Huobi CEO Addresses ‘Fake’ Trading Volume Rumours
Rui Ma (@ruima) | Published on March 11, 2014 at 12:08 GMT | Asia, Exchanges, News
Rui Ma is an early-stage investor in technology companies with the global accelerator program and seed fund 500 Startups. Residing in Beijing, she is an active member of China’s bitcoin community.
Some bitcoiners might still remember when BTC China was the dominant bitcoin exchange in China. Well, those days are long gone.
These days, newer exchanges Huobi and OKcoin regularly top the charts for trading volume. Monday, for example, their 24-hour volumes are at 106,942 and 126,973 respectively, third-place CHBTC is at 35,349, while BTC China lags far behind at 4,344.
Huobi, in particular, has garnered more international attention than OKcoin, perhaps due to its inclusion on the Bitcoinity.com charts and the grumblings that OKcoin juiced its trading data (an accusation that has been levied at Huobi as well).
Last Friday afternoon, I caught up with Leon (Lin) Li, the CEO and founder of Huobi, for some insight into why he thinks his platform has so quickly ascended the ranks of the Chinese exchanges, and to discuss his future plans for the company.
Huobi is a well-known name in China and Li is often interviewed there, but due to the fact that neither he nor his co-founder are particularly fluent in English, they are rarely featured in Western media, save for a few correspondences that he’s had with reporters over email.
Though I was introduced to Li a few months back, when the company was raising angel funding, Friday was my first time meeting him face-to-face. Li attended Tongji University as an undergraduate and Tsinghua University for his Masters, graduating sometime in 2007.
Both are top universities in China, with the latter being consistently the top-ranked engineering university in the country and the alma mater of a large number of influential Chinese internet entrepreneurs. His concentration was in electronics automation. He then worked for a few years in Oracle’s R&D department in China, and met co-founder Jun Du through friends.
Jun worked at Discuz!, an internet forum software company that was acquired by Tencent in 2010. Before starting Huobi, Li had taken a stab at both the social networking and group-buying business models, but, Huobi, it seems, is his first real venture of note. Li first got into bitcoin in mid-2011, but didn’t think of doing any business there until 2013.
He began development early that year, and raised angel funding from notable Chinese angel investment fund Zhen Fund (headed by celebrity superangel Xu Xiaoping) in Q3. Zhen Fund led the round, and was joined by Discuz! founder Zhikang Dai, who is now the General Manager of Tencent’s e-commerce business line.
They are also due to announce a large Series A funding, which Li tacitly acknowledged to be true, but refused to give any more details.
Trade volume questions
I immediately asked Li about the volume of bitcoin trades that are made on his exchange, which has been written about before and has been openly questioned by many in the community, both domestic and overseas.
Similar to previous conversations, he emphatically denied any faking of trading data, and noted once again that the zero-transaction fee structure of his platform makes it pointless to compare trading volumes against his competitors, particularly those who still charge a fee.
When I asked him to estimate how much the lack of fees might distort the trading volume, he said that he could easily see a “5-times increase” in trades because high-frequency traders can make profits off of much narrower spreads.
Instead of just volume, Li believes that customers should evaluate exchanges based on their liquidity, depth, and the size of the company. At least these are the metrics that he is measuring Huobi against competitors:
“We have been able to excel on all of these fronts, and coupled with our focus on marketing and customer service, we think that we will continue to give our competition a good run for their money.”
Why no fees?
So what is the reasoning behind Huobi’s commitment to a policy of “zero transaction fees, forever” on the platform?
“Zero transaction fees is the future,” Li said. According to him, the freemium business model is the new norm of the twenty-first century, and no industry, not even financial services, is safe from its disruption.
In fact, he says that there are now traditional securities brokers in China who have launched no-fee services, such as this one by Tencent and Sinolink Securities, and he predicts that in three years, the no-fees model will become the norm.
Basically, Li thinks that a platform will need to make its revenues from value-added services rather than trading, which he sees as a basic service and a commodity that should be free for consumers.
He was emphatic that even as Huobi expands internationally, they will continue to offer free trades. Speaking of international expansion, Li thinks that Huobi will be ready to launch into overseas markets sometime in the second half of this year, probably beginning with support for the US dollar markets.
Prior to this he will be focused on vertical expansion, and is gearing up to launch several of those value-added products he believes are the key to his business model. He’s ready to partner with bitcoin-related services that might benefit from being on his platform, and even offers to invest in promising startups as a strategic investor, either in bitcoin or fiat.
Office visit
When I visited Huobi’s office, in the Shangdi area of Beijing’s Haidian district near tech giants Baidu and Lenovo, Li had just come back from a visit with senior bankers who also lecture at the PBC School of Finance at Tsinghua University, the premier institute of learning for China’s policy bankers.
The team was also getting ready to move into its new offices (just from one wing of the enormous office complex to another) as it had quickly grown to over 50 employees. Huobi prides itself on customer service – and now boasts over 20 customer service personnel.
When I asked Li how he was securing the Huobi platform against hackers and other attackers, he said that the team is extremely focused on security and is constantly monitoring potential loopholes in its systems.
He has third-party cybersecurity firms under contract, such as some of the ones listed here, constantly evaluating for potential breaches. Li says he would rather sacrifice some speed for better safety, as in the case of duplicate deposit and withdrawal requests, which the system automatically will prompt for human/manual verification. He also gets internal audits of their books at noon on a daily basis, weekends included, to make sure “everything balances.”
And of course, he only has 2% of Huobi’s funds in its ‘hot wallet’ and 98% in cold storage.
While this might mean that it might take longer for some users to retrieve bitcoins, Li would rather be safe than sorry. Li told me that things have “definitely cooled down” from the height of the bitcoin fervor in China in November 2013.
While he didn’t divulge the exact number, he did say that new user registrations are one-third of what they were four months ago. When I asked him what he thought the government’s future policies on bitcoin might be, he gave a laugh and said:
“You and I both know there is no point in guessing. The government will do what it will do, and it is impossible to predict. And you see too that other countries are also taking this wait-and-see approach.”
I would have to agree with him. There is no telling where the Chinese government will go with regards to cryptocurrencies, and at least for Huobi, whose ambitions reach far beyond Chinese borders, it may not matter that much.
Topic: BITCOIN NEWS EVRYDAY! From multiple sources. - page 15. (Read 51244 times)
Big Fish Games to Integrate Bitcoin Payments on all Titles
Nermin Hajdarbegovic | Published on March 11, 2014 at 11:01 GMT | Bitcoin Gambling, Merchants, News
Big Fish Games has teamed up with Coinbase to bring bitcoin payments to its extensive line-up of casual games.
This small, private company is a relatively big player in the casual gaming arena and is the publisher of the Mystery Case franchise and Big Fish Casino, along with over 3,000 casual games from more than 500 developers.
Although the company isn’t as big as Zynga, it serves over 1,500,000 downloads a day and it has 700 employees.
Big Fish allows users to try the games before they make the purchase and many of its games allow traders to buy and sell virtual items.
Cutting costs
While it may be smaller than Zynga, the bitcoin rollout announced by Big Fish is quite a bit more comprehensive.
Zynga limited bitcoin support to FarmVille 2 and a few other titles, while Big Fish plans to allow bitcoin payments for all 3,000 titles in its portfolio. Furthermore, consumers will be able to make in-game purchases with bitcoin.
This is what sets it apart from Zynga, as the rollout is not a test run, reports Venture Beat. Zynga also opted for BitPay over Coinbase as its payment processor of choice.
Big Fish Games’ founder and Chief Executive Officer Paul Thelen pointed out that about 8% of the company’s gross revenue is eaten up by transaction fees.
The integration of bitcoin payments is aimed to bring this figure down, as Coinbase demands no fee on the first $1m of transactions, and just 1% thereafter.
The fees are clearly a big deal, as the company generates half of its revenue through its e-commerce system. Big Fish netted $266m of revenue last year.
Enthusiastic employee
Oddly enough, it appears that the company’s decision to look into bitcoin came about after a single employee started advocating for it. One of the company’s engineers is apparently a bitcoin enthusiast and it appears that he made a rather good case for the digital currency.
As far as in-game purchases go, the rollout will apparently be limited to Big Fish Casino and a couple of other games for the time being. However, all the company’s games will be available for purchase with bitcoin.
Interestingly, the company considered reinvesting the savings into bitcoin-related projects, but it eventually decided to stick to its core business and keep churning out casual games.
Using bitcoin for purchases is relatively simple, and Big Fish has provided a step-by-step video guide on YouTube too:
https://www.youtube.com/watch?feature=player_embedded&v=PWGE2MtaaVc
Nermin Hajdarbegovic | Published on March 11, 2014 at 11:01 GMT | Bitcoin Gambling, Merchants, News
Big Fish Games has teamed up with Coinbase to bring bitcoin payments to its extensive line-up of casual games.
This small, private company is a relatively big player in the casual gaming arena and is the publisher of the Mystery Case franchise and Big Fish Casino, along with over 3,000 casual games from more than 500 developers.
Although the company isn’t as big as Zynga, it serves over 1,500,000 downloads a day and it has 700 employees.
Big Fish allows users to try the games before they make the purchase and many of its games allow traders to buy and sell virtual items.
Cutting costs
While it may be smaller than Zynga, the bitcoin rollout announced by Big Fish is quite a bit more comprehensive.
Zynga limited bitcoin support to FarmVille 2 and a few other titles, while Big Fish plans to allow bitcoin payments for all 3,000 titles in its portfolio. Furthermore, consumers will be able to make in-game purchases with bitcoin.
This is what sets it apart from Zynga, as the rollout is not a test run, reports Venture Beat. Zynga also opted for BitPay over Coinbase as its payment processor of choice.
Big Fish Games’ founder and Chief Executive Officer Paul Thelen pointed out that about 8% of the company’s gross revenue is eaten up by transaction fees.
The integration of bitcoin payments is aimed to bring this figure down, as Coinbase demands no fee on the first $1m of transactions, and just 1% thereafter.
The fees are clearly a big deal, as the company generates half of its revenue through its e-commerce system. Big Fish netted $266m of revenue last year.
Enthusiastic employee
Oddly enough, it appears that the company’s decision to look into bitcoin came about after a single employee started advocating for it. One of the company’s engineers is apparently a bitcoin enthusiast and it appears that he made a rather good case for the digital currency.
As far as in-game purchases go, the rollout will apparently be limited to Big Fish Casino and a couple of other games for the time being. However, all the company’s games will be available for purchase with bitcoin.
Interestingly, the company considered reinvesting the savings into bitcoin-related projects, but it eventually decided to stick to its core business and keep churning out casual games.
Using bitcoin for purchases is relatively simple, and Big Fish has provided a step-by-step video guide on YouTube too:
https://www.youtube.com/watch?feature=player_embedded&v=PWGE2MtaaVc
Bitcoin ATM Company Refused Account by Bank of Ireland
Kadhim Shubber (@kadhimshubber) | Published on March 11, 2014 at 10:08 GMT | Bitcoin ATM, Companies, Europe, News, Regulation
Ireland’s first bitcoin ATM company suffered a setback yesterday as the Bank of Ireland rejected their application for a bank account.
In addition, the Dublin cafe where Ireland’s first ATM was due to be installed pulled out citing “complications” in hosting the machine.
BitVendo, an Irish bitcoin ATM provider, had intended to launch their first ATM at Hippety’s Café this week, but have now relocated to a nearby electronics store GSM Solutions, where they had been testing the machine. BitVendo’s CEO Megan Dolan said:
“We were only informed as we tried to install the machine. We were told staffing became a concern, it came as a massive shock to us, with no prior notice. We think there is a lot more to it, but can’t expand.”
The sudden change of plan came alongside another blow as the Bank of Ireland told BitVendo they would not allow them to open an account due to “the nature of your business”. Dolan clarified:
“[The bank] informed me that: ‘Your account application has been rejected due to the nature of your business. We’re not comfortable with it.’”
Up the ladder
Dolan says their business advisor at the Bank of Ireland claimed instructions came from on high.
Alan Donohoe of the Irish Bitcoin Foundation, who has been working with Dolan, corroborated BitVendo’s version of events, claiming the business advisor said: “The people above me are rejecting the application due to the nature of [the] business.”
Donohoe said it was the first time he had encountered an Irish bank rejecting a business because it was involved with bitcoin and called on Irish banks to embrace, not reject bitcoin:
“We urge banks in Irelands to consider the future and how bitcoin can help the economy. Its not about competing with government currency, its about the technology and how it can spur growth.”
In tweets to BitVendo, the Allied Irish Banks, one of the “big four” in Ireland, said that in contrast to the Bank of Ireland they do allow bitcoin businesses to open accounts:
Dolan confirmed that the company would attempt to open an account with AIB sometime today.
CoinDesk is monitoring this developing story, and will post updates as they become known.
Kadhim Shubber (@kadhimshubber) | Published on March 11, 2014 at 10:08 GMT | Bitcoin ATM, Companies, Europe, News, Regulation
Ireland’s first bitcoin ATM company suffered a setback yesterday as the Bank of Ireland rejected their application for a bank account.
In addition, the Dublin cafe where Ireland’s first ATM was due to be installed pulled out citing “complications” in hosting the machine.
BitVendo, an Irish bitcoin ATM provider, had intended to launch their first ATM at Hippety’s Café this week, but have now relocated to a nearby electronics store GSM Solutions, where they had been testing the machine. BitVendo’s CEO Megan Dolan said:
“We were only informed as we tried to install the machine. We were told staffing became a concern, it came as a massive shock to us, with no prior notice. We think there is a lot more to it, but can’t expand.”
The sudden change of plan came alongside another blow as the Bank of Ireland told BitVendo they would not allow them to open an account due to “the nature of your business”. Dolan clarified:
“[The bank] informed me that: ‘Your account application has been rejected due to the nature of your business. We’re not comfortable with it.’”
Up the ladder
Dolan says their business advisor at the Bank of Ireland claimed instructions came from on high.
Alan Donohoe of the Irish Bitcoin Foundation, who has been working with Dolan, corroborated BitVendo’s version of events, claiming the business advisor said: “The people above me are rejecting the application due to the nature of [the] business.”
Donohoe said it was the first time he had encountered an Irish bank rejecting a business because it was involved with bitcoin and called on Irish banks to embrace, not reject bitcoin:
“We urge banks in Irelands to consider the future and how bitcoin can help the economy. Its not about competing with government currency, its about the technology and how it can spur growth.”
In tweets to BitVendo, the Allied Irish Banks, one of the “big four” in Ireland, said that in contrast to the Bank of Ireland they do allow bitcoin businesses to open accounts:
Dolan confirmed that the company would attempt to open an account with AIB sometime today.
CoinDesk is monitoring this developing story, and will post updates as they become known.
Activist Takes Old-School Approach to Bitcoin Promotion
Danny Bradbury (@dannybradbury) | Published on March 11, 2014 at 05:34 GMT | Lifestyle, News
There are plenty of videos and infographics online explaining what bitcoin is and how it works, but now, a bitcoin activist in the US is planning an old school approach to promoting it. Activist bitcoin-focused marketing agency Bitcoin Bigfoot plans to distribute 100,000 promotional packs to activists around the country. But why?
Paper wallets aside, bitcoin is an aggressively digital phenomenon. Coins are mined, not printed, and they are spent only by sending transactions across the decentralised electronic network. Yet Curtis Fenimore, who together with colleague Jake Tital founded Bitcoin Bigfoot this year, wants to engage new users using a trifold brochure.
“The Internet has a huge reach, but it still doesn’t reach everything,” Fenimore says. “There’s still very much a need for face to face communication and physical promotional materials. YouTube videos alone can’t do it. If that was the cue, adoption would be beyond the roof.”
Fenimore will target new bitcoin users; those who have heard of it but don’t really understand it, and don’t know how to get involved. The project was inspired by several meetings he had with such people, which would invariably end with them asking him how to get a wallet, followed by him scribbling URLs on the back of a napkin. There had to be a better way, he decided.
A grassroots effort
The brochure includes information about how to get and spend bitcoin, including links to large retailers who are now taking it. He will distribute it via regional bitcoin activists who ask for the leaflets in bulk. The brochures will include spaces for those activists to list local merchants taking bitcoin, in an attempt to spark grassroots support for the digital currency.
