Bitcoin, a virtual currency "mined" from computer transactions, could one day challenge the hegemony of nation-issued money and create a truly viable decentralized, anonymous currency. Along the way, though, supporters must deal with the challenges of building a new exchange system — and the inevitable winners and losers that creates.
Sep 26, 2017
Showtime websites secretly mined user CPU for cryptocurrency
This past weekend, Showtime websites were found to be running a script that allows the sites to mine visitors’ extra CPU power for cryptocurrency, as pointed out by users on Twitter. The afflicted sites included showtime.com and showtimeanytime.com, but the script has since been removed following reports from Gizmodo and other sites.Read Article >
PayPal adds limited Bitcoin support
PayPal has partnered with three leading bitcoin payments processors in order to enable limited support for the digital currency, the company announced today.Read Article >
Merchants in North America selling intangibles such as music, games, and ringtones may now accept bitcoin through PayPal Payments Hub, the company's service for digital goods retailers. The company says it is "giving our digital goods merchants an easy, one-stop way to test the waters with this new form of payment."
FTC shuts down Butterfly Labs, the second-most hated company in Bitcoinland
There was skepticism around Butterfly Labs from the beginning.Read Article >
Like most bitcoin companies, the Missouri-based startup sprang up out of nowhere. In late 2011, there were rumors of a leap in the technology for mining bitcoin. This technological leap had the potential to create massive profits for miners, as well as massive profits for those selling the new equipment to miners. It was the old selling-pickaxes-during-the-Gold-Rush strategy.
Sep 19, 2014
Bitcoin Ponzi scheme operator ordered to pay over $40 million
The operator of a Bitcoin Ponzi scheme has been ordered to pay back over $40 million in profits and interest gained from investors' money. The operator, Trendon Shavers, ran the scheme through his company Bitcoin Savings & Trust for at least a year and a half between 2011 and 2012. In 2012, when he shut down the company, investors began to revolt, and about a year later he was charged by the SEC with having taken bitcoins that were worth $4.5 million at the time of investment. The court's says that the total loss to investors was, at yesterday's exchange rate, closer to $149 million; the total that he's ordered to repay is based on an averaging of bitcoin's volatile exchange rate since the scheme collapsed.Read Article >
Shavers, who had been operating under the unfortunately ironic pseudonym "pirateat40," had promised to pay investors one percent interest on their investment every three days, or seven percent a week. In a judgement, a Texas magistrate judge called Shavers' operation "a sham," saying that he made a "blatant misuse and misappropriation" of the company's funds for his own purposes and that he intended to "deceive, manipulate, and defraud" investors. Though Shavers admits to many of his actions, he also claims to have repaid investors — and the court says there's no evidence of that. It's unclear if he and his company will be able to return the more than $40 million that they've been ordered to pay.
Jul 17, 2014
New York proposes 'BitLicense' rules for companies that buy and sell virtual currency
The New York Department of Financial Services (DFS) has released a copy of proposed "codes, rules, and regulations" for companies that buy and sell bitcoin and other virtual currencies roughly a year after the agency announced an inquiry into regulating bitcoin.Read Article >
The proposal, which outlines requirements for a special "BitLicense" (truly), will be entered into the record on July 23rd. The proposed rules apply to businesses that buy, sell, transfer, store, or maintain custody or control of customers' bitcoins, as well as companies that convert fiat currency to virtual currency on behalf of merchants. They will also apply to companies that convert virtual currencies into other types of virtual currencies, as well as issue virtual currency.
Jul 1, 2014
Newegg now accepts bitcoin
Newegg, the online electronics retailer beloved by geeks, on Tuesday announced it would begin accepting purchases made with bitcoin. Newegg is turning to the bitcoin-payment processor Bitpay to handle orders paid with the virtual currency. Claiming that Newegg's customers were among some of the first bitcoin miners, the company's chief marketing officer Soren Mills said in a statement that "adopting bitcoin as a payment method is another way we’re responding to our customers’ diverse needs."Read Article >
The move follows on the heels of several other large businesses moving to accept bitcoin payments: Overstock, Dish and Expedia have all come aboard in recent months, expanding the options for where bitcoin users can spend their money, and further legitimizing the currency. Overstock reported that its users spent nearly a million dollars worth of bitcoin in the first month after it introduced bitcoin payments (bitcoin was trading over $1,000 around that time). Whether Newegg sees similar success remains to be seen. But it's clear that in spite of the collapse of Mt. Gox earlier this year, bitcoin remains a growing alternative to established currencies online.
