The Almighty Buck

Bitcoin Jumps Another 10% in 24 Hours, Sets New Record at $19,000 (arstechnica.com) 108

An anonymous reader quotes Ars Technica: Bitcoin's price set a new record on Saturday as the virtual currency rose above $19,000 for the first time on the Bitstamp exchange. The gains came just hours after the currency crossed the $18,000 mark. Bitcoin's value has doubled over the last three weeks, and it's up more than 20-fold over the last year.

Bitcoin's value keeps rising despite a growing chorus of experts who say the currency value is an unsustainable bubble. One CNBC survey this week found that 80 percent of Wall Street economists and market strategists saw bitcoin's rise as a bubble, compared to just two percent who said the currency's value was justified. Another survey reported by The Wall Street Journal this week found that 51 out of 53 economists surveyed thought bitcoin's price was an unsustainable bubble.

Less than a month ago, Bitcoin was selling for $8,000.
The Media

'The Gawker Foundation' is Crowdfunding a Bid To Re-Launch Gawker.com (savegawker.com) 77

"Gawker may soon return from the dead," reports TechCrunch. While Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month that a bankruptcy administrator has not been able to find a buyer for the Gawker site, and that lawyers for Peter Thiel (the billionaire venture capitalist who helped fund the lawsuit that led to Gawker's bankruptcy) were arguing that he'd been unfairly excluded from the process. Now a group of former Gawker employees calling themselves the Gawker Foundation has launched a Kickstarter campaign to buy the old domain and relaunch with a nonprofit, membership-funded model.
"The truth is often inconvenient, and Gawker's work isn't done," explains a mirror of their campaign site at SaveGawker.com. "We want to dig deeper." $10 pledges get you a laptop sticker, $250 pledges earn you an invite to their glorious re-launch party, and to solicit $10,000 pledges they're even asking wealthy backers to "Give us half of one bitcoin."

"By setting ourselves up as an ownerless, advertiser-less, non-profit media organization, the editorial team will be able to do what they do best. More than a dozen Gawker Media alumni are involved in this project..."
Bitcoin

An Anonymous Bitcoin Millionaire Is Donating Their Fortune To Charities (gizmodo.com) 93

An anonymous reader quotes a report from Gizmodo: Tis the season for giving, and one Bitcoin investor claims to be giving away the majority of their cryptocurrency holdings after experiencing an incredible year. The unnamed donor has set up a fund to hand out $86 million worth of Bitcoin to various charities, and they've already started listing the donations and providing receipts. If this whole thing works out, you can just call this mystery person the Bitcoin Bill Gates. So far, The Pineapple Fund claims to have distributed just over $6.5 million in Bitcoin between eight charities. Its website provides links to the blockchain transactions under the name of each charity. These transactions are in a public ledger, but the sender and recipient are only identified by a long string of digits. We contacted the Electronic Freedom Foundation to ask if the two transactions that were purportedly sent to the activist group were indeed legitimate. A spokesperson confirmed via email that the EFF has "been in touch with the Pineapple Fund and are in the process of receiving the donation." The anonymous founder writes: "Sometime around the early days of bitcoin, I saw the promise of decentralized money and decided to mine/buy/trade some magical internet tokens. The expectation shattering returns of bitcoin over many years has lead to an amount far more than I can spend. What do you do when you have more money than you can ever possibly spend? Donating most of it to charity is what I'm doing. For reference, The Pineapple Fund is bigger than the entire market cap of bitcoin when I got in, and one of the richest 250 bitcoin addresses today."
Bitcoin

Coinbase Wants Wall Street To Resolve Its Bitcoin Trust Issues (bloomberg.com) 48

