Blockchain technology

[angelburst29]

One of the world's largest Bitcoin and Ether cryptocurrencies exchanges Bithumb has recently been hacked, resulting in loss of more than $1 Million in cryptocurrencies after a number of its user accounts compromised.

Largest Cryptocurrency Exchange Hacked! Over $1 Million Worth Bitcoin and Ether Stolen
_http://thehackernews.com/2017/07/bitcoin-ethereum-cryptocurrency-exchange.html

Bithumb is South Korea's largest cryptocurrency exchange with 20% of global ether trades, and roughly 10% of the global bitcoin trade is exchanged for South Korea's currency, the Won.

Bithumb is currently the fourth largest Bitcoin exchange and the biggest Ethereum exchange in the world.

Last week, a cyber attack on the cryptocurrency exchange giant resulted in a number of user accounts being compromised, and billions of South Korean Won were stolen from customers accounts.

Around 10 Million Won worth of bitcoins were allegedly stolen from a single victim's account, according to the Kyunghyang Shinmun, a major local newspaper.

A survey of users who lost cryptocurrencies in the cyber attack reveals "it is estimated that hundreds of millions of won [worth of cryptocurrencies] have been withdrawn from accounts of one hundred investors. One member claims to have had 1.2 billion won stolen."

Besides digital currencies, hackers were succeeded in stealing the personal information of 31,800 Bithumb website users, including their names, email addresses, and mobile phone numbers, the South Korean government-funded Yonhap News reported. However, Bithumb claims that this number represents approximately 3% of its customers. The exchange also told Yonhap that it contacted South Korea's cybercrime watchdog on June 30, Friday after it learned of the hack on June 29.

Bithumb believes that one of its employee's home computer was hacked in the attack and not its entire network and no passwords were compromised, so it is impossible for hackers to gain direct access to user accounts.

The digital currency exchange says that the loss of funds is the result of using "disposable passwords" in order to carry out digital transactions online.

"The employee PC, not the head office server, was hacked. Personal information such as mobile phone and email address of some users were leaked," Bithumb told the newspaper. "However, some customers were found to have been stolen from because of the disposable password used in electronic financial transactions."

While more than 100 Bithumb customers have already filed a complaint with the National Police Agency's cybercrime report center regarding the hack, South Korean officials are now investigating the incident.

South Korea is a leader in ethereum cryptocurrency. Approximately 20 percent of global "ether" trades are exchanged for won, the South Korean currency. However, ether's popularity appears to have attracted those willing to exploit it.

World's Fourth Largest Cryptocurrency Exchange Hacked in South Korea
https://sputniknews.com/science/201707051055256004-ethereum-currency-digital-hack/

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.

Ethereum currency is a digital currency, similar to Bitcoin, that can be used to pay for items.

Recently, customer information worth millions of dollars was stolen from South Korea's largest exchange, Bithumb, where customers buy and sell ether as well as Bitcoin.

Bithumb is the fourth largest cryctocurrencty exchange in the world by volume.

​Local news reports said that Bithumb contacted the South Korea cybercrime watchdog on June 30 after learning of the hack. According to reports a Bithumb employee's home computer was hacked and information on 30,000 customers was stolen.

No passwords were compromised, but reports suggest that South Korean officials are now investigating the hack.

If had indeed been stolen from Bithumb customers, this hack is just another reason why some argue that it may not be wise to entrust your funds to a third party.

In April 2017, a smaller South Korean cryptocurrency exchange was hacked and lost millions of dollars.

Other options besides storing funds with a third party for ethereum users include storing the private keys that control their funds on hard drives that are not connected to the internet. This isn't as convenient (or maybe even beneficial, if you're a day trader), but gives hackers fewer openings.

According to sources, this may be just the start of things to come. As ethereum and cryptocurrencies in general continue to rise in value and gain mainstream attention, more hackers will most definitely come along and try to take advantage.

