Digital Economics

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Digital Economics refers to the worldwide network of economic activities that include commercial transactions both professional and personal taking place on digital computing technologies. This economic activity is enabled by information and communication technologies. The Digital economy a.k.a Internet Economy, New Economy, and Sharing economy is worth $3 trillion to date since the launch of the internet over 20 years ago.

Contents

[edit] Topics

[edit] Cryptocurrencies

Cryptocurrencies are digital or virtual currencies that use cryptography for security, they are difficult to counterfeit because of this security feature. Cryptocurrencies are unregulated and not issued by any central authority, as a result, they are immune to government interference or manipulation. The first cryptocurrency was Bitcoin, introduced in 2009 by Santoshi Nakamoto in Japan. As of September 2015, 14.6 trillion bitcoins were in circulation at a market value of $3.4 billion.

[edit] Articles

Barber, S., Boyen, X., Shi, E., & Uzun, E. (2012, February). Bitter to better—how to make bitcoin a better currency. In International Conference on Financial Cryptography and Data Security (pp. 399-414). Springer, Berlin, Heidelberg. (Ahmed Mustafa)


M. M. (2015). Cryptocurrency Peering As An Instrument. Department of Radio Monitoring and Radio Frequency Management, 64-69. (Rehan Jafar)

This article discusses the potential benefits and risks associated with BitCoin in regards to it being a peering investment instrument for various reasons ie; decentralization and absence of a single issuing house, as a result, this instrument is free from financial regulations by the government.

The author of this article brings to light the problems in the current monetary system and why crypto has the potential replace it. The existing monetary system due to a globally centralized economy has liabilities such as the absence of gold guarantee or any guarantee for that matter and sudden currency interventions. Hence, this article entails that we are living in a time where there is a search for a monetary system that substantially would have a lesser external impact from politicians and financial regulators. The cryptosystem with Bitcoin, in particular, is leading in the direction to replace the current monetary system. The BitCoin system was developed in 2008 by an anonymous programmer who worked under the pseudonym Satoshi Nakamoto in Japan.

Identifying the strengths in this article, the author explains rationally the difference the between the current fiat money and cryptocurrency, giving the readers credible reasons to understand why a change in the monetary system is needed? For example, in the global economy, currency is controlled by the country that controls the prices of goods along with factors such as real estate prices, cost of production and the control of the central bank. Hence, centralization.

Cryptocurrency, on the other hand, presents a decentralized financial system that guards against the drawbacks of the current monetary system. For example, it is free from regulators, the developer of this financial system has no control over the transactions like the central bank does and is based on the basic demand and supply model free from external influences compared to its counterpart.

Another identified strength in this article is the simplified explanation provided by the author to explain how the BitCoin system works. The Cryptosystem consists of host computers and local computers and BitCoin is based on a single one-time algorithm that was initially put in place and the divided computations performed by lower-powered host computers being a specific feature of this peering network. This absence of a single server makes it possible for decentralization of the network. As a result, the more users subscribe to the network, the more sturdy the network becomes. Though, this article is based on the understanding of BitCoin, for extended clarification, the author also brings to light the methodology of the entire cryptocurrency system. The cryptocurrency system is built on the participation of as many local computers in the network as possible. These “host” computers also known as trade platforms perform computations of math tasks in the form of an algorithm which then adds a puzzle in operation of the entire system and supports its functioning. The mathematical tasks performed are called hash-functions. These hash functions ensure the stability of the entire system, therefore, securing the transactions and generating new BitCoins.

A major strength of this article is regarding the contemporary drawbacks and issues associated with BitCoin. The author goes in depth explaining the immediate slump in the exchange rate of BitCoins which dropped by 10 percent. Even though BitCoin is free from regulations, it is not free from external factors that could affect its value. For example, when the Chinese internet company Baidu stopped accepting payments in BitCoin, the value of crypto coins as a whole slumped by 13%. Today, these sort of sharp fluctuations are possible more than ever because the government of any country in the world can ban the use of the cryptosystem. If all the major exchange markets refuse to accept crypto for real money, the system will collapse.

Pointing out the weaknesses in this article lies in the explanation of risks associated with cryptocurrencies. For example, in the case of BitCoin, the sellers receive an anonymous currency with an exchange rate that fluctuates and depending on the exchange rate, profit or loss is made. As a reader, this makes it hard to trust the currency as this section of the article revolves around a lot of scepticism. To conclude, by analyzing the main concepts presented in this article, I agree with the author that a financial system based on cryptocurrency needs facilitated development.

[edit] Sharing Economy

The Sharing Economy is a component of Digital economy that generates economic growth via peer-to-peer transactions on a digital platform. Today, the sharing economy mainly focuses on the sharing of underutilised assets, monetised or not, in ways that improve efficiency, sustainability and community. Popular examples include: Airbnb and Uber.

