BitBuzz Daily: A look at what's new on bitcoin around the web

It probably hasn’t escaped your attention that bitcoin has broken out and topped $1000. Of course it has ignited talk of bubbles and popping again. This short piece by Maureen Farrell in The Wall Street Journal looks at the impressive rally over the past two months and how bitcoin has jumped in value since 2010.

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%.

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Here’s an interesting interview with Futurist, Heather Schlegel on Tech Crunch all about the future of money. It is a subject she has researched for several years and why she is now crowdfunding her TV series to talk about The Future of Money. Peer to peer crowdfunding is, she says, one trend we will definitely be seeing more of…

 

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So, why is debt the source of income inequality and serfdom? According to Charles Hugh Smith on his blog: OfTwoMinds.com, "It’s The Interest, Baby". Here he takes a look at how being locked into the current fiat system is subjecting us to a life of servitude – both financial and political. It’s a discussion that will make anyone holding bitcoin, glad they have taken steps to remove themselves from a system likey to “self destruct.”

"Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must)."

I often refer to debt serfdom, the servitude debt enforces on borrowers. The mechanism of this servitude is interest, and today I turn to two knowledgeable correspondents for explanations of the consequences of interest.

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Bitcoin and wallets go hand in hand and so security of those wallets is paramount to any discerning bitcoiner. So, we thought we’d share Four Facts About Bitcoin Wallets, which Bitcoin Examiner thinks you should know…

Read them here

And there's something about bitcoin that seems to be attracting the young entrepreneurs, and when I say young, I mean, really young. We first told you about Bees Brothers a few months a go, then BitKidz came along and today, Emily Spaven on CoinDesk tells us about the nine-year-old who is “bullish about bitcoin”.

Andrew Karam isn’t your average nine-year-old. While most kids his age ask for the latest must-have toy for their birthdays, Andrew requested shares in Apple.

His parents bought him $120-worth and Andrew watched the price of the stock with interest, checking regularly whether his investment had gone up or down in value. Andrew’s dad, Steve, later told him about bitcoin and the schoolboy was well and truly hooked.

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BitBuzz Daily: Senate hearings and that price surge - A roundup of bitcoin news from around the web

If you are reading this, unless you have been hiding under a rock recently, you are probably already aware that the price of bitcoin exploded to new heights, hitting $750 overnight. That, apparently is due to a surge in trading over in Asia as reported by CNBC and also an expectation that the Senate hearings into digital currency, held by US Homeland Security, will have a favourable outcome for bitcoin.

On that note, and as expected, much of the bitcoin news around today, is related to those hearings of course and so far, according to Timothy B. Lee at The Washington Post, it has been a bit of a bitcoin love fest.

The Senate Committee on Homeland Security and Governmental Affairs, chaired by Sen. Tom Carper (D-Del.), is holding the first congressional hearing on the future of Bitcoin. The first panel features senior figures from the Obama administration. And their comments about Bitcoin have been remarkably positive.

After the officials gave their opening statements, Carper's first question drew a parallel to the Internet. He pointed out that in the early days of the Internet revolution, many people raised concerns about illicit use of Internet technologies. Yet in the long run, he argued, the Internet has had a hugely beneficial effect on peoples lives, making possible previously unimagined services like Facebook and YouTube. Carper wanted to know if the witnesses saw Bitcoin in the same light.

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One of the people testifying at this week's hearings is Jerry Brito, who believes if the US come down too harshly on bitcoin, it will go elsewhere. In his piece for The Guardian, he looks at how the debate over the growth of bitcoin hinges on US regulation and if they try to exert too much control, the States will end up losing out to countries such as China and Canada.

If the United States does not foster a reasonable regulatory environment for Bitcoin, the country might soon lose its head start in what could be the next great technological revolution. That's the message policymakers should hear today and tomorrow when the US Senate holds hearings on the virtual currency.

While Bitcoin is an international phenomenon, the United States has been central to its growth to date. Bitcoin's lead developer, Gavin Andresen, is an American based in the United States, as is the Bitcoin Foundation that employs him. The most innovative startups building out Bitcoin's infrastructure are also US-based. These include the merchant services provider Bitpay in Atlanta, backed by PayPal founder and early Facebook investor Peter Thiel, and the consumer-friendly wallet service Coinbase in Silicon Valley, backed by early Twitter funders Union Square Ventures.