He has raised around 26 bitcoins, which he says should be enough to finish the design, printing, and distribution of the coins. A self-proclaimed “bitcoin believer”, Fenimore is paying for as much of the project is possible directly in bitcoin. Only the postage will have to be paid in fiat, as sadly, Uncle Sam has elected not to take bitcoin payments for processing the mail.
“The Internet has a huge reach, but it still doesn't reach everything.”
Distribution starts on April 1, and will run for 90 days, but this won’t be the only production run. He will already be thinking about an update to the leaflet before the distribution phase ends, he says, because the bitcoin situation is changing so quickly. There will already be new merchants who should be included, for example. He hopes to have distributed 500,000 of the leaflets by the end of the year.
He hopes that by that time, bitcoin will have become mainstream and “boring” enough that at least one of the three major delivery companies in the US will be taking payment in it, enabling him to make the whole process fiat-free.
It’s clear that any more has high hopes for bitcoin, but then, he comes from a solidly libertarian background. He was an organiser of the Porcupine Freedom Festival, affiliated with the New Hampshire-based Free State Project, a libertarian-driven movement to gather 20,000 people in the state and create a society promoting limited government.
Fenimore’s approach to bitcoin newbies differs from, say, Gareth MacLeod’s Tinkercoin, which focuses on selling them bitcoins for a 25% markup. But Bitcoin Bigfoot will eventually be a for-profit concern, he hopes. He will begin selling bitcoin merchandise and promotional materials, producing it for clients at competitive rates.
“The niche we’ll carve out is bitcoin supporters and activists. Being known as the company that supports you guys,” he says. “If you have an idea of how we can help you and you can’t do it on your own and it benefits others, then we’ll try to make it available to everyone.”
Until then, however, he’s relying on sponsors, and currently has 18 of them. CoinReport.net, Coinapult, expresscoin, DirectPool.net, LocalBitcoins.com, BIPS, KryptoKit, BitGo, Crypto Communications, and CoinMKT have thrown him some bit coins, as have Let’s Talk Bitcoin, CheapAir, Bitcoiniacs, CoinTrader.net, Bitcoin Buzz, Coinosphere, Coinality, and Bitcoin Magazine.
“Bitcoin represents a paradigm shift on so many levels. We’re living in the future and bitcoin is a taste of that,” Fenimore says. “I don’t need to list for you all the benefits of it but all of those things are pointing towards a brighter tomorrow in which the value of what we use to trade is based on consensus and market rates.”
Danny Bradbury (@dannybradbury) | Published on March 11, 2014 at 05:34 GMT | Lifestyle, News
There are plenty of videos and infographics online explaining what bitcoin is and how it works, but now, a bitcoin activist in the US is planning an old school approach to promoting it. Activist bitcoin-focused marketing agency Bitcoin Bigfoot plans to distribute 100,000 promotional packs to activists around the country. But why?
Paper wallets aside, bitcoin is an aggressively digital phenomenon. Coins are mined, not printed, and they are spent only by sending transactions across the decentralised electronic network. Yet Curtis Fenimore, who together with colleague Jake Tital founded Bitcoin Bigfoot this year, wants to engage new users using a trifold brochure.
“The Internet has a huge reach, but it still doesn’t reach everything,” Fenimore says. “There’s still very much a need for face to face communication and physical promotional materials. YouTube videos alone can’t do it. If that was the cue, adoption would be beyond the roof.”
Fenimore will target new bitcoin users; those who have heard of it but don’t really understand it, and don’t know how to get involved. The project was inspired by several meetings he had with such people, which would invariably end with them asking him how to get a wallet, followed by him scribbling URLs on the back of a napkin. There had to be a better way, he decided.
A grassroots effort
The brochure includes information about how to get and spend bitcoin, including links to large retailers who are now taking it. He will distribute it via regional bitcoin activists who ask for the leaflets in bulk. The brochures will include spaces for those activists to list local merchants taking bitcoin, in an attempt to spark grassroots support for the digital currency.
He has raised around 26 bitcoins, which he says should be enough to finish the design, printing, and distribution of the coins. A self-proclaimed “bitcoin believer”, Fenimore is paying for as much of the project is possible directly in bitcoin. Only the postage will have to be paid in fiat, as sadly, Uncle Sam has elected not to take bitcoin payments for processing the mail.
“The Internet has a huge reach, but it still doesn't reach everything.”
Distribution starts on April 1, and will run for 90 days, but this won’t be the only production run. He will already be thinking about an update to the leaflet before the distribution phase ends, he says, because the bitcoin situation is changing so quickly. There will already be new merchants who should be included, for example. He hopes to have distributed 500,000 of the leaflets by the end of the year.
He hopes that by that time, bitcoin will have become mainstream and “boring” enough that at least one of the three major delivery companies in the US will be taking payment in it, enabling him to make the whole process fiat-free.
It’s clear that any more has high hopes for bitcoin, but then, he comes from a solidly libertarian background. He was an organiser of the Porcupine Freedom Festival, affiliated with the New Hampshire-based Free State Project, a libertarian-driven movement to gather 20,000 people in the state and create a society promoting limited government.
Fenimore’s approach to bitcoin newbies differs from, say, Gareth MacLeod’s Tinkercoin, which focuses on selling them bitcoins for a 25% markup. But Bitcoin Bigfoot will eventually be a for-profit concern, he hopes. He will begin selling bitcoin merchandise and promotional materials, producing it for clients at competitive rates.
“The niche we’ll carve out is bitcoin supporters and activists. Being known as the company that supports you guys,” he says. “If you have an idea of how we can help you and you can’t do it on your own and it benefits others, then we’ll try to make it available to everyone.”
Until then, however, he’s relying on sponsors, and currently has 18 of them. CoinReport.net, Coinapult, expresscoin, DirectPool.net, LocalBitcoins.com, BIPS, KryptoKit, BitGo, Crypto Communications, and CoinMKT have thrown him some bit coins, as have Let’s Talk Bitcoin, CheapAir, Bitcoiniacs, CoinTrader.net, Bitcoin Buzz, Coinosphere, Coinality, and Bitcoin Magazine.
“Bitcoin represents a paradigm shift on so many levels. We’re living in the future and bitcoin is a taste of that,” Fenimore says. “I don’t need to list for you all the benefits of it but all of those things are pointing towards a brighter tomorrow in which the value of what we use to trade is based on consensus and market rates.”
Debunking the Deflationary Bitcoin Argument
Thomas Seneca 10/03/2014
It seems every day we hear the deflationary argument, not only from publications such as Business Week, but even from proponents of Bitcoin. Let’s state it clearly:
The Deflationary Argument:
Bitcoin is not inflationary because the supply is limited to 21 million coins. Therefore, people want to hold it and won’t spend. When no one spends this reduces the demand for products and services. This ultimately harms the productivity of the economy leading to a worsening of economic conditions. Therefore, Bitcoin is bad, and we should discourage its use or make it illegal.
Normally, I just dismiss poor reasoning because it is simply the nature of people in our current society to be caught up in fallacious nonsensical memes. Sometimes, however, poor reasoning occurs with such fervor, and so frequently that it deserves attention. This is the case with the deflationary argument as it has been accepted by nearly everyone including some Bitcoin proponents who often lament its truth. In fact, the deflationary argument depends on utterly false, preposterous, and nonsensical fallacies.
The deflationary argument was invented by bankers some time back, even before Bitcoin existed, to justify printing that causes inflation. The printing amounts to counterfeiting, and the printed currency is used to pay the elites who keep some, and use the rest to do terrible things like drone attack innocent populations, or pay for state sponsored propaganda programs. (See Washington’s Blog) Therefore, I plan to deflate the deflationary argument, once and for all, so at least, hopefully, we won’t have to hear it from those that support Bitcoin.
Let’s get on to the fallacies of the deflationary argument:
The first fallacy is the fallacy of equivocation. That’s when a word switches meaning in the middle of an argument. Calling a sudden and drastic increase in bitcoin value ‘deflation’ is simply a false characterization. It is not ‘deflation’ if you buy Palladium, and it goes up 50%. The fact is that there are speculators who are investing in Bitcoin as an investment based on its future potential as a transactional currency. It is not exactly ‘deflation’ if Bitcoin value increases as it is being adopted, rather it is the coming to correct market value of a transactional currency.
The next fallacy is that those who hold Bitcoins won’t spend them. Let’s note that the same reasoning can be applied to people who do not hold Bitcoins: By the argument if you own dollars you should quickly convert them to Bitcoins, and then save them. But the same people who make the deflationary argument also say Bitcoin is a Ponzi scheme or a poor investment. Now, which is it a poor investment or a good one? Are they arguing that it is a good one? That surely contradicts 90% of the FUD (Fear, Uncertainty, Doubt) that the same publications endlessly spew. They are talking out of both sides of their mouth.
Let’s just assume it is not a Ponzi scheme. By the deflationary argument, we should all buy more and more bitcoins since it is always deflationary, right? But not everyone can do this or Bitcoin would go to near infinity, but it doesn’t.
If you want to get at the real inner workings of this fallacy, it is that the argument ignores the fact that Bitcoin trades at market value. The definition of market value means that the price is in an equilibrium where the most genius minds cannot determine whether to sell Bitcoins for dollars or buy Bitcoins with dollars. So the fallacy ignores the fact that Bitcoin tends to market value, and once at that point, it is no more attractive to hold than any currency, even, hard to believe, the dollar.
Another fallacy used in the deflationary argument is that savings is bad, and inflation is good. Well, just pretend you had not been lied to over and over. Now read again: “Savings is bad, and inflation is good.” Yes, that’s right the statement is utter nonsense. Common sense dictates that Savings is Good, and Inflation is Bad. Remember when the Japanese had a good economy and lots of savings? Savings allows a people to accumulate capital, to build, to make, to become controllers of their own destiny. Some see savings as disruptive; instead, they want to convince the ignorant population that savings are bad. That way the population can be better controlled. When the population has no savings, they will no longer threaten the corporate monopolistic fascist systems.
Ask yourself: What economy is based on little or no savings? Yes, that’s right, a subsistence economy, an economy where you are always one paycheck away from starvation. Such economies are ideal for the total control of dependent populations, but do they really serve the economic interests of anyone other than the super elites?
The elites may want us to live in a ‘service economy’, but I think most people would prefer services and monthly expenses to be a small portion of the economy not the entire model. If Bitcoin allowed a population to save money that would be a good thing not a bad thing. It could only be a bad thing in the eyes of mega corporate banker criminals that want us subject to their economic models of artificial scarcity and control.
Let’s make a useful example and go back to a time when shells and beads were used for trading. Surely when gold was first introduced the bead makers tried to convince the ignorant population that gold was no substitute for beads. But it turned out that Gold had structural advantages. It did not matter what anyone thought. Gold was destined to be a more powerful currency than shells or beads.
Cowrie Shells, African Ring Money, Ancient Gold Money 700
Ancient gold money was an improvement over cowrie shells
Compared to beads, gold was deflationary. Gold had limited supply, but for beads the supply had no clear limits. Therefore, gold represented a deflationary currency. In fact, an entire tribe might not be able to trade all their shells or beads for one tiny gold coin. It turns out the deflationary aspect of gold was endlessly better for the economic affairs of man. Consider bead economies versus gold based economies. The advantages of using gold as a currency allowed for trade to become more efficient. If some tribe continued to trade beads, then they could no longer compete in any economy.
A very important point to understand is that Bitcoin just like gold represents a form of technological advancement. Even if the bankers and media convince the population otherwise it simply won’t matter. It would be the same as convincing a population to continue using shells as currency. So we can sit back and watch the media hyperventilate and get red faced as Bitcoin continues to be adopted even by people they thought they had inoculated against it.
Why do you think we are still in the battle? We would have lost long ago had we just invented some new currency that was not printed against, but instead we have a new discovery. The elites may use FUD, or endless hit pieces, they may even successfully ‘inoculate’ the population against Bitcoin, but it won’t work. They cannot understand it because they are so arrogant and corrupt, but the advantage is Bitcoin. That’s why we can say: “the world against Bitcoin, advantage Bitcoin”. So as the elites spread their fallacies, and FUD, we can relax knowing it is like saying the internet won’t work, or the tides don’t come in. When the tide comes in the population, no matter whether they believed the propaganda or not, will get in their boats and sail.
Thomas Seneca 10/03/2014
It seems every day we hear the deflationary argument, not only from publications such as Business Week, but even from proponents of Bitcoin. Let’s state it clearly:
The Deflationary Argument:
Bitcoin is not inflationary because the supply is limited to 21 million coins. Therefore, people want to hold it and won’t spend. When no one spends this reduces the demand for products and services. This ultimately harms the productivity of the economy leading to a worsening of economic conditions. Therefore, Bitcoin is bad, and we should discourage its use or make it illegal.
Normally, I just dismiss poor reasoning because it is simply the nature of people in our current society to be caught up in fallacious nonsensical memes. Sometimes, however, poor reasoning occurs with such fervor, and so frequently that it deserves attention. This is the case with the deflationary argument as it has been accepted by nearly everyone including some Bitcoin proponents who often lament its truth. In fact, the deflationary argument depends on utterly false, preposterous, and nonsensical fallacies.
The deflationary argument was invented by bankers some time back, even before Bitcoin existed, to justify printing that causes inflation. The printing amounts to counterfeiting, and the printed currency is used to pay the elites who keep some, and use the rest to do terrible things like drone attack innocent populations, or pay for state sponsored propaganda programs. (See Washington’s Blog) Therefore, I plan to deflate the deflationary argument, once and for all, so at least, hopefully, we won’t have to hear it from those that support Bitcoin.
Let’s get on to the fallacies of the deflationary argument:
The first fallacy is the fallacy of equivocation. That’s when a word switches meaning in the middle of an argument. Calling a sudden and drastic increase in bitcoin value ‘deflation’ is simply a false characterization. It is not ‘deflation’ if you buy Palladium, and it goes up 50%. The fact is that there are speculators who are investing in Bitcoin as an investment based on its future potential as a transactional currency. It is not exactly ‘deflation’ if Bitcoin value increases as it is being adopted, rather it is the coming to correct market value of a transactional currency.
The next fallacy is that those who hold Bitcoins won’t spend them. Let’s note that the same reasoning can be applied to people who do not hold Bitcoins: By the argument if you own dollars you should quickly convert them to Bitcoins, and then save them. But the same people who make the deflationary argument also say Bitcoin is a Ponzi scheme or a poor investment. Now, which is it a poor investment or a good one? Are they arguing that it is a good one? That surely contradicts 90% of the FUD (Fear, Uncertainty, Doubt) that the same publications endlessly spew. They are talking out of both sides of their mouth.
Let’s just assume it is not a Ponzi scheme. By the deflationary argument, we should all buy more and more bitcoins since it is always deflationary, right? But not everyone can do this or Bitcoin would go to near infinity, but it doesn’t.
If you want to get at the real inner workings of this fallacy, it is that the argument ignores the fact that Bitcoin trades at market value. The definition of market value means that the price is in an equilibrium where the most genius minds cannot determine whether to sell Bitcoins for dollars or buy Bitcoins with dollars. So the fallacy ignores the fact that Bitcoin tends to market value, and once at that point, it is no more attractive to hold than any currency, even, hard to believe, the dollar.
Another fallacy used in the deflationary argument is that savings is bad, and inflation is good. Well, just pretend you had not been lied to over and over. Now read again: “Savings is bad, and inflation is good.” Yes, that’s right the statement is utter nonsense. Common sense dictates that Savings is Good, and Inflation is Bad. Remember when the Japanese had a good economy and lots of savings? Savings allows a people to accumulate capital, to build, to make, to become controllers of their own destiny. Some see savings as disruptive; instead, they want to convince the ignorant population that savings are bad. That way the population can be better controlled. When the population has no savings, they will no longer threaten the corporate monopolistic fascist systems.
Ask yourself: What economy is based on little or no savings? Yes, that’s right, a subsistence economy, an economy where you are always one paycheck away from starvation. Such economies are ideal for the total control of dependent populations, but do they really serve the economic interests of anyone other than the super elites?
The elites may want us to live in a ‘service economy’, but I think most people would prefer services and monthly expenses to be a small portion of the economy not the entire model. If Bitcoin allowed a population to save money that would be a good thing not a bad thing. It could only be a bad thing in the eyes of mega corporate banker criminals that want us subject to their economic models of artificial scarcity and control.
Let’s make a useful example and go back to a time when shells and beads were used for trading. Surely when gold was first introduced the bead makers tried to convince the ignorant population that gold was no substitute for beads. But it turned out that Gold had structural advantages. It did not matter what anyone thought. Gold was destined to be a more powerful currency than shells or beads.
