United Way Becomes Largest Nonprofit to Accept Bitcoin

Nonprofit United Way Worldwide announced today that it now accepts donations in bitcoin, becoming the latest charitable institution to adopt the digital currency into its operations.

The US-based organisation claims to be the largest privately held nonprofit in the world, raising more than $5bn annually with more than 2.8 million volunteers, 9.7 million donors and community initiatives, and partnerships with such companies and organisations as the National Football League (NFL), Exxon Mobile, and General Electric.

The move signifies the further alignment of the charity with its mission to mobilize its activity in improving education, helping people achieve financial stability and promoting better health.

Donations made in bitcoin will support United Way’s Innovation Fund, which aims to help change the social sector with projects focused on technology, relationships and efficiency to power the group’s worldwide movement.

The integration of bitcoin is made possible by using merchant tools provided by Coinbase and comes just weeks after the payment processor announced that it has waived all exchange fees for registered 501(c) non-profit organizations.

Bringing potential donors

With at least one million users and 36,000 merchants across the world, Coinbase brings the potential for new donors to United Way: those who may not have donated to the organisation in the past, but are incentivised by the ease of paying with bitcoin.

Moreover, the company makes it economically feasible to send smaller amounts and micro-donations – amounts of $1 or less – since it does not charge transaction fees.

To make a donation in digital currency, users are directed to the organisation’s website, where they are provided with a bitcoin address to which funds should be sent.

Additionally, Coinbase customers are given the option to complete the payment from their account. There is a 10-minute window during which the payment should be completed.

Philanthropic goals in the bitcoin community

Despite the chatter among the bitcoin community that it has not delivered on its potential for doing good, bitcoin-powered philanthropic activity has increased significantly this year alone.

Small groups like Sean’s Outpost, the Women’s Annex Foundation and some open-souce software organisations accept bitcoin alongside other cryptocurrencies.

Over the summer, Wikipedia started accepting bitcoin donations, becoming one of the first major non-profits to adopt bitcoin, while BitGive, recently became the first IRS tax exempt bitcoin charity.

Now United Way has entered the cryptocurrency arena and, while it may not be the first organisation to seek charitable donations in bitcoin, it is almost certainly the largest.

Source : http://www.coindesk.com

Huobi, OKCoin Celebrate Chinese Bitcoin Industry at Weekend Galas

Entrepreneur Li Xiaolai speaks at Huobi’s birthday event

This weekend has seen two large gala evening events hosted by large Chinese bitcoin exchanges: Huobi’s first anniversary celebrations on Saturday and the ‘One Night in Beijing with OKCoin’ mini-conference on Friday.

Both took place at five-star hotels in Beijing, with attendees numbering several hundred for each event. Each event featured an exhibition of Chinese bitcoin companies that included app developers, ATM manufacturers and mining hardware makers.

Audience at OKCoin’s event on Saturday night

Chinese bitcoin news site Bitell reported that OKCoin’s event at the Westin Hotel featured a keynote speech by CEO Star Xu, and the official launch of the company’s new Virtual Futures trading platform.

 

There were also roundtable discussion topics concerning bitcoin’s outlook in China, a debate and launch of the new book, The Controversial Bitcoin.

Huobi marked one year since its launch on 1st September, 2013, at the Shangri-La Hotel with the first ‘China Bitcoin Industry Summit‘ featuring presentations, panel discussions, and a huge birthday cake.

The company used the event as a launching platform for several new services including BitYes, its international USD-based trading platform, and DigCoin, Huobi’s mining-based investment product.

CEO Leon Li said:

“Huobi is more than a bitcoin exchange, it is a comprehensive bitcoin services company.”

Huobi’s giant birthday cake

It also handed out a series of awards for mining companies, impressive applications, and innovative bitcoin media.

Shifting sands

The mood surrounding bitcoin exchanges in China has shifted visibly since May this year, when the five largest players withdrew booths and speakers from China’s first international bitcoin conference at the last minute.

Huobi’s Robert Kuhne said there have been no public statements from the Chinese government in the past few months, and that exchanges now have a much better idea of the boundaries within which they operate.

Attendees at Huobi’s first birthday event

Now large exchanges are expected to attend the next big China event, Shanghai’s Bitcoin Expo on 19th-21st September. OKCoin is listed as a major sponsor and CEO Li as a speaker.

All this occurs as China’s larger exchanges have adapted their business models to suit the local environment – rather than focus on market speculation as they did last year, they have recently diversified their offerings with margin trading, derivatives, bitcoin wallets and even P2P lending.

