Property, not currency

The IRS has announced that, under the US tax code, Bitcoins are
to be recognized as property not currency.

Reuters reports

NOT LEGAL TENDER

The IRS also said that virtual currency is not to be treated as legal-tender currency to determine if a transaction causes a foreign currency gain or loss under U.S. tax law.

More developments are sure to come.

“I am not Dorian Nakamoto.”

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Has the real Satoshi Nakamoto indeed been found?

It has been over four years since “Satoshi Nakamoto” posted on the P2P Foundation forum and announced his development of Bitcoin v0.1.

This evening as the world discusses Nakamoto’s unveiling, the same user has declared, “I am not Dorian Nakamoto.”

It is possible that Dorian Nakamoto is attempting to diffuse the media frenzy that is surrounding his discovery, by denying his true identity. Dorian Nakamoto has retracted his confirmation as the Bitcoin developer (as reported in the Newsweek story) and since denied that he is the Nakamoto who developed Bitcoins.

Satoshi Nakamoto, Bitcoin Creator, has been found.

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Newsweek reporter, , has broken a story which many thought was as unbreakable as Bitcoin itself, the identity of its creator.

Read the article here.

Many had speculated that Satoshi Nakamoto was either a pseudonym, a collective or hackers or even the brainchild of a major governmental agency. What most people didn’t assume was that the man who put the name on the original Bitcoin white paper was actually a man named Satoshi Nakamoto.

Much mystery still surrounds Satoshi Nakamoto, such as his past dealings with defense contractors and why he no longer visibly participates in the currency he birthed.

Is this the beginning of the end or the end of the beginning for Bitcoins?

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The worlds biggest Bitcoin Exchange, Mt. Gox, appears to have collapsed. 

Today Mt. Gox issued the following statement:

Dear MtGox Customers,

In light of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,
MtGox Team

 

744,000 Bitcoins have been said to have been theft from Mt. Gox. Today’s average exchange price of a Bitcoin is approximately $500, making the total price of the stolen Bitcoins about $372,000,000.00. 

It is hard for some to imagine that an amount so staggeringly high could have been theft, prompting accusations of graft, as outlined here.

This is certainly the end of Mt. Gox, but not necessarily the end of Bitcoins Tradehill CEO Jered Kenna stated on Bloomberg news, “This is not a Bitcoin problem, it’s a Mt. Gox Problem…there are more secure exchanges…”

It remains to be seen how well Bitcoins will weather Mt. Gox’s collapse, but the digital currency continues to have support even from those who lost big. 

Erik Voorhees is one such causality of the collapse. He lost 550 Bitcoins in Mt. Gox, yet he is steadfastly supportive of the currency, as he stated in his widely read post on Reddit. 

 

 

Major Bitcoin Exchange, Mt. Gox, Falls Below $100

The self proclaimed “Worlds Largest Bitcoin Exchange” has recently sent their buy price below $100 a Bitcoin. Mt. Gox’s downward spiral has been driving down the price of Bitcoins worldwide.

Mt. Gox’s crisis began on 7 February 2014, when the exchange halted withdrawals, citing technical issues.

Wikipedia:

“The company issued a press release on February 10, 2014 stating that the issue was due to transaction malleability: “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.””

The Mt. Gox Exchange has since reopened. Bitcoins were trading at $850 before Feb 10, 2014.

Many have speculated that Mt. Gox wasn’t ready to grow with the mounting interest in Bitcoins. Bigger players are entering the scene, which may alleviate the worries of Bitcoins holders.

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