The BitGive Foundation: A Bitcoin-powered Nonprofit Doing a World of Good

Bitcoin conferences have been the birthing grounds for many a successful startup. They have attracted some of the best business minds and biggest VC investors. But when Connie Gallippi went to San Jose for her first conference in back in 2013, she saw a different sort of opportunity altogether; the opportunity to create a philanthropic organization that would use the power of bitcoin to help the disadvantaged citizens of the world.

It’s been a whirlwind journey for Gallippi since the idea of the BitGive Foundation first took root back in San Jose. Over the past year and a half, the Foundation has attained status as the first bitcoin 501(c)(3) nonprofit organization, and has funded projects on behalf of half a dozen charitable campaigns. Most recently, Gallippi visited Kenya to witness the completion of a bitcoin-funded well in conjunction with The Water Project.

This Sunday marks World Water Day. Bitcoin Magazine caught up with Connie Gallippi to talk about BitGive and to find out more about BitGive’s involvement with The Water Project.

Back in February of 2014, Gallippi was looking to fund a water-related project based in Africa when she saw an announcement from Peter Chasse, founder of The Water Project, announcing that his organization was accepting cryptocurrency donations.

“…emerging cryptocurrencies are extremely low cost and in some cases nearly free to exchange and transfer. The cryptocurrency movement is based on transparency, openness and de-centralization in its design and implementation. At the same time, users enjoy an anonymity more akin to cash-based transactions. The critical difference being that underlying valuations are not decided by a central authority and the movement of that value is unencumbered.”

“It was serendipity,” says Gallippi. With a fifteen-year career background in the environmental not-for-profit industry, Gallippi was already keenly interested in water-based issues. Finding a company that understood and was enthusiastic about the potential of bitcoin seemed to be the perfect fit for BitGive. After a thorough investigation of the charity, BitGive was ready to move forward.

Gallippi set a fundraising goal of $10,000 — the full amount required to complete one well. It was a huge task, but Gallippi wanted the project to be entirely funded by the Bitcoin community. “There was lots of money floating around at the time,” says Gallippi, so she was optimistic. And while it took longer than Gallippi initially expected, by the fall of 2014, BitGive had surpassed its goal, raising in excess of $11,000.

From that point on, the project proved to be worth all the effort. “It was an amazing experience to walk hand-in-hand with them through the whole thing” says Gallippi of her relationship with The Water Project. She explains that it was a completely in-depth endeavor; the charity works not only to build the well, but to involve and educate the community regarding the well and its maintenance, as well as sanitation and health.

“They really do quality work,” says Gallippi. “And they are also really excited about Bitcoin!”

As the date of the well’s completion approached, Gallippi began to consider the possibility of visiting the Kenyan village where it was being dug. Wouldn’t it be amazing if she could tell the Bitcoin community the story of how their donations made this project possible?

When she reached out to the Water Project to see if they could help her locate the project and approach the community, serendipity struck again. Peter Chasse told her about a film crew that was going to be visiting a few of their completed projects and he agreed to include the BitGive well. He also invited her to join the team in the field in Kenya. Gallippi put together a funding proposal that would cover the cost of her trip and a bitcoin-oriented film for the BitGive project; and within a few days, BitPesa stepped in to cover the costs.

“It was amazing,” said Gallippi. “We got the whole film project settled in about four days.”

The Water Project wasn’t the first of BitGive’s campaigns. It kicked off its efforts back in 2013 by spearheading the first Bitcoin Black Friday charity drive, raising funds for Save the Children following the Philippines’ typhoon disaster. It has since supported campaigns to provide tornado relief to the US midwestern states, to stop the spread of the ebola virus, and support TECHO building homes in the favelas of Brazil. Most recently, BitGive has become involved with Medic Mobile, a platform that supports health-care workers in remote communities of the developing world using mobile technology.

“Magical things have happened”

Although the BitGive Foundation is largely a one-woman operation — Gallippi is the only person working full-time at the moment — it is not without a support system. Since its inception in 2013, Gallippi has had the support of BitPay co-founders Stephen Pair and Tony Gallippi, Connie Gallippi’s brother.

“Tony and Stephen really helped to pull in key players from Day One,” said Gallippi. For example, they helped her to connect with Patrick Murck, who now sits on the Board of the BitGive Foundation. Through Murck, Gallippi was able to secure pro bono legal work from Perkins Coie, who took care of securing the charity’s status as a 501(c)(3) nonprofit.

To date, BitPay is a Platinum founding donor to BitGive. “We would never be here without them,” says Gallippi.

The BitGive Foundation has also received support from other companies and individuals in the community. Most recently, they teamed with both ChangeTip and Purse.io in its efforts to make donation collection from the bitcoin community easier. Anyone collecting tips through ChangeTip has the option to redirect their tips directly to BitGive. All people have to do is log into their ChangeTip accounts and click on “Redirect your tips to a Cause.”.

Similarly, shoppers at Purse.io have the option to participate in the Amazon Smile program. Purse.io enables bitcoin users to shop on Amazon.com for a discount. When shoppers choose to participate in the Amazon Smile program, 0.5% of their purchase amount is donated to the charity of their choice. BitGive has enlisted bitcoin companies to match all Purse.io Smile donations over the next few months.

