystem.
Introductory papers without scientific rigor are reasonable if the research field is quite new.

Meiklejohn et al. (2013) also give a characterization of the Bitcoin ecosystem but emphasize criminal behavior,
notably fraud. Although, "Bitcoin does not provide a particularly easy or effective way to transact large volumes of

20
illicitly obtained money" (Meiklejohn et al. 2013), the ecosystem is vulnerable to money thefts, money laundering
and illegal transaction. Christin (2013) describes how Bitcoin was used to purchase illicit items like narcotics
through the online marketplace Silk Road. The author shows, that 4.5% to 9% of all Bitcoin transactions can be
linked to Silk Road sales. In addition, users with the intention of buying illicit goods "had about 25% - 45% more
bitcoins (within the 95% Confidence Interval) than those who had not spent bitcoins on illicit goods" (Bohr and
Bashir 2014). Moser et al. (2013) and Stokes (2012) research money laundering which is used to mask the illicit
nature of money. With mixing methods and services like BitLaundry, described by Moser et al. (2013), it is possible
to anonymize transactions. However, it has been suggested that this is only possible for small amounts of illicit
money as a large "movement with money laundering, it would incur attention both within the Bitcoin community
and, ultimately at a law enforcement level" (Stokes 2012). Gad (2014) suggests implementing regulations for
exchanging Bitcoins into fiat currencies to prevent misuse of crypto

Gervais et al. (2014b)Users' intentions to participate in the Bitcoin ecosystems are described by Glaser et al.,
suggesting that "new users tend to trade Bitcoin on a speculative investment intention basis and have low intention
to rely on the underlying network as means for paying goods or services" (2014). van Alstyne (2014) supports this
argument, but sees this development as necessary to give Bitcoin a value. Gervais et al. (2014b) examine the claim
of Bitcoin as a decentralized currency and show that, despite the decentralized peer-to-peer network, parties can
influence the development of Bitcoin. Protocol maintenance is performed by a small number of core developers, and
other participants only have limited influence on them. Other central parties include mining pools which provide a
large portion of computational resources in the Bitcoin ecosystem, but "if these pools colluded to acquire more than
50 percent of computing power share, they could effectively control all transactions, for example, preventing certain
transactions’ execution, approving a specific set of transactions, or approving double-spending Cryptocurrencies and
Bitcoin Twenty-first Americas Conference on Information Systems, Puerto Rico, 2015 10 transactions" (Gervais et
al. 2014b). To overcome this limitation, Ben-Sasson et al. (2014) and El Defrawy and Lampkins (2014) propose new
currencies scheme with stronger cryptographic methods and more sustainable decentralization.currencies.

Taylor (2013)A different stream of Bitcoin ecosystem's research is about mining hardware and their development.
Because mining is a resource consuming process, new types of hash calculating hardware have emerged. Taylor
(2013) describes four phases of hardware development. In the first phase, the Bitcoin mining was based on CPU,
which were replaced by graphical processor units (GPU) in the second phase. The third phase started mid 2011 with
the introduction of field programmable gate arrays (FPGA) for Bitcoin mining. These FPGA were stepping-stone for
the fourth phase, the introduction of application-specific integrated circuits (ASIC) providing a higher cost and

21
energy efficiency. Malone and O'Dwyer calculated that "the entire Bitcoin mining network is on par with Ireland for
electricity consumption" (2014).

Hevner et al. 2004Research on the ecosystem layer leans towards a behavioral perspective (Hevner et al. 2004). All
introductory papers (like Grier 2014) are based on archival data analysis, although not all sources are clearly
referenced in this type of paper. Archival data analysis is also used by Gervais et al. (2014b) and Stokes (2012) with
a stronger scientific rigor. A different research method used is quantitative data analysis (e.g. Glaser et al. 2014).
Taylor’s (2013) work about the hardware development relies on case study research. More design-science oriented
papers used experiments (van den Hooff et al. 2014) or a conceptual approach (Szefer and Lee 2013). Some papers,
like Christin (2013), discuss the ethics of their research, suggesting that researching illegal activities like money
laundering and platforms selling illicit goods might stimulate further usage and activate new users. In addition,
analyzing data from those activities might have unintended consequences for users. Researchers must be aware of
these consequences and consider strategies to mitigate the risk. One strategy described by Christin (2013) and Moser
et al. (2013) are proposals of intervention strategies (e.g. blacklisting of Bitcoins) which prevent further illegal
activities in the Bitcoin ecosystem.

