Dollars

November 2013


10 Corporations Control Almost Everything You Buy

LARGE RECTANGLE
Henry Sapiecha
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BRITO’S FULL INTERVIEW ON BITCOINS HERE ON VIDEO

Currency free of government regulation: A libertarian’s dream and Bitcoin is the answer, some have said. But as the cryptocurrency gains popularity, so do levels of scrutiny.

It looks as if the unregulated Bitcoin market may have hit a snag lately as lawmakers take an interest in establishing some law and order.

Earlier this month a Texas judge ruled that Bitcoins are a currency and are therefore subject to government oversight.

In March the US Treasury issued a set of rules in an attempt to reign in the industry, ordering that Bitcoin business must register with the federal government and adhere to a regulatory regime as all other currencies do. 

Now a US senate committee is investigating the coin and deciding how much of a role the state can and should play.

This week USA Today reported that the Senate Homeland Security and Government Affairs Committee has been questioning government agencies on how they oversee virtual currencies. Responses are due at the end of August.

But the cyrptocurrency community isn’t breaking a sweat. Patrick Murck, Bitcoin Foundation’s general counsel, told USA Today that he found the State’s actions “proactive” and conducive to “productive dialog.”

Meanwhile, the New York Department of Financial Services issued a series of subpoenas in August to Bitcoin businesses. The banking and insurance department wanted to know how the industry was protecting against money laundering and providing customers with protection.

Murck said New York was “trying to set the policy for the entire country,” adding that it is unlikely the state has any jurisdiction in the matter.

Skeptics point to several issues including anonymity, lack of regulation and potential use in black markets. Transactions are difficult to trace and the virtual money is not tied to any sort of bank or business.

The Bitcoin Foundation, a trade organization for the digital currency, has taken the issue head on by attending a meet-and-greet with lawmakers this past week, The Verge reports. The meeting was meant to be educational as Bitcoin representatives explained the technical side of their business to the Fed, the IRS, the FBI and the Department of Homeland Security, among others.

Currently, the Bitcoin camp is split between those who invite regulation and those who oppose it. In a recent interview with CATO Institute, Jerry Brito, senior research fellow at the Mercatus Center, said that whether or not the community supports government overisight is not the issue.

“The US government has anti money laundering laws and anti terrorism financing laws and they’re going to apply these laws,” he said.

See Brito’s full interview here:

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Henry Sapiecha

gold dollar sign line

BRITO’S FULL INTERVIEW ON BITCOINS HERE ON VIDEO

Currency free of government regulation: A libertarian’s dream and Bitcoin is the answer, some have said. But as the cryptocurrency gains popularity, so do levels of scrutiny.

It looks as if the unregulated Bitcoin market may have hit a snag lately as lawmakers take an interest in establishing some law and order.

Earlier this month a Texas judge ruled that Bitcoins are a currency and are therefore subject to government oversight.

In March the US Treasury issued a set of rules in an attempt to reign in the industry, ordering that Bitcoin business must register with the federal government and adhere to a regulatory regime as all other currencies do. 

Now a US senate committee is investigating the coin and deciding how much of a role the state can and should play.

This week USA Today reported that the Senate Homeland Security and Government Affairs Committee has been questioning government agencies on how they oversee virtual currencies. Responses are due at the end of August.

But the cyrptocurrency community isn’t breaking a sweat. Patrick Murck, Bitcoin Foundation’s general counsel, told USA Today that he found the State’s actions “proactive” and conducive to “productive dialog.”

Meanwhile, the New York Department of Financial Services issued a series of subpoenas in August to Bitcoin businesses. The banking and insurance department wanted to know how the industry was protecting against money laundering and providing customers with protection.

Murck said New York was “trying to set the policy for the entire country,” adding that it is unlikely the state has any jurisdiction in the matter.

Skeptics point to several issues including anonymity, lack of regulation and potential use in black markets. Transactions are difficult to trace and the virtual money is not tied to any sort of bank or business.

The Bitcoin Foundation, a trade organization for the digital currency, has taken the issue head on by attending a meet-and-greet with lawmakers this past week, The Verge reports. The meeting was meant to be educational as Bitcoin representatives explained the technical side of their business to the Fed, the IRS, the FBI and the Department of Homeland Security, among others.

Currently, the Bitcoin camp is split between those who invite regulation and those who oppose it. In a recent interview with CATO Institute, Jerry Brito, senior research fellow at the Mercatus Center, said that whether or not the community supports government overisight is not the issue.

