PROTECTION AND WEALTH BUILDING STRATEGIES 229Bitcoin by terrorists.
The particular counter-threat techniques we discussed
cannot be disclosed because it would give an advantage to en-
emies of the U.S. But the session was an excellent opportunity
to consider just how far the crypto-currency community has
come in a relatively brief period.
So-called crypto-currencies such as Bitcoin have two main
features in common. The first is that they are not issued or
regulated by any central bank or single regulatory authority.
They are created in accordance with certain computer algo-
rithms and are issued and transferred through a distributed
processing network using open source code.
Any particular computer server hosting a crypto-currency
ledger or register could be destroyed, but the existence of the
currency would continue to reside on other servers all over
the world and could quickly be replicated. It is impossible
to destroy a crypto-currency by attacking any single node or
group of nodes.
The second feature in common is encryption, which gives
rise to the “crypto” part of the name. It is possible to observe
transactions taking place in the so-called block chain, which is
a master register of all currency units and transactions. But,
the identity of the transacting parties is hidden behind what
is believed to be an unbreakable code. Only the transacting
parties have the keys needed to decode the information in the
block chain in such a way as to obtain use and possession of
the currency.
This does not mean that crypto-currencies are fail-safe.
Large amounts of crypto-currency units have been lost by those
who entrusted them to certain unregulated Bitcoin “banks”
and “exchanges.” Others have been lost to old-fashioned fraud.
Some units have been lost because personal hardware holding
encryption keys or “digital wallets” has been destroyed. But on
the whole, the system works reasonably well and is growing