Category Archives: Bitcoin

You've probably heard about bitcoin's incredible bull run and how, if you'd bought some a few years ago, you would be a lot richer. Well, it turns out some people did just that.

Those who bet big on bitcoin in recent years are now presiding over the digital equivalent of Scrooge McDuck's money bin. The currency has given up some of its crazy gains from last week, but is still sitting at around $2,300 as of Monday morningup about $1,000 from a month ago, and over 300% from a year ago.

No one knows for sure who has the most bitcoin since the digital currency is hard to trace. But here is a list of those who have a big stake in bitcoin, and are set to clean up if the boom continues.

Tim DraperPhotograph by Danny Moloshok Reuters

In 2014, billionaire Tim Draper made the sort of bold bet that is the hallmark of famous venture capitalists: he bid for and won all 30,000 bitcoinsup for grabs in an auction run by the U.S. Marshals Service.

Draper did not reveal how much he made for the bitcoins, which wereseized from the drug lord Ross Ulbricht, but the market price at the time was around $600. Today, the 30,000 bitcoins are worth around $7 million and most of thatis profit for Draper.

Cameron Winklevoss and Tyler Winklevoss in Austin, Texas in March 2015.Photograph by Alli HarveyGetty Images

For the longest time, it looked like theWinklevoss twinsfate in life was to be known for losing out to Mark Zuckerberg for control of Facebook. But their successful second act (aside from those weird pistachio ads ) as bitcoin entrepreneurs mean Cameron and Tyler are now most likely to remembered as cryptocurrency pioneers and very wealthy ones at that.

While they lost their initial bid to create a bitcoin ETF, the twins are likely to winover regulators in the long-run. In the meantime, their 2013 investment of $11 million worth of bitcoin (which reported amounted to 1 percent of all bitcoins in circulation) would now be worth more than 20 times that amount.

Fortune Photograph by Kevin Moloney/Fortune Brainstorm

Barry Silbert is another long-time player in the bitcoin scene, who made big bets when most people laughed that the currency was for kooks. One of his bets saw him obtain 48,000 bitcoins in a second auction held by the U.S. Marshals Service in 2014. At that time, bitcoin prices had fallen to around $350, which means Silbert's stake could now be worth around $110 million.

Silbert is currently focused on building a rival financial product to the Winklevoss ETF, and likely owns a lot more than the 48,000 bitcoins he won at auction.

Charlie ShremPhotograph by Craig RuttleAP

Shrem is a colorful figure from the wild west early days of bitcoin. Once a member of the Bitcoin Foundationagroup that was supposed to govern bitcoin but saw several of its members endup on the lam or in jailShremreceived a two-year prison sentence for charges related to money laundering.

Since late 2016, hehas been back on the cryptocurrency scene and appears as enthusiastic as ever about its prospects.Shrem hasn't saidhow many bitcoins he owns, but he is rumored to have acquired thousands of them back they cost $3 a pop and his new venture, a startup involving crypto-investments, suggests he still has a very big stake.

Faceless manMichael Murphy Getty Images

Sincehis2008 white paper, which described a new type of software tied to a digital currency, the man known as Satoshihas stood as the soul of bitcoin.

But no one can say for sure he is.

Satoshi has not spoken publicly for years, but he is believed to control large numbers of bitcoin wallets from the currency's early days. Some reports say he controls more than 5% of all bitcoin in circulation, which means his net worthcould be in the billions.

It remains to be seen if Satoshi will emerge one day and distribute that wealth (maybe by endowing a bitcoin university?) orif Satoshi and his riches will remain invisible and out of reach forever.

The early idealists of bitcoin saw it as an anarchy-currency free of the control of national governments. Alas, the U.S. government didn't get the memo. Since 2016, the Internal Revenue Service has been stepping up a campaign to identify bitcoin investors and slap them with capital gains tax.

