BitBuzz Daily: A roundup of bitcoin news from around the web

Our look at some of the most interesting articles and comments relating to digital currency around today.

There's something to be said for the phrase: when China sneezes, the world catches a cold. As with most things these days, when China takes an interest, the world indeed feels the impact, and bitcoin is no exception. Jessica Roy at Time Business wrote about the new world leader in bitcoin trading platforms - BTC China's - influence in bitcoin's recent price surge. Likewise, this piece by Richard Boase on Coin Desk attributes much of the recent rally to Chinese traders.

Chinese bitcoin exchange BTC China hit its all-time high at the weekend, trading bitcoin at ¥1,978 each.

The record surpasses the previous Chinese high of ¥1,944 back in April this year, which, although Western media generally quotes the Mt. Gox high of $265, was actually equivalent to approximately $308.

It seems the Chinese are willing to pay premium prices for their bitcoins, as exemplified by this recent breakout, with reports that much of the recent surge in the value of bitcoin can be attributed to the enthusiasm of Chinese traders.

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China also gets a mention in this piece by Jonathan Stacke on the Genesis Block, which explains the various factors associated with bitcoin's recent rally to above $300. What is interesting in this piece is that it looks at the many areas affecting the bitcoin economy right now, not just trading volumes. The shift in attitude towards bitcoin as the currency starts to gain traction in the wider population is also interesting. 

The recent climb in bitcoin’s exchange rate has driven heavy attention from media and investors. As the second time this has occurred at such scale in 2013 alone, the broader conversation has made a subtle but important shift from simply trying to understand what bitcoin is and where it came from, to what is happening in the space and what the future might hold. Recent growth has been driven not just by speculators, but also entrepreneurs, venture capitalists and bitcoin users that have contributed to remarkable change in the digital currency economy since the last time these types of exchange rate gains were made.

As bitcoin’s mainstream popularity grows, the tone with which it is addressed has largely begun to shift. For example, in 2011, some of the earliest comments about the industry from federal legislators arose when US Senator Charles Schumer referred to bitcoin as “an online form of money laundering used to disguise the source of money.” A more recent letter from US Senators urging a discussion around bitcoin noted,

“the federal government must make sure that potential threats and risks are dealt with swiftly; however, we must also ensure that rash or uninformed actions don’t stifle a potentially valuable technology.”

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A few weeks ago, I wrote a feature about the trend in mainstream news to give a negative slant to bitcoin in any of its coverage. (Ironically this was the day before the SIlk Road bust.) This denigration of bitcoin is also noted in this piece on RT by Patrick L Young. However, he goes on to say that despite the doomsayers and scaremongering, bitcoin's popularity is on the up and bit by bit, entering the mainstream consciousness.

At first glance Bitcoin appears under siege. Most days another scare story emerges. Yet behind the headlines, cryptocurrency is gaining ground.

Nothing new develops without glitches. Some poor souls in Australia are lighter of (virtual) wallet due to a new era banking heist (the digital equivalent of raiding safe deposit boxes while the bank was shut). Meanwhile some academics tried to suggest there was a huge flaw making Bitcoin innately unstable. That’s just a couple of the key stories in the media this past week… 

...while Bitcoin itself reached record highs.

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The surge in bitcoin price and its growing acceptance has not escaped those who are set to lose out if bitcoin takes off in a meaningful way, namely the credit card providers and fiat payment processors. Pete Rizzo on Coin Desk has written this excellent piece demonstrating how fiat is fighting back.

This much should be clear: bitcoin is the radical payments tool of the times, a concept that lays bare the inadequacies of both traditional payment options and the major financial institutions that have stayed short-sighted in an age where smartphones, the Internet and the global economy necessitate innovation.

Even if bitcoin were to be stamped out, it’s safe to say that at least some of its essential properties would be subverted and integrated into the traditional financial system.

Today’s financial institutions are demonstrating that they are looking to harness new technologies to eliminate friction in the marketplace. From the trenches of the alternative currency movement, it can be difficult to see the larger innovations that are being set in motion in the traditional financial world, and how the marketplace is breaking many long-held rules to encourage new ideas.

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And finally, what is it about lists that get people talking? The 100 Richest People On Earth, the Top 100 Films Of All Time, and today, the Top 49 Most Influential Men of 2013. Any guesses who has made the list? Well, a certain Mr. Nakamoto might be in there somewhere...

