Cryptocurrencies in the future of money and monetary policy
- Authors: Brown, Henry Brandon
- Date: 2020
- Subjects: Cryptocurrencies
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/47495 , vital:40122
- Description: The idiosyncratic allure of cryptocurrencies, in particular Bitcoin, has attracted widespread, if reticent, attention in the financial markets. Since Bitcoin’s introduction in 2008 there has been a growing interest in digital assets possibly supplanting traditional payment methods. Two conceptual questions raised regarding cryptocurrencies are firstly, whether cryptocurrencies meet the traditional functions of money; secondly, what is the future of cryptocurrencies? This dissertation seeks to examine the future of cryptocurrency by reference to money and monetary policy. The further question, whether cryptocurrencies meet the traditional functions of money, is tested via a combination of theoretical and empirical analysis. The study explores both statistical and empirical models, in illustrative comparative detail, provided by analysis which included ADF and KPSS test models, alongside an ARMA(p,q)-GARCH(1,1) model. Cryptocurrencies present both significant benefits, alongside immense shortcomings. They provide the novel ability to conduct anonymous international transactions on a decentralised platform with lower transaction fees. However, the very nature of that anonymity could provide their downfall as much as they open a market for illicit activities. In addition, cryptocurrency’s significant energy consumption through the mining of cryptocurrencies is of concern to environmentalists. The empirical section of the dissertation consists of a comparative analysis between Bitcoin/USD time series to the Rand/USD time series, with specific attention devoted to the level of volatility of each time series. This was important in determining whether cryptocurrencies fulfil the store of value function of money. The dissertation concluded that Bitcoin/USD time series exhibited identifiable adverse characteristics of autocorrelation and ARCH effects, thus suggesting that Bitcoin/USD is strongly associated with volatility. The Rand/USD signified the same effects although of significantly lesser order than that of Bitcoin/USD. Consequently, cryptocurrencies are seen to act more as an asset than a currency. Nonetheless, cryptocurrencies seem likely to grow as a medium of exchange as more and more businesses gain knowledge of the innovation and seek to adopt innovative ways to become more efficient and follow technology trends. Currently, fiat currencies remain superior in the financial market, simply because cryptocurrencies are perceived not to fulfil the traditional functions of money. However in the future, the market share of cryptocurrencies is likely to increase, and so the future of the financial markets will surely include a coexistence of both fiat and cryptocurrencies, as people’s preferences determine where they feel safe to hold their money.
- Full Text:
- Date Issued: 2020
- Authors: Brown, Henry Brandon
- Date: 2020
- Subjects: Cryptocurrencies
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10948/47495 , vital:40122
- Description: The idiosyncratic allure of cryptocurrencies, in particular Bitcoin, has attracted widespread, if reticent, attention in the financial markets. Since Bitcoin’s introduction in 2008 there has been a growing interest in digital assets possibly supplanting traditional payment methods. Two conceptual questions raised regarding cryptocurrencies are firstly, whether cryptocurrencies meet the traditional functions of money; secondly, what is the future of cryptocurrencies? This dissertation seeks to examine the future of cryptocurrency by reference to money and monetary policy. The further question, whether cryptocurrencies meet the traditional functions of money, is tested via a combination of theoretical and empirical analysis. The study explores both statistical and empirical models, in illustrative comparative detail, provided by analysis which included ADF and KPSS test models, alongside an ARMA(p,q)-GARCH(1,1) model. Cryptocurrencies present both significant benefits, alongside immense shortcomings. They provide the novel ability to conduct anonymous international transactions on a decentralised platform with lower transaction fees. However, the very nature of that anonymity could provide their downfall as much as they open a market for illicit activities. In addition, cryptocurrency’s significant energy consumption through the mining of cryptocurrencies is of concern to environmentalists. The empirical section of the dissertation consists of a comparative analysis between Bitcoin/USD time series to the Rand/USD time series, with specific attention devoted to the level of volatility of each time series. This was important in determining whether cryptocurrencies fulfil the store of value function of money. The dissertation concluded that Bitcoin/USD time series exhibited identifiable adverse characteristics of autocorrelation and ARCH effects, thus suggesting that Bitcoin/USD is strongly associated with volatility. The Rand/USD signified the same effects although of significantly lesser order than that of Bitcoin/USD. Consequently, cryptocurrencies are seen to act more as an asset than a currency. Nonetheless, cryptocurrencies seem likely to grow as a medium of exchange as more and more businesses gain knowledge of the innovation and seek to adopt innovative ways to become more efficient and follow technology trends. Currently, fiat currencies remain superior in the financial market, simply because cryptocurrencies are perceived not to fulfil the traditional functions of money. However in the future, the market share of cryptocurrencies is likely to increase, and so the future of the financial markets will surely include a coexistence of both fiat and cryptocurrencies, as people’s preferences determine where they feel safe to hold their money.
