Thursday, June 12, 2014

Bitcoin updates June 12 , 2014 -- US Marshals to auction 18 million USD in bitcoin from Silk Road bust ....... Bitfinex distancing itself from Bitstamp........Google joins Yahoo in offering bitcoin prices ....... Latest news in the MT Gox bankruptcy.

Virtual Currency Slides As FBI Prepares To Dump 144,341 "Silk-Road" Bitcoins

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The FBI announces it is preparing to sell the 144,341 Bitcoins that were collected during raids in the online drug market Silk Road. While the WSJ reports, the timing and sales method are unclear, it is already weighing on the virtual currency as the Bitcoin traders front run the Fed's unwind...

The Bitcoin Trading Platform Bitfinex is Distancing Themselves from Bitstamp

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Bitfinex and BitstampRaphael Nicolle, creator of the Bitcoin trading platformBitfinex, has announced on the digital currency exchange has plans to distance themselves from Bitstamp’s order books. When answering a question on a large price difference between the two, Raphael commented with the news.

Arbitrage Question

he original question was from user Poryhack:
“As I write this, the difference is a little over $8 but I’ve seen well over $10 in the last few days. What’s causing this? Why isn’t arbitrage bringing the two closer together like they’ve been in the past? The two are more or less tied for volume so that can’t be the issue.”

Raphael’s Answer and Announcement

Raphael chimed in and commented under his reddit username Raphael_Bitfinex:
“I’ll try to answer here. We used to include the Bitstamp order book into our own order book for liquidity purposes. In other words, we were arbitraging between our own platform and Bitstamp. However, as we continue to grow we decided to slowly, and I insist on slowly, withdraw this arbitraging program to let people do the arbitraging themselves. This is why you started to see the difference between the price on our platform and Bitstamp, as arbitraging for third parties is interesting only after a certain threshold.
Furthermore, you will notice that our price is actually very close to Chinese exchange’s prices, and follows them closely. There is a reason for this of course, but this probably explains the difference and maybe the “bullishness” of a lot of our users.
I know this new difference raises questions, but this is part of evolution toward being a more independent exchange.”
It seems as though Raphael is looking to further his 2012 platform, Bitfinex, from Bitstamp for reasons of independence. Bitfinex has been progressing toward independence for a while, and they were able to pass a Proof of Solvency audit performed by Stefan Thomas, CTO of Ripple Labs.
The future move of distancing themselves slowly from Bitstamp will lead to, hopefully, great competition between the two. The competition will force each company to provide a better service to their customers, with the end users benefitting from the improvements. As the two exchanges move forward, it will be incredibly interesting to see how they shape themselves independently.

Bitfinex and Bitstamp Proof of Solvency

Ever since the Mt. Gox meltdown, Bitcoin users have been reasonably skeptical of all Bitcoin exchanges. They’ve began pressuring exchanges to pass a Proof of Solvency audit, starting withKraken passing the first ever “crypto-audit” last March.
However, an audit is not flawless. When Stefan Thomas passed Bitfinex, he said, “An audit does not constitute an endorsement and it does not address any risks outside of present insolvency. It’s also not infallible; exchanges can borrow money or ask others to sign their audit message.”
Bitstamp also passed a Proof of Solvency audit performed by former Google engineer Mike Hearn. They made a self-to-self transaction and gave Hearn their private key to cold storage access. Through this process, Bitstamp was able to prove that it controlled all 183,497.40310794 BTC in their reserves.

Google Joins Yahoo in Offering Bitcoin Prices

 | Published on June 11, 2014 at 18:14 BST | NewsTechnology
UPDATE (12th June, 17:30): We added a number of currencies to Google Finance, from the Icelandic króna to the East Caribbean dollar to Bitcoin. We’re always working to provide more of the financial data people are looking for.

We added a number of currencies to Google Finance, from the Icelandic króna to the East Caribbean dollar to Bitcoin. We’re always working to provide more of the financial data people are looking for.
Google Finance has launched a bitcoin price tracker, offering market information across several major fiat currencies as well as access to breaking news in the digital currency world.
Users can access prices in BTC/USD markets, as well as prices in pound sterling, yen, euro, renminbi, Australian dollar and Canadian dollar markets.
The tool also enables review of historical prices dating back to June 2013.
The Google Finance bitcoin tool enables quick BTC-to-fiat conversions as well, allowing for calculations across dozens of currencies such as the Yemeni rial and the Bangladeshi taka.
The move comes hot on the heels of the Yahoo! Finance bitcoin price listing. In addition, Bloomberg opted to add bitcoin prices to its terminals in late April.
CoinDesk reached out to Google for comment on the decision, but did not receive an immediate response.

