thenews
28438
thenews  

Bitcoin Mining Boom Sputters as Prospectors Face Losses

The bitcoin mining rush is sputtering.

Speculators, known as miners, use powerful computers to solve complex software problems and verify transactions to unlock new bitcoins. They’re finding that the enterprise isn’t as profitable as it once was.

Drawn by the virtual currency’s jump in value last year, digital prospectors have turned the mining industry into an arms race as they buy expensive computing equipment and gobble up electricity. While that worked well as long as bitcoin’s value kept rising, smaller players are now being crowded out by bigger competition, high utility bills and declining prices.

“If you mine at the moment, you have to be very lucky to get anything,” said Mehmet Vatansever, who bought $16,000 worth of mining computers in February to chase after new bitcoins. “It’s a very difficult business.”

Mining, a nod to the excavation of minerals and metal ore, is entirely digital and part of bitcoin’s design, so that the money self-regulates supply and prevents out-of-control inflation. The mining process gets increasingly complicated as more bitcoins are created, driving demand for computing power.

Bitcoins, which jumped to more than $1,200 last year from $12, were trading at about $420 apiece yesterday, according to the CoinDesk Bitcoin Price Index, an average of prices across major global exchanges. China’s tighter controls on alternative currencies, the implosion of the Mt.Gox exchange and a U.S. Internal Revenue Service ruling that bitcoins should be taxed as a property have all weighed on the virtual currency.

read more

thenews
28438
thenews  

Bitcoin promoter Shrem indicted in NY for money laundering

Prominent bitcoin entrepreneur Charlie Shrem has been indicted by a federal grand jury in New York on charges of funneling cash to the illicit online marketplace Silk Road.

Shrem, known as one of the digital currency's most visible promoters, is accused of conspiring with a Florida man, Robert Faiella, to sell more than $1 million in bitcoins to the users of Silk Road despite knowing that it would be spent on illegal uses like drug trafficking.

Both Shrem and Faiella face charges of money laundering, conspiracy and failing to file suspicious activity reports with government banking authorities, according to the indictment filed by Manhattan U.S. Attorney Preet Bharara.

Shrem's lawyer, Marc Agnifilo, and Faiella's lawyer, David Braun, did not immediately respond to a request for comment on Monday.

Federal authorities shut down Silk Road last year, and prosecutors from Bharara's office have charged Ross William Ulbricht with operating the site under the name "Dread Pirate Roberts."

Shrem, 24, was arrested in January and stepped down as vice president of the Bitcoin Foundation, a well-known trade group, soon after. He was previously CEO of BitInstant, a bitcoin exchange company that enjoyed financial backing from the twins Cameron and Tyler Winklevoss but closed last year.

Bitcoin is a digital currency, not backed by any government or central bank, that fluctuates in value according to its users' demand. Users can transfer bitcoins to each other online and store the currency in digital "wallets."

Authorities have vowed to pursue those who use bitcoin to complete illegal transactions, while regulators are still grappling with their approach to the nascent currency.

The recent failure of Japan's Mt. Gox, which filed for bankruptcy after apparently losing hundreds of millions of dollars worth of bitcoins, has underscored concerns about the currency's long-term viability.

source

whisperer
1880
whisperer  

Lost with Gox almost 100 bitcoins. Can not tell anything good about them

techmac
2973
techmac  
Bitcoin. Digital gold rush or a shadowy tool empowering criminals on the dark web? What is really driving The Bitcoin Uprising? CNBC's Mary Thompson takes an in-depth look at this emerging digital currency by speaking to the bitcoin faithful, who believe the open source currency will upend the global financial system, as well as those who believe bitcoin is an easily manipulated tool that empowers criminals, hackers and drug barons in the dark online underworld. Although the future of bitcoin is uncertain, The Bitcoin Uprising sheds much needed light on the speculative currency and the future of money.

The video about bitcoin "uprising" : The bitcoin uprising - CNBC

name
1966
name  
thenews
28438
thenews  

The Hunt For The Creator Of Bitcoin Keeps Coming Back To One Guy

The Hunt For The Creator Of Bitcoin Keeps Coming Back To One Guy — And He May Be Hiding In Plain Sight

This morning, students at Aston University in Birmingham, England, claimed they'd narrowed down the identity of Satoshi Nakamoto, the pseudonymous creator of Bitcoin, to a writer named Nick Szabo.

Forty forensic linguistics majors looked at similarities in language used by Satoshi in his original Bitcoin spec paper and that used by 13 people "regularly referred to as suspects."

