Kriptovalute

[Meho Krljic]

Nažalost, nisam na vreme pokrenuo topik sa ovom tematikom pa je većina dosadašnje priče o Bitcoinu na temi World Today:

 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg500842.html#msg500842
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg503677.html#msg503677
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg531831.html#msg531831
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg533529.html#msg533529
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg534964.html#msg534964
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg535048.html#msg535048
 
http://www.znaksagite.com/diskusije/index.php/topic,9198.msg535478.html#msg535478
 

 
Eto, nek to bude neko podsećanje na ono što smo pričali o ovoj temi (sigurno ima još al ko da sve traži...), a bitno je podsetiti se zbog ove vesti:

 
Exclusive: IBM looking at adopting bitcoin technology for major currencies
 

 
(Reuters) - International Business Machines Corp is considering adopting the underlying technology behind bitcoin, known as the "blockchain," to create a digital cash and payment system for major currencies, according to a person familiar with the matter.
 The objective is to allow people to transfer cash or make payments instantaneously using this technology without a bank or clearing party involved, saving on transaction costs, the person said. The transactions would be in an open ledger of a specific country's currency such as the dollar or euro, said the source,  who declined to be identified because of a lack of authorization to discuss the project in public.The blockchain - a ledger, or list, of all of a digital currency's transactions - is viewed as bitcoin's main technological innovation, allowing users to make payments anonymously, instantly, and without government regulation. Rather than stored on a separate server and controlled by an individual, company, or bank, the ledger is open and accessible to all participants in the bitcoin network. The proposed digital currency system would work in a similar way."When somebody wants to transact in the system, instead of you trying to acquire a bitcoin, you simply say, here are some U.S. dollars," the source said. "It's sort of a bitcoin but without the bitcoin."IBM is one of a number of tech companies looking to expand the use of the blockchain technology beyond bitcoin, the digital currency launched six years ago that has spurred a following among investors and tech enthusiasts.The company has been in informal discussions about a blockchain-tied cash system with a number of central banks, including the U.S. Federal Reserve, the source said. If central banks approve the concept, IBM will build the secure and scalable infrastructure for the project.IBM media relations office did not respond to Reuters emails about this story and the Fed declined to comment. However, there are signs that central banks are already thinking about the innovations that could arise through digital currency systems. The Bank of England, in a report in September 2014, described the blockchain's open ledger as a "significant innovation" that could transform the financial system more generally. Instead of having ledgers maintained by banks that act as a record of an individual's transactions, this kind of open ledger would be viewable by everyone using the system, and would use an agreed-upon process for entering transactions into the system.The project is still in the early stages and constantly evolving, the source said. It is also unclear how concerns about money-laundering and criminal activities that have hamstrung bitcoin. Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said. "These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."According to the plans, the digital currency could be linked to a person's bank account, possibly using a wallet software that would integrate that account with the proposed digital currency ledger. "We are at a tipping point right now. It's making a lot more sense for some type of digital cash in the system, that not only saves our government money, but also is a lot more convenient and secure for individuals to use," the source said.  (Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gaffen and Tomasz Janowski)
 

[Meho Krljic]

Nije ovo signal da je sam Bitcoin u problemu, ali jeste nekako smešan naslov teksta:



Bitcoin Foundation said to be out of cash

The Bitcoin Foundation, an organization that promotes development of bitcoin, is “effectively bankrupt” and has shed most of its staff, a member of the foundation’s board of directors has said.     

Two other board members, however, said the foundation was not bankrupt, though in need of some kind of restructuring.
The outburst by Olivier Janssens, who was elected to the board last month, is the latest in a series of controversies surrounding the foundation, which was founded in the U.S. in 2012 as a nonprofit entity.


“The foundation has almost no money left, and just fired 90 percent of its people. Some will stay on as volunteers,” Janssens wrote in a blog post on the foundation’s forum.
“The Bitcoin Foundation hates transparency,” he added. “If they would have been transparent then everyone would know there is no money left.”
Janssens attributed the foundation’s financial straits to two years of “ridiculous spending and poorly thought out decisions,” adding that the board has tried to remedy the situation by finding a new executive director. He called for the replacement of the entire board.
Described as a bitcoin millionaire, Janssens wrote that he will donate “several 100k” to a special trust fund aimed at supporting core development of the digital currency and supplemented by crowdfunding efforts.
The foundation did not immediately respond to a request for information about Janssens’ post. But Patrick Murck, its executive director, wrote in a response to Janssens’ post, “The foundation is not bankrupt, but a restructuring is needed. Olivier basically jumped in front of our announcements on that and our annual report on the 2014 finances to be released next week, and he spun it very very negative.”
While saying that “the money has basically run out,” board member Gavin Adresen wrote in another response that “The foundation isn’t bankrupt, but the board needs to decide whether the responsible thing to do is to continue the organization with a much smaller organization and vision or to dissolve it.”
The Bitcoin Foundation is no stranger to controversy. Among its founding members are Charlie Shrem, who pleaded guilty to transmitting money linked to the Silk Road online drugs site, and Mark Karpeles, who presided over the collapse of MtGox, once the world’s largest trading place for bitcoin.
In May 2014, a number of Bitcoin Foundation members quit in frustration over the organization’s direction and issues related to a board election.

[Meho Krljic]

Na MIT-u smatraju da Bitcoin ima probleme. Konkretno, Joi Ito je napisao opširan blog post obrazlažući šta su problemi bitcoina pre par meseci a sada ovaj šef medija laboratorije na MITu želi da ova univerzitetska institucija bude neka vrsta neutralne sile koja će pomoći oko razvijanja standarda za najpoznatiju svecku kriptovalutu.
 
Originalni blog post:
 
 Why Bitcoin is and isn't like the Internet
 

  In the post that follows I'm trying to develop what I see to be strong analogues to another crucial period/turning point in the history of technology, but like all such comparisons, the differences are as illuminating as the similarities. I'm still not sure how far I should be stretching the metaphors, but it feels like we might be able to learn a lot about the future of Bitcoin from the history of the Internet. This is my first post about Bitcoin and I'm really looking more for reactions and new ideas than trying to prove a point. Feedback and links to things I should read would be greatly appreciated.
I'm fundamentally an Internet person -- my real business life started around the dawn of the Internet and for most of my adult life, I've been involved in building layers and pieces of the Internet, from helping start the first commercial Internet service provider in Japan to investing in Twitter and helping bring it to Japan. I've also served on the boards of the Open Source Initiative, the Internet Corporation for Names and Numbers (ICANN), The Mozilla Foundation, Public Knowledge, Electronic Privacy Information Center (EPIC), and been the CEO of Creative Commons. Given my experiences in the early days of the net, it's possible that I'm biased and everything new looks like the Internet.
Having said that, I believe that there are many parallels between the Internet and Bitcoin and there are many lessons from the Internet that can help provide guidance in thinking about Bitcoin and its future, but there are also some important differences.
The similarity is that Bitcoin is a transportation infrastructure that is decentralized, efficient and based on an open protocol. Instead of transferring packets of data over a dynamic network in contrast to the circuits and leased lines that preceded the Internet, Bitcoin's protocol, the blockchain, allows trust to be established between mutually distrusting parties in an efficient and decentralized way. Although you could argue that the ledger is "centralized", it's created through mechanical decentralized consensus.
The Internet has a root -- in other words, just because you use the Internet Protocol doesn't mean that you're necessarily part of the Internet. To be part of THE Internet, you have to agree to the names and numbers protocol and root servers that are administered by ICANN and its consensus process. You can use the Internet Protocol and make your own network, using your own rules for names and numbers, but then you're just a network and not The Internet.
Similarly, you can use the blockchain protocol to create alternative bitcoins or alt.coins. This allows you to innovate and use many of the technological benefits of Bitcoin, but you are no longer technically interoperable with Bitcoin and do not benefit from the network effect or the trust that Bitcoin has.
Also like the beginning of the Internet, there are competing ideas at each of the levels. AOL created a dialup network and really helped to popularize email. It eventually dumped its dialup network, its core business, but survived as an Internet service. Many people still have AOL email accounts.
With crypto-currencies, there are coins that don't connect to the "genesis block" of Bitcoin -- alt.coins that use fundamentally the same technology. There are alt.coins that use slightly different protocols and some that are fundamentally different.
On top of the coin layer, there are various services such as wallets, exchanges, service providers with varying levels of vertical integration -- some agnostic to whichever cryptocurrency ends up "winning" and some tightly linked. There are technologies and services being built on top of the infrastructure that use the network for fundamentally different things than transacting units of value, just as voice over IP used the same network in a very different way.
In the early days of the Internet, most online services were a combination of dialup and x.25 a competing packet switching protocol developed by Comité Consultatif International Téléphonique et Télégraphique, (CCITT), the predecessor to the International Telecom Union (ITU), a standards body that hangs off of the United Nations. Many services like The Source or CompuServe used x.25 before they started offering their services over the Internet.
I believe the first killer app for the Internet was email. On most of the early online services, you could only send email to other people on the same service. When Internet email came to these services, suddenly you could send email to anyone. This was quite amazing and notably, email is still one of the most important applications on the Internet.
As the Internet proliferated, the TCP/IP stack, free software that anyone could download for free and install on their computer to connect it to the Internet, was further developed and deployed. This allowed applications that ran on your computer to use the Internet to talk to other programs running on other computers. This created the machine-to-machine network. It was no longer just about typing text into a terminal window. The file transfer protocol (FTP) and later Gopher, a text-based browsing and downloading service popular before the web was invented, allowed you to download music and images and create a world wide web of content. Eventually, permissionless innovation on top of this open architecture gave birth to the World Wide Web, Napster, Amazon, eBay, Google and Skype.
I remember twenty years ago, giving a talk to advertising agencies, media companies and banks explaining how important and disruptive the Internet would be. Back then, there were satellite photos of the earth and a webcam pointing at a coffee pot on the Internet. Most people didn't have the imagination to see how the Internet would fundamentally disrupt commerce and media, because Amazon, eBay and Google hadn't been invented -- just email and Usenet-news. No one in these big companies believed that they had to learn anything about the Internet or that the Internet would affect their business -- I mostly got blank stares or snores.
Similarly, I believe that Bitcoin is the first "killer app" of The Blockchain as email was the killer app for the beginning of the Internet. We are in the process of inventing eBay, Amazon and Google. My hunch is that The Blockchain will be to banking, law and accountancy as The Internet was to media, commerce and advertising. It will lower costs, disintermediate many layers of business and reduce friction. As we know, one person's friction is another person's revenue.
One of the main things we worked on when I was on the board of ICANN was trying to keep the Internet from forking. There were many organizations that didn't agree with ICANN's policies or didn't like the US's excessive influence over the Internet. Our job was to listen to everyone and create an inclusive and consensus-based process so that people felt that the benefits of the network effect outweighed the energy and cost of dealing with this process. In general we succeeded. It helped that almost all of the founders and key technical minds and technical standards organizations that designed and ran the Internet worked together with ICANN. This interface between the policy makers and the technologists -- however painful -- was viewed as something that wasn't great but worked better than any of the other alternatives.
One question is whether there is an ICANN equivalent needed for Bitcoin. Is Bitcoin email and The Blockchain TCP/IP?
One argument about why it might not be the same is that ICANN fundamentally had to deal with the centralization caused by the name space problem created by domain names. Domain names are essential for the way we think the Internet works and you need a standards body to deal with the conflicts. The solutions to Bitcoin's centralization problems will look nothing like a domain name system (DNS), because although there is currently centralization in the form of mining pools and core development, the protocol is fundamentally designed to need decentralization to function at all. You could argue that the Internet requires a degree of decentralization, but it has so far survived its relationship with ICANN.
One other important function that ICANN provides is a way to discuss changes to the core technology. It also coordinates the policy conversation between the various stakeholders: the technology people, the users, business and governments. The registrars and registries were the main stakeholders since they ran the "business" that feeds ICANN and provides a lot of the infrastructure together with the ISPs.
For Bitcoin it's the miners -- the people and companies that do the computation required to secure the network by producing the cryptographically secure blockchain at the core of Bitcoin -- all in exchange for bitcoin rewards from the network itself. Any technical changes that the developers want to make to Bitcoin will not be adopted unless the miners adopt them, and the developers and the miners have different incentives. It's possible that the miners have some similarities to the registrars and registries, but they are fundamentally different in that they are not customer-facing and don't really care what you think.
As with ICANN, the users do matter and are key for the network effect value of Bitcoin, but without the miners the engine doesn't run. The miners aren't as easy to identify as the registrars and registries and it's unclear how the dynamics of incentives for the miners will develop with the value of bitcoin fluctuating, the difficulty of mining increasing and the transaction fees being market driven. It's possible that they will develop into a community with a user interface and a governance function, but they are mostly hidden and independent for a variety of reasons that are unlikely to change for now. Having said that, one of the first publicly traded Bitcoin companies is a miner.
The core developers are different as well. The founders of the Internet may have been slightly hippy-like, but they were mostly government-funded and fairly government-friendly. Cutting a deal with the Department of Commerce seemed like a pretty good idea to them at the time.
The core Bitcoin developers are cypherpunks who do what they do because they don't trust governments or the global banking system and are trying to build a distributed and autonomous system, one that is impervious to regulation and meddling by anyone at any time. At some level, Bitcoin was designed to not care what regulators think. The miners have an economic interest in Bitcoin having value, since that's what they're paid in, and they care about scale and the network effect, but the miners probably don't care if it's Bitcoin or an alt.coin that ends up winning, as long as their investments in hardware and plant don't disappear before they make a return on their investment.
Regulators clearly have an incentive to influence the rules of the network, but it's unclear whether the core developers really need to care what the regulators think. Having said that, without some sort of buy-in by regulators, it's unlikely to scale or have the mainstream impact that the Internet did.
Very much like the early days of the Internet, when we saw the power of Internet email but hadn't yet invented the Web, we are just imagining the potential uses of concepts such as crypto-equity and smart contracts ... to name just a few.
I believe it's possible that over-regulation could cause Bitcoin or the blockchain to never achieve its full potential and remain a feature of the side-economy, much in the same way that the Tor anonymizing system is extremely valuable to people who really need privacy but not really used by "normal people"... yet.
What helped make the Internet successful was the lack of regulation and the generally inclusive and permissionless nature of innovation. This was driven in large part by free and open source software and the venture capital community. The question I have is whether the fact that we're now talking about "money" and not "content," and that we seem to be innovating at a much higher speed (venture capital investment in Bitcoin is outpacing early Internet investments), the dialog in popular media is growing, and governments are very interested in Bitcoin makes this a completely different game. I think ideas like the five-year moratorium on Bitcoin regulation proposed by US Representative Steve Stockman are a good idea. We really have no idea what this whole thing is going to turn into, so a focus on dialog versus regulation is key.
I also believe that layer unbundling and innovation at each layer, assuming that the other layers will sort themselves out, is a good idea. In other words, exchanges and wallets that are coin-agnostic or experiments with colored coins, side chains and other innovations that are "unbundled" as much as possible allow the learnings and the systems created to survive regardless of exactly how the architecture turns out.
It feels a lot to me like when we were arguing over ethernet and token ring -- for the average user, it doesn't really matter which we end up with as long as in the end it's all interoperable. What's different is that there is more at stake and it's moving really fast, so the shape of failure and the cost of failure might be much more severe than when we were trying to figure out the Internet and a lot more people are watching.
   

