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Meet the world's most powerful bitcoin backers

By James Stafford - posted Wednesday, 6 December 2017


"The ethos behind blockchain has been tested," Ken Sangha, COO of Open Money and the Open Project in San Francisco, told Forbes. "A central, organized and powerful authority -- China -- said 'no' and we all have been tested worldwide because of it. But the system flexed its muscles. It's doing what it was supposed to do."

And its muscles are the envy of tangible currencies everywhere. Bitcoin hit a record $6,000 per coin on 21 October. Naysayers came out of the woodwork to say it couldn't possibly last, and definitely couldn't go any higher. Wrong again. By the last week of November it was approaching $10,000 a coin.

Threats and Opportunities

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The potential security threats are clear and present, but let's put things like new avenues of terrorism funding into perspective.

At this point, terrorist groups are certainly eyeing their options with cryptocurrency, and testing the waters. In January, we saw what appears to be the first case, with the Indonesian government claiming that members of the Islamic State were transferring Bitcoin to each other.

Terrorists could create a virtual currency that is even more powerful and untraceable - one that can completely bypass the global banking system. It hasn't happened yet, but the potential is there.

While terrorist groups may be mildly courting cryptocurrency, it's not widespread. Speaking to Newsweek, the Rand Corp's Joshua Baron, a cryptographer and mathematician, says he doesn't really see Bitcoin as the "go-to currency for terrorists"-yet. "It does not offer enough anonymity."

While terrorism is a threat to the security of all states, another threat to the US is an opportunity for Russia: sanctions busting.

The rise of digital currency means that Russian officials sanctioned by the US and the European Union have a way to send and receive money.

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While the US Treasury's Terrorism and Financial Intelligence unit puts sanctioned individuals on a blacklist that keeps them from doing any business in US dollars, cryptocurrency, which isn't backed or controlled by any state, makes it possible to bypass the blacklist.

But even this pales in comparison to the bigger story here: Bitcoin and its fellow cryptocurrencies are challenging the foundations of the global banking system.

Disruption of the global banking system at this point is "inevitable", Bala Venkataraman, global chief technology officer of banking and capital markets for Computer Sciences Corp, whose sister company runs the IT backbone of the National Security Agency (NSA), told Newsweek.

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This article was first on OilPrice.com.



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About the Author

James Stafford is the publisher of OilPrice.com.

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