Billionaire Saudi Prince Alwaleed bin Talal, who owns investment firm Kingdom Holding, expressed skepticism about cryptocurrencies in an interview with CNBC on Monday, warning that bitcoin was like &quot;Enron in the making&quot;.

Prince Alwaleed, whose company invests in major US&nbsp;companies such as Citigroup and Twitter, said a lack of regulation made such cryptocurrencies risky.

&quot;I just don&#39;t believe in this bitcoin thing. I think it&#39;s going to implode one day. It&#39;s Enron in the making,&quot; he said, referring to the US energy company that filed for bankruptcy in 2001 after revelations of a widespread accounting fraud.

&quot;This thing does not make sense. It&#39;s unregulated. It&#39;s not under the control of the US&nbsp;Federal Reserve or any other central bank,&quot; he added.

Bitcoin is a virtual currency that has gained more than 500 per cent this year, more than any other tradable asset class.

Prince Alwaleed also said the valuation of electric car maker Tesla was &quot;too exuberant&quot; for him to invest.

&quot;I would rather not comment on that because maybe some people think the valuation is right, but it&#39;s not for me to enter [at] that price obviously. It&#39;s too exuberant for me right now.&quot;

He added that US&nbsp;ride services company Lyft had been better priced than rival Uber when his investment firm bought into it.

He said he was &quot;very happy&quot; with his investment in Citigroup and saw potential for the share price to rise above $100. It has been trading at around $73.

Safety Value +

Prince Alwaleed also said he was not considering merging AccorHotels and Four Seasons Hotels and Resorts, in which Kingdom Holding owns stakes.

On the initial public offering of Saudi Aramco, which its CEO reiterated would take place next year, Prince Alwaleed said the transaction would act as a &quot;safety valve&quot; for Saudi Arabia.

&quot;If you go 5 per cent, there&#39;s nothing that prohibits you from going another 5 per cent next year, and 5 per cent the third year and fourth year, and so forth, depending on the situation.&quot;

Crown Prince Mohammed bin Salman said last year the country was considering listing about 5 per cent of Aramco in a deal that could raise $100 billion, if the company is valued at about $2 trillion as hoped.

CEO Nasser on Monday brushed off reports about China emerging as a frontrunner in a possible plan to delay the IPO and sell shares to sovereign funds.

&quot;I&#39;m not a member of the government but I read these reports, and I will not be surprised if China will be looking at this opportunity,&quot; Prince Alwaleed said.

&quot;China depends on oil and will depend on oil for a long time to come. And Saudi Arabia is an anchor exporter of oil to China.&quot;

'I just don't believe in this bitcoin thing. I think it's going to implode one day. It's Enron in the making,' he said, referring to the US energy company that filed for bankruptcy in 2001 after revelations of a widespread accounting fraud

Billionaire Saudi Prince Alwaleed bin Talal, who owns investment firm Kingdom Holding, expressed skepticism about cryptocurrencies in an interview with CNBC on Monday, warning that bitcoin was like "Enron in the making". Prince Alwaleed, whose company invests in major US companies such as Citigroup and Twitter, said a lack of regulation made such cryptocurrencies risky. "I just don't believe in this bitcoin thing. I think it's going to implode one day. It's Enron in the making," he said, referring to the US energy company that filed for bankruptcy in 2001 after revelations of a widespread accounting fraud. "This thing does not make sense. It's unregulated. It's not under the control of the US Federal Reserve or any other central bank," he added. Bitcoin is a virtual currency that has gained more than 500 per cent this year, more than any other tradable asset class. Prince Alwaleed also said the valuation of electric car maker Tesla was "too exuberant" for him to invest. "I would rather not comment on that because maybe some people think the valuation is right, but it's not for me to enter [at] that price obviously. It's too exuberant for me right now." He added that US ride services company Lyft had been better priced than rival Uber when his investment firm bought into it. He said he was "very happy" with his investment in Citigroup and saw potential for the share price to rise above $100. It has been trading at around $73. Safety Value + Prince Alwaleed also said he was not considering merging AccorHotels and Four Seasons Hotels and Resorts, in which Kingdom Holding owns stakes. On the initial public offering of Saudi Aramco, which its CEO reiterated would take place next year, Prince Alwaleed said the transaction would act as a "safety valve" for Saudi Arabia. "If you go 5 per cent, there's nothing that prohibits you from going another 5 per cent next year, and 5 per cent the third year and fourth year, and so forth, depending on the situation." Crown Prince Mohammed bin Salman said last year the country was considering listing about 5 per cent of Aramco in a deal that could raise $100 billion, if the company is valued at about $2 trillion as hoped. CEO Nasser on Monday brushed off reports about China emerging as a frontrunner in a possible plan to delay the IPO and sell shares to sovereign funds. "I'm not a member of the government but I read these reports, and I will not be surprised if China will be looking at this opportunity," Prince Alwaleed said. "China depends on oil and will depend on oil for a long time to come. And Saudi Arabia is an anchor exporter of oil to China."

Bitcoin is 'Enron' in the making: Saudi Prince Talal

A Greek court on Wednesday backed the&nbsp;extradition&nbsp;to Moscow of a Russian citizen who also faces being sent to the United States on allegations of laundering billions of dollars in&nbsp;bitcoin.

Alexander Vinnik, the&nbsp;suspected mastermind of a $4 billion&nbsp;bitcoin&nbsp;laundering ring, is one of seven Russians arrested or indicted worldwide this year on US&nbsp;cybercrime charges.

Judges ruled last week that he should be extradited to the United States, a decision&nbsp;Russia criticised as unjust and illegal and which Vinnik is challenging at&nbsp;Greece&#39;s supreme court.

Should it decide to uphold the ruling to extradite him to the United States, the final decision is in the hands of&nbsp;Greece&#39;s justice minister, who can approve&nbsp;extradition&nbsp;to one country and block the other.

Vinnik denies all charges against him. But he has agreed to be returned to&nbsp;Russia&nbsp;where he is to be tried on lesser&nbsp;fraud&nbsp;charges.

&quot;That is his wish - to be extradited to&nbsp;Russia&nbsp;and to give his account before the&nbsp;Russian judicial authorities,&quot; Alexandros Lykourezos, the lawyer leading Vinnik&#39;s defence, told reporters after the ruling in Thessaloniki.

In the United States, where he faces up to 55 years in prison, Vinnik is accused of running BTC-e, a digital currency exchange&nbsp;used to trade&nbsp;bitcoin&nbsp;-- to facilitate crimes ranging from computer hacking to drug trafficking since 2011.

He has told Greek judges that he was a technical consultant to BTC-e and not its operator.

Vinnik was arrested while on holiday in a seaside village in&nbsp;Greece in July.&nbsp;Russia&nbsp;then sought his extradition&nbsp;as it has done with other nationals wanted by the United States.

The supreme court hearing is expected within the next three weeks, Lykourezos said.

Alexander Vinnik, the?suspected mastermind of a $4 billion?bitcoin?laundering ring, is one of seven Russians arrested or indicted worldwide this year on US?cybercrime charges

A Greek court on Wednesday backed the extradition to Moscow of a Russian citizen who also faces being sent to the United States on allegations of laundering billions of dollars in bitcoin. Alexander Vinnik, the suspected mastermind of a $4 billion bitcoin laundering ring, is one of seven Russians arrested or indicted worldwide this year on US cybercrime charges. Judges ruled last week that he should be extradited to the United States, a decision Russia criticised as unjust and illegal and which Vinnik is challenging at Greece's supreme court. Should it decide to uphold the ruling to extradite him to the United States, the final decision is in the hands of Greece's justice minister, who can approve extradition to one country and block the other. Vinnik denies all charges against him. But he has agreed to be returned to Russia where he is to be tried on lesser fraud charges. "That is his wish - to be extradited to Russia and to give his account before the Russian judicial authorities," Alexandros Lykourezos, the lawyer leading Vinnik's defence, told reporters after the ruling in Thessaloniki. In the United States, where he faces up to 55 years in prison, Vinnik is accused of running BTC-e, a digital currency exchange used to trade bitcoin -- to facilitate crimes ranging from computer hacking to drug trafficking since 2011. He has told Greek judges that he was a technical consultant to BTC-e and not its operator. Vinnik was arrested while on holiday in a seaside village in Greece in July. Russia then sought his extradition as it has done with other nationals wanted by the United States. The supreme court hearing is expected within the next three weeks, Lykourezos said.

US, Russia in extradition tug-of-war over bitcoin fraud suspect in Greece

A big global corporate voice, the Indian-origin CEO of the US-based payments company Mastercard, Ajaypal Singh Banga, has come out in defence of the Indian government.&nbsp;

Banga told WION that one or two quarters of slow economic growth should not impact the pace of reforms.&nbsp;

Banga&#39;s comments come at a time when some of the Indian government&#39;s measures -- demonetisation and the goods and services tax -- have come under severe criticism, and are being blamed for slowing down the economy.&nbsp;

Banga also hailed the reforms undertaken by previous governments, but said the pace of reforms under the current establishment has been quicker. &nbsp;&nbsp;

&quot;India is going through an exciting phase. FDI, GDP, foreign reserves have gone up in the last two decades,&quot; he said. &nbsp;

&quot;Digitisation will give the next boost to the Indian economy,&quot; he said.&nbsp;

&quot;Change has actually accelerated in the last two years,&quot; he added.&nbsp;

Banga told WION that one or two quarters of slow economic growth should not impact the pace of reforms.?

A big global corporate voice, the Indian-origin CEO of the US-based payments company Mastercard, Ajaypal Singh Banga, has come out in defence of the Indian government. Banga told WION that one or two quarters of slow economic growth should not impact the pace of reforms. Banga's comments come at a time when some of the Indian government's measures -- demonetisation and the goods and services tax -- have come under severe criticism, and are being blamed for slowing down the economy. Banga also hailed the reforms undertaken by previous governments, but said the pace of reforms under the current establishment has been quicker. "India is going through an exciting phase. FDI, GDP, foreign reserves have gone up in the last two decades," he said. "Digitisation will give the next boost to the Indian economy," he said. "Change has actually accelerated in the last two years," he added.

WATCH: Not concerned by slowdown in Indian economy, says Mastercard CEO Ajay Banga

Switzerland&#39;s financial watchdog has closed&nbsp;down&nbsp;what it said was the provider of a fake&nbsp;cryptocurrency&nbsp;and is investigating around a dozen other possible fraud cases, in the&nbsp;latest&nbsp;clamp-down&nbsp;on the risks involving virtual money.

