Next on the Recording Industry's Hit List: Bitcoin

The copyright cops at the RIAA have released this year's list of "notorious websites" for the US government to chase in the name of preventing piracy. The usual suspects are all there—torrenting sites like the Pirate Bay, cyberlockers overseas and so on. But this year there's a new kid on the block that's caught the recording industry's suspicious eye: bitcoin.

RIAA executive vice president Neil Turkewitz released a statement last week detailing web businesses that are either directly infringing copyright or "profit from facilitating such theft." Bitcoin, the trade group contends, falls into the latter category.

"While there may be a wide range of services dedicated to theft, they share one common effect—they unfairly deny creators the opportunity to generate revenue from the commercial use of their works," Turkewitz wrote.

The group claims that crypto-currency is helping keep the Pirate Bay afloat by allowing users to covertly donate funds to the website. Bitcoin's peer-to-peer payment system is anonymous and decentralized, making it much harder for law enforcement to seize the cryto-funds that fans send to the site—or to trace those donations back to a real person.

“In April 2013, the site started accepting donations from the public by Bitcoin, a digital currency, which operates using peer-to-peer technology,” wrote Turkewitz. “There is no central authority or banks involved which makes it very difficult to seize or trade Bitcoin funds. In May 2013, the site also started accepting Litecoin, another peer-to-peer based internet currency.”

In its 10 years in business, the popular BitTorrent site has funded its operation by selling banner ads. But this April, it opened up the door to user donations, provided they were made through digital currencies. But while bitcoin has always been a popular choice for sub-legal online transactions, it's hardly a fail-safe option. Though users adopt pseudonyms to protect their real identity, all transactions are freely available for anyone to see via Blockchain, the cryto-currency's public ledger.

TorrentFreak took a look at the Pirate Bay's bitcoin wallet and breaks it down:

In total, TPB has raised close to 100 Bitcoins spread over two addresses, which is roughly $20,000 at the current exchange rate. A quick look at the current wallet shows that The Pirate Bay received 64 Bitcoins which were all spent elsewhere.

Most recently 8.97 Bitcoins were spent on a fundraiser for a public audit of the open source encryption software TrueCrypt. Before that, part of the donations were spent on a charity rally from Dover to Mongolia. Of course, Bitcoin addresses can also be used anonymously so it’s not always possible to identify or trace the recipients.

Despite its almost comical and utterly futile efforts, the RIAA has failed to get the Pirate Bay shut down. The site's founders were arrested just over a year ago on charges of copyright infringement, but the Swedish downloading haven continues to operate, and no one knows who's now running the show. The RIAA did however take a bow in its 2013 list of notorious websites for shutting down a major target on last year's list, Kim Dotcom's Megaupload.

Isn't the RIAA tired of fighting the same tired fight? Since Napster exploded all over the music industry some 15 years ago, the lobbyist group has been playing whack-a-mole with peer-to-peer downloading sites. Now again, it looks like the group is approaching the latest much-hyped technology with distrust, instead of embracing how virtual currency could boost and help redefine the music industry in the digital age.