Topic: BITCOIN NEWS EVRYDAY! From multiple sources. - page 13. (Read 51244 times)

Bitfinex Now Included in the CoinDesk Bitcoin Price Index
Garrick Hileman (@garrickhileman) | Published on March 13, 2014 at 16:00 GMT | Exchanges, News, Prices

CoinDesk has added Bitfinex to the Bitcoin Price Index (BPI) today as of 16:00 GMT.

Bitfinex, which is incorporated in Hong Kong, has been on CoinDesk’s radar for possible inclusion in the BPI for some time now.

Over the past several weeks, and particularly since the decline of Mt. Gox, we have observed that Bitfinex has been able to sustain a dramatic increase in its share of the total volume of US dollar-denominated bitcoins traded.

CoinDesk has also verified that Bitfinex meets the CoinDesk BPI criteria, which include rules ranging from minimum trade size to maximum customer withdrawal delays.

Three horse race

In late 2013, Bitfinex was already the fourth largest exchange. However, it was a distant fourth compared to the big three exchanges that comprised the BPI during this time: Bitstamp, BTC-e, and Mt. Gox – all of which averaged at least 30% of US dollar-denominated bitcoin trading volume (see Table 1).

Table 1: Top 4 Bitcoin Exchange $USD Volume Market Share, late-2013
Sources: CoinDesk, BitcoinAverage

In contrast, for much of late November and December in 2013, Bitfinex’s overall share of total US dollar-denominated bitcoin trading volume was in the single digits, averaging only 6% of the total.

Rapid rise

Much has changed in the bitcoin exchange world since December, starting with Bitfinex surpassing the now bankrupt Mt. Gox on several days of trading in January.

Bitfinex also recently leapfrogged BTC-e, another BPI component, with more US dollar-denominated bitcoins exchanged in five of the last six trading days, and almost half of the past 29 trading days (see Table 2).

Table 2: Top 3 Bitcoin Exchange $USD Volume Market Share, late-2013 (% of total $USD exchanged)
Top 3 Bitcoin Exchanges $USD Volume Market Share, late-2013 (% of total $USD exchanged)

Have you got some feedback on the CoinDesk BPI criteria? Are there other exchanges you think should be included? Please share your thoughts in the comments below or send them to [email protected].

Bitcoin price info:


Bitcoin average price:

Bank of England: Digital Currencies are Similar to Commodities
Nermin Hajdarbegovic | Published on March 13, 2014 at 13:02 GMT | Europe, News, Regulation

The Bank of England (BoE) has published an article on the role of money in the modern economy and one topic was the future of digital currencies and payment technologies. The currency v commodity debate has been going on for a while and the Bank of England is clearly on the commodity side of the argument.

“Digital currencies are not at present widely used as a medium of exchange. Instead, their popularity largely derives from their ability to serve as an asset class. As such they may have more conceptual similarities to commodities, such as gold, than money,” the bank concluded.

Not a generally accepted medium of exchange

Digital currencies were brought up in the context of alternative currencies and recent developments in payment technologies. The advent of e-money and services like PayPal and Google Wallet was discussed and the bank concluded that these forms of money have similar features to bank deposits.

“For example, money in an e-money account represents a store of value so long as the companies providing it are seen as trustworthy. E-money can also be used as a medium of exchange with businesses (such as online sellers) or individuals that accept it,” the report points out, adding:

“However, it is still not as widely accepted as other media of exchange, for instance, it is not generally accepted by high street shops. Transactions using these technologies are also typically denominated in the existing unit of account (pounds sterling in the United Kingdom).”

Digital currencies are quite a bit different, since they can be created out of nothing and their exchange rate is not fixed. The supply of digital currencies is typically limited, which is not the case with e-money accounts.

The bank also outlines some basic differences between local currencies and digital currencies. The former are issued in a defined environment, they are not decentralised and they are usually bought in exchange for currency at fixed rates. This of course is not the case with digital currencies, as they do not have a fixed rate and they are practically their own unit of account.

Bank of England not to keen to weigh in

The Bank of England has not said much about bitcoin in the past. It seems it simply does not think bitcoin is big enough to worry about, or as the bank puts it:

“The current levels of economic activity and payments involving bitcoin are too light to have a material impact on [the bank's] monetary or financial stability objectives in the short term.”

This is not the case with most European central banks and the ECB for that matter. Many of them have already issued similarly worded bitcoin warnings, cautioning the public about potential losses stemming from volatility, fraud, theft and a range of other issues.

Speaking at a bitcoin panel discussion last year, BoE chief cashier Chris Salmon described bitcoin as “genuinely innovative,” but he warned that it would not be the “final word” in digital currencies. In other words, something better could eventually replace bitcoin.

Salmon also said that it is highly unlikely that central banks will issue digital money in the next decade, but he admitted it is a possibility sometime in the future. Salmon believes digital currencies in their current form cannot replace traditional money, but they can complement it.

Pock.io Becomes First UK Retailer to Sell Gift Cards for Cryptocurrencies
Roop Gill (@roopgill) | Published on March 13, 2014 at 15:32 GMT | Companies, Merchants, News, Startups

Consumers in the UK can now use their bitcoin and other cryptocurrencies to buy gift cards for major online retailers like Amazon, Google Play Store, ASOS and Starbucks.

Launched at the end of January, Pock.io has become the first British service to exchange retailer gift cards for digital currencies – with eight different cryptocoins currently accepted.

Pock.io CEO and co-founder Rusty Nash said that the driving force behind the launch of this service was to make digital currencies more mainstream in the UK.

Pock.io’s business model is similar to that of the California-based mobile gift card wallet, Gyft, which started accepting bitcoin last May. Gyft has since expanded to Canada with a limited number of retailers, but hasn’t made the leap across the pond yet.

Some UK users have reported being unable to use their Gyft gift cards on Amazon.co.uk, while others have reported problems with shipping restrictions into the UK with items purchased on the Amazon.com site.

Wide-open market

Nash said he noticed that there was a gap in the British market for this kind of service.

“I had the idea of gift cards even before I knew Gyft and other competitors were available. When I did my research, I obviously found them in the US market, but there was nothing in the UK. I saw a gap that not only I wanted to fill, but needed to be filled.”

Even though Pock.io is only a couple of months old, Nash is already planning to expand the service across Europe. He eventually also wants to take it to America and Canada, where he will face competition from Gyft and eGifter. He says what sets his company apart is that it accepts a variety of digital currencies, not just bitcoin.

“We match [Gyft and eGifter] on the fact that we have zero per cent commission. But, our main difference is the fact that we accept multiple cryptocurrencies.”