The exchanges have also moved closer to China’s other bitcoin mega-industry, bitcoin mining, taking part-shares in mining factories and participation in mining pools, cloud mining and other investment products.

OKCoin’s Changpeng Zhao speaks at Saturday’s event

Other bitcoin startups face rocky road

This could be both good and not-so-good news for bitcoin on China. It could signify that acceptance of bitcoin is growing, or that authorities no longer consider it influential in mainstream life.

A source from the Chinese bitcoin scene, who preferred not to be named, said of the exchanges’ expanding businesses:

“[It's an] inevitable trend of the overall industry, but small startups are facing a bigger challenge.”

The attention is drawing in outsiders and new investors who wanted to get involved in bitcoin, but some mining and application startups are having a tough time finding both customers and investment. For example, startup wallet service Bihang posted a notice last week saying it is to close down.

Rui Ma, China-based partner at 500 Startups, agreed that Chinese venture capital interest in smaller bitcoin startups is “definitely low”, and that mainstream VC investors are “not taking it seriously” for reasons of lack of legal clarity, low visibility and daily use in China and better opportunities for tech entrepreneurs outside the bitcoin sphere.

Kuhne added that while things could easily change in future, there is still optimism.

“There is so much excitement because of fast-developing technology and all the money to be made,” he said.

Source : http://www.coindesk.com

Europe’s Top 5 Countries for Bitcoin ATMs

This article is a continuation of our previous analysis of the most popular US states for bitcoin using data from CoinDesk’s bitcoin ATM map.

As public interest in digital currencies grows, bitcoin ATMs have proven to be critical for bridging the gap between casual onlookers and active bitcoin owners.

To identify the areas where bitcoin ATMs are particularly popular, we analyzed data from CoinDesk’s bitcoin ATM map and calculated the countries in Europe with the most machines per capita.

Of course, the term ‘popular’ is subjective by nature and there are countless ways to measure it, but for the purpose of this report, popularity is defined by the number of bitcoin ATMs per capita in each European country.

Data analysis

Our data for Europe include a total of 64 bitcoin ATMs distributed across 20 countries. The UK and Netherlands are home to more than 30% of Europe’s bitcoin ATMs with 10 machines in each country.

When adjusting for each country’s population, the UK ranks only eleventh most popular in Europe for the digital currency machines. Other countries with multiple bitcoin ATMs that missed the top five include the Czech Republic, ranked sixth with six ATMs; Switzerland, ranked seventh with three ATMs; and Italy, ranked 14th with four ATMs.

Here are the top five most popular European countries for bitcoin, ranked by the number of bitcoin ATMs per capita:

1. Isle of Man

One bitcoin ATM for every 87,000 people

It may not be the biggest or most populous place in Europe, but the Isle of Man is certainly leading the way in embracing bitcoin. A conference devoted to the island’s booming digital currency economy is taking place this week on 17th and 18th September.

2. Slovenia

One bitcoin ATM for every 687,000 people

Home to popular exchange Bitstamp, Slovenia has welcomed bitcoin businesses – including ATMs – with open arms. Despite a population of only two million people, the country has three bitcoin ATMs on file in our records.

3. Finland

One bitcoin ATM for every 777,000 people

Finland is host to Europe’s very first bitcoin ATM, which was installed in Helsinki in December of last year. Since then, six more machines have arrived, showing the Finns’ demand for the digital currency.

4. Ireland

One bitcoin ATM for every 1.55 million people

Bitcoin has seen a warm reception in Ireland. The country’s first bitcoin ATM went live in Dublin back in March, and one prominent figure from the Central Bank of Ireland has spoken about the country’s future with bitcoin.

5. The Netherlands

One bitcoin ATM for every 1.68 million people

The Netherlands, along with the UK, is home to the most bitcoin ATMs in Europe with 10 machines. The world’s first Bitcoin Boulevard also opened in Holland this year, and has attracted digital currency enthusiasts from all over.

Source : http://www.coindesk.com

Why Bitcoin Mining Can No Longer Ignore Moore’s Law

The bitcoin mining industry has witnessed massive change over the past two years. The technological arms race launched by ASIC makers quickly put an end to GPU and FPGA (field-programmable gate array) mining, but much like the Cold War arms race, additional investments may prove unsustainable in the long run due to ROI constraints.

Currently, miners are hitting the wall. Technology is the first problem. Most miners are already using the latest nodes, namely 28nm and 20nm processors offered by TSMC and GlobalFoundries, while the first 14nm/16nm FinFET ASICs are expected next year. Yet progress is slowing down due to a number technical limitations plaguing all chipmakers.