[edit] Articles

Zervas, G., Proserpio, D., & Byers, J. W. (2017). The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry. Journal of Marketing Research, 54(5), 687-705. (Rehan Jafar)

The sharing economy is an integral component of the Digital Economy that has opened revenue streams for consumers who indulge in a peer-to-peer transaction for providing products and services on a digital platform. This growing collaborative consumption has evolved significantly in the age of web 2.0.

In hindsight, the authors of this article investigate the hospitality sector of this peer-to-peer market and its economic impact on long-established ventures in the industry by analyzing the case of Airbnb. Airbnb, founded in 2008, is a leading platform for short-term travel accommodations and is a pioneer of the sharing economy as it has served more than 50 million guests. Today, Airbnb has a market capitalization worth $30 billion USD. Furthermore, Airbnb describes itself as "a trusted community marketplace for people to list, discover and book unique accommodations around the world" and it best represents a peer to peer marketplace in the sharing economy. In the Airbnb model, prospective hosts list their spare rooms on the platform and establish their own nightly, weekly or monthly price for accommodating guests. Diving into the economics of Airbnb, it derives revenue from both guests and hosts for this service acting as a mediator where guests pay a 9%-12% service fee for each reservation depending on the length of their stay and hosts to pay a 3% service fee to cover the processing costs. The business model of Airbnb operates with minimal regulatory controls in most locations and as a result, this maximizes the likelihood of a successful booking or in other words, a successful three-way transaction. This article quantifies its entry into the state of Texas and its transforming impact on the hospitality industry.

In regards to the reliability of data collection for this particular study, the authors collected combined data from various sources such including Airbnb website, the Texas Comptroller Office, STR, U.S Census Bureau, a population survey from the U.S Bureau of Labor Statistics and hotel reviews from TripAdvisor.

The authors conclude that the impact of Airbnb is non-uniform, affecting the sales of lower priced hotels that do not cater to business travelers transforming the economy segment of the industry. Moreover, Airbnb primarily benefits all consumers and not just the participants of the sharing economy.

The most staggering strength of this article is in its selection of sample research size. The authors picked the city of Austin in the state of Texas as Airbnb has the highest causal impact on hotel revenue in the respected city. The time of assessment adds relevance to the study as it was conducted during peak demand period, for instance during the Southwest festival. Furthermore, the authors also bring to light the limitations in their study that could be addressed in future research. For example, the results of this study cannot predict the impact on other markets, as the dynamics of supply and demand differ across different regional markets.

Assessing the other key strengths in this article, the authors bring out what the sharing economy has enabled people to do, which is collaboratively make an additional income by making use of their underutilized inventory on the digital platform. In addition, they also point out what led to the inception of the sharing economy, that is the rise in technological and digital innovations and its adoption on mobile platforms. These innovations and its adoption have equipped users to enter the market and keep transaction overheads low.

Zervas. et al (2017) came to a conclusion that as the size of the sharing economy grows, so will its economic impact. In addition, this is the first article in this category of market research to provide empirical evidence on how the sharing economy not only has an impact on the collective economy but also significantly changes the consumption patterns of consumers.

This article has demonstrated the need to pay attention to the impact of collaborative consumption and the economic impact on the industry as a result of peer to peer activities online. On a final note, it is important to consider that the sharing economy includes using different currencies which go beyond products and services and turn into intangible benefits such as time and a sense of community, as well as the shared norms of the exchange. This is certain, specifically in the case of Airbnb.

Mocker, M., & Fonstad, N. O. (2017). How AUDI AG is Driving Toward the Sharing Economy. MIS Quarterly Executive, 16(4). (Ahmed Mustafa)

The term digital economy encompasses anything that is powered by digital technologies. Something that arises within the digital economy and has seen significant growth in recent years is the sharing economy. The sharing economy focuses on the shared use of under-utilized assets that in ways improve the efficiency and sustainability of the community. As the sharing economy grows it will become part of the real economy without any special terminology. The article by Mocker and Fonstad titled “How AUDI AG is Driving Toward the Sharing Economy” explores how an already established car manufacturer such as AUDI will integrate its own car share service in the sharing economy and in doing so give us an example of the threats and obstacles faced by any similar incumbent company entering the mobility services and car sharing industry.

Mocker and Fonstad use AUDI’s experience as an example to illustrate potential risks and strategies for car companies that wish to transform themselves to participate in the business of car-sharing in the future. Automotive companies traditionally look at things from the perspective of the car. To enter the sharing economy this perspective needs to change to that of the customer. Companies in this area need to address two key questions: how do they need to transform their business in response to the car-sharing economy and which how can they do so competitively in the current economic environment? AUDI’s example will help newer companies solve these questions. The authors emphasize that information technology is pivotal for this purpose and is going to be involved in all aspects of this new sharing economy era. The article also shows us that the sharing economy has breathed new life into the IT industry and is the most exciting thing since of the boom of modern search engines and the dot.com era.

