365 post and responses week 11
INeal
Responses.docx1 hour ago
Maria Delucas
Bitcoin
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Bitcoin is a cryptocurrency that was invented in 2008. Based on the article 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. It cuts out the intermediaries that could be the problem with other institutions. This creates a cheap and easy transaction that has no regulations. Essentially, “it’s an open source for the public, nobody owns or controls Bitcoin and everyone can take part” (Bitcoin). There is judgement on BITCOIN being used as illegal transactions, large amount of electricity used by miners, price volatility, and thefts from exchanges. Although Bitcoin is used for investments there’s has been regulatory agencies that have issue an alert to investors about bitcoin (Wikipedia). The U.S Securities and Exchange Commission warned Bitcoin investments might have a high rate of fraud, and investors could be solicited on social media sites (Wikipedia).
While Bitcoin can eliminate intermediaries there’s cons when it comes to international business. According to the article American Express, Bitcoin is not yet widely accepted in many countries, and in some countries its use is illegal. Some businesses can accept international payments in bitcoin from their customers, however there’s no guarantee that customers will be able to use bitcoin (American Express). If Bitcoin is accepted there’s the risk of exchange rate showing high volatile meaning the exchange rate can be different from the exchange rate at which the recipient converts bitcoin to currency. Using bitcoin can cause disruptions with trade finance, since Bitcoin works on a pre-funded basis (American Express). This can result in both side of the transactions to incur the FX risk since there’s no Financial Institution that bears risk. While Bitcoin has some benefits, it still becomes a risky option that can affect business internationally if they are not utilizing information appropriate. Bitcoin is a risky transaction since there no policies and regulation protecting both sides of the transaction. Overall, the benefits don’t outweigh the cons of Bitcoin.
https://en.wikipedia.org/wiki/Bitcoin
https://www.americanexpress.com/us/foreign-exchange/articles/bitcoin-a-part-of-the-international-payments-landscape/
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Johnathan Berghorst
Bitcoin
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Bitcoin is a new currency that is gaining more popularity among people for international business use. The advantages for Bitcoin are that there is no middleman that takes place during the transactions of currency. Therefore it can be a currency that can be used all over the world. The transactions are secure and efficient in conducting transactions. The disadvantages that come with Bitcoin is the struggle to regulate the currency. With currency the sovereign governments are able to regulate the currency and make sure the currency is not fuluxuated between countries. With Bitcoin it becomes much harder to regulate because there is not one government which regulates the currency or even each country regulating their own currencies. Also many countries do not accept Bitcoin and in fact it is illegal to use Bitcoin in many countries. This creates many problems because transactions will not always be successful between countries. Also the elimination of banks could cause chaos and problems with inflation and the trustworthiness of the transfer of monies.
https://www.americanexpress.com/us/foreign-exchange/articles/bitcoin-a-part-of-the-international-payments-landscape/
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