26 April 2014

How We Mined More Than 100,000 Dogecoins in One Week

As bitcoin mining increasingly becomes more of a professional pursuit, hobbyists and newcomers have turned their attention to scrypt mining.

So, at CoinDesk, we wondered, ‘why not try scrypt mining ourselves?’

Watch the video to see how well we fared:

We got our hands on a Gridseed G-Blade miner, one of the first scrypt miners in the market to use ASIC chips. ASIC chips have been used to mine bitcoin for over a year, now they are making their way into scrypt mining.

That’s making scrypt even more attractive to newbies.

MinerEU is the European distributor for the China-based manufacturer Gridseed. CEO and co-founder Jing Wei explains why it is easier to get into ASIC scrypt mining:

“The clear advantage of scrypt ASIC mining is lower power consumption. It’s scalable: you can even set up a mining farm at home. It’s also very easy to set it up. We have streamlined the process. [...] In a few minutes you can connect all the parts together.”

It is easier and faster to make money from altcoins rather than investing in expensive and industrial bitcoin mining equipment. Mining equipment manufacturers have already announced refined scrypt-mining equipment.

While Gridseed G-Blade is one of the first to be launched on the market, KnCMiner has already announced their plans to launch their scrypt miner Titan.

Each Gridseed G-Blade miner has two boards with 40 GC335 ASIC chips on each one. This $1,600 miner promises a total hashrate of 5.2M.

We brought two of the two-blade miners into the office. Including installing the relevant software, it took us about an hour to set them up. But, now that we’ve done it once, next time would definitely be quicker.

Gridseed G-blade

Depending on what you decide to mine, the return on investment of these miners is three to six months. We decided to mine dogecoin and managed 100,000 doge with two miners in a week.

That’s not a bad start to our scrypt mining career, but it’s certainly possible to improve on the ROI by using the multipool.

Wei says:

“In theory the smart switching technology should give you a higher return that mining one type of alternative coin, but the problem with that is the switching process. If we switch it over from one coin to another, the calculation power will be lost during the transition.”

While we’ve parted with the miners, we’re still working out what to do with our $58 worth of dogecoin – suggestions welcome in the comments below.

scrypt ASICScrypt mining

April 26, 2014 at 11:00AM

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25 April 2014

Crossing Borders for Bitcoin

People usually immigrate to a new country for a variety of sociopolitical reasons, most of which can be summed in the big, capital letter kind of ideas: Freedom. Opportunity. Wealth. Prosperity.

To that list I would like Bitcoin and Litecoin. Yes, people are crossing borders for these cryptocurrencies, but it’s not for the reasons you might expect (no one is skipping town after running an exchange scam).

Let me explain. As the head of operations at mining manufacturer LSM Labs, I am used to seeing orders for our Bitcoin and Litecoin miners come from all over the world. In fact – just to give you an idea of our global scale – our website can be translated directly into Mandarin for our Chinese customers, who number in the hundreds.

Of this fact we are of course proud. We take it as a sign of our company’s success, and in the larger picture, of that of cryptocurrency. What we did not expect was that our miners, in many cases, would actually propel people across the world. We learned of this through one of our earliest customers. Though he consented to inclusion in this article, I will protect his privacy by referring to him as Bob Nakamoto.

Places to Go, Bitcoin to Mine

Now Bob Nakamoto was one of the first buyers for our now out-of-stock Bitcoin miner, Cyclops. We delivered it to him, as he requested, at his place of residence in Santa Barbara, California. We did not hear from him again until two weeks ago, almost six months later, when he inquired about our new Litecoin miner, Apollo.

Bob Nakamoto was happy with its specs (180MH/s) and its price ($5,999), but was wondering if we could deliver it to his current location (Cebu City, Philippines). When we responded in the affirmative, he replied with a general update on why he had moved (perhaps he could sense our curiosity through the screen).

His story, which you got the sense he told often, was thus: After receiving our miner Cyclops, he was happy with his returns – its hash rate after all was 600 GH/s, which was high for the time – but wanted to save on the cost of electricity, especially given that he wanted to mine full-time. He therefore started to research where electricity was cheapest in the world. Bob Nakamoto quickly found a list of such cities, but could not see himself living at any one of them.

So he switched gears. Instead of looking for a place where electricity was cheap, he began to look for a place where it was cheap to live, period. He reasoned, astutely enough, that even if a place had averages rates for electricity, it could be made up elsewhere. He found this place in the Philippines, which had moderately priced electricity, but had a dirt cheap cost of living (rent, transportation, food, and so on).

