The Bitcoin Word Game

Bitcoin lending platform Bitbond gets €200,000 in seed funding

Bitcoin lending platform Bitbond has secured €200,000 (=$268,000) in seed funding, arranged by venture capital firm Point Nine Capital.

Bitbond lenders earn interest on their bitcoins, loaned to regular borrowers or to fund bitcoin projects. Borrowers needed to supply financial information in order to determine their creditworthiness. If rejected, they can also post a load request.

The service is effectively a p2p lending platform, not a bank or a lender on its own. Lenders can therefore earn more interest than they would through traditional means, and borrowers gain access to capital which they may have otherwise not enjoyed. Since launch just over one year ago, it has reportedly facilitated almost 200 loans in over 100 countries.

Despite the setbacks faced by Bitcoin in its evolution, co-founder and CEO Radoslav Albrecht remains optimistic:

“There was huge disruption and of course people did lose money, but it is over, and contrary to what many people thought at the time, it has not deterred businesses from using bitcoin. When I look at our user sign-ups, they didn’t decline after the Mt Gox crisis, they actually went up. We see the overall trend as more people getting engaged with bitcoin.”

Mainstream engagement will be key, as the bitcoin lending industry had previously developed a bit of a stigma for facilitating Ponzi schemes. The more it’s adopted, the harder it will be to keep such schemes out of the public eye.

Source : http://dcmagnates.com

BitcoinExpo 2014 in Shanghai is coming and promises to be the best place for your business

After a very successful Central European Bitcoin Expo in Vienna, the new opportunity to build, expand your business partnerships, meet new people and enjoy atmosphere of special event is coming. The same organizers are preparing a remarkable event BitcoinExpo 2014 in Shanghai. 

The Expo is going to take place on 19^th – 21^th September. The Expo has already many confirmed speakers such as Jean-Marie Mognetti, Aaron Koenig, Leon Li, Vitalik Buterin, Martin Westhead, Brett Stapper and many other special people from the world of Bitcoin and Digital Currencies. One of the main aims of BitcoinExpo 2014 is to break new ground for Western companies in China by connecting them to local key players and securing their exposure within the local market. The largest conference and expo acts as a center for prominent local companies to establish valuable relationships with important partners from overseas. BitcoinExpo is focused on knowledge and Bitcoin community. 

One of the new big players is also BUMarket, whose aim is to “help network business people all around the world to get future”, as written on the official website. BUMarket is enriching the family of BitcoinExpo and will be also a more strategic partner for the event. Attendees can also look forward to other partners such as BTC ROBOT, SatoshiLabs, Shanghai Daily, Seoul Bitcoin and PRYPTO.

The early birds are sold out; however, there is a good news for you that there are still a few tickets left. If you want to be a part of this unique event do not hesitate to buy them as soon as possible and spend a great time with business partners, investors, entrepreneurs, exhibitors, enthusiast and also the organizers. See you in Shanghai! 

http://bitcoinexpo2014.com/

sebesta@bitcoinexpo2014.com

Source : http://thebitcoinnews.co.uk

Bank of Canada Research: Cryptocurrency Arbitrage Doesn’t Exist

A new working paper from Canada’s central bank has found little evidence that arbitrage opportunities in cryptocurrency markets exist.

The paper, Competition in the Cryptocurrency Market, analyses 10 months of publicly available data from exchanges like BTC-e and Cryptsy, from May 2013 to February 2014.

Examining how ‘network effects’ (the phenomenon of new users augmenting the value of a technology) affect competition in the cryptocurrency economy, the paper looks at competition between both cryptocurrencies and cryptocurrency exchanges. The authors write:

“For exchanges, we find little if any evidence of arbitrage opportunities. With no arbitrage opportunities, it is possible for multiple exchanges to coexist in equilibrium.”

The paper was written by Hanna Halaburda, a senior analyst in the bank’s currency department, and Neil Gandal, chair of the Eitan Berglas School of Economics at Tel Aviv University.

Data and methodology

For data, the authors have used ‘closing rates’ of bitcoin, litecoin and other digital currencies from exchanges BTC-e, Cryptsy, Bitstamp and Bitfinex for the period between 2nd May 2013 and 28th February this year.