Banville and Landry 1989Cryptocurrency Research and its Link to IS Research : The papers discussed above,
while discussing phenomena that are IT-enabled, never link the phenomena to IS research. Nor has cryptocurrency
research drawn much attention from major IS conferences and journals. The question therefore remains: Are
cryptocurrencies a potential research area for IS research? From a general view, IS research is typically based on a
core subject or phenomenon, such as an IT artifact (Banville and Landry 1989, Orlikowski and Iacono 2001). For
cryptocurrency research, this core artifact could be the cryptocurrencies’ protocol or the peer-to-peer network or
both.

Lee 1999In addition, IS research has "a research focus on the rich phenomena that emerge whenever the
technological and the social come into contact with, react to, and transform each other" (Lee 1999). Further, rich
phenomena based on the intertwining of technological artifacts and social context can be found in cryptocurrencies.
Just a few examples range from the open source development of the cryptocurrency protocol to fast transaction
support for e-Commerce to new services and business models based on the cryptocurrencies’ protocol and network.

22
From a general view, it is justified to say that research about cryptocurrencies belongs to Information Systems
Research. A stronger consideration of cryptocurrencies in IS would also enlarge the diversity of the discipline
(Benbasat and Weber 1996, Robey 1996).

In order to illustrate the potential that cryptocurrency research has for IS research, I have linked the three broad
fields of examination in previous research to specific AIS SIGs and tracks from AMCIS, ECIS, ICIS and HICSS.
This has been done with reference to keywords of the article, the text itself and the research background of the
authors. This illustration therefore serves as a starting point for the inclusion of cryptocurrency research into IS
research, while also showing just how untapped this new and emergent phenomenon is.

Protocol Layer

SIGSEC Papers researching the protocol layer may raise interest for the communities of SIG on Information
Security (SIGSEC) and of the SIG on E-Business (SIGeBIZ). Most of reviewed paper in this layer have a technical
approach and construct an IT artifact. Papers like Bentov et al. (2014) and Kumaresan and Bentov (2014) analyze
"system vulnerabilities and risk exposure" (Siponen et al. 2015) and present solutions to cope with these risk
exposures. Other papers (e.g. Andrychowicz et al. 2014, Jayasinghe et al. 2014) discuss "technologies to facilitate
negotiations and auctions" (Shaw et al. 2015) or support "Internet-based procurement and sales" (Shaw et al. 2015).

Network Layer

Most of the papers in the network layer can be linked to SIGSEC and SIGeBIZ. Authors like Bamert et al. (2013),
Gervais et al. (2014a) and Singh et al. (2013) research SPV clients that allow e-Commerce transactions on smart
devices. Others analyze privacy and anonymity in the Bitcoin network (e.g. Biryukov et al. 2014 and Reid and
Harrigan 2011) and describe methods to re-establish privacy in Bitcoin transactions (Bissias et al. 2014). These
papers could have the chance to be accepted for AMCIS 2015 - Information Systems Security and Privacy
(SIGSEC) Track organized by SIGSEC. The paper from Anish Dev (2014) can be linked to the SIG Services
(SIGSVC) community, as the author researches collaborative mining methods and contributes to "Service and
crowd-sourcing or micro-tasking" (Böhmann 2014). Only for Luo et al. (2013), it was not possible to align an IS
research area.

23
Ecosystem Layer

As the number of papers researching the ecosystem layer is higher, the research is more multifaceted. Again, most of
the papers would raise interest in the communities of SIGBeIZ and SIGSEC. Papers like Grier (2014), Peck (2013)
and van Alstyne (2014) give insights into digital currencies and might be of interest for the communities of SIGeBiz.
New services and business models in cryptocurrencies (e.g. securing cloud computing applications by using Bitcoins
as deposit) might stimulate new research from the SIGSVC community. Security and risk exposure are also
discussed in the reviewed papers. Selling and purchasing illicit goods using Bitcoins (Christin 2013) or money
laundering (Moser et al. 2013, Stokes 2012) exemplify potential eCrimes while using Bitcoins. Cryptocurrency
research can be relevant for the SIG Adoption and Diffusion of Information Technology (SIGADIT) as well. Papers
like Bohr and Bashir (2014) and Glaser et al. (2014) give insights into the Bitcoin community and discuss how
"individuals become aware of, decide to use, and appropriate" (Jeyaraj 2015) cryptocurrencies.

