Atlanta, Georgia-based bitcoin processor BitPay has announced the beta launch of Bitcore, a new open-source project that it says will allow app developers to more easily build projects on the bitcoin network.
Bitcore represents a break from BitPay’s processor plugins, as the JavaScript library is designed not for merchants, but to encourage “more developers to build software that interfaces directly with the real bitcoin network”.
BitPay broke the news via blog post, stating:
Last weekend in Mumbai, digital currency enthusiast Vishal Gupta gave out free dogecoin to the 45 participants that showed up to his monthly meet-up.
At least half of the attendees at this event were fresh faces, just getting introduced to the cryptocurrency ecosystem.
“The point of giving out free dogecoin is to get people comfortable with the idea of using digital currency,” said Gupta.
Mt. Gox has stopped bitcoin deposits and all internal bitcoin transfers for a short site maintenance update, roughly from 6pm to 12am Japan time on 15th February.
According to a notice posted on Gox’s News page, the downtime is part of its implementation of a solution to the ‘transaction malleability‘ issue that has seen the exchange halt all external bitcoin withdrawals and face criticism from some sectors of the bitcoin economy.
The downtime probably won’t affect too many users. With Gox’s bitcoin price now hovering around the $342 mark (at least $300 below the CoinDesk BPI) and the exact situation regarding bitcoin withdrawals still unknown, it’s not very likely people are trying to move coins into the exchange right now. Internal transfers can probably also wait a short while.
Last week, I sat down with Roger Ver for an exclusive, hour-long interview where we discussed his company Blockchain, his team, and his vision for the bitcoin industry.
We first connected after Ver came across a blog post of mine in which I dismissed Blockchain as “too understaffed and undercapitalized” to compete with the likes of Coinbase and Circle, long-term.
The man, who many have started to refer to as “Bitcoin Jesus”, emailed me with some objections and let me know that Blockchain had tripled the size of its team in just over a month while continuing to lead the industry in web traffic, wallet users and bitcoins stored. “By just about any metric, we are the #1 Bitcoin website in the world,” he wrote.
J.P. Morgan may be highly skeptical about the prospects for bitcoin, but at least one financial research firm is behind the virtual currency. Institutional brokerage Wedbush Securities has become the first to accept bitcoin payments in the US.
Los Angeles-based Wedbush has thus far published two reports on bitcoin through its Wedbush Equity Research operation. At the start of December, it released “Bitcoin: Intrinsic Value As Conduit For Disruptive Payment Network Technology”. It followed this up with “Digitizing Trust: Leveraging the Bitcoin Protocol Beyond the Coin” a month later.
“At this point in time, the bigger institutions have a negative knee-jerk reaction.”
The US Financial Crimes Enforcement Network (FinCEN) released new guidance on 14th February for financial institutions seeking to provide services to marijuana-related businesses, ending a long silence that has caused confusion among those in both industries.
FinCEN indicated that financial services companies can now work with marijuana-related businesses in states where the drug has been legalized for medical or recreational purposes. This is provided it is “in a manner consistent with their obligations to know their customers and report possible criminal activity”.
Authorities in Miami recently arrested two men in what may be the first instance of citizens being charged under state law for engaging in “too-large” bitcoin transactions. The two were contacted by undercover officers who were looking to exchange $30,000 dollars each for bitcoin, an amount which violates the state’s money laundering laws. According to Miami-Dade State Attorney Katherine Fernandez Rundle, undercover police officers conducted the stings looking for “individuals engaged in high volume Bitcoin activity.”
It’s difficult to imagine a world in which undercover officers targeting people engaged in voluntary exchanges is a good use of law enforcement resources. Earlier this year, police in Florida found over 100 untested rape kits, some of which have been sitting in storage, untouched, since 2005. The state has 11 of the 100 most violent cities in America.
Florida’s anti-money laundering law makes exchanges above $10,000 illegal without offering information to the government. The state also forbids frequent unlicensed transactions of more than $300 but less than $20,000 in any 12-month period.
The prosecutor’s office justified using resources to seek out bitcoin users by claiming that“Bitcoins are often seen as a perfect means of laundering dirty money or for buying and selling illegal goods, such as drugs or stolen credit card information.” Indeed, the state claims one undercover agent told one of the arrested men, nicknamed Michelhack, that he wanted to use the Bitcoin to purchase stolen credit cards online.
But as Katherine Mangu-Ward has noted for Slate, bitcoin is far from an ideal, or even particularly popular, method for laundering money.
Money laundering is the process of throwing needles into a haystack. The idea is to lose dirty cash in a jumble of legitimate transactions. About $8 billion worth of transactions were conducted in bitcoin from October 2012 to October 2013. During 2012, Bank of America processes $244.4 trillion in wire transfers and PayPal processed $145 billion. The bitcoin haystack just isn’t big enough or messy enough to be a useful place to launder money right now. A better option: cash-heavy businesses, such as casinos or—yes—laundromats.
“High level international cybercriminals have not by-and-large gravitated to the peer-to-peer cryptocurrency, such as bitcoin,” Secret Service Special Agent Edward Lowery said. “Instead, they prefer “centralized digital currency” that is based somewhere with looser regulations and lazier enforcement.
Jon Matonis has called money laundering the thoughtcrime of finance. Buying into the idea that citizens owe the state of Florida an explanation for voluntarily selling bitcoin for dollars means, in practice, that everyone owes it to the government to get involved in enforcing other laws.
