Category Archives: Bitcoin

Hackers from North Korea allegedly stole millions of dollars worth of Bitcoins from the South for almost three years. Read more...

Bitcoin is the most valuable cryptocurrency of all times. The first cryptocurrency has always been leading the pack of altcoins, irrespective of how low or high its price has fluctuated. At the same time, the universal decentralized nature of Bitcoin makes it an ideal asset for people, irrespective of their geographical location. This very feature could have driven North Korean hackers to steal the digital currency from their neighboring country during 2013 and 2015.

According to the South Korean news outlet Yonhap News Agency, the countrys cryptocurrency exchanges were continuously drained out of about $88,000 equivalent to 100 million Korean won in Bitcoin on a monthly basis. The alleged involvement of North Korean hackers was mentioned to the media by Choi Sang-myong, a senior official at Hauri Inc., a cyber security firm.

Choi doesnt dwell too deep into how the hackers managed to steal millions of dollars worth of Bitcoin. However, it is all said to have started after South Korea decided to shut down operations at a joint industrial zone at Kaesong one of North Korean border city back in 2013. He was quoted by the media outlet saying,

After that, they were confirmed to have secured more than 100 million won in bitcoin every month Cyber criminals have turned to bitcoin for money as it is very difficult to track them down. Since tracking down the culprits is very difficult, North Korea had jumped on the bandwagon of bitcoin extortion since around 2012.

The alleged involvement of North Korea in hacking incidents is not a new thing. Among these events include a recent theft of money from the accounts belonging to the Central Bank of Bangladesh. As hackers continue to look for green pastures to make a quick buck, the interest in Bitcoin among them is said to have waned in the past couple of years.

It is not sure whether the hackers in question are individuals acting in their own capacity or state-sponsored actors. But, in the current sanctions riddled situation, North Korea may as well be exploring other alternative options for conducting cross-border transactions.

However, with the latest blockchain analysis tools, it shouldnt be hard to find out if North Korea is indeed indulged in the use of Bitcoin for domestic and international transactions.

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North Korea Stole Bitcoins from the South, Truth or Propaganda? - newsBTC

Quartz

Bitcoin BTC) miners have earned more than $2 billion from rewards ... Quartz Bitcoin mining has become a multi-billion dollar industry. Bitcoin miners have collectively earned over $2 billion in revenue since the cryptocurrency was ... and more »

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Bitcoin BTC) miners have earned more than $2 billion from rewards ... - Quartz

The price of a single bitcoin on Tuesday climbed to its highest level in three weeks following reports that Russian authorities might recognize the worlds most popular digital currency as a legitimate financial instrument some time next year.

If true, this would represent a regulatory about-face for the Russian government, which had previously threatened to jail anyone caught using the worlds most popular digital currency. The story was first reported by Bloomberg News.

The price BTCUSD, -0.58% of a single coin traded as high as $1,232 on Tuesday.

After falling sharply during the second half of March, the bitcoin price recovered over the past week as a controversy over a proposed software update that wouldve expanded bitcoins ability to process transactions threatened to split bitcoin into two separate tokens has appeared to subside. Also, a Japanese law that will allow large financial institutions to participate in the bitcoin market finally took effect at the beginning of the month.

Chris Burniske, blockchain analyst and products lead at ARK Invest, said that, although the market appears to be pricing in a resolution to the debate about how to increase the processing speed of the bitcoin network, the issue is hardly settled.

There are still some hurdles the community has to overcome, Burniske said.

Adding to the encouraging regulatory news, China-based OkCoin announced on Tuesday that it had officially updated its anti-money-laundering and know-your-customer policies, leading to speculation that OkCoin, one of Chinas big three exchanges, could reinstate customer withdrawals as soon as April 23, according to Charles Hayter, chief executive officer of CryptoCompare, a provider of bitcoin data and analytics.

The ecosystem is maturing and a dose of regulation in the right form can only help to support the space, Hayter said.

In March, the Securities and Exchange Commission rejected two proposed bitcoin exchange-traded funds on the grounds that it would be difficult for exchanges to provide the necessary market oversight to prevent market manipulation and other unsavory practices.

