Introduction
- I intend to research the difference between the cryptocurrency payment, online payment, and the Traditional payment. I will address the question on the concept of cryptocurrency technology. I will then look at the current situation and prospects related to the use of the cryptocurrency. Finally, I will discuss about my personal experience with the cryptocurrency.
- Research question: What are the Advantages or disadvantages and the future development of the cryptocurrency?
- Significance: the cryptocurrency is changing the future of finance. I am interested in studying the unclear aspects about how the technology behind bitcoin and cryptocurrencies work. In fact, the use of digital currencies is altering our national and global financial systems. But beyond the discussions and the press releases, the overwhelming majority of people, including bankers, consultants, scientists, and developers have a very limited knowledge about the cryptocurrencies. They often fail to understand the basic concepts. For those who are interested in investing in the cryptocurrency, the most important aspect is to understand its concept and how it works. I intend to shed light on the advantages and disadvantages of this mode of payment over online and traditional payment systems.
- Hypothesis: despite the fact that there are still people who do not trust the cryptocurrencies, there are some special advantages compared with other modes of payment. The market of cryptocurrencies development will be fast and wild, once people get to understand what it entails and what it can do. The cryptocurrencies may be the future money. However, the cryptocurrencies still have some problems that need to be solved.
- Audience and Role as Writer: my research findings will target bankers, consultants, scientists, and developers who have a very limited knowledge about the cryptocurrencies. Everyone should have a basic understanding with the cryptocurrencies because of its possibility to become the future of money transfer and financial transactions. Because it might affect everyone in future, it is critical to develop a basic understanding, which is the basis for the current study. As a writer, I will assume the role of communicating my findings on the topic to the audience. I would want to shed light on this little-known subject of the cryptocurrencies.
- Methods
- At first, I would like to research and explain the concept of the cryptocurrencies. I will do a secondary study where I will review what has been published in journals, magazines, and books on the topic. I will do a thorough review and synthesis of the current research on the cryptocurrencies. I will be able to inform the reader what is the cryptocurrencies. From the findings, I will be able to make a comparison between the cryptocurrency payment, traditional payment, and the online payment, to find the advantages or disadvantages of the cryptocurrencies. Through advantages, I will discuss the different ways to use these benefits in real life, even in economic systems. Then, I will research on disadvantages to demonstrate what problem the cryptocurrency payment needs to solve in order to make them more appealing in future. Finally, I will talk about the potential for the cryptocurrencies to change the word, even become the future money with my personal point of view and my research.
- Literature Review
- Comparing cryptocurrency, online and traditional payments
- In this section, I will begin by defining the cryptocurrency, leading to the understanding of the ways that they differ from the online and other traditional payment methods. With the movement of the payment modes to the digital platforms, the cryptocurrencies are becoming the buzz word (White, 2015). Also known as digital currency, the mode of payment uses online means to send the digital coins (Sontakke & Ghaisas, 2017). The value of the currency is not dictated by the government or central bank. However, it is acceptable to the traders and merchants as the means of making payment.
- In this section, I will discuss some of the ways in which the mode is different from the conventional ones. The first aspect is that it is decentralized in nature. The traditional modes of payment are usually centralized and regulated by the government or central bank. Another difference is that the cryptocurrency is not a fiat currency, which means that it does not have any intrinsic value like it is the case with the traditional payment methods (Wang & Vergne, 2017). It is not a legal tender for any state. The value of these currencies is based on what the people decide and its acceptability in making payments.
- Advantages and disadvantages of the Cryptocurrencies
- The section offers a discussion of advantages that the cryptocurrency has over the traditional modes of payment. The mode of payment is complete in anonymity making it safe for the people who are transacting. The person has complete access to the account; hence, gaining control over what is going on in the online platform. The cryptocurrency is the best way of avoiding fraud since it cannot be counterfeited or arbitrary reversed (Wang & Vergne, 2017). Transactions using the cryptocurrencies are less expensive compared to the traditional modes because of the low transaction fees. The mode of payment is accessible to anyone without the limitations imposed by banks.
- In this part, I will discuss the downside of the cryptocurrencies. While the decentralized nature of the mode is a benefit, the failure in regulation can cause illegal trading, such as in the black market. In some jurisdictions, the use of this mode can cause tax evasions. In fact, it is always hard to track the use of the payments. Data loss can cause loss of finances and they suffer the possibility of high price volatility as well as manipulation (Blanton, 2017). The currencies are limiting in terms of check backs and refunds. In essence, the users are yet to accept this payment mode.
- Current State and Future Prospects of the Cryptocurrency
- The section contains information on the current state of the currency and the possible future. The cryptocurrency has emerged as a move away from the conventional modes of payment. Since 2009, the Bitcoin emerged in the market and has been in use. However, the trend has been changing with hundreds, if not thousands of the currency being in use today (Wang & Vergne, 2017). Since 2016, more people have gained notice of the trend and are willing to transact using the cryptocurrency. More companies and consumers are now using this mode of payment. Mostly because of the security in the transactions and the money, it is possible that even more people will accept the payments made using these currencies. Encryption techniques are becoming the usual way of doing business because of the security they offer (Taylor, 2017). There is a growth in the number of companies that are accepting the cryptocurrency, including the common names such as Microsoft, KFC Canada, Bitcoin Travels, and Whole Foods among others.
- Personal Experience with Cryptocurrency
- This part of the paper will explain the use of the mode of payment from a personal point of view. I became aware of the existence of the cryptocurrency in June 2017. It was a time when I was preparing for the assignment that I would take. Since the choice of the topic was personal, I wanted to research a very interesting topic. I found the cryptocurrency interesting enough.
- It is appealing to learn that there is a mode of payment that does not suffer the control of the middlemen. I have tried to use the currency by purchasing a mobile phone online from the Microsoft. The company is one of those who are accepting the Bitcoin as the mode of payment. Making payment via the currency was very exciting and seemed safer than using traditional modes such as the credit card. I am willing to continue making payments using this method because of the security and anonymity.
- Conclusion
- The concluding paragraph will be a summary of the information provided in the paper. I will provide a conclusion relating to the comparison between the cryptocurrency and the traditional modes of payments, including online ones. I will also recap the advantages and disadvantages of the payment method. I will summarize the current status and prospects of the cryptocurrency. Finally, I will conclude with a word about my personal experience with this trendy mode of payment.
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