Analysis of Bitcoin as a Worldwide Currency

Bitcoin, a cryptocurrency, has been the topic of many debates since its conception, on whether it should be considered as a viable worldwide currency for international trade. Bitcoin is a type of currency known as cryptocurrency; it is an all virtual currency that can be used at some online shops and to pay bills from a few different companies. Bitcoin should not be consider a viable worldwide currency for international trade, with its lack of a standard to back it up, whether it would have been by gold or silver.

The non-supporters, of using the Bitcoin as a worldwide currency, argue against the Bitcoin by saying the currency is not very stable. In Christopher Matthews’ 2014 Time Magazine article, he states, “On December 6^th and 7^th of last year, the value of one Bitcoin fell from $1200 to $600 in the course of 48 hours. The non-supporter of the Bitcoin currency would use this example of a value drop to deface the value of the Bitcoin, because if a company were to store all of its wealth in the bitcoin currency and the currency had another drop like that forty-eight hour period in December of 2013, the company could face bankruptcy as stated by Christopher Matthews in his 2014 Time Magazine article. (Matthews, 2014, Paragraph 6) Most people seem to find the currency as more of gambling or the stock market then a currency to use for shopping, because of its spontaneous drop and rises of value. Besides the lack of stability of value in Bitcoins, non-supporters of the cryptocurrency argue that the currency is not protected well, according to Erin Negley, Hackers are a problem when it comes to the Bitcoin system; he feels hardly anything was done when hackers hacked into a Bitcoin Market and stole billons of the cryptocurrency. Non-Supporters of the Bitcoin system feel there is a lack of traceable information, so it could be used to act out acts of terror by terrorist.

One person who is intrigue with the use of Bitcoin, Judy Walker, says some people feel Bitcoins are a lot safer than credit or debit cards because there is a lot less personal information stored in the records for Bitcoin accounts. Another reason supporters feel that Bitcoins should be more widely used as a worldwide currency is that international transaction, such as sending money to someone in another country, in their opinion is a lot easier and faster using Bitcoins over transferring country by country currency that would have to be transferred into a different currency and cause fees to be charged. Judy Walker is intrigued by the Bitcoin, but she says she would rather stay with the dollar for now. Marc Andreessen, a supporter of Bitcoins, states in his 2014 New York Times article that he feels the Bitcoin is a lot more consumer friendly because of the lack of fees for transfers, that banks would have charged the consumer. He also states in the 2014 New York Times article, He feels the use of Bitcoin would bring underdeveloped countries into the modern world when it comes to economical standards set by the first world countries. He also thinks that Bitcoins could help the “underbanked” citizens in the United States by having lower fees then the conventional banking systems offer. Andressen later states his opinion on an issue that the non-supporters of Bitcoin express, “Finally, I’d like to address the claim made by some critics that Bitcoin is a haven for bad behavior, for criminals and terrorists to transfer money anonymously with impunity. This is a myth, fostered mostly by sensationalistic press coverage and an incomplete understanding of the technology. Much like email, which is quite traceable, Bitcoin is pseudonymous, not anonymous. Further, every transaction in the Bitcoin network is tracked and logged forever in the Bitcoin blockchain, or permanent record, available for all to see. As a result, Bitcoin is considerably easier for law enforcement to trace than cash, gold or diamonds.”(Andressen, paragraph 31)

There are many different points of views when it comes to the Bitcoin system being used as a worldwide currency. The non-supporters, who feel it should not be used as a worldwide currency, state that the system is not very reliable when it comes to value, and the system is not very secured as nothing was done when billons of Bitcoins were stolen from a Bitcoin market. The supporters, who feel the Bitcoin should be used as a worldwide currency, state that the system is more secure because it does not require information about the consumer to be release to the buyer as that of a debit or credit card would. The supporters also feel that the Bitcoin would make international trading easier, making it easier to send money to family members back in another country, and would help the “underbanked” citizens of the United States by having lower fees than that of a conventional banking system. The Bitcoin system is a system that does not have a standard to back it up, the value increases and decreases rapidly; therefore the system should not be used for a worldwide currency.

