thenews
28438
thenews  

Creator Of Netscape Praises Bitcoin, Compares It To The Invention Of PCs And The Inte

The venture capital firm of Marc Andreesen, the creator of the first web browser, Andreessen Horowitz, has invested just under $50 million in Bitcoin-related start-ups. The firm is actively searching for more Bitcoin-based investment opportunities. Here's is one of the reasons why: from an excerpt in an Op-Ed Andreesen just posted on the NYT (the same place where that ecomedian, Paul Krugman, can't stop bashing it).

A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers.

Political idealists project visions of liberation and revolution onto it; establishment elites heap contempt and scorn on it.

On the other hand, technologists — nerds — are transfixed by it. They see within it enormous potential and spend their nights and weekends tinkering with it.

Eventually mainstream products, companies, and industries emerge to commercialize it; its effects become profound; and later, many people wonder why its powerful promise wasn’t more obvious from the start.

What technology am I talking about? Personal computers in 1975, the Internet in 1993, and — I believe — Bitcoin in 2014.

...

[S]ome prominent economists are deeply skeptical of Bitcoin, even though Ben Bernanke, the former Federal Reserve chairman, recently wrote that digital currencies like Bitcoin “may hold long-term promise, particularly if they promote a faster, more secure and more efficient payment system.” And in 1999 legendary economist Milton Friedman said, “One thing that’s missing but will soon be developed is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A — the way I can take a $20 bill and hand it over to you, and you may get that without knowing who I am.”

Economists who attack Bitcoin today might be correct, but I’m with Ben and Milton.

read more

pavaka
4411
pavaka  

"the way I can take a $20 bill and hand it over to you, and you may get that without knowing who I am.”-Bring it on! Give me as many $20 bills as possible!...and I don't care who you are!:)

techmac
2973
techmac  

It is nothing but another way of money laundering

The ridiculous part is how "banks and politicians are thinking if it is a currency or not". They are simply giving time to their clients and capaign donators to launder some money and then it will be closed

thenews
28438
thenews  

Bitcoin Targets Payments Business of Giants Visa to JPMorgan

Entrepreneurs from Silicon Valley to Wall Street say they don’t care much for Bitcoin as a currency to supplant the U.S. dollar. As a payment technology they could use to undercut Visa Inc. (V), Western Union Co. (WU) or Citigroup Inc. (C), they say they like it a lot more.

As Bitcoin’s value gyrates, these investors have said that the headlines about its price and chatter about which retailers accept it obscure the real merit of what Satoshi Nakamoto, the name given to the anonymous person or people who created Bitcoin, delivered five years ago.

“At some point, I had an ‘aha!’ moment and realized that Bitcoin was best understood as a new software protocol through which you could rebuild the payments industry in ways that are better and cheaper,” Chris Dixon, a partner at Menlo Park, California-based venture capital firm Andreessen Horowitz, wrote in a blog post.

Bitcoin enthusiasts say they are building a system to move money across the Internet securely and at a lower cost than existing wire transfers, bank debits or remittances. If they can eliminate the friction created by middlemen and create easy-to-use consumer tools, Bitcoin businesses may claim a piece of the revenue and still deliver lower costs.

Already, some retailers are paying 1 percent to process transactions in Bitcoin, improving profit margins. Taking debit or credit cards, they may pay more than 3 percent to issuing banks. Bitcoin transactions log immediately, and are confirmed in as little as five minutes.

Volatile Currency

Skeptics counter that Bitcoin’s volatility -- the price swings resemble those of a thinly traded currency -- could wipe out cost savings in what is still a small business. They also say the startups, in addition to facing entrenched incumbents, will layer their own costs onto Bitcoin transactions, undermining the goal of a cheaper system.

read more

thenews
28438
thenews  

ROBERT SHILLER: Bitcoin Is An Amazing Example Of A Bubble

Nobel Laureate economist Robert Shiller is on a panel at Davos about digital trends in financial markets. Almost immediately he started talking about Bitcoin.

He says that he finds it to be an "inspiration" because the computer science. But he's not into it as an economic advance. As a currency he says it's a return to the dark ages.