Right now, the agency is locked in a legal fight with the popular cryptocurrency exchange Coinbase, and is demanding information about millions of customer accounts. The IRS is annoyed because it says only 802 people declared bitcoin income in 2015even though the value of the currency has increased dramatically from its 2013 value of $13.

The dispute is now before the courts and, even though Republicans in Congress told the IRS to back off , the tax man usually wins in the end.

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7 People Set to Make a Killing from the Bitcoin Boom - Fortune

Forbes

Bitcoin Is Bigger Than Ever, And Here's Why That Matters Forbes The money you've been using all your life is backed by a government of some sort, and it exists in a tangible way. Bitcoin is neither tangible nor backed by anyone, but it's still worth a great deal to some people. This digital currency began ... Why Bitcoin Just Dropped 30%Fortune Bitcoin briefly plunges below $2100 as upward momentum fadesCNBC Bitcoin Has Come Roaring BackBut So Have the RisksWIRED CoinTelegraph -The Merkle all 54 news articles »

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Bitcoin Is Bigger Than Ever, And Here's Why That Matters - Forbes

NEW DELHI: The government is keeping a close watch on companies dealing with bitcoins to ensure that such transactions are not used to collect funds from gullible public.

Bitcoin -- a virtual currency whose value has been soaring in international markets in recent months -- is yet to be brought under any regulatory framework in India.

The Corporate Affairs Ministry is now keeping a close watch on companies as to whether they are getting into bitcoin transactions.

The ministry, which implements the companies law, has instructed the SFIO, regional directors as well as the Registrar of Companies to gather details about firms involved in bitcoin dealings, according to a recent communication.

The Serious Fraud Investigation Office (SFIO) comes under the ministry.

The communication was sent earlier this month by the ministry to Lok Sabha MP and BJP leader Kirit Somaiya who had raised concerns about illegal exchange and trading of bitcoins in the country.

These instructions have been issued to see "if the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds".

In case they come across companies indulging in bitcoin transactions, the regional directors and Registrar of Companies have been asked to discuss the same in the State Level Coordination Committee (SLCC) meetings organised by the Reserve Bank and in the Regional Economic Intelligence Committee (REIC) meetings.

While entities have been dealing with bitcoins, there are concerns over risks associated with such currencies and the possibility of them being used to dupe investors.

Use of virtual currencies, including bitcoins, has not been authorised by the Reserve Bank, which has also warned that any user, holder, investor and trader dealing with them would be doing so at his/her own risk.

The issue of companies getting into bitcoin transactions was also raised by ruling BJP members at a recent meeting of the Parliamentary Standing Committee on Finance.

In March, the Finance Ministry had constituted an Inter- Disciplinary Committee to take stock of the present status of virtual currencies both in India and globally and suggest measures for dealing with them.

The government has also sought comments from the public on whether virtual currencies should be banned, regulated or subjected to self-regulation.

Suggestions have also been invited on how virtual currencies should be regulated and monitored.

"In case virtual currencies are not suggested to be regulated: What should be the effective self-regulatory mechanism? (and) What measures should be adopted to ensure consumer protection in this scenario?," as per questions posted on the MyGov platform.

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Government steps up vigil on bitcoin transactions - Economic Times

Bitcoins astronomical rally has cryptocurrency bulls feeling vindicated. Not so fast, skeptics say.

The digital currencysmore than 100 percent surge in the past two months looks eerily familiar, argue the bears, pointing to November 2013, when the price quintupled in short order to top $1,000 for the first time. By Valentines Day it was worth around half that, and spent the better part of the next two years languishing below $500.

Then it absolutely exploded -- jumping more than $1,400 in two months. At its height last week, one bitcoin could buy about two ounces of gold. Its championstouted the arrival of blockchain into the mainstream, the coins underlying technology which they say can lift the poor out of poverty and make transactions more secure, inexpensive and efficient.

