“Bitcoin” Trademark Opposition 30-Day Extension Filed

An “intent-to-use” trademark application has been filed for the term “BITCOIN” to sell shot glasses and decanters.  An extension to oppose the Bitcoin trademark application has been filed and granted.  An automatic 30-day extension is granted by just requesting an extension and is available until December 11.

The trademark application by Urban Trend, LLC of California.  It appears a related company represented by the same attorney as the Bitcoin filing has had legal issues Hexbug intellectual property:   http://www.hexbug.com/news/2010/05/11/innovation-first-sues-urban-trend-for-infringing-intellectual-property-on-the-hexbug-nano-toy/

A Bitcoin trademark, even for goods and services unrelated to the currency is problematic.  Reports of domain names being rejected due to the parent company of Mt. Gox trademark Bitcoin trademark registrations in Europe and Japan.  Reports have indicated that some domain name registrations were blocked due to Bitcoin being on the ICANN Trademark Clearinghouse list.

Since Bitcoin is centralized nobody is in charge of protecting the “brand.”  Trademark registrations for Bitcoin without some other identifier could be very problematic to new or small Bitcoin businesses.  The Bitcoin Foundation discussed looking into these matters about 18 months ago but there seems to be no activity in this area.

A draft opposition notice has been developed and comments are requested.  The filing is due by January 10.

 

 

 

Bitcoin.me Video Released

The Bitcoin.me video has been released.  The video shows situations where Bitcoin users can use the currency where legacy systems sometimes fail.

http://Bitcoin.me

 

 

 

AC Bitcoin Acquires Bitcoin.me

Atlantic City Bitcoin has completed the acquisition of the “Bitcoin.me” web site.  This will be part of the Milly Bitcoin project to provide free support for Bitcoin users.  A professional production agency has been employed to develop assist with presentation of the site.  The “Bitcoin.me” site will have basic introductory material while MillyBitcoin.com will be for interactive support.  While the most common question is about how to buy Bitcoin and whether fractional Bitcoin can be purchased, questions are becoming more sophisticated.  Recent questions include how to set up web sites to accept Bitcoin and investments into alternate coins (Alt-Coins) which are Bitcoin clones with some of the parameters changed.

Other projects include HELP.org to provide assistance for non-profits to accept Bitcoin and BitcoinFood.com to answer the common complaint that people can’t use Bitcoin to buy food, Punk.org to provide information for musicians and artists to accept Bitcoin, and the Bitcoin Information Center at Bitcoins.info.  Other upcoming projects include BitcoinTicker.com to explain the various exchange rates and provide information about the various resources for monitoring the Bitcoin exchange market.  BitcoinSec.com will provide security best practices and is being developed by a Certified Information System Security Professional (CISSP).

 

 

FinCEN Issues Bitcoin-Friendly Ruling for Miners

rig

Milly Bitcoin’s Mining Rig

The US Department of Treasury, Financial Crimes Enforcement Network (FinCEN) has issues ruling that clears up an issue for Bitcoin mining.  The issue involves whether someone who mines Bitcoins for themselves can trade them for cash at an exchange or spend them directly without being classified as a Money Services Business (MSB) and register with FinCEN.  Many miners were concerned that the rules would require compliance with extensive regulations (see Jerry Brito, FinCEN explicitly stated in a personal letter that bitcoin miners need to register with FinCEN).  The rules could require miners to have things like an auditor on staff making it impossible for individuals to mine Bitcoins and stay within the regulations.

Atlantic City Bitcoin operates several ASICs miners at its facility in New Jersey and asked FinCEN to clarify the rules.  The owner of AC Bitcoin is a former federal employee who worked on anti-terrorism and security programs and took early retirement to work on Bitcoin.  According to the formal Administrative Ruling miners do not have to register with FinCEN as previously thought as long as they mine for themselves.  AC Bitcoin had frequent contact with FinCEN staff and pointed out that if FinCEN had required miners to register they would need to comply with the “Administrative Procedures Act” which would require them to consider public comments before making the requirement.

