Bitcoin and Its Controversies Essay

Bitcoin gets noted as a decentralized cryptocurrency. Its controversies are seen in the power of this currency. Most of the traders make use of the money to enhance their trading activities. Its performance in the market gets reflected in the financial and commoners. The paper, therefore, will analyse on the controversies which have dogged the bitcoin and more so how the currency has overcome it. Bitcoin is a high-value digital currency which is not backed by any government or central bank. The digital currency is already in use and can be used to trade goods and services with vendors who can accept Bitcoin as the medium of exchange. The currency is used mainly in peer-to-peer transactions (P2P). It provides a very promising medium of exchange which would impact the world in the future. While using bitcoin, one does not necessarily need to use the banks or other financial institutions since the transaction is carried out over an online platform. The value of bitcoin is very strong when subjected to the customary measures of quality. Bitcoin as a form of crypto-currency is very conveniently traded and does not require numerous terms and conditions as compared to the customary currencies.

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The topic of Bitcoin is privy for further research since it is not clear whether this type of digital currency could be applied in the future alongside the customarily known currencies of each country. This is because Bitcoin offers fascinating opportunities as the medium of financial exchange. The value of one Bitcoin, also known as a BTC equals to approximately $104. Moreover, the security of transactions using Bitcoin is excellent. The transactions using Bitcoin occur digitally through a digital exchange of heavily encrypted anonymous hash codes over peer to peer networks. The peer to peer networks is heavily guarded networks which offer maximum security to transactions involving Bitcoin that makes it very difficult for any possible hacking or tampering transactions by anybody. The digital Bitcoin currency is stored in the digital accounts called wallets; these wallets are online programs that ensure the security and safety of the bitcoin transactions taking place. To enhance proper safety and security, these digital wallets have automatic address codes generated for both the sender and the receiver during each Bitcoin to Bitcoin transaction and their private associate codes which are very confidential and only known by the specific users. The secret codes ensure that every user has his or her privacy well protected by the system and does not allow any unauthorized access to the accounts. As a result, the transactions taking place using bitcoin seems to be very well thought out, designed and planned in consideration of a wide variety of factors carefully to prevent any possible threats associated with the cyber crimes. Despite the fascinating features and promising value of Bitcoin, this type of digital currency has faced various controversies about its security and safety in carrying out financial transactions, investments, and savings. The bitcoin exchange program has faced multiple issues which threatened its security on the numerous occasions. These occasions are as follows.

In one of the occasions, a report by Nathaniel Popper on June 17, 2016 talks about the alleged hacking of the virtual currency experimental set up and stole at least $50 million which was part of the money acquired through crowdfunding aimed at test driving the security and safety of the digital currencies. According to the to the report, the hacking did not only take away almost a third of their contributions but also crushed their hopes of the future security and safety of their money in the digital Bitcoin accounts. The attack posed a significant threat to the online Decentralized Autonomous Organization project which by then, had accumulated $160 million from crowdfunding. The worth of money was in the form of ether, another alternative digital currency similar to Bitcoin. The Bitcoin has also encountered similar attacks in the past on several occasions from the time it was introduced into the market in the year 2009. In one incident, another great Bitcoin exchanger called Mt. Gox reportedly lost more than half a billion dollars worth of Bitcoin to the alleged hacking attack in 2014. The $50 million hacking attack was just among the many other attacks which have hit the crypto-currency project. This scandal happened because the hacker utilized the weakness in the system of money transfer and storage in the digital environment. Since this digital currency system is growing, it was possible for such like attacks to prosper because the security of the system had not yet stabilized enough to prevent the high-level hacking attempts. The hacking did not, however, overthrow the ether and Bitcoin from business since the computer scientists tightened the security loopholes of those parts in the system which showed significant weaknesses. The computer experts thereby assessed the system and fixed all the possible errors which could further enable the similar occurrences in the future. Even though this scandal blew a cold wind into the hearts of the prospective investors, any similar incidence is most likely unable to take place again. However, this casts a lot of doubts among many people wondering whether the digital currencies will succeed. As a result, significant debates have gone haywire as the general public try to understand the underlying principles and viability of digital currencies such as ether and Bitcoin. Putting into consideration that the hacker took advantage of the weakness in the decentralized autonomous organization system, this only pointed out to that weakness for the computer scientists to be able to seal it. As a remedy to the problem, the programmers recommended that the investors move their money to another project called the Congo Split to ensure the security of their contributions. The adoption of another more secure technology called blockchain is a very promising strategy which will most likely prevent any further hacking. According to the computer scientists, the blockchain technology is transparent and more robust that it would not be possible to hack. Following the various steps which have been taken against the ill-fated attacks, the Bitcoin currency has become more robust and safe over time from continued security and safety measures. Therefore, it would not be reasonable enough to think of such hacking succeeding in the future. All potholes have been successfully mended. The Bitcoin system will consequently, be stable, safe and secure.