This data was obtained from Cryptocoinscharts.info and the closing rate is the given digital currency’s price at midnight GMT, according to the paper.

In analysing competition between exchanges, the authors looked at ‘two-sided network effects’. This is a phenomenon that arises when buyers and sellers in a given market both compete for a larger number of counterparties: buyers of bitcoin prefer markets with more sellers, while the opposite is true of sellers.

The aggregate effect of this phenomenon is the creation of “thicker, more liquid” markets. A large exchange possesses more liquidity, and over time, it will dominate the exchange market. In this scenario, network effects would give rise to a convergance in digital currency trading to a single exchange over time.

But other network effects are also simultaneously at work. The ‘negative same-side effect’ suggests that sellers, while seeking markets with more buyers, also wish to avoid competition, or markets with large numbers of sellers. The opposite holds true for buyers.

To determine the aggregate network effects at work between exchanges, the authors looked at prices for three currency pairs, BTC/USD, LTC/USD and LTC/BTC, on three exchanges: BTC-e, Bitstamp and Bitfinex. It ran two tests, correlation and regression analysis, on the data.

Arbitrageurs dispute the findings

The paper’s correlation analysis found that the BTC/USD currency pair prices were highly correlated between BTC-e and Bitstamp. It found the same for the LTC/BTC pair across BTC-e and Bitfinex.

Regression analysis yielded similar results, with the paper concluding that arbitrage opportunities were unlikely to have existed across the exchanges in trading any of the currency pairs.

However, two traders who were alerted to the paper dispute its conclusions and methodology. Arthur Hayes is a former equity derivatives trader at Citi and the chief executive of BitMEX, a bitcoin derivatives exchange. He makes money as an arbitrageur, trading between various exchanges. He observed:

“I make a significant portion of my income from conducting arbitrage between different bitcoin exchanges. The [second half of 2013] was a very profitable time for arbitrage strategies.”

In other words, Hayes is an arbitrageur who profits from a market phenomenon that the Bank of Canada’s working paper says does not exist.

Hayes even offered a historic example of a profitable arbitrage strategy:

“For almost a week, there was 20-40% arbitrage [opportunity] between European and Chinese exchanges trading at considerable premiums. The reverse, where China traded cheaper than Europe, was also witnessed [this spring] when [China's central bank] made announcements relating to banks dealing with bitcoin exchanges.”

Proposed improvements

In Hayes’ view, the authors couldn’t pick up on arbitrage opportunities for two reasons: comparing prices between too few exchanges and using regression analysis instead of a simple time series of price data.

Hayes pointed out that paper only compared prices between European exchanges. For a better insight the authors should have compared prices across continents, he added.

“The issue is that these guys looked at European exchanges versus each other and Chinese exchanges versus each other. They didn’t compare all exchanges versus each other.”

Another trader, Joseph Lee, created arbitrage bots that managed his trading for a year, netting him hundreds of thousands of dollars. He has since retired the bots to focus on derivatives exchange BTC.sx. Lee also disagrees with the conclusions of Halaburda and Gandal’s working paper.

“Without a doubt, arbitrage opportunities have existed in [the period of study] and will always exist in the market. They even exist in the current financial market which has trillions of dollars of liquidity,” he said.

Lee points out a flaw in the paper’s methodology: the authors relied on ‘closing rates’ for price data, which Lee says would never show an opening for arbitrage.

Closing rates are a snapshot of prices at a given time (in this case midnight GMT) and they are used to represent the currency’s price for a 24-hour period. However, because arbitrage opportunities are fleeting – they disappear in seconds as arbitrageurs see them and pile in – closing rates aren’t sensitive enough to reveal these moments.

Lee added:

“The study has to be done on actual traded prices if it’s looking historically. Arbitrage opportunities don’t last 24-hour periods. In bitcoin they last minutes, if not seconds.”

Other findings and caveats

The paper briefly acknowledges that its use of daily price data may have problems. It notes that arbitrage opportunities may be found if price differences between exchanges are compared at different times during a day.

