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Trang 1 FACULITY OF BUSINESS ADMINISTRATION ---o0o---MIDTERM TEST Module: Macroeconomics TOPIC: BITCOIN: THE FUTURE REPLACEMENT OF DOLLAR?. Methodology: About our methodology, in this st
FOREIGN TRADE UNIVERSITY FACULITY OF BUSINESS ADMINISTRATION o0o MIDTERM TEST Module: Macroeconomics TOPIC: BITCOIN: THE FUTURE REPLACEMENT OF DOLLAR? Instructor : Assoc Prof PhD Hoang Xuan Binh Credit class : KTEE203(GD2-HK1-2223) K61.3 Group : 10 No 10 Name Nguyễn Ngọc Anh Dương Ngọc Ánh Ngô Đức Dũng Đinh Xuân Dũng Đỗ Ngân Hà Trần Minh Hà Nguyễn Gia Thành Ngô Đại Sơn Trần Nhật Quang Đỗ Minh Quân Student ID 2212250008 2213250014 2212250025 2213250024 2213250034 2212250035 2211250614 2213250081 2212250078 2211250716 TABLE OF CONTENT INTRODUCTION CHAPTER 1: OVERVIEW OF BITCOIN 1.1 Bitcoin 1.1.1 Definition 1.1.2 History 1.1.3 Functions 1.2 Bitcoin transactions 1.2.1 How does Bitcoin work? 1.2.2 Bitcoin mining 1.2.3 Alternative ways to buy Bitcoin 1.3 Advantages and disadvantages of Bitcoin 1.3.1 Advantages 1.3.2 Disadvantages 10 CHAPTER 2: BITCOIN ON THE MACRO’S PERSPECTIVE 12 2.1 Impact on the interest rate and inflation 12 2.1.1 Interest rate impact 12 2.1.2 Inflation impact 13 2.2 Impact on employment 14 2.2.1 Job trends in Cryptocurrency 14 2.2.2 Four up-and-coming jobs that will open due to cryptocurrency 15 2.2.3 How’s Cryptocurrency creating labour shortage 15 2.3 Impact on stability 17 2.3.1 Cryptocurrency 'may pose a risk' to the US economy’s stability 17 2.3.2 Cryptocurrency sends US Stocks plunge 18 2.3.3 Experts still believe that the cryptocurrency plunge will not have a big impact on the economy 18 2.4 Adoption of Bitcoin by business executives 19 2.4.1 Should business executives use Bitcoin in their companies? 19 2.4.2 The acceptance of Bitcoin cryptocurrency by the US business 20 2.5 Government’s attitude and policies 21 2.5.1 Difficulty in regulating Bitcoin 21 2.5.2 Is Bitcoin legal in the US? 22 2.5.3 Government’s attitude and policies (2023) 23 CHAPTER 3: THE FUTURE OF BITCOIN 25 CONCLUSION 27 LIST OF REFERENCES 28 INTRODUCTION Money was known as one of the most valuable after commodities in the world, especially in America Most individuals deal with money in practically every aspect of their lives; whether someone purchases groceries or invests in real estate, money is required in the modern economy for these activities So, many forms of money emerged throughout human history, beginning with bartering - people would trade directly if there was no official money Therefore, in order to meet the needs of stability and convenience, fiat money is the main source of money, a legal tender protected by the government to create the muchneeded trust in money and its value Over the ages, attached with the development of technology, the American economy also has some steps ahead which expand to online stock exchanges or something like market on the web, new types of money have been invented And one of the most controversial new innovations of money is Cryptocurrency With people adapting to changes or new trends in a fluctuating market, the term ‘cryptocurrency’ is no longer extraordinary It’s a form of internet currency often called digital money or cyber currency You usually exchange cryptocurrency with someone online, with your phone or computer, without using an intermediary bank The most crucial aspect is that it’s not issued by a central bank, nor is it protected by regulations or laws, leaving it impervious to government interference We know, in some countries, they’re not legal but we cannot deny that digital currencies have been receiving public attention during past years The most well-known and contentious cryptocurrency is Bitcoin, launched in 2009 Hence, our team aims to study “Bitcoin: The future replacement of dollar?” for the period 2009 to now in America and analyze the effects on the US economics as well as predictions about future of it Subject and scope of the study: • Subject: “Bitcoin: The future replacement of dollar?” • Scope: 2009 to now in the United State Reasons to choose the topic: In fact, the popularity of bitcoin has expanded to many countries in the world such as Canada, UE, Japan, However, Bitcoin has already boomed in the US Around our lives, we can see that seniors, even in our university, are approaching and mining bitcoin with their knowledge And the topic ‘Future of bitcoin’ in America makes us feel really interested We choose it as the theme to discuss and show you the basics about this topic Methodology: About our methodology, in this study, we will analyze and research available information about cryptocurrency and bitcoin at some points: their impact on inflation, interest rate, the respondents from the government and deduce the conclusion as well as predict the future value of them Besides, we discuss these questions: How does Bitcoin work, its impact on macroeconomics, its prospect for the future, and whether it has the potential to become a well-established mainstream