Thursday, January 31, 2013

Bitcoin Hits $20.50/BTC, Continues Climbing

Well, that didn't take very long. $120,000 of Bitcoins were rapidly purchased on the Mt.Gox USD exchange, breaking down the ask wall at $20 and pushing Bitcoin over the $20 mark for the first time since the July 2011 bubble. Resistance beyond $20 is minimal, which will likely lead to a spike into the high-twenties before trading settles down again.

(chart courtesy of

Wednesday, January 30, 2013

The First Bitcoin ASICs are Hashing Away!

After months and months of speculation, confusion, and downright frustration, Avalon has defeated the competition and delivered the first Bitcoin ASIC devices to market.

Jeff Garzik has been updating his blog with pictures of his Avalon-branded machine, and has now reported on IRC that he is indeed mining with the ASIC at 68252.65 Mhps.

[00:50] <@jgarzik> mining!
[00:50] <@jgarzik> [MHS av] => 68252.65

Attention Bitcoin Traders: $20 is About to Fall!

Looking at the Mt.Gox USD market depth, it is clearly evident that the $20 barrier is about to fall as Bitcoin surges toward the all-time high of $31/BTC. The Mt.Gox Live picture says it all:

(Chart courtesy of Mt.Gox Live)

Taking a wider view of market depth, it's apparent that the amount of money sitting on the bid side is ready to overwhelm the Bitcoin market. Expect a run into the mid-twenties in the near future. Happy trading!

(Chart courtesy of Bitcoin Charts)

A Second Look at OKPAY, Bitcoin's Largest Payment Processor

In November of 2011, I announced the arrival of OKPAY onto the Bitcoin scene, which at the time was seen as a huge step toward the consumer popularisation of Bitcoin. OKPAY was, and still is, the first well-established payment processor to integrate Bitcoin into their services. Since the original announcement, OKPAY has continued to increase in popularity, becoming one of the top 10,000 sites on the Internet, and hence a member of our prestigious Bitcoin Ladder. OKPAY is also one of the top 1700 sites in Russia.

Its competitors from within the Bitcoin community, BitPay, WalletBit, and MtGox have obviously kept the pressure on OKPAY to remain competitive, and OKPAY has done just that by recently dropping their BTC to USD conversion fee to 2.50% from the 3.00% that it was back in March of 2012. BitPay is currently charging 2.69%, while WalletBit charges 2.75%. Mt.Gox is of course competitive with the straight BTC to USD conversions, but they also charge 2.50% on top of their trading fees for any other currency. OKPAY's 2.50% rate also holds for anyone wishing to withdraw their BTC proceeds via the OKPAY MasterCard debit card.

Uniquely, OKPAY has also aligned itself with two of the major Bitcoin exchanges, Mt.Gox and BTC-E, allowing users to withdraw funds from the exchanges to their OKPAY accounts, and ensuring OKPAY gets the best possible Bitcoin exchange rate.

OKPAY's service has drawn in hundreds of thousands of users, thus giving them an advantage through economies of scale, something BitPay, WalletBit, and MtGox may find difficult with which to compete, though they're obviously doing a great job of staying competitive, themselves.

The beauty of these payment processors is the fact that they allow a merchant to accept Bitcoins with zero risk, with fees very much competitive with, if not lower than, those of PayPal, Visa, and MasterCard. Add in the absolute zero chance of chargebacks, and you wonder why there are any merchants out there that are not willing to accept Bitcoin in addition to the usual currencies.

As always, it's exciting to see the Bitcoin payment processor space continue to grow with the Bitcoin economy, inevitably forcing traditional payment processors (*cough* PayPal *cough*) to either get with the times or potentially lose significant business.

Monday, January 28, 2013

Bitcoin Hits Bloomberg and the Front Page of ZeroHedge

Mainstream much?

A big day for Bitcoin today, as articles about the currency have hit both Bloomberg and ZeroHedge.

Bloomberg's article was entitled, "Bitcoin’s Gains May Fuel Central Bank Concerns," while ZeroHedge, with their usual panache, spun the Bloomberg article into, "Is The ECB Responsible For The Second Coming Of Bitcoin?"

