Bitcoin: Would it Be Another Alternative for Global Currency System?

Abstract

After the financial crisis of 2008, bitcoin has come to an action as crypto currency. And this was the result of the populist revolt against the currently popular global currency system. In the early years of bitcoin, its usage is too much limited. but now this limitation has become a past as numbers and arena of such usage is going up day by day. But with this rising number of usage, another perspective is knocking at the door. And that is whether it would be another alternative of the current global currency system. Hereby, the main remainder is that more useful and also rising more usage rate does not necessarily note that it would be the alternative of the mainstream. Rather the more usage and rising rate of usage indicates that there may exist a possibility of replacing. In short, this usage is a necessary condition but not sufficient condition of confirming the argument “Bitcoin would be another alternative for the global currency.” In this paper, we firstly go for formulating the criteria for whom a currency system can be declared as a global one. And these criteria would be formulated on two perspectives. The first perspective is the criteria would be drawn from the contemporary perspective that is prevalent in current currency system and the second perspective is what more criteria should be present in currency system to be global. After this criteria formulation, we would check two possibilities. First possibility is that how bitcoin might fulfill the criteria of being global currency system and the second possibility is that how bitcoin might not fulfill the criteria of being global currency system. And lastly by comparing two possibilities qualitatively, we would either accept or reject the null hypothesis with some critical evaluation.

Keywords: Bitcoin mechanism, bitcoin mining, global monetary policy, individualism, Security comparison

JEL Classification: E00