Nothing like a little bit of speculation gone wild to kick off the holiday spending season.
Bitcoin just traded past the $1,000 per coin mark on Mt.Gox, one of its largest exchanges - as we write this, it's at $1,022, with a high of $1,030 a few moments ago.
The currency has been on a massive run the past several days, shooting up hundreds of dollars per unit, prompting complaints that its value is overheated, leaving its price unmoored from any sort of inherent utility. Well, yes, but it's still fun to watch.
Here's the chart that shows how the price has been creeping up:
The market capitalization of the Bitcoin market is far above the potential stored functional use of the currency in even the medium-term, implying to me that it is overvalued. Do what you will, just be careful.
2013年12月1日 星期日
E-gold founder backs new Bitcoin rival
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The founder of one of the earliest virtual currencies has re-emerged with a rival to Bitcoin, more than five years after his first venture, e-gold, was shut down by the US Department of Justice.
Douglas Jackson is consulting for a membership organisation called Coeptis that hopes to launch a new version of his gold-backed currency, which attracted millions of users at its height.
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The aim is to lure many of the people who have been attracted to Bitcoin and other virtual currencies this year, including businesses that are looking for a cheap way to process payments outside the traditional banking system.
Coeptis’s “global standard currency” would be fully backed by reserves of gold, held in a trust, in effect turning the precious metal into a medium of exchange.
Mr Jackson and two others pleaded guilty in July 2008 to running an illegal money transmitting business and to aiding money laundering, after federal investigators charged that “criminals of every stripe gravitated to e-gold as a place to move their money with impunity”.
Bill Cunningham, chief executive of CMO, the Florida company behind Coeptis, said the technology behind e-gold has been updated and expanded to ensure it complies with the emerging regulations covering virtual currencies. Unlike e-gold, it would verify members’ identities before allowing them to trade.
“We believe we will have better anti-money laundering procedures than any other virtual currency business and that we will compare well with the banking industry,” Mr Cunningham said.
“One of the advantages of seeing what happened to the e-gold system is we understand where we fell down before.”
The founder of one of the earliest virtual currencies has re-emerged with a rival to Bitcoin, more than five years after his first venture, e-gold, was shut down by the US Department of Justice.
Douglas Jackson is consulting for a membership organisation called Coeptis that hopes to launch a new version of his gold-backed currency, which attracted millions of users at its height.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/f7488616-561a-11e3-96f5-00144feabdc0.html#ixzz2mHdXEeO2
The aim is to lure many of the people who have been attracted to Bitcoin and other virtual currencies this year, including businesses that are looking for a cheap way to process payments outside the traditional banking system.
Coeptis’s “global standard currency” would be fully backed by reserves of gold, held in a trust, in effect turning the precious metal into a medium of exchange.
Mr Jackson and two others pleaded guilty in July 2008 to running an illegal money transmitting business and to aiding money laundering, after federal investigators charged that “criminals of every stripe gravitated to e-gold as a place to move their money with impunity”.
Bill Cunningham, chief executive of CMO, the Florida company behind Coeptis, said the technology behind e-gold has been updated and expanded to ensure it complies with the emerging regulations covering virtual currencies. Unlike e-gold, it would verify members’ identities before allowing them to trade.
“We believe we will have better anti-money laundering procedures than any other virtual currency business and that we will compare well with the banking industry,” Mr Cunningham said.
“One of the advantages of seeing what happened to the e-gold system is we understand where we fell down before.”
Bitcoin, you have a China problem
By all metrics and accounts, bitcoin’s popularity is exploding across the People’s Republic of China. It now boasts the world’s most active bitcoin exchange, BTC China, the greatest number of bitcoin mining nodes, the highest number of bitcoin wallet downloads, and set the record for the highest price ever paid for a bitcoin (7,000 yuan or approximately $1,120 on November 19) while trading at just $900 on Mt. Gox. A map of global bitcoin trading activity further illustrates China’s dominance.
Bitcoin bulls are eager to see the currency spread and gain broader global adoption, and thus may not view this as a problem. But for a currency touted for its independence from government interference, the growing concentration of Chinese influence over this crypto-currency wealth creates a single point of failure for the system. The same would be true if you replaced China with any other country (assuming it could generate similar trading volumes), but the fact that it is the notoriously unpredictable China doesn’t inspire confidence.
