Saturday, April 13, 2013

Ed and Ethan's Bitcoin cast #8

Ed and Ethan's Bitcoin cast #8

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Bitcoin has become a scorching-hot commodity among speculators

SAN FRANCISCO — Pure gold or Fool’s gold?

Bitcoin, “virtual currency” that isn’t recognized by any nation or bank in the world, was once dismissed as a goofy idea embraced by nerds and anti-government types. Today, it’s considered either an ideal payment system for the Internet or a digital Ponzi scheme.

Yet become a scorching-hot commodity among speculators — including the Winklevoss twins made famous in the Facebook movie, The Social Network — who are trading the digital currency.

Cameron and Tyler Winklevoss, popularly known as the Winklevii, say they own nearly 1% of the outstanding supply of the $1.3 billion bitcoin market, or about $11 million. (Tyler Winklevoss did not respond to email messages.)

The Winklevii have plenty of company: Andreessen Horowitz and other venture capitalists on Thursday said they were funding a company, OpenCoin, that is a bitcoin competitor. Tim Draper, founder of Draper Fisher Jurvetson, has invested in CoinLab, which is doing bitcoin-related projects. And Tribeca Venture Partners has put money in Coinsetter, a startup trading platform for the digital currency.

Venture capitalists and entrepreneurs consider bitcoins the ideal currency of the digital age, with decentralized currencies and free movement of money globally.

“Finally, a finance system in the digital era we’ve been looking for,” OpenCoin CEO Chris Larsen says, underscoring what he calls “a lot of excitement in the math-based currency movement.”

It is also practical for transactions — especially those overseas. “On the Internet, which is anonymous, you can pay across borders — fee free — without going through the rigmarole and risk of using a credit card,” says Chris Dixon, general partner at Andreessen Horowitz. - Read more here:

Check out this: Amazingly Best list of Free Bitcoins Websites

Bitcoin Report Volume 40 (Tyler Done - Zero Cred)

"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

Bitcoin Report Volume 40 (Tyler Done - Zero Cred)

Keiser Report: Bitcoin Bubble Buzz (E431)

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the Old Lady's gold habit, the gold that may be leaving Cyprus' central bank (or not) and Confucius' famous saying: "IMF STUPID SELL TO GOLD, I'M BUYING." They also look at the Federal Reserve data accidentally sent to Wall Street bank lobbyists and the venture capitalists entering the new Land Grab. In the second half of the show, Max Keiser talks to James Turk about money, gold, bitcoin, currency wars and the nature of bank failures: to look good until the bank fails overnight. They also discuss Austrian school theories on money and how they relate to gold and to bitcoin.

Keiser Report: Bitcoin Bubble Buzz (E431)

Friday, April 12, 2013

Russia Today: Bitcoin is combination of desperation and innovation

As Bitcoin does not discriminate between ethical and unethical transactions, it has the potential to grow into a trillion-dollar transaction network, believes journalist and online show host David Seaman.

The digital currency’s value has fluctuated violently over the last two days, declining by a factor of four. On April 10, one Bitcoin was worth approximately $266 before plummeting to $65 on Friday. These dramatic variations have characterized the currency since the beginning of the year, when it was valued at just $20.

What drives people to put their faith in a product of a mathematical algorithm rather than good old-fashioned hard cash? David Seaman: I think it’s a combination of desperation after seeing what happened in Cyprus and seeing that a lot of central banks around the world can just continue to print money and devalue people’s saving. It’s a combination of desperation and innovation. This is something that was only launched in early 2009, most of the public doesn’t even know about it. It’s a phenomenally interesting technology, the idea that you can trade digital currency as you would cash.

RT: Basically, everyone’s going to be onboard here, aren’t they?

DS: Well there’s a lot of debate because today the price went down significantly due to the fact that the exchanges where you buy and sell bitcoins they were not able to keep up with the recent rise in demand over the past week. They just aren’t able to scale quickly enough. And when an exchange goes down that obviously causes some temporary panic.