Naturally, Bob Nakamoto packed his bags, Cyclops included, and soon hopped onto a flight bound for Philippines. There, he found his estimates to be true. It was more lucrative to be a full-time miner in the country, a fact evident in a simple comparison of his housing costs ($1,200 versus $225).

Signs of a Trend

Bob Nakamoto’s story, it turns out, is not unique. After sending out a call to our customer list to see who else might have moved for mining-related reasons, we had more than several volunteer a response. Some indeed had migrated to countries where electricity was notoriously cheap, while a few others had moved for slightly more personal reasons. For example, one environmentally conscious miner moved to a Scandinavian country because of the greater availability of renewable energy there.

These stories are interesting on a human-interest level. After all, who would have ever thought that people would uproot their lives to better support a Bitcoin or Litecoin miner? But these stories also carry with them a symbolic value worth examining further. They show that cryptocurrency does not just represent a kind of economic mobility – in these cases, they are economic mobility.

April 26, 2014 at 01:31AM

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M.K. Lords interviews Michael Malice on his new book Dear Reader: The Unauthorized Autobiography of Kim Jong Il


This interview first appeared at Bitcoin Not Bombs.

Michael Malice’s book Dear Reader: The Unauthorized Autobiography of Kim Jong Il is a darkly humorous peek into the mind of one of the most brutal dictators in recent history. Weaving North Korean propaganda into a new literary genre–the unauthorized autobiography–Malice has created a work that forces you to laugh when you shouldn’t and climaxes numerous times with fantastical stories of Jong Il’s heroism alongside his murderous sociopathy. The phrase “laughing to keep from crying” rings ominously true while reading it.

Malice, also a celebrity ghostwriter of seven books, sat down with me to discuss his research, propaganda, black markets, and Bitcoin. You can purchase Dear Reader at kimjongilbook.com. He even takes bitcoin!

It was a fascinating discussion and he even alludes to a surprise for fans of bitcoin and Bitcoin Not Bombs. Check it out in the video below.

April 26, 2014 at 01:16AM

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Bitcoin Foundation Election Deadline Extended Due to Voting ‘Hiccups’


The Bitcoin Foundation has extended the deadline for voting in its ongoing special election to fill the two industry seats left vacant by Mt. Gox CEO Mark Karpeles and former BitInstant CEO Charlie Shrem.

Though voting was originally slated to end at midnight EST on 28th April, the deadline has been extended to Wednesday, 30th April.

Brian Goss, chairman of the Bitcoin Foundation’s election committee, sent the message via email to eligible voters, notifying them of the change.

Wrote Goss:

“On account [of] the hiccups we had getting the vote launched as well as the numerous reports of ballots getting stuck in spam folders, we will be extending the voting deadline to 11:59 PM US Eastern time on Wednesday, April 30th.”

The issues were previously reported and resolved on 22nd April, however, Goss has stated that the change was made to ensure that no votes were lost in the process.

Candidates for the open seats include Gyft CEO Vinny Lingham, BTCChina CEO Bobby Lee and BitcoinBlackFriday organizer Jon Holmquist.

For more details on the candidates and their respective platforms, visit the Bitcoin Foundation’s official election forum.

CoinDesk will continue to monitor this developing story.

Ballot box image via Shutterstock

Bitcoin Foundationelection

April 25, 2014 at 11:05PM

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A Message to the Class of 2018: Consider Cryptocurrency

By April 15, which was a few short days ago, most high school seniors had already submitted their statement of intent to register (SIR) to the college of their choice. Since then, they have turned their eyes toward the fall semester and what they will elect to study there.

This decision, of course, is not easy. A person’s major has an influence far beyond the four years of college. Your major gives you a particular body of knowledge, expertise, and skills that you will carry with you for the rest of your life, and perhaps more importantly, determines how employers view that package.

Thus, students want to select a major that is viewed favorably by employers, so that they may lead into a long, prosperous, and financially rewarding career. If this is what students are after, I would urge this incoming class of 2018 to closely consider the field of cryptocurrency.

Timing is Everything

This industry is still in its infancy, and that’s a good thing for incoming college freshmen. Many people have widely proclaimed 2014 as the year that the very best engineers, executives, designers, and developers will turn their attention to cryptocurrency, and by the way the year has gone so far, I would agree with them.

Exciting things are happening in this space every day, all of which points to an even brighter future ahead. Cryptocurrency is poised to stand alongside other new areas in tech – artificial intelligence, adaptive learning, commercial aeronautics, wearable tech, 3-d printing – as the next big thing.

