Bitcoins have lost $174,458,406.27 since July 9th 2011.
September 27, 2011
A report has been published showing a massive loss to the bitcoin economy.
Total Value of Entire Bitcoin Economy $36,126,021.96
A total figure of USD $1,060,609.29 per month must enter the bitcoin economy to keep the current value of USD $4.910228203451 per BTC
$245.51 worth of BTC are printed every 10 minutes by mining or $1,060,609.29 per month or $12,727,311.50 per year.
Bitcoins traded at nearly $35 at their peak with ~6,000,000 coins in circulation on June 9, 2011 the total Bitcoin economy was valued at $210,000,000.
Bitcoins are now trading at $4.910228203451 with 7357300.000000001 coins in circulation the total Bitcoin economy is now valued at $36,126,021.96
This represents a net loss of $174,458,406.27 from peak to this exact moment (updated in real time) of the entire bitcoin economy.
If Bitcoins were stable at their peak of $35 on June 9, 2011 , the bitcoin economy would be worth $257,505,500.00 rather than $36,126,021.96
Related Posts:
Flexcoin the bitcoin bank announces Cold Storage
September 26, 2011
Flexcoin has announced Cold Storage for bitcoins. It’s a user definable cold storage option so individuals and companies that have bitcoins can send them to a physically turned off computer.
This increases security for the users by automatically forcing a human audit prior to withdrawing their bitcoin, as the machines have to be turned on, and resent back to the users.
This is a first for any Ewallet and allows for online way to keep their bitcoins offline without being tied to a desktop.
Another key reason that individuals find the service appealing is that all coins that sit in cold storage still generate a discount payment. Meaning individuals earn bitcoins on their stored value. Solving the time value of money problem that has plagued bitcoins since inception.
As usual, flexcoin to flexcoin transfers are 100% free.
For more information read flexcoin.com, the bitcoin bank‘s TOS located under the FAQ menu. For information on how Flexcoin Generates discount payments, please read the Fee Schedule also located under the FAQ menu.
Related Posts:
The Bitcoin Printing Press Problem
September 7, 2011
Bitcoin has been promoted as stable digital currency, and in fact it’s 100% transparent. The opensource nature of bitcoins as well as the technology behind it has a strong allure with several groups. The libertarians love it due to the fact that it’s money supply is well documented and not controlled by a core group of people or individuals. The technology savvy group loves it due to the innovative way it distributes though a peer to peer system. Others like it due to the nature of how bitcoins are decentralized.
Some history surrounding the bitcoin system:
The bitcoin system was initially designed by an individual (or group) that goes by the name of Satoshi Nakamoto (most likely the name is an alias). The self published whitepaper was published in 2009. In mid 2010 the currency was actively traded for pennies for each bitcoin. However in 2011 after some articles surrounding it in mainstream media it skyrocketed to 35 dollars a bitcoin. Showing an appreciation of 10′s of thousands of percentage points.
Then the bottom fell out in July after a series of high profile hacks, high profile thefts and a questionable PR individual that has a legacy of fraud. It was amazing that the currency still traded in the 10 dollar per bitcoin range.
Now bitcoins are trading in the mid 6 dollars per coin range. Still an impressive jump from the pennies it traded from last year, and the year before it didn’t exist.
It proves that it has staying power due to the distributed nature of them. It also proves without a doubt that the currency can survive huge amounts of problems, especially at it’s sub 900 day old age.
However it’s fault may not lie with the hacks, scandals and theft, it’s fault may lie with the initial design by Satoshi Nakamoto. It’s strongest strength may turn out to be strongest weakness as well.
Currently the bitcoin system awards 50 coins every 10 minutes to whoever solves a block. It’s typically called mining. The miner then when he receives his award he also generally passes along any transactions which include fees to him.
This means that the typical “reward” is 50 coins plus 2 or 3 additional as transaction fees (if it was a a decent transaction loaded block).
This extremely innovative way to continue transactions allowed for individuals to have timely transactions. It will continue to reward 50 coins every 10 minutes. However the amount is halved every 4 years.
The coin value of a block is 50 BTC for each of the first 210,000 blocks, 25 BTC for the next 210,000 blocks, then 12.5 BTC, 6.25 BTC and so on. In other words it continues to half in reward all the way until the year 2140. Then the total number of coins in circulation will remain static at 20,999,999.9769 BTC.
The problem is when Satoshi Nakamoto designed the bitcoin system in 2009 he didn’t allow for a mechanism to decrease or increase the creation rate. It’s not the total of 21 million bitcoins that are the problem, it’s how fast they are released that is.
The algorithm as designed expects demand to decrease in 1/2 strength amounts every 4 years over the next 129 years.
The problem is that since there is no way to adjust the reward ratio, the coins fall in value dramatically if demand doesn’t meet that high growth rate. Flexcoin, the bitcoin bank released a study showing exactly how much money needs to enter into the bitcoin community in terms of growth every month. It’s a staggering $1.5 million dollars at current growth rates just to maintain the $6 dollar per bitcoin price, because $1.5 million dollars (at current prices) worth of bitcoins are created every month. It’s a grand total of 216,000 new bitcoins printed per month.
