Viable Crypto Currency or Investment Bubble Essay

Imagine a currency that can be sent around the globe instantly from one client to another, without any hefty transaction fees. Although, this achievement is seemingly impossible, Bitcoin, a form of digitalized monetary value, accomplishes just that. Until recently, money has always been perceived as a physical note or coin that can be used to make transactions. However, Bitcoin is basically an encrypted digital block that can be stored in an online wallet and securely stored, sent, and received via a special network on the Internet (Friedman). Programmed in 2009 by an anonymous group known as â€Å"Satoshi Nakomoto,† (Timpane), Bitcoin appeared on online exchanges as the world’s first decentralized virtual currency. It has been bought and sold†¦show more content†¦Without a bank to manage the supply of this crypto currency, the price is unregulated and proves to be extremely volatile. This price fluctuation is one quality that is holding the legitimacy of Bitc oin back because it needs a consistent value for practical use in the monetary world. As speculative investors buy and sell Bitcoin, the price varies at extreme rates. But in support of Bitcoin’s long-term future, the price has shown a steady uptrend in the past year, peaking at around $1200 (See Apendix I). Eventually, a steady value will be reached to establish the actual price of Bitcoin. The positive aspect of Bitcoin’s decentralization greatly outweighs this temporary problem of volatility. The lack of the Federal Reserve’s regulation essentially allows this virtual currency to eradicate inflation. Ed Grabianowski describes inflation as a process when a unit of currency loses value because more units are produced and put into circulation by the regulator in attempts to solve financial issues (â€Å"What Exactly is Inflation?†). Bitcoin does not face this problem since it has a predetermined supply: 21 million digitalized blocks (â€Å"Betting on the Bitcoin Buzz†). Instead of having a regulator through banks and the government, which can inherently fail, Bitcoin relies on regulation through a mathematical equation. To comprehend this regulation, the process of mining must first be understood.Show MoreRelatedAnalysis Of 2015 Advanced Micro Devices7591 Words   |  31 Pagesexcellent performing cards at low prices. At this time crypto currency mining was very profitable and these cards were the best available performance to price products. Demand for the cards soared but sellers raised the prices. This meant that AMD was not able to capture the full value that customers were paying for its products. Additionally the cards were no longer viable for gamers due to the price increase. When the crypto currency bubble burst, the market flooded with used versions of these cardsRead More2015 Advanced Micro Devices ( Amd )8126 Words   |  33 PagesAt this time, crypto currency mining was very profitable and these cards were the best available performance to price products. Demand for the cards soared, but sellers increased the prices. This meant that AMD was not able to capture the full value that customers were paying for its products. Additionally, the increase in price yielded a long-term reduction in market share because the cards were no longer viable for gamers due to the price increase. When the crypto currency bubble burst, the market