In a cooperative investigation with multinational consulting firm Deloitte, the European Union Intellectual Property Office (EUIPO) recently discovered that anonymity technologies including Bitcoin and Tor are encouraging infringement of property and illegal reproduction of content.
After a so-called thorough analysis on 25 different infringing business models, EUIPO Executive Director Antonio Campinos claimed that Tor and Bitcoin are providing online criminals and their customers an infrastructure that is undetected from the authorities.
“[infringement] more and more relies on new encrypted technologies like the TOR browser and the bitcoin virtual currency, which are employed by infringers of IPR to generate income and hide the proceeds of crime from the authorities,” said Campinos.
Campinos further continued by stating the obvious, clarifying that the advancement in anonymity technologies and the increasing usage of dark marketplaces are contributing to societal and economical problems surrounding pirated content and infringed rights.
“The revenue sources of the IPR-infringing business models are to a large extent the same as for non-infringing business models and consist of direct revenue sources such as sales revenue, subscription fees and donations, or indirect revenue sources such as pay-per click or advertisement fees. Payment options often include traditional bank transfer and credit card payment, but increasingly also include payments in virtual currencies (mainly Bitcoins),” reads a section of the research paper.
The EUIPO is concerned about the increase in popularity of bitcoin in this market because of freedom of transaction the digital currency provides to both consumers and sellers.`Since government agencies can track down traditional forms of payments including bank transfer and Western Union transactions but is unable to trace digital currency transactions, the organization is claiming that Bitcoin and other anonymity technologies are negatively affecting various content-focused markets.
However, the EUIPO failed to understand and analyze the underlying problem of cash and bank transfers. Bitcoin by nature is not an anonymous digital currency. By utilizing the distribued ledger technology, it is possible to find the origin of transactions. In contrary, cash is a completely anonymous form of money because organizations and governments cannot analyze the source or origin of cash-based transfers.
The real issue with the claims of EUIPO doesn’t have much to do with the anonymity factor as it states in their research. The actual problem is, the EUIPO and other government agencies are fantasizing about the “real-life” setbacks bitcoin apparently brings despite cash and bank transfers being the source of 97% of illicit trading and purchases of pirated content.