This paper introduces the mechanism behind the popular cryptocurrency and shows how the data on the bitcoin blockchain can be extracted and used for analysis, by using accessible software. It will analyze the development of the blockchain as well as the currency and look at the volatility of the coin. This paper also explains how there are various additional blockchain applications beyond cryptocurrencies and shows how companies, government institutions and central banks are interacting and working to implement bitcoin technology.

Introduction

There have been rapid developments regarding information and communication technologies. The considerable growth in online users has initiated new digital concepts such as virtual worlds and produced a new business singularity to enable financial activities and transactions such as buying, selling, and trading cryptocurrency. Cryptocurrencies are used in different applications and networks such as games, virtual worlds, and platforms that allow payment. Over the past years, virtual currencies have spread across various systems and become highly popular.

On the other hand, Blockchain is the technology that enables the existence of cryptocurrency. The most well-known application for the Blockchain is the virtual currency Bitcoin, for which blockchain technology was invented. A cryptocurrency is essentially an exchange medium just like fiat currency, but contrastingly is digital and uses advanced encryption to regulate the creation of monetary units and authenticate and verify transfers. As a result, blockchain technology not only increases security and speeds up the exchange of information but also leads to higher cost-effectiveness and transparency.

The Blockchain has attracted the attention of organizations in various sectors, with banking becoming the most dynamic. In addition, blockchain implementation has led to new areas of work, thousands of new job positions, and new startups trying to facilitate and profit from cryptocurrencies. However, with Bitcoin initially being the only application on the Blockchain and further applications exponentially emerging, it stands to question what impact the development of the blockchain technology applications has, with a particular focus on the use of cryptocurrencies.

Due to the transparency of cryptocurrency transactions, a statistical database can be created. The development of blockchain technology is also a process that is tracked in detail. The emerging applications can be researched, from which trends can be analyzed. Empirical data can be gathered through the different findings, and correlations and links can be identified.