“We leave this more detailed analysis to further research,” the authors noted towards the end of their paper.

Halaburda and Gandal also came to a number of other conclusions about network effects and cryptocurrencies. The pair found that bitcoin enjoyed positive network effects, but that other currencies, like litecoin, were gaining ground. Bitcoin may not be able to maintain its dominant position in the long run, it concluded.

The Bank of Canada’s working papers are intended for publication in peer-reviewed academic journals, but are works in progress. They are published with the intention of soliciting feedback from a technical audience. In the case of Halaburda and Gandal’s paper, bitcoin’s arbitrageurs have made their opinions known.

Source : http://www.coindesk.com

Gavin Anderesen Suspects Ponzis in Bitcoin Cloud Mining

Gavin Andresen had some harsh words for the Bitcoin cloud mining industry on Reddit.

Gavin Andresen, perhaps the most respected and well-known Bitcoin developer today, made a rather interesting statement about Bitcoin cloud mining the other day, and the strange thing is that it went basically unnoticed by the community as a whole. Redditor /u/zapt0 asked the /r/Bitcoin community about mining contracts and whether or not they could be solid investments, and most of the responses were rather negative when it comes to the long term prospects of earning money through one of these cloud mining contracts. Gavin echoed the general sentiment found in other responses, but he also took his view on the subject to the next level by stating, “I suspect many of [the Bitcoin cloud mining companies] will turn out to be Ponzi schemes.”

Gavin’s Reddit comment on Bitcoin cloud mining.

Cloud Mining Ponzi Schemes Shouldn’t Be Surprising

Although many will find this kind of statement from Gavin to be nothing more than hyperbole, the reality is these kinds of Ponzi schemes wouldn’t be out of the ordinary in the Bitcoin ecosystem. There have been plenty of scams and frauds in the Bitcoin community over the years, so it wouldn’t be crazy to think that these kinds of bad actors could also find their way into the Bitcoin cloud mining space. There have been fraudulent investment schemes promoted on the Bitcointalk forums, Bitcoin wallet providers who have gone missing overnight, and ASIC mining hardware manufacturers who seem to have no intention of shipping their products on time, so finding scam artists in the Bitcoin cloud mining marketplace would actually be par for the course when it comes to Bitcoin-related businesses.

Are Cloud Mining Companies Hurting Bitcoin?

CEX.IO is the trading platform that brought cloud mining to the masses through their GHS asset on their cryptocurrency exchange. 1 GHS is equal to 1 GH/s on the GHash.IO mining pool, and the popularity of this simple mining process is what ultimately led to the 51% attack concerns related to the large pool of miners. Plenty of people in the Bitcoin community have denounced GHash.IO due to the large share of the Bitcoin network hashrate that they were able to attain in early 2014, but these kinds of cloud mining companies should not be blamed for simply reacting to the economic incentives created by the Bitcoin protocol. Bitcoin is supposed to be a trustless ecosystem, which means changes need to be made at the protocol level rather than in the minds of people who we’re being forced to trust with the integrity of the network.

Mining in the cloud could be a problem for Bitcoin centralization.

Avoiding Fraudulent Bitcoin Companies

The requirement of trust is something that is being slowly removed from the Bitcoin ecosystem as a whole, and companies who continue to force their customers to trust them will find it difficult to succeed in this highly competitive market. The best way to avoid any kind of fraud or scam in Bitcoin is to remember that you shouldn’t need to trust someone else with your money. When you’re looking for a place to store your bitcoins, try not to use a service that takes control of your private keys. At the end of the day, whoever holds the private key to a Bitcoin address is the one who actually owns the bitcoins. When it comes to Bitcoin mining, it may be a better idea to simply sit on the sidelines. Trusting a hardware manufacturer to deliver your equipment on time has proven to be a rather unwise decision. Keep in mind that one of the most incredible features of Bitcoin is that it removes the need for trusted third parties in many different areas of finance.

Source : http://www.cryptocoinsnews.com 

8,000 Convenience Stores in Argentina Now Sell Bitcoin

BitPagos has launched Ripio, a new bitcoin brokerage service that allows consumers in Argentina to buy small amounts of bitcoin at more than 8,000 convenience stores.