Community focused

Currently, Pock.io is accepting bitcoin, percoin, litecoin, dogecoin, maxcoin, verticoin, worldcoin and quark. Nash said that they would continue to add more currencies based on the community’s requests.

“We listen to the community and we have managed to grow so fast because we like to take direction from the community,” says Nash.

True to Nash’s word, Pock.io removed Apple from its gift card selection following the Cupercino-based company’s controversial decision to remove Blockchain’s wallet app from the App Store.


While iTunes products may no longer be available via Pock.io, the company is working on adding more merchants to its network.

The latest partnership they have struck is with the Great British Pub Card, which enables people to top up their gift cards for drinks and food at 750 pubs in the UK.

Nash said that they are also in pre-approval stages to add a major UK supermarket to their database.

Tech Millionaire Zhenya Tsvetnenko Brings Bitcoin to Australian Stock Exchange
Nermin Hajdarbegovic | Published on March 13, 2014 at 10:51 GMT | Investors

Australian investment company Macro Energy has announced plans to enter the digital currency space through the acquisition of Digital CC and its subsidiary digitalBTC. The company plans to raise A$9.1m and list digitalBTC on the Australian Stock Exchange (ASX).

Macro Energy describes digitalBTC as an “innovative digital currency company” engaged in bitcoin mining and trading. In addition digitalBTC is developing retail consumer products for bitcoin and other digital currencies.

Strong credentials

The company points out that digitalBTC already has established mining revenues and ties with key hardware partners. It also has a trading desk backed by management experienced in physical commodities trading and is headed by Zhenya Tsvetnenko, a wealthy Perth-based tech entrepreneur.

Macro Energy said:

“Following completion of the transaction, digitalBTC will be the first ASX-listed company offering exposure to the bitcoin system and will gain advantage from the robust corporate transparency and compliance required by the ASX listing.”

The capital raising appears to have been successful and the company says it already has “firm commitments” from investors. The money raised will go towards expanding bitcoin mining and trading activities, as well as development of retail-oriented mobile applications.

High hopes

Tsvetnenko has a background in tech and one of his earlier projects was a micro-transaction platform integrated with Google ads and mobile apps. He believes he can change the way many users approach payments and transfers.

Tsvetnenko said:

“As the bitcoin system matures beyond its initial niche and begins to realise its true disruptive potential, sophisticated service firms will be increasingly required to facilitate the system. We believe that sophisticated intermediaries such as digitalBTC can derive significant profit in supporting this emerging growth phase of bitcoin, as it takes its place as a true worldwide currency.”

Tsvetnenko said he is pleased with the Macro Energy deal, as it will give digitalBTC the platform and capital to take its operation to the next level. Since the company will be listed on the ASX, public market investors will have an opportunity to participate, he points out.

In addition to bitcoin, digitalBTC will also look at other emerging digital currencies, as many of them enjoy similar growth rates to bitcoin and they could complement digitalBTC’s digital currency strategy.

High-quality

Macro Energy managing director Brett Lawrence said the company was on the lookout for high quality investments and digitalBTC ticked all the right boxes. He said digitalBTC offers Macro shareholders “significant potential upside” in a rapidly evolving sector.

“The strong support shown by new investors, having received firm commitments exceeding $9.1m under the capital raising, underlines investor confidence in the future of the bitcoin system,” Lawrence said.

Australia is relatively liberal when it comes to digital currencies, the Reserve Bank of Australia does not believe that it has to step in yet, and the fact that a bitcoin company can trade on the ASX and raise plenty of funding from serious investors is an encouraging sign.

Singapore to Regulate Bitcoin Exchanges and ATMs
Emily Spaven (@emilyspaven) | Published on March 13, 2014 at 11:08 GMT | Asia, News, Regulation

The Monetary Authority of Singapore (MAS) is to regulate virtual currency intermediaries in order to address potential money laundering and terrorist financing risks.       

A statement from MAS said the anonymous nature of virtual currency transactions leave them particularly vulnerable to these risks.

In response, MAS is introducing regulations requiring intermediaries that operate virtual currency exchanges and vending machines to verify the identities of their customers. They will also be required to report any suspicious transactions to the Suspicious Transaction Reporting Office.

Ong Chong Tee, deputy managing director of MAS, said:

“MAS is taking a targeted regulatory approach to virtual currencies to specifically address money laundering and terrorist financing risks. Consumers and businesses should take note of the broader risks that dealing in virtual currencies entails and should exercise the necessary caution.”

These new requirements are similar to those that already exist for money changers and remittance companies that facilitate cash transactions in the country.

Greater clarity

Antony Lewis, business development at Singapore-based bitcoin exchange itBit, said: “We welcome regulatory clarity for bitcoin, and we applaud these steps by the Monetary Authority of Singapore.”

He went on to say itBit focuses on offering bank-level security to those trading bitcoin, comcluding:

“As outfits which knowingly engage in questionable transactions are regulated out of the market, consumers win.”

The MAS statement highlights it does not view virtual currencies such as bitcoin as securities or legal tender and , as such, the intermediaries involved are not covered by the Securities and Futures Act and the Financial Advisers Act.

Last year, MAS warned consumers of the potential dangers of digital currencies, but followed this in December with a statement revealing it would not interfere with bitcoin adoption.

The authority said: “Whether or not businesses accept bitcoins in exchange for their goods and services is a commercial decision in which MAS does not intervene.”

Bitcoin Derivatives Platform BTC.SX Resumes Trading After Mt Gox-Induced Freeze
Danny Bradbury (@dannybradbury) | Published on March 12, 2014 at 22:36 GMT | Companies, Exchanges, News

Derivatives trading site BTC.SX has resumed trading after a few weeks of downtime induced by the Mt. Gox collapse. The company has signed BitStamp as its new exchange partner, said BTC.SX CEO Joseph Lee.

BTC.SX suspended its operations until further notice on February 25, after Mt. Gox imploded. At the time, Lee told CoinDesk that he had no prior warning from the exchange, even as a business partner. BTC.SX went to Gox to trade bitcoins on behalf of its customers, who were using Lee’s site to trade bitcoin-based derivatives.

The company was up to around $40m in brokered trades by the time Mt Gox collapsed.

“Counterparty risk is something that we spotted early in the business. It’s always been in our plan to partner with other exchanges,” said Lee, adding that he had originally planned to bring other exchanges on in April. The firm switched on BitStamp integration yesterday.