The move by the FINMA watchdog comes on the heels of Chinese authorities&#39; ordering Beijing-based&nbsp;cryptocurrency&nbsp;exchanges to stop trading and immediately notify users of their closure.

Virtual currencies such as Bitcoin, which are issued and usually controlled by their developers and not backed by a central bank, are hailed by their supporters as a fast and efficient way of managing money.

But regulators and traditional banks are increasingly concerned about the risks of fraud in the burgeoning online&nbsp;cryptocurrency&nbsp;underworld.

JPMorgan Chief Executive Jamie Dimon last week said Bitcoin, the original and still the biggest cryptocurrency, &quot;is a fraud&quot; and will eventually &quot;blow up&quot;.

The QUID PRO QUO Association&nbsp;shut&nbsp;down&nbsp;by FINMA had provided so-called E-Coins for more than a year and had amassed funds of at least 4 million&nbsp;Swiss&nbsp;francs ($4.2 million) from several hundred users, FINMA said in a statement on Tuesday.

&quot;This activity is similar to the deposit-taking business of a bank and is illegal unless the company in question holds the relevant financial market licence,&quot; FINMA, Switzerland&#39;s Financial Market Supervisory Authority, said.

E-Coin was not like &quot;real cryptocurrencies&quot;, FINMA said, because it was not stored on distributed networks using blockchain technology but was instead kept locally on QUID PRO QUO&#39;s servers.

Reuters was not immediately able to reach Zurich-based QUID PRO QUO for comment.

FINMA said it had three other companies on its warning list due to suspicious activity in cryptocurrencies and was conducting 11 investigations into other possible fake virtual currencies.

The&nbsp;Swiss&nbsp;finance industry has been looking for new avenues of growth following a weakening of its bank secrecy rules during a global crackdown&nbsp;on tax evasion.

The small&nbsp;Swiss&nbsp;canton of Zug, famed for low taxes that have drawn multinational companies, has been trying to turn itself into a hub for virtual currency firms.

But the QUID PRO QUO case is an example of the pitfalls of investing in the booming but still-murky&nbsp;cryptocurrency&nbsp;world.

Of the money users had invested, FINMA said it had so far seized and blocked assets worth around 2 million francs.

Initial coin offerings, or ICOs, have fuelled a rapid ascent in the value of all cryptocurrencies, from about $17 billion at the start of the year to a record high close to $180 billion at the beginning of September.

An ICO is a practice of creating and selling digital currencies or tokens to investors to finance start-up projects.

The move by the FINMA watchdog comes on the heels of Chinese authorities' ordering Beijing-based?cryptocurrency?exchanges to stop trading and immediately notify users of their closure.

Switzerland's financial watchdog has closed down what it said was the provider of a fake cryptocurrency and is investigating around a dozen other possible fraud cases, in the latest clamp-down on the risks involving virtual money. The move by the FINMA watchdog comes on the heels of Chinese authorities' ordering Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure. Virtual currencies such as Bitcoin, which are issued and usually controlled by their developers and not backed by a central bank, are hailed by their supporters as a fast and efficient way of managing money. But regulators and traditional banks are increasingly concerned about the risks of fraud in the burgeoning online cryptocurrency underworld. JPMorgan Chief Executive Jamie Dimon last week said Bitcoin, the original and still the biggest cryptocurrency, "is a fraud" and will eventually "blow up". The QUID PRO QUO Association shut down by FINMA had provided so-called E-Coins for more than a year and had amassed funds of at least 4 million Swiss francs ($4.2 million) from several hundred users, FINMA said in a statement on Tuesday. "This activity is similar to the deposit-taking business of a bank and is illegal unless the company in question holds the relevant financial market licence," FINMA, Switzerland's Financial Market Supervisory Authority, said. E-Coin was not like "real cryptocurrencies", FINMA said, because it was not stored on distributed networks using blockchain technology but was instead kept locally on QUID PRO QUO's servers. Reuters was not immediately able to reach Zurich-based QUID PRO QUO for comment. FINMA said it had three other companies on its warning list due to suspicious activity in cryptocurrencies and was conducting 11 investigations into other possible fake virtual currencies. The Swiss finance industry has been looking for new avenues of growth following a weakening of its bank secrecy rules during a global crackdown on tax evasion. The small Swiss canton of Zug, famed for low taxes that have drawn multinational companies, has been trying to turn itself into a hub for virtual currency firms. But the QUID PRO QUO case is an example of the pitfalls of investing in the booming but still-murky cryptocurrency world. Of the money users had invested, FINMA said it had so far seized and blocked assets worth around 2 million francs. Initial coin offerings, or ICOs, have fuelled a rapid ascent in the value of all cryptocurrencies, from about $17 billion at the start of the year to a record high close to $180 billion at the beginning of September. An ICO is a practice of creating and selling digital currencies or tokens to investors to finance start-up projects.

Swiss watchdog shuts down fake e-coin in cryptocurrency crackdown

Asian shares eked out small gains on Tuesday as expectations that Beijing will maintain support for its economy ahead of a key congress supported Chinese stocks and metals prices, but worries about North Korea kept many investors on edge.

European shares were expected rise slightly after a slide on Monday. Spread betters see Germany&#39;s DAX and France&#39;s CAC gaining 0.3 percent and Britain&#39;s FTSE 0.1 percent.

But Wall Street looked set to open slightly softer after a long holiday weekend during which Pyongyang triggered its most powerful nuclear test yet. S&amp;P500 mini futures, which had slid on Monday, last stood at 2,469, 0.2 percent below Friday&#39;s close.

MSCI&#39;s index of Asia-Pacific shares outside Japan was up 0.2 percent thanks to gains in Chinese shares, though many markets were in the red.

Japan&#39;s Nikkei fell 0.6 percent on fears that more provocation from North Korea is possible. Media said the North appeared to be preparing for further ballistic missile tests.

The White House said on Monday that &quot;all options to address the North Korean threat are on the table&quot; while US&nbsp;Ambassador to the United Nations Nikki Haley urged the 15-member UN&nbsp;Security Council to impose the &quot;strongest possible&quot; sanctions to deter Pyongyang.

&quot;It&#39;s not clear whether diplomacy can solve this problem given it has failed for the last 25 years,&quot; said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

&quot;But the US&nbsp;doesn&#39;t seem to be ready for a military action soon, either. So we are likely to see continued stalemate, which will keep a tab on share prices.&quot;

Fears about North Korea kept safe-haven assets in demand, with gold rising 0.1 percent to $1,336 per ounce, after having hit a 11-month high of $1,339.8 on Monday.

In the currency market, the yen, which usually gains on risk aversion due to Japan&#39;s net creditor nation status, gained 0.4 percent to 109.32 yen to the dollar, near Monday&#39;s high of 109.22 yen.

The euro slightly extended its gains to trade at $1.1905.

But it kept some distance from a 2-1/2-year high of $1.2070 hit last week on rising expectations that a stronger euro could slow the European Central Bank&#39;s (ECB) plans to rein in its bond-buying stimulus scheme.

The Chinese yuan hit a near 16-month high of 6.515 per dollar. It has gained 2.0 percent in less than two weeks, a sizable move for the pair, in response to dollar weakness and a series of stronger midpoints set by the central bank.

The Shanghai composite index of mainland Chinese shares hit its highest levels since January 2016, due to solid economic and earnings growth in China in recent months and expectations that Beijing will not tolerate any disruptions ahead of a key Communist Party Congress in mid-October.

Such expectations also helped to lift copper to a near three-year of $6,944.5 per tonne. It last stood at $6,933, up 0.2 percent on the day.

The prices of steel and iron ore have rallied in recent weeks.

But some analysts say profit-taking in base metals could start soon.

&quot;Now that Beijing fixed its schedule on the national congress, it may no longer accelerate infrastructure spending,&quot; said Tatsufumi Okoshi, senior economist at Nomura Securities.

&quot;We should be mindful of the possibility that iron ores, steel and other non-ferrous metals will peak out soon.&quot;

US&nbsp;crude oil prices edged higher while U.S. gasoline prices slumped to pre-Hurricane Harvey levels, as oil refineries and pipelines in the US&nbsp;Gulf Coast slowly resumed activity, easing supply concerns.

US&nbsp;West Texas Intermediate (WTI) crude futures ticked up 0.2 percent to trade at $47.38 per barrel.

The return of US&nbsp;refineries ended a spike in gasoline prices as initial fears of a serious supply crunch faded.

US&nbsp;gasoline futures dropped 4.1 percent from their last close, to $1.67 per gallon, down from $2.17 touched on Aug. 31 and back to levels last seen before Harvey hit the US&nbsp;Gulf coast and its large refining industry.

Elsewhere, bitcoin dropped further from Saturday&#39;s all-time high of $4,979.9 to trade at $4,012 after China on Monday banned the practice of raising funds through launches of token-based digital currencies, or so-called initial coin offerings (ICO).

European shares were expected rise slightly after a slide on Monday. Spread betters see Germany's DAX and France's CAC gaining 0.3 percent and Britain's FTSE 0.1 percent.

