US Military Command Holds Informational Meeting With Bitcoin Industry
Officials
from the US Special Operations Command met with American business
executives and bitcoin community leaders on Monday in Tampa, Florida, to
discuss bitcoin and its role in illicit finance.
The topic is a priority for the US military as it seeks to understand
how bitcoin could be used in funding anti-American forces and
operations and whether it can take actions to reduce this activity.
However, the aptly named Virtual Currency Workshop was a broader
learning opportunity for special ops forces, meant to dispel any
misconceptions about bitcoin and digital currencies being catalysts for
terrorism and illicit activity.
Bitcoin Foundation global
policy counsel Jim Harper attended the meeting, and said his message to
the government was that “bitcoin runs on a transparent ledger system”
and that the industry is more than a “magic cloak for evil behavior”.
Harper told CoinDesk:
“The military has an interest in knowing everything it
can know about how the world works, and bitcoin is a big part of how the
world is going to work.”
“Demistifying bitcoin is always a good thing,” he added.
Ongoing discussions
The day was part of an ongoing series of talks planned by a group called Business Executives for National Security (BENS), a
nonprofit organization of American business leaders that lend their
experience and insight to threat reduction initiatives.
Notably, Amazon’s Jeff Bezos, former AIG CEO Hank Greenberg and David
Koch of Koch Industries are among its distinguished members.
Attendees representing the bitcoin community comprised “between one-third and a handful” of all present, Harper estimated.
Further, he suggested that the event was a success as an educational
event, as by the day’s end, the gathered attendees had begun to view
bitcoin more favorably.
At press time, BENS had confirmed the meeting, but had not responded to further inquiries.
Government cooperation
Harper told CoinDesk he was impressed by the cross section of
representatives present at the meeting and the solid discussion and
learning that took place. It was perhaps the first time that the three
widely disparate cultures have convened formally.
In statements to CNBC, Harper acknowledged the possibility of backlash from members of the bitcoin community following the news of the meeting.
Harper said:
“The bitcoin community doesn’t necessarily endorse US
foreign policy, and the bitcoin community doesn’t necessarily endorse
everything the US intelligence community does.”
However, he went on to say that the Bitcoin Foundation’s role should
be to familiarize law enforcement and the military with bitcoin.
ISIS concerns
The meeting comes at a time when there has been much discussion about
whether bitcoin and digital currency could be used to help radical and
extremist organisations gain access to financial services.
In July, Sky News reported that the Islamic State in Iraq and Syria (ISIS) had proposed using bitcoin
to fund global jihadist efforts, citing services like DarkWallet as
ways to make transactions and payments untraceable. However, this report
was later debunked.
Harper said none of the military representatives present at the event
offered specific intelligence that ISIS uses bitcoin and that the
amount of discourse focused on the terror group was negligible.
Source : http://www.coindesk.com
Pheeva Launches Branded Bitcoin Wallet for Georgia Tech University
Love Will, Inc, the team behind the Pheeva bitcoin wallet,
has launched a branded bitcoin wallet specifically for students at
Georgia Tech University.
Called ‘the Jacket Wallet’, the custom bitcoin wallet features Georgia Tech‘s signature navy blue and gold colors, and will require users to have a campus email address to enroll.
The wallet was officially unveiled at a kickoff event for the
school’s first dedicated bitcoin group, Bitcoin@Tech. Held on 24th
September, the Bitcoin 101 session featured representatives from Pheeva and Georgia-based payment processor BitPay, as well as about 50 university students.
Mallika Sen, the founder of Bitcoin@Tech and a former BitPay intern,
said that she expects interest to grow as more students begin to use the
wallet and take advantage of its gamification elements.
Sen told CoinDesk:
“There’s a wide variety of students and people who are interested in bitcoin. They’re very encouraging.”
Students who download the wallet will be able to, in turn, join the
COG Cooperative, a dedicated social network that will reward users based
on how they promote the network. The wallet will monetize through
advertisements, but pay students a share of this revenue based on these
participation points.
While unique, the project is likely to be the first of many to launch at universities across the US.
Love Will’s big merger
Love Will Inc and bitcoin outreach and charity group The Bitcoin Society announced
a merger in conjunction with the wallet launch. The combined
businesses, which will operate as Love Will, Inc, will aim to replicate
the custom wallet launch at universities across the US this fall.
The move brings The Bitcoin Society and Love Will’s operational
strengths under one roof, which will help the group continue pushing its
mass rollout model.
Love Will Inc business development consultant Jeff Handler told
CoinDesk that there is demand for digital currency launches of this
kind, noting:
“Georgia Tech is the first one. I can’t say right now the
specific colleges we’re working on, but we’re working to bring this
model to every campus that wants to accept bitcoin.”
The project could gain significant traction given that grassroots
support for digital currency at US colleges already exists. In addition
to the increasing number of student-led bitcoin organizations, several colleges have begun offering digital currency courses, while some have started accepting bitcoin as payment for select services.
Collective vision
The Love Will approach, according to Handler, incorporates a
grassroots strategy as demonstrated by the formal launch of the Jacket
Wallet this week at Georgia Tech.
Handler said he made the decision to merge his operations with those
of the team behind Pheeva after realizing that both companies “shared a
collective vision” as young entrepreneurs in the digital currency space.
Handler explained:
“Entering the bitcoin space as recent college graduates,
[The Bitcoin Society] strived to position ourselves as a community-based
information hub that could cater to the growing interest in bitcoin
amongst college students.”
The two companies began working together this summer, following initial discussions at The North American Bitcoin Conference in Chicago.
Path to college adoption
CoinDesk also spoke with Stephanie Wargo, vice president of marketing
for BitPay, who said that the company is working closely with Georgia
Tech on upcoming projects.
Wargo said that interest in the bitcoin at Georgia Tech, the former university of executive chairman Tony Gallippi and CEO Stephen Pair, is strong and that the community there has been actively assisting in the run-up to the wallet launch.
Wargo noted:
“The college has been extremely receptive. We’ve been
working with them for over a year now, as far as different programs
within the university. We’ve gone down to hold some talks, and we’ve
been very active and they’ve been extremely receptive of bitcoin.”
Wargo indicated that BitPay hopes to have further announcements regarding the university soon.
Source : http://www.coindesk.com
Coinify Raises Millions to Build Europe’s Complete Bitcoin Solution
Coinify has announced an undisclosed venture funding round, as well
as a string of strategic deals that aim to position it as the leading
bitcoin services company for the European market.
Based in Denmark, Coinify acquired a portfolio of services from
established market players in May, purchasing established domestic
bitcoin broker Bitcoin Nordic and the merchant services formerly offered by Bitcoin Internet Payment Systems (BIPS).
Speaking to CoinDesk, Coinify CEO Hans Henrik Heming framed the new
company as a natural pursuit for himself as an established entrepreneur
and bitcoin advocate. Heming previously founded social software
consultancy Wemind, social graph specialist Wosju and idea lab Fourmation.
Heming told CoinDesk:
“I read about bitcoin the first time in 2012 and have
been looking at the industry in more detail since 2013. [Coinify]
emerged from discussions, ‘How can we make an entity that could cover
more of what is necessary in terms of what the marketplace in Europe has
to offer?’”
Earlier this week, Coinify announced a “multimillion-dollar” investment from Denmark-based VC firm SEED Capital, which is notably supported by Denmark’s state investment fund, The Danish Growth Fund (Vækstfonden in Danish).
Neither Coinify or SEED Capital disclosed the full amount of the
funding to CoinDesk, though SEED Capital wrote in its official blog post
that the amount was “several million DKK“.
Following the announcement, Heming said Coinify will close down the
Bitcoin Nordic site, while BIPS will continue as a separate entity
specializing in bitcoin technology development.
