2015 ~ Bitcoin News and Information

17 April 2015

The New Stellar Consensus Protocol Could Permit Faster and Cheaper Transactions

10:05

Stanford professor David Mazières thinks he has a faster, more flexible and more secure alternative to Bitcoin, MIT Technology Review reports.

Two independent reviewers, from Stanford and Cornell universities, agree that the new technology could make digital payments and other transactions cheaper, safer and easier.

Alternative blockchains are often dismissed as worthless “me-too” copycats or scamcoins, which, unfortunately, has some element of truth. But Mazières’ approach deserves a place among the serious alternatives to Bitcoin that have been proposed, alongside Ethereum and Ripple.

Public digital currency ledgers rely on distributed consensus protocols to propagate valid transactions. In the Bitcoin network, independent nodes (miners) work together without preferential trust relations. In other words, each node implicitly trusts every other node.

In the new protocol, called Stellar Consensus Protocol (SCP), each node explicitly selects a set of publicly trusted peers, and forwards only the transactions that have been validated by a certain majority of its trusted partners.

If correctly implemented with a critical mass of nodes with overlapping trust circles, valid transactions propagate in ripples through the network and eventually achieve systemwide consensus.

“Bitcoin is good, but we wanted to start from scratch,” says Mazières. He is persuaded that the SCP can overcome important limitations of Bitcoin, such as the long confirmation delays and the fact that mining is now a very energy-intensive process. The new system would be able to reliably verify transactions much more quickly and with less energy, and provide enhanced scalability.

Mazières’ protocol has been adopted by Stellar (hence the name SCP), an open-source protocol for value exchange, launched in 2014 by Ripple Labs founder Jed McCaleb (who also founded the infamous Mt.Gox exchange), and backed, among others, by payment processor Stripe. Besides bitcoin payments, Stellar supports fiat currency payments, for example in euros or U.S. dollars, via Stellar exchanges and gateways.

Initially, Stellar used the Ripple protocol, which also requires nodes to identify a set of trusted nodes to achieve a rippling effect across overlapping trust circles. But problems with the original Ripple protocol prompted Stellar to take steps to build a new consensus protocol, which resulted in the SCP.

Mazières is taking leave from Stanford to work four days a week on the project as Stellar’s chief scientist.

The SCP whitepaper, titled “The Stellar Consensus Protocol: A Federated Model for Internet-Level Consensus,” is available online on the Stellar website. The whitepaper is a technical paper not easy to understand for casual readers, and therefore Stellar has provided a readable summary.

The SCP implements “Federated Byzantine Agreement,” a new approach to achieving consensus in a real-world network that includes faulty “Byzantine” nodes with technical errors or malicious intent. To tolerate Byzantine failures, SCP is designed not to require unanimous consent from the complete set of nodes for the system to reach agreement, and to tolerate nodes that lie or send incorrect messages.

In the SCP, individual nodes decide which other participants they trust for information, and partially validate transactions based on individual “quorum slices.” The systemwide quorums for valid transactions result from the individual quorum decisions by individual nodes.

According to Stellar, the SCP is the first provably safe consensus mechanism that simultaneously enjoys four key properties: decentralized control, low latency, flexible trust and asymptotic security. The SCP achieves optimal resilience against ill-behaved participants, allowing an organic growth model similar to that of the Internet for the Stellar network.

Image via stellar.org.

April 17, 2015 at 04:56PM

Newly Declared European Microstate Liberland Plans to Create Its Own Digital Currency

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A group of Czech citizens has declared a new state, the Free Republic of Liberland, in a tiny 6-square-kilometer territory along the Danube River between Croatia and the Republic of Serbia. The Liberland territory is not claimed by either of these two states, which according to the group permits it to declare a new “microstate” in compliance with international law.

After the Yugoslav Wars, some borderland territories have been disputed, but this area has remained unclaimed. Liberland was created entirely in accordance with international law because it is based on the no man’s land which was claimed neither by Serbia or Croatia in the process of demarcation, InSerbia News reports.

On April 13, 2015 a Preparatory Committee declared the new state on the spot and raised a flag to claim the land. Vít Jedlička, who was elected by the committee as president of the republic, is preparing a constitution as well as diplomatic notes, to be sent to the two neighboring states and to the United Nations, and later to other countries, to inform them about the establishment of the new state of Liberland.

Creating a new micronation and getting it formally recognized is a daunting task, but Jedlička is persuaded that the initiative will succeed.

“The only thing that could stop us is an army,” he told Bitcoin Magazine. He added that the process to claim sovereign nation status recognized by the international community has started.

Jedlička is associated with the Czech Party of Free Citizens, a libertarian political party in the Czech Republic. The party is against too much government intervention in the economy and in the personal lives of citizens. Its members are free-market advocates and oppose the centralization of political power. In accordance with libertarian politics, the motto of Liberland is “To Live and Let Live.”

While BBC News questions whether Liberland is actually just a publicity stunt, the microstate is accepting applications for citizenship from people everywhere – provided they don’t have a “communist, Nazi or other extremist past.”

“The objective of the founders of the new state is to build a country where honest people can prosper without being oppressed by governments making their lives unpleasant through the burden of unnecessary restrictions and taxes,” states the Liberland website. “One of the reasons for founding Liberland is the ever expanding influence of interest groups on the functioning of existing states and the consequent worsening of living conditions of people. The founders are inspired by countries such as Monaco, Liechtenstein or Hong Kong.”

This sounds very appealing to libertarians everywhere, but the challenge is big. It seems likely that the powers that be could easily crush the new microstate as soon as they notice it. Perhaps the only thing that could protect tiny Liberland in its delicate launch phase is a massive display of popular interest. And, in fact, it appears that Liberland is going viral on the Internet, with tens of thousands of signups on its Forum and Facebook page and a lot of applications for citizenship from all over the world in only a couple of days. It appears that many people are ready to try alternatives to traditional politics.

The idea that Liberland could adopt a cryptocurrency, and make it official, is trending on the Liberland Forum and Reddit. Jedlička briefly discussed the idea with the Czech press, and a participant in the Reddit discussion provided a translation. Jedlička answered the question “So do you want to create your own currency?” by stating that Liberland is planning to create its own cryptocurrency (a digital currency like Bitcoin), but on the territory of Liberland it will be possible to use any currency.

Jedlička confirmed to Bitcoin Magazine that Liberland will not have an official currency, but accept all currencies, including bitcoin and other digital currencies. There are plans to establish a Liberland banking system and, according to Jedlička, some banks have already expressed interest.

Perhaps the tiny libertarian dreamland in the Balkans doesn’t have much of a chance in the harsh reality of real politics, but the adoption of bitcoin as one of the currencies accepted by a sovereign state could have a huge impact.

Image via liberland.org.

April 16, 2015 at 05:24PM

MIT Launches Digital Currency Policy and Standards Research Initiative

12:42

MIT Media Lab has announced the launch of Digital Currency Initiative, a three-pronged program aimed at increasing awareness of the technology on campus and abroad while providing research to promote policy and standards initiatives.

The news was first detailed in a post penned by former White House senior advisor and Digital Currency Initiative director Brian Forde, who today officially joined the university-run research laboratory.

Forde previously worked with the administration of current US president Barack Obama to help the government leverage emerging technologies.

Media Lab director Joi Ito, who earlier this week suggested an imminent announcement regarding the future of bitcoin at MIT, expressed his enthusiasm at the appointment while praising digital currencies for their disruptive potential.

Ito said:

“Brian’s experience mainstreaming emerging technologies from the rural mountains of Nicaragua to the White House will be invaluable as he tackles the challenges of digital currency – one of the most promising emerging technologies for the next 10 years.”

In a separate Medium post, Forde went on to detail how the Digital Currency Initiative will seek to address questions regarding the technology's security, scalability and privacy, while convening governments and nonprofits "to research and test concepts" related to its use.

MIT MIT Bitcoin Project

April 15, 2015 at 07:23PM

Ripple Labs Expands to Asia Pacific Region

12:36

The company behind the consensus network and currency, Ripple, has announced a new office in Sydney, Australia as part of a push further into the large Asian and Pacific markets.

“We are excited to formally unveil a presence in Asia Pacific — an area that has been aggressively pursuing faster payment technologies for both domestic and cross-border payments,” said Ripple Labs CEO and co-founder Chris Larsen.

According to a Ripple Labs s, the expansion is to meet a “growing demand” for the currency’s payment services in the region. Unlike Bitcoin, Ripple relies on intermediaries to work as gateways and exchange the ripple currency (XRP) for fiat currencies or intermediaries. The Ripple currency serves as way to send any form of value (fiat currencies, precious metals, etc.) across the globe quickly and cheaply.