“The US government has anti money laundering laws and anti terrorism financing laws and they’re going to apply these laws,” he said.

See Brito’s full interview here:

SQUARE

Henry Sapiecha

gold dollar sign line

UPDATE: Since the time of writing, the price of one Bitcoin has surpassed $750.

Bitcoin is soaring. The crypto-currency hit the $500 mark for the first time on Sunday – a fifty fold increase in 12 months, according to CoinDesk.

Just a couple weeks ago, you could buy one bitcoin (BTC) for about $250.

There are currently just over 12 million bitcoins in existence, with a total market cap of $5,581,140,286 according to the bitcoin Price Index.

Fans of the crypto-currency see the price rise as a testament to the bitcoin’s resiliency and its legitimacy as a store of value.

In fact, just this week for the first time ever, a mining company fulfilled a transaction using bitcoins.

Despite many setbacks – including an FBI raid of Silk Road, an online black market that used bitcoins – the currency’s “value never fell,” CoinDesk writes.

“Nearly every piece of bad news about individual cases heralded more expectations that bitcoin would pay the price. That it has continued to rise despite these setbacks could well be feeding back and pushing values even higher, as investors sense bitcoin is a more resilient asset than previously thought.”

The Winklevoss twins recently chimed in with their words of encouragement, calling the bitcoin ‘Gold 2.0.’ And they would know – the two have made millions on their bitcoin investment after buying at $9 per BTC.

IS BITCOIN A BUBBLE READY TO BURST..?? BBB-BITCOIN BECOMES BIG.

Bitcoin1

But with such drastic upwards movement, critics are increasingly calling the bitcoin’s success a bubble.

Peter Schiff of Europe Pacific Capital recently told CNBC that a lot of people are buying BTCs because they think the price will go up.

“And the price probably will go up, and it will keep going up until it implodes,” he said.

“I don’t see bitcoins as an alternative to gold,” Schiff noted. “It’s no better than a fiat currency.”

Garrick Hileman, economics historian at the London School of Economics told CoinDesk that it’s too early to tell if this is a bubble. He says that growing media attention and scrutiny from regulators are contributing to the hype, but that if bitcoin wants to go mainstream, it’s going to need more regulation.

“The lack of legal clarity is arguably the single most important issue facing bitcoin right now,” Hileman told CoinDesk. “For example, banks are scared of bitcoin, and reluctance by banks to work with the growing bitcoin ecosystem is a significant barrier to wider adoption.”

SQUARE

Henry Sapiecha

gold dollar sign line

UPDATE: Since the time of writing, the price of one Bitcoin has surpassed $750.

Bitcoin is soaring. The crypto-currency hit the $500 mark for the first time on Sunday – a fifty fold increase in 12 months, according to CoinDesk.

Just a couple weeks ago, you could buy one bitcoin (BTC) for about $250.

There are currently just over 12 million bitcoins in existence, with a total market cap of $5,581,140,286 according to the bitcoin Price Index.

Fans of the crypto-currency see the price rise as a testament to the bitcoin’s resiliency and its legitimacy as a store of value.

In fact, just this week for the first time ever, a mining company fulfilled a transaction using bitcoins.

Despite many setbacks – including an FBI raid of Silk Road, an online black market that used bitcoins – the currency’s “value never fell,” CoinDesk writes.

“Nearly every piece of bad news about individual cases heralded more expectations that bitcoin would pay the price. That it has continued to rise despite these setbacks could well be feeding back and pushing values even higher, as investors sense bitcoin is a more resilient asset than previously thought.”

The Winklevoss twins recently chimed in with their words of encouragement, calling the bitcoin ‘Gold 2.0.’ And they would know – the two have made millions on their bitcoin investment after buying at $9 per BTC.

IS BITCOIN A BUBBLE READY TO BURST..?? BBB-BITCOIN BECOMES BIG.

Bitcoin1

But with such drastic upwards movement, critics are increasingly calling the bitcoin’s success a bubble.

Peter Schiff of Europe Pacific Capital recently told CNBC that a lot of people are buying BTCs because they think the price will go up.

“And the price probably will go up, and it will keep going up until it implodes,” he said.

“I don’t see bitcoins as an alternative to gold,” Schiff noted. “It’s no better than a fiat currency.”

