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Bitcoin prices on the rise after exchange platform closure
Despite the sudden disappearance of the one of the largest trading platforms, Bitcoin prices have recovered and are currently on the rise.
According to the New York Post, authorities are in the process of investigating the closure of Mt. Gox, an exchange based in Tokyo and specializing in Bitcoin trading. Although some worried about the encrypted currency's future following the loss of Mt. Gox, it seems the online currency will survive as prices rose nearly 8 percent in the days following the closure. As of this writing, bitcoins are worth $575.13. While the currency's value reached more than $1,000 earlier this year, the increase shows that Bitcoins are not on track to disappear like its well-known trading platform.
Mt. Gox's sudden closure
Mining contributor Ana Komnenic reported that Mt. Gox's troubles began earlier this month, when website administrators stated that issues caused them to suspend withdrawals and the company was working to correct the problem.
However, users were shocked to be greeted by a blank page on Feb. 25 instead of the usual Mt. Gox homepage. Komnenic noted that the closure could have come as a result of a recent theft from the site, which totaled more than 700,000 bitcoins. An unverified released stated that 744,408 bitcoins were discovered missing after instances of stolen currency "went unnoticed for several years." The release also stated that a "leak in the hot wallet" caused Mt. Gox's offline storage to be completely emptied, according to Komnenic.
The closure also affected a number of organizations that performed trading through the platform. One investor said he lost approximately 200 bitcoins, or more than $27,000, when Mt. Gox went down. The individual said he believes the platform, and his lost money, may never return.
While many users and investors were concerned about the future of the digital currency, Komnenic reported that posts on one Bitcoin forum assured individuals that the "lesson is not that Bitcoin is broken." Instead, users noted the risks involved with handling and utilizing new currency and that Bitcoin traders "are building a new financial order."
Bitcoin accepted here
As the encrypted currency rides the waves of uncertainty, a number of online and brick-and-mortar retailers are continuing to accept bitcoins as a form of payment. According to Mashable, consumers can purchase organic edibles from O'Crepe's in Brooklyn using bitcoins. Cups and Cakes Bakery in San Francisco also provides offerings in exchange for cryptocurrency. One company even has plans in the works to establish the first Bitcoin ATM. A Canadian citizen put his house up for sale, advertising the the residence could be bought for bitcoins.
Forbes reported on a storytelling platform and native advertising firm, Cooperatize.com, that recently decided to start accepting Bitcoin. The organization also offers publisher payouts in bitcoins, if individuals so choose.
"While the future of Bitcoin is still undecided, we did our research and decided to accept them after speaking to a number of experts," company co-founder Roger Wu wrote.
Wu noted that a main factor driving the decision was the safety provided by such online currency through encryption. Silicon Valley engineer Stuart Eichert pointed out that as opposed to traditional payment forms, Bitcoin users are at a lower risk of identity theft or fraudulent activities due to the fact that Bitcoin transactions do not require personal data such as that associated with payment cards. Because the currency is highly encrypted, purchases made with Bitcoins can be much safer.
Additionally, Wu noted that the Bitcoin protocol provides a number of benefit for retailers, including the ability to link the currency with loyalty programs and the available versatility. Businesses can utilize colored coins and assign different values to them, including stocks, contracts or representations of physical property. As the system is based on a finite number of circulated coins, the currency may fluctuate in value, but is free from inflation.
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