The recent closures of Mt. Gox (Japan) and Flexcoin (Canada) have led to renewed and intensified calls to government authorities in Japan, China, Hong Kong, India, in the United States and other countries. countries to start regulating virtual currencies. The virtual currency behind this clamor is none other than Bitcoin. A virtual currency launched about four years ago by an anonymous computer programmer known as "Satoshi Nakamoto." Bitcoin attempts to overcome the weaknesses of gold-based and paper-based currencies. It has no intrinsic value, not regulated or backed by a real-world commodity, like gold or silver, or by a central bank or government, nor pegged to a real-world currency, but rather backed by pure mathematics. Despite the enormous price volatility, the steady growth of the “Bitcoin family” indicates continued support from enthusiasts who see the benefits and future of virtual currencies. IntroductionBitcoin is credited with being the world's first fully decentralized digital currency. Four years ago, knowledge of bitcoins was also only available on Internet forums. The bitcoin economy is considered the largest economy in some of the smallest countries in the world (Brito and Castillo, 2013). It was during the last months of 2013 that the exchange rate of the US dollar for a Bitcoin increased more than five times and the value of a Bitcoin, which had started trading at less than five cents in 2010, exceeded $1,200.00. With approximately 12 million Bitcoins in circulation, the global value of the currency exceeded $14 billion, equivalent to the market capitalization of a mid-tier S&P500 company (Yermack, 2013). Until the 20th century, most of the world's economies used the gold standard monetar...... middle of paper ......wait for confirmation of payment receipt Fifty minutes is the time it takes for a enough additional blocks are added to the chain to protect against double spending. This is not a problem for two parties who know each other because they are confident that the other will not spend twice as much, but when it is an anonymous counterparty it creates a high level of risk which cannot be covered. has no obligation to accept Bitcoins as payment. Therefore, its value is only as good as its users' perception of its value. Bitcoin could disappear very quickly if the perception of its usefulness diminishes. Some aspects, like bitcoin, are not centrally cleared and delays in confirming the bitcoin transaction create doubt about its potential in the OTC market, which accounts for a significant volume of foreign exchange transactions..