On January 17 , 2014 we published – Bitcoins and Virtual Currencies – The Alternative Currency World.
How the world has changed in such a short time.
- On the one hand, more and more ways are popping up to enable the use of Alternate Currencies, and
- On the other hand – SCANDALS on top of SCANDALS.
The Current Situation – Bitcoins Gain Acceptance
Many people made a great deal of money when Bitcoins rose in value from pennies to hundreds of $$$. Now, how to spend this wonderful profit?
We Start with a Quote from Forbes magazine of February 17, 2014:
How To Use Bitcoin To Shop At Amazon, Home Depot, CVS And More
Two of the country’s biggest names in e-commerce, Overstock.com and TigerDirect.com, ……………………. with their recent decisions to start accepting Bitcoin as payment.
………….., users of the controversial peer-to-peer digital system can spend their cryptocurrency in brick and mortar stores including Home Depot, CVS, Kmart and Sears as well as online at web retail granddaddy Amazon.com.
[A workaround known as] eGifter.com allows shoppers to pay for any of their 150+ digital gift cards in Bitcoin straight from the checkout line at national retail chains using their mobile app for iOS or Android. eGifter uses Bitcoin wallet Coinbase to process transactions, ensuring they’re secure.
……………………………………… “Bitcoin users don’t have as many places to spend as they might like, and many of them have made quite a bit of money in the past year,” ………………………………………… “These big retailers will have to accept Bitcoin over time, but it’s going to be a process years in the making,” he said. “Therein lies the opportunity for folks like us.”
Bitcoin Use Spreads
Calgary Herald January 26, 2014
MONTREAL – Will that be cash, credit card or Bitcoin?
A small number of Canadian businesses now accept Bitcoin, the digital currency that made its debut five years ago, and has been gaining momentum ever since. ……………………………………………. Bitcoin transactions are seen as more convenient than other forms of payments as they are sent directly and instantly from one person to another, avoiding processing and other fees usually charged by banks or third parties. Travellers can avoid avoid carrying cash, or paying fees on travellers cheques or for currency exchanges, said Mancini.
………………………………………………………………… The half-dozen merchants in Baie Saint-Paul are among 143 Canadian businesses accepting the digital currency, according to the Canadian Bitcoin Business Directory.
To use Bitcoins, users must first set up a so-called digital wallet, which gets managed through an app. The transactions involve buyer and seller scanning each others’ smartphones to transfer the Bitcoins. Vancouver saw its first Bitcoin automatic teller machine go live in a downtown Vancouver coffee shop last fall, followed by Toronto and Ottawa. Consumers can exchange Canadian cash for the digital currency at the current exchange rate.
But there remain concerns for the business community, according to researcher David Descoteaux, who recently prepared a report on the currency for the Montreal Economic Institute. Descoteaux points out is is almost impossible to have any legal recourse in cases of fraud as, once confirmed, transactions are irreversible.
The volatility of the value of Bitcoins, which is not regulated by any central bank, is also an issue. It jumped 50 per cent on Nov. 18 after regulators signaled that digital currencies could be acceptable but plunged 30 per cent on Dec. 5 after China’s central bank banned Bitcoins as currency, according to the online exchange Mt.Gox.
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Bitcoin is Now Traded As If a Stock Market
We Went Inside The Raucous Bitcoin Trading Pit That Sits In The Shadow Of The New York Stock Exchange
Bitcoin Center NYC
The floor of the New York Stock Exchange has been pretty quiet for years now, most of the trades having moved onto servers in New Jersey.
If you want real pit action, you need not travel very far: One block up Broad Street each Monday, the floor of the Bitcoin Center NYC comes alive with the shouts of traders exchanging bitcoin.
They call it “Satoshi Square,” after the digital currency’s pseudonymous founder. In-person bitcoin trading began in Union Square this past summer, and has now moved to the center for the winter. Yesterday was the third week in a row that the Center, founded last month by real estate developer and Bitcoin enthusiast Nick Spanos, has hosted it.
Last night, about 100 people showed up, though fewer than a quarter actually went into the pit. Orders are taken in millibits, or thousandths of a bitcoin. With the average bitcoin price ata little more than $800, it’s not very much. But the intensity is palpable. Obviously, the market is unregulated. But no one is taking commissions, and all of the trading is proprietary, something the Treasury Department just ruled does not fall under their statutes.
Once orders were taken and closed, they were settled through Bitcoin wallets accessible on the traders’ smart phones. It’s relatively simple: The parties swap their public keys — basically, routing numbers — and transmit the agreed-upon amount changing hands.
BUT – All is NOT Good in BitCoin World
According to Fox News of February 16, 2014,
NY officials cite money laundering, other crimes as downside to Bitcoins, urge more oversight
NEW YORK – Law enforcement officials say criminals cashing in on the anonymity of virtual currency need more roadblocks in the way of regulations. Several law enforcement experts in recent weeks have urged for better controls to stem crime that has emerged since Bitcoins became popular.
Manhattan District Attorney Cyrus Vance Jr. says state regulators need to help tame a digital Wild West. Deputy U.S. Attorney Richard Zabel (ZAY-bell) said at a hearing last month that criminals think it’s easier to conceal their activities, identities and proceeds with Bitcoins.
Investigators say recent probes of Liberty Reserve and the hidden website Silk Road show what can happen when Bitcoins fall into the wrong hands. Prosecutors in Liberty Reserve say the Costa Rica-based operation processed 55 million illicit transactions worldwide for 1 million users
BitCoin Theft – Oh My God – Virtual Currency Theft??? How Can It Be?
Major Online Marketplace Silk Road Hacked — Someone Stole All Its Bitcoins
The anonymous marketplace for illegal drugs has been hacked. Defcon, a pseudonymous administrator for the site, shares the following details:
Nobody is in danger, no information has been leaked, and server access was never obtained by the attacker.
Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as “transaction malleability” to repeatedly withdraw coins from our system until it was completely empty.
Despite our hardening and pen-testing procedures, this attack vector was outside of penetration testing scope due to being rooted in the Bitcoin protocol itself.
You probably recall a major attack that went out against several major bitcoin exchanges earlier this week, which was also made possible by transaction malleability. No money was lost then, but all bitcoins associated with Silk Road have been stolen, according to DeepDotWeb.
Now The Value of Bitcoins is Affected
Bitcoin Touches $220 On Formerly Dominant Exchange MtGox — After 60% Plunge
Bitcoin is currently trading at near $250, according to Bitcoin exchange MtGox
It got as low as $220.29 from a high of $540.
Once the largest platform for trading Bitcoin, MtGox recently halted withdrawals, which exacerbated people’s fears about having their wealth in the digital currency.
The good news for Bitcoin adherents is that the currency is still trading near $600 on other exchanges. Mt. Gox, once the gold standard of Bitcoin exchanges, has been having technical problems. Here’s a chart of Bitcoin prices per Coinbase, another exchange.
Investing in Bitcoins or other Virtual Currencies
This is a new world, where fortunes can be made or lost. For the adventurous, it is a place to play, but play not with money that you can’t afford to lose.
The value of a Bitcoin has shown dramatic swings in value, and not always from predictable events. A Bitcoin perhaps is worth $600. A month ago it was worth $800. Two months before that it was worth $1,200. Two months before that it was worth $10. It has unlimited upside as the total of this virtual currency is limited, and downside of whatever it is worth today.
Sometimes it is better to choose later entrants in this race that have not yet shown the explosive upward growth, but have really solid basics and are in 2nd place.
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