Blockchain and Cryptocurrency: The Future of Financial Innovation and Challenges

Abstract

This paper systematically studies the profound impact of blockchain technology and cryptocurrencies on the financial sector, and deeply analyzes the transformation potential they bring to the traditional financial system through decentralized, secure and transparent transaction models. This study uses the comprehensive data set provided by the Kaggle platform to build a hybrid analysis framework integrating longitudinal data analysis and advanced prediction technologies, focusing on the dynamics of the cryptocurrency market between 2017 and 2021. By using ARIMA modeling technology, this article explores market trends, participant behavior, and volatility, understands the challenges and opportunities that cryptocurrencies bring, and then provides valuable insights. The findings of this study highlight the importance of the regulatory framework in risk management and maintaining financial stability, while also highlight the potential of blockchain technology to drive financial innovation and reshape monetary policy. This study has important practical significance for the financial sector to effectively utilize blockchain technology.