The price of bitcoins topped $1,000 Wednesday on Mt. Gox, the second largest exchange by volume, marking the first time its price has hit four digits.
Bitcoin first hit $100 in April and quickly doubled that same month. The price has increased fivefold in the seven months since, but it has also experienced significant fluctuations amid uncertainty about the viability of the digital currency.
2013年12月1日 星期日
Tipping Point: Bitcoin Passes Value of an Ounce of Gold
On Friday the decentralised crypto-currency Bitcoin, which passed the $1,000 (£611, €735) mark earlier this week, was briefly worth more than an ounce of gold, which will be seen by many supporters of the currency as a symbolic tipping point in the rise of the digital currency.
Bitcoin today hit a high of $1,242 on Mt Gox, the world's biggest bitcoin exchange, beating the price of gold which was $1,241.98 at the time. At the time of publication, bitcoin's value on the exchange has dropped back to around $1,160 while an ounce of gold remains relatively steady at $1,247.
The mysterious currency, which is not governed or regulated by any central bank, has gained widespread media attention this year due to its surging value - along with multi-million dollar thefts of the digital coins - and its associations with the darker parts of the web.
Bitcoin today hit a high of $1,242 on Mt Gox, the world's biggest bitcoin exchange, beating the price of gold which was $1,241.98 at the time. At the time of publication, bitcoin's value on the exchange has dropped back to around $1,160 while an ounce of gold remains relatively steady at $1,247.
The mysterious currency, which is not governed or regulated by any central bank, has gained widespread media attention this year due to its surging value - along with multi-million dollar thefts of the digital coins - and its associations with the darker parts of the web.
Link between 'Satoshi' bitcoin account and the Silk Road dissolves
A research paper speculating Bitcoin’s creator may have transferred $60,000 to the Silk Road marketplace has been dispelled, as the account holder in question came forward on Tuesday, denying he is the mysterious Satoshi Nakamoto.
Dustin Trammell, a security researcher who is CEO of the vulnerability marketplace ExploitHub, wrote in a blog post that the Israeli researchers failed in their analysis, which was subject to blistering criticism from the bitcoin community.
“I hope this puts to rest any further speculation regarding whether or not I am Satoshi Nakamoto and whether or not I have had any involvement with the Silk Road,” Trammell wrote. “I am not and have not.”
The paper was written by Adi Shamir and Dorit Ron of the Weizmann Institute of Science in Israel. Shamir is a noted cryptographer credited with co-creating the RSA encryption algorithm, which is widely used to protect corporate data.
In an email to IDG News Service, Shamir defended their work, writing that “we were extremely careful in our choice of words and repeatedly stressed that we have no proof.”
But later on Wednesday, Shamir wrote in an email that after reading Trammell’s blog post, the paper would be revised.
In four paragraphs at the end of their 13-page paper, Shamir and Ron described a 1,000-bitcoin transaction, worth around $60,000 at the time, sent in March. It came from a bitcoin account established just a week after the system launched in 2009, a so-called “founder” account.
Many of the early bitcoin accounts are believed to be controlled by the person who supposedly created Bitcoin, who used “Satoshi Nakamoto” as a pseudonym.
Their analysis claimed the virtual currency eventually ended up in another account belonging to DPR, short for “Dread Pirate Roberts,” who controlled the Silk Road marketplace. U.S. federal prosecutors allege DPR is 29-year-old Ross William Ulbricht, who faces murder-for-hire, narcotics trafficking and computer hacking charges.
Trammell wrote that he sent the 1,000 bitcoins to Mt. Gox, the Tokyo-based bitcoin exchange, “for trading purposes.”
“Mt. Gox should be able to easily confirm that they indeed control this destination address,” he wrote.
Trammell’s explanation is “completely believable, and thus we no longer believe that the very early founder account we identified in the full bitcoin transaction graph belongs to Satoshi Nakamoto,” Shamir wrote. “We will revise our paper accordingly.”
Although the researchers hedged on the claim, their wording in the paper was strong enough to suggest that they might have spotted something stunning.
“The short path we found suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the Bitcoin community, Satoshi Nakamoto and DPR.”
The paper touched off a firestorm of criticism on Reddit. By studying Bitcoin’s public ledger of transactions, called the “blockchain,” commentators quickly cast doubt on it.
“The paper is complete crap,” wrote Jeff Garzik, a software engineer who has extensive experience with Bitcoin, in an email to IDG.
Bitcoin’s blockchain is public and transparent, showing all transactions since the system was launched. But following the flow of bitcoins can get tricky, especially if “mixing” services are used, which create spider web-like transaction trails.