The authors have undertaken an in-depth analysis of how an automotive giant can carve a place for itself in the car-share economy. One of the strengths of this article is the comprehensive background information that the authors provide about the state of AUDI’s operations and how it made plans to face future challenges. The company strategically pursued additional sources of revenue from targeted mobility services that are premium rather than going for the less segmented markets of competitors such as BMW and Zipcar. The company introduced enormous changes even in its organizational structure and launched a newly built IT department; it remained dedicated to balancing autonomy for innovation and integration for competitiveness. The authors give us a thorough background of AUDI’s game plan and previous sales to help us understand what it would take for the company to integrate into the sharing economy. Presently it is too early to tell whether AUDI’s approach to the car sharing economy will result in success. However since the sharing economy is relatively new and in its growth phase, watching this company’s journey into mobility services can certainly teach us a thing or two about the business.

The biggest strength of this article is that it not only highlights the challenges that incumbent firms will face in the future but also provides a solution to these challenges. It uses AUDI’s experience to suggest potential answers to the questions it poses. The article highlights four areas in response to the first question. New firms can compete in the sharing economy if they know who their competitors are. These can either be car manufacturers or pure car-sharing services such as Uber. They need to know what segment of the market they are targeting for the sharing economy service, how they would leverage any existing capabilities to gain an advantage and how they plan to make money. As explained in the article, AUDI’s answer to these questions was using a defined target segment and placing importance on a premium service in the sharing economy. As for the second question, the authors explain that balanced integration and continuous experimentation and innovation are likely to be the keys to adapting to the demands of the sharing economy.

Another prominent strength of the article is that it uses scientific and robust research techniques. 11 people were interviewed from the IT and non-IT side of the company. Face to face interviews was conducted in AUDI’s headquarters in Ingolstadt in 2015. More follow-up interviews were conducted using a telephone. All the interviews were transcribed after which a case study was written by the authors. Data about other companies were acquired through their public records. The article also provides a list of the interviewees’ names and what role they perform at the company. The article was clearly written after comprehensive data collection and thorough analysis of the results. The evidence used is credible and strong enough to justify the arguments of the authors.

The one and only weakness of the article that is clearly identifiable is that it uses the example of an automotive giant such as AUDI to set a standard of how firms must operate in the sharing economy. AUDI which is a multibillion-dollar company has far more resources than a smaller company would have. This leaves some gaps in the applicability solutions suggested as not all companies have the means to brand themselves as well as AUDI.

The authors conducted in-depth and thorough research and came up with well thought out arguments that clearly help us understand the car-sharing economy while also shed light on the sharing economy as a whole. They have shown us why digitization is important in the car sharing economy and used AUDI as an example to teach us how other firms can integrate into the sharing economy.

Rowe, P. C. (2017). Beyond Uber and Airbnb: The Social Economy of Collaborative Consumption. Retrieved June 2017 (Rehan Jafar)

This article evaluates the growing collaborative consumption and the economic impact that has evolved as a result of web 2.0, which has given rise to the idea of the Sharing economy. The major strength of this article is that while focusing on the economic impact of sharing economy and the so-called collaborative consumption, it also brings to light social aspects of this consumption movement to construct a complete picture of the sharing economy for the readers.

This article brings forward the social and economic aspects of the collaborative consumption by presenting a case study of an Australian grassroots community, MamaBake. MamaBake promotes communal cooking and sharing of meals between mothers. Another identified strength of this case study used is that it shows that even non-monetary currencies, which in this case is the shared norms of reciprocity, can promote the sharing economy that goes beyond market orientation, by promoting soft, non-economic value and opening up new streams for competition.

Perhaps the greatest strength of this article is on page 4 under table 1, in which the author explains various manifestations of the collaborative consumption movement using digital technologies. Collaborative consumption is divided into four components, Market, Government, Advocacy and Social. Collaborative consumption under Market is operated by large multinationals, profit-oriented organizations. The market involves applications in terms of digital technologies and possesses one-way communication. Furthermore, examples of Market collaborative consumption include, Airbnb and Uber. Collaborative consumption in Government involves services that require online membership and example includes Timebanking. This article highlights the social aspects of collaborative consumption, which has received the least attention in academia. This aspect of sharing economy is run by individuals and the monetary currency they utilize often go beyond products and services.

This article showcases that it is vital to think about a full picture of community-oriented utilization, one which focuses on cooperative utilization as a dynamic practice and permits envisioning elective social game plans. These incorporate utilizing diverse monetary forms which go past items and administrations into impalpable advantages, for example, time and a feeling of the group, and also the common standards of the trade. It appears the different manners by which individuals can arrange socially without a mutual philosophy or an aggregate objective.