So by the time these incoming freshmen graduate in 2018, the industry will have surely grown to a level that would thrill any enthusiast. There will be many companies out there hiring fresh graduates who had the foresight to get education or experience in cryptocurrency (or the humility to heed the advice in this article =] ).

Imperative is Everything Else

How does one exactly specialize in cryptocurrency at the college level? After all, no university that I know of offers a pure major in the field. An interested student would be well served to major in any discipline that naturally intersects with cryptocurrency. These would include computer science, engineering, mathematics, business, or economics.

Yet cryptocurrency is such a complex field that a student need not feel pressured to major in any one of those. A student could even major in something totally unrelated to cryptocurrency – for the sake of tradition, let’s say underwater basket weaving – and get the necessary education and experience through other parts of the college journey.

In fact, this approach may even be better because rather than passively accepting a body of knowledge wholesale through a major, a student will be forced to actively think about what will best prepare them to go from point A (college) to point B (gainful employment in the cryptocurrency field).

These students will have many opportunities to gain what they need to distinguish themselves in the marketplace. A student could take electives or even graduate-level courses of special interest to cryptocurrency. A student could propose a one-on-one tutorial with a professor with relevant expertise. A student could attend local and national conferences on cryptocurrency. In other words, a student with the right drive will only really be limited by his imagination.

One particularly fruitful avenue for such students to explore would be internships. For our part, my firm, LSM Labs would welcome interns in the future with open arms provided there is a mutual fit. As eager as students are to learn about the cryptocurrency industry, so are we eager to pass on what expertise we can about the field as a whole and our specialty in particular (we manufacture Bitcoin and Litecoin mining products).

Some students might fear that a piecemeal approach to gaining experience would not serve their cause as well as having say “Computer Science” or “Engineering” near the top of their resume. To them, I would assure otherwise. I routinely recruit and vet candidates through the hiring process, and we are much more concerned with how aggressively you pursued cryptocurrency experience in the context of what was available to you. For as big as cryptocurrency is bound to be, to take it there we will need people who think even bigger.

April 25, 2014 at 04:06PM

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24 April 2014

Google Pulls Six Mobile Wallpaper Apps Due to Bitcoin Mining Malware

Malware Security

Lookout, a mobile security startup based in San Francisco, has identified a new type of bitcoin mining malware that targets mobile devices. Dubbed “BadLepricon,” the malware represents a more sophisticated type of mining malware attack than previously seen.

The malware was designed to be delivered via a wallpaper app. Lookout identified six separate apps that contained BadLepricon, and Google removed the apps soon after being contacted by the mobile security firm.

The company announced the discovery in a 24th April blog post, citing the specifics of the malware.

CoinDesk spoke with Michael Bentley, head of Lookout’s research and response team. He said that the malware presents a new level of sophistication not normally seen in this type of cyberattack, remarking that the malware writer knew what he or she was doing.

Said Bentley:

“When [malware authors] are looking into protecting the phone, making sure certain conditions exist, and making sure you’re participating in a pool, it tells us that they are a more experienced developer.”

Malware focused on botnet development

The writer of BadLepricon used a stratum mining proxy that lets the botnet operator control where bitcoins are being sent and which nodes are being mined.

Additionally, BadLepricon is designed to maximize mining output from a single device. The mining program only runs when the display is off and when the battery life is greater than 50%. This also acts to protect the phone from heat damage, which masks one of the major symptoms of a mobile-based mining malware attack. It appears that some users may have been affected.

According to Lookout, the apps had an average of 100-150 downloads before the malware was discovered.

Bentley remarked that, ultimately, these types of attacks don’t produce enough hashing power to actually solve a block or produce bitcoins. However, he expects program authors to develop more botnet-style mining malware in the future.

He said:

“As cell phone power increases, and as devices are [more] available, it’s a logical next step.”

Mining malware targets computers great and small

While the majority of bitcoin malware programs are focused on hacking wallets, mining malware attacks to present a threat to computer systems that can be exploited for hashing power. This was shown in a recent study published by Kapersky Labs.

Iowa State University announced this week that it had discovered a server breach that compromised student data. The school stated that the malware was designed to mine bitcoins, although it is unclear if the effort was successful.

BadLepricon is also not the first type of malware to disguise itself on the Google Play store. Earlier this year, two malicious apps were discovered that turned affected mobile devices into dogecoin and litecoin miners.

Password security for safety in data center room image via Shutterstock.

crimemining botnetmining malware

April 24, 2014 at 11:56PM

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23 April 2014

Blockchain’s Nic Cary on Bitcoin Wallets, Mt. Gox and Decentralization

Nicolas Cary is the CEO of Blockchain, a bitcoin company best known for providing the most popular consumer bitcoin wallet and block explorer.

