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5ECONOMIC SCIENCES
TOP FEATURES OF CRYPTOCURRENCiES AND TYPES
Garayeva V.
Azerbaijan State University of Economics, MBA ORCID: 0000-0002-3623-8948 DOI: 10.5281/zenodo.7479702
ABSTRACT
Cryptocurrency is a digital payment system, created by non-banks, not subject to any official license, and is mainly mined using blockchain technology. The process of emission of cryptocurrency is called mining, and since cryptography is used, the meaning of "crypto" is mentioned at the beginning of the word currency. Cryptocurrency transactions do not require personal information. This means that users remain largely anonymous and transactions are largely confidential. However, every transaction is recorded, senders and receivers are known to the public. This way, all transactions are tracked, no transaction can be changed, manipulated or deleted afterwards. In this respect, cryptocurrencies are a bit more transparent than digital currencies. Cryptocurrencies and digital wallets, which are the most popular nowadays, are similar but have different functions. In this regard, the article we present is suitable for economically interested individuals or organizations.
Keywords: Cryptocurrency, transaction, digital, payment, currency.
This work was supported by the Science Development Foundation under the President of the Republic of Azerbaijan: Grant № ElF-GAT-6-2021-2(39)-13/12/5-M-12
If we look at the countries of the world, we will see that there have been serious financial crises recently. These crises dealt a crushing blow not only to developing countries, but also to the economy of developed countries. All these events do not pass without the influence of national currencies.
At such a time, digital currency (cryptocurrency), which is one of the means of electronic payment, was born. Cryptocurrency cannot be considered the currency of any country. Cryptocurrency, which is in its development phase, has advantages in comparison with its virtual disadvantages.
Cryptocurrency is a digital payment system, created by non-banks, not subject to any official license, and is mainly mined using blockchain technology. The process of issuing cryptocurrency is called mining, and since cryptography is used, the meaning of "crypto" is mentioned at the beginning of the word currency.[1] Each cryptocurrency unit is called -soin in English, and the emission of soins can be limited based on a predetermined algorithm. Each of the files contains encrypted information and is protected from any type of fraud.
Cryptocurrencies have many advantages over traditional currencies:
1. Cryptocurrency does not depend on the politics of any state
2. It does not depend on laws
3. It does not depend on the currency
4. It is not regulated by any state
5. It is not affected by inflation
6. Very low cost of emission - money printing, metal, paper, paint, etc. There is no need to use it
7. Splits and merges perfectly - no need to return the balance.
8. High compactness - the calculation of the amount is not related to the size and weight of the money.
9. Security - protection against theft, falsification, and denomination change is provided by cryptography and electronic systems.
10. Solid emission - it is impossible to control it from the outside.
11. Price change-currency does not depend on economic and political factors, but is formed on the basis of supply and demand.
The fact that cryptocurrency is a virtual currency, cannot be printed by any bank, cannot be frozen on your accounts and cannot be controlled by a special force, it is appreciated by economic experts.
The first and most important difference between digital money and crypto money is the central issue. Digital currencies are fiat, meaning they are not created by a legal authority like traditional currencies as we know them. Therefore, they have a centralized structure, the exchanges within the network are organized by a center such as a bank or government. That is, they are offered to the market and supported by central banks [2]. If done with digital money, the transactions are carried out with the consent of the mentioned institution. Cryptocurrencies are decentralized and regulations are implemented by the majority of the community. Also, cryptocurrency transactions require the approval of an entity. Therefore, the market determines its value. All transactions related to cryptocurrency are recorded using blockchain technology, which is considered a kind of ledger. We are not supported by a legal entity if we reward you in case of a possible technical problem.
Digital currencies are expected to experience less volatility in value because they are backed by central authorities. For example, central banks can review financial stability through monetary policy based on the value of other currencies. Compared to cryptocurrency, it is a more volatile currency because it operates in an underdeveloped market, is largely supported by official authorities, and is full of expectations.
Blockchain technology and digital wallets are closely related. The blockchain technology that owns crypto-currency systems includes storage, encryption, account operations, and more. is used for This allows you to perform all the actions from start to finish. Digital wallets include the technology that cryptocurren-cies are also actively used for.
There are also many benefits that digital wallets provide to individuals:
1. A digital wallet stores all of a consumer's payment information securely and compactly, largely eliminating the need to carry a physical wallet.
