Onrain tsūka torihiki no gainen zentai no haigo ni aru gainen o rikai shiyou to suru to, bittokoin wa fukuzatsu ni mieru kanōsei ga arimasu. Tadashi, hoka no hotondo no jūrai no toranzakushonde wa kinō shinai kanōsei no aru bittokointoranzakushon de nani o sagasubeki ka, nani ga hitsuyō ka ga wakaranai baai ni nomi, jitai wa kon’nan ni mieru kanōsei ga arimasu. Gainen zentai o rikai shiyou to shite mondai ga hassei shita baai demo, shinpaishinaide kudasai. Koko ni ikutsu ka no kihon jikō ga arimasu. Bitto koin no zentai-tekina aidea wa onraintoranzakushon ni motodzuite imasuga, rikai o fukameru tame ni butsuri-tekina toranzakushon no kanten kara miru koto ga dekimasu. Ko no yō ni mite kudasai. Anata wa dare ka to nanika o kyōyū shite imasu, koreha okane, kudamono, hon kamo shiremasen, anata wa sorera ni namae o tsukemasu. Soshite, sore wa anata no futaridakedesu. Anata wa sore o mokugeki suru tame ni hokanohito o makikomu hitsuyō wa arimasenshi, shoyū-ken no jōto no ninshō ni tsuite shinpai suru hitsuyō mo arimasen. Zaisan no jōtai wa towa ni aru hito kara betsu no hito ni utsuri, 2-banme no shoyū-sha wa sarani shoyū-ken o 3-banme no shoyū-sha ni jōto suru koto ga dekimasu. Mā, bittokoin mo dōyō ni dōsa shimasu.
Yuiitsu no chigai wa, hotondo no baai, bittokoin wa dejitarumanē de dōsa suru kotodesu. Sate, koko de ikutsu ka no mondai ga hassei shimasu. Jisseikatsu de no kōkan to wa kotonari, dejitaru no mono ni wa kanari no kadai ga tomonaimasu. Korera no 1tsu wa, shoyū-ken no kōkan o kakunin suru hōhō to, mae no shoyū-sha ga sore o hoka no dareka matawa kōnoba de kyōyū shita ka dō ka o handan suru kotodesu. Kore wa nijū shiharai no kenen o hikiokoshimasuga, kore wa mada kaiketsu sa rete inai kadaidesu. Sate, kono mondai ni taikō suru tame ni, dejitaru daichō nado no ikutsu ka no shudan o shiyō suru koto ga dekimasu. Ko no yōna baai, jikkō sa reru torihiki o kantoku suru tame ni daisansha ga kan’yo suru hitsuyō ga arimasu. Tadashi, kore ni wa ketten mo arimasu. Uriage no tsuiseki o tantō suru hito wa, bittokoin o fuyasu koto de purosesu o bōgai suru kanōsei ga arimasu. Kono mondai wa, purosesu zentai o kōkai suru koto de kaihi dekimasu. Ko no yōna daichō wa, subete no konpyūtā de kyōyū dekimasu. Kono purosesu ni wa, toranzakushon no yori anzende kaizen sa reta kanshi to mondai no entiti no kanshi o jitsugen suru no ni yakudatsu ōpunsōsukōdo to rūru no shiyō ga fukuma remasu. Kono kyūsai-saku wa, 3ttsu no jūyōna sokumen no okage de yakunitachimasu. Sorera no 1tsu wa, subete ga paburikkudomein ni aru to iu omona kangaedeari, bittokoin no baai no ryōdearu riyō kanōna pīsu no kazu o daremoga shitte imasu. Daini ni, torihiki no sai, paburikkurejā ga purosesu o kōshin oyobi kenshō suru tame, shoyū-ken no jōto ga kanryō shita koto o daremoga rikai dekimasu. Saigo ni, subete no hito ga motochō o kyōyū shite iru tame, daisansha ga anata no torihiki o kantoku suru hitsuyō wa arimasen. Butsuri-tekina settei no baai to dōyō ni, shoyū-sha wa sore o 2-kai ijō hanbai suru koto wa dekimasen. Bittokoin wa, fukuzatsudearu hitsuyō no nai tanjun’na purosesu o fukumimasu. Rikai suru no ga muzukashī to kanjiru hito mo imasuga, kono yō ni miru to, monogoto ga yori kantande meikaku ni narimasu.
If you are a small business owner, you can use Bitcoin by promoting and accepting it as a means of payment. This is most suitable for business owners dealing with goods and services regular currency who wish to add Bitcoin to their way of payment for their customer. Besides, it is also essential noting that it is best if you are willing to pay tax on your Bitcoin income.
This digital currency has become one of the ways to carry out anonymous transactions as well as competing with the traditional currency. This has seen many small business owners uncertain about the best way to accept it, and whether it’s legit as well as concerns over tax payment and such. Not to worry, here are several ideas on how to use it.
The Bitcoin merchant solution is very convenient to use, especially if you are selling goods or services on your website. Then you can convert your bitcoins to the government currency through several available services.
Using tablet or Smartphone
This can work best if you use a QR code that your customers can with their device to make a payment.
In this case, when a customer makes a purchase, you can credit their account, like a discount. However, it is worth considering whether this will disguise the transaction in any negative way. You can also give a discount for Bitcoins, and then sell them for American currency, which will probably turn out that your income overall will reflect a benefit, but you may need to consult your accountant on this one.
Gift cards business
If you deal with the sale of gift cards or certificates, you can accept Bitcoin for the purchase of the card, and then have the card only used for a real purchase of goods or services. This is yet another place where the accounting comes in very handy, which you can also use to track sales.
If you usually send invoices to customers, you can boost Bitcoin’s economy as well. You can add it among the other payment options. This may necessitate your customers to call or email to pay, but it will be a great addition to your business. If you can generate Bitcoin addresses, it will be wise to generate a different one for every invoice and have it printed on it. This way, you can sort the invoices as they arrive.
Dealing with fraud
The risk of fraudsters can prove a challenge, especially if you do not know how to confront it. Fraudsters can take advantage of your customers, luring them to their Bitcoin address and taking your money. It is an urgent matter of whether or when a fraudster finds out about your customers, this can be detrimental. To prevent this menace, you can ensure people do not type your Bitcoin address off your payment stubs. You can also manage it by making sure they get your full address from your website, and use a secure SSL.
Bitcoin is becoming more popular than ever before, and its price is on the rise, making it a challenge for many to buy. If you are interested in a share of this digital gold, several options can help you get there. First, a Bitwage can come to your rescue. Bitwage is a bitcoin’s payroll that converts your payment into this digital currency, bitwage will also send you this a day after deposit.
Just like the popular freelancing platform, bitcoin freelance comes with its share of advantages. These benefits include receiving payments faster, the ability to save on your traditional banking fees and, in most countries, save on taxes too. Some of the best places to check out for these are jobs4bitcoin, subredit, and bitcointalk, although you will have to find an escrow or entrust your employer.
How many items do you have around that you never use? Well, those can make you money with bitcoin. Since you no longer need them, the best way is to exchange them for something of value, and this is one of the best ways to do it. You will most likely find someone out there who needs what you have, and exchanging them for bitcoins is the best way to cut back on chargebacks and intermediaries fees.
Most small tasks available don’t necessarily require experience or particular skills to accomplish. These can be completing surveys, pay to click ads or social promotions as well as solving captchas. Here, you can count on cryptocurrency excel for the micro transactions that come with such micro jobs. Some of these jobs include Faucet, which is available in many options. However, most faucets involve solving captchas for ads, although the payout can be very little, they can be done by virtually anyone. You can also try the Bitcoin.com’s birds, which involves retweeting paid tweets for money. As payment, they send you Bitcoins to your address.
If writing or art is your kind of thing, then you can make it more than just a hobby. With many writers trying to succeed with censorship from sources that sometimes do not live up to their promise, you can take a different course and earn Bitcoins. One of the best opportunities is the Steemit, a block-chain platform where you can get their cryptocurrency, Steam.
The reward you get is determined by the popularity of your articles, with the payment process being automated to be paid out based on someone’s up votes from others. Besides, if you curate content on the platform, you can earn as well, and then convert the altcoins you get to Bitcoin with the help of ShapeShift.io or any other online exchange platform. The best thing to do is determine which of the options available is ideal for you and go for it. Earn Bitcoins while doing what you love most.
There is much information on the IRS tax guide on virtual currencies; very few have done an analysis on Plethora of the record keeping and enforcement on the challenges that arise from the decision to treat Bitcoins as a property rather than a currency. Various bitcoins stakeholders such as traders, consumers, merchants, and miners must grapple with the new tax filing requirements. There is still need for the various changes and clarifications on the filing procedures.
The ruling placed on bitcoins is regarded as a property and not a currency. This is favorable given the bitcoin ruling to investors in its current stellar performance. The accrued long-term gains and losses shall be taxed according to the taxpayer’s applicable capital gains interest rather than ordinary income rates. This constitutes larger marginal difference among early investors and bitcoin miners. Still, active traders that have short term gains still will pay taxes at ordinary income rates.
Investors that have long trading losses are not favored with the ruling. It is hard to write off bitcoin bets now that they are considered more of a property than a currency. The IRS has set a limit for both married and single filers for losses at $3000, an amount that has remained static since 1978. Trading losses may need to be carried forward for even years before laying claim. Also, this affects the small traders. It would be better if they could have written off foreign currency against ordinary income taxation. This is the basic application of the IRS guideline.
The following are some of the tips for traders in compliance with the Internal Service revenue service and avoiding gray areas;
The various bitcoins miners need to keep daily transaction of the manner in which the transactions occurred. Record each block reward that you received as part of solving algorithms. While giving out the bitcoins subtract the income and output to get the long-term financial gains.
This is a different way in which digital currencies are created. At the date of minting the value stands at zero, at ordinary income values. Mark the date of minting as it will be useful for filing returns.
Most people trade using Bitcoin. The fair market value records this as an income. Record the details of the earnings. It will help win filing short term or long term trading returns. If you have earned bitcoins as a result of trading services or purchase of goods keep the details of the transactions.
When you are engaged in bitcoins trading, there are no immediate tax returns. Record all the transactions for the long term and short term financial returns. The taxable event comes during disposition regardless of whether you earn or sell it.
Some companies record bitcoins transactions as a form of payment. This is treated like selling bitcoins and should be recorded.
In conclusion, everyone should learn the operations of an excel finance sheet to gain the necessary insight on the IRS guidelines.
Since the introduction of digital currency, Bitcoins have become popular there has been an emergence of ways through which someone earns money with bitcoins.
1. Bitcoin mining
Despite the bitcoins mining tools requiring a lot of energy to run, still, there is an advantage of creating bitcoins. The profit margins for single bitcoin earners is not very high; therefore mining pools where many people mine bitcoins is a cost efficient tool.
For people who do not mind getting involved in small tasks, various websites reward people on solving captchas through awarding bitcoins. Faucets do require a lengthy amount of time to get a substantial amount.
3. Mobile games
Mobile games such as Oh Crop reward players by bitcoins. Players get to remove evil plants in the crop. Players get reimbursements upon watching advertised videos. Some games like Multiplayer PVP players earn through referrals.
4. Read books
Here is another way of earning through performing a given task. PaidBooks.com is a site where a variety of books are available and users earn through reading books. The sites pay higher bitcoins than faucets.
5. Earn through watching short videos
There are various sites such as Vidybit where all someone needs is a bitcoin account or a Xapo account. A few minutes after watching the given video, a payment is issued. Vidybit is a single site that offers instant payment. It provides numerous videos and different channels where anyone can watch and get paid daily.
6. Earn bitcoins as a regular income
Just like other currencies are used in making payments, bitcoins can be used. If it is acceptable in your workplace, you can get bitcoins paycheck. Apart from working in an enterprise, anyone can get paid through working online on freelance sites such as Bitcoins vacancy. Freelancing will allow anyone to work from home.
7. Play dice
Sites like free dice enable one to play dice with the minimal balance in their account. A user having a considerable amount of time can turn the small amount into a huge amount through playing dice.
8. Earn through online trading
Despite the fear of hackers stealing funds, there are many sites where anyone can trade bitcoins with other digital currencies and earn income. That person just needs to have basic speculation skills to determine when the rates are high and sell the bitcoins.
9. Earn as payment or getting tipped
Earn bitcoins through accepting them as a form of payment and getting tipped by customers. All you need is a wallet and a QR code with your bitcoins register. Bitcoins act as a means of exchange in an online shop as well as tips from blog pages.
Several programs enable the users to earn bitcoins. For example, TryBTC take users through the process of wallets, addresses, transactions and gives free bitcoins to users.
Anyone can earn money using one or more of the listed strategies. However, the amount of income generated from each method may vary.
Bitcoin can seem complicated if you are trying to understand the concept behind the whole idea of online currency transactions. However, things may appear difficult only if you do not know what to look for and what it takes for Bitcoin transactions that may not feature in most other conventional ones. If you are having problems trying to understand the whole concept, do not worry, here are some of the basics.
As much as the whole idea of Bitcoin is based on online transactions, it can be viewed from a physical transaction perspective for a better understanding.
Look at it this way; you are sharing something with someone, this could be money, fruit, books, you name them. Then, it is only the two of you. You do not need to involve another person to witness it, nor do you have any concerns over the authentication of the transfer of ownership.
The state of property shifts permanently from one person to the other, and the second owner can further transfer the ownership to yet a third owner. Well, Bitcoin operates similarly.
The only difference is that in most cases, Bitcoin operates on digital money. Now, here is where several issues come up. Unlike exchange in real life, the digital one can come with its fair share of challenges.
One of this is determining how the exchange of ownership can be confirmed and whether or not the previous owner had shared it with someone else or in public. This raises the concern of double spending, which has been a challenge yet to be solved.
Well, some measures such as digital ledgers can be used to counter this problem. In such a case, a third party will have to be involved to oversee the transactions carried out. However, this comes with its downside as well. The person responsible for tracking the sales can interfere with the process by creating more bitcoins.
This issue can be avoided by making the whole process public, where such a ledger can be shared on everyone’s computer. The process will involve the use of open source codes and rules that will help achieve a more secure and improved surveillance of the transactions and monitoring of the entities in question.
This remedy comes in handy, thanks to three crucial aspects. One of them is the main idea that everything is in public domain, where everyone knows the number of pieces available, which is the amount in the case of Bitcoin.
Secondly, upon a transaction, anyone will understand that the transfer of ownership has been completed, as the public ledger will update and verify the process.
Lastly, with the ledger shared by all, there is no need for a third party to oversee your transaction, the owner cannot sell it twice or more, just as it would be the case in a physical setting.
Bitcoin involves a simple process that does not have to be complicated. Despite people finding it difficult to understand, looking at it this way makes things easier and clear.
Eight Steps to Earning Bitcoins
There are many ways in which someone can trade bitcoins and make money. Each of the following ways enables the users to earn.
1. Accept them as a means of Payment
If you run any kind of business whether wholesale or retail, earn through accepting Bitcoin as a means of payment. There are various steps in which you can register to earn from Bitcoin. First, register for an online Bitcoin wallet from Coinbase. Second, display a QR base on my wallet section to allow you to add or receive funds. Lastly, include the Bitcoin accepted here logo in your online business.
2. Complete tasks Online
Most websites offer free bitcoins from people visiting their sites. Once you get to their sites, before earning the free bitcoins you will get to see adverts or a music clip. Still, there are sites where you complete analytical tasks while on others free bitcoins is an additional gift on some kind of purchase made.
