Exploratory Writing on bitcoin

Abstract

Searching the internet will simply tell one the intensity of the matter. So many companies have been affected not to mention the many individuals who have lost their cash and even the ability to conduct transactions. Illegal businesses have become very successful and although the country is fighting against illegal businesses, it is impossible to end it if the risks that are associated with digital currency is not handled with the intensity that it needs.

In so many cases, digital currency has been reported but there is no better solution that has been given to it. This is because the courts look at it as something that is not practical. In this ignorance, the issue is expanding and it is growing into a mountain from a simple ant- hill (BBVA, 13). For instance, illegal drugs is becoming a very recurring thing not only in the US but in all other companies that are using digital currency system. On the other hand, the rate of inflation is really going up and there is nothing that can be done. The fact that this is happening over the internet is making it look like it cannot be solved because the people dealing online are clever than the ones who are controlling (Brito & Castillo, 13). While it is very hard to make out how this can be practical, it is clear that the online users of digital currency are growing.

When transactions are done through certain coins like Monero, all records are deleted and cleaned so that it does not leave any trace. This is why so many people think that there is no way this problem can be solved. In fact, this is the simplest reason the courts and the criminal systems are not taking the matters seriously to handle them with the intensity that it requires. This is also what is makes the matter become deeper. The best word that can be used to describe this is that the issue is eating the online money industry.

As much as the criminals can be blamed for such acts, the authorities should also have their share of being blamed. This is because lack of regulation has helped advance the problem. Any crime that is not punished will grow and become more because it tends to look like it is being supported. Lack of regulation is one of the major contributing factor to the growth of this online crime. Regulation is simply used to mean that the authorities are not taking any measure in combating this kind of crime and thus, it is going up by numbers (Forbes, 13). Virtual money is getting lost and money is also devaluing at a very high rate. It is clear that sooner or later, this is the business that will dominate online, adding to fraud and online theft.

By targeting the law-abiding people, the authorities are in fact doing nothing but diverting the whole story of doing what is supposed to be done in combating these risks. At the moment, there is no practical solution to the problem and it will continue to affect the people both as individuals and as groups until the right step is taken. The authorities should be the ones to take the first action so that they open the ways to the criminal system to start dealing with these sorts of crime. There is a possibility that the crime can be combated and the only thing that is needed is accepting that digital currency has value and treating it as a criminal activity instead of acting as if nothing happened.

Significance of the problem

The problem addressed in the paper is the risks associated with digital currency. The problems created by digital currency include the increase in money laundering, loss of virtual money since the details can be deleted, and high inflation. The problems caused by the digital currently occur due to various reasons such as lack of effective regulations and the susceptibility of the digital currency to abuse by criminals. It has been difficult to address the problems caused by digital currency because criminal justice system does not effectively target digital criminals. Instead, it focuses on implementing more laws that target the law abiding individuals instead of criminals (Christopher, 2014).

This problem is worthy research because of the increase in the incidences of online money laundering. In addition, it has negative affected the financial system of the country because of the high inflation rate since the central bank has little control over the digital currency (Moore, 2013). In addition, theft of digital money has been reported many times. For instance, there have been several high-profile theft on Bitcoin Company. The exchange closure risk also worsens the issue. For instance, about 18 currency exchanges were closed leaving depositors stranded.

The problem is currently affecting a large population because with technological advancements, a large number of people is using the internet. The problem especially affects poor people in rural area because they cannot access the services of the traditional banks. In addition, poor people in rural areas are also using the digital currency because of their low cost charges (Chowdhury & Mendelson, 2013). The problem is worth solving because failure to address it on time, more people will be affected in future because of the high rate of usage of technology.

Research question and thesis

The risks of digital currency are increasing in the current arena and if they are not solved. The country will be threatened. There is a big need for the criminal system of the country to take up the issue seriously so that the issue will be taken as a criminal issue. In case they can treat it as a criminal offense, there is a possibility that they will be reduced.

Money laundering in specific is becoming very common and many people are getting away with it. The criminal systems needs to start looking deeper at the crimes related to digital currency and if any person is caught, he should face The same type of punishments to those who do it when Analog currency.

