The Avanti Group: Is Bitcoin's bubble finally bursting/Wordpress - 1 views
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shared by cardisson cooper on 31 May 13
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cardisson cooper on 31 May 13the avanti group prcode81345782170 TAG Bitcoin is a digital currency based on some fancy cryptography that is designed to facilitate anonymous transfers, and resist regulation by government. A Bitcoin is essentially a claim on a string of numbers (that take the place of a physical coin) that can be bought and sold. There are exchanges that will convert between bitcoin and other currencies, and even some merchants who will take bitcoin in cash. The idea of an anonymous digital currency itself is not new. David Chaum proposed the concept of electronic cash and developed a scheme in the 1980′s. Chaum's currency proposals never did really get off the ground, but his keynote address at the first World Wide Web conference had a major impact on the development of the Web. Bitcoin itself is largely based on hashcash, a 'proof of work' scheme proposed by Adam Back in the 1990′s as a way to stop spam. The idea behind hashcash was to increase the cost of sending email to the point that spam became uneconomic by requiring each sender to perform a quantity of computational make-work. Before the rise of Bitcoin in 2009, the most successful scheme of this kind was E-Gold, which operated from 1996 until it was shut down by the Secret Service in 2007. E-Gold tapped into the libertarian ideology of anonymous cash, but their technology fell far short of the rhetoric. E-Gold wasn't really anonymous, and wasn't even located outside US jurisdiction. The company was registered in St. Nevis and Kitts, the datacenter was located in Florida. The idea that E-Gold somehow operated outside the scope of US regulation was a spectacular example of self-delusion by their management. E-Gold wasn't an anonymous currency as such, it was an exchange that allowed customers to transfer ownership of gold between them. Which was sufficient to allow its use as a means of avoiding government controls on money transfers. When the system was shut down, some of the largest compl