 
Inicijativa vezana za MIT:
 
 Joi Ito Wants MIT to Be Neutral Place to Help Develop Bitcoin Standards              
 

Bitcoins have an uncertain path forward with the seeming implosion of the Bitcoin Foundation last weekend. But PayPal merchants and even presidential candidate Rand Paul have started accepting them as payment. That means the race is on to establish technical standards for the virtual currency—and it looks like MIT could end up playing a role.
 
Joi Ito, famed director of the MIT Media Lab and a student of Bitcoins (see this long blog post he wrote in January comparing Bitcoins to the Internet), is close to unveiling a plan for the Institute to become what he calls an independent, neutral home to help with Bitcoin standards development. He is talking to some big MIT names to help with the plan, including cryptographer Ron Rivest of RSA Security fame and economist Simon Johnson, and says he expects to make a public announcement about the effort in the near future.
 
 
I met earlier this week with Ito, who has directed the Media Lab since the fall of 2011, for a short but wide-ranging interview. I plan to post more of our conversation next week, but one of the most interesting elements had to do with Bitcoins and alternative currencies. Ito did not reveal his plans in detail, but did share some core thoughts. He says the only other public mention of the idea came in a talk he gave at a Bitcoin Expo at MIT in March.
 
Jerry Brito, executive director of the non-profit Coin Center, a research and advocacy center focused on cryptocurrencies, tweeted at the time:
 
At #MITBTC15 @Joi proposes academic takeover of core development and governance? Semi-announces an MIT-led org.
 
Ito told me he got further stimulus for the idea from the fresh turmoil at the Bitcoin Foundation sparked by an April 4 forum post from board member Olivier Janssens. In the post, Janssens wrote that the non-profit foundation had been undermined by “2 years of ridiculous spending and poorly thought out decisions” and was “effectively bankrupt.”
 
As described by the International Business Times, the Bitcoin Foundation doesn’t oversee Bitcoins but is “the closest thing to a public face that the community has” and has been leading efforts to develop standards for the cryptocurrency and spur its adoption.
 
Ito thinks MIT might be a better venue to help develop those standards, or at least advance the discussion. He says the Janssens post pointed to a glaring hole in Bitcoin development—and that is that the protocols need to be developed in a neutral place, such as what happened with Internet standards.
 
“With Bitcoin, it was sort of on the Internet, but the financial interests got very involved before there was a lot of standards setting,” Ito says. “It’s going at hyper-speed, much faster than any other standards body. And you have the added problem that there’s a lot of money involved. Even the developers have lots of Bitcoin, right? What I’d like to do as a contribution from MIT—and this is one of my first forays into going Institute-wide from the beginning, by bringing Simon Johnson for the economics and Ron Rivest for the crypto—is to try to come up with a non-commercial, neutral place for academics to talk about Bitcoin.”
 
The Media Lab director says he has been moving fast since Janssens’s post. “I think within a couple of weeks we’ll be announcing something which will be a little bit more substantive. And I’m not pushing it, but I’m offering MIT as a neutral academic home for some of the conversations and the technical coordination. Which I think will give a lot more stability to Bitcoin, which right now is a little bit fragile.”
 
Ito stressed in our conversation and in a follow-up e-mail that he is not trying to grab control of Bitcoin efforts or be an overlord of sorts—rather, he is trying to “make ‘space’ for technical and standards conversations.”
 
“What I’m really trying to do is offer us as one of the neutral places to do this,” he says. “And I do think academia plays a role.”
 

[Meho Krljic]

Whoa.



Bitcoin ‘Should Be Exempted from VAT’ Says European Court of Justice Official

The most popular Swedish news site, Dn.se, has reported the European Court of Justice as stating, “Bitcoin is a means of payment and that the exchange should therefore be exempted VAT obligations.”
Three years ago, Swedish software developer David Hedqvist and moderator of Bitcoin.se asked the European Union if Bitcoin transactions are exempt from VAT. According to the findings of the court:
 

“Bitcoins also constitute a currency. Their ownership has no other point other than the ability to use them again as currency at some future point. Therefore they are to be treated just like legal currencies as far as VAT is concerned.”
 

However, the Swedish Tax Agency argued against the Board of EU directives, and said that they have mistakenly interpreted the matter. The Agency appealed to the Supreme Administrative Court and urged it to proceed with a preliminary ruling, the final determination in law by EU courts that can be initiated by any EU member state.
A legal expert at the Swedish Tax Agency announced, "We disagreed with the Board's reasoning. Then we thought it was also important to get a clear understanding about Bitcoin and VAT.”
Due to the Swedish Tax Agency’s actions, Hedqvist took the matter into his own hands and declared arguments against them. For this, Hedqvist is working with Stockholm’s most prestigious corporate law firms and all of his costs are covered by companies in Bitcoinbranschen, because the companies believe that the tax exemption decision would greatly benefit them.
Hedqvist explained:
 

“It is important for them because it applies to their commission as shifting business to be subject to VAT. It is also important for bitcoin from a broader perspective, if there is to be equated with other currencies. It is also important that the new technology is not stopped by laws and regulations that are lagging behind.”


The General Directorate of Taxes (DGT)

announced in April that Bitcoin is exempt from value-added tax (VAT) in Spain, United Kingdom and Germany. The DGT stated that Bitcoin is considered as a medium of payment or a financial instrument, and thus is classified as a financial service rather than a simple good or commodity.
Paragraph (h) of article 20.18 of the VAT Act states, “Transactions regarding transfers, money orders, check, promissory notes, bills of exchange, debit or credit cards and other payment orders."
If the preliminary ruling becomes final, many European countries will be exempted from VAT, Including Germany, the United Kingdom, France, Finland and Belgium.
 

[Meho Krljic]

MtGox bitcoin chief Mark Karpeles arrested in Japan

Japanese police have arrested the CEO of the failed company MtGox, which was once the world's biggest exchange of the virtual currency, bitcoin.
Mark Karpeles, 30, is being held in connection with the loss of bitcoins worth $387m (£247m, €351m) last February.
He is suspected of having accessed the exchange's computer system to falsify data on its outstanding balance.
MtGox claimed it was caused by a bug but it later filed for bankruptcy.