Since it is not decentralized like Bitcoin, the alternative cryptocurrency has been able to find use cases as a money transfer service and seen adoption among small financial institutions. Fidor Community Bank, a banking startup, and the Bank of Weir, another experimental bank, became Ripple gateways last year.

“I am thrilled to bring Ripple Labs to Sydney, where we can more effectively serve eager markets in India, Singapore, the Middle East and across APAC,” said managing director of Ripple Labs Asia Pacific, Dilip Rao. “Banks and enterprises can leverage Ripple to more efficiently service the exploding trade and remittance flows in this region.”

“Dilip is a natural fit to lead this office because of his years of experience in the space and his deep, engaged network in the region,” Larsen added.

Rao will be leading Ripple Labs’ efforts in Australia and throughout Asia in his new role as head of the Asia Pacific subsidiary. The first Asia Pacific office will be opened in a large Australian city, but the company plans to expand to other parts of central and eastern Asia in the coming year.

Rao will bring more than 25 years of management and business development in the technology and payments sector to the digital currency company. He was the founder and CEO of Australia’s first peer-to-peer payments company, Paymate. More recently, he founded Woomera Labs, Inc., a business development firm that matches innovative startups with large companies.

He also holds degrees in physics and electrical engineering and an MBA from the Indian Institute of Management, Ahmedabad, India.

Rao will be in charge of the company’s business development and expansion in the region, as well as leading the company’s efforts with regulators, lending banks and central banks.

Though this is the first official presence of Ripple Labs, numerous third-party Ripple gateways already exist in the region. Japan, Singapore, China, Israel, India and South Korea are just some of the countries with Ripple exchanges.

The new office and focus could mean more activity for the digital currency in the region.

April 11, 2015 at 07:20PM

eBay and PayPal Confirm Upcoming Separation, Support for Bitcoin Payments

10:49

In September 2014, eBay announced plans to separate eBay and PayPal. In a recent SEC filing, eBay confirmed that a newly formed corporation named PayPal Holdings, Inc. (“PayPal”) will take over the businesses that make up eBay’s payments segment. eBay, the existing publicly traded corporation, will continue to operate its marketplaces business.

The separation, which will provide current eBay stockholders with equity ownership in both eBay and PayPal, will be effected by means of a pro rata distribution of 100 percent of the outstanding shares of PayPal common stock to holders of eBay common stock.

“As two distinct publicly traded corporations, eBay and PayPal will be better positioned to capitalize on significant growth opportunities and focus their resources on their respective businesses and strategic priorities,” reads the eBay announcement. “As independent companies, we expect eBay and PayPal will be sharper and stronger, and more focused and competitive as leading, standalone companies in their respective markets. eBay and PayPal also will benefit from additional flexibility and agility to pursue new market and partnership opportunities.”

“Following the distribution of all of the outstanding shares of PayPal common stock by eBay Inc. to its stockholders, PayPal will be an independent, publicly traded company focused on making money work better for people and businesses around the world,” says Daniel H. Schulman, President and CEO-Designee of PayPal Holdings. “The access to and movement of money is an important market that affects the lives of almost everyone. Our mission is to increase our relevance for consumers, merchants, friends and family to access and move their money anywhere in the world, anytime, on any platform and through any device (e.g., mobile, tablets, personal computers or wearables).”

In the SEC filing, eBay and PayPal confirm that merchants with a standard PayPal account also can integrate with Braintree to begin accepting bitcoin payments.

Payment processor Braintree, which was acquired by eBay for USD $800 million in September 2013, will be part of PayPal Holdings under the new structure. Braintree permits merchants to accept bitcoin payments seamlessly in partnership with Coinbase, allowing their customers to pay with bitcoin instantly and securely on any device without manually transferring bitcoin or scanning QR codes. The Braintree bitcoin payments service, currently in public beta, has zero transaction fees on the first $1 million in bitcoin sales and a 1 percent fee for cashing out bitcoin to a bank account.

“Sell your products and services in the currency of your choice and let your customers pay with Bitcoin,” reads Braintree’s invitation to its clients. “We take care of the conversion, transfer, and transaction reporting that fits in with your existing Braintree workflow. Bitcoin transactions are confirmed in less than a few seconds, eliminating chargebacks, which reduces your exposure to online fraud.”

Besides bitcoin, PayPal allows merchants to accept Apple Pay and Venmo payments via Braintree.

The separation of eBay and PayPal, which will take place in 2015 (no exact date is given in the SEC filing) will allow the two companies to more effectively pursue distinct operating priorities and strategies and opportunities for long-term growth and profitability. In particular, PayPal’s management will be able to focus exclusively on its payments business, and enjoy “increased flexibility to pursue new partnership and strategic opportunities that may have previously been unavailable for strategic or other reasons.”

It seems likely that the increased flexibility and exclusive focus on online payments could result in PayPal taking a more active role in the Bitcoin ecosystem.

April 10, 2015 at 05:30PM

XAPO Partners with Online Gaming Company CEVO; Holds $21,000 Giveaway

10:18

Bitcoin company Xapo announced a partnership with e-sports company CEVO and bitcoin-based gaming service Leet to provide a seamless, bitcoin-enabled competitive gaming experience to players.

“We believe that gaming presents one of Bitcoin’s most exciting growth opportunities, as fast, inexpensive and secure bitcoin payments have the potential to open the global gaming community to players who lack access to a bank account or credit card,” notes the XAPO announcement. “CEVO users will now be able to earn and challenge their friends for bitcoins across some of the world’s most popular games.”

Founded in December of 2004 with the intention to transform competitive online gaming into a professional sport, CEVO (“Cyber Evolution”) hosts free and pay-to-play tournaments across a variety of AAA games such as Counter-Strike, a first-person shooter video game developed by Valve Corporation, League of Legends and Team Fortress 2. Most CEVO e-sporting tournaments are based on the latest game in the Counter-Strike franchise, the online tactical first-person shooter Counter-Strike: Global Offensive (abbreviated as CS:GO). Leet also offers CS:GO and League of Legends tournaments.

CS:GO players join either the Terrorist or Counter-Terrorist team and attempt to complete objectives or eliminate the enemy team. Players purchase weapons and equipment at the beginning of every round, and winners receive compensation after the game ends. CS:GO is extremely realistic and addictive to hordes of adrenaline-filled online gamers who enough energy (and money) in the game to justify the label “e-sport.”

Upcoming Virtual Reality headsets such as the Oculus Rift, are expected to be able to provide even more realistic 360-degree immersion in online games, will further increase the appeal of e-sports.

“Over the last several months Xapo has invested substantial resources in trying to better understand how Bitcoin can be used to improve a game’s engagement, retention and monetization,” says XAPO’s Director of Business Development Fernando Gouveia. “As part of that effort, we have been developing new APIs that allow game developers to easily build in-game functionality for managing bitcoin deposits, withdrawals and transactions.”

“Do you play @CounterStrikeGO?” – asks Gouveia on Twitter. “Well now you can play against your friends for #bitcoin with @xapo, @cevo and @leetgg! “

XAPO recently partnered with multiuser Minecraft server BitQuest to explore the potential of bitcoin in online games and virtual worlds. BitQuest leverages the Xapo API and the open-ended feature set of the massively popular Minecraft game to create a compelling online gaming experience with an easy-to-use internal economy based on bitcoin.

“Bitcoin is the best candidate to be the official currency of virtual worlds and BitQuest, making it beyond gambling, using it to fuel virtual societies for fun and connecting people together, is a leap forward in the direction we want to see Bitcoin in gaming,” chief BitQuest developer Cristián Gonzáles told CoinDesk.

BitQuest has “serious gaming,” including a virtual architecture contest. That’s but a first example of converging virtual reality and blockchain technology, and shows how bitcoin can be a solid foundation for the in-game economies of social games such as Second Life and forthcoming virtual worlds such as “Second Life successor” High Fidelity.

Meanwhile, CEVO is giving away $21,000 in bitcoin to new users who open a CEVO account and link it to their XAPO bitcoin wallet.

April 10, 2015 at 04:50PM

Bitcoin for Freelancers: Popular Billing Service Hiveage Adds Bitcoin

10:18

Operating a small business with Bitcoin just got a bit easier. Online billing service Hiveage has announced its integration with Bitcoin wallet and exchange Coinbase , allowing its 45,000-plus small business and freelance clients around the world to invoice and accept payments in bitcoin.

“Bitcoin is quickly becoming a useful way of transferring value, and it’s been highly demanded over the past few months by our users,” says Hiveage founder and CEO, Lankitha Wimalarathna.

The company started receiving requests to add bitcoin support in June 2014, citing high transaction fees charged by other payment methods as the main reason.

“Many of the customers who wrote to us were already accepting payments in bitcoin,” said Prabhath Sirisena, co-founder and creative director of Hiveage. “Our new integration with Coinbase allows them accept direct bitcoin payments on their digital invoices sent via Hiveage. This makes it easier for them to keep track of their business finances, regardless of the currency.”

