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Running head: BITCOIN CRYPTOCURRENCY BITCOIN CRYPTOCURRENCY Name of the Student: Name of the University: Author note:
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1BITCOIN CRYPTOCURRENCY Table of Contents Introduction:....................................................................................................................................2 Discussion:.......................................................................................................................................2 Social impact of Bitcoin:.............................................................................................................2 Intellectual property protection:..................................................................................................2 Opportunities related to Bitcoin:.................................................................................................3 Drawbacks of Bitcoin:.................................................................................................................5 Issues related to Bitcoin:..............................................................................................................5 Summary:.........................................................................................................................................7 References:......................................................................................................................................8
2BITCOIN CRYPTOCURRENCY Introduction: The Bitcoin is a form of decentralized crypto currency which is currently in use. The transactions that are made with the usage of the Bitcoin are verified at the nodes of the network. In other term, Bitcoin is a computer file which is stored in the digital wallet with the help of the smartphone application. Transaction of the Bitcoin is done through the digital wallet itself. The technology makes use of the block chain to keep track of the transaction. The goal of introducing the Bitcoin in the transaction was to purchase without disclosing identity (Nakamoto 2019). The aim of the report is to identify the advantages and disadvantages and disadvantages of the Bitcoin along with it impact on the society and role played in the protection of the intellectual property. Discussion: Social impact of Bitcoin: With the technological advancement in the society, new techniques have been introduced such that the monetary properties can be stored. As per the studies, it has been found out that the crypto currencies are much better alternatives for the storage of the monetary properties or wealth than the fiat currencies. The Bitcoin helps in gaining value over long term, and is not subject to monetary inflation hence it is preferred by the people around the world. Intellectual property protection: In order to protect the assets that are present as Bitcoin, the wallet has to be updated regularly. The details of the transaction along with the amount and id is stored in the wallet. The Bitcoin uses block chain technologies in the process of transaction. Every step in the transaction is accounted for. The changes made in any step is marked digitally, and cannot be altered without
3BITCOIN CRYPTOCURRENCY notifying the authority. This is one of the most secured form of storage of the digital wealth. The block chain technology used in the Bitcoin helps in creation of a time stamp which cannot be altered. All though the block chain technology is used in the Bitcoin, it is not patented and that is one of the greatest lack in the protection of the intellectual property (Underwood 2016). In the contemporary world, the usage of the Bitcoin technology is prevalent in all the sectors. As all the technologies present have their opportunities and drawbacks in some sector or the other, the Bitcoin has its own opportunities and drawbacks. The section below gives a brief idea about the opportunities and the drawbacks of using Bitcoin crypto currency in the current world. Opportunities related to Bitcoin: Transaction: the traditional business transaction consists of several process which includes, dealing, agents, legal representatives and brokers. Each and every process of the transaction involves the expenses. With the usage of the Bitcoin crypto currencies, the middle man in the business can be cut off. This process of transactions and dealing takes place in the peer to peer network where the third parties are not involved at all. The status of clarity, accountability and the establishment of the audit trails becomes easier with the usage of this technology. Freedomofpayment:with theusageoftheBitcoin,thetransactionispossible irrespective of place or time. There are no restriction in the transfer of money with the help of the Bitcoin technology (De Filippi 2019). The technology is not attached to any central administration from where it can be controlled. One is solely responsible for their own money.
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4BITCOIN CRYPTOCURRENCY Usage of the private keys: Each and every user using the Bitcoin have a private key, which is usually a password, apart from this they may have their own private key for enhancing the security of the transactions. As the user can control their transaction using the Bitcoin, transaction becomes much secured than other modes of transaction. No extra fee can be charged without proper notice. Any alteration in the amount is never left unnoticed. Discretion: Bitcoin helps in maintaining unanimousness of an individual from prying eyes of the hackers, thereby protecting them from the theft of the identity. Peer to peer transactionis one of the other important function of the Bitcoin. This allows the user to interact with one another directly without any approval from any other third party or banks. The process is extremely fast and safe. Encryption of the Bitcoin allows in securing the money that is transferred or received. The charges cost for using bit coins are much lesser than the other forms of transaction. Further charges can be added by the user for the faster processing of the transaction. The priority of the network can be enhanced with extra fees paid. The merchant can convert the Bitcoin into fiat money from the Digital Currency Exchange, whose service charges are much lesser than the credit cards and PayPal (Geuder, Kinateder and Wagner 2019). As the process of transaction with the help of Bitcoin is irreversible, no sensitive information is included. The risks for the merchant decreases as there is no loss of potential data while using this. The stakeholders who are benefited with the usage of the Bitcoin includes the merchant who are using it, along with the other members of the Bitcoin ecosystem. The Bitcoin
5BITCOIN CRYPTOCURRENCY ecosystem includes the miners, the developer and the users. The developers develops the applications with mentioned changes and suggestion from the client end. The miners are the keepers of the block chain technology which is in use for the Bitcoin. Drawbacks of Bitcoin: The major drawback of the Bitcoin technology is the lack of awareness. People are still unaware of the appropriate usage of the Bitcoin. The business have started adapting the technology after being educated with the importance and the benefits of using the Bitcoin. People have to be educated about the Bitcoin technology (Bouoiyour et al. 2016). The volatility of the Bitcoin is much higher. As the technology is spreading at an exponential rate the requirement for the Bitcoin increases as well. But the coins are much limited (Charles and Darné 2019). The technology is still developing, and features are being added on a regular basis. Bitcoin is incomplete and needs time for completion. Certain problems keeps on arising with the usage of the technology (Urquhart, 2017). Issues related to Bitcoin: The unanimousness may be considered to be one of the greatest aspect of Bitcoin, but is also one of the greatest issues of the technology as well. With the technological up gradation, the usage of the internet has increased considerably. Issues of cybercrime has increased as well. All the dark web activities, including the illegal transactions are performed with Bitcoin. As the transactions are unanimous, tracking these transactions are very difficult. With the further increment of the cybercrime activities and the volatility of the Bitcoin the entire process of cybercrime becomes easier (Narayanan et al. 2016).