Cowrie Shells, African Ring Money, Ancient Gold Money 700
Ancient gold money was an improvement over cowrie shells
Compared to beads, gold was deflationary. Gold had limited supply, but for beads the supply had no clear limits. Therefore, gold represented a deflationary currency. In fact, an entire tribe might not be able to trade all their shells or beads for one tiny gold coin. It turns out the deflationary aspect of gold was endlessly better for the economic affairs of man. Consider bead economies versus gold based economies. The advantages of using gold as a currency allowed for trade to become more efficient. If some tribe continued to trade beads, then they could no longer compete in any economy.
A very important point to understand is that Bitcoin just like gold represents a form of technological advancement. Even if the bankers and media convince the population otherwise it simply won’t matter. It would be the same as convincing a population to continue using shells as currency. So we can sit back and watch the media hyperventilate and get red faced as Bitcoin continues to be adopted even by people they thought they had inoculated against it.
Why do you think we are still in the battle? We would have lost long ago had we just invented some new currency that was not printed against, but instead we have a new discovery. The elites may use FUD, or endless hit pieces, they may even successfully ‘inoculate’ the population against Bitcoin, but it won’t work. They cannot understand it because they are so arrogant and corrupt, but the advantage is Bitcoin. That’s why we can say: “the world against Bitcoin, advantage Bitcoin”. So as the elites spread their fallacies, and FUD, we can relax knowing it is like saying the internet won’t work, or the tides don’t come in. When the tide comes in the population, no matter whether they believed the propaganda or not, will get in their boats and sail.
Ebay Prepares To Accept Bitcoin With Patent
Tom Boice 10/03/2014
Ebay, the internet’s largest auction house and marketplace, filed a patent in 2011 which was accepted and has now become of interest as it mentions Bitcoin, titled “System And Method For Managing Transactions In A Digital Marketplace,” that enables them to process transactions involving digital currencies, such as Bitcoin.
The patent application includes the following description of a process that would reference an exchange rate in order to exchange currencies:
…determining whether the transaction request is a request for currency exchange; and based on the transaction request being a request for currency exchange, accessing an exchange rate and completing the transaction requesting based on the exchange rate [...] wherein at least one currency being exchanged comprises a currency issued by a private entity.
Going on later to describe what seems to be a process for actually functioning as an exchange:
The currency module is configured to manage exchange of digital currency. Accordingly, the currency module allows a user to trade one form of currency for another form of currency. In one embodiment, one of the forms of currency being traded is cash. The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligations.
As such, the currency module enables marketplace financial services to be provided via the networked system. The currency module may maintain or access an exchange rate for conversion between two forms of currency and perform the conversion based on the exchange rate
The patent then describes how the exchanging function would be used to purchase from Ebay, or elsewhere:
The payment system allows users to accumulate value (e.g., in a commercial currency, such as the U.S. dollar, or a proprietary currency, such as points, miles, or other forms of currency provide by a private entity) in their accounts, and then later to redeem the accumulated value for products (e.g., goods or services) that are made available via the publication system or elsewhere on the [internet].
The actual language says, “…elsewhere on the network 104″ but network 104 is earlier defined as “E.G. the internet, wireless networks[...].”
Options
While this patent seems to be a straight forward way to incorporate privately issued currencies (like reward points, which it references numerous times) with Ebay, it leaves the door open to processing cryptocurrencies as the patent references “digital currencies” in its exchange section.
Of course, Ebay owns internet payment processor PayPal, whose CEO John Donahue has stated interest in Bitcoin previously when speaking to The Wallstreet Journal.
Should Ebay or PayPal move forward with Bitcoin soon, they will be among just a couple of large publicly-traded companies that have incorporated the protocol. Overstock.com has bragged of its success accepting Bitcoin; however, they process payments through Coinbase.
How exactly Bitcoin will fit the structures of Ebay and PayPal remains to be seen, but this patent is a clear indication that the companies do not intend to be left out of the cryptocurrency discussion.
Tom Boice 10/03/2014
Ebay, the internet’s largest auction house and marketplace, filed a patent in 2011 which was accepted and has now become of interest as it mentions Bitcoin, titled “System And Method For Managing Transactions In A Digital Marketplace,” that enables them to process transactions involving digital currencies, such as Bitcoin.
The patent application includes the following description of a process that would reference an exchange rate in order to exchange currencies:
…determining whether the transaction request is a request for currency exchange; and based on the transaction request being a request for currency exchange, accessing an exchange rate and completing the transaction requesting based on the exchange rate [...] wherein at least one currency being exchanged comprises a currency issued by a private entity.
Going on later to describe what seems to be a process for actually functioning as an exchange:
The currency module is configured to manage exchange of digital currency. Accordingly, the currency module allows a user to trade one form of currency for another form of currency. In one embodiment, one of the forms of currency being traded is cash. The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligations.
As such, the currency module enables marketplace financial services to be provided via the networked system. The currency module may maintain or access an exchange rate for conversion between two forms of currency and perform the conversion based on the exchange rate
The patent then describes how the exchanging function would be used to purchase from Ebay, or elsewhere:
The payment system allows users to accumulate value (e.g., in a commercial currency, such as the U.S. dollar, or a proprietary currency, such as points, miles, or other forms of currency provide by a private entity) in their accounts, and then later to redeem the accumulated value for products (e.g., goods or services) that are made available via the publication system or elsewhere on the [internet].
The actual language says, “…elsewhere on the network 104″ but network 104 is earlier defined as “E.G. the internet, wireless networks[...].”
Options
While this patent seems to be a straight forward way to incorporate privately issued currencies (like reward points, which it references numerous times) with Ebay, it leaves the door open to processing cryptocurrencies as the patent references “digital currencies” in its exchange section.
Of course, Ebay owns internet payment processor PayPal, whose CEO John Donahue has stated interest in Bitcoin previously when speaking to The Wallstreet Journal.
Should Ebay or PayPal move forward with Bitcoin soon, they will be among just a couple of large publicly-traded companies that have incorporated the protocol. Overstock.com has bragged of its success accepting Bitcoin; however, they process payments through Coinbase.
How exactly Bitcoin will fit the structures of Ebay and PayPal remains to be seen, but this patent is a clear indication that the companies do not intend to be left out of the cryptocurrency discussion.
AMD et Nvidia innovent, le futur du minage Scrypt passe-t-il par les GPUs?
Guillaume Moulin 10/03/2014
For many years , AMD and Nvidia do battle on the front of PC graphics cards . But for two years , the terms of war have changed. The advent of the first software to undermine the Bitcoin via GPUs then the explosion of mining of currencies Scrypt algorithm caused unexpected Tub, including AMD , favorite minors.
The mining historically AMD
AMD GPU
http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/AMD_volcanic_islands.jpg
AMD is the undisputed winner when talking about the mining of digital currencies and this is especially true since the advent of Litecoin and its algorithm based on Scrypt clones. The memory architecture of its graphics chips allows a speed of mining , or hahshrate , far higher flea Nvidia equivalent price .
Thus, if two cards medium ranges with a roughly equivalent price is opposed , the results in terms of hashrate on Scrypt currencies are unequivocal: Nvidia GTX 760 can reach a hashrate 140 to 160 per second as Kilohashs ATI offers R270X 420-470 Kilohashs per second three times being at the same time 15 % cheaper on average. The difference is even more enlightening on the top models .
A double-edged success for AMD
But what is a benefit for the miners quickly turned into puzzles for AMD . The company, located behind Nvidia in terms of sales for years, and had directed his plan of attack to regain leadership in the market for video games cards . However, because of the excellent results of its graphics cards for mining , miners around the world flocked to the HD 7000 and R9 models and have led countless shortages , particularly in North America and Australia. Consequence prices have exploded.
mining firm
An extreme example of what can be blasting through GPUs
Source: litecointalk
AMD cards were sold and up to twice their RRP . Today , the R9 290 Radeon card acclaimed by minors is 350 € in France , is not traded for less than $ 600 in the U.S. or € 436 .
The United States is by far the No. 1 market , both in terms of sales of gaming equipment or blasting in terms of digital currencies, the problem size for AMD , shared the excellent sales of its immediate cards and potentially devastating effects they could cause long-term , many gamers turning to Nvidia GPUs for their purchases . Because if the latest forms of AMD chips are competitive with their competitors Nvidia their recommended prices , this is not the case at all with prices increased by 40% to 100 %
This is one reason why AMD released this week a new model of graphics card : R9 280 , taken from the ancient model HD7950 , a former favorite of minors. Given descriptions published in the last days, we can still wonder about the AMD strategy that seems to have taken effective architecture of 7950 , with the only flaw in terms of mining , higher consumption . Stay tuned.
Reply with Nvidia Maxwell
The coming months should keep us in suspense . Both manufacturers seem about to deliver solutions that could be very interesting for the mining of crypto- currencies.
nvidia logo
Nvidia chopping first with the first model of its new architecture Maxwell . The GTX 750 Ti Gefore has surprised the community by offering a performance far removed from those of his predecessors based on the Kepler architecture. It competes head- and AMD solutions in terms of pure hashrate . Thus the Nvidia card allows , according to preliminary tests Tom's Hardware and Forbes, to get about 280 per second Kilohashs version 2 Gb . Its competitor from AMD , the 260X R7 caps , according to Tom's Hardware to 206Khs/sec . The 40% gain in performance of mining is not offset by the higher price of about 20%.
In addition, it does not just return to the level in terms of pure speed. It differs widely in terms of consumption, given that a minor must look closely . So if the 260X requires 130W at full load , the 750 Ti simply ... 60 Watts .
Icing on the cake, the Nvidia solution heated much less (56 ° C according to the Forbes study ) and is very quiet , much more than its competitor .
A comparison of PC Perspective as well summarizes the performance of the newest Nvidia . While 260X capped a hash / watt ratio of 2.22 , the 750 Ti amounts to 4.38 and even 4.9 when overclocked .
Nvidia has made great strides in terms of memory and speed of its application to this kind of exercise . Furthermore the company has managed to do so while reducing the thermal footprint, fuel consumption and noise .
With the arrival in the weeks to come , the middle and high-end cards based on Maxwell architecture, Nvidia promises even more impressive energy performance . The Santa Clara firm therefore seems set to win handily the next round and the cards could steal the limelight from their competitors in terms of mining .
AMD and HBM technology
But within a few months, these efforts may be futile in light of recent statements AMD . The Californian company is thus associated with Hynix, one of the world leaders in the manufacture of semiconductors, to develop 3D memory modules for the next generation of its graphics chipsets series called "Pirate Islands" .
Hynix HBM comparison
Hynix promises to improve memory modules through HBM technology
This innovation is the stack of memory dies on top of each other and to connect with connectors through their silicon. Instead of reducing the space of memory modules on a single plane to allow faster access to information, it enlarges the contrary this space " 3D " which will increase throughput and storage volume, and therefore the bandwidth while significantly reducing energy consumption.
Without going into technical details , more than the promise of this new technology that let dreamer. AMD and Hynix and support the integration of HBM (High Bandwidth Memory) in the next-generation GPUs . This name, HBM , refers to a standard which should be operational in 2015 and compelled the modules at a speed of 128 GB / s where DDR5 currently used on the GPU maxes out at 28 GB / s. The stacking technology already exists , the challenge for both companies is to integrate a graphics chip solution , the latter being composed of more complex diseases .
In the end, Hynix promises improved by 65% while maintaining a significant decrease in consumption up to 40 % performance.
However, no date card availability has not yet been formalized by the two companies.
What face Scrypt for mining in 2014 ?
Finally, a question remains : what have the two historic rivals do ?
AMD understands that high performance mining could cause a potentially devastating perverse in his quest for leadership in the gaming. In contrast, Nvidia must envy the phenomenal sales of its competitor for several months , although its stockouts have also brought players into its fold .
With his future solution based on HBM , some observers think that AMD could share and offer both gaming solutions and ASICs oriented mining solutions. This could be a strategy for the California company , especially for publications it a few weeks ago , the technical specifications of the first projects for ASICs Scrypt currencies , having left the specs generally circumspect minors, if not doubtful . But to date , no report suggests this possibility.
Dedicated ASICs specialized companies , innovations from AMD and Nvidia, likely developments algorithms , the world of mining Scrypt will complicate the As of the year 2014.
While many miners were preparing to disconnect their graphics cards and think of new solutions , it is possible that the mining of currencies Scrypt by means techie goes on for many months.
It now should keep an eye to the outputs of different solutions to come to know what is the most effective way .
-----------------------
As an aside, and following the article before yesterday , it appears that the ultimatum Two-Bit Idiot was only the wind. The blogger has posted a new article in which he claims to have renounced publish his presentation announced today.
I wrote before yesterday :
Reading the words of TBI is difficult to imagine that the accusations could not be based on evidence .
I 'm probably wrong and , as he himself admits , TBI has in fact never intended to publish the elements he claims always hold . He also claims that the charges he brought are "100% true " .
Difficult to give any credence now blindly to these claims.
Mea culpa for this article I wrote thinking , in light of your offensive and resolutely determined by TBI employee , he could not possibly be trying to stir the wind. It was in fact the case .
Guillaume Moulin 10/03/2014
For many years , AMD and Nvidia do battle on the front of PC graphics cards . But for two years , the terms of war have changed. The advent of the first software to undermine the Bitcoin via GPUs then the explosion of mining of currencies Scrypt algorithm caused unexpected Tub, including AMD , favorite minors.
The mining historically AMD
AMD GPU
http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/AMD_volcanic_islands.jpg
AMD is the undisputed winner when talking about the mining of digital currencies and this is especially true since the advent of Litecoin and its algorithm based on Scrypt clones. The memory architecture of its graphics chips allows a speed of mining , or hahshrate , far higher flea Nvidia equivalent price .
Thus, if two cards medium ranges with a roughly equivalent price is opposed , the results in terms of hashrate on Scrypt currencies are unequivocal: Nvidia GTX 760 can reach a hashrate 140 to 160 per second as Kilohashs ATI offers R270X 420-470 Kilohashs per second three times being at the same time 15 % cheaper on average. The difference is even more enlightening on the top models .
A double-edged success for AMD
But what is a benefit for the miners quickly turned into puzzles for AMD . The company, located behind Nvidia in terms of sales for years, and had directed his plan of attack to regain leadership in the market for video games cards . However, because of the excellent results of its graphics cards for mining , miners around the world flocked to the HD 7000 and R9 models and have led countless shortages , particularly in North America and Australia. Consequence prices have exploded.
mining firm
An extreme example of what can be blasting through GPUs
Source: litecointalk
AMD cards were sold and up to twice their RRP . Today , the R9 290 Radeon card acclaimed by minors is 350 € in France , is not traded for less than $ 600 in the U.S. or € 436 .
The United States is by far the No. 1 market , both in terms of sales of gaming equipment or blasting in terms of digital currencies, the problem size for AMD , shared the excellent sales of its immediate cards and potentially devastating effects they could cause long-term , many gamers turning to Nvidia GPUs for their purchases . Because if the latest forms of AMD chips are competitive with their competitors Nvidia their recommended prices , this is not the case at all with prices increased by 40% to 100 %
This is one reason why AMD released this week a new model of graphics card : R9 280 , taken from the ancient model HD7950 , a former favorite of minors. Given descriptions published in the last days, we can still wonder about the AMD strategy that seems to have taken effective architecture of 7950 , with the only flaw in terms of mining , higher consumption . Stay tuned.
Reply with Nvidia Maxwell
The coming months should keep us in suspense . Both manufacturers seem about to deliver solutions that could be very interesting for the mining of crypto- currencies.
nvidia logo
Nvidia chopping first with the first model of its new architecture Maxwell . The GTX 750 Ti Gefore has surprised the community by offering a performance far removed from those of his predecessors based on the Kepler architecture. It competes head- and AMD solutions in terms of pure hashrate . Thus the Nvidia card allows , according to preliminary tests Tom's Hardware and Forbes, to get about 280 per second Kilohashs version 2 Gb . Its competitor from AMD , the 260X R7 caps , according to Tom's Hardware to 206Khs/sec . The 40% gain in performance of mining is not offset by the higher price of about 20%.
In addition, it does not just return to the level in terms of pure speed. It differs widely in terms of consumption, given that a minor must look closely . So if the 260X requires 130W at full load , the 750 Ti simply ... 60 Watts .
