Bitcoins challenge To The Financial Institutions

Abstract: Bitcoin is a cryptocurrencyand worldwide decentralizedpayment system. The network is conducted through peer-to-peertransactionsand these transactions are verified by using cryptography technology. Blockchain technology keeps the records of public distributed ledger. Bitcoins are created as a rewardfor the public who are interested to earn it known as ‘mining’.This currency can be converted into other currencies, services and products. Lately, Bitcoin has been emerging as the well-known digital currency and getting popularity all over the world for quick transition. Moreover, this cryptocurrency will be a potential financial asset for investors because of its profitable returns. The researchers perceived that there is a significant impact of Bitcoin upon traditional transaction system which influenced us to conduct this study. The purpose of this research is to remark the ways how Bitcoin challenges the traditional transaction systemand to assess the future planning structure for traditional financial institutions to compete with digital currency. Bitcoin is the profitable platform for the miners and the investors, but little bit threat for the traditional bankers and the governments. Therefore, the attitudes and ideas of people (related with Bitcoin dealings) from different background have been assessed and analyzed for this research. The authors conducted questionnaires among the people who are acquainted with both Bitcoin and traditional transaction system and tried to find out solution of research question. We used a qualitative research methodology where we conducted semi-structured interviews. The data has been analyzed based upon the interviewees’ perspective. While preparing this research paper the authors examined the previous research in this field. In addition, there are lots of scope for further research regarding Bitcoin issue, as well as the opportunities and threats for the other financial institutions. The researchers explained the suggestions for further research which might be the guidelines for the traditional financial institutions. We faced some limitations and problems from different aspects to accomplish this research paper. The researchers came to the conclusion that Bitcoin is a challengeable instrument for the traditional transaction system. However, this cryptocurrency has some unavoidable risk and the questionable image which often used to support criminal activities. As because there is no governing authority, clearing house or central bank's involvement; thus, it bears uncertainty for the Bitcoin stockholders. In this study, we have been able to deepen the knowledge and found the solution how Bitcoin affects the traditional transaction system.