“Right now,” says Gallippi, “Chain.com will match all donations,” with the matching amounts going directly to the BitGive Foundation, regardless of where the original charitable donation is directed. For example, even if a user chooses to direct the 0.5% donation to the Red Cross, Chain.com will send an equivalent amount to BitGive.

To find out more about the BitGive Foundation, or to become member or make a donation, visit their website at bitgivefoundation.org. An in-depth interview with Connie Gallippi is also available on decentral.tv.

March 21, 2015 at 06:20PM

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Credit Suisse Publishes Paper on Bitcoin: Explores Integration with Traditional Financial System

Mainstream banks and financial institutions are warming up to Bitcoin and digital blockchain-based fintech, often with a surprisingly positive and open-minded attitude.

In a recent research paper titled “One Bank Research Agenda,” the Bank of England said that Bitcoin could reshape the financial industry and called for further research to devise a system that could use distributed ledger technology without compromising a central bank’s ability to control its currency.

A recent Goldman Sachs report titled “The Future of Finance: Redefining the Way We Pay in the Next Decade” states that Bitcoin is a megatrend that could shape the future of finance. “Innovations in network technology and cryptography could change the speed and mechanics of moving money,” the report says.

A Wall Street Bitcoin Alliance has formed to cater for the growing interest in digital fintech shown by Wall Street operators, and innovative financial institutions such as German Fidor Bank are openly embracing Bitcoin as part of their operations.

Credit Suisse, the large Switzerland-based multinational financial services holding company that operates the Credit Suisse Bank and other financial services investments, has published an article titled “Bitcoins – Money Without Physical Form.” The article takes a lukewarm position on Bitcoin, which, according to the company, should be combined with the traditional financial system.

After providing a short and simplified introduction to Bitcoin and cryptocurrencies, the article analyzes the advantages and shortcomings of Bitcoin as both a security and a currency. The low transaction costs and easy transfer around the globe indicate that Bitcoin should be considered a legitimate currency, as does the fact that many online providers accept bitcoin. The Credit Suisse analyst wonders whether Bitcoin has the potential to become commonplace and to dislodge the money monopoly from the central banks.

But the author thinks the advantage of Bitcoin over traditional currencies – decentralization – is also its biggest drawback, because there is no authority that guarantees the value of the currency.

“A currency is only worth what you believe you will be able to purchase with it tomorrow,” notes the analyst, who considers the huge fluctuations in the exchange value of bitcoin a result of the absence of a central bank able to stabilize the currency and provide confidence.

“If this confidence is removed, the value of the currency can decline rapidly, which is what happened with bitcoins at the beginning of 2014. The opposite is also harmful: The increase in value bitcoins experienced in 2013 would have corresponded to an economically crippling deflation if they had been the general means of payment. These fluctuations in value are what is stopping bitcoins from becoming more widespread as a means of payment.”

These considerations seem to point to the desirability of new implementations of digital currencies controlled by governments and central banks, similar to the FedCoin proposal by the U.S. Federal Reserve and the digital currency framework that IBM is rumored to be developing for use by central authorities.

Such a centrally controlled cryptocurrency would combine the advantages of Bitcoin – cheaper and faster transactions, permanently recorded in a tamper-proof ledger – with the value stabilization and user monitoring that a central bank can provide.

“Who do you trust more, your own central bank or an anonymous online network?” asks the author.

“Nevertheless, bitcoins have a future in certain areas and countries,” states the Credit Suisse article. “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.”

Echoing opinions expressed by Finance Minister of Greece Yanis Varoufakis, the article concludes that “In countries such as Argentina and Zimbabwe, where confidence in the country’s own currency retaining its value is very low, bitcoins are an alternative that is being used with increasing success.”

March 20, 2015 at 03:37PM

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Bitcoin Companies Join Payment Giants At Transact 15

The Transact conference is a yearly trade show that brings together the latest in payments and technology. Payments giants including American Express, PayPal, Visa, Bank of America, Chase, and many others gather at this yearly event to learn about new technologies and form partnerships. In its very essence, this is a traditional payments conference. And now Bitcoin gets to be part of the conversation.

BitPay, a member of the Electronic Transactions Association, is going to be a big part of the March 31-April 2 event, which is billed as “the place to come to get business done.” Bitcoin API company Gem will also be a sponsor of the event.

Tony Gallippi, the co-founder of BitPay is one of the primary speakers on an 11:30 a.m. panel titled, “Digital Currency – Changing the Payments Ecosystem.” Others on the panel are Adam White from Coinbase, Sean Neville, and the panel is moderated by David Bailey from BTC Media. (Full disclosure: BTC Media is the parent company of Bitcoin Magazine.)

“This is the first major traditional payments conference where we are seeing a lot of involvement from Bitcoin companies,” said Emily Vaughn, marketing manager at BitPay. “Having a presence and presenting thought leadership at events like Transact 15 is critical for the growth of the Bitcoin ecosystem.”

The growth of the Bitcoin ecosystem is going to happen whether traditional payment processing companies want it or not. According to BitPay, there’s much excitement about the possibilities of bitcoin.

“Businesses working in the traditional payments industry are usually excited about getting involved with Bitcoin once all of their skepticism has been addressed,” Julia Patterson, communications manager at BitPay, said. “No large payments company is going to adopt Bitcoin on a whim, nor should they.”

