Earlier this month it seems that Bitcoin missed its chance of hitting the ATH whenPBOC cracked down on Chinese exchanges and forced them to suspend withdrawals in order to implement better AML / KYC policies. However, Bitcoins price has been steadily climbing ever since the Feb 9th announcement. Today, Bitcoins price has hit an all time high on one of its biggest exchanges, the price reached $1098 on btc-e, breaking its previous peak of $1095.

As mentioned in last weeks Bitcoin price article,Chinas regulation reduced its impact on Bitcoin markets and let the western exchangestake some more control. Usually, it was the Western exchanges who had premiums on Bitcoins price, however after PBOCs actions, there is now a $40-50 premium to buy Bitcoins in China. Following these changes, other exchanges are seeing much more trade volume which is one prime reason why Bitcoins price reached an ATH on one of its oldestexchanges.

Founded in 2011, BTC-E is currently the oldest operating Bitcoin exchange. You may wonder why the price per Bitcoin on the exchange seems significantly lower than its competitors. Reason being is BTC-E isnt regulated, one can make an account using simply an email address, you do not need to provide any personal information in order to start trading. Furthermore, moving cash in and out of the exchange is difficult and takes a long time, as a result users mostly trade Bitcoins and use the exchange to hedge against the price. This creates somewhat of a large sell pressure which brings the price down.

Regardless of how low the price is compared to other exchanges, remember that even if you sell Bitcoins for cheaper, you can still use the same exchange to buy Bitcoins for cheap as well. One might argue that there are arbitration opportunities by using the exchange, however there are many complaints regarding moving cash in and out of the exchange and that it takes a long time and requires going through cumbersome process.

slvbtcfrom r/Bitcoin has complied a useful list pointing out each exchanges all time high.

MtGox = $1216

Bitstamp = $1163

BTC -e = $1095

Bitfinex = $1175

Huobi = 8000

BTC China = 7588

OKCoin = 7995

The 3 Chinese exchanges broke their 2014 ATH six weeks ago. BTC-e broke its 2014 ATH today. Just bitstamp and bitfinex left to topple. Which one will be last. Like watching dominos fall, once the last 2014 ATH is broken then its off to the races ladies and gentlemen. -slvbtc

Exciting times are ahead for Bitcoin, especially because the Bitcoin ETF decision is coming next month.If the outcome is positive, we may see a whole new spectrum of investors join the revolution. How far do you think Bitcoins price will climb? Do you think the Bitcoin ETF decision will be positive? Let us know in the comment section below.

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Bitcoin Price Breaks All Time High - The Merkle

Bitcoin has been around for a few years now, enough time for the cryptocurrency to give us a few unforgettable stories. These are indeed shocking, as some of those involved in these eventsfound themselves in a financial roller coasterthey never thought they would be in. Here are some of the most amazing bitcoin stories.

A 28-year-old Brooklyn man used Craigslist to sell bitcoins to someone near him. He used the website to avoid the hassles of online bitcoin exchanges but things didnt go as planned. The stranger he was selling bitcoin to led him to a Honda in which they were supposed to finalize the deal. Inside the car, aman hiding in the backseat pulled a gun on him, and forced the 28-year-old to transfer the bitcoins, at the time worth $1,100, to the robbers. Then, the thieves grabbed the mans cell phone and fled.

Mt. Gox was the worlds largest bitcoin exchange when the biggest bitcoin heistin history took place. Allegedly, a hacker stole roughly 800,000 bitcoins from the exchange, the equivalent of $400,000 at the time, enough to bring the exchange to its knees, forcing it to declare bankruptcy. Today, the same 800,000 bitcoins would be worth over $880 million.

Mt. Goxs CEO, Mark Karpeles, had a reaction to the high-profile heist that seemed, to some, incredibly calm and vague:

We had weaknesses in our system, and our bitcoins vanished. Weve caused trouble and inconvenience to many people, and I feel deeply sorry for what has happened.

The investigation led by law enforcement panned out due to the lack of evidence, but Mark Karpeles, was charged with embezzlement.

According to what Bitpay CCO Sonny Singhtold Bloomberg Markets, bitcoins volatility once helped a man make $1.3 million as he was merely attempting to buy a house. The man was to pay $4 million for the estate and expressed interest in paying with bitcoin. Once the transaction started, one bitcoin was worth $750, but thanks to the cryptocurrencys volatility, it was worth over $1,000 by the end of the transaction. That essentially meant the buyer got a little gift, simply because he decided to pay with bitcoin.

Back when bitcoins were easier mine, a man named James Howells mined 7,500 bitcoins and then stored them in a hard drive. In 2009, when he mined them, they werent worth a lot, so James didnt use them. A few years later, while cleaning up his desk, he came across the hard drive and, without remembering the bitcoins in them, he threw it away , sending it to a landfill. Later on he attempted to retrieve it, but was unable to.

When thrown out, the bitcoins contained in the hard drive were worth over $600,000. Nowadays, James bitcoins would be worth over $8 million.

Erik Finman was introduced to bitcoin in 2012 by his older brother, who sent him 0.2 bitcoins just for him to get a feel of the cryptocurrency. Later on, his grandmother gave him a $1,000 gift for Easter. Then 15-year-old Erik decided to buy bitcoins with the money and, a year and a half later, hesold those bitcoins for $100,000 an incredible return on investment (ROI). The young entrepreneur decided to use his money to launch Botangle.com, an online tutoring service.

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Top 5 Shocking Bitcoin Stories - The Merkle

The price of a single bitcoin leapt to its highest level in more than three years on Tuesday, as traders bought up coins in anticipation of the Securities and Exchange Commissions ruling on a proposed bitcoin exchange-traded fund.

One bitcoin US:BTCUSD went for as much as $1,105.48 on Tuesday, its highest level since December 2013, according to data from Coin Market Cap.

