Bitcoin Digital Currency and the Block Chain Technology
More Than Flash in the Pan – Say Good-Bye to Fiat Money?
AbstractThe term “Bitcoin” conjures up a variety of associations, such as gamers in dark basements, technology enthusiasts in the San Francisco Bay Area, and deceitful, yet highly persuasive “businessmen” involved in Ponzi schemes. Although there is a sense of skepticism surrounding this novel technology, Bitcoin has overcome many negative stereotypes to revolutionize the monetary system. Big names like the New York Stock Exchange and Goldman Sachs have recognized and praised the technology, and an increasing number of businesses like Tesla and Overstock.com are accepting bitcoin. Influential players internationally are endorsing Bitcoin, which validates the notion that Bitcoin—or at least the technology behind it—is not going away any time soon. Unlike the U.S. dollar and most other forms of legal tender, Bitcoin is a decentralized entity that removes the middleman from the equation. Instead of being a part of a system that is often tarnished by greed and human manipulation, Bitcoin is governed by mathematics and encryption processes. Admittedly, there are several issues with Bitcoin, such as its vulnerability to theft and fraud; however, there are many advantages to this currency. A more modern and possibly securer method of payment, Bitcoin is quicker and more economic than the archaic Visa and MasterCard, which were founded in the 1950s and 1960s, respectively, and haven’t been updated since. While Bitcoin will not supplant the U.S. dollar due to an assortment of challenges, Bitcoin holds promise for the future of finance and consumerism. The Bitcoin technology of a block chain has already mobilized many financial institutions to embrace the emerging technology by piloting Bitcoin projects. It is not unrealistic to assume that there is a high potential for a system similar to Bitcoin to replace traditional fiat currency.
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