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mick silver
16th December 2013, 08:02 AM
Governments worldwide are trying to solidify their positions on Bitcoin. Chinese regulators banned financial institutions (http://www.theverge.com/2013/12/5/5177550/bitcoin-banned-from-chinese-banks-amid-fears-of-laundering) from using Bitcoin earlier this month, while in July, Thailand's government declared the virtual currency's use illegal (http://www.theverge.com/2013/7/29/4569126/bitcoin-tries-to-become-legal-currency-in-thailand-gets-outlawed) due to a lack of applicable laws (http://qz.com/110164/thailands-infamous-bitcoin-crackdown-is-not-quite-what-it-seems/). Now Bitcoin has taken another hit to its legitimacy: Norway — Scandinavia's richest nation (http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?order=wbapi_data_value_2012+wbap i_data_value+wbapi_data_value-last&sort=desc) — has said that the currency doesn't qualify as real money.
Norway's director general of taxation, Hans Christian Holte, said the currency "doesn't fall under the usual definition of money." The Norwegian government instead decreed Bitcoin to be an asset upon which capital gains tax can be charged. Bloomberg says (http://www.bloomberg.com/news/2013-12-12/bitcoins-fail-real-money-test-in-scandinavia-s-wealthiest-nation.html) profits from Bitcoin will fall under the wealth tax, and that losses can be deducted. Holte also said there will be a 25 percent sales tax for businesses. For now the new rules will apply to Norwegian Kristoffer Koch, whose $27 investment in the fledgling currency was worth $886,000 in October (http://www.theguardian.com/technology/2013/oct/29/bitcoin-forgotten-currency-norway-oslo-home), but his home country's decision may not be final: Holte is reportedly planning to work with other nations to work out the legalities of the new currency.
Norway's government is planning to work on the legalities of Bitcoin with other countries
Earlier this year the German government reached a similar decision (http://www.theverge.com/2013/8/19/4636068/germanys-recognition-of-bitcoin-paves-the-way-for-a-licensed-exchange-EU), classifying Bitcoin as "Rechnungseinheiten," or "units of account." That definition put Bitcoin at a similar standing to a regional currency. The French government was more accepting of the virtual currency earlier in the year — allowing the foundation of Bitcoin-Central (http://www.theverge.com/2012/12/7/3740136/bitcoin-exchange-bank-france-bitcoin-central), a real bank that allows customers to deposit and transfer money in both Euros and Bitcoins — but changed its course this month with the Bank of France issuing a warning (http://www.reuters.com/article/2013/12/05/us-france-bitcoin-idUSBRE9B40IF20131205) about the financial risks of the currency.
The legalities of Bitcoin are still fuzzy
That warning was echoed by the European Banking Authority last week, which issued a document (http://www.eba.europa.eu/-/eba-warns-consumers-on-virtual-currencies) reminding consumers of the dangers of virtual currency. People using virtual currencies such as Bitcoin should, according to the EBA, "fully understand their specific characteristics and not use ‘real' money that they cannot afford to lose." Outside of the EU, the legalities of Bitcoin are still fuzzy. Many Bitcoin dealers in the US are not compliant with American law (http://www.theverge.com/2013/12/12/5201636/without-legal-clarity-many-bitcoin-companies-go-unregistered), and even Bank of America, once positive about the currency's future (http://www.theverge.com/2013/12/5/5178536/bank-of-america-says-bitcoin-could-become-a-major-means-of-payment), is worried about a governmental crackdown.
Speaking to Bloomberg (http://www.bloomberg.com/news/2013-12-12/bitcoins-fail-real-money-test-in-scandinavia-s-wealthiest-nation.html), associate professor of financial economics at the BI Norwegian Business School Paul Ehling said Norway's definition of money could be shortsighted. Ehling spoke about currencies in history, saying "if it's accepted by a sufficiently large population, then that's enough." But Ehling also thinks Norway's cautious approach to the new currency stems from its ephemeral and volatile nature. "If there's a crisis or power outage, you need some bills in your wallet in case your credit card doesn't work — same goes with Bitcoins." Ehling explained that if people started to trust Bitcoin and use it for large purchases, it could rival established currencies, but that "right now, we're not there".


Source Bloomberg (http://www.bloomberg.com/news/2013-12-12/bitcoins-fail-real-money-test-in-scandinavia-s-wealthiest-nation.html)

palani
16th December 2013, 08:07 AM
Gee. If bitcoins aren't considered real then their government must be able to describe what 'real money' actually is. Sounds like they need to explain themselves.