Japan's Kyodo News said a lawyer acting on Mr Karpeles' behalf denied his client had done anything illegal.
Mr Karpeles, who was born in France, is suspected of benefiting to the tune of $1m (£640,000), the agency said.
In March 2014, a month after filing for bankruptcy, MtGox said it had found 200,000 lost bitcoins.
The firm said it found the bitcoins - worth around $116m - in an old digital wallet from 2011.
That brings the total number of bitcoins the firm lost down to 650,000 from 850,000.
That total amounts to about 7% of all the bitcoins in existence.
Bitcoin is a virtual currency built around a complicated cryptographic protocol and a global network of computers that oversees and verifies which coins have been spent by whom.

[Meho Krljic]

Whoa.



Bitcoin ‘Should Be Exempted from VAT’ Says European Court of Justice Official

A sada:
 
 EU rules Bitcoin is a currency, exchanges are VAT-exempt
 

The European Union’s Court of Justice (ECJ) has today ruled that Bitcoin is a currency, detailing exchanges that transfer traditional currencies into the crypto-coins for a fee are to be exempt from consumption taxes.
 
Under the EU rule against value added taxes (VAT) on transfers of “currency, bank notes and coins used as legal tender,” the new call presents an important boost for Bitcoin, erasing related costs for buying and using the virtual funds in Europe – one of the world’s leading trading zones.
 
Today’s decision concludes a long-standing discord in Europe over how best to regulate Bitcoin. The UK’s tax authorities took the position that it is a currency, while other countries, including Sweden and Germany, believe that Bitcoin is a commodity and transfers should therefore be subject to sales taxes. Poland levied a 23% VAT on all exchanges – maintaining that Bitcoin is an exchangeable product, not a currency.
 
The current case came forward in response to a request from Bitcoin enthusiast David Hedqvist, who had approached Swedish tax authorities for a decision on whether or not that the exchange of bitcoins into Swedish Krona, and vice versa, would be exempt from VAT.
 
Although the court ruling is no surprise – following a recommendation from ECJ’s top legal advisors in July – it is welcome news for the European Bitcoin industry which argued that taxes would hand over a competitive advantage to organisations outside of the region.
 
According to Richard Asquith, VP at tax compliance firm Avalara, the EU call is “the first step in securing Bitcoin’s future as a genuine alternative to national currencies.” However, others are disappointed with the ruling. Jens Bader, chief commercial officer at Secure Trading argued that the distinction should lie in the fact that “Bitcoin exchanges […] are not regulated and licensed financial services. While we call it a ‘currency’, in fact Bitcoin is a tradable commodity, like gold and silver.”
 

Bitcoin is Exempt from VAT, Rules European Court of Justice
 

Bitcoin transactions will be exempt from Value Added Tax (VAT), the European Court of Justice (ECJ) has ruled.
 
According to the Financial Times, the ECJ said that bitcoin transactions "are exempt from VAT under the provision concerning transactions relating to currency, bank notes and coins used as legal tender."
 
The ECJ's long-awaited ruling comes after its Advocate General Juliane Kokott urged the court to refrain from applying tax to bitcoin purchases and sales, in an opinion document published in July.
 
The European court first looked into bitcoin taxation in June last year after the Skatterverket – Sweden’s tax office – challenged a court decision that ruled bitcoin transactions in the country should be exempt from VAT, following a dispute with bitcoin forum operator Daniel Hedqvist.
 

[mac]

Jeste tradeable, ali nije commodity, jer jedino što možeš sa bitcoinom je da trguješ. Ne možeš da ga upotrebiš na neki drugi način, kao što bi mogao sa srebrom i zlatom. Ostaje problem sa manjkom regulacije, ali to se rešava uvođenjem iste, a ne pogrešnim klasifikovanjem.

[Meho Krljic]

VISA gets in on di ekšn.   Introducing the Shift Card
 

Today, we’re excited to introduce the first US-issued bitcoin debit card, the Shift Card. The Shift Card is a VISA debit card that currently allows Coinbase users in twenty-four states in the U.S. to spend bitcoin online and offline at over 38 million merchants worldwide.
 
Merchant adoption has come a long way over the past few years, but it’s still difficult for people to make regular purchases with bitcoin. Buying gas at a local gas station or groceries at a neighborhood grocery store with bitcoin has not been possible in most cities in the U.S. Thanks to Shift Payments, it’s now possible to use bitcoin to buy gas, groceries, and much more. With the Shift Card, you can now spend bitcoin anywhere in the world that VISA is accepted.
 

[Meho Krljic]

http://gizmodo.com/this-australian-says-he-and-his-dead-friend-invented-bi-1746958692

[Meho Krljic]

Amid Bitcoin Centralization Worries, Core Developers Start New Currency Called Decred

Some of Bitcoin's developers have left the project and are now starting their separate digital currency called Decred, promoting an open governance model, which they say is missing in Bitcoin.
Few people have an idea of how Bitcoin works, and even fewer know who the men and companies behind the cryptocurrency are, and who takes the decisions.
According to a press release put out by Company 0 LLC, formed by former Bitcoin developers, there are a few external entities that fund the actual development of the Bitcoin cryptocurrency, forming a power-group that is in sole command of the direction the currency takes.
 A conflict of interest in Bitcoin's decision-making structure These developers say that the group limits outside input in the currency's governance, cherry-picks only options favorable to their own interests, and generally ignores the developers' and community's best interests.
"The Bitcoin software is controlled by a small group of people who decide exclusively what can and cannot be changed," Jacob Yocom-Piatt, CEO at Company 0, says.
"This is in part due to a lack of mechanisms and pathways for funding development work directly from the community, and, as a result, Bitcoin development is funded by external entities that create conflicts of interest between the developers and the representative power of the community that uses Bitcoin," he also notes.
 A new currency is created, with an open governance model In an effort to address this issue, many of Bitcoin's developers have teamed up with the people behind the btcsuite project and are now creating their own new cryptocurrency called Decred.
This new cryptocurrency will be funded and managed by newly formed Company 0 LLC, but will also adopt a more decentralized community-based governance model.
The former Bitcoin developers recognize the success of their former project, and they aim to bring all the good parts of the Bitcoin project into their new Decred initiative, but they also want to fix what they're seeing as a problematic management structure.
More details are available on Decred's website.
 

[Meho Krljic]

Jedan od viđenijih Bitcoin developera tvrdi da stvari odlaze u qras:
 
 The resolution of the Bitcoin experiment

[Meho Krljic]

A onda, ima i ovo:


Cryptsy Bitcoin Trader Robbed, Blames Backdoor in the Code of a Wallet

  Cryptsy, a website for trading Bitcoin, Litecoin, and other smaller crypto-currencies, announced a security incident, accusing the developer of Lucky7Coin of stealing 13,000 Bitcoin and 300,000 Litecoin, which at today's rate stands more than $5.7 million / €5.2 million.
According to a blog post penned by the Cryptsy team, the incident took place on July 29, 2014, at 13:17:36, when funds started being moved from the company's wallets to new locations.
After an internal investigation, the Cryptsy team concluded that the "the developer of Lucky7Coin had placed an IRC backdoor into the code of [a] wallet, which allowed it to act as a sort of a Trojan, or command and control unit."
 Lucky7Coin developer contacted Cryptsy before the robbery Before this incident, on May 22, 2014, the Cryptsy team received an email from a man named Jack that informed the Bitcoin trader that he was taking over development of the Lucky7Coin (LK7) from its original creator.
Jack was begging the Bitcoin trader not to drop his newly-acquired crypto-currency and was informing the team of his good intentions, a new GitHub repository where the crypto-currency was being developed, along with a series of upgrades and changes he was planning.
"Some may ask why we didn’t report this to the authorities when this occurred, and the answer is that we just didn’t know what happened, didn’t want to cause panic, and were unsure who exactly we should be contacting," the Cryptsy team explained.
Irony has it that Cryptsy was in touch with Secret Service Agent Shaun Bridges on an unrelated matter just around the time of their own robbery. A few months later, Bridges was arrested and pleaded guilty to stealing a large sum of Bitcoin from the Silk Road investigation. He was later sentenced to 71 months in prison.
 The FBI didn't want to investigate As time went by after their investigation and with no other clues on hand, Cryptsy then contacted the Miami FBI office, who redirected them to I3C (Interoperable Informatics Infrastructure Consortium), who in turn never responded to their contact attempts.
Cryptsy managed to limp along for another year and a half thanks to a customer liabilities reserve of 10,000 Bitcoin ($3.7 million / €3.4 million).
Nevertheless, site users started experiencing withdrawal delays. Things turned bad on October 4, 2015, when an article on CoinFire (now 99Bitcoins) said the site was under a federal investigation, which Cryptsy's CEO quickly denied.
Most users believed the accusations that Cryptsy was trying to pull a bank-run, and rushed to pull out funds. By that time, most of the Bitcoin reserve was gone, and because Cryptsy didn't have any Litecoin reserve, the site's operators realized their impending doom and tried to delay the inevitable for as long as possible.
 Cryptsy puts out a reward for information about the robber With no help from authorities, Cryptsy is now appealing to the Bitcoin community for help. The site has put up a 1,000 Bitcoin reward for information about the perpetrator of this attack (tips at reward@cryptsy.com).
Additionally, the site is still pondering if to file for bankruptcy or to wait for someone to purchase their service and refund users.
A third scenario would be if the man behind the attack would "realize" it was all a mistake and return the stolen funds, the site promising no legal action against him.
While the stolen Bitcoin have never left the wallets to which they were assigned after being taken from Cryptsy's own wallet, the stolen Litecoin are almost surely gone for good. Two days after the attack was carried out, exactly 300,000 Litecoin were dumped on the BTC-e exchange, driving Litecoin price down from $9.5 to $2.
Until the situation is resolved, Cryptsy announced that trades and withdrawals are suspended indefinitely.
UPDATE: As SlashDot user Gravis Zero and Reddit user frankenmint pointed out, someone reported the IRC backdoor code on March 8, 2015.
 

Skoro kao da bi bilo udobnije da ove valute reguliše nekakav centralni autoritet sa političkim ovlašćenjima i resursima da to čini... nekakva, šta ja znam, nacionalna banka ili nešto slično. Šteta što to još nije izmišljeno.

[Meho Krljic]

Approximate Hardware Design and Bigger Bitcoin Mining Profits

[Meho Krljic]

Ko će prvi nego Japan...



