(12/18/2013) After Chinese government officially challenged the validity of Bitcoin, the value of Bitcoin continued to drop further. Today (12/18/2013),
the Bitcoin dropped 17% when "the People's Bank of China (PBoC) has ordered third-party payment providers to stop using the virtual currency." Without a trusted central financial institution (like US Federal government), the users of Bitcoin have to transact on a software follows Bitcoin Protocol. "
Users send payments by broadcasting digitally signed messages that transfer ownership of bitcoins, the unit of currency." I never have trust on Bitcoin, and even doubt its function to be used as a transaction currency. Look at the historical value of Bitcoin, if its value fluctuates so dramatically, how can it be used as a currency? Bitcoin itself has become a speculation commodity like gold or oil. When an influential player (like China) challenges its validity, it crashes. It eventually proves to be just a bubble.
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| Bitcoin historical price accessed on 12/18/2013 |
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| Bitcoin price on 12/18/2013. |
(3/5/2014) Not only Bitcoin's volatility is a concern, it's safety just damaging the currency's credibility even further. One week ago, the world's biggest bitcoin exchange,
Mt. Gox, filed bankruptcy as nearly half a billion dollars worth of bitcoins were stolen due to computer hacks. Today, another bitcoin exchange,
flexcoin.com, is shut down due to another hack and a loss of around $600 K worth of currency. The
Japanese government now considers a regulation "adding that banks and securities firms will not be able to handle bitcoin as part of their main business, suggesting the crypto-currency will be treated more as a commodity, like gold." It may means the day that bitcoin survives as a currency is soon to be over.