Coinify’s services
To begin, Coinify will focus on extending its buy and sell services
to consumers and processing services to merchants. Coinify allows
businesses to accept bitcoin and receive next-day settlement in euros,
dollars and kroner, among other currencies.
Notably, Coinify also provides a plug-in for popular merchant-facing
e-commerce platforms that will allow merchants that already use
BigCommerce, Magento, Shopify and WooCommerce to easily integrate
bitcoin payments.
To enroll, consumers must first use an email address to create an
account. From there, traders can buy bitcoin with bank deposits or via
prepaid online and mobile phone payment method CASHU.
Merchants can also log into their accounts via Facebook, a feature not extended to those buying and selling on the platform.
Market focus
With the desired capital and services secured, Coinify now aims to
focus on growing its presence in its key target markets Denmark, Norway,
Sweden and the UK, though Heming said Coinify is keen to establish
itself across Europe.
In particular, Heming cited UK and Germany as significant markets due
to their position as leaders in the e-commerce space. Further, he said
Coinify aims to conduct market research in these areas as it looks to
become more active in its approach to the market.
Heming said:
“What we have done so far has been a reactive approach
and waiting for people to sign up. What we will do now with the funds
will be to be much more active at acquiring merchants.”
Evaluating the competition
Coinify will also face notable competition in the market from other
brokerage services, such as those offered by Safello and Coinbase, the
latter of which just recently entered 13 European markets after winning
scores of merchants and consumers in the state.
Heming chooses to view these companies more as collaborators than
competitors, suggesting that he believes there to be significant,
untapped potential in the European market.
He told CoinDesk:
“I would like to talk to the Safello and Coinbase guys
just for information. It could be interesting to discuss how we could go
into the markets we want to enter.”
However, this isn’t to say that Coinify doesn’t aim to differentiate
itself from these players, as Heming hinted that his company aims to
launch two additional services in the coming months.
Source : http://www.coindesk.com
All Things Alt: XC Inc, Next-Gen PoS and More Waiting for MintPal
Given
the relatively quiet altcoin market, it’s easy to miss the new
technologies and interesting applications that are gaining ground.
Yet, as September rolls to a close and October lies just around the
corner, it might be premature to assume that the altcoin world is
running out of steam as some have suggested. Today’s roundup includes a
chat with the developer of XCurrency, a look at I/O’s new proof-of-stake
concept and an altcoin that is out of this world.
I/O preps next-gen proof-of-stake framework
The proof-of-stake (PoS) concept has expanded in recent months,
including implementations such as reddcoin’s proof-of-stake velocity and
proof-of-stake 2.0, developed by the creator of blackcoin.
The development team for I/0
has proposed a new approach to minting blocks that it says will help
reduce potential dangers endemic to networks that utilize staking to
authorize transactions.
Developer Joel Bosh told CoinDesk that “we are proposing a huge
change away from the current PoS inflationary state”. He said that the
development process included input and code assessemnt from blackcoin’s
lead developer, and explained that the effort is aimed ultimately at
improving a promising but flawed process.
The I/O white paper proposes making network fees more flexible to reflect changes in both transaction volume.
The paper explains:
“When the volume becomes insufficient to ensure the
demands on the market, each coin and accordingly each transaction fee
becomes more expensive. Transaction rates and eventually coin
destruction rates decrease, and full volume increases.”
The proposal represents one of the latest efforts to build on
existing PoS models, as well as make the technology more resistant to
network threats. Past events, including the hard fork of the vericoin network, have raised concerns that proof-of-stake systems are too risky for broader adoption.
The new I/O proof-of-stake system is set to go live on 26th September beginning with the 100,000th network block.
XC developer: Coins need economies to work
The
developmental cycle of a digital currency, as demonstrated by both
bitcoin and more mature altcoins, sometimes leads to the creation of
corporate structures that exist to both promote and grow the project
further through product distribution or marketing.
Privacy-oriented altcoin XCurrency,
or XC, has recenly begun moving to build a business around its existing
development framework. CoinDesk spoke with lead developer and CEO Dan
Metcalf, who said that like other existing chains, XC represents a
platform on which to build new applications in a decentralized and
private environment. However, without the backing of a formalized
institution, he said, it makes it more difficult to realize the full
potential of a project like XC.
“These applications need a business behind them to be able to sell
these services and be the trusted third party or broker,” he said.
Metcalf said that the process of creating what he called XC, Inc. has
only just begun, and that the idea is still in the conceptual phase.
One idea being developed is an initial token offering, or ITO, with each
token signifying partial ownership in XC, Inc.
This decentralized corporation concept has been explored in the past
by other groups, though as Metcalf explained, the initiative seeks to
reward existing XC stakeholders.
Metcalf told CoinDesk that ultimately, the focus is to build an
environment for the currency in which it can be used for real purposes,
noting:
“I think one of the reasons that bitcoin worked was
because of Silk Road. It was an economy that kept the system fluid until
it reached critical mass. In order for XC to be that consumer coin, it
needs an economy or the ability to be used over the existing networks –
in an user friendly manner.”
MintPal overhaul faces more delays
The much-anticipated launch of Mintpal V2 has experienced another delay.
Owner and operator Moolah LTD, which acquired the altcoin exchange in July after a hack attack,
apologized to its customers on Twitter today after previously
indicating that final preparations were being made for the platform.
Prior to the hacking, MintPal was one of the more popular and more
established altcoin exchanges. Further, the delays come at a time when
rival Cryptsy has integrated new services that aim to help it bolster its risk mitigation and compliance.
Supporters and critics of MintPal took to social media to respond to
the company’s message, with some poking fun at what they called a long
redesign process that began after Moolah bought the troubled exchange.
Earlier this week, Moolah wrote on its official blog that the process involved heavy data migration volume, and that many steps needed to be taken before a launch became feasible.
In that post, the exchange owner said that a previously announced
two-week period of no-fee trading would be extended by an additional
week.
Strange alt of the week
Tribute coins aren’t as in vogue as they once might have been, but every once in a while a new project emerges that takes a light-hearted approach to honoring someone or something.
Borgcoin, which launched at the end of April, is an homage to the
eponymous cybernetic race that serves as one of the primary antagonists
in the Star Trek universe. According to the developers, the coin is
intended to be “the ultimate Star Trek collectible cryptocoin”.
The official Bitcoin Talk post shares a bit of the “inspiration” for the coin, explaining:
“The Borg Queen has noticed the propagation of altcoins
in the Alpha Quadrant which will soon reach and influence the Delta
Quadrant. The Borg Queen has decided to create her own hive Borg coin.
This coin would be scrypt based and would then be used by all borg
assimilated planets in the sector and all throughout the Delta
Quadrant.”
For its unique approach to a fan currency, borgcoin has won this week’s Strange Alt of the Week award.
The altcoin has a 500m max supply limit, which the developers note is
“based on the mass ton of the Borg trans warp ship with a maximum rated
speed of 29.968 war factor with advanced warp drive”.
Looking ahead, the developers hope to use the altcoin as a payment
product for Star Trek-related products and services, stating that
real-world “assimilation” of borgcoin at local merchants are soon to
come.
Source : http://www.coindesk.com
Swedish Politician Elected to Parliament on Bitcoin-Only Donations
Digital
currency advocate Mathias Sundin has become a member of Sweden’s
parliament after funding his election campaign solely in bitcoin.
Now, and for the next four years, Sundin will represent the
constituents of Östergötland in the parliament, which has 349 members
from across the country.
Outlining his political agenda on his blog, Sundin made
it clear that he would oppose “knee-jerk regulation” of bitcoin and
disruptive technologies in general. Taking the advice ‘put your money
where your mouth is’, the politician also made a point of accepting
campaign donations solely in bitcoin.
