INTRODUCTION

21st century is the century of the development of high technologies and phenomenon that
came with the era of the Internet and all the digital world. It created completely new world of
the “other side” that brought new rules and changed the old rules in the different fields.
Advertising, marketing activities, finances, journalism, and computer technologies etc. – all that
areas became effected, modified and transformed with the breakthrough of the Internet,
networking, and globalization. For today’s business is not a big deal to reach the customer in
the other corner of the planet. There is no need for entrepreneur to focus on the internal
market. New technologies and Internet works like the gate away into the world. One of the
fields in our world which, in my opinion, changes and is meant to be changed is finances and all
the things that are connected to money, financing and banking. One of the biggest change and
kind of explosion in this area happened in 2009 when appeared first money digital asset –
Bitcoin. Satoshi Nakamoto created first Bitcoin wallet, organized and launched the technology.
The creator of Bitcoin is still incognito and no one knows who is he. There is even the theory
that Satoshi Nakamoto is actually a group of people who created the Blockchain technology and
Bitcoin. Since 2011 a lot of different cryptocurrencies started to appear. Today we have bunch
of them but the most popular and powerful cryptocurrencies are: Bitcoin, Ether, Dash and XEM.
We have a lot of companies in different parts of the world that offer crypto services and
products. You can find the possibility to buy, sell, send, and get different cryptocurrencies and
tokens. Companies offer digital wallets to store the currency, platforms to exchange crypto to
another crypto or traditional currencies. Possibility to withdraw the money. Also, the possibility
for traditional businesses to implement bitcoin payments threw integrational tools. In this work
I would like to explore, find out and propose the best way and vector of development for
cryptocurrency company in terms of marketing. How with the help of marketing it is possible to
create trust of today's society to the cryptocurrency. What kind of services and products it is
reasonable to offer today for customers who are already used to use cryptocurrency and for
potential clients who can be interested in the cryptocurrency world. What kind of problems
companies can solve and to what questions should we answer, as it is pretty obvious that
despite the fact that Bitcoin is already 10 years on the market, however, there are still more
questions than the answers about this “dark horse” in the world of finances. Also, I think we
can agree that in any 7 company that decides to support services and provide solutions for
cryptocurrencies - marketing is one of the key pillars of the future success, as currently it is all
about communication and explanation of the technology.

The research problem: what solutions cryptocurrency company can apply, in order to
strengthen the trust of a target audience to the cryptocurrency coins and as result to
cryptocurrency related products and services?
The aim of the paper is to develop conceptual framework and recommendations for a
cryptocurrency company in order to gain trust. According to the aim, the goals were set: 1. to
analyze theoretical background about cryptocurrency and trust, precisely:

a. To overview the history of different cryptocurrencies; b.

b. To research the current situation of cryptocurrency market; c
c. To identify the main and most reasonable definitions of trust in online world and e –
commerce;
2. To carry out the survey of cryptocurrency non – users, which will highlight the core reasons
of the lack of trust to a cryptocurrency;
3. To conduct interviews with the experts in the field, for better understanding what is the
possible future for cryptocurrency development;
4. To provide recommendations for the companies which are planning to offer or already offer
crypto services and products.
Creating this work, it was used such a method of research as theoretical analysis, which is a
method for collecting data about the phenomenon or the process under investigation
contained in the documents. Here under the document is understood everything written or
spoken, everything that became communication. For a content analysis were used books,
articles, videos, official documents. Also, collecting of primary data through the survey and
several interviews. Collected data was analyzed and used as the fundamental material to
highlight the main reasons of lack of trust from non – user side. Also, collected data was used to
detect key strengths of cryptocurrency from perspective of industry experts, advanced users
and cryptocurrency fans, as this target audience is the one which drives the industry, develops
and improves blockchain and cryptocurrency. Based on the results of investigations offer the
solutions and recommendations from marketing and communication perspectives, which will
improve the level of trust among target audience to cryptocurrency product services.

THEORETICAL OVERVIEW OF A TRUST AND CRYPTOCURRENCY PHENOMENONS

Theoretical overview of cryptocurrency In order to understand better the topic and what is the
cryptocurrency I would like to overview few articles about what is cryptocurrency, what kind of
cryptocurrency we have for today and how do this technology influences the world and
especially the world of finances. A cryptocurrency (or crypto currency) is a digital asset
designed to work as a medium of exchange using cryptography to secure the transactions and
to control the creation of additional units of the currency (Okhuese, 2017, pp. 1- 2). In January
2009 appeared new technology that extremely changed the world of finances and Fin Tech. At
that moment Satoshi Nakamoto created first Bitcoin wallet, organized and launched the
technology. The creator of Bitcoin is still incognito and no one knows who he is. There is even
the theory that Satoshi Nakamoto is actually a group of people who created the blockchain
technology and Bitcoin. Since 2011 a lot of different cryptocurrencies started to appear. Today
we have bunch of them but the most popular and powerful cryptocurrencies are: Bitcoin, Ether,
Dash and XEM.
From the moment of launching till 2018 cryptocurrencies have changed the world and impacted
people’s lives. Why is it so interesting and magnetic? What do the technology of blockchain and
cryptocurrencies have brought revolutionary to this world? To understand why Bitcoin changes
the world of money and finances let’s see some points of cryptocurrencies:
How Bitcoin rate is made? Several factors can influence the price:
 The supply of bitcoin and market demand for it

 The number of competing cryptocurrencies

 The exchanges it is traded on

 Regulations governing its sale

 Its internal governance.

