The recent volatility of Bitcoin price in various major Exchanges, has created a lot of buzz in the financial markets. People have started taking Bitcoins seriously. Although the recent transaction malleability has feared some, a lot of business have started accepting Bitcoins as a mode of payment, realizing the potential in Bitcoin market. The year 2013 has seen a number of businesses including Virgin Galactic, WordPress, Reddit and Namecheap offering their services in exchange for Bitcoins.

 

The recent opening of Bitcoin ATMs in different parts of the world has increased the Bitcoin popularity both amongst both common public and companies. Here are the companies that started accepting Bitcoins in 2014:

 

1. Tracking Point: This Texas based gun company has recently announced that it would accept Bitcoins in exchange for its products and services. According to them, although Bitcoins are difficult to trace, anyone buying firearms with Bitcoins have to undergo an intensive background check before any purchases. Rifles at their store start at about $10,000, which translates to roughly 23 Bitcoins. Soon, many firearms stores in the U.S started accepting Bitcoins as a mode of payment, without compromising on background checks for purchases.

 

2. Mountains Plus: This medium-sized retailer that sells outdoor equipment like tents, car racks, footwear, mountaineering equipment, sleeping bags and pads, recently announced that it would accept Bitcoins in exchange for its products and services. Mountains Plus has partnered with Coinbase for accepting Bitcoins. The company has been on the Inc 5000 Fastest Growing Company for the last three years.

 

3. Miami Exotic Car Rentals: Miami Exotic Car Rentals is a small car rental company in Miami, FL. It recently started accepting Bitcoins as a mode of payment for customers renting its exotic cars. Previously charging customers by credit card, the company now also charges credit using Bitcoins. Mostly high end cars such as Audi R8, Lamborghini and Porsche are available with the company. It charges about $200 - $2000 per day for renting these high end cars. Equivalent Bitcoins are charged, including some extra Bitcoins as deposit which are later returned.

 

4. Surgery Center of Oklahoma: The Surgery Center of Oklahoma, a leading AAAHC accredited, doctor-owned, multispecialty surgical facility in Oklahoma, USA has recently announced that it would be accepting Bitcoins as a mode of payment for its services. The company sees itself as a customer friendly facility and is willing to use any mode of payment from its patients. It will not be working with any vendors or middlemen, instead it will use these Bitcoins for direct conversion into dollars.

 

5. Square Market: Square Market is a leading online business that that specializes in E-commerce and mobile payments, including many other services. Their website allows you to increase your online presence by letting you create a free web page for your business. Square Market recently started accepting Bitcoins as a mode of payment for their services. Using the “Pay with Bitcoin” option, buyers with a mobile wallet will need to scan the QR code provided to make a payment and those with hosted wallets will receive instructions through email for making payments. Square Market is using the Bitcoin transaction processor, Coinbase to process such payments. However, the company charges a slightly higher transaction processing fee for Bitcoin payments.

 

6. Clink Hostels: Clink Hostels, the leading cheap accommodation hostels in Central London, UK have now started accepting Bitcoins as a mode of payment for their services. The friendly family-run business uses a straightforward QR code system for receiving payments, so travelers pay Bitcoin straight  to Clink’s wallet. However, due to the volatility in the Bitcoin market, the company would soon change this feature and use a Bitcoin transaction processor, preferably Coinbase.

 

7. Stripe: Stripe, a leading online payment website for emerging businesses, has started  accepting Bitcoins as a mode of payment for its services. The online and mobile payments startup has launched a Bitcoin payments pilot with a few select customers, including Canadian encrypted data backup service Tarnsap, and it plans to launch a full beta trial in the near future. The beta option of Stripe is successful might be an excellent alternative for crypto-currency brokers like Coinbase.

 

8. Cooperatize: The leading advertising platform for sponsored content, Cooperatize recently announced that it will be accepting Bitcoin as a valid form of payment for its services. Furthermore, Roger Wu, the cofounder of this native advertising and storytelling platform, wrote a detailed article on why they accept Bitcoins. He states that the low transaction costs, less theoretical risk, security, publicity and the Bitcoin protocol were some of the main reasons for their acceptance of Bitcoin payments.

 

9. Cups and Cakes Bakery: The San Francisco, CA based company, Cups and Cakes Bakery that is known for its delicious cupcakes is now accepting Bitcoins as a mode of payment for its products. The company directs you to a specialized account on Bit-Pay, a Bitcoin transaction processor, where you can pay Bitcoins for your favourite cupcakes! This decision would be greatly welcomed in the region as it is known for its vast techie population for whom Bitcoin is the next big thing.

