Xii) Virtual Currency, Eg Bitcoins

(decentralised virtual currency championed as a faster, cheaper alternative to existing payment systems)

- it is not backed by any central bank

- one of the key issues is security as hackers have been able to steal around half $1 billion of virtual coins

- can be used to bypass detection by government authorities like eg proceeds of crime; preferred way to pay for drugs on illegal websites like Silk Road

- becoming more acceptable like Dell began accepting bitcoin payments; bitcoin ATMs at Westfield shopping centres, etc

- volatile value, ie from US$ 617 to 1000+ per unit; collapse in Feb 2014 of Mt Gox (the world's biggest bitcoin exchange)

 

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