Acceptance and Rejection of Bitcoins
Just like any other currency, the biggest hurdle of Bitcoins is market trust. Since the establishment, the price has been widely varying, also centrally to fiat or the US dollar which backed up by physical gold many consumers do not comprehend what Bitcoin is, and also many organizations do not put trust in the unstable currency and how it works. However, Bitcoins are not issued by the central authority and again the consumers do not understand how computers generate the currency. Nonetheless, many organizations do not put their trust in Bitcoin’s privacy because every transaction is publicly visible and one can see the balance of another user even without knowing his or her name. This can increase the targets of thieves for instance the one which happened in 2014 where over seven hundred thousand Bitcoins were stolen and left the former Bitcoin exchange so bankrupt. Moreover, some consumers do not believe whether Bitcoins are money because it is fully dispersed. The US Internal Revenue Service’s once expressed that people should take Bitcoins as property but not as currency.
Thus many organizations consider Bitcoins to be playing an important role in the new digital entrepreneurial field whereby all transactions readily available in the electric ledger and also the public ledger can securely provide track assets ownership and so it becomes possible for many new users to manipulate ( Connolly & Kick, 2015). Currently, Some Bitcoin-like technology has provided services like security settlement and also the inter-bank settlement of the fiat currency whereby at least 10 out of 50 banks have an active integration for payments together with settlements. Nevertheless, some organizations accept Bitcoins because in case of payments one can transfer Bitcoins anywhere in the World without using counterparties or even without acquiring any authority from the organization or government. However, the only necessity is the passcode to authorize a ledge entry ( Connolly & Kick, 2015). One the other hand, other companies do not consider Bitcoins simply because when a recipient is obtaining value from it in short term, then there must be a merchant who will accept, a buyer for them, or sell the Bitcoins on the exchange. All that process creates the risk of being exposed.
Reports argue that Bitcoin does not receive backup from governments and it has no value which has created some confusion in many organizations. Insufficient participation by investors has led to the exchange rate to depend on the rate of adoption and also the level of demand. Fundamentally, Bitcoin has its original feature which provides encouragement for use of technology through its initial phase of development and therefore overcoming problems which are encountered by many innovations due to strong indirect network effects and that is in case new payment systems. (Connolly & Kick, 2015). However, research was conducted in 2014 and examined how the price of Bitcoin was estimated to the general interest in it and again some reports show positive and negative tone about Bitcoins. Besides the theory of interaction between payments together with the investment role of Bitcoins has not been contemplated.
Conclusions
The security of Bitcoin is built on the trust of mathematics laws and also in the faith of technology. Organizations using Bitcoins become an expression of opposition to the traditional financial sector which has already lost their trust in the current financial pandemic. Mainly, possession of Bitcoin does not generate any cash flow so this means that there is no determination of its value. Many organizations do not prefer Bitcoin because of hacking attacks which are aimed at the Bitcoins systems. Some dangers come from users who lack technical knowledge. Similarly, there is insecurity in some organizational participants in their systems so the permanent transactions may create losses which are may be difficult to recuperate. Currently, no theory delineates how Bitcoin should be priced, and still, there are many obstacles in the path of Bitcoin.