Introduction: Can Bitcoin Usher In the Digital Currency Age?
The Bitcoin network was started on January 3, 2009 and the first Bitcoins were issued. Only one year later official exchange rates were set for Bitcoins. Bitcoins as an example of a purely digital currency carry with them both risks, and benefits, but I feel that the risks will be outweighed by the benefits:
• Small Risk of Inflation
• Small Risk of Collapse
• Safe and Cheap Transactions
• Easily Transported
• Virtually Untraceable
This last benefit is also a risk as having an untraceable currency lends itself to be sought after for criminal activities as it is potentially harder to be traced to its source than cash, the current go to for criminal activity. This will likely bring unwanted attention by governmental entities that will want to have a hand in the monitoring of the currency and its owners. A cursory look at the other risks to better explain how this is merely the entry into digital currency rather than the end all be all of digital currency need to be addressed. Bitcoins are relatively easy to lose as once they are no longer in your personal possession there is no simple way to get them back. Currently Bitcoins are difficult to trade for any direct type of alternative currency, but this will development the more widespread that general adoption occurs. With how young the currency is there is the calculated risk that a different type of digital currency won’t outdo it, or if there is an inherent flaw within the code behind Bitcoin. The currency stands more as an investment choice rather than an actually currency for purchasing item on a day-to-day basis due to the current limitations of the number of companies/people that accept it as a viable payment method....
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...s not deliver to them the goods or services that they have requested. Other benefits from this can be passed along to both the seller and the buyer.
Brito and Castillo’s study found the following : Not having to pay merchant fees means that merchants who accept Bitcoin have the option to pass the savings on to con- sumers. That is the business model of the Bitcoin Store,23 which sells thousands of consumer electronics at discounted prices and only accepts bitcoins. The same Samsung Galaxy Note tablet that sells on Amazon for $779 plus shipping24 sells at the Bitcoin Store for a mere $480. (p. 12)
Another gain that spans the world over through the use of Bitcoin are people that send money back to their families from first world countries. The World Bank estimates that the amount of money sent to families in this way will be over 500 billion dollars by the year 2015.
The topic that I’m going to write about in this paper will be on the electronic currency released in 2009 known as Bitcoins. Bitcoins is a type of currency that entails computer software to be used with one person exchanging with another person for a different kind of trading option such as the US dollar, products or services. There is a fourth reason why Bitcoins can be exchanged which is done when a person is mining, that occurs when a participant acts as a mediator for transactions whereas mediator approves and documents. Bitcoins is one of the largest and first electronic currencies ever created by any developer including the makers Satoshi Nakamoto. Bitcoins doesn’t meet the characteristic guidelines to be considered an actual type of currency, though the US Treasury recognizes it as a type of decentralized currency in that no person or organization including governments oversees the transaction of Bitcoins.
"If you are not paying for it, you're not the customer; you're the product being sold."
Bitcoin is a form of digital currency that is similar to physical cash stored in a digital form. It is the first fully implemented cryptocurrency protocol utilizing an open source peer-to-peer payment system. As a transfer protocol, it fundamentally functions as a money transfer medium that sends bitcoins from user to user without the need of a third-party intermediary and the system is protected by peer-reviewed cryptographic algorithms. This cryptographic digital currency simultaneously provides users a method to exchange money for free or a nominal fee, which is mutually beneficial for retailers and consumers. The main concern is that it can be used for illegal activities such as the purchase of drugs, weapons and other illegal goods. Albeit true, the concern also exists with all other forms of regulated currency, such as cash and wire transfers. Anonymity is one of the greatest Bitcoin perks, however, nothing is as untraceable as cash. It is the solution to the leading economic and security issues that have left everyone vulnerable, particularly in the wake after the Target security breach in which hackers stole unencrypted credit card and debit card data for 40 million customers’ as well as their pins over the span of two weeks before it was detected. In addition, these hackers were also able to obtain the names, addresses, phone numbers, and email addresses of 70 million customers (Andreesen 6). If Bitcoin were to be used as the standard form of payment, the transaction data does not identify the purchaser’s identity and all information is encrypted. It is the most secure payment method and is a more secure future. Bitcoin is a technologically innovative soluti...
The world is becoming increasingly more accessible due to the internet; specifically for monetary transactions such as shopping and banking. In 2009, a group of people under the name “Satoshi Nakamoto” created the Bitcoin, a form of digital currency that can be used to conduct transactions on the internet. In the past six months, there has been a sudden spur of popularity for the Bitcoin, which increased the coin’s net worth, as well as stock prices for investors. Its stocks started accumulating investors in September 2013, at roughly $130 a share. Now in 2014, a share of the Bitcoin, sits at approximately $600. On a purely economic level, the Bitcoin may appear to be a promising investment of both money and hope for the economy in the future as technological advancements make improvements in our day-to-day lives. However, the very thing that is attracting investors is also sending red flares to government officials – uncertainty. A virtual currency is innovative and a very new concept to the society which we have today that is caught in a limbo between holding onto the old and transitioning into the new. The Bitcoin generates an interesting outlook on global politics and economy in the 21st Century. The virtual currency analyzes the threat of a foreign currency within a state, the possibility of a potential global currency and the technological economy of the future.
