Category Archives: Bitcoin Week
Wow, what a week. We had some of the biggest stories in the history of Bitcoin. Let’s start at the top.
Satoshi Nakamoto is found! Or so Newsweek would have us believe. The aging media publication went “all in” on this story, bringing their physical magazine publication back from the dead for an exclusive. Journalist Leah McGrath Goodman spent two months searching for Satoshi and found a Japanese man in California named … Dorian Satoshi Nakamoto.
There was an uproar in response to Goodman’s article because the reporter shared personal details about Dorian Nakamoto, including photos of his residence and car, and names of his family members. Further, many asserted the evidence used in the article was circumstantial.
Gavin Andresen, chief scientist at the Bitcoin foundation, penned an open letter to Goodman, saying he was “disappointed [Newsweek] chose to publish enough personal information that people can easily find Dorian and his family.”
It was a feeding frenzy by the mainstream media. Dorian was taken out to lunch the Associated Press, and a band of reporters chased the duo through the streets of LA hoping for a quote or photograph.
Later that day, as if things could not get any more exciting in the Bitcoin world, the REAL Satoshi Nakamoto purported came out of hiding to clear Dorian’s name. He replied to his original 2008 thread where he had published the Bitcoin whitepaper to say, simply: “I am not Dorian Nakamoto.”
While the world was still trying to process the discovery, or false discovery, of Satoshi Nakamoto, large amounts of Bitcoin began moving on the Blockchain. 200,000 Bitcoin, or more than $120 million, was moved in a single block, then moved again. Some online sleuths connected these funds to MtGox causing a variety of allegations and suspicions.
Outside of the Satoshi news, there were other exciting developments in Bitcoin this past week.
Senator Joe Manchin (D-W. Va) called on regulators to ban Bitcoin, saying it was “disruptive to our economy.” This legislator is an exception in what has generally been a spirit of understanding and discussion among federal and state authorities.
In response, Congressman Jared Polis from Colorado wrote a tongue-and-cheek letter calling on the government to ban the U.S. Dollar, citing greater levels of economic disruption and illicit activity using dollars.
Jimmy Wales, founder of Wikipedia, created a personal Bitcoin wallet and was inundated with gifts that will find their way to the Wikimedia foundation. He discussed the topic on Reddit.
If you wanted to buy a cup of coffee with bitcoins today, the point-of-sale register would quote a price of 0.0027760 BTC. For early adopters of Bitcoin, that’s easy enough to understand. But what about normal consumers? A new proposal, called BitNote, is looking to solve this through a new currency symbol and a mathematical formula to make that cup of coffee seem more affordable.
Popular iPhone app Fancy removed Bitcoin payments due to Apple’s request.
And finally, the “Snowden Phone,” an phone designed for ultra privacy was launched. FreedomPop, makers of the phone, allow you to pay for it in Bitcoin.
Here are the top stories from this past week in Bitcoin, and we have something new! Watch @BitcoinLeah deliver the Bitcoin Week update in the video below.
It’s been a trying week for the Bitcoin community.
As of February 24th, MtGox, The Japan-based Bitcoin exchange that once served 80% of the liquidity for Bitcoin, has disabled trading, taken its website offline, and rumors abound of insolvency.
A group of up and coming Bitcoin companies has issued a joint statement regarding MtGox. The memo was signed by Coinbase, Blockchain.info, Circle, Kraken, Bitstamp, and BTC China.
“This tragic violation of the trust of users of Mt.Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants.”
MtGox CEO has resigned from the Bitcoin Foundation board.
Erik Voorhees, a respected Bitcoin entrepreneur, who created SatoshiDice and now runs Coinapult, shared his views about the collapse of MtGox in an impassioned letter to the Bitcoin community.
“We are building a new financial order, and those of us building it, investing in it, and growing it, will pay the price of bringing it to the world. This is the harsh truth. We are building the channels, the bridges, and the towers of tomorrow’s finance, and we put ourselves at risk in doing so.”
Will O’Brien, CEO of BitGo, published a 2,000-word essay this week entitled “With MtGox Effectively Dead, Bitcoin Officially Enters Its Third Stage of Evolution” in which he described how “we are seeing the beginning of a new, more secure and more robust, future for digital currency” where the next generation of exchanges and companies will be built by veteran entrepreneurs and designed to scale.
In more positive Bitcoin news, eBay CEO hints that PayPal is building a digital wallet that will support Bitcoin and other digital currencies.
The Bitcoin Foundation announced an election for a board seat following Charlie Shrem’s resignation.
The Winklevoss twins launched the Winkdex. The website states that the Winkdex is “a pioneering effort in the analysis and presentation of global bitcoin pricing and currently uses data from the most active qualified U.S. dollar denominated bitcoin exchanges.”
