This May 1, 2014 photo taken in Washington, DC shows a bitcoin medal. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. The Massachusetts Institute of Technology (MIT) announced on April 29, 2014 it would give $100 in Bitcoin to its 4,500 students starting in the Fall of 2014. The project started by two MIT students aims for a better understanding of emerging technologies. AFP PHOTO / Karen BLEIERKAREN BLEIER/AFP/Getty Images ORG XMIT: - ORIG FILE ID: 529392797(Photo: KAREN BLEIER, AFP/Getty Images)

It's official: Companies dealing in cybercurrecy bitcoin now have to get a bitlicense to operate in New York state a rule that could spread to other states if successful.

Just weeks before he is set to leave his regulatory role for private practice, Ben Lawksy, head of New York's Department of Financial Services (DFS), released rules Wednesday outlining what bitcoin peddlers need to do to obtain and retain a "bitlicense" to operate in state.

DFS has regulatory oversight over dozens of N.Y. licensed banks and insurance companies, including Goldman Sachs, MetLife and Barclays. As head of DFS, Lawsky has has made it his mission to regulate cybercurrencies, which have been tied to some high-profile drug cases and other illegal activity.

The 44-page document of final rules released Wednesday explains such details as cost of an application ($5,000) for a license, as well as what the license will allow companies to do.

"License required," the document warns. "No person shall, without a license obtained from the superintendent as provided in this part, engage in any virtual currency business activity." In other words: No license, no bitcoin activity in the Empire State.

The barriers to entry can be high. Companies seeking a bitlicense will need to have a compliance officer, for example, who will be responsible for making sure the firm is in compliance with its bitlicense rules, and all other applicable federal and state laws that apply to bitcoin, such as money trasmitter laws and laws to protect against money laundering. Such protections can get expensive.

Lawsky's bitlicense has been controversial among folks who argue that the rules threaten to raise costs and restrict innovation. Some opponents have argued that the license will give large institutions such as big banks that are fearful of competition of the competition the advantage over smaller startups when it comes to growing the cyber coin.

Lawsky on Wednesday vowed that he did his best to balance the rules and make them fair for both operators and the bitcoin users he is seeking to protect.

"Getting that balance right is hard, but it is key," Lawsky said in a speech at the BITS Emerging Payments Forum in Washing, DC, where Lawsky announced the new rules. "We want to promote and support companies that use new, emerging technologies to build better financial companies. We just need to make sure that we put appropriate regulatory guardrails in place," he said.

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'Bitlicense' rules regulating bitcoin released

Skip Article Header. Skip to: Start of Article. Illustration: Martin Venezky

In November 1, 2008, a man named Satoshi Nakamoto posted a research paper to an obscure cryptography listserv describing his design for a new digital currency that he called bitcoin. None of the lists veterans had heard of him, and what little information could be gleaned was murky and contradictory. In an online profile, he said he lived in Japan. His email address was from a free German service. Google searches for his name turned up no relevant information; it was clearly a pseudonym. But while Nakamoto himself may have been a puzzle, his creation cracked a problem that had stumped cryptographers for decades. The idea of digital moneyconvenient and untraceable, liberated from the oversight of governments and bankshad been a hot topic since the birth of the Internet. Cypherpunks, the 1990s movement of libertarian cryptographers, dedicated themselves to the project. Yet every effort to create virtual cash had foundered. Ecash, an anonymous system launched in the early 1990s by cryptographer David Chaum, failed in part because it depended on the existing infrastructures of government and credit card companies. Other proposals followedbit gold, RPOW, b-moneybut none got off the ground.

One of the core challenges of designing a digital currency involves something called the double-spending problem. If a digital dollar is just information, free from the corporeal strictures of paper and metal, whats to prevent people from copying and pasting it as easily as a chunk of text, spending it as many times as they want? The conventional answer involved using a central clearinghouse to keep a real-time ledger of all transactionsensuring that, if someone spends his last digital dollar, he cant then spend it again. The ledger prevents fraud, but it also requires a trusted third party to administer it.

Bitcoin did away with the third party by publicly distributing the ledger, what Nakamoto called the block chain. Users willing to devote CPU power to running a special piece of software would be called miners and would form a network to maintain the block chain collectively. In the process, they would also generate new currency. Transactions would be broadcast to the network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions. The first miner to solve each puzzle would be awarded 50 new bitcoins, and the associated block of transactions would be added to the chain. The difficulty of each puzzle would increase as the number of miners increased, which would keep production to one block of transactions roughly every 10 minutes. In addition, the size of each block bounty would halve every 210,000 blocksfirst from 50 bitcoins to 25, then from 25 to 12.5, and so on. Around the year 2140, the currency would reach its preordained limit of 21 million bitcoins.

When Nakamotos paper came out in 2008, trust in the ability of governments and banks to manage the economy and the money supply was at its nadir. The US government was throwing dollars at Wall Street and the Detroit car companies. The Federal Reserve was introducing quantitative easing, essentially printing money in order to stimulate the economy. The price of gold was rising. Bitcoin required no faith in the politicians or financiers who had wrecked the economyjust in Nakamotos elegant algorithms. Not only did bitcoins public ledger seem to protect against fraud, but the predetermined release of the digital currency kept the bitcoin money supply growing at a predictable rate, immune to printing-press-happy central bankers and Weimar Republic-style hyperinflation.

