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Bitcoin miners strike deal ……with DC CL

Bitcoin Mining Firm, CoinTerra Strikes Deal with CenturyLink

Bitcoin miners sign deal with data centers
Bitcoin miners sign deal with data centers

CenturyLink, the third largest telecom in the U.S., announced in July that it has entered into a multi-megawatt data center deal with bitcoin mining firm CoinTerra. The company is using space in four of CenturyLink’s data centers to host their fast-growing mining operations, which is where the majority of CoinTerra’s revenue is created. As well as mining their own bitcoins, the company also designs and produces hardware and software that powers the blockchain ecosystem the currency runs in.
CoinTerra estimates that 15 percent of bitcoin’s total network is operated using their hardware and at least $600 million is expected to be spent in the rest of 2014 on mining infrastructure for the currency. To handle the need, CoinTerra currently has eight data center locations, including the four now being leased from CenturyLink. The company is also outfitting a Canada data center that will be able to provide over 20 MW of power for mining.
“As the Bitcoin ecosystem continues to flourish, CoinTerra’s continuously expanding mining operations require reliable power and extremely high levels of availability to ensure peak performance,” said CoinTerra CEO Ravi Iyengar. “CenturyLink’s expertise, operational efficiency and immense data center presence provide us with the ability to safely and securely operate truly powerful and reliable Bitcoin mining on an enterprise scale.”
Bitcoin mining presents special needs
The mining of bitcoins requires a specialized type of high-performance hardware that can solve the computational algorithms that create the currency at a high speed while being accurate and efficient. Bitcoin mining is extremely computationally intensive, as the higher the operating speed of a machine, the more currency can be generated. Iyengar hasn’t elaborated on exactly how much power use CoinTerra’s contract with CenturyLink specifies, but has said that it is more than 10 MW and will probably exceed 20 MW “very soon.”
Because of the computational power necessary for the mining, the need for electric and computing power increases over time, as does the requirement of sufficient cooling systems. Bitcoin operations require cooling similar to that of a supercomputer. CoinTerra utilizes a technique known as immersion cooling that uses tanks of a specialized liquid for high-density hardware. The immersion tanks can require an alternative data center layout, so CoinTerra plans on housing some of their tanks at CenturyLink’s facilities to test what configuration works best for their needs.

Bitcoin and FIAT money will be used long into the future…..

News for Bitcoin
News for Bitcoin

“Bitcoin and Fiat Money will be jointly used well into the Future” – Jase Leung, CEO Bitcoinnect

CoinTelegraph had the chance to interview Jase Leung, CEO of Bitcoinnect based out of Hong Kong. Their two-way Bitcoin ATM is the first machine that provides real-time purchases and sales of digital currencies in the region.

Their Bitcoin vending machines are currently operating in locations across Hong Kong and Macau. And given China’s stance on digital currencies, we were interested in getting a first-hand perspective on how a Bitcoin company maneuvers in such a regulatory gray area and gauging the demand for physical points of exchange in China.

Cointelegraph: Can you tell me about Bitcoinnect and why did you decide to start your company? What do you hope to achieve in the short term?

Jase Leung: Bitcoinnect is a HK-based Limited company established by a group of young entrepreneurs. We believe, without a doubt, that Bitcoin will be the currency of the future. Our company and our machine are named “Bitcoinnect” — Bitcoinnect aims to connect people around the globe through the usage of Bitcoin. The story of creation behind Bitcoinnect is one born out of the difficulty we experienced in getting our first coins.

In the earlier days, when there were not so many online trading platforms and Bitcoin vending kiosks, it was a big hassle to start trading Bitcoin. First, we needed to register a trading account online. Then we had to get the account verified. Finally, we had to deposit fiat to the account via bank.

It took us a week to get the account straightened out. Meanwhile, the Bitcoin price had already doubled. We had lost the investment opportunity because of all the paperwork and time involved in connecting our bank to the traditional online trading platform.

