Bitcoin Drama

TradeHill

Bitcoin Exchange TradeHill Suspends Trading

The Bitcoin economy may be in some real trouble. After the announcement last week that e-payments service Paxum would no longer support Bitcoin clients, at least one major Bitcoin exchange has shut down. Chile-based TradeHill had been using Paxum, a PayPal competitor, for a large percentage of money transfers. The loss of Paxum, coupled with recent problems banking with Citibank that caused TradeHill to fall behind on processing transactions and other troubles, left the founders feeling like they had no choice but to suspend trading and return client deposits. Read More

Fun With Bitcoins

Drugs, or not drugs? (wikipedia.org)

Silk Road, Secret Website Where You Can Buy Drugs, Is Hiring

No publicity is bad publicity: Silk Road, the illicit online marketplace that came to light after Gawker’s Adrian Chen announced you could buy any drug imaginable there with Bitcoins, has been booming after increased awareness due to a rash of alarmist press coverage.

Drugs! Anonymous currencies! Hackers! Our children! But gradually Silk Road, and to a lesser degree Bitcoin, faded from the stage, largely because most people couldn’t understand how to use them. Silk Road can only be accessed using the anonymous network Tor, and you should probably know a thing or two about encryption before you buy anything.  Read More

Law and Order

Eight Months After Sen. Chuck Schumer Blasted Bitcoin, Silk Road is Still Booming

Way back in June, before Sen. Chuck Schumer wanted to break the internet, he wanted to break Bitcoin. After an incendiary story about Silk Road on Gawker, the site NPR called “the Amazon.com of illegal drugs,” senators including Sen. Schumer were up in arms. But Silk Road lives on, according to reports from techies savvy enough to traverse Tor to get there. Read More

It's All About the Bitcoins

A scene from "Bitcoin for Dummies."

Bitcoin on TV! The Good Wife Riffs on Satoshi With ‘Mr. Bitcoin’

Bitcoin has made its way into the great canon of television drama. The e-currency made its television drama debut last night on CBS’s legal thriller The Good Wife. Jason Biggs guest starred as an information rights lawyer who gets in trouble when he refuses to reveal to the Treasury Dept. the name of a client who created an online currency called Bitcoin. Treasury wants the name of the mysterious Mr. Bitcoin, as anyone who mints a private currency in competition with the dollar is in violation of the federal law—and puts Mr. Biggs’s character on the hook for 18 months, then 10 to 30 years of inprisonment. Treasury thinks Bitcoin is being used for illegal activities. Jim Cramer testifies in court. Drama! Read More

Bitcoin Saga

btc gartner hype cycle bitcoin

Union Square Ventures Almost Invested in Bitcoin

Fred Wilson, internet-famous VC and principal of the well-regarded Union Square Ventures, is long Bitcoin. The investor read the article in December’s issue of Wired (basically, Is Bitcoin Over?) and concluded that Bitcoin hasn’t peaked, despite a streak of bad news and a depressed value–it’s merely moving along the Gartner hype cycle, moving from the “trough of disillusionment” into the “slope of enlightenment.” In other words: a spike of overinflated interest is followed by a drop in traction which is followed by steady, healthy growth. “The hype cycle model rings so true to me because it maps out what has happened with the commercial Internet over the past fifteen years,” Mr. Wilson blogged. “In 2002/2003, so many people thought the Internet was “over” as an investment opportunity. And they were wrong.” Read More

Early Holidays

(bitcoinsforchristmas.com)

Introducing the ‘Bitcoins for Christmas’ Campaign

Josh Strike of Bitcoin gambling house StrikeSapphire Casino and Mark Miele of thebitcointrader.com just launched a merry marketing push that the entrepreneurs hope will be considered “a Christmas present to the whole Bitcoin community.” Aw, you guys! Bitcoins for Christmas encourages Bitcoin users to put some digital currency in the digital stockings of their families and friends, sending lucky recipients an electronic candygram with instructions on how to pick up their BTC. Read More

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Bitcoin Mining Still Profitable for Some; Hardcore BTCers Keep the Faith

Is mining Bitcoin still profitable at current prices? By some calculations, no. Energy costs per kWh vary widely state-by-state, from $.07 in North Dakota to $.17 in New York, and hobbyists mining at home may find the numbers discouraging. Yesterday afternoon, Bitcoin was trading at $2.23 when Betabeat checked in with Alex Spitzer, a developer for the New York-based recommendation engine Hunch, who has been mining for about a year and a half in Massachusetts, where the price is $.14 per kWh. He estimated that he mines about .35 BTC a day–so if the price stayed the same, it would take him more than 1,000 days to be profitable. If he didn’t have free power at a buddy’s office, that is. Read More

Bitcoin Drama

satoshi

The New Yorker’s Joshua Davis Attempts to Identify Bitcoin Creator Satoshi Nakamoto

The New Yorker has a great story in its upcoming issue about Bitcoin, the cryptocurrency still trucking along after a glorious rise in value to $33 USD due to a spate of media-driven attention followed by a plunge to about $5 USD, where it stands now. The writer, Joshua Davis, attempted to find Bitcoin’s creator, the probably pseudonymous Satoshi Nakamoto, who after years of prolific postings on the internet wrote to Bitcoin project lead Gavin Andresen in April that he had “moved on to other things.”

“He’s a world-class programmer, with a deep understanding of the C++ programming language,” Dan Kaminsky, one of the country’s top internet security experts, said of Mr. (or Ms.) Nakamoto. ”He understands economics, cryptography and peer-to-peer networking. Either there’s a team of people who worked on this, or this guy is a genius.”

Mr. Davis started following Mr. Nakamoto’s trail of online writing, and noticed that, after an initial post announcing Bitcoin that used American spelling, the programmer used the British spelling, referred to London newspapers and at one point using the phrase “bloody hard”–suggesting he had lived or studied in the U.K. or Ireland.

Mr. Davis headed to the close-knit cryptography conference Crypto 2011 to find more traces of Nakamoto. He found nine attendees who fit the bill. Two were dismissive of Bitcoin; two had no history with large software projects. Then Mr. Davis started looking into a man named Michael Clear. Read More

It's All About the Bitcoins

bitcoin banner

Despite Cyberattacks and Overspeculation, Bitcoin Economy Continues to Evolve

Bitcoin has been trading at the depressed price of between $6 and $7 USD for the past few weeks, which seems bad for the once high-flying digital currency that had climbed to $33 USD at one point. Hardly a week has gone by without some extreme crisis. In addition, New Yorker finance columnist James Surowiecki, wrote a long treatment of Bitcoin for the MIT Technology Review in which he notes pessimistically that “the number of actual transactions conducted in bitcoins, and the value of those transactions, has been shrinking.” Read More