Since last few years, Bitcoins have been ruling the sector of news and has occupied a big portion of the limelight in the various world economies. In fact, talking about Bitcoins, the term has actually been entitled as the leading cryptocurrencyand one of the best economically performing currency all over the world. With a hold of 35% staggering in the previous year, achieving the high level of recognition and power has actually not been easy for the cryptocurrency change makers.
The impact of the latter is very significant and has been proved out to be one of the most effective policies and changes in the economic structures till now. But, it is associated with crime, especially the narcotics and laundering money through the undercover routes of the black markets operated online. This has been leading to various potential risks for the participants of the diverse financial markets. This being the first stage impact, has much more to convey.
When we talk about the impact of bitcoin on the major sectors of economy entailing to banking and finance, cryptocurrency has definitely been a drastically affecting innovation in the economic structure. It has become a major revolution relating to the current trends and has changed the pattern of operation in the banking and finance sectors of the economy.
Bitcoin, being a very popular cryptocurrency in the world of digital transactions has enabled the business to business trade without the involvement of an intermediary in the medium. With ledgers formulation, the transactions are recorded digitally and can be used as the books of accounts in the times of need. The blocks for the ledger posting in the digital transaction gets transferred to the new block when filled completely and works like the traditional ways followed by the true sense of business. The blocks maintained for the records are compiled and connected with hashtags and the consecutive sequence followed formulates a blockchain. Thus, in the banking and finance structure, all the transactions are maintained and recorded for a better security and easy comprehension.
While the transactions of the merchandising are recorded successfully, but the information of the parties involving in the business activity is kept confidential to every extent. The monetary aspect involved can be tracked only when the latter is converted in the form of liquid cash.
In this way, the banking sector of the economy has faced a major revolution by extracting out the public way of managing and dealing with the transactions. The power of economy, held by the governmental institutions and the financial stakeholders is actually at venture where the power holders are wary of the flow of cryptocurrency in the economic structures.
To understand the different segments of effects, we have explored 4 ways in which Bitcoin is majorly impacting the sectors of the economy and their entailing banking and finance structures.
Inside the Dark Web: Power of online black market
Dark Web has basically referred the section of the online market which is not addressed in the search engine. This implies that these portals cannot be accessed using a search engine. Currently, what is portrayed to a commoner is not even the half of the actual internet network and collection of web existing at a particular point in time. Dark web, being the insider’s web can only be reached using special softwares such as tor browser that gives a whole wide platform for anonymous searching online through the chain of internet network.
Dark web, with its literal meaning, is actually full of dark secrets and nurtures a wide range of illegal possessions, including weapons, assassins and much more. Using the cryptocurrencies, commoners can involve themselves in illegal digital transactions without revealing any information about the personal self. So, cryptocurrencies such as the Bitcoins has actually paved out a route for empowering these type of transactions across the model of the world. This will gradually increase the rate of cybercrime and power of the dark web.
As per the records, January 14th, 2015 portrayed the value of bitcoin at $170 and that of 24th July 2017, the value drastically changed at $2772. Thus, there has been dramatically altering changes in the value of bitcoin and in the coming trends, the scenario is prospected to be continued like this anyways. Anything that changes very frequently with major gaps actually poses a greater rate of speculation. The possibility of speculating the values actually rises amongst the masses. Being similar to trading in stocks and shares, bitcoin is majorly experiencing the exceptional rise in the market of cryptocurrencies and speculated to grow to a greater extent in the coming years as well.
Another aspect relating to this digital accounting and Bitcoin is the increment of the investment cost in the trading stock markets. Considering the example of major booms like Facebook or Apple, we can comprehend that the value of a single share of these big names costs to an approximate of $150 whereas the Bitcoins are adversely cheaper as compared to them. Bitcoins can be merchandised in the one-tenth fraction. This reason is making the digital currency an easy and convenient target for aiming the speculative rise.
Taking money into political consideration
In the traditional economic structure, the monetary regulations were controlled by the central banks, in a direction as well as regulative indirect manner.
With an evolution in the digital transaction structure and the introduction of Bitcoins in the economy, the regulation techniques have changed. The power that rested solely in the hands of the government, banking and finance sectors has now been distributed amongst the masses. This revolutionary turn in the medium of handling the transactions has definitely posed some serious changes the economic structure.
To extract out security measure as well as enable the inspection, the regulatory power, i.e. Central banks along with the financial institutions are maintaining a strict record of the transactions made by the citizens. Now, with the emergence of the bitcoin, the economic and merchandising power can actually be put to question by the civilians. This regulation pattern led to the emergence of the new power managing body that can actually facilitate the transactions. This is completely digital, and if experimented on a very large scale will take money and Bitcoins into a political consideration.
Open stairs to trending new markets.
Bitcoins being the major cryptocurrency has built a strong staircase to the trendsetting new markets. Unlike the traditional regulatory market, where the power lies in the few hands, cryptocurrency is promoting the economic structure which is controlled by none and digitally efficient to regulate. Cyberspace will be held accountable as the safety guards for the cryptocurrency market and controlling the disruptive trends from time to time. Very low or no transactional costs have actually established a well-accustomed reputation for the newly emerging digital market and thus, the superiority of this currency is rising day by day in comparison to the traditional economic structures.
So, in a gist, Bitcoin, a prime cryptocurrency is impacting the market, and if taken into consideration on a large scale, will actually pose major changes in the economic structure relating to banking and finance sectors in the economy. What we can prospect from this end of the economic structure is that this is merely the commencement and there is a wide range of possibilities yet to be explored.