8 March 2014

Why The Bitcoin Industry Must Recognise Its Responsibilities

Michael Jackson is a software engineer, entrepreneur and venture capital investor at Mangrove Capital Partners.

The most significant issue affecting the adoption of cybercurrencies is the safety of bitcoin holdings.

This is a fundamental deficiency of what is a software-defined asset, totally accessible instantaneously and online. In short, bitcoin’s very characteristics make it too easily accessible for criminals.

Continue reading at CoinDesk

March 08, 2014 at 02:47PM

Why Isn’t Your Business Accepting Bitcoin?

Arianna is a bitcoin enthusiast and investor, who organizes a bitcoin meetup group in New York.

Bitcoin has been blowing up the news lately, mostly with bad press stemming from Mt. Gox’s recent collapse.

If you’re a business owner who is considering accepting the digital currency, this may be causing heart palpitations. Despite the temporary market unrest, there are huge opportunities for merchants to benefit from accepting bitcoin – I’ve outlined a few below.

Continue reading at CoinDesk

March 08, 2014 at 01:50PM

7 March 2014

$113m in Gox Money Believed To Be Moving Through Block Chain

Large amounts of bitcoins previously handled by Mt Gox, which have lain dormant for years, have started moving on the block chain.

Since the exchange blew up at the end of last month, people have been wondering where the stolen coins went, and have tried to trace some movements between Gox addresses. One participant on the bitcoin talk forum recalled an IRC conversation between Gox CEO Mark Karpeles and various users, which allegedly took place on June 23, 2011.

During their conversation, Karpeles (a.k.a. MagicalTux) offered to demonstrate that the exchange owned large numbers of coins, by sending a uniquely identifiable amount to a given address. He sent 424242.42424242 bitcoins to a specific address beginning with 1eHhgW6vquBY. Sure enough, they showed up.

Continue reading at CoinDesk

March 07, 2014 at 11:24PM

FreedomPop’s Snowden Phone – A Mobile Service Built for Privacy


In a society that is increasingly reliant on mobility, the privacy of information is of utmost importance. Now, thanks to FreedomPop, there is a solution that gives mobile users government level security. With a platform that is based on privacy, FreedomPop’s Privacy Phone, nicknamed “The Snowden Phone,” allows mobile users to take advantage of encrypted mobile service.

The Snowden Phone is able to protect your privacy from hackers, government agencies and spyware, ensuring your internet, voice calls and texts are secure and encrypted. In a company press release, FreedomPop stated, “We launched the phone to specifically protect Americans’ privacy, thereby providing the peace and assurance [of] knowing your data is not being compromised. The phone is a response to the growing frustrations and concerns around privacy infringement, call monitoring and Internet tracking.”

For users, FreedomPop’s service can provide peace of mind and ensure private information remains in the right hands. “In light of recent violations in consumer’s privacy across social networks and mobile devices, privacy is becoming increasingly important to many Americans and we all have a right to communicate anonymously,” said Steven Sesar, COO at FreedomPop. “Large carriers don’t have the flexibility, desire or creativity to invest in privacy. We don’t agree with this approach and felt it was up to us to create a truly private mobile phone service at an affordable price.”

The Snowden Phone is one of the first of its kind and has benefits for both the common consumer and individuals in the many cryptocurrency communities. The platform behind the service leverages FreedomPop’s VoIP network, and allows for private communication, anonymous internet and online security.

To ensure private communication, FreedomPop utilizes 128-bit encryption, which helps encrypt calls and text messages, prevents online marketers from tracking web activity and defends against data monitoring and eavesdropping, amongst many other benefits surrounding communication privacy.

The service also can protect users with advanced mobile security that protects your device from viruses and malware attacks. Additionally, FreedomPop can protect privacy by blocking unsolicited calls and text messages, and blocks malicious and phishing websites from accessing and stealing confidential data. Also, all application and internet data is sent through a secure and encrypted virtual private network (VPN).

The Snowden Phone costs $189 and is built on top of the Samsung Galaxy II smartphone. Service comes with unlimited voice and text, plus 500 MBs of data for three months and costs $10 each subsequent month after that.