2. An e-wallet is also very profitable for companies that collect consumer data. This allows companies to analyze the buying habits of their customers and develop effective marketing strategies.
3. Digital wallets enable global online shopping and contribute to the global economy.
4. Digital wallets do not require a bank account with a physical firm or branch.
5. It allows you to perform cryptocurrency transactions safely and quickly.
6. In terms of security, digital wallets are at the fore today. With strong encryption, instead of physically carrying separate cards for multiple transactions, it is possible to store them all together in a virtual environment with a digital wallet.
7. When you lose your physical wallet, your entire account is at risk. Even if you lose the phone, it's not easy to access your data and account with built-in layers of encryption.
8. Using a digital wallet makes more sense when you consider the tedious process of canceling all your cards one by one when you lose it. Even if you lose your phone, the encryption systems that need to be broken to get to the digital wallet make this method much more secure.
9. Another convenience of an e-wallet is the convenience it offers. Instead of carrying your cards one by one and entering a password for each one, having all transactions done quickly from a single hub provides significant benefits to users.[3]
Apple Pay, Google Pay, Paypal, etc. are three of the most popular digital wallets.
The most important feature that distinguishes cryptocurrencies from other digital currencies is that their IT infrastructures are not centralized. Account records are stored on hundreds, thousands, millions of different small servers in a registry software built on cryp-tology technology. Each of these servers is operated by different anonymous organizations or individuals. Account records in the system cannot be changed, deleted or transferred to other accounts without permission. With these features, they provide the security requirements that a currency needs without an intermediary institution or person.
Bitcoin- Bitcoin was experimentally created in 2009 by Satoshi Nakamoto and any central bank, government agency, etc. is a kind of digital currency that has nothing to do with The symbol of Bitcoin, which is sold as an alternative to Dollars and Euros in global markets, is $ and its abbreviation is BTC.
Technologies such as public key encryption (asymmetric encryption), peer-to-peer networking, and proof of work are used to verify payments made in the Bitcoin system. Bitcoins are sent from the payment address to the recipient's address, signed in an encrypted form. Each transaction is announced to the network and takes place in the blockchain. Thus, added bitcoins cannot be used more than once. By using these technologies, Bitcoin provides a fast and highly reliable payment network that anyone can use.
Bitcoin is subject to certain protocols. Every transaction you make within these protocols is encrypted. At the same time, Bitcoin by nature has a solid transaction record memory. There are no security issues with the system, unless your wallet password is stolen or your computer is hacked due to user error or carelessness. It's no different than losing or having your wallet or credit card stolen. Due to Bitcoin, it is not possible to borrow the same money twice. Before the transaction, the system confirms that the money belongs to you and has not been sent to anyone before. For this reason, it is impossible to create and sell Bitcoins without supervision and fraudulently. [4]
One of the effects that causes inflation is the increase in the real money supply in circulation. The increase in the money supply in circulation increases inflation in direct proportion. But this system does not belong to Bitcoin. Because Bitcoin is a finite system. For this reason, the inflation risk of Bitcoin is very low.
The collapse of real currencies is caused by hyperinflation caused by governments. Since the Bitcoin system is not connected to any government, the risk of a crash is low.
According to the sale, in classic online transactions using payment systems such as credit card or PayPal; If the buyer demands a refund, it is necessary to use the services of 3rd parties. At this stage, security may be compromised and the event may become complex. On the other hand, Bitcoin does not have such a security problem because there is no such system as a claim back. You can even carry billions of dollars worth of bitcoins on a small memory card. It is impossible to do this with cash or any other system. [5]
Due to the high interest in and competition from Bitcoin, many cryptocurrencies have been created, and the origin and rates of the top 10 cryptocurrencies are shown in the chart below.
Chart 1. Rates of top 10 cryptocurrencies against the US dollar Source: https://coinmarketcap. com/ (25. 11. 2022)
If we look at the price of Bitcoin after its creation, we will see that the value of one dollar invested in 2010 has increased to 65 million dollars in 2021. Recent fluctuations in the price of bitcoin are shown in the graph below (graph2).
