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Simpsons Bitcoin: Krusty the Clown Goes Broke on Bitcoin
Even the popular TV show The Simpsons has Bitcoin fever.
In tonight’s episode, Krusty the Clown told Lisa how he went broke by having “bad luck at the ponies and worse luck in the Bitcoin market.”
Here’s the clip
Bitcoin Spoilage: 2 Million Bitcoin Likely Lost on Old Hard Drives
Up to 30% of the Bitcoin Economy May Be Unrecoverable
Early mining rewards may be lost forever.
For the first few years of Bitcoin, 2009-2010, mining was a relatively simple computational task. Miners could use idle CPU cycles and generate Bitcoin. The value of the digital currency was low, less than $0.05, and mining was a hobby for computer geeks.
Back then, the reward for mining a block was 50 Bitcoin. Every 2 years the mining reward halves; today it is 25 Bitcoin.
Since the blockchain, or distributed ledger of Bitcoin transactions, is public, one can determine the exact balance of every address. However it’s important to note that because an individual can have many Bitcoin addresses and there is no personally identifiable information, it is not possible to determine how much Bitcoin any single owner has.
But here’s the revealing data, first published by Reddit user rutkdn: there are 38,399 addresses with exactly 50 BTC.
The logical conclusion is that each of these was an address setup by a miner in the first 2 years of the digital currency. The reward was paid into that address and no currency was ever added to it.
When you sum it up, there are 1.9 million Bitcoin in these addresses, or about $2 billion of value ($1.4 billion after last night’s sell off). And it’s highly likely that this money is unrecoverable. That’s 16% of the total number of Bitcoin available today.
In the early days, all Bitcoin were stored on personal hard drives and mining was performed using desktop software. Again, 50 BTC at the time was worth very little, maybe up to $1 or $2. So why would any miner go through the trouble of backing up their Bitcoin wallets when they could easily mine more the next day?
Many did not, and when those hard drives crashed or computers were thrown away, a lot of Bitcoin went to spoilage.
Related: You May Have a Fortune on Your Hard Drive: Recovering Lost Bitcoin
Here are some testimonials from Reddit by miners who lost Bitcoin this way.
One miner wrote:
Mine went back to Sony when hdd failed under warranty. Never bothered to save them – clicking and adding that weird path to the backup of my documents didn’t seem worth it. Back then even if I wanted to sell or buy, I’d have to navigate IRC or do cash-in-mail. They were practically worthless, except for the educational value.
Another miner added:
When I first heard about bitcoin, right at the end of 2009- I was mining ~400-700 a day for a week or two. plain old AMD tower
I never actually spent any bitcoin in exchange for products at the time nor managed to exchange them – All deleted years ago,hard drive gone, kaput, send to trash and god knows where right now.
it’s so easy in retrospect to say you would of just mined for a few days and held those coins for 4 years and be rich. You’d have to have some crazy self control and strange level of foresight to hold onto them. once you got wallet balance them what would you do with it? There was nothing you could buy with them, no exchanges just a few guys on IRC.
there was no economy, it wasn’t seen as a get rich scheme nor an investment. it was just a test of niche beta software with a tiny community of hackers and libertarians.
So, 16% of the total Bitcoin economy is stored in these early miner addresses. What about other losses? Well, it’s reasonable to assume that early Bitcoin owners who accumulated Bitcoin via trade may also have been susceptible to loss due to hard drive failure or file corruption. Maybe even 30% of the today’s Bitcoin economy will never be recovered.
Will increased scarcity make your Bitcoin more valuable?
CC image by Images_of_Money
Bitcoin Having a Huge Sell Off, Here’s Why
Today was a tough day for Bitcoin. Here’s what happened.
The People’s Bank of China issued a notice restricting banks from handling Bitcoin. Baidu also stopped accepting Bitcoin.
There was a big sell-off that made the price fall from $1100 to $650 in an hour or two. Some people sold in a panic, accelerating the drop.
