Tag Archive : Bitcoin

Court Upholds Nordea Bank’s Ban on Employee Bitcoin Purchases

Nordea, a Danish Bank, won a court case allowing it to prevent staff from buying Bitcoin and other cryptocurrencies.

Nordea first banned its employees from owning bitcoin in January 2018, after which Danish finance and workers’ rights figures threatened legal action. Read More

Survey: Bitcoin Mining Firm Finds Nearly One-Third of Americans Think US Dollar Backed by Gold

Genesis Mining, a cryptocurrency miner, found that one-third of Americans believe the US Dollar is still backed by gold. The dollar has not been backed by gold since 1973.

The survey, conducted in late September, included 1,000 participants. Its goal: to determine just how much U.S. citizens understood money. In late October, the miner found that 29% of those surveyed believed a gold reserve backed the U.S. dollar. 24% of respondents answered that the Federal Reserve was tasked to secure the nation’s gold reserve. Read More

New Bitcoin Exchange Traded Product Launches on Switzerland ‘s SIX Stock Exchange

New York-based WisdomTree launched a new bitcoin exchange traded product (ETP) on Switzerland’s SIX stock exchange. This product, which is physically backed by crypto, will compete on SIX with Amun AG’s similarly-designed bitcoin ETP, and is settled in the underlying asset.

WisdomTree, which has provided gold-based ETPs in Europe since 2003, said its Bitcoin ETP provides investors, “a simple, secure and cost-efficient way to gain exposure to Bitcoin while utilising the best of traditional financial infrastructure and product structuring.” Under the WBTC ticker, it is listed at a total expense ratio of 0.95%. Read More

German Bundestag Approves New Law So Banks Can Sell And Custody Bitcoin

German banks will begin to offer the sale and storage of cryptocurrencies under new legislation. The banks had been barred from offering direct access to crypto assets.

The new law, which was written in the fourth EU Money Laundering Directive, rewrites this starting in 2020. Reported by Handelsblatt on Wednesday, the German federal parliament, the Bundestag, passed the bill, which will likely be signed by the nation’s sixteen states. Read More

How Bad is Bitcoin Mining for the Environment? New Research Suggests Not So Bad.

Bitcoin mining emissions were on par with Estonia, suggesting that the climate change impact of the first digital asset is less than previously reported. Furthermore, the research seems to suggest that where Bitcoin is mined contributes to how much carbon Bitcoin emits. With so much of the mining being done in China, one might wonder if that country’s infrastructure is more to blame than Bitcoin. Read More

Bitcoin Price Falls to Lowest Level Since May

The Bitcoin price fell to $6,558.14 on Monday before rebounding on Tuesday. Now at its lowest level since May, Bitcoin has lost $3,000 in value one month after China cracked down on businesses involved in cryptocurrency operations. Bitcoin is currently trading at $7,222.12.

Bitcoin increased in price to $10,000 last month after Chinese President Xi Jinping spoke highly of blockchain technology, though there were no indications he included cryptocurrencies in that sentiment. Read More

Here’s Why Bitcoin Hasn’t Been Regulated Into Oblivion, According to Facebook’s Calibre Head

David Marcus is leading up Calibre, Facebook’s cryptocurrency project. As reported by CNBC, he said Wednesday that Bitcoin is digital gold, and not a good currency for transactions.

“I don’t think of Bitcoin as a currency,” Marcus told an audience at the New York Times DealBook Conference in New York. “It’s actually not a great medium of exchange because of its volatility. I see it as digital gold.” Read More

Chinese Bitcoin Miners Get Reprieve from CCP

China’s National Development and Reform Commission (NDRC) has removed crypto mining activities as an unwanted industry from its Industrial Structure Adjustment Guidance Catalog.

China has long been a mining leader in the crypto industry. As a world leader in computer hardware generally, the country was in a unique position to take lead the way when it came to mining bitcoin and other cryptocurrencies. As in most hardware-intensive industries, the lion’s share of cryptocurrency mining hardware comes from China. Read More

Centrals Banks Issuing Digital Currency is Inevitable, says Federal Reserve President

Philadelphia Federal Reserve Bank President Patrick Harker said on Wednesday it is “inevitable” that central banks will issue digital currency. He also said the United States should not be the nation to lead such a move. He had been asked about the Fed’s creation of “FedNow,” its own real-time payments system. The comments were first reported by Reuters.

“Frankly I don’t think we should be the first mover as a nation to do this,” Harker said at a St. Louis community banking conference. He noted the dollar’s status as world reserve currency and underscored the need for experimentation and tests when it comes to such technology. Read More

The Bitcoin Halving 2020 Might Have MASSIVE Implications for BTC Price

The Bitcoin halving is coming next year.

Bitcoin’s emission rate will be cut in half in 2020. This is known as a block reward halving. It is the third reward halving since Bitcoin was first introduced to the masses in 2009. Given the scarcity aspect of the world’s leading cryptocurrency, this reduced emission rate can have a significant impact on the price.

Historically speaking, block reward halvings are significant for Bitcoin. It helps reduce the amount of “new” BTC brought into circulation. At the current rate, 12.5 BTC is added to the supply every 10 minutes. Over the course of a day, that equals to 1,800 bitcoin, or $1,8 million at current prices. For a currency which is deemed to be scarce, there is still a lot of value being brought into circulation every day. Read More

Bitcoiners Sue Banks in Israel

Israeli banks are facing lawsuits brought by domestic cryptocurrency enthusiasts. A recent freedom of information request demonstrates how Bitcoin holders in the country want more clarity regarding bank policies on cryptocurrency trading. Most banks there, like in much of the world, are cautious when banking blockchain companies, which makes life difficult for enterprise businesses in the blockchain industry.

In recent years, Israel has become a hotbed for cryptocurrency activity. Increasingly, people aim to obtain cryptocurrency, and this is often done through a bank account. For Bitcoin enthusiasts, this proves to be rather problematic in the country.

Read More

Bitcoin Futures Contracts Debut Next Month as SEC Delays Bitcoin ETF Decisions

The US Securities and Exchange Commission continues to delay its Bitcoin ETF decision on the Bitwise Bitcoin ETF Trust and the VanEck SolidX Bitcoin Trust, while Bakkt claims its acquired a New York state trust charter through the New York State Department of Financial Services (NYDFS), enabling the company offer its physically-settled bitcoin futures contracts.

For the cryptocurrency community, the Bitwise and VanEck delays are nothing new. Rejection or approval of those investment vehicles will now have to wait until October 2019. Read More

A Closer Look at the Two Letters Bitcoin Users Received from the IRS

The IRS wants to learn about the transactions of Bitcoin users in the United States. Despite the perceived privacy of Bitcoin and alternative currencies, crypto users are not exempt from taxation.

Anyone who moved cryptocurrency through a centralized exchange are required by law to file their taxes properly. Just last year, the US government won a court order for CoinBase’s customer list. Read More

Japanese Bitcoin Exchange Suffers $32 Million Hack

A Bitcoin exchange in Tokyo halted services on July 12 and announced a major hack. Bitpoint, a Japan-based and licensed cryptocurrency exchange, was hacked for $32 million or $3.5 billion yen. Customers received an email alerting them to the fact that Bitpoint would cease all services while it investigates. Read More

Max Keiser: Bitcoin is a Risk-off Store of Value Safehaven

(GSB) GoldSilverBitcoin CEO Justin O’Connell interviewed Max Keiser briefly at Bitcoin 2019, a conference in San Francisco hosted by Bitcoin Magazine.

What is surprising, novel, ironic or controversial about Bitcoin in Q2 2019?

MK: I think it’s the recognition now by mainstream analysts and media that bitcoin represents a store of value. I think that story, which we’ve been talking about for years, seemed ludicrous a few years ago. But, more and more on the institutional level they’re getting to understand that this does represent a risk-off store of value safe haven. Read More

Bitcoin is Near $10,000

Bitcoin is poised to move beyond $10,000. At the time of writing, it currently sits at $9,922, and has already surpassed $10,000 on Chinese exchanges. Its record high is $19,666. Bitcoin is currently at its highest price since May 2018.

