Wednesday, April 10, 2013

Bitcoin Surpasses $200 Mark, Continuing 'Epic' Rise


Bitcoin, the digital currency that trades outside the control of central banks and international borders, reached new heights Tuesday, surpassing the $200 mark for the first time. That level comes just five days after bitcoin approached $150, a development that Mt.Gox, the largest exchange service for the currency, deemed to be "epic."
Bitcoin's rise has been sharp. It was only two months ago that exchange rates put a single bitcoin's value at around $20.
Because the digital currency's new gains have coincided with deep economic uncertainty in Cyprus, Spain, and elsewhere, some have suggested that a "bubble" was being created. As fears over inflation and even steep withdrawal fees rose, experts said, so did bitcoin. And if those fears waned, so would the currency's value.
But Jon Matonis of the Bitcoin Foundation tells Der Spiegel that he doesn't believe the connection is as direct as people think.
"Most transactions are still coming from affluent regions, like the United States and Northern Europe," he says. "What we are seeing is not a Cyprus bubble."
At Mt.Gox, which says it conducts more than 420,000 bitcoin trades each month, the digital currency didn't just plateau at the $200 mark. It plowed past it Tuesday, hitting a high of $240. As Jason Dorrier at Singularity Hub points out, that volatility is also linked to the currency's small size.
Bitcoin's popularity has also been linked to activities some governments may disapprove of, or seek to tax. NPR reported on its role in online gambling earlier this year. And a New York Times story this week also noted bitcoin's acceptance by Silk Road, a website often "used as a market for controlled substances and narcotics."
Bitcoin's growth has led to changes at Mt.Gox, which announced last month that it would limit the maximum amount of monthly withdrawals to between $50,000 and $500,000, depending on customers' "verified" or "trusted" status.
Whatever the cause, bitcoin's gains have translated into new wealth for people who bought into it since it was created in 2009. The currency is released at a very steady rate — "roughly every 10 minutes 25 new bitcoins come into circulation," as NPR's Steve Henn reported last week.
Its adherents say that regular pace, and the fact that there is only a finite number of bitcoins, make it an attractive alternative to government-backed currencies. Just over half of the 21 million bitcoins in existence have so far been released.
And the currency is gaining wide attention, with TechCrunch explaining how to "mine" bitcoins, and Forbes offering four reasons bitcoin is worth studying. Back in 2011, NPR's Planet Money team acquired some bitcoins, in an experiment that ended when robbers looted the virtual bank that had been holding the currency.
One "miner," Chris Koss, has his entire life savings in bitcoins — something he recently told Steve Henn has brought big gains, as well as worries over how long the boom will continue.
Its steep rise has made some folks wistful for the bitcoins they frittered away on, well, fritters — some cafes and bars in the U.S. and Europe accept bitcoins. And others have felt new pangs of regret for bitcoins they lost when a hard-drive suffered a catastrophic failure.
That's the case for Stefan Thomas, a programmer who tells Der Spiegel, "I once lost 7,000 bitcoins, because I had forgotten to make a backup copy."
If Thomas had held onto those bitcoins, they would be worth around $1.4 million today.

Saturday, April 6, 2013

How Bitcoin Will End the Nation State - Jeffrey Tucker

Jeffrey Tucker discussing how Bitcoin Will End the Nation State and currenct fiat monetary system.

What is bitcoin, and why is it suddenly the hottest thing in global currency markets?
 

Thursday, April 4, 2013

Bitcoin Plunges By Nearly $30 As Largest Market Suffers Outage


The value of digital currency Bitcoin fell from above $145 to below $117 Wednesday as Mt. Gox, the largest market for trading the digital currency, suffered an outage for approximately an hour.

At the time of writing mid-afternoon Wednesday, the value seems to have leveled out at about $125, a $20 drop for the day.

"Due to high volume trading at the moment, there is a lag in trading and order cancellation," reads a statement from Mt. Gox.

It's not believed that Mt. Gox was the victim of hackers, a scenario feared by some Bitcoin naysayers. More likely, it collapsed under the strain of heavy traffic sparked by a sudden spike in interest in Bitcoin. Mt. Gox's problems, in turn, may have caused Bitcoin's sudden drop in value.

Why has Bitcoin become so popular? One possible explanation is that exploding interest in Bitcoin over the past several days is being driven by economic uncertainty in Europe. Fearful of an earlier proposed European Union plan to partially fund a Cypriot bailout by imposing new taxes on Cypriots' bank deposits, goes the theory, some Cypriots (and Spaniards, for similar reasons) flocked to Bitcoin to attempt an escape from the clutches of potential taxes.

Major media outlets, including The New Yorker and Businessweek, have recently run stories dealing in one way or another with the Europe theory. The media exposure given to Bitcoin over the past few days has likely exacerbated any potential bailout-related interest in Bitcoin, causing even more demand for the currency.

"The value of bitcoins, it turns out, is highly sensitive to media coverage," wrote Reuters' influential financial journalist Felix Salmon in a Wednesday morning blog post wherein he argued Bitcoins are a financial bubble and heightened interest will only cause the burst to come sooner.

" . . .in July 2010, the influential technology site Slashdot posted a short item about bitcoin which sent the price soaring tenfold — from less than a cent to about 7 cents per bitcoin — also in a few days. And a single post on Time.com in April was enough to double the price of Bitcoins in a week, from 80 cents to $1.60. Even the article you’re reading now is appearing now because of the current bubble, and will, at the margin, help to continue to inflate it."


Zachary Seward, Senior Editor at business news website Quartz, also argued Wednesday that sudden interest in Bitcoin is "messing with the market."

"More attention brings more demand, which inclines people who already have bitcoins to hold onto them, expecting their value to rise, which reduces the available supply of bitcoins in the market, driving the price higher, increasing attention, pushing up demand, encouraging still more hoarding," wrote Seward.

Even if Mt. Gox's service interruption wasn't the cause of Bitcoin's drop Wednesday, the sudden fall in their value exemplifies the volatility which some commentators argue make it a risky investment. Would you put your wealth in Bitcoin? Why or why not? Share in the comments.


See Mashable Article

Monday, April 1, 2013

Hot Litecoin (LTC) Goes to the Moon in Huge Weekend Price Spike


Litecoin (LTC) went over $1 US today as it enjoyed an incredible long weekend rally up to $1.15 spiking around 40% and going to .001 vs the Cryptocurrency Giant Bitcoin (BTC), which is currently looking to test the $100 mark.

There was a buzz at BTE-E.com chatbox as litecoin (LTC) broke the $1USD mark and continued to move up to $1.15 before settling in the 1.11-1.12. BTC-E.com is the major site to transact in Litecoin so was a front row seat to witness the big upsurge beyond the $1 physiological barrier

Litecoin has proven to be difficult to get exposure to as many frantically asked how they could purchase the little known p2p currency, converting BTC to LTC seems to be the favoured method so first having BTC would seem to be a requirement.

Litecoin looks to be going skywards given its low price in comparison to Bitcoin but with similar attributes there is seemingly not much too stop it, expect maybe sourcing it for yourself.

By Joseph Gale