Keep the news coming 
Will surly do
Also i will be doing this in much better format, with category's and all sorts of things. This is just a beta 
. Tnx guys for ur support.
Topic: BITCOIN NEWS EVRYDAY! From multiple sources. - page 25. (Read 51244 times)
Will surly do
Also i will be doing this in much better format, with category's and all sorts of things. This is just a beta . Tnx guys for ur support.
good idea
Keep the news coming
Turmoil in Ukraine Shows Bitcoin’s Potential as a Global Currency
Kyle Torpey 21/02/2014
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/ukraineATMs-300x224.jpeg
The current political and economic environment in Ukraine has led to credit downgrades for local banks, a currency devaluation, capital controls, and ATMs running out of cash. Before this article continues there is one thing that needs to be mentioned: Bitcoin users not affected. While Bitcoin obviously couldn’t help when it comes to preventing the violence currently taking place on the streets of Kiev, it at least helps people who want to protect their wealth in times of political uncertainty. Bitcoin still needs to get through some problems of its own when it comes to stability, but the current events in Ukraine can be used as a case study for why cryptocurrency is so important to the entire world.
A Political Crisis Leads to a Currency Crisis
The hryvnia has already declined more than 10% against the US dollar since November, and Tim Ash from Standard Bank believes this trend could continue over the next few months. He was recently interviewed by Reuters, and he claimed that it could soon take 11 hryvni to equal 1 dollar. In a situation where Ukraine is not able to get more economic assistance from the international community, Ash believes we could see a situation where it takes 15 hryvni to buy 1 dollar. Although this kind of currency crisis currently leads to a thriving black market in dollars and euros, it could be bitcoins that become the more practical safe haven for people in the future.
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/ukrainedollarchart.png
hryvnia dollar chart bitcoin
The hryvnia has declined against the US dollar. Chart via XE.com.
In a future where bitcoins are a widely-used international currency, citizens of a country experiencing political turmoil would not need to worry about the devaluation of their local currency. People holding hryvni in their Ukrainian bank accounts or in the form of cash under their mattresses have basically been robbed of 10% of their savings since November. If some predictions turn out to be true, they could be losing close to 50% of their savings as a solution for government debt is not found. If bitcoins were able to reach a stable price, the Ukrainian people would not have to watch their savings disappear as a political uprising slowed down economic activity in the surrounding areas.
Bank Downgrades and Empty ATMs Don’t Affect Bitcoin Users
Various banks in Ukraine have been downgraded by Fitch and Moody’s over the past few months, and these downgrades are due to these banks’ exposure to Ukrainian government bonds. Ukraine could be headed towards a bank bailout or bail-in situation, and either “solution” should be viewed as a lose for the Ukrainian people. If the government defaults on its debts, then most bank depositors in Ukraine will need to take a “haircut“.
Residents of Kiev are also emptying stores shelves and ATMs around the city. People don’t want to leave their homes and wish to hold as much cash as possible. It is not yet clear if this is an actual run on the banks or just people who would rather have access to cash rather than cards during these uncertain times.
One of the obvious benefits of Bitcoin is that you don’t need to trust a third party with your money. Cash under the mattress is a classic option when you don’t want to trust banks, but you can’t send cash through the Internet. Holding bitcoins in a brain wallet, paper wallet, or cold storage hardware device is also much more secure than putting a bunch of cash under one’s mattress. There’s no need to empty out a local ATM when you can store all of your bitcoins in your brain. The only issue here is being able to transact in bitcoins in an even worse situation where there is no Internet or electricity. Having said that, there are bigger issues at hand than being able to spend money if there’s no electricity to be found.
You Can’t Place Capital Controls on Bitcoin
As the value of the Ukrainian hryvnia was declining in early February, the Ukrainian Central Bank started to limit the amount of foreign currency that Ukrainians could purchase. The limit is currently set at just under $6,000 per month. This restriction has been able to prevent continued damage to the hryvnia’s value against other currencies, but whether or not it will be able to help over the long term remains an unanswered question. Although the intention of this policy is to prevent the local currency from falling in value, it also limits the options of the Ukrainian people who just want to find a safe haven for their savings.
Bitcoin users are not affected by capital controls, and it doesn’t matter if those economic restrictions are found in Ukraine or Argentina. Capital flight to another country wouldn’t even exist in a Bitcoin economy because bitcoins would be a global currency. There would be no reason to flee the bitcoin because the declining national economy would not have an effect on the price of bitcoins. Having said that, bitcoins can offer a way around capital controls while most of the world is still on a fiat standard. Governments always try to micromanage macro economies, and they usually just make matters worse when they try to limit what people can do with their own money. Whether it’s the United States government paying farmers to destroy crops and livestock during the Great Depression or China devaluing their currency to increase exports to other countries, government involvement in the economy usually has negative side effects for everyone.
Bitcoin Still Needs to Sort Out Its Own Issues
While Bitcoin has the potential to solve a lot of issues involved with the economies of unstable nations, we’re still far away from it being viewed as a “safe haven”. As we’ve seen over the past few months, regulatory uncertainty and goxxings still have a negative impact on price stability. Bitcoin has a lot of growing up to do, but you have to wonder how much stabler the price will be once most nations have stated their regulatory intentions and MtGox is behind us. A currency that swings 10% in either direction on a daily basis would actually be preferable to some current fiat currencies, especially when you throw in the aforementioned abilities to get around economic restrictions and banks. Relatively large swings in price over the short term are sometimes preferable to a 50% decline over a year or two. The success of Bitcoin certainly isn’t set in stone, but it could definitely become a solution to many of the economic ailments facing specific parts of the world today.
Kyle Torpey 21/02/2014
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/ukraineATMs-300x224.jpeg
The current political and economic environment in Ukraine has led to credit downgrades for local banks, a currency devaluation, capital controls, and ATMs running out of cash. Before this article continues there is one thing that needs to be mentioned: Bitcoin users not affected. While Bitcoin obviously couldn’t help when it comes to preventing the violence currently taking place on the streets of Kiev, it at least helps people who want to protect their wealth in times of political uncertainty. Bitcoin still needs to get through some problems of its own when it comes to stability, but the current events in Ukraine can be used as a case study for why cryptocurrency is so important to the entire world.
A Political Crisis Leads to a Currency Crisis
The hryvnia has already declined more than 10% against the US dollar since November, and Tim Ash from Standard Bank believes this trend could continue over the next few months. He was recently interviewed by Reuters, and he claimed that it could soon take 11 hryvni to equal 1 dollar. In a situation where Ukraine is not able to get more economic assistance from the international community, Ash believes we could see a situation where it takes 15 hryvni to buy 1 dollar. Although this kind of currency crisis currently leads to a thriving black market in dollars and euros, it could be bitcoins that become the more practical safe haven for people in the future.
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/ukrainedollarchart.png
hryvnia dollar chart bitcoin
The hryvnia has declined against the US dollar. Chart via XE.com.
In a future where bitcoins are a widely-used international currency, citizens of a country experiencing political turmoil would not need to worry about the devaluation of their local currency. People holding hryvni in their Ukrainian bank accounts or in the form of cash under their mattresses have basically been robbed of 10% of their savings since November. If some predictions turn out to be true, they could be losing close to 50% of their savings as a solution for government debt is not found. If bitcoins were able to reach a stable price, the Ukrainian people would not have to watch their savings disappear as a political uprising slowed down economic activity in the surrounding areas.
Bank Downgrades and Empty ATMs Don’t Affect Bitcoin Users
Various banks in Ukraine have been downgraded by Fitch and Moody’s over the past few months, and these downgrades are due to these banks’ exposure to Ukrainian government bonds. Ukraine could be headed towards a bank bailout or bail-in situation, and either “solution” should be viewed as a lose for the Ukrainian people. If the government defaults on its debts, then most bank depositors in Ukraine will need to take a “haircut“.