Bitcoin has tested the technical resistance set in April 2018 of $9,949, and the psychological resistance of $10,000 is next. Since April 1, Bitcoin is up 140 percent. Read More

Everything You Need to Know about Binance and its Formal Entry into the US

Binance, the world’s largest cryptocurrency exchange, announced that starting in September it will disallow U.S. residents from using its flagship exchange. Instead, it will launch a U.S.-based service, called Binance US, where U.S. passport holders will face restrictions when using the website.

Binance has been known for letting anyone use its services to trade tokens. The Malta-based exchange will partner with Bam Trading Services, a FinCEN-registered company with links to Binance-backed Koi Compliance, the “fully-managed solutions” department of over-the-counter (OTC) crypto trader Koi Trading. Binance Labs invested $3 million in Koi Trading on January 24. Read More

This Crypto Trader is Keeping Her Eye on Bitcoin ETFs, Futures and Institutional Interest

Crypto Wendy, who is keeping her eye on Bitcoin ETFs, futures and institutional interest in the crypto market these days, wants you to know that she is no trading expert.

“…I am here to learn and grow with everyone,” she says.

She started out in the space as a trader and hosting free meetups at Cryptospace in San Pedro, teaching and talking about basic trading methods. Three times a week, she does a live stream and discusses news and current events that impact the market on her YouTube channel. She believes we’ve seen the bottom in the crypto market for now. Read More

Bitcoin User from Iran: “Bitcoin is the Only Option We Have”

Ziya Sadr spoke with Let’s Talk Bitcoin, a cryptocurrency podcast, about the importance of Bitcoin in Iran. He discussed how it allows great financial freedom for the Iranian people, and how Bitcoin is superior to other cryptocurrencies in Iran.

“The thing about bitcoin is that we are on equal ground with the rest of the world and that is nice for a change,” Mr. Sadr, who is 25 years old, told the long-serving podcast. “We’ve never been on equal ground. We’ve had inflation, we’ve been sanctioned by the whole world. With Bitcoin, we are on equal ground with the rest of the world and this is kind of new.” Read More

Jim Rogers: “Cryptocurrencies are Going to Disappear and Go to Nothing.” The Reason Why Might Shock You.

Jim Rogers believes governments will interfere with the rise of bitcoin and cryptocurrency, but not blockchain.

“The blockchain has a great future,” the famous investor told BBLOKK OFFICIAL. “Blockchain is changing everything we know, and it’s going to change even more. A lot of people are going to lose their job because of blockchain, but a lot of people lost jobs because of electricity, and electricity turned out to be a good thing for all of us; likewise with blockchain.” Read More

Bitcoin is Acting More Like a Safehaven Than Gold

Bitcoin is acting similar to a safe haven asset with uncertainty plaguing the stock market amid President Donald Trump’s aggressive trade policies. Bitcoin was trading at over $8,700 earlier this week and traded above $7,800 on Wednesday morning.

“I watch bitcoin as a signal, as an indicator, not because I want to own it,” said Bleakley Advisory Group’s Peter Boockvar, who is generally bearish on bitcoin. “Over the last couple weeks, we’ve seen this sharp rise in bitcoin, and to me, that was saying something in terms of what markets were thinking about what the Fed was going to do [and about] the turmoil created by the threatened tariffs. ” Read More

What Bitcoin’s USD Exchange Trading Volume Tells Us About the Market

In spite of bitcoin’s recent gains, the digital currency’s exchange volume still remains well below historic highs. The peak for Bitcoin exchange volume was December 2017, just before the entire crypto index collapsed after the 2017-2018 ICO craze.

US exchange volume fell precipitously after a November high. On May 28, the available stat, US trade volume for bitcoin sat at 150,000,000. When it peaked in December 2017, exchange volume shy of 4,000,000.

In bitcoin’s history, USD trading volume has increased exponentially. In April 2013 amid bitcoin’s first bullish run to $1,000, USD bitcoin exchange trading volume touched $55,000,000. Later that year, in November 2013, bitcoin USD exchange trading volume peaked at shy of $175,000,000.

More recently, in November 2018, amid what many termed a crypto bear market, bitcoin’s exchange trading volume surpassed half a billion. The current 150,000,000 is comparatively small for USD exchange trading volume compared to bitcoin’s recent bull runs.



What this means is ambiguous. Cryptocurrency enthusiasts have long claimed major crypto exchanges falsify trade data. Furthermore, the cryptocurrency market in late 2017 was much different than it is today, for 2017 was the Age of the ICO, when projects were spinning up tokens, launching crowdsales, and paying money to be listed on exchanges.

Now that the ICO craze has calmed down, and the market has returned to earth, increased scrutiny on the token space has forced exchanges perhaps to implement further reaching AML and KYC.

When we zoom into the 30-day timescale for Bitcoin trading volume on US based exchanges, trading peaked on May 13, 2019 at just over $7,000.

Coinbase, perhaps the leading bitcoin exchange, has been busy adding tokens in recent months in order to establish itself in a market where Binance came out of nowhere.

The San Francisco-based exchange hinted this week that it could introduce bitcoin margin trading, bringing ever more sophistication to what’s still, admittedly, a nascent industry. Bitcoin margin trading has been BitMEx’s territory until now, but that could be changing.

With the halvening one year away, and bitcoin USD exchange trading volumes nowhere near all time highs, its easy to imagine increased trading volume and price in the mid-t0-long term. In the short term, with $9,000 showing formidable resistance, there’s no telling where bitcoin could go.

Bitcoin Price is Having its Best Month in Years

In 2020, the next Bitcoin halving will take place. Increasingly over the coming months, this will become discussed on internet forums, social media, and at conferences. The current bullish cycle we see, even if shortlived, is most likely a sign of what’s to come throughout the rest of 2019 and 2020 due to the halving event.

There are currently 17,700,000 bitcoins in circulation. That means just shy of 85% of the bitcoins to ever be produced have already been mined. There are just over 3 million bitcoins left to mine. There are at present 1,800 bitcoins minted per day.

The next Bitcoin halving takes place on May 24, 2020. The block reward for miners on the network will decrease from 12.5 to 6.25 bitcoins. This represents the third “halving” event ever in the history of bitcoin. Due to Bitcoin’s overall controlled supply of just 21 million, that the supply halves every four years ensures scarcity for bitcoin.



“Large drawdowns are not unique to digital assets and occur across all asset classes and markets, typically following periods of excessive risk-taking,” wrote Grayscale about halving. “These ‘re-pricings’ can create compelling investment opportunities and in many cases offer above-average risk-adjusted returns in the years that follow. For investors with a multi-year investment horizon and a high-risk tolerance, the confluence of discounted prices, improving network fundamentals, strong relative investment activity and the upcoming halving may offer an attractive entry point into Bitcoin. This is especially relevant for investors building core strategic positions in Bitcoin over time.”

The daily price change in May has averaged 4.7%, compared with 3.5% in April and 1.1% in March, reports Bloomberg. December, the last time prices had swung so much, averaged 4.2%.

While bitcoin fell on Tuesday 2.4%, it had not fallen in the four days prior. Bitcoin is currently at $8,860. The last time the price of bitcoin reached $9,000 was a year ago.

“The recent surges in Bitcoin are mainly based on the supply side,” wrote eToro’s Mati Greenspan in a note this week. “There’s already a shortage of Bitcoin in the world and with the halving event coming up next May, the countdown to even less supply has already begun.”

The Crypto Index pushed its upper band during Tuesday’s trading sessions and then fell. Bitcoin makes up 30% of that index.

Brexit Leads to Record Losses For Pound Sterling

With Brexit still looming over the UK, and the end of Theresa May’s leadership putting the country in yet another stage of transition, the pound has endured its longest losing streak against the euro since the creation of the latter currency 20 years ago. In recent weeks, the sterling has recorded its steepest losses ever when compared to major world currencies.

