Bitcoin mining has its darkside: schemers taking advantage of regulation void

Dec 5, 2013
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Bitcoin's value continues to soar as the digital currency is embraced by some and banned by others, becoming a valid method of payment at more than a few locations and even inspiring a new field of study at one university. With all its upsides comes a downside, however, something that results from the current void of regulations as the modern world decides how to deal with the currency: schemers who taking advantage of the system to make their Bitcoin mining worthwhile.

Governments have a lot to say on Bitcoin, yet most of them are silent when it comes to how to deal with the digital currency. This lack of regulations and policing has lead to schemers taking advantage of the position from a somewhat more moral standpoint than hackers who have profited from their own erstwhile escapades. One such schemer goes by the Twitter handle Fontas, and spoke with the folks at DealBook recently.

Late last month, Fontas sent out a tweet inviting fellow Bitcoins miners to "join the pump" to get "insane profits", saying that doing so is voluntary and puts one "on the right side of the price movement." There are only so many Bitcoins to go around, and quite a few have been mined over the years, especially as dedicated hardware has become available for the average consumer and the price has continued to rise.

As Fontas points out, "For now, the lack of regulations allows everything to happen." And such is one of the reasons that China banned the currency this week, saying that the average Chinese citizen can still use it, but does so at their own risk. When these regulations might come about is anyone's guess, but until then, the digital currency is a bit of a free-for-all.
SOURCE: Dealbook


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