Japan eyes treating bitcoins the same as real money

  TOKYO -- Japanese financial regulators have proposed handling virtual currencies as methods of payment equivalent to conventional currencies, a step that would strengthen consumer protection and spur growth in the virtual economy.
     The Financial Services Agency's legislative revisions would recognize bitcoins and other virtual currencies as fulfilling the functions of currency, it was learned Tuesday. They are now recognized as objects but are not treated on a par with their more established counterparts. The changes will be submitted during the current ordinary Diet session, with the goal of passage before the term ends.
     Under the FSA's proposed definition, virtual currencies must serve as a medium of exchange, meaning that they can be used to purchase goods and services. They must also be exchangeable for legal tender through purchases or trades with an unspecified partner. The FSA sees such a definition possibly helping to develop the financial technology sector.
     Exchanges and other institutions dealing in virtual currencies would have to register with the FSA, subjecting them to tighter oversight. The 2014 collapse of MtGox, then the world's largest bitcoin exchange, exposed consumer protection and other issues after customers lost funds on deposit. At the time, the government treated bitcoins as objects under no regulator's purview. Creating a legal framework will allow virtual currencies to spread more safely.
     Some 600 virtual currencies now exist around the world. Bitcoin had a market capitalization of more than 700 billion yen (currently $6.24 billion) last November. Hopes are high for the currencies as both investment targets and low-cost methods of payment. Monetary authorities worldwide are setting out to regulate the technology, starting with measures to prevent money laundering and other illicit activity.
(Nikkei)
 

[Meho Krljic]

 Bitcoin's nightmare scenario has come to pass
 

Over the last year and a half a number of prominent voices in the Bitcoin community have been warning that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. There was strong disagreement within the community, however, about how to solve this problem, or if the problem would ever materialize.
This week the dire predictions came to pass, as the network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out.
Bitcoin transactions are confirmed every time miners create a new block on the networks chain. Each block takes about ten minutes to mine, and can hold 1MB of information. At current volumes, there are more than 1MB worth of transactions asking to be confirmed in that time. To solve this bottleneck, many in the Bitcoin community have called for increasing the block size to 2MB.



This sounds simple, but has proven to be a highly contentious issue. A schism has developed between the team in charge of the original codebase for Bitcoin, known as Core, and a rival faction pushing its own version of that open source code with a block size increase added in, known as Classic.
The two sides are competing for users and miners
Anyone can cast a vote for their preferred code by running a Bitcoin node powered by that software. But the miners provide the computing power that will decide the winning code, kind of like delegates in a US presidential election. Most of the largest Chinese miners, representing the majority of mining resources, have thus far sided with Core.
Over the last few days both sides have accused the other of using increasingly aggressive and dirty tactics. The Core team says the network is congested because Classic advocates are spamming the network with low fee transactions miners can't be bothered to accept. Classic says that users who attempt to run nodes or mine blocks with their software have been hit with DDoS attacks that cripple their computer networks.
Many in the US Bitcoin community had hoped that hitting this crisis point — a network maxed out, transactions faltering — would result in closure, with miners quickly moving to adopt whichever chain proved more valuable to their economic interests. But so far the debate is dragging on without one side claiming a clear victory, leaving tens of thousands of consumer transactions stranded in limbo.
 

[Meho Krljic]

Rusi se ne zajebavaju. Za njih su bitkoini i ine kriptovalute piramidalne šeme i tako ih zakonski i tretiraju:

 Russian Bitcoin issuers will risk seven-year prison sentence
 

According to an unnamed governmental source speaking to Interfax [Russian], those found guilty of facilitating technological currencies will go to prison for up to four years, whilst managers and directors of institutions which issue them could be imprisoned for up to seven years.
The former version of the code’s amendment set the maximum penalty for these infractions at a year of corrective labour for individuals, or two years for those participating in a group effort.
The financial penalties have also been upgraded for Bitcoin-issuers – 500,000 roubles (about £5000 or $7,200), or a sum representing up to three years’ worth of salary (or income) for an individual or organisation. Managers will face fines of 1-2.5 million roubles, or income equivalent to 2-4 years.
A court ruling banning the practical use of Bitcoin as a purchasing currency in September of 2014 was followed four months later by the blockading of Bitcoin-related sites by Russia’s media regulator Roskomnadzor. The rationale on the ban on cryptocurrencies is that they facilitate money-laundering and other forms of digital and ‘real world’ criminal activity.
The country’s Prosecutor General set the tone for the blocks and legislations in a statement issued in early 2014. “The monitoring of the use of virtual currencies shows an increasing interest in them, including for the purpose of money laundering, profit obtained through illegal means… Russia’s official currency is the ruble. The introduction of other types of currencies and the issue of money surrogates are banned.”
Money substitutes within Russia are banned under Article 27 [Russian] of federal law.
The owning of bitcoins is not in itself illegal, and there is still a great deal of trading that can be done within Russia in bitcoins, but effectively it is the liquidation of those assets – their conversion into anything other than abstract digital entities – that is attracting the new and severe legal penalties.
 

[Meho Krljic]

 Bitcoin transactions could consume as much energy as Denmark by the year 2020
 
 
 
Ne prenosim tekst jer ima nekoliko grafikona.
 

[Father Jape]

Divan članak, ali svi članci Džona Lančestera su divni:

http://www.lrb.co.uk/v38/n08/john-lanchester/when-bitcoin-grows-up

[Father Jape]

http://www.economist.com/news/business-and-finance/21698060-craig-wright-reveals-himself-as-satoshi-nakamoto?fsrc=scn/tw/te/bl/ed/bitcoinscreator

[Meho Krljic]

Međutim:
 
 
 
 Bitcoin 'creator' backs out of Satoshi coin move 'proof' 
 

The Australian entrepreneur who has claimed to be the inventor of Bitcoin has reneged on a promise to present new "proof" to support his case.
Craig Wright had pledged to move some of the virtual currency from one of its early address blocks, an act many believe can only be done by the tech's creator.
This would have addressed complaints that earlier evidence he had published online was misleading.
Dr Wright said that he was "sorry".
"I believed that I could put years of anonymity and hiding behind me," he blogged.
"But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot.
"When the rumours began, my qualifications and character were attacked. When those allegations were proven false, new allegations have already begun. I know now that I am not strong enough for this."
Dr Wright's claims were first reported by the BBC, the Economist and GQ magazine on Monday.
 'Extraordinary proof' Dr Wright had earlier indicated that he would transfer some bitcoins from "block 9" by using a private key thought to be known only to Satoshi Nakamoto, a pseudonym used by the person or team that designed the crypto-currency.
Satoshi is known to have used the address in 2009 to send coins to a computer scientist.
Dr Wright had promised the "extraordinary proof" in light of a growing backlash against one of his blogs.
On Monday, he had posted what seemed to be evidence that he had Satoshi's key by describing a process that led to the creation of a "digital signature".
But soon after, this was attacked by security researchers who linked the signature to an earlier Satoshi Bitcoin transaction that could be found via a search engine.
Dr Wright subsequently wrote that he was the victim of "false allegations" and would prove his case by both moving the coins and by sharing "independently verifiable documents".
 Still convinced Dr Wright's claims had initially been bolstered by the fact that two senior members of the Bitcoin Foundation - an organisation set up to protect and promote the virtual currency - had said they were convinced he was indeed behind the technology.
Dr Wright had shown Gavin Andresen and Jon Matonis other evidence in private.
He apologised to the two men in his latest blog.
"I know that this weakness will cause great damage to those that have supported me, and particularly to Jon Matonis and Gavin Andresen," he wrote.
"I can only hope that their honour and credibility is not irreparably tainted by my actions. They were not deceived, but I know that the world will never believe that now. I can only say I'm sorry. And goodbye."
Mr Matonis has tweeted that there "won't be another Satoshi".
Image copyright Twitter
The BBC understands that this tweet signifies that Mr Matonis still believes Dr Wright is indeed Satoshi.
 'Chutzpah' "A lot more people in the Bitcoin community are going to be unconvinced of Dr Wright's claims than will believe he is Satoshi, based upon what's happened to date," commented Dr Garrick Hileman, an economic historian at the Cambridge Centre for Alternative Finance.
"But many of the doubters don't want to be convinced. Satoshi has been mythologised and if you pull back the curtain, you shatter a lot of people's fantasies.
"There are very credible people besides Gavin and Jon who still think he is Satoshi - people who are privy to other information and whose judgement I respect.
"But personally, I have more questions than answers at this point."
Security researcher Dan Kaminsky was more sceptical.
"I'm glad it's over," he said.
"I can't believe Wright's last scheme was to demand £5 be sent to the real Satoshi. I wouldn't call that courage but it's definitely chutzpah."
Dr Wright's website no longer contains his original blogs, but only his final message.
 
 

[Meho Krljic]

Creator of online money Liberty Reserve gets 20 years in prison

Before the virtual currency Bitcoin there was Liberty Reserve -- and its founder just got sentenced to 20 years in prison.  Arthur Budovsky, 42, ran an online digital money business out of Costa Rica called Liberty Reserve. The U.S. government contended that the whole thing was just a massive, $6 billion money laundering operation.
    On Friday, U.S. District Judge Denise L. Cote sentenced him to two decades in federal prison. She said Budovsky did not show "genuine remorse," according to the Department of Justice.
 For seven years starting in 2006, anyone could use Liberty Reserve's website to transfer money with little oversight. All the site required was someone's name, e-mail address, and birthday. Normally, banks have stricter standards to avoid funneling criminal funds.
 But that's exactly what Liberty Reserve turned into, according to federal agents. It became a favorite for stashing cash by credit card traffickers and identity thieves.
 At its height, according to a federal indictment, Liberty Reserve had more than 1 million customers worldwide, including 200,000 in the United States. It handled 12 million financial transactions a year.
 Liberty Reserve fell into the U.S. government's sights, because it ran such a huge operation without oversight. In the post-9/11 world, law enforcement was keen to keep track of every dollar to avoid it ending up funding terrorists.
 That's why the U.S. government used the Patriot Act to go after this payment processor. The U.S. Treasury Department labeled it a money laundering organization, and cut it off from the American financial system.
 In 2013, American investigators took over the website and shut it down. In 2014, Budovsky and several coworkers were arrested in Spain. Then Budovsky was extradited to the United States to face trial for money laundering and operating an unlicensed money transmitting business.
 In January, Budovsky pleaded guilty to money laundering and admitted to secretly moving at least $122 million.
 In a prepared statement, Assistant Attorney General Leslie R. Caldwell said: "The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime."
 Budovsky's attorney did not immediately respond to CNNMoney's request for comment.
 Budovsky and an associate, Vladimir Kats of Brooklyn, had previously been arrested for a similar digital currency exchange called GoldAge. After their arrests, they both moved to Costa Rica to avoid American law enforcement, according to the U.S. government. Budovsky even renounced his citizenship.
 "Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws," Manhattan U.S. Attorney Preet Bharara said in a statement.

[Meho Krljic]

http://youtu.be/d5PJnDi_uGA

[Meho Krljic]

Coding Freedom; Can Blockchain Technology Help Build A Foundation For Real Democracy?

