paper

Bitcoin currency

Bitcoin: a coin?

I. Introduction:

a. Different opinions about bitcoins:

Some people think that the bitcoin is new currency while bitcoin miners believe that bitcoin is a profitable investment.

b. People need accurate information about bitcoins:

Due to the lack of the information about bitcoins, people may have misconceptions about them and cause possible false use of bitcoins in the future, so it is worthwhile to educate people about bitcoins

II. Definition:

The definition of bitcoin

Bitcoin is an untraceable digital currency, and it charges relatively low transaction fees while trading with others. Gimigliano, (2016) defines bitcoin as “a virtual currency that may be traded on online exchanges for convectional currencies including the US dollar or used to purchase goods and services online”

III. How are bitcoins created?

The way to create bitcoin is to program the complex algorithm, and the final qualified outcome will receive bitcoins as the reward (Guttmann, 2014). 

IV. What can people use it for?

People are able to use bitcoins as a digital currency to make payments online. In addition, bitcoin has become a new investment because its value increases significantly over time. Watson, (2014) explains that “you may decide to send money through an internet service via email with a system like PayPal that connects to your bank account to pull some of those digital bits and send them to someone else.”

V. Current issues about bitcoin

a. Does the process of producing bitcoins consume significant energy?

Producing bitcoins will consume tremendous electricity and require many advanced electronic devices (Franco, 2015). For example, in U.S, the energy consumed is compared to the payment system like VISA. It was established that the energy consumed by bitcoin is equal to that of 50,000 U.S households.

b. Is the usage of bitcoins legal?

Since everyone has the ability to create bitcoins, bitcoin is hard to trace. Some people are using bitcoins in black market for illegal purposes (Guttmann, 2014). For example, bitcoins can be used in drugs buying, for tax evasion, sharing secrets, capital flight and for scamming among other illegal purposes.

c. What is the value of bitcoin?

Bitcoin is a digital currency which people have not set up a standard measurement of its value. Therefore, it keeps changing over time. Franco, (2015) explains that “if bitcoins are hoarded are excessively, this could lead to their being perceived as hard to get and thus losing their appeal as a medium of exchange”

VI. Future concerned about bitcoin

a. Will bitcoins be regulated by the government in the future?

Currently, there are no international laws or regulations about bitcoins. However, some counties, China, for example, already revoked the transactions of bitcoins.

b. Will bitcoin develop in the future?

Bitcoin, as a new digital currency, has potential ability for better use in the future.

VII. Conclusion.

Bitcoin is a type of new digital currency that draws people’s attention so that people should have basic knowledge about bitcoins. In addition, bitcoin is in the developing stage which may cause some negative effects such as the instability of the market. Regulations or rules should be applied so that people can get benefits from bitcoins.

References

Franco, P. (2015). Understanding bitcoin : cryptography, engineering and economics. Chichester, West Sussex: John Wiley & Sons.

Gimigliano, G. (Ed.). (2016). Bitcoin and Mobile Payments: Constructing a European Union Framework. Springer.

Guttmann, B. (2014). The Bitcoin Bible Gold Edition: All you need to know about bitcoins and more. BoD–Books on Demand.

Watson, K. (2014). How to Buy and Invest in Bitcoin, A Step-by-Step Guide for Beginners : Get started fast with real examples and experiences. Cork: BookBaby