Bitcoin News in Review: Microsoft, Blockchain.info Bug, New York, and More

Journalist:
December 15, 2014

With the end of the week, it’s time for another Bitcoin News in Review, where we feature some of the top stories of the week here on CryptoCoins News. This week, Microsoft surprised everyone by accepting bitcoin, a security issue in Blockchain.info’s wallet led to the loss of hundreds of bitcoins, HP teased “The Machine,” a new kind of computer, and more. Keep reading for this week’s biggest news.

Microsoft Accepts Bitcoin Through BitPay

This week, on December 11th, Microsoft surprised the web by accepting bitcoins through payment processor BitPay. The company famous for Windows, Xbox, and a range of other products now accepts bitcoins for select digital products purchased by funding one’s Microsoft or Xbox Live account. At the moment, bitcoin cannot be used to directly purchase Microsoft products and bitcoin acceptance is limited to the United States. Still, this makes Microsoft the largest company in the world to accept bitcoin after others like Dell and Overstock.

Interestingly, Xbox users, who were once largely against Microsoft accepting bitcoin, have now changed their stance on the cryptocurrency. Overall reactions to Microsoft’s announcement have been very positive.

Blockchain.info Bug Results in the Loss of Hundreds of Bitcoins

Popular bitcoin web wallet Blockchain.info has had a rough time recently. Many users reported losing bitcoins after using Blockchain.info through Tor, due to rogue nodes and successful man-in-the-middle attacks. Blockchain.info addressed this issue by receiving an SSL certificate for their .onion address. However, a recent server software update affected secure private key generation, resulting in hundreds of wallets having their bitcoins stolen. The company has fixed the issue and is reimbursing affected users.

Interestingly, a white hat hacker known as “johoe” claimed to have taken coins from hundreds of affected Blockchain.info wallets to protect them from malicious hackers. Johoe promised to return the coins to their respective owners as long as they can prove ownership of their wallets.

“I took the liberty of saving some funds before they got swiped by others. If you can convince me that they belong to you (signing a message with the address is obviously not enough; the private key is already known), I will send the funds back. Look into the file https://johoe.mooo.com/bitcoin/broken.txt, to see whether your address was broken.”

Johoe later returned the coins to Blockchain.info.

“The money has been returned to blockchain.info. Please write to blockchain support to claim refund.”

New York Declares Bitcoin “Intangible Property”

The state of New York’s department of taxation and finance issued a memorandum this week declaring bitcoin “intangible property”. Businesses in New York that accept bitcoin will be required to register with the city for sales tax purposes, and the dollar value of every bitcoin transaction must be recorded. Sales of BTC will not be subject to sales tax. However, goods and services that would typically be subject to sales tax will still be taxed.

Despite guidance from the IRS, bitcoin regulation in the US is still not entirely clear. Congressman Steve Stockman recently proposed a bill to “protect cryptocurrencies” from regulators.

The Machine

PC maker Hewlett Packard announced a radical new approach to computing dubbed “The Machine”. This system would be based on memristors rather than traditional transistors.

“We’re pushing the boundaries of the physics behind IT, using electrons for computation, photons for communication, and ions for storage.”

“The Machine will reinvent the fundamental architecture of computers to enable a quantum leap in performance and efficiency, while lowering costs over the long term and improving security.”

The Machine isn’t yet ready and is still being developed in HP Labs. However, if it works, everyone would benefit from an exponentially faster computing model.

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That’s it for this week. For the latest cryptocurrency news, be sure to follow CCN on Facebook and Twitter.

Images from Shutterstock.

Neil Sardesai @@neilsardesai

I enjoy keeping up with the latest stuff in science and technology and have been following Bitcoin for a few years now. I also occasionally post cool stuff on twitter.