Bitcoin

Bitcoin Futures Surge In First Day Of Trading (npr.org) 20

On their first day of trading, bitcoin futures surged past $18,000, adding to a streak for the digital currency that began the year at just $1,000 and has nearly tripled in value over the past month alone. From a report: Reuters reports that bitcoin futures, traded through the Chicago Board Options Exchange (CBOE), saw January contracts, which opened at $15,460 in New York on Sunday evening, leap to a high of $17,170 during Asian hours. Trading, which began at 6 p.m. ET (5 p.m. CT), was so intense that halts designed to cool volatility were triggered twice on the CBOE. The halts are "not surprising based on the volatility of the underlying [asset]. The futures are behaving as expected and designed," Tom Lehrkinder, senior analyst at consulting firm Tabb Group, was quoted by CNBC as saying.
The Almighty Buck

Launch of Bitcoin Futures Trading Crashes CBOE Site (thestreet.com) 90

"5PM CT is the start of Bitcoin futures trading and the $CBOE website appears to be down," one market watcher posted on Twitter (and his observation was quickly confirmed by other cryptocurrency-watching accounts and confirmed by CBOE). "I'm guessing watching Bitcoin futures start trading is a more popular spectator sport than anticipated."

Bitcoin futures will also begin trading on the Chicago Mercantile Exchange in eight days. The Street report that the anticipation of that "has triggered wild swings in bitcoin prices over the last week." Overall, trading bitcoin futures is a positive development for the cryptocurrency says the research team at Fundstrat... The introduction of derivatives lays the necessary market structure for institutions to allocate cash towards cryptocurrencies, points out Fundstrat... Short sellers may now express negative views on bitcoin, which could lead to short-term pricing pressure. But the ability for short sellers to hate on bitcoin could be viewed as a longer term positive, Fundstrat says. Shorting essentially creates true price discovery and means that hedge funds could take bitcoin more seriously. This should improve the long-term prospects of bitcoin as it broadens sponsorship, Fundstrat believes.
The Almighty Buck

Coinbase Warns During Times of High Volatility, Access Could Become 'Unavailable' (cityam.com) 85

An anonymous reader quotes City AM: A leading bitcoin exchange has warned that customers may be unable to get their money out quickly in the event of a crash in the cryptocurrency's price. Writing in a blog post last week, Coinbase's co-founder and chief executive Brian Armstrong, said despite "sizeable and ongoing" increases in the firm's technical infrastructure and engineering staff, access to Coinbase services could become "degraded or unavailable during times of significant volatility or volume. This could result in the inability to buy or sell for period of time," he said.

Armstrong added that there would be restrictions on how much customers could sell, or sell limits, to "protect client accounts and assets"... Bitcoin's market capitalisation rose above $300 billion for the first time earlier this week when its price rocketed to an all-time high of just over $17,000. Many analysts have warned that bitcoin represents an unsustainable bubble, though no one is quite sure when it will burst.

Bitcoin

People Who Can't Remember Their Bitcoin Passwords Are Really Freaking Out Now (slate.com) 199

An anonymous reader quotes a report from Slate: Bitcoin has had quite a week. On Thursday, the cryptocurrency surged past $19,000 a coin before dropping down to $15,600 by Friday midday. The price of a single Bitcoin was below $1,000 in January. Any investors who bought Bitcoins back in 2013, when the price was less than $100, probably feel pretty smart right now. But not all early cryptocurrency enthusiasts are counting their coins. Instead they might be racking their brains trying to remember their passwords, without which those few Bitcoins they bought as an experiment a few years ago could be locked away forever. That's because Bitcoin's decentralization relies on cryptography, where each transaction is signed with an identifier assigned to the person paying and the person receiving Bitcoin.

"I've tried to ignore the news about Bitcoin completely," joked Alexander Halavais, a professor of social technology at Arizona State University, who said he bought $70 of Bitcoin about seven years as a demonstration for a graduate class he was teaching at the time but has since forgotten his password. "I really don't want to know what it's worth now," he told me. "This is possibly $400K and I'm freaking the fuck out. I'm a college student so this would change my life lmao," wrote one Reddit user last week. The user claimed to have bought 40 bitcoins in 2013 but can't remember the password now. "A few years ago, I bought about 20 euros worth of bitcoin, while it was at around 300eur/btc.," lamented another Reddit user earlier this week. "Haven't looked at it since, and recently someone mentioned the price had hit 10.000usd. So, I decided to take a look at my wallet, but found that it wasn't my usual password. I have tried every combination of the password variations I usually use, but none of them worked."