Is an IOU note from an entity that is billions in debt money? Compare that to an IOU note from an entity that is not functionally bankrupt. Which is the most sound value? Which one is the money?

mick silver
16th December 2013, 08:10 AM
Bitcoin goes big: Wall Street, Silicon Valley aboard Text Size here the kicker for me , Reports surfaced this week that JPMorgan Chase (http://data.cnbc.com/quotes/JPM) has been pursuing the development of a cryptocurrency (http://www.ft.com/intl/cms/s/0/e230307a-61c4-11e3-aa02-00144feabdc0.html#axzz2nHFUIBIg) for at least 14 years.
Published: Sunday, 15 Dec 2013 | 7:41 AM ET

By: Jeff Cox (http://www.cnbc.com/id/36003787) | Finance Editor














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http://fm.cnbc.com/applications/cnbc.com/resources/img/editorial/2013/12/12/101269040-181018342.240x160.jpg?v=1386872315 Getty Images
A terminal to accept payments using bitcoins is displayed on the bar at the Old Fitzroy pub on September 19, 2013 in Sydney, Australia.

Scoff if you like but bitcoin, despite its myriad defects and detractors, is getting an increasing level of focus in high finance.
Just a few recent examples:
Reports surfaced this week that JPMorgan Chase (http://data.cnbc.com/quotes/JPM) has been pursuing the development of a cryptocurrency (http://www.ft.com/intl/cms/s/0/e230307a-61c4-11e3-aa02-00144feabdc0.html#axzz2nHFUIBIg) for at least 14 years.
In a recent analysis for clients, Bank of America Merrill Lynch called bitcoin a potential "major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers."
And Fidelity is now reportedly allowing clients (http://blogs.marketwatch.com/thetell/2013/12/11/fidelity-now-allows-clients-to-put-bitcoins-in-iras/) to put bitcoins in their 401(k) plans, adding a little risk to the retirement picture, according to financial website MarketWatch.


(Read more: Cashless society: A huge threat to our freedom (http://www.cnbc.com/id/101266173))
Bitcoin, the cryptocurrency created by online "miners" who solve complex math problems, is gaining as much acceptance as skepticism these days.
The digital currency alternative has been a favorite target of speculators, who pushed the price as high as $1,240 earlier in December and as low as $365 just a month ago. It traded around $850 midday Thursday, according to the Mt.Gox exchange (https://www.mtgox.com/).


http://thumbnails.cnbc.com/VCPS/Y2013/M12D10/3000225330/3ED2-FM-YoungBitcoin1210.jpgPlay Video



Youngest Bitcoin businessmen

Founders of Bees Brothers Nathan and Sam Huntzinger like the idea of idea of non-centralized currency that is inflation proof like Bitcoin.

Along with wild price fluctuations has come intensified interest.
"Bitcoin is the first to market with this concept," banking analyst Dick Bove at Rafferty Capital Markets said in a note to clients. "It is not the last and there will be other more refined approaches, but make no mistake one or many digital currencies, which are not controlled by governments, are coming."

Bove believes the success of bitcoin will hinge on its ability to weed speculators out of the cryptocurrency market. Price stability, even at lower levels, will help it project a higher caliber of legitimacy.
(Read more: Is Bitcoin the fad of all fads? (http://www.cnbc.com/id/101250874))
At the same time, should JPMorgan's patent application get approval, that could be a game-changer for the virtual currency world.
"We suggest that investors, particularly those in banking, must stay aware of developments in this market," Bove said. "It will be a factor in valuing certain banking products related to the payment system."

There have been other intriguing developments as well.
Bitcoin Foundation announced Thursday that it has opened chapters in Canada and Australia. The advocacy organization, which boasts hundreds of members and dozens of exchange and support sites, said it seeks "to build a collaborative and supportive relationship to address (countries') unique issues and priorities through localized leadership."
(Read more: Don't rule out a ban on virtual currencies: Peercoin (http://www.cnbc.com/id/101251925))

In addition to Wall Street, Silicon Valley also is getting geared up over bitcoin.
Coinbase, a San Francisco company, has raised $25 million (http://dealbook.nytimes.com/2013/12/12/venture-capital-bets-big-on-bitcoin/?ref=business) in venture capital money as it seeks to expand. The company helps facilitate bitcoin transactions between buyers and vendors that accept the currency.