To achieve this goal, Ripio will integrate with TeleRecargas, a popular mobile phone service that allows consumers to prepay for cell phone plans at a network of partner convenience stores across Argentina.

Argentina and Palo Alto-based bitcoin merchant processor BitPagos raised $600,000 from prominent bitcoin angel investors earlier this year. The company’s CEO Sebastian Serrano told CoinDesk that Ripio aims to target underbanked consumers as well as existing bitcoin users who want an easy way to buy bitcoins at a physical location.

He explained:

“You can go to any location, give them your account in Ripio and the amount of pesos you want to get in bitcoins. Boom: you have some bitcoins. It’s going be extremely easy to use and to buy bitcoins easily, securely and near you, even if you don’t have a bank account. We think that this is going to push adoption.”

For now, the service will only be available in Argentina, though Serrano sees the service as broadly appealing to consumers in other Latin American markets that could benefit from an easy bitcoin-buying solution.

In particular, Serrano said BitPagos is looking to expand Ripio to Venezuela, but that this program expansion will take time to achieve.

How Ripio works

While Ripio works primarily at physical locations, Serrano indicated that users must first complete an initial registration on the platform’s website.

Users next print their Ripio ID and search the service’s map for available stores. Still, Serrano is confident that these elements of the service will be convenient for on-the-go users or those still learning the basics of bitcoin management.

Serrano explained:

“You can do the registration on your cell phone, you get your account number, you look at the map with places near you, you walk in and say you want to buy some bitcoins with Ripio and you say the amount in pesos you want to buy, that’s it.”

A new consumer offering

In the interview, Serrano sought to frame Ripio as a novel service that was different from the other offerings currently available in what has increasingly become a fertile area for bitcoin adoption due to lingering economic uncertainty.

Serrano suggested that because of Argentina’s unique needs, his competitors in the ecosystem may face challenges modeling their services after existing platforms available internationally.

“So far, most of the bitcoin services in Argentina have been trying to replicate models that work in other countries,” Serrano said. “Trying to build exchanges or do an exchange where you deposit bitcoins for doing trading. We think there is a need for this to expand the market.”

Notably, Ripio will use Brazil-based bitcoin exchange Mercado Bitcoin to determine the price at which it sells bitcoin to consumers.

Spreading awareness

Of course, Serrano is also conscious of the fact that Ripio will need promotion in order to resonate with one of its key demographics: underbanked consumers.

However, he suggested that Ripio’s launch will also coincide with the release of marketing materials that will increase general awareness of bitcoin.

He noted that Ripio will send out marketing materials to TeleRecargas’ partner stores in conjunction with the launch, but that the service is also seeking to leverage Argentina’s passionate bitcoin user base.

Serrano concluded:

“We’re also going to focus on the bitcoin community to deliver us the existing bitcoin users. But, I think this is also going to get more awareness just by being in high traffic locations.”

Ricardo Minicucci, president for TeleRecargas, echoed this sentiment in a statement, saying:

“For us this represents the possibility of providing a link between the offline and online world efficiently, plus the customer intimacy that characterizes Telerecargas will enable a natural adoption to the bitcoin system”

Source : http://www.coindesk.com

Could Avalancha Become Argentina’s Overstock?

Argentina has long been looked to by bitcoin enthusiasts as a fertile area for consumer adoption due to the unstable nature of the country’s native currency, the Argentine peso.

Still, while a growing number of Argentines are using bitcoin as an alternative store of value in a time of economic turbulence, the country has yet to see many merchants capitalize on digital currency’s rising popularity in the region.

BitPagos, the country’s leading bitcoin merchant processor, for example, reports it has enrolled just 600 merchants to date. By comparison, major US processors such as BitPay and Coinbase have each signed up more than 30,000 small and large businesses.

However, the narrative surrounding merchant bitcoin adoption in Latin America may be primed for change. One of the larger merchants now serving local bitcoin users is Avalancha, the newly launched online electronics and home goods store that on 7th August announced a partnership with local bitcoin payment processor BitPagos and Latin America-focused bitcoin exchange Bitex.la.