Perhaps the trade would be worth it if money laundering laws helped the state prosecute violent criminals. But that’s not the case. Most laundered money is used in crimes whose violence stems from their being illegal, such as gambling and the drug trade.
At no point should the citizens of Florida owe it to the government to divulge information on voluntary transactions. That the law is written this way is totally inappropriate. Money laundering laws violate privacy, are extremely expensive to comply with, are incredibly ineffective as a means to thwart other crimes. But that Florida authorities are actually seeking out peaceful bitcoin sellers to ensnare for failing to give up information is especially galling. Florida officials are wrong in their assessment of bitcoin, and they’re wrong to apply badly-written laws in an effort to quash it. Charges against these two men should be dropped immediately, and the laws rewritten to reflect useful priorities for law enforcement.
The post Florida’s Bitcoin Sting Should Cast Doubt on Law Enforcement’s Priorities and Money Laundering Laws appeared first on Bitcoin Magazine.
Today MtGox – one of the biggest exchanges – published a press release stating that they’re temporarily pausing Bitcoin withdrawals.
For more news you’ll probably have to wait until Monday, February 10, 2014:
Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).
I didn’t endorse MtGox in public, but that’s mainly because they’ve been in control of the vast majority of the Bitcoin market for a long time and this caused some trouble for them and the Bitcoin community.
However I do trust MtGox to do the right thing and I will definitely support them in case they are in trouble.
I have chatted with Mark Karpelès (current CEO of MtGox) online several times – even before he became the owner of MtGox and he’s definitely not the kind of person who wants to cause this kind of inconvenience.
MtGox is also a founding member and major supporter of the Bitcoin Foundation – and this foundation is paying Gavin Andresen to maintain the source code of the Bitcoin client*.
*I’m referring to the first Bitcoin client – developed by Satoshi Nakamoto.
Though we have only hints at what regulation could result from last month’s NYDFS hearing in New York, members of both sides largely agree the dialogue did much to improve relations between New York regulators and the bitcoin community.
Despite the steps forward, however, recent actions taken by the state’s southern neighbor New Jersey suggest that US law enforcement is going the extra mile to try and prevent any potential bitcoin threats, no matter how dubious.
In a controversial move, the New Jersey Division of Consumer Affairs issued a subpoena this December against Jeremy Rubin, a 19-year-old bitcoin developer and MIT student, who, along with three other students, has created an innovative computer code called Tidbit.
Newly released research from the MIT Technology Review, a faculty-run university magazine, suggests that bitcoins are increasingly being spent, not hoarded, by users after purchase.
The data illustrates that the number of unspent bitcoins has declined drastically from 2009, when nearly half of all bitcoins were held for the entire first year of ownership. Today, the vast majority of bitcoins purchased are spent within 24 hours, the findings suggest.
The results led the researchers to conclude:
Several years ago some banks in my country suggested to take out a loan denominated in Swiss francs or Japanese Yen instead of our own currency – however at some point the exchange rate of those currencies didn’t perform as expected and many people were supposed to repay a real lot of money.
Just like people borrowed a foreign currency in those years – while they’re actually using a different type of currency – some people bought a lot of Bitcoins expecting to make a lot of money without contributing in terms of products or services.
Some technical issues of Bitcoin exchanges were just the trigger for a large correction, but of course there’s a lesson to be learned: Live your investment!
There are some people who are doing this for quite a while – like Gavin Andresen – who is not only getting paid in Bitcoin, but also uses them to purchase the things he wants. Another good example is Patrick M. Bryne – the CEO of Overstock – who is invested in Bitcoin and is offering the products of his company for Bitcoin.
Bitstamp has revealed it plans to start processing its customers’ bitcoin withdrawals again later today, but BTC-e revealed it is not yet ready to do so.
The exchanges halted bitcoin withdrawals earlier this week after it was discovered a bot had launched a massive DDoS attack on a number of bitcoin exchanges.
A tweet from the BitStamp this morning read:
Something about bitcoin inspires people to jump on airplanes and fly to the other side of the world to protect their wealth. Maybe that’s part of bitcoin’s ‘inherent value’.
Kolin Burges was a software developer in London until the end of last year, when his vast Litecoin holdings suddenly went lunar. Concerned at the prospect of a Chinese New Year crash he moved much of his wealth back to Japan and Mt. Gox, only to find it locked in there around the same week.
Inspired by last week’s three-day sit-in protest by Australia’s pseudonymous CoinSearcher, Burges bought a last-minute ticket (at the cost of £850) and flew 12 hours from London to Tokyo to see for himself what was happening. He said:
1.Coinbase
Coinbase is not just a place to buy and sell Bitcoins, but you can also use them as an online wallet - or, if you own a company you can use their tools to accept Bitcoin payments.
+ Android app available
+ All-in-one solution for acquiring, using and accepting Bitcoin
- U.S. bank accounts only
- Credit card (Visa) required if you want to buy or sell more than $3,000 per day
2.CampBX
CampBX is a Bitcoin trading platform without merchant tools, but advanced trading options (Margin trading, Stop-Loss orders, etc.).
+ Advanced trading options
- Only allows money orders from USPS, MoneyGram and WesternUnion at the moment.
3.VirWoX
VirWoX is not a typical Bitcoin exchange - it started in 2007 as an exchange for Second Life Lindens - in 2011 they added Bitcoin, but you need to buy Second Life Lindens first and then you can use them to buy Bitcoins.