Asian shares eked out small gains on Tuesday as expectations that Beijing will maintain support for its economy ahead of a key congress supported Chinese stocks and metals prices, but worries about North Korea kept many investors on edge. European shares were expected rise slightly after a slide on Monday. Spread betters see Germany's DAX and France's CAC gaining 0.3 percent and Britain's FTSE 0.1 percent. But Wall Street looked set to open slightly softer after a long holiday weekend during which Pyongyang triggered its most powerful nuclear test yet. S&P500 mini futures, which had slid on Monday, last stood at 2,469, 0.2 percent below Friday's close. MSCI's index of Asia-Pacific shares outside Japan was up 0.2 percent thanks to gains in Chinese shares, though many markets were in the red. Japan's Nikkei fell 0.6 percent on fears that more provocation from North Korea is possible. Media said the North appeared to be preparing for further ballistic missile tests. The White House said on Monday that "all options to address the North Korean threat are on the table" while US Ambassador to the United Nations Nikki Haley urged the 15-member UN Security Council to impose the "strongest possible" sanctions to deter Pyongyang. "It's not clear whether diplomacy can solve this problem given it has failed for the last 25 years," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "But the US doesn't seem to be ready for a military action soon, either. So we are likely to see continued stalemate, which will keep a tab on share prices." Fears about North Korea kept safe-haven assets in demand, with gold rising 0.1 percent to $1,336 per ounce, after having hit a 11-month high of $1,339.8 on Monday. In the currency market, the yen, which usually gains on risk aversion due to Japan's net creditor nation status, gained 0.4 percent to 109.32 yen to the dollar, near Monday's high of 109.22 yen. The euro slightly extended its gains to trade at $1.1905. But it kept some distance from a 2-1/2-year high of $1.2070 hit last week on rising expectations that a stronger euro could slow the European Central Bank's (ECB) plans to rein in its bond-buying stimulus scheme. The Chinese yuan hit a near 16-month high of 6.515 per dollar. It has gained 2.0 percent in less than two weeks, a sizable move for the pair, in response to dollar weakness and a series of stronger midpoints set by the central bank. The Shanghai composite index of mainland Chinese shares hit its highest levels since January 2016, due to solid economic and earnings growth in China in recent months and expectations that Beijing will not tolerate any disruptions ahead of a key Communist Party Congress in mid-October. Such expectations also helped to lift copper to a near three-year of $6,944.5 per tonne. It last stood at $6,933, up 0.2 percent on the day. The prices of steel and iron ore have rallied in recent weeks. But some analysts say profit-taking in base metals could start soon. "Now that Beijing fixed its schedule on the national congress, it may no longer accelerate infrastructure spending," said Tatsufumi Okoshi, senior economist at Nomura Securities. "We should be mindful of the possibility that iron ores, steel and other non-ferrous metals will peak out soon." US crude oil prices edged higher while U.S. gasoline prices slumped to pre-Hurricane Harvey levels, as oil refineries and pipelines in the US Gulf Coast slowly resumed activity, easing supply concerns. US West Texas Intermediate (WTI) crude futures ticked up 0.2 percent to trade at $47.38 per barrel. The return of US refineries ended a spike in gasoline prices as initial fears of a serious supply crunch faded. US gasoline futures dropped 4.1 percent from their last close, to $1.67 per gallon, down from $2.17 touched on Aug. 31 and back to levels last seen before Harvey hit the US Gulf coast and its large refining industry. Elsewhere, bitcoin dropped further from Saturday's all-time high of $4,979.9 to trade at $4,012 after China on Monday banned the practice of raising funds through launches of token-based digital currencies, or so-called initial coin offerings (ICO).

Global stocks on defensive after selloff on North Korea fears

Fidelity Investments&nbsp;has started allowing clients to use its website to view their holdings of Bitcoin and other cryptocurrencies held through digital wallet provider Coinbase, the company said on Wednesday.

The initiative, previously tested with the Boston-based money manager&#39;s employees, is a rare example of an established financial services company warming up to cryptocurrencies.

Starting Wednesday, most Fidelity clients will be able to authorise Coinbase, one of the largest crypto-currency exchanges in the United States, to provide the fund manager with data on their holdings.

Through the experiment, the company said it aims to learn more about digital currencies, which have been proliferating since the creation of Bitcoin, the oldest and most valuable of these assets.

Coinbase enables users to buy and trade Bitcoin as well as competitor virtual currencies Ethereum and Litecoin.

&quot;This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them,&quot; Hadley Stern, senior vice president and managing director at Fidelity Labs, the company&#39;s innovation unit, said in an interview.

Bitcoin hit a record high on Tuesday, with one unit of Bitcoin trading at above $3,400 on Coinbase.

The currency&#39;s rise in value is not a driving force behind the initiative, Stern said, noting that the integration is part of Fidelity&#39;s wider efforts around cryptocurrencies and their underlying technology blockchain.

Many large financial institutions around the world have been investing in blockchain over the past two years, in the hopes that it can help them slash costs and simplify some processes. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet rather than a central authority.

However, most established financial firms have shied away from associating themselves with Bitcoin and cryptocurrencies, because the sector remains largely unregulated.

Fidelity&#39;s Chief Executive Officer Abigail Johnson announced the company&#39;s intention to launch the Coinbase integration at an industry conference in May.

At the time Johnson also revealed that Fidelity had been accepting bitcoin payments in its cafeteria, but said the experiment had highlighted the technology&#39;s flaws as a means of payments.

&quot;But I am still a believer&quot; and it&#39;s no accident that I&#39;m one of the few standing before you today from a large financial services firm that hasn&#39;t given up on digital currencies,&quot; Johnson said at the time.

Starting Wednesday, most Fidelity clients will be able to authorise Coinbase, one of the largest crypto-currency exchanges in the United States, to provide the fund manager with data on their holdings

Fidelity Investments has started allowing clients to use its website to view their holdings of Bitcoin and other cryptocurrencies held through digital wallet provider Coinbase, the company said on Wednesday. The initiative, previously tested with the Boston-based money manager's employees, is a rare example of an established financial services company warming up to cryptocurrencies. Starting Wednesday, most Fidelity clients will be able to authorise Coinbase, one of the largest crypto-currency exchanges in the United States, to provide the fund manager with data on their holdings. Through the experiment, the company said it aims to learn more about digital currencies, which have been proliferating since the creation of Bitcoin, the oldest and most valuable of these assets. Coinbase enables users to buy and trade Bitcoin as well as competitor virtual currencies Ethereum and Litecoin. "This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them," Hadley Stern, senior vice president and managing director at Fidelity Labs, the company's innovation unit, said in an interview. Bitcoin hit a record high on Tuesday, with one unit of Bitcoin trading at above $3,400 on Coinbase. The currency's rise in value is not a driving force behind the initiative, Stern said, noting that the integration is part of Fidelity's wider efforts around cryptocurrencies and their underlying technology blockchain. Many large financial institutions around the world have been investing in blockchain over the past two years, in the hopes that it can help them slash costs and simplify some processes. Blockchain is a shared ledger of transactions maintained by a network of computers on the internet rather than a central authority. However, most established financial firms have shied away from associating themselves with Bitcoin and cryptocurrencies, because the sector remains largely unregulated. Fidelity's Chief Executive Officer Abigail Johnson announced the company's intention to launch the Coinbase integration at an industry conference in May. At the time Johnson also revealed that Fidelity had been accepting bitcoin payments in its cafeteria, but said the experiment had highlighted the technology's flaws as a means of payments. "But I am still a believer" and it's no accident that I'm one of the few standing before you today from a large financial services firm that hasn't given up on digital currencies," Johnson said at the time.

Now users can access their digital currency on Fidelity website

Bitcoin&#39;s underlying software code could be split on Tuesday to create a clone called &quot;Bitcoin Cash,&quot; potentially providing a windfall for holders of the digital currency.

The initiative is being led by a small group of mostly China-based Bitcoin miners, who get paid in the currency for contributing computing power to the bitcoin network,&nbsp;who are not happy with proposed improvements to the currency&#39;s technology.

They have initiated what is known as a &quot;fork&quot;, where blockchain, a public ledger of all bitcoin transactions, splits into two potential paths, that is set to be activated on Aug. 1.

A fork, if it goes ahead, would be significant as it could create a new competitor for bitcoin, which remains the oldest and most valuable digital currency. It is not clear if the fork will happen and how much the new coin would be worth.

If the fork goes ahead on Tuesday, anyone owning bitcoins before the split will have access to an equal amount of Bitcoin Cash for free, which they will then be able to trade for fiat currencies, legal tender backed by an issuing government, or other digital currencies.

&quot;This is somewhat like a stock split,&quot; said Jeff Garzik, chief executive and co-founder of Bloq, a blockchain company. &quot;You go to sleep with 100 bitcoins and wake up in the morning with 100 bitcoins plus 100 &#39;Bitcoin Cash&#39;, a new token.&quot;

Bitcoin averted a split two weeks ago, when its software developers and miners agreed to implement a software upgrade called the Bitcoin Improvement Proposal (BIP) 91.

BIP 91 was the first step toward a larger effort to upgrade bitcoin through software called SegWit2x, which would make the network faster at processing transactions, such as payments using the virtual currency.

The miners, a powerful segment of the bitcoin community, represent a network of computer operators who validate information on the blockchain. Since bitcoin is powered by open-source code, any group of coders can use it to create clone coins.

Futures of Bitcoin Cash are already trading on certain exchanges at around $282.40. Bitcoin traded at $2,806.27, according to coinmarketcap.com.

If the fork goes ahead, users will only be able to receive and sell the new token on certain digital currency exchanges and digital wallet providers, as several have decided not to support it, including Coinbase, BitMEX, and Bitstamp.

&quot;We do not want to support any behavior whereby anyone can potentially split the bitcoin blockchain and effectively create free money out of nothing,&quot; said Greg Dwyer, head of business development at BitMEX.

Two other large exchanges, Kraken and Bitfinex, said they will allow users to trade Bitcoin Cash and will credit them with the same amount of the new token after the fork, if it goes ahead.

&nbsp;

The initiative is being led by a small group of mostly China-based Bitcoin miners, who get paid in the currency for contributing computing power to the bitcoin network,?who are not happy with proposed improvements to the currency's technology

Bitcoin's underlying software code could be split on Tuesday to create a clone called "Bitcoin Cash," potentially providing a windfall for holders of the digital currency. The initiative is being led by a small group of mostly China-based Bitcoin miners, who get paid in the currency for contributing computing power to the bitcoin network, who are not happy with proposed improvements to the currency's technology. They have initiated what is known as a "fork", where blockchain, a public ledger of all bitcoin transactions, splits into two potential paths, that is set to be activated on Aug. 1. A fork, if it goes ahead, would be significant as it could create a new competitor for bitcoin, which remains the oldest and most valuable digital currency. It is not clear if the fork will happen and how much the new coin would be worth. If the fork goes ahead on Tuesday, anyone owning bitcoins before the split will have access to an equal amount of Bitcoin Cash for free, which they will then be able to trade for fiat currencies, legal tender backed by an issuing government, or other digital currencies. "This is somewhat like a stock split," said Jeff Garzik, chief executive and co-founder of Bloq, a blockchain company. "You go to sleep with 100 bitcoins and wake up in the morning with 100 bitcoins plus 100 'Bitcoin Cash', a new token." Bitcoin averted a split two weeks ago, when its software developers and miners agreed to implement a software upgrade called the Bitcoin Improvement Proposal (BIP) 91. BIP 91 was the first step toward a larger effort to upgrade bitcoin through software called SegWit2x, which would make the network faster at processing transactions, such as payments using the virtual currency. The miners, a powerful segment of the bitcoin community, represent a network of computer operators who validate information on the blockchain. Since bitcoin is powered by open-source code, any group of coders can use it to create clone coins. Futures of Bitcoin Cash are already trading on certain exchanges at around $282.40. Bitcoin traded at $2,806.27, according to coinmarketcap.com. If the fork goes ahead, users will only be able to receive and sell the new token on certain digital currency exchanges and digital wallet providers, as several have decided not to support it, including Coinbase, BitMEX, and Bitstamp. "We do not want to support any behavior whereby anyone can potentially split the bitcoin blockchain and effectively create free money out of nothing," said Greg Dwyer, head of business development at BitMEX. Two other large exchanges, Kraken and Bitfinex, said they will allow users to trade Bitcoin Cash and will credit them with the same amount of the new token after the fork, if it goes ahead.