“We think celebration is premature, because at the end of the day we have 100% counterparty risk with one exchange,” Lee said. The firm is talking to others, including Coinsetter, BitFinex, ItBit, and BTC-e. “We tend to pick exchanges based on who can provide the most liquidity. That’s what our customers want – good fill prices.”

When Mt. Gox imploded, BTC.SX lost all of the bitcoins that it had stored in the exchange’s wallet. However, Lee had begun withdrawing some funds earlier and reducing his exposure to the exchange based on worries about its future. “We do hold a trading reserve out at the exchanges, and that balance is getting moved in and out of,” he explained. “That money depends on the level of risk that we wanted.”

“Counterparty risk is something that we spotted early in the business.”

However, Lee maintains that BTC.SX is still a fully-funded reserve. “We would never ever run a fractional reserve,” he protested. “Businesses that want to run fractional reserves have to be very honest about that, especially in the world of bitcoin.”

BTC.SX’s reserves are held in a separate off-line wallet, he said, and the company doesn’t run a hot wallet at all. The firm has a withdrawal time of 24 hours. Whenever a withdrawal is requested, all account reconciliations are performed before it is processed. “It’s time-consuming for us, but security of customer funds should be considered paramount,” he said.

However, the company isn’t able to formally prove its reserves at present. An audit is “on our to do list,” Lee said. The company is now dually incorporated in Singapore and England, and its financial returns come out at the end of the year, so the order will have to appear before that, he said.

The firm relaunched quietly yesterday. Before that, it tested for a few days with its closest users to ensure that the BitStamp integration was running smoothly. Over the next few days, it will increase trading limits.

BTC-SX used its downtime to perform some upgrades that would ensure its ability to scale as a business. It more than doubled its server capacity, Lee said, and introduced more bookkeeping updates on the back end. It has increased its team to five people in recent months, including its London-based developer team.

Expect to see BTC.SX signing with another one or two exchanges in the next month, Lee concluded. The firm, which began with a $150,000 investment, will also announce the completion of its latest funding round later this month.

Boost VC to Accelerate 100 Bitcoin Companies Over Next Three Years
Daniel Cawrey (@danielcawrey) | Published on March 12, 2014 at 20:56 GMT | Investors, News, Startups, Technology

Boost VC, the first incubator to focus on accelerating bitcoin companies in Silicon Valley, has announced an ambitious plan to help grow the bitcoin industry.

Adam Draper, founder and CEO of Boost VC, told CoinDesk:

“We are actually, over the next three years, going to be accelerating 200 companies. And 100 of those are going to be bitcoin companies. That’s our big stake in the ground.”

So far, Boost has accelerated 10 bitcoin startups: seven companies in last year’s summer session and three in its latest class.

“We’re just excited about the space,” said Draper. ”We’re going to launch 10 to 15 bitcoin companies per session.”

Growing interest

Boost VC didn’t start accepting bitcoin companies at its inception – rather, it’s something that evolved over time, according to Draper.

“I started Boost in October of 2012. We accepted seven companies. We were providing housing, office space, bringing in speakers every week. It went really well,” he said.

Boost VC's housing facility in downtown San Mateo, CA. Source: AngelList
Boost VC housing facility, San Mateo, CA. Source: AngelList
The accelerator then started looking at some up-and-coming technologies for its next class.

Drones and 3D printing were ideas tossed around before bitcoin came up. At this point, Draper had a realization:

“When I was looking at bitcoin, I was thinking, ‘Well, there are really only like five companies in the bitcoin space. It’s not really an industry, but there’s a lot of opportunity in this’.”

After meeting a number of people working with the digital currency, Draper made a decision to start incubating bitcoin companies.

Encouragingly, there was investment interest from the start. One investor reached out to Draper and told him:

“If you’re going to be launching these bitcoin companies, I’d be interested in backing all of those that come out of Boost in this session.”

“So, that gave me the idea that there were enough bitcoin investors,” said Draper.

The Boost Bitcoin Fund invested in an initial seven bitcoin companies – anchored by Lightspeed Venture Partners, the Bitcoin Opportunity Fund and angel investor Ben Davenport.

Boost VC was the first bitcoin incubator, now it plans to be the largest.

New phase

Payment processors, exchanges and mining companies all made an appearance in bitcoin’s initial phase. As Boost sees it, the industry is now maturing.

“The exchanges are still a bit volatile – everything is a bit volatile – but we’re moving into a [new] phase,” said Draper.

The aforementioned types of companies are not completely out of the running in terms of investment opportunities, but Boost is looking closely at the next generation of bitcoin innovation. Said Draper:

“What we were thinking about is: What’s next? What does bitcoin do better than USD or pesos?”

Bitcoin can do some things better than cash. So, finding great companies that can make this easy for the consumer is what Draper wants to focus on.

“[Bitcoin] is better at remittance. It’s better at microtransactions. It’s better than using your Visa card online. It’s just a better cash system than most inflationary currencies,” he said.

A startup idea that gets incubated at Boost VC needs to think about being an easy onramp to bitcoin, Draper explained:

“Anything that makes bitcoin easier to access. Coinbase made it super easy to buy bitcoin. They solved one of the main issues with bitcoin – that it was hard to approach.”

He also pointed out some of the past Boost VC companies that help reduce the complexities of bitcoin.

Adam Draper (L) and co-founder Brayton Williams featured in Entrepreneur Magazine.
Draper (L) and Boost co-founder Brayton Williams (R). Source: Entrepreneur magazine
Draper mentioned SnapCard, which makes buying things with bitcoin simple. Gliph was another example, a company that allows users to send bitcoin via its mobile messaging app.

Increasing VC interest

A healthy does of venture-backed money flowed to bitcoin companies last year. Draper believes that venture capital growth will influence other entrepreneurs into thinking about businesses based around the digital currency:

“I feel that entrepreneurs are still starting to work on bitcoin projects. They aren’t necessarily taking a full leap. But with more money in the ecosystem, they are starting to take the leap.”

Now that investors are becoming more familiar with bitcoin, there is a pickup in interest. The US dollar is still a part of the equation, however, as that is the tool for truly valuing deals that get done in bitcoin.

“I see deals happen where they actually invest with bitcoin. USD needs to be a touchstone for what the worth is,” explained Draper.


In fact, the Boost Bitcoin Fund kept a quarter of its holdings in bitcoin. When investing in startups involved in that fund, those companies received BTC as a part of their funding.

“When we created the Boost Bitcoin Fund,” Draper said, ”one-fourth of that fund was held in bitcoin. It was a holding and we held bitcoin and cash for that fund – and we ended up invested in those companies.”