The pound dropped from just over  €1.17 to under €1.14. It fell from over  $1.32 to less than $1.27 versus the dollar – its lowest level since February.

Financial markets have declined over the past month over US and China trade war fears. Donald Trump’s administration raised the stakes by ramping up US tariffs from 10% to 25% on $200 billion worth of Chinese imports. Tensions raised as the US blacklisted the Chinese telecoms company Huawei. The FTSE 100 has fallen by more than 2% to trade at about 7,270.

UK inflation increased to above the government’s 2% target in April. Last week, U.K. Prime Minister Theresa May resigned as the leader of Britain’s Conservative Party.

“It is and will always remain a matter of deep regret to me that I have not been able to deliver Brexit,” said May outside No. 10 Downing St. in London during a speech at the end of which she shed a tear. May spent nearly three years trying to deliver the result of the 2016 Brexit referendum.



The Bitcoin Brexit Boon

According to one expert, increasing numbers of millionaires in the UK are moving their cash into cryptocurrencies, such as Bitcoin, due to fear over the possibility of a Jeremy Corbyn-led government.

With Conservative Party support waning thanks to Brexit chaos, a Corbyn-led Labour Party could take power. Nigel Green, founder and CEO of deVere Group (which has more than $12 billion under its advisement), believes the nation’s rich, fearing such a result, are turning to Bitcoin and Ethereum.

“High-net-worth individuals in Britain and wealthy international investors with UK assets and business know that they will be hit by Mr. Corbyn’s tax hikes on wealth, income and inheritance,” Green said.  “As such, many of them aren’t waiting to find out how his anti-wealth rhetoric would play out, and more and more of them are seeking advice on established, legitimate overseas opportunities to create, build, and importantly, protect their wealth.”

He adds: “An increasing conversation we’re having with clients in this regard involves investing in cryptocurrencies, such as Bitcoin, Ethereum and XRP, in lower tax, crypto-friendly jurisdictions. In a broader sense, high-net-worth individuals are increasingly seeking exposure to the associated benefits of these digital assets as our recent global survey highlights. It can be expected that a Corbyn-led government will help fuel this trend.”

This Bitcoin Transactions Stat Could Be A Good Price Indicator for the Cryptocurrency

In analyzing the state of the Bitcoin network as a payment system, people often point to transactions per day. Yet, since Bitcoin is a one-to-many payments solution, meaning one transaction can have multiple recipients, to truly know the state of the payment network, one must dig a bit deeper.

Increasingly, people are catching onto the fact that outputs per day, as illustrated at Outputs.Today, which is a feature used by exchanges and senders of considerable bitcoin transactions to minimize the fees they must pay to miners.

Critics of Bitcoin as a payment network point towards high transaction fees, which have at various points through the lifecycle of bitcoin, such as in mid-2017, been a main critique of the network.

Exchanges have faced pressure to batch transactions, and thereby make better use of this scarce block space. Bitcoin’s scaling issues during periods of increased transactions meant that transactions took longer and cost more.

Exchanges, mixers, payment processors, and mining pools employ ‘batching’. A sender can do this by combining transactions into one input. This means the transaction input has multiple outputs (addresses to send bitcoin or recipient).

The Bitcoin mempool is a pool of bitcoin transactions that have as yet been confirmed. Sometimes this becomes congested and transactions slowed. By combining, say, 10 payments into one transaction, block space might be freed up. Transactions can have unlimited outputs. Batched transactions might have three or more outputs.

Outputs Per Day

Outputs.Today tracks ‘outputs per day’. The top of the website reads, “better indicator of overall economic activity on the bitcoin blockchain than transactions per day.”

The website claims the number of total outputs is a more accurate indicator than the number of transactions. “Large players in the Bitcoin space use batching – the process of including multiple outputs in a given transaction – to reduce their overall transaction fees,” the site says. “Therefore, looking at only transactions misses an important part of the picture.”

As seen in the chart above, the Average Outputs to Transaction Ratio declined throughout 2018. The ‘Average Outputs Per Block’ in 2018 approximately mirrored ‘Average Transactions Per Block’.

On January 4, 2018 we saw the average output per block reach a high of 7,420. The peak for Transactions Per Block came much earlier when there were 2,532 transactions per block on January 4.

Throughout 2018, the Average Outputs to Transaction Ratio has declined. So far in 2019, the use of transaction batching has been on a steady rise, and just recently, accompanying the price rise, it spiked.

 

This could be indicative of one particular important price indicator: buying demand.

 

Here’s What Tony Robbins Actually Thinks About Bitcoin

The folks over at Robbins Research International – the website for Tony Robbins – recently penned a piece on Bitcoin. We thought we’d break down some of the advice which appeared first on the acclaimed investor’s blog.

The piece first defines bitcoin. “It is a digital system of (non-physical) ‘tokens’ which have an ascribed value and are used for trading goods or services, much like cash or credit.” Read More

Biological Attack Threatened at India IT Firm if $100 Million Dollar Bitcoin Ransom Not Paid

Hackers threatened the Bengaluru-based IT giant Wipro with a biological attack if the company did not pay $77,760,498 USD (500 crore) in bitcoins by May 25. In an email sent on Friday the sender threatened to use Ricin, a natural toxin, in food served in cafeterias, drones or on toilet seats. The email, with a link for payment, contends a two gram sample of the toxin will be sent to a Wipro office in the coming days.

“The mail has mentioned that a biochemical powder (Ricin) will be sent in covers to your (Wipro) offices to assure that the threat is not fake,” said a police source on the condition of anonymity. The toxic protein (Ricin) is made out of castor bean, from which castor oil is also produced.



The company, who is not changing its operations but is bolstering security, registered a complaint with local authorities. “Wipro confirms that it has filed a complaint with the local law enforcement authorities after receiving a threatening letter from an unidentified source. Wipro has augmented security measures at all its office locations. There is no impact on the company’s operations. We have no further comments as the investigation is ongoing”, the IT major said in a statement.

The Bengaluru police cyber crimes unit is investigating the case, currently looking to find the origin of the email. Police have said the email might be a hoax.

“We will have to explore and find out whether these are genuine are not,” noted Additional Commissioner (Crime) of the Bengaluru police S Ravi.

“We have registered the case under Section 66F of the IT Act (cyber terrorism) and are investigating it,” said Deputy Commissioner of Police (Crime) Anand Kumar. Although the company declined to mention who sent the threat mail, police sources said it was from some “ramesh2@protonmail.com” mail ID.

“Though we got some clues, we cannot share, as the investigation is underway. We have to also find out who all are involved in it from the IP address from where the threat mail was sent,” noted Kumar.

The IT behemoth received a similar threat, which turned out to be a hoax, in 2013. An anonymous letter threatened to blow up the company’s campuses in Bengaluru.

Since the threat, WiproBSE shares are down an unnotable one-tenth of a percent. The ransom threat underscores the useful nature of bitcoins in the now.

While Wipro has been threatened with a biological attack, hackers typical merely threaten to destroy a person or company’s important data while demanding bitcoins. Reports say Wipro is bolstering security in the wake of threats at all of its offices. 

“We have augmented security measures at all office locations, though there is no impact on our operations,” said the city-based IT firm in a statement emailed on Saturday.

The toxic material can be fatal if inhaled, taken as a pill or mixed in water for anyone. “As the investigation is going on, we would not like to comment further on the issue,” said Wipro in the statement.

Golden State Warriors Owner Tweets Digital Currency Coke vs. Pepsi Analogy

Chamath Palihapitiya, an owner of the Golden State Warriors professional basketball team, recently took to twitter to celebrate the digital currency Bitcoin.

“Reiterating my belief about $BTC,” the venture capitalist from Sri-Lanka (raised in Canada) tweeted. “It’s the ultimate insurance policy against autocracy, currency curbs and other forms of value destruction.”

When asked to compare Ethereum with Bitcoin by a fellow Twitter user, Mr. Palihapitiya replied: “Coke v Pepsi. Pick the more mainstream option that more people can easily consume. Both will make money but bigger is always better.”

