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Bitcoin Risks: What You Should Know About the Volatile Digital Currency

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Bitcoin, a popular digital currency introduced in 2009, features a peer-to-peer network with a public online ledger for tracking transactions. Credits: FabreGov/Shutterstock
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Janne Lindqvist, assistant professor of electrical and computer engineering. Credits: Patrick Kelley
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NEW BRUNSWICK, NJ - If you own Bitcoin or want to invest in the mercurial digital currency, which soared to more than $19,000 before plunging in value, watch out, a Rutgers University–New Brunswick professor says.

Security and privacy issues, not to mention the possibility of a Bitcoin market crash, should give you pause for concern, according to Janne Lindqvist, an assistant professor in the Department of Electrical and Computer Engineering in the School of Engineering.

Bitcoin, a digital currency introduced in 2009, features a peer-to-peer network with a public online ledger for tracking transactions. Bitcoin prices have soared in recent months, and people can buy and sell Bitcoins with some anonymity.

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Rutgers Today sought Lindqvist’s views on a variety of Bitcoin issues. In 2016, he co-authored the first peer-reviewed study on user and non-user attitudes about Bitcoin.

Rutgers Today: Does the general public understand how Bitcoin works?

Based on our study, people don’t seem to understand how it works, and that’s a big problem if you want to invest in it. You can sign up for Bitcoin with a credit card without really understanding it. However, it is not like people generally understand how credit cards work either, so owning and doing transactions is not an issue in itself. The Bitcoin public ledger, known as a blockchain, records all transactions. When someone wants to transfer Bitcoins, they send a message signaling a transaction to the Bitcoin network. The transaction involves the amount of Bitcoins to send, the public address of someone who will receive Bitcoins and a private key used to sign and verify the transaction. The address is a public key owned by the recipient, so users keep the keys to redeem Bitcoins at those addresses in what’s called a wallet. The computers that assemble the transactions in so-called blocks are called miners. They receive Bitcoin rewards as an incentive to verify and post transactions.

Rutgers Today: Why is Bitcoin so hot right now?

I’m sure that some of it is the feeling of not being left out – being too late for the train. A classic example of this phenomenon is tulip mania during the Dutch golden age, when speculators bought tulip bulbs and expected that prices would just rise and rise. Well, they eventually crashed and there was no value to them. We can’t say whether Bitcoin will crash, but Bitcoin mania resembles tulip mania in many respects. It is very human.

Rutgers Today: How would you describe Bitcoin security, privacy and ease of use?

You can buy Bitcoins or parts of Bitcoins with a credit card and create a Bitcoin wallet online. But, somewhat surprisingly, Bitcoin has gained a huge amount of value even though you can’t use it for a lot of important transactions, such as holiday shopping. While Bitcoin transactions can be secure, depending on how you store your Bitcoin wallet online and the mechanisms for protecting your wallet, Bitcoins are stolen from time to time and that’s certainly a risk for users. If you put money in the bank, you get FDIC deposit insurance, but with a digital currency like Bitcoin, you don’t have that kind of security. People typically are not liable for fraudulent credit card charges they are not responsible for. But if your Bitcoin wallet is stolen via hacking, you’ve lost your investment.

Rutgers Today: What can be done to protect Bitcoin users and keep them from getting burned?

Today, what you would need to do is to establish a so-called “cold” wallet that involves, for example, printing records of your possession. Regulators are not quite sure what to do about Bitcoin, and it’s unclear how major banks and retailers will address it. In our study, we found that many Bitcoin users don’t want government regulation, but they want FDIC-like insurance. How long will Bitcoin be increasing in value? Nobody knows. Unlike farmland and other tangible things, Bitcoin does not have intrinsic value. So when it crashes, it crashes, and then you just hope you can exchange it somewhere for money. I would be surprised if Bitcoin’s value doesn’t plunge again at some point, like the stock market does now and then. On the other hand, it can then go back up again. Finally, I do believe Bitcoin and cryptocurrencies (digital currencies) will have an important role in our monetary system and our society, but it is anybody’s guess what that role ultimately will be.

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North Plainfield/Green Brook/Watchung

Found: Green Brook and Warren, Do You Know this Dog?

April 18, 2018

WARREN, NJ - Do you know me? I'm a young, male German Shepherd who appears to be around a year old. Found near Warrenville Road near the Green Brook, Bound Brook border and now at Somerset Regional Animal Shelter. Call  908-725-0308.

