A hacker group has recently claimed that it has stolen Mitt
Romney’s tax returns. The files were allegedly obtained from the Tennessee
office of the big accounting firm, PricewaterhouseCooper, on August 25.
The hackers have threatened to make the files public on
September 28 — unless they are paid $1million in Bitcoins, the online currency.
Bitcoins are difficult to trace or identify.
Bitcoin is a decentralised digital currency. It is money that
can be transferred directly from one person to another on the Net, without
going through a bank or clearing house. It is the cheapest way to move money
around because you just have to pay a voluntary fee.
You can use them in every country, there are no prerequisites
or set limits and your account can never be frozen. Anybody can generate
Bitcoins on the Internet by running a free application called the Bitcoin
Miner.
Mining requires a certain amount of “work” for each block of
coins. The amount that is mined is automatically adjusted by the network so
that only a limited and predictable number of coins is generated. They are then
stored in your digital wallet.
When you transfer Bitcoins, an electronic signature is added.
Bitcoin verifies transactions with a state of the art encryption that is used
in military and government applications. After it is verified it is permanently
and anonymously stored in the network.
Bitcoin is open source. Unlike a normal bank, the Bitcoin
database is a decentralised database. No individual owns it. It is maintained
by a community of open source developers.
If the Bitcoin idea takes root, it will revolutionise
business on the Net and beyond it just the way Steve Jobs and Steve Wozniak
changed computing with their personal computers, or the web changed publishing.
Bitcoins have a checkered past. Where the Euro failed, it is
really conditioning people to a single world economy as well as currency. There
is still a lot of work to be done on it and many questions are unanswered.
For example who determines the mining work that is required
to make them? How secure is it? Wouldn’t it be easy to hack and manipulate
accounts if you are careless?
Even with all these questions, it has a devoted following
among libertarians and techies. Above all, trading in Bitcoins is becoming
popular even in India.
