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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Apple Hates Bitcoins.

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Today Apply has removed the Blockchain wallet from their App Store. Blockchain was the last remaining Bitcoin Wallet available in the App Store.

Apple has, apparently, given no reason to Blockchain for the removal. The App had over 120,000 downloads and is widely used to transfer Bitcoins P2P.

Blockchain was the last App for using an iPhone to exchange Bitcoins. Blockchain is very popular at physical Bitcoin exchanges like the Satoshi Square held at the Bitcoin Center NYC (40 Broad St.).

Many iPhone owners who hold Bitcoins are upset at the news. One iPhone user has gone so far as to smash his iPhone and post the video to youtube.

Blockchain via a posting on their site, cited a popular Apple quote:

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward.”

Blockchain then added:

“Perhaps Apple should have added a disclaimer: “As long as the ‘rebels’ don’t threaten our profit margin”. The rebels no longer run the show at Apple Inc; the bean-counters are now firmly in charge.”

Some have speculated that Apple is shedding Bitcoin Wallets to build their own payment system. The Wall St. Journal reported about Apple’s mobile payment systems on 1/24/14.

Hello Bitcoin, Goodbye Western Union?

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Original Story: AllAfrica.com

Kipochi

A new Bitcoin transmission mobile app, Kipochi, has been launched. The Danish founder, Pelle Braendgaard, is targeting Foreign Labors who wish to send their remittances home without paying the large transfer fees they have been previously subjected to. The average fee a migrant pays to transfer money home now is around 12%.

Kipochi’s Bitcoin wallet is free, as is transmitting bitcoins from person to person.

Braendgaard hopes to allow shops function as exchange agents and he will take 1% of the transaction’s fee. There is no word on the percentage these hypothetical shops would charge for the exchange to national currencies.

Kipochi claims to have representatives in Kenya, Nicaragua, Spain and Malaysia.

BitPesa

BitPesa is a Kenyan startup is taking advantage a trail regulatory approval. They currently handle around 7,000 transactions per month. BitPesa exchanges the senders currency to Bitcoins to the recipients’ currency. There is a 3% fee on each transaction.

Western Union who charges about 6% on a $200 transaction currently holds 30% of the remittance market.

$150,000 (201.9 Bitcoins) grafted from Wisconsin man.

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Reported by By Christena T. O’Brien of twincities.com (see original) .

34 year old Software Engineer, Jamie Russell, hoped to exchange digital Bitcoins for physical Bitcoin tokens, complete with tamper proof strips which concealed the digital keys. His concern was that his original Bitcoins in their all digital state were not secure enough.

In a twist he was swindled by a man purporting to make his digital coins physical. The Alleged UK based man, David Williamson, carried on a internet dialogue with Russell for over a year, gaining his trust. It wasn’t until after the theft that Russell learned that Williamson had stolen Bitcoins from various other victims.

After Russell transferred his Bitcoins to Williamson he received tracking numbers for items which were never sent.

Williamson ceased communicating with Russell, who has lost the six figure dollar amount of the digital currency.

This event feeds into criticisms of Bitcoins security especially when transferring to unknown parties.

Bitcoins thrive on their ability work person to person without needing a third party such as a bank or credit institution. Although third parties take costly fees for money transfers, they do offer security and the possibility for recovering stolen funds. In this case Russell can only hope that Williamson is tracked down and prosecuted. Russell stated that even if Williamson is captured, “I’m not expectant that I’m going to get any money out of him.”