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Bitcoin: Digital Illusion or a Currency of the Future?

Author

Listed:
  • Gyöngyi Bugár

    (University of Pécs)

  • Márta Somogyvári

    (University of Pécs)

Abstract

Bitcoin has been one of the most interesting financial innovations in the last ten years. In this essay, we set out to discover why it has not spread as a medium of payment and how it has become a high-risk form of investment instead. We examine the operational mechanisms of bitcoin technology and explain the ideological background for the popularity of bitcoin. We conclude that, in its present form, bitcoin is not suitable to become a generally accepted medium of payment.

Suggested Citation

  • Gyöngyi Bugár & Márta Somogyvári, 2020. "Bitcoin: Digital Illusion or a Currency of the Future?," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(1), pages 132-153.
    • Handle: RePEc:mnb:finrev:v:19:y:2020:i:1:p:132-153
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    References listed on IDEAS

    as
    1. Marie Briere & Kim Oosterlinck & Ariane Szafarz, 2015. "Virtual Currency, Tangible Return: Portfolio Diversification with Bitcoins," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 16(6), pages 365-373.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    bitcoin; cryptocurrency; blockchain; libertarian economic policy;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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