BitPay recently partnered with Heartland Payments Systems, one of the largest payment processors in the United States. Heartland has more than 300,000 businesses and educational locations that rely on their technology. Through this partnership, Heartland will be able to recommend which of their merchants would be best suited to use bitcoin.

However, not all merchants have found success with bitcoin. WordPress, a recent client of BitPay’s, decided that it was not worth the support costs to keep accepting bitcoin. They were seeing only a few transactions using bitcoin as the payment method.

“WordPress is currently updating their checkout process, and we expect to see bitcoin capability added back in,” Patterson said. “After talking to WordPress, we think the lapse in bitcoin payments has little to do with bitcoin or our service.

With some serious heavy hitters such as Square, Stripe, TD Bank, and others attending Transact 15, this could be a good way for more companies to learn about the potential of bitcoin and potentially integrate it into their workflow.

“The Bitcoin technology stands on its own two legs,” Patterson said. “It’s our job to be the best ambassadors for the technology as possible.”

Transact 15 is starts on March 31^st and goes until April 2^nd. It’s being held at the Monscone Center in San Francisco.

March 20, 2015 at 03:18PM

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BitReserve Tool Lets You Watch Bitcoin Transactions in Real-Time

Bitreserve has launched Changemoney.org, a real-time visualisation tool to show its users how money is held, used and transferred on its platform.

The microsite enables users to filter the results by currencies and plots the data on a 3D interactive globe, offering behind-the-scenes insight into activities. At press time, the site showed that the storage platform held $1,259,153 in bitcoin in its wallets.

Speaking about the launch, Halsey Minor, founder and CEO, said that the new tool was in line what he believed to be the tenets of digital currency – inclusion, fairness and transparency.

The CEO and CNET founder, said that he hoped Changemoney.org would help more people understand the power and potential of digital money, adding:

"Change money and the unbanked can become banked. Immigrants and the working poor can keep more of their hard-earned pay. Small businesses and startups can compete on a level payments playing field against corporate giants."

"Change money and the black-box model of today's banking sector can be replaced with a glass-house model defined by real-time transparency," he concluded.

The platform has also added two more currencies, the Indian rupee and the Mexican peso, raising the total available to eight, after its introduction of the Swiss franc in February.

The news comes after Bitreserve added three new precious metals to its bitcoin storage platform and five new languages – Mandarin, Japanese, English, Portuguese, Spanish and Russian.

Having introduced gold last year, the site allows its users to hold bitcoin pegged to silver, platinum or palladium since last month.

Bitreserve raised over $9m in a crowdfunding campaign earlier this year.

BitreserveHalsey Minor

March 19, 2015 at 05:20PM

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Intel Joins the Blockchain Technology Race, Forms Special Research Group

Last week Bitcoin Magazine reported that IBM is considering adopting the blockchain technology behind Bitcoin to create a digital cash and payment system for government and central banks. Now another technology giant is joining the digital fintech technology race: Intel is planning to investigate the potential of blockchain technology.

Intel has posted a job announcement for a new researcher to join its special innovation projects group to “investigate hardware and software capabilities that advance the performance, robustness, and scalability of open, decentralized ledgers.”

Working with a team of distributed systems, operating systems, and security technologists, the selected applicant will focus on the development of cutting-edge, cryptographic algorithms for improving the robustness and assurance of transaction verification within an open, decentralized ledger, according to Intel.

Applicants must be qualified in the areas of crypto algorithms, access control models and security/privacy protocols, proficient in the development of system and application software and familiar with relevant security and cryptographic standards.

“These two tech giants [IBM and Intel], whose technology powers many of today’s most loved products want to get in on the technology behind bitcoin,” notes Upstart Business Journal.

“The jury may remain out on the value of bitcoin as a currency, but the underlying blockchain technology has attracted interest from central banks, the financial services establishment and tech titans,” reports Finextra, commenting on possible blockchain fintech developments at IBM and Intel. “Chip giant Intel is also dipping its toes.”

“Digital currencies like Bitcoin have captured the imagination of the press,” notes the Intel post. “Related startups are generating a great deal of VC [venture capitalist] interest and investment because of the potential significance of any disruption of the financial payment industry. Its fundamental technical innovation is the decentralized transaction ledger called the ‘block-chain.’ It allows bitcoin to prevent double-spending of currency by recording all transactions in an open ledger without the need for a central authority. Such a distributed, public, secure, peer-to-peer transaction record enables not just the exchange of bitcoins but many secondary uses that the research and startup community are exploring such as digital marketplaces.”

Reading between the lines of the Intel job announcement and speculating on the possible future involvement of Intel in blockchain-based fintech products, it appears that the chipmaker intends to focus on the security-related aspects of blockchain algorithms, possibly in view of the implementation of appropriate security frameworks in future Intel chips. The possibility of secure “Intel Inside” hardware wallets comes to mind, as well as noncurrency applications such as authentication and voting systems.

The cryptographic researcher will be based at Hillsboro, Oregon. The site hosts a Research and Pathfinding Laboratory where employees develop silicon technologies that are two to three generations ahead of Intel’s current manufacturing processes, and develop new ways to make digital technologies faster and easier to use.

The site also is home to Logic Technology Development, Components Research, and Design and Technology Solutions groups, responsible for developing advanced integrated circuit technologies and designing key components of microprocessor products.

