Forms of digital money have been on the rise in the past few years. Today, a broad assortment of transactions can be undertaken without using cash and conventional types of money. Cryptocurrency is the latest entrant. Since the emergence of Bitcoin in 2009, several other cryptocurrencies have been introduced, such as Ether, Litecoin, and Monero. Cryptocurrencies are digital assets intended to function as mediums of exchange. They are based on cryptography and blockchain technology. Though cryptocurrency could be the future of money, the inherent risks cannot be understated. Understanding the world of cryptocurrency is especially important given its connection to capital and money markets. For capital and money markets to function properly, mediums of exchange must be stable and reliable. This paper discusses the future of cryptocurrency. The paper specifically focuses on the implications of cryptocurrency on capital and money markets as well as the risks and concerns presented by the rise of cryptocurrencies. Special attention is also paid to the bitcoin scandal and its implications.
Though cryptocurrencies have gained popularity in the last five years or so, their history dates back to the 1980s, when cryptographer David Chaum developed a complex algorithm to secure electronic fund transfers (Stark). Chaum’s algorithm laid the foundation for digital currency transfers, whether it is electronic cash transfers or virtual currencies such as Bitcoin. Nonetheless, Chaum’s efforts to popularise cryptocurrency were impeded by government restrictions, causing his cryptocurrency start-up to shut down in the 1990s. In 2009, however, what would become the first modern cryptocurrency – Bitcoin – was launched by an individual or group individuals pseudonymised as Satoshi Nakamoto. While Chaum’s idea did not involve decentralisation, Bitcoin’s idea was inherently characterised by the absence of centralised control, in addition to anonymity and blockchain technology. Since the emergence of bitcoin, some optimists have described cryptocurrencies as technologies that could revamp industries across the board (Hackett; Zhuravlyova). In future, they could be used everywhere – from banks and retail stores to pension plans and capital markets.
Cryptocurrencies are increasingly redefining capital and money markets. According to Stark, cryptocurrencies could be the new norm in the near future as far as medium of exchange is concerned. Cryptocurrencies have a number of unique characteristics that make them popular. First, dissimilar to conventional currencies, cryptocurrencies are...
Works Cited
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Moore, Heidi. “The Mt Gox bitcoin scandal is the best thing to happen to bitcoin in years.´The Guardian, February 26, 2014, https://www.theguardian.com/money/us- money-blog/2014/feb/25/bitcoin-mt-gox-scandal-reputation-crime. Accessed 19 August 2017.
Stark, Harold. “From here to where? Bitcoin and the future of cryptocurrency.” Forbes, April 21, 2017, https://www.forbes.com/sites/haroldstark/2017/04/21/from-here-to-where- bitcoin-and-the-future-of-cryptocurrency/#671ec7644367. Accessed 19 August 2017.
Zhuravlyova, Sonia. The future of money: Bitcoin and other cryptocurrency technologies are a way of life in this small Swiss town. Newsweek, July 7, 2017, http://www.newsweek.com/2017/07/21/zug-switzerland-crypto-valley-bitcoin-digital- currency-634524.html. Accessed 19 August 2017.
Outline I. Introduction a. Brief overview of cryptocurrency's evolution. b. Importance of discussing its future. II. Technological Advancements a. Blockchain developments. b. Impact of quantum computing. c. Scalability solutions. III. Regulatory Landscape a. Global regulatory trends. b. Potential impacts of regulations on market dynamics. c. Privacy and security concerns. IV. Market Adoption a. Current state of adoption among businesses and consumers. b. Cryptocurrencies as payment methods. c. Institutional investments in cryptocurrencies. V. Challenges and Opportunities a. Volatility and market speculation. b. Potential for mainstream acceptance. c. Environmental concerns and
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