Matches with Szabo were the strongest.

Dr. Jack Grieve, a lecturer in forensic linguistics at Aston, said:

"The number of linguistic similarities between Szabo’s writing and the Bitcoin paper is uncanny, none of the other possible authors were anywhere near as good of a match. We are pretty confident that out of the primary suspects Nick Szabo is the main author of the paper, though we can’t rule out the possibility that others contributed."

This is the latest instance in which the hunt for Satoshi has landed on Szabo. In December, an anonymous blogger created a WordPress site with the explicit purpose of publishing his linguistic match findings between Szabo and Satoshi.

The blogger doubled-down on his claim a month ago, saying his latest research "confirms that Nick Szabo’s writing matches the Bitcoin whitepaper, not only in the expressions it uses, but also on hard-to-fabricate style metrics."

For a while Hilary Sargent, now with the Boston Globe, was tracking possible Satoshi candidates on her ChartGirl blog. Szabo had figured on the top of her list because, among other things, he'd written about a theoretical technology called "Bit Gold," which bears an uncanny similarity to Bitcoin.

Szabo's personal website contains papers on a galaxy of different topics, including ones key to Bitcoin's technology. Here's a sample of his writing on "Formalizing and Securing Relationships on Public Networks":

All public key operation can be performed inside an unreadable hardware board or smart card on a machine with a very narrow serial-line connection (ie, it carries only a simple single-use protocol with well-verified security) to a dedicated firewall. This is economical for high traffic servers, but may be less practical for individual users. Besides better security, it has the added advantage that hardware speeds up the public key computations.

And here's a cut from the Bitcoin spec paper:

As an additional firewall, a new key pair should be used for each transaction to keep them from being linked to a common owner. Some linking is still unavoidable with multi-input transactions, which necessarily reveal that their inputs were owned by the same owner. The risk is that if the owner of a key is revealed, linking could reveal other transactions that belonged to the same owner.

Szabo might be hiding in plain sight. Gavin Andresen, one of Bitcoin's core developers, told Business Insider in an email that he had attended the Princeton Bitcoin conference with Szabo in March. Business Insider has tried calling and emailing several phone numbers and addresses associated with Szabo over the past few months to no avail.

In November 2011, Wired's Benjamin Wallace said Szabo had denied it, though it was unclear where and how this occurred. Szabo's most explicit disavowal came in a May 2011 blog post in which he wrote the following on the advent of Bitcoin and what made it special:

Myself, Wei Dai, and Hal Finney were the only people I know of who liked the idea (or in Dai's case his related idea) enough to pursue it to any significant extent until Nakamoto (assuming Nakamoto is not really Finney or Dai). Only Finney (RPOW) and Nakamoto were motivated enough to actually implement such a scheme.

read more

whisperer
1880
whisperer  

What does it matter now who invented it.The owners exchanges used it to steal money (they we hoping that it will raise even more and that they will be able to cpver what they did with gains from the price raise)

thenews
28438
thenews  

Mt. Gox suitors seek support to save bitcoin exchange

A group of investors seeking to buy Mt. Gox has launched a website to garner support from creditors of the bankrupt bitcoin exchange to prevent a liquidation of its assets.

"We need your help to stop a liquidation, which would be good neither for Mt. Gox creditors nor bitcoin's reputation with the general public and regulators," the investors wrote on the website. (r.reuters.com/jeh68v)

Mt. Gox, once the world's biggest bitcoin exchange, is likely to be liquidated after a Tokyo court dismissed the company's bid to resuscitate its business, the court appointed administrator said on Wednesday.

"The Tokyo district court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings," he said.

The investor group, which offered to take over the assets of Mt. Gox and revive it, has received backing from many creditors and hopes to convince the court to reconsider its rehabilitation proposal, the Wall Street Journal reported on Thursday. (r.reuters.com/keh68v)

Mt. Gox has about 127,000 creditors.

The exchange filed for bankruptcy protection in Japan in February, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking.

Mark Karpeles, the founder of Mt. Gox, said he would not come to the United States to answer questions about the bankruptcy case, Mt. Gox lawyers told a U.S. federal judge on Monday.

source

name
1966
name  

"A group of investors seeking to buy Mt. Gox has launched a website to garner support from creditors of the bankrupt bitcoin exchange to prevent a liquidation of its assets."

It never ends

whisperer
1880
whisperer  

would like to believe that it is possible (and that that way I can get back what I have lost) but I do not believe anything any more when Gox is involved in any way