The Danger of Bitcoin

It came out of thin air, but it’s worth $1000 apiece. It was born out of the minds of a few researchers and has since blossomed into one of the world’s fastest growing currencies. This is Bitcoin, a “crypto-currency” born on the Internet, and growing rapidly. In fact, the number of Bitcoins in cicrulation has doubled in the past two years from six million to twelve million.  What makes Bitcoin unique is that it is unregulated and not backed by any tangible goods. While many view this lack of regulation as a good thing, in actuality it has spawned a number of problems. Most notably, Bitcoin’s lack of regulation is useful for criminals looking to launder money and commit other crimes.

Image by Isokivi.

Bitcoin and other internet currencies do not follow any laws. For a criminal, this means that once their money has been converted from a traditional currency like the Euro into a crypto-currency like Bitcoin, any transactions they make will have little or no record.

Moreover, digital currencies’ relative anonymity allows for the sale of illegal goods and services. In fact, through “The Hitman Network” it is possible to buy an assassination with Bitcoins. More prominent, however, is the sale of illicit drugs through Bitcoins, something which has caught the attention of world governments. In fact, during October, the FBI seized the website of “The Silk Road,” an online illicit drug marketplace that traded in Bitcoins.

In light of this, governments need to start paying more attention to Bitcoin. Clearly, it has become a legitimate currency and is being used to commit crime. Countries like the United States need to recognize it as such. Some more regulation is definitely needed and some of the anonymity needs to be taken out of internet currencies. Of course, this also somewhat defeats the point of Bitcoin, but in the name of fighting crime, it might just be a necessary evil.

Sources

One Comment

  1. Strange thing about Bitcoins and Litecoins is rich list of anonymous!
    *** LitecoinRichlist com ***

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