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Piggy Bank
A group of Mt. Gox creditors have not given up on bold plans to revive the defunct bitcoin exchange. The creditors are already involved in two proposed class-action lawsuits against Mt. Gox and their lawyers claim to have reached a deal with US-based investors to prop up the exchange.Details of the proposed settlement were filed with a District Court in Chicago on Monday. Under the proposed agreement the creditors would get a 16.5% stake in the ‘new’ Mt. Gox, while the investor group, Sunlot Holdings, would take over the company.The lawyers are expected to present their case before a judge on Thursday, but hurdles remain.More approval necessarySince Mt. Gox is incorporated in Japan and Japanese authorities are overseeing the bankruptcy proceedings, they would also have to green light the proposed deal.In addition, the proposal is coming from US and Canadian creditors involved in the proposed class actions and it is unclear whether other Mt. Gox creditors around the world would agree to it.The hope is that the proposed deal would halt liquidation proceedings, which commenced last week. The whole process is expected to take several months and the first creditor meeting is scheduled for 23rd July, giving creditors ample time to put together their proposal and get the necessary support from fellow creditors, bankruptcy trustees and authorities.This is not exactly a new idea. Creditors and investors have been mulling similar initiatives for a while. However, none have yielded tangible results, at least not yet.In everyone’s interest?Sunlot Holdings has issued a statement arguing that a revival plan would help creditors get back more of their assets than a simple liquidation. The company’s chief executive John Betts also believes it would be a good move for the community in general, as it would send the message that bitcoiners look after their own.Sunlot Holdings also enjoys the support of Jed McCaleb, the original founder of Mt. Gox, as well as former Mt. Gox CMO Gonzague Gay-Bouchery. McCaleb already holds a 12% stake in the company, so he has a vested interest in putting Gox back on its feet.Creditors also stand to gain from the proposed deal. Liquidation can be a very lengthy process and would also derail the proposed class action suits.Jay Edelson, the lawyer behind one of the proposed class actions, told Market Watch that liquidation would “have been a disaster” for the class action, arguing:“It would have taken significant time, the assets would have been depleted, and the US consumers would have gotten pennies on the dollar.”Not giving upSunlot Holdings originally floated the idea of a Mt. Gox revival back in February, following talks with the exchange’s embattled CEO Mark Karpeles. The firm has already filed a comprehensive rehabilitation proposal with the Tokyo District Court, outlining its plans.The proposed plan would give Sunlot Holdings control of Mt. Gox and cost $8m to implement. Sunlot claims it already enjoys the support of more than 70% of Mt. Gox creditors.Creditors would receive some compensation, but since Sunlot Holdings puts the exchange’s outstanding debt balance at $421m, it is clear that they can’t expect much in the way of hard cash. They would, though, stand to gain a substantial stake in the new company – with liquidation they would not.bankruptcyMt. GoxSunlot
Original author: Nermin Hajdarbegovic

MIT
A couple of Massachusetts Institute of Technology (MIT) students have managed to raise $500,000 in bitcoin for a curious cryptocurrency project.The pair intend to distribute the money to every single MIT student this fall: each undergrad will receive $100 in the digital currency.The project was launched by Dan Elitzer, the founder and president of the MIT Bitcoin Club, and Jeremy Rubin, a sophomore studying computer science. Their goal is simple – to create an ecosystem for digital currencies at MIT.Cryptocurrency research in a tech savvy micro-ecosystemIt’s not just another bitcoin-related publicity stunt. Elitzer and Rubin have already prepared a range of activities and they plan to work with professors and researchers in an effort to study how MIT students will use their bitcoins once they ‘opt in’.While it sounds like a fun project, the team have serious aims to spur academic and entrepreneurial activity at the campus. With its thousands of tech-savvy students, backed by world-class teachers and researchers, MIT is a prime location to launch such a project.Rubin and Elitzer say they want to help MIT continue its long tradition as the preeminent educational institution at the forefront of emerging technologies.The funding is coming from MIT alumni and the bitcoin community. The team has already raised more than $500,000, which is enough to cover the cost of the project and the distribution