Investor Fred Wilson: Security and Hoarding Are Holding Back Bitcoin
Venture Capitalist Fred Wilson is a self-proclaimed bitcoin believer,
but when speaking at New York University recently he highlighted some
of the negative aspects of the digital currency, which he said, are
holding it back from widespread adoption.
Currently, security, practicality and problems related to speculation
and hoarding are the biggest issues facing bitcoin, he said at an event
sponsored by the NYC Foundation for Computer Science Education.
Wilson is the
co-founder of venture capital firm Union Square Ventures, which has made
investments in a number of successful tech start-ups, including
Twitter, Tumblr, Kickstarter and Zynga. The company also has a focus on
bitcoin, investing in digital currency startups rather than the currency
itself.
As a proponent of digital currencies, Wilson attended the New York State bitcoin hearings in January, and has previously said the block chain could be an even bigger opportunity than bitcoin.
In his NYU speech, Wilson said:
“What bitcoin does is remove the need for that central entity, that central computer and central company. The way I like to think about bitcoin is like PayPal, but open source, peer-to-peer and not controlled by a company.”
The problem with hoarding
Wilson said that rampant speculation, bitcoin hoarding and price
volatility go hand in hand, arguing that most people still decide to sit
on bitcoin, effectively hoarding it and waiting for the price to go up. Such behaviour causes supply problems, affecting volume and price in the process.
Wilson explained:
“I also think we need to see real transaction volume happen. Right now, most people who get bitcoin hold it, they don’t transact with it. That’s part of what causes all of the volatility — if there was a very vibrant system where bitcoin was just getting swapped around like crazy, the velocity of the money would cause bitcoin’s price to stabilize and there would be a much more liquid market. I think those are the kinds of things an economist would want to see.”
Another problem that keeps volumes low, he said, is the fact that
buying bitcoin is not as straightforward as it seems. Wilson
indicated that it can take days for bitcoin to show up in his account
once he buys some. This simply is not practical if you want to use the
cryptocurrency on a day-to-day basis.
Improved security essential
Wilson further identified a lack of security as a major challenge facing bitcoin, and one that is hampering mainstream adoption.
He argued that it is still relatively easy to hack into people’s
computers, and thus into bitcoin wallets hosted there,
while bad actors running bitcoin businesses pose a threat to public
confidence in the digital currency:
“Bitcoin theft is a big issue. Bitcoin fraud is a big issue. And what will have to happen is we will need to see companies like Coinbase and others merge that can invest heavily in security. And that’s both technological security, and also process security, to make you comfortable to keep your bitcoin there. And I think that that’s probably going to be first big commercial opportunity in bitcoin,to create secure systems. Because without that, I don’t think we’ll ever get enough confidence and trust in the system for people to really start using it.”
More potential than teething problems
Wilson did not simply address concerns and challenges, he also talked
about bitcoin’s unique properties that make it an attractive payment
option for merchants, charities and other organisations.
“The thing that’s cool about bitcoin is that it like cash on a wire,
or cash over the air. It’s like I’m giving you a five dollar bill, but
it comes into your account over the Internet and there is nobody to pay
for the transaction. That is a big deal,” he said.
Wilson pointed out that crowdfunding platforms, charities and many
businesses rely on relatively small individual transactions. The fees
pile up quickly and allowing a charity or a crowdfunded project to keep
2-5% of the cash they raise in their pocket makes a big difference.
“All of that money is going to go to the cause we care about. None of
that is going to go to a third party that is making money off of the
charity,” he added.
Some of Wilson’s assertions have been met with vocal criticism from
the bitcoin community on reddit and other online forums. In response he took to reddit on Sunday to clarify his position on these and other concerns.
Source : http://www.coindesk.com
TNABC Day 2: Bitcoin’s Diverse Community on Full Display
Day two of The North American Bitcoin Conference (TNABC) was at times
unpredictable – featuring a notable cancelled appearance and a few
schedule changes. However, it ultimately succeeded at showcasing the
wide range of individuals who are now actively engaged in various parts
of the ecosystem.
This diversity of both demographics and ideas was perhaps best
illustrated in the day’s panel sessions, which included talks dedicated
to women and students working in the space as well as an ad-hoc
discussion on bitcoin 2.0 by legal thought leaders like Marco Santori and Jacob Farber.