Both Amith B. Nirgunarthy, director of marketing & HNW Partnerships at Bitcoin IRA, and Chris Dannen, a founding partner at Iterative Instinct, a small New York-based private-equity fund that trades crypto-assets, said investors are attempting to so-called front-run the SECs decision on the Winklevoss Bitcoin Trust ETF. Front-running refers to buying an asset with the expectation of a larger buyer, or group of buyers, expected to come to push prices higher.

In this case, the SEC is expected to deliver its final decision on the trust by March 11. Tyler and Cameron Winklevoss, who were famously portrayed by actor Armie Hammer in the hit movie The Social Network, first filed for creation of the ETF back in 2013. If approved, it will trade on the BATS exchange and could support prices of bitcoin.

This is probably front-running for a potential Winklevoss ETF, Nirgunarthy said.

To be sure, even if the Winklevoss ETF isnt approved, a Japanese law that introduces a regulatory framework for bitcoin is set to take effect in April, potentially leading to an influx of institutional money from that country, Dannen said.

There will be a lot of fresh fish out there next month, either way the [SEC] decision goes, Dannen said.

Read: And 2016s best-performing commodity isbitcoin?

Read: Path to Bitcoin ETF still uncertain but may be easier under Trump

Read: Bitcoin hits milestone of $1,000 as 2017 begins

Competition to launch what would be the first exchange-traded bitcoin fund has intensified in recent months. Back in January, Grayscale, the creator of the Grayscale Bitcoin Trust GBTC, +2.78% filed to list shares of the trust on the New York Stock Exchange. It presently trades over the counter, with a large premium over its relative net-asset value in bitcoin. In January, the SEC delayed its decision on a third fund, the SolidX Bitcoin Trust, which would also trade on the NYSE.

Resurgent trading volume in China, which was, until recently, bitcoins largest market, has also helped to support the price, Nirgunarthy said.

Since the beginning of the year, Chinas largest bitcoin exchanges have imposed new transaction fees and halted customer withdrawals while they upgrade their antimoney laundering systems. These decisions, undertaken in response to stepped-up scrutiny from the Peoples Bank of China, initially caused trading volume in the country to plummet.

The bitcoin price more than doubled in 2016 as Chinese investors sought ways to protect their wealth from a depreciating yuan. Crackdowns on cash in India and Venezuela also helped support the digital currencys ascent, Dannen said.

Spencer Bogart, a bitcoin analyst at Needham & Co., doubts the SEC will approve a bitcoin ETF. However, if it does, it could lead to as much as $300 million in institutional money entering the bitcoin market during the first week alone.

This would likely have an outsize impact on the price of a single coin, he said.

Excerpt from:

Bitcoin prices touch fresh 3-year high - MarketWatch

Forbes

If You Traded Bitcoin, You Should Report Capital Gains To The IRS Forbes Whether it's legal or not under CFTC regulations, the IRS requires American resident taxpayers to report Bitcoin trading income and losses worldwide on U.S. ... BitCoin For Weed Could Revolutionize The Entire Industry - Green ...Green Rush Daily Bitcoin Plus – The new up and comer of ... - Digital JournalDigital Journal all 4 news articles »

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If You Traded Bitcoin, You Should Report Capital Gains To The IRS - Forbes

As mused in the most recent column, it seems that the 2/20/17 timeframe was, in fact, an acceleration. A couple hours ago Bitcoin jumped close to $40 per coin. It hit resistance at 1093, which of course made me wonder if $1100 might be a swing high. However, I note that the weekly bar, now only a single day old, has punctured the 3rd arc pair of a bull setup from the Aug 2015 low. Of course, there are still 6 days to go before the candle closes, so this does not qualify as a buy signal on the weekly chart. But still, it is rather bullish

The daily chart has closed above the 4th arc pair on a bull setup from the same Aug low. This is a buy signal on the daily chart. Stops might be placed just below the arc, which should hold, if the breakout is to continue.

The 4-hour chart shows that price closed just above the 0 line of a long-term pitchfork. It is testing that line for support as these words are being typed. My guess is that support will hold, given the bullish pictures on the longer-term charts seen above. All in all, it seems that resistance has been broken on most, if not all, timeframes. Again.

For a purely theoretical conjecture, I want to relate a recent experience. A man I dont know well, but respect, recently forecasted a $2300 bitcoin high later this year, in the October timeframe. This is quite a bit higher than any of my setups forecast. Not even my weekly setup gets that high. So, while my initial reaction was to dismiss the forecast, my respect for his thoughts led me to look at my charts and see if there are any larger setups that would support that price ~ October 2017. To my pleasant surprise, there was one two that I found, actually. Indeed, when looking closely at one of these setups, pricetime has been respecting the setup so far. So, while I am not saying he is correct, I am saying: it is possible 🙂

We will see

Happy trading!

Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.

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Bitcoin Channels its Inner Energizer Bunny in Rampant Run - CryptoCoinsNews

Bitcoin price is making northbound momentum once more as investor confidence improved on recent industry developments.

Bitcoin Price Key Highlights

Bitcoin price is making northbound momentum once more as investor confidence improved on recent industry developments.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on the 1-hour chart, signaling that the path of least resistance is to the upside. In other words, the uptrend is more likely to continue than to reverse. The gap between the moving averages is getting wider, reflecting stronger bullish pressure that might be enough to take bitcoin price to the ceiling at $1080 and beyond.

The 100 SMA lines up with the channel support at $1035, adding to its strength as a floor in the event of another correction. A larger pullback, on the other hand, can last until the 200 SMA dynamic inflection point at $1010, which could be the line in the sand for this ongoing rally.

Stochastic is indicating overbought conditions and is turning lower, suggesting that bearish pressure could return. RSI is also turning lower to indicate that buyers might need to take a break from here.