Icing on the cake, the Nvidia solution heated much less (56 ° C according to the Forbes study ) and is very quiet , much more than its competitor .
A comparison of PC Perspective as well summarizes the performance of the newest Nvidia . While 260X capped a hash / watt ratio of 2.22 , the 750 Ti amounts to 4.38 and even 4.9 when overclocked .
Nvidia has made great strides in terms of memory and speed of its application to this kind of exercise . Furthermore the company has managed to do so while reducing the thermal footprint, fuel consumption and noise .
With the arrival in the weeks to come , the middle and high-end cards based on Maxwell architecture, Nvidia promises even more impressive energy performance . The Santa Clara firm therefore seems set to win handily the next round and the cards could steal the limelight from their competitors in terms of mining .
AMD and HBM technology
But within a few months, these efforts may be futile in light of recent statements AMD . The Californian company is thus associated with Hynix, one of the world leaders in the manufacture of semiconductors, to develop 3D memory modules for the next generation of its graphics chipsets series called "Pirate Islands" .
Hynix HBM comparison
Hynix promises to improve memory modules through HBM technology
This innovation is the stack of memory dies on top of each other and to connect with connectors through their silicon. Instead of reducing the space of memory modules on a single plane to allow faster access to information, it enlarges the contrary this space " 3D " which will increase throughput and storage volume, and therefore the bandwidth while significantly reducing energy consumption.
Without going into technical details , more than the promise of this new technology that let dreamer. AMD and Hynix and support the integration of HBM (High Bandwidth Memory) in the next-generation GPUs . This name, HBM , refers to a standard which should be operational in 2015 and compelled the modules at a speed of 128 GB / s where DDR5 currently used on the GPU maxes out at 28 GB / s. The stacking technology already exists , the challenge for both companies is to integrate a graphics chip solution , the latter being composed of more complex diseases .
In the end, Hynix promises improved by 65% while maintaining a significant decrease in consumption up to 40 % performance.
However, no date card availability has not yet been formalized by the two companies.
What face Scrypt for mining in 2014 ?
Finally, a question remains : what have the two historic rivals do ?
AMD understands that high performance mining could cause a potentially devastating perverse in his quest for leadership in the gaming. In contrast, Nvidia must envy the phenomenal sales of its competitor for several months , although its stockouts have also brought players into its fold .
With his future solution based on HBM , some observers think that AMD could share and offer both gaming solutions and ASICs oriented mining solutions. This could be a strategy for the California company , especially for publications it a few weeks ago , the technical specifications of the first projects for ASICs Scrypt currencies , having left the specs generally circumspect minors, if not doubtful . But to date , no report suggests this possibility.
Dedicated ASICs specialized companies , innovations from AMD and Nvidia, likely developments algorithms , the world of mining Scrypt will complicate the As of the year 2014.
While many miners were preparing to disconnect their graphics cards and think of new solutions , it is possible that the mining of currencies Scrypt by means techie goes on for many months.
It now should keep an eye to the outputs of different solutions to come to know what is the most effective way .
-----------------------
As an aside, and following the article before yesterday , it appears that the ultimatum Two-Bit Idiot was only the wind. The blogger has posted a new article in which he claims to have renounced publish his presentation announced today.
I wrote before yesterday :
Reading the words of TBI is difficult to imagine that the accusations could not be based on evidence .
I 'm probably wrong and , as he himself admits , TBI has in fact never intended to publish the elements he claims always hold . He also claims that the charges he brought are "100% true " .
Difficult to give any credence now blindly to these claims.
Mea culpa for this article I wrote thinking , in light of your offensive and resolutely determined by TBI employee , he could not possibly be trying to stir the wind. It was in fact the case .
$113 Million ‘Mt Gox’ bitcoins may be moving through blockchain
PJ Delaney 09/03/2014
Movements from Mt Gox? Since Mt Gox spectacularly applied for bankruptcy protection, leaving an estimated half a billion dollars of a hole behind it, there have been people asking a number of questions.
What exactly was happening?
Where did the missing bitcoins go?
Can they ever be recovered?
Many people have been trying to trace transactions to and from Mt Gox in order to get answers to these questions. It is alleged that Mark Karpeles, on June 23rd 2011, when Mt Gox was still soaring, set out to demonstrate that Mt Gox actually owned a large numbers of coins. He sent 424242.42424242 bitcoins to a specific address, believed to begin with 1eHhgW6vquBY, and the transaction was soon verified. Soon after this some other transactions took place. Shortly after this the amount in the wallet was split into two separate wallets with one getting 50k and the other 500k. It is alleged that small quantities of bitcoins were sent to the 50k wallet up until March 7th (no coins were withdrawn until that date) and then the 50k bitcoins were sent to another address as part of a number of transactions totalling 180k bitcoins ($113,000, 000!) This address has now began splitting the bitcoins into smaller quantities. It cannot be verified, at this moment in time, that the 50k wallet is owned by Mt Gox but if it looks like a duck and quacks like a duck it may well turn out to be a duck.
The role of the Bitcoin Foundation: Perhaps there are quantities of bitcoins still remaining in Mt Gox’s control, as the above transactions would seem to suggest, perhaps there are some bitcoins that have been deleted or stolen (misplaced seems a bit funny!) and perhaps it is time to ask if the is a role here for the bitcoin foundation? perhaps they may have a function to approve the deletion of specific quantities of bitcoins and the issuing of new coins to bring the number of coins up to the correct quantity that is agreed to have been in circulation. It might require thinking on their behalf outside of the box but there we go.
Now that large quantities of bitcoins are beginning to move on the blockchain it is appropriate to ask ourselves what it is that we know about Mt Gox and whether it is time to re-examine the facts in light of, what appears to be, the new information. The leaked Mt Gox policy document that was doing the rounds recently claimed that 2000 bitcoins were held in a ‘hot wallet’ and stated that all the coins in ‘cold storage’ had been wiped out. The fact that it took Mt Gox potentially years to realise that 744,408 bitcoins had been wiped, 6% of the world supply, worth around $370 million dollars is staggering. There is a need to analyse and dissect the facts surrounding what happened, if not to recover the bitcoins, then at least to avoid a recurrance. There is, in my opinion, a role for the Bitcoin Foundation, in facilitating this.
I would like to suggest that going forward Caveat Emptor should not be an acceptable defence in cases of what is at least mis-management.
PJ Delaney 09/03/2014
Movements from Mt Gox? Since Mt Gox spectacularly applied for bankruptcy protection, leaving an estimated half a billion dollars of a hole behind it, there have been people asking a number of questions.
What exactly was happening?
Where did the missing bitcoins go?
Can they ever be recovered?
Many people have been trying to trace transactions to and from Mt Gox in order to get answers to these questions. It is alleged that Mark Karpeles, on June 23rd 2011, when Mt Gox was still soaring, set out to demonstrate that Mt Gox actually owned a large numbers of coins. He sent 424242.42424242 bitcoins to a specific address, believed to begin with 1eHhgW6vquBY, and the transaction was soon verified. Soon after this some other transactions took place. Shortly after this the amount in the wallet was split into two separate wallets with one getting 50k and the other 500k. It is alleged that small quantities of bitcoins were sent to the 50k wallet up until March 7th (no coins were withdrawn until that date) and then the 50k bitcoins were sent to another address as part of a number of transactions totalling 180k bitcoins ($113,000, 000!) This address has now began splitting the bitcoins into smaller quantities. It cannot be verified, at this moment in time, that the 50k wallet is owned by Mt Gox but if it looks like a duck and quacks like a duck it may well turn out to be a duck.
The role of the Bitcoin Foundation: Perhaps there are quantities of bitcoins still remaining in Mt Gox’s control, as the above transactions would seem to suggest, perhaps there are some bitcoins that have been deleted or stolen (misplaced seems a bit funny!) and perhaps it is time to ask if the is a role here for the bitcoin foundation? perhaps they may have a function to approve the deletion of specific quantities of bitcoins and the issuing of new coins to bring the number of coins up to the correct quantity that is agreed to have been in circulation. It might require thinking on their behalf outside of the box but there we go.
Now that large quantities of bitcoins are beginning to move on the blockchain it is appropriate to ask ourselves what it is that we know about Mt Gox and whether it is time to re-examine the facts in light of, what appears to be, the new information. The leaked Mt Gox policy document that was doing the rounds recently claimed that 2000 bitcoins were held in a ‘hot wallet’ and stated that all the coins in ‘cold storage’ had been wiped out. The fact that it took Mt Gox potentially years to realise that 744,408 bitcoins had been wiped, 6% of the world supply, worth around $370 million dollars is staggering. There is a need to analyse and dissect the facts surrounding what happened, if not to recover the bitcoins, then at least to avoid a recurrance. There is, in my opinion, a role for the Bitcoin Foundation, in facilitating this.
I would like to suggest that going forward Caveat Emptor should not be an acceptable defence in cases of what is at least mis-management.
Cryptocurrencies are ‘Inevitable’, Says Google’s Jared Cohen
Nermin Hajdarbegovic | Published on March 10, 2014 at 19:21 GMT | Analysis, News
Jared Cohen
Although Google hasn’t yet made any moves related to digital currencies, the search giant’s Director of Ideas Jared Cohen believes they are here to stay.
Speaking at SXSW – the annual interactive conference and festival held in Austin, Texas – Cohen said it is still unclear how digital currencies will develop, as they are a “pretty new space”, reports TechCrunch.
Jared said the future of digital currencies like bitcoin is clear:
“It’s very obvious to all of us that cryptocurrencies are inevitable.”
No plans… yet
While Google’s entry into the space would be a watershed moment for digital currencies, Jared’s statements should not be interpreted as Google’s endorsement of digital currencies.
Google Ideas is not exactly a skunkworks kind of organisation tasked with developing new projects. It is an interdisciplinary think tank based in New York City and has nothing to do with product development.
Cohen was tapped to head Google Ideas by Google Executive Chairman Eric Schmidt in 2010 and his statements do carry some weight, though.
Furthermore, although Google Ideas is not tied to Google’s core business, it is still a part of Google’s Business Operations and Strategy group and is not merely a philanthropic endeavour.
However, Cohen has a few ideas concerning cryptocurrencies that won’t go down well with all members of the bitcoin community.
Value in regulation
Cohen sees a lot of value in bitcoin, but he also warns that lack of regulation is a challenge, saying:
“There’s a danger to it not being regulated in some form.”
Cohen added that there is an ongoing debate about bitcoin regulation that will undoubtedly continue as bitcoin “plays out”.
However, it should be noted that the bitcoin regulation debate has been going on for years, but it has yielded very little in the way of realistic proposals, let alone actual regulation.
New Napster?
Cohen also cautioned that bitcoin may be just one model of a practical digital currency – likening it to Napster. We still don’t know how it will develop, he said.
Cohen appears to view bitcoin as a precursor to other digital currencies, but he doesn’t appear to be too certain about it. In the end, he merely repeats the question we are all too familiar with:
“Is bitcoin the model, or the master of cryptocurrencies?”
If bitcoin is merely a model that can be expanded and built upon, alternative digital currencies could be created along similar lines, backed by various organisations, from financial institutions to corporations.
The altcoin craze proves there is plenty of room for development and innovation, but for big players altcoins are not nearly as interesting as bitcoin.
On the other hand, if bitcoin continues to expand unchallenged, any new digital currency hoping to replace it would face an uphill struggle, as bitcoin’s infrastructure grows and matures with time.
The window of opportunity is slowly closing.
Nermin Hajdarbegovic | Published on March 10, 2014 at 19:21 GMT | Analysis, News
Jared Cohen
Although Google hasn’t yet made any moves related to digital currencies, the search giant’s Director of Ideas Jared Cohen believes they are here to stay.
Speaking at SXSW – the annual interactive conference and festival held in Austin, Texas – Cohen said it is still unclear how digital currencies will develop, as they are a “pretty new space”, reports TechCrunch.
Jared said the future of digital currencies like bitcoin is clear:
“It’s very obvious to all of us that cryptocurrencies are inevitable.”
No plans… yet
While Google’s entry into the space would be a watershed moment for digital currencies, Jared’s statements should not be interpreted as Google’s endorsement of digital currencies.
Google Ideas is not exactly a skunkworks kind of organisation tasked with developing new projects. It is an interdisciplinary think tank based in New York City and has nothing to do with product development.
Cohen was tapped to head Google Ideas by Google Executive Chairman Eric Schmidt in 2010 and his statements do carry some weight, though.
Furthermore, although Google Ideas is not tied to Google’s core business, it is still a part of Google’s Business Operations and Strategy group and is not merely a philanthropic endeavour.
However, Cohen has a few ideas concerning cryptocurrencies that won’t go down well with all members of the bitcoin community.
Value in regulation
Cohen sees a lot of value in bitcoin, but he also warns that lack of regulation is a challenge, saying:
“There’s a danger to it not being regulated in some form.”
Cohen added that there is an ongoing debate about bitcoin regulation that will undoubtedly continue as bitcoin “plays out”.
However, it should be noted that the bitcoin regulation debate has been going on for years, but it has yielded very little in the way of realistic proposals, let alone actual regulation.
New Napster?
Cohen also cautioned that bitcoin may be just one model of a practical digital currency – likening it to Napster. We still don’t know how it will develop, he said.
Cohen appears to view bitcoin as a precursor to other digital currencies, but he doesn’t appear to be too certain about it. In the end, he merely repeats the question we are all too familiar with:
“Is bitcoin the model, or the master of cryptocurrencies?”
If bitcoin is merely a model that can be expanded and built upon, alternative digital currencies could be created along similar lines, backed by various organisations, from financial institutions to corporations.
The altcoin craze proves there is plenty of room for development and innovation, but for big players altcoins are not nearly as interesting as bitcoin.
On the other hand, if bitcoin continues to expand unchallenged, any new digital currency hoping to replace it would face an uphill struggle, as bitcoin’s infrastructure grows and matures with time.
The window of opportunity is slowly closing.
French Finance Minister Calls for EU Action on Bitcoin Regulation
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 20:34 GMT | Europe, Law, Regulation
France’s Minister of Economy and Finance, Pierre Moscovici, issued a call on 4th March for European regulators to collaborate on digital currency regulation as part of an effort to ease the concerns of financial institutions and policymakers.
In statements to the press, Moscovici has indicated he intends to request that EU member states discuss the matter at the EU Economic and Financial Affairs Council (ECOFIN), the organisation that sets the EU budget and monitors the financial markets in member states.
Said Moscovici:
“This is an imperative topic to be treated not only at national level but also at European level.”
Moscovici also revealed that his own government agency has been studying the issue for a year through the efforts of an inter-ministerial working group.
The working group is set to disclose its findings in April 2014 in a report that will add to France’s contributions to ECOFIN’s broader research efforts.
Regulation in France
France has been one of the more active EU nations on matters relating to digital currencies so far in 2014, issuing guidance that bitcoin exchanges need to register before operating domestically on 29th January, and holding Senate hearings on the topic on 15th January.
The 29th January ruling, however, did not regulate all bitcoin activities in France. Delphine Amarzit, a representative of the French Treasury has suggested that digital currency transactions that don’t involve fiat money may also need to be examined due to this limitation.
The Bank of France previously ruled that bitcoin is “neither legal tender nor a means of payment”, a ruling that is contributing to uncertainty on how regulation in France can go further in regulating the currency. The only “legal” currency in France is the euro.
Global impact
The news that the EU may soon issue more guidance is particularly significant given the number of nations that have expressed that they are looking to it for leadership.
For example, the Central Bank of Lithuania told CoinDesk in February it would look to the EU for regulatory guidance, while Greece and Hungary have used past statements by the European Banking Authority to inform its citizens about the risks associated with digital currencies.
As such, any determinations made by ECOFIN as part of the research are likely to have a far-reaching impact on the global community as it seeks to better understand how to put controls on the digital currency.
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 20:34 GMT | Europe, Law, Regulation
France’s Minister of Economy and Finance, Pierre Moscovici, issued a call on 4th March for European regulators to collaborate on digital currency regulation as part of an effort to ease the concerns of financial institutions and policymakers.
In statements to the press, Moscovici has indicated he intends to request that EU member states discuss the matter at the EU Economic and Financial Affairs Council (ECOFIN), the organisation that sets the EU budget and monitors the financial markets in member states.
Said Moscovici:
“This is an imperative topic to be treated not only at national level but also at European level.”