 

[Cosmos]

Pretty interesting viewpoint on Bitcoin and the whole Cryptocurrency idea in general:

http://<iframe width="854" height="...1s" frameborder="0" allowfullscreen></iframe>

The new phenomenon of bitcoin and blockchain, otherwise known as cryptocurrencies, are currently making a name for themselves as currencies that are different from all the others. Bitcoin is a form of digital currency, created and held electronically. Bitcoins aren’t printed, like dollars or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that creates mathematical code.

Bitcoin’s most important characteristic, as the story goes, is that it is decentralized. No single institution or major bank controls the bitcoin network. This puts some people at ease, because it means that a large bank can’t control their money. But is that really the case?

Nikolai Starikov is a well known author and politician. Recently, one of Starikov’s books was spotted lying on President Putin’s desk. “Nationalisation of the Ruble: the Path to free Russia” can be seen in The Putin Interviews - Vladimir Putin Gives Oliver Stone a Tour of His Offices, at 1 minute and 18 seconds. This has undoubtedly won him extra subscribers and readers!

Bitcoin isn’t based on gold, but mathematics, and there is a limit to have many can be created. However, given that nobody controls the production of bitcoin - Starikov asks – by which mechanism does a computer programme generate its own code? Is this artificial intelligence? If so, we didn’t know this kind of level of artificial intelligence exists. Furthermore, why is it that it has been allowed to exist, given that it is only Central Banks of any one country that are constitutionally allowed to create legal tender? If you or I tried to create our own currency, that would be against the law.

Starikov draws the conclusion that bitcoin has been intentionally recognised by international bankers as legal tender. Given that the creation of wealth and the control over it has destroyed countries and empires throughout centuries, it is unlikely that this new currency exists in a vacuum, free from human intervention.

Similarly, he concludes that the development of cryptocurrency is the beginning of the process designed to ditch the dollar, and with it the massive US debt of 19 trillion dollars.

 

[angelburst29]

If you’ve been keeping up with the cryptocurrency market at all over the past few years, then you’ll recognize Bitcoin as the posterchild for the digital currency movement. However, in recent months, Ethereum has been surging in popularity as more miners have discovered the relative ease in which money can be made using off-the-shelf hardware components — namely mid-range graphics cards.

Ethereum And Bitcoin Energy Consumption Surpasses Entire Countries' Power Budgets
https://hothardware.com/news/ethereum-and-bitcoin-energy-consumption-surpass-entire-countries-power-budgets

In addition to the hardware that you’ll need to purchase (or repurpose) for mining, there’s also energy consumption to keep in mind. Even though mining GPUs like the ASUS MINING P106 and Biostar Radeon RX 470D have been designed and optimized for efficiency, electrical consumption is still a big cost that must be factored into any calculations on profitability. And considering that the price of an Ethereum token has surged from $10 at the beginning of 2017 to as high as $300, an influx of amateur miners has entered the fray. That means more mining rigs and even higher energy consumption.

Power use is up so dramatically, in fact, that Ethereum (and Bitcoin) mining is consuming the same amount of electricity as a small country.

According to the latest Bitcoin Energy Consumption Index, Bitcoin mining is pegged at an estimated annual electricity consumption value of 14.54 terawatt hours (TWh). Breaking the numbers down further, the average Bitcoin transaction requires 163 kilowatt hours (KWh) of electricity, which is enough to power the average U.S. household for about five and a half days. That would put Bitcoin on par with Turkmenistanm, which ranks 81st when it comes to the energy consumption rankings of countries around the globe.

For comparison, Ethereum mining has annualized average electric consumption that is roughly a third of Bitcoin, or 4.69 TWh. The average Ethereum transaction requires 49 KWh, which is enough to power a U.S. household for about a day and a half. When compared to global energy consumption, Ethereum most closely aligns with Moldova, which ranks 120th globally.

Despite its lower power requirements, annualized global revenue for Bitcoin comes in at roughly $2.4 billion compared to around $2 billion for Bitcoin. It’s no wonder that Ethereum is on track to overtake Bitcoin in market cap, in what is being billed as “The Flippening”.

It should be noted, however, that the power requirements for Ethereum mining could go down in the future, as the network’s developers are working on transition from a proof-of-work algorithm to a hybrid proof-of-stake model.

