Bitcoin Controversy

1453 Words3 Pages
bulb-icon

Recommended: Bitcoin volatility

Bitcoin and associated terminology have skyrocketed in both value (peaking around 17,000 USD as of December of 2017) and attention within the past few years, gaining traction as a new decentralized currency that didn't rely on third parties for secure transactions and spawned various offshoots. At first, it may seem attractive to invest in these ever-increasing coins, but they present various problems in an economic perspective at various levels. The volatility is based on the beliefs of the people who invest in the system that it won't fail, and various factors threaten the stability of bitcoin and others which could lead to a crashing or at least a continually unstable market. This leads to the question, of whether or not American investors …show more content…

The price of Bitcoin itself is volatile, influenced by external factors such as number of investors and its inherent properties. The ability to pay others directly without going through a centralized institution while still being a safe transit is one of Bitcoin's core qualities, but in that Bitcoin is backed by the actions and beliefs of its users rather than an institution. This also allows for a greater freedom in which Bitcoin can be utilized, which is sparking some controversy. In a paper by Ploteanu and Stratulat, (2015, pg. 4) they state banks have taken a stance against bitcoin, because of its decentralized nature as well as the risks by associating with the currency such as "money laundering, financing terrorism, and the levels of anonymity Bitcoin provides for its users." This makes Bitcoin increasingly riskier and difficult to utilize today in the modern world because central institutions such as banks will not accept them, forcing users to find workarounds such as converting their Bitcoin elsewhere. Swartz (2014) …show more content…

She looks at its percentage volatility of Bitcoin within 2013, 143%, compared to typical currency/stock value, 10 and 25% respectively. Swartz points out more flaws, "Unlike gold, a bitcoin's value is not tied to a resource and its value cannot be recovered." (2014, pg. 5) With this in mind, Bitcoin is proving to be unstable, seemingly riding on public frenzy and a few qualities that have little to no real use in the real world. Other external factors such as other cryptocurrencies containing more variations and improvements such as Ethereum, the perceived value by the public on Bitcoin, media coverage and others impact the constantly fluctuating value of Bitcoin

Show More
Related

  • Risks Facing Investors in the Article, Can We Keep Our Promises?” by Robert D. Arnott

    1677 Words  | 4 Pages

    The purpose of this paper is to provide a summary of the article called “Can We Keep Our Promises?” by Robert D. Arnott, and to help better understand the three key risks facing each investor.

    Read More

  • An Eventual Explosion Caused by the Federal Reserve's Quantitative Easing Program

    918 Words  | 2 Pages

    ... strength of imaginary wealth, the government bubble (mortgages and bonds) is propping us up now. The pressure within the bubble will grow so great that the Fed will soon only have two options – 1. Finally contract the money supply and let interest rates spike -- which will cause immensely more pain than if we let this happen in 2002 or 2008, or 2. Keep pumping more dollars into the economy, causing hyperinflation and all the evils that come with it. The politically easier choice will be the latter, wiping out the dollar through hyperinflation. The grown up choice would be the former, electing for some painful tightening, which will also entail the federal government admitting that it cannot fulfill all the promises it has made, and it cannot repay everything that it owes. Regardless, well get the big crash. The longer we wait, the bigger the explosion will be.

    Read More

  • Peter Cook

    541 Words  | 2 Pages

    "TALESOFGRAZ 2006 - Artists." :: TALESOFGRAZ 2006 - Artists ::. N.p., n.d. Web. 7 Mar. 2014. .

    Read More

  • Current Macroeconomic Situation in the United States

    883 Words  | 2 Pages

    The United States is the leading economy across the globe and experienced several tribulations in the recent past following the 2008 global recession. Despite these recent challenges, there are expectations among policymakers and financial experts that the country will experience solid economic growth. Actually, financial analysts have stated that the U.S. economy will be characterized by increased consumer spending, increased investments by businesses, reduced rate of unemployment, and reduction in government cut. Some analysts have also stated that the country’s economy will strengthen in 2014 with an average of 2.7 percent or more. However, these predictions can only be understood through an analysis of the current macroeconomic situation in the United States.

    Read More

  • Bitcoin the Cryptocurrency: Stimulating Global Economic Growth

    1748 Words  | 4 Pages

    “The Economist Explains, How Does Bitcoin Work?” The Economist (2013): n. pag. Web. 08 Apr. 2014.

    Read More

  • John Williams Arguments Against Cryptocurrency

    509 Words  | 2 Pages

    In a pretty damning statement, John Williams - the soon-to-be president of the New York Federal Reserve Bank – believes that cryptocurrency “doesn’t pass the basic test of what a currency should be.” Leaning on a tired argument Pro-establishment and anti-Bitcoin, Williams is the current head of the San Francisco Federal Reserve Bank. His arguments against the rise and adoption of Bitcoin all hinge on the tired “store of value” argument, as he claims that any viable currency has to be “something with a store of value”. He furthered that by claiming that currencies also need to be extremely resilient – almost elastic-like – in order to push through varying economic and financial conditions.