Hiveage offers clients the ability to send invoices and estimates, accept payments online, track time and expenses, manage teams and view detailed reports. While invoicing is a free service, other features are offered at an additional cost.

Connecting a Coinbase account and adding bitcoin as a payment and invoicing option will cost users $1.95 per month.

With clients in more than 140 countries worldwide already, Hiveage is planning a major push into the EU market, beginning with the Netherlands and Germany. Adding new payment services options, including bitcoin, is an important part of their global expansion strategy.

“Coinbase has a very strong position in the U.S., and they’re actively expanding in Europe,” said Sirisena. “This aligns well with our plans, too: The majority of our customers are from the U.S., but this year we’re focusing on making Hiveage an attractive option for the European market, where 20 percent of our customers come from.”

The company decided to focus on Amsterdam as a starting point after attending the Uprise Startup Festival in March. Amsterdam is also known to be a hub of Bitcoin activity, boasting an active meet-up community and Embassy . It was also the host of the Bitcoin 2014 conference last May, and will host Bitcoinference 2015 this May.

“There’s no shortage of great startups looking to share their experiences,” said Sirisena. “I’m really looking forward to seeing how people react to us and learning how we can make their billing workflows easier.”

April 10, 2015 at 04:35PM

French Telecom Giant Orange to Invest in Bitcoin Startups

10:48

French telecom carrier Orange is looking to invest in Bitcoin startups in the coming months, Bloomberg reports. Orange (formerly France Telecom), one of the largest telecom firms worldwide, is now one of the first big international phone carriers to become interested in the technology behind the digital currency.

“There’s something intriguing in this technology, so we want to be there as early as possible,” said Georges Nahon, CEO of Orange Silicon Valley. “This could be a digital platform of the future.”

Orange Silicon Valley has been holding Bitcoin events at its offices in San Francisco and is talking to two Bitcoin companies, Nahon said. The group can directly invest $20,000 per startup and tap into the larger funds of Orange Digital Ventures, the venture capital arm of Orange, which plans to support 500 startups worldwide by 2020 as outlined in its “Essentials 2020” strategy plan.

The Bloomberg article notes that venture capital investments in digital currency startups hit an all-time quarterly high of $233.95 million in the first quarter of 2015.

It may seem odd that Orange is planning to invest in Silicon Valley startups when there is plenty of talent in France and throughout Europe, but Nahon is persuaded that Silicon Valley still has an edge when it comes to disruptive technology development.

“Here’s where the spark of digital innovation is located and how the communication ecosystem is rapidly evolving,” he wrote in February. “This is why Orange Silicon Valley is in the San Francisco Bay Area. We’re here to work with companies to actively participate in these disruptive innovations.”

According to Nahon, the digital payments space will begin to see a marriage of new tech with incumbent institutions, which will opt for acquiring smaller, more agile and mobile-based startups, reminiscent of when mobile advertising firms were rapidly purchased in the past two years.

The Bloomberg article reports that, according to Nahon, Bitcoin technology could be used to cheaply transfer money between different countries. Orange already has more than 12 million users for its money transfer service Orange Money in Africa and the Middle East, and is looking to expand the business.

But Nahon realizes that the blockchain technology can have far-reaching implications beyond money transfer.

“Cryptocurrencies such as Bitcoin will remain a popular topic, but the focus starting in 2015 will be the adoption of blockchain,” Nahon wrote in January. “Developers and companies will flock to the technology in pursuit of developing the ‘blockchain killer application.’ Innovation like this will have implications far beyond payments, as it’ll be a new way for us to trust each other more generally, and facilitate changes in how society exchanges things of value.”

He added that new sources of funding and support for tech startups will come from renewed accelerators and incubators.

A related initiative is Orange Fab, the startup accelerator for Orange. It’s a three-month program that works with exceptional startups that are changing how people connect and communicate. Those accepted into the Orange Fab program receive help from engineers and business analysts onsite at Orange Silicon Valley, and also from thought-leaders, industry experts and investors active in Silicon Valley and the San Francisco Bay Area.

April 09, 2015 at 05:19PM

OneBit: Use Bitcoin Anywhere MasterCard PayPass is Accepted

10:05

Startup OneBit is developing a Bitcoin wallet app that lets users pay at any store with contactless mobile payments via the MasterCard PayPass payment network.

OneBit securely converts bitcoin on the fly at market rate into any major local currency using BitPay, and pays the merchant via their NFC payment terminals. OneBit will permit users to pay at any MasterCard PayPass-accepting merchant worldwide, with zero fees.

“The magic that happens underneath” is done by BitPay, which converts the OneBit user’s bitcoin to the local currency of the merchant, and MasterCard, which actually sends the money to the merchant.

OneBit was developed by entrepreneur Toby Hoenisch at a Mastercard Hackathon and, according to Hoenisch, got very positive feedback from MasterCard.

MasterCard is helping OneBit get a partnership with a card issuer, and OneBit is trying to secure funding for industrialization. OneBit is available on an invitation-only basis to selected early-access testers.

“We don’t want to launch a half-assed Bitcoin wallet that gets us in trouble for violating KYC laws,” says Hoenisch on Reddit. “And yes, legal is the main reason we can’t just ship it.”

Anyone can apply for early access on the OneBit website.

Hoenisch has a background in AI, IT-security and cryptography, and his co-founders have backgrounds in user interface design and security.

“I have been fascinated by Bitcoin for the last three years, but never quite found the right idea to form a company around until now,” says Hoenisch. “We managed to get MasterCard and DBS bank interested in OneBit and with their help, I am confident that we can build OneBit without getting burned like Charlie Shrem did.”

OneBit has been invited to the selection days of the startup bootcamp fintech accelearator in Singapore. If Hoenisch and his team get into the startup bootcamp accelerator program, which will also give them access to DBS bank and their network, they plan to launch OneBit at the end of their three-month program on July 28th.

If Hoenisch and his team manage to get funding and launch the project, OneBit promises to be nothing short of revolutionary: Bitcoin holders will be able to pay merchants directly from the Bitcoin wallet on their phones without requiring merchants to take direct steps to accept bitcoin.

NFC-enabled PayPass payment terminals are very common in Europe and Singapore, and increasingly common in Canada and Australia. Therefore, it seems likely that OneBit will make the life of daily bitcoin users much simpler and reduce their dependency on exchanges.

The direct involvement as a partner of MasterCard, whose APIs and SDKs are used together with those of BitPay to power the OneBit platform, may seem surprising to those who remember recent statements by MasterCard that indicated hostility to Bitcoin.

In a December 2014 submission to an Australian Senate inquiry, MasterCard urged regulators to move against the pseudonymity of digital currencies such as bitcoin.

“Contrary to transactions made with a MasterCard product, the anonymity of digital currency transactions enables any party to facilitate the purchase of illegal goods or services; to launder money or finance terrorism; and to pursue other activity that introduces consumer and social harm without detection by regulatory or police authority,” said the MasterCard statement.

It’s interesting to note that the Reserve Bank of Australia (RBA) recently replied to the same Senate inquiry by stating that it is unlikely that any benefits of Bitcoin regulation would outweigh the potential costs. RBA’s head of payments policy Tony Richards also said that, while digital currencies are not legal tender, there is nothing to prevent two parties agreeing to settle a payment using a digital currency.

Perhaps, after many similarly open-minded positions on Bitcoin taken by governments worldwide, MasterCard realizes that Bitcoin is here to stay and moving toward more integration with mainstream fintech.

Image via OneBit.

April 08, 2015 at 04:51PM

Former Nike CIO Joins Bitreserve

10:10

Former Nike CIO and member of the exclusive Fortune 40 Under 40 list Anthony Watson has joined the Bitcoin bank Bitreserve as President and Chief Operating Officer.

“I am thrilled to join Bitreserve at such a pivotal moment in the evolution of cloud money and financial technology,” says Watson. “Money is a common language around the world, and Bitreserve democratizes how people access, hold and move value. We have the unique opportunity to craft a lasting legacy of delivering transparency, massive innovation and positive social impact to financial services and in peoples’ everyday lives.”

“Anthony will drive Bitreserve’s efforts to inform industry leaders and work with members of the global financial services community to deliver transparency, portability and independence to current and future customers around the world,” says Bitreserve founder and CEO Halsey Minor. “His knowledge and deep insight into financial systems is invaluable as we continue to grow and make strides towards a future that enables anyone to access and participate in the digital economy.”

“I was itching to make an impact,” Watson told Fortune . “I wanted to do something that is valuable for people broadly, not just in one industry. And what Bitreserve is looking to achieve really democratizes finance. It’s going to help people all over the world. The financial system is inherently unfair – it’s always the richest who have access, and the poorest don’t have access, or when they do, they have to pay astronomical rates.”