Bitcoin technology faces split, may create clone virtual currency

The 32-year-old chief executive of defunct Mt. Gox pleaded not guilty on Tuesday to charges relating to the loss of hundreds of millions of dollars worth of bitcoins and cash from what was once the world&#39;s biggest bitcoin exchange.

French national Mark Karpeles filed the plea in response to charges of embezzlement and data manipulation at the Tokyo District Court, according to a pool report for foreign journalists.

Mt. Gox once handled 80 per cent of the world&#39;s bitcoin trades but filed for bankruptcy in 2014 after losing some 8,50,000 bitcoins - then worth around half a billion U.S. dollars - and $28 million in cash from its bank accounts. 
 
In its bankruptcy filing, Tokyo-based Mt. Gox blamed hackers for the lost bitcoins, pointing to a software security flaw. 
Mt. Gox subsequently said it had found 2,00,000 of the missing bitcoins. 
 
Karpeles was indicted for transferring 341 million yen ($3 million) from a Mt. Gox account holding customer funds to an account in his name during September to December 2013. The prosecution also alleged Karpeles boosted the balance of an account in his name in Mt. Gox&#39;s trading system. 
 
In its opening statement to the court, Karpeles&#39; defence team did not dispute that the transfers took place, but denied they amounted to embezzlement. 
 
Karpeles told the court he was an information technology engineer. 
 
&quot;I swear to God that I am innocent,&quot; he said in Japanese to the three-judge panel hearing his case, according to the pool report.

Licensed exchanges 
 
The collapse of Mt. Gox badly damaged the image of virtual currencies, particularly among risk-averse Japanese investors and corporations. 
 
But the bankruptcy also prompted Japan&#39;s government to decide how to treat bitcoin, and preceded a push by local regulators to licence virtual currency exchanges. 
 
Japan this year became the first country to regulate exchanges at the national level, part of a government effort to exploit financial technology as a means of stimulating the economy. 
 
Interest in bitcoin among Japan&#39;s legions of individual investors - encouraged by Tokyo&#39;s recognition of the virtual currency as legal tender - has spiked in recent months. 
 
Still, institutional investors remain wary, say those running virtual currency exchanges in Tokyo. Japanese firms are also unenthusiastic - only 4 per cent of large and mid-sized firms plan to use bitcoin in the near to medium term, showed a Reuters poll last month. 
 
The value of bitcoin is highly volatile. It hit a record high of $2,980 last month. 
 
Like other virtual currencies, such as Ethereum and Ripple, bitcoin has no central authority and relies instead on thousands of computers across the world that validate transactions and add new units to the system - technology known as blockchain. 
 
Bitcoin can be traded on exchanges in the same manner as stocks and bonds. It has also become a mode of payment for some retailers, and a way to transfer funds without the need for a third party.

&nbsp;

The chief executive of defunct Mt. Gox has been charged relating to the loss of hundreds of millions of dollars worth of bitcoins and cash from what was once the world's biggest bitcoin exchange.

The 32-year-old chief executive of defunct Mt. Gox pleaded not guilty on Tuesday to charges relating to the loss of hundreds of millions of dollars worth of bitcoins and cash from what was once the world's biggest bitcoin exchange. French national Mark Karpeles filed the plea in response to charges of embezzlement and data manipulation at the Tokyo District Court, according to a pool report for foreign journalists. Mt. Gox once handled 80 per cent of the world's bitcoin trades but filed for bankruptcy in 2014 after losing some 8,50,000 bitcoins - then worth around half a billion U.S. dollars - and $28 million in cash from its bank accounts. In its bankruptcy filing, Tokyo-based Mt. Gox blamed hackers for the lost bitcoins, pointing to a software security flaw. Mt. Gox subsequently said it had found 2,00,000 of the missing bitcoins. Karpeles was indicted for transferring 341 million yen ($3 million) from a Mt. Gox account holding customer funds to an account in his name during September to December 2013. The prosecution also alleged Karpeles boosted the balance of an account in his name in Mt. Gox's trading system. In its opening statement to the court, Karpeles' defence team did not dispute that the transfers took place, but denied they amounted to embezzlement. Karpeles told the court he was an information technology engineer. "I swear to God that I am innocent," he said in Japanese to the three-judge panel hearing his case, according to the pool report. Licensed exchanges The collapse of Mt. Gox badly damaged the image of virtual currencies, particularly among risk-averse Japanese investors and corporations. But the bankruptcy also prompted Japan's government to decide how to treat bitcoin, and preceded a push by local regulators to licence virtual currency exchanges. Japan this year became the first country to regulate exchanges at the national level, part of a government effort to exploit financial technology as a means of stimulating the economy. Interest in bitcoin among Japan's legions of individual investors - encouraged by Tokyo's recognition of the virtual currency as legal tender - has spiked in recent months. Still, institutional investors remain wary, say those running virtual currency exchanges in Tokyo. Japanese firms are also unenthusiastic - only 4 per cent of large and mid-sized firms plan to use bitcoin in the near to medium term, showed a Reuters poll last month. The value of bitcoin is highly volatile. It hit a record high of $2,980 last month. Like other virtual currencies, such as Ethereum and Ripple, bitcoin has no central authority and relies instead on thousands of computers across the world that validate transactions and add new units to the system - technology known as blockchain. Bitcoin can be traded on exchanges in the same manner as stocks and bonds. It has also become a mode of payment for some retailers, and a way to transfer funds without the need for a third party.

Chief of bitcoin exchange Mt. Gox denies embezzlement as trial opens

Virtual currencies like bitcoin are assets but bitcoin in itself does not have the fundamental attributes needed to be a currency that could meet modern economic development needs, a Chinese central bank adviser said.

Sheng Songcheng, adviser to the People&#39;s Bank of China (PBOC), made the comments in an interview with financial magazine Yicai.

&quot;Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms...But I do not deny that virtual currencies have technical value and are a type of asset,&quot; he said.

His comments came after the Chinese central bank increased scrutiny of the country&#39;s bitcoin exchanges earlier this year, a move that prompted the companies to stop margin lending, introduced trading fees and issue rules to rein in users.

Many governments around the world are still mulling how to regulate and classify bitcoin, whose value surged in June to hit a record just shy of $3,000. China has classified it as a &quot;virtual good&quot;.

Squaring in on bitcoin, Sheng said expectations that bitcoin supply would be capped in the year 2140 would make it difficult for it to become a medium of exchange that could meet modern economic development needs as money supply should be related to economic needs.

He also said that Chinese monetary authorities should study issuing a central bank virtual currency that it could regulate and run properly.

Bitcoin are 'virtual currency' with a string of codes generated by complex algorithms

Virtual currencies like bitcoin are assets but bitcoin in itself does not have the fundamental attributes needed to be a currency that could meet modern economic development needs, a Chinese central bank adviser said. Sheng Songcheng, adviser to the People's Bank of China (PBOC), made the comments in an interview with financial magazine Yicai. "Bitcoin does not have the fundamental attributes needed to be a currency as it is a string of code generated by complex algorithms...But I do not deny that virtual currencies have technical value and are a type of asset," he said. His comments came after the Chinese central bank increased scrutiny of the country's bitcoin exchanges earlier this year, a move that prompted the companies to stop margin lending, introduced trading fees and issue rules to rein in users. Many governments around the world are still mulling how to regulate and classify bitcoin, whose value surged in June to hit a record just shy of $3,000. China has classified it as a "virtual good". Squaring in on bitcoin, Sheng said expectations that bitcoin supply would be capped in the year 2140 would make it difficult for it to become a medium of exchange that could meet modern economic development needs as money supply should be related to economic needs. He also said that Chinese monetary authorities should study issuing a central bank virtual currency that it could regulate and run properly.

Bitcoin does not have the fundamental attribute to be a currency- China central bank adviser

Coinbase said on Thursday it suffered outages this week as the bitcoin exchange saw &quot;unprecedented traffic and trading&quot;, with the digital currency hitting record levels.

Bitcoin fell as much as 6.5 per cent to $2,263.72 at around 1730 GMT on Thursday, but rebounded shortly after to hit a fresh all-time high of $2,760.10.

Bitcoin hit a record on the BitStamp platform on Wednesday, driven by an uptick in demand for crypto-assets, with the creation of new tokens to raise funding for start-ups using blockchain, the underlying technology behind bitcoin.

So far this year, the price of bitcoin has more than doubled.

Coinbase, the world&#39;s largest bitcoin company with operations in 32 countries, said the heavy traffic had caused outages at its website as well. The exchange said it was working to resolve the issues.

Problems that Coinbase&#39;s platform experienced earlier this week, including card verification failures and slow load times, were resolved, its status page showed.

(Reuters)

Problems included card verification failures and slow load times

Coinbase said on Thursday it suffered outages this week as the bitcoin exchange saw "unprecedented traffic and trading", with the digital currency hitting record levels. Bitcoin fell as much as 6.5 per cent to $2,263.72 at around 1730 GMT on Thursday, but rebounded shortly after to hit a fresh all-time high of $2,760.10. Bitcoin hit a record on the BitStamp platform on Wednesday, driven by an uptick in demand for crypto-assets, with the creation of new tokens to raise funding for start-ups using blockchain, the underlying technology behind bitcoin. So far this year, the price of bitcoin has more than doubled. Coinbase, the world's largest bitcoin company with operations in 32 countries, said the heavy traffic had caused outages at its website as well. The exchange said it was working to resolve the issues. Problems that Coinbase's platform experienced earlier this week, including card verification failures and slow load times, were resolved, its status page showed. (Reuters)

Coinbase suffers outages as digital currency hits record levels

A fast-moving wave of cyberattacks swept the globe Friday, apparently exploiting a flaw exposed in documents leaked from the US National Security Agency.