Simple design

The layout in Google Finance is simple, allowing for easy navigation without many bells and whistles.
Users can list multiple fiat currencies against the price of bitcoin, and the tool’s news tracker pegs the timing of news releases with the fluctuations in the market.
The tool bears many similarities to Yahoo! Finance’s tool, though it utilizes different layout schemes for graphs and news tickers. However, Yahoo! Finance does not offer bitcoin price conversions to other currencies.

Google strengthens ties with bitcoin

The new tool is perhaps the most direct integration with some aspects of bitcoin on Google’s part. In the past, members of Google’s leadership have intimated that, in time, the search giant will come to accept bitcoin in some capacity.
In March, Jared Cohen, Google’s director of ideas, remarked at the SXSW conference in Austin, Texas, that digital currencies are “inevitable”. At the same time, he speculated if bitcoin itself would prove to be the top digital currency or the blueprint for many to come.
On the technology side, bitcoin may find a place within Google’s sphere of influence via Google Glass.
Last month, a startup called Eaze announced Nod to Pay. This app allows wearers of Google Glass to make payments in bitcoin, with wallet support forBlockchain and Coinbase users.

Mt. Gox US Bankruptcy Filing Receives CoinLab Support

 (@pete_rizzo_) | Published on June 9, 2014 at 21:30 BST | LawMt. GoxNews
Seattle-based digital currency startup and the former manager of Mt. Gox’s US and Canada operations CoinLab has announced that it is now supporting the Japan-based exchange’s Chapter 15 bankruptcy filing.
The news comes from court papers filed Friday, 6th June and obtained byThe Wall Street Journal that state that CoinLab will not move to oppose the filing. CoinLab previously objected to the revival plan for Mt. Gox submitted by investor syndicate Sunlot Holdings.
The move, while seemingly small, could open the door for the Sunlot Holdings plan, as well as those rumored to be submitted by China-based digital currency exchange OKCoin and CoinLab itself, to move to Japan for formal vetting.
Mt. Gox’s Japanese bankruptcy trustee Nobuaki Kobayashi has previously indicated that the bankrupt exchange needs to secure approval for its Chapter 15 protection in the US before he can assert more authority over developments in the case.
Mt. Gox KK, the company’s Japanese entity was granted preliminary protection in the US upon filing for Chapter 15 bankruptcy in March, a move that granted certain protections from creditors.
At that time, it was noted that the presiding bankruptcy judge Stacey Jernigan would need to review the matter before choosing whether to extend the offering.

CoinLab enters the conversation

The move is the second notable development in the case caused by the assertion of CoinLab in the proceedings following its move to block the revival plan proposed by Sunlot.
In this filing, CoinLab argued that Sunlot was perhaps looking to take advantage of Mt. Gox creditors by overcharging for certain responsibilities it would carry out once charged with the management of the exchange’s liabilities. However, this was just one of a long list of other concerns.
Notably, CoinLab’s claims against Mt. Gox are among the more dated in the case.
CoinLab filed a lawsuit against Mt. Gox in May 2013 claiming that Mt. Gox did not provide it with the necessary resources to fulfill its contractual obligations, and was later countersued by the exchange in September of that year.
Neither lawsuit had been settled at the time of Mt. Gox’s insolvency, though CoinLab sources have indicated to CoinDesk that more legal developments were expected in the case prior to the exchange’s bankruptcy filing.

Upcoming hearing

The news comes amid a relatively quiet period in what has so far proved to be a chaotic case for the involved legal experts, regulators and creditors, many of whom lost substantial savings in the exchange’s demise.
However, new activity is to be expected later this month when on 17th June, Judge Jernigan will hold a hearing to determine whether Mt. Gox is formally granted Chapter 15 protection.
At the meeting, the Journal indicates that Mt. Gox officials will need to “prove a legitimate court proceeding is taking place in a foreign country” before securing protection.