You may have heard about the recent controversies on Bitcoin, the most demanding cryptocurrency that is trending in the market.
It is a matter of controversies on Bitcoin because people and government are not able to decide whether it is a store of value, an asset class, a type of currency, or a payment network. It is concluded that bitcoin is actually software. It is a digital phenomenon that has a proper set of processes and protocols.
Thousands of attempts have been made to create a virtual currency, and out of all currencies, bitcoin is considered the most successful currency. It is a currency that has appropriately used cryptography and by breaking and making codes.
There are many controversies on Bitcoin, but the bitcoin network has tried to overcome all. To trade in bitcoin, you can visit techartes.com.
Here in this article, we will understand the different controversies on Bitcoin that are made.
Opposition to decentralization
By making regular changes in fiscal and monetary policies, the government keeps on manipulating the economy worldwide. The government and central bank keeps on printing money when needed and circulate them as required. Sometimes the mismanagement of finances leads to a recession period. The introduction of bitcoin has taken over the power from the hands of central authority. As it doesn’t include the government, it is disliked by financial institutions and governments.
Bitcoin is not considered a significant threat to fiat currencies, but bitcoin is gaining huge popularity, and the government is noticing that bitcoin is overtaking fiat currencies. Because of this, some countries have banned bitcoin, and the government doesn’t want people to invest or trade in it.
Dark web and silk road
Because the bitcoin network involves no government and is completely anonymous, the use of bitcoin is increased in an unlikely community, i.e., illegal trade of drugs and weapons. Silk road is the online marketplace that allows users to trade in buying and selling drugs. The people who deal in drugs are making transactions without fear of government.
Undoubtedly the bitcoin has entered into the mainstream, and many businesses and companies have started accepting it, but still, it is more widely used on the dark web by drug dealers. Earlier, people used to make bitcoin transactions to buy legal goods and services, but after 2013, the illegal trade has been increased.
Contentious legal status
The most confusing question that is asked to the government is that is bitcoin a digital asset or a virtual currency, or a commodity? People ask the government whether it is to be taxed as a commodity or should be used as a virtual currency? There are some countries that treat bitcoin as a commodity, and there are taxation purposes as well. In some countries, it is treated as a virtual currency, and also there are some countries that don’t even consider bitcoin as a commodity/currency, and its legal status isn’t declared.
Some governments have implemented tax laws on bitcoin, but there are still doubts about the enforcement of the tax laws. This can only be solved if bitcoin is made compulsory, and also the identity of anonymous traders must be unmasked by knowing their sensitive personal information.
Mt Gox Outages and hacks
Since the invention of bitcoin, Mt Gox was considered the most successful and leading bitcoin exchange, but it was forcibly shut in 2014 because of various hacks and losses that occurred in bitcoin exchange. In 2013, the second bitcoin exchange that was shut down was Trade Hill. The hackers attacked the exchange, and this has dropped the confidence of plenty of investors.
Despite hacks and losses, for the first time in February 2014, the Mt Gox exchange got hacked, and over 859 thousand bitcoins were theft. Mt Gox somehow managed to retrieve some coins, but after some time, he filed a bankruptcy case, and this dragged the confidence of investors. After the biggest loss and shutdown of the bitcoin exchange, people thought I wouldn’t last long, but still, bitcoin made a remarkable comeback and has become the best alternate of fiat currencies. The advocates of bitcoin say that exchange hacks are not related to security issues of the bitcoin network.