Moscovici also revealed that his own government agency has been studying the issue for a year through the efforts of an inter-ministerial working group.
The working group is set to disclose its findings in April 2014 in a report that will add to France’s contributions to ECOFIN’s broader research efforts.
Regulation in France
France has been one of the more active EU nations on matters relating to digital currencies so far in 2014, issuing guidance that bitcoin exchanges need to register before operating domestically on 29th January, and holding Senate hearings on the topic on 15th January.
The 29th January ruling, however, did not regulate all bitcoin activities in France. Delphine Amarzit, a representative of the French Treasury has suggested that digital currency transactions that don’t involve fiat money may also need to be examined due to this limitation.
The Bank of France previously ruled that bitcoin is “neither legal tender nor a means of payment”, a ruling that is contributing to uncertainty on how regulation in France can go further in regulating the currency. The only “legal” currency in France is the euro.
Global impact
The news that the EU may soon issue more guidance is particularly significant given the number of nations that have expressed that they are looking to it for leadership.
For example, the Central Bank of Lithuania told CoinDesk in February it would look to the EU for regulatory guidance, while Greece and Hungary have used past statements by the European Banking Authority to inform its citizens about the risks associated with digital currencies.
As such, any determinations made by ECOFIN as part of the research are likely to have a far-reaching impact on the global community as it seeks to better understand how to put controls on the digital currency.
eBay Patent Filing for Currency Exchange System Included Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 18:28 GMT | Companies, Law, News, Technology
A second eBay patent application has surfaced on the US Patent and Trademark Office database – further highlighting the online marketplace’s interest in digital currencies and digital currency processing systems.
Named ‘System and Method for Managing Transactions in a Digital Marketplace’, the application follows its “gift token” patent revealed on 19th December last year. Filed in December 2011, six months before its gift token filing, this document names bitcoin specifically.
The patent details eBay’s plan to create a currency module configured to manage the exchange of digital currencies, one that might require eBay to maintain or access an exchange rate for conversion.
Reads one patent section:
“The currency module 308 allows a user to trade one form of currency for another form of currency. [...] The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligation.”
The news supports the notion that eBay has been aware of, and thinking strategically about, digital currencies for some time.
eBay currently encourages the sale of virtual currencies on its Classified Ads platforms in the US and the UK, though it permits the sale of such items elsewhere on its site provided they are housed in physical items like hard drives or USB sticks.
Patent lists bitcoin as acceptable currency
Screen Shot 2014-03-10 at 11.21.49 AM
The processing system would not be just for bitcoin alone, but rather a long example list of currencies that could be used on the proposed system.
This included US dollars, eBay bucks, now-defunct Facebook credits and bitcoins:
“A non-exhaustive and example list of currencies capable of being exchanged may include frequent flyer miles, loyalty and reward points (e.g., credit card reward points, hotel loyalty points, retail loyalty points), virtual currency, cash, Bitcoins, Facebook credits, eBay bucks, cash-equivalent currency (e.g., gift cards, travellers checks, cashier’s checks), and any other form of currency.”
Payment system 122, as detailed in the filing, would in turn allow bitcoin users to potentially “accumulate value in a commercial currency” on the site that would later be redeemed for goods and services on the eBay network.
eBay’s bitcoin speculation continues
The patent filing marks the second time in recent weeks that eBay has hinted its broader plans may include digital currencies, and adds to the growing history between the company and the digital currency.
Though he may have been speaking more broadly about digital forms of payment, eBay CEO John Donahoe has indicated as recently as 19th February that PayPal could pursue a digital wallet that holds multiple forms of currency.
Donahoe has been one of the more outspoken executives when it comes to addressing bitcoin. Last November, the exec stated he believes digital currency will become a “very powerful thing” that could one day factor into PayPal’s plans.
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 18:28 GMT | Companies, Law, News, Technology
A second eBay patent application has surfaced on the US Patent and Trademark Office database – further highlighting the online marketplace’s interest in digital currencies and digital currency processing systems.
Named ‘System and Method for Managing Transactions in a Digital Marketplace’, the application follows its “gift token” patent revealed on 19th December last year. Filed in December 2011, six months before its gift token filing, this document names bitcoin specifically.
The patent details eBay’s plan to create a currency module configured to manage the exchange of digital currencies, one that might require eBay to maintain or access an exchange rate for conversion.
Reads one patent section:
“The currency module 308 allows a user to trade one form of currency for another form of currency. [...] The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligation.”
The news supports the notion that eBay has been aware of, and thinking strategically about, digital currencies for some time.
eBay currently encourages the sale of virtual currencies on its Classified Ads platforms in the US and the UK, though it permits the sale of such items elsewhere on its site provided they are housed in physical items like hard drives or USB sticks.
Patent lists bitcoin as acceptable currency
Screen Shot 2014-03-10 at 11.21.49 AM
The processing system would not be just for bitcoin alone, but rather a long example list of currencies that could be used on the proposed system.
This included US dollars, eBay bucks, now-defunct Facebook credits and bitcoins:
“A non-exhaustive and example list of currencies capable of being exchanged may include frequent flyer miles, loyalty and reward points (e.g., credit card reward points, hotel loyalty points, retail loyalty points), virtual currency, cash, Bitcoins, Facebook credits, eBay bucks, cash-equivalent currency (e.g., gift cards, travellers checks, cashier’s checks), and any other form of currency.”
Payment system 122, as detailed in the filing, would in turn allow bitcoin users to potentially “accumulate value in a commercial currency” on the site that would later be redeemed for goods and services on the eBay network.
eBay’s bitcoin speculation continues
The patent filing marks the second time in recent weeks that eBay has hinted its broader plans may include digital currencies, and adds to the growing history between the company and the digital currency.
Though he may have been speaking more broadly about digital forms of payment, eBay CEO John Donahoe has indicated as recently as 19th February that PayPal could pursue a digital wallet that holds multiple forms of currency.
Donahoe has been one of the more outspoken executives when it comes to addressing bitcoin. Last November, the exec stated he believes digital currency will become a “very powerful thing” that could one day factor into PayPal’s plans.
Philippines Regulator Issues Warning on Digital Currencies
Nermin Hajdarbegovic | Published on March 10, 2014 at 16:38 GMT | Asia, News, Regulation
Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued a warning on bitcoin which echoes similar statements issued by regulators worldwide over the past few months.
BSP acknowledged that digital currencies like bitcoin are “now being exchanged in the Philippines” but stressed that they remain a relatively risky investment.
Additionally, it warned that digital currencies and digital currency exchanges are not regulated by national regulators and thus consumers would not be protected from losses if an entity holding digital currencies went under.
No shortage of concerns
BSP pointed out that there is no assurance that any digital currency would be stable or exchangeable. The value can be highly volatile and digital currencies can be used for illicit purposes, it stated.
In terms of consumer advice, the bank outlines “things to think about before buying, holding or trading”, including: loss of value, theft, lack of consumer protection and the possibility of having assets frozen. The bank stresses that exchange platforms are unregulated and that there is no protection for investors in case of failure:
“At present, there have already been a number of cases where virtual currency exchange platforms have gone out of business or have failed.”
The risk of theft is real and digital wallets are not entirely safe, while at the same time consumers who purchase goods and services for bitcoin cannot rely on consumer protection regulation in case something goes wrong. Volatility is another concern, as is the fact that nobody can guarantee exchange, it stated.
Lastly the misuse of digital currencies can lead to criminal investigations and asset freezes – even investors who acted in good faith can have their assets frozen as part on a wider investigation (ie in case authorities opt to close an exchange platform).
No immediate effect
Like other regulatory warnings on digital currencies, the BSP statement is unlikely to have much of an effect on the country’s bitcoin user base. Although the Philippines isn’t bitcoin’s biggest community, the country remains a very interesting market for a number of reasons, mainly remittances.
Back in January a team of bitcoin enthusiasts launched BuyBitcoin.ph, an exchange geared toward remittances. With good reason – there are an estimated 2.2 million Filipino expats in Asia and the rest of the world, and their contribution to the local economy is huge.
In 2013 alone they wired more than $13.9bn to the island nation. To put this in perspective, the country’s GDP is around $250bn. Eliminating transfer fees in the remittance process could be a boon for many expats and their families back home.
Nermin Hajdarbegovic | Published on March 10, 2014 at 16:38 GMT | Asia, News, Regulation
Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued a warning on bitcoin which echoes similar statements issued by regulators worldwide over the past few months.
BSP acknowledged that digital currencies like bitcoin are “now being exchanged in the Philippines” but stressed that they remain a relatively risky investment.
Additionally, it warned that digital currencies and digital currency exchanges are not regulated by national regulators and thus consumers would not be protected from losses if an entity holding digital currencies went under.
No shortage of concerns
BSP pointed out that there is no assurance that any digital currency would be stable or exchangeable. The value can be highly volatile and digital currencies can be used for illicit purposes, it stated.
In terms of consumer advice, the bank outlines “things to think about before buying, holding or trading”, including: loss of value, theft, lack of consumer protection and the possibility of having assets frozen. The bank stresses that exchange platforms are unregulated and that there is no protection for investors in case of failure:
“At present, there have already been a number of cases where virtual currency exchange platforms have gone out of business or have failed.”
The risk of theft is real and digital wallets are not entirely safe, while at the same time consumers who purchase goods and services for bitcoin cannot rely on consumer protection regulation in case something goes wrong. Volatility is another concern, as is the fact that nobody can guarantee exchange, it stated.
Lastly the misuse of digital currencies can lead to criminal investigations and asset freezes – even investors who acted in good faith can have their assets frozen as part on a wider investigation (ie in case authorities opt to close an exchange platform).
No immediate effect
Like other regulatory warnings on digital currencies, the BSP statement is unlikely to have much of an effect on the country’s bitcoin user base. Although the Philippines isn’t bitcoin’s biggest community, the country remains a very interesting market for a number of reasons, mainly remittances.
Back in January a team of bitcoin enthusiasts launched BuyBitcoin.ph, an exchange geared toward remittances. With good reason – there are an estimated 2.2 million Filipino expats in Asia and the rest of the world, and their contribution to the local economy is huge.
In 2013 alone they wired more than $13.9bn to the island nation. To put this in perspective, the country’s GDP is around $250bn. Eliminating transfer fees in the remittance process could be a boon for many expats and their families back home.
Wikipedia’s Jimmy Wales to Discuss Bitcoin Acceptance with Board Members
Emily Spaven (@emilyspaven) | Published on March 10, 2014 at 15:46 GMT | Companies, Merchants, News
Jimmy Wales, co-founder of Wikipedia, plans to discuss with the Wikimedia Foundation Board of Directors the possibility of the famous Internet encyclopaedia accepting bitcoin.
Wales has been experimenting with digital currency, recently setting up a bitcoin wallet with Coinbase and posting his wallet address on Twitter.
Blockchain shows that, since Thursday (6th March), the wallet address has received around 5 BTC, which is currently worth around $3,104.
Wales said he will “of course” donate all of the bitcoins he has received to Wikipedia.
In a Reddit post, the entrepreneur said:
“I’ve been watching bitcoin for a long time, of course, and I thought it past due to test it as a consumer – how hard is it, how confusing is it, etc.”
Wales’ Reddit post continued: “I’m planning to re-open the conversation with the Wikimedia Foundation Board of Directors at our next meeting (and before, by email) about whether Wikimedia should accept bitcoin.
Implications
He explained that one reason Wikimedia hasn’t yet added bitcoin as a funding method is that doing so “has a lot of implications”.
“We know, for example, and you will likely find this counterintuitive, that the more payment options we give people, the less they donate,” he added.
Wales suggested Wikipedia could simply set up an account on Coinbase and publish its wallet address on social media, without integrating it into Wikipedia’s donation screens.
“The BTC community is pretty close-knit and generous, so that’d probably work pretty well,” he concluded.
Currently, Wikipedia accepts donations in a variety of currencies via a number of payment methods, including credit/debit card, PayPal, bank transfer and cheque.
Emily Spaven (@emilyspaven) | Published on March 10, 2014 at 15:46 GMT | Companies, Merchants, News
Jimmy Wales, co-founder of Wikipedia, plans to discuss with the Wikimedia Foundation Board of Directors the possibility of the famous Internet encyclopaedia accepting bitcoin.
Wales has been experimenting with digital currency, recently setting up a bitcoin wallet with Coinbase and posting his wallet address on Twitter.
Blockchain shows that, since Thursday (6th March), the wallet address has received around 5 BTC, which is currently worth around $3,104.
Wales said he will “of course” donate all of the bitcoins he has received to Wikipedia.
In a Reddit post, the entrepreneur said:
“I’ve been watching bitcoin for a long time, of course, and I thought it past due to test it as a consumer – how hard is it, how confusing is it, etc.”
Wales’ Reddit post continued: “I’m planning to re-open the conversation with the Wikimedia Foundation Board of Directors at our next meeting (and before, by email) about whether Wikimedia should accept bitcoin.
Implications
He explained that one reason Wikimedia hasn’t yet added bitcoin as a funding method is that doing so “has a lot of implications”.
“We know, for example, and you will likely find this counterintuitive, that the more payment options we give people, the less they donate,” he added.
Wales suggested Wikipedia could simply set up an account on Coinbase and publish its wallet address on social media, without integrating it into Wikipedia’s donation screens.
“The BTC community is pretty close-knit and generous, so that’d probably work pretty well,” he concluded.
Currently, Wikipedia accepts donations in a variety of currencies via a number of payment methods, including credit/debit card, PayPal, bank transfer and cheque.
Mt. Gox Files for Chapter 15 US Bankruptcy Protection
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 14:49 GMT | Companies, Exchanges, Mt. Gox, News
Troubled Japan-based bitcoin exchange Mt. Gox has filed for Chapter 15 bankruptcy protection, an ancillary form of bankruptcy that will complement its primary Tokyo District Court claim issued on 28th February.
US Chapter 15 bankruptcy provides specific protections in cases of cross-border insolvency, and is based on UN model law. Both Japan and the US have adopted Chapter 15 bankruptcy in an effort to better protect the interests of shareholders and maximize the value of debtor assets in cross-border bankruptcies.
At the time of its filing, Mt. Gox claimed an outstanding debt of ¥6.5bn ($63.6m), and indicated that 850,000 bitcoins had been lost or stolen from its exchange.
This is just the latest development in the ongoing legal case against Mt. Gox. Shortly after its original Japan filing, a US class action suit was mounted by Colorado-based Edelson law firm, which specializes in technology cases. The lawsuit is seeking damages, alleging that Mt. Gox was negligent for failing to provide adequate security to its customers.
Edelson did not respond to comments requesting more information on how this filing could affect its case.
What is Chapter 15 bankruptcy?
Upon qualifying for Chapter 15 protection in the US, certain relief could become available to Mt. Gox, including the granting of an “automatic stay” that would prevent creditors from seizing its US assets, though Mt. Gox would have to request such an arrangement in writing. The presiding bankruptcy judge would have the final say on granting the relief.
For more information on Chapter 15 bankruptcy filings, read a full overview here.
Next steps
Following the filing, a recognition hearing will typically be held within 30 days to determine whether the case is a “foreign main” or “foreign non-main” proceeding, distinctions that would affect the handling of the case. Mt. Gox may not necessarily have protection in the interim period before the hearing.
After the determination is made at the hearing, Mt. Gox would be able to carry out its main purpose in filing, which can include liquidating assets, approving its sale or assigning its leases in the US.
Mt. Gox indicated recently in a post on its website that it planned to restructure and restore the business in order to increase repayments to its creditors.
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 14:49 GMT | Companies, Exchanges, Mt. Gox, News
Troubled Japan-based bitcoin exchange Mt. Gox has filed for Chapter 15 bankruptcy protection, an ancillary form of bankruptcy that will complement its primary Tokyo District Court claim issued on 28th February.
US Chapter 15 bankruptcy provides specific protections in cases of cross-border insolvency, and is based on UN model law. Both Japan and the US have adopted Chapter 15 bankruptcy in an effort to better protect the interests of shareholders and maximize the value of debtor assets in cross-border bankruptcies.
At the time of its filing, Mt. Gox claimed an outstanding debt of ¥6.5bn ($63.6m), and indicated that 850,000 bitcoins had been lost or stolen from its exchange.
