Bitcoin
was met with skepticism in its early conception, its concept, stability,
security and availability. Bitcoin in its cryptic nature attracted more and
more people each day. Most specially Chinese, learning more and adopting it
into their society, making it part of everyday living playing part of the
global trade, more or less half of it. With the increasing demand comes along
with increasing price of bitcoins, now ranging from 871 to more or less a
thousand dollars.
Nonetheless,
misconceptions still lingers, here are the following:
1. Bitcoin is nothing but digital cash
for criminals.
Silk
Road, an online black market for illegal drugs, started accepting bitcoins in
2011 became a way for doing illicit transactions with a little less worry in
finance department being traced. Investors
came flooding in and business grew more than expected. Not until it was seized
by the Federal Bureau of
Investigation In early October, the Federal Bureau of
Investigation shut down Silk Road and apprehended its alleged creator, Ross
William Ulbricht, in San Francisco. The price of Bitcoin dropped sharply but
quickly recovered, and has since attained heights that would have been
unfathomable only weeks ago. And yet, even since that bust, the media has lost
no opportunity to tie Bitcoin to Silk Road in report after report.
Gone
was the illegitimate, and then came the legitimate ones popping one after the
other as investors see potential in bitcoin. Lightspeed
Venture Partners, working with its Chinese counterpart, just invested $5
million in BTC China, the world's largest Bitcoin exchange.Now government is
taking back what they’ve thought to be exclusively the preserve of criminals with legal
businesses making serious moves.
2. Bitcoin transactions are anonymous and
untraceable.
Since bitcoin has been tagged as anonymous
cryptocurrency, most people prefer using it to preserve their privacy and
anonymity. An idea that needs to be straightened up since every
transaction using
bitcoin is seen in the public log called blockchain, which prevents double
spending. As cryptic as a single bitcoin, tracing back its origin would mean
going into a hedge maze, it will take you time to get out of it. Researchers from the University of California, San Diego and
George Mason University recently created a map of the Bitcoin
economy that could be used by law enforcement to track the flow of bitcoins
from criminal sources to legitimate companies such as Bitstamp and other
exchange services. In the U.S., exchanges are required to obtain identifying
personal information from their users, so a subpoena could reveal a criminal's
real identity.
3. Mt. Gox is the go-to place for the
value of Bitcoin.
Pionering
bitcoin exchange giant, Mt. Gox has been on the top for the most of bitcoins’
existence as the leading trading platform of bitcoin. Its foundation has been
shaken as persisting problems with withdrawing U.S. funds also due to bitcoins
volatility that gets their liquidity in question. Mt. Gox resorted to
artificial inflation.
Why
the inflation? It has to do with recent difficulties in withdrawing U.S. funds
from Mt. Gox. Because users have found themselves unable to pull their dollars
out of the exchange, they are forced to buy bitcoins with those dollars and
then transfer the coins elsewhere. Those trades have driven the price on Mt.
Gox beyond the price found on Bitstamp, Coinbase and most other exchanges. One
way to verify this discrepancy is to visit
Bitcoin Average and click the button that says "ignore
MTGox for USD/EUR/GBP."
BTC
China, which now processes more than one-third of the world's daily Bitcoin
transactions, and is open only to Chinese customers, is also overheated. It is
somewhat misleading to quote the global price of Bitcoin by simply converting
the price in yuan on BTC China to U.S. dollars, because that value is elevated
beyond what is achievable on exchanges that transact in dollars.
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of this news here
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