"You can buy bitcoins at South Station" by Hiawatha Bray | Globe Staff, February 20, 2014
The world’s most controversial, questionable, and exciting new currency, the bit coin....
Related: "Authorities around the world are grappling with how to regulate virtual currency."
“You can think of it as Internet cash,” said Chris Yim, cofounder of Liberty Teller, the Boston company that operates the new bitcoin ATM. “This is just a more secure way of buying things online.”
It is also confusing to many people. That’s why a Google search turns up such posts as, “How to explain bitcoin to your grandmother,” and, “What the heck is a bitcoin?”
The five-year-old currency is not backed by any central government, but can be spent just like dollars in a small but increasing number of places, including some local restaurants and the popular online retailer Overstock.com.
Not for long. Interesting that the hack came just as this story came out.
Bitcoins are stored by users in so-called digital wallets, and each coin has a unique online address. Transactions are managed by thousands of computers linked in a worldwide network, helping to ensure their integrity.
There is also the benefit of privacy.
Can't have that, American citizen.
While purchases are shared with the entire network, creating a permanent record, users don’t have to personally identify themselves — the same way someone handing over cash at a register doesn’t have to provide the clerk with a name. The hackers who stole millions of credit card numbers from Target during the holiday season would have a much tougher time cracking the bitcoin code.
Related: AmeriKa Media Missing the Target
No wonder the government never found them.
Bitcoin’s promise of anonymity has proved attractive to criminals.
Then it was created by government.
It was the favorite currency of the now defunct outlaw website Silk Road, a global trading post for illegal drugs and worse. But now much of the bitcoin action comes from legitimate — and greedy — financial speculators. They have helped drive the value of a single bitcoin from a few dollars in 2011 to as high as $1,242 in November. Since then, it has plummeted, and as of Wednesday the price was about $630.
Buying bitcoin through a bank can take several days....
Unfortunately, your new currency may be worth less than you thought, thanks to the rapidly shifting value of bitcoin. Last week I spent $100 for 144 millibits. Ten minutes later it was worth only $97.61.
So it is just like investing in stocks, huh?
Bitcoin has freaked out many a bureaucrat. It’s banned in Russia and Chinese banks are barred from accepting it, for instance. But US government officials have been pleasantly open-minded....
Is THAT ever the GIVEAWAY there!
But most consumers aren’t ready for bitcoin. They’re frightened by a currency whose value can fluctuate wildly from hour to hour. Besides, what can they buy with it? Few retailers accept bitcoins, even though they could save a fortune on credit and debit card fees and offer customers greater security....
Another reason it had to be destroyed! Can't take away those bank profits!
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"Bitcoin ATM: Iffy money at your fingertips | February 28, 2014
Bitcoins are meant to work just like any other form of currency; you use them to buy goods and services, albeit only at a small number of online retailers and forward-thinking shops. However, unlike with dollars, there is no government that determines the number of bitcoins in circulation.
That's a distortion. It is not the government that decides how many dollars are in circulation (although constitutionally they should); it is the private banking consortium known as the Federal Reserve that decides how many dollars will circulate, and then it charges the government interest just to print them.
What do you do when the newspaper doesn't even know what it is talking about?
Instead, computers can perform complex algorithms to “mine” for new coins and add them to the system.
Sort of like the stock trade programs Goldman Sachs and others run to boost trades so they can collect more commissions.
The lack of government oversight is a boon to libertarians and privacy activists, but it also greatly contributes to the currency’s volatility. A bitcoin that was worth $1,242 in November is now only worth a little under $600. Adding to investor concerns this week was the bankruptcy of Mt. Gox, one of the Web’s largest exchanges, after the apparent theft of 744,000 bit coins.
The idea of an unregulated, online currency understandably puts some people on edge.
Yeah, like Wall Street bankers.
For now, though, bitcoins are best understood as a deeply speculative investment or alternative-currency experiment by privacy advocates. It’s an idea that must be given time and space to develop, but....
It won't be.
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See:
Failure of exchange fuels bitcoin concerns
Major Bitcoin player is trying to stay alive
Tokyo bitcoin exchange files for bankruptcy
Japanese bitcoin exchange files US bankruptcy case
2 arrested, bitcoins seized in German fraud probe
"Charges link 2 Bitcoin operators to illicit drug site" by Larry Neumeister | Associated Press January 28, 2014
NEW YORK — The top executive of a New York City-based Bitcoin company and a Florida Bitcoin exchanger have been charged with conspiring to commit money laundering by selling more than $1 million in Bitcoins to users of the black market website Silk Road, authorities said Monday.
Now they are behaving just like Wall Street banks!
Charlie Shrem, 24, chief executive of BitInstant and vice chairman of a foundation that promotes the Bitcoin currency system, was arrested Sunday at Kennedy International Airport, and Robert Faiella was arrested Monday at his home in Cape Coral, Fla., prosecutors said.
Faiella and Shrem conspired to sell more than $1 million in Bitcoins to criminals who wanted to sell narcotics on Silk Road between December 2011 and October, US Attorney Preet Bharara said in a release.
‘‘Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act,’’ Bharara said.
Over the objection of prosecutors, US Magistrate Judge Henry B. Pitman allowed Shrem to be released on bail, though he required him to submit to electronic monitoring and live with his parents in Brooklyn. They were required to post nearly $1 million in property as collateral.
The kid is Jewish!
Assistant US Attorney Serrin Turner said Shrem ‘‘has held himself out as a ‘Bitcoin millionaire’’’ who was ready to flee rather than face charges.
Turner said the nature of the Bitcoin industry meant that Shrem had a ‘‘storage locker in the clouds’’ with money to facilitate flight. He added that Shrem had traveled internationally 16 times since 2007.
Turner played a video interview of Shrem posted online in which the Manhattan resident boasted that if the government tried to make arrests or take down companies that promote the use of Bitcoin, ‘‘I have a plane ticket ready to take me to Singapore. There’s another corporation already set up.’’
Shrem’s defense lawyer, Keith Miller, said there were other videos of his client saying that everybody involved with virtual currency should comply with the law. In setting bail conditions, Pitman said he appreciated that ‘‘sometimes people make statements on video that may or may not carry weight.’’
And sometimes they are charged with crimes and convicted, too.
As the bearded Shrem entered court in a hooded sweatshirt, he waved to his family.
Federal prosecutors in New York said Shrem bought drugs on Silk Road and was fully aware it was a website that let users buy illegal drugs anonymously, among other contraband.
All this right under the noses of NSA surveillance, 'eh?
According to prosecutors, Faiella operated under the name ‘‘BTCKing’’ as he ran a Bitcoin exchange on the Silk Road website.
It wasn’t immediately clear who would represent Faiella in court.
Authorities have said Silk Road’s San Francisco operator generated more than $1 billion in illicit business from January 2011 through September on the website, which used Bitcoin, the tough-to-track digital currency, before it was shut down.
The website, which had nearly 1 million registered users by July, let users anonymously browse through nearly 13,000 listings under such categories as cannabis, psychedelics, and stimulants.
It was shut down with the arrest of Ross William Ulbricht, who authorities say masterminded the operation.
He has pleaded not guilty.
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