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Category Archives: Bitcoin

Despite Mt. Gox fiasco, Karpeles still has Bitcoin plans

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Mark Karpeles t-shirt couldnt be more ironic.

I dont always test my code, it reads, but when I do, I do it in production.

The former head of Mt. Gox, once the worlds biggest Bitcoin exchange, saw his company collapse because its code was exploited by hackers.

A source close to the firm said in March that Mt. Goxs code was a spaghetti mess, possibly containing vulnerabilities that allowed hackers to pilfer millions of dollars worth of the digital currency. Japanese police are probing that possibility.

Karpeles has kept a low profile since Mt. Gox filed for bankruptcy on Feb. 28 and disclosed that roughly 750,000 customer bitcoins and 100,000 of its own had vanished, apparently stolen by hackers. That amounted to roughly US$474 million based on the valuation of the volatile cryptocurrency at the time of the filing.

But as Mt. Gox undergoes liquidation under the supervision of the Tokyo District Court, Karpeles has recently emerged from the shadows, posting messages on Twitter and answering emails from media. He agreed to talk to IDG News Service on the condition that he would not discuss other than in general terms what happened at the company, the police investigation into it and other litigation involving him. The latest lawsuit was filed last month in Tokyo by three Mt. Gox clients who are each seeking about 10 million ($87,000) over lost bitcoins, according to his lawyer.

Karpeles is still leading Mt. Goxs parent company Tibanne, a small IT development firm located in Tokyos youth mecca of Shibuya. Its office building is no longer the site of protests by Mt. Gox clients who lost their bitcoin and the security guard hired by the landlord is long gone.

Tibanne now has 13 employees and still does Web and server hosting as well as Web and mobile application development. Tibannes graphics editing software subsidiary Shade3D, meanwhile, has about 10 staff.

Ive been trying to keep Tibanne and Shade3D running well so we can maybe assist with the Mt. Gox bankruptcy, Karpeles said.

He added that contrary to rumor, he hasnt left Japan since February and has had to stay in the country as part of the bankruptcy process. He spends his down time taking care of his aging cat Tibanne (the inspiration for the name of his company) and pursuing his passion for baking apple pies.

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Despite Mt. Gox fiasco, Karpeles still has Bitcoin plans

Understanding The Proposed Bitcoin ETF: 5 Key Questions

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One of the interesting aspects of any early stage innovation is that it is incredibly difficult to distinguish a breakthrough idea from a dud. At one point Twitter (TWTR) was considered a mere Internet curiosity, while the Segway was expected to revolutionize urban transportation. The proposed Bitcoin ETF is a classic case in point: If successful, it could make virtual currency trading more mainstream, which would be a breakthrough development. However, that success is currently not assured.

Nevertheless, the Bitcoin ETF is an important concept, so rather than speculating on its potential adoption, this article focuses on understanding the product itself. We address five fundamental questions about the proposed Bitcoin ETF:

1. What is the asset underlying the ETF?

Bitcoin is a virtual currency that can be stored and traded electronically. It is stored in a digital wallet and can be traded using a downloadable software (Bitcoin client) or through a third party provider. It is important to distinguish Bitcoin from payment systems like Paypal (EBAY) or Apple Pay (AAPL), which are ways to transfer a traditional currency (such as the US Dollar) electronically.

An important reason for the adoption for Bitcoin is that it is decentralized i.e. there is no central Bitcoin issuing or monitoring authority. Instead, every time a Bitcoin transaction is initiated, it must be validated by a Bitcoin miner. These miners are entities within the Bitcoin network that validate the transaction by solving a mathematical proof. Once the transaction is validated, the miner adds it to the record of previous Bitcoin transactions. This updated chain of completed Bitcoin transactions is called a Blockchain, which is publicly transmitted across the entire Bitcoin network. This system prevents double counting of existing Bitcoins and enables record keeping of all Bitcoin transactions.

In return for validating transactions, miners are rewarded with a transaction fee and new Bitcoins. So miners are effectively performing a dual function: they are validating transactions and facilitating the creation of new Bitcoins in a systematic manner. (A detailed explanation of Bitcoin mechanics is available on the Khan academy website)

The goal of the proposed ETF is to provide exposure to this asset and reflect Bitcoin price changes.

2. Who is launching the ETF and what is the current status?

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Understanding The Proposed Bitcoin ETF: 5 Key Questions

Bitcoin's Increasing Acceptance By Traders Brings Problems

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Early adopters of Bitcoin and true believers in the virtual currency face a dilemma, and it is one that will be familiar to many of us of a certain age and with a love of rock music. In the days before the internet brought easy ubiquity, finding a great new band was a thrill that filled people with the fervor of a convert. In 1980, for example, I went to see Talking Heads at the Hammersmith Palais in London and stumbled upon the support band at that gig, U2.

