The New Wild West: Bitcoin
Bitcoin’s future is uncertain, but one thing is for sure: it’s the wild west out there, and there is no sheriff in town.
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Train robberies, bank heists, and gangs on horseback plagued the Wild West. If we think of the Internet as the new frontier, these same things are happening online, but instead of cash and gold, Bitcoin is the loot. Bitcoin is a digital cryptocurrency that was created in 2009. Bitcoin has no central authority and no federal oversight. While the Bitcoin network may prove to be an important innovation in the future, fraud and theft have hurt its reputation.
One of the first Bitcoin exchanges, Mt. Gox, went online in July 2010 and quickly got into trouble. An incident in 2011 involved hackers accessing Mt. Gox systems and executing a trade that equaled the equivalent of nearly $9 million in Bitcoin. Ongoing fraudulent activity led to the shutdown of Mt. Gox in February 2014, revealing they had lost nearly 750,000 Bitcoins over the previous 4 years.
In addition to the Mt. Gox debacle, in just 18 months, the Federal Trade Commission received over 300 complaints against Bitcoin mining rig manufacturer Butterfly Labs. Customers claimed that they never received their merchandise nor were they able to obtain a refund.
Clearly, dealing in Bitcoin is a risky business. Bitcoin’s future remains uncertain, but one thing is for sure. Right now, it’s the Wild West out there, and there is no sheriff in town.