Dustin Trammell, a security researcher who is CEO of the vulnerability marketplace ExploitHub, wrote in a blog post that the Israeli researchers failed in their analysis, which was subject to blistering criticism from the bitcoin community.
“I hope this puts to rest any further speculation regarding whether or not I am Satoshi Nakamoto and whether or not I have had any involvement with the Silk Road,” Trammell wrote. “I am not and have not.”
The paper was written by Adi Shamir and Dorit Ron of the Weizmann Institute of Science in Israel. Shamir is a noted cryptographer credited with co-creating the RSA encryption algorithm, which is widely used to protect corporate data.
In an email to IDG News Service, Shamir defended their work, writing that “we were extremely careful in our choice of words and repeatedly stressed that we have no proof.”
But later on Wednesday, Shamir wrote in an email that after reading Trammell’s blog post, the paper would be revised.
In four paragraphs at the end of their 13-page paper, Shamir and Ron described a 1,000-bitcoin transaction, worth around $60,000 at the time, sent in March. It came from a bitcoin account established just a week after the system launched in 2009, a so-called “founder” account.
Many of the early bitcoin accounts are believed to be controlled by the person who supposedly created Bitcoin, who used “Satoshi Nakamoto” as a pseudonym.
Their analysis claimed the virtual currency eventually ended up in another account belonging to DPR, short for “Dread Pirate Roberts,” who controlled the Silk Road marketplace. U.S. federal prosecutors allege DPR is 29-year-old Ross William Ulbricht, who faces murder-for-hire, narcotics trafficking and computer hacking charges.
Trammell wrote that he sent the 1,000 bitcoins to Mt. Gox, the Tokyo-based bitcoin exchange, “for trading purposes.”
“Mt. Gox should be able to easily confirm that they indeed control this destination address,” he wrote.
Trammell’s explanation is “completely believable, and thus we no longer believe that the very early founder account we identified in the full bitcoin transaction graph belongs to Satoshi Nakamoto,” Shamir wrote. “We will revise our paper accordingly.”
Although the researchers hedged on the claim, their wording in the paper was strong enough to suggest that they might have spotted something stunning.
“The short path we found suggests (but does not prove) the existence of a surprising link between the two mysterious figures of the Bitcoin community, Satoshi Nakamoto and DPR.”
The paper touched off a firestorm of criticism on Reddit. By studying Bitcoin’s public ledger of transactions, called the “blockchain,” commentators quickly cast doubt on it.
“The paper is complete crap,” wrote Jeff Garzik, a software engineer who has extensive experience with Bitcoin, in an email to IDG.
Bitcoin’s blockchain is public and transparent, showing all transactions since the system was launched. But following the flow of bitcoins can get tricky, especially if “mixing” services are used, which create spider web-like transaction trails.
Bitcoin keeps surging, taps new record atop $1,200
MADRID (MarketWatch) -- Bitcoin continued to push higher Friday, touching a new record of $1,242 before pulling back to around $1,183. The virtual currency took out Wednesday's $1,000 high on Thanksgiving Day. The run-up for bitcoin got new life after a congressional hearing earlier this month that effectively gave the currency an official blessing. The currency also elbowed into the holiday shopping season with its own Bitcoin Black Friday promotion involving hundreds of merchants.
Is Bitcoin About To Change The World?
The past weeks have seen a surprising meeting of minds between chairman of the US Federal Reserve Ben Bernanke, the Bank of England, the Olympic-rowing and Zuckerberg-bothering Winklevoss twins, and the US Department of Homeland Security. The connection? All have decided it's time to take Bitcoin seriously.
Until now, what pundits called in a rolling-eye fashion "the new peer-to-peer cryptocurrency" had been seen just as a digital form of gold, with all the associated speculation, stake-claiming and even "mining"; perfect for the digital wild west of the internet, but no use for real transactions.
Bitcoins are mined by computers solving fiendishly hard mathematical problems. The "coin" doesn't exist physically: it is a virtual currency that exists only as a computer file. No one computer controls the currency. A network keeps track of all transactions made using Bitcoins but it doesn't know what they were used for – just the ID of the computer "wallet" they move from and to.
Right now the currency is tricky to use, both in terms of the technological nous required to actually acquire Bitcoins, and finding somewhere to spend them. To get them, you have to first set up a wallet, probably online at a site such as Blockchain.info, and then pay someone hard currency to get them to transfer the coins into that wallet.