Mr. Palihapitiya has told his friends it is “entirely rational to allocate one percent of your assets to Bitcoin.” It’s what he’s done.  

As Alan Silbert, founder of luxury Bitcoin marketplace BitPremier, correctly pointed out on Twitter, Mr. Palihapitiya has called Bitcoin “schmuck insurance.”

He wrote: “As the 2008 crisis proved, schmucks can cause world damage.”

 

It’s no secret that Mr. Palihapitiya, a former executive with Facebook, invests in bitcoins and is also one of the largest holders in the world alongside the Winklevoss Twins. The serial entrepreneur likes Bitcoin for its electronic, peer-to-peer nature.

“Bitcoin today is in roughly the same development phase that TCP/IP was back then,” he once wrote for Bloomberg. “Instead of IP addresses and websites, Bitcoin has unique strings that represent money and a mechanism to send these strings securely and safely wherever you want. It is a protocol that is allowing money to flow around the world much like TCP/IP allows information to flow — in an orderly, predictable way.”

In his support of Bitcoin, he underscores not bitcoin’s future, but the ways in which Bitcoin is working today.

“Bitcoin is being used all over the world in a wide range of ways already: to avoid the high fees of using a Visa card in San Paulo; to settle the purchase of a million dollar home in Buenos Aires; to pay a mechanic for services in Lagos; to provide Egyptians access to a liquid currency,” the Silicon Valley veteran wrote in the Bloomberg article that appeared in 2013. “The list goes on.”

It’s a diverse range of uses for the digital currency, he notes.

Because “the world needs more red pills”, he says, he hopes Bitcoin succeeds.

“There is a famous scene in the Matrix where Morpheus asks Neo if he wants to take the blue pill and go back to life as he knows it or take the red pill and see life as it is,” he once wrote about Bitcoin. “Neo takes the red pill and begins a period of exploration about humanity, hierarchy, rules, etc. Bitcoin is a red pill. There will be some bad and awkward moments, but lots of good, useful and powerful things will also ensue. It will reallocate financial strength and power to the people versus keeping it within a few centralized authorities.”

 

Mike Cannon-Brookes admitted he likes to gamble – on bitcoin

Mike Cannon-Brookes admitted he likes to gamble – on bitcoin.

Cannon-Brookes tweeted on Monday:

Cannon-Brookes, who mistakenly thinks bitcoins come in ounces,  tweeted later that he “bet” on bitcoin, and he has done well based on the assumption that, “It will be worth a lot, or zero”.



He added: “Much like a horse racing. Not like investing.”   

Cannon-Brookes later tweeted that $10,000 USD in bitcoins purchased in July 2010 would today be worth more than $US 146,428,889.

Cannon-Brookes is believed to enjoy bets in the crypto currency space via tech investor Blackbird Ventures and bank disrupter Tyro.

The Tyro Fintech Hub was opened in February 2015. The Hub takes up the entire third floor of Tyro’s new offices in the newly refurbished art deco building at 155 Clarence Street Sydney.

Cannon-Brookes has condemned what he sees as overreaching regulation by Australian authorities.

In reference to Bitcoin company CoinJar moving to the UK to avoid Australian bnitcoin sales tax, he tweeted: “Make a stupid law. Lose business. When will we learn Aus?”

Mr Cannon-Brookes, whose company Atlassian is currently valued around $US4.25 billion on the NASDAQ, has received high praise.

Tesla CEO Elon Musk thanked Australian billionaire Mike Cannon-Brookes for promising to fix South Australia’s energy crisis throughj large-scale battery storage.

Mr Musk tweeted“@mcannonbrookes Can only happen with your support, and working closely with key govt and utility leaders who are strongly committed to trying new approaches.”

 

 

The Bitcoiner’s Guide to Travel

Travel for Bitcoin has become much easier since 2013, when Bitcoin skyrocketed above $1,000 for the first time. Perhaps, you’ve seen a bitcoin sign hanging in the window of a streetside business. There are, to be certain, an increasing number of merchants accepting bitcoin, as well as individuals curious about using the first financial technology based on the blockchain. This is a Bitcoiner’s guide to travel.

Transportation

When it comes to flying, there are several options to use Bitcoin. One can fly American Airlines for bitcoins via Gyft. In Europe, Asia and Africa, Abitsky accepts the digital currency for flights, as well as hotels and car rentals. Moreover, Airbaltic accepts bitcoins for destinations worldwide. The reputable service, Cheapair, represents one of the most recognized bitcoin-accepting merchants in the world. Btctrip caters specifically to the Bitcoin community, and Destinia has won favor for some bitcoiners. Gift off turns bitcoin into UK National Rail vouchers. Gasoline gift cards via Coinfueled.com can save you money on a road trip.

Related: The Physical Bitcoin Market Not Available to North Americans

Accommodations

Of course, once you arrive at your destination, it might be a good time to rest. Towards this end, Expedia accepts Bitcoin for one’s travel needs. As well, Hotelgo24.com. Through Gyft, one might search gift card offers on Bedandbreakfast.com or peruse Orbitz’s Globalhotelcard.com. Further, Egifter has offered accommodations at the San Luis Resort.

Dining

For dining, Bitcoin Restaurants maintains a comprehensive list of places where one could pay for dining with bitcoin. Restaurant options might also be found at Coinmap.org, Gyft, EGifter and AirBitz. If you’re looking to shop for groceries in bitcoin, and save a little money instead of dining out, you might find options at Coinmap or Usebitcoins. Whole Foods gift cards can also be found at Gyft.

Bitcoin ATMs

Likely during the course of your travels, it might prove convenient to exchange bitcoins into the local currency. A robust network of 1,000 bitcoin transaction machines worldwide makes this possible, and indeed is perhaps an unsung hero of the Bitcoin ecosystem. On Coinatmradar one can find the closest so-called ‘Bitcoin ATM’ near them.

There are different types of ATMs, so ensure a machine you intend to visit does what you need. Some bitcoin ATMs only turn bitcoins into a local currency, while others vice versa. Two-way Bitcoin ATMs offer the most robust services of any machines, allowing customers to exchange bitcoins for local currency and vice versa.

Coupons

Taking the time to find coupons relevant to your life saves money over time. And Bitcoin has even this covered. Groupon via Gyft is a great option, as Grapo.bg, which helped Felix Weis, a Bitcoin traveler, navigate Bulgaria. We’ll hear from Mr. Weis shortly.

Related: Rap Legend, Coinbase Investor Nas’ Favorite Bitcoin Charity is Watsi.org

Debit Cards

Using a Bitcoin debit card won’t win you much (if any) cred among the cypherpunks in the Bitcoin scene, but they can be extremely convenient.

Bitcoin prepaid or debit card from Xapo, Coinbase, BitPay, Bitplastic, or others can make traveling on bitcoin much easier, as the debit cards allow for fast transactions and access to SWIFT, the global payment system used by MasterCard and Visa, via Bitcoin.

Directories

Directories like Airbitz, Coinmap, Cointerest, and Bitcoin Restaurants, Bitcoin.travel can help you find bitcoin merchants. Researching and joining localized bitcoin-oriented social media group can help you integrate into a local Bitcoin community for the time you will be a guest there.

Traveling on Bitcoin might not be as hard as it seems. More than 5,000 convenience stores in Taiwan accept Bitcoin.

Bitcoin Traveler

“In the beginning, I wasn’t sure if this could be done,” Felix Weis, who completed a trip around the world using mainly bitcoins in 2016, told GoldSilverBitcoin.com. Before he left for his trip, the Luxembourger lived in Berlin. He set out rules for his journey as such:

  1. No banks. And that meant no Western Union, no money exchanges, no converting USD to euros, no euros to yen.
  2. Bitcoin first. He had to use Bitcoin whenever possible.
  3. Cash only for bitcoin. Recognizing that there would be times when he would need local currency. He allowed himself to do peer-to-peer exchanges of bitcoin for cash, which, he says, led to some “fun adventures.”

