Fin-433 final report - Crypto-currencies & their future in Bangladesh. Cryptocurrency refers to forms PDF

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Crypto-currencies & their future in Bangladesh. Cryptocurrency refers to forms of digital or virtual currency that are used for financial transactions online and are secured by cryptography. Though it has been a subjected of scrutiny and criticisms, the rise of cryptocurrency has been a global pheno...

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COURSE CODE: FIN-433

Crypto-currencies & their future in Bangladesh INSTRUCTOR: MAHBUB FARID SEMESTER: Fall 2018 Team Yalow Section: 05 SUBMITTED BY: Md.Ishrafil Bhuiyan

Table of Contents Executive Summary..............................................................................................................................................1 Introduction & the idea........................................................................................................................................2 Types of cryptocurrency.......................................................................................................................................3 Bitcoin – most valuable part of cryptocurrency.............................................................................................3 Litecoin:..............................................................................................................................................................3 Ethereum:...........................................................................................................................................................3 Blockchain..............................................................................................................................................................3 Advantage of Cryptocurrency:.............................................................................................................................4 Drawback of Cryptocurrency:.............................................................................................................................4 Future of Cryptocurrency in Bangladesh: - Infrastructure..............................................................................5 Conclusion..............................................................................................................................................................6 Reference................................................................................................................................................................7 Appendix................................................................................................................................................................8 Comment................................................................................................................................................................9

Executive Summary Cryptocurrency refers to forms of digital or virtual currency that are used for financial transactions online and are secured by cryptography. Though it has been a subjected of scrutiny and criticisms, the rise of cryptocurrency has been a global phenomenon. But most people have lack of knowledge about the cryptocurrency. The first form of cryptocurrency to surface was Bitcoin in 2009 using Blockchain technology. To this day it is still the most popular and valuable form of cryptocurrency. More than 4000 types of cryptocurrency exist today. Blockchain technology can be described as a distributive ledger that continuously keeps records and stores information. It is transparent and incorruptible and it has transformed the way business works. Although transactions via cryptocurrency are secured and fast, the cryptocurrency are extremely volatile. It has been accepted in many parts of the world, but it has also been banned by a number of countries. Crypto currencies are criticized for their use by illegal parties for secured and pseudonymous transactions. Currently, crypt currencies are totally banned in Bangladesh and trading in crypto currencies are considered as punishable crimes. Bangladesh will fall behind other countries, if crypto currencies turn out becoming mainstream means of trading as it will lack a proper infrastructure. Even if the government decides not to allow cryptocurrency uses, the government should work on educating the people with the knowledge of the crypt currencies and the Blockchain technology, while creating a technological infrastructure to implement and integrate the Blockchain technology.

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Introduction & the idea Cryptocurrency can be referred as Electronic money or currency. This word “Cryptocurrency” raised the question about 21st Century Unicorn or the money of the future? Cryptocurrency has now become a global phenomenon and many people use it to complete their transaction. But most of the people are now aware about it. Even many bankers, consultants are not aware about basic concept of Cryptocurrency. Cryptocurrency is a digital asset designed to work as a medium of exchange to peer to peer transaction on online.[ CITATION Wik184 \l 1033 ] After 1990, the internet user and the number of online companies had increased. So, the necessity of online payment system was also very high. In 1995 the Digital cash was introduced. Afterwards, many electronic currencies was invented to complete an online transaction. Finally, Cryptocurrency (Bitcoin) was emerged as a side product of the Digital Cash at 2009, to prevent the major drawbacks of Digital Cash. Cryptocurrency transactions are made through block-chain technology. The users can keep their currency in the electronic wallet. The Cryptocurrency are mainly used for buying goods, investing, trading at online. There are many online services accept payments. For example, Bitpay, Coinpayments, Coingate, etc. As users of Cryptocurrency are increasing, a lot of concerns have been raised about it. The authorities of all over the world is making law about Cryptocurrency. The law and regulations can vary among country to country.

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Types of cryptocurrency Bitcoin – most valuable part of cryptocurrency Bitcoin is basically electronic currency which is a part of cryptocurrency. The system enables payment to be sent between users without key authority like bank and payment approach. It is made electronically, now it is used all over the world because of being more safe, secure, fixed and fast. It was invented by Santoshi Nakamoto in 2008 after development of the Blockchain technology.[ CITATION wik182 \l 1033 ] The Bitcoin process: Bitcoin is highly empowering but also different from the currency. Bitcoin are made by a mathematical algorithm which producers a new batch of Bitcoin fast and usually every 10 minutes. The acquire coins are required to be mined by miners. Miners is an important part of Bitcoin. The Bitcoin miners boost keep the Bitcoin network secure by supporting transaction. Miners is also used to conform pending transaction by including them in the Blockchain. Blockchain records every Bitcoin transactions. The Bitcoin algorithm sets still exists about 21 million Bitcoin.

Litecoin: Litecoin is another type of cryptocurrency that is decentralized cash for the web age and open source software released by Charlie Lee in October 2011. Litecoin made nearly as like Bitcoin. To create and transfer coin no need to anyone because it is open source model cryptographic protocol so no need to oversee by a central authority. Litecoin can work quicker exchange because its block time is 2.5 minutes. Up to now, it has circulated supply 59,223,113 LTC (19 November 2018). Limit of supply of litecoin is 84,000,000 LTC. Its current value is being close to 31.053 USD but it's changing every moment.

