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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%...
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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.
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Is the dollar bill done for?
So it seems to me and my colleagues...that an alternative currency with roots in peer to peer networks and based on an algorithm that is transparent to everyone is an idea whose time has come. The question remains if the Bitcoin algorithm or some other algorithm (possibly a derivative of the Bitcoin algorithm that deals with some of Bitcoin's weaknesses?) will ultimately win out. That's an important issue that has a lot to do with when this space becomes investable.
But Bitcoin or something else, I'm confident we'll see the emergence of currencies that are not controlled by nation states in my lifetime. Whether that is a good thing or not remains to be seen. I think it is, but there are significant ramifications that will result from the decoupling of currencies from governments. And one of them is an interesting investment opportunity that we hope to participate in.