But I think the benefits in terms of just how much people will save from transactions fees going away gives it some clear advantages. You know, to send $10,000 over PayPal to family member in another country would cost me around $299. The same transaction over Bitcoin would cost me less than a nickel at current market prices.

RT: Many analysts say the Bitcoin initiative is a bubble waiting to burst. Do you agree?

DS: Thinking of it as a bubble or asking ‘is it going to crash?’ or ‘has it crashed?’ these are questions that kind of make it sound like a stock. And it is not a stock, what it really is a new technology coming online.

You know, when e-mail first came online and people started using email instead of going to the post office you didn’t really have people saying ‘is this a bubble that gonna burst?’ It was just an obviously better technology.

RT: Despite the good theory behind it is Bitcoin a legitimate alternative to the global currencies?

DS: I think that’s the question people are asking. They are asking: “Is Bitcoin worth everything or is worth nothing?” It surged above the $2 billion market cap, and so the question is why not $50 billion? Why not $100 billion? If it is actually easier to use than PayPal or bank transfer why won’t it take off? There are a lot of questions, there is also a possibility of government regulation.

The Economist magazine just came with an opinion piece and they said that the regulator should leave Bitcoin alone, and other emerging digital currencies. Which is a huge deal for the Economist which is super influential to come out and say that regulators should leave this alone, let it grow.

Think about it as if the post office would come in when email was in its first couple of years and if they said “we are going to regulate it and make sure that it stays safe for people to use” it would not had taken off or innovated in a way that it has.

And same with this, certainly there is a lot of uncertainty, nobody knows if those things are going to be the new beanie-babies or if it is the next multi-billion, potentially trillion dollar transaction network.

RT: Bitcoin's anonymity allows people to possibly act illegally. Could it be shut down on this basis?

DS: I think some governments might make that arguments, many more impressive governments are out there. It’s not ultimately a valid argument, because the US dollar, the same $20 bill that I use at the supermarket today to buy sushi could have been in the hands of a cocaine dealer last week or in the hands of a human-trafficker two weeks before that. You know, one of the things about currency is that it does not discriminate between ethical or unethical transactions.

Check out this: Amazingly Best list of Free Bitcoins Websites

Viral List of Websites that gives out Absolutely Free Bitcoins (updated 2013-05-09)

Start Using Bitcoins:

You will need a wallet to receive coins and you can get one for free.
  • Wallet - Its a Hybrid Wallet with many functions, and one of the best imo.
  • Bitcoin-Qt - Is a bitcoin wallet client, which was originaly started by Satoshi Nakamoto and is open source.
  • - This is an online Bitcoin wallet. It builds a unique url for access.
There are also more clients with many other features ~> Click here

There are a number of sites that exist that enable you to earn bitcoins for free or by completing basic tasks. The amount of bitcoins you can earn is usually very low, so these sites are generally designed for newcomers to Bitcoin.

These sites are extremely important to the Bitcoin community as it provides an easy way for newcomers to get their first bitcoins without the need to invest anything other than time.

List of sites to earn free Bitcoins

Recently added:

Been here for a while:

  • Bitvisitor - get paid to watch websites for 5 minutes.
  • Netlookup - ad-supported. Providing free bitcoins every 24 hours.
  • BitcoinAddict - free bitcoins every 24 hours. Chance to win jackpot.
  • Bitcoin faucet - One time payout per Google account.
  • BunnyRun - select a bunny & get paid on the basis of its position in a race.
  • Bitcrate – ad-supported. Break crates to get bitcoins. Different crates have different amounts.
  • DailyFreeBitcoins - free bitcoins every hour, ad-supported.
  • Coinad - free bitcoins every hour for account holders, every 24 hours for visitors.
  • Coinurl - url shortener, get paid by shortening links
  • Bitcoiner - ad-supported. Free bitcoins every 24 hours.
  • Bitcoin Captcha - free bitcoins from a pre-selected pool.
  • Earn Free Bitcoins – get paid to watch websites (allows NSFW/Adult Content)
  • - free daily bitcoins
  • Coinreaper - free bitcoins, BITCOIN Reaper, Free Bitcoins for you here
  • BitStart .biz – scroll down to the bottom or buy an ad for profit.
  • BTC 4 Free .com - fill out surveys to earn bitcoin.
  • Free digital money .com – try apps, surveys, ads, trials etc. (advertised rewards are not who bitcoins but micro-bitcoins)
  • Coinworker .com - do tasks to earn bitcoins.