FinCEN ruled:

To the extent that a user mines Bitcoin and uses the Bitcoin solely for the user’s own purposes and not for the benefit of another, the user is not an MSB under FinCEN’s regulations, because these activities involve neither “acceptance” nor “transmission” of the convertible virtual currency and are not the transmission of funds within the meaning of the Rule. This is the case whether the user mining and using the Bitcoin is an individual or a corporation, and whether the user is purchasing goods or services for the user’s own use, paying debts previously incurred in the ordinary course of business, or (in the case of a corporate user) making distributions to shareholders. Activities that, in and of themselves, do not constitute accepting and transmitting currency, funds or the value of funds, are activities that do not fit within the definition of “money transmission services” and therefore are not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs…

FinCEN therefore concludes that, under the facts you have provided, Atlantic would be a user of Bitcoin, and not an MSB, to the extent that it uses Bitcoin it has mined: (a) to pay for the purchase of goods or services, pay debts it has previously incurred (including debts to its owner(s)), or make distributions to owners; or (b) to purchase real currency or another convertible virtual currency, so long as the real currency or other convertible virtual currency is used solely in order to make payments (as set forth above) or for Atlantic’s own investment purposes. Milly Bitcoin’s Mining Rig

The ruling goes on to discuss that other arrangements, such as mining contracts where mining is done on behalf of another party, may be classified as a Money Services Business depending on the circumstances.  The entire ruling is below and will be published at FinCEN’s web site in the near future.

 

 

 

 

 

Re:     Request for Administrative Ruling on the Application of FinCEN’s Regulations to Bitcoin Mining Operations

This responds to your letter of June 1, 2013, seeking an administrative ruling from the Financial Crimes Enforcement Network (“FinCEN”) on behalf of Atlantic City Bitcoin LLC (“Atlantic”), about Atlantic’s possible status as a money services business (“MSB”) under the Bank Secrecy Act (“BSA”). Specifically, you ask whether certain ways of disposing of the Bitcoins mined by Atlantic would make Atlantic a money transmitter under the BSA.

You state that Atlantic mines Bitcoins. You further state that the Bitcoins that Atlantic has mined have not yet been used or transferred, but that Atlantic may decide to use this virtual currency to purchase goods or services, convert the virtual currency into currency of legal tender and use the currency to purchase goods and services, or transfer the virtual currency to the owner of the company. You ask in your letter whether any of these transactions would make Atlantic a money transmitter under the BSA.

On July 21, 2011, FinCEN published a Final Rule amending definitions and other regulations relating to MSBs (the “Rule”).1 The amended regulations define an MSB as “a person wherever located doing business, whether or not on a regular basis or as an organized business concern, wholly or in substantial part within the United States, in one or more of the capacities listed in paragraphs (ff)(l) through (ff)(6) of this section. This includes but is not limited to maintenance of any agent, agency, branch, or office within the United States.”2

BSA regulations, as amended, define the term “money transmitter” to include a person that provides money transmission services, or any other person engaged in the transfer of funds. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.3 The regulations also stipulate that whether a person is a money transmitter is a matter of facts and circumstances, and identifies circumstances under which a person’s activities would not make such person a money transmitter.4

On March 18, 2013, FinCEN issued guidance on the application of FinCEN’s regulations to transactions in virtual currencies (the “guidance”).5 FinCEN’s regulations define currency (also referred to as “real” currency) as “the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance.”6 In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction. The guidance addresses “convertible” virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency.

For purposes of the guidance, FinCEN refers to the participants in generic virtual currency arrangements, using the terms “exchanger,” “administrator,” and “user.” An exchanger is a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency. An administrator is a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency. A user is a person that obtains virtual currency to purchase goods or services on the user’s own behalf.

The guidance makes clear that an administrator or exchanger of convertible virtual currencies that (1) accepts and transmits a convertible virtual currency or (2) buys or sells convertible virtual currency in exchange for currency of legal tender or another convertible virtual currency for any reason (including when intermediating between a user and a seller of goods or services the user is purchasing on the user’s behalf) is a money transmitter under FinCEN’s regulations, unless a limitation to or exemption from the definition applies to the person.7 The guidance also makes clear that “a user who obtains convertible virtual currency and uses it to purchase real or virtual goods or services is not an MSB under FinCEN’s regulations. FinCEN understands your letter to amount to a request to elaborate on this last statement in the specific context of a user that obtains the convertible virtual currency Bitcoin by mining.

How a user obtains a virtual currency may be described using any number of other terms, such as “earning,” “harvesting,” “mining,” “creating,” “auto-generating,” “manufacturing,” or “purchasing,” depending on the details of the specific virtual currency model involved. The label applied to a particular process of obtaining a virtual currency is not material to the legal characterization under the BSA of the process or of the person engaging in the process to send that virtual currency or its equivalent value to any other person or place. What is material to the conclusion that a person is not an MSB is not the mechanism by which person obtains the convertible virtual currency, but what the person uses the convertible virtual currency for, and for whose benefit.

