Celebate Myth : Hacker Leacked Nude Celebrity Photos in Exchange for Bitcoin
“This is a flagrant violation of privacy” – Jennifer Lawrence’s representatives.
A
wave of nude celebrity photos began to seep out Sunday evening and
Monday morning. Rumors are swirling that the unidentified hacker
exchanged the photos for Bitcoin donations over 4chan. The pictures were
allegedly picked up through hacks and released in a major leak. The
photos include Jennifer Lawrence, Kirsten Dunst, and Kate Upton. Many
more top off the long list of leaked pictures in what some are calling
“Celebgate”.
Yes, Bitcoin was somehow involved. But the
real details are getting lost in an unclear chain of events. Some claim
that the original hacker posted the photos on 4chan for free. He received 0.2545 BTC in donations after the fact, which is verifiable at this address:
Then
some other poster stole the idea, created a new thread elsewhere with
all the pictures, and demanded Bitcoin as payment. According to some
users, the original thread is gone.
iCloud May be the Reason for the Nude Photo Leakage
Ariana Grande claims the photos of her are not authentic.
The women were stolen from unwittingly. The pictures are now circulating the Internet, and finding there way to numerous reddit threads.
It’s not clear how the hacker achieved what he or she did. Apparently iCloud is partially to blame and is drawing heat for the alleged leak.
But this hasn’t been confirmed. It’s not yet clear if it is a specific
security flaw or an abuse of the “lost password” option, where it is
possible to act as any user as long as you know their email. Apple has
yet to comment on the situation. It’s a good reminder to keep sensitive
material secure and off the cloud.
Those involved have
reached out through their representatives. Some celebrities deny that
the pictures are real. A spokesperson for Ariana Grande claims the
photos of Grande are fake, but other spokespeople have indicated that at
least some of the photos are authentic.
Kate Upton Nude Photos Leaked
Representatives expressed concerns about the leaks. “This is a flagrant violation of privacy,” a Jennifer Lawrence spokesperson told HuffPost. “The authorities have been contacted and will prosecute anyone who posts the stolen photos of Jennifer Lawrence.”
Earlier
this week a 4chan user claimed to have a bunch of celebrity photos and
asked for Bitcoin donations in exchange for their release. The list of
already leaked photos is already quite lengthy, but the hacker claims to
have scrolls more-
a “master list” – and videos. The hacker said he or she will release
the rest for more Bitcoin donations. As we cleared up earlier, the
pictures were originally free.
It’s another less-than-flattering
use of Bitcoin that will attract negative attention. Some may associate
the currency Bitcoin with “hack” for all the news that’s developed in
that area. Mt. Gox, of course, claimed to be hacked over time and lost a
pretty penny worth of Bitcoin. A CNET database was hacked by a Russian group called W0rm. Hackers successfully rerouted Internet Service Provider traffic to steal bitcoins. And the list goes on.
And now there’s Celebgate.
Then of course, Bitcoin is associated with a lot of illicit activity,
especially via Silk Road, the drug marketplace that the feds shut down
last year (and cropped up again a few months later).
Source : http://www.cryptocoinsnews.com
9 Companies That Should Really Start Accepting Bitcoin
There once was a time when owning bitcoin meant keeping it idle and unspent in your wallet of choice.
Considering that bitcoin was designed to be transacted, the lack of merchants that accepted bitcoin back then was frustrating to many in the community.
Luckily for us, things have changed.
Some of bitcoin’s best features can be seen when businesses receive
the digital currency as payment for goods and services: reduced
transaction fees, no chargebacks to worry about and an unexpected
but significant side effect – a marketing boost.
These features have been enough to draw the attention of several
million- and billion dollar companies into the world of bitcoin this
year, like Dell, Expedia, Overstock and Dish, which have all integrated bitcoin payments into their business models since the start of 2014.
It’s important to note that nearly any business can accept bitcoin payments. Companies like Coinbase and Bitpay have made the process a breeze for businesses both small and large.
With that said, there are some companies that are particularly poised to accept bitcoin and reap the rewards of doing so.
Most of these companies have something in common: many are high-tech
companies with high-tech customers who may skew on the bitcoin-friendly
side, many are companies that fulfill everyday needs of their customers,
and many are already known for their openness to experiment with new
technology.
Here are nine companies that should really start accepting bitcoin:
1. Airbnb
Airbnb is shaking up the hospitality industry with its
community-based business model for users to book travel accommodations.
The service is a favorite among the younger, tech-savvy crowd, so adding
bitcoin as a payment option could certainly behoove the San
Francisco-based startup.
