The linguistic verdict: Dorian is probably not Satoshi

Everyone has a linguistic signature (apparently).

Luckily for Bitcoin sleuths trying to determine the real identity of Satoshi Nakamoto the existence of *that* Bitcoin white paper provides everyone with some valuable clues. Read more

OpecCoin

We referenced the obvious similarities between the oil market and the Bitcoin market — specifically with regards to cost of production and capital intensity preventing a competitive threat to Opec — in our previous post.

In a fortunate coincidence, John Kemp at Reuters today directs his readers to the myth-busting 2004 work of former MIT professor Morris Adelman, who compellingly argued against the “oil is running out, prices can only go up” thesis. Read more

Let them eat Bitcoin mining rigs

Bitcoin prices are in retreat, seeming to suffer from the triple whammy of a Chinese crackdown, ongoing repercussions of the MT.Gox implosion as well as the IRS deciding that miners will not be immune to tax in the US.

If you view Bitcoin as a high-risk tech investment, the price might also be reflecting wider tech rot as well. Read more

Standing on the shoulders of cryptocurrency giants

Dorian Satoshi Nakamoto, the LA-based man that Newsweek alleged on Thursday was the probable creator of the Bitcoin protocol, denied all involved in an AP interview — but the plot continues to thicken.

As the International Business Times reports on Friday, an online chat account associated with the email featured in the original Bitcoin white paper has become active again.

Surprise, surprise — the user is claiming that the man featured in the Newsweek article is not Satoshi Nakamoto.

At this stage, one has to ask what’s really preventing the real Satoshi from revealing his true identity and claiming his fortune? (And there are reports that the bitcoins associated with Satoshi are already on the move on Friday.) Read more

Bitcoin founder’s writing matches nothing in Dorian Nakamoto’s background

We’ve already mentioned Felix Salmon’s thoughtful critique of the Newsweek cover story by Leah McGrath Goodman, but there’s one point we want to elaborate on.

Felix writes: Read more

The Krypto$ theory

This is Kryptos:

It’s an encrypted sculpture by Jim Sanborn which stands outside the offices of the Central Intelligence Agency in Langley, Virginia. It was placed there in 1990. Read more

Magic: the undercapitalised gathering online

Tech billionaire and bitcoin investor Marc Andreessen says Mt Gox is to bitcoin what MF Global is to the dollar.

We disagree.

But before we get to that, we’d like to explore revelations that it may not have been a malleability issue, a.k.a. a transaction doppelganging problem, that brought down the world’s premier bitcoin exchange but the much more common problem of “under-capitalisation”. It’s a common problem of banks and ponzi schemes everywhere. Read more

The Bitcoin personality cult lives on

How to handle bad news, by public relations guru and propaganda expert Edward Bernays from his book Propaganda (1928):

The counsel on public relations must be in a position to deal effectively with rumours and suspicions, attempting to stop them at their source, counteracting them promptly with correct or more complete information through channels which will be most effective, or best of all establish such relationships of confidence in the concern’s integrity that rumours and suspicions will have no opportunity to take root.

—————-

A single factory, potentially capable of supplying a whole continent with its particular product, cannot afford to wait until the public asks for its product; it must maintain constant touch, through advertising and propaganda, with the vast public in order to assure itself the continuous demand which alone will make its costly plant profitable.

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Some altcoin memes are more equal than others

Bitcoin may be many things: a cheaper and more efficient payments mechanism, a decentralised form of QE, an extreme way to break through the ZLB, a worthy private substitute for cash, an opportunity to stick it to the man or even a speculative investment opportunity of a lifetime.

What it isn’t, however, is a fair distribution of income.

Steven Englander at Citi comes to a similar conclusion, despite previously appearing a tad more enthusiastic about the idea of a private currency gaining traction. Read more

Breaking through the ZLB with virtual currencies

Here’s a crazy thought to start the New Year year with. What if virtual currencies were born less of an organic anti-government peoples’ movement and more of extreme unconventional monetary policy by the state? The ultimate central bank Jedi mind trick if you will, which takes easing to levels that conventional policy just cannot go.

But even if it’s not a plan hatched directly by monetary bodies to serve the interests of the state, there’s still a strong argument to be made that virtual currencies could be doing the Fed, the BoE and even the ECB a big favour. Read more

This is nuts. When’s the crash?

Via CNN Money:

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The Hubble bubble theory of the continuous expansion of the financial universe

Or something like it. We’re not, after all, physicists. Though, feel free to read about the Hubble Bubble theory here. What we probably should be referring to is Hubble’s flow, the rate at which expansion of the universe occurs.

All of which is a whimsical way of suggesting that perhaps Larry Summers has a point. Perhaps bubbles are part of our collective universal nature? A phenomenon that should be embraced as an unstoppable physical force, one that will find a way no matter what.

The proof is out there if we look hard enough. Latest manifestation: Bitcoin.

If we go with that notion, then perhaps inflating asset bubbles one after the other isn’t such a bad idea. Perhaps it’s even necessary? Read more

There’s nothing new under the sun, including Bitcoin

It’s not just the Chinese who are warning about the risks associated with Bitcoin. On Thursday, Business Insider reported that the former president of the Dutch Central Bank Nout Wellink warned that the hype around Bitcoin was worse than Tulip mania in the 17th century.

From BI: Read more

The PBOC, Bitcoin, and Chinese aunties

Some are betting that Beijing will eventually endorse Bitcoin. This week Lightspeed Venture Partners of San Francisco and a China-based sister fund announced a $5m investment in BTCChina…

Financial Times, November 22

Oops.