Network marketing / Multi-level marketing sites

Betting & Casino and other interesting sites:

Original Satoshi Nakamoto Bitcoin Intro (.pdf file )

Spending Bitcoins:

There are lots of merchants accepting bitcoins, and everyday this list grows, from virtual bussiness to retail bussiness.

  • SatoshiDice - SatoshiDice is the world's most popular Bitcoin betting game. Win up to 64,000x your bet, instantly. All rolls are verifiable using the blockchain.
  • Bitmit - buy and sell goods with bitcoin
  • BitcoinStore - Over 500k electronic products for sale (Amazon competitor)

 Extensive list of merchants accepting bitcoins -> Click here

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Silver and Bitcoin - Freedomizer Radio Show April 9th 2013

Silver and Bitcoin - Freedomizer Radio Show April 9th 2013

Thursday, April 11, 2013

Russia Today: Bitcoin Rises - Digital currency beats paper

Imagine having money that's free from government control, safe from haircuts and decentralized. There is such a thing - and it's called 'bitcoin'. The cyber-currency's value has increased ten-fold this year - surging past $200 a unit this week. Its use is seen as a sign of growing skepticism about the exisiting global financial system.
Russia Today: Bitcoin Rises - Digital currency beats paper

Amazingly Best list of Free Bitcoins Websites

Russia Today: Bitcoins much safer than money in banks

Bitcoin's 'anything goes' nature has made it a target for hackers, who quickly learned to steal the virtual money. But William Mook, an entrepreneur who tracks bitcoin markets, says the actual damage is being exaggerated.

Bitcoins much safer than money in banks

Viral news: Bitcoin Panic Selling Halves its Value!!

The Bitcoin virtual currency lost half its value on Wednesday because of a panic sell-off.

From a high of $260 (£169) for each Bitcoin, the value dropped to about $130 (£84) in just six hours.

The selling frenzy began as Bitcoin's main exchange, MTGox, struggled to keep up with the volume of trade in the virtual currency.

MTGox said it was working hard to improve the exchange to avoid future trading problems.

Free money

The high of $260 marked the end of a steep rise in value for Bitcoins, which were worth only $90 each two weeks ago. On Thursday, values recovered slightly to reach about $160 (£104).

In a statement explaining what happened, MTGox said the delays in trading had not been caused by a hack attack. In the past few weeks the exchange, and the bitcoin community, has been targeted by hackers looking to cash in.

Instead, said MTGox, the "rather astonishing" number of new accounts that had been opened in the past few days caused a bump in trading volumes that it was unprepared for. In one day, the number of trades in Bitcoins had tripled, it said.

This caused "lag" or delay, which meant that Bitcoins were not swapped between people as fast as needed.

"As expected in such situation people started to panic, started to sell Bitcoin in mass (panic sale) resulting in an increase of trade that ultimately froze the trade engine," it said. About 80% of all the trade in Bitcoins goes through MTGox.

Engineers were working to improve the MTGox trading engine to handle the huge number of transactions, it said. The exchange added that it was planning to shut down for a couple of hours to add servers to help cope with the load.

Tech news site Ars Technica linked the crash to the antics of an anonymous Bitcoin owner who gave away around $13,000 in Bitcoins via the Reddit social news site. The unnamed person, who used the alias Bitcoinbillionaire on Reddit, randomly picked 13 different people to receive the coins. One lucky Redditor got a gift of about $5,000 (£3,250).

The vast increase in interest in Bitcoins is also creating problems for some established members of the digital cash community.

