We can probably deem cryptocurrency as the most valuable invention since the Internet. Cryptocurrencies are a great economic innovation that has the potential to revolutionize and in some ways to disrupt the current economic structure and change how banks and financial institutions are operating their business.
Bitcoin is the most popular form of cryptocurrency available today that enables digital transactions between two parties without any need of an intermediary. All the transactions are digitally recorded in blocks which act like ledgers and once a block is filled, then a new block is created. All blocks are connected to one another using hashtags and a linear chronological sequence of these blocks constitutes a blockchain.
Hence, every transaction is digitally recorded to keep security as the top priority. Even though the transactions are recorded, the information of the parties participating in the exchange is not revealed at any cost. The money can only be tracked if at all it is converted into cash. This public way of managing transactions has open doors for the possibility of a huge revolution in the banking sector across the world. The economic aspects and the social impacts of bitcoin lies with the governments and financial institutions are at stake.
In this blog, we shall discuss the social aspects of the bitcoin revolution that is sweeping our financial sphere.
1. Increased Power to the Dark Web:
Dark web is a particular section of the Internet that is not accessible through any search engines. It is a fact that what we are able to access constitute less than half of what internet actually is. Dark web can be made accessible only through special software like Tor Browser which enables anonymous searching of the internet.
In Dark web, you can actually find assassins, weapons and a lot more of the illegal stuff. By using cryptocurrencies like Bitcoins, people can do illegal transactions without giving any information about their identities. Cryptocurrencies like Bitcoins are a source to give more power to such transactions across the globe. This will ultimately result in the possibility of increased cybercrime.
As of 2015, Bitcoin was valued at $170 and as of 2017, it was valued at $2772. There have been many valleys and peaks in the value of Bitcoins and this scenario is set to continue. Due to the extreme highs and even extreme lows, this coin presents a massive possibility for speculation. Just like how the trading in shares occur, trading in Bitcoins is a huge industry and seeing the rise in hype around cryptocurrencies, it is likely to grow further.
Another reason for this phenomenon to occur is the increasing cost of investing in the stock markets. For instance, a share in Apple or Facebook can cost you around $150 while Bitcoins can be purchased infractions at a price as measly as one-tenth of a cent. This transforms it as an easy target for speculative gains.
3. Politicization of Money:
Previously, all the monetary transactions were enabled through centralized institutions like banks either directly or indirectly. Now, with the evolution of Bitcoins, the scenario has changed a lot. The power that was vested in the governments and central banks is slowly shifting to the masses. This revolutionary change in handling of transactions has the power to change the economic structure. To bring forth a sense of security and enable better scrutiny, central banks and other financial institutions maintain a record of all the transactions that are undertaken by the people. Now with the Advent of digital currencies, this economic power is in a position to be challenged by people. This has led to the creation of a new autonomous body that can facilitate transactions. Ultimately if this is adopted on a large scale, Bitcoins can lead to the politicization of money.
4. Apprehension among the Centralised banking institutions:
There have been serious discussions that Bitcoins can be used to secretly launder money outside a country. Central banks across the world have been skeptical of Bitcoins since it is an uncontrollable and unpredictable form of currency. Cryptocurrencies are leading to the formation of loopholes in the current bank’s data about the money transactions that are leading to inability to track economic activities. Crypto and Cyberspace has gained prominence as a power in itself and is therefore bringing a check on the activities of the powerful governments.
5. The formation of New Markets:
Cryptocurrencies have led to the formation of new markets. There are currencies like Bitcoin and Ethereum that have opened gates for a new kind of market which are quite unlikely to present money market that is controlled by no one. Cyberspace will rise up as a managing entity that will handle and maintain such disruptive markets. The near zero transaction cost along with certain other characteristics has made these currencies even superior to the traditional money we are using today. We can definitely say that it is just the beginning and the number of possibilities is endless.