The Influence of the Emerging Virtual Currency on Nation, Society, and Economy

Abstract

Bitcoin is a decentralized virtual currency based on P2P technology. Its distributed system enables the electronic transfer of value from one person to another without the need of a centralized issuer. Whereas traditional electronic money circulates in closed-loop systems, decentralized virtual currency circulates in an open-loop system as if it were cash money. Virtual currency that is not under the control of central banks raises questions about the sovereign power over currency that is currently the monopoly of the state. In this paper, we consider the questions brought up by the emergence of decentralized virtual currency, about non-state currency issuance, governance, the role of the state and public policy challenges. We analyze these issues using a multidisciplinary approach which includes technology, society and ethical perspectives.