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Bitcoin touches 3-week high as Russia mulls recognizing it as a currency - MarketWatch

Forbes

Financial Spring Cleaning: For Bitcoin, Save All Records Forbes That's a warning sign to taxpayers that they need to stop underreporting their bitcoin income, because it will become a point of enforcement by the IRS in the future, says Tyson Cross, tax attorney and founder of Cross Law Group and ...

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Financial Spring Cleaning: For Bitcoin, Save All Records - Forbes

On a sunny afternoon in west Beijing, on the auspicious eighth floor of a nondescript concrete high-rise, Huai Yang sits with the curtains drawn in his apartment, making his own luck.

For the past six months, 27-year-old Yang has worked mainly from home, mainly from his sofa, tracking and trading bitcoin, and watching the money roll in. The flat itself is modestly sized; Yang moved in in his pre-bitcoin days when he worked variously for a crowdfunder start-up, a branding consultancy and dabbled in hedge-fund management, all of which he describes as creative financial work. Now, though, his main focus is bitcoin, which is much younger, more fun, and much more money. Yang claims to make up to 1m yuan (116,000) a month, under the radar of the taxman, purely from trading the online cryptocurrency.

Bitcoin has no physical form but the rewards are very tangible; Yangs home is packed full of expensive gadgetry, most prominently a mega-sized flat screen smart board, over a metre wide, which Yang uses to chart bitcoins rise and fall in HD.

Normally, the graphs on Yangs screen show bitcoins and his own fortunes going up and up. At the time of writing, one bitcoin is worth 6,600 yuan (768) recent months have seen the value hover well above 8,000 yuan. The global worth of bitcoin is over $14bn USD (11.3bn), of which over 90% is in yuan, and Yang and his peers are cashing in. I want a more splendid life, he says.

Theres certainly big money to be made in bitcoin, but it comes at a high risk. Bitcoin was designed to be a peer-to-peer currency, free from interference from government and central banks. Since the currency was launched in 2009, however, the Chinese market, where government interventions are common, has come to dwarf all others.

One such intervention took place in February this year, when the government warned that there would be serious violations for trading platforms that failed to abide by strict money-laundering regulations. In line with this, OKCoin and Huobi.com, the two biggest exchanges in China, announced that they would be suspending bitcoin withdrawals for one month.

Incidents like these, which Yang sees as not convenient, but not [a] problem, give Chenxing (who asked that I only use his first name) pause for thought. Chenxing, a boyish, skittish 35, has been trading bitcoin for the past four months, after giving up his too comfortable job as a geo-information engineer for the government. The governments pressure on bitcoin platforms is not so easy to understand, he tells me. Im not sure its really about money laundering they try to control [bitcoin], but they cannot.

For Chenxing, its the system itself that is vulnerable: Technology changes every day, he explains. Maybe tomorrow a hacker can find a way to crack bitcoin the security is from mathematics. If you can crack the mathematics, bitcoin is nothing. Thats why, even though Chenxing describes himself as a believer in bitcoin, he doesnt plan to stay involved for the long term.

Its really not a stable thing, he says, both in terms of fluctuating prices and the uncertain technological future of the cryptocurrency. That said, hes still making more money than in his previous government job. In a good month, Chenxing will pocket the cash value of around five bitcoin, which is close to 40,000 yuan, and which Chenxing prefers to have in cold, hard cash.

Chenxing is something of an anomaly in Chinese bitcoin circles, where the general mood is one of evangelical faith in the currencys potential, especially in an economy where the government often devalues the national currency.

Brendan Gibson, 32, is a United States national who has been in China for six years, trading bitcoin for three. Weve barely sat down to talk when Gibson takes my phone and downloads the BTC Wallet app onto it, before transferring me the seeds of my cryptocurrency fortune: 0.0027 bitcoin, worth 2.50, which is the amount that everyone in the world would have if the 21m bitcoin in existence were equally divided up between all 7.8 billion of us. He believes that everybodys aunt or grandma should be using bitcoin.