Speaking to CoinDesk, BitPagos CEO Sebastian Serrano indicated that he is optimistic that Avalancha will become the major merchant that inspires other online retailers to begin seriously considering both bitcoin and his company’s service.

“I think it’s going to be a catalyst that is going to help us increase adoption even more. It has been covered in major newspapers and it’s going to be similar to Overstock in the effect internally for the online companies.”

Avalancha aims to generate 25m pesos in revenue by the year’s end, or roughly $3m.

Argentina’s Overstock moment

The comparison to Overstock, considered by many to be the first major retailer to enter the bitcoin ecosystem in January of this year, is a lofty one. Not only has the US-based company accepted bitcoin, but it has also become a visible leader in the space, exploring the ecosystem’s more experimental technologies and appearing at major bitcoin conferences.

Still, the comparison could hold merit due to the fact that overall bitcoin awareness in Argentina is low among merchants. Miguel Klurfan, CEO of Avalancha, told CoinDesk:

“I think the average merchant is not fully aware of bitcoin. They probably heard about bitcoin but they certainly don’t have a clue of how it works and the benefits it might have for their business.”

Despite its relative newcomer status – Avalancha launched in May – Serrano believes the retailer has the right connections to become a major player in Argentina’s e-commerce market.

Avalancha is notably funded by Newsan Group, a leading manufacturer in Argentina, a significant connection that Serrano believes isn’t to be understated.

“Argentina has very high restrictions for importing, so it’s very difficult to import anything. One way to import [products] is to assemble that product in the country. Newsan assembles Samsung products, laundry machines and more.”

Building the ecosystem

Klurfan told CoinDesk that Overstock was an influence on his company’s decision to accept bitcoin, though he acknowledged that Dell’s association with the digital currency was also a factor.

The CEO said that Avalancha has been watching Overstock’s announcements and monitoring its bitcoin sales updates. He, too, is optimistic about how his company could provide a similar success story to the Latin American bitcoin ecosystem, saying:

“[Bitcoin] will need some new players to get involved in the system for it to be able to work as a means of exchange, and that’s the part that, at Avalancha, we can help. We can help to make bitcoin good for exchanging products and not only for storing value.”

Still, Klurfan suggested that he doesn’t expect to see the sales success that Overstock and other large merchants have enjoyed in the US, adding:

“For us, accepting bitcoin is a way to express our belief in the currency and its potential as a sales generator in the mid-term. But, we don’t expect huge sales coming from bitcoin in the near future.”

Weighing the risks

Despite warnings from Argentina’s central bank regarding bitcoin payments, Klurfan said that he and his company see a bright future for bitcoin and its related technologies.

Klurfan told CoinDesk that one of the central reasons Avalancha adopted bitcoin is because the company believes it simply offers consumers the most convenient way to way for goods, explaining:

“We are focused on giving the best online experience available to our customers and I believe it’s much easier to pay with bitcoin than it is to pay with wire transfer or pay with any other payment.”

Though bitcoin’s price volatility may be a turnoff for merchants in developed countries, Klurfan believes that in Argentina, this pain point doesn’t exist for his business or his customers.

For example, he noted that for him, dealing with currency fluctuations is simply a way of life.

“Our currency has been losing value since the day I was born,” he said. “I have seen it equal with the dollar and now it’s 8.25 pesos to the US dollar. [...] I don’t see any difference between the volatility of bitcoin and the volatility of the peso.”

Market advantage

Klurfan went on to explain that, as a new player in Argentina’s e-commerce space, Avalancha may have been uniquely primed to capitalize on accepting bitcoin.

Klurfan sees his company as fundamentally different than other more traditional merchants, adding:

“We are 100% online, we were conceived from the beginning as a technology company.”

Furthermore, this positions the company to believe in bitcoin as a technology, and to be able to better understand how it might be able to more fully realize its capabilities over time.

“I believe that since Argentina is a country that is used to unstable currencies, the adoption of bitcoin will be faster than in other places,” he added.

