6 November 2014

Robocoin Now Requires All ATM Operators to Collect Customer Information


Robocoin has announced that it will now require all of its bitcoin ATM operators to collect customer information in an effort to comply with know-your-customer (KYC) regulations.

The Las Vegas-based company reported the decision was made under the direction of its legal team, which advised the startup that as a registered money services business (MSB) it could no longer process anonymous financial transactions.

In its full remarks, Robocoin asserted that while it had hoped to allow its ATM operators to continue to choose whether to meet KYC standards, recent actions from the US Financial Crimes Enforcement Network (FinCEN), along with the shutdown of allegedly non-compliant ATMs, signal that bitcoin companies that fail to adhere to regulations will face repercussions.

Speaking to CoinDesk, Robocoin CEO Jordan Kelley framed the announcement as a necessity should the startup want to achieve its goal of bringing bitcoin ATMs to the wider global market. In this light, he argued, the ideological preferences of individual operators shouldn't outweigh the good that the company could achieve by reaching the global underbanked.

When asked whether he believed there would be customer backlash over the decision, Kelley sought to keep the company's larger goals at the forefront. He said:

"Let's ask this question. How many bitcoin ATMs do we want in the world? Do we want 30? Do we want 100? Do we want 200? Or do we want 1,000, 10,000, 100,000? Our logic is it's all about providing scalability and consistency to the customer. Whether or not we wind up having to part ways with a few guys that lack alignment with us, that's just the way it goes."

Kelley added that Robocoin would help any operator unwilling to meet the company's directive broker or resell their machines.

The news notably comes on the heels of a wave of community backlash against Robocoin for alleged difficulties it caused operators in connection with the delivery of its units.

No links to money laundering

As part of the decision, Robocoin operators will need to upgrade to the Robocoin 2.0 platform, which mandates that bitcoin ATM customers use the company's new proprietary wallet.

At least one Robocoin operator, Jonathan James Harrison, has taken issue with the change, reporting that he will resist the upgrade to the company's new platform. Harrison aims to hold a launch party tomorrow for his latest bitcoin ATM, whether the machine is operational with its existing Robocoin 1.0 software or not.

Further, he has suggested he will attempt to galvanize sentiment against the company should it not continue support for its Robocoin 1.0 platform, which he alleges the company had previously suggested he could keep.

"Friday will be a very bad PR day for you," he wrote in an email to Robocoin.

Kelley stressed in an interview, however, that he doesn't see the strategy shift as a contradiction or redefinition of any understandings between Robocoin and its operators.

Rather, he said Robocoin's relationship with operators remains unchanged. Operators, he said, continue to be in the business of buying cash for bitcoin and selling bitcoin for cash, and that persuant to this goal, all parties in the transaction should resist becoming enablers of money laundering.

"We do not want to be associated with any kind of money laundering," Kelley said. "Any machine that doesn't collect customer ID, it gives the money launderer the ability to convert cash that was earned illicitly into bitcoin and to do it without any kind of customer information. We cannot be a part of that, we can't be associated with it. If it's something that somebody wants to do, I don't want to be involved with it."

Eye on larger goals

To Kelley, the decision was a tough-but-necessary move that he feels will send a positive signal to the wider public about how his company is looking to extend the benefits of bitcoin more broadly.

"We're listening to the world," Kelley said. "The world says we demand more access to bitcoin. We want to provide that, but we cannot provide that with a few machines with our brand on them that are engaging in non-compliant activity."

Kelley framed the Robocoin 2.0 upgrades as a way to better bring bitcoin to the world. For example, he cited the improved ease of use of the platform compared to the original iteration.

"With our new software, customers walk up to the machine for the first time, put in cash, get a bitcoin wallet made right there and then have the ability to send that bitcoin to another person anywhere else in the world, or send it to their own wallet," Kelley said, emphasizing how this improves on the company's original approach.

Harrison, however, alleges that he felt Robocoin's 2.0 software had so far underdelivered, a claim that Kelley also countered by taking a long-term view on his product.

"That's the beauty of developing on a new platform, at launch it may have a few little glitches the same way you might have with a new Apple update, but over time it gets stable, it improves, we get feedback," he said.