Bitreserve solves bitcoin’s volatility problem by enabling users to hold bitcoin as stable, real-world currencies. Bitreserve currently offers eight options: U.S. dollar, euro, U.K. pound, yen, yuan and the latest two additions – Indian rupee and Mexican peso.

Bitreserve, which also offers commodities – for now, the metals gold, silver, platinum and palladium – recently expanded to Mexico in partnership with its largest investor, Grupo Salinas CEO Ricardo Salinas-Pliego.

With this expansion, Bitreserve wants to grab a slice of the large market for remittances sent from migrant Mexican workers in the United States back to their families in Mexico. It is working in partnership with a major financial services company and community bank.

The plan combines the faster and cheaper remittances permitted by Bitcoin with the convenience of using the national currency.

Minor told Fortune that “the great magical beauty of bitcoin” is that it allows for the creation of financial institutions without having to go through the traditional financial system.

“We’ve taken the idea of Bitcoin and applied it to the world consumers already live in, rather than trying to force consumers into a new world that has high risk,” he said.

Minor’s thoughts about the future of Bitcoin are especially interesting: “I’ll be surprised if Bitcoin is here in five years,” he said. “It’s a means to an end. The value of Bitcoin isn’t the currency, but the technology. I think once the world becomes more accustomed and attuned to the platform of Bitcoin, the noise will go away, and the currency will go away, too.”

Watson is a high-profile spokesman for a growing number of workers who value work-life balance and refuse to sacrifice personal life for their career. As such, the Fortune article notes, he values the modern, distributed workplace at Bitreserve.

“Millennials don’t want to or need to work in one big concrete building in one location,” he said. “That’s not how the world works anymore,” he said. “Some people want to work remotely from home, some want to work from a coffee shop, some want to work at an office.”

April 07, 2015 at 04:44PM

Coinbase Issues Request for Bitcoin Micropayment Services

04:11

In a thoughtful blog post, Coinbase offers ideas for new Bitcoin applications and business models. Based on the applications under development by the more than 7,000 developers using the Coinbase API, it appears that four main categories of Bitcoin applications are gaining popularity among developers: P2P tipping, cross-border payments, international microfinance and reputation platforms.

The Coinbase post identifies other promising Bitcoin application categories and business models that haven’t been targeted by many developers so far, and recommends to Bitcoin developers and startups: “Here’s 10 ideas for Bitcoin startups that we would love to see more developers working on.”

Coinbase recommends developing innovative email and online content services based on bitcoin micropayments. We are used to a “free” Internet where nobody has to pay, but, of course, there is no such thing as a free lunch. The price that we pay for free email is spam, and the price that we pay for free content is rampant advertising – often annoying, intrusive, and ugly – and disclosure of browsing habits to marketers. Paid models based on bitcoin micropayments could change that.

For example, email could be a pay-as-you-go service, with a small fee (say 0.1 cents) to send a message. That wouldn’t be too much of an annoyance for normal email users, while at the same time it would impose prohibitive costs to bulk email campaign and mass spamming. Similarly, web ads could be replaced by micropayments for viewing articles and videos. For example, an article or a video could be unlocked for one hour when a dedicated Bitcoin address receives a micropayment.

Micropayments are impossible to implement with traditional payment systems, because the overhead costs (transaction fees) would be too high. But the fast micropayments with low transaction fees, permitted by Bitcoin, allow the switch to alternative models for paid online content.

That would also permit creators, such as artists, fiction writers and filmmakers, to make a living with their work.

Coinbase also recommends developing applications that incentivize nodes to provide resources to communications networks, such as the Tor network or the Bitcoin blockchain itself, by rewarding participating nodes with micropayments.

Internet pioneers such as Ted Nelson, Marc Andreessen and Tim Berners-Lee thought that the Internet should have a built-in framework for micropayments. Berners-Lee tried to include micropayments in Web protocols, but the idea was never implemented.

“The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution ,” a 2014 book by Walter Isaacson, has the full story:

“In the late 1990s Berners-Lee tried to develop a micropayments system for the Web through the World Wide Web Consortium (W3C), which he headed. The idea was to devise a way to embed in a Web page the information needed to handle a small payment, which would allow different ‘electronic wallet’ services to be created by banks or entrepreneurs. It was never implemented, partly because of the changing complexity of banking regulations.”

Berners-Lee revived the effort to develop an official W3C micropayments framework in 2013. The work hasn’t been completed so far, but Bitcoin is a good solution, because sending a micropayment with Bitcoin can be as easy and immediate as clicking a button.

Isaacson reports that Andreessen mentioned Bitcoin as a good model for standard Internet payment systems. “If I had a time machine and could go back to 1993, one thing I’d do for sure would be to build in Bitcoin or some similar form of cryptocurrency,” Andreessen said.

Images by Freepik

April 02, 2015 at 04:36PM

Align Commerce Launches Public Beta of International Payments Platform

14:50

Align Commerce announced yesterday that the public beta of its international payments platform had launched, which could cut the cost and time of transactions in a $24 trillion market. Thirty-four countries are now exposed to this beta.

“The $24 trillion cross-border payments market is growing at a breakneck pace, expected to eclipse $54 trillion by 2022, despite a highly inefficient and expensive system in which businesses spend over $50 billion on wire and foreign exchange fees, wait up to seven days for transactions to complete and have no visibility into the process,” said Marwan Forzley, CEO and Founder of Align Commerce, in a statement.

Align Commerce uses the blockchain to expedite money transfers. When transferring money through the normal banking system, numerous intermediaries each take a small fee. By eliminating that, the money can move much faster and for fewer fees.

Forzley explained the workflow in an email to Bitcoin Magazine: Business A pays its bill using a local payment system such as Automated Clearing House (ACH.) Business B gets paid via its own local payment system.

“The speed of the payment end-to-end depends on the speed of the local payment systems, and that varies on a country-by-country basis,” Forzley explained.

What makes the tool particularly useful for potential businesses is that there are no changes to the way they do business.

“The key is that there are significant advantages for the businesses using the blockchain in terms of savings in time and money,” Forzley explained. “In addition, there is no change of behavior required. The blockchain is used behind the scene as a rail that moves fiat to fiat between two parties.”

“Align Commerce is the first company to successfully tackle international payments between businesses using the blockchain, allowing companies an easier, faster and less expensive option for cross-border transactions,” said Dan Morehead, CEO at Pantera Capital, in the statement.

Align Commerce is able to cut the cost for businesses as well by cutting time it takes to process the payments and how many middlemen participate in the transfer. Only the company that has to change currencies pays a 1.9 percent exchange rate fee on top of the amount of money it wants to send. Therefore, the buyer has to pay the exchange rate fee.

Businesses might be worried about the volatility of Bitcoin while the payment is going from point A to point B. Though it is faster than traditional means, Align Commerce still can’t have the payment transfer instantly because of local exchanges. But according to Forzley, the company manages any price volatility issues.

Using the blockchain to make faster payments around the world is a use case Bitcoin enthusiasts have been proponents of for a long time. Align Commerce hopes to finally fix that problem.

Designed by Freepik

April 03, 2015 at 09:56PM

Coinbase Issues Request for Bitcoin Micropayment Services

09:47

That would also permit creators, such as artists, fiction writers and filmmakers, to make a living with their work.

“The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution ,” a 2014 book by Walter Isaacson, has the full story:

Images by Freepik

April 02, 2015 at 04:36PM

Three Methods for Simple Bitcoin Business Accounting

09:55

This is a guest post from Digital Currency Council Member Marty Zigman.

Recently, I gave a webcast presentation to AICPA members to help accounting professionals understand Bitcoin and how to treat it on the general ledger. If you are an AICPA member, the webcast is available for your viewing. In this article, the key points from that presentation are outlined and will help accountants fundamentally understand and approach business based Bitcoin transactions.

Bitcoin and General Ledger Treatment

There are three key processes that ultimately produce different accounting practices and general ledger treatment when Bitcoin is involved. These three processes coincide with Bitcoin’s adoption phases as follows:

Payment Method

Foreign Currency

Base Currency

Bitcoin as a type of “Payment Method”

Within the context of modern accounting systems, examples of payment methods include cash, checks and credit cards. Very simply, they define the medium used to exchange money.

Today, the most common business use for Bitcoin is to treat it as a payment method. Much of the reason for this is because a) the price is relatively volatile and b) acceptance by employees, suppliers and partners is relatively limited. Services such as BitPay or Coinbase have effectively made it easy to accept bitcoin in a business. Instead of the business actually receiving bitcoin during customer payment, these services deliver traditional government-issued (fiat) currency.

Under this method, Bitcoin acceptance is easy to understand and it follows accounting practices widely used in business today (e.g., consider payment by services such as PayPal). Traditional accounting systems should have no problem under this practice. Generally, define a new payment method in the accounting software, relate it to the bank account that the funds will settle, and then follow the procedures that the Bitcoin service provider prescribes for accepting bitcoin in the business.

