Paying For Candy Crush And Taylor Swift’s Songs With Bitcoin

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PYMNTS.com Bitcoin Price and Volatility index.

Bitcoin Tracker | Week 50

When hype goes up, bitcoin prices go up. At least that’s what researchers at Poland’s Nicolaus Copernicus University have found. But this week, there weren’t as many Google searches or news mentions of bitcoin required and bitcoin’s price dropped back down to 357.64 from last week when the price was briefly over 400 at 407.68, according to the PYMNTS.com Bitcoin Price index.

Despite this drop, the technology behind bitcoin may emerge as the real winner in the bitcoin innovation game. The distributed ledger, the blockchain, has captured leading tech entrepreneurs interest and caused an MIT lecturer to state that digital currencies may open the doors for new markets to launch that are purely based on a digital currency platform. In fact, there’s already an experiment underway in Africa – so we’ll see whether he’s on to something.

This week’s bitcoin trivia: 30 percent of Coinbase’s bitcoin sales are for transactions under $1.
As always, if you have any news you’d like to share, please send it our way at contactus@pymnts.com.

On the Plus Side …

Did you know that 30 percent of orders on Coinbase are $1 or less? That percentage is likely to go higher now that bitcoin can be used to pay for iTunes and Facebook app purchases with a bit of a workaround through Coinbase and RewardsPay. And the World Bank announced that bitcoin does not fit the definition of a Ponzi scheme, or at least not a “deliberate one.” We put that in the positive column but it sure sounds like a backhanded compliment to us!

  • November 20, 2014 – Bitcoin grows in Ghana, with the Dream Bitcoin Foundation which aims to educate young entrepreneurs in Ghana about crypotcurrencies and to encourage the use of bitcoins in Africa. Is bitcoin trying to be Ghana’s M-Pesa?
  • November 20, 2014 – A senior lecturer at MIT Sloan School of Management believes that bitcoin and other digital currencies may create the basis for brand new markets, referred to as the Internet of Value. He contends that this has the potential to shake up the traditional financial services market and create a market for markets to emerge from.
  • November 20, 2014 – A UK and Lithuania based bitcoin services provider, SpectroCoin, added merchant processing to its platform, which will allow customers to convert bitcoin into cash in 25 countries across Central Asia and Europe. The company is focusing on the underbanked market with this offering.
  • November 20, 2014 – A payments platform that offers redemption of loyalty and rewards points at online merchants, RewardsPay, has partnered with Coinbase to allow merchants to enable bitcoin payments at places like iTunes, Facebook and Grooveshark.
  • November 20, 2014 – DailySteals has partnered with Coinbase to offer bitcoin only deals.
  • November 19, 2014 – Finnish regulators classified bitcoin as a financial service, meaning it is exempt from VAT.
  • November 19, 2014 – Experts at the World Bank declared that bitcoin doesn’t fall into the definition of a Ponzi scheme, at least “not a deliberate Ponzi”.
  • November 19, 2014 – The Bitcoin Foundation will tone down the education and outreach and focus more on core development.
  • November 19, 2014 – BitPay and Dutch startup BitStraat together will launch Amsterdam Bitcoin City, to make Amsterdam the ‘bitcoin capital of the world’ and will give bitcoin POS terminals away to 100 Dutch merchants. (We are so biting our tongues here.)
  • November 18, 2014 – Coinbase launched a tip button so that websites may accept micropayments anywhere online. Traditionally, payment methods are too expensive to make accepting micropayments (less than $1) worth it, but with Coinbase, small payments may be made which is good since 30 percent of them are under $1.
  • November 18, 2014 – Wineries are growing on the bitcoin vine, with Picnic Wine Co. as the first winery selling wine exclusively for bitcoin.
  • November 18, 2014 – Bitcoin Black Friday will be the biggest yet, with 6,000 merchants planning on offering deals (hopefully many for more than $1).
  • November 17, 2014 – BNP Paribas analyst, Johann Palychata, published an article arguing that bitcoin and other cryptocurrencies has the potential to shake up traditional financial services and banking.
  • November 17, 2014 – The founders that lead LinkedIn, Sun Microsystems, Google and Yahoo! contributed $21 million to a new type of bitcoin project, Blockstream. Blockstream aims to enhance a bitcoin’s technological feature, the blockchain, to turn it into a platform that will extend far beyond digital currencies.

On the Dark Side …

News broke that the city of Detroit was held for ransom by hackers, but this time, the joke was on the hackers, as Detroit didn’t need the database so they didn’t pay up. The US Marshals Service has another piece for the auction block from the Silk Road shut down, this time about $19 million worth of bitcoin.

  • November 19, 2014 – New research found a positive link between media hype and the value of cryptocurrencies. Returns on bitcoin are elevated when newspapers and Google searches are up.
  • November 19, 2014 – The US Commodity Futures Trading Commission believes that they do have enforcement power authorities against price manipulation in bitcoin markets as bitcoin is classifies as a commodity under the Commodity Exchange Act.
  • November 18, 2014 – Hackers took a digital database from the city of Detroit and then demanded a $803,000 ransom from the notoriously bankrupt city in bitcoin. Luckily the stolen database wasn’t needed or used by the city so the ransom went unpaid.
  • November 17, 2014 – The US Marshals Service announced that they would auction 50,000 bitcoins worth around $19 million that was seized from the Silk Road creator, Ross Ulbricht’s computer.
  • November 14, 2014 – The Australian government declared that applicants for welfare must declare their cyber currency “assets”.