On more wide reaching topics, Sundin promised to back educational
reform, defend privacy rights and work toward developing a tax system
that promotes innovative, fast-growing companies.
Economies have to keep up with technological advances including bitcoin, he argued, telling CoinDesk:
“An entrepreneur who develops software could potentially
reach all these billions of people, and with a simple money transferring
system, like bitcoin, he or she will be able to charge for it easier.”
New view forming
Sundin told CoinDesk that he will keep promoting bitcoin in the
future, although he is unsure how much backing he will get from fellow
MPs.
Sundin said:
“It’s hard to say how much support I will get – all the
negative headlines about bitcoin have sent the wrong signal about
digital currencies, but I also think a new view is forming when you see Dell, maybe eBay, Klarna and others start accepting bitcoin.”
While his focus on bitcoin issues helped get him noticed, Sundin said
he doubts that it was his bitcoin advocacy that won him the seat.
Rather, it was likely to be linked to his more general policies, he
said.
Although his local campaign didn’t cost much to set up, the bitcoin
donations Sundin received came from all over the world, “Which I find
very positive,” he said.
Sweden’s position on bitcoin
Sundin still believes that more work is necessary to explain the
potential of bitcoin. In particular, to persuade banks and other
financial organisations that working with bitcoin companies is
ultimately a positive thing.
He said:
“We have to keep making the Swedish business climate
better. We have to lower taxes for entrepreneurs and decrease
regulations. There is a stronger and stronger startup scene in Sweden
and Stockholm – one of the hottest in the world.”
Sweden has already managed to attract a number of prominent cryptocurrency businesses, ranging from exchanges to mining companies.
The country’s regulatory framework is relatively liberal and many suggest it will regulate bitcoin as an asset, in line with most of the EU.
However, for all its popularity in Sweden, bitcoin has not had much of an impact on the local economy.
In a recently published research paper,
the Swedish Central Bank found that bitcoin trading volumes in the
country were relatively low and concluded that bitcoin did not have “any
measurable impact” on the country’s retail payment market or financial
stability.
Source : http://www.coindesk.com
How and Why to Build an Unbanked Bitcoin ATM
Unfortunately, despite complying with all the legal
requirements we have been unable to secure banking facilities. Without
these the Bitcoin ATM business cannot operate long term. The negativity
from the banking sector to Bitcoin also threatens the ATM owner’s other
businesses. For me it is prudent to shut the ATM down. If you have any
interest in purchasing a second-hand bitcoin ATM with compliance
documents. Please get in touch.
This follows a trend where eager startups set out to “do things right” and follow all the rules, only to discover invisible soft censorship
for which there is no appeal. Even though there is apparently no legal
basis for preventing Bitcoin Central from operating, the banks (who have
a government-granted monopoly) are free to act extra-legally to achieve
the same effect.
This is a vulnerability to which all Bitcoin ATMs throughout the
world are exposed. Cash handling is a high risk, relatively expensive
activity without which a transitional ATM can not operate. If it were
possible to design a Bitcoin ATM that did not require cash handling on
the part of the operator, it would benefit the operators in two ways:
they would no longer be forced to operation only at the whim of banks
and cash handling companies, and it would save the cost of handling the
cash.
Additionally, the methods which are needed to enable unbanked
operation of a Bitcoin ATM would have profoundly beneficial effects on
the entire Bitcoin ecosystem.
Physical requirements
In order for a Bitcoin ATM to operate in unbanked mode, it must be a
bidirectional ATM – it must both accept and dispense cash. Ideally the
ATM would include a bill recycler instead of a separate bill dispenser
and bill acceptor. This is a device that can accept customer-provided
cash, keep track of the individual bills, and dispense them later on
command. An ATM equipped with bill recycler can accept cash for the
purchase of bitcoins, and also dispense cash for those who decide to
sell bitcoins.
Currently it is difficult to find high capacity recycling units
capable of handling a sufficient number of denominations for a unbanked
Bitcoin ATM, however several product lines in this space show promise.
Strictly speaking, a recycler is not essential. The ATM could remain
unbanked by having a separate cash dispenser and cash acceptor, and this
would mean that it would require manual servicing to move the cash from
one receptacle to the other. An unbanked ATM operating in this mode
would not benefit from as much labour cost savings as a 100% recycling
ATM.
Operational requirements
Traditional Bitcoin ATMs operate as vending machines, which may
optionally also buy the bitcoins back. ATM operators generally report
that far more of their customers buy bitcoins than sell them. How, then,
would an unbanked ATM avoid filling up with cash and running out of
bitcoins?
An unbanked Bitcoin ATM (UBA) might look like a traditional ATM, but
it is an entirely different beast. The UBA must operate as an
independent price discovery machine which adjusts its prices until the
customers wanting to buy are exactly matched by the customers who want
to sell.
Imagine a UBA is rolled out with an initial load of bitcoins and
dollars to sell. The cash recycler has a capacity of $30000, and it
launched at half capacity ($15000) and is designed to maintain this
level.
The first customer buys $750 worth of BTC. Now the machine has $15750.
The second customer sells $500 worth of BTC. Now the machine has $15250.
The third customer buys $1250 worth of BTC. Now the machine has $16500
BTC buyers are outpacing the sellers and the UBA is filling up with cash. What can it do to attract more sellers?
At this point the UBA should raise the price of bitcoins. Since it is
currently holding 10% more cash than intended, perhaps it should raise
prices by 10% in an attempt to attract more sellers. If the sellers do
not show up immediately, it can continue to increase the price
periodically, perhaps every hour during business hours, until the
sellers show up.
Once the sellers bring the cash inventory down to the target level,
the UBA can stop raising the price. If the inventory begins to drop
below the target level, it should reverse the process and begin lowering
the price to attract more buyers and dissuade sellers. How does such an
ATM generate a profit for its operator? They can charge a BTC
commission, perhaps a few percent, on every trade and withdraw their
profits electronically.
Anyone who is familiar with control simple theory should recognize the pricing mechanism as a simple feedback controller; a PID
loop. A real example should be a bit more sophisticated, with care
taken to identify the best time interval for adjustments and optimal
values for P and I. In addition, a real UBA must manage two separate
prices (buy and sell) and two inventory levels (bitcoin and cash), and
should account for the fact that with cash there is a strict upper limit
on how much can be stored, but this limit does not apply for bitcoin. A
deployed algorithm should make sure the spread between the buy price
and sell price does not invert under any conditions. Nevertheless,
designing the pricing system is a relatively straightforward exercise in
control system engineering.
UBAs and Local Trading
As the example above demonstrates, the behaviour of a UBA is
radically different from the behaviour of a tranditional ATM. The
operator of an ATM is not acting as a retailer supplier of bitcoins, or
of cash. All the funds dispensed by the UBA are funds provided by the
customers themselves. Other than the initial seed loading, the UBA has
no access either to bitcoins or to cash other than what customers decide
to deposit. Rather than acting as a vending machine, the UBA is a
liquidity pool that facilitates the in-person trading activity of the
people in it’s area of operation.
The UBA can only function in parts of the world where there is an
existing in-person trading market. Fortunately this is most of the
inhabited world. One of the limitations of in-person trading is that
both the buyer and the seller must physically meet at the same place and
time. The UBA effectively relaxes this requirement. Now traders do not
need to meet at the same time, merely the same place. The only real
function of the UBA is to act as a liquidity pool which enables the two
halves of the trade to be temporally separated.
Each interaction a customer has with a UBA represents half of a
trade. The job of the UBA is to discover and track the price at which
both halves of the trade occur with equal frequency.