6BITCOIN CRYPTOCURRENCY The private key may be stolen. For an entire system running on passwords and keys, if the password itself is stolen the user have got no option. The technology runs on the cloud computing services which are vulnerable. The privacy in the public block chain is very less. The transaction through bit coins are not encrypted. Instead they are hashed. Public scrutiny is applicable for each every transaction that has ever taken place in using Bitcoin. This may give out the necessary data and hamper the privacy. A project named, DrakWallet have discovered this phenomenon as a major issue in the Bitcoin technology (Crosby et al. 2016). Apart from this, in the world of mobile technologies absence of a platform for the mobile application is one of the major issue. The company like the Apple, Google, and Microsoft have not yet decided over placing Bitcoin wallet in their respective Application Stores. Recent reports says that Apple have in fact banned the usage of the Bitcoin Wallet. The app payment cannot be done with the help of Bitcoin wallets in Apple. The scenario is similar for Google as well (Hendrickson and Luther 2017). Limited transactions can take place with Bitcoin. Limited transaction helps in prevention of the block chain technology from spiralling out of control. The problem has to arouse as yet because that limit has not being reached until this date. With the increasing demand for the technology, it is not very far when the Bitcoin will be used for the purpose of mainstream mode of payment and it will become very difficult for the block chain to follow up. Usually the cost of transaction is much lesser for using Bitcoin, however, the transaction charges are high based on the priority of the transaction. For example the charges for the transaction is very high if client or the user demands fast transactions or immediate transaction to the other without any waiting or processing time (Urquhartn 2016).
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7BITCOIN CRYPTOCURRENCY The time taken by the Bitcoin to perform major transactions is high. Thus the business are avoiding the usage of Bitcoin. The average time taken by Bitcoin is forty-three minutes, which is at time very emport6ant for the business. The time is mainly consumed in the process of verification using the Block chain, which uses decentralized, distributed ledger techniques which underpins the Bitcoin. Summary: After going through the entire scenario, it can be said that the crypto-currency is one of the secure way of transaction. Bitcoin is one of the well-known crypto-currency of all time which helps in the transaction of the wealth with a very short notice of time without involvement of the third party in between the transaction. The user or the client is have full control over his or her online asset which is transferred with the assistance of crypto currency. The usage of the private keys helps in keeping the transaction secure. The entire process remains unanimous as the details of the peers are not used for the transaction. The process of the transaction depends upon the priority, for the fast transaction process the transaction fees have to be paid. All though the technology is quite in use, there are no mobile platform for doing that. Bitcoin also helps in the process of covering cybercrime with its ability to remain unanimous. Hence, we can conclude that the Bitcoin can be used for the purpose of the transaction with further improvement done to it which will make it more suitable and less complicated for the usage ion the contemporary world.
8BITCOIN CRYPTOCURRENCY References: Bouoiyour, J., Selmi, R., Tiwari, A. K., and Olayeni, O. R. (2016). What drives Bitcoin price.Economics Bulletin,36(2), 843-850. Charles,A.andDarné,O.,2019.VolatilityestimationforBitcoin:Replicationand robustness.International Economics,157, pp.23-32. Crosby, M., Pattanayak, P., Verma, S., and Kalyanaraman, V. (2016). Blockchain technology: Beyond bitcoin.Applied Innovation,2(6-10), 71. De Filippi, P. (2019). Bitcoin.De Filippi, P.(2019)«Bitcoin» in Haunter D. & Op den Kamp C. (eds). A History of Intellectual Property in,50. Geuder, J., Kinateder, H. and Wagner, N.F., 2019. Cryptocurrencies as financial bubbles: The case of Bitcoin.Finance Research Letters,31. Hendrickson, J. R., and Luther, W. J. (2017). Banning bitcoin.Journal of Economic Behavior & Organization,141, 188-195. Nakamoto, S. (2019).Bitcoin: A peer-to-peer electronic cash system. Manubot. Narayanan, A., Bonneau, J., Felten, E., Miller, A., and Goldfeder, S. (2016).Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press. Underwood, S. (2016). Blockchain beyond bitcoin. Urquhart, A. (2016). The inefficiency of Bitcoin.Economics Letters,148, 80-82. Urquhart, A. (2017). The volatility of Bitcoin.Available at SSRN 2921082.