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The Silver to Bitcoin’s Gold

Priced out of the Bitcoin market? Look no further than Litecoin, an alternative cryptocurrency that’s gaining popularity fast.

When we first wrote about Bitcoin, back in May 2011, we asked whether the same forces that are changing the entertainment, media and communications industries could affect global financial institutions.

That vision has yet to come to pass in the two years since, but Bitcoin’s value has soared from $8 then to $100 at the time of writing.

Litecoin, an almost-identical cryptocurrency with a few small tweaks – it’s easier to generate, and there’s more of it. In this way, Business Insider calls it “the ‘silver’ to Bitcoin’s ‘gold'”.

To be more specific, while Bitcoin circulation is capped at 21 million, 84 million Litecoins will be generated. Plus, Litecoin transactions only take 2.5 minutes to process, whereas Bitcoins take up to ten minutes to complete.

The final difference is in security. Litecoin is orders of magnitude more secure than Bitcoin, due to its use of a cryptography technique called scrypt, which makes it very costly to attack due to the large amounts of memory involved.

Right now, Litecoin is still in an embryonic state compared to the Bitcoin ecosystem. It’s value is hovering around the $2 mark, and it’s not yet supported by the largest Bitcoin exchange, Mt.Gox (though the site has pledged to add support soon).

In the meantime, if you’d like to get stuck in, the best place to start is litecoin.org, where you can download the client for Windows, OS X and Linux.

Source: Wired

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Bitcoin is Here to Stay

Bitcoin has shot up and crashed at least twice now.

Exchanges where the fast-rising new digital currency trades have been hacked, and so have individual accounts. It’s been linked to illegal activity in underground cyber haunts such as Silk Road, and sparked a move by the U.S. government to halt unregulated use.

And Bitcoin persists.

Heck, CNBC has a Bitcoin ticker on its website.

In its fourth year of circulation now, the decentralized online-only form of money has evolved from a libertarian-styled geek curiosity to a contender for becoming the first digital currency to go truly mainstream. There are now more than 11 million “coins” created worth more than $1 billion. Lumpy and volatile as it is, the math-based cash is one of the fastest rising alternative currencies in a world filled with them.

Tyler Moore, who studies alternative currencies, said he still isn’t sure why.

“It’s one part luck, one part decentralization and one part this design that carries appeal for people that don’t like inflation,” said Moore, an assistant professor of computer science and engineering at Southern Methodist University in Dallas. “The timing of it was really good.”

Bitcoin slipped onto the scene in 2009, as trust in established banks crumbled and inflation fears rose. It’s not managed by anyone. There’s no central bank. It’s based on open-source encryption technology.

In fact, the digital cash can be created by anyone with the hefty computer power required to solve specified algorithms that secure the network. Bitcoins are rewards for effort. The system takes banks out of the picture completely as individuals pay each other directly. Transactions are private but because there’s a public ledger of them it’s unlikely they are perfectly anonymous.

Currently, about 25 more Bitcoins are introduced about every 10 minutes by people all over the world, pros say. The limit of 21 million Bitcoins will be reached by 2140, as the theory goes, and no more Bitcoins will be created. On Friday one Bitcoin was trading for about $112.

A newly developed Bitcoin “ATM” machine that’s expected to go into production this fall promises to make it easy to turn dollars into Bitcoins, and more and more retailers are accepting Bitcoin for payment. But the bottom line is that there still isn’t a great deal you can do, legally, with the digital money. Gamblers like to use it for online gambling, pros say. Bitcoin is still largely about techies in cyberspace.Source: StarTribune

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Bitcoin Mixing Services

As the cryptocurrency arms race escalates beyond identity verification at exchange endpoints, mixing services for bitcoin may emerge as the next frontier in the battle for financial privacy.

If bitcoin exchange regulation becomes so effective that exchange operators are required to link specific bitcoin addresses to individual customers, then users may have few remaining choices should they want to maintain transactional privacy. Call it the law of unintended consequences for overarching bitcoin exchange regulation.

Two facets of the growing political debate on anonymizing services are the traditional centralized bitcoin mixers and the newer decentralized bitcoin mixers that require a modification to the Bitcoin protocol.

With traditional bitcoin mixers, the process could become highly-charged politically and the regulatory status of mixing services called into question. Reliable legal jurisdictions for operating bitcoin mixing services would therefore gain prominence since it reasonably could be viewed as a protected free speech issue. Potentially, Iceland could serve as a bitcoin mixing haven.

The emergence of services that mingle bitcoin for the purpose of returning bitcoin not associated with the original input address has had a somewhat spotty history. Also called bitcoin laundries, these web-based services charge bitcoin holders a nominal fee to receive different bitcoins than the ones initially transferred. The sites never handle national currencies like the dollar or euro so technically they are not exchanges. Also, the administrator of the service has to be trusted to delete any archival logs and not to run off with the coins.

Source: Forbes

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Tip Bitcoin to Reddit Users

Among its fans and believers, the good ship Bitcoin sails on. To that end, folks over at Reddit have experimented and created a new way to tip Bitcoin to other users of the social website. Reddit recently introduced a system by which users can ‘mention’ other users; that capability opened the door for users of /r/Bitcoin to create a bot that allows for tipping.

The tipping service is now open to all Reddit subreddits, and all users, making it a site-wide experience. Details on how to get yourself up and running can be found here. In practice, the tipping is quite simple:

To tip the parent comment/post one dollar: +/u/bitcointip $1
To tip user Bob .5 BTC: +/u/bitcointip @Bob .5 BTC

It’s a simple, neat method to reward other users for behaving in a way that you approve of. The obvious analog to this new – albeit user-generated – capability is Reddit’s official system by which users can give each other ‘Gold,’ the service’s premium user experience that costs a few dollars.

Source: The Next Web