The proposed solution is simply the criminal justice to be firm and treat the issue as a crime. Accept that Digital currency has value and apply the same laws you do to regular currency. It is clear that the issue is taking deep roots and needs to be dealt with before crypto currency becomes wildly accepted.

Thesis: Digital currency is a rising challenge in the country and it should be treated with the same amount of response from the criminal system so that the issue could be fixed and the currency can grow to its potential.

Sources and research methods

This study proposal is founded on sources that we discovered via online library or internet sources. Among these sources is a review called “The Promise and Perils of Digital Currencies” written by Tyler Moore, he is among the most impressive scholars of the twentieth centenary. In this review, Tyler gives an amazing and educative analysis of why people of late are so into digital cash. His analysis gives a deeper understanding of the craze surrounding Bitcoin. He shows us the good side of digital cash such as low transaction charges and the fact that they safeguard against bitcoin. We also learn that the greatest threat behind this is exchange rate threat. This apprehension is significant to the proposed study. Another source that informed this study is “Cryptocurrencies and the Anonymous Nature of Transactions on the Internet” by Elizabeth Anne Casale. This article enlightens us that bitcoin is a currency that is not supported by any bureaucracy, utilizes cryptography for safety and is impossible to fake. It tells us how bitcoin has small state direction and raises concern for its task as a method of trade for offensive actions.

Regarding the theme of how bitcoin deals with offenders and somehow hard for law enforcement due to less regulative, we utilized an insightful review by Catherine Martin Christopher, titled, “Why Prosecuting Digital Currency Exchanges Won’t Stop Online Money Laundering”. In this review Catherine. captures the U.S. anti-money laundering acts and defines Bitcoin as cash laundering scheme and how it is hard for law enactment agents to deal with issue. She concludes her review by giving proposals on how to approach digital cash traders. Her analysis guided this study by giving insight on confrontations that both the law enactment officers and digital cash exchangers go through.

Additionally, Evan Hewitt in “Bringing Continuity to Cryptocurrency” enlightens us that since Bitcoin is currently extending in acceptance, it is probable that states on all levels to try and regulate the cryptocurrency to evade criminal deals and safeguard the user. Finally, Abdur Chowdhury and Barry K. Mendelson in “Virtual Currency and the Financial System” analytically clarify on Bitcoin by discussing its responsibility and probable future utilization and the threats connected to this kind of digital currency. The two writers sum up their work by giving proposals to deal with policy creators’ concerns while giving room for additional inventiveness in the Bitcoin network. This is a detailed journal that provides a deeper Comprehension of the issue on digital currency thus informing this study significantly.

Here, writers portray digital currency and more specifically bitcoins as a digital trade that is highly rising, though it is associated with a lot of risks, it still has a role to play in a country’s finance system. Looking forward, I intend to utilize certain reviews such as, but not limited to; “Tethered money: managing digital currency transactions,” (2015) written by Gideon Samid, “Bitcoin basics: buying, selling, creating and investing Bitcoins: the digital currency of the future,” (2014) by Benjamin Tideas and “Digital gold: bitcoin and the inside story of the misfits and millionaires trying to reinvent money,” (2016) by Nathaniel Popper.

References

Banco Bilbao Vizcaya Argentana (BBVA), “Bitcoin: A Chapter in Digital Currency Adoption,”

July 31, 2013.

Brito, Jerry and Andrea Castillo, “Bitcoin: A Primer for Policymakers,” Mercatus Center,

George Mason University, 2013.

Christopher, C. (2014). Whack a Mole : Why prosecuting digital currency exchanges wont stop online money laundering. Lewis & Clark Law Review. Vol 18: 1

Chowdhury, A. & Mendelson, B. (2013). Virtual Currency and the financial system: The case of Bitcom. Department of Economics.

Moore, T. (2013). The promise and perils of digital currencies. International Journal of Critical Infrastructure Protection. Vol 6: 147-149.

Elizabeth Anne Casale “Cryptocurrencies and the Anonymous Nature of Transactions on the internet” Oregon State 2015-06-01

Evan Hewitt, “Bringing Continuity to Cryptocurrency”

SEATTLE U. L. 2016

Gideon Samid , “Tethered money: managing digital currency transactions,”

Tethered Money 1st edition 13th July 2015