Although FreedomPop’s Privacy Phone may not be for everyone, there is no mistaking the importance of keeping your information out of the wrong hands. The nature of the information age makes anyone susceptible to confidential data theft and other attacks that spring forth from the increasing availability of sensitive personal information. What FreedomPop has provided is a solution to the problem, providing a device with built in VPN, anonymous voice and data, all of which can be purchased with Bitcoin.

Like Bitcoin, FreedomPop seems to support the same foundations that cryptocurrencies have been built upon – security and anonymity using a platform that allows for world-wide adoption. By shining light on the importance of information protection, this service could change the way we think of personal security, which can be extended not only to mobility, but also the conventional methods we use to pay for goods and services.


The post FreedomPop’s Snowden Phone – A Mobile Service Built for Privacy appeared first on Bitcoin Magazine.

March 07, 2014 at 07:28PM

Community Fundraiser Nets $7k and Counting for Alleged Bitcoin Creator Dorian Nakamoto

Noted security expert and bitcoin developer Andreas Antonopoulos announced a fundraising campaign on 7th March for Dorian Satoshi Nakamoto, the 64-year-old California engineer who Newsweek has suggested is the inventor of bitcoin.

The funds, according to Antonopoulos, will serve as a small “thanks” from the community should Nakamoto turn out to be the founder of bitcoin. If not, Antonopoulos said the money could still be used by Nakamoto and his family to cover any legal or medical bills they are facing.

At press time, more than 12 BTC (nearly $7,500) had been sent to the wallet by more than 400 bitcoin supporters.

Continue reading at CoinDesk

March 07, 2014 at 07:02PM

Bitcoin Decentral Launches Bitcoin and Cryptocurrency 2.0 Accelerator


Over the past few months, Bitcoin Decentral, the new Toronto-based Bitcoin community center and coworkingspace that has been operational since the start of the year, has come to take center stage in the Canadian Bitcoin economy. Progress toward renovating and furnishing the upper floors of the four-storey house are well underway, and even now the location serves as the headquarters of KryptoKit, the Bitcoin Alliace of Canada, the organizing committee for the upcoming Bitcoin Expo and the Canadian arm of Ethereum as well as the site of a weekly meetup that attracts 50-100 attendees. The site is one of three similar locations in Canada, alongside the Bitcoin Embassy in Montreal and a smaller community center, also named Decentral, located in Vancouver, and the concept of a “Bitcoin embassy” is rapidly taking hold in countries all around the world. Now, Bitcoin Decentral has announced that it is launching its newest program: a Bitcoin and cryptocurrency 2.0-specific startup accelerator.

The program, entitled Bitcoin Decentral Accelerate, is a standard three-month startup acceleration program, in which participating startups will be able work together at Bitcoin Decentral and enjoy the benefits of specialized in-house legal counsel, shared office resources and the assistance of and a number of expert mentors, investors, and business owners experienced in the cryptocurrency space. Startups will receive these benefits, alongside an upfront injection of a yet-to-be-determined quantity of cash, in exchange for a seven per cent stake in the company, and will also be eligible for an additional larger investment at the end of the three-month program. Managing the Bitcoin Decentral Accelerate program is A. Traviss Corry, who previously managed the Toronto-based incubator program Incubes until a dispute with Incubes CEO Ben Zlotnick led to his departure. Also involved are Anthony Di Iorio, founder of Bitcoin Decentral, as CEO and William Mouyagar, founder of Startup Management as special advisor.

In addition, the program has signed up over 100 mentors, including:

  • Erik Voorhees, a long-time Bitcoin advocate well-known for his involvement in a number of Bitcoin startups, including BitInstant, SatoshiDice, KryptoKit and his current main project, Coinapult. Coinapult is currently a service for sending bitcoins by SMS and email, but intends to soon become a powerful international Bitcoin exchange.

  • Andreas Antonopoulos, a Bitcoin security expert and frequent speaker at Bitcoin conferences, also serving as a permanent co-host at the Bitcoin podcast Let’s Talk Bitcoin and more recently the Chief Security Officer at blockchain.info.

  • Tony Gallippi, founder and CEO of BitPay, a Bitcoin payment processor that allows merchants to accept Bitcoin payments and optionally have the funds immediately converted into local currency in their bank account, thereby instantly protecting them from all Bitcoin price volatility risk. The company charges processing fees of only 0.01-0.99%, and now has over 25,000 merchants signed up.

