'Bitcoin bomb may blow up banks' bondage, hence US attacks'

The cyber currency, Bitcoin, has suffered another setback - after US authorities seized the accounts of its major operator. It now hampers the process of exchanging Bitcoins, which now stand at about 120 dollars per unit. So why is the US Government so worried about the currency, and is the Bitcoin able to beat traditional currencies? Amir Taaki, a Bitcoin software developer, says the digital currency gives you total control of your assets, as there are no middle men involved. READ MORE: http://on.rt.com/wz0s7b

'Bitcoin bomb may blow up banks' bondage, hence US attacks'

Bitcoin supporters promise banking 'revolution'

The new virtual currency Bitcoin: You can't touch it; you can only spend it online or with a smart phone. But supporters of Bitcoin say it will revolutionise banking. And now some workers are even being paid with the new system. Al Jazeera's Rob Reynolds went to meet one man who's doing just that, and finds out how his salary has gone up ten-fold.

Bitcoin supporters promise banking 'revolution'

American Banker: Is Bitcoin a Flash in the Pan?

americanbanker.com / May 16, 2013. The Treasury Department has moved to rein in Mt. Gox, the world’s largest exchange for the all-digital currency Bitcoin. The move raises the specter that the government is intent on eliminating anonymous Bitcoin transactions, which could dramatically reduce the currency’s allure to many users. - http://www.americanbanker.com/video/is-bitcoin-a-flash-in-the-pan1059183-1.html

Electronic Frontiers Foundation (EFF) Now Accepts Bitcoin

May 17, 2013 Posted By Phil. The EFF just announced that it will accept bitcoin as a donation option. This decision shows just how how significant the latest FinCEN guidance was. It provided sufficient clarity that anyone accepting the virtual currency will not be subject to regulations unless they are acting as a currency exchanger. The EFF is a donor-funded organization that describes itself as:

When our freedoms in the networked world come under attack, the Electronic Frontier Foundation (EFF) is the first line of defense. EFF broke new ground when it was founded in 1990—well before the Internet was on most people’s radar—and continues to confront cutting-edge issues defending free speech, privacy, innovation, and consumer rights today.

EFF fights for freedom primarily in the courts, bringing and defending lawsuits even when that means taking on the US government or large corporations. By mobilizing more than 140,000 concerned citizens through our action center, EFF beats back bad legislation. In addition to advising policymakers, EFF educates the press and public.

EFF is a donor-funded nonprofit and depends on your support to continue successfully defending your digital rights. Litigation is particularly expensive; because two-thirds of our budget comes from individual donors, every contribution is critical to helping EFF fight—and win—more cases. - Read more here: http://www.thegenesisblock.com/electronic-frontiers-foundation-eff-now-accepts-bitcoin

Bitcoin drive gains currency in Germany

When it was launched four years ago, few people took it seriously, but now the use of Bitcoin, the virtual payment system, is gaining ground.A growing number of businesses are accepting the digital currency as an alternative to cash.Al Jazeera's Nick Spicer reports from Berlin.

Bitcoin drive gains currency in Germany

Bitcoin gaming site SatoshiDice closes to US players

Published On May 16, 2013 at 23:04 BST | By Doug Watt. Citing legal advice, Bitcoin gaming site SatoshiDice is closing to US players, moving to block all US-based IP addresses from the website.

Posting on Bitcointalk and the Bitcoin reddit page, satoshidicepr, an official representative of the site who asked to remain anonymous, said the decision, which is effective as of today, was taken following “extensive legal counsel.”

“The best way to limit legal risk for SatoshiDice, and thereby protect its stakeholders, is to block US players,” the post states.

The company adds that the decision does not mean that online gambling is illegal in the US, nor does it mean that bitcoin gaming is illegal:

“However, the courts have not been clear on the definition of gambling, nor on what would constitute ‘legitimate gaming,’ nor are jurisdictions properly defined, and thus this is a proactive measure to protect those involved in the project.”

In an e-mail to CoinDesk, the SatoshiDice spokesperson added, “SatoshiDice is building a ubiquitous global brand in the bitcoin space, and must take the coercive threat of government seriously.” - Read more here: http://www.coindesk.com/bitcoin-gaming-site-satoshidice-closes-to-us-players

John Stossel on IRS Scandal: You Can’t Fix Government When It’s That Big

John Stossel on IRS Scandal: You Can’t Fix Government When It’s That Big

Bitcoin Hardware Wallet: Alpha Software Demonstration

This is a demonstration of the alpha version of my Bitcoin Hardware Wallet, code-named the Bitcoin Titan. All of the necessary features are implemented and working correctly. The software is undergoing final polish and testing. The first board spin is underway.

Obviously, excuse the crude graphics and wonky font; those will be cleaned up during the polishing.

Feel free to comment in the BitcoinTalk thread:
https://bitcointalk.org/index.php?topic=143978.0

Bitcoin Hardware Wallet: Alpha Software Demonstration

PandoMonthly: Chris Dixon on bitcoin. “The debate’s been misframed.”

At PandoMonthly, Chris Dixon discusses why he's excited about bitcoin, and how the popular debate surrounding it has been misframed.

PandoMonthly: Chris Dixon on bitcoin. "The debate's been misframed."

'US clamps down on Bitcoin, fears lack of control'

US authorities have frozen the account of the world's largest Bitcoin exchange, which helps move the customers' cash online. The booming digital currency has hit bureaucratic blocks ever since its rapid growth came to the attention of government.

'US clamps down on Bitcoin, fears lack of control'

Butterfly Labs Bitcoin ASIC mining device arrives in New Zealand

Posted on May 15, 2013 by MineForeman. It happened, ever since last month when Josh from Butterfly Labs let slip that a developer unit of their new 5 GH/s ASIC bitcoin miner might be on its way to me I have had trouble sleeping. I have spent the days watching the courier van come and go, my friends, family and co-workers have even noted to me how down I look.

