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February 07 2014

Mt. Gox Temporarily Pauses Bitcoin Withdrawals
BitcoinMt. Gox has temporarily suspended Bitcoin withdrawals in order to resolve a technical issue, the company said on its site.
Tags: TC mt.gox Bitcoin

February 06 2014

New Ransomware Blocks Your DNS Connection And Forces Your Computer To Mine Bitcoins
clvrgrlA new bit of malware, Linkup, is a clever girl. First it takes control of the DNS servers your computer pings to connect to the Internet and, while you're wondering how to delete it, begins mining bitcoins on the sly. Anti-virus purveyors Emisoft identified the ransomware in the wild.

February 04 2014

Nymi Armband Adds A Secure Bitcoin Wallet As One Of Its Killer Launch Apps
NymiToronto-based wearable startup Bionym’s Nymi band uses your ECG to securely identify you to various devices and services, and as of today there’s another trick up its sleeve – acting as a secure, easy to use Bitcoin wallet. The company revealed today that one of the launch applications that will ship with the Nymi will be a Bitcoin wallet, and that said wallet will provide a more secure method of storing your account’s private key. All Bitcoin transactions consist of a key exchange: when someone is depositing funds into your account, they use the public key (it’s public since people don’t often get that cheesed about getting free money); when they want to send or withdraw the cryptocurrency, they use the private key. Recently, some evidence has suggested that it’s actually frighteningly easy to get at that private key if it’s stored on a hard drive or shared via QR code. What Nymi brings to the table is a way to keep the private key securely stored independent of any computer, and tied to your unique ECG biometric signature. This makes it not only secure, but also more convenient than existing Bitcoin wallet solutions, Bionym President Andrew D’Souza explained in an interview. “People just don’t understand how [Bitcoin] works, and how they gain access to it without putting themselves at risk,” “We see Nymi as essentially being that enabling technology that brings it to market. Everyone who buys a Nymi will get a Bitcoin wallet and be able to securely transact, and understand that their wallet is encrypted, and tied to their biometrics so that even if you lose your Nymi or it’s stolen they won’t be able to access your bitcoins.” D’Souza says that while Bitcoin has a lot of potential, there’s a risk that it will either fade away into obscurity because of its perceived complexity, or that it’ll get legislated away and receive such a negative connotation that it doesn’t ever hit the mainstream. By making Bitcoin more accessible, and more secure, Bionym hopes to help it avoid those pitfalls. Their vision is of a world where you maintain a Bitcoin savings wallet on a computer, but then use your Nymi like a walkaround checking account for daily transactions. “With Nymi, when you walk away from your computer your Bitcoin wallet will lock automatically,” explained Bionym Chief Cryptographer Yevgeniy Vahlis. “But it won’t just lock in terms

February 01 2014

Bitcoin’s Emerging Price Stability
Screen Shot 2014-02-01 at 12.12.08 PMEarlier in January Bitcoin, as it receded as recipient of an infinite press, began to see its trading range tighten after months of wild swings. I pointed this out as perhaps the start of new stability for Bitcoin, which in turn could help its platform mature, or indicate maturation thereof. There was some squawking that the time frame I had selected as ‘enough’ to indicate a trend was too short. It was a reasonable complaint. Happily, Bitcoin has behaved and exonerated me by tacking on another tranche of time of generally stable prices. The gist is simple: For nearly the entire month of January Bitcoin has traded in the 900s, with minor exceptions in 1,000s. For a currency that until very recently could see 50% of its value drop in a day and not have that day stand out all too much, it has been something of a calming of the seas. Here’s the D1 chart you need (Mt.Gox data via Clark Moody): Why does it matter if Bitcoin is seeing increasing price stability? Essentially the more wild the swings in its value, the less useful Bitcoin is as a tool of commerce. This goes both ways: The more real uses there are for Bitcoin, the smaller the percentage of speculative trades in the currency; and, the smaller the changes in its price, the more people may start to accept Bitcoin as a payment option. It’s a self-reinforcing cycle. Marc Andreessen recently summed this well: “Bitcoin is a classic network effect, a positive feedback loop. The more people who use Bitcoin, the more valuable Bitcoin is for everyone who uses it, and the higher the incentive for the next user to start using the technology.” Marc’s piece — it’s mandatory reading, by the way — lays out a bullish case for Bitcoin arguing that its core technological tenets provide large incentive for its use, which will drive adoption and long-term use.   Bitcoin volume on the Mt.Gox exchange is down sharply this year, a change I think that is roughly commensurate with the currency’s decline in media attention. If you were hoping for Bitcoin to shape up and fly right, it was a banner month. Top Image Credit: Flickr (Image cropped)
Tags: TC Bitcoin

