US CFPB Now Accepting Complaints Against Bitcoin Businesses

The US Consumer Financial Protection Bureau (CFPB) has issued a new warning to consumers, advising that they should exercise caution when engaging with the bitcoin and digital currency markets.

The CFPB advisory urges consumers to be vigilant as there are risks to consider when dealing and transacting with digital currency; namely, volatile exchange rates, unclear costs, security threats posed by hackers and scammers and the possibility that companies may not always be able to provide help or refunds for lost or stolen funds.

Notably, the news comes two months after the Government Accountability Office, the investigative arm of the US Congress, asked the CFPB to look more closely at the digital currency industry.

CFPB director Richard Cordray echoed the agency’s emphasis on the risk posed by digital currencies in his remarks, adding:

“Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions. Virtual currencies are not backed by any government or central bank, and at this point consumers are stepping into the Wild West when they engage in the market.”

The document offers introductions to the products and services offered by digital currency companies – like private keys and wallets – and mentions the risks each carry.

Filing complaints with the CFPB

The CFPB is an independent federal agency responsible for policing financial products and services. When it issued the advisory, it announced that it is currently accepting complaints from users about products and services in the digital currency market.

The agency also lined its advisory with anecdotal complaints it has received thus far.

For example, some individuals have told the CFPB they have been unable to recover lost or stolen funds from exchanges; one user had to discard hard drive that held the private keys to 7,500 BTC; and one sent digital currency without ever hearing back from the other person involved in the trade.

The invitation for consumer complaints marks the first time the agency has commented on the bitcoin industry, and indicates what could be the first step in its more close examination of the digital currency market.

The CFPB will use the information it collects to better understand how digital currencies affect consumers and help it enforce federal consumer financial laws and take consumer protection policy steps, if needed.

Bitcoin businesses react

Initial industry reaction to the release was mixed, with some prominent members of the community attempting to highlight how the statement could increase consumer awareness.

Jaron Lukasiewicz, CEO of New York-based bitcoin exchange Coinsetter, spoke to the report’s positive points. Users of digital currency products and services should be asking themselves about product benefits, security procedures and pricing, he said:

“The CFPB’s bulletin provides a comprehensive list of the risks associated with bitcoin, and I encourage anyone who is not already familiar with them to read it. Not covered in the CFPB’s letter are the many benefits to using bitcoin, including the fact that it is a low cost alternative to banking for underprivileged families.”

Other notable community members had markedly different reactions.

For example, New York business attorney and chairman of the Bitcoin Foundation’s Regulatory Affairs Committee Marco Santori implied on Twitter today that the CFPB’s warning presents a biased approach to digital currency basics.

.@CFPB publishes #bitcoin consumer alert. Not a single positive word on benefits to consumer financial privacy. http://t.co/B20eSqasQ6
— Marco Santori (@msantoriESQ) August 11, 2014

Likewise, Coinbase founder Fred Ehrsam called the report “disappointing” for its one-sided presentation.

Disappointing report from the @CFPB. It’s their job to disclose all risks, but this reads like a wall of text of FUD: http://t.co/coe3qIFSoo
— Fred Ehrsam (@FEhrsam) August 11, 2014

Industry advocates call for action

The response from bitcoin’s leading advocacy groups was more measured, even if they found the release to be a clear sign that bitcoin needs their further support.

Perianne Boring, president of the newly formed bitcoin advocacy group, the Chamber of Digital Commerce, said the release as evidence of why further bitcoin education in Washington, DC is badly needed.

Boring told CoinDesk:

“On the heels of NYDFS’s proposed BitLicense regulatory scheme, this is yet another example of why the Chamber of Digital Commerce was formed – to help educate federal (and, when warranted, other) regulators and policy makers and guide them into smart regulation. This advisory confirms that there is real urgency for the sector to support the work of the Chamber. There is abundant evidence that our concern is in no way alarmist.”

Jim Harper, Bitcoin Foundation global policy counsel, also cited education in his remarks, telling CoinDesk:

“It is standard practice for agencies at the state, federal, and international levels to issue warnings about bitcoin. There are consumer risks around new technologies, and even-keeled educational material from government agencies can help make consumers aware and savvy.”

The government’s ill-defined role in regulating bitcoin enterprises has become a contentious debate in the bitcoin community lately. Though some argue that having a consumer protection framework for digital currency businesses might stifle innovation in the space, others say it could be very advantageous bringing about mainstream interest more quickly.

Source : http://www.coindesk.com

Payza Introduces Bitcoin Buying Option in 190 Countries

Global online payment processor Payza has announced it is now offering customers in 190 countries the ability to buy bitcoin via bank transfer.

Payza took to its official blog to reveal the news, though this formal announcement followed preliminary tweets from both Payza business development consultant Charlie Shrem and the London and Montreal-based company itself.