  • Jason King, founder of Sean’s Outpost, the now famous Bitcoin-accepting homeless outreach program in Pensacola, Florida, and the associated permanent shelter Satoshi Forest.

  • David Johnston, co-founder of the Bitcoin angel investing group BitAngels and director at the Mastercoin Foundation.

  • Jamie Robinson, founder of QuickBT, a Canadian company that allows users to buy up to 0.1 BTC with their debit cards

  • Stuart Hoegner, a cryptocurrency and gambling lawyer who is also involved as a counsel at the Bitcoin Alliance of Canada

  • Johann Gevers, founder of Monetas, the company behind the federated-server-based auditable financial transactions toolkit OpenTransactions

  • Gav Wood, lead C++ developer at Ethereum

Although there have been several startup accelerator programs that have started including a Bitcoin component, Bitcoin Decentral Accelerate is the first in the world to be a cryptocurrency-specific program right from the start, and the first program or sub-program to specifically target ventures related to the rapidly growing concept of “cryptocurrency 2.0″ – using Bitcoin-like cryptography and blockchains for more than just money, including applications such a decentralized domain name registry, smart property and smart contracts, cross-chain currency exchange, online democracy, custom branded currencies and blockchain-based financial contracts. The program is now accepting applications from startups; anyone interested in applying is enouraged to submit the application form at bdaccelerate.com at

The post Bitcoin Decentral Launches Bitcoin and Cryptocurrency 2.0 Accelerator appeared first on Bitcoin Magazine.

March 07, 2014 at 06:42PM

One Does Not Simply Find Satoshi Nakamoto

Newsweek’s decision to out Dorian Satoshi Nakamoto as the creator of bitcoin appears to be backfiring spectacularly.

Nakamoto was quick to deny that he was the ‘real’ Satoshi Nakamoto and he attributed the misunderstanding to his less than perfect command of the English language.

He told the Associated Press that he refused to discuss his employment with Newsweek reporter Leah McGrath Goodman because he had signed confidentiality agreements, not because he was involved in the development of bitcoin.

Continue reading at CoinDesk

March 07, 2014 at 03:04PM

Satoshi Nakamoto Denies Being Creator of Bitcoin Amid Media Frenzy

The man Newsweek named as bitcoin inventor Satoshi Nakamoto has denied any involvement with it or cryptocurrency.

Dorian Satoshi Nakamoto, a Japanese-American resident of Los Angeles, found himself thrust into the the limelight just a day ago when Newsweek reporter Leah McGrath Goodman claimed the anonymous, or pseudonymous, man who released bitcoin on the world had been found at last.

Newsweek ran the story on the front cover of its newly-relaunched print edition, but after being pursued through the streets of LA by reporters for a day, Nakamoto said “I got nothing to do with it”.

Continue reading at CoinDesk

March 07, 2014 at 08:02AM

CoG Flies iOS Bitcoin Wallet Under Apple’s Radar

A Kentucky organization thinks that it has found a way to install fully-functional bitcoin wallets on Apple iOS devices, bypassing the infamously draconian vendor’s app store.

The Cycle of Goodness (CoG) co-operative launched its iOS wallet, Pheeva, at the Texas Bitcoin Conference this week. The wallet, built using Bitcoinjs, is installed via a link mailed to users by the organization.

Apple is notoriously anti-bitcoin, having wiped several wallets from its app store, but Lamar Wilson, founder of LoveWill, a new software development firm affiliated with CoG which wrote the app, is confident that the co-operative will escape its wrath.

Continue reading at CoinDesk

March 07, 2014 at 07:59AM

6 March 2014

Vault of Satoshi Halts US Bitcoin Exchange Service, Cites Worsening US Regulatory Conditions

Toronto-based bitcoin exchange Vault of Satoshi, announced via its Facebook account on 6th March that it will cease its US operations effective immediately.

Most notable, however, was the reasoning the company gave for the abrupt move. It suggested that the changing attitudes of US regulators were to blame for the service shutoff.

Citing a recent “Let’s Talk Bitcoin” Interview with Charlie Shrem, the company elaborated on its reasoning, saying:

Continue reading at CoinDesk

March 06, 2014 at 11:19PM

Bitcoin Inventor Satoshi Nakamoto ‘Found’ in California

Ever since bitcoin was created five years ago, the crypto community has been trying to find out the real identity of Satoshi Nakamoto. Many tried and failed, so eventually Satoshi Nakamoto became the Keyser Söze of the bitcoin world.

