Abstract: Though the use of bitcoin was concentrated in small networks for the first few years following its inception in 2008, it has recently gained favor outside of the young and tech-savvy community in which it was incubated. Today, it is estimated that between eighty and one hundred thousand bitcoin transactions take place daily. These transactions are anonymous and are thus untraceable as far as governmental agencies are concerned, offering nearly free range for illegal activities. It is largely for this reason that bitcoin has faced such a high degree of scrutiny from regulators—and because it has the power to render many traditional services provided by banks, payment services, and even lawyers obsolete. Some ardent constitutionalists argue that virtual currencies obstruct state power. Still, decentralized virtual currencies like bitcoin have great potential to positively change the way banking and commerce has been conducted since the 15th century. The purpose of this article is twofold: first, to briefly discuss the nature of virtual currency and its role in the global economy; next, to highlight how, given the multiplicity of categories into which bitcoin may be placed, and the regulatory confusion that results, as tempting as it may be to try to fit the metaphorical square peg into a round hole, it is necessary to establish a new statutory framework specific to bitcoin’s oversight.
Author: Jacob Romeo is a third-year in the College, majoring in Philosophy.