Finally, Ben Lawsky, Superintendent of Financial Services for the State of New York, did an AMA (Ask Me Anything) on Reddit on how the New York State Department of Financial Services (NYDFS) is doing on oversight rules for virtual currency firms. The discussion focused primarily on how to prevent money laundering while allowing room for innovation within the USA.
Lawksy stated, “My hope is that if we can get appropriate guardrails in place to prevent money laundering, we can take a deep breath and really focus on trying to ensure that virtual currency firms flourish and continue to develop and innovate. I’m very excited about what the future could hold for this very powerful technology.”
Last week was an exciting week for Bitcoin. Here are the top stories.
Mt.Gox, the Japan-based once-leading exchange, has fallen from grace. After halting Bitcoin withdrawals on February 7, the downward spiral continued when it made an announcement that its freeze was due to a critical bug in Bitcoin called “transaction malleability”. This was quickly refuted by Bitcoin core developers and community members alike as spreading misinformation. However, the announcement did have a negative effect on the global price of Bitcoin and sent the price specifically on MtGox tumbling below Bitstamp for the first time.
Read our full report on the transaction malleability claim and counter-evidence.
In more positive news, the Bank of Thailand changed its position on Bitcoin. Back in July, Thailand-based Bitcoin Co. Ltd. issued a release asserting that senior members of the Bank of Thailand advised the company that various Bitcoin trading activities are illegal in Thailand. In a letter (external link) issued by the national bank more recently, it was clarified that exchanges may operate in Thailand as long as they are converting Bitcoin only to and from the baht, the national currency. Exchange of foreign currencies is still prohibited.
Silk Road 2, the rebirth of the infamous anonymous drug marketplace, was hacked this past week with over 4,000 bitcoins stolen. You can read the full text of the announcement by the Silk Road 2 operator reposted on DeepDotWeb (external site). In the announcement, the operator writes:
I am now fully convinced that no hosted escrow service is safe. If I cannot trust myself to keep a hosted escrow solution safe, I cannot trust anyone. Multi-signature transactions are the only way this community will be protected long-term. I am aggressively tasking our devs on building out multi-sig support for commonly-used bitcoin clients. Expect a generous bounty if you have the skill to implement this.
And finally, Italy passed a new decree that banks must withhold 20% on inbound wire transfers as a prevention against money laundering and tax evasion. The taxpayer must take the initiative to prove that the money is not compensation. Read more at Il Sole (external link). Is this an opportunity for Bitcoin?
Here is a roundup of the top Bitcoin news from last week.
Our contributor @BitcoinLeah published two extensive pieces of analysis. The first was a recap of the hearings that took place last week in New York. Executives from Coinbase, Circle and Overstock provided testimony in hopes to educate and enlighten regulators about the opportunities for Bitcoin.
A second article by Bitcoin Leah took a look at the Bitcoin regulatory landscape across 5 of the most influential countries: the United States and the BRICs (Brazil, Russia, India, and China).
In other regulatory analysis, we looked at a recent publication by Adam Ettinger, a veteran lawyer and managing partner at SF-based Strategic Counsel Corp. Ettinger discussed four indicators that suggest we are past the tipping point with Bitcoin. The key question is whether regulators will be Bitcoin-friendly. Ettinger said it’s a land grab for the first state to open its arms to Bitcoin entrepreneurs.
Popular financial dashboard Mint added Coinbase integration, allowing its customers to watch their Coinbase balance next to their credit card statements and car loans. Mint is not the first company to provide this monitoring capability. Venture-backed Bitcoin services company BitGo allows users to monitor all of their Bitcoin balances in one dashboard by entering public Bitcoin addresses.
Here is a roundup of the top Bitcoin news from last week.
BitGo CEO Will O’Brien and Bitcoin Foundation General Counsel Patrick Murck appeared on TV in an interview with KING5 tech anchor Renay San Miguel. O’Brien shares his vision of building a “Charles Schwab for Bitcoin” and Murck comments on what it is needed to build stability in the Bitcoin ecosystem. Watch the video footage to learn more.
In news that shocked the Bitcoin world, Bitcoin entrepreneur Charlie Shrem was arrested for conspiracy to commit money laundering. Shrem was vice chairman of the Bitcoin Foundation and CEO of BitInstant, a Bitcoin exchange funded by the Winklevoss twins. Shrem has since stepped down from his post at the Bitcoin Foundation.
In merchant news, Overstock.com has reportedly processed over $1 million in Bitcoin since launching Bitcoin payment processing earlier this month. Overstock.com processed $124,000 on its first day.
Another major online retailer, TigerDirect, also launched Bitcoin payments this past week and processed $250,000 in its first day.
This week, New York State’s top financial regulator, Benjamin M. Lawsky, is hosting a public hearing to discuss the implications and potential of Bitcoin with an invited group of Bitcoin entrepreneurs and investors. In November, the public hearings held in Washington D.C. saw positive sentiment from a Senate Committee. We will see how this hearing plays out.