As the Söze saying goes, the biggest trick the devil ever pulled was convincing the world that he didn’t exist. Nakamoto’s biggest trick was convincing the world that his name was a pseudonym.

A new report claims it was not.

Continue reading at CoinDesk

March 06, 2014 at 01:07PM

New Toronto Accelerator to Invest $250,000 in Bitcoin Startups

The second cryptocurrency accelerator has opened in north America this week, this time in Toronto, targeting entrepreneurs working in “second generation cryptocurrencies”.

Bitcoin Decentral Accelerate will begin with a $250,000 fund, but hopes to score at least $1.5m in investment to sustain its first eight months of operation, according to its organizers.

The accelerator, launched by Bitcoin Alliance of Canada founder Anthony Di Iorio, is a spinoff of Bitcoin Decentral, the co-working space that has been operating since 1st January.

Continue reading at CoinDesk

March 06, 2014 at 09:56AM

5 March 2014

US Congressman Launches Satirical Bid to Ban the US Dollar

Just over one week ago, U.S. Senator Joe Manchin made headlines when he wrote an open letter to federal regulators calling for an outright ban of bitcoin, and now he has received a tongue-in-cheek response from a fellow politician, Congressman Jared Polis.

The Colorado representative issued a letter today to the same federal regulators that Manchin addressed, and in the letter Polis satirically calls for a ban on the physical US dollar.

Elaborating on his concerns about the dollar, Polis wrote that “the exchange of dollar bills, including high denomination bills, is currently unregulated and has allowed users to participate in illicit activity,” mirroring similar statements made by Manchin about bitcoin.

Continue reading at CoinDesk

March 06, 2014 at 02:02AM

Robocoin to Debut First Traveling ATM at SXSW Interactive Festival

Las Vegas-based bitcoin ATM specialist RoboCoin has revealed new plans for this week’s upcoming South By Southwest (SXSW) Interactive festival, set to begin on Friday 7th March and run through 11th March.

SXSW is one of the more notable events on the annual tech calendar, having helped launched major brands such as Twitter and Foursquare.

Robocoin, which debuted the first bitcoin ATM in Vancouver in October to massive fanfare, has a similarly stylish rollout planned for its SXSW debut. Robocoin will launch four ATMs around the city to raise bitcoin awareness at the event.

Continue reading at CoinDesk

March 05, 2014 at 10:46PM

Coinbase and Overstock.com: The results are in!

Coinbase and Overstock.com: The results are in!:


In January, we announced a partnership with Overstock.com which makes it possible for consumers to purchase items on Overstock.com using bitcoin. Today, we are excited to announce that Overstock.com has surpassed $1,000,000 of sales in bitcoin transactions. We also think it’s a fitting time to…

March 05, 2014 at 04:41PM

How Economist Milton Friedman Predicted Bitcoin

Bitcoin and its crypto-cash counterparts are essentially trustless monetary systems that upend the banking establishments ideals of how a financial system should operate.

Intriguingly, the concept of digital money was predicted as far back as the late 90s.

Economist Milton Friedman was one of the most renowned economists of the 20th century and his ideas radically changed the way that policymakers made their decisions.

Continue reading at CoinDesk

March 05, 2014 at 06:12PM

Ripple Courts Developers, Entrepreneurs With New Initiatives

Ripple Labs is on the lookout for developers and entrepreneurs alike this week.

The Ripple Accelerator, an incubator designed to help companies using the Ripple protocol, opened in San Francisco. And Ripple Labs, the firm behind the open-source digital payment protocol, has launched a developer offensive to encourage third-party apps and services to support it.

The Ripple Accelerator is designed as an independent entity, not influenced by Ripple Labs. It is operated by CrossCoin Ventures, a separate group of four partners, two of whom run the Menlo Incubator. However, it is located in the same building as Ripple Labs, which is providing office space and funding.

Continue reading at CoinDesk

March 05, 2014 at 11:25AM

4 March 2014

The BTC Foundation's Power Struggle

Loyal Idiots,

For those of you who have been regular readers, you know that it is incredibly rare for me to miss a Daily Bit. These past 72 hours have been among the most stressful of my life, and I have been betrayed by some of those within the industry whom I had trusted.