+ 7 years of experience in online currency trading
+ Many payment options available (PayPal, Credit Card / Debit Card, Neteller, Ukash, Paysafecard and others)
- High fees due to the risk of some payment options
4.LocalBitcoins
LocalBitcoins is not a Bitcoin exchange, but an escrow service with an integrated rating system for your trades with other people.
+ You could make some new friends there, if there’s a listing in your area.
+ People are willing to accept many different types of payments.
- It’s not the place for everyone as it requires you to find honest trading partners on your own.
- It might take a while to find someone who is willing to trade with you.
I’ve personally used all these services and they all support Two-Factor-Authentication with Google Authenticator.
Title: Satoshi Nakamoto
Artist: Michał Cander (Poland)
Size: 65x80cm (25.6x31.5in)
Type: Oil on canvas
Source: michalcander.pl
Today we’re excited to announce a new partnership with Mint , the leading personal finance app from Intuit Inc. Now Mint users will be able to view their digital bitcoin transactions processed by Coinbase alongside their traditional financial accounts.
As you may know, Mint…
Head over to http://t.co/C28LU4ISYx and check out their BTC micropayment experiment via @BitWall @Suntimes! #bitcoin http://ift.tt/1fKDMsd
— Blockchain.info (@blockchain) February 1, 2014
Namecoin is a Bitcoin derivative that allows you to register names and data into a public blockchain. It bypasses going through central agencies that can take down your websites by removing the DNS entry.
Namecoin isn’t one of these dozens of “me too!” cryptocurrencies popping up each day. In fact, Namecoin is barely even used as a currency, althought have very high value for a non-bitcoin cryptocurrency. That’s not its reason for existence. It exists to register domain names that can be used around the world without relying on government-controlled entities who can delete anything at a whim.
Viral Electron Chaos Laboratories (which includes one of the developers of Namecoin) have already released a working beta of FreeSpeechMe, a plug-in that allows easy viewing of Dot-Bit (.bit) sites without any tech experience. They’ve also written tutorials on their site for using the plug-in, registering Dot-Bit domains (which currently cost about ten cents U.S. each), and tutorials for webmasters to set up Dot-Bit versions of the Dot-Com or other TLD sites.
The plug-in is free, and is currently available for Windows and GNU/Linux, with additional versions planned for Mac and Android. The source code is also on the FreeSpeechMe website, so anyone may examine it and even create derivations as they wish.
Dot-bit (.bit) are domains registered into a decentralized and public Namecoin blockchain. This is the opposite of all the other centralized top-level domains like Dot-Com, Dot-Net, Dot-ES, Dot-UK, Dot-DE, etc. Those are all controlled by authorities and are frequently censored by governments around the world without any Due Process and with no recourse for the domain owner.
FreeSpeechMe can change the game and the rules of the Internet the way we’ve come to accept them.
For an Internet user, typing bitcoinmagazine.com or bitcoinmagazine.bit into a browser will bring you to the same website, as they probably go there from a link, bookmark, or auto-fill anyway. There is, however, a critical difference between the two urls; the first one can suffer censorship of governments and corporations, the second one cannot.
Here are the advantages of Dot-bit and the FreeSpeechMe plug-in:
When you register a Dot-bit domain, everyone in the world with FreeSpeechMe can see the website in 3 hours, in contrast to traditional and centralized systems that can take up to 72 hours.
The system is decentralized, so that people have more protection from censorship. Dot-Bit domains can’t be removed from an authority contacting ICANN or other central systems.
If a web host takes a website down (with a demand from some central authority), the website owner can move the files to another server (even in another nation) and be viewable worldwide in 40 minutes.
TOR compatible, now will be easy to remember a domain in the Tor network!
The person registering the domain has name privacy without paying more. (This requires the domain owner being careful. Otherwise authorities could use traffic analysis and action analysis to find the owner. But it can be done.).
Easy to install (much easier than DNS setting configuration. And FreeSpeechMe does NOT change your DNS settings)
More secure; avoids DNS Hijacking and other attacks.
Dot-Bit registrations are much less expensive than other top-level domains.
With this crowdfunding campaign, the FreeSpeechMe team is looking to raise $50k (US), in cash, Bitcoin, or Namecoin. Reaching this goal will allow more Dot-bit use beyond Firefox, improvements on integration with Tor Browser and other anonymous networks, implementing new-generation Transport Layer Security, solutions for current issues, and many other improvements. It will also be used to help promote widespread adoption of FreeSpeechMe and Dot-Bit, which are critical to this system keeping the Internet out of the wrong hands.
This fundraising goal is still open. If they receive more funds they will continue improving new interesting features for Namecoin and FreeSpeechMe as:
Update the Namecoin code (currently based on Bitcoin 0.3.x)
Improve scalability (Resolve domains without need of download and processing blockchain)
Automatic renewal of domains
Cold-storage (porting armory)
Optimize speed (Although now Dot-it is much faster than other top-level domains)
Better blockchain anonymity (e.g. implementing Zerocoin)
Blockchain privacy (using encryption for obscure domain-owners data)
Improve better implementation of NameID; decentralized single sing-on system based on Namecoin.
SSH client integration
If you can’t wait and you want to register Dot-Bit domains or configure your website you can learn how at www.freespeechme.org, where they are also asking for donations in Bitcoin and Namecoin.
