Bitcoins Down MTGOX temporarily stopped all withdrawing requests

Bitcoin's value was hammered following a pause in withdrawals by one major exchange.
After trading at around $850 this past week, the virtual currency fell both Thursday night and Friday morning and is now hovering at around $732, according to the CoinDesk Bitcoin Price Index. So what triggered the freefall?

Bitcoins down

MtGox, a major Bitcoin exchange, had announced that it was temporarily stopping all Bitcoin withdrawal requests in light of a technical issue in the withdrawal process. The process needed to be frozen for MtGox to fix the problem, according to a statement on its Web site:

In our efforts to resolve the issue being encountered by various bitcoin withdrawals, it was determined that the increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state.
In order for our team to resolve the withdrawal issue it is necessary for a temporarily pause on all withdrawal requests to obtain a clear technical view of the current processes.
We apologize for the sudden short notice. All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers.

Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).

Stay updated to our our blog and facebook page Bitcoin News Portal.

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Yahoo malware turned PCs into Bitcoin miners

Yahoo malware turned PCs into Bitcoin miners

The cybercriminals who infected the computers of European Yahoo users apparently wanted to create a huge Bitcoin network.

Researchers at security firm Light Cyber revealed this week that one of the malware programs aimed to use the resources of infected PCs to perform the calculations necessary to run a Bitcoin network. Revealed earlier this month by fellow security firm Fox IT, the campaign spread its package by using Yahoo's ad server to deploy malicious ads. The malware took advantage of vulnerabilities in Java to install itself on computers that visited the ads.yahoo.com site.

The malware attack reportedly lasted from December 31 through January 3, when Yahoo took down the malicious ads. On Saturday, Yahoo acknowledged the issue through the following statement:

At Yahoo, we take the safety and privacy of our users seriously. On Friday, January 3 on our European sites, we served some advertisements that did not meet our editorial guidelines, specifically they spread malware. We promptly removed these advertisements. Users in North America, Asia Pacific and Latin America were not served these advertisements and were not affected. Additionally, users using Macs and mobile devices were not affected.


So far, Yahoo hasn't revealed any details on the infected computers or publicly advised affected users on what they should do. But security firm Surfright shed a bit more light on the situation.

Not every ad on the Yahoo advertisement network contained the malicious iframe, but if you have an outdated version of Java Runtime (you can check here) and you used Yahoo Mail the last 6 days, your computer is likely infected.

BitcoinNewsPortal

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China Bans Payment Companies From Clearing Bitcoin -- BitcoinNewsPortal

China Bans Payment Companies From Clearing Bitcoin

Chinese central bank officials told third-party payment service providers to stop offering clearing services to online Bitcoin exchanges, according to China Business News, which is affiliated with the Shanghai government.

Companies currently offering services must end services by the Chinese New Year, a weeklong holiday that begins on Jan. 31, the newspaper cited Zhou Jinhuang, deputy director of payment clearance at the People’s Bank of China, as saying at a meeting with more than 10 third-party payment service providers.

China’s central bank regulated the virtual currency for the first time on Dec. 5 by banning financial institutions and payment providers from conducting transactions in the virtual currency. Zhou was cited as saying by China Business News that the rules would be “strictly enforced.”

“The PBOC statement on Dec. 5 was somewhat vague and there is more clarity now,” Zennon Kapron, managing director of financial consultancy Kapronasia, said in an interview in Shanghai. “The way it’s reading now is that after the Chinese New Year, you won’t be able to get your money off the platforms.”

The PBOC’s news department didn’t immediately comment on the Bitcoin report when contacted by Bloomberg News. Two calls to Li Yue, director general of the central bank’s payment and settlement department, were unanswered.

Bank Ban

Bitcoin prices on BTC China, China’s largest exchange, plunged to as low as 3,251 yuan ($535) Dec.17,2013 before rebounding to 4,155 yuan at 4:16 p.m. local time. The drop in prices was triggered by concern that PBOC officials may visit lenders next to enforce the ban against Bitcoin settlement, Kapron said. The number of banks and payment providers that can transact Bitcoin has shrunk since the ban was announced, he said.

Bitcoin prices on the CoinDesk index jumped as much as 11 times since October, prompting former Federal Reserve Chairman Alan Greenspan to call the market a “bubble.”

Speculation that authorities in China may halt trading in Bitcoin surfaced after police arrested three people on suspicion of stealing money from investors through a fake online exchange.

GBL, a Bitcoin trading platform in China that began operating in May and had 4,493 registered users at the end of September, abruptly closed on Oct. 26, the official Xinhua News Agency reported Dec. 3., citing police in eastern Zhejiang privince’s Dongyang city.

BitcoinNewsPortal

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How to choose wallet for different devices

How to choose wallet for different devices  

Your Bitcoin wallet is what allows you to transact with other users. It gives you ownership of a Bitcoin balance so that you can send and receive bitcoins. Just like email, all wallets can interoperate with each other. Before you start with Bitcoin, be sure to read what you need to know first.