But signs of a top have emerged, detractors warn. On May 25, bitcoin surged more than $300 to a record only to turn tail and close little changed. The $600 round trip was the biggest daily swing in its history. It then slumped 8 percent the next day. Bitcoin was down 1.5 percent to $2,255.50 as of 12:35 p.m. in New York. For bears, that kind of volatility shows the assets unreliability as a store of value.

Here are some other reasons why they warn caution is warranted:

This months ransomware attacks serve as a reminder that bitcoin is still beloved by hackers and criminals because of its anonymity. The cryptocurrency plunged in 2014 after Tokyo-based Mt. Gox -- then the largest bitcoin exchange -- said it had been breached and then filed for bankruptcy. Its value sank again in August 2016 after hackers stole about $69 million from Hong Kong-based Bitfinex. The exchange has since repaid its customers.

The bitcoin community has beensplit for more than a year on how to upgrade its blockchain. The time and fees necessary to verify transactions have climbed to record highs, making it more difficult for businesses to use the currency as a means of payment.While bitcoin executives have said that 2017 might be the year the cryptocurrency really starts to scale, others arent so sure.

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Last week, more than 50 companies signed a pact to speed up transactions, but ideological differences have prevented similar agreements -- like the one reached last year in Hong Kong -- from actually being implemented. The much-touted SegWit upgrade was also released in October, but only a third of the community has embraced it.If the latest proposal fails to gain traction and the deadlock continues, digital currency users may dump bitcoin in favor of alt-coins that offer better blockchains.

As the surge sends the cryptocurrency world into a frenzy, it can be easy to lose sight of the bigger picture. While bitcoins value has increased more than 100 percent since the beginning of the year, its slice of the pie has shrunk as its digital cousins steal some of the spotlight. There are an estimated 700 rivals, according to Ron Quaranta, chairman of the Wall Street Blockchain Alliance.

Bitcoin dominated about half of the overall digital currency market as of Friday, down from around 85 percent in February, according to data from CoinMarketCap.com. Meanwhile, Ethereums share increased to about 20 percent. Some token fans arent sweating it though, as they say bitcoins potential demise doesnt really matter as long as another digital currency takes hold.

The general public doesnt understand bitcoin, and many regulators still dont either, which makes it tough to regulate. In 2015, New York started issuing controversial licenses to cryptocurrency companies, but only three had been issued as of mid-January, according to Coinbase, as many startups couldnt afford the costs of applying.

In January, the Financial Industry Regulatory Authority asked the public for help identifying the potential risks of blockchain. Two months later,bitcoin plummeted after the U.S. Securities and Exchange Commission rejected a proposal by the Winklevoss twins for a publicly traded fund based on the digital currency.

In a report last week about blockchain in China, analysts at Sanford C. Bernstein wrote that while the technology could benefit Chinese banks, its unlikely to start a financial revolution.

"We believe blockchain application is more likely to be evolutionary rather than revolutionary in developing countries like China," the analysts said. "Aside from the conservative regulatory attitudes toward financial innovations, the constraint of confidentiality and performance of blockchain technology would make it best positioned to be enterprise-oriented rather than consumer-end."

Whether its Hollands tulip-bulb craze in the 17th century or the Internet-stock frenzy of the late 1990s, history shows that markets self correct. Speculative markets usually run out of steam at some point. Determining the trigger is always the hard part. Given the breathtaking run in bitcoin as of late, some say its tough to believe the oft-cited mantra that this time is different.

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Five Big Reasons Why People Are Still Skeptical About Bitcoin - Bloomberg

A lot of Bitcoin users are concerned about the upcoming August 1st deadline. That is only to be expected, as the user-activated soft fork is scheduled to go into effect on that date. As a result, a chain split is a more than likely outcome. This means users will need to take ample precautions to keep their bitcoins safe. That is much easier said than done, though.