Bitcoin as a type of “Foreign Currency”

The next adoption wave will happen if bitcoin price volatility stabilizes and it becomes more widely accepted. Some leading-edge businesses already work in this fashion. Under this method of accounting, bitcoin is treated as a foreign currency; just as one would treat accepting Euros in a USD-based organization. To do this well, the business accounting system will need to understand foreign currency and related exchange prices. Traditional accounting platforms are designed with “currency data types” to accommodate only two decimal places. I was one of the early advocates to logically shift the bitcoin decimal place to the right by six digits and base bitcoin in micro bitcoin (µBitcoin) thus allowing it to work in common general ledger accounting systems.

Not all accounting systems allow for new foreign currency definitions — hence, if the business software is designed only for local currency, this method of accounting will not work. In addition, some accounting systems “hard code” their foreign currency references, and accountants may find this to be a limitation in their client or internal systems.

Under foreign currency accounting, a business bases its transactions in a local currency but may denominate transactions and/or accept foreign currency to conduct business. This practice is well understood in larger organizations — especially ones that transact in international trade.

Under this method of accounting, without respect for local tax regulations that demand different regulatory reporting requirements, bitcoin transactions effectively trigger both realized and unrealized gains and losses based on changing market currency exchange rates and timing differences between when transaction obligations are recognized and ultimately settled.

Finally, when bitcoin is treated as a foreign currency, the accounting software will price every single transaction relative to the base currency. With this price information in hand, a tax accountant can reconstitute the records offline to meet regulatory reporting requirements; such as the recent IRS guidelines that demands that bitcoin be treated as a property.

Bitcoin as a type of “Base Currency”

In the final adoption wave, while it may be far off, it is conceivable to see businesses deem bitcoin as the base currency and thus treat all other currencies as foreign — even the home currency. While this is simply an enhancement of the Foreign Currency treatment previously discussed, this method may be valuable for organizations that are fundamentally global and trade with customers, employees, suppliers and partners anywhere and everywhere. While, this accounting treatment will produce a different orientation and obviously introduces interesting reporting questions, if many organizations elect this method, it does represent a way to measure whether bitcoin has indeed achieved wide global acceptance.

Is Bitcoin integrated with the General Ledger today?

Companies that run NetSuite are set up to transact globally and with BTC4ERP, they have the full range of options to configure their accounting practices based on the way they see bitcoin used in their business. I witness some companies who simply seek a bitcoin price feed into their accounting system to help them with their own manual methods of accounting. Others indeed treat Bitcoin transactions as foreign currency and rely on the automatic bookkeeping and transaction coordination provided by my service. If bitcoin gains wider acceptance, I suspect we will see these accounting treatments on a wider range of accounting systems.

March 31, 2015 at 04:28PM

Sidekik: Decentralized Video Streaming and Storage

09:55

The Sidekik app, which is accepting bitcoin in its crowdfunding campaign, is intended to bring real-time accountability to law enforcement by streaming video and audio of encounters with police to Maidsafe.

The goal is to protect the integrity of evidence.

The app, which began its second stage of crowdfunding March 9 , will do far more than just video and audio streaming. An army of attorneys is being built who will compete to be your representative if you happen to need them during an encounter with police. Sidekik seeks to connect attorneys with potential clients when they need legal representation the most.

The Sidekik team says there is an inherent power imbalance between law enforcement and civilians during these encounters, as “the vast majority of people do not know their rights well enough and tend to crumble under the pressure.”

Essential evidence also tends to be scarce, too often turning court testimony into a your-word-against-mine scenarios, which the Sidekik team believes tilts the balance of justice in favor of law enforcement.

The app is designed to gather as much relevant information as possible, including GPS location, audio and video, while calling licensed attorneys via video to deal with the encounter lawfully.

Concerns about data storage lead Martin to Maidsafe, a decentralized storage company currently in closed beta.

The value of decentralized storage

During an interview with Bitcoin Magazine, Martin expounded on the need for secure cloud storage of this sensitive information and the company’s relationship with Maidsafe.

“The concern is totally valid about having data centralized, any data,” Martin said. “It’s not just about being able to store video and making it so that whatever entity cannot hack into one server and destroy that video. It’s about a lot more than that; it is about contact lists, it’s about people’s confidential information.

“People get notices all the time from different companies that they do business with, such as credit card companies or maybe their schools, saying ‘Hey our servers got hacked, your Social Security number, your birth date, your name, someone has it,'” he said. “With Maidsafe that really is a thing of the past, there’s no more hacking that one server and grabbing all that data.”

Martin said he met Page Peterson of Maidsafe at Libertopia in San Diego last November and had his CTO Jessie Wallace talk to her about how Sidekik could use Maidsafe for the massive amounts of data that will be coming from the app.

“We’ll be storing the data on multiple secure servers, but those are centralized,” Martin said. “So we are also going to be working with Maidsafe … This is a perfect merger with them in terms of features. This way, there will not be one single place where the powers-that-be can go to and say ‘We don’t want that video released to the public.’”

What if the officer takes the phone?

The Sidekik app can also be configured to require a pin from both the user and the attorney to stop the phone from recording and streaming data once it has started.

Even if the officer takes and destroys the phone, Sidekik believes enough evidence would be gathered and stored in the cloud to show the nature of the encounter in court.

Stage of development

The first phase of funding ended late last year, enabling the development of the graphic user interface of the app, as well as feasibility studies and a blueprint of the full development of the complex software app.

Phase two, which would be funding the full development of the app, began earlier this month, and a variety of perks are available for crowdfunding supporters at Indiegogo. Those who contribute with bitcoin receive the same rewards for a contribution of 10 percent less.

To develop the app, Sidekik is working with Zco, one of the largest app development companies in the world.

March 31, 2015 at 04:09PM

DEC_TECH Toronto with Keynote Speaker Andreas Antonopoulos: This Week on Decentral.tv

09:55

All this week, decentral.tv will be airing segments from the first Decentralized Technology (DEC_TECH) event held at MaRS Discovery District in Toronto, presented by Decentral. Held on March 17, 2015, the event drew a crowd of over 300 digital currency enthusiasts.

Monday’s segment begins with opening remarks from host Anthony Di Iorio of Decentral and Adam Nanjee of MaRS.

A series of presentations follows, beginning with Gerald Cotten, CEO of QuadrigaCX. QuadrigaCX is a Canadian exchange that recently became the first publicly traded bitcoin exchange in the world.

Henry Chan, business technology analyst from Deloitte, then speaks about the value and the potential of the blockchain, followed by Mat Cybula of Cryptiv, who talks about how tipping can act as a gateway to the world of bitcoin.

Cybula is followed by Amber Scott, Chief AML Ninja at Outlier Solutions, who discusses the changing landscape of bitcoin regulation in Canada.

Tuesday’s segment will feature a panel discussion on “Bitcoin and the Future of Payments” moderated by William Mougayar of Startup Management. Panelists include Amber Scott, Adam Nanjee, and Jeff Coleman of Kryptokit.

Tune in on Wednesday for featured speaker, Andreas M. Antonopoulos, Bitcoin evangelist and author of Mastering Bitcoin . Always entertaining and engaging, Antonopoulos spoke to the packed conference room of over 300 audience members about the inevitability of bitcoin acceptance by legacy institutions. Over the course of the two segments, Antonopoulos walks his audience through the banks’ “Seven Stages of Grief” as they come to grips with the fact that the old way of running things is coming to an end.

Decentral.tv will close out the week with two segments of follow-up questions for Antonopoulos from the audience. On Thursday and Friday’s installments, he will address topics such as scalability, security and adoption.

All episodes will air on decentral.tv at 3:00 pm EST. Past episodes will be available on the decentral.tv playlist.

March 31, 2015 at 03:28PM

Barclays CEO: The Banking Sector Has Not Yet Felt the Full Disruptive Force of Technology, but It Will

09:07

The Wall Street Journal reports that Wall Street is exploring innovative applications of digital currencies to mainstream banking and financial issues. The recent wave of Wall Street interest in Bitcoin technology is inspired by a growing appreciation of the inevitability of radical changes in the financial industry, which is long overdue for the kind of Internet-driven cost savings that have affected other industries.

The emphasis is on efficiency and cost-effectiveness: Bitcoin technology could slash costs, cut settlement times and reduce default risks. The Journal mentions several recent digital fintech news items, including investment opportunities, announcements, acquisitions and appointments of high-profile financial professionals, reported by Bitcoin Magazine in the last few weeks.

“It’s an opportunity for Wall Street to streamline some operations that are pretty antiquated,” says Duncan Niederauer, the former chief executive of NYSE Euronext. Niederauer is now an adviser to TeraExchange, the first Commodities Futures Trading Commission-regulated Bitcoin derivatives platform.