The second problem involves economics. It is more down to earth, but it is closely related to chip design and manufacturing. Bigger chips manufactured on relatively immature processes tend to be costlier to produce and develop. They usually face yield and leakage issues as well.

Thou shall not ignore Moore’s Law

The first technical challenge can be described as the thermal barrier. Simply adding more transistors and building massive chips with billions of transistors delivers more performance, but cooling these chips becomes troublesome and impractical. At the same time efficiency becomes an even bigger problem.

As an emerging field of IC design, bitcoin mining ASICs have experienced rapid evolution over the past two years. However, they cannot keep evolving and developing at the current rate. A number of technical limitations and Moore’s Law simply cannot be overcome even by the world’s foremost chip designers and foundries.

The same issues apply to multibillion dollar chipmakers like Intel, Qualcomm, Nvidia, AMD and various ARM partners such as Samsung, MediaTek and Apple.

Moore’s Law stipulates that the number of transistors doubles approximately every two years. Performance scales accordingly, but this does not mean that performance increases at a linear rate, as chip designers can optimise microarchitectures without piling on more transistors, hence yielding more performance from a the same number of transistors and chip area.

ASICs differ from general purpose processors and a lot less money goes into its development and optimisation. As it matures, optimisation gets more difficult. This means ASIC design will inevitably slow down.

Since most ASICs already use cutting edge manufacturing nodes and there is a limit to how big practical designs can be, more resources will have to go into optimisation, performance-per-Watt tweaks and state of the art cooling technology. This approach involves more spending and development than a transition to a new manufacturing process and it usually does not yield the same performance or efficiency increase.

ASIC designers tend to keep a lot of information away from prying eyes. ASIC makers reveal some basic specs, such as the number of processing cores and the size of the chip package, but they do not paint the full picture. The actual number of transistors and the size of the actual silicon in the package (die size) tend to remain undisclosed, although they are much more relevant than package sizes, voltages and other marketing-friendly specs. Since these are not mass market chips, they are unlikely to be taken apart and placed under a microscope so much of the information never becomes public, thus preventing in-depth analysis.

The problem for bitcoin miners is the fact that overinvestment is starting to create an unsustainable trend. Demand, caused by ever higher difficulty, is outstripping development. Ideally miners would need chips capable of breaking Moore’s Law and then some. Over the past year the hash rate of the bitcoin network has skyrocketed from around 1,000,000GH/s to more than 200,000,000GH/s, briefly peaking at 231,138,370GH/s in late August. In roughly the same period the difficulty shot up from about 65 million to 27,428,630,902 on 31st August.

Part of the increase should be attributed to new, more efficient and powerful ASICs, but in reality most of it comes from huge investments in this inherently risky industry. The old approach no longer works, as illustrated by hash rate trends in late August and early September. This is the focal point; this is where technology and economics intersect.

New technology will slow down the decline, but it won’t stop it

Since Moore’s Law is not going anywhere, the current rate of growth is unsustainable unless the price starts to pick up. It can be maintained through additional investment in industrial-scale mining operations, but only in theory. The days of high yields and ROI measured in weeks rather than months are over. Technological advances, including the introduction of more efficient ASICs and the transition to 14nm/16nm FinFET nodes have the potential to fuel further growth, but not nearly at the same rate.

Technology simply cannot evolve at a rate that would enable such growth in the long run without additional investments.

Thermals and efficiency are becoming a big problem. At a price of $500 bitcoin miners generate about $1.8m in revenue each day. If the price does not go up they could end up making even less. If it goes down, pulling the plug is another option, as miners will run their hardware at a loss for long. This figure does not include operating expenses, cost of capital and investments in next generation hardware. Energy costs are another constant. They are more likely to go up than down, forcing miners to migrate to regions with abundant, cheap electricity. Iceland and Scandinavia have already attracted a number of mining operations. This trend will inevitably lead to even more centralisation.

The cost of keeping the network running is going up, but the returns are not. Margins are going down, competitiveness is becoming increasingly important and small mining operations are unlikely to remain competitive in the future. This does not include just individual miners, but small mining companies as well. Therefore we expect to see more consolidation and diversification moving forward.

What the future holds

So will the network continue to grow more powerful? There is no straightforward answer as nobody can estimate the price of bitcoin over the next few quarters.

Should the price remain stagnant, we could even start to see a drop or at least a stagnation in the hash rate. The difficulty has gone up three times last month, going up from 19,729,645,941 to 27,428,630,902 in under 25 days. This represents an increase of more than 40%. Each increase was followed by a sharp (but brief) decline in the hash rate, which was compensated for in the days following each increase. However, the past two weeks point to a different trend.