Residents of Kiev are also emptying stores shelves and ATMs around the city. People don’t want to leave their homes and wish to hold as much cash as possible. It is not yet clear if this is an actual run on the banks or just people who would rather have access to cash rather than cards during these uncertain times.
One of the obvious benefits of Bitcoin is that you don’t need to trust a third party with your money. Cash under the mattress is a classic option when you don’t want to trust banks, but you can’t send cash through the Internet. Holding bitcoins in a brain wallet, paper wallet, or cold storage hardware device is also much more secure than putting a bunch of cash under one’s mattress. There’s no need to empty out a local ATM when you can store all of your bitcoins in your brain. The only issue here is being able to transact in bitcoins in an even worse situation where there is no Internet or electricity. Having said that, there are bigger issues at hand than being able to spend money if there’s no electricity to be found.
You Can’t Place Capital Controls on Bitcoin
As the value of the Ukrainian hryvnia was declining in early February, the Ukrainian Central Bank started to limit the amount of foreign currency that Ukrainians could purchase. The limit is currently set at just under $6,000 per month. This restriction has been able to prevent continued damage to the hryvnia’s value against other currencies, but whether or not it will be able to help over the long term remains an unanswered question. Although the intention of this policy is to prevent the local currency from falling in value, it also limits the options of the Ukrainian people who just want to find a safe haven for their savings.
Bitcoin users are not affected by capital controls, and it doesn’t matter if those economic restrictions are found in Ukraine or Argentina. Capital flight to another country wouldn’t even exist in a Bitcoin economy because bitcoins would be a global currency. There would be no reason to flee the bitcoin because the declining national economy would not have an effect on the price of bitcoins. Having said that, bitcoins can offer a way around capital controls while most of the world is still on a fiat standard. Governments always try to micromanage macro economies, and they usually just make matters worse when they try to limit what people can do with their own money. Whether it’s the United States government paying farmers to destroy crops and livestock during the Great Depression or China devaluing their currency to increase exports to other countries, government involvement in the economy usually has negative side effects for everyone.
Bitcoin Still Needs to Sort Out Its Own Issues
While Bitcoin has the potential to solve a lot of issues involved with the economies of unstable nations, we’re still far away from it being viewed as a “safe haven”. As we’ve seen over the past few months, regulatory uncertainty and goxxings still have a negative impact on price stability. Bitcoin has a lot of growing up to do, but you have to wonder how much stabler the price will be once most nations have stated their regulatory intentions and MtGox is behind us. A currency that swings 10% in either direction on a daily basis would actually be preferable to some current fiat currencies, especially when you throw in the aforementioned abilities to get around economic restrictions and banks. Relatively large swings in price over the short term are sometimes preferable to a 50% decline over a year or two. The success of Bitcoin certainly isn’t set in stone, but it could definitely become a solution to many of the economic ailments facing specific parts of the world today.
Mt.Gox Weekend Trade: News, Analysis
William Blackwell 22/02/2014 Bitcoin, Bitcoin Analysis, Mt. Gox, News
At 07h00 UTC Mt.Gox BTCUSD price skirted below $100 once more, continuing the relentless decline since the break of $250 on Thursday. Volatility is increasing as traders take advantage of low weekend liquidity to chase price for profits.
Questions about where this crash is going to find a bottom abound, since a rout in Mt.Gox’s exchange price negatively affects other exchange prices. At the time of writing, there are no reports of specific events that may be leading this decline and the only reasonable conclusion is that negative expectations for next week may be the cause.
Update 12h58 UTC
Mt.Gox Transaction testing is being reported on Reddit. The author speculates that the price advance from $100 to $140 may be attributable to the “freeing up” of stuck transactions. However, this may prove unlikely, as the price structure that unfolded to $140 is corrective in nature, indicating additional price lows may follow.
Views
The bad news surrounding Mt.Gox as a result of long running exchange software issues, as well as a morass of customer service issues has lead to widespread public criticism and votes of no confidence in its management.
Said Andreas Antonopoulos in a tweet yesterday:
The Gox relocation, delay and more bad communication shows that the problem is one of management. Won’t be fixed with a patch.
And from the ever outspoken Tyler Durden of ZeroHedge:
The disruption of Mt.Gox will be another test for Bitcoin… a test Bitcoin will survive… For Mt. Gox though, I think it’s pretty much game over.
After-hours Trade – Analysis
It has to be pointed out, however, that for many currencies that trade over the weekend there a phenomenon called “Filling the Gap”. It works like this:
Due to the majority of trades being executed during office hours, the effect of thinner weekend trade is often to push price to extremes – extremes that are less likely during busy market hours when the market has more participants who tend to oppose one another – thereby minimizing the duration of price movement in a single direction (up or down).
Since weekend trade is less “liquid”, price can be pushed into areas where the majority of traders (now absent) would have opposed such movement.
After the weekend, when day traders return to their desks they will notice a large gap between the closing price of Friday and the opening price of the Monday session. It is standard practice to trade in the direction of the price gap until Friday’s price has been re-established. This is called ”Filling the Gap” or “Gap Trading” and whenever weekend trade creates such a gap there is a 99% probability that early trade on Monday will close the price gap.
If trade on Saturday and Sunday establishes a price level below $110 then we will most likely see trade returning price to $110 on Monday. Bear this fact in mind when seeing reports forecasting doom for Monday, and bear in mind the reason why weekend trade leaves price vulnerable to a strong direction push.
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/Gold_Selection_22Feb14_1447.png
William Blackwell 22/02/2014 Bitcoin, Bitcoin Analysis, Mt. Gox, News
At 07h00 UTC Mt.Gox BTCUSD price skirted below $100 once more, continuing the relentless decline since the break of $250 on Thursday. Volatility is increasing as traders take advantage of low weekend liquidity to chase price for profits.
Questions about where this crash is going to find a bottom abound, since a rout in Mt.Gox’s exchange price negatively affects other exchange prices. At the time of writing, there are no reports of specific events that may be leading this decline and the only reasonable conclusion is that negative expectations for next week may be the cause.
Update 12h58 UTC
Mt.Gox Transaction testing is being reported on Reddit. The author speculates that the price advance from $100 to $140 may be attributable to the “freeing up” of stuck transactions. However, this may prove unlikely, as the price structure that unfolded to $140 is corrective in nature, indicating additional price lows may follow.
Views
The bad news surrounding Mt.Gox as a result of long running exchange software issues, as well as a morass of customer service issues has lead to widespread public criticism and votes of no confidence in its management.
Said Andreas Antonopoulos in a tweet yesterday:
The Gox relocation, delay and more bad communication shows that the problem is one of management. Won’t be fixed with a patch.
And from the ever outspoken Tyler Durden of ZeroHedge:
The disruption of Mt.Gox will be another test for Bitcoin… a test Bitcoin will survive… For Mt. Gox though, I think it’s pretty much game over.
After-hours Trade – Analysis
It has to be pointed out, however, that for many currencies that trade over the weekend there a phenomenon called “Filling the Gap”. It works like this:
Due to the majority of trades being executed during office hours, the effect of thinner weekend trade is often to push price to extremes – extremes that are less likely during busy market hours when the market has more participants who tend to oppose one another – thereby minimizing the duration of price movement in a single direction (up or down).
Since weekend trade is less “liquid”, price can be pushed into areas where the majority of traders (now absent) would have opposed such movement.
After the weekend, when day traders return to their desks they will notice a large gap between the closing price of Friday and the opening price of the Monday session. It is standard practice to trade in the direction of the price gap until Friday’s price has been re-established. This is called ”Filling the Gap” or “Gap Trading” and whenever weekend trade creates such a gap there is a 99% probability that early trade on Monday will close the price gap.
