BITCOIN WILL NOT BE A MAINSTREAM
Before coins and banknotes were used for money, there were times when people used
shells and rice. Cloths such as silk and gold were also used as a reference item, which acted as a
form of money when exchanging with other objects. As one can see, the form of money has
always been changing. In the future, could we be able code currency instead of using physical
dollars as money? This vague idea gave rise to the expectation that it might become reality after
“Bitcoin” released. “Bitcoin” is the first decentralized cryptocurrency that you can use through
the internet. It is also a transferable value inside the digital world. Bitcoin was created by Satoshi
Nakamoto as a response of financial crisis in 2007 and 2008. Initially, the US Federal Reserve
offered an alternative to printing more dollars to overcome the financial crisis at the time, a crisis
that occurred because of the reduced value of real assets in the world. The traditional model of
the central banking system in the US means that the Federal Reserve has the responsibility to
print and control money. The central bank of each country prints new money according to
situations inside and outside of the country, such as changes in exchange rates and interest rates.
However, bitcoin has no owner. It is not cash operated by a particular individual or company.
The operating system is P2P (peer-to–peer network), distributed amongst the users’ computers.
There are miners who mine bitcoin through solving the problem, and people who are not miners
are allowed to pay for a bitcoin. People do not even need ID cards to make bitcoins. Currently in
the market, there are various opinions about bitcoin. In this paper, I want to explore the reasons
why bitcoin cannot go mainstream. Problems such as ubiquity, political uncertainty, and
dislocation of jobs that are caused by decentralization of bitcoin are the factors why bitcoin can’t
become the mainstream form of money.
Some may argue that bitcoin will become the main source of transaction in the near
future. As I mentioned earlier, anyone can open a bitcoin account just by opening up their
computer and internet, without any intervention from the central bank. As it is a decentralized
banking system, bitcoin minimizes and simplifies the process of payment and transaction, since
individual transactions are carried out directly through the P2P (peer-to-peer) networking system.
For example, in the economy today, if someone in Korea and someone in the United States are
going to trade, they worry about factors such as delivery business days, the exchange rate and
commissions since they are using two different banks and currencies for trading. Using bitcoin,
however, will mitigate this concern; they do not have to care about such factors because bitcoin
works with a specific set of codes, not a company or an institution. The decentralized system of
bitcoin is essential not only to make transactions cheaper and easier, but also to prevent
centralized failures. Since the center controls, manages, and takes care of everything with the
centralized banking system, problems at center can endanger everyone in the wave. Bitcoin with
a decentralized system is not influenced by any outer element since there is no middlemen for