3. Earn from interest on payments
If you already have some bitcoins you can earn through lending them out and earning interest. Still, you should be careful to whom you are lending to avoid losses.
4. Bitcoin mining
Mining refers to the process where bitcoins are generated. During mining, each new transaction is recorded in a block chain where the old and new searches are stored. Mining hardware is expensive having most creators to join a mining pool. Here, you do not need to earn your new mining area.
5. Earn Bitcoins from getting tipped
Earning through tips is similar to earning while one is receiving payments. Open a Bitcoin wallet, a QR code with your bitcoin address on it. People potential to tip you need to know your bitcoin address. One can be tipped through their online shop or a blog. Since there is no substantial amount of tipped bitcoins, a QR code is sufficient for knowing what transaction took place on a specific day.
6. Earn through trading
Arbitrage trading is a way in which various traders can earn money. A trader spots an opportunity for purchasing an item in one location and selling it on another location at a higher price. Bitworld trading comes with its set of difficulties. It is not easy to find trading opportunities. Yet sometimes when the opportunities are available they are not open to everyone. Traders need to keenly look into each opportunity.
7. Earn Bitcoins as a regular income
Just like other forms of monetary payments, if your organization allows you can be paid by bitcoins. Still, there are only a few organizations that can accept payment through bitcoins. Freelancing is one way in which someone can be paid through bitcoins. Jobs for bitcoin on Reddit are a good platform for freelancers to work on.
8. Earn through gambling- not suitable for all
Despite the cons of gambling, there are many bitcoin gambling sites where someone can earn money through gambling.
The eight listed methods are a sure way of earning through bitcoins. Some methods are simple while others call for skillful users to succeed.
Bitcoin prices peaked at an all-time high of over $11,800 Sunday in one of the most dramatic value surges of any asset in living memory.
Today’s prevailing digital currency was worth just $12 in 2013, and has at times been dismissed as an internet fad favored by nefarious wheelers and dealers trying to circumvent taxes or the law.
Like it, love it, or confused by it, bitcoin and other cryptocurrencies have become impossible to ignore. Chicago’s two main exchanges, the Chicago Mercantile Exchange and the Chicago Board Options Exchange have announced plans to launch bitcoin futures contracts, and the U.S. Commodity Futures Trading Commission has already given them the green light. Nasdaq may be jumping into the bitcoin futures race as early as second quarter next year, Bloomberg reports. Bitcoin advocates are hoping the exchanges can help stabilize the highly volatile currency.
Cryptocurrencies provide a digital alternative to government-issued fiat currencies and can be used in online marketplaces to buy everything from a cupcakes to plane tickets to cyber pets. While bitcoin remains both inconveniently slow (transactions can take upwards of 10 minutes) and risky (buyers cannot set a price until the day of the transaction, leading to wide fluctuations), some say it’s already safer than certain foreign currencies, such as Venezuela’s bolívar.
That’s because Bitcoin is protected from fraud and counterfeit by technology called blockchain — an encrypted ledger system that records transactions accepted by consensus of asset managers. The Atlantic‘s Derek Thompson summarized bitcoin as a “frankly terrible currency built on top of a potential transformative technology,” one that could have the power to change our conventional understanding of money.
Others are more concerned by possible financial risks than potential benefits. Investing pioneer and Vanguard Group Inc. founder Jack Bogle reportedly advised avoiding bitcoin and “like the plague,” joining other investors in similar criticism. “There is nothing to support Bitcoin except the hope that you will sell it to someone for more than you paid for it,” Bogle said, according to Bloomberg.
Like bitcoin, ether “tokens” are underwritten by a blockchain network, in this case called Ethereum. Pioneered by a former Bitcoin Monthly writer, Ethereum was launched in 2014 with an aim to pursue further decentralization. It differs from bitcoin primarily in application: Ethereum is an open, decentralized software platform where ether is used to pay for transaction fees and services. As of Monday, it was trading at a rate of more than $472 with a market cap of about $45.5 billion.
Launched in California by former bitcoin developers in 2012, Ripple is considered by some industry experts to be bitcoin’s logical successor, according to the New York Times. It’s already catching on among banks as a worldwide payment and remittance system. Unlike bitcoin, Ripple is not just a currency but a system through which any currency can be transferred or traded. The Times advised to think of it as a Western Union without the heavy fees. As of Monday, Ripple was trading at a rate of more than $0.25 with a market cap of around $9.82 billion.
IOTA, with the tagline “Next Generation Blockchain,” is one of the newest contenders in the increasingly crowded cryptocurrency field. Unlike its rivals, IOTA is not reliant on an underlying blockchain network, but uses an alternative, distributive ledger system called Tangle. Partnered with Microsoft, Fujitsu and several other companies, IOTA considers itself the first marketplace powered by the Internet of Things. As of Monday, it was trading at a rate of $2.43 with a market cap of around $6.75 billion.
Dash ran through a ringer of names before settling its current epithet. There was XCoin (XCO), the original, in January 2014. Then there was the dubious-sounding Darkcoin. Then finally, there was “Digital Cash” and its portmanteau Dash. Dash differs from its competitors with a focus on privacy and anonymizing transactions, and by operating on a two-tired system: coin “miners” are are overseen by “masternodes,” a decentralized, volunteer network that signs the transactions. As of Monday, it was trading at a rate of $777 with a market cap of around $6 billion.
The brainchild of a former Google employee, Litecoin has been called the silver to bitcoin’s gold, that is, a slightly cheaper, more readily available option. Litecoin was launched in 2011, as a faster alternative to bitcoin, processing a bloc every 2.5 minutesas opposed to every 10, according to Ars Technica. Instead of focusing on hefty transactions, Litecoin targets merchants who need a large volume of small transactions to be processed relatively quickly. As of Monday, it was trading at a rate of $101 with a market cap of around $5.47 billion.
Bitcoin is flying sky high after crossing the $14,000 mark for the first time, but one projected aimed at helping mine coins is short of at least $60 million after it was hacked.
NiceHash, a marketplace that matches those with spare computing to power to miners wanting to create new coins, has confirmed that it has hit by attackers who snatched bitcoin. The company has paused operations for 24 hours while it figures out exactly how much was swiped and how it was taken. Coindesk reports that users are circulating a wallet from the company that contains 4,736.42 BTC, worth more than $60 million based on today’s price.
The company is recommending that its users change their passwords — both on NiceHash and other services — following the breach.
Recent security issues in the crypto space have centered around Ethereum rather than bitcoin. A vulnerability in Parity’s wallet found in November caused $150 million in ETH to be frozen, while another Parity issue led to 150,000 ETH (then worth around $30 million) being stolen in July.
Bitcoin is back to its winning ways, posting a record high on Sunday and making billionaires of the twins Cameron and Tyler Winklevoss.
Bitcoin suffered big price falls last week but recovered over the weekend. The digital currency hit a new high of $11,826.76 a coin on Sunday, according to data from Markets Insider, surpassing its previous high of about $11,300.
The digital currency retraced some of its gains Sunday after hitting the peak. As of 8.05 a.m. GMT (3.05 a.m. ET) on Monday, bitcoin was up 2.79% against the dollar to $11,554.83.Markets Insider
Bitcoin has attracted interest from both ordinary investors and institutions. Last week it emerged that the exchange operator Nasdaq could follow its rival CME Group in launching bitcoin future contracts next year, a sign that professional investors are increasingly taking the asset seriously.
Investors are being drawn in by the promise of big gains. The Telegraph reported over the weekend that the Winklevoss twins, known for suing Mark Zuckerberg saying he stole the idea for Facebook from them, had become the world’s first bitcoin billionaires.
The two former Olympic rowers disclosed in 2013 that they owned $11 million worth of bitcoin. The cryptocurrency’s meteoric rise since then — it has risen by over 1,000% this year — has propelled that investment to over $1 billion, according to The Telegraph. The Winklevoss twins are long-time bitcoin bulls and are also investors in the crypto exchange Gemini.
Bitcoin speculators aren’t the only ones who stand to cash in from the crypto-currency boom. Uncle Sam is now set to collect back taxes from thousands of customers of a digital currency exchange who failed to report bitcoin transactions.
In a ruling on Tuesday, a federal court judge ordered San Francisco-based Coinbase to comply with a summons that requires it to identify 14,355 accounts, which have accounted for nearly 9 million transactions.
The order, which covers transactions between 2013 and 2015, comes after a prolonged court fight that began when the IRS demanded that Coinbase provide detailed personal information for more than a million customer accounts.
The IRS subsequently limited its demand to ask only for accounts that conducted bitcoin transactions—either exchanging bitcoin for dollars, or sending or receiving coins from another bitcoin user—worth $20,000 or more.
Coinbase claimed that even the narrower IRS request represented an illegal imposition, but the court disagreed.
“The summons as narrowed by the Court serves the IRS’s legitimate purpose of investigating Coinbase account holders who may not have paid federal taxes on their virtual currency profits,” wrote U.S. District Judge Jacqueline Corley.
In response to an inquiry from Fortune about whether it would appeal, Coinbase pointed to a blog post in which it stated the company was pleased that it had drastically reduced the scope of the original IRS demand.
“Although we are disappointed not to be able to entirely defeat the summons, we are proud to fight for our customers and in the result we were able to achieve as a small company against a large government agency,” said the blog post, which did not address the appeal question.
The investigation began after the IRS searched its electronic filings and discovered that only 802 people had declared bitcoin-related losses or gains in 2015.
During the three years covered by the IRS demand, the price of bitcoin soared from $13 to over $1,100. The currency this week broke the $11,000 for the first time.
The IRS dispute with Coinbase is likely to be just the opening salvo in a prolonged effort by the federal government to ensure digital currency speculators pay their taxes. While Tuesday’s ruling may lead the agency to demand back taxes from thousands of people, it only covers a three-year period and is limited to bitcoin.
While bitcoin is the most popular digital currency, there are dozens of others in a market that is now worth over $200 billion dollars. Moreover, Coinbase is just one of numerous exchanges where people buy bitcoin and other currencies.
The IRS, however, has so far not announced investigations into other exchanges. Meanwhile, the creation of the split-off currency, Bitcoin Cash (which is to be delivered to every Coinbase customer in January) is likely to trigger another round of tax complications.
In a small victory for Coinbase, the judge refused to order the exchange to provide certain personal information, including passport information or third-party communications. You can read the full ruling for yourself here (h/t The Verge).
A bitcoin transaction wastes as much electricity as it takes to power an American home for a week, and legendary coder Bram Cohen wants to fix that. And considering he invented the ubiquitous peer-to-peer file transfer protocol BitTorrent, you should take him seriously.
Cohen has just started a new company called Chia Network that will launch a cryptocurrency based on proofs of time and storage rather than bitcoin’s electricity-burning proofs of work. Essentially, Chia will harness cheap and abundant unused storage space on hard drives to verify its blockchain.
“The idea is to make a better bitcoin, to fix the centralization problems” Cohen tells me. The two main issues he sees in bitcoin are in environmental impact and the instability that arises from the few bitcoin miners with the cheapest access to electricity exerting outsized influence.
Chia aims to solve both.
Bitcoin uses proofs of work to verify the blockchain. That’s because it’s prohibitively expensive to make a fake blockchain as it wouldn’t have as much work demonstrated as the real one. But over time that’s given a massive advantage in collecting the incentives for mining bitcoin to those who operate close to low-cost electricity and naturally chill air to cool the mining rigs.
Chia instead relies on proofs of space in file storage, which people often already have and can use for no additional cost. It combines this with proofs of time that disarm a wide array of attacks to which proofs of space are susceptible.
“I’m not the first person to come up with this idea,” says Cohen, but actually implementing requires the kind of advanced computer science he specializes in.
After inventing torrenting in the early 2000s and briefly working on Steam for Valve, Cohen had been at BitTorrent building a new protocol for peer-to-peer live video transfer. But mismanagement on the business side caused the company to implode. Now it’s limping along, and Cohen says “it doesn’t need me day-to-day.” So while he’s still on the board, he left in early August to start Chia Network.
Cohen has teamed up with early bitcoin exchange Tradehill’s COO Ryan Singer and they’ve raised a seed round for Chia to ramp up hiring. Cohen wouldn’t say how much it had raised, laughing that, “I’m not sure how much we want to announce right now, but it was a very hot round.” The goal is do some early sales of Chia in Q2 2018, with a full launch of its cryptocurrency by the end of 2018, though Cohen says that’s a stretch goal.
Cohen is a brilliant technologist, but it will take more than that to convince people to switch over from bitcoin to Chia. He tells me the plan for Chia is “do some smarter things about its legal status and do a bunch of technical fixes that you can do when starting from scratch.”
It’s too early to guess how this will all play out, but at least someone is trying to address the ecological impact of cryptocurrency instead of just complaining about it. Cohen seems excited though. “It’s technically ambitious and there’s a big meaty chunk of work to do. I’ve done enough raising money and recruiting. Now for the real work.”
What, if anything, is Amazon planning to do in the cryptocurrency space? That’s the question after the cloud and retail giant was spotted registering three web domains relating to the field this week.
As first reported by Domain Name Wire, on Tuesday Amazon’s legal department secured the following web addresses: amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com.
The company already has amazonbitcoin.com, but that registration took place in 2013—the address now automatically forwards to Amazon’s main site, whereas the more recently-registered domains don’t serve up anything yet.
After Domain Name Wire broke the news of Amazon’s latest registrations on Wednesday, some guy called Byron Wiebe also registered amazonripple.com, which forwards to the website for the Ripple cryptocurrency.
It is highly possible that Amazon amzn only registered its cryptocurrency-related domains in order to stop other people registering them in this way, which potentially infringes on the company’s trademark.
As CNBC pointed out, Amazon Pay vice president Patrick Gauthier said only last month that the company has no plans to accept payments in virtual currency, due to a lack of demand. That’s entirely plausible, especially as bitcoin, the most popular cryptocurrency, is currently more lucrative as a speculative asset than as a tool for actually paying for stuff.
But how about that Ethereum-related domain? The second-biggest cryptocurrency is not appreciating in value like bitcoin is, and its underlying blockchain mechanism also has more uses, being touted as a repository for self-executing “smart contracts” and other tools for technical decentralization.
Joseph Lubin, one of Ethereum’s co-founders, said just last week that such tools could be used to build a decentralized competitor to Amazon, made up of “many different actors with different roles.”
But that’s more about blockchain technology than cryptocurrencies. Maybe Amazon’s move has something to do with mining cryptocurrencies in its cloud? As recent analyses have shown, cryptocurrency mining is a scarily energy-intensive activity, so perhaps the company has figured out some clever way to mine smarter.
This is just spitballing, though. Really, at this point only Amazon knows why it registered those domains, and—we have asked—it’s not telling.
Despite the Chinese government’s crackdown on initial coin offerings (ICOs) and cryptocurrency exchanges, local traders have invested in Bitcoin with a huge premium during its recent rally.
As Cryptocoinsnews previously reported, the Bitcoin price achieved a new all-time high at $5,920 last week, moving closer to the $6,000 region. Analysts including billionaire hedge fund investor Mike Novogratz predicted the Bitcoin price to surge even further in the mid-term, as an increasing number of institutional investors engage in cryptocurrency and Bitcoin trading.
When the price of Bitcoin was rapidly approaching the $6,000 mark and broke through $5,800, local investors and traders in China rushed to invest in Bitcoin, regardless of the imposition of a nationwide ban on cryptocurrency exchanges that requires leading Bitcoin exchanges such as OKCoin and Huobi to halt their services by the end of October.
