Wednesday, February 19, 2014

Bitcoin updates February 19 , 2014 ......MtGox Co.,Ltd Location and Address Change – February 19 ........ MT Gox protest - Day 4 .....eBay Building Digital Wallet That Stores ‘Multiple Types’ of Currency ....... Coinkite Promises to Offer Secure Storage For Bitcoin Companies ...... Mark Karpeles’ statements infuriate the Bitcoin community

In contrast to Mt Gox , Bitstamp handles problems professionally !

Bitstamp Restores Withdrawals Following Security Scare

 | Published on February 20, 2014 at 21:00 GMT | BitstampCrimeExchanges,News
Bitstamp is in the process of restoring full services to all accounts following an issue that prompted the bitcoin exchange to disable withdrawals to some users.
The move was a security precaution and the affected accounts have been notified of the problem.
Nejc Kodrič, Bitstamp’s CEO, told CoinDesk that some accounts have already regained withdrawal functionality.

Phishing fears

The decision to halt the withdrawals was made after Bitstamp detected an increased number of phishing attempts over the last few days.
Bitstamp says some clients had reported receiving suspicious emails. The correspondences were examined and were found to contain malware, so Bitstamp then took the ‘better-safe-than-sorry’ approach and temporarily disabled the accounts.
At the time of writing, no Bitstamp user has reported any missing funds. It is possible that the attack was completely unsuccessful, although it is still too early to say with certainty.
Bitstamp believes the attack was targeted at bitcoin users only, and its sole intent was to steal bitcoins.

Warning message

In an email sent to affected clients, the Bitstamp team stressed that the tech team’s response to the phishing attack was a necessary precaution given the risks of the situation, and gave advice on how to deal with any malware.
“As a precaution we have also applied this security measure to your account,” the exchange wrote. “If you have received any emails with suspicious content and have opened links or attachments, we highly recommend that you immediately contact a computer expert.”
Even if you think your computer is clean, it is probably best to play it safe, Bitstamp says:
“If you consider that your system was not affected, we kindly suggest you contact our support staff for further assistance.”
The company added that the decision to disable withdrawals is an inconvenience, but it should be viewed as part of the exchange’s important security measures, which were put in place to safeguard users’ accounts – and their funds.

Attractive targets

The Mt. Gox debacle is still in the news, and other exchanges – including Bitstamp – have also faced related and unrelated problems in recent days.
Last week, Bitstamp was targeted by a massive DDoS attack, along with a few other exchanges. As with the current issue, it was forced to suspend processing bitcoin withdrawals, but it quickly recovered and resumed regular service.
On a more positive note, most exchanges appear to be very resilient to the frequent DDoS and targeted phishing attacks. It comes with the territory, it seems, and it is reassuring to see that most sites spring back to full service in a matter of hours.

Thailand Flip Flops on Bitcoin, Suggests Exchanges are Still Illegal

 (@pete_rizzo_) | Published on February 20, 2014 at 20:34 GMT | AsiaExchangesRegulation
Just days after reopening its bitcoin buying and selling services to the general public, Thailand-based bitcoin exchange Bitcoin Co Ltd is once again being threatened by legal uncertainty.
Bitcoin Co Ltd reinstated its services on 15th February, after receiving a letter from its central bank thatseemingly suggested it could legally do so.
However, representatives from the Bank of Thailand (BoT) have released new statements suggesting that Bitcoin Co Ltd “interpreted the letter to serve its own interests”, and that it perhaps acted improperly by reinstating its services.
The legality of Thailand’s bitcoin businesses has been in question now since last July 2013, when statements from the BoT in informal hearings caused the exchange to pause operations. The events caused widespread reports that Thailand had banned bitcoin to be issued around the globe.
Speaking to CoinDesk, Bitcoin Co Ltd managing director David Barnes said it has not been sent any messages by the BoT since receiving the letter in question. Further, he suggested he would hold off on taking any action until he received formal notice.
Said Barnes:
“We plan to continue operations as normal.”

Legal dispute

The Bangkok Post indicated that the BoT official it spoke to believes bitcoin exchanges do not fall under Thai law, which would mean that Bitcoin Co Ltd is not eligible to receive the license it needs to conduct business.
The newspaper explained:
“The letter also stated that even though the company allows its customers to trade bitcoins only for baht, it could not prevent customers from exchanging bitcoins for foreign currencies either locally or abroad.”
Given this interpretation, Bitcoin Co Ltd would be indirectly involved with foreign currency exchange under the Thailand Exchange Control Act of 1942, the paper said.
Still, such statements do not seem to reflect Bitcoin Co Ltd’s updated guidance to its community.
Barnes contends that prior to reopening, Bitcoin Co Ltd revised its terms and conditions so that it and its users complied with BoT guidelines.
“The customer must agree never to exchange bitcoins purchased from Bitcoin Co Ltd for any currency other than Thai Baht. The customer must also guarantee that any bitcoins the customer sells to Bitcoin Co Ltd have never been involved in exchange with any currency other than Thai Baht.”

