Monthly Archives: January 2015

Bitcoin the cryptocurrency has had a rough couple days, but Silicon Valley venture capitalist Marc Andreessen said Monday he is not worried.

The same day that Bitstampthe second-largest dollar-bitcoin exchangesuspended operations for what it said was a security issue, the Andreessen Horowitz co-founder took to Twitter to tout his continued belief in the technology.

Read MoreMajor bitcoin exchange suspended after price plunge

This is hardly the first time that Andreessen has expressed his belief in the future of bitcoin, but on Monday he specifically addressed criticism's about the cryptocurrency's potential use cases and its price volatility.

The price of bitcoin dropped into the $250-range on Sunday after trading for weeks in the mid-$300s. By Monday afternoon its value was about $269, depending on the exchange.

Below, find Andreessen's 26-tweet manifesto on the merits of the technology.

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Marc Andreessen's bitcoin tweetstorm

Some, however, are not buying this explanation.

"Don't believe Bitstamp. It's a matter of liquidity," Jeffrey Robinson, author "BitCon: The Naked Truth about Bitcoin" wrote to CNBC. "Who's next? It's as if Bitstamp realized they couldn't internalize the risk anymore so just decided, Let's suspend operations until everything settles down."

Others are in agreement that Bitstamp's issues may go well beyond security. A commentary in the Financial Times posited that the issues could lie in the company's financials becoming unhinged by the falling price, or the economics of mining taking their toll on the exchanges.

Read MoreMarc Andreessen: I still stand behind bitcoin

The price of bitcoin dropped into the $250-range on Sunday after trading for weeks in the mid $300s.

No matter what the cause of the service halt, Monday's news will be of key importance for the future of the cryptocurrency, according to "Fast Money" trader Brian Kelly.

"This is a critical moment for Bitcoin. As Adam Smith said, 'all money is a matter of confidence' and the reaction to this potential hack will either serve to undermine or bolster confidence," he wrote.

While Mt. Gox, the bitcoin exchange that fell apart in 2014, may have seen mismanagement, Bitstamp has a "highly capable venture capital team," according to Kelly.

Here's what Bitstamp CEO Nejc Kodri had to say over Twitter:

Cold storage basically means that the wallet numbers have been recorded off of a hackable server (anything from being written on a piece of paper to stored on a USB drive).

Continued here:
Exchange: Lost 'less than' $5.1M of bitcoin

On January 6 of 2014, one Bitcoin (BTC) was valued at approximately $951 U.S, according to Coindesk - a height that the cryrtocurrency never again achieved over the course of the year. On December 29, BTC was valued at approximately $312 USD, down by $639 or 67 percent from its January 6 high. Yet despite the dramatic decline in value, there is still much reason for optimism in the Bitcoin world.

Even though the value of Bitcoin has declined over the course of 2014 and even though it has had its' share of troubles, the Bitcoin movement persists and will likely continue to survive for the foreseeable future.

On January 29, before the Mt.Gox collapse, venture capitalist and Internet browser pioneer Marc Andreessen explained why he was bullish about Bitcoin. For Andreessen, the opportunity is all about leveraging the power of distributed computing for transactions, without the need for a central authority. It's an opportunity, that has not changed over the course of 2014, even though the value of Bitcoin has. It's that opportunity that Andreessen sees in Bitcoin, to disrupt and re-invent the way transactions are performed that will keep Bitcoin relevant.

Markets move on supply and demand, just ask any oil trader. The price of crude oil has also fallen dramatically over course of 2014, from a high over $100 a barrel to settling in just above $50 in December.

The simple truth is that Bitcoin has value because there is demand and there is opportunity. While demand may grow or wane over any given period of time, it is clear that after a year of great challenge for Bitcoin, the opportunity remains for 2015 and beyond.

Sean Michael Kerner is a senior editor at InternetNews.com. Follow him on Twitter @TechJournalist.

Link:
Bitcoin in 2014: The Year Bitcoin Should Have Died (but didn't)

Summary:The European bitcoin exchange suspends its service after it was hacked, ZDNet can confirm. Less than 19,000 bitcoins were stolen from an operational wallet.

Bitstamp prices plummeted after news of the breach broke (Screenshot: ZDNet)

European bitcoin exchange Bitstamp suspended trading Monday after one of its active, operational bitcoin storage wallets was "compromised" over the weekend.

In a statement on its site, Bitstamp warned users not to deposit any Bitcoin to previously issued addresses.

The popular bitcoin trading site, said to be the world's third busiest bitcoin exchange amounting for 6 percent of all bitcoin transactions, said that a "small fraction" of customer bitcoins are maintained in online systems, adding that any compromised bitcoins can be recovered from its "cold" offline storage reserve.

Co-founder and chief executive Nejc Kodric said in a tweet that the bulk of Bitstamp's bitcoin reserves are in cold storage, and are "completely safe."

The site continued in its statement that it will "return to service."

Late on Monday, Bitstamp confirmed in an emailed statement to ZDNet that "less than 19,000 bitcoins" were stolen from the company's operational wallet.

Kodric said the bitcoins held with Bitstamp prior to the temporary suspension of the company's service are "completely safe and will be honored in full."

The market value of 19,000 bitcoins represents roughly $5 million. (We reported this figure earlier, details of which can be found below.) There has been no other comment as of yet from Bitstamp or Kodric.

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Bitstamp exchange hacked, $5M worth of bitcoin stolen