Blockchain.info, the company’s informational website, garners 350 million page views a month, while its wallet service passed 1 million downloads in January 2014. Blockchain also acquired multi-exchange bitcoin trading platform ZeroBlock earlier this year.

Cary was a keynote speaker on day one of Inside Bitcoins NYC last month, where he discussed the potential global impact of the technology. There, CoinDesk spoke to Cary about recent developments at Blockchain, how it aims to hold off competition in the market and what it learned from its high-profile service outage in March.

nic cary, blockchain

CoinDesk: Blockchain has accomplished a lot in a short time, operating successfully in three different business sectors. How are you aiming to take your company forward in 2014?

Nic Cary: We’re going to launch Blockchain.com as the main consumer-facing wallet site. Our intention for doing that is to spend a lot more time on the user experience and making bitcoin more familiar to regular users.

Blockchain.info sort of set one design standard for what a bitcoin wallet could look like, and its been copied a lot, and we have to keep making bitcoin easier. The fact is we have 1.5 million users today, but we need to be ready to take on 10 million users, 100 million users. Everything has to get easier, from the signup process to acquiring bitcoins to figuring out where to spend them to inviting friends to the education of bitcoin itself.

Too many times the conversation of how to set up a wallet starts at a table like this where you sit down across from someone and say that ‘I need 30 minutes of your time to learn why this is the most important thing you’re going to hear about for the next few months.’ That conversation has to get easier.

Blockchain is an established player in an ecosystem that’s very much still growing. Are you worried about competition, especially in foreign markets with this approach?

Nic Cary: We’re watching the competitive developments in the landscape carefully, but we’re not obsessing about them. This is very early, there’s a lot of upside for everyone. I don’t think we’ll bat 1.000 across everything, but when you think about how these other companies are building their products, you need to think about the innovation. Are they actually innovative or did they just build a new bank?

Whether you’re talking about Mt. Gox or any of the other businesses that had security issues, what you’re talking about is a company that held custody and control over user funds and had access to information about their customers.

There are two approaches, you can centralise everything and build a new PayPal for bitcoin, or you can embrace the peer-to-peer network and create technologies that basically cut out the trust in the products and the services at all and allow people to directly interface in the bitcoin network, that’s our marketing and that’s our position.

We do not have custodial accounts. That’s the biggest difference between us and all the other big players, including Circle, Coinbase, Bitstamp, all the exchanges, they all have centralised control over bitcoins.

But this isn’t a zero-sum game, there isn’t one solution that’s going to win out.

Do you think there’s a disadvantage in taking a one-size-fits-all approach to not taking into account localization when building your product?

Nic Cary: For managing our brand, it’s going to be challenging to have really localized solutions. I anticipate and expect the wallet market will fragment quite a bit in 2014. I think you’ll see companies build solutions for specific countries and specific use cases.

I could see a wallet service that lives on cell phones and has parental controls, and if a kid leaves a certain region it deducts $5 from the wallet, or it notifies the parent that they spent the funds. I don’t have an interest in building these solutions, what we’re interested in is providing the piping in the background for it.

Many of the major exchanges and wallets are still using our APIs to broadcast to the bitcoin network and we provide all these services for free.

We hope that lots of people build sweet wallet solutions for whatever country they’re in, I’d like it if they used Blockchain’s APIs but all of our stuff is basically open-source anyway so they could copy it if they want to.

You recently went through a high-profile outage. What did Blockchain learn from this, and what did you learn as its CEO?

Any time you have growing pains, you’re going to need to make new investments in your infrastructure. Because we take extreme care for the security of our services, we don’t trust other parties to build things, but that means you have to develop in-house expertise on really complicated server infrastructures.

No one can predict how fast bitcoin adoption is going to happen. This has huge costs for companies like mine, especially because we’re a free service. We didn’t know how fast things would happen in November, we were behind in adding infrastructure, we made a bunch of investments and we’re still making investments in anticipating a greater adoption of bitcoin in the future.

For us, the lesson is that when you’re having a problem you have to communicate with people, it’s completely unforgivable to not be transparent about the issues that are happening.

We have to get better, and it was intolerably to me to have that happen. We’re going to keep learning from it.

Do you see your company as a leader in space?

I think for us, we take the trust of our users so incredibly seriously. You just can’t screw that up. I hope that we can be known as being trustworthy and to build a brand around Blockchain that is enduring. I don’t want to be thought of as the PayPal for bitcoin, or Google.

