Cryptocurrency Industry Research Articles

Cryptocurrency Risks, Fraud Cases, and Financial Performance

In this study, we examine major cryptocurrencies, present notable fraud cases, describe fraud risks, and analyze cryptocurrency financial performance. People debate whether cryptocurrency is an investment opportunity, the new Dutch Tulip Bubble, or a giant Ponzi scheme. There have been a number of high-profile fraud cases associated with cryptocurrencies, such as the FTX scandal in late 2022, thereby making fraud a real concern to current and potential future investors. Regarding financial performance, cryptocurrencies experienced a major collapse in value in the most recent period of the study, about three times worse than the major stock market indices. While in prior periods, cryptocurrencies have significantly outperformed stock market indices, recent fraud cases and the extreme volatility of cryptocurrencies indicate that investing in cryptocurrencies comes with much higher risk than traditional stock market investments. The debate over the investment potential of cryptocurrencies continues, whether they have long term value or are simply the new Dutch Tulip Bubble. The study’s findings will be useful to investors, regulators, and academic researchers regarding the cryptocurrency industry.

Robust optimization for energy-aware cryptocurrency farm location with renewable energy

The cryptocurrency industry has changed the human life and accelerated financial exchange in this decade. Many investors want to invest in this industry and establish cryptocurrency farms. This research sets up a CryptoCurrency Farm Location (CCFL) as a facility location that supplies energy by Renewable Energy (RE). We presented a new robust optimization with the stochastic approach for tackling uncertainty in CCFL and compared it with stochastic CCFL. Our objective function includes maximizing the mean and minimum profits coefficient under different scenarios by adding an energy-aware constraint. Our model enables us to select supply energy by RE or power network country. The results show that the profit of robust stochastic CCFL is 4.94% less than stochastic CCFL because the proposed model is more conservative. Also, by increasing the conservativity coefficient to 50%, the total profit decreases to 4.94%. In addition, the discount rate grew to 10%, the profit down to 12.31%, and the problem increased profit by increasing the scale. Finally, the probability of scenario is changed and affects to profit function.

The Cautious Tale of Cryptocurrency Mining

For followers of the cryptocurrency industry—and who isn't nowadays—2022 did not end well and going into 2023 it doesn't appear much better. There is a dark cloud hanging over the industry. The barrage of negative news regarding cryptocurrency valuation and related technology concerns has no doubt created headwinds for the industry and those who have invested in cryptocurrency mining. Certainly, numerous questions have surfaced as to crypto's sustainability—both on the environmental front and financially, whether investors can rely on the technology's security. At the time of this writing, questions surrounding the latter have sent the crypto market reeling, with impacts on broader exchanges and investigations and indictments brought against one of the industry's largest cryptocurrency exchangers, FTX. And while numerous state and federal leaders are calling for more regulatory oversight of the industry on several fronts (we'll save the financial fallout for another editorial), the impacts of cryptocurrency mining on a changing climate are at the top of the list at federal, state, and local levels.

Assessing the Sustainability of Bitcoin Mining: Comparative Review of Renewable Energy Sources

This study conducts a comprehensive assessment of Bitcoin mining's sustainability, concentrating on the incorporation of renewable energy sources such as hydroelectric, wind, solar, and geothermal power. It investigates the adaptability and potential constructive collaboration of these energy systems in the context of the Bitcoin mining scenario. This research presents a detailed understanding of the possibilities and challenges involved with integrating hydro, wind, solar, and geothermal resources into sustainable Bitcoin mining processes by methodically examining energy efficiency, environmental effect, and economic viability. The study contributes to the discussion on establishing a sustainable future for digital currencies by exposing significant connections between renewable energy technology and the cryptocurrency industry. To achieve the stated goals, the study carefully examines the energy usage strongly associated with Bitcoin mining and transaction processing. It investigates the elements that contribute to Bitcoin's energy consumption, addressing the environmental consequences of its energy-intensive activities. The study aims to find feasible techniques for reducing Bitcoin's carbon footprint, to cultivate a thorough understanding of the complex relationship between the digital currency revolution and its environmental consequences. It emphasizes the importance of balancing technical developments with environmental responsibilities. The concept contributes to establishing a conscious and sustainable future for the digital currency ecosystem by addressing the numerous components of Bitcoin's energy usage and advocating a collective commitment to protecting the environment in the face of advancing technology paradigms.

