Category Archives: Bitcoin

Will Bitcoin Replace Gold?
Liberty.me user Amagi Metals asks: "In the future, could you see Bitcoin replacing gold as the way to preserve one #39;s wealth?" -------------------------------...

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Will Bitcoin Replace Gold? - Video

Bill Murphy--2013 The Year Of Bitcoin 12.Dec.13
We caught up with our old friend Bill Murphy of Gata.org. He believes that the latest budget deal in Congress is motivated by fear. They have perhaps the low... Kerry Lutz from the caught...

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Bill Murphy--2013 The Year Of Bitcoin 12.Dec.13 - Video

Flipside 11 Bitcoin News: World of Bitcoin @ CES 2015, What Is Bitcoin Top Search, Time For Bitcoin
Tips: 18MSu8S1k1jHzasQv3iX9rf8UeJAvaDbXa Twitter: https://twitter.com/djbooth007/ Episode 11: Time Inc has announced that they are now accepting bitcoin thro...

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Flipside 11 Bitcoin News: World of Bitcoin @ CES 2015, What Is Bitcoin Top Search, Time For Bitcoin - Video

Bitcoin Billionaire - Tips Tricks + Hack
Download File - http://ow.ly/Gbnqt Hey guys MC, Im showing you some cool tips and tricks in the new popular app bitcion billionaire, stick around for a cool iFunbox hack 😀 Download: How...

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Bitcoin Billionaire - Tips & Tricks + Hack - Video

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Bitcoin is a peer-to-peer payment system introduced as open source software in 2009. The digital currency created and used in the system is alternatively referred to as a virtual currency, electronic money, or a cryptocurrency because cryptography is used to control its creation and transfer. Conventionally, the capitalized word "Bitcoin" refers to the technology and network, whereas lowercase "bitcoin" refers to the digital currency. Read more about Bitcoin on Wikipedia

Bitcoin Zebra is a bitcoin faucet. A bitcoin faucet is a web site that dispenses small amounts of bitcoins (or satoshi) for simply entering your bitcoin wallet address and solving a captcha (to prove that you are human). This faucet like most others is funded by donations and advertisements (so please turn off your ad-blocking software!). Donations: 1DXhNVViVYu4xPGUu4pYH2cTr72UPMqKAt

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Bitcoin Zebra - Faucet

Bitcoin was created in the wake of the 2008 global financial crisis to operate outside of central governments, banks, and financial institutions. Other digital and virtual currencies, also called cryptocurrencies, appeared soon afterwards. Because Bitcoin is so new, government regulations are still minimal. However, users can expect greater government oversight in the coming years.

In 2009, a programmer going by the pseudonym Satoshi Nakamoto introduced Bitcoin, partially in response to the financial crisis. Nakamoto wanted a currency that governments and banks could not easily manipulate. Bitcoin is defined by code and has no physical form or intrinsic value. It is completely decentralized and can be exchanged anonymously without incurring any financial service fees. These same traits have made Bitcoin attractive for criminal activities and a challenge to regulators, enforcement agencies, and tax authorities.

Prone to Cybercrime

Because Bitcoin can be used anonymously, it is attractive for illegal financial transactions such as money laundering and buying narcotic drugs online. In 2013, the FBI shut down Silk Road, an online black market best known for illegal drug trade that used Bitcoin as currency. The government seized millions of dollars worth of Bitcoins in the process. The U.S. Marshal later auctioned off a portion of these confiscated Bitcoins. In a 2014 Forbes magazine article, then Executive Director of the Bitcoin Foundation, Jon Matonis, said the auction proves that Bitcoin isfungible and possesses a market-based legitimacy.

As a currency with no physical presence that is stored online, Bitcoin is also attractive to hackers and thieves. Several Bitcoin storage and exchange companies have suffered major thefts. In early 2014, Japan-based Mt. Gox, then the largest digital currency exchange in the world, was forced to declare bankruptcy when it discovered hackers had stolen $477million work of Bitcoins. In March 2014, a Canadian Bitcoin storage company called Flexcoin lost approximately $650,000 worth of Bitcoins.