I just want to be Blockchain, that’s us. It means that we take care of our users, that we’re transparent, that we build open-source software, that you can trust the math and the code and that we’ll put it all out there for everybody to see.

Do you see yourself as a leader in the space?

My focus is on building products and services and finding teammates that deserve each other to make Blockchain a happy place. I see myself as the CEO of Blockchain first before any other type of figurehead in any way shape or form.

This conversation has been edited for length and clarity.

Image via LinkedIn

BlockchainInside BitcoinsNic Cary

April 23, 2014 at 09:10PM

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Iowa State University Hit by Bitcoin Mining Malware


The Iowa State University has suffered a massive security breach which compromised the security of student data and involved some illicit bitcoin mining.

The university says the compromised servers contained social security numbers of 29,780 students enrolled between 1995 and 2012.

However, there is no indication that any of the files were accessed. No financial information was stored in the student records and further investigation led the university to conclude that personal information was not the target.

“The servers were hacked by an unknown person or persons seeking to generate enough computing power to create a type of digital money known as bitcoins,” the university said in a statement.

No threat to students

Although university officials do not believe personal information was the intended target, they are urging students and former students to monitor their financial reports, just in case. The university has reached out to students whose personal information was compromised by the breach. Law enforcement was notified of the breach as soon as it was discovered.

The university is also advising caution, as some of the data could be used to stage further attacks, including phishing scams. The compromised servers have been taken off line and destroyed, while other servers of the same type have been taken off the internet as a precaution.

Bitcoin mining botnets remain a concern

Although bitcoin miners dumped x86 platforms with powerful GPUs in favour of bitcoin mining ASICs, hackers are still trying to turn networks into mining zombies. The effort does not generate as much money as it used to, as Bitcoin’s difficulty has gone up dramatically over the past year.

As a result, bitcoin mining botnets are about to become a footnote in cryptocurrency mining. Security firms warn that mining botnets and other bitcoin-related security threats are on the rise, but botnets make a lot more sense if they are used for certain types of ASIC-proof altcoins with a limited market.

However, since hackers who operate bitcoin botnets don’t have to pay the electric bill or the hardware involved in the process, they are still going after regular PCs and servers. The Iowa State University has not disclosed any details on the actual amount of bitcoins mined by the attackers. Since it appears that only a handful of servers were affected, it is highly unlikely that the attackers generated a lot of bitcoins.

This was not always the case. Last year German police arrested a couple of botnet miners suspected of mining €700,000 worth of bitcoins.

Image credit: Iowa State University

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April 23, 2014 at 11:29AM

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22 April 2014

Dorian Nakamoto Thanks Bitcoin Donors on YouTube

Nakamoto Antonopoulos

Dorian Nakamoto, the California man who is Satoshi Nakamoto but not the one the media is looking for, has appeared in a YouTube video thanking the bitcoin community for its support.

Bitcoin identity Andreas Antonopoulos organized the fundraiser as partial compensation for Nakamoto’s recent troubles, after a Newsweek cover story ‘revealed’ him to be bitcoin’s mysterious originator. The appeal has raised over 47 BTC, and Nakamoto says he plans to keep his “bitcoin account” open and become a user.

In the three-minute video, Nakamoto appears alongside Antonopoulos and holds up a copy of Newsweek’s now-infamous “Bitcoin’s Face” edition, repeating his denial that he was involved with bitcoin or its creation in any way.

“I’m sure you guys will know that Satoshi Nakamoto is not me. But Leah (Goodman) thinks so, and Newsweek said so. But it’s not true,” he says.

“I’m very thankful for all these people in the US, Europe, Asia, in South America and Africa who supported me throughout. Thank you very much. I want to hug you, this 2000 of you who donated.”

He also mocks the notion that anyone wanting to anonymously unleash the world’s most disruptive cryptocurrency to date would use their real name in online communications.

64 year-old Nakamoto, who has suffered both unemployment and health problems in recent years, was hounded by the media after Newsweek’s cover story appeared, causing him further hardship.

Today’s video is Nakamoto’s first public statement since he hired a lawyer and made an official denial of Newsweek’s claims in late March.

Newsweek and journalist Leah Goodman say they stand by those claims that Nakamoto created bitcoin, and the research behind them. The magazine used the story to re-launch its print edition after its acquisition by new owner IBT Media, but was accused by many in the bitcoin community of rushing to release the story based on flimsy circumstantial evidence.

