The Real Reason Bitcoin Is Doomed

Christopher Matthews writes at CNN Money about the recent troubles of the virtual currency Bitcoin:

It's been a busy couple of weeks for bitcoin enthusiasts, first as they dealt with the volatility brought on by the implosion of the world's largest bitcoin exchange, then as Newsweek fingered a 64-year-old California man named Satoshi Nakamoto as the creator of the virtual currency.

But compared to the question of whether bitcoin will ever achieve levels of adoption anywhere near the scale of government-backed fiat currencies, these stories are mere trifles. Bitcoin's biggest obstacle to success has always been receiving the blessing of the very governments that many of its supporters view as enemies one through 100.

Some governments, like China, have taken steps to combat bitcoin's use. In December, Chinese officials banned financial institutions from dealing with bitcoin though individuals are free to own them. The United States has taken a more hands-off approach, but it is inevitable that the Treasury Department, and especially the IRS, will have to take an official stance on the currency, and its position will have huge implications for the success of bitcoin.

Read the rest of the story at CNN Money.


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