Weekly Bitcoin Update – 7 September 2014

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Posted by: DeepDotWeb

September 7, 2014

A recap of the week’s biggest Bitcoin stories from the perspectives of the best sources for e-currency news around the web

Donna Leinwand Leger of USA Today reports that Charlie Shrem, the former chief executive officer of BitInstant.com, has plead guilty to assisting the sale of $1 million bitcoins on Silk Road, a web site which was used as a marketplace for contraband and drugs. Although Shrem is currently facing up to five years of prison, taking the plea deal helps him to avoid charges related to money laundering and potential violations of the Bank Secrecy Act. Silk Road dealer Robert Faiella also plead guilty to charges on Thursday.

More and more Canadian employees are asking to receive their wages paid in bitcoin. According to Anthony Cuthbertson of International Business Times, Wagepoint, an Ontario-based firm, introduced a scheme to pay individuals in bitcoin last November. Since then, ten additional companies have implemented an option to pay employees in bitcoin.

The Canadian Press at CBC News also notes that Wagepoint has received five inquiries from US companies regarding the payment option. To maintain tax compliance in Canada, Wagepoint CEO Shrad Rao noted that the employees are still being paid Canadian dollars on paper.

The winners of the Massachusetts Institute of Technology’s BitComp contest have been announced. As Dennis Keohane of BetaBoston reports, a grand prize of $5,000 was awarded to MIT Media Lab graduate students Guy Yskind and Amir Lazarovich for their “Ethos” project. The decentralized network facilitates the “storing and sharing of personal data.” Ethos, which also received support from Bitcoin entrepreneur Oz Nathan, could potentially enhance cryptocurrency security.

Newegg.com, a company which has consistently been seen as a large supporter of the cryptocurrency, recently stated that saving one’s bitcoin is not a smart idea. Citing bitcoin’s associations within black markets and other illegal schemes along with its fluctuating value, writer Ivan B. recommended that individuals spend, as opposed to saving, their cryptocurrency. Moreover, the marketplace also cited that the future of bitcoin is directly tied into its usage on online marketplaces.

According to Andrew Quenston of CryptoCoins News, the United Kingdom’s Chancellor of the Treasury, George Osborne,of the Treasury is set to reports series of Bitcoin measures as part of the Treasury’s budget proposals for the 2015 fiscal year. Quenston details that the United Kingdom has been one of the largest supporters of bitcoin, as the Chancellor wishes to see London become “the FinTech capital of the world.” The United Kingdom’s government itself has also declared that it hopes to turn the UK into “the destination of choice for setting up a FinTech company.”

Bitcoin exchange brokers are now completing over-the-counter transactions to change out their bitcoins for fiat currency. As Joon Jian Wong of CoinDesk reports, brokers like Jonathan Harrison of Satoshipoint are offering OTC bitcoin transactions with a 5% fee per trade. The benefits of completing such trades are speed and privacy, as investors would not have to send their data to a large exchange.

Whole Foods Market customers can now purchase food using bitcoin. Andrew Moran of CoinBuzz writes that although visitors of the grocery store cannot directly use the cryptocurrency at the store, they can purchase gift cards using bitcoin through EGifter. Additionally, customers can also use bitcoin to acquire gift cards for Domino’s Pizza, The Home Depot, Cracker Barrel, and IHOP.

Vox.com’s Mishap

Vox.com recently encountered the conflict of interest that comes with simultaneously investing and writing about bitcoin. According to Erik Wemple The Washington Post, Vox senior editor Timothy B. Lee’s posting both outlined his decision to invest in the cryptocurrency while highlighting why readers may be interested in making a cryptocurrency investment themselves. This posting caused a rather vocal backlash on social media, where readers argued that the article could be seen as attempting to inflate the value of bitcoin, which would in turn improve the financial benefits of Lee’s own investment.

Vox editor Ezra Klein, a regular contributor to Bloomberg News and The Rachel Maddow Show on MSNBC, stated that allowing Lee to invest in the cryptocurrency was the wrong decision. Klein stated that he had an issue categorizing bitcoin investments, but decided to allow the publishing of the story based upon the fact that “buying, holding and selling Bitcoins is, itself, part of the Bitcoin story.” Upon realizing the conflict of interest in Lee’s story, Klein stated the posting of the article was his fault and apologized. Lee will be selling the bitcoins he purchased and any proceeds from the sale will be going to charity.

Updated: 2014-09-07