Garrick Hileman, economics historian at the London School of Economics told CoinDesk that it’s too early to tell if this is a bubble. He says that growing media attention and scrutiny from regulators are contributing to the hype, but that if bitcoin wants to go mainstream, it’s going to need more regulation.

“The lack of legal clarity is arguably the single most important issue facing bitcoin right now,” Hileman told CoinDesk. “For example, banks are scared of bitcoin, and reluctance by banks to work with the growing bitcoin ecosystem is a significant barrier to wider adoption.”

SQUARE

Henry Sapiecha

gold dollar sign line

USA Federal Reserve Chairman Ben Bernanke comments on bitcoin

ben-bernanke1

On Monday, US legislators held their first-ever congressional hearing on virtual currencies, in particular bitcoin – the controversial crypto-currency.

As US authorities discussed the pitfalls and benefits of bitcoin – citing concerns over anonymity and lack of regulation – the price of one bitcoin soared to more than $750 apiece.

Monday’s hearing is the first of two being held this week, but no legislative proposals are expected, according to the Wall Street Journal. The purpose of discussions is information gathering.

In a letter dated September 6 but released Monday, US Federal Reserve Chairman Ben Bernanke weighed in. Some have called the letter a “cautious blessing” while others say Bernanke “mostly distanced himself” from the virtual currency.

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Excerpts from Bernanke’s September letter, in response to a letter from the Committee on Homeland Security and Governmental Affairs asking for information on virtual currencies

“Historically, virtual currencies have been viewed as a form of “electronic money” or area of payment system technology that has been evolving over the past 20 years. Over time, these types of innovations have received attention from Congress as well as U.S. regulators. For example, in 1995, the U.S. House of Representatives held hearings on “the future of money” at which early versions of virtual currencies and other innovations were discussed. Vice Chairman Alan Blinder’s testimony at that time made the key point that while these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”

“The Federal Reserve plans to work with other FFIEC member agencies on electronic cash and related issues such as virtual currencies, as needed, for banking organizations. The Federal Reserve will continue to monitor developments as part of its broad interest in the safety and efficiency of the payment system. We also stand ready to cooperate with other agencies in fulfilling their mandates, as appropriate.”

AAA

“Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market. In general, the Federal Reserve would only have authority to regulate a virtual currency product if it is issued by, or cleared or settled through, a banking organization that we supervise. Given the Federal Reserve”s authority and the manner in which virtual currencies have developed, the Federal Reserve has focused primarily on a supervised banking organization’s role in the products’ sale and distribution, as well as the applicable regulations, such as Bank Secrecy Act (BSA) /anti-money laundering (AML) requirements.”

AAA

Henry Sapiecha

gold dollar sign line

 INVESTORS ARE LOOKING AT BITCOINS SERIOUSLY

BITCOINS IN BULK IMAGE www.profitcentre.net

Bitcoin has had the ride of a lifetime this past week, and the investment community has taken note.

Fuelled by strong demand from China and general hype over the crypto-currency, the price of one bitcoin reached nearly $900 mid-week, compared with $12 just last year.

But the currency’s success has sparked a big debate over its actual value, and famed investor Peter Schiff has weighed in, publishing a video titled ‘Gold vs. Bitcoin’ on his YouTube channel on Thursday.

In the video, Schiff explains why Bitcoin is not “gold 2.0” but modern day alchemy.

“While I have a lot of sympathy with what the bitcoin community is trying to acheieve, I just think they have the wrong vehicle,” Schiff says.

“Bitcoins really replicate all of the properties of gold, even improving on some of them, but here’s the problem: They replicate all the properties except the single most important one: Value. Intrinsic value of the metal itself. Bitcoin doesn’t have any.”

Bitcoin vs. Gold as explained by Peter Schiff

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Henry Sapiecha

gold dollar sign line

SO THE EARLY RISERS TEND TO BE MORE PRODUCTIVE & SUCCESSFUL

BNW123

That’s right, early rising is a common trait found in many CEOs, government officials, and other influential people. Margaret Thatcher was up every day at 5am; Frank Lloyd Wright at 4am and Robert Iger, the CEO of Disney wakes at 4.30am just to name a few.

I know what you’re thinking – you do your best work at night. Not so fast. According to Inc. Magazine, morning people have been found to be more proactive and more productive. In addition, the health benefits for those with a life before work go on and on.

Let’s explore 5 of the things successful people do before 8am.

