At this point, you probably have a working understanding of what bitcoins are (at the very least your handle of bitcoins is like how you can kinda, sorta explain why the sky is blue to a kid). But how does an actual transaction with bitcoins work? That’s a bit more complicated. It’s not exactly pulling crumpled cash out your pocket and dropping it off at the bodega counter for a soda now is it? Read more…
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How a Bitcoin Transaction Actually Works
On Wednesday evening, Bitfloor , the number four Bitcoin-based exchange (behind Mt. Gox, BTC-E, and Bitstamp) announced that it is closing its doors “indefinitely.” “Unfortunately, our US bank account is scheduled to be closed and we can no longer provide the same level of [US dollar] deposits and withdrawals as we have in the past,” wrote Roman Shtylman , the exchange’s founder. “As such, I have made the decision to halt operations and return all funds. Over the next days we will be working with all clients to ensure that everyone receives their funds. Please be patient as we process your request.” Ars reached out to Shtylman to find out more details, but he did not immediately respond. Read 2 remaining paragraphs | Comments
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Bitfloor, number four Bitcoin-based exchange, shuts down for good
Zach Copley The federal agency charged with enforcing the nation’s laws against money laundering has issued new guidelines suggesting that several parties in the Bitcoin economy qualify as Money Services Businesses under US law. Money Services Businesses (MSBs) must register with the federal government, collect information about their customers, and take steps to combat money laundering by their customers. The new guidelines do not mention Bitcoin by name, but there’s little doubt which “de-centralized virtual currency” the Financial Crimes Enforcement Network (FinCEN) had in mind when it drafted the new guidelines. A FinCEN spokesman told Bank Technology News last year that “we are aware of Bitcoin and other similar operations, and we are studying the mechanism behind Bitcoin.” America’s anti-money-laundering laws require financial institutions to collect information on potentially suspicious transactions by their customers and report these to the federal government. Among the institutions subject to these regulatory requirements are “money services businesses,” including “money transmitters.” Until now, it wasn’t clear who in the Bitcoin network qualified as a money transmitter under the law. Read 7 remaining paragraphs | Comments
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US regulator: Bitcoin exchanges must comply with money-laundering laws
After rising steadily over the last several months, Bitcoin has reached an all-time high according to data on Bitcoin Charts . As of this writing, Mt. Gox , the most popular Bitcoin trading site (which announced on Wednesday that its operations would move to Silicon Valley), recorded a high price of $33.22 per Bitcoin. There’s no single explanation as to why Bitcoin has continued to rise, accelerating particularly over the last month. That said, it’s been clear that interest in the digital currency has been rapidly rising, as any regular reader of Ars knows. It’s likely that online gambling has played a part. As we’ve reported earlier this year, one Bitcoin-based site took in $500,000 in profit in just six months in 2012—and Bitcoin gambling is set to get even bigger . For now, gambling with the cryptocurrency, like using Bitcoins in general, remains in a legal grey area (which may be part of the appeal as well). Read 3 remaining paragraphs | Comments
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Bitcoin reaches an all-time trading high of over $33