Scarcity, Opportunity Cost, Wants, Markets, Law of Demand, Law of Supply, Market Failure, The Informal Economy, Unemployment Rate, Structural Unemployment, Human Capital, Inflation Rate, Gross Domestic Product, Consumption, Economic Growth, Supply Side Fiscal Policy, Taxation, Public Debt, Fiat Money, Cryptocurrencies, Liquidity, Trade-off between Risk and Return, Monetary Policy, and Saving.
Choose one concept from the list above, and write a paper a 500 to 550 word paper (500 words is the absolute minimum) in which you state a response to the following prompt;
“Before completing the assignments (Discussions, Scenarios, and Homework) in this course I thought about (one of the concepts from the list) in this way …, now I think …
You are free to organize and arrange your sentences and paragraphs in any way you see fit, but your response MUST at least have the following 5 elements:
It must state and define the concept or idea.
It must explain how you viewed or understood the concept before completing the course assignments.
It must explain your new way of viewing, or understanding the concept.
It must say the reason why your perspective, or understanding changed. In other words, what did you do, see, or hear as a result of completing the assignments that helped transform your opinion.
It must have information, data or facts, that supports the reason for your change. The information, data or facts can be presented in the form of an example, or as part of an explanation, but it must be explicitly connected to at least one of the assignments.
As you produce your response, you should also consider the following:
The implications of the change in perspective. In other words, now that you see this concept in this way, what are some of the things that will come after? What will you do differently? What follows? Also, analogies and metaphors are a great way to illustrate how one views a concept or an idea.
https://www.smore.com/epr63
Cryptocurrency
Student’s Name
University
Course Name
Professor’s Name
Date
Cryptocurrency
Before completing the homework in this course, I thought that cryptocurrency was an emerging website like PayPal that was used for financial transactions; however, after conducting deep research, I now understand that a cryptocurrency is a modern form of digital transaction system whereby online transactions happen between peers. Also, it is designed to exchange digital information through cryptography. Cryptography is a technology technique that helps create new coins and secure any transactions (Chuen, 2017). Nevertheless, some challenges are facing the ongoing use and application of cryptocurrency in the markets. For example, there is no regulation from any central authority; hence there is a gap that facilitates illegal transactions and fraud.
Additionally, because cryptocurrency does not have government control, there is freedom of payment regardless of the amount. There are numerous cryptocurrencies such as Ethereum, Bitcoin, Ripple, Litecoin, Cardano, and Binance (Liu, 2021). Bitcoin is the most popular type of cryptocurrency in the world. Before completing the course assignments, I had ever heard of high demands for Bitcoin through CNN reports because of the exceptionally volatile price fluctuations. From the reports, I believed that Bitcoins is a platform like any other exchange medium such as Payoneer and PayPal never thought more than 10000 different cryptocurrencies were trading publicly (Voigt, 2021). Later on, I invested, and truthfully, in just two transactions, I gained huge profits, which cemented unbreakable trust and hope for cryptocurrency.
Furthermore, it is essential to note that the public ledger for cryptocurrency is the use of blockchains. Blockchains are always open to anyone, unlike secretive fiat currency transactions. Therefore, because it heavily uses cryptography, users cannot double-spend nor counterfeit it. Blockchains operate in a way that the ledger can be recreated and circulated through the entire internet connection. Hence, most global executives approve that blockchains can significantly transform organizations as we progress into the future.
Similarly, cryptocurrency is a very advanced digital financial system using blockchains that manage records transactions. However, despite its existing high-security technological tools, it is far from challenging monetary bank policies, especially with regard to crucial currency areas. Conversely, in extreme cases such as hyperinflation, the cryptocurrency can serve as an essential replacement.
Regarding to CoinMarketCap.com, a leading market research site, Bitcoin holds a market capitalization of $608.6 billion and is followed closely with Ethereum, which has $240.4 billion (Voigt, 2021). The figures mentioned clearly depict the vast influence cryptocurrency has on the global economy. Nonetheless, critics think that cryptocurrency is not a good investment because the currency is volatile because of the price volatility. Recently, bitcoins have been steadily declining, such as the popular cryptocurrency Bitcoin, which dropped from $1.2 trillion in April to the current market value of $608.6 billion (Voigt, 2021).
In my view, cryptocurrency is a buzz on the verge of collapsing. After conducting thorough research, various factors raise more questions than answers in its business model. Many critics argue that cryptocurrencies do not generate a cash flow, and for the investor to benefit, someone will have to pay for the currency more than the capital. It is better to manage a business well which eventually increases value by building its cash flow of operation and profitability. Hence, the stock trading of established companies is better because they have less risk compared to cryptocurrency, which is a volatile and speculative buy.
References
Chuen, D. L. K., Guo, L., & Wang, Y. (2017). Cryptocurrency: A new investment opportunity? The Journal of Alternative Investments, 20(3), 16-40.
Liu, Y., & Tsyvinski, A. (2021). Risks and returns of cryptocurrency. The Review of Financial Studies, 34(6), 2689-2727.
Voigt, K., & Royal, J. (2021). What Is Cryptocurrency? Here’s What You Should Know. NerdWallet. Retrieved from https://www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know