Open Research Questions

Shaw et al. 2015Overall it can be stated, that research about cryptocurrencies have a strong alignment to E-Business
and Security, because cryptocurrencies are an example for "Internet-based payment models" (Shaw et al. 2015)
using cryptographic methods to build up secure and trustful transactions. Nevertheless, a full understanding about
cryptocurrencies has not been reached yet. More investigation should also be done in the field of the influence of
culture on cryptocurrencies. Although mentioned in a few papers (e.g. Bohr and Bashir 2014), the focus of the
reviewed papers still lies on anonymous transactions without cultural influences ( Glaser et al. 2014, Meiklejohn et
al. 2013). However, due to cryptocurrencies and especially Bitcoin as a currency scheme crossing national borders,
cultural issues are an important aspect nowadays. This is a possible area for future research.

CoinDesk 2015aNew business models are not discussed in cryptocurrency research so far. Nevertheless, I see
entrepreneurs who have built up their businesses around cryptocurrencies, especially Bitcoin (CoinDesk 2015b). In
addition, more and more merchants accept Bitcoin as a payment method (CoinDesk 2015a). It is a possible future
research area to understand the motivation of the entrepreneurs and merchant to participates, which business models
they use and which approaches they use to form the ecosystem. Cryptocurrencies present a challenge for the existing
financial industries as potential clients using alternative financial tools and methods without banking support (e.g.
van Alstyne 2014). Banks but also intermediaries like consultants or insurances have to change and adapt their
business models to become Cryptocurrencies and Bitcoin Twenty-first Americas Conference on Information
Systems, Puerto Rico, 2015 12 member of the cryptocurrency ecosystem or built up trust or alternatives to be more
attractive for these potential clients (Palmer 2015). This is also a possible area for future research.

24
CoinDesk 2015bCryptocurrencies and Bitcoin had to face extreme events and disruptions in the recent past.
Examples are the lost Bitcoins from the largest Bitcoin exchanges Mt.Gox and Bitstamp, which have let to distrust
in the Bitcoin ecosystem and might harm cryptocurrencies as a whole (CoinDesk 2015b). It is not clear, how and
why these crisis and disruptions occur and how the users of the cryptocurrencies react to this events.

As stated above, research methods examining cryptocurrencies are oftentimes quantitative and design science
oriented. The valuable results need to be complemented with qualitative methods. First approaches can be found
(Taylor 2013) but a stronger inclusion of qualitative methods in the research process and mixed-methods approaches
is an important future research question. Research on cryptocurrencies, however, is not limited to the IS field of
research. It might be worthwhile exploring other disciplines, such as business, law, organizational science and
sociology. This could lead to an interdisciplinary field of research and lead to a fruitful enrichment of practice as
well as academic. For further research, it might be also reasonable to analyze cryptocurrencies from a more
sociomaterial perspective.

Similar to all markets, even in cryptocurrencies, traders continue shifting their loyalties from Bitcoin to altcoins,
which results in one outperforming the other. While comparing the performance of  the top 5 cryptocurrencies in the
third quarter of this year, Bitcoin has emerged as the leader, gaining 74%. Bitcoin Cash was not considered, as it did
not trade for the full quarter.

The second largest cryptocurrency by market capitalization, Ethereum, turned out a weak performance, rising only
8% in the third quarter. This is in stark contrast to its staggering rally of 500% in the second quarter of this year.

This shows that traders will make money only if they are invested in the right cryptocurrency. Let’s find the most
promising one to trade now.

25
 OBJECTIVES:

1. To know the various types of Cryptocurrency.

2. To know the performance of Bitcoin, Litecoin and Ethereum.

26
 RESEARCH METHODOLOGY:

BTC/USD

We have carried long positions in Bitcoin for both the swing traders and the aggressive traders.
Both these positions are currently in a profit. What should the traders do now?