A new Bitcoin ATH seems imminent. Chinese exchange OKCoin broke through $6000 already, Western exchanges all in $5800 range. pic.twitter.com/xK9lNdahyu
On October 13, Bitcoin trades in the Chinese market facilitated by OKCoin and Huobi were processed at over $6,013, as the demand for Bitcoin from local investors began to surge. While leading Bitcoin markets such as Japan, the US, and South Korea processed trades at around $5,800, Chinese investors were purchasing Bitcoin with premiums in the range of $200 to $300.
Reasons For the High Premium
Until late 2016, the South Korean Bitcoin market demonstrated a massive premium in contrast to major markets like the US, because of its limited liquidity. At the time, the South Korean cryptocurrency exchange market was dominated by Korbit and Coinone, and Bithumb, currently the world’s largest cryptocurrency exchange by trading volume, were yet to evolve into a major platform in the South Korean market.
Consequently, South Korean investors traded Bitcoin at a rate that was around 5 to 10 percent higher than the global average price.
In June, South Korean fintech company BitHolla CEO Alireza Beikverdi explained:
“Unlike China, which has massive mining operations taking advantage of an accidental government subsidy in the form of overinvestment in underused infrastructure and cheap energy, there is no mining activity to speak of. Therefore, Bitcoin and Ethereum must be imported from abroad, driving up the domestic premium in Korea.”
More to that, the strict capital controls and financial regulations imposed by the South Korean government which heavily restricts the outflow of capital from within the country to overseas markets contributed as a factor to the demonstrate premiums in the South Korean Bitcoin market.
Since then, the South Korean cryptocurrency exchange market has grown significantly. The South Korean Bitcoin market is the third largest in the world by trading volume, while its Ethereum market is the largest market internationally, with over 32 percent in market share.
As bitcoin surged to all-time highs Friday, a key announcement from a major U.S.-based digital currency exchange could be a driving factor.
Coinbase said Thursday it is rolling out instant bitcoin, ethereum and litecoin purchases of up to $25,000 from U.S. bank accounts. Previously, customers using their bank accounts to buy the digital currencies had to wait several days to receive them.
“One of the biggest pieces of feedback we get on Coinbase is ‘why does it take so long!'” Coinbase Co-Founder and CEO Brian Armstrong said in a Thursday tweet. “Rolling out instant buys.”
Before this rollout, bitcoin’s price could fluctuate a lot during that waiting time, making it a drawback for the regular investor.
“The Coinbase instant buy program is yet another step toward mainstream acceptance of Bitcoin,” said Brian Kelly, founder of BKCM LLC, a hedge fund managing digital assets, and a CNBC contributor. “This will make Bitcoin easier to use as a transactional currency and could have the effect of increasing liquidity. The added transaction volume should also support the price. “
The company has nearly 11 million customers, according to its website.
TechCrunch reported Thursday that the instant purchase feature rolled out Thursday to about 15,000 Coinbase users and will be available for “all eligible” U.S.-based customers by the end of the year.
Bitcoin has leaped 21 percent within the last 48 hours to a record high of $5,856.10, according to CoinDesk. With those gains, the digital currency has multiplied six times in value this year and has a market value of more than $93 billion. That’s larger than that of Goldman Sachs.
Bitcoin is a cryptocurrency and a digital payment system invented by an unknown programmer, or a group of programmers, under the name Satoshi Nakamoto. It was released as open-source software in 2009.
The system is peer-to-peer, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency.
Besides being created as a reward for mining, bitcoin can be exchanged for other currencies, products, and services in legal or black markets.
As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.
Hedge fund legend Mike Novogratz betting it all on bitcoin from CNBC.
Asked whether he thought Bitcoin was therefore a bubble, Novogratz said the “Blockchain revolution,” like railways and the Internet, would “change the way we live.”
“Yes, it’s a bubble, it’s going to be one of the great manias of all time,” he continued.
“Bitcoin happens to be the bellwether of this entire decentralized revolution, so it’s the easiest way people get gain exposure to it… Things like Ethereum I think will be the public utility of this new space.”
Signs of stability
Bitcoin prices remained relatively stable around all-time highs Wednesday, despite news that Russia was preparing to block access to cryptocurrency exchanges for its citizens.
Showing increasing resilience to political maneuvering, Bitcoin has managed to shake off wider-reaching moves by China, which saw an exchange ban and a halt on ICO operations in the country.
First it was The Pirate Bay, then Showtime was caught secretly using page visitor’s processing power to mine cryptocurrency as a form of alternative revenue.
It has led to some indignation from users of such sites, as well as worry and fear about the vulnerability of users who are visiting sites and staying on them for a long time. However, there are a few things that can be done to protect yourself.
An issue with secrecy
It must be stated that the reasoning put forward, along with an apology, from The Pirate Bay was that they saw it as an alternative to banner advertising, which is tricky for what is essentially an illegal website.
Many were happy with the idea of their processor being used, but not happy with the secret nature of it all.
What can be done?
If however you are not happy with the idea of being mined, secretly or not, there are a few ways to check if you are indeed a victim of processor pirates.
Check your CPU usage
Simply by opening your resource manager on your computer, and looking at the CPU usage, it can quickly become clear if there is indeed something sucking your processing power.
Additionally, if you have everything closed but CPU usage is still super high, then you may have a crypto mining malware problem.
Ad Blockers can help
Mining hijacking can occur simply by visiting certain sites, but there have been instances where infected adverts on sites have also led to this CPU pirating. Researchers at security software vendor ESET have explained this process.
Thus, running an ad blocker can put a stop to this. Additionally, ad blocking software can also filter out known types of in-browser miners. One such mining script is called Coinhive, which isn’t necessarily malware.
There is other malware
Besides from legitimate pirate mining software, there are more sophisticated forms of malwarewhich actively penetrates the system. These are delivered through infected image files or by clicking on links leading to a malicious site.
If one of these hits you, you should open up Task Manager and identify the process that is eating up all those compute cycles and terminate it from your resource monitor.
Japan’s Financial Services Agency (FSA) has issued operating licenses to 11 bitcoin exchanges, the regulator announced today.
This follows an amendment to the payment services law, which stated that all cryptocurrency exchanges should register with authorities by the end of September.
Passed in April, the new law established bitcoin as a legal payment method, and extrapolated security guidelines for cryptocurrency exchanges.
The licensing enforces certain operational requirements for the exchanges, including high standards for cybersecurity, the segregation of customer accounts and the verification of customer identities.
Seventeen applications are still in review, while 12 firms have closed their doors in light of the new regulations.
Local cryptocurrency exchange Quoine – one of the 11 firms to receive a license – said in a press release that it will work alongside regulators “towards the healthy development of the cryptocurrency industry within Japan and on a global scale.”
An FSA executive said earlier this week that it intended to foster “sound market development” by working with the exchanges.
Japan is uniquely proactive in its cryptocurrency regulations. Lawmakers have previously stated that this was driven by the now-notorious collapse of local bitcoin exchange Mt Gox in 2014, which led to the loss of millions of dollars in customer funds.
The news comes at a time of regulatory shifts in the broader cryptocurrency landscape. Earlier this month, China issued a blanket ban on fundraising methods involving token sales, or initial coin offerings (ICOs), and local cryptocurrency exchanges have indicated they will cease domestic trading following the ban.
South Korea has also stated ICOs are illegal as of today, as well as tightening the rules for exchanges.
Mexico, this month, will unveil proposed legislation aimed at regulating its fast-growing financial technology sector, including firms that use cryptocurrencies like Bitcoin.
The bill seems to be aimed at protecting customers, as well as spurring competition in this burgeoning industry. Mexico is also hoping, in this bill, to ensure financial stability and defend against money laundering and financing of extremists.
Massive potential growth in Latin America
Mexico will be joining a small list of countries, which include the UK and the US who have actively sought to regulate not only cryptocurrencies, but also fintech companies.
The hope for fintech companies is to try and crack a massive potential market as over half of Mexico’s 120 mln strong population are bank account-less.
“This legislation recognizes the need that a sector as dynamic as that of technological innovation needs a regulatory framework that allows authorities to mitigate risks and allow for growth in a competitive environment,” the bill draft says.
What’s in the Bill?
The Bill proposes to set out a clear set of rules pertaining to the running of fintech companies which will help reduce costs and drive competition in a sector that includes crowd-funders and payment firms.
Additionally, there will be a section aimed at regulating companies that operate with digital currencies, such as Bitcoin. There is not too much detail on this, but it does say a lot of it will fall to the central bank to referee such actions.
“The regulation is good news for all companies in this sector because … growth will be greater with clear rules,” said Luis Ruben Chavez, the founder of Mexican crowdfunding firm Yotepresto.
Massive Mexican growth
Mexico is a huge untapped market globally, and especially in Latin America where it leads the way.
In 2015, the number of fintech companies came in at about 50, while year to date in 2017 there are already 2401 known companies in the new industry.
Ethereum co-founder Vitalik Buterin is optimistic about the future of his blockchainplatform, sharing his predictions during a talk with AngelList founder Naval Ravikant at TechCrunch’s Disrupt SF 2017 event on September 18.
Despite the growing popularity of Ethereum and other technologies like it, a large majority of people still don’t know what blockchain is or what it does. However, once the technology does reach the mainstream, Buterin believes it will be able to take business away from major credit card companies. He sees this shift potentially taking place in the next “couple of years.”
Ethereum co-founder Vitalik Buterin believes the blockchain-based platform has the potential to rival financial institutions like Visa in scale. Before it can, however, it needs to increase the speed with which it can process transactions.
TAKING ON FINANCIAL INSTITUTIONS
Ethereum co-founder Vitalik Buterin is optimistic about the future of his blockchainplatform, sharing his predictions during a talk with AngelList founder Naval Ravikant at TechCrunch’s Disrupt SF 2017 event on September 18.
Despite the growing popularity of Ethereum and other technologies like it, a large majority of people still don’t know what blockchain is or what it does. However, once the technology does reach the mainstream, Buterin believes it will be able to take business away from major credit card companies. He sees this shift potentially taking place in the next “couple of years.”
Before Ethereum can compete with the likes of Visa and MasterCard, though, the platform will need to speed up. “Bitcoin is processing a bit less than 3 transactions per second,” Buterin explained to Ravikant. “Ethereum is doing five a second. Uber gives 12 rides a second. It will take a couple of years for the blockchain to replace Visa.”
According to Business Insider, the co-founder said he expects to see low-security financial prototypes revealed within the next year, which may signal the beginning of Ethereum’s ability to disrupt mainstream finance. That said, a few more years will be needed before their effectiveness can be proven.
FROM FINANCE TO CLOUD COMPUTING
Buterin’s thoughts on the capabilities of blockchain extend beyond finance and into the world of cloud computing. While he believes Ethereum has a solid chance at changing the financial world, Buterin is less optimistic about its effect on cloud services, such as Amazon Web Services (AWS).
The Swiss municipality of Chiasso is going to let residents pay their taxes in bitcoin, its mayor has announced.
The community, on Switzerland’s southern border with Italy, is vying with Zug to be the country’s cryptocurrency hub. Zug, which styles itself as “Crypto Valley,” launched a pilot last year in which it started accepting bitcoin payments for municipal services. The pilot was apparently a success, so Zug has kept the program running.
Chiasso—sorry, “CryptoPolis”—is going one further by accepting bitcoin for small tax payments, up to a value of 250 Swiss francs ($261).
“Chiasso is recognised internationally as an epicentre of a growing technological and economic growth for both the canton and in Switzerland,” Mayor Bruno Arrigoni said, according to local media. The move is apparently part of Chiasso’s drive to make up for contraction of the traditional financial sector after the financial crisis.
Zug’s scheme also caps bitcoin payments fairly low, only accepting them for a value of up to 200 Swiss francs. At the time of writing, one bitcoin is worth 4122.94 Swiss francs (and $4306.01).
While there may be something for these towns to gain by enticing cryptocurrency fans to set up shop on their turf, their caution makes a lot of sense too.
The value of bitcoin, along with other virtual currencies, has been particularly volatile in recent weeks, largely because of China’s cracking down on initial coin offerings (ICOs)—a trendy but risky form of fundraising that involves issuing new types of tokens—and possibly banning bitcoin exchanges altogether.
Litecoin was founded to act as a Bitcoin alternative to make up for its perceived shortcomings—it was developed to be “lightweight” and be more plentiful than Bitcoin. Litecoin also has almost zero payment cost and facilitates payments approximately four times faster than Bitcoin. Table of Contents Litecoin Introduction 1.Cryptocurrency Wallet Guide 2.How to Buy Litecoin 3.Mine Litecoin and Other Altcoins 4.A Better Investment: Bitcoin or Litecoin 5.Litecoin Wallet Clients 6.Bitcoin vs Litecoin 7.Invest In Litecoin 8.SegWit in the Wild 9.Coinbase Users 10. Second Largest Currency 11. Bitcoins in 8 Ways 12. The Purpose of Blockchain 13. Feathercoin 14. ICO 15. Understanding Cryptoeconomics 16. Cryptocurrency: The Ultimate Guide References
After Police seized 216 Bitcoins from an individual that was suspected to be involved in illegal activities with the digital currency, it was ruled by a South Korean court that the seizure was illegitimate.
The Suwon district court set a groundbreaking precedent in legitimizing the seizer, by ruling that Bitcoin and associated digital currencies are not subject to confiscation.
Sending a message to regulators
While South Korea is one of the more progressive nations towards Bitcoin and its legalization, as well as its regulation, this move by the courts could send shockwaves through regulatory bodies in the country as well as across the globe.
There are contrasting attitudes towards the digital currency, as China’s recent foray into its regulation has seen the socialist country take a hardline stance towards this innovative technology.
However, with the judiciary in Korea setting a precedent indicating its belief that Bitcoin should not be a confiscatable commodity, it could set a trend for many other nations to follow.
‘Cannot assume an objective standard value’
According to local reports from Kyunghyang Shinmun, it seems as if Bitcoin’s volatility may well be its saving grace in this matter, as the confiscation was deemed illegitimate because:
[it is]“not appropriate to confiscate Bitcoins as they cannot assume an objective standard value.”
Furthermore, the indication is that Bitcoin, as a digital currency, has no physical representation, and thus there is essentially nothing to be confiscated, according to the courts.
This also seems to suggest that the courts see Bitcoin as having a value, but it is an ever changing one, which could well mean they would be looking to instate certain rules surrounding digital currencies on their own.
The case in which those judgement arose from involved an individual who was charged with running an illegal pornography website. The site had many members, but the operator never reported the membership fees which, may or may not, have been directly collected as Bitcoin – or perhaps transferred into digital currency at a later date.
The value of bitcoin fell sharply Monday, not long after the cryptocurrency crossed the $5,000 mark on Friday. At one point, the price dipped below $4,400 in value, representing a drop of around 12% since the Friday evening high.
Ethereum, meanwhile, traded Monday morning at around $312, down around 20% from the $391 it commanded Friday. And Litecoin, another virtual currency that recently hit headlines due to its strong performance, was down around 23% over the same period.
Quoted by Coindesk, cryptocurrency analyst Ronnie Moas of Standpoint Research suggested that large traders had deliberately started dumping bitcoins in order to depress the price and then buy more of them.
Either way, this correction has to be viewed in the context of bitcoin’s rapid appreciation in value during 2017. At the start of this year, bitcoin was around the $1,000 mark.
The bitcoin ecosystem continues to attract significant investment. On Monday, Bloomberg reported that Sequoia Capital and IDG Capital were putting money into China’s Bitmain Technologies, which makes equipment for bitcoin miners and conducts its own mining of the cryptocurrency.