Bitcoins are created, or mined, when computers complete a complicated mathematical problem. Many individuals have pooled their computer power to ensure this mathematical work is completed more quickly.

But the rising value has meant the MT Red mining pool, which is co-ordinated via Reddit, cannot keep up with its financial obligations to its pool members and is shutting down. The "soaring price" has made it impossible for MT Red to cover what it owes to members, an administrator said. -

Wednesday, April 10, 2013

Canadian Ecommerce Startup Club Parker to Accept Bitcoins as Payment

A Waterloo-based ecommerce startup is claiming to be one of the first companies in Canada to accept bitcoins as payment.

Cofounders Ahmad Elkhatib and Tarek Attia incorporated Club Parker three months ago. They ship savvy razors to consumers for a fraction of the cost of a pack of Gillettes every month. For example, one of their three subscription packages, “The Baby”, costs just $3 per month (including shipping and taxes).

The angel-backed startup is now offering a three-month subscription for a one-time payment of roughly 0.4 bit coins.

“We’ll be one of the first independent online ecommerce sites that will be accepting bitcoins, so were pretty excited,” Attia told Techvibes. “We figure that this could be a very big market that could be a huge currency in the future, and we want to be the first ones to give people that option to purchase.”

Last time Techvibes reported on the new virtual currency based on a mathematical formula, a Canadian man in Alberta was trying to sell his house for bitcoins. The decentralized currency’s value dropped by over $100 today after skyrocketing to more than $200. As of this afternoon it was valued at about $160.

Bitcoins were created as an answer to irresponsible bankers and financial crises like those in Cyprus and Greece. Bitcoins are not backed by a financial institution and there is currently 11 million in circulation.

They’re traded person-to-person (P2P) and must be purchased through an online market. The coins are generated through a process called “mining”, where a user gives their computer’s processing power to Bitcoin so it can solve mathematical problems required to validate transactions. Coins are issued as rewards when a problem is solved

Meanwhile in Waterloo, Club Parker has steadily been refining their platform since gaining a seed round of angel funding worth $40,000.

Attia and Elkhatib met as children and eventually went to high school together. They both pursued athletic careers before founding Club Parker. Elkhatib played semi-professional soccer in Waterloo while Attia holds eight world records in powerlifting, although “really nobody cares because it’s not an Olympic sport”, he said.

They started the company based on a belief that large body care corporations should be held “responsible, liable and accountable” in what they charge consumers. - Read more here:

Bitcoin Suffers A Correction Amid Apparent DDOS Attacks On Some Exchanges

Bitcoin is undergoing a classic correction after quintupling in price over the past 30 days. The currency, which was trading as high as $265 earlier today on Mt. Gox, plummeted and is now trading at around $150.

We’ve reached out to one of the biggest exchanges, Mt. Gox, to see what happened. But another San Francisco-based exchange called TradeHill is saying that the crypto-currency is falling because of apparent distributed denial of service attacks on Mt. Gox and Bitstamp. A denial of service attack happens when an attacker overwhelms a target with external requests, so that it can’t honor regular requests from legitimate users.

This also happened last week when Mt. Gox when Bitcoin reached $142 and hackers attacked the exchange. At that point, Mt. Gox said it had suffered ”its worst trading lag ever.”

The Tokyo-based exchange said last week that hackers are engaging in a strategy to manipulate the price of the currency: “Attackers wait until the price of Bitcoins reaches a certain value, sell, destabilize the exchange, wait for everybody to panic-sell their Bitcoins, wait for the price to drop to a certain amount, then stop the attack and start buying as much as they can. Repeat this two or three times like we saw over the past few days and they profit.”

It looks like this may be happening again. Aside from that, any kind of 400% increase over 30 days is probably unsustainable from a technical point of view. A correction at this point would be healthy and natural. -

Amazingly Best list of Free Bitcoins Websites | You can find more information on Bitcoin Mining here: and here:

Gizmodo article on Bitcoin: What Is Bitcoin?