The post FreeSpeechMe: The new Anti-Censorship and Secure Domain Resolving Namecoin-Based Plug-in appeared first on Bitcoin Magazine.
Dark market web site Silk Road 2 has told customers that all of their bitcoins are gone after a massive hack, in which at least 4476 bitcoins are believed stolen. Organizers at the site are blaming the compromise on the transaction malleability attack in the news this week.
“Our initial investigations indicate that a vendor exploited a recently discovered vulnerability in the Bitcoin protocol known as “transaction malleability” to repeatedly withdraw coins from our system until it was completely empty,” said a post from Defcon, one of the site’s moderators, on a forum, located on the Tor network.
The post added that thieves attacked after the organizers of the site took too long to respond to widespread industry concern about the transaction malleability attack. “Despite our hardening and pentesting procedures, this attack vector was outside of penetration testing scope due to being rooted in the Bitcoin protocol itself,” it said.
This morning, I awoke to an individual on Twitter letting me know, in no uncertain terms, that bitcoin and social issues were unrelated. Since literally everything is related to everything else in some way, I’ll assume what he meant is that bitcoin and social issues are particularly far apart in terms of overlap.
This is of course absurd. While “social issues” is a term which needs to be defined prior to further discussion, the “social issues” that particularly interest me are issues of poverty, class, mobility, equality of opportunity and access to resources.
Access to banking and credit
Credit is one of humankind’s most important innovations. The introduction and mainstreaming of lending at a profit is directly responsible for untold wealth creation and innovation. However, currently, access to credit is anything but evenly distributed.
Bitcoin addresses this inequity in two ways. First, it offers banking to millions who otherwise are not able to access traditional banking services. In America alone, up to a third of the population is unbanked or underbanked. Regulations and risk combine to ensure that offering services to certain segments of the population is unprofitable. Bitcoin vastly decreases the cost and risk of extending those services to people with low-incomes and poor credit scores.
Second, the Bitcoin protocol offers the promise of Smart Contracts. By creating and enforcing contracts through the blockchain instead of the state, people who currently don’t have access to credit will be able to enjoy vehicles, places to live, and other necessities, allowing entrance into the middle class.
Remittances and fighting oppressive regimes
The ability to transfer money globally is a very powerful tool in the fight against poverty. Currently, the process is extremely slow and expensive. Bitcoin offers instant, nearly-free overseas remittances.
In addition, bitcoin offers an escape hatch to people trapped under oppressive regimes. For example, the price of bitcoin spiked when people began moving their money from bank accounts to bitcoin in Cyprus after the government announced plans to seize cash from the country’s bank accounts.
Charity
The subreddit /r/Bitcoin makes up the vast majority of funding for Florida’s most effective and innovative homeless shelter, Sean’s Outpost, whose operating budget is almost entirely made up of bitcoin donations by reddit users. In addition, the BitGive Foundation exists to harness bitcoin’s tremendous power to innovate the way we tackle charitable giving.
Bitcoin is no panacea. A term like social issues is clearly meant to encompass a huge swath of legitimate concerns, some of which are more closely related to bitcoin than others. However, the idea that bitcoin and cryptocurrency is somehow unrelated to the social would have to rest upon the contention that concerns like access to credit, global poverty and oppressive regimes are not social issues. On the contrary, there is nothing more social than a voluntarily transaction. And giving more people worldwide access to mutually beneficial exchange is one of the most important social issues a system could take on.
The post Bitcoin’s Impact On So-Called Social Issues appeared first on Bitcoin Magazine.
Bitcoiners can now pay cash for bitcoins at 28,000 shops across the UK, thanks to a new service set up by ZipZap.
A new exchange for trading gold bullion and bitcoin is set to open on 21st February.
The Bullion Bitcoin exchange, based in London, will allow sophisticated investors, as defined by the UK financial regulator, to trade gold bullion and bitcoin. The exchange will not be open to retail investors.
Adam Cleary, Bullion Bitcoin’s owner said:
Signals are emerging that Canada is about to tighten its grip on bitcoin and other decentralized digital currencies. The country’s finance minister Jim Flaherty singled out bitcoin by name in his federal budget today, and announced forthcoming laws that would regulate it.
“It is important to continually improve Canada’s regime to address emerging risks, including virtual currencies, such as Bitcoin, that threaten Canada’s international leadership in the fight against money laundering and terrorist financing,” said Flaherty in the budget document.
The budget went on to promise “anti-money laundering and anti-terrorist financing regulations for virtual currencies, such as Bitcoin.”
On 11th February, more than 200 students crammed into a 125-person lecture hall at the Massachusetts Institute of Technology (MIT) to listen to entrepreneur Jeremy Allaire speak about bitcoin.
It was standing room only as the Circle founder and CEO informed the crowd of his background, his company and his passion for the fledgling industry for nearly 90 minutes.
Although the MIT Bitcoin Club was only officially recognized by the university on 1st January, it is already one of the largest student-run cryptocurrency groups in the country.
Online outlet store Overstock.com is to launch a special rewards program that will give bitcoin buyers a 1% cashback in the form of Club O dollars, the company’s in-house rewards points.
Speaking to CoinDesk, Overstock CEO Patrick Byrne said the scheme is expected to debut in approximately four weeks, although he did not commit to a definitive timeline.
