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Bitcoin Cryptocurrency

In: Business and Management

Submitted By matamanimawo
Words 1838
Pages 8
Bitcoin Cryptocurrency Recently, notable interest in payment systems based on virtual currency such as Bitcoin has become widespread. According to Burt, Gilbert, and Blye (n.p), Bitcoin advocates were dealt a major blow in 2014 when the most active Bitcoin world exchange, Mt. Gox, was declared bankrupt, incurring approximately $473 million in losses. Following the Mt. Gox collapse, Bitcoin value fell to around $500 from a high of $1000. Despite this, interest in Bitcoins has remained surprisingly resilient (Trautman 23). This paper will explore the efforts aimed at developing a novel and improved digital exchange medium, its advantages, and disadvantages. The paper will also explore the regulatory environment around the currency, to understand the digital currency better.
Characteristics of Bitcoin Bitcoins were created in 2009 as a cryptocurrency, with the intention of making an electronic peer-to-peer system of payment with cryptographic proof (McMillan & Metz n.p). Peer-to-peer systems mean that no central authority regulates new money or tracks new transactions. Numerous features make this system different from payment systems such as M-Pesa or PayPal. First, this system supposedly eliminates the need for any financial intermediary such as banks or credit companies to handle payments (McMillan & Metz n.p). Next, the basic premise is that this system is irreversible and less expensive as compared as compared to other conventional banks as well as credit card transactions. Further, Bitcoin transactions are anonymous as only users authenticate transactions. Bitcoin is acquired through numerous processes, including accepting the currency as payment for purchases of goods and services, trading traditional currency, mining, or buying from an exchange (Keating 31). According to the author, Bitcoin transfers between people and companies are...

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