Keonakhone, Binly

UWRT 1104

March 4, 2018

Professor Campbell

We all want to have a secured future whether it be a high paying job or an investment that

will constantly rise in value. However, with investments such as stocks, values tend to rise or fall

in a very slow manner making investors think of an alternative to gain money faster. This is

where cryptocurrencies come in as an alternative investment for those who want a quicker way

to earn money. The main question is; whether what will cryptocurrency look like in the future for

investors?. The values of bitcoin have dramatically decreased making the future of

cryptocurrency looking very bleak. The values of a coin are affected by political changes and

events that dramatically affect investors such as hacks and the recent SEC regulation that

occurred that I will explain later. First, let me explain the history of cryptocurrency and how it

came about.

Good intro, makes me think of some questions which will be answered in the next pg.

In 2009, Cryptocurrency already existed before that date however it was not as big as it is

now. During 2009, a group of people with an alias of Satoshi Nakamoto who were and still is are

unknown to this date. They designed and created the first cryptocurrency with blockchain called

Bitcoin. Blockchain is simply database that records Bitcoin transactions that operates with user

to user, meaning that it was is not operated by an authority figure. Bitcoin during that time was

worth 0 dollars when it came out. Not long after that,Soon later, the price of Bitcoin increased
900% in only three months making itself worth 0.08 cents. Fast forwarding, nine months later

you could see how big Bitcoin has become and how dominant it has become. The value of

Bitcoin is now 7000 dollars making it still the most dominant coin.

Some sentences are kind of confusing, but good explanation of blockchain and history

The time of Cryptocurrency and Bitcoin during 2009 to 2017 looked promising with

values constantly going up. During the end of December 2017 Bitcoin was now worth 19,000

dollars, meaning that if you owned one Bitcoin you basically owned $19,000 dollars. However,

at the beginning of 2018, the future of Cryptocurrency again looked ever so bleak. The value of

Bitcoin has decreased to a mere value of $7000 dollars compared to the end of 2017. What had

happened during that time, what caused the drop of value?

The history of cryptocurrency may be short and interesting however you may not know

all the technical prospects of it. How to earn, invest, and the process of trading is. Lets first start

with on how to even earn a cryptocurrency. It all starts with your computer and its graphics card

or central processing unit. The bases of all cryptocurrency rely on these two units to solve

mathematical equations to be rewarded a small bit of the currency of that cryptocurrency. For

example, there is a software called NiceHash that can be downloaded on the internet. NiceHash

is a program where you can start mining for your coin that you want to mine. Now after the

mining is done, a wallet is required to store it. This wallet provides two addresses, one for

receiving coin, and one that sends out coin. This is practically the bases on how to mine

cryptocurrency.

What is mining?
 On to the aspects about investments. There is a lot of prospects on the investment side.

There is risk into this side unlike its counterpart mining. This side is what I call the scary and

most convoluted side. The crypto market has about 1000 cryptocurrencies out there however

they are a handful of them that are relevant. The most dominant cryptocurrency out there again is

Bitcoin, and if Bitcoin’s value goes down there is a usually a following of other coins. There are

some processes to buy different kinds of cryptocurrencies. For one, you can’t buy all different

types of cryptocurrencies with one cryptocurrency exchange organizations. You must sign up

with different ones which makes the process a little difficult. Once that is done, you can either

buy cryptocurrencies or sell them. To sell cryptocurrencies, you can either go on an exchange

organization where you list the amount of currencies to sell, then a person either buys it. There is

an alternative way to sell and that is peer to peer exchange by sending your wallet addresses to

that buyer. Now that you understand the process of investing,. What affects the crypto market?

The crypto market is very volatile as values could drop in an instant making it a risk for

investor. However, they are reasons for this drop of value for Bitcoin. With new regulations from

both corporations and political agencies, the market of cryptocurrency can either drop or rise

depending on the type of policy they establish. For example, there were some new regulations

from the Security Exchange Commission or SEC for short that established new rules for Coin

Exchange groups to talk to regulators to register with them. The state of Arizona considers

establishing a new regulation that is beneficial for investors to pay taxes using Bitcoins as an

alternative payment. Currently the bill right now is not finalized until all of Arizona House of

Representative vote upon it. This may be irrelevant to this inquiry project however the CTFC or

Commodity Futures Trading Commission allows employees to invest in Cryptocurrencies if they

do not receive inside information. The biggest and probably the worst outcome for
cryptocurrency is the attempt of China to ban foreign currency trading options as China already

banned domestic currency exchange organizations. South Korea has been in talks on how to

regulate cryptocurrency trading. After some talk with other political regulators, they have

decided to allow cryptocurrency to be traded as long investors use “real-name bank accounts”,

according to Cheang Ming from CNBC. In Japan, two cryptocurrency industry groups have

agreed to merge to accelerate the establishment of regulations. The scene of regulations can be

fearful for investors however it does not stop there. The hacks and scams can lead potential

investors away from the scene.

