Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell

Exercise 22

Unregulated Bitcoin Industry Has Regulators Worried
Bitcoin is a digital currency that can be used to make purchases without the use of cash, credit, or debit cards. Bitcoins are not backed by the government, not circulated by banks or other intermediaries, and not currently taxed. Bitcoin transactions are public, but users often use pseudonyms that are difficult to track to the real person. The increasing use of Bitcoin has generated ethical concerns, especially because it is an unregulated industry. This can lead to issues such as the ability to purchase illegal substances and firearms as well as being susceptible to fraud and theft. Users place their trust in other users when making purchases via Bitcoin, which increases the risk of using it. Additionally, because it is not backed by anything of credibility, its value is much more volatile.
While the use of Bitcoin is generally online, there are some brick-and-mortar locations that have set up a system to receive payments with Bitcoin. Authorities are investigating ways to regulate digital currencies to guard against money laundering and to protect investors and consumers who use it. Interestingly, Bitcoin sparked enough interest in investors to be traded on Mt Gox, a Tokyo-based exchange. However, Bitcoin was dealt a blow after Mt Gox lost 850,000 Bitcoins to a hacking attack (although it says it recovered 200,000), resulting in bankruptcy for the firm and numerous lawsuits. The threat of hacking is obviously an underappreciated risk for Bitcoin as a digital currency. Also, regulators worry that without boundaries, the nascent digital currency industry may lose viability. 11
What are some of the ethical concerns involved with Bitcoin?