The increase also indicates that many miners responded to the difficulty spike by pulling the plug on obsolete hardware, which itself is nothing unusual. However, the size of each drop is, as we are dealing with drops in the range of 20-25%. Big difficulty increases past the 20,000,000,000 mark clearly affected a large part of the network, rendering many miners obsolete overnight.

They were replaced by more efficient units that kept the hash rate up, but in turn they also increased the difficulty, creating a vicious circle that will claim even more obsolete hardware in the near future. This is nothing new, but data indicates the sheer pace at which the difficulty is going up is starting to have a serious effect on many miners. In the short term it will create market opportunities for the most competitive mining operations and hardware makers, boosting efficiency in the process. The risk is that the trend will claim too much obsolete hardware and put many miners out of business, resulting in even more centralisation and fewer incentives to invest in the mining space.

From ‘Bitcoin and the Age of Bespoke Silicon’, Michael Bedford Taylor, 2013.

Michael Bedford Taylor, Bitcoin and the Age of Bespoke Silicon, 2013

About the charts

Mining hardware stats are notoriously hard to come by, so we used the most visible, crowdsourced dataset available, which is Bitcoin.it’s mining hardware comparison data. We included miners that are listed as discontinued or currently shipping from the Bitcoin.it data. When there was no listed shipping date for a miner on the bitcoin.it table, we searched for shipping dates from publicly available sources, particularly miner’s own websites or their posts on Bitcoin Talk. We excluded the Minerscube 15 because its advertised hashrate of 15m Mhash/s skewed our charts too much, at two times the next highest hashrate.

Source : http://www.coindesk.com

Inside London’s First Bitcoin Co-working Space

A unique co-working space has launched in east London, offering digital currency companies the opportunity to work side-by-side in an environment designed to promote growth and innovation.

Called T15B, the space is currently occupied by staff members of seven cryptocurrency-focused companies, including bitcoin trading platform BTC.sx and Australian bitcoin wallet and exchange CoinJar.

Co-founded by Pamir Gelenbe and his wife Gulnar Hasnain, who are behind the bitcoin events series CoinSummit, T15B is located close to London’s tech hub – the so-called ‘Silicon Roundabout’.

The space accommodates a corner of the 2,300sq/m office occupied by launch sponsor BoldRocket, which offers support to technology companies.

The décor is very stereotypically east London – exposed brickwork, bare light fittings and visible pipes on the ceiling, paired with clean lines and a few stand-out features such as a ‘green wall’ (an entire wall covered in live plants) and a large orange rocket sculpture.

Gelenbe said he looked at a few venues in the city, but the BoldRocket office really stood out as a place in which creativity would be bolstered.

Nurturing digital currency innovation

Gelenbe’s aim for T15B is to offer a home for the best virtual currency entrepreneurs in Europe, creating an informal network of help and support.

“I believe that we all end up outperforming when we surround ourselves with great, inspiring people,” he added.

Gelenbe explained there are currently 18 people in the space, including members of Coinometrics, Proof of Work Media, XBTerminal, Bullion Bitcoin and Coinscrum.

He’s looking to increase these numbers, but isn’t willing to let just anyone join. He explained:

“We don’t want to compromise on quality. We have a selection committee and review applications on a rolling basis. We are looking for serious entrepreneurs and individuals who have demonstrated their commitment to the virtual currency space.”

Click below to view a gallery of pictures of T15B.

Motivation

Joe Lee, founder and CEO of BTC.sx, has been in the space since the beginning of this month having outgrown two Google TechHub offices.

“Being surrounded by people working to disrupt the world of finance, through bitcoin, is incredibly motivating,” he said.

Lee added he is enjoying working alongside other entrepreneurs that display an “incredible amount of talent and knowledge”.

He believes London could become a world hub of bitcoin innovation due to its lengthy reputation as the finance capital of the world.

“From an entrepreneur’s perspective, when a majority of the talent you are working with comes with financial services experience, you cannot fail to believe that London is going to be a city to watch out for,” Lee explained.

Aleks Nowak, co-founder of XBTerminal, which helps businesses accept payment in bitcoin, agrees:

“We have several of the best bitcoin startups based here now, the Bank of England and government seem to be changing polices to support the growth. We are in a very strong position to succeed.”

Mentoring

Gelenbe has co-founded a number of companies and is currently a partner at Hummingbird Ventures, a firm that has invested in bitcoin companies including Kraken as well as a number of other technology businesses.