Get started fast and easy

• MultiBit is an app you can download for Windows, Mac and Linux.
• Bitcoin Wallet for Android runs on your phone or tablet.

Be part of the Bitcoin network

Do you have a computer that you keep switched on all the time, that's connected to the Internet? You can help the community by simply running the full Bitcoin client on it. The full client is more resource intensive and will take a complete day to synchronize. After that your computer will contribute to the network by checking and relaying transactions.

Software wallets

Software wallets are installed on your computer. They give you complete control over your wallet. You are responsible for protecting your money and doing backups.

          Mobile wallets

     Mobile wallets allow you to bring            Bitcoin with you in your pocket. You       can exchange coins easily and pay      in physical stores by scanning a QR      code or using NFC "tap to pay".

        Web wallets

Web wallets allow you to use Bitcoin anywhere with less effort to protect your wallet. However, you must choose your web wallet with care as they host your bitcoins.                                                          

Bitcoin-Qt

 

MultiBit

 

 

 

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Bitcoins in Space

Richard Branson, the brazen Brit behind Virgin Galactic, made news last week when he announced that he has begun processing Bitcoin payments from would-be space tourists. (A woman in Hawaii has already booked her ticket, the company says.) But it turns out Branson’s not the only Bitcoin enthusiast looking toward the heavens. Jeff Garzik, one of the core developers of the Bitcoin software and a new addition to the team of developers at BitPay, a Bitcoin payment processor, has been quietly working on a side project aimed at making Bitcoin work by satellite.

Garzik first hinted at his intentions during his “State of the Coin” address at aBitcoin conference last year in London, where he briefly mentioned that he was working to launch a satellite that would be paid for in bitcoins. Last month, he announced the full purpose of the satellite. According to Garzik, it will repeatedly transmit the most recent block in the Bitcoin block chain—the latest transaction data processed by the Bitcoin network.

In succession, the block chain represents the entire ledger of Bitcoin transactions. And it’s the task of users—anyone running  a Bitcoin client—to both validate the calculations contained in the blocks and to send requests for new transactions to the peer-to-peer network of some 2000 to 5000 machines running the Bitcoin reference software.

“Without the peer-to-peer payment network, Bitcoin does not function today,” explains Garzik. A coordinated, distributed denial-of-service attack on all peer-to-peer nodes would effectively stop all payments across the network, and this is the threat that he wants to address.

“Use of the payment network is not a technical requirement of Bitcoin. If another mechanism for distributing Bitcoin data existed—be it satellite or flash drive via the postal service—then Bitcoin could continue to survive,” says Garzik.

Satellites do have their own vulnerabilities. It’s possible, for example, to disrupt them with a maneuver resembling a denial-of-service attack called double illumination, which simply jams the satellite with signals from overlapping frequencies. If the interference is strong enough, it can effectively cut satellite transmissions.

But Garzik is not looking for a single, foolproof solution. As he describes it, this is more of a move to diversify. “The general idea is the need to find varied means for block-chain data-set distribution,” he says. “We need all the resilience we can muster. Satellite distribution of public block-chain data would facilitate some level of resilience, as well as perhaps enabling use in geographic areas where Internet connectivity is unavailable or spotty.”

For the first phase of the project, Garzik is looking into CubeSats, miniature satellites that weigh only about a kilogram. The most likely scenario would be to hitch a ride on a rocket as a secondary payload. Lockheed Martin, for example, is working on a program that by 2015 would offer ride shares for CubeSats through its Athena launch services.

If he goes this route, Garzik won’t be able to precisely control which orbit theCubeSat ends up in. “Having a network of ground stations is critical to account for multiple orbits that might be achieved,” he says. These stations will then be responsible for transmitting block-chain updates to the satellite.

Garzik estimates that the cost of construction and launch will be about US $2 million and says that if necessary, he will be able to fund the first phase of the project on his own—with bitcoins. But he expects a lot of help. Last week, he set up a Bitcoin address for donations and has already received 25 bitcoins (more than US $20 000) from a group called BitcoinGrant.org.

Although Garzik has not offered a definitive accounting of how this money will be spent, the public nature of the Bitcoin block chain will enable donors to track where their money goes. “My ‘bitcoins in space’ project has a public, trackable donation address,” says Garzik. “If other space partners accept Bitcoin, we are able to disclose and track those purchases as well.”

If the first launch is a success, Garzik intends to follow up with more satellites. “In the short term, there are sufficient people interested in the Bitcoin community that fully funding Phase 1 is assured,” he says. “Based on the same factors and expressed interest, it seems likely that at least one demonstration satellite can be funded and flown in a three- to five-year time frame. Additional interest and funding will dictate how large the network may grow. At worst, listeners may have to wait a few hours to tune in and receive their block-chain broadcast, rather than a fully real-time feed that a cluster of satellites may provide.”