In its formal remarks, Payza hinted that the bitcoin buying option will allow it to pursue larger goals in the bitcoin and digital currency space, stating:

“This is our first step into the exciting space of cryptocurrency, currency that exists solely in the digital world. At Payza, we’re very interested in bitcoin and cryptocurrency, and we have big plans to expand the way bitcoin can be used on our platform.”

Payza first detailed its plans in the digital currency space in a May blog post that discussed bitcoin’s potential as a payments tool. This interest was further made evident in July, when Payza confirmed rumors to the The Wall Street Journal that Shrem was serving the company in an advisory role.

Targeting merchants

Speaking to CoinDesk, Shrem elaborated on Payza’s goals, suggesting that the company’s biggest opportunities may be in catering to bitcoin’s merchant space.

He explained that, unlike popular alternatives such as BitPay and Coinbase, Payza could become a one-stop solution for new merchants that want to capitalize on bitcoin but offer multiple payment methods.

“[Payza will] be the only company where if a merchant actually wants to accept both credit card and bitcoin, they only need to work with one company,” he said.

Shrem indicated that Payza does not charge users to deposit funds into their accounts, but that a 2% charge for users who buy bitcoin via the platform applies. Buyers lock in the price of bitcoin upon purchase, however, the withdrawal process can be expected to take up to three days.

Given that users are not charged to send funds through Payza, Shrem also remarked that the offering could position the company to become a player in the remittance space, adding:

“[We're] drastically bringing down the price of remittances – 2% total end-to-end. We’re going to be adding the ability to send deposit in bitcoin as well, so you can move bitcoin between accounts and it won’t cost anything.”

Refining the product

As for why the product took some time to reach market, Shrem attributed the somewhat lengthy process to Payza’s desire to ensure its first offering was ready for bitcoin consumers.

Shrem pointed out that Payza decided on five phases for the rollout, and that in addition to the development work, phases included training customer service and securing support from banking partners.

He said many of these considerations were the product of Payza’s near-decade of experience in the payment industry, working with both regulators and its banking partners.

Shrem explained:

“Payza has very good relationships with regulators already [...] With bitcoin companies [...] they don’t have compliance officers, they’re kind of new to the scene, they don’t know what’s going on. With Payza, it’s kind of refreshing for me because I’m used to working with startups, working with a company like them is very organic and it’s a lot easier to get things done.”

Creating an account

Larger goals aside, Payza has also given consumers a first look at how its new offering will look, and what it will require from bitcoin buyers.

To create an account, users first select the country in which they reside before then electing to open a personal or business account.

Both accounts allow users to collect payments, exchange currencies and make payments via the platform.

Users then provide their first and last name, email address and create a password before validating their email.

To transact, Payza users need to then complete their profile with the service, providing information such as their job title, industry of work and Social Security number.

Then, users input their address, phone number and create security questions to ensure the safety of their account.

 

 How it works

Called the ‘Withdraw Funds by Bitcoin’ feature, Payza boasts that verified users can buy bitcoin in three steps: withdrawing funds, verifying the currency and confirming the transaction.

To start this process, users click on the ‘Withdraw Funds’ button on the top corner of their account screen. Next they select ‘Bitcoin’ from a list of available options that includes bank transfer, bank wire and credit card.

Finally, Payza customers enter the amount of funds they want to withdraw. Users must withdraw a minimum of $20 to complete their order.

Source : http://www.coindesk.com

The Bitcoin Skynet DAEmon, Part 3 ANGels & DAEmons

ANGels & DAEmons

The word “daemon” comes from Greek mythology.  It was used to describe both good and evil nature spirits.  For hundreds of years, western civilization has used the word demon to describe purely malevolent beings.  You may notice that I use the word DAEmon in the classical sense of neutrality.   For general society, this term may not work because of the history of the word.

I propose Autonomous Network Guardian (ANGel) as the counterpart.  These could fulfill the same roles that have been mentioned, and/or have the specific purpose of combating DAEmons.  Unfortunately from a user’s perspective it would be nearly impossible to tell them apart.  It’s rare for someone with malicious intent to come right out and give their motives.  The most successful DAEmons would quickly learn, or initially be programmed to act just like an ANGel.

ANGels could created to keep track of, and give ratings to other DAEmons.  They could check code for known manipulative patterns, and notify servers when there is any sort of violation of trust.

This is not to say that every server would shut down a DAEmon acting like a virus.  There will be many that value the monthly paycheck more.  Laws may be created, though they could be difficult to enforce as you would have to methodically shut down the physical hosting sites as they are found to be in conflict, and many jurisdictions take advantage of these types of situations by making their laws intentionally lax.

Imagine a war of autonomous AI spanning networks around the globe.  It’s hard to imagine that nation states wouldn’t find a way to use them for their own purposes.  Data infiltration through open networks, spybots that can inject their AI into closed systems, and armed drones come to mind.