If trade on Saturday and Sunday establishes a price level below $110 then we will most likely see trade returning price to $110 on Monday. Bear this fact in mind when seeing reports forecasting doom for Monday, and bear in mind the reason why weekend trade leaves price vulnerable to a strong direction push.
http://www.cryptocoinsnews.com/wp-content/uploads/2014/02/Gold_Selection_22Feb14_1447.png
Igor can i ask u please to unquote that whole thread , that is just bit quote wall. U just put #57 - and ur post , so we know u are addressing to that article but without repeating whole article. Tnx very much. And tnx for support, stick around will be nice giveaways.
Btw u can see how that is in Japan few people drinking tie and "protesting" its not like here where everything burns to the ground in protests.
Thank u Igor.
Btw u can see how that is in Japan few people drinking tie and "protesting" its not like here where everything burns to the ground in protests.
Thank u Igor.
Post #57, Kiev Ukraina
Well, we know one person mined a lot of bitcoin, in the beginning... Probably Satoshi
Yes but we don't know if he still owns them
. Maybe he sold out ... That would be stupid thou 
#59 - This might be true , but it is all more or less speculation. Maybe "Sathoshi" sold his coins piece by piece at exchanges, or maybe some of exchanges are "His" . I think we will never know 
.
. Well, we know one person mined a lot of bitcoin, in the beginning... Probably Satoshi
#59 - This might be true , but it is all more or less speculation. Maybe "Sathoshi" sold his coins piece by piece at exchanges, or maybe some of exchanges are "His" . I think we will never know .
.
Commentary on a Bitcoin Infographic
by RUBEN ALEXANDER on FEBRUARY 12, 2014
#1 Bitcoins can be destroyed
To my knowledge I didn’t think they could be destroyed. I thought they could be lost forever and effectively made inaccessible by forgetting a password to an encrypted private key or destroying a hard drive. In those instances, the blockchain will always have a record of a lost Bitcoin. They can be moved around, divided, escrowed, but I was pretty sure they could not be destroyed. I spoke to Luke Dashjr, a bitcoin developer and creator of a decentralized mining pool named Eligius, and he brought up an interesting case where Bitcoins can be destroyed:
“They [Bitcoins] can, and have been destroyed completely, though doing so requires the explicit cooperation of a miner. Miners are not required to claim transaction fees (or the block subsidy, for that matter) and failure to claim them results in their complete destruction.”
#2 Edison’s Paper
Here is a link to his paper. It was written out of frustration with the introduction of the dollar system and newly created Federal Reserve system made in the early 1900s. There were other papers by Keynes and Strover that argued for a fiat based bank controlled financial system, but those authors were often labeled “inflationists”.
The system he wrote about was to preserve the well being of farmers and to be based on commodities they handled and could access easily. He writes about an example where the government could issue an interest free mortgage for $750 to farmers for $1,000 worth of wheat. To sell the wheat, the farmer would need to pay the government back the $1,000, but half of the value would be in cash and the other half would be the mortgage certificate allowing the government to sell the wheat at market prices.
#3 Top Holders
I didn’t believe Satoshi had 1.15 million Bitcoin, so I decided to follow the Genesis Block and see if I could verify this amount. The address associated with the first block reward was 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, which shows a total balance of close to 65 Bitcoins. I immediately wanted to make sure these numbers were in Bitcoin, so I went back and reviewed the claim that the Bitcoin Investment Trust (BIT) had 53,000 Bitcoins. According to the investor presentation at the BIT website, they actually secured 73,359 BTC in the fall of 2013, which were worth 62 million dollars at the time. The figures for the top holders are in Bitcoin, but some numbers may be incorrect.
After a few minutes of link hopping, I arrived at a familiar post by Sergio D Lerner claiming that Satoshi had over 1 million Bitcoins. He has these graphs as proof.
https://lh5.googleusercontent.com/I2kWPrW9XBysyle2UKwn5d0V2lu9cpDOu5LTMxS5PDDGqTWxfq5qPjf4sk9hp5oxBturRMznqCbwxyGZOYS5AU3LtTpOHMincWkvSJd6z-XMDnCwc3nf6_9m3w
https://lh4.googleusercontent.com/IysGWNiYp3m8yM7QvfR2v-gJwhYT9y7HCPqlc84BmLQdcCOipQaX7Q7XNT9y9hUL6yMd2LY9Q3dxyjEl6-Qvf8g1w22fUlOD5gjKzi1hpjderauE6lSZzPU4Mg
Lerner qualified this post and his images with a disclaimer saying, “Disclaimer: I can’t assure with 100% certainty that the all the black dots are owned by Satoshi”, but Sergio has had accurate and insightful articles in the past. He talks about Ethereum a bit in this post.
#4 Is Coinye dead?
I know most people won’t care if this altcoin has a pulse, but I checked and although the pulse is faint, Coinye is still living and breathing. It is being exchanged, it even has a tipping bot on reddit and youtube. And it is most certainly being mined. The Cease and Desist notices have crippled Coinye, but, if you will, it still is alive.
I am very interested in Coinye, because it is the first time a Cryptocurrency has been directly attacked. Other altcoins have been very inexpensive lessons for Bitcoin, like Terracoin’s 51% attack and Florincoin’s introduction of transaction messages.
Luke found a few more errors in the infographic that I’ll include here.
#5 Bitcoin transactions are instant;
Only confirmation takes an hour on average (contrasted with 6+ months for CC payments and a day for most wire transfers).
#6 Do countries really require disclosing private keys?Huh
This still remains to be seen, but I have seen any information to confirm any country requires a cryptocurrency user to disclose their private keys. Even the FBI, after the Silk Road raid, hasn’t touched DPR’s stash of Bitcoins.
#7 Tracking Bitcoins (and heists) is much simpler than tracking any other currency, even if not always “easy”.
As is, the blockchain does make tracking Bitcoins much easier than using cash. Once an association is made between an individual and a public address, then all other transactions can be followed.
#8 Bitcoin is just as susceptible to money laundering etc. as every other currency, no more and no less…
Contrary to the previous point, if someone wanted to move a large amount of money in one country and access it in another, the blockchain is probably the fastest way to do so. There also also developments such as stealth wallets and the Dark Wallet project in the works that would make it even easier for a Bitcoin owner to hide their tracks.
I’ve contacted the author of the infographic and notified them of the items to be corrected.
by RUBEN ALEXANDER on FEBRUARY 12, 2014
#1 Bitcoins can be destroyed
To my knowledge I didn’t think they could be destroyed. I thought they could be lost forever and effectively made inaccessible by forgetting a password to an encrypted private key or destroying a hard drive. In those instances, the blockchain will always have a record of a lost Bitcoin. They can be moved around, divided, escrowed, but I was pretty sure they could not be destroyed. I spoke to Luke Dashjr, a bitcoin developer and creator of a decentralized mining pool named Eligius, and he brought up an interesting case where Bitcoins can be destroyed:
“They [Bitcoins] can, and have been destroyed completely, though doing so requires the explicit cooperation of a miner. Miners are not required to claim transaction fees (or the block subsidy, for that matter) and failure to claim them results in their complete destruction.”
#2 Edison’s Paper
Here is a link to his paper. It was written out of frustration with the introduction of the dollar system and newly created Federal Reserve system made in the early 1900s. There were other papers by Keynes and Strover that argued for a fiat based bank controlled financial system, but those authors were often labeled “inflationists”.
The system he wrote about was to preserve the well being of farmers and to be based on commodities they handled and could access easily. He writes about an example where the government could issue an interest free mortgage for $750 to farmers for $1,000 worth of wheat. To sell the wheat, the farmer would need to pay the government back the $1,000, but half of the value would be in cash and the other half would be the mortgage certificate allowing the government to sell the wheat at market prices.
