Bitcoin Was A Hoax?

Decent Essays

In December 2013, after a series of governments’ legislation was passed, the price of Bitcoin crashed. While many hoped for a revival, the prices continued to plummet until they reached low of $200. In one short year, the price had fallen to one-sixth of its previous high (“Complete Bitcoin’s Price Chart”). This fall proved what many thought; Bitcoin was a hoax.
One of the greatest downfalls of cryptocurrency is due to its lack of governing power. It is important to note that this creates inherent weaknesses in the currency as well as governmental concerns. Both of which could prove to be detrimental to cryptocurrencies.
According to renowned PhDs in Economics, Hendricson, Hogan, and Luther, there are many issues with the regulatory nature …show more content…

An example of the lack of safety can be found in Bitcoin’s recent history. Student of law Misha Tsukerman M.J. relates that “Mt. Gox, founded in 2009 … became the dominant online marketplace for the purchase and sale of Bitcoins, handling 80 percent of all Bitcoin trading activity in 2013. On February 25, 2014, Mt. Gox failed after hackers stole approximately 850,000 Bitcoins” (1150). In this event, hackers managed to steal approximately 480 million dollars (Takashi Mochizuki and Eleanor Warnock). Mt. Gox’s failure shook the confidence of Bitcoin users. Due to the previously mentioned weaknesses, the stolen Bitcoins could not be retrieved.

Furthermore, due to the lack of regulations, Bitcoin can easily be used for illegal means. Technical writer Andy Extance claims that “because users are allowed to mask their identity with pseudonyms, the currency is perfect for screening criminal activity” (22). German philosopher, Claus Dierksmeier, further expounds, stating, “On websites specifically designed to escape public scrutiny, cryptocurrencies are being used to buy and sell illegal drugs, weapons, and sex. Unquestionably, the anonymity afforded by some altcoins affords criminals advantages compared to either trading in physical spaces or to using privately or publically owned exchange media within the virtual space of the Internet, opening the door to many forms of fraud and theft…” (6-7). Due to blockchain technology, the only identities of

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