Introduction: Can Bitcoin usher in the era of digital currency? The Bitcoin network was launched on January 3, 2009, and the first Bitcoins were issued. Only a year later the official exchange rates for Bitcoin were set. Bitcoin as an example of a purely digital currency brings with it both risks and benefits, but I believe the risks will be outweighed by the benefits: • Small risk of inflation • Small risk of collapse • Safe and cheap transactions • Easily transportable • Virtually untraceable This latter benefit is also a risk as having an untraceable currency lends itself to being sought for criminal activity as it is potentially more difficult to trace back to its source than cash, the current tool for criminal activity. This will likely attract unwanted attention from government bodies who will want to have a hand in monitoring the currency and its owners. A cursory look at the other risks needs to be addressed to better explain how this is simply the entry into digital currency rather than the end of digital currency. Bitcoins are relatively easy to lose as once they are no longer in your personal possession there is no easy way to get them back. Bitcoin is currently difficult to exchange for any direct type of alternative currency, but this will develop as general adoption becomes more widespread. Considering how young the currency is, there is a calculated risk that a different type of digital currency won't outperform it, or that there is an inherent flaw in the code behind Bitcoin. The currency represents more of an investment choice rather than an actual currency for purchasing items on a daily basis due to current limitations in the number of businesses/people who accept it as a viable payment method... .medium of paper.. .do not deliver to them the goods or services they have requested. Other benefits from this can be passed on to both the seller and the buyer. Brito and Castillo's study found the following: Not having to pay fees to merchants means that merchants who accept Bitcoin have the ability to pass the savings on to consumers. This is the business model of the Bitcoin Store,23 which sells thousands of consumer electronic products at discounted prices and only accepts bitcoin. The same Samsung Galaxy Note tablet sold on Amazon for $779 plus shipping24 is sold on the Bitcoin Store for just $480. (p. 12) Another benefit that extends across the globe through the use of Bitcoin is people who send money to their families from first world countries. The World Bank estimates that the amount of money sent to households this way will exceed $500 billion this year 2015.