Earlier on, a report by Raphael Satter and Yuriko Nagano explained the scandal which befell Mt. Gox Bitcoin exchanger in Tokyo, Japan. According to the report, Mt. Gox nearly became bankrupt after a severe hacking of its system's website which led to the loss of more than half a billion dollars worth of Bitcoin. Before the notice, the company's website had been going blank for a significant amount of time before displaying the next day, a notice showing its customers that all the transactions were closed temporarily for a system update to enhance proper security and safety of their customers. Moreover, the exchange had restricted any withdrawals in the previous month. According to the report, Mark Karpeles, the Mt. Gox Chief Executive Officer had reportedly resigned from the Bitcoin Foundation board. According to the reactions made by the Bitcoin supporters such as the BTC China, a chines based Bitcoin exchanger, and the Wallet Service Coinbase of San Francisco, the reported collapse of Mt Gox Bitcoin exchanger was merely out of mismanagement which they fiercely condemned. In their report, they claimed that the Tokyo, based Bitcoin exchanger had messed up with customers trust about the Bitcoin exchange, adding that such players were better weeded out of the industry. Since the Bitcoin exchange is independent of control by the government or the central bank of any country, there were little or no reactions made by the government concerning the matter. It was left all over to the exchange practitioners to decide what efficient and practical steps to take as a measure of the occurrence. Based on this report, it is more evidence that the Bitcoin business has been viral in the whole world due to its unlimited advantages of money transfer across the borders without involving the third party players such as banks, or any other formal financial institutions such as the insurance companies. Raphael Satter and Yuriko Nagano point out that the business has been thriving among various people such as the libertarians, technology enthusiasts, and investors who love adventure. Moreover, due to its ease of access and transactions, the Bitcoin system has been harbouring even the criminals who may likely use it to clean the money obtained by the illegal means. The scandal was caused by the existence of a weakness in the company system security which could not block the hacker from gaining access to the money system and luckily squander such large sums of money, as large as half a billion US dollars. Bitcoin tries as much as possible to shake off any alleged associations with criminality to gain trust with its customers and to ensure security and safety of the investments made by the clients across the globe. This is further strengthened by an arrest of the Bitcoin Foundation vice chairman Charlie Shrem on the alleged claims of money laundering. Following the steps carried out to weed out criminals and other forms of online crimes, the Bitcoin may likely gain its initially designed impetus and possibly stand out again in the market to continue serving the people who solely depend on this service for their financial transactions, investment,the or savings. Therefore, it is highly recommendable despite the various challenges which only serve to enhance the advancement of safety and security of the digital crypto-currency.

Conclusion

It is undoubtedly true that Bitcoin has faced many challenges since it was introduced into the market in the year 2009. The problems which arise from money laundering, hacking of the system, unacceptance by the governments and many other reasons. As a consequent of that, Bitcoin has been most likely susceptible to lose many of its clients all over the world, but this expectation has been disapproved by the current reports on the progress of Bitcoin business. Instead of the expected trajectory trend downwards, Bitcoin business has been making more positive results over the time. The number of its customers not only increase but also expand across continents and the various international boundaries where the people are well aware and understand how it operates. The following are the main reasons why Bitcoin has ever been surviving despite frequent attacks of its system. First, the introduction and adoption of blockchain technology bring a great promise of future safety and security which adds to its beauty. Hence, nobody may likely wish to quit the business. Secondly, the Bitcoin exchanges have shown great determination and commitment towards eradicating the criminal activities of the Bitcoin system by boosting its security and assurance of safety for the investments, savings, and monetary transactions across the international borders. In addition to that, the crypto-currency has very significant advantages over the customary currencies that makes people stick with Bitcoin no matter what challenges it undergoes. The most commonly known benefits of Bitcoin are that it allows people to make transactions such as depositing funds, savings, investments as well as the transfer of funds across the international borders without having to pass through the approval of banks or any other third party financial service providers such as the insurance companies. As a result of the free flow...