1. Exercise. I’ve said it once, I’ll say it again. Most people that work out daily, work out in the morning. Whether it’s a morning yoga session or a trip to the gym, exercising before work gives you a boost of energy for the day and that deserved sense of accomplishment. Anyone can tackle a pile of paperwork after 200 ab reps! Morning workouts also eliminate the possibility of flaking out on your cardio after a long day at work. Even if you aren’t bright eyed and bushy tailed at the thought of a 5am jog, try waking up 15 minutes early for a quick bedside set of pushups or stretching. It’ll help wake up your body, and prep you for your day.

2. Map Out Your Day. Maximize your potential by mapping out your schedule for the day, as well as your goals and to dos. The morning is a good time for this as it is often one of the only quiet times a person gets throughout the day. The early hours foster easier reflection that helps when prioritizing your activities. They also allow for uninterrupted problem solving when trying to fit everything into your timetable. While scheduling, don’t forget about your mental health. Plan a 10 minute break after that stressful meeting for a quick walk around the block or a moment of meditation at your desk. Trying to eat healthy? Schedule a small window in the evening to pack a few nutritious snacks to bring to work the next day.

3. Eat a Healthy Breakfast. We all know that rush out the door with a cup of coffee and an empty stomach feeling. You sit down at your desk, and you’re already wondering how early that taco truck sets up camp outside your office. No good. Take that extra time in the morning to fuel your body for the tasks ahead of it. It will help keep your mind on what’s at hand and not your growling stomach. Not only is breakfast good for your physical health, it is also a good time to connect socially. Even five minutes of talking with your kids or spouse while eating a quick bowl of oatmeal can boost your spirits before heading out the door.

4. Visualization. These days we talk about our physical health ad nauseam, but sometimes our mental health gets overlooked. The morning is the perfect time to spend some quiet time inside your mind meditating or visualizing. Take a moment to visualize your day ahead of you, focusing on the successes you will have. Even just a minute of visualization and positive thinking can help improve your mood and outlook on your work load for the day.

5. Make Your Day Top Heavy. We all have that one item on our to do list that we dread. It looms over you all day (or week) until you finally suck it up and do it after much procrastination. Here’s an easy tip to save yourself the stress – do that least desirable task on your list first. Instead of anticipating the unpleasantness of it from first coffee through your lunch break, get it out of the way. The morning is the time when you are (generally) more well rested and your energy level is up. Therefore, you are more well equipped to handle more difficult projects. And look at it this way, your day will get progressively easier, not the other way around. By the time your work day is ending, you’re winding down with easier to dos and heading into your free time more relaxed. Success!

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Henry Sapiecha

SO IS BITCOIN AS INFALLIBLE FROM HACKING INTO AS IS THOUGHT, READ THIS

th-Bitcoin1-90x60SHADOW COMPUTER HACKER ON GREEN IMAGE www.socialselect.net

Bitcoin is a decentralised, crypto-currency, free from any government or central bank control (see video). Electronic transactions can be virtually anonymous, with the currency bought and sold at online exchanges.

AAA

Tradefortress, a young Sydney man who told ABC News he was over 18, but only just, refused to give his real name to Fairfax Media.

He offered the wallet service through a website called Inputs.io. The Inputs.io domain is registered to a person with a landline based at a block of flats in Water Street, Hornsby, NSW, according to Fairfax searches.

The site claimed to be ‘‘one of the most secure web wallets on the market’’ and charged customers a small fee to store their coins.

As well as utilising two-factor authentication and location-based email confirmation, it claimed it was set-up to prevent ‘‘the hack of Bitcoins even if the web server was compromised’’.

It now seems that claim has been proven untrue, with Tradefortress telling users on the site: ‘‘I don’t recommend storing any Bitcoins accessible on computers connected to the internet.’’

In an email interview with Fairfax Media, he said he would try to refund some of the hacked money using more than 1000 Bitcoins he personally owned and some not taken by hackers.

‘‘Users are being repaid up to 100 per cent depending on the amount (sliding scale), generally 40-75 per cent,’’ Tradefortress said.

‘‘I won’t have any Bitcoins left after this, except for a small amount of commemorative physical coins.’’

He said the hackers who made off with his customers’ coins were able to bypass the two-factor authentication securing the server hosting them ‘‘due to a flaw’’.

‘‘The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset),’’ Tradefortress said.

Because of the hacking incident, he said some users would probably lose trust in Bitcoin.