Courting business partnerships

In statements, the company sought to portray the step as one that is vital to the company's continued operation, and therefore in the best interest of its operators and customers.

"There are some guys in some markets who want to be the only one and they want to own that machine," he said. "Our logic is that we want a machine on every corner to make sure we can deliver on the promise of bitcoin."

Kelley went on to state the he feels the change is necessary should Robocoin seek to appeal to new business partners in accordance with its goals, just as Coinbase and other companies in the ecosystem have done in the past.

"Big companies do not want to do business with guys who have machines that are non-compliant," Kelley said.

The post concluded by noting how Robocoin has evolved in the year since it launched, reading:

"Bitcoin and the bitcoin ATM industry have matured. As the legal landscape becomes clearer, Robocoin evolves and so do the requirements with which we must comply."

Images via Robocoin; Shutterstock

Bitcoin ATMsKYCRobocoin

November 07, 2014 at 03:00AM

Silk Road 2.0 Seized, Alleged Operator Unmasked in FBI Crackdown

seizure SR 2

The Federal Bureau of Investigation (FBI) together with the US Attorney for the Southern District of New York have announced that they have arrested Defcon, the operator of illicit black market website Silk Road 2.0.

Authorities allege that 26-year-old San Francisco native Blake Benthall was arrested yesterday in his home city, and that he will appear in federal court today. At press time, the Silk Road 2.0 marketplace was no longer operational, with the website displaying a disclaimer that it had been taken down by the Europol, Eurojust, the FBI, US Department of Justice and US Immigration and Customs Enforcement.

In statements, Manhattan US Attorney Preet Bharara called Silk Road 2.0 a "nearly identical criminal enterprise" to its predecessor, Silk Road, which was seized and shut down in October 2013 following the arrest of its alleged operator Ross Ulbricht. Founded in its wake, Silk Road 2.0 has sought to provide an open online marketplace in the wake of Silk Road's shutdown.

Bharara affirmed the position of law enforcement officials, that those who operate such websites will be charged provided they allow crime to proliferate:

"Let’s be clear – this Silk Road, in whatever form, is the road to prison. Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don’t get tired.”

"The FBI worked with law enforcement partners here and abroad on this case and will continue to investigate and bring to prosecution those who seek to run similar black markets online," FBI assistant director-in-charge George Venizelos added.

The full report from the FBI alleges that Silk Road 2.0 was used by "thousands of drug dealers", with "launder millions of dollars" generated by the "unlawful transactions" it processed. Law enforcement officials estimate Silk Road 2.0 was generating $8m per month in sales from 150,000 active users as of September of this year.

"The offerings on Silk Road 2.0 consisted overwhelmingly of illegal drugs, which were openly advertised as such on the site," the statement reads.

The FBI said that a Homeland Security Investigations (HSI) agent was able to infiltrate the website, gaining access to "private, restricted areas of the site reserved for Bethall and his administrative staff". HSI further claimed that it interacted with Benthall during his operation of the site.

At least two more arrests have been reported in connection with the site's shutdown, with RTÉ News reporting that a Dublin drug distribution center with ties to Silk Road had been raised. Two men in their 30s were arrested and almost €200,000 worth of cannabis, ecstasy and LSD were taken into custody.

Officers from the Garda National Drug Unit, the Computer Crime investigation Unit, and the Criminal Assets Bureau reported that the two men were major players in the distribution of illicit substances through black market websites, according to the report.

At press time, Silk Road 2.0's competing marketplace Agora was still online, though OpenBazaar had issued a foreboding tweet that could signal further action.

Deep webDefconSilk Road 2.0

November 06, 2014 at 05:04PM

5 November 2014

Swarm Demo Day 2014 Round Up


Swarm represents a unique opportunity for anyone to take part with their bits to bitcoin and support new and interesting projects. We will include the stories related to Swarm’s Demo day here:


The Bitcoin community has shown me that nothing can stop a group of people who are passionate in their beliefs. In our case, we believe everyone in the world deserves the right to financial freedom. My goal is to make sure everyone can see that this Bitcoin movement has the power to change the world for the better through every story we publish. Before working with Bitcoin Magazine I was involved in freelance writing, illustration, renders, making electronic music, and 3d print designs (http://ift.tt/1sH3ynH). I'm also a married dude and a father of 2 who loves to have fun with his family, cook, and travel. Contact me by shooting a message to: ruben [at] bitcoinmagazine.com

