April 25, 2014

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Are User Identification Networks the Future of Commercial Bitcoin Transactions?

With 12.3 million bitcoins mined to date, the total value of bitcoins has reached $9.975 billion US dollars. While this may pale in comparison to the $1.23 trillion US dollars in circulation, the use of bitcoins in commerce is gaining traction.  With this traction the potential exists to link users’ identities with their public bitcoin wallet addresses and commercial transaction histories.

Earlier this year Overstock.com announced that it would begin accepting bitcoins as payment for consumer purchases. The company’s announcement makes Overstock.com the first major US online retailer to accept bitcoins, albeit via a third-party payment processor. Prior to this announcement, a patchwork of smaller online vendors and brick-and-mortar stores had already begun accepting bitcoins. Using bitcoins, individuals are now able to order food for delivery, engage in online dating , and purchase everything from babyfood to videogame consoles.

As bitcoins enter the stream of commerce, we should all consider the privacy implications associated with the use of bitcoins in commercial transactions.   [Read more...]