Others bought on the way down. Seems to have bottomed out in the low $600s and holding but we’ll see.
Many investors predict Bitcoin will climb back to $2000 by year end/ early next year, maybe more.
Bitcoin Black Friday Declared a Massive Success, And An Infographic
Mainstream Press, $1M for Charity, and Many Happy Bitcoin Customers
Last week was the first ever Bitcoin Black Friday, featuring over 500 merchants selling discounted goods — both digital and physical — for Bitcoin. In short, it was a massive success.
“Together, we helped make Bitcoin a household word for millions of people,” said the organizers of the event. The Washington Post reported that Bitcoin Black Friday was “the most popular day in the history of Bitcoin commerce.”
The event also provided exposure for Bitcoin merchants and charities in mainstream press. Celebrities got involved in promoting the event, like Ashton Kutcher.
Bitcoin Black Friday https://t.co/tVGMevHAzi
— ashton kutcher (@aplusk) November 28, 2013
Jon Holmquist, founder of Bitcoin Black Friday, put together an infographic with stats from the day, also at the bottom of this article.
Over 1,000 Bitcoin were raised for Charity — that’s over $1 million! And the kicker is that charities received $50,000 more than they would have if those donations had been provided via credit cards, because of fees saved with Bitcoin.
What’s Next?
Well, you can buy the official Bitcoin Black Friday T-Shirt.
You can follow the organizers on Twitter and Facebook to get updates on their upcoming promotions and causes.
And sign up to the On Bitcoin Newsletter to learn about more events like this one and keep up with the latest news.
Here’s that Bitcoin Black Friday Infographic.
China Tells Banks They Cannot Operate in Bitcoin; Price Falls Sharply
The People’s Bank of China has issued a notice restricting banks from handling Bitcoin.
“The Notice clarifies the status of Bitcoin,” read the statement. “Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.”
The notice further clarified that banks should not buy or sell Bitcoin, and any organization that operates in Bitcoin should pay special attention to Know Your Customer (KYC) requirements and other regulation that targets money laundering.
In the notice, Bitcoin was called a “virtual currency.” In 2009, the Chinese government first defined this term when it outlawed “gold farming,” the practice of selling currency from the popular game World of Warcraft for real money.
The implications of this notice are as follows:
- Bitcoin trading platforms are allowed to operate, as long as they comply with applicable laws
- Consumers can buy and sell Bitcoin
- Banks are not allowed to handle, buy, or sell Bitcoin. Therefore, financial institutions will not be able to purchase large volumes of the currency.
- This may ultimately slow down the trading volume growth we have seen in China if large financial institutions are prohibited, but should not cause a catastrophic effect to the currency’s value.
In response, the price of Bitcoin on the exchange BTCChina, and across the world, fell sharply then stabilized.
BTCChina 2-day price/volume chart from BitcoinCharts.com
Below is the full notice translated by Reddit user felix123.
In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, the People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission jointly issued “The People’s Bank of China, Ministry of Industry and Information Technology, China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission Notice on preventing Bitcoin risk” (2013 no.289, “Notice” hereinafter)
The Notice clarifies the status of Bitcoin. Bitcoin is not issued by a monetary authority, it does not have the status of legal tender and obliged acceptance status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market. But, the general public have the freedom to participate in Bitcoin trading as a commodity trading on the internet on the condition they carry their own risk.
The Notice requires, at this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing or settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
The Notice requires, that Bitcoin websites that act as the main trading platform, should follow the Telecommunications Act and the Regulation on Internet Information Service, and register according to law. Also, because Bitcoin has a higher risk of money laundering and being used by criminals, the Notice requires the relevant organizations to follow the requirements of the Anti-Money Laundering Act and fully comply with the legally required anti-money laundering procedures like KYC and suspicious transaction reporting, to prevent Bitocin related money laundering risks.
