Cryptocurrency and Related Controversy


It is no secret that human society is dependent on finances. Money is a specific commodity of maximum liquidity, which is the universal equivalent of the cost of other products or services. The development of money is inextricably linked to the development of the entire human civilization. Goods, weapons, coins, paper banknotes, and stocks are only a small part of what was and is still being used as money. With the progress of computer technology and communication networks, the world has entered the era of electronic money. Plastic payment cards are already replacing coins and banknotes rapidly. On the Internet, many payment systems were initially created only for electronic payments, such as PayPal, WebMoney, and others. Currently, digital currencies are not issued by national central banks. However, progress does not stand still, and now people are seeing the growth of cryptocurrencies — a new means of payment of the 21st century, which has several significant differences from other types of electronic money. The majority of the existing cryptocurrencies are based on a blockchain method. It is a “technology of the future and is created for safe storage of information, acceleration of transactions and abolishment of mediatory circles (banks, notaries, different systems of payment)” (Sichinava, 2019, p. 1). Today, many people worldwide use cryptocurrencies, although how efficient and applicable they are for individuals and businesses is a controversial question.

Cryptocurrency Around the World

The United States is probably the most advanced country in the context of cryptocurrency regulation. In the US, it is usually treated as a commodity, but the absence of the value-added tax does not result in any problems for miners and those who use cryptocurrency. New York introduced a special license that regulates mining and exchange called New York Bitlicense. In Vermont, a bill is being drafted to make smart contracts legally binding. Another project in New York – the Brooklyn Microgrid Project – is “operating a blockchain model that allows more than 50 households in the region to manage energy produced from individual solar panels and to trade with each other through personal mobile apps in real-time” (Lee, 2019, p. 9). The Brooklyn Microgrid Project not only propels forward the use of cryptocurrency but is also beneficial for society and the environment. The European Union regards cryptocurrency primarily as a means of payment, which does not allow it to be taxed. Start-up companies, especially mining firms, welcome this idea. In their approach, the EU authorities adhere to the following principles:

  • objectively consider all the possibilities of cryptocurrency;
  • evaluate business models working with cryptocurrency;
  • monitor and analyze the market.

These criteria are used to determine who and how to regulate and reduce the risks of the illegal use of cryptocurrency. In Germany, “an electric power company, Innogy, is developing a blockchain platform for individuals to charge and pay for electric power for their vehicles” via cryptocurrency (Lee, 2019, p. 9). Just like New York, Germany suggests that cryptocurrency could be useful in the everyday life. Spanish authorities obliged mining companies and individuals involved in mining to register as individual entrepreneurs, as well as pay taxes on profits from the production of cryptocurrency. In China, individuals are fully allowed all operations involving cryptocurrency, while for legal entities, primarily banks, operations with cryptocurrency are wholly prohibited. The Canadian authorities have established specific criteria that a cryptocurrency must meet:

  • must be used as a means of payment;
  • must be exchangeable;
  • must be a store of value.

In Australia, Israel, and various Scandinavian countries, cryptocurrency has received a taxable commodity asset status.

The Pros of Cryptocurrency

Cryptocurrency has plenty of advantages that appeal to businesses and investors.

  • The commissions for transactions related to cryptocurrencies are minimal.
  • The emission of most coins is limited and has an established maximum. Issuing new coins is transparent and strictly regulated, and inflation, in this case, is also impossible.
  • All transactions in the network are “stored in the blockchain, which is open and distributed”, meaning that “every miner has a copy and can verify them” (Kuo Chuen et al., 2017, p. 19).
  • The user’s wallet is insured against arrest and blocking and cannot be frozen.
  • Currency cannot be counterfeited or copied since it is protected by a unique code.
  • The most popular cryptocurrencies show positive growth throughout their existence with minor fluctuations. The well-known Bitcoin has grown hundreds of times since its inception and is expected to proceed to grow.
  • No operation and no currency can be regulated by anyone. If the transfer was made, it would most definitely reach the recipient. There is no intermediary, and hence no risk that one’s money will reach the wrong account or the bank will poorly fulfill its obligations.
  • Investors can independently contact and trade with each other, and the system will automatically record all transactions and do all the related work. In the future, this might radically change the traditional financial market. Many financial institutions are already adjusting to the emerging conditions.