The total supply of Bitcoin should not reach 21 million, meaning that once this number is
reached, mining activities will no longer create new bitcoin (Radclife, 2018, p. 3). The supply of
9 bitcoin reached 16.8 million in late January 2017, representing 80% of the supply of bitcoin
that will ultimately be made available. Also, rate depends on how many new cryptocurrencies
exist in the trade. For example, with appearance of a new altcoin (alternative to Bitcoin)
Ethereum currency dropped the price of Bitcoin as Ethereum blockchain and its native currency
ether introduced crypto-hunters more interesting and convenient service (Okhuese, 2017).
While the Bitcoin blockchain can simply be pictured as a database of accounts (or wallets) with
an amount of currency stored in each, the Ethereum network blockchain is a more
sophisticated construction, capable of storing computer code – applications. The currency –
Ether – represents the idea that Ether will be bought and sold by businesses, governments or
individuals to allow them to tap into the vast, distributed resources of the Ethereum network to
run their own apps. The first of these applications are known as “smart contracts”. This is a way
of automating contracts and agreements so they will execute when consensus says that
conditions have been filled. Though simple, their uses are potentially widespread – such as
enabling payment systems which will release funds on completion of work, or authorizing the
transfer of ownership of good when payment has been made (Marr, 2018). The Ethereum
network also allows the creation of other cryptocurrencies, or tokens, using the same protocol
as Ether but distributed on different blockchains.
How blockchain technology works - see the figure 1: 10 Figure 1.

The blockchain system Source: Zheng & Dai (2017).

If sender wants the transaction to be verified by miners he / she has to pay transaction “gas”.
This “gas” is a fee for transaction which is the bounty and motivation to process the transaction
(Zheng & Dai, 2017). There was a myth that bitcoin transactions are free of charge. At the
beginning when there were few of them and miners were working on their own interest it was
like that. Now the number of daily cryptocurrency transactions is huge so you as a sender have
to attract miner to your transaction with fee that will go to miner as bounty for transaction’s
confirmation and processing. (Zheng & Dai, 2017). But why then it is told that cryptocurrency
transactions are free and instant? It is truth only if transaction is made between users who have
virtual wallets at the same cryptocurrency bank, cryptocurrency broker company. That is the
point where we got to the companies that offers financial solutions for cryptocurrency owners.
All in one solution Fintech company provides exchange platform, cryptocurrency wallets, P2P
(peer-to-peer) transactions (it means free of charge and fast transactions), trading platforms.
So, this was short review of main cryptocurrency features that helped better understand world
of cryptos and how they can influence our life and what benefits it can give.

Bitcoin – explanations of the technology and features

 Cryptocurrency is the encrypted p2p (peer-to-peer) network which makes the digital barter
between participants of the digital asset transaction faster and easier. The history of the
cryptocurrency world started with the introduction of brand new technology “Blockchain” and
It’s digital asset, well known in today's world “Bitcoin”. Sometimes people misunderstand two
definition as they have the same name but totally different meaning. Let my shortly go through
them to make it clear: Bitcoin with the capital letter - is a decentralized P2P network which
facilitates cryptocurrency transactions between users without a third party. The Bitcoin
protocol is public, that means published and developers can review the code as well as easily
adapt an open source software and modify it to their own needs. bitcoin with the small letter -
it is the coin that exist on the Bitcoin network /blockchain and is perceived as the currency for
the Internet. As Euro or USD are currencies for some of European Union countries and the
United States, the same bitcoin was initially constructed and developed as the currency for the
Internet world. The network gives the possibility to transfer money 11 in big amounts and to
any of the countries of the world. All user needs for the transaction is Internet and a Bitcoin
wallet to store the currency or make the transactions. Bitcoin and any other cryptocurrency and
the blockchain are anonymous technologies, which means that it is possible to review in the
blockchain when and where an amount of bitcoins was sent but there is no information about a
sender and a receiver. There are only addresses of the participants of the digital crypto barter.
However, the address has no connection with any of the official documents or ID of the sender.
That is one of the reasons why the government in the most of the countries are against this
technology. Unfortunately, the cryptocurrency community has to admit, that thanks to
anonymous transactions which have no limits of the amount of bitcoins which can be sent,
Bitcoin blockchain facilitates the illegal activities. Companies that support cryptocurrency
services according to the European Parliament AML directives (there are five of them in total)
have to implement and successfully run the AML and KYC policies. This rises the security
significantly as users’ activity is tracked. If users demands the operations with the crypto or
traditional currencies, they have to go through the verification process. During this process
verification department of a company checks a documents and a background of a user. The
step was taken in order to make cryptocurrency world more regulated and become more
civilized. The AML (anti money laundering) directives and KYC (know your customer) method
are big steps to the security level strengthening. It is believed, that those steps rise the level of
the trust of the society in large to the cryptocurrency. Users can rely on the company and on
the services and products that it proposes. One of the theory about cryptocurrency is based on
the Frederick’s Hayek book “Denationalization of the money”, which was written in 1976, that
mainly drops the idea that money as any other type of the commodity should not be under the
monopoly but has to be under competitive regime (Hayek, 1976). He brought the idea of multi-
currency country, where people can choose the most convenient money or payment method
but not be framed with one option. To reach this goal bitcoin and other cryptocurrency have
yet to go a long way, but it is possible to implement into the reality. Currently, cryptocurrency
basically is used as the investment tool. Most of the users are trying to gain the profit on the
trading and bitcoin price variability. Bitcoin price is constantly changing and as I mentioned
before, there is the bunch of reasons why this is happening. For now, no one actually can
explain how the rate is done and what are the main factors that influence the price.