This is just the latest development in the ongoing legal case against Mt. Gox. Shortly after its original Japan filing, a US class action suit was mounted by Colorado-based Edelson law firm, which specializes in technology cases. The lawsuit is seeking damages, alleging that Mt. Gox was negligent for failing to provide adequate security to its customers.
Edelson did not respond to comments requesting more information on how this filing could affect its case.
What is Chapter 15 bankruptcy?
Upon qualifying for Chapter 15 protection in the US, certain relief could become available to Mt. Gox, including the granting of an “automatic stay” that would prevent creditors from seizing its US assets, though Mt. Gox would have to request such an arrangement in writing. The presiding bankruptcy judge would have the final say on granting the relief.
For more information on Chapter 15 bankruptcy filings, read a full overview here.
Next steps
Following the filing, a recognition hearing will typically be held within 30 days to determine whether the case is a “foreign main” or “foreign non-main” proceeding, distinctions that would affect the handling of the case. Mt. Gox may not necessarily have protection in the interim period before the hearing.
After the determination is made at the hearing, Mt. Gox would be able to carry out its main purpose in filing, which can include liquidating assets, approving its sale or assigning its leases in the US.
Mt. Gox indicated recently in a post on its website that it planned to restructure and restore the business in order to increase repayments to its creditors.
Blockchain Rolls Out Bitcoin Payments App for Merchants
Nermin Hajdarbegovic | Published on March 10, 2014 at 13:05 GMT | Blockchain, Lifestyle, Merchants, News
Blockchain.info has launched a new payments app designed specifically for merchants. Blockchain is by far the most popular bitcoin wallet and just two months ago the company reached its one million milestone.
However, its new offering is a very different beast. The Blockchain Merchant app is designed to allow merchants to accept bitcoin payments at practically any retail location. The app integrates with your wallet and it can be set up to receive payments in a few easy steps.
Nic Cary, CEO of Blockchain.info, explained: “Merchant adoption is something we are very passionate about. We want to build beautiful, simple to use applications for anyone to get started with Bitcoin.”
Easy as 1,2,3
Once the app is installed the user needs to add the receiving address, business name and currency of choice. The user then enters a description and price for items being purchased and the app generates a QR code, allowing the customer to scan it and send the payment.
blockchain-merchant-app
As Blockchain.info explains:
“Our goal was to design an app that would make accepting Bitcoin simple and easy for any business owner. Simply download, install and open the app; set up your 4-digit PIN [...]; add your Bitcoin receiving address, name of your business and currency preference; turn push notifications on and then click save.”
How does it compare?
So what are the selling points? Well, since the app is free, they aren’t exactly selling points, but Blockhain says it has a number of advantages over traditional payment methods and competing bitcoin solutions.
As soon as it is installed and set up, the app can start receiving bitcoin payments instantly via the Blockchain API. There are no fees on payments and the app is already getting good reviews on Google Play. The biggest complaint coming from early adopters and reviewers appears to be the relatively limited choice of currencies.
The application should run on all Android devices running Android 4.0 or a more recent versions.
Of course, the elephant in the room is Coinbase. The company pioneered bitcoin merchant apps, but truth be told bitcoin merchant apps are still very niche. The Coinbase Merchant app still has fewer than 5,000 downloads, which doesn’t sound like much – and it isn’t.
Bitcoin POS (point of sale) and mPOS (mobile point of sale) solutions are still few and far between, but in theory they do offer a number of distinct advantages over traditional payment solutions, including the fact that they are free, offer 0% transaction fees and don’t require specialized hardware.
Apple is still not allowing bitcoin apps on iOS, which is bad news for many merchants who rely on iOS POS solutions, usually on iPads.
However, Cary has a plan: “We’re going to be giving away android tablets as we roll it out around the world. There are already half a dozen on the way to Paris and we’ll announce new launch cities over the coming weeks.”
Nermin Hajdarbegovic | Published on March 10, 2014 at 13:05 GMT | Blockchain, Lifestyle, Merchants, News
Blockchain.info has launched a new payments app designed specifically for merchants. Blockchain is by far the most popular bitcoin wallet and just two months ago the company reached its one million milestone.
However, its new offering is a very different beast. The Blockchain Merchant app is designed to allow merchants to accept bitcoin payments at practically any retail location. The app integrates with your wallet and it can be set up to receive payments in a few easy steps.
Nic Cary, CEO of Blockchain.info, explained: “Merchant adoption is something we are very passionate about. We want to build beautiful, simple to use applications for anyone to get started with Bitcoin.”
Easy as 1,2,3
Once the app is installed the user needs to add the receiving address, business name and currency of choice. The user then enters a description and price for items being purchased and the app generates a QR code, allowing the customer to scan it and send the payment.
blockchain-merchant-app
As Blockchain.info explains:
“Our goal was to design an app that would make accepting Bitcoin simple and easy for any business owner. Simply download, install and open the app; set up your 4-digit PIN [...]; add your Bitcoin receiving address, name of your business and currency preference; turn push notifications on and then click save.”
How does it compare?
So what are the selling points? Well, since the app is free, they aren’t exactly selling points, but Blockhain says it has a number of advantages over traditional payment methods and competing bitcoin solutions.
As soon as it is installed and set up, the app can start receiving bitcoin payments instantly via the Blockchain API. There are no fees on payments and the app is already getting good reviews on Google Play. The biggest complaint coming from early adopters and reviewers appears to be the relatively limited choice of currencies.
The application should run on all Android devices running Android 4.0 or a more recent versions.
Of course, the elephant in the room is Coinbase. The company pioneered bitcoin merchant apps, but truth be told bitcoin merchant apps are still very niche. The Coinbase Merchant app still has fewer than 5,000 downloads, which doesn’t sound like much – and it isn’t.
Bitcoin POS (point of sale) and mPOS (mobile point of sale) solutions are still few and far between, but in theory they do offer a number of distinct advantages over traditional payment solutions, including the fact that they are free, offer 0% transaction fees and don’t require specialized hardware.
Apple is still not allowing bitcoin apps on iOS, which is bad news for many merchants who rely on iOS POS solutions, usually on iPads.
However, Cary has a plan: “We’re going to be giving away android tablets as we roll it out around the world. There are already half a dozen on the way to Paris and we’ll announce new launch cities over the coming weeks.”
Leading Middle East Music Streaming Service ‘Anghami’ Embraces Bitcoin
Nermin Hajdarbegovic | Published on March 10, 2014 at 11:21 GMT | BitPay, Merchants, News
Anghami, the leading mobile music streaming platform in the Middle East and North Africa (MENA) has announced that it will start accepting bitcoin payments.
Anghami says it is the first music service in the world to accept bitcoin, although a number of smaller music services have announced plans to accept the currency over the past couple of months.
For its part Anghami will start accepting bitcoin subscription fees and incorporate bitcoin into its ‘freemium’ model. The service is available on all major mobile platforms, including Android, iOS, Windows Phone, Blackberry, as well as Nokia’s Asha and Symbian platforms, which are big in the emerging markets.
Alternative payment methods
In addition to bitcoin, Anghami is also using prepaid cards, telecom billing and PayPal, so it is no stranger to the world of alternative payments. However, the company points out that bitcoin offers the lowest transaction fee of all the methods currently available. It has chosen BitPay as its payment processor.
“Bitcoin is still in its early days – especially in the Middle East. But just like everyone was sceptical that streaming [was] the future of music, we believe that Bitcoin is the future of payments,” Anghami’s co-founder Elie Habib said. “Moreover, Anghami being a mobile service, paying via your digital bitcoin wallet is a no brainer.”
Fellow co-founder Eddy Maroun pointed out that bitcoin is getting “major backing” from entrepreneurs and technologists worldwide. He added that Anghami is sending a message that it believes in bitcoin and that it wants its user base of digital enthusiasts to get on board.
Anghami launched in late 2012 and so far it has managed to attract four million users, mostly from the MENA region.
Bitcoin and digital media – a match made in heaven?
Although bitcoin has received a fair amount of coverage lately, the focus still appears to be on wild price fluctuations, turbulence in the bitcoin ecosystem and various sideshows like the events which unfolded in California last week.
While the attention is focused on headline grabbing stuff, the industry is starting to look seriously into the potential of digital currencies in the content industry. Earlier this year PriceWaterhouseCoopers published a very bullish report on bitcoin’s prospects in the entertainment industry.
The Chicago Sun Tribune’s bitcoin pseudo-paywall has also attracted a lot of attention from publishers worldwide. In essence, bitcoin’s low transaction fees and potential for micropayments have the potential to change the way content is monetized.
Nermin Hajdarbegovic | Published on March 10, 2014 at 11:21 GMT | BitPay, Merchants, News
Anghami, the leading mobile music streaming platform in the Middle East and North Africa (MENA) has announced that it will start accepting bitcoin payments.
Anghami says it is the first music service in the world to accept bitcoin, although a number of smaller music services have announced plans to accept the currency over the past couple of months.
For its part Anghami will start accepting bitcoin subscription fees and incorporate bitcoin into its ‘freemium’ model. The service is available on all major mobile platforms, including Android, iOS, Windows Phone, Blackberry, as well as Nokia’s Asha and Symbian platforms, which are big in the emerging markets.
Alternative payment methods
In addition to bitcoin, Anghami is also using prepaid cards, telecom billing and PayPal, so it is no stranger to the world of alternative payments. However, the company points out that bitcoin offers the lowest transaction fee of all the methods currently available. It has chosen BitPay as its payment processor.
“Bitcoin is still in its early days – especially in the Middle East. But just like everyone was sceptical that streaming [was] the future of music, we believe that Bitcoin is the future of payments,” Anghami’s co-founder Elie Habib said. “Moreover, Anghami being a mobile service, paying via your digital bitcoin wallet is a no brainer.”
Fellow co-founder Eddy Maroun pointed out that bitcoin is getting “major backing” from entrepreneurs and technologists worldwide. He added that Anghami is sending a message that it believes in bitcoin and that it wants its user base of digital enthusiasts to get on board.
Anghami launched in late 2012 and so far it has managed to attract four million users, mostly from the MENA region.
Bitcoin and digital media – a match made in heaven?
Although bitcoin has received a fair amount of coverage lately, the focus still appears to be on wild price fluctuations, turbulence in the bitcoin ecosystem and various sideshows like the events which unfolded in California last week.
While the attention is focused on headline grabbing stuff, the industry is starting to look seriously into the potential of digital currencies in the content industry. Earlier this year PriceWaterhouseCoopers published a very bullish report on bitcoin’s prospects in the entertainment industry.
The Chicago Sun Tribune’s bitcoin pseudo-paywall has also attracted a lot of attention from publishers worldwide. In essence, bitcoin’s low transaction fees and potential for micropayments have the potential to change the way content is monetized.
‘BOOST:Bitcoin’ Event Draws a Crowd in Hong Kong
Jon Southurst (@southtopia) | Published on March 10, 2014 at 10:07 GMT | Companies, Events, News
Over a hundred people, including a large number of absolute beginners, turned up to an event in Hong Kong last week to promote the use of bitcoin for consumers and businesses in daily life.
Co-sponsored by Singapore-based payment processor startup CoinPip, the Hong Kong event, known as RISE:Bitcoin, featured its own mini trading desk (or ‘Satoshi Square’) to help newcomers set up wallets and make their first transactions with guidance from more experienced users.
Future similar events, like one in Kuala Lumpur near the end of March, will be called BOOST:Bitcoin.
There was also a “Bitcoin 101” talk for beginners. Helping bring everything together were two local bitcoin community enthusiasts, Jehan Chu and Leonhard A Weese.
IMG_7177
Merchants such as pancake maker Mr. Bing and Coffee Alchemy were also there to accept bitcoins, offering both a Hong Kong dollar price and discounted price for people paying with bitcoin.
Growing phenomenon
Bitcoin meetups, Satoshi Squares and information sessions are fairly commonplace these days – with the Silicon Valley and Los Angeles events regularly drawing a large crowd. But the BOOST:Bitcoin meetup was notable for attracting over 100 for perhaps the first time in Asia, and being a special event mainly aimed at novice users.
So what’s a Singapore startup doing organizing bitcoin promotions in Hong Kong?
CoinPip co-founder and ‘Chief Crypto Enthusiast’ Anson Zeall says he “knows both Hong Kong and Singapore inside and out, but Hong Kong has a way bigger bitcoin market than Singapore does right now, looking at transactions on the exchanges.”
“Hong Kong has a stronger foothold in understanding bitcoin because of the problems of the pegged Hong Kong dollar/USD. People have been looking for alternatives. And Hong Kong people like to take risk, it’s just in their nature.”
“Unfortunately that startup scene there is not as friendly as Singapore. So working in Singapore, expanding in Hong Kong is the best combination.”
Template for future events
Zeall also said CoinPip now has an event template in place and the company is happy to help out if anyone elsewhere wants to host something similar.
Although his company provided the payment system for the BOOST:Bitcoin event, he said it’s not necessary for participating merchants at this event or any future ones to be CoinPip clients, as the company can accept payments and convert to local currency on the spot.
IMG_7255
“The most fulfilling part is buying and spending bitcoins and newcomers that don’t have bitcoins will experience what it is like too,” Zeall said.
CoinPip helps out by suggesting the most suitable types of merchants should be approached for events, what financial logistics are necessary and how the day should be run in general.
Hong Kong bitcoin innovations
The Special Administrative Region of China is shaping up to be a bitcoin hub. Its autonomous government runs a low-tax jurisdiction aimed at easing financial services and attracting startup businesses from around the world, and authorities have also signalled they will not be interfering in bitcoin business.
The very night before the BOOST:Bitcoin event recorded another landmark as local exchange Asia Nexgen (ANXBTC) opened the world’s first ‘bitcoin shop’.
The 400 square-foot physical outlet has a walk-up counter where users can convert cash to bitcoins face-to-face, on condition they show photo ID and proof of address as Hong Kong residents.
Jon Southurst (@southtopia) | Published on March 10, 2014 at 10:07 GMT | Companies, Events, News
Over a hundred people, including a large number of absolute beginners, turned up to an event in Hong Kong last week to promote the use of bitcoin for consumers and businesses in daily life.
Co-sponsored by Singapore-based payment processor startup CoinPip, the Hong Kong event, known as RISE:Bitcoin, featured its own mini trading desk (or ‘Satoshi Square’) to help newcomers set up wallets and make their first transactions with guidance from more experienced users.
Future similar events, like one in Kuala Lumpur near the end of March, will be called BOOST:Bitcoin.
There was also a “Bitcoin 101” talk for beginners. Helping bring everything together were two local bitcoin community enthusiasts, Jehan Chu and Leonhard A Weese.
IMG_7177
Merchants such as pancake maker Mr. Bing and Coffee Alchemy were also there to accept bitcoins, offering both a Hong Kong dollar price and discounted price for people paying with bitcoin.
Growing phenomenon
Bitcoin meetups, Satoshi Squares and information sessions are fairly commonplace these days – with the Silicon Valley and Los Angeles events regularly drawing a large crowd. But the BOOST:Bitcoin meetup was notable for attracting over 100 for perhaps the first time in Asia, and being a special event mainly aimed at novice users.
So what’s a Singapore startup doing organizing bitcoin promotions in Hong Kong?
CoinPip co-founder and ‘Chief Crypto Enthusiast’ Anson Zeall says he “knows both Hong Kong and Singapore inside and out, but Hong Kong has a way bigger bitcoin market than Singapore does right now, looking at transactions on the exchanges.”
“Hong Kong has a stronger foothold in understanding bitcoin because of the problems of the pegged Hong Kong dollar/USD. People have been looking for alternatives. And Hong Kong people like to take risk, it’s just in their nature.”
“Unfortunately that startup scene there is not as friendly as Singapore. So working in Singapore, expanding in Hong Kong is the best combination.”
Template for future events
Zeall also said CoinPip now has an event template in place and the company is happy to help out if anyone elsewhere wants to host something similar.
Although his company provided the payment system for the BOOST:Bitcoin event, he said it’s not necessary for participating merchants at this event or any future ones to be CoinPip clients, as the company can accept payments and convert to local currency on the spot.
IMG_7255
“The most fulfilling part is buying and spending bitcoins and newcomers that don’t have bitcoins will experience what it is like too,” Zeall said.
CoinPip helps out by suggesting the most suitable types of merchants should be approached for events, what financial logistics are necessary and how the day should be run in general.
Hong Kong bitcoin innovations
The Special Administrative Region of China is shaping up to be a bitcoin hub. Its autonomous government runs a low-tax jurisdiction aimed at easing financial services and attracting startup businesses from around the world, and authorities have also signalled they will not be interfering in bitcoin business.
