thenews
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thenews  

Bitcoin Enthusiast And Filmmaker Has A Theory For Why Mt. Gox Failed

Perhaps no Bitcoin story is more well known to the mainstream — and haunts Bitcoin evangelists more — than the rise and fall of Mt. Gox.

For about two years, Gox was the world's largest bitcoin exchange. Headquartered in Tokyo, the company at its height claimed it was processing $3 billion-worth of bitcoin, and was valued by some at $1 billion dollars.

But cracks began forming in the Gox edifice just as bitcoin demand began to surge. As early as Spring 2013, customers had begun complaining about delays in receiving transfers and difficulties removing their fiat currency from their exchange's wallets. A crackdown on Gox's U.S. bank accounts that August further ratcheted up uncertainty about the fate of the exchange.

Finally, this February, the firm announced almost half a billion dollars' worth of bitcoins had gone missing. Today, it began formal bankruptcy proceedings.

No one is still quite sure what happened to the missing bitcoins — or how many are truly gone.

But for Daniel Mross, a software developer, Bitcoin enthusiast, and the protagonist of the new documentary "The Rise and Rise of Bitcoin," which premiered Wednesday at the Tribeca Film Festival, Mt. Gox's downfall was more tragic than malicious. And he put into perspective how much more dominant the exchange could have been.

"I think Mt. Gox had the potential of being a Google of Bitcoin, and to squander that is just really a shame," Mross, who also co-wrote the film, told BI in an interview Thursday. "It was the one," he added.

The main problem, Mross said, was that CEO Mark Karpeles, 28, believed he was capable of taking on Mt. Gox's workload by himself. Karpeles took over the firm in 2011, and thanks to its seemingly sophisticated software and access — however short-lived — to American financial services, Gox's popularity grew.

But Gox's payrolls failed to grow with it.

"He was the CEO, the CFO, he was the lead developer — there were only two other programmers at Mt. Gox, and they were only doing front-end stuff — so he wrote all the software, installed all the servers, did all the infrastructure," Mross said. "Just way too much. Way in over his head."

The filmmakers were given a tour of Mt. Gox's sterile, cubicle-less and seemingly windowless office, though Karpeles and chief marketing officer and fellow Frenchman Gonzague Gay-Bouchery come off as mostly upbeat, revealing no sign of the immense pressure their exchange is under.

That comes a bit later, when Karpeles gives a brief tour of his sparsely furnished apartment in downtown Tokyo, and tries and fails to play a one-handed version of "Fur Elise" on his electric keyboard.

"When we did talk to him, when we did finally get him on his own, then he opened up," Mross said. "He was actually really friendly in a quiet kind of way. He seemed kind of a loner, had his personal life that he valued."

"Definitely a quirky guy, a little bit off — in a good way, almost an endearing way," Nicholas Mross, Dan's brother and the film's director added.

Daniel said Karpeles kept them waiting for hours at a time, causing their footage to be shot at night and rendering much of it unusable.

"That was definitely kind of an indicator of the bigger picture, how he dealt with things — 'Oh, I'll get to that whenever I'm ready to,'" Mross said.

Nicholas Mross said he tried to take a journalistic approach to Bitcoin's booms and busts, though it's mostly a celebration of the cryptocurrency and the culture that's grown up around it.

Still, he does not omit the ultimate fate of another key protagonist, Charlie Shrem, who ran a U.S. exchange called BitInstant. Last fall, Shrem was indicted on money laundering charges. In fact, the film's key strength is just how early it got in on the Bitcoin story: There's a scene in which Shrem, only a few months after BitInstant's launch, complains of how much he's had to spend on lawyers.

"The first thought honestly was, 'This is terrible,' — we felt bad for the guy. But from a filmmaking perspective there's the idea of our footage now becomes historic — this thing happened that we captured at a time that can't be recreated."

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whisperer
1880
whisperer  

I will be lucky if I get anything in the liquidation of gox. In the end it will turn out that the company owns one 2x2 office and nothing else

thenews
28438
thenews  

Bitcoin Tumbles After BTC China Halts Funding Amid Concerns PBOC About To Get Serious

Bitcoin prices tumbled almost 15% as Chinese bitcoin exchange BTC China announced it has stopped accepting RMB deposits to user accounts from a major bank. As Coindesk reports,Management decided to proactively halt deposits from one of the country’s largest banks, China Merchants Bank, after the bank posted on its public website that it would no longer allow its customers to engage in bitcoin-related transactions, and said essentially it would require all such businesses to close their accounts. Withdrawals, of course, are allowed, but as Coindesk goes on to note, that while the PBOC's 'official' policy on Bitcoin has not changed since December, this 'pre-emptive' move may suggest he PBOC would soon set stricter rules about how its earlier edicts should be followed.

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sebatian
676
sebatian  

It fell even more ($430)

whisperer
1880
whisperer  

It is a bit more today but that only means more suckers. The liquidation will show everything and what was done from the start

thenews
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thenews  

Forget Banks: If Bitcoin Is Going To Change The World, Then This Is The Real Competit

A central conceit of Bitcoin evangelists is that the cryptocurrency could be most useful to "the global unbanked."

These are the 575 million individuals in mostly emerging markets who lack access to basic financial services, even a bank account.

