Bitcoin's Evolving E-Commerce and Security in the Cloud Environment

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Bitcoin: Bitcoins Evolving E-Commerce & Security in the Cloud Environment

Derek Shamberger
Managerial Applications of Information Technology
DeVry University, Keller Graduate School of Management
June 14, 2014

Abstract:     
Bitcoin is digital currency, new to old regimes of banking but recognized by various organizations for its high liquid properties. The currency is not respected by any government and yet through peer-to-peer networking the currency holds integrity. It is not exchangeable for commodities as gold to include the federal securities counsels will not furnish Bitcoin as legal. Numerous organizations receive anonymous contributions to their causes such as Wikileaks; adding more chaos to whether the currency is funding terrorism or constructed to meet the needs of a flourishing global economy. This paper touches on relevant subjects as the users, Bitcoins decentralization, and the technology required making it a new standard in the banking community.

1. Abstract …………………………………………………………………………pg. 1 2. Table of Contents………………………………………………………………pg. 2 3. Background……………………………………………………………………..pg. 3 4. Business problem(s)…………………………………………………………...pg. 3 5. High level solution…………………………………………………………….. pg. 4 6. Benefits of solving the problem……………………………………………….pg. 5 7. Business/technical approach…………………………………………………pg. 6 8. Business process changes……………………………………………………pg. 6 9. Technology or business practices used to augment the solution…………pg. 7 10. Conclusions and overall recommendations…………………………………pg. 8 11. High-level implementation plan………………………………………………pg. 9 12. Summary of project…………………………………………………………….pg. 11 13. References…………………………………………………………………….. pg. 12

Background
Bitcoin, a digital currency that utilizes P2P technology, and functions with no central authority has become a global intermediary in the e-commerce arena. BitPay through Bitcoin has helped a staggering 10,000 merchants across the world accept payments. In North America 50% of the merchants use BitPay, 25% from the EU as well as countless others internationally. Merchants using the payment service provider makeup over 90% of the ecommerce businesses, and blogging platforms such as WordPress are among BitPay clients. Bill Gates calls this innovation a "technological tour de force." The BitPay service consist of various tools called Bitcoin wallets designed to conduct and transact with other users. With apps for Android, Windows, Max, and Linux, owners are able to send, receive and check their balance with a click of a button. Unfortunately numerous exchanges through this technologic service suffered security breaches and to this day Bitcoin still does not offer adequate insurance as a bank can. Furthermore, a two-factor authentication is recommended for added security and a new a Bitcoin initiative called the Bitcoin payment message (BPM) specification will start in June 2014. The Business problem(s)

The problem is security. Though Bitcoin transactions are more secure than various e-commerce ventures; Bitcoin is attempting to produce more user friendly applications, opening the door to hacker advantages. Concerns stem from enthusiastically produced addresses that can come from computers compromised by an attacker, who could eventually change that address to one they will govern. This carries some significant drawbacks. Mike Hearn a core contributor to Bitcoin states, “Addresses “lead to privacy leaks, they are inflexible and tough to extend with new features, they aren’t authenticated and they’re one-way only.” The organization has numerous customer complaints stemming from an unresponsive network, not being user friendly, and security glitches leaving the consumer uncomfortable about their transactions. The Bitcoin system currently requires all outputs to become exhausted through conducting transaction inputs. These outputs cannot prompt the exact amount leaving the need for a change addresses for...
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