 

10. Foodler: The online food delivery service Foodler, is now allowing its customers to pay with Bitcoins for its services. The website advertises that you can now use Bitcoins to get food delivery and takeout from all 14,634 Foodler restaurants. The company also pays the Bitcoin mining fee for every transaction and adds 0.001 BTC for every deposit of 0.1 BTC.

 

A number of such small, medium sized and even high profile businesses have now started accepting the online currency to make themselves more customer-friendly. The risks are not deterring small businesses from accepting Bitcoin as a mode of payment. This is constantly increasing their online presence also and opening them to a wide range of possibilities with the increased visibility. Thus, the year 2014 is turning the Bitcoin into reality. That day is not far away, when you can get a loan in Bitcoins, pay your college tuition fees in Bitcoins and maybe even buy a house with Bitcoins. 



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Last month, Mt. Gox had halted all transactions due to a technical glitch in its system (Transaction Malleability DDOS). This sent shock waves all over the world, consequently the Bitcoin price plummeted in all major Bitcoin Exchanges. The Mt. Gox website issued statements that its technical team was working to solve the glitch and would soon come up with a solution. Users were not being able to login on the website to check their balances. But, Mt.Gox couldn’t find the perfect solution and soon filed for bankruptcy. Also, Mt.Gox claimed that it had lost 750,000 bitcoins of customers and 100,000 bitcoins of the Exchange itself. After the once largest Bitcoin Exchange filed for bankruptcy, the investor confidence in Bitcoin was at its lowest.

 

Adding to the problems, the blog of Mt.Gox CEO Mark Karpeles was recently hijacked by hackers. The hackers posted a file which they claim they snatched from Mt.Gox’s servers. Although the authenticity of the file is yet to be determined, the hackers believe it proves that Mt. Gox still holds close to 1 million Bitcoins, even after filing for bankruptcy. Could this mean something? However, Mt.Gox released a spam warning letter directed towards all its users, soon after the hack. The letter warns former users of phishing attacks that may be directed towards them. Soon, Mark Karpeles released a document stating that it had previously assumed that there were no bitcoins in wallets, but it found 199,999.99 bitcoins in an old-format wallet which was used before June 2011. Furthermore, he claimed that this wallet was discovered before his blog was hacked. So, the total number of bitcoins missing now are 650,000. Doesn’t all of this seem fishy?

 

Well, another thing Mt. Gox has to worry about is how to return the found bitcoins to the customers? It’s known fact that tracing Bitcoins to their owner can be a tiresome work. Moreover, the U.S bankruptcy courts don’t have special rules to deal with virtual currencies. So, returning the found bitcoins to their customers is also a huge task.

 

As of the last week of March 2014, Mt.Gox says it is still cooperating with the police to find the missing bitcoins. After the mysterious finding of 199,999.99 bitcoins, U.S federal investigators are looking into multiple theories, one of them being the involvement of a Mt.Gox insider. Adding to the mystery, two years before Mt.Gox filed for bankruptcy, its employees say they challenged their CEO to see if some client money was used to cover operational costs.

 

Could this have been an insider job? Are there some big guns involved in this? Is the money really stolen by hacking or was it never deposited in the Exchange? All these doubts would be cleared only after the court appointed lawyer submits his findings’ report on the extended deadline of May 9, 2014. 



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AuthorTeam Bitcoin
CategoriesBitcoin News

The Bitcoin system is probably the most transparent payment system in the world, since anyone with a node can track a transaction. But, when cautiously used the Bitcoin offers high levels of privacy.

The privacy that the Bitcoin market offers is what sells it! Every Bitcoin transaction requires a set of keys and a digital wallet. But, nowhere does it require the user to reveal their identity. Although some digital wallets, Bitcoin clients and even mining software would require registration with user details, these details would never be attached to any transaction. And thus the details would never surface on the Transaction Block Chain.

Furthermore, since each transaction is associated with a Bitcoin address, which is publicly available for anyone to check the balances, the Bitcoin privacy may be questionable. Sometimes, the users are also required to reveal their identity while buying goods and services on the internet and this may be magically traced to the Bitcoin address. Therefore, it is highly recommended to use new Bitcoin address for every transaction.

Additionally, it is also recommended to use multiple digital wallets for receiving payments, as they may be victims to possible attacks. By doing this, one isolates the possibility of losing away all your money, in case of a theft. One should be extremely vigilant about receiving payments through Bitcoins.