The full scope of the community could also be seen in the major
business leaders who spoke at the event, representing a range of
verticals from bitcoin mining to e-commerce and merchant processing.
Through this, the conference was also able to highlight just how
interconnected the industry remains despite the increased VC interest
and mainstream media attention, a point alluded to by event organiser
Moe Levin in his closing remarks.
Levin said:
“Bitcoin began as a community initiative and prospers today for the same reason. Coming together, talking face to face, is essential to us remaining a community.”
Elsewhere, the day featured sessions led by Bitcoin Shop CEO Charles
Allen; CloudHashing’s Lukas Gilkey; and a surprise session led by
Charlie Shrem, who appeared via a telepresence robot.
Regulation debate continues
Although not as apparent in today’s discussions, New York’s proposed regulations
for bitcoin businesses proved to be a continued topic of interest – one
that was addressed most forcefully by Bitcoin Association board member
and an outspoken critic of bitcoin regulation, Bruce Fenton.
Fenton delivered an impassioned speech to the morning audience that
encouraged attendees to question the information they have been
receiving from New York state officials.
Further, he suggested that NYDFS Superintendent Benjamin Lawsky may
be motivated by higher political office in his decision making, or that
the regulations may have been the product of his involvement with the
banking industry.
The regulation was also dissected during a panel on bitcoin 2.0
innovations, though there the proposal was viewed more as a
disappointment to a community that had expected to be given the same
room for experimentation that the Internet enjoyed during its formation.
The panel addressed how the laws would impart a number of
restrictions on the broad application of bitcoin’s underlying technology
in its attempt to ensure consumers are protected from financial harm,
and touched on the negative impact this could have on the ecosystem as a
whole.
Innovation ahead
The afternoon’s schedule was interrupted by the absence of BlockStream’s Austin Hill,
whose session never materialized. Levin was not able to comment on the
reason for the rescheduling, however, Hill did address the subject with a
presumably tongue-in-cheek tweet.
Ultimately, the session was replaced, however, by a diverse panel
discussing bitcoin 2.0 innovation, or the development of alternative
ways to apply bitcoin’s decentralized technology. The talk featured
Bitcoin Foundation general counsel Patrick Murck; Marco Santori; Ripple Labs CTO Stefan Thomas; Ethereum co-founder Vitalik Buterin; and Perkins Coie senior counsel Jacob Farber, among others.
The gathered speakers discussed broadly how bitcoin 2.0 projects are
innovating and adding to the bitcoin space, while touching on problem
areas such as how consumers could differentiate between the complex
offerings and when and if their related products could impact that
average bitcoin user.
Speaking to the consensus of the group, Farber said:
“There’s the notion that the [bitcoin] 2.0 ventures being a set of tools that aren’t mutually exclusive. I think there’s going to be more interlinking over time.”
In the talk, Thomas also built on points mentioned in his earlier
speaking slot, which addressed how Ripple is seeking to use smart
contracts with its latest launch Codius.
Similarly, Buterin echoed comments from his earlier speech, in which
he gave an overview of cryptographic systems, how centralized payment
methods like PayPal can be improved, and Ethereum and its ongoing
development.
BitPay moves mainstream
The extended breakdown of bitcoin 2.0 was contrasted by an earlier
talk given by BitPay executive chairman Tony Gallippi, who aimed to
broadly connect the company’s recent moves to illustrate how they form a
cohesive vision for taking the initial application of bitcoin
technology mainstream.
Gallippi discussed BitAuth, the company’s decentralized digital authentication platform, its new, open-source multisig wallet Copay and its new payroll API.
Notably, Gallippi suggested it may be this last offering that may be the most impactful of all, stating:
“It’s a benefit that employers can offer [bitcoin] to their employees. It’s something that people are asking for, more than half of IT professionals are interested in this.”
He added that payroll should perhaps be a larger focus for the
community, as most people throughout the world receive their local fiat
currency through this method.
Gallippi ended the talk by welcoming ESPN’s Brett Dulaney to speak about the Bitcoin St. Petersburg Bowl, which he said BitPay is seeking to leverage so that it provides maximum exposure for the entire bitcoin community.