This means that by using Bitcoins, users are contributing to the network and sharing the responsibility of authorizing transactions. This sharing of work significantly reduces transaction costs, making them negligible.
Further, there exist other elements that characterized Bitcoin and crypto currency. These are; there is lack of regulatory management and oversight. This mean that the currency has got what is known as anonymity which results from shortage of oversight. In this case, it means that once the currency is in the market, government and legal roles fail thus putting the crypto currency out of the currency market. The crypto currency litter the black market due to lack of this regulatory.
Bitcoin is a digital currency, similar to cash due to the fact it is instant, however, is not managed or controlled by a central government or organization. Instead, the network is run on thousands of independent user’s computers. None of these computers have more control over the network than any other computer. The network that Bitcoin was founded upon is based on 40 years of research in cryptography and over 20 years of research in cryptocurrencies by thousands of researchers around the world. Bitcoin answered what was thought to be an unsolvable math problem known as the Byzantine Generals Problem.
First, the impact of material money market. Compared with the material money, Bitcoin does not distinguish between different currencies, and there are no exchange currency costs or be affected by exchange rate fluctuations. Also, the Bitcoin trades circulation in the global, for the international trade and economic development has brought great convenience. Bitcoin as a virtual currency, with the traditional entity currency, cannot match the advantages of the circulation of Bitcoins will produce a significant change in the currency market.
According to its semi-official definition, a cryptocurrency is “a peer-to-peer, decentralized, digital currency whose implementation relies on the principles of cryptography to validate the transactions and generation of the currency itself.” (While that is one dense slab of prose, to be fair to the cryptoids, it wouldn’t be easy to define the dollar succinctly either.) What this means is that Bitcoin and the rest are electronic currencies created and transferred by networked computers with no one in charge. The role of cryptography is not merely to guarantee the security of the transaction, but also to generate new units of the currency, which are “mined” by having computers solve complicated mathematical problems. Once solved, new coins are created and their birth— with digital signatures guaranteeing authenticity and uniqueness—announced to the rest of the system.
This might appear obvious to many shoppers. But I believe multitudes of people purchase items without ever considering what they buy could be found elsewhere for less money. Even I am guilty of assuming that Walmart has the best prices on everything. If I take a small amount of time to search for a specific coffee maker, I can find the large chain store 's prices such as Walmart, Target, Best Buy, and Sears, along with other smaller retailers. (In some cases smaller stores ' prices are lower.) Many stores price match, so if I prefer to shop at Walmart because I live close to one, I can have them match the competing retailers lower price. Also, many retailers provide free shipping on online orders totaling a certain amount. Therefore, if physically visiting the store with the lowest prices is not feasible, shoppers can order items online for no extra charge. However, ordering from brick-and-mortar stores—physically or online—is not always the best option. Websites such as Amazon and eBay have millions of items from multiple sellers. Sellers will compete with each other for the lowest price, often providing shoppers with a price lower than those of larger stores. Regardless of how and where you purchase your items, taking time to shop around is a wise
This implies that the consumer would have to be compensated, or paid, to even consider consuming a certain good.
One of the constants of currency is that it is constantly changing. Sometimes these changes are for the worse, and sometimes they are for the better. Changes in currency can cause prosperity or famine. Currency is reaching another stage of development due to the introduction of computer technology. Virtual currency has become a possibility for the future, and bitcoin is exploring that new idea. Bitcoin is a virtual currency that has the potential to be the future of currency and comes with both advancements and detriments.
To some, this prospect may seem daunting. However, given the major advantages of electronic money over outmoded paper counterpart, society as a whole should embrace the upcoming era of digital money. Digital money is undeniably convenient; anyone who has used a credit or debit card understands this. However, the era of digital money is only beginning; rapid technological advances will continue to make paper money a remnant of the past. Several innovations are already lessening the burden in your wallet.
For instance they can purchase anything at any point of time without going out to any physical store; they can compare the prices of the product from different websites and can purchase from the site where they are getting cheaper; it also saves time; customers can also avoid pressure when having a face to face interaction with the salesperson etc. We can summarize these factors into 4 categories:
Firstly, an insight into crypto-currencies, what they are and how they can benefit the worlds economy. A crypto-currency is ‘digital medium of exchange’(RhettandLink) - managed through extensive encryption techniques known as cryptography. Comparable with fiat money, no group or individual can stunt, increase or abuse the production of crypto-currencies. 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.