Bitcoin And Its Impact On The Economy

The Second Law of Thermodynamics (also called the Law of Entropy) states that, generally, the universe moves from order and structure to a state of disorder. What we witness around is staggering complexity. Complexity has found its way into economics too. Eric Beinhocker, the author of “The Origin of Wealth”, estimates that in New York City alone, there are some 10 billion SKUs, or distinct commodities, being traded in a day. This is why, when an invention as simple as bitcoins was created, it made the economy uneasy. Over the past years, there has been an increase in interst in the cryptocurrency system by financial institutions and governments. However, their position is typically stated by “I like blockchain but not bitcoin.”

Imagine a currency that can be sent around the globe instantly from one client to another, without any hefty transaction fees. Although, this achievement is seemingly impossible, Bitcoin, a form of digitalized monetary value, accomplishes just that. Until recently, money has always been perceived as a physical note or coin that can be used to make transactions. However, Bitcoin is basically an encrypted digital block that can be stored in an online wallet and securely stored, sent, and received via a special network on the Internet (Friedman). Programmed in 2009 by an anonymous group known as “Satoshi Nakomoto,” (Timpane), Bitcoin appeared on online exchanges as the world’s first decentralized virtual currency. It has been bought and sold

In December 2013, after a series of governments’ legislation was passed, the price of Bitcoin crashed. While many hoped for a revival, the prices continued to plummet until they reached low of $200. In one short year, the price had fallen to one-sixth of its previous high (“Complete Bitcoin’s Price Chart”). This fall proved what many thought; Bitcoin was a hoax.

Please complete an advanced written paper on Bitcoin. The length, subject, and stance you take on this is completely your prerogative.

The use of Cryptocurrency has become more prevalent across the globe. Regulation seems like the next logical step in evolution and legitimacy, but this will ultimately lead to large financial institutions and government establishing the standards and determining the value. At that stage cryptocurrency may still be categorized as a decentralized form of currency, but the behavior will be that of a centralized system overseen by the same institutions who govern our monetary systems today. Many people think of cryptocurrency as a new and innovative payment system, yet it’s much like forms of money that the world has seen in the past, before governments and central banks exerted their control. In many ways, cryptocurrency completes the cycle started when money began to take hold in the Renaissance, when value and control was not determined by any government but rather by the issuers of notes and the customers who used those notes. One of the most popular cryptocurrencies available is Bitcoin. Bitcoin is regulated differently in the People’s Republic of China (PRC), Canada, and the United States, and no country has currently backed Bitcoin. Launched in 2009, and founded by Satoshi

Around 1,200 years ago, the pound sterling was created. Serving Great Britain and its territories to this present day, it is one of the most traded currencies in the world. Some 1,000 years later, the dollar came in to existence followed by the Euro at the turn of the millennium. In 2008, a new paradigm, Bitcoin, reared its head into the world economy. Bitcoin sets itself apart from the aforementioned currencies because it doesn’t exist; it is one of many digital currencies, albeit the most popular by far. Bitcoin is a private, peer-to-peer cryptocurrency that is slowly gaining prominence. Sitting at over 16 million bitcoins in circulation, the question must be asked whether Bitcoin should be seriously considered as a viable currency as it

The first form of cyptocurrency, Bitcoins are the first type of digital currency that is both created and subsequently managed by cryptography, rather than a central authority (Kinsella 2013). The Bitcoin architecture was outlined in a research paper by Satoshi Nakamoto, which led to the creation of a decentralized network, allowing the peer-to-peer digital currency to be owned and traded (Smith 2013). After several years of development, Bitcoin was launched in 2009, and exists solely within the Block Chain (explained later).

Virtual currencies such as bitcoin are portrayed as an innovative design in the distribution of money throughout the world through the use of peer-to-peer transactions due to it being fraudulent and impossible to counterfeit. However, bitcoin holders are anonymous and could act in a similar way to black markets, their “bitwallet” is unregulated and untaxed. Using bitcoin as a currency also delves into the problem where users purchase illegal objects and substances anonymously.

Bitcoin (BTC), a cryptocurrency, is a type of digital currency which was introduced in 2009 by pseudonymous developer "Satoshi Nakamoto". Since then 12 million bitcoins have come into existence with a current market cap of around 8 billion USD [1]. The algorithm is designed as to allow only 21 million BTC to come into existence ever. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network [2]. Bitcoin is not the first attempt. But none have managed before to take off so dramatically and with such wide adoption to achieve escape velocity. The questions which are important now are how the bitcoin managed this success in

Nowadays, the Internet has implemented great impacts on people’s life, and it also has changed the business world significantly. In order for companies to cope up with the changing customer demands, they must adopt new technologies not only to support their business functions but also to reduce paper works, reduce costs, and provide better services. Bitcoin is a currency of the Internet, distributed, worldwide, decentralized digital money that be developed as a new payment method. In Australia, the regulator has defined Bitcoin as property instead of currency for accounting purposes (King, 2015 February). Although Bitcoins are not materially existed, it can be exchanged for goods and services at places that accept it, the same way you would give someone a dollar for a cookie.

Bitcoin is a new form of currency that is entirely digital with no central authority. It can be traded anywhere; it is accepted for all sorts of goods and services. There are online market places and exchanges to allow you to exchange Bitcoin for USD or other currencies. But with an entirely digital nature comes the potential for a very risky business. The currency, sites, and transactions all have the possibility of being hacked. Theft is still likely to occur with digital currencies. The way transactions are processed gives the currency an anonymous nature. This anonymity allows for it to be used in unethical and ultimately illegal ways. This paper shows both positive and negative sides of Bitcoin and demonstrates how Bitcoin can be a valid currency with better control.

Bitcoin; an online payment system introduced as open-source software in 2009, is the first decentralized crypto-currency to be fully implemented successfully. When buying something with a Bitcoin one simply transmits a symbolic token (much like paper currency), that is stamped with a unique number that transfers ownership to another person. Bitcoin is an emerging market of fresh customers who are searching for ways to spend their bitcoins. “Accepting a new payment method has often shown to be a clever practice for online businesses.”4 By accepting them, new customers will be attracted and give your business some new visibility.

I chose this question because of its potential in having a huge impact on the success or failure of Bitcoin in the near future. As mails have evolved to electronic mail, the world is slowly molding into a world of technology, currency along with it. Bitcoin is an innovative concept to modernizing currency, yet, like many digitalized technology, it also opens many doors to hackers.

The world is in a constant state of change, nothing stays the same forever, for something to last in the world it must be able to adapt. This affects most things, even currency is no exception there have been many ways to pay for things over the years whether it was a silver coin or a dollar bill the way people pay for things change. Now there is a new way to pay, but you can’t even touch this kind of currency, Bitcoin, and other virtual currencies. Will this new form of currency become used by everyone or will it die out like other virtual currencies, the future is unknown and time will only tell us what will happen.

To start off primarily, Bitcoin is a digital currency as opposed to physical currency that we’re accustomed to and use in our daily life. Straight off their site, Bitcoin is described as a pseudo-anonymous, P2P technology operating with no central authority or banks, it’s open-source, public, owned by no one and open for everybody to take part; but what does that all mean? “Bitcoin is the leader in a new generation of emerging currencies known as “cryptocurrencies” which aim to, among other things, facilitate the movement of money electronically while still maintaining a sense of privacy,” (Hobson)