“Not only [is Bitcoin not] a threat, it’s potentially an opportunity,” Niederauer said. “If the train’s leaving the station, you’d rather be on it and be the conductor than a bystander on the platform.”

Other high-profile banking executives worldwide express similar views: The financial industry should jump on the digital fintech bandwagon and appropriate Bitcoin technology for increased efficiency at reduced cost.

Speaking at the Morgan Stanley European Financials Conference in London, Barclays’ CEO Antony Jenkins warned the “banking sector has not yet felt the ‘full disruptive force’ of technology – but it will.” He elaborated on the growing concern among financial institutions that faster, cheaper payment systems will start to seduce their consumer and business customers in the coming years.

“In a world where growth is harder to come by,” Jenkins said, citing the ongoing cost- and jobs-cutting measures in the banking sector, “I’m more convinced than ever that costs will remain the strategic battleground for our sector over the coming years.”

Jenkins’ remarks don’t mention Bitcoin explicitly, but it’s clear that the faster and cheaper transactions permanently recorded in a public tamper-proof ledger, permitted by Bitcoin, represent a growing threat to traditional, cost-inflated banking operations.

“Apple pay doesn’t change the way payments happen,” notes Mariano Belinky, who runs Banco Santander’s $100 million venture fund Innoventures. “But it’s the blockchain-like technologies and the decentralized ledger – that will be source of real innovation.”

Belinky, who before joining Santander was a strategy adviser at McKinsey & Co., is persuaded that mainstream adoption by the financial industry is the future of digital currencies.

“Bitcoin has the wrong set of advocates and affiliates. Evangelists highlighting the anonymous, untraceable nature of the technology have tarnished its reputation. A bank won’t get involved with bitcoin if there’s a perception it has links to money laundering or terrorism,” he says. “I’m excited about Stellar, Ethereum, Ripple – the same technology but coming from a completely different angle – making payments more efficient for the financial industry.”

A recent article from Credit Suisse also underlines the potential of digital currencies to cut costs and streamline financial operations.

“When combined with the traditional financial system, bitcoins could have cost advantages over credit cards or providers such as Western Union when used as a transaction system,” notes the report.

March 30, 2015 at 03:58PM

Houston Bitcoin Embassy Opens

16:14

Houston, we have a problem. We need more cutting edge tech entrepreneurs.

Luckily there’s a new space in Houston, Texas, built just for that, provided by Cryptospaces, which is backed by bitcoin consulting company, FinalHash. Located at 6907 Almeda Rd., the Houston Bitcoin Embassy is an incubator/ coworking space dedicated to tech startups. There are also plans to install a bitcoin ATM in the facility by the end of April.

The Embassy is home to the Texas Coinitiative, a non-profit organization that promotes the use of Bitcoin in Texas.

The Coinitiative mission statement reads:

“We believe that our growing community will help to shape progress in this field. Come network with traders, entrepreneurs and innovators working in one of the most interesting sociological and technological innovations in recent times.”

The Texas Coinitiative hosts several meetups — at least one meet-up each week — including the Houston Bitcoin meetup, an Ethereum meetup and an upcoming Houston Bit Business meetup: a meeting place specifically designed for Bitcoin entrepreneurs.

The Texas Coinitiative invites speakers once or twice a month and is always looking for new speakers. Some of the speakers they’ve recently hosted include Bitcoin Core developer, Peter Todd; Changetip CEO, Nick Sullivan; and Ziftr CEO, Bob Wilkins.

“The city of Houston is still very early in adoption phases in terms of Bitcoin,” says Adam Richard, president and co-founder of the Texas Coinitiative. “There aren’t many merchants that accept bitcoin here. We want to help grow that.”

The Embassy is also spearheading an educational project led by Jay Campuzano of Yo Soy Bitcoin , a series of educational video courses on Bitcoin for beginners in both English and Spanish.

In order to grow, the Texas Coinitiative is looking for sponsors.

“The help from sponsors,” says Richard, “will be used for anything from food and drinks for events to printing of educational materials; all for the purpose of education and inspiring others to become more involved in the Houston Bitcoin ecosystem.”

The Houston Bitcoin Embassy currently has vacancies for anyone interested in an incubation/ coworking space.

The Texas Coinitiative will have a booth at tomorrow’s upcoming Texas Bitcoin Conference. It encourages attendees to visit the booth and talk to any of its representatives there.

“We want to put Houston on the map in the Bitcoin space,” says Richard. “Houston has a lot going on that people don’t realize. There are currently 12 local Bitcoin startups in the city.”

The Houston Bitcoin Embassy is open Monday through Friday, from 9 a.m. to 5 p.m.

For more information about the Houston Bitcoin Embassy, visit their website, send them an email, or sign up to attend the Houston Bitcoin meetup at meetup.com.

March 28, 2015 at 09:22PM

Bitrefill and Celery Make Bitcoin Remittances Easy: A Conversation With CEO Sergej Kotliar

11:26

Bitcoin airtime merchant, Bitrefill, has partnered with New York-based Bitcoin exchange Celery to enable bitcoin remittances of phone minutes to more than 100 countries – without the sender ever having to touch the digital currency.

“The integration uses all of the benefits of Bitcoin but hides the complexities from the user, just uses Bitcoin as settlement rails,” said Celery CEO IIya Subkhankulov.

The process does not require a user to buy bitcoin or handle the digital currency. Airtime purchases made from Celery’s exchange take the money straight from the person’s bank account, similar to the process of buying bitcoin.

In addition, Bitrefill is eliminating fees for airtime remittances to India. The U.S.-India corridor contributes largely to the $70 billion worth of remittances that flow into the Asian country each year.

A Proven Model

Ismail Ahmed, founder and CEO of WorldRemit, told Mobile World Live in 2014, that informal airtime remittances could make nearly half of the $40 billion worth of remittances that flow into Africa each year.

Ahmed made that comment shortly after raising $40 million from Accel Partners and others in a Series A Round, so his money transfer company could pursue airtime and other remittance services.

Airtime remittances are particularly valuable for people sending amounts of money worth under $20. According to TransferTo‘s CEO Eric Barbier, that’s the “sweet spot” for the unconventional money transfer. Remittance companies charge too much to make remittances of such a small amount possible, but airtime services’ low fees make it a viable option.

In many parts of the world, airtime minutes are not only serving as an informal money transfer system, but also as actual money. According to the Economist , in places such as Haiti, Zimbabwe and Egypt, airtime minutes are used to buy things such as gasoline, water and electricity.

According to Hannes Van Rensburg, Visa’s head of their sub-Saharan Africa division, airtime as money is particularly popular in countries where rigid regulatory schemes have made it very difficult for banks to offer new kinds of electronic money.

Even places such as Kenya, where mobile money such as M-Pesa is extremely popular, airtime as money has found a use case. Airtime minutes’ relatively stable price serves as a better store of value than the Kenyan shilling, causing people to hold airtime minutes rather than shillings.

Bitcoin’s UX Problem

A lot has been said about how non-user-friendly bitcoin can be, but according to Bitrefill CEO and co-founder, Sergej Kotliar, it’s really bad. During an interview with Bitcoin Magazine, Kotliar said users in many countries remain confused how to use bitcoin when paying for Bitrefill’s service.

“They had to be walked, step by step, through the process,” he said.

The partnership with Celery will allow users to take advantage of Bitrefill’s cheaper rates and convenience, while never having to touch the rather confusing digital currency.

After signing in, Celery users will see a “Phone Refill” feature toward the bottom of the screen. The user then chooses the amount he or she wants and clicks “Purchase.” The same amount is deducted from the customer’s bank account by Celery, which sends the order for airtime minutes to Bitrefill. The recipient receives the airtime a few seconds later.

But overcoming Bitcoin’s UX problem is just one of the steps the company is taking to reach its grander goal.

“We want to connect the worlds of prepaid and bitcoin. For bitcoin to be used by developing countries, they need to be able to spend it,” said Kotliar. “You can’t exchange bitcoin easily in the developing world, but you can spend airtime easily.”

Full-Fledged Startup

“As Westerners, we didn’t realize how much of the world used prepaid phones. It’s actually the way the majority of the world receives their phone minutes and data,” said Kotliar.

Bitrefill launched in October as a side product for its two co-founders, Kotliar and Aleksandra Derikonja. But a month after launching the service, the company received a lot of interest from the press and, subsequently, from users.

That provoked Kotliar and Derikonja to think more deeply about the prospects of bitcoin in the prepaid airtime industry. After researching the industry more, they discovered that a bitcoin-powered airtime service could solve issues of convenience, price and more.

Bitrefill is headquartered in San Mateo, California, as part of the Bitcoin startup accelerator program Boost VC. They are using the opportunity to further develop their business and to network with other Bitcoin companies.

