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The digital currency Bitcoin has a dedicated following, regularly makes headlines and inspires countless investors to consider making digital currency part of their portfolios. Yet it enjoys the backing of no government or third-party entity like a bank, and it can be hard to understand where its perceived value comes from. So, you may be asking, what makes bitcoin valuable? Fundamentally, bitcoins derive their value just as anything else does: because people want them. Like any other currency, bitcoin follows the basic rules of supply and demand. Currencies have always been useful tools to make trade easier, enabling holders to convert goods into a widely tradable commodity through sale, then use the proceeds of that sale to purchase nearly anything they wish. While fiat currencies derive value from the governments that back them, currencies like gold are valuable in and of themselves. Currently, bitcoin isn’t like other currencies in that it is not universally

If you are thinking through the process of accruing bitcoins, you may be wondering where to keep them once you’ve done so. After investing time and resources into the digital asset, can you be sure they are locked safely away for when you want to use them? In truth, bitcoins aren’t “stored” anywhere. As a purely digital entity, it is not as if they are held in bank vaults or stuffed under mattresses. They are accessible through Bitcoin addresses, which require a set of digital keys for entry. So, the question of how to securely store bitcoins comes down to the security of these keys. Every Bitcoin address has two keys: a “public key” and a “private key.” Bitcoin addresses are derived from public keys, and these Bitcoin addresses are shared. Think of it like sharing your email address with someone: they can send you an email but can’t get into your inbox to read your mail. Similarly, nobody can get into a wallet and take bitcoins from it with a public key; it can only b

With a firm understanding of what Bitcoin is and how bitcoin wallets work, chances are that you’re interested in getting some of the digital currency for yourself. The question is: How can you get bitcoins? Based on an understanding that bitcoins originally come from mining processes, you might think this is the best way to get some for yourself. Sadly this has become increasingly difficult as Bitcoin has grown in popularity. As more powerful, mining-specific devices have been introduced and the number of bitcoins out there to be mined has fallen, it is becoming increasingly unrealistic for average individuals to participate. Another way to get bitcoins is to earn them like you would any other currency: by providing goods or services in exchange for the digital currency. There are websites that list offers for jobs that pay in bitcoins, rather than traditional currency. You can also ask your current employer to pay you in bitcoins, which can be a good option for

Tax season can be confusing enough with complicated rules about what types of income are taxable and which are not; what can be written off and what can’t; and which assets need to be listed and which do not. Add to that the confusion around digital currency and its status in the eyes of governments, and there are bound to be questions about how Bitcoin relates to taxes. In the United States, for example, “taxable income” encompasses anything received as payment for goods and services. There is no reason that this would exclude payment in bitcoin. Bitcoin received from another person in the exchange counts as gross income, which is subject to income tax. Bitcoin earned through trade or by running a bitcoin exchange could fall under the “capital gains” category, like gold, and will be taxed. Bitcoins that are mined are counted as income received from the act of mining and are taxable with the expenses accrued (such as computing power) being deductible. When miners s

The wild world of Bitcoin is about to get a whole lot wilder.  On August 1, 2017, the preeminent cryptocurrency is set to break in two. Two warring factions, fundamentally divided on Bitcoin's future, are coming to a head — and the impending split could either save Bitcoin or doom it. The split, called a hard fork, will result in two separate and distinct cryptocurrencies:  Bitcoin Cash  and  Bitcoin Core . Oh, and it also has the potential to create billions of dollars worth of new cryptocurrency out of thin air.   But that's not what this is really about. Bitcoin as it currently stands is in trouble, and with so much money on the line opposing parties have naturally come forward with plans to save it. And, surprise, they all don't agree on the solution.  That resulting disagreement is set to play out in full force at  5:20 a.m. PT  on August 1 with the launch of the Bitcoin Cash protocol, and many in the Bitcoin community have no choice but to hold their breath and w

Victims lost $1.33 billion to cyber criminals in 298,728 cases, with hackers stealing and extorting $28.3 million in cryptocurrencies in 2016. On June 22, the Federal Bureau of Investigation presented its annual  Internet Crime Report  for the year of 2016. The FBI analyzed the victim reports at the  Internet Crime Complaint Center  (IC3) and used the information from their database to publish the annual study. It is important to mention that, according to the Department of Justice’s research, only an  estimated 15 percent  of the U.S. fraud victims reported their crimes to law enforcement. The FBI highlighted multiple “hot topics” regarding internet crimes for the year of 2016. This included Business Email Compromise (BEC), which resulted in the loss of $360 million from victims, currently standing in first place in the category of most damage caused. BEC is a sophisticated scam targeting companies working with international or foreign businesses or suppliers who conduct wire

