Taking a Look at Virtual Currencies

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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. Bitcoin is essentially an electronic cash currency and is perceived as a great success since its launch in 2009. Most e-cash schemes require a centralized bank, which acts as a safeguard for potential scams or for double spending detection. (Simon Barber et al. 2012 p 401), In contrast, the bitcoin protocol allows individuals to freely send bitcoins without any third party interference. The fee for sending bitcoins is very little in comparison to other online payment methods such as PayPal thus bitcoin is considered to be cost efficient. (Grinberg, R. 2012 p 160). Bitcoin is considered ethical because it is unique to the characteristics of credit cards. Banks have attempted to remove the issue of fraud and find mechanisms to stop hackers and phishers from obtaining personal data. This is because traditional transactions require the transmission confidential data, making data vulnerable to interception by hackers (Simon Barber et al. 2012 p 402). In regards to bitcoin, only a bundle of characters

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