Maybe you've heard of Bitcoin—it wants to shake the entire global economy, and has become the financial bubble du jour with a skyrocketing value. It's online money—an alternative to dollars and euros. Well what's that mean? It's complicated, but we break it down.

Bitcoin is an anonymous digital currency...

Bitcoin is not real money. It's an online "currency"—virtual tokens that can be exchanged for goods and services at places that accept it, the same way you'd give someone a dollar for a cookie. But unlike a dollar, a Bitcoin has no serial number or any possible mechanism that could be used to trace it back to a buyer or seller. This makes it attractive to drug dealers and/or privacy advocates.

...with mega aspirations...

In their YouTube manifesto, Bitcoin's creators say they're going to revolutionize global finance the way the web changed publishing. So! Kind of a lofty goal, aiming to be a global currency up there with (or replacing) the dollar. Right now, that's still the pipiest of pipe dreams.

...and no central authority...

Aside from the software developers who work on new versions of the code that underpins Bitcoin, there's no Central Bitcoin Bank—no virtual Federal Reserve. Bitcoins are backed by no one and nothing and completely unregulated.

...that's exchanged via P2P...

When you write your friend a check, money from your account is withdrawn from your bank, and then transferred to her bank, and then she withdraws it as cash (maybe). With BitCoin, there are no middlemen (other than the users that comprise the network itself). Money goes straight from you to whomever, through the BitCoin P2P system, with no intermediary agency passing along the chips.

...and generated by its users...

This is where it starts to get a little weird! Unlike traditional currency, that's backed up by something, (be it gold, silver, or a central bank), Bitcoins are generated out of thin air. Through a process called "mining," a little app sits on your computer and slowly—very slowly—creates new Bitcoins in exchange for providing the computational power to process transactions. When a new batch of coins is ready, they're distributed in probabilistic accordance to whomever had the highest computing power in the mining process. The system is rigged so that no more than 21 million BitCoins will ever exist—so the mining process will yield less and less as time goes on, and more people sign up. This makes the whole system a lot sweeter for early adopters. be spent at the few places BitCoin is accepted...

Compared to "real money," few places accept Bitcoin at the moment. But that's quickly changing. There's decent incentive for small businesses to accept Bitcoins—it's free to use, and there aren't any transaction fees. At the moment you can buy the services of a web designer, indie PC games, homemade jewelry, guns, and even cocaine. If the internet is the Wild West, BitCoin is its wampum.

...or converted into real money.

Just like you can trade in yen for dollars, you can swap your BitCoins with other users for several "real world" currencies. And right now, the BitCoin is trading very high! When we first published this post in May 2011, one Bitcoin was worth $7.50. Today it's over $250. And climbing. And climbing and climbing. Not too shabby—the world is starting to see its first Bitcoin millionaires.

But like any bubble—or perhaps more so than most bubbles—the digital coin rush could collapse at any moment, leaving a lot of people with a lot of virtual nothing. -

Amazingly Best list of Free Bitcoins Websites | You can find more information on Bitcoin Mining here: and here:

Bitcoin Is A Disruptive Technology

A financial network is a technological platform that people build businesses on top of. And the traditional banking and credit card networks are closed platforms. If you want to build an e-commerce site, a payment network like Paypal, or any other service that deals in dollars, you need to convince incumbent financial institutions to do business with you. Getting such a partnership is difficult and involves a lot of red tape.

There’s a good reason for the high barrier to entry: electronic transactions in the conventional banking system are generally reversible. If someone makes a fraudulent charge to your credit card, you can dispute the transaction and in most cases the bank or the merchant, not the customer, will cover the cost. That’s convenient for consumers, but it requires the financial system to be a fairly close-knit web of trust. Allowing a new member into the club creates risks for everyone else. So the incumbents are understandably reluctant to deal with anyone who isn’t well-known and well-capitalized.

Bitcoin is different. Because transactions are authenticated cryptographically and cannot be reversed, there’s no need to restrict access to the network. There’s no risk to accepting payments from complete strangers. That means people don’t need anyone’s permission or trust to go into business as a Bitcoin-based merchant or financial intermediary. Accepting Bitcoins also allows merchants to avoid much of the administrative overhead, like dealing with chargebacks, that come with a conventional merchant account.

