Question

This overall topic presents a treasure trove of possibilities in terms of further investigation and analysis. One could delve into various applications of block chain technology – e.g., cryptocurrencies such as bitcoin. Or one could delve into the open source development model, and examine the process entailed and required of participants to be active and meaningful contributors. Or for those who want to get their inner geek on, one could dig into the basic technology entailed.

Regardless of which thread you decide to pull further on, please put together a 3 to 4 page, double-spaced paper where you share what further investigation, analysis, and synthesis you did related to the aspect of block chain technology that interested you.

Answer 1

Block chain technology – Bitcoin

Bitcoin cryptocurrency open-source block chain technology emerged in 2009 on speculative grounds. Bitcoin appreciation in commodity markets trading is tremendous recording the fastest growth but have liquidity issues due to its high volatility. Bitcoin cryptocurrency is considered disruptive as it bypasses the financial intermediaries challenging the banking system but serious flaws and high risks are associated with this block chain technology

Analysis – Pros and cons of Bitcoin block chain technology

The advantages associated with bitcoin include

Full control over the capital – The merchants especially venture capitalists (VC) are overwhelmed with this block chain technology using the bitcoin to have full control over bitcoin transactions with complete elimination of overheads, administrative expenses and chargebacks. VC and investors view bitcoin block chain technology as an economic bubble and take a high risk of investing in bitcoins

Reduced remittance – This is another major advantage of bitcoins reducing the overhead costs and remittances to a considerable extent with a sole proprietary verification channel. The reduced remittances of bitcoin are cited as one of the major reasons for the high trading volume of bitcoins on a daily basis in the commodity market

The disadvantages associated with bitcoin include

Safety issues – Privacy is at stake as there are no regulations for bitcoin and most of the bitcoin transactions occur in casino and derivatives market etc. The absence of regulations puts investors at high risk performing bitcoin trading with increasing frauds and bankruptcy instances to the tune of $450 million recorded due to bitcoin transactions. Another major safety issue with the bitcoin block chain technology is the threat of hackers stealing bitcoins from investors. Once the investors lose the bitcoins to hackers, it is not possible to recover the lost bitcoins as tracking the financial transactions and fraudsters become difficult in an unregulated system

Reliability issues – The bitcoin block chain technology could be completely paralyzed with a single bug as the end-users of the bitcoin run the same code across multiple systems indicating that the technology is not reliable. A malware or bug could disrupt the bitcoin mining process and the hacker or attacker gets full control of the block chain system

The above analysis indicates the need for banking regulation and recognition from the banking system to be considered reliable and authentic for financial transactions