 

[Carl]

Crowdfunding is going to be one of the biggest uses of cryptocurrency, and in my opinion the ICO bubble is just getting started.

https://news.bitcoin.com/russia-legalize-icos/

Russia prepares to legalise ICOs:

Russian lawmakers are working on amendments to the civil law aimed at legalizing ICOs, according to Vedomosti, one of Russia’s largest newspapers. Discussion of the amendments has already begun by an interdepartmental working group under the State Duma, which has been assessing the risks of cryptocurrency use in the nation.

An associate criminal law professor at the Moscow State Institute of International Relations (MGIMO), Elina Sidorenko, heads the working group. “The group includes representatives from the Parliament, including the initiative’s originator Andrei Lugovoi. We also cooperate with other parliamentary committees,” she told Forklog in an interview published on Tuesday. “Aside from that, there are representatives from the central bank and the financial monitoring service.”

The Need to Regulate ICOs

According to Konstantin Vinogradov, Senior Associate at Runa Capital, there were more than 150 ICOs globally in the past year, which totaled more than $500 million.

Sidorenko explained that “legislative gaps exist which do not allow legal settlement of crowdfunding issues and ICO contracts,” according to Russian 360tv which also reported her saying:

The State Duma should undertake the development of legal mechanisms that would allow the verification of such contracts. They should also be designed to identify users and protect the rights of the holders of tokens to fulfill the obligations of issuing companies

ICOs require investors to use certain cryptocurrencies, typically ether and bitcoin, in order to invest in their projects. The legalization of cryptocurrency in Russia can help large companies and small businesses that need investors, Vesti Finance reported market participants saying. “If the law is to allow the minimum cost of cryptocurrency transactions in Russia, this step will be the springboard for the takeoff of the Russian economy,” the publication wrote.

The working group has also been working on a bill to provide a legal framework for cryptocurrencies including bitcoin and ether in Russia. “The bill’s text is currently being finalized. When it’s done, it will be submitted to all departments,” Sidorenko told Forklog.

Early this month, Russian politician and the Presidential Commissioner for Entrepreneurs’ Rights Boris Titov proposed for the country to follow Japan’s lead and legalize bitcoin. Sidorenko echoed this sentiment, telling the publication that “our task now is to give some confidence to the market players and take the Japanese path.” She then described:

The bill will be a framework. Therein, we define the nature of cryptocurrencies and their status, as well as basic principles for the cryptomarket operation. Other provisions will be mostly referential. We don’t try to create an enormous and viscous law that defines all parameters of a new market right away. Creating such a law would just hinder the market.

The topic of cryptocurrencies has frequently been in Russian media recently. In June, President Vladimir Putin met with Ethereum creator Vitalik Buterin. “The conversation was held following the President’s meeting with heads of major foreign companies and business associations,” Putin’s official website states, adding that “Mr. Buterin described the opportunities for using the technologies he developed in Russia.”

When the Russian project Waves is set up fully, it will be a better version of ethereum for ICOs, app development, and will integrate a decentralized exchange between cryptocurrencies.

 

[Mike]

I've been reading some of the white papers of these ICOs. One in particular (link to white paper below), the TenX Pay token and debit card caught my eye in terms of what is coming in terms of cryptocurrency and token use in everyday life. They basically are issuing Visa or Mastercard debit cards (credit cards in the future) that a person funds with cryptos and then is able to spend and use them just like a person would use a normal debit or credit card. The ICO sold out in something like 8 minutes or less last month. People are requesting and using the TenX right now in the early stages, so for good or bad crypto use will be entering into real life application.

After reading the paper, I was honestly torn between it heralding the 'mark of the beast' and totalitarian cashless society to it being a game changer in terms of decentralizing the monetary system away from the control of TPTB.