A Bitcoin payment address is a short string of random characters, and if used carefully, it's possible to make transactions anonymously. That's what made it the currency of choice for sites such as the Silk Road and Black Market Reloaded, which let users buy drugs anonymously over the internet. It also makes it very hard to tax transactions, despite the best efforts of countries such as Germany, which in August declared that Bitcoin was "private money" in which transactions should be taxed as normal.
It doesn't have all the advantages of cash, though the fact you can't forge it is a definite plus: Bitcoin is "peer-to-peer" and every coin "spent" is authenticated with the network. Thus you can't spend the same coin in two different places. (But nor can you spend it without an internet connection.) You don't have to spend whole Bitcoins: each one can be split into 100m pieces (each known as a satoshi), and spent separately.
Although most people have now vaguely heard of Bitcoin, you're unlikely to find someone outside the tech community who really understands it in detail, let alone accepts it as payment. Nobody knows who invented it; its pseudonymous creator, Satoshi Nakamoto, hasn't come forward. He or she may not even be Japanese but certainly knows a lot about cryptography, economics and computing.
Until now, what pundits called in a rolling-eye fashion "the new peer-to-peer cryptocurrency" had been seen just as a digital form of gold, with all the associated speculation, stake-claiming and even "mining"; perfect for the digital wild west of the internet, but no use for real transactions.
Bitcoins are mined by computers solving fiendishly hard mathematical problems. The "coin" doesn't exist physically: it is a virtual currency that exists only as a computer file. No one computer controls the currency. A network keeps track of all transactions made using Bitcoins but it doesn't know what they were used for – just the ID of the computer "wallet" they move from and to.
Right now the currency is tricky to use, both in terms of the technological nous required to actually acquire Bitcoins, and finding somewhere to spend them. To get them, you have to first set up a wallet, probably online at a site such as Blockchain.info, and then pay someone hard currency to get them to transfer the coins into that wallet.
A Bitcoin payment address is a short string of random characters, and if used carefully, it's possible to make transactions anonymously. That's what made it the currency of choice for sites such as the Silk Road and Black Market Reloaded, which let users buy drugs anonymously over the internet. It also makes it very hard to tax transactions, despite the best efforts of countries such as Germany, which in August declared that Bitcoin was "private money" in which transactions should be taxed as normal.
It doesn't have all the advantages of cash, though the fact you can't forge it is a definite plus: Bitcoin is "peer-to-peer" and every coin "spent" is authenticated with the network. Thus you can't spend the same coin in two different places. (But nor can you spend it without an internet connection.) You don't have to spend whole Bitcoins: each one can be split into 100m pieces (each known as a satoshi), and spent separately.
Although most people have now vaguely heard of Bitcoin, you're unlikely to find someone outside the tech community who really understands it in detail, let alone accepts it as payment. Nobody knows who invented it; its pseudonymous creator, Satoshi Nakamoto, hasn't come forward. He or she may not even be Japanese but certainly knows a lot about cryptography, economics and computing.
Bitcoin value soars above $1,000 on Mt. Gox exchange
The dollar value of a single Bitcoin is on the rise.
Mt. Gox, a popular exchange for Bitcoin traders, has seen the conversion rate on its service explode over the last several weeks. On Wednesday, Bitcoin trading surpassed the $1,000 mark on Mt. Gox, hitting a high of $1,073.
Bitcoin currency trading has become a popular enterprise. Consumers head to exchanges like Mt. Gox and others and give up a certain amount of their local currency for a single Bitcoin. Because Bitcoin is decentralized, conversion rates can vary between exchanges. Mt. Gox, for example, tends to offer a slightly higher value than other exchanges.
Still, Mt. Gox's latest trading underscores the rapidly increasing popularity of Bitcoin. At the beginning of November, the currency conversion for US dollars was hovering at around $200 per Bitcoin. In just the last four weeks, it's up to more than $1,000 with no sign of slowing down.
Trading Bitcoins has become sport for many of tech's biggest names. The Winklevoss twins have been the foremost supporters of Bitcoin and are believed to have invested a collective $11 million in Bitcoins. That was long before Bitcoin hit its recent highs.
Mt. Gox, a popular exchange for Bitcoin traders, has seen the conversion rate on its service explode over the last several weeks. On Wednesday, Bitcoin trading surpassed the $1,000 mark on Mt. Gox, hitting a high of $1,073.
Bitcoin currency trading has become a popular enterprise. Consumers head to exchanges like Mt. Gox and others and give up a certain amount of their local currency for a single Bitcoin. Because Bitcoin is decentralized, conversion rates can vary between exchanges. Mt. Gox, for example, tends to offer a slightly higher value than other exchanges.