Market Events

Now that news on Chinese regulations on bitcoin exchanges appears to have taken the back seat, traders are turning their attention to the anticipated SEC approval of the Winklevoss bitcoin ETF COIN. If this pushes through, it could mean a strong boost to demand for the cryptocurrency and therefore a big push higher for bitcoin price.

On the other hand, another batch of setbacks could cast doubts on the viability of bitcoin as a traded instrument and mainstream payment vehicle, potentially dampening recent gains. US markets are poised for strong gains as big retailers print their earnings reports and Trumps tax plan announcement could also have a huge impact on dollar action and market sentiment.

Charts from SimpleFX

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Bitcoin Price Technical Analysis for 02/21/2017 Buyers Gaining Confidence - newsBTC

A recent article by Yves Lamoureux states that Bitcoin price is going to hit $25,000 in the future. Read more...

Bitcoin is known for its volatile nature, which allows people to come up with their own predictions based on their observations, analysis or even guesswork at times. There are many occasions where Bitcoin has been declared dead (121 times according to Bitcoin Obituaries), but each time cryptocurrency has proven them all wrong.

Yves Lamoureux, the president of a market research firm Lamoureux & Co., has recently published an article where he has predicted the digital currencys price to hit $25,000. The prediction sounds sweet yet unbelievable. However, Yves goes on to explain his reasoning behind the forecast.

According to Yves, the prediction is not some guesswork but has a firm mathematical basis. For starters, the finite supply of Bitcoin, capped at 21 million tokens prevents the value of Bitcoin from diluting. He reiterates the familiar comparison between gold and bitcoin.

Gold is one of the most trusted assets out there. People love to invest their money in gold to prevent its value from getting diluted with time. This way, they can conserve the purchasing power of their money even in the future. The same can be applied to Bitcoin as well, and the growing demand for blockchain technology across industries is going to provide further credence to the digital currency.

The article states that like housing, tech stocks, etc., there is a need for increased public participation for any new asset to gain significant traction. The present-day numbers of Bitcoin traders indicate that the digital currency is going the right way at the moment.

In the article Yves states,

People trade today as they did last year, as they did 100 years ago. The psychology remains the same. Behavior does not change. Provide the same set of incentives throughout time, and the Pavlovian bell rings the same.

Even though Bitcoins price is predicted to hit $25,000, it is not going to happen right away. Before the cryptocurrencys price reaches that point, the digital currency will have to overcome the current skepticism and the inevitable pressure from the government and regulators.

While the prediction of Bitcoin price reaching $25,000 sounds plausible, it has its own challenges, including the scalability issue currently being faced by the network. If all goes well, the Bitcoin community is going to have a great time looking at their investment grow multiple folds.

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Yves Lamoureux Predicts Bitcoin will Hit $25000 - newsBTC

Here's a look at what we are focusing on in the bitcoin price this morning.

Well here we go, a fresh European session and, with it, a fresh week in the bitcoin price. Our intraday strategy was a little bit up and down last week, as price chopped in and out of periods of volatility. The week started off pretty flat, but then things picked up as the days went by, and we managed to close out on a pretty decent note.

With any luck, as things play out going forward, we will see a continuation of the volatility, and get some proper trades and profits under our belt. So, with this in mind, lets outline some key levels and see where we can take the session.

As ever, take a quick look at the charts below in order to get an idea of whats on, and where we are looking to get in and out of markets if and when price moves. Its a five-minute candlestick chart, and its got our range overlaid in green.

So, as the chart shows, the range we are using for todays morning session out of Europe is defined by support to the downside at 1040 flat, and resistance to the upside at 1051. Were not using 1050 flat as price broke above t a little earlier, and so we think 1051 is a little more solid right now. Whether that proves a smart move, well see.

Anyway, if we see price break above resistance, we are going to look at getting in to the upside in a long position towards an immediate target of 1060. A stop on the trade at 1048 will ensure that we are taken out of the trade in the event of a bias reversal.

Conversely, if price closes below support, we are going to get in short towards 1030. A stop on this one at 1043 looks good.

Charts courtesy of SimpleFX.

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Bitcoin Price Watch; Here's To A Profitable Week - newsBTC

With the bitcoin scalability situation remaining a pressing issue, it is up to the developers to come up with an answer. Segregated Witness is touted as one of the possible solutions, albeit it requires a majority of the networks miners to support it before getting activated. Below is a brief overview of some of the worlds top bitcoin mining pools signalling for SegWit activation right now.

While most people may know Bitcoin India as a cryptocurrency exchange, the company is also running an official mining pool. Albeit this mining pool is very small compared to some of the others on the network, it is good to see Indias exchanges weigh on on the scalability debate. Moreover, to reach the necessary support before SegWit can activate on the network, every little bit helps.

CKPool is another bitcoin mining pool that has been around for quite some time. There are two different pools operated by the team, one of which is used for solo mining. Both entities support SegWit signalling as we speak. The normal mining pools controls 1.2% of the network, whereas the solo pool represents 0.3%. Once again, small percentages will add up in the long run.

The BitClub mining pool is well-known among cryptocurrency enthusiasts. It controls 2.3% of the total network hashrate, yet that is not enough to be considered as one of the top 10 bitcoin mining pools. However, that 2.3% can help push SegWit activation over the required majority threshold in the end. BitClub has always been loyal to Bitcoin Core and that situation will not change anytime soon, by the look of things.

One of the oldest bitcoin mining pools in the world goes by the name SlushPool. Albeit it only represents 65% of the total bitcoin network hashrate, Slushpool is an invaluable asset for SegWit supporters. Slush was also one of the very first mining pools to acknowledge the world start signaling SegWit and the code was implemented promptly. Many people see this pools support as vital to the potential activation of SegWit.

