With technological development, societies have raised the value of money and increased the economy. In the last couple of years, internet users are dealing with a massive and huge new system called Digital currency or Bitcoins described as a balanced account that is stored electronically using the online card or other devices. This type of currency may be used to buy goods and services. Reference: Creative Commons: what are bitcoins?
“I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing but that will soon be developed is a reliable e-cash.”(Professor Milton Friedman 1999)
History:
It started first with crypto-currencies such as dotcom-bubble, E-gold, and liberty reserve which are a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. In 1983 David Chaum evolved the idea of digital cash.Then in 2008 Bitcoin was invented and described as the first blockchain-based decentralized cryptocurrency.
Reference: Creative Commons: the difference between centralized and decentralized Bitcoins are divided into 2 different parts:
Bitcoins are divided into 2 different parts:
| Centralized | Decentralized |
| Such as PayPal, E-cash, and WebMoney, this system works directly with its user’s interest and demanding without the interpretation of any digital currency exchanger.Easy to access and to provide advanced trading functionalities | It’s a cryptocurrency system or a type of digital token that depends on cryptography, peer-to-peer networking, and decentralization.It doesn’t rely on a third holder service to maintain the user’s funds.This system works by creating Proxy tokens or through a decentralized multi-signature phenomenon. |
Different Types of Cryptocurrency (Bitcoin)
Regardless that bitcoins have emerged into the marketplace with different profiles and functions but still contain both advantages and disadvantages linked to the societies and countries:
Creative Commons: A gold bitcoin on a tablet computer: no insurance.
Pros
1-It’s far cheaper to produce and to transport.
2-It is a digital wallet secured by Online Banks.
3- Insurance starting with installment duplicity.
4- Reduce the possibility of bitcoin’s robbery
5- Direct Transfers for Immediate Settlement
6- Access to anonymous and Inaccessible Markets
7- Decreasing transfer fees
Cons
1-It’s not a material thing: it is not permanent
2- if one of the internet or the power grid is gone, bitcoins will be worthless.
3-A risky investment because it is stored in a worldwide connected web.
4-Increased Regulation
5-Limited Scaling
6-Lack of Applications.
Reference Creative commons: Pros of bitcoins
Along with the criteria of this digital wallet, hackers and fraudsters are creating a chaos in the economic field by stealing huge amounts of bitcoins around the world for illegal purposes. Nowadays, many governments are taking control of this system using experts in the digital currency field to increase the security level on these digital coins also by putting some restricted rules and policies on the illegal actions and services made by black hackers to maintain the accounts of the users.
Creative Commons: Bitcoins and economy
In Lebanon, as an example, there are no possibilities of creating a cryptocurency community or an open source in dealing with bitcoins. First, the internet isn’t 100% secured worldwide but in Lebanon, the internet is easily hacked because of the illegal internet IP addresses provided. Although, the government doesn’t have any laws regarding internet usage with no bitcoins literacy, specifically to protect consumer’s rights and funds.
“If Bitcoin becomes widespread, respected, and legitimate, that pressures all the central banks and banking companies to bring down those costs in order to stay competitive, Or everyone could just use Bitcoin,” Johnson.
Over the last few years, Bitcoins are controlling and affecting the economic field especially with its association with online black markets as Silk Road and Alphabay. The high usage of electronic currency contributed to a decrease in the use of normal money by relying on the scarcest, most divisible, transportable, verifiable and recognizable digital money in this digital age that could interrupt the ability of central banks to control over the economy. Although Bitcoins bring for themselves a great measure from claiming political debate because it plays as a wealth form for individuals interests. Also, This merge between the Dark web and bitcoins has facilitated illegal selling products through specific websites. But what will happen then?
“Nobody Can Stop Bitcoin” Bill Gates
People all over the world are dealing nowadays with the web 2.0. But many studies have conducted that digital money or cryptocurrency is 3.0web money software. This system has overcome the power of the internet and may overcome the capabilities of the internet experts.
However this technological currency is threatened in the future and all digital accounts could vanish if the dark web, controlled by anonymous users, dominates bitcoins illegally as it seems to happen with Silk Road. This inspiring system could have a bright future but bring along with it some harmful consequences.
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