Bitcoins, a web-based virtual currency, are traded pretty fast and loose these days. Camp BX, an online trading site for the Bitcoin currency that launched Tuesday, wants to do things a little bit differently.
Camp BX founder Keyur Mithawala launched the site to transform Bitcoin trading — which is little more than a hobby for geeks and tech enthusiasts these days — into a professionally-traded currency. That means the site is subject to security audits from third-party security providers like McAfee. It also means that the trading options should be more robust and emulate other trading markets like the stock market, Mithawala said.
There are two other major trading sites for Bitcoins — Mt. Gox and TradeHill. But neither of those sites allows for short-selling, which is basically a hedge on the price of the Bitcoin that injects cash into the trading ecosystem. Camp BX will let its users short-sell Bitcoins, which will help stabilize the volatility for the young currency. Today, an 8 percent swing in the value of the Bitcoin throughout the day is pretty typical.
“They have kind of a hobby project feel to them, and they are doing $27 million a month in trades,” Mithawala said. “Other than speculators, no one wants to deal with a highly volatile currency like that.”
Mt. Gox, one of the largest trading sites for Bitcoins, has around 60,000 users. But a majority of those users did not have a balance of Bitcoins, so only around 6,000 of those users are active traders, Mithawala said. Mt. Gox was also recently hacked, sending the price of the Bitcoin down to nearly zero before it later recovered. That site was basically forced to roll back the trade and pretend the whole incident never happened. ...
An anonymous hacker used phony Bitcoins (BTC) last month to drive down the price of the online currency from $17.50 to a penny within the span of 30 minutes, Bitcoin exchange firm Mt.Gox has revealed. The hacker was able to create 2 million fake BTC by manipulating the company's trading database after gaining access to a compromised administrator account on June 19, according to Adam Barr, head of support for Mt. Gox.
The hacker also assigned about $1 million in phony cash to the compromised account. After a massive volume of Bitcoins entered the Mt.Gox system, the price of the online currency crashed, creating a buying frenzy. The online thief ultimately got away with 2000 authentic Bitcoins before the site's security measures kicked in to stop trading.
Mt.Gox said user accounts were not compromised during the exploit and has promised to replace the stolen Bitcoins at the company's expense. The fake Bitcoins and cash "existed inside Mt.Gox alone," Barr says, and could not be transferred into a wallet for use in another exchange.
Bitcoins use a public-private key system to ensure the currency cannot be forged. To sell or buy Bitcoins in your virtual wallet, you need the right private key (basically a really long number) to prove that the Bitcoins are really yours. The person on the other end of the transaction needs your public key. However, when trading happens in real time, Mt.Gox relies on a simple database tracking each user's Bitcoin and cash balances to carry out transactions, according to Barr. The public-private key setup only comes into play once the Bitcoins are taken out of trading and placed in a user's wallet.
Although the Bitcoin system allows for anonymity, user wallets can be tracked. Mt.Gox has given competing exchanges the numbers required to identify the stolen Bitcoins in the hopes the thief will not be able to turn his ill-gotten gains into hard currency. The company has also alerted law enforcement, but it's unclear if police will investigate. Mt.Gox is based in Japan. ...
By Mike Isaac July 7, 2011 | 5:37 pm | Categories: Phones
The Bitcoin app for Android allows users to trade the alternative form of cash from the comfort of their phones. Photo courtesy Brandon Iles) There’s a new, unconventional form of a digital wallet available for your Android phone. And it’s not the Google Wallet.
First introduced to the Android Market on Wednesday, the Bitcoin app for Android turns your smartphone into a wallet for Bitcoins, a form of alternative, decentralized currency that has been circulating the web for a few years. The app allows you to store and transfer Bitcoins from one device to another, which means you’ll be able to pay for items without having to use cash or credit, all from the comfort of your own smartphone.
When you want to transfer Bitcoins to another account, a QR code pops up on your smartphone’s screen. The other user simply scans the QR code with his or her phone, and the Bitcoins are transferred to the second phone’s account. If you happen to lose your phone, it’s not a huge deal — all of your Bitcoins are backed up with your Google account, synced to the cloud. ...