of $100 in bitcoin to all 4,528 enrolled at the institution.Will MIT become the biggest BTC playground yet?The team hopes to distribute the bitcoins this fall, making the MIT campus the first place in the world with widespread access to the currency.As far as the general public goes, bitcoin adoption remains very limited. However, the college campus could soon see an influx of students eager to spend their free bitcoins. Rubin added:“Giving students access to cryptocurrencies is analogous to providing them with internet access at the dawn of the Internet era.”The organizers admit they still don’t know how students will use their bitcoin, but that’s largely the point. The programme offers a unique opportunity to study behaviour, spending habits, identify potential problems and alternative uses for bitcoin – no strings attached.Best of all, we are talking about MIT students, who know a thing or two about tech and innovation.Marcio Jose Bastos Silva / Shutterstock.comMITUSA
Original author: Nermin Hajdarbegovic

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A single bitcoin broke the price of an ounce of gold five months ago. Now, it’s worth less than half that – and, of the two, it’s bitcoin’s price that’s bouncing around the most.For people trying to evaluate bitcoin’s potential against other commodities, its relative price volatility could be a worry or an opportunity, depending on your appetite for risk. So, how closely can we map bitcoin’s volatility against other commodities?Not very closely, argues Kirill Gourov, Director of Finance for Blocktech, a new company that creates open-source block chains for industries in need of disruption. He recently wrote a paper that explored whether there was an intrinsic value for bitcoin.Gourov pointed out that it is difficult to find a direct correlation between bitcoin and other commodities:“There may be a correlation between commodities and bitcoin because people consider both to be hedges for macro risk, but whereas oil might go up 5-10% because of some legislative issue in Europe, the price of a bitcoin might spike up 25%, then immediately drop by 30% because someone cashed out into the market.”Copper’s recent price drop looks dramatic, for example, but it represented a 9% decrease in its value. That may be considerable, but it’s hardly in line with some of bitcoin’s more dramatic yo-yoing.In five or 10 years, when the market is more developed, trends will be more prevalent and will force bitcoin to spike less, Krill suggested. But, today, the market is too easily manipulated.Physical vs virtualIf bitcoin’s age is one factor that stops it being correlated easily with other commodities, then are there others?One of the issues separating bitcoin from other commodities is physicality, argues Antony Lewis, who works in business development at itBit.Most other commodities are used and transformed into something else, which drives certain behaviours, pointed out Lewis, who used to trade interbank foreign exchange at Barclays:“For example, people buy copper to use in construction, power, and electronics. People buy oil to use to transform into fuel which is burned. Once used, gone.”Conversely, he says, virtual currencies are bought either as a store of value or as a payment mechanism putting them in a different category to conventional commodities.Correlations existLet’s not write bitcoin off as entirely separate from the commodities market, though, said George Samman, Chief Operations Officer at BTC.SX, which offers derivatives services for bitcoin traders.There are correlations today between bitcoin and at least one other commodity, Samman said, but they’re only obvious if you turn them on their head. They are negative correlations, and we see them particularly between bitcoin and gold. When bitcoin goes up, gold falls, and vice versa, he suggested.Samman pointed to longer-term pricing for evidence of this effect. For example, when bitcoin rose dramatically at the end of last year, gold can be seen to fall (see chart).The linear chart shows bitcoin’s price from around the time that it spiked, shortly after the financial crisis in Cyprus last year. However, the digital currency was showing slight gains on gold as far back as 2011, said Samman.Bitcoin’s price doesn’t seem to cross that of gold because the chart isn’t granular enough, but it did. That crossover happened for a period of hours, and we’re plotting closing prices at two-day intervals here.Bitcoin vs Gold PricingGold’s movement in relation to bitcoin might not seem that pronounced, he said, but don’t be deceived. A $10 move in bitcoin wouldn’t show clearly in a long-term chart because of its significant moves later on; furthermore, gold’s high value makes it difficult to spot smaller price moves.Gold has been moving back up since the beginning of the year, while