Source : http://www.coindesk.com
Sierra Leone Fashion Company Brings Bitcoin to West Africa
Bitcoin’s potential to succeed in Africa is widely recognized within the industry.
It’s capable of transforming the way we send remittances
to the continent and giving the unbanked easy access to money quickly
and freely. It’s an alternative currency for anyone, but especially
useful in countries with unstable national currencies, and can reduce
the cost of cross-border trade.
In Freetown, Sierra Leone, an ethical fashion accessories company called Bureh
is taking the first step in creating a digital currency economy for
sub-Saharan Africa by accepting bitcoin via payments processor BitPay.
That its total bitcoin transactions have been few since it began
offering them in December doesn’t faze co-founder Daniel Heyman. Money
movement, he told CoinDesk, is the main opportunity in bitcoin – not
consumption.
Evidence of bitcoin’s transformative possibilities may be traceable across the continent. South Africa and Kenya
certainly have well-established bitcoin economies that continue to
progress. But so far, nothing on their level exists in West Africa.
Heyman said that stability and peace across the western region is at
an all time high, and that makes prospects rosier for Bureh’s business
and its possible role in the bitcoin ecosystem. He said:
“I personally am a big believer in the potential of bitcoin to leapfrog the existing financial infrastructure across sub-Saharan Africa. I’m not sure how quickly this will happen but in five years per se I could see a world where everyone has a bitcoin account tied to a cell phone, even in northern Sierra Leone where our fabrics are made. I could place orders from New York – which I do already – and also make payments.”
Business operations
Bureh launched in 2011. Its accessories are hand-produced in Sierra
Leone by well-paid local artisans, said Heyman, and made from
traditional fabrics sourced by local businessmen and entrepreneurs. The
collection is distributed in Sierra Leone, the US, Europe and China,
where it showed this April at Shanghai Fashion Week exhibition. The
company, Heyman said, reinvests half of its profits into start-up
companies in West Africa to promote entrepreneurship.
Heyman, who oversees his company from New York, said that the
business is less susceptible to foreign exchange risk than most. “But
our people, our employees, and our contractors are not,” he continued.
When the Sierra Leonean Leone (SLL) weakens against the dollar, Bureh
as a business isn’t at risk, as its revenue is mostly in foreign
currency, he explained, but that means everyone supplying services to
the company suffers.
He said:
“BitPesa in Kenya is an example of the sort of service we would love in West Africa. If we could send money straight to our management team and even employees in Sierra Leone – with lower costs and fewer delays – that would really improve our responsiveness and our ability to manage complex organizations.”
Bureh pays fixed fees when it wires money from the US, said Heyman,
but Sierra Leone banks automatically convert US$ into SLL. No specific
figures were provided in this interview.
“This is where the majority of the fees are hidden,” he said, “and
it’s hard to say exactly how much. Unlicensed exchangers offer rates
that are regularly five to 8% better.”
Looking to Kenya
BitPesa, the
bitcoin remittance service, and mobile money transfer service M-Pesa,
are valuable because they eliminate the risk and uncertainty of fees,
conversion rates, speed and fraud.
The global remittances industry is now worth over $500bn a year. In 2012, remittances to Africa alone were estimated at around $60bn.
Heyman said that West Africa has a long way to go if it’s going
to catch up to Kenya in mobile banking, but that progress is rising
throughout the region.
He added:
“I’m not sure Bureh will ever be a major player in the bitcoin space, but at this point we are big believers in its potential to make it easier to conduct business across borders and in places with underdeveloped banking systems.”
Source : http://www.coindesk.com
Bitcoin ATM comes to Canberra
Canberra has got its own Bitcoin ATM machine thanks to Aussie Bitcoin ATM provider ABA Technology.ABA Technology today opened Canberra's first, and the company's
third, Bitcoin ATM in the Canberra Centre, next to the 2nd floor food
court in the upmarket Canberra CentreThe Bitcoin ATM, ready for use immediately enables customers to buy
and sell bitcoins for cash. First time users are required to provide
identification and undertake a verification process before they can
trade bitcoins.
This will be the first opportunity
for Canberrians to buy and sell the global cryptocurrency with the
safety and convenience of transacting in a major retail shopping centre.
ABA Technology director Robert Masters said the ATM in the second
floor food court would allow a new user to create an account within
three to six minutes, instead of waiting weeks for verification using a
home computer.
