S

Future of Money and Implications on Monetary

PolicyPresented By: William Bailie

William HamiltonShane Rea

Kaitlin SchultzPaul Tolvo

Outline

Summary of article Emergence of Bitcoin What is Bitcoin? Advantages and Disadvantages Effect on Monetary Policy Compare to Europe Critique Expectation

Summary of Article

Economic collapse of Cyprus showed huge jump in Bitcoin value

13,438,550 Bitcoin in circulation Decentralized general ledger Will always be able to use if internet is on Bitcoin thrives in a world without trust

Emergence of Bitcoin

August 2008 Bitcoin.org is registered Double spending January 2009 “Genesis Block” October 2009 first exchange rate posted First traded publicly in 2010 2011 Mt. Gox user table hacked 2012 started major overhaul October 2012 European Central Bank stated opinion October 2013 First ATM opens up

What is Bitcoin?

Virtual Currency “Wallets” Transactions vs. Investments

Advantages

No Taxes No Tracking of Transactions No Transaction Costs Cannot be Stolen No Reversal of Transaction

Disadvantages

Not Widely Accepted “Wallets” can be Lost Fluctuating Value No Buyer Protection Risk of Technological Error

Models

IS/LM AD/AS

IS/LM

AD/AS

P AD1 AD2 LRAS

C

A B SRAS

Output, income

Monetary policy in Europe

“The entire Eurozone is close to recession, again, and deflation, a general deflation, is a real possibility. Interest rates are near zero, we’re at that zero monetary bound. So we can’t slash interest rates to get the economy moving again. We can’t use fiscal policy either. Partly because everyone’s deficits are at or above what the euro system allows them to be, partly because those who most need to borrow to expand simply cannot borrow at present. Greece, even after the private sector creditors took a 70% haircut, still has debt well north of 100% of GDP and, as above, would pay near 9% to raise more.”

Critique

USD vs Bitcoin Regulation/effects on currencies Other cryptocurrencies Consumption and use of bitcoin General problems with use

Critique

USD vs Bitcoin 1 Bitcoin is equal to 347.96 dollars

Critique

Regulations Most countries have no regulation on Bitcoin No legislation Or even recognize it as a legal tender Effects on currency

Critique

Critique

Critique

Critique

General Problems of bitcoin-Has the potential to be extremely volatile-Cyber crime-Public transactions-Establishments that accept it

Expectations

Do people accept it as a currency? How has the market reacted to Bitcoin?

Works Cited

"Advantages." Bitcoin. Standford University, n.d. Web. 25 Oct. 2014. "Bitcoin." Bitcoin. Standford University, n.d. Web. 25 Oct. 2014. "Bitcoin Total Bitcoins in Circulation." Bitcoin Total Bitcoins in Circulation.

Blockchain, n.d. Web. 26 Oct. 2014. "The Greek Option: Monetary and Fiscal Policy." World Politics News Review.

N.p., n.d. Web. 25 Oct. 2014. Narvasa, Helen, and Heather Morton. "The Emergence of Bitcoin." The

Emergence of Bitcoin. NCSL, n.d. Web. 26 Oct. 2014. Rüdiger Koch, Rüdiger. "Bitcoin - a Means for Redistribution of Wealth." Bitcoin

- a Means for Redistribution of Wealth. N.p., n.d. Web. 25 Oct. 2014. Worstall, Tom. "Europe Doesn't Have A Debt Crisis, Europe Has A Monetary

Crisis." Forbes. Forbes Magazine, n.d. Web. 25 Oct. 2014.