Binance, the world's largest cryptocurrency exchange, has claimed that more and more people are turning to crypto investing due to rising inflation.

Maximiliano Hinz, who heads up the company's Latin American operations, told Reuters that people were seeking out currencies like Bitcoin as a way to protect themselves from inflation and the rising cost of living.

As an example, Hinz pointed to crypto investments in Argentina, which he said was now one of the top markets for Binance, alongside Brazil and Mexico. Annual inflation in Argentina is at 90% and Hinz claimed that many of its citizens have poured savings into Bitcoin, despite a high-profile crash in its value. El Salvador made headlines earlier in the year for adopting bitcoin as legal tender, although cryptocurrencies have lost around 50% of their value since then.

Hinz didn't offer any statistics for the number of people investing in cryptocurrencies, nor where most were coming from. Inflation, however, is surging across the globe. In the UK, inflation is set to hit its highest level since 1982, according to the Office for National Statistics (ONS). The consumer price index rose to 9.1% in June, the highest level in the G7 group. There is also a suggestion that this is only going to get worse for Brits as households are expected to come under even more pressure with rising gas prices.

The comments from Hinz have come at the same time as the UN trade and development body The United Nations Conference on Trade and Development (UNCTAD) has called for action to curb cryptocurrency in developing nations. The body warned that they're unstable assets that can bring social risks, and that the benefits are overshadowed by the threats they pose to domestic resource mobilisation and the security of monetary systems. Another area of concern for UNCTAD is that cryptocurrencies may enable tax evasion and avoidance through tax haven-style loopholes.

"In this way, cryptocurrencies may also curb the effectiveness of capital controls, a key instrument for developing countries to preserve their policy space and macroeconomic stability," a UNCTAD spokesperson added.

The International Monetary Fund (IMF) has urged El Salvador to remove Bitcoin’s legal status, warning it could impact the nation’s ability to receive a loan from the fund.

The government of the country adopted Bitcoin as legal tender in September 2021, with president Nayib Bukele’s decision prompting thousands of Salvodorans to take to the streets to protest at the time.

The IMF’s Executive Board said that the adoption of a cryptocurrency as legal tender entails large risks for financial and market integrity, financial stability, and consumer protection, as well as creating contingent liabilities.

The directors agreed that boosting financial inclusion was important and noted the country’s digital means of payment, like the Chivo e-wallet, could play a role in this. However, they emphasised the need for strict regulation and oversight of the new ecosystem of Chivo and Bitcoin.

The directors stressed that there are large risks associated with the use of Bitcoin and urged authorities to narrow the scope of the Bitcoin law by removing its legal tender status. Some directors also expressed concern over the risks associated with issuing Bitcoin-backed bonds.

The use of the cryptocurrency as legal tender could impact its efforts to get a loan from the IMF, according to Bloomberg. The country sought a $1.3 billion IMF loan last year but talks have reportedly been hindered by the fund’s Bitcoin concerns, and any programme would need to be approved by the board.

El Salvador began buying Bitcoin last year and bought around 1,801 coins. Its value has fallen 45% from its peak in early November meaning the nation has lost around $20 million, estimated Bloomberg.

The IMF predicts that El Salvador’s economy is projected to grow around 3.2% in 2022, although public debt vulnerabilities have emerged. The fiscal deficit is projected at 5¾% of GDP in 2021 and about 5% of GDP in 2022.

“Under current policies, public debt is expected to rise to about 96% of GDP in 2026 on an unsustainable path,” said the fund.

The IMF’s demands to El Salvador on Bitcoin show the institution to be on the wrong side of history and is bullish for cryptocurrencies, said Nigel Green, CEO of deVere Group.

“Of course, the situation in El Salvador needs to be monitored extremely carefully and every precaution must be taken to ensure the Bitcoin rollout truly benefits the population,” said Green. “But the IMF asking a pioneering sovereign nation to drop a future-focused financial policy that attempts to bring it out of financial instability and a reliance on another country’s currency shows the institution to be on the wrong side of history.”

Green asked whether the IMF is scared of the future of finance and why the fund wants to continue to pile on debts to poorer countries that they know are unlikely to be able to repay using traditional currencies.

“Low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation,” explained Green. “This is why most developing countries become reliant upon major ‘first-world’ currencies, such as the US dollar, to complete transactions.”

He added that reliance on another country’s currency comes with its own set of problems. For example, a strong US dollar will weigh on emerging-market economic prospects, as developing countries have taken on so much dollar-denominated debt in past decades.

“By adopting cryptocurrency as legal tender these countries then immediately have a currency that isn’t influenced by market conditions within their own economy, nor directly from just one other country’s economy,” said Green. “Bitcoin operates on a global scale and therefore is impacted by wider, global economic changes.”

He also noted cryptocurrencies could help bolster financial inclusion for individuals and businesses in developing countries as they can circumnavigate the biases of traditional banks and other financial services providers.

The president of El Salvador has announced plans to build a coin-shaped 'Bitcoin city' to be placed at the foot of a volcano.

President Nayib Bukele addressed gatherers at an event in Mizata on Saturday, announcing the plans to build the cryptocurrency-powered city in La Unión.

Bukele said the geothermal energy generated by the volcano will contribute towards powering the mining of the 300,000 Bitcoin (£12.8 billion) thought to be required to build the city.

The president said the city "will have everything" including restaurants and bars, museums, and high-speed travel infrastructure like rail and airports.

Bukele also said no income tax will be levied in the city, and that half of the value added tax (VAT) levied would be used to fund the bonds issued to build the city, while the other half would be used to fund public services like waste removal.

"If you want Bitcoin to spread over the world, we should build some Alexandrias," said Bukele, likening the idea to the cities founded by Alexander the Great.

El Salvador became the first country in the world to adopt Bitcoin as legal tender in September, alongside the US dollar.

The move was a controversial one, sparking violent protests across the country that led to a number Bitcoin ATMs, installed across the country as part of the initiative, being set on fire.

The financial logic behind the Bitcoin city is underpinned by the belief that the cryptocurrency's value is set to increase substantially.

The initial focus is on a 10-year plan that involves taking large sums of Bitcoin off the market and waiting for it to appreciate in value to partially fund the build.

Samson Mow, chief strategy officer at Blockstream, said at the announcement event that he thinks Bitcoin can reach a $1 million (£743 million) valuation in five years.

El Salvador is also currently developing securities legislation that will facilitate a Bitcoin sidechain network, which will manage all the issued Bitcoin-backed bonds associated with the city's build.

The first bonds are expected to be issued with in 60 days, in early 2022, and the licence to manage the sidechain's exchange would go to cryptocurrency exchange Bitfinex.

"This is going to make El Salvador the financial centre of the world," said Mow.

“Buy them only if you’re prepared to lose all your money,” said Bank of England governor Andrew Bailey in May 2021. He was talking about cryptocurrencies such as Bitcoin, and one reason for his scepticism is that these next-generation virtual tokens “don’t have intrinsic value”.

But does that make them a bad investment? Indeed, are traditional currencies any better? Sterling was previously underpinned by gold, but Britain sold off half of its reserves between 1999 and 2002, when gold was at its lowest value in 20 years. When governments can make unilateral actions like that, decentralised cryptocurrencies which aren’t controlled by any single entity start to look appealing.

That’s particularly true if they’re set up to mimic a traditional gold-backed means of exchange, and Bitcoin’s pseudonymous creator Satoshi Nakamoto mimicked gold by making the currency rare and difficult to mine. To “create” a new bitcoin, a computer’s resources have to be used to crunch through equations. Most of those equations will come to nothing; just occasionally you will hit the jackpot and find a coin.

“It is its very cost of production that gives Bitcoin value (among other factors),” wrote Dominic Frisby in MoneyWeek last October. “You can’t just conjure up Bitcoins. You have to do some hard computer work first and thereby make your contribution to the network. And even if you do this, there is no guarantee you’ll get bitcoins at the end of it. There is risk.”

So, there’s a chance you could burn a considerable amount of electricity for no financial gain. That’s just one of the risks involved in mining cryptocurrency, and a big factor in the question of whether it’s worthwhile.

The biggest cost of mining: energy­

Mining bitcoins consumes a lot of electricity. In evidence presented to the United States Senate Committee on Energy and Natural Resources in 2018, Princeton University’s Arvind Narayanan outlined how Bitcoin miners were at the time computing “about 50 billion billion hashes… every second.” Combined, Narayanan estimated, those operations were consuming just under 1% of the global electricity supply, “or slightly more than the electricity consumption of the state of Ohio or that of the state of New York”.

And as time goes on it takes more and more power to generate a return. By 2020, digital assets exchange Zipmex was warning that “it takes a large setup nearly 30 days to mine 1 bitcoin. After deducting the electricity cost and the overall hardware and software cost, you will be left with 0.1 BTC of profit every month at best. With the majority of setups and the electricity cost and some manpower, it would cost you a total of $73,000 to process one Bitcoin every month.”

At the time of writing, a single Bitcoin is worth $34,471, so you’d have to bank on the value going up considerably to make any profit at all. Or, you could try mining somewhere where electricity is cheaper. In 2018, Elite Fixtures calculated the energy cost of mining a single Bitcoin across 115 different countries, and found prices ranging from from $1,190 in Trinidad and Tobago to $26,170 in South Korea. In the UK, the cost was $8,402. Unfortunately, it’s not feasible for most of us to up sticks and start mining in a different country: the costs of moving will eat significantly into any putative profits.

​Generating money through mining

It’s not just the energy of cryptomining that costs money: you need to pay for the hardware too. In theory you could use your personal PC, but this is likely to yield a trickle of currency at best, and most serious operations have switched to Application-Specific Integrated Circuit (ASIC) designs that are custom-designed for mining.

One mining platform that uses this technology is the Antminer S19 Pro, which costs £6,500 and which can rip through 110 terahashes per second. On average this should generate approximately 0.0007 BTC per day – but with an energy consumption of around 3.25kW it’ll cost you around $18.72 per day to mine around the clock. At current rates, you can expect an operating profit of $4.25 (£3.05) per day, or $1,551 (£1,116) annually.

Clearly this setup isn’t going to make you a millionaire. It would take nearly six years just to pay off the cost of the hardware – and there’s a further complication too. The complexity of the Bitcoin mining algorithm is continually updated to compensate for technological advances in the mining hardware, to ensure that future computers can’t flood the market with cheaply generated coins.

This means that today’s state-of-the-art hardware can quickly become uneconomical. In 2018 the International Business Times reported that miners in China were selling off older mining hardware because it was no longer possible to mine enough currencies with these machines to cover their electricity costs: “a mining machine bought at a price of about 20,000 yuan ($2,885) a year ago is being sold for a price between 100 yuan to 1,600 yuan.” So if you want to keep on mining coins at a consistent rate, you need to keep investing in the latest hardware.

If you’d rather not be constantly upgrading your mining rig, an alternative is to mine in the cloud using sites like shamining.com, hashing24.com or genesis-mining.com. This lets you benefit from the expertise of dedicated teams for whom operating and refining a mining operation is a full-time job, and in many cases, you can also make responsible choices regarding energy consumption. Shamining has a focus on solar and wind energy, for example, while Genesis Mining is based in Iceland, a country where 80% of power comes from renewable sources.

Cloud mining is still an expense, though, with most services requiring an up-front payment. When choosing one, check the minimum required investment, minimum contract length, expected profit, and the terms on which you can withdraw your share of the operation’s earnings.

Can you still create Bitcoins?

If you really want to use your own computer for mining, there are sites that can help. nicehash.com is one that makes it easy, with a mining model which has (a little bizarrely) also been adopted in the latest release of ­­­the Norton 360 antivirus suite.

The idea in both cases is simple. The software runs quietly in the background, using your computer’s spare capacity to mine for cryptocurrency – in Norton’s case, Ethereum. Whatever you earn is automatically transferred into your wallet.

It sounds like a no-brainer: you might only see a small profit, but since there’s no impact on your computer usage it’s free money – right? Well, perhaps not. If you use your computer’s CPU, it’s all but certain that you’ll burn up a far greater cost in electricity than you will ever make back.

Graphics cards with their abundant cores and parallel processing are far better tuned to mining. If you have a powerful graphics card that spends most of its day sitting idle then it may be worth your while putting it to work. However, for precisely this reason, these cards are hard to come by, with mining enthusiasts snapping up stocks of high-end GPUs, leading to worldwide shortages of graphics hardware. To manage demand, Nvidia has even started shipping cards that deliberately reduce their own performance when used for mining cryptocurrencies.

Is cryptocurrency ethical?

It’s clear that, however you generate your cryptocurrency, it’s going to involve guzzling large amounts of energy, which can't be good for the environment. Cambridge university’s Bitcoin Electricity Consumption index recently put Bitcoin’s global electricity consumption roughly on par with that of a medium-sized European country such as Sweden or Ukraine.

Many have concluded that this alone is a good reason to ban all cryptocurrencies. “Bitcoin could be the first inefficient version of a disruptive technology,” Dr Larisa Yarovaya, a lecturer at Southampton university told the FT recently. “It should die for the common good of the planet and be replaced by a new model. It consumes more electricity than a country. All the rest is detail.”

And the societal cost of cryptocurrency mining isn’t felt only in electricity consumption. The GPUs and memory used in mining rigs are a hefty cocktail of silicon, copper, boron, cobalt, tungsten and all manner of chemicals. Some of those raw materials are in short supply, which is in part to blame for the current global CPU shortage. Rare-earth materials are – in part – being used up to mine highly volatile virtual currencies.

There is, at least, some awareness of these issues within the cryptocurrency industry. The Crypto Climate Accord, founded earlier this year, describes itself as “a private sector-led initiative for the entire crypto community focused on decarbonising the cryptocurrency industry in record time”.

The Accord – which is backed by some big names from the crypto industry – is largely focused on making mining use 100% renewable energy, with a target date of 2030. That’s more aggressive than many climate targets, but given that much of the mining is undertaken by unofficial farms around the globe, it’s highly unlikely to clean up the entire practice.

And even if it does manage to move generation to solar, wind and other renewable electricity sources within nine years, the question remains: wouldn’t that energy still be better used to power something more beneficial?

Alternative ways to profit from cryptocurrencies

You don’t need to create coins yourself to take part in the crypto boom. The price of all cryptocurrencies is in constant flux, and as with any other currency you can invest by buying low and selling high. According to CryptoCoin News, a 2021 study by investment firm AJ Bell found that “more Brits have bought into cryptocurrency than into equity … 7% of young adults have invested into crypto over the course of the last year. The FCA estimates that 2.3 million Brits now own cryptocurrency, which amounts to 3.4% of the UK’s population.”

If you’re not among them, you might be wondering whether you’ve left it too late. We can’t advise on whether you should buy into cryptocurrency: nobody can say what will happen to the market day-to-day, let alone over the longer term, so those of us who didn’t invest in 2010 can only look back and rue what we missed. However, since fewer than one in 25 Brits has yet invested in a digital currency, the market could still see gains as interest increases.

If you do decide to invest, there are a few important factors to consider, not least of which is the environmental impact. Make sure you trust whichever institution you use to buy your currency, and consider buying when the market is down, to maximise your chances of selling at a profit later. Finally, remember where we came in, with advice from the Bank of England: there are no guarantees in the world of cryptocurrencies, so “buy them only if you’re prepared to lose all your money”.

Following a hacker raid on its systems, Japanese cryptocurrency exchange Liquid lost $97 million in crypto assets.

In a tweet, the firm said that its hot wallets were compromised, and it is moving assets into cold wallets. "We are currently investigating and will provide regular updates. In the meantime, deposits and withdrawals will be suspended,” the firm said.

It added in a follow-up tweet that it had found four blockchain addresses, in Bitcoin, Ethereum, Tron, and XRP, associated with the hacker.

According to Elliptic's analysis, the thief’s accounts have received just over $97 million in crypto assets. The amount includes $45 million in Ethereum tokens, which the hacker is converting to Ether using decentralized exchanges (DEXs), such as Uniswap and SushiSwap.

“This enables the hacker to avoid having these assets frozen - as is possible with many Ethereum tokens,” the firm said.

James McQuiggan, security awareness advocate at KnowBe4, told ITPro that criminals continue to target systems and networks where the money is stored. If it is digital, it can be hacked.

“Unfortunately, with another cryptocurrency exchange successfully attacked for the second time this week, this can only be a sign of things on the horizon for these exchange companies,” he said.

“Users of cryptocurrency want to ensure not to put all of their funds into one type of currency and, for more significant amounts, keep them in an offline or cold wallet to prevent theft via the exchanges. While this might seem like keeping your cash funds in the mattress at home instead of the bank, there are currently no Federal Deposit Insurance agencies to protect against your crypto funds and the exchange organizations."

Antti Tuomi, principal security consultant at F-Secure, told ITPro that from an attacker's point of view, cryptocurrency exchanges are a very appealing target since a successful breach net them a lot of capital from the users. Plus, compared to normal currency and banks, mechanisms for preventing fraud or tracing or stopping crypto transactions are either not in place or not possible to implement at the same level.

“Regardless of the exchange in question, online wallets will always be at a risk; at the same time, switching to true cold wallets that are not connected to the online system other than when authorized by the wallet owner, is very difficult to achieve with an online service without compromising on the "always-online" principle while relying on technology alone. Regardless of the cryptocurrency in question or the exchange or its geographical location, the risk with online systems and always-online wallets will always be present,” Tuomi said.

Google has removed eight apps from its app store that claimed to be mining apps for cryptocurrency.

Researchers at Trend Micro said they found the fake apps masquerading as cryptocurrency cloud-mining applications. Users were fooled into believing the apps would earn them cryptocurrency by investing money into a cloud-mining operation.

Upon further investigation, researchers found that these malicious apps only tricked victims into watching ads, paying for subscription services, and paying for increased mining capabilities with nothing in return.

The apps removed from the store are BitFunds – Crypto Cloud Mining, Bitcoin Miner – Cloud Mining, Bitcoin (BTC) – Pool Mining Cloud Wallet, Crypto Holic – Bitcoin Cloud Mining, Daily Bitcoin Rewards – Cloud Based Mining System

Bitcoin 2021, MineBit Pro - Crypto Cloud Mining & BTC miner, and Ethereum (ETH) - Pool Mining Cloud.

While most were free to download, Crypto Holic – Bitcoin Cloud Mining cost $12.99 to download and Daily Bitcoin Rewards – Cloud Based Mining System cost $5.99. Some of the apps have even been downloaded more than 100,000 times. Researchers warned that over 120 fake cryptocurrency mining apps are still available online.

Trend Micro’s researchers’ analysis found these apps did not have any cryptocurrency-mining behavior.

“The fake mining activity on the apps’ user interface (UI) is carried out via a local mining simulation module that includes a counter and some random functions,” said researchers.

Despite lacking mining functionality, some apps prompted users to pay $14.99 to $189.99 via in-app billing systems for increased cryptocurrency-mining capabilities.

“The app called Daily Bitcoin Rewards – Cloud Based Mining System prompts its users to upgrade their cryptomining capacity by “buying” their favorite mining machines to earn more coins at a faster rate,” said researchers.

One app appeared to cover its tracks by stating it was a game that does not have any cryptocurrency-mining functionality in its terms of use.

“If users relied solely on how the application’s UI is configured and designed and didn’t read the app’s terms of use, they may have used it and made in-app purchases without knowing that it’s just a game,” said researchers.

Two other fake crypto apps pestered users by prompting them to click on ads during fraudulent crypto-mining activities to prove they aren’t robots. Users are informed they can start mining after viewing in-app video ads.

The apps also prompt users to invite several friends to download the app to unlock the withdrawal interface.

“However, even after users are able to invite friends and unlock the withdrawal interface, they wouldn’t be able to withdraw cryptocurrency from the app as it is always in a waiting state,” researchers warned.

Researchers said users could spot fake apps by carefully reading the app’s reviews and entering an invalid or wrong cryptocurrency wallet address.

“Confirm if there is a withdrawal fee. The transfer of cryptocurrency requires a handling fee, which is relatively high compared to what is typically made from cloud mining. Hence, free withdrawals are very suspicious,” said researchers.

An Ohio man faces up to 20 years in prison and multimillion-dollar fines after pleading guilty to money laundering conspiracy charges in federal court.

Larry Dean Harmon pleaded guilty to charges against him, including laundering more than $300 million while running a Darknet-based Bitcoin hashing service called Helix.

According to a Department of Justice (DoJ) statement, Harmon laundered more than 350,000 Bitcoins through Helix between 2014 and 2017. Helix functioned as a "Bitcoin mixer," permitting customers to send the cryptocurrency to designated recipients in a manner that concealed the source of the original transfer.

The Helix service enabled users to "mix" their coins with other users' funds to form a common pool of funds. This allowed the coins to become fully anonymous, making tracing these funds difficult, if not impossible.

The defendant said he knew about the illegal origin of the funds funneling through the service. Helix was linked to and affiliated with "Grams," a Darknet search engine also operated by Harmon. Harmon advertised Helix to customers on the Darknet to hide the transactions from law enforcement.

The accused also revealed that Helix worked with several Darknet markets, including AlphaBay, Evolution, Cloud 9, and others, to provide Bitcoin money-laundering services to market customers. Harmon also admitted he conspired with Darknet vendors and marketplace administrators to launder Bitcoins generated through illegal drug trafficking offenses on those Darknet marketplaces.

“Darknet markets and the dealers who sell opioids and other illegal drugs on them are a growing scourge,” said acting US Attorney Channing Phillips for the District of Columbia.

“They may try to hide their identities and launder millions in sales behind technologies like Helix. But the department and its law enforcement partners will shine a light on their activities, dismantle the infrastructure such criminal marketplaces depend on, and prosecute and convict those responsible.”

During previous hearings, the defendant tried to prove Bitcoin is not money, so he could not be guilty of money laundering. However, Judge Beryl Howell rejected this argument.

“The term ‘money’ generally means a medium of exchange, a method of payment, or a store of value. This is true for Bitcoin,” she ruled.

As part of the proceedings, 4,400 Bitcoins — a $197 million value at the time of this writing — had been confiscated from Harmon. The date Harmon will receive his verdict has yet to be determined, as prosecutors said

Welcome to IT Pro's News in Review, a weekly bitesize bulletin of the top tech stories of the week, for the week ending 30 July, 2021.

This week:

• Apple, Microsoft and Google all post record revenues off the back of cloud growth
• Cyber criminals are turning to ‘exotic’ languages to beat malware detection
• Amazon could soon accept payments in Bitcoin and may even be developing its own cryptocurrency.

You can find more videos like this in our video library and even more on our YouTube channel. Let us know what you think of this week's video – you can find us on Facebook, LinkedIn and Twitter.

The amount of illicit cryptocurrency mining closely follows the value of Monero, according to new research.

According to Talos, security researchers noted that as the value of Monero increased, so did the volume of illicit mining detected in the wild. Researchers chose to track Monero because it is the cryptocurrency of choice among cyber criminals.

"Monero is a favorite for illicit mining for a variety of reasons, but two key points are: It's designed to run on standard, non-specialized, hardware, making it a prime candidate for installation on unsuspecting systems of users around the world, and it's privacy-focused," said researchers.

Researchers needed to figure out an efficient way to track cryptocurrency mining activity to test their hypothesis. They relied on network-based detections as crypto mining is typically done in the clear — non-encrypted — on the wire and is, therefore, detectable. Researchers said this ensures the crypto-miner is properly installed and functioning since it generates the applicable network traffic.

To track mining detection, they tracked the rate that certain Snort rules targeting crypto miners fired. The researchers tracked Monero activity between November 2018 and June 2021.

“The first thing we noticed is that no matter what, cryptomining is extremely popular. Even at its lowest point, we were seeing millions of events associated with crypto mining activity. We were also floored to see how much mining activity has risen since we first started writing about this in 2018. Today, we see more than double the volume we were observing several years ago,” said Nick Biasini, a threat researcher at Cisco Talos.

Researchers observed that mining activity does have some dependence on the value of the currency.

“The most crypto mining activity we've ever seen has occurred in the last couple of months when Monero hit its all-time high,” said Biasini.

Outside of the short price drop in early 2021 — before the massive spike — the graph tracks almost identically to the value of the currency

“This was honestly a pretty surprising correlation since it's believed that malicious actors need a significant amount of time to set up their mining operations, so it's unlikely they could flip a switch overnight and start mining as soon as values rise,” said Biasini.

“This may still be true for some portion of the threat actors deploying miners, but based on the actual data, there are many others chasing the money.”

With many countries now considering a crackdown on cryptocurrency use, this pattern may quickly change.

“Detection for crypto mining can be spread into a variety of different places including blocking mining-related domains, to enforcing limitations on the end system preventing the mining from starting and lots of network-based detection, which this research is based on,” said Biasini.

El Salvador has doubled down on its plans to support Bitcoin by offering $30 of the digital asset to any adult citizen downloading and registering with the country’s official cryptocurrency app. At the time of writing, $30 was is 0.00093 bitcoin.

The country announced plans to recognize Bitcoin as legal tender earlier this month, passing a 'Bitcoin law' that officially eliminated capital gains taxes on the digital asset and enabled citizens to use it for tax payments.

President Nayib Bukele made the announcement on television late last night as part of an hour-long talk explaining the country's support of Bitcoin to citizens. It will provide the app, called Chivo, on iOS and Android.

"The government is going to give this bonus for two reasons: one, to promote the use of Bitcoin in the economy, and second, so that people have an incentive to use the application and download it," Bukele said.

"What we are trying to do with the Bitcoin law is to connect our country with the rest of the world, attract foreign exchange, investment, and tourism, and boost our economy," Bukele continued.

He hopes to bring more money into the country via Bitcoin, using it as an economic multiplier to funnel tourist funds into the national economy. The app attempts to kickstart the process by creating a critical mass of users who can accept Bitcoin.

