365 post and responses week 11
INeal
MGT365responses2.docxMGT 365 responses
McKenzie Herman
Bitcoin is a new currency that was made or created by an anonymous person. These are transactions that are made with no banks and can be used for certain expenses such as booking hotels. The main craze for Bitcoin is how rich you can get from just simply trading. Bitcoin has increase immensely in 2017 and is still rising. Having this service, can be used for buying merchandise and the international prices are cheap. A lot of people usually buy these Bitcoins because they are a good investment and some small businesses buy them because there are no credit card fees. Buying them for a good investment usually are people who just watch them and wait for the value to go up or down. Since Bitcoin is so cheap, I believe that it can this can lead to issues. For one, Bitcoin cannot be traced which can lead down a dark hole. Not being able to be traced can lead to the Dark Web which is a big con in this. This is all a big risk on Bitcoin and can lead to more troubles in the future. But one good thing about Bitcoin is that it has opened the market to many global companies. Bitcoin uses on currency which is a plus because it is instant and can lower taxes. Bitcoin is a good thing for international business and looks like it should be staying around for a little longer.
https://money.cnn.com/infographic/technology/what-is-bitcoin/index.html
https://en.wikipedia.org/wiki/Bitcoin
https://www.newgenapps.com/blog/impact-of-bitcoins-on-the-economy-banks-finance/
Veronica Yacks
Bitcoin is a form of cryptocurrency that was invented in 2008. Transactions with Bitcoin are made with no middlemen, meaning that no banks are involved. Along with this, international payments using Bitcoin are easy and cheap because they are not tied to any country or subject to regulation (Yellin, 2018). Bitcoin utilizes innovative technology and the currencies are secured using advanced cryptographic techniques (American Express). While Bitcoin is said to be much more secure, a lot of people have yet to believe it. While it is secure there are also some cons to this. Bitcoin is commonly used as a way to purchase something easily without it being traced. Meaning that if it was something you didn’t necessarily want people knowing you purchased, it could be made discreet through the use of Bitcoin. This brings out a lot of issues with things like the Dark Web where a lot of questionable transactions are made. Therefore, since Bitcoin isn’t regulated, it can also be risky.
Because of this, Bitcoin changes the currency risk in a lot of ways. It reduces the amount of accounts needed for payments by removing middlemen, as mentioned before. Along with this, it also makes transactions as a whole simpler which creates easier payments. It also reduces the credit risk of transactions because it requires the money to be in the “wallet” at the time of payment/purchase. Overall, though, I don’t think that Bitcoin is the best idea to use in international business quite yet. This is because not all countries accept Bitcoin as a method of payment (it is even illegal in some countries still) (Nesbitt, 2018). According to the American Express article, “although businesses may accept international payments in bitcoin from their customers, there is no guarantee that customers will be able or willing to use bitcoin” (American Express). Therefore, if a company is unable to operate entirely in Bitcoin, using Bitcoin for international payments then incurs FX risk at both ends of the transaction. This is because the sender must first exchange their conventional currency for Bitcoin and the receiver must then take that Bitcoin and exchange it for conventional currency. Since Bitcoin’s exchange rate is highly volatile, the exchange rate where the sender obtains Bitcoin could be much different than the exchange rate when the recipient coverts that same Bitcoin to currency (American Express). Bitcoin does have a lot of benefits, some of which I mentioned above. But overall it is still a risky option since it’s not accepted widely enough, and businesses should be careful when utilizing it in their operations.
Works Cited
https://money.cnn.com/infographic/technology/what-is-bitcoin/index.html