Community reaction

Frankie Bishop, a representative from the Facebook group Bitcoin Thailand, said that he is not surprised that bitcoin continues to operate amid legal uncertainty. Citing the expression ‘this is Thailand’, he said he believes trading will likely continue in spite of the new statements.
Bishop said that the BoT has effective implied that bitcoin “does not fit anywhere”, under current Thai law, and that due to other pressing government matters, is unlikely to further clarify its position.
Explained Bishop:
“Thus, we could conclude that this sits in that area called the ‘Gray Area’.”

In  the midst of a crisis in confidence by Mt Gox customers and the bitcoin world , without reaching a solution to the impasses in bitcoin and fiat withdrawals and allowing customers to access and withdraw their frozen funds , Mt Gox suddenly announces --- that they're moving ?

Mt.Gox Crash, Hollow Announcement. Blow-by-blow.

Posted 17 hours ago 

Ongoing Technical analysis

20h18 UTC – final update
The chart below shows price challenging the $110 level. The inset reveals the ~4200 BTC buy orders waiting at this level. Selling pressure has chipped away at this level for several hours and there is little doubt those orders will cause a reversal. It looks like the bears have sub-$100 in mind… Analysis will have to be halted at this point since fatigue is setting in. More tomorrow!
gox price chart $110
14h22 UTC
Below $135 and currently resting on $130. Indicators across all timeframes are stretched to the max and this systematic grind lower reminds of the Gold crash to $1,180 in June last year. It would be dangerous to call a bottom here since there is no reason why this cannot continue into “stupider oversold” territory. A layer of ~5200 BTC buy orders wait at $110 – a very likely reversal point should the bears claw their way down there.
traders mtgox crash
Traders at the Chicago Mercantile Exchange show how it’s done
13h55 UTC
Price has returned to the lows near $135 but seems unable to break below this level. Should the bears succeed in pulling price below this level (that is being challenged for the 3rd time today) then a test of each $5 level down to $100 is surely possible.
10h42 UTC
Price returned to the day low near $135 and bounced. Price should advance beyond $200 but we cannot be certain that the low of the decline has been struck.
10h30 UTC
Price has fallen to $150 – a critical support – below here we could see additional decline – but beware – once a bottom is struck the advance will be rapid!
10h15 UTC
An ambiguous announcement from Mt.Gox leaves the speculation open. Direction is currently ambivalent.
Trade recommendation: BUY below $200 with an eye to returning to cash near $250.
Mtgox BTC crash chart
0.89 Fib level of entire advance since 2009 has been breached
09h45 UTC
Disclosure: the writer is currently in cash and awaiting a positive announcement to buy BTCUSD (yes, at Mt.Gox) at these bargain prices. Should Mt.Gox re-enable withdrawals (even with restrictions) there is not much downside left to $0.00 and such an outcome will most likely see a relief rally to parity levels near $250 and then $500. Readers are urged to practice caution since price spikes are completely retraced in 99% of cases, so as much as price will advance, the retracements will equally be deep. Do not get caught on the wrong side of trend!
09h00 UTC
It seems that price has found support around the $150 level which is also the 0.89 Fibonacci retracement level of the entire advance since 2009. Price may hold above $150 but a breach could see $120 then $100 and finally $50 to the downside.

Mt.Gox Crash follower by Hollow Announcement

mtgox crash
Price support was nowhere to be found
After the customary and tension-filled wait until 19h00 (JST) for an announcement from MtGox, it arrived with an underwhelming thud among stunned customers. Nothing about withdrawals. Nothing about exchange systems being updated. Not a word to the thousands of customers waiting for a hint of progress. Instead, a casual notice informing that additional staff have been employed to help process customer account verification requests.
Building up to the moment, chatter in IRC and forums reached fever pitch as heated discussion weighed customers’ options going forward. Speculation mounted as to the possible causes of a vicious sell-off that began at 16h00 JST. Many believed that someone must have had inside information regarding the details of today’s announcement. CCN cannot confirm insider trading as the cause of the sell-off and we will update readers as new information comes to light.
At 16h00 JST price unexpectedly broke below the $250 psych level and began plummeting. Within minutes price had found a new range between $150 and $200. Mt.Gox Crash.
#mtgox irc
freenode/#mtgox is packed with irate customers
Nerves were raw as time approached close of business in Japan with no announcement forthcoming. Mt.Gox customers had been asking for updates or even an ETA for announcement in IRC (left), but with little response from Support Staff who reply with pre-canned “We do not currently have any new information. The announcement will be made later today”.
Many disgruntled customers expressed their intention to withdraw funds today and this negative mood may have prompted the sell-off in part.
Some customers expressed the view that Mt.Gox had broken trust and that they intended to close their accounts and leave as soon they were able to withdraw funds (BTC or fiat). Speculation has it that Mt.Gox will re-enable withdrawals in March but with tight limits to prevent a rout on their processing systems and funds liquidity.