The 28-year old used websites like Coinmap, a directory of Bitcoin-accepting businesses, to know where he could spend coins. He bought on Interrail pass with All4btc.com, a site which will buy something for you and you send them the bitcoins. He told GoldSilverBitcoin.com it would take between one afternoon and an entire day to research how to get around and find food in the next country. He often harbored uncertainties about how he would pay for things before departing for the next location.

He paid for hotels and flights via Bitcoin on the internet. People might use their credit cards at dinner, and he would repay them in bitcoins.

The hardest country for Mr. Weis was Bulgaria. He could not find a restaurant that would accept his Bitcoin. A man with whom he scheduled an appointment to make a Bitcoin transaction did not show. He ate nothing but his hotel’s continental breakfast – cereal, orange juice, and apples – for two days.

“Usually I was able to talk to people into accepting some Bitcoin, but in Bulgaria, few people spoke English, so the language barrier created a problem,” he said. He had a bit of cash at that point. He almost gave up.

“I spoke with a Bulgarian friend on the Internet and he told me about Grapo.bg, a Groupon-style website that accepts Bitcoins for vouchers.”

In Argentina, there was no Uber after the country banned the service. In other countries, Mr. Weis used the Bitcoin service Bitcoin Builder to pay for Uber in bitcoins. He reached out to the Argentina Facebook group, where he ultimately found a ride to the airport.

He sought out Bitcoin ATM’s, which were particularly helpful in places like Macau, Japan, and Mexico, but said there needs to be more in airports. He also noted how popular Bitcoin is popular in Venezuela.

His overall thoughts on the trip?

“The world is beautiful,” he concludes.

Buffalo Judge Says Bitcoin is Not Money

(GoldSilverBitcoin) U.S. Magistrate Judge Hugh B. Scott in Buffalo, New York ruled that bitcoin is not money in a money laundering case out of Buffalo. Scott ruled instead that Bitcoin is akin to a commodity, a collectible, but not currency.

Scott’s decision may not be upheld, as the district judge is reviewing it and reserves the right to take a different position, but it does raise interesting legal questions for the digital currency.

Related: Digital Asset Exchange ShapeShift Raises $10.4 Million in Series A

“The whole point of bitcoin is to escape the entanglement with sovereign governments,” Scott noted. “Money is not just any financial instrument or medium of exchange that people can devise on their own.”

Despite his harsh words about Bitcoin, he compared the commodity to collectibles such as “marbles, Beanie babies or Pokemon trading cards.”

Scott’s decision was based on a recommendation to U.S. District Judge Charles J. Siragusa’s, but will likely not be upheld in higher courts.

Scott’s decision came in a money laundering case against Richard Petix, a 31-year-old Rochester man with a previous child pornography conviction.

Scott’s decision, and they were obvious in the money laundering case against Richard Petix, a 31-year-old Rochester man.

Petix, who has a previous child pornography conviction, is accused of selling $13,000 in bitcoins to an undercover federal agent as part of a drug distribution and money laundering scheme. Scott recommended the money laundering charge be dropped because bitcoin isn’t money.

Despite Scott’s recommendation, Petix’s defense lawyers are withdrawing their motion to dismiss and are now planning to take his case to trial, in part because of Siragusa’s expected decision and because they want to get the matter resolved quickly. They also claim their client is far removed from the dark net and criminal element that uses bitcoin to hide its identity and location.

“This kid traded bitcoin like other people trade baseball cards, stamps or coins,” said defense lawyer Matthew R. Lembke of Rochester.

Deciding what Bitcoin ought to legally be considered for tax purposes has been a hot topic.

“It has some mainstream appeal,” said Xiang, the federal prosecutor. “And if enough people get comfortable with bitcoin, maybe it doesn’t go away. Maybe it has staying power.”

 

Blockchain Personalities Speak out on Hard Fork

21.co used the 21.co/blockchain list to survey influential individuals in the blockchain space. “The list includes Bitcoin Core developers and Bitcoin Unlimited supporters, as well as a host of investors, executives, and founders,” writes 21.co on its Medium account. 

Related: Microsoft Head of Decentralized Identity Says Bitcoin is Under Attack

The survey turned up aggregate numbers on “what this sector of the community thinks,” as well as responses from people who wished to be cited, as well as those who wished to be quoted anonymously. The overwhelming number of people surveyed reporting using specifically Bitcoin.

When the company asked about “small blocker” and “big blocker” sympathies – a framing many take issue with – the company found ‘A plurality of responding influencers were sympathetic to the big-block camp. However, as we will see in the next section, even most “big-blockers” were not in favor of the Bitcoin Unlimited fork.’ The company also probed what applications people felt were most useful to them.

“Most of the major applications of digital currency seem to get people excited,” 21.co wrote. “It’s interesting that store-of-value and permission-less payments are still seen as the killer applications by many in the venture-backed community relative to non-currency-based blockchain applications. This is somewhat at variance with the tone of some media coverage over the last 1–2 years.” Most of those surveyed – 70% – do not want Bitcoin Unlimited activated. Conversely, most respondents noted they wanted Segwit activated.

A year ago, we had no implemented mechanism for scalability. Today, we do and it is ready now: segregated witness. This is just the first step in a long line of work to do. But we need to take the first step as well as set a roadmap for future steps. The time is now.

Mike Belshe, CEO of BitGo

 

 

 

Digital Asset Exchange ShapeShift Raises $10.4 Million in Series A

Digital currency exchange ShapeShift, based in Switzerland, raised $10.4 million in capital from U.S. and international venture capital investors to fund its future expansion. The firm, owned by libertarian and former bitcoin gambling site SatoshiDice administrator Erik Voorhees, allows cryptocurrency users to instantly exchange digital currencies like bitcoin for other altcoins without needing to open an account nor the need for fiat currencies like US dollar, euro or Chinese yuan.

Related: Shapeshift Among Bitcoin’s Best Affiliate Programs



According to the digital currency exchange, the company has grown on average of 48 percent monthly since it launched just three years ago.

The Series A funding, led by Berlin’s Earlybird, also included investors like Lakestar, Access Venture Partners, Pantera Capital, and Blockchain Capital.

ShapeShift already had backing by FundersClub and Digital Currency Group. Erik Voorhees, who has been very successful in Bitcoin, also devoted funds.

The funds will mostly go towards further expansion, the company said. Considerable money might go towards security, as the company did once suffer a hack perpetrated by an inside source, according to an internal investigation.

“When we started ShapeShift, a future world of natively digital assets was very theoretical,” Voorhees said in a statement of the Series A funding. “Yet this world is quickly arriving; one in which millions of forms of digital value, from access keys to tokenized derivative contracts to video game items, will trade between people and machines all over the world, every second of every day.”

More than 40 digital currencies and assets – like bitcoin, ethereum, dash, litecoin, Augur and Monero – are traded on the ShapeShift platform. These assets may be traded for another.

“ShapeShift’s team built a compelling crypto exchange engine which can be easily integrated into third-party products,” said Christian Nagel, partner at Earlybird.

The investment into ShapeShift could signal a second wave of venture capital investment into the digital asset space. (big bank and multinational tech companies investing in blockchain, aside) While the first wave saw VC’s focus on Bitcoin, this second wave, it might be argued, will see a movement into the digital asset space – that is, ‘altcoins’, as cryptocurrency enthusiasts call them for shorthand.

Photo: Erik Voorhees

Jewish Center Bomb Caller Tried to Use Bitcoin to Hide Identity

Bitcoin and Google Voice helped to make the suspected arrested Thursday for his wave of bomb threats against Jewish Community Centers virtually untraceable over a period of month, as first reported The Daily Beast.

Related: Dark Web Gun Runner Overdoses in Front of Court to Try and Avoid Sentencing



As unfolded other Bitcoin criminals, like the Silk Road’s Ross Ulbricht, one small slip-up led authorities to the possible bomber.