Price Discovery and Arbitrage
Imagine a city where several UBAs were deployed. At any given time,
each ATM is likely to offer a different price for buying and selling
bitcoin based on the recent supply and demand at its location. These
differences in prices will attract customers who perform arbitrage
between the machines. Buy bitcoins at a machine where the price is
atypically low, and sell them at a machine where the price is atypically
high.
If all the machines reported their live pricing to a suitable website,
traders in that city might actually plan their daily route to pass by
profitable arbitrage opportunities. A situation which might at first
glance appear to lead to wildly divergent pricing will instead quickly
converge to relative consistency. Merely by broadcasting the appropriate
price signals, the network of UBAs will automatically crowdsource the
work of moving funds to and from the machines in order to keep prices
similar.
This arbitrage will occur even between the UBA system and other
venues for buying and selling bitcoins. Price discovery on traditional
exchanges is not as reliable as perhaps most people assume, and
certainly far less reliable than the price discovery a UBA system can
generate. Exchanges can obscure price discovery by holding fractional
reserves of one or more currencies, while an ATM must deliver what it
has sold in full with each transaction. (Note that at least one Bitcoin
ATM company is actively trying to convince users to accept fractional reserve IOUs instead of actual bitcoins.)
If exchange prices were manipulated low, perhaps by holding a
fractional bitcoin reserve, then the true price as discovered by the
ATMs would rise above the exchange price and create a profitable
arbitrage opportunity. Exchange users would buy cheap bitcoins on the
exchanges, withdraw them, and sell them to the ATMs. If an exchange did
not have enough actual bitcoins to meet its liabilities, this situation
would be discovered far more quickly than if the UBA network was not
operating.
The network of UBAs could co-exist peacefully with traditional
Bitcoin ATMs without any problems. The traditional ATMs would simply
become another potential source of arbitrage opportunity that traders
could tap when and if the price was right.
Remittances
Unbanked Bitcoin ATMs solve one of the hardest problems involved with
setting up remittance flows using Bitcoin – by not requiring anyone in
particular to solve the problem. This counterintuitive proposition is
one of the primary ways in which the general public misunderstands
market economics.
Imagine that a network of UBA were set up in a country that is a net
recipient of remittances. Price discovery by the UBAs would converge to
the local exchange rate at which BTC purchases by investors in the
recipient country) matched BTC sales by recipients of remittances. This
exchange rate might be lower or higher than the implied exchange rate
might suggest. Is this a problem for the UBAs or the people using them?
Not really. If the exchange rate is lower than expected, the
remittance senders might still use Bitcoin for remittances by simply
sending more than they would otherwise. This might still be a win for
them considering how expensive other methods of remittance can be. The
low exchange rate, however would broadcast a price signal through the
market that cash was undersupplied in that region. Investors and
entrepreneurs would have an incentive to find ways to increase the
supply the cash to that area in order to profit from the inexpensive
bitcoins available there.
The same thing would happen if the exchange rate was higher than
expected. The price signal would communicate the fact that bitcoins were
undersupplied to that location, and market participants would respond
by finding more ways to attract bitcoins to the region. This could mean
asking their relatives abroad for Bitcoin remittances instead of Western
Union, starting online businesses that accept Bitcoin, or any number of
other strategies which the ATM operators might never imagine or
anticipate.
No explicit coordination between market participants is required for
this to happen – the information and incentives communicated by the
price signal are all that’s required to create a self-regulating
efficient market.
Operating a Bitcoin ATM in an unbanked mode completely frees the
operator from needing to worry about money flows, either fiat or BTC.
The ATMs only need to do one job: relentlessly act as autonomous price
measuring machines. If they accurately measure the price of Bitcoin at
the time and place where they are installed, and if they efficiently
broadcast this information into the market, then from their perspective
the problem of how to allocate and transport the bitcoins and cash they
need will solve itself.'
A network of unbanked Bitcoin ATMs would provide one of the most textbook-perfect demonstrations of market economics available.
Objections
The idea of operating ATMs that handle cash which the operators never
need to handle themselves can be counterintuitive until it is fully
digested. Here are some of the stumbling blocks which can arise and
their associated solutions:
“Customers would be confused by dynamic pricing”
Customers of other products in the economy routinely encounter
location-based price differences: gasoline, groceries, or restaurants
being three common examples. For the case of gasoline, they are also
accustomed to relatively high temporal volatility, so seeing the price
of Bitcoin change based on time and location should not be so far
outside their prior experiences.
“Nobody is willing to buy Bitcoins above the market rate”
Anyone who suggests this has not seen the markup that traditional
Bitcoin ATMs charge, nor could have they participated in the existing in-person exchange market.
Bitcoin buyers, like the buyers of any other product, are not a
homogeneous group. Some are willing to pay a certain premium for
convenience, and others are willing to spend their time in search of a
better deal.
This objection also relies on the fallacy of a universal market rate, which is discussed below.
“ATM operators would lose money by selling below the market rate”
The first problem with this objection is that the UBA described here
does not care about the exchange rate in terms of generating profits.
Like an exchange, it’s profits are derived from transaction volume, not
the price at which trades occur.
The second problem with this objection is there is no such thing as a
universal, global market rate. The price of a thing is exactly the
amount a willing buyer can obtain from a willing seller at the time of
sale. Why does a buyer on BTC-e accept a price for a bitcoin that is
different from the price that sellers are offering on Bitstamp? Because
the BTC-e user’s fiat is not on Bitstamp, and neither are those other
sellers’ bitcoins on BTC-e.
One common mistake in the area of market pricing is to confuse the
emergent behaviour of markets with some inviolate rule of nature. In an
efficient market, traders will seek arbitrage opportunities for profit,
and their actions will cause prices in different venues to converge. The
more efficient the market, the less divergence will appear. This
creates the illusion of a single, global price, however it is just an
emergent property. For the purposes of any given trade, the only price
that matters is the price that a willing buyer and seller can agree on
at that moment.
The price of a bitcoin on some distant exchange means nothing
to an unbanked ATM. The UBA measures supply and demand in the pool of
customers to which it can access, and discovers the appropriate price
for its specific situation. If you need to sell bitcoins right now in
Cairo, it doesn’t matter what somebody in Tokyo is willing to pay for
them – for you the market price is whatever somebody in Cairo is willing to pay for them.
That being said, the best way to create the emergent property of a
single exchange rate is to avoid the central planner’s fallacy. Identify
the market mechanisms which work to create the emergent behaviour, use
them, and the problem solves itself.
The Importance of Independent Price Discovery
One of the most important effects of building a network of autonomous
price measuring machines is that such a network would provide a
badly-needed second opinion regarding the exchange rate of a Bitcoin.
There are many ways in which exchanges can misbehave to tamper with
price discovery, and some of the VCs in the Bitcoin space are openly
plotting to rig exchange rates. The only antidote to such skulduggery is
to stop depending on exchanges to discover the price of a Bitcoin.
Unbanked ATMs can not lie about supply and demand for very long
before they run out of either cash or bitcoins. Therefore their price
discovery process is more accurate than that of an exchange which might
be running a fractional reserve. Most importantly, each individual ATM
calculates price independently of every other ATM. The consensus that
arises from the market they create is not like having a second opinion
on price compared to the exchanges – it’s like having millions of second
opinions.
The future of Bitcoin ATMs should be unbanked. Freeing them from the
constraints of operator-managed cash handling would save costs for the
operators, improve fiat-bitcoin liquidity, and protect the entire
Bitcoin ecosystem by providing a needed countermeasure against bad
behaviour by centralized exchanges. Ask your favourite Bitcoin ATM
vendor to get started on this project today.