currency, or can we say it will fully replace fiat money? CHAPTER 1: OVERVIEW OF BITCOIN 1.1 Bitcoin 1.1.1 Definition Bitcoin is the first and most widely recognized cryptocurrency Bitcoin is a form of digital money that exists independently of any government, state, or financial institution, can be transferred globally without the need for a centralized intermediary, and has a known monetary policy that arguably cannot be altered The Bitcoin protocol is built on a “blockchain”, a mechanism to achieve global consensus on the state of a periodically updated public transaction ledger Bitcoin’s pseudonymous developer, Satoshi Nakamoto, described it as “a new electronic cash system that is totally peer - to - peer, with no trusted third party” in a research paper introducing the digital currency Bitcoin is one of the first digital currencies to use peer-to-peer (P2P) technology to facilitate instant payments Peer-to-peer (P2P) refers to the exchange of information, data, or assets between parties without any involvement of a central authority Bitcoin can refer to the Bitcoin software protocol as well as to the monetary unit, which goes by the ticker symbol BTC 1.1.2 History a Creation: 2008 - 2009 Bitcoin is based on the ideas laid out in a 2008 whitepaper titled Bitcoin: A Peer-to-Peer Electronic Cash System The paper detailed methods for "allowing any two willing parties to transact directly with each other without the need for a trusted third party." The technologies deployed solved the 'double spend' problem, enabling scarcity in the digital environment for the first time The listed author of the paper is Satoshi Nakamoto, a presumed pseudonym for a person or group whose true identity remains a mystery On January 9th, 2009, Bitcoin was first used after it was released as open-source software, when Nakamoto mined the starting block of the blockchain The first test transaction took place about one week later when Satoshi Nakomoto sent 10 BTC to Hal Finney, with a transaction cost of BTC At this point, Bitcoin had no monetary value Document continues below Discover more from:tế Vĩ Mô Kinh KTE203 Trường Đại học… 999+ documents Go to course 40 câu kỳ Vĩ mô - Đại học Ngoại… Kinh tế Vĩ Mô 98% (135) BT Chương Tổng quan KT học vĩ mô Kinh tế Vĩ Mơ 100% (13) Tìm hiểu Siêu lạm 22 phát Zimbabwe Kinh tế Vĩ Mô 100% (13) Giáo trình - Giáo 120 trình kinh tế vĩ mô Kinh tế Vĩ Mô 93% (44) Đáp án câu hỏi trắc nghiệm Kinh tế vĩ m… Kinh tế Vĩ Mô b Growth 100% (9) Kinh-te-vi-mo de luyen tap rat hay m… On May 22nd, 2010, the first transaction was made when12Laszlo Hanyecz agreed to pay Vĩ the monetary 10000 BTC for two pizzas by Papa John’s which worthed $25.Kinh At thetếtime, 100% (9) values were negotiated by individuals on the Bitcoin forum Mô In 2011, miners and coders started to build other networks such as Ethereum and Litecoin and began to improve the code for Bitcoin’s blockchain, adapting it for different uses The wider applications attracted more users, which contributed partly to the rise in Bitcoin’s perceived value In November 2013, Bitcoin broke $1000 for the first time In addition, two companies, Robocoin and Bitcoiniacs launched the world’s first Bitcoin ATM in Vancouver, Canada, allowing clients to convert cash into crypto But then, one of the largest bitcoin exchanges, Mt Gox, announced bankruptcy, causing Bitcoin's price slumped through 2014 and touched $315.21 at the start of 2015 From 2017, the number of businesses accepting Bitcoin continued to increase, such as NHK and Bitpay Bitcoin gained more legitimacy among lawmakers and legacy financial institutions In December 2017, the price of Bitcoin reached an all-time peak of $19,783.06 (2) Governments and economists took notice and began developing cryptocurrencies to compete with Bitcoin However, in 2018, Bitcoin’s price started to decline steadily throughout the year to a low of $6,635.84 by mid-December in 2019 When the economy shut down due to the COVID - 19 in 2020, Bitcoin’s price bursts into activity once again In October 2020, Paypal announced that it would allow its users to buy and sell Bitcoin on its platform, although not to deposit or withdraw Bitcoins At the close on Nov 23, Bitcoin was trading for $19,157.16 Bitcoin's price reached just under $29,000 in December 2020, increasing 416% from the start of that year The price of Bitcoin again reached a new all-time high in 2021, with value exceeding over 65,000 USD in February, April and November 2021 as a result of Coinbase events In 2022, Global economic factors that stemmed from Russia's War in Ukraine negatively affected the price of Bitcoin On April 22, 2022, its price fell back down below $40,000 It further dropped to as low as $26,970 in May after the collapse of Terra-Luna and its sister stablecoin, UST, in addition to a shedding of tech stocks 1.1.3 Functions At its most basic level, Bitcoin is useful for transacting value outside of the traditional financial system People use Bitcoin to, for example, make international payments that