Täuscher, K., & Kietzmann, J. (2017). Learning from Failures in the Sharing Economy. MIS Quarterly Executive, 16(4). (Ahmed Mustafa)

The sharing economy has been the biggest thing since the rise of the dot-com era. Firms such as Uber and Airbnb has sought to take full advantage of this economy and have risen to the occasion by utilizing Scalability and Network Effects. The authors of this article have therefore sought out to establish what practices are best when it comes to succeeding in the sharing economy. They have identified the mistakes that firms make when entering into the sharing economy such as survivorship bias. The authors wish to provide guidance to managers and firms entering this economy in the next few years by helping them learn from the failures of firms in the past and by telling them the importance of hybrid business models in mitigating risks that have been identified by previous cases.


Also known as the collaborative economy or the peering economy, the sharing economy adds value by allowing those who own resources that are idle to make them available to those who need them. The article talks about three firms that are examples of success when it comes to the sharing economy being Uber, Airbnb, and Udemy. Although the cases of these firms work as an example for other firms they had more funding combined than all the other 500 firms that have recently entered this economy. Therefore these highly successful firms do not do well in representing the average firm of the sharing economy. The authors explain two concepts that new managers who join the sharing economy offer suffer from which are survivorship bias and confirmation bias. Survivorship bias means to focus only on the strategies of those firms that are successful while ignoring the mistakes of firms who have failed. Confirmation bias which means that these firms only look for cases that help to straighten their beliefs instead of looking for from documented evidence.

The authors go on to identify two characteristics on which the future profitability of firms entering the sharing economy is based. The concept of scalability means the firms' ability to offer its services to a large amount of consumer without increasing its costs. Networks Effects can be described as the ability to make its offerings more attractive as more consumers join its network. A good example of this is Airbnb as the increase in travelers proportionally leads to an increase in the homes being offered. Both these characteristics when combined lead to a virtuous cycle in which firm eventually reaches maximum profitability and size after which new firms are unable to enter this market segment anymore. This is intact the nature of sharing economy dynamics which often lead to a ‘Winner takes all’ scenario.

The authors then go on to share a number of mini cases of failure in the sharing economy using the examples of different firms. The first is an example of carpooling.com which was a German firm that allowed users to share rides in order to cut traveling costs. Even though the business was highly scalable it lost profitability when it demanded a small commission fee for registering on the network. This was a case of ‘low customer lock-in’ where customers left as they did not want to pay for a service that was previously free.

Homejoy was the pioneer for a home to home cleaning services but suffered from low control over service quality. After getting a taste of the promotional discount offers the company offered, customers were not willing to pay regular prices. Also, the firm had a problem with independent contractors that offered different levels of quality and were inconsistent with standards. Faced with a choice between independent contractors or highly qualified service for a premium price the firm was unable to retain its customers.

Beepi was established in 2013 and served as a marketplace for used cars. The company had algorithms that connected car owners with potential buyers. The employee’s of the company handled the transaction details and delivered the paperwork in person. Although the startup had great potential car acquisition is an event that takes place once in a number of years the company could not keep up with its customer acquisition costs. This case was a great example of low transaction frequency where costs occur before the firm has a chance to generate revenues.

The authors then go on to talk about UDemy which was developed as an online marketplace where people shared knowledge by uploading online lessons which could be bought. Udemy’s original market plan was similar to that of Airbnb as it cut a small fees from what the instructor earned but as the sharing economy grew UDemy changed its approach to one of a hybrid model that uses a network-based approach that provides the benefits of a peer to peer model while also providing the stability of consistent revenues from a B2B model.

The strengths of this article are evident in the fact that it gives new companies in the simplest of terms the causes of failures that they need to study in order to be successful. Not only that but it uses mini cases from real-world examples to illustrate how these causes can risk their success in the sharing economy.

The authors of this article have also gathered insight from two research approaches by conducting interviews with 21 managers and investors of firms to get their views on perceived success drivers in the collaborative economy. They have also analyzed the cases of 73 firms that made it past startup. These research methods have provided them with important insights into the reasons for failure and underperformance and can be seen as a strength of this study.

The biggest strength of this article is that it provides recommendations for evaluating and innovating business models in the peer to peer economy. It also provides new firms with questions to address when evaluating the risks involved in startups. The authors also tell us about the importance of creating a hybrid business plan and questions to address while doing so. Another strength is that the article is dated December 1st, 2017 and so is fairly recent.

The nature of the sharing economy is one of a high risk and reward. One of the weaknesses of this study is what to do when a firm enters a segment of the economy that is already dominated by a large firm. The authors also tell us that in the next few years several hybrid business might emerge that blur the lines between the sharing economy and the traditional one, however, they do not tell us if these approaches will still hold true in that time.

