Bitcoin Update: The Latest On The Crash, Legal Issues, And Innovation
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THREE DEVELOPMENTS IN THE WORLD OF BITCOIN. The price of Bitcoin on Japanese Bitcoin exchange Mt. Gox is getting hammered, dropping 50% to around $110 in just a 12-hour period yesterday. Compare that with the $579 price of a bitcoin on Coinbase. So why not buy Bitcoin on Mt. Gox and sell it on Coinbase? As we reported, Mt. Gox halted Bitcoin withdrawals last week due to technical problems - that's what's causing the price to drop so dramatically. It's also a tremendous blow to people's confidence in the emerging payments system. (Business Insider)
As the price of Bitcoin continues to drop, a new innovation. San Francisco-based Bitcoin wallet Coinbase announced a new feature in collaboration with Balanced, a company which provides payment technology for online marketplaces. The technology behind the feature is complex, but in effect it allows people to store their Bitcoin payment credentials on marketplaces that use Balanced's payment platform - it's the same concept as storing a credit card on Amazon so that you don't have to re-enter it when you want to make a purchase. Users will have their Bitcoin payment credentials stored in Balanced's digital vault where it also stores other payment credentials such as credit card numbers. The feature makes paying with Bitcoin easier, but people could be wary of storing credentials with an online merchant when Bitcoin transactions don't have the same fraud protections as credit card transactions. (Payments Source and Balanced)
If you aren't using Bitcoin for crime, the FBI could still seize it. At least according to Alex Daley, chief technology strategist at Casey Research. The crux of the problem is that Bitcoin isn't really anonymous. In fact, all Bitcoin transactions are kept in a public ledger which could theoretically be used to identify who made Bitcoin transactions. That means that if you receive payment in bitcoins that were previously used for something illegal, like buying drugs, the Feds could in theory seize it from you because the person who gave it to you didn't actually "own" the ill-gotten bitcoins - so they can't legitimately transfer them to you. (Bloomberg Businessweek)
SQUARE FIGHTS AIDS WITH ITS MOBILE CARD READER. Square announced that it has teamed up with RED, an organization fighting HIV/AIDS. The SQUA(RED) reader is a typical Square reader except that it comes in red. The reader comes with a $10 donation towards fighting HIV/AIDS. (Square)
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QUOTE OF THE DAY: "There are a number of ways payments can be made simpler and easier for the customer using iBeacon technology. We'll start trialing this in our branches around customer recognition, being able to identify our customers in a personalized, individual way. The second thing we'll do is figure out how to use our technology to drive better, easier, smarter ways to do payments and other transactional services," says Simon Pomeroy, Westpac New Zealand's chief digital officer. (American Banker)
SAMSUNG TEAMS UP WITH INGENICO TO OFFER MOBILE PAYMENTS. The French payments technology and hardware provider has announced a partnership with Samsung. The press release is cryptic but says that the partnership will pair Ingenico mobile payments technology and card readers, and Samsung's tablets and phones. We've reached out to Ingenico for further clarification (Ingenico)
PAYPAL ADDS NEW POSITION "HEAD OF OPEN SOURCE." PayPal announced yesterday that Apple veteran Danese Cooper would join the company as its first Head of Open Source. The creation of the position is part of a larger move by PayPal to improve its standing with external developers. (Wired)
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