Align Commerce Launches Public Beta of International Payments Platform

Align Commerce announced yesterday that the public beta of its international payments platform had launched, which could cut the cost and time of transactions in a $24 trillion market. Thirty-four countries are now exposed to this beta.

“The $24 trillion cross-border payments market is growing at a breakneck pace, expected to eclipse $54 trillion by 2022, despite a highly inefficient and expensive system in which businesses spend over $50 billion on wire and foreign exchange fees, wait up to seven days for transactions to complete and have no visibility into the process,” said Marwan Forzley, CEO and Founder of Align Commerce, in a statement.

Align Commerce uses the blockchain to expedite money transfers. When transferring money through the normal banking system, numerous intermediaries each take a small fee. By eliminating that, the money can move much faster and for fewer fees.

Forzley explained the workflow in an email to Bitcoin Magazine: Business A pays its bill using a local payment system such as Automated Clearing House (ACH.) Business B gets paid via its own local payment system.

“The speed of the payment end-to-end depends on the speed of the local payment systems, and that varies on a country-by-country basis,” Forzley explained.

What makes the tool particularly useful for potential businesses is that there are no changes to the way they do business.

“The key is that there are significant advantages for the businesses using the blockchain in terms of savings in time and money,” Forzley explained. “In addition, there is no change of behavior required. The blockchain is used behind the scene as a rail that moves fiat to fiat between two parties.”

“Align Commerce is the first company to successfully tackle international payments between businesses using the blockchain, allowing companies an easier, faster and less expensive option for cross-border transactions,” said Dan Morehead, CEO at Pantera Capital, in the statement.

Align Commerce is able to cut the cost for businesses as well by cutting time it takes to process the payments and how many middlemen participate in the transfer. Only the company that has to change currencies pays a 1.9 percent exchange rate fee on top of the amount of money it wants to send. Therefore, the buyer has to pay the exchange rate fee.

Businesses might be worried about the volatility of Bitcoin while the payment is going from point A to point B. Though it is faster than traditional means, Align Commerce still can’t have the payment transfer instantly because of local exchanges. But according to Forzley, the company manages any price volatility issues.

Using the blockchain to make faster payments around the world is a use case Bitcoin enthusiasts have been proponents of for a long time. Align Commerce hopes to finally fix that problem.

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April 03, 2015 at 09:56PM

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Coinbase Issues Request for Bitcoin Micropayment Services

In a thoughtful blog post, Coinbase offers ideas for new Bitcoin applications and business models. Based on the applications under development by the more than 7,000 developers using the Coinbase API, it appears that four main categories of Bitcoin applications are gaining popularity among developers: P2P tipping, cross-border payments, international microfinance and reputation platforms.

The Coinbase post identifies other promising Bitcoin application categories and business models that haven’t been targeted by many developers so far, and recommends to Bitcoin developers and startups: “Here’s 10 ideas for Bitcoin startups that we would love to see more developers working on.”

Coinbase recommends developing innovative email and online content services based on bitcoin micropayments. We are used to a “free” Internet where nobody has to pay, but, of course, there is no such thing as a free lunch. The price that we pay for free email is spam, and the price that we pay for free content is rampant advertising – often annoying, intrusive, and ugly – and disclosure of browsing habits to marketers. Paid models based on bitcoin micropayments could change that.

For example, email could be a pay-as-you-go service, with a small fee (say 0.1 cents) to send a message. That wouldn’t be too much of an annoyance for normal email users, while at the same time it would impose prohibitive costs to bulk email campaign and mass spamming. Similarly, web ads could be replaced by micropayments for viewing articles and videos. For example, an article or a video could be unlocked for one hour when a dedicated Bitcoin address receives a micropayment.

Micropayments are impossible to implement with traditional payment systems, because the overhead costs (transaction fees) would be too high. But the fast micropayments with low transaction fees, permitted by Bitcoin, allow the switch to alternative models for paid online content.

That would also permit creators, such as artists, fiction writers and filmmakers, to make a living with their work.

Coinbase also recommends developing applications that incentivize nodes to provide resources to communications networks, such as the Tor network or the Bitcoin blockchain itself, by rewarding participating nodes with micropayments.