One thing I do think is that cryptocurrencies and tokens seem only set to grow in large amounts in terms of how they impact the real world. FWIW

TenX Pay White paper - https://www.tenx.tech/whitepaper/tenx_whitepaper_final.pdf

 

[Carl]

I've been reading some of the white papers of these ICOs. One in particular (link to white paper below), the TenX Pay token and debit card caught my eye in terms of what is coming in terms of cryptocurrency and token use in everyday life. They basically are issuing Visa or Mastercard debit cards (credit cards in the future) that a person funds with cryptos and then is able to spend and use them just like a person would use a normal debit or credit card. The ICO sold out in something like 8 minutes or less last month. People are requesting and using the TenX right now in the early stages, so for good or bad crypto use will be entering into real life application.

After reading the paper, I was honestly torn between it heralding the 'mark of the beast' and totalitarian cashless society to it being a game changer in terms of decentralizing the monetary system away from the control of TPTB.

One thing I do think is that cryptocurrencies and tokens seem only set to grow in large amounts in terms of how they impact the real world. FWIW

TenX Pay White paper - https://www.tenx.tech/whitepaper/tenx_whitepaper_final.pdf

I think over all it will be much like the internet, I.E. a mix of good and bad. But mainstream adoption is almost guaranteed at this point. And once this gets big enough I don't see how the bankster types can ignore it - it's yet another market for them to speculate on and pump to the limit

 

[realitybugll]

sorry -- wrote a post that I'd rather not have in a google index ( if this board is? I thought it wasn't but not sure)

 

[Mike]

I found this three part series of articles worth reading if you want a quick education on the subject of blockchains, cryptocurrencies, dApps etc with the most up to date information. There are a number of links in the three articles that I intend to go back and read when I have the time.

Blockchains, Cryptocurrencies & the New Decentralized Economy: Part 1 — A Gentle Introduction
https://medium.com/blockchain-at-berkeley/blockchains-cryptocurrencies-the-new-decentralized-economy-part-1-a-gentle-introduction-edcb4824b174

Blockchains, Cryptocurrencies & the New Decentralized Economy: Part 2 — Blockchain-Based Apps
https://medium.com/blockchain-at-berkeley/blockchains-cryptocurrencies-the-new-decentralized-economy-part-2-blockchain-based-apps-e6ea71236ca

Blockchains, Cryptocurrencies & the New Decentralized Economy: Part 3 — The New Internet
https://medium.com/blockchain-at-berkeley/blockchains-cryptocurrencies-the-new-decentralized-economy-part-3-the-new-internet-818d598afd0b

Also read this part of this Zero Hedge article, which gives more of a view of what US officialdom might think about cryptocurrencies and blockchains:

Former 'Plunge Protection Team' Member Warns "Blockchain Is Freaking Governments Out"
http://www.zerohedge.com/news/2017-07-22/pippa-malmgren-talks-bitcoin-refugee-crisis-and-plunge-protection-team

On The Rise Of Blockchain and Cryptocurrencies and The Fall Of Dollar Hegemony

Moving on, Townsend took the conversation in a direction that he said might be outside of Malmgren’s comfort zone: The rise of cryptocurrency’s like bitcoin. Contrary to his expectations, Malmgren said she’s been closely following the increasing use of cryptocurrencies, adding that they will likely play a role in determining who dominates the global economy, and therefore determines the monetary framework, after precipitating the next big paradigm shift, which will lead the world away from the dollar-based framework that exists today. Governments like China and Russia, which are seeking to create their own digital currencies, pose a greater threat to the long-term dominance of the dollar than they, or the US, realize.

Erik: I want to shift gears now to a topic I didn’t used to think of as being geopolitically oriented, which of course is your area of expertise, and that is crypto currencies. In the beginning, Pippa, if you look at what BitCoin was at the very beginning, it was something only interested extreme Libertarians who were very interested in financial privacy. Nobody else was paying attention to it. It was designed really to usurp the ability of government to interfere with and control people’s finances. It seems that it is almost going through a complete transformation where now we have the Ethereum guy, I forget his name (Vitalik Buterin), meeting with Putin talking about some kind of partnership to create a digital crypto currency that will become a national currency for Russia. Meanwhile, PBOC is advertising to hire block chain engineers to help to design the digital yuan or digital RMB. So all of a sudden, it seems like what’s going on, and I don’t remember the gentleman’s name. But there was someone from PBOC, a very senior official, saying it was time for central banks to stop ignoring crypto currencies and recognize that we have got to take the lead and we have got to be in charge of these things and design what we
want them to be. Where is this going? It seems like to me this is a game changer if national governments are going to get behind crypto currencies. Where does this take us?