The 2008 financial meltdown and disclosures of secret documents in recent years exposed widespread government overreach and corporate fraud and abuse. As trust in traditional institutions began to sag, global uprisings were spawned to find solutions outside of electoral politics. In the midst of these deep systemic breakdowns of governance, a decentralized solution emerged with a breakthrough in computer science. As the revolutions on the streets began to wind down, perhaps nobody expected the rise of the blockchain. Bitcoin’s enormous potential for disruption is beginning to be felt in the realm of finance. Yet, currency is just its first application. The core of this invention is distributed trust that enables a platform for decentralized consensus at a large scale. Can this technology help lift us out of the crumbling old world and build a foundation for real democracy?
The ongoing global crisis of legitimacy signals a significant decay of Western liberal democracy. The seeds of this corruption go way back to the very founding of the United States. Political philosopher Sheldon S. Wolin (2008) identified “the framers of the Constitution” as “the first founders of modern managed democracy” and described how the Founding Fathers created a system that favored elite rule, giving exclusive rights to white male property owners. He pointed out how in drafting a new constitution, “they treated as axiomatic that a modern political system had to make concessions to democratic sentiments without conceding governance to ‘the people’ ” (p. 155).
Despite the founders’ success in helping throw off the yoke of royalty, this was a closed system that operated with its own inherent bias to protect privilege and power. The economic imbalance prevalent then was not addressed and was directly used to recreate age-old lever points of control. This translated into unequal political power, creating a wide gap between the Constitutional mandate as governing structure and the aspirations for rule by the people that was indicated in the preamble; “We the People”.
The highest law of the land in the U.S. was said to free the source of legitimacy from the authority of the church and the British Crown, placing it instead in the common man, with the principle of equality under the law. Yet, this attempt to embody the spirit of equality enshrined in the ideals of the Declaration of Independence faltered right from the beginning. In the often unacknowledged hypocrisy manifested in the founders’ denial of rights to Africans, indigenous people and women, this unredeemed colonial domination carried on. Contrary to the idea of consent of the governed, the reality was subjugation of blacks through slavery and natives through violence. With any sovereignty achieved through conquest, governments don’t require the consent of the conquered.
This unchallenged economic power as the engine behind the experiment of American democracy was exercised to manufacture consent of those afforded rights to participate in the political process. Although the First Amendment asserted the separation of church and state, this declaration of rights didn’t acknowledge the necessity to check and balance state control over money and thus failed to explicitly indicate the people’s right to freely express themselves financially with the currency of their choice. People didn’t have power to restrict Congress in money creation. Whether one was a descendent of slaves or of the owner class, individual liberty remained tied to this newly constituted governance.Tyranny of Central BanksWhat really lurks behind central command in this supposed land of the free? In tracing the history of money creation in the United States, attorney and author Ellen Brown (2007) revealed that the real trigger for the Revolutionary War was King George’s ban on the printing of local money in the American colonies. She described how after independence was won, the King’s economic subservience was not achieved by force but instead by the British bankers persuading the American people to take their paper money. Brown noted how the founder’s subsequent disillusionment with paper money led them to leave it out of the Constitution and that as a result “Congress was given the power only to ‘coin money, regulate the value thereof,’ and ‘to borrow money on the credit of the United States” (p. 48).
The founding father’s failure to define exactly what money was along with the lack of healthy parameters around its creation and control left a loophole within this system of representation for the shadowy forces to penetrate and later subvert the Constitution and further betray the ideals in the Declaration. The amorphous centralized creation of money has become a single point of failure that makes the entire system vulnerable to counter-party risk. This was seen especially in the Wall Street hijack of the monetary system with the passing of the Federal Reserve Act in 1913.
Former Goldman Sachs banker and author of the book All the President’s Bankers Nomi Prins described how the creation of the Federal Reserve was initiated at the turn of the 20th century to preserve American corporate supremacy, while creating stability and hegemony of major banks with deep ties to Washington. Ironically, in the home of the brave, the tyranny of the old world continued with central banks as the new Kings. Since then, every time new money was created, the people were now being charged with leverageable debt and interest. Fiat as legal tender by government decree created a kind of hidden rent-seeking royalty to maintain this throne of power.Financialization of Everyday LifeAs the authority of the church weakened over time, the merger of the state with private banks created a new state sponsored religion of market fundamentalism. This market theology, based on worshiping the gods of capital and wealth accumulation became the dominant logic dictating human interaction and expression. The financialization of everyday life has stifled the First Amendment; the flow of information as the currency of democracy. Corporate consolidation of the media created a monopoly of content production and distribution. With commercial interests hijacking electoral politics, the idea of unlimited growth bypassed democratic consensus and a doctrine of profit at any cost came to shape incentive structures for mainstream society.
In Democracy, Inc. Professor of journalism, David S. Allen (2005) astutely pointed to this conflation of corporate and civic values that undermines the public sphere. Professionals have become a new class that guards access to patronage networks of single-minded corporate power. Corporatist incentive structures have become an invisible force of governance to regulate people’s actions through enforcing self-censorship, making acts of dissent more difficult. One’s rights under the First Amendment in the U.S. have increasingly come to require implicit permission from what has now become a corporate state, exercised only on their terms.
The unruly cowboy economy has then morphed into rabid corporatism in its crusade for the ‘New American Century’. First it was railroads and oil companies. Then came drug cartels, arms manufacturers and investment banks like Goldman Sachs. Now in the digital age, companies like IBM, Apple and Google have gained significant political power. This insidious growth of corporate mergers with nation-state apparatus has reached a tipping point, expanding out into the world in the form of corporate led globalization.The Creation of a Perfect MarketWhat can check this seemingly unaccountable power? Bitcoin as the countenance of the blockchain has entered the belly of the beast of predatory capital and is beginning to break the bond of the interlocking power of corporations and state. With its essence of digital scarcity and distributed computing, this innovative technology performs the production of money and clearing of transactions that traditionally have been handled by central banks.
With unprecedented currency crises and BRICS countries moving away from dollar hegemony, the illusory world of the fiat house of cards now teeters on the verge of collapse. The world’s most powerful computing system corrects the erroneous math of inflated Proof-of-Government Decree and can increasingly become a safe haven for those in places like Argentina whose currency is subject to rampant hyperinflation. The frictionless flow of this stateless currency offers a way out of the oligarchic incentive structures paved by the parasitic rent-seeking petrodollar.
What is this disruptive force that challenges the monopolized markets? Bitcoin’s unprecedented autonomous flow is enabled through its algorithmic consensus. This was put into practice through a spontaneously emerging computer network around the world, harnessing massive hashing power.
What instigated this swarm of miners? Silicon Valley tech entrepreneur and author Andreas Antonopoulos acknowledged how the creator of this technology Satoshi Nakamoto not only invented new currency, but gave us the world’s first perfect market. Antonopoulos described how Bitcoin mining is built around a valuable currency and the basic economic principle of risk and reward. He also explained how it is designed with an incentive to work honestly. Based on the principle of game theory to create fairness, miners engage in a broadcast math competition known as ‘proof of work’. Each 10 minutes, problems are solved by chance and whoever solves the problem wins a fixed number of bitcoins. Difficulty is adjusted according to demand with a tight feedback loop every 2 weeks, keeping the mining always profitable.
No one entity controls this Satoshi market and what governs it is the underlying operating system of mining software that generates unpredictable, unrepeatable random numbers. It is through the chaos created in the hashing that each new bitcoin is conceived and the life of the ecosystem is sustained. The protocol of algorithmic consensus is enabled through the miners’ willingness to let go of the urge to control and place the outcome at the mercy of the Satoshi dice. Through each player’s commitment to subordinate their will to this spontaneous force of the market, the underlying core of the technology becomes operational and the blockchain’s distributed trust provides a new foundation for equality that is fundamentally different than existing models of representation.The Descent and Ascent of ManThe founders of American democracy conceived the idea of governance based on a particular vision of man. Philosopher Jacob Needleman (2003) described how in the underlying creation of law and the American Constitution, “the meaning of democracy was rooted in a vision of human nature as both fallen and inwardly perfectible” (p. 9). This was true to the conception of man’s nature put forward by naturalist Charles Darwin. Most are familiar with Darwin’s theory of genetic mutation, natural selection and the survival of the fittest from his work, The Origin of Species. But his second work, The Descent of Man was largely ignored, in which he argued for the higher nature of man based on innate altruism and love.
With this understanding, they installed their own security code of checks and balance of power. Through distributing power among the three branches of government, the creators of constitutional government aimed to safeguard the system from potential tyranny of man’s fallen nature; unbridled greed, personal bias and interests of select groups. Yet history has shown that from the beginning, this system of governance was launched on a fragile foundation.
The major bug within this form of representative government that caused a fatal system error was basing systemic accountability on trust in select individuals. To a large extent, this made the promise of the Declaration of “All men are created equal” hollow words not able to match up with reality. With government secrecy in the form of over-classification and corporate propaganda, those in power can conceal not only motives but also their actions, making the system of checks and balances virtually ineffective. Here Bitcoin’s distributed trust offers a new form of accountability and a better way to secure the system.Accountability through Distributed TrustThe core invention of the blockchain addresses the inherent weakness of this trust model by making corruptible human nature accountable through cryptographic proof. All men are inherently corruptible and instead of trusting a handful of elected officials and particular institutions, Bitcoin’s trust by computation places accountability within the rule of consensus and guarantees the integrity of the system by removing the necessity of trusting any one group or individual.
The algorithmic rules that bind the bitcoin miners are built and maintained through incentive structures based on a realistic assessment of man’s potential to act non-altruistically. Pursuit for self-interest is not itself a bad thing. It only becomes destructive when it loses relationship to the whole and individual actions are carried out without consideration of others and society at large.
In the mining competition, all players can act out of self-interest. Yet, the reward for playing by the rules is higher than potential gains one may achieve by attacking the network, so each one learns to self-regulate their personal desires and work so to not unduly benefit from the altruism of everyone else. Whenever the system begins to centralize and people act with a narrow sighted pursuit without consideration of the whole ecosystem, they quickly come to realize they might kill the goose that lays the golden eggs. So far, each time miners get close to a concentration of a mining pool known as 51% attack, they voluntarily move away to keep the system healthy and decentralized.
This distributed trust provides a better system of accountability where there is no need for any one person or group to hold another accountable. All who choose to join simply commit to the rule of consensus and through each playing honestly, undue self-interests are naturally regulated.Taming the BeastIn the kleptocracy of the current global empire, naked greed seems to have dragged much of the world into a rogue state of despotism. Man’s unaccounted fallen nature that creates and grabs for levers of power has crystallized into a dragon of the world. With never-ending military intervention in the Middle East, cheap sweatshop labor exploitation in Southeastern Asia, and corporate government hijack bills like TPP and TISA trade agreements, unredeemed Anglo-American imperial power continues its legacy of colonization. The genius of the blockchain’s distributed accountability offers a creative solution to the growing problem of this voracious beast.
In a decentralized organism, one’s self-interests cannot easily remain isolated. With the distributed ledger, they are placed in an interdependent context where individual’s actions tend to bring benefits to the whole network. What appears at first glance as self-serving acts of investors and speculators actually contribute to the development of the system at its early stages. Contrary to criticism, the perceived expensive mining is providing crucial checks and balances for transactions and the global level security of the system.
Honest account and acknowledgment of individual pursuit for personal gain within this system mitigates potentially destructive forces such as greed and desire that tend to careen out of control and compromise entire systems. Instead of trying to deny or eradicate man’s lower attributes, by maintaining a conscious relationship to the potentially dark side of human nature, those wild unruly beasts that are socially destructive can be tamed. Characteristics that are often considered negative in society such as risk taking, calculated selfish acts and profit motives are guided to serve a shared vision of larger society.
Through individuals freely choosing to work honestly in the Bitcoin ecosystem, the beast within each one of us can be placed inside the cage of the mining ring and accounted for in each transaction. The global mind of the world’s largest supercomputer network takes charge of the drive for competition with complex abstract calculation, digesting many ruthless and callous aspects of human nature. This in return can free humanity from forces of aggression and the logic of conquest and creates a space for people to work altruistically. Out of the torrents created through globally spread computers, the torus of the new heart grows and with every beat helps expand the collective good will of the people throughout the entire network.Rule of DemocracyThe pure flow unleashed through Bitcoin’s perfect market begins to free the will of individuals from the rule of a small minority who claim authority over entire populations. As a result, it could release the First Amendment right that was locked by corporate proprietary. This technology beyond borders can empower individuals by placing the source of legitimacy with the common people. With Bitcoin as the new First Amendment app, people can freely exchange, transact and financially associate with one another without asking permission from anyone. This helps revitalize values and ideas that have been devoured by corporatism.
A spontaneous swarm is created through aligning self-interests with the principle of consensus. Out of the creative chaos of this autonomous movement of individuals, new social forms are organically emerging, based on voluntary consent of all participants in the system. This creates the rule of true democracy, where the lines between those who govern and the governed flatten, and to represent comes to mean to serve. In the blockchain’s decentralized world, miners and developers who take their place in traditionally understood positions of representation are directly tied to the interests of users, as their satisfaction is manifested in wider adoption that creates more value. By taking an oath to algorithmic consensus, they hold themselves accountable to the demands of a more humanized market.
The Declaration of Independence was a promise and the Constitution was meant to be its fulfillment. Now, as the shredding of the Bill of Rights continues, there is an urgent need to create a better system. Necessity is the mother of invention and builders of the new world are rising to the occasion, striving to meet the challenge by coding freedom. The Founding Mothers of this breakthrough innovation were the accumulated efforts of the many embodied in the anonymous creator Satoshi Nakamoto. Satoshi represents the wisdom of the common people. Upon an open source code that can be checked and modified, transparency of governance is ensured, while lack of ownership allows the system to stay open with equal access to apps for all end users.
With objective laws of mathematics that can be applied and amended through peer-to-peer review and decentralized consensus, this system can be perfected to realize the ideal of the Declaration; that all nodes are created equal. Upon this robust decentralized platform, new apps are built and seemingly insurmountable problems can be solved through people around the world working together.
The blockchain revolution has already begun changing the world as we know it. A tsunami of innovations from Silicon Valley are creating new jobs and resuscitating the dying economy of a fiat world. Creative non-violent acts of a growing global network can redeem true enlightenment ideals of freedom, equality, and fraternity, which are at the same time universal democratic virtues.
The founders of the Constitution conceived it as a system that allows individuals to struggle with two opposing impulses working within. In the eyes of Thomas Jefferson, government was to be “a shell, an armor, a protective structure that would allow and perhaps, in subtle ways, even support the growth of moral power within the individual members of the society” (Needleman, 2003, p. 166).
A piece of mathematics enshrined in computer code can become the foundation stone for real democracy. This creates a sanctuary for individual liberty against the tyranny of states, of corporations or any other third party that tries to break the circle of distributed trust. This liberty is not understood simply as free markets, but as the freedom of each person to choose their own path of self-determination and let their inner conscience guide their lives.
Bitcoin flows, splitting into ever more divisible bits across borders wherever there is a thirst for freedom, becoming the electric cord that links all liberty-loving men and women around the world. Wider adoption furthers decentralization and can lead to creation of a free society where each strives toward higher ideals of altruism and self-fulfillment.

