BLOG6 Cryptocurrency: Bticoin and Illegal Activities

Cryptocurrency is a kind of digital or virtual currency protected by encryption technology, which is almost impossible to forge or re consume. They are not issued by central authorities. At least in theory, they are not interfered and supervised by the government. The first cryptocurrency is Bitcoin. In 2009, it was launched by an individual or group with the pseudonym of ‘Satoshi Nakamoto’.

Most cryptocurrency are derivatives or analogs of Bitcoin. For example, Bitcoin can explains how most cryptocurrency work. Firstly, Decentralized Networks, cryptography and supply and demand these three parts constitute the working principle of Bitcoin (BitDegree, 2019). What is decentralized Networks? For example, A borrowed £ 100 from B and recorded it in the book. If A doesn't want to pay back the money, he just needs to tear up the account book to pay off. But if B finds 10,000 people to write down 10,000 account books, A will not be able to repudiate a debt. When a lot of things like A and B happen, this leads to a very important point -- block.

Block is to record all transactions in the network and the information is updated every ten minutes. But how to ensure the security of this block? The emergence of cryptography is to provide this service--encrypt the block. These encrypted blocks form chains at different time points, which is called blockchain. Supply and demand is in order to Higher value, because limited things have greater value. Every four years, Bitcoin production will be cut by half and the production limit is set at 21 million.

There are some serious problems in the emergence of cryptocurrency, especially Black market activity. In October 2013, the closure of the much publicized "Silk Road" illegal market and the arrest of its founder, Robert ulbrecht (Global Drug Policy Observatory, 2013). After this crackdown on illegal trade, the number of illegal trade has increased. This is because people know the possibility of buying illegal goods online, and the system that can support the success of transactions is not found by cryptocurrency that is difficult to be regulated by the government. This brings life to those illegal traders. Moreover, according to the BBC news (2018), Researchers in Germany have found hundreds of links to images of child sexual abuse on Bitcoin's blockchain. Bitcoin has become an illegal synonym in the Internet.

References:

BCC news (2018). 'Child porn links could make Bitcoin blockchain illegal'. https://www.bbc.co.uk/news/technology-43485572. (Accessed on 11 November 2019)

BitDegree (2019). ‘What Is a Bitcoin and How Does Bitcoin Work?’. https://www.bitdegree.org/tutorials/how-does-bitcoin-work/#How_Does_Bitcoin_Work_Why_Was_Bitcoin_Invented. (Accessed on 11 November 2019)

GDPO Situation Analysis (2013).

https://www.swansea.ac.uk/media/GDPO%20Situation%20Analysis%20silk%20rd%20and%20bitcoin.pdf. (Accessed on 11 November 2019)