Bitcoin as a Form of Cryptocurrency

Published: 2021-08-17 02:45:07
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Category: Finance

Type of paper: Essay

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For most people, it is considered as digital money, wherein no middlemen, such as bank or credit company are required. The first bitcoin specification was created in 2009 under the pseudonym Satoshi Nakamoto. Satoshi Nakamoto left the project, but bitcoin continued to grow through the help of many interested developers. As of today, the number of businesses and individuals using bitcoin is growing. Bitcoin can be acquired as a payment of goods and services, purchasing at Bitcoin exchange, or earning through competitive mining (“FAQ – Bitcoin,” 2018).
When using bitcoin, users should become aware of a few things. First, bitcoin’s main purpose is the security and protection of the owner’s money. Second, due to its young economy, bitcoin’s price is volatile. It means the value of bitcoin can increase and decrease anytime and storing a big amount of money with bitcoin is not recommended. In addition, bitcoin transactions are irreversible. Once a person sent a payment, it cannot be reversed. Until now, bitcoin is still considered as an experimental currency. Users can still experience drastic changes and new developments to improve Bitcoin. Lastly, bitcoin might not be an official currency, but users still need to follow government regulations, such as paying taxes (“Some things you need to know,” 2018).
Ever since bitcoins and other online currencies have been introduced, people started to get their hands on buying bitcoins and other online currencies because of security and privacy. However, these online currencies also gave hackers, criminals, and even terrorists a chance to use it to their advantage as a ransom. According to Usborne (2017), cybercriminals prefer to use bitcoins because it gives anonymity and using bitcoins is easy. First, anonymity because bitcoins can be used without a middleman. Criminals always tried their best to hide their identity when doing money transactions, especially when getting a ransom (Bloomberg, 2017).
Second, it is easy to use. David Prince, a cybersecurity specialist, mentioned that getting a ransomware toolkit and an automated bit of software is as easy as getting an iTunes account. The ease of use of bitcoins and other cryptocurrencies makes it easier for online criminals to attack (Usborne, 2017).
Law enforcement tries to keep up with solutions on how to monitor cryptocurrencies users in order to avoid crimes (Bloomberg, 2017). In fact, the bitcoin is not an exception of existing financial systems regulations (“FAQ – Bitcoin,” 2018). Global regulators view on cryptocurrency, such as bitcoin, still depends by country. In some countries, such as Japan and Switzerland, bitcoin is considered as a legal tender. While in the United States, European Union, United Kingdom, South Korea, China, Singapore, and India, cryptocurrency is not considered as a legal tender. The policy of exchanging also depends by country. For example, exchanging cryptocurrency in Japan is allowed, however, the exchange must be registered to the Japanese Financial Services Agency (Rooney, 2018).

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