Having bitcoin payments integrated on Airbnb isn’t just wishful
thinking, though. There have been whispers in the industry that PayPal
subsidiary BrainTree (which provides payment software for Airbnb and the
second company on this list, among others) is “in talks” with Coinbase about accepting bitcoin on its platform.
2. Uber (or Lyft)
Uber’s mobile app payment software, like Airbnb’s, is provided by
BrainTree, so if the rumors are true, we may not be too far away from
being able to pay for Uber rides with bitcoin.
Aside from pure convenience, if the BrainTree-Coinbase comes to
fruition, there are still many reasons why Uber should start accepting
bitcoin. Uber customers already use a mobile app to order, communicate
with, and pay for their ride, and as such it wouldn’t be a far leap for
the all-digital company to add bitcoin as a payment option.
Adding bitcoin payments could offer a more nuanced benefit for Uber,
though. Competitor Lyft is gaining market share rather quickly, and some
have criticized that the two companies offer no distinct benefits over
its respective competitor. Integrating bitcoin could offer a PR boost to
the first in the market to embrace the progressive technology.
3. Amazon
The world’s largest online retailer has changed commerce forever by
bringing almost everything imaginable into the digital world, so it’s a
bit surprising to some that Amazon has been slow to warm up to digital
currencies.
Bitcoin is particularly convenient for making purchases online
(compared to brick-and-mortar stores), and for many other reasons it
seems obvious the digital currency would be a great fit for Amazon.
Part of why Amazon may not have the impetus to embrace bitcoin like
other online retailers have could be that the retailer enjoys lower
credit card transaction fees than most retailers, simply due to the
volume of orders the company processes. Still, the fees add up, and
adding bitcoin as a payment option could help Amazon’s bottom line.
4. Netflix
Netflix is another company well-known for disrupting the status quo.
Once dismissed as just another movie streaming platform, the media
company is now a pioneer of the digital format for new content creation,
like its Emmy-award winning original series Orange is the New Black.
Though the model of recurring payments that Netflix uses has yet to
be explored with bitcoin on a large scale, the company could potentially
draw in new customers by adding an option to pay for subscriptions with
bitcoin, and it’s not a stretch to imagine this functionality right on
the Netflix home screen.
5. Comcast (or Time Warner Cable)
In the same vein as Netflix, cable TV giant Comcast could stand to
benefit from accepting bitcoin payments, though not for the same
reasons.
Comcast has been going through a bit of a public relations disaster recently, after a number of recorded customer support phone calls
were uploaded online. The phone calls were damning to Comcast’s
reputation, and while customers may not have much of a choice in their
cable provider, there’s a good chance that allowing customers to pay
their TV and Internet bills with bitcoin would win some points in
its retention department.
6. Delta (or any major airline)
Sure, there are a select few airlines like airBaltic and Air Lituanica
where bitcoiners can buy flights with their beloved digital currency,
but the rest of the airline industry should catch up sooner, rather than
later.
For one, major airlines have struggled to keep up with the
cutting-edge of technology. If Delta, which flies more passengers than
any other airline, were to accept bitcoin, it would distinguish itself
from competitors as technologically progressive and save considerable
amounts of money on credit card chargebacks.
Add the fact that there’s probably a decent amount of bitcoin holders
who would be eager to splurge on a vacation if they could pay with BTC,
and the choice becomes even more clear.
7. Starbucks
Coffee is an everyday luxury for many people around the world, and
few would argue that Starbucks has more brand power than any of its
competitors.
Accepting bitcoin would be strategic for Starbucks in more ways than
simply luring new techy-savvy customers to its stores. The Seattle-based
coffee chain has found big success with its mobile payment app, and the
company’s CEO, Howard Schulz, has made it clear that Starbucks is focused on mobile and digital (which happen to be two areas that fit perfectly with bitcoin), saying:
“No single competency is enabling us to elevate the Starbucks brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.”
8. Whole Foods (or any major grocer)
While it may not be the same experience as treating yourself to a
coffee, grocery shopping is something that most everybody does on a
regular basis.
Of course we in the bitcoin community would like to be able to use
the digital currency to pay for all of our needs, but the benefits
wouldn’t be completely one-sided if Whole Foods or any other major
grocer started accepting bitcoin.
Grocery stores, like airlines, have struggled to keep up with the
pace of technology, but Whole Foods has successfully positioned itself
as more progressive and “hip” than most of its competitors.
Being the first nation-wide grocer to accept bitcoin would solidify
this reputation, and it would set the tone for grocers around the world
to allow unbanked customers to pay for their groceries with ease.
