Easier reporting of suspicious user activity

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.”

Source : https://www.cryptocoinsnews.com