Dr. Jorge Mata-Torres, Ph.D.Dr. Jorge Mata-Torres, Ph.D.

Brother Jorge  
(Dr. Jorge Mata-Torres)
Author & Publisher

Bitcoin - Digital Currency - Electronic Monetary System - essentially the same function, same agenda - a cashless, demonetized system. We are witnessing removal of large bills from circulation in Australia, India and Venezuela with similar plans for the Eurozone and the U.S. by 2018 ( and reduced withdrawal amounts with tellers and ATM's with the pretext of suspicious and potential criminal activity. It is entirely created with the purpose of enforcing a controlled, digitized society by "chipping everyone".

“And he causes all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: and that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.” Revelation 13:16-17

With claims to lure everyone that it will go to $1+ Million per coin this year and as a cure-all, decentralized, untraceable, government & central bank free market "currency", they're also touting it as an end of poverty and improving the iives for humanity. Eventually the blockchain will grow where it will need to be centralized which means its very nature for being attractive to many will become what it dreads most - centralized control which is all part of the New World Order to control via the Beast of Revelation Buy and Sell agenda.

Given its unsecured, non-insured, very hackable nature, it may very well be victim to an internet kill-switch Trump has been promoting which can be used to either criminally hoard individuals' savings or evaporate individual's savings altogether leaving them completely bankrupt resulting in complete chaos upon society. Keep an eye on what the real agenda is behind all the talk of "fake news" - it's a disguised ploy to enforce censorship of media and the internet.

While implantable RFID chips may still be the "Mark of the Beast", it may have been pure misdirection given its obvious nature and difficulty in enforcing it with the world's populace - however, digitized currency is what most everyone will readily accept because of its "user friendly" nature and need for commerce and necessities be it the young or old, rich or poor. Most people use their right hand to enter their account data to process transactions. This has all the earmarks of something very sordid under the surface - SO BEWARE.


Bitcoin: What You're Not Being Told:

China Bitcoin CRASHED 40% Caused by Bitcoin Derivatives and Computer Trades?

Bitcoin: ‘Mark of the Beast’

--With apologies to Mark Twain, the reports of bitcoin’s death have been greatly exaggerated.

Bitcoin’s doing just fine and its career as a currency is still alive.

Bitcoin blog 99Bitcoins has counted 106 deaths by mainstream news reports since bitcoin was birthed into the cryptosphere.

Rasputin would be proud.

Despite bitcoin’s weekly obliteration, it rose from the dead once again last weekend and busted through $600…

Image 1

… and then, less than a day later, it burst through $700, too. Then it dropped down and “settled” at around $680. (Price discovery is still a game bitcoin enthusiasts must play and will continue to play in the years to come.)

To claim, as some mainstream outlets do, that bitcoin has lost its luster around the world (except, of course, in China) is more an admission of ignorance than a story worthy of coverage.

Although it’s still somewhat “fringey,” it hasn’t lost any steam. If anything, more people are throwing wood in the stove than ever before.

Bitcoin, as one small (but noteworthy) example, is becoming the subject of trendy art shows around the U.S.

Image 2

The United Nodes of Bitcoin, Cryptograffiti

And the business world keeps on embracing the bit.

As of this week, in fact, you can invest in bitcoin through your 401(k) or IRA. You can also, with the Coinbase SHIFT card, use bitcoin just like USD anywhere VISA cards are accepted.

Image 3

And, fun fact, bitcoin’s market cap has officially exceeded Western Union’s.

Image 4

But, like any great technological advancement, bitcoin won’t continue to rise without resistance. And not just from bankers and regulators who circle above like buzzards, trying desperately to figure out how to tear off their pound of flesh.

There are many in the conspiracy-sphere who believe bitcoin is either a creation of the CIA or is the “devil’s faucet.” Or both. In their eyes, bitcoin is the ‘Mark of the Beast’ foretold in the scriptures.

And soon, we will all have crypto-wallets in our foreheads to hold our bits, without which we will be ostracized from the market completely and left to starve.

Of course, as mentioned, every past innovation worth its salt has been met with skepticism, and bitcoin is no exception. But the idea that bitcoin is a CIA implant designed to herd the masses into a monolithic government-controlled currency is very likely to be false. (But, hey, we live in a strange world. Anything’s possible.)