FinCEN understands that Bitcoin mining imposes no obligations on a Bitcoin user to send mined Bitcoin to any other person or place for the benefit of another. Instead, the user is free to use the mined virtual currency or its equivalent for the user’s own purposes, such as to purchase real or virtual goods and services for the user’s own use. To the extent that a user mines Bitcoin and uses the Bitcoin solely for the user’s own purposes and not for the benefit of another, the user is not an MSB under FinCEN’s regulations, because these activities involve neither “acceptance” nor “transmission” of the convertible virtual currency and are not the transmission of funds within the meaning of the Rule. This is the case whether the user mining and using the Bitcoin is an individual or a corporation, and whether the user is purchasing goods or services for the user’s own use, paying debts previously incurred in the ordinary course of business, or (in the case of a corporate user) making distributions to shareholders. Activities that, in and of themselves, do not constitute accepting and transmitting currency, funds or the value of funds, are activities that do not fit within the definition of “money transmission services” and therefore are not subject to FinCEN’s registration, reporting, and recordkeeping regulations for MSBs.8

From time to time, as your letter has indicated, it may be necessary for a user to convert Bitcoin that it has mined into a real currency or another convertible virtual currency, either because the seller of the goods or services the user wishes to purchase will not accept Bitcoin, or because the user wishes to diversify currency holdings in anticipation of future needs or for the user’s own investment purposes. In undertaking such a conversion transaction, the user is not acting as an exchanger, notwithstanding the fact that the user is accepting a real currency or another convertible virtual currency and transmitting Bitcoin, so long as the user is undertaking the transaction solely for the user’s own purposes and not as a business service performed for the benefit of another. A user’s conversion of Bitcoin into a real currency or another convertible virtual currency, therefore, does not in and of itself make the user a money transmitter.9

FinCEN therefore concludes that, under the facts you have provided, Atlantic would be a user of Bitcoin, and not an MSB, to the extent that it uses Bitcoin it has mined: (a) to pay for the purchase of goods or services, pay debts it has previously incurred (including debts to its owner(s)), or make distributions to owners; or (b) to purchase real currency or another convertible virtual currency, so long as the real currency or other convertible virtual currency is used solely in order to make payments (as set forth above) or for Atlantic’s own investment purposes. Any transfers to third parties at the behest of sellers, creditors, owners, or counterparties involved in these transactions should be closely scrutinized, as they may constitute money transmission. (See footnotes 8 and 9 above.) And of course, should Atlantic engage in any other activity constituting acceptance and transmission of either currency of legal tender or virtual currency, it may be engaged in money transmission activities that would be subject to the requirements of the BSA.

This ruling is provided in accordance with the procedures set forth at 31 CFR Parti010 Subpart G. In arriving at the conclusions in this administrative ruling, we have relied upon the accuracy and completeness of the representations you made in your communications with us. Nothing precludes FinCEN from arriving at a different conclusion or from taking other action should circumstances change or should any of the information you have provided prove inaccurate or incomplete. We reserve the right, after redacting your name and address, and similar identifying information for your clients, to publish this letter as guidance to financial institutions in accordance with our regulations.10 You have fourteen days from the date of this letter to identify any other information you believe should be redacted and the legal basis for redaction.

 

1  Bank Secrecy Act Regulations – Definitions and Other Regulations Relating to Money Services Businesses, 76 FR 43585 (july 21, 2011).

2  31 CFR § 1010.100(ff).

3  31 CFR § 1010.100(ff)(5)(i)(A) and (B).

4  31 CFR § 1010.100(ff)(5)(ii).

5  FIN-2013—G001. “application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies,” March 18, 2013.

6  31 CFR § 1010.100(m).

7  The definition of “money transmitter” in FinCEN’s regulations define six sets of circumstances – variously referred to as limitations or exemptions – under which a person is not a money transmitter, despite accepting and transmitting currency, funds or value that substitutes for currency.  31 CFR § 1010.100(ff)(5)(i)(A) – (F).