- Full Text:
- Date Issued: 2020
An investigation into the current state of web based cryptominers and cryptojacking
- Authors: Len, Robert
- Date: 2021-04
- Subjects: Cryptocurrencies , Malware (Computer software) , Computer networks -- Security measures , Computer networks -- Monitoring , Cryptomining , Coinhive , Cryptojacking
- Language: English
- Type: thesis , text , Masters , MSc
- Identifier: http://hdl.handle.net/10962/178248 , vital:42924
- Description: The aim of this research was to conduct a review of the current state and extent of surreptitious crypto mining software and its prevalence as a means for income generation. Income is generated through the use of a viewer's browser to execute custom JavaScript code to mine cryptocurrencies such as Monero and Bitcoin. The research aimed to measure the prevalence of illicit mining scripts being utilised for “in-browser" cryptojacking while further analysing the ecosystems that support the cryptomining environment. The extent of the research covers aspects such as the content (or type) of the sites hosting malicious “in-browser" cryptomining software as well as the occurrences of currencies utilised in the cryptographic mining and the analysis of cryptographic mining code samples. This research aims to compare the results of previous work with the current state of affairs since the closure of Coinhive in March 2018. Coinhive were at the time the market leader in such web based mining services. Beyond the analysis of the prevalence of cryptomining on the web today, research into the methodologies and techniques used to detect and counteract cryptomining are also conducted. This includes the most recent developments in malicious JavaScript de-obfuscation as well as cryptomining signature creation and detection. Methodologies for heuristic JavaScript behaviour identification and subsequent identification of potential malicious out-liars are also included within the research of the countermeasure analysis. The research revealed that although no longer functional, Coinhive remained as the most prevalent script being used for “in-browser" cryptomining services. While remaining the most prevalent, there was however a significant decline in overall occurrences compared to when coinhive.com was operational. Analysis of the ecosystem hosting \in-browser" mining websites was found to be distributed both geographically as well as in terms of domain categorisations. , Thesis (MSc) -- Faculty of Science, Computer Science, 2021
- Full Text:
- Date Issued: 2021-04
- Authors: Len, Robert
- Date: 2021-04
- Subjects: Cryptocurrencies , Malware (Computer software) , Computer networks -- Security measures , Computer networks -- Monitoring , Cryptomining , Coinhive , Cryptojacking
- Language: English
- Type: thesis , text , Masters , MSc
- Identifier: http://hdl.handle.net/10962/178248 , vital:42924
- Description: The aim of this research was to conduct a review of the current state and extent of surreptitious crypto mining software and its prevalence as a means for income generation. Income is generated through the use of a viewer's browser to execute custom JavaScript code to mine cryptocurrencies such as Monero and Bitcoin. The research aimed to measure the prevalence of illicit mining scripts being utilised for “in-browser" cryptojacking while further analysing the ecosystems that support the cryptomining environment. The extent of the research covers aspects such as the content (or type) of the sites hosting malicious “in-browser" cryptomining software as well as the occurrences of currencies utilised in the cryptographic mining and the analysis of cryptographic mining code samples. This research aims to compare the results of previous work with the current state of affairs since the closure of Coinhive in March 2018. Coinhive were at the time the market leader in such web based mining services. Beyond the analysis of the prevalence of cryptomining on the web today, research into the methodologies and techniques used to detect and counteract cryptomining are also conducted. This includes the most recent developments in malicious JavaScript de-obfuscation as well as cryptomining signature creation and detection. Methodologies for heuristic JavaScript behaviour identification and subsequent identification of potential malicious out-liars are also included within the research of the countermeasure analysis. The research revealed that although no longer functional, Coinhive remained as the most prevalent script being used for “in-browser" cryptomining services. While remaining the most prevalent, there was however a significant decline in overall occurrences compared to when coinhive.com was operational. Analysis of the ecosystem hosting \in-browser" mining websites was found to be distributed both geographically as well as in terms of domain categorisations. , Thesis (MSc) -- Faculty of Science, Computer Science, 2021
- Full Text:
- Date Issued: 2021-04
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