Tag: Bitcoin

Ask any Modern Monetary Theorist and they’ll tell you the difference between Bitcoin and a currency is that it’s not legal tender, that is to say that it’s not mandated by the State as acceptable payment for all debts, public and private.

Instead this libertarian fantasy is a mere illusion of a commodity, not even as useful as gold which you can’t eat but at least has the properties of non-reactivity, conductivity, and ductility.

Third cryptocurrency exchange becomes hacking victim, loses Bitcoin

By Charlie Osborne for Zero Day

March 6, 2014 — 10:27 GMT (02:27 PST)

Poloniex, a Bitcoin trading post similar to Mt. Gox, has lost 12.3 percent of the Bitcoin stored in hot wallets on the website. However, in stark contrast to how Mt. Gox CEO Mark Karpeles handled his company’s Bitcoin losses, the owner of Poloniex, Tristan D’Agosta — a.k.a. Busoni — admitted to the loss and asked users how they would like to be compensated.

…

Mt. Gox, once the dominate Bitcoin trading post online, closed its doors last week and filed for bankruptcy protection in Japan following years of undetected infiltration that resulted in the theft of 750,000 customer-owned Bitcoin, as well as Mt. Gox’s store of roughly 100,000 coins, in total worth almost $500 million. System design flaws, hackers and poor accountancy practices have been blamed for the massive financial losses.

Flexcoin follow suit and closed after hackers stole 896 Bitcoin — worth approximately $606,000 — and the trading exchange did not have the funds or resources to recover.

For Bitcoin, Secure Future Might Need Oversight

Farhad Manjoo, The New York Times

MARCH 5, 2014

To save their nascent currency, Bitcoin’s backers may be forced to alter their philosophy and embrace the same messy humans – auditors, insurers and even regulators – that the currency’s most ardent supporters have long abhorred. This raises two difficult questions: Can human oversight integrate into Bitcoin’s free-for-all ethos quickly enough to render Bitcoin safe? And, can Bitcoin be made safer without tamping down on the very openness that proponents say makes Bitcoin such a cheap, efficient and innovative financial platform? At the moment, the answers are still very much up in the air.

Continue reading the main story

Some in the more mainstream part of the Bitcoin world – firms that have sought venture capital and are trying to appeal to ordinary investors and large businesses – say they’re up to the challenge. They are working to set up stringent technical and financial audits of trading sites, and to create insurance mechanisms so that holders of Bitcoin won’t be wiped out by catastrophic losses like the one at Mt. Gox. There are even efforts to pursue government oversight.

CEO of bitcoin exchange found dead in Singapore

By Associated Press

Published: March 6

The American CEO of a virtual currency exchange was found dead near her home in Singapore.

…

Postings on her Facebook page showed her to be a believer in the potential of virtual currencies.

Last month, she linked to an article on entrepreneurs suffering depression, commenting above the link: everything has its price.

“Once upon a time there was a poor mother who lived alone with her son, Jack. All they had in the world was an old cow to give them milk. One day the cow stopped giving milk so the woman had to sell her. She told Jack to take the cow to market and to get as much money as he could for her.

On his way to market Jack met a man who wanted to buy the cow. He offered Jack five beans for the cow. Jack knew that his mother would be very angry if he sold the cow for beans. “They are very special beans” said the man. “They are MAGIC ! – they will bring you good luck!” Jack thought that he and his mother needed some good luck, so he gave the cow to the man in return for the magic beans.”

    Jack’s tale begins with some economic truths: trade is grounded in the perceived fair value of an exchange of goods and services and, in times of hardship, people will accept forms of trade that they might not consider otherwise. Fortunately, the old man did not take advantage of Jack’s naive ideas of fair value, as the beans were indeed magic. (Why the man was willing to trade them for a spent cow remains open to question.)

    Most of us make less fanciful decisions, and consider carefully whether an item we are purchasing is a good value, but until recently, most of us have not questioned the inherent worth of cash in pocket, the piece of plastic that represents funds in our account, the place where this money is kept, or the balance between trust and government regulation that keeps the entire system running. Since the financial crash things have begun to change. Kos diarists have examined the role the banks play on a personal level: skimming a little off every transaction, and assessing excessive fees. Others, particularly bobswern and gjohnsit, have assessed the banks’ culpability in crippling the system itself.

This trend has accelerated to the point that trust in banks is becoming increasingly difficult. Rolling Stone’s Matt Taibbi has shown the breadth and depth of manipulations meant to keep tight control of money in a few centers. He also shows exactly how national governments, their courts and regulatory authorities, have become helpless or even complicit in this process.

It’s now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive,” he said. “And that’s not just surmising. This is just based upon what they’ve been caught at.

The foundation of the Capitalist system itself has been called into question, at least in its present incarnation. If governments can’t regulate their own money supply for the benefit of the majority of their own citizens, and banks abuse their position shamelessly on account of that, people will eventually turn elsewhere. I believe that the rise of virtual currencies, such as the Bitcoin, and alternative trading schemes, such as local scrip and barter exchanges, are symptoms of an economic system that is bent to the breaking point.