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Ripped From the Headlines: Key Concepts

A guide to understanding the wider context behind stories in the news.

The Legality of Electronic Money

Though legislation concerning crypto currencies in the United States is still evolving, there are a number of regulations in place with such agencies as  the US Commodity Futures Trading Commission, the Securities and Exchange Commission, the Internal Revenue Services and others. 

Ethics of Crytocurrencies

Because crypto currencies are such a new phenomenon, many ethical concerns have yet to be addressed.

Security Issues

A number of security threats surround crypto currencies.  Chief among them are hacking, cyber-attacks, and "double spending." 

Blockchain

     

Blockchain is the technology for record-keeping used by crypto currencies.  It is a public ledger of the transactions made in bitcoin or other currencies and is maintained across several computers that are linked in a peer-to-peer network.  Blockchains are considered very secure.    Crypto Currencies like Bitcoin rely on a public ledger system called Blockchain to record and keep track of transactions.  Blockchains require a large amount of computing power and electricity, but are considered very secure.

Cashless Systems

                     

In a cashless society, financial transaction are made digitally with no physical money changing hands.  The idea of the cashless society began in the 1990s with the advent of electronic banking.  Today, services like Paypal are common place and many people no longer routinely carry cash.

Crypto Currencies and Illegal Activities

It is estimated that approximately one-quarter of bitcoin users are involved in illegal activity. One reason for this is that crypto currencies are anonymous and difficult for law enforcement to trace.  Selling illegal drugs is the most common activity, but other include human trafficing, child pornography, and money laudering.

The Dark Web

The Dark Web refers to a section of the Internet which is not accessible via commonly used search engines such as Google.  Though it is sometimes used by police and the military when conducting covert actions and by human rights activists as a way of documenting crimes, the dark web is most commonly used by criminals such as child pornographers, sex traffickers, and drug dealers as a place for conducting business.  Crytpo currencies are frequently used as a form of payment on the dark web.

Cryptocurrency and Terrorism

Because it affords the abiltiy to be anonymous, crypto currencies are a natural for terrorist organizations.  The Islamic State, as well as other terrorists, have begun using cryptocurrencies as an alternative financing source, especially with the loss of dwindling oil revenues.

Crytocurrency as Investment

There is a wide variance in thought among financial experts about investing in cryptocurrencies.  Some think they are a flash in the pan, while others see them as potentially sound longterm investments.