9. Venmo
Venmo is one of the most popular mobile payment apps right now, and
more people keep flocking to the platform to send friends and businesses
money for free.
The platform is so well-fit to add bitcoin as a payment option that
it’s almost baffling it hasn’t happened yet. With bitcoin payments as an
added feature, Venmo would diversify its offerings and bring in a whole
new wave of users at the same time.
The benefits of accepting bitcoin don’t stop at these nine companies, though.
Unlike some traditional financial systems, bitcoin doesn’t
discriminate. Pioneers like Overstock and Expedia have reported that
their bitcoin revenues have exceeded expectations, and in doing so have helped lead the way for other businesses to join them.
Source : http://www.coindesk.com
Newly Acquired Twitch.tv Accepts Bitcoin
Twitch,
the online streaming platform beloved by geeks and gamers from all over
the world, started accepting Bitcoin, following an announcement made a
few weeks ago. Bitcoin was just one of many payment options announced by
Twitch.tv in their international push.
A Strategic Move
The
growing success platform, which generates nearly 2% of the internet
traffic in the United States, allows gamers to broadcast (“stream”)
their video games online and watch other players’ streams. In July
alone, the start-up founded just three years ago by Emmett Shear and
Justin Kan, has attracted 55 million unique visitors for a total of 15
billion minutes of video watched (four and a half hours on average per
person). Competitions that can attract hundreds of thousands of viewers
around the world are regularly organized and re-transmitted live.
Integrating Bitcoin payments is, therefore, a logical move, considering
the intrinsically young and techie audience.
Thanks to the
Bitcoin addition, Twitch users can now use Bitcoin to subscribe to the
premium service « Twitch Turbo » and enjoy uninterrupted viewing,
exclusive profile-personalizing options, and priority customer support. The
primary reason for accepting all these new means of payment, including
Bitcoin, is to reach the widest possible audience, especially in
countries where credit card use is not particularly
widespread. Twitch.tv extrapolated on this point in their blog post:
“But I live in Uganda,” you say. You can use Skrill, OKPAY, and more. “What about me in Brazil?” You can use MercadoPago, Fundos PagSeguro, and more!
The famous streaming platform teamed up with Xsolla, which partners with the American Bitcoin processor Coinbase, to handle Bitcoin payments.
This detail is particularly important; indeed, beyond the handful
of merchants who decide to accept Bitcoin by contracting directly with
Coinbase/Bitpay or one of their competitors, most of the merchants are
currently using a Payment Service Provider such as Xsolla or Shopify
that allows them to add hundreds of means of payment in a few clicks
and centralize all of their different transaction flows from different
payment methods in a single area.
Given the number of
merchants that are currently using these types of Payment Services
Providers, the work of Bitcoin-evangelism among the latter is therefore
especially important and bears often fruit, as shown in the recent
partnership between GoCoin and Apriza, which brought the option of Bitcoin acceptance to over 1,000 merchants.
Amazon Owns Twitch.tv: Does Amazon Accept Bitcoin?
The move by Twitch predates the $970 Million acquisition of Twitch by Amazon a few days ago. This acquisition aroused great optimism in the conmmunity in the context of a possible extension of the acceptance of Bitcoin from Twitch.tv to Amazon.
However, this irrational exuberance must be qualified by considering
the following statement made weeks ago by the Amazon Payments head, Tom
Taylor, who suggested that Bitcoin adoption isn’t yet in the online
retailer’s pipeline:
Obviously it gets a lot of press, and we have considered it, […] but we are not hearing from customers that it’s right for them and don’t have any plans within Amazon to engage bitcoin.
Source : http://www.cryptocoinsnews.com
Charlie Shrem Hopes to Walk Free After Guilty Plea Deal
Bitcoin
entrepreneur and former BitInstant CEO Charlie Shrem hopes to walk free
after striking a deal to plead guilty to ‘unlicensed money
transmission’ in New York.
For Shrem, it’s the end of seven months of house arrest, restrictions on movement and uncertainty.
The plea bargain is a step down from prosecutors’ original charges and strong statements,
which also included money laundering and conspiracy and failing to file
suspicious activity reports with government banking authorities,
relating to former online black marketplace Silk Road.
Shrem told CoinDesk he had faced a penalty of up to 30 years
imprisonment if convicted of the more serious charges under the PATRIOT
Act, which would have also tied him to drug trafficking and terrorism
financing. He said:
“So, this is a first step of many, but I’m happy to not be going to trial, and moving forward.”
The plea deal does not guarantee his freedom, he said, but he
remained confident – no one has yet served jail time for unlicensed
money transmission alone.