It’s possible that the Boost Bitcoin Fund might be on to something with using bitcoin as an instrument for venture capital. Draper sees it as an effective tool for providing capital to startups:

“It’s actually easier to invest with bitcoin. It’s so easy to send bitcoin to people, and large amounts of it too.”

Future classes

Boost has conducted three sessions over the past year. Draper says that the accelerator, which is based in San Mateo, California, is only going to have summer and winter sessions going forward. The next session will start in July. He added:

“We want to produce the best quality of companies, that’s always been our goal. That’s why we’re going to do about two [sessions] a year. There will eventually be roughly 30 companies per session.”

Applications for the Boost VC summer session, to be held in July, will open in two weeks. Interested entrepreneurs can sign up for Boost’s mailing list to be notified when the process opens up for entrants.

Boost VC's office space. Source: themuse
Boost VC’s office space. Source: the muse
Draper is excited to see the bitcoin innovation that will happen as a result of Boost VC’s efforts:

“The fact that they solved this problem of being able to make a trusted transaction between two untrusted parties, I think, is a very valuable thing. If it works on that scale, it replaces huge institutions in the middle of transactions.”

“There’s so many things that you can hook into bitcoin,” he added.

Bank of Mexico Restricts Banks from Bitcoin Use, Reports Suggest
Dan Palmer | Published on March 12, 2014 at 19:32 GMT | News, Regulation

Following a number of statements by other central banks regarding the dangers of digital currencies, the Bank of Mexico has issued its first statement on the issue, reports say.

The bank warned the public via a statement on its website about the “the inherent risks of acquiring these assets and using them as substitutes for conventional methods of payment”, though most notable were potential restrictions for domestic financial institutions.

Translations of the statements suggest that financial institutions regulated in Mexico “are not authorized to use or carry out any operations with [digital currencies]“.

Specifically mentioning bitcoin and litecoin, digital currencies, the bank said, “are not legal tender currency in Mexico, since the Bank of Mexico does not issue nor back them”. Furthermore, “their use as a form of payment is not guaranteed, since businesses and anyone else are not required to accept them”.

Like other central bank warnings, the bank felt it necessary to warn users of the perceived links between digital currencies and crime, saying, “In other jurisdictions, they have been allegedly used in illicit operations, including fraud and money laundering”.

Bank restrictions

The restrictions on financial institutions, while potentially indicating that domestic banks may be discouraged from dealing with digital currency businesses, are similar to past statements from China, which barred its payment processors from using bitcoin in December.

However, Ben Peters, CTO at Mexican bitcoin exchange Bitso, is not overly concerned:

“My understanding,” he told CoinDesk, “is that the announcement from the Bank of Mexico is very similar to that made by other countries – in essence consisting of a warning to the public, and a restriction on financial institutions from dealing directly in Bitcoin.”

“After consultation with our legal council, we do not believe this impacts on our business directly, nor would it in principle have any effect on banking relationships with bitcoin-related companies.”

Regulation rumors

Pablo Gonzalez, CEO of Bitso agreed that the statement is nothing to worry about just yet.

“This is the first announcement from the Bank of Mexico regarding bitcoin or other cryptocurrencies,” he said. “They are warning the public, letting them know that the use and acquisition [of digital currencies] can have a high risk of depreciation and monetary losses.”

However, the bank’s wording might hint at things to come regarding cryptocurrencies and regulation. Gonzalez points out that:

“They state that the Bank of Mexico, along with other authorities in Mexico, will closely observe their development and infiltration in the country, and, if deemed necessary, they will look into regulating these virtual assets.”

Global impact

In recent months, there have been a host of similar warnings from central banks around the world, with some recent examples being Cyprus, the Philippines, and Hungary.

The statements from Mexico, while negative, could eventually give way to an understanding. For example, Russia seemed to have banned bitcoin, only to backtrack, saying it was merely investigating how best to deal with digital currencies and avoid their use in crime.

Most recently, the US seemed to be reversing its negative stance, as New York has indicated it will have regulation in place for bitcoin exchanges by the second quarter of 2014.

Lord & Taylor’s Pounce Trial Could Be First Step in Bitcoin Plans
Pete Rizzo (@pete_rizzo_) | Published on March 12, 2014 at 18:16 GMT | Companies, Lifestyle, Merchants, News

A few months have passed since Overstock became, arguably, the most high-profile retailer to accept bitcoin. While only a handful of major brands have followed Overstock’s lead, that doesn’t mean its decision isn’t having an impact.

As evidence, Ryan Craver, senior vice president of corporate strategy at Hudson Bay Co., told CoinDesk that Overstock’s continued bitcoin sales were a key reason he decided to test the waters with bitcoin, albeit through a business partner.

Lord Taylor

On 10th March, it was revealed that Hudson Bay Co., which operates major brands like Lord & Taylor and Hudson’s Bay, would begin accepting bitcoin through omnichannel mobile shopping app Pounce.

Together, Lord & Taylor and Hudson’s Bay have more than 100 locations in the US and Canada.

Founded in 2012, the innovative mobile app allows customers to make purchases simply by scanning their smartphone over images in magazines and catalogs.

Pounce has inked a deal with Coinbase to accept bitcoin on behalf of its extensive list of clients, which include Macy’s, Ace Hardware and Toys “R” Us, among others.


It may surprise many readers to learn, however, that Pounce was encouraged to accept bitcoin by Craver, who was prompted by continued requests from Lord & Taylor and Hudson’s Bay customers.

A bitcoin news follower since mid-2013, Craver suggested that this could be just the beginning of his company’s work in the sector.

“We thought Pounce would be the best potential partner, that way we could figure out how large an audience we could truly have with bitcoin, and from there, make a determination about whether we roll this out on our mobile apps, our core site or even in stores.”

Craver notes that while he’s optimistic, ideas are still in their early stages. After all, Hudson Bay Co. won’t be accepting bitcoin payments directly, but both companies have high expectations for the deliverables this trial will return.

Project goals

Craver told CoinDesk that, his personal interest aside, he is still evaluating the business impact bitcoin could have on his brands. This means that so far he’s been following Overstock’s progress, and that he has had discussions with Coinbase.

However, Craver’s interest can also be seen as part of a larger experiment with omnichannel commerce.

pounce

Announced on 24th January, Hudson Bay Co. has seen what it considers a high level of success from its initial Pounce trial. Craver estimates Pounce users register seven engagements every time they use Pounce to browse its catalogs.

In turn, for Avital Yachin, CEO of Pounce, bitcoin arms his product with another incentive to appeal to early-tech adopters.