"It's done firstly by setting a phone number,'' Masters told
reporters. ''It will send you a pin, you verify the pin, [and] it will
then ask you for a fingerprint and eye scan.''
"You can send money directly across
the globe with no fees, it's instantly traceable and secure, and there's
no bank or Western Union (type) intermediaries."
Canberra already has several cafes that accept the currency.
The news follows similar launches of machines in Melbourne, Sydney
and Brisbane. The Melbourne ATM is located on level two of the in the
Emporium Retail Centre.
ABA Technology's CEO Chris Guzowski told iTWire the
bitcoin ATM has full encryption security in place to protect consumers
and is compliant with international regulations concerning unlawful
transactions.
Guzowski also said customers in Sydney so far have ranged from
first-time users, to savvy technologists. “Our customer research shows
that many people have been using the machine to send bitcoins to friends
and family overseas. Many other users have been selling bitcoins and we
have seen sales of $50 to $5000 of bitcoins.”
Bitcoin, described as a "technological tour de force" by Bill Gates,
is a software-based payment system described by Satoshi Nakamoto in
2008, and is currently trading at around $660 for 1 bitcoin.
The company has the objective of installing 100 bitcoin ATMs in
Australia by 2015 and more than 500 globally by the end of 2016.
Source: The Bitcoin Channel
The 9 Biggest Screwups in Bitcoin History
Do
you know where your bitcoins are right now? Hopefully they’re still in
your wallet where you left them, but the history of bitcoin is littered
with human error, poorly implemented software and heists that would make
even the most hardened of Wild West outlaws tip their hat in respect.Bitcoin is a man-made, open-source technology – not a gift handed
down from the heavens. Just to drive that point home, here are the nine
biggest screwups in bitcoin history.
9. That time someone hacked 92 billion BTC into existence
On 8th August 2010 bitcoin developer Jeff Garzik wrote what could be
mildly described as the biggest understatement since Apollo 13 told
Houston: “We’ve had a problem here.”
“The ‘value out’ in this block is quite strange,” he wrote on bitcointalk.org,
referring to a block that had somehow contained 92 billion BTC, which
is precisely 91,979,000,000 more bitcoin than is ever supposed to exist.
CVE-2010-5139
(CVE meaning ‘common vulnerability and exposures’) was frighteningly
simple and exploited to the point of farce by an unknown attacker. In
technical language, the bug is known as a number overflow error.
So instead of the system counting up 98, 99, 100, 101, for example,
it broke at 99 and went to zero (or -100) instead of 100. In layman’s
terms, someone found a way to flood the code and create a ridiculously
large amount of bitcoin in the process.
The fix was the bitcoin equivalent of dying in a video game and
restarting from the last save point. The community simply hit ‘undo’,
jumping back to the point in the blockchain before the hack occurred and
starting anew from there; all of the transactions made after the bug
was exploited – but before the fix was implemented – were effectively
cancelled.
How serious was it? Bitcoin’s lead developer Wladimir Van Der Laan is
pretty blunt about it, telling me: “It was the worst problem ever.”
Perhaps, but bitcoiners have seemingly been trying to trump it ever since.
8. Erm, this version of bitcoin doesn’t work with my old one
Think about the amount of money being ploughed into bitcoin: $240m of venture capital funding to date. Now
think about the number of people who work full-time on the core
protocol (it’s two, by the way). The outcome of this disparity is rather
predictable – software problems that would otherwise be ironed out and
spotted by a team of well-resourced developers inevitably sneak through.
The most recent major issue occurred when Bitcoin Core version 0.8
was released in March 2013. Put simply, it wasn’t compatible with
previous versions.
Remember the terror that accompanied upgrading your old Windows PC
because none of the software would work afterwards? That happened with
bitcoin.Version 0.8 allowed for larger blocksizes than older versions could
handle. With half the network upgraded and the other half still
sitting on version 0.7 or older, the danger was that two versions of the
bitcoin ledger would emerge.
As with the 92 billion bitcoin problem, the community sounded the alarm and forced a hard fork back to version 0.7 while the issue was resolved.Disaster avoided, narrowly. But this wasn’t deep in bitcoin’s early
history – this was just over 12 months ago. It’s not for nothing that
people are calling for more resources to be devoted to bitcoin’s development.
