At the end of November 2013, Bitcoin cost more than $1,100 but now its trading value has fallen by half. Mt. Gox, once the world’s largest bitcoin exchange, collapsed after hackers stole some $500mln worth in Bitcoin from the company servers. On Wednesday, a Japanese court denied Mt. Gox’s application to rebuild under bankruptcy protection, thus delivering a death blow to the exchange.
However, the elimination of Mt. Gox is not the end of Bitcoin, it is the end of an unprofessional attitude. Mt.Gox had problems with funding shortly before its shut-down and many people were sceptical about the reliability of its software. Anyone with their eyes peeled could say months in advance that the sands were running out.
The currency’s survival in spite of Mt. Gox’s downfall proves the fact of the rapidly growing cryptocurrency industry. If Mt. Gox had collapsed a couple of years ago it would have been a much bigger setback, in the opinion of Nicholas Colas, chief market strategist for ConvergEx, a brokerage firm in New York. Now a sufficient number of other exchanges, such as Coinbase and CoinX, have emerged to preserve the future of Bitcoin.
Actually, since the news filtered through in February that Mt. Gox had been hacked and robbed, the Bitcoin’s profile and availability has only continued to grow. Bitcoin ATMs are sprouting like mushrooms after the summer rains – in Australia, the United States and even mainland China. The online retailer Overstock.com started accepting Bitcoin in January. Two months later, the company reported that its customers had bought $1mln worth of goods using Bitcoins.
At present, additional investment is promising to provide Bitcoin a good scope of work. Firms like Perseus Telecom and Atlas have launched a high-speed trading platform for the virtual currency, and New York is trying to find a way to regulate Bitcoin exchanges.
Some of those initiatives may fail but still it has come home to players in the industry that the downfall of one company won’t spell the end of the currency.
Many people believe that the next step for the currency’s rapid move toward universal acceptance will be increased transparency and regulation. This proves that investors rather than activists have become the driving force behind the currency’s expansion. Now experts think that the central bit of regulation should be consumer protection. When hackers attacked Mt. Gox, users lost millions of dollars’ worth of Bitcoin. This is why many consumers are reluctant to adopt cryptocurrencies.