He insisted he doesn’t consider T15B a business venture, and is more interested in using the space to boost Europe-based cryptocurrency developments. With this in mind, Gelenbe has a very hands-on role in the office, acting as a mentor to the companies working there.

“For me, this is an experiment. It’s a community initiative that might succeed, but also might fail, we just have to wait and see,” he said.

Source :  http://www.coindesk.com

United Way Worldwide now accepts bitcoin donations

United Way Worldwide now accepts bitcoin donations, thanks to Coinbase.

Coinbase says that the integration will help increase donation activity:

“For United Way, Coinbase attracts new donors who may not have donated in the past but are enticed to donate because of the convenience, opportunity to donate small amounts, and tax benefits that bitcoin provides.”

Coinbase also notes that users can be more confident donating online with bitcoin as no personal/financial information is submitted or stored.

As a nonprofit organization, United Way will not be charged fees on transactions, ensuring that 100% of a donation amount will go to charitable use.

The organization has over 2.8 million volunteers, 9.7 million donors and raises $5 billion a year. They seek to improve education, help people achieve financial stability, and promote healthy lives through partnerships with major organizations. The become by far the biggest charitable organization to accept bitcoin.

They have opened an FAQ section on their website, explaining the implications of donating with bitcoin.

Source : http://dcmagnates.com

OpenBazaar on the Rise of the Decentralized Marketplace

 

Buzz has carried OpenBazaar for months. If you’re actively crawling over Bitcoin news, you’ve probably heard of the online marketplace. In short, the developers aim to modernize the way we buy stuff online. Ebay and Amazon played their part when they sprung up to allow an entirely new way to trade online. 

It’s already streamlined and pretty awesome in contrast to the inconvenient process of mail-ordering conducted previously. But OpenBazaar wants to be what the average e-commerce site isn’t — and can’t be without jettisoning its anchor to the current tech. The new marketplace allows people to trade one-on-one, without middlemen. That means no fees. And no clear-cut avenues for censorship.

Interview With OpenBazaar Operations Lead: Sam Patterson

The team, most of which haven’t met each other in person, released the beta 1.0 on the first of September and plans to release new updates every month. CryptoCoinsNews interviewed Sam Patterson, operations lead at OpenBazaar, to learn more about the highly-anticipated digital marketplace.

What motivated the team to start this project? For the OpenBazaar developers, has the urge to build an irrepressible online market been around for a while? Or did the idea develop recently?

Different team members may have different specific motivations, but the general idea of creating a decentralized market has been important to us all. We’ve all been involved in the bitcoin movement for a while, and felt that our decentralized and censorship-resistant money needed a a decentralized and censorship-resistant platform to go with it. Once someone got the effort in gear, we decided it was time to make this happen for real.

Earn Bitcoin Points by Creating a User on CCN & Join the Discussions!

The DarkMarket creators laid the groundwork with a proof-of-concept for a peer-to-peer marketplace. Would OpenBazaar exist without these foundations?

OpenBazaar wouldn’t exist without DarkMarket. I’m sure that decentralized markets would exist one day if DarkMarket or OpenBazaar weren’t the ones to get the ball rolling, the concept is too powerful to be ignored. But someone had to take the first step, and we’re grateful that Amir and his group did that.

Some describe OpenBazaar as a next-generation Silk Road, but OpenBazaar hopes to expand the horizons for Bitcoin-based online markets. What are some good reasons to suspect it will be used for items other then drugs?

Several reasons, but the simplest is that it already is! My kids were just enjoying some honey that I purchased from a beekeeper in Ohio using OpenBazaar. Neither of us paid any fees, and of course we used our preferred currency, bitcoin. It was a great experience; why would this only be used for drugs? The Bitcoin community doesn’t have a good place to buy and sell their goods – using bitcoin – without mandatory fees. To claim that free online markets will only be used for drugs sounds to me like the claim that bitcoin itself is only used for drugs, since you’ve got PayPal and credits cards for everything else. Of course we know that’s a ridiculous argument, and I think after the OpenBazaar network becomes widely used the argument against it will be equally ridiculous.

How does the platform differ from BitXBay and other decentralized trading projects?

Honestly, I don’t know very much about BitXBay. I believe it’s the effort of a single developer, which is worrying because that model isn’t likely to be sustainable. I don’t think even Bitcoin would have succeeded if Satoshi didn’t get more developers on board helping him. That said, we want decentralized markets to exist, welcome the efforts of others, and are happy to collaborate.

It sounds like you’ve covered a lot of ground. Could you summarize some of the main technical achievements so far?