November 06, 2014 at 12:27AM

‘Bitcoin is Teaching Realism to Libertarians': An Interview With Old-School Cypherpunk Vinay Gupta

As an old-school cypherpunk in the 1990s and one of the most active members of the E-gold community before this centralized precursor of Bitcoin got shot down, futurologist Vinay Gupta has been involved with digital currency for over fifteen years. He has also worked with the United States Departement of Defence on disaster relief and state failure issues, and helped develop CheapID, a genocide resistant biometric ID card for the NSA. He later turned his attention to global disaster prevention, and invented the Hexayurt: an open source dirt-cheap disaster relief shelter design which is used today in refugee camps and at festivals like Burning Man. Gupta has been appointed as the strategic advisor of the Ethereum communications team shortly before the publication of this interview, but he is probably best known within the Bitcoin-community for his interview-snippet from the upcoming IamSatoshi documentary, in which he discusses the politics of Bitcoin…

Vinay, first of all, you describe yourself as a “global resilience guru”. How resilient is Bitcoin?

Well, if the Internet goes away, Bitcoin goes away, right? So it’s vulnerable in the same way that civilization itself is vulnerable.

But if civilization breaks down, almost any store of value becomes useless very quickly. It’s not really clear that large piles of wealth sitting there actually exist without the state to protect them. That’s easy to see for copyright and patent, but the same is true for most other passive types of ownership, such as stocks, bonds or futures. And we could go further. I own the house I live in, but that house next door that I’m renting to you? The reason it’s mine, is because the state says it is. The ability to do large scale capital accumulation without having to need a private army is basically an artefact of pre-existing law.

Some people prefer gold over Bitcoin, but even if you own a lot of gold, and civilization breaks down, you’ll need people to guard your gold. And in all probability the people guarding your gold will end up owning your gold. Either a little bit at the time by guarding it, or all at once by dis-intermediating you from the gold shed. So because of the need of physical force to protect it, you could argue that gold is actually more vulnerable than Bitcoin. Because if the Internet goes down and stays down, something so bad has happened that it’s probably gonna be machine guns on street corners.

What about Bitcoin’s resilience in regard to the state itself?

Right, resistance to state interference… That’s a really bold claim. I sort of need to see extraordinary evidence for things like that, because bluntly, the security state invented this stuff. It’s fundamentally their kit. Most of the mathematics, most of the algorithms, most of the hardware, the internet itself, all these things are spin-outs of defence projects.

And remember, we really tangled with these guys in the 90’s. Public key cryptography was regarded a weapon of war back then. The American government was really friggin’ pissed off at us, and did as much damage as they could within the law. Constant harassment, legal pressure, people lost their jobs… the whole thing was constantly on the verge of everybody ending up in jail as far as we could tell.

Note that that is no longer true…

Are you suggesting the cryptography underlying Bitcoin is compromised?

Making the jump to saying Bitcoin is compromised is too far. But if you don’t think of this within the very narrow parameters of cypherpunk history, if you put it in the larger scale of political struggle, then what did the US government do to every substantial opposition group? The American Indian movement: smashed with a hammer, you’ve probably never even heard of it. Black Panthers: smashed with a hammer, all that’s left are the Crips and the Bloods. US peace movement: people will tell stories about going to meetings, and a third of the attendees were spies from different agencies. State, federal, local, FBI, CIA, DEA…

You don’t need to be a rocket scientist to figure out that the government has the vast majority of the cards on the table when it comes to force, and they’re choosing to lay absolutely none of them on the crypto-community right now. Silk Road and all of the other drug trade sites that use Bitcoin would absolutely, without any shadow of a doubt, provide the legal reason for killing the Bitcoin-network and arresting everybody involved. Do everybody for drug trafficking, money laundering, all the rest of that stuff. But they’ve decided to better leave it up than to take it down.

So you’ve got to ask yourself: why?

Well… why?

I don’t know.

But the idea that we right now have a relatively small group of crypto-Jedi, that are so much better at this stuff than the people who invented it, and as a result are gonna bring peace and liberty for all on earth… Really?! I’m not buying it.