Ethereum cryptocurrency – history of establishment and main differences from Bitcoin

Ethereum is an open-source public service that is working on blockchain technology with usage
of smart contract and cryptocurrency trading. It appeared in 2013 and was created by Russian
Canadian - Vitalic Buterin. Home currency of Ethereum blockchain is Ether. Ethereum is one of
the most successful ICO projects. It gained trust and the interest of cryptocurrency community
and became second most traded and popular digital asset after Bitcoin. 1.3.1. Short history of
Ethereum cryptocurrency Initially, Ethereum blockchain was created not for the end user but
for the skilled IT specialists (miners), who were interested in the development of the platform.
This period was named “Frontier” or as other ethereum community name it - “Wild west”. In
2015 Ethereum platform entered another period of its existence, which got the name
“Homestead”. The name gives the hint, that the technology had gone through major
modifications and went live. In another words, it was presented to the end esur and trader
started using technology for acquisition of the ETH token (now it is the coin) and cryptocurrency
transactions. Also, the wallet for keeping the coins was invented. Ethereum blockchain was
recognised as save, time and money saving technology which is more efficient than Bitcoin
blockchain. Another major steps that Ethereum is going through now is system-wide update
called “Metropolis” which was too complicated to implement it at one, so it was splitted into
two stages: “Byzantium” and “Constantinople” (the last one happened not so long time ago). All
the system updates seek to innovate technology, make it useful, efficient, less pricey and time
saving. One of the key pillars of Ethereum success is the constant improvements which are
beneficial for end user, not miners, who are significant element of the ecosystem. 1.3.2. What is
the difference between Ethereum and Bitcoin? - Bitcoin trades in cryptocurrencies while
Ethereum proposes cryptocurrency trade (Ether), smart contracts (Smart contracts allow the
performance of credible transactions without third parties) and EVM (Ethereum Virtual
Machine). What does it mean? Ethereum gives its users wider range of operations and options.
On Ethereum blockchain user can, for example, start its own project. - Block time for Ethereum
is less than for Bitcoin. It takes 10 min for Bitcoin to create a block and for Ethereum it is only
12 sec. It makes more block confirmations and allows Ether miners create more blocks and earn
more ethers. 13 - Statistics says that till 2021 only half of Ethereum cryptocurrency will be
mined (as I mentioned in Introduction that amount of each cryptocurrency is limited) because
the supply is more than 90 million tokens and Bitcoins are almost mined (80% of Bitcoins is
already mined). - Bitcoin miners that verify transaction gets a reward in Bitcoins. So the first
miner who solves each new block (block can contain few transactions) gets all reward.
Ethereum allows miners to take as a reward transactional fee. - Ethereum uses “Proof-of-Stake”
system while Bitcoin uses “Proof-of-Work” system. What is the difference between these two
processes: to make it simple these are two approaches that miners use to approve transaction
and create block. PoW requires a lot of electricity. One Bitcoin transaction required the same
amount of electricity as powering American households for one day. And this price have to be
paid in fiat currency. PoS method is cheaper and ‘greener’. - Different from Bitcoin Ethereum
allows two types of transactions: permissioned and permissionless (Buterin, 2017). To sum up
shortly, Ethereum was successful ICO project that developed and became blockchain with
home currency and different opportunities for both: miners and traders of cryptocurrency.
Today Ethereum is one of the most popular altcoin and as a result second crypto coin and
blockchain technology after Bitcoin. It used Bitcoin ideas but developed them and improved
them.
Stablecoin – a new generation cryptocurrency which changed the crypot - market
Stablecoin is an asset that offers price stability, which makes it suitable for certain functions,
such as a: medium of exchange, unit of account, and a store of value. These three
characteristics are important for any currency to be used in any meaningful manner. As today
cryptocurrencies are best known for its volatility, it was decided to create the digital asset that
will work as the compromise and the bridge between crypto and traditional currencies. There is
a bunch of stablecoins, the best known and most traded coin is Tether coin (USDT). How the
stability of the price is created. Stablecoin is the type of the currency that is backed up with
traditional currency or any other physical stable, valuable asset, for example, precious metals.
This is the most acceptable model of stablecoin. There are two more: first one proposes
stablecoin backed up with the cryptocurrency like Bitcoin or Ethereum, so the price of the
stablecoin will depend on cryptocurrency, what, in my opinion, makes no rational sense. The
last model 14 proposes stablecoin which is not actually backed up with anything other than the
expectation that these coins will retain a certain value over a period of time. This type of model
rises even more questions. Lets focus on the stablecoin which is created with the most efficient
and promising model which is called IOU Issuance Model (stablecoins which are backed up with
traditional currency or any other physical asset). Let’s get into the details. IOU Issuance Model
involves a company holding assets in a bank account and they issue X stablecoin supply which is
equal or less than the total amount of a tangible asset on the account. To make it more clear let
me present the figure 2 and the explanation below:
Figure 2. Supply of Tether coin Source: SpectroCoin blog (2019).
As we can see on figure 2 there is presence of the third party that is regulating the supply of the
issued stablecoin, in this case Tether coin. The company controls the total amount of the tokens