ОСНОВНІ ВИКЛИКИ ФУНКЦІОНУВАННЯ ІНДУСТРІЇ КРИПТОВАЛЮТ НА ФІНАНСОВОМУ РИНКУ

The article analyzes the rating of Ukraine according to the Global Cryptocurrency Adoption Index. It is noted that out of the TOP-20 countries in the rating, there are ten countries with below-average income, eight countries with above-average income and two countries with high income. This trend demonstrates the dominance of developing markets. The dynamics of the bitcoin and USD exchange rate are analyzed. Forecasting of the bitcoin exchange rate was carried out using the exponential smoothing method, because this method showed the smallest mean absolute error. The forecast results show the growth of the bitcoin rate. The interdependence between exchange rate of bitcoin cryptocurrency and pairs of the most influential world currencies, world prices for precious metals and securities rates on the largest stock exchanges is determined using correlation-regression analysis. The advantages of using cryptocurrencies have been identified, including high speed of transactions, reduction of the number of intermediaries and low fees. Also defined the threatening nature of the development of the crypto-industry for the economic potential of the state, taking into accountavailable withcurrent global challenges such as cyber-attacks and fraud and data theft. Real fraud schemes in the field of cryptocirculation are considered. The main challenges to the functioning of the cryptocurrency industry are analyzed, including volatility, uncertainty, risk of loss, insecurity of owners, lack of guarantees, large number of cryptocurrencies, technical risk, fraud and data theft. It is noted that without determining the clear legal status of cryptocurrencies in the country, it is impossible to resolve the legal, accounting and tax consequences of these transactions. It was determined that for the legal circulation of cryptocurrencies, the creation of a financial institution or a special state body, which should exercise control over the circulation of cryptocurrencies, must be ensured as a minimum; introduction of taxation for companies whose activities are related to the crypto industry; establishing the obligation of users to declare their income and profits from income regarding crypto-assets in the national currency, etc.

CRYPTOCURRENCY MARKET AS A NEW SEGMENT OF THE RUSSIAN FINANCIAL MARKET ON THE WORLD ARENA

This study considers the problem of the formation of the cryptocurrency market as an element of the financial market in Russia. Our study aims at solving the problem of trust in cryptocurrency and finding new ways to use it in the Russian economy. During the study, the main trends in the development of the cryptocurrency market both in Russia and abroad were identified, the main comparative characteristics of the cryptocurrency market with other elements of the financial market were identified, and the stages of the formation of the cryptocurrency industry were explored. The purpose of the study is to identify problems in the development and implementation of the cryptocurrency market in the Russian economy against the background of an increase in the number of sanctions restrictions and currency barriers to prevent a severe economic crisis and stagnation of the country's leading industries. The main events and statements of regulatory bodies that lead to an increase in the demand for cryptocurrencies among the Russian population are considered.

The future of the web? The coordination and early‐stage growth of decentralized platforms

AbstractResearch SummaryThis abductive study investigates how management occurs without managerial authority as part of a previously unseen organizational form—the decentralized platform with an independent market value. Our mixed‐methods study of the cryptocurrency industry draws on fuzzy‐set qualitative comparative analyses (QCA) to analyze archival and interview data and offer new theory on how decentralized platforms coordinate activities to grow in an early‐stage, before network effects kick in. We find that, in the absence of a central authority, platforms coordinate activities with three mechanisms, namely decentralized (a) algorithmic coordination, (b) social coordination, and (c) goal coordination. Our QCA treat these mechanisms as explanatory conditions and, using a representative sample of 20 cryptocurrency platforms, reveal which configurations of decentralized coordination mechanisms nurture, or hinder, early‐stage platform growth.Managerial SummaryFirms operate around a managerial hierarchy that distributes tasks, resources, information, and rewards to organizational members who pursue common goals as contract‐bound employees. From 2009, a new organizational form, called the “decentralized platform,” emerged and diffused without relying on hierarchy nor managerial authority—and without having to employ anyone. The most prominent decentralized platform, Bitcoin, has millions of users, thousands of contributors, and a market valuation never achieved before by an organization without a CEO nor shareholders. This study explicates how this unprecedented level of organizational decentralization functions in practice. We foreshadow implications for the digital economy, wherein “Web3” innovations, such as non‐fungible tokens and DAOs, have already shifted the orchestrating role played by platforms in capitalist societies.

