Economy and Finance
84 Cryptocurrency’s
Sam Mensforth and Abigail Caveness
Introduction
“A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.” (FrankenFeild 2021). In other words, cryptocurrency is an alternative currency transferred through the internet not represented by a physical bill or coin. Today, over 23,000 individual cryptocurrencies are being traded on the market. Cryptocurrencies aim to remove power from large organizations like the government and private companies. “Today we live in a world of pure discretionary government fiat monies” (Dorn, 2017). Crypto aims to replace fiat currency, or currency not backed by the physical value of the materials used but rather assigned by a powerful group. The largest and most well-known cryptocurrency is Bitcoin. The price of any cryptocurrency often fluctuates and is very volatile. In the past year, the price of one Bitcoin has been in the range of $28,000 to $73,000, generally trending upward. As technology advances and becomes accessible to more people, cryptocurrency’s importance continues to grow and will eventually become an integral part of our economy.
Connection to STS
Cryptocurrency has already made significant waves in society, disrupting traditional financial systems and sparking debates on the future of money. Its decentralized nature challenges the conventional banking model, offering individuals greater control over their finances and reducing reliance on intermediaries. Moreover, cryptocurrency has facilitated financial inclusion, enabling millions previously excluded worldwide access to banking services. However, its impact extends beyond finance, influencing technological innovation and exploring blockchain technology for other applications. “Blockchain is a distributed database that is shared across a network of computers. Once a record has been added to the chain, it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks. Blockchains have been used to underpin cyber-currencies like bitcoin, but many other possible uses are emerging” (Pehcevski, 2020). The innovations in blockchain technology can be applied to other industries, such as the medical industry, as a safe way to store private information. However, challenges remain, including regulatory concerns, environmental impacts of mining, and the need for more significant security measures to mitigate risks such as fraud and hacking. Thus, while cryptocurrency holds immense promise, its full societal impact will depend on how society addresses these challenges and harnesses its potential.
History
“The idea behind Bitcoin was introduced to the world on Oct. 31, 2008, at the depth of the financial crisis by a pseudonymous person called Satoshi Nakamoto” (Pinkerton, 2024). Bitcoin’s original creator adopted an alias to remain anonymous. At first, the value of a bitcoin was