While BTCC was one of Chinas largest cryptocurrency exchanges for some time, their mining pool has been growing steadily at the same time. Right now, BTCC represents 7% of the network hashrate albeit that number used to be a bit higher in the past. Then again, more decentralization in the mining world is never a bad thing, that much is certain. It is doubtful BTCC would ever switch allegiances and support Bitcoin Unlimited all of a sudden.

It is anything but surprising to learn BitFury supports Segregated Witness signalling. With its 10.3% of the hashpower, that is a major addition to the growing support for SegWit. Then again, BitFury is only the worlds third-largest mining pool, which means there is still a lot of convincing to do before the SegWit threshold can be reached. Antpool, the worlds largest bitcoin mining pool, said they would not run SegWit without an immediate block size increase. That statement dates back to May of 2016, albeit it seems not much has changed since then.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

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Top 6 Bitcoin Mining Pools Signalling SegWit The Merkle - The Merkle

Ransomware is one of the oldest cyberthreats, but ithas made a big comeback in the past couple of years because it has become much easier to perpetrate against consumers, businesses, hospitals, and government agencies.

With ransomware, cyber thieves steal a users data and threaten to destroy it unless the user pays them a ransom. One studyby Infobloxfound that ransomware increased 3,500 percent from the fourth quarter of 2015 to the first quarter of 2016. Ransoms paid also went up 10 times during that period.

Chris Young, CEO of Intel Security, said last week at a private dinner and in his keynote speech at the RSA security conference that ransomware was first detected in 1989, but it didnt explode until recently. In the past, it was easier for law enforcement to catch the perpetrator as they tried to pick up the ransom.

It wasnt until the advent of Bitcoin in our society that ransomware was able to take off, Young said. Because now, as an attacker, I can anonymously monetize my target.

Above: Chris Young, CEO of Intel Security, at RSA.

Image Credit: RSA

He added, The weaponization of data becomes a real threat to all of us. Id argue its quite likely to be our next advanced, persistent threat.

Bitcoin, the crypto currency introduced in 2008, enables two parties to exchange money without knowing who the other one is. During the past year, security firm Kaspersky identified ransomware as the biggest cybersecurity threat.

At first, cyber criminals used ransomware schemes against unsuspecting consumers. The criminals stole their passwords, locked down their computers with cryptography, and then demanded ransoms in the hundreds of dollars to unlock the computers. Faced with no choice, the victims paid the ransoms in Bitcoin. And that helped the problem grow and become much more lucrative, saidSteve Grobman, chief technology officer at Intel Security, at the dinner.

The ransomware threat has been growing.A ransomware app even made it into the Google Play store in January.

Young said that the growing number of attack types has also come with new attack surfaces, as the number of devices that we use in our daily lives is growing well beyond computers and smartphones. The Internet of Things devices, such as security cameras or TV webcams, are also vulnerable to viruses and other attacks. And they can be used as stepping stones to larger, more threatening attacks.

Andransomware is moving on to bigger targets. The focus is increasingly on places like hospitals, which have restrictions on what they can do with patient data. The bad guys find out where the computer backups are stored, they penetrate them and encrypt them, and then they hold the data for ransom.

Cyber attackers held an Austrian hotel network for ransom. The criminals demanded $1,800 in Bitcoin to unlock the network while preventing guests from checking in and out of the hotel and locking them out of their guest rooms. The hotel paid up.

A crypto ransomware attack also hit San Franciscos Municipal Transportation Agency as an infection spread across the Muni systems networks, taking down ticketing systems. The criminals asked for $73,000 in exchange for restoration of the Muni data.

Above: Ed Skoudis, instructor at the SANS Institute.

Image Credit: RSA

Ed Skoudis, instructor at the SANS Institute, predicts that the crypto ransomware perpetrators will go after small to mid-sized banks next.

One of the biggest problems in the last couple of years has been the explosion of crypto ransomware, Skoudis said in an RSA talk. Crytpo ransomware is so much more powerful, especially when it uses public key cryptography.

Crytography is useful in enabling secure communications and ecommerce, but there are 150 active families of crypto ransomware today, Skoudis said. Companies say this is one of their biggest fears, he said, and many more increasingly sophisticated attacks against networks are expected.

Young, meanwhile, worries about the attack targets in homes, thanks to the Internet of Things.

The target is now the weapon, Young said. Now we have to turn our attention to data being weaponized against us. What we used to think about protecting we now have to be protectedagainst. Its the strangest irony. The target is now the weapon. Weve given the enemy all of the scale they could possibly want by connecting our homes with smarter, better, faster devices.

Above: No More Ransom helps ransomware victims.

Image Credit: nomoreransom.org

And yes, Im still waiting for some good news on this front.

To prevent ransomware attacks, companies and individuals have to make themselves into harder targets. If one workstation gets attacked, it shouldnt make the whole network and its servers vulnerable.

If your organization gets hit with ransomware, who is going to decide whether to pay the bad guys? he said. Your business principles might get hit by the business reality.

Young said that the fragmented cybersecurity industry must work together.

Were the most fragmented sector in all of IT, he said.

The industry has formed the collaborative Cyber Threat Alliance group, and it has created No More Ransom, a site that helps victims of ransomware recover their data.

See the rest here:

Ransomware has exploded thanks to Bitcoin's anonymity - VentureBeat

Anyone with an interest in bitcoin will have heard the phrase 'cryptographic hash function' at some time or other. But what exactly does it mean, and how is it connected to cryptocurrency?

Hash functions are an essential part of, not only of the bitcoin protocol, but of information security as a whole.

In the following article we'll take a look at some simple examples of how they work, with a simple demonstration, too.

In the abstract, a hash function is a mathematical processthat takes input data of any size, performs an operation on it, and returns output data of a fixed size.

In a more concrete example, this can be used to take a sequence of letters of any length as input what we call a string and return a sequence of letters of a fixed length. Whether the input string is a single letter, a word, a sentence, or an entire novel, the output called the digest will always be the same length.