The rapid rise in popularity has attracted both investors and fraudsters. In late October, Lightspeed China (an international arm of Lightspeed Venture Partners) made a $5 million investment into BTC China, adding legitimacy to the already formidable company. Around the same time, GBL a supposed Hong Kong-based bitcoin exchange that was actually based in Beijing, shut down unexpectedly, taking $4.1 million worth of client deposits along with it. Despite red flags in the run-up to this disappearance, the bitcoin market barely noticed, either in China or elsewhere.
A number of possible explanations exist for bitcoin’s popularity in China, each of which raises its own red flag. One factor is that BTC China, the world’s largest bitcoin exchange and one that trades only in yuan (aka CNY or Renminbi), currently offers no-fee trading – a rarity among major global exchanges. Users pay nominal exchange entry and exit fees – 0.5 percent when using Chinese PayPal equivalent Tenpay and 1 percent by bank transfer.
But beyond fee advantages, China’s bitcoin obsession primarily traces back to two central factors: the difficulty of getting wealth out of China, and the fact that Beijing does not allow the yuan’s value to float freely. Should either of these change, bitcoin’s value could plummet.
Today, many wealthy Chinese who want to invest in international assets or send their children to school abroad are turning to bitcoin to move money across borders with greater freedom. The same can be said of Chinese looking for a hedge against the artificially stable yuan, which is widely considered to be overvalued. Should China eventually decide to float its currency, much of its purchasing power could evaporate overnight. Therefore, Chinese bitcoin adoption is less a vote of confidence in an alternative digital currency and more a vote of no confidence in the yuan, as evidenced by the premium – often as much as 20 percent – that Chinese must pay to purchase bitcoin with yuan.
Bitcoin bulls are eager to see the currency spread and gain broader global adoption, and thus may not view this as a problem. But for a currency touted for its independence from government interference, the growing concentration of Chinese influence over this crypto-currency wealth creates a single point of failure for the system. The same would be true if you replaced China with any other country (assuming it could generate similar trading volumes), but the fact that it is the notoriously unpredictable China doesn’t inspire confidence.
The rapid rise in popularity has attracted both investors and fraudsters. In late October, Lightspeed China (an international arm of Lightspeed Venture Partners) made a $5 million investment into BTC China, adding legitimacy to the already formidable company. Around the same time, GBL a supposed Hong Kong-based bitcoin exchange that was actually based in Beijing, shut down unexpectedly, taking $4.1 million worth of client deposits along with it. Despite red flags in the run-up to this disappearance, the bitcoin market barely noticed, either in China or elsewhere.
A number of possible explanations exist for bitcoin’s popularity in China, each of which raises its own red flag. One factor is that BTC China, the world’s largest bitcoin exchange and one that trades only in yuan (aka CNY or Renminbi), currently offers no-fee trading – a rarity among major global exchanges. Users pay nominal exchange entry and exit fees – 0.5 percent when using Chinese PayPal equivalent Tenpay and 1 percent by bank transfer.
But beyond fee advantages, China’s bitcoin obsession primarily traces back to two central factors: the difficulty of getting wealth out of China, and the fact that Beijing does not allow the yuan’s value to float freely. Should either of these change, bitcoin’s value could plummet.
Today, many wealthy Chinese who want to invest in international assets or send their children to school abroad are turning to bitcoin to move money across borders with greater freedom. The same can be said of Chinese looking for a hedge against the artificially stable yuan, which is widely considered to be overvalued. Should China eventually decide to float its currency, much of its purchasing power could evaporate overnight. Therefore, Chinese bitcoin adoption is less a vote of confidence in an alternative digital currency and more a vote of no confidence in the yuan, as evidenced by the premium – often as much as 20 percent – that Chinese must pay to purchase bitcoin with yuan.
Bitcoin is soaring, but financial advisers are steering clear for now
Bitcoin is soaring to record heights, hitting the $1,000 mark Friday for the first time, but financial advisers aren't biting — yet, anyway.
The virtual currency passed the quadruple digit price shortly before 10 a.m. on the Mt. Gox exchange and has since soared higher than $1,020. That marks a gain of about 5,000% from the $20 level at which Bitcoin was trading at the start of this year.