Annotated Bibliography

Andreessen, Marc. “Why Bitcoin Matters.” New York Times, January 21, 2014, www.nytimes.com. Andreessen discusses the history of the bitcoin from conception to present. The article includes information on what a bitcoin is and how the currency is valued. He gives facts, with information to back those facts up. An obvious plus of this article is that, the author uses both arguments for and against the use of bitcoins virtual cryptocurrency as a worldwide currency; he does use expressive words when discussing the opinions of both sides. Because of the use of opinions in this article, care would be needed to stay unbiased when taking things from this source. This source would be overall an okay source to use for a research paper.

CHAFKIN, MAX. “CAN BITCOIN CLEAN UP ITS ACT? (Cover Story).” Details 33.4 (2015): 94. MasterFILE Complete. Web. 23 Mar. 2015. This article is on the virtual cryptocurrency, called Bitcoin. The article goes over the beginnings of the international conference series Coin Congress, the assistance for finances offered by Crypto Currency Partners for bitcoins startup, and plans of hackers. He goes over how the leaders of the bitcoin movement are now being shut out by the elite member of American Society, where at the beginning it was mostly used by hackers, drug dealers, and illegal arms traffickers. This article is okay to use, but the writer of a research paper would need to be carefully when using direct quotes from the article.

Matthews, Christopher. “Why Economists Are Right to Hate on Bitcoin.” Time, January 3, 2014, www.time.com. This article is based around the cons of using Bitcoins as a currency. The author uses financial records and his background in the financial world to show his statements are able to be backed up. He states that businesses would not want to use the bitcoin virtual currency because the currency is not very stable. The currency value dropped 600 dollars in the matter of two days which would have caused any businesses to be on the verge of financial collapse if they had store their revenues in bitcoins. He does state the opposite sides opinions and answers them with his own response. The author does a good job at stating facts and when he says his opinion it is quite obvious that it is an opinion. I believe if the writer of the research paper is careful this would be a good source to use for the research paper.

Negley, Erin. “Bitcoin basics.” Reading Eagle (PA) 01 June 2014: Points of View Reference Center. Web. 23 Mar. 2015. The author explains that bitcoins are a cryptocurrency. He provides an overview of the mining system used for bitcoins. He states that little is done when hackers hack the system, taking billions of the virtual currency known as bitcoins. He provides an overview of the markets used to exchange the cryptocurrency. The article provides both the benefits, that those who agree with the bitcoin virtual currency system uses to support their belief, and the drawbacks, that those who disagree with the bitcoin virtual currency system uses to support their beliefs. The article provides information about where you can use the bitcoins, both in online stores and brick and mortar businesses. He goes over the potential that bitcoins have. He uses very little expressive language in the parts of his article consisting of pure facts, but there are spots where he uses people opinions and those have expressive language in those opinions. He uses facts and opinions used by both sides, those who agree and disagree with the bitcoin system, this would be a great source to use for a research paper.

Walker, Judy. “Bitcoins: The Future Of Money?.” Faces 31.6 (2015): 20. MasterFILE Complete. Web. 23 Mar. 2015. The author provides information on bitcoins, and she mentions that bitcoin are a form of money used on online shopping. She later states that bitcoins can be used to exchange for goods and services also at brick and mortar business in everyday life. He also states that some consumers feel better about using bitcoins over credit cards and debit cards, because little information is needed about the consumer. The use of bitcoins also makes international trading easier. The author uses more facts than opinions, but states opinions supporting bitcoins as a virtual currency are stated. A drawback of this source is the lack of opposing views, the author states those opinion that only agree with the use of bitcoin virtual cryptocurrency. This could be a source to use for a paper, however care would be needed to make sure the use of opinions in this article are not transferred to the research paper, as a fact because this would be bias.