Still, Mt. Gox's latest trading underscores the rapidly increasing popularity of Bitcoin. At the beginning of November, the currency conversion for US dollars was hovering at around $200 per Bitcoin. In just the last four weeks, it's up to more than $1,000 with no sign of slowing down.
Trading Bitcoins has become sport for many of tech's biggest names. The Winklevoss twins have been the foremost supporters of Bitcoin and are believed to have invested a collective $11 million in Bitcoins. That was long before Bitcoin hit its recent highs.
'There are ideas to use Bitcoin to alleviate poverty' - expert
Georgios Papadopoulos is an economist and philosopher whose research gravitates toward money and its socioeconomic functions, says that “Bitcoin is relatively international, and there are some ideas to use it to alleviate poverty in the less developed countries, e.g. by making possible the transfer of funds from migrants who work in the rich countries to their families in the poorest regions of the world without having to pay the extortionate rates of banks and companies.” The Voice of Russia discussed the issue with Mr. Papadopoulos in an exclusive interview.
What are the ways to monetize Bitcoin, since it is not de facto a currency and is exchanged for traditional media of payment?
I guess the easiest way is that if you have a store and you have to sell something, you can accept Bitcoins. But usually people don’t have the facilities to do that. So, the way to do it actually or the most followed way is just go to a bureau of currencies and just buy Bitcoins by transferring money from your bank account or your credit card.
But I have to say that this is not the very good moment to do it, especially because of the volatility of the currency, but also because of the value of the currency and there are a lot of frauds now involved and a lot of people are trying to speculate or extract funds. So, you have to be extremely careful. But there are plenty of market places around, there is one also in Russia where Bitcoins can be exchanged for rubles, and almost everywhere in the developed world there are brokers where you can bring your money and buy Bitcoins.
Bitcoin is essentially a series of letters and number generated randomly, which means that the number of Bitcoins is finite. What are we to expect once it reaches its physical limit?
There already is an integrated limit in how much Bitcoins can be produced. And actually, the whole idea of the Bitcoin is to limit the supply of the currency. The longer we are going in time and the longer the life of Bitcoin is, the less Bitcoins are created. And actually, everybody can look online and see how many Bitcoins are going to be created in the future. And now, we are down to 12 054 000 Bitcoins that will be coined in the future.
And this somehow also explains the fact that the growth of the value of Bitcoin is somehow exponential, because the expectation is that as we go further in time, there will be less and less Bitcoins. With the growing demand it is obvious that the value is going to rise.
And actually, this is also a very interesting particularity of the Bitcoin. Instead of fixing its value to a particular major currency, the dollar or the euro, they instead fixed the amount of Bitcoins that are available. So, in that sense they safeguarded the value.
Bitcoin is gaining popularity in China, which has been in the news for the past couple of days. What prospects are there for Bitcoin going global?
Yes, this is true. And one of the biggest online stores in China – Baidu – has started to accept Bitcoins. But I think the main cause of the popularity of Bitcoin is of course the whole discussion about the speculation and the possibility a lot of people see to make money really fast. So, as long as this kind of bubble is unfolding and there is media, and visibility for the currency, we would see more and more people around the globe getting excited about it and even thinking about buying Bitcoins.
Read more: http://voiceofrussia.com/news/2013_11_30/There-are-ideas-to-use-Bitcoin-to-to-alleviate-poverty-expert-5490/
What are the ways to monetize Bitcoin, since it is not de facto a currency and is exchanged for traditional media of payment?
I guess the easiest way is that if you have a store and you have to sell something, you can accept Bitcoins. But usually people don’t have the facilities to do that. So, the way to do it actually or the most followed way is just go to a bureau of currencies and just buy Bitcoins by transferring money from your bank account or your credit card.
But I have to say that this is not the very good moment to do it, especially because of the volatility of the currency, but also because of the value of the currency and there are a lot of frauds now involved and a lot of people are trying to speculate or extract funds. So, you have to be extremely careful. But there are plenty of market places around, there is one also in Russia where Bitcoins can be exchanged for rubles, and almost everywhere in the developed world there are brokers where you can bring your money and buy Bitcoins.
Bitcoin is essentially a series of letters and number generated randomly, which means that the number of Bitcoins is finite. What are we to expect once it reaches its physical limit?
There already is an integrated limit in how much Bitcoins can be produced. And actually, the whole idea of the Bitcoin is to limit the supply of the currency. The longer we are going in time and the longer the life of Bitcoin is, the less Bitcoins are created. And actually, everybody can look online and see how many Bitcoins are going to be created in the future. And now, we are down to 12 054 000 Bitcoins that will be coined in the future.
