Bitcoin Weekly 2013 October 30: World’s first Bitcoin ATM in Canada, FBI finally got DPR’s BTC booty, London-based Coinfloor launches


Growth continues for the Bitcoin market as it continues to maintain a value above $200 even with some fluctuations. The world’s first Bitcoin ATM has been set up in a coffee shop in Vancouver, Canada that allows people to easily exchange BTC for CDN—something that, if it were ubiquitous enough, could break the consumer-difficulty with receiving BTC and make merchants really pay attention. The FBI finally broke the Dread Pirate Robert’s Bitcoin wallet encryption and absconded with his booty… Bitcoin exchange Coinfloor is launching in London. And, a man in Norway who bought $27 worth of bitcoins in 2009 now has quite a valuable stash on his hands.

This, and yet more, in this week’s Bitcoin Weekly.

World’s first Bitcoin ATM arrives in Vancouver, Canada

As previously reported on SiliconANGLE, the first Bitcoin ATM has been installed inside a Waves Coffee House at Howe and Smithe streets in downtown Vancouver, Canada. The kiosk will be run by Vancouver-based Bitcoiniacs and Nevada-based Robocoin—who make the ATM kiosk.

The kiosks will use palm scans of customers as a security and identification feature to allow them access to exchange BTC for Canadian Dollars and vice versa. Customers can exchange up to $3,000 CDN worth of bitcoins a day; CDN and BTC will be exchanged on Canada’s VirtEx exchange and then transferred to/from the users wallet. The kiosk can also produce a paper receipt of the transaction.

Take a look at Robocoin in action on location via @robocoin and some pictures.


London-based Bitcoin exchange Coinfloor open for buisness

England is getting its very own Bitcoin exchange with Coinfloor, starting Tuesday 29 October, in spite of the fact that the UK’s Financial Conduct Authority has not ruled on the classification of bitcoins as money. The story is being reported at Wired UK and CNN Money.

Coinfloor may not be the first British Bitcoin exchange, but it is one of the best funded and most developed. It is VC-backed by such moguls as Passion Capital and Taavet Hinrikus—a former Skype director.

The lack of status of bitcoins as money in the UK hasn’t phased Coinfloor’s founder Mark Lamb because it means there’s a current lack of regulation; the real gamble is what will happen when the FCA catches up with the currency and how regulation will work. What Lamb told to CNN Money is that he didn’t trust to open an exchange to US customers due to their current regulatory limbo, he said, “legally it is not safe to open up to U.S. customers in the beginning.”

Coinfloor promises a powerful platform—“[a] state-of-the-art trading engine can handle trade volumes up to 50x higher than other Bitcoin exchanges without breaking a sweat”—strong compliance with electronic verification, and flagging (presumably for money laundering and fraud), and to make it easy for websites to accept and exchange bitcoins. So far it looks as if Coinfloor is looking not just to be an exchange, but also an oh-so-needed addition to the Bitcoin merchant space.


The final resting-place of bitcoins sized from DPR by the FBI

It appears that last week the potential-treasure-hunt for Dread Pirate Robert’s bitcoin stash ended when the FBI finally broke the encryption on his wallet and transferred out all of the coin stored therein. Until that moment , there was the almost-romantic-notion that DPR could use his goods to fund a legal defense against the charges laid against him (thus proving the technological superiority of BTC against seizure) but that notion has been laid to rest.

The claim by the FBI is laid out in a Forbes article about the 144,000 bitcoins moved into a new wallet.

The FBI official wouldn’t say how the agency had determined that the Bitcoin “wallet”–a collection of Bitcoins at a single address in the Bitcoin network–belonged to Ulbricht, but that it was sure they were his. “This is his wallet,” said the FBI official. “We seized this from DPR,” the official added, referring to the pseudonym “the Dread Pirate Roberts,” which prosecutors say Ulbricht allegedly used while running the Silk Road.

The Silk Road wallet only contained 26,000 BTC ($3.6 million at the time) but the wallet considered to be owned by DPR contained in excess of 144,000 BTC. The FBI transferred all of the bitcoins in small, specifically set amounts, over an entire day from DPR’s wallet to one controlled by the agency. Just like the previous wallet address, the new one has become a pinboard for messages and advertising one satoshi at a time.

The FBI transferred the bitcoins out in chunks of 324 each; when typed into a phone’s numeric pad this spells ‘FBI’.

The end result is one of the largest bitcoin addresses (1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)  on record containing 144,336 BTC or $30.6 million at the current BTC exchange rate.


What is $27 of BTC from 2009 worth now?

Kristoffer Koch from Norway now knows. According to an article in The Guardian (citing Norwegian newspaper NRK) he bought 5,000 BTC in 2009 for $27—as part of a thesis study on encryption—a small nest-egg he promptly forgot about; now that the market has greatly increased in value that seemingly small investment would now net him almost a million dollars (at a current rate of $209 per BTC.)

Koch exchanged one fifth of his loot, making enough kroner (Norway’s currency) to buy himself a stately apartment in Tøyen, one of Oslo’s (the Norwegian capital) wealthier areas.

No doubt, many people who played with bitcoins when they were cents on the dollar are now kick themselves for not spending $20 on what would be hundreds of thousands today. Back in 2009 when Bitcoin was still an infantile technology with a lot of promise and mostly existed in the hands of hobbyists and enthusiastic technologists, it would still have been hard to foresee its meteoric rise to the value it holds today.

Hats off to you, Kristoffer Koch from Bitcoin Weekly.


Techcrunch posted a surprisingly good article on BTC mining

Readers who are still new to Bitcoin and wonder what “mining” means or just want an overview of the history and the current culture could brush up easily with an excellent article written by John Biggs. The status and use of Bitcoin mining is something that many people interested in bitcoins may not fully understand–and in truth mining isn’t something that the everyday user needs to know that much about.

However, being that the power and security of the Bitcoin protocol depends on mining, it’s good to have a brush up on it once and a while.