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The Relationship between Perceived Value and the Intention of
Using Bitcoin
INTRODUCTION
Some new alterations and phenomena are being formed recently among which crypto
currency and Bitcoin are the most characteristic. We can attribute them to the coincidence
of advancements in information and communication technology and reactionary attempts
toward criticizing the dominant financial system and the economic crisis. Attempts to
take the advantages of recent progresses in technology and science appear to be intended
to challenge the existing financial system, and design a novel financial system compatible
with today technologies. In fact, new advances in the field of Internet and global
Information and communication technology (ICT) have resulted in the formation of
electronic environment for the Economic activities [1]. In the context of the dominant
financial system, business on the Internet focuses on the electronic payments through
financial institutions as financial intermediaries [2].
Financial institutions use traditional money as the payment tool and we are only dealing
with the traditional financial system in electronic form in a virtual and new environment
which leads to the increase of transactions cost and problems such as Reversible
transactions, security problems, internet robberies, user’s interception and etc. Moreover,
applying different monetary units by financial entities in the dominant financial system
all over the world, causes the Internet-based shopping by users, despite having access to
markets of numerous countries, to be limited to markets that their monetary unit, is
covered by these institutions and users will not be able to use the current potentials in the
infinite Internet world. The important issue here is that some new opportunities are
provided owing to developments in information technology and communication, and may
result in emergence of new procedures dealing with crisis and problems. Nowadays
access to different resources in the world has become possible in the form of codes and
pictures in a virtual environment, generally known as data transfer, in which everything
and everyone is accessible at any time.
However, the use of traditional financial system in the context of virtual economics has
brought about certain limitations and problems that are inconsistent with the spirit Of
Ecommerce, so frustrate today users from taking the maximum advantages of science and
technology. Some users are changing their own consuming preferences toward the use of
crypto currency like Bitcoin and credit money of some sites such as Facebook and some
Internet games that are the result of advances in the era of information and
communications technology and it doesn’t have some of the limitations of traditional
money. It can be interpreted as way of evading traditional financial system and associated
tools which are confining, whereas today man is against any boundary, so has an
inclination to set himself free from limitations as he has been successful in
communications.
Following an increasing trend, this process could become a major challenge in the
financial system. The money which is out of the control of governments and can be added
to its amounts each day, the traditional financial system does not adapt itself with this
phenomenon. If through further studies and resolving the existing problems and adapting
the economic system with these models of money, the condition for Production and
deployment of virtual trade-based money and electronic commerce are provided, this can
provide more adaptability and alignment of Business environment with information and
communications technology. The present study deals mainly with influential factors on
choosing Bitcoin as a new production of today human in the worldwide financial system.
These factors can impact the perceived value and result in the purpose of usage. The aim
of this study is to identify the preferences of people in the use of Bitcoin. As the most
outstanding crypto currency. In particular, the important factors in choosing Bitcoin are
investigated. Identification of these factors can attracted the attention of economists and
related technical factors in order to produce the next generation’s money, perhaps
establishment of a novel and more effective financial system, which represents the
effective reasons for the users who tend to use Bitcoin. The emergence of such money
can have the same impact that social networks like Facebook, Whatsapp, Viberand etc.
have on increasing the productivity and reducing the communication cost of users
without the need for traditional telecommunications systems, in financial system,
business, and electronic commerce.
LITERATURE REVIEW
Money is regarded as a link joining financial and real sections of economy in such a way
that any alteration in it can influence both sections. Money plays a critical role in wide
range of financial challenges, so is significant in every financial system. Money is very
important in human life that some reminisce it as the most important human invention
and some have even said that Civilization has been simultaneous with the invention of
money. Money is anything as a medium of exchange, scale value, storage device, Savings
and credit transactions that is accepted by the public. In the other definition, money is the
medium of exchange and preservation of economic values [3]. Economists divide the
economic history into three periods based on the importance of the role of money: barter
economy period, Money economy period and credit economy era [4].
But in recent years due to rapid advances in the information and communication
technology and Internet issues, Current period can be called dummy economy. An
economy in which what plays the role of money is neither made of metal nor paper, but
virtual codes that are known as electronic money. Recently, the completely new and
different type of virtual money called Bitcoin comes into the financial system era that
economists do not agree about it, furthermore it has challenged the current financial
system and can be a potential threat if it achieves success. Until now, few studies have
been done about Bitcoin and crypto currency [5]. Krohn and Sorge [6] presents Bitcoins
as a description of the unique technology base that has completed the consumers,
merchants bases and sellers of ecosystem. In this paper, the features of Bitcoin and the
first steps taken in Europe and the United States of America done about this case, have
been mentioned.