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What these Senate hearings and price rise have done, if nothing else, is suddenly push bitcoin into the spotlight in mainstream press. The Telegraph in the UK published this article about the price surge and the hearings are also covered by Ryan Tracy in The Wall Street Journal here.

In Australia, the Sydney Morning Herald mentions how the Senate Committee have been told bitcoin is “a legal means of exchange.”

And, yes, all of the above, comment on the price of bitcoin, which, you will now know soared ahead of the hearings. When everyone starts talking about the new highs reached, China usually comes into the conversation. This article on CNN by Stan Stalnaker explains why China wants to dominate bitcoin.

China is quietly positioning itself to dominate the brave new world of Bitcoin.

Until recently the digital cyrptocurrency was considered a joke by the financial mainstream, but the view is starting to shift now that prices have surged above their April peak and are now hovering around $600.

Bitcoins are still being viewed cautiously by lawmakers and regulators in the United States. In fact, there are two Senate hearings this week about the risks Bitcoin poses. But that is decidedly not the case in China. There has been a steady drumbeat of positive news in the Chinese press this year, including a landmark report on CCTV, China's national television network.

China's fascination with the currency upstart resulted in an estimated 40,000 client downloads a day and a burgeoning acceptance rate from online retailers down to physical traders standing in Tiananmen Square.

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A very Senate hearing and bitcoin-price centric roundup today but it’s what the world is talking about right now and I am not sure that will change much this week!

BitBuzz Daily: A look at what's going on in the world of bitcoin

Well, it's a new start to the week (in Australia at least) and over the weekend Bitcoin hit and passed a landmark $500 on Mt.Gox. It has certainly been a bumpy road for bitcoin in terms of volatility yet it has shown surprising resilience to some of its most challenging times, such as the bump in April and the closure of the Silk Road. We thought we'd start with sharing this piece by Jon Southurst on CoinDesk looking at that journey over the past 12 months and its recent meteoric rise in value

Those bitcoins that made you gasp at $300 just a couple of weeks ago? They were a bargain — the value of 1 BTC has now passed $500.

Prices hit this record and landmark figure at 11.50am GMT on 17 November, and at the time of writing were trading at $503.10 on Mt. Gox.

That means: if you bought a stash of bitcoins at their absolute highest peak price of $266* in April 2013 and then felt nauseous as the price plunged to $65 the same week, you have now almost doubled your investment. Provided you didn’t cut your losses and sell prematurely, that is.

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Following on from that, Jordan Wathen on the Motley Fool asks 'Is Bitcoin Really Going to $1million?' Well, given the history and the figures, that might not be as implausible as it sounds. Here's his take:

If I'd once told you intangible coins would be the biggest gainers in 2013, you'd call me nuts.

But as we head toward 2014, Bitcoin has already put up 3,311% returns. In the midst of a bull market in Bitcoin, one headline reads "Why Bitcoin is Going to $1 Million."

A bit of reality

Even after rocketing to $450 per Bitcoin, the total market size is still under $5.5 billion. That's a tiny sum, smaller than the valuation of 969 public companies, and about the amount the government debt grew each day in 2009.

In the past 30 days, average volume at one leading exchange, Bitstamp, has been about $7 million. So it doesn't take much to swing the market.

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It will be interesting to see where the the bitcoin price is at the end of this week. We mentioned that the US Senate Committee on Homeland Security is holding hearings about digital currency from Monday and we will be keeping you up to date on any interesting news that comes out of that. The latest being that it looks as if some US agencies will be telling the Committee that bitcoin could offer "legitimate benefits" as Max Raskin reports on Bloomberg. It will be interesting to see how the markets respond to any claims or statements that come out of these hearings...

The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency.

Representatives from the agencies told the U.S. Senate Committee on Homeland Security and Governmental Affairs ahead of a hearing tomorrow that the digital money offers benefits and carries risks, like any other online-payment system, according to letters they released before the meeting.