BitTrust is an API in private beta that promises to make life easier for developers wanting to make use of Bitcoin as a fundamental part of their application.
The API facilitates transactions, commissions, affiliate sales and user profiles and messaging, as well as an auctioning system. It’s a bit like eBay in an API for Bitcoin developers.
Most interesting, however, is BitTrust’s ratings and reviews system. One of the biggest features of Bitcoin is that it provides a certain level of pseudo-anonymity, but it’s also a liability when you’re buying from untrusted, anonymous sellers.
BitTrust has the lofty goal of providing a feedback system much like eBay’s, in which traders and retailers are rated and reviewed by buyers. The seller doesn’t have to be identified and can retain their anonymity if they wish, with the system working off their chain of transactions and the ratings provided for those transactions. ...
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'That government is best which governs not at all' --Thoreau
Mobile phone transfers will probably be the killer app as far as Bitcoin goes. Two people with smartphones can now exchange arbitrary amounts of currency themselves in a way that's neither reversible nor subject to prior restraint.
Asimov
Posts: 103847
Incept: 2007-08-26
East Tennessee Eastern Time
Online
Quote:
That means the site is subject to security audits from third-party security providers like McAfee. It also means that the trading options should be more robust and emulate other trading markets like the stock market, Mithawala said.
They might just make a fortune. Nobody is gonna trust mt gox again, not after that fiasco.
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It's justifiably immoral to deal morally with an immoral entity. If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
Pockets
Posts: 843
Incept: 2008-01-24
Pasadena, CA
Thought it might be time to update this thread. Price is about $3:1BC down from nearly $30:1 in June. Has been fairly stable, though, over the last 3 months.
I think the exchange rate has stabilized because all the people who were using Bitcoin as a speculative investment rather than a means of clearing payments for products and services have left.
At least now there are a few established services now that will instantly convert Bitcoins to USD for merchants who accept Bitcoins as a method of payment. That should insulate them from any pump and dump games with the exchange rate.
So bitcoin is really just linked up with Citi, providing huge counterparty risk.
Tradehill isn't Bitcoin, it's just one of several companies that runs a currency exchange. If people want to buy Bitcoins with dollars or sell Bitcoins for dollars they can use these exchanges to find a market to do so.
The exchanges try to make it as easy as possible for people to deposit and withdraw USD but unsurprisingly they are constantly being harassed by regulators and the banks themselves. Actual Bitcoin-to-Bitcoin transactions have none of these problems.
This morning, after much anticipation, BitInstant has launched in two new countries, and now enables cash deposits at over 700,000 locations in USA, Brazil, and Russia (with Canada arriving in a couple weeks as well).
Previously, cash deposits were only accepted at the four big banks here in the us (Chase, CitiBank, Wells Fargo, and Bank of America). Now, in addition to the banks, you can make a cash deposit at the following locations:
USA Walmart CVS 7-Eleven MoneyGram Thousands more local convenience, retail, & drug stores and money service locations
Brazil Boleto Bancário (Boleto) [These can be paid at ATM's, bank branches, post offices, lottery agents, and some supermarkets and drug stores as well as via online banking!]
Russia Qiwi Network Cyberplat Network [Both networks contain thousands of cash kiosks popular throughout Russia]
USA and Russia locations enable you to be credited within about an hour, and Brazil requires about 24 hours. The Brazilian Boleto system can be paid with the cash deposits or via Internet Banking .
In total, this now adds over 700,000 cash deposit locations in addition to the major banks where people in these countries can buy Bitcoins with cash. Canada will be added within weeks, and other countries will follow. We've been extremely excited about this new deal for months, and we're thrilled to be able to finally share it with you all!
All deposits have a standard lower rate of 3.99% all around.
Visit BitInstant.com and give it a try!
Always a pleasure serving you!
Thanks,
The Team at Bitinstant Support@bitinstant.com 1.716.712.4846
BitPay is raising venture capital to complete a platform that will compete with PayPal and major cards for payment processing. The amount of transaction volume they are already processing and its recent growth shows that Bitcoin use for actual commerce (not just speculation) is moving in the right direction.
Here's a video of some academic analysis of how the Bitcoin network works in practice as compared to its theoretical design (warning: contains math).
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