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none of those Great Depression currencies worked, and all have disappeared.
Today, because of worries that the Federal Reserve is printing too much money,
which would result in the loss of purchasing power, a private online global cur-
rency called bitcoin has been created to protect society from inflationary mon-
etary policy. The introduction of bitcoin or any other form of virtual currency
raises the question of whether bitcoins can become an alternative to the money or
monies that currently exist.
According to a
BusinessWeek
article by Kharif (2009), virtual currencies have
been gaining in popularity since 2009. To date, there are more than 80 kinds of
virtual currencies, with an array of odd names like feathercoin, bbqcoin, fireflycoin,
and zeuscoin. These have supplanted the previous attempts to create virtual curren-
cies in the 1990s. Table 10.1 lists some of today's virtual currencies, including a few
that have been created within virtual worlds.
Understanding virtual currencies is important, according to Guo and Chow
(2008), who examined WoW Gold, QBcoin, Linden Dollar, and Acebucks as vir-
tual money systems as shown in Table 10.1. Their importance lies in their ability
to help the world understand the economic relations among virtual community
members. It allows for the build-up of economic and social order, which could bind
the behavior of those in the virtual world into legal virtual activities. That should
enable the creation of a bridge between the virtual world and the real world for
healthy e-commerce transactions (Guo & Chow, 2008).
The existence of four other virtual currencies mentioned above, the Linden
Dollar, Project Entropia Dollar, dotori, and simolean, has raised, for Bray and
Konsynski (2006), the following vital questions: Will the formation of virtual
worlds undertaking virtual transactions “see the rise of endogenously formed
virtual governments?” If such does take place, how will real-world governments
respond to the formation of virtual businesses, governments, and realities? Will real
and virtual world laws and law enforcement intersect? Will they collide? (Bray &
Konsynski, 2006).
It is quite obvious that the real world and the virtual world can intersect and can
conflict. People join virtual worlds because they are generally lawless at present and
represent an extreme form of liberalism. Such freedoms lead to the “profit-driven
abuses of virtual currencies,” explained by Huang (2014). Such abuses can include
theft, money laundering, exploitation, and market disruption (Huang, 2014).
Given the existence of virtual currencies and the notoriety that bitcoin exhib-
ited during the time period at the end of the 2013 and early 2014, it made the topic
ripe for a case study of how a virtual currency that can be used for real-world trans-
actions can exist within the two worlds. Given the melding of the two boundaries
with the ability to freely transact, the question is raised with regard to which laws,
if any, prevail. What is the impact of the existence of bitcoin on markets, people,
and laws especially when it is breaking existing boundaries? This is the focus of the
next section of this chapter.
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