I don’t think Bitcoin is necessarily the existential threat to the existence of the state as Tim May’s old Cyphernomicon would have you believe it is. It is likely, however, that government without Bitcoin could very easily slide all the way into the establishment of total control over transactions by getting rid of cash and everything else.

The ecological function of dissent inside a complex society is not that the dissent immediately takes over. It’s that the dissent stabilizes the core within safe temperature parameters. With Bitcoin in the system, there’s every chance that if you really try and clamp down on society, more and more and more of the stuff will resort to Bitcoin, and it becomes harder and harder and harder to credibly lock the doors. You can imagine, for instance, how Bitcoin might have accelerated the fall of the Soviet Union if it had existed in the 1980s, just because it would have made the black market so much more powerful than the government in all kinds of ways.

So Bitcoin serves a protective function, a balancing function that didn’t exist before. And that does not require any extraordinary claims about its security against the NSA.

And the US government will be alright with this kind of re-balancing?

Well… Wall Street’s arrived. Wall Street on one side, Silk Road on the other. It’s the 1980’s all over again!

We need Wall Street?

I’m not saying we need Wall Street, but what I am saying is that the financial markets and the drugs guys have been in bed together for a very long time. And the fact that the current venue for that kind of thing actually happens to be Bitcoin, you know… the US government did not go around shooting everybody from Wall Street in the 1980s when it was cocaine and suitcases full of cash used to finance leveraged buyouts, now did it?

My suggestion for Bitcoin would be to integrate Wall Street as fast as humanly possible. Teach the Wall Street guys how to use proper cryptography, teach them how to use blockchains, teach them that the state is not always their friend, and teach them that they should be thinking about engineering around it. If Bitcoin is gonna drift into Wall Street, let’s teach them some of our bad habits. Let us make them like us, rather than us becoming like them.

Many bitcoiners would rather not see Wall Street involved at all, in order to preserve Bitcoin’s promise of freedom…

Well, that kind of utopian vision, unfortunately, is total horses*t for Bitcoin. There are three problems: natural monopolies, cartels, and power law distributions of wealth.

Bitcoin-mining is specialized by groups with heavy technological capability and enough financial strength to get custom hardware made. These miners have now pooled their computing power together because it evens out their earnings, effectively minimizing their risk. In the case of Ghash, this even puts them perilously close to the 51% point for control of the blockchain. This is cartel power.

Meanwhile, the distribution of bitcoins seems to replicate the current situation where 300 billionaires control the same amount of wealth as three billion poor people. This is partly because of early adopter dynamics and the increasing hardship of the mining process, but there’s also some evidence that power law distributions of wealth is just what happens in unregulated economies. This is a point many libertarians would argue against… but we’re doing the experiment right now, and there’s every indication that the basic structures of libertarian economics do push into that direction.

And then you have the Bitcoin Foundation, which is emerging naturally from the Bitcoin environment simply because it has established an economically efficient configuration. By paying the technical priesthood of Bitcoin known as the Core developers, the Foundation has created a huge amount of centralized power within a system that didn’t really start with any, which has now effectively turned it into a natural monopoly. And once you have a monopoly, it looks like a state. No wonder that the Bitcoin Foundation looks so frightening.

If you don’t like the Bitcoin Foundation, you could start a new one, right?

Sure, absolutely. Just like you could start a new river Thames. Have a shovel. Start digging.

Look, every type of complex system needs indexing, and while decentralization is very resilient, it is also very expensive and inefficient. So indexes tend towards being singular. A single Yellow Pages, a single phone book… Two is much less useful than one, because with one it’s either in the book or it’s not.

Plus, complex systems often require centralized accountability in order to function properly. Get fifty people in a room, get them to organize some sort of task, somebody will wind up acting as a routing hub, that person now turns into a de facto leader.

“Natural” in natural monopoly doesn’t mean good, it just means that it’s an economically efficient configuration.

But we could start a new Bitcoin Foundation…

We could. But even if it is efficient, we’ll have replaced one corruptible structure with another corruptible structure.

“We’ve picked a new set of bureaucrats, and we’ve done so very carefully, they work for us. Today. Tick… tick… tick… Wow these guys are kind of jerks… Tick… tick… tick… Can we get rid of them? Maybe we should start a third Foundation!”