I had begun to think that Josh and Butterfly labs were running some cruel geek version of the classic Pavlov’s dog experiment on me.

That was until yesterday when I received a call saying that there was a package for me that has been sitting in the courier depot since the 2nd of May…. 12 days ago!!!

I don’t know how or why, but despite the big sign outside the company I work for (pictured below, Integral Limited, second one down) at 99 Sala Street the FedEx guys did not seem to have been able to find me and this poor ASIC miner had been sitting there gathering dust. Read more here: http://mineforeman.com/2013/05/15/butterfly-labs-bitcoin-asic-mining-device-arrives-in-new-zealand

39 TH/s are About to Join the Bitcoin Network

May 15, 2013 Posted By Phil. According to reports on bitcointalk.org, people that ordered their Avalon ASIC miners in early February have started shipping. These miners run at over 65 GH/s, so the rapid increase in mining difficulty is not likely to slow down any time soon. The 600 miners in batch two will add an estimated 39 TH/s to the bitcoin network that’s already considered one of the world’s fasted supercomputers. Avalon initially estimated a shipping date of April 15th, so these are being delivered one month late. I’m sure most customers are happy they bet on Avalon over BFL though, considering they still haven’t started shipping beyond a very limited quantity. - Read more here: http://www.thegenesisblock.com/avalon-ships-asic-miners-batch-2

Max Keiser – Bitcoin, Bernanke & Buffett | London Real

Max Keiser of Russia Today drops by to explain the genesis and implications of the digital currency Bitcoin, why The Federal Reserve and the banking system should apologise to the people for manipulating interest rates, how Warren Buffett is complicit in the Mexican drug trade by purchasing Wells Fargo, and Max's crazy times in the 1980s as a New York City stockbroker by day and punk-rock party animal by night.

Max Keiser – Bitcoin, Bernanke & Buffett | London Real

Why The Federal Government Is Going After Bitcoin, But Amazon Coins Are Safe

By Alyssa Rosenberg on May 15, 2013 at 2:20 pm. As Washington Post tech blogger Tim Lee reported this morning, the federal government has moved to shut down—or at least restrict—the online currency Bitcoin. The Department of Homeland Security and US District Court for the District ordered a seizure of the funds in Dwolla account owned by the currency exchange Mt. Gox, and Dwolla has stopped processing payments into and out of the account, making it impossible to buy and sell Bitcoins. As Lee explained:

For years, Bitcoin supporters have touted the currency’s potential to resist government surveillance and censorship. They point to the example of Wikileaks, the whistleblower Web site whose access to funds dried up after the federal government applied informal pressure to intermediaries such as PayPal to cut off payments. The Bitcoin network is fully decentralized, so there is no one with the ability to monitor the network and block illicit transactions. If Wikileaks had funded itself through the Bitcoin network, the government wouldn’t have had such an easy time freezing its funds.

That’s a feature for people concerned with press freedom, but it looks more like a bug for government officials charged with enforcing the nation’s drug, gambling, counter-terrorism, and money laundering laws. The government relies heavily on financial institutions to help them monitor their customers’ financial activities and flag or block potentially illegal transactions. The lack of intermediaries makes Bitcoin an attractive technology for those who want to evade government scrutiny. It was only a matter of time before authorities started to give the technology some unwelcome attention. - Read more here: http://thinkprogress.org/alyssa/2013/05/15/2017091/why-the-federal-government-is-going-after-bitcoin-but-amazon-coins-are-safe

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You can spend bitcoins at your local mall

By Steve Hargreaves @hargreavesCNN May 16, 2013: 6:17 AM ET. You can now spend bitcoins at your local mall. But is anyone actually doing that? Last week, bitcoin payment processor BitPay announced a deal with Gyft, a seven-month-old Google Ventures-backed software app that lets users buy and upload retail gift cards to Android-based smartphones.

The partnership will allow customers to use bitcoins to buy gift cards for stores such as Gap (GPS, Fortune 500), Lowe's (LOW, Fortune 500), Sephora, GameStop (GME, Fortune 500), Burger King (BKW) and over 200 other retailers.

While those stores won't handle the bitcoin transactions themselves -- that's done by Gyft and BitPay -- it brings the number of locations where customers can effectively pay with bitcoins from around 8,000 nationwide to over 50,000, according to BitPay co-founder and CEO Tony Gallippi.

"This really does open the door to retail use of Bitcoin," said Gallippi. "I think it will drive adoption."

There's no doubt that four-year-old cyber currency Bitcoin is attracting more mainstream attention. For evidence of that, just look at Bitcoin's soaring -- and volatile -- valuation. The worth of 1 bitcoin zoomed from $20 at the start of the year to $266 in April. It's now worth about $117. - Read more here: http://money.cnn.com/2013/05/16/technology/innovation/bitcoin-sales

A visit to London's 'Bitcoin squat'

15 MAY 13 by NIKI GOMEZ. This is a guest post by Niki Gomez, a Digital Strategist and co-founder of Cybersalon, a thinktank on net culture. She's a graduate of MIT and works between London and Mumbai. Her personal site is www.nikigomez.com and she can be contacted via @nikigomez

The meeting place is a street corner on a very windy London evening. There's a bald-headed man waiting on the corner too. My colleague nudges me and whispers: "Is that him?" The man approaches and asks if we are Amir's friends. I explain that we're here to meet Amir, as he's agreed to speak about Bitcoin at our Cybersalon event, the following week. The topic is net politics.

Amir Taaki, a hacker, has become a spokesperson for Bitcoin in London. I'd approached him after he'd spoken publicly at a some London Finance events. Amir however is nowhere to be seen. So I call him. No answer. On the second attempt he picks up and gives me directions to come to the building they're squatting in. A large locked gate greets us, but we manage to squeeze through, into the hacker hideout.

