Bitcoin and others: the rise of cryptocurrencies

Identifier:  TFG:1693

Handle: https://hdl.handle.net/20.500.11797/TFG1693

Authors:  Echeveste Parodi, Camila

Abstract:
As all the coins in the world, the digital coins are characterized for being exchangeable and for their use as unit of accounts, but especially because their value is based on confidence: this one will change depending on people’s faith of obtaining them, to do transactions with them, to invest or to save. In fact, one of the most important particularities of the Cryptocurrencies is that they allow to make payments worldwide in a simple form and fast way, simply by a digital purse or “Wallet". One of the most primordial characteristics of cryptocurrencies is that they are decentralized coins, which means that they aren’t controlled either by any government nor institution. This turns them into global coins. This digital advantage is what differences them from the rest of coins of the world. If we speak of cryptocurrencies, undoubtedly one of the referents is Bitcoin, the sector's pioneer currency. Since its launch in 2009, it has promoted an important payment system network, since its operation is carried out through a P2P mechanism, which allows the information to pass directly from node to node (from computer to computer), with any intermediary, hence a decentralized currency. Although the lack of regulation may inspire distrust in users, Bitcoin currently has approximately 190 nodes in 95.3% of the countries of the world and its boom has been rising despite it. That is to say, decentralization has not been a source of distrust on the part of the users, given that the operations carried out as well as the Bitcoin shipments are managed collectively on the network. The electronic operations that have been generated from the changes and global transformations in the market of digital currencies have promoted important advances in terms of the form of payments and exchange operations, allowing purchases of all kinds of goods to be made. products with cryptocurrencies. This fact has meant an important evolution of the Cryptocurrencies to such an extent that during the first semester of 2018: more than 2000 types of Cryptocurrencies have been registered in different parts of the world. However, cryptocurrencies are not accepted as a medium of payment in many countries, since they are considered illicit, which means that, besides being able to be used anonymously, could generate distortions in the economy or even some kind of speculative bubble. However, users have placed their trust in them, allowing supply and demand to determine the price; and in spite of the drastic price fluctuations that it has had since its creation, it is still standing as a digital business alternative. In conclusion, all this evolution is due to the trust in the system, since in spite of all the aforementioned, there are several disadvantages to be highlighted, such as the lack of Bitcoin and others: the rise of cryptocurrencies regulation, high volatility or risk of vulnerability given the multiple attacks to hack the system , besides that they can be used as a means to evade taxes. However, these disadvantages have not interfered with the valuation or evolution of cryptocurrencies, at least for now.