Current Bitcoin Legal Framework

Because it is still so new, there are no international laws regulating Bitcoin. Each country regards Bitcoin differently and regulations are constantly evolving. This article focuses on the stance of U.S. financial authorities as other governments may look to the United States for precedent.

The U.S. Department of Treasurys Financial Crimes Enforcement Network (FinCEN) issued its first guidance about digital currency in March 2013 (document) followed by another in January 2014 (document). These guidance discussed Bitcoin participants, categorizing them as users, exchangers, and administrators. FinCEN further defined exchangers and payment processors as money transmitters whose actions fall under the laws governing money services business (MSB) within the Bank Secrecy Act (document). Once any business or individual falls under FinCENs definition of money services business, the entity must meet registration requirements and adhere to a range of anti-money laundering, recordkeeping, and reporting responsibilities. BitPay is one of the Bitcoin-related companies already registered with FinCEN.

The number of businesses and merchants (like Overstock (OSTK), Dish Network (DISH), and Dell) accepting Bitcoin is increasing. Many merchants have expressed interest in a derivative products (and derivative markets) through which their exposure to Bitcoin price fluctuations could be hedged. Derivatives are a popular way to hedge risk through products such as futures, forwards, options and swap. Many registered trading platforms are ready to list Bitcoin derivative products. The Tera Exchange, a registered SEF (swap execution facility) with the U.S. Commodity Futures Trading Commissions (CFTC) already has a CFTC-regulated product called USD/XBT Swap. The product protects the value of Bitcoin by locking in a dollar price.

The U.S. Commodity Futures Trading Commissions held their Global Markets Advisory Committee meeting in October where it discussed various aspects of Bitcoin (though it made no formal announcement afterwards). In a December 2014 speech, CFTC Chairman Timothy Massad said that some aspects of virtual currencies will fall under the agencys jurisdiction.

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Bitcoin's Main Stumbling Block: Navigating The Law

A company given $21 million by leading Silicon Valley investors aims to extend Bitcoins functionality so it can power much more than just payments.

LinkedIn founder Reid Hoffman announced an unusual new investment late last month. He and other Silicon Valley luminaries, including Sun Microsystems founder Vinod Khosla, sunk $21 million into a company that may never have to make a profit to be successful.

That company is called Blockstream. Hoffman and others backed it in an effort to give a technological shot in the arm to Bitcoin, a digital currency built upon software that uses cryptographic transactions to prevent counterfeiting without the need for any central authority (see What Bitcoin Is and Why it Matters).

Blockstream is working on technology that will use the code that underpins Bitcoin to secure other kinds of assets, such as contracts or ownership of stock. The companys technology could also provide workarounds to shortcomings in the design of Bitcoin.

Bitcoin has come a long way since its obscure debut in 2009, and the 13.5 million bitcoins in circulation are worth $4.7 billion. But the currency has yet to become widely used, and Blockstreams founders and investors say significant technical improvements are needed for that to happen.

Blockstream will play a huge role in helping it maintain its momentum, Hoffman wrote in a blog post on his investment. He said that the company will operate in a similar way to Mozilla Corporation, which produces the Firefox Web browser and related technology but is owned by a nonprofit foundation. However, if Blockstream is successful in helping Bitcoin catch on, other Bitcoin companies that Hoffman and his fellow investors have backed stand to benefit.

Bitcoin startups have received hundreds of millions from investors in the past few years (see Bitcoin Hits the Big Time). But few resources have trickled down to support work on the core technology that makes Bitcoin work. Startups have focused on building products on top of Bitcoin, such as online payments services. It has fallen mostly to a band of unpaid coders to maintain the core technology that underpins how Bitcoin operates (see The Man Who Really Built Bitcoin).

That community has been unable to work on improvements to Bitcoins design, says Adam Back, a cryptographer and cofounder of Blockstream. Core development has been quite conservative and focused on security and stability, he says.

Blockstream wont be helping out with the core Bitcoin code, though. Instead it is building on top of it using what are known as sidechains.

At the heart of Bitcoins design is what is known as the blockchain, a digital file maintained by computers around the world that records every Bitcoin transaction. Bitcoins most novel feature is that everyone can trust the blockchains record, even if they dont trust every individual contributing to its upkeep or using Bitcoin.