Bitcoin has become more of a speculative asset these days as massive swings in value make it difficult to rely on it as a form of exchange. It fell from $35,884 last night to $31,600 this morning.

However, the president hopes that the app's dual-currency functionality will protect users who don't want exposure to that risk.

He explained the app's functionality at length, dwelling extensively on its ability to make and receive payments in US dollars — the standard currency in El Salvador — or Bitcoins. A person might make a payment in Bitcoins using the app, but the recipient can receive the money in dollars.

Article seven of the Bitcoin law forces everyone to accept Bitcoins as payment, but he argued that articles eight and 12 constrain that mandate. Article eight says the state must provide instant conversion from Bitcoins to dollars. Article 12 says those without the technology to accept Bitcoins are excluded from the mandate.

By offering that conversion, the government appears to be setting itself up as a de facto Bitcoin exchange. The big question is if its dollar conversion service protects citizens from Bitcoin’s volatility, what is the government doing to protect itself from that risk in the long term?

There are no details yet on how the government plans to distribute the $30 in free Bitcoin.

Security researchers have warned of hackers' continued attacks against Kubernetes clusters running Kubeflow machine learning (ML) instances by installing malicious containers that mine cryptocurrencies, such as Monero and Ethereum.

According to Microsoft Senior Security Researcher Yossi Weizman, the attacks began at the end of last month as he and his team discovered a spike in TensorFlow machine learning pod deployments. An investigation of the entry point of the pods revealed deployment aimed to mine cryptocurrency.

"The burst of deployments on the various clusters was simultaneous. This indicates that the attackers scanned those clusters in advance and maintained a list of potential targets, which were later attacked at the same time," said Weizman.

The hackers used two images in the attack. The first was the latest version of TensorFlow (tensorflow/tensorflow:latest), and the second was the latest version with GPU support (tensorflow/tensorflow:latest-gpu).

The images were legitimate but ran malicious crypto-mining code. The attackers abused the access to the Kubeflow centralized dashboard to create a new pipeline. Kubeflow Pipelines is a platform for deploying ML pipelines based on Argo Workflow. These dashboards were exposed to the internet instead of being only open to local access.

Hackers deployed at least two pods on each cluster: one for CPU mining, and the other for GPU mining. Both containers used open-source miners from GitHub: Ethminer in the case of the GPU container and XMRIG in the CPU one.

The malicious pods all had the same pattern of name; "sequential-pipeline-{random pattern}."

Weizman said that as part of the attack, hackers deployed a reconnaissance container that queries information about the environment, such as GPU and CPU information, as preparation for the mining activity. This also ran from a TensorFlow container.

"The attack is still active, and new Kubernetes clusters that run Kubeflow get compromised," Weizman added.

The campaign is similar to one staged in April last year. This also abused Kubernetes clusters in a crypto-mining campaign. However, instead of using Kubeflow Pipelines to deploy ML pipelines, it used a Jupyter notebook server. This campaign was the first that Microsoft observed targeting Kubeflow environments.

Weizman said that organizations running Kubeflow should ensure that the centralized dashboard isn't insecurely exposed to the internet. If Kubeflow should be exposed to the internet, make sure you use authentication. Administrators should also search containers that run TensorFlow images and inspect the entry point of those containers.

Bitcoin mining company Blockstream has partnered with Square to build a solar-powered Bitcoin mining facility.

Square will provide $5 million in funding for the project, which will be a proof-of-concept for larger renewable mining operations. Blockstream will provide infrastructure and expertise.

Blockstream, which also develops Bitcoin wallets and financial products, already runs a mining operation on what it says is 80% renewable energy. It began mining using its own purpose-built data centers in 2017 and now has a hydroelectric facility in Quebec, Canada and another facility in Adel, Georgia. In 2019, it launched an enterprise colocation service for Bitcoin miners.

The partnership with Square will go beyond Blockstream's existing projects to provide a reference model for renewable mining facility designs, Blockstream said in an announcement on Saturday. It vowed to make the project open and transparent by publishing regular economics reports. It will also offer a dashboard that will display real-time information on the project's power output and Bitcoin mining.

Bitcoin's proof of work-based consensus mechanism consumes vast amounts of power that increase as it becomes more popular. This has drawn criticism for its effect on the environment.

New York lawmakers recently proposed a law banning cryptocurrency mining operations that affected its greenhouse gas emissions targets. The seminal cryptocurrency, first launched in 2009, has suffered other setbacks of late, including signals of a major government crackdown on mining in China, which dominates the Bitcoin mining space.

In March, Blockstream also partnered with Aker, a specialist Bitcoin investment company created by Norwegian holding company Seegee, which operates in energy and construction. The two companies will work together in the Bitcoin mining space, they said.

Blockstream has a stated goal to use "orphaned" renewable resources in areas that would otherwise be problematic to transmit power from. The company has developed a satellite-based network for propagating Bitcoin blockchain information to remote areas.

Bitcoin has been top of the pile when it comes to cryptocurrency. Over a decade after its launch, just one Bitcoin is worth over $40,000 at the time of writing.

But there's more to cryptocurrency than just Bitcoin. Altcoins — a portmanteau of "alternative" and "coins" — are any cryptocurrency that isn't Bitcoin. Each of these alternative cryptocurrencies operates under its own rules but also shares some characteristics with Bitcoin.

What is an altcoin?

In essence, altcoins are alternative cryptocurrencies to Bitcoin, a decentralized digital currency that could eventually replace fiat money, such as the dollar.

Cryptocurrencies are decentralized, meaning central banks do not issue them, and their value doesn't hang on bank policies. Namecoin is widely considered to be the very first altcoin. Since then, the rate of altcoin launches started to grow at a phenomenal rate.

Like Bitcoin, they use blockchain as a means of securing peer-to-peer transactions. How these altcoins use blockchain can differ greatly from Bitcoins, as different consensus mechanisms are used to validate transactions or create blocks.

Not only that, but altcoins also take the Bitcoin concept further with unique features, such as "smart contracts" that can automatically perform agreements between two parties using blockchain technology.

In addition, altcoins have improved on Bitcoin in many other ways. Processing transactions can be faster or can scale better. Bitcoins are mined every 10 minutes, whereas an altcoin, such as Litecoin, produces coins every 2.5 minutes, speeding up transactions on this coin over Bitcoin.

How does an altcoin work?

Altcoin works similarly to Bitcoin. A private key is used to send payment from one digital wallet to another, and a blockchain acts as a recording ledger to permanently record the transaction so it can't be altered. The blockchain is secured by mathematics proofs, which ratify transactions in blocks.

What are the different types of altcoins?

Some of the main types of altcoins include mining-based cryptocurrencies, stablecoins, security tokens, and utility tokens. There are around 9,000 cryptocurrencies, and altcoins make up over 40% of the market as of April 2021. Some of the most familiar altcoins are Ethereum, Ripple, Tether, Bitcoin Cash, Bitcoin SV, and Litecoin.

Certain altcoins do more than just allow the exchange of money for goods and services. These are usually called utility tokens or security tokens for example. Some altcoins offer better anonymity, while others target specific industries.

Stablecoins

Stablecoins are cryptocurrencies pegged to either another cryptocurrency, fiat money (i.e., Dollars), or an exchange-traded commodity (i.e., precious metals), which minimizes price volatility compared to a particular "stable" asset or array of assets.

Stablecoins aren't subject to turbulent, daily price fluctuations, meaning they're useful in practical everyday cases, such as payments, investments, and loans.

Mining-based

These altcoins are mined into existence using proof-of-work (PoW), which creates new coins by solving difficult problems, to create blocks. There are several PoW coins, such as Litecoin, Monero, Bitcoin Cash, and Bitcoin SV.

Alternative to mining-based coins are pre-mined coins. These are distributed rather than created through an algorithm. Ripple is an example of this.

Utility tokens

This type of coin is used within a platform to receive a service. A common type of utility token is the ERC20 Ethereum standard. These tokens are created to be spent within a certain blockchain ecosystem. An example of this is Sia, a decentralized peer-to-peer cloud storage solution.

Security Tokens

Security tokens operate as investment contracts. The token's purchaser expects future profits from dividends, revenue share, or market appreciation. These differ from utility tokens in that security tokens follow stringent rules on who can buy and transfer them.

Non-fungible tokens

A non-fungible token (NFT) is a cryptographic asset on a blockchain with unique identification codes and metadata that differentiate them from each other and are stored in smart contracts.

Users can't duplicate or divide NFTs. Some of the use cases for these tokens include collectibles, music, artwork, and video game tokens.

In contrast, fungible tokens, such as Bitcoin, are identical; they have the same characteristics and value when traded.

How does altcoin compare to Bitcoin?

Bitcoin is widely regarded as the original cryptocurrency. It was created in 2009 by Satoshi Nakamoto, introducing the world to blockchain technology and the principle of proof of work.

Most altcoins are a variation (fork) of Bitcoin and are created using Bitcoin's open-sourced, original protocol and then changed to create a new cryptocurrency with new features, although tokens come in all shapes and sizes today.

Every altcoin has a unique way of being created, the number of coins available, and how difficult it is to create them. While Bitcoin now takes hefty computing power to mine — it's said Bitcoin consumes 'more electricity than Argentina' — many altcoins still only need the power of a desktop computer and some specialized software to mine a coin.

The advantages and disadvantages of altcoins

One of the main advantages of altcoin is it's an alternative to Bitcoin. Should Bitcoin's value plummet, altcoins are generally good as a fallback option, although you might find that larger shifts that affect Bitcoin also hit everything else on the market. In a sense, they provide competition to Bitcoin.

Altcoins generally offer improvements to Bitcoin's problems, such as the speed and cost of mining. There are also lower transaction costs with altcoins.

However, one major disadvantage of each altcoin is its lack of public acceptance and exposure relative to Bitcoin. As altcoins are newer than Bitcoin, their value can change dramatically, so they're not for the faint-hearted or the risk-averse investor.

Another major issue with altcoins is that they're often used in scams to fleece unsuspecting victims, such as pump and dump schemes.

Lastly, many altcoin trading sites don't provide customers with the means to convert to Bitcoin before converting it yet again to USD.

Aren't altcoins a risky investment?

We can't give investment advice on altcoins. Different cryptocurrencies fall in and out of fashion and you can easily lose some or all of your money invested in shady altcoin schemes, as these are mostly unregulated. A lot of sleazy marketing exaggerates the benefits and investment potential of almost every altcoin project.

What we can say is that you should always seek independent financial advice before parting with any money to buy altcoins.

Cryptocurrency scams have escalated dramatically in the last six months, according to a Federal Trade Commission (FTC) report.

The FTC's Cryptocurrency Spotlight report, published Monday, warned that losses to cryptocurrency scams have soared in recent months, almost tripling in Q4 to nearly $30 million. Losses topped $50 million in the first quarter of 2021, the FTC found, with the median loss reaching $1,900 - a 1,000% increase compared to 2020.

Losses are unevenly distributed, with consumers aged between 20 and 49 five times more likely to report losing money to a cryptocurrency investment scam. Those between 20 and 30 were especially vulnerable, the report said. Conversely, consumers aged 50 and up were less likely to lose money to cryptocurrency crooks, but when they did, the median loss was higher, at $3,250.

Fraud masquerading as investment tips is a common way to reel in victims, warned the FTC. Many of these investment tips are Ponzi schemes that rely on 'investors' bringing in more people, creating long referral chains.

Another reason for the rise in cryptocurrency-related losses is that other scammers use the electronic payment method as an easy way to fleece victims.

For example, in the past, romance scammers have relied on more conventional forms of payment from their victims. Romance scam perpetrators often ask for money from the victim to pay for a supposed visit. In the last six months, however, 20% of the money lost to romance scammers was sent in cryptocurrency, with many of the victims reporting they thought they were investing in something on the scammer's recommendation.

Other crypto investment scams include “giveaway” fraud. The scammer impersonates a famous figure or takes over their account directly and makes a social media post inviting victims to send cryptocurrency with the promise of more in return.

According to the FTC, scammers impersonated Elon Musk, who advocated for Bitcoin but subsequently stopped accepting payments for Tesla vehicles amid energy consumption concerns. The FTC said that scammers impersonated him to steal $2 million from victims in the past six months.

Impersonating others is a common way to steal cryptocurrency, with 14% of imposter scam victims reporting they used cryptocurrency as their form of payment. Scammers have posted as cryptocurrency exchange Coinbase, which became the first cryptocurrency exchange to go public in mid-April.

Although the FTC focuses on the rise in cryptocurrency losses over the last six months, it's worth noting that losses also rose substantially in Q3 2020, when they more than doubled from the $5 million lost in Q2. This aligns with the onset of the pandemic, which attracted large numbers of new retail investors according to last month’s Charles Schwab survey.

US broker-dealer regulator FINRA found the same in its February survey. Younger, less experienced investors flocked to the markets, research has found.

Binance, the world’s largest cryptocurrency exchange, is under IRS and US Department of Justice (DOJ) investigation, following allegations of money laundering and tax violations, according to reports.

Based in the Cayman Islands and Singapore, Binance is a platform for buying and selling cryptocurrencies like Bitcoin. Although the ongoing probe is confidential, Bloomberg News reports investigators are interviewing people who have insight into how Binance operates.

“The firm, like the industry it operates in, has succeeded largely outside the scope of government oversight,” Bloomberg News reported. “Chainalysis Inc., a blockchain forensics firm whose clients include U.S. federal agencies, concluded last year that among transactions that it examined, more funds tied to criminal activity flowed through Binance than any other crypto exchange.”

In response, Binance tweeted out a statement defending itself.

“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion,” the crypto exchange said. “We have worked hard to build a robust compliance program that incorporates anti-money laundering principles and tools used by financial institutions to detect and address suspicious activity.

“We have a strong track record of assisting law enforcement agencies around the world, including in the United States.”

IRS agents are investigating the conduct of Binance’s customers and its employees, according to Bloomberg. Federal investigators are looking into whether Binance has been allowing Americans to make illegal trades on its platform.

“U.S. officials have expressed concerns that cryptocurrencies are being used to conceal illegal transactions, including theft and drug deals, and that Americans who’ve made windfalls betting on the market’s meteoric rise are evading taxes,” Bloomberg reported.

For example, in the recent ransomware attack against Colonial Pipeline, responsible for gas shortages on the East Coast, the pipeline company is said to have paid the hackers a $5 million ransom in virtually untraceable cryptocurrency.

New York lawmakers have submitted a bill banning cryptocurrency mining operations for three years.

Introduced on Monday, bill S6486 seeks to put a moratorium on the operation of cryptocurrency mining centers unless they undergo a full environmental impact statement review. The review would have to prove that a mining center doesn't affect the state’s greenhouse gas emission targets.

"Cryptocurrency mining centers are an expanding industry in the State of New York, often, but not exclusively, located in retired or converted fossil fuel power stations, including dormant power plants," the bill said.

As part of its Climate Leadership and Community Protection Act, the state has called for a 40% reduction in greenhouse gas emissions over 1990 levels by 2030. That rises to 85% and net-zero emissions in all sectors of its economy by 2050.

The cryptocurrency mining bill added, "The continued and expanded operation of cryptocurrency mining centers will greatly increase the amount of energy usage in the State of New York, and it is reasonable to believe the associated greenhouse gas emissions will irreparably harm compliance with the Climate Leadership and Community Protection Act in contravention of state law."

The bill applies to existing and proposed mining operations. In addition to a cumulative impact assessment on greenhouse gas emissions, it would also include a review of any impacts on water or air quality, or wildlife. Reviews would include a 120-day public comment period.

Bitcoin has had a considerable impact on energy consumption. Its consensus algorithm relies on a process called proof of work, in which miners compete for the chance to include transactions in a block on the chain. To do so, they compete to solve a complex mathematical problem. The bitcoin protocol seeks to regulate the production of blocks to one every 10 minutes. To do that, it must make the mathematical problem more difficult as more miners join the network, adding more computing power.

Proof of work forces the total computational power on the network upward as bitcoin becomes more popular. The cryptocurrency has seen its price soar recently, forcing the hash rate up.

According to the Bitcoin Energy Consumption Index, it takes 1138 kWh of energy to process a single bitcoin transaction at the time of writing, which equates to the energy required to run a single US household for 39 days. The bitcoin network uses roughly the same amount of energy as the Netherlands each year.

While the core bitcoin developers seem committed to proof of work, competing network Ethereum, which offers additional functionality, is preparing to transition to an alternative proof-of-stake mechanism. This approach replaces miners with validators chosen to mine each block, dramatically reducing energy use compared to proof of work.

Apple co-founder Steve Wozniak was one of 18 plaintiffs to file a lawsuit against YouTube on Tuesday.

The lawsuit seeks punitive damages, a trial by jury and demands YouTube remove all Bitcoin giveaway scams using Wozniak’s name and likeness. The lawsuit also alleges YouTube is aware of the Bitcoin giveaway scams plaguing its platform but has yet to take the videos down.

According to the lawsuit, which was filed in California Superior Court, YouTube has been hosting, promoting and profiting from videos posted to the platform claiming Wozniak is hosting a Bitcoin promotion.

The videos entice users to send Bitcoin to the given address. In return, “Wozniak” will give them double the amount. The suit alleges the image and likeness of Bill Gates, Elon Musk and Michael Dell have been exploited in these scams too.

The lawsuit states: "Plaintiff Wozniak repeatedly has tried to get YouTube to stop this unauthorized use of his name and likeness that has been used to defraud so many Youtube users. But YouTube has been unresponsive. Despite Plaintiffs’ and legions of other users’ repeated pleas that YouTube take timely action to end this BITCOIN GIVEAWAY scam, YouTube repeatedly delayed or refused to do so.”

In a statement made Thursday, YouTube said: “We take abuse of our platform seriously, and take action quickly when we detect violations of our policies.”

Ripple CEO Brad Garlinghouse alleged the same misconduct Wozniak cited in his lawsuit in a lawsuit he filed against YouTube and Google in April. In response to Garlinghouse’s lawsuit, YouTube said it cannot be held liable for the scam videos under Section 230 of the Communications Decency Act.

The Bitcoin world is no stranger to fraudulent giveaways, but they’re getting more attention lately. Last week, hackers infiltrated several high-profile Twitter accounts and used them to promote fraudulent Bitcoin giveaways. Twitter acknowledged the incident shortly after it began and subsequently locked all verified accounts while it investigated the breach.

A cryptocurrency investment scam has exposed the personal details of hundreds of thousands of people around the world.

Group-IB, a Singapore-based intelligence company, uncovered the stolen personal records of 248,926 people from the UK, Australia, South Africa, Spain, Singapore, the US, Malaysia and other countries.

The United Kingdom and Australia represent approximately 93% of all affected users.

It’s not known exactly where or how the leak originated, but Group-IB has discovered that it’s being used in a multi-stage cryptocurrency investment scam that comes at the victims in three phases.

To begin with, the target receives a text message that is masked as a local media outlet. The link bears a headline boasting that a celebrity endorses a new get-rich-now investment, and each text message also contains a short, unique link.

When the target clicks the link, they are taken to a fake news website that displays a long, personalized URL that includes the target’s name, phone number, and sometimes, email address.

The fake news site shows made-up content about a particular celebrity who made a fortune with a new cryptocurrency investment platform. Celebrities whose names and images were stolen for this scam include Bryan Wong, Travers ’Candyman’ Beynon, Gina Rinehart, Andrew Forrest, Chris Brown and others.

The use of celebrity names and images to promote scams is nothing new. Earlier this month Elon Musk’s name was used in a Bitcoin giveaway scam.

If the target clicks on that second link, they are taken to a fake cryptocurrency investment platform site where their personal information is already preloaded into the signup form. If they join, they are then asked to add to their account using cryptocurrency.

Group-IB detected six active domains that offer the same Bitcoin investment platform but operate under different names including Crypto Cash, Bitcoin Supreme, Bitcoin Rejoin and Banking on Blockchain.

Group-IB CEO, Ilya Sachkov, states in the company’s report on the scam: “The bad guys got smarter in a bid to increase the success rate of their fraudulent operations. Using personal data allows them to carry out targeted attacks and make a victim’s journey easier and smoother, which levels up the overall effectiveness of the scheme.”

The firm has shared its findings with the appropriate law enforcement groups in the affected countries for further investigation.

Journalist Brain Krebs recently warned Privnote users about a phishing scam that lures victims to a fake website, privnotes.com.

Rather than fully encrypting messages, the fake site enables others to read and/or modify users’ messages. The cloned site also contains a script that finds messages with Bitcoin addresses and allows the hacker to replace the sender’s address with their own. Any Bitcoin funds sent by the original user would go to the modified address instead.

“Any messages containing bitcoin addresses will be automatically altered to include a different Bitcoin address, as long as the Internet addresses of the sender and receiver of the message are not the same,” said Krebs.

“Until recently, I couldn’t quite work out what Privnotes was up to, but today it became crystal clear.”

The owners of the legitimate website privnote.com notified Krebs someone built the clone website to trick its users. The two websites are similar in name and appearance, and privnotes.com comes second in a Google search of “privnote.” Typing “privnotes” will bring up the fake website first in a Google search.

Since Privnote messages self-destruct after they are sent and read, victims of the scam cannot go back to check the Bitcoin messages when they are altered. According to Allison Nixon, chief research officer at Unit 221B, the script seems to change just the first appearance of the Bitcoin address when it’s repeated in the email.

“The type of people using privnote aren’t the type of people who are going to send that bitcoin wallet any other way for verification purposes,” Nixon said. “It’s a pretty smart scam.”

Bitcoin scams have been increasing in frequency over the last few months. Many are tied to the coronavirus pandemic.

Coinbase announced on Wednesday it’s acquired crypto brokerage firm Tagomi. While the companies have yet to disclose the financial terms, an insider told Fortune Coinbase funded the acquisition using its privately held stock. Others close to the deal shared the acquisition’s cost neared $100 million, adding that Coinbase successfully outbid Binance to seal the deal.

In a blog post, Coinbase shared, “The addition of Tagomi will round out our product suite for the fast-growing institutional trading market. It will allow us to offer custody, professional trading features, and prime brokerage services on one platform, giving sophisticated investors the seamless, powerful trading experience they have come to expect in equities and FX markets.”

According to Coinbase, acquiring Tagomi will also allow the crypto company to provide its customers with custody, professional trading features and prime brokerage services via a singular platform.

Over the past year, Coinbase has experienced an uptick in demand from its institutional investors, which has led to the launch of new features like margin trading. The company also recently expanded its coverage for larger clients by tapping Brett Tejpaul as head of institutional coverage.

Launched in December 2018, Tagomi, has been treated as a late entry to the crypto service market. Though, the startup quickly gained attention because of its team of finance-focused founders. Jennifer Campbell, founder of Tagomi, was once a partner at Union Square Ventures. Meanwhile, Greg Tusar, founder and chief technology officer at Tagomi previously worked as the head of electronic trading at Goldman Sachs.

Though Coinbase has officially announced the acquisition, the deal is not expected to close until later this year. The acquisition is also subject to various closing conditions and the usual regulatory approvals.

In a blog post published earlier this week, Brian Strong, CEO of Coinbase, announced the company would continue to work remotely after the coronavirus pandemic. Strong previously told Coinbase employees as stay-at-home orders begin to expire, Coinbase will continue to embrace being a “remote-first” company.

Headquartered in San Francisco, Coinbase was forced to make the shift to remote work in March. In a letter to the Coinbase team, Armstrong shared that the experience of suddenly shifting to a remote environment had a “silver lining.” Overall, Armstrong shared, "it’s been less complicated to transition than we would have expected.” As a result, most Coinbase employees will have the privilege of choosing whether they want to work in an office or remotely.

Armstrong continued, citing two major considerations in making the decision to become a remote-first company. One consideration was strategic, while the other was more practical.

He explained, “On a practical level, as countries around the world have emerged from quarantines, we’ve seen broad direction to adopt measures like six feet of separation between people in offices. This is likely to be our reality soon. To be concrete: with six feet between all employees in an office, even if we moved into every floor of our SF HQ, we wouldn’t have enough space to bring all current SF employees back, let alone hire more.”

As for Armstrong’s strategic considerations? The company has gone back and forth on remote work for some time and has now concluded “there will be substantial strategic advantages in a mix of remote and in-office work going forward.” Not only will a remote workforce allow Coinbase added economic freedoms, but it also means the company can hire top talent worldwide.

Coinbase isn’t the only tech company to announce its intentions to continue working remotely after the pandemic has subsided. Earlier this week, Square told its employees they can work from home permanently. The move came shortly after Twitter made a similar announcement to its employees. Meanwhile, companies such as Facebook and Google have directed their team members to work from home until 2021.

For the past few years, blockchain has remained one of the biggest buzz words in the tech industry.

It's not all hype, though, as blockchain is a seriously disruptive technology. It is a form of distributed ledger technology, made famous because it is the system on which Bitcoin and other cryptocurrencies are built upon. But, as we are slowly beginning to find out, there is more to blockchain than just digital money.

There are a number of different use cases being explored. HSBC, for example, is using it as a digitised record of transactions. This was launched in 2019, as a 'custody blockchain' platform that enables investors to access records of private assets instead of requesting a search of paper-based documents. HSBC said it aimed to move $20 billion (£15 billion) worth of assets this way by March 2020.

Similarly, IBM used blockchain as part of a system that can track the origin and ownership of jewellery. This was dubbed 'TrustChain' which is a robust system of record that the jewellery industry could use, running from precious metal suppliers through to jewellers.

The basic premise of blockchain is that it is a secure method of data storage, as data resides in a limited number of 'blocks' that make up a chain. The data sent or received over the chain can be seen by any person, whenever they like, and all changes are confirmed and uploaded at the same time. The blocks form a chain, which each new one including a cryptographic hash of the previous one and the time it was saved.