Internet pioneers such as Ted Nelson, Marc Andreessen and Tim Berners-Lee thought that the Internet should have a built-in framework for micropayments. Berners-Lee tried to include micropayments in Web protocols, but the idea was never implemented.

“The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution ,” a 2014 book by Walter Isaacson, has the full story:

“In the late 1990s Berners-Lee tried to develop a micropayments system for the Web through the World Wide Web Consortium (W3C), which he headed. The idea was to devise a way to embed in a Web page the information needed to handle a small payment, which would allow different ‘electronic wallet’ services to be created by banks or entrepreneurs. It was never implemented, partly because of the changing complexity of banking regulations.”

Berners-Lee revived the effort to develop an official W3C micropayments framework in 2013. The work hasn’t been completed so far, but Bitcoin is a good solution, because sending a micropayment with Bitcoin can be as easy and immediate as clicking a button.

Isaacson reports that Andreessen mentioned Bitcoin as a good model for standard Internet payment systems. “If I had a time machine and could go back to 1993, one thing I’d do for sure would be to build in Bitcoin or some similar form of cryptocurrency,” Andreessen said.

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April 02, 2015 at 04:36PM

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Three Methods for Simple Bitcoin Business Accounting

This is a guest post from Digital Currency Council Member Marty Zigman.

Recently, I gave a webcast presentation to AICPA members to help accounting professionals understand Bitcoin and how to treat it on the general ledger. If you are an AICPA member, the webcast is available for your viewing. In this article, the key points from that presentation are outlined and will help accountants fundamentally understand and approach business based Bitcoin transactions.

Bitcoin and General Ledger Treatment

There are three key processes that ultimately produce different accounting practices and general ledger treatment when Bitcoin is involved. These three processes coincide with Bitcoin’s adoption phases as follows:

1. Payment Method


2. Foreign Currency


3. Base Currency

Bitcoin as a type of “Payment Method”

Within the context of modern accounting systems, examples of payment methods include cash, checks and credit cards. Very simply, they define the medium used to exchange money.

Today, the most common business use for Bitcoin is to treat it as a payment method. Much of the reason for this is because a) the price is relatively volatile and b) acceptance by employees, suppliers and partners is relatively limited. Services such as BitPay or Coinbase have effectively made it easy to accept bitcoin in a business. Instead of the business actually receiving bitcoin during customer payment, these services deliver traditional government-issued (fiat) currency.

Under this method, Bitcoin acceptance is easy to understand and it follows accounting practices widely used in business today (e.g., consider payment by services such as PayPal). Traditional accounting systems should have no problem under this practice. Generally, define a new payment method in the accounting software, relate it to the bank account that the funds will settle, and then follow the procedures that the Bitcoin service provider prescribes for accepting bitcoin in the business.

Bitcoin as a type of “Foreign Currency”

The next adoption wave will happen if bitcoin price volatility stabilizes and it becomes more widely accepted. Some leading-edge businesses already work in this fashion. Under this method of accounting, bitcoin is treated as a foreign currency; just as one would treat accepting Euros in a USD-based organization. To do this well, the business accounting system will need to understand foreign currency and related exchange prices. Traditional accounting platforms are designed with “currency data types” to accommodate only two decimal places. I was one of the early advocates to logically shift the bitcoin decimal place to the right by six digits and base bitcoin in micro bitcoin (µBitcoin) thus allowing it to work in common general ledger accounting systems.

Not all accounting systems allow for new foreign currency definitions — hence, if the business software is designed only for local currency, this method of accounting will not work. In addition, some accounting systems “hard code” their foreign currency references, and accountants may find this to be a limitation in their client or internal systems.

Under foreign currency accounting, a business bases its transactions in a local currency but may denominate transactions and/or accept foreign currency to conduct business. This practice is well understood in larger organizations — especially ones that transact in international trade.

Under this method of accounting, without respect for local tax regulations that demand different regulatory reporting requirements, bitcoin transactions effectively trigger both realized and unrealized gains and losses based on changing market currency exchange rates and timing differences between when transaction obligations are recognized and ultimately settled.

