Overstock.com is going to start accepting bitcoin in 2014. They say the cost is a key driver for the bitcoin move as they save 2% on credit card interchange fees. I think this is not related to the fees, or at least it's not only about the fees. This is marketing move: bitcoin-enabled merchants attract new, constantly growing group of customers - bitcoin owners.
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Interesting review of a company dedicated to bitcoin mining. Those days, when anyone could mine bitcoins using regular desktop computer, are gone forever: The [bitcoin mining] machines ... are worth about $20,000 each on the open market. Today, all of the machines dedicated to mining Bitcoin have a computing power about 4,500 times the capacity of the United States government’s mightiest supercomputer, the IBM Sequoia, according to calculations done by Michael B. Taylor, a professor at the University of California, San Diego. The computing capacity of the Bitcoin network has grown by around 30,000 percent since the beginning of the year. Interesting article about bitcoin in The New York Times. "One could argue that bitcoin isn’t chiefly a commercial venture at all, a funny thing to say about a kind of online cash. To its creators and numerous disciples, bitcoin is — and always has been — a mostly ideological undertaking, more philosophy than finance." The question then arises as to whether security of bitcoin wallets and payments is more philosophical or financial problem... Is Bitcoin going to be the future technology of online payments? And maybe not just online? Bitcoin hit a high of $1,073 on Tokyo- based exchange Mt. Gox, the best-known operator of a bitcoin digital marketplace, compared with just below $900 the previous day. Bitcoin is not backed by physical assets and is not run by any person or group. Its value depends on people's confidence in the currency. It has been gaining acceptance by the general public and investment community but has yet to become an accepted form of payment on the websites of major retailers such as Amazon.com. The popular Costa Rica based online payment system Liberty Reserve went down following the arrest of his founder Arthur Budovsky (Артур Будовский). Budovsky, 39, a former U.S. citizen and naturalized Costa Rican of Ukrainian origin, was arrested in Spain as part of a money laundering investigation.
I found interesting U.S. Department of Justice report about money laundering in digital currencies. In addition to information about the money laundering payment systems, it explains in an accessible form the methods of anonymous Internet access: Various technologies can increase the utility of digital currencies for money laundering by providing additional anonymity and networking abilities. Because digital currency transactions are conducted over the Internet, they can be traced back to individuals’ computers. The origins of Internet activity can often be identified using IP (Internet Protocol) addresses. Each computer on a network, including the Internet, must be uniquely identified by an IP address in order to receive information, such as web pages, requested from remote servers. These servers, including digital currency servers, track and record users’ IP addresses. However, anonymizing proxy servers and anonymity networks protect individuals’ identities by obscuring the unique IP (Internet Protocol) address as well as the individuals’ true locations. Anonymizing proxy servers and anonymity networks are designed to prevent identification of Internet users’ IP addresses. Such proxy servers and networks redirect users’ activities so that they appear to originate from a proxy server’s or anonymity network’s IP address rather than the IP address of an individual Internet user. Furthermore, mobile payments conducted from anonymous prepaid cellular devices, such as web-enabled phones, may be impossible to trace to an individual. Such portable devices that provide Internet access enable transfers of digital currency; afterward, they can be destroyed, easily and inexpensively, to prevent forensic analysis. |
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