Bitcoin called to testify before Senate committee

Nov. 12, 2013

A Bitcoin Foundation board member will testify about the future of virtual currencies in a Nov. 18 hearing by the Senate Homeland Security & Governmental Affairs Committee.

The hearing has been titled “Beyond Silk Road: Potential Risks, Threats and Promises of Virtual Currencies.” 

According to CU Times, the Senate committee said in August that there was a need to know more about the threats, risks and opportunities presented by virtual technologies such as Bitcoin, and it had been conducting interviews to learn more about the alt currency.

“The expansive nature of this emerging technology demands a holistic and whole-government approach in order to understand and provide a sensible regulatory framework for their existence,” committee members wrote in a letter.

One threat was underscored in a Nov. 7 article by Venture Beat about the Oct. 26 hacking theft from the Bitcoin exchange of 4,100 bitcoins valued at $1.2 million. powers a Bitcoin wallet service where owners can easily send and receive Bitcoin. It claimed to be the “most secure wallet ever created” and lists 20 different measures it takes to protect the Bitcoins, including bcrypted passwords (a special encryption form based on Bruce Schneier’s algorithm Blowfish), SSL encryption, location-based authorization, and a cold storage system.

However, these measures were not enough, and on Oct. 26, hackers compromised the supposedly secure wallets. ... was able to recover some of the Bitcoins, and customers are eligible for a partial refund. But beyond that, there is not much that can be done.

Read more about security.

Topics: Bitcoin , Regulatory Issues

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