[ExI] Bitcoin

Tue Nov 19 19:14:50 UTC 2013

For anyone interested in trading Bitcoin, here is a nice site that shows
the differences in value between the various currency exchanges:

http://www.coined.com/

BTC hit $900 on MTGOX yesterday, fell hard afterwards but that's normal as
a lot of users sold their BTCs. Will we see $1000 soon? It passed that in
China yesterday.

- Sondre

On Tue, Nov 19, 2013 at 7:38 PM, John Clark <johnkclark at gmail.com> wrote:

> The following article was on the front page of the business section of
> today's New York Times:
>
> =============
>
> The virtual currency bitcoin took a big step toward the mainstream on
> Monday as federal authorities signaled their willingness to accept it as a
> legitimate payment alternative.
>
> A number of federal officials told a Senate hearing that such financial
> networks offered real benefits for the financial system even as they
> acknowledged that new forms of digital money had provided avenues for money
> laundering and illegal activity.
>
> “There are plenty of opportunities for digital currencies to operate
> within existing laws and regulations,” said Edward Lowery, a special agent
> with the Secret Service, which is tasked with protecting the integrity of
> the dollar.
>
> Signs that the government would not stand in the way of bitcoin’s
> development, even as it has been cracking down on criminal networks that
> use the digital money, stoked a strong rally in the price of the
> crypto-currency.
>
> By Monday evening, the value of a bitcoin unit soared past $700 on some
> exchanges. The total outstanding pool of bitcoin — which is created by a
> network of users who solve complex mathematical problems — is now worth
> more than $7 billion.
>
> The Senate hearing Monday afternoon was the clearest indication yet of the
> government’s desire to grapple with the consequences of this growth, and
> the recognition that bitcoin and other similar networks could become more
> lasting and significant parts of the financial landscape.
>
> “The decision to bring virtual currency within the scope of our regulatory
> framework should be viewed by those who respect and obey the basic rule of
> law as a positive development for this sector,” said Jennifer Shasky
> Calvery, the director of the Treasury Department’s Financial Crimes
> Enforcement Network. “It recognizes the innovation virtual currencies
> provide, and the benefits they might offer.”
>
> Ms. Shasky Calvery and the other officials at the hearing did say that
> basic questions still had to be answered about virtual currencies,
> including whether they can actually be considered currencies or whether
> they are more properly categorized as commodities or securities. The
> distinction will determine which agencies regulate the networks and how
> they are treated under tax law.
>
> Ms. Shasky Calvery said that the Internal Revenue Service was “actively
> working” on its own rules for bitcoin.
>
> The hearing followed other less visible steps taken by regulators and
> lawmakers to bring digital money into the mainstream.
>
> New York State’s top financial regulator, Benjamin M. Lawsky, said last
> week that he would hold a hearing to consider the creation of a BitLicense
> to provide more oversight for transactions. Earlier, the Federal Election
> Commissionput out an advisory indicating that bitcoin could be legally
> accepted as political donations.
>
> The general counsel of the Bitcoin Foundation, a nonprofit advocating the
> currency, said in his testimony on Monday that he was receiving a much more
> friendly response from both government and the financial industry.
>
> “We have recently perceived a marked improvement in the tone and tenor
> taken by both state officials and bank executives,” the general counsel,
> Patrick Murck, said.
>
> Bitcoin has experienced a remarkable ascent since it was created in 2009
> by an anonymous programmer or collective known as Satoshi Nakamoto. The
> money, which is not tied to any national currency, has been popular with
> technophiles who are skeptical of the world’s central banks. Only a finite
> amount of bitcoin will ever be created — 21 million units. Users have bid
> up the price on Internet exchanges, betting that the currency will be more
> widely used in the future.
>
> There are significant questions about the wisdom of the digital money as
> an investment, given that bitcoin has no intrinsic value and has proved to
> be vulnerable to hackers. Many money managers have recommended that
> unsophisticated investors stay away.
>
> Recently, though, bitcoin has been catching fire around the world, with
> exchanges in China particularly active. A growing number of prominent
> American investors have also bought stakes, including Michael Novogratz, a
> principal at the private equityand hedge fund giantFortress Investment
> Group, as well as the Winklevoss twins, Cameron and Tyler.
>
> The increasingly widespread ownership of bitcoin has shifted attention
> away from the criminal enterprises that have used digital money, but it was
> a focus at the Senate hearing.
>
> Last month, the online marketplace Silk Road, where bitcoin was the
> primary form of payment, was shut down and its founder arrested after
> authorities accused it of being used to buy and sell drugs, weapons and
> pornography. The chairman of the Senate committee, Thomas R. Carper,
> Democrat of Delaware, said that a few days after the arrest, a similar site
> sprang up.
>
> It can be harder to track criminals who use bitcoin, law enforcement
> officials said at the hearing, because they operate across international
> borders and often do not use established financial institutions that report
> transactions.
>
> But Mythili Raman, an assistant attorney general at the Justice
> Department, also said that because every bitcoin transaction was recorded
> on a public ledger, it was possible for investigators to trace the movement
> of money between accounts.
>
> “It is not in fact anonymous. It is not immune from investigation,” Ms.
> Raman said.
>
> All the officials at the hearing said that crime had been an issue during
> the early days of credit cards and online payment systems like PayPal, and
> should not be a reason to limit innovation.
>
> “It is our duty as law enforcement to stay vigilant while recognizing that
> there are many legitimate users of those services,” Ms. Raman said.
>
> The bitcoin supporters who testified at the hearing said bitcoin could
> bring major changes to the financial system by cutting out the middle men
> needed to move money around the world.
>
> “I am here to testify because I believe that global digital currency
> represents one of the most important technical and economic innovations of
> our time,” said Jeremy Allaire, the chief executive of Circle Internet
> Financial, which is seeking to promote more widespread use of the currency.
>
> Given bitcoin’s appeal to skeptics of government, many aficionados have
> been wary of involvement by Washington. But advocates at the hearing said
> that the increasing cooperation with regulators could lay the groundwork
> for further growth.
>
> “As this technology moves from early adopters into mainstream acceptance,
> it is critical in my view that federal and state governments establish
> policies surrounding digital currency,” Mr. Allaire said.
> A version of this article appears in print on 11/19/2013, on page B1 of
> the NewYork edition with the headline: Regulators See Value in Bitcoin, And
> Investors Hasten to Agree .
>
>
>
>
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-- 
Sondre Bjellås
http://www.sondreb.com/
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