Source : http://bitcoinism.liberty.me
The Case for Bitcoin in Bangladesh
International remittances are a major contributor to the Bangladeshi
economy. As of June 2013, the World Bank reported Bangladesh to be one
of the largest recipients of reported remittances at almost $14.5
billion. In a country like Bangladesh, where “one half of remittance
receiving households are female headed with a very low level of
education” but 96.4% of them own a mobile phone, the seemingly
fractional savings by remitting in Bitcoin is the big enough difference
of being a game changer for some families.
This week, the Bangladesh Central Bank issued a standard cautionary statement
that spooked the Bitcoin community, particularly in Bangladesh, and
those with loved ones in the country. Now, we all know how this goes —
one Bitcoin story with a misleading headline is released and its message
ripples across the news wire. As a result, Bitcoin’s promising social
and economic benefits for the people of Bangladesh have been put on
pause for the time being.
Since the release of the statement, our global team has been working
in tandem with our local team to obtain more information and, to date,
have determined that the statement is a standard issue of caution and
not an outright ban. Meaning, the Bangladesh Central Bank is alerting
consumers of the risks involved with using Bitcoin and reminding them
that Bitcoin is not government issued or sanctioned.
At the same time, the statement also makes clear that, when in the use of cryptocurrencies, should you violate any terms of the Foreign Currency Control Act, 1947 or the Money Laundering Control Act, 2012,
you will be subject to punishments as prescribed. However, what has
been left unclear is if there are any other official statements or
conditions under which transacting or even educating others on Bitcoin
could be considered a punishable offense.
The foundation has always been a proponent of advising against
putting your life savings in Bitcoin — at only 5.5 years old, Bitcoin is
still a young technology and an experiment. We have also been
proponents of fostering this neutral technology as a force for good. In
the two years we have been engaged in educating and advising
policymakers and regulators, we have found that sensible governments
seek to maximize Bitcoin’s potential for social and economic benefits
while mitigating its risks.
The sensible approach for Bangladesh is to understand and examine
Bitcoin and its promise for improving lives of its citizens, creating
jobs and economic opportunity. In an increasingly globalized economy,
adopting Bitcoin will open doors that only technological advances can
bring. Should Bangladesh choose, after careful study of the technology
and its transformative potential, to close its doors, then Bitcoin will
continue to thrive in countries open to innovation.
Until more information is obtained on the current situation, Bitcoin
Foundation Bangladesh has temporarily suspended educational and
membership efforts. In the meantime, visitors can go to bitcoinfoundation.org or follow @BTCFoundation for the latest development on this topic.
All membership dues from international affiliates are received
directly by the Bitcoin Foundation, Inc. which is incorporated in the
U.S.
Source : https://bitcoinfoundation.org
Bitcoin is plunging again
We’re in the midst of another sharp sell-off for everyone’s
favorite crypto-currency, with the price of bitcoin falling by more than
9%—to less than $400 at moments—this morning, according to the bitcoin
data site BlockChain.
Why? Who knows. Technical analysts have tried to paste some sort of
paper-thin rationale on it. (Personally I can’t help but wonder if some
of the people willing to make highly speculative gambles are looking to
move their money into Alibaba today, in the hope that it may be the next
big momentum-driven money-maker.)
Unless it’s the Argentinian peso, this is no way for a respectable
currency to behave. And that’s exactly the point: Bitcoin is not a
respectable currency. At the moment, it’s merely a plaything for
tech-savvy gamblers with far too much money on their hands.
Still, over the long-term, the technological underpinnings of bitcoin as a payment system seem to have promise.
Source : http://qz.com
Netagio: Account Funding With Credit/Debit Cards Coming Soon
Story Highlights
Netagio says account funding with credit/debit cards coming soon
A number of different cards will be accepted
UK-based bitcoin, gold, and sterling exchange Netagio made news this week with the announcement they had met ISAE 3000 standards when
it comes to their bitcoin holdings, and now, some positive news for
their clients who are looking for another means of funding their
accounts.
The exchange said they’ve partnered up with WalPay — a payments
services provider based on the Isle of Man (which is quickly becoming a
great place for bitcoin startups), which effectively means Netagio has
secured new banking facilities that will allow clients to make deposits
and receive international payments in GBP, EUR, and USD.
WalPay’s services at Netagio went live on the 25th of September, and
the news comes hot on the heels of a recent story that indicated CTS would sever ties with companies working in the digital currency sector on the Isle of Man due to bank pressure.
But also of interest is news that the WalPay integration will also
allow clients at Netagio to find their accounts using credit/debit
cards. Specifically, cards accepted include: VISA, VISA Electron, VISA
Debit, MasterCard, MasterCard Debit, or Maestro.
“Our customers have always been, and will always continue to be, our
number one priority,” says Simon Hamblin, Netagio CEO. “The very day we
were informed of CTS’s decision, we began assessing both our dormant and
new banking relationship partners, undertaking the necessary rigorous
due diligence required. We were keen to secure a partner that could not
simply address our immediate need for a new banking relationship, but
also could partner with us to further enhance our service for customers
in the future. WalPay have certainly stepped up to the mark and we have
been very impressed by their service and commitment.”
Justin Martin, head of Business Development and Sales at WalPay adds,
“The appetite for Bitcoin is not waning and we are thrilled to be
working with Netagio to secure new robust banking facilities for their
customers today, and also to work on introducing credit and debit card
payment functionality in the very near future. Our tight trading rules,
card security measures and PCI compliant gateway have been specifically
adapted to work harmoniously with Netagios’ state-of-the-art secure
exchange and crypto vault solutions to maximise consumer confidence in
Netagio. We were impressed by Simon and his team’s rigorous approach to
operational controls and compliance, particularly in the important area
of anti-money laundering (AML) and Know Your Customer (KYC)
requirements. We can see that Netagio are entirely committed to ensuring
that their customers’ interests are best protected and that Netagio
will continue to play a vital and stabilising role as the industry
continues to mature.”
Source : http://newsbtc.com
CFTC to Discuss Bitcoin Among Other Things At Meeting Next Month
In a news release published today,
the United States Commodity Futures Trading Commission (CFTC) announced
plans to hold a meeting at its headquarters in Washington, D.C. next
month to discuss Non-Deliverable Forwards (NDFs) and bitcoin.
Maybe you’re asking yourself, what in the world is a NDF? I, too, had the question. Here’s what came up, according to the NASDAQ glossary:
Agreement regarding a position in a
specified currency, a specified exchange rate, and a specified future
settlement date, that does not result in delivery of currencies. Rather
one party in the agreement makes a payment to the other party on the
basis of the exchange rate at the future date.
And, of course, we all know what bitcoin is so no need to get into
that. But it’s interesting that the digital currency — which is
seemingly taking the financial world by storm — is a topic of
discussion. The CFTC says the meeting will be made up of two panels. Panel one
will discuss whether or not a clearing mandate is appropriate for NDFs
(“with a particular focus on how such a mandate would impact foreign
exchange contracts,” they say), and the second panel will be discussing
the CFTC’s jurisdiction when it comes to derivatives contracts that
reference bitcoin.
The meeting will be taking place from 1:30 p.m. to 5 p.m. on October
9th at 1155 21st Street, NW, Washington, DC 20581. The meeting is open
to members of the public on a first-come, first-served basis.
While the CFTC isn’t the first government agency to explore the topic
of bitcoin and digital currencies, its interest in the topic no doubt
stems from bitcoin’s increasing popularity. What will come of the
meeting? Well, we’ll just have to wait and see.
