This week, PayPal signing on with BitPay, Coinbase, and GoCoin really takes the cake as it paints an interesting future for the mass adoption of Bitcoin. While the PayPal partnership does not mean that PayPal users will receive or store bitcoins, it does mean that merchants who use PayPal can allow their customers to pay them using bitcoin, which opens up a huge audience of merchants to offering products for bitcoins.

The PayPal announcement also appears to have given the Bitcoin market price a significant boost, almost erasing the loss after the Alibaba IPO on Friday. Questions surrounding the effect the public offering of the Chinese e-commerce giant.

The FTC has taken Butterfly Labs to court and shut down the Bitcoin mining machine vendor’s operation over an investigation of consumer complaints.

And, almost lost in the other news, BitPay is offering a new, security-upgraded Bitcoin API to developers that provides a number of new features, including refunds and automated billing.

PayPal enters the Bitcoin ecosystem

This week saw a milestone in the adoption and legitimacy of Bitcoin when e-commerce giant PayPal announced a partnership with BitPay, Coinbase and GoCoin. This partnership allows merchants who use PayPal to also accept Bitcoin payments via the three different processing services.

This partnership does not mean that people can hold bitcoins in their PayPal accounts, the partnership only permits merchants to allow bitcoin as a type of payment (to be processed through one of the three partners.) PayPal published the full details of the integration with the PayPal Payment Hub in the announcement on PayPal’s community blog site.

http://bitcoinity.org/markets on 9/24/2014

The news of the PayPal partnership had a direct, positive effect on the Bitcoin market value causing it to peak at $450 bringing it up from around $398.89. At time of publication Bitcoin market index is hovering around $427. This leap in price negates most of the drop that occurred up-to and after the Alibaba IPO, which is suspected as the cause of last week’s $42 fall in price.

Alibaba IPO causes downturn in Bitcoin market value

The PayPal announcement on Tuesday may have caused a bump in the market value of BTC, but Friday say a sudden crash, as noted above. As reported on SiliconAngle, the market value of Bitcoin had been falling for weeks and then tumbled almost $42 after the announcement of the IPO of Alibaba Group Holding Limited, a Chinese e-commerce giant.

This coincidence has led to speculation that a number of Chinese investors had shifted their money from Bitcoin to Alibaba as part of the public offering—dubbed one of the largest in Wall Street history. As China is long thought to be behind the boost that pushed Bitcoin market value above $1,000 in late 2013.

Speculation is still rife, even as the price of Bitcoin recovers; but thoughts from members of the Bitcoin system see the fluctuations as people seeing value in the currency and the technology.

“The price of Bitcoin has been fluctuating since its peak in December,” Charles Allen, CEO of Bitcoin Shop, told SiliconAngle, “but what remains consistent is the belief that there is value in the digital currency.”

He was quick to add that when the price becomes volatile, especially when it declines, the community and investors alike connect the change to a multitude of reasons. The Alibaba IPO occurred alongside a brunt of negative financial press about Bitcoin within a short timeframe.

FTC shuts down Butterfly Labs over consumer protection

After numerous complaints to the Federal Trade Commission the feds have finally taken Butterfly Labs, Inc. to court. Butterfly Labs is a well known ASIC Bitcoin miner vendor that has constantly been in the news for controversial delivery practices and its mistreatment of customers.

By May of last year, the FTC had received over 300 complaints about the practices of Butterfly Labs. These practices included delivering Bitcoin mining equipment months late (meaning the machines were out-of-date by the time they were received) or failing to ship altogether.

As part of the court proceeding against Butterfly Labs, the FTC requested that the business be shut down and this has been granted by a federal judge.

Jessica Rich, director of the FTC’s consumer protection bureau, explained: “When a new and little-understood opportunity like Bitcoin presents itself, scammers will find ways to capitalize on the public’s excitement and interest.”

According to The Guardian, the FTC alleges that Butterfly Labs has failed to ship machines to over 20,000 customers as of September 2013.

The defendants in the case are BF Labs, Inc, doing business as Butterfly Labs; Darla Drake; Nasser Ghoseiri and Sonny Vlesides, the FTC said.

The new BitPay API

BitPay has announced a new BitPay API that includes a new cryptographically-secure interface and RESTful service.

New components added include a Refunds API, implemented with the ability to refund any Bitcoin address; an automatable Billing API, that allows the submission of requests for payments; and capability-based API access, this eschews OAuth and role-based security for a system that uses a personal cryptographic signature and a security token to increase security.

Bitcoin-related APIs have become extremely popular this year including Gem.co, Chain, Block.io, Coinbase , Coinsetter, and even the Winklevoss Market Index.