Essay Example on Bitcoin the elusive mysterious Cryptocurrency

INTRODUCTION Bitcoin the elusive mysterious cryptocurrency grabbed headlines all over the globe a few years ago In early 2009 someone using the pseudonym Satoshi Takemoto announced on a cryptography listserv the release of a new open source online currency system which he or she called Bitcoin Bitcoin has gained widespread recognition through online media and despite high volatility it remains a marginal but distinctive financial asset Moore and Christin 2013 It is undoubtedly the most significant intervention in the field of Cryptocurrencies electronic currency Many say bitcoin is a cryptocurrency which is clearly and indisputably a gigantic bubble that s set to burst But what exactly is a bubble A speculative bubble is a peculiar kind of fad or social epidemic that is regularly seen in the speculative markets not a wild orgy of delusions but a natural consequence of the principles of social psychology coupled with imperfect media and information channels Robert Shiller 2013 Rogoff 2017 mainly argues that this bubble will burst under government pressure This essay aims to critically evaluate the arguments present in Rogoff s article by drawing on claims from other secondary articles and my research on the topic SECTION 1 SUMMARY OF ROGOFF 2017 

Unlike traditional databases which are typically owned by big institutions a block chain does not belong to anyone and with an entire network of people monitoring it cheating the system by faking documents transactions and other information is nearly impossible CNBC It is a decentralized public ledger that tracks every transaction in bitcoin s history In his article Rogoff confidently states that the Block chain technology will thrive even if the price of bitcoin collapses The block chain is the key innovation that makes Bitcoin both unique and groundbreaking SECTION 3 GOVERNMENT AND BITCOIN Rogoff s main argument in the essay is that the bitcoin bubble will burst if the government steps in to regulate it Central Bank of the country is responsible to regulate inflation and deflation in the economy through its power over the fiat currency With Bitcoin challenging its way and getting more attention from the people than intended Governments across the globe have been reacting with this differently In this section I have highlighted the contradictory view of the Japanese and Chinese Government towards Bitcoin JAPAN Japan is arguably the most cryptocurrency positive country and has managed to become so by recognizing bitcoin as a legal means of payment but not as a traditional currency Bitcoin trade in Japan accounts for about half of the global trade volume That number has surged since the government passed a new law earlier this year recognizing bitcoin as a legal form of currency CNBC 2017 Another factor contributing to a bitcoin boom in Japan ultra low interest rates from the central bank that has left investors looking for places to find returns on their cash Daily Mail 2018 Thus bitcoin serves as the best option for an investment which gives great returns