New use cases

No-one really knows who invented blockchain. Its initial research paper was published under the name 'Satoshi Nakamoto', the same person attributed to the creation of Bitcoin but it's likely that the name on the paper was a pseudonym for a group of people who all had a hand in the technology's development.

Blockchain solved the problem of 'double spending', recording what transactions had taken place on the network and preventing users from using the same digital token more than once. It also presented the opportunity for the currency to be decentralised, so governments and other authorities were not required to regulate or oversee it, making it a completely free, global currency.

However, the idea of having a distributed ledger that is not owned by anyone clearly has benefits. For one, it's super-secure because no one owns the original file and it can be updated without the threat of a hack.

It also means even the most sensitive information such as that related to personal identities, medical information and insurance records can be stored in a place that can be made accessible by all parties in a way that's trusted.

Now that the technology has been in the public domain for a good few years, companies are finding innovative ways of deploying it. There are, for example, a slew of cannabis startups using blockchain to get a head start in an emerging industry. Most recently, startup TruTrace Technologies partnered with auditing firm Deloitte to track cannabis using blockchain technology, according to Proactive Investors.

The system tracks the drug from seed to sale in order for customers and retailers to know the history of the product as it passes through the supply and consumption chain.

The rise of blocks

Blockchain relies on blocks of data connected in a chain, as its autonym name suggests. The chain is cryptographically secured and distributed among those that want to change or tweak parts using a network. As the chain evolves, new blocks are added and the person or node that adds that block is solely responsible for authorising it and ensuring it's correct.

What's unique about blockchain technologies is that none of the blocks can be changed or removed after being added - a reason to ensure it's definitely correct or accurate before adding to the chain.

The way blockchains are created makes them perfect for highly regulated industries that need to have a paper trail of changes. Because it's tamper-proof, the financial sector is one of the industries taking the technology seriously and it was created for Bitcoin for exactly this reason.

Bitcoin miners add the blocks, acting as nodes in a huge peer-to-peer (P2P) network. Everyone works together to validate transactions, without changing anything in the chain. Because every block is linked together in a chain, nothing can be changed without breaking the chain and to change anything, it would need every person who's ever added a block to change their additions - an impossible task when so many people are using a single network.

Not all blockchains are built the same, and the time it takes to process blocks of transactions can vary. Given the nature of buying and selling, cryptocurrency blockchains tend to be the quickest examples. The Ethereum blockchain, which supports the Ether cryptocurrency as well as countless other industry projects, is able to process transactions in around 15 seconds, whereas Bitcoin's network generally takes around 15 minutes.

More affordable and efficient

Blockchain networks can operate through multiple computers across the world, sometimes thousands, in an open P2P configuration. There is no centralised database or server, and because of this users, or nodes, can organise and audit information quicker and more effectively. But the time taken to verify information does scale with the size of the network.

There are benefits to the nature of blockchain networks, with implications for privacy and security. For instance, the fact the data is not stored in any one location means it is difficult, if not impossible, to hack these networks and steal any data, or shut them down. They are also able to withstand the risk of outages, as all nodes would have to be individually taken down for the blockchain to be knocked offline.

Cooperation and collaboration are normally at the heart of most blockchain networks too, with the various users operating under a shared goal. For example, users in the financial services sector would be working to building a safer and more secure method for storing and processing transaction information. While a physical file room may have once been a fixture of such operations, a blockchain network can enable one to transmit data far quicker, and more accurately.

The scope for blockchain to reduce the risks of fraud, and allow for more affordable financial processes, is greater too - with many systems such as these, albeit in their infancy, already producing some results. Santander, for example, earlier this year rolled out a blockchain technology based on Ripple that could accelerate payments across borders.

Public vs private

Much like the field of cloud computing, the function and implementation of blockchain can vary significantly depending on whether it's designed to be public or private. The primary distinction between these types comes down to who can access a system.

Public

Public blockchains operate a shared network that allows anyone to maintain the ledger and participate in the execution of blockchain protocol - in other words, authorise the creation of blocks. It's essential for services such as Bitcoin, which operates the largest public blockchain, as it needs to encourage as many users as possible to its ledger to ensure the currency grows.

Public blockchains are considered entirely decentralised, but in order to maintain trust, they typically employ economic incentives, such as cryptocurrencies, and cryptographic verification. This verification process requires every user, or 'node', to solve increasingly complex and resource intensive problems known as a 'proof of work', in order to stay in sync.

This means public blockchains often require immense computational power to maintain the ledger, which only worsens as more nodes are added, and predicting how much that will increase is difficult. Given the number of voices in the community, it's also incredibly difficult to reach a consensus on any technical changes to a public blockchain - as demonstrated by Bitcoin's two recent hard forks.

Private

Private blockchains are arguably the antithesis of what the technology was originally designed for. Instead of a decentralised, open ledger, a private blockchain is entirely centralised, maintained by nodes belonging to a single organisation or entity.

It's a novel design tweak that has allowed the technology to flourish within those organisations looking for the same streamlined transactions afforded by public blockchains, only with highly restricted access. As there are fewer participants on the network, transactions are normally cheaper and verified far quicker on private chains, and fixes to faults or network upgrades can be implemented almost immediately.

In order to share the data stored on a private chain, they often operate using a permission-based system, in which node participants are able to grant read access to external parties, such as auditors or regulators looking to check the inner workings of a company.

Unfortunately, as there are fewer nodes maintaining the blockchain, it can't offer the same high levels of security afforded by decentralised chains.

Consortium

'Consortium' is best described as the 'hybrid cloud' of blockchain. It provides the robust controls and 'high trust' transactions of private blockchains, only without being confined to the oversight of a single entity.

It sits somewhere in the middle. Although they provide the same limited access and high efficiency afforded by private blockchains, dedicated nodes are set aside to be controlled by external companies or agents, instead of having only read access under a private blockchain.

The easiest way to understand how it differs is to think of consortium blockchains as the equivalent of a council group - with each member having responsibility for maintaining the blockchain, and each having permissions to give read access.

Given its collaborative design, it's a perfect solution for supporting the work of government committees or industry action groups where a number of companies may come together to tackle an issue - whether that be industries working to combat climate change or maintaining a shared ledger to support the work of the United Nations.

Blockchain vs Distributed Ledger Technology

The term blockchain is often deployed to refer to a host of similar yet different technologies and is often falsely used to refer to any decentralised distributed database. Blockchain is, in reality, only one form of the emerging distributed ledger technology (DLT).

DLT is a form of technology comparable to a database but distributed across multiple physical sites and locations, regardless of how near or far from one another. The purpose of such a phenomenon is to avoid having to rely on a centralised storage system or the need for a middle-man, like a network, to authorise and record changes to the records. When changes are requested, the lack of a centralised system means approval is demanded from all notes across a DLT network.

This concept is being adopted by businesses and organisations at a fast pace, and across various industries. This is not just an innovation developed and taken up by tech companies, but sectors like manufacturing and finance.

There are a number of formats in which DLT arises, but the central idea of a diversity of control is at the heart of all of these. One form of distributed ledger, for example, allows data to be stored on separate nodes, such as banking records beginning with each letter of the alphabet dispersed among different locations Rather than replicated to each area, like in a database as we've always known, the data is spread across parts of a network.

Blockchain simply refers to one iteration of this form of technology, more specifically, a data structure that takes the shape of entries stored in blocks. This form of structuring data offers an element of synchronisation between parts of a network - and it's essential for supporting innovations like Bitcoin.

Despite its success as the building block of currencies like Bitcoin, the system doesn't necessarily need to have miners and tokens to qualify as a blockchain - the term simply refers to the structure of arranging data into blocks. Blockchains, as a result, are decentralised ledgers where data is replicated rather than distributed.

Unfortunately, the frequency at which blockchain and distributed ledger are used interchangeably has created confusion over the technology as a whole, leading many to dismiss blockchain as simply a tool for Bitcoin.

Chief executive of virtualisation giant VMware, Pat Gelsinger, has hit out at cryptocurrencies such as Bitcoin and Facebook's Libra, arguing that their usage is unsustainable and fuelled by criminal activity, comparing them to opioid addiction.

As part of his opening keynote for VMworld 2019, Gelsinger touched on the idea that technologists have an obligation to make sure that the technology they create is being used for good purposes. He noted that while technology itself is neutral, it often leads to unfortunate outcomes if not closely monitored.

"[Blockchain has] given way to Bitcoin, which I will argue is bad. 95+% of its uses are illicit and criminal, and it is a climate crisis, consuming almost a household of energy for every single ledger entry. Bitcoin today is not okay. But the underlying technology is extremely powerful, and blockchain and distributed ledgers are not the problem."

Speaking to IT Pro, Gelsinger stated that although blockchain technology (of which VMware is a provider) can be a powerful enabler for more efficient currency models, there is no major world government that is going to "disenfranchise currency from their political and governmental control processes".

"As a result, what's it used for? 95% is criminal activities! So how can you call that good? If I turn the world into opioid addicts, right, and I made it feel a little better in getting there, was that good or bad?"

He also blasted Libra, Facebook's nascent cryptocurrency platform, which has come under extreme scrutiny from lawmakers and financial experts, including US treasury secretary Steven Mnuchin, who called it a "national security risk". Gelsinger voiced similar concerns, declaring that the company lacked the credibility to undertake such a project.

"I'm not a Libra expert here," he told IT Pro "but I think Facebook has no credibility in the social domain, much less in the finance domain, to bring forward a new model of currency for the world."

Craig Wright, the Australian IT security consultant who has claimed to have invented Bitcoin, has been ordered by a US judge to hand over half his Bitcoin holdings to the estate of his alleged former business partner. The payout could be worth over $5 billion.

Wright was sued by the estate of David Kleiman, who died in 2013. The estate alleges that Wright and Kleiman were partners and that the estate is entitled to a share of the Bitcoin mined by the pair. The pair were involved with the cryptocurrency from 2009 to 2013.

In a US district court in Florida, it was ruled that half of the mined currency and intellectual property from that time belongs to Kleiman. However, it is not known just how much bitcoin Wright has and Wright has claimed that he is unable to access all of them.

According to reports from the Guardian, Wright told the court that many of the mined bitcoins were encrypted when the currency became associated with criminals and money laundering. Encryption keys used to scramble the bitcoins were divided up and given to Kleiman who then distributed them to other people through a trust.

Wright has said that the file containing bitcoins could not be decrypted until January 2020 when he gets a key from a bonded courier. Wright has made such a claim before when he alleged he was Satoshi Nakamoto, the pseudonymous creator of bitcoin.

Judge Bruce Rheinhart described his story as "inconceivable" and criticised his credibility as a witness.

"During his testimony, Dr. Wright's demeanor did not impress me as someone who was telling the truth. When it was favorable to him, Dr. Wright appeared to have an excellent memory and a scrupulous attention to detail. Otherwise, Dr. Wright was belligerent and evasive," Reinhart said.

I never thought I'd find myself in absolute agreement with US president Donald Trump. Whether it's a sign of a changed man or just simply the law of averages, Trump's latest Twitter tirade has, for the most part, shown a remarkable degree of foresight.

Yesterday, Trump spent part of his evening expressing his unsolicited take on cryptocurrencies, arguing that the likes of bitcoin are valued "based on thin air" and are responsible for a rise in drug trafficking and other illegal activities. He also took a swipe at Facebook's new crypto project Libra, which he argues will have "little standing or dependability" unless it is subject to banking regulations.

It's worth noting that I have always been in favour of cryptocurrencies, at least in concept. The notion of an alternative to traditional banking could prove to be revolutionary, and the spirit of crypto greater control over money and better access to financial services for more of the world's population is still a commendable worthwhile vision.

Yet, whether it's a genuinely held belief or the opinion of someone whispering in his ear, Trump is right in his cynicism of crypto. Bitcoin, in particular, has proved too volatile to be useful as a long term payment method and, let's face it, is only celebrated by those who were shrewd enough to invest early. In fact, I was unable to suppress a shudder when I read this week that the Winklevoss twins, brothers who raked in a fortune from the surging price of bitcoin, had congratulated Mark Zuckerberg on the Libra project with the message: "Welcome to the party".

When it comes to Trump's comments on Libra, however, the issue is less about volatility and more about a lack of trust. Trump is right when he says the Libra Association needs to be subject to regulations if it's to have any clout though I suspect our reasoning differs somewhat. Regardless of your attitude towards current banking regulations, at least they enforce some semblance of accountability for new companies entering the market.

The Libra Association, with its plans to connect billions of users around the world with a virtual currency, currently sits outside the jurisdiction of any authority. There is no oversight governing what it can and can't do, or dictate what sort of services and terms it can offer. That may be welcomed by those that celebrate the decentralised nature of bitcoin, but, for me, that's troubling. Let's not forget, the Libra Association is covered in the stink of a social media company that has, over the course of a single year, comprehensively destroyed its reputation and eroded all trust in its platform.

This deliberate attempt to avoid scrutiny is what I have issue with. I simply don't trust a project of this kind to protect an individual's data and money, and it seems that regulators across the globe don't either. There are already reports that the project could be blocked in India, and the US Federal Reserve is calling on a halt to its development until risks can be assessed. Facebook likely anticipated this backlash, which is possibly why the project was announced in advance of its 2020 launch date.

One Libra investor perhaps put it best when he told CNBC that many countries are "freaked out about the ruthless amoral Facebook vampire squid having its tentacles jammed into their countries control of currency and banking systems". This is from a guy who is actively supporting its development.

On this one issue, Trump is absolutely right. I never thought I'd say those words.

The popularity of cryptocurrencies over the past decade has almost been as turbulent and volatile as their monetary valuations. Having spent many years in relative obscurity, the popularity of cryptocurrencies, or digital tokens, soared in 2019 and 2020, as did the number of cryptocurrency miners. But what exactly is cryptocurrency mining?

The process for creating 'new' cryptocurrencies varies depending on the blockchain in question, however many follow a process known as 'mining'. The process is a cause of concern for many lawmakers and environment groups, as it requires an enormous amount of energy to pull off.

Cryptocurrency mining: A simple definition

Cryptocurrency mining is the name given to the process of completing 'work' on the behalf of the supporting blockchain – the digital ledger technology that supports each individual cryptocurrency. There is one blockchain for each cryptocurrency, controlling all the trading and activity of that particular coin.

When it comes to major cryptocurrencies like Bitcoin, there are only a finite number of new cryptocurrency tokens, or coins, that can be 'minted', which is by design.

Perhaps a good way to visualise this idea is to imagine a group of people stumbling across a large block of gold. There is only a single block of gold, and it has a set weight. The only way for this group to take a chunk of it for themselves is to chip away until they each get a nugget. This is essentially how cryptocurrency mining works – the trading of energy or computational power for a reward.

However, the term 'mining' is a little misleading, as the process does not resemble any sort of mining you may be familiar with.

How is cryptocurrency mining related to the blockchain?

Digital tokens like Bitcoin can’t be printed like money, and the only way to generate new coins is through the process of mining, although the term 'mining' is perhaps misleading. It stems directly from the specific blockchain that powers each individual cryptocurrency, from Bitcoin to Ether.

Each particular distributed public ledger supports the operation of a corresponding cryptocurrency and records all transactions across the extent of its network. For our guide on how blockchain technology works in more detail, check out our explainer.

The blockchain records every time cryptocurrency is traded, with these records being compiled into an endless line of blocks that are all connected. For transactions to be validated, they will need to be verified by other users on the network. This process is key to the way that cryptocurrencies work and avoids instances whereby individuals try to initiate several transactions using the same units.

Cryptocurrency mining is effectively a process of rewarding network users with Bitcoin for validating these transactions.

How are new coins mined?

When a slew of transactions is assembled into a block, it is then appended to the blockchain. However, in order to be rewarded with Bitcoin, a ‘mining’ user, or ‘miner’, needs to perform two tasks: validate 1MB worth of transactions as well as be the first to find out a unique 64-digit hexadecimal number - also called a hash.

Similarly to the blockchain, the network user, or 'node', also holds a record of every transaction. As it is notified, the transactions are validated with a series of checks in order to make sure they are legitimate. The checks include scanning the transactions for a unique cryptographic signature, which is created at the beginning of the process, and confirming whether it is valid or not.

In order to be within a chance of securing new Bitcoin, every miner seeks to validate 1MB worth of these transactions. If successful, they then also have to solve a numeric problem which is otherwise known as 'proof of work'. Users who are able to triumphantly generate the correct 64-digit hexadecimal number, or 'hash', which is either less than or equal to the target hash associated with the block, are then remunerated with Bitcoin.

Due to the difficulty of the task, the only feasible way to find the right hash is to calculate as many combinations as possible, and then wait until a match is found.

In order to stand a chance in being the first one to guess a hash, a user needs to have a high hash rate, or hash-per-second, and the more powerful setup, the more hashes a user can sift through - such are the high computing costs of mining. In order to visualise it, imagine a competition where contestants have to guess the correct weight of a cake. Participants have an unlimited number of guesses and the first one to submit the correct weight wins. In this competition, the winner is most likely to be the contestant who is capable of making the most guesses at the fastest rate.

Proof-of-work vs. proof-of-stake

Different blockchains operate on different models, and the advantages and disadvantages of each have long been discussed by cryptocurrency enthusiasts. Ethereum recently made the decision to move to a different, more modern and greener type of blockchain, but the complexities involved in doing so have resulted in delays to the switch.

Bitcoin’s blockchain uses a proof-of-work model, which involves computers dedicated to performing calculations on behalf of the blockchain and then earning a Bitcoin reward. This model has been heavily criticised for its energy use, mainly because the system incentivises the formation of large numbers of powerful computers that are able to act as one and effectively muscle other miners out of the way and take the rewards for themselves.

Ethereum’s upcoming proof-of-stake model aims to eliminate both the high energy use and dominance of ‘mining farms’. It assigns computational power used for cryptocurrency mining at random and it promises to drastically reduce energy since mining farms will not be able to secure their previously dominant share of mining. In fact, Ethereum predicts moving to proof-of-stake will cut its energy use by 99%.

The limits of cryptocurrency mining

What this means is that mining for cryptocurrencies is a matter of competing in a highly competitive race against other participants, all hoping to land the winning ticket and grab a payout.

However, that’s not the only challenge you will face if you attempt to mine yourself. The difficulty of calculating each hash also increases artificially in order to maintain a steady flow of newly created blocks. This means that as the block count rises, so too does the processing power required to solve each calculation, and therefore the harder it is to mine as a hobbyist. There’s also the issue of hard limits on total circulation. For example, within the Bitcoin blockchain, there will only ever be 21 million coins created in total, a deliberate design to prevent inflation.

In the early days of each cryptocurrency, it’s perfectly possible for everyday users to participate in mining, but given the issues outlined above, the maturity of cryptocurrencies such as Bitcoin means that it’s no longer possible to use standard PCs. The complication of the calculations involved, coupled with the sheer number of other people on the network, means that Bitcoin mining can now only be done with large scale processing ‘farms’ – multiple specialised GPUs working in tandem on a 24-hour basis.

In fact, these days it’s almost impossible to create a return on investment from mining as the energy costs required to power GPU farms typically outweigh the value of the currency itself. Either that, or you’ll be forced to funnel the majority of what you earn into the running and maintenance of the equipment.

As the Bitcoin hype is more or less fully nestled in the wider public consciousness, organisations have invested increasingly considerable sums into it, effectively industrialising cryptocurrency mining. Large warehouses packed to the brim with floor-to-ceiling racks of expensive graphics cards, working towards the sole aim of mining new units of Bitcoin, Ether, Litecoin, and so on, have become the norm.

The Bitcoin network – to add some context – processes 5.5 quintillion hashes per second, which means that unless you have the equipment capable of processing a massive quantity of calculations in a very short space of time, the chances of you being able to compete with the more industrial operations are minuscule.

For this reason, miners often band together and pool resources to maximise their chances of profiting from the cryptocurrency mining game – creating 'mining pools' – sharing their power, as well as any returns their efforts may generate between them.

The legality of cryptocurrency mining

The legality of cryptocurrency mining differs across countries, and bans are usually imposed for one of two reasons. The first is usually linked to a state’s approach to cryptocurrency overall, meaning that if a government is against cryptocurrency trading, it will likely outlaw mining as well.

An example of this is China, where the State Council Financial Stability and Development Committee banned all cryptocurrency trading and mining in 2021 due to its alleged links to illegal activity. Chinese banks and financial institutions are also prohibited from providing cryptocurrency-related services – a move that sent the price of Bitcoin tumbling by roughly 30% in May 2021. Prior to the crackdown, China was home to roughly 65% of the world's cryptocurrency mining. Today, the country’s share of global Bitcoin mining has fallen to effectively zero, according to the Cambridge Bitcoin Electricity Consumption Index.

The second reason that states ban cryptocurrency mining is linked to its immense energy consumption – Bitcoin consumes roughly 148 Terawatt hours (TWh), which is more than entire countries. For instance, Argentina, the Netherlands, and the United Arab Emirates consume 121 TWh, 109 Twh, and 113 Twh respectively. In January 2022, during the “worst energy crisis in a decade” affecting a number of European countries, Kosovo officials banned cryptocurrency mining in an effort to prevent additional electricity blackouts. Prior to the ban, Kosovo was considered a cryptocurrency mining haven due to its low – and often state-subsidised – electricity bills, with some miners refusing to pay them altogether. However, for the time being, the state hasn’t passed any legislation that opposes cryptocurrency trading itself.

Dozens of world's largest retail chains have started accepting cryptocurrencies as a means for paying for goods in physical stores, with initial support for bitcoin, ether, bitcoin cash and gemini dollar payments.

US retailers including Starbucks, Whole Foods, Game Stop, Nordstrom, and Jamba Juice have partnered with mobile payments firm Flexa, which has built a new network capable of simplifying the payment process.

Payments are handled using Flexa's mobile app Spedn, which has a user's cryptocurrency wallet attached. The app generates a QR code that can be scanned at the checkout, which then prompts a payment transfer from the attached wallet to the store, converting the payment into dollars along the way.

Although the app only supports a handful of cryptocurrencies at launch, the plan is to provide support for any token at any store.

What makes the process so compelling is that payments are issued immediately to the retailer, something which is typically difficult to achieve with cryptocurrency payments. In order to do this, the Flexa network has developed its own token, known as the FlexaCoin, with the network acting as a middle man for the process.

Once the QR code has been scanned, the network will pay the store immediately using the FlexaCoin as collateral, and will then start the much slower process of debiting cryptocurrencies from the user's wallet.

What this means in that stores need only sign up to officially support the app, without having to do any of the legwork required to support the network, such as setting up their own cryptocurrency wallets.

Currently, the system is only available in the US, but given that a number of the stores involved are global chains, it's possible we could see UK stores supporting the payment option in the near future.

The announcement coincides with a partial market resurgence. Bitcoin has surged by almost $3,000 since the start of May, with similar percentage gains across ether, bitcoin cash, and litecoin.

26/04/2019: Bitcoin price drops 6.4% amid Bitfinix allegations

New York's Attorney General Letitia James has filed a lawsuit against iFenix inc., the owner and operator of the Bitfenix cryptocurrency exchange and Tether, the company behind the stablecoin of the same name for allegedly covering up fraudulent activity.

James alleges that Bitfinix failed to inform authorities that it allegedly lost $850 million of its customer's money and then tapped into $700 million from the $900 million-strong reserve cash of Tether, the stablecoin it effectively owns in order to replace it in the hope that the State of New York wouldn't notice.

Tether is a stablecoin that many traders use and rely on for liquidity in markets; if the allegations prove true then the valuation of the coin and its users' assets will plummet, proving the long-questioned monetary reserve backing of Tether correct.

The knock-on effect of this resulted in a massive decline in valuation across all cryptocurrencies including Bitcoin which dropped 6.4% to a valuation $5,143 but has since risen to $5,288 at the time of writing - around a $400 drop since the start of the week.

03/04/2019: Bitcoin price rises 20% due to mysterious mass investor

Bitcoin surged to its highest price since November on Tuesday, pulling other 'altcoins' up with it thanks to an anonymous person buying a large amount of the oldest and highly volatile cryptocurrency.

Bitcoin rose up to 20% according to Asian trading, reaching a $5,000 valuation for the first time since mid-November 2018 but then later settled at $4,800 which still marked the biggest one-day rise in a year.

The massive order from an anonymous buyer totalling around $100 million kickstarted a crazed trading period whereby investors tried to capitalise on the sudden and unexpected upturn of the coin's valuation.

The big order of roughly 20,000 BTC was spread across various exchanges: Coinbase, Kraken and Luxembourg's Bitstamp said Oliver von Landsberg-Sadie, chief executive of cryptocurrency firm BCB Group.

Analysts have been unable to pinpoint with any certainty to any specific reasons why the mysterious buyer chose to buy so much of the crypto at this time specifically.

Bitcoin's underlings Ethereum (ETH) and Ripple (XRP), the second and third most popular cryptocurrencies respectively also saw surges in their valuations as a direct result of the recent Bitcoin investment - both ETH and XRP soared by more than 10%.

Prices of lesser coins tend to be linked with developments to Bitcoin, which still holds over half the value of the entire crypto market.

28/02/2019: Samsung S10 to feature Bitcoin wallet

Samsung has confirmed its latest flagship phone the Galaxy S10 will feature a cold-storage cryptocurrency wallet.

Among a host of upgrades, the Galaxy S10 and S10+ will allow its users to securely store digital currencies, like Bitcoin and Ethereum, as well as host a number of decentralised apps (dApps).

Samsung confirmed the new feature at one of its business sessions during Mobile World Congress this week, according to CoinDesk Korea.