Andreas AntonopoulosDorian Satoshi Nakamotonewsweek

April 23, 2014 at 12:54AM

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So Very Wow! Dogecoin Sponsors a NASCAR Racer

Dogecoin has become a very popular cryptocurrency since it was introduced in December 2013. Since then, this currency based on the popular internet meme has been widely used as a “tipping” system for dogecoin Reddit users, while also acting as a successful medium for crowdfunding campaigns. The internet meme features funny, nonsensical and misspelled captions overlayed atop images of a Shiba Inu dog. For those unfamiliar, these captions include, “so very wow,” “such coin,” “very moon,” some of which are hard to understand for those outside the growing community.

Developed and created by Billy Markus, with an aim to create a “fun” cryptocurrency that could reach a broader demographic than Bitcoin, Dogecoin has achieved sizeable growth in the short six months since its introduction. Although it is not likely for the value to surpass Bitcoin, the trading volume of the cryptocurrency surpassed that of Bitcoin and all other cryptocurrencies combined in January 2014. Since that time, the community has been actively working to crowdfund athletes, including the Jamaican bobsled team, Sochi athlete Shiva Keshavan, and more recently, a NASCAR driver.

Less than a month ago, passionate fans of Dogecoin made history yet again. Shortly after the community supporting the meme-based cryptocurrency sponsored the Jamaican bobsled team in Sochi, Shiba Inus everywhere are yelping with spastic joy at the opportunity to sponsor another sport. This time around Dogecoin has raised over $55,000 to sponsor NASCAR driver Josh Wise.

At the time, Josh Wise was without a sponsor for the upcoming Aaron’s 499 at Talladega Superspeedway in May. What the Dogecoin community did was nothing short of incredible. They banded together, took to Reddit and further showed us the power of cryptocurrency. To sponsor the NASCAR racer, members of Reddit donated 67.8 million Dogecoin just days after the crowdfunding campaign began, making this the first cryptocurrency themed racecar to be driven in a NASCAR event.

Moments after the announcement, Wise tweeted, “Just a week ago this was only an idea and now it’s a reality. So thankful for all the fans, Reddit community and Dogecoin for doing this.” Wise also participated in an AMA on Reddit and when asked how he felt about the knowing he was sponsored by a $55,000 crowdsourcing effort, he concisely stated, “Mind blown! Thankful.” Furthermore, when asked what the NASCAR community thought of the sponsorship, Wise summed it up in three words: “Confused, surprised, curious.”

The final design of the car was decided via the “paintjob contest” that took place on subreddit. The winning user designed three separate livery options: gold, silver and black. Soon after, the black scheme was chosen through a user poll held on Doge 4 Nascar, which received 58 percent of user votes.

The upcoming race on May 4th will further prove what cryptocurrencies like Dogecoin make possible. For Shiba Inus around the world, the focus on crowdsourcing, sponsorship and charity will continue to excite the community and drive its popularity. If you want to see history in the making, tune in to the race, which will definitely be “so very wow,” “so NASCAR” and consist of “much speed.”

April 22, 2014 at 07:44PM

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Inventor Creates Commercial Bitcoin Fuel Pump

gas pump

Despite the advancement of bitcoin at a number of major online retailers and in small businesses worldwide, certain major sectors still have yet to see any serious digital currency adoption.

For example, earlier this year, one gas station in Greeley, Colorado, became what was widely considered to be the first to begin accepting bitcoin, and three months later few, it seems, have followed suit.

This sluggish adoption could change, however, thanks to the efforts of bitcoin enthusiast and thermodynamics researcher Andy Schroder, who on 1st April revealed a prototype for a diesel fuel dispenser that accepts bitcoins.

Named the Bitcoin Fluid Dispenser II, the prototype was constructed from scratch by Schroder. The result is a fully functional gas pump that he says handles bitcoin’s specific requirements while following the necessary guidelines for dispensing fuel commercially.

How it works

To begin, Schroder explains that users simply remove the fuel nozzle, and a unique bitcoin address will appear on the device displaying the current price of bitcoin per litre of gasoline.

From there, users scan the QR code, send their desired payment to the pump and collect their receipt.

The machine currently accepts only bitcoin, though Schroder told the Gliph company blog that additional forms of payment may need to be added for his invention to have market appeal.

The release follows Schroder’s first attempt at a bitcoin-enabled fluid dispenser, after his original design in August 2013.

Ready for market

While certain improvements may still need to be made for the machine to become widely used, Schroder has indicated via his website that his current model is ready for pilot installation.

He notes that the ideal home for the unit would be at an independent, privately owned fuel station in the greater Cincinnati area that sells diesel fuel or kerosene.

Future features planned for the pumps include Bluetooth and NFC support, Bitcoin Payment Protocol integration and compatibility with more volatile fuels such as automobile and aviation gasoline.

