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| A bull trap or quick money making machine? |
Created
in 2009, Bitcoin is a
decentralized digital currency that is generated, traded and stored with the
use of a ledger known as blockchain. With prices rising from a
mere $329 in 2015 to over $19,000 in 2017, Bitcoin provided investors with a
colossal 2800% return on an annual basis. So, it’s not surprising that the question on
everyone’s mind is, “How do I get in on the Bitcoin bull?”
Nonetheless, it’s not clear whether people actually understand the complexities behind digital
currencies and blockchain technology. Why do prices vary? Who controls the Bitcoin network? Does Bitcoin actually have intrinsic value? Though these are all very
relevant questions, a key concern we tend to overlook is the ethical standpoint
of such a platform.
Bitcoin was intended to render
the use of a bank as it offers
the promise of lower transaction fees compared to traditional online payment
mechanisms and is operated by a decentralized authority, unlike
government-issued currencies. However, the foundation of Bitcoin creates a
scenario where a handful of anonymous individuals own roughly 95% of Bitcoin
software and make key decisions determining price movements,
supply and underlying software.
Furthermore, Bitcoin’s
privacy attracts criminals, gray market participants and dark web marketplaces
like Silk Road, exposing users to fraud, theft and loses. The WannaCry
Ransomware Attack in 2017 targeted computers by encrypting data and demanding
ransom payments in the Bitcoin cryptocurrency, stealing over billions
of dollars and disappearing without a trace. Furthermore, the Washington Post
published articles stating that Bitcoin is helping finance terrorism while supporting criminal activities like human-trafficking and
money-laundering.
Moor’s
Law mentions, “As technological revolutions increase their social impact,
ethical problems increase.” Bitcoin was born from the 2008 Global
Financial Crises as an instrument intended to replace the skepticism
surrounding large financial institutions. In its roots, Bitcoin is merely a
peer-to-peer version of electronic cash allowing online payments from one party
to another, thereby eliminating the bank as a middle party. However, as
Bitcoin’s prices rose, it has become another profit-making investment vehicle
for the financial system it was meant to overthrow.
The irony is that Bitcoin is
not supposed to be controlled by any regulatory body but then who determines
what’s right and wrong?
By Ananya Sharma
I absolutely agree with the fact that no one is focusing on the ethics aspect of bitcoin and focusing too much on how bitcoin's value is so volatile and profitable. I feel it would be helpful to tone down the technical language of bitcoin and explain it in simpler terms if possible. Also, I can see how the quote that you have mentioned is relevant but I would like to see more of a relation between your post and the article.
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ReplyDeleteI definitely think there should be some sort of regulation on the trade of bitcoin after reading this. Maybe after you explain "a handful of anonymous individuals own roughly 95% of Bitcoin" you could mention what percent regular currency is held by financial institutions and the wealthiest of the world for comparison.
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