Essay on positive and negative impacts of Bitcoin
650 Words essay on positive and negative impacts of Bitcoin for school and college students.
With the advancement in Technologies and World Economies, there emerges new ideas differing from the existent world. Bitcoin is one such example. Bitcoin was the first cryptocurrency, invented in 2009. It is a volatile virtual currency, issued globally. Bitcoin is not issued or regulated by any central bank or any single regulatory authority. It is the result of computer algorithms and is issued and transferred through distributed processing network, by a private party. Amongst countries, it gained more popularity in South America in 2016 because of Government’s control on hard currency.
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Positive Impacts of Bitcoins
Advantages of using Bitcoins can be listed down as follows:
- Bitcoin is not affected by inflation. Only about 21 million Bitcoins will ever be released. The release of new bitcoins is impeding and it will come to a halt within a few decades.
- The risk of collapse in such a currency is very low since it is not regulated by any one government.
- The transactions with Bitcoin stands easy, in terms that once a person owns a Bitcoin, he/she owns it, no one can take the Bitcoins back. Also, the ownership of Bitcoin is only known to the user and it may be observed only by the user through a code.
- It can make online transactions easier.
- The source of funds devoted as Bitcoins are untraceable, so it might be a benefit for a section of the world.
- It made a success with an explosion however; the reason can be attributed to its enormous publicity due to which people with or without understanding indulged into the concept of Bitcoin.
Negative Impacts of Bitcoins
Undoubtedly, the disadvantages are also numerous:
- The computer server hosting such a cryptocurrency ledger could be destroyed. However, the existence continues on all other servers all over the world and may instantly be replicated. It is not possible to destroy such a currency by attacking any single node or group of nodes.
- It is easy to observe transactions taking place in the chain, which is supposed to be blocked, however the identity of the transacting parties remains hidden, which is believed to be blocked with an “unbreakable” code. Only the transacting parties have the code needed to retrieve the information in this blocked chain where they may obtain use and possession of the currency.
- There have been many loop holes through which the currency endowed with the Bitcoin has been lost.
- The value of Bitcoin fluctuates on the extremes; the extreme values may be 1000-1500 USD apart. In July 2010, it had lowered down to the value of 0.08 USD. One day it may be on the higher side of the extreme values and the other day it may fall to half its value, depending on any latest activity affecting it. Current value of Bitcoin is 2341.27 USD.
- Since Bitcoin had its inception in 2009, it has not survived a complete business and credit cycle yet. There have been no times of financial panic or technical recession since the time Bitcoin was launched. It would be interesting to see the management of Bitcoin in such times. Even the experts are unable to postulate the value of Bitcoin at any point of time. With the shifts in economy, the value of Bitcoin cannot be hypothesized.
- Since the funds in Bitcoin remains untraceable, it may be used for illegal activities as the risk of being tracked down by authorities goes extremely low. In other terms, it may be compared to black money in this regard.
- There is no mechanism developed to recover the lost or stolen Bitcoins. Hence, they become a financial bulk easy to lose.
Bitcoins still remain too new a financial medium to the world. The society is still getting to understand this concept. It may be evidently said that the system works reasonably well and is expanding rapidly. Hence, it is required to understand here, whether indulging oneself into it, would be imperative.Tags: negative effects of bitcoin, bit coin harmful effects, negative effects of coins as currency, bitcoin harmful effects, beneficial effect of bitcoin