Although a handful of 'blockchain phones' already exist, Samsung's device will become the first mainstream handset that can support the most widely-used cryptocurrencies when it begins shipping in March.

Little information about the specifics around how the cold-storage wallet works have come to light, but the South Korean tech giant hinted at the feature at its launch event for the Galaxy S10 last week.

"Galaxy S10 is built with defence-grade Samsung Knox, as well as a secure storage backed by hardware, which houses your private keys for blockchain-enabled mobile services," the event's accompanying press release briefly stated.

HTC in announced plans to build a blockchain-powered phone, dubbed the Exodus 1, similarly featuring a cold-storage wallet, last May. The handset, which has already been released, comes packaged with a universal wallet and hardware support for all major cryptocurrencies as well as dApps.

This followed Foxconn's announcement in April that it aimed to release its own blockchain-centric phone that would run on similar technology. This 5.5in handset, which was released in November, also features 64GB internal storage and 6GB RAM with a 12MP main camera and a 13MP front-facing camera.

Previous Bitcoin news

21/11/18: Bitcoin plummets to one-year low as market decline continues

The crypto that reached dizzying heights in 2017 has fallen further in value to a new 2018 low of $4,387 (3,432), taking its total losses to nearly 30% in the past week.

Bitcoin enjoyed a period of stability in September and October this year, hovering steadily in the $6,000 to $7,000 range but dropped suddenly below $5,600 (4,733), making it the lowest value since October 2017 at the time.

Bitcoin price from previous seven days (14/11/2018 - 21/11/2018) according to CoinMarketCap

The news comes in stark contrast to predictions from Bitcoin enthusiasts and Fundstrat Global Advisors' Tom Lee about the potential for the cryptocurrency to rise to an impressive high before the year is out.

In an interview with CNBC, Lee maintains that Bitcoin can reach a year-end value of $15,000 dollars, reducing his original prediction by $10,000. "There's a few things that could happen that could drive [a price increase], Lee said, without detailing hat these were.

"But these past few days have definitely been a negative development because we're talking about breaking to the downside of momentum."

The hard fork to Bitcoin Cash is expected to have played a contributing factor into the initial slump last week. The cryptocurrency born out of a hard fork to Bitcoin in August 2017, was forked on Thursday, splitting it into two separate blockchains.

Cryptocurrencies get hard forked only when the vast majority of the mining community associated with that currency is in favour. In Bitcoin's case, developers wanted to raise the block size limit, theoretically allowing for more, faster transactions on the new and upgraded blockchain.

15/11/2018: Bitcoin plummets to one-year low as market decline continues

The price of Bitcoin has slumped below $5,600 (4,377) for the first time in over a year on Wednesday, equating to 10% drop in its total value.

In a significant turn following a period of stability in recent months, which saw it hover between $7,000 and $6,000, the world's most funded cryptocurrency hit its lowest price point in since October 2017, stabilising at $5,322 (4,160) on Wednesday evening.

Bitcoin price (April-November 2018) according to CoinMarketCap

Experts suggest that the slump was expected and that an upcoming hard fork of Bitcoin Cash, expected on Thursday, has created widespread uncertainty across the market. This echoes Bitcoin Cash's own creation when it split from Bitcoin in July 2017.

Following Bitcoin's plummet, other leading cryptocurrencies, including Ethereum, Litecoin and Ripple, also experienced drops of around 17%.

"It's safe to say that bitcoin cash's upcoming hard fork stirring uncertainty among crypto investors, and forecasters across crypto and traditional markets alike have predicted a prolonged bear market heading into 2019," said Donald Bullers, North American representative for the blockchain firm Elastos, in an email to The Independent.

2017 saw unprecedented demand for Bitcoin, seeing the currency surge from a $1,000 valuation to nearly $20,000 in a year. However, like most trends, it seems the hype has ebbed away, as the coin has endured a 60% drop in valuation over the course of 2018.

19/09/2018: MPs urge government to tame crypto "Wild West"

MPs have urged the government to reign in what is being described a "Wild West" cryptocurrency market, with calls for regulations to help protect against volatile price swings, anonymous activity and security vulnerabilities.

In February, the Treasury Committee announced it would be launching an investigation into the risks of cryptocurrencies for investors and the UK economy, in a bid to "scrutinise the regulatory response" from authorities.

The government's current approach to regulations has now been criticised for being too ambiguous and unsustainable in the long term, in the final report released on Wednesday.

The report argued that regulations would lead to better protections for consumers, enable sustainable growth for the market as a whole, and help reduce the risks associated with hacking and lost account details.

If enacted, Britain could become a "global centre for crypto-assets", the report added.

"Bitcoin and other crypto-assets exist in the Wild West industry of crypto-assets. This unregulated industry leaves investors facing numerous risks," said Nicky Morgan MP, chair of the Treasury Committee.

"It's unsustainable for the Government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting. If the Government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global centre for this activity."

The cryptocurrency industry relies largely on self-regulated bodies which adhere to a code of practice, however, this is voluntary and will inevitably lead to companies abusing the system, the report found. The Committee suggested at a minimum regulation should be introduced to address the risk of money laundering.

Interestingly, the Committee also hinted at the possibility of a deliberate stifling of the market, urging the government to assess whether the growth of cryptocurrencies should be encouraged in the context of the wider economy.

However, if regulatory action is favoured, online exchanges are likely to be the first target. Exchanges, where customers buy and sell cryptocurrencies, have featured in a number of high profile data breaches over the past year, companies which lacked any form of payment insurance, leaving customers out of pocket.

The report also assessed the feasibility of blockchain, the underlying technology that supports most cryptocurrencies on the market. While it found that development has been slow, costly to set up and often consumes large amounts of energy, there are potential use cases for the storage and management of data in the long term.

The European Union has similarly avoided introducing regulations to the market, largely due to its relative infancy.

06/09/2018: Billions wiped from Bitcoin in less than an hour

The price of Bitcoin fell over $500 in the space of an hour earlier this morning during a sudden market slump that put every major cryptocurrency into the red.

Every one of the world's top 100 most traded cryptocurrencies was hit by the price crash, with most trading around 20% below their value just one day ago.

Bitcoin prices according to CoinMarketCap

The cause of the crash isn't clear but it seems to coincide with an announcement from Goldman Sachs that it will be ditching plans to launch a cryptocurrency trading platform.

A number of major sell-offs occurred shortly before the announcement, leading some to speculate on Twitter that investors may have had insider knowledge of the decision.

The slump saw billions wiped off the market value, with Bitcoin alone losing just over $9 billion within 60 minutes of trading. Ether, Bitcoin Cash, Monero and Litecoin all fell either just below or above 18%.

It's yet another blow for a market that's struggled to recover from a major crash in January, which saw the value of many cryptocurrencies effectively cut in half. Since that time, the market has seen similar, albeit less dramatic slumps, keeping the price of Bitcoin down between $5,000 and $7,000 -- a far cry from the $19,300 mark it enjoyed in December last year.

However, Bitcoin evangelists have celebrated the currencies relative stability over the past few months and, despite occasional slumps, maintain that the cryptocurrency is still capable of hitting $20,000 by the end of 2018.

23/08/2018: Following a shocking period of decline for virtual currency Bitcoin's value, it has finally started rising again, after traders took advantage of rival platform BitMEX's schedule maintenance.

When the alternative cryptocurrency went down and was therefore inaccessible for traders, Bitcoin's value simultaneously rose from around $6,450 to nearly $6,900 almost instantly as cryptocurrency speculators rushed to buy Bitcoin.

When maintenance on the BitMEX platform was finished, some users said they were still struggling to access the service, allowing Bitcoin to continue stabilising (although it did hit the high of $6,858.61 before declining again slightly). The company later revealed this was due to a DDoS attack, although it seems the system is back up and running now.

The price of Bitcoin according to Coinmarketcap.com

By the end of the day, the digital currency was almost back to its starting price, although analysts and digital currency commentators said this indicates that maybe Bitcoin's days aren't over and there is hope that it'll hit $10,000 again this year. Bitcoin is still down 66% compared to its $20,000 value at the tail-end of last year.

Other digital currencies also rose when BitMEX went down, although not to the same extent as Bitcoin. For example, Ethereum rose 1.72% to trade at $298.91, Ripple rose by 8.61% and Litecoin's value increased by 1.59% to hit $57.83.

07/08/2018: Bitcoin's value has fallen below $7,000 for the first time, following a 19-day drop - with other cryptocurrencies following suit.

This is the first time since July that Bitcoin's value has been sub $7,000, following a steady stream of increases and putting the year-to-date decline at 60%. Over the last two weeks, the cryptocurrency has dropped by 17% and over just three days has lost 48.76% of its value.

The price of Bitcoin according to CoinMarketCap

At its lowest point, Bitcoin hit $6,933.09 according to the CoinDesk Bitcoin Price Index (BPI). Although not as low as the year's low, which was $5785.43 in June. However, just one month later, the currency hit the annual high of $8,479.33.

One of the reasons Bitcoin may have dropped so suddenly is the news that Starbucks is set to team up with Intercontinental Exchange to bring together digital currencies and commerce. This seems to worried some as to what it means for traditional currency.

"If you really dig into it, the service would allow customers to convert their cryptocurrency at the time they're making the purchase," said Ryan Taylor, chief executive officer of Dash Core explained to Bloomberg. "They're clarifying that 'hey, we're not getting into cryptocurrency speculation here -- we're accepting dollars, same as we always have.'"

This trend shows the real volatile nature of cryptocurrencies. In fact, it's not just Bitcoin suffering from losses either. At the time of writing, Ethereum was down by 1.48%, XRP by 5.23% and Litecoin down 3.37%.

24/07/201: City of London police get cryptocurrency training

The City of London Police is teaching officers to understand cryptocurrencies, as more criminals turn to them as a method of fraud and money laundering.

The new one day course, called Cryptocurrencies for Investigators, is the first of its kind in the UK and will be taught by the force's Economic Crime Academy (ECA).

"In recent years the cryptocurrency market has grown considerably, with more and more people using it and investing their money," said Mike Betts, head of skills and development at the ECA.

"However, this surge in popularity has also given rise to more fraud in this area, with criminals identifying cryptocurrencies as a new way to defraud people and steal their money, and also launder money."

Officers who successfully complete the course will be able to understand how to detect, seize and investigate the use of cryptocurrencies and will be able to explain the investigative opportunities available to recover and trace them. The course also covers the criminal use of cryptocurrencies and the legal framework relevant to digital currency investigation.

So far the ECA has delivered a successful pilot course to City of London Police officers, with another scheduled in August for a regulatory body partner. It is hoped that the course will then be rolled out nationally in autumn.

"The Economic Crime Academy continues to develop national and international courses in response to emerging threats and this new course will provide training to counter the growing risks that cryptocurrencies pose," Betts added.

Bitcoin and other cryptocurrencies are used by criminals who value the lack of transparency around transactions, as well as the difficulty of tracing money flows. A recent incident saw the Indian Bitcoin exchange Coinsecure hit by a devastating cryptocurrency heist in April, where thieves made off with $3.3 million worth of digital coins.

The company posted an announcement on its homepage in April telling users that its systems had been breached and that the attackers had stolen around 438 bitcoin ($3.3 million).

18/7/2018: Bitcoin value soars above $7,000

Bitcoin grew above a $7,000 valuation yesterday, in what was one of the cryptocurrency's biggest upswings in over a year.

The volatile digital currency sunk below $10,000 in March after reaching to close to $20,000 a coin at the end of 2017, thanks to a combination of regulatory actions and warnings.

It's difficult to point to the exact reason for the rise, up from around $6,300 on Monday, but Bitcoin has had positive regulatory news in the market for digital currencies recently, and incoming Goldman Sachs boss David Solomon has said the bank wants to add more digital currency services.

Explaining the rally in Forbes, blockchain investor and advisor Oliver Isaacs pointed to positive developments and the impact they had on the markets.

"I think we are starting to see a strong positive shift in sentiment," he said. "Major recent positive news includes the CFA examination adding blockchain topics to its curriculum, a move that is most certainly going bring widespread knowledge and exposure of digital assets to Wall Street.

"In addition, Coinbase, which is the largest exchange in the world, has just been approved to list securities, representing significant progress in its bid to operate as an officially regulated crypto broker-dealer".

This is a rare upswing in the price of Bitcoin, which fell to its lowest point in eight months at the end of June, where the cryptocurrency dipped below $5,800, a price not seen since early November.

Such is the influence of Bitcoin on the market, the fall in value has been felt by almost every other major cryptocurrency.

29/06/2018: Bitcoin drops to eight-month low, wipes out end-of-year price surge

The price of Bitcoin has now fallen to its lowest point in eight months, officially undoing all the gains it made during its unprecedented climb at the end of 2017.

This week the cryptocurrency dipped below $5,800, a price not seen since early November.

The world's most funded cryptocurrency made headlines across mainstream media for its dramatic surge in value that saw the value of one virtual coin rise from around $1,000 at the start of 2017, to just under $20,000 by December.

Data courtesy of coinmarketcap.com

The hype created a buzz of interest among short-term investors looking for a quick return, despite warnings from financial institutions that the currency's volatility would almost certainly result in mass losses.

Those losses came following a sudden market sell-off between January and February that saw almost $8,000 wiped off the currency, and despite the occasional modest resurgence, Bitcoin has essentially been in free fall ever since.

Given the influence Bitcoin exerts on the market, the fall in value has been felt by almost every other major cryptocurrency.

Ether is currently priced at $416, while Bitcoin Cash, a currency created as a result of a fork in Bitcoin, is valued at $665, both of which hold a similar position held before the late November price surge.

A handful of currencies, including Ripple at $0.44, still retain some of their gains, however, these are a fraction of the prices seen in December.

The market has come under increased pressure from regulatory bodies seeking to protect investors from a volatile industry, while a series of breaches to cryptocurrency exchanges have undermined the trust that investments will remain secure.

28/06/2018: Facebook drops cryptocurrency ad ban

Facebook is to reverse a decision on banning cryptocurrency ads running on its social network.

The social network will immediately allow advertisers to promote cryptocurrency products again, backtracking on a previous decision to block them.

However, it said that advertisers wishing to do so must submit an application to help Facebook assess their eligibility including any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business.

"Given these restrictions, not everyone who wants to advertise will be able to do so. But we'll listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time," said Rob Leathern, product management director at Facebook.

Facebook brought in the ban in January. At the time it said that too many firms were "not currently operating in good faith". It added that the ban was "intentionally broad" while it worked to better detect deceptive and misleading advertising practices.

While the ban has been partially rescinded, Facebook continues to prohibit ads that promote binary options - where traders bet on a market movement for a set amount of money - and initial coin offerings. It added that users of the social network should continue to report content that violates its Advertising Policies by selecting "report ad" in the upper right-hand corner of any advertisement.

Bitcoin has suffered a fall in its value to just above $6,000 after more than $20 million in Bitcoin was seized from illegal vendors on the Darknet by the Department of Justice (DoJ) in the US. According to a statement released by the DoJ, the operation involved the Secret Service, the Drug Enforcement Administration and the Postal Inspection Service, and was the nation's "first nationwide undercover operation targeting darknet vendors".

Law enforcement officials also seized illegal drugs, firearms, $3.6 million in cash and gold bars.

The digital currency could plummet further to $5,000 before summer ends, according to the Express, due to tough regulation in Japan and the hacking of some exchanges across Europe.

18/06/2018: Bitcoin could never replace flat currency, says central banking authority

Bitcoin could never replace fiat currency because it is a poor substitute for the institutional backing of money, according to a report from the Bank of International Settlements (BIS).

In a report called Cryptocurrencies: Looking beyond the hype, the Swiss-based umbrella group for the world's central banks rejected the notion that Bitcoin and blockchain could ever replicate bank-backed currencies on a national retail scale because they are 'unstable', and would struggle with the scale of transactions people make.

"The key issue with cryptocurrencies is their unstable value. This arises from the absence of a central issuer with a mandate to guarantee the currency's stability," BIS said in its report, a reference to Bitcoin's fluctuating value - it has fallen from a near-$10,000 valuation in early May to just $6,458 today.

"Well-run central banks succeed in stabilising the domestic value of their sovereign currency by adjusting the supply ... in line with transaction demand," BIS's report added. "They do so at high frequency, in particular during times of market stress but also during normal times." This ability to boost the number of currency tokens in circulation isn't possible with Bitcoin and other cryptocurrencies, which generally have a hard limit for the total number of tokens it is possible to create, and which become increasingly difficult to mine.

BIS also said that cryptocurrencies are also vulnerable to a breakdown in confidence because trust can evaporate at any time due to the fragility of the decentralised consensus through which transactions are recorded - where far-flung people confirm and record transactions via blockchain's distributed public ledger.

In addition, the bank suggests that using a blockchain to process a nation's daily volume of retail payments would prove too much for the typical storage capabilities of current smartphones.

"Even under optimistic assumptions, the size of the ledger would swell well beyond the storage capacity of a typical smartphone in a matter of days, beyond that of a typical personal computer in a matter of weeks and beyond that of servers in a matter of months," BIS said.

The report claims that "only supercomputers" possess the processing power needed to conduct every retail transaction on a blockchain, and even if there were sufficient supercomputers to create a decentralized network, millions of users would exchange files on the order of a magnitude of a terabyte. This massive volume of communication volume would impact the internet, according to the report.

16/05/2018: HTC planning to build blockchain phone

HTC is planning to build a new blockchain-powered phone featuring a built-in cryptocurrency wallet.

The touted Android device, known as Exodus, will come packaged with a universal wallet and hardware support for all major cryptocurrencies, including Bitcoin, as well as featuring decentralised applications.

Taiwanese manufacturer HTC is aiming to sync its Exodus devices to a native blockchain network, with each device acting as nodes, enabling cryptocurrency trading among users with ease.

Head HTC's business and corporate development Phil Chen, who founded the company's virtual reality system Vive, outlined these plans in an interview with The Next Web, also providing provisional schematics.

"Through Exodus, we are excited to be supporting underlying protocols such as Bitcoin, Lightning Networks, Ethereum, Dfinity, and more," Chen said. "We would like to support the entire blockchain ecosystem, and in the next few months we'll be announcing many more exciting partnerships together."

HTC's latest innovation follows in the footsteps of electronic manufacturing giant Foxconn, which last month announced it had agreed to build a blockchain-powered device developed by Sirin Labs.

The Finney, which is expected to ship in October, features a 'cold storage' crypto wallet, enabled via a physical switch, that, when flicked, immediately turns off all unencrypted communications - meaning the crypto wallet will be offline unless deliberately activated.

HTC's announcement continues a recent trend of companies taking up blockchain technology in a bid to refresh and enhance their products and services - with a range of sectors, from finance to automotive, indulging in the new technology's appeal.

Automakers such as BMW, Ford, Groupe Renault and General Motors, for instance, earlier this month came together to form a consortium that will explore how blockchain can reinvent mobility and address industry shifts.

But KPMG, meanwhile, believes blockchain still remains in the "hype stage" with results not expected till at least 2019 at the earliest.

Speaking to IT Pro in February, KPMG head of tech growth Patrick Imbach said: "I'm not sure actually whether some sort of tangible use-cases and commercial models based on blockchain technologies will evolve over the next months.

"We're still a little bit early in that process, I wouldn't expect any exciting commercial opportunities to arise in large numbers any time soon - in the UK, particularly."

The use and exchange of cryptocurrencies have been largely unregulated to date - but a handful of regulatory bodies have indicated plans to provide some oversight on trading in future, with the Financial Conduct Authority (FCA) last month announcing its intention to launch a regulatory review of cryptocurrencies.

30/04/2018: Unicef wants to use your CPU to mine cryptocurrency

Unicef wants to borrow your computer's processing power for a good cause - mining cryptocurrency.

Any digital coins the children's charity successfully mines via its Hopepage, which people can visit to 'donate' their CPU, are automatically donated to the charity's Australian arm, Unicef Australia, and spent on life-saving supplies such as clean water, food and vaccines for vulnerable children.

People can choose the level of processing power they want to let Unicef use, and Unicef can borrow it as long as users stay on its mining page.

"We wanted to leverage new emerging technologies to raise awareness about current humanitarian crises and raise funds to support children caught up in them," said Unicef Australia's director of fundraising and communication, Jennifer Tierney.

"We don't have a target in minas it is the first time a product like this is developed for the market. We're hoping to raise thousands, and we're asking people in Australia to make the Unicef Hopepage their homepage."

The donations platform is powered by Coinhive's AuthedMine.com, which offers a mining tool for the digital currency Monero that can be embedded into other websites. By donating CPU, Unicef is able to use processing power in bulk to solve complex equations that reward successful miners with new coins they can spend.

The Hopepage is currently supporting the charity's response to the Rohingya crisis and follows on from Unicef's previous cryptocurrency-driven fundraising platform, Game Chaingers, which started earlier this year.

Game Chaingers used cryptocurrency mining as a method to help raise donations for Syrian children caught up in the country's ongoing conflict, by asking gamers to install Claymore to generate Ethereum.

Salon recently asked readers using ad-blockers to allow it to mine cryptocurrencies with their spare processing power instead.

Picture: Shutterstock

13/04/2018: Indian Bitcoin exchange lost $3.3m in cryptocurrency heist

Indian Bitcoin exchange Coinsecure has confirmed it was hit by a devastating cryptocurrency heist, which saw crooks make off with $3.3 million worth of digital coins.

On Thursday, the company posted an announcement on its homepage telling users that its systems had been breached and that the attackers had stolen around 438 bitcoin ($3.3 million).

It announced the news in the form of a written statement penned by the Coinsecure team, as well as a copy of a complaint issued to New Delhi Police by CEO Mohit Kaira.

"Our system itself has never been compromised or hacked, and the current issue points towards losses caused during an exercise to extract BTG [Bitcoin Gold] to distribute to our customers, " said the firm in a statement.

Dr Saxena, chief security officer at Coinsecure, alerted Kaira that the exchange had been hit by "some attack" which had resulted in funds being "stolen from the company's bitcoin wallet".

"Our CSO, Dr. Amitabh Saxena, was extracting BTG and he claims that funds have been lost in the process during the extraction of the private keys," explained the company.

However, Kaira is not buying this story and has accused Saxena of orchestrating the entire heist. In the police complaint, he claims that Saxena is "making a false story to divert attention and might have a role to play in this entire incident".

The CEO explained that the "user funds are securely kept in our bitcoin wallet". Only Karia and Saxena have access to the private keys for the wallet.

He added: "The incident reported by Dr. Amitabh Saxena does not seem convincing to us." Kaira is also urging the authorities to cancel his passport because he "might fly out of the country soon".

The news comes as the Reserve Bank of India has implemented a new rule banning banks and other financial organisations from accepting cryptocurrencies.

B.P. Kanungo, deputy governor of the bank, said: "We have decided to ring-fence the RBI regulated entities from the risk of dealing with entities associated with virtual currencies.

"They are required to stop having a business relationship with the entities dealing with virtual currencies forthwith and unwind the existing relationship within a period of three months."

Max Heinemeyer, director of threat hunting at cyber security firm Darktrace, said it is becoming increasingly difficult for the police to handle cryptocurrency-related crime.

"There used to be a money trail that law-enforcement could trace back to offenders. Cryptocurrencies allow anonymous monetary transactions, basically eliminating the traceable money trail that was the biggest challenge for a lot of cyber-criminals in the past," he said.

"Criminals are notoriously adaptable and will follow the money wherever it goes, leading to an increase in the popularity of cryptojacking."

06/04/18: Monex confirms Coincheck buyout

Japanese online currency exchange Monex is to acquire Coincheck, a cryptocurrency exchange that became notorious earlier this year for suffering a major security breach.

The deal, which was first rumoured earlier this week, will cost Monex 3.6 billion yen (24 million) but give it full control over the company, with the current CEO and COO stepping down and Monex's CEO Toshihiko Katsuya taking over as head of the business.

Monex has had no dealings in Bitcoin or any kind of cryptocurrency previously, but the acquisition will give it a foot in the door of this increasingly lucrative market.

In a statement reported by CCN, Monex said: "We recognise blockchain technology and cryptocurrencies as next-generation technologies and platforms which are likely to drastically change the way people approach money."

"[T]he cryptocurrency exchange business plays a core part in a vision of 'MONEX's new beginning'. Therefore, the Company has resolved on 100% share acquisition of Coincheck which has been a pioneer among cryptocurrency exchanges," it added.

Coincheck has something of a chequered past, having fallen victim to a massive hack in January this year. The incident saw thieves take 523 million units of the digital currency NEM, which at the time was valued at $547 million (390 million), exceeding the infamous hack that brought down Bitcoin exchange Mt. Gox in 2014 and making it possibly the most expensive hack ever.

The company ended up paying its 260,000 customers a total of $440 million (313 million) in compensation for the loss and was ordered by Japanese financial authorities to tighten up its security.

Addressing this issue in its acquisition statement, Monex said: "We aim to build a secure business environment for customers by fully backing up Coincheck's enhancement process."

05/04/2018: Foxconn plans to manufacture 'blockchain phone'

Electronics manufacturing giant Foxconn has agreed to build a blockchain-centric phone that will help its owners securely store and trade cryptocurrency.

Developed by Sirin Labs, the device - dubbed Finney - will run the Android-based Sirin OS, and act as a device to securely store cryptocurrencies such as Bitcoin and Monero and convert cash from one cryptocurrency to another.

The phone will also feature a 'cold storage' crypto wallet, enabled via a physical switch, that, when flicked, immediately turns off all unencrypted communications - meaning the crypto wallet will be offline unless deliberately activated.

Furthermore, as Sirin OS makes use of the distributed ledger consensus found in blockchain systems, it is claimed to be fully tamper proof.

