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
Click here to unlock this and over one million essaysGet Access
Cryptocurrency is a digital asset that serves as a medium of exchange with no central authority and was created to prevent the issue of double spending. This problem is solved with the use of blockchains where miners confirm transactions on a public ledger. As of today, there are over 1,000 different types of cryptocurrencies, and at least 600 of these have listed market caps of over $100,000. Bitcoin, Ethereum and Litecoin are top cryptocurrencies trading today with their combined market cap topping $331B. Bitcoin, created in 2009, is the biggest cryptocurrency and has recently reached a net value of over $270 billion, with much of its growth being in the last few months. This has led to much
The policy of cryptocurrencies tends to be different across the world where the government can support or resist the implementation of cryptocurrencies (DeVries, 2016). For instance, the US government is likely to support cryptocurrencies by allowing those digital currencies to be used as local currencies (Hillard Heintze, 2014). In the UK, however, the government opposes by withdraw research grants in Bitcoin because of the stockpiling bitcoin (Chan et al., 2017). Although China is considered as the best place to mine bitcoin because of its cost efficiency, in 2013,
Cryptocurrencies are encrypted currencies that are universal, meaning that no matter where in the world you are, you can use bitcoin if the store allows it. Cryptocurrencies prices do change depending on which countries you are but not by much. All Cryptocurrencies also act as a stock where the price of a currency fluctuates. Normally all currencies start low and raise in price over time. At one point, Bitcoin used to cost $0.08. If you were to buy $100 worth of bitcoin at this time, you would have made $17,123,687. Everything does come with its risks though. People that invest in bitcoin now could lose millions of dollars if it were to crash.
We take the position that digital currencies are a fad. As argument, we try to clarify the definition of currency in general and explain what a "digital currency" really mean. Than we examine the arguments for the digital currencies and at the end we present the evidences of perils of digital currency.
The result of the California Legislature’s ongoing debate over AB-1326, a bill that would alter the state’s regulation of Bitcoin and other virtual currencies, could prove crucial to the future course of virtual currency regulatory legislation in other states, stakeholders told us in interviews. That debate is also splitting erstwhile allies in opposing virtual currency regulation. Several established virtual currency entities -- including Coinbase and Coin Center -- are publicly backing AB-1326, while the Electronic Frontier Foundation (EFF) and others are continuing to criticize it.
Since Bitcoin 's arrival online in 2009 cryptocurrencies have become immensely popular throughout the world. This paper will examine how the various cryptocurrencies come into being and how their creators utilize them for their businesses. With Bitcoin 's meteroric rise at the beginning of 2013 a large number of competing currencies have been developed with some targeting specific niches to dominate while others have been formed to simply imitate Bitcoin. The most ambitious cryptocurrencies have aimed to not only imitate Bitcoin 's success but to completely displace its status as the gold standard of the cryptocurrency world. These various cryptocurrencies will be examined and their creation and function will be discussed in this essay.
The bitcoin is a semi-recent advancement in economic technology, originally a program created by an anonymous internet user, which succeeds in bringing about a decentralized and private currency, unaffiliated with any government. Usually, currencies are units of exchange produced by a government for use in a local or even global economy. The availability of the currency is decided manually by the government, which may limit production to keep the value of the currency from changing on the global market. Bitcoin is a so called cryptocurrency, which relies on its own program to decide production, and gains value from the time being invested in its existence. For this
The crisis had exposed many of the shortcomings in the existing financial and political systems, creating a large desire for alternatives (Popper IV). Many saw Bitcoin as the answer as it was free of any sort of central government.
Virtual currencies such as bitcoin are portrayed as an innovative design in the distribution of money throughout the world through the use of peer-to-peer transactions due to it being fraudulent and impossible to counterfeit. However, bitcoin holders are anonymous and could act in a similar way to black markets, their “bitwallet” is unregulated and untaxed. Using bitcoin as a currency also delves into the problem where users purchase illegal objects and substances anonymously.
Nowadays, the Internet has implemented great impacts on people’s life, and it also has changed the business world significantly. In order for companies to cope up with the changing customer demands, they must adopt new technologies not only to support their business functions but also to reduce paper works, reduce costs, and provide better services. Bitcoin is a currency of the Internet, distributed, worldwide, decentralized digital money that be developed as a new payment method. In Australia, the regulator has defined Bitcoin as property instead of currency for accounting purposes (King, 2015 February). Although Bitcoins are not materially existed, it can be exchanged for goods and services at places that accept it, the same way you would give someone a dollar for a cookie.
Antifragile as the coding used is public, meaning the public can find and fix bugs and and the more people try to attack the system, the more it is protected by those invested in it with the mathematical knowledge to solve to the hacking attempts.
Unlike fiat money, it cannot be artificially inflated because the Bitcoin code is written in such a way that it halves every four years on a set schedule until 2140, guaranteeing that a set amount of Bitcoins, 21 million, will ever be harvested. The genius of Bitcoin lies in its programming with open source code on a public ledger where every transaction is simultaneously anonymous and public. This anonymity creates an untraceable transaction while at the same time allowing users to vet the system and verify transactions. By doing this it avoids the problem of “double spending” and counterfeiting which has inspired trust in its users.
It’s a good thing that regulations guiding bitcoin usage are rising. Governments and financial institutions are working on a formula to regulate the use of cryptocurrencies. This means that governments are slowly waking up to the reality of bitcoins. Governments are working on laws to ensure that gains made from cryptocurrencies are being taxed. The presence of regulations mean that bitcoins will gain worldwide acceptance because of the enhanced trust by the users. Regulations will ensure that the interests of investors are taken care of. Regulation aims to offer basic protection. This eradicates
The market of cryptocurrency is expanding on a daily basis. Every now and then New crypto coins are being introduced to the market. The folk of crypto coins is becoming even dense as all are emerging with unique features to maintain their pace in the ongoing competition.