The online currency of Bitcoin is receiving lots of attention this month, but not the good kind. News has spread quickly about the halt on withdrawing Bitcoins from the exchange, imposed by the currency’s Tokyo-based processor, Mt. Gox, due to a “technical malfunction”. As a result of this, the value of Bitcoin dropped by 8 percent on February 7th.
Only the previous day, Russia had made the decision to class Bitcoin and other virtual currencies as being illegal. Plus, not long before, in late January, it was reported that New York State plans to regulate Bitcoin after the arrest of two individuals in the state, who had used the electronic currency to purchase illicit drugs. In mid-January, the attorney general’s office in the southern district of New York confessed that it had seized millions of dollars of the currency from the drug trafficking website, Silk Road. Authorities also had to confiscate the website owner’s very own personal stash of Bitcoin. It is reported that this stash added up to a staggering 144,000 Bitcoin units, which is worth about $130 million, and this figure does not include the $28 million worth of units that were seized from the website itself.
Clearly, the digital currency that has taken the world by storm is not being used in a good way at all. In fact, it is being abused. The currency is said to be highly resilient to whatever regulations are imposed on it, due to the school of thought that it is a mathematical value, rather than a monetary one. Tom Waters, Director of Sales at Bank Associates Merchant Services, says, “It is a mathematical solution to a logic problem. The driving force behind the growth of the Bitcoin ecosystem is not traced to any one person, corporation or political agenda.” He added, “If the innovators who build new technologies around this protocol are prohibitively regulated or policed, the economic progress surrounding Bitcoin development will simply shift to less regulated nations. Progress might be delayed, but it will be virtually impossible to stifle or kill altogether.” Quite clearly, even the most powerful might have trouble controlling the electronic currency.
The above evidence just proves the theories that Bitcoin, the digital currency that has changed everything, can bring only one word to mind: trouble. These characteristics of the currency attract criminals to use it as a money laundering instrument, and as a way to make purchases on illegal items. The more nations that make a stand against Bitcoin, the better.