Source : http://newsbtc.com
Friday 26 September 2014
PayPal: Bitcoin Partnerships Will Help Us Study Consumer Behavior
Though
long rumored, the news that PayPal had formally aligned its business
with bitcoin dominated headlines this week due to the company’s size,
brand recognition and influence as an early pioneer and dominant player
in online payments.
For PayPal, the move comes at a time of increased competition in the web and mobile payments space, with tech giant Apple most recently entering the sector with Apple Pay.
As such, there has been much speculation as to how bitcoin could play
an increasing role in helping PayPal continue its market dominance
while helping ease the still prevalent friction in online payments.
Speaking to CoinDesk, PayPal senior director of corporate strategy Scott Ellison
elaborated further on the nature of his company’s latest move, but
cautioned that, as of now, PayPal plans to tread lightly in the bitcoin
space.
Ellison told CoinDesk that PayPal’s initial role in its partnership
with major bitcoin processors will be to function as an observer,
explaining:
“[We’re looking] to gain insight into the types of
consumers using bitcoin and will work with businesses to understand what
types of content they are selling more of.”
To start, PayPal will analyze bitcoin buyer behaviour soley on its PayPal Payments Hub,
an all-in-one online e-commerce platform that allows businesses to
integrate multiple payment options – including bitcoin, credit cards and
mobile carrier billing – with ease.
Merchants who use the platform will now be able to implement the
existing bitcoin and altcoin processing services provided by BitPay,
Coinbase and GoCoin, companies that Ellison called “the three leading
bitcoin payment processors”.
Starting small
While PayPal did not integrate bitcoin into its digital wallet or
proprietary payment processing services, Ellison framed this as
consistent with PayPal’s approach to helping instill new behaviours in
its online userbase.
When trying out new technologies, Ellison said, it’s common for
consumers to start small as they look to test the waters with new buying
methods.
Ellison told CoinDesk:
“Smaller, digital purchases are what consumers might like
to try with this new payment method just as they did with then-new
mobile operator billing for digital goods like games and ringtones on
mobile devices.”
Ellison also suggested that the
platform’s digital goods merchants may have the most compelling reasons
to adopt bitcoin today, citing the digital currency’s potential to
increase sales and reduce costs for this business segment.
Integration timeline
Ellison further confirmed the statements of BitPay, Coinbase and
GoCoin, saying that PayPal has been working on integrating bitcoin into
the PayPal Payments Hub for four months.
Though others like Overstock have implemented bitcoin processing
services in as little as one week’s time, Ellison said that a longer
timeline is consistent for this type of company procedure.
“This is a typical, normal integration timeframe, as we had to ensure
we had customer service and partner support ready,” Ellison said.
However, he said PayPal has been interested in developments in the
bitcoin space since 2012, due to the digital currency’s potential to
reduce friction and cost in the payments space for both businesses and
consumers.
Observing developments
Ellison framed PayPal’s overall move as consistent with its standard
policies of embracing innovation but doing so in ways that ensure the
services on its platform are safe and reliable.
He said:
“We’re proceeding gradually, supporting bitcoin in some
ways today and holding off on other ways until we see how things
develop.”
Going forward, Ellison indicated that PayPal is hoping to inform more
of its merchants about their ability to now accept bitcoin, reaching
out through the media and normal communications channels.
Source : http://www.coindesk.com
Huobi Sends $400k to Wrong User Accounts
One
of China’s top exchanges, Huobi, revealed that it temporarily lost 920
BTC and 8,100 LTC – worth about $411,000 – yesterday, but added that it
had recovered the majority of the assets.
Huobi posted on its official Weibo account that a customer service representative had erroneously deposited the coins to 27 user accounts.
The exchange said that its security department was alerted at 3am
this morning and its withdrawal systems were temporarily suspended.
An investigation was launched, and 880 BTC and 5,400 LTC were
returned to the exchange by customers who received the funds in error,
the update stated.
“We apologise for the disturbance that we caused,” the exchange
added, according to a translation by Eric Mu, who wrote about the
incident on his Forbes Asia blog.
Huobi did not elaborate on how it would recover the remaining funds. It said in a subsequent Weibo update that it would add a step to its withdrawal process requiring approval from its financial department.
Prices on Huobi
appeared to be unaffected by the news of the administrative error. At
the time of writing the last quoted price was ¥2,521 on Huobi, ¥2,522 on
OKCoin and ¥2,520 on BTC China.
Weibo chatter among bitcoiners in China was skeptical of Huobi’s claims. One user likened Huobi to Mt Gox, the one-time leading exchange that imploded earlier this year, saying: “Mt Gox is beckoning to Huobi!”
Another user urged calm in the face of the exchange’s error, saying that since the issue had been resolved, users should not panic:
“Everyone, don’t panic. [Huobi] will post official updates. Keep going, Huobi!”
Mu, who has also worked briefly at Huobi competitor OKCoin but is no longer employed there, said that the general attitude towards the Huobi announcement was one of scepticism.
“There is a fair bit of scepticism on Chinese social media,
especially because Huobi has recently launched several new services,” he
said, referring to Huobi’s US dollar trading and a fixed-rate financial instrument services launched earlier this month.
CoinDesk reached out to representatives from Huobi, but the exchange declined to comment on this issue.
Source : http://www.coindesk.com
‘Bash Bug’ a Concern, But Little Threat to Bitcoin Services
There
were widespread security concerns yesterday after the discovery of an
old flaw that could affect web servers and Internet-connected devices –
but many in the industry are claiming it presents no immediate threat to
bitcoin services.
The vulnerability, dubbed either the ‘Bash Bug’ or the ‘Shellshock
Bug’, would allow a malicious access to a UNIX-based device’s operating
system via the command line shell – the most widely used of which is bash.
UNIX-based systems include MacOS, Linux versions (desktop and
server), popular mobile platforms and embedded systems on other devices
that communicate online.
CNET reported that security expert Robert Graham, described it as “as big a deal as Heartbleed” – the OpenSSL flaw discovered in April – given the “enormous percentage of software that interacts with the shell”.
‘Over-hyped’
Jeff Garzik, bitcoin core developer and now senior software engineer at BitPay, however, said there is no clear and present danger to bitcoin users.
“Prediction: bash bug NOT bigger threat than heartbleed,” he posted on a Reddit thread.
Garzik told CoinDesk that, while the newly-discovered bug had the
potential to be bad, “most online services using bitcoin are far more
secure than your average home router”.
He added that the Bash Bug would impact mostly non-bitcoin sites, and was being over-hyped.
“It requires special set of conditions to be exploitable,
and home routers and ancient Apache web servers were already Swiss
cheese security anyway. I think the practical impact will be much less
than the mainstream media is making it out to be.”
Bitcoin a target?
At this stage, there are no reports of any exploit of the Bash Bug affecting any bitcoin-related services. So why care at all?
Bitcoin services may potentially be a more attractive target for
hackers and thieves than more established, fiat-based services like
online banking and PayPal.
There are two historic reasons for this: poor security implementation
at some early-stage online bitcoin services, and the reluctance of
authorities to investigate or punish digital currency crimes, unless
they suspect drugs or money laundering are involved.
Therefore it is best to at least be aware of potential problems developers and services may face.
One exchange’s view
Yan Chuan or ‘YC’, CTO of exchange BitBays.com,
said the bug was “relatively easy for hackers to use”, and recommended
all users patch, back up logs, and check systems to see if any attack
had occurred.
Because the bug allowed malicious hackers full access to an operating
system there was potential for any kind of attack, from stealing
bitcoin wallets to installing keyloggers and backdoors.
YC said bitcoin itself would not be affected due to its decentralized structure.
“However, as a centralized provider of exchange or wallet
services it is possible to be affected by the bash bug. Due to the
presence of this vulnerability, open SSH, HTTP, FTP and other
application servers are all at risk of being remotely accessed and
controlled by a hacker.”