Bitcoin

About 40 Percent of Bitcoin Is Held By 1,000 Users. If a Few of Them Want To Sell, That Could Tank Values (bloomberg.com) 241

On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency. From a report on Bloomberg: Holders of large amounts of bitcoin are often known as whales. And they're becoming a worry for investors. They can send prices plummeting by selling even a portion of their holdings. And those sales are more probable now that the cryptocurrency is up nearly twelvefold from the beginning of the year. About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.
Bitcoin

Bank of America Wins Patent For Crypto Exchange System (coindesk.com) 52

New submitter psnyder shares a report from CoinDesk: [The patent] outlined a potential cryptocurrency exchange system that would convert one digital currency into another. Further, this system would be automated, establishing the exchange rate between the two currencies based on external data feeds. The patent describes a potential three-part system, where the first part would be a customer's account and the other two would be accounts owned by the business running the system. The user would store their chosen cryptocurrency through the customer account. The second account, referred to as a "float account," would act as a holding area for the cryptocurrency the customer is selling, while the third account, also a float account, would contain the equivalent amount of the cryptocurrency the customer is converting their funds to. That third account would then deposit the converted funds back into the original customer account for withdrawal. The proposed system would collect data from external information sources on cryptocurrency exchange rates, and use this data to establish its own optimal rate. The patent notes this service would be for enterprise-level customers, meaning that if the bank pursues this project, it would be offered to businesses.
Bitcoin

Cryptocurrency Miners Are Using Old Tires to Power Their Rigs (vice.com) 78

Christopher Malmo, writing for Motherboard: An entrepreneurial cryptocurrency mining company has just announced an unusual deal: it has partnered with a tire-based waste-to-energy company in the United States to power its mining computers. Standard American Mining and PRTI, a tire "thermal demanufacturing" company based in North Carolina, are powering graphics cards-based mining equipment to earn a range of alternative cryptocurrencies like Ethereum. Basically, they take used tires and heat them to a precise temperature, resulting in components like steel (from belted tires), carbon black, and a burnable fuel. That fuel is the energy source driving turbines to make electricity, which powers an onsite cryptocurrency mining farm. Taking advantage of an underutilized electricity source to run computers isn't groundbreaking, but the unusual set-up shows that cryptocurrency mining is now profitable enough to justify finding quite unconventional sources of cheap or new energy generation.
Bitcoin

Bitcoin Nears $17,000 After Climbing About $4,000 in Less Than a Day 462

As economists attempt to make sense of Bitcoin, the cryptocurrency rocketed above $17,000 for the first time moments ago, adding about $4,000 to its price in fewer than 24 hours. Security reporter Brian Krebs tweeted on Thursday, "Closing in on $17k per bitcoin now (mind you, it was almost at $16k less than an hour ago. This is totally fine." Late Wednesday, finance author Ben Carlson wrote: Bitcoin has achieved something I've always wanted to see in the stock mkt - a reverse 1987 (20% gain in a single day)
Security

NiceHash Hacked, $62 Million of Bitcoin May Be Stolen (reddit.com) 79

New submitter Chir breaks the news to us that the NiceHash crypto-mining marketplace has been hacked. The crypto mining pool broke the news on Reddit, where users suggest that as many as 4,736.42 BTC -- an amount worth more than $62 million at current prices -- has been stolen. The NiceHash team is urging users to change their online passwords as a result of the breach and theft.
Bitcoin

Steam Ends Support For Bitcoin (polygon.com) 151

Valve is ending support for Steam purchases made with bitcoin, the company said today, citing "high fees and volatility" in the value of the cryptocurrency. In a statement, it said: "In the past few months we've seen an increase in the volatility in the value of Bitcoin and a significant increase in the fees to process transactions on the Bitcoin network," Valve said in a post on Steam. "For example, transaction fees that are charged to the customer by the Bitcoin network have skyrocketed this year, topping out at close to $20 a transaction last week (compared to roughly $0.20 when we initially enabled Bitcoin). Unfortunately, Valve has no control over the amount of the fee. These fees result in unreasonably high costs for purchasing games when paying with Bitcoin. The high transaction fees cause even greater problems when the value of Bitcoin itself drops dramatically."
Bitcoin