For Gibson, bitcoin is a way of life. He hopes to be completely bank free in the near future. Hailing from the shady mortgage industry of corporate America, Gibson shares Chenxings distrustful attitude, but is more concerned about private banks than bitcoins technological vulnerability. Im just kind of fed up with the system, he tells me over coffee in a slick caf and co-working space from where Gibson does most of his work remotely.

I dont think economies should be built on inflated numbers, and I think its kind of ridiculous that everybody relies on this inflated number in their bank account when its definitely not there bitcoin and other cryptocurrencies are making it so that we are our own banks, and thats one less things we have to worry about. Gibson owns two companies in China, and as far as possible uses bitcoin for all his daily expenses, converting the personal profits he makes into bitcoin to avoid using banks.

One of the commonly cited weaknesses in the bitcoin system is that if you lose your private key to access your bitcoin wallet, the bitcoin within are lost forever. In 2015, it was estimated that up to 30% of all mined bitcoins had been lost, with a value of 625m. Unsurprisingly, plenty of people see this as an opportunity to make some money.

Sun Zeyu, 27, works at a tech start-up based near Beijings university district that specialises in bitcoin. His latest project is Coldlar, an offline, physical wallet that stores users bitcoin and can be accessed by scanning a QR code. Bitcoin security is a tough question, Sun tells me, which is why he and his colleagues designed a product that allows people to circumvent bitcoin platforms and have even greater control over their bitcoin. Now that the value [of bitcoin] is going up, he explains, people really realise the importance of security.

Before, when we just traded one or two coins, people didnt mind, [but] now the value of bitcoin is much bigger. Sun got involved with bitcoin while at university after attending a seminar run by Huobi, one of the biggest trading platforms in China. Like his flashier friend Yang, Sun wanted money, and lots of it. He wont tell me exactly how much he earns, but assures me that its hundreds or thousands times more than the 10,000 yuan per month he was earning when he first dabbled in bitcoin three years ago.

His money comes from both his trading activity and his company salary. With the growth of bitcoin and related products like his Coldlar wallet, Sun believes that in 10 years time, the value of the cryptocurrency will be one bitcoin, one house in Beijing. Minor shocks to the system, like the recent suspension of bitcoin withdrawals in China, are just like breathing, he insists, and the inhalations of profit dwarf any other bumps in the road.

Despite the solitary nature of their work, Yang, Sun, Gibson and Chenxing are all sociable creatures. Gibson is connected to hundreds of bitcoin aficionados in China, and has introduced close to 1,000 new people to the technology (although how many are like me, with 2.50 lying dormant in an unused wallet, is unknown), such is his enthusiasm for the cryptocurrency. Chenxing cites the social side of the bitcoin scene in Beijing as one of the main attractions of staying in the industry and the city.

I can meet some fun people who really love bitcoin I think most of the people who like bitcoin are people who like freedom he says. Yang, however, takes a slightly harder-edged approach. He has little patience for sceptics: Yes, bitcoin is a risk. Why should I have to discuss these things with [people concerned about the security]? I earn my money, thats enough. I dont waste my time explaining bitcoin [if] youre not my client. In some ways, Yang concedes, the less people understand bitcoin, the better it is for him. At the moment, the industry is like an ATM for him and his peers, and hes perfectly happy for things to stay that way.

In the fast-changing world of the crypto-currency, nothing seems to stay the same for long. Whether its unpredictable government interventions, or debates within the community about how the industry can and should be scaled, general growth in value thus fair doesnt necessarily suggest anything about the future of bitcoin, despite the faith of its adherents. Gibson makes the point that bitcoin has only been around for nine years; it took PayPal at least 10 to properly catch on.

In Japan it has recently been recognised as legal tender. Its unlikely that the same could ever happen in China, no matter how much its popularity continues to balloon. Chenxing, who has years of insider experience, is sure that [the government] will never accept a thing thats not built by themselves. Many bitcoin traders in China are in it for the long haul, confident that they can ride out any governmental interferences, as long as they have access to the internet. Chenxing, however, is more paranoid. His final thoughts on bitcoin are: I never feel secure.