Since Windows is not UNIX-based, its desktop users would not be
affected themselves. BitBays’ platform is prepared, YC continued, but
concerned users of other platform might like to ask their exchange or
wallet service about the situation if unsure.
Cracked shell
The Bash Bug vulnerability stems from a serious security flaw that exists in the bash (Bourne Again SHell) command ‘env‘. It affects the local shell, as well as SSH, FTP, HTTP, and other important services.
YC explained how the bug could be exploited, saying that many web
servers send the user’s HTTP request information (REMOTE_HOST),
REQUEST_METHOD, QUERY-STRING, etc) stored in an environment variable, to
the backend Web framework or CGI scripts.
If this information includes malicious instructions, the next time
the server executes bash it will execute the malicious instructions.
Thus, the server is compromised.
At present, the popular Apache + PHP and Nginx + wsgi frameworks are vulnerable.
No quick fix
According to Red Hat, which issued its own security advisory, many
programs access the bash shell in the background. Several Linux
distributions have already made patches available, including Red Hat
Enterprise Linux, Debian, Ubuntu and CentOS.
The bug, which has actually existed for more than 25 years before the
release of today’s news, could affect millions of devices and leave
much older ones in need of patching. It is the sheer number of devices
in need of patching, rather than the flaw’s complexity or known
exploits, that has some experts concerned.
Source : http://www.coindesk.com
US Commodities Regulator to Hold Public Bitcoin Hearing
The
US Commodity Futures Trading Commission (CFTC) has announced that it
will hold a public meeting to discuss bitcoin and digital currencies on
9th October in Washington, DC.
Created in 1975, the US CFTC is an independent federal agency that
regulates the country’s futures and options markets. The meeting will be
presided by the CFTC’s Global Market Advisory Committee, a group that advises the organisation on issues related to market integrity and competitiveness.
The CFTC indicated that the meeting will consist of two panels, one
of which will focus on examining bitcoin and questions surrounding the
CFTC’s involvement in the creation of a derivatives market for bitcoin,
while the other will center on Non-Deliverable Forwards (NDFs), a form
of cash-settled short-term forward contract.
The event will be open to the public, as the full release explains:
“Members of the public may also listen to the meeting via
conference call using a domestic toll-free telephone or international
toll or toll-free number to connect to a live, listen-only audio feed.”
Though larger questions about bitcoin’s classification as a currency
or commodity persist, the agency’s first foray into bitcoin is likely to
focus on more basic questions.
For example, similar introductory hearings held by the New York Department of Financial Services (NYDFS) and the US Conference of State Bank Supervisors
(CSBS) centered on educating those at each respective agency about the
basics of the technology, and these agencies are only now moving on to
more advanced subjects.
Ongoing debate
Despite the continued regulatory uncertainty in this area, the
meeting could mark the first step toward more clarity for the bitcoin
industry as to what the CFTC’s involvement will be in the industry’s
markets.
The CFTC has been publicly discussing whether bitcoin meets the
definition of a commodity under the organisation’s rules since March,
the time when TeraExchange moved to secure the agency’s approval for its recently launched bitcoin derivative.
At the time, acting CFTC chairman Mark Wetjen indicated that the group was still seeking an internal answer to this question.
“The analysis hasn’t concluded, but I think people believe there is a
pretty good argument that it would fit that definition, or there are at
least arguments that it would,” Wetjen said at a March conference,
according to Bloomberg.
Seeking definition
The CFTC’s exploration of bitcoin also comes at time when the bitcoin
market is arguably seeing its first influx of more advanced financial
trading tools.
Though some resources like Seedcoin-backed BTC.sx have been around for more than a year, new entrants such as BitMEX are now emerging as some of the ecosystem’s largest exchanges are adding margin and options services.
Further, prominent members of the bitcoin community argue that such trading activity will have the long-term effect of decreasing volatility in the broader bitcoin market.
Given the evolving nature of this segment in the bitcoin market, many
in the industry have called for the CFTC to provide greater clarity on
how it will seek to oversee new bitcoin or block chain-based investment tools.
Source : http://www.coindesk.com
Ben Lawsky to Deliver Bitcoin Keynote at Money20/20
New
York State Department of Financial Services (NYDFS) superintendent
Benjamin Lawsky is to deliver a keynote speech at Money20/20,
which bills itself as the world’s largest event for payments and financial services innovation.
Lawsky will take part in the conference’s (Bit)coinWorld section and will be one of the star speakers on the subject of cryptocurrencies.
Money20/20’s
organisers say they are big supporters of cryptocurrencies and their
underlying distributed payment protocols. Additionally, as bitcoin
generated a lot of interest at last year’s event, they decided to launch
(Bit)coinWorld as a forum dedicated solely to the cryptocurrency space.
A number of industry leaders will attend (Bit)coinWorld and the event has been endorsed by Coinbase co-founder Fred Ersham, BitPay chief executive Tony Gallippi, Blockchain chief executive Nicolas Cary, the Ripple Labs team and investor Roger Ver.
“We believe that bitcoin is nearing a tipping point for broad consumer adoption and recognition worldwide,” said Ehrsam.
Gallippi said bitcoin companies need to work effectively with
merchants, regulators and other established institutions if they want to
realise bitcoin’s full potential, adding:
“As the premier payments event, Money20/20 is well
positioned to make that happen and we’re excited help by bringing our
expertise and leadership to (Bit)coinWorld.”
Thanks to Lawsky, bitcoin’s regulators will have their voice heard at the event too.
BitLicense – a mixed bag for bitcoin
Lawsky became a prominent figure in the world of bitcoin regulation
in early 2014, after the NYDFS announced it would hold hearings on
bitcoin. The hearings were held in late January
and Lawsky’s department eventually announced plans for a comprehensive
regulatory framework for New York State’s bitcoin businesses.
The NYDFS unveiled its controversial list of proposed rules and regulations in July and industry reaction has not been overwhelmingly positive.
The so-called ‘BitLicense’ scheme has been heavily criticised by
a large number of bitcoin companies, both in the US and elsewhere. Some
commentators have been more open to the idea, however.
Due to the large number of reactions and suggestions, the NYDFS
decided to extend the comment period for the BitLicense proposal in late
August.
Lawsky explained the need for the extension in a recent interview with CoinDesk, stressing that
the NYDFS had to proceed with caution, as it could not risk getting
bitcoin regulation wrong. The revised BitLicense proposal should be
published by the end of October.
Money20/20 takes place 2nd-5th November at the Aria in Las Vegas.
Source : http://www.coindesk.com
Bitcoin Exchange Netagio and WalPay Prepare For Future Card Transactions
British Bitcoin exchange Netagio announced that they are preparing for future credit card transactions.
Netagio
permits trading between Bitcoins, British pounds and physical gold,
while also accepting deposits in Euro and US Dollars. Users are able to
deposit funds and receive international payments in GBP, EUR and USD,
with further currencies to follow.
In partnership with WalPay, a
payment service provider based in the Isle of Man, Netagio will allow
its users to make credit and debit card payments to their trading
accounts.
Any Netagio customer holding a Visa, Visa Electron,
Visa Debit, MasterCard, MasterCard Debit or Maestro card will be able to
deposit funds with Netagio and trade them against Bitcoin, gold or
Sterling at any time.
Netagio CEO Simon Hamblin says, “Our customers have always been, and will always continue to be, our number one priority,” and continues:
We
were keen to secure a partner that could not simply address our
immediate need for a new banking relationship, but also could partner
with us to further enhance our service for customers in the future.
WalPay have certainly stepped up to the mark and we have been very
impressed by their service and commitment.