'Bitcoin Could Cost Us Our Clean-Energy Future' (grist.org) 466

An anonymous reader shares an article: Bitcoin wasn't intended to be an investment instrument. Its creators envisioned it as a replacement for money itself -- a decentralized, secure, anonymous method for transferring value between people. But what they might not have accounted for is how much of an energy suck the computer network behind bitcoin could one day become. Simply put, bitcoin is slowing the effort to achieve a rapid transition away from fossil fuels. What's more, this is just the beginning. Given its rapidly growing climate footprint, bitcoin is a malignant development, and it's getting worse. Digital financial transactions come with a real-world price: The tremendous growth of cryptocurrencies has created an exponential demand for computing power. As bitcoin grows, the math problems computers must solve to make more bitcoin (a process called "mining") get more and more difficult -- a wrinkle designed to control the currency's supply. Today, each bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day. And miners are constantly installing more and faster computers. Already, the aggregate computing power of the bitcoin network is nearly 100,000 times larger than the world's 500 fastest supercomputers combined. The total energy use of this web of hardware is huge -- an estimated 31 terawatt-hours per year. More than 150 individual countries in the world consume less energy annually. And that power-hungry network is currently increasing its energy use every day by about 450 gigawatt-hours, roughly the same amount of electricity the entire country of Haiti uses in a year.
Bitcoin

Feds Shut Down Allegedly Fraudulent Cryptocurrency Offering (arstechnica.com) 47

An anonymous reader quotes a report from Ars Technica: The Securities and Exchange Commission on Monday announced that it was taking action against an initial coin offering (ICO) that the SEC alleges is fraudulent. The announcement represents the first enforcement action by the SEC's recently created cyber fraud unit. In July, the agency fired a warning shot. It announced that a 2016 fundraising campaign had run afoul of securities law, but that the SEC would decline to prosecute those responsible. The hope was to get the cryptocurrency world to take securities laws more seriously without doing anything drastic. Now the SEC is taking the next step by prosecuting what it considers to be one of the most egregious scams in the ICO world. The SEC's complaint, filed in federal court in New York, is against Dominic Lacroix, whom the SEC describes as a "recidivist securities law violator." The SEC considers Lacroix's cryptocurrency project, PlexCoin, to be a "fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month." The PlexCoin website has a hilariously vague description of this supposedly revolutionary cryptocurrency. "The PlexCoin's new revolutionary operating structure is safer and much easier to use than any other current cryptocurrency," the site proclaims. "One of the many features of PlexBank will be to secure your cryptocurrency from market variation, which is highly volatile, and invest your money in a place where you can get interesting guaranteed returns." According to Ars, "The SEC isn't impressed and is arguing that PlexCoin has 'all of the characteristics of a full-fledged cyber scam.' The agency is seeking to freeze the assets of the PlexCoin project in hopes of getting investors' funds back to them."
Bitcoin

The Winklevoss Twins Are Now Bitcoin Billionaires (theverge.com) 155

The twin brothers who gained notoriety for suing Mark Zuckerberg over the claim that they started Facebook have done remarkably well in the wake of Bitcoin's record gains. From a report: Cameron and Tyler Winklevoss won $65 million from the Facebook lawsuit, and invested $11 million of their payout into Bitcoin in 2013, amassing one of the largest portfolios of Bitcoin in the world -- 1 percent of the entire currency's dollar value equivalent, said the twins at the time. Their slice of the Bitcoin pie is now worth over $1 billion after Bitcoin surged past $10,000 last week to now trade at $11,100, according to CoinDesk. The cryptocurrency has surged over 10,000 percent since the Winklevoss' investment, when one coin traded at around $120.
The Almighty Buck

Nobel Prize-Winning Economist Says Bitcoin 'Ought to be Outlawed' (cnn.com) 461

Bitcoin "is drawing harsh criticism from Wall Street investment firms," writes Slashdot reader rmdingler -- and even from some prominent economists. CNN reports: The harshest assessment came from Nobel laureate Joseph Stiglitz, who said that bitcoin "ought to be outlawed. Bitcoin is successful only because of its potential for circumvention," he told Bloomberg TV. "It doesn't serve any socially useful function." Robert Shiller, who won a Nobel for his work on bubbles, said the currency appeals to some investors because it has an "anti-government, anti-regulation feel. It's such a wonderful story," he said at a conference in Lithuania, according to Bloomberg. "If it were only true."

