This paper aims to investigate how digital currencies have caused a drastic evolution, especially in the payment sector. It aims to further studies on how bitcoin is the most conspicuous digital currency and is perceived as disruptive innovation with the potential of replacing fiat currency. The study was employed through a case study to examine whether bitcoins are disruptive innovation or a threat to the Central Banks and Fiat money. The study adopted a mixed approach research design by using qualitative and quantitative research approaches. The literature reviewed journals were published in credible journals in various databases. The Time series analysis approach was used to forecast the future prices of bitcoins.
The study used an in-sample and out-of-sample time series forecasting using the Gretl software. The ARIMA (1,2,1) Model was found to be a good fit with 85% accuracy (the Mean Absolute Percentage Error-MAPE was 15%) to forecast the future of bitcoin prices. The cryptocurrency market offers significant investment opportunities but also entails higher risks as compared to other asset classes.
Contrary to popular belief, most cryptocurrencies aren’t anonymous; they are pseudonymous. If a person’s identity is linked to their wallet address via a central touch point, such as a cryptocurrency exchange or an email, that wallet is traceable to the individual. Mining involves running software on computer servers to solve cryptographic algorithms. This process validates transactions and maintains a shared record of transactions across the blockchain network. People who participate, the “miners” are automatically rewarded in cryptocurrency.
On the other hand, cryptocurrencies, with their revolutionary approaches, push boundaries, leading to debates and new regulatory challenges. Digital currencies typically operate within the boundaries of existing regulatory frameworks since they often mirror traditional financial models. Digital currency is a broad term that encompasses all forms of money in digital format. It simplifies online transactions by eliminating the need for physical cash and can be either centralized (like e-money issued by banks) or decentralized.
This leads to significant energy consumption and, consequently, environmental concerns, especially when non-renewable energy sources are used. As these innovations gain momentum, they present opportunities for faster global remittances, challenge conventional banking paradigms, and promise broader financial inclusion. This decentralization offers heightened security, transparency, and democratized control of transactions.
We conclude that Bitcoin and Gold feature fundamentally different properties as assets and linkages to equity markets. As of now, Bitcoin does not reflect any distinctive properties of Gold other than asymmetric response in variance. Purpose-Cryptocurrency in the digital economy plays a vital role and is growing exponentially. Moreover, the researchers conducted a systematic documentary review and used content analysis to analyse the data. The literature was reviewed systematically to describe cryptocurrency in the digital economy.
Bitcoin is most experienced due to the people’s anonymity and openness in the device. Daily styles in the bitcoin exchange have acquired popularity amongst fans, investors, individuals, and many more. Bitcoin cost data show preferable residential properties where some classical opportunity collection prophecy approaches use the actions, making unsatisfactory predictions without a probabilistic interpretation. This paper conducts an extensive research study on the development of Bitcoin and an organized evaluation of it. It deeply provides the information for the difference between the digital and virtual currencies, decentralized bitcoin network and compares it with others. Many investors include cryptocurrencies as potential investment tools in their portfolios.