The very night before the BOOST:Bitcoin event recorded another landmark as local exchange Asia Nexgen (ANXBTC) opened the world’s first ‘bitcoin shop’.
The 400 square-foot physical outlet has a walk-up counter where users can convert cash to bitcoins face-to-face, on condition they show photo ID and proof of address as Hong Kong residents.
Forget Bitcoin vs Fiat, Welcome the Hybrid Economy
Sean Neville (@psneville) | Published on March 9, 2014 at 17:00 GMT | Analysis, Bitcoin protocol, Exchanges, Law, Merchants, Regulation
Choosing bitcoin
Evangelists and skeptics alike tend to frame digital currency protocols and state fiat currencies in stark conflict, but the promising moderate view sees them coexist as mutual optimizations of one another.
Bitcoin doesn’t need to replace fiat currencies in order to be successful – it merely needs to optimize away the pain of (and expose new value in) transferring currency.
Conversely, fiat currencies don’t need bitcoin to fail or see it regulated into the shadows in order to ensure continued sovereign coin sustainability; traditional economies can instead assimilate digital currency protocols to grow a stronger, safer, less expensive and more valuable hybrid economy.
Optimizing traditional currency
BankDespite the complexities of cryptographic trust and the protocol’s potential beyond transfers alone, the payments advantage is simple: more of our money reaches its destination, safely and without exchange of personal information, quickly and without potential for future reversals. We have more control over our own money.
For a digital age, sending money remains unreasonably expensive, slow and insecure. Fraught with risk, the payments path is policed by gateways that levy tolls at each tightly controlled yet still insecure step along the way.
Banks levy fees for transfers cleared by a central bank; mere access to the closed network rails requires a fee. The ‘APIs’ and ‘protocols’ to accommodate these transfers usually equate to batch uploads of files via SFTP — welcome to the 1970s, ripe for protocol overhaul.
Meanwhile, credit card networks levy interchange fees for authorizing and executing debits from issuing banks — which themselves also exact a toll – on top of the tolls required by payment processing gateways and intermediary services. Most of the fees exist not for value-add, but, a) to compensate for authorization and administrative fraud, and, b) for access to private card network rails. The distributed trust protocols of the bitcoin system eliminate both altogether.
Adam Shapiro of Promontory Financial Group illustrated that sending $1,000 USD to a merchant requiring that equivalent in euros would cost $50 via credit card and as much as $80 via bank wire, while the same payment would cost around $15 if exchanged in/out of bitcoin at both ends of the transaction.
Even in scenarios in which consumers don’t see such fees directly, merchants could be given incentive to pass along transaction savings to those customers. Mainstreamers would then flock to digital currency’s viral utility, low cost and security, rather than to make a deliberate political statement or speculative investment. That benefits everyone in the ecosystem, even those advocates who look at bitcoin very differently.
While the existing clearing houses may see short-term threat in losing these fees, they stand to gain far more in the long term through new business opportunities. Greater value exists in innovation above the network layer, and the cost of operating the network layer itself should diminish. The new protocols and distributed ledger want to do far more than merely transfer numbers, which presents opportunity for companies old and new alike.
In light of recent breaches, the security and push model is worth highlighting: Consumers do not need to provide personal information (let alone keys or card numbers) to a merchant, and the merchant does not need to hold it. You can’t hack or steal what isn’t there in the first place.
Further, note that in Shapiro’s scenario, the same KYC and AML (Know Your Customer and Anti-Money Laundering) policing would be just as possible for bitcoin as it would be for traditional credit or wire transactions, given the use of bitcoin for only one transaction between two gateways in that example (assuming the gateways, as banks or as money services backed by banks, comply with those regulations).
In some ways, this is a typical and predictable Internet story. The days are numbered for exacting a toll merely for access to network rails used to move information from one place to another.
In domains of content, communication and media, business process automation, search and so many others, the Internet wants access to the network to be free, or very close to free. We don’t expect to pay a fee for sending an email, for example. This is not so true in the domains of finance and payments, yet.
That is now changing, and it’s inevitable that fees move to value-added layers above the rails, to layers that expose new opportunities from payments to smart contracts to programmable money and more. That innovation starts with optimizing the transfer of money, not by replacing state money altogether.
Optimizing digital currency
Fiat vs bitcoinFiat currency optimizes digital currency as well, even beyond the obvious case of enabling payments to merchants who don’t (or won’t) accept digital currency:
Traditional currencies offer a volatility solution for merchants more concerned with payment for goods and services than speculative investment.
Bitcoin currently trades at low volume through a handful of exchanges, similar to a single small-cap stock, so it’s natural for volatility to exist. This should improve, but for the purpose of payments specifically, a merchant can nearly ignore volatility by trading out of bitcoin into fiat at pegged value. Most bitcoin merchant services shelter their clients from intra-day bitcoin volatility so long as they trade back into fiat by close of business.
Taxation and supporting communal nation-state schools and infrastructure is another obvious value that state currencies provide, and this includes taxation on earnings related to bitcoin as well.
“Bitcoin may prove to be more like NCSA Mosaic is to Google’s Chrome – an early informative breakthrough instead of what we’re all actually using 20 years later”
Any definition of bitcoin as a protocol, a payment vehicle, a currency or an asset must be fluid in order to be accurate, as the definition varies by context and time. As a protocol-currency-asset, however, it can, if held, result in material gains (or losses) subject to taxation.
Gateways into fiat offer a simple means of applying tax at exchange points rather than attaching tax complexity to the protocol itself. Instead of attempting to apply taxation to a world of digital currency, existing taxation on the fiat side might account for digital currency as part of money flowing through the hybrid economy.
Trust is a sensitive topic. On the digital currency side, trust is strong and decentralized for transactions, but that doesn’t mean trust of specific parties is altogether absent.
Whether it’s trust of the peer review and open development meritocracy of the core implementation code, or trust of a custodial service to manage keys, or trust of a piece of local software to manage wallets, or trust of an exchange service to protect fiat gateway and personal information; except for the actual transaction validation and confirmation, some trust of strangers is still implied, even in bitcoin.
When it comes to trust of such parties in the world of state, a long line of laws and regulations is designed to protect consumers. Although large institutions have famously breached that trust, formal consumer protections more often than not do protect consumers from fraudulent charges and provide a ‘lender of last resort’.
The same is not quite true of digital currency, as the loss or theft of keys is more akin to the loss of cash than to a fraudulent charge.
It’s not a simple matter of whether to trust digital currency vs traditional banks or card networks, but a matter of which one to trust, for what specific purpose, at what time and for what amount. Taking control of our own money involves making responsible decisions about trust.
Digital currency’s push model, identity protection features, decentralized transaction clearing and easily-audited open ledger make it trustworthy for payments, especially as its transaction throughput increases.
At the same time, custodial implications for exchanges, service providers and software developers can make traditional institutions trustworthy partners for other kinds of asset storage for mainstream users. Money can happily flow between both.
Gateways to a new world
Gateway to a new worldGateways throttle the flow. In a hybrid economy, customers and merchants alike must be able to get into and out of digital currency quickly, easily and securely.
In a pure payment scenario, a customer wants to acquire bitcoins using fiat instantly, execute a payment immediately after acquiring them, and, at some point shortly thereafter, the merchant wants to acquire fiat in exchange for those bitcoins. This is not the only valid scenario, but it’s helpful as a lens for discussion.
A gateway enabling that scenario must meet several challenges. For mainstream users, the gateway cannot be a trading desk, exposing an order book and price spikes to users through a bid/ask metaphor; the transition must feel seamless in design.
This entails some short-term credit risk for the gateways. Bitcoins credited to customers immediately can be spent and never recovered, while the credit card charges used to acquire the bitcoins can be reversed.
Also, in a scenario in which fiat is traded for bitcoins, bitcoins are transferred from one address to another, and then immediately traded back into fiat – bitcoin is not always much of an optimization because the one transaction may not always be sufficient to overcome the fees at the two gateways.
The threshold at which paying digitally becomes valuable fluctuates across use cases for different domains, and for different goods and services within domains.
When multiple bitcoin transactions occur before trading back into fiat, the optimization increases. The more transactions introduced into the digital chain before exchange into a gateway, the greater the increase in value of bitcoin (as for any full reserve model applied to increasing transaction velocity against a finite resource) and the greater the optimization through fee avoidance — but the AML risks also increase.
Moreover, if the gateway holds fiat on behalf of customers, then the gateway must be a bank. If the gateway merely transfers and does not hold fiat funds, then the gateway must have a banking partner.
Partnering with a bank is no trivial task. Bank risk departments can be far more conservative than state regulators. Transacting bitcoin from one address to another, whether for remittance purposes or for the exchange of goods and services, cannot always enforce KYC, AML or anti-fraud rules. Banking partners are either comfortable with these cash-like traits or they’re not. These days they’re mostly not, and this hinders gateway innovation considerably.
So mainstream gateways will need to manage short-term credit risk, potentially on a per-individual basis, while also simplifying the forex trading function, optimizing gateway fees, satisfying a banking partner and addressing AML policies – all while speeding up exchange and transaction throughput. A tall order. Capable, responsible, experienced innovators required.
Although the challenges for such a gateway are great, the reward is even greater: transform disparate economies into a global hybrid economy and grow digital currency into lasting evolution rather than shadowy revolution.
It will require some time, and in the end it’s possible that bitcoin may prove to be more like NCSA Mosaic is to Google’s Chrome, an early informative breakthrough instead of what we’re all actually using 20 years later, but that would still equate to smashing success and world-changing innovation, and it’s illogical and unwise to bet against innovation.
Sean Neville (@psneville) | Published on March 9, 2014 at 17:00 GMT | Analysis, Bitcoin protocol, Exchanges, Law, Merchants, Regulation
Choosing bitcoin
Evangelists and skeptics alike tend to frame digital currency protocols and state fiat currencies in stark conflict, but the promising moderate view sees them coexist as mutual optimizations of one another.
Bitcoin doesn’t need to replace fiat currencies in order to be successful – it merely needs to optimize away the pain of (and expose new value in) transferring currency.
Conversely, fiat currencies don’t need bitcoin to fail or see it regulated into the shadows in order to ensure continued sovereign coin sustainability; traditional economies can instead assimilate digital currency protocols to grow a stronger, safer, less expensive and more valuable hybrid economy.
Optimizing traditional currency
BankDespite the complexities of cryptographic trust and the protocol’s potential beyond transfers alone, the payments advantage is simple: more of our money reaches its destination, safely and without exchange of personal information, quickly and without potential for future reversals. We have more control over our own money.
For a digital age, sending money remains unreasonably expensive, slow and insecure. Fraught with risk, the payments path is policed by gateways that levy tolls at each tightly controlled yet still insecure step along the way.
Banks levy fees for transfers cleared by a central bank; mere access to the closed network rails requires a fee. The ‘APIs’ and ‘protocols’ to accommodate these transfers usually equate to batch uploads of files via SFTP — welcome to the 1970s, ripe for protocol overhaul.
Meanwhile, credit card networks levy interchange fees for authorizing and executing debits from issuing banks — which themselves also exact a toll – on top of the tolls required by payment processing gateways and intermediary services. Most of the fees exist not for value-add, but, a) to compensate for authorization and administrative fraud, and, b) for access to private card network rails. The distributed trust protocols of the bitcoin system eliminate both altogether.
Adam Shapiro of Promontory Financial Group illustrated that sending $1,000 USD to a merchant requiring that equivalent in euros would cost $50 via credit card and as much as $80 via bank wire, while the same payment would cost around $15 if exchanged in/out of bitcoin at both ends of the transaction.
Even in scenarios in which consumers don’t see such fees directly, merchants could be given incentive to pass along transaction savings to those customers. Mainstreamers would then flock to digital currency’s viral utility, low cost and security, rather than to make a deliberate political statement or speculative investment. That benefits everyone in the ecosystem, even those advocates who look at bitcoin very differently.
While the existing clearing houses may see short-term threat in losing these fees, they stand to gain far more in the long term through new business opportunities. Greater value exists in innovation above the network layer, and the cost of operating the network layer itself should diminish. The new protocols and distributed ledger want to do far more than merely transfer numbers, which presents opportunity for companies old and new alike.
In light of recent breaches, the security and push model is worth highlighting: Consumers do not need to provide personal information (let alone keys or card numbers) to a merchant, and the merchant does not need to hold it. You can’t hack or steal what isn’t there in the first place.
Further, note that in Shapiro’s scenario, the same KYC and AML (Know Your Customer and Anti-Money Laundering) policing would be just as possible for bitcoin as it would be for traditional credit or wire transactions, given the use of bitcoin for only one transaction between two gateways in that example (assuming the gateways, as banks or as money services backed by banks, comply with those regulations).
In some ways, this is a typical and predictable Internet story. The days are numbered for exacting a toll merely for access to network rails used to move information from one place to another.
In domains of content, communication and media, business process automation, search and so many others, the Internet wants access to the network to be free, or very close to free. We don’t expect to pay a fee for sending an email, for example. This is not so true in the domains of finance and payments, yet.
That is now changing, and it’s inevitable that fees move to value-added layers above the rails, to layers that expose new opportunities from payments to smart contracts to programmable money and more. That innovation starts with optimizing the transfer of money, not by replacing state money altogether.
Optimizing digital currency
Fiat vs bitcoinFiat currency optimizes digital currency as well, even beyond the obvious case of enabling payments to merchants who don’t (or won’t) accept digital currency:
Traditional currencies offer a volatility solution for merchants more concerned with payment for goods and services than speculative investment.
Bitcoin currently trades at low volume through a handful of exchanges, similar to a single small-cap stock, so it’s natural for volatility to exist. This should improve, but for the purpose of payments specifically, a merchant can nearly ignore volatility by trading out of bitcoin into fiat at pegged value. Most bitcoin merchant services shelter their clients from intra-day bitcoin volatility so long as they trade back into fiat by close of business.
Taxation and supporting communal nation-state schools and infrastructure is another obvious value that state currencies provide, and this includes taxation on earnings related to bitcoin as well.
“Bitcoin may prove to be more like NCSA Mosaic is to Google’s Chrome – an early informative breakthrough instead of what we’re all actually using 20 years later”
Any definition of bitcoin as a protocol, a payment vehicle, a currency or an asset must be fluid in order to be accurate, as the definition varies by context and time. As a protocol-currency-asset, however, it can, if held, result in material gains (or losses) subject to taxation.
Gateways into fiat offer a simple means of applying tax at exchange points rather than attaching tax complexity to the protocol itself. Instead of attempting to apply taxation to a world of digital currency, existing taxation on the fiat side might account for digital currency as part of money flowing through the hybrid economy.
Trust is a sensitive topic. On the digital currency side, trust is strong and decentralized for transactions, but that doesn’t mean trust of specific parties is altogether absent.
Whether it’s trust of the peer review and open development meritocracy of the core implementation code, or trust of a custodial service to manage keys, or trust of a piece of local software to manage wallets, or trust of an exchange service to protect fiat gateway and personal information; except for the actual transaction validation and confirmation, some trust of strangers is still implied, even in bitcoin.
When it comes to trust of such parties in the world of state, a long line of laws and regulations is designed to protect consumers. Although large institutions have famously breached that trust, formal consumer protections more often than not do protect consumers from fraudulent charges and provide a ‘lender of last resort’.
The same is not quite true of digital currency, as the loss or theft of keys is more akin to the loss of cash than to a fraudulent charge.
It’s not a simple matter of whether to trust digital currency vs traditional banks or card networks, but a matter of which one to trust, for what specific purpose, at what time and for what amount. Taking control of our own money involves making responsible decisions about trust.
Digital currency’s push model, identity protection features, decentralized transaction clearing and easily-audited open ledger make it trustworthy for payments, especially as its transaction throughput increases.
At the same time, custodial implications for exchanges, service providers and software developers can make traditional institutions trustworthy partners for other kinds of asset storage for mainstream users. Money can happily flow between both.
Gateways to a new world
Gateway to a new worldGateways throttle the flow. In a hybrid economy, customers and merchants alike must be able to get into and out of digital currency quickly, easily and securely.
In a pure payment scenario, a customer wants to acquire bitcoins using fiat instantly, execute a payment immediately after acquiring them, and, at some point shortly thereafter, the merchant wants to acquire fiat in exchange for those bitcoins. This is not the only valid scenario, but it’s helpful as a lens for discussion.