Either I was misled by my sources or my sources were misled by Peter Vessenes and Jon Matonis over the weekend. I reported on Sunday that they were stepping aside gracefully following their absent leadership during the Mt. Gox scandal. However, yesterday and today I received conflicting reports. One person close to Vessenes told me that not only does the man have no intention to step down as the Bitcoin Foundation’s Chairman, but he intends to run for reelection when his term is up later this year. I don’t know whether I can believe that is true, because it truly would be stunning.

Then again Rob Ford didn’t resign his mayorship either, and he made it onto Jimmy Kimmel.

(Vessenes did not respond to an email yesterday, and a contact number for the foundation redirected to a full voicemailbox.)

But that’s not what bothers me. What truly eats at my core stems from what has happened behind the scenes these past few days. Let me say simply that the failure in leadership across many other firms not named Mt. Gox is stunning. I will say no more at this point for legal reasons, but I can’t remember the last time that I was so professionally disappointed and discouraged by the willful neglect of those who many others would call leaders.

I now know better.

I must be meticulous with every detail that I report from both the Mt. Gox saga and now the incomprehensible mismanagement of the Bitcoin Foundation, a group created ostensibly to be the mouthpiece for an entire revolutionary industry.

Yes, I believe there is troubling circumstantial evidence connecting the two. But this gets into serious territory, and I won’t print it until I am 100% confident in what I am writing. I have been warned by others within the industry that I am now playing a “dangerous game” confronting “powerful” people who are “ruthless and cunning”.

Don’t expect me to blink.

Just please be patient. I won’t back down.

“TwoBit — AKA Ryan Galt — AKA Ryan Selkis seems a bit hot headed but his heart is in the right place. I’ve emailed him a little bit and he’s opinionated but he does go (hard) after facts. With his style he does intermingle opinions and facts and this can be off putting to some people (not my taste). That said, if you simply rewrote everything in his posts in paired paragraphs, one for the facts and one for his opinions, it might ruffle a few less feathers. While he’s (AFAIK) new to the community, he’s made some insightful contributions already.

Track record is everything in the fast moving world of Bitcoin; only time will tell the whole story. But I’m inclined to think his story will work out on the positive side. We shall see.”

-Fellow Lifetime Member Brian Goss on a Bitcoin Foundation Forum thread.



March 05, 2014 at 02:52AM

Overstock Tops $1m in Bitcoin Sales, Projects Up to $20m By Year’s End

It has been less than two months since e-commerce giant Overstock.com began accepting bitcoin payments on their website, and the online retailer has already surpassed $1m in total sales.

Overstock’s CEO Patrick Byrne confirmed the company’s plans to embrace bitcoin back in December, and bitcoin payment processing officially went live on Overstock.com on 9th January.

Byrne spoke with CoinDesk about its $1m milestone, asserting that while the initial surge of bitcoin sales did subside, there has since been steady growth in bitcoin payments:

Continue reading at CoinDesk

March 04, 2014 at 11:27PM

$1 Million Up for Grabs at Texas Bitcoin Conference Hackathon

The lucky winners of the upcoming Texas Bitcoin Conference Hackathon could walk away with up to $1m thanks to David Johnston, CEO of Engine, a personal information services startup.

While it might sound like a very generous gesture on Johnston’s part, he views it as a rather prudent investment instead.

The Hackathon will be held on 5th – 6th March in Austin, Texas, with the CEO taking to reddit to explain his plan in an AMA. There was no shortage of questions – after all, we are talking about a potentially life-changing sum of money.

Continue reading at CoinDesk

March 04, 2014 at 09:23PM

ZeroBlock Acquires Real-Time Bitcoin Trading Platform RTBTC

ZeroBlock, the bitcoin mobile app specialist recently acquired by Blockchain.info last December, has purchased real-time bitcoin trading platform and market visualization provider RTBTC.

Most notable, is that the acquisition is part of a larger play by Blockchain to attract institutional investors to its ZeroBlock property. RTBTC will power ZeroBlock’s new trading platform, and ZeroBlock’s proprietary news feed will be embedded in the new trading platform, allowing traders first access to market­-moving news.


Continue reading at CoinDesk

March 04, 2014 at 05:00PM

Bitcoin Bank Flexcoin to Close After $600,000 Bitcoin Theft

Alberta-based bitcoin storage specialist Flexcoin has announced that it will shut down following an attack and subsequent robbery that saw cybercriminals abscond with 896 BTC (roughly $600,000 at press time) stored in the company’s hot wallets.