The attacks -- which experts said affected dozens of countries -- used a technique known as ransomware that locks users&#39; files unless they pay the attackers a designated sum in the virtual currency Bitcoin.

Affected by the onslaught were computer networks at hospitals in Britain, Russia&#39;s interior ministry, the Spanish telecom giant Telefonica and the US delivery firm FedEx and many other organizations.

Britain&#39;s National Cyber Security Centre and its National Crime Agency were looking into the UK incidents, which disrupted care at National Health Service facilities.

&quot;This is not targeted at the NHS, it&#39;s an international attack and a number of countries and organizations have been affected,&quot; British Prime Minister Theresa May said.

Russia&#39;s interior ministry said that some of its computers had been hit by a &quot;virus attack&quot; and that efforts were underway to destroy it.

The US Department of Homeland Security&#39;s computer emergency response team said it was aware of ransomware infections &quot;in several countries around the world.&quot;

Jakub Kroustek of the security firm Avast said in a blog post update around 2000 GMT, &nbsp;&quot;We are now seeing more than 75,000 detections... in 99 countries.&quot;

Kaspersky researcher Costin Raiu cited 45,000 attacks in 74 countries, saying that the malware, a self-replicating &quot;worm,&quot; was spreading quickly.

In a statement, Kaspersky Labs said it was &quot;trying to determine whether it is possible to decrypt data locked in the attack -- with the aim of developing a decryption tool as soon as possible.&quot;

&#39;Unequivocally scary&#39; 
&quot;It&#39;s unequivocally scary,&quot; said John Dickson of the Denim Group, a US security consultancy.

Dickson said the malware itself, which exploits a flaw in Windows, was not new but that adding the ransomware &quot;payload&quot; made it especially dangerous.

&quot;I&#39;m watching how far this propagates and when governments get involved,&quot; he said.

The malware&#39;s name is WCry, but analysts were also using variants such as WannaCry.

Forcepoint Security Labs said in a statement that the attack had &quot;global scope&quot; and was affecting networks in Australia, Belgium, France, Germany, Italy and Mexico.

In the United States, FedEx acknowledged it had been hit by malware and was &quot;implementing remediation steps as quickly as possible.&quot;

Britain&#39;s National Health Service declared a &quot;major incident&quot; after the attack, which forced some hospitals to divert ambulances and scrap operations.

Message to users: &#39;Oops&#39; 
Pictures posted on social media showed screens of NHS computers with images demanding payment of $300 (275 euros) in Bitcoin, saying: &quot;Ooops, your files have been encrypted!&quot;

It demands payment in three days or the price is doubled, and if none is received in seven days, the files will be deleted, according to the screen message.

A hacking group called Shadow Brokers released the malware in April claiming to have discovered the flaw from the NSA, Kaspersky said.

Although Microsoft released a security patch for the flaw earlier this year, many systems have yet to be updated, researchers said.

&quot;Unlike most other attacks, this malware is spreading primarily by direct infection from machine to machine on local networks, rather than purely by email,&quot; Lance Cottrell, chief scientist at the US technology group Ntrepid.&nbsp;

&quot;The ransomware can spread without anyone opening an email or clicking on a link.&quot;

The sort of ransom demands have been growing precedent at medical facilities. In February 2016, a Los Angeles hospital, the Hollywood Presbyterian Medical Center, paid $17,000 in Bitcoin to hackers who took control of its computers for more than a week.

&quot;Ransomware becomes particularly nasty when it infects institutions like hospitals, where it can put people&#39;s lives in danger,&quot; said Kroustek, the Avast analyst.

A spokesman for Barts Health NHS Trust in London said it was experiencing &quot;major IT disruption&quot; and delays at all four of its hospitals.

&quot;We have activated our major incident plan to make sure we can maintain the safety and welfare of patients,&quot; the spokesman said. &quot;Ambulances are being diverted to neighboring hospitals.&quot;

Two employees at St Bartholomew&#39;s Hospital, which is part of Barts Health, told AFP that all the computers in the hospital had been turned off.

Caroline Brennan, 41, went to the hospital to see her brother, who had open heart surgery.

&quot;They told us there was a problem. They said the system was down and that they cannot transfer anyone till the computer system was back up,&quot; Brennan said.

Some said the attacks highlighted the need for agencies like the NSA to disclose security flaws so they can be patched.

&quot;These attacks underscore the fact that vulnerabilities will be exploited not just by our security agencies, but by hackers and criminals around the world,&quot; said Patrick Toomey of the American Civil Liberties Union.

(AFP) 
&nbsp;

The ransomware locked users' files unless they paid up, in Bitcoin.

A fast-moving wave of cyberattacks swept the globe Friday, apparently exploiting a flaw exposed in documents leaked from the US National Security Agency. The attacks -- which experts said affected dozens of countries -- used a technique known as ransomware that locks users' files unless they pay the attackers a designated sum in the virtual currency Bitcoin. Affected by the onslaught were computer networks at hospitals in Britain, Russia's interior ministry, the Spanish telecom giant Telefonica and the US delivery firm FedEx and many other organizations. Britain's National Cyber Security Centre and its National Crime Agency were looking into the UK incidents, which disrupted care at National Health Service facilities. "This is not targeted at the NHS, it's an international attack and a number of countries and organizations have been affected," British Prime Minister Theresa May said. Russia's interior ministry said that some of its computers had been hit by a "virus attack" and that efforts were underway to destroy it. The US Department of Homeland Security's computer emergency response team said it was aware of ransomware infections "in several countries around the world." Jakub Kroustek of the security firm Avast said in a blog post update around 2000 GMT, "We are now seeing more than 75,000 detections... in 99 countries." Kaspersky researcher Costin Raiu cited 45,000 attacks in 74 countries, saying that the malware, a self-replicating "worm," was spreading quickly. In a statement, Kaspersky Labs said it was "trying to determine whether it is possible to decrypt data locked in the attack -- with the aim of developing a decryption tool as soon as possible." 'Unequivocally scary' "It's unequivocally scary," said John Dickson of the Denim Group, a US security consultancy. Dickson said the malware itself, which exploits a flaw in Windows, was not new but that adding the ransomware "payload" made it especially dangerous. "I'm watching how far this propagates and when governments get involved," he said. The malware's name is WCry, but analysts were also using variants such as WannaCry. Forcepoint Security Labs said in a statement that the attack had "global scope" and was affecting networks in Australia, Belgium, France, Germany, Italy and Mexico. In the United States, FedEx acknowledged it had been hit by malware and was "implementing remediation steps as quickly as possible." Britain's National Health Service declared a "major incident" after the attack, which forced some hospitals to divert ambulances and scrap operations. Message to users: 'Oops' Pictures posted on social media showed screens of NHS computers with images demanding payment of $300 (275 euros) in Bitcoin, saying: "Ooops, your files have been encrypted!" It demands payment in three days or the price is doubled, and if none is received in seven days, the files will be deleted, according to the screen message. A hacking group called Shadow Brokers released the malware in April claiming to have discovered the flaw from the NSA, Kaspersky said. Although Microsoft released a security patch for the flaw earlier this year, many systems have yet to be updated, researchers said. "Unlike most other attacks, this malware is spreading primarily by direct infection from machine to machine on local networks, rather than purely by email," Lance Cottrell, chief scientist at the US technology group Ntrepid. "The ransomware can spread without anyone opening an email or clicking on a link." The sort of ransom demands have been growing precedent at medical facilities. In February 2016, a Los Angeles hospital, the Hollywood Presbyterian Medical Center, paid $17,000 in Bitcoin to hackers who took control of its computers for more than a week. "Ransomware becomes particularly nasty when it infects institutions like hospitals, where it can put people's lives in danger," said Kroustek, the Avast analyst. A spokesman for Barts Health NHS Trust in London said it was experiencing "major IT disruption" and delays at all four of its hospitals. "We have activated our major incident plan to make sure we can maintain the safety and welfare of patients," the spokesman said. "Ambulances are being diverted to neighboring hospitals." Two employees at St Bartholomew's Hospital, which is part of Barts Health, told AFP that all the computers in the hospital had been turned off. Caroline Brennan, 41, went to the hospital to see her brother, who had open heart surgery. "They told us there was a problem. They said the system was down and that they cannot transfer anyone till the computer system was back up," Brennan said. Some said the attacks highlighted the need for agencies like the NSA to disclose security flaws so they can be patched. "These attacks underscore the fact that vulnerabilities will be exploited not just by our security agencies, but by hackers and criminals around the world," said Patrick Toomey of the American Civil Liberties Union. (AFP)

Fast-moving cyberattacks wreak havoc worldwide

Digital currency bitcoin hit a record high as demand for crypto-assets soared with the creation of new tokens to raise funding for start-ups using blockchain technology.

Blockchain, the underlying technology behind bitcoin, is a financial ledger maintained by a network of computers that can track the movement of any asset wthout the need for a central regulator.

Bitcoin hit a record $1,760.40 on the BitStamp platform and was last at $1,747.89, up 6 per cent on the day. So far this year, bitcoin has surged nearly 80 per cent. Bitcoin&#39;s market capitalisation soared to $52.5 billion, according to data from coinmarketcap.com.

Aside from being an asset that can be traded on exchanges like stocks and bonds, bitcoin has become a mode of payment for some retailers, such as Overstock.com, and a way to transfer funds without the need for a third party.

&quot;We have an influx of new capital in the space and that capital goes back and forth among crypto-assets and bitcoin,&quot; said Chris Burniske, blockchain products leader at ARK Invest in New York, which manages exchange-traded funds.

&quot;Bitcoin is still the main liquidity provider in the market and people use it to buy other crypto-assets.&quot;

That said, Minneapolis Federal Reserve Bank President Neel Kashkari has been skeptical about bitcoin&#39;s outlook, noting that blockchain has more potential for being adopted in the future than the digital currency itself.

&quot;I think sentiment has shifted in the markets, in the Fed,&quot; Kashkari said at a technology conference in Minneapolis on Tuesday.

Still, a big part of bitcoin&#39;s recent surge is the increase in demand for other digital currencies being sold in so-called &quot;initial coin offerings,&quot; or ICOs. Under ICOs, blockchain start-ups sell their tokens directly to the public to raise capital without any regulatory oversight.

At least 40 start-ups have launched an ICO this year, according to Smith + Crown data.