How buying works

Speaking to CoinDesk, Yachin was equally excited about brining bitcoin to Pounce, and provided a step-by-step overview of how the buying process will work with his app.

First, he said, users download the Pounce application. From there, they can browse products on the app itself or scan a Pounce-enabled printed catalog to shop or save products for later.

One of the biggest selling points for Pounce, however, is its one-click buying.

“You need to enter shipping and payment information, but this needs to be done only once. Once you have your payment information, you can then connect your Coinbase wallet [...] and you can continue purchasing through the app without typing your payment or shipping information again.”

Success so far

Yachin declined to provide hard figures for how well Lord & Taylor and other merchants are attracting bitcoin buyers, but indicated that a high percentage of new users are downloading Pounce and then connecting their Coinbase wallets to the app.

Said Yachin: “So far, we’re pretty happy with the results.”

Craver affirmed that this could be just the beginning of his company’s work with bitcoin as well.

“I think down the line, if we feel the attraction, we’ll need to evaluate it as a potential payment method.”

Inside North America’s ‘$8m-a-Month’ Bitcoin Mining Operation
Pete Rizzo (@pete_rizzo_) | Published on March 12, 2014 at 17:01 GMT | Companies, Mining, News, Technology

In a perfect world where mining difficulty was lower, bitcoin prices were higher and a warehouse full of mining rigs could be run by one man, Dave Carlson, the owner of North America’s largest bitcoin mining operation, could be earning $8m a month.

However, just like reports of bitcoin’s death, reports of Carlson’s personal earnings are, unfortunately for him, exaggerated.

With the mainstream media continuing to paint bitcoin as a modern-day gold rush, Carlson’s rags-to-riches story has been of particular interest, even if it hasn’t always been put in the proper context.

To be fair, though, estimates of his potential earnings don’t seem unlikely when you consider he went from driving a $300 Honda to presiding over a million-dollar company in just under a year, and that bitcoin mining is still widely misunderstood.

Still, when the facts are examined, Carlson’s business is no less impressive.

To get to the truth of his story, CoinDesk spoke to Carlson about the increased attention his Washington-based warehouse operation (he won’t reveal the exact location) is receiving, how he built the company and how it earned $8m a month when bitcoin prices were near their peak.

Carlson summed up his transition, saying:

“I used to spend long hours connecting cables, assembling rigs and configuring servers. I now have a core technical team that covers facilities, assembly, deployment, optimization and management. I spend most of my time working on the larger picture issues the company faces regarding future growth and operations.”

Of course, that explanation doesn’t tell the whole story.

Humble origins

Carlson said he first got involved with bitcoin mining when he started an online mining supply company MegaBigPower “like most bitcoin miners”, from his basement. From there, he said his ambitions evolved with his interest.

Carlson credited his current operation’s success to the bitcoin mining community, who tipped him off that he lived near some of the cheapest power in the country and helped guide him toward large-scale industrial mining.

BusinessWeek indicates that his warehouse is now powered by an array of Bitfury-designed rigs. Bitfury, an influential and still largely anonymous chip designer, was a key early supporter of Carlson as well.

However, while technology played a role, Carlson also needed capital, which he would receive in part from Leszek Rychlewski, of Poland-based scientific research center BioInfoBank, who he credits as integral to his success.

“[Rychlewski] has provided incredible guidance as well as funding along the way. If it weren’t for his bold risk taking and generosity, I wouldn’t have had the chance to take this concept into reality.”

Constructing the warehouse

Though Carlson now has a successful business to his name, this wasn’t always the case. He recalls that when he first began his mining operation he had to share an office with 30 GPU rigs for mining litecoin – not exactly an ideal scenario given their heating and cooling needs.


WP_000805

Now, Carlson looks back on this test of will as his research and development stage.

“LTC was $2 and I was selling it all to pay rent, but I needed to work in a real world setting to test my math around power and cooling requirements. I learned enough to know I needed to move to a different setting.”

Soon, he upgraded to a 2,000-square-foot warehouse space powered by 30 tons of air conditioning. In his current space (which he estimates is 10 times larger) Carson upgraded to fans in order to pull air out of the building, citing problems with AC units. He now estimates these fans move 150,000 cubic feet per minute.

In case you’re not familiar with the terminology, Carlson has an anecdote that paints the picture of this type of fan power.

“Before we added more intakes, you could barely open the door, and the insulation was literally being sucked off the ceiling,” he said.

Managing structure and supervision

Carlson indicated that his operation also thrives on a network of partners, including investors BioInfoBank and PicoStocks, which manufacture the chips and boards. Explained Carlson:

“My business model is to do construction and hosting, so I take very little risk up front in return for a revenue share. I sell shovels basically.”

He is also helped by large internal tech team that has optimized his warehouse topography, an important factor given that servers can easily become overloaded. Further, he uses Linux and open-source monitoring software to keep his eye on key processes that could indicate systemic problems.

Said Carlson: ”My biggest fear has always been having a silent, slow and undetected leak that could result in a large loss over time.”

Another tip Carlson revealed is his use of simple board design to keep production costs low. For example, his rigs do not require liquid cooling, and he doesn’t use fans on the boards, stating that everything is cooled by air movement.

“Due to these factors we expect to remain competitive and be able to mass-deploy until the market pushes margin-per-chip down closer to a few dollars. This could happen faster than we would like, so of course we work on a better chip.”

Carlson estimates that the operation costs more than $1m, and now involves 15 people. The end result was 1 petahash of mining power that is fully paid off.

Increased collaboration

Of course, with interest in bitcoin on the rise, Carlson knows he needs to keep his operation sharp to maximize profit, though he sees less competition and more collaboration.

For his part, this is an initiative that Carlson is willing to lead:

“I’m not well connected to the other big miners out there, but I hope to establish an industrial mining consortium this year that will seek to educate and set agenda, especially with respect to regulatory efforts.”

As for repeating his model for another alternative currency, Carlson isn’t convinced there’s a clear market leader.

“Until another coin is created that has its own unique value proposition, the alts will remain as transfer mechanisms for mining bitcoin. If any of the alts really start to pop, you can expect we’ll be building a mine for it.”

Chinese Exchange Huobi to Commence Trading Litecoin
Jon Southurst (@southtopia) | Published on March 12, 2014 at 15:31 GMT | Altcoins, Companies, Exchanges, Litecoin
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China’s busiest bitcoin exchange, Huobi, has announced it will start trading litecoin on 19th March, however, the company’s users can begin uploading litecoins to their accounts starting today.

Huobi is said to be finalizing tests for implementation before regular trading commences.

The litecoin price on BTC-e took a sudden leap earlier today – very likely as a result of the Huobi announcement.


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Huobi co-founder Jun Du said the company only considered implementing litecoin after careful deliberation and would provide the same business support and services it already does for bitcoin.

A company user survey in January showed that about 20% of bitcoin investors also had money in litecoin. Furthermore, the frequency of searches for ‘litecoin’ as a keyword on Chinese search engine Baidu showed that the currency had achieved acceptance by a large number of investors in China.

When litecoin is traded on Huobi, Du said, it will have a chance to shed its ‘shanzhai’ (loosely translated as ‘cheap copy’) image in the minds of Chinese investors.

Explained Du:

“Huobi as a platform has a duty to be responsible to its investors to be open, fair, safe and professional in its operations, but also in picking out quality products for its users to trade.  Thoughtlessly including products that are not high quality would be irresponsible to our users.

An analogy is how more and more investors have quit the local A-share equities market in favor of the more selective and regulated Hong Kong and New York stock exchanges to better protect their economic interests.

Because Litecoin has achieved acceptance by a large number of investors, has good liquidity and value, and has been able to withstand the tests of the markets, Huobi has decided to launch litecoin trading.”

Huobi’s move follows BTC China’s similar decision, announced a week ago, which implemented litecoin trading “effective immediately” with 0% fees, and trumpeted the fraternal relationship between the company’s CEO Bobby Lee and litecoin inventor Charles Lee.

Du also mentioned something litecoin and other altcoin proponents often claim: that competition in the cryptocurrency field is both welcome and healthy.

“Bitcoin’s open source nature,” he said, “means that it is a technology that wishes to be improved upon, and welcomes progress, [and its aim is] to change the entire global financial system to build an open, decentralized and safe currency system.”

“Digital currencies so far are still embryonic in their development, and bitcoin has pointed the way. However, digital currency systems need competition, and fear of competition will only make room for flaws, and in fact is antithetical to the open-source nature of bitcoin.”

As to whether this means Huobi will support other digital currencies in future, Du said the options were wide open.

“Huobi’s goal is to be a ‘professional digital currency exchange platform’,” he said. “So as long as a currency has enough liquidity and sufficient value, our operational department will consider including it on our platform. As soon as the market is sufficiently mature, we will put it online for trading on Huobi.”

Under pressure

Litecoin will now be traded on some of the world’s largest cryptocurrency exchanges. The late Mt. Gox was long said to be working on a litecoin implementation, and BTC-e has always been the coin’s most popular market.

Singapore-based payment processor GoCoin announced the altcurrency as an option for merchants in January.

Pressure will now be increased on Slovenian exchange Bitstamp to introduce alternatives to bitcoin, which has been on the cards for around a year now.

There is also Coinbase, the US-based bitcoin converter and payment processor that has actually employed Charles Lee since July last year.

Huobi’s news was well-received by litecoin fans on forums like reddit and Litecointalk. Despite the attention heaped upon dogecoin lately, litecoin remains the world’s third most valuable cryptocurrency (after Ripple’s XRP) with a current market cap of $440,913,597.

Accessible coin

Litecoin is often touted by supporters and its creator as ‘silver to bitcoin’s gold’, the rationale being its larger overall quantity and a lower value making it more psychologically accessible to new investors.

One litecoin is now worth 0.027 BTC, or $17.16. Despite bitcoin’s Satoshi-level divisibility of a millionth, the thought of buying one whole coin for less than $20 still carries a certain appeal.

It is also accepted by a number of merchants and charities, including Songs of Love and the Go Vap orphanage in Vietnam.

This story was co-authored by Rui Ma and Jon Southurst.

Goldman Sachs: Bitcoin Isn’t a Currency But Underlying Tech Holds Promise
Nermin Hajdarbegovic | Published on March 12, 2014 at 15:58 GMT | Analysis, Companies, Investors, News

A new Goldman Sachs report on digital currencies has found that while bitcoin is not a practical currency, its underlying ledger technology could hold promise.

The top-of-mind report, entitled ‘All About Bitcoin’, appears to have been compiled recently and it is possible Goldman Sachs commissioned it following the highly publicised Mt. Gox collapse.

The report outlines the basics, citing bitcoin’s advantages and shortcomings, backed by statements from critics and supporters.

The main difficulties facing bitcoin, according to Goldman’s Dominic Wilson and Jose Ursua, include the notion that it is not a very good store of value, a fact which will present a major roadblock to its adoption as a medium of exchange.

In addition, Head of Goldman Sachs commodities research Jeff Curie believes bitcoin’s attributes make it a commodity rather than a currency.

Bitcoin could reduce costs but …

However, Goldman Sachs’ IT Services equity analyst Roman Leal, estimates that the use of bitcoin could save up to $200bn a year, based on current trading volumes.

He also cautions that direct comparisons of different costs might be misleading, as bitcoin’s cost advantage could be diminished if “conventional players” are forced to compete.


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His concerns are echoed by those of security specialists and scholars. Improving security will add more expenses and simply maintaining the block chain could become a lot more expensive and demanding. Currie points out that the size of the block chain has increased to 15GB from 10GB in six months.

More regulation, more security and more hardware is needed – and none of it comes cheap.

The Libertarian model doesn’t work

Eric Posner, Professor of Law at the University of Chicago, believes bitcoin would not work as a substitute for fiat currency, as governments need to control the money supply.

“One of the most appealing aspects of a decentralized currency for some people – and even perhaps a motivation for its creation – seems to be freedom from government or central bank control, as reflected in the libertarian mindset,” Posner points out.

“But it is wrong to think that people would be better off if we lived in a world in which the government did not control the money supply. Control over the money supply is an extremely valuable attribute of government that allows it to navigate and minimize or avoid economic problems like recessions or, maybe, asset bubbles.”

Posner argues that monetary policy can be misused, but then again governments can misuse the military too. It is a simple argument – if a government is planning to harm its own people, it may as well use physical repression to do so, not money.

He also points out that bitcoin is not completely autonomous, as it relies on the Bitcoin network. People who operate the network can change the money supply. Most of them are not economists or monetary experts.

“I find that unsettling and I think most people would feel the same way,” Posner adds.

Posner also points out that a single world currency simply wouldn’t work, as it would prevent governments from using monetary policies at their own discretion. He cites the Eurozone as a good example – what works for Germany doesn’t exactly help Greece and vice versa.