Nakamoto himself mined the first 50 bitcoinswhich came to be called the genesis blockon January 3, 2009. For a year or so, his creation remained the province of a tiny group of early adopters. But slowly, word of bitcoin spread beyond the insular world of cryptography. It has won accolades from some of digital currencys greatest minds. Wei Dai, inventor of b-money, calls it very significant; Nick Szabo, who created bit gold, hails bitcoin as a great contribution to the world; and Hal Finney, the eminent cryptographer behind RPOW, says its potentially world-changing. The Electronic Frontier Foundation, an advocate for digital privacy, eventually started accepting donations in the alternative currency.

The small band of early bitcoiners all shared the communitarian spirit of an open source software project. Gavin Andresen, a coder in New England, bought 10,000 bitcoins for $50 and created a site called the Bitcoin Faucet, where he gave them away for the hell of it. Laszlo Hanyecz, a Florida programmer, conducted what bitcoiners think of as the first real-world bitcoin transaction, paying 10,000 bitcoins to get two pizzas delivered from Papa Johns. (He sent the bitcoins to a volunteer in England, who then called in a credit card order transatlantically.) A farmer in Massachusetts named David Forster began accepting bitcoins as payment for alpaca socks.

When they werent busy mining, the faithful tried to solve the mystery of the man they called simply Satoshi. On a bitcoin IRC channel, someone noted portentously that in Japanese Satoshi means wise. Someone else wondered whether the name might be a sly portmanteau of four tech companies: SAmsung, TOSHIba, NAKAmichi, and MOTOrola. It seemed doubtful that Nakamoto was even Japanese. His English had the flawless, idiomatic ring of a native speaker.

Perhaps, it was suggested, Nakamoto wasnt one man but a mysterious group with an inscrutable purposea team at Google, maybe, or the National Security Agency. I exchanged some emails with whoever Satoshi supposedly is, says Hanyecz, who was on bitcoins core developer team for a time. I always got the impression it almost wasnt a real person. Id get replies maybe every two weeks, as if someone would check it once in a while. Bitcoin seems awfully well designed for one person to crank out.

Nakamoto revealed little about himself, limiting his online utterances to technical discussion of his source code. On December 5, 2010, after bitcoiners started to call for Wikileaks to accept bitcoin donations, the normally terse and all-business Nakamoto weighed in with uncharacteristic vehemence. No, dont bring it on,' he wrote in a post to the bitcoin forum. The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to Wikileaks not to try to use bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage.

Originally posted here:
The Rise and Fall of Bitcoin | WIRED

Bitcoin, tambin Bitcin[3] (signo: ; abr.: BTC, XBT[4] ) es una criptodivisa descentralizada concebida en 2009 por Satoshi Nakamoto. El trmino se aplica tambin al protocolo y a la red P2P que lo sustenta.

Las transacciones en Bitcoin se realizan de forma directa, sin la necesidad de un intermediario. Al contrario de la mayora de las monedas, Bitcoin no est respaldado por ningn gobierno ni depende de la confianza en ningn emisor central,[5] sino que utiliza un sistema de prueba de trabajo para impedir el doble gasto y alcanzar el consenso entre todos los nodos que integran la red.[6]

Bitcoin es un proyecto relativamente nuevo que se encuentra en evolucin. Por esta razn, sus desarrolladores recomiendan ser cautos y tratarlo como software experimental.[7]

Desde la dcada de 1970, la utilizacin de firmas digitales basadas en criptografa de clave pblica ha proporcionado un fuerte control de propiedad.[8][Nota 1] Sobre la base de la criptografa de clave pblica, en 1998 Wei Dai describe b-Money,[9] una solucin descentralizada al problema de pagos electrnicos. Posteriormente, Nick Szabo y Hal Finney extienden y complementan el trabajo de Wei Dai.

En 2008, Satoshi Nakamoto publica un artculo en la lista de criptografa de metzdowd.com donde describe el protocolo Bitcoin.[8][10][11]

El 3 de enero de 2009 la red P2P de Bitcoin entra en funcionamiento con la publicacin del primer cliente, de cdigo abierto, y la creacin de los primeros bitcoines. Hasta la invencin de bitcoin era obligado que todos los pagos en el comercio electrnico se canalizaran a travs de entidades centralizadas de confianza,[12] generalmente bancos y otras empresas financieras, que gestionaban el seguimiento de todas las transacciones.

Aunque existen monedas[13] y billetes fabricados por particulares y empresas, normalmente para poder comerciar con bitcoines se utilizan programas cliente,[Nota 2] que pueden ser aplicaciones nativas o aplicaciones web.

Las aplicaciones nativas[14][15] se instalan o se ejecutan directamente en ordenadores o en dispositivos mviles.[Nota 3] Tambin pueden ejecutarse automticamente cuando el usuario clica en un navegador web sobre un enlace que cumple con el formato del URI scheme de bitcoin segn la especificacin registrada en IANA.[16]

Bitcoin Core es el nico programa que implementa totalmente el protocolo, protegiendo la red, y se considera la referencia en la que se apoyan el resto de clientes existentes. Bitcoin Core necesita descargar completamente la cadena de bloques y almacenarla localmente, lo que puede llegar a tardar varios das. Su uso solo se recomienda para usuarios avanzados que deseen aportar a la estabilidad de la red.

Las aplicaciones web solo necesitan de un navegador, y por tanto estn accesibles desde todas las plataformas, ya sean de escritorio (Windows, Linux, Mac OS X) o mviles (Android, iPhone, BlackBerry, tabletas, etc).

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Bitcoin - Wikipedia, la enciclopedia libre