Is Bitcoin the New Napster of Digital Money?

This isn’t a rhetorical question. Last month, the total value of all Bitcoins passed $1 billion. That isn’t a typo. Bitcoin has been trading up compared to traditional currencies, north of $100 lately, and poised to go higher. That’s 10 times what it was trading just a few months ago.

Bitcoin LogoIf you’re looking for a good overview of Bitcoin, try this piece in GigaOm by David Mayer. He covers the underlying peer-to-peer technology, and why it isn’t all that important whether it succeeds or fails (hence the Napster reference). As he says, it’s the first currency, real or virtual, that removes a trusted third party — namely a bank — from all of its transactions.

Yes, a lot of Bitcoin is being spent on illegal drugs and gambling and other seedy things, but a lot of cash is, too. And this quarter, the Bitcoin mining botnet ZeroAccess was the No. 1 threat as reported by Fortinet from examining their firewall access logs. They claim that they’re seeing “100,000 new infections per week and almost 3 million unique IP addresses reporting infections. It’s estimated that ZeroAccess may be generating its owners up to $100,000 per day in fraudulent advertising revenue alone.”

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