Bitcoin News
Daily diary of what's happening with Bitcoin.
In a post on BetaBeat by editor Jessica Roy (@JessicaKRoy) includes confirmation from Dwolla that funds held by Mt. Gox in the U.S. had been seized by the U.S. authorities. Excerpts:
“‘The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘’Seizure Warrant’’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),’ [a representative from Dwolla] said. ‘Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum.’”
[Note - Camp BX, based in the U.S., is the only other market exchange that allows accounts to be funded with Dwolla and performs withdrawal of USD balances to Dwolla. FastCash4Bitcoins performs cash-out service to Dwolla.]
- http://bit.ly/10wQRvI (Betabeat article)
- http://i.imgur.com/soOTB5N.png (Dwolla notice received by Mt. Gox customer)
- http://bitcointalk.org/index.php?topic=205370.0 (Further discussion on the development)
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Forbes writer, Kashmir Hill (@KashHill), invited Bitcoiners to join her for a dinner at Sake Zone in San Francisco to celebrate the conclusion of her Week Of Bitcoin series of posts. In her video she interviews some of those who joined her.
- http://bit.ly/16mUiNA Video - Length: ~4 minutes
- http://onforb.es/199d9Zo (Week Of Bitcoin Series Of Posts)
- http://bitcointalk.org/index.php?topic=201343.0 (Further discussion of the video)
- http://bitcointalk.org/index.php?topic=200458.0 (Further discussion of the series)
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A post on Bitcoin Money (@BitcoinMoney) blog describes the upcoming May 15th 2013 hard fork:
“Released following the Bitcoin blockchain fork on March 11th 2013 was an updated v0.8 client (v0.8.1) that temporarily respects an undocumented limit found in all prior versions of the Bitcoin-Qt/bitcoind clients.”
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“That temporary grace period ends and on May 15th 2013 (12:00 am UTC) any node that still hasn’t been fixed to remove this limitation will eventually find itself rejecting valid blocks from the Bitcoin blockchain. It is possible that these unfixed nodes will see block confirmations but those blocks will not be part of the longest chain so it is critical that no commerce continue on or after May 15th using a node that hasn’t been upgraded.”
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“Release v0.8.1 of Bitcoin-Qt/bitcoind has been available since March 18th, 2013 and accommodates the May 15th 2013 hard fork properly. The fix has been backported to v0.7.3, v0.6.5, v0.5.8, and v0.4.9 clients as well.”
- http://www.bitcoinmoney.com/post/50027334954
- http://sourceforge.net/projects/bitcoin/files/Bitcoin/bitcoin-0.8.1
- http://bitcointalk.org/index.php?topic=199699.0 (Backports)
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Phil Archer’s post on TheGenesisBlock.com describes how regulators are having a difficult time figuring out what where Bitcoin fits. Excerpts:
“[CFTC’s Bart Chilton] stated on bloomberg.tv: ‘In essence, we’re talking about a type of shadow currency, and there is more than a colorable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction.’”
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“Bitcoin clearly does not derive its value from the future purchase of an underlying asset. Therefore, if the CFTC plans to regulate bitcoin, they must consider bitcoin either a commodity or forex, with the intent to regulate bitcoin forex or bitcoin derivatives.”
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“Since bitcoin is not the currency of a foreign government, but rather the first global currency, it would seem their power to regulate bitcoin as forex does not apply.”
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“Bitcoin being declared a commodity would create an interesting contrast with fincen’s March guidance requiring bitcoin exchanges to be registered as Money Service Businesses (MSB).”
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“So it seems the US Government has no idea how to classify bitcoin: is it a currency or a commodity? Any CFTC ruling would likely declare bitcoin a commodity and put it in a Schrodinger’s Cat state – it would coexist as both a currency and a commodity.”
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“FinCEN was forced to create a new definition for virtual currencies, and we expect the CFTC to do the same. However, those living in fear of what the CFTC’s decision may hold should have solace in the fact that any regulations will be largely unenforceable anyway.”
