Work detail

The Principle and Economic Analysis of Bitcoin

Author: Mgr. Jinggang Jiang
Year: 2021 - summer
Leaders: doc. Mgr. Tomáš Holub Ph.D.
Consultants:
Work type: Masters
MEF
Language: English
Pages: 54
Awards and prizes:
Link: https://ckis.cuni.cz:443/F/?func=direct&doc_number=002448993&local_base=CKS01&format=999
Abstract: The development of Internet technology has promoted the progress of all aspects
of society. Under the background of Internet finance, the traditional financial model is
changing, such as currency payment. With the deepening of Internet technology, the
virtualization of money is deepening, and the market entry, trading and payment
methods are also subverting the tradition. Bitcoin as a new means of payment began
to appear in the public eye. It is a challenge to the traditional way of trading supported
by Internet technology. Despite the constant controversy since its inception, Bitcoin
still occupies a place with its unique advantages - Asymmetric encryption, decentralization,transparency of transaction records and so on. In the eyes of
opponents, Bitcoin is more of a highly speculative asset, and as it becomes
progressively more difficult to mine, the cost of mining is increasing. However, in the
eyes of supporters, it is a reliable means of payment, not subject to government
supervision, nor will it produce a virtual transaction record. From the regulator's point
of view, it is more like a shelter for unscrupulous people to evade regulation and
commit money laundering and crime. It is undeniable that in just a few years, Bitcoin has developed to a certain
scale,has a certain industrial chain structure and market, and even has become a
financial tool for some investors. However, judging from the records of bitcoin
transactions, whether the huge price fluctuations will be a bubble, so far, bitcoin
prices have experienced four sharp rise and fall, many countries even began to
prohibit the operation of its trading platform. With the development of Bitcoin, more
and more voices begin to gather here. As a highly innovative and controversial "invention" in the 21st century, this paper will discuss the supply and demand
equilibrium of Bitcoin price and its influencing factors on the basis of monetary
economics, and discuss the correlation between the price of Bitcoin against US dollar
and macroeconomic data by using VAR model. The transaction and speculation
properties of Bitcoin are described. From the perspective of economics, finance and Internet technology, this paper
will analyze the influencing factors of Bitcoin price, describe the historical transaction
records, discuss its price formation mechanism from the theoretical model of supply
and demand in economics, and focus on the analysis of the impact of government
regulation and Internet search on Bitcoin price.

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