Immediate plans
Shrem said there were no restrictions on his becoming involved with
bitcoin-related business once more, and he had immediate plans involving
his consulting work with payments company Payza.
“Right now I’m busy with Payza. We’re doing tons of volume with our first rollout and we have many plans. Payza will be the first merchant processor to offer both credit card AND bitcoin processing.”
Shrem said he had other plans but was “keeping them under wraps for now”.
He also plans to travel to Denver in two weeks to attend fellow bitcoin entrepreneur Erik Voorhees’ wedding.
“I was there when he proposed and super happy I’m not missing it”, Shrem added.
White collar crimes
Hearing Shrem’s case is US District Judge Jed S Rakoff. Rakoff recently penned an editorial in the New York Review of Books
regretting the difficulties the authorities have faced in successfully
prosecuting more serious charges such as fraud, or failing to report
suspicious activity, especially with regard to the recent global
financial crisis.
Having these charges removed from the list is likely a confidence booster for Shrem.
He was initially arrested in public circumstances at New York’s John
F. Kennedy airport on 27th January, as he arrived home from a bitcoin
conference in Amsterdam.
Though he resigned his position on the Bitcoin Foundation Board of Directors as a result of the arrest, he maintained he was not guilty and still enjoyed the support of many in the bitcoin community.
He was first unleashed from confinement to his parents’ house in Brooklyn in April, to attend the premiere of documentary ‘The Rise and Rise of Bitcoin’, and also attended a banking industry conference
in New York in July to speak about risks banks faced when dealing with
bitcoin issues. He led a panel at July’s North American Bitcoin
Conference in Chicago via a telepresence robot.
Co-defendant Robert Faiella
According to a court schedule notice released to the public, Shrem’s
co-defendant in the case, Robert Faiella of Florida, was also mentioned –
but it was not clear whether or not he would also make a deal (or even
if one was offered).
Faiella, aka ‘BTCKing’, is accused of selling $1m in bitcoins to drug traffickers and funneling them to Shrem’s BitInstant. Faiella has no prior criminal record.
Source : http://www.coindesk.com
App Coins Will Dethrone Bitcoin
Appcoins
By Randall Parker Jr.
There is endless debate as to whether Bitcoin will ever be unseated
at the dominant crypto-currency in the world. I’d like to weigh in on
this debate today with an emphatic, YES! As much as my love and
nostalgia for Bitcoin moves me to want to believe in the imperviousness
of the humble coin, the truth is feeling a different way.
Technology is like a excited child, rushing from idea to idea, place
to place, toy to toy, always hungry for something new and often growing
bored with the toys that used to bring such excitement and joy. The tech
wizards of today’s age are furiously clicking away at keyboards,
designing the new code that will one day replace the Bitcoin protocol as
the dominant decentralized digital currency system in the world.
Granted, I can understand how this can sound like wild claims without
much to back it up. Let me explain.
In the recent weeks and months, the rise of the AppCoins has begun. Coins like xCloudCoin – https://xcloudcoin.org/
, Storj (pronounced ‘storage’) – http://storj.io/ and SWARM –
http://swarmcorp.com/ have all hit the market among many others and
their uses and technology are completely different, but the common
thread exists between all three. Each coin represents a token, without
which, a user would not have access to a given application. So, the
AppCoin serves as both a key, allowing a user access to a given app
while also serving the developers as a means of fundraising.
Mastercoin is considered to be the first protocol to introduce this “app” model. thttp://www.mastercoin.org/ Certainly not without it’s own fair share of criticism (http://nakamotoinstitute.org/mempool/mastercoin-is-a-nightmare-of-insanity/),
Mastercoin can not be denied as a true “Bitcoin 2.0” technology.
Mastercoin works by embedding information into the actual Bitcoin
blockchain and it is never minded. Mastercoin doesn’t even have it’s own
blockchain, but exists “on top” of the Bitcoin blockchain.
So, I’ll make my case for the unseating of Bitcoin as the leader by
an upcoming AppCoin. It may not specifically be due to the
characteristics of the coin itself. In fact, I would consider it likely
that the coin itself will not be anything technically marvelous, but
rather it will be tied to an app that really takes off. It could be a
game, it could be a business service or it could just be cloud storage
like xCloudCon and Storj can offer. Regardless, it is my theory that
this usefulness of the app and the appeal that surrounds it will be what
launches the app and it’s related coin to crypto-supremacy status.
