While Bitcoin has been a mainstay in smaller internet circles for several years, its continued growth has forced banks and countries to reevaluate the changing role of currency around the world.
Bitcoin is known as a cryptocurrency, meaning, “A digital or virtual currency that uses cryptography…[its is] difficult to counterfeit because of this security feature…it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation,” according to Investopedia.
It draws users in for two other reasons: anonymity and easy access to the international market.
Bitcoin is also unique as people can acquire bitcoins for free through a process known as mining. This is when users solve complex math problems with a special software getting bitcoins in exchange.
These features are not always used for good. Many users take advantage of the anonymity and “spend [Bitcoins] on online black markets such as Silk Road. A 2012 study found that around 20 percent of all bitcoins exchanged on Mt.Gox (Bitcoin’s largest exchange) each day were spent on Silk Road.”
However, the complexity of Bitcoin is not easily explained to the public. News organizations seem to explain bitcoin in completely different ways: The Guardian characterizing it as “an intellectual test on a par with describing a collateralised debt obligation” while CNN Money says it is “new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.”
These various characterizations makes bitcoin something few can understand.
But Bitcoin’s complexities don’t exclude it from being constantly surrounded by controversy. In fact, a recent scandal has Bitcoin firing back.
JPMorgan Chase CEO Jamie Dimon has come out and said that bitcoin is “fraud”. He added that, “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
Bitcoin dug up some surprising information that they published through the active Bitcoin News page. The story found that, “JP Morgan has been caught red-handed purchasing a bunch of XBT shares, otherwise known as exchange-traded-notes.”
Additionally, executive Daniel Masters left JP Morgan Chase to join the Bitcoin team, adding more controversy.
Russia is facing many of the same internal battles as the United States as some officials are embracing the use of Bitcoin while some want to ban it altogether. Russian Finance Minister Anton Siluanov has recently said that the Russian government will have regulation in place by the end of 2017, and in the meantime have begun making arrests for illegal bitcoin use. These developments continue to be broadcast by Bitcoin News.
Many have come to the defense of Bitcoin as “the most transparent system of money ever invented…[where] every transaction that has ever taken place, no matter how big or small, is recorded on a database, known as the blockchain, which is shared on hundreds of computers around the world and visible to all.”
There are still many concerns news organizations such as CNN have about bitcoin: will the currency fail and lose value, how can it be regulated, and will the government find a way to tax it?
As the number of bitcoin users continues to grow, news organizations continue to report on Bitcoin’s controversies without really explaining the fundamentals of the cryptocurrency. As the payment method becomes more mainstream, Bitcoin may move from the fringe tech section of media outlets to the front page. Stories explaining Bitcoin and its implications may soon replace baseless predictions about its future.