Ok, that’s probably enough piling on to bitcoin’s core developers – on to everyone else.
7. Mt. Gox. Twice.
I’m going to keep this one short, because we all kind of know the
score on this one. Originally founded as a trading card site, Mt. Gox
grew to become bitcoin’s largest bitcoin exchange, helmed by French-born
Mark Karpeles who unadvisedly wrote all of the site’s code by himself
without oversight or review by others.
The outcome of this foolhardy approach to development? In 2011 Mt.
Gox was hacked, with the attacker driving the price down to just
fractions of a dollar from highs of $30 by mass selling on the platform.
Then this year the big one – $340m vanished and Mt. Gox toppled.
In a recent interview with the Wall Street Journal, Karpeles was apologetic, saying that “the weakest point of my company was management” – which is code, for “me”.
It’s not hard to find people who don’t believe Mt. Gox was hacked and
instead think that Karpeles ran off with the cash, but with a police
investigation ongoing the truth will hopefully come out and we’ll know
for certain just what went on at Mt. Gox.
6. Ever heard of bcc?
The US government’s recent auction of bitcoin seized from Silk Road
was a landmark in bitcoin’s story – as many have pointed out, it gives
some small sense of legitimacy to the currency in the sense that the
government wouldn’t auction off seized cocaine, for example. The US
government is willing to deal in bitcoin to some extent, a small but
important signal.
But it was also accompanied by its fair share of farce. Before the
auction the government accidentally emailed the potential participants
but forgot to bcc them, so everyone who received the email could see who
else had been emailed, meaning their names were eventually leaked.
Of course this kind of mistake is common – so common that even acclaimed bitcoin developer Amir Taaki made the mistake back in 2012 when he ran Intersango,
a UK-based bitcoin exchange that eventually closed down in late 2012
after its banking relationship with Metro Banks turned sour.
The upshot of the US government leak is that the people whose emails
were leaked were targeted by scammers, one of whom succeeded in dramatic
style. Sam Lee of of bitcoin fund Bitcoins Reserve received an email
claiming to be from a media company. The attached document was
supposedly a list of interview questions but actually linked to a
website prompting Lee to enter his password. When he did, the attacker took over his email and sent a message to the CTO, requesting a transfer of 100 bitcoin. Bye bye bitcoin.
But sometimes, attacks are far, far simpler than this.
5. If I’m messaging you for access to my servers, verify my identity
This isn’t going to be a list of bitcoin heists – oh boy are they fun
– but an honourable mention has to be given to Canadian Bitcoins, who
were the victim of an old-fashioned social engineering attack that has
to go down as one of the easiest ever executed.
Canadian Bitcoins’ servers were being run by a company called Rogers
Data Centre (who were technically in the process of taking the data
centre over from its previous operator, Granite Networks). A hacker was
allegedly able to steal 149 bitcoin, or around $100,000 at the time,
from Canadian Bitcoins by messaging Rogers Data Centre and just asking
for access to the servers.
That’s it. The hacker pretended to be Canadian Bitcoins CEO James
Grant over instant message – just by saying “I am James Grant”, there
wasn’t any fancy trickery going on – and was given access. “It’s ridiculous,” the real James Grant was reported as saying in the Ottawa Citizen, who broke the story.
Yes. Yes it is ridiculous. But not nearly as ridiculous as this next issue.
4. The end of auroracoin
Iceland is famous for aggressively prosecuting its bankers for their role in the financial meltdown of 2007/2008. So when auroracoin was announced in February, a cryptocurrency designed to be a national currency for Iceland, the stars seemed to have aligned perfectly.
Just months later, auroracoin is dead and all the hype dead with it.
The currency was ‘airdropped’ to Iceland’s citizens in late March,
with 31.8 auroracoin allocated to each citizen who had registered. The
few that claimed their coins are thought to have immediately sold
them off and the price of the coin never recovered after plummeting on
its first day in circulation.
Auroracoin’s fatal blow came from the insecurity of the network –
there was little incentive for miners to maintain the network and
process the few transactions made with the coin. As a result it was
vulnerable to attack from anyone with a modest amount of computing power
at their disposal.
