Posted: August 23rd, 2022

IT and crypto currency

IT and crypto currency

The emergence of the cryptocurrencies like Bitcoin, Ethereum and Ripple have transformed the business world forever.Since its emergence, the early adopters have invested in the cryptocurrency into their digital wallets hence encouraging its rapid growth. Integrating information technology has broken down the barriers that existed in the business world forever because everyone can access the internet thus being able to read and write bitcoin blockchain. The information technology has been utilized to ensure coexistence in the financial world of every aspect of a daily routine. The cryptocurrency works to create a peer to peer network that can use the individual mining system to create the coin. The mined coins are then verified before they are transferred for ownership. The basis of cryptocurrencies lies on cryptography because it involves solving encrypted hash blocks. However, they lack central authority in the mining process has caused the authority to be conscious of the possible inflation impacts. Information technology is integrated in the mining process hence the process does not require central authority to acknowledge the presence of a coin because when all the individual clients are connected to the network the records exist as shared log onsite shared records is referred to as blockchain that everyone can have access to read and write on (Puthal et al,2018). Regardless, the system does not offer the ability to erase the information that is written on the database. The cryptocurrency system is a revolutionary system that has not existed in the business industry before. Technology has influenced the system because the system can be easily accessed and used to offer a vast array of services.
Cryptocurrencies rely on technology to ensure secure transactions that are virtually unshakable. Also, the assured transactions ensure that the verified transactions cost less as compared to the central bank. The transactions occur between individuals instead of through the bank.The funds stored in the crypto wallet can be sent in the form of bitcoin and the transaction is recorded on a ledger or blockchain (Puthal et al,2018). Technology is applied at every cryptocurrency in the blockchain systems with a large computer system doing complex mathematics to maintain tithe transactions made using cryptocurrency are grouped by the computer systems as blocks that are added to the blockchain to be solved as cryptographic function. Cryptocurrencies were created to avoid central banking but the technology can be used as the national centrally banked currency due especially due to its safe transactions (Scott,2016).
Bitcoin was created as a means to work outside the national currencies hence serving the individuals who don’t trust the central bank. The form of exchange has been used in the hyper-inflated countries like Venezuela and Zimbabwe. The transactions have been embraced because they can also be performed on cellphones hence providing more stable value as compared to their inflated national currency. However, bitcoin has been declared to have negative impacts that can occur in the cryptocurrency laws that claim that the taxable incomes are unclear (Puthal et al,2018). The tax questions have been termed as complicated because the changes on the laws cannot decide on whether the tax should be based on what the coins were worth when filed or when received. Also, privacy can cause individuals to avoid taxes.
Bitcoin is mined from scratch hence the transactions are private. The con of this is that the private transaction can lead the individuals to avoid the law during the transactions. The mining process can be accessible to anyone with a computer however the process is intensive and may require numerous amounts of resources to execute. Study shows that bitcoin is challenged because of the futures in which it’s built (Scott,2016). Bitcoin supports a few transactions per minute thus the transactions cannot be done on a national scale. Also, the value of the cryptocurrency is always fluctuating hence it cannot be considered as a functional and stable currency. Cryptocurrencies do not cut as currency because unlike the traditional currencies, the currencies lack a set value by the traditional banking system. The value of bitcoin is measured stock value hence it can maintain its state as a means of exchange but it may not be so good at the store value. For example a bitcoin today may be worth a candy bar today and a car tomorrow. The unstable levels make the currency less likely to be a national currency. However, the study shows that the future can be based on other cryptocurrencies because it is undeniable that the monetary system continues to move from the physical to the digital form. The Federal Reserve is interested in using the blockchain technology to strengthen the centralized national currency (DeVries,2016).
The blockchain technology is a top contender because the future countries will turn to cryptocurrency hence the field is a necessary investment. Adopting cryptocurrency as a national currency may not change much for the consumer except for the cheaper prices and convenient transactions. The blockchain security will enable illegal activity to significantly drop hence fostering safer transactions. Converting the blockchain into a mainstream source can be done through switching the systems from physical to digital and the banks must be connected to the Federal Reserve to enable centralization and regulation of the economy.

References
DeVries, P. D. (2016). An Analysis of Cryptocurrency, Bitcoin, and the Future. International Journal of Business Management and Commerce, 1(2), 1-9.
Puthal, D., Malik, N., Mohanty, S. P., Kougianos, E., & Das, G. (2018). Everything you wanted to know about the blockchain: Its promise, components, processes, and problems. IEEE Consumer Electronics Magazine, 7(4), 6-14.
Scott, B. (2016). How can cryptocurrency and blockchain technology Play a role in building social and solidarity finance? (No. 2016-1). UNRISD Working Paper.

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