BitCoin Dropped from $266 to $55

BitCoin was seen to suffer a flash crash, but this didn’t surprise anyone. The popular online currency managed to tumble from $266 to just $55 in just one day of trading.

The experts point out that the reason of flash crash wasn’t only speculating. It was apparently compounded by a huge DDoS attack on Mt. Gox – the biggest BitCoin exchange. The platform suspended trading one day, claiming it would go offline for a 12-hour period of “market cooldown”.

The news came as no surprise for the market observers, because BitCoin grew by over $200 in less than 2 months. Unfortunately, the flash crash could have long-term consequences, further eroding the currency’s rather shaky reputation. Recently, some of legitimate businesses began using BitCoin, so they may feel very cross indeed.

In the meanwhile, a number of analysts have been sounding the alarm for a while now, pointing out that BitCoin is just too volatile and risky to be used by huge services as a mainstream currency. For instance, UBS stockbroker Art Cashin described the crash as “trading tulips in real time”, referring to the first market crash caused by Dutch tulip speculators a few centuries ago, at least according to Gordon Gekko. The media reports said that it’s a rare thing that the industry got to see a bubble-like phenomenon trade tick for tick in real time. Art Cashin emphasized that the future of BitCoin, like any other currency, is going to come down to trust.

As a result, even vocal supporters of the virtual currency started voicing serious concerns. For example, Mike Caldwell, a 35-year-old US engineer, went as far as to mint physical BitCoins at home, protected by tamper proof holographic seals. Caldwell believes that the currency might be in for a bumpy ride and points that BitCoin’s woes are just like the eternal struggle between Hollywood and online pirates, with everyone understanding who is winning that one.

Although it is clear that BitCoin is a very promising concept, the latest crash shows that it’s still a long way from becoming a proper mainstream currency. This is a fate of all young currencies, but hopefully it will be alright soon.

US Will Pursue Foreign Hackers

A few days ago, the US House Intelligence Committee has passed a document to remove legal barriers which have stopped the authorities and private companies from protecting their computer networks against foreign hackers.

According to the top Democrat on the committee, the modified law had a better chance of winning support in the Senate in 2013 after privacy concerns destroyed similar bill in 2012. He pointed out that only a year after the bill failed, politicians realized that cyber war was becoming more serious. He also told industry executives during a cyber conference hosted by the Space Foundation that according to the US authorities’ estimations, the local businesses had lost over $400 billion in intellectual property to cyber spies.

The co-founder of the Congressional Cybersecurity Caucus said the new legislation included measures to ensure private data wasn’t unwittingly exposed during any data-sharing between industry and government. For example, the document encourages the private sector to “anonymize” or “minimize” the data it voluntarily shared with the authorities. In addition, the bill authorizes and encourages the government to create procedures to protect privacy, and puts in place restrictions on the use, retention, and searching of any information that the private sector has voluntarily shared with the authorities. The legislation will also permit people to sue the federal government for any disclosures of such kind.

At the moment, the bill has the backing of large tech firms, including Intel, Oracle and IBM. However, the US Civil Liberties Union, the Center for Democracy and Technology, and an association of smaller tech firms and grass-roots activists called “Fight for the Future” formed the opposition and have already launched a digital campaign against it. A few days ago, the Reddit co-founder Alexis Ohanian has published a video and Internet petition calling for the online giants, including Facebook, Google and Twitter, to oppose the legislation.

Microsoft Started Open War against Google

Microsoft has finally started a nasty marketing war directly against the search giant and ended any pretence of niceness between the companies. Microsoft has released a series of attack ads in the United States that have upped the ante considerably in its trade war against Google which commenced 5 months ago.

The advertisements that have emerged on the Internet, on TV and in print demonstrate that Google is more interested in increasing profits than protecting its users’ privacy. This ad campaign was developed by a former political operative Mark Penn, a corporate strategist. He is known as a former pollster for President Bill Clinton and campaign strategist for Hillary Clinton’s unsuccessful bid for president 5 years ago.
In the advertisements, Microsoft vilifies Google for sharing personal data collected about people purchasing Android applications. That’s a step up from earlier adverts that skewered Google’s long-running practice of electronically scanning the contents of everyone’s Gmail accounts in order to help sell adverts.
Microsoft points out that the company had a better alternative which doesn’t do such kind of nefarious things. Negative advertising isn’t widely seen in Europe and it’s just the underdog who needs to use it. However, it also stresses how the search engine has evolved from an endearing Internet start-up to a scary entity that takes a too close look at personal information. The software giant can get away with its adverts since Google has already been caught a few times and copped regulatory fines and other settlements across the world.
Ironically enough, it’s now Google who is facing complaints about its practices being anti-competitive. At the same time, Microsoft is depicted as fighting for a freer market. A few days ago, a group of companies led by the software giant explained that it has asked European authorities to investigate whether Google is acting unfairly by giving away its OS to mobile device manufacturers on the condition that its own apps like YouTube and Google Maps are installed and prominently displayed. The most interesting part that it’s exactly what Microsoft was accused of in its browser anti-trust cases earlier.
Thus far, the search giant processes about 2/3 of search requests in the United States and handles an even larger percentage of queries in Europe. In the meanwhile, Google’s market value has rocketed from almost $25 billion at the time of its IPO to $255 billion.