Right? No progress. Doesn’t work.

How about a “one bitcoin one vote” arrangement for Bitcoin-development, like you’ve suggested before, or a crowdfunding platform such as Mike Hearn’s Lighthouse?

“One bitcoin one vote” arrangements for Bitcoin could certainly dilute the natural monopoly of the Bitcoin Foundation, and a bounty-based scheme such as Lighthouse probably has similar dynamics in practice. These are both definitely better solutions than an unaccountable natural monopoly running the development process.

But they do make Bitcoin a society in which the rich can use their accumulated wealth to pay the costs of changing the rules of the game to favour them even further. That’s a problem if you want freedom. Winner-keeps-winning games eventually result in misery all the way along the long tail of poverty. Reify property as the core of politics, and you’ll eventually wind up as slaves again.

So you don’t really consider these solutions fair either?

What I’m saying is that we can’t even really define fair. So if we can’t define fair, and we’ve got a pretty hard time defining free, all that happens is that every time we build systems they run off the rails.

What a lot of these Bitcoin-kids don’t realize, is that they’re playing with nuclear weapons. They’re taking the full force of this creation, this mathematical lightsaber, and they’re swinging it around in a small room filled with young children. If you wind up in a situation where these guys win, where Bitcoin actually displaces the dollar and becomes the global reserve currency, every cut corner and every political error in their deep thinking will become the new chains that bind humanity. And the existing chains are only made out of the will of the state. These new chains are made out of mathematics, and they are a hell of a lot harder to break.

You sound pessimistic.

The primary function of Bitcoin, the long-term political value of this experiment more than any other single factor I can identify, is that it’s teaching realism to libertarians.

Libertarianism simply does not prevent the establishment of monopolies, cartels, or power-law distributions of wealth. Never has, never will. Libertarians needed to see that happen in order to understand that their ideology is actually not going to protect them against centralized power.

Now they will need to decide: did they want libertarianism, where property is used to divide everything? Or did they want anarchy, where it’s our inherent human nature that gives us freedom, not our property rights.

If these libertarians would be good enough to grow the hell up and become anarchists like normal people, then perhaps they would start to get serious about controlling centralized authorities rather than fantasizing that they will cease to exist.

How would you suggest we move forward?

First of all, what I would like to see, is a very serious, large scale, political analysis project, to really try and figure out what the hell is going on. We need to start out-thinking states and government agencies rather than just outbuilding them. We’ve gotten pretty good at this idea that with enough eyes all bugs are shallow – that’s the classic saying about open source security. But we now have a new set of security problems, which is not about finding bugs, but about analysing motives. So we need lots of eyes analysing motives, finding out whether or not we’re basically shooting ourselves in the foot here. I don’t see any reason why that shouldn’t be another large scale open source project, like Wikipedia. An open intelligence agency, that publicly does the risk and threat analysis, publishes the results, is open to feedback, and builds a realistic study of what kind of exposure we have to these bastards. Very much like STRATFOR, but for the open source community.

And the second priority – after integrating Wall Street – is taking all of the money that people are making in the Bitcoin system, and using it to build the friggin’ successor. Everybody thought Bitcoin was gonna bring them freedom and liberty, but what it has brought them are three different kinds of entrapment. Let’s take these lessons, and make a Bitcoin that is useless to Wall Street, that doesn’t automatically create a cartel of miners, and that doesn’t leave a power vacuum for development which some Foundation will fill.

And I want to emphasize: this is super clearly a social problem. Not a technical one. You need to build a social understanding that can finance the technical development in order to deliver the software you want. And make no mistake: a system that solves this problem effectively is a government.

I do believe this is entirely possible. In the same way that you’ve got the eBay mafia – a bunch of guys that got rich off inventing eBay and went on to build new amazing things – and the PayPal mafia – a bunch of guys that got rich of inventing PayPal and went on to build new amazing things – we’ve now got a huge Bitcoin mafia that’s got buckets full of money… So where are my amazing things? Go forth! Conquer! Go out and make the world amazing!

