Cryptocurrency: Past Reflections

By Rocky Fodali, Trending Writer

Cryptocurrency is a very confusing, yet very lucrative part of the modern-day economy. From a theoretical standpoint, cryptocurrency arose from a historical distrust of the centralized money process in the world. In the world economy, central banks control monetary policy, which has frustrated people for centuries. People felt that they had no control over their money, as changes to monetary policy could easily lead to an economic dip and a subsequent loss in money. Cryptocurrency offered people with this decentralized medium of holding currency where no external force had control over money.

During the most recent recession in the U.S., Bitcoin came to the forefront. With a widespread loss of faith in central authority, Satoshi Nakamoto’s Bitcoin offered people an option outside of the traditional financial process. No central bank governs Bitcoin, as machines work together to process transactions. No one controls money, and therefore, money will not disappear overnight as it did during the recession. This decentralization is not the only reason for the popularization of Bitcoin though. In comparison to a bank account, Bitcoin accounts are much more desirable, as they are easier to set up and supply the user with anonymity. Addresses are not linked to the personal information of the user, which is why many college students utilize this cryptocurrency to purchase things like fake IDs. However, there is still a sense of transparency, as there exists Blockchain that is a ledger of all transactions. Thus, Bitcoin offers people exactly what they are looking for in the financial process. People want control, clarity, and ease in transactions. They do not want to worry about an authority affecting their bottom line or a bank complicating investments. Naturally, Bitcoin provided this medium to break from the mainstream and cause a sort of financial revolution.

With any revolution, support is not always unanimous or widespread. Why should people

trust putting money into such a complicated digital currency? How could this new system be trusted over a system that lasted the test of time? Many, of course, did not trust it at first. However, the enormous profits reaped from the rise in value of Bitcoin is changing the minds of people. With its emphasis on decentralization and technology, Bitcoin ushers in a new economic period where people seek the less traditional route.

 

A version of this article appeared in the Tuesday, March 20th print edition.

Contact Rocky at

randolph.fodali@student.shu.edu

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