The Bitcoin

“Bitcoin will do to banks what email did to the postal industry”-Rick Falkvinge, Founder of the Swedish pirate part.

Cryptocurrencies appeared in the mid-1990s, they are simply digital gold(money), safe from any political influence. They are an encrypted and encoded data, that allows us  to make decentralized and mysterious online payment for dark economical activities .

What we mean by decentralized, as in outside the control of the national bank and the government. Cryptocurrencies were the opening gate for a new powerful market for investors.


We have different kinds of cryptocurrencies, but the most globaly traded is the Bitcoin, it is virtual money that alludes to no one unlike conventional money “dollars” “euros”… that is controlled by the state.

bitcoin-2730220_960_720

The famous Bitcoin was created in 2009 by Craig Wright, an Australian business visionary who took cover behind the pen name “Nakamoto” and revealed his identity on 02/02/2016.

graphic showing the variation of bitcoin through the years

Bitcoin… Legal or Not?

While tax authorities are still studying this phenomenon, one question is being tossed around . Is bitcoin legal?

It all relies upon the area and activity of the client. Bitcoins are not managed by any national bank. They are made through a PC  known as mining. Most nations have adopted a sit back and watch strategy with the legality of bitcoin, others have consented to the use of bitcoins. However, no  global law has been assigned to affirm if it’s legal.

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world map that indicates which countries allow the use of bitcoins
the use of bitcoin is authorized
the bitcoin is less permissible
The authorities are hostile about the use of bitcoin
The authorities have not spoken about the use of bitcoin




Pros & Cons of bitcoin:

You should be aware of the pros and cons to engage in the world of bitcoins

Advantages:

  • Global and fast: the exchange is done in seconds.
  •  Decentralized: It does not belong to anyone
  • A cash intended for the Internet: Bitcoin was conceived from the Internet. Therefore, we can update old and expensice systems and increase e-commerce.
  • Secure: Cryptocurrencies are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography makes it impossible to break this scheme. A Bitcoin address is more secure than Fort Knox.
  • Permissionless: You just download the software for free and then you can  receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.

Disadvantages:

  • The volatility of the bitcoin: the currency is still in development, no one can know if the future will be favorable to it. For now,the  number of bitcoins accepted  is low.
  • The system is anonymous, nothing links the account number to the actual identity of the user.
  • Easy to lose: with bitcoins what is lost is not recoverable because there is no mechanism if such case presents itself.
  • Virtual currency has often been associated with illegal trade practices such as money laundering.

The Dark Web:

Bitcoin is the  cash of the Dark Web – available just by Tor. But just how much do we know about these new underground economies?

While officials celebrated Silk Road’s  takedown in October 2013, with a drug listing of 13,000, copycat sites were already springing up in its wake to fill the demand.

Here’s what available data can tell us about bitcoin on the Dark Web:

Nearly 6% of the 100,000 consumers who took part in the 2015 Global Drug Survey, said they had bought drugs from the Dark Web, while over half of respondents said they consumed the same or less than before, 49% said the the Dark Web had allowed them to experiment beyond their ‘offline’ usage.

While drugs are still the most common item found on the Dark Web, there is other illegal things for sale.  It includes arts, hacking services, weapons, and  passports.

Silk_road_payment


Cryptocurrencies: Dawn of a new economy

  • Volatility: It‘s common that a coin gains 10 percent a day – sometimes 100 percent – just to lose the same at the next day. If you are lucky, your coin‘s value grows up to 1000 percent in one or two weeks.
  •  Politicization of Money:The power that was vested in central banks is shifting to the masses, which can  lead to a new autonomous body that can facilitate transactions.

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  • Apprehension among the Central Banks:Bitcoins can be used to secretly launder money outside the country. All central banks are wary of Bitcoins,  leading to loopholes in bank’s data and the inability to track economic activities.
  • The Emergence of New Markets: Currencies like Bitcoin and Ethereum have opened gates for a new kind that is controlled by no one.

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The Future in Lebanon:

The market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerge, old die, early adopters get wealthy and investors lose money.

On the long term , we will resort to virtual currency, since users are becoming numerous with the future inclined to the internet and the demand for Bitcoin is increasing.

For the near future, Lebanon is not ready but is developing and adapting because it  can not be isolated from technological development.

 

 

 

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