Before many people even know what it is, the internet currency corporation known as Bitcoin may disappear forever.
First introduced in 2009 by Satoshi Nakamoto, Bitcoin is the first implementation of “crypto-currency,” money that uses cryptography, the art of writing and solving codes, to control transactions. Bitcoin has since grown and gained an international usership. The way they are made, bitcoins can be used as any form of currency.
On Feb. 25, the bitcoin trading agency Mt. Gox shut down without any warning, causing the prices of bitcoins to fall drastically. Mt. Gox said the halt was temporary, and that customers would have access to their funds soon, but no further updates have been issued.
Withdrawals from Mt. Gox were frozen on Feb. 28. The company says that members’ bitcoins have remained in their digital wallets and will stay there until the technical issue is resolved.
The way it is designed, Bitcoin contains no central government or controlling power. Bitcoin is loosely overseen by the nonprofit Bitcoin Foundation. Mark Karpeles, the CEO of Mt. Gox, is a board member on the Foundation.
The unstable past of Bitcoin demonstrates the shaky ground it stands on and proves that if it doesn’t change the way it operates, it will fall apart.
The power that Mt. Gox holds over the bitcoin fortune represents the weakness and instability of Bitcoin’s future. Though many users view Bitcoin’s lack of a central power as it’s most attractive feature, it allows for Bitcoin to rely solely on larger corporations that have the tendency to shut down without announcement.
The Mt. Gox crash was not the first crash for Bitcoin. A first one in Dec. 2013 was provoked by a warning from the Chinese government. The Beijing government warned against using bitcoins as legal tender. However, the government never banned bitcoins, stating that citizens had the power to engage in bitcoin transactions at their own risk.
Two weeks after that crash, Bitcoin faced another severe undoing. A Chinese exchange, BTC China, stopped accepting deposits. This action caused Bitcoin to lose half its value in a day. The BTC China crash also caused prices at Mt. Gox to plummet temporarily.