The program will not provide an instant discount on orders, but will instead give 1% of the total purchase value back to buyers to be applied to future purchases. Byrne did not provide further details of how the program would work, or whether it will be able to be used in conjunction with other company rewards schemes.
This commentary was analyzed and written with Luke Dashjr.
Here is the infographic.
Commentary
#1 Bitcoins can be destroyed
To my knowledge I didn’t think they could be destroyed. I thought they could be lost forever and effectively made inaccessible by forgetting a password to an encrypted private key or destroying a hard drive. In those instances, the blockchain will always have a record of a lost Bitcoin. They can be moved around, divided, escrowed, but I was pretty sure they could not be destroyed. I spoke to Luke Dashjr, a bitcoin developer and creator of a decentralized mining pool named Eligius, and he brought up an interesting case where Bitcoins can be destroyed:
“They [Bitcoins] can, and have been destroyed completely, though doing so requires the explicit cooperation of a miner. Miners are not required to claim transaction fees (or the block subsidy, for that matter) and failure to claim them results in their complete destruction.”
#2 Edison’s Paper
Here is a link to his paper. It was written out of frustration with the introduction of the dollar system and newly created Federal Reserve system made in the early 1900s. There were other papers by Keynes and Strover that argued for a fiat based bank controlled financial system, but those authors were often labeled “inflationists”.
The system he wrote about was to preserve the well being of farmers and to be based on commodities they handled and could access easily. He writes about an example where the government could issue an interest free mortgage for $750 to farmers for $1,000 worth of wheat. To sell the wheat, the farmer would need to pay the government back the $1,000, but half of the value would be in cash and the other half would be the mortgage certificate allowing the government to sell the wheat at market prices.
#3 Top Holders
I didn’t believe Satoshi had 1.15 million Bitcoin, so I decided to follow the Genesis Block and see if I could verify this amount. The address associated with the first block reward was 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, which shows a total balance of close to 65 Bitcoins. I immediately wanted to make sure these numbers were in Bitcoin, so I went back and reviewed the claim that the Bitcoin Investment Trust (BIT) had 53,000 Bitcoins. According to the investor presentation at the BIT website, they actually secured 73,359 BTC in the fall of 2013, which were worth 62 million dollars at the time. The figures for the top holders are in Bitcoin, but some numbers may be incorrect.
After a few minutes of link hopping, I arrived at a familiar post by Sergio D Lerner claiming that Satoshi had over 1 million Bitcoins. He has these graphs as proof.
Lerner qualified this post and his images with a disclaimer saying, “Disclaimer: I can’t assure with 100% certainty that the all the black dots are owned by Satoshi”, but Sergio has had accurate and insightful articles in the past. He talks about Ethereum a bit in this post.
#4 Is Coinye dead?
I know most people won’t care if this altcoin has a pulse, but I checked and although the pulse is faint, Coinye is still living and breathing. It is being exchanged, it even has a tipping bot on reddit and youtube. And it is most certainly being mined. The Cease and Desist notices have crippled Coinye, but, if you will, it still is alive.
I am very interested in Coinye, because it is the first time a Cryptocurrency has been directly attacked. Other altcoins have been very inexpensive lessons for Bitcoin, like Terracoin’s 51% attack and Florincoin’s introduction of transaction messages.
Luke found a few more errors in the infographic that I’ll include here.
#5 Bitcoin transactions are instant;
Only confirmation takes an hour on average (contrasted with 6+ months for CC payments and a day for most wire transfers).
#6 Do countries really require disclosing private keys????
This still remains to be seen, but I have seen any information to confirm any country requires a cryptocurrency user to disclose their private keys. Even the FBI, after the Silk Road raid, hasn’t touched DPR’s stash of Bitcoins.
#7 Tracking Bitcoins (and heists) is much simpler than tracking any other currency, even if not always “easy”.
As is, the blockchain does make tracking Bitcoins much easier than using cash. Once an association is made between an individual and a public address, then all other transactions can be followed.
#8 Bitcoin is just as susceptible to money laundering etc. as every other currency, no more and no less…
Contrary to the previous point, if someone wanted to move a large amount of money in one country and access it in another, the blockchain is probably the fastest way to do so. There also also developments such as stealth wallets and the Dark Wallet project in the works that would make it even easier for a Bitcoin owner to hide their tracks.
I’ve contacted the author of the infographic and notified them of the items to be corrected.
The post Commentary on a Bitcoin Infographic appeared first on Bitcoin Magazine.
The Indian government has claimed that the Reserve Bank of India (RBI) is examining the legal and security ramifications of virtual currencies.
The Hindu reported that Indian Finance Minister P Chidambaram made the following statement to the Rajya Sabha, India’s Upper House of Parliament:
“The RBI is presently examining the issues associated with the usage, holding and trading of virtual currencies, including bitcoins, under the extant legal and regulatory framework of the country, including foreign exchange and payment systems laws and regulations.”
Of Mice and Shrem
Charlie Shrem’s arrest could not have have come at a worse time. The BitInstant founder and Bitcoin Foundation Vice Chairman was charged last week with conspiracy to commit money laundering, failure to report suspicious financial activities to authorities and for operating BitInstant without a money transmitter license just days before the BitLicense hearings, EDC breakfast and Wells Fargo panel in New York City. While news of his arrest stole headlines across the major news media, a larger debate raged within the community regarding Shrem: how should the Bitcoin Foundation, the industry’s lone advocacy group, treat one of its own in the face of a serious criminal complaint?
