Question

Describe the category for cryptocurrencies as digital assets. Use one (1) cryptocurrency as an example and discuss your reasons for choosing that cryptocurrency for this category. Analyse how cryptocurrencies as a digital asset could play an important role (or not) in the current global economy. Current global economy, in this context, is referring to phenomenon such as the US/China Trade War or/and COVID-19 crisis. Your findings must be properly justified and backed by facts and references.

Answer 1

Cryptocurrencies:

A cryptocurrency is a type of currency which uses Digital files as money. Usually the files are created using the same method as cryptography.

categories of cryptocurrency as digital assets:

​​​​​Digital currency is designed to work as a medium of exchange. There are many different types of cryptocurrencies:

1. Bitcoin

2. Litecoin

3. Ethereum

4. Ripple

5. Zcash etc.

Here we are choosing Bitcoin as an example:

Bitcoin: Bitcoin s a cryptocurrency. It decentralized Digital currency without a central bank or single administration than can be send from user to user on the peer to peer network without the need of intermediaries.

It play an important role in the digital assets:

1. Bitcoin is a digital assets designed by the investorinvestor to work as a currency. It is commonly referred to with terms like: digital currency, digital cash, electronic currency etc.

2. Bitcoin can be bought and sold both on and offline.

3. As of 2016 it was estimated there were over 800 Bitcoin ATMs operating globally.

In the current global economy play an important role which are as follow:

As Bitcoin is designed to transform the existing financial system and remove financial intermediaries it has the strong potential to affect the global economy. It affected the different areas which are following:

1. Bitcoin's Political Impact: Bitcoin bring themselves a good amount of political controversy. This is because no single government can entirely control them.

2. Effect of Bitcoin on bank and industries: The potential impact of the digital currency on the central banking should not be taken lightly. The bank of international settlements , jointly owned by the world's leading central banks noted in November that Bitcoin could interrupt the ability of central bank to exert control over the economy , as well as issuing money.

3. Bitcoin effect on global future: Almost every digital and international transaction involves use of one from or another of virtual currencies or credit.