Accompanying a sleek design, provisional hardware specs include a 5.5in display, 64GB internal storage, 6GB of RAM with a 12MP main camera and 13MP front-facing camera.

The phone is expected to ship in October, with Sirin aiming to sell between 100,000 units to a few million in 2018, potentially adding to more than 25,000 pre-orders. Moreover, the device will initially be sold in eight new stores located in regions with the most active crypto communities, from Vietnam to Turkey, according to Bloomberg.

Foxconn, as one of the world's biggest electronics manufacturers, is known for producing some of the world's best-selling products - from iPhones to Kindles - and recently diversified its portfolio by agreeing a deal to purchase Belkin for $866 million.

But according to auditors KPMG, blockchain still remains in the "hype stage" with results not expected till at least 2019 at the earliest.

Speaking to IT Pro in February, KPMG head of tech growth Patrick Imbach said: "I'm not sure actually whether some sort of tangible use-cases and commercial models based on blockchain technologies will evolve over the next months.

"We're still a little bit early in that process, I wouldn't expect any exciting commercial opportunities to arise in large numbers any time soon - in the UK, particularly."

Finney is Sirin Labs' second smartphone device following the release of Solarin in 2016.

Marketed as an ultra-secure smartphone, Solarin was priced at $14,000, a princely sum compared to Finney's relatively modest pre-order price of $999. Users will also be able to pre-order Finney using SRN, Sirin's own token, at a discounted price.

04/04/2018: Monex considers buying Coincheck

Monex, a commercial foreign exchange service, has expressed an interest in buying Coincheck, the bitcoin business that was the victim of a huge digital money theft earlier this year.

If the deal, which was first reported by Reuters goes ahead, it will give Monex the opportunity to use Coincheck's trading platform and snipe its customers, transitioning them to its products instead, although it's unclear how many customers Coincheck has at present.

Monex, however, currently has 1.74 million customers and is estimated to hold 4.3 trillion yen (28 billion) in customer currency. At present, it doesn't have a cryptocurrency business, but has realised the potential and will look to Coincheck to provide guidance. Coincheck is estimated to be the fifth largest crypto currency exchange in Japan, which would give Monex quite the start to its virtual currency business.

It's thought that up to 380 million worth of digital currency was stolen from Coincheck in a high-profile attack in January, although the company hasn't formally revealed how much was taken. It did, however, pay back investors hit by the cyber attack 46 billion yen (307 million) from its own reserves.

Following the theft, the Japanese authorities came down hard on all the country's digital currency providers, accusing them of being lax over customer data protection and money laundering regulations.

27/03/2018: Twitter has said it will join Facebook and Google in banning adverts for initial coin offerings on its platform over concerns that users could be duped by misleading claims.

"Advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally," said a Twitter spokesperson, speaking to Bloomberg on Monday.

"We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner."

Adverts for token sales had increased in volume across social media sites following the rise in popularity of cryptocurrencies last year, allowing potential investors to trade cash for new speculative cryptocurrencies set up to support the launch of a new service.

While many of these ICOs are legitimate attempts at crowd-funding, users are frequently stung by projects that either fail to live up to promises or outright scam their investors out of their funds.

Facebook was the first to take action against this style of investment, banning all cryptocurrency adverts in January, while Google later said it would also start removing all adverts starting in June.

Twitter's new stance is not an outright ban, as it said it will be restricting adverts to only those cryptocurrency exchanges and wallet services that are offered through public companies already listed on major stock exchanges.

Bitcoin is hovering at just under $8,000 at the time of writing, and has yet to recover from the market slump at the start of the year which saw hundreds of billions wiped off the cryptocurrency market almost overnight.

19/03/2018: Cryptocurrency traders hit with substantial tax bills

Bitcoin owners may soon find themselves faced with a nasty tax bill that's worth more than the value of their coins, amid a market downturn that shows no signs of recovery.

Three months ago users were enjoying a cryptocurrency market surge that saw the price of Bitcoin surge to just shy of $20,000, only for the market to crash at the start of 2018, wiping more than half of the value of the currency.

For those that traded in the US, and therefore were subject to Internal Revenue Service tax laws, it's likely that they have capital gains to report that may be in excess of the value of any coins they now hold.

The issue was highlighted earlier this week when one Reddit user revealed they owed $50,000 to the IRS following trades valued at $120,000 - coins that are now worth $30,000.

"I took most of my savings and bought 8 bitcoins back in early 2017 for about $7200," a Reddit user who goes by the name 'thoway' said in a post. "Around December 2017, I got caught up in the altcoins frenzy and sold most of my bitcoins (about $120k worth) to buy a bunch of different coins."

"I didn't know this back then but it looks like I owe income taxes on those trades, which adds up to about $50k if I add up state (California) and federal. But with the crash that happened recently, I added up my altcoins and I only have like $30k worth. I only have about $5k in other savings."

"I feel like I might have accidentally ruined my life because I didn't know about the taxes..."

At the time of writing, Bitcoin was trading at $8,200, Ethereum at $521, and Litecoin at $153, all significantly down since the start of the year.

In November the IRS informed currency exchange Coinbase that it would need to provide the details of almost 15,000 users who had traded more than $20,000 in digital currencies between 2013 and 2015. The position is that failing to report capital gains could be considered tax evasion.

While IRS rules are fairly straightforward, the same can't be said of other countries struggling to deal with tax issues and consumer protections.

UK traders are currently subject to three-year-old guidelines, implemented when Bitcoin was worth just under 500, which state that those who buy or sell cryptocurrencies are subject to capital gains tax. This would force traders to pay 10% on transactions over 11,700 (the current exemption) if they are basic rate payers, or 20% for higher rate payers.

However, whether any profit is chargeable is judged on a "case by case basis", and that "depending on the facts, a transaction may be so highly speculative that it is not taxable or any losses relievable.. For example gambling or betting wins are not taxable and gambling losses cannot be offset against other taxable profits," the guidance reads.

Importantly, the UK has yet to make any demands similar to the IRS on cryptocurrency exchanges, but given the number of users trading in high value transactions, that could change.

14/03/2018: Google bans cryptocurrency adverts in new clampdown

Google is banning all advertising for cryptocurrencies and initial coin offerings, joining Facebook in a clampdown on speculative financial services.

Starting in June, the world's largest provider of digital ads will block promotions for platforms such as Bitcoin across its entire portfolio of services, including Youtube and any third-party websites that buy adverts from Google.

Adverts for cryptocurrencies, exchanges, digital wallets, trading advice, and initial coin offerings will all be banned under the revised policy, according to a brief Google statement released on Tuesday.

Other instruments, such as binary options trading and spread betting, which often sell themselves as get-rich-quick schemes to internet users, will also be banned.

Google hasn't given its reasoning for the ban, but it's likely to be in response to a rising number of online scammers trying to take advantage of the furore around cryptocurrencies by promising quick returns on investments.

It follows a decision by Facebook in January to ban all adverts for Bitcoin and similar crypto assets, which it made clear at the time was an attempt to protect its users from exaggerated promotions.

Initial coin offerings, which ask investors to fund a new cryptocurrency in order to support a service or product, have become particularly problematic for online advertisers. While there are many legitimate offerings, it's thought that only half of the ICOs in 2017 successfully made it out of their initial funding stages, and many were deliberate attempts to scam their investors.

The ban contributes to a much wider regulatory clampdown on the crypto market, with major markets in the US, China, Japan and South Korea having already made it clear that tougher regulations are on the horizon.

The tightening grip of the market since the New Year has meant the cryptocurrency market has struggled to recover from recent price adjustments, and has largely remained stagnant over the last three months. At the time of writing, one Bitcoin is worth $8,944, $10,000 less than its December high.

05/03/2018: Bitcoin heist sees 600 crypto-mining servers stolen in Iceland

Authorities in Iceland have reportedly arrested 11 people in connection with the theft of 600 cryptocurrency mining servers from data centres across the country.

Police believe that this was one of Iceland's biggest ever burglaries, with Icelandic publications branding it the "Big Bitcoin Heist".

Of the 11 arrested, only two people remained in custody after a hearing at Reykjanes District Court on Friday, Associated Press reported.

Police are still looking for the servers, which are apparently valued at $2 million. The heist happened in the southwestern Reykjanes peninsula, though the authorities did not name the companies that were affected.

Olafur Helgi Kjartansson, police commissioner for the region, described it as a "grand theft on a scale unseen before", adding that it was "a highly organised crime".

Prosecutors believe that the criminals behind the heist masterminded four burglaries in total. Three of them happened in December, while another occurred in January.

Cryptocurrencies, and Bitcoin in particular, are potentially lucrative assets for criminals, with their values rising, if volatile. Bitcoin, for instance, reached $20,000 at the end of 2017, but has since plunged to around $11,000. They also make it more difficult for police to follow criminal transactions due to their anonymous nature.

"The weakest point in any cybercrime operation used to be the monetisation - e.g. selling stolen data or transferring ransom money," Max Heinemeyer, director of threat hunting at cyber security firm Darktrace, told IT Pro. "There used to be a money trail that law enforcement could trace back to the offenders. Cryptocurrencies allow anonymous monetary transactions, basically eliminating the traceable money trail that was the biggest challenge for a lot of cyber criminals in the past."

Governments across the world have voiced concern about digital currencies, with China and South Korea already having implemented strict regulations on crypto-mining.

Last week, Bank of England Governor Mark Carney slammed cryptocurrencies for causing a "global speculative mania".

02/03/2018: Japan's crypto market to self-regulate after $530m heist

Sixteen of Japan's cryptocurrency exchanges have said they will form a self-regulatory body in order to garner trust in the highly volatile industry and undo the damage caused by a $530 million heist in January.

The group is to form an organisation that will enforce standards for cyber security and best practice across the industry, an effort that's almost certainly an attempt to get ahead of government-led regulations that some fear could stifle the cryptocurrency market in the country.

All 16 government registered exchanges have signed up to the organisation which seeks to operate under the country's Payment Services Act, as reported by Reuters, including bitFlyer and GMO Coin.

There's currently no name or launch date for the organisation, although sources have suggested the body will form at some time in the Spring.

It follows a $530 million hack on Tokyo-based crypto exchange Coincheck in January, which sparked alarm that the industry was doing very little to ensure customers are protected. Calls for industry-wide security standards were made when it was discovered Coincheck had stored funds in wallets connected to their networks rather than in isolated, offline wallets that many other exchanges favour.

An additional sixteen exchanges, including Coincheck, have also been permitted to continue operating while their applications to the self-regulatory body are reviewed.

If the body is able to self-regulate successfully, it could be a compromise to heavy-handed government oversight that threaten exchanges in South Korea, one of the most influential markets in the cryptocurrency industry.

02/03/2018: EU warns of crypto regulation if risks are not addressed

The European Union has warned that it will begin regulating cryptocurrencies if the market's volatility, born from spikes in the value of Bitcoin and others, is not addressed by the industry.

Policymakers have long been concerned by the lack of regulatory oversight of alt-currencies, which have grown incredibly popular over the past year, despite the significant risks to investors.

Bitcoin, in particular, has enjoyed cycles of huge success, peaking at $20,000 in late 2017, only to plummet dramatically the next month, wiping off hundreds of billions from the market.

The accelerated pace of the cryptocurrency market, matched against the digital transformation of societies, has posed concerns, particularly as the decentralised nature of the market means there's a lack of accountability or central regulatory body.

The anonymity it affords participants within its transactions has also created concerns that it will provide a major boost to illicit proceeds generated from drug sales and arms laundering.

"This is a global phenomenon and it's important there is an international follow-up at the global level," Valdis Dombrovskis, the EU's financial chief, said, as reported by the Guardian. "We do not exclude the possibility to move ahead by regulating cryptocurrencies at the EU level if we see, for example, risks emerging but no clear international response emerging."

Similarly, in a Reddit 'Ask Me Anything' session, founder and former CEO of Microsoft Bill Gates slammed cryptocurrencies by going so far as to say Bitcoin had "caused deaths" with its use in the drug trade.

The Treasury Committee recently announced it would be launching an inquiry into whether the technology is harmful, while Lloyds announced it was banning their customers from using credit cards to purchase bitcoin.

Elsewhere across Europe, there is a cautious pursuit of bitcoin. Germany and France have recognised its potential for innovation and growth but believe it presents substantial dangers to investors and, without the necessary regulatory frameworks, could be a boon to the financial crime industry.

22/02/2018: UK MPs launch inquiry into risks of cryptocurrencies

The UK's Treasury Committee has said it will investigate digital currencies and the underlying blockchain technology, in an effort to assess the potential benefits and risks facing consumers, businesses and the government.

The scope of the cross-party inquiry will include an assessment of the growing popularity of cryptocurrencies like Bitcoin, which in theory could lead to more stringent regulations for trading in the UK.

It aims to "scrutinise the regulatory response" to digital currencies from the likes of the Bank of England, the Financial Conduct Authority, and government ministers, and assess whether regulations could be rebalanced to provide "adequate protection for consumers and businesses without stifling innovation", according to a statement issued on Thursday.

Particular attention will be given to the risks that digital currencies pose to businesses and consumers, such as the market's volatility and its use as the currency of choice for cyber criminals and money launderers.

The Treasury Committee will also look at the development of distributed ledger technologies such as blockchain and its potential effects on UK financial institutions and infrastructure, which includes the central bank.

"This inquiry comes at the right time, as regulators and Governments wrestle with recent events in cryptocurrency markets," said Treasury Committee member and Labour MP Alison McGovern. "New technology offers the economy potential gains, but as recently demonstrated, it may also bring substantial risks.

"It is time that Whitehall and Westminster understood cryptocurrency better, and thought more clearly about the policy environment for blockchain technology."

The cross-party committee will take evidence from market experts as part of the investigation, before submitting a report to the government outlining its recommendations.

It's likely that the UK government will fall into line with other European countries looking to enact tougher regulations on the use of cryptocurrencies France and Germany have both signalled their desire to have the implications of cryptocurrencies placed on the agenda at the G20 summit in Argentina in March.

However, the UK's inquiry into digital ledger technology is most likely going to strike a more positive tone, as the likes of the Bank of England have already worked closely with blockchain startups on projects involving asset exchanges and the tracking of public money.

16/02/2018: Bitcoin exchange bug overcharged customers thousands

The Bitcoin exchange Coinbase has overcharged users thousands of dollars due to an error in its system, but will offer refunds.

Customers were charged multiple times for transactions, which Coinbase has explained as a result of a bug tied to how credit companies billed for the service. Having fixed the issue, the Bitcoin exchange has vowed to refund those affected.

Coinbase apologised for the error and said it was, "actively working with banks, processors and networks to improve the digital currency purchasing experience".

The popular Bitcoin exchange has attributed the error to changes in the Merchant Category Code, which is used by Visa to identify debit and credit transactions. After banks issued warnings they would no longer permit customers to buy cryptocurrencies using credit cards, the changes kicked into effect.

Users took to Coinbase's Reddit forum to voice their complaints, with one citing to a $67,000 charge and another being hit with $17,000.

"I made ALL of that money in crypto over the past 8 months. This is not good and I feel sick. I knew there is risk to lose money in this space, but not like this!! I may as well have burned it all. I hope Coinbase implodes!" raged Reddit user ipizi.

This will simply fuel worries echoed by banks and governments that cryptocurrency is posing a risk. Banks are largely concerned that consumers are investing in Bitcoin to pay off debts, and instead worsening their situation.

There are also concerns that the anonymous nature of cryptocurrency transactions is powering criminal behaviour such as money laundering and funding both the drugs sale and arms sale.

The Treasury will reportedly regulate Bitcoin and require traders in cryptocurrency to disclose their identities and report suspicious activity.

14/02/18: American news publication Salon has announced it is testing the use of cryptocurrency mining software to boost revenues.

In a bid to counter ad-blockers, which are often the main source of generating revenue for websites, Salon has explained that in a trial test it will give readers an option of accepting ads or allowing spare parts of their computer's processing power to be mined for Monero, a cryptocurrency that is similar to the well-known Bitcoin.

The progressive-leaning website described this to their readers as their intention to "contribute to the advancement of technological discovery, evolution and innovation."

It's believed the website is using CoinHive, a mining tool that was used to hack numerous government websites, including the British. However, Salon notifies users and requires them to agree to use the tool.

The computer's spare processing power is harnessed when users are browsing the Salon website and readers will reportedly hear their machine's cooling fans stir into life, as the computer begins to utilise more power.

This move by Salon represents a new method used by news websites to generate revenue many have used online subscriptions, pay-walls and donations to fund their journalism.

13/02/2018: Bitcoin requires more energy than powering Iceland

Bitcoin is causing serious power supply problems in Iceland according to energy executive Johann Snorri Sigurbergsson, saying the data centres supporting the virtual currency's use are consuming more power than all of the country's homes.

He added the Icelandic population is excited about jumping on Bitcoin mining opportunities, but if everyone who's expressed an interest in mining starts taking part, it's unlikely the energy infrastructure will be able to take it.

Almost all of Iceland's power comes from renewable sources and many of the companies building data centres in the country want to stick to their guns and make use of green energy.

"What we're seeing now is... you can almost call it exponential growth, I think, in the [energy] consumption of data centres," Sigurbergsson told the BBC. "I'm getting a lot of calls, visits from potential investors or companies wanting to build data centres in Iceland."

If all of these data centres were to go ahead, the country would run out of energy to supply both them and homes and businesses.

Just as a comparison, Iceland's population of 340,000 people use around 700 gigawatt hours every year. If Bitcoin mining continues to rise at its current rate, Bitcoin mining operations will use around 840 gigawatt hours of electricity in the very near future. This energy is used for powering the computers in the data centres, as well as cooling systems.

08/02/2018: Bitcoin stable again after crash

Yo-yoing digital currency Bitcoin is stable again today after its price plummeted to a two-month low of sub-$7,000.

The decline came after several banks around the world banned their customers from using credit cards to purchase cryptocurrencies, fearing they'd have to pay for unpaid debts that result from price fluctuations. On Tuesday, it was trading at just $6,430.30, down two-thirds on its all-time high of nearly $20,000 value from mid-December.

However, data on crypto currency go-to, Coinmarketcap.com, showed that Bitcoin surged by 26% in the last 24 hours to past the $8,000 mark following the temporary crash, along with many other popular digital currencies, including Ethereum, which is up 32%, Ripple and Bitcoin Cash, which both rose 22% and Cardano, which is up 25%. Bitcoin is now trading at $8,496.17 (at the time of writing).

Out of the top 10 most valuable cryptocurrencies, all have seen a boost of at least 20%. It's unknown what exactly caused the rise and fall and rise again of the currencies, but Bitcoin and the like are known for being particularly volatile, meaning there's no real way of knowing if it's prospering or about to take a nose dive into the black.

Nevertheless, the news of the currency's growth is encouraging news for investors, many of whom were probably a little sweaty palmed when news of the crash spread yesterday.

06/02/2018: Bitcoin is continuing to plummet in price and has hit the sub-$7,000 mark for the first time since last November.

On digital currency exchange Coinbase, the cryptocurrency is now trading at just $6,430.30 (at time of writing), down two-thirds on its all-time high of nearly $20,000 value from mid-December.

Coindesk spotted the same issue hitting other cryptocurrencies such as Ripple, which is down 14% and Ethereum's Ether, which has also dropped 13% in the last 24 hours.

The decline comes after several banks around the world banned their customers from using credit cards to purchase cryptocurrencies, fearing they'd have to pay for unpaid debts that result from price fluctuations.

However, according to CoinMarketCap, the current total market capitalisation of all digital currencies taken together is up, standing at $397 billion, which is a decent increase of 14% from Friday's figure of $348 billion.

05/02/2018: Lloyds Bank bans credit card customers from buying Bitcoin

Lloyds Banking Group has blocked its customers from buying Bitcoin and other cryptocurrencies with their credit cards.

Starting from today, the ban affects all eight million credit card customers of Lloyds Bank, Bank of Scotland, Halifax and MBNA.

The decision comes after Bitcoin saw a drop of 30% to just over $8,200 on Friday, the lowest it has been for almost five years, while it plunged further to $7,829 this morning from a high of nearly $20,000 over Christmas.

Lloyds is reportedly worried it will have to foot the bill for unpaid debts should the price of Bitcoin continue to drop. However, the ban is said to only affect credit card purchases, and customers will still be able to use their debit cards to buy cryptocurrencies.

Commenting on the decision, a Lloyds spokeswoman told the BBC: "We continually review our products and procedures and this is part of that."

IT Pro has contacted Lloyds for comment.

Lloyds isn't the only bank in the world declining purchases of cryptocurrencies. In the US, JPMorgan Chase, Bank of America, and Citigroup all halted purchases of Bitcoin and other cryptocurrencies on their credit cards on Saturday, as they don't want the credit risk associated with the transactions.

UK games platform Steam dropped support for Bitcoin last December due to the currency's fluctuations, which resulted in unpredictable transaction fees for users.

02/02/2018: A series of clampdowns and advertising bans have rocked the cryptocurrency market, sending prices plummeting and wiping off hundreds of billions of dollars almost overnight.

Bitcoin saw its price sink to $8,200 on Friday morning, officially undoing its December surge which saw prices rocket from $8,300 to just under $20,000 over the course of 30 days, marking the steepest decline in the currency's history.

The slide began after news emerged that Bitfinex, one of the world's largest cryptocurrency exchanges, was being investigated by the US Futures Trading Commission over its ties with a digital asset known as Tether.

Tether was designed to be a one-to-one with the US dollar, allowing for the benefits of cryptocurrency trading with the stability of a fiat currency. However, concerns were raised after critics claimed the reserves were under-capitalised, with more Tether tokens being created than the amount of US dollars being deposited to support the currency.

Current prices from coinmarketcap.com

There are currently two billion Tether tokens in circulation, yet Bitfinex has yet to provide evidence that there is $2 billion in its accounts.

The market was hit again when the Indian government said it would move to ban all cryptocurrency trading in the country, and yet again when Facebook announced it would be placing a ban on all cryptocurrency and ICO advertisements on its platform, citing mistrust of the industry and the potential for users to be misled by shaky investment opportunities.

The series of bullish moves against the cryptocurrency industry has meant the likes of Bitcoin, Ether, Bitcoin Cash and Litecoin have struggled to recover from its most recent slump following the now abandoned proposals by the South Korean government to ban trading in the country.

99 of the top 100 cryptocurrencies by market cap were down as much as 35% at the time of writing, including the surprise hit Ripple which is currently trading at $0.7, almost half that of its all-time high in December.

01/02/2018: Analysts warn price of Bitcoin could crash by 80% if being artificially pumped by Tether

Currency analysts have warned that the price of Bitcoin could crash by up to 80% if it turns out the price has been artificially pumped up by controversial crytpocurrency Tether.

The cryptocurrency experts warned on Wedsnesday that if the cryptocurrency Tether is revealed to have been artificially increasing Bitcoin's value, it would result in a "bloodbath" for investors.

Tether is a so-called "stablecoin" which aims to maintain a value of one US dollar per tether and is owned by trading company Bitfinex, which has recently come under scrutiny by a blogger identifying themselves as "Bitfinex'd".

The blogger has taken to Twitter and YouTube to warn that Tether has been plucked from thin air to boost the value of Bitcoin, leading to it being described by experts as the "ticking time bomb" of the cryptocurrency world, which could trigger an event similar to that of the 2014 collapse of the Mt. Gox exchange.

Nicholas Weaver, a professor from UC Berkeley's International Computer Science Institute, tweeted recently that a "bloodbath" would ensue if Tether fails to hold its value and reassure investors.

"At current prices, net new Bitcoin requires $18 million of net new dollars flowing in to maintain the price," his tweet read. "Yet there is a net $100 million a day of fake dollars in the form of Tethers. If that tether printing press ever breaks, there will be a true bloodbath on the cryptocurrency prices. Good."

Bitcoin expert David Gerard, author of Attack of the 50 Foot Blockchain, added that everyone in crypto "is very worried about the tether situation, and if these really count as dollars".

The warnings come not long after Japanese exchange Coincheck confirmed it had lost up to $530 million (372 million) in a huge hack on Friday.

31/01/18: Samsung has reportedly started mass production of a new range of chips designed to be used in cryptocurrency mining, with a major partnership already lined up with a Chinese hardware provider.

The tech giant is said to have perfected a range of application specific integrated circuit (ASIC) semiconductors, which are to be supplied to an as-yet unnamed Chinese hardware company from January, according to South Korean outlet The Bell.

The semiconductors are said to be bespoke chips designed to optimise the mining of cryptocurrencies which typically requires high-speed, high-efficiency hardware.

Bitcoin mining, in particular, requires vast amounts of computational power, something that has been served in recent years by large companies offering dedicated mining equipment, particularly in China where electricity costs are relatively cheap.

While Samsung has yet to confirm the report, it does coincide with the company's fourth quarter results, which, despite an overall decline for its Foundry business, pointed to increased sales in China thanks to new customer contracts. It also pointed to increased earnings over the next quarter due to a greater demand for cryptocurrency mining chips.

Paul Armstrong, author of 'Disruptive Technologies: Understand, Evaluate, Respond', said that competition from Samsung should stabilise the cryptocurrency mining market, which is currently dominated by the likes of Bitmain and Canaan Creative, both of which currently source their chips from Taiwan's TSMC.

"Samsung is a huge force in the industry and as Asian markets are polarised somewhat this goes a long way to adding some calm to choppy investor seas," said Armstrong, speaking to IT Pro. "One thing this move will do is keep Bitmain on their toes and should cause some more competition, which considering Bitmain's dominance is no bad thing.

"Time will tell what sort of impact this has on the market and Samsung's price and competitive edge but one thing this does show the world [is] Samsung isn't afraid of new technologies, placing a bet and getting their hands dirty; something many companies are increasingly bad at or cautious about doing."

