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Weekly Bitcoin Update – 31 August 2014

A recap of the week’s biggest Bitcoin stories from the perspectives of the best sources for e-currency news around the web

One of the earliest users of bitcoin passed away on Aug. 28th. According to Nathaniel Popper of The New York Times, cryptographer Hal Finney, who had been afflicted with amyotrophic lateral sclerosis (ALS), was taken off life support. His body was subsequently prepared for cryonic preservation. Finney dedicated the latter part of his life to digital privacy, working on the Pretty Good Privacy software project during the 1990s, reusable proofs of work in 2004, and Bitcoin in 2008.

Dallas has become the next city with Bitcoin ATMs within its limits. As Todd Unger of WFAA writes, a growing number of students at UT Arlington were interested in having an accessible ATM. The ATMs are located at Buzzbrews in Deep Ellum and at Pop Dinner off McKinney Avenue. The currency can be used to pay membership fees for the college’s entrepreneur society, according to the organization’s vice president, Justin Hendrix.

An Australian tax official has stated that Bitcoin could eventually be made in Australia legitimate through legislation. Paul Farrell of The Guardian writes that while Australian tax commissioner Chris Jordan does not consider the cryptocurrency to meet the current definition of money,that could change in the future. This would have to be achieved through amendments to the nation’s Tax Act. Currently, Bitcoin is considered to be an “intangible asset” under the Australian taxation system.

DigitalBTC announced its financial results for a three and a half month time span, revealing that its mining operation resulted in a net profit of $0.6 million after tax. Chris Duckett of ZDNet writes that while the company posted an overall net loss of $11.1 million due to accounting and legal fees, the company, which has mined 7,200 bitcoins, has certainly benefited from its operations. DigitalBTC has sold 4,000 bitcoins at $525 each and continues to invest in new mining hardware.

The first Bitcoin exchange in the United Arab Emirates has been launched in Dubai. As Jon Southurst of CoinDesk reports, the exchange will offer secured banking partners the ability to deposit and withdraw funds in UAE dirhams (AED). The exchange notably will have a ‘Future Trade’ feature that will enable customers to set a price and simply wait until the currency’s value reaches that value before making a transaction. Southurst notes that 60% of the UAE’s workforce are Indian expatriates who often send their money back home.

Air Lituanica will now be accepting bitcoin payments for its services. Diana Ngo of CoinTelegraph writes that the airline, which operates flights to various European countries, accepted a large demand from overseas customers for Bitcoin payments. This can be attributed to the extra processing fees that come with e-bank and credit card payments that can be averted through Bitcoin payments. A customer from the Netherlands has already purchased tickets with bitcoins.

Canada’s Simon Fraser University has become the first post-secondary institution in the nation to accept the digital currency for donations. As the Burnaby NewsLeader reports, Simon Fraser Bitcoin Club president Mike Yeung and SFU alumnus Scott Nelson donated $6,000 for the university’s humanitarian co-op project in India. Yeung stated that Bitcoin “fits well with SFU’s mission to engage the world.”

CoinDesk’s Joon Ian Wong writes that Citi, one of the world’s largest financial institutions, believes that Bitcoin’s price will not remain stable due to a large supply of coins. With miners and large merchants oversaturating the market with new coins, as well as the increased “sophistication” in Bitcoin mining, miners will continue to sell new Bitcoins so as to develop a strong return on their investments. Citi notes that 3,500 new BTC are mined on a day-to-day basis, while the currency has a daily trading volume of 60,000 to 100,000 BTC.

According to Wired.com’s Andy Greenberg, the developers of the Fed-proof marketplace OpenBazaar attest that it will not be used for drug trafficking. Users can gain access to the marketplace by installing software on their PCs to facilitate online peer-to-peer trading without an intermediary. As a result of OpenBazaar’s design, no organization “can regulate or shut down” the marketplace. Due to Bitcoin’s previous associations with drug trafficking, OpenBazaar’s operations lead Sam Patterson and founder Brian Hoffman have been asked questions regarding whether the program has been designed for the exchange of currency for narcotics.

Charles Shrem has decided to plead guilty to charges of helping to facilitate the drug trade on Silk Road. Andrew Ross Sorkin of The New York Times writes that Shrem will be pleading to “aiding and abetting the operation of an unlicensed money transmitting business.” Silk Road was used for the exchange of narcotics and drug paraphernalia. The New York federal court holds that Shrem converted billions of dollars into Bitcoin for use on Silk Road, which made it more difficult for the exchanges to be tracked.

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