We started Bitcoinnect and engaged in the Bitcoin vending kiosk business because we aimed at physicalizing this online trading platform, putting them onto the street and closer to the people. Bitcoinnect provides an instant, convenient, secure and user-friendly crypto-currency trading platform and experience to the public.

Bitcoinnect cuts through all the red tape and delays associated with online platforms. Furthermore, with Bitcoinnect, everyone can easily buy and sell crypto-currency instantly via our machine – they do not need to wait for few days for the top-up or withdrawal of fiat.

In the short term, we expect to have 20 Bitcoinnect machines deployed in HK and Macau, and are aiming to reach this in our first year.

CT: How do your ATMs stack up against western competitors such as Robocoin and Lamassu?

JL: We are happy to see the growing array of choices of Bitcoin vending kiosks in the market, as it leaves end users and potential operators with different opportunities and introduces healthy competition into the market.

The Bitcoinnect software is highly adaptable, and can easily support additional currencies and services. In addition to Bitcoin, Bitcoinnect also currently supports Litecoin and Dogecoin. More currencies can be added to the machine depending on the market development and infrastructure. Our machine operators can always decide which currencies to be listed in their machines from their management backend. This gives more flexibility to our operators. They can adjust their machines to suit clients’ needs in their local markets.

Similar to other machines, Bitcoinnect combines KYC devices and software routines that enable compliance with any possible regulatory requirement that may develop in the future. Operators can implement the fingerprint scanner, EMV card reader, high definition camera and SMS verification system should it be deemed necessary.

Our operators can activate or deactivate any of the KYC devices, through the back end management system, so that they can decide from time to time what level of KYC measures they want and to comply with regulatory requirements in their local jurisdictions.

Mark rittmayer 12

Bitcoinnect is built on a traditional bank-grade ATM platform. Among other competitors, it has highest bank note capacity for cash deposits and withdrawals. Bitcoinnect can accept 2,200 bank notes and dispense up to 6,800 bank notes. The machine is capable of handling frequent and high volume transactions, without the hassle of replenishing the cash cassettes. All cash is stored behind bank-grade vaults with combination locks. Therefore, our operators can be very confident of the security of the machine and the cash inside.

Furthermore, all Bitcoinnect is managed via a comprehensive backend management system. Operators can remotely manage all their machines and keep track of cash flow and profit at anytime regardless of their physical locations.

CT: Have you experienced any pressure from the government or warnings against installing your BTC ATMs?

JL: We have taken a lot of effort to seek legal advice for running the business. Currently Bitcoinnect does not need any special license to be operated in HK and Macau, save for normal business registration which is needed for all kinds of business.

However, we have taken a proactive approach and communicated with the government authorities to seek their advice on our business. For example, the Monetary Authority of Macau issued a press release on 17 Jun 2014:

“…… [Bitcoin ATM operators are] prohibited from using the words, expressions or any other terms having or implying the idea of operating the business of a credit institution, including “ATM” , in the course of their business; ”
In view of the above press release, we thereafter adjusted our machine’s branding to reflect “Bitcoin vending kiosk” instead of “Bitcoin ATM”. We always do our best and require our operators to comply with the regulations and legislation in their jurisdictions, if there is any.

CT: How have you adapted to China’s decision to ban all third party processors affected your operations?

JL: It is observed that Bitcoin trading volume in China is perhaps the largest in the world. After China’s decision to ban all third party processors, it became more difficult for Bitcoin traders to buy and sell Bitcoin in China. But yet, after all these incidents, the trading volume of Bitcoin in China still continues its surge higher. It suggests that the suppressed demand of Bitcoin in China should be much larger than the current trading volume via online trading platform.

Since trading Bitcoin via Bitcoinnect does not involve any third party processor, we have in fact received quite a number of enquiries from China after the decision of the Chinese government. We are looking forward to having our Bitcoinnect launched in China very soon.

CT: Is there a stark difference between HK and mainland China? Are you planning to expand your operations outside of HK and Macau?

JL: Yes. We do not limit our operation in HK and Macau only.

As we have mentioned, the demand for Bitcoin in China is huge and we believe Bitcoinnect is a great solution to bringing access to Bitcoin to China. There are quite a number of differences between operating in China, HK and Macau. One obvious difference is population distribution. The population in China is more dispersed when compared with HK and Macau, so location planning is vital to ensure that Bitcoinnect can reach sufficient population, as operators’ profit is one of our primary concerns.

Also, we have to closely monitor the government policy, both in local and national scope. The legal systems in the Mainland China, Hong Kong and Macau are completely different and independent, so we have to stay alert on those differences when doing business among the three jurisdictions. Logistically, Mainland China has a much stricter and more complicated policy for importing and exporting goods, when compared to Hong Kong and Macau.

Video Bitcoin News

CT: As infrastructure support improves and more opportunities arise for the public to exchange and convert fiat and Bitcoin, do you foresee increasing or decreasing demand for physical ATMs?

JL: We are excited to see improved infrastructure for exchanging Bitcoin and fiat currency. We believe more Bitcoin applications will be prevalent in daily life in the near future. In our opinion, Bitcoin and fiat money will be jointly used well into the future, as each of them has their own uniqueness and cannot be replaced by one another in short period of time.

The demand for Bitcoin and fiat exchange will increase, and trading platforms will seek to have more physical locations to enhance their accessibility to cope with the demand. Therefore, we are of the opinion that the demand for the two-way Bitcoin vending kiosks will increase accordingly as well. Given our competitive advantages compared with our competitors, we strongly believe that Bitcoinnect will earn a leading position in the vending kiosk business.

Did you enjoy this article? You may also be interested in reading these ones:

Bitcoinnect brings myriad ATMs to Hong Kong and Macau
Inside Bitcoins Hong Kong Conference Aims to Spur Crypto Adoption in Asia

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Major Chinese Exchanges Poised To Roll Out Bitcoin Banking Services

Okcoin and Huobi, two leading Chinese cryptocurrcency exchanges, have unveiled their Bitcoin wealth management schemes recently. Right now both only take deposits from invited users, but at least in the case of Huobi, such restriction will be lifted at the end of the month. Apparently the two exchanges have put a great amount of effort in preparation for the services, for instance, both registered their investment subsidiaries in Hong Kong. Given that neither sites are charging fees from regular trading, this new investment scheme can be their hope to turn a profit.

This, however, can be a cause of concern for anyone who cares about the future of Bitcoin and here is why:

The revolutionariness of Bitcoin is that it removes the necessity of a banking system by offering owners safe way to store and transfer value. Such arrangement by design  reduces systemic risks – in a scenario of financial crisis, the closure of one bank can often lead to massive bank runs, which is something that we don’t expect to happen in the Bitcoin world, at least theoretically. While the idea of a Bitcoin bank that take in deposits and pay fixed interest may sound appealing for those who don’t want their coins to sleep in their wallets, it carries the peril that may prevent Bitcoin from living up to its name as a decentralized currency.

Bitcoin Banking In China

In China, the first Bitcoin banking service is Bitcoinsand. Its founder Li Xiaolai is an early Bitcoin investor, Bitcoin evangelist and venture capitalist. Despite Li’s renown, considerable suspicion was cast on the “first online bank for bitcoins” in the wake of the site’s launch in August 2013.

The suspicion has to do with Li’s rumored wealth. Although it remains a mystery how many Bitcoins Li actually owns, the number is widely believed in excess of 100,000 btc – such claim, though quite impossible to verify, was never denied by Li in public. In multiple occasions, Li said that he had converted his wealth into paper wallets, which were kept in overseas banks. Such a statement leaves one to wonder: If some one has that such a large wealth sleeping in the vaults, why would he bother to borrow a relatively small amount? Moreover, since Bitcoinsand claims to be a “bank”, assumedly the coins were lent to people who were willing to pay higher interest rates – but who would borrow a highly volatile currency whose real world use is still limited and pay more than 5 percent a year? Naturally, fingers were pointed to the short-sellers. Actually, there had been sporadic rumors that the founder himself was involved in shorting – Li was one of the first who posted on social media about the central bank ban last year.