26/01/2018: Prime Minister Theresa May has said the government is 'seriously considering' a clamp down on cryptocurrencies following fears that criminals are exploiting the anonymity of platforms such as Bitcoin.

"In areas like cryptocurrencies, like Bitcoin, we should be looking at these very seriously," said May, in an interview with Bloomberg. She added that because the use of Bitcoin has been "increasingly developing", a tougher stance may be required "precisely because of the way they are used, particularly by criminals".

Cryptocurrencies have long been used as a way to finance criminal activity online, with hackers exploiting the anonymity that platforms such as Bitcoin provide. More recently, criminals have started adopting other cryptocurrencies, particularly Monero which is designed to be even more difficult to trace.

May's comments echo calls from other nation states that more restrictions need to be placed on the use of cryptocurrencies. The market is still reeling from the news that South Korea is considering a complete plan on online cryptocurrency exchanges, a move that some fear would send the market into a nosedive.

Compared to the South Korean market, where some of the world's largest exchanges are headquartered, a clampdown in the UK, or even an outright ban, is unlikely to have a significant impact given that it boasts only one major exchange.

Cryptocurrencies have yet to fully recover from the new South Korean stance, with Bitcoin still operating at $10,000, over $9,000 below its all time high last month.

22/01/2018: Bitcoin will see a huge crash over the next year, Wall Street expert Peter Boockvar predicted yesterday, claiming that this is the only outcome of a "bubble like this".

In an interview with CNBC, the chief investment officer at Bleakley Advisory Group said the crash might be in the form of an epic plunge or a slow and steady drop. Nevertheless, he said it's coming and is thus in danger of dropping 90% from current levels.

"When something goes parabolic like this has, it typically ends up to where that parabola began," he told CNBC's Futures Now show.

"I wouldn't be surprised if over the next year it's down to $1,000 to $3,000." Currently Bitcoin is trading at $11,819, though it peaked at $19,000 briefly in December.

However, Yale economics professor Robert Shiller, who has also previously discribed Bitcoin as "the best example of a bubble", told Coin Telegraph on Friday that while Bitcoin "might totally collapse and be forgotten" it's also possible that it "could linger on for a good long time, it could be here in 100 years".

The predictions come after another analyst claimed Bitcoin could hit between $50,000 and $100,000 in 2018 (see below).

18/01/2018: Despite recent price fluctuations, Bitcoin's value could continue to rise throughout 2018 to reach between $50,000 and $100,000, an analyst has predicted.

This means its value would need to increase by 635% from its current highest value of $13,601.43.

Kay Van-Petersen, an analyst at Saxo Bank, thinks the virtual currency will rise significantly over the next year after correctly predicting its value previously. In December 2016, he said he thought Bitcoin's value would surpass a value of $2,000 in 2017. Sure enough, it reached that figure and beyond by May.

"First off, you could argue we have had a proper correction in Bitcoin, it has had a 50% pull back at one point, which is healthy," Van-Petersen said, reported by CNBC. "But we have still not seen the full effect of the futures contracts."

Previously, Van-Petersen said it wasn't likely the virtual currency would reach $100,000 for 10 years.

The journey to $100,000 won't be without bumps in the road, though, he said. It's likely the currency will continue to level out and then bump up, or re-rate as it's known, in stages.

But although Bitcoin is the market leader now, Van-Petersen thinks virtual currency fanatics should keep an eye on rival Ethereum too, because it's possible the outsider could overtake Bitcoin in future.

"Ethereum came after Bitcoin, it has a more unified leadership than Bitcoin," he said. "They seem to be a bit further along the way in regards to forming the solution to scaling issues. And you can see transactions on their side eclipses transactions across other cryptos."

17/01/2018: Bitcoin plunges below $10,000 following uncertainty in South Korea

Bitcoin plunged to below $10,000 on digital currency exchange Coinbase yesterday evening, along with several other major crytocurrencies, such as Ethereum, which dropped 30% to below $1,000.

While Wall Street said there was no apparent reason for Bitcoin's fall in stock price, breaking below $10,000 to $9969.01, it did follow comments from South Korean authorities regarding tougher regulation on digital currency trading.

Nevertheless, it only fell below the 'psychological benchmark' just briefly before it started to tick higher and above $10,000 again. At the time of writing, it was at $10,457.10

Bitcoin traders, and investors in other digital currencies, are still left with concerns as uncertainty looms around South Korea's government's attitude to cryptocurrencies, with the country being one of the largest crypto markets in the world. There's fears that the country could block such trading altogether after finance minister Kim Dong-yeon said banning crypto trading was "a live option".

The matter is currently being reviewed by the country's government. Such a ban would require a majority vote from the country's National Assembly, which the Evening Standard reports could take months or possibly years.

16/01/18: KFC embraces cryptocurrency hype with Bitcoin Bucket

Fast food favourite KFC has started selling a special Bitcoin edition bucket of its popular chicken - and you guessed it, you can buy it with Bitcoin.

The company's selection of poultry themed treats includes "10 Original Recipe Tenders, Waffle Fries, Med Side, Med Gravy and 2 Dips," and costs whatever the equivalent of CA$20 is at the time of purchase. At the time of writing, this was 0.0010102 Bitcoin.

However, the bucket can only be sold in Canadian KFC delivery zones, presumably because it's only been given the green light with a limited number of authorities. KFC explained its Bitcoin bucket is proving hugely popular. So popular, in fact, it keeps selling out of the selection buckets.

"A lot of you want to buy in Bitcoin, which means we keep selling out," the company said on its regional page. "Keep on checking in for restocks of this Bucket. Craving chicken now? Our Original Recipe is available for purchase and delivery with old-fashioned people money."

Even if you're not in Canada, or have no interest in buying KFC with Bitcoin, it's a handy tool to keep tabs on the value of Bitcoin at any time. The dynamically-updated page changes every few seconds so fanatics can make sure they get the best deal for their chicken.

"Despite the ups and downs of Bitcoin, the Colonel's Original Recipe is as good as always," the company said. "So, trade your Bitcoins for buckets and invest in something finger lickin' good."

11/01/2018: Confusion over South Korean crypto ban sends Bitcoin tumbling

Confusion over reports South Korea was ready to announce a complete ban on cryptocurrency trades that later turned out to be incorrect has caused the price of Bitcoin to plummet, sending shockwaves through the market.

Reports surfaced earlier today that the South Korean justice ministry was preparing a bill to ban the trading of all digital currencies on exchanges operating in the country.

Justice minister Park Sang-ki said that there were "great concerns regarding virtual currencies and the justice ministry is basically preparing a bill to ban cryptocurrency trading through exchanges," according to Reuters.

The news wasn't entirely unexpected, given comments made by South Korean prime minister Lee Nak-yeon that suggested the craze might "corrupt the nation's youth".

As a result, the price of Bitcoin fell through the floor, tumbling from an already relatively low position of just under $15,000 to $13,100 in a matter of hours. At the time of writing the currency has yet to recover, hovering at $13,200. Ether, Litecoin, Ripple and Dash were also down following the news.

However, South Korea's financial watchdog, the FSC, has said government ministries are only discussing the possibility of further restrictions, within the context of trade regulations, and that several ministers are divided on how best to regulate the market.

"...the FSC is mapping out measures to restrict [cryptocurrency] transactions to some extent," which may eventually lead to "an all-out ban," said FSC chairman Choi Jong-ku, speaking to a Yonhap reporter. "The restriction is aimed at minimising side effects of bitcoin transactions and reducing speculative investment."

This means that while a potential ban on cryptocurrency exchanges is being discussed, there are no immediate plans to ban trades in the country, although the current ban on ICOs will remain in effect.

The confusion proved to further highlight Bitcoin's volatility, and its delicate ties to the South Korean market, which is heavily invested in cryptocurrencies. South Korean currently sees the 5th highest volume of global Bitcoin trades, comparable to the whole of Europe.

11/01/2018: Warren Buffett doesn't think Bitcoin or other cryptocurrencies will last, he has told CNBC, suggesting trading virtual currencies is not a good idea and will not end well for those involved.

"In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending," the investor and chairman of Berkshire Hathaway said on CNBC's Squawk Box programme.

Buffett's vice chairman, Charlie Munger, supported his boss's position, adding that it's not only cryptocurrencies causing problems - venture capital is also a trend that won't last. He said there's too much money in VC, comparing it to the dotcom bubble.

"Bitcoin and the other cryptocurrencies are also bubbles," he said. Investors "are excited because things are going up at the moment and it sounds vaguely modern. ... But I'm not excited," he added.

Buffet also said he would avoid "going short" on any investment in Bitcoin. This process involves selling shares of borrowed stock, which the investor then hopes the value of which will increase over time, then returning them to the investor to make a profit.

"When it happens or how or anything else, I don't know," he added. "If I could buy a five-year put on every one of the cryptocurrencies, I'd be glad to do it but I would never short a dime's worth."

"We don't own any, we're not short any, we'll never have a position in them," he said. "I get into enough trouble with things I think I know something about. Why in the world should I take a long or short position in something I don't know anything about."

08/01/2018: Visa moves to block Bitcoin payment cards

Visa has blocked access to a range of prepaid Bitcoin credit cards, stopping users from being able to use them to make transactions or withdraw funds in Sterling or Euros.

Cards issued by BitPay, Cryptopay and Bitwala, which are operated by WaveCrest, have all stopped working as of 5th January. The card issuers are now returning all funds to users.

Visa explained that it had made the decision to revoke WaveCrest's Visa membership because it failed to comply with the payment providers operating rules.

"The termination of WaveCrest's Visa membership does not affect other Visa issuers' card programmes, including those using fiat funds converted from cryptocurrency," Visa said in a statement. "Visa is committed to the security of its ecosystem and compliance with Visa's operating rules is critical for ensuring the safety and integrity of the Visa payment system."

Visa said that the cards had been suspended due to "continued non-compliance with our operating rules", adding that all card programmes must comply with its membership regulations, as well as all applicable laws in their company of operation.

"Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are taken out of operation starting today. Our team is holding an emergency meeting to resolve the issue with the card holders best interest in mind and will make an update shortly," Bitwala said on Twitter.

London-based Cryptopay said: "Unfortunately, our card issuer instructed us to cease all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on cards are safe and will be returned to your Cryptopay accounts ASAP."

BitPay said it was in talks with alternative providers about getting its card back up and running in Europe, although it didn't say who it was talking to or any further details about the situation.

03/01/2018: Peter Thiel helps Bitcoin return to growth with 10% spike

Bitcoin soared in value on Tuesday following the announcement that Peter Thiel's Founders Fund now own "hundreds of millions of dollars" worth of the cryptocurrency.

The price of Bitcoin spiked by over 10% to hit around $14,500 per coin after the fund bought $15 to 20 million of the digital currency, according to a report by The Wall Street Journal, with the fund telling investors that the bet is now worth over five times its principal investment.

Bitcoin wasn't the ony cryptocurrency seeing big gains in popularity this last week. A Bitcoin rival called Ripple bacome the second most valuable virtual cash system over the weekend when market monitors claimed the digital currency hit more than $100 billion (74 billion).

The surge in valuation means that each Ripple coin, also known as XRP, is now worth about $2.34, much higher than the half a US cent they were worth a year ago.

A cryptocurrency exchange platform has partnered with Visa to launch a debit card allowing UK users to pay for goods and services using digital currencies like Bitcoin and Ethereum.

The Visa-powered debit card, known as Coinbase Card, will allow users to select a cryptocurrency wallet to associate with the tool through a designated iOS or Android app. People can then make payments via contactless or using chip and pin, as well as make cash withdrawals from ATMs.

The Coinbase Card will essentially behave in the same way as conventional debit cards supplied by banks, with users' cryptocurrency converted to established currencies instantly upon transactions being made.

The designated app, meanwhile, allows users to link a cryptocurrency wallet with the debit card, and also offers instant receipts as well as transaction summaries and spending categories, among other features.

All cryptocurrencies supportedon the Coinbase platform, including Bitcoin, Ethereum and Litecoin, will also be supported on the debit card.

Although hype around digital currencies, predominately led by Bitcoin's emergence into the mainstream, has ebbed and flowed in recent years, blockchain-powered cryptocurrencies have never been widely adopted as an actual form of payment.

Instead, cryptocurrencies are often used by investors as speculative assets given their tendency to violently fluctuate in the market.

Within the space of 12 months in 2017, for example, Bitcoin's price swung from a low of $700 to a peak of near-$15,000, before crashing again in the start of 2018.

Only last week the price of Bitcoin surged 20% due to a mysterious mass investor who purchased roughly 20,000 BTC for unknown reasons across several exchange platforms. This had a knock-on effect for Ethereum and Ripple, which also saw smaller increases in their valuation.

This volatility has been the major obstacle blocking cryptocurrencies from being used as a form of payment for goods and services, not just for consumers but business users.

Moreover, while the technology to make cryptocurrency payments has existed before now, this has conventionally relied on businesses accepting cryptocurrency as payment, which the vast majority have shied away from.

But the launch of Coinbase's cryptocurrency debit card, the first such card of its kind in the UK and EU, eliminates this barrier to some degree. Although users will be paying using their own cryptocurrency funds, these will be instantly converted, with transactions completed in conventional currencies like the pound and euro.

The Coinbase Card is only available in the UK for now, but the exchange platform plans to expand its support to other European counties within the coming months.

Although the cryptocurrency market has undergone wild swings in recent years, Bitcoin is still the most well-known and valuable digital token in the world. It’s just one of the thousands of actively traded cryptocurrencies that users can obtain, but is regarded widely as the one that’s shone the spotlight onto the phenomenon, as well as blockchain technology more widely. While the rising and falling value of Bitcoin often leads to the phenomenon being described as a hype - or craze - this market activity serves to keep digital tokens in the headlines.

Fundamentally, cryptocurrencies like Bitcoin were envisaged as being an alternative to traditional finance and banking. Because they operate on a decentralised model, cryptocurrencies aren’t managed by a large financial institution like a bank and tend not to fall under regulatory oversight. This differs greatly from traditional currencies, like Pound Sterling or the US Dollar. As such, however, detractors often see cryptocurrencies as operating in an unregulated Wild West environment.

The ideas behind cryptocurrencies originated in the aftermath of the 2008 global financial crisis and took advantage of distributed ledger technology to offer those disillusioned with the financial system an alternative. Trust in massive institutions was at its lowest, and so the idea of a form of currency free of central control appealed to many. There was also an appetite among those with money to invest in a new form of digital currency, whether this was with the hope that new markets and systems would develop over the years or just to make a point.

Bitcoin, however, remained fairly obscure until very recently, and only managed to emerge into the mainstream after a great surge in 2017, where it reached just under $20,000, before falling once again. It was still relatively niche at this stage, and only truly captured the public’s attention when it exploded in value towards the end of last year, reaching a high of just over $60,000.

These wild swings, however, also illustrated its greatest flaw for those who had hoped to use it as an alternative to conventional money. Because its value varies so wildly, it’s too unreliable to be used to buy and sell material goods and services. Instead, its primary function at the moment is its use as an investment vehicle.

Who invented Bitcoin?

It's widely believed that the idea for Bitcoin was first proposed in 2008 by software developer Satoshi Nakamoto (most likely a pseudonym), who wanted to create a payment system based on mathematics. Nakamoto envisioned a currency that was designed specifically for online transactions, allowing for almost instantaneous transfers at a fraction of the cost.

How are bitcoins acquired?

Users are able to acquire Bitcoins in one of four ways:

• As payment for sold goods or services
• As a transfer from one person to another
• Bought through a Bitcoin exchange
• Competitive 'mining'

Unlike paper money, which is printed and distributed by government services, Bitcoin is 'mined' using software that solves complex mathematical problems. Every time a problem is solved, the network adds a new 'block' to a chain that is set at 1MB in size. With each solution, the miner is rewarded a number of Bitcoins that remains constant. The number of Bitcoins generated per block started at 50, and has halved every 210,000 blocks, or every four years.

Today the reward is set at 6.25 Bitcoins. This represents a problem for Bitcoin miners, as hardware costs and substantial electricity bills are increasingly making mining unprofitable as the equations get increasingly complex.

Another problem facing Bitcoin is that as more people decide to join the mining community, the more difficult the mathematical problems need to be. An indeterminate number of new miners makes it impossible to accurately predict how long it will take to mine Bitcoin each month.

Although 'mining' is the only way to actually create Bitcoins, today users will most likely purchase Bitcoins at a Bitcoin exchange. A number of marketplaces have popped up since the currency became popular, allowing people to buy and sell Bitcoins using other conventional currencies.

How is Bitcoin used?

Bitcoins are stored in a digital wallet that is saved to a user's PC or in the cloud. The wallet acts as a virtual bank account, allowing users to pay for goods and services by sending Bitcoins to another wallet.

The details of every Bitcoin transaction ever made are stored using blockchain, a system designed specifically for the use of Bitcoin that has since become widely popular for other services. The advantage of blockchain is that it provides a means to store information in a series of connected 'blocks' that update in real-time. It's maintained by a peer-to-peer network, free of centralised management, and is almost impossible to edit. For more information head to our blockchain explainer.

Bitcoin is also incredibly easy to use, and there is no need to go through bank applications to set up an account. You are able to send and receive Bitcoins from anywhere in the world at any time, processed in minutes by the Bitcoin network. Transactions are also entirely anonymous, as you are not required to tie personal details to a Bitcoin account.

Where is Bitcoin accepted?

The list of services accepting the cryptocurrency is slowly expanding, particularly given its strong performance over the past year. There are a number of particularly high profile companies already making use of Bitcoin, including the Microsoft Windows and Xbox stores, Subway, Reddit, Expedia.com, gaming service Steam, and technology companies such as Dell and Tesla. Recently, companies such as VISA and PayPal have started allowing customers to trade using cryptocurrencies including Bitcoin.

Are there problems with using Bitcoin?

Despite using the highly robust blockchain system, security remains an issue. There have been a number of high profile hacks of Bitcoin services over the past few years, most notably the breach of one of the largest Bitcoin exchange services, Mt Gox, which lost almost 750,000 Bitcoins worth $350 million. As the transfer of Bitcoins is irreversible, breaches of this kind make it impossible to recover funds.

The main issue with Bitcoin is its volatility. As it is almost impossible to predict the value of the currency in the long term, or to judge how difficult it will be to mine, there are still too many uncertainties for some. There is also concern that the network will become oversaturated and unusable, as more people flood the mining community and make Bitcoin mining too difficult.

What are Bitcoin forks?

Bitcoin's rise has been far from smooth. As the cryptocurrency is decentralised, its development is decided by reaching a consensus within its community. Over the past year two major 'forks' in Bitcoin, where community groups had different ideas about how to make improvements to Bitcoin's underlying blockchain, leading to the creation of new cryptocurrencies based on Bitcoin.

In August, a split over ways to improve Bitcoin transaction speeds resulted in the creation of Bitcoin Cash, a now separate cryptocurrency. Similarly, in October we saw the creation of Bitcoin Gold, conceived by a splinter group of developers that wanted to make it cheaper to mine the currency.

You would think these turbulent splits would've proved disastrous for Bitcoin, yet all signs suggest they did little to impede its momentum. Prices barely moved after the creation of Bitcoin Cash, and Bitcoin Gold has had even less impact so far. What's more, as each split allows Bitcoin to improve its blockchain, and as long as it's able to weather the fallout, these turbulent episodes are actually proving worthwhile.

The US has identified and charged two Iranian men who it believes to be behind the SamSam ransomware attack that has run riot since 2015. The only issue is, US authorities don't have the jurisdiction to reprimand them at this time.

Believed currently to be in Tehran, the two men are out of US jurisdiction but the country's law enforcement is seeking alternative methods for their capture.

"Although the alleged criminal actors are in Iran and currently out of the reach of US law enforcement," the FBI said, the BBC reported, "they can be apprehended if they travel, and the United States is exploring other avenues of recourse."

"The allegations in the indictment unsealed today - the first of its kind - outline an Iran-based international computer hacking and extortion scheme that engaged in a 21st-Century digital blackmail," said US assistant attorney general Brian Benczkowski.

The ransomware attack is one of the most prevalent of its type in recent years, making headlines by holding up high-profile targets to their demands. American cities such as Atlanta, Indiana and New Mexico have been hit hard in particular, a hospital in Indiana was reduced to working by pen and paper earlier this year after their systems were hit by the attack. In 2016, a hospital in Hollywood was also forced to turn patients away and ultimately complied with the ransom demands and paid $17,000 in bitcoin.

It was misery in March 2018 for Atlanta which suffered a crippling attack on government systems. Five out of the 13 major government departments were reduced to pen and paper, including law enforcement who also lost a number of police records in the process. City council officials were resigned to sharing one clunky personal laptop between three, Reuters reports. How did they get access to so many systems? One researcher took to Twitter to highlight a glaring error.

When greeted with the splash page after the system has been infected, users are met with a lot of 'sorry' messages, presumably peppered to illicit a feeling of honesty, that the authors of the ransomware will actually pay up, which isn't generally advised.

The cost of the ransom increased exponentially as the years went by. At the start, the victim had two options, to pay 0.8 bitcoin for each infected PC or pay 4.5 bitcoin to get the decryption keys to all infected system's files. It later rose to 1.7 bitcoin for each system or 12 bitcoin for all, 40,000 in today's money. It's difficult to believe how long the SamSam project ran on, continually finding vulnerabilities that weren't properly patched.

It's reported to have made the authors hundreds of thousands of dollars; the US Treasury has also identified and is seeking capture of two Iranian men who helped convert the bitcoin into Iranian currency, the rial, after monitoring bitcoin wallet addresses associated with the outfit.

John McAfee has "gone underground" in an apparent bid to flee the US Securities and Exchanges Commission, claiming that the agency has too much power and implying that it even carries out covert assassinations.

"The SEC was never intended to have this power," said McAfee in a YouTube video, speaking from 'an armoured motorcade in an undisclosed location'.

"Please God, America, wake up and see what has happened. The SEC is in charge of our entire industry; our companies, our manufacturing, our distribution, our creativity, our entrepreneurship."

"The SEC owns America," he said, "and if you think that an agency of the US government would not stoop to assassination, kidnapping, threats, then what are you smoking?"

"The SEC is one of the most powerful agencies in the world," he said in a separate YouTube video. "It is out of hand, and it does not anymore represent American values or the American people."

In reports published by Rob Loggia (with whom McAfee works on various cryptocurrency projects), McAfee claimed the SEC sent agents to watch him at his secluded home in Tennessee, citing unusual traffic patterns and repeated visits from a small low-flying plane.

In order to fox his pursuers, McAfee has gone "on the run", and claims to have enacted an elaborate scheme in which he and his team hire body doubles, repeatedly change locations and swap electronics on a daily basis.

McAfee claims that the SEC - the agency which governs the US stock market and other financial markets - is out to get him over his support and promotion of cryptocurrencies, which he says have the power to make the SEC obsolete.

McAfee, the controversial founder of the cyber security company that bears his name, is perhaps best known for his colourful past. This is not his first time on the run; he was previously sought for questioning as a person of interest over the murder of one of his neighbours in Belize, and the prime minister of the country called him "paranoid [and] bonkers". He has also been accused of various crimes relating to firearms and intoxicants.

McAfee has become a prominent figure in the cryptocurrency world in recent years, setting up a consultancy firm, McAfee Crypto Team, to advise cryptocurrency firms on their ICOs. He also uses Twitter to promote various altcoins.

These lesser-known cryptocurrencies are supposedly coins that McAfee himself believes in and has invested in, although his promotion of some cryptocurrencies has led to accusations of the entrepreneur running pump-and-dump schemes - a form of financial fraud that is currently legal in the world of cryptocurrencies - something McAfee denies.

IT Pro has approached McAfee and the SEC for comment.

Hackers are quickly finding ways to launch cryptomining campaigns without the need for an active web browser, according to new research from Checkpoint.

The security firm's latest Global Threat Index has revealed a surge of cryptocurrency malware attacks, specifically an endpoint variant called XMRig.

First discovered in May 2017, XMRig has quickly become one of the most popular types of cryptomining malware among cyber criminals.

Between the date of discovery in May 2017 and March 2018, the malware had a 70 per cent increase in global impact. XMRig is so effective because it operates through end-points devices such as PCs and smartphones, rather than the web browser.

With it, crooks can mine the Monero cryptocurrency on apps that are running in the background instead of a web browser. These attacks normally go unnoticed.

As well as the rise of XMRig, the threat index reveals that Coinhive is still the most popular cryptocurrency mining script to get integrated into 'cryptojacking' malware, with it impacting 18 per cent of organisations.

The Rig EK 'exploit kit' came in a close second, scoring 17 per cent. The kit lets hackers exploit Flash, Java, Silverlight and Internet Explorer to launch cryptomining campaigns.

Meanwhile, Cryptoloot is listed as the third most wanted cryptocurrency malware. It harvests the victim's GPU or GPU power to mine cryptocurrencies.

Checkpoint has also ranked the most common mobile malware, with Android banking trojan Lokibot at the top of the list. With it crooks can steal important business information and lock people's phones

Triada, which is a described as a "modular backdoor for Android", is second on the list. The malware backdoor gives hackers superuser privileges over an infected device allowing them to download further malware. Hiddad, which repackages popular apps and sends them to third-party stores, is in last place.

The security research firm analysed the most exploited cyber vulnerabilities as well, with an Oracle remote code execution vulnerability (CVE-2017-10271 sporting a global impact of 26 per cent, the SQL injection vulnerability at 19 per cent, and a Microsoft Windows flaw (CVE-2015-1635) at 12 per cent.

Maya Horowitz, threat intelligence group Manager of Check Point, said cryptomining campaigns have been a "success story" for cyber criminals.

"XMRig's rise indicates that they are actively invested in modifying and improving their methods in order to stay ahead of the curve," Horowitz explained.