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And one of the big selling points of bitcoin for many people is it is inflation-proof. One of the arguments against quantitative easing (QE) is the inflation it would cause with the extra credit entering the system. However, the hyperinflation some people feared in the US has not actually happened. If you want an easy explanation of what causes inflation - listen to this interview with Jim Puplava of  PFS Group, broadcast on Financial Sense. If you want a more in depth look into why hyperinflation has not materialised then also take a listen.

http://www.financialsensenewshour.com/broadcast/fsn2013-1116-2.mp3

And that's your lot from today's roundup. We have some great features in the pipeline so keep checking our features page for those and our daily analysis will be posted on our blog and on Twitter!

BitBuzz Daily: A look at all things new and interesting in bitcoin

We always look out for anything published by The Genesis Block as they specialise in deeply insightful, well structured and written articles.  Their latest offering is no exception, which homes in on the maturing infrastructure of the bitcoin economy. Well worth a read...

Familiar Price Gains, updated infrastructure: A look at the Bitcoin economy (Part II)

By Jonathan Stacke

     As initially discussed in Part 1 of this series, bitcoin’s exchange rate has garnered significant attention for its recent climb, but far less visible is the dramatic growth in the infrastructure underlying bitcoin economy itself. In continuing with the theme of Part 1, this report will look at the economic evolution behind bitcoin’s growth since the last time exchange rates climbed this dramatically.
     In the beginning of this year, the notion of a business accepting payments in bitcoin – particularly at a physical store – was relatively unheard of. When bar/nightclub EVR (co-owned by Charlie Shrem of BitInstant) in New York began accepting bitcoin in April it made national headlines as a unique phenomenon. Since then, thousands of internet and brick-and-mortar merchants have adopted the cheaper, faster payment technology. Coinmap.org and usebitcoins.info tracks physical locations that accept bitcoin payment, with the total figure approaching 1,000 listed merchant locations.

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On the subject of Infrastructure, Bitcoin Black Friday is an awesome community initiative to boost bitcoin commerce going into the holiday season.  The idea is to provide sponsor merchants with a hub through which to advertise their products to bitcoin shoppers, hunting for bargains in the run-up to Christmas.  A fundamental component of all great ideas is that everyone wins and Bitcoin Black Friday encapsulates this concept perfectly.

Our next selection isn't quite so sunny as it depicts the challenges that US based bitcoin businesses face in securing banking facilities. While bitcoin businesses focus on promotion of the bitcoin economy, the infrastructure that TGB write of at the top of this edition is not yet sufficiently robust to negate the requirement for companies to operate without conventional bank accounts and for those merchants trying to carve a niche at the intersection of fiat currency and bitcoin, conventional banking facilities are a pre-requisite.  This insightful piece by John Matonis for Coindesk uncovers the impact that Federal indecision is having on the bitcoin economy in the US...

     Expertise and dominance in a particular industry sector doesn't come about by decree. It is achieved over years through repeated practice and creative experimentation. During the first three-and-a-half years of bitcoin’s development from 2009 to 2012, a large portion of that technological experimentation had been occurring in the US with multiple bitcoin trading exchanges and bitcoin-related businesses.
     Now, there exists only one functioning exchange in the US with diminishing volume compared to its competitors. The Atlanta-based exchange, Camp BX, had reached such a low point of average daily trading volume that it was removed from the CoinDesk BPI earlier this month. Although the future may not look bright for the US jurisdiction, it does not appear to be a conscious decision on the part of legislators and regulators. The evolving body of law known broadly as “digital currency law” applies at both the federal level and the state level creating overlapping licensing regimes and a considerable compliance investment for new start-ups.

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Fortunately life isn't all bad for American bitcoiners, as a California based Day Trip organizer has just started accepting bitcoin. Sactrips offer landmark life experiences both in and outside the USA.  Their latest destination is Jamaica but they also organize trips to Seattle and Ireland.  Sounds nice... 

 

Finally, she is a wife, a mum and a huge bitcoin advocate. The former two nouns might not naturally lead you to think of the third and this is exactly why Pua Pyland, aka Mrs. P or The Bitcoin Wife is trying to get the word out about 'The Strength No one is Talking About' in bitcoin circles: women.

Her presentation at the Austin Mini Conference, can be viewed below.  It's a thought provoking watch and a great way to start your Sunday. Enjoy...!

Or watch it on Youtube