Genesis of IT Economy: from Cryptocurrency to Digital Asset
Author`s Contribution:
- Kharkiv Regional Public Organization “Culture of Health” (KRPOCH), Ukraine
- Scientific Research Institute KRPOCH, Ukraine
- Simcord Information Services SIA, Latvia
- Simcord LLC. Technologies, Ukraine
Background and aim of study:
Globalisation of the world economy and
computarisation of financial systems form a new
branch – ІТ economy. There appear some alternative
currencies generated by computarisation of financial
systems. A remarkable example of this process is
cryptocurrencies which have currently taken up
financial markets, stock-markets and exchange
platforms. Nowadays a cryptocurrency is accepted by
many American, European and Asian companies as a
payment means. However the legal and regulatory
framework, in particular of Ukraine, has not been
arranged yet. There are no legal bases, instructions, or
clarifications as for the cryptocurrencies market. It is
resulted in currency risks among subjects in the sphere
of conducting accounts and payments. So, the problem
of using cryptocurrencies and ascertaining tendencies
of their development and functioning has appeared to
be extremely urgent.
The aim of the research is to study genesis of IT
economy, determine the current state and perspectives
of cryptocurrencies and digital assets functioning.
Research methods:
Methodology of the research is grounded on the system
approach to studying formation history and a
prognostic aspect of IT economy development. A
complex of theoretical research methods has been used:
deduction and induction, analysis and synthesis,
comparison, generalisation, systematisation and
interpretation of results.
Results:
The history of IT economy formation has been
researched, in particular the usage of cryptocurrencies.
The system of DigiCash (David Chaum) started using
cryptography in 1990 to provide confidentiality of
accounts and payments. Still, the term
“cryptocurrency” has been used only since 2009, when
Bitcoin peer-to-peer payment system appeared, due to
Satoshi Nakamoto. Hashing SHA-256 and the proofof-work system have been used.
For over ten years of the cryptocurrency market in
existence, more than two thousand of its types have
appeared. The following types of cryptocurrencies can
be outlined among the most widespread: Bitcoin,
Ethereum, XRP, Bitcoin Cash, Litecoin, NEO, Binance
Coin, Tether, Bitcoin SV, Stellar, TRON, Cardano,
Monero etc.
General market capitalisation of all types of
cryptocurrencies increases every year. It reached its
peak at $ 813.8 milliard on the date of 7.01.2018. After
that there were significant fluctuations and index
decrease to $ 102.0 milliard (14.12.2018). In 2019 the
index gradually increased to $ 274.1 milliard
(30.05.2019). It should be noted that the market
capitalisation of a cryptocurrency cannot be considered
an appropriate means of measuring and ranking a
currency value and importance. This index does not
determine the amount of capital invested into the
currency and the quality of a cryptocurrency.
Digital coins have been used as money: goods are sold
and services are provided with their help, they can be
saved as well. In countries with developed economy
bitcoins are considered to be: as possession and
exchange commodity in the USA, a payment means in
Japan, a virtual currency and a payment means in
European Union (with amendments in national laws).
Bitcoins are banned in such countries as Bangladesh,
Bolivia and Ecuador. Trading on the crypto-markets is
restricted in China.
The company Simcord is one of the leaders in the
sphere of IT economy. The empirical experience has
allowed developing conceptual and categorical
framework in the sphere of IT economy; forecasting
prospects of this branch development in direction form
a cryptocurrency to a digital asset which has
advantages over it; initiating regulatory and legal
support of a digital asset at the country level.
Conclusion:
Despite the local bans and restrictions, a
cryptocurrency has its own growth potential. However
a digital asset is more functional and reliable. It is
presented by an informational resource, displayed by a
code, can be circulated both in a distributed register
and other fields. It determines the right for usage,
levels mediators’ services, etc.
There are a lot of unsolved issues concerning
methodological, technological, legal and other aspects
of the IT economy sphere: what alternative
technologies will provide efficiency of
cryptocurrencies and digital assets functioning;
whether it is worth issuing electronic forms of national
currencies and/or cryptocurrencies and blockchains.
Keywords:
Copyright:
DOI and UDC:
DOI: 10.26697/ijes.2019.2.41; UDC: 330.34:339.977[330.47+336.742]
Information about the authors:
Pypenko Iryna Sergiivna – Doctor of Philosophy in
Economics, Associate Professor, Kharkiv Regional
Public Organization “Culture of Health”, Scientific
Research Institute KRPOCH, Kharkiv, Ukraine.
Kud Aleksandr Aleksandrovich – Founder and
Director of Simcord Information Services SIA, Riga,
Latvia; Founder and Director General of Simcord LLC.
Technologies, Kharkiv, Ukraine.