{"id":50347,"date":"2014-02-12T08:55:53","date_gmt":"2014-02-12T13:55:53","guid":{"rendered":"http:\/\/www.ict-pulse.com\/?p=50347"},"modified":"2014-02-12T08:55:53","modified_gmt":"2014-02-12T13:55:53","slug":"excitement-bitcoins-beginning-fade","status":"publish","type":"post","link":"https:\/\/ict-pulse.com\/2014\/02\/excitement-bitcoins-beginning-fade\/","title":{"rendered":"Is the excitement around Bitcoins beginning to fade?"},"content":{"rendered":"

Over the past several weeks, there have been series of negative reports associated with Bitcoins – high profile arrests and platform shut downs. Could the excitement around Bitcoins be fading?<\/em><\/p>\n

\"Bitcoin,In April 2013, we published an article on the Bitcoin, which at the time was being touted as another option through which conduct electronic transactions. We even posed the question of whether it could solve the electronic payment challenge in the Caribbean<\/a>.<\/p>\n

At the time of our April article, Cyrus was experiencing its financial meltdown, and Bitcoins were being traded at over USD\u00a0250.00 per Bitcoin. Additionally, the currency was beginning to gain mainstream popularity, as more merchants and other organisations were beginning to accept Bitcoins as a form of payment.<\/p>\n

Although the value of a Bitcoin reached as high as USD 1,000.00, it has been fluctuating wildly and has experienced a number of challenges, a few of which are outlined below, that arguably, might be signalling of its imminent demise.<\/p>\n

Use for criminal activity<\/h3>\n

As currency that is created and traded outside formal financial systems, Bitcoins have been a welcomed medium by criminal elements for their illegal activities \u2013 such as the payment of goods and services and money laundering \u2013 as transactions using that currency can be difficult to trace. This association with criminal activity has hindered the appeal and acceptance of Bitcoins. More importantly, law enforcement appear to be becoming more aggressive on cracking down on these illicit activities<\/p>\n

Bitcoin theft and illegal generation<\/h3>\n

As an electronic currency that is created and traded online, Bitcoins are also attracting thieves and other persons that are trying to generate them illegally. Bitcoin thefts occur most often during payment processing, at exchanges or from online wallets when the private keys to unlock those wallets are stolen.<\/p>\n

In a completely difference vein, Bitcoins can also be susceptible to fraudulent activities, such as illegal minting of the currency. Recently in Germany, two persons were accused of illegally generating nearly $1 million worth of Bitcoins, whilst online video game company, E-Sports Entertainment, was accused of infecting over 14,000 of customers’ computers to order to illegally mint Bitcoins (Source: CNET<\/a>).<\/p>\n

Law enforcement is getting more savvy<\/h3>\n

Due to the perception of anonymity associated with Bitcoin transactions, they may be an attractive option to facilitate a broad range of illicit activities as outlined above. However, a recent study, by the University of California at San Diego and George Mason University, found that it is possible to de-anonymise the transactions and eventually trace them back to individuals (Source: PC World<\/a>).<\/p>\n

Additionally, in some jurisdictions, Bitcoins have either been recognized as a currency for which standard financial rules apply, such as Canada, Australia and Finland, or separate regulator rules have been established, such as in the United States (Source: Wikipedia<\/a>). Hence additional channels and resources are becoming increasingly available to law enforcement official through which track Bitcoin dealings.<\/p>\n

Unchecked price volatility<\/h3>\n

Since their creation in 2009, the value of the Bitcoins has swung dramatically over the past five years, from as low as USD\u00a00.02 to well over USD\u00a01,000.00. The currency is still experiencing considerable price volatility, which according to economists and other financial experts affects its long term value and potentially its viability as a currency (Source: Wikipedia<\/a>).<\/p>\n

Is there still Bitcoin-euphoria?<\/h3>\n

In summary, Bitcoins might still be popular and is gaining interest in different quarters, especially from current and potential investors. However, its association with illegal activity, along with the high profile arrests of key players and shut down of various Bitcoin exchanges, payment processors, and online platforms, such as Silk Road, have no doubt tarnished the currency.<\/p>\n

Having said this, it could be argued that the current efforts of regulators and law enforcement to \u201cclean up\u201d this Bitcoin environment will lead to a more robust and safer currency in the long run. It is not yet clear whether the Bitcoin, as currently designed, known and transacted, will remain unchanged into the foreseeable future. However, the experiences and learning through its existence and use will, without question, improve the quality and reliability of other digital currencies that might eventually be created.<\/p>\n

\u00a0<\/em><\/p>\n

Image credit:\u00a0 antanacoins<\/a> (flickr)<\/em><\/p>\n

___________<\/p>\n","protected":false},"excerpt":{"rendered":"

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