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RUNNING HEAD: Crypto currency 1

CRYPTO CURRENCY

(Name)

(Institution)

Crypto currency 2

Crypto currency is a mode of currency that allows the use of technology to conduct

monetary and other financial transaction by use of virtual money, for instance Bitcoins. The

digital currency which is encrypted allows freedom of the user to purchase and transact business

for value through the internet. It is an invention that changes the usual norms of the economy,

governance systems and businesses functions and could alter ideas concerning trade, ownership

or trust.

According to Bill Gates, bitcoin is a fluid and flexible currency which promotes easy

movement of money thus can be used to facilitate worldwide trade. He also views it as a

convenient mode as you can transact a business from a further place and you do not need to

necessarily be physically in the place while purchasing something and thus it’s better than the

usual currency. According to him it is also good for large transactions and it is of advantage to

the user as it protects the privacy of the customer. Bill Gates also argues that cryptocurrency

should be embraced by various economies and should not be viewed as a negative mode, for

instance being perceived as a currency used for money laundering.

Bitcoin promotes integrity of monetary information primarily to the users who may

include the seller and the customer of a certain product or service. The bitcoin software

facilitates the interconnection of various users’ computers and thus maintaining a collective book

keeping, through the internet. The bookkeeping is open and enables all users to scrutinize the

information. The digital ledger that can be obtained by any user interconnected in the bitcoin

software is made possible by a block chain. The block chain is thus a system that allows the

interconnected users of a bitcoin software to share and view a transaction over a period of time.

Crypto currency 3

The block chain contains all information on the transactions which are logged by each

user in the interconnection. For instance, information on time, date, participants and amount of

every single transaction is available in the block chain. The connected nodes have access to the

block chain whilst the bit coin minors assess and verify the transactions through mathematical

calculations. Further, the arithmetics involved in the transactions allow the interconnected nodes

to have correct and efficient information which flow automatically and in a right sequential

manner. When wrong information on a certain transaction is inputted, it would be easily be

recognized by the interconnected nodes before they become processed in the block chain. Thus it

is evident that in every transaction, the nodes have to agree on the given information, for

example the date and time; in doing so, a certain transaction can be verified by the nodes through

the block chain.

According to the Federal Deposit Insurance Corporation (FDIC), unbanked is a

population which includes adults who do not have an account at a bank or in another financial

institution. Most of the unbanked people do not have trust in the commercial banking system.

Cryptocurrency can facilitate the unbanked for instance by enabling them to conduct financial

transactions anywhere and in an efficient manner better than the traditional banking model.

The pros of using cryptocurrency is that it is highly confidential and that it doesn’t have

high bureaucracy levels which are normally in banks and other financial institutions.

Cryptocurrency is also a convenient and efficient mode especially while carrying out huge

transactions. Bitcoin users are also able to manipulate on the value that each unit of bitcoin

represents, for instance a unit can represent a given amount of dollars, award credits or company

shares. Another advantage is that a bitcoin is highly divisible and each specific unit represents a

Crypto currency 4

certain value. Moreover, it enables us to manipulate the currency to be more “intelligent” and

make cash and money flows more automated. Cryptocurrency also allows for a significant

reduction of bureaucracy in companies that utilize bitcoin currency as they can be programmed

to efficiently process payments of different units and cover the organizational costs. It also leads

to a transparent way of how companies conducts their businesses especially in the accounting

area.

The major cons of cryptocurrency is that it surpasses the government regulatory agencies

and can be used to conduct illegal activities such as money laundering, buying and selling of

drugs and also financing terrorist activities. Crytocurrency can be an impediment to the

government as some tariffs cannot be imposed on financial transactions done by its citizens who

use bitcoins. Thus there is a reduction on government taxes which may affect its expenditure of

offering services to its citizens in different states. Financing of terrorist activities through

cryptocurrency can also be a major disadvantage as it may lead to major destruction of property

and also deaths which may heavily cost a state.

The pros of using cryptocurrency through bitcoins are more significant as they may

accelerate the economic traffic of both the US and worldwide. The various highlighted cons may

be impeded by the government by first accepting and embracing cryptocurrency; and thereafter

coming up with regulations that would monitor the various transactions carried out using

bitcoins. As a result, illegal practices would be prevented by the state and finally it would lead to

more economic development and financial prosperity of the citizens.

Crypto currency 5

REFERENCES

https://www.youtube.com/watch?v=YIVAluSL9SU

https://www.youtube.com/watch?v=hMbh44R67RM

https://en.wikipedia.org/wiki/Unbanked

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