25 September 2014

US Commodities Regulator to Hold Public Bitcoin Hearing

CFTC The US Commodity Futures Trading Commission (CFTC) has announced that it will hold a public meeting to discuss digital currencies on 9th October in Washington, DC.

Created in 1975, the US CFTC is an independent federal agency that regulates the country’s futures and options markets. The meeting will be presided by the CFTC’s Global Market Advisory Committee, a group that advises the organisation on issues related to market integrity and competitiveness.

The CFTC indicated that the meeting will consist of two panels, one of which will focus on examining bitcoin and questions surrounding the CFTC’s involvement in the creation of a derivatives market for bitcoin, while the other will center on Non-Deliverable Forwards (NDFs), a form of cash-settled short-term forward contract.

The event will be open to the public, as the full release explains:

“Members of the public may also listen to the meeting via conference call using a domestic toll-free telephone or international toll or toll-free number to connect to a live, listen-only audio feed.”

Though larger questions about bitcoin’s classification as a currency or commodity persist, the agency’s first foray into bitcoin is likely to focus on more basic questions.

For example, similar introductory hearings held by the New York Department of Financial Services (NYDFS) and the US Conference of State Bank Supervisors (CSBS) focused on educating those at each respective agency about the basics of the technology, and are only now moving on to more advanced subjects.

Ongoing debate

Despite the continued regulatory uncertainty in this area, the meeting could mark the first step toward more clarity for the bitcoin industry as to what the CFTC’s involvement will be in the industry’s markets.

The CFTC has been publicly discussing whether bitcoin meets the definition of a commodity under the organisation’s rules since March, the time when TeraExchange moved to secure the agency’s approval for its bitcoin derivative.

At the time, acting CFTC chairman Mark Wetjen indicated that the group was still seeking an internal answer to this question.

“The analysis hasn’t concluded, but I think people believe there is a pretty good argument that it would fit that definition, or there are at least arguments that it would,” Wetjen said at a March conference, according to Bloomberg .

Seeking definition

The CFTC’s exploration of bitcoin also comes at time when the bitcoin market is arguably seeing its first influx of more advanced financial trading tools.

Though some resources like Seedcoin-backed BTC.sx have been around for more than a year, new entrants such as BitMEX are now emerging at a time when some of the ecosystem’s largest exchanges are adding similar margin and options services.

Further, prominent members of the bitcoin community argue that such trading activity will have the long-term effect of decreasing volatility in the broader bitcoin market.

Given the evolving nature of this segment in the bitcoin market, many in the industry have called for the CFTC to provide greater clarity on how it will seek to oversee new bitcoin or block chain-based investment tools.

Images via Wikipedia; Shutterstock


September 25, 2014 at 11:00PM

24 September 2014

Overstock CEO Patrick Byrne to Keynote Inside Bitcoins Las Vegas – Get 10% OFF

Inside Bitcoins Conference and Expo will be returning to Las Vegas on October 5-7! The event will feature 35 informational sessions, over 70 speakers, 4 keynotes, and a half day of workshops!

Taking place at the Flamingo Hotel and Casino, the conference will cover a wide range of topics including mainstream adoption, compliance, bitcoin startups, investing, mining, altcoins, equipment, and more. An impressive lineup of bitcoin experts and thought leaders will share their insights and knowledge on the implications of bitcoin, along with predictions on what lies ahead.

The first 300 paid attendees will receive US$50 in bitcoin.

New to Inside Bitcoins Las Vegas will be a half day of small classroom-style workshops taught by cryptocurrency leaders, which will provide attendees with an interactive, informative setting to learn about various facets of the bitcoin ecosystem.

Recently announced is a keynote by Patrick Byrne, CEO of Overstock.com, who will be leading a session titled, “Cryptosecurities: the Next Decentralized Frontier” on October 6 at 3:30pm. Byrne will also be making an exciting announcement at the event regarding Overstock’s latest development on the Bitcoin front.

Featured speakers include:

  • Patrick Byrne, CEO, Overstock.com

  • Bobby Lee, CEO, BTC China & Board Member, Bitcoin Foundation

  • Daniel Larimer, Founder, Bitshares.org

  • Perianne Boring, Founder & President, Chamber of Digital Commerce

And many more! See the full roster of speakers here.

Interested in attending? Enter code BMAG14 for 10% OFF Gold and Silver Passports. Register now!

September 24, 2014 at 08:22PM

23 September 2014

PayPal Embraces Bitcoin: Is It Only the Beginning?

PayPal announced a monumental partnership today that will likely play a large part in the adoption of bitcoin throughout the world. The company has partnered with BitPay, Coinbase, and GoCoin to provide bitcoin support to the millions of PayPal users.

The first project consists of integrating with the company’s Payments Hub, which is likely to be a small piece of the puzzle in the future relationship between PayPal and the leading Bitcoin payment solutions providers. Initially, digital goods merchants in North America will be able to accept bitcoin through the Payments Hub, and depending on popularity, may allow merchants around the globe to do the same.

PayPal Payments Hub

PayPal announced in its press release, “We chose to work with BitPay, Coinbase and GoCoin because of our commitment to offering innovative and safer ways for businesses to accept payments. All three companies have taken steps to ensure that they know their customers and that those customers are offered certain protections. We believe digital goods merchants will be excited to work with these industry-leading companies to sell ringtones, games and music and get paid with Bitcoin.”

What’s it all mean?

This news does not necessarily mean that PayPal is adding the cryptocurrency into its digital wallet, nor does it mean that Bitcoin payments will be processed using its platform. Instead, this appears to be a foray into what has quickly become the most popular digital currency. If growth is noticeable, however, PayPal could be rolling out bitcoin support throughout other services.

This is yet another example of the power of Bitcoin technology. Each partnering company has taken steps to ensure that they know each customer and that customers are offered certain protections. PayPal is proceeding gradually though, but has obviously realized the value of Bitcoin, not only its simplistic payment methods, but also its transaction security and safety.

What the partnership has made possible is an easy way for merchants to test this popular payment method. More importantly, PayPal has long been one of the most established merchant solutions in the payment space, and because of the developed relationship with leading bitcoin businesses like BitPay, Coinbase and GoCoin, a wider range of users will be able to see the value of bitcoin; both as a payment method and technology.

The company has been helping merchants selling Bitcoin miners accept PayPal payments for quite a while. However, to help safeguard customers, PayPal is not offering the bitcoin payment option to merchants who pre-sell products. Meaning, when a company asks for funds up front for a product or service.

Only the beginning

“We believe Bitcoin offers unique opportunities as more people and businesses experiment with it. We are excited to work with businesses and business models that allow us to offer new experiences and the trusted service our customers expect. We hope to do more with Bitcoin as its ecosystem continues to evolve.”

Excitement mounted early this month when PayPal announced that businesses working with Braintree would soon be able to accept bitcoin payments. Is this a sign of what’s to come? Who knows, but it’s only the beginning. PayPal has thrown down the gauntlet. Who else will support Bitcoin and embrace innovation?

September 23, 2014 at 08:50PM

Network Visibility Product Incorporates Bitcoin Pooled Mining Detection

Bitcoin is gaining popularity. Although the price has declined, people are still asking about and joining the ‘mining frenzy’ with increasingly capable hardware. In fact, the current aggregate hashrate of the Bitcoin network is topping a staggering >200,000,000 GH/s.

Remember that the profitability of mining depends on not only the necessary investment in hardware, but, most importantly, in the recurring cost of the energy required to power mining rigs.

The world is full of people who are willing to game any system for an expected personal profit. Unsurprisingly, there is a trend of individuals engaging in what is called ‘illicit bitcoin mining’, which is, essentially, borrowing computing resources and stealing power to mine for bitcoin.

There are known cases of malware authors who install hidden miners in unsuspecting Internet-using computers all around the globe (see here and here).

Other individuals steal power or computing resources from their employers (see here and here).

The ultimate way to thwart illicit bitcoin mining in corporate infrastructures is by accounting for power consumption. However, Barcelona-based startup Network Polygraph offers a cloud-based network monitoring solution, which could offer an alternative solution.

Josep Sanjuas, CEO of the company that commercializes Network Polygraph, states: “Rather than focusing on power consumption, pooled bitcoin mining can be detected by checking for certain patterns in network traffic.”

Network Polygraph provides network visibility, which helps network managers understand what is happening in their network in order to better manage it. For example, it produces bandwidth usage charts, flags the IP addresses that generate most traffic, and detects network-based attacks.