The Cryptocurrency Market in Kenya: A Review of Awareness and Participation by the Youth

This study examines Kenyan youths' level of knowledge and involvement in the cryptocurrency industry. Digital currencies, known as cryptocurrencies, use a peer-to-peer technology to speed up internet transactions. The idea of cryptocurrencies started in the 1980s but has since developed significantly. The study collected secondary data and conducted online surveys. In this study, panel data from four different cryptocurrencies' values, transaction fees, and volumes over a six-year period were studied. The findings indicate a connection between the number of cryptocurrency transactions, their prices, and their transaction costs. The research also demonstrates how much the youth in Kenya are aware of and use cryptocurrencies. This paper also highlights some factors that may be considered when engaging in crypto business. It also highlights some of the principal properties of cryptos. The study concludes that there is a need for both local and international regulation of the cryptocurrency market to boost investor confidence and improve security.

The Impact of Celebrity Endorsements on the Artificial Inflation of the Cryptocurrency Industry

The Impact of Celebrity Endorsements on the Artificial Inflation of the Cryptocurrency Industry

The Impact of Celebrity Endorsements on the Artificial Inflation of the Cryptocurrency Industry

The Impact of Celebrity Endorsements on the Artificial Inflation of the Cryptocurrency Industry

Blockchain Technology for Cashless Investments and Transactions in Digital Era With SWOT Approach

One of the most visible information technologies in today's digital age is transaction and investment technology, where users or the public are facilitated in transactions by no longer using cash. Users also feel safer because they do not need to carry cash. Moreover, the current digital era makes it easy for users or the public to invest anywhere and anytime without disrupting other businesses. Blockchain technology can be used as an alternative to non-payment transactions or commonly known as cashless transactions. Blockchain technology can also be used as an investment in electronic money. The methodology used to provide an overview and evaluate the benefits of blockchain as an alternative to digital payment and investment activities in the cryptocurrency industry uses a SWOT approach. Based on the SWOT approach that has been taken, it can be concluded that with internationally recognized safeguards of confidentiality and the ease of conducting investment transactions and activities without payment, the Weaknesses and threats can be controlled for more investors to enter the world of electronic money.

Цифровой рубль и перспективы интернационализации российской валюты

Currently, some countries are testing Central Bank Digital Currencies (CBDC). In February 2022 the Central Bank of Russia (CBR) launched its own pilot project of the digital Rouble. According to the CBR’s concept the digital Rouble’s platform (DRP) may be the first step to improvement of trans-border payments/settlements including its potential integration with CBDC platforms of other countries. The author analyses the CBR’s concept and financial statistics to answer the question: can the digital Rouble increase usage of the Russian currency worldwide? Currently the Rouble is mainly used in trade settlements of Russia with Belarus (the share of the Rouble is 81 per cent) and Kazakhstan (62 per cent). In 2014 financial sanctions were imposed on Russia and the US Dollar transactions became unavailable for certain businesses. Since that moment the Russian Government made a lot of efforts to increase usage of the Rouble in foreign trade settlements, but the success was marginal. In general, the share of Rouble has increased, but it has seriously grown only in settlements for Russian exports to India – from 1.1 per cent in 2013 to 57.8 per cent in 2021. Despite Russia has an open financial account there is a number of obstacles for wider usage of the Rouble worldwide and they are as follows: Russia exports mainly raw materials, whose prices are denominated in the US Dollars; though last years the Russian government mainly borrowed in Roubles still at any convenient case it also borrows in other currencies; Russia has a big sovereign fund (over 10 per cent of its GDP), which is invested in non-Rouble papers; it is not rare happened that the state officials in public speeches advocate depreciation of the Rouble. Cumulatively the above mentioned issues lessen confidence in the Rouble and consequently decrease demand for it and its liquidity. Will the digital Rouble be immune to all of this? The author analysed its features and did not find anything that might help to overcome the abovementioned obstacles. There is also no evidence that the Russian Government may change its policy regarding the sovereign fund and other obstacles. Also, another serious threat for the digital Rouble may come from a new concept of the Russian Ministry of Finance, which advocates very soon inclusion of the cryptocurrency industry (CI) into the Russian financial system. Various countries, upon widening their experiments with the CBDC, begin to realise that the CI is a real threat to the CBDC. China is the first who has understood that there is a choice: either the CBDC or the CI, but not both. The CI already functions worldwide on a range of highly sophisticated and secure digital platforms. They cannot be really regulated by any country, though some governments have illusion that they can do this. The CBDC platforms will provide only in-country transactions at initial stage and connection between various CBDC platforms is a question yet. The CI platforms already operate globally and also give their users big anonymity, while this feature is something that the CBDC projects intend to exclude. Additional problem for Russia is that, given the low level of the Rouble internationalisation, in case the cryptocurrency industry would be legalised here, so this gives to local users much more interesting and developed instrument that yet to became feasible local digital currency. That’s why the author doubts that the digital Rouble will substantially increase the international role of the Russian currency in the near future.