216,000 multiplied by the spot price of each bitcoin printed every 4 weeks and you start to appreciate the magnitude of it’s inflation rate.
Now this number drops in 2013 to half that figure, that means in 2013 it will need only $750,000 entering the system (again assuming 6 dollars per bitcoin, which most likely will change dramatically from this point).
A central bank when faced with a huge inflation rate like what bitcoins are experiencing would virtually halt printing of coins until demand caught up. However since bitcoins lack that aspect it’s going to be a downhill road in the per bitcoin price until 2013 unless demand increases dramatically (possible, but unlikely). Then the banker would most likely allow for it to increase based on demand back to it’s natural level.
However since we’re at the mercy of a algorithm penned in 2009, we have to wait until 2013 when the algorithm automatically will attempt to stabilize the price by reducing by half the amount of bitcoins printed. It’s an endless swing cycle until the year 2140 (abit a reduction in swings as each instance is half as much as the one prior).
Perhaps the best way to phrase this is simple. If bitcoins can survive with an above 3 dollars per bitcoin price until 2013, it’s most likely going to be with us forever.
Related Posts:
Venture Capital Firms expressing interest in bitcoin companies
August 30, 2011
Several of the larger players in the bitcoin world have noticed a serious uptick of venture capital firms requesting information regarding bitcoin related firms.
“we’ve had nearly 1/2 a dozen VC firms asking for information regarding our services in the past week alone” stated one of the owners of a bitcoin exchange.
The interest has increased dramatically as literally there are only a handful of players, most notable are Mt.Gox, Flexcoin, Tradhill and CampBX. All of them being exchanges other than Flexcoin which is more akin to a bitcoin bank and poses to potentially modify the way people send and receive bitcoins.
The bitcoin community has been under siege over the past several months due to security concerns as well as a stagnate value per coin. “The fact that bitcoins survived without any external assistance over the past month proves to us that the concept has staying power” noted a San Francisco based Venture Capital executive.
From what we are told, they are treating bitcoin firms not as just a new technology, but rather as a vehicle to move other currencies or investment vehicles across the internet. When asked to elaborate they declined other than to state “a bitcoin transfer doesn’t have be be bitcoins only”
What exactly are these people planning on building with these bitcoin companies?
Related Posts:
Flexcoin announces Cold Storage for the bitcoin currency
August 19, 2011
Flexcoin the bitcoin bank will be launching over the weekend the first user defined cold storage facility for the bitcoin online currency.
The users will be able to define what they want sent to cold storage. Meaning if a client has 10 bitcoins with flexcoin, he can specify that he wants 4 of them sent to cold storage. This effectively puts them off line and inaccessible.
Cold Storage is roughly akin to sending your bitcoins to a computer that isn’t online, hence the threat of any online hacking is effectively nill as it’s very difficult to hack a computer that is unplugged.
What makes cold storage with flexcoin so alluring is that all bitcoins in cold storage receive discount payments the same way they are with the normal flexcoin service. Flexcoin has built a secure way to bring them out of cold storage, as they are processed the next business day subjecting them to human review before being released.
This allows individuals to safely store their bitcoins, and earn payments when they are being stored. This is a first for the bitcoin community. All the details will be released on flexcoin over the weekend!
Related Posts:
First Bitcoin Bank open to general public - demand is high for ID’s
August 10, 2011
The worlds first bitcoin bank has opened to the general public. The ewallet has been called one of the best services to the bitcoin community as it solves virtually all of the problems that hindered bitcoins from becoming more mainstream in commerce.
It’s a game changer in the bitcoin community.
It allows people to access their coins anywhere, hence now it’s not limited to the machine you installed the physical client on, as it can be accessed by your smartphone (turning your phone into your debit card).
The biggest story however is the land rush. Many view that flexcoin id’s are helpful for future e-commerce with bitcoins. So people are grabbing the best ID’s possible, and the demand has been high for a free flexcoin id.
Before flexcoin people had to send bitcoins to addresses like “17KxFiNCwDXdxDxUMhWb7RLj7REnSJ1M8P” after flexcoin an id such as “coffeeshop” would do the transfer. This simplifies commerce greatly, it allow is an instant transfer as compared to the traditional “next block wait” which could be between 10 minutes and 3 days depending if it was a small transaction with no miner fee.
Another advantage is that flexcoin pays discounts to account holders. This allows many to use it as a saving account for bitcoins.
Flexcoin solves the micro-payment problem. Since the 1990′s people wanted to be able to accept micro payments, but the credit card fees were way to high (it would cost 30 cents to accept 10 cents). Flexcoin solves that problem as flexcoin to flexcoin transfers are free (as well as instant) allowing for a newspaper to charge something tiny for an article, and be paid instantly and profitability.
Back to the id’s however. The demand is so high that it’s similar to a domain registration circa 1995. A flood of users have been looking for generic terms such as “coffeeshop” if their coffeshop wishes to accept bitcoins.
