Bitcoin in the Headlines: Child Porn and Price Disregard

Bitcoin in the Headlines is a weekly look at bitcoin news, analysing media and its impact. 

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Whils last week’s reporting was heavily US-focused, the coverage this week was more far reaching, with outlets from India and Russia mentioning bitcoin – even if in a negative light.

Indeed the biggest lightning rod of interest this week was perhaps bitcoin’s alleged propensity for enabling illicit activities, with the use of the payment method in online child pornography transactions capturing the lion’s share of the media’s headlines.

Interestingly this focus, however, did deflect from other negative coverage.

For example, bitcoin’s relative price drop – usually a hot topic among the mainstream press – went mostly unnoticed.

Child porn for bitcoin

Allegations that paedophiles are now buying sexually abusive imagery on the web first surfaced this week following the release of the Internet Watch Foundation’s annual report.

Unsurprisingly, it did not take long for the media to seize the opportunity to report on the link between the disruptive digital currency and the horrendous activities carried out by some alleged bitcoin users.

A Google news search with the terms “paedophiles and bitcoin” brought up more than 80 results, significantly less than previous stories highlighted in this series, but still this week’s most widely covered topic.

In his Guardian piece “Paedophiles sell child abuse images for bitcoin”, Alex Hern commented on how the digital currency’s inherent characteristics make it a suitable tool for illicit activity.

Hern said:

“Bitcoin has a number of properties which make it well suited for trading illegal material such as child sex abuse images. The cryptocurrency is completely decentralised, which means that no single authority can prevent trades from being made, or blacklist buyers and sellers.”

The Metro‘s Harry Redhead, finished his piece on a questionable conclusion:

“Bitcoin is notoriously hard to trace as all transactions are encrypted. There have been a number of reports linking its use to illegal activity.”

Not entirely the case, as evidenced by recent investigations and convictions carried out by various law enforcement agencies, which proved just how traceable bitcoin transactions can be. Hern agreed, noting that while the currency is often described as anonymous and untraceable, “there are a number of elements to its design which law enforcement authorities have been able to use to track down people attempting to use bitcoin illegally”.

The Guardian‘s journalist goes one step further, adding:

“The decentralised nature of the currency means that every single transaction is made public, and in order to convert bitcoins into a controversial currency, they must typically be bought and sold through a bitcoin exchange. Those exchanges are often legally required to keep detailed records on customers, in order to comply with money-laundering regulations.”

Interestingly, the news also caught the attention of The Times of India and Russian outlet MK-London, although both fell somewhat short in their coverage, as they perhaps mischaracterized the fact that bitcoin was easily used to embark in illicit activities.

Sky News pointed out that bitcoin was not without controversy, adding that “there have been numerous reports of it being used for illegal activity”.

Price fails to capture

Bitcoin’s price has previously managed to capture a sizeable amount of the media’s attention, especially when it declines.

In January, the price of bitcoin dropped from $224 to around $175 (a decline of approximately 22%) in just a matter of hours, before rebounding again.

At the time, the decline in value sent shockwaves that spread far beyond the bitcoin community. The New York Times spoke of a possible market squeeze.

FT Alphaville‘s report, on the other hand, read like a bitcoin obituary and The Sydney Morning Herald described bitcoin’s entry into 2015 as “appalling,” claiming that the currency appeared to be in free fall.

According to CoinDesk’s bitcoin price index, the price of bitcoin dropped from $236 last Friday to $216 on Tuesday this week, reaching its second lowest value since January this year.

coindesk-bpi-chart
CoinDesk Bitcoin Price Index.

Despite many commentators, such as the The Wall Street Journal‘s Michael Casey previously saying that bitcoin’s price doesn’t matter, the truth is that the digital currency’s value has been hotly debated topic among the media.

It seems that, at least for now, mainstream journalists left the reporting on the price to the bitcoin press, though even here it was greeted with a lukewarm response.

As for whether this marks any change in how media outlets will potentially report on future declines, however, remains to be seen.

Newspaper image via Shutterstock.

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