In a move reminiscent of that time WikiLeaks had all donation methods shut down (except for bitcoin, of course), United States Senator Patrick Leahy (D-VT), who previously wrote & sponsored legislation that would enable China-style web censorship in the United States, applied just a bit of senatorial muscle to Visa & Mastercard (who in turn leaned on PayPal) to effectively block all legacy payments to one of the world’s largest cloud storage providers, New-Zealand based Mega.
TorrentFreak writes: “While many of the sites covered [in a report about “shadowy cyberlockers”] might at best be considered dubious, the inclusion of Mega.co.nz – the most scrutinized file-hosting startup in history – was a real head scratcher. Mega conforms with all relevant laws and responds quickly whenever content owners need something removed. By any standard the company lives up to the requirements of the DMCA.”
So what’s the issue then, if Mega complies with legal requests to remove copyrighted content? The problem, according to occasional Batman actor Leahy, is that Mega encrypts all files uploaded to it in a way that not even Mega can view them; meaning that users have the ability to store copyrighted content that may or may not have been legitimately obtained. Leahy, who has received nearly half a million dollars in political contributions from the film, TV, and music industries in the last five years alone, seems to take issue with the fact that the powers that be are, well, powerless to snoop a user’s private files and discover whether or not they are hosting the intellectual property of others before they distribute the link. Leahy is essentially disagreeing that people deserve to be secure in their persons and papers… and all this for a company that is not even based in the United States.
This is, as one Reddit commenter put it, like kicking a hornet’s nest. Mega has more than fifteen million customers around the world, many of them presumably using the site precisely because of it’s unique end-to-end file encryption feature*. Mega has been accepting bitcoin since 2013, but in an excellent real world example of the cryptocurrency’s durability, the only way left to purchase services from Mega is using BTC. The ever-flamboyant founder of the site, Kim Dotcom tweeted “Let’s give Bitcoin a boost 🙂 #Mega” shortly after PayPal dropped them and immediately before the bitcoin price received an actual boost [see the price spike on the 27th above]. A mainstream site that accepts only bitcoin is a pretty exciting prospect!
* Before anyone pulls the ol’ “if you don’t have anything to hide…” card, file encryption is beneficial for a number of reasons. Check out this great TED talk about why privacy matters. And if you want to look at the numbers, 99.7% of files stored on Mega are less than 20MB in size (i.e., way too small to be films or TV shows).
MO’ FIAT MO’ PROBLEMS
Somalians living in the United States have lost their primary avenue of remitting money back home. I think it’s unlikely that bitcoin swoops to the rescue in this case, as there is very little bitcoin infrastructure for money receivers to convert BTC to local currency in Somalia, but perhaps this event poses an opportunity for someone to develop a bitcoin solution for this particular remittance corridor.
Things aren’t looking so good for Venezuela right now: With inflation soaring to a rate of 68 percent, the Venezuelan authorities are seeking to manage the economic crisis with a complex web of three official exchange rates. For instance, some basic goods are imported at rates of 6.3 and 12 bolívars to the dollar, but a new floating rate of about 171 was introduced last week, effectively reflecting a devaluation of nearly 70 percent.
“In what has been dubbed the “SwissLeaks” case, serious allegations have been made against the Swiss division of British-based banking giant HSBC. The bank is accused of systematic involvement in tax evasion and money laundering to the tune of more than 100 billion euros. Jan Fritsche discusses how the tax evasion and money laundering practices worked.” DW
+ In contrast to HSBC’s long and storied history of helping criminals launder billions of dollars and getting away with slap on the wrist fines, here’s what happens when a normal person attempts to launder small-time money: men with guns drawn will kick down your front door and arrest you.
J.P. Morgan Chase & Co. is preparing to charge large institutional customers for some deposits, citing new rules that make holding money for the clients too costly, according to a memo reviewed by The Wall Street Journal and people familiar with the plan. MarketWatch
Tim Draper’s son, Adam, had his bank account hacked and a $50,000 wire sent to the hacker. Surprise surprise, once the money left his bank’s hands (Wells Fargo), he was pretty much screwed as far as getting it back goes.
The ECB is set to kick off a new round of quantitative easing, to the tune of more than a trillion euros.
This is not your father’s “Got Milk” ad campaign: A consortium of bitcoin insiders, including the Bitcoin Foundation, BitFury, BitGo and Tally Capital, hired avante garde ad agency TheAudience to rebuild the currency’s reputation among the general public. WSJ BitBeat
Japanese e-commerce giant Rakuten founder & CEO Hiroshi Mikitani said at a conference in Tokyo that the company is “thinking about” and “probably will” accept bitcoin payments in the future. Rakuten Super Logistics U.S., an American subsidiary of the company, already accepts bitcoin, but the parent company is the largest online retailer in Japan and ranks among the largest in the world by sales. WSJ
Ecuador has begun issuing new “digital dollars”… essentially a state-issued digital currency. The same bill that authorized the creation of the centrally-controlled funbux also banned bitcoin and other digital currencies. In a country with a nearly ten percent illiteracy rate, and fifteen million people, only 8,000 have bothered to sign up for the new currency.
RE/MAX London has partnered with GoCoin to accept bitcoin for property rentals.
BITS & PIECES
Ryan Kennedy, also known as Alex Green, who previously absconded with more than three thousand bitcoins from an exchange he was running, was arrested and held briefly in the United Kingdom earlier this week in relation to the case.
Same day wire transfers are now available on Coinbase.
+ Coinbase also published these comments on the latest BitLicense revision.
TAILS, the secure variant of Linux favored by privacy advocates around the world, now comes pre-packaged with the Electrum bitcoin wallet.
Here is lecture #2 from Princeton’s bitcoin class on YouTube.
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