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After PayPal recently announced a ban on everything related to trade in Bitcoin (including Casascius bitcoins and mining equipment), eBay have made a category specifically catering to sales of Bitcoin. Ebay are not, however, allowing people to pay for items in Bitcoin itself. This move seems unusual, seeing as eBay effectively owns PayPal. It is undeniable that PayPal’s regulations have, in the past, been somewhat politically motived. An example of this is their blocking of funding to Wikileaks, which prompted numerous denial-of-service attacks from hacker groups such as Anonymous. This contradiction of agendas between eBay and PayPal seems peculiar. Why would eBay encourage sales in Bitcoin, whilst simultaneously preventing any payments from going through their main payment processor? Read more at: http://www.coinchilli.com/ebay-accepts-bitcoin/J.C Axe |
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The Internal Revenue Service (IRS) in the US has declared Bitcoin as ‘Property’, as opposed to currency, and will be taxed as such. To those involved in the Crypto community, this represents a significant change in the way that Bitcoin vendors trade. “The notice provides that virtual currency is treated as property for US federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency,” – The IRS For vendors and traders accepting payments in Bitcoin in the US, profits will be treated as ‘Capital gains’ as opposed to income. This means that they will be subject to a lower taxation rate, with a maximum long-term tax rate of 20%, as opposed to the maximum income tax rate of 39.6%. For miners of Bitcoin, the taxation rates are a little more tricky; Miners that produce their own bitcoins are charged two lots of tax. Firstly, they must declare the ‘fair market value’ of the virtual currency (on the day that it is mined) as a part of their gross income. This will then be subject to capital gains tax at the point of sale. The taxpayer must take this fair market value on the date of acquisition as the basis price for the coins. Capital gains will be due on the difference between that basis price and the sale price. If however, an individual mines bitcoin as a business, the net earnings from that business will be treated as self-employment income, and will be subject to self-employment tax... Read more at: http://www.coinchilli.com/bitcoin-will-be-taxed-in-the-us-as-property-not-currency/J.C Axe |
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It appears that Mt Gox has discovered a wallet containing 200,000 Bitcoins they had hidden away, unnoticed, in cold storage. The official statement from Mt Gox claimed- “Following the application for commencement of a civil rehabilitation proceeding, these wallets were rescanned and their balance researched. On March 7, 2014, MtGox Co., Ltd. confirmed that an old-format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC”- Mt Gox website. Mt Gox filed for bankruptcy after an apparent hack back in February caused their exchange to cease trading. Another exchange, Flexcoin, was hacked shortly afterwards. The Bitcoins, worth around $116million USD (or £70million GBP) reduces their apparent losses from 850,000 to 650,000. Out of the initial figure of 850,000 Bitcoins stolen, 750,000 were being stored for customers and 100,000 belonged to Mt Gox themselves. The theft accounted for about 7% of the entire supply of Bitcoin.The recovered coins allegedly went unnoticed because they had been stored in an old-format wallet, which had become obsolete, and had since been out of use. Since Mt Gox’s application for civil rehabilitation- a legal procedure in Japan that may allow Mt. Gox to rebuild and pay back some of its creditors- the exchange has won brief bankruptcy protection as the case goes through the Japanese judiciary system. The firm’s US subsidiary has applied for bankruptcy, and two class action lawsuits have been placed by Mt Gox users, hoping to be compensated for their losses. The failure of Mt Gox has prompted Cryptocurrency detractors to denounce Bitcoin exchanges as fundamentally unsafe. There is an air of suspicion surrounding the recent demise of Mt Gox, and with good cause. Owing to the fact that every Bitcoin transaction is public, it is entirely possible for anybody to check the blockchain (the record of all Bitcoin transactions), and verify Mt Gox’s claim. The official statement from Mt Gox is that the obsolete wallet was noticed on the 7th of March, when it became active after a dormant period, and transferred the sum of 199,999.99 Bitcoins, in two separate transactions. This contradicts the blockchain, which shows that the transactions were quite clearly spread across five wallets... Read more at: http://www.coinchilli.com/mtgox-finds-missing-bitcoins/J.C Axe |
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Pantera Bitcoin, a subsidiary company of Pantera Capital, has seen significant investments from numerous Wall Street investment firms. The most notable being Fortress Investment group, a publicly traded New York private equity firm, whom invested $150million USD into Pantera Bitcoin recently. Pantera Bitcoin, a top BTC exchange based in San Francisco, describes itself as an “investment firm focussed on the Bitcoin ecosystem”. Fortress have stated that it will be making all of its Bitcoin investments through Pantera Bitcoin from now on, offering a lucrative source of income for Pantera Bitcoin, and lending legitimacy to the wider Crypto community through Wall street endorsements... Read more at: http://www.coinchilli.com/150million-investment-in-pantera-bitcoin/J.C Axe |
