Reflecting upon our exploration of monetary and financial history in Essay

Reflecting upon our exploration of monetary and financial history in Topic Two, what ar some of the issues surrounding the crea - Essay ExampleThese currencies resemble real money and do come with their discrete, but open retail payment system petabiting to the term virtual gold precis. There are different types of virtual currency connives Type 1 (c getd virtual currency scheme), it is utilize in online games Type 2 (unidirectional flow), this is usually an inflow, this nub that they have a conversion set out for get the virtual currency that aid not only in purchasing the virtual goods and services, but in addition the real goods and services Type 3 (bidirectional flow), this gives the currency the ability to behave like any different convertible currency, that is, possess the buying and selling exchange rate, and therefore, it can be used to buy both(prenominal) the virtual and real goods and services. Issues Surrounding Virtual Currency Schemes (Bitcoin and Linden Dol lar) The Bitcoin is a virtual currency scheme that is based on the technology of BitTorrent of sharing files over the Internet (European underlying Bank, 2012). This technology is based on peer-to-peer network. Its operation is global and has the ability to conduct both real and virtual transaction of goods and services. The exchange rate of Bitcoins which is not nai lead to any real-world currency is determined by demand and supply in the market (King, 2012). repayable to all these, the currency is decentralized, meaning that it has no central clearing house it is anonymous and controlled by the partners elusive, this means that there is no institution or financial house involved in the transaction (European Central Bank, 2012). By anonymous, it means that accounts are not registered, so the Bitcoins are transferred directly from one machine to another. The proceeding are enabled by free and open-source software that is downloaded and installed in a machine thereby, purchased Bi tcoins are stored in the machine in a digital wallet. This turns to be the basic threat to this system, users can easily lose their money if they do not implement and secure their machines with back-ups and antivirus measures. Although the insecurity factor is a big concern, users cool it prefer to use this technology because of its fast and cheap transactions with no bank account fees involved (European Central Bank, 2012). Because this system has no rules, its economic foundation has been interfered with governments and other agencies through criticism of the current fiat money system. Users of Bitcoin generally share common ideas which help to maintain Bitcoin within operation range, these include the scheme is inspired and promoted by former gold standards, users also think that it is a starting point to eat up the central bank monopoly in the issuance of money, lastly the user criticize the fractional-reserve banking system. All these ideas have led to a number of issues fir st, the economists criticize the Bitcoin and argue that Bitcoins are bits stored in a computer therefore, they have no intrinsic value like gold. The other reason is that this technology fails to satisfy the Misean Regression Theorem (European Central Bank, 2012). some other issue about the Bitcoins is that the system is complex and not easily understandable, creating questionable doubts on the system, considering that the transactions are sent through a network minus an intermediary to maintain and validate the connection. This can lead to double spending or coin forge even with tough measures like time molding and mining are deployed to