according to the amount of traditional currency reserved on the account. Why this type of the
cryptocurrency like Tether is beneficial for the cryptocurrency user? The rate of the stablecoin
does not change. If it is backed up with USD with the ratio 1:1, the coin will keep the same
price. Stablecoins are available on the exchanges in the trading pair X stablecoin/Bitcoin. It
means, that, for example, the trader has some amount of the Bitcoins on his account. He knows
that in a few days the value of Bitcoin will drop. In order not to lose the money trader can
exchange Bitcoin (BTC) on to the stablecoin. Thus, trader saves the money and can exchange
cryptocurrency back, when Bitcoin will rise in value. 15 As we can assume, stablecoin is the first
step of the cryptocurrency to become more usable and efficient payment option for everyday
use. However, some users are not satisfied with the fact that stablecoin functioning includes
third parties, so it breaks fundamental cryptocurrency essence of - non regulated technology
that eliminated third parties from the process. On the other hand, the companies provide save
cryptocurrency and promise that they do not control the flow of the transferred money and the
whole system is completely transparent. The future will show of the stablecoin will reach the
main goal - to become the mean of payment.
Colored coins – jettons which represent valuable information
Bitcoin is still popular bat it has a lot of features that can be judged. As it was mentioned earlier
bitcoin has it’s unstable price, which is changing almost every day. There is no accurate
explanation why price i changing and what makes the biggest influence on it. In chapter I there
is mentioned the bunch of reasons why bitcoin and other cryptocurrencies are unstable but,
unfortunately no one of blockchain developers or crypto-community members can significantly
make changes on the price issue. Also, Bitcoin network suffers constant attacks from
government on how unsafe is the technology. The biggest advantage of Bitcoin blockchain -
anonymous transactions of big amount of digital asset can be transferred fast to the any corner
of the world - has become the topic of speculations and shady market. Cryptocurrency
community cannot avoid the fact that blockchain has become the comfort zone for shady
transactions, money laundering and terrorism financing. There are policies (regulation of
European Parliament AML 5) which demand from companies and any cryptocurrency
organization to stick to the AML and KYC requirements. Unfortunately, despite all the
regulation that are in blockchain area there is still no possibility to track the flow of money by
third parties and control the particular flow. For government of any country in the world this is
a strong argument which can lead to the restriction of cryptocurrencies or any type of ICO in
the country. For example, China has restricted ICO in the country. Citizens cannot hold the ICO
or participate in foreign ICO. One more reason why bitcoin is weak is that it can be used only as
bank notes. However, the solution in this case was introduced - colored coins. Colored coins can
stand for much deeper values. Coloring the coin means that some valuable information is
attached to it is not a bank note but a jetton which stands for a peace of valuable papers or
information of equal importance. As a result, colored coins can be used on a blockchain as
shares of the company, gold bullions or documents for possession of the house. 16 Now, if you
want to transfer gold, company shares, or documents to a house, you will need to implement a
complex process. It includes notaries, registration in state archives and paper documents. All
this in order to make sure that the transfer of ownership of a particular object has exactly taken
place. Bitcoin's cryptographic technology is built in a different way. You know for sure that a
number of bitcoins left one address and came to another. You can be sure that this will happen
in just a few minutes. If bitcoins can represent other assets, then the rights to these assets can
be sent quickly and easily, to anyone, from anywhere in the world. One of the networks NEM
Mosaic implemented this idea and now new issued tokens which will appear on a NEM Mosaic
list can be a colored coins that brings valuable information for its owner and makes it easier to
send some big amount of money or securities fast and easy. This can change Central Bank
attitude to cryptocurrency and take it more serious to consideration. Bitcoin, for example, will
not be just currency that is not even appreciated as currency. The source code of
cryptocurrency will change and it will have bigger weight and impact for Central Banks. The
main point that annoys banks all over the world (we are talking about big world banks) is that
they cannot control cryptocurrency, its flows and people who made the transaction because it
is anonymous. It is a key strength of cryptocurrency that makes users understand that third
party for transaction is not needed. Moreover, standard Bank cannot implement blockchain
technology into the existing system. It will require a lot of investments, core changes and
creation of all system from zero. Today’s cryptocurrency Banks built up blockchain technology
from the very beginning of the project / start up. Their idea, purposes and goals rotate around
the idea of becoming Bank in the era of blockchain technology, while traditional Banks will have
to change all: idea, concept and technology to implement cryptocurrency bank.
Monero vs. Bitcoin: Privacy
It's worth exploring Bitcoin and Monero’s privacy features in more detail.
Stealth Addresses
One of the features that gives Monero its privacy is the stealth address.
Stealth addresses are random one-time addresses that can't be linked to a previously published
or shared standard address. In other words, sending multiple Monero transactions to the same
standard Monero address will appear on the blockchain as going to different addresses.
Although you can retrieve any Monero sent to your stealth address, these funds cannot be
linked to you in any way whatsoever. Only you and the sender can know where the Monero
was actually sent.

