Bit Coins

by Xiu Jing, Min Yi, and Pei Ling

Bitcoins are electronic currency and invented by Satoshi Nakamoto. It makes the international payments are easy and cheap. First, install the apps on computers or mobile phone. The blockchain is a shared public ledger on which the entire Bitcoin network relies. Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. A transaction is a transfer of value between Bitcoin wallets that gets included in the blockchain. Bitcoin wallets keep a secret piece of data which is used to sign transactions. Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the blockchain. bitcoins are highly controversial because they are used as a form of money. There is more than two billions dollar worth of bitcoins in existence and the price determined by demand and supply.

The liquidity concepts are the ability of an asset to be converted into cash and can be bought or sold at its fair price. Bitcoin has a significant grown from 50 bitcoins to 13,000,000 in five years. There have five factors that influence the liquidity of bitcoin which is exchange acceptance, ATM or payments of card, regulation, and awareness. Bitcoins are truly taking a place in the financial world.

The unique design of bitcoin also bring uncertain risk or dangerous that never meet before which is the security risk that caused high risk from hackers to stolen the bitcoin because of the transaction has not record and control as well as traditional currency. Next is bitcoin is not a legal tender when the people decide not to use it and it may become a worthless and high risk of volatility because of unstable movement price for bitcoin. Insurance risk that does not insure by government and fraud risk which may cause the double-spending incident occur also faced by bitcoin.