And this somehow also explains the fact that the growth of the value of Bitcoin is somehow exponential, because the expectation is that as we go further in time, there will be less and less Bitcoins. With the growing demand it is obvious that the value is going to rise.
And actually, this is also a very interesting particularity of the Bitcoin. Instead of fixing its value to a particular major currency, the dollar or the euro, they instead fixed the amount of Bitcoins that are available. So, in that sense they safeguarded the value.
Bitcoin is gaining popularity in China, which has been in the news for the past couple of days. What prospects are there for Bitcoin going global?
Yes, this is true. And one of the biggest online stores in China – Baidu – has started to accept Bitcoins. But I think the main cause of the popularity of Bitcoin is of course the whole discussion about the speculation and the possibility a lot of people see to make money really fast. So, as long as this kind of bubble is unfolding and there is media, and visibility for the currency, we would see more and more people around the globe getting excited about it and even thinking about buying Bitcoins.
Read more: http://voiceofrussia.com/news/2013_11_30/There-are-ideas-to-use-Bitcoin-to-to-alleviate-poverty-expert-5490/
Bitcoin Is Flawed, But It Will Still Take Over the World
The Pink Cow is the first restaurant in Tokyo that lets you pay with Bitcoin, the world’s most popular digital currency. In some ways, this California-Mexican cafe — a hangout run by an American expatriate who believes in new ideas — sits at the center of the Bitcoin universe. The digital currency was created by an anonymous computer programmer who many assume is Japanese, and the first big Bitcoin exchange — the web service where so many people bought their first bitcoins — is operated out of a Tokyo office not far from this wonderfully quirky bar and restaurant in the city’s Roppongi district.
But when the Tokyo Bitcoin Meetup Group holds one of its weekly gatherings at the Pink Cow — bringing together Bitcoin enthusiasts from across the city and beyond — only about a third of them actually pay for dinner and drinks with bitcoins. People like Marco Crispini, an expatriate from Britain, and Aya Walraven, who moved to Tokyo from Canada, very much believe in the digital currency. And they own bitcoins. But they prefer not to spend them because their value just keeps going up.
You can see their point. In the month since Crispini and Walraven declined to spend their bitcoins on burritos at a mid-October meetup, the value of the currency rose from about $160 on the Tokyo-based Mt. Gox exchange to well above $700. In other words: What they would have spent on a $20 Cal-Mex meal is now worth at least $90.
The trouble is that this sort of bitcoin hoarding leaves many questioning the future of the currency. If economic incentives encourage people to hoard their bitcoins rather than spend them, the thinking goes, the currency will never fulfill the extravagant promises laid down by the biggest believers, who say it will streamline monetary transactions, free the world from the financial manipulation of big government and big banks, breakdown the financial walls between nations, and, well, remake the worldwide economy.
The concerns are justified. Even some of Bitcoin’s most ardent supporters — like Fred Friis, one of the Tokyo Bitcoiners who regularly spends his digital currency at the Pink Cow — say that the consistent increase in the currency’s value is a “legitimate issue.”
But when the Tokyo Bitcoin Meetup Group holds one of its weekly gatherings at the Pink Cow — bringing together Bitcoin enthusiasts from across the city and beyond — only about a third of them actually pay for dinner and drinks with bitcoins. People like Marco Crispini, an expatriate from Britain, and Aya Walraven, who moved to Tokyo from Canada, very much believe in the digital currency. And they own bitcoins. But they prefer not to spend them because their value just keeps going up.
You can see their point. In the month since Crispini and Walraven declined to spend their bitcoins on burritos at a mid-October meetup, the value of the currency rose from about $160 on the Tokyo-based Mt. Gox exchange to well above $700. In other words: What they would have spent on a $20 Cal-Mex meal is now worth at least $90.
The trouble is that this sort of bitcoin hoarding leaves many questioning the future of the currency. If economic incentives encourage people to hoard their bitcoins rather than spend them, the thinking goes, the currency will never fulfill the extravagant promises laid down by the biggest believers, who say it will streamline monetary transactions, free the world from the financial manipulation of big government and big banks, breakdown the financial walls between nations, and, well, remake the worldwide economy.
The concerns are justified. Even some of Bitcoin’s most ardent supporters — like Fred Friis, one of the Tokyo Bitcoiners who regularly spends his digital currency at the Pink Cow — say that the consistent increase in the currency’s value is a “legitimate issue.”
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