feb 2015

FINANCE
Although some may focus on the fragility of
the Bitcoin, others acknowledge it as the first
decentralized digital currency that could be
the breakthrough for new innovations.
Money Talks
By Alexandria Ng
As America’s economy slowly begins to strengthen once again, a
new form of currency is introduced to the world: the Bitcoin. This
form of international currency, accessed via the Internet, allows
people to make online transactions without extra fees or attaching
their identities to their purchases. Without having to be tied down
to any specific currency, the Bitcoin can be used in almost every
country. Many people are buying Bitcoins, hoping that the value
will continue to increase in the future with fluctuating supply and
demand, depending on how widely the general public accepts it as
a new form of money.
While many merchants and businesses endorse Bitcoins because
of the advantage of transactions without a middleman, financial
institutions, such as banks, reject this new idea. These financial
organizations perceive the Bitcoin as a risk that may destroy the
entire existing financial system. The controversy surrounds the
idea that the Bitcoin is still a very abstract concept. The value of
the established currency today is tied to that nation’s economy,
and thus an exchange rate is established. However, the Bitcoin is
merely based off of the knowledge that they are hard to come by, or
difficult to be “mined,” as the method of obtaining them is called.
Additionally, the anonymity of it may lead to money laundering
or an increase in criminal activity that can’t be traced to its source.
“The general public is not ready for the Bitcoin yet because of the
concept itself, and the lack of understanding about the Bitcoin
system. We aren’t ready; not until the system is accepted by major
financial institutions,” stated Alfred Ng, a business intelligence
analyst.
Some countries, such as Bangladesh and Bolivia, have gone as far
as to make the online money illegal, fining or jailing citizens who
are found to be using the virtual currency in an attempt to evade
taxes. The ban on the Bitcoin is also fueled by the fear that its
lack of regulation by a specific entity will undermine the country’s
economy.
Although some may focus on the fragility of the Bitcoin, others
acknowledge it as the first decentralized digital currency that could
be the breakthrough for new innovations. Without any regulations
or prerequisites on this public forum, transfers from peer to peer
allow for an easier and cheaper means of commerce, creating an
expansion of the consumer industry. As the controversy on the
legitimacy of this new form of payment continues, public opinion
and participation will ultimately shape the future of the Bitcoin. P
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