Acommon use of this kind of hash function is to store passwords.

When you create a user account with any web service which requires a password, the password isrun through a hash function, and the hash digest of the message is stored. When you type in your password to log in, the same hash function is run on the word you've entered, and the server checks whether the result matches the stored digest.

This means that if a hacker is able to access the database containing the stored hashes, they will not be able to immediately compromise all user accounts because there is no easy way to find the password which producedany given hash.

You can experiment with hash values using Python, a programming language installed on Mac and Linux operating systems by default. (This tutorial will assume you're using some version of either OS X or Linux, as using Python on Windows is more complicated.)

First, open a terminal, type python and hit ENTER.

This will put you into the Python REPL, an environment where you can try out Python commands directly as opposed to writing a programme in a separate file.

Then, type the following, pressing ENTER after each line, and TAB where marked:

You have now created a function, hash(), which will calculate and print out the hash value for a given string using the MD5 hashing algorithm. To run it, put a string in between the parentheses in quotation marks, eg:

And press ENTER to see the hash digest of that string.

You will see that calling the hash function on the same string will always generate the same hash, but adding or changing one character will generate a completely different hash value:

In the bitcoin protocol, hash functions are part of the block hashing algorithm which is used to write new transactions into the blockchain through the mining process.

In bitcoin mining, the inputs for the function are all of the most recent, not-yet-confirmed transactions (along with some additional inputs relating to the timestamp and a reference to the previous block).

In the code example above, we've already seen that changing a small part of the input for a hash function results in a completely different output. This property is crucial to the 'proof of work' algorithm involved in mining: to successfully 'solve' a block, miners try to combine all of the inputs with their own arbitrary piece of input data in such a way that the resulting hash starts with a certain number of zeroes.

As a basic demonstration, we could try 'mining' with our Python hash function by manually adding exclamation points after "CoinDesk rocks!" until we find a hash that starts with a single zero.

Of course, solving the hash for a bitcoin block which at the time of writing must start with 18 zeros requires anextremely large amount of computation (and so the combined processing power of all the computers in the network still takes approximately 10 minutes to solve a block).

It's the need for this large amount of processing power that means new bitcoins get mined over a long period of time, not all at once.

In order to earn bitcoins through mining, you need to put in the huge amount of work necessary to solve a block and by earning that reward, you're locking in all of the new transactions into a block, which is added to the permanent record of all previous transactions: the blockchain.

Any crypto basics you'd like explained next? Email: editors@coindesk.com.

Bitcoin on keyboard image via Shutterstock

Bitcoin ProtocolCryptographyhash functions

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Bitcoin Hash Functions Explained - CoinDesk

Even though the concept of bitcoin continues to baffle quite a few people, cryptocurrency is becoming a more common payment method month over month. With a growing number of merchants accepting bitcoin, the products and services one can buy with cryptocurrency become more varied. Below are some fine examples of how one can spend bitcoin and gain something valuable in return.

All over the world, the trend of ordering food online has become more prevalent over the years. It makes a lot of sense to buy food online and have it delivered to your doorstep. Various of these platforms around the world accept bitcoin as a payment method. Takeaway.com is one of the largest platforms to accept bitcoin and they have seen their fair share of success in the process.

The video game sector has taken kindly to bitcoin these past few years. Prominent platforms, such as Kinguin, G2A and Steam have all integrated a bitcoin payment option into their platform. For the younger generation who is enthusiastic of bitcoin, this seems like a match made in heaven. Considering how most of these platforms also sell game time and other in-game prepaid cards, using bitcoin as a gamer has never been easier.

Buying gift cards with bitcoin has become a breeze, albeit most of these efforts are focused on the United States and Canada. A wide range of platforms accepts bitcoin in exchange for either digital or physical gift cards. Gyft, eGifter and Cryptodechange are just a few examples of places where one can buy a gift card with bitcoin. All of these platforms support a wide variety of online services and retailers, giving bitcoin users access to whatever their heart desires.

In this day and age of growing surveillance, ensuring ones internet activity is hidden from prying eyes becomes more important than ever. VPN services are a great way to surf the internet anonymously and at an affordable price. Interestingly enough, the vast majority of VPN service providers accepts bitcoin payments, due to its global appeal.

There is a secondary purpose to using bitcoin as a payment option for VPN services. Unlike traditional payment solutions, bitcoin allows users to maintain their privacy during the signup and payment process. For those people who take privacy seriously, paying for a VPN with bitcoin is the ultimate combination.

More expensive items and services can also be paid with bitcoin these days. Booking a hotel through Expedia, for example, can be paid in bitcoin. Flights can be booked through that site as well, but there is also CheapAir to take into consideration. It is expected more travel operators will start to accept bitcoin payments over the coming years.

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Top 5 Things You Can Buy With Bitcoin - The Merkle

Remitano, a Vietnam-based P2P platform for trading bitcoin, has expanded its services across the English-speaking world.

The company is targeting bitcoin exchangers, investors and users of remittance services, beginning with Asian countries, including Vietnam, Malaysia, Cambodia and China.

Leading sources of traffic on Remitano besides Vietnam are Nigeria and Malaysia.

Our new platform will help bring bitcoin to everyone, by means of preventing fraud and scamming among the bitcoin community, said CEO and co-founder Dung Huynh. Bitcoin fraud is a problem that is deterring people from partaking in this exciting market, hampering its overall potential. At Remitano, we want to fix that.

Fake exchanges, fraudulent bitcoin wallets which allow malware into a computer, phishing and Ponzi schemes are all things that would-be bitcoin traders need to look out for on a daily basis, according to Remitano.

Remitano features a simple user interface and responsive customer support. Customers in need of support can jump on a live chat and get questions answered quickly.

When a user opens a trade, Remitano holds the amount of bitcoins they wish to buy in escrow. The buyer can send payment to the seller without having to worry about not receiving bitcoin.