Finally, when bitcoin is treated as a foreign currency, the accounting software will price every single transaction relative to the base currency. With this price information in hand, a tax accountant can reconstitute the records offline to meet regulatory reporting requirements; such as the recent IRS guidelines that demands that bitcoin be treated as a property.

Bitcoin as a type of “Base Currency”

In the final adoption wave, while it may be far off, it is conceivable to see businesses deem bitcoin as the base currency and thus treat all other currencies as foreign — even the home currency. While this is simply an enhancement of the Foreign Currency treatment previously discussed, this method may be valuable for organizations that are fundamentally global and trade with customers, employees, suppliers and partners anywhere and everywhere. While, this accounting treatment will produce a different orientation and obviously introduces interesting reporting questions, if many organizations elect this method, it does represent a way to measure whether bitcoin has indeed achieved wide global acceptance.

Is Bitcoin integrated with the General Ledger today?

Companies that run NetSuite are set up to transact globally and with BTC4ERP, they have the full range of options to configure their accounting practices based on the way they see bitcoin used in their business. I witness some companies who simply seek a bitcoin price feed into their accounting system to help them with their own manual methods of accounting. Others indeed treat Bitcoin transactions as foreign currency and rely on the automatic bookkeeping and transaction coordination provided by my service. If bitcoin gains wider acceptance, I suspect we will see these accounting treatments on a wider range of accounting systems.

March 31, 2015 at 04:28PM

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Sidekik: Decentralized Video Streaming and Storage

The Sidekik app, which is accepting bitcoin in its crowdfunding campaign, is intended to bring real-time accountability to law enforcement by streaming video and audio of encounters with police to Maidsafe.

The goal is to protect the integrity of evidence.

The app, which began its second stage of crowdfunding March 9 , will do far more than just video and audio streaming. An army of attorneys is being built who will compete to be your representative if you happen to need them during an encounter with police. Sidekik seeks to connect attorneys with potential clients when they need legal representation the most.

The Sidekik team says there is an inherent power imbalance between law enforcement and civilians during these encounters, as “the vast majority of people do not know their rights well enough and tend to crumble under the pressure.”

Essential evidence also tends to be scarce, too often turning court testimony into a your-word-against-mine scenarios, which the Sidekik team believes tilts the balance of justice in favor of law enforcement.

The app is designed to gather as much relevant information as possible, including GPS location, audio and video, while calling licensed attorneys via video to deal with the encounter lawfully.

Concerns about data storage lead Martin to Maidsafe, a decentralized storage company currently in closed beta.

The value of decentralized storage

During an interview with Bitcoin Magazine, Martin expounded on the need for secure cloud storage of this sensitive information and the company’s relationship with Maidsafe.

“The concern is totally valid about having data centralized, any data,” Martin said. “It’s not just about being able to store video and making it so that whatever entity cannot hack into one server and destroy that video. It’s about a lot more than that; it is about contact lists, it’s about people’s confidential information.

“People get notices all the time from different companies that they do business with, such as credit card companies or maybe their schools, saying ‘Hey our servers got hacked, your Social Security number, your birth date, your name, someone has it,'” he said. “With Maidsafe that really is a thing of the past, there’s no more hacking that one server and grabbing all that data.”

Martin said he met Page Peterson of Maidsafe at Libertopia in San Diego last November and had his CTO Jessie Wallace talk to her about how Sidekik could use Maidsafe for the massive amounts of data that will be coming from the app.

“We’ll be storing the data on multiple secure servers, but those are centralized,” Martin said. “So we are also going to be working with Maidsafe … This is a perfect merger with them in terms of features. This way, there will not be one single place where the powers-that-be can go to and say ‘We don’t want that video released to the public.’”

What if the officer takes the phone?

The Sidekik app can also be configured to require a pin from both the user and the attorney to stop the phone from recording and streaming data once it has started.

Even if the officer takes and destroys the phone, Sidekik believes enough evidence would be gathered and stored in the cloud to show the nature of the encounter in court.