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Meet the millennials making big money riding China's bitcoin wave - The Guardian

When talking about thebizarre and sudden appeal of bitcoin, finance expert Brian Wolfe likes to compare it to a currency we all know: the U.S. dollar.

Ask anyone where a dollar comes from and they're likely to say, a bank. The more informed, Wolfe says, might answer the Federal Reserve.

Now ask those same people where bitcoin comes from; or,even better, what is bitcoin?

"People don't fully understand this," said Wolfe, an assistant professor of finance at the University at Buffalo School of Management. "To the consumer, it's a bit of novelty."

U.S. Magistrate Judge Hugh B. Scott ruled that bitcoin is not money. (Robert Kirkham/News file photo)

It's anovelty that has more than doubled in value the past year and, since its arrival on the digital scene in 2009, has shaken up financial markets, spawned other so-called cryptocurrencies and remained a mind-scratching phenomenon.

Now, a federal judge in Buffalo is wading into the national debate by suggesting that bitcoin isn't money at all.

In a local money laundering case, U.S. Magistrate Judge Hugh B. Scott recently ruled that bitcoin is similar to a commodity, something akin to a collectible, not a form of currency.

While Scott's decision may not stand the district judge reviewing it may take a different position it does raise the type of legal questions that confront people and businesses eager to move away from traditional forms of money.

Wolfe says bitcoin may not be the ultimate answer, but cryptocurrencies and what they represent a rapid, decentralized, low-cost digital approach to transactions, protectedby encryption are here to stay.

"I think it's inevitable," he said. "The technology that underpins bitcoin is extremely powerful."

A virtual currency

Which, of course, begs the question: What is bitcoin?

Described by advocates as a digital or virtual currency, bitcoin is a medium of exchange that, unlike the dollar, is completely decentralized. There is no central bank or middle man, so two parties can do business directly.

Bitcoin also allows consumers to avoid transaction or bank fees and, because of the technology used to transmit and store information, there's a sense of anonymity and security.

Experts say the anonymity is exaggerated, but law enforcement officials say it remains a popular form of exchange for criminals engaging in everything from sex trafficking and drug smuggling to identity theft and illegal weapons sales.

"It certainly has caught on among people using the dark net and among people who want to hide their tracks," said Assistant U.S. Attorney Wei Xiang.

The anonymity and absence of a middleman are at the root of bitcoin's appeal, and it's that consumer and investor demand that drives its volatile rise and fall in value. Think of it as an ever-changing stock or precious metal.

The rising value of bitcoin

Date Value in dollars Number of available bitcoins

April 6,2016 420.37 15,404,775

June 17, 2016 754.84 15,673,373

Aug. 5, 2016 580.65 15,800,600

Nov. 19, 2016 745.10 15,998,175

Jan. 4, 2017 1,069.40 16,085,050

March 4, 2017 1,274.54 16,199,125

April 6, 2017 1,166.50 16,255,275

Source: Coinbase and Bitcoincharts.com

Viewed as electronic cash, bitcoin is actually the product of a complex, encrypted computer program. New bitcoins are introduced into circulation every day by the people or "miners," as they're known who use their computers to process bitcoin transactions.

To record a transaction, a miner must find the online equivalent of a new ledger page in bitcoin's ever-growing database of transactions, and that means winning a computational contest with other miners. The winner is rewarded with new bitcoins.

From that point on, those bitcoins become part of the more than 16 million bitcoins in circulation and available for use by consumers or investors, criminals and non-criminals.

There's no shortage of get-rich stories involving bitcoin. Like the Norwegian man who bought 5,000 bitcoins when they first came out in 2009 and promptly forgot about his $27 investment. Six years later, he remembered he still had the bitcoins and realized they had becomeworth $980,000.

Created in 2009 by Satoshi Nakamoto, an individual many believe is a composite, bitcoin has grown in use and value, often fluctuating wildly when compared to the dollar. In the past year, a bitcoin has increased from $420 to $1,166 in value.

Laundering withoutmoney?