Bitcoin miners are essential hardcore data-processing operations that race one another to verify parts of the bitcoin blockchain, which is the currency’s distributed ledger of transactions. Whichever mining operation completes a block first gets fresh bitcoins as its reward.
Bitcoin has hit yet another all-time high as virtually all the top 50 cryptocurrency markets rally.
Data from Coinmarketcap and Bitcointicker shows Thursday post Bitcoin highs of $4,687 on Bitstamp, beating the previous record of $4,576 Aug. 29.
The latest move upwards resulted in a consolidated effort from the biggest altcoins tracked by Coinmarketcap, with 95 percent of the top 50 posting overall gains in the 24 hours to press time.
Bitcoin is continuing to gain as commentators increasingly put faith in a test of the highly significant $5,000 barrier in the short term.
Various figures have been extremely bullish on Bitcoin reaching $5,000 sooner rather than later, ignoring criticism that the virtual currency remains in a bubble and will ultimately correct downwards in a manner similar to previous price spikes.
Commenting on the current price action, Civic CEO Vinny Lingham suggested the mid-$4,000s was a “nice consolidation,” but for a crucial upwards of downwards move, some external influence was needed.
Bitcoin is consolidating nicely at these levels but seems to need a catalyst for a breakout or a retrace…
— Vinny Lingham (@VinnyLingham) August 31, 2017
Meanwhile, Ethereum (ETH) has also posted near-record highs as news comes of developers signing a deal with a Russian state-owned bank.
The partnership aims to increase Ethereum expertise in the country, as well as study suitable state-sanctioned use cases for Ethereum Blockchain technology.
The price of bitcoin is now trading at its highest level ever.
At press time, the average price of bitcoin across global exchanges was $4,703.21, a figure that was up roughly 4% from a previous high of $4,522.13 set on August 18.
The move comes as bitcoin prices edged up over the day’s session, beginning an upward ascent around 12:20 UTC. Since that time, the price of bitcoin is up more than $100, rising from $4,342 at the time.
Overall, the price of bitcoin is up from a daily low of $4,400. On the year, bitcoin is now up 350% from roughly $1,000 on January 1.
Elsewhere, the price of ether, ethereum’s blockchain token, was nearing all-time highs, reaching its highest total observed since mid-June.
The less than one-month-old digital currency Bitcoin Cash recently experienced a significant reduction in its mining difficulty following a difficulty adjustment. The code specifies that if not enough blocks are found in a certain period of time, a difficulty adjustment will occur.
As a result of this 60% reduction in difficulty, the cryptocurrency temporarily became more profitable than Bitcoin to mine. Bitcoin Cash, for a time, attracted nearly 40% of Bitcoin’s miners.
Because of the huge surge in hash power and the low difficulty, Bitcoin Cash’s network produced the requisite 2016 blocks very quickly, and now another difficulty adjustment has occurred. Bitcoin Cash is now much harder to mine and is less profitable than mining Bitcoin. Miners have now abandoned Bitcoin Cash in droves, causing block times on the network to exceed six hours.
Bitcoin Cash, was created in early August by developers who were unhappy with Bitcoin’s adoption of SegWit and its shunning of larger block sizes. Since both Bitcoin Cash and Bitcoin use the same proof-of-work to safeguard their transaction histories, both networks are now effectively competing for hash power as miners continue to mine the more profitable chain.
Bigger question looming
In November, the Bitcoin network is set to once again decide on an upgrade. At that time, the 2 MB blocksize of the SegWit2x agreement will be implemented. While the vast majority of miners and exchanges are apparently supporters of this, Bitcoin’s core development team is strongly opposed.
Since the 2 MB blocksize increase will be a hard fork, there’s a chance that Bitcoin’s core team and their supporters will continue mining the legacy chain after the upgrade occurs. That could result in two different networks competing for the “Bitcoin” name.
Meanwhile, Bitcoin Cash’s price has dropped to slightly below $600 from a high of $1,000. The price of Bitcoin, has maintained stability in the $4,000 to $4,500 range for several days.
One benefit of using bitcoin is the digital currency can be anonymous—its owners can move money around the world without revealing who they are. Well, in theory at least. In reality, bitcoin is less secret than people think.
The latest reminder of this comes via a report that the Internal Revenue Service is using software to unmask bitcoin users who have failed to report profits. According to a contract unearthed by the Daily Beast, the IRS is paying a company called Chainalysis to help identify the owners of digital “wallets” that users employ to store their bitcoins.
In a letter to the IRS, the co-founder of Chainalysis says the company has information on 25 percent of all bitcoin addresses and that it deploys millions of tags to help track and identify transactions. Here is a screenshot of a paragraph from the letter:
The decision by the IRS to license the software of Chainalysis, which is based in Switzerland with an office in New York, appears to be part of the agency’s larger campaign to target digital currency users who have failed to pay tax.
As Fortune reported earlier this year, the IRS claims only 802 people declared a capital gain or loss related to bitcoin in 2015. This is significant since the price of bitcoin soared from around $13 to over $1100 between 2013 and 2015, and hundreds of thousands (like millions) of Americans bought and sold digital currency during this time—in other words, there are many people who face bitcoin-related tax trouble, and the IRS is tracking some of them down.
There are indications, though, the IRS is focusing only on the bigger fish. For instance, in the agency’s ongoing legal battle with the popular digital currency exchange, Coinbase, the IRS recently agreed to limit its request for customer records only to accounts with transactions over $20,000.
Nonetheless, the IRS’s use of the Chainalysis software is likely to make some bitcoin owners uneasy. Meanwhile, on bitcoin forums, some users have expressed resentment against exchanges like Coinbase, Kraken, and Mt. Gox for allegedly storing wallets in such a way that analytic companies like Chainalysis or BitSeer can identify individual users.
The forum chatter also shows some bitcoin users are thinking of switching to other digital currencies like Monero that are harder to trace.
Finally, the existence of tools like Chainalysis doesn’t mean bitcoin users can’t be anonymous. Those who wish to keep their identity concealed can do so by maintaining their own wallet and avoiding exchanges that collect customer information.
Bitcoin’s rally is pausing, with the digital currency dipping below $4,000 briefly in early trade on Monday.
Bitcoin surged against the dollar last week, breaking through $4,000 for the first time two Sunday’s ago before peaking at $4,479.
However, after pausing for breath on Friday, traders have been booking profit over the weekend. As a result, bitcoin has been drifting lower against the dollar.
Bitcoin dropped below $4,000 a coin just before 8.00 a.m. BST (3.00 a.m. ET). But, at 8.57 a.m. BST (3.57 a.m. ET), the cryptocurrency has rallied slightly to $4,024.07, equivalent to a 0.8% drop against the dollar on the day. Despite the dip, the cryptocurrency remains near historic highs, as the 3-month price chart below shows.
Elsewhere in the cryptocurrency world, Bitcoin Cash, a new digital currency split off from Bitcoin at the start of the month, is dipping against the dollar after posting big gains over the weekend. Bitcoin Cash is down 5.3% to $681.53 at 7.55 a.m. BST (2.55 a.m. ET).
Ethereum, the second-biggest cryptocurrency after Bitcoin by market value, is up 5.1% against the dollar to $323.96 at the same time.
The world of cryptocurrency is not exactly a calm place. And for Coinbase, one of the hottest and most valuable startups in the sector, this week’s remarkable news around bitcoin put the company in the center of a raging storm.
The big offense for Coinbase, which operates a platform for buying and selling cryptocurrencies like bitcoin, was its decision not to support bitcoin cash — the new cryptocurrency that was spun out of bitcoin this week.
Many Coinbase users unleashed their wrath, accusing the company of being everything from a scam to a tool for the National Security Agency. Some threatened to sue. The $1 billion startup also lost users in droves, with 12-hour wait times over the weekend as users scrambled to transfer their bitcoins to competitors that would support bitcoin cash.
The angry reaction, and the risk of a big loss of customers, raised questions about the future of what has been one of the crypto world’s biggest success stories.
For now, though, Coinbase’s backers aren’t sweating it. And they say they don’t anticipate the drama having much of an effect on the startup, which has been raising money on terms that would value it at roughly $1 billion.
“There’s no one on the board or any investor who doesn’t completely back the point of view that we should err on the side of safety and trust,” said Barry Schuler, a partner with DFJ, an investor in Coinbase.
“From an investor’s point of view, we invested in Coinbase because they have made a voluntary commitment to be regulated,” Schuler said, “and to focus on being trusted and safe — as safe as you can be in an experimental environment like this.”
Though Coinbase didn’t participate in Tuesday’s currency launch, Schuler said Coinbase could change its policy as early as next week, depending on how bitcoin cash matures.
Another Coinbase investor, Fueled founder Rameet Chawla, even suggested that Coinbase may increase the strength of the original bitcoin down the line by establishing faith in the legacy currency.
That’s because Coinbase’s conservative approach may make cryptocurrency more accessible to potential users who are afraid to dabble in technologically complex digital currencies.
“They’re a huge net positive on bitcoin, making it really easy on people who are not early adopters,” Chawla said.
Mass exodus of coinbase users
With 9 million users and $20 billion exchanged, Coinbase has its hands on a lot of the digital currency floating around. And while investors support Coinbase’s decision to sit out the initial bitcoin split, many customers felt betrayed by the company.
A scan of the Coinbase community forums shows a host of angry topics such as “What if Coinbase is NSA tool to destroy BTC (bitcoin cash)?” and “Dear Coinbase, if you not release my funds in 1h I am going to sue you.”
Coinbase wouldn’t disclose how many users withdrew bitcoins in anticipation of bitcoin cash’s arrival. But things looked rough. Coinbase users experienced delays of about 12 hours on withdrawals over the weekend because of the number of people moving bitcoins.
Despite this, sources close to the situation said the company expected to see many people return to Coinbase while simultaneously storing newly acquired bitcoin cash in a different digital wallet.
“Ultimately, Coinbase is an exchange for buying bitcoin, but people are free to use their own wallets and take control of their wallets anyway they want,” Chawla said.
The ‘hard fork’
The introduction Tuesday of bitcoin cash was known as the “hard fork.” It resulted in a cloned currency with different technological protocols from those of the original bitcoin. The fork was a means of dealing with disagreements in the bitcoin community over how to evolve the technology to handle increased demand.
The hard fork followed a process similar to cell division in biology, in that the two currencies were the same at the point of division but will pursue different paths moving forward.
Users storing their bitcoin in a digital wallet that accepts bitcoin cash on Tuesday found themselves with a bitcoin cash coin for every bitcoin they had at the time of duplication. Bitcoin and bitcoin cash do not have the same value, however, so duplication is not the same as a doubling in worth.
Why Coinbase sat out on bitcoin cash
In a statement on Twitter on Tuesday, Coinbase CEO Brian Armstrong wrote that the company was agnostic to which currencies its users trade and that it was not opposed to adding new assets in the future.
“Our goal is to be the safest, most trusted and compliant, and easiest to use,” Armstrong wrote. “Not the first to market with new assets. Especially at scale, it takes time to ensure any new asset we add is well tested and secure.”
Generally speaking, Coinbase isn’t quick to take on new currencies. Founded in 2012, the exchange still trades only bitcoin, ether, and litcoin — all digital currencies the team has deemed stable and technically secure enough for an amateur investor to put money into.
We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value.
So it was of little surprise to those close to the company when it issued a statement last week advising that customers who want to access both bitcoin and bitcoin cash would need to withdrawal from Coinbase by this past Monday.
“We have no plans to support the Bitcoin Cash fork.” David Farmer, the director of business development at Coinbase, wrote. “We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value.”
Users were irked because Coinbase’s decision not to accept bitcoin cash meant that anyone with bitcoin stored in Coinbase’s digital wallet would not receive what many saw as free bitcoin cash.
Others were concerned that Coinbase would secretly keep the bitcoin cash that was generated Tuesday. In a statement last Friday, however, the company denied that this would happen.
“Coinbase would not keep the bitcoin cash associated with customer bitcoin balances for ourselves,” the company posted on Twitter.
Investors like Schuler, however, saw the Coinbase’s trepidation as part of its core business strategy.
“The whole cryptocurrency-blockchain space is a bit like the Wild West right now — just like the beginning of the internet,” Schuler said. “But slowly and surely, it’s becoming institutionalized. Coinbase represents that — being legitimate and offering as much trust and safety as possible.”
As recommended in a lately-published article in Seeking Alpha – Litecoin or known as “the silver to Bitcoin Gold” could be one of the best digital currencies investment asset to look out for.
If you are keeping an eye out for the recent development of digital assets prices, almost everybody noticed how Bitcoin (BTC) surged with no stop against the US Dollar to not reached heights before. As rumors, theories and analysis spread around it is predicted by many that Bitcoin, the first very famous cryptocurrency is near of reachiing mainstream adoption.
But do not be confused that only Bitcoin is a good option to buy into. That shows just how promising digital currencies could be and one more reason why to spread your portfolio.
Following Bitcoin, as a Second-option many point their finger towards Ethereum which with a 3,000 percentage point growth this year climbed its way as the second-largest digital currency in the market. As a factor that hoisted up its fame is that it can run Smart Contracts allowing to create dApps and progress blockchain technology.
The Silver in the community – Litecoin, by Geoffrey Caveney writer in Seeking Alpha should be considered as the third in position following the big two. His comment relate with the topic that keeping in mind it is one of the only three (Litcoin, Ethereum, Litecoin) that is being supported to be traded in the could-be most famous exchange platform right now: Coinbase.
“There are at least a half dozen other digital currencies out there that are about as big and well-known as litecoin, including several that have larger total market caps at the moment, so it’s a big deal that only litecoin is supported by Coinbase along with bitcoin and ethereum,” Caveney writes. But Coinbase’s approval is not the only reason to consider buying Litecoin, he adds.
So now for some time, taking over the media and crypto community was the activation of the Bitcoin scaling upgrade known as “Segregated Witness or SegWit“. This subject was around in the crypto world for more than 2 years now and it did get quieter when the SegWit activation was ‘Locked-in’ as it was part of the proposed SegWit2x. But there were those that did not follow this event so a ‘hard-fork’ was chosen and it activated on August 1. It was when Bitcoin Cash (BCH) was created with the Split of Bitcoin Blockchain Network.
But even that it was a code written and meant for the Bitcoin Blockchain, the firs to try it and activate it was Litecoin in May. The best side was that there was no war between the community so no split was needed and everybody was behind 100% the upgrading change.
This as supported by Caveney shows that the following and smaller cryptocurrency is more adaptive to upgrades and improvements being the first one to do it than the Gold-counterpart at which the community had to be parted and the drama continued.
Analyzing its Roadmap, you will eventually see how clear Litecoin Future is and for what of an example it should be taken. It is on its way of adding Lightning network [which will improve the scalability of transactions] and investigating anonymous smart contracts.
So while Bitcoin is dominating the crypto space at the moment, Litecoin is also worth paying attention to.
“A small slice of litecoin, say half of 1% of your portfolio, is worth considering with the slice of profits you may be taking on your bitcoin right now,”
In the last 24 hours Litecoin has increased 3.32 percentage points and it is being traded at the $44.69 level against the US Dollar with a $2,345 billion market cap. (from coinmarketcap)
Jeremy Gardner was returning from a safari in South Africa — where he flew out to attend AfrikaBurn, a regional Burning Man festival — when he came into cell service. He checked Twitter, where he follows other bitcoin watchers, to see how his investments were doing.
“I saw that bitcoin had broken like $2,500 — all the crypto assets had exploded in value,” Gardner told Business Insider. “And all of a sudden, my net worth in five days had doubled in value. That, to me, was nuts.”