In the upcoming year, the company will be signing deals with exchanges in Europe and then other parts of the globe. They wish to bring the same “bitcoin-in-the-background experience” to more countries around the world.

The Bitcoin airtime merchant also will be releasing an API that will allow any Bitcoin business to integrate Bitrefill into its website.

March 27, 2015 at 05:19PM

The Bitcoin Investment Trust (BIT) Goes Live with Ticker GBTC

09:53

A few weeks ago Bitcoin Magazine reported that the Bitcoin Investment Trust (BIT) was about to become the first publicly traded Bitcoin fund. On Thursday, the BIT received formal approval for listing on the OTC Markets Group’s OTCQX exchange. The fund is listed with the symbol GBTC, and trading is expected to begin early next week.

Barry Silbert announced on Twitter that the BIT fund is live and waiting for eligible shareholders to deposit their shares and sell.

The BIT is the first product from Silbert’s new Grayscale Investments, a digital-asset management firm being launched concurrently by his Digital Currency Group. The Wall Street Journal notes that the BIT is the latest addition to the growing number of bitcoin trading platforms that aim to expand bitcoin investments beyond the volatile spot exchanges and attract a new class of investors.

Each share of BIT is worth approximately one-tenth of a bitcoin. Holders of BIT shares won’t hold bitcoin in their names, but they will hold shares of the fund, which itself holds bitcoin. Since the value of BIT shares will fluctuate with the exchange rate of bitcoin, the fund will be a convenient investment vehicle linked to bitcoin – in particular, investors will be able to short the fund and profit from drops in the price of bitcoin. The availability of traded funds linked to bitcoin and investment vehicles such as options, futures and other derivatives is expected to contribute to stabilizing the value of bitcoin.

The BIT skipped the lengthy SEC registration process by taking a shortcut approved by the Financial Industry Regulatory Authority (FINRA). Without SEC registration, the BIT can’t formally be considered as an Exchange Traded Fund (ETF), but other funds are seeking SEC approval for listing on the NYSE or Nasdaq. The Winklevoss twins are planning a Bitcoin Exchange Traded Fund (ETF), the Winklevoss Bitcoin Trust ETF, which will be available to investors on NASDAQ with the ticker COIN.

The BIT will open bitcoin investing up to the wider world of capital markets and traditional investors who prefer not to trade bitcoin as currency because they are scared by bitcoin’s wild price swings.

“Over the past three or four months, a handful of banks have started to experiment,” said Silbert. “Some of them are experimenting around trading, some around using the blockchain for settlement, and some are interested in deploying capital as investors.”

The Grayscale website notes that digital currencies are poised to radically transform our financial system, but it won’t happen overnight.

“At Grayscale, we believe investors deserve an established, trusted, and accountable partner that can help them navigate the gray areas of digital currency investing,” the website says. “That’s why we are building transparent, familiar investment products that facilitate access to this burgeoning asset class, and provide the springboard to invest in the new digital currency-powered ‘internet of money.’”

“The hope within the bitcoin community is that BIT and future publicly traded bitcoin investment vehicles will improve liquidity and thus help smooth out some of the price volatility that has plagued bitcoin in its early years,” notes PandoDaily. “The fact that BIT is also now a regulated entity should help calm the (justified) fears of many prospective bitcoin investors. A more stable bitcoin market is seen as being a necessary pre-condition for widespread adoption as a payment vehicle.”

Image via Grayscale Investments.

March 27, 2015 at 03:29PM

Neteller Adds Bitcoin Funding to Prepaid Mastercards

11:20

In a surprise move, e-wallet provider and payment processor Neteller quietly started to accept bitcoin deposits at zero fees. Neteller customers will now be able to top up their accounts by exchanging Bitcoin into one of the currencies offered by Neteller.

Neteller, owned and operated by publicly traded British global payments company Optimal Payments PLC, is used by millions of consumers in more than 200 countries and especially popular in the foreign exhange and online gambling sectors.

This announcement follows the entering into of an agreement between Optimal Payments and Bitcoin payment processor BitPay.

“We recognize the important role that cryptocurrencies play in the future of payments,” said Optimal Payments President and CEO Joel Leonoff, “and we look forward to working with BitPay as the acceptance rate grows.”

“Neteller has recognized the growing strategic importance of bitcoin,” notes the BitPay website, “and we will be working with them to help further drive mainstream adoption of bitcoin.” Sonny Singh, BitPay’s chief operating officer, added that the relationship with Optimal Payments will help BitPay to drive merchant acceptance on a global scale.

A few days ago, Optimal Payments announced the forthcoming acquisition of the biggest Neteller competitor Skrill (formerly Moneybookers.) It seems therefore likely that bitcoin deposit options may be added to Skrill as well in the coming months.

Neteller, which is listed as an “Authorised Electronic Money Institution” with the U.K. government’s Financial Conduct Authority (FCA), is headquartered in the Isle of Man, a leading Bitcoin hub poised to attract digital fintech businesses, entrepreneurs and developers. The recent announcement of new Bitcoin-friendly regulations in the Isle of Man may have contributed to Neteller reversing its previous choice to block digital currency activities.

Besides paying the merchants that accept Neteller payments directly from their accounts, Neteller users have a prepaid “Net+” MasterCard that can be recharged from the wallet and used to pay all merchants that accept MasterCard, and withdraw cash from ATMs.

Two features of Neteller bitcoin deposits seem especially important.

First, Neteller is accepted by nearly all online gambling operators. Therefore, nearly all online gambling operators are able to accept bitcoin payments via Neteller. Unfortunately for gamblers based in America, current U.S. regulations against online gambling prevent Neteller from offering the service to customers based in the United States.

“All serviced countries except the United States can deposit with Bitcoin,” notes the Neteller website.

Second, all Neteller users now can link a prepaid Net+ MasterCard to their Neteller accounts, with the option to deposit bitcoin to recharge the card. In other words, Bitcoin users are suddenly able to withdraw their funds from all ATMs that accept MasterCard (read: nearly all ATMs) and pay all merchants that accept MasterCard (read: nearly all merchants), online or at points of sale. Optimal Payments’ upcoming acquisition Skrill also is a provider of prepaid debit cards.

Prepaid debit cards that can be recharged with bitcoin deposits, and therefore permit bitcoin payments anywhere, are becoming commonplace. In Australia, the CoinJar Swipe card permits spending bitcoin at most merchants and withdrawing bitcoin as cash at most ATMs. In Germany, holders of a Fidor Bank “Smart Giro Account” can sell bitcoin to other account holders, have the money instantly credited to their account, and spend or withdraw their money with their Fidor credit card, which in practice is equivalent to a card that can be recharged with bitcoin.

With the acquisition of Skrill, Neteller will be the biggest competitor of leading payment processor PayPal, which has already begun experimenting with Bitcoin.

March 26, 2015 at 05:15PM

Designers Compete to Create Global Cryptocurrency Brand

10:45

by Jacob Donnelly on March 26, 2015 { }

Many people know the symbol of Bitcoin. Many people might know the symbol of Litecoin. Even fewer know the symbol of a Dogecoin. There are hundreds of cryptocurrencies that have been developed, but what’s the symbol for “cryptocurrency?”

Brand Me Crypto, a design contest sponsored by Vogogo and Cryptsy, is hoping that one concise brand can be created that will epitomize the true brand of cryptocurrency.

“I found myself and our designers struggling to visually articulate cryptocurrency as a whole without inundating our designs with 5+ more coins just to communicate the overarching cryptocurrency conversation and message,” said Chantel Meeley, head of marketing and creative at Vogogo.

But it wasn’t as simple as just hiring a design firm to come up with a few different concepts. It was important that Brand Me Crypto kept true to the culture that has sprung up from cryptocurrencies. As it says on its website, it needed to be “designed by the people, for the people.”

The two companies joined forces and launched the Brand Me Crypto initiative on October 28, 2014, inviting designers from around the world to submit their concepts. At the end of the contest, designers from 89 countries across five continents had submitted their ideas of what the brand should be.

The contest is now in its final stages. Five designs are being voted on from around the world. Anyone is eligible to vote on the design. More than 7,000 votes have been tallied, and voting ends on March 31, 2015 at 11:59 MDT.

The winner will receive $10,000 in USD or the cryptocurrency of their choosing as well as recognition on open creative licensing rights.

“I am excited to see that the final brand the world population selects and looking forward to having one visual identity that represents this new currency,” Meeley said.

Cast your vote today at brandmecrypto.com.

March 26, 2015 at 04:42PM

The Future of the BitGive Foundation: Great Potential Amid Uncertainty

18:07

Over the past three days, Bitcoin Magazine has featured stories about the BitGive Foundation; how it began and the work that it has done with charities including Save the Children, The Water Project and Medic Mobile. Its founder and sole full-time staffer, Connie Gallippi, has helped the organization grow to become the first registered tax-exempt bitcoin charity, spreading the word about Bitcoin’s potential for positive change in the world.

