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Cryptocurrencies in the Global Economic and Financial System. Initial Coin Offerings as an Innovative Tool of Crowdfunding and Promotion

Cryptocurrencies in the Global Economic and Financial System. Initial Coin Offerings as an Innovative Tool of Crowdfunding and Promotion

Wawrzyniec Michalczyk


The monograph’s subject matter centres on cryptocurrencies, an instrument which aspires to be a modern form of money, and on its place in the world economy, payments systems and financial markets. Special attention is paid to the principles of their usage in Initial Coin Offerings (ICOs), one of the most important areas of their application. The aim of the work is the identification of the economic essence of cryptocurrencies. This includes their functions in settlement systems and as financial instruments, an indication of their role in crowdfunding, as well as the characterisation of the mechanism of the ICO and its core rules. The ICO market is becoming more and more popular among investors and companies seeking to increase or raise capital. The analysis of the cases included in the book shows the importance of a well-prepared white paper, the primary document which contains all the information linked with the project.

Foreword 7

1. Cryptocurrencies and their economic essence 11

1.1. Introduction 11

1.2. The genesis of cryptocurrencies in brief 12

1.3. Virtual currencies and cryptocurrencies 13

1.4. Technological foundations of the bitcoin and other cryptocurrencies 15

1.5. Characteristics of the most important cryptocurrencies 18

1.6. Cryptocurrencies and the functions of international money 21

1.7. The main barriers to the development of cryptocurrencies as a form of money 25

1.7.1. The instability of exchange rates 25

1.7.2. Regulation underdevelopment 32

1.7.3. Security threats 36

1.7.4. Low level of dissemination 40

1.8. Current trends on the cryptocurrencies’ global market 47

1.9. Summary 49

References 50

2. Cryptocurrencies and the digitalisation of payment systems 55

2.1. Introduction 55

2.2. Innovations in cross-border payment services and infrastructure 56

2.3. DLT’s potential to enhance cross-border payment services and infrastructure60

2.4. Limitations and feasibility of DLT-based arrangements 63

2.5. Regulatory challenges posed by technological developments in payment services 66

2.6. The different characteristics of the digital form of central bank money 68

2.7. Summary 72

References 73

3. Cryptocurrencies on the financial markets 76

3.1. Introduction 76

3.2. Historical outline of the emergence of cryptocurrency exchanges 77

3.2.1. Exchanges of traditional financial instruments and cryptocurrency exchanges 77

3.2.2. Intensifying the process of creating cryptocurrency exchanges 80

3.2.3. Directions and trends of capital flow in the form of cryptocurrencies 82

3.3. The most important cryptocurrency exchanges in the world 83

3.3.1. The most important cryptocurrency exchanges – factors of capital inflow 83

3.3.2. Organization of the stock exchange compared to currency exchanges 86

3.3.3. Organization of trading 87

3.3.4. Exchange rates design, indices, cryptocurrencies pricing stability 88

3.3.5. Factors affecting exchange rates 90

3.3.6. Examples of exchanges and their characteristic features 91

3.3.7. Crises on currency exchanges and cryptocurrency exchanges 93

3.4. Cryptocurrencies as an investment. Investment/hedging strategies in enterprises using cryptocurrencies 96

3.5. Current technology trends on stock exchanges, legal regulations for the functioning of cryptocurrency exchanges 98

3.6. Summary 100

References 101

4. The principles of Initial Coin Offerings 103

4.1. Introduction 103

4.2. Initial Coin Offering – genesis and definitional considerations 104

4.3. Initial Coin Offering vs. information asymmetry and signalling theory 106

4.4. Characteristics of tokens and blockchain technology 111

4.5. Initial Coin Offering as a process and business model 115

4.6. Initial Coin Offerings in entrepreneurial finance 123

4.7. Regulatory frameworks of Initial Coin Offerings 127

4.8. Advantages and disadvantages of Initial Coin Offering 130

4.9. Initial Coin Offerings – best practices and recommendations 134

4.10. Summary 138

References 139

5. Initial Coin Offerings in practice 146

5.1. Introduction 146

5.2. White paper as a primary form of ICO’s promotion 147

5.3. Initial Coin Offering listings 152

5.4. Funds raised by Initial Coin Offerings (2014–2019) 157

5.5. Top Initial Coin Offerings – countries and projects 159

5.6. Projects with the biggest return of investment 164

5.7. Summary 168

References 170

Recapitulation 172

List of Figures 174

List of Tables 175

  • Tytuł: Cryptocurrencies in the Global Economic and Financial System. Initial Coin Offerings as an Innovative Tool of Crowdfunding and Promotion
  • Autor: Wawrzyniec Michalczyk
  • ISBN: 978-83-7695-844-6, 9788376958446
  • Data wydania: 2021-06-14
  • Format: Ebook
  • Identyfikator pozycji: e_22hk
  • Wydawca: Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu