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Mt. Gox has been one of the biggest enigmas of the bitcoin community. Despite almost universal criticism, no competitors have been been able to unseat their position as the dominant bitcoin exchange. One of the latest pieces on Bitcoin news is a  Reuters interview with CEO Mark Karpeles revealed some interesting insights into their operation and perspectives on bitcoin. The first question we can lay to rest is the correct pronunciation of their company – Mount Gox.

Branding and Atmosphere

One of the first things most viewers will notice is their use of balls as chairs in the interview. Mark is clearly going for the start-up atmosphere, instead of the established banker. They have had their share of growing pains, with their inability to continue operations during DDoS attacks, and the 20,000 user queue to obtain a verified account. Clearly Mark agrees that they are not where they need to be yet, and hopefully this will benefit their users as they put more effort into expanding their infrastructure and customer service.

Lack of Internal Tools

Mt. Gox’s internal toolset

What they actually use

From the video, it’s a little concerning how unsophisticated their internal tools to monitor traffic seem to be. The first shot shows their internal tool – using a local IP address – that is little more than a ticker of the latest trade values, and clearly shows bitcoinity tabs open next to it. It’s surprising that after their acquisition of www.mtgoxlive.com they have not addapted it to work locally yet. Mark is clearly using bitcoin.clarkmoody.com to look at the latest bitcoin exchange rates. It’s no secret that we’re huge fans of Clark Moody’s interface, however it does raise flags to Mt. Gox’s market insight if those sites go down. What happens when someone DDoS’s all of the bitcoin charting sites? Does Mt. Gox only have that ticker to see how their system is doing?

Cash Flows

One key insight Mark provided was the cash inflows vs outflows. He estimated $5-20 million cash going in every day, and $0.3-1 million going out. This is obviously very bullish for bitcoin, indicating a significant net inflow of cash. Even during the steep drop from $260 to $55, there was not a significant outflow of cash indicating that a lot of it has remained in the system ready to be reinvested.

Disconcerting Quote

The most concerning part of the interview was Mark’s quote, “there’s nothing behind bitcoin trade to keep the market value high.” He appears skeptical of the current exchange rate.  I’m not certain how he’s determining what’s “behind bitcoin,” however I’m certain it’s more than “nothing.” Bitcoin has a global network of users conducting thousands of transactions on a daily basis. Just like any other currency, it’s backed by the trust of the issuer and the integrity of the systems that run it.  You, me, and everyone else using Bitcoin are what backs it’s value.

Mt. Gox is still in the process of maturing into the exchange it needs to be.  In the meantime, diversifying into and further developing alternative exchanges that can demonstrate a secure and stable platform will be essential to bitcoin’s long term success.

The post An Analysis of the Interview with Mark Karpeles, CEO of Mt. Gox appeared first on The Genesis Block.

A frequent question people have about bitcoin is ‘what can I spend them on?’ There are many merchants that accept bitcoins, and this number is increasing every day. Since Bitcoin was first adopted by the tech community, spending bitcoins on electronic equipment seems like a good place to start. I needed a new computer monitor and I thought this would be a perfect opportunity to document my transaction and share it with you.

I decided to search through Bitcoinstore.com, an online retailer that only accepts bitcoins as payment.  Bitcoinstore.com functions similarly to other online retailers (Newegg.com, Amazon.com, etc.); you can select from different categories, search for a specific product, filter based on price, etc. All prices are listed in USD and BTC; the price in bitcoins is calculated in real-time from the current USD-equivalent market price.

I decided on this monitor.

Again, using Bitcoinstore.com is similar to every other online retailer. I click the “Add to Cart” Button

Click on the “Checkout” button on the Shopping Cart tile. This will begin the checkout process. You have the option to create an account or you can checkout as a guest. As you can tell, a pattern is emerging here. Commerce via Bitcoin, in most cases, will be exactly like what we are all accustomed to.

Alright, now we arrive at the point where a Bitcoin transaction differs from a typical online transaction. For Bitcoinstore,com, there is only one payment option – bitcoins. The user selects “bitcoins” and is presented with the following instructions.

You are instructed to send X.XXXX bitcoins to a specific bitcoin address. This address is unique to your order. This allows the merchant to verify exactly when a payment is initiated. With these instructions, there are actually 3 different options you can take to send bitcoins depending on what kind of wallet you’re using. For information about wallets and bitcoin storage, check out our Bitcoin 101 course on Bitcoin Storage.

• Option 1 – Wallet is stored within a software client on your computer – For this option, simply send X.XXXX bitcoins to the bitcoin address listed.
• Option 2 – Wallet is stored on a mobile app on your phone – For this option, you can scan the QR code and send the proper amount of bitcoins.
• Option 3 – If you have an account with BitPay, you can click on the “Click to Pay” button and follow the instructions

Once the transaction is sent out to the bitcoin network, Bitcoinstore.com will recognize it and automatically finalize the order.

Congratulations! You have successfully spent bitcoins online!

It’s as easy as that. Spending bitcoins with an online merchant is can be just as easy as buying anything else online. The real difference comes at the end when you go to the pay the bill. Instead of inputting your credit card number or logging into paypal, you simply go to your wallet to send the funds.

Good luck with your purchases, and feel free to share your experiences using bitcoin stores.

The post Tutorial: How to pay with bitcoins online? appeared first on The Genesis Block.

John Robb, a writer at Resilient Communities, just tweeted that a large amount of Wikileaks cable data has been embedded in the blockchain.

Jon Matonis – Must-see Presentations At Next Month’s Bitcoin 2013 Conference:

Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes upcoming presentations at the Bitcoin 2013 Conference (May 17-19) in San Jose, CA.  Excerpts:

“The conference is attracting technologists, venture capitalists, bankers, traders, payments specialists, and financial regulators.”
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“The agenda will be particularly interesting to those in the banking and payments fields.”
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“BitPay co-founder and CEO, Anthony Gallippi, will explain how he’s been driving business adoption of Bitcoin.”
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“Paymium’s co-founder and chief operating officer, Pierre Noizat, will talk about bridging the gab [between bitcoin and the traditional regulated banking infrastructure].”
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“Rainey Reitman, the activism director of the Electronic Frontier Foundation, a nonprofit civil liberties law firm and advocacy center, will hold forth on the liberating aspects of Bitcoin.”
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“Tuur Demeester, author of the financial newsletter MacroTrends, will talk about bitcoin’s emerging role as a separate asset class alongside precious metals, equities, and bonds.”
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“Online payments industry veteran Peter Šurda about how nonpolitical cryptocurrencies like bitcoin could alter the future of fractional reserve banking.”

[Note: Though registration for the event continues online through May 15th, the deadline for the conference rates is April 26th.]

 – http://bit.ly/17IYUcR
 – http://www.Bitcoin2013.com
 – http://www.bitcoin2013.com/topics—schedule.html (PDF)

All News – Daily E-mail Subscription – Twitter: @BitcoinNews

The most famous torrent site in the world, The Pirate Bay, has just started accepting Bitcoin donations, placing a donation address on their front page. The initiative quickly proved to be very successful, raising over 10 BTC ($1,300) in little more than a single day, and other major torrent sites have quickly started to do the same thing. EZTV, OpenBitTorrent, PublicBitTorrent and istole.it have all added Bitcoin donation addresses onto their front pages.

In terms of promoting awareness, this is a fairly large step forward for Bitcoin. The Pirate Bay is ranked by Alexa as the 77th most visited site on the internet, placing it above all other Bitcoin-accepting sites to date except WordPress at 21st. However, the Pirate Bay’s use of Bitcoin, and that of the other torrent sites that have rapidly followed suit, is much more prominent. Unlike WordPress, Namecheap and Reddit, which do not make any attempt to advertise their acceptance of Bitcoin beyond an initial press release, the Bitcoin address on The Pirate Bay in particular is immediately visible to everyone who accesses the page. The message that The Pirate Bay is sending is clear: you do not need to be ashamed about supporting Bitcoin. Sure, Bitcoin is controversial, with some mainstream economists coming out outright against it, but what revolution isn’t? As an organization whose very continued existence has come to symbolize an ongoing victory against the pro-copyright establishment, The Pirate Bay understands this better than almost anyone else – except perhaps Wikileaks, although incidentally Wikileaks accepts Bitcoin too, and are actually doing quite well with it.

Of course, businesses like WordPress, Reddit and NameCheap are not charities, and essentially since have already made the bold step of accepting Bitcoin in the first place we should not demand them to more actively promote Bitcoin from the kindness of their hearts if they do not want to. Fortunately, however, at least in spirit The Pirate Bay is a charity, and as members of the Bitcoin community, we should be very grateful that such organizations exist. It is only through people and organizations continually and passively promoting Bitcoin in this way that the currency will reach any kind of significant cultural acceptance – simple news articles primarily lead to transitory interest that, in the case of the latest bubble, has already largely faded away. News promotes Bitcoin as something special; passive promotion promotes Bitcoin as something normal. The answer to which one evokes less hostile attention from regulators, more interest from casual users, and ultimately more willingness on the part of more traditional businesses to accept Bitcoin and show it, is clear.

When donating bitcoins in general, there is one security reminder that is important to repeat: don’t copy a donation address from anything other than the official website, and do not post a donation address without directly linking to the page that confirms the address as being legitimate. Posting fraudulent donation addresses is very easy, and it would be a shame if the Bitcoin community’s charitable nature were to be exploited by the most trivial of scams. Stay secure, stay safe, and feel free to donate a few bitcents today.

The post The Pirate Bay Accepting Bitcoin Donations, Other Torrent Sites Follow appeared first on Bitcoin Magazine.

If you’re reading this, you probably already know the innumerable benefits of bitcoin first hand. To help our community spread word of these benefits, we compiled the action list below based on feedback gathered from technology marketing experts, implementation of Normalization Process Theory and our own expertise on the topic of bitcoin itself. We welcome your feedback in the comment section below.

Verbal normalization cues

When a vernacular adds qualifiers before commonly used terms, a mental separation is created for listeners between the object being discussed and the accepted norm for that topic. The term ‘crypto-currency’ is is a prime example of this. By adding ‘crypto’ in front of a common term, Bitcoin becomes inherently differentiated out of the mental realm of familiarity and into a realm of the uncomfortable unknown. The fact that ‘crypto-currency’ sounds more like something from The Terminator than something from a wealth manager doesn’t help either, but we’ll address that later in this article.

Just like dollars, yen, euros or pounds, bitcoins are simply “currency.”

“We can’t wait to get interracial married!”

Ask every merchant if they accept bitcoin

The first step towards adoption is awareness. Generating demand for bitcoin requires addressing the awareness gap for both consumers and merchants, and merchants will never be more attentive than when they are on the brink of making a sale.

Any time you’re about to make a purchase, simply ask, “Do you accept Bitcoin?” Given the number of merchants currently accepting bitcoin, we can safely assume what the answer will be for the foreseeable future, but remember: this is about awareness. Below is a brief sample script you can use:

You: “Do you accept bitcoin?”
Merchant: “What’s bitcoin?”
You: “It’s a currency being used all over the world. It makes purchases extremely easy for customers and eliminates payment processing fees for merchants. I’m surprised you haven’t heard of it.”

What do you mean you don’t accept bitcoin?

That’s all you need. Even if the merchant doesn’t act immediately or the employee you interface with doesn’t have the power to start accepting bitcoin, the impact has already been made.

One of the fundamental concepts in marketing is known as the Rule of Seven – the notion that a buyer must receive a marketing message seven times before they will act. While it’s absurd to assume a predetermined number will be a universal threshold, the principle is sound. Every reinforcement of a concept deepens the credibility and social proof of the message. Asking in person creates an additional data point on top of news articles, advertisements, or other conversations they have with info about bitcoin. The impact of this should not be underestimated.

Be the entry point for your friends

Bitcoin presents two primary barriers to participation. The first is generating interest which, as the chart below of Google trend data for the word ‘bitcoin’ indicates, initial interest is growing at an incredible pace.

It’s a good start.

Unfortunately, even if people are interested in trying out the world’s favorite new currency, there’s still the significant hurdle of converting their existing money into bitcoins. Wallet software can be set up quickly, but the process for someone to actually obtain their first bitcoins remains a multi-step and multi-day process, making it easy for someone to forget the whole thing.

That’s where you come in. Offer to be your friends’ first trading partner and help them bypass the initial difficulties of setting up a funded exchange account. Let them pay you market rate for their first bitcoins, which they can then easily drop onto an exchange and trade freely or use with accepting merchants. If your friends aren’t near you physically to pay you back, I recommend trying Venmo, a free traditional currency transfer app.

Update your messaging

As a result of bitcoin’s origins and structure, one shouldn’t be surprised that it’s initial adoption has been primarily from the tech community and freedom-oriented political groups. This has been a terrific start, but bringing bitcoin to the mainstream is going to mean drastically adjusting the marketing message to address a broader demographic.

As a bitcoin enthusiast, you’ve probably seen the video below, which has been circulating around the bitcoin world of late with overwhelmingly positive reviews. While it is absolutely stunningly produced, the tone it conveys is that of fear brought on by a dystopian worldview – simply not a message the average person can relate to or is comfortable with, no matter how many times that outlook it’s echoed around the blogosphere. In case you think I’m being overly dramatic, I also included the trailer for Tron – a movie that is literally based in digital dystopia. Note the musical and visual similarities.

Bitcoin Explained from Duncan Elms on Vimeo.

Yes, Tron is terrific, but it simply does not invoke the comfort needed for someone to allocate part of their pension account to a new currency. The only hope for bitcoin is if it is brought out of the darkness of the digital realm and into reality, and that means attracting a broader group of people with messaging targeted to new demographics.

We have this demographic locked down.	“What’s a Tron?”

When discussing bitcoin with colleagues, friends and family, think about which aspects of bitcoin would appeal to them, rather than focusing on the aspects that appeal to you. In particular, for the non-tech and non-libertarian friends you speak with about bitcoin, I recommend focusing on ease, speed, security, and multiple verifications of each transaction by the world’s largest computer network. Aspects like anonymity, advanced cryptography, and disrupting the central banking system, however beneficial they may be for a number of reasons, may raise red flags for someone unfamiliar with any need for such things.

“I am here for the crypto-currency. Give it to me.”

The post Five Easy Ways You Can Make Bitcoin A Mainstream Currency appeared first on The Genesis Block.