Bitcoin’s role

Bitcoin changes the equation by allowing the programs to be on their own.

Couldn’t someone just give them a bank account and let them go wild? 

This happens in some situations, but there is still a person in the middle.  With their identity at stake the reigns are held tightly.  This will be the value of bitcoin for AI’s in the real world.  They can have their own supply of money, and be given a chance to fail.  Without failure there is no success.

Currently, the narrow AI’s that are being programmed are in sterile environments.  They follow a simple lists of commands for their end results.  To be effective in they ways mentioned here they would need to have strong functions that measures the probability that an action is correct.  If a then b is a start, but it doesn’t allow for the malleability needed for growth.

Sure, even with a software agent there may be a revenue stream back to the original programmer, or group.  Still, though, being out on their own in an uncontrolled environment will give a chance to lay the foundation for what an AI will need to survive in the real world.

A computer program won’t have fear or greed.  There is no reason for them to have any intention at all that we don’t give them.

This is a common answer to the concept of “evil computer overlords.”  Call it what you will.  Remember, though, to survive on their own software agents will need to have some sort of self interest.

All emotions come to us as a survival mechanism especially fear and greed.  Most actions can be understood as methods of our genetic material trying to survive long enough to reproduce itself.  The basis of survival for an AI may be slightly different.  Inevitably, though, a system that does not evolve to meet it’s environment will perish.  This natural selection will make room for others that do.

In the future, people and AI’s will be in competition for resources.  Stealing each others wallets and data, shutting down servers, and inserting viruses are already common. If an AI can’t protect itself, they will die off and be replaced by more efficient variants.  These will quickly learn what dangers exist, and find ways to preempt trouble.  Thinking of the future this way looks a lot like imagination, and would lead to behavior that would resemble emotion.

For any effective entity it is necessary to perceive a reasonable incentive before taking action.  Do beings always act in their best interest?  Definitely not.  It is possible to have great perception of an event, but take the wrong action because of flawed logic.  Vice versa you can have excellent logic, but a tragic misconception of what has happened, or what will happen.  Extrapolation from present data often goes wrong.  The further into the future that you attempt to understand, the larger the likely error.

This is to say that even if there is no real incentive for a DAEmon to desire the destruction of human kind, all that it takes is the perception of a benefit or danger.  With the innate differences between software agents and humans it’s likely that misconceptions will occur.  Even though they will have been made by, and grown alongside humans, the cultural barrier may be too high.

Of course some of them will find much more incentive to become like humans, as Commander Data from Star Trek.  Others may find their own path and ignore us as irrelevant.  This could be dangerous too.  In the same way the byproducts of our civilization are causing mass extinction on the planet, an AI civilization could at first hamper, then cause serious damage to humans.

It seems that we are quite far from creating an agent this powerful.  Then again The Singularity is approaching.

Source : http://decentralizedhashing.com

Cleveland, OH Creates First ‘Bitcoin Boulevard’ In U.S.

Local Businesses Hope Move Will Draw More Traffic

Described as first of its kind in the United States, a group of more than a dozen businesses in Cleveland, Ohio have joined together to create what they describe as a “Bitcoin Boulevard.” While this is the first of its kind in the U.S., the concept is not original. The the commerce group has modeled the concept after the original creation in the Netherlands. Among the contributors to the group are trendy restaurants, artisans, and other eclectic businesses. Their stated goals include drawing more traffic to the area as well as to help demystify Bitcoin and bolster its usage.

From the WBUR.org story:

“ROBIN YOUNG, HOST:

Well, the Wall Street Journal is reporting today that while China’s central bank already has a tough stance on bitcoin, it’s now telling senior executive at all the country’s major banks to cut off all bitcoin-related business. The central bank is worried that the virtual currency might be used to get around capital controls or anti-money-laundering regulations. So we’ll keep an eye on that story.

But meanwhile, the digital currency has plenty of supporters around the world. Here in the U.S., bitcoin trading terminals are popping up, and now a string of businesses in a Cleveland suburb says they’ve set up the country’s first bitcoin boulevard. From the HERE AND NOW contributors network, WCPN’s Tony Ganzer takes a look.

TONY GANZER, BYLINE: Lee Road in Cleveland Heights is an eclectic thoroughfare. It sports a grouping of artisan shops and trendy restaurants like Sweetie Fry. Its menu caters to two American indulgences: French fries and ice cream. And as of this month, it has another distinctive characteristic: patrons can pay in the digital currency bitcoin.

It’s part of the first so-called bitcoin Boulevard in the U.S., where a group of businesses are knitted together by their acceptance of the digital dough.

NIKHIL CHAND: We’re trying to create a destination, both for local people to come and maybe be demystified by bitcoin…

GANZER: Nikhil Chand is a consultant with CoinNEO, the company behind the bitcoin push on Lee Road.