In an effort to use digital money to reinvent finance, cryptocurrency exchange Coinbase is trying to legitimize itself by convincing big money managers to trust it enough to trade on its exchange. They need to "reassure regulators that bitcoin isn't a silk road for hackers, money launderers and tax evaders," reports Bloomberg. From the report: Despite the table tennis, Coinbase shows glimmers of maturity. More than 10 million customers have used the company since it began, though it recently quit updating the tally on its website. About $57 billion of digital currency has traded on the exchange so far this year. It doubled its staff in that time and expects to do so again in 2018. Ultimately, Coinbase plans to go public. The firm said it's prevailed against security threats, helping it avoid the fate of Mt. Gox, the world's biggest bitcoin exchange before shutting its doors in 2014 after $480 million of customer funds went bye-bye. Coinbase stores 98 percent of users' digital currencies in offline safe-deposit boxes. The remaining 2 percent, which is vulnerable because it's online, is covered by insurance. The company holds more than $10 billion in digital assets. Developing ties with banks is one of the biggest challenges. Coinbase doesn't publicly disclose its banking relationships, but a person familiar with the matter said the company is partnering with Cross River Bank, Metropolitan Bank and Silvergate Bank in the U.S.
Security

Lock Out: the Austrian Hotel That Was Hacked Four Times (bbc.com) 52

AmiMoJo shares a BBC report: Christoph Brandstatter is managing director of the four-star Seehotel, Jagerwirt, in Austria's Alps. His hotel's electronic door locks and other systems were hacked for ransom four times, between December 2016 and January 2017. "We got a ransomware mail which was hidden in a bill from Telekom Austria." His hotel's door keys became unusable after he clicked on a link to his bill. So was his hard drive. "Actually, as a small business you do not really think that anybody's interested in you for hacking, so we had no plan what to do," he recalls. He paid a ransom of two bitcoins, saying "at that time it was about $1,882." He has now installed firewalls and new antivirus software, and has trained his staff to recognise phishing emails that may seem genuine but actually contain malware. And he's moved back to traditional metal keys.
Bitcoin

Feds Moving Quickly To Cash in on Seized Bitcoin, Now Worth $8.4 Million (arstechnica.com) 141

A federal judge in Utah has agreed to let the US government sell off a seized cache of over 513 bitcoins (BTC) and 512 Bitcoin Cash (BCH). At current prices, that would yield approximately $8.4 million for the bitcoins and nearly $1 million for the BCH. From a report: In a court filing, prosecutors noted that due to the volatility of the Bitcoin market, both coins risk losing value. Both the BTC and the BCH have already been transferred to government-controlled wallets. The new round of seized digital currency belonged to a Utah man named Aaron Shamo, whom prosecutors say led a multimillion-dollar ring of counterfeit pharmaceuticals, including oxycodone and alprazolam that were sold on Dark Web marketplaces. Shamo was arrested over a year ago -- his trial has not yet been scheduled. On Tuesday, US District Judge Dale Kimball allowed the sale to proceed. Once sold, the money would go to an account held at the Treasury Executive Office for Asset Forfeiture.
Bitcoin

A Cryptocurrency Without a Blockchain Has Been Built To Outperform Bitcoin (technologyreview.com) 182

An anonymous reader quotes a report from MIT Technology Review: Bitcoin isn't the only cryptocurrency on a hot streak -- plenty of alternative currencies have enjoyed rallies alongside the Epic Bitcoin Bull Run of 2017. One of the most intriguing examples is also among the most obscure in the cryptocurrency world. Called IOTA, it has jumped in total value from just over $4 billion to more than $10 billion in a little over two weeks. But that isn't what makes it interesting. What makes it interesting is that it isn't based on a blockchain at all; it's something else entirely. The rally began in late November, after the IOTA Foundation, the German nonprofit behind the novel cryptocurrency, announced that it was teaming up with several major technology firms to develop a "decentralized data marketplace."

Though IOTA tokens can be used like any other cryptocurrency, the protocol was designed specifically for use on connected devices, says cofounder David Sonstebo. Organizations collect huge amounts of data from these gadgets, from weather tracking systems to sensors that monitor the performance of industrial machinery (a.k.a. the Internet of things). But nearly all of that information is wasted, sitting in siloed databases and not making money for its owners, says Sonstebo. IOTA's system can address this in two ways, he says. First, it can assure the integrity of this data by securing it in a tamper-proof decentralized ledger. Second, it enables fee-less transactions between the owners of the data and anyone who wants to buy it -- and there are plenty of companies that want to get their hands on data.
The report goes on to note that instead of using a blockchain, "IOTA uses a 'tangle,' which is based on a mathematical concept called a directed acyclic graph." The team decided to research this new alternative after deciding that blockchains are too costly. "Part of Sonstebo's issue with Bitcoin and other blockchain systems is that they rely on a distributed network of 'miners' to verify transactions," reports MIT Technology Review. "When a user issues a transaction [with IOTA], that individual also validates two randomly selected previous transactions, each of which refer to two other previous transactions, and so on. As new transactions mount, a 'tangled web of confirmation' grows, says Sonstebo."
Bitcoin

