Crypto-currencies struggle to gain worldwide acceptance

By Dylan Frost

Christmas came early for Beau Wright in the form of bitcoin.

Wright, a junior from Goreville studying advertising, heard about bitcoin in January 2013 and was fascinated by its potential.

Crypto-currencies, such as bitcoin, are digital money that can be used anywhere in the world and is transferable within minutes. The coin’s worth is stored on the owner’s hard drive in an account called a bitcoin wallet. It has a private key, which is a passcode protecting it from potential hackers. Crypto-currencies are decentralized, meaning there is no governmental authority to regulate how the coins are used.

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For Wright, the currency served as a means for gambling online. Wright has enjoyed playing home games and at casinos for several years, and decided to try his hand at online blackjack early Dec. 24. The gamble paid off almost instantly, winning him $100 within minutes.

“I thought, ‘well, that was really easy,’” Wright said. “So I continued to play – which is usually where any gambler makes the worst mistake – but it just worked out really well for me.”

It seemed that he could do no wrong. Wright was winning big and losing small. The more he won, the higher he raised the stakes.

“I think the biggest bet I placed was $1,500 and I happened to hit a blackjack on it,” he said. “So that paid $1,500, plus $750, plus my initial investment, so about $3,750 I made in two seconds.”

Wright made about $4000 worth of bitcoins in just a few hours. His winning streak continued to surge through Christmas and the day after. By Dec. 26, he had turned about $600 into more than $21,000.

While crypto-currencies have been a blessing for many people who use them as investment opportunities, several countries have condemned peer-to-peer currencies for their instability and potential to fund illicit activities.

In a Jan. 27 press release, The Bank of Russia criticized bitcoin for being speculative in nature and carrying a high risk of loss of value. The bank deemed bitcoin and other crypto-currencies as illegitimate because of their potential to fund crime and terrorism.

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“Citizens and legal persons may be unintentionally involved in illegal activities, including the legalization (laundering) of proceeds from crime and terrorist financing,” the press release stated.

The People’s Central Bank of China also took a hard stance against crypto-currencies in December by restricting virtual exchanges for area currency. Bitcoin’s value dropped 50 percent from $1,200 to $500 in a day after China’s ruling.

Those who doubt the legitimacy of crypto-currencies say it is a Ponzi scheme. However, supporters argue there has never been a guarantee the currencies will yield profits, thus not making an inherent attempt to manipulate investors.

Despite the setbacks endured by crypto-currencies, they have still been put to good use, inspiring enthusiasts to keep faith in their validity. Another crypto-currency called dogecoin recently raised $30,000 to help fund the Jamaican Bobsled team’s trip to the Sochi Olympics. What began as an Internet meme of a dog speaking broken English became a legitimate means of fundraising.

Unfortunately for Wright, his wave of luck came crashing down. He decided to teach his sister Adrienne how to play after hitting the Bitcoin jackpot, only to lose $16,000 in six hours.

“I almost cried,” Wright said. “Winning that money didn’t feel as good as losing that money felt bad.”

Wright said he still profited $3,000 after the blackjack rollercoaster but wishes he would have known to quit ahead.

“I should always set a stopping point instead of just thinking, ‘the sky is the limit,’ because your luck is always going to run out at some point,” he said.

Wright said he believes bitcoin has the potential of being useful for students despite the currency still being in its infancy stage.

“(Bitcoin) is one thing that I’m surprised hasn’t boomed in a college town like Carbondale,” he said. “It’s full of young, rebellious, tech-savvy minds that would really, if not benefit from using bitcoin, just really enjoy the whole technical aspect of it.”

More than 60 different crypto-currencies are trading online, with bitcoin being the biggest company. It started trading in 2009 and is now valued at $806.51 per coin, although the price fluctuates every second. Bitcoins were originally sold for less than $27 and peaked at $1,200 last November – essentially being valued from nothing to billions of dollars in a span of five years.

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