Created in 2008, bitcoin is a new kind of payment system that allows people to buy things and send money with anonymity. There are no banks or middlemen. Transactions are recorded on a digital ledger called a blockchain.
Cryptocurrencies (of which bitcoin is the most popular) have been on a tear in 2017. Bitcoin surged in value from about $200 per coin in 2015 to above $4,000in August.
People like Gardner buys assets, called tokens, with the expectation that their value will go higher. At age 25, Gardner is a self-made millionaire.
“By dedicating my life to crypto assets and blockchain technology, I’ve made more money than I would have ever expected to make in my entire life — by a long shot,” he said.
He dropped out of college (twice), works part time at a venture-capital firm that invests in cryptocurrency-related companies (for a $0 salary), and travels the world evangelizing bitcoin.
In 2013, a friend offered to buy Gardner some bitcoin in exchange for cash. He’d been following the controversy around Silk Road, an online marketplace that allowed people to use bitcoin mostly for “buying drugs off the internet and speculation,” according to Gardner.
It piqued his curiosity, and he bought in, turning his gains back into cash as fast as he could.
“There was this realization that I could — with just an internet connection— exchange value with anyone in the world who also has an internet connection,” he said. “No longer did I have to rely on a centralized intermediary, a troll under the bridge, such as a bank or a government.”
He turned most of his savings and stock holdings into cryptocurrency investments. Over a few months, Gardner became a true believer, branding himself a “bitcoin booster” on Twitter. In 2014, he founded the Blockchain Education Network, a network of cryptocurrency clubs at universities around the world.
Over the past few years, Gardner has planted himself firmly at the center of the global cryptocurrency community. In 2013, he launched a startup, Augur, a market-forecasting tool that runs on blockchain. The company raised $5.3 million in a crowdfunding campaign in 2015.
Today, he works a “fairly full-time gig” at Blockchain Capital, helping the firm source new investments in cryptocurrency-related companies and then advising those companies. His role as an entrepreneur-in-residence does not pay, but he receives “carry,” a share of the profits that the firm makes on investments. He’s also working on another startup in stealth mode.
As the value of bitcoin and other cryptocurrencies rises, Gardner’s net worth has climbed. He declined to share how much money he has made investing in digital currencies.
“For me, the price increases are kind of like ‘told you so’ moments. Like, I knew this was going to happen,” Gardner said. “It’s obviously cool when it happens very quickly, but every time it goes up really quickly, I expect it to go down very quickly … I’m in this for the long term.”
Residents of the Crypto Castle mingling during a holiday party.Melia Robinson/Business Insider
His investment gains subsidize his living in San Francisco, where he shares a three-story house with a half-dozen other tech entrepreneurs. The home, known among tenants as the Crypto Castle, is a landing pad for people working in cryptocurrency-related technologies.
“Over a half-dozen people in the time they’ve lived in my house have become millionaires as a result of crypto,” Gardner said.
He travels most weekends in a month to cities like New York, Los Angeles, Miami, and Hong Kong. When asked what his biggest living expense is, Gardner said, “Alcohol.”
“As I’ve seen my wealth grow, it’s important to me that I give back to this industry that’s given me so much,” he added. “So when we go to conferences, I’ll bring a bunch of people out and buy bottles at the club, pay for dinner and stuff.”
Gardner said coming into wealth had created a new set of challenges. His investments are split into several cryptocurrencies, so he has to pay closer attention to where his money is and how it’s managed, he said. He no longer attends networking events for cryptocurrency entrepreneurs because he will be bombarded with pitches and made uncomfortable.
There’s most likely a bubble in the market for cryptocurrencies, and some speculate it could burst. Gardner is stockpiling cash so he can buy up tokens when that happens.
Gardner believes mainstream adoption is only a matter of time. He expects bitcoin will reach a value of $10,000 per coin in the next five to 10 years.
“We’ve been told that it’s going to die so many times. And yet here it is, stronger than ever. I think there’s a certain sense of vindication if you were investing in this technology and people were calling you stupid for a long time,” Gardner said. “We’ve gone from a point where the success of blockchain was unlikely or infinitesimally small and is now guaranteed.”
Bitcoin cash’s surge above $500 today is changing more than just the the net worth of its investors and users.
The rising price is also creating the incentive for miners to dedicate computing power to the bitcoin cash blockchain, one that could find them moving away from bitcoin. With the new push, bitcoin cash miners are making around 2% more mining on bitcoin than they do on bitcoin cash.
And that spread could further increase with an upcoming adjustment on bitcoin cash that will make it even easier to mine.
Block 479,808 (set for this weekend) will likely trigger a difficulty adjustment downwards 50%, and if the prices of bitcoin and bitcoin cash stay the same, this means miners will make almost double on bitcoin cash what they would on bitcoin.
However, even with this threshold met, not all things are equal on both chains.
The bitcoin blockchain charges higher fees on transactions, so miners must take into account the extra 1.5 BTC per block on bitcoin (about $6,000 USD). By comparison, bitcoin cash has very low fees (typically under $50 USD).
Lastly, depending on the block times, bitcoin currently gets the 100 confirmations needed to spend the mining reward faster than bitcoin cash. (Currently, bitcoin takes about 17 hours and bitcoin cash takes about 34 hours).
Further, combined with the higher liquidity, bitcoin may still emerge as more attractive to mine at the moment.
Only a handful of Bitcoin wallet platforms and exchanges are supporting Bitcoin Cash depositsand withdrawals. Bitcoin users who received Bitcoin Cash (BCH) after the Aug. 1 hard fork can utilize secure wallet platforms from Trezor, BTC.com and BitGo to safely store BCH.
The Aug. 1 hard fork execution of BCH had minimal impact on the Bitcoin network. Since then, Bitcoin has been on an upward trend, achieving new all-time highs amidst rising demand from institutional investors.
However, Bitcoin Cash has struggled to demonstrate consistent growth.
Many Bitcoin exchanges and wallet platforms have expressed their reluctance in supporting BCH due to technical difficulties and issues.
As Cointelegraph previously reported, even Trezor, which released a beta BCH wallet immediately after the fork was completed, explained that the integration of BCH was significantly harder than the team expected.
In an official blog post, Trezor revealed some of the difficulties its development team faced:
“On the day of the fork, however, we started noticing odd things happening. During the maintenance of the BCH Bitcore server, we witnessed how the server started losing addresses and transactions. Addresses had negative balances, which should not be technically possible. This caused the initial delay in deployment, as we could not release a Wallet that would use corrupted data.”
So, which Bitcoin wallet platforms support BCH?
As of current, BTC.com, BitGo and Trezor are supporting BCH deposits and withdrawals. Users that have been credited with Bitcoin Cash upon the execution of its hard fork can safely store BCH on the three wallets.
BitGo has integrated a user-friendly interface into its main cryptocurrency wallet platform due to overwhelming demand from BCH holders. Because many wallet platforms and exchanges like Coinbase refused to provide support for BCH, Bitcoin users that were credited with BCH requested prominent wallet platforms including BitGo to integrate support.
“Due to strong customer interest, BitGo will enable full support of Bitcoin Cash. You’ll soon find a new coin in the BitGo interface and be able to fully send and receive BCH from your BitGo wallet,” said the BitGo team.
BTC.com was one of the first wallet platforms in the industry to integrate full support for BCH users. Similar to BitGo, BTC.com developed a specific user-interface for BCH users. The BTC.com wallet
“As of Aug. 4, 2017, both current and new BTC.com users can send, receive and store Bitcoin Cash in the BTC.com Bitcoin Cash wallet. The BTC.com Bitcoin Cash wallet is currently available as a web wallet, and can be best accessed from desktop,” revealed BTC.com.
Why were wallet platforms hesitant in providing support for BCH?
The Trezor development team, the operating team behind the most secure Bitcoin hardware wallet, best explained in its blog post as to why many Bitcoin wallet platforms including Coinbase were hesitant toward providing full support toward BCH.
During the roll out of Trezor’s BCH beta wallet and the launch of the full BCH wallet, Trezor struggled with bugs that led to the disappearance of transactions on user wallets.
Although the bugs were fixed later on through extensive investigation and development, Trezor noted that such bugs would not have transpired if the team had enough time to test BCH and the integration process.
“It is the lack of time to test applications, to discover and fix mistakes. If more time was available, we would have caught this bug during testing,” said Trezor.
A private Swiss bank is expanding a digital asset management service it launched earlier this summer to include new cryptocurrencies.
Falcon Private Bank, as previously reported by CoinDesk, revealed that it would allow its customers to buy and hold bitcoin within their accounts through a partnership with brokerage service Bitcoin Suisse. The launch was said to come after consultations with Swiss regulators, including the Swiss Financial Market Supervisory Authority (FINMA).
Now, that product line is expanding to include ether, litecoin and bitcoin cash. Customers of the bank will be able to start buying and holding those cryptocurrencies from August 22, according to today’s announcement.
It’s a notable development, given that the initial service was brought online just over a month ago, marking the first time a traditional bank has moved to offer cryptocurrency services to its clients. As of last year, Falcon Private Bank had more than $14 billion in assets under its control.
“Falcon Private Bank was the first bank to offer bitcoin directly to its clients, and thus created history,” Bitcoin Suisse CEO Niklas Nikolajsen said in a statement. “Their decision to follow up by adding ether as well as other crypto-assets has made them the go-to private bank for crypto-asset holders and investors.”
At the time of its bitcoin service launch, Falcon also moved to install a bitcoin ATM in its Zurich headquarters.
There are innovations peppered throughout history that have changed human culture beyond recognition. One such innovation was the adoption of agriculture.
Prior to this adoption, the great thinkers within society struggled with how to determine when to break camp and move to more fruitful lands, how to limit the size of a village so that sheer numbers did not quickly deplete the available food in a new area, and how to design lodging so that could be quickly dismantled for a sudden move.
Imagine how these great thinkers must have struggled to comprehend a world in which the village never moved; where the size of the village was inconsequential; and where lodging was constructed of immovable stone. There would be nothing in their contextual understanding of their culture that would allow them to comprehend the end product of the emerging new world.
I believe that the blockchain is, even now, ushering in a new economic and social paradigm that will rival, if not exceed, the impact that agriculture had in human society.
The idea that has clouded the waters for many is the idea of “decentralization.” There has been much hype for dozens of years about the mind bending potential of decentralization but little if nothing has come of it. The reason is that no-one has been able to solve the problem of distribution required to power these decentralized system.
Distributed, decentralized systems have an inherent power that literally obsoletes centralized systems. this is obvious even to the most casual observer. We have known this for decades. It was not until the arrival of the blockchain, however, that we had a tool capable of melding “decentralized” and “distributed” into a single unit within which no central authority whatsoever was necessary. The distributed ledger, maintained by no-one, accessible to all and validated by consensus is the tool the world has been waiting for.
Those who understand this tool see immediately the absurdity of words like “bubble,” “investment,” etc. when applied to cryptocurrencies. These thought leaders use bitcoin to buy and sell and those who use bitcoin exclusively as a currency and use no other currency – and I personally know dozens who do so – could care less about what bitcoin is worth in dollars.
These people see, and have seen for some time, that the old paradigm constructs are meaningless in this new world.
It is like the first pueblo cultures being warned by their past sages that they will perish in their stone houses when it is time for the village to move. They understood that the concept of “moving” had no meaning in their new world.
Likewise, what people see as a bitcoin “bubble,” from the perspective of the new paradigm, is merely the predictable and systematic devaluation of fiat currencies that will continue, with obvious ups and downs, until all fiat currencies reach the zero point.
As the relative value of bitcoin temporarily drops, they will point to this as proof if their understanding. It won’t matter. The reality if this new world is what it is. Those who understand will be the leaders of this new world.
Sometimes, with all the buzz around women’s empowerment, it’s easy to forget just how new that concept is in the world of finance. American women could not legally own independent bank accounts until the 1960s, nor could women in the United Kingdom until 1975. Still today, millions of women throughout the developing world don’t have access to institutional financial services because cultural stigmas linger long after the laws on the books recognize women’s rights.
According to the World Bank’s Global Findex database, women in the developing economies are 20 percent less likely to have an account at a financial institution, and often even accounts under their names are de facto controlled by male relatives. Roya Mahboob, one ofAfghanistan’s leading tech entrepreneurs, overcame this dilemma by paying female employees in bitcoin.
According to Forbes, one employee with a violent and abusive husband who confiscated the employees’ money was reportedly able to use secret bitcoin savings to file for a divorce. The early bitcoin advocate Mahboob was deemed one of the 100 most influential people in the world by Time in 2013. Since then, she’s been busy supporting women technologists across Afghanistan, even sponsoring the all-girls robotics team that recently overcame controversial visa restrictions to win second place at a competition in Washington D.C.
Meanwhile, Mahboob’s Kabul-based nonprofit Digital Citizen Fund has enrolled 9,000 women and girls in educational programs covering topics like blockchain technology, bitcoin and Ethereum.
“We helped 100 women start their own businesses,” Mahboob told International Business Times. “The next step is we are going to have a bitcoin conference in Afghanistan so we can showcase their projects.”
The price of bitcoin broke through $4,000 per coin for the first time on Sunday and is posting new records on Monday.
Bitcoin crossed the $4,000 mark at close to 1.00 a.m. on Sunday. It has kept rising on Monday, reaching an all-time high of $4,311.12 per coin at close to 2.30 p.m. BST on Monday.
Iqbal V. Gandham, UK MD of trading platform eToro, said in an emailed statement: “Bitcoin hitting $4,000 is another milestone in long list of big moments the cryptocurrency has witnessed in recent weeks. Following a fall to $1,800, it has come back strongly and relatively steadily. This is encouraging.
“Furthermore, the ecosystem is also getting stronger. You now have more places to spend Bitcoin, more regulators thinking about the right infrastructure, and more investors learning about the asset. Speculation is rightly moving away from price and focusing on use cases.”
Bitcoin has been on an incredible rally this year, up over 300% since the start of the year. The digital currency only passed $3,500 for the first time earlier this month.
Elsewhere in the cryptocurrency space, Bitcoin Cash, the new cryptocurrency that was split off from bitcoin at the start of the month, is also rallying strongly.
Bitcoin’s foray into record territory continued Tuesday as the cryptocurrency reached nearly $3,500 a coin. Early buying propelled bitcoin to a high of $3,486 before sellers managed to push it down to $3,435, up 1.34%.
Bitcoin survived the August 1 “fork” that split it in two, seeing only minimal losses when some were predicting a doomsday scenario. Selling on that day dropped bitcoin to a low of $2,643. It has rallied about 30% since its August 1 bottom.
As for how high bitcoin can go, Sheba Jafari, the head of technical strategy at Goldman Sachs, said back in late July that the cryptocurrency had the “scope to reach 3,691.” Jafari has been spot on with her bitcoin call, earlier predicting a big drop was coming.
Dennis Porto, a bitcoin investor and Harvard academic, told Business Insider that over the long term he had noticed bitcoin’s price was following Moore’s law, a first for a technology’s price, and said he thought bitcoin could reach $100,000 as long as that continued.
“This poses a unique opportunity for investors: Whereas it was difficult to invest in circuits or internet speeds, it is easy to buy a bitcoin,” Porto told Business Insider.
On August 1st, 2017, Bitcoin network hard forked as of block 478559. This was discussed in detail in my previous articles on the make or break bitcoin event and latest developments. As expected the event went out smoothly forking out the parent blockchain into two, bitcoin(BTC) and Bitcoin Cash (BCC or BTH). Now let us discuss a few interesting points about the new kid in town, the Bitcoin Cash.