May 29, 2014
Dish Network invites its 14 million customers to pay in bitcoin
Dish Network just became the largest company to accept bitcoin, a major endorsement for the still-nascent virtual currency.Read Article >
The company has teamed up with Coinbase, a startup funded by big Silicon Valley investors that makes it easy for merchants to accept bitcoin. Dish customers will be able to pay their bills in the virtual currency starting in the third quarter of this year.
May 7, 2014
Be careful about investing in bitcoin, SEC warns
Consumer protection agencies are getting worried about cryptocurrencies. The US Securities and Exchange Commission (SEC) issued an investor alert today warning about the risks of investing in bitcoin and other virtual currencies such as Peercoin, Dogecoin, and Minacoin.Read Article >
Apr 29, 2014
MIT club giving every undergrad $100 in bitcoin
A club at MIT wants to see what will happen when an entire community has access to a digital currency, and to find out, it plans to give every undergraduate student on campus $100 worth of bitcoin this fall. The MIT Bitcoin Club says that it's raised a half million dollars from alumni and the bitcoin community, which it plans to use to cover the cost of bitcoin for the campus' more than 4,500 undergrads and to finance informational programs about bitcoin. The group also plans to work with researchers on campus to study how students are using the new currency.Read Article >
"Giving students access to cryptocurrencies is analogous to providing them with internet access at the dawn of the internet era," Jeremy Rubin, a sophomore computer science student at MIT and one of the two students behind the project, says in a statement. The club says that it has no idea how students will actually end up using their bitcoin, but it hopes to work with merchants around campus to begin accepting it to give students a way to get started. Logistics and timing for distributing the bitcoin are still being decided, but the project's organizers say they're working with quite a few members of MIT's faculty for support.
Mar 25, 2014
IRS rules Bitcoin will be taxed as property, not as currency
The IRS previously admitted it wasn't sure how to tax Bitcoin, but today it's reached a decision. Bitcoin and other virtual currencies are considered property, not currency, according to a notice posted today. That means Bitcoin owners may have to pay taxes on the income they gain as Bitcoin increases in value, and may be able to deduct a loss if Bitcoin loses value, just as if Bitcoin were a stock.Read Article >
"In some environments, virtual currency operates like 'real' currency," the IRS writes, "but it does not have legal tender status in any jurisdiction." Therefore, "virtual currency is treated as property for U.S. federal tax purposes" and "general tax principles that apply to property transactions apply to transactions using virtual currency."
Mar 21, 2014
Mt. Gox finds over $100 million of customers' missing bitcoins
Mt. Gox says that it now holds approximately 202,000 bitcoins, with 650,000 still missing. Given the dramatic change in circumstance overnight, the exchange warns that the figure missing is still subject to change — as are the suspected reasons for their disappearance. "Please note that the reasons for their disappearance and the exact number of bitcoins which disappeared is still under investigation," Mark Karpeles, Mt. Gox's CEO, writes in a statement. The found bitcoins have since been moved offline for safekeeping.Read Article >
It's unclear what Mt. Gox will do with any bitcoins that it locates, as the vast majority of the currency it lost belongs to its customers. While this discovery may raise hopes that some could see their fortunes return, the exchange is still a ways away from locating the entirety of the bitcoins it was accountable for. Still, this raises the possibility that Mt. Gox does in fact have access to more bitcoins than it believes — or than it has let on, as some irritated observers have posed.
