Cryptocurrency

1.0​ I​ ntroduction
1.1​ ​Background
1.1.1​ ​Etymology: ​Greek kryptos – “hidden”, logos – “mind”, “word”
1.1.2​ ​ Historical Background
1.1.2.1​ ​Used among Egyptians who replaced some
aerolites to make the reading of information harder. ​ ​
1.1.2.2 ​Cryptography and cryptanalysis were the most
useful and utilized during armed conflicts in the
antiquity and later times including the First and the
Second World War.
1.1.3​ ​Formal definition
1.1.3.1 Any form of currency that only exists digitally,
that usually has no central issuing or regulating
authority but instead uses a decentralized system to
record transactions and manage the issuance of new
units, and that relies on ​cryptography​ to prevent
counterfeiting and fraudulent transactions
1.1.3.2​ ​ ​A digital currency whose unit is a coin, a
prefix “crypto” means that a given currency is based
on cryptography.

Thesis Statement: Cryptocurrency is a form of money that entails online procedures,

requires conversion of money and leads to illegal buying products.

2.0 Entails online procedure

2.1 Digital Currency
2.1.1 Bitcoin
2.1.2 Ripple
2.2 Encryption
2.2.1 Cryptology
2.2.2 Cryptography
3.0 Requires conversion of money
3.1 Brokerage Services
3.1.1 Bank Transfer
3.1.2 GDAX
3.2 Local/ In Person
 3.2.1 Seller
3.2.2 Bitcoin ATM
4.0 Leads to illegal buying practices
4.1 Decentralized Currency
4.1.1 No government taxation
4.1.2 No bank accreditation
4.2. Guns
4.2.1 Texas accepting cryptocurrency
4.2.2 Japanese merchants
5.0 Conclusion

References:
Cryptocurrencies characteristics - TradeRoom. (n.d.). Retrieved from
http://traderoom.pl/en/guides/cryptocurrencies-characteristics/

How does Bitcoin work? - Bitcoin. (n.d.). Retrieved from https://bitcoin.org/en/how-it-works

McGoogan, C. (2018, March 8). What is cryptocurrency, how does it work and why do we use
it? Retrieved from https://www.telegraph.co.uk/technology/0/cryptocurrency/

Seppala, T. J. (2018, March 8). Japan sanctions cryptocurrency exchanges amid illegal activity.
Retrieved from
https://www.engadget.com/2018/03/08/japan-cryptocurrency-exchange-sanctions/

CNBC. (2018, February 13). South Korea vows firm action against illegal, unfair cryptocurrency
trading. Retrieved from
https://www.cnbc.com/2018/02/13/south-korea-vows-action-against-illegal-unfair-cryptocurrenc
y-trading.html

https://www.bankrate.com/investing/12-cryptocurrency-alternatives-to-bitcoin/

https://www.buybitcoinworldwide.com/united-states/

https://www.buybitcoinworldwide.com/en/buy-bitcoins-with-cash/
 A thought that is now dominating the digital world. What once was a dream of the

newspaper era is now becoming a reality. A new step for the digital world had come to be. From

being able to research online to investing online. Although, these online investments are now

having problems regarding regulation and privacy. According to Oxford Dictionaries,

Cryptocurrency is a digital currency with certain encryptions to have a regulation of the units of

currency. It is used to transfer funds with verification that operates separately from a central

bank. While Merriam-Webster defines cryptocurrency as a digital currency that has no regulating

authority which solely relies on cryptography to prevent fraudulent transactions. Crypto came

from the Greek word ​krypto ​which means “hidden”. While currency comes from the Latin word

currens ​which meant “condition of flowing” but was later on defined by John Locke as

“circulation of money”. Four thousand years ago, Egyptians were already practicing hiding

messages through cryptology. Egyptians replaced certain aerolites to make it difficult to

understand for undesirable people. In the 21​st ​century, a chinese military named Wu Jing Zong

Yao wrote codes about the formula of powder and for war purposes. Julius Caesar made one of

the easiest and commonly known codes today wherein Caesar only replaced letters such as A to

D, B to E and C to F. Renaissance gave so much importance in encoding so much so that they

would hire those who knew how. England’s Sir Francis Walsingham even hired encoders to

prove the infidelity of Mary Stuart. The usage of Cryptology and Cryptanalysis were utilized the

most during the First and Second war to send messages enemies would not understand. This

paved the way to Cryptocurrency; an online currency that is associated with cryptology.