Why Bitcoin Cash Is Not Tradable In Some Exchanges Now
The Bitcoin blockchain had forked apart, yet only few exchanges are allowing Bitcoin Cash in a tradable format. If you were holding before August 1st, you are owning Bitcoin Cash as well. But the catch is the tradability depends on the exchange where you trade. For example Bitfinex allows trading but Coinbase or Poloniex are yet to support Bitcoin Cash. So the bottom line is the overall liquidity is really low which makes the new coin heavily volatile. In the last 4 days, we have seen a high of nearly $1000 to a low of $200.
On August 3rd Poloniex came up with the below update
We will be crediting users who had BTC in their account balance at the time of the fork with matching BCH. We expect this to occur on or before 8/14/17. Keep in mind that we have not yet determined if we will be listing BCH as a market on Poloniex nor can we commit to supporting BCH withdrawals right away. The ability to withdraw BCH will depend on network stability which is completely outside of our control.
On August 5th Coinbase has come up with below update:
In the case of bitcoin cash, we made clear to our customers that we did not feel we could safely support it on the day it was launched. For customers who wanted immediate access to their bitcoin cash, we advised them to withdraw their bitcoin from the Coinbase platform. However, there are several points we want to make clear for our customers:
1. Both bitcoin and bitcoin cash remain safely stored on Coinbase.
2. Customers with balances of bitcoin at the time of the fork now have an equal quantity of bitcoin cash stored by Coinbase.
3. We operate by the general principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events.
Coinbase, one of the world’s largest (if not the) largest cryptocurrency exchanges, has reversed its stance on Bitcoin Cash and said it will introduce support for the fork next year.
Coinbase was among numerous exchanges to opt out of trading Bitcoin Cash after it came into existence on August 1 on the grounds that it wasn’t proven or safe. Beyond refusing to facilitate trading, Coinbase also said it wouldn’t allow customers storing original Bitcoin on its platform to claim their Bitcoin Cash entitlement. Those who wanted it were told to remove their coins and go elsewhere to do that.
But now the company — which was started by former Airbnb engineer Brian Armstrong (pictured above) and is reportedly raising funding at a $1 billion valuation — has changed its stance slightly. It told customers via email that it will introduce “support” for Bitcoin Cash by January 1.
“Once supported, customers will be able to withdraw Bitcoin Cash. We’ll make a determination at a later date about adding trading support,” Coinbase said.
In other words, let’s see what happens before we commit to trading
That’s almost certainly a response to anger from Coinbase customers, who threatened to move their coins elsewhere and, in some cases, take legal action over their Bitcoin Cash entitlement. (Tl;dr people like free stuff, especially people who are into crypto.) It is unclear exactly what impact this had on the Coinbase business, but signs aren’t great. One analytics firm estimated that its cold storage reserves dropped to half of their previous level following customer withdraws.
Yet, despite that, a number of Coinbase investors told Business Insider that they aren’t overly concerned about the pushback, while the overall future of Bitcoin Cash itself is unclear. Principally that’s because the fork has the same mining difficulty as Bitcoin, but a smaller fraction of its hashrate.
Right now, Bitcoin Cash became the third largest cryptocurrency based on total coins in the market on day one, but it’s $7 billion market cap trails Bitcoin ($44 billion) and Ethereum ($21 billion) by some way. Its situation may have changed by January, too, while also Coinbase has tended to take a conservative approach to bringing new currencies on.
Right now it offers trading for Bitcoin, Ethereum and Litecoin — the latter of which was only added this past May despite gaining significant attention in 2013. Indeed, Litecoin’s founder had been director of engineering at Coinbase for nearly four years before leaving this summer — that gives some insight into how stringent its policy is.
Bitcoin cash, the offshoot of cryptocurrency bitcoin that was created yesterday, is now worth $7.6 billion, according to data provider Coin Marketcap. That pegs the value of all the bitcoin cash in circulation at 17% of bitcoin’s total market value of $44.4 billion. This makes bitcoin cash the third most valuable cryptocurrency, behind bitcoin and ethereum. It trades under the BCH symbol on most exchanges, while bitcoin retains BTC.
Bitcoin cash’s vault up the valuation charts can be explained by its provenance as a fork of bitcoin—think of it like the splitting of an amoeba in two. The market value of all the coins in circulation—usually referred to as the “market cap” in cryptocurrency jargon—is calculated by multiplying a coin’s price by the total supply of coins in circulation. When bitcoin cash splintered off from bitcoin, it also inherited the supply of coins in circulation. In other words, there is roughly the same amount of bitcoin cash in circulation as bitcoin, and both cryptocurrencies each currently have 16.5 million units in circulation.
There are slightly more bitcoins in circulation than bitcoin cash—a difference of 474 coins—because when bitcoin cash forked, there was a period of several hours when no new bitcoin cash blocks were mined. In the meantime, bitcoin miners continued to find blocks, introducing new coins to the circulating supply.
What exactly happened on Aug. 1?
A chain split is a slow and confusing event, even with a deadline. Bitcoin cash had a much publicized deadline of Aug 1, 12:20 UTC (or 8:20am US Eastern time) for the split to occur. Yet it wasn’t until hours later that the split actually took place.
The reason for this confusing state of affairs is as much about semantics as technicalities. Firstly, the bitcoin cash software uses a particular calculation for time called “median time past” that’s based not on clock time but on the number of blocks mined after the 12:20 deadline. Since there is an element of chance that determines when exactly a block is mined, experts could only estimate when the bitcoin cash software would kick in. In practice, this meant that the bitcoin cash software would only activate about an hour after 12:20 UTC, which was the case.
Once bitcoin cash was activated, the bitcoin cash blockchain stopped growing for several hours, while the bitcoin blockchain continued to add new blocks as normal. This activation happened at 12:37 UTC when both blockchains had just mined block number 478,558—this would be the last common block shared between bitcoin and bitcoin cash. All future blocks would send the coins on their independent trajectories.
There was confusion as the bitcoin cash blockchain stalled at block 478,558. What would normally happen is that a new block would have been mined—478,559—in about 10 minutes. But as hours went by, it became clear that not enough miners were committing processing power to the new blockchain to discover a new block. This was because the new chain also inherited the difficulty threshold for finding a new block from the bitcoin blockchain, meaning a massive amount of processing power would be required.
At this stage, although the chains have split, the new chain didn’t yet have any new blocks, so was technically simply a stalled version of the bitcoin blockchain. Most observers in the bitcoin world thought it would take hours, or even days, for miners to devote enough processing power to the bitcoin cash blockchain to discover a block.
But around six hours later, ViaBTC, a Chinese mining pool based in Shenzhen that has vocally supported bitcoin cash, added block number 478,559 to the bitcoin cash blockchain. This block was 1.9 megabytes in size—nearly double the maximum size allowed on the bitcoin blockchain. Compare this to the same block on the bitcoin blockchain, which coincidentally was also mined by ViaBTC, but was only 272 kilobytes in size. Subsequent blocks, however, have been well below 1 MB, reflecting the small number of transactions on the new blockchain.
Stock split or dividend?
Two metaphors from the traditional equity markets have been used to describe the creation of bitcoin cash: a stock split or a dividend. But there are good reasons to think that bitcoin’s split is not like a stock split at all, as this CoinDesk piece suggests. For starters, a stock split doesn’t change the assets’ value; it simply adjusts the quantity and therefore price of the stock on the market. An increase in the number of stocks leads to a commensurate drop in price, without changing the fundamentals of the company in question.
Bitcoin’s fork doesn’t split existing units of bitcoin—in fact, the bitcoin price has remained more or less the same throughout (which could be seen as a bullish vote of confidence in the cryptocurrency’s continued supremacy). Neither have any new units of bitcoin been created by the fork.
Instead, what happened is more like cloning. That’s because anyone who held bitcoin before the split would now also hold the equivalent amount of bitcoin cash. This makes the bitcoin fork more like a dividend: investors who held on to bitcoin and weren’t scared off by the fork were now credited with an equal amount of bitcoin cash.
The ethereum example
A major cryptocurrency forking, and the market supporting both resulting coins, isn’t as weird as it sounds. This already happened with ethereum in July 2016, when a philosophical disagreement among ethereum holders led to a hard fork, creating ethereum and “ethereum classic.”
Getting bitcoin cash
One way to get bitcoin cash is to buy it. It’s now trading on several major exchanges (here’s a list), with the bulk of trading volume taking place on Kraken and Bittrex, according to Crypto Compare.
The other way to get bitcoin cash is to claim it from any bitcoin holdings you owned before the fork. In theory, it’s simple: All private keys—basically the password to unlocking bitcoin holdings—are identical on both the bitcoin and bitcoin cash blockchains. This means you use the same private key to access funds on both chains. But in practice, this can be tricky.
The most reliable, though fiddly, method is to run a bitcoin cash “full node.” This is software that downloads the entire bitcoin cash blockchain , which is around 126 gigabytes, and also checks the validity of live transactions on the bitcoin cash network. Import the private keys from your existing bitcoin wallet to the wallet linked to the bitcoin cash full-node. You should then be able to access the new bitcoin cash funds. Check out the detailed instructions, and several other methods, including hardware wallets and paper wallets, in this Bitcoin Magazine piece.
Some exchanges also automatically credit pre-fork bitcoin holders with bitcoin cash. These include Kraken, Bittrex, and Bitfinex. This seems simple, but there can be several drawbacks. You must rely on the exchange to credit the new coins, which can be a slow process, and you may be unable to withdraw the new funds immediately, as Kraken users are currently experiencing.
Some exchanges also apply a discount to the amount of bitcoin cash that’s credited, like Bitfinex, which offers 0.85 bitcoin cash for every bitcoin. The discount was applied because the exchange claimed customers were manipulating its peer-to-peer margin financing system to inflate the amount of bitcoin cash they would receive.
What happens next?
Bitcoin cash is now, for all intents and purposes, an asset independent of bitcoin. It must develop its own ecosystem of developers, exchanges, and startups in order to flourish.
Bitcoin cash’s price will be an important indicator of its future potential. If it is indeed what bitcoin ought to be—a payment system with a large transaction capacity, as its advocates argue—the market should value it above bitcoin at some point in the future.
Another important indicator will be the amount of hash rate or processing power that miners commit to bitcoin cash. There isn’t a data source for the hashrate on the bitcoin cash network yet, but we know that miners are crunching 6.4 million terahashes per second on the bitcoin network. That consumes an estimated 15 terawatt hours of electricity a year, putting the bitcoin network’s consumption between Turkmenistan and North Korea, if it were ranked with countries.
If miners abandon bitcoin cash because mining it turns out not to be profitable, then bitcoin cash could wither away. As one expert observer of the fork, Andrew Chow, who developed the widely watched BTC Fork Monitor, told me, if that happened, the new chain would simply be “dead.”
I am utterly fascinated by the recent, furious emergence of “Bitcoin Cash.”
For the unfamiliar, it’s a so-called fork of the original Bitcoin cryptocurrency that launched earlier this week and sent crypto-investors into a tizzy, trading the virtual coins up to hundreds of dollars each. At the time of this writing, one unit of Bitcoin Cash is valued at about $425—an impressive sum for something that’s existed for all of two and a half days.
Like a world religion, Bitcoin Cash was created from conflict—a rift in the original Bitcoin community over technical details pertaining to the structure of the digital currency’s underlying technology, the blockchain. And like a religion, the Bitcoin Cash splinter faction was immediately rejected by the establishment—in this case by Coinbase, the largest Bitcoin exchange on the planet.
You can almost picture a Bitcoin Cash enthusiast—call him Martin Luther—posting his 95-point screed to a cryptocurrency message board. “Out of love for the truth and from desire to profit from it!” he writes with zeal, punctuating the sentiment with a GIF of Aziz Ansari as the Parks and Recreation character Tom Haverford making it rain.
Bitcoin Cash’s emergence hasn’t eroded support for the original Bitcoin. Indeed, one Bitcoin is worth about $2,760 at the moment, more than its value a week and a month ago. Investors and technologists alike sense opportunity in the schism. (Look no further than the Chicago Board Options Exchange, which plans to launch its own bitcoin derivatives trading products next year, and the rabid interest in initial coin offerings, or ICOs.) Cryptocurrency, long the domain of hustlers and dealers, is growing into a legitimate enterprise. The original Bitcoin, launched in 2009, was merely the first chapter.
To which digital currency denomination will you be faithful? For me, it’s still far too early to tell—but I’ve never been an early adopter of technology. A reformation is clearly underway in the crypto-community. Which doctrine(s) win out, well, that’s up to you to decide.
A new version of Bitcoin has been mined for the first time in the crypto-currency’s history.
Bitcoin Cash is the result of months of debate and development over how the currency would continue to evolve.
Fears of large swings in the value of Bitcoin have so far not been realised – but some exchanges are still adapting to the new currency.
One expert said the process had gone smoothly so far and pointed out that trade in Bitcoin Cash seemed “robust”.
Bitcoin Cash was developed as a measure to increase the capacity of Bitcoin’s underlying technology, the blockchain – a digital ledger that records every single transaction.
Because the old blockchain could only have one megabyte (MB) of data added to it every 10 minutes, transactions have come to be processed at slower rates.
Bitcoin Cash blocks can be as large as 8MB, which its proponents hope will help to solve this problem.
Yesterday, Bitcoin Cash was officially born when block number 478559 – at just under 2MB in size – was mined.
No major issues have so far been detected following the split although a few exchanges and wallets have had minor technical issues with supporting Bitcoin Cash initially, said Dr Garrick Hileman, research fellow at the Cambridge Centre for Alternative Finance.
Thanks to its larger block size, Bitcoin Cash requires more computer storage space from parties wishing to take part in the process of mining.
Mining involves computers being tasked with solving difficult mathematical problems in order to authorise transactions on the blockchain.
Miners receive new bitcoins as a reward for this work – making it lucrative – and it has also been something open to individuals in the past, because the cost of small scale mining equipment has been relatively low.
That could change thanks to Bitcoin Cash.
“Bigger players with access to server farms and big budgets will have no problem running bigger nodes, but smaller operators could be squeezed out,” said Dr Hileman.
“Will companies dominate Bitcoin Cash more than Bitcoin? We’re going to see this in the flesh now, how this will play out.”
After testing out digital currencies earlier this month, independent stock research analyst Ronnie Moas on Sunday published the first two parts of his 122-page report on bitcoin and other digital currencies.
“In my view, the genie is out of the bottle, and cryptocurrencies will continue to rise and take market share away from stocks, other precious metals, bonds and currencies,” Moas, founder of Standpoint Research, said in the report.
“I think investors should take a shot on this and hold for a few years. If you lose a few bucks, at least you took a shot,” he said. “In life, you miss every shot that you do not take. It will probably be more upsetting to watch it (from the sidelines) go up another 1,000%.”
Moas gave bitcoin a $5,000 price target for 2018, reflecting nearly 80 percent upside from Monday’s price of about $2,800. He also expects rival digital currency ethereum to more than double in value from just under $200 to reach $400 in the next year, and another digital currency, litecoin, to double from about $40 to $80.
In the next week or two, Moas said he plans to issue the third part of the 122-page report about how a fourth and much smaller digital currency could rise a few hundred percent in the near future.
The stock analyst said he’s bought 10 of the top 20 digital currencies by market capitalization in order to be diversified, marking the first time in 20 years he’s put money into his own recommendations.
“In my view, 10-15 years from now, the charts on a few of the top 20 names will look like the Amazon, Apple, Tesla, Facebook, Netflix and Google charts look today,” Moas said in the report.