Digital currency practices have exploded in recent months, bringing to the forefront new regulations. This means VC investors looking to get a piece of the action need to do further due-diligence and remain informed on the legal side. According to  Inside Bitcoins , last year two Bitcoin and blockchain-related startups raised over $1 billion in total investment. This is a massive increase from the $347 million invested in the space in 2014. So what are the latest issues around cryptocurrencies? How will the recent  SEC announcement  impact investors? Bob Graham, partner and head of the digital currency services practice at  Friedman LLP , has been receiving inquiries from both Bitcoin and blockchain-related firms and investor funds asking for audits and advice. Graham tells  Bitcoin Magazine  in an exclusive interview what VC investors should be aware of and how Bitfinex recently engaged Friedman to assist with an audit. What issues are VCs facing related to digital currency? The

August going to be a huge month in bitcoin history. Bitcoin, the largest cryptocurrency on the internet, is currently at a crossroads. Before August 1, the powerful users who “mine” the currency with souped-up PCs will have to choose whether or not to apply BIP 91, a set of software code to the bitcoin’s bedrock, known as the blockchain — a chronological public ledger that documents every transaction of the digital currency. While the miners currently seem to be in favor of the update, the controversial decision on how to update the cryptocurrency’s technology has driven a rift between several groups of users, leading many to speculate that at some point, the technology will “fork.” But  the concept of a fork  is complicated, and involves everything from the specific technology applied to bitcoin to the foundational philosophy behind the cryptocurrency. Here are five things you need to know about a possible bitcoin fork. 1. What is a bitcoin fork? In financial terms, a fork means r

A fork could change the equation for thousands of bitcoin users. The biggest, newest fear for bitcoin investors and users is a fork. In financial terms, a fork isn’t for eating — it represents a split in the currency that could significantly destabilize the cryptocurrency’s value by splitting it into two completely different currencies — “bitcoin classic” and “bitcoin current.” Right now, bitcoin’s price has been rising, but come August 1, there’s a small chance its future could change forever. So when will Bitcoin fork, and what does that mean for the future of the currency? The answer is a bit complicated. To understand it, here’s a rundown of the central problem facing bitcoin and the various ways its software-savvy community is trying to fix it. The problem Bitcoin has one central problem — it’s slow as heck. The world’s leading cryptocurrency is crippled by its meager ability to facilitate a mere seven transactions per second. As more and more people buy in and adopt the cry

Image caption"Accepting cryptocurrencies broadens my client-base," says Eleesa Dadiani Why is the art world getting excited about digital currency Bitcoin and its underlying technology blockchain? Eleesa Dadiani owns and runs an art gallery in London's famous Cork Street. She was born in Georgia in the Caucasus and was "breastfed by gypsies". But she is also a passionate believer in the power of Bitcoin and other digital currencies. When we meet she is busy preparing for an exhibition of sculptures made from the exhausts of former Formula 1 racing cars. One of these strange rib-cage-like creations made from the super-strong alloy inconel has been gold-plated and will sell for about £35,000. "These are pieces of history," she tells me. In a first for the tradition-bound art world of Cork Street, her international clientele will have the opportunity to pay using Bitcoin, the digital cryptocurrency underpinned by blockchain technology. The galle

A number of Japanese banks are reportedly set to test domestic fund transfers using digital currencies over a blockchain as a low-cost alternative to traditional money transfers. According to a Thursday report by  Nikkei , Japan’s most prominent financial publication, a handful of major Japanese banks will perform tests to determine if a digital currency powered blockchain platform could prove a viable alternative for the current national payments clearing platform ‘ Zengin ’. Operated by the Japanese Bankers Association, the Zengin System powers domestic money transfers in Japan. The restrictive traditional system typically offers money transfers between 8:30 AM and 3:30 PM in the country. The banks are a part of a consortium of Japanese banks led by SBI Holdings and  SBI Ripple Asia , which sees over 50 members its payments consortium. However, the report reveals that only a handful of banks are participating in the test using virtual currencies, of which Ripple’s XRP is a conten

Can Bitcoin help people break out of poverty? What if we could build a financial system with Bitcoin that would lead to a  more equitable and fairer society ? Bitcoin has been around for nearly a decade now and it has survived many doomsday predictions regarding its demise. It has grown to become an accepted medium of transferring money, it has also been recognized as a currency in some countries like Japan. Why is the existing system broken? The present financial system is supported by  large-scale financial institutions  that provide financial services. This means banks, insurance companies, credit card companies, housing finance companies, money transfer companies etc. The problem is that while these businesses have existed for a long time, accessibility has always been an issue. According to the world bank, two bln people still do not have access to a bank account. Yet this present financial institution based payment system is stuck in an archaic era. People are expected to u

