Univrsity Of Tehran Press Journal of Information Technology Management 2980-7972 14 Special Issue: Digitalization of Socio-Economic Processes 2022 09 01 Cryptocurrency: Value Formation Factors and Investment Risks 179 200 88896 10.22059/jitm.2022.88896 EN Olena Pakhnenko Department of Financial Technologies and Entrepreneurship, Sumy State University, Ukraine. Pavlo Rubanov Department of Financial Technologies and Entrepreneurship, Sumy State University, Ukraine. Olga Girzheva Department of Management, Business and Administration, State Biotechnological University, Ukraine. Larysa Ivashko Department of Management and Innovation, odessa I.I. Mechnikov National University, Ukraine. Igor Britchenko Prof., Dr. of Sciences, State Higher Vocational School Memorial of Prof. Stanislaw Tarnowski, Poland. Liliia Kozachenko Department of Accounting and Taxation, Mykolayiv National Agrarian University, Ukraine. Journal Article 2022 09 13 Scientific sources demonstrate different attitudes of researchers to cryptocurrencies because they treat them as a category of currency, virtual money, commodity, etc. Accordingly, the relation to the valuation and risk of cryptocurrency as an investment object is different. The purpose of the article is to identify cryptocurrency value formation factors and determine the risks of investing in cryptocurrency. Cryptocurrency is simultaneously considered a currency, an asset with uncertain income, and a specific product, the price of which is determined by the energy costs for mining new cryptocurrency blocks. Thus, the paper examines the risks of investing in cryptocurrency from several positions. First, the study identifies the factors of formation of the value and risk of cryptocurrency as ordinary money based on comparing cryptocurrency with traditional money. Unlike traditional money, cryptocurrency is not tied to the economic performance of a particular country; also, central banks do not control or regulate their mining. Instead, the cryptocurrency emissions depend on the computational capacity of the equipment used for their mining. As a financial asset, cryptocurrency can be a “financial bubble” because their value increasing often exceeds the cost of mining. On the other hand, given the emergence of cryptocurrency as a phenomenon of the information economy, the paper analyses the impact of specific technical features (cryptographic hashing algorithm, the complexity of creating new blocks, the technology of verification of mining operations, etc.) on the risk of investing in cryptocurrency assets. https://jitm.ut.ac.ir/article_88896_e30a82b6168d37033bc8d9acf2fbda66.pdf