Michael Kaydar, 19, is suspected of phoning in over 100 bomb threats to JCCs and Jewish day schools in 33 states since January. Most of the calls came two weeks ago. Police believe he might have made similar threats in Israel, Europe, Australia and New Zealand.

FBI traced Mr. Kaydar’s phone calls back to a service called SpoofCard. The service allows users to mask their caller ID so phone calls come from a anonymous number not tied to nay identity.

Unless the FBi sends the company a subpoena, as happened in this case. The New Jersey-based TelTech handed over the number, which was tied to a disposable Google Voice line used with an alias.

Server logs from TelTech and Google didn’t help, but did demonstrate the suspect routed internet connection through proxy servers overseas. The caller’s voice was anonymous as Spoofcard’s voice changing option made him sound like a woman.

The perpetrator paid for the Spoofcard in Bitcoin.

The bomb threats, amde in six waves, led to evacuations at Jewish centers and day schools.

Ultimately, the bomb “hoaxer” neglected to route his internet through a proxy server, leaving a real IP address from Israel where Kayday allegedly used a giant antenna pointed out a window in his home.

It turns out, he is Jewish, and there’s yet to be a motive. His lawyer said a brain tumor since age 14, which affects his behavior, aqccording to the lawyer.

The U.S. Justice Department has yet to say if Kaydar will face U.S. charges andpossible extradition. Attorney General Jeff Sessions commended the FBI and the Israeli National Police for the arrest.

“The Department of Justice is committed to protecting the civil rights of all Americans,” he said, “and we will not tolerate the targeting of any community in this country on the basis of their religious beliefs.”

Undercover cops and domestic abuse victims to conceal number from an ex use SpoofCard and services like it

In 2007 a gang of hone hackers out of Texas used the service in a “swatting” campaign against their enemies. They would spoof a victim’s phone number, call the police and claim to be holding hostages. Police would storm the victim’s house, guns drawn.

“SpoofCard is aware of the investigation regarding phone-based bomb threats to schools and organizations,” the company wrote in a statement. “We take great pride in the fact that for over 10 years we have helped people protect their privacy and that we have always held a consistent position against any misuse of our services. When requested, we comply quickly and responsibly with lawful requests from all levels of law enforcement, and we have built specific tools to prevent abuse.

 

Bitcoin Investor Peter Thiel Dresses as Hulk Hogan for Trump Donor’s Costume Party



Bitcoin investor Peter Thiel attended the same costume event last week where Donald Trump made headlines. The theme of the event – heroes and villains – prompted Mr. Trump to fittingly dress as himself. Read More

Dark Web Gun Runner Overdoses in front of Court to Try and Avoid Sentencing



A man who went by the darknet alias of Walter Mitty tried to overdose and take his own life outside of a court, before a judge was set to sentence the UK man, for a second time. His ploy failed, and the judge sentenced him to jail anyway.

Justin Young, 45, was taken to the hospital after drinking an entire bottle of whisky and swallowing a huge dose of prescription medicine, according to The Sun out of the United Kingdom. 

He was about to face the music for the illegal importation of assault rifle parts via the dark web. The judge jailed him for eight years while Mr. Young was being treated in the Royal Cornwall hospital for his self-inflicted wounds.

Walt-sunuk

The court learned how Mr. Young was a “normal” man who eventually “went off the rails.” In his ‘Walter Mitty’ delusion he crafted, he seemingly led the life of the protagonist of the hit show Breaking Bad, Walter White.

Having pleaded guilty to three counts of “conspiring to fraudulently avoid prohibition on the importation of illegal firearm parts,” Mr. Young was caught red-handed for importing rifles, including AR-15s.

This was not the first, but indeed the second time Mr. Young tried to overdose before being sentenced OUTSIDE of court. The first time he was simply arrested for being drunk and disorderly.

As he tried to die this most recent time, he handed police a note to his wife and children in which he explained his intention to commit suicide.

The darknet has been subject of much controversy since the Silk Road, the first underground marketplace where users could trade bitcoins for assorted illicit goods, was taken down by the FBI.

Subsequent darknet marketplaces were launched and global law enforcement agencies have banded together to track commerce originated from such darknet marketplaces.

Such a marketplace was made possibly by the advent of Bitcoin technology. A decentralized digital currency in which users can transact pseudonymously.

Rap Legend, Coinbase Investor Nas’ Favorite Bitcoin Charity is Watsi.org



Did you know that rapper Nas has his own domain on Coinbase.com? Well, he does (coinbase.com/Nas), and the rapper, who has invested in the San Francisco-based Bitcoin exchange, features on this digital property the non-profit Watsi.org. Read More

Bitcoin Mining isn’t totally unheard of on Global US Armed Forces Bases




A 30 year old in the US Air Force, stationed in Korea, mines bitcoins in his dorm room.  He mined in the US from his own apartment before being deployed. Read More

R3 Sends Cease-and-Desist to Bitcoin Developer Peter Todd

Bitcoin and banks were never supposed to go hand-in-hand. So, in 2015, when the world’s largest financial institutions began investigation the technology behind Bitcoin, blockchain, it took many people by surprise. Now, approximately two years after those efforts began in earnest, it seems there’s somewhat of a clash taking place between Bitcoin and the consortium through which the world’s largest banks investigate blockchain technology, R3. Read More

I Confessed to the FBI about Bitcoin

I was quite surprised by it. I had somehow managed in 2013 to receive my first-ever letter of interest from an investor for GoldSilverBitcoin.

The sender claimed to currently be working for the Drug Enforcement Administration (DEA). His name was Carl Mark Force IV, and, according to his resume, he was the agent tasked with making contact with Dread Pirate Roberts, the administrator of the well-known darknet website Silk Road. Read More

Bitcoin Development Turns Political, Faces Possible Resistance

There’s been no parallel in the history of Bitcoin’s code changes for how the code change to increase the digital currency’s block size has played out. So controversial has been this change (or lack thereof), which would theoretically enable more transactions per second, it’s been dubbed the ‘Bitcoin Block Size Debate.’ Now, Bitcoin Core, the open-source project’s main development team, is doing some much-need Community outreach in an attempt to calm rising tension and divisions. Read More

How a Bitcoin Accepting Securities Lawyer Profited from Cubs Game 7 Victory

Wrigleyville erupted after the Chicago Cubs won Game 7 of the 2016 World Series.

Adam Tracy, Chicago-based securities lawyer and big time White Sox fan, thought about it the night before the ‘loveable losers’ clinched November 2 their first World Series victory in 108 years, vanquishing the Cleveland Indians.

To be honest, he was a  bit sour about the North Siders potentially going all the way. He figured, win or lose, there’d be some sort of rioting. Maybe he’d make some money off it to make himself feel better. Read More

ChangeTip, One of Bitcoin’s Best Known Brands, Couldn’t Find a Buyer

ChangeTip, an internet app which has facilitated tips over the web via bitcoin for two years, wanted to make it worthwhile for internet users of all varieties to produce quality internet content. “We had a vision for a company that would allow people to spread appreciation on the web for things they enjoyed,” says ChangeTip CEO Nick Sullivan. Now, the experiment is over, and at the end of November ChangeTip will have processed its last bitcoin tip. One of the most recognizable brands in Bitcoin couldn’t find a buyer.  Read More

IRS Seeks Transaction Records of All Coinbase Users Over Two Years

IRS has targeted the transaction records of Coinbase users in a case brought forth in the U.S. District Court, Northern District of California, as ZeroHedge tweeted late November 17. 

 

 

The John Doe summons (a summons issued to a person whose name is unknown at the time of service) , relates to numerous persons who might “failed to comply with provisions of the internal revenue laws.” The summons acknowledges that the identity of the persons whose information has been summoned is “not readily available from sources other than Coinbase.”

The summons seeks information “regarding United States persons who, at any time during the period of January 1, 2013 through December 31, 2015 conducted transactions in a convertible digital currency as defined in IRS Notice 2014-2021.” It’s a testament to how Bitcoin businesses can serve as a valuable point-of-information for the Bitcoin digital currency created in 2008 by the pseudonymous Satoshi Nakamoto. 

