Bitcoin — The Dawn of a Better World or a Threat to Finance?

Bitcoin; Photo: The Guardian via Bloomberg (Getty Images)

“Bitcoin is one of the most important inventions in all of human history. It’s the dawn of a better, more free world,” states the CEO at, Roger Ver.

However, according to the Chairman and Chief Executive Officer of JPMorgan, Jamie Dimon, “Bitcoin is a fraud that will ultimately blow up and it is only fit for use by drug dealers, murderers and people living in places such as North Korea”, as stated in an article by Angela Monaghan from “The Guardian” in 2017.


The opinions are strikingly opposing. But what is Bitcoin in itself? Momtchil Karpouzanov, the Corporate Finance professor at the American University in Bulgaria, gives it the following definition:

“It is an electronic decentralized payment system based on a crypto-currency and relying on a blockchain technology and cryptography. It is designed to provide users with certainty in the execution of their contracts without the need of a central unbiased administrator like the Central Bank.”

Simply put, Bitcoin is an eight-year-old privately created and operated exchange system with its own currency. Currently, 1 Bitcoin equals $3912.73 US.

The name Satoshi Nakamoto is what pops up when one searches for the creator of Bitcoin. According to Karpouzanov, it doesn’t matter whether that is one person or a group of anonymous hackers, as many suspect. “Humans have been engaging in voluntary monetary exchanges for millennia and never bothered to ask who invented money.” Karpouzanov said.

“This crypto-currency, the Bitcoin, is generated by complex algorithms known as mining,” said Karpouzanov. “All transactions are recorded and the ownership of each bitcoin is doubtless, which prevents double-spending.”

Mining explained; Source of information: Genesis Mining


Karpouzanov doesn’t see Bitcoin as a threat to finance but rather as an opportunity. “Eventually, the bitcoin currency would be one among many, however the blockchain technology is an amazing break-through. It offers the possibility to implement “smart” contracts freeing the payment system from the need for a clearing house where all inter-bank positions are compensated,” he said.

However, Karpouzanov doesn’t think that Bitcoin could be a substitute for conventional money. “Firstly, the State can enforce the use of money provided by the Cental Bank through limiting payment of income taxes to the national currency only. Also, the bitcoin doesn’t allow for full anonymity. The decentralized public ledger contains the relevant information about who owns what and how much are they spending,” Karpouzanov said.

According to him, Bitcoin is not suitable for everyday payments and consumption but rather for medium and large businesses.

Kristiyan Babulev, a student majoring in Information Systems and Computer Science at AUBG, has used Bitcoin in its full capabilities — from mining, to storing it in a wallet, to using it for purchase and exchange.

“I bought the parts for my computer using Bitcoins. I am still using them when I need to, and I plan to in the future,” Babulev said.

Vladislav Georgiev, a junior at AUBG, bought two bitcoins when he was a senior in high school when the price of one bitcoin was around $300 US. However, soon their price fell to $200 US. “I thought I had been cheated but decided to keep them just in case the price went up again,” Georgiev said. Now the rate is $3912.73 US. “I guess I was just very lucky,” he added.

“If one needs to execute their purchasing power from their bitcoins in order to acquire a house, pay for education or get some expensive medical treatment, then they need to transform their purchasing power in the goods or services they want. Otherwise, it may become a form of fetishism — being potentially very rich, as its price increases, but starving and lowering one’s living standards,” Karpouzanov said.

As for the comment by Dimon that Bitcoin is only used by criminals, Karpouzanov had only one thing to say: “Plenty of dollars have been used by drug dealers and terrorists.”


Mariya Redzhova is a journalism student at AUBG. She wrote about Bitcoin because she wanted to dig deeper in the subject.