Determinants to be considered while investing in cryptocurrency markets: A case of bitcoin

When Bitcoin became one of the world's most popular investment options, the cryptocurrency industry has showed potential development, and it had a similar influence on the Indian financial sector too. Aside from Bitcoin, other altcoins are gaining popularity and dominating the cryptocurrency market. As a result, the goal of this research is to identify at the macroeconomic factors that influence Bitcoin prices, such as the USD/INR exchange rate, gold prices, crude oil prices, the New York Stock Exchange Dow Jones (NYSE) price, NIFTY price, and Sensex price, as well as the prices of nine alternative cryptocurrencies in the cryptocurrency market: Binance coin, Bitcoin Cash, Bitcoin SV, Ether, Ethereum, Litecoin, Monero, Tether, and ripple. Bitcoin volume and market capitalization are additional factors, undertaken in the study, that are potential influencers of cryptocurrency pricing. The time series data, which comprises of bi-weekly data for all variables, will be used from 2015 to 2020. The OLS (ordinary least square) regression model in EVIEWS will be used in this study to conduct an empirical analysis.

MARKET ANALYSIS AND DETERMINATION OF STATUS CRYPT IN UKRAINE

Modern Ukraine is not an active participant in the global cryptocurrency market. The estimated factor was the volume of transactions for this type of currency, as well as the degree of infrastructure development for this currency, assessed as very specific. At the same time, according to experts in this industry, Ukraine is more likely at a development stage than an outsider in the cryptocurrency industry. We also analyzed the positive and negative aspects of working with cryptocurrency. The protocol for working with this currency is considered in sufficient detail in order to identify opportunities, shortcomings, and features of a new position in the currency sphere. Ukraine will give an explanation to the fiscal policy in this matter.

Community Views About Zakat on Cryptocurrencies

<p><em>The cryptocurrency industry has exploded, with an increasing number of individuals investing in digital assets — even Malaysians who adhere to Shariah financial norms. The surge in Islamic faith members' involvement in cryptocurrencies such as Bitcoin and Ethereum has given birth to Zakat payments. Zakat is the third pillar of Islam, and it compels Muslims to make charitable contributions if they have sufficient means. The major considerations to explore are whether zakat is required on cryptocurrency investments and how the community sees zakat on cryptocurrencies. As a result, this paper will investigate the prospect of </em><em>cryptocurrencies as a digital assets</em><em> being a new source of revenue for zakat from an Islamic perspective by acquiring appropriate rulings (fatwas) and then investigating community attitudes on zakat on cryptocurrency.</em><em></em></p>

Legal aspects of cryptocurrency’s circulation: international experience and possibilities of its application in Ukraine

Based on documentary scientific methodology, the legal aspects of the circulation of cryptocurrencies in Ukraine and other countries of the world are analyzed. The relationship between the state's level of economic development and the level of its interest in cryptocurrencies is demonstrated. It was shown that almost all successful states can create and implement their own cryptocurrency. In addition, it was noted how important the issue of choosing the proper form of legal regulation of the cryptocurrency industry is today. For example, many researchers and experts have emphasized that a kind of compromise must be reached on issues related to the legal regulation of cryptocurrencies. It is therefore concluded that this applies to both the sphere of domestic and international law, where clarity, transparency and unambiguousness of legal norms must prevail. Regarding the latter, it is clarified that cryptocurrencies should no longer exist as a shadow source of income for unidentified individuals. Instead, they should be completely banned and eliminated in both the economic and legal fields, or they should be legalized and regulated by current legislation.