#3 Top Holders
I didn’t believe Satoshi had 1.15 million Bitcoin, so I decided to follow the Genesis Block and see if I could verify this amount. The address associated with the first block reward was 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, which shows a total balance of close to 65 Bitcoins. I immediately wanted to make sure these numbers were in Bitcoin, so I went back and reviewed the claim that the Bitcoin Investment Trust (BIT) had 53,000 Bitcoins. According to the investor presentation at the BIT website, they actually secured 73,359 BTC in the fall of 2013, which were worth 62 million dollars at the time. The figures for the top holders are in Bitcoin, but some numbers may be incorrect.
After a few minutes of link hopping, I arrived at a familiar post by Sergio D Lerner claiming that Satoshi had over 1 million Bitcoins. He has these graphs as proof.
https://lh5.googleusercontent.com/I2kWPrW9XBysyle2UKwn5d0V2lu9cpDOu5LTMxS5PDDGqTWxfq5qPjf4sk9hp5oxBturRMznqCbwxyGZOYS5AU3LtTpOHMincWkvSJd6z-XMDnCwc3nf6_9m3w
https://lh4.googleusercontent.com/IysGWNiYp3m8yM7QvfR2v-gJwhYT9y7HCPqlc84BmLQdcCOipQaX7Q7XNT9y9hUL6yMd2LY9Q3dxyjEl6-Qvf8g1w22fUlOD5gjKzi1hpjderauE6lSZzPU4Mg
Lerner qualified this post and his images with a disclaimer saying, “Disclaimer: I can’t assure with 100% certainty that the all the black dots are owned by Satoshi”, but Sergio has had accurate and insightful articles in the past. He talks about Ethereum a bit in this post.
#4 Is Coinye dead?
I know most people won’t care if this altcoin has a pulse, but I checked and although the pulse is faint, Coinye is still living and breathing. It is being exchanged, it even has a tipping bot on reddit and youtube. And it is most certainly being mined. The Cease and Desist notices have crippled Coinye, but, if you will, it still is alive.
I am very interested in Coinye, because it is the first time a Cryptocurrency has been directly attacked. Other altcoins have been very inexpensive lessons for Bitcoin, like Terracoin’s 51% attack and Florincoin’s introduction of transaction messages.
Luke found a few more errors in the infographic that I’ll include here.
#5 Bitcoin transactions are instant;
Only confirmation takes an hour on average (contrasted with 6+ months for CC payments and a day for most wire transfers).
#6 Do countries really require disclosing private keys?Huh
This still remains to be seen, but I have seen any information to confirm any country requires a cryptocurrency user to disclose their private keys. Even the FBI, after the Silk Road raid, hasn’t touched DPR’s stash of Bitcoins.
#7 Tracking Bitcoins (and heists) is much simpler than tracking any other currency, even if not always “easy”.
As is, the blockchain does make tracking Bitcoins much easier than using cash. Once an association is made between an individual and a public address, then all other transactions can be followed.
#8 Bitcoin is just as susceptible to money laundering etc. as every other currency, no more and no less…
Contrary to the previous point, if someone wanted to move a large amount of money in one country and access it in another, the blockchain is probably the fastest way to do so. There also also developments such as stealth wallets and the Dark Wallet project in the works that would make it even easier for a Bitcoin owner to hide their tracks.
I’ve contacted the author of the infographic and notified them of the items to be corrected.
New Banking Task Force to Study Digital Currencies
Jon Southurst (@southtopia) | Published on February 22, 2014 at 10:40 GMT | News, Regulation, US & Canada
The Chairman of the US Senate’s Homeland Security & Governmental Affairs Committee (HSGAC) which investigated digital currencies in November has responded positively to the creation of a new state bankers’ task force to perform its own study into what sort of regulation is necessary.
The new “Emerging Payments Task Force” comes from the Conference of State Bank Supervisors (CSBS), a national meeting group of regulators from all states “dedicated to advancing the state banking system” in the US at a federal level. It aims to study the impacts and potential consumer protection issues arising from new payment method technologies, including bitcoin, among several others.
HSGAC Chairman Senator Tom Carper (D-Del) issued a press statement earlier approving the move, saying he wanted to ensure governments “are adequately protecting consumers and addressing lawbreakers without hindering innovation”.
“That’s why I am encouraged that the Conference of State Bank Supervisors is paying attention to this evolving technology and looking for ways to better coordinate oversight to protect consumers and local communities.
While there is still more work to be done, this is an important step. I encourage federal and state agencies and local entities, including banks, to further their collaboration so consumers and businesses can understand the rules of the road and be well served by them.”
Digital currency stakeholders
The Task Force will speak to a “broad range of stakeholders” in the virtual currency and payments sphere, including state and federal regulators, people in the industry, and other experts. It too believes there must be enough regulation to protect participants but not at the expense of progress.
“State regulators welcome a robust and focused dialogue about the benefits and risks of innovations to payment systems,” said CSBS Chairman and Kentucky Department of Financial Institutions Commissioner Charles A. Vice. “We seek an environment where technological innovation can be developed, but also regulated in a clear manner.”
The Task Force will include state regulators from nine states, including Superintendent of New York State Department of Financial Services Benjamin Lawsky, who oversaw that Department’s recent hearings into digital currencies and who also promotes special ‘BitLicence’ money transmitter regulations specific to such systems.
On its website, the Conference of State Bank Supervisors introduces itself thus:
“Our regulator membership sets us apart from other Washington organizations. Our strength lies in bringing all state banking departments together to present a unified voice in Washington. Through CSBS, state bank regulatory agencies continue to champion a system that offers competitive chartering options and efficient and effective – and local – supervision.”
Jon Southurst (@southtopia) | Published on February 22, 2014 at 10:40 GMT | News, Regulation, US & Canada
The Chairman of the US Senate’s Homeland Security & Governmental Affairs Committee (HSGAC) which investigated digital currencies in November has responded positively to the creation of a new state bankers’ task force to perform its own study into what sort of regulation is necessary.
The new “Emerging Payments Task Force” comes from the Conference of State Bank Supervisors (CSBS), a national meeting group of regulators from all states “dedicated to advancing the state banking system” in the US at a federal level. It aims to study the impacts and potential consumer protection issues arising from new payment method technologies, including bitcoin, among several others.
HSGAC Chairman Senator Tom Carper (D-Del) issued a press statement earlier approving the move, saying he wanted to ensure governments “are adequately protecting consumers and addressing lawbreakers without hindering innovation”.
“That’s why I am encouraged that the Conference of State Bank Supervisors is paying attention to this evolving technology and looking for ways to better coordinate oversight to protect consumers and local communities.
While there is still more work to be done, this is an important step. I encourage federal and state agencies and local entities, including banks, to further their collaboration so consumers and businesses can understand the rules of the road and be well served by them.”
Digital currency stakeholders
The Task Force will speak to a “broad range of stakeholders” in the virtual currency and payments sphere, including state and federal regulators, people in the industry, and other experts. It too believes there must be enough regulation to protect participants but not at the expense of progress.
“State regulators welcome a robust and focused dialogue about the benefits and risks of innovations to payment systems,” said CSBS Chairman and Kentucky Department of Financial Institutions Commissioner Charles A. Vice. “We seek an environment where technological innovation can be developed, but also regulated in a clear manner.”
The Task Force will include state regulators from nine states, including Superintendent of New York State Department of Financial Services Benjamin Lawsky, who oversaw that Department’s recent hearings into digital currencies and who also promotes special ‘BitLicence’ money transmitter regulations specific to such systems.
On its website, the Conference of State Bank Supervisors introduces itself thus:
“Our regulator membership sets us apart from other Washington organizations. Our strength lies in bringing all state banking departments together to present a unified voice in Washington. Through CSBS, state bank regulatory agencies continue to champion a system that offers competitive chartering options and efficient and effective – and local – supervision.”
