This study is proposed by:
Ms. Sherin Hazboun, Instructor, Department of Software Engineering
Mr. Alex Hadweh, Instructor, College of Business
We propose a study to examine the economic feasibility of using digital currencies that are built on blockchain technology, specifically the Bitcoin, in our Palestinian financial market in day-to- day transactions. Many studies have revealed that the new blockchain technology is revolutionary and is redefining how we store, update, and move data. This decentralized encrypted data storage had and will have many implications for business and society. However, so far very little work has been done to explore the possibility of running a captive economy like ours on digital decentralized currencies.
We will start by conducting a historic review of events by comparing investors' reactions to new trends and how their excess speculations could lead to destructive bubbles. For instance, the people's reaction to cryptocurrency nowadays is similar to how the Dutch reacted to the Tulipmania in the 1630s, similar scenarios occurred in the early 2000s' following the rise of internet and telecommunications, and then finally we witnessed the housing bubble of 2008. Many professionals and investors are expecting similar events to occur very soon again following the fall of bitcoin and cryptocurrencies.
Further, we would like to study the current cost per transaction at the Palestinian financial institutions (such as commercial or Islamic banks, and money changers), with that of conducting similar transactions using bitcoins (for example). Studies reveal that, decentralized transactions are cheaper than those conducted through an intermediary and provide security, anonymity and data integrity since blockchain verifies each
transaction added to the block chain, to ensure that the inputs for the transaction have not been spent previously spent. The basic idea behind Bitcoins and the blockchain is to move into a completely decentralized money system where transactions are not dependent on a third party. It is considered one of the most powerful financial innovations in centuries.
Bitcoin is the most popular digital currency, and thus it has attracted the attention of many investors around the world and millions nowadays carefully watch its prices bouncing. Although Bitcoin has existed for almost 9 years, professionals have continuously criticized it as they claim it is subject to wide swings. In fact, its market price was equivalent to almost $20,000 in December 2017 but now it sells for $8,810 as of March 10th, 2018 at 11:15 pm (UTC +3h). Blockchain, the underlying technology that drives digital currencies, is a great tool that could potentially have many different uses and impacts in the futures. But when it comes to cyber security, will the technology be a cyber security help or hindrance?