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A group of hackers are asking Mitt Romney for $1M in Bitcoins. What are they and why do they matter?
Bitcoins are having their economic moment in the sun following an attempted shakedown of Mitt Romney.
On Wednesday night, an anonymous group of hackers announced they had obtained Mitt Romney's tax returns from the office of PriceWaterhouseCooper. The group released a statement on the filing sharing website Pastebin.com saying they would return the tax forms if Romney would pay a ransom of $1 million in Bitcoins by September 28.
The group added, "The deal is quite simple. Convert $1,000,000 USD to Bitcoins (Google if if you need a lesson on what Bitcoin is) using the various markets available out in the world for buying. Transfer the Bitcoins gathered to the Bitcoin address listed below. It does not matter if small amounts or one large amount is transferred, as long as the final value of the Bitcoins is equal to $1,000,000 USD at the time when it is finished. The keys to unlock the data will be purged and what ever is inside the documents will remain a secret forever."
While many were busy figuring out the authenticity of the claim, others were off buying Bitcoins, helping the online currency's worth to skyrocket.
According to VentureBeat, the value of Bitcoins spiked about 6 percent on Wednesday, from $10.40 per Bitcoin to about $11 per Bitcoin at the end of the day.
What makes the Internet currency of choice so special?
According to Bitcoin.org, "Bitcoin is an experimental new digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network."
But Bitcoins' real value may be that they can be anonymously transferred and can be sold or transferred for real cash any time.
AmericanBanker noted one website that exclusively uses Bitcoins for its less-than-legal practices.
Silk Road is known to many as the Craigslist of illegal drugs. It doesn't even appear on Google. People can only access the website through a special browser, and even then they probably need a degree in computing to figure it out.
AmericanBanker reported that with every transaction, Silk Road uses a "mixing system" in which Bitcoins are sent between a number of addresses to provide a greater degree of anonymity. "Numerous such services exist, and nothing within Bitcoin itself prevents users from creating elaborate transactions that effectively mix dirty coins with clean ones."
In other words, they are money laundering, which is exactly what Romney's tax thiefs would do in order to stay off the grid.
This morning PricewaterhouseCooper made it clear that it is pursuing the matter with the help of the Secret Service.