Introduction
Four years ago, the idea of buying a pizza with a digital currency was a foreign concept. Most people hadn’t heard of Bitcoin, a mysterious digital currency that cropped up in 2009, created by the pseudonymous “Satoshi Nakamoto.” Today, almost 13 million bitcoins exist in circulation, valued at approximately $8 billion USD (1 BTC = approximately $600 USD) [1]. With the surge of popularity in the product, several spin-offs have been created, namely “Ripple” and “Dogecoin.” What do Bitcoin, Ripple, and Dogecoin have in common? They are all classified as a “cryptocurrency,” : a medium of exchange by which principles of cryptography are used to create a distributed and decentralized economy [2]. Bitcoin was the first cryptocurrency to be traded, and thus has the largest following and valuation.
Where The Value Comes From
While buying a pizza with bitcoins seems outlandish now, it was one of the first transactions ever to utilize this newfound cryptocurrency. On May 22, 2010, an individual paid 10,000 BTC for approximately $25 worth of pizza [3]. At that time, 10,000 BTC was valued pretty low. However, at the time of writing, 10,000 BTC translates to roughly $6 million USD [1]. See figure 2 for a graphical representation of this rapid growth. How could something with no central bank backing it suddenly have so much value?
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 ...
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...s changed drastically as our society becomes increasingly reliant on technology. Most of our money isn’t tangible – it’s stored in a database somewhere signifying debit or credit. Cryptocurrencies like Bitcoin take that idea a step further, and remove the middleman. Without the middleman, transactions are more secure, and no one takes a cut of your transaction. Regardless of the future of Bitcoin, cryptocurrencies seem like they are here to stay. However, for new cryptocurrencies to emerge and existing ones to remain popular, it is clear that they need to be mathematically complex to subvert fraud and hacking. They must be easy for consumers to understand, but also advanced enough to remain decentralized and preserve anonymity. These concepts are what have helped Bitcoin become so popular, and are tantamount in maintaining trust from both merchants and consumers.
The coins made in gold, silver and bronze were traded during Roman Empire and the shortage of coins created a barrier for money circulation. However with the establishment of paper money, a sophisticated banking, global clearing system and electronic money, the global financial system evolved with a worldwide framework of legal agreements. In the Global Financial market, foreign currencies issued by the world, countries are traded by the buyers and sellers using currency exchange rates. Now a day, it is very common practices of companies in one country to raise capital in a foreign country by listing their stocks on major foreign exchanges given the growth of equity markets are becoming more globalized (SNHU, 2015).
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.
In the present day, the world's economy is ever-changing and adjusting. Many different reasons control the reasons for this. The future of currency is something that can only be predicted and is not guaranteed. However, there are many determing factors behind the changes that can take place. Asia and North America are two continents that have economies that have recently changed or are in the midst of change.
“The Economist Explains, How Does Bitcoin Work?” The Economist (2013): n. pag. Web. 08 Apr. 2014.
The documentary Banking on Bitcoin from director Chris Cannucciari was a documentary released in 2016. Throughout this documentary Cannucciari asserts that the cryptocurrency Bitcoin is the future. Using Bitcoin experts and enthusiasts, this documentary is working to persuade people that Bitcoins peer to peer non-centralized system is the future and should be used over traditional banking methods. The targeted audience for this documentary is businesses, government officials, and anyone interested in the Bitcoin technology. The tone of this documentary is ardent while also informative.
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.
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.
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 recent times, the company Ripple and its crypto-token XRP have been spread far and wide around the monstrous void that is the internet. Via social media sites, YouTube videos, blogs, news headlines, and more XRP as almost become a household name. As a result of this widespread growth in popularity, masses of people have become obsessed with “Ripple” and want to know “how to purchase XRP” and “what the price of XRP amount to by year’s end”. With so much being said and so many people interested it is highly beneficial to inform the general public on what Ripple actually is and the precise function of XRP.
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.
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...
A cashless society will further improve the globalisation that characterise our present time. The computerised systems can be used to decrease the quantity of paper trail therefore substituting paper cash with cashless credits or electronic money transfers. However, in a cashless economy, this will change with certain crimes almost eradicated. It will also be faster to generate electronic payments than cash as Near Field Communications (NFC) chips make their way into more payments cards and mobile handsets as well providing protection not applicable to purchases made using cash. This technology is simple with low power wireless link evolved from radio-frequency identification (RFID) tech that can transfer small amounts of data between two devices identifying us and our bank account to a computer. Another benefit of drawing nearer to a cashless society is that other companies are providing pioneering cash-free solutions to the payment related problems we come across. For example, WisePay, a provider of e-payments services, is deploying technologies that ensure parents no longer have to worry about sending their children to school with cash to pay for meals, excursions and other fees that will eliminate the likelihood of being caught short for cash or children misplacing money. The Government also has valuable explanations why they may deem to turn away from cash. Due the main factor of printing and distributing cash, not to mention ensuring the economy is free from forgeries which are all costly endeavours estimating that the cost to society of using cash is between 0.5 and 1.5% of GDP annually. In addition, there are many technological innovations that propose there is a real enthusiasm for an alternative to cash with the upsurge...
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, the seemingly innocuous mobile phone is actually playing an increasing role in facilitating monetary transactions, especially in Asia. Already, in Japan, large companies such as Coca-Cola have sanctioned vending machines that are not only compatible with common cell phones but also allow consumers to earn credits for using them (Kupetz). In this regard, the United States is strikingly behind the times when compared to other countries. Another new technology in the vein of mobile phones is no-contact cards. These innovative cards do not require a cashier to conduct a transaction; one simply holds a specia...