The company has been aware of the recent news regarding bitcoins and security, they spent large amounts of time and money on security. Though no service on earth is 100% safe, their service has been audited by professionals and hackers alike and has been given a clean bill of health and security. Another factor in trust since flexcoin is backed by Yooter InterActive Marketing a company that has fortune 500 firms as clients and has been in business for a decade, it allows for a level of trust not seen in the bitcoin community since it’s inception.
Regardless the site has allowed for registrations for the general public. Many are rushing to get the valuable flexcoin ID’s now.
The company stresses that it is not a true financial bank as legally defined, but it is a bitcoin bank as only bitcoins are accepted.
Related Posts:
Bitcoin Ewallet vanishes from internet - up to 1.3 million gone
August 2, 2011
The debate is heating up regarding the service mybitcoin.com , evidently the website has been down since July 29th 2011, several days later it’s still down.
The problem at hand is that it’s estimated that between 25,000 and 100,000 bitcoins were stored at mybitcoin.com At current market value of ~$13 USD per bitcoin, it translates to $325,000 to $1,300,000 that vanished off the face of the earth.
The sum may be the first single million dollar theft of bitcoins.
The jury is out regarding if the coins were stolen and the owner vanished, or if the system was hacked and the owner vanished or lastly a hardware problem and the owner vanished. The end result is the owner of the site has not been reachable since the incident.
“Bitcoin Weekly funds is stuck there too! Also, 600 BTC that I am responsible for.” An individual posted in the forum, meaning he is out $7,800
“You might as well kiss your coins goodbye. They’re gone. Get over it.” another individual posted.
The end result is that the individuals cannot access their bitcoins and potentially over a million dollars are either stolen, or vanished (as if paper dollar bills were literally burned).
This is hurting Bitcoin credibility states Roger Wehbe the president of Flexcoin, the now largest Ewallet / bitcoin bank. We’re building a legitimate service, and yet this hurts not only Flexcoin, but Mt.Gox, Tradehill and every other bitcoin service. We find ourselves now the largest Ewallet, but this is NOT how I wanted to earn the title, I wanted to earn it by providing the most secure easy to use service. Not because the other guy did something like this.”
Related Posts:
Marcus Tullius Cicero provides advice to Washington
July 26, 2011
“The budget should be balanced. Public debt should be reduced. The arrogance of officialdom should be tempered, and assistance to foreign lands should be curtailed, lest Rome become bankrupt.” - Marcus Tullius Cicero 106 BC-43 BC
Honestly this is becoming too much for the average American to handle. We have complete dysfunction in Washington.
At stakes are a massive amount of US dollars not being paid, a spike in alternative currencies like bitcoins and gold and a whole new level of distrust of Washington.
The root of the problem is that the level of debt is unsustainable. This is what the fight is about. If we never committed to such huge levels of spending we wouldn’t have this problem in the first place.
But alas we do. We charged millions of Americans hard earned money over their lifetime for social security, now we have to pay them for what they put into the system but the system (the whole system, not just social security) is trillions of dollars in debt and now needs regular increases to our credit card limit.
At one point this party is going to crash. In many instances the tea party wants the party to crash now rather than later, in their opinion it’s better to take the medicine now. The problem is try telling that to 86 year old grandma that there is no more money for her.
We hear you Marcus Tullius Cicero, we hear you.
Related Posts:
Large number of invites sent out today for flexcoin the bitcoin bank
July 22, 2011
There will be a large number of invites handed out today for the bitcoin bank. Several new pages were posted on the site this morning hinting at it’s strengths compared to the standard bitcoin currency. Also added were a TOS, Privacy Page, and a few others.
Flexcoin has peaked interest within the bitcoin community due to the fact that the bank pays interest to it’s account holders, Solves the “coffee shop” problem and gives vendors an easy to use ID suitable for printed material and marketing rather than a long sting while at the same time fundamentally allowing anyone to access their bitcoins from anywhere. Basically revamping the system to something that can actually be used for general commerce.
It has the potential to fix all the bitcoin problems and allow the currency to go more mainstream.
Currently flexcoin has several hundred users, with the only limiting factor being the highly sought out invites.
We were told to “watch our inbox” over the next 24-72 hours.
Related Posts:
Mt.Gox buys MtGoxLive.com but has no money to refund stolen bitcoins
July 20, 2011
Mt.Gox buys MtGoxLive.com , but the purchase price was not released.
MtGox.com has agreed to acquire MtGoxLive.com, the largest independent provider of bitcoin related web and mobile applications and services. This move strengthens MtGox.com’s portfolio, with the host of applications and services that will be joining the MtGox.com family of services. according to the press release
Mt. Gox has been under some intense fire since the hacking incident, with individuals complaining that they have yet to be reimbursed for their stolen bitcoins but yet Mt. Gox has the funds to go on a buying spree?
It’s an honest question, why can their customers go without their stolen bitcoins due to Mt. Gox lax security but Mt. Gox can go buying up companies?
Clearly there’s a mismatch.
To make matters worse Mt. Gox tells the victim to file a police report, like the local police department even knows what bitcoins are in the first place.
This is more of an insult than anything.
Related Posts:
Recognized by Advertising Age Magazine as top Power 150 news outlet for Advertising and Marketing.
Recognized and listed in Google News. Don't stress, we're Satire
Ad Agency Advertising
