Bitcoin seems to be a new source of virtual wealth for some while others are left questioning the validity of the online currency. A bitcoin is a peer to peer currency created by a developer under the pseudo name of Satoshi Nakamoto. Bitcoins are not traded in banks or credit unions; it is strictly a virtual currency which functions like ordinary money. The online currency generated most of its attention due to the fact that it is free of any governmental interference and all merchandise can be purchased anonymously. Though this may seem enchanting, it may also be a grand risk to take as there is no protection or insurance in case of theft when dealing with bitcoins. The virtual currency is stored in a digital wallet either on the owner's computer or in a cloud system. Being a virtual commodity these digital wallets are at the risk of being hacked and the bitcoins you paid for will be lost without any compensation.
Though Bitcoin has received great reviews and has accumulated large numbers of supporters the online currency has been launched into to what seems to be a crisis. Mt. Gox one of the largest Bitcoin exchange companies has suddenly gone off market igniting worry over the virtual currency as some have lost thousands of bitcoins with the apparent collapse of the company. Mt. Gox is said to have lost over 744,000 bitcoins to theft over the past several years.
So what does this have to do with the rest of the bitcoins in circulation? The idea of Bitcoin transactions has only recently been being well received by the public and had started to see a growth in investors up to a week ago. This trouble with the Japanese based Bitcoin Exchange company has now instilled fear and doubt in the public and has caused several users to shy away from the use of Bitcoin as currency. If this trend continues there could be a significant crash in the bitcoin market. Places such as Russia have already deemed the usage of Bitcoins “potentially suspicious”. Apple has even pulled all Bitcoin apps from their Appstore due to the rising uncertainty of the exotic currency.
Ryan Galt a supporter of Bitcoin is also worried about the sudden Mt.Gox Bitcoin catastrophe. The Bitcoin blogger stated on his blog "This is catastrophic, and I am sorry to share this. I do believe that this one of the existential threats to bitcoin that many have feared and have personally sold all of my bitcoin holdings through Coinbase."
Though the Bitcoin market has suffered a hard blow some still have faith that the online currency will flourish, believing this is just the fall of a Bitcoin company that could not hold its own.
Marc Andreessen, a bitcoin investor defended Bitcoins on CNBC stating "Bitcoin protocol is unchanged and other Bitcoin exchanges and companies are doing fine." Andreessen is not the only supporter as they are many still holding on to the faith that the Bitcoin is not dead. Duke University professor Campbell Harvey also has faith in the Bitcoin market. The Duke University professor who specializes in global risk management and financial markets believes that though this catastrophe “has shaken confidence in all crytocurrencies" it is not "the end of the road"
Is this faith in Bitcoin cryptocurrency misplaced or is the collapse of the largest Bitcoin exchange company the fatal blow for the virtual currency? We will have to wait and see.