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The Mechanism of Function of Cryptocurrency
Arkhireiska N. V., Kuchkova O. V.

Arkhireiska, Natalia V., and Kuchkova, Olga V. (2019) “The Mechanism of Function of Cryptocurrency.” Business Inform 2:407–413.
https://doi.org/10.32983/2222-4459-2019-2-407-413

Section: Finance, Money Circulation and Credit

UDC 336.74

Abstract:
The article is aimed at researching the mechanism of function of the most popular cryptocurrency Bitcoin and some types of Altcoins. When comparing electronic money and cryptocurrency it is determined that the only common feature is their digital appearance. Electronic money, unlike cryptocurrency, have legal status, statutory issuer, fixed offer, they are regulated by the State and are supervised. The digital currency, in turn, does not have a clearly expressed issuer, is produced by mining, the legal status is not defined in many countries. Today, cryptocurrency uses many different algorithms, such as SHA-256, Scrypt, X11, X13, Cryptonight and others, numbering more than 29 species altogether. Most Altcoins (alternative digital currencies) are only a variation of Bitcoin. When analyzing the demand and supply of cryptocurrencies is determined that the total capitalization of this market at the beginning of 2019 was 134 billion dollars, and the types of digital currency numbered more than 2000. The article analyzes the mechanism of function of the five most popular cryptographic currencies: Bitcoin, Ripple, Ethereum, Bitcoin Cash, Litecoin and the first Ukrainian cryptocurrency – Karbo. It is determined that cryptocurrency develops and does not require the State’s permission as to its emission or legalization – it exists outside the jurisdiction both in Ukraine and in most world countries.

Keywords: cryptocurrency, mechanism, algorithms of cryptocurrency, Bitcoin, Altcoin, miner.

Fig.: 3. Tabl.: 1. Bibl.: 15.

Arkhireiska Natalia V. – Candidate of Sciences (Economics), Associate Professor, Associate Professor, Department of Banking and Financial Services Market, University of Customs and Finance (2/4 Volodymyra Vernadskoho Str., Dnipro, 49004, Ukraine)
Email: [email protected]
Kuchkova Olga V. – Senior Lecturer, Department of Marketing, Ukrainian State University of Chemical Technology (8 Haharіna Ave., Dnіpro, 49005, Ukraine)
Email: [email protected]

List of references in article

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Vasylchak, S. V., Kunytska-Iliash, M. V., and Dubyna, M. P. “Vykorystannia kryptovaliut v suchasnykh ekonomichnykh systemakh Ukrainy: perspektyvy ta ryzyky“ [The use of cryptovolume in modern economic systems in Ukraine: prospects and risks]. Naukovyi visnyk LNUVMBT imeni S. Z. Gzhytskoho, no. 76 (2017): 19-25.
Duchenko, M. M. “Osoblyvosti formuvannia rynku kryptovaliut v Ukraini“ [The peculiarities of the formation of the market are crippling goods in Ukraine]. Efektyvna ekonomika. 2018. http://www.economy.nayka.com.ua/pdf/12_2018/111.pdf
Kornieiev, V. “Kryptovaliuty: era i sfera finansovykh innovatsii“ [Cripples: The era and scope of financial innovation]. Visnyk KNU imeni Tarasa Shevchenka, no. 1 (2018): 40-46.
Koldovskyi, A. V., and Cherneha, K. V. “Problemni aspekty teoretychnoho osmyslennia kryptovaliuty, yak yavyshcha suchasnoi informatsiinoi ekonomiky“ [Problematic aspects of theoretical understanding of cryptovolume as a phenomenon of modern information economy]. Problemy i perspektyvy rozvytku bankivskoi systemy Ukrainy, no. 42 (2015): 100-110.
Shtepenko, K. P. “Stan i perspektyvy rozvytku kryptovaliuty u sviti“ [Status and prospects of development of cryptology in the world]. Finansovyi prostir, no. 2 (2018): 121-126.
Markov, A. “Algoritm X13 dlia mayninga na graficheskikh protsessorakh“ [X13 algorithm for mining on graphics processors]. https://miningbitcoinguide.com/mining/sposoby/x13
“CryptoCurrency Market Capitalizations“. http://coinmarketcap.com
Dudina, O. I., Selina, O. V., and Pavelin, D. S. “Bitkoin - valyuta budushchego“ [Bitcoin is the currency of the future]. Fundamentalnyye issledovaniya, no. 3 (3) (2016): 561-565.
Karcheva, H. T., and Nikitchuk, S. M. “Virtualni innovatsiini valiuty yak valiuty maibutnyoho“ [Virtual Innovative Currencies as Futures Currency]. Finansovyi prostir, no. 2 (2015): 23-29.
Lyzunova, O. M. “Sutnist kryptovaliuty ta ii proryv v ekonomitsi“ [The essence of the crippling and its breakthrough in the economy]. Naukovyi visnyk Mizhnarodnoho humanitarnoho universytetu, no. 8 (2017): 196-199.
Veres, I. “Poniattia ta oznaky elektronnykh hroshei“ [Concepts and signs of electronic money]. Pidpryiemnytstvo, hospodarstvo i pravo, no. 8 (2017): 15-18.
“Skorost tranzaktsiy: kakoy kriptovaliutoy perevodit bystree“ [Transaction speed: which cryptocurrency to transfer faster]. The Blockchain Journal. 10.06.2018. https://thebcj.ru/2018/06/10/skorost-tranzakcij-kakoj-kriptovalyutoj-perevodit-bystree/
Vakhrushev, D. S. “Kriptovaliuta yak fenomen sovremennoy informatsionnoy ekonomiki: problemy teoreticheskogo osmysleniia“ [Cryptocurrency as a phenomenon of modern information economy: problems of theoretical understanding]. Naukovedeniye, no. 10 (2016): 4-15.

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