Bitcoin Rollercoaster Ride Sees Currency Soaring to New High of $32/Coin
February 28, 2013 3:39 PM
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Bitcoins are accepted by a growing number of merchants, even used to pay some employees
heralded some exciting news. The
that's free of regulation by any nation state has hit a new high of $32 USD/Bitcoin on Mt. Gox, the world's largest exchange. The previous high had been $31.9099 on June 8, 2011.
Right after hitting that previous high, Bitcoin values began a freefall, which we covered in our piece "
Digital Black Friday: First Bitcoin "Depression" Hits
". It was unclear whether the plunge was due merely to profit taking or other issues. Shortly thereafter, the currency was further devalued when MtGox was
hit with a database dump attack
and users accounts were compromised due to the service's weak MD5 hashing of passwords. It took the site
months to rebuild trust
, beef up security, and unwind the trail of fraudulent transfers.
The Bitcoin rollercoaster ride bottomed out at $2 USD/coin in November 2011. And last fall BitFloor -- another major exchange --
, and $250,000 USD worth of Bitcoins were stolen. But despite that, the currency continued to creep upwards.
Bitcoins values have soared in the last six months. [
remains a serious concern
for Bitcoins, as do scammers using classic techniques
like Ponzi schemes
. And there's the issue of Bitcoin-mining malware that's
and Mac users
alike. However, the currency's utility as an (relatively) untraceable and easy to use digital currency is keeping it sailing high.
Popular social media site Reddit
recently gave Bitcoins a boost, by accepting the cryptocurrency as a means of paying for "Gold" premium memberships. LaCie Group SA's (
) "Wuala" and Kim Dotcom's new "Mega" file sharing services both accept Bitcoins as a means of payment.
Mt. Gox remains the most popular place to buy and sell Bitcoins.
Domain registrar Namecheap is
BitCoin. And WordPress.com is
BitCoin payments for various services.
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RE: Bitcoins are still news?
2/28/2013 9:31:20 PM
It's safe to say that Bitcoin would not be around were it not for its use for black market transactions, primarily the Silk Road web site on Tor. There was some early interest in money laundering, but it's just another tool with limitations in this regard and really too small to handle laundering placement volumes for work of consequence. Bitcoin is way too much of a PITA for any legitimate payment system use unless you are some sort of True Believer ;-)
The limited number of Bitcoins is a feature that is a tribute to the idea of money that doesn't inflate due to fixed supply ( e.g. gold ) and all the magical ideological thinking that comes with it.
It is all working out as the creators mush have intended, the coins they mined two years ago for pennies are now worth dollars, a few parties hold nearly all the bitcoins in existence and are the central bankers of this not-so-decentralized currency.
Outside of the transaction engine itself, the Bitcoin infrastructure is remarkably amateurish and crappy, leaving it rife with hacking issues and fraud.
If small time black marketing and wing nut economic theories turn you on, Bitcoin just may be the place for you. However, if Silk Road is broken by law enforcement, I would expect Bitcoin to be gone, gone, gone.
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