The building is a former Buddhist temple with a large graffiti mural on one wall. In it are about ten people -- two of whom are chopping vegetables and cooking up what is to be a big communal dinner. One of the cooks introduces himself as a documentary filmmaker. He says he's working on a film entitled 'Finding Satoshi'. He explains that Satoshi Nakamoto is the hacker name of the unknown creator(s) of Bitcoin, who implemented the cryptocurrency and then moved on to "do other things". It's very important for the decentralised nature of Bitcoin that Satoshi has gone. It's not a tech start-up after all. It is the idea rather than a dominant personality or promise of IPO riches which give it motive force. - Read more here: http://www.wired.co.uk/news/archive/2013-05/15/bitcoin-squat-visit

Bitcoin Price 2013: How Bitcoin Could Help the World's Poorest People

Jeff FonginBusiness,Currency 2 days ago. The way in which Bitcoin typically gets portrayed, it often conjures up images of rich techies, American libertarians, and European depositors preparing for the worst. But this focus on Bitcoin as a first-world project ignores the enormous potential it holds as a tool for economic development. The world's poorest have unique challenges when it comes to financial services, and Bitcoin has the potential to meet at least some of these challenges more quickly and at less cost than any other tool currently available.

Basic financial services can be hard to come by in the developing world. Many regions simply don't have the abundance of branch banks found in more developed countries and this lack of financial infrastructure is a major impediment to economic growth. While advances in mobile banking have provided easier ways to send and receive payment, Bitcoin could majorly expand on existing services and do so in a way that directly integrates users with the global economy.

In the mobile payment sector, M-Pesa is the dominant player. The service was launched as a development tool in Kenya and allows individuals to store balances, make payments, and send money all through their cell phones. Customers can take cash to an M-Pesa agent who then credits it to their account; getting cash back works the same way but in reverse. Individuals can send and receive payments to any other M-Pesa customer in about the time it takes to send a text. - Read more here: http://www.policymic.com/index.php/article/show/id/41561

Why are the feds seizing Mt. Gox and Dwolla funds?

Published On May 15, 2013 at 18:37 | By Shirley Siluk. So exactly what is in that court order that the US Department of Homeland Security used this week to clamp down on Dwolla-Mt. Gox transactions? It appears the feds have decided there’s reason to believe Mt. Gox and a subsidiary are operating as unlicensed money transmitting businesses in violation of US law.

Ars Technica obtained a copy of the seizure warrant issued in US District Court in Maryland and signed by US Magistrate Judge Susan K. Gauvey.

The seven-page warrant cites an affidavit made by a special agent with Homeland Security Investigations (HSI) stating there is probable cause to believe the contents of a specific Dwolla account are subject to seizure and forfeiture under US law. The warrant also reveals some of the background details leading up to Tuesday’s halt to Dwolla-Mt. Gox transactions, including the use of a confidential informant who engaged in bitcoin trading over a period of six months.

“Out of respect for the sensitivity of the issue and the two parties’ legal responsibilities, we’ve been encouraging all interested parties to clarify or gather additional information from Mt. Gox and Homeland Security, this includes affected users,” a Dwolla spokesperson reached for comment responded in an email Wednesday.

In the affidavit included in the federal warrant, the HSI agent refers to two applicable statutes of the law:

• 18 USC section 1960, which states, “Whoever knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business, shall be fined in accordance with this title or imprisoned not more than 5 years, or both.” 

• 18 USC section 981, which says the following properties are subject to forfeiture: “Any property, real or personal, involved in a transaction or attempted transaction in violation of section 1956, 1957, or 1960 of this title, or any property traceable to such property.” 

- Read more here: http://www.coindesk.com/why-are-the-feds-seizing-mt-gox-and-dwolla-funds

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Backing Bitcoin James Altucher, of Stockpickr.com, is pre-selling his new book, “Choose Yourself” exclusively on Bitcoin

Backing Bitcoin James Altucher, of Stockpickr.com, is pre-selling his new book, “Choose Yourself” exclusively on Bitcoin

BitPay Hires Jeff Garzik

Elizabeth Ploshay | On 15, May 2013.Yesterday, BitPay Inc, the world’s leading payment processor for Bitcoin announced an expansion to now 10 full time employees. BitPay, founded in 2011 by Tony Gallippi and Stephen Pair, has continued to expand in organizational and merchant growth. Through enabling now almost 7,000 merchants to be able to process payments in the Bitcoin currency, BitPay continues to lead the way in promoting the utility of Bitcoin.

BitPay announced the newest additions to the team. Jeff Garzik, Bitcoin core-developer, will join staff to work full-time on Bitcoin and contribute his knowledge on the core Bitcoin protocol. In announcement of hiring Jeff, Tony Gallippi (CEO, BitPay) stated, “BitPay recognizes the need for more resources and developments in the core Bitcoin protocol, especially in the areas of scalability and reliability…We strongly encourage other Bitcoin companies to do the same, either through crowdfunding efforts or direct contracts, grants, or scholarships.”

Jeff Garzik announced his acceptance of BitPay’s offer: “Bitcoin is growing up, no longer a hobby but now a professional payment network used worldwide. BitPay’s contributions to the bitcoin open source software will benefit the entire community. After working on bitcoin open source software for years as a volunteer, I’m excited that BitPay is now sponsoring my work.” - Read more here: http://bitcoinmagazine.com/bitpay-hires-jeff-garzik

The Feds Are Cracking Down On Mt. Gox (Not On Bitcoin)

5/15/2013 @ 4:07PM Kashmir Hill, Forbes Staff. Mt. Gox, the Japanese exchange that’s responsible for the lion’s share of Bitcoin buying and trading, is having a rough month in the U.S.

