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  • Aug 2, 2014
  • Updated: 12:25am

Bitcoin

Bitcoin, released to the world in 2009 by a person or people called Satoshi Nakamoto, is not backed by a central bank or a government and is seen as an alternative payment system. In February 2013, Bitcoin went into the mainstream as a monetary crisis threatened to bankrupt Cyprus, seen as a safer bet. Early adopters of Bitcoin have been richly rewarded as the price has soared – in one case, a young Norwegian bought a house from an $850,000 windfall on a US$22 investment.

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DIGITAL CURRENCIES

Bitcoin firm Hong Kong Crypto Exchange mum on backers' identities

PUBLISHED : Sunday, 02 February, 2014, 4:23am
UPDATED : Sunday, 02 February, 2014, 9:34am
 

Hong Kong's latest bitcoin exchange is set to become the city's best funded even amid questions about the identities of its backers.

A refusal by those running Hong Kong Crypto Exchange to name the local people who have invested US$2 million in the business has reignited concerns about criminal use of the digital currency.

The city's third bitcoin exchange cited non-disclosure agreements for its refusal to reveal its owners' identities.

"It is no secret nowadays there are several large exchanges in the world. However, all of them experience difficulties working with fiat currencies," said the company's chairman and CEO, Pheng Cheah. "Our exchange won't have these shortcomings."

After the arrest last week of bitcoin promoter Charlie Shrem, charged by US prosecutors with conspiracy to launder money, the Customs and Excise Department warned currency-transfer businesses to ensure they had proper safeguards in place to prevent money laundering and terrorism financing.

"You should assess the extent to which your services are vulnerable to ML/TF [money laundering and terrorism finance] abuse," it said in a circular released by the Money Service Supervision Bureau. "This issue is especially relevant where emerging technological developments may facilitate anonymity."

“Anonymity of the investors may not be conducive to building trust,” said Charles Mok, lawmaker representing the information technology sector. “But then again, even who initiated bitcoin itself is a secret, so how much does it further matter that the investors of an exchange is anonymous? It may or may not matter much. Those who want to play will continue to play. Those who don’t trust it to begin with will not.”

Zennon Kapron, head of mainland-based financial research firm Kapronasia, said the deal was “indicative of the opportunities that are available for exchanges that look at the Asia market.” He added it was not uncommon for investors to seek anonymity in these kinds of deals.

It seems investor interest in bitcoin exchanges remains even after a crackdown by the People's Bank of China late last year. The move by the PBOC saw the price of bitcoin fall more than 35 per cent to 4,900 yuan (HK$6,200) from its peak of 7,588 yuan.

Not all investors in bitcoin companies are keeping their identities secret.

Coinbase said in December it had raised US$25 million from Silicon Valley venture capital firm Andreessen Horowitz, an early investor in Facebook and Twitter.

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nathan.ries
I "believe in bitcoin", not because I think I can make money quickly off it, but for the mathematics behind it, and the utility of it.
6 blocks per hour * 24 hours a day * 365 days a year * 4 years a cycle = 210,240
Multiply that by the blockchain rewards which halve every cycle [50 + 25 + 12.5 + 6.25 ...] = 21 million
Mathematically limited to 21 million coins, with each coin currently divisible to one millionth of a full coin. Should one millionth of a coin ever be considered valuable, we can then further divide to one billionth or one trillionth of a coin, since virtual currencies have an ability to divide and still be usable unlike any other currency in existence. In order for this to "change" you basically have to create a new coin, which is already occuring now. The reason these altcoins do not dethrone bitcoin, is the network effect. You have to convince millions of users to switch to a new currency and devalue their holdings. The equivalence would be trying to convince Americans to switch to the Euro... good luck with that!
I can post an address to a wallet anywhere online without fear of my coins being stolen to have immediate financial transactions instantaneously to anyone with an internet connection around the planet without having to go through a centralized third party.
The technology that bitcoin represents is an answer to the Byzantine General's problem. This technology is not going to go away.
TenioLatev
Its also called inverted inflation and is not any better than fiat money. No currency in human history has ever survived long enough to be globally adapted, except of gold. So at one point bitcoin will wipe out everybody. This time no bailout will be needed and humans will be slaves again, robbed of their money. Its another scam made up by the criminal elite to rob people of their hard earned money.
paulgillis
The math may make sense, but it remains a money laundering scam.
john.craft.5851
Make Money with Bitcoin! Check out www.99moneymaking.com/bitcoin-secrets/
daily
Bitcoin is a scam, but it just uses a lot of hype to cover up the background money laundering and pyramid scheme it is building up..............for those of you who are pouring your money into this scam, you will lose it all sooner or later.
razorfish
although after China government blocked BTC activity, it does not effect bitcoin price so much.
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sipsip1238
It may not affect prices, but it does seem to affect your command of the English language.
To be honest, if people claim that they "believe in bitcoin" because they think they can make money quickly off it, nothing else.
 
 
 
 
 

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