It is not the first time rumors surface regarding a potential Bitcoin chain split. The same occurred back when Bitcoin Unlimited was attempting to take over the network as a whole. Luckily, that threat never fully materialized, leaving things at the status quo we are at right now. However, it looks like things may change in a few weeks from now, thanks to the user-activated soft fork.

To be more specific, the August 1st deadline marks the date on which the user-activated soft fork will enter its activation process. At this time, the Bitcoin core protocol will undergo some changes, assuming the activation of this soft fork is successful. However, the downside of activating this soft fork is how it could result in an actual blockchain split, which will leave us with multiple instances of Bitcoin.

The UASF activation has caused quite a bit of speculation on social media already. Some people claim the UASF will result in one chain with Bitcoin and SegWit activation, whereas the other one will be dominated by the Chinese mining pools opposing this solution. It is doubtful things will get out of hand to such a degree, though, as no one wants to be on the wrong Bitcoin blockchain by any means.

The big problem is how the UASF does not seem to have much community support. More specifically, there is economic support from exchanges, wallet providers, and other Bitcoin companies. However, the community itself does not appear to be keen on the soft fork by any means. In theory, miners and other users should follow the economic support over time. However, things are never as black-and-white in the world of Bitcoin.

Users who are concerned about the UASF should take some precautions right now. Any funds stored in an online wallet or exchange need to be withdrawn to a desktop, mobile, or hardware wallet as soon as possible. Most companies will upgrade to accommodate the UASF and keep funds safe, but it is a good idea to make sure funds are in your control before the August 1st deadline hits.

In the end, it is important to remember there may not be a Bitcoin chain split in the end. It is certainly a possibility, and preparing for the worst is never a bad idea. In the worst case scenario, there will be two types of Bitcoin, both of which reside on different blockchains. This could result in the same scenario as we have seen with Ethereum and Ethereum Classic. A wallet backup is of the utmost importance in this regard, that much is evident.

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Should You be Concerned About a Bitcoin Chain Split on August 1st? - The Merkle

Even though the relationship between Russia and Bitcoin will never be straightforward, things are turning around in favor of cryptocurrency. Over the past few months, multiple companies in Russia have started to accept Bitcoin payments. Thatis a major development, as it may lead to the Russian government legalizing Bitcoin in the future.

The biggest news over the past 24 hours is how ChronoPay is suddenly enabling Bitcoin support. Considering how ChronoPay is a Russia-based online payment service provider, thosenews are quite significant. After all, online payment processors accepting Bitcoin will help put the popular cryptocurrency on the map. This could lead to some interesting Bitcoin-related developments in Russia over the coming years.

It has to be said, ChronoPay has built up powerful relationships with entities such as Greenpeace and Tele2. The ChronoPay founder admitted he has been skeptical of Bitcoin for some time now. However, after looking closer at what cryptocurrency has to offer, enabling Bitcoin support seems to be the best course of action. It is another notch in the belt for this popular cryptocurrency, as Russia becomes an even more important region for Bitcoin.

A lot of people were -rightfully surprised to learn Russias largest online retailer decide to accept Bitcoin payments. Ulmart feels now is a good time to experiment with cryptocurrency payments. Some people feel Ulmart is the Russian version of Amazon, due to its sheer amount of monthly visitors and orders. The integration of Bitcoin payments will be completed by September 1st, which gives Russian Bitcoin enthusiasts something to look forward to.

It is important to note not all products found on Ulmart can be paid for in Bitcoin. That is only to be expected, as a cautious approach is a smart decision. It is unclear which items will be payable in Bitcoin, albeit more information will be released in the coming weeks. It is expected used cars and apartments will be subject to Bitcoin payments.

It is impossible to deny the presence of WebMoney in the world of online payments. The Russian company enabled Bitcoin support in September of 2016, to much joy of cryptocurrency enthusiasts around the world. Having the support of such a powerful company will help elevate the status of Bitcoin in Russia. All BTC payments are converted to WNX, which is the native WebMoney Transfer unit.