Davidson, A., Habibi, M. R., & Laroche, M. (2018). Materialism and the sharing economy: A cross-cultural study of American and Indian consumers. Journal Of Business Research, 364. doi:10.1016/j.jbusres.2015.07.045 (Rehan Jafar)

Sharing economy today is an integral part of a typical consumer lifestyle. The sharing economy promotes non-ownership consumption among consumers. Perhaps, the major strength of this article is that it looks at the role of materialism in sharing economy by providing cross-cultural study across consumers in India and the United States. This global rise of the sharing economy today has attracted immense attention from marketers and researcher.

(Davidson et al., 2017) sheds light on led to the rise of the sharing economy and the development of its economic model. The concept of sharing economy emerged in the aftermath of the global financial crisis of 2008. This was the time when consumers sought other means of gaining access to products and services to avoid the burdens of ownership due to a widespread change in consumption patterns. The economic downturn, rise of internet technology and widespread adoption of digital media in the mobile domain and the rise in awareness about declining natural resources among consumers were the main factors that led to the rise of this collaborative consumption. As a result, with the evidence provided in this article, the sharing economy is now worth $15 billion the U.S and is estimated to grow over $300 billion in the next decade.

Another strength of this article relates to the statistical evidence provided, as their investigation shows that, the sharing economy is growing on a global scale due the figures such as Airbnb is operating in 190,000 cities and Uber is replacing traditional taxi services in more than 370 cities around the world. Furthermore, other evidence apart from this research has typically focused on programs that are more exchange versus sharing based. Hence, this is conducted study is first in its domain.

The authors of this article have based their research on the following questions: “Whether/how materialism does influence participation in the sharing programs of the sharing economy? Whether this effect exists/ differs cross-culturally?” (Davidson et al., 2017)

The sample for the study was presented with a survey questionnaire to a panel of American and Indian participants through an online data collections platform. We can determine that the survey results were accurate because it was disguised as a personality test as it would distract participants from the true nature of the study.

In terms of weaknesses in this article, there are none, but the study certainly had some limitations as the sharing economy is a fairly new global phenomenon and it has raised at a breakneck speed. As a result, its research has fallen behind in understanding and explaining its related issues. Furthermore, even the research that has been conducted has mostly been concentrated in North America. These implications might have limited the background research required for this study.


To conclude this is the first paper to investigate the cross-cultural aspect of the sharing economy. The article had intriguing findings on consumers from both the countries. In the United States, consumers of the sharing economy seek collaborative consumption for transformative and hedonic experiences to improve their self-image and well being. Conversely, in India, collaborative consumption leads to participation in sharing-based programs, increasing productivity. However, in hindsight, the authors find that materialism and sharing based programs are tied to several positive values for example; bonding between peers and communities, ethical consumption and environmental concerns. These findings are new to the field and would become more extensive for the understanding of the sharing economy and interchange with materialism cross-culturally as the authors propose an interesting future research question that is “What positive effects can sharing economy bring about for the materialist consumer?” (Davidson et al., 2017)

Malhotra, A., & Van Alstyne, M. (2014). The dark side of the sharing economy… and how to lighten it. Communications of the ACM, 57(11), 24-27. (Ahmed Mustafa)