November 05, 2014 at 02:52PM

4 November 2014

The Bitcoin Wonder Woman: An Interview With Lisa Cheng

I met Lisa at Porcfest this year and she seemed like a great person who loved Bitcoin. It wasn’t until we recently chatted that I started seeing her name pop up everywhere, advising certain next generation projects and writing a slew of whitepapers. This is why I’ve dubbed her the Bitcoin Wonder Woman. The questions literally leap between each of the projects she’s involved in so bear with me. She’s currently involved in Gems, Coinkite, and FACTOM, and advises a few other Bitcoin projects.


Lisa Cheng

Ruben Alexander: What are your goals when writing a whitepaper?

Lisa Cheng: When writing a whitepaper, we seek to highlight the technical validities of the entire project and we do that by looking for the answers to questions that are commonly asked – how is it being developed? Where is the project now? And how are they going to accomplish what their business plan says? From there we take a look at what the project has assembled in terms of planning their launch and execution. As the majority of the work we do at Vanbex is focused on Bitcoin 2.0 – we seek to explain via the Whitepaper how they are launching their token, via what platform, how will it have value, and why should users be excited about the project.

The Whitepaper is not a business plan, and it’s not a User Guide. It’s a technical explanation of the entire project, discussing the plan from project launch to its future date and time where it will reflect the project’s updates, revisions, and additions. It should explain on a protocol level how a token is going to be created, transacted – i.e. off chain hashing of transactions, using what systems, and even, what wallet(s) to use.

The goal is to really write a strong technical document that explains the project as those who read such things are typically developers, investors, and technological-savvy people – ironically these groups are who make up a good portion of Bitcoin users. And the reason why the Whitepaper is so important is that it’s typically the most in depth and explanatory method of understanding a project, especially when it’s Bitcoin 2.0. When done correctly, a whitepaper is able to answer and dispel common challenges, questions, concerns, and certainly FUD. It has the ability to build confidence and create a community, because when people are really passionate about a new idea or concept – they want to read about it as much as they can. The Whitepaper provides this: an example I’ve heard is when people first hear about Bitcoin and become fascinated, they start by wanting to read as much as they can on the subject. The best thing to do is to go directly to the source, in this case the original paper by Satoshi Nakamoto.

Could you describe Gems in one sentence?

Gems is a social messaging app that will include a way to send and receive cryptocurrency between users, using the native app which includes a Bitcoin wallet.

What do you love about Gems?

I love that Gems combines social with crypto. It hasn’t been done before and I’m excited about the potential for this project to bring new people into the community.

What makes Coinkite stand out? What features do they offer to protect the privacy of their users?

Coinkite is a Canadian company and I remember when they first launched I was so excited that I bought one of their terminals. I was just asked to join as an advisor to the company and I really appreciate the opportunity to work with them, as what really makes them different is their in-house HSM (Hardware security module) designed for Bitcoin key management. They are the first and only ones to achieve this, and it’s a credit to the founders Rodolfo and Peter as they’ve quietly grown their user base which includes Bitcoin exchanges and Bitcoin companies on every continent.

The biggest thing they offer to protect the privacy of their users: every Coinkite account is protected by their HSM, meaning they don’t have access to any keys or wallets on their system. You can back up your Electrum or Blockchain.info wallets by importing your key to a Coinkite account you create for free, and they also cover the miners fees for every transaction that is made from a Coinkite address.

FACTOM sound very promising. Can you describe this project?

FACTOM is a project I’ve been following closely; they are interesting as they are solving the challenges facing Bitcoin today regarding block times, data size, and scalability. My team at Vanbex has just had the opportunity to begin working with them on their launch and they have a very strong whitepaper, experienced lead developer who is also the founder, and their technology is solving problems that are experienced today. After reading the side chains whitepaper and participating in the AMA, I believe they are complementary to the side chains project and have many of the same qualities.

What are the main differences between Storj and Maidsafe?

Storj is the front-end to decentralized storage and providing tools to access this data easily, Maidsafe is creating a new decentralized infrastructure to support storage/bandwidth/compute – for example their whitepaper includes details on how packet relays will be distributed in this decentralized cloud.

Do you think the SEC will crash Swarm’s demo day? Why should people submit their projects to Swarm?

SWARM is a community-driven crowdsourcing model for launching Bitcoin projects – if anyone crashes their party including the SEC, they will likely be disappointed as SWARM is probably one of the most Bitcoin-community-centric projects in the ecosystem today. There wouldn’t be much for the SEC to ‘uncover’ other than a few stories from those epic SWARM parties – all of which I’ve sadly missed.