WebMoney users looking to enable Bitcoin payments will need to set up an X-Purse through the merchant portal. All WMX will be paid out to this balance accordingly, at the rate of 1 WMX per 0.001 BTC. This WMX balance can then be exchanged into WMZ, WMR, or back to bitcoin if the user prefers to do so. All WebMoney authorized shops can enable Bitcoin payment with a few clicks. It is a bit unclear how many have done so since September of 2016, though.

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Top 3 Russian Companies Recently Enabling Bitcoin Support - The Merkle

With that said, you might not want to get too comfy if you've amassed a fortune. As our TechCrunch pals observe, Bitcoin's share of the cryptocurrency market has plunged sharply in the past few months. Where it regularly dominated the market with about an 80 percent share, it's down to just 47 percent in a matter of months. Ethereum, Ripple, Litecoin and others have all seen surges that have whittled away Bitcoin's control.

It's not certain just why that is. There is a concern that Bitcoin's scaling is causing problems by slowing down transactions -- people may just want to explore alternatives that won't bog down so easily. The rapid rise in Bitcoin's value casts doubt on that, though, as you'd expect its worth to tank. If scaling is a problem at all, it hasn't spooked users yet. It may just be a matter of the market growing up, or of speculators hedging their bets by pouring money into more than one digital currency. You wouldn't want to panic if you've already committed to Bitcoin, but nor should you assume that it'll always be the format of choice.

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Bitcoin is worth more than ever, but it's losing clout

Seven years ago, the value of a single bitcoin was worth a quarter-of-a-cent. Today, that single bitcoin is worth upwards of $2,200 .

Monday marked the seventh anniversary of what is said to be the first recorded instance of bitcoin used in a real world transaction. Over the course of seven years, bitcoin's value has multiplied 879,999 times over since 2010. If an investor had decided to spend five dollars back then on about 2,000 bitcoins, that stake would be worth $4.4 million today. With $1,200 spent on some 480,000 bitcoins, the investor would be worth at least $1.1 billion today.

The early months of 2017 have been particularly heady days for bitcoin. Since the beginning of the year, the value of the cryptocurrency has surged as it gains legitimacy in countries like Japan . Investors have also come to see the currency as something of a safe haven asset amid geopolitical turmoil and there's been plenty of that in recent months, in both Europe and the United States.

And that first transaction? A software programmer on " Bitcoin Talk " known as Lazlo Hanyecz offered to 10,000 bitcoins for a couple of pizzas. For a least three days, no one took bite of the offer, with Hanyecz writing: "So nobody wants to buy me pizza? Is the bitcoin amount I'm offering too low?"

A user eventually paid about $25 for two pizzas. In today's bitcoins, those pizzas cost Hanyecz $22 million.

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If You Bought $5 in Bitcoin 7 Years Ago, You'd Be $4.4 ...

What a crazy week for bitcoin. The digital currency is famous for its volatility, but in the last few days, it soared from $2,000 to nearly $2,800 . And after a $400 plunge on Thursday, it is sitting around $2,450. Oh, and if you're keeping track, bitcoin is up about 100% since the start of the month.

There are various explanations for the price surge, which include: a flood of new investors from Japan and Korea; blockchain technology (which drives bitcoin) going mainstream; and, of course, speculative mania.

But the most intriguing theory about the bitcoin boom involves national governments. Specifically, are central banks acquiring bitcoin to hold as reserves alongside gold and foreign currencies?

Vinny Lingham, a well-known entrepreneur and digital currency enthusiast, predicted last year that a price surge could lead governments to take a strategic interest in bitcoin as an asset.

"If Bitcoin started to surge globally, and as a result of strategic interests from any one government, if other governments decided to own a piece of the limited 21m coins in issue, I believe this would trigger something akin to a digital commodity race. Imagine if China started buying up large amounts of Bitcoinwould the rest of the world governments stand idly by and watch?" he wrote in a blog post.