The article is a short commentary on the sharing economy’s weaknesses and ways in which these could be overcome. It does not focus on any particular business model but takes examples from businesses for sharing rooms, tools, cars, bikes and ad hoc taxi services. Situating the introduction: The sharing economy is growing at a pace faster than governments and regulatory bodies can understand how to react to it. There are some clear benefits, but there are also some loopholes which can lead to the consumers, the competitors or the business or society to suffer in unexpected ways. Some of these weaknesses of the sharing economy have already come to light. Effective strategies need to be formulated to deal with these, without stifling the sharing economy itself. Outline of arguments: - For accommodation sharing services, transient users may be disrespectful towards long-term residents such as the neighbors. If the majority of the accommodations are rented out on a short-term basis, there may be a shortage of long-term rentals which will lead to rent hikes and makes things difficult for low-income households. - Personal biases can lead to false reviews from the users or the providers. Providers may also refuse to offer services to certain users. - Ride-sharing services are not burdened with all the costs/taxes and regulations that apply to taxi businesses, giving them an unfair economic advantage over the latter. This leads to unfair competition in the market. - In the short-term, businesses participating in the sharing economy might gain from micro-outsourcing, but in the long-term, marginal profits earned by the service providers won’t cover the acquisition of new skills, health care, and retirement costs. This will create problems for service providers and eventually the sharing businesses - Sharing services can ultimately harm the overall demand for those services as well as the manufactures/primary providers of the service. For example, car-sharing can deplete demand for vehicles and affect car manufacturers in the long-run. This can disturb the overall economy. - Sharing businesses refuse to accept liabilities and risks associated with the business that are traditionally taken care of by the service providers. Such behavior might lead to opposition to the business model entirely. - The article proposes solutions to these weaknesses. - Businesses in the sharing economy should accept risks arising from their services. This will eventually benefit the sharing ecosystem and enhance profits. - Businesses should also invest in their customers; customers here means people who are working for them such as the Uber drivers working for Uber. Improved skills for the customers will create more business and increase profits in the long-run. - Sharing platforms should be used to self-regulate and keep a strict check on all those part of the community to make sure no party harms the other. Self-regulation will reduce the likelihood of harm to any of the parties involved in the business. - Tax laws by the governing bodies should be creative enough to level the playing field for all businesses without taking away the advantage that sharing economies enjoy due to their business models. - The online reviews for these services should be validated before being made public as buying decisions are based on these reviews almost entirely. Strengths - The article is short and clearly written. The different arguments are elaborated upon using real-life examples and cases which make them easy to follow. - It conveys some very important ideas, but the mood of the writing is kept the light by making pop-culture references such as the reference about Seinfeld and including interesting quotes such as the one by Jaron Lanier on the ‘shared serfdom’ in the sharing economy - The article presents a balanced view. It acknowledges the short-comings of the sharing economy but also mentions that these weaknesses can be overcome. This is a refreshing approach compared to writings that either refuse to recognize the harms that might result from sharing services or those that completely oppose the idea of sharing altogether. - The logic of the arguments makes it very easy to go from the problems described in the solutions proposed. Moreover, the solutions are practical and may actually solve some of the problems associated with the sharing economy. Weaknesses - It is very difficult to point out weaknesses in the article since it happens to be very concise and well-written. One possible weakness could be that the solutions proposed would be more applicable to large sharing businesses such as Uber and Airbnb, but might serve as barriers to entry for smaller enterprises trying to enter the market. For example, accepting risks and investing in customers will not be possible for a new entrant into the sharing economy that is trying to survive when faced with much bigger competitors. However, for well-established businesses, these solutions might be much easier to implement into practice.


[edit] Wim Raymaekers: Cryptocurrency Bitcoin: Disruption, challenges and opportunities – Nick Apata (5400775)

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Cryptocurrency has been a major talking point in our media and society for the last couple of years, especially of recently. Popular Cryptocurrencies such as Bitcoin and Ethereum has become such a staple within the financial world, to a point where Bitcoin new startups are developed on a regular basis. Since Bitcoin is such a hot topic within the financial world, more people to develop an interest towards Bitcoin. This caused, more and more businesses to accept Bitcoin as a form of payment and as well this also caused a lot new Cryptocurrencies start-ups. Bitcoin and Cryptocurrency in general starting to gain popularity when people were trying to purchase products on the Internet. However Bitcoin really became popular when the consumers were selling their Bitcoin(s) for a much more expensive price that they acquired it for allowing people to make substantial profits. Due to the financial opportunity that Bitcoin has presented, more and more people were becoming open to invest in the Cryptocurrency. In 2017, Bitcoin reached a record high price of $19,783, and as well more businesses both physical and online are starting to accept Bitcoin as a form of payment, example of a business that accepts Ccyptocurrency is Tesla. In 2017 Tesla president and founder Elon Musk announced that consumers could pre-order and buy Tesla cars using Bitcoin. As more businesses are accepting Cryptocurrency as a form of payment and the demand for Bitcoin and other Cryptocurrency are on the rise.

Wim Raymaekers’ Cryptocurrency Bitcoin: Disruption, challenges and opportunities explored and investigated the challenges that Cryptocurrencies will have to overcome in order to become a common form of payment, and as well as the opportunities that will arise from implementing cryptocurrency in our society. Essentially, through his research and investigation Wim Raymaekers is attempting to answer four questions essentially, the four questions are: 1) what are the key challenges that cryptocurrencies must overcome to achieve widespread customer adoption? 2) What are the major risks regarding cryptocurrencies, when and how will cryptocurrencies and their service providers be regulated? 3) In their current state, what are the killer apps for cryptocurrencies? 4) What are some of the more fundamental, longer-term issues cryptocurrencies must solve? Wim Raymaekers conducts his investigation in attempt to answer these research questions.