An Algorithm for Linearizing the Collatz Convergence

The Collatz dynamic is known to generate a complex quiver of sequences over natural numbers for which the inflation propensity remains so unpredictable it could be used to generate reliable proof-of-work algorithms for the cryptocurrency industry; it has so far resisted every attempt at linearizing its behavior. Here, we establish an ad hoc equivalent of modular arithmetics for Collatz sequences based on five arithmetic rules that we prove apply to the entire Collatz dynamical system and for which the iterations exactly define the full basin of attractions leading to any odd number. We further simulate these rules to gain insight into their quiver geometry and computational properties and observe that they linearize the proof of convergence of the full rows of the binary tree over odd numbers in their natural order, a result which, along with the full description of the basin of any odd number, has never been achieved before. We then provide two theoretical programs to explain why the five rules linearize Collatz convergence, one specifically dependent upon the Axiom of Choice and one on Peano arithmetic.

The role of the carbon market in relation to the cryptocurrency market: Only diversification or more?

The role of the carbon market in relation to the cryptocurrency market is still unclear. Given the carbon-intensive nature of the cryptocurrency industry, whether the carbon market is able to capture the carbon footprint of the cryptocurrency market (i.e., diversification) or act as a safe haven or a hedge against it remain unexplored issues. To address this issue, this paper employs the generalized autoregressive score-dynamic conditional score-Copula (GAS–DCS–Copula) model, incorporating the asymmetric tail distribution. We identify the asymmetric tail properties of both the carbon and cryptocurrency markets with significant otherness. Further, to account the importance of China in mining the cryptocurrencies, we incorporate Chinese carbon market in our analysis to investigate the difference with the European carbon market. Finally, we provide evidence that the European carbon market provides a safe haven and a hedge against the cryptocurrency market while Chinese carbon market is not. Our findings have implications for both investors and policymakers.

The rise and fall of cryptocurrency coins and tokens

Since Bitcoin’s introduction in 2009, interest in cryptocurrencies has soared. One manifestation of this interest has been the explosion of newly created coins and tokens. In this paper, we analyze the dynamics of this burgeoning industry. We consider both cryptocurrency coins and tokens. The paper examines the dynamics of coin and token creation, competition and destruction in the cryptocurrency industry. In order to conduct the analysis, we develop a methodology to identify peaks in prices and trade volume, as well as when coins and tokens are abandoned and subsequently “resurrected”. We also study trading activity. Our data spans more than 4 years: there are 1082 coins and 725 tokens in the data. While there are some similarities between coins and tokens regarding dynamics, there are some striking differences as well. Overall, we find that 44% of publicly-traded coins are abandoned, at least temporarily. 71% of abandoned coins are later resurrected, leaving 18% of coins to fail permanently. Tokens experience abandonment less frequently, with only 7% abandonment and 5% permanent token abandonment at the end of the data. Using linear regressions, we find that market variables such as the bitcoin price are not associated with the rate of introducing new coins, though they are positively associated with issuing new tokens. We find that for both coins and tokens, market variables are positively associated with resurrection. We then examine the effect that the bursting of the Bitcoin bubble in December 2017 had on the dynamics in the industry. Unlike the end of the 2013 bubble, some alternative cryptocurrencies continue to flourish after the bursting of this bubble.

The history of blockchain technology and cryptocurrency market development

Subject. The article addresses the cryptocurrency market that originates from the creation of the world's first cryptocurrency, i.e. Bitcoin. It overviews the blockchain technology and mining procedures for the digital currency. Objectives. The purpose of the study is to evaluate trends in the cryptocurrency market within the historical aspects, perform a profound analysis of digital assets terminology, including the concept of forks, tokens and altcoins, investigate changes in the Bitcoin and alternative cryptocurrency market by analyzing the Bitcoin Dominance Index, which has suffered significant fluctuations over the past five years. Methods. The study rests on the systems analysis of conceptual framework, the design of classification criteria, the functional, structural, statistical, graphical, and economic analysis. Results. The findings enabled to identify growth drivers for world’s cryptocurrency trading platforms. The growth primarily relates to the progressive development of the cryptocurrency market infrastructure. Other factors include the extended usage of stablecoins on the world’s biggest crypto exchanges. Conclusions. The paper provides a detailed consideration of changes in the cryptocurrency market development, which are divided into three main stages. The cryptocurrency community appreciates blockchain projects that have introduced new technologies. The most popular projects are implemented in the banking sector or used in the interaction between the cryptocurrency industry and traditional fiat currencies.