Bitcoin was once thought to be a currency of the future. However, many college students who once invested in the cryptocurrency believe that it has no future outside of the black market.
Bitcoin is an untraceable, digital currency that operates outside of a central bank. It was not long ago that small businesses, like coffee shops, and large companies, like Dell, began to accept it, but the currency has been losing traction as mainstream.
To get bitcoin you must first get a bitcoin wallet, either by downloading software stored on the hard drive of your computer, or by using an online service. According to Coindesk, Coinbase is one of the most popular wallet and exchange services, and allows you to get a bitcoin wallet and buy bitcoin using PayPal or your credit card.
Although it wasn’t the first cryptocurrency, according to Engadget, it is the most popular and main currency on black market websites, such as the now defunct Silk Road. Silk Road was a black market website used to buy and sell illegal items, weapons and drugs. Many new similar websites have popped up since Silk Road was shut down. Site users pay in bitcoin because it is easier and more untraceable than any other method. However, there are some instances where bitcoin can be used in legal activities, such as the online gaming world.
According to Motherboard, some online gamers will sell in-game items for usable currency, using bitcoin because it is more difficult to scam than services like PayPal and requires lower service fees. Many tech startup companies will even include their bitcoin address, a web address that people can send bitcoin to, to accept donations.
Although bitcoin has been used primarily for the online black market, it is gaining traction in the real world and for non-illegal purchases online. Mills first year Hannah Musson has invested in bitcoin for specific online purchases, such as a concert ticket that was only available to purchase using bitcoin.
“I mostly used bitcoin because it felt really cool,” Musson said. “I felt like I was connected to the Internet.”
Because there is no infrastructure supporting bitcoin, many people believe that bitcoin has no future. Its most widespread use is for the purchase of illegal drugs, and Musson thinks that if that market goes away, so will bitcoin.
“I think its popularity will go down with the legalization of various drugs,” Musson said.
Without the backing of any national bank, bitcoin is precarious and its value fluctuates. According to CNN Money, since 2012, one bitcoin has gone from being around $1, to nearly $1,200 in 2014. One bitcoin is currently worth about $400. Because of these issues, Senior Director of Information Technology Services (ITS) at Mills, Bruce McCreary is skeptical of investing in bitcoin.
“Without backing, what happens if it goes under?” McCreary said. “If you sit on bitcoin you could get into some trouble, but I don’t think there’s anything wrong with buying it one day, then using it for a transaction the next.”
If bitcoin is stolen, there is nothing that can be done since the infrastructure doesn’t exist. There is no way to retrieve it or reverse the transaction like with PayPal or a credit card. Because there is no one to report fraud to, once bitcoin is stolen it is gone forever.
There are ways for illegal purchases through bitcoin to be traced, but it is still nearly impossible. One way to keep your bitcoin safe is to use web browsers like Tor, which conceal the user’s network location and usage from anyone conducting network surveillance. This keeps the user off the open Web and from connecting to networks that can access their information, allowing them to browse the Web anonymously.
Although bitcoin remains popular for the online purchase of illegal items, it is losing traction in the “real world,” as it is still almost exclusively used for online purchases. Musson believes that the future of bitcoin is bleak, especially when there are already established services to transfer money online.
“I don’t think bitcoin is going to go anywhere,” Musson said. “I think it’s too complicated of a process when you could just use something like PayPal.”