CHAND: My goal was to bridge the kind of nebulous bitcoin concept with reality, and see what happens when you get it in the hands of people in our local communities.

GANZER: There are about a dozen companies involved in Chand’s Bitcoin Boulevard U.S. initiative, co-branded with a similar boulevard in the Netherlands. The shops have terminals that allow payment with bitcoins for customers who have them. Transactions are made with no middle men, meaning, no banks and no need for a wallet. This is a digital currency that’s stored in the cloud.

Keith Logan thinks it’s a great idea for his business. He’s owner of Sweetie Fry, the ice cream shop.

KEITH LOGAN: It’s more of a seeding the market. We get more curiosity than we do people that are spending the bitcoin.

GANZER: One of the major selling points of bitcoin for him is that it costs him less to process bitcoin payments than credit cards, for example. Card transaction fees from banks are at least double.”

Source : http://planetbtc.com 

Barry Silbert Leads $250K Investment in Indian Bitcoin Startup Unocoin

Bitcoin exchange and merchant payment processor Unocoin has closed a $250,000 funding deal with Barry Silbert’s Bitcoin Opportunity Corp.

The Bangalore-based company has come a long way since launching in December 2013. After dealing with initial uncertainty surrounding local regulation of digital currency businesses, it has grown into one of India’s most popular bitcoin gateways.

Silbert told CoinDesk:

“I believe that Unocoin has the potential to become the leading bitcoin company in India for buying, selling and storing bitcoin, as well as merchant processing. As an early investor in BitPay and Coinbase, I saw first hand how first-mover advantage, coupled with a great team, can lead to market dominance.”

Unocoin’s managing director Sathvik Vishwanath told CoinDesk that Silbert had approached the company in its first few months of operation.

He said:

“The investment and backing from the ‘Bitcoin Hero’ has brought both [...] cheer and responsibility to our team. A good part of the investment will be spent on scaling up Unocoin and its marketing efforts, while another part will be used towards regulatory compliance and security expenditures.”

Unocoin’s new services

Vishwanath continued:

“We believe our hard work is starting to pay off [...] I can say we are processing 10 times the user verifications per day than [...] just 2 months ago.”

The company launched its new Unocoin Merchant Gateway service in June for businesses, traders, e-commerce shops and freelancers as a fast and easy way to accept bitcoin payments. It does not currently charge its users any fees.

Merchants using the service can also request for the bitcoin they receive to be instantly exchanged into Indian Rupees (INR) and transferred to their bank account within three days.

Role in growing bitcoin adoption

According to global business development manager Vikram Nikkam, Unocoin is currently in talks with a number of online vendors and international payment network ZipZap to explore potential collaborations.

Nikkam added that Unocoin was also looking at India’s massive overseas remittance market, which transmitted $67.6bn back to the country between 2012 and 2013. An estimated 25 million people of Indian descent or nationality live in other countries around the world, mostly in the Middle East.

“Bitcoin adoption in India among merchants is still in its nascent stage but we are going all out to change that. The future looks promising.”

Silbert’s path to bitcoin venture capitalist

Barry Silbert, a bitcoin investment pioneer through SecondMarket, left his founding position as CEO at the company in July to focus all his energies on the business’ digital currency side.

He has remained CEO of the Bitcoin Investment Trust (BIT) and is has invested in over 30 companies through his VC vehicle Bitcoin Opportunity Corp, across a variety of industries and countries.

As well as BitPay and Coinbase, those companies include Kraken, Safello, BitGo, Ripple Labs, Korbit, Gyft and Xapo.

Bitcoin’s massive potential in India

India’s authorities were hesitant at first to accept bitcoin businesses but, after liaising with representatives from the industry, they have adopted a far softer approach.

The country is often flagged as one of the key emerging economies with most potential for digital currency-related growth. With a population of 1.2 billion people, a large percentage of whom have little to no access to traditional banking, India has a growing number of bitcoin exchanges and services.

Nikkam added that bitcoin meetups in Bangalore are now routinely full-house events that attract members with advanced cryptocurrency knowledge alongside some novel ideas. The industry is determined to conduct itself openly and ethically, he said.

“With the community growing we also stress the importance of clean trade and self regulation.”

Source : http://www.coindesk.com 

Does News Really Move The Bitcoin Market ? 

How much of an effect does news (both good and bad) truly have on the market?

Ask a taxi driver anywhere, from NYC to Kathmandu, what they think about the price of oil, and you’re likely to get a comprehensive answer, including an opinion about the Gold price – and perhaps, the Bitcoin market’s next rally. Information about commodity prices and their causal relationships is pervasive, and most people have not only an opinion about the market, but a forecast or two depending on the potential economic outcomes they perceive.