Pippa: Totally. I think it is a massive market and geopolitical issue. I have written a little article about this, which I put up on LinkedIn, where I said you have got to understand if the size of your debt problem is so big that it can’t be paid off and in fact even inflation, which is the usual way you would seek to default on your debt slowly over time, you can’t get enough inflation generated, then there is one further option. And that is you literally abandon the entire system of money, and accounting. I know that sounds unbelievably radical, but we have seen it happen before. I explained the example of Britain in 1834, when they abandoned the traditional system they had used for 1,000 years at that time, which was called the Tally Stick system. So when we say we tally things up or the word stock market refers to the use of little wooden stocks. They were little pieces of wood on which you record every transaction during your life, every borrowing, every lending deal, every asset acquisition, every tax payment. The way it worked was it was literally a wooden board. You cracked it half really roughly so the two sides definitely did match and couldn’t be faked. Then the borrower and the lender each marked all their transactions. The stock end was always the smaller end, so that’s where we get stock market. There was a market in the stocks, these little wooden sticks. Bottom line was why would you abandon a system that has worked perfectly beautifully for 1,000 years. The answer is you had 200 years of war debts that had accumulated. They were unable to get inflation up enough without causing social unrest, and so the government said hey, let’s take the tally sticks back, and give people this great new innovation called paper money.

You can imagine everyone said I am going to hand over this record, this ledger of my entire net worth, and you are going to give me a piece of paper. Really? This is a joke. In the end, what the government had to do was confiscate the tally sticks, and they took them to parliament to burn them. They misjudged how much heat the fire would throw off, and that is what caused Parliament to burn to the ground in 1834. It was the destruction of the system of accounting and money. In its place, we adopted what we now use, which is piece of paper we call cash. Today, we are on the brink of similar step change, and the way you will do it is you move to electronic money in conjunction with blockchain. Blockchain is the new ledger, and e-money is the new currency.

The question is whose e-money. So everybody in government circles have been watching the Indian experience because the prime minister stepped up to the platform in early November and basically said we are going to move all of you, a billion people, off paper money and onto electronic money, and we are going to do it in three months. They did it, and they did it successfully. Now governments everywhere are saying we want to do that because, guess what happens when you move to e-money. First of all, you really eliminate the black market because you can’t transact anymore without it being seen. And so, for example, the European Union are talking heavily about moving to electronic money because then all this black market activity that happens in Greece and Italy where there’s no tax, we will be able to get all that tax revenue off it. That’s one reason. The second reason is with blockchain you have total transparency over every single step of a transaction, complete providence of every single transaction. The question is who gets to see it. I think this is where governments are suddenly a little schizo because on the one side they think they are going to have the ability to see every transaction that you and I and all the listeners are engaged in, but Ethereum has created this platform where actually they won’t necessarily be in government’s hands, maybe in private hands.

The question is can you trust the private hands who are issuing Ethers as much or more as you trust governments. So governments are being to say let’s create our own version, and that’s where you get the PBOC saying we’ve got to control this. Because otherwise, you are going to end up with private sector currencies that possibly are trusted more than government currencies, and that will lead to transactions offline that governments can’t see. There was a report going around the Internet recently about some guy who made $200 million bucks trading on Ethereum in a month, and the question was who will tax that. The answer is nobody. That freaks governments out to say the least, particularly given their debt situation. So I think this is a huge, huge thing, and all investors have to think very carefully about it. I will say one last thing about it. You have got to get familiar with quantum computing, and there is loads of stuff on the net about it. But the reason it matters is because of the speed at which you can process information. We now have quantum computers. The Chinese apparently have the fastest. There is D-wave out of British Columbia, but basically you can break a block chain password or a Bitcoin password in like less than a minute if you have a quantum computer. The question is who is going to have them, and the answer is mainly governments but big corporations are buying them like crazy. Volkswagen just bought one. We are going to see major corporations buying that computer power.

