Digital Currency: Bitcoin's Impact on Financial Systems & Markets

This report delves into the potential of Bitcoin as a transformative force in the financial landscape. It begins by tracing the evolution of money from barter to digital currencies, highlighting Bitcoin's emergence as a significant innovation. The report emphasizes Bitcoin's potential to mitigate financial crises, reduce market volatility, and offer new functionalities compared to traditional money. It also discusses the impact of digitalization and Bitcoin's potential to reduce political interference in money management. The analysis includes recommendations for incorporating Bitcoin, such as smoother transactions and safer methods. While acknowledging challenges like the lack of governmental control, the report emphasizes Bitcoin's ability to decentralize the currency system and offers a future-oriented perspective, including a review of relevant literature.

Assignment : Writing Memo
Student Name: Student ID:
Subject Name: Money, Banking, and the Financial Crisis Subject ID: BUS33882
Date Due: Professor Name:
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Dear Madam,
Multiple financial crisis and failure of our present currency system has raised doubts regards to
current prevailing standards in currency. The concept of money had developed from the age-old
concept of barter, where one type of good was exchanged for another1. Then money went on to
be further developed into metallic currencies. In the recent year there has been emergence of
another type of currency, which is the digital currency referred to as commonly bitcoins. Bitcoins
have tremendous potential and is regarded as one of the greatest innovation of all times that has
capacity to eliminate government money. It has capability to transform all suitable types of
payment systems and mechanisms. Bitcoins has tremendous future potential as it can be treated
as a replacement of all future currencies. Digital currency as bitcoins has potential to reduce
scandals and volatility associated in the financial and currency market. Money can have a new
dimensions with the emergence and rise of usage of bitcons. Chicago is making tremendous
amounts of investments and innovation in reagrds to bitcoins development. It can depict a huge
impact in the financial and currency history of the world. Viability of bitocins in the age of
digitalisation bitcons can emerge to a supportive technology that will be used to transform
mechanisms2.
Various functions of money involves ways and methods to incorporate to enable an individual
purchase or male payments towards a good or service. Money though has a diversified range of
other functions, key functionality is focused purchasing capability to have acess to goods and
services. Age-old concept of money that was involved in the barter system was to enable easy
exchange of goods and services. Bitcoins can help advance the diversified range of
functionalities that money can offer. It can be readily used and applied for various benefits and
can yield substantial transformation, which might impact greater economic parameters. Bitcoins
have capabilities to impact inflation, financial crisis, economic downfall, loss of currency and
various other factors in a positive manner3. It can substantially reduce political interferences from
1 B.S. Bernanke, "Non-monetary effects of the financial crisis in the propagation of the Great Depression."
2 R.A. Radford, "The economic organisation of a POW camp .".
3 M. Andreessen "Why Bitcoin Matters.".
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usage of money and enable tremendous volumes of transactions which is not otherwise possible
through money.
Recommendations for incorporating in bitocins are multifarious in number. Bitcoins can enable
smoother transactions, better and safe methods of transacting, users can avail in wallets and so
on. While government intervention and funding in bitcoins still remain a challenge, such needs to
be sourced for a better future4. Positive impacts from bitoins cannot be overemphasized.
Digitalisation of currency or bitcoins can render effectiveness in several transactions leading to
decentralization of currency system in totality. Though there are certain negative aspects as well
such as lack of governmental control over the currency. But such challenges are presented by
money as well. Hence, innovators of bitcoins needs to look beyond currency systems to enable a
better and safe transacting future.
4 J.K. Galbraith, "4 Financial crisis.".
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Bibliography
Andreessen, M. "Why Bitcoin Matters." The New York Times, 2014: 21.
Bernanke, B. S. "Non-monetary effects of the financial crisis in the propagation of the Great
Depression." 1983.
Galbraith, J. K. "4 Financial crisis. ." US-China Relations in the Twenty-First Century: A
Question of Trust, 2015: 103.
Radford, R. A. "The economic organisation of a POW camp. ." Economica, 1945: 189-201.
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