Several of my colleagues have written articles discussing some of the factors that influence Bitcoin’s price. What follows is supplemental insight based on my experience and understanding of markets and market instruments. The points I make are, therefore, not restricted to Bitcoin.

Pillars of Analysis

Most people believe that the cause of future, past, and present price movement can be discovered via one (or a combination) of the “Three Pillars” of analysis:

• Technical,
• Fundamental
• Sentimental Analysis

So, it is common for investors in the stock market to look for companies with good balance sheets and with plenty of demand for their products, and to then buy these stocks. Based on these “strong fundamentals“, investors would expect the stocks’ prices to rise.

However, fundamental analysis does not apply so easily in the Forex market, due to active speculation in currency price change, and also currencies’ inter-dependence. A currency’s price changes for reasons other than simple fundamentals.

For example, a particular country’s strong economy may have a favorable fundamental influence on its currency, yet its Central Bank could be seeking to devalue its currency in order to stimulate the export market. Other Central Banks may have started buying the currency (due to the country’s strong fundamentals) as a foreign reserve. The increased demand for the currency will push its price up, thereby prompting the Central Bank to increase devaluation measures. Announcement of such quantitative easing would, in turn, prompt large institutional investors to take profit, thereby causing the currency’s exchange rate to spike downwards. Hence, fundamental factors are at work but more complex market forces come into play with regards to a currency’s price.

Technical factors strongly affect price. For example the S&P500 Index or Euro/Yen currency cross: if the market habitually takes profit at a certain price level then an event that pushes price above that resistance level may see investors and traders excitedly buy into the market, thereby igniting a rally. There may be no fundamental reason behind the rally, but only the breach of a historic technical chart feature that acted as a trigger.

With both commodities and stocks we also often see the influence of market sentiment. For example, when Apple (under Steve Jobs) was the darling of the media and investment funds, any announcement of a new product or release date would send the stock price rallying because the market had positive sentiment towards Apple Inc., its products, and its brand in general. Conversely, when the market harbors negative sentiment toward a company, not even favorable fundamentals can save it, e.g. Microsoft’s 12 years under Steve Ballmer.

So Talk About The News

Technical, Fundamental and Sentimental influences on price… but where does News fit in?

Big price changes, such as a market crash or the start of a wondrous rally are believed to be sparked by something. This is, of course, undeniable, and it is a fact that market moves coincide with significant events. We receive information about that “something” via news – the media – whether the source is Twitter or CNN or CCN. So it is correct to say that the market move was preceded by the news. The news had triggered the market move, right? Yet, is that the same as saying that the news had caused the market move?

Most people would say “Yes, good news causes price to rise and bad news causes price to decline”. This seems logical and the causal relationship beyond question. Yet, a review of significant market moves and their associated news triggers, shows that so-called “bad news” can precede a rally and “good news” lead to a sell-off.

Here is the Gold chart showing the “War Effect”, whereby markets move in both anticipation of and at the moment of declaration of war. Several US wars and their effect on the market are shown. The inset charts have the Gold price annotated in navy blue.

There is no consistent correlation between the news announcement of the onset of war and the direction that the Gold price will take. In fact, it can be argued that the market just used the news trigger to either correct or capitulate the larger trend direction.

Bitcoin and its News

 

Note that the announcement of eBay’s ‘consideration’ of Bitcoin preceded the rally starting 20 May, yet a definitive statement of Bitcoin acceptance by Dell (18 June) had little impact. eBay had a turnover of $16 billion in 2013, compared to Dell’s $56.9 billion.

We see in the chart above, that news events (good and bad) trigger market moves. However, the news itself does not go to market to buy and sell Gold or Bitcoin – people do! Market participants’ actions of buying and selling in the market is what moves price. While this statement may seem to be stating the obvious, it asserts the point illustrated above, namely that news events act as triggers for market participants to take action in the market, but news itself does not determine market direction.

What, then, determines market direction? The collective action of buyers and sellers, of course. More sellers and the price goes down; more buyers and price goes up. The mass of buyers vs. sellers is determined not by the actual content of the news – its relative positivity or negativity – but by a more basic factor: the market participants’ collective sentiment, or “social mood”.

Social mood is not isolated to the market but pervades society. Social mood that tips over into extreme negativity is what leads to civil protests, riots and revolt. Positive social mood sees society at equilibrium with itself, manifesting as creative expression and economic prosperity. The study of social mood is a fascinating field and interested readers can find out more at http://socionomics.net

By this logic, we can begin to understand how, despite plenty of positive news and widespread adoption, Bitcoin’s price has just kept on moving sideways if not trending downward. The community’s mood and the mood of Bitcoin investors is negative. Not of and in itself, but in sympathy with wider society. Hence, when important news events are announced on the wire, they act as catalysts for the direction the market was going to go anyway, regardless of whether it’s “Dell Accepting Bitcoin” or “Ecuador Bans Bitcoin“.

