Search The Internet, Google Scholar, And Explain Why Some B ✓ Solved

Search The Internetgoogle Scholar Etc And Explain Why Some Busine

Search the Internet (Google Scholar, etc.) and explain why some businesses are accepting and other businesses are rejecting the use of Bitcoins as a standard form of currency. In addition, paper needs to identify two major companies that have adopted Bitcoin technology. Requirements: • 3-5 pages in length, not including the required cover page and reference page. • Follow APA guidelines. • Support your response with the readings from the course and at least five peer-reviewed articles or scholarly journals.

Sample Paper For Above instruction

The adoption of Bitcoin as a currency and the reasons behind businesses accepting or rejecting it have become prominent topics in the realm of digital finance and cryptocurrency. Bitcoin, a decentralized digital currency introduced in 2009 by an anonymous entity known as Satoshi Nakamoto, has garnered significant attention due to its potential to revolutionize transactions by eliminating intermediaries and reducing transaction costs. However, its volatile nature, regulatory ambiguities, and scalability issues present challenges for widespread acceptance. This essay explores the key reasons why some businesses have embraced Bitcoin while others have remained skeptical, alongside an examination of two major companies that have adopted Bitcoin technology.

Reasons Why Some Businesses Accept Bitcoin

One fundamental reason businesses have adopted Bitcoin is its potential to reduce transaction fees. Unlike traditional payment systems that often involve multiple intermediaries, Bitcoin transactions are peer-to-peer, significantly lowering costs for merchants (Böhme, Christin, Edelman, & Moore, 2015). This cost-effectiveness is especially attractive for online merchants and international transactions, where traditional banking fees and currency conversion costs can be substantial (Yermack, 2013).

Another motivator is the appeal to a broader customer base. Accepting Bitcoin can attract tech-savvy customers and those preferring cryptocurrencies for privacy, security, or ideological reasons (Nakamoto, 2008). Additionally, businesses operating in regions with unstable fiat currencies may see Bitcoin as a hedge against local currency devaluation, thus protecting their assets (Baur, Hong, & Lee, 2018).

Furthermore, Bitcoin's borderless nature facilitates international commerce by enabling payments across countries without the need for currency exchanges or banking restrictions (Catalini & Gans, 2016). This global aspect aligns well with e-commerce businesses aiming to expand internationally seamlessly.

Reasons Why Some Businesses Reject Bitcoin

Despite its advantages, several businesses remain hesitant to adopt Bitcoin. The primary concern is its extreme price volatility. Bitcoin's value has experienced dramatic fluctuations, which pose risks for both merchants and consumers, especially regarding pricing stability and financial planning (Bariviera, Basgall, Hasperué, & Neely, 2017).

Regulatory uncertainty is another significant deterrent. Governments worldwide have adopted diverse approaches, ranging from outright bans to regulatory frameworks, but a clear global stance remains elusive. This unpredictability complicates compliance and exposes businesses to legal risks (Yermsack, 2013).

Moreover, security concerns regarding cryptocurrency thefts and hacking incidents also contribute to hesitancy. High-profile breaches of exchanges and wallets underscore vulnerabilities within the cryptocurrency ecosystem, making some businesses wary of holding or transacting in Bitcoin (Conti, Kumar, Lal, & Ruj, 2018).

Lastly, scalability issues related to transaction speed and network capacity limit Bitcoin’s practicality for daily commercial use. The relatively slow transaction confirmation times and high network congestion hinder its adoption as a mainstream currency (Croman et al., 2016).

Major Companies That Have Adopted Bitcoin Technology

Two notable companies that have integrated Bitcoin technology into their operations are Tesla and Microsoft. Tesla Inc., the electric vehicle manufacturer, announced in early 2021 its investment in Bitcoin and briefly accepted it as a payment method for its vehicles. Although Tesla’s acceptance of Bitcoin was later suspended due to environmental concerns associated with Bitcoin mining, its initial move signaled a significant corporate endorsement of Bitcoin’s potential as a digital currency (Tesla, 2021).

Microsoft has taken a more cautious approach by accepting Bitcoin as a means of payment for its online Xbox Store, allowing customers to purchase games, movies, and apps using Bitcoin through third-party payment providers. Microsoft's engagement with Bitcoin demonstrates its recognition of blockchain technology's benefits and its potential to enhance digital transactions while maintaining regulatory compliance (Microsoft, 2022).

Conclusion

The decision of businesses to accept Bitcoin largely depends on a combination of cost-saving advantages, customer demand, regulatory landscape, security considerations, and technological scalability. While some companies see cryptocurrency as a transformative innovation offering financial and strategic benefits, others remain cautious due to its inherent risks and uncertainties. Major companies like Tesla and Microsoft illustrate differing levels of adoption and highlight the evolving role of blockchain technology within the corporate sphere. As regulatory frameworks develop and technology matures, it’s likely that Bitcoin’s acceptance will continue to grow, albeit with careful consideration of the associated challenges.

References

  • Baur, D. G., Hong, K., & Lee, A. D. (2018). Bitcoin: Medium of exchange or speculative asset? Journal of International Financial Markets, Institutions and Money, 54, 177-189.
  • Bariviera, A. F., Basgall, M. J., Hasperué, W., & Neely, M. (2017). Some stylized facts of the Bitcoin market. Physica A: Statistical Mechanics and its Applications, 503, 139-145.
  • Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of Economic Perspectives, 29(2), 213-238.
  • Catalini, C., & Gans, J. S. (2016). Some simple economics of the blockchain. NBER Working Paper No. 22952.
  • Conti, M., Kumar, S., Lal, C., & Ruj, A. (2018). A survey on security and privacy issues of Bitcoin. IEEE Communications Surveys & Tutorials, 20(4), 3416-3452.
  • Croman, K., et al. (2016). On scaling decentralized blockchains. Proceedings of the 2016 ACM Workshop on Blockchain, Cryptocurrencies, and Smart Contracts, 43-52.
  • Microsoft. (2022). Supporting digital currencies: Microsoft’s approach. Microsoft News Center. https://news.microsoft.com
  • Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Retrieved from https://bitcoin.org/bitcoin.pdf
  • Yermack, D. (2013). Is Bitcoin a real currency? An economic appraisal. In Handbook of Digital Currency (pp. 31-44). Academic Press.
  • Tesla. (2021). Tesla’s Bitcoin investment and payment initiatives. Tesla Inc. Investor Relations. https://ir.tesla.com

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