Simply put, centralized control is contrary to how bitcoin — and the crypto-space in general — operates. Bitcoin is a tool for liberation, not more centralized control.

Yet, most people don’t understand this quite yet. As you’ll see, though, their fears are somewhat justified. And, in order for bitcoin to reach its true potential, the community must learn how to properly address and dispel common fears and aversions.

Otherwise, it’s just going to freak everyone out and remain on the fringe.

Which is why, today, we invite Amanda Johnson of CoinTelegraph to ask the all-important quandary:

Is Bitcoin the ‘Mark of the Beast’?

Is Bitcoin the Mark of the Beast?

Amanda B. Johnson via CoinTelegraph

Many people are extremely wary of a one-world currency. I didn’t know until recently that this fear among Christians is due to a passage in the Bible itself. The Book of Revelation, chapter 13:16-17 says:

“And he causes all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: and that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.”

The topic came up during a drive through the country. Some friends and I utilized Craigslist to pay for a 1000-mile rideshare, and during the drive I had ample time to proselytize to our new driver friend about digital currency. After hearing my synopsis, he said, “So … is Bitcoin kind of like the mark of the beast?”

“What’s that?” I asked. He explained his take on the Book of Revelation passage — that his prophets of old were warned that the highest tyranny would come to the earth in a form of biometrically-enforced and perfectly traceable money.

What with Elliptic’s privacy-smashing “blockchain map” and the fact that a man has already had a Bitcoin wallet implanted in his hand, one can see that my driver friend made an excellent point: if the Bitcoin maximalists get their way, and the whole world uses Bitcoin in itscurrent form, the “compliant” masses could seriously usher in the “mark of the beast.” Here’s how:

1. Bitcoin would be the perfect currency to be declared the only “legal tender.”

States have failed miserably at producing and maintaining stable currencies. They just can’t resist dipping their hands into the piggy bank. Look no further than Greece for a perfect example.

But digital currency provides a way for states to save themselves from themselves. A currency with a non-manipulatable inflation rate is a brilliant way for monopolists to present a viable, long-term monopoly currency.

“Legal tender” laws have been used for 100 years to successfully corral people into using a monopoly currency. If the masses who’ve been obedient continue to be obedient, who’s to say “legal tender” wouldn’t be enforced with one digital currency as well? Just look at what’s happening in Ecuador — the state says all banks must accept a new state-run cryptocurrency… or else.

2. Each person’s Bitcoin addresses would be tied to identity.

If Bitcoin were to be declared the new “legal tender” — which may become a more popular idea as more fiat currencies begin to fail around the world — the politically obedient would be all too easy to convince that identities must be tied to payments. The usual “terrorism-financial-stability-national-security-the-children” would be used as selling points. Coinbase would probably be the biggest cheerleader.

In an ironic twist of fate, Bitcoin would become the new fiat.

Then every person’s expenditures could be checked for “compliance” right from the blockchain. Addresses of “criminals” could be blacklisted and mandatory offerings (taxes) could be verified for all transactions. Your entire economic life could be tracked, verified, measured and controlled, all via the blockchain.

3. Because the blockchain is transparent, it would be extremely easy to condemn those who don’t comply.

Failing to include your tax payment on every transaction, or doing any business with “economically sanctioned” individuals, would land you directly on the “Trade Sanction” list.

Anyone found by the Bitcoin blockchain to trade with you henceforth would be imprisoned or worse. You may eventually starve, not for lack of food, but for lack of people willing to sell some to you. Or as Revelations would say, “No man might buy or sell.”

The relative IP address of where transactions are made is broadcast by the blockchain, so this makes for an excellent geo-tracking scheme when everyone’s identites are tied to their Bitcoin address. Or as Revelations would say, “The number of his name.”

When Bitcoin becomes the new fiat, you can run, but you can’t hide.

Bitcoin-related projects like DarkWallet have known these risks for a while. Mixing services like BitMixer have served to mitigate the problem, too. Even the Sidechains Elements project proposes a half-measure solution that would mask exact amounts transferred on the Bitcoin blockchain, but not the sending and receiving addresses. Such solutions are a step in the right direction, but don’t really solve the inherent problem.

If “mark of the beast” fears are to be avoided in the future, it will be thanks to a market in currency — you know, the thing that Bitcoin maximalists hate. In the new film Ulterior States, Andreas Antonopoulos states that he predicts there will be tens of thousands — potentially even millions — of digital currencies created and used in the future. Bitcoin offshoots like Dash have already taken the privacy issue into their own hands, building anonymity — not just pseudonymity — right into their protocol and masternode network.

The proposals in this article may sound far-fetched, but 200 years ago, today’s monopoly currencies sounded pretty far-fetched, too. Many new things sound far-fetched before they materialize.

Only by envisioning potential futures can one actively work to prevent them.


Amanda B. Johnson
Contributor, CoinTelegraph


Ecuador becomes the first country to roll out its own digital cash

In 2000, Ecuador moved to ditch its stumbling currency for the U.S. dollar. Now more than 15 years later, the South American country is revamping its monetary system again—using digital currencies.

A man buys U.S. dollars from a street money changer at the rate of 25,000 sucres to the dollar in Quito, Ecuador, Jan. 11,2000, after the directors of Ecuador's Central Bank approved a plan to dollarize the economy.
Martin Bernetti | AFP | Getty Images
A man buys U.S. dollars from a street money changer at the rate of 25,000 sucres to the dollar in Quito, Ecuador, Jan. 11,2000, after the directors of Ecuador's Central Bank approved a plan to dollarize the economy.

Ecuador's Sistema de Dinero Electrónico (electronic money system) kicked off in December by allowing qualifying users to set up accounts, and it will begin acting as a real means of transaction this month.

Once the government flips the switch, the South American nation of 16 million will host the first-ever state-run electronic payment system. (Other countries, such as Sweden, use digital currencies widely, but they're not state-sponsored.) But the Ecuadorean government says the scheme is designed to support its dollar-based monetary system, not replace it.

Read MoreThe world's best place to retire—Ecuador???

"Electronic money is designed to operate and support the monetary scheme of dollarization," economist Diego Martinez, a delegate of the President of the Republic to the Board of Regulation and Monetary and Financial Policy, wrote to CNBC in a comment provided by a central bank spokesman.

Martinez said that Ecuador law expressly states that economic transactions are conducted in U.S. dollars.

Electronic money will not only help the poor, he added, but will act as a cost-saving mechanism for the government: Ecuador spends more than $3 million every year to exchange deteriorating old notes for new dollars, Martinez said. There would presumably be less wear and tear on the currency if much of it was stored at the central bank while citizens relied on mobile payments.

"They keep linking it to their frustration to being on the dollar standard."-Lawrence White, professor of economics, George Mason University

Still, others both inside and outside Ecuador have speculated that the country has broader goals. Claiming that there's no plausible reason for Ecuador to provide "an exclusive medium for mobile payments," Lawrence White, a professor of economics at George Mason University, wrote in a recent paper that "it is hard to make any sense of the project other than as fiscal maneuver that paves the way toward official de-dollarization." 

White told CNBC that the government's bitcoin ban in July and its barring of competing e-money systems demonstrate Quito's intentions. Although Ecuadorean officials haven't publicly said they view electronic money as a potential exit from the U.S. currency, "they keep linking it to their frustration to being on the dollar standard," White said.

Read MoreChina's new playground: America's backyard

A digital currency would, in theory, allow Ecuador's central bank to issue new money that isn't directly tied to its U.S. dollar reserves. But Ecuadorean officials have repeatedly denied that there are any such plans.

In a letter posted in Spanish on the Banco Central del Ecuador website in August, officials said the proposed payment system is not intended to address the country's bills, that it will not be used to pay government workers and contractors, and that it will not lead to capital flight.

The dollar system has been good for the country's relatively low inflation and low interest rates, White said, adding that it would be difficult to start a new currency without ruining the economy. Ecuador's most recently reported monthly inflation rate of 3.67 percent is lower than neighbors including Mexico, Chile, Costa Rica and Bolivia.