Japanese Police Shut Down Protest at Mt. Gox
Jon Southurst (@southtopia) | Published on February 22, 2014 at 09:36 GMT | Companies, Exchanges, Mt. Gox, News
The small group of protestors outside Mt. Gox in Tokyo were moved on late yesterday by Japanese police, and warned not to return without a ‘demonstration license’.
Organizer Kolin Burges said the police were called not by Mt. Gox, but one of the building’s other tenants who had reportedly had enough of the protestors’ week-long presence at the building.
Mt. Gox management was also said to be irritated by the ongoing sit-in, claiming “security problems” caused by the protest and other technical issues were slowing its progress at fixing its bitcoin withdrawal problem. The company had previously posted a notice on its support page claiming to be moving location.
The protests received attention from both bitcoin fans and the Japanese media
This effectively ends the protest in its current form, since the group is unlikely to secure the license. For the most part the protest consisted only of two people, though they had been joined at other stages during the week by curious bitcoiners and financial media reporters. One of the Japanese language signs the pair was holding invited locals to join in and gave the street address.
Growing numbers
Burges said there were around 10 people standing near the building when police arrived. He explained:
“We went to the police station for a license and were told that for a demonstration license you need to move along a pre-planned route, with start and end points. So it looks like we cannot get a license and can’t go back there.”
Anyone walking through Tokyo on any given weekend is bound to encounter a rally or two, many of which do not appear to be moving, and which can be quite rowdy. The most common demonstration themes are anti-nuclear power or North Korea, plus the infamous loudspeaker buses operated by the far-right uyoku. The Russian, Chinese and US embassies are popular rallying points, and all have a permanent riot squad presence.
Burges indicated he still wanted to continue the protest in some form, but would have to think of other tactics. A physical presence may or may not be involved, though it is generally considered unwise to tempt fate with the Japanese police after a warning.
The price of a bitcoin on Mt. Gox continues to slide, even falling below the $100 mark at one point and hovering around that amount since. Most price aggregators, including CoinDesk’s Bitcoin Price Index, have removed Mt. Gox from their averages. The average global price is a comparatively robust $564, but still much lower than the $900 or so before the current problems began to get attention.
Protest images credit: Abasa Phillips
Jon Southurst (@southtopia) | Published on February 22, 2014 at 09:36 GMT | Companies, Exchanges, Mt. Gox, News
The small group of protestors outside Mt. Gox in Tokyo were moved on late yesterday by Japanese police, and warned not to return without a ‘demonstration license’.
Organizer Kolin Burges said the police were called not by Mt. Gox, but one of the building’s other tenants who had reportedly had enough of the protestors’ week-long presence at the building.
Mt. Gox management was also said to be irritated by the ongoing sit-in, claiming “security problems” caused by the protest and other technical issues were slowing its progress at fixing its bitcoin withdrawal problem. The company had previously posted a notice on its support page claiming to be moving location.
The protests received attention from both bitcoin fans and the Japanese media
This effectively ends the protest in its current form, since the group is unlikely to secure the license. For the most part the protest consisted only of two people, though they had been joined at other stages during the week by curious bitcoiners and financial media reporters. One of the Japanese language signs the pair was holding invited locals to join in and gave the street address.
Growing numbers
Burges said there were around 10 people standing near the building when police arrived. He explained:
“We went to the police station for a license and were told that for a demonstration license you need to move along a pre-planned route, with start and end points. So it looks like we cannot get a license and can’t go back there.”
Anyone walking through Tokyo on any given weekend is bound to encounter a rally or two, many of which do not appear to be moving, and which can be quite rowdy. The most common demonstration themes are anti-nuclear power or North Korea, plus the infamous loudspeaker buses operated by the far-right uyoku. The Russian, Chinese and US embassies are popular rallying points, and all have a permanent riot squad presence.
Burges indicated he still wanted to continue the protest in some form, but would have to think of other tactics. A physical presence may or may not be involved, though it is generally considered unwise to tempt fate with the Japanese police after a warning.
The price of a bitcoin on Mt. Gox continues to slide, even falling below the $100 mark at one point and hovering around that amount since. Most price aggregators, including CoinDesk’s Bitcoin Price Index, have removed Mt. Gox from their averages. The average global price is a comparatively robust $564, but still much lower than the $900 or so before the current problems began to get attention.
Protest images credit: Abasa Phillips
New Documents Show Goldman Sachs is Discussing Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 22:52 GMT | Companies, Investors, News
New York-based global investment banking giant Goldman Sachs has completed an initial assessment of digital currencies that concluded they are currently too volatile for serious investors.
The news comes from noted online news source TechCrunch, which says it obtained a copy of an internal discussion document from a contact at Goldman Sachs.
The excerpts posted by the media outlet provide evidence that Goldman Sachs is currently looking into the currency, though it is uncertain about its benefits. The bank even went so far as to suggest that it remains confused by the uproar surrounding virtual currencies.
Said one excerpt:
“2013 was the year when Bitcoin became a mainstay in mass media, to the extent that it has become hard to separate the effect of hype surrounding the currency from its fundamentals.”
While the bank’s major findings noted a laundry list of the virtual currency’s shortcomings, it acknowledged some of the potential benefits of bitcoin. In particular, it noted bitcoin’s ability to remove processing costs from micropayments and to provide “anonymity, security and a natively digital experience to online transactions for consumers”.
The news comes just weeks after JPMorgan weighed in on bitcoin with a more formal report that labeled digital currencies as “vastly inferior to fiat currencies“.
Notable findings
Ultimately, the report concluded that bitcoin is not yet suitable for merchant use due to its price volatility. This was a criticism also held by JPMorgan, which suggested that this risk outweighed the benefits of any potential savings.
On the matter of consumer use, Goldman Sachs determined that “there are more speculators in bitcoin versus participants in e-commerce”. The comments indicate the bank believes bitcoin needs to attain a greater level of liquidity before it becomes useful as a currency, though reports suggest that this shift may already be occurring.
Indeed, the bank found that bitcoin lacks a number of other attributes that could make it attractive to investors:
“There is no liquid derivative market for Bitcoin; nor a large market of B2B suppliers which companies can use for spending Bitcoin.”
Opportunities
The report summaries suggest that Goldman Sachs believe bitcoin to be far from a point of mass adoption, but that significant opportunities could one day exist in the ecosystem for investors.
The document said:
“As a full suite of financial services build up around Bitcoin, there will be numerous (mostly commission- based) revenue opportunities investors can focus on, including providing exchanges, wallets, payment processing, lending, derivatives and other services.”
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 22:52 GMT | Companies, Investors, News
New York-based global investment banking giant Goldman Sachs has completed an initial assessment of digital currencies that concluded they are currently too volatile for serious investors.
The news comes from noted online news source TechCrunch, which says it obtained a copy of an internal discussion document from a contact at Goldman Sachs.
The excerpts posted by the media outlet provide evidence that Goldman Sachs is currently looking into the currency, though it is uncertain about its benefits. The bank even went so far as to suggest that it remains confused by the uproar surrounding virtual currencies.
Said one excerpt:
“2013 was the year when Bitcoin became a mainstay in mass media, to the extent that it has become hard to separate the effect of hype surrounding the currency from its fundamentals.”
While the bank’s major findings noted a laundry list of the virtual currency’s shortcomings, it acknowledged some of the potential benefits of bitcoin. In particular, it noted bitcoin’s ability to remove processing costs from micropayments and to provide “anonymity, security and a natively digital experience to online transactions for consumers”.
The news comes just weeks after JPMorgan weighed in on bitcoin with a more formal report that labeled digital currencies as “vastly inferior to fiat currencies“.
Notable findings
Ultimately, the report concluded that bitcoin is not yet suitable for merchant use due to its price volatility. This was a criticism also held by JPMorgan, which suggested that this risk outweighed the benefits of any potential savings.
On the matter of consumer use, Goldman Sachs determined that “there are more speculators in bitcoin versus participants in e-commerce”. The comments indicate the bank believes bitcoin needs to attain a greater level of liquidity before it becomes useful as a currency, though reports suggest that this shift may already be occurring.