March 19, 2015 at 02:49PM

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UK Government to Fund Research in Digital Currencies and Explore Regulation

UK Government Funds Research in Digital Fintech and Promotes Firm Regulations

In November, the U.K. government launched a call for information on digital currencies, with a focus on their function as a payment method rather than as a speculative investment.

After receiving more than 120 responses, the government released a Treasury document titled “Digital Currencies: Response to the Call for Information,” which summarizes the submissions received and outlines the government’s views and proposed next steps:

• The government intends to apply anti-money laundering regulation to digital currency exchanges in the United Kingdom, to support innovation and prevent criminal use. The government will formally consult on the proposed regulatory approach early in the next Parliament.


• The government will work with BSI (British Standards Institution) and the digital currency industry to develop voluntary standards for consumer protection.


• The government is launching a new research initiative that will bring together the Research Councils, Alan Turing Institute and Digital Catapult with industry in order to address the research opportunities and challenges for digital currency technology, and will increase research funding in this area by £10 million (U.S. $14.6 million) to support this.

The Digital Catapult is a national center whose mission is to rapidly accelerate the United Kingdom’s best digital ideas to market to create new products, services, jobs and value for the U.K. economy. Their focus is on data and metadata – on the data value chain.

The Alan Turing Institute will promote the development and use of advanced mathematics, computer science, algorithms and big data for human benefit. The Institute will encompass a wide range of scientific disciplines and be relevant to a wide range of business sectors.

Allocating the grant to these organizations indicates that the U.K. government is interested in supporting and understanding the underlying technology – the blockchain – and understands the potential benefits it could bring to society.

The first two points indicate that, similar to progressive jurisdictions such as the Isle of Man, the U.K. government intends to offer a friendly and agile regulatory environment to digital fintech firms while providing strong consumer protection and strictly applying money-laundering regulations. This approach, agile but firm, suggests that cryptocurrencies are poised to be integrated with the regulated framework of mainstream fintech.

The Treasury document recognizes that, in addition to reducing the costs involved in moving money around the economy, digital currencies can speed up transaction processing times, the cost and time advantages of digital currencies being most notable in the context of cross-border transactions.

While digital currencies offer greater privacy in some respects, they also create greater transparency, because all transactions are published on the public blockchain. This consideration shows that, similar to other governments, the United Kingdom is now persuaded that digital fintech based on cryptocurrencies can provide more – not less – transparency and control.

Elliptic, a secure Bitcoin vault based in London, stated that the U.K. government action plan represents encouraging progress in several key areas: anti-money laundering (AML), consumer protection and technical standardization.

“Prioritizing AML will bring much-needed legitimacy and clarity to the industry and hopefully encourage banks to engage more with digital currency businesses,” reads Elliptic’s statement.

“Furthermore, allowing the industry to develop its own consumer protection and technical standards will promote collaboration and innovation much more efficiently than top-down regulation. This response is important for cryptocurrency companies in the U.K. because it demonstrates a pragmatic, collaborative and priority-driven approach to regulation,” the statement reads. “The Treasury’s willingness to work alongside entrepreneurs to promote financial innovation while working tirelessly to protect consumers is a main reason the U.K. holds its place at the forefront of fintech innovation globally.”

March 19, 2015 at 02:15PM

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Bitcoin Companies Take the Stage at SXSW Interactive

The 2015 South by Southwest Interactive, held March 13-17, offered an exciting glimpse into the future for cryptocurrency users. Products that generated the most buzz focused on security for bitcoin users and the general public. Here are the top five products that caught the attention of the judges, experts and the media.

Fitcoin

Fitcoin, an iOS app from Chaotic Moon Studios in Austin, Texas, allows users to receive bitcoin for workouts. Simply pair it with Mio Fuse, Jawbone UP3 or Atlas wearable technology. The app tracks the duration, distance and intensity of a workout in real-time. By calculating the energy spent working out into CPU time on a Bitcoin mining rig, users earn slivers of bitcoin. The company does not specify the source of the payment.

“At Chaotic Moon we are interested in crypto-tech computing and decentralized services, and wanted to explore them through a prototype that leverages the block chain as application, service layer and platform,” said Ben Lamm, CEO of Chaotic Moon Studios in a press release. “It was important for us to make this experience compelling, useful and obvious for users by bundling the block chain with the quantified self: translating sweat into equity.”

The company hopes this app will appeal to the general public, possibly making digital currencies more popular. They also hope to collaborate with sports apparel companies such as Adidas to offer a discount to app users.

“We are excited to see how cryptocurrency can motivate people to make their exercise and fitness routines a long-term habit,” said Jon Werner of Adidas Digital Sports.

It is still in an early alpha release phase but generated much buzz at SXSW 2015.

CoinPip

The public might be familiar with CoinPip, the bitcoin payment option. Last year, CoinPip Pte Ltd. updated their system so transactions could be converted into 70 regional currencies. At SXSW 2015, the company launched an expansion of their SMS wallet. Users in the United States, Singapore, Hong Kong and Indonesia can now transfer money online to workers living in remote areas in Indonesia.

“Bitcoin is moving on. The power is not just in the currency, but in the technology,” says Anson Zeall, co-founder/CEO of CoinPip in a press release.

