Ethics and Trust in Virtual Currencies
8th edition (2020/2021)
Technology / Trust
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The rise and fall (and rise again) of virtual currencies
‘‘Money makes the business world go round. Yet money is more than cash.’’ (Dierksmeier and Seele, 2018, p. 1)
When we think about money, we often think about cash – tangible banknotes, coins, or an indication of current assets (which can be readily turned into cash). Money is at the centre of the financial world. It is used as payment for goods and services, for people and organisations to pay their taxes, for the repayment of debts, and for investment. Yet money is much more than cash. Indeed, emerging forms of money, such as virtual currencies, are presently enjoying a meteoric, if undulating, rise.
In May 2021, Dogecoin – a digital currency based on an internet meme, which was created by software engineers as a “joke” in 2013 – jumped in value by 30 per cent within 24 hours after being endorsed on Twitter by Tesla’s CEO Elon Musk (Bambrough, 2021) (see Figure 1). Similarly, the renowned Bitcoin has enjoyed a spectacular rise since its inception in 2009 as an “electronic payment system based on cryptographic proof instead of trust,” and an alternative to traditional financial instruments (Nakamoto, n.d.; emphasis added).