Flexcoin, which styled itself as the “first bitcoin bank”, though it was not legally such an entity, took to its homepage to announce the theft and closure.

The statement reads:

Continue reading at CoinDesk

March 04, 2014 at 04:07PM

Polish Soccer Club to Accept Bitcoin for Tickets and Merchandise

In a bid to boost its popularity and endorse the cryptocurrency in the process, Polish soccer club GKS Katowice has announced plans to enable bitcoin payments for tickets and club-related merchandise.

The club’s supporters can now make donations to their favourite side in the digital currency, GKS Katowice said in a statement.

“We are open to new technologies. We want to be innovative and [...] show our fans that we have great ambitions,” said Wojciech Cygan, chief executive of GKS Katowice.

Continue reading at CoinDesk

March 04, 2014 at 11:42AM

Japan Mulls Bitcoin Tax Following Mt. Gox Failure

Japan is taking the Mt. Gox collapse seriously and is already looking into measures to address the digital currency conundrum – one of which is to levy taxes on bitcoin transactions.

According to the Yonimuri Shimbun newspaper, Japan’s ministry of finance and the national tax agency are studying “possible rules” that could govern digital currency transactions.

It appears that Japanese authorities think purchases made with digital currencies could be subject to existing consumption and corporate taxes.

Continue reading at CoinDesk

March 04, 2014 at 11:00AM

BTC China Launches Litecoin Trading Thanks to Lee Brothers

Exchange BTC China is introducing litecoin trading, effective immediately and with 0% commission. It will become the first widely-used exchange after BTC-e to trade the world’s second most popular cryptocurrency.

CEO of BTC China, Bobby Lee, announced the move this morning, saying “users have been clamouring for this for ages”.

Digital currency watchers will also note that BTC China’s CEO, Bobby Lee, is the elder brother of litecoin inventor Charles Lee. BTC China’s banner for the announcement also reads “Brothers Reunited”.

Continue reading at CoinDesk

March 04, 2014 at 10:06AM

3 March 2014

Cue The Bit-Peso – Unbanked And Potentially Bitcoined

Photo of traffic and palm trees on downtown street in Quito, Ecuador.

Cue The Bit-Peso – Unbanked And Potentially Bitcoined post image

Sidewalk cook in La Libertad, Ecuador.

We stand poised on the cusp of something altogether new. A huge percentage of the human race is either “unbanked” or “underbanked”, that is to say that maybe half of humanity either does not have a bank account of any sort and/or makes limited use of banking institutions or uses other non-bank institutions or informal financial services to conduct their financial affairs.

There are a variety of reasons for this. Many hundreds of millions of people live in rural and urban areas of developing or underdeveloped regions where there simply are no banks. They live in societies with poorly developed financial service sectors and there may be no banks in the towns and villages where they live. Or maybe there is a bank, but the bank may require documentation to establish an account that simply does not exist. In many areas of Asia, Africa and Latin America there simply is no door-to-door mail delivery. There is therefore nothing corresponding to a mailing address. Many streets and alleys do not even have names. Beyond that, there may not even be electrical service, no gas service and no municipal water or sewer service.

So when a commercial bank, for example, requires potential customers to bring in a paid utility bill with the resident’s name and address on it, or a pay check stub with their name on it, to establish a new account, for many millions of Africans, Asians and Latin Americans, that is a complete impossibility. Where they live there are no street names, the houses and shacks have no numbers, and there is no mail delivery, and perhaps no electricity or gas or water or sewers, either. Additionally, they may work on an informal, cash basis, in a day labor arrangement. So they simply cannot provide pay check stubs and utility bills. These simple realities of daily life constitute insurmountable barriers to entry into the formal economic system for a very large percentage of humanity.

It is not surprising, therefore, that research conducted by McKinsey & Company and The Financial Access Initiative has shown that fully 2.5 billion members of the adult population of this planet do not use banks or microfinance institutions for either savings or loans. Almost 2.2 billion of these individuals are in Africa, Asia, Latin America and the Middle East. That is half of the world’s adult population.