Stage of development

The first phase of funding ended late last year, enabling the development of the graphic user interface of the app, as well as feasibility studies and a blueprint of the full development of the complex software app.

Phase two, which would be funding the full development of the app, began earlier this month, and a variety of perks are available for crowdfunding supporters at Indiegogo. Those who contribute with bitcoin receive the same rewards for a contribution of 10 percent less.

To develop the app, Sidekik is working with Zco, one of the largest app development companies in the world.

March 31, 2015 at 04:09PM

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DEC_TECH Toronto with Keynote Speaker Andreas Antonopoulos: This Week on Decentral.tv

All this week, decentral.tv will be airing segments from the first Decentralized Technology (DEC_TECH) event held at MaRS Discovery District in Toronto, presented by Decentral. Held on March 17, 2015, the event drew a crowd of over 300 digital currency enthusiasts.

Monday’s segment begins with opening remarks from host Anthony Di Iorio of Decentral and Adam Nanjee of MaRS.

A series of presentations follows, beginning with Gerald Cotten, CEO of QuadrigaCX. QuadrigaCX is a Canadian exchange that recently became the first publicly traded bitcoin exchange in the world.

Henry Chan, business technology analyst from Deloitte, then speaks about the value and the potential of the blockchain, followed by Mat Cybula of Cryptiv, who talks about how tipping can act as a gateway to the world of bitcoin.

Cybula is followed by Amber Scott, Chief AML Ninja at Outlier Solutions, who discusses the changing landscape of bitcoin regulation in Canada.

Tuesday’s segment will feature a panel discussion on “Bitcoin and the Future of Payments” moderated by William Mougayar of Startup Management. Panelists include Amber Scott, Adam Nanjee, and Jeff Coleman of Kryptokit.

Tune in on Wednesday for featured speaker, Andreas M. Antonopoulos, Bitcoin evangelist and author of Mastering Bitcoin . Always entertaining and engaging, Antonopoulos spoke to the packed conference room of over 300 audience members about the inevitability of bitcoin acceptance by legacy institutions. Over the course of the two segments, Antonopoulos walks his audience through the banks’ “Seven Stages of Grief” as they come to grips with the fact that the old way of running things is coming to an end.

Decentral.tv will close out the week with two segments of follow-up questions for Antonopoulos from the audience. On Thursday and Friday’s installments, he will address topics such as scalability, security and adoption.

All episodes will air on decentral.tv at 3:00 pm EST. Past episodes will be available on the decentral.tv playlist.

March 31, 2015 at 03:28PM

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Barclays CEO: The Banking Sector Has Not Yet Felt the Full Disruptive Force of Technology, but It Will

The Wall Street Journal reports that Wall Street is exploring innovative applications of digital currencies to mainstream banking and financial issues. The recent wave of Wall Street interest in Bitcoin technology is inspired by a growing appreciation of the inevitability of radical changes in the financial industry, which is long overdue for the kind of Internet-driven cost savings that have affected other industries.

The emphasis is on efficiency and cost-effectiveness: Bitcoin technology could slash costs, cut settlement times and reduce default risks. The Journal mentions several recent digital fintech news items, including investment opportunities, announcements, acquisitions and appointments of high-profile financial professionals, reported by Bitcoin Magazine in the last few weeks.

“It’s an opportunity for Wall Street to streamline some operations that are pretty antiquated,” says Duncan Niederauer, the former chief executive of NYSE Euronext. Niederauer is now an adviser to TeraExchange, the first Commodities Futures Trading Commission-regulated Bitcoin derivatives platform.

“Not only [is Bitcoin not] a threat, it’s potentially an opportunity,” Niederauer said. “If the train’s leaving the station, you’d rather be on it and be the conductor than a bystander on the platform.”

Other high-profile banking executives worldwide express similar views: The financial industry should jump on the digital fintech bandwagon and appropriate Bitcoin technology for increased efficiency at reduced cost.

Speaking at the Morgan Stanley European Financials Conference in London, Barclays’ CEO Antony Jenkins warned the “banking sector has not yet felt the ‘full disruptive force’ of technology – but it will.” He elaborated on the growing concern among financial institutions that faster, cheaper payment systems will start to seduce their consumer and business customers in the coming years.

