Rise of Cryptocurrencies

Abstract

This chapter examines any research or references to cryptocurrencies that are stated as fact are in reference to Bitcoins. Cryptocurrencies pose a unique challenge to individual states by encroaching on a state’s right to a monopoly of its own currency, yet offer a taste of a truly global free market. Cryptocurrencies have little to no transactional costs, depending on the specific currency. Reliability is something that is questioned often in literature, but at the theoretical level, cryptocurrencies are built upon a system of verification. Cryptocurrencies offer anonymity where the sender does not have to meet the receiver face-to-face, thus the only identifying feature of either party is only their public keys. Cryptocurrencies can provide financial inclusion. There is a lack of oversight when it comes to cryptocurrencies. As stated before, cryptocurrencies are decentralized, meaning there is no overall ownership of the currency, which creates its own sets of problems for regulation.