BITCOIN AS WORLD CURRENCY 1

Impact of Bitcoin as World Currency

Besner M. BugnaandNathaniel Rhamzel J. Cruz, ABM-11-B

Senior High School Department

Iloilo National High School

Presented to:

Eric B. Ayuyon

Subject Instructor

English for Academic and Professional Purposes

August 2, 2019
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Abstract

Bitcoin is one of the crypto currencies that are decentralized digital currency without going to a

bank or any third-parties that can be sent from user to user without the importance given of other

intermediaries, made by an individual named “Satoshi Nakamoto” to transact payments without

fees conducted by government officials and bank regulations. Because of the intense inflation

rate during the year 2013 and 2014 the bitcoin became a trend and rumors spreads that one day

we will have a new world currency and it is in the technology, paper money will be changed into

digital money, which people prefer to choose is bitcoin. Researchers showed the possibilities if

what will happen if bitcoin as a world currency. The government will be against

cryptocurrencies due to the reason of using bitcoin illegally, main purpose of bitcoin is to

provide classified and free transaction globally. Problem that economies will collapse if further

using of digital currencies occur. Crypto currencies will likely to replace traditional flat

currencies; it would affect the global markets to interact with each other.

Key words: Cryptocurrency, Bitcoin, Currency

BITCOIN AS WORLD CURRENCY 3

Impact of Bitcoin as World Currency

Nathaniel Rhamzel J. Cruz and Besner M. Bugna

Bitcoin and crypto currencies are the new buzzword today, almost everywhere people

are talking about bitcoin, especially with the examples that someone has made millions in just

one or two years by smartly investing in bitcoins. Bitcoin was first introduced in 2008 by an

unknown individual named “Satoshi Nakamoto”. Using bitcoin is an interesting way to pay for a

transaction, but the problem is that it has also its negative aspects which these bitcoins may lead

new users a confusion in its usage, it lacks security, and it could be a challenge to the economy.

Aside for being a trend for today’s generation there are confusions towards the usage of

bitcoin due to its complication. People who have been just introduced to bitcoin will likely to

have a hard time to understand its role. Firstly, according to Frankenfield (2019), bitcoin is one

of the first digital currencies to use peer-to-peer technology to help instant payments.

Independent individuals and companies who runs the computation power and participates in the

Bitcoin network, also known as miners are inspired by compensations and transaction fees paid

in bitcoin. But if these bitcoins will serve as the world's currency, it would be harder for new

users, especially the older citizens who are used of the old payment system and the usage of

money currencies such as dollars, peso and etc.This confusion may lead to unpaid bills and a

great failure in the economy.

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Bitcoin without third-parties like a bank, or any intermediates will likely to decrease the

security level of transaction process because of regulations and policies that are not applicable to

it. So the securityand safety of using bitcoin is lower than doing a transaction in a bank.

Compared to current payment systems there are some failures of governance towards it.

No obligations available for payment processing and to prevent transactions to banned

countries which will lead to illegal affairs. Bitcoin imposes no restriction which conducts

unlawful transactions and might be harmful for the world. There is no possible way to get

back payment for a rejected or accidental purchase, whereas other payment scheme, such

as credit cards includes policy to get back money for some reasons. (Bohme et al., 2015)

Additionally. Kiran M and Stannett M (2014) states that bitcoin’s popularity has raised

a number of security and trust concerns among mainstream economists. Using bitcoin as a unit

of account in their financial systems, there is still a lack of understanding and a paucity of

models for studying its use, and the role Bitcoin might play in real physical economies.

One of the challenges of bitcoin is to confront the real world, it must need to go through

legalities set by the government, and bitcoin will have proper procedures to be recognized in the

public. It is a challenge to the economy because it could cause failures in some components as

financial companies requires adjustments to bitcoin network for constant surveillance.Otherwise

money laundering cases would be challenging for the governmentagencies because bitcoin is a

decentralized platform. Bitcoin should follow Bank SecrecyAct and create paper trail by

controlling identity documents and transaction records forprosecuting financial crimes (Mullan,

2014).
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To conclude, bitcoin as a world currency will have its own benefits toward others but it

will pose a great risk to the world, without the knowledge and proper studies of what bitcoin can

really do, it will result to failures and loss of money. Using it without the importance of banks or

any intermediates, governance and guidelines will not be available to help, and illegal transaction

will spread throughout. Economies will be challenged by users who don’t follow the rules and

regulation due to the privacy that covers their identities that makes it hard to trace them by

government agencies.
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References

Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics,

technology, and governance. Journal of Economic Perspectives. Retrieved from

https://pdfs.semanticscholar.org/07fb/51cf2d8d180c7db4d4615821473e233d02e1.pdf

Frankenfield, J. (2019). Bitcoin: Understanding Bitcoin. Retrieved from

https://www.investopedia.com/terms/b/bitcoin.asp

Kiran M and Stannett M (2014) Bitcoin Risk Analysis. Nemode.ac.uk: Research Councils UK.

Retrieved from https://bradscholars.brad.ac.uk/handle/10454/10717

Mullan, P. (2014). The Digital Currency Challenges. First edition. New York: Palgrave

Macmillan. Retrieved from

https://pdfs.semanticscholar.org/07fb/51cf2d8d180c7db4d4615821473e233d02e1.pdf