[Father Jape]

http://www.lrb.co.uk/v38/n13/andrew-ohagan/the-satoshi-affair

[mac]

Aman, koliko slova na jednom mestu...

[Meho Krljic]

How China Took Center Stage in Bitcoin’s Civil War

A delegation of American executives flew to Beijing in April for a secret meeting just blocks from Tiananmen Square. They had come to court the new kingmakers in one of the strangest experiments in money the world has seen: the virtual currency known as Bitcoin.
Against long odds, and despite an abstruse structure, in which supercomputers “mine” the currency via mathematical formulas, Bitcoin has become a multibillion-dollar industry. It has attracted major investments from Silicon Valley and a significant following on Wall Street.
Yet Bitcoin, which is both a new kind of digital money and an unusual financial network, is having something of an identity crisis. Like so many technologies before it, the virtual currency is coming up against the inevitable push and pull between commercial growth and the purity of its original ambitions.
In its early conception, Bitcoin was to exist beyond the control of any single government or country. It would be based everywhere and nowhere.
Yet despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network. They have done so through canny investments and vast farms of computer servers dispersed around the country. The American delegation flew to Beijing because that was where much of the Bitcoin power was concentrated.


At the time of the meeting, held at the Grand Hyatt hotel, over 70 percent of the transactions on the Bitcoin network were going through just four Chinese companies, known as Bitcoin mining pools — and most flowed through just two of those companies. That gives them what amounts to veto power over any changes to the Bitcoin software and technology.
China has become a market for Bitcoin unlike anything in the West, fueling huge investments in server farms as well as enormous speculative trading on Chinese Bitcoin exchanges. Chinese exchanges have accounted for 42 percent of all Bitcoin transactions this year, according to an analysis performed for The New York Times by Chainalysis. Just last week, the Chinese internet giant Baidu joined with three Chinese banks to invest in the American Bitcoin company Circle.
But China’s clout is raising worries about Bitcoin’s independence and decentralization, which was supposed to give the technology freedom from the sort of government crackdowns and interventions that are commonplace in the Chinese financial world.
“The concentration in a single jurisdiction does not bode well,” said Emin Gun Sirer, a professor at Cornell and a Bitcoin researcher. “We need to pay attention to these things if we want decentralization to be a meaningful thing.”
The power of Chinese companies has already come to play a major role in a civil war that has divided Bitcoin followers over the last year and led to the departure of one of the top developers of the virtual currency. The dispute has hinged on technical matters as well as on bigger questions of what Bitcoin should look like in 10 or 20 years.

Network BottleneckThe American companies whose executives journeyed to the Grand Hyatt — including venture-capital-funded start-ups like Coinbase and Circle — are fighting to make Bitcoin bigger. They hope to expand the capacity of the Bitcoin network so that it can process more transactions and compete with the PayPals and Visas of the world.
The current size of the network goes back to the early days, when Bitcoin’s founder, Satoshi Nakamoto, limited the amount of data that could travel through the network, essentially capping it at about seven transactions a second. As Bitcoin has grown more popular, those limits have caused severe congestion and led to lengthy transaction delays.
The American delegation in China had a software proposal, known as Bitcoin Classic, that would change all that.
The Chinese companies, though, had the ultimate decision-making power over any changes in the software, and they did not agree with the American delegation. The Chinese had thrown in their lot with another group of longtime programmers who wanted to keep Bitcoin smaller, in part to keep it more secure. The Americans hoped to persuade the Chinese to switch sides.
In a hotel conference room, the American team of about a half-dozen people cycled through its PowerPoint slides, in English and Chinese, arguing for expansion of the network, most notably pointing to the long delays that have been plaguing the system as a result of the congestion. The Chinese representatives listened and conferred among themselves. The group took a break for a lunch of lamb and dumplings at a nearby mall.


“We kept coming back and saying, ‘For better or worse, you have this leadership in the industry, and everyone is looking to you to show some leadership,’” said Brian Armstrong, chief executive of Coinbase.
Ultimately, Mr. Armstrong said, “We were unable to convince them.”
Some Bitcoin advocates have complained that the Chinese companies have been motivated only by short-term profit, rather than the long-term success and ideals of the project. Bobby Lee, chief executive of the Bitcoin company BTCC, which is based in Shanghai, bristled at that — and at the notion that the Chinese companies represent any sort of united front. He attended the April meeting and pointed out that the Chinese companies had disagreed among themselves on how urgent it was to make changes to the Bitcoin software.
He said the American companies failed to understand the power dynamics in the room that day. “It was almost like imperialistic Westerners coming to China and telling us what to do,” Mr. Lee said in an interview last week. “There has been a history on this. The Chinese people have long memories.”
 Continue reading the main story      Advertisement
  Continue reading the main story   A Mining PowerhouseThe mysterious creator of Bitcoin, Satoshi Nakamoto, released the software in early 2009. It was designed to provide both a digital coin and a new way to move and hold money, much as email had made it possible to send messages without using a postal service.
From the beginning, the system was designed to be decentralized — operated by all the people who joined their computers to the Bitcoin network and helped process the transactions, much as Wikipedia entries are written and maintained by volunteers around the world.


The appeal of a group-run network was that there would be no single point of failure and no company that could shut things down if the police intervened. This was censorship-free money, Bitcoin followers liked to say. Decision-making power for the network resided with the people who joined it, in proportion to the computing power they provided.
The allure of new riches provided the incentive to join: Every 10 minutes, new Bitcoins would be released and given to one of the computers helping maintain the system. In the lingo of Bitcoin, these computers were said to be mining for currency. They also served as accountants for the network.
For the first few years, aside from its use as a payment method on the Silk Road, an online drug market that has since been shut down, Bitcoin failed to gain much traction. It burst into the world’s consciousness in 2013 when the price of the digital money began to spike, in no small part because Chinese investors began trading Bitcoins in large numbers.
Mr. Lee said the Chinese took quickly to Bitcoin for several reasons. For one thing, the Chinese government had strictly limited other potential investment avenues, giving citizens a hunger for new assets. Also, Mr. Lee said, the Chinese loved the volatile price of Bitcoin, which gave the fledgling currency network the feeling of online gambling, a very popular activity in China.
There has been widespread speculation that Chinese people have used Bitcoin to get money out of the country and evade capital controls, but Mr. Lee and other experts said the evidence suggests this is not a significant phenomenon.