Chart 2. The exchange rate of Bitcoin against the US dollar Source: https://coinmarketcap. com/currencies/bitcoin/?period=7d (25. 11. 2022)
Banks provide international trade and convert cur- code consisting of long encrypted numbers and letters.
rencies. In Bitcoin, the money and the transaction itself The system sees and accepts that code as money. Each
are digital. Each transaction is cryptographically en- password in the system is unique and cannot be dupli-
crypted and transmitted. That is, when users transfer cated. That is, it is impossible to cut counterfeit money,
bitcoins to each other, both sender and receiver see a or it is impossible to cut money twice. The main issue
is that there is no financial institution behind bitcoin. That is, there is no central bank that prints it. The block-chain knows the amount of bitcoins in circulation. The number of bitcoins is limited. This prevents inflation, it can only deflate, meaning that money can only gain value over time. [6]
Apparently, since the first money was issued in these lands, the evolution of endless forms of payment has been accelerating. Business models updated by the digital economy require rewriting all the rules of the game related to the payment process. Moreover, these developments, together with other innovations expected in the future, will subject all parties to a stronger change. It is possible to predict that these innovations will have faster and more serious effects, especially with Open Banking, Central Bank Digital Currencies (CBDCs) and decentralized stable digital currencies. However, it is useful to recognize that our time as a country is running out as countries around the world move forward at a breathtaking pace, especially in digital currencies.[7]
References
1. Mammadov Z.F., (2012): "International currency-credit relations and the monetary-credit system of foreign countries", Baku, "Nasir" publishing house, 423 pages.
2. Saleh Mammadov, "Digital transition and the need to accelerate scientific and technological development" Baku (2021), 379 pages
3. Saleh Mammadov, "Digital manat (CBDC) and cashless money circulation". ADAU, lecture text, 2021 Ganja
4. Ecem Turgut, Okyay Ucan "Econometric time series analysis of cryptocurrency and blockchain technology". Istanbul: Hyperyayin, 2021 pages. 229
5. Michael J. Sasey Paul Vigne Age of Cryptocur-rency: "Bitcoin and Digital Currency Challenge the Global Economic System". Ice summers - 2020 page 480
6. Khanboubi and Boulmakoul, "Digital Transformation Metamodel in Banking" - article. Researchgate 2019, p.1-7
7. Shaw, L. (2016) "The Meanings of New Money: Social Constructions of Value in the Rise of Digital Currencies", Doctoral dissertation, University of Washington, vol 16, No. 4, p. 45
8. https://www.coinbase.com/tr/learn/crypto-ba-sics/what-is-cryptocurrency
PRINCIPLES OF BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY IN BUSINESS
DEVELOPMENT
Hasanova M., Rzayeva U., Ismayilova G.
Azerbaijan State Agrarian University The department of business administration DOI: 10.5281/zenodo.7479708
ABSTRACT
In connection with the development of business relations in modern times, taking an objective approach to the events occurring in the work environment and observing the principles of human rights protection is considered one of the most important factors in the direction of business development. So, business subjects should have a pragmatic, modern economic thinking in their activities, but also develop the ethics of business relations and protect the ethical values of business management. It would be a naive approach to imagine effective business management in a globalized world without personnel with high ethical standards. Currently, there are many problems in the field of business management in Azerbaijan. One of them is that the application of elements of business ethics and corporate social responsibility in the work environment are not at a desired level. It is for this reason that in recent years, expanding reforms in the direction of increasing corporate social responsibility and further strengthening the fight against corruption for the development of business and the formation of a healthy competitive environment in Azerbaijan has been considered as one of the priority issues. The main goal here is to improve the competitive environment in business, to create conditions for the application of business ethics and social responsibility principles in the work process based on a working mechanism. All these mentioned issues characterize how important it is to follow the principles of ethical behavior and corporate social responsibility in the business environment in terms of business development.
Keywords: business ethics, social responsibility, competition, human resources, education, management.
Business relations are an integral part of modern society today. Business relations are currently developing in the economic and political spheres of society, and at the same time are regulated according to legal norms. All these mentioned are carried out in accordance with the Corporate governance code. In order to ensure long-term success in the market, expectations of honesty,
fairness, respect for competitors, and expectations of high ethical standards are important conditions. It is also considered as the concept of "Business ethics".
Some experts consider the phrase "business ethics" to be one of the most famous oxymoron phrases in the world. It should be noted that oxymorons are expressions formed by opposite words. That is, although