Regulatory threat looms

Still, the biggest determining factor to the long-term success of Avalancha’s bitcoin payments plan will be how Argentina’s government decides to react to digital currency use more broadly.

For instance, Klurfan acknowledges that Argentina could embrace similar policies as Ecuador and Bolivia, effectively banning the use of non-fiat currencies, concluding:

“In case the government decides to crack down bitcoin, we will be very disappointed and have no choice but to adapt to the new regulatory context.”

Conversations with CoinDesk and other Latin American business leaders have found there is widespread fear about how Argentina could react to bitcoin, though many are optimistic it could lead the way in bringing the innovative technology to the mainstream 

Source : http://www.coindesk.com

The Bitcoin Word Game

Words are very important. Even more so with bitcoin, competing constituencies craft specific words and phrases to evoke a predetermined image or outcome.

With a little help from political wordsmith observer Bill Maher, let’s look at some popular examples of this practice in action.

Avoiding the negative

For a long time, assisted suicide as a positive right with legal protections had a difficult time gaining acceptance. Once it was phrased as aid in dying, several US states passed legislation protecting the practice.

Gay marriage is another. Political opponents deployed the phrase when they wanted to convey the idea that the sanctity of marriage was under assault or its meaning was being diluted. Once it became termed marriage equality, it was difficult to be against because it then sounded trendy, inclusive and friendly. Everyone is for equality.

Lastly, when we hear the phrase drilling for oil, we imagine huge nameless corporations raping the wilderness to satiate an out-of-control demand for fossil fuel. However, re-brand it as energy exploration and we visualize a futuristic and responsible effort to transform our planet’s energy needs.

Steering public perception

In the evolving lexicon that is bitcoin, governments and the media consistently deploy phrases to gain an advantage in steering public perception. No secrets there. But, few of us can peer through the facade.

Here are some of the easy ones:

Privacy has become anonymity. Of course, people desire privacy and they rightly should take it for granted, but the word anonymous implies that it is secrecy being used for something nefarious.

Personal purchases have now become untraceable transactions. Remember that first drug store item that you wanted to keep as a personal purchase, so you made sure that no one saw you and that you used cash.

Finality of payment has become irreversibility. In the eyes of regulators, irreversibility has come to be associated with criminal transactions because who else would see the need for a transaction irreversible by a third party. Of course, this is ridiculous because many transaction classes have a proper need for payment finality.

Interestingly, this choice of wording permits opponents to cast bitcoin as anonymous, untraceable, and irreversible – all fitting into the dark persona of the notorious Guy Fawkes mask.

By the way, paper cash in your wallet today already possesses those attributes (analog equivalent rights), which is why we are witnessing a global war on cash or, as its proponents claim, a modern cashless society.

Moving into the regulatory sphere – and no jurisdiction is exempt – the stakes are higher, so predictably the labels have become more elevated.

Financial privacy has become money laundering. More than 30 years ago, money laundering did not exist because it is a made-up crime, as Doug Casey says, and the so-called thoughtcrime of finance.

Unfortunately, individuals seeking financial privacy have been cast as promoters of money laundering ever since.

Financial surveillance has been re-branded as patriotic anti-money laundering and know-your-customer guidelines. Realistically, it is still surveillance on a mass scale whatever you choose to call it.

Financial censorship has been re-positioned as an economic blockade, as in the international cases against WikiLeaks, Iran, and most recently Russia.

A positive spin

Every day, more and more young people embrace bitcoin. This is an encouraging demographic for the future of the cryptocurrency and they get it too.
For them, no government backing really means banks not required. Ignoring capital controls really means truly global with 24/7 availability. No third party for safety really means protection from financial surveillance. And, not centrally controlled really means easy person-to-person payments. Those are the things that matter most to that important demographic.
In economics, deflation is just another way of saying increased purchasing power.
In money, legitimacy is defined by community acceptance not by government decree. Triumphantly, bitcoin is money without government. If we don’t defend ourselves in the word game, all that remains are the sheeple lest we be called domestic terrorists.
Please add your own important bitcoin words in the comments area below. 

Source : http://themonetaryfuture.blogspot.in

The Bitcoin Price is Crumbling - Why ?