Ethereum: Ethereum cryptocurrency was released on 30 July 2015 by Vitalik Buterin and Gavin Wood. Ethereum is a sort of digital money that is an open source and dependent on block chain technology. Ether is a digital money whose block chain is produced by the Ethereum platform. Ethereum gives a decentralized virtual machine which is Ethereum Virtual Machine (EVM), it can execute content utilizing network system of public nodes to internationally.it was devolved by the using of ‘‘GO, C++, Rust” language. Up to now, Ethereum vale is $95.12. its total circulating supply up to now is 104 million coin and total exchanged volume is $1,665,979,922

Blockchain The Blockchain is like a ledger of economic transactions which is uncorrupt. It can be programmed to record not just financial transactions but virtually everything of value. It was developed by a person or a group of people known by Santoshi Nakamoto. The backbone of a new type of internet was by Blockchain technology allowing digital information to be distributed but not copied. And it was later used to introduce the first form of cryptocurrency – Bitcoin. A global network of computers uses Blockchain technology to jointly manage the database that records Bitcoin transactions. That is, Bitcoin is managed by its network, and not any one central authority. The Blockchain technology is use for

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decentralization. By decentralization its mean the network operates on a peer-to-peer basis. When any financial transection occur between two parties using Cryptocurrency, Blockchain technology mainly cutoff the middleman of those transactions.

Advantage of Cryptocurrency: 

Lower fees: transaction fees are lower compare than debit card and credit card

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Instant payments: Cryptocurrency offers quick payment transfer.

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Eliminate fraud: Since cryptocurrency is a digital system and here is no third party. So there is no chance in doing fraud.

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No boundaries: payments made in this system are difficult to cancel. The coins cannot be faked, copied or spent twice. These ability assure that the integrity of the whole system, every month open for the users.

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No inflation: The maximum number of coins is limited by 21 million Bitcoin as a result any political forces or corporation cannot change this order. So there is no way to occur inflation in cryptocurrency.

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Decentralization: In Cryptocurrency process, there is no central authority in the network. The network is divided to all participants, each computer miners Bitcoin is a member of this system

Drawback of Cryptocurrency: Difficult to understand- cryptocurrency is new thing for the reason people do not have proper knowledge. They invest but lose their money because of lack of knowledge Uncertainty- The valuation of the cryptocurrency are extremely volatile and thus these are considered unstable Lack of Legal Backing- cryptocurrency are used in few countries, most of the country’s it’s not legal. Cybersecurity issues – cryptocurrency are not secure because anytime it can be attack by hacker or system fall Deregulation –As cryptocurrency follow decentralization method so it is too much difficult to regulate Double spending – there are possibility user of cryptocurrency, who use their money double purchase by same amount of money Dark net trading - there are possibility to use of cryptocurrency in illegal trading and dark net trading due to the benefit of anonymity Energy lose - The mining of Bitcoin requires a huge amount of energy. As a result country lose energy that can use in other production

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Future of Cryptocurrency in Bangladesh: - Infrastructure. At present, Cryptocurrency is Illegal in Bangladesh. According to the law related to Cryptocurrency states, these currencies do not conform to Foreign Exchange Regulation Act, 1947, Anti-Terrorism Act 2009 and Money Laundering Prevention Act, 2012, the notice also read. So using these currencies in Bangladesh is a violation of court of law. But the future is very unpredictable; it actually depends on many factors. Either cryptocurrency will be very common in Bangladesh or it will remain banned. Bangladesh is a developing country and 30% of the people are illiterate. But remaining 70% is not very highly educated. Very few percentage of people are highly literate. The literacy rate is a concerning matter for Cryptocurrency, because most of the illiterate people will not understand it. If cryptocurrency is to considered as currency like TK, the people must understand it. There are overlaps between the TK and the Cryptocurrency. The central bank is responsible for managing Tk and balancing the economic system including inflation and recession. On the other hand the cryptocurrency is nothing but some computer algorithm. So this is not possible without the implementation of advance technologies and experts. The functions of cryptocurrency are very complex. For example, the interest rate and commodity of price is controlled by the Central Bank using various techniques, where it is limited for Cryptocurrency. The security system of Cryptocurrency is also vulnerable. The law enforcement agencies around the world are struggling to monitor the illegal activities such as hacking, double spending. So this need more time to catch up with this technological advancement. To sum up, the use of Crypto currency is increasing around the world. And Bangladesh as part of the global world could adapt the Cryptocurrency to match up with the world. When Bangladesh will be a developed country and the Cryptocurrency will be a conventional currency, it will become a mainstream for transaction in Bangladesh. The views about the future of Cryptocurrency expressed here are personal.

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Conclusion Cryptocurrency have been operational for only nine years so it is very early to comment about its long term prospects. But this is using for various illegal activities such as money laundering. Bangladesh govt. has banned Cryptocurrency because they are not capable of handling it. But at future it will be a vulnerable part for making the country digitalized. And technological advancement can make this possible in the near future.

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(2018, 12 17). Retrieved from Wikipedia : https://en.wikipedia.org/wiki/Litecoin (2018, 12 17). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Ethereum (2018, 12 18). Retrieved from Coingecko: https://www.coingecko.com/en/price_charts/ethereum/usd Blockchain Technology. (2018, 12 17). Retrieved from https://blockgeeks.com/guides/what-is-blockchaintechnology/ Wikipedia. (2018, 12 17). Retrieved from https://en.wikipedia.org/wiki/Cryptocurrency wikipidia. (2018, 12 10). Retrieved from https://en.wikipedia.org/wiki/Bitcoin

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Appendix

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Comment

Md.Ishrafil Bhuiyan

During my resources I was knowing about cryptocurrency, how it is work and process. I also know about why people criticism of cryptocurrency and why it is poplar day by day. Another thing is that, I learn current value of several type of cryptocurrency and its circulated market supply and total limitation. Now I know that why cryptocurrency is illegal most of the country

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