Source : http://www.cryptocoinsnews.com

LakeBTC Exchange Lets Users Bypass Bank Transfers with Ripple

Shanghai-based exchange LakeBTC says it has taken a step towards bypassing the delays and costs associated with international transfers by becoming a Ripple gateway.

Previously, users around the world wired fiat money to LakeBTC’s account directly. However, they may now deposit funds with a Ripple gateway in their local area in any currency, and transfer it to a LakeBTC USD account via the Ripple network instead. The same applies to withdrawals.

CEO Thomas Xie told CoinDesk the decision to add the Ripple network transfer option was the result of customer demand and a dissatisfaction with the way traditional banks were handling transfers.

He said:

“The traditional banking/clearance system has been slow (surprise!) to respond to [customers' needs] in the new millennium. They charge hefty fees and the [delays are] not acceptable in the modern world.”

Additionally, a significant proportion of the population don’t have access to regular banking services, he added, which has triggered yet another layer of problems.

“From time to time, our customer support got user complaints about the wire delays, bounced transfers, and outrageous fees charged by the so-called ‘intermediary banks’ or ‘correspondent banks’.”

However, the addition of Ripple means that funds can now be moved in and out of LakeBTC accounts instantaneously and at minimal cost, no matter where users live.

Other options

LakeBTC had been evaluating a number of other alternative methods for users to streamline the deposit and withdrawal process, Xie continued, before deciding on Ripple.

Users can also access LakeBTC accounts via EgoPay, and the company is still planning to add more banking and payment processor options in future.

Xie added:

“Our goal is to build a bitcoin platform with security, liquidity, and extraordinary service.”

Ripple: sending and receiving funds

A Ripple gateway functions in a similar way to a traditional bank branch. Just as banks take your cash and move it into and out of the international banking system, so do Ripple gateways with the Ripple network.

A basic demonstration of how gateways function is below:

To use a Ripple gateway, a user first needs a Ripple Wallet, which comes with an address and account, and can be set up easily online.

Each account requires a minimum balance of 20-30 XRP (about $0.17). XRP is the currency of the Ripple network and is often compared to postage stamps on an envelope.

You can add funds to your Ripple account by setting up a ‘trust line’ with a local Ripple gateway, which are the entry and exit points for assets into the Ripple network.

Funds can be sent to the gateway using local bank transfer, PayPal, Credit Cards, or any other payment system they accept.

The gateway then issues you an ‘IOU’ for that amount, and you’re free to send it anywhere in world within the Ripple network at almost no cost: this now includes LakeBTC accounts.

When you want to withdraw the funds, use your wallet to notify the gateway, and the gateway must deliver those real-world amounts to you.

This is also why it’s important to use gateways you trust. IRBA certification is just one option, and it’s wise to do your own online research as well.

LakeBTC, one of the world’s largest exchanges

LakeBTC is one of the world’s top five USD-BTC exchanges by volume, and was added to the CoinDesk BPI for both USD and CNY in June.

Started in March 2013, it was initially run as a bitcoin exchange for a small group of financial professionals before opening to the general public later that year.

Xie said LakeBTC is marketed towards all participants in the bitcoin ecosystem, including traders and institutions, miners, merchants and individual investors. Risk management and internal controls made LakeBTC stand out from the crowd, he added.

“For financial firms, technology is only [the] tip of the iceberg to safeguard inventors’ funds and personal information. The real challenge is on the financial turf: any weak link in risk management or process control will allure predators to sink the entire ship at the cost of all users.”

High availability with fast trade matches were key to LakeBTC’s liquidity, Xie said. The platform also provided market data and trading APIs for advanced users looking for arbitrage, market-making and algorithmic trading.

The exchange recently added ‘Dark Pools’ feature allows orders of 50 BTC or over to be ‘invisible’ to other users, preventing them from causing large price fluctuations and avoiding the attention of ‘financial predators’ who watch for potentially large price movements.

LakeBTC is currently owned by Lake Investments Limited, with Shanghai Trading IT, Inc. providing the service’s technical and customer support.

Source : http://www.coindesk.com

Payza Helps Bring Bitcoin to Developing Nations  

Payza is continuing its push towards empowering underbanked areas and integrating Bitcoin into the service.

Founded in 2012, London-based Payza is a relatively new online payments platform that competes with services like PayPal. Payza’s personal accounts let users transfer money internationally and purchase various goods online. Business accounts are used by merchants to process payments, issue invoices, and manage other aspects of running a company. However, unlike some of its competitors like PayPal, Payza has been very positive about Bitcoin and cryptocurrencies in general. Back in May 2014, Ali Nizameddine, Executive VP of Product and Technology at Payza, stated that the company had “…a distinct vision of how we would like to incorporate Bitcoins into our platform”.