First it was sued by CoinLab, a Seattle start-up that claims Mt. Gox dropped the ball on an agreement they inked in November 2012 that would have put CoinLab in charge of Mt. Gox’s North American accounts. In a legal complaint for breach of contract, CoinLab says Mt. Gox owes it $75 million in damages for not following through on their agreement to hand Mt. Gox’s American and Canadian customers over to CoinLab. In that complaint, CoinLab noted one of the huge benefits of the partnership to the Japanese Bitcoin giant: “CoinLab is registered with FinCEN to provide Bitcoin exchange services in the United States and has fully complied with FinCEN’s March 2013 guidance for digital currency exchanges.”

FinCEN is the Financial Crimes Enforcement Network, the bureau of the Treasury Department that seeks to prevent money laundering, terrorism financing, and other financial no-nos. In March, it issued guidance for those dealing in virtual currencies, saying that exchanges need to register as Money Services Businesses (MSBs) and comply with anti-money laundering regulations. - Read more here: http://www.forbes.com/sites/kashmirhill/2013/05/15/the-feds-are-cracking-down-on-mt-gox-not-on-bitcoin

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The coming political battle over Bitcoin

By Timothy B. Lee, Published: May 15, 2013 at 10:47 am. Given that Bitcoin first broke into mainstream attention when Gawker explained how to use it to buy drugs, perhaps the surprise is that it took federal regulators this long to take action against it.

In the wake of the Gawker story two years ago, Sen. Chuck Schumer (D-N.Y.) described Bitcoin as an “online form of money laundering” and called for the authorities to shutter the Bitcoin-based drug market Silk Road. Yet until recently, the feds have taken a relatively hands-off posture. Agencies have issued guidelines and signaled that they are monitoring the situation, but none have taken active steps to force Bitcoin intermediaries to comply with federal regulations.

That hands-off stance may have started to change this week when the feds took action against Mt. Gox, the world’s leading Bitcoin exchange. Many people use Dwolla, a PayPal-like payment network, to send dollars to their Mt. Gox accounts. They then use those dollars to buy Bitcoins. On Tuesday, Dwolla announced that it had frozen Mt. Gox’s account at the request of federal investigators. It’s the first federal action against the currency. Read more here: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/15/the-coming-political-battle-over-bitcoin

Gold and Bitcoin: Currencies of the Future—James Turk

Source: JT Long of The Gold Report (5/15/13). Europe, says James Turk, founder and chairman of GoldMoney, is in the midst of two crises—one in the banking sector, the other related to economic activity, and capital is needed to solve both. As to the allegedly strong dollar, Turk, in this interview with The Gold Report, suggests comparing it to the price of gold rather than other fiat currencies for a better picture. And the world's newest currency—Bitcoin—has a lot in common with one of the oldest—gold.

The Gold Report: James, from your perspective in Europe, is the region in as bad a financial crisis as it appears in the headlines here in the U.S.?

James Turk: Yes, it really is. However, Europe is a big place, and you have to look at the individual countries one by one to understand the situation. Generally speaking, the Mediterranean countries are in the worst shape. Germany has been in the best shape, although recent economic data indicate it may be falling into a recession again. France is not quite as bad as the Mediterranean countries, but in economic activity, it is worse off than Germany and the rest of Northern Europe.

TGR: What role does the euro play in all this, and where might the next crisis take place?

JT: Most of the problems we have seen in Europe are not really euro crises; they are banking crises. That was clearly the case in Cyprus.

The hot spot now is Slovenia, a small Alpine country that is part of the European Union and the Eurozone. Its banks are overleveraged and under scrutiny because of the number of bad loans they carry.

The banks in Luxembourg and Malta are also very highly leveraged relative to the size of those countries' gross domestic product (GDP). This concern follows on what happened in Iceland, Dubai and Cyprus, where the perception was that the banks were potentially vulnerable to "hot money" withdrawals due to the banks' high percentage multiple to the country's GDP. In other words, if depositor money were to flee, those banks might experience liquidity squeezes too big for the government to manage. That is what happened when the European Central Bank (ECB) pulled the plug on Cypriot banks after Russian depositors pulled out large sums. Read more here: http://www.theaureport.com/pub/na/15275

What to watch as the bitcoin drama develops

BY SARAH LACY ON MAY 14, 2013. We all knew this was coming. Bitcoin is disruptive in the most raw sense of the word. Not the “hey, it’s another photo sharing app!” form of disruptive, or even the libertarians wanting new ways to get from point a to point b without saying the word “taxi” kind of disruptive. The biggest bitcoin bulls say it has the potential to be the third major way to buy and sell goods that the world has ever known, after bartered goods and government-backed money.

If the promises of bitcoin could ever be unlocked – perhaps one of the biggest ifs in the tech world today – it’s about as big of a venture-style opportunity as you could imagine. Right now the value of the system is a headline-grabbing $1 billion. But if its potential to be a global, borderless way of buying and selling goods via the Internet were ever achieved, it’s value would one day be in the trillions. It’s a massive potential for value creation that suddenly has people in a lather. Investors like Fred Wilson’s Union Square Ventures have already placed some significant bets – with many more investors quietly mining for opportunities. But despite the massive potential upside, bitcoin is fraught with so much complexity and risk that the potential seems almost impossible to unlock. Read more here: http://pandodaily.com/2013/05/14/what-to-watch-as-the-bitcoin-drama-develops

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Bitcoin: A Brave New World

Posted: 05/14/2013 6:59 pm. Since the mid-'90s the Internet has revolutionized the world. I am old enough to remember the place before. A place in which children used to send thank-you notes for birthday presents by post, where you would need to go out to rent a film from the local video store, or make a trip to a news stand in order to pick up a paper which contained yesterday's news.