The US Internal Revenue Service inspector general (IG) warned that the agency needs to overhaul its strategy for bitcoin and other digital currencies.

A report laments how US tax officials have failed to create a cohesive strategy to tax Bitcoin as property in the two-and-a-half years since it decided to do so. The report cites Bitcoin’s lack of control for third-party tools to report transactions.

The IG stated:

“The IRS needs to ensure that it develops a strategic plan that includes management oversight as well as adequate internal controls for its virtual currency programs. Until a comprehensive virtual currency strategy is developed, the IRS is open to the risk that undetected noncompliance of virtual currency taxable transactions will result in an increase to the Tax Gap.”

“Due to the potential complexity of reporting otherwise simple retail purchase transactions related to virtual currencies, further guidance is needed to help taxpayers voluntarily comply with their tax obligations,” the IG said.

The case has been assigned to Magistrate Judge Jacqueline Scott Corley, who presides over civil cases and has served as a settlement judge in nearly every type of federal litigation. Prior to her 2011 appointment to Court, Judge Corley was a partner at Kerr & Wagstaffe, LLP in San Francisco specializing in federal practice where she served many types of clients including government entities.

Since Coinbase did not add other crypto-currencies, such as Ethereum and Litecoin, until 2016, the IRS summons will pertain specifically to Bitcoin users.

Students Are Trying to Mine Bitcoins On College Campuses

“Well, free electricity is free electricity,” says Reddit user 3xist. “I was mining before at home but decided to scale up a little with some power that I didn’t pay for. My roommate did mind, but he was a very considerate guy and didn’t complain – it was taken as my ‘one shitty roommate thing’ in exchange for his equal roommate flaws. There’s no real way to hide the fact that you’re mining in a dorm room, my RA knew (didn’t care), everyone on my floor knew (thought it was vaguely interesting), etc..”  Read More

Former Robocoin CEO: We Understand Fraud

Sporting jeans, a cool white shirt and a smooth-looking coat, once-embattled former Robocoin CEO, and current Romit CEO, Jordan Kelley recently gave a compelling pitch, in which he claims his machines did $150 million (trust us guys!).

In 2014, a post appeared on Reddit claiming owed $25,000. From there, the company quickly disintegrated and individuals who had purchased machines were left to reformulate them. That led to multiple Bitcoin ATM companies, like Lamassu, attempting to salvage the bricks with their own software.

Robocoin, based in Las Vegas, dominated the Bitcoin ATM market in early years. Although Kelley has claimed to be the first Bitcoin ATM on many occasions, the truth is otherwise: A man named Todd Bethel actually posted about the concept and pursued the project, and even had a working prototype, as well.

Kelley’s new firm attempts to tackle the seven trillion payments market.

In a pitch for his new startup, Kelley stated: We’ve got an interesting team. A very interesting one. One that has a fair amount of understanding of the world of fraud. 

Read a transcript of Kelley’s pitch below:

Romit is a payment platform that eliminates fraud and chargebacks for the 7 trillion dollar million merchant banking industry

We launched five months ago and have already processed 280,000 transactions. We are doing that at a delightful growth of 52% month over month. We are also earning 400 basis points per transaction in net revenue which is 4x industry average and we have over 3.5 billion  worth of volume currently onboarding onto our platform. The merchant banking industry processes more than 7t worth of credit card transactions on an annual basis. These merchant banks acquire their merchants with sales, these sales organizations you’ve heard of two of them at least, Paypal and Stripe, currently command 5% of total market volume. The other 95% are woefully underrepresented, woefully.

They lack high tech which results in high chargebacks and fraud, the good news is that romit has developed an incredibly modern and beautiful payment platform. We solved the biggest problems…the merchants were averaging  1.2%  chargebacks, we got that down to to .0079% charge backs on a monthly basis after they onboard on our platform. That’s a big deal. A really big deal.

We’ve got an interesting team. A very interesting one. One that has a fair amount of understanding of the world of fraud. We invented the world’s first ATM we processed over 150$ dollar across 14 currencies in 19 languages without ever one time being compromised in the financial technology industry highest risk category.

 

Did Bitcoin Already Have A Block Crisis?

As developers for Bitcoin called for a temporary halt to Bitcoin transactions on 3/11/2013, many members of the community began holding their breath.

Many of these individuals had only just entered into the realm of decentralized, online currencies. Could it be that they were watching the end of the BTC experiment before their very eyes?

Others acted in contribution to a sharp sell-off resulting in the currency briefly falling 23 percent to $37 before regaining much of its value thereafter.

Still others implored everyone, except for miners, to just wait this out “a few hours.” The compromise took place at the network’s core, in the shared transaction register called the blockchain. Nobody wants such uncertainty in a payment system. So, here is basically what happened: It is central to the Bitcoin protocol that all new blocks have been accepted by the entire Bitcoin network. Sometimes, if a client announces a block that half the network accepts and the other half rejects, the result might be a fork in the network.

With different nodes disagreeing about what transactions took place on the valid block, and which took place on the invalid, the system was thrown into seeming chaos.

This transpired on Monday evening, 3/11/2013, as a block produced contended that the latest version of the Bitcoin software, version 0.8, recognized as valid, but that nodes still running version 0.7 or earlier rejected.

“After some emergency discussion on #bitcoin-dev, it seems best to try to get the majority mining power back on the ‘old’ chain, that is, the one which 0.7 accepts,” wrote Bitcoin developer Pieter Wuille in an e-mail. “That is the only chain every client out there will accept. If you’re a miner, please revert to 0.7 until we at least understand exactly what causes this.”

Merchants were asked to stop accepting transactions until problems were solved. Mt Gox, the leading Bitcoin exchange, announced that it would suspend Bitcoin transactions.

Coins “mined” and transactions that took place in the few hours ahead of the fork and during it were not safe, while all other transactions were. Except for the transactions and mined coins during the period of uncertainty, no other Bitcoin were in danger of being lost.

Of course, confidence had been tested. Bitcoin’s high of $48 earlier on Monday evening resulted in a 23% drop to less than $37 by 10PM Central time.

So,  before Bitcoin would launch to $266, its’ core was put to the test. The decentralized nature of the cryptocurrency means nobody can order everyone to abandon the 0.8 branch of the blockchain for the 0.7 branch. The branch will be chosen by a vote of the network’s computing power.

Developers will have to convince most miners or nodes to voluntarily downgrade their software. The warning was sound at Bitcoin Talk, as a Hero Member wrote:

Hello everyone,

there is an emergency right now: the block chain has split between 0.7+earlier and 0.8 nodes. I’ll explain the reasons in a minute, but this is what you need to know now:

 

After a discussion on #bitcoin-dev, it seems trying to get everyone on the old chain again is the least risky solution.

If you’re a miner, please do not mine on 0.8 code. Stop, or switch back to 0.7. BTCGuild is switching to 0.7, so the old chain will get a majority hash rate soon.

If you’re a merchant: please stop processing transactions until the chains converge.

If you’re on 0.7 or older, the client will likely tell you that you need to upgrade. Do not follow this advise – the warning should go away as soon as the old chain catches up.

If you are not a merchant or a miner, don’t worry.

The original post lacked info for “regular users”. Here it is:(1) If you are a “regular user” (not a miner), the best thing is to do nothing and wait a couple hours.

(2) If you are a “regular user”, upgrading, downgrading, whining, FUD, etc, will make no difference. Only miners have an incentive to do anything. Otherwise, it doesn’t matter which version you are running.

(3) Regardless of who you are, your transactions are not dead, your coins are not lost.  They will just temporarily be held up. If you sent a transaction within the last few hours, it may take a few more hours before it’s sorted out.

If you insist on processing transactions right now it’s probably best to wait 30+ confirmations.  It’s just due diligence though … an attacker would still need a tremendous amount of mining power, quick thinking, and a victim willing to part with a lot of BTC.