For more details on the technical specifications of the product or to contact Schroder regarding the machine, visit Schroder’s website here.


April 22, 2014 at 08:40PM

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21 April 2014

Sir Richard Branson Wants a Transparent Cryptocurrency, But Will Customers?

Billionaire entrepreneur Sir Richard Branson, whose Virgin Galactic airlines was the first to accept bitcoins for space flight, recently described bitcoin as “the pioneer of a global currency” in an interview in the April issue of Delta’s SKY Magazine. Branson clearly believes in bitcoin. Not only is he accepting it, but he’s invested in it as well. But his comments indicate that he does not believe bitcoin will be the ultimate winner in the cryptocurrency wars.

“It may not be the perfect global currency of the future yet, but it’s the pioneer of a global currency,” Branson said.

He joins other tech giants in his assessment. “The Foundation is involved in digital money but unlike Bitcoin it would not be anonymous digital money,” Bill Gates said in February. “In Kenya M-PESA is being used for almost half of all transactions.”

Gates, Branson, and Jack Dorsey, co-founder of Twitter and CEO of Square all believe any successful online payments system will need more transparency than bitcoin currently offers.

So what “transparency” does M-PESA offer that bitcoin doesn’t?

Well, first, all customers must provide M-PESA an original identification document in order to open an account. Retailers who accept M-PESA are trained and required to check customers’ ID cards every time they make a purchase and each purchase requires a three-factor authentication involving ID, the SIM card, and a PIN.

Like bitcoin, every single transaction in M-PESA is recorded and can be monitored by Safaricom, along with the location of the device used in the transaction. Safaricom runs what it calls bank-grade anti-money laundering checks, and sends regular reports to the Central Bank of Kenya.

Between the value of customer data and how much easier it makes anti-money laundering reporting, it’s clear why Gates, Branson, and Dorsey might be interested in such transparency. However, there is a tension between transparency and security. One of the reasons bitcoin transactions are by-default more secure than credit card purchases is that its transactions involve transmissions of personal data.

In addition, while bitcoin transactions are by-default only semi-anonymous, some bitcoin users appreciate the privacy of the fully anonymous transactions bitcoin makes possible.

Like Friendster and Myspace, bitcoin is probably not the be-all and end-all of decentralized, peer-to-peer online currencies. But it’s impossible to know what exactly the Facebook of cryptocurrency will look like. Only time will tell if transparency is something customers will value as much as entrepreneurs.

April 21, 2014 at 09:48PM

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Her World on a String, Spotlight on a Bitcoin Business

If you seek artisan made goods, Central Texas is the place to be. Some attribute it to the magical waters flowing from springs into the river, some attribute it to the weather, others to the people. No matter the reason, one cannot deny that Central Texas is home to a thriving entrepreneurial/artisan movement – a movement that now accepts bitcoin!

One such artisan is Bitcoin enthusiast and singer/songwriter, Sarah Stollak, owner of World on a String Jewelry. I met Sarah at one of my husband’s activist related court dates. She was sitting beside me crocheting jewelry with writing pens because her crochet needles were confiscated at the security checkpoint at the courthouse.

This radical woman is not afraid to be herself or stand up for what she believes. As an activist with the Peaceful Streets Project, a grassroots police accountability group in Central Texas, Sarah has participated in reigning in police brutality in Austin, Texas, a problem so prevalent in the area that several officers have become notorious through internet memes portraying their aggression against the Austin populace.

The outward expression of her passion for everything beautiful has resulted in years of creative outpouring through music and art. When Sarah takes the stage, you can not help but be brought to your feet. Her fiddle dances along with her, creating an irresistible urge to get up and join in the fun. Sarah has become a farmer’s market icon, playing at venues peppered throughout Central Texas and across the country. These days she includes a Bitcoin QR code for accepting crypto-tips while on stage.

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I caught up with Sarah to talk about the genesis of her business and why she started accepting Bitcoin. I asked her to tell the story of her business from idea to fruition; here is what she had to say:

“My mom taught me how to knit in 1993 and I’ve been creating ever since. When I moved to Austin in 2004, I started an artisan booth at local markets, street fairs, and special events. Vending was supposed to be temporary while I found a real job, but almost a decade later here I am, still a full time creative entrepreneur.”

It was actually our family who introduced Bitcoin into the World on a String economy. We commissioned thirteen necklaces and bracelets from Sarah for our wedding party in late 2013. When bitcoin hit $125 I was thrilled to pay her, thinking it was hitting a huge high and allowing our family to get a great bang for our bit. Lo and behold, just weeks after making payment, Sarah watched her Bitcoin hit an all time high of over $1,000 per bitcoin.