The question then is who has most transparency over the block chain and e-money, and I would argue it is going to be whoever has the most and fastest processing power, which may be governments at times, it may be private at times, it may be fluid. That’s what we have to think about as investors.

 

[jonspock]

I think over all it will be much like the internet, I.E. a mix of good and bad. But mainstream adoption is almost guaranteed at this point. And once this gets big enough I don't see how the bankster types can ignore it - it's yet another market for them to speculate on and pump to the limit

Almost guaranteed? That is a very strong statement. What is your time frame for mainstream adoption? It is an easy statement to make without a time frame. If it's true, then why has the real world usage of cryptocurrencies not really increased much over the last couple of years? Some say it has even decreased.

 

[Ant22]

I thought this may be of interest to some of you: "Major Bitcoin trading site in limbo as Greece arrests Russian man on US charges of laundering $4bn" (Published today)

https://www.rt.com/news/397639-bitcoin-btce-linked-arrest-laundering/

Cryptocurrency exchange platform BTC-E has gone on “maintenance” after the arrest of alleged Bitcoin “crime mastermind” Aleksandr Vinnik in Greece. Vinnik has been indicted by a grand jury in California, reportedly on charges of laundering $4 billion.

“An internationally sought 'mastermind' of a crime organization has been arrested,” said a statement from Greek law enforcement officials.

“Since 2011, the 38-year-old [Vinnik] has been running a criminal organization which administers one of the most important websites of electronic crime in the world,” the statement said, adding that “at least” $4 billion is believed to have been laundered.

Vinnik was arrested in the resort area of Halkidiki, near the city of Thessaloniki in northern Greece, with two laptops, five tablets and multiple mobile phones found in his hotel room, Bloomberg reported.

He appeared before a prosecutor, with the US lodging an extradition request, which could be considered within the next two months. While the exact charges remain unknown, a US source told Bloomberg that the entrepreneur was wanted for operating “a website that carried out Bitcoin conversions for proceeds from online hacking ransom, drug running, identity theft and tax violations.”

Vinnik is claimed to be linked to BTC-E, a digital currency trading and exchange platform operating in US dollars, euros, Russian rubles and a list of popular cryptocurrencies, including Bitcoin.

Founded in 2011 by two men known only as Aleksey and Aleksandr, BTC-E has become one of the top destinations for anonymous cryptocurrency trade, earning it the reputation of a shadowy trading place. It has also boasted reliable anti-hacking protection and has been repeatedly targeted by major DDoS attacks.

In 2016, the website was banned in Russia by a decision of a St. Petersburg court.

Reuters reported that over 7 million Bitcoins – units of the anonymized virtual currency – had been deposited through the platform, and 5.5 million withdrawn, which is equivalent to $17.5 billion in deposits at current exchange rates of about $2,500 for 1 Bitcoin.

On Wednesday, a day before the arrest was announced, BTC-E said that it was suffering from “possible problems with access,” and later the platform was shut down.

“At the moment, work is underway to restore the service. Approximate terms from 5 to 10 days. Thank you for understanding #btce,” read the latest tweet.

Meanwhile, users noted that tens of thousands of Bitcoins began moving off the platform and onto obscure accounts, although there is no clear indication that the downing of BTC-E, or the transactions are directly related to Vinnik’s arrest.

WizSec, a Bitcoin security firm, used the occasion to publish an investigation that accuses Vinnik of playing a “crucial role” in the notorious theft of Bitcoins from Mt. Gox, another Bitcoin exchange, starting from 2011 – a crime potentially worth billions of dollars.

Wizsec said its findings were “the result of years of patient work,” that its investigators “patiently kept quiet while forwarding findings to law enforcement, so as not to tip suspects off and to maximize the chances of arrests.”