Mar 10, 2014
The new gold rush: Bitcoin ATMs are coming
Sebuh Honarchian, a developer from Los Angeles, showed up at the South By Southwest Interactive trade show in Austin, Texas on Saturday because he heard there would be a Bitcoin ATM and he needed to pay rent. He found the machine in a corner of the trade floor, flashed it a QR code on his phone, and retrieved $3,000 — less than five BTC at current prices.Read Article >
"I just cashed my Bitcoin out because I need to pay some bills, you know I got rent and other things," he tells The Verge. "You have to cash out your Bitcoin sometimes whenever you need to spend it. These machines make it really easy."
Mar 10, 2014
Hackers claim bankrupt Mt. Gox still has customers' bitcoins
Tokyo-based Bitcoin exchange Mt. Gox lost $400 million worth of bitcoins in February. Its management said the amount was stolen after hackers exploited a transaction bug to divert the funds, but some of Mt. Gox's users are not so sure, suggesting instead that the exchange's owners pocketed the cash. Now, facing silence from those owners about the fate of the money and the methods by which 6 percent of all of the Bitcoin in the world could have been stolen, a group of hackers claims it has broken into the bankrupted Bitcoin exchange's network to get answers.Read Article >
Forbes reports that the group gained access to the personal blog and Reddit account of Mark Karpeles, Mt. Gox's CEO. The hackers used the platforms to post a message that claimed Karpeles still had access to some of the bitcoins that he'd reported stolen. In support of the claim, they uploaded a series of files that included a spreadsheet of more than a million trades, Karpeles' home addresses, and a screenshot purportedly confirming the hackers' access to the data.
Mar 7, 2014
Newsweek stands by Bitcoin story as Reddit offers alleged creator money and model trains
Since its publication yesterday, Newsweek's huge Bitcoin scoop has proved unsurprisingly explosive both online and offline. A cover story by reporter Leah McGrath Goodman strongly stated that a man who went by the name Dorian Nakamoto was in fact Satoshi Nakamoto, the secretive creator of Bitcoin. But the piece has raised questions about everything from journalistic ethics to whether model trains would make an appropriate apology gift. Amid heavy criticism, however, Newsweek says it's still standing by the story.Read Article >
Mar 7, 2014
Japan says Bitcoin is not a currency
Over the past 24 hours, a man believed to be the founder of Bitcoin was chased through the streets of Los Angeles, only to deny having any involvement in the project. But the identity of the mysterious Satoshi Nakamoto isn't the only Bitcoin news of the day: Japan has decided that Bitcoin isn't actually a currency.Read Article >
Mar 7, 2014
So-called founder of Bitcoin denies starting the virtual currency
A California man who Newsweek claimed was the inventor of the popular digital cryptocurrency Bitcoin is now denying the report. Dorian Nakamoto told the Associated Press that he's not "the face behind Bitcoin," despite a claim by Newsweek that he was deeply involved with its inception.Read Article >
Press chases alleged Bitcoin creator through Los Angeles
In the wake of this morning's Newsweek article purportedly unmasking mysterious Bitcoin creator Satoshi Nakamoto, the man known as Dorian Nakamoto has become the subject not just of more investigative reporting but of a car chase and is apparently denying being the creator of the currency. Los Angeles Times reporter Joe Bel Bruno and others have taken to Twitter as they follow Nakamoto and an AP reporter, who successfully convinced Nakamoto to come with him for lunch.Read Article >
Newsweek claims it's found the man behind Bitcoin
Newsweek has published a story purporting to have uncovered the real identity of Satoshi Nakamoto, the enigmatic creator of cryptocurrency Bitcoin. A trail of investigation reportedly led to "a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto," and who has "a career shrouded in secrecy, having done classified work for major corporations and the US military." Nakamoto is said to live in southern California and to have kept his work on Bitcoin secret even from his family.Read Article >
In addition to interviews with family and friends, reporter Leah McGrath Goodman cites a single face-to-face interaction with Nakamoto, in which he "tacitly acknowledged" his role in the program. "I am no longer involved in that and I cannot discuss it," he said. "It's been turned over to other people. They are in charge of it now. I no longer have any connection."
