Comparison between virtual currency and fiat currency

bitcoin

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The virtual technology Bitcoin uses a revolutionary technology called block chain. The scope of application is not limited to virtual currencies, and various companies, financial institutions, and governments around the world are conducting field trials of various services using this technology. In the final article, we will introduce some practical examples of block chain, including virtual currencies. Block chain technology is currently being tested in other countries with the aim of applying it to various areas, including financial transactions. However, looking at the world, there are some that have already started as businesses. Here, some practical examples are introduced.

Use for virtual currency

The virtual currency Bitcoin is the first block chain technology to be used in the world. Bitcoin has been used since around 2009, but it is said that the number of types of virtual currencies has already exceeded 700 as of 2017, and the market capitalization has increased significantly since 2017.  Bitcoin has a large share among them. In virtual currencies including Bitcoin, block chain is used as transfer record of value information.

Since 2017, block chain-based financing Initial Coin Offering has been prospering. It is possible to raise large-scale funds in a short time using tokens. Investors are investing in tokens in anticipation of high prices, and the virtual currency used for transactions is also rising. Supervisors are also interested because they offer a variety of issues, such as how these approaches differ from traditional securities. Virtual currencies have low fees and are used as a means of domestic settlement and overseas remittances, but they are mainly held as investment assets for which prices are expected to rise, and are often used in China. There are many virtual currency exchanges in Japan as well, and in 2016, just like other developed countries, legislation was established to deal with money laundering and protect users. The use of virtual currencies is expected to gradually spread in the future. To become bitcoin-billionaire use bitcoin trading.

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Virtual currency and fiat currency

It should be noted that virtual currency such as Bitcoin does not have a central bank that is an issuer, unlike banknotes and coins that are legal currencies. Therefore, where there is a reliable central bank currency, virtual currency such as Bitcoin is not expected to replace it. However, since virtual currencies can digitally track transaction histories, in fact, they also have better characteristics in dealing with money laundering and the like than cash, whose transaction histories cannot be tracked. Compared to bank deposits, it has the advantage that no intermediary is required for delivery, and it is also privacy-friendly.

It is new to him that Bit coin’s use increased due to the expansion of the financial system in Cyprus during the bankruptcy of a major bank in foreign countries in 2013. In this way, it can be said that a new currency has emerged that is competitive with the central bank and existing financial systems. Hayek did not anticipate the time when he wrote The Theory of Liberalization of Money Issuance (1976), and the question of whether or not the country proposed in this book can monopolize currency issuance actually occurred. Meanwhile, with the split of Bitcoin in August 2017, the characteristics of the decentralized autonomous consensus system that virtual currencies have become apparent. Virtual currencies and electronic money are also different, although they may appear similar in appearance due to electronic transactions such as settlement. Electronic money has an issuer and is issued as consideration for the deposited cash, but virtual currency does not have a single issuer as already mentioned, but it does not mean that there is a competitive mining. During this time, the central bank has responded very strongly to these virtual currencies. You are conducting demonstration experiments by coordinating with central banks of each country and utilizing an accelerator program with private experts, recognizing that we must understand new block chain technology to ful fill our responsibilities as a central bank.

This month’s BTC market is in a high-priced area. Although it touched $10,000 one-half before the half-life and fell back, it did not arrive even after several tries, but the lower price gradually increased.


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