In this thesis, the crypto-currency Bitcoin should be examined for its suitability as world currency or part of it. In order to determine the potential of Bitcoin, the terms currency and cryptocurrency must be explained and defined first. Included in the definition of cryptocurrencies is the meaning of the Bitcoin system and the functionality will be roughly explained. In this thesis the detailed technical aspects of the design of the Bitcoin system are greatly simplified and partially neglected. After that follows a summary of advantages and disadvantages of cryptocurrencies in general that can be found in the literature. This is primarily to gain insight into how the current perception of Bitcoin is in the public and to identify arguments that are likely to have a high impact on others' opinions.
After the consideration of the cryptocurrency Bitcoin follows a historical discussion with the concept of the world currency. It will be investigated which approaches of a world currency already existed in the recent past and which are currently available. This will lead to the identification of the driving forces and challenges that have an impact on the fiscal world order.
Thereon, the findings about the Bitcoin system will be laed against the discussion about a world currency and potentials will be derived. After a conclusive summary and a critical conclusion, further research opportunities in the investigated fields are finally opened.
Inhaltsverzeichnis (Table of Contents)
- 1. Relevance and course of the investigation
- 1.1. Relevance
- 1.2. Course of the investigation
- 2. Definitions
- 2.1. Currency
- 2.2. Cryptocurrency & Bitcoin
- 3. Is Bitcoin a currency?
- 4. Advantages and disadvantages of cryptocurrencies
- 5. The idea of the world currency - a historical thought
- 6. Potential of Bitcoin being a world currency
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis investigates Bitcoin's potential to become a world currency. It aims to analyze Bitcoin's characteristics in relation to the established criteria and history of world currencies. The analysis considers both the advantages and disadvantages of cryptocurrencies, particularly focusing on Bitcoin.
- Definition and characteristics of currency and cryptocurrency
- Historical overview of world currency concepts
- Advantages and disadvantages of cryptocurrencies
- Bitcoin's suitability as a world currency
- Potential impact of Bitcoin on the global financial system
Zusammenfassung der Kapitel (Chapter Summaries)
1. Relevance and course of the investigation: This chapter establishes the context for the thesis. It highlights the instability of the current global monetary system, exemplified by the 2008 financial crisis and the historical evolution of world currency systems (gold standard, Bretton Woods system, and the rise of the Euro). The emergence of Bitcoin and other cryptocurrencies further complicates this system, raising questions about their integration into existing financial structures and their potential as alternative or even replacement currencies. The chapter outlines the thesis's approach, which involves defining key terms, analyzing the advantages and disadvantages of cryptocurrencies, examining the history of world currency concepts, and finally assessing Bitcoin's potential in this context. The increasing digitization of economic processes and its challenges to the financial sector are also emphasized as a motivator for the study.
2. Definitions: This chapter provides crucial definitions of "currency" and "cryptocurrency," particularly focusing on Bitcoin. A currency is defined as a legal tender regulated by a state, fulfilling functions as a unit of account, means of exchange, and store of value. Additional characteristics like consistency, wide acceptance, uniqueness, scarcity, and security are discussed. The chapter then clarifies the concept of cryptocurrency, contrasting it with traditional currencies. It explains how cryptocurrencies are created (mining) and used, and highlights the emergence of numerous cryptocurrencies in the market, with Bitcoin serving as a prominent example. Bitcoin's decentralized nature and its inherent limitations (21 million coins) are mentioned. The chapter carefully lays the groundwork for subsequent analysis by establishing the foundational concepts.
Schlüsselwörter (Keywords)
Bitcoin, cryptocurrency, world currency, global financial system, digital currency, monetary system, financial crisis, decentralization, advantages, disadvantages, economic development.
Frequently Asked Questions: Bitcoin's Potential as a World Currency
What is the main topic of this thesis?
This thesis investigates Bitcoin's potential to become a world currency. It analyzes Bitcoin's characteristics against the established criteria and history of world currencies, considering both advantages and disadvantages of cryptocurrencies, particularly focusing on Bitcoin.
What are the key themes explored in this thesis?
Key themes include the definition and characteristics of currency and cryptocurrency; a historical overview of world currency concepts; the advantages and disadvantages of cryptocurrencies; Bitcoin's suitability as a world currency; and the potential impact of Bitcoin on the global financial system.
What is covered in Chapter 1: Relevance and Course of the Investigation?
Chapter 1 sets the context by highlighting the instability of the global monetary system (exemplified by the 2008 crisis and historical shifts in world currency systems). It discusses the emergence of Bitcoin and its implications, outlining the thesis's approach: defining key terms, analyzing advantages and disadvantages of cryptocurrencies, examining the history of world currency concepts, and assessing Bitcoin's potential. The increasing digitization of economic processes and its challenges are also emphasized.
What is explained in Chapter 2: Definitions?
Chapter 2 provides crucial definitions of "currency" and "cryptocurrency," focusing on Bitcoin. It defines currency as legal tender with functions as a unit of account, means of exchange, and store of value, discussing characteristics like consistency, acceptance, uniqueness, scarcity, and security. The chapter contrasts cryptocurrency with traditional currencies, explaining creation (mining), usage, and the market's diverse offerings, highlighting Bitcoin's decentralized nature and limitations (21 million coins).
What are the other chapters about?
While detailed summaries are provided for Chapters 1 and 2, the table of contents indicates further chapters covering whether Bitcoin is a currency, the advantages and disadvantages of cryptocurrencies, the historical idea of a world currency, and Bitcoin's potential to become one.
What are the keywords associated with this thesis?
Keywords include Bitcoin, cryptocurrency, world currency, global financial system, digital currency, monetary system, financial crisis, decentralization, advantages, disadvantages, and economic development.
What is the overall objective of this research?
The overarching objective is to analyze Bitcoin's potential to become a world currency by examining its characteristics in relation to historical precedents and established criteria for world currencies. The research aims to provide a comprehensive and balanced assessment of Bitcoin's role in the evolving global financial landscape.
- Quote paper
- Finn Schwarz (Author), 2019, Bitcoin‘s potential of becoming a world currency, Munich, GRIN Verlag, https://www.grin.com/document/508583