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The Startup Meant to Reinvent What Bitcoin Can Do

Bitcoin Exchange Mt. Gox Liquidation Process Still Underway

December 21, 2014

Amanda Marie

The once largest Bitcoin exchange, responsible for approximately 80% of all of the global transactions, will never be revived despite hopes by many that it might have been. A meeting of creditors was held at the end of November, during which trustee Nobuaki Kobayashi announced that Bitcoin exchange Kraken will be assisting in the ongoing investigation of the missing bitcoins. San Francisco based Payward, which operates Kraken, will also be assisting in the investigation and the claims by Mt. Gox customers who ended up losing bitcoins in the collapse of the exchange back in February of 2014.

In the announcement, Kobayashi stated, "The bankruptcy trustee believes that it is very helpful for conducting the bankruptcy proceedings smoothly and for protecting the interests of the bankruptcy creditors to obtain support from a company with expertise in operating a bitcoin exchange business and managing bitcoin transactions."

Kraken, which had recently opened its own exchange for bitcoin in Japan a few weeks prior, had been a hopeful candidate to take over Mt. Gox but the trustee made it clear that Kraken is not going to revive Mt. Gox.

In a blog post, Kraken CEO Jesse Powell stated that, "The outcome of the Mt. Gox bankruptcy proceedings will deeply affect the Bitcoin community as a whole," and he added, "We've decided to volunteer our resources and expertise in an attempt to minimize damage to creditors, restore faith in the Bitcoin community and demonstrate trusted leadership in the industry."

Former Mt. Gox CEO Mark Karpeles, is still cooperating with the trustee and Kraken during the bankruptcy process of Mt. Gox. Karpeles still remains as CEO of Mt. Gox's parent company Tibanne.

Kobayashi said that the bankruptcy estate so far has secured about 202,149 bitcoins, worth approximately $74 million at the current bitcoin value tracked by Coindesk.

Kobayashi also said he may consider taking legal action to force Karpeles to repay 136 million ($1.1 million) he had in loans from Mt. Gox as of April 24th. The trustee also said Tibanne and two of its subsidiaries owe Mt. Gox about 1.1 billion ($10 million).

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Bitcoin Exchange Mt. Gox Liquidation Process Still Underway

For a number of reasons, major banks haven't seized the opportunity to get involved with bitcoin. Banks like to participate in size, compliance has restrictions, and bosses don't understand it. But these hurdles will be overcome in 2015.

While the world took notice of Bitcoin in 2014, the banks-- normally jumping out of their seats at opportunities to make a profit -- have sat on their hands. Individual financial advisors are eager to take part in the burgeoning opportuinity-- as made clear by the hundreds of such professionals that have taken courses on Bitcoin at the Digital Currency Council. But the firms writing their paychecks are more conservative.

In December 2013, Bank of America's David Woo wrote the first report on Bitcoin by a major financial institution, with many of its peer firms following suit in the 12 months since. The Bank of England, in a quarter four 2014 report, noted that Bitcoin is "a significant innovation" with "far reaching implications." The most senior executives at the financial giants are discussing Bitcoin and many have launched internal Bitcoin task forces to give due consideration to the opportunity and the risks.

What's holding the banks at bay? No question the banks see an opportunity to profit. So why are they sitting on their hands? Here are four reasons:

1. Banks are in denial about Bitcoin's impact on their existing businesses The banks have been capitalizing on the inefficiencies in the current monetary system for years. They've developed businesses that charge high rents for use of their infrastructure. The heads of those businesses aren't going down without a fight. I would imagine there was a similar reaction from the managers of Blockbuster Video's retail stores when Netflix arrived on the scene. At some stage, assuming they don't want to join Blockbuster, Kodak, and other incumbents who took denial to the grave, these banks will have no choice but to stop denying and start adopting.

2. The bosses don't yet understand it Bitcoin is a new technology, financial instrument, and network protocol and requires time (a scarce resource at banks) to learn and understand. Recent statements by the CIO of UBS suggest a belief that the benefits of the Blockchain can be de-coupled from the use of bitcoin the currency -- a suggestion that has been compared to separating the world wide web from the internet, a virtual impossibility. Executives are seeking out training that will ensure a full and complete understanding of the technology and its applications to their respective businesses, along with the opportunities and risks of participation.

