Journal of Business & Financial Affairs

A Note on the Workings of Bitcoin

Abstract

Guan HC and Ameen Talib

Bitcoin, as a cryptocurrency and an alternative payment solution has gained popularity in certain circles. Existing literature offers discussions that are very specific, oftentimes about Bitcoin-related technical issues, but few takes the perspective of an overview that offers an understanding of how Bitcoin may work to the potential user. Though some level of technical understanding is required to appreciate the workings of Bitcoin, it is not necessary to fully understand Bitcoin’s computational system. The goal of this paper is to provide a working overview to Bitcoin, while highlighting current issues and possible advantages. Published literature is reviewed, along with current developments published on reliable Bitcoin-related websites and news reports, to ensure relevancy and timeliness as far as possible. The research conducted revealed that Bitcoin has many issues to be resolved before it can be taken as a mainstream payment option and currency, but has defined advantages that may only be developed with the advancement of time and consequently technology.