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Introduction to Bitcoin (doc)

   

Added on  2021-06-17

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Running head: INTRODUCTION TO BIT COINIntroduction to Bit coinName of the Student:Name of University:Author note:
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INTRODUCTION TO BIT COIN1Question 3In the given scenario Darren who is interested in the mechanism of Crypto currency such as the Bit coin wants to analyses the procedure and its pros and cons. The current discussion deals with the evaluation of bit coin.Solution 1The Bit coin is a crypto currency and a worldwide decentralized digital currency mechanism that can be operated without the involvement of the bank or a single administrator. The Bit coin unlike the physical currency like the dollars and euros. There is the rise in the growth in the bit coins among the current markets. The bit coins uses the peer to peer technology for the digital process of transaction (Cheung, Roca and Su 2015). The important benefit of bit coin is that does not involve any third party and the purchases are not taxed. In addition to that the transaction fees are very low with the help of mobile payments. However there are limitation pointed in the process of bit coin is that the there is a limited acceptance in the global reserve currency and the balances of bit coin are not insured. The risks that are attached to the system of bit coin is that they are not highly secured, there is a tendency of having the risk of hacking where valuable information regarding the financial matters can be lost (Narayanan et al. 2016).Solution 2Digital currencies are replacing the traditional cash currencies. When it comes to bit coin, whether or not it should be considered as an investment money, the various risks are to be analyzed. The Digital currency sanctions users to stay anonymous when making the transactions (Tschorsch and Scheuermann 2016). Moreover to be a decentralized crypto currency with no central authority detached from any government, bit coin is also a peer-to-
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INTRODUCTION TO BIT COIN2peer prodecdure of payment (Bonneau et al. 2015). As such, it deals a suitable way to execute the cross-border transactions by having virtually no transaction costs or exchange rate fees.Solution 3The point that bit coin can be namelessly used to implement the transactions between the users, globally, makes it tremendously attractive to conduct activities that are crime this includes money laundering (Garay, Kiayias and Leonardos 2015). Therefore the governmentsblame the digital currencies for being a device for criminals to transact unlawful goods like weapons or drugs.The Australian government allows the businesses to transact, sell, or buy the bit coin. The Australian Taxation Office (ATO) takes in hand bit coin transactions arrangement that are subject to appropriate taxes that depends upon the use and user (Dwyer 2015).The other government’s notions about Bit coin is the government of the United States have taken a positive approach towards bit coin. At the same time, it has several government agencies working on preventing or reducing the use of bit coin for the transactions that are unlawful.The. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) in the United States has been provides guidance on bit coin. It has stated bit coin as not just currency, but as a money services business (MSB).While concept of bit coin is tolerated widely in some parts of the globe, there exists many countries who has an unfriendly attitude towards the bit coin due to volatile and decentralized nature, perceived threat to the current monetary system, and link to illicit activities like drug dealing and money laundering (Gipp,
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