The US Department of Justice (DoJ) has charged a Russian Bitcoin exchange operator with 17 counts of laundering up to $4 billion since 2011. Alexander Vinnik was arrested earlier this week by Greek police, and shortly afterwards, security firm Wizsec identified him as a prime laundering suspect in the infamous $480 million Mt. Gox hack. “BTC-e was an international money-laundering scheme that, by virtue of its business model, catered to criminals — and to cyber criminals in particular,” the DoJ’s indictment reads.
The DoJ says that the exchange also laundered the proceeds from ransomware attacks, including “Cryptowall. Top top it off, it accused Vinnik’s exchange of laundering funds from the now defunct Silk Road drug and weapons site, via affiliated officials Carl Force and Shaun Bridges. “Through Vinnik’s efforts, BTC-e emerged as one of the principal means by which cyber criminals around the world laundered the proceeds of their illicit activity,” the DoJ wrote.
Along with the 17 money laundering charges, the DoJ accused BTC-e of not registering in the US as a “money service,” despite the fact that it did “substantial” operations there. The firm ran its US business in part through related shell companies, most of which were also not registered with the US financial crimes enforcement network (Fincen).
Through Vinnik’s efforts, BTC-e emerged as one of the principal means by which cyber criminals around the world laundered the proceeds of their illicit activity.
As for the Mt. Gox heist, the DoJ claims that 530,000 of the stolen Bitcoins were deposited into three currency exchanges: BTC-e, Trade Hill and a third-party Mt. Gox wallet. “Of this 530,000 Bitcoin, 300,000 of it was [later] sent directly to three separate BTC-e accounts: ‘Vamnedam,’ ‘Grmbit,’ and ‘Petr.’ These accounts were all linked to each other,” it said. The rest were transferred from the other exchanges into a BTC-e account that was controlled by Vinnik, so BTC-e effectively received 530,000 of the stolen Bitcoins, now valued at $1.15 billion.
Former Mt. Gox CEO Mark Karpeles pleaded not guilty at a trial to charges of embezzlement related to the theft of the Bitcoins. In 2014, the exchange lost 850,000 Bitcoins, then worth about $500 million, though 200,000 were later recovered. Right now, those Bitcoins are worth around $1.8 billion. “I swear to God that I am innocent,” Karpeles told the Tokyo court.
The US government is now negotiating with Greece to extradite Alexander Vinnik (the two nations have had an extradition agreement since 1932). The BTC-e exchanged has been fined $110 million in civil penalties, and Vinnik personally faces a $12 million fine. All told, he could be imprisoned up to 55 years.
If you’ve seen the incredible upward momentum of Bitcoin, Ethereum, and other cryptocurrencies, you’ve maybe also considered getting in on the action. Now, you’re gonna learn how.
But first, a disclaimer: Bitcoin, Ethereum, and so many of the other cryptocurrencies out there can be a way to pay for stuff online, sure. And they can also be (if they aren’t already more popular as) investments. And investments, you might know, can go up and down. You can gain money on them, or lose it. And those values can fluctuate wildly, as you might’ve also seen lately.
To put it simply: proceed with extreme caution. We’re not here to tell you whether or not you should buy it, just to show you how you can pull it off.
That said, the rise of cryptocurrencies are an exciting moment for technology, and even if you don’t want to actually buy any, it’s worth knowing how it all works.
Let’s begin where any investment starts—in your own wallet.
Just like depositing money in the bank or buying a stock, you keep your cryptocoins in a digital account known as a wallet, which lets you store, receive, and send them.
But it’s a bit more complicated than that, and there’s some serious notes of precaution to be aware of with a wallet. Cryptocurrency won’t just magically appear in your wallet out of thin air. You’ve gotta buy it, first. There are several ways to do that, but the easiest is to exchange a fiat currency—dollars, euros, pounds, etc—for some cryptocurrency. And the easiest place to do that is at an exchange.
Think of a cryptocurrency exchange as a stock market for crypto. You register for it, deposit your fiat currency of choice, and then, you can buy yourself some crypto. But the cryptocurrency market is still pretty new—and it’s not bound by the same laws and regulations as the stock market. So before you do anything else, remember this:
Your money is never 100% safe.
The cryptocurrency markets have matured in recent years, but there’s still a lot that can go wrong. There are scammers, out to separate you from your money. Software errors could theoretically wipe out your store of bitcoin. And there’s always the possibility of user error (i.e. you screwing up) that can send your cryptocurrency out into the abyss.
Hackers can also break in and steal it. It’s happened before; this summer, $32M in Ethereum was stolen. One of the largest bitcoin exchanges, Mt. Gox, has had some of its bitcoin stolen, and it went bankrupt in 2014.
Many users who had their bitcoin in Mt. Gox are still waiting to get it back. And even if you didn’t hold your bitcoin there, the incident triggered a massive price crash, in which Bitcoin lost over 70% of its value.
The cryptocurrency ICO market is getting more and more interesting every week. All sorts of ICOs are popping up that utilize blockchain, Ethereum, and cryptocurrency to solve big world problems.
Not only are they getting funding, they are getting lots of funding. TenX did over $80 million, EOS is well over $400 million so far, Bancor did $250 million, the numbers are very large. This goes to show the power of the cryptocurrency world. People are hungry for the next hot ICO that they can potentially multiply their cryptocurrency on, or hold for the long term.
The best use for blockchain technology so far and the place of biggest disruption is in the banking industry. The banking system is outdated and slow. The fastest way to move money from Los Angeles to Paris using the traditional banking system, is to not actually use the system and to physically fly there with cash. That’s not exactly an efficient system. Blockchain technology and blockchain startups are currently giving the banking system a well needed overhaul.
A new Ethereum based ICO company in the banking space, Everex, is bringing banking services to over 2 billion people who do not have a bank account. Everex gives those people access to a mobile based Everex wallet that essentially serves as a bank account with all of the related services but with no fees for exchanging money. Then people can use the wallet to get micro-loans, and micro financing at rates that are affordable. And it’s all backed by actual cryptocurrency.
Another huge issue in the massively outdated banking space is actually moving money around from person to person, or even to yourself. In fact, on a recent trip to Australia it took me over 5 business days to just physically move money to myself while traveling. From my own accounts. The burden and hassle on top of the long wait was extremely annoying, just to access my own money. Blockchain technology, cryptocurrency and startups like Everex begin to solve these problems where you don’t have a centralized power preventing you from accessing your own money.
Many people, especially migrant workers, want a way to send money back home. The problem is that the fees are outrageous and make it grossly unaffordable for the people that need it most. Everex allows you to send it fee free as well as exchange currency anywhere in the world without the astronomical percentage based pricing structures.
Traditionally, you could pay as high as 24% (in some cases even more) just to exchange currency and move it from one country to another.
Another pretty cool feature of Everex is cryptocurrency backed micro-loans and micro-credit. These are all 100% backed by Ethereum and Ethereum based cryptocurrencies. This concept disrupts the credit system and allows lending to happen all based and backed on cryptocurrency.
As of the time of writing Everex is already well into their ICO raising over $6 million worth of Ethereum so far the first day.
A recurring challenge for bitcoin and other cryptocurrencies is how to make them work in the real world. A Singapore-based startup says the answer is its Visa card.
TenX is pitching its debit card as an instant converter of multiple digital currencies into dollars, yen and euros. The company said it takes a 2 per cent cut from each transaction and has received orders for more than 10,000 cards. While transactions are capped at approximately £1500 ($2000) a year, users can apply to increase the limit if they undergo identify verification procedures.
TenX’s bid to make digital currencies easier to spend comes amid massive volatility and in fighting within the cryptocurrency community. Bitcoin, the most popular, slumped after reaching a record in June amid concerns about a split in two, only to recover as fears faded. The company has built an app that serves as a digital wallet connected to the Visa card so that when it’s swiped at a cafe or restaurant, the merchant is paid in local currency and the users’ crypto account is debited.
Bitcoin reversed steep losses as miners began using new software which aims to bridge an ideological gap that has threatened to divide the cryptocurrency.
Bitcoin’s community has been at bitter odds for more than two years about how to solve its scaling problem, which has hampered the cryptocurrency’s growth and allowed rivals like ethereum to steal some of the spotlight.
The new software, known as SegWit2x, is seen as a compromise for the two sides of the debate: miners who deploy costly computers to verify transactions and act as the backbone of the blockchain, and developers known as Core who uphold bitcoin’s bug-free software. While both sides have incentives to reach a consensus, bitcoin’s lack of central authority has made reaching agreement difficult.
The price of bitcoin rose to as high as $2,356 before trading at $2,348 as of 2:22 p.m. in New York. The digital currency slumped to as low as $1,758 over the weekend on Coinbase’s exchange. Bitcoin, which has more than doubled this year, climbed to just shy of $3,000 on June 12.
SegWit2x was formally released over the weekend and has already gained adoption by large miners Antpool, BTCC and Bixin. About 55 percent of blocks mined in the last 24 hours were done with SegWit2x, according to coin.dance, which monitors blockchain activity.
If support reaches 80 percent and maintains that threshold from more than two days, it will move bitcoin closer to avoiding a split.
“Traders are excited by the prospect of a resolution to the scaling debate, which is why the price has rallied,” said Thomas Glucksmann, head of marketing at Hong Kong-based bitcoin exchange Gatecoin.
Read more about bitcoin’s civil war.
Despite the progress with SegWit2x, some warned that bitcoin isn’t out of the woods yet. Many Core members still vehemently oppose the software, which they say hasn’t been properly vetted for bugs. Also, not all miners support SegWit2x, which they say is a flawed compromise that doesn’t solve the root scaling problem.
The scholarly environs of the New Media research lab at Stellenbosch University in South Africa gave rise to a diabolically clever plan to deal with video piracy in 2015: Lure pirates with bitcoin to find out the source of the contraband material.
That project has become the basis for a startup called Custos. Its Privateer product helps movie studios and book publishers detect the source of leaked copies of upcoming movies or ebooks using a bitcoin bounty. Custos embeds imperceptible bitcoin private keys in the digital files, with different keys for different advance copies of a movie or ebook. A private key is essentially the password that lets someone claim the bitcoin held at a particular address.
At the same time, Custos makes a piece of free software that screens movie files for these private keys and markets the screener to content pirates. Pirates now have an incentive to check pirated movie files in case they contain a key. If a key is detected, the pirate can claim the bitcoin bounty—usually between $5 and $10—and is free to keep it. But once a bounty is claimed, Custos is alerted, and can begin the process of figuring out the origin of the leak.
“Whether you call it a post-capital economy or a new peer-to-peer economy, it’s magical,” says G-J van Rooyen, a Custos co-founder and formerly an associate professor at Stellenbosch University. “We can employ a community of anonymous individuals, doing things that have tangible value … for all the excitement about the blockchain, there’s a heck of a lot you can do with traditional cryptocurrencies like bitcoin.”
One rotten apple
Van Rooyen says the most financially damaging form of pirated material is a movie that’s leaked between the final cut and its cinematic release. Tens of thousands of advance copies of a film are sent to festival judges and movie reviewers during this period. Custos uses the bitcoin bounties to try and figure out which of these parties leaked their copy. “You just need a single rotten apple in that group,” he says.
Van Rooyen claims once a leaked copy containing a bounty hits the dark web, it takes just five minutes on average for the bounty to be claimed and Custos and its client to be alerted. On social networks it takes 42 seconds; and offline, like if a movie is copied or shared on a DVD or USB drive, it’s 28 minutes.
Embedding rewards for pirates within the contraband files themselves is the sort of model that would have been difficult, if not impossible, to enact without a cryptocurrency like bitcoin. Its pseudonymity means pirates don’t expose themselves when they claim a bounty. Bitcoin’s decentralized, market-based ethos cleverly aligns the interests of multiple parties who are usually at odds—in this case, the the content owners and pirates.
Creating this sort of overlap in interests could give Custos an edge over established digital rights management technologies, says George Howard, a professor of management at Berklee College of Music. Howard notes that DRM mechanisms are too blunt: they punish customers in favour of rights holders even when no illicit activity is going on by making it difficult to legitimately share content, or other by imposing other restrictions on customers.
“As evidenced by the ongoing rampant piracy of works, no DRM has proven to be terribly effective,” Howard says. “What [companies like Custos] are trying to do is add an incentive or game-mechanic layer, to shift the burden of DRM from rights holders to the community at large.”
The burgeoning cryptocurrency industry has already drawn some charismatic and distinctive personalities to the forefront. One of the earliest important people within the world of Bitcoin is now preparing to make a comeback. Charlie Shrem was a Bitcoin pioneer, having founded a startup called BitInstant in 2011. BitInstant was a crucial early transaction facillitator, although it fell by the wayside in 2013. Shrem eventually went to federal prison after pleading guilty to involvement with a customer who acquired Bitcoins for resale purposes on the underground market called Silk Road. Now, months after his release, Shrem has plans to help to further strengthen the industry which has already grown so fast.
Early Advocacy, But For What Cause?
Besides his work with BitInstant, Shrem was an important early figure in the history of Bitcoin because of his widespread advocacy for the cryptocurrency. A 2013 GQ profile on the emergent currency featured Shrem, and he figured prominently in a documentary called The Rise and Rise of Bitcoin. According to a profile by Fortune, Shrem spoke frequently at industry conferences and co-founded an organization called the Bitcoin Foundation for the purposes of advocating on behalf of the digital currency.
In the Fortune profile, the author indicates that Shrem “claims he’s no longer operating mainly for himself and instead wants to use his talents to strengthen the crypto-community.” It’s true that Shrem’s work with Bitcoin made him a millionaire before sending him to prison. What will he do now?
Shrem’s Plans for the Future
Shrem has set his sights, at least in part, on working with Dash, one of the more recent additions to the cryptocurrency line-up as well as one of its fastest-growing members. Shrem proposed the creation of a prepaid debit card onto which users could load Dash coins. Those coins would be converted into dollars or other currency to be used at any business which accepts debit cards. Shrem’s card is the first that could be used in the United States.
Shrem has also reportedly joined the startup Jaxx as head of business and community development. Jaxx aims to create digital wallets allowing users to hold multiple currencies. Founded by Anthony Di Iorio, co-founder of Ethereum, Jaxx looks to be at the forefront of a new wave in cryptocurrencies: when various blockchain networks can all communicate and partner with one another. These so-called “parachains” could help to propel the industry even further, bringing cryptocurrencies even more into the mainstream and allowing for extreme ease of transacting and exchanging between currencies. In this way, Shrem may have a hand in continuing to develop the cryptocurrency world as it looks ahead to the future.
Victims of the ongoing Petya cyberattack have paid £7,064 ($9,000) in Bitcoin to hackers so far to try and get their files back — but they won’t have much luck.
The cyberattack broke out on Tuesday, impacting the Ukrainian government and banks, then spreading to a Russian oil company, advertising firm WPP, and other companies around the world. The attack takes the form of ransomware, malicious software that encrypts a user’s files, then demands a payment in Bitcoin in exchange for decryption.
Victims posted screenshots of messages showing up on their computer screens, instructing them to send $300 worth of Bitcoin to a Bitcoin wallet address. They were also told to send their own Bitcoin wallet ID and “personal installation key”, a unique identifier generated by the ransomware, to a dedicated email address.
According to Blockchain.info, which shows Bitcoin transaction data, there have been 36 payments to that Bitcoin address to date.
But the operator behind that email address, German firm Posteo, swiftly blocked access to that mailbox. The company said on Tuesday that people couldn’t email the address, nor could hackers access it. That means hackers can’t check who has paid them, nor can they release the key needed to decrypt a specific victim’s files.