Based on Raymaekers’ reading, it appears that Bitcoin and other cryptocurrencies are going to have to overcome a lot of challenges before cryptocurrencies can be fully implemented in our society as a common form of payment. One of the problems that crypto is facing, especially Bitcoin is the fact that cryptocurrencies is extremely difficult to regulate. Crypto isn’t considered a legal tender within America, but rather it is considered as a property. However the problem is majority of the consumers who retain cryptocurrencies are unaware that is it consider property and not legal tender, so when consumers are buying or selling cryptocurrencies there are not being taxed. With that being said, it will also be difficult to tax Bitcoin users, because one of the main features of Bitcoin that made Bitcoin so marketable is that Bitcoin is untraceable. And since this one of the main features that made Bitcoin popular to begin with, there will most likely be uproar if that feature was removed. Another challenge that cryptocurrency will endure, is gain the trust of the consumers. Although crypto has a cult following right now, the mere fact is that majority of the country (Canada) are still not owners of crypto. With that being said, if crypto was to become implemented in our everyday lives, firstly people will be very hesitant to trust and use crypto and as well, the question remains can crypto technology even manage an widespread adoption. Another major problem with cryptocurrency is the price fluctuations. Since the value of crypto is solely dependent on the demand, it is common to see major price fluctuations in the crypto world. In 2014, Bitcoin was valued at $1000 in January by the time September came around it was valued at $400. This may discourage businesses from accepting crypto as a form payment and this might discourse consumers from paying in crypto.

However, some of the benefits that Raymaekers mentioned was that implementing crypto in our society is the mere fact that crypto is cheaper than debit (account charges) and credit cards especially when it’s being used online to purchase an item. Crypto is also faster then most form of payments, however most of the form payments are already fast enough, meaning consumers aren’t seeking a form payment that will be more speed efficient. Judging from Raemakers’ article was the challenges by far outweighs the benefits of implementing cryptocurrency in our society. However majority of these challenges are conquerable, but considering all of the restructuring needed to overcome these challenges, the questions remains is it even worth it to implement crypto? Judging of the article, it is probably not worth it.

[edit] Bitcoin Loans and Other Cryptocurrency Tax Problems – Nick Apata (5400775)

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Just over a decade ago we underwent a digital paradigm shift in our world. When our society was first introduced to the Internet, we were initially in the web 1.0 stage. The Web 1.0 stage is when the Internet medium for one just to receive information through static web pages. In web 1.0, users couldn’t contribute content; the Internet wasn’t an interactive place. However, this began to change when we shifted into web 2.0. Web 2.0 is when the Internet shifted into an online place where users can do more than only receiving information from webpages, but also allowed them to contribute information and content. This shift from web 1.0 to 2.0 is important and relevant to the crypto world because when the shift was occurring it showed that our technological development was developing at a rapid pace. Due to the technological advancements that were being introduced to our society, it promoted to make a shift into a digital paradigm. In this digital paradigm, our society is dependent on technology, if the Internet were to shut down for a day; our country plus many other countries around the globe probably wouldn’t be able to operate efficiently. As we’re currently in this digital stage, we’re seeing different type of technology emerge in our society everyday. With that being said, the implementation and emergence of digital currencies is expected. Monia Milutinovic explores the innovative technology behind cryptocurrency.

Monia Milutinovic in her journal Cryptocurrency claims that cryptocurrency was one if not the greatest technological invention in the last 10 years. What makes cryptocurrencies impressive is; the idea of crypto and the technology that is able to enable cryptocurrency. The idea of cryptocurrency is to have a digital asset that represents currency and is able to purchase products and service online and limited physical stores that accepts it (the number of stores are steadily increasing). However, what makes cryptocurrency so appealing to consumers is the near fact that one cannot trace the transactions of cryptocurrency. This done through cryptography, cryptography is where the miners gather all the information and content within each transaction then they put the content through a blockchain, the blockchain now secures and turns the readable content into illegible codes into codes that cannot be cracked. These technologies are so far advance that there is absolutely no way the government can control and each monitors the transactions. When Bitcoin was first introduced to the public, one of their main marketing point was that Bitcoin is completely separated by the any banks, central authority or the state itself, meaning that the currency does not belong to anybody else other than the people who bought, and the value of the currency cannot be affected by the state but rather only affected by the public. The libertarian view that Bitcoin expressed to the public, set the tone for the cryptocurrency market. So as more cryptocurrency start-ups are emerging, majority of them express the same libertarian view that Bitcoin has expressed to the public in the past.

With the technology of cryptocurrency being so advance and being able to create and attract a large cult following, it is clear that cryptocurrencies is here to stay, at least for the next short while. Milutinovic believes that cryptocurrency is one the best technology invention and has the potential to affect the economy. Milutinovic believes that since the emergence of crypto that more and more users will begin to make illegal purchases on dark webs pages. Since cryptocurrencies transactions are secured, it is impossible for the government or for a hacker to trace down to who made the purchase. Another way this will affect our economy is by the trading market of Bitcoin. Bitcoin has presented many opportunities for economic growth, as more and more people realizing the potential in this growth, more people are beginning to invest towards Bitcoin and other cryptocurrency. As more people invest in the cryptocurrency industry, more job opportunities will be presented, as programmers, miners, managers, and much more employees in different fields will be needed. Overall the emergence of cryptocurrency will cause more good for society than harm.