Indeed, the bank found that bitcoin lacks a number of other attributes that could make it attractive to investors:
“There is no liquid derivative market for Bitcoin; nor a large market of B2B suppliers which companies can use for spending Bitcoin.”
Opportunities
The report summaries suggest that Goldman Sachs believe bitcoin to be far from a point of mass adoption, but that significant opportunities could one day exist in the ecosystem for investors.
The document said:
“As a full suite of financial services build up around Bitcoin, there will be numerous (mostly commission- based) revenue opportunities investors can focus on, including providing exchanges, wallets, payment processing, lending, derivatives and other services.”
Bitcoin Investor Syndicate Breaks into AngelList Top 10
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 20:30 GMT | Investors, News, Startups
A bitcoin syndicate cracked AngelList’s top 10 for the first time on 21st February, just one month after it was initially formed.
Created by bitcoin venture capitalist Brock Pierce, who founded ExpressCoin, GoCoin, KnCMiner and Robocoin Asia, the syndicate now ranks eighth in terms of its total monetary backing, with $501,250 from 23 backers.
Syndicate backers include BitAngels Fund managing director David Johnston, SilkRoad Equity co-founder Matthew Roszak and 500 Startups venture partner Sean Percival and SIM managing partner W Bradford Stephens.
The syndicate will support 12 bitcoin-related startups this year, with an average of $50,000 being awarded to each company. Companies must contribute to digital currency in order to be eligible for the funds.
Angels can join the syndicate with a minimum investment of $5,000.
The announcement comes amid increasing investor activity in the virtual currency space. Notably, SecondMarket’s Bitcoin Investment Trust recently passed 80,000 BTC in holdings, while Cameron and Tyler Winklevoss just this week submitted a revised filing for a public bitcoin ETF.
How AngelList syndicates work
AngelList allows any angel investor or fund to form a syndicate, and for backers to then invest alongside them so that they can collaborate on future deals.
As explained by AngelList, “backers get access to dealflow, leads get carry and startups get access to capital”. Backers pay 5-20% carry per deal to the syndicate lead, and 5% to AngelList for facilitating the deals.
Investors are first screened through a verification process, and a special purpose vehicle LLC is created for each investment. Due to US Securities and Exchange Commission (SEC) regulations, only 99 investors can participate in the syndicate, meaning that Pierce’s fund has already reached one-quarter of its maximum capacity.
About the investors
In addition to Pierce, the syndicate includes a noted cast of virtual currency investors. For example, Percival is an advisor for San Francisco-based wallet provider Blockchain.info.
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 20:30 GMT | Investors, News, Startups
A bitcoin syndicate cracked AngelList’s top 10 for the first time on 21st February, just one month after it was initially formed.
Created by bitcoin venture capitalist Brock Pierce, who founded ExpressCoin, GoCoin, KnCMiner and Robocoin Asia, the syndicate now ranks eighth in terms of its total monetary backing, with $501,250 from 23 backers.
Syndicate backers include BitAngels Fund managing director David Johnston, SilkRoad Equity co-founder Matthew Roszak and 500 Startups venture partner Sean Percival and SIM managing partner W Bradford Stephens.
The syndicate will support 12 bitcoin-related startups this year, with an average of $50,000 being awarded to each company. Companies must contribute to digital currency in order to be eligible for the funds.
Angels can join the syndicate with a minimum investment of $5,000.
The announcement comes amid increasing investor activity in the virtual currency space. Notably, SecondMarket’s Bitcoin Investment Trust recently passed 80,000 BTC in holdings, while Cameron and Tyler Winklevoss just this week submitted a revised filing for a public bitcoin ETF.
How AngelList syndicates work
AngelList allows any angel investor or fund to form a syndicate, and for backers to then invest alongside them so that they can collaborate on future deals.
As explained by AngelList, “backers get access to dealflow, leads get carry and startups get access to capital”. Backers pay 5-20% carry per deal to the syndicate lead, and 5% to AngelList for facilitating the deals.
Investors are first screened through a verification process, and a special purpose vehicle LLC is created for each investment. Due to US Securities and Exchange Commission (SEC) regulations, only 99 investors can participate in the syndicate, meaning that Pierce’s fund has already reached one-quarter of its maximum capacity.
About the investors
In addition to Pierce, the syndicate includes a noted cast of virtual currency investors. For example, Percival is an advisor for San Francisco-based wallet provider Blockchain.info.
BitPay Updates Wallet for Smoother QR Code User Experience
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 19:34 GMT | BitPay, Companies, News
Georgia-based bitcoin merchant processing provider BitPay has announced the launch of the Bitcoin Payment Protocol, a wallet update designed to eliminate the “human error in making a bitcoin payment”.
In the official announcement, the company said the update would reduce friction at the point of sale by eliminating the need for consumers to copy the address and amount into their wallet. At checkout, users who scan a QR code or click to initiate payment will only be presented two options, pay or don’t pay.
Though this may sound like a small improvement, Stephen Pair, CTO and co-founder of BitPay, explains these errors can create inefficiencies that can bog down the payments network.
“We see common errors that people make. Some people pay too little or too much to a BitPay invoice, so that creates a payment exception that requires a support ticket.”
These leftover payments not only detract from the customer experience, however, they also have broader implications for how BitPay interacts with the mining community.
Notably, the update comes just one week after it launched Bitcore, an open-source project for app developers, and as the company is onboarding more merchants than ever.
BitPay has estimated that it now brings on 1,000 new merchants a week.
Reduced consumer friction
BitPay said that the new update improves the usability of QR codes for bitcoin payments by supporting BIP 73, an enhancement to the payment protocol BIP 70. BIP 73 seeks to reduce the density of QR codes.
The company said that this will ensure its QR codes work better in low-light settings and at longer distances. Further, they come with advantages for first-time users, as they are also normal HTTP URLs that can send instructions to devices.
The Payment Protocol makes improvements to ease merchant-seller disputes, too, as it supplies a refund address along with each payment.
Explained BitPay:
“This approach to refunds works on the block chain, with any wallet software, and does not require the buyers to have a BitPay account.”
For a more on BIP 73 and its technical improvements, you can find a detailed overview here.
A market for transaction fees
BitPay explains that the big picture behind the update is that it eliminates the Bitcoin mesh network that had previously helped communicate transactions between both senders and recipients and originators and the mining community.
Explains Pair:
“With the payment protocol, you communicate the payment from sender to recipient directly [...] so the wallet can send it to BitPay and then BitPay broadcasts it on the mesh network.”
This direct communications path, Pair said, helps BitPay account for nodes that may require certain fees in to maintain their profitability.
Pair went to on to detail how this would take the guesswork out of determining the fees for a transaction to get included in a block, help to develop a market around processing transaction fees and allow BitPay to better ensure these transactions can be sent through a block within a desired timeframe.
“Creating a true market for transaction fees, is really where the market needs to evolve,” Pair said.
Pete Rizzo (@pete_rizzo_) | Published on February 21, 2014 at 19:34 GMT | BitPay, Companies, News
Georgia-based bitcoin merchant processing provider BitPay has announced the launch of the Bitcoin Payment Protocol, a wallet update designed to eliminate the “human error in making a bitcoin payment”.
In the official announcement, the company said the update would reduce friction at the point of sale by eliminating the need for consumers to copy the address and amount into their wallet. At checkout, users who scan a QR code or click to initiate payment will only be presented two options, pay or don’t pay.
Though this may sound like a small improvement, Stephen Pair, CTO and co-founder of BitPay, explains these errors can create inefficiencies that can bog down the payments network.
“We see common errors that people make. Some people pay too little or too much to a BitPay invoice, so that creates a payment exception that requires a support ticket.”