One the province of drug dealers and terrorists, bitcoin has gained some legitimacy as a form of online payment, and more and more vendors and retailers are accepting it, including Microsoft and Expedia, according to 99bitcoins.com, which tracks the use of the digital currency.There are even bitcoin ATMs in some cities, including Toronto.

Scott doesn't dispute the value of bitcoins but, in his eyes, that doesn't make them money. Scott defines currency as a financial instrument or medium of exchange that is assessed value, is regulated and is protected by a sovereign power.

Yes, bitcoins have value, but they are not regulated and there is no government or central authority backing them up. To the contrary, Scott noted, "the whole point of bitcoin is to escape the entanglement with sovereign governments."

"Money is not just any financial instrument or medium of exchange that people can devise on their own," the judge said in his ruling.

Scott said he could not rule out the possibility that bitcoin may someday become a widespread and routine form of exchange but, until then, it remains a commodity compared to collectibles like "marbles, Beanie Babies or Pokemon trading cards."

While Scott's decision, a recommendation to U.S. District Judge Charles J. Siragusa, raises interesting legal questions about bitcoin, it is unlikely to move forward in the courts. Defense lawyers in the money laundering case that gave rise to the decision are withdrawing their motion to dismiss the charge, in part because Siragusa has indicated he might reject Scott's recommendation.

Early on, it was Siragusa who noted the potential "far-reaching" consequences of 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 arewithdrawing 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.

Feds split on bitcoin

By it's very nature, bitcoin is difficult to understand. The notion that a computer program can produce a currency or fund that increases and decreases in value strikes many as far-fetched, even in this age of digital innovation.

While lawyers can argue over Scott's decision and whether it adds to the confusion or helps clarify it, the judge is not alone in suggesting bitcoin is not money.

The Internal Revenue Service defines it as "property," not currency, for tax purposes and opened the door to bitcoin owners paying for capital gains. In contrast, the U.S. Treasury classifies it as a decentralized virtual currency.

Until the government can agree on what bitcoin is, experts say it will struggle to reach the same level of legitimacy as more traditional forms of money.

"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."

Wolfe thinks bitcoin may be around awhile, and the biggest reason why is the"blockchain" technology behind it.

That technology allows for the creation of permanent and uncorruptible blocks of information, a sort of digital ledger or spreadsheet, and that kind of credible and transparent record could prove invaluable asconsumers, investors and businesses look for alternatives to traditional money.

Blockchain technology also eliminates the middle man in business transactions, a role traditionally carried out by a financial services company, and that is why so many banks and exchanges are researching and investing in the technology.

There have been setbacks for the virtual currency, most notably the disappearance of $450 million in bitcoins from Mt. Gox, a large, Tokyo-based exchange, in 2014. The exchange shut down and later revealed the bitcoins were likely stolen.

"It survived that," Wolfe said. "It was interesting enough and valued enough to survive even Mt. Gox."

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Is bitcoin money? Buffalo judge says no - Buffalo News

The Finance Ministry in Russia has announced its plans to make Bitcoin transactions legal within the country. Read more...

Russia has recognized the increasing popularity of Bitcoin and its potential to solve a range of issues plaguing the current financial system. The country which has been against the use of cryptocurrency for transactions within the country is now planning to assign a legal status to the digital currency to pave the way for a more structured crypto-ecosystem in the country.

Russias move to recognize the legitimacy of Bitcoin as a currency closely follows the recent developments in Japan where cryptocurrencies are now legal mode of payments. Assigning a legal status to Bitcoin as a currency not only makes it much easier for the community members to use the cryptocurrency for a wide range of applications, including payments for their daily needs, it also brings in more accountability, opening doors for newer regulations governing the use of Bitcoin in the country.

Reports indicate that the Russian Finance Ministry is preparing for a new financial revolution, starting sometime next year. By recognizing Bitcoin and other cryptocurrencies as legitimate currencies, the country also intends to implement regulations against money laundering and illegal transfers. Alexey Moiseev, the Deputy Finance Minister of Russia, described the extent of regulations the country plans to implement in the sector by saying,

The state needs to know who at every moment of time stands on both sides of the financial chain. If theres a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.

