U.S. BLOCKS World's Largest BITCOIN Exchange - Is This The END of BITCOIN?
More bumps in the road are probably in store for Bitcoin. The virtual currency has seen some massive swings in value over the last several weeks, but that volatility is not likely to end soon, its lead developer suggested on Saturday.
"We've been on a roller coaster ride," said Gavin Andresen, chief scientist at the Bitcoin Foundation, which provides much of the core backend development for the currency.
"I expect for the next few years we're going to remain on a roller coaster ride," he said, speaking in front of a packed room of developers, enthusiasts, venture capitalists and other industry players at Bitcoin 2013, the first conference in Silicon Valley to be held on the topic.
Bitcoin is a digital currency that is managed and traded on a peer-to-peer computer network. Often referred to as a form of "crypto-currency," it is intended to be a decentralized form of payment not regulated by any financial institution or governmental body. A variety of online retailers and a growing number of brick-and-mortar stores are now accepting Bitcoins, which can either be purchased through exchanges on the Internet or "mined" by using specialized hardware.
Hitting some bumps
But the growing attention the currency has experienced has come with numerous setbacks as well, in the form of hacks, the shutdown of various exchanges, seizure of accounts and huge selloffs in Bitcoin.
In March, Bitcoins were trading for roughly US$30. Then for a brief period in April its price on the Tokyo-based exchange Mt. Gox skyrocketed to over $230. A couple of days later, its value plummeted to roughly $120 as a massive sell off forced Mt. Gox to temporarily shut down.
This past week, Mt. Gox received a seizure order of its funds by the Department of Homeland Security, triggered by an alleged failure to comply with U.S. financial regulations.
Despite the challenges, Bitcoin's Andresen is not deterred. "We have to be reliable and resilient," he said. The foundation, which currently just has two full-time staff, is looking to hire a Washington lawyer this year to engage with politicians and to help support the currency's growth.
Hundreds of attendees are at the Bitcoin conference, with roughly 20 exhibitors offering a range of Bitcoin-related products such as digital wallets, specialized trading services, and analytical tools.
"Star power" has even been provided by Tyler and Cameron Winklevoss , the brothers claiming ownership of the idea for Facebook, who delivered the opening keynote on Friday night
Bitcoin supporters promise banking 'revolution'
Some workers are now even being paid with new virtual currency that you can only spend online.
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Bitcoin threatens both the financial elite's monopoly over the economy and the online web of payment systems which have been used as a tool to crack down on free speech on the Internet, Amir Taaki, a bitcoin software developer, told RT.
On Wednesday, The US Department of Homeland Security seized a payment processing account belonging to Mt. Gox, the largest international Bitcoin trader over claims the monetary exchange service had falsified financial documents.
The US government has never hidden the fact that it is closely watching the virtual currency, which international regulators have thus far failed to keep a lid on.
But while banks and governments have treated the Bitcoin payment system as an "existential threat" to current financial system, Taaki argues that the virtual currency epitomizes real free trade and is a necessary tool to maximize the benefits of a free and open market.
Amir Taaki: The basic gist of it is, there is this network of people worldwide, and any person that joins the Bitcoin network is responsible for upholding it. The Bitcoin is actually a form of money, like the dollar, euro or pound, but it's virtual currency
5 years ago