Cryptocurrencies have grown increasingly popular as an investment security and source of income, but their volatile price dynamics make predicting their performance challenging.

This data science challenge explores the correlation between Google Trends data and cryptocurrency token prices to reveal insights that can drive predictive models. We also assess user and non-user sentiment towards cryptocurrency to uncover perceptions and feelings towards this emerging technology.

Anonymity

One of the main attractions of cryptocurrency such as Bitcoin is that it appears anonymous. But there are ways to penetrate that veil of anonymity and trace cryptocurrency transactions.

When making transactions using Bitcoin, they’re recorded on a public blockchain ledger – meaning your transactions could potentially be traced back to you and used for illegal purposes.

However, some cryptocurrencies are working hard to remain more anonymous, including Monero, Bytecoin and Zcash. While they still have work to do in terms of anonymity, these coins use sophisticated cryptography techniques and mixing methods to obscure transaction details for transactions utilizing these coins; providing some level of privacy while not jeopardizing blockchain’s inherent transparency – the two don’t contradict one another necessarily, but it takes careful balancing between the two aspects.

Decentralization

Decentralization refers to the distribution of functions away from central control. Decentralization enables communities, businesses, cooperatives, private voluntary associations and non-governmental organizations to share resources and responsibilities more equitably.

At its core, the aim is to reduce government intervention while simultaneously creating new markets and jobs.

Decentralization refers to the use of blockchain-based technologies that allow users to exchange and transact directly. While decentralized systems can be an effective tool for increasing transparency and accountability, their price volatility and reliability issues often necessitate intermediary services in order to manage unwieldy decentralized networks for users.

Security

Cryptocurrency’s decentralized, borderless, and mostly anonymous nature make it an attractive tool for criminals; however, digital forensics specialists have shown that its anonymity does not translate to invisibility: its blockchain tracks transactions more closely than cash or wire transfers do, enabling investigators to quickly trace, locate ownership claims and recover funds more efficiently than would otherwise be the case.

Cryptocurrencies are vulnerable to hacking, with exchanges, wallets, and off-chain storage repositories often falling prey. Millions have been lost from previous hacks on exchanges, wallets, and off-chain storage repositories alike. Crypto markets may also be subject to manipulation from within via insider access to software code running the platform; this has significant ramifications for legal and compliance teams who must consider how such risks interact with standard approaches to fraud prevention and investigation.

Privacy

Cryptocurrency is an electronic medium of exchange composed of binary data (ones and zeroes). Although cryptocurrencies claim anonymity, authorities like the FBI are still able to trace them. Therefore, criminals use them for illicit marketplaces on the dark web, terrorist funding, money laundering, theft, ransom payments, ransom payments, ransomware payments and other illicit activities.

Cryptocurrency exchanges, wallets and key storage repositories can be compromised, as has happened with multiple major cryptocurrency exchanges recently resulting in losses totalling millions of dollars. Furthermore, due to price volatility issues on public markets involving cryptocurrencies being traded publicly forensic investigators must use proven techniques for tracking these digital assets down.

Transparency

Transparency is central to blockchain, the technology underpinning cryptocurrency. Bitcoin transactions are recorded on an accessible public ledger known as the blockchain that records transactions on a public ledger which everyone can view on the internet. Cryptography secures this chain by using both public and private keys; with one being visible while one remains private.

Cryptocurrencies can be used for an array of purposes, from remittances and investments to fundraising through Initial Coin Offerings, decentralized applications (dApps), and store of value applications. Governments are increasingly concerned that they could be misused for illicit purposes like money laundering and terrorist financing.

However, links between regulated financial sector and crypto markets remain tenuous, though that could change over time. Furthermore, due to rapid technological development within crypto markets it’s hard to anticipate how they might evolve in the near future.