Last
June, Reason TV interviewed the Mercatus Center's
Jerry Brito about the then-new phenomena that is Bitcoin, a virtual
currency that is distributed via the internet.
With Bitcoin now going for over $100 per unit and amassing a
value of over $1 billion worldwide,
everyone has an opinion on the curious currency - whose creator
is still unknown. The short interview above is a great place to get
some basic facts. Go
here for more details and links.
Mt. Gox, the world's first and largest Bitcoin exchange, appears to be down.
Below is a screenshot of what it looks like for us when we try to access the site.
We are seeing a lot of others tweeting about the same problem.
aaand Mt Gox goes down mtgox.com
— felix salmon (@felixsalmon) April 3, 2013
Earlier today, Bitcoin service Instawallet said it had been hacked and was shutting down until further notice.
These outages highlight the fundamental problem with the virtual currency that has seen its price surge in 2013 – confidence.
More to come...
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is becoming increasingly popular. All bitcoins now in circulation
(there are about 10.9 million of them) are now worth more than a
billion dollars. The debt crisis in Cyprus is being cited as one of
the reasons that bitcoin is exploding in value as
more
Europeans seek ways to keep the government away from their
money.
From
Tech Crunch:
Hang around in the tech industry long enough and you or someone
you know will be heard saying, “that’s so crazy it just might
work.” Two years ago, if you’d have told me that an open-source,
P2P currency would soon be a thriving, billion-dollar market, I
would’ve told you that you were on a lonely bus headed to
CrazyTown, U.S.A. But today, Bitcoin officially became a crazy idea
that’s actually working.
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There's been a story circulating this week that the first-ever 'Bitcoin ATM' will be installed in Cyprus to capitalize on the country's financial meltdown.
We'll spare the names of those who've been sharing and Tweeting this "news"...
But this is not news in anyway. It's just a press release.
The story comes from an announcement from Jeff Berwick, founder of StockHouse.com as well as a website called The Dollar Vigilante.
The project premise is based on the notion that Cyprus' banking sector would cease to function and that a Bitcoin ATM would save the day. And yet the Cyprus banking system is functioning again, and ATMs have been functioning the whole time.
Here's the key text:
Upon examination of the marketplace and many discussions with Justin O’Connell (TDV Newsletter & Gold Silver Bitcoin), as well as another key strategic partner of ours, I have decided to move forward with what I believe could be the next multi-billion dollar business venture: Bitcoin ATM.
The Bitcoin ATM page is extremely vague and says it's seeking investors/partners, which means there's no actual product yet.
The announcement continues:
But that isn’t all. It is wholly our intention at Bitcoin ATM to put the company in the right position to open its very first ATM in Cyprus. If we did this now, and we are moving quickly to make this so, we would be the only functioning ATM on the island.
Again, that's false.
Berwick also put out a press release that is just as hazy. His Wikipedia page also re-states the Bitcoin ATM claim, but the source links back to the press release.
Another alarm bell for us is that while Berwick boasts of StockHouse.com's large market cap at the height of the tech bubble, he says he sold it in 2002.
We've tried calling the number listed at the bottom of The Dollar Vigilante's website for the past two days and have received no response.
A Bitcoin ATM sounds like a cool idea, and we urge Jeff or one of his colleagues to contact us to tell us more about it.
Here's the full press release if you're interested:
Jeff Berwick, founder of StockHouse.com and CEO of TDV Media, announced Monday his plans to open the world’s first Bitcoin ATM in Cyprus, citing the ongoing bank bailout, bank closures and capital controls now being pushed in that country. According to Berwick, who sold Stockhouse last decade which at the peak of the tech bubble was worth $240 million, Bitcoin ATM has the world’s first software enabling a two-way, automated Bitcoin market.
Last Friday, Cyprus announced a new bailout all inclusive of a levy of upwards of 15.26% on all deposits. On Monday, the banks shut down until Thursday, but by week’s end uncertainty shrouded the country as to when their ATMs would be back online. Over the weekend, it was announced the bank’s second biggest bank would be shutdown.
Interest in Bitcoin has soared, especially in southern Europe. As Yahoo! reports, downloads of Bitcoin-related apps started rising in Spain over the weekend. For instance, Bitcoin Gold spiked in the Spanish iPhone Finance category from 498 to 72, while another app called Bitcoin Ticket zoomed from 526-52 in just one day. Leading service, Bitcoin App, jumped from 194 to 151 from Friday and Sunday while Spaniards took notice of Cyprus.
Fox Business news wrote that Bitcoin “is emerging as an apparent winner from the drama surrounding the bailout of tiny Cyprus.”
With Bitcoin ATM, Jeff Berwick announced plans to place a bi-directional (bitcoin for cash, cash for bitcoin) dispenser as part of the launch of his latest venture. Over the weekend, he hinted at his venture in his blog for the Dollar Vigilante:
"I've even recently relayed to TDV subscribers that I see bitcoin-related businesses as being the next multi-billion dollar (or multi-million bitcoin) businesses and will be relaying many of my business ideas to them over the coming weeks.
And, to top it off, we have already started some game-changing bitcoin businesses that I think will shock the world. I'll be announcing one of them, related to the crisis in Cyprus, on Monday here at the TDV blog."
According to the website, Bitcoin ATM is seeking investments and licensees to bring their technology to a town or city near you. You can email the company directly at bitcoinatm(at)bitcoinatm(at)com.
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Last week, the Treasury Department's Financial Crimes
Enforcement Network (FinCEN) made waves in the
Bitcoin community by releasing a statement
of guidance that paid special attention to virtual
currencies. Patrick Murck, who provides legal council to
Bitcoin.org and contributes to the foundation's blog, expressed concerns
about the implementation of the suggestions, which are being made
to the
Bank Secrecy Act.
Murck said he “was happy to see FinCEN issue some clarity around
the overly-broad pre-paid access rules and definitively state that
they do not apply in the context of bitcoin,” but he was also
pretty worried about the ill-fitting definitions FinCEN came up
with:
Left unsaid are any specifics around the facts and circumstances
that would constitute “engaging as a business.” [In reference to
the definitions of “User”, “Administrator” and
“Exchanger”]
FinCEN’s guidance implies that every person who has ever had any
virtual currency and has ever exchanged that virtual currency for
real currency may now be considered a money transmitter under the
Bank Secrecy Act. That is, of course, an untenable
position.
What is crystal-clear is that once a person sells a single
Satoshi for real currency that person is no longer a “User” and
therefore not categorically exempted from MSB registration.
Murck summarized the FinCEN guidance as follows:
Murck also tried to calm businesses and individuals working
with the currency, noting that "under the Administrative Procedures
Act (APA), FinCEN can’t promulgate new rules without going through
a notice and comment proceeding whereby the public may have their
voices heard.”