&quot;For the first time in financial history, founders can access capital from both large and small investors armed with nothing more than a slick website,&quot; said Arthur Hayes, chief executive at crypto-currency derivatives trading platform BitMEX.

Analysts say the foundation for bitcoin&#39;s gains was set last July in a process called &quot;halving,&quot; in which rewards offered to bitcoin miners shrink. That has constrained bitcoin&#39;s supply.

Bitcoin relies on so-called &quot;mining&quot; computers that validate blocks of transactions by competing to solve mathematical puzzles every 10 minutes. In return, the first to solve the puzzle and clear the transaction is rewarded with new bitcoins.

(Reuters)

Aside from being an asset, Bitcoin has become a mode of payment for some retailers

Digital currency bitcoin hit a record high as demand for crypto-assets soared with the creation of new tokens to raise funding for start-ups using blockchain technology. Blockchain, the underlying technology behind bitcoin, is a financial ledger maintained by a network of computers that can track the movement of any asset wthout the need for a central regulator. Bitcoin hit a record $1,760.40 on the BitStamp platform and was last at $1,747.89, up 6 per cent on the day. So far this year, bitcoin has surged nearly 80 per cent. Bitcoin's market capitalisation soared to $52.5 billion, according to data from coinmarketcap.com. Aside from being an asset that can be traded on exchanges like stocks and bonds, bitcoin has become a mode of payment for some retailers, such as Overstock.com, and a way to transfer funds without the need for a third party. "We have an influx of new capital in the space and that capital goes back and forth among crypto-assets and bitcoin," said Chris Burniske, blockchain products leader at ARK Invest in New York, which manages exchange-traded funds. "Bitcoin is still the main liquidity provider in the market and people use it to buy other crypto-assets." That said, Minneapolis Federal Reserve Bank President Neel Kashkari has been skeptical about bitcoin's outlook, noting that blockchain has more potential for being adopted in the future than the digital currency itself. "I think sentiment has shifted in the markets, in the Fed," Kashkari said at a technology conference in Minneapolis on Tuesday. Still, a big part of bitcoin's recent surge is the increase in demand for other digital currencies being sold in so-called "initial coin offerings," or ICOs. Under ICOs, blockchain start-ups sell their tokens directly to the public to raise capital without any regulatory oversight. At least 40 start-ups have launched an ICO this year, according to Smith + Crown data. "For the first time in financial history, founders can access capital from both large and small investors armed with nothing more than a slick website," said Arthur Hayes, chief executive at crypto-currency derivatives trading platform BitMEX. Analysts say the foundation for bitcoin's gains was set last July in a process called "halving," in which rewards offered to bitcoin miners shrink. That has constrained bitcoin's supply. Bitcoin relies on so-called "mining" computers that validate blocks of transactions by competing to solve mathematical puzzles every 10 minutes. In return, the first to solve the puzzle and clear the transaction is rewarded with new bitcoins. (Reuters)

Digital currency Bitcoin hits record high; now valued over $1700

When hackers penetrated a secure authentication system at a bitcoin exchange called Bitfinex earlier this month, they stole about $70 million worth of the virtual currency. 
 
The cyber theft -- the second largest by an exchange since hackers took roughly $350 million in bitcoins at Tokyo&#39;s MtGox exchange in early 2014 -- is hardly a rare occurrence in the emerging world of crypto-currencies. 
 
New data disclosed to Reuters shows a third of bitcoin trading platforms have been hacked, and nearly half have closed in the half dozen years since they burst on the scene. 
 
This rising risk for bitcoin holders is compounded by the fact there is no depositor&#39;s insurance to absorb the loss, even though many exchanges act like virtual banks. 
 
Not only does that approach cast the cyber security risk in stark relief, but it also exposes the fact that bitcoin investors have little choice but to do business with under-capitalized exchanges that may not have the capital 
buffer to absorb these losses the way a traditional and regulated bank or exchange would. 
 
&quot;There is a general sense in the bitcoin community that any centralized repository is at risk,&quot; said a US-based professional trader who lost about $1,000 in bitcoins when Bitfinex was hacked. He declined to be named for this article. 
 
&quot;So when investing, you always have that expectation at the back of your head. I lost a small amount compared to the others, but I know of traders who lost millions of dollars worth of bitcoins,&quot; the trader said. 
 
The security challenge for the bitcoin world does not appear to be letting up, according to experts in the currency. 
 
&quot;I am skeptical there&#39;s going to be any technological silver bullet that&#39;s going to solve security breach problems. No technology, crypto-currency, or financial mechanism can be made safe from hacks,&quot; said Tyler Moore, assistant professor of cyber security at the University of Tulsa&#39;s Tandy School of Computer Science who will soon publish the new research on the vulnerability of bitcoin exchanges. 
 
His study, funded by the US Department of Homeland Security and shared with Reuters, shows that since bitcoin&#39;s creation in 2009 to March 2015, 33 percent of all bitcoin exchanges operational during that period were hacked. The figure represents one of the first estimates of the extent of security breaches in the bitcoin world. 
 
In contrast, data from the Privacy Rights Clearinghouse, a non-profit organization, showed that of the 6,000 operational US banks, only 67 banks experienced a publicly-disclosed data breach between 2009 and 2015. That&#39;s roughly one per cent of US banks. 
 
Among the world&#39;s stock exchanges, however, security breaches are much higher, with hackers attracted to the large pools of cash moving in and out of these trading venues. The latest survey of 46 securities exchanges released three years ago by the International Organization of Securities Commissions and World Federation of Exchanges found that more than half had experienced a cyber attack. 
 
Moore collaborated on the research with Nicolas Christin, associate research professor at Carnegie Mellon University and Janos Szurdi, a PhD student also at Carnegie. 
 
&nbsp; In 2013, Moore and Christin wrote a research paper on security risks surrounding bitcoin exchanges when Moore was still a professor at Southern Methodist University. That research entitled &ldquo;Beware of the Middleman: Empirical Analysis of Bitcoin-Exchange Risk&rdquo; was peer-reviewed and presented at the 17th International Financial Cryptography and Data Security Conference in Okinawa, Japan in 2013. 
 
In the most recent study, the rate of closure for bitcoin exchanges in Moore&#39;s research edged up to 48 per cent among those operating from 2009 to March 2015. Hacking did not necessarily trigger the closure in each case. 
 
&quot;A 48 per cent closure is not acceptable, but not surprising given that bitcoin is a new technology,&quot; said Richard Johnson, vice president of market structure and technology at Greenwich Associates. Johnson has written reports on risk and security issues in the crypto-currency world. 
 
Profitability is a big problem for bitcoin exchanges, with many of them unable to generate enough volume to keep afloat. 
 
Bitcoin exchanges overall could be launched for as low as $100,000 up to $1 million, said Erik Voorhees, founder and chief executive officer of digital currency exchange ShapeShift. That is a fraction of what U.S. forex exchanges&#39; are required to put up. 
 
Retail FX trading platform FXCM, for instance, is required by the Commodity Futures Trading Commission to have at least $25 million in capital at all times. 
 
Recovering losses 
 
A key factor tied to the risk posed by exchanges is whether customers are reimbursed after closure or after the loss of bitcoins following a hack. Each closure and breach have been handled differently, but Tandy&#39;s Moore said the risk of losing funds stored in exchanges are real. 
 
In the case of Bitfinex, which is now up and running after the hack August 2, customers lost 36 per cent of the assets they had on the platform and were compensated for the losses with tokens of credit that would be converted into equity in the parent company. 
 
At Tokyo&#39;s MtGox, customers have yet to recover their investments more than two years after closure. 
 
Experts say trading venues acting like banks such as Bitfinex will remain vulnerable. These exchanges act as custodial wallets in which they control users&#39; digital currencies like banks control customer deposits. 
 
&quot;The big exchanges that hold customer deposits are a big target for hackers,&quot; said ShapeShift&#39;s Voorhees, &quot;and unfortunately most bitcoin exchanges store user funds.&quot; 
 
When customers&#39; checking accounts are hacked, there is always a third party at the bank that can step in to deal with the theft. 
 
Not so with bitcoin, said Seattle-based Darin Stanchfield, chief executive officer at KeepKey, a hardware wallet provider. He expects more of these attacks to happen despite efforts to improve security at bitcoin exchanges. 
 
(Reuters) 
 
&nbsp;

Rising risk is compounded by the fact there is no depositor's insurance to absorb the loss, even though many exchanges act like virtual bank