In principal, the advocates are correct. The time it takes to process a bitcoin transaction — about 10 minutes — is far faster than the three days it would take in the regular banking system. It's also usually cheaper.

But a new survey from trade association GSM shows that even the most promising emerging-market electronic payments technology, mobile money, has only just begun to break out, meaning it could take years to unseat cash as the payment method of choice in the developing world.

Mobile money can be used for just about anything. You can buy stuff at a grocery store. You can send and receive money to and from friends and relatives. You can pay and tip your taxi driver. And you can buy phone minutes. To upload or withdraw cash, you need only walk to a mobile money agent.

The granddaddy of mobile money is a service called M-Pesa. Launched in Kenya in 2007, the service was an overnight sensation, and is now used by much the adult population there. Its success is chalked up to close collaboration between the Kenyan government and Safaricom — the unit of Vodafone that operates M-Pesa — that allowed the service to spread. It also began life as a pilot program for microlending, which allowed developers to realize users were tapping the service to send and receive payments instead. After this, there was a huge marketing push.

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thenews
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thenews  

U.S. election panel approves bitcoin donations to political committees

The U.S. Federal Election Committee said on Thursday that the virtual currency, bitcoin, could be used for donations to political action committees under certain conditions.

In a unanimous vote, the FEC, which enforces U.S. campaign finance laws, said a political committee could accept donations in bitcoins up to an individual limit of $100 for each election cycle and could also purchase bitcoins.

But the advisory opinion, issued in response to a request for guidance by the Make Your Laws political action committee, said the committee "must sell the bitcoins it purchases and deposit the proceeds into its campaign depository before spending those funds."

The FEC did not approve the use of bitcoins to purchase campaign goods and services.

The agency approved the request by the Make Your Law committee to accept individual bitcoin donations to $100 for each electoral cycle, require contributors to list their names, addresses, occupations and employers, and affirm they own the bitcoins they are contributing.

Bitcoin, the most popular digital currency, is not backed by any government or central bank, and its value can swing dramatically based on demand. Users can transfer bitcoins to each other online and store the currency in digital "wallets."

The FEC said it concluded that bitcoins were "money or anything of value" under federal election law.

But it acknowledged that "government agencies, courts and others are grappling" with whether virtual currencies should be treated as money.

The U.S. Justice Department warned last year that many virtual currency services did not have the proper controls in place to prevent money laundering and could be used to dodge U.S. laws.

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Proter
27
Proter  

Bitcoin is good to use for preserving money and to exchange between two broker in forex market. But will suggest you to avoid this as much as you can. Because many government are banding bitcoin this time for some terrorism. This time it became a place to gather black money and to make it white. That's way I am suggesting this.

thenews
28438
thenews  

Li Ka-shing boosts bitcoin investments amid currency crackdown in China

Asia’s richest man Li Ka-shing has boosted his investment in bitcoin, in a vote of confidence for the beleaguered digital currency, amid a crackdown on its widespread popularity in China.

Despite the price of a bitcoin tumbling from political pressure, the billionaire tycoon has poured an undisclosed amount of money, believed to be worth millions of dollars, into Bitpay, the bitcoin equivalent to PayPal, through his venture capital investment company Horizons Ventures.

Bitpay has raised US$30 million (HK$233 million) in Series A funding (convertible into common shares when an IPO is launched) from eight investors including Li’s money-spinning vehicle, Horizons. Fellow investors include Virgin’s Richard Branson, and top technology men including billionaires, the founder of Yahoo, Jerry Yang, and PayPal founder Peter Thiel.

Buoyed by the investment, set to be the single largest fundraiser by a bitcoin company, BitPay co-founder Tony Gallippi said in a statement: “Bitcoin is a borderless and frictionless payment system, which is nearing a tipping-point moment in terms of merchant adoption.

Gallippi, also the company’s executive chairman, added: “Unlike existing payment technologies such as credit cards, with their high fees and risk of fraud and chargebacks, Bitcoin was designed for the internet age (sic), offering companies a lower-cost, lower-risk alternative.”

A spokeswoman for Horizons Ventures said: “We do not comment on any deals or rumours.”

John Greenwood, the architect of Hong Kong’s pegged currency regime, told the South China Morning Post in December, said investors should follow Li’s move to buy into firms providing the services that bitcoin holders use.

Horizons has a long and successful track record of investing in technology start-ups that turned into global brands with Li, currently worth US$32 billion according to Bloomberg Billionaires index, among the investors. Some of Horizons investment successes are social network behemoth Facebook and voice-over-IP service provider Skype, now owned by Microsoft.

Index Ventures Partner Jan Hammer, another of the investors alongside Horizon, added: “We see BitPay playing a key role in the future of electronic payments and paving the path for digital currency bitcoin.”

The global price of bitcoin has lost three-quarters of its value in just six months, tumbling from a peak of US$1,242 per coin. The latest price fall comes on repeated warnings from China’s central bank asking mainland financial institutions to stop doing business with bitcoin companies and individual customers to protect the value of the renminbi.

A US government report published on Monday said if Beijing successfully prevents Chinese users from accessing bitcoin, price declines would continue and threaten its legitimacy.

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bewayopa
411
bewayopa  

Great article.