8  However, a user wishing to purchase goods or services with Bitcoin it has mined, which pays the Bitcoin to a third party at the direction of a seller or creditor, may be engaged in money transmission. A number of older FinCEN administrative rulings, although not directly on point because they interpret an older version of the regulatory definition of MSBs, discuss situations involving persons that would have been exempted from MSB status, but for their payments to third parties not involved in the original transaction. See FIN-2008-R004 (Whether a Foreign Exchange Consultant is a Currency Dealer or Exchanger or Money Transmitter – 05/09/2008); FIN-2008-R003 (Whether a Person That is Engaged in the Business of Foreign Exchange Risk Management is a Currency Dealer or Exchanger or Money Transmitter – 05/09/2008); FIN-2008-R002 (Whether a Foreign Exchange Dealer is a Currency Dealer or Exchanger or Money Transmitter – 05/09/2008).

9  As noted in footnote 8 above, however, a user engaging in such a transaction, which pays the Bitcoin to a third party at the direction of the counterparty, may be engaged in money transmission.

10  31 CFR §§ 1010.711-717.

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Beware the API Key in Yor Online Bitcoin Account

Many new users who open Bitcoin online accounts with exchanges or online wallet programs do not fully understand the ramifications of the “API Key.”  API stands for “Application Programming Interface.”   This key allows for programs to interface with your account.  For instance, if you have a computer program that makes automatic trades to your account.  Even if you have added security to log into your account, such as 2-factor authentication where a second password is sent via text to your smart phone or a hardware key is needed to be plugged into a USB port the API key will bypass this.

One reported case involved someone who created their account without 2-factor authentication because they had not yet made deposits.  Once they made deposits they enabled 2-factor authentication.  However, someone had already hacked their way into the account and created an API key.  They then proceeded to make withdrawals.  From the perspective of the exchange operator they cannot tell if is was actual theft or a scheme by the account holder to try to get a refund they do not deserve.

In another case someone had created an API key when they opened their account and forgot about it.  Now the key was somehow compromised and it was used to bypass the 2-factor authentication protection they had on their account.  It would be prudent for exchange operators to provide extra confirmation steps before an API key is created so the users is better informed of the risks.

 

 

 

Bitcoin Table at Philly Punk Rock Flea Market Saturday


Atlantic City Bitcoin will be offering free Bitcoin support at the Philly Punk Rock Flea Market on Saturday, December 14.   Most Bitcoin events are geared towards techies and entrepreneurs.  This event will  give members of the public the opportunity to ask questions about Bitcoin while they do some Christmas shopping.  Atlantic City Bitcoin operates MillyBitcoin.com that provides free online support.  A wide range of questions ranging from using, accepting, investing, the what the future may hold have been submitted to the web site.  As questions come in the answers are provided in FAQ’s and articles at CoinText.com.  The most common question involves buying a fraction of a Bitcoin.  Since Bitcoin is completely digital, fractions are used and a whole Bitcoin has no special significance.  Physical Bitcoins will also be on display.  Several Bitcoiners have signed to attend via Meetup.com.

The event features more than 500 local artists, entrepreneurs and vendors of all-things-interesting, the flea market represents a wide cross-section of the city’s alternative culture.  While the event is labeled as “punk rock,” it is by no means restricted.  The event won a Reader’s Choice award from the Philly City Paper in 2013.  A $3 admission fee goes to support the First Unitarian Church and other proceeds from the event are being donated to Skateistan.org to help young girls in Pakistan learn how to skateboard.

http://www.meetup.com/Philly-Bitcoin-Society/events/142077592/

http://www.r5productions.com/event/364489-punk-rock-flea-market-now-2-philadelphia/

 

The Punk rock flea market in Philadelphia brings together vendors, vinyl and the city's hipster crowd.

 

 

 

Misunderstandings Leading to Increased Bitcoin Volatilty

hile there are many contributing factors to Bitcoin’s price volatility in relation to established government currencies one contributing factor is a misunderstanding of Bitcoin.

Bitcoin is a currency, a “commodity,” and payment system.  Many investors only see the commodity aspect and often point to “no intrinsic value.”  To an investor there is no “intrinsic value” because you cannot hold it or sell it if the value plummets.  For instance, even if the gold market crashes it still has value to make electronics and jewelry.  “Commodity” is in quotes because Bitcoin does fit the exact definition of a commodity but it is being discussed by regulators during recent US Senate hearings.

