In this essay I will talking about how cryptocurrencies, such as Ethereum, Litecoin and especially how Bitcoin has changed the US and world economy. I will be briefly discussing the good, the bad and the in between of the effect that Bitcoin has had previously and what cryptocurrencies will become in the next few years.
So you might be thinking, what is this new wave of cryptocurrency? And why is it important? The definition of cryptocurrency is any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions. (Merriam-Webster Dictionary). All these crypto transactions take place on a central database called Blockchain, which keeps all purchases in a public and chronological order.
Bitcoin was one the first successful cryptocurrency ever created, made by man named Satoshi Nakamoto in 2009. However On August 18th, 2008 the domain name Bitcoin was registered and on October a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a crypto mailing list(Anh, L. H. 2018). Since its origins, Bitcoin hit an all time high of almost $20,000 at the end of 2017 but has since dropped to the low $3,000’s.
Theres many pros and many cons to Bitcoin and cryptocurrency. One downside for the government and our economy is that cryptocurrency eliminates all needs for any bank, credit unions or any financial institutions. This ends up cutting jobs jobs in the banking industry, but also creating more markets with crypto leading the way to bigger, better and brighter ideas. With that being said, cryptocurrency is a thing of its own therefore it is extremely easy to get out of paying taxes and it completely separates you from dealing with any US sponsored currency, being able to make international purchases much easier and not having tariffs on them. As stated earlier, cryptocurrency really throws a wrench into taxation. And companies are currently seeking to provide accounting applications that implement this new wave of technology.
Cryptocurrency cannot be traced therefore can be used in things such as the “Dark Web” and the “Black Market” They become very dangerous and more prominent because the buyer and seller cannot be tracked. The Dark Web is the section of the web that is not accessible through the search engine.(Yogesh Jain, 2018) On the Dark Web you can find assassins, illegal weapons, drugs and many other illegal things, which makes this a huge downside. The FBI has even had to get involved with some situations and sometimes come up empty because of the non-traceable features.
Over 1.7 billion people worldwide still don’t have access to a bank account (N.M, 2018). With that being said, cryptocurrency has really changed international buying and selling as we know it. Bitcoin has provided many opportunities for people to interact with the international market. This is extremely helpful for people who migrate to other countries for jobs and send money back to their families. A lot of times they have to pay large sums of money for them to be able to transfer the money internationally, while crypto allows them to do it all for free.
As previously stated before, Bitcoin and other cryptocurrencies can be used for as much bad, as good. There’s many countries that accept this new wave with open arms , while there are still others including Bolivia, Columbia and Ecuador (P.B, 2018) that have voted to reject and ban them in their country. Now there is obvious reasons for this including the amount of drugs and other illegal crimes in their country. Russia still hasn’t accepted crypto with open arms, because while Bitcoin isn’t regulated there, it is illegal to use crypto as a form of payment. China is in the same boat and is extremely against the idea of crypto, especially because it is so hard to regulate.
In conclusion, I personally think that Bitcoin and other cryptocurrencies are a good factor on the economy as a whole. While it does exclude the middle man such as banks and other financial institutions, crypto also creates many other jobs that can be easily adaptable and made the “new normal”. With that being said, there can be many evil things done with these online currencies and I would like to see how these companies would fix this problem to cut down on the amount of “Dark Web” use.
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