The Fundamentals of Cryptocurrencies

Abstract

Cryptocurrencies lately are something that has been gaining notoriety as a way of creating value. This paper was a study of the due perception of Cryptocurrencies and their taxonomy and regulation and a hypothesis case of its implementation. In that regard, this study tries to separate Cryptocurrencies and Blockchains. It also analyzed the barriers to the implementation of a Central Bank Digital Currency that is in parity with a fiat currency, even though, there isn’t a real scenario where this was applied yet. It also evaluated the gains of a portfolio of assets with Cryptocurrencies, where it is shown that it is possible to have a good portfolio with considerable returns. As for the portfolio of Cryptocurrencies, it has a return of 257,62% and a risk of 0,5424 with the following proportions, 9,7% on DOGE, 1,8% on XRP, 34% on ETH, and 54,5% on BTC, considering the criteria of maximization of the return per increment of risk. In final regards, a suggestion of a Cryptocurrency that can solve nowadays problems in different industries, such as security and entertainment, as well as trying to answer the “Fundamentals of Cryptocurrencies”.