I have selected as my topic the underlying technology that enables Bitcoin. Per the website Coindesk in their article What is Bitcoin? (Coindesk, n.d.)
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by people…
…bitcoin’s most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. This… means that a large bank can’t control their money.
Bitcoin is in and of itself a fascinating model that moves societies towards a more globalized system of finance by decentralizing the operation of financial transactions. No longer
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The currency is stable with respect to inflation, it requires no exchange so there is no loss of value attributable to an exchange rate when transactions cross international borders.
The downside is that there is also no authority to appeal to should a transaction go wrong; no way of insuring your currency should something in the network fail. Even something as minor as a hard drive crashing on your personal laptop can, if not properly managed, irrevocably devastate personal wealth. Lose your digital wallet and you are out of luck. It’s anonymity has also, in some cases, proved to be a weakness that has been exploited by some pretty nefarious characters.
Bitcoin transactions, and the accounting of those transactions, occur over a worldwide network that by their very nature empower the individual over the state; it is globalization in its finest hour. With such a groundbreaking, disruptive technology as this the effects on the Globalized society of Bitcoin, and even Society itself, should be similarly astounding and paradigm
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If you’ve heard of Bitcoin at all you’re still kind of a rarity. Bitcoin made a huge splash by being involved tangentially in the Silk Road Dark Web scandal (Salon.com, May 2015.) as the currency used by the website that sold illegal drugs veiling the users internet presence through a program developed by Naval Intelligence called Tor. Between Tor and Bitcoin users of the Silk Road website were at liberty to transact in complete anonymity.
Then, too, there are the endless speculation scandals, and wild market fluctuations and scandals. MTGox, originally a gaming company, somehow managed to misappropriate $474,000,000 worth of Bitcoin (TheGuardian.Com, Feb. 2014). It suffices to say the kinks of the digital currency market place have yet to be completely worked out.
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
to many people because the bank took over their life. ?The bank is something more than,it?s the
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. .
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.
Imagine a world where there are no banks or even a need for wallets. This may sound like a nice freedom at first until illegal activities sky rocket; including the drug and sex trade. The economy will crash and millions of people will be left high and dry with a worthless currency. This type of chaos will not only devastate the United States but will also be seen world wide. With the way technology has been advancing this could be a very plausible future, thanks to Bitcoins. Bitcoins are a new form of digital currency in which the consumer uses and stores all of their money on a computer. This allows for quick trade, not only within your own country but others as well (Ethley par. 2-4). Although there may seem to be great benefits that Bitcoins offer, they are actually more damaging then beneficial. Bitcoin use will have a huge negative effect on the economy, they are filled with security issues, and support criminal activity due to their anonymous nature.
“The Economist Explains, How Does Bitcoin Work?” The Economist (2013): n. pag. Web. 08 Apr. 2014.
The article ‘Minting Pure Reason’ written by Jyotirmoy Bhattacharya concentrates on the mechanism of bitcoins, security concerns while trading using bitcoins and pros and cons of using bitcoins as a currency. The author also questions whether bitcoins, in future can replace actual currencies (referred to as ‘little pieces of coloured paper’ in the article).
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 researches around the world.
But Bitcoin (capitalized as a concept, lowercased when referring to units of the currency, according to American Banker) is another animal entirely. It is the first and most famous of a large and growing family of so-called “cryptocurrencies.” Others include Litecoin, Feathercoin, Songcoin (“designed for The Music Industry”), Auroracoin (Iceland only) and Dogecoin (“the fun cryptocurrency”)—but Bitcoin is by far the largest. Its origin is traced to a 2008 paper written by the pseudonymous Satoshi Nakamoto. Newsweek recently claimed to have located the real one, but he promptly denied it, so the whole thing remains quite mysterious.
To put it simply, the exchange rate is a price. As with any other market, price is determined by supply and demand. Whenever they are not equivalent, the exchange rate would change. However, the reality comes to be far more complicated.
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.
The term ‘Bitcoin’ was first described in 1998 by Mr. Wei Dai on a mailing list called as “Cypherpunks” as a crypto-currency. He suggested an idea of a new form of money that uses the language of cryptography of computer science to control its creation & transactions virtually without any prior central authority.
...society, I will say that living in a cashless society is the way to go. Let work together to make this future dream a reality so that we can be proficient, competent, and capable in abating the crime in our society.
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.
In conclusion a cashless society seems positive and quite close that we actually think, but the main issues of these opportunities will solely depend on whether the benefits would outweigh the disadvantages. We can already see that many people agree with the government on the cashless economy but on the other hand other people such as Christians will not probably accept this as a norm. It is vital to understand if society moves to a cash free economy, the benefits must distinctively overshadow in the end. It appears that much has been done in terms of the awareness of a cashless society as technology advances in progression with the use of electronic devices and system without the exchange of anything tangible. However