The SCDS Group Global Article - Bitcoins
Bitcoin is a digital currency invented in 2008 by Satoshi Nakamoto, a pseudonym for a person or group who, apart from a 2008 paper introducing Bitcoin, have remained anonymous and absent (Carmody, 2013). The currency has been gaining wider acceptance across the globe with 30% of Bitcoin transactions going through China’s BTC exchange (Tseng, 2013). There are estimated to be an average of 50,000 to 70,000 Bitcoin transactions daily to purchase goods such as video games, books, computer servers, and more (Bitcoin is an innovative payment network and a new kind of money, 2013). The introduction of a decentralized digital currency has many potential positive and negative consequences to the global economy and the societies that participate in global economy.
One positive consequence of using Bitcoin is that it allows access to participate in the global economy without the need for a bank account and its associated banking infrastructure. Anyone with internet access via a computer or mobile device is able to set up a Bitcoin account and begin exchanging the virtual currency. This directly benefits third world countries where exchange of currencies and banking is not easily accessible.
Another positive resulting from the introduction of Bitcoin is the potential savings that can result from using the currency when transacting between two parties that do not share a common local currency. The biggest potential for Bitcoin worldwide is probably international remittances: money sent home by workers living abroad. Often such a transaction involves going through banks, wire services, and currency exchanges which each take a share of the money for processing fees. It has been estimated that the cost of remittances is 9 percent of the money transferred (Carmody, 2013). With Bitcoin many of these fees are avoided and therefore increase