An Update on Bitcoin as a Digital Currency

Background

This encyclopedia entry comes on the heels of a recently published chapter entitled “The Evolution of Virtual Currencies: Analyzing the Case of Bitcoin” published in the book Information and Communication Technologies in Public Administration. The research and writing for it took place at the height of the bitcoin controversy. At that time in 2013-2014 the value of bitcoin skyrocketed and waned at such a volatile rate that it made for good fodder to many newspaper and magazine articles. In the month leading to bitcoin reaching its highest value

vis-à-vis the US dollar of $1147 on December 4, 2013, bitcoin tripled in value only to decline to $830 a month later, a decline in value of more than a quarter. By early April 2014 bitcoin had lost another 47%. As of this writing, bitcoin’s value seems to have settled in the $250 range (BPI, 2015).

The Manrique and Manrique chapter took a look at the evolution of virtual currencies and focused attention upon bitcoin. It studied the case of bitcoin in terms of its potential as a legal tender taking into consideration the various characteristics that make for what would constitute legal tender in society. The positive and negative impacts of transacting in bitcoin were laid out. A description of the international exchanges that bitcoin engendered was also provided. But more importantly the chapter explored the direction that regulation might take. At that time regulatory agencies and groups were just at the early stages of “thinking about” what needs to be done and were not ready to recommend, let alone enact, rules on virtual currency including the regulation of bitcoin. Thus the chapter concluded with some of the areas of research that would provide fertile fields for further research (Manrique & Manrique, 2015).