I ran around telling everybody how great they were and insisting that everybody listen. Gradually, not because of my efforts but just because they were good and their time had come, they gained in popularity. I, of course, started to resent their success. I saw them as having lost their edge and, the worst crime imaginable, as having sold out. Many Bitcoin enthusiasts are at that stage right now.

It is only natural that those that understand and embrace the concept of a virtual currency would wish to get out there and preach. They want to see Bitcoin fulfill its potential. The problem, of course, is that it is hard for anything that started out challenging the status quo to gain general acceptance without it, to some degree, being tainted by the popularity.

Unlike with a rock band, however, the potential problems that Bitcoin faces as it gains in popularity are not to do with staying edgy, in touch and relevant. They are issues that go to the very core of the currency. The financial system that Bitcoin originally challenged is increasingly embracing the once ostracized digital currency. At the very least, as Steven Lord puts it in an article at Futuresmag.com, the days of Wall Street dismissing Bitcoin out of hand are rapidly becoming history.

This is inevitable given the kind of volatility that gets traders excited and the increasing availability of derivatives such as futures and swaps, but is it desirable? What these products do is to give traders a way to trade BTC without actually owning the currency and for many that is the problem. It means that traders can easily short BTC and dont have to lend any price support by funding an account before starting to trade.

Most Bitcoin supporters have sufficient faith in free markets to accept this, and to understand that if BTC is to really survive it must take such things in its stride. If fiat currencies with their built in tendency to devalue over time can be freely traded, then BTC, with an inbuilt tendency to appreciate, should benefit from the same conditions.

That is true in the long term, but increased trading activity, particularly from institutions, does represent a problem in the short term. Instead of the value of BTC being about its worth as a finite commodity, and one with a decreasing rate of supply and increasing adoption, it becomes a function of sentiment. I can assure you as somebody who made a living in dealing rooms around the world for nearly twenty years, that trader sentiment is a fickle beast.

What those invested, emotionally, financially or both, in the Bitcoin market must understand is that as acceptance of the currency grows the volatility that we have seen this year is likely to continue, but it has no bearing on the ultimate value of the currency. I dont think well see the kind of massive run up and collapse that we saw at the end of last year, but there will be volatility within a trading band.

Currently that band looks to be around $300-$700, but that could change as it is still forming. If anything the trading band could move a little lower as new institutional traders come in. A 1 year chart such as that below would suggest downside potential, so testing the lows may be a tempting trade for newcomers with no exposure to the currency.

That doesnt mean, however, that those who have embraced Bitcoin should worry. They may wish to trade the moves to some extent, but if the world is ready for a currency based on a deflationary model, then the ultimate market pressures of decreasing supply and increasing demand will work their magic whatever traders do.

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Bitcoin's Increasing Acceptance By Traders Brings Problems

The Risks Of Buying Bitcoin

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A new product, technology, or innovation such as Bitcoin has the potential to give rise both to frauds and high-risk investment opportunities. U.S. Securities and Exchange Commission

Bitcoin, the first cryptocurrency on the virtual block, has garnered much attention since it was first created in the year 2009. It is an internet currency involving a person to person payment and operates without a third party (bank or central authority) and do not enjoy government backing. Despite not being legal tender, Bitcoin charts high on popularity and its has triggered the launch of many virtual currencies collectively referred to as Altcoins. Thus Bitcoin has played the role of a trend setter for the likes ofLitecoin, Feathercoin, Dogecoin, Zetacoin, Peercoin, MazaCoin, Novacoin, etc.

Those who endorse this digital currency are of the view that it facilitates a much faster, no-fee payment system for transactions across the globe. The virtual currency can be exchanged for traditional currencies and its exchange rate against the dollar attracts potential investors. While this new investment space promises high returns, it still has many risks tagged to it, which should be considered before purchasing Bitcoins. Many investor alerts have been issued by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Consumer Financial Protection Bureau (CFPB), and other agencies to make inventors aware of the potential risks involved in Bitcoin investment. The major risks associated with Bitcoins are listed below:

The concept of a virtual currency introduced by Bitcoin is novel and cutting edge but because of being a recent invention, there is no track record or history of credibility to back it. Bitcoins along with otherdigital currencies are in a development phase, still evolving. That said, with their increasing use, Bitcoins are becoming less experimental. Still, they carry high risk and are not meant for risk averse investors. (See: Basics For Buying And Investing In Bitcoin)

There is high speed in the technology space and there is huge competition for Bitcoin already, with more than 100 such currencies. Though Bitcoin has a huge lead (because of its brand recognition andventure capital money),technological break-through in the form of a better digital currency is a big threat to this cryptocurrency.