Ring Confidential Transactions (RingCT)

Another Monero feature that gives it its strong privacy is Ring Confidential Transactions
(RingCT), which is a combination of two privacy innovations: ring signatures and confidential
transactions.
With regular cryptographic signatures, such as in the case of Bitcoin, you sign off on
transactions with your Bitcoin address' private key, which proves your ownership of the Bitcoin
that's about to be spent in a transaction. Ring signatures also prove ownership of funds but add
another layer of complexity.
Completely random funds that act as "decoys" are mixed into the same transaction, and it's not
revealed as to which funds have been signed off on. Thus, it's extremely difficult, if not
impossible, to know which funds were actually signed off on and spent. 10 "decoys" are added
to each transaction, which makes Monero extremely hard to track.
Confidential transactions is what lets Monero transaction amounts stay hidden. Using a
cryptographic algorithm called a Pedersen Commitment, anyone can know that Monero
transactions equal out on the sending and receiving ends of the transaction, which means that
no Monero was double-spent or created out of nowhere. However, while a Pedersen
Commitment allows for this check, it does not allow anyone to know how much Monero
actually changed hands except for the sender and receiver in the transaction.

Kovri
Kovri is another Monero privacy feature that is under active development.

Kovri would use technology similar to the Tor Browser, a browser that hides a user's location
and Internet usage from prying eyes:
“In an onion network, messages are encapsulated in layers of encryption, analogous to layers of
an onion. The encrypted data is transmitted through a series of network nodes called onion
routers, each of which “peels” away a single layer, uncovering the data’s next destination.
When the final layer is decrypted, the message arrives at its destination. The sender remains
anonymous because each intermediary knows only the location of the immediately preceding
and following nodes.” (Source: Wikipedia's entry for Onion routing)
In a nutshell, the same way the Tor Browser uses onion routing to conceal Internet users'
locations and usage habits, Kovri would use similar technology to conceal Monero users'
locations and the fact that you even use Monero at all. Although some Monero users already
take precautions to stay ultra private, Kovri would turn this on by default, enhancing the privacy
of the overall network.

One of the reasons Monero is such a private cryptocurrency is that features like stealth
addresses and RingCT are built into the protocol. With the addition of Kovri, Monero's privacy
protections will only become stronger. Image credit: The Kovri Project

Bitcoin Privacy Features: (Optional) Stealth Addresses, ZeroLink

While Monero is known for its strong privacy, that's not to say that Bitcoin doesn't have any
privacy features of its own, as developers have come up with some solutions that work on top
of the Bitcoin protocol.
For example, some Bitcoin-only wallets, such as Samourai Wallet, offer optional stealth
addresses.
Aside from optional stealth addresses, another feature that Bitcoin users can use is ZeroLink,
which, like Monero's ring signatures, essentially mixes coins, obfuscating the source of the coins
and making it hard to know who owns what. Unlike traditional Bitcoin mixers or tumblers,
which require users to trust the operators of the mixer or tumbler, ZeroLink lets users mix their
coins without having to trust a third party.
Additionally, ZeroLink can be used with more participants at once (up to 100 in Bitcoin-only
Wasabi Wallet, which offers ZeroLink). This is in contrast to Monero's ring signatures, which mix
XMR with ten "decoys". In this sense, ZeroLink might be better than ring signatures, since
mixing with more people can make your funds harder to track.
Nevertheless, one glaring disadvantage of ZeroLink is that it doesn’t hide transaction amounts.
All Bitcoin transactions, as well as the amounts and addresses involved, are publicly recorded
on the blockchain. All amounts in a ZeroLink mix must also be equal, which means that this
technology is limited to mixing as opposed to payments.
While Bitcoin does have privacy features that its users can take advantage of, the features
aren't built into the protocol and are optional. On the other hand, Monero's privacy features
are built in and always on.
Monero vs. Bitcoin: Fungibility

One of the main reasons privacy is important for Monero and Bitcoin is that without privacy,
money cannot be fungible. Fungibility means one unit of money is interchangeable with any
other unit of money.
Imagine that a political dissident fighting against the oppressive government in your country
came to eat at your restaurant. You have no idea that this person is wanted by the government
and accept BTC as payment for his meal. Later on, you learn that the BTC you received are not
spendable anywhere because they have been blacklisted by the government.
This kind of scenario proves that Bitcoin lacks fungibility, or that 1 BTC = 1 BTC no matter what,
since all transactions are public and BTC associated with unwanted activity can be tracked and
blacklisted. Even if you yourself did not participate in any activity that would “taint” some
Bitcoin, you could unknowingly receive “tainted” BTC from someone else to later find out that
they are useless due to their “tainted” nature.
In the real world, a dollar bill is a dollar bill. Even though there's a good chance that your dollar
was used for something illicit, since 80% of dollar bills have traces of cocaine, merchants will
accept your money because they know that they can use it elsewhere without anyone
questioning its legitimacy.
Monero solves this fungibility issue by automatically applying privacy to every single
transaction. Even if Monero in your possession was used for something illicit in the past, no one
can know that since Monero transactions are private. It's source or transaction history cannot
be easily tracked.
For better or for worse, Monero is widely accepted on illegal darknet markets, and its fungibility
is a primary reason for that. Unlike Bitcoin which travels through the darknet and can be
blacklisted by exchanges who won't let users sell it for government currencies like the dollar,
illicit Monero cannot be blacklisted and shows up in the system just the same as Monero from
something as innocent as Monero from a children's charity. This property of Monero has made
it one of the few altcoins (crypto that isn't Bitcoin) with a use case beyond speculative trading.

On top of cocaine and other drugs like heroin and methamphetamine, cash can carry bacteria
that is known to cause acne as well as bacteria found in people's mouths. Even more reason to
use crypto! An easy to use crypto wallet like Exodus doesn't come with germs.

Monero vs. Bitcoin: Transaction Speed

A Monero transaction takes about 2 minutes to confirm. Nevertheless, a Monero transaction
isn't considered fully confirmed until the network confirms the transaction 10 times. Therefore,
a Monero transaction takes about 20 minutes to be considered fully confirmed and the funds
unlocked for spending.

On the other hand, Bitcoin transactions take about 10 minutes to confirm and funds can be
spent after 1 confirmation. So while Monero transaction speeds are faster, Bitcoin has the
upper hand here based on the average time it takes for a transaction to complete with
spendable funds.