bitcoin has been going down, Samman added, which is clearly visible on the graph. Since then, gold has trended downwards, while bitcoin has been “semi-stable” in the mid-$400 range, he said.Samman admitted, though, that bitcoin has “bounced around” in that $400-$500 window, as would be natural for a young, relatively thinly-traded asset influenced by events such as the suspension of bitcoin trading in China by certain banks, and the perceptions around those events.Fear assetsThe link between bitcoin and gold makes sense. When the market flies from bitcoin, it has to go somewhere, and the argument goes that gold gets some of that action.If you see negative correlations in this chart, then why do they exist? It’s because Gordon Gecko was only half right. Greed isn’t the only factor driving financial markets: the other is fear.ItBit’s Lewis calls gold a ‘fear asset’, and said that in time, it will make sense to compare bitcoin against the VIX.Also known as the ‘fear index’, the VIX is the colloquial name for the Chicago Board Options Exchange Market Volatility Index. It is a weighted blend of 30-day options across the S&P 500 index, enabling people to use it as a broad measure of volatility over the coming month. In short, when markets get wild, the VIX goes up.In the meantime, Samman is waiting for the time when he can more easily compare bitcoin’s activities in a broader context, outside of commodities. He likes exploring intermarket dynamics, evaluating the performance of different asset classes such as equities, bonds, and commodities, in relation to one another.What about the longer-term opportunities for bitcoin? While we read the market’s entrails looking for relatively short-term correlations now, will bitcoin and other commodities draw closer over the years?“Some people believe we are in a commodity supercycle which began around 1990, supercycles generally last 30 years, give or take, if thats the case we are likely to see another up leg in this cycle, and I think it will be caused by inflationary events,” Samman said of long-term cycles in the commodity markets.Built-in scarcityIn particular, the tendency towards quantitative easing – central banks creating more money – and the spectre of rising interest rates come to bear here. “This all bodes well for bitcoin to spike again as well,” he argued.Some also point to correlations between the price of bitcoin throughout its young life, and the longer-term price of gold, potentially supporting theories of long-term similarities.“Whereas oil might go up 5-10% because of some legislative issue in Europe, the price of a bitcoin might spike up 25%”Scarcity helps drive up the price of a commodity. Food prices rise when a drought chokes off supplies, for example, and bitcoin has its scarcity built in, Samman said, adding.“The same can be said about bitcoin and its finite amount which is capped by mining algorithms that get harder and harder.”This scarcity is both a known and unknown quantity in bitcoin. Scarcity has a big impact on price action, which is caused by big disparities in supply and demand. Conventional commodities can be moved by external events that affect demand and supply, such as bad weather (wheat), or growing unrest in Ukraine (oil), for example.With bitcoin, there is a base level of supply which is relatively known, because it is underpinned by the mining community, which produces them at a predefined rate of 3,600 coins per day.However, bitcoin’s algorithmically coded scarcity isn’t the only part of the equation; just as with commodity markets, other factors come into play.With institutional miners producing bitcoins, and with large funds holding significant percentages of the digital currency, it’s hard to predict what that supply will look like in the future, and when people will begin letting more bitcoins out onto the market.The same is true on the demand side. “Demand is the unknown here. We are hearing of many millions of dollars being lined up to buy bitcoin when the time is right,” pointed out Lewis.Looking for liquidityIf and when the volume of bitcoin trading increases substantially, we’ll see bitcoin become more liquid. Liquidity dampens volatility, because there is more of an asset moving through the system.This in turn makes it harder for people to move the market substantially with relatively small trades, or for events to move the market by spooking enough inexperienced investors into knee-jerk reactions.One thing that will help here is the build-out of more established, reliable exchanges to provide a base level of reliability and choice to the market. The other is the building up of more sophisticated services on those exchanges, such as derivatives trading.We’re starting to see markets for bitcoin derivatives emerge, such as BTC.SX. More will come, said Gourov, although the market is too