Bitcoin cred boosted by $25m cash infusion into Coinbase

The Bitcoin sector has been given a new boost of confidence following a $25m investment by famed Silicon Valley venture capital firm Andreessen Horowitz. The firm said that it would take a stake in Coinbase, a San Francisco startup that specializes in managing Bitcoin wallets and facilitates transactions between customers and …

[Chris Miller]

As usual, the best way to make money in a gold rush is to get into the pick and shovel business.

[Anonymous Coward]

Or to be sitting on land that was worthless before the rush, and selling it off at the peak.

[Matt Bryant]

Ah, venture capitalists....

.....never wrong with their Bubble 2.0 predictions, right? Er... Except with Pets.com..... Or Procket..... Or Amp'd..... Or Sun.....

[Anonymous Coward]

Wait until China outlaws the stuff

Half of the bitcoin buying and selling is done in China, by speculators and people who do not trust their government. Unfortunately, the Chinese government happens to be one of the few who can actually stop its citizens from doing unwanted things on the internet; so the day they decide that bitcoin is a threat, they can remove half the demand for it in a day.

…Why yes, I wish I had bought some one year ago. Why do you ask?

[DavCrav]

Re: Wait until China outlaws the stuff

I think Britain could get very close to outlawing Bitcoin with its web-blocking tools, if it felt the need to. Bitcoin is fine, but the choke points are where you convert it into cash. Block those, and you get rid of the ecosystem.

[JimmyPage]

That's if you convert it to cash

I have just spent my Bitcoins to buy stuff. No conversion needed. How can UK plc prevent people buying stuff with bitcoins ? Wait till people on eBasy start using them. Remember Virgin Galactic recently accepted $200,000 worth of Bitcoins.

[mike2R]

Re: Wait until China outlaws the stuff

"Bitcoin is fine, but the choke points are where you convert it into cash. Block those, and you get rid of the ecosystem."

I'm not sure it would be that easy. How do you stop a UK citizen making an online purchase/sale in another country where it is perfectly legal transaction? And Bitcoin is readily changeable to and from other virtual currencies (eg the ones used in MMO computer games). It would be a very tall order.

Going after large transactions with anti money laundering/proceeds of crime legislation perhaps. But criminals with large amounts of money can be a resourceful lot.

[JustWondering]

I dunno

This sounds like an ePonzi scheme to me

[Securitymoose]

Re: I dunno

It'll all end in tears, I just know it!

[DaveyG]

Re: I dunno

Coinbase have no postal address on their website & in my experience they don't answer support emails. If they went out of business tomorrow or were hacked you would loose all your money & would have no way to communicate with them. I'd be cautious with them.

[Anonymous Coward]

Isn't this the same bunch

that were promoting the FaceBook float?

[Sheep!]

"while banks in China condemned Bitcoin as an enabler of criminal cash transactions freedom of commerce and a way to circumvent government oppression"

There, I fixed it for you.

[Anonymous Coward]

Its going to take a lot of transaction fees to repay that 25Mil, even more to give the 10 to 1 payout that VC hope for.

[John Tserkezis]

This is a good thing.

After all, someone is going to need to manage those bitcoins when the system crashes and self-implodes into the bits it was once made of.

[dajames]

Why it it even allowed?

At best, the process of "mining" bitcoins is a computationally expensive calculation that offers no benefit to man nor beast (apart from possibly gaining a bitcoin for the person doing the mining). This essentially wastes energy. People are buying dedicated hardware that can only be used to perform the sorts of calculations that are used in mining bitcoins, this is a waste of energy and raw materials.

It could be worse, though. Bitcoin mining involves "reverse hash" computations, that is, essentially, using brute-force to find a message that has a particular cryptographic hash. The dedicated ASIC devices designed to accelerate bitcoin mining compute cryptographic hashes very quickly and could be used to find collisions in the hashes of digital signatures. That is: they could be used to find a way to alter the content of a signed message in such a way that the signature remains valid - making the falsification of signatures merely very difficult, rather than computationally infeasible. Criminal uses of such a device are obvious.

If I were a conspiracy theorist I'd suspect that the inventor of Bitcoin was a criminal mastermind who had found a way to persuade others to develop and build custom hardware that he could use to commit digital signature fraud, and I'd wonder how many of those who think they're actively mining bitcoins are actually part of a massive botnet with a particular talent for cracking digital signatures - that'd potentially pay far better than mining bitcoins.

Evil mastermind icon required ...