Pornhub Will Now Accept Verge Cryptocurrency
Credit to Author: Brian Barrett| Date: Tue, 17 Apr 2018 15:21:03 +0000
The adult website Pornhub has of late taken pride in being something of a pioneer. A year ago, it implemented HTTPS encryption, making it safer for users to click without being snooped on. Last fall, it introduced a suite of accessibility features for its blind and visually impaired users. And Tuesday, it began accepting Verge, a privacy-focused cryptocurrency
Pornhub is not by any stretch the first adult site to accept cryptocurrency. Dozens already do, as do mainstream companies like Microsoft, Overstock, and Expedia. But the significance of the move lies less in the marriage of cryptocurrency and pornography than it does in the legitimization of cryptocurrency as tender generally. After all, Pornhub’s not just the largest site of its kind. It’s one of the largest sites on the web, period.
Accepting Verge does have specific value to Pornhub users, of course. Not everyone wants their credit card statement to have mature content on it, even pseudonymously. And while Verge cryptocurrency isn’t an infallible cloak of invisibility, it does incorporate more anonymity tools than traditional tender.
“It’s an anonymous additional form of payment,” says Pornhub vice-president Corey Price. “Offering privacy-focused payment options is something we have been looking to do for a while.”
Pornhub's move is also notable because it chose to use Verge, a relatively unknown cryptocurrency, over cryptocurrency frontrunners like Bitcoin and Ether. It does, though, offer a few privacy-focused attributes that might make it particularly appealing to Pornhub clientele.
As for the specifics of how Verge offers that anonymity, it’s an open source project that leverages Tor, which hides your IP address by encrypting your traffic and bouncing it through a chain of computers around the world, and I2P, which differs in practice but offers the same broad strokes peer-to-peer routing. And using the so-called Wraith Protocol, Verge users can make either public or private blockchain transactions.
That last bit merits some unpacking, since that’s where the real privacy promises come into play. “Tor and I2P are great. The problem is if you’re using the public blockchain, you are leaving tracks that are completely traceable,” says Matthew Green, a cryptographer at Johns Hopkins University who is also affiliated with another privacy-focused cryptocurrency, Zcash. “Even if you connected through Tor, when you eventually cashed those coins in, people could track you.”
By putting some transactions on so-called stealth addresses, rather than the public blockchain, you can ostensibly cover your tracks. But you also expose yourself to some potential pitfalls.
“This may superficially hide the payment on the blockchain, e.g. you can donate to Wikipedia without being publicly seen on the blockchain to be donating to them,” says Emin Gün Sirer, a computer scientist at Cornell University who focuses on distributed systems. “But typically, what happens next is that the recipient groups transactions, either when organizing their wallet or when paying someone else, so the fact that you donated to Wikipedia becomes public anyway. Worse, there is nothing the sender can do to avoid this outcome.”
Green also notes that transactions on the private blockchain require a certain level of trust. “It could work well,” he says. “I guess you just wouldn’t know until something bad happened.”
Pornhub, along with several other major adult sites, is owned by a Luxembourg-based company called MindGeek; its sister sites Brazzers and Nutaku will accept Verge as well, with more to follow. But both they and their customers might want to brace themselves.
'Verge never offered a unique set of features not offered elsewhere.'
Emin Gün Sirer, Cornell University
Other companies, after all, have been burned by cryptocurrency before. Microsoft bowed out of bitcoin briefly in January, but reversed course a few days later. Payments startup Stripe began accepting bitcoin in 2015, only to drop it earlier this year, citing extreme volatility. Both moves followed a huge spike and subsequent drop, a pattern all too familiar to bitcoin observers. In December, a single bitcoin was worth nearly $20,000. Today, it’s closer to $8,000.
“Bitcoin has evolved to become better-suited to being an asset than being a means of exchange,” wrote Stripe CEO Tom Karlo at the time, appending a host of reasons for its transactional decline: slow confirmation times, high fees, and that seemingly never-ending roller coaster of value.
Verge, too, has seen a roughly 40 percent swing over the last week. And earlier this month, a vulnerability in its code apparently allowed an attacker to mine as many as 15 million coins, worth about $780,000, in the course of about three hours. The patch the Verge team pushed in response also appears to have had issues of its own.
“Other privacy coins supported stealth addresses already, and any cryptocurrency can already be operated on top of Tor,” says Sirer. “So, overall, Verge never offered a unique set of features not offered elsewhere.”
“There are inherent risks associated,” says Pornhub’s Price. “Nonetheless, we are excited to take this next step to keep current with our community’s payment preferences and offer them this viable alternative.”
And if customers take Pornhub up on the offer, that could help cryptocurrencies in general go more mainstream. “Transactions with crypto are no big deal now,” says Campbell Harvey, an economist at Duke University who studies blockchain technology, citing the big-name retailers who accept bitcoin.
The next step after offering a cryptocurrency payments system, though, is getting people to actually pay in cryptocurrency. “Bitcoin has been accepted, but nobody uses it,” says Johns Hopkins’ Green.
Which is where Pornhub might be able to make the most impact, not because of its content, but because of its scale. It’s the 32nd biggest site on the web, according to Alexa site rankings, putting it just behind Netflix and Twitch. Its customers are likely more motivated than others to seek anonymity online. As long as they’re clear-eyed about the potential downsides of Verge and other cryptocurrencies, they could help the new payment systems in general find a place in transactions, rather than being just an asset to collect.