3. There are not yet ways to put institutional capital to work in size The total value of the bitcoin asset class has fluctuated greatly, but currently stands at about $5 billion and just over $250 million of venture capital has entered the ecosystem companies in 2014. Compared to other asset classes, there simply hasn't been an opportunity to write checks of the size to which the major financial institutions are accustomed. But that won't last, with regulated investment vehicles now available and at least one and perhaps two ETF's likely to be listed in 2015. Forward thinking financial entrepreneurs are developing products suitable for inclusion on private banking and asset management platforms.

4. Compliance departments are blocking participation Compliance departments across Wall Street are charged with keeping their institutions out of trouble. Understandably, given the Bank Secrecy Act and the Patriot Act, which require that banks undertake a "know your client" process and implement "anti-money laundering"procedures, the executives in these departments are throwing up their hands at the first mention of Bitcoin. Yet, encouraged by the business lines, these same compliance officers, supported by their government relations team and the entrepreneurs building new financial products for their banks, are having discussions with regulators. They are seeking clarification of existing regulations -- which simply never envisioned instruments like Bitcoin -- and considering new asset class specific regulation that will govern their dealings in Bitcoin.

How to overcome the obstacles? Each of these factors are holding the banks at bay... for now. But each of these factors is also likely to be overcome in 2015.

Executives will find ways to utilize the technology to bring efficiencies to their legacy businesses, either passing that savings on to consumers or more likely keeping it for themselves. Bank executives will take the time to get educated and come to a fuller understanding. Financial products will be developed that will be suitable for the sizeable investments that move the needle for institutional investors. And compliance departments -- in conjunction with regulators and entrepreneurs -- will develop best practices that will allow for their institutions to participate and comply with the law.

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Bitcoin: 4 Factors Holding the Banks at Bay

Charlie Shrem was the CEO and CCO of BitInstant. Photograph: Ted Soqui/Ted Soqui/Corbis

The bitcoin entrepreneur Charlie Shrem has been sentenced to two years in jail for his part in a money laundering scheme, after a bitcoin exchange he ran was found to be aiding users of the Silk Road black market.

Shrem was previously a senior figure in the bitcoin community, sitting on the board of the foundation which oversees the cryptocurrency, while also running his own exchange, BitInstant. He resigned as a board member after his arrest in January.

Ive been sentenced to two years, to self-surrender in 90 days, Shrem tweeted. Considering I was facing 30 years, justice has been served.

In September, he pled guilty to the charges of money laundering, and asked forgiveness from the trial judge. I screwed up, he said. The bitcoin community, theyre scared and there is no money laundering going on any more. Theyre terrified. Bitcoin is my baby, its my whole world and my whole life, its what I was put on this Earth to do. I need to be out there. If your honor grants me that, I can be out there in the world, making sure that people dont do the same stupid things that I did.

Shrem was accused of running a scheme with Floridian Robert Faiella to sell bitcoins anonymously to users of the Silk Road website.

According to prosecution documents, Faiella ran a business on the Silk Road website under the name BTCKing, where he let users exchange cash for bitcoin anonymously in exchange for a cut. Faiella fulfilled those orders using BitInstant, where Shrem was chief executive and chief compliance officer.

Under US federal rules, BitInstant was a money transmitter, and required to report substantial transactions, or patterns of transactions, which indicated suspicious activity. Shrem never filed any such reports, and the prosecution claimed that he knowingly partnered with Faiella to ensure that the latter would continue to have access to the exchange.

Theres no question that Mr Shrem, over a period of many months, was knowingly, wilfully, to some extent excitedly and even passionately involved in activities he knew were, in part, involved in serious violations of the law, the judge said, according to Bloomberg.

In January, the man accused of running the Silk Road website, Ross Ulbricht, is due to stand trial. According to prosecutors, Ulbricht operated the site under the pseudonym Dread Pirate Roberts. He is accused of facilitating the trade of illegal drugs, as well as allegedly ordering the assassination of a business associate.

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Bitcoin entrepreneur sentenced to two years in jail over money laundering