Along with this latest expansion, the CoinPro is partnering with Melotic, a Bitcoin company based in China to bring a payment service to China.

Looking ahead, the company will also add the United Kingdom, Malaysia, Turkey, Kenya and the Philippines to their service areas.

Ledger Wallet

In a promotional video filmed at SXSW 2015, Eric Larchevêque the CEO of Ledger, tells viewers that his company wanted to bring the best of the Smartcard technology to Bitcoin. The latest innovation is the hardware wallet, which provides protection against hackers and thieves. The device fits in the USB port of any computer. In fact, it resembles a memory stick.

As Bitcoin Magazine noted in February, the Ledger Wallet stores transaction keys inside the wallet so it is never stored in the memory of a computer. He claims that even if the computer is compromised by hackers or viruses, the bitcoin will be safe and users will still have full access to their Bitcoin account.

“If we want to have mass market adoption, we need to have very secure and simple solutions so that people don’t get their bitcoin hacked or stolen by malware,” Larchevêque says.

Ledger Wallet was one of the featured start-ups in the SXSW 2015 Accelerator Pitch-off. The event is designed to allow technology start-ups in the early stage to pitch their products to investors, media and experts. It was a finalist in the Innovative World Technologies Category.

It is available for sale on their website.

AnchorID

AnchorID was selected as an alternate in the Innovative World Technologies category at 2015 SXSW Accelerator pitch competition. This platform helps users create a universal login to access sites across the web. Thus, it eliminates the need to remember their usernames and passwords. Users can choose to use Smartphone authentication or biometric technology, such as fingerprint or voice recognition.

This patent-pending platform is limited to sites and apps that accept it. With the ever-increasing possibility of mobile malware infecting payment systems, AnchorID claims to offer a secure enterprise authentication.

Digify

Digify allows users to maintain control over shared content. Through this multi-platform file sharing service, it can notify users if someone is viewing their files or if the files are being forwarded. Users can set their shared content to self-destruct once opened. There are also other options for users, such as view-only and unshared. Through Digify, users can protect their files or calculate how often the file has been viewed by recipients.

“In a world of constant digital messaging and sharing where sensitive information can be read by anyone and is out there forever, people need to secure their files or face a very real risk of losing control of their confidential information,” said Augustine Lim, co-founder and CEO of Digify in a press release.

Chosen as the finalist in SXSW’s Interactive Innovation Awards competition in the privacy and security category. Digify is available through Google Play, Apple App Store or the Digify website.

March 18, 2015 at 03:30PM

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Facebook Instant P2P Payments and the Future of Money

The prestigious MIT Technology Review has published a Business Report on “The Future of Money.”

The report surveys emerging digital money and online payment technologies, including Apple Pay, Alibaba’s Alipay and Bitcoin, and concludes that promising advances will be integrated with mainstream fintech and controlled by large players.

“As technology-driven payment ideas give cash a run for its money, the big winners could be established banks and credit card companies,” the report begins, and goes on to describe fintech advances such as digital wallets, cryptocurrencies and mobile peer-to-peer payments.

“Which technologies and companies are likely to lead this transformation is the big question for this Business Report,” the report reads.

The MIT Technology Review report missed by a few days the announcement, reported by TechCrunch and also covered by The New York Times, that Facebook unveiled a new payments feature for Facebook Messenger.

The new Facebook payment features allows users to connect their Visa or Mastercard debit cards and send friends money on iOS, Android and desktop with zero fees. Facebook Messenger payments will roll out first in the United States over the coming months.

“We use secure systems that encrypt the connection between you and Facebook as well as your card information when you ask us to store it for you,” says the Facebook announcement. “We use layers of software and hardware protection that meet the highest industry standards. These payment systems are kept in a secured environment that is separate from other parts of the Facebook network and that receive additional monitoring and control. A team of anti-fraud specialists monitor for suspicious purchase activity to help keep accounts safe.”

Facebook doesn’t charge payment fees because it doesn’t have to monetize payments. For Facebook, it’s enough to keep users locked in the hugely popular Messenger app instead of switching to a dedicated payment service such as PayPal or Google Wallet to send money to friends.

Messenger is one of the largest platforms in the world, with more than 500 million monthly users. And last year Facebook spent nearly $22 billion to buy WhatsApp, a separate messaging platform that now counts more than 700 million active users globally.

The new integrated payment features, which are fast, easy to use and secured by solid technology and operating practices, could make digital friend-to-friend payments and micropayments commonplace.

“[C]onversations about money are already happening on Messenger,” as people chat about bar tabs, splitting dinner bills, and sharing the cost of an Uber, Facebook’s product manager Steve Davis told TechCrunch. “What we want to do is make it easy to finish the conversation in the same place you started. You don’t have to switch to another app.”

Given Facebook’s huge size and reach, the introduction of its payments feature is likely to disrupt the emerging market for instant P2P payments, notes The New York Times. And analysts said that if the payment system succeeded, Facebook would extend it to other types of purchases, such as consumers’ buying of products directly from advertisers.

With this announcement, the social networking giant seems to be claiming a place among the large companies that, according to the MIT Technology Review report, will be the big winners in the digital fintech arena.

The Facebook announcement doesn’t mention Bitcoin. But it would be technically easy to add a Bitcoin wallet besides a credit card, and send bitcoin payments to the wallet of the recipient. That leaves open the option for Facebook to integrate bitcoin payments.