A gateway enabling that scenario must meet several challenges. For mainstream users, the gateway cannot be a trading desk, exposing an order book and price spikes to users through a bid/ask metaphor; the transition must feel seamless in design.
This entails some short-term credit risk for the gateways. Bitcoins credited to customers immediately can be spent and never recovered, while the credit card charges used to acquire the bitcoins can be reversed.
Also, in a scenario in which fiat is traded for bitcoins, bitcoins are transferred from one address to another, and then immediately traded back into fiat – bitcoin is not always much of an optimization because the one transaction may not always be sufficient to overcome the fees at the two gateways.
The threshold at which paying digitally becomes valuable fluctuates across use cases for different domains, and for different goods and services within domains.
When multiple bitcoin transactions occur before trading back into fiat, the optimization increases. The more transactions introduced into the digital chain before exchange into a gateway, the greater the increase in value of bitcoin (as for any full reserve model applied to increasing transaction velocity against a finite resource) and the greater the optimization through fee avoidance — but the AML risks also increase.
Moreover, if the gateway holds fiat on behalf of customers, then the gateway must be a bank. If the gateway merely transfers and does not hold fiat funds, then the gateway must have a banking partner.
Partnering with a bank is no trivial task. Bank risk departments can be far more conservative than state regulators. Transacting bitcoin from one address to another, whether for remittance purposes or for the exchange of goods and services, cannot always enforce KYC, AML or anti-fraud rules. Banking partners are either comfortable with these cash-like traits or they’re not. These days they’re mostly not, and this hinders gateway innovation considerably.
So mainstream gateways will need to manage short-term credit risk, potentially on a per-individual basis, while also simplifying the forex trading function, optimizing gateway fees, satisfying a banking partner and addressing AML policies – all while speeding up exchange and transaction throughput. A tall order. Capable, responsible, experienced innovators required.
Although the challenges for such a gateway are great, the reward is even greater: transform disparate economies into a global hybrid economy and grow digital currency into lasting evolution rather than shadowy revolution.
It will require some time, and in the end it’s possible that bitcoin may prove to be more like NCSA Mosaic is to Google’s Chrome, an early informative breakthrough instead of what we’re all actually using 20 years later, but that would still equate to smashing success and world-changing innovation, and it’s illogical and unwise to bet against innovation.
Current Criticisms of Bitcoin Are at Least 10 Years Too Early
Scott Rose (@scotty321) | Published on March 9, 2014 at 12:36 GMT | Analysis
Scott Rose is a professional actor, host, writer, and comedy improviser living in Austin, Texas, and was one of the top professional speakers for Apple Computer at its events nationwide for six years. He is the creator of the viral hit video series Shit Apple Fanatics Say. He recently released his video series Shit Bitcoin Fanatics Say. Follow him on Twitter @scotty321.
The mainstream media often overlooks all the amazing and positive developments that are happening in the bitcoin world, as well as the incredibly innovative and supportive community that is building around bitcoin. To paraphrase Mark Twain: “The reports of bitcoin’s death have been greatly exaggerated.”
Any criticisms of bitcoin at this point are at least 10 years too early. Bitcoin is in its infancy. Criticizing bitcoin today would be like criticizing email in 1985, which was the first year that I started sending emails. That was at least a decade or more before the world really caught up and email started becoming ubiquitous.
Early email
I was trying to get everyone that I knew onto email in the 80s, but it was too early. The technology hadn’t matured enough yet. People’s eyes just glazed over when I told them about email. It made absolutely no sense to anyone I knew at the time, nor did there seem to be any reason for email.
It sounds so silly to even say that now, but it was truly a completely foreign concept that seemed to have absolutely ZERO value proposition at the time. Even if you could come up with some fanciful reason to send an email, who were you going to email anyways? Barely anybody had an email address!
On top of this, email was extremely slow (dial-up modems at 1200 baud) and extremely expensive ($300 to buy your modem, then CompuServe cost $30 per hour, and there was no such thing as composing an email offline – if you were typing up an email, you were paying).
Email was also extremely complicated (my email address was a set of numbers like “78704,6572″ and you could only email me if you were using the CompuServe service yourself), and people thought email was just a fad (some local computer shop owner yelled at me over the phone when I asked him to email me a price list, telling me that he would never waste his time on email because it took 20 times longer than a phone call).
On the contrary, I loved email because I worked as a 13-year-old writer for Enter Magazine, one of the first computer magazines, and they bought my modem for me and paid for my CompuServe account. Because they were paying, I was logged on three or four hours per day. They required that all my magazine articles be emailed to them via CompuServe.
Maturity
There were a bunch of legitimate reasons to criticize email in 1985, because it wasn’t fully mature yet. Bitcoin isn’t fully mature yet either, but it is evolving rapidly.
“There were a bunch of legitimate reasons to criticize email in 1985, because it wasn't fully mature yet.”
When bitcoin evolves to a certain point, the masses will suddenly wake up to an incredible future that empowers all of us in ways that we can’t even imagine today.
In the 80s, people had absolutely no idea how important email would become, and today, we still don’t even know what bitcoin will become in the future.
Like I say in ‘Shit Bitcoin Fanatics Say: Video #1′, currency is just the first app of the bitcoin network. The genie is out of the bottle now, and there’s no going back.
Bitcoin is so much in its infancy right now that we truly haven’t even begun to see anything yet. All the best brains in technology are talking about bitcoin now, can you even imagine what the future will hold?
Hearing about bitcoin
I first heard mumblings about bitcoin in late 2012, but I didn’t really pay much attention to it at the time. It didn’t really click for me that bitcoin was something special until early 2013, when I learned that WikiLeaks was still able to receive donations via bitcoin – even though all the major credit card companies had prohibited them from receiving donations.
Next I read about the Cyprus banking shenanigans, where they arbitrarily took money out of everyone’s savings and froze accounts for large withdrawals. That’s when the lightbulb turned on in my head. I suddenly realized the value of a decentralized currency. I suddenly realized what it meant to be outside the control of a central authority that can censor whatever it decides it doesn’t like. I suddenly realized that bitcoin represents freedom.
I suddenly realized that many of the qualities that I stand for in my life (such as integrity, honesty, transparency, peace, and freedom) can all be reinforced and supported by a decentralized network like bitcoin. As I say at the end of Video #1, I really am in this to change the world. I am the starry-eyed dreamer who sees the ideals in all of this.
But even just from a currency point-of-view, the gears really started turning in my head. I started questioning everything, like why do I have to constantly exchange currency every time I travel to a foreign country? And why are my credit cards charging me exorbitant international fees and unfair exchange rates every time I make credit card purchases in other countries? And why are my clients still sending me checks via postal mail and then I have to wait while my bank puts holds on large deposits? And why do I have to work around banking hours? And is my US dollar really funding wars I don’t approve of?
Those questions were just the tip of the iceberg. Bitcoin made me start questioning everything. And the questions will continue for a lifetime.
Scott Rose (@scotty321) | Published on March 9, 2014 at 12:36 GMT | Analysis
Scott Rose is a professional actor, host, writer, and comedy improviser living in Austin, Texas, and was one of the top professional speakers for Apple Computer at its events nationwide for six years. He is the creator of the viral hit video series Shit Apple Fanatics Say. He recently released his video series Shit Bitcoin Fanatics Say. Follow him on Twitter @scotty321.
The mainstream media often overlooks all the amazing and positive developments that are happening in the bitcoin world, as well as the incredibly innovative and supportive community that is building around bitcoin. To paraphrase Mark Twain: “The reports of bitcoin’s death have been greatly exaggerated.”
Any criticisms of bitcoin at this point are at least 10 years too early. Bitcoin is in its infancy. Criticizing bitcoin today would be like criticizing email in 1985, which was the first year that I started sending emails. That was at least a decade or more before the world really caught up and email started becoming ubiquitous.
Early email
I was trying to get everyone that I knew onto email in the 80s, but it was too early. The technology hadn’t matured enough yet. People’s eyes just glazed over when I told them about email. It made absolutely no sense to anyone I knew at the time, nor did there seem to be any reason for email.
It sounds so silly to even say that now, but it was truly a completely foreign concept that seemed to have absolutely ZERO value proposition at the time. Even if you could come up with some fanciful reason to send an email, who were you going to email anyways? Barely anybody had an email address!
On top of this, email was extremely slow (dial-up modems at 1200 baud) and extremely expensive ($300 to buy your modem, then CompuServe cost $30 per hour, and there was no such thing as composing an email offline – if you were typing up an email, you were paying).
Email was also extremely complicated (my email address was a set of numbers like “78704,6572″ and you could only email me if you were using the CompuServe service yourself), and people thought email was just a fad (some local computer shop owner yelled at me over the phone when I asked him to email me a price list, telling me that he would never waste his time on email because it took 20 times longer than a phone call).
On the contrary, I loved email because I worked as a 13-year-old writer for Enter Magazine, one of the first computer magazines, and they bought my modem for me and paid for my CompuServe account. Because they were paying, I was logged on three or four hours per day. They required that all my magazine articles be emailed to them via CompuServe.
Maturity
There were a bunch of legitimate reasons to criticize email in 1985, because it wasn’t fully mature yet. Bitcoin isn’t fully mature yet either, but it is evolving rapidly.
“There were a bunch of legitimate reasons to criticize email in 1985, because it wasn't fully mature yet.”
When bitcoin evolves to a certain point, the masses will suddenly wake up to an incredible future that empowers all of us in ways that we can’t even imagine today.
In the 80s, people had absolutely no idea how important email would become, and today, we still don’t even know what bitcoin will become in the future.
Like I say in ‘Shit Bitcoin Fanatics Say: Video #1′, currency is just the first app of the bitcoin network. The genie is out of the bottle now, and there’s no going back.
Bitcoin is so much in its infancy right now that we truly haven’t even begun to see anything yet. All the best brains in technology are talking about bitcoin now, can you even imagine what the future will hold?
Hearing about bitcoin
I first heard mumblings about bitcoin in late 2012, but I didn’t really pay much attention to it at the time. It didn’t really click for me that bitcoin was something special until early 2013, when I learned that WikiLeaks was still able to receive donations via bitcoin – even though all the major credit card companies had prohibited them from receiving donations.
Next I read about the Cyprus banking shenanigans, where they arbitrarily took money out of everyone’s savings and froze accounts for large withdrawals. That’s when the lightbulb turned on in my head. I suddenly realized the value of a decentralized currency. I suddenly realized what it meant to be outside the control of a central authority that can censor whatever it decides it doesn’t like. I suddenly realized that bitcoin represents freedom.
I suddenly realized that many of the qualities that I stand for in my life (such as integrity, honesty, transparency, peace, and freedom) can all be reinforced and supported by a decentralized network like bitcoin. As I say at the end of Video #1, I really am in this to change the world. I am the starry-eyed dreamer who sees the ideals in all of this.
But even just from a currency point-of-view, the gears really started turning in my head. I started questioning everything, like why do I have to constantly exchange currency every time I travel to a foreign country? And why are my credit cards charging me exorbitant international fees and unfair exchange rates every time I make credit card purchases in other countries? And why are my clients still sending me checks via postal mail and then I have to wait while my bank puts holds on large deposits? And why do I have to work around banking hours? And is my US dollar really funding wars I don’t approve of?
Those questions were just the tip of the iceberg. Bitcoin made me start questioning everything. And the questions will continue for a lifetime.
Mt. Gox Hackers Claim to Release Transaction Details, CEO’s Personal Data
Jon Southurst (@southtopia) | Published on March 9, 2014 at 23:08 GMT | Companies, Exchanges, Mt. Gox
Hackers (or disgruntled insiders) claim to have released a 700+MB file of Mt. Gox operational information and transaction data, including one sheet claiming the exchange could still have a balance of over 951,116 BTC.
One of the hackers managed to post the data on Gox CEO Mark Karpeles’ own blog, then announced the feat on Reddit. Karpeles’ site has since gone completely offline and Reddit moderators deleted the original post. At press time the mods were engaged in a cat and mouse game with other community members who re-posted the original quote and several links claiming to be mirrors of the stolen data.
Revenge
In a profane rant, the original announcement said:
“It’s time that MTGOX got the bitcoin communities wrath instead of Bitcoin Community getting Goxed. This release would have been sooner, but in spirit of responsible disclosure and making sure all of ducks were in a row, it took a few days longer than would have liked to verify the data.”
“Included in this download you will find relevant database dumps, csv exports, specialized tools, and some highlighted summaries compiled from data. Keeping in line with fucking Gox alone, no user database dumps have been included.”
“Repost and share this info before it’s gone. Lots of people, including us, lost money and coins.”
Of primary interest to others was a file called ‘trades_summary’, which purported to show Mt. Gox’s balances in all available currencies. This showed a balance of 951,116.21905382 bitcoins, with an accusation that Karpeles was lying about his company having no bitcoins to return to customers.
Screen Shot 2014-03-10 at 7.39.15 AM
Many have pointed out that, even if the data is genuine, it could only represent the amount Mt. Gox believed it had in its reserves before shutting down, rather than an actual amount, and is not evidence of actual reserves.
Also included in the dump were a collection of .csv files detailing transactions and trades, Mark Karpeles’ own CV and a document containing two separate ‘home addresses’ of his in Tokyo.
The directories contained several executable files that readers would be well advised not to open on internet connected computers, no matter how many online commenters claimed their authenticity. Supposedly they are Mt. Gox’s own proprietary back office tools, though CoinDesk has not verified this and original files could have been altered before being posted on mirror sites.
screenshot
Reddit users claim to have verified the data by examining spreadsheet material and looking up their own account balances.
Forbes reported that another post on the bitcointalk forums (also since deleted) claimed to have 20GB of stolen Gox data on a hard drive that they were willing to sell to cover their bitcoin losses. This supposedly included all user information, including photo ID scans from customer applications.
CoinDesk is monitoring this developing story and will post any new and relevant information if it becomes available.
Jon Southurst (@southtopia) | Published on March 9, 2014 at 23:08 GMT | Companies, Exchanges, Mt. Gox
Hackers (or disgruntled insiders) claim to have released a 700+MB file of Mt. Gox operational information and transaction data, including one sheet claiming the exchange could still have a balance of over 951,116 BTC.
One of the hackers managed to post the data on Gox CEO Mark Karpeles’ own blog, then announced the feat on Reddit. Karpeles’ site has since gone completely offline and Reddit moderators deleted the original post. At press time the mods were engaged in a cat and mouse game with other community members who re-posted the original quote and several links claiming to be mirrors of the stolen data.
Revenge
In a profane rant, the original announcement said:
“It’s time that MTGOX got the bitcoin communities wrath instead of Bitcoin Community getting Goxed. This release would have been sooner, but in spirit of responsible disclosure and making sure all of ducks were in a row, it took a few days longer than would have liked to verify the data.”
“Included in this download you will find relevant database dumps, csv exports, specialized tools, and some highlighted summaries compiled from data. Keeping in line with fucking Gox alone, no user database dumps have been included.”
“Repost and share this info before it’s gone. Lots of people, including us, lost money and coins.”
Of primary interest to others was a file called ‘trades_summary’, which purported to show Mt. Gox’s balances in all available currencies. This showed a balance of 951,116.21905382 bitcoins, with an accusation that Karpeles was lying about his company having no bitcoins to return to customers.
Screen Shot 2014-03-10 at 7.39.15 AM
Many have pointed out that, even if the data is genuine, it could only represent the amount Mt. Gox believed it had in its reserves before shutting down, rather than an actual amount, and is not evidence of actual reserves.
Also included in the dump were a collection of .csv files detailing transactions and trades, Mark Karpeles’ own CV and a document containing two separate ‘home addresses’ of his in Tokyo.
The directories contained several executable files that readers would be well advised not to open on internet connected computers, no matter how many online commenters claimed their authenticity. Supposedly they are Mt. Gox’s own proprietary back office tools, though CoinDesk has not verified this and original files could have been altered before being posted on mirror sites.
screenshot
Reddit users claim to have verified the data by examining spreadsheet material and looking up their own account balances.
Forbes reported that another post on the bitcointalk forums (also since deleted) claimed to have 20GB of stolen Gox data on a hard drive that they were willing to sell to cover their bitcoin losses. This supposedly included all user information, including photo ID scans from customer applications.
CoinDesk is monitoring this developing story and will post any new and relevant information if it becomes available.
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