SEC Shuts Down Munchee ICO (techcrunch.com) 43

The Securities and Exchange Commission has shut down Munchee, a company that built a $15 million token sale. According to TechCrunch, "The Munchee ICO aimed to fund the MUN coin, a payment system for restaurant reviews." However, the company "received a cease and desist from the SEC on December 11" because it constituted the offer and sale of unregistered securities. From the report: Within the SECs findings they noted that Munchee touted itself as a "utility" token which means that the company believed the MUN token would be primarily used within the Munchee ecosystem and not be used to fund operations. However, thanks to an application of the Howey Test (a Supreme Court finding that essentially states that any instrument with the expectation of return is an investment vehicle), the SEC found the Munchee was actually releasing a security masquerading as a utility. "Munchee offered MUN tokens in order to raise capital to build a profitable enterprise," read the SEC notice. "Munchee said that it would use the offering proceeds to run its business, including hiring people to develop its product, promoting the Munchee App, and ensuring 'the smooth operation of the MUN token ecosystem.'" The stickiest part? Munchee claimed that its coins would increase in value thanks to a convoluted process of growth.

In short, Munchee was undone by two things: depending on the token sale as a vehicle to raise cash for operations and using the typically spammy and scammy marketing efforts most ICO floggers use now, tactics taken directly from affiliate marketing handbooks. Fortunately, Munchee was able to return all $15 million to the 40 investors that dumped their coins into scheme.

Bitcoin

SEC Warns 'Extreme Caution' Over Cryptocurrency Investments As Many People Take Out Mortgages To Buy Bitcoin (qz.com) 232

The head of the US Securities and Exchange Commission has warned bitcoin and other cryptocurrency investors to beware of scams and criminal activity in the sector. In the financial regulator's strongest statement yet, SEC chair Jay Clayton said: "If a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost." The warning comes at a time when many people have begun to take out mortgages to buy bitcoin. From a report: Clayton's statement was also issued the same day the SEC took regulatory action to halt an initial coin offering (ICO). "Recognize that these markets span national borders and that significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge," he wrote, in a sentence that was in bold. Clayton's statement referenced some of the crucial debates that have swirled around the rise and regulation of crypto-assets like bitcoins. Are these currencies? Commodities? Or securities? The statement notes in a footnote that bitcoin in the US has been designated a commodity. But the broader answer seems to be that while it depends from case to case, initial coin offerings, at least, are more likely to be scrutinized and held to the same bar as securities offerings.
Bitcoin

Bitcoin Fees Are Skyrocketing (arstechnica.com) 266

An anonymous reader quotes a report from Ars Technica: The cost to complete a Bitcoin transaction has skyrocketed in recent days. A week ago, it cost around $6 on average to get a transaction accepted by the Bitcoin network. The average fee soared to $26 on Friday and was still almost $20 on Sunday. The reason is simple: until recently, the Bitcoin network had a hard-coded 1 megabyte limit on the size of blocks on the blockchain, Bitcoin's shared transaction ledger. With a typical transaction size of around 500 bytes, the average block had fewer than 2,000 transactions. And with a block being generated once every 10 minutes, that works out to around 3.3 transactions per second. A September upgrade called segregated witness allowed the cryptographic signatures associated with each transaction to be stored separately from the rest of the transaction. Under this scheme, the signatures no longer counted against the 1 megabyte blocksize limit, which should have roughly doubled the network's capacity. But only a small minority of transactions have taken advantage of this option so far, so the network's average throughput has stayed below 2,500 transactions per block -- around four transactions per second.
Bitcoin