Many countries are recognizing the potential behind cryptocurrency and are starting to embrace the technology. The government of Bulgaria created their own cryptocurrency while creating their own blockchains as well. This can be a good thing for Bulgaria because since they created their own blockchains they are able to decode and encode content themselves. This is a solution and a response to lower the chance of consumers using cryptocurrencies to purchase illegal product/service on the darkweb. However, the fact that the government is directly attached to the cryptocurrency in Bulgaria, Bulgarian may not like that because the whole premise of crypto was to be decentralized from the state. However as more and more countries around the world are starting to embrace crypto technology, it seems that cryptocurrency is here to stay.

[edit] Monia Milutinović: cryptocurrency (Nick Apata 5400775)

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Just over a decade ago we underwent a digital paradigm shift in our world. When our society was first introduced to the Internet, we were initially in the web 1.0 stage. The Web 1.0 stage is when the Internet medium for one just to receive information through static web pages. In web 1.0, users couldn’t contribute content; the Internet wasn’t an interactive place. However, this began to change when we shifted into web 2.0. Web 2.0 is when the Internet shifted into an online place where users can do more than only receiving information from webpages, but also allowed them to contribute information and content. This shift from web 1.0 to 2.0 is important and relevant to the crypto world because when the shift was occurring it showed that our technological development was developing at a rapid pace. Due to the technological advancements that were being introduced to our society, it promoted to make a shift into a digital paradigm. In this digital paradigm, our society is dependent on technology, if the Internet were to shut down for a day; our country plus many other countries around the globe probably wouldn’t be able to operate efficiently. As we’re currently in this digital stage, we’re seeing different type of technology emerge in our society everyday. With that being said, the implementation and emergence of digital currencies is expected. Monia Milutinovic explores the innovative technology behind cryptocurrency.

Monia Milutinovic in her journal Cryptocurrency claims that cryptocurrency was one if not the greatest technological invention in the last 10 years. What makes cryptocurrencies impressive is; the idea of crypto and the technology that is able to enable cryptocurrency. The idea of cryptocurrency is to have a digital asset that represents currency and is able to purchase products and service online and limited physical stores that accepts it (the number of stores are steadily increasing). However, what makes cryptocurrency so appealing to consumers is the near fact that one cannot trace the transactions of cryptocurrency. This done through cryptography, cryptography is where the miners gather all the information and content within each transaction then they put the content through a blockchain, the blockchain now secures and turns the readable content into illegible codes into codes that cannot be cracked. These technologies are so far advance that there is absolutely no way the government can control and each monitors the transactions. When Bitcoin was first introduced to the public, one of their main marketing point was that Bitcoin is completely separated by the any banks, central authority or the state itself, meaning that the currency does not belong to anybody else other than the people who bought, and the value of the currency cannot be affected by the state but rather only affected by the public. The libertarian view that Bitcoin expressed to the public, set the tone for the cryptocurrency market. So as more cryptocurrency start-ups are emerging, majority of them express the same libertarian view that Bitcoin has expressed to the public in the past.

With the technology of cryptocurrency being so advance and being able to create and attract a large cult following, it is clear that cryptocurrencies is here to stay, at least for the next short while. Milutinovic believes that cryptocurrency is one the best technology invention and has the potential to affect the economy. Milutinovic believes that since the emergence of crypto that more and more users will begin to make illegal purchases on dark webs pages. Since cryptocurrencies transactions are secured, it is impossible for the government or for a hacker to trace down to who made the purchase. Another way this will affect our economy is by the trading market of Bitcoin. Bitcoin has presented many opportunities for economic growth, as more and more people realizing the potential in this growth, more people are beginning to invest towards Bitcoin and other cryptocurrency. As more people invest in the cryptocurrency industry, more job opportunities will be presented, as programmers, miners, managers, and much more employees in different fields will be needed. Overall the emergence of cryptocurrency will cause more good for society than harm.

Many countries are recognizing the potential behind cryptocurrency and are starting to embrace the technology. The government of Bulgaria created their own cryptocurrency while creating their own blockchains as well. This can be a good thing for Bulgaria because since they created their own blockchains they are able to decode and encode content themselves. This is a solution and a response to lower the chance of consumers using cryptocurrencies to purchase illegal product/service on the darkweb. However, the fact that the government is directly attached to the cryptocurrency in Bulgaria, Bulgarian may not like that because the whole premise of crypto was to be decentralized from the state. However as more and more countries around the world are starting to embrace crypto technology, it seems that cryptocurrency is here to stay.

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