Feb. 25 - After Mt. Gox, once the world's biggest bitcoin exchange, ceased trading Tuesday, the future of the digital currency is up for debate. Bobbi Rebell reports.
Is Bitcoin on life support- or just in need of a serious resusitation? Mt. Gox- once the world's biggest bitcoin exchange- abruptly ceased trading on Tuesday- protestors gathered outside the exchange's Tokyo office asking where their money was. Mt. Gox responded to Reuters inquiries with this statement: "We are currently at a turning point for the business. I can't tell much more for now as this also involves other parties." Bitcoin prices vary depending on the exchange- but the virtual currency has had a volatile ride to say the least- and has plunged recently. But NYU Professor Arun Sundararajan believes the issues are isolated- but are damaging: SOUNDBITE: ARUN SUNDARARAJAN, PROFESSOR, NYU STERN SCHOOL OF BUSINESS (ENGLISH) SAYING: "When something like this happens on what used to be the largest exchange, investor faith in bitcoin goes down and this hurts bitcoin investors around the world." The Bitcoin Foundation said in a statement, "Mt. Gox is one of several exchanges, and their exit, while unfortunate, opens a door of opportunity. This incident demonstrates the need for responsible individuals and members of the bitcoin community to lead in providing reliable services." Professor Sundararajan says the speculative nature of bitcoin is holding it back- it's seen more as a commodity than a currency. SOUNDBITE: ARUN SUNDARARAJAN, PROFESSOR, NYU STERN SCHOOL OF BUSINESS (ENGLISH) SAYING: "I think that bitcoin needs to get much more widespread acceptability before it starts to become a currency. I think the challenge that it's facing- it's a wonderful technology and I really like the fact that we've got a secure anonymous currency for the first time. It's just that it's not filling a market need that most consumers have. I mean if I look at the advances that Paypal has made, if I look at my credit cards and for face to face transactions I've got cash, and so bitcoin doesn't have a niche that it has filled in legal commerce as yet." As the value and reputation of bitcoin has taken a beating, other virtual currency exchanges will be under pressure to step up transparency and disclosures- ultimately benefiting the growing business.