The Securities and Exchange Commission has denied the application for the Winklevoss Bitcoin Trust ETF, in a stunning defeat for its founders, the Winklevoss Twins. In an order today, the commission found that the proposed fund was too susceptible to fraud, due to the unregulated nature of Bitcoin. The result is a major setback for the fund, and a frustrating false start for the crypto-currency at large.
It’s not a new refrain: Back in March 2009, China’s central bank governor, Zhou Xiaochuan, also called for the creation of a new reserve currency, albeit in less heated language. The world needs a new “super-sovereign reserve currency” to replace the current reliance on the dollar, Zhou wrote in a paper published on the People’s Bank of China’s website (Zhou still heads the bank). The goal, he wrote, is to “create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run.”
As market data enters the switch, the Ethernet frame is parsed serially as bits arrive, allowing partial information to be extracted and matched before the whole frame has been received.
Then, instead of waiting until the end of a potential triggering input packet, pre-emption is used to start sending the overhead part of a response which contains the Ethernet, IP, TCP and FIX headers. This allows completion of an outgoing order almost immediately after the end of the triggering market feed packet.
The overall effect is a dramatic reduction in latency to close to the minimum that is theoretically possible.
Bitcoin transactions are verified by the work of software run by other people using the currency, a process that takes on average 10 minutes and can be much longer, an hour in the case of many exchange sites. Lee says that hinders operators of online stores from using the currency. “With Bitcoin, sometimes merchants are forced to accept unconfirmed transactions because confirmations are way too slow,” he says. “Faster confirmations lead to a more useful currency.” Litecoin transactions are confirmed on average every 2.5 minutes, which Litecoin’s developers say is more practical for businesses.
The private key itself is AES-256 encrypted. After exporting Bitcoin private keys from wallet.dat file, data is stored in a TrueCrypt container on three separate flash drives. Using Shamir’s Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model. Incorporating physical security with electronic security, each flash drive from various manufacturers is duplicated several times and, together with a CD-ROM, those items are vaulted in a bank safety deposit box in three different legal jurisdictions. To leverage geographic distribution as well, each bank stores only part of a key, so if a single deposit box is compromised, no funds are lost.
That trend, naturally, shows up in its full-year numbers. For fiscal 2012, Ciena generated revenues of $1.83 billion, up about 5 percent year-on-year, and a net loss of $144 million. Its full-year non-GAAP loss was 23.5 million, or 24 cents per share, slightly worse than Wall Street had expected.
However, a few key financial institutions have embraced patents enthusiastically. This week, the Chicago Board Options Exchange has taken finance-patent wars to a new level. CBOE filed a lawsuit against a competing options exchange, International Securities Exchange (ISE), demanding $525 million for the infringement of three patents: US Patent Nos. 7,356,498, 7,980,457 and 8,266,044. The board asked for the first patent in 1999, at the height of the patent-everything craze, and the patents were issued between 2008 and 2011.
The program placed orders in 25-millisecond bursts involving about 500 stocks, according to Nanex, a market data firm. The algorithm never executed a single trade, and it abruptly ended at about 10:30 a.m. ET Friday.
Translation: The ultimate goal of many of these programs is to gum up the system so it slows down the quote feed to others and allows the computer traders (with their co-located servers at the exchanges) to gain a money-making arbitrage opportunity.
Wall Street’s excitement over a game publisher once counted among the stars of the new social Internet has cooled since its December initial public offering. On Friday, analysts slashed their price targets on a stock that dived as much as 22 percent, to $2.21 – more than three-quarters off its $10 debut.
HFT affects all investors to an extent, because stocks are now priced differently than in the past. The market used to consist mostly of investors analyzing cash flows and balance sheets, trying to calculate a company’s fair value. HFTs, on the other hand, react to movements in stock prices alone. That is not necessarily a bad thing, but since HFTs are responsible for two-thirds of the trading volume, we have the strange situation where they can set the price based on what they perceive others’ perceptions to be.