Here are two good post-mortems of the entire fiasco, which go some way to casting doubt on the viability of alternative cryptocurrencies. Speaking of which…
3. If you’re going to play with magic beans, at least play with the magic beans everyone agrees have some value
For the last eight years, a bunch of Scottish developers have been
quietly beavering away up in Fyfe creating what they see as the future
of the Internet – totally decentralized, encrypted and anonymised.
Eight years is a long time to be working on any software project, but
this year Maidsafe finally had their big coming out party – a crowdsale
to fund the next stage of the project’s development.
But what were they selling, I hear you ask? A temporary
cryptocurrency, which will one day be exchangeable for the permament
cryptocurrency running on the Maidsafe network. Confused yet? You could
only participate in this cryptocurrency crowdsale with bitcoin or
another cryptocurrency, mastercoin.
Why risk your crowdsale by allowing people to buy in with a
practically worthless cryptocurrency like mastercoin? Nobody has a
freaking clue – Kashmir Hill at Forbes has a wonderfully detailed account of this whole situation: “I forgive you if you find it all confusing; so did most of the investment experts I spoke with.”
In the end, Maidsafe still successfully raised millions of dollars, but mostly in mastercoin, which isn’t really very helpful when bills need to be paid in fiat, or bitcoin (at a stretch).
2. Never forget: no backsies with bitcoin
What would you say is a reasonable fee to pay to transfer £100? If it
was within the UK, you would say there shouldn’t be a fee. If it was an
international transfer, you would probably be fine paying a significant
percentage, maybe 9% with WesternUnion or much less with new bitcoin remittances companies like BitPesa.
You would probably be bummed if you had paid 8000%, like the owner of this bitcoin address did in September 2013.
It’s unclear what caused the faulty transaction fees, but over the
course of a few days one bitcoin address added huge fees to its
transactions, essentially donating ridiculous sums of bitcoin to miners.
One transaction, totalling only 0.01 bitcoin, had an extra 80 bitcoin attached as a transaction fee (for reference, transaction fees are usually around 0.0001 bitcoin).
Something similar happened to this hapless Redditor, who made a simple typing error back in July 2013, attaching 30 bitcoin to a 38 bitcoin transaction.
In a world where the fact that transactions can’t be reversed is
considered by some to be a virtue, accidental transactions are stupidly
common. As bitcoin wallet software develops, incorrect transactions
might get caught in the same way Gmail catches your email if it has the
words “I have attached” when there aren’t any attachments.
But until then, people will continue to accidentally add incorrect transaction fees or even transfer 800 bitcoin to defunct Mt. Gox addresses.
1. That hard drive is never coming back
Of course the award for all time greatest bitcoin fail has to go to
James Howells from Wales, who sent £4.2 million to the landfill when he
chucked out a hard drive containing the private keys for 7,500 bitcoin.
Coming just a month after the news that Norwegian PhD student
Kristoffer Koch had bought himself a house after discovering an old hard
drive with 5,000 bitcoin on it (which he paid only $27 for in 2009),
James Howells’ landfill story felt especially painful.
There are many many more stories like these. Too many to include in
one piece, but let us know your favourite stories of bitcoin woe in the
comments below. Let the schadenfreude flow through you.
Source : http://www.coindesk.com
Trend Spotting: How to Identify Trends in Bitcoin Price Charts
Trends
play an important role in trading, giving traders a chance to
use patterns in the price data to make decisions based on more than
simple rises and falls, or worse, gut instinct. But how does one
identify and draw a trend on a chart?
When looking at bitcoin price charts like the one below, you can’t help notice how prices at times seem to move along invisible lines:
This can be seen whichever chart timeframe you look at, be it weekly, daily or on a 30-minute chart:
Trend lines and trend channels
The lines you see in the charts above are called ‘trend lines’.
However, it is apparent that prices not only follow trend lines, they
often move back and forth between two trend lines, an upper and a lower
trend line:
This is then called a ‘trend channel’ and it’s probably one of the most widely used concepts in technical price analysis.
One important aspect of trends is that they can be divided into shorter
trend segments, which again are made of even shorter segments:
Price trends are highly fractal in nature. This mean that they appear very similar, no matter on what time frame (ie: zoom factor) you look at them.
