Digital Finance: Bitcoins, The Internet of Money

The bitcoin has been around since 2009 after being released as open-source software. It is a cryptocurrency accepted worldwide as a digital payment system invented by an unknown programmer or group of programmers under the pseudo name Satoshi Nakamoto. While many have known about this digital currency with nearly 2.9-5.8 million unique users, reported by Cambridge University in 2017, it is still new to others.

If you are like me, when I heard the word bitcoin, I was puzzled as to how it functioned and what role it played in our global financial market. Let’s explore this new form of digital currency together.

What is Bitcoin?

Bitcoin is the first decentralized, unregulated, peer-to-peer payment network that is powered by its users without a central repository or single administrator monitoring its exchange.

The bitcoin is considered a separate parallel currency created essentially out of nothing. Transactions made between bitcoin wallets, or users, are reported in the block chain, or the system’s name for its publicly distributed ledger. Bitcoin wallets hold a secret piece of data called a private key or seed which is used to affirm transactions. This code provides the necessary mathematical proof that the finances have come from the owner of the wallet.

Why Bitcoins?

Bitcoins can be used to buy merchandise and services in addition to being exchanged for other currencies anonymously. International payments are made easy and cheap because bitcoins are not fixed to any specific country or subject to regulation. Small businesses may see an advantage to using the bitcoin because there are no fees attached to the payment like there are with credit cards and PayPal accounts. Some individuals just buy bitcoins as an investment, hoping that they will increase in value. The bitcoin software can be installed on your computer or mobile device and is very easy to use. The bitcoin currency exchange value is attained by investors, similar to the stock market, buyers drive the market value up, while sellers decrease the value.

Learning the Vernacular


Users compete to “mine” bitcoins using computers to solve complex math problems. This is how bitcoins are created. Currently, a winner is rewarded with 25 bitcoins roughly every 10 minutes.

Mining is one word in a whole new realm of virtual finance that users need to know in order to effectively use the software.


It is important to note, this new form of alternative currency is not insured by the FDIC, and user accounts or wallets have been known to have been hacked or stolen.

In the Unites States, there has been major controversy over the use of bitcoins because they can be acquired and used anonymously and can transfer illicit funds or hide unreported income from the Internal Revenue Service (IRS).

It all may seem legit. Transactions are recorded in public logs, but the names of buyers and sellers are never revealed – only their wallet IDs. While that assures that bitcoin users’ transactions are kept private, it also lets them buy or sell anything without easily tracing it back to them. That is why, in addition to fraud and tax avoidance, the currency has become popular among people buying drugs online or pursuing other illicit activities.

What Does the Future of Finance Hold in Store?

There is no definitive answer. While it is unregulated today, that could change tomorrow. Some sites have reported Bitcoin’s net value around $108 million. If governments get involved in regard to regulating taxes, the program may get a facelift.

The bitcoin policy now requires transactions that involve traditional, government backed currencies attached to a personal identity. Other changes to its policy may come shortly, but who knows for sure when.

Internet finance and digital banking are the new way steering individuals away from traditional financial management and has received increasing attention worldwide. The bitcoin, is only one of many forms of cryptocurrencies surfacing on the market today. New financial terms like P2P lending, crowdfunding, and online money market funds will soon become commonplace. Advancements in technology have changed the nature, scope, and competitive landscape of the financial industry with digital disruption happening at every level of international financial management operations.

GBSB Global’s Master in Financial Management, Digital Banking and Internet Finance intends to change the way international financial management is taught at business schools in Europe to accommodate this financial revolution. Traditional finance will no longer be relevant in the digital economy; rather, master in digital finance students should fully understand the new forms of accounting and finance on the market today and be able to confront the challenges in the finance industry. Bitcoins are not new, over 100,000 merchants and vendors accept bitcoins worldwide. What other forms of currency are on the market today? That is what you will learn studying digital finance at GBSB Global Business School.

It is hard to predict to what extent digital finance will evolve, but rest assured, earning a Master in Financial Management, Digital Banking and Internet Finance will be an amazing investment in your future. For more information about enrolling in GBSB Global Business School’s Master in Financial Management, Digital Banking and Internet Finance program in Barcelona or Madrid, contact us here.

Written by Emily Dawn Szajda, GBSB Global Content Manager

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