Theunpredictable price movement of Bitcoin over a short period of time adds to its riskiness. The factors that cause volatility are high volume buying and selling on exchanges instigated by hidden motives, news regarding its acceptance with merchants, government regulations and laws. The digital currency has high sensitivity to news as it tends to guide the peoples reaction and outlook towards it. According to the Consumer Financial Protection Bureau (CFPB), the price of Bitcoins fell by 61% in a single day in 2013, while the one-day price drop in 2014 has been as big as 80%. (Related reading: Why Is Bitcoin's Value So Volatile?)

Different approaches are being applied by various countries indealing with Bitcoin. The lack of properly laid out, uniform regulations about Bitcoins (and other virtual currency) increases the uncertainty regarding their future. Many government authorities are concerned about the use of Bitcoins for speculative trading,money laundering, andcrime (like buying and selling of drugs and other illegal items).

However, with the growing popularity of Bitcoins, government agencies are coming up with proposals regarding Bitcoin and other virtual currencies. The New York State Department of Financial Services proposed regulations that would require companies dealing with the buy, sell, transfer or storage of Bitcoins to record the identity of customers. The Bitcoin transactions will have to be recorded and reported in case of transactions are worth $10,000 or more. In March 2014, the Internal Revenue Service (IRS) decided that Bitcoins will be treated as property for tax purposes.

Tax laws and regulations regarding Bitcoins are still involving and will witness many metamorphoses before the final version is decided. The riskiness in holding Bitcoins is because of the uncertainty of the course that the authorities may take to deal with it, which raises questions over its longevity and usability. (See: Bitcoin IRS Tax Guide For Individual Filers)

Bitcoin does not offer consumer protection, as they are not insured by theFederal Deposit Insurance Corporation (FDIC). When any transaction is carried out with Bitcoins, it can only be reversed if the person who has received them refunds them. There is no involvement of a third party or a payment processor as in the case of a debit or credit card. Bitcoins are in a way similar to cash transactions involving two parities - giver and taker. Thus it is a good idea to use Bitcoinswith organizations or people who are known and trusted.

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The Risks Of Buying Bitcoin

#HackerKast Drupal Compromise, Verizon’s ‘Perma-Cookie,’ Tor + Bitcoin Decloaking and Formula One – Video

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#HackerKast Drupal Compromise, Verizon #39;s #39;Perma-Cookie, #39; Tor + Bitcoin Decloaking and Formula One
This week Jeremiah Grossman, Robert Hansen and Matt Johansen discuss the latest around the recent compromise to Drupal which affects any Drupal 7 site that w...

By: WhiteHat Security

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#HackerKast Drupal Compromise, Verizon's 'Perma-Cookie,' Tor + Bitcoin Decloaking and Formula One - Video

Bitcoin prices rally 5% to hit 2-week high on technical buying

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Investing.com -

Investing.com - Bitcoin prices rallied sharply on Monday to hit the highest level in more than two weeks as a wave of technical buying kicked in after prices broke above a key resistance level.

Bitcoin (BTC/USD) touched a session high of $376.04 on Slovenia-based BitStamp earlier in the day, the most since October 23.

Prices last traded at $374.35 during U.S. morning hours, up $16.35, or 4.57%.

The price of a bitcoin on Bulgaria-based BTC-e added $14.39, or 4.04%, to trade at $370.51, while prices on Singapore-based itBit advanced $6.26, or 1.74%, to trade at $366.24.

According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency tacked on 2.45% to trade at $372.19.

Bitcoin's gains accelerated after prices broke above key resistance close to the $370-level, triggering fresh buy orders amid bullish chart signals.

Over the past couple of weeks, the price of Bitcoin has remained relatively stable, with prices consolidating in a narrow range between the $320-and $360-level.

Meanwhile, euro-denominated Bitcoin prices (BTC/EUR) rallied 6.39, or 2.22%, to trade at 294.89 on U.S.-based Kraken Exchange.

Elsewhere, yuan-denominated Bitcoin prices on Shanghai-based BTC China edged up 37.20 yuan, or 1.68%, to trade at 2,245.54 yuan, while prices on Beijing-based OKCoin increased 69.79 yuan, or 3.2%, to trade at 2,249.79 yuan.

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Bitcoin prices rally 5% to hit 2-week high on technical buying


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