At the very least, White said, the government is looking to turn a profit from holding a monopoly on all electronic payments—and if they really wanted to benefit the poor, Quito officials would allow for competing private-sector systems to drive down costs.

Read MoreBeijing still lending to Venezuela—for now

The Central Bank of Ecuador announced earlier this week that it had signed a deal with a 60,000-member taxi organization to accept the electronic money. The project's second phase—in which users will be able to pay for select services and send money between individuals—will begin in mid-February.

Jorge Calderón, the taxi organization's president, praised the electronic money system as potentially improving service, since it will not require drivers to stash as much coinage.

"I think quite rapidly people will be using it all over the place...The plan is quite aggressive—they really want the whole population to use it as soon as possible."-Paul Buitink, instructor, Universidad San Francisco de Quito

A third phase of the electronic money system will begin in the latter half of this year, according to government announcements, and will allow users to pay for public services like taxes through mobile payment.

Fausto Valencia, who is overseeing the project for the central bank, saidthe government expects about 500,000 people to sign up in 2015, according to several Ecuadorean reports.

Read MoreThe new Chavez? Oil trumps rain forest in Ecuador

"I think quite rapidly people will be using it all over the place," said Paul Buitink, a cryptocurrency expert who teaches at Universidad San Francisco de Quito. "The plan is quite aggressive—they really want the whole population to use it as soon as possible."

Buitink said the project has been relatively well received by the Ecuadorean public. There are some concerns about privacy, he said, but it has generally been seen as a positive step.

Not to be confused with bitcoin

Despite several headlines to the contrary, Ecuador's electronic money system is dissimilar from bitcoin. While the world's most popular cryptocurrency is a digital token running on a decentralized (yet cryptographically secured) electronic network, Ecuador's new project would be controlled by the government and tied directly to the local currency—the dollar.

The project initially created buzz in in the bitcoin blogosphere, but that interest faltered once it was clear that Ecuador's project would not present a competing alternative. Not only is the technology importantly different, but Ecuador's electronic money system currently can be accessed only by qualifying citizens and residents.

Read MoreCNBC Explains: How bitcoin works

In fact, Ecuador's project is more similar to M-Pesa, a mobile phone-based money transfer service started by Vodafone, according to Pete Rizzo, the U.S. editor for cryptocurrency site CoinDesk.

In many ways, the new system will be a government-run version of Venmo—users will be able to make payments with the aid of a cellphone and store value in their accounts. But unlike the popular smartphone application, the Ecuadorean version will be able to run on "dumb" mobile devices too.

The electronic money system does not require Internet access or an account with a financial institution, and it can be redeemed for physical money at any time, the central bank's website said.

Correction: This version corrected the spelling of Fausto Valencia's name.


Will Starbucks Make Bitcoin Mainstream?

Bitcoin, which has long nursed an outlaw persona, seems to be transforming into a yuppie. In the latest sign that the digital currency is moving into the mainstream, iPayYou, a U.S.-based bitcoin platform, said its technology now will enable coffee and food purchases at Starbucks, a chain typically associated with middle- and upper-class urban and suburban lifestyles.

The partnership comes as bitcoin approaches new highs, with its price shooting past $1,100 in recent days. Earlier today, the average price of bitcoin across all exchanges stood at about $960. The Starbucks bitcoin program could increase the popularity of the digital currency. The move “was a no-brainer, as the company currently boasts 24,000 stores and [has more than] 1 million customers using the Starbucks mobile order and pay program per month,” said IPayYou Founder and CEO Gene Kavner. Starbucks says it is has no “relationship” with iPayYou, and is not “affiliated” with its product, but offered no further comment; a spokesman for iPayYou says there is no formal integration with any Starbucks technology, and only ” allows users to transfer bitcoin from their iPayYou wallet to their Starbucks account, usable in stores everywhere.”

Here’s how the program works: A consumer must have the Starbucks and iPayYou apps. Before a purchase, that consumer selects the amount of bitcoin he wants to use via the iPayYou digital wallet. The consumer selects the payee, and then iPayYou converts the bitcoin into local currency. IPayYou said it usually charges consumers between 15 and 30 cents per transaction, though it did not specify how much Starbucks purchases would cost.