“To be clear, this investigation turned up evidence to identify Vinnik not as a hacker/thief but as a money launderer; his arrest news also suggests this is what he is being suspected for. He may have merely bought cheap coins from thieves and offered a laundering service,” said WizSec. “He is, however, a crucial piece of the puzzle, as he will have likely known who he was dealing with and laundering for, and so represents a major breakthrough in the case.”

I also came across this article from last week (17th of July): "$10bn cryptocurrency devaluation in 24 hours, Bitcoin hit hard"

https://www.rt.com/business/396604-bitcoin-ethereum-cryptocurrency-price-collapse/

Cryptocurrency investors have suffered heavy losses following a dramatic drop in the price of Bitcoin and Ethereum in recent days.
Bitcoin fell to around $1,863 and Ethereum to around $133 over the weekend – 38 percent and 67 percent off their all-time high respectively. Bitcoin, in particular, suffered heavy losses since hitting a high of $3,018 on June 12.

By Monday, Bitcoin had recovered slightly to $2,129 while Ethereum also rose to $176.

The decline appears to be part of a wider trend across the market, with trade publication Coindesk reporting Sunday that the worth of all publicly traded digital currencies had fallen by a total of $10 billion in 24 hours over the weekend.

Writing for VentureBeat,, analyst Anupam Varshney put the fall down to market manipulation and amateur investors with little experience of the stock market panicking after seeing their first losses.

“The cryptocurrency market is as unregulated as it can get,” Varshney wrote. “Things that would result in jail time on the stock market are legal here. In such a scenario, it’s no surprise that big players are manipulating the markets for their own gain.”

He added that “amateur investors, on the other hand, want to make quick profits. Once the price starts falling, these investors tend to panic sell.”

Meanwhile, Mark Karpeles, the head of the failed Japan-based Bitcoin exchange Mt. Gox, pleaded not guilty to charges of embezzlement at the opening of his trial in Tokyo earlier this month.

The exchange was shut down after it reportedly lost 850,000 bitcoins worth $500 million. Mt. Gox blamed hackers for the loss. Japanese authorities later charged Karpeles with accessing the exchange’s computers and inflating his own account.

Karpeles denies the charges.

 

[Carl]

I think over all it will be much like the internet, I.E. a mix of good and bad. But mainstream adoption is almost guaranteed at this point. And once this gets big enough I don't see how the bankster types can ignore it - it's yet another market for them to speculate on and pump to the limit

Almost guaranteed? That is a very strong statement. What is your time frame for mainstream adoption? It is an easy statement to make without a time frame. If it's true, then why has the real world usage of cryptocurrencies not really increased much over the last couple of years? Some say it has even decreased.

I don't envision everyone paying for everything in cryptocurrencies - that's somewhat of a red herring. I see the biggest uses will be: Crowdfunding, not just of tokens but of actual real world companies. Hedge funds offering shares through crypto tokens. Prediction markets. Finance using crypto assets as collateral. Token creation ecosystems. Then further technology uses such as 'Internet of things' applications (if that really takes off), and in-app or web-based micro payment methods.

I thought this may be of interest to some of you: "Major Bitcoin trading site in limbo as Greece arrests Russian man on US charges of laundering $4bn" (Published today)

Yeah, it's a wild west for investors. And particularly right now huge uncertainty reigns. Market movers are raking it in, because for them this is like a professional footballer playing in a 12 year old kids' tournament (but for real big prizes). At the same time it is still quite a fair game in comparison and a much purer form of capitalism.

Compare it to risking it all for 5% a year on rigged stock markets, buying property at all-time-highs, or buying precious metals and watching the price remain suppressed for the next few years.

Despite a number of large ETH hacks, BTC-E Exchange going down, Chinese bitcoin miners announcing a hard-fork, and negative SEC ruling on initial coin offerings, prices have actually been quite resilient.

 

[jonspock]

I think over all it will be much like the internet, I.E. a mix of good and bad. But mainstream adoption is almost guaranteed at this point. And once this gets big enough I don't see how the bankster types can ignore it - it's yet another market for them to speculate on and pump to the limit

Almost guaranteed? That is a very strong statement. What is your time frame for mainstream adoption? It is an easy statement to make without a time frame. If it's true, then why has the real world usage of cryptocurrencies not really increased much over the last couple of years? Some say it has even decreased.

