Will The Cryptocurrency Overtake Bitcoin In The New Year?

Perhaps to Nobel Prize winning economist Paul Krugman’s dismay, 2013 was by far the year of the bitcoin. News outlets covered the phenomenal rise of the cryptocurrency and investors had a rollercoaster of a year. Starting out at a measly $13, the decentralized digital buck rose to a staggering $1,250, making some people very rich. Shortly thereafter, it fell again to where it remains today, around $800. With prices already high, will investors want to get into the bitcoin game now, or will they search for other currencies to press their luck? Is 2014 going to be the year of the litecoin?

Litecoin is an alternative currency (commonly called alt coins) very similar to bitcoin; some call it the silver to bitcoin’s gold. They both have an amount cap so as the market doesn’t get over saturated. They both are mined using application-specific integrated circuits (ASIC rigs) and high-powered graphics processing units (GPUs), and they both are used as a payment method and traded on open markets as a way to make money. Bitcoins are accepted much more widely than any other alt coin, but are still nowhere near the universality needed to be a generally accepted currency.

The difference is that litecoin sits at where bitcoins were last year this time. Currently litcoins are trading at around $24, a little higher than where bitcoins were January 2013. Interested parties who missed the bitcoin bandwagon, or who got in too late to make serious cash, are looking at litecoin as the new best thing. The opportunity exists to get in early and make some money as the currency jumps to reflect a closer relationship to bitcoin, which has been written about before.

However, trends exist in the litecoin world that didn’t exist for bitcoin as it rose in value, specifically when it comes to mining technologies. The aforementioned GPUs and ASIC rigs are out of stock in many stores. New specially built mining computers are coming onto the market, already designed with litecoin in mind. Alpha Technologies announced this week that they are beginning to take pre-orders for their litecoin specific ASIC machines. With bitcoin, miners had to build their own devices as the process of mining was evolving with the rising value.

Lessons were learned with bitcoin that are now being utilized with litecoin, some to our detriment. Prices for GPUs have risen in response to market demand. Whereas graphics card companies like AMD Radeon and NVIDIA normally have bidding wars, trying to outsell each other in a back and forth seesaw of cutting prices, the new higher demand has actually raised prices for the companies instead of lowering them. And that can be directly related to litecoin.

Litecoin is also having an impact on the way bitcoins are trading, which is conversely what most expect. Thursday saw a rise on litecoin trading followed by a rise on bitcoin trading, exactly the opposite of the status quo. Normally, bitcoins lead the path, but with more investors focused on how litecoin will do in the new year that may change.

This year may see the boom of another altcoin, or potentially the false hope to many eager investors. After all, when Paul Krugman suggests bitcoin might be a bubble, the next Dutch Tulips, maybe someone should listen.

From Coindesk | China’s busiest bitcoin exchange, Huobi, has announced it will start trading litecoin on 19th March, however, the company’s users can begin uploading litecoins to their accounts starting today. Huobi is said to be finalizing tests for implementation before regular trading commences.

Huobi co-founder Jun Du said the company only considered implementing litecoin after careful deliberation and would provide the same business support and services it already does for bitcoin. A company user survey in January showed that about 20% of bitcoin investors also had money in litecoin. Furthermore, the frequency of searches for ‘litecoin’ as a keyword on Chinese search engine Baidu showed that the currency had achieved acceptance by a large number of investors in China.

source: http://www.ibtimes.com/litecoin-2014-will-cryptocurrency-overtake-bitcoin-new-year-1526316 & http://litecoinblog.org/ltc-spikes-result-huobi-announcement/

Will The Cryptocurrency Overtake Bitcoin In The New Year?

Texas Regulators Warn About Risks of Digital Currencies

Regulators in Texas have warned digital currencies like bitcoin are volatile and probably more suited to young people than retirees, the Dallas Morning News has reported.


Describing digital currencies as “very, very trendy” right now, Joseph Rotunda, director of enforcement at the Texas State Securities Board, said that all the “buzz” around digital currencies had led people to look only at the positives and not the risks.

Rotunda said it wasn’t just about bitcoin, but the myriad other digital currencies popping up every week that presented a risk to investors.