Furthermore, some Bitcoin clients are designed to send the resulting change of a Bitcoin transaction to a different address. For example, if the address A has 10 BTC, and you send 8 BTC to address B, then the Bitcoin client would send the change of 2 BTC to a different address C (pre-defined by you). This makes it difficult for hackers to know whether you own the address A or C. This is one of the best ways to be safe while sending payments through Bitcoins. So, selecting the right Bitcoin client is very important.

You should be careful of where you store the private key. The best places to store the key are offline, where the internet hackers cannot reach. Also, you should be careful about which IP address you use. Most of the IP addresses can be tracked using free online tools. It is essential to know all the safety concerns and constantly being vigilant.

Hacking opportunity

In spite of the anonymous nature of the Bitcoins and the various other safety features of the Transaction Block Chains, thefts, heists and frauds relating to Bitcoins are not uncommon.

In June 2011, Allinvain, a Bitcoin user was the victim of the first major Bitcoin heist. To his shock, a hacker had stolen close to half a million dollars in Bitcoins. In 2012, BitFloor, a Bitcoin exchange site was hacked and 24,000 Bitcoins were stolen. In September 2013, about 1000 Bitcoins were stolen from BIPS, a virtual wallet.

In November 2013, Sheep Marketplace, the online underground bazaar was robbed of Bitcoins worth millions of dollars by a vendor called EBOOK101. A bug in the system was found by the vendor and he got off with 5400 Bitcoins! That, as of February 2014 amounts to about $5 million! Consequently, a group of users started tracking the vendor by following the block chain trail. But, they couldn’t be successful as the vendor was bouncing the Bitcoins from one Bitcoin address to another.

Credit cards fraud victims can reverse and cancel fraudulent transaction by calling the issuing bank. But, since the Bitcoin transactions are anonymous, they are irreversible. This is a huge drawback to the victims as there is nothing much they can do about the theft.

If you think about it, what would you do with the stolen Bitcoins? Let’s think like a thief now. What is the first thing you would do to steal Bitcoins? The answer is copy the keys!

Bitcoin transactions are associated with two keys – a public key and a private key. Owning a Bitcoin essentially means owning a private cryptographic key to a Bitcoin address. The key is a string of letters and numbers. These keys can be stored anywhere in the world like a hard drive, an online storage account or even a tattoo on your body. Who cares?

This is where attacks can be easily carried out. The entire Bitcoin system is protected by various security levels, but the vulnerability lies in gaining access to the one string that controls the whole system. The private key is the main component of the Bitcoin system, through which the initiation of a Bitcoin transaction is made. In an online key storage company, what would you do if you had access to the key database? Copy the whole database, isn’t it? That’s what an insider working at such companies can do. Once acquired, you can spend the Bitcoins in any way you please, until the owner removes them from his Bitcoin address.

But, there’s again a catch here. Since, the Bitcoin transactions are publicly available to all the users through the blockchain; it would be hard for you, the thief, to get away with it. Although, the present tracking techniques can only identify the transaction location but not the identity of the user.

If you try to move the Bitcoins to another address, that path would also be recorded in the transaction chain. But, there is a way out. A thief can transfer the Bitcoins in small amounts to different address, eventually converting all the stolen Bitcoins into safer ones. This way it is highly impossible to track the thief and this is how a hacking or theft takes place.

Once, the thief gets the stolen Bitcoins converted into safer ones, he tries to sell them. But, since the Bitcoin market is still relatively small, any huge sale would instantly bring down the price of the Bitcoins as it would trigger other users to sell.

So, a thief would unload these Bitcoins using different easing techniques such as Dollar Cost Averaging, where the small subsets of Bitcoins would be eased into the market at regular intervals. This would avoid panic as there would be an unnoticeable dip in the market price.

Therefore, it is important for Bitcoin users to constantly keep a track of such thefts to improvise the ways of key storage. Furthermore, the user should be very cautious about whom he gives access to his key, as there is no regulation that can trace or retrieve stolen Bitcoins.



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AuthorTeam Bitcoin

Typing “Bitcoin” in Google search would give you a million articles on news related to Bitcoin - “Bitcoin ATM opens in Canada, A major Bitcoin Exchange halts trading, Bitcoin traders make millions in just a few days,” and what not! So, what makes Bitcoin so popular? The reason why Bitcoins are so popular is because of their advantages. Some use Bitcoin as a form of currency, some use them as an asset to trade, while some use them as a mode of payment for goods and services online. Listed here, are some major advantages of Bitcoin.

