Did you miss a session from GamesBeat Summit Next 2022? All sessions are now available for viewing in our on-demand library. Click here to start watching.
Not satisfied with eliminating digital piracy from the world, two U.S. senators want to crack down on Bitcoin, an open-source digital currency.
Senators Charles Schumer and Joe Manchin are pressing officials to take action against Bitcoin, which Gawker recently claimed is being used on underground black markets to purchase illegal drugs. The senators expressed their concerns in a letter to Attorney General Eric Holder and Drug Enforcement Administration chief Michele Leonhart, Reuters reports.
Unlike other currencies, Bitcoin uses a peer-to-peer technology to manage transactions and validate payments. Since no bank is involved, purchases don’t leave a paper trail for law enforcement agencies to track criminal activity.
“The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins. After purchasing Bitcoins through an exchange, a user can create an account on Silk Road and start purchasing illegal drugs from individuals around the world and have them delivered to their homes within days,” the senators wrote.
The senators neglected to mention the much larger negative implications of Bitcoin usage in the letter. If the currency became popular enough to compete with a national currency, it could have the power to undermine that government’s authority far beyond regulating drugs — something China realized and outlawed in 2009.
However, finding black markets like Silk Road that promote the use of Bitcoin won’t be easy. The only lead investigators have is tracking transaction patterns that may suggest the exchange of real money for Bitcoin, according to the report.
According to comments posted on a Bitcoin public forum, many Bitcoin supporters doubt any authoritative body could truly eliminate the currency.
However, the U.S. government successfully shut down other online cash alternatives, such as E-Gold, when it discovered that they were being used in illegal trade, such as the sale of stolen credit card numbers. Some former customers of that cash alternative are still waiting to get their money out of their E-Gold accounts, more than two years after the service suspended trading activity.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.