6/9/14 – GHash nears 51%, digital currency grows in South Africa, & the NYC Bitcoin Fair

http://moneyandtech.com/June-9-news-update/

Bitcoin mining pool Ghash.io came close to processing 51% of all bitcoin transactions over the weekend, which would give it majority control of the blockchain, allowing for manipulations such as the ability to spend the same bitcoins more than once. The mining pool also came close to the threshold in January this year, at which time Ghash.io issued a statement saying, “[We] will take all necessary precautions to prevent reaching 51% of all hashing power, in order to maintain stability of the bitcoin network… we see no benefit from having [a] 51% stake in mining.” Now once again, users on the bitcoin subreddit spoke up insisting more people leave the mining pool to lower the cumulative percentage, though no statement from the company has yet been released.

Bitcoin exchange BitX from software firm Switchless is growing its presence in South Africa, opening its platform to Kenya, Nigeria, and Namibia. BitX also offers wallets for its users, and merchant integrations to help businesses accept Bitcoin. These recent expansions are part of Switchless’s mission to build the world’s largest cryptocurrency distribution platform and spread the adoption of bitcoin.

Also in Kenya, startup BitPesa launched on Saturday with an event in London that demonstrated bitcoin’s potential to the developing world. The company allows customers to convert bitcoins into Kenyan shillings through its website, then sends the funds to the customer’s desired Kenyan mobile-phone wallet, such as those powered by M-Pesa, Orange, or Airtel. As CEO Elizabeth Rossiello says, “we want to become a visible presence amongst the diaspora community and those in Kenya who move money home from abroad.”

The California Senate Banking and Financial Institutions Committee passed bill AB-129 by an overwhelming majority on Wednesday, moving bitcoin and other digital currencies one step closer to total legalization as lawful money in California. Next, the bill will move to the Senate floor for debate and voting, and if approved, on to Governor Jerry Brown’s desk to be signed into law.

New York City’s largest pushcart market Hester Street Fair will begin accepting bitcoin at more than 30 of its artisan vendors starting this Sunday June 15th. With the help of bitcoin payment processor BitPay, the vendors will sell everything from artisanal food to vintage clothing to handmade arts and crafts in exchange for the digital currency. Bitcoin entrepreneur Charlie Shrem, who recently had his house arrest lifted, will be attending the fair’s inaugural bitcoin weekend.

Bitcoin gift card company GogoCoin has partnered with Blockchain.info to issue ‘white-label’ gift cards that gives users a new Blockchain bitcoin wallet when accepting their new funds. Each card is loaded with 2mBTC or about .30, just enough to encourage more bitcoin adoption. As GogoCoin CEO Tom Longson says, “[If] that gets more people understanding what bitcoin is, that’s a win. That’s a win for us, that’s a win for Blockchain.info, that’s a win for the community at large.”

http://moneyandtech.com/June-9-news-update/
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Bitcoin scam charges made against companies in US

Two US Bitcoin mining firms have been charged with running a scheme that duped more than 10,000 investors.
GAW Miners and ZenMiner are accused of selling shares worth m (?13.3m) in mining hardware called Hashlets.
Bitcoins are “mined” when computers solve equations that verify user transactions made with the currency.
But it is claimed that Hashlets did not have enough processing power to carry out the number of verifications required to properly reward investors.
GAW and ZenMiner were owned by Homero Joshua Garza, who has been charged in a Securities and Exchange Commission (SEC) complaint filed in a federal court in Connecticut.
“As alleged in our complaint, Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another,” said Paul Levenson, director of the SEC’s Boston regional office.
‘Ponzi scheme’
The SEC has alleged that Mr Garza’s companies were engaged in what’s known as a Ponzi scheme, in which investors were owed more than the mining machines were able to make and pay out to them each day.
As a result, it is claimed that most were never able to recoup the value of their initial investments, while a few made some profit.
Mr Garza was said to be “disappointed” by the charges, according to a statement from his lawyer, Marjorie Peerce,
Any further comments, she added, would be made through the court process.
Bitcoin blues
Generally, fraud in the Bitcoin world is on the increase, according to Richard Howlett, a partner at London law firm Selachii, which advises clients on legal issues relating to crypto-currencies.
“There are several high-profile Bitcoin exchanges I am aware of which appear to be Ponzi schemes,” he said.
Mr Howlett added that Bitcoin users sometimes also encountered difficulties when trying to retrieve currency stored in online “exchanges” – a bit like personal banks for Bitcoins.
On occasion, a rogue exchange might shut down overnight and claim it was hacked, said Mr Howlett. Those running the exchange would then disappear with the clients’ funds.
Since 2014, Mr Howlett’s firm has been contacted by more than 1,000 people affected by rogue exchanges and mining companies.
“Until the industry is regulated, this pattern will continue to increase,” he added.
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