January 31 2014

BTC China Starts Accepting Deposits In Chinese Yuan Again
RMBBTC China, the world’s largest bitcoin exchange, has started allowing users to purchase the digital currency with Chinese yuan again. This is significant because BTC China stopped accepting deposits in renminbi last month after the People’s Bank of China issued a memo warning national financial institutions not to trade in bitcoin. That decision triggered a quick and massive drop in its value. It also hurt Bitcoin’s public image, which has taken several shots in the past few months. BTC China CEO Bobby Lee told the Wall Street Journal that the exchange started accepting renminbi again on Thursday after studying the PBOC memo and determining that it was legal to accept deposits and transfer money into customer accounts, even though the banks that manage those accounts can’t conduct business in bitcoin. Reddit users and Coindesk picked up on BTC China’s decision, even though the exchange tried to keep it low profile. BTC China has not made an official announcement and timed the change to coincide with the Lunar New Year holiday, when trading volume is low. It’s still too early to tell what impact BTC China’s decision will have on bitcoin’s value. Lee told WSJ that BTC China, which recently closed a $5 million Series A round from Lightspeed China Partners and Lightspeed Venture Partners, is treading carefully because the Chinese government can change its policies at any time. The Chinese government has taken a negative attitude toward digital currencies before. In 2009 the Chinese government banned the use of another popular digital currency, QQ, for the purchase of real-world items. Bitcoin is harder to control than QQ, however, because QQ was centrally managed by Internet company Tencent. “We are definitely in compliance with the Dec. 5 memo, but the government and the government agencies can change the rules anytime in the future. So we are going to take a wait-and-see approach,” Lee told the WSJ. We’ve emailed him for further comment.

January 29 2014

Bitcoin’s Image Problem
bitcoin-thornsI know manias. I've seen them again and again - hordes of people find out about a product or idea, back it with all their might, and are angry when anyone refuses to genuflect to their sacred cow. It happened to Notion Ink, it happens to Apple, it happens to Blackberry, and it happened in the vaccine autism scare, in the truthers, and in countless other subcultures who manifest their undying love with endless devotion and unremitting anger. "Beliefs make history, especially when they are wrong," said historian Will Durant. "It is for errors that men have most nobly died."
Tags: TC Bitcoin rants

January 19 2014

Bitcoin’s Recent Price Stability Could Point To Growing Maturity
Screen Shot 2014-01-19 at 1.27.17 PMThe nearly boozy Bitcoin rallies and crashes of 2013 led to endless media coverage, rising mass market knowledge of its existence, and piece by piece, the growing maturity of its underlying network. No asset that regularly loses or gains 50% in a day can be treated as anything more than a speculative tool, and an incredibly risky one at that. However, in the new year, as the media firestorm has mostly abated around Bitcoin and its network of buyers and sellers has continued to improve and expand, something interesting has happened: Bitcoin has found and stuck to a trading range. Now, compared to more traditional currencies, Bitcoin still moves around too much for the good digestion of those close to it. At the same time, over the past nearly two weeks, it has shown remarkable flatness, meaning that those wishing to use and accept it for commerce have had a period in which they could trust their sales and purchases to not swing to wild profit or loss by whim of the market. The Bitcoin D1 chart remains as humorous as ever (in this case, D1 means that every chart point represents one day’s trading): But taking a look at an H4 chart of the recent history, and you will note that following the imposed vertical white axis, Bitcoin has essentially behaved itself. That marks shown is the 7th of January, past which Bitcoin has managed a real interval of lucidity: Compare the preceding and following sections of that chart — it almost feels like we are looking at two difference substances. Price stability has been a Bitcoin bugaboo for as long as you can recall because the rise in the currency’s value was often correlated to news stories regaling its surges. Upward momentum and all of that. But instead if Bitcoin was to become a medium of exchange more so than a store of speculative hype, it needed to calm down. This, as you have seen has, lead to a denouement of media coverage of Bitcoin, even from your humble servant. If you’ll allow the indulgent self quote, this is what we are talking about: Bitcoin needs a more stable price, which can only come to fruition after its network becomes large enough to have validated the price of Bitcoin at a certain level. And for that it needs to attract more retailers, which are kept out by its
Tags: TC Bitcoin

January 16 2014

Sacramento Kings Fans Can Now Buy Tickets And Merchandise With Bitcoin Via BitPay
kingswolves_670Another step for Bitcoin entering mainstream commerce and consciousness. The Sacramento Kings basketball team has started to let fans pay for tickets and merchandise using the cryptocurrency -- becoming the first professional sports team to hop on the Bitcoin bandwagon. People who visit the Kings' physical retail store in Sacramento can already go in and pay for goods in Bitcoin in person; online sales are due to start March 1.