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Hikmet Ersek, CEO for Western Union recently criticised Bitcoin and other Cryptocurrencies, claiming that they are not suitable for use in developing countries, and are not safe for cross-border transactions. This announcement comes at a time when other money-transfer companies, such as PayPal, have begun to enforce rigid sanctions in an attempt to amputate the Crypto community from legitimate trading mediums. Western Union is primarily a company that allows the transfer of money from person to person, as well as money orders, business payments and commercial services. From its creation in 1851, Western Union developed a monopoly on Telegrams, up until 2006, when their decline in popularity saw them abandon telegrams entirely. Hikmet’s comments, as one would expect, cite consumer protection as their primary concern. “Without continued enhancements to ensure consumer protection… consumers and businesses will continue to gravitate to cash” –Hikmet Ersek There are three main points that need be looked at when considering Hikmet’s critique; Firstly, it is not explicitly explained how exactly a currency which circumvents the need to be converted into country-specific currencies when being exchanged over geographical borders, is unsuitable for cross-border transactions. Secondly, as anybody who frequently uses online marketplaces will tell you, Western Union has developed a notorious reputation for use by scammers, owing to the inability of Western Union to recover any money lost to overseas scammers (hence the reason it is banned from use on eBay, and contra-indicated on almost any legitimate website). Western Union, to their credit, have themselves advised customers not to send money to anybodythey do not know personally. “When you are dealing with payments of any kind, trust is a major factor” –Hikmet Ersek The third point, and perhaps the most important one, is the glaringly obvious threat that the propagation of trade in Cryptocurrency poses to companies like Western Union, whom receive a significant proportion of their profits from cross-border transaction fees... ... Read more at: http://www.coinchilli.com/profit-protection-clumsily-disguised-as-consumer-safety/
J.C Axe |
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Flexcoin, the self-described “first bank of Bitcoin” was hacked on the 2nd of March, suffering a catastrophic loss of 896 Bitcoins (valued at around $600,000 USD). Flexcoin has since closed its doors. “In our ~3 years of existence we have successfully repelled thousands of attacks. But in the end, this was simply not enough” –Announcement from the Flexcoin website. The theft was enabled from the front-end. The attacker(s) logged into Flexcoin under newly created username and deposited Bitcoins to a specific address. The coins were then left until they had reached six confirmations. A flaw in the code which allows transfers between users was then exploited by sending thousands of simultaneous requests. the attacker was able to “move” coins from one user account to another until the sending account was overdrawn, before balances were updated... Read more at: http://www.coinchilli.com/flexcoin-hacked/J.C Axe |
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As the ashes of Mt Gox are scattered to the wind, and their bankruptcy is announced, detractors of Cryptocurrency may be surprised to find that not only did Bitcoin not drop in value, but has in fact risen in value by 15%. Whether Mt Gox’s bankruptcy and this rise are mutually inclusive phenomenon is something to be debated. Some speculate that the publicity drummed up around Mt Gox has led to an influx of new buyers (although it was widely predicted that the price of Bitcoin would fall, which logically should deter new buyers). Others speculate that the rise is due to the UK’s recent move to eliminate the 20% VAT (value added tax) on Cryptocurrencies, reclassifying them as ‘assets’ rather than ‘gift vouchers’. Whatever the case may be, it is clear that developments in the Crypto community are occurring so fast, it is hard to keep track of what events are affecting the market, and in what way this is occurring... Read more at: http://www.coinchilli.com/bitcoin-rises-15/J.C Axe |
