It's All About the Bitcoins

Despite Cyberattacks and Overspeculation, Bitcoin Economy Continues to Evolve

bitcoin banner

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

8-Bit Traders

Bored With Bitcoin? BitInstant Is About to Goose the Market By Making Trading Faster

Wake me up when the markets move.

The Bitcoin markets have been sleepy over the past week or two, and Bitcoin traders are starting to whine. What happened to the drama of hacks, the excitement of skyrocketing prices? The biggest news out of the weekend’s Bitcoin World Conference and Expo was that the organizers teased future conferences in Thailand and Amsterdam. “As fun as it was, seems there were no great world-shattering announcements that would affect the world of bitcoin in the near future,” one Bitcoiner who was present told Betabeat. “Other than more conventions as announced by Bruce.” On the Bitcoin Forum at bitcointalk.org, user tacotime wrote: “Well, someone buy or sell a bajillion BTC and do something, it’s boring as hell right now out there.”

But the Bitcoin markets may soon pick up again as a Bitcoin start-up launching later today, in partnership with one of the better-known exchanges, is likely to encourage a new crop of casual traders and the Bitcoin-curious.  Read More

New Money

Want to Short Bitcoin? Derivatives Trading ‘Coming Soon,’ Say Exchanges

boilerroom

It seems like more and more investors are jumping in on the sport of Bitcoin speculation; with so much potential volatility, there’s plenty of money to be made buying and selling BTC. Even professional foreign currency traders think so! We’ve been impressed by the sophistication of the Bitcoin economy so far, but at the same time there’s a clear contingent of Bitcoin-naysayers who think the idea that a chunk of code goes for $13 or so means we’re looking at a big fat Bitcoin bubble and would love to short the market. So it seems like only a matter of time before the 8-bit traders start innovating more complex digital financial instruments.

Ruxum, a Bitcoin exchange launched last week by a former Citigroup vice president, is considering brokering short sales and other derivative transactions. But not just yet, founder Chad Pankewitz told Betabeat in an email.  Read More

New Money

New Bitcoin Exchange Targets High Rollers, Claims ‘Wall-Street Level Security’

chad pankewiz

Ladies and gentleman, we have a third new Bitcoin exchange. “Bitcoin exchanges popping up like daisies!” says the Bitcoin Money blog. About a month after Mt. Gox was hacked and Tradehill.com hit the web, a former Citigroup vice president now based in Canada and China is launching Ruxum Exchange in invite-only beta. The site emphasizes usability and its “Wall Street-level security,” according to TechCrunch, and accepts USD, EUR, GBP and JPY with more currencies to come. The site’s security is rigorously audited by a third party, according to Ruxum, and it has back-up databases in two separate physical locations and has developed procedures to deal with breaches. Otherwise its security measures are pretty standard: encrypted passwords and data connection, requiring strong passwords, and so on. “These are people who don’t fuck around,” observed one Reddit user. Read More

Digital Currencies

Those 500K Bitcoins That Caused a ‘Flash Crash’ Weren’t Real

Mr. Karpeles.

It looks like the hacker who breached Mt. Gox made off with about $34,000 worth of Bitcoin and then artificially crashed the market by dropping a sell order for 500,000 BTC, according to the post-mortem about the hack published by Mt. Gox. But while the hacker did withdraw 2,000 in actual BTC, which Mt. Gox is replacing at their own expense, the enormous sell order was vapor:

We would like to note that the Bitcoins sold were not taken from other users’ accounts—they were simply numbers with no wallet backing. For a brief period, the number of Bitcoins in the Mt. Gox exchange vastly outnumbered the Bitcoins in our wallet. Normally, this should be impossible.

The sales could not have been completed because there were no actual Bitcoins to transfer. The hacker had simply assigned himself a huge number of BTC, which was enough to place orders on Mt. Gox and confuse the market.  Read More

Digital Currencies

Bitcoin Price Holds in Spite of Hacks

btc

Bitcoin, the digital cryptocurrency, is a plausible universal web-based money with two major failure points. One is government regulation, due to Bitcoin’s usefulness in criminal activity and potentially disruptive threat to the dollar and the global financial system (oh, is that all?); the other is its susceptibility to being stolen, counterfeited, or vaporized by virtue of being made of ones and zeros. After a few years of merry trading, Bitcoin is having a moment–speculators are going crazy over it and the mainstream is learning about it. But it’s also facing its first real viability tests. Read More

Digital Currencies

Bad Days for Bitcoin: Trading Around $14 After Epic Hack, and Shunned by the EFF

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The main Bitcoin exchange, Mt. Gox, is still down after an epic hack that drove the currency’s price below a penny. You can now file a request to recover your account, Mt. Gox says, but they’re still working to repair the security breach that allowed a hacker to break in to their database via a third party who had access to it. But competing exchange TradeHill is back up, and there the currency has resumed its bumpy movements after having flatlined since Sunday. The currency is trading at about $14 right now. Read More

Money Down

Bitcoin Exchange Hacked! Trading Suspended! Currency Could Be Worth Anything

How deep does this Bitcoin rabbit hole go? The virtual currency is looking less and less like videogame money and more and more like real world money. The BTC exchange Mt. Gox shut down over the weekend after a miniature version of Wall Street’s famous “flash crash,” in which high-frequency trading caused the Dow to drop 600 points. The BTC crash was caused by a massive sell-off that sent its value spiraling down to $.01 and then, somehow, into the negative, within minutes. Read More

New Money

Bit O’Money: Who’s Behind the Bitcoin Bubble?

Satoshi Nakamoto is the pseudonymous creator of Bitcoin.

It was a tweet from a stranger that crystallized the concept of Bitcoin for Bruce Wagner. “I can explain the benefit of Bitcoin in four words,” one of Mr. Wagner’s 12,000-some Twitter followers wrote. “Briefcases full of cash.”

At the time, briefcases full of pennies seemed more apt—one unit of the new virtual currency was then worth $0.06. Then, in one day, the price of a Bitcoin jumped to $0.22. Mr. Wagner, a former I.T. specialist who now produces and stars in his own web TV shows, became obsessed with the things. He sat at his computer, too excited to eat, reading the myriad white papers, trade blogs, technical analyses and forum discussions about Bitcoin. For five days, he hardly slept. He just kept thinking, This is amazing. This is going to change everything.

The last time he’d been this excited was when Windows came out. He got his hands on some Bitcoins and sold when the price doubled. It kept climbing. He invested more.

Bitcoin is Internet gold, a digital currency developed by a community of programmers in 2009 that represents the first plausible manifestation of an unregulated global “cryptocurrency” first imagined by anarchist computer hackers in the late 90’s. Read More