The Starbucks announcement adds to a burst of recent news that suggests bitcoin is starting to outgrow its reputation as a tool for drug purchases, money laundering, tax evasion and other criminal transactions. Late last year, for instance, a Manhattan judge, in a case involving JPMorgan Chase and others, ruled that bitcoin is money; the ruling was the latest instance of a court declaring that bitcoin should be considered money for legal and regulatory purposes. And in the wake of last year’s Brexit, some analysts—including in this Pay Op-Ed—have considered the prospects of treating bitcoin as a safe haven for investors seeking to protect their assets.

That’s not all. Also late last year, blockchain, the decentralized transaction-verification system that underpins bitcoin, received a major boost when Microsoft and Bank of America said they would team up to further develop the technology.



Manhattan Judge Latest to Rule that Bitcoin Is Money

bitcoin_stackIn a Sept. 19 ruling in a case over a cyberattacks against JPMorgan Chase and others, a federal judge became the latest to declare that bitcoin qualifies as legal tender. Manhattan District Court Judge Alison Nathan rejected an attempt by Anthony Murgio to dismiss charges that the bitcoin exchange he operated was an unlicensed money transmitting business. Murgio claimed that bitcoin did not fit the definition of “funds,” as described by federal law prohibiting unlicensed money transmitting operations.

In her ruling, Judge Nathan said bitcoin and other digital currency did in fact fit the definition of funds. “Bitcoins can be accepted as a payment for goods and services or bought directly from an exchange with a bank account. They therefore function as pecuniary resources and are used as a medium of exchange and a means of payment,” Nathan wrote, according to Reuters. The decision did not address the six other charges Murgio currently faces.

The ruling is the latest instance of a court declaring that bitcoin should be considered money for legal and regulatory purposes. In 2013, U.S. Magistrate Judge Amos Mazzant made that determination in a case against the allege operator of a bitcoin Ponzi scheme. Manhattan District Judge Jed Rakoff reiterated that interpretation in another case in 2014.

The Manhattan case stems from the July 2015 arrest in Florida of Murgio and Yuri Lebedev for operating, an online bitcoin exchange they allegedly ran from October 2013 to July 2015, in violation several laws. Another owner of the site, Gery Shalon, also is accused of running a scheme targeting a dozen companies, including JPMorgan, and exposing personal data of more than 100 million people as part of a plan that generated hundreds of millions of dollars of profit through pumping up stock prices, online casinos, money laundering and other illegal activity, prosecutors said.



Published January 12, 2017

Read This Before You Go Anywhere Near This Popular Currency

Bitcoin is taking speculators for a ride.

Bitcoin is a digital currency that was created in 2009. Unlike paper currencies, Bitcoin isn’t controlled by a government or central bank—it’s governed by a peer-to-peer network.

In the beginning, few people took Bitcoin seriously. But it’s become very popular with investors in recent years. That’s partly because more and more people are losing faith in the paper money system.

The business community is also embracing the digital currency like never before. More than 100,000 businesses around the world, including Amazon, eBay, and Target, now accept bitcoins as payment.

• In 2015, Bitcoin’s price surged 40%…

It was the year’s top-performing currency.

Last year, Bitcoin surged another 120%. It was the year’s best-performing currency once again.

Until recently, it looked like the digital currency was headed for a three-peat.

• Bitcoin’s price surged 20% over the first four days of 2017…

Last week, it topped $1,000 for the first time since 2013. And it got within $13 of its all-time high. 

Frantic buying by the Chinese fueled the recent rally. Yahoo! Finance reported last Thursday:

The yuan fell 6% against the US dollar in the past year, hitting its lowest point since 2008. China’s foreign exchange reserves are expected to keep shrinking in 2017. It’s clear that as a result, many Chinese investors have turned to bitcoin: trading activity of bitcoin in the yuan is up more than 60% in the past 30 days, according to bitcoinity charts. More than 90% of all bitcoin activity globally, in fact, is coming from China.

In other words, Chinese folks loaded up on bitcoins because they’re worried about the money in their wallet losing value. They’re not alone, either.

• Venezuela’s currency, the bolívar, is in free fall…

According to CNNMoney, it lost 55% of its value in November.