The Case that Bitcoin Is a Bubble (economist.com) 264

An anonymous reader shares an excerpt from the Economist: It seems that every day, Bitcoin seems to hit a new high. But the reported price can move up and down by $1,000 or so within a few hours. This might have made it a great investment for those who got in at the right price and are nimble enough to get out in time. But it doesn't make it a useful means of exchange (Editor's note: the link could be paywalled; alternative source). When the price is rising fast, those who use bitcoin will be reluctant to part with it; when the price falls, those who sell goods will be reluctant to accept it.
Bitcoin

Bitcoin Futures Surge In First Day Of Trading (npr.org) 64

On their first day of trading, bitcoin futures surged past $18,000, adding to a streak for the digital currency that began the year at just $1,000 and has nearly tripled in value over the past month alone. From a report: Reuters reports that bitcoin futures, traded through the Chicago Board Options Exchange (CBOE), saw January contracts, which opened at $15,460 in New York on Sunday evening, leap to a high of $17,170 during Asian hours. Trading, which began at 6 p.m. ET (5 p.m. CT), was so intense that halts designed to cool volatility were triggered twice on the CBOE. The halts are "not surprising based on the volatility of the underlying [asset]. The futures are behaving as expected and designed," Tom Lehrkinder, senior analyst at consulting firm Tabb Group, was quoted by CNBC as saying.
The Almighty Buck

Launch of Bitcoin Futures Trading Crashes CBOE Site (thestreet.com) 97

"5PM CT is the start of Bitcoin futures trading and the $CBOE website appears to be down," one market watcher posted on Twitter (and his observation was quickly confirmed by other cryptocurrency-watching accounts and confirmed by CBOE). "I'm guessing watching Bitcoin futures start trading is a more popular spectator sport than anticipated."

Bitcoin futures will also begin trading on the Chicago Mercantile Exchange in eight days. The Street report that the anticipation of that "has triggered wild swings in bitcoin prices over the last week." Overall, trading bitcoin futures is a positive development for the cryptocurrency says the research team at Fundstrat... The introduction of derivatives lays the necessary market structure for institutions to allocate cash towards cryptocurrencies, points out Fundstrat... Short sellers may now express negative views on bitcoin, which could lead to short-term pricing pressure. But the ability for short sellers to hate on bitcoin could be viewed as a longer term positive, Fundstrat says. Shorting essentially creates true price discovery and means that hedge funds could take bitcoin more seriously. This should improve the long-term prospects of bitcoin as it broadens sponsorship, Fundstrat believes.
The Almighty Buck

Coinbase Warns During Times of High Volatility, Access Could Become 'Unavailable' (cityam.com) 90

An anonymous reader quotes City AM: A leading bitcoin exchange has warned that customers may be unable to get their money out quickly in the event of a crash in the cryptocurrency's price. Writing in a blog post last week, Coinbase's co-founder and chief executive Brian Armstrong, said despite "sizeable and ongoing" increases in the firm's technical infrastructure and engineering staff, access to Coinbase services could become "degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for period of time," he said.

Armstrong added that there would be restrictions on how much customers could sell, or sell limits, to "protect client accounts and assets"... Bitcoin's market capitalisation rose above $300 billion for the first time earlier this week when its price rocketed to an all-time high of just over $17,000. Many analysts have warned that bitcoin represents an unsustainable bubble, though no one is quite sure when it will burst.

Bitcoin

People Who Can't Remember Their Bitcoin Passwords Are Really Freaking Out Now (slate.com) 202

An anonymous reader quotes a report from Slate: Bitcoin has had quite a week. On Thursday, the cryptocurrency surged past $19,000 a coin before dropping down to $15,600 by Friday midday. The price of a single Bitcoin was below $1,000 in January. Any investors who bought Bitcoins back in 2013, when the price was less than $100, probably feel pretty smart right now. But not all early cryptocurrency enthusiasts are counting their coins. Instead they might be racking their brains trying to remember their passwords, without which those few Bitcoins they bought as an experiment a few years ago could be locked away forever. That's because Bitcoin's decentralization relies on cryptography, where each transaction is signed with an identifier assigned to the person paying and the person receiving Bitcoin.

