IMPACT OF CRYPTOCURRENCY ON THE INTERNATIONAL BUSINESS COMMUNITY.
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IMPACT OF CRYPTOCURRENCY ON THE INTERNATIONAL BUSINESS COMMUNITY.
CHAPTER ONE INTRODUCTION
Introduction
1.1 Background of the Study
The rapid development of ICT has greatly benefited society, changing people’s lives, attitudes, and social activities. One of the most significant advances in societal resilience has been the ability to access vast amounts of knowledge (Fathian et al., 2009).
The information technology industry removed intellectual and practical constraints, providing ancient civilizations with an environment conducive to progress, creativity, and dynamic entrepreneurship. Information technology is required to optimise business operations for both long-term and fresh occupations and endeavours.
To solve this issue, several worldwide projects (including electronic banking and commerce) have been launched (Afsharpour et al., 2013). In the digital economy, online retail and finance, and electronic banking sectors,
new technologies and the bigger global network—particularly the Internet, internal and external networks—are now being used. All nations strive for a high level of e-commerce.
One of the best financial technology breakthroughs is cryptocurrency, which has the potential to change international financial markets (Ali, Clarke, & McCorry, 2015).
Because of its decentralised devices and lack of supervision by banks and other political agencies, this type of financial technology innovation is immune to price regulation.
Cryptocurrencies are at the forefront of economic innovation. It has recently sparked widespread interest and presents both opportunities and challenges to the financial sector (Brandvold et al., 2015).
The buyer gives the seller their cryptocurrency, which he subsequently exchanges for the actual currency required for the transaction (Brandvold et al., 2015).
A peer-to-peer money model known as cryptocurrency enables online payments to be performed without the involvement of third-party organisations such as currency associations (Nakamoto, 2008; Dwyer, 2015).
The distributed ledger serves as the foundation for cryptocurrencies since it is particularly user-friendly and ensures the tools’ security, openness, and reliability (Nakamoto, 2008; Böhme et al., 2015; Dwyer, 2015).
Bitcoin exhibits the following characteristics: It has no borders, thus no government can regulate it. Its transactions are cheap because there is no middleman. It is speedier because it uses the internet, and you can conduct business from anyplace you have internet access.
According to Baur, Bühler, Bick, and Bonorden (2015) and Lewis et al. (2017), cryptocurrencies such as Bitcoin are considered as digital economic assets that use cryptography to replace financial institutions or other parties that rely on one-third.
Because Bitcoin allows for direct payments from a birthday celebration to others rather than through financial institutions, Nakamoto (2008) defined Bitcoin as a comprehensive peer-to-peer digital criticism model based solely on blockchain technology.
Moore and Stephen (2016) highlight the fascinating advantage of cryptocurrencies over licenced exchanges, which is extremely helpful to any nation.
Because of the low transaction costs of cryptocurrencies, individuals and organisations may establish independent middlemen businesses where consumers can exchange goods and services without going through a financial institution (Brandvold et al., 2015).
Moore and Stephen (2016) conducted study to assess whether cryptocurrency should serve the same purpose as gold assistance, a well-known product around the world.
They determined that because cryptocurrencies are recognised globally and have a long-term value, the central bank should maintain them. Due to the current str.
Cryptocurrencies may reduce the cost of international transfers, particularly remittances, because they leverage distributed ledger architecture to avoid intermediaries (Dwyer, 2015).
Reduced transaction fees could eventually lead to increased economic openness and growth. So cryptocurrency is described as a type of money that functions as a unit of account or a store of value. It is usually used for payments that provide anonymity and eliminate middlemen’s fees (Dwyer, 2015).
Cryptocurrency is a unique asset due to its distinct qualities and responsiveness to economic functions (Briere et al., 2015). History shows that, while Bitcoin is an incredibly volatile currency, it provides investors with a high return.
Furthermore, Bitcoin risk is mitigated by its inclusion in a wide range of portfolios. Investors understand that the greatest way to profit from an investment is to buy commodities at a discount and then resell them at a premium. Individuals that purchased Bitcoin at its inception may have profited by 1000-10,000% of their initial investment (Bohme et al., 2015).
Even if cryptocurrency has a negative influence on the effectiveness of financial transactions, it may nevertheless pose a risk to the banking system, clients, and investors in smaller nations that employ cryptocurrencies (Hardy & Norgaard, 2016).
Similarly, a high level of anonymity and a decentralised cryptocurrency ecosystem contribute to other issues, including as funding for illicit operations such as drug cartels, missile procurement, and sabotage (Dowd, Hutchinson, & Kerr, 2012).
There is still a lot of speculation about its future, despite the fact that using encrypted foreign currencies as a simple cash account was designed to give everyone the right to verified Internet identities (Johnston, 2002). First, it lacks centralised management by any government or director, which is a severe issue for governments across the globe (Baur, Hong, and Lee, 2018).
The majority of international locations are motivated to constantly warn their citizens about investment risks due to records of frequent illegal transactions, terrorist financing activities (Johnson & Nedelisco, 2005), attention to the unintentional collapse of the entire system, and a clear definition of coins.
Similarly, it has vast potential and promises investors huge benefits.Previously, several academics studied blockchain technology and provided insufficient evidence of Bitcoin actions on the technical blockchain (Antonopoulos, 2014).
However, as study continues, the bitcoin factor improves. In this regard, the research includes sensitive information concerning blockchain technology. In light of this, previous research no longer investigates and assesses the influence and significance of blockchain science.
As a result, it is clear that many fields that have been overlooked in research require the concepts and principles of blockchain science. Blockchain science is a discipline that is no longer fully analysed and investigated in research,
making it an area to seek for gaps. Second, one of the major research gaps addressed in this inquiry is the lack of sufficient data or ownership to establish Bitcoin’s impact on the cryptocurrency FX market.
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