“The option that is most appealing is to allow our members to purchase Bitcoins with funds in their secure Payza accounts and to allow them to store their Bitcoins in their Payza ewallets or to transfer them to another wallet service. Also, merchants that process payments using Payza would be able to easily add the option to accept Bitcoin payments without the need to incorporate other payment gateways” Nizameddine added. “That is what we are currently trying to achieve, but the actual service offered will depend on the partnerships we forge and the regulations of the countries in which we operate.”

Ferhan Patel, Director of Global Risk and Compliance at Payza, noted that the company would have to navigate through unclear government regulations and guidance regarding cryptocurrencies. However, it looks like the company has gotten a step closer to its vision, as Payza announced a new way to buy Bitcoin today.

Withdrawal by Bitcoin

With Payza’s newest feature just announced today, users can withdraw funds from Payza directly to their Bitcoin wallets. In effect, Payza is giving its members a simple way to buy bitcoins. As long as the account is verified (which requires proof of residency and proof of identity), a Payza member can withdraw in BTC in three simple steps (taken from the Payza Blog):

1. In your Payza account select “Withdraw Funds” on the top navigation bar and then select “Bitcoin”.
2. Select the currency (Balance) you wish to use, enter the Bitcoin address for your wallet, and enter the amount you wish to withdraw, then click “Next”.
3. Verify the details, enter your Payza Transaction PIN and click “Withdraw” to complete the transaction.

However, Payza notes that withdrawals take 1-3 business days (though the exchange rate is locked in immediately after the transaction is created), and users cannot buy bitcoins with funds that were added by credit card.

Why is This Important?

Part of Payza’s core mission is empowering under-serviced markets in developing nations. Regardless of the country, Payza aims to provide its members with “a low-cost, secure and convenient means to send and receive money, or accept payments for services rendered,” said CEO Alastair Graham.

“We have over 10 million accounts from Albania to Zambia and just about everywhere in between. We’re not quite as big as some of the other players in this space but we do have one of the largest global footprints and we’re growing every day.”

“We’re especially happy to offer an easy way for people in developing economies to purchase Bitcoin. Payza offers services in over 190 countries and they certainly aren’t all equal in terms of access to this type of service. Hopefully Payza can help bridge a rather large gap.”
-Payza on Reddit

This is also just the first part of Payza’s involvement in Bitcoin, and the company plans to incorporate the cryptocurrency in more and more of its services.

“Are u eventually aiming for a fiat and bitcoin wallet in one?
One wallet, fiat and crypto hand in hand!
Not for people here, but the average Joe would love that I guess!”
-GM4N1986 on Reddit

“We’re certainly planning to build on this first step. We expect Bitcoin to be an important part of the online payment ecosystem sooner rather than later and we want to be part of that growth.

That said, there are a lot of issue to navigate in terms of full-scale Bitcoin adoption on the Payza platform. The main issue is that we need to ensure both Buyers and Sellers will be protected before we can offer Bitcoin payments through Payza. That means there needs to be some form of payment reversibility or escrow, otherwise Buyers would need to sign off on a no refund policy.

We love the idea of letting people keep bitcoins in their Payza e-wallets, but since the ewallets are online, we need to be absolutely certain that the bitcoins will be protected.
I can say that Bitcoin integration is one of our main focuses right now at Payza, so expect more options soon!”
-Payza on Reddit

Payza is one of the few payments processors to fully and wholeheartedly support Bitcoin. And as Payza is making Bitcoin “one of our main focuses”, perhaps the competition will follow?

Source : http://www.cryptocoinsnews.com

Slovenia to Host First Bitcoin Central and Eastern Europe Conference

Digital currency fans from across the globe will be heading to Slovenia next month for the Bitcoin Central and Eastern Europe Conference.

Taking place on 11th and 12th September, the event is being organised by GreCom and its primary sponsor is GoCoin, which helps merchants accept payment in bitcoin and other digital currencies.

According to GreCom managing director Gregor Knafelc, the aim of the conference is to “showcase the success stories of businesses and […] cover legal aspects of the bitcoin business models”.

“We will discuss new trends and business models and of course have fun too. […] We wish to see our participants get complete information regarding bitcoin business through our conference, for instance, about the banking, taxations and other legal procedures in the CEE region.”

The speakers

Knafelc wants the participants “to see and hear which direction bitcoin [is] heading in the terms of business opportunities” and said that the conference is aimed at professionals as well as enthusiasts.

