The Catch-22 of the legal application of cryptocurrency hacking
The other day, I was discussing crypto with an acquaintance at our local Starbucks, and he told me he was working with a couple of entrepreneurs who had previously been academic computer security experts. Of course, for cryptocurrencies it’s about the secure transfer of data and trust in the intrinsic value of those ones and zeros, or Q-bits. Perhaps, you could take a look at their business plan, although these digital currencies have had some bumps in the road going forward, I’m sure they will be the future norm – it seems that’s the way the world is headed.
Does this mean that we will have a distributive currency like distributive energy in the smart grid or distributive information like the Internet? Well, humans generally do what works and there are good and bad things with centralization and with a distributed redundancy strategy.
Now, what’s the last thing you ask? Well, there are two articles that I read no more than an hour after that meeting, while browsing the information, I had previously saved to write about this topic later; Marginally Useful: Bitcoin Itself May Fail As A Currency, But The Underlying Technology Is Starting To Suggest Valuable New Applications”, by Paul Ford (February 18, 2014) and note that this article was written just days before the break-in of Bitcoin from one of its main exchanges.
The other article was written by Naette Byrnes the day after those findings hit the media on February 25, 2014 “Bitcoin on the Hot Seat: Major bitcoin exchange shuts down, raising questions about cybercurrency” . Are you surprised? No, me neither.
The second article went on to say; “Tokyo-based Mt. Gox, once one of the largest exchanges for the cyber currency bitcoin, ceased operations on Tuesday amid rumors that millions may have been stolen from the company and growing concerns about the prospects for the future.” long term of unregulated digital currency Other bitcoin exchanges moved quickly to distance themselves from Mt. Gox and claim they were still open for business The value of the coin itself fell sharply to just over $500 by mid-afternoon It hit an all-time high of $1,100 in November.”
What do you say to that? Oh. Does this prove that the naysayers who called it a Ponzi scheme were right? Do they have the last laugh, or is it just an expected evolutionary process of interruption as all the problems are resolved? Well, consider this thought experiment I had.
Let’s say there was shenanigans involved, let’s say someone hacked the system or stole the digital currency. Right now the digital currency goes under the radar as it is not recognized even with all the new Too Big To Fail regulations on banks etc. How can a digital currency have value? Hard to say, how can fancy printed paper marked $20 be worth anything? It is not worth it, but it is worth what it represents if we all agree with it and trust the currency. What’s the difference, it’s a matter of trust, right?
Well, let’s say regulators, the FBI, or another branch of government interferes and files charges: if they file criminal charges that someone defrauded someone else, how much did they defraud? If the government justice and enforcement department puts a dollar amount number on that, they are inadvertently accepting that the digital currency is real and has a value, therefore acknowledging it. If they don’t get involved, then any fraud that may or may not have occurred sets the whole concept back, and the media will continue to reduce the trust of all digital or crypto currencies.
So it’s a catch-22 for the government, regulators and law enforcement people, and they can’t look the other way or deny this trend any longer. Is it time for regulations? Well, I personally hate regulation, but isn’t that how it usually starts? Once regulated, it lends credence to the concept, but its digital currency concept could also undermine the entire One World Currency strategy or even the US Dollar (Petro-Dollar) paradigm, and there could also be a lot to pay for it’s. Can the global economy handle that level of disruption? Stay tuned, I guess we’ll see.
In the meantime, what happens next will make or break this new shift in how we view monetary value, wealth, online transactions, and how the real world will mentally merge with our fuzzy future reality. I just don’t see a lot of people thinking here, but everyone should, one wrong move and we could all be in a world of pain, I mean all of humanity. Please consider all this and think about it.
