The in society. An innovative infrastructure for digital

The future
of cash has limitless possibilities with new alternatives and ideas being
developed in digital transactions and financial services industry with now cryptocurrencies
rapidly gaining popularity and prominence in society. An innovative
infrastructure for digital exchange and the future of the financial sector
could be through Bitcoin, a private synthetic cyber currency was anonymously
released in 2009 following the global financial crisis. The aim of Bitcoin was
to produce a global market which can be used for a range of purchases and
payments of goods and services. Bitcoin has little intrinsic value and initially
was only worth pennies to the dollar to currently where the price has peaked
well above $15,000 to the dollar in 2017 shown in figure 4, making it a hot
topic in the future of finance. Bitcoin is the most successful digital currency
and was the world’s strongest currency between 2010-2013, even outperforming
gold(Tellez 2016). There recently surge in interest in blockchain technologies
and cryptocurrencies has arisen from it being pseudonymous and decentralized. Also,
capital controls and extreme costs with associated physical currencies which
can be unstable following the global financial crisis in 2008, has made Bitcoin
prevalent and acknowledged amongst developing markets and emerging nations as a
fluid and low-cost substitute. The Myriad of digital cryptocurrencies
accessible can signify rather than the movement to a central one world currency
that’s an exit opposed to our current system of centrally controlled fiat
currency.

 

Figure 4-Price of Bitcoin

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Source: Bgr
(Mills 2017)

Physical
cash is in decline, Bitcoin could be pivotal when hedging against monetary and
economic policies. Bitcoin resides fully on the public domain therefore it
cannot be bullied or coerced into submission by central banks or government
institutions as they can’t implement or loom the possibility of financial
threats or prosecution. Bitcoin has potential to benefit society in combatting
any downsides in going towards a cashless society. Remittance is a key
influence on Bitcoin’s growth globally as Bitcoin is very efficient due to it
being borderless. This allows distant families to access and send funds
instantly with a 2% transaction fee rather than the 10-20% fee charged by banks
(Tellez 2016).

However,
Bitcoin has many issues surrounding it, from the rumours of it being used in
the black economy for illegal activities have resulted in global restrictions
with several currencies banning Bitcoin such as the Yuan. Bitcoin is slowly
integrating globally but could struggle as Bitcoin cannot implement price
transparency for products as it has an unstable and fluctuating exchange rate.
Just imagine, the price a loaf of bread could be higher or lower simply
depending on the time or day it’s purchased. We must remove the stigmas and
uncertainty surrounding Bitcoin and cryptocurrencies and society must be more
trusting in their usage in the future for society to keep striving to become
cashless. Even though society has been losing confidence in central banks and
governments, cryptocurrencies being very young it may be too early to be
certain their role for a cashless society.