Virtual currencies, or digital cash, are gaining popularity as a new way to purchase goods or services. They are not regulated or issued by a central bank. The most popular virtual currency is Bitcoin, which soared above $1,000 for the first time on Wednesday.
Things you need to know about Bitcoins:
What is Bitcoin? It is a digital currency that is created and exchanged independently of any government or bank. The currency is generated through a computer program and can be converted into cash after being deposited into virtual wallets. When Bitcoin was launched? In 2008, a programmer known as Satoshi Nakamoto - a name believed to be an alias - posted a paper outlining Bitcoin's design and later in 2009 released software that can be used to exchange Bitcoins using the scheme. That software is now maintained by an open-source community coordinated by developers. How does Bitcoin work? It exists through an open-source software program and its supply is controlled by a computer algorithm. Once you download and run the Bitcoin client software, it connects over the Internet to the decentralized network of all Bitcoin users and also generates a pair of unique, mathematically linked keys, which you'll need to exchange Bitcoins with any other client. One key is private and kept hidden on your computer. The other is public and a version of it dubbed a Bitcoin address is given to other people so they can send you Bitcoins. How Bitcoins are generated? The process of generating Bitcoins is quite complicated and involves solving complex algorithms and sharing the solution with the entire network. The "mining" is very computationally intensive and requires powerful computers. How to transfer Bitcoins: When you perform a transaction, your Bitcoin software performs a mathematical operation to combine the other party's public key and your own private key with the amount of Bitcoins that you want to transfer. The result of that operation is then sent out across the distributed Bitcoin network so the transaction can be verified by Bitcoin software clients not involved in the transfer. How to trade Bitcoins: Exchanges like Mt. Gox provide a place for people to trade Bitcoins for other types of currency. Payments to a merchant who accepts Bitcoins are made from the wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount. Who controls the Bitcoin network: It is controlled by all Bitcoin users around the world. While developers improve the software, they can't force a change in the Bitcoin protocol because the virtual currency can only work correctly only if there is a consensus among all users. Bitcom transactions: At the end of August 2013, the value of all Bitcoins in circulation exceeded $1.5 billion with millions of dollars worth of Bitcoins exchanged daily, according to Bitcom website. (With Agency inputs)
2013年12月1日 星期日
Bitcoin-Litecoin Ratio Returns to Historic Norm, Peercoin Climbs 200%
As bitcoin continues to climb to record highs, reaching as high as $1,141 on Bitstamp, it is joined in growth by a number of alternative digital currencies. The most visible has been litecoin, which has returned to what might be considered a normal trading range relative to bitcoin. Litecoin is not alone in its gains, with others like Peercoin and Namecoin making similar gains.
The rise of litecoin has made numerous headlines over the past week, surprising many with its meteoric gains and crossing of one billion dollars of market capitalization. Yet, the dynamics in which it is actually traded are often overlooked, particularly its relationship to bitcoin. On BTC-e, the leading litecoin exchange by volume, the bitcoin-litecoin currency pair is traded with as much or more volume as litecoin-dollar. It also regularly dictates movement as visible through a series of technical factors.
The rise of litecoin has made numerous headlines over the past week, surprising many with its meteoric gains and crossing of one billion dollars of market capitalization. Yet, the dynamics in which it is actually traded are often overlooked, particularly its relationship to bitcoin. On BTC-e, the leading litecoin exchange by volume, the bitcoin-litecoin currency pair is traded with as much or more volume as litecoin-dollar. It also regularly dictates movement as visible through a series of technical factors.
In Bitcoin’s Orbit: Rival Virtual Currencies Vie for Acceptance
For many people, bitcoin seems like something from the day after tomorrow.
For Lawrence Blankenship, it’s already a thing of the past.
A software engineer from Springfield, Mo., Mr. Blankenship is putting his money on PeerCoin, one of the biggest of the virtual currencies that are being promoted as alternatives to bitcoin.
With mounting interest from prominent investors and growing acceptance from regulators, bitcoin — either the new gold or the next Dutch tulip craze, depending on who is being asked — is at the center of the virtual money universe. Yet there are dozens of digital alternatives, like PeerCoin, Litecoin and anoncoin, whose backers point to advantages they say their currency has over bitcoin.
PeerCoin, according to Mr. Blankenship, is closer than bitcoin to the perfect, communal money. Mr. Blankenship, who is 34, has arranged to accept PeerCoin as the virtual currency of choice at a Star Trek convention he is organizing in his hometown.