Projects should definitely consider submitting their projects to SWARM – getting the support from Joel and his team would help any budding Bitcoin entrepreneur take their project from concept to reality.

What are some other cool Bitcoin 2.0 projects coming out that people should keep on their radar?

Besides Mastercoin and Counterparty. . .FACTOM, Gems, Koinify, Merchantcoin, BlockAuth, Lazooz, Dogeparty, and Ripple are going to make huge strides in the coming months.

Do you feel there are too many Bitcoin 2.0 platforms?

Definitely not. There [are] not enough platforms. Sidechains will likely change that and everything we understand about Bitcoin next year.

November 04, 2014 at 04:39PM

ChangeTip Introduces ‘Tip.Me’ – the Easiest Way to Tip. Ever.

ChangeTip Introduces ‘Tip.Me’ – the Easiest Way to Tip. Ever.

LAS VEGAS, Nov. 4, 2014 – At Money2020 today, San Francisco-based micropayments leader ChangeTip announced their new Tip.Me tipping platform. Tip.Me enables users to tip other users instantly, for free, and is seamlessly integrated into their current ChangeTip product. Until today, ChangeTip has leveraged popular social networks like Reddit and Twitter; with the introduction of Tip.Me, they are taking tipping to a whole new level.

The process is simple: users login using any of their online profiles; next, they choose a unique tip.me domain; and then they can accept tips whenever, wherever, and from whomever. Tip.Me also offers an embeddable widget so you can start collecting tips on your websites and blogs. The Tip.Me widget, similar to a Twitter ‘Share’ or Facebook ‘Like’ button, will make the social tipping fast and easy.

ChangeTip CEO Nick Sullivan thinks Tip.Me is about more than just social tipping.

“It’s about giving people an easy way to say thank you, good job, good idea, or here’s what I owe you. Tip.Me is a platform for instant value transfer and reciprocity. Say your friend pays for the Uber; with Tip.Me you can send him your share of the ride.”

In order to start tipping people from your Tip.Me account, you need to fund it. Currently, the way to fund your account is by using bitcoin. With bitcoin and Tip.Me, the ability to send small amounts of money over the Internet is possible. Traditional payment systems, limited by their technological inefficiencies, have never been able to offer this type of solution.

Tip.Me is enabling content providers a new monetization channel while offering the audience an opportunity to express their gratitude. “We see the ‘Like’ culture and want to level this up through gratuity. This is a love button for the Internet,” says Sullivan. Tip.Me is a game changer in a world where advertising currently fuels content.

About ChangeTip

ChangeTip is a leading micropayments company located in San Francisco, California. By leveraging Bitcoina and Blockchain technology, ChangeTip is building a liquidity engine for peer to peer generosity and tipping. ChangeTip is sees the global tipping industry as a multi-billion dollar market desperately in need of a technological make-over. For further information about ChangeTip and Tip.Me please visit www.changetip.com or contact Victoria van Eyk, victoria@changetip.com, 613-898-8674.

November 04, 2014 at 12:28PM

3 November 2014

The New Frostwire

Remember FrostWire (BitTorrent client)? They’ve completely transformed their platform and are integrating Bitcoin into their system.

While at a Bitcoin conference I met Angel Leon, a project lead for FrostWire. Bitcoin, he mentioned to me, has caused a resurgence of excitement in the open-source movement.

Angel is also working hard on the OpenBazaar Project.

I asked him some questions about everything from Bitcoin, to FrostWire, and OpenBazaar.

Kevin Cruz: How did you come to begin working on open-source projects and why do you enjoy it?

Ever since I was into school I couldn’t understand why so many people in campus would be so adamant to not show their code, it wasn’t as if they were developing top secret super important technology, I thought we’d learn more from each other if we shared.

But it wasn’t until I joined LimeWire in 2005 when I truly began to learn what the Open Source process really meant. From there I moved onto other projects, such as FrostWire, and everything I do, if it can be opened, it will be.

How does the vision behind Frostwire relate to the idea of bitcoin?