Of course, what looks like a plus for merchants can look more like a minus for consumers. Consumers generally like the conventional banking system’s strong consumer protections. We like the fact that we’re not on the hook for fraudulent banking transactions, and that the FDIC will make us whole if the bank holding our money goes bottom-up.

And Bitcoin looks inferior to the conventional banking system in other ways too. Visa and Mastercard are accepted at millions of locations around the world. Only a handful of merchants accept Bitcoins. Conventional banks have elaborate websites with features like direct deposite of paychecks and automatic bill-paying. Dealing with Bitcoin is too intimidating for all but a tiny minority of tech-savvy enthusiasts. - Read more here:

Amazingly Best list of Free Bitcoins Websites | You can find more information on Bitcoin Mining here: and here:

Bitcoin's price soars to over $200

The digital currency's value balloons as awareness about it grows globally and Europe's debt troubles deepen

Bitcoin may just be a "virtual" currency, but there's no denying its rising value. The currency, which last month was trading on the order of roughly $30, is now valued at over US$230.

On Tokyo-based Mt. Gox, the most popular place online for people to buy and sell Bitcoins with others around the world in their own local currencies, the last listed price for a single Bitcoin was $236. That's up more than 100 percent from roughly $100 a week ago.

Pinpointing the factors underlying Bitcoin's ascending popularity, however, is tricky. Bitcoin is based on a concept called "crypto-currency," using a peer-to-peer framework allowing its users to manage transactions and issue Bitcoins without any central financial or regulatory authority. The true identity of even its founder, colloquially known as "Satoshi Nakamoto," remains a mystery. Bitcoin currently has roughly 1.4 million users.

"Bitcoin's foundation is similar to Linux, which was open-source software designed to take on Microsoft's Windows," said Jon Matonis, a board member of the Bitcoin Foundation, which acts as an organizing body for Bitcoin by aiming to provide software funding and also publish best practices for businesses transacting in Bitcoin.

The thinking among advocates is that by not being controlled by a corporate or government entity, Bitcoin is free of external political influence or tinkering. But Bitcoin is a speculative currency, and changes in outside markets may still have a bearing on its value.

Some have speculated that Bitcoin's value is soaring in part because of the unstable Euro, and in particular Cyprus' recent freezing of uninsured bank deposits amid the island country's debt crisis. The skyrocketing media attention the currency has attracted in recent weeks may also be playing a role in Bitcoin's price.

As its popularity has grown, more and more merchants have also started to accept Bitcoins as a method of payment. Etsy, Mega, Expensify and WordPress are just a few.

But whether $230 is a fair price for one Bitcoin is harder to say. "In all honesty, it's very hard to determine if it is undervalued, overvalued, or where it should be," said Michael Goldstein, a computer science student at the University of Texas at Austin who also operates a consulting site for companies looking to accept Bitcoin payments.

Other Bitcoin exchanges include Coinbase, Bitinstant, LocalBitCoins and CoinLab, which runs a Gox-like exchange for Canadians and Americans. But Mt. Gox, with 80 percent of all trades, is by far the largest.

Bitcoin's overall market reach, however, is still small. The total value of all Bitcoins currently in circulation is only about $300 million, according to Mt. Gox.

But as a decentralized platform for peer-to-peer online payments, Bitcoin is the biggest player, and it has the first mover advantage, Bitcoin Foundation's Matonis said. -

Bitcoin derivatives, unlike gold and silver cases, is a good thing

With the newly-forming markets for leveraging and shorting, bitcoin traders will have to be more like gold and silver futures traders.

