The Ethics of Bitcoin

By Haoqian Chen

Bitcoin is quite a phenomenon. This power point video gives a short history of the virtual currency. Some argue Bitcoin is evil. Is it? The video analyzes the ethics of the product and its uses.

As of today, according to Realtime, there are currently 15 million Bitcoins in circulation. At an exchange rate of US$431 to one virtual coin the amount in circulation is worth about US$6.5 trillion.

Bitcoin took off in late 2013 and hit a high of roughly US$1100 but the price has trended down although there seems to be some resurgent interest lately. Several reasons are cited for this renewed buying interest in the currency. First, established financial companies are focusing on the currency because of its blockchain technology which Morgan Stanley, Goldman Sachs and JPMorgan believe may improve the trading of securities, derivatives and loans. (However, if banks can figure out blockchain technology for traditional currency transactions, uses for the virtual currency are much reduced.) Second, there is some speculation wealthy Chinese are using the cryptocurrency to move money out of the country as the economy of China deteriorates.

Third, the EU Court recently ruled that exchanging virtual currencies should be exempt from value added tax. This puts Bitcoin at the same position as traditional cash and levels the playing field so the currency may eventually become a store of value. Supporters hope the latter comes true because the currency will attain major legitimacy if people start using it to buy things instead of holding the money for speculative purposes.