Contrary to most claims, Segregated Witness (Segwit) doesn’t necessarily require users to manually upgrade their systems or wallets in order to receive Segwit transactions. The activation of Segwit does provide notable changes to the layer one of the bitcoin network and as a result, wallet platforms will be required to alter their applications pertaining to the changes made by Segwit to the bitcoin protocol. For users of major bitcoin wallet platforms which already are Segwit-ready such as Blockchain, Coinbase, Copay, Ledger and Keepkey, upon the activation of Segwit, they will be able to receive Segwit-enabled transactions. // Let us help you become financially independent. Read exclusive stories, bitcoin analysis, and tutorials. Use the coupon code "CCN5" and get $5 off. Join  Hacked.com  now. // According to David Harding, the co-author of the Bitcoin.org developer documentation, users will be automatically introduced to Segwit-enabled versions of wallets, wallet addre

Offered its status as the original blockchain protocol, it must be no shock that bitcoin has prolonged dominated the digital currency markets. In terms of  marketplace capitalization , it dwarfs other cryptocurrencies. Its first-mover status and widespread adoption has (so far) provided bitcoin the dual advantage of network result and steep barriers to entry, retaining choices at bay. But there is proof that this longstanding narrative could be shifting. Latest infighting in bitcoin’s development local community has provided a uncommon opportunity for options to stress their worth propositions and even assert new ones (like getting a hedge in instances in which bitcoin’s potential would seem uncertain). This has led to an exciting, observable trend. While the complete pie of the cryptocurrency marketplace keeps developing more substantial, bitcoin’s slice is getting to be smaller sized. one. Bitcoin’s dominance decline The clearest illustration of bitcoin’s network result is the

Bitcoin has swatted away the distraction of a failed attempt to establish a bitcoin exchange-traded fund (ETF) by the Winklevoss twins to supersede its levels prior to the SEC ruling on Friday. On Monday, bitcoin price reached a high of $1,249 at the time of publishing on the Bitstamp Price Index (BPI). It was an eventful and dramatic Friday for bitcoin. Having flirted with $1,200 through most of Thursday, bitcoin price began trading above the milestone on Friday. Anticipation turned to excitement in the lead-up to the decision as frenzied trading pushed bitcoin to an  all-time BPI high of $1350 . The SEC’s  refusal to approve the Winklevoss’ bitcoin ETF predictably led to a rapid sell-off, as bitcoin price  sunk to a low of $975  in a ten-minute period from $1,288. From its all-time high to a new 30-day low, bitcoin has lost nearly 28% in value. In the aftermath of the decision, price resurfaced above $1,100, finding new support. // Let us help you become financially independent. R

byMichael Scott The Republic of Ireland, as it is officially referenced, has a population of 4,757,976 according to the 2016 census. The county’s economy grew a respectable  5.2 percent last year — a rate that exceeded all other euro zone countries and most official forecasts for the third successive year. It is the country’s ascension, though, as an epicenter for blockchain innovation in Europe that is garnering attention. Highlighting this was the  blockchain hackathon event  that took place in November of 2016 at Dublin City University. It attracted more than 150 technologists and fintech entrepreneurs, collaborating together on the creation of new apps and services using blockchain technology. Last year also saw  Travacoin , an Irish startup, achieve acclaim for its work on a blockchain-based voucher system that facilitates a refund and compensation system for delayed and canceled flights. In early 2017, global consulting firm Deloitte, which works with 90 percent of the world

Bitcoin  and  digital currency  are exciting new areas of business and finance, and an ideal target for anybody looking to break into the tech industry or change career paths. The revolutionary potential of digital currency is only just starting to be fulfilled, meaning that there is a huge range of opportunities for businesses to take advantage of. But because of the fact that it is so new and different, there is also a huge shortage of knowledgeable, experienced and skilled professionals able to take on the challenge of helping businesses to capitalize on the potential of Bitcoin and digital currency. All of which means that this is an ideal time for tech savvy workers looking to get a job in Bitcoin or other digital currency related companies. If you are a digital currency enthusiast with a bit of knowledge about the industry, and any transferable skills such as in marketing, journalism, business admin, or actually writing programming code, then you can expect to command a great s

For nearly the past two years, various alternatives to Bitcoin Core have attempted to increase Bitcoin’s  block  size limit via  hard-forking changes  to the codebase run by nodes on the network. While manageable capacity increases are desired by many Bitcoin users, the complications associated with hard forks have left the network unwilling to adopt an increase to the block size limit. A hard fork requires every economically-relevant Bitcoin full node (or at least nearly all of them) to upgrade to a new network, while a  soft-forking change  is backwards compatible. As illustrated by  Ethereum’s hard fork to bailout DAO token holders , contentious hard forks can be difficult to pull off. Of course, a sufficiently contentious soft fork could also lead to users hard forking away from the current group of miners in an effort to opt-out of that particular version of Bitcoin, which could potentially lead to two different versions of Bitcoin continuing to exist (similar to