This was the community’s first real identity crisis. This wasn’t Ross Ulbricht and Silk Road. This was Charlie Shrem, a Bitcoin pioneer, entrepreneur and spokesperson.
Three camps emerged in a matter of mere hours. The first and perhaps most vocal group on reddit consisted of supporters who cried foul at the timing and weakness of the allegations, and railed against government conspiracy, prosecutorial hypocrisy and even the validity of money laundering and drug trafficking laws themselves. The second emerged from industry insiders and friends who revered Shrem as a visionary, and firmly believed that the Bitcoin Foundation should throw its full support behind its Vice Chairman in order to send a message that Bitcoin would defend its leaders. The third consisted largely of those Foundation members who demanded that the organization quickly and clearly distance itself from Shrem in order to preserve its reputation. These groups debated furiously while Shrem was detained incommunicado.
The crypto-anarchist backbone of the Bitcoin community quickly presented itself in full force, defending even the rightness of Shrem’s alleged illegal activities. Many disparaged the law enforcement community for its double standard in indicting Shrem for relatively mild offenses in light of the government’s toothless criminal case against convicted money launderers at Wall Street firms such as HSBC. Others scoffed at the charges themselves, comparing money laundering to financial “thought crime” and defending the actual drug peddlers one degree removed from Shrem with assertions that individuals had the right to put whatever “they want into their own bodies.” As one commenter angrily noted, there seemed to be three degrees of separation between Shrem and any illegal activity associated with Silk Road.
Still, the intensity of the ideological debate paled in comparison to the practical one. Insiders fretted that Shrem’s arrest might be a sign of things to come for others in the space. Some felt that defending a high-profile member of the community was a necessary battle for the Bitcoin Foundation to wage in light of the fact that many of its members operated under the same lack of regulatory clarity. If the Foundation refused to defend one of its highest profile members, the organization’s value as an advocacy organization would be diminished. Any knee-jerk condemnations and collective hand-washing of all things Shrem would set a dangerous precedent, and weaken the community to additional “witch hunts”.
Others, including myself, were quick to disagree. The Foundation represents the entire Bitcoin community and as such, we felt it shouldn’t embroil itself in a personal criminal matter. The longer the directors of the Foundation waited to sever ties with Shrem the more damage we felt would be done during Bitcoin’s high-profile week in front of regulators. Bitcoin simply couldn’t afford the bad press at a time when it was attempting to correct misconceptions about its utility as a black market currency. While no one wanted to see Shrem behind bars for 30 years, many wanted him suspended on a temporary basis at the very least. The possible costs of having a potential felon maintain his seat on the Foundation’s board overwhelmed the benefits of demonstrating a united front.
The consensus from over a dozen members of the Bitcoin Foundation that I spoke to was that the easiest path for all involved would be an immediate resignation by Shrem. The only question was whether that would even be feasible. How could he be expected to tender his resignation from behind bars when he had more pressing personal concerns?
The Foundation’s directors recognized the gravity of the situation, but simply didn’t have a contingency plan in place. Handling such a scenario hadn’t ever been discussed, much less incorporated into the Foundation’s bylaws. As one source told me, “We were taken off guard just like everyone else. We just want to be thoughtful in our response.”
And so they waited.
By a stroke of good fortune (given the circumstances), Shrem made bail the next day and tendered his resignation within hours of his release. Contrary to some speculation, he was not forced out, but rather resigned on his own accord. In a private note to his supporters, he said:
I officially resigned from the foundation this morning within hours of being released. It’s difficult resigning from something you started. When I sat with Gavin [Andresen] two years ago in Austria and presented my plan for a foundation, I told him the foundation needs to set the right precedents, always stay focused, and be an independent and strong organization. Given that, I felt if I stay on the board the foundation may lose focus and get dragged into a mess.
Shrem’s prompt and professional response was lauded by members of the Foundation, and cause for relief among the directors. Yet although the bleeding was staunched, the situation produced fresh debates. How should future situations like this one be handled by the Foundation? Was there a need for a second advocacy organization, which could provide the personal advocacy complement to the Bitcoin Foundation’s regulatory focus? Who should ultimately replace Charlie Shrem as Vice Chairman?
These are just three of the tough questions that will be answered over the coming months.
It would be easy, but inaccurate, to characterize the flat-footed response of the Bitcoin Foundation as the result of under-preparation. Instead, the behind the scenes chaos of last week reflects the harsh reality that the Bitcoin community must act decades older in preparation and maturity than would otherwise be expected of a five year old industry. Bitcoin is in its lab mice phase of evolution, and yet it will be subject to the same regulatory scrutiny (or more) as century old financial institutions. We can only hope that the Bitcoin Foundation and derivative advocacy groups are up for the challenge.
Because we’ve seen firsthand how the best laid schemes of mice and Shrem can quickly go awry.
Much has already been written about the BitLicense hearings in New York now that they are officially in the books. But I took some time to reflect on what impact, if any, the panelists who testified before the New York Department of Financial Services committee (NYDFS) had on their inquisitors last week. During five panels over two days, sixteen industry experts gave over eight hours of testimony on all things Bitcoin to a panel charged with learning whether and how to regulate the industry in the world’s financial mecca, New York. Several things ate away at me over the weekend, and I don’t see reasons to be overly optimistic about Bitcoin’s future in the Empire State.