The bitcoin remains locked until the seller confirms the payment.

Also read: Bitcoin survey: 1 in 4 bitcoin users defrauded by exchanges

The Remitano support team will resolve disputes based on evidence provided by both sides.

The 0.5% fee charged by the platform is lower than the other major platforms in the market.

Remitano is owned by Babylon Solutions Limited, which is incorporated in Seychelles.

The team is comprised mostly by banking professionals with experience in financial products, electronic currencies and payment services.

The app is available on the App Store and Google Pay.

Image from Shutterstock.

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Vietnamese Bitcoin P2P Platform Remitano Targets Global Expansion - CryptoCoinsNews

Quite a few countries are contemplating how they should treat bitcoin moving forward. Cryptocurrency poses intriguing opportunities, yet it is difficult to regulate as there is no centralized entity controlling the ecosystem. Nigerian banks are contemplating to legalize bitcoin, which would give the popular cryptocurrency a significant boost, to say the least.

It is not the first time someone brings up the concept of Nigerian banks legalizing bitcoin. The same idea was proposedseveral months ago. Albert no one saw this as a hint of what the future could hold, it would appear various Nigerian banks are thinking along the same lines. This development caught quite a few people by surprise, even though it makes a lot of sense.

An article appeared in The Inquirer, which talks about how the Nigerian Bankers Committee is studying blockchain technology. That is anything but surprising, as nearly every bank around the world is well aware of what distributed ledgers bring to the table. However, there has not been any major product to come forth from this interest so far. Experts predict a few of these blockchain applications will see the light of day in 2017, albeit that remains to be seen for now.

What is more interesting, however, is how the Nigerian Bank Committee still feels bitcoin poses somewhat of a threat the national financial ecosystem. To be more precise, the group touched upon the concept of dubious virtual currencies flooding the country. It is not hard to see which projects they are talking about, as OneCoinhas become somewhat of a popular concept in Nigeria. Additionally, there is also the MMM Global scheme, which only accepts bitcoin deposits in Nigeria right now.

It is evident the Central bank of Nigeria wants to gain a better understanding of bitcoin and its blockchain technology. That open-minded approach can mean big things for cryptocurrency in the country moving forward. Moreover, it only appears to be a matter of time until Nigeria introduces bitcoin regulation, which could occur as soon as this year. Introducing such a regulation would effectively legalize bitcoin in Nigeria, even though the current is not issued by the countrys central bank.

Nigeria is not the only country in the world looking to regulate and legalize bitcoin. Japan will be doing the same later this year, which will bring a lot more legitimacy to cryptocurrency moving forward. Albeit no one can effectively regulate bitcoin itself, governments can impose specific guidelines for companies dealing with customer funds, either in the national currency or bitcoin. Then again, running a financial business will always be subject to specific regulation and bitcoin enterprises should not be exempt from those rules.

Bitcoin regulation does not have to be a bad thing by any means. Chinas central bank issued a few new regulatory measures over the past few weeks, which has only helped the bitcoin price stabilizes as time progressed. It is unclear what Nigeria will do exactly when it comes to blockchain and cryptocurrency, but it will be an intriguing situation to keep an eye on.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

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Nigerian Bankers Committee Plans to Legalize Bitcoin - The Merkle

Forbes

China's Bitcoin Drama Isn't A Financial Meltdown Forbes China, currently the world's largest Bitcoin trader, has caused some complications for the cryptocurrency since the beginning of the year. The amount of Bitcoin traded in the country has plummeted from 10 million a day to 30,000-90,000 due to 'abnormal ... Bitcoin traders look to other digital currencies for returnsCNBC Bitcoin Price Above $1000 For One Whole Week, Passes $1060CoinTelegraph Bitcoin Tracker: Denouement?PYMNTS.com CryptoCoinsNews -The Merkle -Brave New Coin all 16 news articles »

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China's Bitcoin Drama Isn't A Financial Meltdown - Forbes

The concept of bitcoin remains baffling to a lot of people Albeit this cryptocurrency has only been around for eight years, there are so many things people want to know about bitcoin. The currency has had a rather colored past as well, spurring multiple waves of mainstream media attention in the process. The below article will summarize Bitcoins 8 year history in under 500 words.

Bitcoin was created by Satoshi Nakamoto in 2009. It took nearly two weeks after its initial release until the first official transaction on the network occurred between Satoshi and Hal Finney. Moreover, it took some time until the first financial transaction denominated in bitcoin took place. This day is known as Bitcoin Pizza Day, an event that is celebrated around the world every single year.

Despite its potential, bitcoin hasnt been without flaws. A major flaw was discovered in August of 2010 which effectively allowed users to create an infinite amount of bitcoins. Thankfully, any wrongdoings were erased from the blockchain and a software update was released. So far, it is the only major bug to be found and exploited in the bitcoin protocol code to date.

It took until 2011 until bitcoin got taken more seriously. WikiLeaks embraced bitcoin as a donation method after being cut off by credit card issuers and PayPal. One year later, Bitcoin made its first TV appearance in an episode of The Good Wife. Quite a few shows have featured bitcoin ever since, albeit nearly always in a criminal setting. Considering the popular darknet marketplace Silk Road was created in 2011 and gained significant popularity throughout 2012, it is not hard to see where this criminal angle comes from. The platform was eventually taken offline by the FBI in 2014.

Things started to unravel a bit in 2013, as the Mt. Gox exchange had bank accounts seized by the US authorities. Operating an unlicensed bitcoin exchange while serving US customers was one of the final nails in the coffin for Mt. Gox before declaring bankruptcy in 2014. Several hacks affected the bitcoin ecosystem in 2013 as well, albeit the payment technology itself was never breached. On the upside, M-Pesa and Bitcoin came together in Kenya under the Bitpesa banner and turned into a very successful company.