But the Internet opened up a new type of world; a virtual one where you can send emails without needing to step outside and post a letter; where you can find out how your friends are via Twitter feeds or Facebook updates -- avoiding the rigmarole of actually knocking on a door and asking; where relationships and even marriages are realized online without the participants ever even meeting in 'real' life.

In fact -- across cyber space whole communities are formed -- manifested in and through digital cities where avatars enjoy virtual lives, travel to virtual workplaces, create virtual families and even endure virtual deaths. In the limitless void of the e-ther, every real world action receives its ghostly cybernetic echo, generating a strange and wonderful realm through the looking glass of your own computer terminal.

But what if the boundaries between the virtual space and the real one began to dissolve? What if things from the one realm started to cross over into the other?

If your knee jerk reaction is to think that sounds like the fantastical stuff of science fiction then I urge you to think again. It is closer than you think! Ladies and gentleman (roll of the drum)... take a look at Bitcoin! - Read more here: http://www.huffingtonpost.com/tony-mckenna/bitcoin-currency_b_3267952.html

Feds Seize Funds of Largest Bitcoin Exchange

By Alec Liu. The US government has shutdown a key source of dollar funding for MtGox, the largest bitcoin exchange.

Dwolla, a Paypal clone popular among bitcoin users, confirmed that the online payment network had received a seizure warrant from the Department of Homeland Security.

"The Department of Homeland Security and US District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillum’s Dwolla account (a.k.a. Mt. Gox)," a Dwolla spokesperson told BetaBeat. "Dwolla has ceased all account activities... for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillum’s balance, per the warrant."

Dwolla didn't say why the seizure happened. MtGox seems to be even more in the dark.

“Like many who have contacted us, MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox,” the company stated in a post on Facebook.

In other words, they have no idea what’s going on. “However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance.”

We can only assume that the US believes some sort of crime is being committed. Read more here: http://motherboard.vice.com/blog/feds-seize-funds-of-largest-bitcoin-exchange

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Team America’s Dwolla bashing is just the start

Published On May 15, 2013 at 11:53 | By John Oates. The idea that the US government cannot regulate businesses which only operate on the internet will come as news to the online poker and gambling companies shut down by the US in recent years. Or indeed Kim Dotcom recently arrested in New Zealand because his Megaupload site upset the US.

So it should come as no surprise to see US authorities taking action against US-based Dwolla. Nor that the action sends ripples through the market – Mt. Gox politely declined to talk to CoinDesk today citing advice from its lawyers. Exchanges are likely to be the first front line in this war – Bitcoin can survive for ever but will struggle for value if it cannot be converted into fiat currency.

A little history

The US government does not like its citizens betting on sports events. So it went after a London-listed company called Betonsports. In 2010 it went after individual staff members and arrested the company’s chief executive David Carruthers while he changed planes at Dallas airport. Carruthers eventually copped a plea and got three years in prison.

Two years ago the US decided it didn’t like online poker either and arrested 11 people working for sites offering the service. It also got fulltiltpoker.com closed down by authorities in Alderney – the Channel Island where the company was based. Read more here: http://www.coindesk.com/team-americas-dwolla-bashing-is-just-the-start

The 13 Weirdest Things You Can Buy With Bitcoin

By ROMINA PUGA (@rominapuga) May 15, 2013. The Bitcoin launched in 2009, and if you don't know what it is by now that's OK because most people don't. Mother Jones even made this excellent explainer and I still don't fully get it.

What I do know is that it's a unit of online currency that isn't controlled by the U.S. Federal Reserve or any other central authority. In August of last year the exchange rate for one Bitcoin was $10. It seems high until you realize that today one Bitcoin is worth roughly $115.

In the last few weeks the virtual currency has blown up as more merchandisers are using it. The goldmine of merchandisers being, of course, the porn industry, which has always been at the front of the line for new technology. Today, amateur porn artists are trying to make bank (cyber bank) by asking for Bitcoins and upvotes on Reddit instead of money. The two most popular Bitcoin porn stars are LadyBytes and Nina1987. But why are they asking for Bitcoins instead of real physical currency? They haven't said.

What is sure is that they're not alone when it comes to weird things you can buy with Bitcoin. Here are a few others. - Read more here: http://abcnews.go.com/ABC_Univision/buy-bitcoin/story?id=19172034

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Google Ventures invests in Bitcoin competitor OpenCoin

Published On May 14, 2013 at 19:38 | By Shirley Siluk. Google Ventures and China-based IDG Capital Partners are the second group of tech investors in two months to place a bet on OpenCoin, the company behind the currently-in-beta Ripple open-source payments protocol.

OpenCoin announced today that it had closed an additional round of funding — the amount wasn’t specified — with Google Ventures and IDG Capital Partners. (Hat tip to GigaOM for the news.)
Last month, OpenCoin wrapped up an earlier angel round of funding from another high-profile group of technology VCs: Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.

Co-founded by Jed McCaleb, a veteran of the Mt. Gox bitcoin exchange, and Chris Larsen, who previously established E-LOAN, OpenCoin is developing ripple, an open-source payments platform being touted as a quick, easy and low-cost way to exchange currency of any kind anywhere in the world. Ripples are also the name for the digital form of money (abbreviation: XRP) that will be among the currencies tradable on the ripple platform. - Read more here: http://www.coindesk.com/google-ventures-invests-in-bitcoin-competitor-opencoin

Feds reveal the search warrant used to seize Mt. Gox account

by Joe Mullin - May 15 2013, 6:46pm FLEDT. Bitcoin exchange shouldn't be dealing in "crypto-currency" without a license.

The Department of Homeland Security is investigating Mt. Gox, the largest Bitcoin exchange, for violating laws on US money exchange and money transfers—and it's grabbing the exchange's money in the process.

DHS officials refused to comment on the ongoing investigation, but they did provide a copy of the warrant that was used yesterday to seize funds that Mt. Gox had in Dwolla, a money transfer service. Dwolla is a Des Moines, Iowa company that provides one of the most popular ways to move US dollars to Mt. Gox, where they can be used to buy bitcoins.