The governments vision to monitor all transactions and parties to these transactions seems a bit overreaching and with various blockchain analysis tools, it has become quite easy to do so. The financial governance and regulatory bodies are expected to take a decision regarding Bitcoins legal status in the next few months. Once the decision is finalized, the concerned departments and ministries will start drafting new regulations and compliance requirements for Bitcoin platforms and the cryptocurrency community.

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Russia to Declare Bitcoin Legal, Introduce Regulations - newsBTC

Wall Street Journal (subscription)

Test How Much You Know About Bitcoin Wall Street Journal (subscription) As the world's monetary systems teetered on the edge in late 2008, some computer whizzes sought a digital solution. As Lehman Brothers lay dying, a math-based, completely digital means of exchange known as bitcoin was born. A few months after the white ... and more »

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Test How Much You Know About Bitcoin - Wall Street Journal (subscription)

New York Post

No, you can't avoid taxes by investing in Bitcoin New York Post While many bitcoin aficionados tout the new virtual currency as a promising alternative to so-called fiat currencies like the US dollar, the IRS considers investments in bitcoin as property deals requiring that capital gains or losses in this ...

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No, you can't avoid taxes by investing in Bitcoin - New York Post

Bitcoin is everywhere! Bitcoin continues to take the world by storm. The mainstream media simply does not understand.

Now, Bitcoin is threatening to take over the online gambling business. It is not a surprise, more industries are accepting Bitcoins every week or so. Here is what you need to know about Bitcoin in the gambling business.

When you want to play Blackjack, Poker or Bingo, you put your money down on the table. With online gambling, you deposit your digital funds with the casino. Bitcoin gambling does the very same thing.

Bitcoin is a cryptocurrency. What is that? It is a long word, but all it means is that Bitcoin is a digital currency. Bitcoin is money.

Money is basically anything, which is exchanged for goods and services and fulfills the primary characteristics of money. Some of these features are Store of Value, Medium of Exchange and Fungibility. Bitcoin is money because it has each of these attributes.

Thus, when you want to gamble and need some money, you can use Bitcoin. If you made some Bitcoins, when you painted a fence, then use them to gamble. Everyone needs to vent, from time to time.

Bitcoin is also an amazing store of value. Did you hear that the value of Bitcoin just surpassed gold? Bitcoin is rising in value. How many other forms of money can say the same thing?

You can choose any number of ways to pay for your gambling opportunity credit cards, online payment systems or Bitcoin. Bitcoin has some key advantages because it is an electronic currency. In many ways, Bitcoin mirrors the versatility, speed and beauty of the World Wide Web.

Bitcoin is open. It is created by a community of Web developers who mine the Bitcoins. It has a very relaxed control structure. No nation has a monopoly over Bitcoin.

Bitcoin is rather new. It is a baby of the Internet. As such, it has only been around since 2008. Right now, it is still primarily being promoted by the first adopters. In fact, Bitcoins are still being mined.

Bitcoin is unencumbered. Do you know how many credit card laws, there are? The reason why credit cards take so long to process is because there are so many regulations and companies involved. You dont have that with Bitcoin.

Do you want to gamble quickly? Of course you do. Can you gamble quickly with Bitcoin? Yes.

You can generally deposit and withdraw your funds, faster with Bitcoin. You dont need to wait for the banks to check up on all your financial records. This is a cryptocurrency, meaning that its Blockchain is encrypted to keep you secure.

You can get Bitcoins from your friends, miners or any of the following firms: Kraken.com, BTC-E.com or Localbitcoins.com. Once you own Bitcoins, a whole new world, opens up for you.

Finally, you want to make sure that you find an authentic Bitcoin Casino. You know that there are a vast range of types of websites online. The legitimate Bitcoin Gambling website offers Provably Fair Gambling. What is that?

Provably Fair Gambling is a way to verify the websites authenticity using cryptographic hash functions. This is how the Bitcoin Gambling community is establishing its credibility. So, if you love online gambling, now you can have more fun, by using the efficient electronic currency: Bitcoin.

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Bitcoin in Gambling Business, What You Need to Know - newsBTC