Bitcoin is a form of digital payment system that uses encryption techniques to regulate the generation of currency units and verifying transfer of funds. The system, invented by Nakamoto Satoshi, operates independently without the establishment of a central bank. Creation and…
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Bitcoin system is entirely dependent on internet platforms, which are readily available across the globe because of the technological advancement (Rotman 1). Using Bitcoin, the average income earners can easily transact beyond border transactions without incurring extra costs in physically moving to those places. This essay examines the use of Bitcoin and money as applied in the current system.
Kudlow Larry downplays the rise in use of digital currency. He cites the rapid fluctuations in prices by hundreds of dollars in the space as a key challenge that emanates from digital currency use. He outlines an example of an individual who buys an item for $500 but after the retailer processes payment, the digital currency falls to $100 in value. He resolves that both sellers and buyers make associated losses because bitcoin is not a reliable medium of exchange with dependable store of value (Kudlow 1). On the contrary, money has a store of value. Its value does not fluctuate as rapidly and frequently as in the case of digital currency. Because Bitcoin has no store of value, economists prefer the money system to digital currency.
Digital money use has no border restrictions. Making cross-border transactions is easier and simpler than in the case of money. Money system is more reliable and regular fluctuations in prices do not affect it. Digital currency use will therefore not pose a significant effect on money use. The reason for this is that money system posses superior features like security and reliability that the digital currency system lacks.
There are viewpoint that the rising use of digital currency like bitcoin transactions will not pose a significant impact countries’ economic progress. According to Gaulio, bitcoin transactions are easily traceable to their initiators hence American government, for instance, will fully advocate its use. In a state controlled digital economy, the taxation units will
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(“Bitcoins vs Money Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
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(Bitcoins Vs Money Essay Example | Topics and Well Written Essays - 1000 Words)
“Bitcoins Vs Money Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/english/1681426-bitcoins-vs-money.
Name: Instructor: Course: Date: Why Use Bitcoins? Abstract A completely peer-to-peer version of electronic money without going through a financial institution, allows online payments to be sent directly from one party to another. The major rewards are lost if a third party is required to curb double-spending but still, digital signatures provide part of the solution.
Thus, it involves “turning dirty money into clean money”, “washing drug money”, and “disguising criminal money”. The concept of money laundering has evolved over the years and hence money legitimately earned but not disclosed through above means for avoidance purposes involves money laundering.
By lowering the discount rate, the Fed will decrease the money supply and vice versa. However, discount rates are used by the Fed for direct changes in the monetary policy rather than control the money supply. The discount rate is described as the interest rates charged on commercial banks borrow reserves by the Federal Reserve banks.
The high-powered money multiplier approach is an approach that considers the level of bank deposits by the private sector while determining money supply (Werner, 2005). According to this approach, the level of cash deposits held by the bank plays the major role in determining money supply.
All of these three demands are affected by the interest rate (Robert, p2, 2007). In addition to the level of interest the money demand is also influenced by the level of price, level of GDP and pace of financial innovation (Pedro Zhou, p50, 2005).
The Transactional demand is basically to hold money in a non interest bearing form with the intention to make day to day transactions (Robert, p2, 2007).
The 1990 convention was modeled on the forum of FATF developed by the G-7 countries, but over the years with increasing developments in the tools for fighting money laundering the convention has become increasingly inadequate.
The need for rectification has forced the member states into revisiting the convention and drawing up a protocol that would adapt the effective features of the 1990 convention combined with recent developments in line with current requirements of sophisticated technology and vulnerability of the non financial sector against money laundering.
It is hoped with a booming housing market, the mortgages will remain affordable. Often there were lax controls in the sale of mortgage products. Mortgage brokers got paid for selling a mortgage, so there was an incentive to sell mortgages even if they were too expensive and high chance of default (Mortgage Guide).
Use of plastic cards took a while in becoming popular though. It was during 1970 that credit card with a magnetic strip made an entry into the market place. Thereafter the plastic money started being a reliable alternative.
Seeing the trend of the day, we can very safely say that 'yes indeed the electronic money transfer will soon replace the paper and coin system'.
Using the wallet software, people can send or receive bitcoins. This system can be used without hassle on a computer, mobile or any electronic devices that can support web technology. Individuals purchase bitcoins through payment by online
Like money, these digital currencies can be used to purchase goods and services though they can be restricted in some communities. Some of the digital currencies including bitcoin have no central control point over
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