Bitcoin looses $500M, 21st century turns out to be terrifying

Bitcoin-deal

Last week I made mention of the disappearance of Mt.Gox, the world’s largest Bitcoin Exchange. On that day it seemed that nobody knew what had happened, except that it had simply disappeared. When it did reappear it had been the apparent victim of a cyber attack that ultimately resulted in the theft of 740,000 bitcoins, worth close to $500M USD and led to the company’s bankruptcy. Since then a great deal of ink has been spilled on the story, and you can read some great reporting on it here, here, and here. But guess what? The fun is just getting started, as the CBC has reported today that another$ 600,000 USD were stolen from Flexcoin, another exchange that has been hacked.

I’m going to let other people smarter than me argue over the future of Bitcoin. The real issue of the Bitcoin thefts is how terribly exposed we all are when it comes to our online security and privacy.

Quite regularly we tend to dismiss the digital world as not being as important as the real one, but in many ways we are far more vulnerable and know a great deal less about what is happening on computers and through the internet. Criminals, governments and corporations are all equally interested in what we do online, and billions of dollars are being spent on trying to learn, understand and steal aspects about ourselves.

The rise of Bitcoin and its subsequent thefts have merely shown how easy it is to steal millions of dollars without leaving your couch. For those of us that would dismiss this as the concern of enthusiastic tech heads, I would point to the growing body of news and statistics that show that we all have a web presence that is constantly being monitored and mined for information. For instance:

Don’t get me wrong, I don’t want you living in fear. However the reality is that our highly interconnected world has commoditized you. We willingly provide mountains of data about ourselves for free because we assume it isn’t valuable to anyone else. But it turns out that where you live, where you eat, what products you buy, how often you visit certain locations and your general personal details all have a dollar value. But we don’t talk or act like they do. It doesn’t help that when companies or governments get caught snooping through what we have assumed are the decidedly unimportant bits of our lives that they tell us that it’s no big deal.

This would all be different if we understood that our information had a price. You could choose to sell it, or choose to improve your privacy. Legislators could pass laws to make privacy statements clearer and give control back to citizens about what companies and governments seek to know. You could receive fair value for information about yourself, and you could pay for additional privacy features that protected you from hackers as well as other private interests.

The genie is out of the bottle, and I predict that in the future the market for online privacy will grow as we become increasingly exposed to electronic risk. Until then I think I can recommend a new smart phone:

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