To prevent virtual goods like Bitcoin using the name of “virtual currency” to over-promote, damaging the public interest and the RMB’s position as legal tender, the Notice requires financial organizations and payment organizations in their daily tasks to use the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
In the future, the People’s Bank will do its duty and continue to closely monitor the Bitcoin trend and related risks.
Below is the Notice
People’s Bank of China
Ministry of Industry and Information Technology
China Banking Regulatory Commission
China Securities Regulatory Commission
China Insurance Regulatory CommissionNotice on preventing Bitcoin risk
Recently, a so-called Bitcoin calculated using certain computer programs gained widespread worldwide attention, there are also organizations and persons in China taking this opportunity to promote Bitcoin and related products. In order to protect the public’s property rights, to protect RMB’s official currency status, to prevent money laundering risk and to protect financial stability, according to the People’s Bank Act, the Anti-Money Laundering Act, the Commercial Bank Act, Telecommunications Regulations etc, the following notice is made:
1 Correct knowledge of Bitcoin
Bitcoin has four main characteristics: no central issuer, limited quantity, no geographical limits and anonymity. Although it is called currency, it is not issued by a monetary authority, it does not have the status of legal tender and obliged payment status of currency, it is not currency in the true sense. Bitcoin is a specified virtual commodity, it does not have equal legal status with currency, and it cannot and should not be circulated as currency on the market.
2 Financial institutions and payment institutions must not start Bitcoin related business
At this stage, all financial institutions and payment institutions must not use Bitcoin to set price for product or services, not buy or sell Bitcoins, not act as a market maker for Bitcoins, not underwrite insurance related to Bitcoin or cover Bitcoin in insurance, not directly or indirectly provide other Bitcoin related services, including registering, trading, clearing, settlement; not accept Bitcoin or use Bitcoin as payment tool; not start a Bitcoin and RMB or foreign currency exchange; not start a Bitcoin saving, trust or mortgage service; not issue Bitcoin related financial services; not use Bitcoin as the investment in trusts or funds.
3 Strengthening regulation of Bitcoin websites
According to the Telecommunications Act and the Regulation on Internet Information Service, websites that provide Bitcoin services like registration, trading etc should register with the telecommunications regulation authorities.
The telecommunications regulation authorities, following the determinations and punishment opinions of the relevant management authorities, should close down illegal Bitcoin sites according to law.
4 Prevent possible Bitcoin money laundering risk
Branches of the People’s Bank should closely monitor the trends and activities Bitcoin and other similar virtual commodities with the characteristics of anonymity and easy cross-border access, seriously consider its money laundering risk, research and implement targeted preventative measures. The branches should include lawfully established organizations that provide Bitcoin registration or exchange services in its area into its anti-money laundering monitoring, and supervise them to strengthen their anti-money laundering monitoring.
Bitcoin websites should earnestly carry out their anti-money laundering duty, confirm the identities of their users, have them register using their real names, and register their name and ID card number. If financial institutions, payment institutions or Bitcoin websites discover suspicious transactions involving Bitcoin or other virtual commodities, they should immediately report it to the China Anti-Money Laundering Monitoring and Analysis Center, and cooperate with the People’s Bank’s investigation; if they find evidence of fraud, gambling, money laundering using Bitcoins, they should report it to the police.
5 Strengthening public education on money knowledge and investment risk
Departments, financial organizations and payment organizations should in their daily tasks teach the public the correct concept of currency, to emphasize on public education about currency, and to add to public financial knowledge education the contents of correct knowledge of currency, correct views of virtual goods and virtual currency, rational investment, control of investment risk and defending one’s financial safety, in order the public have correct views on currency and investing.
Financial monitoring authorities can set implementation details according to this notice
Would the People’s Bank branches please distribute this Notice to financial organizations and payment organizations in their area. Any new situations or questions arising from this notice please report promptly to the People’s Bank.