Currently the Bitcoin market cap is hovering between 6-7 billion
dollars and it has maintained that range for the better part of the past
9 months or so. If you could imagine if a service as popular as
Netflix, with an estimated 44 million users. Now, imagine, that instead
of paying $8/month for Netflix, imagine if each user invested about $100
to have lifetime access. Note that this isn’t a direct comparison and
I’m aware of that, but the parallels are strong enough to elucidate my
position. If each of Netflix’s 44 million users invested a mere $100 in a
coin that granted them access to the app, the related market cap of
that coin would be about 4.4B. That’s right on the heels of Bitcoin.
Imagine a coin that granted you access to a software suite similar to
Adobe’s Creative Suite and all you needed was a few coins. It would go
viral much faster than some obtuse and nerdy digital cash that was being
outlawed and gossiped about. Enter the world of video games, developers
can use block chains to keep track of achievements, in-game currency,
messaging and much more. We all know how popular video games always have
been.
Technology is ruled by Apps. I predict that in 3 years, crypto
currency will be far more diversified but the largest net worth of any
one single coin will be held by a very popular AppCoin. I’m calling it.
Source : http://bitcoinpricelive.com
5 US States Poised to Promote Bitcoin-Friendly Regulation
Given the recent critiques of New York and its proposed framework for
bitcoin businesses, many of the law’s opponents are no doubt hoping the
state and its regulators will alter the bill during its now extended
comment period.
After all, New York’s BitLicense proposal, once approved, could prove
influential at shaping wider US bitcoin regulation, a fact recently
underscored by New York Department of Financial Services (NYDFS)
superintendent Ben Lawsky in an interview with CoinDesk.
Of course, while vocal opponents of the bill and its controversial
provisions await more guidance, there remains the possibility that
another US state will introduce a framework that proves more enticing to
the bitcoin industry and its interests.
The ability for states to regulate and pass laws is what
makes America unique in many ways. So it should not come as a surprise
that some US states could see the backlash against New York’s proposal
as an opportunity to position their jurisdictions as more accepting of
digital currencies and the jobs and investment the industry can attract.
In this piece, CoinDesk takes a look at some of the US states that could be poised to pursue such a path.
Texas
Owing to its former status as a sovereign nation, Texas has a long
history of independence, a trait that its lawmakers and citizens
alike take pride in. Texas operates its own electrical grid, has no
income tax and has introduced a favorable regulatory framework for bitcoin exchanges.
As such, it should come as no surprise that the state has produced vocal bitcoin advocates.
For example, Steve Stockman,
a US Representative for the 36th Congressional District of Texas, has
indicated in the past that he favors the bitcoin industry as a way to
create jobs in his home state.
In line with his beliefs, Stockman will reportedly introduce a bill
to change bitcoin’s status from property, as is currently used for IRS
reporting, to currency, a distinction long lobbied for by the bitcoin
industry.
Outside of Stockman’s efforts, however, Texas also has in the past courted technology companies like Amazon seeking to avoid charging sales taxes on customers – an example of favorable treatment for digital businesses.
New Mexico
New Mexico is already known as a state where bitcoin businesses can
get things done. The state’s Financial Institutions Division does not
license or regulate money transmitters, making it a friendly place for
digital currency-related ventures.
That’s the primary reason why the first bitcoin ATM in the US was launched there, as its operator was easily able to comply with state laws.
Despite the lax regulatory environment in New Mexico, the state’s
Regulation and Licensing Department did put out an alert regarding the
risks of virtual currencies.
Yet, the regulatory body indicated it was
“evaluating the developing market for bitcoin and other forms of
virtual currency”, according to Alan Wilson, Director of the New Mexico
Securities Division.
New Hampshire
The tiny New England state of New Hampshire takes its state rights
seriously, a fact evidenced by its not-so-subtle state motto – “Live
Free or Die”.
This has led to growing support for the state’s bitcoin movement.
Andrew Hemingway, a Republican candidate for governor has notably
embraced bitcoin as part of a libertarian-leaning campaign stance,
parlaying his policies to gain new followers in the process.
He says that the weekly New Hampshire bitcoin meetup regularly
attracts 50-60 people every session – folks who believe that
cryptocurrencies are aligned with libertarian ideals.
Further, Hemingway makes it clear he wants to attract bitcoin businesses, telling CoinDesk:
“Companies are being regulated out of business, so they are looking for places to move. A state like New Hampshire, for instance, has the right to compete against a state like New York.”
California
As far as bitcoin is concerned, California is the capital of digital
currency in the US. It’s no wonder, then, that the state is attempting
to build the right framework – in a cautious way – to help influence
innovation, a hallmark of the state.
There’s a lot at stake – California leads the way in bitcoin-related
jobs, housing a majority of the industry’s engineering and
technology-driven talent.
