Disadvantages Of Bit Coins

1488 Words 6 Pages
Money laundering, tax evasion, and other illegal financial activities trace back to the bit-coins. These circumstances have damaged both the market system and business. Bit-coins are a kind of cyber money; many people would consider cyber money is always useful and not harmful since we sometimes purchase products via Amazon or Apple’s gift cards. However, there is the most important factor differentiating the bit-coins and cyber money; government regulation, it determines a limitation of using on website. Authorities restrict the bit-coins because it don’t have any owners; peer-to-peer system and all different people’ data anonymity make government hard to arrest criminals. Therefore, many people have abused it and the bit-coins literally …show more content…
During conversation, House Committee shows two aspects of the bit-coins: strong advantages and disadvantages. Strong advantages of the bit-coins are following; the bit-coins have lower commission and lower implementation costs for business owners compare to credit or debit cards. This is a tremendous merit for founders of firms since most considered factor for business is profit. Not only the financial part, there are some advantages of bit-coins. Since they are web-based and transaction occurs without intermediaries like bank, trades are simple and quick that both the firms and individuals would satisfy. However, House of Representatives concern about disadvantages of the bit-coins, which are potential dangerousness cyber currency. They claim that wealthy business owners have done money laundering with the bit-coins that only 10% of the bit-coins are available to trade and other 90% of them are hoarded. In addition, the value of the bit-coins is unpredictable and variable compare to the U.S. dollars; the riskiness of the bit-coins is approximately fifteen times riskier than the official currency. House of Representatives propose a solution by emphasizing that the current regulations of the bit-coins are uncertain, including the U.S. laws. It doesn’t include the articles of regulations of bit-coins’ illegal financial activities and specific punishments for criminals who did money laundering or tax evasion with the bit-coins; actually, references of money laundering and tax evasion with the real currency, U.S. dollars, only exist in the current laws. In addition, House Committee proposes adding another clause of bit-coins for business owners who use the bit-coins as trading currency (House Committee on Small Business, 2014). Many people will argue with this solution by saying just adding few clauses related to bit-coins doesn’t solve the original problem and

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