“There’s more of them in production right now, in development. It’s a real fertile ground,” he said. He admitted such investments could prove useful, but only for younger people and not those looking for future security.

“An investment tied to digital currencies may be suitable for someone in their 20s, in their 30s. When you’re talking about a retiree’s nest egg, that may not be something they’d want to subject to this type of a risk.”

Risks for unaware investors

Such warnings from government regulators have become fairly commonplace in recent months.

“In many ways, digital currencies operate as ‘online cash,’ only this type of currency is extremely volatile and can disappear the same way your money disappears when you lose your wallet,” said John Morgan, Texas securities commissioner.

Rotunda also pointed out that trust remains a huge issue in the unregulated space, in the security systems and infrastructure, accounting practices and overall business models of those providing digital currency services.

The level of anonymity digital currencies provide users also created risks, he said, adding:

“That makes it hard from a regulatory standpoint to regulate those transactions, but it also fosters an environment that caters to money laundering to conceal transactions to all sorts of situations where a promoter could be playing with investors’ money without their knowledge.”

Late last week, the Texas State Securities Board also warned energy firm Balanced Energy LLC with a cease and desist letter against getting involved in bitcoin, saying the company had not fully disclosed the risks of bitcoin to its investors, especially those associated with wild value swings.

Shavers ‘Ponzi’ case update

Yip also referred to Texas’ own Trendon T Shavers, who gained notoriety last July when he managed to raise 700,000 BTC at his company Bitcoin Savings and Trust (BTCST). The US Securities and Exchange Commission (SEC) described the operation as a bitcoin Ponzi scheme.

Shavers, incidentally, denied his was a Ponzi scheme and was actually never charged with any criminal offence. He did not accept any currency other than bitcoin, he said, and appeared not to keep any useful records of his transactions.

The SEC filed a civil complaint against him at the beginning of this month, posting a transcript of Shavers’ interview online, in which he referred to his scheme as merely one of lending and bitcoin value speculation based on the fluctuating price at Mt. Gox in early 2013.

source: http://www.coindesk.com/texas-regulators-warn-risks-trendy-digital-currencies/

Texas Regulators Warn About Risks of Digital Currencies

MinCoin

This is a blast from the past, in the worst way imaginable.


I’m a firm believer in the whole those who don’t learn from the past are doomed to repeat it thing. I’ve been meaning to do a ‘history lesson’ type of post on Mincoin, but never got around to it. Seems my hand is forced now, as mincoin was just rebranded and rereleased. Try not to get distracted by bells and whistles – the shiny new client is only there to distract you from the dark history of this coin.

Mincoin was one of the original scamcoins released during the 2013 altcoin frenzy. Mincoin claims not to be premined, but this is demonstrably false by parsing blockchain data. It featured large super blocks at the start, launched with minimal difficulty, and was launched without a working GUI client. The result? A very obvious premine, scooped up entirely by mincoin insiders.

We can clearly see that over 900,000 coins were created with a network hashrate that went no higher than 0.5 MHash, or in other words, 1 mining rig. Keep in mind that the block reward for mincoin is a paltry 2 coins, so this premine was absolutely massive in size.

It’s even more damning when you zoom out to a 60 day graph, giving you real perspective on how shamelessly large this premine was.

So, who were the insiders involved in the premine of this coin? None other than Realsolid and his two cronies Vipah and SuperTramp. Some time after release, a proper GUI client was finally pushed out, and RealSolid had rebranded his exchange site MCXNow, originally microcash exchange now, into it’s current form, mincoin exchange now. Keep in mind that this was before cryptsy was a player in the market, and getting onto an exchange was difficult. With all the pieces now in place, it was time to begin the pump.

RealSolid, SuperTramp, and Vipah – collectively controlling the only exchange platform that mincoin was traded, and 90% of all mincoins in existence – had no trouble pumping the price up to a high of 0.003 BTC. What followed was a dump of epic proportions, pushing the price under 0.0001 BTC.

So, how much money did they make from this pump and dump? Hard to say for sure, but based off market data, I would estimate anywhere from several hundred to a thousand BTC, making this one of the largest altcoin heists in history.