WalPay head of Business Development & Sales Justin Martin says, “The
appetite for Bitcoin is not waning and we are thrilled to be working
with Netagio to secure new robust banking facilities for their customers
today, and also to work on introducing credit and debit card payment functionality in the very near future.” He continues:
Our
tight trading rules, card security measures and PCI compliant gateway
have been specifically adapted to work harmoniously with Netagios’
state-of-the-art secure exchange and crypto vault solutions to maximise
consumer confidence in Netagio. We were impressed by Simon and his
team’s rigorous approach to operational controls and compliance,
particularly in the important area of anti-money laundering (AML) and
Know Your Customer (KYC) requirements. We can see that Netagio are
entirely committed to ensuring that their customers’ interests are best
protected and that Netagio will continue to play a vital and stabilising
role as the industry continues to mature.
Source : https://www.cryptocoinsnews.com
CES.IO Upgrades Bitcoin Cloud Mining Hardware And Halves Costs
Ghash.io mining pool website
London-based Bitcoin exchange and cloud mining services provider, Cex.io announced
on Tuesday that they were lowering the maintenance cost from $0.18 to
$0.105 for 1 GHS per month. This reduction in maintenance cost comes
after the company upgraded its hardware for mining bitcoins in the
cloud. In addition, the hardware upgrade would also enable the company
to arrange the lowest possible electricity consumption costs for hosting
the ASICs.
Also read “Cex.io Contemplates Expansion to Scrypt ASICs: CCN Exclusive Interview with Cex.io“
Maintenance Costs and Bitcoin Mining
The
mining of bitcoins requires huge consumption of electricity. It also
involves constant monitoring of the hardware. As the mining of bitcoins
becomes more and more difficult to do individually, there has been a
shift toward mining in pools and also in the cloud. Mining service
providers make use of hardware that is highly efficient for bitcoin
mining in the cloud. Efficient mining hardware uses an integrated
circuit known as an ASIC (Application-Specific Integrated Circuit).
In
the cloud, the miner transfers the costs of maintaining the hardware
and the electricity costs to the service provider. As the level of
mining difficulty increases, better hardware and higher electrical power
are needed for mining to be profitable. Cloud service providers are
constantly looking for better hardware and cheaper electricity, so as to
cut on costs.
CEX signs contract with hardware vendor
In
a press statement released Tuesday, CEX announced that they had signed a
contract with an unnamed hardware vendor. The hardware vendor would
ship a range of the most powerful and efficient hardware equipment to
the company’s data centers.
The company also announced that the
new maintenance cost would come into effect from Wednesday, September
24th, 2014. In explaining the move, CEX CIO, Jeffrey Smith explained
that the company was facing “tough conditions” due to the increasing
difficulty of mining and the low price of bitcoin. According to him, the
two conditions had made cloud mining less profitable.
Cex.io upgrades hardware and halves maintenance costs
CEX and the 51% Question
As
of September 25, 2014 CEX’s mining pool GHASH.IO commands 24% of the
network hashrate, which is the largest among the known blocks followed
by Discus Fish, Eligius and BTC Guild. Network hashrate is the measuring
unit of the processing power of the Bitcoin network.
In June 2014, the GHASH.IO’s percentage had climbed to 40% leading to fears of what is called a 51% attack. In an interview with CCN,
Cex.io’s Chief Information Officer, Jeffrey Smith said that the
company did not have “any intentions” of executing a 51% attack as it
would do serious damage to the Bitcoin community of which the company
was “part of.”
A 51% Attack Explained
A 51% attack is a
single entity contributing more than half of the network hashrate, and
using that ability to manipulate the blockchain. An entity with 51% of
the network hashrate can potentially prevent any transactions from
receiving confirmations, thereby invalidating them. This invalidation
would translate into users not being able to send bitcoins from one
address to another.
The other thing that a 51% attack can allow
an entity to do is to reverse transactions they have sent during the
time they are in control of the network. This ability would potentially
enable double spend transactions on the network.
It is a constant
concern in the Bitcoin community that the currency remains
decentralized. In the event of a 51% attack, confidence in the use of
bitcoin would be lost, and the currency would quickly devalue. As the
community continues looking for a long-term solution to the 51% issue,
it will be up to each miner to strike a balance between the rewards and
the size of the mining pool they may choose.
Source : https://www.cryptocoinsnews.com
Easier reporting of suspicious user activity
LocalBitcoins site has now a new user reporting feature. You can find
the user reporting link from the public user profile page. The new
feature makes it easier to report suspicious users, though this option
has been always available through the support ticket system.
LocalBitcoins support team checks the reported users and may take
necessary action to suspend the user account if there is evidence of
breaking the site rules and good trade etiquette. Potential reasons to
report a user may include
Fraudulent activity
Violating LocalBitcoins terms of service
Misleading information
Abuse
Source : http://localbitcoins.blogspot.in
Could Scotland’s currency be bitcoin?
A central
question in the Scottish independence campaign has centered on
currency. The Bank of England has said repeatedly that an independent Scotland can not use the pound sterling, except for an 18-month emergency period following a yes vote.
No one has sorted out what currency Scotland would use after that period, but there’s been some speculation that digital currency bitcoin might be a good fit.
That idea may seem far-fetched, but it has been posited in at least one high-profile financial forum by the assistant governor of Australia’s central bank and in a publication by a British think tank.
The country does have some experience in experimenting with currencies. During the 18th and 19th centuries, Scotland tested out private currencies in an unregulated banking system before ceding control to the Bank of England.
Under
this free banking system, Scotland’s three largest private banks—the
Bank of Scotland, Royal Bank of Scotland and the British Linen Bank—
issued competing private currencies after the Bank of Scotland monopoly
on note issues ended. These private notes were backed by banks’ gold
reserves, while their supply was largely left up to market forces.
Adopting
a cryptocurrency like bitcoin would similarly be a return to private
money and could offer some benefits for Scotland, such as creating a
flexible flow of private capital at relatively low cost, says Pete
Rizzo, US editor for Coindesk, a digital currency news site.
But,
he warns, the risks would outweigh those rewards. A central bank would
have little to no control over setting monetary policy under bitcoin,
since the digital currency’s supply is dictated by market forces.
Instead of relying on a central bank to protect its value, bitcoin
uses high-powered supercomputers and sophisticated cryptography at
several unknown locations around the world.
A more
plausible solution, Rizzo explains, would be for Scotland to use the
underlying technology behind bitcoin to suit its needs and possibly
create its own, more flexible digital currency. The move would be almost
as radical as the one to break up the UK’s 307-year-old union.
Source : http://qz.com
Swedish Bitcoin Politician Wins Seat in Parliament with Only Bitcoin Donations
Mathias Sundin, deputy mayor of Norrköping in Eastern Sweden, has won his bid to join Sweden’s 349-member Parliament
while only receiving donations in the growing global digital currency,
Bitcoin. He left an understated Tweet on his Twitter account this
afternoon, confirming his election to Sweden’s Parliament, simply
stating “I’m in!”.
The actual election occurred on
September 14th, and now the votes have been tallied and confirmed
officially since then. The Swedish Parliament is similar to the House
of Representatives in the United States.
Swedish Bitcoin Politician Wins Seat in Parliament
The 36 year-old Dundin said in his blog previously about his campaign funding “If you want to support my campaign, you can’t give me dollars, euros or Swedish kronor, you must donate in bitcoins.” Now
that he is “in office”, he can work on living up to his campaign
promises from over the summer. “(I will) resist knee-jerk regulation of
bitcoin, other digital currencies, and disruptive innovation in
general. Continue the education reforms in Sweden. Help develop a tax
system that promotes fast growing, innovating companies. Defend your
right to privacy.”