The main technical achievements are the ability to create, sign, and verify Ricardian contracts, distribute them to a network of nodes, and then create, sign, and broadcast multisignature transactions to the parties involved in a transaction. Of course this is all in the back-end, the other main achievement is doing these actions in a way that is user friendly and accessible in the GUI. Also, we’ve implemented a proof-of-burn system we call “reputation pledges” that allows people to prove good faith by burning some bitcoin tied to their OpenBazaar identity, and we’re currently integrating Namecoin ID’s as well.
It is important to remember that this is still early beta and hasn’t been security assessed by professionals yet. It’s open source, but that isn’t a guarantee it’s truly secure. It’s not even close to being finished, so even though we certainly have come a long way, we have a long way yet to go.

Any funny development stories? 

Brian Hoffman and I thought we were going to complete the first transaction on the network each night for close to three weeks before we actually succeeded. Every time we’d try, a new issue popped up. We’d been expecting that first transaction for so long, that by the time it finally worked correctly it was very anticlimactic!
We’ve got a great team of guys working on this, and we’ve had a lot of fun together over the past few months. We all have different backgrounds too, and different areas of expertise: academic, regulatory, BitTorrent, business, the team is very diverse in our knowledge, and our locations. Other than Brian and I, none of the team members have met each other in person yet, so we’re looking forward to being able to get together at some point in the future if OpenBazaar does succeed.

Are there any significant hurdles you expect to deal with, or are currently dealing with, before the public release?

In some ways, there’s a simplicity to what we’re trying to do – allow people to publish or find products or services on a peer to peer network, and use multisig to make sure the trade occurs fairly. However, once you start having people use the platform, you realize just how difficult it is to create a product that can compete with existing ecommerce sites. As of Sept. 9th, on our Github we’ve had more than 500 issues and pull requests opened over the 5-month history of the project; more than 200 of those have come in the last ten days since we opened beta. The amount of community interest and feedback has been amazing, and overwhelming! There are many hurdles on our path, but if the community continues to support us and let us know what they need, we’re confident we’ll deliver.

OpenBazaar is a huge project and many are buzzing about a variety aspects. I’m sure I missed something. Is there anything else you’d like to add?

We are releasing new beta versions at the end of each month. If you haven’t tried out OpenBazaar yet, please read through this guide to see if you should give it a try, and if not, then be patient and considering helping us test out a later version. After releasing several betas, when we feel like we’ve got a stable and useful platform, we’ll publish the first full release.

It’s worth mentioning that the first full release is just the start. We have Dr. Washington Sanchez heading up the OpenBazaar Labs, which is our effort to be intentional about expanding the use cases and applications for OpenBazaar beyond an ecommerce platform. As long as there is demand from the community, we’ll keep working on this.

 Source : http://www.cryptocoinsnews.com

Bitcoin Awaiting Range Consolidation Breakout

Bitcoin in a Neutral Market:
Bitcoin is consolidating in the short-term. Last week, price fell to about 456, then rebounded to 492 before retreating again. The rally took away a prevailing bearish bias, and shifted bitcoin into a sideways market in the 1H chart. Note the clustering of the 200-, 100-, and 50-hour simple moving averages (SMAs), and how price has oscillating above and below them. The 1H RSI is also showing a market without any directional momentum.

As we begin the week, bitcoin is trading within a narrow roughly range between 474 and 480. As we get into the European session, price is trying to push below this range. If it does, we can be opening up last week’s lows around 456.

Bitcoin (BTCUSD) 1H Chart 9/15

 

Bearish scenario:
Now, if price does break below 474 and indicate a bearish outlook, we should see price hold below 477 on a subsequent pullback. 477 is the middle of the range. Also, if price returns above 477, it will clear all the 200-, 100-, and 50-hour SMAs, introducing a bullish bias, or at least showing lack of bearish trend development.  If the bearish outlook is confirmed, bitcoin has the 456 low from last week in site, and then the 442 August low below that. Ultimately a bearish outlook would be in-line with the prevailing trend in the medium-term, which has the 340 low on the year in sight.

Bullish scenario:
Now, if price breaks above 480, we should expect a bullish market to hold price above 477 on a subsequent pullback. If this scenario develops, bitcoin would have the 492 high, up to the 500 handle in site. A break above 500 could open up a bullish scenario at least toward 534. In the 4H chart, we can see that a break above 500 would put bitcoin above the 200-period SMA in the 4H chart, and the falling trendline coming down from the 534 high.