‘‘I think that’s likely – we haven’t seen any extremely sophisticated Bitcoin malware, however advanced malware that infects the computer you use to send [Bitcoins] can steal [them] from external hard drives [and the] browser.’’

He said he won’t be reporting the incident to law enforcement because there were ‘‘extremely limited actions’’ it could undertake considering the currency can’t be easily traced.

Many of Input.io’s users were ‘‘quite understanding’’ of what had happened, Tradefortress said.

‘‘I’ve received a lot of comforting support, but there’s also ugly responses. It’s quite different from the reactions of non-customers.’’

The ugly responses were from users who accused Tradefortress of making up the hacking story.

‘‘Some people think I have their money. I don’t and I’m using my personal coins to compensate users, yet there’s some ugly messages I’m receiving.’’

A sad face emoticon now sits at the top of the Inputs.io site, with text telling users that the hacking has ‘‘left Inputs.io unable to pay all user balances’’.

‘‘I know this doesn’t mean much, but I’m sorry, and saying that I’m very sad that this happened is an understatement,’’ the notice says.

A customer wrote on Twitter that they had lost four Bitcoins as part of the heist, worth about $A1216 today.

‘‘I was the victim of part of a $1.2 million Bitcoin hack of an online wallet, inputs.io. If I’m lucky I’ll get my principal back in a refund,’’ wrote Marco Martoccia (@sheet_metal).

‘‘I still have one ninth of my Bitcoin. I dunno how to feel,’’ he added.

Martoccia told Fairfax he was planning on using the Bitcoins as a deposit for a house.

Bitcoin investor Marco Martoccia

‘‘I hope to get my Bitcoins back some day,’’ he said. ‘‘I was [going to] use [them] to buy a house and start a family with my girlfriend in six years.

‘‘Four Bitcoins isn’t a lot, but it was everything to me.’’

Martoccia said he stored his Bitcoins on Inputs.io because he believed it would be safer than storing them on his own computer.

‘‘On the surface it seems safer to keep Bitcoins in a bank [like Inputs.io]. I know people can just hack my computer, so I guess they’re still vulnerable, even in that case. And paper wallets can be plain lost!’

The owner of the Inputs.io domain name, Tradefortress has been traced back to this block of flats at Hornsby in NSW using domain registration records

Ty Miller, director of Australian IT security firm Threat Intelligence, said the underlying problem with online Bitcoin wallets was lack of regulation.

“The users of Inputs.io were trusting a random person with their money rather than in the real world when you’re dealing with cash, where you trust banks to look after your money,” he said.

“They’re more likely to become compromised because they’re not being audited in the same way that those financial organisations are.”

The Rserve Bank of Australia declined to comment.

Miller said there were ways to secure Bitcoins to try to avoid fraud or theft.

“But it’s really at this stage a personal effort to do that.”

He recommended storing coins with a strong password on a device not connected to the internet, using hard-drive encryption and anti-virus.

For extra protection, storing the device in a secure room or safe was also recommended. When it came time to using the Bitcoins online, the amount needed could be transferred to an internet-connected computer, he said.

At the time of writing, one Bitcoin was worth $A309 or $US292.9 – up from around $US50 in mid-March. There are 11,925,700 million Bitcoins in circulation.

Those who invested early in the virtual currency have recently found themselves far better off. A Norwegian man spent 150 kroner ($A28.44) on 5000 Bitcoins in 2009, they are now worth $A1.5 million.

AAA

Henry Sapiecha

gold dollar sign line

SO IS BITCOIN AS INFALLIBLE FROM HACKING INTO AS IS THOUGHT, READ THIS

th-Bitcoin1-90x60SHADOW COMPUTER HACKER ON GREEN IMAGE www.socialselect.net

Bitcoin is a decentralised, crypto-currency, free from any government or central bank control (see video). Electronic transactions can be virtually anonymous, with the currency bought and sold at online exchanges.

AAA

Tradefortress, a young Sydney man who told ABC News he was over 18, but only just, refused to give his real name to Fairfax Media.

He offered the wallet service through a website called Inputs.io. The Inputs.io domain is registered to a person with a landline based at a block of flats in Water Street, Hornsby, NSW, according to Fairfax searches.

The site claimed to be ‘‘one of the most secure web wallets on the market’’ and charged customers a small fee to store their coins.

