Written December, 2013
Bitcoins are currently the most popular form of virtual currency. According to its website, Bitcoin is a low-cost way for people to exchange money online, without the interference of banks or any centralized authority. Bitcoins are produced online and can be purchased by anyone. Online business can accept bitcoins as payment or the coins can be converted into dollars, euros, or other currencies. The value of your bitcoin(s) is stored in a heavily encrypted online wallet, from which you can send and receive the currency. However, at the moment, bitcoin is still considered a high-risk investment as the price/value of the coins is not regulated and can fluctuate wildly over short periods of time. While the makers of Bitcoin see it as a revolution of the global economy, there are dozens of ethical and policy issues surrounding this new currency, including: how to tax it, money laundering, the purchase of illegal goods, and hacking into bitcoin wallets. The anonymous nature of bitcoin activity makes transactions very difficult to track.
Bitcoin is not the only virtual currency out there. There is Litecoin (which promises faster transaction times),Primecoin (which “introduces the first scientific computing proof-of-work to cryptocurrency technology”), andPeercoin (which uses a “proof-of-stake/proof-of-work hybrid system for coin generation”), among others.
So what’s the future of a currency that has no worth other than what others are willing to pay for it? Will Bitcoin lead a revolution in currency, or go the way of the Zimbabwean dollar?
Resources:
What is cryptocurrency/How does it work?
Is Bitcoin A Safe Bet? A Quick Guide To Cryptocurrency(Forbes)
Bitcoin, Litecoin, Dogecoin: A Guide to Crypto-Currency Mining (International Business Times)
How Bitcoin and Cryptocurrencies Work (Sydney Morning Herald)
The Economist Explains: How Does Bitcoin Work? (The Economist)
Cryptocurrency (MIT Technology Review)
Is It Time to Invest in Bitcoin? (The Wall Street Journal)
Virtual Currency Gains Ground in Actual World (NYT)
Still Don’t Get Bitcoin? This New Documentary Is for You (Venture Beat)
Bubble or No, This Virtual Currency Is a Lot of Coin in Any Realm (NYT)
Legal and ethical issues
Bitcoin’s Dilemma: Go Mainstream, or Stay Radical? (The Conversation)
The Military Thinks Bitcoin Could Pose a Threat to National Security (Washington Post)
Washing Virtual Money (The Economist)
Feds to Auction $17.4 Million in Bitcoin From Silk Road (CNN Money)
Bitcoin Raises Law Enforcement Concerns (CNN)
Two Bitcoin Exchangers Plead to Charges Tied to Silk Road (Bloomberg)
Of Bitcoins and Ethical Banking (Huffington Post)
Newsweek, Bitcoin and the Ethics of ‘Doxxing’ (Al Jazeera)
The Mysterious World of Bitcoin: Does It Have Staying Power? (Wharton School of Business)
Doctor, a Bitcoin For Your Two Cents? (Bioethics.net)
Some Considerations About Bitcoin For Lawyers (Technethics)
Regulations
Bitcoin Foundation Seeks More Time to Address Virtual Currency Rules(NYT)
New York Regulators Propose Regulations for Bitcoin, Other Virtual Currencies (Fox News)
IRS: Bitcoins Are Property, Not Currency (Washington Post)
Bitcoin Players Knock on Washington Doors (CNN Money)
Bitcoin is Barely Regulated — And These Congressmen Want to Keep It That Way (Washington Post)
Latest news (Updated October 6, 2014)
Bitcoin’s Price Plummeted Over the Weekend (Time Magazine)
Bitcoin May Be Banned by Russia Government in 2015 (Paste Magazine)
Russia Seeks Fines for Using Virtual Money Like Bitcoins (Bloomberg)