As a result of the advancement of technology over the few decades, digital money has repaced the globe as an alternative op on dealing with money and exchange. This newest form of digital money is known as Cryptocurrency. The introduction of these forms of financial exchange has benefited individuals and countries in several ways, such as raising their living standards. It is the newest form of economic exchange, which is not governed by the state governments having any state monetary policies. The adoption of these online financial services has been adopting the decentralization principle. With the current growth in usage, Cryptocurrency is playing an essential role n the life of several individuals around the globe. In the future, Cryptocurrency will become part of the financial system. Definition of the word Cryptocurrency has been derived from a combination of crypto, meaning data encryption and currency, meaning the medium of exchange (Dierksmeier & Seele, 2016). Cryptocurrency is used as an ordinary form of business that is applied in the payment of goods and services, which is solely online using encryption in ensuring security and safe transaction. Two prominent individuals are behind the idea of Cryptocurrency. Wei dei was the first individual to develop Cryptocurrency in 1998, which he named B- money. Another same idea was developed by Nick Szabo, known as Bit Gold. The founders never disclosed the idea since it looked inefficient compared to the traditional form of the financial system and they were unable to build trust with the users.
Cryptocurrency as the financial system has several impacts on the global economy or trade. Independent variables include social influence and the trading volume. Social power and the environment contribute significantly to the worldwide economy since they are well-developed (CAMPBELL, 2018). Social influence positively impacts Crypto currency; social media outlets play a pivotal role in price fluctuation. Trending news concerning digital currency may cause a massive drop in the digital value of the money. When a system is hacked causes a decrease in the digital value of the currency. The research questions will be how the social influence of Cryptocurrency affects the global economy? What is the effect of the trading volume of Cryptocurrency on international trading?
The current growth of Cryptocurrency has impacted the global market in several ways. With the changing technology, Cryptocurrency has led to several changes in international trade. With the idea of investing in Bitcoin and Cryptocurrency keeping on moving and flowing, several individuals are interested in bitcoin and Cryptocurrency and gain high revenues and profits at the ND of each transaction. This is to the risk-takers who are willing to discover the trends and issues connected to trade. According to the research carried out by Campell (2018), the narrative of Cryptocurrency has been associated with decentralized, trustless and autonomous systems. The trust issues are among the third-party verification I the blockchain technology. The paper will enable us to understand the impact of Cryptocurrency on global trade.
Cryptocurrency has not been governed by the laws and the regulation of the national government. The trade operates in a decentralized manner. According to the Chohan, (2019). The business ethics of Cryptocurrency has rarely been researched. The author’s state that Crypto currency is decentralized, and the government and the state laws do not govern this ye of the global trade; thus, it has limited exposure to the threats.
The adoption of Cryptocurrency has come up with both social and environmental impacts. These effects are only felt in communities with low incomes. These communities have some limitations as a result of unsustainable cryptocurrencies. The actors and the producers utilize the merit of unpredictability in accessing cheap energy and other resources (Dierksmeier & Seele,2016). Cryptocurrency has made it easier for individuals in different states to make payments. His has affected the financial borders negatively, which is controlled by the states and the banks. The welfare emergence aid d more financial areas are op for the development. This has built flexibility in the blockchain, allowing complex transactions.
It is estimated that the bitcoin power consumption globally has direct implications for the climate. The research shows 22 to 22.9 million metric lots of CO2 release. The study has cautioned that bitcoin may thrust global warming up beyond 2 degrees. Another estimated bitcoin drawing out in china may produce almost 130 million metric loads of CO2 by 2024.
Conclusively, both the social influence and the trading volume of Cryptocurrency impact global trade. This is a result of technological advancement in the countries. The developed countries benefit more from Cryptocurrency compared to developing countries.
References
CAMPBELL‐VERDUYN, M. A. L. C. O. L. M. (2018). Introduction to special section on Blockchains and financial globalization. Global Networks, 19(3), 283–290. https://doi.org/10.1111/glob.12219
Chohan, U. W. (2019). Are cryptocurrencies truly ‘trustless’? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3331544
Dierksmeier, C., & Seele, P. (2016). Cryptocurrencies and Business Ethics. Journal of Business Ethics, 152(1), 1–14. https://doi.org/10.1007/s10551-016-3298-0
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