Bitcoin - yes, no or I haven't a clue

D

Departed

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The US Homeland security is attempting to define virtual currencies in general as a threat to security. They have some very good points but they primarily have to do with law enforcement. There are some interesting economic benefits to virtual currencies and just because the US says no does not mean they will not flourish.

Personally, having a currency out of the reach of any central banker appeals to me. Vancouver has Canada's first ATM that converts cash to bitcoin and vice versa. THere are other exchanges around and it is not without it's headaches. But when you think about it gold has similar logistical headaches that are more or less permanent. Bitcoin's headaches will disappear if it becomes more widely accepted.

One thing is for certain, we will see more virtual currencies emerge. Central banks will want to get in on the action and I wouldn't be surprised to see the World Bank and the IMF start down this road and things will likely become more confusing before they become clearer. As I have said, I prefer an independent currency but please don't ask me to define independent.

Which leads you to the possibility that the next real cyber wars will be for control over these currencies.
 
A split economy in terms of currencies just confuses the issues of economics. It's simpler with good old fashioned cash currency that we have all been used to dealing with but for millenia people have bartered their various commodities and done alright at it. This newish bitcoin thing though, does create new problems because it takes cash and normal credit schemes out of the system.
 
The exchange rate just went through $955US for 1 bitcoin. It was $277US a couple of weeks ago.
 
Bitcoins - OUCH!

Look at this report of this guy from Newport South Wales:

http://www.bbc.co.uk/news/uk-wales-south-east-wales-25134289

"Damn! My PC just crashed, now I'm £4.6M down!"

That had to hurt! I am beginning to totally reject the idea of bitcoins.
I'm now feeling a bit like a sort of smug Luddite.
 
It is gaining a foothold........


Bitcoin price tumbles after warning from Chinese central bank
The People's Bank of China has issued a warning that the currency is not legally protected and has no 'real meaning'
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Alex Hern

The Chinese central bank has warned the country's financial institutions not to trade in bitcoin, saying that the digital currency doesn't have "real meaning" and lacks legal protections.

However, no explicit risk to China's financial system was identified by the bank, and it reiterated that individual citizens were free to use bitcoin provided they were aware that they were taking the risk on themselves.

The bank also identified money laundering and other illegal uses of the currency as areas of concern.

Bitcoin has recently achieved a measure of popularity in China, with FiatLeak and other bitcoin trading information sites showing large inflows of the currency through Chinese exchanges.

China Telecom, the largest mobile phone provider in the country, launched a promotion allowing a Samsung phone to be bought with bitcoins, and Baidu, the Chinese Google, is accepting payments for its firewall service in the currency.

But there's also suspicion that a large measure of the bitcoin's Chinese popularity is the result of fringe-legal uses. The currency is perfect for getting around the country's tight capital controls, which prevent rich Chinese citizens from moving too much money overseas.

While bitcoin remains unregulated, it is easy for users to buy a large sum in Chinese yuan and sell it in US dollars, evading those regulations.

The potential of bitcoin in China is seen as a large part of the reason for the currency's seven-fold increase in price over November, and the news that the Chinese central bank is taking a less-than-welcoming stance to it has sent markets tumbling.

The value of one bitcoin fell by 28% over two hours on Thursday morning, before settling into its more normal pattern of rapid large price swings in both directions.

The warning follows a similar cautionary tone from the Dutch central bank, which noted that there is no central issuer which can held liable for bitcoin, and no deposit guarantee scheme in the event of bitcoin banks failing.

The former head of the Dutch bank even compared the bitcoin bubble to the Netherlands' tulip mania in the 17th century – but pointed out that at least when that bubble burst, investors were left with tulips at the end.

http://www.theguardian.com/technology/2013/dec/05/bitcoin-price-tumbles-chinese-central-bank-warning
 
Looks like this currency has survived its first negative hit with the electronic theft having an impact and taking the froth out of the price.
 
Galvin's Shinpads - 20/3/2014 15:05

The first Bitcoin ATM in Ireland has arrived
Click to expand...

It is being viewed as a safe haven by some. It is going to have a staggering impact if it holds.
 
If you can't beat 'em, join 'em.......

Coinbase Is Opening The First Regulated Bitcoin Exchange In The U.S.
Posted 10 hours ago by Jon Russell (@jonrussell)

Fresh from scoring a massive $75 million funding round, bitcoin payment firm Coinbase has revealed that it will open the first regulated bitcoin exchange in the U.S. on Monday.

The company, which added the New York Stock Exchange and USAA to its list of investors last week, told the Wall Street Journal that it has “regulatory approval” in half of all states, including significant areas like New York and California. (The New York Department of Financial Services has been very vocal in its call for regulation via a proposed ‘BitLicense’.)

Coinbase already offers exchange services in 19 countries overseas, and it said that its work accruing necessary licenses and approvals in the U.S. took five months. The company will only be able to offer services to customers that sign up in states were it is approved, but there are plans to gain approval in further states.

Exchanges made via the Coinbase service will include a 0.25 percent commission fee that goes to Coinbase, although the company is giving customers two months of free trades to get things going.

The exact legality of bitcoin in the U.S. has been unclear for some time, so Coinbase’s news — and regulatory backing — is a significant mark in the sand.

The busting of Silk Road, an underground market for illicit goods where bitcoin’s anonymity made it a popular payment option, has doubtless eased some early opinions that bitcoin’s modus operandi was financing nefarious activity, but there’s still plenty of uncertainty about it as a digital currency. The price of a single bitcoin dropped as low as $185 this month — it is currently $263, but crossed $1,000 in 2013 — and it is unclear whether it has reached relative stability.

As for the Coinbase business itself, CEO Brian Armstrong is keen to explore the potential of bitcoin in emerging markets, and wants the company to expand its reach to at least 30 countries overall by the end of 2015.

Coinbase had a huge year in 2014, and its achievements included landing several big name retail partners — who began accepting bitcoin for the first time — including Overstock, Dell, Square, Mozilla and Wikipedia.

http://techcrunch.com/2015/01/25/coinbase-us-bitcoin-exchange/
 
I'm going to stay away until it has real central banking legitimacy, as by a single stroke the US could crush it - as it did to many of the gambling payment providers, even though they were all outside of it's jurisdiction...
 
Spursex - 26/1/2015 14:29

I'm going to stay away until it has real central banking legitimacy, as by a single stroke the US could crush it - as it did to many of the gambling payment providers, even though they were all outside of it's jurisdiction...
Click to expand...

It would be interesting to know who guided it through the regulatory hurdles and get a list of existing investors.
 
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