immature to support complex trades yet. He explained:“The market is neither liquid nor mature enough to handle anything like a futures contract. I would imagine the fees would be so high on a contract that you might as well just purchase the underlying bitcoins right now.”However, he thinks that will change: “There are several companies creating products and platforms to facilitate this as I type.”Even when its price volatility smoothes out, though, the chances are that bitcoin will remain a distinctly different animal from many other assets, making it hard to see correlations with lots of commodities.For now, the cryptocurrency is a young, idiosyncratic asset all its own. As the honey badger of money, it tends to be a solitary animal, unaccustomed to moving with a herd.Graphs image via Shutterstockcommoditiespricesvolatility
Original author: Danny Bradbury

yelp
San Francisco-based merchant directory provider Yelp has officially announced a new functionality that allows bitcoin-accepting merchants to promote awareness of the payment method via its platform.Though rumors of the new feature have circulated since as far back as 10th April, this was the first time that the company confirmed the news.Wrote Yelp in its official blog post:“We’re constantly thinking about how to make our business attributes more useful for consumers and businesses. That’s why we’re excited to announce that as of today, we’re adding a new attribute: ‘Accepts Bitcoin: Yes’.”Business owners that accept bitcoin can now update their profile on biz.yelp.com to take advantage of the new attribute.Finding the new featureThe new attribute will now be visible in Yelp profiles under the “More business info” section of all applicable entries.Other attributes in this section denote whether the business accepts credit cards or has available parking.yelp, bitcoinAustin book store adds featureOne Austin, Texas-based bitcoin merchant was quick to embrace the feature, as he says he had long lobbied for Yelp to promote bitcoin.Harlan Dietrich, owner of Brave New Books, has been accepting bitcoin for 20 months, but only more recently started using Yelp. Dietrich says that about a year ago he told the company he would refrain from getting a business account until Yelp accepted bitcoin, though he did create an account before this most recent announcement.He expressed hope his initial holdout had an influence on this latest update, saying:“I think I did plant a seed somewhere in the office.”From the perspective of the ecosystem, Dietrich says he’s happy that Yelp has introduced the new attribute, as he says it’s likely to be seen by the platform’s tech-friendly users.He added:“I think it’s great that we’re specifically targeting [early tech adopters] through a service like Yelp.”‘Buzz about bitcoin’Yelp’s blog post also came with some additional information for those who may be unfamiliar about bitcoin.The company, which has a market capitalization of nearly $4bn, lauded bitcoin as a “fast, secure and low-cost digital payments” tool that enables businesses to conduct transactions without storing sensitive user data.Added the company:“We’re hopeful the introduction of the Bitcoin attribute will provide yet another way for consumers to connect with great local businesses.”Image via Yelpmerchantsyelp
Original author: Pete Rizzo

mail, package
Buyers of digital currency mining hardware developer KnCMiner’s modified Jupiter mining product are reporting serious problems with shipments.The company originally offered the “Super Jupiter” as a replacement for customers that didn’t want to wait to receive the company’s next-generation Neptune line of miners.Disgruntled customers took to the company’s forum to voice their frustrations, with some reporting what appeared to be broken or incorrectly constructed components, including fans and heat sinks. Others said that some of the ASICs arrived malfunctioning or simply not working.In response, the company has publicly apologized and announced that it will issue replacement cards to affected buyers.Said the company in a 28th April blog post:“So last week we really messed up. We sent out products to our customers which arrived broken, damaged and quite frankly unusable.”The company went on to outline its next steps, which include a rush order for new cards and the production of an assembly video to assist buyers in fixing their Jupiter units. Additionally, KnCMiner is not requesting that the modified Jupiters be returned.KnCMiner said:“We will simply assume that every card was damaged in shipment even if it arrived undamaged. We will send out to every customer who had a 3TH Jupiter or several already arrive, enough cards to replace their entire collection.”Problematic productsAccording to KnCMiner, the issue lies in substandard shipping practices during transit. Rough handling may have