Hasta La Gadget!

Bitcoin, the virtual currency, has seen a few big moments in the last few weeks, not the least of which was a federal judge ruling that it is a currency and is subject to regulation. For all its upsides, there is a big downside, too – illicit use prompted by the privacy offered by the […]

If you manage Bitcoins through Android devices, you may need to keep a close eye on your virtual cash in the near future. Developers have found that multiple Android-based Bitcoin apps, such as Bitcoin Wallet and Mycelium Wallet, are vulnerable to number generator exploits that could be used for theft. Although patched apps are either available in beta or coming soon, the complete fix involves more than just new code — users have to both create a new Bitcoin address and send it out to anyone still relying on old details. You’re safe if you use a simple Bitcoin exchange client, but you’ll otherwise want to visit the source link for more help with securing your digital holdings.

Filed under: Cellphones, Internet, Mobile

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Via: CNET

Source: Bitcoin

Depending on whom you are speaking to, Bitcoin is either one of the most promising money-related ventures in modern times, it’s a fad prone to fizzle away, or it is a threat to all. Regardless of which side you fall on, one thing is now certain: bitcoins are a currency, and they’re subject to regulation […]

Thailand isn’t exactly known for its unquestionable ethics; activities that would quickly be labeled as illegal in the West are practiced in plain view in Bangkok. Loose regulations mean that a nearly limitless array of goods and services can be purchased with cash and even credit — a currency like Bitcoin would only be necessary for the most heinous of exchanges. It’s a bit ironic, then, that the Thai government is now the world’s first to ban Bitcoin. Following a conference at the Bank of Thailand yesterday, the Foreign Exchange Administration and Policy Department voted to make the digital coinage illegal, prohibiting people from buying, selling or trading Bitcoins for goods or services. Additionally, Bitcoins cannot be moved into or out of the country, rendering any current stockpiles worthless. The Bank of Thailand ended its dispatch with a promise to revisit the ruling in the future, though this landmark decision could prove to be the beginning of the end for Bitcoin.

Filed under: Household, Internet

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Via: The Telegraph

Source: Bitcoin Co. Ltd.

The Leading Exchange in a Business Getting Attention

CEO Mark Karpeles, along with Marketing Officer, Gonzague Gay-Bouchery, is running a company in the Shibuya area of Tokyo that has gained quite a lot of attention recently. That company, Mt.Gox, handles more than 60% of all Bitcoin trading volume worldwide and has assumed leadership in the space of this decentralized, alternative currency.

This, the leading exchange in a business opportunity that now features investment funds and that is attracting venture capital investment in both related companies and in Bitcoins themselves, with investors reportedly including Andreessen Horowitz and the Winklevoss twins.

Perhaps because of its size and leadership in the space, Mt.Gox has become the face of Bitcoins – and it has received the most scrutiny. Most governments, notably the US government, have taken a skeptical approach with Bitcoins and it seems as though Mt.Gox is one of the main targets so far. The US government has already taken action, recently freezing a US-based account operated by Mutum Sigillum LLC, a subsidiary of Mt.Gox, ostensibly due to compliance issues.

But Mark and Gonzague said they would not – and could not – comment on any issues related to the US government. And they said they are not bothered by what’s going on there.

This, the world’s leading Bitcoin marketplace, is a place of passion for what the currency means for the future of international business. Despite some recent inconveniences, they are confident about the future of Bitcoins and their future role in the global economy and I had the opportunity to hear it first-hand from these 2 leaders in the space.

Mt.Gox’s View on Bitcoins

First of all, they said, Bitcoins will not replace currency as it exists now. BUT, it could inspire the future of currencies. Today, some feel that currencies are stuck in a terrestrial, local mindset. US dollars, Euros, Japanese Yen – these are currencies used around the world but their supply, policies, etc. are dictated and controlled by the central banks or regulating bodies in their home domestic markets.

“Holders of these currencies are at the mercy of the system,” Gonzague explained, “your relative wealth in the world is tied to the economic well-being of your home currency. A bank can restrict or even control what you are doing. PayPal can restrict what you are doing. Maybe the credit card company will limit the amount that you can use on your card. Or, like a lot of us in the digital age, you don’t have a local telephone line or address, which can negatively impact your status with financial institutions.

“Bitcoins allow you to have wealth outside of the traditional parameters, have flexibility and ultimately have control over your finances. Wealth becomes truly global, it becomes transparent, and it becomes unencumbered by the restrictions – and exorbitant fees – imposed by the current financial industry.”

A “Decentralized Crypto-Currency”

Bitcoins, have been called a “decentralized crypto-currency” and both parts of that label are critical to why, its promoters feel, it is the model of the future of money.

Decentralized – There is no dispute that international travelers and business people have a real need for ease of access, and liquidity of funds as they operate across borders. But the current framework, according to Mark and Gonzague, is not truly global and is not efficient. Currently, during traveling, or when transferring money to clients overseas, people and businesses are levied with fees and taxes and have to wait up to several days to wire money or to receive wired money. Money transfers are subjected to a higher degree of regulation and scrutiny then are transactions made domestically.