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The year is 1920, America. Alcohol prohibition is enforced in order to curb crime, corruption, and reduce the prison population. By the end of the year, alcohol consumption has been reduced considerably when compared the consumption rates of 1919. Fast forward to 1921, and alcohol consumption is even higher than it was when it was legal, and is continuing to soar. Of course, the money is not going to legitimate brewers, bars and liquor stores, but is providing a veritable cash cow for organised crime syndicates, and propelling notorious and brutal gangsters such as Bugs Marone and Al Capone into infamy. Suddenly, the majority of Americans, who enjoy a drink, are now criminals. This includes everybody from union delegates, police officers and senators, pushing them into dealings with numerous shady characters, bootleggers and gangsters. The proliferation of ‘speakeasys’ and ‘blind tigers’- illicit underground venues that serve alcohol, force your everyday American to open themselves up to blackmail, extortion and criminality, just to have a drink. Those that can’t drink turn to other substances, such as opium, marijuana and cocaine, which have now become just as risky and equally accessible as alcohol, and were easily provided by the gangsters supplying the alcohol. Read more: http://www.coinchilli.com/a-cash-cow-for-criminals/J.C Axe |
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Ukraine has seen over 80 people killed and many hundreds injured in recent months, following the protests in the Capital square Maidan Nezalezhnosti. The protests began in November after President Viktor Yanukovych froze ties with the EU in exchange for a $15 billion bailout from Russia. Since November, Maidan has borne witness to numerous clashes between pro-government riot police and protesters. Improvised field surgeries treat the wounded, whilst food, blankets and clothing are distributed to the masses. President Viktor Yanukovych has since been removed from office, and has fled to Russia, where he has released a statement, claiming that he is still the Ukrainian president. “ I officially declare my determination to fight until the end for the implementation of the important compromise agreements concerning the Ukrainian recovery from the profound political crisis”- Viktor Yanukovych After the former government left the Ukraine with over $75billion worth of debt, and the value of the Hryvnia dropping by 20% in the last few days, the air of tension in Maidan is palpable. As investigative journalists sift through mountains of documents, found sunken in the river near Yanukovych’s residential compound outside Kiev, the extent of the corruption and financial mismanagement is becoming clearer. Read more to find out about the role Cryptocurrencies have in the Ukrainian economic crisis: http://www.coinchilli.com/financial-crisis-in-ukraine/J.C Axe |
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Falcon Global Capital, whom describe themselves as ‘The world’s first Bitcoin Investment fund with insured protection’, have made an offer to purchase the huge reserve of Bitcoins currently in the possession of the FBI after the asset forfeiture, following the arrest of Ross William Ulbricht, believed to be Silk Road’s ‘Dread Pirate Roberts’. They have offered the FBI 85% of the market value of the coins, or free consultation on how to liquefy the currency. The reserve (believed to be over 27,000 BTC), if purchased by Falcon Global Capital LLC, would be used by the company to offer accredited investors to acquire large amounts of Bitcoin (ranging from $25,000 to $10million). The investments would be stored by Falcon Global in a secure digital vault, which they claim to is ‘fully insured against digital theft’. Read More at: http://www.coinchilli.com/the-demise-of-mt-gox-the-rise-of-falcon-global/J.C Axe |
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Detractors of Cryptocurrency make frequent habit of mentioning its potential to be exploited by unscrupulous individuals and criminal organisations. Owing to the anonymity afforded to the users of Crypto, the fear of facilitating money laundering and trade in illicit goods and services is a very palpable one. We need only look to Bitcoin’s usage on the Silk Road (an online marketplace, embedded in the ‘deep net’, primarily used for buying and selling narcotics) to realise that the currency has been, and is being used for criminal enterprise. Some have argued that this represents a necessity for Cryptocurrencies to be centralised and regulated by monetary authorities and banks; An insultingly simplistic solution to a complex situation... Read more at: http://www.coinchilli.com/cryptocurrency-and-the-underworld/J.C Axe |
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Mt.Gox is dead. Even if the “technical issues” that they are supposedly having are resolved, the trust is gone, and that is the most important asset a monetary exchange needs to have to succeed. Bitcoin is now valued at under $100 USD on the major exchange, far below the average price of about $535 USD on other BTC exchanges. Customers are still unable to withdraw BTC, and technical issues (and the handful of protestors outside the Mt Gox offices) are still being blamed for this problem. Mt Gox of course seem to have neglected to mention exactly how the protesters are affecting their progress, when they themselves have made a statement saying that they’ve moved to their old office location (and the protesters have since been dispersed by the Japanese police and refused a demonstration licence). So it seems that Mt Gox have locked themselves away, refusing interview requests, and maintaining arbitrary contact with the outside world through detached twitter posts, apologising to their ‘Valued customers’... Pay your disrespects to the recently departed Mt Gox at: http://www.coinchilli.com/r-i-p_mt_gox/J.C Axe |