Bitcoin has risen from the critical support levels of $4114 to $4170, according to our
expectations. If the digital currency breaks out of $4488, it is likely to rally to $4680 levels. This
is the last resistance before a retest of the highs at $5000.

Therefore, swing traders should continue to hold their positions, but they should raise their stop
loss from $4000 to $4100. They should tighten their stops further once the digital currency
breaks out of $4488.

The aggressive traders should book 30% of their profits at the current levels of $4387 and hold
the rest with a stop loss of $4100. This will reduce their risk on the existing positions. Once
Bitcoin rallies above $4488, they should again raise their stop loss to breakeven and book partial
profits at $4680.

Our bullish view on bitcoin will be invalidated if it turns down and breaks below $4100 levels.
That can extend the fall to $3909 and $3731 levels, which are 38.2% and 50% Fibonacci
retracement levels of the pullback from $2974 to $4488.01.

27
28
29
ETH/USD

Ethereum has spent the past few days consolidating in a tight range. This shows an equilibrium
between both the bulls and the bears. Neither party is able to overpower the other. However, this
is unlikely to continue for long. One of the two will emerge as a winner.

If Ethereum breaks out of the upper end of the range at $317, it is likely to start a new uptrend,
which has a pattern target of $354. Therefore, we recommend a long position on the digital
currency at $317.

The initial stop loss can be kept at $278, which should be raised as the cryptocurrency moves
higher. The stops should be tightened further if Ethereum struggles to breakout of the overhead
resistance at $344.

If, however, the bears manage to push Ethereum below $278, it will open up a downside of
$257.94, which is the 50% Fibonacci retracement level of the pullback from $200.15 to $315.72.

30
31
32
BCH/USD

Bitcoin Cash is attempting to stabilize after breaking down of the range. However, compared to
the other cryptocurrencies, it still lacks buying interest.

We have been cautious on Bitcoin Cash for the past few days. The digital currency continues to
trade below both the critical moving averages and the downtrend line. This shows that it remains
in a downtrend. Therefore, we don’t recommend a long trade on Bitcoin Cash.

The first target on the downside is $300 if Bitcoin Cash is unable to climb above $385.

On the other hand, if the cryptocurrency rallies above the downtrend line and the 20-day EMA, it
will signal strength.

Traders who trade only Bitcoin Cash can buy at $436 and keep a stop loss of $336. The profit
objective is $549.

Rest of the traders are better off trading other cryptocurrencies.

33
34
XRP/USD

Our long position in Ripple continues to make gains. It is close to our target objective of

$0.25000. Should traders book profits?

The downtrend line at $0.25000 is likely to offer a strong resistance. However, if the digital
currency breaks out of it, a rally to $0.3000o is possible.

Therefore, traders can book partial profits, about 30% at the current levels and raise the stops on
the remaining position to breakeven.

This will ensure that the traders pocket some profits and the remaining position becomes risk-
free.

They should continue to trail their stops higher if the digital currency breaks out of the
downtrend line.

35
36
LTC/USD

Currently, Litecoin is trading at the center of the range between $44.16 and $57.729. How can we trade
it?

The best way to trade in a range is to buy at the support and sell at the resistance. However, as
price is ruling at the midpoint, we don’t recommend a trade at the current levels.

Nevertheless, if Litecoin breaks out of the range, it will signal strength. Therefore, we
recommend a long position at $58 with a stop loss of $49. The target objective of this trade is
$71.

However, if the digital currency breaks below $50 and falls to $44 levels, we shall wait and
watch its performance at the lows before buying it. We don’t recommend a long position at $44
anymore because of the lack of buying interest in the digital currency.