Down the Shore: Registration Now Open for NJ State Police Basic Boating Safety Course at the St. Francis Community Center May 1 and 3

April 18, 2018

BRANT BEACH, NJ - Are you ready for sun and warmth?  Spring and summer fun is not that far away even though the weather has been so cold recently.

The St. Francis Community Center is offering a Basic Boating Safety Course in May.  Registration is open for the course that is being held on Tuesday, May 1 and Thursday, May 3 from 5:00 to 9:00 PM at the St. Francis Community Center, 4700 ...

TAPintoTravels Area Teens Invited to the First Meeting of Aviation Explorer Post 523

MORRISTOWN, NJ - Exploring helps young people make more informed decisions about future careers and learn about different jobs within a particular field. 

In that vein, Aviation Explorer Post 523 will hold its first meeting for young men and women, ages 14-20, on Wednesday, April 18 at 6 p.m., at DM Airports, 8 Airport Road in Morristown. Future meetings will ...

Nightmare Commute for Raritan Valley Line Commuters Monday

UNION COUNTY, NJ -- Raritan Valley Line commuters spent more than three hours trying to make their way home from New York City on Monday following the breakdown of a train near Union Station during rush hour.

At 9:47 p.m., NJT tweeted:

Raritan Valley Line westbound train service is operating on or close to schedule following an earlier disabled NJ Transit train near Union ...

Travels Update - Long Beach Island Summer Shuttle No Longer A Free Ride

BRANT BEACH - The Long Beach Island Shuttle, an extremely popular service for visitors and residents of Long Beach Island, will have a fee for the first time beginning Memorial Day weekend. 

The Long Beach Township Board of Commissioners made the announcement at their meeting on Monday, April 9. 

Here is the overview on the fees:

One-way shuttle rides from 10 a.m. to 10 p.m.

Travels Review - Bon Jovi Rocked the Newark Rock and Now They Journey to the Birthplace of Rock and Roll

NEWARK, NJ - If you wanted to define New Jersey, two names come to mind:  Bon Jovi and Bruce Springsteen. 

Travels has had the pleasure of meeting and working with both and can vouch for their love of both the Garden State and greater New York area. This weekend they showed their appreciation to us with a special backstage tour and rock’n concert.

It ...

Down the Shore: Registration Now Open for NJ State Police Basic Boating Safety Course at the St. Francis Community Center May 1 and 3

April 18, 2018

BRANT BEACH, NJ - Are you ready for sun and warmth?  Spring and summer fun is not that far away even though the weather has been so cold recently.

The St. Francis Community Center is offering a Basic Boating Safety Course in May.  Registration is open for the course that is being held on Tuesday, May 1 and Thursday, May 3 from 5:00 to 9:00 PM at the St. Francis Community Center, 4700 ...

Travels Update - Long Beach Island Summer Shuttle No Longer A Free Ride

BRANT BEACH - The Long Beach Island Shuttle, an extremely popular service for visitors and residents of Long Beach Island, will have a fee for the first time beginning Memorial Day weekend. 

The Long Beach Township Board of Commissioners made the announcement at their meeting on Monday, April 9. 

Here is the overview on the fees:

One-way shuttle rides from 10 a.m. to 10 p.m.

Baby Seal Waddles Its Way onto Belmar Beach

BELMAR, NJ — A baby seal waddled its way onto the Fifth Avenue beach earlier today to enjoy one of the warmest days of spring so far.

Around noon on April 12, photographer Nancy Orlowski took these snapshots, which have also been posted on the Belmar Facebook page where it states that the Conserve Wildlife Foundation of New Jersey has been notified.

This is the second known instance ...

Bateman Bill, “ Bijou’s Law”, to Require Training, Licensing for Pet Groomers

April 12, 2018

 

TRENTON, NJ - State Sen. Christopher "Kip" Bateman (R-16) will introduce legislation to increase protections for family pets by requiring pet groomers to be properly trained and licensed following the deaths of three dogs in five months at different New Jersey pet salons. .

“It is sadly far too common for us to read of dog grooming deaths in the news,” said ...

Op-Ed: New Jersey’s Out-of-Network Bill is a huge blow to the middle-class

April 17, 2018

As Trenton currently looks to balance the budget, once again it’s our state’s hardest working citizens who will be left holding the bag. This time, though, it will be the hardworking office and ancillary staff from our small business private medical practices.  A bill called “The Out-of-Network Consumer Protection Bill” A-2039/S-485 looks poised to make ...