Blogger Jimmy Song suspects that bitcoin payments may indeed be part of Facebook’s long-term plan. He notes that David Marcus, the former PayPal president who now runs Facebook’s Messenger division, has been a fan of bitcoin for a long time.

March 18, 2015 at 03:03PM

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Overstock Reveals Items Most Often Bought With Bitcoin

Online retail giant Overstock has released new insight into the buying behavior of its bitcoin customer base, revealing bed sheets have become the demographic’s favorite item to purchase.

The top five items bought on Overstock with bitcoin are now sheets, donations to non-profits, headphones, cases and holders, and area rugs, respectively. Cables and tools, mattresses, coffee tables, A/V cables and fashion sunglasses round out the top 10 categories.

Addressing the findings, Overstock director of communications Judd Bagley commented on the relatively mundane list of items as evidence of the program’s overall success.

Bagley told CoinDesk:

“The only thing that makes that list interesting is the fact that it’s so unremarkable. I guess bitcoiners are regular people.”

The remaining top 50 items show everyday items such as bath towels and comforter sets ranking above tech fare such as USB flash drives and micro SD cards.

Overstock’s data suggests it has been successful in winning regular spending from the bitcoin demographic, a trend it first discussed last August.

E-commerceOverstock

March 17, 2015 at 05:33PM

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Japanese E-commerce Giant Rakuten to Accept Bitcoin Through Bitnet

Rakuten announced that it plans to enable customers to choose bitcoin as a payment option by integrating Bitnet’s payment processing platform on a number of its marketplaces.

The Internet services giant will begin accepting the new payment method first in the United States, then in Germany and Austria. The integration with Bitnet’s platform will make Rakuten one of the largest e-commerce companies in the world to accept bitcoin payments.

“Rakuten’s mission is to empower the world through the Internet,” said Yaz Iida, President of Rakuten USA. “Not only can bitcoin support this vision by helping our merchants better compete globally, but it also has the potential to benefit society by enhancing the security, privacy and convenience of financial transactions. This is one of the reasons why we invested in Bitnet last year and we look forward to working with them on our U.S. marketplace.”

Rakuten, a Japanese e-commerce company founded in 1997 by current CEO Hiroshi Mikitani, operates the largest e-commerce site in Japan and one of the world’s largest by sales, immediately behind Amazon, eBay and Alibaba. The company provides a variety of products and services for consumers and businesses, with a focus on e-commerce, finance and digital content.

Since 2012, Rakuten has been ranked among the world’s “Top 20 Most Innovative Companies” in Forbes magazine’s annual list. Rakuten is expanding worldwide and currently operates throughout Asia, Europe, the Americas and Oceania.

Rakuten sells basically everything online – electronics, computers, fashion and beauty products, books, movies, music, household items, toys, health products, etc. – so the Rakuten online shop can provide a one-stop destination for all needs besides food and rent. That will facilitate the global adoption of bitcoin as an Internet currency that can be used to pay for all sorts of useful things online.

Rakuten has been open and passionate about bitcoin’s potential use, hosting several panel talks dedicated to the subject at a recent financial conference hosted by the company, The Wall Street Journal reports.

Bitcoin payments will be launched first in the United States, Germany and Austria, but Rakuten’s biggest sales are in the Japanese e-commerce site, which isn’t open to bitcoin yet. Mikitani said last month that he plans to roll out the bitcoin function to the Japanese market as well, but didn’t specify a target date.

In October, Rakuten participated in a $14.5 million Series A funding round for Bitcoin payment processor Bitnet, led by Highland Capital Partners. TechCrunch notes that, with this development, Rakuten is putting its investment in Bitnet to work. This news is notable because it not only continues the trend toward bitcoin acceptance among retailers, but it could help position Bitnet as a credible alternative to leading bitcoin payment processors Coinbase and BitPay.

Another possible and important consequence of this development is that it could stimulate the adoption of bitcoin payments by the three global e-commerce operators bigger than Rakuten: Amazon, eBay, and Alibaba. EBay is considering taking bitcoin payments, and its subsidiary PayPal, the main online payments provider accepted by all e-commerce sites, is taking steps toward accepting bitcoin payments.

Image of Yaz Iida via LinkedIn.

March 17, 2015 at 02:16PM

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Purse.io Partners with Coinbase to Make Bitcoin Shopping Easier

Today, Purse.io is announcing a new partnership with Coinbase in an effort to increase its mainstream user base by making it easier for customers to shop with bitcoin on Amazon.com.

Purse is a peer-to-peer marketplace that connects spenders and buyers of bitcoins. Customers shop for items on Amazon.com by creating a wishlist.Then they exchange bitcoins for items on the list with customers who are interested in buying their bitcoins. Shoppers typically see a savings of between 8 and 20 percent on their purchases, but the process can be a bit complicated for new users. Purse is hoping to streamline this process and create a more seamless experience once the Coinbase integration goes live.

“This is a pretty big focus for us,” says Ashkan Motamedi, business developer and marketing manager at Purse. He said that, like Coinbase, one of Purse’s primary goals is to promote mainstream adoption of bitcoin.