“Looking down the road 10 years from now, I definitely see bitcoin being ousted,” he said. “Everyone’s going to start switching to other coins, and hopefully PeerCoin comes out ahead in that.”
In the alternative galaxy of virtual currencies, newly created money can become worth millions of real dollars in a few months. All the PeerCoin in existence, for example, was worth nearly $40 million last week. Programmers and mathematicians release new entrants into the field almost every week. On one popular exchange, Cryptsy, 60 different coins can now be traded.
Almost all of these altcoins, as they are known, have fed on the stratospheric rise of bitcoin. Since the beginning of the month, the value of bitcoin rose to more than $900 at one point, from $200, and it is up 6,000 percent since the beginning of the year.
For Lawrence Blankenship, it’s already a thing of the past.
A software engineer from Springfield, Mo., Mr. Blankenship is putting his money on PeerCoin, one of the biggest of the virtual currencies that are being promoted as alternatives to bitcoin.
With mounting interest from prominent investors and growing acceptance from regulators, bitcoin — either the new gold or the next Dutch tulip craze, depending on who is being asked — is at the center of the virtual money universe. Yet there are dozens of digital alternatives, like PeerCoin, Litecoin and anoncoin, whose backers point to advantages they say their currency has over bitcoin.
PeerCoin, according to Mr. Blankenship, is closer than bitcoin to the perfect, communal money. Mr. Blankenship, who is 34, has arranged to accept PeerCoin as the virtual currency of choice at a Star Trek convention he is organizing in his hometown.
“Looking down the road 10 years from now, I definitely see bitcoin being ousted,” he said. “Everyone’s going to start switching to other coins, and hopefully PeerCoin comes out ahead in that.”
In the alternative galaxy of virtual currencies, newly created money can become worth millions of real dollars in a few months. All the PeerCoin in existence, for example, was worth nearly $40 million last week. Programmers and mathematicians release new entrants into the field almost every week. On one popular exchange, Cryptsy, 60 different coins can now be traded.
Almost all of these altcoins, as they are known, have fed on the stratospheric rise of bitcoin. Since the beginning of the month, the value of bitcoin rose to more than $900 at one point, from $200, and it is up 6,000 percent since the beginning of the year.
Bitcoin (BTC) cryptocurrency value tops $1,000 for first time
Dan Held, an expert in tracking the bitcoin market, told the website: “China is still driving overall demand. However, I think there has been a paradigm shift in how people think about Bitcoin in the US.
“Over the last few days, my friends, parents’ friends, and people that I never thought would buy bitcoin have contact me, not asking ‘what is bitcoin,’ but ‘how do I get bitcoin?”
Bitcoin has seen a surge in value in recent weeks after it received recognition from a series of major businesses and authorities across the world.
It featured in a US Senate hearing last week to consider the possibility it could be placed under American regulation.
In a letter written ahead of the congressional hearings US Federal Reserve chairman Ben Bernanke states that although the Federal Reserve “does not necessarily have authority to directly supervise or regulate” virtual currencies, such innovations may hold “long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
“In general,” writes Bernanke, “the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise.”
It was also announced by Sir Richard Branson that his space tourism company Virgin Atlantic will start accepting bitcoins as payment.
“All of our future astronauts are pioneers in their own right,” wrote Sir Richard, “and this is one more way to be forward-thinking.”
“Over the last few days, my friends, parents’ friends, and people that I never thought would buy bitcoin have contact me, not asking ‘what is bitcoin,’ but ‘how do I get bitcoin?”
Bitcoin has seen a surge in value in recent weeks after it received recognition from a series of major businesses and authorities across the world.
It featured in a US Senate hearing last week to consider the possibility it could be placed under American regulation.
In a letter written ahead of the congressional hearings US Federal Reserve chairman Ben Bernanke states that although the Federal Reserve “does not necessarily have authority to directly supervise or regulate” virtual currencies, such innovations may hold “long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
“In general,” writes Bernanke, “the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise.”
It was also announced by Sir Richard Branson that his space tourism company Virgin Atlantic will start accepting bitcoins as payment.
“All of our future astronauts are pioneers in their own right,” wrote Sir Richard, “and this is one more way to be forward-thinking.”
Is This The Bitcoin Rout That Was Bound To Happen?
Bitcoin is in freefall this morning as liquidation (volume has picked up during the selling) seems to be taking place after the brief foray with Gold parity over the weekend.
