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Republican nominee Mitt Romney, shown speaking in Colorado. Were his tax returns really hacked? And how is he going to get $1 million in Bitcoin?
There hasn't been much movement on last week's news that Mitt Romney's tax returns were hacked and that the hackers have demanded a $1-million ransom to not release them to the media — a ransom payable in the peer-to-peer cybercurrency Bitcoin, about which I have been frequently writing for the past few months.
Matthew Elias and James Woods have an excellent piece at American Banker detailing the caper and offering what I think is a good explanation for why the hackers, if they're for real, have done this:
It is...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 very volatile, and an influx of $1 million could drive up the price by as much as 25%...
zcopley/Flickr (cc by-nc-nd)
A Bitcoin card. If it's true that Mitt Romney's tax returns were hacked, will he be able to find $1 million in Bitcoin to pay the ransom?
UPDATE: Bitcoin prices have risen on this news. So far, I haven't seen anyone persuasively argue that this is why the rumors and allegations about Romney's tax returns — and the $1M ransom, payable in BTC — have been put out there.
Apparently, this is legitimate enough to invite the attention of the Secret Service. Various sources — I saw it on VentureBeat — are reporting that PricewaterhouseCoopers, the big accounting firm, might have been hacked and that cyberthieves have made off with Mitt and Ann Romney's tax returns.
None of this is substantiated, but here's the zany part: the hackers are asking for a $1-million ransom, to not release Romney's tax returns, a source of campaign controversy, to the media.
The ransom must be paid in Bitcoin, the cybercurrency with a checkered past but a devoted following amond the tech-libertarian set.
zcopley/Flickr (cc by-nc-nd)
A Bitcoin card.
I went on "AirTalk" with Larry Mantle yesterday to talk all things Bitcoin. It was a lively show, made all the more lively by Larry's admission that, like a lot of folks, he didn't know a thing about Bitcoin until about a week ago. I was able to fill him in and field a few comments during the broadcast.
What seems to blow people's minds about Bitcoin, at least initially, is that it's more of an idea about the money of the future than it is a well-functioning alternative currency today. I guess you could say it's in beta right now. And that means it's picked up a renegade reputation, by virtue of its popularity for buying drugs and porn.
However, in the months that I've been writing about BTC — And trading it! — I've learned that the cyber-currency has a lot going for it. Not least is the extreme sophistication of the process by which it's created. I think there's a good chance that what's useful about BTC could be adapted by government-backed fiat currencies, like the U.S. dollar, as they evolve from being fragments of the 19th and 20th centuries to being the media of exchange in the 21st.
Behold, the cyber-banker. Above, Hermione Way interviews Jered Kenna, CEO of TradeHill, a Bitcoin trading site. He thinks that Bitcoin has a future, and he's probably right. The cyber-currency continues to chug along, even as it has fallen far from its speculative highs in 2011. TradeHill, on the other hand, is a goner, at least according to this post yesterday from the site's blog:
::::: Announcement :::::: TradeHill suspending trading and returning client funds.
Dear Clients, Effective immediately TradeHill will be shutting down trading / deposits and returning all client funds. Due to increasing regulation TradeHill can not operate in it's current capacity without proper money transmission licensing. Combined with multiple bank account closures and Paxum's decision to close all Bitcoin business accounts, we have deemed the best course of action is to halt trading and pursue licensing while raising funds. SEPA transfers for our Euro customers have been enabled. Everyone at TradeHill has also been working without pay for several months after one of our payment processors removed over $100,000 dollars from our account without notice. We decided to cover this loss for now instead of passing it on to our customers and are taking legal action against the processor. We would also like to make it known that our relationship with Paxum has been great and hope to work with them in the future. We will be focusing on Bitcoin.com and are preparing to release a new site before the end of the month. It has been a pleasure working with the Bitcoin community and look forward to continuing our business in the future. More details to come soon. Sincerely, Jered Kenna Chief Executive Officer TradeHill
Bitcoin: It isn't money, but you can trade it.
There was what seemed to me like a Bitcoin bubble at the end of last year and the beginning of this. I made a nice return on my first trade and then set up what I thought would be a way to "short" Bitcoin for a while. As it turns out, the market at Mt.Gox has been sort of flat since then. So I haven't changed my position.
Stay tuned for more!
If anyone want to speculate about why there was a run-up in BTC value in December and January, please do so in the comments. I welcome your point of view. Remember, the idea here isn't for me to make money. I've only bought $10 worth of BTC. I'm trying to learn more about cybercurrencies and how they behave.