"I've tried to ignore the news about Bitcoin completely," joked Alexander Halavais, a professor of social technology at Arizona State University, who said he bought $70 of Bitcoin about seven years as a demonstration for a graduate class he was teaching at the time but has since forgotten his password. "I really don't want to know what it's worth now," he told me. "This is possibly $400K and I'm freaking the fuck out. I'm a college student so this would change my life lmao," wrote one Reddit user last week. The user claimed to have bought 40 bitcoins in 2013 but can't remember the password now. "A few years ago, I bought about 20 euros worth of bitcoin, while it was at around 300eur/btc.," lamented another Reddit user earlier this week. "Haven't looked at it since, and recently someone mentioned the price had hit 10.000usd. So, I decided to take a look at my wallet, but found that it wasn't my usual password. I have tried every combination of the password variations I usually use, but none of them worked."

Bitcoin

About 40 Percent of Bitcoin Is Held By 1,000 Users. If a Few of Them Want To Sell, That Could Tank Values (bloomberg.com) 241

On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency. From a report on Bloomberg: Holders of large amounts of bitcoin are often known as whales. And they're becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year. About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
Bitcoin

Bank of America Wins Patent For Crypto Exchange System (coindesk.com) 52

New submitter psnyder shares a report from CoinDesk: [The patent] outlined a potential cryptocurrency exchange system that would convert one digital currency into another. Further, this system would be automated, establishing the exchange rate between the two currencies based on external data feeds. The patent describes a potential three-part system, where the first part would be a customer's account and the other two would be accounts owned by the business running the system. The user would store their chosen cryptocurrency through the customer account. The second account, referred to as a "float account," would act as a holding area for the cryptocurrency the customer is selling, while the third account, also a float account, would contain the equivalent amount of the cryptocurrency the customer is converting their funds to. That third account would then deposit the converted funds back into the original customer account for withdrawal. The proposed system would collect data from external information sources on cryptocurrency exchange rates, and use this data to establish its own optimal rate. The patent notes this service would be for enterprise-level customers, meaning that if the bank pursues this project, it would be offered to businesses.
Bitcoin

Cryptocurrency Miners Are Using Old Tires to Power Their Rigs (vice.com) 79

Christopher Malmo, writing for Motherboard: An entrepreneurial cryptocurrency mining company has just announced an unusual deal: it has partnered with a tire-based waste-to-energy company in the United States to power its mining computers. Standard American Mining and PRTI, a tire "thermal demanufacturing" company based in North Carolina, are powering graphics cards-based mining equipment to earn a range of alternative cryptocurrencies like Ethereum. Basically, they take used tires and heat them to a precise temperature, resulting in components like steel (from belted tires), carbon black, and a burnable fuel. That fuel is the energy source driving turbines to make electricity, which powers an onsite cryptocurrency mining farm. Taking advantage of an underutilized electricity source to run computers isn't groundbreaking, but the unusual set-up shows that cryptocurrency mining is now profitable enough to justify finding quite unconventional sources of cheap or new energy generation.
Bitcoin

Bitcoin Nears $17,000 After Climbing About $4,000 in Less Than a Day 464

As economists attempt to make sense of Bitcoin, the cryptocurrency rocketed above $17,000 for the first time moments ago, adding about $4,000 to its price in fewer than 24 hours. Security reporter Brian Krebs tweeted on Thursday, "Closing in on $17k per bitcoin now (mind you, it was almost at $16k less than an hour ago. This is totally fine." Late Wednesday, finance author Ben Carlson wrote: Bitcoin has achieved something I've always wanted to see in the stock mkt - a reverse 1987 (20% gain in a single day)
Security

NiceHash Hacked, $62 Million of Bitcoin May Be Stolen (reddit.com) 79

New submitter Chir breaks the news to us that the NiceHash crypto-mining marketplace has been hacked. The crypto mining pool broke the news on Reddit, where users suggest that as many as 4,736.42 BTC -- an amount worth more than $62 million at current prices -- has been stolen. The NiceHash team is urging users to change their online passwords as a result of the breach and theft.

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