But this phenomenon of being “unbanked” or “underbanked” is hardly restricted to people in countries on the periphery of the so-called “developed” world. Even in the USA, 28.3%, or more than one in four households, are “unbanked” or “underbanked.” They either do not have bank accounts at all, or only partially use formal banking institutions to meet their financial needs. They avail themselves of other arrangements such as money transfer services, check cashing outlets, supermarket bill paying counters, prepaid debit cards, and the like.

These Unbanked Masses Are Ripe For Bitcoin-Based Financial Services

The abject, unabashed failure of the formal, commercial, central-bank-based financial services sector to serve fully half of humanity represents a tremendous opportunity for Bitcoin visionaries and entrepreneurs. It is not a question of taking market share from the commercial banks. It is a question merely of offering financial services – in some cases for the first time — to a vast, unserved and underserved segment of the global population that the commercial banks have not bothered to concern themselves with.

That represents a massive opening for Bitcoin, a decentralized, digital, global, rapid, crypto-currency that is well suited to operations out of the orbit of the commercial, central-bank-based financial services sector.

All of the pieces of the puzzle are already present on the global playing board to do this. It but remains for the Bitcoin community to assemble them in a slightly different way, and the effect on global finance could shift very powerfully and quickly to the advantage of the half of humanity who have been largely shut out of normal commerce and economic activity.

Bear with me for just one moment. It all has to do with the marriage of the burgeoning network of mobile communication devices (cell phones, tablets, etc.) and the Bitcoin network and technology.

The continent of Africa now has more than 650 million mobile phone subscribers, more than the EU or USA. In Latin America 98% of the population have a cell phone signal, while 84% of all households have a mobile phone. In the Asia-Pacific region there are more than 2.5 billion mobile phone users, 180 million users in Indonesia, 581 mobile phone users in India, and so forth.

In other words, the very regions where there are teeming millions of “unbanked” and “underbanked” adults, are the same regions where mobile phone use is all but universal.

Clearly, for Bitcoin as a decentralized, global, digital, crypto-currency, the vehicle to penetrate this vast market is via the hand-held mobile communication device – the mobile phone, cell phone, tablet, call it what you will. The culture in the underdeveloped and developing countries the world over has already resoundingly embraced cell phone technology. In less than two decades the humble cell phone has completely penetrated global society, from Bolivia to Namibia to Madagascar to Indonesia.

The challenge for Bitcoin developers is to bring basic Bitcoin functionality to the ordinary cell phone. Bitcoin applications need to be developed that are configured to use the USSD protocol and the SIM card. The global Bitcoin network is here and growing. Near universal adoption and use of mobile telephones is also here, east to west, north to south. The task is to marry the two and open up a vest, untapped market. If the USSD protocol and the SIM card stand in the way of making Bitcoin easily available to a couple of billion new users, then the best technical minds in the Bitcoin community need to resolve those issues, in consultation with the major cell phone companies. In the case of Latin America, that would include at least Claro (América Móvil) and Movistar (Telefónica). These are two of the largest cell telephone companies in the world. In Africa, the major cell phone providers are Vodafone, Telefónica, Airtel, Orange, Beeline, MTN Group, Etisalat and Qatar Telecom. In Asia there are many providers, but India’s Bharti Airtel seems the obvious potential initial Bitcoin collaborator, due to its size globally and its massive penetration of the Indian subcontinent, and also African, cellphone markets. Crack the Indian, Latin American and African cell phone markets and the world will lie open before Bitcoin. The key is to integrate cell telephone technology and the Bitcoin network. Once one of the major global cell phone companies, such as Airtel or Telefónica, buys into the Bitcoin concept it will radically alter local and international commerce.

M-Pesa Shows the Way

Beyond that, a unique, mobile-phone-based payment and financial services system in Africa has already shown the way for Bitcoin. The M-Pesa system in use in East Africa lets people use their cell phones to deposit, withdraw, send and receive money. There are no banks in the transaction. The mobile phone companies host the service. The money is stored in an account on the cell phone. It is a peer-to-peer payment service. There are 17 million users in Kenya alone, and 5 million in Tanzania. The service has even recently been introduced into Afghanistan.

This is the model for Bitcoin. The M-Pesa system (pesa means money in Swahili), has obvious implications for Bitcoin’s future. Indeed, I would say that if Bitcoin does not very rapidly go this route that it is destined to wither and die.