Today, prices for everyday goods and services in Venezuela are more than doubling every month. Storekeepers in the country are now weighing out piles of cash rather than counting the money.

In India, locals are worried that there could be a national bank run. That’s when everyone tries to pull money out of the banking system at once.

Not to mention that central banks in Europe and Japan are still trying to stimulate their economies through easy-money monetary policies. As we’ve explained many times, these radical measures could end up destroying the very currencies these central banks are supposed to protect.

• In short, people have plenty of reasons to be worried about the money in their wallet…

That’s why the price of Bitcoin shot through the roof recently. But many of these folks had no clue how volatile this digital currency could be.

• The price of Bitcoin plunged by more than 20% last Thursday…

The People’s Bank of China (PBOC) sparked the crash after it told investors to be wary of digital currencies.

Yesterday, Bitcoin plunged another 13%. The PBOC, once again, ignited the selloff. Reuters reported yesterday:

The price of digital currency bitcoin slid around $50 on Wednesday after China's central bank said it had launched spot investigations on bitcoin exchanges in Beijing and Shanghai in order to fend off market risks.

The investigation of bitcoin exchanges, including BTCC, Huobi and OKCoin, was to look into possible market manipulation, money laundering, unauthorized financing and other issues, according to the statements posted on the People's Bank of China's website.

• Today, Bitcoin is down another 5%…

It’s now lost more than a quarter of its value over the past week. That’s a staggering decline.

Remember, bitcoin is supposedly a currency. But currencies should never be this volatile.

This tells us that Bitcoin isn’t money yet. It’s still a speculation vehicle.

If you know what you’re doing, you could make a fortune trading Bitcoin. But if you don’t, you could lose a lot of money very quickly.

That said, we still think Bitcoin is a step in the right direction. After all, anything is better than money controlled by reckless and increasingly desperate governments. But Bitcoin and other digital currencies like it have a long way to go before we’re ready to call them “money.”

• Gold, on the other hand, is a proven form of money…

People have bought and sold goods and services with it for thousands of years. It’s survived every sort of financial crisis. And it’s outlasted countless paper currencies.

Plus, gold’s value is stable. It’s not going to plunge 25% or more over the course of a few days. There also isn’t a central authority in the world that controls gold’s price or its supply. It’s a truly global currency.

That’s why gold is still the best way to protect yourself from reckless governments and central banks.

• The price of gold has spiked 5% since the start of the year…

It’s now trading above $1,200 an ounce for the first time since November. But we think it could be headed much higher.

Remember, central banks around the world are losing their grip on their currencies.

If this keeps up, more and more people are going to seek out alternative currencies. Many of them will take shelter in gold, the world’s most trusted safe-haven asset.


Risk of Bitcoin Hacks and Losses Is Very Real

Updated: Aug 29, 2016 6:56 AM Hora

When hackers penetrated a secure authentication system at a bitcoin exchange called Bitfinex earlier this month, they stole about $70 million worth of the virtual currency.

The cyber theft—the second largest by an exchange since hackers took roughly $350 million in bitcoins at Tokyo's MtGox exchange in early 2014—is hardly a rare occurrence in the emerging world of crypto-currencies.

New data disclosed to Reuters shows a third of bitcoin trading platforms have been hacked, and nearly half have closed in the half dozen years since they burst on the scene.

This rising risk for bitcoin holders is compounded by the fact there is no depositor's insurance to absorb the loss, even though many exchanges act like virtual banks.

Not only does that approach cast the cybersecurity risk in stark relief, but it also exposes the fact that bitcoin investors have little choice but to do business with undercapitalized exchanges that may not have the capital buffer to absorb these losses the way a traditional and regulated bank or exchange would.

"There is a general sense in the bitcoin community that any centralized repository is at risk," said a U.S.-based professional trader who lost about $1,000 in bitcoins when Bitfinex was hacked. He declined to be named for this article.

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"So when investing, you always have that expectation at the back of your head. I lost a small amount compared to the others, but I know of traders who lost millions of dollars worth of bitcoins," the trader said.

The security challenge for the bitcoin world does not appear to be letting up, according to experts in the currency.