In the warrant, a special agent with Homeland Security Investigations (HSI), states that there's probable cause to believe Mt. Gox is engaging in "money transmitting" without a license, a crime punishable by a fine or up to five years in prison. The warrant goes on to demand that Dwolla hand over the keys to account number 812-649-1010, which is owned by Mt. Gox subsidiary Mutum Sigillum LLC, and held in the custody of Veridian Credit Union.

The funds in that account "are those of Mt. Gox customers that withdraw said funds from Mt. Gox and direct their transfer to Dwolla." - Read more here: http://arstechnica.com/tech-policy/2013/05/feds-reveal-the-search-warrant-that-seized-mt-gox-account

Bitcoin or How I Learned to Stop Worrying and Love Crypto

by CHARLES HOSKINSON. Welcome to the first community built BItcoin course! This course serves as a central point of introduction to Bitcoin for anyone interested. It assumes no special skills or knowledge nor experience in computer science. All are welcome and the course shall forever be free under a creative commons license.

The course is divided into several sections. The Core Lecture Path serves as a comprehensive introduction for beginners on all relevant topics necessary to have a deep understanding of Bitcoin including why Bitcoins have value, why they can be used for anonymous transactions, the current economy of Bitcoins, how they are made and distributed as well as speculation.

The bonus lecture path addresses specific questions students have asked and are not necessary for to satisfy the goals of the course. Feel free to request a bonus lecture at any time! Finally, there are dedicated tracks for more in-depth analysis of the theoretical concepts of Bitcoin alongside the software that makes makes Bitcoin work well. Check out these interesting free courses here: https://www.udemy.com/bitcoin-or-how-i-learned-to-stop-worrying-and-love-crypto

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Department of Homeland Security Shuts Down Dwolla Payments to and From Mt. Gox

By Jessica Roy 5/14 4:07pm. The DHS issued a "seizure warrant" for the funds associated with Mt. Gox's Dwolla account.

The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. A Dwolla representative confirmed the move to Betabeat. Chris Coyne, cofounder of OKCupid, posted a screenshot of an email he received from Dwolla, stating that due to recent orders from the Department of Homeland Security, Dwolla cannot complete the bank transfer to Mt. Gox.

A representative for Dwolla told Betabeat that the company is “not party” to this matter and encourages those with questions to reach out to Mt. Gox or the DHS.

“The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),” he said. “In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”

“Dwolla requires a court order before honoring requests such as seizing funds or revoking access to an account,” he added. - Read more: http://betabeat.com/2013/05/department-of-homeland-security-shuts-down-dwolla-payments-to-and-from-mt-gox

Bitcoin 2.0: Can Ripple Make Digital Currency Mainstream?

The company is trying to create an online money system that is easy for everyone to use, not just the insiders who feel comfortable trading in Bitcoins. It’s all built on a massive system of personal trust.

It has been a nail-biting year for people who hold Bitcoins, an open-source digital currency that has quickly gained traction in the tech community. Last June, Bitcoins were worth $5. By April 2013, they were up to $266. Then they dropped to $70 in April. They were back up to $108 by May 7. Bitcoin is volatile. We know that much. It’s also vulnerable. Mt. Gox, the biggest Bitcoin exchange (where users go to exchange Bitcoins for other currency)--was recently faced with multiple DDoS attacks , shutting down the site temporarily.

But here’s the thing about open-source currencies: they’re open to improvement. Ripple, a platform that just received funding from Google Ventures, Andreessen Horowitz, Lightspeed Venture Partners, and others, has created both an alternative to Bitcoin and a distributed currency exchange for Bitcoiners (and others) who aren’t comfortable using only Ripple’s currency, known as XRP.

Bitcoiners could have reason to be suspicious of Ripple right off the bat. Whereas Bitcoin was created anonymously and relies on a foundation to standardize and protect the currency, Ripple is the product of OpenCoin, a public-facing company that just raised funding from a number of firms. OpenCoin plans on holding 25% of all the XRP in existence--the idea being that as the currency becomes more valuable, the company will have more resources to fund its operations (and presumably, to make its founders quite wealthy). There’s nothing intrinsically wrong with OpenCoin wanting its currency to rise in value, but the system is dramatically different from Bitcoin. - Read more here: http://www.fastcoexist.com/mba/1682032/bitcoin-20-can-ripple-make-digital-currency-mainstream

Lightspeed Anchors Bitcoin Startups in Adam Draper’s Incubator

May 14, 2013, 11:00 AM. By Lizette Chapman. Further bolstering the Bitcoin movement, Lightspeed Venture Partners and other investors have pledged to back all Bitcoin-related startups graduating from Adam Draper’s new incubator Boost VC.

The move comes during a surge in interest around the crypto-currency and its potential to expand from a niche $1 billion market of enthusiasts to a multi-trillion dollar mainstream marketplace. U.S. regulators acknowledged the currency earlier this year and venture capitalists including Andreessen Horowitz and Tribeca Ventures are among those backing a rash of startups building digital wallets and other components of the new monetary system.

Draper, a fourth-generation venture capitalist and son of Draper Fisher Jurvetson co-founder Tim Draper, is passionate about promoting the alternative currency. Making it a major focus of his incubator’s second class, which starts next month, was a logical and timely move, he said. Creating a fund to back such startups was largely investor-driven.

“I’ve had 150 meetings with Bitcoin investors, companies and enthusiasts,” said Draper. “It’s been two straight months of meetings.”