The Cons of Cryptocurrency

Nevertheless, despite the advantages, there are also weak and risky sides to the recently arrived currency.

  • It is impossible to return an already sent payment, so it is necessary to carefully check the recipient’s data or save the mnemonic code.
  • The exchange rate of the currencies is relatively unstable, which may have a risk for the investors.
  • To this day, most of the economically active population still does not know much about cryptocurrencies. Even among knowledgeable investors, only a small percentage use cryptocurrencies in operations. The lack of mass prevalence creates barriers to the implementation of many cryptocurrency-related projects and scares away investors, which deprives bases of funding.
  • The lack of control over transactions’ conduct is fraught with losing access to the wallet and all funds stored there.
  • There is always a threat of influence from the state and government bodies, up to banning. But no crypts have a control center and do not belong to anyone specific since it is just a network. The only measure that the state can apply is prohibiting conducting operations on its territory, which would not affect the virtual space.
  • Along with the increase in the number of mined coins, the process of mining becomes more complicated, which causes its profitability of it to fall.

The above-mentioned points must be considered by anyone interested in investing in cryptocurrencies. Despite how relevant and promising they may look, it is necessary to weigh all the pros and cons before deciding to build a business based on cryptocurrency.


Cryptocurrency is a new phenomenon in the modern economy that continues to evolve even more. It is believed that cryptocurrency’s behavior “can be predicted by two factors specific to its markets — momentum and investors’ attention” (Liu, 2018, p. 39). However, businesses should be careful with this currency as it is precarious and up and down. Investors have to constantly monitor the shifts in cryptocurrencies because “any predictable patterns could of course be used as a basis for trading strategies aimed at making abnormal profits in the cryptocurrency market” (Caporale et al., 2018, p. 1). Crypto money has particular features that allow it to gain momentum and popularity, allowing society to believe that the future is somewhere near.


Caporale, G. M., Gil-Alana, L., & Plastun, A. (2018). Persistence in the cryptocurrency market. Research in International Business and Finance, 46(C), 1–8. Web.

Kuo Chuen, D. L., Guo, L., & Wang, Y. (2017). Cryptocurrency: A new investment opportunity? The Journal of Alternative Investments, 20(3), 16–40. Web.

Lee, J. Y. (2019). A decentralized token economy: How blockchain and cryptocurrency can revolutionize business. Business Horizons, 62(6), 1–12. Web.

Liu, Y., & Tsyvinski, A. (2018). Risks and returns of cryptocurrency. National Bureau of Economic Research, 1–42. Web.

Sichinava, D. (2019). Cryptocurrency and prospects of its development. Ecoforum Journal, 8(2), 1–4.

Make a reference

Pick a citation style


PapersGeeks. (2022, July 1). Cryptocurrency and Related Controversy.

Work Cited

"Cryptocurrency and Related Controversy." PapersGeeks, 1 July 2022,

1. PapersGeeks. "Cryptocurrency and Related Controversy." July 1, 2022.


PapersGeeks. "Cryptocurrency and Related Controversy." July 1, 2022.


PapersGeeks. 2022. "Cryptocurrency and Related Controversy." July 1, 2022.


PapersGeeks. (2022) 'Cryptocurrency and Related Controversy'. 1 July.

Click to copy

This paper on Cryptocurrency and Related Controversy was created by a student just like you. You are allowed to use this work for academic purposes. If you wish to use a snippet from the sample in your paper, a proper citation is required.

Takedown Request

If you created this work and want to delete it from the PapersGeeks database, send a removal request.