Wall Street titans were getting in on the action, too. Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud." Billionaire investor Carl Icahn said on CNBC that it "seems like a bubble." The digital currency previously attracted the derision of JPMorgan boss Jamie Dimon, who called it a "fraud" that would "eventually blow up." Warren Buffett has warned of a "real bubble."

Wednesday the price of bitcoin shot past $11,000 -- just ten days after rising past $8,000.
Bitcoin

Blockchains Are Poised To End the Password Era (technologyreview.com) 129

schwit1 shares a report from MIT Technology Review: Blockchain technology can eliminate the need for companies and other organizations to maintain centralized repositories of identifying information, and users can gain permanent control over who can access their data (hence "self-sovereign"), says Drummond Reed, chief trust officer at Evernym, a startup that's developing a blockchain network specifically for managing digital identities. Self-sovereign identity systems rely on public-key cryptography, the same kind that blockchain networks use to validate transactions. Although it's been around for decades, the technology has thus far proved difficult to implement for consumer applications. But the popularity of cryptocurrencies has inspired fresh commercial interest in making it more user-friendly.

Public-key cryptography relies on pairs of keys, one public and one private, which are used to authenticate users and verify their encrypted transactions. Bitcoin users are represented on the blockchain by strings of characters called addresses, which are derived from their public keys. The "wallet" applications they use to hold and exchange digital coins are essentially management systems for their private keys. Just like a real wallet, they can also hold credentials that serve as proof of identification, says Reed. Using a smartphone or some other device, a person could use a wallet-like application to manage access to these credentials. But will regular consumers buy in? Technologists will need to create a form factor and user experience compelling enough to convince them to abandon their familiar usernames and passwords, says Meltem Demirors, development director at Digital Currency Group, an investment firm that funds blockchain companies. The task calls for reinforcements, she says: "The geeks are working on it right now, but we need the designers, we need the sociologists, and we need people who study ethics of technology to participate."

Bitcoin

Cryptocurrencies Aren't 'Crypto' (vice.com) 169

Lorenzo Franceschi-Bicchierai, writing for the Motherboard: Lately on the internet, people in the world of Bitcoin and other digital currencies are starting to use the word "crypto" as a catch-all term for the lightly regulated and burgeoning world of digital currencies in general, or for the word "cryptocurrency" -- which probably shouldn't even be called "currency," by the way. For example, in response to the recent rise of Bitcoin's price, the CEO of Shapeshift recently tweeted: "don't go into debt to buy crypto at these prices." "Crypto Stocks Rise," read a headline on Tuesday from the trade publication Investor Business Daily. But the financial blog Seeking Alpha outdid them all by publishing a post titled "Tales From The Crypto." Excuse me, "the crypto" what? As someone who has read and written about cryptography for a few years now, and who is a big fan of Crypto, the 2001 book by Steven Levy, this is a problem. "Crypto" does not mean cryptocurrency. The above are just three examples picked at random, but if you don't believe me, just search "crypto" on Google News or Twitter. On the internet, "crypto" has always been used to refer to cryptography. Think, for example, the term "Crypto Wars," which refer to government (originally the US government) efforts to undermine and slow down the adoption of unbreakable communications systems. By the way, the book Crypto isn't about Bitcoin. It's about cryptography, and more in particular, about the cryptographers who fought the government in the so-called Crypto Wars.
Bitcoin

Nasdaq Plans To Offer Bitcoin Futures In Early 2018 (engadget.com) 100

An anonymous reader quotes a report from Engadget: Nasdaq is planning to launch contracts for bitcoin futures in the first half of 2018, according to The Wall Street Journal, which will enable investors to predict and put money on the future price of the currency. The Wall Street Journal also reports that broker Cantor Fitzgerald will be launching bitcoin derivatives on its own exchange in the first half of next year as well, making for yet another brokerage to help make bitcoin a more mainstream financial instrument. The relative youth and volatility of the currency still keeps many investors away, of course, but bitcoin is probably here to stay, even if this is just a bubble. New uses for regular folks to spend with the currency continue to rise, like the UK Visa card based on bitcoin and Square's testing of the currency in its payment app.
Bitcoin

