Abstract
The advent of cryptocurrencies and rapid growth of crypto-networks heralded a new era in evolution of financial relations. The main goals achieved by introduction of cryptocurrencies included: a) removal of the third party (the government, banking and financial institutions) from transactions between the parties to a transfer; b) anonymity of the parties; c) transaction security. The governments of various countries of the world have a different stance as regards the use of cryptocurrencies, and in some cases, they consider this medium of exchange illegal. The transnational nature of transactions involving cryptocurrencies and the absence of physical borders for these transactions complicate legislative regulation of the circulation of cryptocurrencies in Ukraine.The use of cryptocurrencies has significant effect on the economies of Ukraine and other countries of the world due to easy dissemination and popularity of this technology and the growing capitalization of cryptocurrencies. The exchange of cryptocurrencies into fiduciary money and the possibility of gaining substantial profits on a cryptocurrency exchange due to high volatility of cryptocurrencies necessitate development, as soon as possible, of approaches to legislative regulation of both terminological apparatus related to circulation of cryptocurrencies and the exchange transaction procedures, profit taxation, etc. Considering the multisided nature of crypto-networks and the diversity of cryptocurrencies currently existing in the world (over 2000 variants as of today), classification of existing cryptocurrencies and definition of their features represents a contemporary task.This article characterizes development of blockchain technology that serves as the basis for the functioning of cryptocurrencies, defines their characteristic features, positive and innovative concepts implemented with their advent. Cryptocurrencies were classified based on various criteria (issue type, network decentralization, limitation on issue, controllability of cryptocurrency issue, etc.), and two groups of features typical either for all cryptocurrencies or for their certain variants were proposed. It was proposed to define a cryptocurrency as a variety of e-money used as an alternative additional currency and circulated within global computer networks on the basis of blockchain technology that envisages asymmetrical encryption and the use of various cryptographic protection methods.
Highlights
Implementation of financial activity of the state occurs in various forms
Within the framework of financial activity of the state there was a movement of fiduciary funds, the value of which is stipulated by the imperative order of the state to use them as a way of payment, and the issuer of which is the state
These relations are properly regulated, but with the advent of cryptocurrency in 2009 which is not emitted by the state but has the certain value, there are more and more issues regarding the regulation of their turnover and the role they can play in the financial activities of the state
Summary
Implementation of financial activity of the state occurs in various forms. It is always associated with the turnover of public funds, the mandatory participation of the state or a territorial community in these legal relationships. We are invited to divide the cryptocurrencies for: 1) the purpose of creation (target / not targeted); 2) the degree of activity, or the achievement of emission limits (active / not active); 3) the type (original, original, and formation as a result of forks); 4) type of regulation (decentralized / centralized); 5) innovation (created on the basis of existing technologies or new ones); 6) by the method of issue (mining / financial instruments), etc. All operations with cryptocurrency transactions are in non-cash form Another feature of cryptography is the openness of the corresponding crypto-exchange systems to other payment instruments. Cryptography needs to be stored, which is used for so-called hot (funds are stored online with the involvement of a third-party service) or cold (located on the user’s computer) wallets In the latter case, centralization does not occur — each user has its own wallet and does not affect other participants in the cryptocurrency network. These systems are characterized by fast transactions [18; 19]
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