That happened about 8 months ago. Mincoin was publicly abandoned after the dump, and it’s been doing absolutely nothing since then, so naturally the price has bottomed out. Meanwhile, the mincoin insiders have been silently stocking up on cheap coins in preparation for round 2 of the scam, which you’re seeing being rolled out as we speak. Notice that the new release thread is self moderated, no doubt to try and censor anybody who exposes them. Guess they haven’t heard of the Streisand Effect… Or maybe they believe that there’s no such thing as bad press? Either way, I’m blowing the whistle on this one.

source: http://cryptolife.net/scam-alert-mincoin/

MinCoin

U.S. class action over bitcoin losses names Mizuho as defendant

One of Japan’s largest lenders, Mizuho Bank Ltd, has became ensnared in the U.S.


legal fallout from the collapse Mt. Gox, the leading bitcoin exchange that lost more than $400 million (240 million pounds) of customers’ digital currency.

The Japanese bank was added as a defendant on Friday to an existing lawsuit against Mt. Gox for allegedly aiding in a fraud by providing banking services to the exchange.

Mizuho held non-bitcoin currency on behalf of Tokyo-based Mt. Gox and its customers, according to the amended complaint by Gregory Greene, an Illinois resident who has said he lost $25,000 when Mt. Gox shut down last month.

Mt. Gox said in February it may have lost 750,000 of its customers’ bitcoins in a hacking attack and filed for bankruptcy in Tokyo. Customers have suspected a massive fraud.

The company filed for a U.S. Chapter 15 bankruptcy on Monday, which shielded the company from lawsuits in U.S. courts. Canadian bitcoin traders filed a class action against Mt. Gox and Mizuho on Friday in the Ontario Superior Court of Justice.

The amended U.S. class action complaint was filed in Chicago federal court. It accused Mizuho of knowing of Mt. Gox’s fraud, of not segregating funds that belong to Mt. Gox from those of its customers and of continuing to provide banking services that inflated losses for bitcoin customers.

“Mizuho profited from the fraud,” said the complaint.

Mizuho seemed to be trying to distance itself from Mt. Gox in January, according to a recording of a conversation between the bank and Mt. Gox’s chief executive, Mark Karpeles, that was published by the Wall Street Journal.

A bank official leaned on Karpeles to close the account voluntarily, citing “various issues.” But the bank official also warned the account could be closed without notice.

Karpeles told the Mizuho official Mt. Gox was unwilling to cooperate.

While the U.S. bankruptcy stopped American courts from issuing orders against the Tokyo company, it did not protect Karpeles, the parent company Tibanne or Mt. Gox’s U.S. affiliate. On Tuesday, the U.S. assets of those three were temporarily frozen by the federal judge overseeing Greene’s lawsuit.

The amended U.S. complaint said that despite the asset freeze, “evidence suggests” defendants continue to receive bitcoins in the United States.

The amended complaint also added as defendants two executives of Mt. Gox, Jed McCaleb and Gonzague Gay-Bouchery.

A Baker & McKenzie attorney who represented Mt. Gox in its U.S. Bankruptcy, John Murphy, did not immediately respond to a request for comment.

The case is Gregory Greene v Mt. Gox Inc et al, U.S. District Court, Northern District of Illinois, No. 14-01437

(Reporting by Tom Hals in Wilmington, Delaware)

source: http://uk.reuters.com/article/2014/03/15/uk-bitcoin-mtgox-mizuho-idUKBREA2E0GL20140315

U.S. class action over bitcoin losses names Mizuho as defendant

Icelandic government warns against Auroracoin

Early this morning, the Auroracoin medium of exchange was discussed by the Economic and Trade Committee of Parliament.


The Icelandic authorities expressed their concern about the currency, calling it risky business. They claimed that consumers needed to be educated and warned of the risks this virtual coin may pose. Pétur Blöndal, member of Parliament for the Independence Party and vice-chairman of the Committee, had little details to disclose but said there was an agreement regarding the fact that using the medium of exchange held great risk for everyone.

It seemed there were many things unclear and the launch of the coin seems to bring multiple issues to the table. The Committee was especially concerned about taxation. It’s difficult to work this out since politicians around the globe can’t seem to find a solution for taxing cryptocurrencies. Next to taxing, Blöndal also felt that the concept the coin was dangerous. The developers behind the medium had promised a limited supply, but according to Blöndal people had to blindly trust that this would not be changed. There was also a concern about how property rights were protected? To enforce his opinion, he claimed that it has been shown that Bitcoin has no real protection for rights of individuals.

