The first fear of States regarding Bitcoin is lack of regulation of this new digital currency. This fear seems logical because Bitcoin is being touted as a boon to crime. Which is in reality largely questionable… The real risks would be rather strictly financial, in particular its extreme volatility, at least for the moment. Because in the longer term, the non-negligible advantage of this digital currency is its production limit. We can welcome the initiatives of Japan in favor of the use of Bitcoin as a means of payment. What does all this mean in concrete terms, and what could this imply for the economy of Japan ? Explanations:
Bitcoin is a virtual cryptocurrency operating in P2P. It is not constrained to any central banking establishment nor to the tiny monetary policy which would be able to emanate from it. No entity or person has a monopoly on its currency. No banking institution produces it. Bitcoins are generated on the basis of a computer program. Any user who installs a Bitcoin program on his pc can join in the smooth running of the system. Bitcoin is totally decentralized, and today escapes taxes and other public taxes. Countries therefore feel that they are losing one of their sovereign roles against this currency, and therefore feel that they are threatened by this currency. Japan, however, has a different approach, geared towards innovation, and has officially recognized bitcoin as a new legal payment method.
Photo credit: CC Scottks
Bitcoin, in part due to the lack of regulation, is indeed subject to much speculation. As long as a positive or negative announcement is made, the price of the currency can rise or fall in a very short time. The Swiss financial website Bilan relayed the proliferation of alerts in the face of the bitcoin boom. However, it is precisely this hyper-volatility that can attract ever more Bitcoin followers, motivated by the lure of quick wins and stimulated by this daily roller coaster on cryptocurrency trading platforms.
The currency being almost out of control, it is both tool and flagship target of cybercriminals: several attacks are recorded at the level of certain users, who can see their “wallet” (virtual Bitcoin wallet) emptied in no time. And indeed, the State can for the moment almost nothing to protect people against these risks. The State is deprived of its protective role vis-à-vis this currency. But it’s not just cybercrime attacks that cringe. Bitcoin, thanks to the anonymity of transactions, serves as a gateway to money laundering, such as the famous case of the Liberty Reserve site, or to the financing of terrorism and numerous illicit activities … All this without the State s ‘immediately report it.
A bitcoin distributor! Photo credit: CC Simon Fraser University
The creator (s) of Bitcoin, still anonymously under the nickname ” Satoshi Nakamoto », Specified that the mathematical formula on which the algorithm works fixes a limit of 21 million units maximum created. This expected maximum, associated with the totally decentralized dimension of the currency, means that Bitcoin cannot be subjected to any devaluation driven by a State or a central bank (“spin the printing press …”). Bitcoin therefore has something that other state fiat currencies do not: total freedom. This partly explains why some specialists believe that bitcoin has the potential to establish itself as the currency of the future, universally adopted.
Bitcoin never stops talking! Created in 2009, virtual currency has been the subject of much ink since day one. Between its detractors who constantly find new flaws in it, and its defenders who make it the universal currency of the future, Bitcoin has never been so controversial. As for the States, even if their positions are very divergent throughout the world, the tendency is rather to worry. But is he really a danger? Basically, it’s mostly up to users to decide …
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