The aim of this paper is to make a statement about the future viability of the Bitcoin system by comparing opportunities and risks. In particular, the effects and existing risks for the conventional banking system will be discussed.
The digital currency Bitcoin enjoys great media interest. Its origins can be traced back to 2008. The timing of its introduction was extremely appropriate at the time, as the global economy was still dealing with the aftermath of the financial crisis and confidence in the existing banking system was shaken. A revolutionary payment system, detached from state control, thus gained a large number of users and supporters within a few years. In addition, the very pronounced critical discussion of Bitcoin on the part of the press and regulatory authorities shows the necessity for states, banks, companies and private consumers to seriously deal with the topic of Bitcoin.
At first glance, the technically complex concept of the Bitcoin system is very complicated and abstract. In addition, the currency exists exclusively digitally and is therefore difficult for ordinary consumers to grasp. Nevertheless, the density of users, Bitcoin transactions and the number of acceptance points are constantly increasing. Due to this, a controversial public discussion has arisen in which banks and even state institutions evaluate Bitcoin differently.
Inhaltsverzeichnis (Table of Contents)
- Introduction.
- Fundamentals of monetary theory.
- Forms of money.
- Functions of money
- Payment function
- Value retention function
- Computing unit function.
- Demand for money.
- Definition of the money supply.
- Money creation.
- Bitcoin
- The story behind Bitcoin.
- How Bitcoin works
- Basis cryptography.
- Peer to Peer Network
- Wallet and Bitcoin addresses.
- Transactions
- Blockchain
- Mining.
- Bitcoin in practice.
- Bitcoin and the conventional banking system.
- Are Bitcoin Cash?
- Legal framework.
- Bitcoin as an object of speculation.
- Risks for the banking sector
- General risks.
- Risk.
- Risk of prohibition.
- Control risk.
- Risk of deflation
- Opportunities.
- Opportunity for value enhancement.
- Market opportunity.
- Cost opportunity.
- Alternative digital currencies
- Cryptic currencies.
- Other digital currencies
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work aims to assess the future viability of the Bitcoin system by comparing opportunities and risks. The effects and existing risks for the conventional banking system will be discussed.- The nature of money and how it is created.
- The technical workings of the Bitcoin system, including cryptography, peer-to-peer networks, and blockchain technology.
- The legal framework and regulatory environment surrounding Bitcoin.
- The opportunities and risks associated with Bitcoin, particularly for the banking sector.
- The potential impact of Bitcoin and other digital currencies on the future of finance.
Zusammenfassung der Kapitel (Chapter Summaries)
The work begins by introducing the concept of Bitcoin and its emergence during the global financial crisis. It then delves into the fundamentals of monetary theory, exploring different forms, functions, and creation processes of money. Chapter three focuses on Bitcoin's origins, its technical architecture, and its practical use. This includes a detailed explanation of the blockchain technology, mining, and transactions. Chapter four analyzes Bitcoin's relationship with the conventional banking system, addressing its potential impact on the system and examining legal and regulatory aspects. The chapter concludes with an assessment of risks and opportunities associated with Bitcoin for the banking sector. Chapter five examines general risks associated with Bitcoin, including risks of prohibition, control, and deflation. Chapter six discusses various opportunities presented by Bitcoin, including value enhancement, market expansion, and cost reduction. Finally, Chapter seven explores the landscape of alternative digital currencies, highlighting both cryptic and other digital currencies with potential for innovation and growth.Schlüsselwörter (Keywords)
This work focuses on Bitcoin, its technical workings, and its potential impact on the conventional banking system. Key topics include: digital currency, monetary theory, blockchain technology, cryptography, peer-to-peer networks, legal framework, regulatory environment, risks, opportunities, alternative digital currencies, and the future of finance.- Citar trabajo
- Oliver Cherek (Autor), 2014, Bitcoin. Opportunities and Risks of a Digital Currency, Múnich, GRIN Verlag, https://www.grin.com/document/1151960
