BITCOIN IS BEING MONITORED BY AN INCREASINGLY WARY US GOVERNMENT

DATE: 15/12/2016
AUTHOR: Leah McGrath Goodman
SOURCE: NEWSWEEK


This suits bitcoin users just fine. They want a secure way to exchange money by laptop, mobile phone or email. Yet so do terrorists and criminals, whom the U.S. government worries might develop and deploy their own uncrackable virtual currencies. Newsweek has learned hundreds of experts inside the nation’s defense and intelligence agencies, as well as private-sector researchers in finance, technology and various think tanks across the country—some of them under contract with the U.S. government—are now investigating how virtual currencies could undermine America’s long-standing ability to disrupt the financial networks of its foes and even permanently upend parts of the global financial system.


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The biggest concern the U.S. has about virtual currencies, Zarate says, is that terrorists and other enemies might create one so powerful and so untrackable, that they’ll no longer need the global banking system, which the U.S. uses to financially starve them. This has yet to happen, but America’s defense and intelligence agencies are already trying to figure out how they might infiltrate or block such a malicious financial network.


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The implications of bitcoin and potentially more threatening copycat virtual currencies go well beyond terrorism. Bitcoin’s unique and widely accessible technology challenges the very bedrock of the global banking system. Blockchain, the digital record-keeping apparatus at the heart of the cryptocurrency, is used to generate, circulate and track bitcoins through computers within a global network that not only verify and record every transaction, but also check each other’s work. This decentralized way of doing business also can be used for countless other applications, prompting an estimated $1 billion of investments in the technology in 2016. Stock exchanges like Nasdaq and financial firms like Visa, for instance, are experimenting with Blockchain technology to replace slower, more expensive third-party record-keeping systems.

READ THE WHOLE ARTICLE @ http://europe.newsweek.com/virtual-currencies-bitcoin-being-monitored-us-government-532063