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Will the real Satoshi please stand up? The mystery of bitcoin's creator: Interview with Mike Hearn

There’s an enduring mystery in the bitcoin world; it has nothing to do with mining algorithms or hidden features within the bitcoin coding; it is: who is Satoshi Nakamoto? 

The enigmatic character who created the original Bitcoin software in 2008 is the subject of many theories as to who he is and where he is from. Depending on what you read, or whom you listen to, Satoshi Nakamoto is a pseudonym for one person or even a group of people, and theories as to his location or place of origin range from Japan, to Britain to Finland.

On the P2P (peer to peer alternatives) site in February 2009, Satoshi Nakamoto introduced bitcoin on his profile page, which states he is a 38-year-old male in Japan.

Prime suspects as to the hidden identity of Satoshi have included OpenCoin founder and creator of Mt.Gox, Jed McCaleb, and  Finnish compuer scientist, Martti Malmi. Malmi states here that he contacted Satoshi Nakamoto after he came up with the idea of a decentralised Internet currency. He was also the first person to make a Bitcoin to US dollar transaction.

According to the bitcoin Wikipedia entry, an investigation by Fast Company links three men, Neal King, Vladimir Oksman and Charles Bry, who in 2008 filed an encryption patent containing similar encryption technologies to bitcoin and the fact the bitcoin.org domain name was registered 72 hours later. Similar phrases were also said to have appeared in the patent and the 2008 bitcoin white paper.

Shinichi Mochizuki has been another name thrown into the ring. The Japanese mathematician was born in 1969, making him similar in age to how old Satoshi claimed to be and having lived and studied in the US also has fluency in English. On that point, it is also thought Satoshi could be British due to some of the language and formatting of his written work.

Even Paco Ahlgren has been mentioned and although much less widely circulated, his name has still cropped up in forums. The author and financial analyst has written articles extolling the virtues of bitcoin: http://www.pacoahlgren.com/pacoahlgren/bitcoin-cannot-fail/

So, although we may never find out the real identity, one man who probably has a better insight into Satoshi Nakamoto than most, is Google software developer and author of bitcoinj, Mike Hearn, who I spoke to recently.

He first heard about bitcoin back in 2009 when it was just a few months old and there were no forums or communities in which to get involved. Interested in how it worked and with no one to transact with, he emailed Satoshi Nakamoto. “I asked him some questions about how it worked and stuff I didn’t understand and he sent me some coins and I sent them back,” Hearn says, adding, laughing, “I should probably have kept them.”

With nothing much happening in the early days, Hearn “lost interest for a bit” but came back to bitcoin in September 2010, realising a small community had formed and bitcoins now had a price, albeit of only around 10-20 cents. He started to develop on it himself at that point and says, “Throughout this time I emailed back and forth with Satoshi quite a lot about technical topics.”

But when asked about who Satoshi is or whether Satoshi is one individual or possibly a group, Hearn seems adamant that Satoshi is just one man. “I don’t know where this idea that it was a group of people came from. Some people seem to say, ‘this is really clever therefore it must have been a group of people,’ but that doesn’t really hold. I don’t think there is any evidence that it was more than one guy. For one thing, the way the code was written implies it was the work of one guy.”

With Satoshi Nakamoto having stepped away publicly from bitcoin, I asked Hearn what he thought he would be making of how quickly bitcoin is growing and in particular, what he might think of how the pace of bitcoin mining is evolving. “I don’t think anyone really understood the speed at which things would go,” he says. “[Satoshi] talked about maybe one day there would be industrial consortiums with farms of GPUs. The way he phrased it was ‘in the distant future, this might happen.’” However, he seems to think Satoshi would have liked to delay that moment to allow as many people as possible to take part with their regular computers. “Satoshi did anticipate that mining hardware would get better but it was remote, theoretical possibility. The whole idea that it would take off sounded so ridiculous back then.”

Hearn believes it is not only the speed at which hardware is changing but also how fast it is entering public consciousness that would surprise Satoshi. When people were encouraging bitcoin to be used for projects such as Wikileaks, Hearn says Satoshi believed it was “too early” and bitcoin was “too small”. That argument certainly couldn’t be used today. 

Whoever Satoshi is, Hearn thinks he would have liked him. He ends by telling me, “I think I would have liked him if I’d met him. I even tried to recruit him to work at Google once.”

For a little more from this interview, a short clip is available here. Please bear in mind this is not a quality, audio recording but hopefully you find might find it interesting.  

More from this interview on decentralised exchange and alternative currencies will be featured in another post soon!

By Louise @ Bitscan