Various funds have been raising significant amounts as well, with SecondMarket reporting earlier this week that it was holding $65 million worth of bitcoins. Cameron and Tyler Winklevoss are perhaps the most recognized names involved in supporting bitcoin, with their Winklevoss Bitcoin Trust.
(Read more: BofA: Bitcoin could hit $15 billion market cap (http://www.cnbc.com/id/101250070))
Bank of America Merrill Lynch analysts believe that bitcoin's big advantage is early entrance to a market that is likely to grow. Criticism of bitcoin as an allure to criminals looking to conduct illegal transactions is largely unwarranted, BofA said, because of the ease in tracking usage.
On the downside, BofA rates strategist David Woo believes the continued price volatility and likelihood of regulation in the future cloud bitcoin's chances for success.
"To the extent that bitcoin offers users many benefits and efficiencies as a medium of exchange, this means it possesses some fundamental value that may increase over time as it gains wider use," he said. "However, as a unit of account and store of a value, it has considerable shortcomings which we believe will ultimately hinder it from ascending to international currency status."
—By CNBC's Jeff Cox. Follow him on Twitter

@JeffCoxCNBCcom (https://twitter.com/JeffCoxCNBCcom).

Horn
16th December 2013, 08:16 AM
Norway's government says Bitcoin isn't real money


A notional derivative relying on overprinted and week dollar performance.

No different than hedge bets on the number of americans over the age of 60 dieing within a calender year.

mick silver
16th December 2013, 08:16 AM
Bitcoin and the euro: one is the future, the other the past
By Douglas Carswell (http://blogs.telegraph.co.uk/news/author/douglascarswellmp/) Politics (http://blogs.telegraph.co.uk/news/category/politics/) Last updated: December 16th, 2013
101 Comments (http://blogs.telegraph.co.uk/news/douglascarswellmp/100250495/bitcoin-and-the-euro-one-is-the-future-the-other-the-past/#disqus_thread) Comment on this article (http://blogs.telegraph.co.uk/news/douglascarswellmp/100250495/bitcoin-and-the-euro-one-is-the-future-the-other-the-past/#dPostComment)

http://blogs.telegraph.co.uk/news/files/2013/12/bitcoin_2756210b-460x288.jpg (http://blogs.telegraph.co.uk/news/files/2013/12/bitcoin_2756210b.jpg)Photo: Alamy

Bitcoins fans should love the euro, according to Matthew Parris (http://www.spectator.co.uk/columnists/matthew-parris/9098552/matthew-parris-if-you-love-gold-shouldnt-you-love-the-euro-too/). Writing in the Spectator, he suggests that if you favour one, why not the other?
The euro and Bitcoins are not, contrary to what Matthew suggests, very similar at all.
The euro is all about getting different countries to use one currency. Bitcoin means folk in any one country being able to use different currencies.
It might, as Matthew suggests, be beyond the ability of national politicians to tinker with either the Bitcoin or the euro. But supranational bureaucrats are very much capable of manipulating the euro - and of using the euro not only as a monetary tool, but means of determining fiscal policy too.
The euro gives a small clique of “experts” the power to decide what monetary medicine those living in the eurozone need. Bitcoin repudiates the idea of monetary grandees doing things by grand design.
If the euro imposes a uniform monetary policy on tens of millions, the Bitcoin belongs to a new era of currency competition.
In my book, The End of Politics and the Birth of iDemocracy (http://www.amazon.co.uk/The-End-Politics-Birth-iDemocracy/dp/1849544220), (a corking stocking-filler, incidentally, I'm told…) I suggested that digital technology makes currency competition inevitable. That process has now started.
Is Bitcoin it? I am a bit of a Bitcoin sceptic, to be frank.
More on Bitcoin (http://blogs.telegraph.co.uk/technology/tag/bitcoin/)
• Digital currencies will sweep away our monopoly money (http://blogs.telegraph.co.uk/news/douglascarswellmp/100228691/banning-bitcoin-is-stupid-non-state-digital-currencies-will-soon-sweep-away-our-monopoly-money/)
• Are we looking at a Bitcoin Ponzi scheme? (http://blogs.telegraph.co.uk/technology/jamestitcomb/100011764/bitcoin-has-been-hijacked-by-speculators-are-we-looking-at-a-ponzi-scheme/)
• So how much was Silk Road worth? (http://blogs.telegraph.co.uk/technology/willardfoxton2/100010940/so-how-much-was-silk-road-worth/)
When it comes to private currency, my money – so to speak – would be on units redeemable with a large institution. How? Imagine if PayPal, Google or 02, which already have zillions of account holders and take payments, were to start providing banking services? What if, like banks in Hong Kong or Scotland once did, they were to issue IOUs?
Competing currencies – both state-issued and private – will free us from the tyranny of monopoly fiat money. And the euro is the ultimate monopoly fiat money. If you are reading this is Greece or Spain – where there have been years of economic decline – it probably feels a tad tyrannical too.
“Detestation of the European single currency,” writes Matthew, “is actually rooted in a detestation of Europe”. Really?
To detest something is to hate it. I am not sure that the case against the euro is rooted in hatred at all. Nor is it sensible to attribute base motives to those with whom one happens to disagree.
The euro, like the EU project itself, is a product of grand design. Eurosceptics are – the clue being in the name – doubtful that it is desirable to arrange Europe’s affairs by grand design.
The euro belongs to an era when it was possible to arrange human social and economic affairs that way. With or without Bitcoin, the digital revolution dooms that kind of giantism.
More by Douglas Carswell (http://blogs.telegraph.co.uk/news/author/douglascarswellmp/)
• Our threat to quit Europe is winning us the debate (http://blogs.telegraph.co.uk/news/douglascarswellmp/100250142/the-debate-in-europe-is-moving-our-way-only-because-we-are-threatening-to-quit/)
• Is this a booming economy, or a credit-driven bubble? (http://blogs.telegraph.co.uk/news/douglascarswellmp/100249997/is-this-a-booming-economy-or-a-credit-driven-bubble/)
• The web is bringing society together, not tearing it apart (http://blogs.telegraph.co.uk/news/douglascarswellmp/100249159/the-web-is-bringing-society-together-not-tearing-it-apart/)