David Kaufman, a consultant with Capital Advisors who helped to usher in California’s HN 8129 bill acknowledging virtual currency as legal money within the state, told CoinDesk that it is expected the state legislature will adopt “friendly regulations down the road”.
That’s a major reversal from just a year ago, when California sent the Bitcoin Foundation a cease-and-desist letter for violating various financial codes.
Since then, California has led the way in bitcon-related venture capital investment. According to the most recent CoinDesk State of Bitcoin Report, 48% of all bitcoin related VC went to Silicon Valley startups in the second quarter of 2014.
Colorado
As the first state to legalize marijuana, Colorado’s interest in
adopting virtual currencies is twofold. For one, the state has seen an
uptick in its government coffers as a result of being the first to adopt
a regulated and taxed marijuana economy.
Additionally, the state’s economy has struggled to get along with the traditional banking sector – it seems accounts could be closed for no reason, at any time.
If there’s one thing that distributed money like bitcoin can
accomplish, it is a better transport and transaction mechanism over cash
– something marijuana dispensaries which cannot get bank accounts must
conduct all their business in.
Alternative currency efforts such as Potcoin have been developed
specifically for the used of marijuana ventures. Innovations such as vending machines accepting bitcoin for marijuana
are also novel ideas that can reduce overhead as well as thwart
potential security concerns with human handling of both pot and cash at
the same time.
Of course, major bitcoin payment processors have stated that they will not do business
with companies that violate federal law, meaning should Colorado move
to embrace bitcoin, this industry may still face problems promoting
wider digital currency adoption.
Source : http://www.coindesk.com
3 Forces Shaping Next-Generation Bitcoin Exchanges
Investors and venture capitalists have developed a healthy appetite for funding bitcoin exchange services in recent months.
As the exchange system represents a key element of the broader
bitcoin economy, it’s unsurprising that these companies are able to
secure working capital. A closer look at recent news events, however,
reveals that underlying trends may be a motivating factor.
In the aftermath of Mt Gox’s much-publicized collapse, a new breed of exchanges has moved to fill the vacuum previously occupied by what was once the most popular bitcoin exchange.
From China to Silicon Valley, the companies behind the world’s most
active bitcoin exchanges are raising funds and using those resources to
build and deploy stronger and more user-friendly platforms, ones that go
beyond Mt Gox in many key ways.
Overall, the funding rounds reflect three trends currently at work in
the exchange space. Today’s bitcoin exchanges are internationally
focused, institutional investor-approved and compliant (or as much as
possible) with local laws.
1. International markets
OKCoin, the largest China-based bitcoin exchange by volume, raised $10m in a Series A funding round back in March. The deal touted notable participants including Ceyuan, a VC fund that was among the first to develop in mainland China.
In the time since, the company has put that funding to work. As revealed in subsequent conversations with CoinDesk, OKCoin
has begun to make big investments in its international services with an
eye on capturing a significant market share outside of mainland China.
Today, the firm has roughly 100 employees and has even hired key talent from the US market in conjunction with its expansion.
From a broader perspective, exchanges can utilize funding to help
integrate with the traditional financial system. This process also give
exchanges the resources to build services that make it easier for users
familiar with other platforms to interface successfully.
As noted by Changpeng Zhao, OKCoin’s chief technology officer:
“The image that we want to build, and we will build, is that of a professional financial services company. It’s not just an Internet company, it’s not just a bitcoin company. We are an exchange.”
2. Investor interest
Though it wasn’t announced until March, Bitstamp raised $10m in new funding from Pantera Capital Management in
2013. The move gave the Europe-based bitcoin exchange a significant
boost during a time of significant evolution in the exchange
marketplace.
During the period Bitstamp purportedly received the funding, bitcoin
exchanges were seeing larger volumes in response to the rising price of
the digital currency. This was also a period of increasing interest
among deep-pocketed investment groups, and Pantera’s deal would be the
first of many to come.
The hedge fund itself further reflects its growing institutional
interest in digital currency. Pantera is a bitcoin-focused investment
fund formed in conjunction with Fortress Investment Group, Ribbit
Capital and Benchmark Capital.
3. Legal realities
The largest deal to involve a US-based bitcoin exchange in 2014 thus far, Kraken parent company Payward, Inc.’s $5m Series A round, was intended to raise money to fund overseas development.
The Series A round was led by Hummingbird Ventures,
an early-phase VC fund. Given the international – and 24-hour – nature
of the bitcoin market, Kraken and other exchanges look to funding as a
way to expand internationally. Yet, this deal also highlighted another
major expense that bitcoin exchanges have to contend with: legal
compliance.