How to draw trend lines and channels
It is fairly easy to draw trends, all you need is an interactive
charting platform that allows you to draw on the charts, such as
Coinstackr’s Bitcoin Charts or ZeroBlock for example. Using the ‘line’ or ‘channel’ tools, do the following:
Drawing uptrends
Uptrends generally respect the lower supporting trend line more
accurately, so start the trend line at one of the trend’s lows (see
[1]). Then draw the line to one of the next higher lows (see [2]).
Depending on the tool used the line will automatically extend to the
right and/or left:
Note how the blue moving average indicator on the chart can help you
draw the line at a good angle. After drawing the line you will almost
always need to move it around a bit and adjust its angle so it touches
the trend’s price lows as accurately as possible. Trend lines never
perfectly fit prices, however, there will always be some price candles
piercing through.
Drawing downtrends
Downtrends are drawn exactly like uptrends, only that you start with the upper resisting trend line:
Advanced tip: Logarithmic charts
Exponential growth can often be seen in price charts, as shown by Bitcoin’s rally back in October and November 2013:
Exponential curves display as straight lines when plotted on a logarithmic scale. The same price series then looks like this:
Now, trend channels can be used to easily spot exponential growth. However, not all charting platforms offer logarithmic charts.
Using trends in trading
While trends can be useful, it is not advised to use them as the
only factor in any entry decision. Even if prices touch the lower trend
line of an uptrend and buying into bitcoin seems to make perfect sense,
always look for more confirmation from other indicators (eg:
other support and resistance key levels, volume analysis, price action
patterns) that this trend is not going to break and losing you money.
Ideally, you want to have confluence of more than one indicator to increase the odds in favour of a profitable trade.
Furthermore, don’t forget to always look for higher and lower time
frame trends. While it may seem like prices are in an uptrend on one
time frame, higher time frames may reveal prices are actually in a
downtrend, for instance. Many traders are not comfortable trading
against the trend, which is why they rather trade true to the motto ‘the
trend is your friend’.
Source : http://www.coindesk.com
European Union to review tax on Bitcoin trading
The European Union is to step in to determine the Value Added Tax treatment on the trading of cryptocurrencies, such as Bitcoin. Sweden has prompted the investigation, fearing its own initial tax pronouncement is being undermined by the UK’s revised position issued in March this year.
European Court of Justice to clarify VAT liability
Sweden has asked the European Court of Justice to give its opinion on
whether exchanging Bitcoin for traditional sovereign currencies is
liable to VAT. At the heart of this question is whether Bitcoin is a
currency (which is exempt from VAT) or a form of barter (subject to
VAT).
Source: The Bitcoin Channel
German Company Aims to Bring 1,000 Bitcoin ATMs to North America
A German company has entered a strategic partnership that hopes to have a large-scale bitcoin ATM network built up over the next year, CoinDesk reports.
Plans were announced this weekend at the North American Bitcoin Conference in Chicago, Illinois that BitXatm (who specializes in point-of-sale systems) of Munich is working hand-in-hand with California-based CryptVision to distribute 1,000 machines in the United States and Canada.
The companies plan to have most of the devices in operation by the end of the year.
The devices, also known as Sumo Pros, are quite flexible when it comes to operator options. The choices of which fiat and digital currency can be used are broad (they can be used in one-way or two-way configurations, allowing users to both buy and sell digital currency) and the devices will be free to “qualified” operators.
A qualification process will open this week, on July 25th.
Operators of the devices will also have a web-based back-end management system that will allow them to manage profits, monitor statistics, and even changes settings on the units remotely.
Bitcoin ATMs are becoming increasingly popular not only in the United States, but around the world. Their presence allows seasoned users and newcomers easy access to acquiring or selling digital currencies.
Source :.http://newsbtc.com
The Proposed Bitcoin Regulation “BitLicense” Could Shut Down Mining And Bitcoin Businesses In The US
NYS Bitcoin Regulation Proposal Could Shut Down Mining And Bitcoin Businesses In The US
One of the most respected and best Bitcoin Mining Pools is BTC Guild. It is run by Eleutrhria who hosts the pool in Nevada. They have a shutdown plan in place that would affect both BTC Guild and Scrypt Guild.