The Bitcoin price continues the downward trend with hitting an all time low since mid June 2014 with 550 USD per Bitcoin. Two days ago our author Venzen Khaosan posted a Bitcoin price analysis that could help explain why the price is falling the way it does now. Beyond the below factors which are always driving down the price, one large event that may be triggering this price drop is the sale of Ethereum’s bitcoins.

The Technical Bitcoin Traders

As Venzen’s article explain:

At the time of writing, the Bitstamp exchange price has entered a holding pattern around $575. Additional downside seems inevitable, and chart analysis suggests that the current wave down may be the last. However, it may also be the strongest wave of the current decline.

And:

For now, the primary target of decline is $525, with further analysis keeping an eye on how price negotiates way point $556.

People that trade bitcoins on a regular basis, either by day trading, bots, or going long, tend to follow the different analysis and inputs which in the end makes the price move. If the price falls below a so-called “support level”, more people may sell their bitcoins because they fear it may fall even lower. Bots however, that are made by humans with fear, got a “stop-loss” mechanism that tells them to start selling bitcoins if the price falls below a certain level.

The big Merchants and Bitcoin Payment Processors

Most merchants that accepts Bitcoin like Dell, Expedia, Overstock, and so on, immediately sells their bitcoins to receive the correct amount in USD instead. This can cause a downward sell pressure that will make the price fall if the buying capacity is below the selling capacity.

Bitstamp has changed their bank

This could have caused some uncertainty regarding whether or not the popular Bitcoin exchange may be being pushed towards regulation or a shut down.

Bitcoin miners sell

About 5 000 bitcoins are being mined each day. This leads to a sell pressure of more than 2 million USD a day (if all miners sell their bitcoins to cover expenses).

Uncertainty of where Bitcoin is heading

The Bitcoin price was quite stable in July with little price movement even though most of the news was positive. The only news that some feel did inflict damage was the “hard” NYDFS proposed BitLicense. A proposal to regulate Bitcoin and Bitcoin affiliated companies. But was this news really damaging, or in the end, something that could attract even more users and businesses (to places other than NY)? Do people in the Bitcoin community fear regulation that much? Or are Bitcoin’s holders more tenacious than that?

Source : http://www.cryptocoinsnews.com

Singapore Head Regulator: Digital Currencies ‘Have a Role to Play’ Despite Risks

The Managing Director of the Monetary Authority of Singapore (MAS), Ravi Menon, has commented on bitcoin and digital currencies in an interview, saying they “have a role to play” in the future.

Speaking to industry publication CentralBanking.com, Menon answered questions about whether money should remain under the control of central banks, and why the MAS had decided to regulate “virtual currency intermediaries”.

He said:

“It is hard to divine how technology and practices will evolve, 20 or 30 years from now. I would say virtual currencies have a role to play, but I doubt they will replace the fiat money that central banks issue – but I could be wrong.”

Digital currencies’ biggest advantages were cost-efficient and fast transfers, he said, but they lacked any central bank backing.

Wildly fluctuating prices also meant digital currencies did not meet the basic requirement of money as a store of value, he added.

“Nonetheless, digital currencies have a role to play, which is why we have not sought to ban them, or make it more difficult for them to operate. We still have Bitcoin ATMs here in Singapore. But we do see a clear and present danger in the form of money laundering and terrorism financing risk, because of the anonymity in virtual currency transactions.”

Repeating the oft-heard statements from central banks and financial professionals about bitcoin’s supposed role in money laundering and financing of terrorist activities, Menon said the anonymity of virtual currencies was a danger.

All intermediaries would have to follow know-your-customer (KYC) and associated regulations, he continued, saying digital currency companies would welcome this news as it would “weed out intermediaries that use virtual currencies for illicit purposes”.

The risks would be addressed “in a targeted way” to allow innovation to still take place.

Singapore’s fintech pedigree helps bitcoin

David Moskowitz, founder of Singapore-based bitcoin trading platform Coin Republic, told CoinDesk Singapore’s status as a world financial hub meant it couldn’t afford to ignore bitcoin and other financial technology innovation.