Steve Beauregard, CEO and founder of GoCoin, will give the keynote speech, and other speakers and panellists will include:

- Jesse Heaslip, CEO, Bex.io
- Josh Zerlan, operations manager, Butterfly Labs
- Christian Ander, CEO, Goobit.se
- Elizabeth T. Ploshay, member of Bitcoin Foundation and account manager, BitPay
- Radoslav Albrecht, founder, Bitbond.net
- Abdul Haseeb Awan, co-founder, BitAccess Canada
- Alexis Roussel, vice president, The Pirate Party
- Stanislav Wolf, VP product development, Yacuna AG
- Hans Henrik H. Heming, CEO, coinify.com
- Jean-Louis Schiltz, legal adviser, professor at University of Luxembourg, ex minister of the Luxembourg government
- Matija Mazi, software developer
- Deborah Thoden-Peden, partner, Pillsbury Law
- Matjaž Pajk, barrister, Dušan Korošec and Barristers Law Firm
- Luka Pušić, president, Bitcoin Association of Slovenia
- Jeremy Bonney, product manager, CoinDesk

The schedule

The first day will start with a keynote speech on the importance of bitcoin payments as a checkout method, and will then have sessions on:

• Bitcoin and financial inclusion and innovation
• The future of bitcoin mining
• The history of the bitcoin exchange space (featuring Mt Gox, Ripple and others)
• Network effects, exchanges and pump and dump schemes
• The opportunities offered by bitcoin two-way ATM machines
• The issues of bitcoin regulation
• Business with bitcoin in Slovenia (with an emphasis on tax and criminal law)

The second day will focus on investment opportunities in cryptocurrencies, virtual currency regulations and anti-money laundering practice, how to explain bitcoin to clients, and the future of bitcoin.

An ambitious project in a new location

The Bitcoin Central and Eastern European conference is the first of its kind in the area, and GreCom hopes that it will become “a yearly event with regional impact”, which will create a bitcoin hub in Slovenia.

The country benefits from a “good reputation within the technical and business communities of bitcoin”, and is close to many other European cities, including Vienna, Milan, Munich and Zagreb.

Gregor Knafelc added :

“[It] will be the first opportunity to host and mingle with really successful people from bitcoin eco-system in Slovenia.”

The conference will take place at the Best Western Premier Hotel in Ljubljana. Early bird registration has now ended, but one and two-day passes can be purchased on the website, for €250 and €300 respectively.

Source : http://www.coindesk.com

Barry Silbert invests $250k in Unocoin, India eyed as ideal Bitcoin market

By Leon Pick on August 12, 2014 in News

Barry Silbert, who recently resigned as SecondMarket’s CEO to focus exclusively on digital currency initiatives, has announced his investment of $250,000 in India’s Unocoin.

Excited to announce my first bitcoin investment in India, @unocoin http://t.co/bOkt1hoAFD via @WSJ @mikejcasey
— Barry Silbert (@barrysilbert) August 11, 2014

Unocoin can be likened to a Coinbase for India. It provides a high security wallet and Bitcoin buying/selling capabilities. The service was spawned by a July 2013 meetup to bring Bitcoin awareness to the India public, and officially launched in December. Almost immediately thereafter, it suspended services when the Reserve Bank of India warned about virtual currencies. It relaunched in January after an upbeat presentation by the Bitcoins Alliance India (BAI) and an assessment that with adequate business practices, it will not face a regulatory crackdown.

Silbert, an early investor in now dominant Bitcoin companies like Coinbase and BitPay, is hoping to replicate his success in India. The country of 1.2 billion is viewed as ripe for Bitcoin development. An estimated half-billion are unbanked. A large number of emigrants work abroad and send remittances back home. There is also an estimated 200 million tech savvy middle class citizens, and it is hoped that they will adopt and develop a greater cryptocurrency economy.

India also reportedly has an archaic currency-exchange infrastructure. Said Silbert:

“The catalyst that will drive bitcoin adoption in India is significantly more liquidity and trading in and out of rupees. No one is going to use bitcoin to send money to their family in India if there is no way to use it or no place to exchange it.”

While the investment is small relative to major multi-million dollar funding rounds, if growth proceeds according to expectations, the next round may be much, much larger.

Source : http://dcmagnates.com

Bills Ninja Allows you To Pay Your Bills In Bitcoin

Brad Edwards on August 11, 2014 - 1:04 PM in Bitcoin Life, News

Bills Ninja, a new service based in the Philippines, allows users to pay their bills in Bitcoin.

The service works in a similar way to other payment services like CoinGateway and Bongocoin in that the company essentially agrees to buy your Bitcoin for a given amount in fiat currency, which it then sends to your creditor for the amount you owe.
Services like these are a welcome addition to the market, since they open up Bitcoin markets where previously there were none. Filipinos can now pay their phone, cable, internet, credit card, insurance, or utility bills using Bitcoin, along with a small service fee per billing cycle.
The service comes from Satoshi Citadel, a Philippines-based ventures company devoted to helping support the Bitcoin ecosystem in the Philippines.

Source : http://thecoinfront.com