In short: Anyone who has paid the ransom is out of luck.
“Vitalik Buterin confirmed dead. Insiders unloading ETH” read the title of the post on 4Chan, the notorious online message board frequented by internet trolls. “Fatal car crash,” it went on. “Now we have our answer. He was the glue.”
“ETH” refers to ethereum, the world’s second most valuable cryptocurrency, which was invented by a 21-year-old, Vitalik Buterin, in 2015. The currency’s price has risen by 50 times this year so far, and many market watchers have wondered when the gains would stop. The price was already in the midst of a sudden decline yesterday that saw about $4 billion wiped off its total market value, and according to the post, Buterin’s untimely death explained it and heralded a crash.
It turns out that Buterin wasn’t dead, nor involved in a car crash. He took to Twitter to prove that all was well, but how to supply evidence that he was indeed behind the Twitter account? In the cryptocurrency equivalent of posing with the day’s newspaper, he scrawled out some data linked to the latest block (you can see that data for yourself here) mined on the ethereum blockchain on a piece of paper and took a selfie with it. Wikileaks founder Julian Assange did something similar to dispel rumors of his demise by reading out data from the bitcoin blockchain on a live stream in January. Buterin then posted the selfie on Twitter:
Another day, another blockchain use case. pic.twitter.com/OyHzdhEeGR
— Vitalik Buterin (@VitalikButerin) June 26, 2017
Ethereum’s slide seemed to hit a bottom after the hoax was posted on 4Chan, recovering about 10%. Despite yesterday’s steep sell-off, it’s still trading 39 times higher than it was at the start of the year.
To some people, Bitcoin is an experiment that can end in one of two ways: it will either fulfill its promise to become the “Internet of Money” or it will die a fiery death at the hands of regulators.
But what about a third option, in which a rival like Ethereum overtakes Bitcoin?
The rise and rise of Ether
Ether, the native coin of Ethereum, has risen more than 5,000 percent in 2017. It peaked at $396.40. Investors first attributed the surge in the Ethereum price to its faster platform, which processes transactions more quickly than Bitcoin’s. But it turns out that transaction times are just the tip of the iceberg.
Smart contracts, initial coin offerings (ICOs), variable block sizes – the evidence is overwhelmingly in Ethereum’s corner, regardless of what you might hear from so-called purists within the Bitcoin community. Even major institutions are siding with Ethereum. For instance, the Central Bank of Russia is currently testing an Ethereum fork for its own monetary system. This will effectively create the world’s first national cryptocurrency, a service that Bitcoin is incapable of providing.
Some in the community argue this unchangeability is precisely what protects Bitcoin price. To them, Blockchain technology only exists in service to Bitcoin to the singular vision of a decentralized currency.
Can Bitcoin emerge as a global digital currency?
This question is hotly contested, even by futurists like Ray Kurzweil. The famous head of Google’s engineering lab recently said that Bitcoin’s instability is a serious threat to its monetary ambitions.
“Currencies like the dollar have provided reasonable stability,” said Kurzweil. “Bitcoin has not. And it’s not clear to me that the whole mining paradigm can provide that type of stability.”
When he talks about stability, Kurzweil is referring to the kind of short-term volatility that is associated with risky investments. Currencies are not supposed to follow these roller coaster-like patterns. They are not supposed to lose 10 percent of their value in a day, as Bitcoin has done on a regular basis. They should, instead, keep fairly steady for a long while. Put another way, today’s price should be tomorrow’s.
That is how currencies establish credibility and secure buy-in from the population at large. If the general public believes that tomorrow’s price is going to be drastically different, it can lose faith in the currency and that would be disastrous.
Whatever existential criticisms that might exist of the US dollar, few people would argue that tomorrow is a concern for the Greenback. Bitcoin cannot boast similar reliability. Its price is an open question from one day to the next.
Ethereum casts a wider net than just money
What happens if we shelve this idea of a global digital currency? Does Blockchain technology become irrelevant? Of course not. It actually becomes far more relevant.
Take, for instance, a study from the Energy Web Foundation (EWF) in partnership with a Blockchain startup called Grid Singularity. The study shows 200 use cases for Blockchain technology in the energy sector, including ones for renewable energy certificates, peer-to-peer energy sharing networks and customer billing.
10 major energy firms have joined the EWF in order to take advantage of these applications. However, none of them can be executed on Bitcoin’s platform. The EWF had to turn to Ethereum’s smart contracts for these particular services, which speaks to my earlier point: Ethereum casts a wider net than Bitcoin.
It fulfills the true potential of Blockchain technology by expanding beyond money, beyond Bitcoin, into everything else. More and more innovators will be drawn to Ethereum’s smart contracts, ICOs and faster transaction speeds. As a natural result, they have to use Ether tokens on the platform, suggesting that ETH prices will continue to skyrocket.
Forbes has declared Bitcoin’s 2017 price growth “has most of the elements of a bubble” and will ultimately burst.
Drawing similarities with conventional financial asset bubbles, Panos Mourdoukoutas writes that huge adopter interest will preclude a mass exodus, leaving hardly any value at all.
“Investors who have been around Wall Street long enough know all too well that when money becomes tight and investment promises aren’t fulfilled, bubbles and manias end; and millions made are lost much faster than they were made,” he wrote. “And then some.”
Talk of a bubble-like scenario in Bitcoin was a serious topic even within the cryptocurrency community this year.
Opinions varied widely, with commentators such as Vinny Lingham suggesting only too rapid price growth beyond $3000 would produce the danger of extremely volatility.
Others were more bullish, predicting a boom and bust cycle similar to Bitcoin’s November 2013 performance with the currency reaching ever new heights.
Forbes meanwhile suggests the current status quo is one where “investor hype” is already present but mass interest and mass “mania” have yet to appear.
“[…T]here’s one thing still missing to turn the bubble into mania: a broad participation beyond the ‘pioneers’ and the ‘early adopters,’ to ‘early majority’ along the Rogers Curve,” Mourdoukoutas continued.
“That’s when the demand for Bitcoin reaches a cascade and turns into mania, as a critical mass of investors rush to buy ‘hot’ Bitcoins for the promise they hold — rather than for the fundamentals they display.”
Alibaba should be the next global giant to accept Bitcoin according to 4,500 participants in a survey this week.
52 percent of respondents to the survey by Digital Currency Group creator Barry Silbert believe the Chinese marketplace is next in line to embrace the virtual currency.
Other options included Amazon (31 percent) and Google (12 percent), while only five percent of those answering on Twitter believed Facebook would be the first of the group to get serious about Bitcoin.
Who will be the first to embrace digital currency?
A total of 4,571 votes were cast, with Silbert confirming the results on Thursday.
Recent noises from the Alibaba ecosystem may well have informed the outcome, with a Japanese move set to make Bitcoin payments an indirect option for the site in the future.
Amazon, for its part, has also been increasingly active in the Blockchain space, working with Silbert’s Digital Currency Group on a startup initiative.
So far, however, it has stopped short of announcing any direct relationship with Bitcoin.
Meanwhile, a couple of months after announcing it would accept Bitcoin across its international platform, Czech retail giant Alza revealed this week customers could even use the virtual currency to buy a Tesla electric car.
Erik Finman made a bet with his parents that if he turned 18 and was a millionaire, they wouldn’t force him to go to college. Thanks to his savvy investments in bitcoin and the current all-time high valuation, he won’t have to get his degree.
“I can proudly say I made it, and I’m not going to college,” Finman said.
He currently owns 403 bitcoins, which at the current $2,700 a coin puts his bitcoin value at $1.09 million. He also has smaller investments in other cryptocurrencies, including litecoin and ethereum.
Bitcoin is very volatile, and the value could decline rapidly. A technical analyst told CNBC he believes bitcoin will only go up to $2,800 before the value recedes, while others think it may reach $100,000 in a decade.
Finman thinks its best days are still ahead. “Personally I think bitcoin is going to be worth a couple hundred thousand to a million dollars a coin,” he said.
Bitcoin and the blockchain technology it is built on allow people to cut out the middleman, Finman explained. For example, an open source blockchain ride-share platform would allow users to power the service on their phones using peer-to-peer technology without a central hub. It would allow the drivers to get more money by cutting overhead costs, he added. It could also create the next evolution of the internet, one which wouldn’t be reliant on servers.
The first time, he turned $1,000 into $100,000
Finman began investing in bitcoin in May 2011 at the age of 12, thanks to a $1,000 gift from his grandmother and a tip from his brother Scott.
Though he’s close with his family — which he calls the “Elon Musk version of the Kardashians” — growing up in “small town” Idaho outside of Coeur d’Alene wasn’t easy. Finman was especially frustrated with his high school teachers, and begged his parents to let him drop out at 15.
“(High school) was pretty low quality,” he said. “I had these teachers that were all kind of negative. One teacher told me to drop out and work at McDonald’s because that was all I would amount to for the rest of my life. I guess I did the dropout part.”
Surprisingly, his parents — who met pursuing their Ph.D.s at Stanford — agreed. Finman sold his first bitcoin investments at the end of 2013, when they were valued at $1,200 a piece.
With the $100,000 Finman launched an online education company called Botangle in early 2014 that would allow frustrated students like him to find teachers over video chat. He also used the funds to move to Silicon Valley, did some fun things like meet Reddit co-founder Alexis Ohanian and traveled.
“I really liked Colombia,” he said. “It was fun, but a little sketchy. Some interesting stuff happened. I was held up at gunpoint there, which is pretty scary, but I have this emergency button I programmed in Android that puts you on speaker but turns off audio automatically and dials [a local emergency number].”
“Maybe I’ll turn that into an app,” he added. “It’s handy.”
It was hard getting people to take a 15-year-old tech entrepreneur seriously, Finman admitted. He recalled being called in to interview with a “really, really high-up” unnamed Uber executive, who instead of listening to his Botangle pitch discouraged him and told him he would never win the bet with his parents.
Eventually he found a buyer for Botangle’s technology in January 2015. The investor offered either $100,000 or 300 bitcoin, which had dropped in value at that time to a little more than $200 a coin. He took the lower cash value bitcoin deal because he believed it was “the next big thing.”
“My parents asked ‘Why don’t you take the more cash?”‘ Finman explained. “But I thought of it more of an investment.”
Since then, Finman has been managing his family and his own bitcoin investments. He’s also kept busy on other projects, including working with NASA to launch a rocket through the ELaNa project. One thing he won’t do is go back to school.
“I never got my GED, and I don’t see the value in it,” Finman said. “The purpose of that would be to get another education level and get a job. I had to learn through running a business. Instead of writing essays for English class, I had to write emails to important people.”
Although the rest of his family has degrees — his brother Scott went to Johns Hopkins at 16 and now has an enterprise software company, while his other brother Ross went to Carnegie Melon at 16 for robotics and is now pursuing his Ph.D. at MIT — he’s happy learning about the real world from experience.
“The way the education system is structured now, I wouldn’t recommend it,” Finman said. “It doesn’t work for anyone. I would recommend the internet, which is all free. You can learn a million times more off YouTube and Wikipedia.”
I’ve approached digital currencies with the mantra, “If you can’t explain something simply, you don’t understand it well enough.” I’m not a programmer and my tech language fluency is minimal. I’ve studied markets, trends, and bubbles though, which gives me a healthy dose of skepticism.
Over the time it’s taken me to decipher the subject, I’ve been frustrated by most crypto-currency explanations. So here I’ll describe them from an outside journalistic perspective, not as an inside expert.
Many people with deep knowledge like to flex the complexities and nuances of what they know as a kind of proof or verification. The problem I have with this is sometimes these jargon-laden explanations come across like sub-prime mortgage gibberish—esoteric knowledge accessible to the initiated, potentially veiling a crazed bubble people think they understand, but really don’t.
So here’s how I start to think about it: what is the difference between a USB cable and a FireWire cable? A digital engineer might be passionate about the hardware and structural differences, but to most everyday people they are just cables. One transfers data faster than the other.
This helped me begin to think about the difference between the blockchain and the cloud. Note there is no cloud, it’s all servers.
Blockchain is a particular type of server that runs according to a particular code so that information is processed and stored in multiple places at the same time. The result is the information cannot be counterfeited. This makes e-currency effortless to transact because the money can be secure without the need to trust a third party middleman like a government or bank.
Software engineer Eric Schmidt, Executive Chairman of Alphabet said, “Bitcoin is a remarkable cryptographic achievement [because] the ability to create something which is not duplicable in the digital world has enormous value.”
Writers like Neal Stephenson predicted the emergence of digital currencies as early as the ’90s. In fact, when Elon Musk and Peter Thiel founded Paypal, their original intent was to create a digital currency, but they were ahead of their time.
There are many different digital currencies that rely on different blockchains—database servers—and blockchain technologies. The two crypto-currencies considered to be the most reliable are Bitcoin and Ethereum. Ethereum is supported by the reputable online wallet Coinbase.
What’s interesting about digital currencies, for example with Bitcoin, is that it is run by a code which dictates the maximum amount of Bitcoins that can ever exist. We haven’t reached the maximum yet, by the way. People mine for Bitcoins by contributing hardware to the global blockchain. Once all the Bitcoins have been mined there will be a finite amount.
It’s this finite limitation of Bitcoin that will enable it to be something like a gold standard.
The double value is that these blockchains can also serve functional purposes besides hosting digital currencies. So owning digital currency is kind of like owning stock in a company.
In our digital world, with its infrastructure that seems to be infinitely hackable, different blockchains will use their software for different purposes as more companies and services adopt blockchains for dynamic databases. Simultaneously, an impending severe economic crisis might propel people’s transition of faith from traditional bank backed currencies to pragmatic digital currencies for our new global civilization.
Messaging app Kik Interactive is the latest and potentially most well-established company to delve into a quirky new form of fundraising — creating its own digital currency.
Kik, based in Waterloo, Canada, unveiled plans for an “initial coin offering,” a process by which it sells tokens that can be used to buy services on its platform. The idea is that as more and more people use Kik, the value of those tokens, called “Kin”, will rise in value.
Interest in coin offerings is high, thanks to surging prices of bitcoin and other virtual currencies. Called ICOs, they give a wide range of people the chance to invest in a company or any other endeavor early on. While unregulated, they have proved popular, with investors spending around $330 million on tokens over the past year, according to data compiled by cryptocurrency blog The Control. Earlier this month, cloud-storage startup Storj raised almost $30 million in five days via an ICO.
Kik, which has raised about $120 million (in real money) from investors including Tencent Holdings Ltd., could serve to add a new layer of legitimacy to the process.
“Kik will be the largest install base of cryptocurrency users in the world,” Chief Executive Officer Ted Livingston said. “Kin, on day one will be the most-used cryptocurrency in the world.”
The move comes as Kik finally reveals how many people actually use its app regularly each month: 15 million. That’s a far-cry from the 300 million total registered users number it was sharing around this time last year.
Kik has traditionally been most popular among teens because, unlike Facebook Inc.’s Messenger or WhatsApp, they don’t need a phone number to use it. Growth has been tough in the past few years though, as teenagers get smartphones earlier and Kik users switch to Facebook apps once they leave high school.
Kik plans to gift a certain amount of Kin to each user. They’ll be able use the new currency to buy games, live video streams and other digital products. The company’s goal is to attract new merchants to sell on the platform, creating a snowball effect where Kin becomes more valuable and more sellers pile onto Kik, increasing its popularity.
“We will create an economy where millions and millions of mainstream consumers are earning in a cryptocurrency for the first time ever,’’ Livingston said. “They’re going to want to spend in that same cryptocurrency as well.’’