Kraken CEO Jesse Powell told CoinDesk when his company announced its
$5m round that, ultimately, much of that funding would be directed
toward legal expenses.
He explained:
“We’re really excited, we’ve been putting the round together for a long time, the funding is going to go to development, regulatory stuff, getting all the licenses in the US and around the world. A lot of it is going to go into legal.”
Powell added that companies in the exchange sector no doubt face
increased scrutiny due to the nature of their business and the
still-developing regulatory environment for bitcoin.
As a result, it’s possible that exchanges may require additional resources in the future to maintain compliance.
Source : http://www.coindesk.com
The Short-Term View on Bitcoin Remittances
Luis
Buenaventura is the head of product at Satoshi Citadel Industries, and
“dreams of a world where everyone has access to everything”.
Satoshi Citadel Industries manages
several different digital currency services and
sites, including Bitmarket, in-beta exchange Coinage, photo-sharing
site Bitstars.ph, and remittance service ReBit.
SCI is also rolling out pre-loaded bitcoin cards as a way to get bitcoin into newcomers’ wallets.
Remittance is often cited as the one of the primary ways that bitcoin
would change the global financial landscape, by virtue of the
cryptocurrency’s microscopic transfer fees and region-agnostic
transmission.
Advocates and enthusiasts often point to exorbitant remittance fees
as a sign of an established industry that is ripe for disruption.
A recent Business Insider study projects global savings of 90%
(US$42bn) if we were to adopt bitcoin-based remittance on a worldwide
scale. But what does it take for this paradise of free-flowing bytes and
money to actually become a reality?
The road ahead, initially paved with libertarian dreams and
well-meaning naiveté, has some missing segments that have yet to be
filled in.
‘Half a business’
In a recent interview on Let’s Talk Bitcoin, crypto-evangelist Richard Boase refers to BitPesa, a well-known bitcoin remittance service based in Kenya, as “half a business”.
In order to understand this, you need to understand how the average bitcoin remittance business in the developing world works.
An overseas customer wants to send money to a friend overseas, so
they visit the website of a bitcoin remittance company in the relevant
country and type in the amount of money they want to send. The site
responds with a BTC invoice. The customer whips out his or her
smartphone, scans and confirms the transfer, and bitcoins come flying
out of their virtual wallet and into that of the remittance company.
On the local side of the process, the company raises the equivalent
amount in fiat and delivers it to the customer’s nominated recipient.
Every bitcoin remittance service is, at its core, just a company that
buys up bitcoins, as all it is doing is taking its customers’ BTC and
paying their nominated recipients for it in fiat. This is why it’s only
“half a business”.
Inevitably, the company will amass more BTC than it needs and run out
of the fiat it needs to make payouts, that is, unless it also has a
related service that sells the surplus coins.
In order to sustain this constant stream of incoming BTC and outgoing
fiat, a remittance provider needs to either be very liquid or be very
lively on the trading desks. This is easier when bitcoin’s market value
is rising, but these past few weeks of tepid ups-and-downs have not been kind to the latter strategy.
The cost of compliance
Regulatory compliance, as described in an earlier CoinDesk piece,
is one of the root causes of expensive remittance fees. The US, as a
prime example, blurs the line between customer protection and outright
protectionism by requiring money service businesses to obtain licences
in 43 separate states. Furthermore, in California, for instance, the
surety bond starts at $250,000.
Obtaining a licence in the US is the single largest barrier
to entry into the remittance industry and explains, at least partially,
why there has been so little innovation in the space. BitPesa tellingly
opts to avoid the issue altogether and doesn’t accept customers from the US at all.
The sneaker API
Getting the bitcoins from the sender over to the company in the
relevant country isn’t the end of the story. Once the BTC has made its
trans-oceanic leap, the final challenge is in bridging the last mile –
getting the local currency from the company headquarters into the hands
of the waiting recipient.
In the Philippines, as in most Asian countries with substantial
diaspora, there are dozens of options, including over-the-counter bank
deposits, pawnshop/cash pickup centers, telco-backed mobile wallets and
door-to-door delivery.
There are two problems, however. The first is there’s no clear market
leader, so instead of specialising in one fulfilment method, a money
transfer business instead needs to somehow integrate with all of them.
Second, none of these methods have any kind of web-service
automation, so the act of taking funds from the company’s accounts and
delivering them to a given fulfilment provider’s branch office must be
done by physically visiting the establishment.
The good news is that labour is cheap in the developing world, and the sneakernet
is alive and well. There is a substantially larger overhead to managing
full-time manpower than a handful of JSON-RPC connections, but given
the absence of the latter, such businesses must subsist via the former.