    Read More

  • The Pros And Cons Of Cryptocurrency

    3058 Words  | 7 Pages

    instantly with negligible costs for transactions. Cryptocurrencies are becoming widespread as a paper and electronic currency which poses an opportunity to investors who started early. Most of the commonly known problems with cryptocurrencies are the issues of deflation and also wasteful mining that leads inflation. The advantage is that, these problems are not such pervasive especially when the issue of the cryptocurrency economy as a general operation is considered. They only drive their own value by having the reputation of an effective transaction mechanism. This happens in cases that they seem to be overvalued while other cryptocurrencies getting an opportunity to arise. When they arise, they will thus increase the number of cryptocurrencies which will thence cause inflation while posing a limit to wasteful mining.

    Read More

  • Analysis Of The Documentary Banking On Bitcoin

    1403 Words  | 3 Pages

    Banking on Bitcoin acknowledges these opposing arguments throughout the film but negates them with many different rhetorical elements. The opposing argument does not stop this documentary from being effective in persuading people to use Bitcoin. Cannucciari has supplied sufficient evidence and logic along with rhetorical elements to persuade one into using Bitcoin. The concepts in this documentary support themselves and are still growing today. It would be no surprise to find that this documentary helped the growth of Bitcoin over the last

    Read More

  • Economic Impact Of Bitcoin

    794 Words  | 2 Pages

    Such as the "litecoin" appearance in the market recent years, it has taken a huge impact on the price of Bitcoin. In addition, although Bitcoin attempts to avoid inflation by setting the upper limit of the quantity. The limited amount is likely to cause the price to fluctuate significantly, making it become the speculation rather than medium of exchange. (Bohme, Christin, Edelman & Moore, 2015) Also, Bitcoin may act as an illegal trading channel, affecting the normal social and economic order. As the Bitcoin is a peer-to-peer transaction, lack of third-party regulation. That may be abused in money-laundering, tax evasion, smuggling and other criminal acts, cause the economic market

    Read More

  • Argumentative Essay On Bitcoin

    2950 Words  | 6 Pages

    Michael Rodriguez James Maughn English 1A 20 May 2015 bitcoin fantasy. The Nation. The World. The World. ARE DIGITAL CURRENCIES THE FUTURE OF MONEY?

    Read More

  • Cryptocurrency Essay

    1434 Words  | 3 Pages

    Cryptocurrency, such as Bitcoin, has brought in a lot of media attention over the past few months and has been raising eyebrows within government agencies worldwide. Here’s why: Appropriately constructed, cryptocurrency could potentially upend our established global economic system. This newfound technology poses as a serious threat to our currency-issuing central banks and also to the global financial intermediaries. To truly understand the changes that cryptocurrency could potentially bring, you will need to have a general understanding of our current economic system.

    Read More

  • The Importance Of The Stock Market

    2323 Words  | 5 Pages

    Have you ever invested in the stock market? If so, do you know where your money is really going? The stock market is a risky business and it can make or break people’s lives. The stock market is used to daily to keep America on its trembling feet; it’s also being used at this very moment to cheat people out of money for personal gain. This happens every day in the stock market and its evolving rapidly, super computers that can trade faster than a blink of an eye, social media trends that can predict share values, and intricate stock market schemes that are getting harder and harder to find and take down. While the stock market keeps the world turning and the economy steady, the stock market is also being used in manipulative ways that are not always legal.

    Read More

  • Essay On Bitcoin

    1325 Words  | 3 Pages

    Though there is recent contradiction of bankruptcy in bitcoin market, investors are looking to invest more & more in bitcoin.

    Read More

  • Crypto-Currencies Essay

    1267 Words  | 3 Pages

    No economic systems can regulate the production or value of the currency, the system that crypto-currencies are based upon was created by Satoshi Nakamoto - purposely creating Bitcoin which the practise of fractional reserve banking would be virtually impossible. Bitcoin is currently the most successful crypto-currency to date - created in 2009, this anonymous decentralized digital currency has been the target of several raids and hacking sprees; the media are contemplating the significance of Bitcoin in our current worlds economy. Whether it has potential of overruling fiat-currencies or if it’s just a puerile project created by the aberrant Satoshi Nakamoto. Global Perspective Since its creation in the ‘60s, the Internet has paved the way for numerous phenomenons that have affected the way that we live, the way we communicate and that have affected the worlds economy.

    Read More

  • Essay On Exchange Rate Of Dollars

    670 Words  | 2 Pages

    Daily in the USA about 38 million banknotes of various face value for total amount about 541 million dollars are issued (Facts about USA money).Dollars involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off of competitors of the USA in foreign markets. At the same time import to the USA owing to effect of a rise in prices restrains. Thus, for the USA changes in the exchange rate of dollar anyway bring benefits and advantages.Reduction of leading positions of the USA in world economy is assisted by the international role of dollar which remains the main reserve and settlement means in world monetary system. Foreign currency reserves of the central banks of other countries for 61% consist of dollars, nearly 2/3 calculations in world trade are carried out in dollars; the dollar serves as a measure of value of many important goods (for example: oil) in the world market; in dollars 3/4 international bank crediting is made (Aleksandr Popov). Changes in the exchange rate of dollar involve deep consequences both for the USA, and for other countries. Increase of its course relatively reduces the volume of export revenue in dollars, quite often involves more considerable, than change of an exchange rate, falling of the world prices, especially on raw materials. On the contrary, decrease in a dollar rate serves as the powerful tool promoting growth of the American export and a pushing off...

    Read More

More about Bitcoin Controversy

Open Document