The two articles reference the ECB's paper that was released back in November 2011, as well as the fact that the Bitcoin / USD exchange rate has soared over the last few months, hitting nearly $19 last week and floating near that level today.

Expect follow-on articles to hit the mainstream media in the coming days and weeks.

Saturday, January 26, 2013

Bitcoin: The $200 Million Currency, Once Again

On January 24th, Bitcoin broke through $19.00, a price not paid for a Bitcoin since July of 2011.

Over 24 hours, 160,000 Bitcoins traded hands on the Mt.Gox USD market alone, while traders attempted to seek out a new valuation for the increasingly popular digital currency. Trading has since settled down, with the price hovering around the $17 mark.

During the fast and furious trading, the overall market capitalization of Bitcoin topped $200,000,000 for a brief period of time, coming very close to hitting a new high previously set during the infamous bubble that occurred 18 months prior.

Are the recent highs just another bubble, or a bullish sign that Bitcoin has hit the tipping point? I would speculate that it's the latter, as overall activity in the community has picked up substantially. Indeed, one of the more successful Bitcoin businesses, BitPay, just announced they have successfully facilitated 10,000 Bitcoin merchant transactions, and now have a client list totaling 2400; clearly a positive indicator for the future of Bitcoin.

Saturday, January 12, 2013

253 BTC ($3,577 USD) Bet that Butterfly Labs will Not Deliver an ASIC Prior to March 1st, 2013

A bet that was posted on BitBet on the 5th of January was not receiving much attention until late yesterday, when someone threw some significant money on the "no" side. The bet looks like this:

253 BTC (250 of which was bet last night) says that Butterfly Labs (BFL) will not be able to deliver their ASIC product prior to the 1st of March. The bet itself does not close until the 22nd of February (a bit strange), which leaves plenty of time for people who disagree with the "no" side to place a counter-bet.

Bets of Bitcoin has a similar bet on their site, stating, "Butterfly Labs will not ship ASIC-based BitForce SC products before April 2013. 59 BTC are on the "yes" side while 184 BTC are on the "no" side. In other words, the predictions market on Bets of Bitcoin is optimistic that BFL will deliver before April 2013. 

Between the two markets, the consensus seems to be that delivery will take place sometime between March 1st and April 1st. If that turns out to be the case, it would be a major disappointment to anyone who had placed a pre-order with BFL, especially since the original promised delivery date was three months ago, back in October.

Bitcoin predictions markets are not as well developed as they are on a site like InTrade, for example, but InTrade is notorious for being able to predict all sorts of outcomes quite accurately, the most significant of which was the recent US presidential election. We'll have to wait and see if Bitcoiners are equally as clairvoyant.

Edit: A good point was brought up on the forums by Frizz23. If BFL knows they can beat the March 1st deadline, we should see someone from the company throw up a 250 BTC counter-bet in the coming weeks. If not, well then I guess we'll know the truth!

Thursday, January 10, 2013

Bitcoin Surges Through $14 US, $1 Shy of 18-Month High

The currency that never sleeps hit $14.32 USD/BTC today, surging past the $14 mark for the first time since August 2012 and only $1.08 shy of a new 18 month high.

While trading was locked in the mid $13-range for over a month, recent news regarding adoption of the currency, significant investments from venture capitalists, and the success seen in the gambling sector have likely contributed to the price surge. I'm not sure we've gone mainstream yet, but when Rush Limbaugh and John Stossel start throwing around the term "Bitcoin," you know something is up.

$2 Billion Precious Metal Dealer Ready to Accept Bitcoin, the James Turk founded company that manages over $2 billion in precious metal assets for its 23,000 customers, has released a survey suggesting that they are willing to not only store Bitcoins for customers, but use Bitcoin as a medium of exchange for those wishing to buy or sell precious metals.

The relevant survey questions are as follows:

12. How much are you interested in using Bitcoin for online transactions? 
13. Please specify below which Bitcoin functionality you would like to use:

  • Use Bitcoin to buy precious metals with Goldmoney
  • Use GoldMoney to store Bitcoins in a secure wallet
  • Other

Ironically, in December of 2011, GoldMoney shut down a service which allowed its customers to convert precious metals into different currencies or to transmit units of gold and silver to pay other GoldMoney customers (hence the name, 'GoldMoney'). The site, which should now probably be called "GoldStorage," sited a "global increase of compliance requirements for payment service providers" as the reason for eliminating the feature.