Bitcoin visionaries and entrepreneurs must move quickly and decisively, along the lines being sketched out here. Why not develop a Bit-Peso system for Latin America, Spain and the Philippines, for example? Seven Latin American countries and the Philippines currently use the “peso” as their national currency. Eleven other Latin American countries used the peso in the past, as did Spain. Two African countries also used the peso in the past. So the moniker, Bit-Peso, could have reflexive cultural resonance in Latin America, Spain and the Philippines, as M-Pesa does in the Swahili-speaking region of East Africa. For that matter, why not a Bit-Pesa for East Africa, a Bit-Franc for French Africa, a Bit-Dinar for the Middle East?

Bitcoin as we know it now is very “techie” and computer “geeky”. That has to change and fast, or it will not and cannot be used by the great masses of humanity. Applications must be developed that are very secure, always, every time, but that are non-techie, non-geeky, and user friendly for the typical person in the developing world who can operate a cell phone, but knows absolutely nothing of computer programming, algorithms, hashes, the block chain, cold wallets, secondary authentication, etc.

The whole process must be made as streamlined and easy as taking a picture with a cell phone, or texting a message.

Or like using M-Pesa in Kenya and Tanzania. That’s the model. If the Bitcoin community can take the East African experience and modify it for global use, by marrying Bitcoin, mobile phone use and the commerce of everyday life at the face-to-face level, then it will have mass acceptance and sweep like a wave through Latin America, Africa and Asia.

Self-disclaimer: I live in South America, on a street and in a neighborhood where there is no daily, door-to-door mail delivery. I also have rarely used banks for more than ten years, among other reasons because I have little money; consequently I do not have any money in any bank, do not have a credit card and probably could not get a bank account or credit card either, for some of the same reasons I have set out above. I do not have a job in the formal economic sector, so I cannot supply a pay check stub. I also do not pay a water or electricity or gas bill, as I live in a small rented room. So I cannot provide a utility bill in my name either.

However, I do have a cheap, prepaid cell phone. And I do at this moment have a small fraction of one Bitcoin.

So I myself am very much a part of the unbanked and underbanked half of humanity that has a cell phone, and could potentially benefit from the very Bit-Peso scenario that I have developed in this article.

The post Cue The Bit-Peso – Unbanked And Potentially Bitcoined appeared first on Bitcoin Magazine.

March 03, 2014 at 06:32PM

London Hostel Chain Clink Now Accepts Cryptocurrencies

Bitcoiners visiting London no longer have to stray into the fiat world to pay for their accommodation. A chain of hostels in the UK capital is now accepting payments in both bitcoin and litecoin.

Clink Hostels, which owns two hostels in central London, including one in a former courthouse, began accepting the currency last month.

Dave Double, sales manager for Clink, encouraged the move towards bitcoin payments and is heavily involved in digital currencies, mining litecoin, qubitcoins, vertcoin and dogecoin – the latter of which he admits has problems in a business environment:

Continue reading at CoinDesk

March 03, 2014 at 01:35PM

2 March 2014

Will Florida’s Money Laundering Laws Apply to Bitcoin?

Lawyers for the two men recently arrested in Miami for engaging in “too-large” bitcoin transactions are claiming that the men’s actions were legal because state law covers only money issued by the US or another country.

Many in the bitcoin community are hopeful that this argument is persuasive, seeing money laundering laws as an attempt to regulate thoughtcrime in finance. Others also argue that citizens do not currently owe the state of Florida any kind of explanation for why they want to buy or sell bitcoin.

Sting operation

In what may be the first instance of citizens being charged under state law for buying or selling bitcoin, Pascal Reid, 29, and Michell Abner Espinoza, 30, were charged on 6th February with money laundering and engaging in an unlicensed money-servicing business.

Continue reading at CoinDesk

March 02, 2014 at 03:56PM

Coin Miners Dogged By Mining Pool Security Flaws

Distributed denial-of-service attacks have posed an increasingly severe problem for cryptocurrency exchanges and mining pools in recent weeks.

Last month, several major pools in the mining community suffered debilitating DDoS attacks that resulted in significant delays, lost mining time and frustration for miners.

In extreme cases, as explained by TeamDoge administrator Forrest Suqua, some pools received ransom messages from hackers demanding payoffs in exchange for pulling back their attacks.

Continue reading at CoinDesk

March 02, 2014 at 02:20PM