Safety and Control

Safety is one of the most important features of the Bitcoins. Bitcoins serve as a democratic reform in the financial world. The power is vested in the hands of the investors. This brings the investors to a state of full control of the Bitcoin transactions. This makes it highly impossible for the vendors to charge additional unnecessary costs like in other modes of payments. This again cuts a saves a lot of money to the investor. Identity thefts are common in developed countries. According to statisticbrain.com, a renowned statistics website, the average number of identify fraud victims in the U.S annually is close to 12 million, which is about 7% of the total population. The total estimated loss due to such identity thefts in the year 2013 is $21 billion!

The major sources of such frauds were misuse of existing credit cards (64.1%) and misuse of personal information (14.2%). Why does this happen? This happens because the customers are forced to put their personal information out on the web. Although it is guarded by high-level security software, any breach in the security will result in heavy financial loss for the customer. Bitcoins provide an easy solution to this disastrous problem. Bitcoin payments can be made without giving out the customer’s personal information for a transaction. This largely protects them from identity theft and reduces their annual financial loss. Since the Bitcoin system is an open-source online system, everyday a variety of encryption and backup software is released. This keeps Bitcoins safe and gives the control back to the customer.

 Processing Time

In May 2010, the world’s first real transaction was made to get two pizzas delivered within seconds. So, how can such transactions happen within seconds? Again, since the whole Bitcoin system is online, it eliminates any manual processing time. This allows all Bitcoin transactions to happen with a click of the mouse. Traditionally, to send a wire transfer to another country would take at least 1-4 hours, depending upon the bank if done within the bank processing hours. And with different countries following different working week structures and bank, religious and social holidays, a transaction can even be delayed for days. Bitcoin transactions surpass all these issues as they follow a peer-to-peer online transaction system. When a Bitcoin transaction is made, the Bitcoins directly transfer from one Bitcoin digital wallet (place where Bitcoins are stored) to another, without any third party transaction. This not only saves a lot of processing time but the customer can virtually see his Bitcoins transfer. And since the whole system is online, transactions happen within seconds.

 Low Transaction Fees

Every money transfer in the world has some fees associated with it. Even if the bank provides a free wire transfer in some cases, it has to somewhere bear the costs in the transaction chain. Although online money transfer websites like Xoom, Western Union and MoneyGram charge low transaction fees, the end transaction cost that the customer has to bare is higher than that with Bitcoins. Typical transactional costs include bank fee, custom fee, exchange rate fee etc. And ultimately the customer has to bare a minimum of 0.1% - 1.0% of the money to be transferred as the total transactional cost, depending upon the financial institution. Think about a customer transferring a million or even $100 million, as is done in multinational business deals! The Bitcoin transactions surpass this issue as they are either associated with no or menial fees. They only fees the receiver can incur are when a priority processing is ordered. This results in a faster transaction confirmation by the Bitcoin network.

 Transparency

Every bit of information relating to a Bitcoin transaction is stored in the Bitcoin Transaction Block Chain (similar to a ledger that a bank maintains for all its customers) for anyone to view and verify. Furthermore, the Bitcoin system is secured with cryptography. Thus, no one can alter or control the Bitcoin protocol. This allows a lot of transparency in the Bitcoin system and thus builds trust towards the Bitcoin protocol amongst the investors. This is arguably one of the main reasons for the price rise in recent times.

 Fewer Risks

The first and foremost thing an investor looks for in any financial instrument is the risks involved. Each Bitcoin transaction is secure and irreversible. This acts as a double sided sword. On one side, the transaction being irreversible is beneficial to the merchants as there is no need for PCI compliance and it saves them from fake chargebacks. On the other side, the transaction being irreversible hurts the customer if they order something by mistake as refunds are rarely possible. This also allows merchants to expand in developing countries where the use of credit cards and other online payment services is not yet available. Furthermore, the fact that the Bitcoin system is transparent reduces the risk factor.

 Payment Freedom

The payment freedom, users get by Bitcoin transactions is impeccable. The user doesn’t have to worry about a third party transaction, bank holidays, overseas transaction limits or even round figures. The user can send Bitcoins ranging from a considerable decimal, anywhere in the world seamlessly. Furthermore, the user can access his Bitcoin wallet from anywhere in the world. This ease of access and payment freedom is what makes the Bitcoins viable as a mode of payment online.



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AuthorTeam Bitcoin