- http://bit.ly/10vfONv
- http://bitcointalk.org/index.php?topic=200305.0 (Further discussion of the topic)
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Through daily posts by Forbes writer Kashmir Hill (@KashHill) we learn how far Bitcoin as a payment system has come along. Her assignment ais to live on bitcoin for a week — without spending any dollars. Excerpts from Day 4:
“[Bakery owner] Jennifer Longson is there, wearing a cupcake apron, filling cupcake tins with fresh batter along with two employees. She says I’m the second customer of the day asking to pay in Bitcoin.”
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“Cups and Cakes [receives publicity] as one of the first stores to accept the currency. Her little shop has been featured in international news: on the BBC, in the Financial Times, on NPR Marketplace, and beyond.”
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“Longson is surprised that I’m able to use my Blockchain iPhone app to scan her QR code and make the payment. “When you update your iOS, you’re going to lose that,” she says. ‘Apple has blocked it.’”
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“[Market owner Adam Sah] didn’t want to take the currency risk with the Bitcoin I paid him so he paid it out the same day to Name Cheap, the company which provides their domain name services (and accepts Bitcoin). ‘I paid our fee for the year with it,’ he says. ‘More and more IT services accept Bitcoin. […] With all these new things, you have a bunch of early adopters who experiment,’ he continues. ‘Then there’s a crossing of a chasm and then it becomes mainstream.’”
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“‘As a retailer, I am salivating over the idea of having this silently competing with credit cards and their fees and the hidden cost of dealing with cash: counting it, the fee I pay to Wells Fargo for a business account, transferring it,’ [said Sah]”.
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“When I go to bed, Bitcoin is valued at $96; by Saturday, it is shooting back up in value.”
- http://onforb.es/10eKkXe (Day 4)
- http://onforb.es/Zszg8U (Day 3)
- http://onforb.es/ZYlttF (Day 2)
- http://onforb.es/10VXn6b (Day 1)
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Wired contributor Dan Kaminsky (@DaKami), the security researcher who “broke the internet” some years back, opines on Bitcoin. Excerpts:
“The internet has proven to be a pretty big deal for global society, and Bitcoin could basically be thought of as the Internet, applied to Money.”
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“Bitcoin is about as friendly to [regulation] as the rest of the internet is — not very. To put it another way: Bitcoin’s a dollar bill, with a teleporter built in. We can just poke in a few coordinates and poof, off it goes, with the ease of posting to some forum somewhere. That’s somewhat new.”
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“But its real value proposition is as a medium for transfer. It really works. And keep in mind, if we’re just holding the currency for a few minutes, we don’t care about the absolute value.”
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“Bitcoin’s resilience comes from a property I refer to as Too Big To Regulate. Put simply, it’s easier to tell ten people to behave, than ten thousand. So if we want a system that’s impossible to regulate, get the power in the hands of ten thousand rather than ten.”
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“In Bitcoin, because everything’s backed by cryptographic keys, one can actually prove s/he has access to a certain amount of Bitcoin. We are either able to sign messages linked to the private keys, or we are not.”
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“I don’t really see the volatility declining in the present model. But this is an experiment. And it continues.”
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“Short of an all out war on technological innovation, it’s just really tricky to see how to even try to stop Bitcoin. The internet was not the first time networked communication was tried, but it was the first time a major network became available that didn’t have gatekeepers everywhere.”
- http://www.wired.com/opinion/2013/05/lets-cut-through-the-bitcoin-hype
- http://bitcointalk.org/index.php?topic=194554.0 (Further discussion of the article)
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The latest article by columnist and Bitcoin Foundation board member Jon Matonis (@JonMatonis) is on how Bitcoin is the only real disruptive technology in the payments space but is disruptive in a way that others might be missing. Excerpts:
“We are witnessing something unique in money and payments. For those that do invest and successfully navigate the potential traps, the reward is a first-mover advantage for a new international monetary unit.”
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”Here’s the important part. Disruption in the unit of account is the way to disrupt the payments space.”
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“With a nonpolitical monetary unit, many new possibilities become apparent structurally that would not have been contemplated before, such as: peer-to-peer mobile applications that don’t require permission from legacy transaction carriers; global remittances that don’t require high-fee currency conversion; merchant categories that are no longer disallowed due to fraud and chargeback risk; and merchant reach into countries that are not even on the map for Visa, MasterCard or PayPal.”