When hackers penetrated a secure authentication system at a bitcoin exchange called Bitfinex earlier this month, they stole about $70 million worth of the virtual currency. The cyber theft -- the second largest by an exchange since hackers took roughly $350 million in bitcoins at Tokyo's MtGox exchange in early 2014 -- is hardly a rare occurrence in the emerging world of crypto-currencies. New data disclosed to Reuters shows a third of bitcoin trading platforms have been hacked, and nearly half have closed in the half dozen years since they burst on the scene. This rising risk for bitcoin holders is compounded by the fact there is no depositor's insurance to absorb the loss, even though many exchanges act like virtual banks. Not only does that approach cast the cyber security risk in stark relief, but it also exposes the fact that bitcoin investors have little choice but to do business with under-capitalized exchanges that may not have the capital buffer to absorb these losses the way a traditional and regulated bank or exchange would. "There is a general sense in the bitcoin community that any centralized repository is at risk," said a US-based professional trader who lost about $1,000 in bitcoins when Bitfinex was hacked. He declined to be named for this article. "So when investing, you always have that expectation at the back of your head. I lost a small amount compared to the others, but I know of traders who lost millions of dollars worth of bitcoins," the trader said. The security challenge for the bitcoin world does not appear to be letting up, according to experts in the currency. "I am skeptical there's going to be any technological silver bullet that's going to solve security breach problems. No technology, crypto-currency, or financial mechanism can be made safe from hacks," said Tyler Moore, assistant professor of cyber security at the University of Tulsa's Tandy School of Computer Science who will soon publish the new research on the vulnerability of bitcoin exchanges. His study, funded by the US Department of Homeland Security and shared with Reuters, shows that since bitcoin's creation in 2009 to March 2015, 33 percent of all bitcoin exchanges operational during that period were hacked. The figure represents one of the first estimates of the extent of security breaches in the bitcoin world. In contrast, data from the Privacy Rights Clearinghouse, a non-profit organization, showed that of the 6,000 operational US banks, only 67 banks experienced a publicly-disclosed data breach between 2009 and 2015. That's roughly one per cent of US banks. Among the world's stock exchanges, however, security breaches are much higher, with hackers attracted to the large pools of cash moving in and out of these trading venues. The latest survey of 46 securities exchanges released three years ago by the International Organization of Securities Commissions and World Federation of Exchanges found that more than half had experienced a cyber attack. Moore collaborated on the research with Nicolas Christin, associate research professor at Carnegie Mellon University and Janos Szurdi, a PhD student also at Carnegie. In 2013, Moore and Christin wrote a research paper on security risks surrounding bitcoin exchanges when Moore was still a professor at Southern Methodist University. That research entitled “Beware of the Middleman: Empirical Analysis of Bitcoin-Exchange Risk” was peer-reviewed and presented at the 17th International Financial Cryptography and Data Security Conference in Okinawa, Japan in 2013. In the most recent study, the rate of closure for bitcoin exchanges in Moore's research edged up to 48 per cent among those operating from 2009 to March 2015. Hacking did not necessarily trigger the closure in each case. "A 48 per cent closure is not acceptable, but not surprising given that bitcoin is a new technology," said Richard Johnson, vice president of market structure and technology at Greenwich Associates. Johnson has written reports on risk and security issues in the crypto-currency world. Profitability is a big problem for bitcoin exchanges, with many of them unable to generate enough volume to keep afloat. Bitcoin exchanges overall could be launched for as low as $100,000 up to $1 million, said Erik Voorhees, founder and chief executive officer of digital currency exchange ShapeShift. That is a fraction of what U.S. forex exchanges' are required to put up. Retail FX trading platform FXCM, for instance, is required by the Commodity Futures Trading Commission to have at least $25 million in capital at all times. Recovering losses A key factor tied to the risk posed by exchanges is whether customers are reimbursed after closure or after the loss of bitcoins following a hack. Each closure and breach have been handled differently, but Tandy's Moore said the risk of losing funds stored in exchanges are real. In the case of Bitfinex, which is now up and running after the hack August 2, customers lost 36 per cent of the assets they had on the platform and were compensated for the losses with tokens of credit that would be converted into equity in the parent company. At Tokyo's MtGox, customers have yet to recover their investments more than two years after closure. Experts say trading venues acting like banks such as Bitfinex will remain vulnerable. These exchanges act as custodial wallets in which they control users' digital currencies like banks control customer deposits. "The big exchanges that hold customer deposits are a big target for hackers," said ShapeShift's Voorhees, "and unfortunately most bitcoin exchanges store user funds." When customers' checking accounts are hacked, there is always a third party at the bank that can step in to deal with the theft. Not so with bitcoin, said Seattle-based Darin Stanchfield, chief executive officer at KeepKey, a hardware wallet provider. He expects more of these attacks to happen despite efforts to improve security at bitcoin exchanges. (Reuters)

Cyber threat grows for bitcoin exchanges

Nearly 120,000 units of digital currency bitcoin worth about US$72 million was stolen from the exchange platform Bitfinex in Hong Kong, making it the second-biggest security breach ever of such an exchange. 
 
Bitfinex is one of the largest bitcoin exchanges, and is known in the digital currency community for having a platform that has deep liquidity in the US Dollar-bitcoin currency pair. 
 
Zane Tackett, Director of Community &amp; Product Development for Bitfinex, told Reuters on Wednesday that 119,756 bitcoin had been stolen from users&#39; accounts, and that the exchange had not yet decided how to address customer losses. 
 
&quot;The bitcoin was stolen from users&#39; segregated wallets,&quot; he said. 
 
Bitcoin plunged just over 23 per cent on Tuesday after the news broke. On Wednesday it was up 1 per cent at $545.20 on the BitStamp platform. 
 
Tackett added that the breach did not &quot;expose any weaknesses in the security of a blockchain&quot;, the technology that generates and processes bitcoin, a web-based &quot;cryptocurrency&quot; that can move across the globe anonymously without the need for a central authority. 
 
The volume stolen amounts to about 0.75 per cent of all bitcoin in circulation. 
 
&quot;It&#39;s the biggest USD exchange, so outside China it&#39;s the one that everyone has an account with,&quot; said Antony Lewis, a bitcoin expert in Singapore. &quot;It&#39;s very liquid, folk can trade on margin, lots of daily volume.&quot; 
 
It is not yet clear whether the theft was an inside job or whether hackers were able to gain access to the system externally.&nbsp;Bitfinex suspended trading on Tuesday after it discovered the breach. It said on its website that it was investigating and cooperating with the authorities. 
 
The attack on Bitfinex was reminiscent of a similar but larger breach at MtGox, a Tokyo-based bitcoin exchange that was forced to file for bankruptcy in early 2014 after hackers stole an estimated $650 million worth of customers&#39; bitcoins. 
 
(Reuters)

?The volume stolen amounts to about 0.75 per cent of all bitcoin in circulation. Bitcoin plunged by just over 23% after the news broke

Nearly 120,000 units of digital currency bitcoin worth about US$72 million was stolen from the exchange platform Bitfinex in Hong Kong, making it the second-biggest security breach ever of such an exchange. Bitfinex is one of the largest bitcoin exchanges, and is known in the digital currency community for having a platform that has deep liquidity in the US Dollar-bitcoin currency pair. Zane Tackett, Director of Community & Product Development for Bitfinex, told Reuters on Wednesday that 119,756 bitcoin had been stolen from users' accounts, and that the exchange had not yet decided how to address customer losses. "The bitcoin was stolen from users' segregated wallets," he said. Bitcoin plunged just over 23 per cent on Tuesday after the news broke. On Wednesday it was up 1 per cent at $545.20 on the BitStamp platform. Tackett added that the breach did not "expose any weaknesses in the security of a blockchain", the technology that generates and processes bitcoin, a web-based "cryptocurrency" that can move across the globe anonymously without the need for a central authority. The volume stolen amounts to about 0.75 per cent of all bitcoin in circulation. "It's the biggest USD exchange, so outside China it's the one that everyone has an account with," said Antony Lewis, a bitcoin expert in Singapore. "It's very liquid, folk can trade on margin, lots of daily volume." It is not yet clear whether the theft was an inside job or whether hackers were able to gain access to the system externally. Bitfinex suspended trading on Tuesday after it discovered the breach. It said on its website that it was investigating and cooperating with the authorities. The attack on Bitfinex was reminiscent of a similar but larger breach at MtGox, a Tokyo-based bitcoin exchange that was forced to file for bankruptcy in early 2014 after hackers stole an estimated $650 million worth of customers' bitcoins. (Reuters)

Bitcoin worth $72 million stolen from Hong Kong's Bitfinex exchange

Bitcoin exchange Coinbase said on Thursday it is now offering the Ether digital currency to consumers.&nbsp; 
 
Ether is the digital currency for the Ethereum platform, a blockchain, or public database that can be used by consumers or corporations without the need for control by intermediaries. 
 
Ethereum, which uses Ether to execute peer-to-peer contracts automatically, was co-founded and invented by 22-year old Russian-Canadian programmer Vitalik Buterin. 
 
&quot;Ethereum is still in an early and experimental phase and, as it matures, will likely evolve to serve a different purpose than Bitcoin,&quot; said Ankur Nandwani, product manager at Coinbase, in a blog posted on the company&#39;s website.&nbsp; 
 
&quot;In the meantime, Ethereum is pushing the digital currency ecosystem forward and we are excited to support it as part of our mission to create an open financial system for the world.&quot; 
 
The addition of Ether comes given the surge in interest in the digital asset among major financial institutions such as Barclays and other global corporations which are trying to explore the Ethereum network. 
 
Nandwani said consumers in 32 countries can now buy, sell, and store in their Coinbase accounts. 
 
In May, Ether trading was added to its digital currency exchange called GDAX (Global Digital Asset Exchange). That trading platform is 
focussed on institutional investors and professional traders. 
 
According to coinmarketcap.com, Ether was trading at $12.64 late on Thursday, with a market capitalisation of about $1.04 billion, the 
second largest behind bitcoin. Bitcoin currently has a market cap of $10.48 billion and trading at $664.85.&nbsp; 
 
Volume for Ether over the last 24 hours was around $25.7 million, while that for bitcoin was $61.2 million. 
 
At the beginning of the year, Ether traded at just $1 per token and it is one of the fastest-rising digital currencies. 
 
(Reuters)

Ether is a blockchain, or public database that can be used by consumers without intermediary control

Bitcoin exchange Coinbase said on Thursday it is now offering the Ether digital currency to consumers. Ether is the digital currency for the Ethereum platform, a blockchain, or public database that can be used by consumers or corporations without the need for control by intermediaries. Ethereum, which uses Ether to execute peer-to-peer contracts automatically, was co-founded and invented by 22-year old Russian-Canadian programmer Vitalik Buterin. "Ethereum is still in an early and experimental phase and, as it matures, will likely evolve to serve a different purpose than Bitcoin," said Ankur Nandwani, product manager at Coinbase, in a blog posted on the company's website. "In the meantime, Ethereum is pushing the digital currency ecosystem forward and we are excited to support it as part of our mission to create an open financial system for the world." The addition of Ether comes given the surge in interest in the digital asset among major financial institutions such as Barclays and other global corporations which are trying to explore the Ethereum network. Nandwani said consumers in 32 countries can now buy, sell, and store in their Coinbase accounts. In May, Ether trading was added to its digital currency exchange called GDAX (Global Digital Asset Exchange). That trading platform is focussed on institutional investors and professional traders. According to coinmarketcap.com, Ether was trading at $12.64 late on Thursday, with a market capitalisation of about $1.04 billion, the second largest behind bitcoin. Bitcoin currently has a market cap of $10.48 billion and trading at $664.85. Volume for Ether over the last 24 hours was around $25.7 million, while that for bitcoin was $61.2 million. At the beginning of the year, Ether traded at just $1 per token and it is one of the fastest-rising digital currencies. (Reuters)

Coinbase offers digital currency to consumers

Marco Streng is a miner, though he does not carry a pick around his base in south-west Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. 
 
In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng&#39;s which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. 
 
Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers. 
 
The work Streng&#39;s computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and, because they earn new bitcoins for the work they do, steadily increase the currency in circulation, worth around $10 billion at present. 
 
The process has come to be known as &#39;mining&#39; because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground. 
 
But on Saturday, the reward for miners will be slashed in half. Written into bitcoin&#39;s code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation. 
 
From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate, only 12.5 will be available. 
 
That means only the mining companies with the leanest operations will survive the ensuing profit hit. 
 
