ABSTRACT

CHAPTER ONE

INTRODUCTION

1. 1. Background of the Study

Cryptocurrencies continue to draw a lot of attention from investors, entrepreneurs, regulators and the general public. Much recent public discussions of cryptocurrencies have been triggered by the substantial changes in their prices, claims that the market for cryptocurrencies is a bubble without any fundamental value, and also concerns about evasion of regulatory and legal oversight. These concerns have led to calls for increased regulation or even a total ban. Further debates concern inter alia: the classification of cryptocurrencies as commodities, money or something else; the potential development of cryptocurrency derivatives and of credit contracts in cryptocurrency; the use of initial coin offerings (ICO) employing cryptocurrency technology to finance start-up initiatives; and the issue of digital currencies by central banks employing cryptocurrency technologies (Giancarlo et al., 2020).

Cryptocurrency was started in 2008 by pioneer Satoshi Nakamoto. The most famous cryptocurrency is Bitcoin and first to be used widely. However, there are many cryptocurrencies exist, and generate high demand. The examples of cryptocurrencies are Litecoin, Ripple, Ethereum, Dogecoin and others. Many investors mention that invest in cryptocurrencies can generate high return, but the main point is either it’s just a rumors or true. As suggested by Othman (2019) banks in GCC region are encouraged to either consider cryptocurrencies as an alternative investment asset for their portfolio investment diversification strategies or adopt the blockchain technology in their operation system to facilitate their customers with low transaction cost, high level of security and ease of use and real-time settlement. Therefore, statutory bodies of each country must take responsibility in monitoring agencies that involve in cryptocurrencies investment. This is because, cryptocurrencies are high risk investment. The value of Bitcoin cryptocurrency is increased sharply in 2017 that creates much attention from investors. According to Abu Bakar and Rosbi (2017) volatility of Bitcoin cryptocurrency is very high with the mean for Bitcoin return is 0.006, deviation is 0.04458 and standard error is 4.458 %. Thus, investment in cryptocurrency must be monitor and need more attention from statutory body of each country.

 As a result of the unprecedented pace of technological, money transfers and trades are implemented seriously on the internet in our contemporary world (Uyar and Kahraman, 2019). Thus, cryptocurrencies are getting high demand from investors. Cryptocurrency is a type of digital currency that using decentralized method for validating transaction. In the same time, the user of the Bitcoin is protected using hash algorithm. Cryptocurrency has no physical form of which no banknotes and coins exist, and which can only be transmitted via electronic means, typically allowing for instantaneous transactions and borderless transfer of ownership. It’s also exists only in a network and in which encryption techniques are used to regulate the generation of units of currency. Bitcoin are difference with traditional money transaction.

In fact, studies such as Abu Bakar, et al., (2017) have viewed the difference between cryptocurrency and traditional transaction. In definition, current fiat money is money in any form when in actual use or circulation as a medium of exchange, especially circulating banknotes and coins. This type of money is government issued currencies. Comparing to cryptocurrency, Bitcoin is digital currency in which encryption techniques are used to regulate the generation of units of currency. Cryptocurrency is a type of currency that is non-physical, of which no banknotes and coins exist. The transaction of Bitcoin only can be performed via electronic means, typically allowing for instantaneous transactions and borderless transfer of ownership.

Therefore, Kostika and Laopodis (2019) suggested that the use of cryptocurrencies as a means of exchanging payment is the best example of technological innovations in the field of finance resulting in the removal of intermediaries such as banks. Therefore, the aim of this study is to develop reliable cryptocurrency real market price analysis system.

Statement of the Problem

Cryptocurrency have gained vast visibility in recent times, despite so many resistances it has received globally from various nations, many investors in cryptocurrency have limited access to platforms where they can find market analysis of their various crypto coins, our proposed system will assuage this problem by developing a crypto currency market analysis system where crypto investors can find the price and analytics of their invested crypto coins.

1.3     Aim and Objectives of the Study  

The aim of this study is to develop a crypto market analysis system. The objectives of the study are as follows;

1. To design a crypto market analysis system using UML controls.
2. To Implement the system in (i) using PHP programming.
3. Deploy the system in (ii) on a web platform.
4. To perform functional test on the system deployed in (iii).

1.4     Significance of the Study

As cryptocurrency remains in force in the finance sector, the quest for real-time market analysis will increase. The proposed system would aid cryptocurrency investors to get real-time market analysis of their various investment coins for better investment decisions.

 1.5 Scope of the Study

This research work covers the development of a crypto market analysis system with special focus on Bitcoin and other major alternative coins, also known as altcoins.

1. 6. Definition of Terms

Analysis: detailed examination of the elements or structure of something.

Bitcoin: is a cryptocurrency invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto and started in 2009 when its implementation was released as open-source software. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Blockchain: is a public ledger that records bitcoin transactions. It is implemented as a chain of blocks, each block containing a hash of the previous block up to the genesis block of the chain. A network of communicating nodes running bitcoin software maintains the blockchain.

Cryptography: a key is a piece of information (a parameter) that determines the functional output of a cryptographic algorithm. For encryption algorithms, a key specifies the transformation of plaintext into ciphertext, and vice versa depending on the decryption algorithm. Keys also specify transformations in other cryptographic algorithms, such as digital signature schemes and message authentication codes.

Database: Generally, refers to a central place where data is stored and maintained. A database can also be seen as a repository where multiple files are located.

Decentralization or decentralization: is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.

Digital currency (digital money, electronic money or electronic currency) is a balance or a record stored in a distributed database on the Internet, in an electronic computer database, within digital files or within a stored-value card.

Encryption: is the process of encoding information. This process converts the original representation of the information, known as plaintext, into an alternative form known as cipher text. Ideally, only authorized parties can decipher a ciphertext back to plaintext and access the original information.

Graphic user interface (GUI): GUI refers to a well-structured user interface that is user friendly, a GUI is an application interface that gives guide on what the user is expected to do in application without getting confused.

Market: an area or arena in which commercial dealings are conducted.

Mining: is a record-keeping service done through the use of computer processing power. Miners keep the blockchain consistent, complete, and unalterable by repeatedly grouping newly broadcast transactions into a block, which is then broadcast to the network and verified by recipient nodes.

Software:   It is a program and other operating information use by a computer system.