“What is missing is that consumers be warned against this cryptocurrency,” said Blöndal. In ten days time, Auroracoin’s 50% premine will be distributed among all Icelanders.

But what will be the final verdict on Auroracoin? Will the government take special measures or just look at the launch from a distance, ready to intervene when necessary? According to Blöndal, representatives of the Central Bank of Iceland were present during the meeting. They were discussing if the cryptocoin could be deemed illegal and how the authorities could respond to this. There was an in-depth diagnosis of measures taken by other countries. The Bitcoin movement has received lots of bad publicity lately, and some other countries have been putting restraints on the cryptocurrency and even banning it. Up until now, nothing has been decided regarding the Central Bank’s stance towards Auroracoin.

Blöndal says that people have to realize that Auroracoin is not backed by anyone other than its developers. ”Currencies exist in many different forms, but this one is an example of a currency that is not backed by any government. We have laws regarding currencies, and they do not apply to this exchange method.”

Iceland has seen a few rough years, but they managed to stand up again because of their ‘alternative’ handling of the financial crisis. It was only a matter of time before people would come up with their own solutions, looking at the causes of the crisis in the first place. The whole world is, slowly but surely, starting to realize that fiat money can’t survive in its current form. The initiation of Bitcoin and other cryptocurrencies has shown that there can be another way. As usual, governments want to regulate but this takes a long time and the world doesn’t want to wait any longer. There’s potential danger to virtual money, denying this would be naive. On the other hand, there’s also an opportunity in it. Iceland is the first example of how a cryptocurrency might do something for one nation. In ten days, Auroracoin will make its airdrop and Icelanders will receive their coins.

source: http://www.cryptocoinsnews.com/2014/03/14/icelandic-government-warns-against-auroracoin/

Icelandic government warns against Auroracoin

Feathercoin Official Weekly Update #22

One Equal Temper of Heroic Hearts

Alfred, Lord Tennyson

Feathercoin Key Stats

321 days since genesis block creation

Approx. 35,300,000 of Feathercoins created

Approx. 14.67 days behind target generation rate


Bitcoin isn’t just an opportunity, it’s an obligation. The biggest threat we face isn’t fraud, it’s the unwillingness of good people to question their previous assumptions and search themselves for their true values. In many ways frauds act to keep us honest because money isn’t just a tool we use to get our needs met, it’s a site that brings together both honest and dishonest intentions.

Last week I felt compelled to comment on what was going on a Gox so Thomas (MadBitcoins) and I made some videos in response to the enormous amount of FUD and confusion surrounding the story. I apologise for not being able to bring you the newsletter as normal but I felt that there was an urgent situation that needed addressing.

And so now it’s over to you. The team at Feathercoin have decided that we would like you to write the Newsletters in the future as a collaborative effort. I will be on hand to write any content for the intros and TL;DRs but I will have no more say over the direction than anyone else. We feel it would be good to hand over the body of the News to the people in the community and it could give you the chance to get noticed and discover your voice.

One of the things I have tried to do with this Newsletter is to use it as a platform for all the hard working people who make Feathercoin what it is today. I think having a platform comes with a duty to help serve others so that they can see how they can help each other. I would like to see this Newsletter continue to shine a light on the people who perhaps aren’t getting the attention they deserve.

Oxford Meetup #4 by @Uncle_Muddy

We has a meetup at the Oxford Blue, the local Feathercoin watering hole. It was a good evening for all who turned up with several members from the Oxford Crypto Group arriving to the meet as well. All members of crypto are welcome to attend so please do not think this event is for Feathercoiners only. There was a lot of discussion over the merits of Dogecoin and the disaster that is MtGox.

Back to the Oxford Blue

As you will know we as a community have been working together to raise funds for Prostate Cancer UK, and with your help we smashed our original target of 3,000 FTC and have set our sights on doubling that goal. Again I would like to say thank you on both behalf of Prostate Cancer UK and the Feathercoin Community. Some of these funds were raised through a raffle which was drawn at the Oxford Blue, congratulations to all the winners.