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The Federal Bureau of Investigation are the wealthiest owners of Bitcoin at present, with a share amounting to between 5 and 10 percent of the coins in circulation. This happened back in October 2013, when the FBI seized nearly 30,000 Bitcoins from SilkRoad (known as the Amazon of Drugs). At the time of writing, this amount is valued at roughly $25million USD. Last month, the Manhattan US Attorney’s office announced that a judge had signed off on a forfeiture order for these coins, meaning they will soon be back in circulation. This presents a difficulty, as there is no legally certified Bitcoin exchange or medium that the FBI can use to sell the coins. How they will redistribute them is something of a mystery. The FBI’s website claims that “The use of asset forfeiture in criminal investigations aims to undermine the economic infrastructure of the criminal enterprise.” In the past, the FBI have auctioned off properties and assets that have been seized, such as the recent bust of Boston gangster James “Whitney” Bulger, whose possessions are soon to be put up for auction in order to pay compensation out to the families of his victims. Though this is a noble concept, the ability of the government to seize the assets of anyone engaging in activity deemed unlawful, is something which is open to abuse and manipulation by parties with a specific agenda... Read more at: http://www.coinchilli.com/the-fbi-top-of-the-bitcoin-richlist/J.C Axe |
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In recent days, the majority of Cryptocurrencies have taken a bit of a dip in value. Bitcoin, arguably the father of Cryptocurrencies, has seen a dip of more than 5%. This dip has been largely attributed to Denial-of-service attacks, most likely executed by malicious fear-mongers, deliberately trying to scare the more inexperienced Crypto-investors into selling at a low price to the attackers themselves, whom can then sell them on when the value rises again. Unfortunately for them, the Crypto market has shown stronger resilience than they had perhaps anticipated... Read more: ( http://www.coinchilli.com/piggybacking-on-bitcoin-a-double-edged-sword/) J.C Axe |
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The year is 1986, the scene is London. J.S.G Boggs is exhibiting his controversial art work at the Young Unknowns Gallery. As the crowds amuse themselves with Boggs’ work, the pounding of boots invades the scene. The police have stormed the exhibit with a warrant for Boggs’ immediate arrest. But what crime has the artist committed? Perhaps he has plagiarised somebody else’s work, or maybe his art is made up of severed limbs of children, or something equally horrific. Nope. Boggs was being arrested for counterfeiting currency. For those who have heard of Boggs, and the lucky few who happen to possess some of his art, you will know that Boggs literally drew his own mock-banknotes on paper, and spent them (although for legal reasons, he officially sold them in exchange for goods and services equal to the value of the banknote that his art was supposed to represent). Now Boggs never intended to deceive people, they knew his notes were not the genuine article. That is to say, they were not designed to look like they had been produced by any kind of “monetary authority”. So why did Boggs’ notes warrant an arrest for counterfeiting? And furthermore, why did this arrest just happen to take place in public, in front of hundreds of people?... Read more at: http://www.coinchilli.com/144/J.C Axe |
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As the propagation of Cryptocurrencies take on a global audience, the minority of the economic elite, whom hold significant power over the global economic climate are beginning to react in predictably obstructive ways. However, Crypto presents a great opportunity for developing countries to break free from the quagmire of economic slavery, and finally dissolve the poverty trap. Conventional banks and government-run monetary authorities are beginning to wage war against on the meteoric rise in the use of Cryptocurrencies. Campaigns are being launched to discredit the legitimacy of Crypto, largely lead by big businesses, with explicit vested interests in the continued use of centralised Fiat currency. To the cautious, this represents a decline in the propagation of this new currency, and disenchantment with the concept of Cryptocurrency, which in turn may lead to knee-jerk reactions of panic selling. However, the fact that the economic elite have even acknowledged Cryptocurrency, coupled with their continued efforts to discredit the currency with smear campaigns only lends further legitimacy to the robustness of Cryptocurrencies, and their potential to disrupt the established economic order. Cryptocurrencies are a very tangible threat to the economic elite, because they are by their very nature, decentralised, and effectively cannot be minted and controlled by particular parties... To Read more go to: http://www.coinchilli.com/how-cryptocurrencies-are-affecting-developing-countriesJ.C Axe |
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