Why Bitcoins Are So Controversial

Various reasons have converged to make Bitcoin currency a real media sensation.

According to Lifewire from 2011-2013, criminal traders made bitcoins famous by buying them in batches of millions of dollars so they could move money outside of the eyes of law enforcement. Subsequently, the value of bitcoins skyrocketed.

Ultimately, though, bitcoins are highly controversial because they take the power of making money away from central federal banks, and give it to the general public. Bitcoin accounts cannot be frozen or examined by tax men. Law enforcement and bankers see bitcoins as 'gold nuggets in the wild west', beyond the control of traditional police and financial institutions.

The value of Bitcoins

Bitcoin is decentralized and limited. This is a major factor for many Bitcoin users. Bitcoin is hard for governments to trace and tax. Also, unlike fiat money produced by central banks, there is a cap set on total Bitcoins, limiting how much the currency can devalue through inflation. In short, people accept and trade in Bitcoin because other people accept and trade in Bitcoin. It is recognized and accepted as a currency by many.

As it is mentioned in Investopedia Bitcoin acts like an equity investment. The market value of Bitcoins has had wild swings in value and even a market cap.

Bitcoin is a social network. The Bitcoin "community" is active and acts like other online social networks. Some currencies, like gold, have value because they are useful as a commodity. Government fiat currencies, like the U.S. dollar, have value because governments grant them legal tender status and only accept taxes through them.

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