Initially, many people thought a bitcoin was science fiction or something used by drug dealers and shadowy hackers looking to evade authorities. Starting in 2017, bitcoins emerged as a legitimate digital currency and quickly became the darling of Wall Street Investors. In less than two days in December 2017, the price of one unit of the digital currency jumped to $16,000, briefly hitting $19,100 on some exchanges. Then, a week later, the value of the bitcoin plummeted 25 percent. By February 2018, bitcoin plunged below $8,000, and four months later, the value of the bitcoin was around $6,500.

Peoples' confidence in the security of bitcoin was shaken when it was reported that nearly $70 million worth of the currency had been stolen from a cryptocurrency-mining service called NiceHash following a security breach. Two weeks later, Koren-based Youbit went out of business after experiencing a second hack where digital thieves stole one-fifth of its clients' bitcoin holdings. 

Yes, despite these risks, bitcoins continue to hold considerable potential as a new form of currency. Because bitcoin functions on a technology called blockchain, a relatively secure, non-record-based ledger form of accounting using cryptography, it offers a quicker and cheaper option for processing financial transactions. Bitcoin is considered desirable since the blockchain technique protects against things like identity theft and payment fraud more thoroughly than a credit-card transaction ever could.

Others argue that bitcoin is riddled with problems, including the potential for tax evasion or to support illegal or unethical transactions. Perhaps the biggest issue with bitcoin is the general lack of understanding surrounding the cryptocurrency. Several studies have shown that people, including bitcoin users, do not really understand how bitcoin works and whether or not it is secure, as the incidents of cyberhacking attest. 

 

Required: 

What would be the advantages and disadvantages if Bitcoin is used as our primary method of currency in the future? Please discuss an example where electronic may be helpful or hurtful to a company. currency.