MtGox Co.,Ltd Location and Address Change – February 19

Dear MtGox Customers,

MtGox Co.,Ltd. (Japan) has moved to the address below:

MtGox Co.,Ltd.
Cerulean Tower 15F
26­1 Sakuragaoka­cho
150­8512 Shibuya Tokyo

Please address all documents/letters to the above address from now on.
Thank you for your kind corporation.

Best Regards,

MtGox Team

MtGox protest day 4. Today we cybered up with webcam and Google glass and are trying out our serious faces. #mtgoxprotest

eBay Building Digital Wallet That Stores ‘Multiple Types’ of Currency

 | Published on February 19, 2014 at 10:17 GMT | MerchantsNewsWallets

John Donahoe, eBay’s CEO, has confirmed that the company is building a digital wallet for PayPal that can take multiple types of currency.
Speaking to Bloomberg, Donahoe dismissed calls made by activist and investor Carl Icahn, who recently called for PayPal to be spun off into an independent company. Donahoe disagreed, believing PayPal and eBay should stay just the way they are.

No spin, no spin-off

“Mobile is the most important platform shift that has happened arguably in the last decade. When mobile first started no-one would have downloaded a PayPal mobile app,” he said.
However, Donahoe points out that more than 100 million users downloaded the eBay app, with seamless PayPal integration. He also pointed out that the mobile platform helped PayPal get “viral traction”.
When asked to comment whether the spin-off would be a good idea as a hedge against digital currencies, Donahoe said digital currencies are not a threat, as they can be integrated into PayPal.
“There is nothing holding PayPal back from pursuing digital payments today, as part of eBay. In fact PayPal is pursuing digital payments and is the leading digital payments alternative in many different environments,” Donahoes said. He added:
“You can use digital currencies in the PayPal digital wallet, that’s in fact what PayPal is doing – is building a digital wallet that can take multiple types of currency.”

Bitcoin backers in eBay’s ranks

Donahoe has made some positive comments about digital currencies in the past. However, this does not mean PayPal will add bitcoin to its new digital wallet.
The CEO is not alone, either. In December, PayPal president David Marcus said he is a “big fan” of bitcoin – claiming the currency is the future. However, he went on to say that he isn’t ready to let people link their bitcoin wallets with PayPal accounts just yet.
Marcus pointed out that the regulatory framework has to become clearer and thatvolatility needs to come down before PayPal can seriously consider bitcoin. In other words, it won’t happen anytime soon.

Coinkite Promises to Offer Secure Storage For Bitcoin Companies

 (@dannybradbury) | Published on February 19, 2014 at 06:14 GMT | CompaniesNews

Bitcoin debit card provider Coinkitehas expanded its mission – it now wants to be the go-to provider for bitcoin companies needing safe private key storage.
The company, which shipped the first point of sale systems for its bitcoin debit cards early this year, is preparing to launch an API this summer, which will enable companies to store their bitcoins on its custom-built hardware security modules (HSMs).
“With this API you’d have deposit and withdrawal and receiving address generation power,” said CEO Rodolfo Novak, explaining how third parties could use its HSMs to store funds offline for their users.
The firm already uses the HSMs to store private bitcoin keys for its debit card customers. The HSMs, which it builds itself, are designed to store the keys securely. He describes them as “bitcoin smart”, able to sign bitcoin transactions themselves.
“Very soon we will start reselling the HSMs too, so you won’t even have to trust us with your private key,” he said, adding that this would be a more expensive, enterprise-class solution. “You could put one of our HSMs in your facility. We have no access to it. But this HSM would use our API to be able to facilitate every single transaction that you do.”
The solution will appeal to exchanges and online wallet companies in particular, he said. They don’t want to hold all of their bitcoins in hot storage, where it is accessible online, in case they get hacked. But if they hold too much in cold storage (stored offline) they risk not having enough to cover their daily needs.
“Those guys have huge problems with float, and they’re constantly faced with hacking attempts. Everyone is, in this industry,” Novak said. The HSMs would enable them to keep coins accessible for online use, but in highly secured systems.

