Bitcoin briefly soars to record $147 high, driven by Cyprus bank flap

Attraction of non-gov currency draws punters


Virtual currency Bitcoin soared to a record high of nearly $147 yesterday as Euro-spurred interest continued to boost its exchange rate.

The e-cash fell back later in the day to $117, but the value of all Bitcoins in circulation is still well on its way to $1.4bn.

The online dosh has rocketed from just $10 last November as the crisis in Cyprus and the spreading lack of faith in governments and currencies in the wake of austerity and recessionary pressures push folks to invest in something out of the control of The Man.

Bitcoins aren't government-backed and don't have a central bank, leading some investors to treat it as a kind of online version of gold or silver - a safe haven for their cash.

However, that general lack of oversight is also the main problem that critics have of the system, claiming that Bitcoin offers criminals an untraceable way to launder their ill-gotten gains.

Individual Bitcoins exist as a digitally signed solution to a complex mathematical algorithm. New Bitcoins are 'mined' by calculating solutions for unsolved algorithms. A detailed explanation is available on the Bitcoin website (PDF, page 4) and Wikipedia also has a non-brain-melting version.

The value in the system was in the sheer time needed to solve the algorithms and create each unique Bitcoin. In addition, there is a limit of 21 million Bitcoins that can be mined. Creating a limit on the total quantity of Bitcoins puts it into the same monetary league as gold, with finite supply creating greater demand.

But, unlike gold, there's no physical reason why there can't be more Bitcoins; that's just the current rule. Right now, estimates reckon there are nearly 11 million Bitcoins in existence.

As with all new things, particularly online new things, analysts are divided on whether Bitcoins are the greatest thing since sliced bread or the latest ephemeral bubble destined for a loud pop. Meanwhile, as more savvy investors get involved and start looking for ways to short the currency - i.e. bet on the price plummeting - regulators are starting to sit up and take notice.

The Financial Crimes Enforcement Network (FinCEN) in the US, which enforces laws against money laundering, has already said that a number of parties in the Bitcoin biz qualify as money service businesses (halfway down) so they need to register with the government, collect info on their customers and take active steps to combat money laundering. ®

Similar topics


Other stories you might like

  • Experts: AI should be recognized as inventors in patent law
    Plus: Police release deepfake of murdered teen in cold case, and more

    In-brief Governments around the world should pass intellectual property laws that grant rights to AI systems, two academics at the University of New South Wales in Australia argued.

    Alexandra George, and Toby Walsh, professors of law and AI, respectively, believe failing to recognize machines as inventors could have long-lasting impacts on economies and societies. 

    "If courts and governments decide that AI-made inventions cannot be patented, the implications could be huge," they wrote in a comment article published in Nature. "Funders and businesses would be less incentivized to pursue useful research using AI inventors when a return on their investment could be limited. Society could miss out on the development of worthwhile and life-saving inventions."

    Continue reading
  • Declassified and released: More secret files on US govt's emergency doomsday powers
    Nuke incoming? Quick break out the plans for rationing, censorship, property seizures, and more

    More papers describing the orders and messages the US President can issue in the event of apocalyptic crises, such as a devastating nuclear attack, have been declassified and released for all to see.

    These government files are part of a larger collection of records that discuss the nature, reach, and use of secret Presidential Emergency Action Documents: these are executive orders, announcements, and statements to Congress that are all ready to sign and send out as soon as a doomsday scenario occurs. PEADs are supposed to give America's commander-in-chief immediate extraordinary powers to overcome extraordinary events.

    PEADs have never been declassified or revealed before. They remain hush-hush, and their exact details are not publicly known.

    Continue reading
  • Stolen university credentials up for sale by Russian crooks, FBI warns
    Forget dark-web souks, thousands of these are already being traded on public bazaars

    Russian crooks are selling network credentials and virtual private network access for a "multitude" of US universities and colleges on criminal marketplaces, according to the FBI.

    According to a warning issued on Thursday, these stolen credentials sell for thousands of dollars on both dark web and public internet forums, and could lead to subsequent cyberattacks against individual employees or the schools themselves.

    "The exposure of usernames and passwords can lead to brute force credential stuffing computer network attacks, whereby attackers attempt logins across various internet sites or exploit them for subsequent cyber attacks as criminal actors take advantage of users recycling the same credentials across multiple accounts, internet sites, and services," the Feds' alert [PDF] said.

    Continue reading

Biting the hand that feeds IT © 1998–2022