Now, they are looking at the unregulatable (yes that's a word, I Googled it) Bitcoin as a means of getting around these requirements. In essence, James Turk is saying that "Bitcoin is as good as gold!" Personally, I think it's better.

It appears that the survey is accessible to non-clients, so feel free to have your say, here.

Trace Mayer has an excellent take on the situation over at his "Run to Gold" blog.

Monday, January 7, 2013

Bitcoin Casino "Bitzino" Posts Some Impressive Stats for 2012

The Bitcoin online gambling business is getting a lot of attention these days. No wonder, after Bitzino just posted some impressive numbers for 2012. Here are some of the highlights:

- 28,986 BTC cashed out by players;
- 0.0031% paid in transaction fees (less than 1 BTC, total);
- Average withdrawal wait: 9 minutes
- 50% of withdrawals occurred in under 1 minute;
- 3.2 million wagers placed (1 wager every 5 seconds).

Here's a link to the full report: Now Accepts Bitcoin; Becomes 10th-Most Popular Bitcoin Accepting Site

This news was just reported by Gigavps on the bitcointalk forums: WrapBootstrap now accepts Bitcoin for payment. From the site:

"WrapBootstrap is a marketplace where designers can sell their own themes and templates based on the Twitter Bootstrap framework." 
"Bootstrap is beginning to reach wide-spread adoption amongst developers and many have expressed their desire for design customization beyond the default styles. This marketplace was created to solve that need by allowing designers to upload and sell their own themes and templates based on Bootstrap. Sellers are able to choose from several usage licenses to sell their items under and earn a percentage of each sale."

WrapBootstrap has an Alexa ranking of 11,519, making it the 10th most popular website to accept Bitcoin. You can see the rest of the top 10 on our Bitcoin Ladder.

Wednesday, January 2, 2013

Finally, A Bitcoinica Replacement?

A new Bitcoin exchange / leveraged trading service is set to launch in the coming weeks. Going by the name of "Kraken," it will be the first site to offer leveraged trading since the beleaguered Bitcoinica went offline last year. It will also be a Mt.Gox-like Bitcoin exchange.

I had the opportunity to browse the site, and it certainly looks promising. Hopefully it will be as secure as it is visually appealing.

Bitcoin Gambling Site Earns $230,000 in December; Raises Eyebrows

SatoshiDice just announced their revenue numbers for the month of December, and they were record-breaking (all numbers in Bitcoin):

December Statement

Earnings: 17,266.45
Hosting/Tech Expenses: 60
Loss Carryover from Nov: 0

Net Profit 17206.44888669

Volume over past 30 Days 527,708.52
Expected Profit over past 30 Days 10,026.46
Actual Profit over past 30 Days 16,632.74

Updated P&L 

Almost as impressive as their earnings was the cost of their overhead, an astoundingly small 60 Bitcoins.

You can read more about SatoshiDice in a previous article, here.

SatoshiDice - A Test Case for Bitcoin Gambling

Early on, in was apparent that the online gambling scene had the potential to benefit from Bitcoin. Obviously I was not alone in that thinking, as dozens of Bitcoin gambling sites seemingly sprung up overnight, most of them looking like they were coded by five year-olds or Nigerians, or Nigerian five year-olds.

The majority have gone the traditional route of offering tried and tested games like poker, blackjack, or slots, but some have utilized the unique properties of Bitcoin to truly change the way people gamble online.

Enter: SatoshiDice.

Let me draw an analogy to try to explain exactly what SatoshiDice has achieved. Imagine for a second that you have a bank account with Chase, or any other bank that offers online banking, and you are logged into your online account. On the side of the page you are given the option of making bets. For example, you can send up to $3000 to another account, and instantly receive $12000, with a 24.41% chance of winning. Or you can send $2000 to another account and instantly receive $3914, with a 50% chance of winning. There are many other betting options available to you with a very slight house edge, and profits appear immediately in your bank account and are available for spending.

You could probably see how this might be addictive to a gambler, and tempting to anyone who has the option. If you have a Bitcoin wallet, this is reality.