Happy Sunday, and welcome back to another Bitcoin News in Review, where we feature some of the biggest stories of the week here on CryptoCoins News. This week, (30 November – 7 December) MasterCard attacked bitcoin in Australia, the bitcoin mining difficulty actually decreased, the second Silk Road bitcoin auction ended, and more. Keep scrolling for this week’s biggest news.
“For Everything Else, There’s Bitcoin”
This week, payments company MasterCard argued for tighter regulations against bitcoin in Australia. According to MasterCard,
“Any regulation adopted in Australia should address the anonymity that digital currency provides to each party in a transaction,” the company’s submission (PDF) states. “Contrary to transactions made with a MasterCard product, the anonymity of digital currency transactions enables any party to facilitate the purchase of illegal goods or services; to launder money or finance terrorism; and to pursue other activity that introduces consumer and social harm without detection by regulatory or police authority.”
The company’s president in Southeast Asia, Matthew Driver, also shares his thoughts (and perhaps misunderstandings) of bitcoin in this video:
MasterCard makes many of the same flawed arguments against bitcoin that others make, such as bitcoin providing anonymity and facilitating illegal transactions, even though cash is typically used for anonymous and/or illegal transactions worldwide.
James Duchenne, an Australian attorney, founding member of Texas Coininitiative, and blogger for SatoshiLegal, offered a lengthy response to MasterCard, countering the company’s arguments against bitcoin.
“…bitcoin is a choice. […] If you feel safer in the world of MasterCard or the fiat system, stay there. For everything else, there’s bitcoin.” -James Duchenne
Bitcoin Mining Difficulty Decreases
For the first time since December 2012, bitcoin mining difficulty actually decreased 0.62%. Mining difficulty exists to maintain a block time of ten minutes. As more hash power is added to the network, the difficulty increases to compensate. Conversely, if hash power is removed, then mining difficulty decreases. It seems as if a lot of hash power may have been moved towards mining more profitable altcoins. According to the MineForeman blog,
“There is [sic] a few possible reasons that the difficulty may decrease, but in the end there [sic] only one rational reason, economics. […] Evidence seems to suggest that even the biggest hashing farms, with the cheapest electricity have reached the point where at [sic] the current price of bitcoin cannot justify adding new hashrate to the network.”
If the bitcoin price doesn’t rise or more efficient mining hardware isn’t developed, it’s possible that the difficulty could continue to drop in the next few months.
Second Silk Road Bitcoin Auction Ends
Another 30,000 chunk of bitcoins has been sold in the second US Marshal’s Service’s Silk Road bitcoin auction. 11 registered bidders submitted a total of 27 bids, many of which were under-market. The USMS still has almost 100,000 bitcoins left over to auction, and Australian authorities are also planning to auction off drug-related bitcoins. Participants in this month’s auction included Binary Financial, Bitcoin Reserve, Bitcoin Investment Trust, Mirror, and Pantera Capital.
HR 5777: “To protect cryptocurrencies”
On December 1st, Texas congressman Steve Stockman introduced a new House Resolution entitled “To protect cryptocurrencies”. The Republican congressman from Texas’s 36th Congressional District has become a strong supporter of cryptocurrencies and previously introduced HR 4602: Virtual Currency Tax Reform Act to Congress in response to the IRS’s virtual currency tax guidance.
“This is a nascent industry. Along with 3-D printers and nanotubes, cryptocurrency is the future. We need to encourage it, not discourage it. There is risk associated with every budding industry in America.” -Steve Stockman