Shiller is a student and expert in the nature of bubbles, and he's adamant that Bitcoin is one. He says he's blown away by how much fascination Bitcoin has engendered, though it makes sense because human nature causes us to be interested in markets that exhibit extreme volatility.

Says Shiller: "It is a bubble, there is no question about it.... It's just an amazing example of a bubble."

He added that he's "amazed by how people are so excited about it" and that he tells his students that "No, it's not such a great idea."

source

test
1232
test  

This is the first sane comment I have heard about bitcoin. It is a simple ponzi scheme. Nothing else

thenews
28438
thenews  

Bitcoin In 2014 - The 3 Critical Factors

In the last year Bitcoin has gone 'viral'. As ConvergEx's Nick Colas notes, a lot has happened in 2013: Price appreciation, yes, from $20 to +$800 – the result of this online “Currency” going from science project to mainstream topic. Volatility too – disruptive technologies seldom travel a level path. The story, Colas notes, is about to change, and there are three critical gates which bitcoin must navigate in the New Year. First is regulation, and we will get a good dose of that next Tuesday and Wednesday when the New York State Department of Financial Services holds hearings on bitcoin and potentially issuing a ‘Bitlicense’ to help regulate business which transact in the currency. Second is adoption – how will existing businesses incorporate bitcoin into their sales, marketing and payment channels. Lastly will be volatility, which will have to come down in 2014 to encourage broader use.

Via ConvergEx's Nick Colas,

If the ratio of dog-to-human years is something like 7:1, then a bitcoin year is something like 500 years to one regular 365 day turn of the modern currency calendar. Money as we know it today – a physical representation of stored economic value that supplants simple barter – goes back to about 600 B.C.. That’s when the Lydians – in modern day Turkey – started minting coins. It’s a lot easier to buy a sheep or a goat with a coin than working out a barter with the seller, and every advanced civilization since then has used currency in some form to make economic transaction easier. In 2008, an enigmatic programmer (or programmers) unknown released a paper describing an online payment system called bitcoin. At first it was basically a puzzle contest for cryptographic hobbyists, with a prize for solving an endless battery of puzzles. Bitcoins were code-breaking bragging rights that could be exchanged with others.

Then, in 2011, bitcoin began to find an actual following. Its anonymous nature – the core of the system does not hold name, address and other information typical of a standard banking system – made it ideal for illicit transactions. Individuals concerned over online privacy – ahead of their time, it now turns out – also appreciated the anonymity as well as the algorithmically controlled nature of the issuance of bitcoin. No open-ended checkbook (as the Federal Reserve enjoys) in the bitcoin world – every 10 minutes another 25 bitcoin appear. And that’s it. For all this adoption, bitcoin remained largely under the radar.

Last year, bitcoin had its debutante coming out party, and its price went from $20 to $230 to $80 to $1000 and closed the year at $800. We started writing about it in February, mostly because we thought it was interesting that society – a portion of it, at least – had sufficient faith in technology to hand over their heard earned shekels to distributed network of computers running a program written by person or persons unknown. Worshipping in front of a golden calf is one thing – making offerings to a virtual calf seemed to merit our attention. Over the course of the year plenty of other market observers tossed their two cents in the hat, mostly in hater mode.

Well, its 2014 and the value of all bitcoin outstanding sits at roughly $10 billion. Does that mean the future of the currency is assured? Of course not – there’s still plenty to go wrong. But what that hefty amount does demand is a reasoned approach to the fundamentals driving bitcoin’s future. There are headlines aplenty about bitcoin now – still, I think, with a distinctly skeptical eye. Which is fine. But to paraphrase a chant heard at many a street rally, ‘Bitcoin is here; get used to it.’

In thinking through a framework to interpret what will be an eventful 2014 for bitcoin, here are the three points – we’ll call them Bitcoin Buckets for a touch of alliterative flair – to guide the discussion.

read more

thenews
28438
thenews  

Bitcoin Prices Becoming More Stable, ConvergEx Says

Bitcoin’s price may be stabilizing as the virtual currency becomes more widely used and adoption by merchants accelerates, brokerage ConvergEx Group LLC said.