Bitcoin is the missing key for many projects, not just FrostWire. In our case, we see tremendous opportunities to enable content creators to monetize the content they share with those who can pay what they can, and while they do that, we believe no third party should be involved in taking a cut of the transaction.

We believe that there’s great value to be added to industries that deal with Intellectual Property if you onboard content creators worldwide without any friction and better yet, if they can transact with their fans/customers directly and efficiently like you can with Bitcoin.

How has Frostwire changed more recently?

FrostWire is now 9 years old, it went from being a LimeWire fork into a project of its own. FrostWire is the result of integrating a multitude of Open Source projects; it’s basically a file downloader with built in search capabilities, along with a full featured media player powered by MPlayer.

FrostWire downloads files from cloud services and from the BitTorrent network. For this purpose we’ve been using the Vuze/Azureus BitTorrent engine, but as of FrostWire 6 (currently in alpha) we’ve removed Azureus completely and we’re now using libtorrent.

We were born a Java project, and integrating things like libtorrent in the product have made us create new technology for the java community.

For FrostWire 6 we created a full featured libtorrent wrapper API for Java called frostwire-jlibtorrent. http://ift.tt/1DSIWgn Our commercial proof of concept for this library will be the release of FrostWire 6, a full featured end user BitTorrent client, now lighter and faster than ever thanks to this “engine” replacing decision.

We hope this library will enable other projects, certainly in the enterprise/cloud sector which is heavily serviced by Java technologies, to take a closer look at what the BitTorrent technologies are able to do. Once mature, this will be a powerful library to build products that can benefit from decentralized file sharing.

During those 9 years something interesting happened along the way, and it was the birth of Android. When we got on Android we were the first peer to peer file sharing client ever published on the “Android Market” (as I believe it was called at the time), back then we had implemented a new p2p protocol which we had called “metafrost”. The protocol mimicked the Gnutella Protocol and at the time it was an experiment that was catching exponential attention from Android users that could browse each other’s shared files. However, this didn’t go well with the federal government which had concerns about our default settings for a file sharing app, and they ended up not just auditing our Android app, but also putting very strict rules on how the desktop app was to behave.

This led to the hard decision of removing Gnutella support from FrostWire and transforming it into a BitTorrent/Cloud downloader.

We’ll soon be releasing an Android version that also enjoys the power of our new frostwire-jlibtorrent client, and we believe this new version should be able to run very well even in very modest hardware equipped Android devices (just by looking at our initial tests and comparing things like memory usage, threads used, battery consumption)

How did you come to join OpenBazaar?

I’ve joined OpenBazaar simply because of the daily anxiety of not having it. I believe OpenBazaar needs to exist. The world of e-commerce is made up of a bunch of walled gardens that don’t talk to each other. Thanks to Bitcoin this can finally change as the payment medium is no longer owned/controlled by a central organization not willing to open up in anyway.

My goal with OpenBazaar is to have a standard Smart Contract Protocol that any ecommerce related app/service can use. What this means for FrostWire is still uncertain as the protocol is still far from having an implementation that we can look at and say “we can actually do this, and that”, but it is in my gut that this protocol will enable us to work on a decentralized music store, a decentralized music store that allows not just for the “Pay what you can” business model, but also the more traditional “Pay for this track” model, while not ripping artists off 30% plus what labels steal from them after that.

I think this will be very healthy for the music industry as a whole, especially as technology has allowed for very specific niches to discover the music they actually care about (long tails). If we can pull it for music, I’m sure we’ll be able to empower content creators working with film, books, software, etc. to list, and sell their products be it on FrostWire, or on some other OpenBazaar based product.

Another interesting thing we started doing recently with FrostWire and Bitcoin to grow our developer team was the addition of tip4commit to our repo. We’re converting all fiat donations into Bitcoin and distributing these to the following projects:





As a result, the first week we started getting translators from Russia, Croatia, Greece, [and] China to help us with out of date translation files. As of last week we started getting our first contributions to frostwire-android (someone from Azerbaijan) and the beauty of it is that, once the projects are funded, the bitcoins are out of our control. And once a new contribution is merged, the contributor will receive bitcoins almost immediately to their wallet.

We’re now seeing 2-4 daily contributions to the projects and making new friends all over the planet.

November 03, 2014 at 04:36PM