Bitcoin was ruled a form of money in August of 2013. Ever since that time, various countries have started debating how they want to label bitcoin moving forward. Japan will legalize cryptocurrency later this year. During 2014 and 2015, merchants started accepting bitcoin payments, bringing their total to 160,000 in August of 2015. That number has continued to grow and includes some of the worlds largest platforms, including Microsoft and Overstock.com.

2016 Has been the year during which the bitcoin price exploded in the final 6 months. Bitcoin was deemed one of the worlds best performing assets for the calendar year, and that bullish trend is still visible today. With the number of bitcoin ATMs around the world reaching the 1,000 mark soon, the future looks very bright for cryptocurrency. There are exciting times to live in, that much is certain.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

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History of Bitcoin in 500 words - The Merkle

I'm strongly considering entering into a substantial investment in bitcoin as part of my passively managed, fully long portfolio. Before I do that, I decided to look into two questions regarding bitcoin's role in a portfolio:

My reasoning was that, if possible, it would be preferable to replicate exposure to bitcoin using existing financial assets because there are still substantial risks to owning bitcoin. First, a plot of bitcoin's price in both a linear and log scale to place the following analysis in context.

Can Bitcoin Be Considered a Financial Asset?

Before calculating bitcoin's correlation to other financial assets, it's useful to take a step back and think of whether bitcoin can be considered a financial asset based on its fundamental characteristics. And if bitcoin is a financial asset, how should it be classified?

A useful framework for thinking about this is in Robert J. Greer's paper, "What is an Asset Class, Anyway?" In this paper, Greer defines an asset class as "a set of assets that bear some fundamental economic similarities to each other, and that have characteristics that make them distinct from other assets that are not part of that class."

He proposes that any asset can be classified into one of three super classes:

In the real world, not every asset falls neatly into one of the three categories. Gold, for example, is both a consumable asset and a store of value asset. It's arguable that U.S. sovereign bonds are both a capital asset and a store of value asset. But it's still a useful framework to keep in mind when thinking about portfolio construction.

Where does bitcoin fall in this framework? Bitcoin can be safely categorized as a store of value asset in that it doesn't generate income, you can't consume it, and yet it has economic value. Store of value assets are often referred to by other names, including "safe haven assets" and "flight to safety assets". Thus, we should expect a priori that bitcoin should have a higher correlation to other store of value assets, including gold, other precious metals, and safe haven currencies like the Swiss franc, U.S. dollar, and Japanese yen.

Testing Bitcoin's Correlation Using the Brute Force Approach

In the past few years, ETF offerings have become sufficiently broad to represent virtually all asset classes across all major countries and geographies. ETF historical prices, therefore, represent a fairly high-quality source of asset returns. I wrote about how to obtain this data in a previous post: How to Scrape Data for Over 1,900 ETFs.

I first tested bitcoin's correlation to other financial assets using what I call the brute force approach: I calculate the correlation between bitcoin's weekly return and the weekly return of all ETFs with over $10 million in assets and plot the results in the following histogram.

The interpretation is that the correlation between bitcoin and other financial assets is extremely low. Most asset classes have a correlation between -0.1 and +0.1. The few ETFs with correlations outside of this range were mainly explained by the fact that some ETFs were launched recently and thus the correlation between bitcoin and these ETFs was largely spurious in nature.

This result was a bit disappointing since I was originally hoping to replicate bitcoin's exposure using a collection of highly correlated ETFs. On the other hand, this is a strong argument for including bitcoin as a significant part of a portfolio of risky assets. Finding and adding an uncorrelated asset to a portfolio can act as a powerful source of diversification by increasing the portfolio's sharpe ratio. There are extremely few assets that are this uncorrelated with other assets and that makes bitcoin extremely desirable from a portfolio construction perspective.

Testing Bitcoin's Correlation Using the Refined Approach

I decided to look into bitcoin's correlation further using a refined approach by calculating the one-year rolling correlation between bitcoin's weekly returns and the weekly returns of selected ETFs. There is evidence that bitcoin has become a more mature asset class over time in that its volatility has reduced and it has started to react more to macroeconomic factors and geopolitical events rather than things that are specific to bitcoin itself.

Below I plot of the one-year rolling correlation between bitcoin's weekly returns and the weekly returns of a selection of risky assets followed by a plot of a selection of safe assets.

The interpretation is that even looking at a one-year rolling window, the correlation remains low with many correlations oscillating between positive and negative. Current correlation is still low even though bitcoin has had time to mature into a legitimate asset class.

Remember, I had expected a priori that bitcoin would have a higher correlation to these safe, store of value assets. Originally, I had hoped to replicate bitcoin exposure using a combination of gold, US sovereign bonds, and foreign currencies. These results strongly suggest that this is not possible and that bitcoin is a unique, uncorrelated asset class that is not strongly affected by the macroeconomic factors that drive most asset classes.

Doing this analysis has given me conviction that bitcoin should be a part of my passively held, long-only portfolio. First, there aren't that many store of value assets in the first place. There's gold, US sovereign debt, safe haven currencies, and that's it. Second, it's surprising that bitcoin's correlation is this low, even among other store of value assets.

At the same time, there are strong theoretical arguments that bitcoin will serve as a hedge against harmful geopolitical events due to its decentralized nature. There's a growing body of empirical evidence of this also with bitcoin price spiking in response to both Brexit and Donald Trump's win.

Bitcoin is uniquely positioned to hedge against geopolitical risks but remain unaffected by the macroeconomic factors that drive other store of value assets.

Exposure to bitcoin can be obtained either by buying bitcoin directly, through the upcoming bitcoin ETF (Pending:COIN), or the Bitcoin Investment Trust (OTCQX:GBTC).