&quot;The most important thing is to be the most efficient miner,&quot; said Streng, the 26-year-old co-founder of German firm Genesis Mining, which has &quot;mining farms&quot; in Canada, the United States and eastern Europe, as well as in Iceland. &quot;When the others drop out, that means that they leave the market and give you a bigger share of the pie.&quot; 
 
Solving puzzles 
 
The currency was founded eight years ago by a person or group using the name Satoshi Nakamoto, whose real identity has not been established. It was set up to operate independently of any single authority, instead relying on a decentralised global network. 
 
Because the bitcoin miners operate autonomously, it is hard to track their numbers and size. But in terms of computing capacity, it was estimated earlier this year that the network is 43,000 times more powerful than the world&#39;s top 500 supercomputers combined. 
 
Computers like Streng&#39;s solve complex, automatically generated mathematical puzzles to help secure each block of transactions and keep the bitcoin network safe from hacking or manipulation. For bitcoin users, that security is one of the currency&#39;s main attractions. 
 
After the first miner secures a block of transactions, its work is verified by the other miners in the network, and that block is added to the &quot;blockchain&quot; - a shared record of all the transaction data - which is virtually impossible to tamper with. The mining, therefore, keeps the whole system going. 
 
Bitcoin is now accepted by major organisations including US online retailer Overstock.com and travel company Expedia. 
 
The speed and anonymity of bitcoin transactions, and lack of a central authority overseeing the currency, has drawn in many users, including those who want to get around capital controls. It has also attracted investors who see it as a potentially lucrative commodity in itself. 
 
Keeping cool 
 
Bitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialised as bitcoin usage expands. 
 
As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialised that they can only perform the function of bitcoin mining, a whole industry has emerged. 
 
It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high. 
 
Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin. Equipment, rent, wages and business running costs are on top. 
 
On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin. 
 
In the same remote region of Iceland as the Genesis mining farm, on a former Cold War US military base lies a bitcoin mining facility belonging to US firm Bitfury. A nearby sub-station means electricity transmission costs are minimal. 
 
In the farm&#39;s two vast buildings, tens of thousands of mining machines whir away, producing a huge amount of heat, so the buildings are open to the cold Icelandic air at either side, save for particle filters to trap dust. 
 
Fans in the ceiling allow hot air to escape, but spin so fast that no rain or snow can enter during the winter. The noise produced by computers and fans is deafening. 
 
It is no coincidence that so many mining companies have chosen to build farms in Iceland - Chinese giant Bitmain also has a huge farm there. The volcanic island&#39;s cheap, bountiful, renewable energy supply, good internet connectivity, and cool temperatures make it an ideal location. 
 
The Icelandic authorities welcome the boost to the economy that the bitcoin miners have brought. Bitmain opened its farm after an approach by the Icelandic embassy in Beijing. Genesis&#39;s Streng says he is such a valued client that the Icelandic energy companies fly him around in helicopters. 
 
Bitfury CEO Valery Vavilov, who estimates electricity makes up between 90 and 95 per cent of bitcoin mining costs, says one way his firm stays competitive is by making its own hardware. 
 
He also says the company, founded in 2011, is prepared for the mining reward cut. &quot;We&#39;re prepared - we already went through one halving event in 2012,&quot; he said. &quot;You can forecast this... so you have time to prepare, and if you&#39;re prepared you can live quite easily&quot;. 
 
Vavilov, and other miners, say the prospect of new supply halving has already helped drive bitcoin up over 50 per cent this year, which should help ease the pain. 
 
Competition from China 
 
Despite the fact that the halving was expected, and that the price has risen, it has already claimed one casualty: Sweden&#39;s KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring. 
 
Daniel Masters, who runs a Jersey-based bitcoin hedge fund and who bought a part of KnC&#39;s business, said the Swedish firm, like everybody else, had faced competition from miners in China, which are estimated to make up more than two-thirds of the bitcoin network&#39;s computing power, or &quot;hashpower&quot;. 
 
&quot;It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper,&quot; Masters said. 
 
Some Chinese miners get hydroelectric power from disused dams, while others use cheap coal-powered electricity. 
 
Bitfury and Genesis, though, say their lean operations allow them to fight off the competition. Genesis, for example, keeps cost down by remotely monitoring conditions in its mining farms and adjusting its fans and cooling accordingly. 
 
And the next time the mining reward is halved, in 2020, they hope the number of bitcoin transactions will have grown sufficiently to mean that the small fees paid by users will make up enough of their income to smooth out the profit cut. 
 
&quot;By 2020, we will definitely have had the tipping point,&quot; said Bitfury&#39;s Vavilov. 
 
(Reuters)&nbsp;

Written into the online currency's code is a rule that the reward for miners gets cut in half every four years to limit inflation

Marco Streng is a miner, though he does not carry a pick around his base in south-west Iceland. Instead, he keeps tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. In the world of the web-based digital currency, it is not central banks that add new money to the system, but rather computers like Streng's which are awarded fresh bitcoins in return for processing blocks of the latest bitcoin transactions. Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers. The work Streng's computers and others do serves two purposes: they record and verify the roughly 225,000 daily bitcoin transactions and, because they earn new bitcoins for the work they do, steadily increase the currency in circulation, worth around $10 billion at present. The process has come to be known as 'mining' because it is slow and intensive, reaping a gradual reward in the same way that minerals such as gold are mined from the ground. But on Saturday, the reward for miners will be slashed in half. Written into bitcoin's code when it was invented in 2008 was a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation. From around 1700 GMT on Saturday, instead of 25 bitcoins up for grabs globally every 10 minutes, worth around $16,000 at the current rate, only 12.5 will be available. That means only the mining companies with the leanest operations will survive the ensuing profit hit. "The most important thing is to be the most efficient miner," said Streng, the 26-year-old co-founder of German firm Genesis Mining, which has "mining farms" in Canada, the United States and eastern Europe, as well as in Iceland. "When the others drop out, that means that they leave the market and give you a bigger share of the pie." Solving puzzles The currency was founded eight years ago by a person or group using the name Satoshi Nakamoto, whose real identity has not been established. It was set up to operate independently of any single authority, instead relying on a decentralised global network. Because the bitcoin miners operate autonomously, it is hard to track their numbers and size. But in terms of computing capacity, it was estimated earlier this year that the network is 43,000 times more powerful than the world's top 500 supercomputers combined. Computers like Streng's solve complex, automatically generated mathematical puzzles to help secure each block of transactions and keep the bitcoin network safe from hacking or manipulation. For bitcoin users, that security is one of the currency's main attractions. After the first miner secures a block of transactions, its work is verified by the other miners in the network, and that block is added to the "blockchain" - a shared record of all the transaction data - which is virtually impossible to tamper with. The mining, therefore, keeps the whole system going. Bitcoin is now accepted by major organisations including US online retailer Overstock.com and travel company Expedia. The speed and anonymity of bitcoin transactions, and lack of a central authority overseeing the currency, has drawn in many users, including those who want to get around capital controls. It has also attracted investors who see it as a potentially lucrative commodity in itself. Keeping cool Bitcoin mining started out as a hobby for tech geeks using their home computers in the early years of the virtual currency, but has become more specialised as bitcoin usage expands. As the bitcoin price has risen, as transaction numbers have grown and as the computers have become so specialised that they can only perform the function of bitcoin mining, a whole industry has emerged. It can be profitable if firms are able to keep their expenses low. But the costs of running these machines, which cost around $1,800 each, and keeping them cool are fiendishly high. Streng reckons that, on average, it costs about $200 in electricity, including cooling power, to mine one bitcoin. Equipment, rent, wages and business running costs are on top. On Saturday, all else being equal, the halving of the reward will double that cost, to $400, leaving a small margin for profit at the current exchange rate of around $640 per bitcoin. In the same remote region of Iceland as the Genesis mining farm, on a former Cold War US military base lies a bitcoin mining facility belonging to US firm Bitfury. A nearby sub-station means electricity transmission costs are minimal. In the farm's two vast buildings, tens of thousands of mining machines whir away, producing a huge amount of heat, so the buildings are open to the cold Icelandic air at either side, save for particle filters to trap dust. Fans in the ceiling allow hot air to escape, but spin so fast that no rain or snow can enter during the winter. The noise produced by computers and fans is deafening. It is no coincidence that so many mining companies have chosen to build farms in Iceland - Chinese giant Bitmain also has a huge farm there. The volcanic island's cheap, bountiful, renewable energy supply, good internet connectivity, and cool temperatures make it an ideal location. The Icelandic authorities welcome the boost to the economy that the bitcoin miners have brought. Bitmain opened its farm after an approach by the Icelandic embassy in Beijing. Genesis's Streng says he is such a valued client that the Icelandic energy companies fly him around in helicopters. Bitfury CEO Valery Vavilov, who estimates electricity makes up between 90 and 95 per cent of bitcoin mining costs, says one way his firm stays competitive is by making its own hardware. He also says the company, founded in 2011, is prepared for the mining reward cut. "We're prepared - we already went through one halving event in 2012," he said. "You can forecast this... so you have time to prepare, and if you're prepared you can live quite easily". Vavilov, and other miners, say the prospect of new supply halving has already helped drive bitcoin up over 50 per cent this year, which should help ease the pain. Competition from China Despite the fact that the halving was expected, and that the price has risen, it has already claimed one casualty: Sweden's KnCMiner filed for bankruptcy at the end of May, citing the hit to its profits that the reward cut would bring. Daniel Masters, who runs a Jersey-based bitcoin hedge fund and who bought a part of KnC's business, said the Swedish firm, like everybody else, had faced competition from miners in China, which are estimated to make up more than two-thirds of the bitcoin network's computing power, or "hashpower". "It turned out that the Chinese, who really stormed into the mining market in the last couple of years, could just do this whole thing cheaper," Masters said. Some Chinese miners get hydroelectric power from disused dams, while others use cheap coal-powered electricity. Bitfury and Genesis, though, say their lean operations allow them to fight off the competition. Genesis, for example, keeps cost down by remotely monitoring conditions in its mining farms and adjusting its fans and cooling accordingly. And the next time the mining reward is halved, in 2020, they hope the number of bitcoin transactions will have grown sufficiently to mean that the small fees paid by users will make up enough of their income to smooth out the profit cut. "By 2020, we will definitely have had the tipping point," said Bitfury's Vavilov. (Reuters)

Bitcoin 'miners' face fight for survival

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