The tone of the representatives from the NYDFS was ominous from the opening statements, as Superintendent Benjamin Lawsky addressed the urgency of outlining clear regulatory guidelines for Bitcoin-related businesses under the cloud of the arrest of the Bitcoin Foundation’s Vice Chairman, Charlie Shrem. Certain lines of questioning, on-the-record statements and telling moments of candor from Lawsky himself reinforced that the bias of the NYDFS is to strictly regulate Bitcoin enterprises.
The clear message from most of the hearings’ panelists was that regulators should take care to avoid throwing “the baby out with the bathwater” when it came to placing compliance requirements on new Bitcoin ventures. Each party present had a clear vested interest in ridding the industry of its reputation as an anonymous payment network for child pornographers, drug dealers and fraudsters. Yet Lawsky quickly showcased an unreasonable expectation for purity when he explained that it was worth sacrificing 1,000 Bitcoin startups in order to stop one nefarious organization:
“If the choice is permit money laundering on one hand, but permit innovation on the other, we’re always going to choose squelching the money laundering. It’s not worth it to society to allow money laundering to exist to allow 1,000 flowers to bloom from innovation.”
His pointed statement reflected the committee’s entrenched bias to heavily regulate Bitcoin entities, one that seemed obvious before the hearings had even begun. Patrick Murck, general counsel of the Bitcoin Foundation, warned that the mere term BitLicense implied “forethought into regulating a technology” and that regulating Bitcoin differently from other payment systems would demonstrate a case of “the DFS picking winners and losers in the marketplace.” Lawsky himself seemed to confirm this forethought after the first panel. When I asked Lawsky directly whether he felt that existing regulations could be patched, rather than completely rewritten, in order to address Bitcoin’s complexities, he told me he did not. “There are enough new, unique characteristics to [Bitcoin] that it is not as simple as merely tweaking existing regulations,” Lawsky said. “Something more comprehensive is needed.”
Within the first two hours of the hearings, Lawsky had essentially decided that NYDFS would create BitLicenses.
Others may have hailed the two day hearings as productive or validating, but I just didn’t see it. Regulations would be a good thing for an industry currently operating in no man’s land, but not if they come with an exorbitant price tag that few if any start-ups could hope to afford. Perhaps the silver lining is that NYDFS will outline its position rather quickly.
"Hopefully, [regulations] are only several months away," Lawsky said. "We want to make sure we do this right."
I certainly hope so.
A company called Switchless says it has developed a “fully operational and integrated bitcoin portal system for a large multinational bank”, currently being run as an internal pilot.
The news leaked out after the system was showcased at Finovate Europe 2014, which was held from 11th – 12th February in London. The software is reportedly being trialled by South Africa’s Standard Bank, the largest in Africa.
Announced at #finovate. Standard Bank running internal bitcoin pilot powered by @goswitchless http://ift.tt/1lAEICN
Gyft is now offering shoppers the opportunity to buy Dell products for bitcoins.
Neither Gyft nor Dell need much of an introduction: Michael Dell’s empire remains one of the biggest PC makers in the market, while Gyft allows users to buy mobile gift cards that can be redeemed in several major merchants in the US.
Dell offers free five to seven day shipping and the usual Gyft discounts seem to apply. You can collect points by using Gyft cards and save up to 3% per purchase.
Hidden from the prying eyes of the public, a new basement pub has set up shop in the heart of Tech City, East London. And as befits London’s hub for digital innovation, you can pay for your beer with bitcoin.
Only the second pub in London to accept bitcoin – Hackney’s Pembury Tavern being the first – the Craft Beer Social Club is a roving pop-up pub stocked with British beer and hearty burgers.
The pop-up is run by Justina Cruickshank, who began the business after getting bored with the limited range of beers that you find in normal pubs. But beer isn’t the only thing on her mind: she wants bitcoin to be more widely adopted and has ideas about how to make it easier for businesses to use.
This week, a term emerged that many bitcoiners won’t have heard before: transaction malleability. Mt Gox cited it as a key reason for suspending withdrawals, and it was also mentioned as the basis for an exploit used in a massive attack against the bitcoin network this week. So, what is it, how does it work, and should we be worried? Here’s what we know.
It’s an attack that lets someone change the unique ID of a bitcoin transaction before it is confirmed on the bitcoin network. The change makes it possible for someone to pretend that a transaction didn’t happen, if all the right conditions are in place.
No. Double spending involves spending coins once, then creating a different transaction with those same coins before the first transaction is confirmed. The trick is then to get the fraudulent transaction confirmed on the bitcoin network first, so that the first transaction didn’t happen. That effectively means that you get to spend them twice.
Major UK-based PC component and hardware supplier Aria PC Technology is now accepting bitcoin for payments.
Aria was established more than 20 years ago, though its focus has shifted over the years from brick-and-mortar operations to e-commerce.
The e-tailer began accepting bitcoin on 7th February, choosing to mention the news as an aside in a Twitter post announcing the launch of the new Gladiator Mining Frame.
Looking for some help updating your resume? Need a video promoting your product? Or maybe you’d like someone to write and record your own personal rap song? Starting today, these types of services can be purchased with bitcoin via Coinbase on Fiverr, the world’s largest two-sided marketplace for…
Just weeks ago, media outlets like Bloomberg and TechCrunch were all but declaring an end to bitcoin’s price volatility.