At 1 am AEDT this morning Bitcoins were fetching the still heady price of $1150 US dollars but right now they are trading at $846 and falling so fast it’s hard to get an up-to-date chart.
At 1 am AEDT this morning Bitcoins were fetching the still heady price of $1150 US dollars but right now they are trading at $846 and falling so fast it’s hard to get an up-to-date chart.
As bitcoin booms, so does bitcoin bank robbery
Robbing a bank is such a hassle in the real world, with all the complicated logistics of weapons, vaults, dye packs, and getaway cars. It’s a lot more straightforward to rob digital currency exchanges and payment processors. To paraphrase bank robber Willie Sutton, that’s where the bitcoins are.
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The huge interest in bitcoin and the concurrent surge in the value of the currency—bitcoin has risen 6,000% versus the US dollar in the last year and 300% just this month—has also created a growing incentive for larcenous hackers:
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European bitcoin payment processor BIPS lost the equivalent of about $1 million last week after a distributed denial of service (DDoS) attack overwhelmed its servers and enabled attackers to gain access to customers’ online bitcoin “wallets.”
Poland’s Bidextreme.pl was also hacked last week, and its users’ accounts emptied, though it did not disclose the amount taken.
A week earlier, the Czech exchange Bitcash.cz was hit, with 4,000 users losing bitcoins worth about $100,000.
Australia’s TradeFortress said it was hacked in November, leading to the loss of $1 million worth of users’ bitcoins.
China’s GBL exchange abruptly went offline in October, with $4.1 million in users’ bitcoins going missing.
How do you actually steal a bitcoin, anyway?
Owning bitcoins, as Wired’s extensive survival guide explains, means that you have a private cryptography key that’s associated with a public internet address. You need both to access the money. By exploiting cybersecurity flaws on computer servers, PCs, and mobile phones, thieves who discover both the private key and the public address can transfer the bitcoins to their own accounts to spend as they please or convert into another currency.
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Bitcoin transactions cannot be reversed without the consent of both sender and receiver, so the transfers are irrevocable. The system is designed to shield the identity of its users, but individual bitcoins are traceable.
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“While the ownership of money is implicitly anonymous, its flow is globally visible,” a recent research paper concluded. Forbes contributor Jon Matonis wrote last year about the theft of 46,703 bitcoins, worth $228,845 at the time of the robbery, from a New Jersey-based hosting company called Linode, which could be traced after the theft through servers in dozens of other countries.
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As a one-stop despository of multiple accounts, exchanges make a tempting target, which is why the Bitcoin Foundation warns new users:
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When sending money to an exchange or seller you are trusting that the operator will not abscond with your funds and that the operator maintains secure systems that protect against theft—internal or external. It is recommended that you obtain the real-world identity of the operator and ensure that sufficient recourse is available.
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BIPS, the European payment processor that was hacked last week, has stopped offering online wallet services and has urged customers to avoid online wallets altogether.
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Safe-guarding your own bitcoins can also be fraught, since thieves have exploited security vulnerabilities to steal bitcoins from users’ own computers. Security-conscious users recommend storing bitcoins not in “hot wallets” that are necessary for processing transactions, but rather in “cold storage,” such as a USB drive that is not connected to the internet, or even “deep cold storage,” such as a usb drive that’s stored in a (real world) safety deposit box. Private keys can even be written on pieces of paper—or engraved onto a ring.
+
The huge interest in bitcoin and the concurrent surge in the value of the currency—bitcoin has risen 6,000% versus the US dollar in the last year and 300% just this month—has also created a growing incentive for larcenous hackers:
+
European bitcoin payment processor BIPS lost the equivalent of about $1 million last week after a distributed denial of service (DDoS) attack overwhelmed its servers and enabled attackers to gain access to customers’ online bitcoin “wallets.”
Poland’s Bidextreme.pl was also hacked last week, and its users’ accounts emptied, though it did not disclose the amount taken.
A week earlier, the Czech exchange Bitcash.cz was hit, with 4,000 users losing bitcoins worth about $100,000.
Australia’s TradeFortress said it was hacked in November, leading to the loss of $1 million worth of users’ bitcoins.
China’s GBL exchange abruptly went offline in October, with $4.1 million in users’ bitcoins going missing.
How do you actually steal a bitcoin, anyway?