These leftover payments not only detract from the customer experience, however, they also have broader implications for how BitPay interacts with the mining community.
Notably, the update comes just one week after it launched Bitcore, an open-source project for app developers, and as the company is onboarding more merchants than ever.
BitPay has estimated that it now brings on 1,000 new merchants a week.
Reduced consumer friction
BitPay said that the new update improves the usability of QR codes for bitcoin payments by supporting BIP 73, an enhancement to the payment protocol BIP 70. BIP 73 seeks to reduce the density of QR codes.
The company said that this will ensure its QR codes work better in low-light settings and at longer distances. Further, they come with advantages for first-time users, as they are also normal HTTP URLs that can send instructions to devices.
The Payment Protocol makes improvements to ease merchant-seller disputes, too, as it supplies a refund address along with each payment.
Explained BitPay:
“This approach to refunds works on the block chain, with any wallet software, and does not require the buyers to have a BitPay account.”
For a more on BIP 73 and its technical improvements, you can find a detailed overview here.
A market for transaction fees
BitPay explains that the big picture behind the update is that it eliminates the Bitcoin mesh network that had previously helped communicate transactions between both senders and recipients and originators and the mining community.
Explains Pair:
“With the payment protocol, you communicate the payment from sender to recipient directly [...] so the wallet can send it to BitPay and then BitPay broadcasts it on the mesh network.”
This direct communications path, Pair said, helps BitPay account for nodes that may require certain fees in to maintain their profitability.
Pair went to on to detail how this would take the guesswork out of determining the fees for a transaction to get included in a block, help to develop a market around processing transaction fees and allow BitPay to better ensure these transactions can be sent through a block within a desired timeframe.
“Creating a true market for transaction fees, is really where the market needs to evolve,” Pair said.
Off topic: Is this rely FBI wallet ?
https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH
Looks like they have biggest amount of btc stored in wallet .
https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH
Looks like they have biggest amount of btc stored in wallet .
Has This Company Found a Workaround for Mt. Gox Withdrawals?
Joon Ian Wong (@joonian) | Published on February 21, 2014 at 18:42 GMT | Companies, Exchanges, Mt. Gox, News
A new market will allow Mt. Gox customers to trade funds in their exchange accounts for bitcoin, effectively allowing bitcoin withdrawals despite an official freeze.
The service, Bitcoin Builder, has also created an arbitrage opportunity for traders who wish to exploit the growing spread between the price of bitcoin on Mt. Gox and other major exchanges.
According to the market’s founder Josh Jones, some 14,500 BTC (about $8.1m) worth of trades have been executed since it was set up on 11th Feb.
A widening spread
Bitcoin Builder works by taking advantage of the widening spread between the price of bitcoin on Mt. Gox and other exchanges. The spread has grown as Mt. Gox’s withdrawal freeze stretches on. At the time of writing, for example, 1 BTC was trading for $123.56 on Mt. Gox compared to $566.20 on BitStamp.
Traders on Bitcoin Builder can sell bitcoins in their Mt. Gox accounts on the Bitcoin Builder market at the prevailing price. One bitcoin in a Mt. Gox account was trading for 0.38 BTC on Bitcoin Builder at the time of writing.
If the same bitcoin from Mt. Gox could theoretically be traded on another exchange, like BitStamp, it would be worth just 0.22 BTC. In other words, selling Mt. Gox bitcoins on Bitcoin Builder yields a 73% premium over the theoretical open market rate. Jones said:
“I was in the withdrawal queue for Mt. Gox when all this happened. I was basically a user who wanted an exchange like this to exist myself.”
Bitcoin Builder works because Mt. Gox is still allowing transfers between accounts on the exchange. To sell bitcoin, users must therefore send coins to Bitcoin Builder’s Mt. Gox account. They will then receive bitcoin in a wallet of their choice.
Only users with ‘verified’ or ‘trusted’ accounts at Mt. Gox can make transfers to another account on the exchange. The new exchange charges 2% for each transaction.
Bitcoin Builder also allows traders to buy the discounted Mt. Gox bitcoins. These traders must deposit coins with Bitcoin Builder and then receive Mt. Gox bitcoins that are held in Bitcoin Builder’s account on the exchange.
Traders on Bitcoin Builder must also submit identity documents before they can start making transactions.
The Gox question
Trades on Bitcoin Builder hinge on Mt. Gox’s future. Customers who are selling their Mt. Gox bitcoins on Bitcoin Builder are taking a 78% discount on the price of their coins in exchange for the certainty of holding funds that are not subject to Mt. Gox’s withdrawal restrictions.
Although the exchange has said the withdrawal freeze is due to technical problems and that it will be lifted soon, customers appear to be losing their confidence that the exchange will do as it says. This is reflected in the plummeting price of bitcoin to US dollars on Mt. Gox.
Then there are the arbitrageurs who are able to exploit the spread between prices at Mt. Gox and other exchanges so long as the withdrawal freeze stays in place.
These traders may be depositing fiat into a Mt. Gox account in order to buy more discounted bitcoins and then offloading them on Bitcoin Builder. With bitcoins in hand, they can then make a profit selling on another major exchange.
However, if Mt. Gox were to announce more serious problems — such as insolvency, for example — then Bitcoin Builder’s trading volume would vanish. Jones said:
“If Mt. Gox really is insolvent, or if they somehow freeze Bitcoin Builder’s account, or if they say that some of these bitcoins turned out to be fake because of transaction malleability, then there’s going to be a lot of angry people [on Bitcoin Builder].”
Jones himself is betting that Mt. Gox is solvent and that it is indeed suffering from the technical problems it claims it is experiencing.
“There is a saying, ‘never attribute to malice that which can adequately explained by incompetence’. Mt Gox is not Google or Apple. But they are a real company and Karpeles has made loads of money over the last few years. So he’s not just going to shut it down,” Jones said.
About Josh Jones
Josh
Jones claims he knows a thing or two about running a high-growth technology company with an inexperienced team – which is what Mark Karpeles is being accused of at Mt. Gox.
Jones is one of four co-founders of Dreamhost, a web hosting company that was formed when the group were computer science majors at Harvey Mudd College in California.
The company was founded in 1997 and now has revenues of $45m, according to Jones. Like Mt. Gox, the firm raised funds from professional investors.
“I just think [Karpeles] is just really bad at PR. At Dreamhost I’ve had PR disasters myself. We made a billing error and we over-billed people millions of dollars, and we weren’t as apologetic as we should have been. Immediately, it was like, oh, that didn’t go down well!”
Jones stepped away from operational duties at Dreamhost in March 2010. He said he sold his shares in the company in November, but he uses his track record with the web-hosting firm to prove that Bitcoin Builder should be trusted by its customers.
“That’s why I put my LinkedIn profile and my real identity on the Bitcoin Builders site. I started the LA Bitcoin meet up, I ran Dreamhost. People were already trading on forms, and I was like, man – people are just trusting some dude on a forum. So people are trusting me,” he said.
Jones said he did not know Karpeles personally, except for an email exchange two years ago when Bitcoin Builder was initially launched as a tool to allow automated bitcoin buying on Mt. Gox.
He said Karpeles had emailed him suggesting ways they could make the tool more efficient and split the revenue. Jones then proposed investing in the then-nascent exchange, but Karpeles never responded.
Potential risks
Trust has to be abundant when trading on Bitcoin Builder. For example, customers selling their Mt. Gox bitcoin must transfer their coins to the Bitcoin Builder account with no guarantee that they will receive coins in return.
Bitcoin Builder processes withdrawals daily, at 11pm Pacific Standard Time. Customers selling bitcoin therefore potentially have to wait for an anxiety-laden 24 hours before their wallets outside Mt. Gox are credited.