Coinbase is a bitcoin wallet and platform for merchants and consumers. It powers a collection of third-party apps on its website, allowing companies to build their bitcoin service on its wallet infrastructure. Purse customers will be able to download the Purse.io app and connect directly through their Coinbase accounts.

They will then be able to access funds directly from their Coinbase wallets when they make purchases through Purse.

Adding Coinbase integration also offers an extra level of security and fraud protection to Purse’s business model. Dogged in the past by concerns over users’ potential fraud and money-laundering practices, Purse has taken steps to ensure that users are verified and customers are protected.

“Spenders are totally vetted through Coinbase,” says Motamedi. He also said that fraud detection goes through both Amazon and Sift Science, a system that goes through users’ behaviors, IPs and buying history: “It’s like what Amazon already does but it’s just another level of verification,” says Motamedi.

Motamedi cited improved security and ease-of-use as two important steps toward more mainstream adoption for bitcoin businesses. Over the coming months, Purse has plans to make more changes to its service that will move things farther in that direction.

“In the future, when we build new apps, we’ll of course be using Bitcoin in the back end … but making the front end more seamless,” says Motamedi. There are also plans in the works to improve the search function and phase out the “wishlist” step, thus making ordering and delivery faster and more convenient.

Image via Purse.io

March 16, 2015 at 09:44PM

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Factom Announces Launch Date for Token Crowdsale

Factom has announced it will launch its forthcoming crowdsale on 31st March at 15:00 UTC.

Billed as a “software sale”, the event will allow consumers to exchange bitcoins for Factom tokens that will be available upon the blockchain-based recordkeeping network’s beta release.

Factom president Peter Kirby indicated that final launch date was set after his company met key objectives, including a certain threshold of confidence in its beta version as well as the finalization of milestones with decentralized application crowdfunding platform Koinify.

Speaking to CoinDesk, Kirby spoke about the challenge Factom faced when seeking to orchestrate the sale, voicing his optimism that the project would avoid the pitfalls of those held in the past on platforms such as Mastercoin.

Kirby said:

“We wanted to run the cleanest software token sale in history. We don’t want our customers to be caught up in that regulatory concern. It’s a new asset class, so we have to make sure we’re abiding by all the rules, but watching out for the rules that don’t exist yet.”

Crowdsale funds will be released in installments of 33%, with Factom being able to obtain a portion of its funds upon the release of its beta client, its front-end and peer-to-peer consensus mechanism, respectively.

The Koinify platform requires companies to set benchmarks, serving as the arbitrator between the public and decentralized applications. The crowdsale is the second such event to be held on Koinify following the inaugural sale of GetGems tokens launched in December.

The news comes amid a steady stream of announcements for Factom, which has recently signed partnerships with industry service providers such as Coinapult, Serica (formerly DigitalTangible) and Tether.

Compatibility challenge

Kirby went on discuss the issue posed by working with Koinify, which leverages the Counterparty protocol to conduct its sales.

Factom had originally intended to use the Omni protocol, an alternative layer that allows tokens to be issued on top of the bitcoin blockchain. However, it decided to leverage its own technology to forge a solution.

“Originally we were going to release a proxy token, but we’re going to be issuing our own token on the Koinify platform that runs on Factom. It’s no longer an Omni project or a Counterparty project, it really does live on its own,” Kirby said.

Kirby went on to say the “whole point” of Factom was to focus on distributed ledgers, a factor the lead to the decision to release the tokens on top of its own protocol.

He continued stating that he expects the token to be exchangeable between peers when the beta platform is released, with exchanges then having the ability to decide whether to list the asset for trading.

Bitcoin only

To make purchases on the Koinify platform, customers will need to first purchase bitcoin. Bitcoins will then be sent to a public Factom address, which will contain the purchaser’s public key in a data field.

“When the Factom blockchain launches, the information embedded in all these bitcoin transactions will be used to generate the Factom tokens and load them into the purchasers’ wallets automatically,” the release states.

Factom said it will not be taking customer information as part of the sale, a process that will be mirrored by Koinify, which stressed it does not accept or transmit virtual currency, control bitcoin addresses or hold public keys as part of the sale.

“Koinify's job is to make sure that the best practices as far as the accountability (milestones) and transparency of this sale are followed and implemented in the crypto field and we do not desire nor need to control funds or currencies,” the company said.

Both parties indicated that more details would be released ahead of the launch.

Image via Factom

CounterpartyCrypto 2.0Factom

March 16, 2015 at 06:48PM

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Isle of Man Preparing to Pass Digital Currency Regulatory Framework

The Isle of Man wants to become a leading Bitcoin hub and attract digital fintech businesses, entrepreneurs and developers, Business Insider reports. The government of the tiny island is about to pass a new regulatory framework to create a true paradise for digital currencies.

The Isle of Man is a self-governing British Crown dependency located in the Irish Sea between the islands of Great Britain and Ireland.

While the United Kingdom is responsible for the island’s defense and foreign policy, the local parliament and government have power over all domestic matters. Business regulations and tax incentives are domestic matters, so the island has the freedom to pass innovative legislation and tax incentives to attract digital fintech firms and professionals.

In fact, the Isle of Man has long been a favorite location for online businesses that need a permissive regulatory climate. For example, it has a world-class reputation as an online gaming and sports betting hub that offers a friendly and agile regulatory environment to the operators and at the same time provides strong legal protection to their customers worldwide.

