1. try to understand the problem with the

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1. Executive SummaryBitcoin market capitalization has increased since June 2017 from 41 billion to 281 billion by December 2017. Recently, the rate of growth of market capitalization of bitcoin is impressive but also worrisome. Bitcoin would impact negatively to the global economy and to the society. Loss of value overnight, use of bitcoins for funding of illegal activities in deep web marketplace, anonymous user/merchant identity, regulation by an algorithm, deflating nature of bitcoin with fixed limit of the 21 million bitcoins issuance by 2140 and irreversible bitcoin transactions put the global economy and the whole society at risk. Third-party institutes should regulate the bitcoin currency and create policies to serve the underneath need that is not suffered and that lead to the creation of the bitcoin. These policies should be formed within the short time period to limit the market capitalization of bitcoins to minimize the impact on the global economy and society.2. Introduction”Money won’t create success, the freedom to make it will. – Nelson Mandela”This paper will try to understand the problem with the bitcoin and impact of cryptocurrencies on the society and the global economy that is the structural financial change that the bitcoin is pushing from present centralized regulated financial network to distributed financial network. There are symbolic, political and human resource implications of this problem that will be discussed. The paper will elaborate what bitcoin is, history of money as example to showcase the underneath need that lead to bitcoin, how bitcoin works, highlight the key indicator of bitcoin to demonstrate volatility of bitcoin and benchmark and valuation of bitcoin to understand the magnitude of impact, list some of the bitcoin theft to demonstrate security issues with bitcoin, barriers that bitcoin faces to become a mainstream currency, four frame analyses of bitcoin and recommendation that will minimize the risk that bitcoin possess for its user and global economy.3. Problem DescriptionBitcoinBitcoin is the name of the digital currency traded online on a digital money ecosystem. Unit of this digital currency is also called Bitcoins. Bitcoins are used to transfer value among the members in the bitcoin network. Bitcoin ecosystem is based on primarily on the internet, where its members communicate. There are other mediums apart from the internet, available to host bitcoin network. Bitcoins can be transferred among members over their chosen network to conduct similar transactions that members would perform with traditional currencies. Transactional activities could vary from selling goods, lending money (credit line), sending money to people or organisation. Bitcoins like traditional currencies can be traded for other currencies at specialized currency exchanges. Bitcoin is the most suitable and practical form of money available for the internet because it matches the properties of internet borderless and fast. Bitcoin, unlike the traditional currencies, is completely virtual. At present, there are no physical coins in circulation. Problem with the cryptocurrencies (the discussed example is bitcoin), is the structural financial change that the bitcoin is pushing from present centralized regulated financial network to distributed unregulated financial network. There are symbolic, political and human resource implication also with this problem. To understand that better, we need to look into the history of money and go deeper into the actual meaning money or unit of money i.e. currency holds that is the power that money resonate. Another aspect to understand the symbolic, political and human resource implication would be to the aspect of distributed unregulated financial network from the trust point of view.

Categories: Currency


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