I don't envision everyone paying for everything in cryptocurrencies - that's somewhat of a red herring. I see the biggest uses will be: Crowdfunding, not just of tokens but of actual real world companies. Hedge funds offering shares through crypto tokens. Prediction markets. Finance using crypto assets as collateral. Token creation ecosystems. Then further technology uses such as 'Internet of things' applications (if that really takes off), and in-app or web-based micro payment methods.

You are creating your own red herring argument and then naming it as such? I'm not following the logic there.
Sorry but I don't see crowdfunding as mainstream adoption of cryptocurrencies if that's what you meant when you said mainstream adoption. Plus why the need to go from Fiat into Bitcoin (or a clone) and then yet again into another token? People do it now for speculation, but unless everyone is already in Bitcoin,etc (i.e. real mainstream adoption) it doesn't seem worthwhile to have all of those layers.

 

[Carl]

You are creating your own red herring argument and then naming it as such? I'm not following the logic there.
Sorry but I don't see crowdfunding as mainstream adoption of cryptocurrencies if that's what you meant when you said mainstream adoption. Plus why the need to go from Fiat into Bitcoin (or a clone) and then yet again into another token? People do it now for speculation, but unless everyone is already in Bitcoin,etc (i.e. real mainstream adoption) it doesn't seem worthwhile to have all of those layers.

What I mean is mainstream adoption will not be everyone having e.g. an ethererum wallet on their phone, with a long ETH address, paying for everything in ethereum. (Although there is potential for that in the new debit cards such as Tenx).

It will mainly be when very large numbers of people are using apps, services, devices etc. which run on crypto technology, and they don't even have to see or understand any of the layers.

The dotcom bubble started with people seeing the huge potential in the technology, which drove speculation too far in the short term. Of course the stocks crashed and then it then took many years for that potential to be actually realised - for the technology to mature and for the infrastructure to be put in place to make things like Netflix, Amazon Prime or Google Maps possible. We are likely to see the same here but on a shorter timescale.

 

[Menna]

The infrastructure for main stream adoption is here. Online Wallets, apps, exchanges to buy sell currencies, pay for products with bitcoin, you can join mining pools, algorithmic trading technology platforms (I am in one and its very profitable) you can load bitcoin on a visa debit card, you can enable merchants to start accepting bitcoin for their products and once they accept the bitcoin it can convert to the currency in their country and more

If you mean mainstream as far as majority % of population using bitcoin who knows no one knows when an individual will make a decision but the infrastructure for it to be mainstream is here so to me its mainstream already.

 

[Scottie]

Well, this is my current take on it:

http://<iframe width="560" height="...tc" frameborder="0" allowfullscreen></iframe>

The thing is, think about the internet. All this stuff is great, right? Sure.

But what among all the internet "stuff" is the greatest?

I would say the sharing of information, like Laura's work, SOTT, etc. That doesn't require Web 2.0. It only requires widespread acceptance and use of this thing called the internet.

All the other stuff on top is cool, but it's kind of "fluffy", ya know? It's also being used to track us in ways that would have made people barf even 20 years ago.

I guess I tend to always look at things in terms of the Bigger Picture. When I do that, I don't see the extraordinary value in cryptocurrencies, because as of yet, there is none. There is the promise of great things using blockchains, but no "killer app" as I said in the vid.

And that "promise" seems to always be made by people who don't even really seem to know what they're saying. It generally reeks of a sales pitch as opposed to nuts-and-bolts techie stuff.

In many ways, it reminds me of a certain "Open Source Revolution"... that never quite materialized in the idealistic way that many people hoped it would. The reason it never turned out the way it could have turned out is because this world is like a psychotic theme park. The loonies are running the asylum.

So even if the tech is potentially great, how it will evolve and eventually be used (and if) remains an epically huge question mark in my book.

Having said that, if anyone makes tons of money via cryptocurrencies, please send me some. ;D