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After I wrote a post last week expressing optimism about this technology's potential, several generous Bitcoin fans sent me small donations of the virtual currency. Thank you. Now stop. Please.
August 29 -
Bitcoin lets users send money nearly instantaneously, at almost no cost, and (if desired) anonymously. Getting funds in and out of the system is the hard part. That may soon change.
August 24 -
Leaving no coin, metal, or commodity unturned, retiring Rep. Ron Paul made a final push on one of his signature issues on Thursday, seeking stronger ground for the U.S. to implement a parallel currency in lieu of the U.S. dollar.
August 2 -
You should be able to move your money as fast as you can make it. But the banking system today works about as speedily as the Post Office.
July 24
It may be an elaborate hoax, but an apparent attempt to blackmail Mitt Romney shows the dark side of a disruptive financial technology and raises serious legal questions.
In an
Aside from the obvious crimes involved with obtaining these documents (if the letter's claims are genuine), the use of Bitcoin for extortion has legal implications that hold true even if the claims prove bogus.
For the uninitiated reader, Bitcoin is a decentralized peer-to-peer cryptographic currency which facilitates partially anonymous transfer of units of value (known as bitcoins) between peers through unique
Bitcoins, along with many legitimate uses, enables the easy laundering of funds. The illicit online drug marketplace known as the Silk Road exclusively uses bitcoins for transactions. In doing so it employs a proprietary "mixing system" which instills a sense of security in their users, whose sales generate a
Money laundering is a federal crime in the United States, and is defined by Black's Law Dictionary (ninth edition) as "the act of transferring illegally obtained money through legitimate people or accounts so that its original source cannot be traced." State legislation also deals with the issue, using the template of the Uniform Money Services Act, and internationally efforts are undertaken by Interpol to police such actions.
It should be noted that enforcement officials have not and may not be required to define Bitcoin as money to pursue the individuals in the Romney tax return caper. The use of Bitcoin complicates the process of tracking these individuals by law enforcement, but it has been demonstrated that the Bitcoin protocol
It is also plausible that these actions are motivated by a desire to manipulate the market price of bitcoins, regardless of whether this is a hoax. Someone holding a large position in bitcoins would have a strong incentive to create demand for the large number of coins needed to meet the $1 million ultimatum. The Bitcoin/U.S. dollar exchange rate has historically been
The
Matthew Elias and James Woods are directors of the