Digital currency Bitcoin finds itself struggling, as it has recently encountered hurdles that could determine whether it survives as a viable currency on a mass scale.
“Bitcoin has already survived several bouts of volatility that were even wilder than the one last week. But during those crises, nearly everyone involved was a speculator and the currency was much further from real-world success. Now that Silicon Valley and Wall Street have begun to buy in, and everyday uses for Bitcoin are becoming more common, the stakes are much higher.”
The most fundamental threat was a bug in some basic software that determines how Bitcoins are moved between digital accounts. That forced several of the largest Bitcoin exchanges to shut down for most of last week and raised questions about the sturdiness of the programming underlying the currency. At the same time, the system proved vulnerable to a hacking attack, creating doubts about the strength of the network’s security. Regulators also indicated last week that they were moving ahead with new rules for virtual currencies, leading to some fears that burdensome laws could halt Bitcoin in its tracks.