Roughly half of the 15 or so startups in Boost VC will focus on consumer Internet and mobile technologies. The other half will focus on technology and services geared toward taking Bitcoin mainstream and making the currency easier to use. Read more here: http://blogs.wsj.com/venturecapital/2013/05/14/lightspeed-anchors-bitcoin-startups-in-adam-drapers-incubator

Bitcoin’s mysterious creator remains anonymous

May 10, 2013 in Business. LONDON, Bitcoin, the four-year-old virtual currency that approximates cash on the internet, now powers an economy worth more than US$1 billion and is widely admired for the technical sophistication that allows it to operate without a central authority.

The Verge.com

It got its own ticker on CNBC and inspired a legion of startups. And yet, no one knows where it came from.

Bitcoin was first introduced to the world by the pseudonymous Satoshi Nakamoto, a persona who communicated by email and in the official Bitcoin forum before abruptly disappearing. No one has ever met him or her, or at least no one who will admit to it.

No one knows if Nakamoto is male or female. His (or her) early emails even refer to a “we.”

Both The New Yorker and Fast Company tried and failed to unmask Nakamoto. The ongoing crowd-sourced investigation hasn’t done any better.

“People analyse Satoshi’s written words, trying to divine if he speaks native British English, American English, or learned the language as a second language,” said Jeff Garzik, a developer who works on the Bitcoin Project and emailed with Nakamoto in the early days.“They analyse his posting dates, trying to guess his local time zone. It’s all part of the fun.”

But two weeks ago, programmer Sergio Demian Lerner discovered something new about Nakamoto.

Bitcoin is designed to mimic gold in some ways. Anyone can “mine” for new Bitcoins by running the Bitcoin client. The process is designed to get more difficult as more people start mining. At first, the client could create 50 Bitcoins in an hour running on an average laptop.

It now takes a day to generate three Bitcoins using a powerful machine that does nothing else. - Read more here: http://www.theindependent.co.zw/2013/05/10/bitcoins-mysterious-creator-remains-anonymous

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Let’s Talk Bitcoin Episode 007 - “Ripple & the Deflationary Business Model”

letstalkbitcoin.com / By Adam Levine / May 15, 2013.



Hosts:
Adam B. Levine
Stephanie Murphy, PhD
Andreas M. Antonopoulos

Shownotes for Episode 7 - “Ripple & The Deflationary Business Model ”

• Listener Mail: Coldwallets & Hidden Features
• Learning Ripple with Chief Cryptographer David Schwartz
• The Power of Exchanges and Bitcoins AOL moment
• Apple’s doesn’t like competition - Motives, Walled Gardens, and the amazing features of a Deflationary Currency Business Models
• The Humble Bundle Breakthrough & the other shoe drops

INVESTORS, PLANS AND MONEY: Bitcoins, the strange new world of digital currency

By Bill Harris Wicked Local Plymouth Posted May 10, 2013 @ 10:00 AM. In less than a month, a thinly traded, obscure currency quintupled, climbing on trading exchanges from roughly $50 in mid-March to a high of $266 April 10. Then, as quickly as it inflated, a bubble burst, crashing the currency down more than 75 percent before climbing right back up again to the mid $130-range. The price of this currency has increased almost 20-fold this year.

During this same time, a Cyprus bank bailout has been in play. Ultimately, the deal will restructure Cyprus’s largest banks and force their creditors and large depositors to take massive losses.

Failing banking systems are usually big events that drive up gold prices. As the price of gold crumbled and approached a 52-week low, however, this other currency emerged and surged. Did Cypriot and European depositors fleeing a failing banking system use this currency as an exit strategy? This event may be a footnote in history, or it may mark the beginning of a new world order for currency, a virtual or digital currency called Bitcoin.

Bitcoins, or fractional Bitcoins called Satoshis, can be bought and sold in return for traditional currency on several exchanges. Bitcoins can be transferred across the Internet from country to country, user to user, without bank charges or exchange rates. This makes Bitcoin a potentially attractive currency in which to settle international transactions. All transactions and exchanges are anonymous. - Read more here: http://www.wickedlocal.com/plymouth/topstories/x522267978/INVESTORS-PLANS-AND-MONEY-Bitcoins-the-strange-new-world-of-digital-currency

Bitcoin Has A Bright Future

BY Covestor.com | 05/13/13 - 06:20 AM EDT. It’s hard to know which there are more of these days: the number of Bitcoins worldwide or the number of pundits who believe the newly popular crypto-currency is a fad, doomed to failure, or both.

But rather than pile on, I have come up with several reasons why Bitcoin can succeed.

Bitcoin screw-ups have resulted in fewer Bitcoins but never more of them

A natural consequence of a rise in value of something is the creation (or mere appearance) of more of that thing. Whether tulip bulbs, Impressionist paintings or dot-com stocks, a rise in the value of originals begets an increase in the supply of copies. These copies can be legitimate (e.g., follow-on stock offerings), or counterfeits (ultra-rare Ferraris cobbled together from parts of less-rare Ferraris).

But in the four years of Bitcoin’s existence, any increase in the number of available Bitcoins has been through the legitimate Bitcoin “mining” process, governed by the clever software that brought it into existence, and which permits mining of the crypto-currency.

As noted by TechCrunch, “there have been attacks on independently-run Bitcoin wallets and exchanges, [but] the core 31,000 lines of Bitcoin [software] haven’t been compromised despite being available to the world’s best hackers and cryptographers for the last four years.”

So, despite huge profit motives (both legal and otherwise) the supply of Bitcoins is stable, growing in accordance with the algorithms that define the currency, and outside the control or influence of third parties. - Read more here: http://www.thestreet.com/story/11922127/1/bitcoin-has-a-bright-future.html

First Bitcoin, Now Amazon Coins – Amazon Releases New Virtual Currency

May 13, 2013 By Thomas Harper. Today Amazon announced they have launched their own virtual currency, called “Amazon Coins”. With all the recent fanfare with Bitcoins, it was inevitable that other companies would test the currency waters. If you’ve been living in a cave for the past year, let us explain what Bitcoin is in a nutshell.