Posts like “Bitcoin’s Emerging Price Stability” were widely circulated on the bitcoin forums, and research from Wall Street analysts like ConvergEx Group asserted that bitcoin was “on the road to stability”.
Then, overnight, all was quickly forgotten.
(Forgot to post my first CoinDesk piece last week. Here it is!)
Last month, over 600 people congregated in Las Vegas for the Inside Bitcoins conference, including yours truly. The critical mass of Bitcoin pioneers and thought leaders was stunning, and I wrote about the top 10 movers and shakers I had the chance to meet in person. This past weekend, nearly twice as many people attended the North American Bitcoin Conference in Miami, and I was equally impressed by the enthusiasm, creativity, and yes, diversity of the crowd. As I flew back to Boston, I was struck with the realization that the palpable energy at the conference had just as much to do with the quality of the “average” ten attendees as it did with the high-octane presenters and exhibitors. Forget the celebrities. Let’s talk about ten people you’ll meet in Bitcoin.
One of the first people I meet on Friday night is Charlie. He’s 42, but he looks 30, and is about as easy-going as they come. We share a few stories before the invariable question of “how long have you been in Bitcoin?” pops up, and he nonchalantly says that he invested in “a bunch” when bitcoin traded for $4.50. Today, he calls himself retired, travels the world and doesn’t worry about a whole heck of a lot.
Incredibly, Charlie is not unique in this crowd. Dozens of paper and actual millionaires, hackers, entrepreneurs, legal experts, miners and journalists mingle at the roof deck party at the Clevelander Hotel in Miami Beach. It’s an eclectic mix of individuals with a common passion for cryptos, but vastly different backgrounds and motivations for embracing Bitcoin.
There’s David, an entrepreneur who is as passionate about “beekeeping as he is about bitcoin.” He and his seven year old son have made all-natural honey since 2011, which they only sell for bitcoin. In fact, it’s a completely cashless operation (aside from taxes), where David’s packager, web-designer and sugar suppliers are all paid in Bitcoin. There’s Gary, a man determined to sell his ‘93 Mercedes Benz 300 CE Convertible at the conference in order to demonstrate how easy, inexpensive and trustless bitcoin transactions can be. I’ll see him again the very next day grinning ear-to-ear in front of the conference hall after successfully auctioning the car for 9.25 bitcoin. Then there’s Kevin, a baby-faced hacker interning for wallet service provider, Blockchain. He’s won several hacking competitions related to cyber-security and has been thinking about applying for an NSA scholarship to help defray the costs of Penn State, but he’s here now because he knows that he too might strike digital gold if he stays in this industry.
I’m pleasantly surprised to see that the community is evolving beyond the “white males club” many complain about. Although the first person that most attendees see on Friday is a blonde bombshell model clad in little more than gold body paint (that certainly didn’t help silence the critics), the other females at the conference are definitely more than mere “plus ones.” The women on the BitPay team are sharp and counter (let’s be honest, correct) the technical criticisms I have of their product. Rena, the co-founder of New York’s Mint Combine incubator, talks about Bitcoin’s likely regulatory path and her motivation for incubating young bitcoin enterprises. And Beth, a former NASA engineer and current Virgin Galactic “astronaut trainer” (who also helped assemble the international space station), tells me about her mining rig (“just a few Jupiters”). Even during conversations with actual significant others such as Emily, it’s refreshing to hear a woman tease her “good ole boy” colleagues for not understanding bitcoin and investing in the currency as aggressively as she has.
Even the gold-painted model, Maili, proves to be a new convert to the community. When one person suggests she should try to collect tips in bitcoin, she tells him that she plans to put a QR code on her website.
My experience tells me that would be a smart move. The Bitcoin community is as generous as it is passionate. When I made the last minute decision to attend the conference, I foolishly underestimated how crowded Miami Beach would be during mid-January. Yet after one blast email and fifteen minutes, I had a host. Jeffrey, a fellow writer, conference presenter, and entrepreneur (his Liberty.me IndieGogo campaign recently eclipsed the $100k mark) split his hotel room with me for two nights. We met for the first time, when I knocked on his door. At another point in the conference, I extended my hand to Tim, the Bitcoin Seattle meetup organizer for a stick of gum. Instead of the gum, he handed me a Bitcoin-engraved silver coin. When I explained that I had only meant to ask for a stick of gum, he shrugged and said, “That’s all right. I really like your writing. Consider it a tip.”
For every Jeremy Allaire and Brian Armstrong and Barry Silbert, there are 10 equally passionate people you don’t know like Tim, Rena and David. It’s these people that make the industry so vibrant and exciting, and you will only meet them at large conferences like this one. They are having so much fun tackling some of the biggest challenges in Bitcoin, it’s hard to see them abandoning the industry anytime soon. Every single one of them understands how risky Bitcoin is, but they see today’s risks as tomorrow’s opportunities. They are certain that the community will persevere through any hiccups and produce new crops of Allaires, Armstrongs and Silberts.
They just aren’t worried about a whole heck of a lot.
A “massive and concerted attack” has been launched by a bot system on numerous bitcoin exchanges, Andreas Antonopoulos has revealed.
The chief security officer of Blockchain.info said a DDoS attack is taking Bitcoin’s transaction malleability problem and applying it to many transactions in the network, simultaneously.
“So as transactions are being created, malformed/parallel transactions are also being created so as to create a fog of confusion over the entire network, which then affects almost every single implementation out there,” he added.