The code for this post can be found on my Github.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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What Is Bitcoin's Correlation With Other Financial Assets? - Seeking Alpha

Spooked by spike in cyber extortion, businesses are stockpiling bitcoin for payoffs Sacramento Bee U.S. corporations that have long resisted bending to the demands of computer hackers who take their networks hostage are increasingly stockpiling bitcoin, the digital currency, so that they can quickly meet ransom demands rather than lose valuable ... and more »

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Spooked by spike in cyber extortion, businesses are stockpiling bitcoin for payoffs - Sacramento Bee

Eric Lombrozo, a Bitcoin Core developer, believes that bitcoin is about financial independence and freedom, rather than providing a centralized settlement network which already serves as the backbone of todays global financial ecosystem.

Over the past two years, various bitcoin communities, analysts and experts have debated on the characterization of bitcoin; specifically whether bitcoin demonstrates the qualities of a settlement network or digital gold.

Since the initial deployment of the bitcoin network, Bitcoin Core developers and other talents in the open source development community of bitcoin have focused on strengthening security measures to eliminate the presence of a central authority within the bitcoin network and ensure the network itself will not be compromised in the future.

The prioritization of security instead of flexibility and functionality as seen in alternative failed blockchain projects allowed bitcoin to prosper and evolve into a decentralized financial network that cant be censored or restricted by a governing entity. It allowed users to settle payments with low fees and at relatively fast speeds, in comparison to traditional banking.

As the bitcoin network grew in size, transactional delays caused discomfort for daily users. Some individuals expressed their concerns over the increasing transaction fee of bitcoin, which is currently at US$0.32 for an average transaction. A $0.32 fee should be enough to have transactions confirmed within a few hours.

However, the Bitcoin Core development team and industry leading companies arent particularly concerned of the rising fees as it is the result of the prioritization of security. Bitcoin Core developers are focused on introducing software like Segregated Witness (Segwit), which allows bitcoin to scale significantly without imposing major security risks unlike hard forks.

Users and investors shouldnt necessarily be overly concerned about the scalability of bitcoin as well because there already exists a scalability and transaction malleability solution in Segwit and two-layer solutions such as Lightning and TumbleBit that can contribute to the scalability of bitcoin. Lightning in particular enables the facilitation of micropayments, that open doors for many applications which intend to rely on bitcoin micropayments.

Bitcoin is still a technology at an early stage. Currently, the Bitcoin network allows users to make payments that werent possible before. Before bitcoin, users couldnt imagine the possibility of transacting millions of dollars within a few hours with less than $1 in transaction fee without the presence and involvement of a governing entity or a bank.

As Lombrozo explains, Bitcoin is about financial sovereignty. If you think its merely about fast and cheap youre short-changing yourself.

The contemporary structure of bitcoin makes it difficult for two-layer solutions to exist. Soft forks like Segwit however allows bitcoin to eliminate transaction malleability and alter its design to welcome two-layer solutions that could enable bitcoin to become a fast, cheap and secure financial network for mainstream users.

Lombrozo believes that the activation of Segwit, implementation of layers and introduction of innovative solutions will allow bitcoin to serve as an important technology to provide users with financial freedom, privacy, independence and flexibility.

You can make it fast and cheap with layers. Current network design does not allow it at large scale. I wish this werent so. Unfortunately HFs carry significant political cost and security risks. I also wish this werent so, noted Lombrozo.

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Core Developer: Bitcoin is About Financial Sovereignty, Not Speed - The Merkle

Spencer Bogart is vice president of equity research for Needham & Co. He joined the firm in 2014 and currently leads the research efforts on blockchain technology and bitcoin while supporting research on cloud software (SaaS) companies. ETF.com recently sat down with Bogart, a former ETF.com analyst, to get his take on all the important developments in the bitcoin market ahead of the key SEC decision on the Winklevoss ETF, expected within the next month.

ETF.com: Before we jump into more specifics, in a nutshell, how would you describe what bitcoin is to the layperson?

Bogart: Bitcoin is peer-to-peer digital cash that's not issued by any central authority.

ETF.com: Tell us about the highly anticipated decision that's coming from the SEC. What is it ruling on and what are the odds the ruling will be positive? Spencer: There's a number of bitcoin ETFs that are going through the regulatory approval process. The one that's been going through the process the longest is the Winklevoss bitcoin ETF [Winklevoss Bitcoin Trust (COIN)]. That's been going on for about 3 1/2, four years now.

The exchange they would like to list that particular ETF onwhich in this case is Bats [owner of ETF.com]has filed a proposed rule change, which would be necessary to list the ETF. It's that proposal that essentially we've been watching go through the regulatory approval process.

At each point along the way, the SEC has had the option to approve, disapprove the ETF or to extend its time to make a decision. All along the way, its chosen the opportunity to extend the time to make a decision, including submitting requests for public comments.

Well now see an end to that process before March 11, which is the deadline. Before that, well either get an approval, a disapproval or Bats will withdraw its request for a rule change. Or, if no decision is made by March 11, then the rule change is automatically approved.

ETF.com: What factors are the SEC considering?

Bogart: I don't have any inside information, but my sense is that the majority of the things that the SEC is particularly concerned about revolve around bitcoin itself as opposed to anything specific about the Winklevoss filing.

They're asking if a digital asset such as bitcoinwhich, unlike a commodity doesn't have a physical form, and unlike a security or derivative, is not under any kind of regulatory supervisionis a suitable underlying asset for an ETF.

At the highest level, that's the kind of thing they're considering. A little bit more in the weeds they're asking if the specific markets that bitcoin trades on are stable, fair and efficient, and if they facilitate or enable or encourage any kind of market manipulation.

And then of course, there are the factors that are more specific to the ETF itself, which I think, in this case, probably the most important ones are what do you use as a reference price for bitcoin, and how are you going to securely store that bitcoin?

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Bitcoin ETFs For Dummies - ETF.com