Bitcoin used in illegal drug deals in Sweden

Feb 10, 2014, 08:47 IST | Agencies

Bitcoin becomes a common medium of exchange in illegal drug deals in Sweden, a local media reported on Sunday

Stockholm: Bitcoin had become a common medium of exchange in illegal drug deals in Sweden, local media reported on Sunday.

A user scans a QR code on their smart phone, allowing bitcoins to be transferred into their digital wallet, while using the world's first bitcoin ATM at Waves Coffee House in Canada on October 29, 2013. Pic: AFP

Bitcoin was used by drug dealers in at least six transactions in Sweden in 2013. In several cases, the offenders completed the deals on internet, Xinhua quoted the Swedish Daily News(DN) in a report.

Four people were convicted for drug smuggling in Haparanda city of Sweden in December, when a large amount of Bitcoin, an electronic cash system first described by pseudonymous developer Satoshi Nakamoto in 2008, was found in the computer of the main suspect, involving around a 100 transactions.

The suspect has handled "half a million Swedish kronor (about $77,000)," Lindha Stromberg, a local prosecutor, was quoted as saying by DN.

Furthermore, Bitcoin used cryptography to control the transactions between the users and therefore the process was independent from banks or financial institutions.

However, Mats Henricson, president of Bitcoin Association, did not consider Bitcoin as a competitive alternative against cash or drug deals.

What is a Bitcoin?

Bitcoin is a peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous developer Satoshi Nakamoto.

It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of money.

Conventionally, "Bitcoin" capitalized refers to the technology and network whereas lowercase "bitcoins" refers to the currency itself.

Bitcoins are created by a process called mining, in which participants verify and record payments in exchange for transaction fees and newly minted bitcoins.

Users send and receive bitcoins using wallet software on a personal computer, mobile device, or a web application. Bitcoins can be obtained by mining or in exchange for products, services, or other currencies.

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