“No Chinese person is pushing for Bitcoin because it’s libertarian or because it’s going to cause the downfall of governments,” said Mr. Lee, who moved to China after growing up in Africa and the United States and studying at Stanford. “This was an investment.”
The extent of the speculative activity in China in late 2013 pushed the price of a single Bitcoin above $1,000. That surge — and the accompanying media spotlight — led China’s government to intervene in December 2013 and cut off the flow of money between Chinese banks and Bitcoin exchanges, popping what appeared to be a Bitcoin bubble.
The frenzy, though, awakened interest in another aspect of the currency: Bitcoin mining.
Peter Ng, a former investment manager, is one of the many people in China who moved from trading Bitcoins to amassing computing power to mine them. First, he mined for himself. More recently he has created data centers across China where other people can pay to set up their own mining computers. He now has 28 such centers, all of them filled with endless racks of servers, tangled cords and fans cooling the machines.
Mr. Ng, 36, said he had become an expert in finding cheap energy, often in places where a coal plant or hydroelectric dam was built to support some industrial project that never happened. The Bitcoin mining machines in his facilities use about 38 megawatts of electricity, he said, enough to power a small city.
The people who put their machines in Mr. Ng’s data centers generally join mining pools, which smooth the financial returns of smaller players. A popular one, BTCC Pool, is run by Mr. Lee’s company. This month it attracted about 13 percent of the total computational power on the Bitcoin network. The most powerful pool in China — or anywhere in the world — is known as F2Pool, and it had 27 percent of the network’s computational power last month.

The Politics of PoolsBig pool operators have become the kingmakers of the Bitcoin world: Running the pools confers the right to vote on changes to Bitcoin’s software, and the bigger the pool, the more voting power. If members of a pool disagree, they can switch to another pool. But most miners choose a pool based on its payout structure, not its Bitcoin politics.
It was his role overseeing BTCC Pool that got Mr. Lee invited to the meeting with the American delegation in Beijing. The head of operations at F2Pool, Wang Chun, was also there.
Perhaps the most important player in the Chinese Bitcoin world is Jihan Wu, 30, a former investment analyst who founded what is often described in China as the world’s most valuable Bitcoin company. That company, Bitmain, began to build computers in 2013 using chips specially designed to do mining computations.
Bitmain, which has 250 employees, manufactures and sells Bitcoin mining computers. It also operates a pool that other miners can join, called Antpool, and keeps a significant number of mining machines for itself, which it maintains in Iceland and the United States, as well as in China. The machines that Bitmain retains for itself account for 10 percent of the computing power on the global Bitcoin network and are enough to produce new coins worth about $230,000 each day, at the exchange rate last week.
Mr. Wu and the other mining pool operators in China have often seemed somewhat surprised, and even unhappy, that their investments have given them decision-making power within the Bitcoin network. “Miners are the hardware guys. Why are you asking us about software?” is the line that Mr. Ng said he often hears from miners.
This attitude initially led most Chinese miners to align themselves with old-line Bitcoin coders, known as the core programmers, who have resisted changing the software. The miners wanted to take no risks with the money they were minting.
But lately, Mr. Wu has grown increasingly vocal in his belief that the network is going to have to expand, and soon, if it wants to keep its followers. He said in an email last week that if the core programmers did not increase the number of transactions going through the network by July, he would begin looking for alternatives to expand the network.
However the software debate goes, there are fears that China’s government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network. The government’s intervention in 2013 suggests that Bitcoin is not too small to escape notice.
Mr. Wu dismissed that concern. He also said that as more Americans buy his Bitmain machines and take advantage of cheap power in places like Washington State, mining will naturally become more decentralized. Already, he said, 30 to 40 percent of new Bitmain machines are being shipped out of China.
For now, though, China remains dominant.
“The Chinese government normally expects its businesses to obtain a leading role in emerging industries,” he said. “China’s Bitcoin businesses have achieved that.”

Na linku ima i korisnih grafikona, pa koga zanima nek klikće.

[Meho Krljic]

Bitcoin 'miners' face fight for survival as new supply halves

Marco Streng is a miner, though he does not carry a pick around his base in south-western Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins.In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng's which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions.Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers.The work Streng's computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and - because they earn new bitcoins for the work they do - steadily increase the currency in circulation, currently worth around $10 billion.The process has come to be known as "mining" because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground.But on Saturday, the reward for miners will be slashed in half. Written into bitcoin's code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation.From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate BTC=BTSP, there will be just 12.5.That means only the mining companies with the leanest operations will survive the ensuing profit hit.  "The most important thing is to be the most efficient miner," said Streng, the 26-year-old co-founder of German firm Genesis Mining, which has "mining farms" in Canada, the United States and eastern Europe, as well as in Iceland. "When the others drop out, that means that they leave the market and give you a bigger share of the pie." SOLVING PUZZLESThe currency was founded eight years ago by a person or group using the name Satoshi Nakamoto, whose real identity has not been established. It was set up to operate independently of any single authority, instead relying on a decentralized global network.Because the bitcoin miners operate autonomously, it is hard to track their numbers and size. But in terms of computing capacity it was estimated earlier this year that the network is 43,000 times more powerful than the world's top 500 supercomputers combined.Computers like Streng's solve complex, automatically generated mathematical puzzles to help secure each block of transactions and keep the bitcoin network safe from hacking or manipulation. For bitcoin users, that security is one of the currency's main attractions. After the first miner secures a block of transactions, its work is verified by the other miners in the network, and that block is added to the "blockchain" - a shared record of all the transaction data - which is virtually impossible to tamper with. The mining, therefore, keeps the whole system going.Bitcoin is now accepted by major organizations including U.S. online retailer Overstock.com and travel company Expedia.The speed and anonymity of bitcoin transactions, and lack of a central authority overseeing the currency, has drawn in many users, including those who want to get around capital controls. It has also attracted investors who see it as a potentially lucrative commodity in itself.KEEPING COOLBitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialized as bitcoin usage expands. As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialized that they can only perform the function of bitcoin mining, a whole industry has emerged.It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high.  Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin.  Equipment, rent, wages and business running costs are on top. On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin. In the same remote region of Iceland as the Genesis mining farm, on a former Cold War U.S. military base lies a bitcoin mining facility belonging to U.S. firm Bitfury. A nearby sub-station means electricity transmission costs are minimal.In the farm's two vast buildings, tens of thousands of mining machines whir away, producing a huge amount of heat, so the buildings are open to the cold Icelandic air at either side, save for particle filters to trap dust. Fans in the ceiling allow hot air to escape, but spin so fast that no rain or snow can enter during the winter. The noise produced by computers and fans is deafening.It is no coincidence that so many mining companies have chosen to build farms in Iceland - Chinese giant Bitmain also has a huge farm there. The volcanic island's cheap, bountiful, renewable energy supply, good internet connectivity, and cool temperatures make it an ideal location.  The Icelandic authorities welcome the boost to the economy that the bitcoin miners have brought -- Bitmain opened its farm after an approach by the Icelandic embassy in Beijing. Genesis's Streng says he is such a valued client that the Icelandic energy companies fly him around in helicopters.  Bitfury CEO Valery Vavilov, who estimates electricity makes up between 90 and 95 percent of bitcoin mining costs, says one way his firm stays competitive is by making its own hardware.     He also says the company, founded in 2011, is prepared for the mining reward cut. "We're prepared - we already went through one halving event in 2012," he said. "You can forecast this...so you have time to prepare, and if you're prepared you can live quite easily."Vavilov, and other miners, say the prospect of new supply halving has already helped drive bitcoin up over 50 percent this year, which should help ease the pain.COMPETITION FROM CHINADespite the fact that the halving was expected, and that the price has risen, it has already claimed one casualty: Sweden's KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring.Daniel Masters, who runs a Jersey-based bitcoin hedge fund and who bought a part of KnC's business, said the Swedish firm, like everybody else, had faced competition from miners in China, which are estimated to make up more than two-thirds of the bitcoin network's computing power, or "hashpower"."It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper," Masters said.Some Chinese miners get hydroelectric power from disused dams, while others use cheap coal-powered electricity. Bitfury and Genesis, though, say their lean operations allow them to fight off the competition. Genesis, for example, keeps cost down by remotely monitoring conditions in its mining farms and adjusting its fans and cooling accordingly.And the next time the mining reward is halved, in 2020, they hope the number of bitcoin transactions will have grown sufficiently to mean that the small fees paid by users will make up enough of their income to smooth out the profit cut."By 2020 we will definitely have had the tipping point," said Bitfury's Vavilov.

[Meho Krljic]

Bitcoin not money, Miami judge rules in dismissing laundering charges

A Miami-Dade judge ruled Monday that Bitcoin is not actually money, a decision hailed by proponents of the virtual currency that has become popular across the world.
In a case closely watched in financial and tech circles, the judge threw out the felony charges against website designer Michell Espinoza, who had been charged with illegally transmitting and laundering $1,500 worth of Bitcoins. He sold them to undercover detectives who told him they wanted to use the money to buy stolen credit-card numbers.
But Miami-Dade Circuit Judge Teresa Mary Pooler ruled that Bitcoin was not backed by any government or bank, and was not “tangible wealth” and “cannot be hidden under a mattress like cash and gold bars.”
“The court is not an expert in economics; however, it is very clear, even to someone with limited knowledge in the area, the Bitcoin has a long way to go before it the equivalent of money,” Pooler wrote in an eight-page order.
The judge also wrote that Florida law — which says someone can be charged with money laundering if they engage in a financial transaction that will “promote” illegal activity — is way too vague to apply to Bitcoin.
“This court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” she wrote.
The ruling was lauded by Bitcoin experts who believe the ruling will encourage the use of the virtual currency, and offer a roadmap to governments across the world that have struggled to understand and regulate it.
Espinoza’s attorney, Rene Palomino, said the judge’s order was “beautifully written.”
“At least it gives the Bitcoin community some guidance that what my client did was not illegal,” Palomino said. “What he basically did was sell his own personal property. Michell Espinoza did not violate the law, plain and simple.”
A spokesman for the Miami-Dade State Attorney’s Office said: “We are presently reviewing the court order to determine whether we will be appealing this decision.”
Law enforcement has struggled to figure out how Bitcoin fits into illegal activities, and Espinoza’s case was believed to be the first money-laundering prosecution involving the virtual currency.
The controversial virtual currency allows some users to spend money anonymously and it can be also be bought and sold on exchanges with U.S. dollars and other currencies.
The currency has gained popularity with merchants selling legitimate goods and services. In Miami, there are a few restaurants that accept the virtual currency — and even a plastic surgeon.
Regulated services such as CoinBase, which operates similarly to PayPal, allow people to buy, sell and use the Bitcoins. But authorities have raised concerns about the currency being used in the anonymous black market.
Most notoriously, Bitcoins were used to traffic drugs in the now-shuttered Silk Road network. In an unrelated South Florida case, a Miramar man got 10 years in prison after using Bitcoins to buy Chinese-made synthetic heroin from a Canadian prisoner.
In Espinoza’s case, Miami Beach detectives found him through a Bitcoin exchange site, LocalBitcoins.com, and told him they were going to use the currency to purchase stolen credit-card numbers.
The detectives met with Espinoza, 32, three times in person: on Lincoln Road, at an ice cream shop and in a hotel room.
Espinoza was arrested along with another man, Pascal Reid, who pleaded guilty to acting as an unlicensed money broker and was sentenced to probation. Under his unusual plea deal, he agreed to teach law enforcement about Bitcoin.
At a hearing in May, a defense expert, Barry University economics professor Charles Evans, testified that Bitcoin was not actually money.
No central government or bank backs Bitcoin, like the United States does the dollar. Government regulation of Bitcoin remains a messy hodgepodge from state to state, country to country. The IRS considers Bitcoin deals no more than bartering, he said.
“Basically, it’s poker chips that people are willing to buy from you,” said Evans, a virtual-currency expert who was paid $3,000 in Bitcoins for his defense testimony.
The judge’s decision will help Bitcoin flourish in Miami and countries where banking system are tenuous, Evans said in an interview on Monday.
“Bitcoin is perfect for small-scale cross-border transactions and we are international in this area,” Evans said. “If somebody from Venezuela needs a hammer, now that person can send Bitcoin to his cousin in Miami, that cousin can sell the Bitcoin, go buy the hammer and send it to Venezuela.”
The ruling could also spark a push to tweak Florida law. Judge Pooler, in her ruling, said the state’s money-laundering law that targets transactions that “promote” illegal activity requires a “much-needed update.”
“Hopefully, the Florida Legislature or an appellate court will define ‘promote’ so individuals who believe their conduct is legal are not arrested,” Pooler wrote.
 

