Bitcoin's price rose 39% in the three months to June 30, boosted by a seemingly stabilising regulatory situation in China, and interest from big name companies such as Expedia and Apple, according to a report on the virtual currency.
The State of Bitcoin Q2 2014 from CoinDesk takes a detailed look at the world of bitcoin. CoinDesk describes itself as an independent publisher covering news, prices and information on bitcoin and other digital currencies. The report acknowledges that although bitcoin's price rose 39% during the June quarter, it's still down 16% year-to-date.
The report comes with MyBitcoinSaver, which describes itself as the simplest way to acquire bitcoin, holding a New Zealand launch party on Friday, and the Australian-based igot.com, which says it's the number one digital currency platform in New Zealand based on trade volume, announcing US entrepreneur and co-founder of Tremor Video, Jesse Chenard, as a "major" investor and advisor.
The CoinDesk report says US$240 million has now been invested in bitcoin startups since 2012, with US$150 million, or 63%, of this in 2014.
CoinDesk also notes about 63,000 businesses now accept bitcoin, and says there are 5.3 million bitcoin wallets, up from 765,039 a year earlier. It also points to the use of 136,152 unique bitcoin addresses used per day up from 41,271, and 48 venture capital based start-ups versus seven a year earlier.
On the regulatory front the report notes a May Reuters report on a task force of US state regulators working on the first bitcoin rule-book.
The report also notes there are now 250 bitcoin apps on Android and 340 iOS (Apple) apps. CoinDesk says bitcoin represents 93% of the total cryptocurrency market capitalisation (at US$8.3 billion), and cites the likes of bitcoin-linked debit cards and insured wallets as making the currency easier to be used and trusted.
CoinDesk also suggests bitcoin is 4,070 times cheaper on a US$200 transaction than a typical remittance transaction, based on World Bank remittance prices, at less than half a US cent versus US$16.28.
In a speech earlier this month Reserve Bank deputy governor and head of operations, Geoff Bascand, said low cost virtual currencies such as bitcoin could ultimately replace cash if key attributes of trust and anonymity can be reliably and sustainably attained.
Bascand's speech followed the Financial Action Task Force (FATF), an inter-governmental body established by the Group of Seven that sets policies and standards on anti-money laundering and combating terrorist financing, highlighted the money laundering and terrorism financing risks of virtual currencies. FATF did also say, however, that virtual currency has the potential to improve payment efficiency and reduce transaction costs for payments and fund transfers.
The charts below are taken from the CoinDesk report.
The full report can be viewed here.
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22 Comments
"In physics you’re playing against God, and he doesn’t change his laws very often. In finance you’re playing against God’s creatures, agents who value assets based on their ephemeral opinions. They don’t know when they’ve lost, so they keep trying."
Thanks for the article Gareth, I try and keep up with virtual currencies.
This troubles me
http://www.businessinsider.com.au/today-bitcoins-doomsday-scenario-arri…
http://www.mercurynews.com/business/ci_25978855/bitcoin-miners-dominant…As soeone who has been kicking around the cryptocurrency for a few months, I'd just like to take a moment to remind the curious, cryptocurrencies are _very_ much caveat emptor.
Much of the cryptocurrency world plays by rules a bit different to those that keep you safe in the fiat currency world, do your research carefully, don' take anyones' word for anything.
The biggest value property behind the crypocurrencyies is _Promotion_ (aka spin), so just be very careful of what you read and who you believe.
When you can earn $16USD over several monthsby running your PC 24/7/365 "mining" for a cost of electricity in the order of $120 for the same period. Well you are not alone in thinking it makes no sense.
if nothing else what "good" does it actually produce? nothing...a string of 1s and 0s backed by nothing but some ppl think are valuable.
OMG....
regards
You mine in "pools". A bit like people taking office pool lottery tickets.
you can get more lines/tickets, but you have to share the winnings.
Normally there's a central computer or computers which run a system/program known as "Stratum"
Stratum works out what speed you're processing, and sends out pieces of blocks to each users' computer to chew on. The faster your own processing, the bigger the blocks and the faster you can get them, but slower machines get smaller blocks, so most of them finish in a similar time frame, so less duplicates. The faster guys tend to hit more often with the odds in their favour, and there's usually a bonus for hitting paydirt, but at least the smaller machine still gets a small share...and a small chance of actually hitting a winning combo.
the combined processing power is so impressive that they have had to significantly increase the difficulty of the matching process (they pad the target hash with "0"'s, the more bits, the longer the target hash, the mroe combinations the computers have to churn through to find the hidden successes, the longer it takes.) That's how they control the speed of coin introduction - otherwise a few fast computers would solve the majority of the hashes in hours or days (inctead of several years) and thus be rewarded all the coins straight away. By trickling in the rate of which coins are allocated, it gives value in their trade.
Also many of the earlier algorythms have been coded into specialist chips (ASIC's). So only by investing thousands of fiat currency into a specialist machine does a miner have any chance of reasonable return.
Recent alternative coins (aka altcoins) try to deliberately use code and algorythms that are prohibitively difficult to program into those specialists chips. That means there's a wider (if shallower) pool of miners and traders using modern computers. although the self-adjusting difficulty level kind of offsets much advantage in extreme equipment
The pools, and share of the prize; plus fractions intrduced during trading, that creates parts of coins.
Although to be truthful, there is only ever 1 "coin". It's hard coded into the algorythm from the start when the develop that coins code. They say there's ... eg 100,000,000,000 interestco coins. but all that is really, is that in the total number of possible cycles, the system will insert a "lottery ticket" new coin nounce , and payout is a fraction of that 100,000,000,000 available.
Watchout kimy, some department (or politicians) will decide enough is enough and introduce a raft of CGT, stamp duty, land tax, landlord tax, local council tax, etc.. You should take your profit on your investment properties and run (to some tax-free island. ie. Vanauatu)
sure he has profited in fiat currency, what has he been trading in exchange for the bitcoin?
I don't see how it's any different to trading in stocks and shares, or used furniture on trademe, i might not be holding any fiat currency at any given point in time, but that doesn't mean i haven't made a profit or loss on each transaction.
buy 100 bitcoin for 60000, sell for 60500, wait for it to drop, buy again 100 for 59900... at this stage you have NZ$500 profit. Do day traders have to pay tax on unrealised gains? Like if the current market value is 61000 for that 100 coin i bought for 59900
The bticoin, like the metals I have, don't show a NZD profit. The price could go to 1 million NZD, and yet it's the same code or metal. The profit only arises only if I realise it (and which point it would be USD or NZD...and fiat and taxable with known value), or if I find someone who is willing to accept it as security but then it's dubious whether it has actually gained value.
That's why I disagree with charging profit on unrealised shares.
It's why I do pay tax on the equity change per annum on my forex trading. (it's clear fiat cash).
One of the difficulties with Bitcoin (BTC) or with intrinsic/commodity valuemetal, is to actually pay tax on it, or do _anything_ with it, you have to actually find a trader who will accept it. Even the gold I have, which is tender in NZ, doesn't have a set value; so the person does have to accept it in payment for a debt by law, but they don't have to agree on my valuation, or even my assay ! (and they do have the right to pass on postage and assay and interest costs) so while the "market" might say your 100 BTC coin is worth 61,000 NZD, it is very likely you'll never get that for it, certainly not in an on-demand/to-the-market sale...so jsut how much should you be paying taxes on? Some theoretical value? or the real value? Keeping in mind, no-one is ethically out of pocket if you don't pay until realisation.
Also not sure what he paid for his cryptocoin. If he got in early enough, he could have just mined it.
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