Source : http://www.livebitcoinnews.com

Russia Mulls Bitcoin Ban, Deputy Finance Minister: "People Can't Use Surrogate Currencies as Tender"

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Russia is prepared to stomp out Bitcoin, again. Comments from the Russian Ministry of Finance confirm the draft of a new bill which would severely restrict use of cryptocurrency in the country — if enforced.

Last month, CoinTelegraph reported on the rumors of the country's renewed decision to ban transactions conducted with “money substitutes” – including cryptocurrencies. Officials worry that the new currency carve out a shadow economy. Now, Russia Today reports that the drafted bill could pass as early as the current parliamentary session.

According to Russia Today, Deputy Finance Minister Alexsey Moiseev said: “People can play with their chips, and they can call them money, but they can’t use these surrogate currencies as tender.”

- Deputy Finance Minister Alexey Moiseyev 

Because of concerns that the cryptocurrency facilitates crime, finance officials threaten to use legal action against miners and anyone who converts the currency into “real money.” Bitcoin provides a certain level of privacy, so government officials think it could facilitate illegal activity—like online drug purchases and money laundering. And given the cryptocurrency's volatility, banning it would only protect consumers, officials argue.

The draft has not available to the public. But according to Russia Today, Moiseev commented on the status of the new draft:

“We will discuss this law in the current session of parliament, and possibly even pass it then, or at the very latest by spring next year. We are currently dealing with comments from the law enforcement agencies, about the specifics of legal measures, and we will take their remarks into account. But the overall concept of the law is set in stone.”

Former Bans and Other Russian Regulation News

Russia is known for its rollercoaster-like opinion on cryptocurrency. Just a brief dive into a “Russia” search query on CoinTelegraph shows the conflicting reports from Russian officials. Partly because different officials, in different agencies, are drawing very different conclusions. It's difficult to gauge which opinion will win out and ultimately rule Russian policy.

At a major economic conference in St. Petersburg, top Russian officials weren't very quick to take a strictly unfavorable position, indicating that were more nuanced than the Russian Central Bank report released in January, which prohibits the exchange of “virtual currency.” The central bank has since reversed the ban. Leading officials proposed softer regulations and admitted that cryptocurrency could have a future.

Now, another arm of the Kremlin is looking into a ban. Moiseev's comments, coming from the Ministry of Finance, has confirmed reports of legislation in play that would ban cryptocurrency. If the central bank is any indication, there still may be room for a reversal. But so far, the Russian government has taken a skeptical view of Bitcoin. Even if there are some pockets of more favorable opinion, the future is quite unclear. 

Source : http://cointelegraph.com

Weekend Analysis: Three Potential Bitcoin Price Paths

 

The Bitcoin price is likely to continue sideways consolidation since last Monday’s low near $460 (Bitstamp). Weekend trade has failed to exceed the past week’s highs and lows in the cramped range between $460 and $490. There are three potential paths for Bitcoin Price.

Bitcoin Price Background

What Determines the Bitcoin Price?

Bitcoin Exchange buying has the effect of pushing the Bitcoin price up. The bitcoins are changing hands – from the exchange to the buyer – and, hence, there is an associated Bitcoin transaction. Yet, it is the exchange transaction that generates the increase in the Bitcoin exchange rate. The same but opposite is true for exchange selling: bitcoins change hands resulting in a blockchain transaction (which doesn’t affect price), and the Bitcoin exchange transaction causes price to go down. In addition to all other network transactions, exchange buying and selling is, therefore, reflected in the blockchain. Notice how the range of the number of Bitcoin transactions has been contracting since mid-March 2014.

Bitcoin Whales

 

Some confusion abounds about who moves the Bitcoin price, with some people under the mistaken impression that news events or merchant “selling-pressure” causes updrafts and downdrafts in the price chart. Bitcoin is a global market instrument and, as with all markets, there are large institutional hands at work.

Bitcoin Probabilities, Opportunities and Experience

Evidence of an ongoing advance has been presented during the past few weeks’ analysis reports. Bear in mind that a single piece of evidence does not make an advance. The analyst gathers evidence with the objective of weighing the stacks in favor of advance, decline or consolidation.

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Calling a top or bottom is out of the question because, historically, such calls are almost always proven wrong in the market. In this analyst’s view, the best we can do is to look for the signs of trend change; to determine the price action that will confirm the change, and to then trade according to the opportunities with the highest probability.

Risk assessment, money management and trading strategy are critical components of the trader’s skillset. Besides having an analytical toolkit to inform decision-making and potential outcomes of price action (risk and reward), every trader should have clearly defined risk assessment, money management and entry/exit strategy plans. These should be documented and – above all – mechanistically followed. However, strangely, their contents and sophistication are acquired and developed only by the lessons we learn in the market – i.e. by mistakes and losses.