In this article, Laver and colleagues have done a review about the origin and the process
of development of Bitcoin that has described it as a special character for industry
perception and a goal that can be a vision for the future of this technology. Daniel [7],
Bitcoins is analyzed as a new monetary system that completes the available transactions
list. Condor and colleagues, have compared the results of the distribution of assets as a
macroscopic feature with the real world data. Christopher [8] has analyzed the Bitcoins
based on the money laundering laws of the United States. He has investigated the crimes
related to the Bitcoin application and its use as a money laundering tool and he has
mentioned the problems that May arise in the implementation of the law. Moore [9] have
studied the risks that appear in the investments due to the Bitcoin transaction between
Bitcoin and hard money. In this paper, the path of forty Bitcoin exchange has been
studied. In Bitcoin system all the transactions have been recorded in the network in
chronological order are recorded and Shared among users that everyone can analyze the
events [10].
The study of money history showed that the people preferences (according to the
geographical and ideological culture and environment, etc.) influence on the genesis and
the process of change and evolution of all kind of money. So in the investigating of the
crypto currency and Bitcoin there can be a special attitude to the public opinion, because
it could have a significant impact on the future of money. In this research, the factors
influencing the choice of Bitcoin as a new phenomenon and the most prominent model of
crypto currency are investigated in order to identify the preferences of people in the use
of Bitcoin as a novel phenomenon in the financial system and the most outstanding model
of crypto currency in order to make the reasons for its spread identifiable. For this
purpose, experts and consumers opinions will be studied to determine which factors and
to what extent are important for consumers. This article can be seen in the field of
consumer behavior that is to analyze the preferences of consumers in the use of Bitcoin
and it is the first of kind conducted research in this area. Economists need to pay more
attention to this models of money and the financial systems accompanied with the
Information and communication technology advances adapt itself with it till benefiting
from the technology, Prevent any abuse of the existing gaps.
RESEARCH QUESTIONS
One the main question in this research is that: Is there any significant relationship
between the values perceived by the consumer from Bitcoin and the intention of using it?
This paper seeks to examine the factors in the selection of Bitcoin. For this purpose the
following hypotheses have been proposed
The Main Hypothesis
* The perceived value of Bitcoins by the consumer has a significant relationship with the
intention of using it.
And Other Hypotheses
* Individual factors have a significant relationship with the perceived value of Bitcoin by
the consumer.
* Structural factors have a significant relationship with the perceived value of Bitcoin by
the consumer.
* Innovative factors have a significant relationship with the perceived value of Bitcoin by
the consumer.
* Cultural factors have a significant relationship with the perceived value of Bitcoin by
the consumer.
* Environmental factors have a significant relationship with the perceived value of
Bitcoin by the consumer.
* Infrastructure factors have a significant relationship with perceived value of Bitcoin by
the consumer.
* Political factors have a significant relationship with perceived value of Bitcoin by the
consumer.
THEORETICAL FRAMEWORK
Bitcoin
Bitcoin Was proposed by Satoshi Nakamotoin 2008, and it was available to users as
online in January 2009 [11]. Bitcoin is a virtual and crypto currency based on a peer to
peer network, digital signatures and zero knowledge proof that allows the users to do
irreversible money transfer without any intermediate. Bitcoin allows very low cost
payments. Bitcoin network doesn’t have centralized controller system and it isn’t run by
any organization or government agency. The average time to approve any Bitcoin
transfer, is approximately ten minutes. The transfer of money from one point to another is
informed in all networks and all the points will be aware of it. Per Bitcoin is divided to
Ten to the power of eight and each part Called a Satoshi so 0.00000001 BTC = 1 Satoshi
[12]. Those who use Bitcoin Must have an electronic wallet. This wallet can be installed
on a person’s computer which is managed by Bitcoin software, or on a separate site.
Public-key cryptography is used in Bitcoin system. Bitcoin system is used in public-key
cryptography. Each wallet contains a number of public and private key pair that the
public keys are converted into the Bitcoin addresses and they are introduced to the payer
for receiving Bitcoin as an address.
Bitcoin and Financial System
The world financial system has undergone dramatic alterations in recent years. By
introduction of the new technologies, an e has been added to certain words introducing
new terms in financial system such as e-money, e-commerce, e-business, e-finance, etc.
The major portion of financial affairs has been translated from paper-based book keeping
into a virtual environment, and this fundamental change has brought about opportunities
for financial innovations which challenge the traditional financial system. These
innovative approaches attempt to provide an optimum system compatible with the virtual
era without typical time and location limitations of traditional financial system, although
some irregularities during initial phases are inevitable. Undoubtedly, Bitcoin can be
regarded as an attempt toward designing a new financial system with bound-free and
global currency instead of American Dollar. Lack of centralization, absence of
boundaries, respect for privacy, reduce in transactional costs, higher security,
convenience of use, and falling governments and financial entities into ruin are some
characteristic features of Bitcoin.
The real identity of Satushi Nakamoto has not been clearly understood so far, however
authors, who examined the reasons for use of Bitcoin by its supporters, have observed
some cases about Nakamoto’s purposes of encouraging people in using Bitcoin, mainly
focused on criticizing injustices in the current financial system and punishment of
government as the origin of these inequities. Exclusive right of printing money which
solely belong to government, supporting financial entities, inflation-causing activities of
these entities, some governmental policies, financial crisis, and decline in the value of
individuals’ savings due to inflation are some criticisms raised by Bitcoin advocators.