The digital money, which rose to $1,000 last year from about $13 at the beginning of 2013, is on the road to stability now, according to Nicholas Colas, chief market strategist at ConvergEx in New York. Bitcoin’s price rose 6.2 percent in the last month to $794 on Bitstamp, one of the more active online exchanges where Bitcoins are traded for dollars and other currencies.

More merchants are starting to accept Bitcoins, which can be used to buy everything from gummy bears to cars. Electronics-retailer TigerDirect Inc. said yesterday that consumers will be able to use Bitcoin to buy more than 200,000 products on the site. Online-retailer Overstock.com Inc. and social-games developer Zynga Inc. now accept Bitcoins as well. Lower volatility is critical if Bitcoin is to be used widely in online and offline retail transactions, Colas said.

“We have no doubt that merchants will adopt Bitcoin simply to access newly minted high net worth individuals,” Colas said in the note. “But to keep them in the fold and increase the usage of Bitcoin in other parts of their business, they will need to see some greater stability in the price.”

Bitcoins exist as software, which contains the rules governing their supply and can only be created by solving complex problems embedded in the currency, keeping total growth limited. After speculators rushed in and drove prices higher, Bitcoins attracted the scrutiny of regulators in China and India, adding to volatile swings in the virtual currency’s value against the dollar and other currencies.

“The wider acceptance of Bitcoin from retailers certainly could drive up the price of Bitcoin, but it’s also fair to note that there’s still a great amount of speculators trading in Bitcoin -- so there may be quite a bit of volatility in the future,” Ugo Egbunike, director of business development at IndexUniverse, wrote in an e-mail.

source

thenews
28438
thenews  

Two bitcoin exchange operators charged in money laundering scheme

Two men who operate bitcoin exchange businesses have been charged with money laundering for helping drug merchants exchange $1 million in cash for bitcoins, the digital currency, U.S. prosecutors said on Monday.

Federal prosecutors in New York announced charges against Charlie Shrem and Robert Faiella, both operators of bitcoin exchange businesses, for attempting to sell $1 million in the digital currency to users of the underground black market website Silk Road, which was shut down by authorities in September.

According to the charging document, Shrem, 24, chief executive officer of the exchange BitInstant.com, changed cash into bitcoins for Faiella, 52, who ran an underground bitcoin exchange through the username BTCKing on Silk Road's website. The criminal complaint says that Shrem, in addition to knowing that Faiella's business was funneling money into Silk Road, also used Silk Road himself to buy drugs.

The U.S. Attorney's office in Manhattan said in a statement that authorities arrested Shrem on Sunday at New York's John F. Kennedy International Airport. Faiella was arrested on Monday at his home in Cape Coral, Florida.

The tech investors Cameron and Tyler Winklevoss invested $1.5 million in BitInstant last year. A spokeswoman for their firm, Winklevoss Capital, did not immediately respond to a request for comment.

The case against Shrem is likely to deal a blow to the burgeoning community of bitcoin businesses because Shrem is a high-profile advocate for the technology. In addition to running BitInstant, he is vice president of the main bitcoin-focused trade group, the Bitcoin Foundation, according to the foundation's website and Shrem's LinkedIn profile.

A spokeswoman for the foundation declined to immediately comment on Shrem's arrest.

read more

thenews
28438
thenews  

Bitcoin Crime Risk Sparks Warning at Top Nordic Forex Bank

SEB AB (SEBA), the largest Nordic foreign currency trader, is rejecting requests from clients seeking to set up accounts to manage Bitcoin amid concern the software could be used to aid crime.

The Stockholm-based bank has for now decided not to touch Bitcoin because of the “large uncertainties” relating to its status, Johan Andersson, chief risk officer at SEB, said in an e-mailed response to questions.

“Given the rules we have established for ourselves and rules that authorities have set up to prevent money laundering, we have currently made the decision that we cannot offer transactions, accounts or currency exchange in Bitcoin,” he said.

The comments come as Bitcoin Foundation Vice Chairman Charlie Shrem was charged by the U.S. Attorney Preet Bharara for allegedly attempting to sell Bitcoins to narcotics traffickers. Both Sweden’s government and the European Banking Authority have warned of the risks associated with Bitcoin as a potential vehicle for money laundering.

source