Coinbase Ordered To Report 14,355 Users To the IRS (theverge.com) 141

Nearly a year after the case was initially filed, Coinbase has been ordered to turn over identifying records for all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year. The digital asset broker estimates that 14,355 users meet the government's requirements. The Verge reports: For each account, the company has been asked to provide the IRS with the user's name, birth date, address, and taxpayer ID, along with records of all account activity and any associated account statements. The result is both a definitive link to the user's identity and a comprehensive record of everything they've done with their Coinbase account, including other accounts to which they've sent money. The order is significantly narrower than the IRS's initial request, which asked for records on every single Coinbase user over the same period. That request would also have required all communications between Coinbase and the user, a measure the judge ultimately found unnecessarily comprehensive. The government made no claim of suspicion against individual users, but instead argued that the order was justified based on the discrepancy between Coinbase users and U.S. citizens reporting Bitcoin gains to the IRS.
Bitcoin

Bitcoin Tumbles From Record High After Exchanges Confirm Outage 130

Fearful of missing out on the frenzy in the Bitcoin world, several people were left disappointed on Wednesday noon after they were unable to buy some cryptocurrency because the websites of Coinbase and Gemini, two of the largest online exchanges for Bitcoin trading in the United States, were either down or taking too long to load, they said. In a statement, Coinbase said it was facing issues handling the overwhelming traffic it has been receiving on its website. Bitcoin surged past $11,000, the highest it has ever been, early Wednesday, though it has since taken a tumble as well, going as low as $9,290.30. Gemini said in a tweet it had resolved the performance issues, though some users continue to report delays on the website. Bitcoin's professional trading platform GDAX and exchanges Kraken and Bitstamp were also facing issues on Wednesday. The issues had been addressed, they said.
Bitcoin

Tesla Owners Are Mining Bitcoins With Free Power From Charging Stations (vice.com) 141

dmoberhaus writes: Someone claimed to use their Tesla to power a cryptocurrency mine to take advantage of the free energy given to Tesla owners. But even with free energy, does this scheme make sense? Motherboard ran the numbers.

From the report: "...If we assume that each of the GPUs in this rig draws around 150 watts, then the 16 GPUs have a total power draw of 2.4 kilowatts per hour or 57.6 kilowatt hours per day if they ran for a full 24 hours. According to Green Car Reports, a Tesla Model S gets about 3 miles per kilowatt hour, meaning that running this mining rig for a full day is the equivalent of driving nearly 173 miles in the Tesla. According to the Federal Highway Administration, the average American drives around 260 miles a week. In other words, running this cryptocurrency mine out of the trunk of a Tesla for a day and a half would use as much energy as driving that Tesla for a full week, on average. Moreover, drivers who are not a part of Tesla's unlimited free energy program are limited to 400 kilowatt hours of free electricity per year, meaning they could only run their rig for a little over 7 days on free energy.

Okay, but how about the cost? Let's assume that this person is mining Ethereum with their GPUs. Out of the box, an average GPU can do about 20 megahashes per second on the Ethereum network (that is, performing a math problem known as hashing 20 million times per second). This Tesla rig, then, would have a total hashrate of about 320 megahashes. According to the Cryptocompare profitability calculator, if the Tesla rig was used to mine Ethereum using free electricity, it would result in about .05 Ether per day -- equivalent to nearly $23, going by current prices at the time of writing. In a month, this would result in $675 in profit, or about the monthly lease for a Tesla Model S. So the Tesla would pay for itself, assuming the owner never drove it or used it for anything other than mining Ethereum, Ethereum doesn't drop in value below $450, and the Tesla owner gets all of their energy for free."
Motherboard also notes that this conclusion "doesn't take into account the price of each of the mining rigs, which likely cost about $1,000 each, depending on the quality of the GPUs used." TL;DR: Mining cryptocurrency out of your electric car is not worth it.

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