“In a world where growth is harder to come by,” Jenkins said, citing the ongoing cost- and jobs-cutting measures in the banking sector, “I’m more convinced than ever that costs will remain the strategic battleground for our sector over the coming years.”

Jenkins’ remarks don’t mention Bitcoin explicitly, but it’s clear that the faster and cheaper transactions permanently recorded in a public tamper-proof ledger, permitted by Bitcoin, represent a growing threat to traditional, cost-inflated banking operations.

“Apple pay doesn’t change the way payments happen,” notes Mariano Belinky, who runs Banco Santander’s $100 million venture fund Innoventures. “But it’s the blockchain-like technologies and the decentralized ledger – that will be source of real innovation.”

Belinky, who before joining Santander was a strategy adviser at McKinsey & Co., is persuaded that mainstream adoption by the financial industry is the future of digital currencies.

“Bitcoin has the wrong set of advocates and affiliates. Evangelists highlighting the anonymous, untraceable nature of the technology have tarnished its reputation. A bank won’t get involved with bitcoin if there’s a perception it has links to money laundering or terrorism,” he says. “I’m excited about Stellar, Ethereum, Ripple – the same technology but coming from a completely different angle – making payments more efficient for the financial industry.”

A recent article from Credit Suisse also underlines the potential of digital currencies to cut costs and streamline financial operations.

“When combined with the traditional financial system, bitcoins could have cost advantages over credit cards or providers such as Western Union when used as a transaction system,” notes the report.

March 30, 2015 at 03:58PM

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Houston Bitcoin Embassy Opens

Houston, we have a problem. We need more cutting edge tech entrepreneurs.

Luckily there’s a new space in Houston, Texas, built just for that, provided by Cryptospaces, which is backed by bitcoin consulting company, FinalHash. Located at 6907 Almeda Rd., the Houston Bitcoin Embassy is an incubator/ coworking space dedicated to tech startups. There are also plans to install a bitcoin ATM in the facility by the end of April.

The Embassy is home to the Texas Coinitiative, a non-profit organization that promotes the use of Bitcoin in Texas.

The Coinitiative mission statement reads:

“We believe that our growing community will help to shape progress in this field. Come network with traders, entrepreneurs and innovators working in one of the most interesting sociological and technological innovations in recent times.”

The Texas Coinitiative hosts several meetups — at least one meet-up each week — including the Houston Bitcoin meetup, an Ethereum meetup and an upcoming Houston Bit Business meetup: a meeting place specifically designed for Bitcoin entrepreneurs.

The Texas Coinitiative invites speakers once or twice a month and is always looking for new speakers. Some of the speakers they’ve recently hosted include Bitcoin Core developer, Peter Todd; Changetip CEO, Nick Sullivan; and Ziftr CEO, Bob Wilkins.

“The city of Houston is still very early in adoption phases in terms of Bitcoin,” says Adam Richard, president and co-founder of the Texas Coinitiative. “There aren’t many merchants that accept bitcoin here. We want to help grow that.”

The Embassy is also spearheading an educational project led by Jay Campuzano of Yo Soy Bitcoin , a series of educational video courses on Bitcoin for beginners in both English and Spanish.

In order to grow, the Texas Coinitiative is looking for sponsors.

“The help from sponsors,” says Richard, “will be used for anything from food and drinks for events to printing of educational materials; all for the purpose of education and inspiring others to become more involved in the Houston Bitcoin ecosystem.”

The Houston Bitcoin Embassy currently has vacancies for anyone interested in an incubation/ coworking space.

The Texas Coinitiative will have a booth at tomorrow’s upcoming Texas Bitcoin Conference. It encourages attendees to visit the booth and talk to any of its representatives there.

“We want to put Houston on the map in the Bitcoin space,” says Richard. “Houston has a lot going on that people don’t realize. There are currently 12 local Bitcoin startups in the city.”

The Houston Bitcoin Embassy is open Monday through Friday, from 9 a.m. to 5 p.m.