Lingham made the point again on Twitter this week, citing a possible rivalry between Asian countries:

It's not clear if Lingham is being entirely serious. (A subsequent tweet hinted the Japan comment might have been in jest.) But the idea of central banks acquiring bitcoin is hardly far-fetched. The Central Bank of Barbados, for instance, published a research paper on whether the country should buy digital currency.

And other CEOs have made the same suggestion:

From a theoretical standpoint, bitcoin possesses many of the same attributes of gold, which makes it an attractive store of value for central banks. Specifically: There's a limited supply of bitcoin, it's easy to trade, and its price is not dependent on governments or regular financial markets.

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As to whether Asian governments are actually acquiring bitcoin, there is so far no hard proof. But bitcoin investors have long looked nervously at the extensive mining operations in China, which are effectively under control of the government.

The prospect of Chinese control, along with the incredible surge in bitcoin's value, is something that could spur the governments of Japan and Koreawhere bitcoin is trading higher than anywhere elseto acquire the cryptic currency.

Finally, some fear bitcoin is still vulnerable to a so-called 51% attack an existential threat in which more than half of the world's bitcoin miners join forces, allowing them to manipulate the blockchain records on which all bitcoin transactions are stored. Today, such an attack is considered too big for anyone to pull offexcept, perhaps, a nation state.

National governments jostling for control of bitcoin could also trigger new forms of crime or economic aggression on the Internet. (If that sounds far-fetched, consider how North Korean attackers robbed the central bank of Bangladesh through the SWIFT banking system).

For now, all of this is just speculation. It's entirely possible that what we're seeing is yet another instance of a speculation-fueled bitcoin bubble that will be followed by a crash. But if national governments are in the mix, it's a whole new ballgame.

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Bitcoin's Price Surge: Are Government's Behind It? | Fortune.com - Fortune

Since hitting a record high of over $2700 on Thursday, the digital currency Bitcoin has gone into a sharp correction, losing nearly 30% of its value in just two days, according to numbers from CoinMarketCap. A broad range of cryptocurrencies, including Ethereum, Ripple, Litecoin, Dash, and Monero also declined, in most cases dropping even more steeply.

Some analysts have described this as profit-taking , which would suggest the declines will level off. But technical analysts speaking to CNBC say the losses could go as deep as 46.5%, pushing Bitcoin down to $1,470.

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A look at history suggests even that might not be the floor. The cryptocurrency rally of the last six months is strongly reminiscent of a Bitcoin bump that unfolded from October to December of 2013, when the price skyrocketed from under $130 to over $1100. That was followed not just by a correction, but by a long, slow decline that had prices pared back to just over $200 within a year, followed by two years of steady, but slow, growth.

Its unlikely that the same precise pattern will repeat itself, mostly because the ecosystem of startups and services surrounding cryptocurrency is vastly more robust now than it was four years ago. But a vital lesson still holds: cryptocurrency prices are volatile because very few speculators actually understand the technology or its potential, leaving it vulnerable to reactive, emotion-driven swings.

For proof, just look at how closely various cryptocurrency tokens' prices are tracking each other, regardless of their often very different realities on the ground. Bitcoin is the first and most basic form of cryptocurrency, with a lot of adoption and stability, but relatively few features. Ethereum is a robust smart system that is already being widely adopted for building complex data-sharing applications. And Ripple is a mostly privately-held solution focused on interbank transfers. Yet the three tokens' charts for the last few months are remarkably similar.

That suggests very little close analysis by those buying into cryptocurrency (and likely a lot of purely algorithmic trading).

The fundamental reason for these massive price swings is that the promise of blockchain tech is simultaneously so profound and yet so far from fruition. Even if one accepts the idea that blockchains will someday underly everything from health records to insurance , the road to overhauling those systems will be long and winding. Well see many more rallies and retreats along the way.

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Why Bitcoin Just Dropped 30% - Fortune