I and others have been having a conversation on BitcoinTalk about the situation. I will post his very pertinent thoughts and plans with links to the whole thread. Eleuthria is very astute and in my opinion the best non-P2Pool operator there is. To see him having to plan the closure of his business that serves so many is scary in a profound way. This is the kind of business death and closure that the proposed regulation guideline will have on many businesses. As a passionate miner who enjoys the whole ecosystem from the hardware, software and pool options I am extremely upset that this could happen. Stewardship of the blockchain is key to Bitcoin’s or any cryptocurrency’s survival. We have had 51% of the power taken by an uncaring company, and have survived all sorts of craziness, but the proposed regulation can kill Bitcoin in its tracks in the US.
Source : http://newsbtc.com
The Most Expensive Bitcoin Painting Ever Sold
Youl, a French artist, has represented the Bitcoin community in an astonishingly beautiful painting styled after the famous work of art by Leonardo da Vinci, the Last Supper, which he calls the Bitcoin Supper.
The painting, 140cm x 70cm, was originally offered more than three months ago, but it received a muted reaction. All changed very quickly when a post was made on reddit introducing the work of art to the wider Bitcoin community. Ever since, the bids increased higher and higher, reaching 4.65 BTC ($2,900) making it the most expensive Bitcoin painting ever sold.
The Bitcoin Jesus and Judas
The painting revolves around the green, human shaped center figure, who is wearing a blue Roman toga and a necklace fronting the B symbol. He could be the painter’s abstract representation of Satoshi, the creator of Bitcoin. However, a closer look shows a number of alphabetic letters engraved on the figure’s body in a very subtle manner which suggest that rather than the creator, the center figure represents the creation itself. The painter calls it Blockchain Jesus, a beautiful and intriguing representation of Bitcoin.
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To
the left, dressed as a stereotypical banker, sits Judas, who is holding
a wallet with the B symbol and is staring at the Blockchain Jesus while
seemingly in the process of taking a piece of bread. The Juda’s act is
being witnessed by the scientist at the far left and the grandmother,
who seems shocked, perhaps because she just found out that the wallet is
empty. For the Bitcoin Judas is none other than Mark Karpeles and MT
Gox, which caused directly or through negligence the loss or
“disappearance” of 650,000 bitcoins and
were previously directly blamed for the April 2013 crash and for the
near death experience that Bitcoin survived in late 2011 and early 2012.The Bitcoin Community
In one brilliant painting, the artist has captured a snapshot of the Bitcoin community as it stands today and has immortalized it in an art form. There is no player missing. There stands the scientist or the Core Developers at the far left with the beekeeper or the merchant next to him. There stands the coder or the professional immediately to the left with perhaps the intellectual or the Bitcoin celebrity whispering in his ear. There also stands the construction worker or the ordinary working man on the right holding off scammers, thieves or hackers from the blockchain. Anonymous is next to him, seemingly applauding or asking for attention.At the far left sits the gambling, speculating, SatoshiDice representation as shown by the ace cards on his chest, talking to what may be a beggar, get rich quick schemer, or a speculator. Next to him stands Youl himself, representing the artist more generally, who gave us this amazing work of art to celebrate our brilliant, active, resilient and close nit five year old Bitcoin community.
The active hand gestures and body language in the scene brings the painting to life and capture the buzz that is Bitcoin with entrepreneurs, financiers, intellectuals, coders, businesses, ordinary workers and artists all busy with bringing to full life and glory the magnificence of the blockchain, majestically sitting center stage. Witnessing all this is the shocked grandma who undoubtedly wishes that things could all go back to the more simple days.
Turning One Bitcoin into a House
This brilliant piece came to life through a collaboration of Bitcoincito – the seller of the painting – and Yoru, the painter of The Bitcoin Supper.The Bitcoin Supper is not the first work of art brought to us by Bitcoincito and his Project Bitcoin. The anonymous 31 year old who runs a philanthropic technology organization and goes by the name of Bitcoincito has ventured on a journey to turn 1 bitcoin into a house by making at least 20 international transactions, all in bitcoin, each bigger than the other, styled in the way of Kyle MacDonald, who turned a single red paperclip into a house with fiat money.
The Project Bitcoin has already had eight transactions, including a beautiful orange leathered wallet (pictured) carrying the B symbol on the front. The Bitcoin Supper painting is the ninth transaction in the project to be followed by many more in what is likely to become an epic adventure.
Source :http://www.cryptocoinsnews.com
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