Bitcoin is a digital currency, this means that we can get into some problems that paper currency can’t. The other problem with digital currency is that its price is extremely volatile, being able to skyrocket one day and then plummet the next.
A man in Breathitt County, Kentucky has found this problem after being ordered by a judge to repay a loan of bitcoins that he received in December 2013 (including interest). With the initial loan of 11.95 bitcoins the cost to repay would now come in at $67,800 (£42,680 approximately), the price to repay is quite a large one. At the time of the loan, the bitcoins came in at around $10,000, with the promise of a 20% return within a year to his lender, a man from Brazil.
The initial plan was to buy Bitcoin miners unfortunately that didn’t work out. After failing to repay the loan within 90 days of the initial deadline, legal action was taken and was awarded a total of 67.74 bitcoins.
This didn’t get paid and resulted in a US lawyer based in Kentucky who then filed a lawsuit in March 2015. While legally being ordered to repay the bitcoins, there is very little that can be done given the digital currency and laws in Kentucky that protect homeowners with deceased spouses who owe money.
While digital currency can help solve some problems paper currency has, without borders and proper legal oversight problems like this will come around more and more in the future.
Thank you Ars Technica for the information.
Image courtesy of CanBike.
