Bitcoin was one of the biggest stories of 2013, and probably will be the case for 2014 as well. The digital currency rose to prominence this year making headlines from Silicon Valley to Shanghai. It’s not all rosy, peer-to-peer optimism in the Bitcoin community, however, and there have already been a spate of problems since the monetary notes hit it big.
Here’s a short recap of the four biggest Bitcoin disasters…so far.
4. The (many) cases of disappearing Bitcoins
With the convenience of technology comes the added risk of intangibility and therein lies Bitcoins’ biggest problem. There have been several $1,000,000+ Bitcoin disappearances in 2013 alone, most due to shady online exchange marketplaces or hackers. Inputs.io, a noted online marketplace for Bitcoin exchanges, was hacked twice in October and over 4,000 Bitcoins were stolen. Also in October, a noted Chinese Bitcoin marketplace straight up fell off the face of the earth, taking with it over $4 million in Bitcoins. Gulp.
3. Bitcoin is linked to the “dark web”
About mid-way through 2013 the federal government announced an absolutely massive sting on the so-called “dark web” site known as the Silk Road. Alleged drug dealing, arms trading, and even sex crimes were going down on the subversive, secretive site and apparently the feds had been watching for a long time. Unfortunately for Bitcoin’s future, there was no way to deny that the digital nature of the currency made it all too easy for criminals on the Silk Road to exchange funds, leading some regulators to propose drastic sanctions on the currency.
2. Malicious hackers start demanding Bitcoins
Everyone knew it wouldn’t take long and sure enough, in early fall of 2013 a malicious strain of malware started infecting computers from the U.S. to Europe. Its hook? The virus in essence locked down all the files on the targeted computer (think: baby pictures and medical documents) and demanded payments in Bitcoins within a short period of time. If targets didn’t pay up, their files were deleted. CryptoLocker isn’t the first “ransomware” that’s been seen online, but Bitcoins sure do make it easier for criminals to get paid and fade away into the darkness…
1. Guy throws a fortune in Bitcoins into the trash
Not so much a “disaster” as a “crawl-in-bed-and-never-wake-up” moment in Bitcoin history, 2013 will always be the year James Howells realized he had thrown away seven and a half million dollars worth of Bitcoins inadvertently. Howells bought the 7,500 Bitcoins back in 2009 as the currency was just beginning to pick up speed and threw the hard drive they were stored on away sometime this summer. He’s spent countless hours poring through his local landfill since then in an effort to recover the “money” to no avail. The ultimate facepalm.
Bitcoin is still an emerging technology with a lot to offer but also with long way to go before all the kinks are worked out. Investing in Bitcoins still may be a good idea but the truth is, none of the people involved in these disasters knew they were disastrous…until it was too late.
Ryan Currie is a product manager at BizShark.com, with 5 years experience in online marketing and product development. In addition to web related businesses, he also enjoys the latest news and information on emerging technologies and open source projects. Thank you Ryan for this exclusive article.
About Ali Gajani
Hi. I am Ali Gajani. I started Mr. Geek in early 2012 as a result of my growing enthusiasm and passion for technology. I love sharing my knowledge and helping out the community by creating useful, engaging and compelling content. If you want to write for Mr. Geek, just PM me on my Facebook profile.