As part of its core features, Network Polygraph determines which applications have generated network traffic by using complex machine-learning based methods. Its creators have recently incorporated Bitcoin mining detection to their product and it is already reporting illicit mining activities in customer networks.

“We were surprised when Network Polygraph started flagging mining activities in our customers’ networks,” explains Sanjuas. “We expected we would catch some bitcoin-related activity, but we ended up uncovering an illicit Bitcoin miner that had been operating for months,” he continues to explain.

“We are not allowed to disclose much about these cases for obvious reasons, but we expect illicit mining to become a greater problem as bitcoin keeps becoming more mainstream.”

Sanjuas explains that “to our best knowledge, [Network Polygraph] is the first network visibility product that features bitcoin mining detection.” He clarifies that bitcoin mining detection is not the main selling point of Network Polygraph’s product line, but “just another way [the company] can justify its cost, besides regular usage for network operations, troubleshooting or capacity planning.”

It is important to note that Network Polygraph supports bitcoin usage, and promises to “work out a solution” if customers wish to pay in bitcoin for their services.

For more information on Network Polygraph or to explore their business in more depth, please visit https://polygraph.io.

September 23, 2014 at 05:00PM

Kryptokit releases Video-Based Contest to Showcase the Power of Bitcoin Brainwallets

With 2 bitcoins available to be won, Kryptokit contest tests new blockchain based marketing ideas

TORONTO, CANADA – SEPTEMBER 23, 2014 – Today Kryptokit, the makers of the instant bitcoin wallet RushWallet, launched a video with a twist: embedded in the humorous video is a series of clues that lead viewers to 30 hidden brainwallets filled with bitcoins. Once viewers decipher the clues they are invited to claim the wallets and transfer any bitcoins inside them into their own accounts. There are 2 bitcoins available to be won in a contest that will last 1 month or until all the wallets are claimed.

The aim of the video is two-fold: first, to showcase how Kryptokit’s recently released RushWallet Fundraiser tool works and to demonstrate its ease of use; second, to show how brainwallets can be safely and easily used both as wallets and as a means to implement new marketing ideas.

The RushWallet Fundraiser tool allows users to quickly establish frictionless and free fundraising campaigns within the RushWallet platform. Using a single RushWallet, it is possible to manage and monitor several crowdfunding and collection campaigns at once. Unlike other popular crowdfunding sites, the RushWallet Fundraising tool has no fees, no restrictions, no centralized approval process, and allows you to start spending any collected funds at any time. All data is generated and stored client-side and RushWallet neither stores nor has access to any account information or any funds collected.

The video tells the story of Dmitri, an office worker who wants to raise money to buy his co-worker a less noisy keyboard using the RushWallet Fundraiser tool. As viewers watch the story, they will learn how the tool works. Throughout the video, viewers also will have the opportunity to collect clues to the passphrases that unlock the hidden brainwallets, thus gaining some hands-on experience with the power of brainwallets in an engaging and interactive way. There are 10 bitcoins up for grabs in the contest.

A brainwallet is a passphrase that converts into a wallet without the use of a wallet file. This passphrase is only stored in the mind of the wallet holder; it acts as an access mechanism to your wallet’s private key.

“Brainwallets often get a bad rap. They aren’t understood well in the bitcoin community,” says Anthony DiIorio, CEO of Kryptokit. “When a brainwallet is set up properly, it can be extremely powerful and secure. You are always in control of your assets and able to access your bitcoins anywhere in the world, provided there is internet connectivity. You don’t have to carry anything around – all your bitcoins are stored in your mind.”

According to Steve Dakh, CTO of Kryptokit, “The key to a good brainwallet is creating a uniquely generated personal passphrase that is easy to remember but impossible for anyone else to guess.” Experts recommend a phrase that is many words long that no-one else in the world has likely ever used (Hint: don’t use song lyrics or any phrase that might have ever been printed in a book!)

About Kryptokit

Kryptokit is a Toronto-­based technology company specializing in encryption and digital currencies. Founded in 2013 by Steven Dakh and Anthony Di Iorio, Kryptokit strives to provide software and hardware solutions that are secure, easy to use, and frictionless.

For more information about Kryptokit and its line of products including Kryptokit Extension and RushWallet with its crowdfunding and payment request tools, please contact Anthony DiIorio at anthony@kryptokit.com or +1-416-831-9593.

September 23, 2014 at 04:20PM