Despite the controversy, Bitcoinsand has been running for nearly a year with no serious complaints and suspicion gradually subsided.

But this year, Bitcoin banking services seem to grow into a trend. Aside from the above-mentioned three, there is another similar service called Kipcoin.com. Kipcoin, which went online this May, sets its fundraising cap at 10,000 btc and pays an interest of 0.0137% daily. Media coverage indicates that the site makes money in two ways: 1. Arbitrage – buying from exchanges where prices are lower and sell at others where prices are higher. 2. Lend the coins to miners.

While I personally doubts that arbitrage can be long-term sustainable as market efficiency keeps increasing; the later seems to be relatively legitimate given that China had one of the most stringent laws regarding pirate fundraising, a crime punishable by death and building Bitcoin farms requires increasing amount of resources. Bitcoins offers a way to work around the law; moreover, many overseas mining equipment vendors see Bitcoin as the currency of choice.

Why I Won’t Trust My Coins To The “Banks”

I was attracted by Bitcoin much due to my disappointed experience dealing with banks. For the same token, I don’t quite like Bitcoin exchanges. Even though I bought my coins through these exchanges and traded occasionally, I never leave more than a couple in my trading accounts, especially after the Mt. Gox debacle, when hundreds of thousands of coins just vanished into thin air.  Will 5% or higher annual return enough incentive for me to change my policy? I don’t think so. After experiencing several boom-bust cycles, seeing my coin’s value rising and falling is something that I can live with, but losing them for over-trusting is something that I just can’t forgive myself doing.

Hidden Cash Or Hidden Bitcoin Discovery Is Windfall To IRS Too

It is hard to resist a mystery man handing out no-strings Hidden Cash. It now appears that the benefactor is Jason Buzi, whole role as Mr. Hidden Cash was revealed by Inside Edition. Tweets from handle @HiddenCash give clues. The feel-good story started in San Francisco.

And whether it is the same benefactor branching out to other locales or copycats, it is a nice trend. He has spawned emulators in the US and the UK. Yes, @HiddenCash_UK has left envelopes filled with £50 or more in London, Sheffield, Manchester and other cities. The money-driven scavenger hunts should make everyone happy, especially if you dig up some green

But it’s worth considering whether you should post that photo or tell your friends all about your big find. After all, the IRS may be watching. These aren’t charitable contributions, not in the traditional sense. They are a kind of grassroots giveback but probably aren’t gifts either. After a small start, Hidden Cash, sparked a multi-city frenzy. The cash man has attracted more than 441,000 followers on his Twitter account where he gives clues to the location of the hidden money.

What if plain old cash isn’t hip enough for you? Then you can check out @SFHiddenBitcoin. The idea is similar, though it’s so far appropriately only in San Francisco, where Bitcoin might aspire to be a kind of local currency. And just like the Hidden Cash, the mystery Bitcoins are, well, mystery.

10.365

Clues at @SFHiddenBitcoin provide tips where to find Bitcoin wallets looking like small sheets of aluminum. There’s a QR code, a Bitcoin address and the @SFHiddenBitcoin Twitter handle. If you figure out the clues, you might find a wallet containing 0.0333 bitcoin, about $20.

California Gov. Jerry Brown signed legislation legalizing Bitcoin, although Bitcoin probably didn’t lead California’s official stamp of approval. The IRS, on the other hand, isn’t so sure. In fact, in March of 2014, the IRS issued Notice 2014-21 ruling that Bitcoin is property (not currency) for tax purposes. That means:

  • Bitcoin payments to independent contractors are taxable and payers must issue Form 1099.
  • Gain or loss from the sale or exchange of Bitcoin depends on whether it is a capital asset in your hands.
  • Bitcoin payments are subject to Form 1099 reporting just like any other payment made in property.