Blush Wedding

Here is our wedding party. I still wear my wedding jewelry today and receive compliments everywhere I go. Each piece is hand crocheted with love and delicacy, providing a truly unique and hand crafted look.

Sarah used the profit from that first bitcoin transaction to reinvest in the Bitcoin ecosystem, “I reinvested in my local community by taking out a radio ad on The Liberty Beat on 90.1 FM, and by hiring some of my favorite local musicians for a Bitcoin Shopping and Social Event.”

Real world businesses mean real world problems. Using and accepting bitcoin has not been a flawless transition for Sarah.

“There are still obstacles transacting in Bitcoin, but that’s part of what makes it fun, to be in the midst of something changing and growing so quickly.” One example of a bitcoin roadblock was sending payment to the Unconventional Oven, she was their first bitcoin user, but she “used the wrong email address to pay and after a month the funds were sent back.”

Sarah said it was the people at the Austin Bitcoin Meetup who helped her to understand and successfully figure out how to use a QR code instead of using email addresses. “In addition to technology, patience and a friendly community are always important,” said Sarah. Despite the obstacles, Sarah would still recommend accepting bitcoin to her fellow artisans if for no other reason than to “make it easy for people to give you money”.

You can support this Bitcoin Artisan by visiting http://ift.tt/1tucMWa.

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Read the full transcript of my interview with Sarah here: http://ift.tt/1lwaEHY

April 20, 2014 at 07:17PM

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20 April 2014

Small Businesses Enjoy Success After Accepting Bitcoin

purchase mobile payment

As bitcoin continues to grow in popularity, small businesses around the world have begun accepting the digital currency as a method of payment.

Many of these businesses have seen only a very small portion of their customers pay with bitcoin, but that doesn’t necessarily make the venture into cryptocurrencies a failure.

Dr J Anthony Allen, CEO of the Minneapolis-based music production school Slam Academy, said bitcoin payments at his business have been “very successful,” yet Slam Academy has seen just one customer pay with the digital currency since Allen began accepting it in November of 2013.

With only one total sale it may be hard to see why Allen considers his foray into bitcoin a success, but the answer doesn’t actually lie in the money. Allen said:

“So only one sale, but the more important thing is the press we’ve received from [accepting bitcoin]. I hate to say that we started accepting it just to get press, but it’s turned out to be a great side effect of accepting bitcoin.”

Allen first began accepting the digital currency when he made a post on reddit in hopes of finding new ways to promote his business. A user suggested he accept bitcoin and another joked that he should accept McDonalds gift cards as well.

“It really got me thinking,” Allen said. “I thought, ‘They are both right, actually. I would totally accept McDonalds gift cards if I could pay my rent with them. I would accept just about anything if I can pay my rent with it. Who am I to turn a customer away no matter what they want to pay with?’ So I looked into bitcoin, and when I realized it wouldn’t be very hard at all to actually pay my rent with it, we implemented it into the site.”

Other business owners have had experiences similar to Allen’s. Robert Hohne, owner of New Orleans general store Homestead, mentioned that accepting bitcoin has brought in customers who otherwise might not have shopped at his store.

“We’ve been fortunate to have met some great customers who only found us because we accept bitcoin, and have also sparked the interest of customers who come in and ask us what this bitcoin phenomenon is all about,” Hohne said.

Other than simply being a tool to bring in publicity, bitcoin provides other advantages for both businesses and their customers.

Nick Pappas is the owner of Flamestone American Grill in Oldsmar, Fla. Pappas began following bitcoin when it was valued at about $30, and as he watched the value rise over time he began to see how it could be incorporated into his restaurant. Pappas said:

“After doing some more research, I realized bitcoin was another option I could give my customers to be able to purchase gift cards from our website using it.”

“From a business standpoint, it cuts out the middle man and eliminates any transaction or credit card fees. Also, by accepting bitcoin we are the ones accepting the volatility and the risk, not my customers. That was important to me.”

Like Allen, both Pappas and Hohne have only had a handful of customers pay with bitcoin, but each mentioned that they think Bitcoin payments will become more popular and widespread in the future as the general public becomes more educated about cryptocurrencies and their benefits.

“I think once people understand bitcoin better they will embrace it more,” Pappas said. “Let’s face it, this is something that has never been done before and it is difficult to comprehend how it works. Once people do start understanding, I think the popularity of it will boom.”

Mobile payment image via Shutterstock


April 20, 2014 at 12:25PM

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