January 13 2014

From My Cold, Dead Hands — Europe’s Netagio Offers Cold Storage Vault To Keep Your Bitcoin Safe
BitcoinNetagio claims to have launched Europe’s first free digital currency "cold storage" vault, offering gold standard offline storage for Bitcoins. The use of the word "gold" isn't a reference to Bitcoin's asset class-like properties, or the currency's recent boom, but refers to the fact that Netagio's parent company, GoldMoney Group, currently stores $1.4 billion in precious metals for customers.

January 07 2014

The Silk Road’s Libertas Is Free, To The Annoyance Of U.S. Authorities, While DoJ Mulls BTC Sell-Off
Silk RoadThe Silk Road moderator Gary Davis, aka Libertas, is officially free on bail and awaiting an extradition hearing on February 13. Irish and U.S. authorities arrested Davis on December 20 in an international operation that also nabbed Silk Road moderators Andrew Jones, aka Inigo, and Peter Phillip Nash, aka SameSameButDifferent.

January 06 2014

Taiwan’s Government Says No To Bitcoin ATMs
bitcoinTaiwan's Financial Supervisory Commission (FSC) will not allow the installation of Bitcoin ATMs in the country because it believes Bitcoins are not a currency and should therefore not be accepted by individuals or banks as payment, said FSC chairman Tseng Ming-chung. Tseng Ming-chung's statement was reported yesterday by the Central News Agency (link via Google Translate), Taiwan's state-run news service.
Bitcoin’s Future Foretold By Developer Momentum
bitoiinIf you think developers predict the future then there is more reason to believe that Bitcoin is the real deal. The crypto currency is a hit with developers, according to data collected on GitHub by the founders of Bitcoin Pulse, a service recently launched that tracks Bitcoin adoption.

January 02 2014

Robocoin, The Bitcoin ATM, Is Heading To Hong Kong And Taiwan
EBWLpLkPOayELeV6kT5urNgB0C5i_sUQehveb5FoejYThe first shipping bitcoin ATM, Robocoin, is landing in Hong Kong and Taiwan as the company expands its reach this January. They are planning further releases in Europe, Canada, and the US but, given Asia's clout in the BTC markets, this is definitely an interesting development. The first Robocoin landed in Vancouver where it's been a big hit and we wanted to see how things have been going for the company since launch in October.

January 01 2014

Why I Lost Faith In Bitcoin As A Money Transfer Protocol
bitcoinAs 2013 came to an end, many reflected on last year’s biggest tech news — and Bitcoin was a serious contender. But the main question remains: why are people interested in Bitcoin? This whole debate reappeared when Charlie Stross stated that “Bitcoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind — to damage states ability to collect tax and monitor their citizens financial transactions.” Paul Krugman then quoted his post, neither denying nor approving this thought. But Chris Dixon (and Fred Wilson in the comment section) reiterated their strong interest in Bitcoin while sharing that they are both Democrats. If major Bitcoin enthusiasts don’t have any political agenda in mind, then what is the future of Bitcoin? At its heart, Bitcoin is a cryptocurrency that doesn’t rely on any central bank. Bitcoins are just a chain of characters defined by algorithmic rules, and transactions are handled by the network of miners. Yet, in a month’s time, the value of a bitcoin went from $200 to more than $1,000 on all the exchanges. In other words, it is as volatile as it can get. Right now, there are only around 12 million of bitcoins in circulation, and many Bitcoin holders are recent converts that buy and sell every day. So how could you think about using bitcoins to pay the rent? You could simply hold your bitcoins and expect to triple your wallet value in a couple of weeks instead. That’s why I believe Bitcoin isn’t the next world currency. Bitcoin’s true purpose is not what everyone originally expected — you won’t buy a pizza in bitcoins anytime soon. Moreover, Bitcoin won’t be able to remain an unregulated currency for long. So Bitcoin’s true purpose lies somewhere else. As Bitcoin is a peer-to-peer payment network, you don’t need any banking institution to make large transfers. Bitcoin could become the first meta-currency that sits on top of traditional currencies, the common language between USD and EUR. That’s what Dixon finds interesting, Bitcoin is as much a money transfer protocol as a currency. And it has the potential of disrupting the traditional banking system. Replacing Forex Transactions With Bitcoin As I live in France and work for an American company, I thought I would be the perfect candidate for this particular use case. I tried to use