Monero vs. Bitcoin: Transaction Fees

Until recently, Monero and Bitcoin transaction fees were relatively comparable (with Bitcoin
fees being a bit higher).
However, in late 2018, Monero adopted a new technology called bulletproofs, which increased
privacy but also decreased transaction size. This means that more transactions can fit into a
Monero block (grouping of transactions), making it less competitive (don't have to pay as much
transaction fees) for your transaction to get confirmed.
As a result of bulletproofs, Monero's average transaction fees decreased by about 97
percent from ~60 cents to ~2 cents.
As of writing, the average Bitcoin transaction fee is about 39 cents, which means that Bitcoin
and Monero would've been similar before Monero implemented bulletproofs. However, thanks
to bulletproofs, Monero has the advantage when it comes to transaction fees.
You can see the drastic drop in Monero's average transaction fees after the implementation of
bulletproofs in October 2018. Source: Bitinfocharts

Monero vs. Bitcoin: Scalability

Scalability, or the ability to handle lots of transactions, is another factor we can use to compare
Monero against Bitcoin.
Crypto needs to be able to handle lots of transactions, like major payment networks such as
Visa, if it is to ever become mainstream. Unfortunately, both Monero and Bitcoin struggled to
handle lots of usage in late 2017, when the cryptocurrency space was getting a lot of media
attention and mainstream usage.
Average transaction fees shot up for both cryptocurrencies, showing that cryptocurrency was
not yet ready for everyday use. While the transaction fees might have been comparable or less
than those of wire transfers, they were still much higher than no or low-fee payment methods
like credit/debit cards, Paypal, and Venmo.
Nevertheless, we have to give Bitcoin the upper hand on this one since Monero has only ever
had to deal with around a few thousand to several thousand transactions per day. Meanwhile,
Bitcoin regularly handles hundreds of thousands of transactions per day. Considering that
Monero ran into scalability issues with such little transaction volume means that it isn't yet
ready to compete with major payment networks.

Monero vs. Bitcoin: Mining Algorithm

Monero and Bitcoin are both "proof-of-work mining" systems. Individuals known as "miners"
validate network transactions through a process known as mining. Miners race to solve a
mathematical equation with their mining devices (e.g. a computer or specialized mining device).
Whoever solves the equation first is rewarded with newly minted XMR or BTC and adds a new
block to the blockchain.
Monero and Bitcoin use different mining algorithms. Bitcoin's mining algorithm, SHA-256, is
able to run on devices known as application-specific integrated circuits (ASICs). ASICs are
expensive devices that are created just to mine Bitcoin. Trying to mine Bitcoin with something
like your personal computer is pointless these days, since you face tough competition from ASIC
miners.
Of course, this situation is great for people who are able to afford ASICs. However, ASICs are
expensive and energy-intensive, which has led Bitcoin mining to become centralized in
countries with cheap electricity. This makes it hard for everyday people to accumulate Bitcoin
via mining.
Monero uses a mining algorithm called RandomX. RandomX is ASIC-resistant and people who
choose to mine Monero with ASICs don't gain a big advantage over users who use more
ordinary equipment. This makes the mining process in Monero more equitable than that of
Bitcoin. Moreover, it's easier for users to get their first taste of Monero without necessarily
having to buy it outright, as with Bitcoin.
Although you probably can't mine Monero with your personal laptop these days, it's at least
easier to mine Monero than it is Bitcoin. Bitcoin mining has become a full-on industrial
enterprise, as evidenced by the rise of enormous "mining farms" with thousands of ASICs in
places like China that have cheap electricity. Image credit: Engadget

Monero vs. Bitcoin: Network Effect

Although Monero beats Bitcoin on things like privacy, fungibility, transaction fees, and mining
algorithm, Bitcoin definitely beats Monero when it comes to the "network effect", or amount of
people using Bitcoin vs. Monero.
As mentioned, there are way more Bitcoin transactions on a daily basis. While Monero has a
few thousand transactions per day, Bitcoin has hundreds of thousands of transactions per day.
Therefore, while Monero's technical features might be more impressive in many regards, that is
of less relevance if only a few people are using the network.
On top of daily usage, Bitcoin also has Monero beat on other indicators of network size like
merchant adoption, exchange support, trading volume, and financial products like derivatives.

Monero vs. Bitcoin: Supply

Another area in which Bitcoin is more preferable to Monero is its total supply. One of the
defining characteristics of Bitcoin is that its maximum supply is fixed at 21 million BTC. This
gives Bitcoin "scarcity", similar to gold. Scarce or low supply assets can be worth lots of money
if demand for the asset is high. This has been the case with BTC as we'll discuss in the next
section.
On the other hand, Monero does not have a maximum supply but will inflate or increase in
supply slower and slower as time goes on. Bitcoin's scarcity has earned it the nickname "digital
gold", since gold has historically been valued for its scarcity. Image credit: Medium, @Wei Chun
Chew