"Besides slowing down PCs and servers, cryptomining malware can spread laterally once inside the network, posing a major security threat to its victims.

" It is therefore critical that enterprises employ a multi-layered cybersecurity strategy that protects against both established malware families and brand new threats."

As interest builds around Bitcoin and other cryptocurrencies, malware and hack attacks designed to illegitimately generate digital money are likely to become more prevalent in the cyber security world, something IT managers and security officers should take note of.

While the cryptocurrency market begins to convalesce after what must seem like a weeks worth of invasive surgery, a tired question has once again been knocked around the mainstream press and skeptical 'alt-currency' commentators: has the bubble popped?

Are we witnessing the end of the Bitcoin party, and will the craze that's helped its meteoric rise begin to die off? The short answer is no, not by a long shot.

It has of course been a turbulent time for cryptomaniacs. Between January and February this year, the market saw the largest price correction it's ever experienced, with Bitcoin, the largest of the alt-currencies, losing 64% of its value, wiping off almost $180 billion from its market cap. Ether, Dash, Bitcoin Cash, Litecoin, Dogecoin, even Theresa May Coin (yes, that's a real thing), all experienced similar fates.

It's important to remember that while the price correction was one of the steepest in the currency's history, it was just that, a correction. It's part of the necessary flow of things when it comes to sudden surges in value and, in fact, when it comes to Bitcoin's rise, there's been some form of a dip in value every month since its inception. The market's labelled volatile for a reason.

Cryptocurrency advocates remain bullish about the future, and with good reason. The cynical side of me believes there's simply too much to lose at this stage if the cryptocurrency market was to disappear entirely. Samsung's recent confirmation it would be producing mining-grade chips for companies in China gives an idea how much investment has been dumped into exploiting the crypto craze and graphics processing companies like Nvidia are seeing hardware fly off the shelves.

Yet even at a base level, cryptocurrencies still hold some pretty exciting possibilities as an alternative payment method and have many of the same advantages evangelised by those businesses adopting blockchain. It's an incredibly fast and easy-to-use payment system that's universally available to anyone able to get online. There's clearly an appetite for this, as the idea of fast payments, convenience and greater visibility has even been emulated by the likes of Monzo and similar alternate card companies.

It's the market as a whole that's done a poor job of selling itself as something long-lasting and both in the media and in the eyes of the public, it's still seen as simply a collection of get-rich-quick schemes. That's not entirely surprising, as the only reason the man on the bus is chatting about Bitcoin today is because he thinks he will make money from it.

Looked from that perspective, it's no wonder so many view it as a brief fling that will go the way of the Tamagotchi.

Image: Shutterstock - Graph: Reddit

Thousands of government websites have been hit by a cryptocurrency-mining hack, forcing them to run scripts that make visitors use their computer power to mine cryptocurrencies like Bitcoin, Litecoin, Ethereum and others.

These aren't insignificant sites either. In the UK, the Information Commissioner's Office and the Student Loan Company have both been affected, with the General Medical Council and NHS Inform also found running the script. In the US, the Indiana Government and the US courts system were also discovered to be running the crypto jacking script.

The mining script comes from Coinhive, a company that claims its product can help you "monetise your site visitors" by sucking their CPU power and using it to mine cryptocurrencies. It's the same type of script found to be running in YouTube adverts earlier this year, as well as the likes of video streaming sites and torrent website The Pirate Bay.

Coinhive's script was able to run across all of these sites thanks to a piece of software called BrowseAloud. Embedded in all of the affected sites, TextHelp's BrowseAloud software offers accessibility services to those with visual or literacy impairments who are browsing the web. Sometime on Sunday, a third-party made modifications to BrowseAloud by adding the Coinhive mining software.

Since news of the breach came to light TextHelp has withdrawn BrowseAloud while it resolves the problem.

The crypto-jacking script isn't particularly malicious. While it may utilise your computer's CPU power - and therefore slow your computer down - it won't capture sensitive information you may have entered on any of the government sites you've visited.

A spokesperson for the National Cyber Security Centre (NCSC) said: "NCSC technical experts are examining data involving incidents of malware being used to illegally mine cryptocurrency.

"The affected service has been taken offline, largely mitigating the issue. Government websites continue to operate securely. At this stage there is nothing to suggest that members of the public are at risk."

If you're worried about becoming a victim of crypto jacking, you can install a content blocker that'll scramble the script and flag the plugin. No Coin for Firefox, Chrome and Opera are your best bet. Interestingly, Opera comes with crypto jacking protections embedded into both its mobile and desktop iterations.

Bitcoin had a truly monumental year in 2017, and despite gains in other alt-currencies, it remains the most well funded and widely known cryptocurrency in existence. However, despite its mainstream media attention and unprecedented surge in value, there's still confusion as to exactly how Bitcoin gets its value.

Bitcoin continues to enjoy impressive growth, managing to hit just over $19,000 in December, which, while being great news for investors, left outsiders scratching their heads as to why it's worth anything.

It's important to remember that Bitcoin represents an entirely new generation of currency that's quite unlike anything that's come before. Unlike traditional currencies, which are tied to national economies, Bitcoin has no tangible value - it's worth precisely what the last person was willing to pay for it.

As a result, figuring out its worth is incredibly difficult, which is why Bitcoin is known as one of the most volatile assets you can trade in and has drawn countless warnings from the finance industry about the likelihood of losing your money.

For short-term traders, that's arguably true. If you bought one Bitcoin on 16 December it would have been worth $19,324. Just under a month later that Bitcoin is now worth $15,000. However, those lucky enough to have invested early would have seen their Bitcoins appreciate in value by 1000% over the past year.

A brief history

To understand its worth, it's important to look at where it came from. Although officially founded in 2008, Bitcoin didn't gain economic value until October 2009, when New Liberty Standard published the first exchange rate. Under this rate, you could swap 1,309 Bitcoins for $1, calculated by dividing the dollar by the average amount of electricity required to mine for the digital currency.

In May 2010, the world's first Bitcoin purchase took place, in which a US programmer offered to pay 10,000 Bitcoins for a pizza on a trading forum, roughly valued at $25 at the time. Today, a transaction that large would be worth a little over $150 million.

Over the next few years, Bitcoin would see steady, albeit slow, growth, eventually reaching a market cap of $1 million by 2010, valued at $0.50 BTC.

The biggest breakthrough for Bitcoin in the UK came in 2014, when HMRC classified the currency as assets or private money. This meant that the mining or trading of bitcoins was not subject to VAT and marked the world's first ruling on the taxation of the currency.

How is price calculated?

Establishing value is a fairly difficult task when you are dealing with a cryptocurrency. Traditional currencies derive their value from being the only accepted legal tender currently circulating within an economy to engage in commerce in the UK, you need to deal in pounds sterling. Likewise, commodities are often based on their industrial value, or, in the case of gold, their properties and desirability.

Bitcoin has none of that and is popular precisely because of the lack of central regulation and its apparent immunity to government interference. In effect, Bitcoin goes back to the roots of all money and commodities, worth only how much someone is willing to pay for it. The exchange of Bitcoins is essentially a bartering process between a seller and a buyer trying to find a common ground. The current dollar price of one Bitcoin is calculated by the average of these transactions across the various exchanges.

Why is Bitcoin worth anything?

Bitcoin fundamentally relies on a theory known as the 'network effect'. Much like social media networks today, its value is derived from the number of people using the platform. The more people mining and trading Bitcoins, the easier it is to secure and transfer. This also results in a higher market cap, or the total value of all bitcoins in circulation.

The popularity of Bitcoin means today the market cap is sat at just over $254 billion, or 187 billion - which gives it a higher market cap than the British Pound.

Today's Bitcoin market attracts a range of different types of investor. Many are undoubtedly newcomers looking to make a quick return on sudden value hikes, while others see the longer term value of using the digital currency as an alternative to local currencies.

How can I spend Bitcoin?

Although Bitcoin has yet to replace day-to-day currency, it's slowly being adopted as an accepted form of payment for a wide range of goods and services. Although it's still considered a niche payment method, it's now possible to use Bitcoins to pay for almost anything grocery shopping, housing, subscription TV, restaurant bills, and even education through online seminars.

Microsoft, Dell Technologies, and retail giants Newegg and Overstock were some of the first companies to adopt the currency as a valid payment option, although this is typically restricted to US customers. A handful of airline companies such as AirBaltic and Air Lituanica are also accepting Bitcoins, as well as some UK-based sites like Honest Brew and Theatre Tickets Direct.

However we're still some way off from Bitcoin becoming as synonymous with online payments as, say, Paypal, and by far the easiest way to spend the currency is by buying gift cards. UK-based Gift Off, for example, allows customers to buy vouchers for Marks & Spencer, Starbucks, Nike, and other leading high street names, as well as online stores such as Amazon.

What does this mean for business?

Although 31 billion sounds a lot, in the grand scheme of things this is very little. The total value of gold reserves is estimated to exceed $7 trillion alone. Yet this isn't the most problematic limitation of the currency, as in order to function as a day-to-day business tool, it would require a technical overhaul.

Bitcoin is only capable of processing seven transactions per second, as the protocol behind the currency limits block sizes to 1MB compare that to traditional services such as Visa, which can handle thousands. As the network grows, limitations such as these will begin become more accentuated.

There is also the issue of finite supply. Bitcoins are created each time a user solves a mathematical problem, which in turn creates a 'block'. The discovery of blocks is adjusted over time, and the number of bitcoins created is halved every 210,000 blocks, or every four years. This means that the total number of bitcoins in circulation is expected to cap at 21 million, which at today's valuation is a market cap of $52 billion (41 billion). In other words, for Bitcoin to have the equal overall value of gold, it would need to increase from the 1,801 it's worth today, to just over 270,000.

To really see Bitcoin flourish as a platform for digital currency, it will need to see massive growth, eclipsing even its most recent gains. The likelihood of that happening depends entirely on the network bubble, which is likely going to pop sooner rather than later.

Should it be seen as a commodity?

There exists an on-going debate as to whether Bitcoin is a currency or a commodity. In 2015 the US Commodity Futures Trading Commission (CFTC) officially designated Bitcoin as a commodity, yet Bitcoin doesn't neatly fit into either category and instead may be a mix of both. The way Bitcoin is traded today is akin the way gold and silver originally circulated both as a valuable physical good and as direct payment.

Yet the difficulty in categorising Bitcoin lies in the source of its value. The trade of Bitcoin is inexorably tied to the network effect and is only worth as much as it is today because people currently want to use it. It lacks the intrinsic value of gold, silver, or oil and lacks the characteristics that underpin them as reliable trading items, such as industrial value or universal appeal.

We have never seen anything quite like Bitcoin, and it's still far too early to tell how popular or impactful Bitcoin will be on the world's economy. Recent growth spurts are a welcome sign, but it still has a long way to go.

The US Securities and Exchange Commission (SEC) has warned investors to be wary if they're putting money into cryptocurrencies and initial coin offerings (ICOs), pointing out the risks and advising them to do so with "extreme caution".

Saying there's greater opportunity for fraud and manipulation because ICOs aren't registered with the SEC, chairman Jay Clayton told investors to "ask questions and demand clear answers".

ICOs see people launch new cryptocurrencies in the hope people will buy up the cryptocurrency tokens to raise capital for the businesses, typically on the promise that the token will appreciate in value once the business is launched and expands.

But in a public statement, Clayton said none of these ICOs have registered with the SEC as securities (something like a stock, that represents the value of someone's investment), and told potential investors: "If an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost."

This was particularly true with ICOs often transferring money overseas, he said, making it harder for SEC to pursue bad actors.

His warning comes in a week that saw Bitcoin's market value soar past $16,000 and debut on a futures market, showing its success as a commodity, but making it difficult to use as a currency, with gaming platform Steam dropping support for it due to its fluctuating value.

"Just as the SEC has a sharp focus on how US dollar, euro and Japanese yen transactions affect our securities markets, we have the same interests and responsibilities with respect to cryptocurrencies," said Clayton.

"This extends, for example, to securities firms and other market participants that allow payments to be made in cryptocurrencies, set up structures to invest in or hold cryptocurrencies, or extend credit to customers to purchase or hold cryptocurrencies."

Clayton also had advice for those creating ICOs, or for accountants and lawyers helping to do so, arguing that ICOs are securities, whatever they might say about using distributed ledgers to record transactions differently to the way a typical investment is recorded.

"Replacing a traditional corporate interest recorded in a central ledger with an enterprise interest recorded through a blockchain entry on a distributed ledger may change the form of the transaction, but it does not change the substance," he said.

Picture: Bigstock

The blockchain that supports Bitcoin has split again this week, creating yet another variant on the world's most popular cryptocurrency. The hard fork means Bitcoin and Bitcoin Cash are now joined by a third currency known as Bitcoin Gold, all of which operate as discrete currencies on separate blockchains.

But what exactly does this mean and what effect will this have on Bitcoin?

How did we end up with Bitcoin Gold?

Bitcoin currency is an evolving technology, and its growing popularity has exposed limitations in the design of its blockchain. However, being decentralised, the currency has no owner or single development group, and development decisions are reached when the community as a whole agrees overwhelmingly to a proposal.

In August, Bitcoin experienced its first hard fork when the community failed to reach agreement on how to improve transaction speeds (after an initial compromise appeared to have worked), leading to a splinter group founding its own currency known as Bitcoin Cash.

Now Bitcoin faces yet another issue needing community consensus - specifically the claim that the growing cost of Bitcoin mining - the process has pushed out smaller miners who traditionally used modest computing equipment, and is now dominated by mining farms using sophisticated application-specific integrated circuits (ASICs).

This had led to a number of developers in the community to voice concerns over the amount of control that miners have over the network.

Bitcoin Gold claims to solve this by redesigning its own network in such a way that prevents the use of ASICs in favour of smaller and cheaper graphics cards. It hopes doing so will attract more users and miners to its currency, and wrestle control away from large companies offering mining farm services and products.

What happens to my bitcoins?

As was the case with the Bitcoin Cash fork, Bitcoin Gold operates on a cloned version of the existing Bitcoin blockchain network, which will then be tweaked to the developer's liking. This means that any bitcoins you own will still be in your wallet once the currency splits.

However, the value of a bitcoin could potentially fluctuate after the split, as users are now able to buy Bitcoin Gold with bitcoins at a rate of 1 to 1. Bitcoin slumped to five-day low of $5,300 following the official launch of the new currency, but has since recovered to $5,600 at the time of writing. That's a fairly modest fluctuation given how notoriously volatile the currency is.

Yet this isn't exactly a surprise, as Bitcoin barely felt the Bitcoin Cash split and has continued to hit record highs since August, recently reaching $6,000.

Will Bitcoin Gold be a success?

Although it's never certain how much of a hit a new cryptocurrency will be, early signs suggest Bitcoin Gold will struggle. There was a great deal of enthusiasm around Bitcoin's initial fork in August, and early reports showed some early traction for Bitcoin Cash. However, after hitting an initial peak of $700, it has since lost almost half its value and has seen very little growth over the past month.

There's a chance that Bitcoin Gold could do better, particularly as it claims to be more accessible to mine, however it's received nowhere near the same enthusiasm from the community as Bitcoin Cash.

Some have criticised Bitcoin Gold's developers for causing an unnecessary fork, while others have pointed out that by moving more mining onto cheaper GPUs simply gives more power to companies such as Nvidia and AMD, who both manufacture graphics cards crucial for mining.

The developers behind Bitcoin Gold are currently operating on a private network, which means that early investors in the currency will not be able to secure their funds until it goes public next month.

The Pirate Bay is using visitors' computers to mine Monero coins when they visit the website.

The piracy site has deployed a JavaScript cryptocurrency miner to mine the cryptocurrency, activating only when users click on certain pages of its site.

The JavaScript code, Coinhive, is supposed to throttle the rate at which it mines coins so as not to completely take over a PC's CPU resources, making it ideal for 'borrowing' a certain amount of a user's CPU without preventing them from downloading content.

However, the miner, which was discovered over the weekend by TorrentFreak, has led to complaints from users.

"I was looking at a torrent page and suddenly all my CPU threads went 80-85%, something which usually only occurs when I'm encoding stuff. Happens on some pages, and it only stops when I navigate back to the home page or close the tab," said one Reddit user.

Another was incensed that this was done without their permission. "People don't like to be fooled like this. When they find out they immediately think that something else shady is going on - and rightfully so!" they said.

One moderator on the Pirate Forum voiced their disapproval of Pirate Bay's new money-making tactic.

"That really is serious, so hopefully we can get some action on it quickly. And perhaps get some attention for the uploading and commenting bugs while they're at it," said Sid. "Until it is fixed (and I would expect it to be fixed sooner rather than later) noscript will block it from running, as will disabling javascript."

The Pirate Bay was reportedly testing the feature for around 24 hours as a means to generate revenue for the site and eventually replace ads altogether.

Long-bubbling tensions over the future direction of Bitcoin boiled over last week, with miners split over technical issues finally solving them by splitting the currency itself.

The cryptocurrency forked into two separate currencies last Tuesday; the original Bitcoin Core (BTC), and newbie Bitcoin Cash (BCH), each using its own individual blockchain network.

The fork is a dramatic turn of events that has naturally left many users concerned about the future of the currency, and many potential buyers confused as to where to invest their cash, or how best to leverage the technology.

How did it come to this?

BTC is the original pioneer of cryptocurrency, and has grown hugely popular since its creation in 2009. However, with such widespread use, it's faced mounting pressure from users over bottlenecks they experience during transactions on its blockchain network.

Millions of Bitcoin transactions take place every ten minutes, but until last month the blockchain, which publically records all transactions, could only handle 1MB of data added every 10 minutes. That prevented huge DDoS data surges trying to take the network offline, but meant transactions were bottlenecked, with users facing huge delays to confirm transactions.

While frustration among Bitcoin miners and developers mounted, blockchain's peer-to-peer nature meant overwhelming consensus was necessary to make any changes to the network. In other words, users needed to agree a new standard.

This led to what was described as a civil war, as architects of the currency became split over possible solutions to the issue.

Some proposed raising the 1MB limit, while others wanted to make it easier to process transactions by moving signature data, essentially records of a transaction, to a separate network known as Segwit. Doing so would reduce the amount of data transactions use up by cutting some of the clutter from them, allowing more transactions to be processed within the 1MB limit.

As we reported last month, it appeared a consensus had been reached - a compromise known as Bitcoin Improvement Proposal (BIP) 91, that would see the Segwit solution implemented immediately and the data limit double to 2MB in three months' time.

We now know that a portion of the Bitcoin community remained unhappy with the proposals; they've since announced a breakaway currency known as Bitcoin Cash (BCH), which operates on a blockchain that has an 8MB transaction ceiling as an alternative to Segwit.

What happens now?

Valuation of Bitcoin as of 7 August - courtesy of Coindesk

The consensus among experts is that it's far too early to tell what will come of this split, and BTC has yet to show any signs of any major depreciation in price outside normal fluctuations. In fact, it's experiencing an all-time peak in value of $3,3398 or 2,603.

BCH, meanwhile, debuted at $555 before peaking at $727 on 3 August - it's now worth just $258.

"With regard to the price, BCH seems to have gathered a lot of steam in a short period of time," Colin Platt, co-founder of blockchain consultancy firm DPactum, told IT Pro last week. "It's worth noting that while the Bitcoin Cash network remains in its early stages, transactions are unable to reliably move into or out of exchanges which may make the market prices liable to manipulation."

For those watching the trading prices, it's worth noting that at this stage, they offer few assurances to the success of either platform. BTC seems to have shrugged off the split for now, and given its solid market position, it remains in a steady position as the most funded cryptocurrency on the market.

Can Bitcoin Cash succeed?

Bitcoin Cash has already received some early support from the market, which is closely watching what will come of that improved data rate. This could, in theory, produce one of the fastest transaction speeds on the market.

"The Bitcoin Cash fork is attracting support and could certainly be viable," said Dr Garrick Hileman, economics historian at the University of Cambridge. "Beyond the financial gains Bitcoin holders may realise from the advent of Bitcoin Cash, there are also potential technical benefits, such as observing how BCH performs with 8MB blocks and what kind of use it attracts."

However, according to a statement released by the Bitcoin Foundation last Wednesday, it appears less than 15% of the BTC network supported the move to BCH . The foundation said: "It's not yet clear that the Bitcoin Cash network will survive and be valuable to coin holders in the medium- to long term."

While support could conceivably increase given enough momentum, BCH potentially faces issues with its underlying technology. To solve some of the disruption caused by the split, BCH developers introduced new software mechanisms to attempt to reduce the mining difficulty.

"These are relatively new mechanisms," said Platt, whose organisation is closely monitoring the mining activities on BCH.

"These are only lightly tested, and as a result there could be avenues for parties to created unexpected disturbance in the network", he explained; something that Bitcoin Core was able to avoid thanks to a low data limit. "While we have not seen concrete evidence of this so far, it remains a risk."

A great deal of BCH's success lies with the underlying architecture, and how it matures over the coming months.

Yet even if the initial issues are ironed out, Bitcoin Cash still faces the hurdle of attracting the attention of users, and initial prospects are not looking good.

Coinbase, one of the largest digital currency exchange markets, informed users on 27 July that, in the event of a split, it would not be supporting two separate currencies. "We have made this decision because it is hard to predict how long the alternative version of bitcoin will survive and if Bitcoin Cash will have future market value," a Coinbase statement read. The exchange has since backtracked on its decision, but while it now plans to support the currency, its systems won't be ready to do so until January 2018.

Other exchanges, such as Kraken, have allowed the trading of Bitcoin Cash, yet without ubiquitous support, it's unclear how feasible it will be to trade in the currency. As Vili Lehdonvirta, senior research fellow at the Oxford Internet Institute, pointed out: "Two currencies with 50% market share in the same area are less useful than one currency with 100% market share from the point of view of ability to pay."

The problems with cryptocurrency

Ultimately, the biggest issue for both currencies is that economic fundamentals have very little application, as their value is still largely based on speculation and betting, according to Lehdonvirta. "I doubt those Bitcoin Cash buyers are buying it to actually use it for paying for goods and services," he said. "I suspect they are buying it because they, for whatever reason, think that it might increase in value in the future."

Until cryptocurrencies achieve something close to high volume commerce, predicting the success of either currency is almost impossible at this early stage.

The technology underneath is where the real 'success' will come from, claimed Paul Armstrong, author of Disruptive Technologies and founder of technology consultancy HERE/FORTH. "Blockchain as a technology offers business users much more than simple currency," he told IT Pro. "From smart contracts to supply-chain verification, blockchain remains a foundational technology that will allow much greater things to be built on top of it.

"Think beyond money into what jobs you need blockchain to do and businesses may see more money made or saved than simple money transactions alone."

Picture: Bigstock

Bitcoin has managed to avoid being split into two separate currencies after its community reached an agreement to significantly upgrade the capabilities of its underlying blockchain network.

A compromise was reached between the developers behind Bitcoin and the mining community, which had become divided over how to improve the technology, with some fearing that the currency could be split into two different blockchain networks.

Miners of the cryptocurrency issued overwhelming support for a software upgrade known as the Bitcoin Improvement Proposal (BIP) 91 last Friday, which is the first in a series of steps attempting to address the processing limitations of the current blockchain network, according to Reuters.

One of the advantages Bitcoin has held over traditional currencies is its ability to process transactions almost instantly using a blockchain public ledger.

However, blockchain is currently only capable of handling 1MB of data added to it every 10 minutes, a limitation introduced to the technology to defend it against increasingly popular DDoS attacks, which otherwise could overload the system with multiple transaction requests and cause it to crash.

That limit means the blockchain cannot keep pace with the popularity of Bitcoin, however, which now requires millions of transactions to be processed each day, slowing the system down as a result.

Some customers have started to complain of 'transaction queues' in the service, with some transactions taking up to three days to be confirmed. Process fees have also gone up as a result, reaching a high of $5 at the beginning of June, making purchases of low cost everyday items in Bitcoin-accepting shops unfeasible.

One proposed solution was to raise the blockchain's 1MB limit, with some supporting the limit be removed entirely. However, this would have had a knock on effect for miners, who use high-end computing power to solve increasingly complex mathematical problems to 'mine' bitcoins and generate 'blocks' in the chain.

Significantly increasing the amount of data that can be added to the blockchain also increases the processing power required to generate each block, making it too expensive to mine efficiently.

Instead, a compromise was reached that will see the blockchain software be revamped to make it more efficient.

This software, known as Segwit2x, will remove transaction signature data, required to unlock bitcoins for spending, from inside the blockchain network and will place it outside in separate files. This will allow the processing limit to double to 2MB in three months' time.

Rob Viglione, co-founder of cryptocurrency ZenCash, told Reuters: "BIP 91 unleashes the next wave of innovation because it has been a little bit stagnant of late for Bitcoin."

The software upgrade to Bitcoin's network is not expected until the autumn, according to Viglione. Once in place, Bitcoin could stand to increase its current processing cap of seven transactions per second, although it will still be substantially behind the 2,000 transactions per second average handled by Visa.

The compromise avoids a potential split in the currency, a proposal that would have halved the number of transactions being processed on the single blockchain network, but may have undone the currency's recent success.

Fears around a split have proved turbulent in recent weeks, with the currency failing from a record high of $3,000 (2,299) to as low as $1,830 (1,402), only to recover to $2,647 (2,029) on Friday.

Bitcoin's value hit $1,020 (831) at the turn of the New Year, capping a 125% rise in value across the last 12 months.

The cryptocurrency surpassed the $1,000 mark for the first time since December 2013, more than doubling in value from $432.58 at the start of 2016, according to XE's currency chart.