Obituaries

Jul 28, 1955 - Feb 8, 2018
Owner/Chef of Jaret’s Stuffed Cupcakes  Beloved Husband, Father, Brother and ...
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Upcoming Events

Sun, April 22, 9:00 AM

White Oak Park, Branchburg

Raritan Valley Habitat Youth Rainbow Run

Giving Back

Sun, April 22, 4:00 PM

Watchung Arts Center, Watchung

Tribute to Earth - The Long Duo in Concert

Arts & Entertainment

Mon, April 30, 7:00 PM

Somerset Valley Playhouse, Hillsborough

Auditions for Smokey Joe's Cafe: The Songs of ...

Arts & Entertainment

Sat, June 2, 9:00 AM

South Plainfield

Holy Savior Academy 5K and Family Fun Walk

Health & Wellness

Tue, June 12, 7:00 PM

FairBridge Hotel and Conference Center, Somerset

SPHS Class of 1968 50the Reunion

Education

Watchung Borough Council Recognizes Watchung Hills Senior Julia Cunningham, Proclaims April 19 Julia Cunningham Day

April 21, 2018

WATCHUNG, NJ - Watchung resident and Watchung Hills Regional High School graduating senior, Julia Cunningham was recognized at a special meeting of the Watchung Borough council Thursday. 

Councilman Bill Nehls praised Cunningham, “ as probably one of the best basketball players in the state,” and “an inspiration for girls in the seventh and eighth grades, ...

WHRHS Softball: Watchung Hills Rolls Over Ridge, 10-1

BASKING RIDGE, NJ - Robin McCabe struck out 13 and allowed just one run on five hits to lead the Watchung Hills softball team over Ridge on Wednesday, 10-1. 

“It was a huge win today,” said WHRHS assistant coach Jeff Dealaman. “Our girls were fired up coming into the game as it was our last game before the county seeding meeting tonight and it was against a ...

North Plainfield Baseball: Weyand Shuts Out South Hunterdon, 4-0

LAMBERTVILLE, NJ -Bruce Weyand went 3-for-3 with a solo home run, two RBI, and two runs scored, and he pitched a complete game shutout, to lead North Plainfield over South Hunterdon on Tuesday, 4-0.

Weyand allowed just one hit and one walk while striking out 11. Antwan Barbour went 2-for-3 for North Plainfield. The Canucks improve to 3-2 and next play at Manville on Thursday.

North Plainfield Baseball and Softball: Canucks Shut Out Rutgers Prep, Fall to Gill St. Bernard’s in Eight

SOMERSET, NJ - Ann Joseph went 2-for-4 with a homer and two RBIs and Ayah Elsais went 4-for-4 with an RBI to lead the North Plainfield softball team over Rutgers Prep on Thursday, 10-0. 

The North Plainfield softball team is now 1-2 and next plays Edison on Saturday.

In baseball, AJ Donofrio won the game for Gill St. Bernard's in the bottom of the eighth with a ...

WHRHS Baseball: Watchung Hills Tops Morristown, 6-3

MORRISTOWN, NJ - Senior Joe Blajsa picked up his first win of the season and Kevin Badger went 4-for-4 with a run scored, a stolen base and one RBI to lead Watchung Hills over Morristown on Wednesday, 6-3.

Blajsa pitched six and 2/3 innings allowing only six hits, striking out five and walking one. Junior Ben Ant came in for the strikeout save to pick up his ...

Watchung Borough Council Votes to Close Library

April 21, 2018

WATCHUNG, NJ  - The Watchung Borough Council voted on Thursday night, before packed chambers and over 500 watching on Facebook live,  to close the Watchung Library and explore redevelopment of the library site on Stirling Road.

After years of discussion and debate, the council decided not to renovate the existing library or construct a new library. Mayor Stephen Pote ...

Warren Township Considers Outdoor Reading Space

WARREN, NJ - Where is the best place to read on a warm summer day? Warren may get a new place, an outdoor reading space at the Warren Library.

At the last meeting of the Warren Township Committee, Committeewoman Carolann Garafola, who sits on the library advisory board, discussed some possibilities of adding outdoor space to the Warren library. 

Open space funds could be used for ...