The above is a tweet from the excellent Jon Matonis who has been following Bitcoin for Forbes since its inception with great insight. I’m sure that his tweet referring to news that institutions are now getting into the bitcoin game is giving some bitcoin boosters a few heart palpitations. Why? The early adopters of bitcoin like the fact that it is completely outside the professional traders and hedgies of Wall St. and City of London, so news that these guys have now discovered Satoshi’s baby is worrying. The clue as to why I think these fears are overblown is in the rest of Jon’s tweet. He makes reference to gold and silver and how they are traded on futures markets. On one hand yes, this is true, bitcoin derivatives are coming but I think we need to understand why, unlike in the cases of gold and silver, this is a good thing.

To encapsulate my argument succinctly: the quoted price for gold and silver are derived primarily from derivatives markets and this will not be the case for bitcoin.

When I asked professor Antal Fekete on the “Keiser Report” recently, ‘what is the current cash price of gold,' he looked at me quizzically because, technically speaking, there is no real current ‘market price’ for gold. The price quoted for Gold and Silver comes from the Comex futures market and is more ‘implied’ than actual. This is why it’s so easy to manipulate the price of Gold and Silver on Comex. You can borrow virtually any amount of money you want at virtually no cost and sell futures contracts all day until the price drops to the price you want (naked short-selling). It takes approximately 50 times more buy orders to move the price of Silver up $1 than down: these are all the Wall St. banks dumping naked shorts all day to keep the price low - as a favor to the Fed - who in turn keeps rates near zero - citing the ‘deflation’ apparent by the low cost of things like Silver.

Bitcoin derivatives, in my opinion, will not suffer a similar fate because price discovery is set by an actual supply and demand market place. As I noted in a previous article, if the intention of Wall St. is to disrupt bitcoin before it disrupts the Fed the ‘soft underbelly’ of vulnerability for bitcoin appears through attacking exchanges through patent law (claiming that the patent to make virtual markets belongs to Wall St.).

So what’s the upside of bitcoin derivatives?

I think the presence of institutional players will increase the capitalization of bitcoin and get us closer to $10 billion and beyond. (There’s no reason why BTC’s market cap can’t equal to Apple for example with a market cap of $400 billion)

Bitcoin supporters should welcome this development. -

Tuesday, April 9, 2013

The Secret Weapon That Makes Bitcoin Impervious To Super-Powerful Quantum Computers

If you don't know what Bitcoin is, you should. This digital currency has captured lots of attention as the value of a single unit recently surged to over $200.
Venture capitalist Chris Dixon points out in a tweet that the emerging field of quantum computing might totally ruin Bitcoins, but this doesn't seem to actually be the case.

To simplify the idea dramatically, a quantum computer effortlessly outperforms a conventional computer by operating in a totally different way. Your personal computer interacts with data by representing it as "bits" – ones and zeroes. But a quantum computer deals in "qubits," which represent data as ones, zeroes, or the quantum state between the two. With the ability address more data at a time, quantum computers become tremendously powerful tools for a number of fields.

This might sound troubling to the Bitcoin world, as it's built upon cryptography to function properly. Bitcoins are generated only as computers break codes to unlock them, and the time required to break these codes is figured in to controlling inflation and stability. But it seems that if these super-powered quantum computers started crunching numbers to earn Bitcoins, they could throw the currency out of balance. Furthermore, there's the idea that they could even break Bitcoin security entirely.

But this isn't so, according to Bitcoin.

True quantum computers are so tremendously specialized that consumer access just isn't feasible yet. The D-Wave quantum computer that's often written about (and that Lockheed Martin just paid $10 million for) is usually touted as proof of concept, but Bitcoin says it's "not a quantum computer of a kind that could be used for cryptography."

And when there are quantum computers for cryptography, Bitcoin will still be okay. Its security "was designed to be upgraded in a forward compatible way and could be upgraded if this were considered an imminent threat."

Even if or when quantum computing should somehow catch up with Bitcoin security, there's already a field called post-quantum cryptography, which exists solely to encrypt data such that quantum computers can't crack it.

So mine away. The value of the Bitcoin may fluctuate greatly, but it won't have anything to do with security threats. Read more:

Amazingly Best list of Free Bitcoins Websites | You can find more information on Bitcoin Mining here: and here:

Trace Mayer on FOX Business – Why Bitcoin Is Just Getting Started

Trace Mayer recently appeared on FOX Business and was asked the question by host Melissa Francis: ”Bitcoin is just insane and it has really taken off. People are paying attention to it. But is it for real?”