37
38
39
 FINDINGS:

A pilot study has been conducted in March 2018 to collect data about different aspects of cryptocurrency. The
survey aimed to measure the spread of cryptocurrency use to have a clear picture from the practical view. It explored
what cryptocurrency that the participants use, how often they use it and how they spend it. Moreover, the survey
also explored the participants’ confidence of dealing with cryptocurrency in a time that using such virtual money is
not fully controlled and regulated. The survey also investigated the participants’ expectations of the future of
cryptocurrency. The survey questionnaire involved 21 questions that were expected to be answered in a short time
(5-10 minutes) inorder to save participants’ time and encourage them to participate. I used online survey website
called surveymonkey to design the questionnaire which then distributed online using Facebook network and
cryptocurrency forum websites. The website ResearchGate was also used to collect data by using the questions’ tab.
The questionnaire was also sent to some participants by email. I collected data from 45 multinational internet users
and most of them were Indians. Ifiltered them and I found that 31 surveys were valid to be analysed where the others
were discarded since they were incomplete. Most of the participants were aged between 21-30 years old and they
represented 61.29% of the total participants. Participants who aged between 31-40 represented 32.26% where
participants over 40 years old represented 6.45% only. More than half of the participants were students and they
represented 77.42% where the remaining participants were people in employment. The following sections highlight
the main findings and provide indications as to how the main research questions might be answered based on the
survey results and our analysis. A. The spread of virtual currency use The spread of using virtual currency varies
from platform to another. I found that the most common virtual currency form is the loyalty points. Then virtual
currency in social games comes second, virtual currency in social networks is the third and finally virtual currency
in peer to peer networks. The spread of virtual currency use in our pilot study can be illustrated as follow: Loyalty
points: The result of the survey showed that around 87% of the participants are using loyalty points. They ranged
from frequent subscribers to rare subscribers in loyalty point programs. The reason of this high percentage is that
most of loyalty points programs are launched a few years ago and they became more popular between users and
customers. Another reason is that consumers benefit from collecting points and credits from their daily activities
such as shopping, so they can recover some of their consumption. Moreover, loyalty points can be used by different
age groups where consumers can be children, youth, adults and elders. Fig.7 shows participants’ subscriptions in
variety of loyalty programs.

Cryptocurrency in social games: The results indicated that 70.9% of the participants are using virtual currency in
social games where 29.1% do not use them. Several social games have been involved in the questionnaire including
Second Life, FarmVille, CityVille, Farmhouse and Travian and all of them have virtual currency form in their
playing activities. Such a large proportion of the surveyed participants who use virtual currency in social games
indicates the large volume of trading virtual currency in online games and also indicates the strong impact of
implementing VC in online games. It is clear that the use of virtual currency in social games is growing
considerably. This growth is also supported from other reports and studies in the literature. For example, more than
100 Chinese are using Q Coin which is the virtual currency provided by Tencent game company. Moreover, around

40
7.6 million active players in World of Warcraft social game are using WoW gold. It is reported that there are 2.8
million daily trades completed in the game’s auction house. Cryptocurrency in peer to peer networks: Virtual
currency in peer to peer networks comes at the end of the list in terms of spread but it can be the top in other terms
such as functionality and control. The surveyed Internet users were asked whether they have heard about this type of
virtual currency, particu- larly about Bitcoin. Around 90.32% of them have not heard about Bitcoin or any other peer
to peer virtual currency form where only 9.68% have heard about such currency. This low perception and spread
rate of decentralized virtual currency in our pilot study can be justified based on some reasons. The limited forms of
peer to peer VC where some of them were still impractical projects at the time of the conducted study. Furthermore,
many of peer to peer VC were not traded practically and there were no many vendors accepting such currency as a
payment method. However, perception and awareness rate is likely to be higher in the current time due to recent
publications of the virtual currency concept and also the increased vendors who are accepting this type of currency.

41
BIBLIOGRAPHY:

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the Financial Services Industry?, 2015.

[3]A. Shelkovnikov, Blockchain Enigma. Paradox. Opportunity, 2016.

[4]M. Morisse, Cryptocurrencies and Bitcoin:Charting the Research Land-

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[5]J. Manyika, C. Roxburgh,The great transformer:The impact of the

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[6]F. Reid, M. Harrigan,An analysis of anonymity in the bitcoin system,

Security and Privacy in Social Networks (2013) 197–223.

[7]I. Eyal, E. G. Sirer, Majority is not Enough:Bitcoin Mining is Vulner-

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[8]G. O. Karame, E. Androulaki, S. Capkun,Double-spending fast pay-

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