Read more here: http://www.miamiherald.com/news/local/crime/article91682102.html#storylink=cpy

[Meho Krljic]

Banks adopting blockchain 'dramatically faster' than expected: IBM

[Meho Krljic]

Bitcoin breaks $1,000 level, highest in more than 3 years
 

  The price of bitcoin has breached the $1,000 mark, hitting a more than three-year high on Monday.
 The cryptocurrency was trading at $1,021 at the time of publication, according to CoinDesk data, at level not seen since November 2013, with its market capitalization exceeding $16 billion.
  Bitcoin has been on a steady march higher for the past few months, driven by a number of factors such as the devaluation of the yuan, geopolitical uncertainty and an increase in professional investors taking an interest in the asset class.
 "We are seeing the aftermath of zero interest rates run amok. So bitcoin is a healthy reminder that we don't have to hold on to dollars or renminbi, which is subject to capital controls and loss of purchasing power. Rather it's a new asset class," Bobby Lee, chief executive of BTC China, one of the world's largest bitcoin exchanges, told CNBC by phone.   China is the source of the majority of trade in bitcoin and the devaluation of the yuan and fears over capital controls have contributed to the recent spike in the digital currency. 
  But several other factors have also had a notable impact. For example, bitcoin's price has appreciated around 137 percent in the past 12 months but got a big boost after Donald Trump won the U.S. election in November. 
 Another big event this year was in June when a change in bitcoin's underlying rules meant those who were "mining" the cryptocurrency – a process whereby users are awarded with bitcoin if they solve complex mathematical puzzles in order for a bitcoin transaction to go through – received less rewards. This was due to the process known as "halving,"  which essentially reduces the supply of bitcoin.
 But overall, bitcoin experts said that the market is growing in terms of volumes and those participating, creating a "network effect" that will see the price rise further.
  "The value of Uber in any city is directly dependent on the number of drivers and number of users, it's not linear it's exponential. The same is true of the value of bitcoin," Lee said. 
 

[Meho Krljic]

One bitcoin is now worth more than one ounce of gold

[Meho Krljic]

If you bought $100 of bitcoin 7 years ago, you'd be sitting on $75 million now

[Meho Krljic]

What the hell is happening to cryptocurrency valuations?
 

[Meho Krljic]

Bitcoin splits in two amid feud

[Boban]

Vezano za ove kriptovalute, imam da izjavim sledeće: vrlo sam nesrećan što je moja omiljena grafička kartica ATI radeon 480 postala nezamislivo popularna za sajber-rudarenje da se čeka i po dva meseca, a do nas jedva da stigne pokoji primerak i to otvoren, dakle, trkeljisan i vraćen negde u inostranstvu.
Inače ATI radeon 480 po svojim gejmerskim karakteristikama šije duplo skuplje GeForce, ali jednostavno više ne može da se kupi u zemlji Srbiji.

[lilit]

pa stvarno ne verujem šta pišeš al ajde.

[hidden]

Vezano za ove kriptovalute, imam da izjavim sledeće: vrlo sam nesrećan što je moja omiljena grafička kartica ATI radeon 480 postala nezamislivo popularna za sajber-rudarenje da se čeka i po dva meseca, a do nas jedva da stigne pokoji primerak i to otvoren, dakle, trkeljisan i vraćen negde u inostranstvu.
Inače ATI radeon 480 po svojim gejmerskim karakteristikama šije duplo skuplje GeForce, ali jednostavno više ne može da se kupi u zemlji Srbiji.

Evo pre pola sata sam pričao upravo o ovome sa čovekom koji se bavi "kopanjem". Tvrdi mi da se sve grafike koje su pogodne za ovo, nakon plaćanja koriste neko vreme od strane firmi preko kojih se kupuju, a potom šalju. Ludilo je još veće kada se sastavljaju namenske konfiguracije, ili kako se već to zove u tom svetu, elem tvrdi mi da oni opušteno par meseci koriste to što je plaćeno, a potom dostavljaju. Za to vreme, difficulity kopanja toliko poraste, da na to što je kupljeno otprilike može da se metne saksija....

[Boban]

Ja insistiram kod kupovine da dobijem fabrički zapakovan i vakumiran primerak. Uvek i svuda gde je to moguće.

https://www.msi.com/Graphics-card/Radeon-RX-480-GAMING-X-8G.html#hero-overview

[Аксентије Новаковић]

Новац = шарена лажа.
Биткоин = електронска шарена лажа.

Trenutna vrijednost BitCoina gotovo trostruko veća od cijene zlata

Poznata kriptovaluta BitCoin ovaj je tjedan probila novi rekord po pitanju vrijednosti, prešavši cijenu od 3500 dolara što je gotovo tri puta više od cijene zlata, prenosi CNBC.

„Naš prvotni izvještaj gledao je na BitCoin kao ‘skladište vrijednosti’ koje bi tijekom vremena trebalo biti gledano kao alternativa zlatu,“ izjavio je suosnivač Fundsrata, Thomas Lee.

Lee je ujedno i prvi stručnjak Wall Streeta koji je objavio izvještaj o BitCoinu.

BitCoin je u utorak popidne dosegnuo vrijednost od 3525 dolara. To je gotovo trostruka veća vrijednost od zlata. Trenutna cijena te plemenite kovine iznosi 1262 dolara.

Cijena BitCoina premašila je vrijednost zlata još u ožujku, a sama vrijednost porasla je za tri puta u odnosu na početak godine. Cijena zlata u tom periodu porasla je tek za 10 posto.

Stručnjaci tvrde kako će potražnja za novom valutom sve više rasti u skoroj budućnosti, upravo iz ovih razloga.

Dakako, zlato neće ispasti iz tržišne utrke, jer je cijena tog tržišta oko 7,5 trilijuna dolara. Tržište na kojem vlada BitCoin vrijedno je oko 57 milijardi dolara.

Razni analitičari ističu kako bi čak i najmanji postotak ulaganja zlata u BitCoin mogao drastično uvećati vrijednost kriptovalute, potencijalno i do 10.000 dolara u slijedećih nekoliko godina.

http://tribun.hr/trenutna-vrijednost-bitcoina-gotovo-trostruko-veca-cijene-zlata/

[Аксентије Новаковић]

Раша Тудеј

Serial entrepreneur launches 'kosher' cryptocurrency only for Jews

Published time: 8 Aug, 2017 10:23

 Russian entrepreneur Viacheslav Semenchuk has announced plans for an initial coin offering (ICO) of the world's first kosher digital currency aimed specifically at Jewish communities across the globe.

The BitСoen, which comes from the Hebrew word ‘priest,' has been created to simplify payments within Jewish communities, according to Semenchuk. At the same time, BitСoen can be bought by anyone.

Semenchuk said he has invested $500,000 in the project and the new cryptocurrendy is based on a separately developed blockchain.

The wide-scale issue of BitCoen tokens is planned for September after the ICO, which hopes to attract up to $20 million. The enterprise launches a preliminary ICO this week for a million dollars to develop the project.

The bit book has already been filled, according to Semenchuk, who didn’t disclose the names of investors.

The businessman said that BitСoen may be accepted at cryptocurrency exchanges after the ICO.

“We are currently in talks with nearly a hundred trading platforms out of the existing 3000,” Semenchuk said, as quoted by Russian business daily RBK.

The developer is going to issue 100 million BitСoens with a starting price of one US dollar per token. At the same time, the number of tokens being issued cannot be changed by the participants of the project.

The start-up is planning to boost market capitalization of the new cryptocurrency to $1.5 billion in two years. If it meets its bullish target, BitСoen will become the seventh digital currency in the world by market cap.

BitСoen will be controlled exclusively by representatives of a Jewish community, who will make a ‘Council of Six.' The developer said that the council would consist of six respected community leaders from business, politics, finance, technologies, public work, and culture.

The currency will be available for all the trading operations during Shabbat, as the process is automated and doesn’t involve human labor.

https://www.rt.com/business/398940-kosher-cryptocurrency-bitcoen-jewish-community/

[Meho Krljic]

Bitcoin just passed $4,000

[Meho Krljic]

Bitcoin splits in two amid feud

I, da ne bude dosadno:

 
Bitcoin Is Forking. Again.

[Meho Krljic]

Here’s Why People Don’t Buy Things With Bitcoin

[mac]

Trenutno postoji mali milion kriptovaluta. Neke su priznate, ali neke su samo uvedene da se njihovi kreatori obogate na brzinu. Evo spiska kriptovaluta na koje ne treba da trošite svoje procesorsko vreme: http://altcoins.com/scamcoins

[Meho Krljic]

Bitcoin Breaks $5,000 in Latest Price Frenzy

[Meho Krljic]

Russia hopes to launch its own digital currency

[Meho Krljic]

The Internet Is Rife With In-Browser Miners and It's Getting Worse Each Day

[Meho Krljic]

Kad se Džordan Belfort javio da kritikuje, znamo da je došlo zadnje vreme...


Wolf of Wall Street: cryptocurrency ICOs are 'the biggest scam ever'

[Meho Krljic]

Bitcoin slides by over $1,000 in less than 48 hours

[Meho Krljic]

One Bitcoin Transaction Now Uses as Much Energy as Your House in a Week