December 30 2013

Divining The Underlying Value Of Bitcoin
Screen Shot 2013-12-30 at 10.59.29 AMBusiness Insider’s Joe Wiesenthal today published an interesting piece on Bitcoin, partially responding to Paul Krugman’s somewhat inscrutable recent blog post that called the cryptocurrency “evil,” and partially answering the question of why Bitcoin has value. It’s been a topic we’ve been discussing for months, making Wiesenthal’s argument worth digging into. He breaks Bitcoin into three interrelated characteristics that support one another: It’s a currency, equity, and a social network. Bitcoin acts as a currency because you can use it as a generic exchange medium in lieu of dollars and other traditional currencies in a growing number of places. Bitcoin also at least behaves as an equity, because the more people who use and accept it, the more the value of each coin — at least thus far — generally rises. Interestingly, Bitcoin’s ability to act as a currency and an equity are both predicated on its network effects. Wiesenthal puts this succinctly: “Strong, robust network effects are crucial for making the whole thing work.” He links to Antonis Polemitis who makes the same argument: “If people stop using bitcoin, its intrinsic value is zero. Its value is 100% derived by the fact that it is a network.” If we view Bitcoin’s value as a currency and an equity as supremely predicated on its strength as a network, we can then state that its value rises and falls with the strength of that network. This means that Bitcoin’s value is something that we can therefore better understand. The gist is that it’s been frakking hard to explain to anyone why Bitcoin makes more sense at $700 than $800 or even $300. However, if we can consistently point to an expanding network, we can presume that Bitcoin’s value should therefore be rising. This does not allow us to say that Bitcoin’s current price, and its requisite swings, match its inherent value. In fact, I think that we can presume that they do not. According to Coinbase, Bitcoin spiked from $208 at the start of November to $1,049 on the first of December. If we assume that Bitcoin’s network effects gave its exchange rate (currency) or asset value (equity) a proper valuation at the start of the month, we can either argue that its network became (roughly) five times as valuable in the month, or that investors overbid Bitcoin. Its ensuing price slump would point towards the latter. I’ve correlated the price of Bitcoin to its current news volume a few times,

December 27 2013

Asia’s Richest Man Invests In BitPay
flickr-5041935327_6488ac8eff_oAfter some serious drubbing in two of the world’s largest countries during past few weeks, the Bitcoin ecosystem may have found its biggest individual backer yet in Li Ka-shing, Asia’s richest man. Li is now an investor in Atlanta-based BitPay, the startup with ambitions to become the PayPal for the virtual currency world. He has made this investment through his venture capital company, Horizons Ventures, an early investor in companies such as Facebook, Waze, Skype and Summly, which manages $150 million in 3 different funds. A BitPay spokeswoman told me that Horizons Ventures and the Founders Fund are among a group of investors including Shakil Khan, Barry Silbert, Jimmy Furland, Roger Ver and Ben Davenport, who have put around $2.7 million in the startup so far. Founders Fund is the VC group run by people who founded and were early employees at PayPal. In May this year, BitPay raised $2 million from the Founders Fund. The South China Morning Post reported earlier today that Li has invested in BitPay through Horizons Ventures, but didn’t give any specific details on the amount invested. Li’s investment in BitPay comes at a time, when regulators in India and the People’s Bank of China, have issued advisories against the virtual currency, and even questioned the legitimacy of Bitcoin. Overall, the environment for Bitcoin seems more conducive the in U.S. where Ben Bernanke, chairman of the Federal Reserve, recently said that despite risks, there are areas where virtual currencies hold long-term promise. Indeed, BitPay said earlier this month that it has processed over $100 million in transactions this year, and has increased its merchant base to over 15,500. It’s been a very busy month for Bitcoin, mostly filled with bad news in two of the world’s biggest countries. While China’s biggest Bitcoin exchange, BTCChina, stopped accepting deposits in Chinese Yuan earlier this month, exchanges dealing with the virtual currency in India are shutting down after a warning from the country’s banking regulator, RBI. The 85-years old Hong Kong-based billionaire, who is also the chairman of Hutchison Whampoa, is buying into Bitcoin growth in the U.S. amid uncertainties in Asia. John Greenwood, the chief economist of London-based Invesco, told the South China Morning Post that Li’s strategy of investing in a startup that provides enabling infrastructure for the virtual currency, offers lessons for investors looking to make money from Bitcoin. This is what Greenwood told the newspaper: “Just like investors in days gone by made more money out of selling
Bitcoin Exchanges In India Shut Down After Regulator Warning
BuysellbitcoBitcoin exchanges in India are shutting down days after the country’s banking regulator warned users of virtual currency against security and financial risks associated with them. The Reserve Bank of India (RBI) had remained silent on Bitcoin over past few weeks, even as China started clamping down on the exchanges, sending the virtual currency into a downward spin earlier this month. A week after India’s small, but growing Bitcoin community organized its first conference, and made an appeal to the country’s banking regulators for recognizing the virtual currency, the RBI said the Bitcoin users have not obtained any regulatory approvals yet, which poses several risks to anybody associated with them. This is what the RBI said: There have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. The absence of information of counterparties in such peer-to-peer anonymous/ pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws However, the wording of the announcement from RBI leaves a question mark over the legality of not just the exchanges but also of the people who trade on them. As we had reported earlier this month, India was just beginning to see a rise in Bitcoin exchanges and the country’s 1000-member strong Bitcoin community was hoping to get more merchant endorsements., an Indian website offering Bitcoin exchange in the local currency, has already suspended its operations. The founder of, Mahim Gupta, who had previously mentioned that his monthly turnover was around $200,000, but he could also not be reached for comments for this post. Other bitcoin traders, perhaps cautious that the RBI’s statements threw their own legal situation into question, were also unavailable.