By tomorrow this will be in the past and everything will appear to be normal again.  If you slept through this, you’d never know that anything happened (except for the price drop).

Let me reiterate, your coins are not at risk, your transactions are not lost.  It’ll just take some time for the network to “iron itself out.”  Everything will be okay.

As time passed, it became clear that 0.7 and older nodes had a limit on the “size of the modification it can make atomically to the database. With the larger blocks of the past days, it seems to have triggered the limit. The result is that 0.7 (by default, it can be tweaked manually) will not accept “too large” blocks.

However. 0.8 (which uses a different database system) has no such limit, and happily accepts the block. As the majority of the hash power was on 0.8, the longest chain ended up using this block, which is not accepted by older nodes. Another Hero Member calmed a Junior Member:

Yes, they’re safe. (You should make sure to keep the old wallet just in case, but since your transactions were done yesterday and presumably many people will re-run all lost transactions, it shouldn’t matter.)

1) If you run a mining pool or are mining solo, and have upgraded to 0.8, downgrade to 0.7.

2) If you are a normal user, do not perform any important Bitcoin transactions until you get the all clear.

3) If you are a pool miner and you know your pool has not downgraded, stop mining.

4) If you performed any transactions recently, be warned that you cannot rely on them.

Five hours after the original announcement of the emergency had been posted to Reddit, a new thread had been created called “back on the main chain” which celebrated that the Bitcoin network had seemingly been restored to the proper chain of blocks.

The first comment on this thread reads: “I’d like to thank each and every miner out there who acted in their own rational self-interest to preserve the integrity of bitcoins. It’s as if the system actually works!”

To be sure, the Bitcoin network was compromised by this “hard fork.” A potential problem, for instance, was double-spending.

There could have developed a much more urgent issue, but the developers and miners responded quickly to fix the problem. The decentralized network of people worked to quickly fix itself, in other words.

As one Reddit commenter observed: “Look at how long it takes for governments and banks to fix major issues.”

The hard fork got 10+ confirmations deep before the problem was discovered, the possible consequences considered, solutions discussed and solution implemented. This took 25 minutes.

This compromise was a crisis of sorts, but the network of individuals prevented the Bitcoin network from being split.

End-users were hardly affected. Some possible limitations to the current iteration of Bitcoin might be the max block size limit. At this time, there can only be enough space in each block for about 7 transactions per second, according to some developers. Thus, the risk of forking.

Other Bitcoin enthusiasts maintain that the speed with which the hard fork was rectified is astounding and a true win for Bitcoin.

Patrick Murck anticipates that if leading mining pools teamed up to fork the block chain, “Many lawyers would jump on the opportunity for antitrust lawsuits… From my perspective this would clearly be an offence worth litigating.”

How Bitcoin Works

“It seems to me that simple altruism can suffice to keep the > network running properly.”  – Satoshi Nakamoto

This section gets a bit technical.  Few truly understand how bitcoin functions, but by coming into contact, if even briefly, with the degrees of technology that go into powering a p2p network like bitcoin, one can have their mind expanded. To paraphrase Karl Marx, “the masses must live through the revolution in order to understand the revolution.”

“Preliminary research” suggests that bitcoin is an autonomous thing. In other words, the bitcoin open-source community acts as one united soul – an institutional-entrepreneur – in which countless actions of individual agents converge over time to create the bitcoin hologram. The collective and not the individual, nor a single organization, resolve the future of bitcoin. But, this collective is comprised of diverse individuals: of communists, of libertarians, of anarchists, of speculators and of the a-political. What inspired these individuals to create this community? Bitcoin.

Bitcoins are computer files, so they behave similarly to a music or a text file, and can be destroyed or lost like any computer file. Many say bitcoin is digital cash. To be sure, bitcoin is not exactly like physical cash. When you lose cash, someone else can theoretically find it.

If you lose bitcoins, they are not readily available to another person unless you were hacked. Lost bitcoins are not just found in cyberspace by web-surfers.  Also, your brain does not store a trail as to where your cash was last. If a $100 bill falls out of your pocket, you might not have access to any data whatsoever as to what-in-the-world happened. Potentially, when you lose bitcoins, a computer security expert can do research into the issue.  

As Trace Mayer puts it, “Bitcoin is like a gold coin that you can e-mail.” As we’ve covered, the central aspect of bitcoin is that it is an open-source software and community, and open-source communities are strangers, from anywhere in the world with Internet access, coming together and self-organizing around a shared interest so as to create value through sharing knowledge and innovation.

Undoubtedly, the community has not been able to tame the tide of misconceptions about bitcoin. Such as that bitcoin’s are backed by nothing. Therefore, bitcoin is not a virtual gold. But, the value of gold is largely reflected in the amount of energy consumed in mining and refining the metal, which contributes just as much to gold’s value as does its suitability as money.  As one individual once put it, “a gold coin represents a large amount of land, highly refined, with the input of a great deal of energy, labor and capital.”

In a similar manner, bitcoins represent the computing power, energy and capital required to create them. It takes specialized technology running for sometimes many days to create a bitcoin. This was even true many years ago. Like mining for precious metals, it is not easy to mine bitcoins profitably. Bitcoin mining is extremely competitive, as we will detail later, and it’s rarely a profitable venture unless higher future prices in bitcoin are assumed.  A main advantage of bitcoin is its peer-to-peer nature. This means there is no “issuing authority” for bitcoin, no central depository or central bank.

What Happens If Someone Tries To Buy Up All The Bitcoins?

Newbies to bitcoin have asked on the Bitcoin Forum, BitcoinTalk, “What if someone tries to buy up all of the bitcoins?”

It is essentially impossible to buy all the bitcoins in existence. As they were purchased, the price of the bitcoins would rise exponentially. As Erik Vorhees asked a Newbie in the Bitcoin Talk Forum: “Imagine how much this mysterious buyer would need to pay for the last bitcoin still available? Who would sell it, and at what price? If there were only a few coins left, the price would be several millions of dollars, and people would simply use the fractions of a coin in the same they today use a full coin.”  Some analysts, like former StockHouse CEO and current CEO of TDV Media, Jeff Berwick, have said that bitcoin will not be purchasable in US dollars within five years, citing the current crisis of confidence in the US dollar.

The resources that would be poured into bitcoin would be immense, posits Vorhees. He contends: “I can think of nothing that would accelerate the strength, power, and development of bitcoin more than ‘someone trying to buy all the coins.’

DoJ Arrests Man For Phishing Stolen Darknet Accounts, Stealing Bitcoins

The dark web, having gained a reputation for offering illicit goods and narcotics, caught the attention of authorities after the Silk Road fueled much early Bitcoin price activity. Law enforcement’s subsequent focus on the dark web continues to this day. “We are well aware of these websites” authorities in Australia said in September.

In the US, the Department of Justice announced charges October 6 against Michael Richo, 34, of Wallingford, Connecticut on a criminal complaint charging him with access device fraud, computer fraud, wire fraud, identity theft and money laundering offenses tied to his phishing to steal bitcoins.

Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation filed the complaint, which alleges Richo partook in an online phishing scheme to steal bitcoins from people on the dark web, where the crypto-currency is often accepted as a payment means.

Richo allegedly posted fraudulent links to online marketplaces on dark web forums. Users were brought to a fake login page made to look like the proper login page for online marketplaces. Richo then stole usernames and passwords and monitored people’s bitcoin balances on the darkweb marketplace they had intended to log into. When bitcoins were deposited, Richo withdrew them and sent them to his own bitcoin wallet.

Richo saved more than 10,000 usernames and passwords on his computer. Richo appeared before U.S. Magistrate Judge Sarah A.L. Merriam in New Haven. He was released on a $100,000 bond.

Richo faces 20 years in prison for money laundering, another 20 years for wire fraud, 10 years for access device fraud, five years for computer fraud and two years for each identity theft.

Bitcoin has been called money in other court cases, such as the court case of Trendon Shavers, in which the defendant was accused of running bitcoin’s first major ponzi scheme.

See complaint here.


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