Online Currencies and Why They're Unreliable

Week #10

The Problems With Online Currency

Online currencies like Bitcoin and other cryptocurrencies are digital assets designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currecies, or specifically of digital currencies. 

1. The problem with digital currency is that it cannot be regulated as well as a fiat currency, or a currency made and enforced by the government. In other words, it is not legal tender, so buyers and sellers do not have to take this type of currency. 
2. The value of this type of currency is unpredictable. Currently, Bitcoin is equivalent to about $750 US dollars, but it tends to rise and fall randomly. 
3. Cryptocurrency is untraceable online, and has been used to buy illegal items and services.
4. It is only valuable because people on the internet say it is.

   

   Value of Bitcoin from 2013-2015