Bitcoin News Portal

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How does bitcoin work ?

Lets understand how does bitcoin work --

The basics for a new user

As a new user, you can get started with Bitcoin without understanding the technical details. Once you have installed a Bitcoin wallet on your computer or mobile phone, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose your addresses to your friends so that they can pay you or vice versa. In fact, this is pretty similar to how email works, except that Bitcoin addresses should only be used once.

 

Balances - block chain

The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography.

Transactions - private keys

A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.

Processing - mining

Mining is a distributed consensus system that is used to confirm waiting transactions by including them in the block chain. It enforces a chronological order in the block chain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Mining also creates the equivalent of a competitive lottery that prevents any individual from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.

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Bitcoins hits 1 billions of US Dollars

Bitcoin, the world’s first open-source cryptographic currency, which has been on a tear since the beginning of this year, set a new record on 28 March, when the price listed on the largest online exchange rose past US $95. With nearly 11 million bitcoins in circulation, this sets the total worth of the currency at just over $1 billion.

For a bit of perspective, that’s how much Facebook spent on its acquisition of Instagram last April. But Bitcoin is not a company. It’s a digital currency that runs on a global peer-to-peer network without the backing of a nation or any other central authority. The recent ascent has traditional economists scratching their heads.

“It’s something of a mystery that Bitcoin has a positive value at all, since it wasn’t launched in the way a new currency is typically launched,” says Lawrence White, an economist who teaches the history of banking and money at George Mason University, in Fairfax, Va.

“Typically, if a country wants to introduce a new currency, they make it redeemable for the old currency at a fixed exchange rate, and then after a while they cut off the link and retire the old currency,” White says. “But they launch the new currency by giving people a sort of firm expectation of what it’s worth. Bitcoin didn’t do that. It just launched itself by its own bootstraps, and we don’t really understand how that worked, as economists.”

Recent events suggest that many of the people who are using Bitcoin don’t want to replicate these old models. Much of the recent interest in Bitcoin is coming from places like Cyprus, whose desperate proposals for economic reform threaten to plunder the savings of its people.

Take what happened on 19 March, for example. In its bargaining for a €10 billion bailout from its European lenders, the Cypriot government instituted a bank holiday as it considered economic reforms that would impose severe levies on many bank deposits. As the situation became more chaotic, Cypriots who found themselves suddenly cut off from their savings accounts began downloading Bitcoin iPhone apps. That day, there was a steep increase in downloads of Bitcoin Gold, an application that tracks the exchange rate of Bitcoin. In rankings of finance-related downloads by popularity, the app went from 1171 to 104.

Without access to their money, it’s unlikely that many Cypriots were able to buy bitcoins at that time. But interest in the currency peaked in other countries as well. Spain, which has kept a close eye on the developments in Cyprus, showed a similar spike on 17 March, and downloads in the United States jumped a few days later, indicating that when government currencies fray, Bitcoin begins to look a little more like a safe haven and a little less like a crazy techno-utopian experiment.

But if Bitcoin is to function as a proper currency, people will have to be able to spend it as well as save it. This month, Bitcoin recruited a couple of high-profile merchants. On 14 February, Reddit began accepting the currency from customers signed up for its Gold membership. Two days later, Kim Dotcom announced via his Twitter feed that people could start using bitcoins to buy access to his new file-sharing service, Mega.

Since then, transactions in the Bitcoin network have increased significantly. For most of 2012, before the price of Bitcoin began its dramatic upward surge, daily transactions totaled about 200 000 bitcoins. Now that number tends to be around 300 000, suggesting that more people are using the currency to make purchases.

BitPay, one of the most successful Bitcoin payment processors, reports a similar trend. In March alone it set a new record, processing more than $2 million worth of Bitcoin transactions for its clients—nearly two-thirds of what the company managed in all of 2012.

“We see somewhat of a wealth effect,” says Anthony Gallippi, the CEO and cofounder of BitPay. “As the price rises, people do tend to spend money. When the price falls is when they tend to spend less.”

All of this is a big deal for Bitcoin. But making it into the Billion Dollar Club is not enough to impress professional investors, it seems. When asked whether Bitcoin’s aggressive ascent was turning any heads, Michael Kagan, the senior portfolio manager at ClearBridge Investments, had this to say: “I just don’t feel comfortable getting involved with something vulnerable to being hacked or manipulated, and with no recompense if it is. If I wanted to invest in something as an abstract store of value, I would buy gold.”

Maybe someday Bitcoin will gain its Wall Street cred. Until then, early adopters can at least bask in the glory of bewildering a whole generation of economic theorists.

A billion dollars may be small on a global scale, but it’s certainly hard to ignore. Perhaps the movie version of Napster cofounder Sean Parker in The Social Network, as portrayed by Justin Timberlake, put it best: “A million dollars isn’t cool. You know what’s cool? A billion dollars.”

This article was previously published as a blog post on 29 March.

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