With MtGox effectively dead, Bitcoin can now enter the third stage of evolution, explains BitGo CEO Will O'Brien in an extensive essay. More »
Erik Voorhees, a respected Bitcoin entrepreneur who created SatoshiDice and now runs Coinapult, shares his views about MtGox and the future of Bitcoin. More »
Hollywood could learn a lot from Silk Road 2 about heightening stakes and creating suspense in this epic whodunnit thriller where 4000 bitcoins were stolen! More »
In this extensive video, Bitcoin Leah interviews Brock Pierce, Alan Meckler, Sam Cole, and companies including BitGo, GoCoin, Lamassu and more. More »
Video: Bitcoin Primer – Bitcoin Economy, Mining, Exchanges, and More
Bitcoin Primer Video
Below is a short Bitcoin primer video. The video provides an overview of Bitcoin, the decentralized digital currency taking the world by storm.
The film was directed, designed and animated by Duncan Elms, written and voiced by Marc Fennell - a personal project done between other jobs. More info at Vimeo.
The narration and illustration does a great job of explaining Bitcoin, discussing:
- The difference between Bitcoin and fiat currencies
- What Bitcoin mining is and how many Bitcoins have been mined
- How Bitcoin is a self-stabilizing economy
- Bitcoin exchanges including Mt. Gox
- The Silk Road
- Who accepts Bitcoin as cash
- MintChip
The video is out of date in terms of the price of Bitcoin because of the massive growth and subsequent bubble bursting, but otherwise an excellent Bitcoin primer.
Winklevii Bitcoin: Twins Secretly Own 1% of the Bitcoin Economy
Winklevii Bitcoin: They Own A Huge Stake
Facebook’s arch enemies Cameron and Tyler Winklevoss have revealed a big financial secret: they hold about 1% of the Bitcoin economy. That’s a big Winklevii Bitcoin position.
Fresh with their cash from the Facebook settlement (worth well over $200 million), the Winklevoss twins have bought up about $11 million worth of Bitcoins. That’s about 1% of all available Bitcoins.
In an interview with the New York Times, the Winklevii provided some insights on their investment:
“People say it’s a Ponzi scheme, it’s a bubble. People really don’t want to take it seriously. At some point that narrative will shift to ‘virtual currencies are here to stay.’ We’re in the early days.”
The Winklevosses say this week’s tumult is just growing pains for a digital currency that they believe will become a sort of gold for the technorati.
“We have elected to put our money and faith in a mathematical framework that is free of politics and human error,” Tyler Winklevoss said.
The Winklevosses have paid in bitcoin for the services of a Ukrainian computer programmer who has worked on their Web site.
The brothers began dabbling in Bitcoin last summer when the dollar value of a single coin was still in the single digits. To keep their holdings secure from hackers, they have taken the complex codes that represent their holdings off networked computers and saved them on small flash drives, putting the drives, in turn, in safe deposit boxes at banks in three different cities.
It’s hard to verify how the Winklevoss holdings compare with other bitcoin players, given the anonymity of accounts, and the twins say they believe that some early users of the system probably have holdings that are at least as large.
Did the Bitcoin Bubble Burst Already?
Bitcoin Bubble May Be Over
Wow, the Bitcoin bubble blew up fast.
Bitcoins were trading for as high as $266 earlier this week and as low as $77 today.
Trading activity overwhelmed exchanges like Mt. Gox and trading was halted twice, as shown in the chart below from CNN Money.
“The rather astonishing amount of new accounts opened in the last few days…made a huge impact on the overall system that started to lag,” said Mt. Gox. “As expected in such situations, people started to panic, started to sell Bitcoin in mass…resulting in an increase of trade that ultimately froze the trade engine.”
This comes on the heels of Bitcoin theft and DDoS attacks on the exchange.
Bubble photo by Visual Artist Frank Bonilla used under Creative Commons license.
Bitcoin Theft: Mt. Gox Attack Pillages Investor’s Bitcoin Account
Will Bitcoin theft call into question trust and confidence in the system?
A Mt. Gox user bitbully was surprised to see his account suddenly pillaged, later learning that the Java chat client he had enabled was actually an exploit to steal Bitcoins. He reported his experience on the Bitcoin Forum.
There are mixed opinions on the web about who is to blame for this.
On Bitcoin Forum, there’s an empathetic view that suggests Mt. Gox should reimburse the loss.
I expect Mt. Gox to come up with an analysis and refund him and any other affected clients.
bitbully – I advise emailing a link to this thread to Mt. Gox support.
In the tech communities, they blame the user. Here’s one point of view from Hacker News.
Since I don’t have an mtgox account, and I have a fair degree of confidence that the code posted can’t possibly escape the Java sandbox, I decided to live dangerously and try loading the page.
Here’s the warning screen that comes up when you load it: http://i.imgur.com/sXDoFLt.png Note the self-signed certificate from “North Sumatra”.
Gotta say, I have no sympathy for someone who clicks through that warning screen and then complains that their credentials got stolen.
On Reddit, some users give advice about browser configurations.
1) Disable Java, it’s crap. 2) Enable 2-factor authentification.
Don’t use IE.
Here’s the challenge with this type of theft. It’s anonymous and irreversible by nature of the Bitcoin system. bitbully’s funds are gone.
But a bigger issue is trust and confidence. If an early adopter techie can be exploited, what about a regular retail investor? Exchanges like Mt. Gox will need to prove that they are safe for trading if they hope to grow.
Bitcoin Stories: The 300 BTC Porsche, First Supercar Transaction
Bitcoin Stories: The 300 BTC Porsche
Here is a new entry in our Bitcoin Stories series. It starts off with a man who wants to sell his car, a 2007 Porsche Cayman S with only 8200 miles. He runs car ad that reads like most car ads, with details about the mileage and the options. But the catch is that he is only willing to sell the car for Bitcoins.
About 2 months later, he found a buyer for 300 BTC and completed the transaction on Bitcoin payment network BitPay.
The seller posted his story on Reddit, saying that this is the first supercar-Bitcoin transaction!
At Bitcoin market prices earlier this week, this makes the sale worth over $50,000 USD. Of course, if the buyer had been purchased or mined Bitcoins a few years ago, he could have just bought a Porsche for a couple of dollars.