A massive thank you has to go to the following people for donating prizes:

Netnerd

MTRinser

Matl

HopeStillFlies

And whilst I have Netnerd in my mind he brought along a few of his new Gold Edition cold wallet coins and they look fantastic! Complete with Certificate of Authenticity, to show where in the limited edition run of 100 your coin is. These unloaded, DIY cold storage wallet coins will soon be available on the Feathercoin Market for purchase.

Gold Edition Coin by @Bushstar

Warwick University Talk

by ChrisJ

Last Thursday I had the pleasure to attend Warwick University’s Economics Society on a debate entitled The Future of Finance. I was expecting to met with skepticism as I was the only person there representing a crypto currency but to my pleasant surprise everyone was very curious to learn more with some of the students already mining!

The students or as I like to call them The Future

This talk made me realise something. The real battle ground isn’t about winning over governments or pandering to regulators. A Cryptocurrency is already regulated in the code. The code is the law. The real battle ground is with the young as they are the ones who are going to inherit the system we leave them with.

The real battle lies outside of these chatrooms and forums, it’s out there in towns and cities all over the world, it’s with the people on the fringes.

My plan for the future is to spend more time pounding pavement and meeting people; there is plenty of awareness about Bitcoin but not very much understanding. This Friday I will be at Hull City Council to talk about how their local needs can be supported the power this technology provides and I would really appreciate your support.

Feathercoin 0.8.6 @Bushstar

Feathercoin has now been updated to 0.8.6 which fixes a bug experienced by some Mac users and other fixes included in Bitcoin 0.8.6. We are also including some of the excellent features that have been included in Bitcoin OMG. These include Disable Wallet Mode which allows you to run the client without a wallet attached and Coin Control so you can specify where the funds come from when sending and where the “change” should go. More control for the users is always a good thing.

Coin control gives you more choice over how your funds are moved in the wallet

To update to Feathercoin 0.8.6 please head over to the download section at the Feathercoin website. This includes the Windows, Mac, Linux wallets and a link to GitHub for those who want to compile their own.

MtGox by @motherlode1

The MtGox fiasco has left the Crypto community shocked and confused. The exchange that started it all turned around and abandoned us. Not something anyone would have foreseen. Some members of the community are rethinking their stance on Crypto and one can’t blame them for it. A lot of them have potentially lost a fortune. Add to that all the other incidents that have happened, anyone would have second thoughts. These are truly trying times for us.Those of us who were not invested in Gox can only offer our sympathy.

Our @ChrisJ is now a regular on the Bitcoin Group and the new World Crypto Network

We are limited by what we have and who we are but that does not mean we cannot push ourselves further. Bitcoin is not just an amazing piece of software, it’s more than that. It’s an ideology that has brought like-minded individuals together, it’s an ideology that has spurned the growth of start-ups, and it’s an ideology that has given us what we lost during the industrial revolution. It has given us control over our financial future and given us the freedom of choice. And it is our duty to ensure that this piece of software lives on.

To those who are having second thoughts about Bitcoin or feel that it may not survive. I want to borrow some lines From Alfred, Lord Tennyson’s poem “Ulysses”.

“We are not now that strength which in old days Moved earth and heaven, that which we are, we are— One equal temper of heroic hearts, Made weak by time and fate, but strong in will To strive, to seek, to find, and not to yield.”

Take from this what you will.

Feathercoin ATM by @Bushstar

UncleMuddy our resident engineer has taken a thread started by Kevlar and turned it into a working ATM. This is excellent work and shows the talent in our community. This ATM should début at the next Feathercoin meet in Oxford where we can buy preloaded private keys for English pounds. If you want to know more you can contact Uncle Muddy over at the Feathercoin forum.

Working Feathercoin ATM. The private key is dummy data so no need to try and scan it, I already did!