Although inflation cannot be stated as an independent variable, it correlates with several
independent variables in which the impacts of government and financial entities are
observable. Advocators of Bitcoin argue that annual inflation reduces the values of
people savings in such a way that they are being punished for saving; nevertheless they
are not the reason for the inflation. Particularly, it is more tangible in the economies with
unreasonably high rate of inflation. Banks extort toll from society for the finance they
provide. Philips [13] discussing the procedures adopted by banks and financial entities,
argues that lending money and money creation is equivalent to dispersion of counterfeit
money, and the only difference lies in the fact that to whom do the resultant benefits
belong in both cases.
Some researchers such as Khan, Smith, and Senhadji in a shared study entitled as
“Inflation and Financial Depth” found that a variation of 3 to 6% in annual inflation
depends on the slow change of financial depth. This study involved 168 different
countries including industrial and developing over the period from 1960 to 1999. The
recent economic crisis demonstrated that whenever an economic chaos occurs,
governments support financial entities through spending public treasury, so that burden of
the crisis is imposed on people who should compensate for others’ failures. The obvious
example of such situation was observed during the recent economic crisis in eastern Asia,
America, and also in the case of nuclear sanctions imposed on Iran. Decreases in real
values of people savings were clearly evident in those situations. In fact, governments’
avarice and fiscal mistakes account for economic crisis, unreasonable inflation, and any
kind of economic chaos, while the burden of costs is imposed on people who do saving;
no one blames governments. Founded their claims on presenting such cases, Bitcoin
supporters accuse governments of abusing public trust, since people savings are loans the
values of which should be kept. With a careful examination, it becomes evident that
Satoshi Nakamoto is aiming at the issue of trust in the current financial system. He
regards trust as a fundamental element for dominant financial system. By questioning the
public trust in current financial system and government, he tries to introduce a codingbased system, in which the principal foundation is coding rather than trust. It is the trust
in government as a supporter that persuades people into depositing their money in
financial institutes and distinguishing a paper money or coin from a piece of paper or
metal. Thus, he argues explicitly: “what is required is emergence of an electronic
payment system on the basis of coding rather than trust” [2]. Nakamoto attempts to
concentrate public concerns on similar problems, thereby questions the current financial
system and recommends using Bitcoin as a way of defeating the dominant financial
system.
Conceptual Model of Research
If we pay attention to the innovative aspects of Bitcoin in the society, any change and
innovation in the society consists of three successive stages of innovation, publishing and
consequence. Innovation is a process in which new ideas and methods are created or
developed during it. Publishing is a process that thoughts and new ideas are transmitted
to the members of the social system. Consequences are changes that as a result of the
acceptance or rejection of innovations have effects on the society. One of the most useful
methods for investigation social change is attention to the source. When the source of
change is analyzed within the social system, change is called as inherent and when the
source of new ideas is outside of the social system change is acquired. According to what
was said and regarding to the case that Bitcoin technology has been invented outside the
social system and in the case that the change is acquired, in the phase of publication and
acceptance within the society, it deals with obstacles and problems, that these obstacles
make the expansion of this type of technology difficult in the society.
Various models of acceptance and deployment of technologies have been proposed by
authors and experts in this field, including Ajzen and Fishbein, model of behavioral
intentions [14], Technology Acceptance Model of Davis [15], Modified Technology
Acceptance Model of Kluping and McKinney [16] and model [17]. As mentioned, it can
be noted that Bitcoin is a new technology in the context of financial system, for this
reason in investigating the factors affecting the choice of Bitcoin with patterning the
Models of technology acceptance and the publication of innovations, particularly the
Technology Acceptance Model od Davis and the innovative publishing model kwon and
Zmud, the Study of the opinions of pros and cons of Bitcoin, and ultimately, the
consultation of the experts and different professors of the Faculty of Economics and
Management of Allameh Tabatabai University in Tehran, the conceptual model of the
research was extracted.
In this study, after collecting twenty-three factors among the important factors in
choosing Bitcoin, since these factors are presented in the form of a model, classifying
them into seven groups and each group named Due to the teammate factors nature until
the results could be modeled and tested. According to the consumer behavior theory in
the economy, in this model the assumption is that the users act rationally in choosing the
kind of money, means that the consumer Selects money that is the most favorable for him
as well. In this study, the perceived value, the user mental assessment from the important
factors in choosing Bitcoin has been defined that makes the user detect using the money
that is profitable or harmful to him. If the user after the mental assessment of factors
influencing the choice of Bitcoin, concludes that using Bitcoin is profitable for him, then
the resultant of influencing factors in a person’s perceived value will be positive and the
probability of using Bitcoin will be increased, but if the user mental assessment of
influencing factors in the choice of Bitcoin is that using Bitcoin is detrimental to him this
means that perceived value will be negative and the probability of using Bitcoin will be
decreased (Figure 1 and Table 1).
THE RESEARCH METHODOLOGY
Considering that the aim of this study is to investigate the factors affecting the choice of
Bitcoin as an index of crypto and decentralized money, regarding the practical purpose
and How to …
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