One Bitcoin Builder trader, who runs a ‘bitcoin hedge fund’ in New York City, says he was reassured by Jones’ transparency about his identity. The trader, who wished to remain anonymous, said:
“[Jones] is a public person with a reputation and a career — so I am willing to believe that he is not a scammer. Like anything, you make sure everything works first with a small amount.”
The trader said he had purchased more than 300 Mt. Gox bitcoins through Bitcoin Builder.
Jones is running Bitcoin Builder by himself at the moment, having written all the software that the site runs on. He is considering adding more features, like leverage and automated withdrawals.
In the meantime, the exchange is doing booming business, and providing a valuable opportunity for Mt. Gox customers to get their funds out.
My toughs: Wow... This could actually work !
Joon Ian Wong (@joonian) | Published on February 21, 2014 at 18:42 GMT | Companies, Exchanges, Mt. Gox, News
A new market will allow Mt. Gox customers to trade funds in their exchange accounts for bitcoin, effectively allowing bitcoin withdrawals despite an official freeze.
The service, Bitcoin Builder, has also created an arbitrage opportunity for traders who wish to exploit the growing spread between the price of bitcoin on Mt. Gox and other major exchanges.
According to the market’s founder Josh Jones, some 14,500 BTC (about $8.1m) worth of trades have been executed since it was set up on 11th Feb.
A widening spread
Bitcoin Builder works by taking advantage of the widening spread between the price of bitcoin on Mt. Gox and other exchanges. The spread has grown as Mt. Gox’s withdrawal freeze stretches on. At the time of writing, for example, 1 BTC was trading for $123.56 on Mt. Gox compared to $566.20 on BitStamp.
Traders on Bitcoin Builder can sell bitcoins in their Mt. Gox accounts on the Bitcoin Builder market at the prevailing price. One bitcoin in a Mt. Gox account was trading for 0.38 BTC on Bitcoin Builder at the time of writing.
If the same bitcoin from Mt. Gox could theoretically be traded on another exchange, like BitStamp, it would be worth just 0.22 BTC. In other words, selling Mt. Gox bitcoins on Bitcoin Builder yields a 73% premium over the theoretical open market rate. Jones said:
“I was in the withdrawal queue for Mt. Gox when all this happened. I was basically a user who wanted an exchange like this to exist myself.”
Bitcoin Builder works because Mt. Gox is still allowing transfers between accounts on the exchange. To sell bitcoin, users must therefore send coins to Bitcoin Builder’s Mt. Gox account. They will then receive bitcoin in a wallet of their choice.
Only users with ‘verified’ or ‘trusted’ accounts at Mt. Gox can make transfers to another account on the exchange. The new exchange charges 2% for each transaction.
Bitcoin Builder also allows traders to buy the discounted Mt. Gox bitcoins. These traders must deposit coins with Bitcoin Builder and then receive Mt. Gox bitcoins that are held in Bitcoin Builder’s account on the exchange.
Traders on Bitcoin Builder must also submit identity documents before they can start making transactions.
The Gox question
Trades on Bitcoin Builder hinge on Mt. Gox’s future. Customers who are selling their Mt. Gox bitcoins on Bitcoin Builder are taking a 78% discount on the price of their coins in exchange for the certainty of holding funds that are not subject to Mt. Gox’s withdrawal restrictions.
Although the exchange has said the withdrawal freeze is due to technical problems and that it will be lifted soon, customers appear to be losing their confidence that the exchange will do as it says. This is reflected in the plummeting price of bitcoin to US dollars on Mt. Gox.
Then there are the arbitrageurs who are able to exploit the spread between prices at Mt. Gox and other exchanges so long as the withdrawal freeze stays in place.
These traders may be depositing fiat into a Mt. Gox account in order to buy more discounted bitcoins and then offloading them on Bitcoin Builder. With bitcoins in hand, they can then make a profit selling on another major exchange.
However, if Mt. Gox were to announce more serious problems — such as insolvency, for example — then Bitcoin Builder’s trading volume would vanish. Jones said:
“If Mt. Gox really is insolvent, or if they somehow freeze Bitcoin Builder’s account, or if they say that some of these bitcoins turned out to be fake because of transaction malleability, then there’s going to be a lot of angry people [on Bitcoin Builder].”
Jones himself is betting that Mt. Gox is solvent and that it is indeed suffering from the technical problems it claims it is experiencing.
“There is a saying, ‘never attribute to malice that which can adequately explained by incompetence’. Mt Gox is not Google or Apple. But they are a real company and Karpeles has made loads of money over the last few years. So he’s not just going to shut it down,” Jones said.
About Josh Jones
Josh
Jones claims he knows a thing or two about running a high-growth technology company with an inexperienced team – which is what Mark Karpeles is being accused of at Mt. Gox.
Jones is one of four co-founders of Dreamhost, a web hosting company that was formed when the group were computer science majors at Harvey Mudd College in California.
The company was founded in 1997 and now has revenues of $45m, according to Jones. Like Mt. Gox, the firm raised funds from professional investors.
“I just think [Karpeles] is just really bad at PR. At Dreamhost I’ve had PR disasters myself. We made a billing error and we over-billed people millions of dollars, and we weren’t as apologetic as we should have been. Immediately, it was like, oh, that didn’t go down well!”
Jones stepped away from operational duties at Dreamhost in March 2010. He said he sold his shares in the company in November, but he uses his track record with the web-hosting firm to prove that Bitcoin Builder should be trusted by its customers.
“That’s why I put my LinkedIn profile and my real identity on the Bitcoin Builders site. I started the LA Bitcoin meet up, I ran Dreamhost. People were already trading on forms, and I was like, man – people are just trusting some dude on a forum. So people are trusting me,” he said.
Jones said he did not know Karpeles personally, except for an email exchange two years ago when Bitcoin Builder was initially launched as a tool to allow automated bitcoin buying on Mt. Gox.
He said Karpeles had emailed him suggesting ways they could make the tool more efficient and split the revenue. Jones then proposed investing in the then-nascent exchange, but Karpeles never responded.
Potential risks
Trust has to be abundant when trading on Bitcoin Builder. For example, customers selling their Mt. Gox bitcoin must transfer their coins to the Bitcoin Builder account with no guarantee that they will receive coins in return.
Bitcoin Builder processes withdrawals daily, at 11pm Pacific Standard Time. Customers selling bitcoin therefore potentially have to wait for an anxiety-laden 24 hours before their wallets outside Mt. Gox are credited.
One Bitcoin Builder trader, who runs a ‘bitcoin hedge fund’ in New York City, says he was reassured by Jones’ transparency about his identity. The trader, who wished to remain anonymous, said:
“[Jones] is a public person with a reputation and a career — so I am willing to believe that he is not a scammer. Like anything, you make sure everything works first with a small amount.”
The trader said he had purchased more than 300 Mt. Gox bitcoins through Bitcoin Builder.
Jones is running Bitcoin Builder by himself at the moment, having written all the software that the site runs on. He is considering adding more features, like leverage and automated withdrawals.
In the meantime, the exchange is doing booming business, and providing a valuable opportunity for Mt. Gox customers to get their funds out.
My toughs: Wow... This could actually work !
we already have press board
I know but its so confusing , and hard to read evry news. I asked people what think about this. And u can look at poll, most of them want to see this working. I will try and see how its going. If that is not forbidden ?
I like this more because there are more news per page.(Less loading pages clicking waiting etc)
Exactly and when u want to read news u just read and scrolling for next news, no need for looking at only names of threads searching for newest and so on. Feel free to add ur news that i did not posted. Then on 01. March when i start new thread much better organised than this but doing same thing i will chose one of u who posts here to be my coworker
. Also i will do some give aways . That thread will be awesome u will see . I have great ideas for it . we already have press board
I know but its so confusing , and hard to read evry news. I asked people what think about this. And u can look at poll, most of them want to see this working. I will try and see how its going. If that is not forbidden ?
I like this more because there are more news per page.(Less loading pages clicking waiting etc)
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