Bitcoin isn’t a currency, but it has plenty of potential uses

Goldman Sachs market researcher Dominic Wilson and Jose Ursua pointed out the main ways bitcoin differs from standard fiat currencies, and why they don’t consider bitcoin a ‘currency’ in the true sense of the word.

However, Wilson and Ursua also point out that bitcoin shows more promise in terms of its payments technology than as a stable store of value, which is what many bitcoin entrepreneurs have been saying all along.

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The researchers concluded that bitcoin could have a significant impact in terms of innovation on payments technology and it might force existing players to adapt to it or co-opt it.

“The fundamental obstacles to bitcoin being used more broadly in the payments system are arguably not insurmountable, though connections with the conventional banking  system are ultimately essential to its functioning,” the researchers argue.

“The absence of derivative markets makes it harder to manage and hedge risk around bitcoin’s value, but it is possible to imagine how those could ultimately develop.”

Volatility remains the biggest concern, as the volatility of bitcoin exceeds that of other currencies by an order of magnitude. Goldman Sachs found that the volatility of bitcoin stands at 108.1%, roughly 20 times higher than major national currencies like the dollar and euro. Interestingly, Goldman Sachs researchers used CoinDesk data to gauge bitcoin volatility.

Imact on payments industry, potential savings

Goldman Sachs IT Services analyst Roman Leal also believes existing payment providers will have to adapt or co-opt bitcoin, in what he describes as “co-opetition.”

Leal points out that the bitcoin network could solve some of the pain points involved in the current payments system, but only in theory. Bitcoin could make money transfers as seamless as email, businesses could have the same fees regardless of purchase amount and travellers would not have to pay cross-border fees.


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Leal also looked into hypothetical savings and came up with very encouraging numbers. Based on 2013 volumes, up to $200m could be saved in remittances, retail and e-commerce. The biggest savings would come to remittances, with an average fee of 8.9%.

“Bitcoin gateway service providers such as BitPay and Coinbase, which enable merchants to accept bitcoin payments, typically charge a fee of about 1%. At face value, the annual net savings if all electronic payments were conducted in Bitcoin could potentially add up to over $150 bn in retail point of sale and $12bn in e-commerce fees per annum based on global 2013 purchase volume.”

“Using this math, merchants generating $1 million in annual purchase volume would save at least half in payment processing fees by accepting bitcoin, with small merchants even better off,” Leal concluded.

Consumers could also see plenty of savings. Money transfer networks like Western Union tend to charge high fees of up to 10%, so bitcoin transactions could reduce fees tenfold. In addition, reducing fees could allow merchants to transfer part  of their savings to consumers.

However, Leal also cautions that the bitcoin cost advantage might not last. Just as merchants could pass their savings on to consumers, bitcoin providers might be forced to pass the expenses of more regulation and security down to their users.

Balanced and mostly positive

In addition to its own researchers and scholars, Goldman Sachs also tapped a number of bitcoin advocates and critics, as well as industry veterans. Coinbase’s Fred Ersham outlined how bitcoin payments operate and how bitcoin operators make their money.

IT specialist Ken Hess criticised the “pie-in-the-sky” ideology pushed by some bitcoin advocates, but even he admitted bitcoin could be a decent payments platform.

On the whole, the report is quite extensive and it merely reiterates the argument that bitcoin could complement fiat currencies rather than replace them. It also promotes the idea that Bitcoin could be a viable and cost-effective payments platform.

Turning the hypothetical ‘could’ into reality is something else entirely. Goldman Sachs envisions a future with more regulation and more security, but more regulation is not something that many in the bitcoin community desire at this point.

However, institutional investors will not get on board without a bulletproof regulatory framework and the collapse of Mt. Gox is bound to silence many critics.

Inside Bitcoins NYC Names Circle, Blockchain CEOs as Keynote Speakers
Pete Rizzo (@pete_rizzo_) | Published on March 12, 2014 at 14:00 GMT | Events, News

Inside Bitcoins New York has announced its keynote speakers for this year’s conference to be held from 7th to 8th April at New York’s Javits Convention Center.

Headline speakers at the event will include Circle’s Jeremy Allaire, who will give the opening keynote; and Blockchain‘s Nicolas Cary, who will present the afternoon keynote on the 7th April.

In addition to these notable speakers, a second event track has been added to day two of the event, which will be dedicated to exploring the financial issues associated with bitcoin.

Alan Meckler, CEO of event organizer MediaBistro, spoke to CoinDesk about the latest additions to the event, indicating that they provide further evidence of his organisation’s dedication to putting quality first.

“We don’t skimp on the intellectual side. We’re building a seminar of high intellectual capital first, and the exhibits follow.”

Also added to the event’s lineup was SecondMarket’s Barry Silbert, who is slated to speak as part of a panel discussion on Wall Street on 8th April; and the Bitcoins Trading Cafe, sponsored by Bitcoin Center NYC, which will provide a relaxed area for bitcoin buyers and sellers to interact through the conference.

Return to New York

The event marks the second time Inside Bitcoins will hold an event in New York, after its debut in July of last year. That event ran for one day and garnered more than 150 attendees and four exhibitors, Meckler said.

By comparison, this year’s Inside Bitcoins New York will mirror the industry’s growth over the last year. Meckler estimates that close to 1,000 attendees could be present, with an additional 1,500 to 2,000 people touring the exhibits.

Still, despite the smaller turnout, Meckler was quick to recall the importance of last year’s event to his own personal evolution on bitcoin:

“I just could not believe the enthusiasm and interest that I was seeing, and I’ve been in the trade show and seminar business for almost 40 years. The closest thing I’ve ever seen was the beginnings of the Internet.”

New programs added

The initial events planned for Inside Bitcoins can already be seen on the event website, but new attractions have also been announced.

These new conference sessions will include:

“A Startup Perspective: Building a Trading Platform from Scratch”, to feature Coinarch’s Luke Jones
“Bitcoin Merchant On-Ramp”, helmed by GoCoin founder Steve Beauregard
“Bitcoin in the Cloud”, hosted by CloudHashing COO Benjamin Gorlick
“Bitcoin Comes to Mainstreet”, featuring eGifter CEO Tyler Roye
“Beyond Bitcoin: BitShares Delves Into Digital Shares”, by BitShares.org CEO Daniel Larimer
“Megawatt Mining”, by Data Center Crypto-Consultant Eric Doricko.
Continued growth

Though a second track may seem like a big step for the show, Meckler said this will pale in comparison to what Inside Bitcoins is likely to feature in 2015, when he predicted as many as four or five tracks could be running simultaneously. Furthermore, Meckler said next year could feature as many as 100 to 200 companies in 100-square-foot booths.

