Bitcoin as a Currency: Bitcoin as a currency represents an innovation in the financial service industry and has tremendous potential of attracting economic benefits. Bitcoin is supported by the Bitcoin Foundation, which is a group of programmers, economists, and enthusiasts who are constantly making efforts to “standardize, protect and promote” Bitcoin. Many startup organizations have supported in favor of the bitcoin as a currency. Startups like BitPay are supporting the growing desire of creating simple platforms to allow online transactions in the form if bitcoins just like online payment mechanisms provided by PayPal and credit card firms. BitPay has “compiled a directory with more than 12,000 businesses and charities that accept Bitcoin using a service” [1]. The startups are playing a pivotal role in shaping the future of bitcoin by accelerating legitimate uses of currency in both the forms, online and offline. With increased popularity of bitcoins, more merchants are accepting Bitcoin and realizing the benefit over conventional transactions. Moreover, banks and money service businesses (MSB’s) such as Visa or American Express or Master Card charge transaction processing fees in the range of 2-5%. Bitcoins, on the other hand do not …show more content…
The definition of bitcoin as a commodity has made the definition of bitcoins broader. There would be direct implication of this statement and jurisdiction on the startup firms. The firms would have to first jump through a bunch of hoops before legally running a market of bitcoin derivatives for US users. Also, CFTC could keep a strict watch on fraudulent activities involving exchanging of bitcoins and not just bitcoin
Bitcoin is mathematically protected digital currency. It is maintained by a network of peers. It is a new form of exchange. Bitcoin consists of three main components: Digital signature which is used to authorize individual transactions and thus safeguard bit coins. Transaction chains which are used to store history of ownership and block chains which holds the order of transactions. Block chains are formed as a result of computational race. Bitcoin uses SHA-256 hashing function for formation of block chain. There is no centralized command for bitcoin. No person is responsible for bitcoin. Thise who transact using bitcoins, do not necessarily hold bitcoins, they just control the wallet storing bitcoins. Bitcoin can be the future of crypto if it continues to receive support from individuals and miners which are contributing to the success.
The real goal behind Congress’s anti-money laundering scheme is that of complete transparency. Congress wants to be informed. Currency reporting makes this information a federal interest. Information is the glue that holds the whole structure together. Any attempt to use cash or its equivalent in excess of $10,000 will immediately raise the suspicion of any legitimate bank or business. The bank or business will report this persons name, tax identification number, and other pertinent information to the IRS and the Treasury department. Since Bitcoin offers anonymity for its users, it is no surprise that it has been at the central of money laundering controversy.
Fiat currencies are starting to become outdated, and many are looking for a solution to the issues of credit cards. Since the dawn of the internet, people have been kicking around the idea of creating a digital currency. It hasn’t been until recently, however, that this dream has become a reality. It has only been 6 years since the release of the first cryptocurrency, Bitcoin,
2. Šurda, Peter. 2012. “Economics of Bitcoin: is Bitcoin an alternative to fiat currencies and gold?” WU Vienna University of Economics and Business.
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.
Transactions using Bitcoin are made with no middlemen, or in other words, no banks. There are no transaction fees and no need to give your real name. Bitcoins can be used to buy merchandise anonymously. In addition, international payments are easy and cheap because bitcoins are not tied to any country or subject to regulation. Small businesses may like them because there are no credit card fees. No one knows what will become of bitcoin. It is mostly unregulated, but that could change. Governments are concerned about taxation and their lack of control over the currency. In an the article “Now J.P. Morgan Weighs In on Bitcoin” by Neelabh Chaturvedi, J.P. Morgan 's head of foreign exchange strategy, John Normand, wrote a research note outlining his thoughts on the virtual currency, Bitcoin, and they are not completely supporting the Bitcoin. Normand’s note attempts to look at the potential use of Bitcoin as an alternative to existing currencies and payment systems but it doesn’t seem like a positive outcome. Although Normand sees the benefits of virtual currencies: predictable growth in money supply, verification of transactions to prevent fraud, and reduced transaction costs in some cases, he does not see bitcoin adequately fulfilling those responsibilities. “Since governments are quite unlikely to accord it the status of legal tender, bitcoin or other virtual currencies would not reach the scale and scope to render them worthwhile for widespread commerce, payments or investment.” Other drawbacks: A lack of oversight, as well as price volatility, lack of Bitcoins, and one of the most important: the issues of no legal recourse to getting your Bitcoin back in event of a
...s, Nathan. "Bitcoin: Virtual Money Created by CPU Cycles." Welcome to LWN.net. 10 Nov. 2010. Web. 28 Nov. 2011. .
... currency is in USD. If Bitcoin meets its expectations and pulls the rug from under the USD as a leading choice for a reserve currency this will severely affect the US economy and its status as one of the most powerful countries in the world.
Wallace, Benjamin. "The Rise and Fall of Bitcoin." Wired. 23 Nov 2011: n. page. Web. 7 Apr. 2014. .
Over the last ten years people in the United State and around the world have heavily relied more on their debit or credit cards to process transactions of their purchases. In the old days it used to be when you would get your paycheck on Friday and rush to the bank during your break or lunch in order to cash withdraw your funds or deposit them into your account. It used to be where you carry cash to buy groceries, pay bills, and go shopping. Now some people don’t even set foot inside their bank branch because they are paid using direct deposit or the funds are loaded into a debit card provided by their employer. Many employers from around the globe don’t even issue paper check anymore.
An experimental, decentralized digital currency that enables instant payment to anyone anywhere in the world. Bitcoin uses peer-to-peer technology to facilitate instant payments with no central authority; managing transactions and issuing money are carried out collectively by the network. Bitcoin is a type of alternative currency known as a crypto currency (digital medium of exchange), which uses cryptography for security, making it difficult to counterfeit.
Perhaps the most purposeful use for cryptocurrencies like Bitcoin is, like the name implies, as a virtual currency. At present, it seems that Bitcoin has the most potential of all the cryptocurrencie...
One of the most notable digital currencies in today’s online world is bitcoins. In the
The first Bitcoin Transaction was executed on 12/01/2009. It takes 5 years for a single bitcoin to go from $0 to $1,000.20000+ number of computer working at minning new bitcoins. There will be 21 million number of bitcoins that will be available. In 2012, an academic from the Carnegie Mellon CyLab and the Information Networking Institute estimated that 4.5 to 9% of all bitcoins transacted were for purchases of drugs at a single online market. In a separate case, escrow accounts with bitcoins belonging to patrons of a different black market were hacked in early 2014. So it’s up to us, the Bitcoiners of the world, to continue to build, include, educate, develop and create new relationships with each other while using this new amazing technology for the betterment of mankind
The use of credit and debit cards today are taking a tour in the sense that electronic cash is becoming more admissible as the world makes a switch towar...