In 2010, when WikiLeaks was considering using Bitcoin as a means to get around the US banking blockade which had seen its Paypal account frozen and its other avenues of funding blockaded as well, the group began considering Bitcoin as a way to keep funding flowing.
Bitcoin’s History of Aiding Groups Abandoned by Traditional Payment Processors
Satoshi Nakamoto himself was still active at that time, and he was very much opposed to the idea of his creation being associated with a group that had gotten itself into so much trouble in such a short time. “It would have been nice to get this attention in any other context. WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us,” he wrote. WikiLeaks ended up waiting quite some time to institute Bitcoin donations, and by then the currency was widespread enough that any negative impact was diluted by positive reception.
One of the strengths of Bitcoin is that it can be used anywhere in the world, regardless of existing financial infrastructure or draconian barriers. Kim Dotcom, the embattled founder of Mega (the encrypted file transfer service that Dotcom currently derives no financial benefit from), appears to be considering Bitcoin for these very reasons.
Paypal Ends its Relationship with Mega
Mega has used PayPal since its inception, and as a registered, legal business that for ethical reasons is not able to inspect the contents of its user accounts, provided hundreds of thousands in fees for PayPal over time. But now PayPal has folded under pressure (according to Mega) from Vermont Senator Patrick Leahy and the Visa/Mastercard cartel. Mega’s blog elaborated:
MEGA is aware of a report published by NetNames (partially funded from the MPAA supported Digital Citizens Alliance) that incorrectly claims MEGA’s business to not be a legitimate cloud storage service. MEGA is aware that Senator Leahy (Vermont, Chair Senate Judiciary Committee) then pressured Visa and MasterCard to cease providing payment services to the companies named in that report.
The report referenced characterizes Mega as being a “download locker” and lists it among sites that have expressly more nefarious purposes than the new incarnation of Mega. This is in spite of the fact that Mega expressly forbids its users from engaging in copyright infringement, and in its terms and conditions states that it has the right to respond to alleged copyright infringement. In talks with Paypal, Mega was told that that “unknowability” of what was being stored on their servers was a deal-breaker. Nevermind that numerous other services that Paypal continues to service use similar encryption schemes, apparently.
The report was the basis for the chain reaction of pressure that led to Mega’s Paypal relationship with Paypal being ended, but, again, Mega has done its best to comply with the law since its inception. From section 17 of Mega’s terms of service:
You can’t use our website or a service, including, without limitation, any communication tools available through the website, or any forum, chat room or message centre that we provide to store, use, download, upload or otherwise transmit, data in violation of any law (including to breach copyright or other intellectual property held by us or anyone else).
The suspension of payment processing by Paypal led Kim Dotcom to post about Bitcoin on Twitter.
What about Megacoin?
Megacoin was released in the latter half of 2013, with many believing that it was related to Kim Dotcom and his businesses. Such a connection has never been confirmed or denied, but as long as they’re looking at integrating Bitcoin, they may as well consider Megacoin. Why? Well, it’s perfectly branded to work for Mega. Everything about it goes in line with the design and tone of Mega. It’s also cheaper for users to get their hands on, selling for roughly 5000 Satoshi each at time of writing.
Megacoin has recently experienced a renewed development effort and rebranding strategy. It has had an active mining community since its inception. It would be interesting indeed if Mega were the first major company to directly accept Mega, and may spark a rise in price.
For now, users who want to purchase new Mega subscriptions will have to go through resellers who must go through other channels to deliver the funds to Mega. One thing is for sure: there will be no shutting down Bitcoin when and if they integrate it.