As well as utilising two-factor authentication and location-based email confirmation, it claimed it was set-up to prevent ‘‘the hack of Bitcoins even if the web server was compromised’’.

It now seems that claim has been proven untrue, with Tradefortress telling users on the site: ‘‘I don’t recommend storing any Bitcoins accessible on computers connected to the internet.’’

In an email interview with Fairfax Media, he said he would try to refund some of the hacked money using more than 1000 Bitcoins he personally owned and some not taken by hackers.

‘‘Users are being repaid up to 100 per cent depending on the amount (sliding scale), generally 40-75 per cent,’’ Tradefortress said.

‘‘I won’t have any Bitcoins left after this, except for a small amount of commemorative physical coins.’’

He said the hackers who made off with his customers’ coins were able to bypass the two-factor authentication securing the server hosting them ‘‘due to a flaw’’.

‘‘The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset),’’ Tradefortress said.

Because of the hacking incident, he said some users would probably lose trust in Bitcoin.

‘‘I think that’s likely – we haven’t seen any extremely sophisticated Bitcoin malware, however advanced malware that infects the computer you use to send [Bitcoins] can steal [them] from external hard drives [and the] browser.’’

He said he won’t be reporting the incident to law enforcement because there were ‘‘extremely limited actions’’ it could undertake considering the currency can’t be easily traced.

Many of Input.io’s users were ‘‘quite understanding’’ of what had happened, Tradefortress said.

‘‘I’ve received a lot of comforting support, but there’s also ugly responses. It’s quite different from the reactions of non-customers.’’

The ugly responses were from users who accused Tradefortress of making up the hacking story.

‘‘Some people think I have their money. I don’t and I’m using my personal coins to compensate users, yet there’s some ugly messages I’m receiving.’’

A sad face emoticon now sits at the top of the Inputs.io site, with text telling users that the hacking has ‘‘left Inputs.io unable to pay all user balances’’.

‘‘I know this doesn’t mean much, but I’m sorry, and saying that I’m very sad that this happened is an understatement,’’ the notice says.

A customer wrote on Twitter that they had lost four Bitcoins as part of the heist, worth about $A1216 today.

‘‘I was the victim of part of a $1.2 million Bitcoin hack of an online wallet, inputs.io. If I’m lucky I’ll get my principal back in a refund,’’ wrote Marco Martoccia (@sheet_metal).

‘‘I still have one ninth of my Bitcoin. I dunno how to feel,’’ he added.

Martoccia told Fairfax he was planning on using the Bitcoins as a deposit for a house.

Bitcoin investor Marco Martoccia

‘‘I hope to get my Bitcoins back some day,’’ he said. ‘‘I was [going to] use [them] to buy a house and start a family with my girlfriend in six years.

‘‘Four Bitcoins isn’t a lot, but it was everything to me.’’

Martoccia said he stored his Bitcoins on Inputs.io because he believed it would be safer than storing them on his own computer.

‘‘On the surface it seems safer to keep Bitcoins in a bank [like Inputs.io]. I know people can just hack my computer, so I guess they’re still vulnerable, even in that case. And paper wallets can be plain lost!’

The owner of the Inputs.io domain name, Tradefortress has been traced back to this block of flats at Hornsby in NSW using domain registration records

Ty Miller, director of Australian IT security firm Threat Intelligence, said the underlying problem with online Bitcoin wallets was lack of regulation.

“The users of Inputs.io were trusting a random person with their money rather than in the real world when you’re dealing with cash, where you trust banks to look after your money,” he said.

“They’re more likely to become compromised because they’re not being audited in the same way that those financial organisations are.”

The Rserve Bank of Australia declined to comment.

Miller said there were ways to secure Bitcoins to try to avoid fraud or theft.

“But it’s really at this stage a personal effort to do that.”

He recommended storing coins with a strong password on a device not connected to the internet, using hard-drive encryption and anti-virus.

For extra protection, storing the device in a secure room or safe was also recommended. When it came time to using the Bitcoins online, the amount needed could be transferred to an internet-connected computer, he said.

At the time of writing, one Bitcoin was worth $A309 or $US292.9 – up from around $US50 in mid-March. There are 11,925,700 million Bitcoins in circulation.

Those who invested early in the virtual currency have recently found themselves far better off. A Norwegian man spent 150 kroner ($A28.44) on 5000 Bitcoins in 2009, they are now worth $A1.5 million.

AAA

Henry Sapiecha

gold dollar sign line

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