remittances; a lot of people in the world in ways of development rely on remittances for their subsistence.
When financial technology also known as Fin-Tech captured the attention of the media and many people began talking about it in recent years, it seemed to be worth reading about ways the financial industry will be disrupted and what changes will happen to this industry. It is inevitable therefore to encounter ourselves talking about the word Bitcoin, as this topic is in indeed very interesting and fascinating. Indeed, it is good to have the will to try to
understand what Bitcoin is about and how we can also educate ourselves about this topic.
Moreover, if it could bring to us some help and improve the life of many, why not get involved?
1.2 Objective of the Thesis
Bitcoin's price has reached unprecedented levels, garnering worldwide attention and making people willing to learn more about it. In 2015 it was incredible to see the amount of investment Bitcoin received from investors who poured into Bitcoin-related firms an amount superior of 1 billion USD (Pagliery 2015). It is, however, a very new topic and few people understand how it works, how to use it and why people talk about this. Without knowing how this works and why it is becoming so popular, people might lose the opportunity of joining this
“revolution”, as many called it. If after better understanding its usage and potential, the readers still do not feel confident enough about this topic, at least they will be more aware and able to analyze more critically this new concept of money.
In this paper, a precise and more practical explanation will be given to better understand what Bitcoin is. The article will try to explain in a simple, straightforward manner, the system that is behind Bitcoin, called blockchain. People without neither a computer science nor an engineering background will be able, if carefully reading, to understand what Bitcoin is and
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the technology behind it, blockchain. The blockchain is indeed something that many big corporations, such as IBM and Microsoft for example, identify as a technology with great potential and therefore have invested heavily into it.
The paper will later make its primary objective to analyze the potential of this digital currency “Bitcoin” in the Latin-American market. This region has a lot of potential in economic terms and progress; it possesses a vibrant young population among many other resources such as tourism, natural resources and more.
Figure 1 Latin-American Countries.
Source: Wikipedia (2009)
Latin America is a region in development, and is also called an undeveloped area. In this region, as in many other sectors, the financial sector is still in development as well.
Therefore, the paper will analyze the potential of adoption and expansion of Bitcoin in this region.
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A deeper analysis will be conducted in two countries, Venezuela and Argentina. The reason why these two nations are being chosen is that both countries are currently facing tough economic situations.
Figure 2 Venezuela and Argentina locations Source: Wikipedia (2009)
There has been a lot of news, and positive and negative reviews highlighting the potential and danger these two countries have for the adoption of Bitcoin. It is therefore fascinating to analyze the reasons these countries have brought the attention of the media and to see what it is happening within them.
At the same time, this process and development will influence the neighboring countries and will cause a significant impact on the whole region; it is important to analyze the development in Venezuela and Argentina as an example of this digital currency, to have an idea of what the future of Bitcoin in the region will be.
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Chapter 2 Introduction of Bitcoin
This chapter will start with the introduction of Bitcoin; it will explain what it is in a very simple and straightforward way. Simplicity will be used and plain language will tried to be maintained so that any reader can understand and make the most out of this study. In chapter two as well as in the following ones, examples will be used to help the reader better understand this digital currency. It is important to have a good understanding of Bitcoin so that we can further analyze the impact of Bitcoin in the two selected countries for this study, Venezuela and Argentina. Some figures will be shown with which we will have a graphic illustration of the system of this digital currency and the way it contrasts with the previous or traditional method.
The system behind this digital currency is called blockchain. (Coindesk 2015) This is the technology that makes the existence of this digital currency possible; in other words, this technology has brought Bitcoin into existence. Therefore, blockchain and Bitcoin are intrinsically linked to each other. This technology will also be explained in this chapter and it is important to understand it in order to see the level of security involved in Bitcoin as well as to know how this is possible. Other topics such as the relevance of this digital currency in numbers will be shown and the legal factors involved with Bitcoin will also be addressed. This chapter will be of high importance in this study and great attention should be given to it.