exacerbated problems with the design that many forum users said was flawed to begin with.In a series of forum posts, users argued that the interior hard foam inside the ASIC case failed to provide adequate clamping. Another forum member suggested that plastic plugs holding some of the components in place were insufficient for normal operation.One member on the Bitcoin Talk forum shared pictures of his modified Jupiter rig. The photos show that the thermal paste applied to the ASIC heatsinks had failed. In its statement, the company made no mention of problems with improperly applied heatsinks or other non-card components.Issues in broader mining ecosystemKnCMiner is not the only mining product manufacturer that has run into recent problems.Butterfly Labs issued a notice saying that it had delayed its 28nm Monarch mining ASIC until April, citing problems with some of the product’s components. At the time, the company said that the delay would last for approximately four weeks.There aren’t just problems in the hardware sector of the mining world, however.Last week, Google pulled five apps from its Google Play store after revelations that mining malware had been disguised as downloadable wallpaper apps.Damaged package image via Shutterstock.ASICkncminerminer
Original author: Stan Higgins

bitcoin, dogecoin
As message boards and news articles routinely show, bitcoin and dogecoin have attracted markedly different crowds to the digital currency community.Bitcoin fans routinely allege that dogecoin’s very existence undermines what they consider the overall message of digital currency movement – that consumers should be freed from archaic monetary systems, while dogecoin users are quick to point out that bitcoin users can be overly focused on the value of bitcoin against the dollar.Now, two new graphics have emerged that use the words of the communities’ own reddit users to illustrate the differences between the respective groups.Popular terms like “people”, “money” and “time” dominate the bitcoin subreddit, while in the dogecoin subreddit, words like “dogetipbot”, “verify” and “help” are the most common.Bitcoin emphasizes financial systemsThe bitcoin subreddit word cloud includes a wealth of terms related to existing financial systems, suggesting that bitcoin enthusiasts want to see BTC disrupt the global financial system.That, in turn, might cause its price to continue upward. Source: RedditSource: RedditWords like “transaction”, “government” and “bank” show that bitcoin fans on reddit are talking about BTC in terms of how it could replace fiat systems of monetary value.Dogecoin focuses on givingBy contrast, the dogecoin subreddit word cloud includes a number of terms related to gratitude. “Help”,” thanks” and “community” are some of the more popular expressions used. SourceSource: RedditThe dogecoin community has also created a lingo all of its own with terms such as “shibe”, “wow” and “moon” prominently appearing on the chart.This suggests that dogecoin has created a unique community in the short time since its December launch.Bitcoin versus dogecoin?It’s hard to put bitcoin and dogecoin in direct competition with one another. Yes, they are based off of the same core software, but they were built for two different reasons. Bitcoin appeared because of distrust over government controlled money, which has been the subject of conversations on its subreddit.Dogecoin, on the other hand, was started as a joke. No one would have ever thought that it would become so popular, even to the amazement of its creator, Jackson Palmer. And the more carefree conversation in the dogecoin subreddit is a reflection of that.What do these charts tell you? Tell us below.Image via 9gag.combitcoin vs dogecoincommunitygovernmentJackson Palmermoney
Original author: Daniel Cawrey

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A Netherlands-based user of the now-defunct online black market Silk Road has plead guilty to a federal drug conspiracy charge.Cornelis Jan Slomp admitted to importing controlled substances into the US and distributing 104 kilograms of MDMA, 566,000 ecstasy pills and four kilograms of cocaine, among other substances, globally from March 2012 to August 2013.Slomp was arrested at the Miami International Airport in late August of last year, when he allegedly sought to meet with business partners who were looking to purchases his Silk Road operations and customers.Gary Hartwig, special agent-in-charge of Homeland Security Investigations in Chicago, called Slomp a “prolific vendor on Silk Road” and went on to issue a stern warning to potential wrongdoers following in his footsteps.Said Hartwig:“Those who mistakenly believe the anonymity of the Internet – even on the Deep Web – shields them from scrutiny are finding out they can’t evade detection in cyberspace.”However, perhaps most