“We’ve continuously put out great efforts,” says Gallippi, “and we have a lot of supporters who like our work. The community has been looking for ways to improve its image and reach a mainstream audience. It would be great if we could leverage what we are already doing to accomplish this goal. Our work is making a direct impact today in ways that a mainstream audience can appreciate and relate to.”

Looking forward, the BitGive Foundation has two immediate fundraising goals: its current campaign with Medic Mobile, and support for the Foundation’s own long-term viability.

Medic Mobile is an open-source platform that supports health workers in remote communities of the developing world, using mobile technology.

“Medic Mobile has a mission that connects with our Bitcoin audience,” says Gallippi. “They are giving out thousands of mobile phones in 21 developing and Third World countries to support healthcare.”

Each phone is given to a community health worker who volunteers to take care of approximately 30-50 people in a remote village. It takes hours and days for some to walk to and from the closest doctor or hospital to exchange information.

Using the phones, along with Medic Mobile’s free, open-source platforms, health workers can communicate directly with doctors, saving them from having to walk for days and the dangers that come with it. They can also register pregnancies, track disease, keep vital supplies stocked and literally save lives in the case of emergencies.

Aside from the obvious importance of Medic Mobile’s work in health care, Gallippi saw the potential for building a network of cell phones in remote parts of the world. Early conversations were about hopes that the long-term effect of the phone distribution might also allow for the creation of hubs for bitcoin transactions, bringing financial and remittance services to the unbanked populations as well.

The foundation’s second — and perhaps most pressing — campaign is to raise enough money to keep itself going so that it can continue to take on more projects in the future.

“Right now, I’m the only employee,” says Gallippi, “and the runway is very short for me to be able to stay on full-time.”

Since the inception of the BitGive Foundation in 2013, there has been support from some key founding donors, including BitPay, Perkins Coie, Jeff Garzik, and Roger Ver, to name a few. As the two-year anniversary of BitGive approaches this June, Gallippi will be wrapping up the Founding Donors campaign.

“At the beginning, there was great support,” says Gallippi. “Then the price of bitcoin dropped and things have been pretty slow.”

She is hoping that more companies and individuals will want to take advantage of the opportunity to become founding donors, who will be recognized in perpetuity for their contributions to build the first Bitcoin philanthropic organization, before the end of the campaign.

Besides becoming a founding donor, there are plenty of ways for members of the Bitcoin community contribute to the BitGive Foundation.

Become a member. You’ll support the BitGive Foundation’s efforts to offer charitable gifts and campaigns to organizations around the world on behalf of the Bitcoin community. You’ll also receive a T-shirt, discounts on events and a tax receipt.

Direct your tips to BitGive. If you have an account with ChangeTip, you have the option to automatically redirect your tips to one of several charitable organizations.

Engage in the Amazon Smile program when you shop on io. A donation of 0.5% of your purchase amount will be directed to the charity of your choice (at no extra cost to the purchaser), and BitGive is registered with Amazon Smile. In addition, BitGive has also secured matching donations from Bitcoin organizations. For the next few weeks, all Smile donations through Purse.io will be matched by Chain.com; those matching amounts will be directed to BitGive.

Make a tax-deductible donation. Companies and individuals can offset taxable gains by making a tax-deductible donation to BitGive, a registered 501c3, using LibraTax to help optimize gains/losses and make donations go further.

Buy a T-shirt or make a one-time donation through the BitGive Foundation website.

Gallippi’s long-term goal is for the foundation to establish an endowment that will protect the organization’s ability to operate to its full potential.

“Right now, we can only support one campaign at a time,” says Gallippi. “But there is potential for things to grow if we have the resources. For now, we have to make our choices very strategically.”

“Our goal has been to establish a global presence, and we’re doing that,” she adds. “Our stated mission is to improve public health and the environment, and we’re providing a way for companies in the Bitcoin space to give back.”

March 24, 2015 at 11:25PM

Anycoin Direct Expands to 14 New European Markets

12:56

Eastern Europe

Bitcoin brokerage Anycoin Direct has added TrustPay as a new payment option, opening the company to 14 new markets in Europe.

The deal enables the Netherlands-based brokerage to receive instant wire transfers from customers in markets such as Bulgaria, Croatia, Estonia, Hungary and others in the region.

Anycoin Direct provides brokerage services for bitcoin as well as altcoins including litecoin, darkcoin and dogecoin.

Co-founder Bram Ceelen told CoinDesk:

“With the addition of TrustPay, we now serve almost all the European market. Our goal is to make buying and selling bitcoin as easy as possible. To do this we work with as many local trusted payment methods as possible to make sure the buy process goes as smooth as possible.”

The move builds off previous efforts to grow in the European bitcoin market, after announcing its growth strategy last year. The company raised €500,000 as part of a seed round in January, a funding effort led by a private investor.

At the time, co-founder Lennert Vlemmings suggested that some of those funds would be used to adopt new payment methods for the platform.

TrustPay did not respond to requests for comment by press time.

Eastern Europe image via Shutterstock

AnyCoin

March 23, 2015 at 07:30PM

Bitreserve Expands to India and Mexico; Partners with Mexican Billionaire

08:17

Bitcoin bank Bitreserve , founded by CNET founder Halsey Minor in 2013, shields its customers from the volatility of bitcoin by instantly locking deposits to a fiat currency selected by the customer, for example the US dollar. If you make a deposit in bitcoin to Bitreserve, you don’t have to worry about volatility, because your bitcoin can be converted to dollars on-the-fly and appear as dollars in your balance. So Bitreserve users don’t lose money if the exchange rate of bitcoin goes down – if they have chosen to convert part of their holdings to, say, $1,000 USD, they will continue to have $1,000 USD in their account regardless of any fluctuations of bitcoin value.

Of course, the reverse is also true: if the exchange rate of bitcoin goes up, you don’t make money. But today risk-averse bitcoin users are scared of volatility and many fear that bitcoin will continue to dive as it has done in 2014. In the harsh reality of today’s economy, most individuals and small businesses must carefully manage their finances, and are unable to tolerate even a small degree of volatility.

“Bitreserve is on a mission to democratize the use of digital currency by protecting businesses and consumers from the risks inherent in the bitcoin model,” notes a Forbes review quoted on the Bitreserve website.

Bitreserve users can fund their accounts with bitcoin, and can choose to hold their funds as bitcoin or “bitcurrencies” permanently pegged to gold or to a growing list of fiat currencies, including dollars, euros, pounds, yen, and yuan. Users who choose to convert their bitcoin are still able to send bitcoin payments to other Bitreserve users or external bitcoin addresses, but their bitcoin holdings fluctuate with exchange rates, whereas their converted holdings stay stable.

Recently Bitreserve announced the launch of two new bitcurrencies: the bitrupee (BitINR) and bitpeso (BitMXN), pegged to two key developing world currencies – the Indian rupia and the Mexican peso – now supported by Bitreserve’s cloud money system. Mexican Bitreserve customers will be able to hold their funds in Mexican pesos.

The most interesting part of the Bitreserve announcement is:

“The bitpeso is key to realizing the potential of our partnership with Bitreserve’s largest investor, Ricardo Salinas-Pliego, one of Mexico’s most admired entrepreneurs and the Chairman and CEO of Grupo Salinas, one of Latin America’s largest and fastest-growing business groups.”

Salinas-Pliego is the fourth richest person in Mexico behind Carlos Slim and the 168th richest person in the world, with an estimated net worth of US $8 billion in March 2015.

Grupo Salinas, a group of companies with interests in telecommunications, media, financial services, and retail stores, is a pioneer in bringing basic financial services to the poor and working class through its retail and banking arm Grupo Elektra. According to the official website, Grupo Elektra, Latin America’s leading financial services company, is “focused on the base of the pyramid” – the large mass of Latin American financially disadvantaged citizens and migrant workers in the US. The Bitreserve announcement notes that:

“With over 2,600 retail outlets and bank branches throughout Latin America, Grupo Salinas will be a key partner in bringing the benefits of Bitreserve’s cloud money system to millions of Mexicans working in the US and hundreds of millions of consumers and businesses throughout Latin America.”

The wording of the announcement and the business model of Grupo Elektra imply that Bitreserve wants to grab a slice of the large market for remittances sent from migrant Mexican workers in the US back to their families in Mexico, in partnership with a major financial services company and community bank. The plan combines the faster and cheaper remittances permitted by Bitcoin with the convenience of using the national currency.

The announcement also reveals that Salinas-Pliego is now the main investor in Bitreserve, but the amount of his investment hasn’t been disclosed.

March 23, 2015 at 03:01PM

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