New Team Members by @Bushstar

Please welcome to the Feathercoin team Uncle Muddy, Netnerd, MrWyrm, Draco and motherlode1. Uncle Muddy is the chap responsible for the ATM above and last weeks unofficial newsletter, you will have seen him on the stream from the Oxford Blue if you watched it, I put him on the spot by getting him to do it. He did great so do not let him say otherwise. Netnerd is a very active member of the community who has been producing physical Feathercoin wallets like the gold one pictured in the newsletter above. motherlode1 has been doing an excellent job running the Feathercoin Reddit community and has a critical mind to apply to Feathercoin. By popular demand MrWyrm has been added to the team, he is level-headed in times of chaos and we appreciate his high levels of sanity. Draco bring in years of marketing and promotional experience and plans to work in areas of general marketing, merchant adoption, brand recognition and organising charity events.

TL;DR by @ChrisJ

Communities form around a common need and it’s important to remember that fraud isn’t something that happens somewhere else, it’s a threat that everyone needs to aware of. MtGox provides us with an opportunity to show the world how to respond to dishonest behaviour in the financial system.

We have suffered many economic crises in the past but for the first time in history the people have the tools they need to fix it for themselves and take back control. If you work for someone who creates a climate of fear you have an obligation

You can find the last official newsletter here: Everything Points Towards Success. Today special thanks go to Uncle Muddy, Motherlode1 and Ruthie for their contributions to this newsletter.

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source: https://www.feathercoin.com/feathercoin-official-weekly-update-22/

Feathercoin Official Weekly Update #22

$113m in Gox Bitcoins Believed To Be Moving Through Block Chain

Large amounts of bitcoins previously handled by Mt Gox, which have lain dormant for years, have started moving on the block chain.


Since the exchange blew up at the end of last month, people have been wondering where the stolen coins went, and have tried to trace some movements between Gox addresses. One participant on the bitcoin talk forum recalled an IRC conversation between Gox CEO Mark Karpeles and various users, which allegedly took place on June 23, 2011.

During their conversation, Karpeles (a.k.a. MagicalTux) offered to demonstrate that the exchange owned large numbers of coins, by sending a uniquely identifiable amount to a given address. He sent 424242.42424242 bitcoins to a specific address beginning with 1eHhgW6vquBY. Sure enough, they showed up.

A few weeks later, that large amount of bitcoins was broken into two smaller amounts. Then, more transactions occurred, peeling off 50,000 bitcoins at a time into separate wallets, possibly as a means of moving them into cold storage.

Most of these 50,000 bitcoin wallets were recombined on 16 November, 2011, into two separate wallets. One of these contained 500,000 bitcoins, while the other contained 50,000.

The 50,000 bitcoin address was created on that date, and was then dormant until July, 2012, when it began receiving small transactions along with several other outputs. However, no coins left that wallet, until today, when its 50,000 bitcoins were sent to another address, as part of outputs from various bitcoin addresses totalling 180,000 bitcoins ($113 million).

Since then, these coins have been rapidly splitting, with coins being subdivided repeatedly. One branch was found to have been splitting every 30 minutes in what appeared to be an automated fashion. This suggests that there may be some code splitting the coins.

We don’t know for certain that the 50,000-bitcoin address is indeed owned by Mt Gox, but it seems likely. The other, larger, wallet went through several transactions, with the bulk of the coins being sent to an address that was verified as Mt Gox-owned on the block chain.

The leaked Mt Gox crisis strategy document claims assets of 2,000 bitcoins, contained in a hot wallet, adding that the cold storage had been wiped out.

Why now?

So, why is this happening now? One explanation is that it makes the coins easier to use for a high volume of transactions. When bitcoins are sent, all the funds held in a particular address are sent, and the ‘change’ – the part that is surplus to requirements – is sent to a change address, usable by the sender. However, the block chain has to confirm that the change has been returned before it can be reused.

If you were to try and send bitcoins to lots of users very frequently from one address containing a lot of bitcoins, then you would have to wait 10 minutes or more for the block chain to confirm your returned change, before conducting your next transaction.

Core bitcoin developer Gregory Maxwell also suggested that this was a Mt Gox transaction, based on interactions that he had with the Mt Gox API.

Maxwell also argued that the splitting behaviour is consistent with a function in the leaked source code from Mt Gox. This suggests that some of the coins have been dropped into the Mt Gox online wallet, and that the system is now automatically breaking them up, he said.

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source: http://www.coindesk.com/gox-money-moving-through-block-chain/

$113m in Gox Bitcoins Believed To Be Moving Through Block Chain