mick silver
16th December 2013, 08:18 AM
Bitcoin has been hijacked by speculators. Are we looking at a Ponzi scheme?


By James Titcomb (http://blogs.telegraph.co.uk/technology/author/jamestitcomb/) Tech business (http://blogs.telegraph.co.uk/technology/category/tech-business/) Last updated: December 11th, 2013
68 Comments (http://blogs.telegraph.co.uk/technology/jamestitcomb/100011764/bitcoin-has-been-hijacked-by-speculators-are-we-looking-at-a-ponzi-scheme/#disqus_thread) Comment on this article (http://blogs.telegraph.co.uk/technology/jamestitcomb/100011764/bitcoin-has-been-hijacked-by-speculators-are-we-looking-at-a-ponzi-scheme/#dPostComment)

http://blogs.telegraph.co.uk/technology/files/2013/12/Hugo_Bitcoin-cartoon2.jpg (http://blogs.telegraph.co.uk/technology/jamestitcomb/100011764/bitcoin-has-been-hijacked-by-speculators-are-we-looking-at-a-ponzi-scheme/hugo_bitcoin-cartoon2/)Bitcoin is being hijacked by spivs (Cartoon: The Spectator)

The price of Bitcoin fell below $900 at the end of last week. In the week before that it rose to $1200. A month ago it was $300.
Trying to explain why this is happening with any semblance of rationality is a fool’s errand. But that doesn’t stop a lot of people thinking they can make a quick profit from Bitcoin’s manic price swings. Most of them, so far, have, but the profiteers’ speculation is threatening the very reasons Bitcoin was created.
I won’t bore you with the lengthy background (there are plenty of places you can read up on Bitcoin). All you need to know is you can buy and sell it online, that its market value in the last few months resembles a polygraph test, and that people tend to use it to buy things when it is easier to do so than by using normal currencies.
This used to mean drugs (the underground marketplace Silk Road used Bitcoin as its method of exchange until it was shut down this year), but the currency is now just as likely to be for legitimate uses, though evading the law is still a big draw.
As the economist Tyler Cowen notes, Bitcoin has become incredibly popular in China (http://marginalrevolution.com/marginalrevolution/2013/11/china-and-the-soaring-price-of-bitcoin.html) as a method for wealthy citizens to circumvent the country’s currency rules. Elsewhere, businesses from Subway to Virgin Galactic have said they will accept it as legitimate tender.
The appeal of Bitcoin, to small businesses especially, is that it has the potential to be a much cheaper method of accepting payments than credit cards, which impose crippling fees (http://blogs.telegraph.co.uk/technology/willardfoxton2/100011463/sorry-i-dont-take-cards-the-phrase-thats-costing-british-business-12bn-a-year-thanks-to-greedy-banks/). In some ways, Bitcoin is also less susceptible to fraud. It’s a long way off, but Bitcoin (or another digital currency) has many of the ingredients to change the way we pay for things.
http://blogs.telegraph.co.uk/technology/files/2013/12/Screen-Shot-2013-12-11-at-11.33.41.png (http://blogs.telegraph.co.uk/technology/jamestitcomb/100011764/bitcoin-has-been-hijacked-by-speculators-are-we-looking-at-a-ponzi-scheme/screen-shot-2013-12-11-at-11-33-41/)
It’s hard to see this happening, though, because Bitcoin has been hijacked by speculators. People are moving their money in and out at a blinding rate. Traders have turned their attention to it (Bank of America began publishing research last week). The millionaire Winklevoss twins – better known as the Harvard rowers who claim Mark Zuckerberg stole their idea for Facebook – are launching a fund for people to invest in Bitcoin.