The People’s Bank of China even did a Q&A on Thursday to explain why it’s more or less forbidden the Chinese financial system from dabbling in Bitcoin… Read more

Capital controls, Bitcoin edition

An interesting thing happened on the way to Sheep Marketplace — the online market for illicit goods which rose to prominence after Silk Road, the dominant site for illicit goods trading, was apprehended by the Feds in October.

The interesting thing is not that after a couple of months in the limelight the site closed down because a hacker allegedly made off with $5m worth of Bitcoins. Nor is it that the Bitcoin community failed to buy the story because they noticed that all withdrawals from the site were being blocked by the site’s operators — promptly branding the entire website a scam from the beginning.

What is interesting are the “capital controls” the community is now effectively enforcing on the Bitcoin wallet address they suspect is responsible for the theft. In fact, an entire community of Bitcoin vigilantes has sprung up on the Reddit website, dedicating themselves to chasing the money across the open peer-based Bitcoin ledger. Read more

So this is how fiat currency dies, with thunderous CPUs?

We noted that the shift from Bitcoin into other crypto alternatives, which give early adopters a better chance at pilfering wealth from suckers, had already begun.

We referred, for example, to the rise in Litecoin. But this was foolish. We were thinking too small. There are so many other virtual choices on the market. Read more

Whither the BTC China premium?

A couple of things worth noting, for those interested in the virtual pump-and-dump campaign that is Bitcoin.

1) The Chinese Bitcoin premium has seemingly abated. Read more

The Litecoin disruption

When things get too expensive, imperfect substitutes become increasingly appealing.

It happened to oil with natgas and shale. It happened to gold with copper and silver. Now it seems to be happening with Bitcoin as well.

So while Bitcoin traded through $1,000 on Wednesday (depending on which exchange or service you use to acquire Bitcoin: it was $1,035 on MTGox, $922 on BTC-e at pixel time), more interesting is the recent surge that’s taking place in the value of alternative crypto currency Litecoin: Read more

Information asymmetry, crypto currency edition

In a bid to brush off criticisms that we don’t know what we’re talking about, FT Alphaville decided to take the plunge this weekend and buy some dreaded Bitcoins to check out claims that BTC really is an efficient payments system.

We had approximately $10 to spend. Read more

Alleged digital criminal masterminds have assets/liabilities too

More evidence is emerging in the case against Ross Ulbricht, the alleged criminal mastermind behind the Silk Road illicit goods digital marketplace and keeper of the Dread Pirate Roberts pseudonym.

Court filings refer to computer files seized by the Feds that show, amongst other things, that Ulbricht was a meticulous bean-counter with a tendency to account for assets and liabilities as exotic and incriminating as hacker bribes and server rent. Read more

Bitcoinery, mapped

Just click

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The bubble is us

FT Alphaville chaired a fortuitously timed Chatham House panel on Bitcoin, alternative currencies and the future of money on Tuesday evening. The panel included the man who signs all the UK banknotes, Chris Salmon (a.k.a. the chief cashier of the Bank of England), Dave Birch, a consultant and alternative currency “thought leader” from Consult Hyperion, Shane Happach, chief commercial officer of eCommerce at WorldPay and Leander Bindewald, who leads research into complementary currencies at the New Economics Foundation.

The audio can be found hereRead more

The crypto coalmine thought experiment

Bitcoin had its day in front of the Senate Committee on Homeland Security and Governmental Affairs 0n Monday, promptly roofing the price to over $900 per BTC on the back of the hearing, then crashing by 30 per cent and then recovering once again.

At pixel time the crypto currency was fetching about $690 on the MTGox exchange, with the community no doubt preparing for another day of extreme volatility. Read more

A crypto crisis or a crypto triumph?

No, that’s not a chart of Bitcoin. That’s Volkswagen’s stock price back in 2009, when the fruit machine play caused a meteoric and non-sustainable short squeeze in the German carmaker. Read more

Ludwig von Mises in the role of Walter White

So the Feds have finally busted Silk Road, the digital black-market platform which happily brokered everything from LSD and cannabis to heroin and computer-hacking services online, most frequently in exchange for the crypto-currency Bitcoin.

The value of which did take a beating, but perhaps not as much as might have been expected: Read more

Silk Road: an (alleged) $1.2bn business

That’s one detail which pops out from an FBI complaint against one Ross William Ulbricht, “a/k/a Dread Pirate Roberts, a/k/a “DPR”, a/k/a “Silk Road”, the defendant”, released on Wednesday… Read more

A Bitcomedy

Hot on the heels of the hilarious Wiklevoss Bitcoin Trust, a satirist over at The Guardian has created an hilarious virtual bitcoin entrepreneur called Kate Craig-Wood.

Kate and her friends discovered they could magic cash out of nearly nothing, simply by building bitcoin mining machines housed in plastic crates and letting them do their money-making stuff. She then learned about the world of virtual stock exchanges…. Read more

Introducing the Winklevoss Bitcoin Trust

Click to read - Winklevoss Bitcoin Trust S-1 filing

That’s a SEC filing for the Winklevoss twins’ brand-new Bitcoin exchange-traded fund. For realz. Read more

Hacker and Deflationary Devils on the Silk Road

The Telegraph’s Willard Foxton notes the online black market portal Silk Road has been experiencing some serious outages the last few days. The problems may be linked to a hacker and extortion attempt. The portal, rather ironically for an illicit website, is now offering a reward for information leading to the arrest and conviction of whoever is behind the attempt.

Though Silk Road has been experiencing other problems too, not least the hyperdeflationary effects of the Bitcoin rally: Read more

Bricks of gold, bits of code: the worship of things shiny and useless

If the meteoric rise and fall of the cyber crypto currency Bitcoin this month teaches us anything, it’s the degree to which a market can be influenced by internet hysteria, viral marketing and propaganda.

There is no intrinsic value to a Bitcoin. Read more