Despite the hype, many advisers are steering clear of the online currency, which is unregulated by central banks and traded freely on the Internet. Because the digital currency is so new and its rise has been so fast, advisers are doing their homework before investing clients' money.
The virtual currency passed the quadruple digit price shortly before 10 a.m. on the Mt. Gox exchange and has since soared higher than $1,020. That marks a gain of about 5,000% from the $20 level at which Bitcoin was trading at the start of this year.
Despite the hype, many advisers are steering clear of the online currency, which is unregulated by central banks and traded freely on the Internet. Because the digital currency is so new and its rise has been so fast, advisers are doing their homework before investing clients' money.
What Bubble? Bitcoin Tops $1000.
Bitcoin topped $1000 for the first time Wednesday morning.
It’s the latest milestone in yet another epic rally for the four-year old virtual currency created a man or group of people going by the name Satoshi Nakamoto.
As of early 2010 was valued at just 4 cents, according to Mt. Gox. That’s a 2,499,9000% jump.
As of Oct. 1, 2013, bitcoin closed at $140.3. The jump in less than two months: 614%.
The value of a bitcoin keeps rising but with intense bouts of volatility. With each drop in the cybercurrency’s price, bitcoin naysayers are quick to point to popping of the bitcoin bubble.
For today at least, the bitcoin bulls are winning.
It’s the latest milestone in yet another epic rally for the four-year old virtual currency created a man or group of people going by the name Satoshi Nakamoto.
As of early 2010 was valued at just 4 cents, according to Mt. Gox. That’s a 2,499,9000% jump.
As of Oct. 1, 2013, bitcoin closed at $140.3. The jump in less than two months: 614%.
The value of a bitcoin keeps rising but with intense bouts of volatility. With each drop in the cybercurrency’s price, bitcoin naysayers are quick to point to popping of the bitcoin bubble.
For today at least, the bitcoin bulls are winning.
Speculators push Bitcoin above $1,000
Speculators are trading Bitcoin above $1,000 for the first time, pushing the mania for the experimental virtual currency into a new phase.
The price for a single Bitcoin quoted on the Mt.Gox exchange hit $1,044 on Wednesday, double its level one week ago and 80 times the prevailing price at the start of the year.
More
ON THIS TOPIC
Silicon Valley catches Bitcoin fever
Alderney to hold talks on Bitcoin plan
Island seeks self-sufficiency with Bitcoin
Royal Mint explores plan to make Bitcoins
IN CURRENCIES
Yen at five-year lows as inflation rises
E-gold founder backs new Bitcoin rival
Bitcoin must learn from past failures
Poor growth and low oil sales hit rouble
The media coverage and social media debate that has stoked the buying has intensified in recent weeks, as supporters claim Bitcoin could one day become an effective alternative to government currencies or a cheap way of moving money around the world.
Even sceptics accept that the price could continue to soar before any flaws in the concept become apparent.
“It’s a massively multiplayer online game,” said Jim Angel, professor at Georgetown University. “If you can guess where the crowd is going to go tomorrow, you can have some fun gambling here.
“But as a store of value it fluctuates too much and as an alternative to traditional payments systems it has got a lot of competition. There is also huge technology risk here. All it takes is one hack and, puff, it goes down to zero.”
Bitcoin was created in 2009 by an unknown computer scientist and transfers of ownership of the currency are recorded in software stored across a network of computers.
In depth
Increased trading in the decentralised virtual currency has begun to attract the attention of regulators
It is not backed by any central authority, so its value is derived only from speculators’ expectations of its future utility. A number of small businesses have begun accepting Bitcoin as payment, but usually convert the money back into government-run currency.
Regulators in the US and in China, the twin centres of speculative Bitcoin activity, have in recent weeks shown their willingness to let the experiment continue, as long as Bitcoin exchanges and brokers comply with anti-money laundering rules.
Jeremy Liew, partner at Lightspeed Venture Partners of San Francisco, which has an investment in the largest Bitcoin exchange in China, said that the currency might have particular use in emerging markets with under-developed banking technology.
And he added that a Chinese penchant for speculation has been playing a part in Bitcoin’s exponential price rise. “It is no accident that Macau has a larger gaming industry than has Las Vegas,” he said.
The price for a single Bitcoin quoted on the Mt.Gox exchange hit $1,044 on Wednesday, double its level one week ago and 80 times the prevailing price at the start of the year.