December 21 2013

17:00 Reportedly Plans To Accept Bitcoin In 2014 is moving to accept Bitcoin as payment in 2014, the CEO told The Financial Times. Apparently the retailer has the ambition to become the first major online retailer to accept the digital currency. And it very well could be. No other major retailer has announced a similar plan yet. However, put away your digital wallet for the time being. The retailer doesn’t expect to start accepting Bitcoin until the second half of 2014, by which time, Dogecoin could eclipse its popularity. This announcement comes just days after a major shakeup in the Bitcoin ecosystem as China’s largest BTC exchange stopped accepting deposits in Chinese yuan, causing Bitcoin’s monetary value to drop 50% in a few hours. Overstock saw just over $1 billion in revenue last year. The company trades on NASDAQ and its stock price is up 109.29% on the year. The news about accepting Bitcoin caused the shares to jump 7.77% on the day. Overstock CEO Patrick Byrne stated that a healthy monetary system isn’t based off of an upside pyramid or the whim of a government official. Bitcoin fits that bill. Byrne stated that when Overstock starts accepting Bitcoin, the retailer would bank the digital currency in the event derivatives (such as Dogecoin) are increasing in popularity. If offshoots fail to gain steam, Overstock would transfer the Bitcoins into dollars on a daily basis, essentially day trading the Bitcoin income. In the latter half of 2013, a number of retailers have moved to accept Bitcoin as payment with OkCupid, Namecheap and Humble Bundle among the list. Charities are also latching onto the digital currency since it lacks fees usually associated with monetary donations. If Overstock follows through with its plan, it would be come the largest U.S.-based retailer to accept Bitcoins. That is, of course, if Amazon or the like doesn’t beat them to the punch.

December 18 2013

Video: A Window Into BTCChina And The Rise Of Bitcoin In Asia
Shanghai Oriental Pearl China Chinese flagIf you're looking for a little background on bitcoin in China - and speak Chinese - this video from our TechCrunch event in Shanghai last month may be of interest. Featuring BTCChina CEO Bobby Lee as well as bitcoin luminaries Xu Mingxing, Celso Pitta, Wang How, and Mark Mai. During the time I was there I saw a lot of excitement in regards to bitcoin but many Chinese saw it as just another fad.
Tags: TC Bitcoin China
Bitcoin Drops 50% Overnight As China’s Biggest BTC Exchange Stops Deposits In Chinese Yuan
BitcoinChina's biggest Bitcoin exchange, BTCChina, has stopped accepting deposits in Chinese yuan. The shutdown has sent the currency into a downward spin, stripping it of half its value overnight. It is trading at $572 on Mt.Gox, down from a high of about $1,200 last week.
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