Monero vs. Bitcoin: Price

Perhaps due to its fixed supply as well as other factors, Bitcoin also has an advantage over
Monero when it comes to price. As of writing, 1 Bitcoin is $7,244.14 and 1 Monero is $53.42.
While a higher price might be perceived as a negative in terms of potential room for growth,
Bitcoin has historically performed better than Monero in terms of price.
If you purchased Monero when it was at its earliest known price, your return on investment
(ROI) would've been 2,059.19%. This is of course nothing to sneeze at. Nevertheless, if you did
the same with Bitcoin your ROI would've been 24,147.12% - basically unheard of in the world of
investing. In fact, CNN named Bitcoin the best investment of the last decade (2010s).
The phenomenon of a trust in online world
To define trust is challenging and there is a lot of different meanings of this word. We have a
variety of situations where trust takes a big part in decision making. Starting with a trust in a
relationship between two people and ending with trust for a company to choose when buying
goods or services. Customers ask themselves if the purchase is not the waste of money, does
the purchase meets the requirements and expectations. Hence, trust has a lot of meanings and
aspects. Precisely because of the variety of exploration opportunities I have decided to explore
specifically a phenomenon of a trust in the online world. Online services, products and their
purchase is one of the most popular trading model today. Even if a shop has a physical point of
sale, most likely it will have online shop too, where 17 customer can order goods, pay for them
and receive. Sometimes online price or service offered with the same company may differ. In
the literature the trust phenomenon in online world is mostly defined as “willingness of a party
to be vulnerable to the action of another party based on the expectation that the other will
perform a particular action important to the trustor.” (Perry & Capretz, 2010). In another
words, one party agrees to depend on actions and performance of another party. Trust is a very
useful in reducing the complexity. Another definition says that “trust is an attitude of confident
expectation in an online situation of risk that one’s vulnerabilities will not be exploited”. The
authors include some key concepts in their definition, which are risk, vulnerability, expectation,
confidence, and exploitation. (Chang, Dillon, & Hussain, 2005). This definition includes the fact
that the trusted party knows about vulnerability of another party and it is expected that trusted
party will not exploit the vulnerability of another party. Also, another definition of trust
provides: “the belief that the Trusting Agent has in the Trusted Agent’s willingness and
capability to deliver a quality of service in a given context and in a given Time Slot”. This
definition is one which I find the most suitable for online world trust as it includes and
combines keywords “deliver“, “quality service“ and “Timeslot“. Basically it explains that trust
depends on trusted party‘s performance according to a trusting party requirements and
expectations. “Trust is about the ability to predict the behaviour of another party” (Buttyan &
Hubaux, 2007). This definition can be applyed to a trust phenomenon in a very different areas.
When a trusting party predicts the behaviour of a trusted party and expects it to act according
to a prediction. If it happens vulnerability is not exploited and trust is safe. (Grandison &
Sloman, 2000) define trust as “the firm belief in the competence of an entity to act dependably,
securely, and reliably within the specified context”. Also it is defined that distrust is “the lack of
firm belief in the competence of an entity to act dependably, securely and reliably within a
specified context”. This definition is important as it highlights, that trust is the sinegetick effect
and combination of multiple elements, in example, reliability, honesty, dependability, security,
timeliness, and competence, can give the result. Logically, every different attributes has to be
considered and prioritised in a different environments where trust will be established according
to a needs and trusting party expectations. In a different literature we can find two common
definitions of trust: reliability trust and decision trust. Reliability trust where in some activity
(business, partnership, romantic relationship, etc) side A relies on side B and expects from side
B to perform a specific action on which it welfare depends. This is the most accurate definition
which reflects the meaning if trust. Customer trusts a company and expects that for payed price
he or she will get company promised values. If customer expects from a company performance
or values which were not promised company is not responsible for a trust vulnerability.
Decision trust is the extent to which one party is willing to depend on something or somebody
in a given situation with a feeling of relative security, even though negative consequences are
possible”. In this definition case a trusting party relies on trusted party because the own will
even knowing that the result can be different from the expected one. In the world of
cryptocurrency this type of trust can be depicted: customer trusts company and its services.
When company offers a new product, for example, new coin on exchange, customer does not
know if the price of a coin will rise, drop and overly what value swings can be predicted.
However, customer invests in this coin because trusts a company. In Web Services, trust is
defined in the WS-Trust specification (Hoyle, 2005) as “the characteristic that one entity is
willing to rely upon a second entity to execute a set of actions and/or to make assertions about
a set of subjects and/or scopes”. Often, trust is confused and used synonymously with terms
such as cooperation, faith, competence, reliance and credibility. Cooperation is either a cause
or a manifestation of trust. Trust includes reason but faith is the opposite to reason, as faith
exist basically without explanations, arguments and irrationally. Trust goes beyond the belief in
the competence of the trusted party. Trust in information means that the information is
credible or believable (Corritore, Kracher & Wiedenbeck, 2003). It is possible to rely on a person
without trusting him/her. (Corritore, Kracher, & Wiedenbeck, 2003)(Blois, 1993). As it was
mentioned before, there is difference between trust to a company or organization and trust to
it’s products and services. Most financial institutions which work with cryptocurrency have to
offer a wide range of services and products to customers, i.e.: exchange, online transactions,
investment tools, tools of accepting cryptocurrency payments for merchants, cards etc.
However, customers can rely on the company, be loyal customers but not trust to some of the
services. The most common in this case situation is bitcoin cards, as companies have to
cooperate with card issuers and it is problematic. Users do not understand where and how to
use cryptocurrency card as it has specific procedure when user has to top up the curd from the
e-account before using it. To explain how card works let me give the example: user has an
account with some amounts of bitcoins. To use the physical or virtual card, users has to top up
the card with Euros or USD, depends on card‘s denomination currency. In order to top up the
card user has to pin it to the account where is the bitcoin wallet. User has to exchange bitcoins
into Euros or any other needed currency and load the 19 card with this currency and after that
card can be ready to use. Sometimes users do not understand the procedure so they do not
know how to use the card, hence they do not trust this product and do not use it. It is even
worst, when user do not know how to use the card but still tries to use it and faces a lot of
problems in the process. As the result user decides that card is impossible to use and this
