Factbox: What is Bitcoin?

TOKYO — Frenchman Mark Karpeles, 30, the CEO of collapsed Bitcoin exchange MtGox, has been arrested in Tokyo on theft allegations as Japanese investigators grill him over the disappearance of hundreds of millions of dollars worth of the virtual currency.

Here are some key facts about Bitcoin.

Q. What is it?

A. Bitcoin is a virtual currency that is created from computer code. Unlike a real-world currency like the US dollar or the euro, it has no central bank and is not backed by any government.

Instead, its community of users control and regulate it. Advocates say this makes it an efficient alternative to traditional currencies, because it is not subject to the whims of a state that may wish to devalue its money to inflate away debt, for example.

Just like other currencies, Bitcoins can be exchanged for goods and services — or for other currencies — provided the other party is willing to accept them.

Q. Where does it come from?

A. Bitcoin is based on a piece of software written by an unknown person or people in 2009 under the Japanese-sounding name Satoshi Nakamoto. Other digital currencies followed but Bitcoin was by far the most popular.

Transactions happen when heavily encrypted codes are passed across a computer network. The network as a whole monitors and verifies the transaction, in a process that is intended to ensure no single Bitcoin can be spent in more than one place simultaneously.

Users can “mine” Bitcoins — bring new ones into being — when their computers run these complicated and increasingly difficult processes.

However, the model is limited and only 21 million units will ever be created.

Q. What’s it worth?

A. Like any other currency, its value fluctuates. But unlike most real-world analogues, Bitcoin’s value has swung wildly in a short period.

When the unit first came into existence it was worth a few US cents. Its price topped out at well over $1,000 in 2013. Now, a single Bitcoin is worth about $235.

There are presently more than 14.5 million units in circulation. Some economists point to the fact that — because it is limited — its price will increase over the long run, making it less useful as a currency and more a vehicle to store value, like gold. But others point to Bitcoin’s volatility, security issues and other weaknesses.

Q. What’s the future?

A. Some commentators say that like many technological developments, the first iteration of a product will encounter difficulties, possibly terminal ones. But the trail it blazes might smooth the way for the next crypto currency.

Problems include an apparent vulnerability to theft when Bitcoins are stored in digital wallets. This may be what has happened at MtGox.

The virtual currency movement also faces legitimacy issues because of the way it allows for anonymous transactions — the very thing that libertarian adopters like about it.

Detractors say Bitcoin’s use on the underground Silk Road website, where users could buy drugs and guns with it, is proof that it is a bad thing.

Some governments, including Russia and China, have heavily restricted how Bitcoins can be used.

If Bitcoin does become more widely accepted, experts say, it could lead to more government regulations, which would negate the very attraction of the Bitcoin concept.

source: business.inquirer.net

Greek left attacks 'barbarous' austerity

(Financial Times) -- Greece is heading for a clash with international lenders as the radical leftwing party that came second in the weekend's election called for the ripping up of a "barbarous" austerity programme underpinning its bailout and questions mounted about the country's future inside the euro.

Alexis Tsipras, the 38-year-old leader of the Syriza party that surged in popularity in Sunday's poll, outlined a five-point plan to be put to conservative and socialist leaders on Wednesday as he attempts to build a coalition, demanding the reversal of fiscal and structural measures that have enabled Greece to slash its budget deficit.

However, in an unusually blunt intervention, Jörg Asmussen, a European Central Bank executive board member, for the first time raised the possibility of a Greek exit from the euro -- an option the ECB had previously refused to acknowledge in public.

"Greece needs to be aware that there is no alternative to the agreed reform programme if it wants to remain a member of the eurozone," Mr Asmussen told Handelsblatt, the German business newspaper.




Fears of a Greek exit hit financial markets, with stock markets across Europe falling, the US S&P 500 hitting a two-month low by midday in New York and investors buying safe US Treasuries, German bunds and UK gilts.
Greece searching for a solution

Syriza overtook the centre-left Panhellenic Socialist Movement (Pasok) in Sunday's poll, winning 16.78 per cent of the vote to Pasok's 13.18 per cent thanks to large gains in Athens and Piraeus, the country's largest constituencies.
Markets spooked by Greek political limbo

"Voters rejected the barbarous policies in the bailout deal; they abandoned the parties that support it, effectively abolishing plans for sackings [of public sector workers] and additional spending cuts," Mr Tsipras said.
Elections leave Greece in 'paralysis'

His plan would involve ripping up Greece's second €174bn bailout agreement, putting the banking sector "under state control", reversing labour reforms, calling a moratorium on national debt repayments and moving to proportional representation.

Greek stocks fell to 20-year lows while in Paris the CAC 40 slid 2.8 per cent and Germany's Xetra Dax closed down 1.9 per cent. The euro slipped 0.3 per cent against the dollar to $1.3022.

"Greece in itself isn't a big issue, but what does matter of course is the knock-on effects and contagion fears and what that would mean for the wider market," said Adrian Cattley, European equity strategist at Citi.




Mr Tsipras has three days to attempt to form a coalition government, although analysts expected the two main parties, Pasok and the conservative New Democracy, to reject the plan out of hand, a move that is likely to lead to a fresh election in June.

One conservative official called Syriza's position "irresponsible".

Analysts said Syriza wanted to win first place at the next election by taking a hardline stance against reforms backed by the EU and the International Monetary Fund aimed at rescuing Greece from bankruptcy and an exit from the eurozone.

Young, unemployed Greeks flocked to vote for Syriza at the election, along with self-employed professionals opposed to the liberalisation of their closed shops and older leftwingers facing further pension cuts under an €11.5bn package due to be approved by the incoming parliament.

"Some people interpreted the election result as a vote of anger. They are making a mistake. It was a mature and conscious choice," Mr Tsipras said.

source: CNN