Owning bitcoins, as Wired’s extensive survival guide explains, means that you have a private cryptography key that’s associated with a public internet address. You need both to access the money. By exploiting cybersecurity flaws on computer servers, PCs, and mobile phones, thieves who discover both the private key and the public address can transfer the bitcoins to their own accounts to spend as they please or convert into another currency.
+
Bitcoin transactions cannot be reversed without the consent of both sender and receiver, so the transfers are irrevocable. The system is designed to shield the identity of its users, but individual bitcoins are traceable.
+
“While the ownership of money is implicitly anonymous, its flow is globally visible,” a recent research paper concluded. Forbes contributor Jon Matonis wrote last year about the theft of 46,703 bitcoins, worth $228,845 at the time of the robbery, from a New Jersey-based hosting company called Linode, which could be traced after the theft through servers in dozens of other countries.
+
As a one-stop despository of multiple accounts, exchanges make a tempting target, which is why the Bitcoin Foundation warns new users:
+
When sending money to an exchange or seller you are trusting that the operator will not abscond with your funds and that the operator maintains secure systems that protect against theft—internal or external. It is recommended that you obtain the real-world identity of the operator and ensure that sufficient recourse is available.
+
BIPS, the European payment processor that was hacked last week, has stopped offering online wallet services and has urged customers to avoid online wallets altogether.
+
Safe-guarding your own bitcoins can also be fraught, since thieves have exploited security vulnerabilities to steal bitcoins from users’ own computers. Security-conscious users recommend storing bitcoins not in “hot wallets” that are necessary for processing transactions, but rather in “cold storage,” such as a USB drive that is not connected to the internet, or even “deep cold storage,” such as a usb drive that’s stored in a (real world) safety deposit box. Private keys can even be written on pieces of paper—or engraved onto a ring.
When bitcoins go bad: 4 stories of fraud, hacking, and digital currencies.
With Bitcoin interest (and prices) spiking, you might be considering investing in your own little cache of digital currency. But before you set up a Bitcoin wallet, you should think long and hard about who will watch over your digital wealth. In its relatively short lifespan, Bitcoin wallets and processors have been a target for hackers -- and old-fashioned fraudsters. In fact, within the last week, one of the most prominent European exchanges reported it had lost over $1 million worth of bitcoins to hackers.
An academic study published earlier this year by Tyler Moore at Southern Methodist University and Nicolas Cristin at Carnegie Mellon about the risks associated with Bitcoin exchanges reported that 18 of 40 services they studied over three years closed "with customer account balances often wiped out." In that study, less popular services were more likely to just disappear than popular exchanges -- but popular exchanges were more likely to suffer security breaches, which have also been blamed for disappearing bitcoins.
Their research supports the anecdotal evidence about the security of various Bitcoin services -- or lack thereof. The forum Bitcoin Talk has a relatively comprehensive list of incidents, but here are a few of the most notable (and costly) stories about investing in Bitcoins going bad.
European payment processor and wallet service loses over $1 million worth of bitcoins
BIPS, a Denmark-based Bitcoin payment processor with a free online wallet service reportedly lost 1,295 bitcoins over the course of a few days earlier this month -- just over $1 million worth at current exchange rates. Coindesk reports that the service was the subject of a series of DDoS attacks that appeared to be connected to the heist. The company's CEO said most of the missing funds were from the company's own holdings, but a statement addressing the incident noted that some users also took a hit
An academic study published earlier this year by Tyler Moore at Southern Methodist University and Nicolas Cristin at Carnegie Mellon about the risks associated with Bitcoin exchanges reported that 18 of 40 services they studied over three years closed "with customer account balances often wiped out." In that study, less popular services were more likely to just disappear than popular exchanges -- but popular exchanges were more likely to suffer security breaches, which have also been blamed for disappearing bitcoins.
Their research supports the anecdotal evidence about the security of various Bitcoin services -- or lack thereof. The forum Bitcoin Talk has a relatively comprehensive list of incidents, but here are a few of the most notable (and costly) stories about investing in Bitcoins going bad.
European payment processor and wallet service loses over $1 million worth of bitcoins
BIPS, a Denmark-based Bitcoin payment processor with a free online wallet service reportedly lost 1,295 bitcoins over the course of a few days earlier this month -- just over $1 million worth at current exchange rates. Coindesk reports that the service was the subject of a series of DDoS attacks that appeared to be connected to the heist. The company's CEO said most of the missing funds were from the company's own holdings, but a statement addressing the incident noted that some users also took a hit
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