English Homework

Names:

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.

References

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.