Continued Vulnerability

"I am skeptical there's going to be any technological silver bullet that's going to solve security breach problems. No technology, crypto-currency, or financial mechanism can be made safe from hacks," said Tyler Moore, assistant professor of cybersecurity at the University of Tulsa's Tandy School of Computer Science, who will soon publish the new research on the vulnerability of bitcoin exchanges.

His study, funded by the U.S. Department of Homeland Security and shared with Reuters, shows that since bitcoin's creation in 2009 to March 2015, 33% of all bitcoin exchanges operational during that period were hacked. The figure represents one of the first estimates of the extent of security breaches in the bitcoin world.

In contrast, data from the Privacy Rights Clearinghouse, a nonprofit organization, showed that of the 6,000 operational U.S. banks, only 67 experienced a publicly disclosed data breach between 2009 and 2015. That's roughly 1% of U.S. banks.

Among the world's stock exchanges, however, security breaches are much higher, with hackers attracted to the large pools of cash moving in and out of these trading venues. The latest survey of 46 securities exchanges released three years ago by the International Organization of Securities Commissions and World Federation of Exchanges found that more than half had experienced a cyber attack.

Moore collaborated on the research with Nicolas Christin, associate research professor at Carnegie Mellon University and Janos Szurdi, a doctoral student also at Carnegie.

In 2013, Moore and Christin wrote a research paper on security risks surrounding bitcoin exchanges when Moore was still a professor at Southern Methodist University. That research, "Beware of the Middleman: Empirical Analysis of Bitcoin Exchange Risk," was peer-reviewed and presented at the 17th International Financial Cryptography and Data Security Conference in Okinawa, Japan, in 2013.

In the most recent study, the rate of closure for bitcoin exchanges in Moore's research edged up to 48% among those operating from 2009 to March 2015. Hacking did not necessarily trigger the closure in each case.

"A 48% closure is not acceptable, but not surprising given that bitcoin is a new technology," said Richard Johnson, vice president of market structure and technology at Greenwich Associates. Johnson has written reports on risk and security issues in the crypto-currency world.

Profitability is a big problem for bitcoin exchanges, with many of them unable to generate enough volume to keep afloat.

Bitcoin exchanges overall could be launched for as low as $100,000 up to $1 million, said Erik Voorhees, founder and chief executive officer of digital currency exchange ShapeShift. That is a fraction of what U.S. forex exchanges' are required to put up.

Retail FX trading platform FXCM, for instance, is required by the Commodity Futures Trading Commission to have at least $25 million in capital at all times.

Recovering Losses

A key factor tied to the risk posed by exchanges is whether customers are reimbursed after closure or after the loss of bitcoins following a hack. Each closure and breach have been handled differently, but Tandy's Moore said the risk of losing funds stored in exchanges is real.

In the case of Bitfinex, which is now up and running after the hack Aug. 2, customers lost 36% of the assets they had on the platform and were compensated for the losses with tokens of credit that would be converted into equity in the parent company.

At Tokyo's MtGox, customers have yet to recover their investments more than two years after closure.

Experts say trading venues acting like banks such as Bitfinex will remain vulnerable. These exchanges act as custodial wallets in which they control users' digital currencies like banks control customer deposits.

"The big exchanges that hold customer deposits are a big target for hackers," said ShapeShift's Voorhees, "and unfortunately most bitcoin exchanges store user funds."

When customers' checking accounts are hacked, there is always a third party at the bank that can step in to deal with the theft.

Not so with bitcoin, said Seattle-based Darin Stanchfield, chief executive officer at KeepKey, a hardware wallet provider. He expects more of these attacks to happen despite efforts to improve security at bitcoin exchanges.

"Unfortunately because of its irreversible nature, bitcoin requires near perfect security," he said.



Avoid this trap which pundits are selling its "virtues" as a cure-all, decentralized, untraceable, government & central bank free market "currency" and as an investment vehicle.  Given its unsecure hackable, internet kill-switch "fake news"excuse nature that Trump is promoting which will probably be used to criminally hoard individuals' savings that will bring complete chaos as a disguised tool of the New World Order to control a depulated humanity via the Beast of Revelation Buy and Sell agenda.