More
ON THIS TOPIC
Silicon Valley catches Bitcoin fever
Alderney to hold talks on Bitcoin plan
Island seeks self-sufficiency with Bitcoin
Royal Mint explores plan to make Bitcoins
IN CURRENCIES
Yen at five-year lows as inflation rises
E-gold founder backs new Bitcoin rival
Bitcoin must learn from past failures
Poor growth and low oil sales hit rouble
The media coverage and social media debate that has stoked the buying has intensified in recent weeks, as supporters claim Bitcoin could one day become an effective alternative to government currencies or a cheap way of moving money around the world.
Even sceptics accept that the price could continue to soar before any flaws in the concept become apparent.
“It’s a massively multiplayer online game,” said Jim Angel, professor at Georgetown University. “If you can guess where the crowd is going to go tomorrow, you can have some fun gambling here.
“But as a store of value it fluctuates too much and as an alternative to traditional payments systems it has got a lot of competition. There is also huge technology risk here. All it takes is one hack and, puff, it goes down to zero.”
Bitcoin was created in 2009 by an unknown computer scientist and transfers of ownership of the currency are recorded in software stored across a network of computers.
In depth
Increased trading in the decentralised virtual currency has begun to attract the attention of regulators
It is not backed by any central authority, so its value is derived only from speculators’ expectations of its future utility. A number of small businesses have begun accepting Bitcoin as payment, but usually convert the money back into government-run currency.
Regulators in the US and in China, the twin centres of speculative Bitcoin activity, have in recent weeks shown their willingness to let the experiment continue, as long as Bitcoin exchanges and brokers comply with anti-money laundering rules.
Jeremy Liew, partner at Lightspeed Venture Partners of San Francisco, which has an investment in the largest Bitcoin exchange in China, said that the currency might have particular use in emerging markets with under-developed banking technology.
And he added that a Chinese penchant for speculation has been playing a part in Bitcoin’s exponential price rise. “It is no accident that Macau has a larger gaming industry than has Las Vegas,” he said.
$8.2 million worth of Bitcoins lost with hard drive
NEWPORT, Wales, Nov. 29 (UPI) -- A Welsh man said he threw out a laptop hard drive and later realized it held $8.2 million worth of the online Bitcoin currency.
James Howells said he threw away the hard drive while cleaning during the summer and last Friday he realized the part was where he had stored the 7,500 Bitcoins he created in 2009, when the currency value of Bitcoins was considerably lower, The Guardian reported Friday.
"You know when you put something in the bin, and in your head, say to yourself, 'That's a bad idea?' I really did have that," Howells said. "I don't have an exact date. The only time period I can give -- and I've been racking my own brains -- is between 20 June and 10 August. Probably mid-July."
The Bitcoins were worth about $818,000 when he threw the hard drive away during the summer, but the price has since soared, with the worth of a single Bitcoin surpassing $1,000 Wednesday.
The actual contents of the hard drive was the cryptographic "private key" needed to access and spend the Bitcoins, Howells said. He said the currency is lost without the key.
Bitcoins were popularized by black market websites specializing in anonymous purchases and have since become accepted currency for online sites including OKCupid and Reddit. Virgin announced it will accept Bitcoins to purchase flights with Virgin Galactic.
James Howells said he threw away the hard drive while cleaning during the summer and last Friday he realized the part was where he had stored the 7,500 Bitcoins he created in 2009, when the currency value of Bitcoins was considerably lower, The Guardian reported Friday.
"You know when you put something in the bin, and in your head, say to yourself, 'That's a bad idea?' I really did have that," Howells said. "I don't have an exact date. The only time period I can give -- and I've been racking my own brains -- is between 20 June and 10 August. Probably mid-July."
The Bitcoins were worth about $818,000 when he threw the hard drive away during the summer, but the price has since soared, with the worth of a single Bitcoin surpassing $1,000 Wednesday.
The actual contents of the hard drive was the cryptographic "private key" needed to access and spend the Bitcoins, Howells said. He said the currency is lost without the key.
Bitcoins were popularized by black market websites specializing in anonymous purchases and have since become accepted currency for online sites including OKCupid and Reddit. Virgin announced it will accept Bitcoins to purchase flights with Virgin Galactic.
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