Mar 4, 2014
After $620,000 theft, another Bitcoin service shuts down
In the wake of Mt. Gox, a six-figure bitcoin heist has resulted in another shuttered service. This time, the service is Flexcoin, a wallet and banking service that lost 896 bitcoins to attackers, and has announced it will be unable to continue functioning after the loss. The attack emptied the service's hot wallet, where funds were kept for easy access, but the attack did not reach into the offline storage, and Flexcoin has promised to return those funds to customers as soon as possible.Read Article >
Feb 28, 2014
Fortress Investment Group reports a $3.7 million loss on Bitcoin
The first public company to invest in Bitcoin had a $3.7 million paper loss on the digital currency, according to a Securities and Exchange Commission filing.Read Article >
Fortress Investment Group, which was founded as a private equity fund but expanded into hedge funds and other types of investments, reported that it bought $20 million worth of Bitcoin in 2013. The company was still holding onto its Bitcoin as of the filing, meaning it could recoup its losses and even make money if the currency's value rebounds.
Feb 28, 2014
Bitcoin exchange Mt. Gox files for bankruptcy protection with $64 million in liabilities
After weeks of speculation over its financial health, the beleaguered Bitcoin exchange Mt. Gox has filed for bankruptcy protection. A company lawyer made the announcement at an impromptu news conference held at Tokyo District Court, according to The Wall Street Journal.Read Article >
Mt. Gox says it has ¥6.5 billion ($63.9 million) in liabilities with ¥3.84 billion ($37.7 million) of assets at present, and the company has admitted that it has lost a total of 850,000 bitcoins — worth close to $500 million. 750,000 of those belonged to customers, and 100,000 were company assets.
Feb 26, 2014
Who stole $400 million from Mt. Gox?
Mt. Gox headquarters in Tokyo.Read Article >
By now, Mt. Gox's fate is more or less sealed. The Bitcoin exchange probably won't be bailed out, CEO Mark Karpeles will move on, and the rest of the Bitcoin economy will move on as if this was just a bump in the road. But as the community recovers, it's left a single, thorny question unanswered: who took $400 million worth of bitcoins from Mt Gox's vault?
Feb 26, 2014
The Mt. Gox fiasco won't kill Bitcoin
On Monday at around 11PM Mt. Gox, the largest exchange for trading the virtual currency Bitcoin, started disappearing piece by piece. First the homepage disappeared. Next the support page was pulled, followed by the press releases and then the API. "The requested page was not found on this server," customers were told when they tried to access their deposits. Users started to panic as they realized they might never get their bitcoins back.Read Article >
It had been a rough month for Gox. The company froze customer accounts, citing a technical vulnerability. Now, three weeks later, a leaked internal document revealed that the exchange is more than $100 million dollars in the hole owing to a theft that stole 743,000 bitcoins over the course of years.
Feb 26, 2014
Mt. Gox under investigation while its CEO sidesteps theft claimsRead Article >
The woeful situation for Bitcoin exchange Mt. Gox, which went offline earlier today, is seemingly no close to getting better. A pair of reports suggest that the company is now being investigated by prosecutors in the US as well as Japan, while another suggests that it could have indeed lost over 744,000 Bitcoins in a theft several years ago. Citing an unnamed source, The Wall Street Journal says federal prosecutors subpoenaed Mt. Gox sometime this month, asking it to preserve documents.
Feb 25, 2014
Mt. Gox disappears as Bitcoin community goes into damage control mode
The embattled Bitcoin exchange Mt. Gox has gone offline, after several organizations from the Bitcoin community released a joint statement distancing themselves from the Tokyo company's troubles. Mt. Gox's website remains inaccessible, and the exchange appears to have deleted its entire Twitter feed.Read Article >
The joint statement was originally billed as "regarding the insolvency of Mt. Gox," but was later updated to remove that language. A spokesman for the group told Recode, however, that "Mt. Gox has confirmed it will file bankruptcy in private discussions with other members of the bitcoin community." Mt. Gox did not respond to requests for comment from The Verge.