product cannot be trusted. So the small conclusion that could be made on this stage, is that the
lack of trust in case of cryptocurrency is based on a few reasons: the lack of knowledge how to
use the service and as the result – absence of a trust to the service. The most important in any
business is to gain a customer trust. As it was mentioned before, trust can exist in a very
different areas, so for a company which offers online service it is important to analyze customer
trust and its dimentions. Large amount of researches defined that customer trust, customer
loyalty and customer retention are the key to successful business. Trust is the name of
confidence and belief which customer attach with some organization and consider that what he
or she expectsshould be delivered (Mayer, Davis & Schoorman, 1995). Actually, trust is a
relation which attaches the customer with the company. Trust also involves between the
employees of an organization. The higher level of trust upon each other in multinational and
multicultural organizations creates productive relationships, which at the end generates long
term benefits for the organizations. Basically Trust plays an important role at e-business.
Because at e-market privacy and security are keys elements to develop trust. Trust
development is more suitable to trade when considering the business to consumer market.
Even in store salesperson behavior influences more to build trustworthy relationships. Sales
effectiveness ultimately increases the trust of customer. Salesperson behavior plays a vital role
in trust building. Empirical evidences shows that level of loyalty is higher in online services as
compare to offline. Within service industry it has been analyzed that personnel loyalty is very
high. Customer wants to be treated by the same person. Hence especially the service
organizations need to clarify the credibility of their staff to make customer more personal loyal.
There are several ways to identify loyalty and this illustrates the multi-dimensional nature of
loyalty. As loyalty is multidimensional which describes that value added services also derive
customer loyalty. In results loyal customers tend to further purchase the products even when
the prices are high with understandable explanations. There are several determinants of loyalty
which includes service quality, perceived value, and corporate image.
Dimensions of customer trust:
1. Competence - ability of an organization to performe a promised values to its customers
according to requirements (quality, time, price);
2. Integrity - operating with fairness and honesty;
3. Reliability - acting consistently and dependably.
It is important for customers to get what was promised and meet the settled requirements.
Perfomance is extremely important if a company is willing to start relationships and gain
customer loyalty. Additionally, it is also important to be a reliable partner for a customer,
where he or she can get a product or service which will always fulfills expectations. For a
different target audience expectations are not the same. In case of cryptocurrency services
some customers can be focused only on investments into bitcoin or trading a new coin on an
exchange. Merchants demand integrational tools that facilitates cryptocurrecny payments. A
company needs to set the priorities or try to cover as much cryptocurrency services as possible
in order to create the ecosystem. For any type of company loyal customers are the most
important segment as they are the ones that will stay beside even when the situation on the
market will start changing and a
Company will have financial or other type of crises. Satisfaction of customer has greater
influence over customer loyalty. The empirical evidences shows that when organizations give
more importance to the expectations of its customers then in derives the customer loyalty. To
give more than it was expected will rise the level of trust of a customer and as a result will
influence the loyalty and a retention of a customer. If a company cannot perform in the way of
over-execution it is important to deliver at least what was promised. The worst influence on
customer trust and retention will have low performance of a company and delivering less of a
value to the customer than it was promised or not delivering it at all. Trust helps to redact the
complexity. If the company is performing constantly and dependably, delivering promised
value, there is a higher possibility that loyal customer will not leave or quite a service when
some uncomfortable situations or complications will appear in the future. In a cryptocurrency
company the situation which can be uncomfortable for customers is always connected with
regulations of a cryptocurrency institutions by European Parliament. The procedure which is
directly connected to customers is named KYC and it asks to reveal customers a lot of personal
data related to funds, amount of money, amount of transactions, activity. User gets 21 a form
with questions related to a sensitive data. Also, the video verification which approves that the
sent ID document belongs to a person. All the procedure is time taking and uncomfortable from
perspective of personal data collection. However, KYC procedure is direct regulation, which was
created in order to prevent money laundering and terrorist financing. Not all customers
understand that and some customers do not understand the importance of a procedure and
get irritated with it. If user trusts a company and is loyal customer he or she will rely on a
company with the issue of secure storage of personal data. The important procedure will not
become a barrier which can lead to a customer's decision to quit the services and products of a
company. To make a short summary, trust is phenomenon where party A expects from a party
B to perform in a predicted way and is vulnerable but expects that the vulnerability will not be
exploited. If a company delivered promised value to a customer - the trust is getting stronger
and in perspective leads to a loyalty. Also, it was highlighted that lack of a understanding of a
certain technology or product leads is one of a reasons which cause lack of trust.
I.1. Electronic money – the beginning
Amid history, diverse materials have been utilized as cash. Starting from trade, to the
utilize of valuable metals and today's utilize of notes. In any case, innovative
advancement caused that the use of notes has been diminishing, while digital forms of
installment have ended up increasingly in common. Particularly, due to the fast
development of electronic commerce (e-commerce), unused needs for comfortable and
secure strategies of installment have had to be developed. The history of electronic
money (e-money) has begun with the increasing application of information and
communication technologies. In 1990, the company "DigiCash" was founded by
encryption expert David Chaum. The company used a system called "ecash". This
electronic money had the same characteristics as real money, and above all, it was an
anonymous medium of exchange due to various protection mechanisms. But unlike
paper money, it had its intrinsic value, because its value was tied to paper money. The
advantage of this framework was that it did not need additional equipment - the
framework can be utilized specifically from an computer. The client would purchase
ecash by changing over legitimate delicate from his current account into electronic
cash. When clients bought certain merchandise by means of the web, they would
promptly pay by electronic cash and the vender seem utilize ecash for installment or
inquire for change of ecash into legitimate delicate on his current account. It was
moreover conceivable to conduct installments between individuals. The disadvantage
of this system was that the necessary data ("money") was stored in the computer of the
users, so if a user formatted his hard drive, he would lose his e-money. Moreover,