His response, “Yes, it is definitely for real. I remember the first time I encouraged people to buy Bitcoins it was around a nickel per bitcoin and now it is around $133. So those people who would have followed that advice would have been able to participate in one of the largest bull markets in history and this bull market is not even close to being over.”

Make a Real Investment in Virtual Currency?

Amazingly Best list of Free Bitcoins Websites | You can find more information on Bitcoin Mining here: and here:

The boom of Bitcoin: Digital currency goes viral

A new currency is taking the world by storm and has seen its value surge more than 1000 per cent from about $15 to nearly $170 since the beginning of 2013.

Bitcoin is a decentralised, anonymous, digital-only currency that's lately got a lot of public attention and sparked a trading frenzy.

Not managed like a typical currency, Bitcoin belongs to no particular country, is not minted on plastic, paper or metal and under the control of no central bank.

And yet it has reportedly enabled a US citizen to buy Porsche Cayman last month!
How Bitcoin works
Bitcoin was originally developed in 2008 by a computer developer using the pseudonym "Satoshi Nakamoto", who published a paper describing how it could work.

INTERACTIVE: Yahoo!7 currency converter

The goal of creating Bitcoin was to have an alternative currency that could not be devalued by governments or central banks.

A report compiled by Business Insider says just after a year of being introduced, they started being traded and mined.

The online currency now totals $1.8 billion and is accepted by various merchants and services internationally.

Bitcoin generation is based on a highly complex computer algorithm, programmed to generate a fixed number of Bitcoins per unit of computing time.

They can be bought with money and can also be "mined".

The Motley Fool Australia explains that obtaining Bitcoins is similar to opening an account through a bank. “All a user has to do is visit Bitinstant and convert a local currency into the virtual money. The currency is traded just like any other, with the most popular exchange being Mt.Gox.”

In order to trade via a bank transfer you need to “link” your bank accounts using the login details associated with said bank account.

Don't miss: All the latest Australian dollar and currency news

Business Insider reports that by 2140, the total number of Bitcoins in circulation will be capped at 21 million.

In other words, the Bitcoin system is self-sustaining, coded to prevent inflation, and encrypted to prevent anyone from disrupting its code.

The Cyprus effect: Are Bitcoins safe?

Even since the Cyprus crisis, the value of Bitcoins has soared due to a spike in fear about the risk in government-run currencies. Forbes magazine writer Peter Cohan observes that the genesis of that fear was Cyprus’s policy of accepting few-questions-asked cash and charging companies an ultra-low 10 per cent tax.

Related: Top 5 reasons to invest in currencies

“Cash flooded Cyprus from around Europe — a third came from Russian oligarchs. And those deposits turned into loans. According to the Times, a bank would give a a £20,000 loan and a £5,000 credit card to a depositor with a monthly salary of £400. Much of this money went into real estate that soared in price,” Cohan notes.

“And while the 2010 Euro-recession took much of the wind out of Cyprus’s real estate market, it was the purchase of Greek government bonds by Cypriot banks that caused its banking system to collapse. By comparison, Bitcoins look like a currency with relatively low risk”.

However, Cohan also notes that Bitcoin is not a zero-risk currency as it remains vulnerable to networks of bots — home computers that get hijacked by hackers. “The BBC reports that ZeroAccess, a leading botnet, has directed millions of infected PCs to mine Bitcoins to tap into their soaring value.”

Some are praising Bitcoins as the next gold, but is it really safe? The jury is out on that.

According to Alan Safahi, the CEO of Bitcoin processor Zip Zap, “There is a little bit of a bubble. I’m not happy about prices going up as fast as they have.”

Motley Fool advises it would be wise not to fall for that argument. “Give it some time before you go rushing to exchange your hard-earned money for some Bitcoins,” the Fool writes. -

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