Economic Impact Of Bitcoin

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Bitcoin
A new form of currency has existed for quite some time now called cryptocurrency. The most typical cryptocurrency is Bitcoin; it processes transactions or store funds in network software, not rely on a central server.
Here is the graph of the value of Bitcoin since its creation, we define the value is globe Bitcoin price index(GBX) – Bitcoin(BTC) to United States Dollar(USD). (source from Bitcoin Average) (source from Bitcoin Average)
From the picture, recent years the value of bitcoin has begun to skyrocket, from 2010 to 2017, it increased by more than 80,000 times. There is some analyzation about the reason of sharply rise.
Bitcoin's production costs increase year by year. Mining …show more content…

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.
Second, the impact on the financial system. Bitcoin issuance and operation "decentralized", will challenge the bank's intermediary status. The value of account management, asset management and wealth management in the banking business will gradually decrease. There is no transaction fee for Bitcoin, that will also reduce the amount of remittance from the …show more content…

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

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