Digital Currency

B y Othman Darwish Introduction This is a proposed solution to fully automated stock exchange market based on Ethereum blockchain innovated  technology using smart contract and distributed ledger technology DLT. Smart contract is a computer program that performs as digital asset  and  is able to substitute  today securities financial instruments. Ethereum is an open source  decentralized  computing  platform that runs Smart Contract. Blockchain is a database of a distributed ledger that hold digital assets information (aka Smart Contract). By using  Ethereum  network, all middlemen are removed and users ( issuers and investors) are allowed to interact with each other directly. This solution will reduce time, cost and operational risks, it will also automat censorship, and more importantly, insure transparency and trust between all the parties involved in the interaction of that network.  The ability of digitizing financial assets...

Othman Darwish Although there is a frequent failure in economy monetary policy, digital currency  such as Bitcoin  does not  play a substantial role for money  in society. The inefficient or failure in central banks monitory policy, due to poor financials or policy maker vision  of a nation leads to implementing bad or corrupted financial practices in that country, which push people to tend to seek  out money substitutes or alternative currencies like gold or US dollar. Bitcoin follows pre-determined path towards a fixed eventual supply, which makes it extremely unlikely act as a currency with widespread usage. Thus, it is not a competing alternative currency. At economic  level, Bitcoin system follows a deflationary model, in which the total supply of Bitcoins - 21 millions by the year 2040 - is fixed and extremely controlled. The monetary policy of Bitcoin is embedded inside the system and  executed by computers  program, and no mea...

Othman Darwish Frequent  failures of monetary policy  in world economics  would  positively affects the increasing demand of Bitcoins market. Central banks' monetary policy main objective is to target inflation, price stability and exchanges stability. In today traditional centralized economics , monetary policy  is driven by political desire, not economic necessity .In contrary, decentralize economy with virtual currency like Bitcoins  monetary policy is transparent, open for everyone ,  not  controlled by limited number of individual policy makers, and  implemented by a computer algorithm. In underdeveloped countries, central banks are independent of government, yet they are still under its jurisdiction. In these countries, the ability for central bank to print money from thin air is significant source of revenue for the governments, if a government is fiscally constrained, it's going to print money at faster and faster rate, this k...

  By Othman Darwish Digital currency like Bitcoin and the technology behind  it "blockchain" would disrupt the traditional financial services. A slow but steady use cases of blockchain technology emerges every day, and the international settlement is one of the potential use cases that could revolutionize  the financial industry, and disrupt  the traditional complex ,risky ,and time consuming international settlement processes.  The main innovation of blockchain technology lies in the  ability of making peer-to-peer payments in a decentralized network in the absence of trust between parties or in any other third party. Traditional securities trading processes involves different parties to serve the pre-trade (clearing) and post-trade (settlement ) activities of the payment between the seller and buyer, these parties include but are not limited to the seller's broker and custodian, purchaser's broker and custodian, central securities depositories, an...

By Othman Darwish Financial institutions and central banks are monitoring closely the potential and opportunities of the new innovated technology  of digital currency like Bitcoin and   Blockchain . they are in a hope that this new technology will  improve the efficiency of international settlement   processes .The emergence of digital currency and blockchain technology ,and its potential advantages such as low risk, less cost, open design, speed of transaction execution  and no need for trusted intermediaries, will highly impact the current traditional international  settlement processes.  The settlement process is defined as a legal transition  during the time span between trade and settlement, a purchaser’s rights are purely contractual and thus personal, and only after settlement, they become proprietary, terminating counterparty risk. Settlement risk appears if a party fails to deliver the terms of a contract to the other pa...

By Othman Darwish Money is the way we get things we need and want. In this simple context  Bitcoins represents money that people  uses  to buy and sell goods and services as it address  some of the money functions, such as: medium  of exchange, store of value ...etc. It also achieves many of money qualities such as: durability, being fungible , divisibility ..etc. Many people describe Bitcoin  as the "Money of Internet" , or the inevitable evolution of today  form of money. In other words, Bitcoin is  simply  Money . Technically,  Bitcoin is a new  kind of money and innovative payments network , it is a form of  digital currency, issued and held electronically , and protected by cryptography. Unlike traditional  fiat-currencies or government-issued money, Bitcoin is not controlled or issued by any government agency,  instead, people and business can produces Bitcoin using computer resources and  by solvi...

By Othman Darwish Central and  commercial  banks around the world are looking at the progress and adoption  of  the digital currency like Bitcoin with a lot of fear. The real threat for banks come from the fact that  people everywhere  start questioning about the real meaning of money;  what is it and why it has a value? With digital currency era and the new innovated  technology like Bitcoin , banks historical role of being custodian on people money, and the central bank and government monopoly  game approaching its end in future . Bitcoins is new kind of money, it is formed of digital currency , issued and held electronically, and protected  by cryptography. Unlike traditional  fiat-currencies or government-issued money, Bitcoin is not controlled or issued by any government agency, payments and transactions are  exchanged in peer-to-peer networking, dropping  any needs  for trusted intermediaries or bank...

By Othman Darwish Recently, there is a growing number of financial institutions and banks that look seriously at the new  revolutionary  technology of Bitcoin and weight  its potential applications.  Bankers  all over the world  are fascinated by Bitcoin technology for the fast, low cost, and secure payment solutions it facilitate, thus, they try to maximize their banks profits by providing new business  services  using new innovated digital currency like Bitcoin . Banks are now racing to harness  the new innovation of Bitcoin and blockchain technology, they believe that this technology will cut off the cost  and transform the way the business  work. Blockchain  can be defined as the technology behind the cryptocurrecy Bitcoins, it is a decentralized immutable  public ledger that contains the details of every Bitcoin transaction that has ever been completed. Using innovated technical protocols, that ledger has prov...