are settled faster, more securely, and at lower transactional fees than through legacy settlement methods such as the SWIFT or ACH networks In the early years, when network adoption was sparse, Bitcoin could be used to settle even small-value transactions, and so competitively with payment networks like Visa and Mastercard However, as Bitcoin became more widely used, scaling issues made it less competitive as a medium of exchange for small-value items In short, it became prohibitively expensive to settle small-value transactions due to limited throughput on the ledger and the lack of availability of second-layer solutions This supported the narrative that Bitcoin's primary value is less as a payment network and more as an alternative to gold, or 'digital gold.' Here, the argument is that Bitcoin derives value from a combination of the technological breakthroughs it integrates, its capped supply with 'built-into-the-code' monetary policy, and its powerful network effects In this regard, the investment thesis is that Bitcoin could replace gold and potentially become a form of 'pristine collateral' for the global economy Another popular narrative is that Bitcoin supports economic freedom It is said to this by providing, on an opt-in basis, an alternative form of money that integrates strong protection against monetary confiscation, censorship, and devaluation through uncapped inflation Note that this narrative is not mutually exclusive from the 'digital gold' narrative 1.2 Bitcoin transactions 1.2.1 How does Bitcoin work? The Bitcoin system consists of a network of computers (also known as “nodes”) that run Bitcoin’s code and record its blockchain The system can not be tricked because all computers running the blockchain have the same list of blocks and transactions and can observe these new blocks as they are filled with new Bitcoin transactions in real time A Bitcoin transaction is a value transfer that is recorded in the blockchain between two Bitcoin wallets Bitcoin wallets store a private key, also known as a “seed”, which is used to sign transactions and provide mathematical proof that they came from the wallet’s owner The signature also stops anyone from altering the transaction once it has been issued All transactions are broadcast to the network and, through a process known as mining, are usually validated within 10-20 minutes (Source: “Bitcoin: A Peer-to-Peer Electronic Cash System”) 1.2.2 Bitcoin mining Bitcoin mining is the process of adding new transactions into circulation Bitcoin miners use software that accesses their processing capacity to solve transaction-related algorithms In return, they are awarded a certain number of Bitcoin per block and the process begins again This entices cryptominers to keep solving the transaction-related algorithms, supporting the overall system The process is called proof of work It is used to confirm pending transactions by including them in the blockchain It enforces a chronological order in the blockchain, protects the neutrality of the network, and allows different computers to agree on the state of the system To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network These restrictions make it impossible to change prior blocks because doing so would invalidate all subsequent blocks Mining also provides a competitive lottery, preventing anyone from readily adding new blocks to the blockchain in a sequential order In this way, no individuals can control what is included in the blockchain or replace parts of the blockchain to roll back their own spends 1.2.3 Alternative ways to buy Bitcoin Apart from mining, there are different ways to get Bitcoin People can buy Bitcoin directly from a crypto trading service or venue, which are companies that enable individuals to buy and sell through setting up an account Three of the most popular Exchange softwares are Coinbase, Kraken, and Gemini Each of these exchanges offers access to trading with the major cryptocurrencies, as well as different alternative coins, but they also have different features and trading fees Another way is to use Bitcoin ATMs Bitcoin ATMs act like in-person Bitcoin exchanges Individuals can put money into a machine to buy Bitcoin, which is subsequently sent to consumers’ online wallets Bitcoin ATMs have grown in popularity in recent years, with even Walmart Inc becoming involved Purchasing cryptocurrencies using ATMs is a costly option A purchase fee and a conversion fee from fiat money to Bitcoin are both charged when buying Bitcoin through an ATM Most Bitcoin ATMs charge a fee between 9% and 12% to buy Bitcoin (10) While Bitcoin transactions from crypto trading services or from Bitcoin ATMs are decentralized exchanges with anonymity, peer to peer (P2P) exchanges provide a more direct connection between users LocalBitcoins is an example of such an exchange After creating an account, users can post requests to buy or sell Bitcoin, including information about payment methods and price They allow users the opportunity to search for the best