Tuesday, July 30, 2013

The Fuss over Bitcoins

The Fuss over Bitcoins.jpg
26 July 2013 | Posted by Jay Banks. Many people are asking the same question: what is all the fuss over Bitcoin? Well, there’s no simple answer, even though bitcoins have certainly made it to the stage of the global media. While Bitcoin supporters still confidently claim that "Bitcoins are the future of the web," the rest of us are far less enthusiastic about the best-known virtual currency after its (let’s try to be as precise as possible) volatile period in 2013, when the Bitcoin value crashed from $266 to $105 and returned to $160 within several hours on April 10. Value at the end of June 2013 was approximately $92, which doesn’t seem to offer much consolation. But let’s start from the very beginning and explain what Bitcoin actually is.
What is Bitcoin?

Bitcoin was invented in 2009 by a mysterious developer nicknamed as Satoshi Nakamoto as a decentralized virtual currency, which means it's not controlled by a person or institution such as a central bank. It doesn’t exist in the physical world, so you won’t find an actual Bitcoin banknote, and if so, it's certainly fake. (But visitors of the first Bitcoin London Conference in London in July 2013 had a chance to use a special ATM that chews up your banknotes and gives you a computer code in return.) The ultimate goal is to issue a finite number of bitcoins set at 21 million approximately by 2014 and therefore eliminate any possible speculation about manipulating the value of the currency by emitting more bitcoins, just like central banks do with real-life currencies. At the moment, there are about 11.3 million bitcoins in circulation. Read more here: http://jaybanks.ca/vancouver-blog/2013/07/26/the-fuss-over-bitcoins

What the past and future mean for regulating bitcoin exchanges in the US

What the past and future mean for regulating bitcoin exchanges in the US.jpg
Published On July 27, 2013 at 11:25 BST | By Ken Abe. The concept of a bitcoin exchange is not new. There is however a noticeable absence of a reliable, efficient and cheap exchange for conversion. The recent bitcoin price volatility has contributed to a frenzy of mainstream press attention, steering the discussion away from the merits of the payment system, and toward the question of whether there is in fact a bubble and whether bitcoin will cease to exist.

Bitcoin supporters tend to agree that more stability against the dollar would spur wider adoption, but that can only be achieved if there are reliable wholesalers to provide liquidity and price discovery. This role would normally be filled by exchanges and market makers, but the current bitcoin exchanges have so far been unable to operate reliably enough to attract established liquidity providers.

US bitcoin exchanges face challenges

The short history of bitcoin exchanges is marked by a pattern of consistent disruption, often caused by technology problems or issues managing client funds. Examples include Bitcoinica, a player that went down after two hacker intrusions involving coin theft, and Bitfloor, a one-man-show that ended when the bank unilaterally closed the company’s account. Mt. Gox is the leading exchange today and is notorious for its inability to handle spikes in trading volumes.

In the race currently underway to create digital currency exchanges, VCs and new startups alike are placing more attention on regulatory compliance than technology and operations. Until March 18th, digital currency businesses were operating in a near-complete regulatory void. - Read more here: http://www.coindesk.com/what-the-past-and-future-mean-for-regulating-bitcoin-exchanges-in-the-us

Ed & Ethan's Bitcoin 'cast 21: scalability, mining centralization, and is MT GOX insolvent?

Ed & Ethan's Bitcoin 'cast 21: scalability, mining centralization, and is MT GOX insolvent?

Bitcoin and the E-commerce | Jeffrey A.Tucker

Bitcoin and the E-commerce | Jeffrey A.Tucker

Thailand becomes the first country to reject Bitcoin

Published time: July 30, 2013 08:47. The Bank of Thailand has banned operations of the internet-only currency Bitcoin, citing a lack of existing laws and capital controls.

After a Bitcoin presentation to the Thai government aimed at explaining how the crypto currency works, as well as its benefits, the country’s authorities ruled that “…Bitcoin activities are illegal in Thailand”.

A Bitcoin team were in Thailand to allay government doubts and to get the currency legitimized in the country.

The verdict means that it’s illegal to use Bitcoins in settlements within Thailand, as well as send it to or receive it from any other country.

The decision by Thailand marked the first major stumbling block for the virtual currency towards wider acceptance. Bitcoin Co. Ltd hopes the country could change its mind at some point. “…the Bank of Thailand has said they will further consider the issue, but did not give any specific timeline,” Bitcoin said in a statement on its web site.

Introduced in 2009, the Bitcoin currency has recently seen increased pressure on all fronts. The latest blow came from the US Securities and Exchange Commission (SEC) in Texas that blamed the state’s Bitcoin operator Trendon Shavers of McKinney for defrauding its clients using a Ponzi scheme. Trendon Shavers promised its Bitcoin investors a 7% interest per week. The SEC said the Texas operator simply used money from new investors to pay out the promised fortune to those already hooked, which represents a classical Ponzi scheme.

Bitcoin has been seen by some US citizens as an alternative to conventional money, to escape currency manipulations by its government. It's a time when the traditional greenback, as well as other world currencies, have been under increased pressure due to the economic crisis. - Source: http://rt.com/business/bitcoin-thailand-digital-currency-783

Overcoming Moral and Visceral Objections to Bitcoin: Good and Bad Responses

Even among those of us who are experienced Bitcoin users today, chances are that when we first heard of Bitcoin we did not embrace the currency wholeheartedly all at once. When people ask the average Bitcoin afficionado how it was that they first joined the Bitcoin community, a common story is that of a tech-savvy netizen who hears about Bitcoin at some point, discounts it because the system has some obvious fatal flaws that should send it crashing down within months, and sees it again weeks or months later after a bubble of media attention – and only then do they listen. Indeed, Bitcoin is a technology so different from anything we have seen before that it is hard to imagine anyone being fully comfortable with it at first. The purpose of this article will be to help Bitcoin advocates identify what some of these misconceptions are, and how Bitcoin advocates can help potential new users more quickly make the jump.

Pitfall 1: Bitcoin is Backed by Nothing

This is the most common argument against Bitcoin. The idea is this: most objects that we are used to dealing with in the physical world are things that we want because they provide some specific use value to us in and of themselves. We want apples because they are healthy and taste good, we want chairs because they are comfortable and we want computers because they help us efficiently browse pictures of cats on the internet. Even things that we get not for our own use, but to trade or sell to others, derive their value from the fact that somewhere, near or far down the chain, someone has a use for it. Bitcoin, on the other hand, is not like that. Bitcoins are nothing more than numbers in a computer network, and by themselves they have no value whatsoever. Oil is valuable because you can sell it to a company which will produce gasoline and sell it to a gas station which will sell it to a driver who will use it to get where they want faster; a bitcoin is valuable because you can sell it to someone who will sell it to someone who will sell it to someone who will sell it – the chain is unending. There is no originating place where the value is supposed to start, and the whole thing rests on an unstable social equilibrium that is liable to collapse at any time. - Read more here: http://bitcoinmagazine.com/overcoming-moral-and-visceral-objections-to-bitcoin-good-and-bad-responses/

Monday, July 29, 2013

Paul Kemp-Robertson: Bitcoin. Sweat. Tide. Meet the future of branded currency

Currency -- the bills and coins you carry in your wallet and in your bank account -- is founded on marketing, on the belief that banks and governments are trustworthy. Now, Paul Kemp-Robertson walks us through a new generation of currency, supported by that same marketing ... but on behalf of a private brand. From Nike Sweat Points to bottles of Tide (which are finding an unexpected use in illegal markets), meet the non-bank future of currencies.
Paul Kemp-Robertson: Bitcoin. Sweat. Tide. Meet the future of branded currency.