Non-investors often say Bitcoin does have intrinsic value as a payment system and a protocol.  For instance, the TCP/IP protocol has an “intrinsic value” in that it is used to operate the Internet.  The value of Bitcoin is in its use as a disruptive technology to displace outdated legacy services.  This disconnect is the result of different perspectives of the definition of “intrinsic value.”

Bitcoin is an experimental protocol.  Many discussions of Bitcoin compare it to established payment systems and conclude Bitcoin will be a failure.  While there are many issues with Bitcoin it is too early to make final conclusions about how it will pan out.  Someone looking at the Internet in the early 90’s would see rudimentary browsers that crash all the time and no search engines, no flash, no streaming video, no database-driven sites, etc.  If you ever sent your credit card info to a web site your funds would likely be stolen, and many businesses refused to have web sites because they were concerned about being associated with porn.  Some groups would claim that no advertising would be permitted on the Internet because it was designed for research collaboration.  Others claimed the Internet was for circumventing “real world” laws and used the Internet for all sorts of illegal things.  None of these issues, many of which still exist today, resulted in a “failure” of the Internet.

Exaggerations create false expectations.  Many people exaggerate the Bitcoin economy.  For instance, it is often stated that there are many thousands of merchants accepting Bitcoin.  While it may be technically true that thousands have signed up to accept Bitcoin the actual number of businesses selling things is substantially less.  For instance, BitcoinFood.com is a site maintained by Atlantic City Bitcoin.  It you exclude local places that accept Bitcoin the number of places accepting Bitcoin for mail order food is less than 50 for the entire world.  Of course this was probably less than 5 a year ago.  When you strip away all the hype over the exchange rate volatility Bitcoin is actually experiencing essentially a linear and steady growth.  Some misinterpret the overheated price and hype bubbles as a sign that Bitcoin has no underlying value at all and compare it to things like Beanie Babies.

Other exaggerations and misinterpretations include claims that Bitcoin will replace all currencies, that Bitcoin will cause the failure of central banks/the federal reserve/governments and so on, or that Bitcoin is solely as a tool to create “anarchy.”  Of course there is no way to predict how these things will pan out but those that focus on these hyperbolic issues rather than the how the technology can be used to disrupt current services often leads to misinterpretations and misunderstandings.

The Bitcoin price is a bubble, on top of volatility, on top of  a steady increase.  Bubbles are being caused by hype and misunderstandings, volatility is cause by lack of liquidation among exchanges, and the steady increase is due to the usefulness of the technology.  The volatility is often cites as a problem with merchants accepting the currency without considering that the problem may go away when liquidity is available.

Successful decentralized coin systems are not easy to launch.  Anyone can launch a new coin system since the software is based on open source and is freely available to anyone.  Hundreds of such systems have been launched (see CoinChoose.com).  However, a new systems takes a critical mass of users, miners willing to process the transactions, and merchants willing to accept the coin.  It is possible one of these systems will overtake Bitcoin in popularity but the chances of this are limited since Bitcoin users could decide to adopt some feature of these alternate coins if advantageous.  If Bitcoin does get replaced in popularity by some other system it would most likely be a system that is substantially different rather than one of these knock-offs.

Also see

Common Bitcoin Misconceptions – Great for new users and press reporters.

 

 

Considerations for Investing in Virtual Currencies Other than Bitcoin

any questions have arisen lately about investing in virtual currencies other than Bitcoin.  This issue can get somewhat complicated and a few risks need to be understood:

Decentralized vs. Centralized.  Bitcoin is decentralized, meaning no central authority or bank, controls the supply.  It is controlled by people who run the software.  Centralized coins, like Amazon coin, are controlled by the central authority or company that operates the coin.  In this case the central authority controls the supply.  For instance, Ripples (XRP), is a centrally controlled currency operated by OpenCoin, Inc.  Currently, the only use of XRP’s to facilitate transactions on the Ripple system.  An investment in XRP is more like an investment in OpenCoin, Inc.

Alt-Coins.  This is the terms given to coins based on the Bitcoin software.  Since Bitcoin is open source anyone can take the code, change some things, and create another coin system.  New coins systems get created all the time (see CoinChoose.com).  Generally, these coins depend on the Bitcoin developers to put out new versions of the software and they adapt it to whatever parameters they use.  If any of these coins were to overtake Bitcoin in popularity they would need their own developers.

Proof of Work, Hashing Rate, and Difficulty.  The security of decentralized systems depends on the “proof of work” algorithm and the amount of computer power to “mine” these coins.  Some coins use different proof of work algorithms so their hashing rate cannot be compared one-to-one.  The “difficulty” is a measure of how difficult a problem is to solve.