Bitcoins, for the first time, offer an international currency, for international travelers and business people – a decentralized currency that is equally valuable and easy to use among anyone, anywhere, across borders or not.

“We are not Americans, French or Japanese,” explained Gonzague, “we are Earthlings. This is the first means for people to carry ‘value’ around the world, and it is the first chance for one ‘currency’ to be used anywhere – for example, 2 people, 1 in Paris, 1 in New Zealand – they can work together as if they are next door, making payments to each other, without fees, instantaneously, and with a common currency that both can use just as easily.”

Crypto-currency – Bitcoins have several technical advantages over other forms of currency. They are completely digital but they rely on cryptography (encrypting and decrypting as required steps for validity) and are virtually impossible to steal or counterfeit. One of the security fears of Bitcoins has been so-called “double-spend” where you pay someone in Bitcoins, retrieve it back and spend it again.

“Impossible.” Mark explains, quite convincingly. “The level of robustness of the cryptography used with Bitcoins is so great that it is almost impossible to have the amount of CPU to even try it. My estimates are that it would take 64 times more power than all of the CPU required to “mine” all 21 million Bitcoins.”

Another aspect of the cryptography that makes Bitcoins ultimately more secure and safe to use is something called a ‘block chain’ – a sort of transaction ledger. All transactions between holders of a Bitcoin are logged, proving the transfer of Bitcoins in payments between 2 parties and making it virtually impossible to steal. Within the block chain, the recipient of a Bitcoin, by virtue of how they are set up, would be logged, so the payer of a Bitcoin gets absolute proof of the payment recipient and the exact time when a transaction is made.

Add to these points a 3rd feature: Finite Supply and Inherent Value (like gold). Bitcoins take effort to be created (or “mined”) requiring massive computing power, and the volume at which they can be mined is strictly controlled through an algorithm, and ultimately, the absolute volume of Bitcoins is limited to 21 million. Also, Bitcoins are considered by many to be a better inherent asset than gold – unlike gold, there are no storage requirements, no insurance, no physical burdens, etc.

The combination of the 3 – Decentralized, Cryptography, Inherent Value – make Bitcoins arguably more reliable, more convenient, more transparent, and potentially more valuable for an increasingly globalized world.

Mark summed it up: “Who says that in a global economy, with communication happening instantaneously, with information available instantaneously, with people making decisions with implications straddling borders and jurisdictions, that my payment options should be limited to a currency tied to one arbitrary political territory of the world, whose monetary policy is in the interests of that territory, and whose currency can be printed or withheld at will without an intrinsic value behind it other than the faith I have in that lone government?”

Not surprisingly, currently there is no agreement by any government regarding what exactly Bitcoins are and how they should be handled. But it is a given that governments are not going to give up their control over monetary supply or financial transactions easily and general acceptance of Bitcoins, if it happens at all, will be a bottoms-up process.

What About Japan?

Which brings us to Mt.Gox’s status in Japan and its future. They have been in discussion with the Japanese authorities – the Financial Services Agency (FSA) – for 1 and 1/2 years about the business and how it should be regulated. And as an example of how difficult it is to accurately peg what Bitcoins are, the Japanese authorities, to date, say that Mt.Gox does not need a financial license. “There are 3 kinds of licenses for financial activities in Japan and what we do is actually not covered by any of them, so at the moment, the FSA says we are outside of their jurisdiction. There has been discussion about trying to fit us under one of the licenses or to make a new license for our business, but it is not clear where it is going to go at this point.”

To date, the vast majority of the company’s business has been outside of Japan, which is likely why there hasn’t been much concern by the Japanese authorities – yet. But this may change if interest in Bitcoins in Japan starts to grow as it has in Europe and the Americas.

Some More Background…

Some people think that Bitcoins are a Japanese invention and that Mt.Gox is a natural outcropping of that. But while the inventor of Bitcoins signed the registration documents as Satoshi Nakamoto, this was almost certainly an assumed name and even the Mt.Gox guys are not sure who exactly this person was. For Mark and Mt.Gox, their role came via a connection through another venture business.

Mark started another company in Japan called Tibanne which is a hosting and domain management business. Mark actually built a Bitcoin client in order to accept payments by Bitcoin for his hosting business. Through this, Mark met Jeb McCaleb, founder of Mt.Gox. McCaleb had started the company as an online card trading exchange called “Magic The Gathering Online eXchange” – hence the name, Mt.Gox. But when he built the Bitcoin exchange, it soon became the majority of the business.

And eventually, in a classic entrepreneurial “I liked it so much I bought the company” moment, Tibanne acquired 88% of Mt.Gox and it became a subsidiary of Tibanne.  McCaleb moved on to other ventures and Mt.Gox went on to become the #1 exchange in the business.

So What Does the Future Hold?

There are countless threats to the business, but in Mark’s view, countless ways for the business model to put its stamp on world business and the future of money and economics.

“Bitcoins have hit a certain critical mass of recognition, even if general acceptance is still sometime in the future. And we’re seeing the inevitable challenges and pushback felt in any new business model and leading edge opportunity. But if we can continue to explain the advantages of Bitcoins while providing a safe and robust service, we’ll be in a position to help reach the next important step forward toward a truly transparent, global world economy.”