The FBI and the Treasury Department say they are concerned that the Islamic State (ISIS) and other terrorist groups might be using Bitcoin to move money around, prompting most Americans to think, “Wait, what was Bitcoin again?”
Bitcoin is a so-called “crypto-currency” that exists in digital form and is completely autonomous from the central banking system. Bitcoin exists in an extremely volatile market right now, with one Bitcoin being equal in value to about $15,000 US dollars.
The issue for governments is that Bitcoin transactions are fully encrypted and secret, unlike regular bank transactions involving dollars. No one can tell where a Bitcoin transfer originates or where it went after it has been transferred. That makes law enforcement nervous, because a person could purchase Bitcoins with illicit funds from gun running or drugs, transfer the money elsewhere and convert it back to dollars, effectively laundering the funds in secret.
On the flip side of the argument, Bitcoin exists in a completely regulation-free market. A lot of people have used it for completely legitimate, above-board purposes and they will be punished alongside all of the various terrorist and organized crime groups if governments step in and regulate it. (Let’s face it, government wants its cut of the action through taxation, which is what this really is all about.)
It’s a fascinating argument and concept, even if most of us can’t afford to purchase a single Bitcoin right now. Check out the following exchange on Fox News which does a very fair job of examining both sides of the Bitcoin argument.
