1. IS ANONYMOUS CURRENCY A GOOD IDEA? BY ADAM LASSWELL

2. WHAT IS ANONYMOUS CURRENCY The concept of Anonymous currency is spending or receiving that currency with there being absolutely no trace of where it came from or where it’s going. At this time, there is currently no “true” anonymous currency that is widely used or known about. There are pseudo anonymous currencies that use encryption to help guard the buyer/seller’s identity, but there are ways to find out the user’s identities. The most popular form of this currency is Bitcoin. There are alternatives, but they are not as popular. Price of one Bitcoin: $319.75 Next highest alternative: $3.04

3. HOW BITCOIN WORKS It is a Peer to Peer, Open-source software, first decentralized digital cryptocurrency Transactions are verified by nodes and recorded in a public distributed ledger called the block chain. Each user has an address connected to their online “wallet” that allows them to exchange, buy, and sell Bitcoins without an intermediary. Bitcoins can be acquired as payment, through the Bitcoin exchange, by exchanging them with someone, or through competitive mining. There are no fees for the seller and an adjustable fee for the buyer. Paying more helps your transaction go through faster. https://www.youtube.com/watch?v=Rtrqb-FgKCs

4. GOOD SECURITY FEATURES OF THESE CURRENCIES Every transaction is recorded and viewable to the public to ensure neutrality and transparency. Bitcoins are impossible to counterfeit. Users are in charge of payments, and therefore cannot receive unapproved charges. No required payment information for purchases prevents it from being stolen or sold to third parties. The level of security is in the user’s control and how they protect it. There are no other middle groups that can alter or disrupt the payment in any way. You own the currency yourself.

5. BAD SECURITY FEATURES OF THESE CURRENCIES If the money is lost or stolen, it is gone. Because there is no centralized group, there is no customer service or other groups to assist users. They are not insurable. It is not user friendly. Those that are less tech-savvy will find it harder to use and will be more vulnerable to being hacked or scammed. While your identity is not publicly displayed, there are techniques used that can connect a person’s Bitcoin address with their identity.

6. RELIABILITY AND DURABILITY Currency is about communal trust in the value of that currency. Bitcoin is volatile and there is a fear that you might not get your money back. Fiat money is backed by nations, governments, and regulated financial industries. People could be hesitant to invest in a system with no safety net should things go wrong. The value of a bitcoin has dropped or risen by its value x10 in very short periods of time. Part of this is due to it’s size. The larger it gets, the less little changes will alter the value. Bitcoin’s advantage is that it’s a global currency allowing quick, cheap transactions between borders. “I really like Bitcoin. I own Bitcoins. It's a store of value, a distributed ledger. It's a great place to put assets, especially in places like Argentina with 40 percent inflation, where $1 today is worth 60 cents in a year, and a government's currency does not hold value. a good investment vehicle if you have an appetite for risk. But it won't be a currency until volatility slows down." - David Marcus, CEO of Paypal

7. LIMITED AMOUNT OF BITCOINS Bitcoin has a limited amount of currency that will all be mined and owned by users. They slowly reduce the amount that can be mined over the years. (50 for the first four years of existence, and then reducing to half every other 4 years), this means that, unlike the state, it can only issue a limited amount in total: 21 million in 20 years, with no inflation Similar to the gold standard once used by the U.S. However, once the bitcoins are all mined, it will raise the price of the bitcoins. This could results in a deflation of the value of goods and services, and lead to a deflation for this currency.

8. REFERENCES http://www.investopedia.com/articles/investing/121014/5-most-important-virtual-currencies-other- bitcoin.asp?header_alt=true http://www.investopedia.com/articles/investing/121014/5-most-important-virtual-currencies-other- bitcoin.asp?header_alt=true http://www.investopedia.com/terms/b/bitcoin-mining.asp?header_alt=true http://www.infoworld.com/article/2614778/security/don-t-trust-anonymous-e-currencies-like- bitcoin.html http://www.infoworld.com/article/2614778/security/don-t-trust-anonymous-e-currencies-like- bitcoin.html https://www.washingtonpost.com/news/wonk/wp/2013/04/12/bitcoin-is-ludicrous-but-it-tells-us- something-important-about-the-nature-of-money/ https://www.washingtonpost.com/news/wonk/wp/2013/04/12/bitcoin-is-ludicrous-but-it-tells-us- something-important-about-the-nature-of-money/ https://bitcoin.org/en/faq#what-is-bitcoin http://www.coindesk.com/information/why-use-bitcoin/