The Polarizing Effects Of Bitcoin

The Polarizing Effects of Bitcoin
	Created as a public ledger digital cash system by Satoshi Nakamoto, Bitcoin is one of the most polarizing technologies today. The system is a set of ideas and technology which outline the basic concepts of a digital monetary ecosystem. The Bitcoin network utilizes its own protocol standard to transfer and store denominations of value of the bitcoin currency on the internet. The transactions are executed by the software stack and miners process the transactions that maintain the public ledger.
As a new advanced technology, there are many aspects to the technology and they are not all set in stone yet. Many concepts and standardizations are still heavily debated 6 years into the conception of the currency. One of the topics being debated heavily is the units of value and where the decimal place should go. These units have already been defined but more and more people are realizing the early pioneers might not have got it quite right.
There are many units of value, the most commonly known unit of value is also named a bitcoin. This has commonly been abbreviated to BTC, however banking officials have pushed to make XBT as standard ISO currency code for the bitcoin. Note, when referring to the unit of value it is common to use lower case (bitcoin) and when referring to the network one would capitalize the B (such as Bitcoin). One bitcoin can be divided to 8 decimal places and the software is constructed that no more than 21 million bitcoins will ever come into existence.
The lowest denomination of value currently in existence is the satoshi, equal to 0.00000001 bitcoin. Due to the satoshi being the smallest value, a recent push has been made to change the standard unit of denomination to the bit which is equal to 100 satoshis. This makes a bitcoin equal to 1 million bits, and a satoshi equal to 0.01 bits, striking a similarity to a how a penny is equal to 0.01 dollars. The reasoning is that most currency systems are only designed to handle 2 decimal places for currency, and that humans are already familiar with this system. Others state that since the values have already been defined they should be left how they are to avoid further confusion.
Due to the nature of Bitcoin being a decentralized, pseudo-anonymous network, participants in the ecosystem may permanently transact currency over the internet without any approval from a central authority. Unlike traditional pull based payment systems such as bank accounts and credit cards, Bitcoin is a push-payment system meaning nobody can pull payments from any account. The private key is required to sign transactions and push them through the network. The result is a much more secure method of payment and store of value.
Opponents of this new system have concerns that due to the nature of the game, it will be harder to catch and stop bad actors from engaging in illegal activity. Concerns of illegal activities are very common. From money laundering and tax evasion to black markets of terrorism, identity theft, drugs, weapons, and hit men. Indeed, anything cash could be used for traditionally, can now take place on the internet with bitcoin as the financially enabling technology. According to Andreas M. Antonopoulos, bitcoin is the perfect form of money on the internet for criminals and law abiding citizens alike “because it is fast, secure, and borderless.” (Antonopoulos, “Mastering Bitcoin”).
There are many critics and supporters alike, both sides have good points and legitimate concerns. In fact, just about all aspects of bitcoin are disputed, except for one detail that seems to have unanimous consensus, which is that Bitcoin technology is here to stay. Due to the decentralized nature of the protocol, as long as just 1 miner is online, the protocol will exist. So, short of shutting down every computer on the internet, there will likely be someone trying to capitalize on collecting mining fees by processing transactions. Rather or not Bitcoin becomes the “MySpace of Bitcoin,” (Faktor, “10 Reasons Bitcoin is the MySpace Of Money”) or if it suffers catastrophic failure all together, the technology exists open source on the internet and can be changed, upgraded, adapted, or replaced all together by updating or forking the codebase.
Another notable area of debate regarding Bitcoin is the proposed regulations by the New York Department of Financial Services (NYDFS). The proposed regulation by Super Intendant Benjamin Lawsky seeks to provide clear guidelines for operating Bitcoin related businesses that manage customer funds. Key requirements of the regulation seek to mandate companies in the space safeguard customer funds, provide virtual currency receipts, maintain policies to resolve customer complaints, provide clear disclosure about potential risks, maintain anti-money laundering compliance, maintain accurate book keeping, submit to NYDFS examinations, and to maintain necessary capital requirements. Opponents to the proposed regulation show concern that the stringent requirements would kill startups that cannot afford to comply. Other concerns are that it is overreaching, too invasive, does not respect customer financial privacy, and generally does not give bitcoin industry the space to flourish and grow as it should.
In conclusion, we have learned that Bitcoin is a very powerful and advanced technology that holds limitless uses and implications. Just as in traditional economies, there exists the potential to do good or bad with money, and bitcoin is just that, money. Due to the complicated nature of the technology, there are many other controversies currently being debated and without a doubt, more to come. It is up to each and every one of us to make the right choices regarding ourselves, our families, and society as a whole to use the technology responsibly and within the laws of the society.

References
Antonopoulos, Andreas. "Mastering Bitcoin." Build Software Better, Together. O'Reilly Media, 14 Apr. 2014. Web. 1 Nov. 2014. <https://github.com/aantonop/bitcoinbook>.
Faktor, Steve. "10 Reasons Bitcoin Is The MySpace Of Money And What Might Save It." Information for the World's Business Leaders. Forbes, 30 Aug. 2013. Web. 1 Nov. 2014. <http://www.forbes.com/sites/stevefaktor/2013/08/30/10-reasons-bitcoin-is-the-myspace-of-money-and-what-might-save-it/>.
Nakamoto, Satoshi. "Bitcoin: A Peer-to-Peer Electronic Cash System." Open Source P2P Money. Bitcoin.org, 31 Oct. 2008. Web. 31 Oct. 2014. <https://bitcoin.org/bitcoin.pdf>.
Harper, Jim. "Bitcoin Foundation Letter to New York Department of Financial Services." Standardizing, Promoting, and Protecting the Bitcoin Protocol. The Bitcoin Foundation, 5 Aug. 2014. Web. 30 Oct. 2014. <https://bitcoinfoundation.org/wp-content/uploads/2014/10/2014-10-08-Bitcoin-Foundation-Comment-on-NYDFS-BitLicense-Proposal.pdf>.
Anderson, Matthew. "NY DFS RELEASES PROPOSED BITLICENSE REGULATORY FRAMEWORK FOR VIRTUAL CURRENCY FIRMS." Department of Financial Services. The New York Department of Financial Services, 17 July 2014. Web. 29 Oct. 2014. <http://www.dfs.ny.gov/about/press2014/pr1407171.html>.