Europe Warns of Bitcoin Dangers

Regulator to highlight price volatility and lack of legal protection for users

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A European financial watchdog will issue a stern warning Friday about the risks associated with unregulated Internet currencies like Bitcoin.

The European Banking Authority statement will highlight the “violent fluctuations in [the value of] electronic currencies,” the danger that digital wallets may be hacked, and the lack of legal protections for users, the Financial Times reports. The value of Bitcoin has fluctuated wildly in recent months, swinging between $340 and $1240 this week alone.

The move comes after the People’s Bank of China ruled this month that Chinese banks will not process or insure Bitcoin transactions. Many financial investors have been enthusiastic about the usefulness of the stateless, digital currency, which can cut down on transaction fees and facilitate anonymous financial transactions online, but regulators fret over the ease with which Bitcoin, and other digital currencies, can be used for money laundering and other criminal activity. The online illegal drug marketplace Silk Road, which was briefly shut down by authorities after the arrest of its founder, operated entirely on Bitcoin.

[The Financial Times]

23 comments
PragueBob
PragueBob

It is highly unlikely that any bitcoin wallet will be hacked, well maybe if one banged away at it for a couple of million years with a supercomputer. These central "bankster" types are either dimwitted, don't do their homework, or both. I find them offensive and I certainly not trust them at all, since they are the reason everyone's "fiat currency" is becoming increasingly worthless over time. Bitcoin is real, it is here to stay, and there is nothing any central "bankster" can do about it, thank goodness.

Geterrrrrrrrdone
Geterrrrrrrrdone

DId the USPS once send out a letter as well warning citizens about the dangers of the Internet and email?

joliveros
joliveros

Each currency is the vehicle of each respective country's agenda. The dollar is the ambassador for the US. It is the tool that they use to suppress other economies. They provide different financial products based on the dollar to attract global business. Bitcoin is itself an ambassador for all of us. It attracts business from everywhere in the world in a much more appealing manner than the dollar or any other currency. This is why it is being slandered in the media constantly. Right now bitcoin is unstable because it is starting to take it's place. When the bitcoin stabilizes you will see other currencies destabilize. At which point, business all around the world are going to make the decision for you. They will only accept bitcoin because the dollar/etc is to unstable.


Just a heads up.

oliversecure
oliversecure

This is heavily being promoted by early Angel Investors who bought the bitcoin when it was about 5 or 6 cents. These early investors lobbied,bribed and influenced the media and internet forums to make this bitcoin popular and grow. This type of Ponzi is seeing its rise because of these early  angel investors, the result of cartels laundering their proceeds from drugs,extortion and illegal gambling and people who are just  basic suckers and gullible.  Look at the Chinese government, they said it is not a currency and told their banks not to deal in bitcoins. Ex-Chairman of the federal reserve Alan Greenspan said it is not a currency.

DavidSpencer
DavidSpencer

So...*kind* of like the euro, except Brussels can't raid my account to pay off the IMF and my destiny isn't shackled to Angela Merkel's political fortunes. :) Got it. 

Kal_Wellman
Kal_Wellman

when was it ever at $340 this week? that's just a lie

mjgarske
mjgarske

The BItcoin Authority should issue it's own "stern warning" regarding the dangers of believing in Central Bank issued fiat.

rhyso
rhyso

"Bitcoin has fluctuated wildly in recent months, " ; True...


"swinging between $340 and $1240 this week alone." ; False

At least try to get your facts straight... If you re going to try to discredit something... then at least try to look credible yourself...

Bitcoin and other cryptos are here to stay...

The hashing power going into securing the Bitcoin Network alone is 500x more power than the worlds top 5 super computers combined...

I understand you mainstream media outlets have been commanded to write anti crypto pieces in order to discredit crypto currency. In doing so you only discredit yourselves...

How about some real journalism for a change?


adrianr_17
adrianr_17

You should be ashamed of your biased coverage of happenings in the bitcoin space. Media does not want to miss opportunity to misunderstand a warning issue by other countries like the one just happen a week ago issued by China...

Fiat Currencies vs Bitcoin here..


Are they Stable: NO the longest lasting Fiat Currency which ahs not yet collapse is the US Dollar - that has lost 99% of its purchasing power in the last 100 years,

Are they backed by anything: Fiat Currency is backed by a gun. Bitcoin is backed by the worlds largest distributed supercomputer.

Are they regulated: Fiat Currencies are regulated by people who have no choice but to print them into oblivion because they are based on unsustainable Debt. They are basically Ponzi Schemes. Bitcoin is regulated by a simple mathematical formula.

Are Deposits Insured: Maybe you should ask somebody from Cyprus that question. Cyprus was a test-bed for global deposit confiscation. None of these confiscations will be insured.



FreeJack2k2
FreeJack2k2

The banks all want to sow fear into the public, because they stand to lose the most if the likes of Bitcoin and Litecoin gain widespread adoption...which I feel is inevitable. Who will want to put their money in an account whose laughable interest rate doesn't even keep up with the debasement of the currency over time? Or pay exorbitant fees for money transfers or payment processing?

DJRRyan
DJRRyan

An anonymous stateless group of loosely connected individuals enabling global money laundering. What could go wrong?

Openyuris
Openyuris

@rhyso You're suggesting that the unprecedented usage of electricity for no purpose other than bashing against an arbitrary math problem secures the value... 


That's probably the most ridiculous pro-bitcoin statement I've heard and I own quite a few bitcoins.


Effort doesn't create an intrinsic value. Probably a good reason why the first to start the race is rarely the one that finishes first.

mjgarske
mjgarske

@adrianr_17 - You won't see major Media outlets like Time splashing any water in the Central Banks pool.  The days of intrepid reporting are gone I'm afraid, the major outlets have become conduits for propaganda and behind-the-scenes agenda fulfillment.

DavidSpencer
DavidSpencer

@DJRRyan "An anonymous stateless group of loosely connected individuals enabling global money laundering.


You shouldn't be so mean. 

Bankers have feelings, too. 

FreeJack2k2
FreeJack2k2

@DJRRyan So in other words, you have been programmed by sensationalistic media and have done absolutely no actual reading about crypto-currency or how it works.


I have news for you...that anonymous stateless group of loosely connected individuals is what started the internet you're posting on a website using, today.

eagle11772
eagle11772

@DJRRyan It's simply a medium of exchange.  One could use wheat, rice, corn, cats, light bulbs, or anything else as a medium of exchange.  And I see no way of stopping bitcoin or any other digital currency.  Want to make the dollar really worth something ?  Then have our government back it with gold and silver like it was for more than 150 years.

DavidSpencer
DavidSpencer

@FreeJack2k2 @DJRRyan  "I have news for you...that anonymous stateless group of loosely connected individuals is what started the internet you're posting on a website using, today." 


Kind of makes you despair of the species, doesn't it?