The new regulatory framework for digital fintech will be informed by the same principles, and may permit restoring the support of the leading U.K. banks that in 2014, scared by the high volatility of bitcoin, stopped working with the digital currency industry on the island.

Brian Donegan, the Isle of Man’s head of operations for digital development and e-business, told CoinDesk that the government is moving aggressively to put key measures in place that would help the region’s budding digital currency industry thrive.

The Proceeds of Crime Act, which has been altered to account for digital currencies, is expected to come into force at the start of April. A new legislation, the Designated Businesses Bill, will regulate the activities of businesses responsible for holding sums of money, including Bitcoin exchanges.

Peter Greenhill , head of e-commerce for the Isle of Man, told Business Insider that the aim is to be the most attractive place in the world for cryptocurrency companies to work from, with “friendly but firm legislation” for digital currency startups.

“We have the regulations and infrastructure in place to become a world leader in digital currencies,” he said. “We already have companies coming in and setting up. We see this as the future and we want to be at the center of development in this area.”

It may seem odd that firmly enforced regulations are presented as an advantage for companies operating in a frontier industry that is often threatened by regulators, but Greenhill considers it a necessary step to foster trust in the use of digital currencies.

“These companies will be listed on a register that will be strictly controlled by the island’s Financial Supervision Commission,” he told Computer Weekly. “They will hold their records, have them audited, looked at, and if they see something untoward they’ll take those people off that register and make sure the world knows about it. We set the bar high, and if people don’t meet [our requirements], they can go somewhere else.”

It appears that the Isle of Man is aligning with the current trend of fostering the emerging Bitcoin economy and taking it mainstream, but under a firm regulatory framework.

Isle of Man image via Flickr.

March 16, 2015 at 05:11PM

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Bringing Back the Best: This Week on Decentral Talk Live

by Bitcoin Magazine Staff on March 16, 2015 { }

Decentral has recently moved its offices. As a result, decentral.tv is in the process of creating a new and improved studio. So this week, we revisit some of our best episodes that also aim to shed some light on topics that you’ll see in the news this week.

We start off with an episode from December 2014 when Dmitry Murashchik of Mycelium was our guest. This week, Mycelium will be shipping out their first, sold-out batch of brand new Entropy devices. Entropy is a small USB device that uses hardware-based entropy to generate printable Bitcoin paper wallets. Find out more about Mycelium and Entropy on Monday’s featured episode of Decentral Talk Live.

On Tuesday, we go back to TNABC Las Vegas for an interview with Patrick Cines of the College Crypto Network . CCN is involved in plenty of projects these days, including a Bitcoin Charity Summit at USC. Find out more about how young Bitcoiners are spreading the word about digital currencies in their colleges and communities.

Every day on various community chat boards, people ask, “How do I know which wallet is best for me and how do I make sure it’s secure?” CryptoCurrency Certification Consortium (C4) president, Michael Perklin, sat down with co-hosts Anthony Di Iorio and Ethan Wilding to break down the various types of wallets and important steps that users need to take to secure their funds.

It’s tax season, so figuring out how to include bitcoin on a tax return is on people’s minds these days. On Thursday, decentral.tv will try to shed some light on a complex issue by highlighting an interview with Jake Benson of LibraTax. Find out more about keeping more of your money while staying on the right side of tax legislation on this featured episode of Decentral Talk Live.

Ending the week on a positive note, DTL brings back its popular interview with Connie Gallippi, founder of the BitGive Foundation . Gallippi has worked tirelessly to enable the Bitcoin community to support charitable work by organizations such as Save the Children and the Water Project. BitGive is the first registered Bitcoin charity in the space. It recently formed a partnership with ChangeTip that allows users to automatically redirect their tips to BitGive. BitGive is also part of the 1% Initiative with Purse.io and Chain to save customers money and donate 1 percent to charity.

Past episodes of Decentral Talk Live can be found on the decentral.tv playlist. Featured episodes will be showcased at 3 pm EDT, Monday-Friday on decentral.tv.

March 16, 2015 at 03:49PM

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Former OKCoin Product Manager Joins Bitfinex

Former OKCoin manager of international operations Zane Tackett has announced he will join Hong Kong-based bitcoin exchange Bitfinex.

Tackett became the latest public-facing figure to resign from OKCoin on 10th March. At the time, he cited a “difference of opinion” as well as “unsolved problems” facing the exchange as motivating factors.

Tackett revealed his position at Bitfinex will be familiar, as he will take over community outreach and product development, roles he also played at OKCoin. Further, he discussed some of the challenges facing the USD bitcoin trading leader, arguing the exchange must not stay complacent given the competition in the sector.

Tackett told CoinDesk:

“I think the best way to gain users is to interact with them and offer the best exchange in the world, and that's what I'll be looking to do at Bitfinex.”

The announcement notably follows the departure of OKCoin’s CTO Changpeng Zhao last month, and comes amid signs the exchange is shifting focus away from international trading.

Bitfinex is currently the market leader in USD bitcoin trading, according to data from Bitcoinity, trading 1.2m BTC over the last 30 days. By contrast, OKCoin is the number two exchange in both USD and CNY trading, trailing BTC China in its home market.

BitfinexExchangesOKCoin

March 16, 2015 at 03:27PM

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