Some observers attributed its 125% climb in value to growing interest from China, according to the Guardian, whose national currency, the Yuan, lost 7% of its value last year. China is where most bitcoin trading occurs, according to Reuters.

CoinDesk charts showed Bitcoin trading up to $1,029 today, falling to $1,019 before the close of business. This is still some way off its peak value of $1,230 in December 2013, according to XE's data.

"The growing war on cash, and capital controls, is making bitcoin look like a viable, if high risk, alternative," said Paul Gordon, a board member of the UK Digital Currency Association and co-founder of Quantave, a firm seeking to make it easier for institutional investors to access digital currency exchanges.

Bitcoin outperformed all central bank-issued currencies over 2016, but is a volatile medum of exchange. Following its 2013 spike, Bitcoin had lost half of this value by mid-February 2014 after Mt. Gox - the largest Bitcoin exchange at the time - halted withdrawals, before filing for bankruptcy later that month.

However, CoinDesk predicted that this time around, Bitcoin's value will continue to rise, writing: "As asserted by analysts, 2017 is expected to be a banner year, one that could finally lead the price to pass its all-time high of $1,216.7 set in 2013."

Bitcoin trading platform Bitfinex has revealed its users will lose 36 per cent of their assets after a digital currency hack meant its customers would need to share the losses.

However, the company is willing to issue a BFX token equal to their losses, which could either be exchanged for repayment or shares in its parent company iFinex.

"Please take this time to log in and review your account and balances, taking note of the adjustments caused by the closing of open margin positions and the application of the Extraordinary Loss Adjustment," Bitfinex wrote in a blog post.

"The loss adjustment is represented by your balance in "BFX" tokens which are priced at 1.00 USD until we are able to allow trading of that token, likely within the next week. The trading of BFX tokens may be restricted for US customers."

Although the platform was taken down while it attempted to fix the damage and work out how much had been lost, it will be coming back online in a "controlled and secure way."

The company re-launched on a read-only basis, although those who wish to access their accounts must reset their passwords and 2 factor authentication. They will not be able to use Clef and all API keys have been revoked.

"Full platform functionality will come online in progressive steps in the coming days," the blog continued. "Withdrawing, depositing and exchange trading will come online first, with margin trading (for non-US customers) to resume sometime after that. Further announcements will be made when the schedule for turning on those features is finalized."

03/08/2016: Bitcoin hack wipes a fifth of value from digital currency

Bitcoin investors' nerves have been tested once again, as a major bitcoin exchange revealed hackers had swiped 119,756 bitcoins, crashing the value of the digital currency crashing by a fifth.

The stolen bitcoin were worth $65 million (49 million) - although the instability means they have also lost some of their value. The attack knocked the price of a single bitcoin from $604 to $482 - its lowest in two months - although the cryptocurrency recovered to $544 as of yesterday and was hovering at about the value same at the time of publishing.

Bitfinex, based in Hong Kong, is one of the largest bitcoin exchanges, and the largest outside mainland China. Director of community and product development Zane Tackett was quoted in the Wall Street Journal as saying the company knows "exactly how relevant systems were compromised," but did not reveal further details.

The company said its main website would remain offline and all trading halted until the investigation was over. Only bitcoin was affected; other currencies the company traded were not targeted.

The hack was compared to an attack in 2014 against Mt. Gox, which lost 850,000 bitcoin. That exchange never reopened, but experts agreed the Bitfinex incident was likely to be less damaging. "This will hurt confidence but people already using bitcoin are still trading," Arthur Hayes, founder of Hong Kong-based BitMEX, told the Financial Times.

Trader Jacob Eliosoff told Coindesk that the longer-term impact of the hack could depend on how Bitfinex "will make customers whole". The company said in a blog post it would "look at various options to address customer losses later in the investigation."

Bitcoin's value hit a new high on Saturday, reaching over $500 per bitcoin for the first time in 20 months.

At the time of publishing, Bitcoin was still sitting at a price of $545.65 (372.91) per bitcoin, according to CoinDesk.

While this new high has generated some excitement, it does not match the digital currency's golden days in November 2013, when the price per coin was just over $1,100.

However, Bitcoin experts believe that the currency's value will continue to climb for the foreseeable future, which could be attributed to people becoming more confident of Bitcoin's long-term value, according to Jack Liu, chief strategy officer at Chinese bitcoin exchange, OKCoin.

Liu believes an increase in the price of the digital currency is likely because the costs paid to bitcoin miners will decrease soon, causing fewer individuals to mine, which in turn will slow the rate at which new Bitcoins enter the market. This period of relative scarcity will then push up the value of those units already in circulation.

"Emotions have taken over: Traders have taken their rational lenses off and are buying with the expectation of selling higher in a short period of time," Petar Zivkovski of bitcoin trading network Whaleclub, told CoinDesk. "Inevitably, low-entry buyers will rush to take profit and price dumps will ensue."

In tandem with supposed user confidence growing, the digital currency has been legitimised by its acceptance from reputable banks and retailers.

Online gaming store Steam approved use of the currency of its store last month. Additionally, Bitcoin Visa card has launched in the US and the Swiss town of Zug has been trialling Bitcoin in its public services.

In related news, 24,518 (approximately 8 million) confiscated bitcoins are due to be auctioned off next month in Australia.

The coins are being held by the state of Victoria's Asset Confiscation Operations department, after being seized in 2015, when they were worth 9 million.

Ernst & Young, the auction organiser, said the bitcoins had been confiscated as proceeds of crime, but did not explain further, the BBC reports.

The organisers said they have chosen to hold the auction now as the market is currently stable. However, to prevent the auction from negatively affecting the market value of the coins, they will be sold off in sets of 2,000 (about 680,000).

The auction will be open for people to bid on worldwide, and will commence sometime in June, although no exact date has yet been given.

Craig Wright has failed to present the evidence he promised would proove he is the creator of digital currency Bitcoin.

The entrepreneur originally said he would transfer bitcoins from "block 9" - one of the earliest blocks of bitcoins - using a security key known only to Satoshi Nakamoto, the pseudonym used by the true creator of Bitcoin, in order to quash claims by some security experts that he is a fraud.

However, he is now saying he is not strong enough to carry out the task, despite showing proof to his biggest supporters and senior members of the Bitcoin Foundation, Jon Matonis and Gavin Andresen.

"I believed that I could put years of anonymity and hiding behind me," Wright said in a blog.

"But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot.

"When the rumours began, my qualifications and character were attacked. When those allegations were proven false, new allegations have already begun. I know now that I am not strong enough for this."

He went on to apologise to his supporters in his closing blog, saying he is willing to accept the world may not believe him, but he is willing to take that risk.

"I know that this weakness will cause great damage to those that have supported me, and particularly to Jon Matonis and Gavin Andresen," he wrote.

"I can only hope that their honour and credibility is not irreparably tainted by my actions. They were not deceived, but I know that the world will never believe that now. I can only say I'm sorry. And goodbye."

03/05/2016: Craig 'Satoshi' Wright's Bitcoin claims blasted as "scam"

Confusion surrounds Craig Wright's claim that he is Bitcoin inventor Satoshi Nakamoto, as security experts blast it as a "scam" and a "deception".

Wright published a blog post this week in which he confirmed the rumours that he was Nakamoto, a theory first put forward by Wired earlier last year.

Nakamoto is an elusive figure, shrouded in mystery and with little information known about him. As the inventor of the world's most popular cryptocurrency, whoever is behind the pseudonym would control a billion-dollar fortune.

However, security analysts have quickly emerged to announce that this is in fact not the case. Several clues, they said, reveal Wright's claims to be fraudulent.

One is that the digital signature Wright used as proof - supposedly the private key used by Satoshi in the very first Bitcoin transactions - actually originated as part of a publicly documented transaction from 2009.

This could be easily found through Google by anyone, critics said, and so does not prove him to be the founder.

On the other hand, Wright has some serious Bitcoin authorities backing his assertions. His primary advocate is the Bitcoin Foundation's chief scientist, Gavin Andresen, who flew to London for a private demonstration that apparently proved Wright's story.

Andresen remains convinced that Wright is Nakamoto, and as someone who was heavily involved with the early development of Bitcoin, he would be in a good position to know.

Wright has pledged to convince the doubters, following up his initial blog post with the announcement that he would be providing "extraordinary proof" (such as transferring bitcoins from an early block), asking "only that it be independently validated".

02/05/2016: Craig Steven Wright claims to be Bitcoin creator Satoshi Nakamoto

Australian entrepreneur Craig Steven Wright has revealed himself as the creator of Bitcoin thought previously to be Dorian Satoshi Nakamoto.

Wright revealed evidence to the BBC, the Economist and GQ that he created the digital money, following Wired and Gizmodo investigations that pointed to him as Bitcoin's creator.

"These are the blocks used to send 10 bitcoins to Hal Finney in January [2009] as the first bitcoin transaction," Wright said after presenting the evidence to the news organisations.

Craig Steven Wright (Wikipedia)

Gavin Andresen, chief scientist at the Bitcoin Foundation, backed up Wright's claims, saying he believed the Australian was the main person behind Bitcoin after spending time with him between 2010 and 2011.

"Part of that time [I spent with Wright] was spent on a careful cryptographic verification of messages signed with keys that only Satoshi should possess," he said.

"But even before I witnessed the keys signed and then verified on a clean computer that could not have been tampered with, I was reasonably certain I was sitting next to the Father of Bitcoin."

He said Wright is a "brilliant, opinionated, focused, generous and privacy-seeking" person, which perfectly matches the traits of the Bitcoin creator Nakamoto.

"It would be better if Satoshi Nakamoto was the codename for an NSA project, or an artificial intelligence sent from the future to advance our primitive money. He is not, he is an imperfect human being just like the rest of us," Andresen wrote.

Despite the admission, Wright has made it clear he doesn't want people to think any different of him.

"I have not done this because it is what I wanted. It's not because of my choice," he said, making it clear he does not want to become a martyr for his creation.

"I really do not want to be the public face of anything... I would rather not do it," he said. "I want to work, I want to keep doing what I want to do. I don't want money. I don't want fame. I don't want adoration. I just want to be left alone."

Police have searched the home and office of the alleged founder of Bitcoin after his identity was revealed by Wired and Gizmodo.

The publications claim Sydney-based Craig Steven Wright is the man behind the most famous cryptocurrency, detailing their reasons in articles published yesterday.

But the Australian Federal Police said the raids on the 44-year-old cryptologist's property were in connection with tax issues, not Bitcoin.

"The AFP can confirm it has conducted search warrants to assist the Australian Taxation Office at a residence in Gordon and business premises in Ryde, Sydney. This matter is unrelated to recent media reporting regarding the digital currency bitcoin," a statement read.

The founder of Bitcoin has always been known only by a pseudonym, Satoshi Nakamoto, which led Newsweek to claim to have uncovered the founder living under the name Dorian Nakamoto (birthname Satoshi) in Los Angeles last year.

But the alleged revelation proved doubtful, with the 64-year-old Nakamoto eventually trying to raise funds to sue the site through a now-defunct fundraising page, newsweeklied.com.

This time, Wired has detailed dozens of pieces of evidence it believes point to Wright being the man behind Bitcoin, a cryptocurrency that has been used to finance crime, but that could also allow people to transfer money quickly, conveniently, and cheaply across the world.

The writers of the article, Andy Greenberg and Gwern Branwen, said: "The signs point to Craig Steven Wright, a man who never even made it onto any Nakamoto hunters' public list of candidates, yet fits the cryptocurrency creator's profile in nearly every detail.

"Either Wright invented bitcoin, or he's a brilliant hoaxer who very badly wants us to believe he did."

The first piece of evidence Wired cited is an August 2008 blog post by Wright that apparently set out his intention to release a cryptocurrency paper, just months before the November 2008 introduction of Bitcoin.

Another blog post in November that year tells readers who want to contact Wright to encrypt their messages using a PGP public key that Wired report was linked to Satoshi Nakamoto.

Other entries include one the day after the launch of Bitcoin, saying, "The Beta of Bitcoin is live tomorrow We try until it works", which if Wright had written it in Australia, where he lives, would have been before the 3pm EST launch of Bitcoin.

One more significant piece of evidence Wired uncovered via an anonymous source close to Wright was a PDF written by Wright's close friend, the late computer forensics analyst David Kleiman.

In it, he agreed to take control of a fund containing 1.1 million bitcoins, called the Tulip Trust.

This is the same size as the publicly visible Bitcoin stash people can see on Bitcoin's blockchain, that is believed to belong to Satoshi Nakamoto, and currently worth around $460 million.

However, Wired admit the whole thing could be an "elaborate hoax", saying comparisons of archived versions of Wright's blog posts prove he edited them to insert evidence of his Bitcoin involvement.

But Gizmodo was separately contacted by an anonymous source, who told them: "I hacked Satoshi Naklamoto [sic]. These files are all from his business account. The person is Dr Craig Wright."

A flurry of emails pulled from an Outlook account appeared to support the evidence, the publication said.

One quote Wired attributed to Wright, from a conversation he apparently held with Australian tax officials, reads: "I did my best to try and hide the fact that I've been running Bitcoin since 2009. By the end of this, I think half the world is going to bloody know."

Since the story appeared, Wright has removed his private Twitter profile, and deleted the associated blog posts, so there is no clear or immediate way to verify Wired's claims.

The EU has pledged to clamp down on non-banking payment methods such as Bitcoin, which could be viewed as financing terrorism.

Digital currencies can allow anonymous payments to be made by terrorists, the EU said, as well as pre-paid credit cards that can be obtained easily by criminals and used without being tracked by the authorities.

The European Commission said in draft proposals that it plans to "strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards".

EU interior and justice ministers will meet to discuss the proposals today, alongside other pressing matters related to the devastating attacks in Paris last week where 129 people were brutally killed by terrorists claiming to be part of ISIS.

On Tuesday, the European Commission laid out plans to assess the role of virtual currencies for nefarious purposes, stating: "Among the sectors under assessment, the use of virtual currencies will be subject to particular attention, as requested by the European Council of 26th January, 2015."

"Member states will have to comply with such measures or explain the reasons why they ask for derogations," the memo continued.

The EU will additionally produce "a list of countries which present some deficiencies in their anti-money laundering (AML) and terrorist financing regimes".

Other subjects on the agenda include plans "to curb more effectively the illicit trade in cultural goods," although it' is not clear what this will entail and how this relates to recent events in Paris.

Bitcoin is the most commonly used virtual currency in circulation and is especially useful in allowing people to trade money anonymously around the web, making a perfect option for terrorist groups to use.

In what stands to have broad implications for Bitcoin's standing in Europe, the EU's top court has ruled on Thursday that Bitcoin and other virtual currencies will not be subject to value added tax (VAT), meaning they can be exchanged tax-free.

The case was brought to the court after a Swedish citizen, David Hedqvist, requested to establish a Bitcoin exchange allowing people to buy and sell Swedish krona for the popular virtual currency. The Swedish Tax Authority subsequently referred the issue to the European Court of Justice, asking for clarification on:

"[1] Whether or not a service for remuneration rendered by a bitcoin (virtual currency) exchange can be treated as a VAT relevant service; and [2] in case the bitcoin (virtual currency) exchange service is VAT relevant, whether a VAT exemption can be applied."

The decision to make Bitcoin operations exempt from VAT allows people in Europe to buy and sell the currency without paying taxes. This will come as good news for Bitcoin startups throughout the EU, and makes a convincing argument for the use of the currency in international transactions.

The European Court of Justice's ruling comes in the wake of several Bitcoin VAT exemptions by EU member states, including Belgium, Spain and Switzerland. The latter clarified its position in June, with the Swiss Federal Tax Administration (FTA) reacting to a formal question submitted the year before.

How to buy bitcoins

1. Set up a bitcoin wallet to store your prospective bitcoins.
2. Visit a reputable website that will let you exchange your Fiat currency for bitcoin.
3. Supply your wallet ID to a seller so that an exchange can take place.
4. Transfer money from bank account into exchange or to seller.
5. Wait for bitcoins to arrive in wallet.
6. Go forth and spend.

How to buy bitcoins in detail

1. Set up a bitcoin wallet

Before you rush out and buy some digital money, make sure you have a safe place to keep them this is what your bitcoin wallet is for.

There are plenty of places to obtain wallets, with many cryptocurrency exchanges offering their own wallets for you to use.

But while it may seem sensible to sign up for a wallet with the exchange you plan to do

business

with, this isn't always the best move, as some are unstable.

You're far safer opting for a third-party wallet. These wallets also usually have the added benefit of allowing you to store different currencies in the same place, so if you get bitcoin fever, you have somewhere to store all those alternative coins you fancy buying.

While there are plenty of safe wallets to choose from, we recommendCoinbase thanks to its ease of use, clean interface, and handy iOS and Android app. In fact, Coinbase now also allows you to buy bitcoins from others too.

2. Exchange your Fiat currency for bitcoin

Now you have your wallet, it's time to get rid of your common pounds, dollars, euros or whatever currency you use and invest in the future.

There are many ways to attain bitcoins. You can purchase them from an exchange; via a wallet service; at face-to-face meetups, from a physical bitcoin ATM; or you can have a go at mining some yourself.

Purchasing from an exchange or wallet is an exercise in tedium thanks to having all the bureaucratic hoops. However, if you're happy not to be anonymous, and want to trade regularly, exchanges and wallets are a great choice.

If you want to see which exchanges you can easily buy from, visit Howtobuybitcoins.info for a list of every exchange registered in your country.

Purchasing face to face or via an ATM provides you with anonymity, but it can be more expensive than via an exchange or wallet.

Visiting Meetup.com to find a public meet-up for buying and selling bitcoins. Coindesk has made it easier to find a bitcoin ATM thanks to itsbitcoin ATM map.

If you're thinking about mining bitcoins yourself don't. The process has become too intensive for any home computer, and investing in the machines needed to mine the ever-diminishing pool of coins is not cost-effective enough.

If you'd like a blissfully simple way to obtain bitcoins online, we recommend visiting Bittylicious. Despite the terrible name and basic web design, it's a great place that connects buyers with sellers, and without you even having to deal with anyone at all.

3. Supply your wallet ID to the Seller

No matter how you decide to obtain bitcoins, you must send your bitcoin address to the seller or exchange to ensure your bitcoins end up in your wallet.

This 34-character encrypted address is perfectly safe to share with others as it only allows users to send money to you. Nobody can take money from you with this address, nor can they make purchases in your name. It's just one way that bitcoin manages to stay

secure

for everyday transactions.

If you're opting for the bitcoin ATM route, then don't worry about your bitcoin address: all the information you'll need to obtain your bitcoins will be on a print-out or sent automatically to you upon scanning a QR code.

4. Send the seller or exchange your money

If you don't fancy making a bank transfer, some services will let you pay via other means such as by credit card. However, you should be incredibly careful doing this with a site you're unsure about. Bank transfer is really the safest method for both parties, which is why only a few places allow for alternative payment methods.

One reason why we like Bittylicious so much is because for UK residents it offers alternative payment methods such as PayM, Barclays PingIt, Natwest PYC and credit/debit cards.

If you plan to purchase from a bitcoin ATM, all you have to do is insert your money into the ATM.

5. Wait for your bitcoins to come rolling in

If you've followed those steps, all you have to do now is sit back and let the bitcoins arrive.

Using a bitcoin ATM means the money should arrive almost instantly, and exchanges and wallets will usually have the cryptocurrency waiting for you shortly.

Some services take longer, but you can watch the progress of your transfer, and you won't lose them once the process has started.

Bittylicious guarantees a transfer within two hours or you get your money back in general, it normally doesn't take that long.

6. Go forth and spend.

Now that you have your bitcoins, it's time to go and spend them.

More and more retailers and merchants are accepting bitcoins and other alternative coins.

Feeling hungry? Takeaway.com lets you pay for your local takeaway with bitcoin. How about a holiday? PrivateFly lets you pay in bitcoin for a private jet flight to your destination of choice. Or, you could just head to Coinmapand see all the businesses near you that accept bitcoin.

This article originally appeared on sister title Alphr.

22/10/2015: Bitcoin is officially exempt from VAT, the European Court of Justice ruled today, meaning that Bitcoin will be treated the same as traditional money across all 28 EU member states.

The court was reviewing whether VAT should be charged on exchanges like the failed Mt. Gox, which convert the digital currency into fiat currency while taking a transfer fee.

The review began following disputes between Swedish exchange operators and the country's tax office in June 2014, after Britain had already scrapped VAT on the digital currency in March 2014.

This decision brings Bitcoin and other digital currencies closer to mainstream acceptance, and may lead to greater adoption in the wider financial and economic space, said lawyer Jonathan Rogers.

"From a strategic perspective, this decision, which appears to ensure virtual currencies will be seen as cash, should be an opportunity for emerging forms of financial services & FinTech to get a shot in the arm bringing growth and consolidation," said Rogers, a financial services regulatory group partner for Taylor Wessing.

"Greater clarity can now emerge in the debate about how to regulate virtual currencies, leading to increased credibility and consumer confidence; in turn, virtual currencies will have a much greater critical mass in the financial services system."

The news comes after the UK government decided to regulate Bitcoin with the same anti-money laundering rules it uses on fiat currencies, widely seen as a positive sign of digital currency's progress towards mainstream acceptance.

19/03/2015: The UK government has announced it will regulate digital currencies with standard anti-money laundering rules, a step towards the country embracing Bitcoin.

A report on the new regulation was released alongside the 2015 budget announcement from George Osborne, with increased support for innovation and the fight against criminal use of digital currencies such as Bitcoin also outlined by Britain's Treasury.

"Today's announcement is significant in that it brings Bitcoin and other block chain technologies closer to mainstream adoption," said Paul Gordon, UKDCA board member. "The UKDCA is pleased that its recommendations have been adopted and will be leading the process with the BSI to develop industry standards."

Many have been deterred from using digital currencies because of the prevalence of illegal transactions they have been used for, as well as the tendency for hackers to target them. With government regulation, however, "cryptocurrencies" could quickly rise in popularity.

Many have already shown support for Bitcoin, including IBM and the Bank of England, according to Reuters. This is despite the latter's assertion that digital currencies could lead to more cases of fraud and damage to the economy if used widely.

The government released a report on the future of FinTech European financial technology saying: "Digital currencies such as Bitcoin have the potential to replace traditional currency and, by extension, the need for central banking and regulatory systems."

In addition to this announcement, Wednesday also saw UK Chancellor George Osborne reveal a 40 million investment in smart city technology, commitment to bringing ultrafast broadband to homes across the UK, introduction of the Google tax', 100m for driverless cars push and plans to nurture tech clusters in locations such as Manchester, Leeds and Sheffield.

The CEO of failed bitcoin exchange, Mt. Gox, Mark Karpeles, has been charged in Japan in relation to the loss of almost 250 million worth of the virtual currency last year.

The charges relate to the embezzlement of 850,000 bitcoins, totalling a worth of around 250m last March. As a result of the loss, all user accounts were frozen so the company could investigate the missing currency and then the organisation was forced to file for bankruptcy a month later.

Japanese courts say Karpeles accessed his own company's computer system to falsify data so he could artificially create around $1 million (640,000) in Bitcoin, falsifying data on its outstanding balance.

The charges were placed as the six-week criminal holding period was coming to an end, as set out in Japanese law.

However, Karpeles previously claimed the issues were caused by system bugs and not by any hack into the system or other malicious activity, and his lawyer denied his client had done anything illegal.

Following the bankruptcy filing, MtGox announced it found 200,000 of the missing bitcoins (worth 74 million) in a 'cold' digital wallet, meaning the total number of bitcoins mislaid was reduced to 650,000 - accounting for around seven per cent of all bitcoins in existence.

After investigating further into Karpeles' actions, Japanese police believe he may have illegally spent 1.1 billion yen (5.7 million), by sending them to other firms he was involved in, according to Japanese public broadcaster NHK.

Mt. Gox was once responsible for processing 80 per cent of global Bitcoin transactions before it folded, but the loss of such volumes of currency led to its decline and mistrust in the digital currency.

A French investor told AFP news agency last year at a creditors' meeting in Tokyo: "They say it's under investigation. That's all they say. They seem to refuse to make public more precise information about Mt. Gox's own [information] and how and when it was stolen, if it was really stolen."

The original news story surrounding the arrest of Karepeles was published on August 3rd, 2015, but has been subsequently updated to reflect updates.

Former Secret Service agent Shaun Bridges has pled guilty to laundering more than $800,000 in bitcoin during the investigation of online black market Silk Road.

Bridges was arrested earlier this year, along with DEA special agent Carl Force, who was accused of extorting bitcoin payments from Silk Road founder Ross Ulbricht over the course of the investigation.

After the arrest of Silk Road admin Curtis Green, Bridges used his security credentials to rob some of the site's numerous drug dealers.

Bridges stole around 20,000 bitcoins initially worth around $350,000 before moving them to a bitcoin wallet' under his control.

The cryptocurrency was then shuffled around via various exchanges and holding companies, including the infamous Mt. Gox, until the sum had increased in value to $820,000.

He was discovered partly through bitcoin's built-in record keeping, said Chief Richard Weber of the IRS Criminal Investigation department."Through the analysis of both the block chain and data from the Silk Road servers, we were able to trace the flow of funds," he stated, "which eventually led to the defendant."

"This case is an excellent example of the financial expertise of our special agents," he claimed.

Bridges also pled guilty to the obstruction of investigations into both Silk Road itself and his own illegal activities.The sentencing for Bridges' crimes will take place in December.

It is currently unknown what the recommend sentence of his plea agreement is, but both the money laundering and obstruction charges carry a maximum jail term of twenty years.

Sentenced earlier this year to life in prison, Silk Road's founder has filed repeated motions for a mistrial, and his attorney told Reuters that Bridges' admission "removes any question about the corruption that pervaded the investigation of Silk Road".