Definition of “virtual currency” and technology linked with it

Definition of “virtual currency” and technology linked with it

Cryptocurrency
May 27, 2020 Editor's Desk
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At European level, the definition of “virtual currency”, broadly speaking, was recently introduced through Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 201. Which defines currency virtual: “a representation of digital value that is not issued or ensured by a central bank or a public body is not necessarily
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At European level, the definition of “virtual currency”, broadly speaking, was recently introduced through Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 201. Which defines currency virtual: “a representation of digital value that is not issued or ensured by a central bank or a public body is not necessarily linked to a legally established currency. This definition, becoming part of Community law, requires Member States to transpose it as an interpretation fee.

No further regulations are currently foreseen, as the intention is to evaluate the conclusions of the next G20 scheduled in Buenos Aires next March, when an attempt will be made to develop a common strategy among the “world powers”.

In academic circles, the phenomenon of cryptocurrencies did not immediately attract a great deal of interest, with the exception of some restricted economic circles. The research was initially aimed at aspects relating to the security, ethics and above all the legality of cryptocurrencies.

Grinberg’s work from 2011 represents one of the first academic publications on Bitcoin. The author compares cryptocurrencies with competing tools such as electronic coins, which have not had the same success due to the lack of competitive and managerial advantages and e-commerce. With respect to these two instruments, Bitcoin is particularly competitive in the micropayments sector with rather low transaction costs. About the sustainability of bitcoin Grinberg finds an analogy with the Iraqi “Swiss dinar”, a currency in circulation after the 1991 Gulf War, which was not supported by a government or commodities

Plasaras (2013) examines the potentially destabilizing effects of emerging cryptocurrencies on the international currency market, arguing that the International Monetary Fund, the institution responsible for coordinating exchange rate stability, is ill-equipped to manage use widespread of this phenomenon and highlights its inability Intervention in the event of speculative attack on a digital currency by Bitcoin users. Christian Beer and Beat Weber (2014) report and discuss the positions of the media, governments, central banks and regulatory authorities on Bitcoin. The application of this technology is useful for solving some crucial problems in dealing with public administrations such as trust, transparency and security. bitcoin superstar official help to do trading and make money from this currency.

Monetary aspects of cryptocurrencies

Economic literature focuses on properly monetary aspects of cryptocurrencies. A specific paragraph is dedicated to studies investigating the currency or speculative nature of bitcoin. These are particularly interesting studies, based on statistical-mathematical models derived from econometrics which, in order to avoid trespassing on subjects that require specific technical skills we have decided to summarize their salient features and final results. All empirical models seem to claim that bitcoin cannot be considered a real currency, due to the high level of volatility observed in the different markets in which they are traded. A further paragraph is devoted to studies based on a structural analysis of the markets of bitcoin; Urquhart (2016) studies the properties of bitcoin returns and concludes that bitcoin markets are still inefficient. Brandvold et al. (2015) investigate the prices of seven major bitcoin markets. The authors find that the bitcoin market is dominated by Mtgox, which before filing for bankruptcy in February 2014, handled most of the bitcoin transactions in the world and BTC-e. Finally, Seetharaman et al. (2017), study the various factors that are contributing to Bitcoin’s international success and analyze a possible impact on the financial condition of market

Technology related to bitcoin

This technology, born as the cornerstone of the Bitcoin system, has the characteristics of security, immutability, transparency, consensuality that make it attractive in various other sectors. Ethereum an application born in 2012 on the wave of the development of Bitcoin, led to the introduction of “smart contracts “, software based on blockchain technology that perform the conditions previously postulated by developers, with characteristics similar to a traditional contract and whose effects are guaranteed by an algorithm. E -commerce, insurance, car-sharing, the food, the notary, the financial are just some of the sectors that are undergoing major transformations since the advent of this technology.

So expert has different views about this currency and according to them they help tie financial structure of economy.  

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