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“Disruptive technology disrupts. That is its mission. It annihilates any substandard process or product in its path and it originates outside of the established paradigm. You don’t see it coming.”
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“A payments startup that ignores Bitcoin in its strategic plan is like a publisher ignoring the Web in 1999. Certainly, innovators can design routes around Bitcoin and established players can dismiss it as insignificant, but that won’t make the elephant go away.”
- http://bit.ly/17tznX5
- http://bitcointalk.org/index.php?topic=191021.0 (Further discussion of the article)
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Guardian’ s Kate Connolly (@ConnollyBerlin) and Guy Grandjean (@guygrandjean) cover the story happening in Kreuzberg, which is becoming a the world’s largest Bitcoin local economy. Excerpts:
”’[Bitcoin is] an easier way of digital payment than credit cards, which cost me a lot of money as a business and to which I’m forced to sign up for years,’ [says Florentina Martens owner of Parisian-style cafe Floor’s].”
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“Graefekiez, a cosy neighbourhood established in the 19th century in the southern Berlin district of Kreuzberg, currently boasts the highest density of businesses accepting the currency in the world.”
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“‘Kreuzberg is traditionally an area in which people are very politically aware, critical towards existing systems and are constantly discussing and looking for alternatives to them, which makes it the perfect breeding ground for Bitcoin,’ says Joerg Patze [owner of Room 77].”
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“[Law student Jeff Gallas] taps the amount he owes Room 77 into the virtual Bitcoin wallet on his Android phone and, aligning it with a code on the bar’s device, presses a button to process the payment. A theatrical ‘kerching’ sound follows and Gallas is grinning from ear to ear. ‘It could hardly be easier,’ he insisted.”
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“[Wilko Bereit] likes the fact that Bitcoin scares people in suits, ‘because if this thing were to really take off, it would bankrupt a lot of bankers.’”
- http://bit.ly/12rZ73O
- http://bit.ly/17m9pER (Video)
- http://bitcointalk.org/index.php?topic=188269.0 (Further discussion of the article and video)
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Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes upcoming presentations at the Bitcoin 2013 Conference (May 17-19) in San Jose, CA. Excerpts:
“The conference is attracting technologists, venture capitalists, bankers, traders, payments specialists, and financial regulators.”
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“The agenda will be particularly interesting to those in the banking and payments fields.”
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“BitPay co-founder and CEO, Anthony Gallippi, will explain how he’s been driving business adoption of Bitcoin.”
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“Paymium’s co-founder and chief operating officer, Pierre Noizat, will talk about bridging the gab [between bitcoin and the traditional regulated banking infrastructure].”
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“Rainey Reitman, the activism director of the Electronic Frontier Foundation, a nonprofit civil liberties law firm and advocacy center, will hold forth on the liberating aspects of Bitcoin.”
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“Tuur Demeester, author of the financial newsletter MacroTrends, will talk about bitcoin’s emerging role as a separate asset class alongside precious metals, equities, and bonds.”
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“Online payments industry veteran Peter Šurda about how nonpolitical cryptocurrencies like bitcoin could alter the future of fractional reserve banking.”
[Note: Though registration for the event continues online through May 15th, the deadline for the conference rates is April 26th.]
- http://bit.ly/17IYUcR
- http://www.Bitcoin2013.com
- http://www.bitcoin2013.com/topics—schedule.html (PDF)
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Reporter Gwynn Guilford (@sinoceros) writes on Quartz.com reasons why China could drive a further bit-boom. Excerpts:
“They’ve already done the whole virtual currency thing—with Q Coin.”
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“Property, stocks, art, tea—speculation dominates in every major asset market you can think of in China. The Chinese are a people used to high risk-reward investments.”
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“As the online gamer source tells Quartz, ‘the currency’s system is so decentralized’ that it would be extremely difficult for the Chinese government to do anything about bitcoin.[…] And unlike with Tencent, there’s no company or entity to target for regulation. ‘To China’s conservative regulators,’ he adds, “Bitcoin is a game [that’s] way more dangerous.”
- http://bit.ly/ZgOoc6
- http://bitcointalk.org/index.php?topic=176010.0 (Further discussion of the article)
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