This has given the currency a sense of credibility, but also threatens to turn it into a Ponzi scheme: its price fluctuates manically as the slightest hint of action or inaction from regulators, or comment from self-nominated experts, sends people rushing to buy and sell. Bitcoin’s value seems built more upon chancers hoping to buy low and sell high than on any real demand for it.
This volatility threatens to kill Bitcoin’s potential. If a small business risks losing thousands overnight because of a huge swing in value, why would it adopt Bitcoin as a payment method? Why would any citizen of a restrictive state use it to protect their money?
The more Bitcoin wavers, the more its value as a tool diminishes. The profit seekers should take note, because if they kill any practical use for Bitcoin, demand crumbles and the currency becomes nothing more than a house of cards – one that is bound to topple.
More from Telegraph tech blogs:
• Why is your smartphone screen so dumb? (http://blogs.telegraph.co.uk/technology/maxtattonborwn/100011647/why-is-your-smartphone-screen-so-dumb/)
• Government to start searching the dark net for paedophiles (http://blogs.telegraph.co.uk/technology/willardfoxton2/100011671/government-to-search-the-dark-net-for-paedophiles-about-time-too/)
• Why won't small shops accept credit cards? (http://blogs.telegraph.co.uk/technology/willardfoxton2/100011463/sorry-i-dont-take-cards-the-phrase-thats-costing-british-business-12bn-a-year-thanks-to-greedy-banks/)

http://blogs.telegraph.co.uk/news/douglascarswellmp/100250495/bitcoin-and-the-euro-one-is-the-future-the-other-the-past/

EE_
16th December 2013, 08:21 AM
http://www.libertynews.com/wp-content/uploads/2013/07/mexican-gang.jpg

Mexican drug cartels love bitcoin! No more worries about large shipments of cash getting confiscated.

Horn
16th December 2013, 08:24 AM
Notice how every article has to include some Bitcoin blanks photo that were shot out of some toy factory somewhere.

Someone could have gotten rich just by taking pictures of those blank target coins.

mick silver
16th December 2013, 08:28 AM
they few words would make me look hard at bitcoins ............................... Reports surfaced this week that JPMorgan Chase (http://data.cnbc.com/quotes/JPM) has been pursuing the development of a cryptocurrency (http://www.ft.com/intl/cms/s/0/e230307a-61c4-11e3-aa02-00144feabdc0.html#axzz2nHFUIBIg) for at least 14 years

Ares
16th December 2013, 08:31 AM
http://www.libertynews.com/wp-content/uploads/2013/07/mexican-gang.jpg

Mexican drug cartels love bitcoin! No more worries about large shipments of cash getting confiscated.

I thought they just used JPMorgan and HSBC to take care of that for them. lol

JohnQPublic
16th December 2013, 08:34 AM
I thought they just used JPMorgan and HSBC to take care of that for them. lol

They do, and they do not appreciate the competition.

EE_
16th December 2013, 08:44 AM
I thought they just used JPMorgan and HSBC to take care of that for them. lol

No, the Feds are taking care of it. Losing all this has to hurt.
The Feds are really going to miss the mountains of cash once the cartels are in the bitcoin system.

http://www.wehaitians.com/mexican%20drug%20lord%2018.jpg

Neuro
16th December 2013, 09:23 AM
Norway's government says Bitcoin isn't real money
Well Norway isn't a real country.

Horn
16th December 2013, 11:52 AM
Fika-furter, and goat herder.

ximmy
16th December 2013, 12:38 PM
make your own bitcoins.... buy stuff.... everybody is happy!!!

http://thumbnails.cnbc.com/VCPS/Y2013/M12D10/3000225330/3ED2-FM-YoungBitcoin1210.jpg

http://trueaimeducation.com/wp-content/uploads/2013/05/Monopoly-learning-board-game.jpg

mick silver
16th December 2013, 03:18 PM
ximmy you make them i will sell them , does that sound like a good deal , we will be the next mickcoin and ximmycoin billions