“Good judgment comes from experience, and often experience comes from bad judgment.”- Rita Mae Brown

Three Paths of Bitcoin Price

Expectation is that the Bitcoin price will eventually seek to re-establish trade at the $600 price level. However, there are several paths by which it could make that journey:

• gradual advance with battles at each reaction level on the way up
• drawn-out consolidation followed by a break-out that forms a clearly defined 3 or 5 wave structure to $590 during the coming weeks
• drop to a lower decline low followed by a powerful bounce to the upper decline channel trendline

Hypothetical Bitcoin Trade

If this analysis were a trade signalling service, the recommendation would be to wait for the 20-period moving average (20MA) to cross over the 200-period moving average (200MA) and to then open a position with a stop-loss $10 below the cross-over level and take-profit at $550. The presence of the channel upper trendline near $550 is bound to be a reaction level causing deeper correction, and would present a new entry opportunity for a trade targeting $590.

However, suggesting trade entries and exits is not the objective of this analysis series. Analysis is presented, by this analyst, as a means of sharing his years of market experience and pattern recognition studies. It is intended as a means of supplementing or complementing traders’ own analyses. The fact that this analyst has correctly called targets for several weeks running has been the result of predictable trade in the Bitcoin price chart, and not due to any extraordinary ability of the analyst to always be right. Nevertheless, some experience goes a long way toward those outcomes that are less likely to happen. Let’s continue with the example trade.

Critical Analysis

Looking at the Bitcoin chart and its recent price action, the hypothetical trade setup described above seems a sensible trade setup. It avoids impulsive entry at current levels and therefore avoids the over-exuberant expectation of an immediate advance. The entry uses the 20MA and 200MA cross-over as a trigger, which is rational (given the significance of this technical market event), and also smart since we are allowing the market to confirm our expectation by “coming to us”. After letting the cross-over be the trigger to our entry, we change the 20MA’s function to that of support. If trade above the 200MA were indeed advance (and not simply a test of the level) then, trade should stay above the 200MA and continue advancing while using the 20MA as support. See the inverse of this scenario in the price action following the 20MA/200MA cross-over on the left of the first Bitstamp chart above.

Great trade setup… or is it?

Price action may pan out favorably and hit target at $550, but there is a caveat: the 200MA is still descending as it slowly pulls out of its dive over the next 50 to 100 4-hour candles. This implies that the 20MA is unlikely to gain much altitude before being drawn back down to the 200MA’s magnetic pull. Immediate advance to $550 is, therefore, a lower probability outcome than the outcome whereby the 20MA and 200MA cross paths a few more times until such time as the 200MA’s path has leveled out.

Hence, the first path, namely “gradual advance” is a low probability outcome.

Similarly, in light of the evidence stacking up against a continued decline, the third path (decline and bounce) is the lowest probability outcome. Not impossible, but less likely than the second path which is sideways consolidation.

Bitcoin Price Highest Probability

At this stage, it appears consolidation is pivoting around $475 in the Bitstamp and Bitfinex charts, and slightly lower, around $467, in the BTC-e chart. Assuming consolidation continues in the recent pattern of price action; the 200MA in the 4-hour Bitcoin chart should level out after a week or two.

However, given the potential of a tumultuous week in the global markets (see Economic Data below), it is possible that the consolidation range is redefined (or fast tracked) by an expected global market volatility injection in the coming week. Daily analysis updates will keep readers informed.

Economic Data This Week

China’s Industrial Production (year-on-year) has printed at a disappointing 6.9% increase, as opposed to the expected 8.8% and in contrast with last year’s figure of 9%. A few percentage points may seem insignificant, but consider that China’s shrinking manufacturing output reflects a decrease in global demand – or more properly stated – a global decrease in consumption. The implication for the global economy is grim, and markets will reflect their disappointment at the market open on Monday 15 September.

The disappointing news from China, ironically, is good for Bitcoin but will most likely not be seen in the Bitcoin price chart with immediate effect. Not that the Chinese manufacturing data is decisive, yet increased global economic uncertainty will drive investors to safe havens as they seek to protect their wealth, and the increased transaction volume will serve to promote Bitcoin as a fast, secure payment method and a lucrative market instrument.

As if the Chinese Industrial Production data is not bad enough, there are plenty of market shaking data releases and economic event in this week’s calendar. Fed Chairperson Yellen speaks, the FOMC will make a statement, many central banks and monetary policy statements are scheduled as well as releases of indicators of above-average significance.

Source : http://www.cryptocoinsnews.com