Speculation aside, tickets are still available for this year’s event, although early-bird prices will be gone soon.

CoinDesk readers can get a 20% discount on full conference passes by entering the code BCSponsor20 at the checkout.

Disclosure: CoinDesk is a sponsor of Inside Bitcoins New York.

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Travel Keys Lets You Pay For 5000+ Luxury Villas With Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on March 12, 2014 at 13:05 GMT | Lifestyle, Merchants, News

Travel Keys, a travel broker that operates a network of more than 5,000 luxury villas in the Caribbean, Europe and around the world, is now accepting bitcoin as a payment method.

Travel Keys announced the decision on 7th March, becoming the latest luxury villa business to accept digital currency.

Bobby Gibson, the company’s CEO, spoke to CoinDesk about the decision, noting that as an avid follower of “anything and everything ‘tech’”, he’s been monitoring bitcoin for a few years.

From there, all it took was demand from guests. Said Gibson:

“Nothing gives our team more satisfaction than telling our guests ‘Yes!’. When the request from one of our international clients was received to pay for their villa in bitcoins, we were more than happy to oblige.”


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Founded in 1991, Travel Keys indicates that its travel professionals and partners handpick and personally inspect each luxury villa on its network. Booking prices range from a few hundred dollars to upwards of $5,000 a night.

Once there, guests are provided concierge services, local hosts and a team of support advisors that have earned Travel Keys respectable marks from travel review services like TripAdvisor.

Selecting a service

Gibson said that Travel Keys has opted to ink its merchant processing deal with San Francisco-based Coinbase. Using this service, Gibson’s funds are converted into whatever currency his international homeowners require.

The result, Gibson suggests, is savings along the payment chain. Guests get fast, low-cost transactions, while any operational savings reaped by Travel Keys is reinvested in the customer experience.


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Despite these benefits, though, Gibson said widespread bitcoin adoption in the travel industry isn’t yet likely. As an example, he named the most recent insolvency of Japan-based exchange Mt. Gox as an event that could push business away in the short term.

However, he was still optimistic about the future:

“I envision the bitcoin community rallying together to address these incidents, perhaps putting preventative exchange regulations in place, and BTC becoming a mainstream currency that travel companies would be well advised to embrace.”

More currencies possible

Though Gibson is just started accepting bitcoin, he indicated that he’s open to taking other digital currencies as well.

“If a client requests it, and it’s a proven reliable form of transmitting funds at minimal cost to the guest and/or the homeowner then I don’t see why not,” Gibson said.


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As for the success of the program, Gibson was unwilling to provide details on his bitcoin buyers and their transactions.

Part of the value in booking with Travel Keys, he said, is the confidentiality you enjoy.

Perseus Telecom Launches Digital Currency Initiative, Integrated Exchange
Nermin Hajdarbegovic | Published on March 12, 2014 at 13:28 GMT | Companies, Exchanges, News, Technology

Perseus Telecom has launched a new initiative with the aim to provide industrial-strength security for bitcoin exchanges, e-commerce, online gaming and multimedia sites.

Perseus started accepting bitcoin payments just last month. The company is a provider of high-speed communications used by hedge funds, trading firms and media organisations in major financial hubs from London to Tokyo.

The company’s Digital Currency Initiative (DCI) is being introduced just weeks after the Mt. Gox failure and Perseus seems to think that no crisis should ever go to waste. In fact, it is hoping to capitalise on bitcoin security concerns.

In addition to the initiative, Perseus and Atlas ATS also announced the launch of a globally integrated bitcoin exchange.

Mt. Gox is a learning opportunity

Perseus Telecom EMEA head of business development Carl Weir described the Mt. Gox collapse as a “learning opportunity.”

“The goal of DCI is to make sure that there is financial institution level security, KYC, and trading available and secure in multiple regions, hence Perseus’ role in this.”

Perseus points out that other bitcoin exchanges view the Mt. Gox failure as the result of a new industry undergoing a shakeout. Failures are not uncommon in immature, unregulated markets or technologies, it adds.

Perseus has teamed up with Atlas ATS and Strevus Inc. The latter hopes create one or two US-based currency exchanges. Appropriately, New York State announced that it would start accepting applications for digital currency exchanges earlier this week.

Security should be a top priority

The Mt. Gox collapse is viewed by many as the end of an era. As the bitcoin ecosystem matures, it is likely that regulation and security will play a bigger role, and this is exactly where Perseus sees a market opportunity.

“With DCI, we’re ensuring that anti-money laundering and know your customer rules are in place, and can be reported to regulators should they require it. In addition, bitcoins should be placed in cold storage, so that users whether financial institutions or individuals, don’t lose their bitcoin,” said Weir.

“If someone hacks the exchange site, there’s a layer within the trading environment which automatically rejects inconsistent code, which means it doesn’t get to the trading system.”

Atlas ATS is contributing multi-tiered software that allows it to control access and limit exposure on all levels. Even if an attacker penetrates the web tier, that won’t be enough to interfere with the core matching engine, which is disconnected from servers that actually store bitcoins. Most bitcoin holdings will be kept in cold storage.

First exchange officially launched

Perseus and Atlas ATS aren’t wasting time. The companies have announced the launch of a globally integrated bitcoin exchange in New  York, Hong Kong and Singapore. Their goal is to facilitate bitcoin trading by large financial institutions. Perseus CEO Jock Percy said:

“Now, institutional investors and banks can see that there are known players with the right pedigree engaged in bitcoin.”

The Wall Street Journal points out that Perseus’ high-bandwidth lines are used to connect securities exchanges to execution platforms around the world. Percy highlights that the company’s clients have expressed demand for such services, but they were concerned about regulatory compliance and risk.

Percy also took a swipe at existing bitcoin exchanges, saying most of them reside on cloud-based servers that are inherently glitchy, while the Atlas ATS platform will be located in a robust, dedicated network.

Soft launch

The Atlas ATS platform has already been soft-launched and it handles about 10,000 transactions a day. Atlas ATS CEO Shawn Sloves said integration across multiple locations will improve liquidity by creating a global order book that circumvents the existing bitcoin trading environment.

He described the current environment as regionally focused and fragmented and said it was not “Wall Street grade.”

Sloves expects daily trading to hit 100,000 transactions by the end of the year and he is basing his prediction on demand expressed by institutional clients, not bitcoin enthusiasts. This is what should set the platform apart from existing exchanges.

The big fish are coming and the Mt. Gox collapse is just blood in the water.