The final calculation
Although it is true that bitcoin reduces the cost of money
transmission to next to nothing, the network isn’t the most expensive
part of the money-transfer value chain. It’s actually compliance and
logistics, both of which are sectors that bitcoin as a technology can
address only tangentially.
In the short term, a bitcoin-powered remittance service will be
severely hobbled by these realities and thus can only mount a mildly
competitive alternative to traditional providers, and not the
mind-blowing sea change that evangelists envision.
In a world where cryptocurrencies were ubiquitous, regulatory compliance could be rendered obsolete and logistics costs could disappear. That paradise might be down the road, but we’re not quite there yet.
Source : http://www.coindesk.com
Low Cost Bitcoin Hashing Power Trading Platform Kryptologika Offers GH/s Backed With Physical Silver
“Increased competition in cloud mining should be welcomed by bitcoin
enthusiasts, silver bugs and miners,” according to the creators of kryptologika.com—a Polish-Irish-Swedish Bitcoin trading platform that was launched early August 2014.
Differentiating from competitors Kryptologika offers a unique system of backing shares
against the gradual drop in profitability of mining, utilizing physical
silver. It is a well-known fact that during Bitcoin price stagnation,
rising difficulty makes mining less and less productive over time and
eventually, the costs of electricity can make the entire process
unprofitable. The benefit of silver is ability to ensure that the price
of GH/s offered by the platform would never fall to zero, as it is
backed by the price of an equivalent amount of physical silver per
share. Thus, buying shares is not only an investment in hashing power,
but also in silver. This solution, combined with much lower maintenance
costs for hosting in China, would result in a very competitive offer.
Moreover, the shares can be traded among the users on the platform and
in the near future, they will be available not only for Bitcoin, but
also in fixed prices for fiat currencies.
“We want to optimize the mining process to make it as cost-effective as possible for the benefit of our customers. At the same time, since we are devoted miners and silver bugs, we created a product that combines the two: low-cost hashing power and an investment in physical silver.” said Project Manager of kryptologika Antoni Lesinski. “At this stage we are still in the beta phase but we will be offering cheap hashing power for Dollars, Euros, British pounds and Polish zloty in a few weeks, bringing the whole undertaking to new levels.”
At the start, the maintenance fees have been as low at $0.11 per GH/s
(denominated in Polish zloty) per month. The good news is that this is
also changing for the benefit of the users, starting in September. A 2%
reduction of fees was offered to Kryptologika users due to an increasing
client base and availability of better pricing in China.
“We will be reviewing our maintenance fees at least every quarter. This small reduction in fees demonstrates our commitment to deliver to our customers the best solutions possible, and build long term relationships, which are both very challenging, especially when Bitcoin prices are at lower levels.”
Trading shares on the platform is free of charge and hashing power
goes live almost immediately after the purchase making it even more
attractive for traders. Kryptologika recently teamed up with UK based onestopminingshop.com— a mining hardware retailer with a view to build a system of distribution of hashing power, for fiat currencies.
To learn more please go to: https://kryptologika.com/
Media Contact: press@kryptologika.pl
Source : http://bitcoinprbuzz.com
Poll Review: The Proposed NYDFS BitLicense Regulations
Story Highlights
- 65% of votes in a NEWSBTC poll consider the recent NYDFS proposal to be a total failure
- 35% say the proposal is a good start
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Since the New York Department of Financial Service released their BitLicense proposal for a public commenting period, there’s been a lot of chatter surrounding the topic.
One one side you have the people that think this could be a very good
start to regulating bitcoin, and then you have the folks who have
crossed their arms and are shaking their heads vigorously with
disappointment.
I wanted to see what the visitors of this website thought. So I put together a poll last week that was pretty straightforward: The proposed NYDFS Bitcoin Regulations…
Respondents were provided with two possible answers: “Are a total failure” and “Are a good start.”
In total, 142 people responded to the poll. Sixty-five percent of
those people (which works out to 93 votes) said they deem the BitLicense
proposals to be a total failure. The other thirty-five percent (49
voters) consider the proposals to be a good start.
It probably won’t come as a surprise that a majority of respondents
consider the NYDFS BitLicense proposal to be a total failure. On a
number of different fronts, some argue the proposals are simply going
against everything bitcoin stands for.
Some business owners that operate in the New York state are even
concerned they will be unable to comply with the proposal, should it
become regulation. There’s even talks of some businesses effectively
“geofencing” New York, preventing customers living in the state from
using their services.
Either way, there’s still much more work to be done.
Source : http://newsbtc.com
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