If you find hidden cash, must you pay tax on it? Yes, it’s income, just like anything else. The same is true for Bitcoin, although there’s an extra wrinkle given that the Bitcoin has be valued. Although the IRS might not find you, remember, you file taxes under penalties of perjury. Explaining away congratulatory pictures with your winnings could be awkward or worse.

Isn’t there an exception that could make finding cash tax-free? Unless the cash or Bitcoin qualifies as a gift, not really. The IRS calls whatever you find “treasure trove.” When an anonymous couple found $10 million in rare gold coins buried on their California property, it was the biggest coin discovery in U.S. history. The face value of the coins was more than $28,000.

Their market value? Over $10 million. Most tax experts agreed that the IRS was entitled to tax the full $10 million, not the $28,000 face value. In fact, treasure trove is just one example of the astounding breadth of what is income for U.S. tax purposes.

Cash and valuables you find are taxed. So says Cesarini v. United States, involving cash found in a piano. Mr. Cesarini bought an old piano for $15 and found about $5,000 in cash inside. When the IRS said it was taxable income, Mr. Cesarini went to court.

But the IRS won at trial and won appeal. Of course, the IRS likes this case. It is often cited for the rule that the IRS gets a piece of just about everything. In fact, about the only way you can find something and not have to pay tax on it is if you’re recovering your own property.

In that case, your recovery generally shouldn’t be income. Stolen art later recovered? If you can prove it’s yours, it’s not taxed. You’re just getting it back. But even then, exceptions can trigger taxes.

Under the “tax benefit rule,” if you claimed a tax deduction for theft or loss of the property, you have to include the value of the recovered property in your income when you recover it. And if the property has gone up in value in the interim, you get stuck with tax on the increased value.

So if you find cash or Bitcoin, congratulations! Don’t let the inevitable tax bite rain on the excitement. The IRS gets a piece of almost everything.

Bitcoins.com Being Sold At Auction By Mt. Gox Founder Mark Karpeles, Some Proceeds To Go To Investors

Seen as “absolutely the best remaining, and available name” for this new market; selling in Heritage Auctions’ July 24 Domains & Intellectual Property auction

Bitcoins.com

DALLAS — The URL Bitcoins.com will hit the auction block on July 24, 2014, as Part of Heritage Auctions’ Domain Names & Intellectual Property Auction, sold by Mark Karpeles, the controversial founder of the failed Bitcoin exchange Mt. Gox, and is expected to bring more than $750,000.

“We are hoping, with the sale of Bitcoins.com, to provide some relief to the people impacted by the Mt. Gox bankruptcy,” said Karpeles, “and will be putting at least half of the sale amount toward that purpose.”

Bitcoins.com is absolutely the best remaining, and available name for this new market,” said Aron Meystedt, Founder and Director of the Domain Names & Intellectual Property category at Heritage Auctions. “Bitcoin.com, the singular version, is owned and used by Blockchain.info, the world’s most popular bitcoin wallet, and Bitcoinwallet.com itself is also already tied up. For the right investor this is a golden opportunity.” 

The bitcoin payment system, an open payment network aimed at eliminating currency exchange fees and removing the need for intermediary banks, was created in 2009. It is mostly in the last 12 months, however, that it has gained mainstream notoriety, largely with the failure of Mt.Gox.com and the seizure of the nebulous Silk Road website, along with the subsequent liquidation of its Bitcoin assets. Bitcoins (plural) are the actual unit of exchange that has monetary value. 

“The current market capitalization of all bitcoins in circulation is between $7 billion and $8 billion,” said Meystedt. “Daily, there are millions of dollars in transactions in Bitcoins. This auction offers the opportunity to capitalize on one of the most significant developments since the inception of the Internet.”

Bitcoins.com is being offered in the July 24, 2014 auction alongside more than 90 other premium domain names, including OklahomaCity.comDEC.com (the fifth oldest domain name on the Internet, circa 1985), Rides.comSEM.comDigital.comCute.com and SouthernCalifornia.com.