march 21

Literature Review- Block Chain Technologies and Crypto Currency as Financial Assets

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Literature Review- Block Chain Technologies and Crypto Currency as Financial Assets

Introduction

Block chain technologies and cryptocurrencies have emerged as a new and rapidly evolving field in the world of finance. Cryptocurrencies, in particular, have gained significant attention as a potential new financial asset that could challenge traditional currencies and financial instruments. The performance of cryptocurrencies as an investment, the impact of government cryptocurrency adoption on the economy and financial system, and the effect of blockchain technology on the stock market are the topics that were utilized to collect the data. This literature review will examine three articles that explore various aspects of block chain technologies and cryptocurrencies as financial assets.

The literature review articles were sourced from the Monroe College library's PROQUEST and EBSCOhost databases. Useful supplementary data was obtained from scholarly books, magazines, newspapers, and articles. They aided in the collection of data pertinent to the study of green cloud computing's effects on preserving the natural world. Articles from scholarly publications were retrieved online using a variety of search engines as well as by entering the title directly into the website of the respective publication's publisher.

Review of Literature

Cobert et al. (2018) extensively researched blockchain technology and the essential topics in such markets. The authors come from higher learning institutions like Dublin City University and Trinity College Dublin. The authors present the study in 2018 about the major topic since the development of Bitcoin as a financial asset in 2009 up to 2018. The main areas of the research paper include how blockchain technology has evolved, the developments happening in such markets, and unique issues about such demands. The researchers wanted to analyze various literature surrounding the growth of blockchain markets.

The authors also explain that direct transactions and payments between parties could be at risk of pricing bubbles. Cobert et al. (2018) suppose that this currency could endure the problem of price bubbles because of the recent increase in the price of Bitcoin. The new technology in finance will impact financial regulations because it brings forth a new set of currencies that traders will engage in. Companies that diversify to this technology are better positioned to earn returns as their income is also diversified. The authors suggest that Bitcoin technology consumes more energy in the present than before. Other studies indicate that bitcoin technology only consumes a little power since mining costs exceed revenue.

Minimization of risks

Masoomzadeh and Salmani (2022) presume that all other research in the past has been focusing in the risks of stock exchange. They put effort in explaining the relationship between blockchain and the market of stock exchange. Masoomzadeh and Salmani (2022) determine that the technology of blockchain could indeed be used to control several risks that arise in the stock market. The researchers, who are also members of Tabriz University, are qualified for such kind of research. These researchers embarked on research in the year 2021 in Iran.

           The authors used applied research to find and fulfill the purpose of the study. The analytical part of the research explained the analysis of various findings. Masoomzadeh and Salmani (2022) made effort to determine whether those companies in the business of stock trade would benefit from the improvisation of blockchain techniques, especially in Iran. The study period was between April 2011 to August 2021. The authors use documentaries and library means from the stock exchange of Iran to collect statistics for the research. The results show that the market share negatively affects the total risk. The total risk of the market rises by 0.01% when the market share of the stock rises by 1 percent. The finding of the study showed that the profits that companies can get out of transactions are inversely proportional to the risks that they face. Most importantly, blockchain technology positively influences risk since it increases risk by 0.0002.

Adoption of cryptocurrency strategies

               Mahdavieh (2019) conducted research to analyze the characteristics of kleptocratic regimes and how these attributes help to adopt cryptocurrency strategies of the government. The paper by Mahdavieh (2020) was impactful in showing that developing countries like Iran have suffered a lot from the restrictions of the first world countries like America. The authors were determining whether the national governments are likely to implement new cryptocurrency policies, especially in kleptocratic regimes.

               The research methodology was a complex analysis of statistics to determine the relationship between dependent and independent variables. The author used Mill’s method of agreement to establish whether attributes lead to the same outcome, thus confirming the correlation. The author also went further to conduct a comparative case study of the three countries. The findings of the study showed that cryptocurrency is initially part of the citizens of Iran, Russia, and Venezuela. The citizens of these countries share the attributes of a depreciating currency because of the sanctions from the West. Sanctions from western nations like the US continue to depreciate the value and progress of the economy.

Analysis of Literature

Cobert et al. (2018) article is suitable for gaining an understanding of the performance of cryptocurrencies as an investment and the factors that affect their prices. Its systematic approach and statistical evidence make it a reliable source for this topic. Mahdavieh (2019) article is suitable for gaining an understanding of the motivations behind government cryptocurrency adoption and the potential benefits and risks of such adoption. Its in-depth case studies make it a valuable source for this topic. Masoomzadeh and Salmani (2022) article is suitable for gaining an understanding of the potential effect of blockchain technology on the stock market and its volatility during crises. Its focus on a specific country and context may limit its generalizability, but its analysis of the Iranian stock market is still valuable.

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