Cryptocurrency is a form of money that entails online procedures, requires conversion of money

and leads to illegal buying products.

 In order to be in the crypto world, one must know the online procedure of

cryptocurrency. Bitcoin is a cryptocurrency that was created by an unknown person with an alias

of Satoshi Nakamoto. Transactions did not need a bank to be a middle man. Surprisingly, Bitcoin

can be used to book hotels on Expedia, furnitures on Overstock and even Xbox games. In 2017,

the price of Bitcoin skyrocketed by thousands through trading (Yellin, 2017). Whereas, the

currency owned by Ripple, a company that claims to be a blockchain technology to build a new

payment system of the future. The difference of Bitcoin and Ripple is that Bitcoin uses “mining”

or people using computer to solve complex puzzles to keep the network running. Ripple uses a

novel consensus algorithm to validate transactions (Orcutt, 2018). Encryption happens to secure

messages by the buyer and seller. Oxford Dictionaries defines cryptology as the study of codes

or the art of writing and solving. In Bitcoin, cryptology is considered as mining. Moreover,

Oxford Dictionaries define Cryptanalysis as the art of deciphering coded messages without being

told a key. In the crypto world, to decipher a message, you would have two keys namely public

and private that automatically encodes the messages. To obtain the digital currencies like

Bitcoin, it requires conversion of money. This is where brokerage services enter. Bitcoins are

stored in “digital wallets” in a cloud or on a user’s computer. It is considered as a virtual bank

account that enables users to receive and send bitcoins. Unfortunately, bitcoin wallets are not

ensured by the FDIC or Federal Deposit Insurance Corporation in the US. Meaning that wallets

can be hacked and deleted resulting to the loss of Bitcoins. Coinbase, one of the premier

exchanges uses a system to sell the digital money. Coincheck, a cryptocurrency exchange in

Japan experienced hacking and lost $530 Million that led them to government scrutiny but is still

considered a brokerage service for Bitcoins today. Local/ In Person can be located to have
money converted to Bitcoin. The user must know who are authentic Bitcoin sellers around the

city and can meet with the seller to transact. This is done when the user does not want to transact

through banks to transfer money. Today, B1or one bitcoin is equal to $7, 928.99. Price can drop

or rise depending on the demand of the users. The unstableness of cryptocurrencies can lead to

illegal buying practices. South Korea plans to ban cryptocurrency due to tax evasions. Since

cryptocurrencies are not regulated by the government, policymakers are struggling to regulate an

asset that is skyrocketing for over the last year. The proliferation of the virtual currency and the

accompanying trading frenzy is questioned by regulators globally. Many central banks have

refrained from supervising cryptocurrencies themselves​. (Kim, 2018). Tracking point, an

Austin-based company that manufactures rifles, could be able to purchase firearms through

Bitcoin. Other merchants are also looking into selling products with Bitcoin. Criminal

investigations are happening in which investigators look at how it could be used to anonymously

purchase illegal items. Gavin Blair, a writer from “The week in Asia” stated that while ​China has

banned cryptocurrency exchanges ​and almost all related activities, and South Korea has banning

anonymous transactions, Japanese authorities, in contrast, have been far more welcoming. For

Japan, tax revenue from the cryptocurrency business, including capital gains taxes from

individual investors and from corporations, could amount to 1 trillion yen (US$9.2 billion)

(Shiono, 2018).
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https://www.nbcnews.com/tech/innovation/texas-gun-dealers-draw-tech-crowd-bitcoin-n65596
http://www.scmp.com/week-asia/business/article/2131758/us1-billion-down-why-japan-still-love
-bitcoin