New POS machines

Coinkite is also expanding its core point of sale terminal business with a new model. Thus far, the company has sold just one type of POS machine, featuring a camera for reading QR codes, along with GSM connectivity, WiFi, and other features.
Around April, it is planning a scaled-down version that will cost a little more than half the price, said Novak. “It will not have the QR code reader or GSM; only the WiFi capability. “It’s perfect for retail. It’s cheap, and rugged,” he said. “And it still takes our debit card.”
The idea is to entice even more retailer customers on board. The firm now has around 40 outlets using its bitcoin POS system across the globe, Novak said. Aside from bitcoin-related businesses, they include barbecue eateries, a couple of hotels, a bistro, a surgery clinic in Australia, and computer and electronic stores.
To this end, the firm has also rewritten the code for its online store, relaunching it last week to make the ordering process easier. It has revamped the ordering system, denominating it in fiat.
It now lists prices in 14 different fiat currencies, alongside bitcoin and litecoin, although it still only accepts payments in the virtual currencies. Fiat pricing is constantly adjusted using a weighted average from several exchange sources.
This will also make it easier for retailers to order its debit cards in bulk, he said. The firm is shipping bulk cards to retailers who then pre-load them with bitcoins and sell them for fiat currency.
This would effectively turn the retailers into exchanges for bitcoin. There is a switch on the current POS hardware that enables it to operate in either exchange or POS mode.
Exchange mode enables a retailer to effectively operate as a bitcoin ATM, buying and selling bitcoins, transferring bitcoins to the firm’s debit cards, or printing out paper wallets with the coins on them.
The ability to switch this off at the terminal is important as regulators begin to hammer out the rules around bitcoins, Novak pointed out.
“We chose to be a bitcoin company in the bitcoin way. We don’t touch fiat,” he said. “I find it hard to believe that the government would find a way to regulate bitcoin itself, but it may find a way to regulate the point of exchange.”
His own government of Canada recently announced that it would be regulating bitcoin, for example, but gave little detail.
The firm is also testing several other features in preparation for launch. One such capability is fund forwarding, which would enable bitcoins entering a Coinkite account to be automatically forwarded in full or in part to another bitcoin address.
“Let’s say that you have a need to convert funds to fiat. We don’t want to prevent you from choosing the best exchange you prefer, so you can send it to BitPay, Coinbase, Bitstamp, or cold storage. You can send it to whatever you want,” Novak concluded.
Pricing on the HSM modules has not yet been decided, but API access will be charged at a monthly rate.

Mark Karpeles’ statements infuriate the Bitcoin community

The CEO of Mt. Gox can’t seem to catch a break, probably because he keeps solely blaming Bitcoin and its transaction malleability “flaw” to explain all the problems that are still affecting the exchange.
While all the other exchanges have already implemented the necessary fixes released during the last week by the cryptocurrency core developers, the Tokyo-based company is still inactive when it comes to process the clients’ withdrawals and more information is only expected on Thursday (20), according to Mt. Gox’s latest statement.
Meanwhile, the exchange’s CEO, Mark Karpeles, talked to the Wall Street Journal: far from calming down the community’s flared tempers, he confirmed that it was all Bitcoin’s fault.
“We sincerely apologize for this incident; however, please understand that we are not the developers of Bitcoin. We are very surprised that anyone could fault Mt. Gox instead of the Bitcoin software“, he said, causing a wave of criticism on social media.
Here are some reactions to Karpeles’ statement that were posted on Reddit.
What a scumbag. He effectively damaged the reputation of Bitcoin with that statement. And thousands of people will read that.
Mark keeps spewing his bullshit because not enough people are loudly pointing out that he is a complete idiot. At this point Mt.Gox is damaging Bitcoin more than it is helping, it needs to be seen as the exchange that is no longer used and we should make sure that all new people to Bitcoin know not to use it.
This statement is even more evidence of their negligence. Anyone can be a developer of Bitcoin, so should it not stand to reason that the (formerly) largest and most influential business in the industry should have its own in-house developers dedicated to developing the protocol and helping to ensure that their code is airtight?
This is market manipulation. He’s using his position to further depress the value of BTC. Come to think of it, this isn’t the first time MtGox causes BTC to drop. He’s back to his old game.
The audacity of him to try to throw Bitcoin under the bus. Guess what, Mark: Bitcoin is far, far bigger than yourself and your ego. I can’t fathom that someone would try to discredit the technology that represents such a monumental paradigm shift for the better, all for the sake of avoiding blame.
The crisis keeps pushing Bitcoin’s price further down at Mt. Gox, as the exchange’s website is still depicting a value around $250. The price has actually decreased $50 when compared to the value registered this Monday (17).
The recent turmoil has also led a lot of users to consider that Mt. Gox could be suffering pressure from the Japanese authorities due to its connection with cryptocurrency. However, Karpeles also told the WSJ that he previously discussed the business model with the local authorities to ensure that the company is “operating within the law here”.