Critical Thinking Assignment: Topic Argument Whether it is the mainstream media or the online community, cryptocurrencies, the new and emerging digital money transfer system, is gaining interest fast. One of the most popular cryptocurrency, Bitcoin, recently has been the subject to numerous criticism and negative speculation in the mainstream media due to the recent fall of Bitcoin’s largest currency exchange, Mt.Gox. However, despite negative media reports, Investing.com reported that Bitcoin prices have recently surged past $700 dollars, up 41% since the 25th of February of this year (Investing.com, 2014). Bitcoin’s rallying prices has shown that people have true faith in its future, and that cryptocurrencies in general, are here to stay and are the future of money exchange. Cryptocurrencies exist on a decentralized monetary system, meaning that there is no central authority, government, or institution that controls the flow of the currency (Quast, 2014). The main benefit of having a decentralized monetary system is the freedom of dismissing the need to rely upon a third party, such as a bank, for monetary transfers. Cryptocurrencies are stored on a user’s own computer, and uses a peer-to-peer system to verify transactions, allowing for faster and cheaper money transfers all around the world (Clark, 2013). Having a decentralized system also prevents the manipulation of money for political or institutional benefits, as the flow of money will be handled by an online network, as opposed to an institution. In addition, cryptocurrencies are not subject to inflation, as it will have a fixed rate of generation that slows down as quantities increase, and will stop the generation new currency once a capacity limit on the supply has bee... ... middle of paper ... ...d readers with the news of “the fall of Bitcoin’s largest currency exchange, Mt.Gox” as a contrary evidence to the claim. Moreover, this piece of news was widely popular in the mainstream media, thus it serves as an effective tool to be relatable to the reader and to generate interest among readers. Works Cited Critical Thinking Assignment: References Clark, J. (2013, March 5). Bitcoin: Decentralized Virtual Currency. Retrieved March 09, 2014, from Data Center Journal: http://www.datacenterjournal.com/it/bitcoin-decentralized-virtual-currency/ Investing.com. (2014, March 04). Bitcoin rallies above $700 as prices continue to rebound. Retrieved March 04, 2014, from investing.com: http://www.investing.com/news/forex-news/bitcoin-rallies-above-$700-as-prices-continue-to-rebound-270066 Quast, B. (2014). Bitcoin and Cryptocurrencies. The Graduate Institute Geneva, 1-4.
Many would say that Bitcoin is a revolutionary new currency, in fact, it is the first currency of its type. It is completely decentralized from governments, it is created as a payment for computer processing power and recording payments into a public ledger. This process is called “mining”. It allows users to process economic activity of the Bitcoin currency, when the currency’s transactions are processed, the computer that processed the transaction gets a tiny reward for its processing power. This is how new Bitcoins are created. To claim the reward, a special transaction called a coinbase is included in the processed payments, all Bitcoins in existence can be traced back to their original coinbase transaction. Right now the reward for adding a block is 25 Bitcoins, that number will be halved in 2017 to 12.5, and then will be halved again every 4 years. Eventually there will be no reward other than the transaction fee, this will occur around the year 2140. Payers have a large incentive to include a transaction fee because then their transaction is usually processed by other users more quickly. People processing have the option to choose whether to process transactions that include a transaction fee or just the standard reward. This is just a small outline of how Bitcoins work.
Bitcoin has been compared to the internet of the early 90’s by many people in that it has the potential to become a huge global peer to peer payment system allowing people to exchange currency value over the internet without a 3rd party bank. Much like the internet in its infancy was the basis for global commerce, Bitcoin has the potential to become a huge global payment network that operates outside of banks and government control.
While it’s still questionable if Bitcoin will ever succeed and become a mainstream currency, its blockchain technology has already sparked huge interest and is being used outside the realm of Bitcoin. With the blockchain anything of value can be transferred and saved on a private basis. Its complex algorithms and simple transparency make it nearly impossible to cheat the system, and consequently ensure trust between strangers.
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.
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.
Among end users of Bitcoin, there are problems that slows its adoption are that of usability and security. Another issue facing Bitcoin users is confidence, both among exchanges and transactions. Current Bitcoin exchanges are plagued with ponzzy schemes and compliance problems, making users wary of changing their money into Bitcoins. Due to an inefficient market, the price of the Bitcoin’ large price swings further eroding confidence in Bitcoin.
Goodale, Gloria. "Rise of Bitcoin: Is the digital currency a solution or a menace? (+video)." The Christian Science Monitor. The Christian Science Monitor, 23 Nov. 2013. Web. 25 Nov. 2013. .
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 researches around the world.
All of these issues with Bitcoin are real and need to be dealt with in some meaningful way if the legitimacy of this new currency is to be realized. However, as I stated at the beginning of this submission, I’m not as much interested in Bitcoin itself as I am in the underlying technology that makes Bitcoin possible. The truly revolutionary aspect of Bitcoin, aside from its sometimes successful, sometimes cute attempts to redefine money, is the distributed model of internet users that makes it run; the really interesting aspect of Bitcoin is the
Even though this is the first time of me going through this type of learning and thinking assessment, I do agree with all the three results. Each of them seems to depict my way of learning and thinking.
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. One of those phenomenons include the prosperous crypto currencies. A country where crypto-currencies have succeeded is both the United States and Japan; Bitcoin’s creator originated from Japan. These two countries possess the two largest crypto-currency exchanges, with Mt. Gox in Japan dealing over 70% of all Bitcoin transfers and exchanges. The btc-e is the American
Similar to our current market of fiat money, bitcoins are priced according to supply and demand, as well confidence in the value of bitcoin. If there were no merchants who accepted bitcoin, the value would plummet, regardless of how scarce the supply of bitcoins were. As more merchants began to accept bitcoin as a form of payment, the confidence in the currency followed, which thus sparked its rapid ...
Though there is recent contradiction of bankruptcy in bitcoin market, investors are looking to invest more & more in bitcoin.
The invention of money is perhaps one of the greatest achievements of human civilization. From the very beginning of society, people have used money to circumvent the difficulties of bartering and to foster trade and commerce. Since then, money has come a long way. No longer do we need to rely on silver coins, cocoa beans, or even anything of intrinsic value to conduct our business; today, we use paper currency, which is convenient and easy to carry around. But slowly, we are moving into the digital age of money, an age in which less of our money is actually tangible and more of it is just data on a computer server. 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.
3) Bitcoins are changing how we store and spend our own particular wealth. Since the presence of printed (and at last virtual) money, the world has given over the vitality of cash to a central mint and diverse banks. These banks print our virtual money, store our virtual money, move our virtual money, and charge us for their go between organizations.