Bitcoins the new currency?

Bitcoins the new currency?

Bitcoins is the first decentralised digital currency which allows you to do fast peer-to-peer transactions for the internet.  The technology operates with no central authority or banks, which makes the currency untraceable which seems useful in centre transactions. the payments can be made over mobile phone transactions and the fees are a lot lower and your account cannot be frozen as no banks is involved. the currency is run by the public in a process known mining Bitcoins and they are using their PC’s to verify transactions that Bitcoins made by other people and record on the system. An account is needed to use the currency and on your account, you will have balance showing the number of bitcoins you own.  At the start of 2017 a single bitcoin was worth $1000 US dollars and is now worth $14486.62 and the rapid increase also mean the currency attracts people wanting to make profit off the value increase. In this blog, I’m going to be going over whether the Bitcoin would be an effective currency in this day and age.

Is bitcoin sustainable enough to be are new currency? 

The main pull factor of using Bitcoin is that there are no banks involved so the fees are a lot lower, meaning that users get more for their money. It would be hard for people to get use to the fact that they wouldn’t be able to go to a physical bank to gain advise on their balance and especially the older generation that haven’t grown up with the internet. However big business corporations that are making large transaction lose a lot of it to the banks and this will further their profits. Another advantage of this would be that the transactions are untraceable meaning they can be kept private to the user. This would be good for people that want to keep some transaction secret as they don’t want other family members that have access to their bank account to know, as it could be a surprise or something they want to remain a secret. However, this cases the currency to be used in illegal ways, as authority can’t trace them making it easy to be used on the dark web and in money laundering. I think that if the currency was to take over the current one, then laws will be created so that the government would have control over Bitcoin making the transaction traceable.  If the currency was taken on board then there will be an increase in transactions meaning more miners will be needing to verify the transaction. This will create a new sector for jobs in the world helping the economy and as the unemployment rate is high in some parts of the world they will benefit off this massively. But I personal think that this would not be viable in most counties because they have not developed in the technology enough to have miners running. This means that the countries that need that the countries that need the jobs will not be able to access them. Furthermore, the bitcoin currency will shut down the banking industry, causing huge amount of people to become unemployed and this would cause government to be under a lot of pressure to source replacement employment. The bitcoin market is also very unsustainable as the market value fluctuates so frequently and this means there is a lack of security in the currency and this would put a lot of people off from using it. The electronic currency also requires a mobile phone to be used and in poverty areas around the world, a lot of people don’t mobile phone and this would isolate them from the currency. I like the idea of using bitcoins as I think that a lot of the transaction I make are already online, so the use of bitcoins would be quicker and more effective. I also hate carrying around cash with me because I always lose it and the coins just stack up and I never use them, but with bitcoin I would just need an app on my phone. To help get a better idea of weather changing to bitcoins would be a successful idea or not I’m going to do a weighted decision matrix and I’m going to compare it to the current currency

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Attributes	Score	Bitcoin	RAW	Current currency	RAW
Security	0.35	6	2.1	7	2.45
Sustainable	0.1	3	0.3	8	0.8
fees rate	0.1	8	0.8	3	0.3
efficiency	0.1	8	0.8	5	0.3
Accessibility	0.35	3	1.05	8	2.8
Total			5.05		6.65

                 

My weighted decision matrix the current currency came out as the better decision, but the difference wasn’t that big and with future innovation Bitcoins, they could be chance for the change.

Existential crisis Bitcoin faces  

Bitcoins was designed to be limited to 21 million coins so that no single institution could take control of the network, but with the increasing amount of transaction, this might have to be adjusted. Currently it works through share public ledger called the blockchain and it is filled with transaction verified by miners. But with the increasing amount of transaction they don’t have enough space to control all the transactions and this slows down the process of bitcoins. This could lead to slower transactions and high transaction fees for priority. I feel like if this becomes the case then bitcoin will lose the niche in the market they have compared to the current currency and this will make it harder to convince people to make the change. The only ways this problem can be solved is by either gain more blocks so more transaction can be store or invest in third party to process the transactions. I personally think that the investing into third party companies would be better because I like the fact that no single institution run Bitcoin and that its control by the public, as this means it’s going to be very hard for the company to become bankrupt and this makes the currency more secure as no big CEO can make a decision that runes the company. However, they would need to find a company that they trust, or they could be at risk of losing the untraceable transaction and this is a good USP. Whatever they decide to do the will have to make a rapid decision because the system will not be able to grow until its sorted and if this is to be accepted by business then they need to sort this out. 

Overall, I personal think that Bitcoins is not ready to take over the current currency because I feel that with the existential crises they are having and the illegal uses of the Bitcoin, it’s going to be hard for the government to accept it. Extending on this it going to be hard for the government to accept a currency that they have no control over or be able to review transactions. If I was bitcoin then I would invest in innovating the system, so I can handle more users and try and find a way to remove the illegal uses. I feel like they will also have to wait until the world is developed enough so that everyone has access to their balance. But in the future, I feel like Bitcoin could be suited as a better currency, when technology has developed more.