The Price Determinants of Bitcoin as a New Digital Form of Money
The paper is devoted to the study of the properties of cryptocurrency similar to the properties of money by the example of the analysis of bitcoin price determinants. The authors simulate the market price of bitcoin to establish the interconnection of the
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Siberian Federal University, Krasnoyarsk, Russia [email protected] 2 Aligarh Muslim University, Aligarh, India 3 Universiti Sultan Zainal Abidin, Terengganu, Malaysia 4 V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences, Moscow, Russia 5 Moscow Technological Institute, Moscow, Russia 6 Krasnoyarsk State Agrarian University, Krasnoyarsk, Russia
Abstract. The paper is devoted to the study of the properties of cryptocurrency similar to the properties of money by the example of the analysis of bitcoin price determinants. The authors simulate the market price of bitcoin to establish the interconnection of the bitcoin exchange rate with the demand factors for world reserve currencies using regression analysis tools. The simulation results suggest that bitcoin has the properties of a new form of digital money. Among the pricing factors, the RMB as a national currency of China, a country that is one of the main Bitcoin issuing centers in the world, is of particular importance. Keywords: Cryptocurrency price determinants
Bitcoin Money properties Cryptocurrency
1 Introduction Human society cannot be imagined without money. Money is a specific good of maximum liquidity, which is the universal equivalent value of other goods or services [1]. With the development of computer technology and networks, the world has entered the era of digital money. Coins and banknotes are gradually being replaced by plastic payment cards, and many payment systems work on the Internet [2]. But progress does not stand still, and now we are seeing an increase in the popularity of cryptocurrencies a completely new digital means of payment of the 21st century, which has a number of significant differences from other types of money. This paper discusses the question of whether cryptocurrencies can play the role of money, evaluating how well they perform the three traditional functions of money: the unit of account, a medium of exchange, and a means of storing value. Technically speaking, fulfilling the role of a medium of exchange is a rather trivial requirement that any good, digital or physical, is capable of, this good is purchased for the purpose of © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2020 R. Silhavy et al. (Eds.): CoMeSySo 2020, AISC 1294, pp. 784–792, 2020. https://doi.org/10.1007/978-3-030-63322-6_66
The Price Determinants of Bitcoin as a New Digital Form of Money
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subsequent sale in exchange for another good. In this regard, cryptocurrencies can fulfill this role, since they trade on online crypto exchanges, can be easily transferred online and can perform thousands of transactions daily. Undoubtedly, for digital currencies to become a widely accepted medium of exchange, they have a long way to go, especially compared to national currencies with their networks of established financial infrastructure. Although the digital nature of cryptocurrencies is very suitable for the role of an exchange medium, this role is unlikely to incr
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