According to their website, “Bitcoin uses peer-to-peer technology to operate with no central authority; managing transactions and the issuing of bitcoins is carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment systems.” - Read more here: http://highlightpress.com/first-bitcoin-now-amazon-coins-amazon-releases-new-virtual-currency/1343/tharper

How Young Entrepreneurs Are Cashing In On The Bitcoin Buzz

Andrea Huspeni, Young Entrepreneur| May 11, 2013, 5:31 PM. Bitcoin may be a virtual currency, but the buzz it's getting on the street is very real.

You can't open a website or newspaper these days without reading about Bitcoin, the digital currency that was invented in 2009 by a mystery person who goes by the name of Satoshi Nakamoto. The latest news is Fred Wilson's Union Square Ventures just agreed to help fund a $5 million round of investment into Bitcoin wallet Coinbase.

Similarly, early-stage investment firm Draper Associates backed Bitcoin startup CoinLab with $500,000, and the San Francisco-based accelerator Y Combinator, which helped incubate Coinbase, took a stake in that company. Then, investors like the Winklevoss twins, who famously claimed to have come up with the idea for Facebook before Mark Zuckerberg, have also reportedly poured $11 million into purchasing Bitcoins.

So what's all the fuss about?

The currency -- which back in August of 2012, was valued at $10 and recently held steady around the $115 mark -- is attractive to individuals, as it provides untraceable transactions. Anyone in the world can, for example, move money in a matter of minutes without the hassle of any central government agency controlling it. - Read more here: http://www.businessinsider.com/young-entrepreneurs-cashing-bitcoin-buzz-2013-5

Here come the geeks, and this time they’re rich

Published On May 13, 2013 at 16:10 | By John Oates. Bitcoin is due to change the face of finance, but could have interesting social effects too, according to a leading security researcher.

Mikko Hypponen, chief research officer at F-Secure, believes Bitcoin could have a major impact beyond online payments.

He said: “I first heard about Bitcoin in 2009 and thought it was very interesting and invented by a genius. I first thought it was a huge waste of computing power but them realised that the system was doing something useful – tracking transactions. I’m not sure that Bitcoin will be the breakthrough digital currency, but it will be something which looks very like it.”

Hypponen said that only the ‘geekiest of the geeks’ were involved in early bitcoin mining, assembling their own machines and rigs. He said: “We’ve seen what bankers do when they get rich but the recent success and speculation around Bitcoin guarantees that the geekiest geeks on the planet will get rich – what will they do with their money? It will be interesting to see what these super-geeks decide to invest in.” Bitcoin mining in 2009 was very much a niche interest – Satoshi Nakamoto’s paper outlining the Bitcoin protocol was only published in 2008. Read more here: http://www.coindesk.com/here-come-the-geeks-and-this-time-theyre-rich/

Bitcoin Price 2013: Could Bitcoin Destroy Government Control Of Currency?

Jeff FonginBusiness,Currency 21 hours ago. As Bitcoin gains wider acceptance, monetary officials will face increasing competition both directly from Bitcoin and from the way in which Bitcoin tears down the barriers between the fiats themselves.

Functionally, Bitcoin is very much like cash. But instead of a leather wallet, Bitcoins are stored on hardware like smartphones, laptops, or servers in the cloud.

Unlike fiat money, no central authority controls the supply of Bitcoins. The currency is governed by an open source code which dictates the rules governing the currency. In place of a central ledger to record transfers, the system distributes the process of verifying and recording transactions across the entirety of the user network. The distributed nature of the system means there's no master server to attack, so physically taking down the network would be something like trying to decapitate a starfish.

This decentralized architecture and freedom from third-party intermediaries is what insulates the system from unilateral control; it's also what makes it problematic for governments to regulate it and open to competition. And out of all the inflation-happy governments out there, Argentina may be the first to feel the Bitcoin constraint. Read more here: http://www.policymic.com/articles/41349/bitcoin-price-2013-could-bitcoin-destroy-government-control-of-currency

Bitcoin gets fashionable: Bitfash wants to connect labels like Zara to Bitcoin-rich buyers

Published 13 May 2013 09:46, Updated 13 May 2013 14:51. First came Bitcoin. Then came the company that has become the digital currency’s equivalent to PayPal, Bitpay. Now, there’s BitFash.

When entrepreneurs start seeing promise in a product or technology, it often suggests a growth area. Bitfash is a startup company launched in April and based in both China and Australia that lets customers buy global fashion brands and pay exclusively in bitcoins.

The startup is another signal that there are many people who think bitcoins are the currency of the future – or at least the future for online transactions. It also demonstrates that bitcoin traders are not just underground technology experts keen to hoard bitcoins should the US dollar suffer from a massive price collapse.

“The site has been very popular, we are seeing typical highstreet consumers wanting to transact using Bitcoin, ”says Bitfash co-founder Chris Woods, who adds it shows the perception that bitcoin users are people in dark rooms is not true. “Bitcoin users are actually a fashionable group.”

Created in 2009, Bitcoin is the world’s most widely used experimental digital currency. There was a flood of fresh interest in the cryptocurrency this year thanks to what has been described as a price bubble – and bust – in April and some high profile names like the Facebook Winklevoss twins buying up bitcoins. - Read more here: http://www.brw.com.au/p/brw-lounge/bitcoin_buyers_fashionable_bitfash_BSdOJrl3KlXUdg0kn5AusN

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Bitcoin Not Bombs - Porc Therapy bonus show!

Check out this bonus show to hear what's happening with Bitcoin Not Bombs, a launching pad for bitcoin nonprofit organizations. You've got to see their new bitcoin shirts, which not only look cool but help out Fr33 Aid, Antiwar.com, and the Free State Project.

http://BitcoinNotBombs.com

Bitcoin Not Bombs - Porc Therapy bonus show!