He said:

“MAS clearly sees the potential that cryptocurrencies hold for local economic growth. As the nature of finance changes with technological advances, the old models will become obsolete. As they did with the hedge fund, banking, and insurance markets, the government of Singapore has an excellent track record of foreseeing the next wave of opportunity for economic growth of her economy.”

“I don’t  think they will sit idle while London, or Isle of Man, attempt to take leadership in the digital currency space. The public statement by MAS director Ravi Menon, and recent ‘bitcoin experiment’ by their sovereign wealth fund reaffirms this.”

Singapore’s government-owned investment company, Temasek Holdings, made headlines in the digital currency world in June when its chairman spoke about its experiments with bitcoin, including staff using Blockchain wallets and donating bitcoins to their preferred charities.

A variety of bitcoin startups

Singapore was marked early on as a potential haven for bitcoin and digital currency development. As a business and financial-services-oriented city-state, it currently has S$1.82tn ($1.45tn) of assets under management and is also a regional hub for IT startups.

It has more than eight bitcoin ATMs installed from four different manufacturers, including the native-grown Tembusu. In May, representatives from a number of digital currency companies launched the Association of Cryptocurrency Enterprises and Startups (ACCESS) to represent the industry in discussions with other businesses and policy-makers.

MAS had previously told Coin Republic that it “would not interfere” with bitcoin or attempt to regulate it, but then announced in March this year that it would take steps to regulate bitcoin exchanges and ATM companies to address risks associated with money laundering and terrorism financing.

Source : http://www.coindesk.com

US CFPB: We Will Continue to Monitor Bitcoin

The US Consumer Financial Protection Bureau (CFPB) incited a mixed response from the bitcoin community on 11th August when it issued a new warning to US consumers.

The release evoked sometimes strong language in an attempt to warn the public about the potential dangers of engaging with the bitcoin ecosystem, with CFPB Director Richard Cordray likening the ecosystem to a virtual ‘Wild West’.

Following the release of the guidance, CoinDesk reached out to the CFPB for more details on how the agency has been working to educate its employees and consumers about bitcoin and digital currency, and to highlight its response to the concerns of the bitcoin ecosystem.

Though the agency stopped short of addressing industry concerns, a spokesperson for the US consumer protection group told CoinDesk that it is still actively working to understand the potential consumer protection issues by all emerging technologies, and that bitcoin is just one part of its overarching mandate.

The CFPB said:

“We will continue to carefully monitor the development of digital currencies as they relate to the consumer financial marketplace and, if necessary, take appropriate steps.”

The CFPB declined to comment on its choice of wording in the guidance.

However, the agency suggested that its first priority is to carry out its responsibility of ensuring US consumers are protected in the financial marketplace.

Putting consumers first

The CFPB further directed CoinDesk to more general information about the agency, in which it aimed to illuminate the nature of the CFPB’s most recent statements regarding bitcoin.

For example, the CFPB stressed that it was introduced specifically to address issues consumers face in the financial marketplace and to empower them to make sound financial decisions.

The agency said:

“The CFPB was created in the wake of the financial meltdown to stand up for consumers and make sure they are treated fairly in the consumer financial marketplace. Helping consumers help themselves with tools and financial education is core to the Bureau carrying out its mission.”

It added that it currently compiles tips for consumers on a wide variety of verticals in the financial sector, including remittances, credit cards and now digital currencies.

Federal bitcoin policy evolves

The CFPB did, however, state it is working with a number of agencies to develop US federal policy on bitcoin, though it did not indicate what issues the organisations might be evaluating.

Pointing to the previously published Government Accountability Office (GAO) report, the CFPB noted it is currently working with the following groups to better understand digital currencies and their effects on a wide range of US interests:

• Financial Action Task Force (FATF)
• Interagency Bank Fraud Enforcement Group
• International Organized Crime Intelligence and Operations Center (IOC-2)
• Terrorist Finance Working Group’s New Payments Systems Ad Hoc Working Group
• Virtual Currency Emerging Threats Working Group.

The CFPB was first revealed to be contributing to the ongoing US policy discussion on digital currencies this June.

Source : http://www.coindesk.com