Good descriptions, they help a lot with something that is compliclated like

cryptocuurencies. Try to think of a way to get the reader invested in what you have to say

In recent 2017, there were tons of hacks and scams during this time, however it probably

will not stop there as hackers will try to find solutions. Let’s first start with CoinDash. CoinDash

was an incident that made investors lose $7.3 million dollars. The incident started when the a

hacker was able to access the database of CoinDash and change the address where they receive

all the initial coin offering or ICO for short. An initial coin offering is a donation from investors

to an organization to basically start up a new cryptocurrency to compete against other currencies.

The Parity Wallet breach was a wallet breach that had a bug resulting in loses of $30 million

dollars during that time. The Enigma project scam was about fraudsters launching a fake token

pre-sale that resulted in lost of more than 1,500 Etherum that was worth $287 each during that

time. In November, a user found a bug in Parity wallet that resulted a freeze of $275 million

dollars’ worth of Ether. The Tether Token hack during late November resulted in $31 million

worth of tokens were taken from their storage unit and sent to an unknown bitcoin address. The

Bitcoin gold scam was about Bitcoin investors wallets being drained after using a service that
supported the development team, however this was not the case. Bitcoin Gold’s development

stated that they have no relationship with the group and warned investors to stay weary about this

type of services. The NiceHash market breach was about a hack that resulted in loss of about

4,700 Bitcoins. During that time, it was approximately worth $78 million dollars. The company

revealed that there was a compromise in one of their employee’s computers allowing the hacker

to gain access to the company’s accounts. During this period, it allowed developers and

organizations that markets to strengthen their security protocols which is a benefit for investors

and a lesson learned for them.

Good info here. Make sure you cite sources (source)

In December 2017, Bitcoin has reached an all-time high of $20,000 and stayed up there

for one month. The investors and news went crazy after seeing that Bitcoin was on the rise and

investors started to jump on the craze. This craze however suddenly started to fade after more

regulations from government agencies and corporations started to be enacted. The recent

Facebook policy banned all advertisements that promoted cryptocurrencies and ICOs. The reason

for this policy was to prevent user from getting mislead and scammed. The recent South Korean

regulation that was stated previously also account for the down fall of Bitcoin. These two were

factors that stemmed the downfall of the peak Bitcoin value and indicated how volatile the

cryptocurrency market is.

The Cryptocurrency market as we know it is very volatile and basically still in its own

fundamental stages. The market is still a growing place with about 1000 cryptocurrencies out

there and more to come. The regulations may seem to come out fast and it does seem that way.

However, the hacks and scams seem to slow down with more developers upping their security.

The real main question is, Is Cryptocurrency the Future? I leave that up to you to decide.
 Overall good work, try to think of a way to get your reader more involved and be sure to

cite sources. Maybe talk a little more about how unpredictable CC is to further validate your

question. All in all, you have some good progress and adding a few finishing touches would

make this essay great.

Works Cited Page

De, Nikhilesh. “Hacks, Scams and Attacks: Blockchain's 2017 Disasters.” Coindesk, 29
Dec. 2017, www.coindesk.com/hacks-scams-attacks-blockchains-biggest-2017-disasters/.
Neil Gandal & Hanna Halaburda, 2014. "Competition in the Cryptocurrency Market," Working
Papers 14-17, NET Institute. http://ideas.repec.org/p/cpr/ceprdp/10157.html
Rian Insights. “SEC And CFTC's Early Regulations On Cryptocurrencies Are Here: What It

Means For Market Participants.” Seeking Alpha, 8 Mar. 2018,

https://seekingalpha.com/article/4154800-sec-cftcs-early-regulations-cryptocurrencies-means-

market-participants.

Wren, Ian. “$400 Million Missing In Hack Of Japanese Digital Currency Exchange.” NPR, NPR,

26 Jan. 2018, www.npr.org/sections/thetwo-way/2018/01/26/581130968/-400-million-missing-

in-hack-of-japanese-digital-currency-exchange.