One scenario that has happened is that many people will start mining a specific coin, the hashing rate will rise and the difficulty goes up.  If the exchange price of the coin drops for some reason they trade their coins and move their mining equipment to another coin.  Now the difficulty is so high it takes weeks to solve the next section and all transactions stay in limbo.  Meanwhile, they sold off many coins and the value goes to essentially zero since it is essentially a non-functioning system.

Another scenario that has happened is a “51% attack” which is where one entity has a majority of the hashing power.  They create their own block chain ledger and create s situation where they can spend the same coins twice.  Or they can simply disrupt the whole system by delaying transactions.

Alt-coins replacing Bitcoin in popularity.  Some other coin could replace Bitcoin as the most popular virtual currency.  However, if one of these Alt-coins does something better than Bitcoin it is possible that Bitcoin users could adopt this change within the Bitcoin system rather than switching to another coin.  It remains to be seen what will happen.

Availability of exchanges.  Being able to exchange these alt-coins also depends on exchanges willing to exchange the coins.  Currently, these coins, if they are exchanged, may depend on one or two exchanges.  Of course Bitcoin was the same way when it started and still is to a certain extent.

Malware.  Some users report being infected with malware from downloaded alt-coin software.  One user reported that one program used a key logger.  This logs every key stroke and sends the information back to the attacker.  The information was used to steal funds from their various wallets.  Do not load this software on a computer where you have Bitcoin stored or do Bitcoin transactions or other important things, such as accessing your bank account.

 

 

Considerations When Investing in Bitcoin

Investing in Bitcoin has become all the rage in recent days.  It could be described as a bubble on top of volatility on top of a steady increase.  Keep in mind that Bitcoin can be used as a payment system and the volatility is only important if you hold bitcoins.  The price does not matter if the Bitcoins are converted immediately after transactions.  If you do want to invest here are a few considerations:

-New investors have entered the market pushing and many people have taken notice.

-Investment by Chinese savers looking for store of value has increased.

-US Congressional hearings went well and pointed out the innovation potential of Bitcoin.

-Many who previously panned Bitcoin are starting to realize it is an underlying protocol and services can be built on top of it.

-Only a tiny percentage of potential users are using Bitcoin now.  Gains can be large and dramatic.

There are many people who never heard about Bitcoin before are inquiring about investing.  Discussion boards are full of discussions about a “new paradigm” and some are advising people to take out loans to buy more now before it goes up even further.  More cautious advice is to invest a small amount so a huge gain would be great but a small loss won’t matter much.  Some claim that the bubble was the jump to $900 and when it went back to $500 it was over and the rest is just a normal increase..

Before investing a significant amount you should consider a few more things:

-Each time the market has increased like this before it corrected violently downward.  However, it has always come back up and exceeded previous highs in a relatively short amount of time.

-Bitcoin is still in its experimental stages and the software is still in “beta.” (version still starts with a “0”).

Professional investors are involved who have worked on Wall Street.  Max Keiser, a big Bitcoin proponent and investor, worked on Wall Street for years and has a patent involving virtual currency exchanges.  They know what they are doing when it comes to investing.

-Depth in these markets is small.  This means a small number of investors with large holdings can sway the market.  Large changes in the price can occur in minutes any time of the night or day.  There is mostly no regulation to prevent market manipulation.

-Bitcoin is currently limited to about 7 transactions per second.  Visa/MasterCard can handle thousands of transactions per second.

-While the number of merchants is increasing, it is still very small.  BitPay has 12,000 merchants but it is difficult to find more than a few hundred that sell products and the selection is often thin.  China has only a handful of merchants who accept Bitcoin.  BitPay Directory | CoinMap.org | BitcoinFood.com

Profits and losses can be swift in this market.  Be careful!

 

 

 

 

BitcoinFood.com Launches with Free Listings

One of the most common complaints about Bitcoin is “I can’t take it the supermarket and buy food with it.”  Well, now you can at BitcoinFood.com.  The site offers free listings to anyone selling food products for Bitcoin.  A link to CoinMap.org is also provided which shows a map with local businesses who accept Bitcoin for those that want an immediate meal rather than mail order.  Bitcoin is great for small businesses and many unique items and specialty products are available for Bitcoin.

bitcoinfood