Bitcoin and its effect on microeconomics Research Paper

Bitcoin and its effect on microeconomics - Research Paper ExampleSome people ask themselves why Bitcoins. People can map them to buy goods and services anonymously. Another key reason why people take this kind of cash is the concomitant that they make international payments, not only easy, but cheap as well. This is because the funds does not belong to any country, and there is no a star country that regulates it. Many small businesses prefer them because they do not have fees like some medium of exchange, for example, the credit cards. Some investors buy this currency for investment purposes. For example, some buy them hoping that the value would go up in the future (Bohme, 2013).One whitethorn wonder how they could acquire the currency. There are numerous marketplaces where individuals can buy and sell the currency victimisation other currencies like the dollar or Euro. These marketplaces referred as Bitcoin exchanges. People store Bitcoins in digital wallets existing in th eir users computer. It is like a virtual bank account and allows the owner of the Bitcoins to send out them or receive them, save them, or pay for products or services.One of the key effects of Bitcoins is the fact they would reduce trade barriers. This would not only increase the global income, but also the global production. A key reason why Bitcoins would reduce trade barriers is the fact that there is no a single country that regulates or controls them. Therefore, there is no transaction friction. Individuals can make transactions easily and closely (Bohme, 2013). There are no transaction costs. The fact that there is no intermediary like a bank makes transactions fast. The fact that there are no additional charges makes goods and services cheaper. This increases the consumer surplus and so is their utility. People can afford more and cheaper goods, which increases their level of satisfaction.They would boost