interesting about the story is that the government has already sold more than $3m in the proceeds from Slomps’ crimes, Assistant US Attorney Randall Samborn told CoinDesk, though he declined to offer any further specifics about the sale.If convicted, Slomp faces up to 40 years in prison and a maximum fine of $5m.More detailsCourt documents suggest that Slomp, who used the vendor names “UnderGroundSyndicate” and “BTCMaster”, conducted more than 10,000 transactions on the black market website, earning 385,000 BTC in the process.The investigation against Slomp began as far back as April 2012, when U.S. Customs and Border Protection officers in Chicago seized an envelope containing MDMA.As a result of the ensuing investigation, during which 100 similar envelopes were discovered, Slomp was eventually determined to be the individual mailing the illegal substances.More detailsUS and Dutch law enforcement officials have been among the more active international groups at coordinating the arrest of bitcoin-based black market users.Earlier this January, a 25-year-old US citizen was arrested after allegedly mailing a semi-automatic pistol to Dutch Law enforcement officials.Slomp is among the first to plead guilty to charges in such cases. Most notably, alleged Silk Road mastermind Ross Ulbricht plead not guilty to charges against him this February.More more on that ongoing case, read our most recent report here.Package of narcotics via ShutterstockcrimeSilk RoadUSA
Original author: Pete Rizzo

Honest brew beerUK-based online beer platform Honest Brew has added bitcoin to its list of payment methods.The company specialises in craft beers from its own and guest breweries – including quirky labels like Weird Beard, BrewDog and Pressure Drop – and is now very likely the first online alcohol merchant to sell directly to the bitcoin-wielding public.Andrew Reeve, Honest Brew’s CEO, said:“As the first online platform [for alcoholic products] to offer payment by bitcoin, we are hoping the community gets behind it.”Heady brewHonest Brew was started up in London by Reeve, a New Zealander who had long been a fan of both home-brewed beer and bitcoin.In 2013, Reeve graduated to commercial-scale brewing at Late Knights Brewery in South London, after which he and his small team “brewed with hops flown in from New Zealand, dabbled in chilli and were even convinced [...] to do a brew with woodlice”.More recently, marrying a love of technology and beer, Honest Brew set up its online merchant platform to allow its wares to be sampled by a wider audience across the UK and Europe.The company’s decision to accept bitcoin payments was down to this affinity for technology and an appreciation of the bitcoin community.Said Reeve:“Our goal is to make it easy for people to enjoy great craft beer. Bitcoin is an easy way for people to pay and it’s a near-direct transaction. This fits what we are trying to achieve at Honest brew, so it makes perfect sense to accept bitcoin.”“We’ve followed bitcoin since the beginning,” he continued. “It wasn’t until our digital designer was recently offered freelance work paid in bitcoin that we really considered it for Honest Brew [...] We love the community that sits behind bitcoin and the passion they have to bring bitcoin into the mainstream market. As a tech-focused company we wanted to get behind this.”Bitcoin transactions from the Honest Brew site are processed by the BitPay platform “giving people security and peace of mind”, Reeve added.Just the tonicWhile Honest Brew may be the first beer merchant to accept bitcoin online, a number of pubs and bars are now accepting bitcoin over the counter, including licensed premises in the UK, the Netherlands, and Australia.beerAs Honest Brew’s move into cryptocurrency indicates, larger alcohol retailers are also now starting to take notice of the growing bitcoin market, and only last month, the London Distillery Company started taking the digital currency for its gin products.When considering the move into digital currency payments, Reeve said he was not deterred by the bad press and scare stories that have plagued bitcoin in recent months: ”Bitcoin is still very new and you are bound to get some bad press. In general the community is overwhelmingly positive and we are excited to help grow it further.”Of course, there was one very important question left to ask Reeve: just what does woodlice beer taste like?“It was a beer lead by Master Brewer Stuart Howe,” he said. “It was a very small run and tasted great (no notes of ‘land shrimps’). I don’t think it’s one you will be finding on the platform anytime soon. You had to be there for that one.”Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.Images via Honest Brew

beerfood and drinkHonest BrewmerchantsUK

Original author: Dan Palmer
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