Monthly Archives: April 2015

Community Diversification Makes Bitcoin Much More Interesting
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By: Satoshi Pollen

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Community Diversification Makes Bitcoin Much More Interesting - Video

The Bitcoin Foundation, formed in 2012 to promote the virtual currency, has rejected claims by a board member that its bankrupt but has acknowledged significant financial problemsironically as a result of a big drop in the value of its bitcoin holdings.

On Tuesday its board of directors rejected claims made a day earlier by board member Olivier Janssens that it was effectively bankrupt, but said the bitcoin roller coaster has forced it to drastically cut back its operations.

In early 2013 a bitcoin was valued at around $14 but that soared to $1,145 by November that same year, according to Coinbase. Three weeks later, it had collapsed to $569 and continued wide swings throughout much of 2014. Today, a bitcoin is worth about $258.

Those swings add up to bad news for the organization.

The drop in bitcoin price drastically affected the Foundations bottom line as the majority of assets were held in bitcoin, it said.

As a result, the foundation has cut programs to concentrate on one mission: development of the Bitcoin Core Protocol. Staff numbers have also been cut, although the foundation rejected Janssens claim that 90 percent had been fired.

Some team members left voluntarily and agreed to continue helping on a volunteer basis to help the Foundation during this financially austere time, it said.

The foundation hasnt revealed exactly how many bitcoins it holds, but a filing with the Internal Revenue Service said the holding was worth $4.5 million at the end of 2013. Based on figures from Coinbase, that was equivalent to just over 6,000 bitcoins. Today, those bitcoin would be worth $1.5 million.

The current state of the foundations finances should become clearer in the coming weeks when its latest IRS filing, covering 2014, becomes public.

And when it does, the board might face questions about why they didnt diversify the foundations assets to put it on a more stable base, instead choosing to keep them all in a volatile investment.

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Bitcoin Foundation hit hard by big bitcoin losses

Foundation says it's not bankrupt, but has been hit hard by the currency it's trying to promote

The Bitcoin Foundation, formed in 2012 to promote the virtual currency, has rejected claims by a board member that it's bankrupt but has acknowledged significant financial problems -- ironically as a result of a big drop in the value of its bitcoin holdings.

On Tuesday its board of directors rejected claims made a day earlier by board member Olivier Janssens that it was "effectively bankrupt," but said the bitcoin roller coaster has forced it to drastically cut back its operations.

In early 2013 a bitcoin was valued at around $14 but that soared to $1145 by November that same year, according to Coinbase. Three weeks later, it had collapsed to $569 and continued wide swings throughout much of 2014. Today, a bitcoin is worth about $258.

Those swings add up to bad news for the organization.

"The drop in bitcoin price drastically affected the Foundations bottom line as the majority of assets were held in bitcoin," it said.

As a result, the foundation has cut programs to concentrate on one mission: development of the Bitcoin Core Protocol. Staff numbers have also been cut, although the foundation rejected Janssens' claim that 90 percent had been fired.

"Some team members left voluntarily and agreed to continue helping on a volunteer basis to help the Foundation during this financially austere time," it said.

The foundation hasn't revealed exactly how many bitcoins it holds, but a filing with the Internal Revenue Service said the holding was worth $4.5 million at the end of 2013. Based on figures from Coinbase, that was equivalent to just over 6,000 bitcoins. Today, those bitcoin would be worth $1.5 million.

The current state of the foundation's finances should become clearer in the coming weeks when its latest IRS filing, covering 2014, becomes public.

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Bitcoin Foundation hit by big bitcoin losses

It marks the first time that a candidate for president has accepted purely digital campaign funds.

The Libertarian Republican is an obvious choice to test the waters. Bitcoins are an independent currency that's totally outside the realm of U.S. dollars. It's like Euros or Yen -- except bitcoins are created and distributed privately by a community of tech enthusiasts.

Bitcoin fits in with Paul's views that government should take a more "hands off" approach to controlling the nation's money supply, which drives up inflation and devalues the currency. He's also likely trying to draw the attention of young, tech-savvy voters.

Paul, a U.S. senator from Kentucky, announced his bid on Tuesday. His website shows he's also accepting donations in credit cards and from PayPal.

Related: What is Bitcoin?

Bitcoin is frequently associated with tech geeks and crime. That's because it's a highly complex system that has famously been used on black markets online.

However, it's much more than that. It's a creative new system of money that allows for immediate, secure transactions with very low fees.

Startups are trying to build networks so that people in rich countries can more easily send money to family members in poor countries. Major banks are experimenting with ways to make faster and more convenient person-to-person payments.

There's also a concern that -- because bitcoins function outside the banking system -- they're harder to trace. That's a dangerous implication for mysterious, untraceable donations.

But that's largely unfounded. Contrary to popular belief, bitcoins are perfectly traceable (like email). And new rules from the Federal Election Commission say that politicians have to register new donors just like they do with regular U.S. dollars anyway.

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Rand Paul is first presidential candidate to accept donations in Bitcoin