It was discovered this month that the United States Department of Defense’s Combatting Terrorism Technical Support Office (CTTSO) will soon be launching a program to study the peer-to-peer decentralized currency bitcoin in order to assist the military in its quest to enhance national security efforts.
For a couple of years now, governments, central banks and law enforcement officials have regularly warned about how bitcoin poses threats and risks because it could be used for money laundering and terrorism financing. Although the argument has been contradicted, there are still concerns in the international community.
According to one bitcoin expert from Sweden, it isn’t as simple as all that. In fact, it’s the opposite.
For instance, the blockchain is an accounting-style public ledger that can be viewed by all, though it never reveals the names and identities of the parties involved. This wouldn’t be an advantage for criminals, terrorists and culprits affiliated with illicit transactions who want to remain unknown.
“The transparency of the bitcoin ledger in combination with the difficulty of moving crypto currencies into the fiat economy and vice versa makes it a less than ideal way to perform these type of activities,” stated Schuil. “Let’s not forget that the Silkroad market and most of its copycats have all been shut down. With Bitcoin there is pseudonymity as opposed to anonymity, a crucial difference easily overlooked and often ignored, even by the criminals that try to take advantage of this innovative technology.”
Many proponents of the cryptocurrency industry often pontificate that bitcoin will be as immense as the Internet – others point to it as a viable currency, while others make the point of celebrating its technology breakthroughs.
If the governments of the world want to impose regulations then the bitcoin community should embrace it, according to Schuil.
“From the point of view of the Department of Defense I think it is only healthy to assess the potential threat of a technological phenomenon of this magnitude,” said Schuil. “We live in a world where cyber wars are no longer fiction and Bitcoin could be as big as the Internet, I would be more concerned if the authorities would sit back and relax. At Safello we embrace regulation to promote the technology and eradicate those negative elements from the equation that can hinder its adoption timeline. Hence we see this as a positive sign.”
Aside from New York, there are some states that are mulling imposing regulations on virtual currency. In the last month or so, several states have issued consumer and investor alerts or advisories warning about the dangers of investing in bitcoin.
The CTTSO will also be assessing a wide range of other topics for terrorism research, such as Android, Motorola, social media and virtual reality.