For more information about the Houston Bitcoin Embassy, visit their website, send them an email, or sign up to attend the Houston Bitcoin meetup at meetup.com.

March 28, 2015 at 09:22PM

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Bitrefill and Celery Make Bitcoin Remittances Easy: A Conversation With CEO Sergej Kotliar

Bitcoin airtime merchant, Bitrefill, has partnered with New York-based Bitcoin exchange Celery to enable bitcoin remittances of phone minutes to more than 100 countries – without the sender ever having to touch the digital currency.

“The integration uses all of the benefits of Bitcoin but hides the complexities from the user, just uses Bitcoin as settlement rails,” said Celery CEO IIya Subkhankulov.

The process does not require a user to buy bitcoin or handle the digital currency. Airtime purchases made from Celery’s exchange take the money straight from the person’s bank account, similar to the process of buying bitcoin.

In addition, Bitrefill is eliminating fees for airtime remittances to India. The U.S.-India corridor contributes largely to the $70 billion worth of remittances that flow into the Asian country each year.

A Proven Model

Ismail Ahmed, founder and CEO of WorldRemit, told Mobile World Live in 2014, that informal airtime remittances could make nearly half of the $40 billion worth of remittances that flow into Africa each year.

Ahmed made that comment shortly after raising $40 million from Accel Partners and others in a Series A Round, so his money transfer company could pursue airtime and other remittance services.

Airtime remittances are particularly valuable for people sending amounts of money worth under $20. According to TransferTo‘s CEO Eric Barbier, that’s the “sweet spot” for the unconventional money transfer. Remittance companies charge too much to make remittances of such a small amount possible, but airtime services’ low fees make it a viable option.

In many parts of the world, airtime minutes are not only serving as an informal money transfer system, but also as actual money. According to the Economist , in places such as Haiti, Zimbabwe and Egypt, airtime minutes are used to buy things such as gasoline, water and electricity.

According to Hannes Van Rensburg, Visa’s head of their sub-Saharan Africa division, airtime as money is particularly popular in countries where rigid regulatory schemes have made it very difficult for banks to offer new kinds of electronic money.

Even places such as Kenya, where mobile money such as M-Pesa is extremely popular, airtime as money has found a use case. Airtime minutes’ relatively stable price serves as a better store of value than the Kenyan shilling, causing people to hold airtime minutes rather than shillings.

Bitcoin’s UX Problem

A lot has been said about how non-user-friendly bitcoin can be, but according to Bitrefill CEO and co-founder, Sergej Kotliar, it’s really bad. During an interview with Bitcoin Magazine, Kotliar said users in many countries remain confused how to use bitcoin when paying for Bitrefill’s service.

“They had to be walked, step by step, through the process,” he said.

The partnership with Celery will allow users to take advantage of Bitrefill’s cheaper rates and convenience, while never having to touch the rather confusing digital currency.

After signing in, Celery users will see a “Phone Refill” feature toward the bottom of the screen. The user then chooses the amount he or she wants and clicks “Purchase.” The same amount is deducted from the customer’s bank account by Celery, which sends the order for airtime minutes to Bitrefill. The recipient receives the airtime a few seconds later.

But overcoming Bitcoin’s UX problem is just one of the steps the company is taking to reach its grander goal.

“We want to connect the worlds of prepaid and bitcoin. For bitcoin to be used by developing countries, they need to be able to spend it,” said Kotliar. “You can’t exchange bitcoin easily in the developing world, but you can spend airtime easily.”

Full-Fledged Startup

“As Westerners, we didn’t realize how much of the world used prepaid phones. It’s actually the way the majority of the world receives their phone minutes and data,” said Kotliar.

Bitrefill launched in October as a side product for its two co-founders, Kotliar and Aleksandra Derikonja. But a month after launching the service, the company received a lot of interest from the press and, subsequently, from users.

That provoked Kotliar and Derikonja to think more deeply about the prospects of bitcoin in the prepaid airtime industry. After researching the industry more, they discovered that a bitcoin-powered airtime service could solve issues of convenience, price and more.

Bitrefill is headquartered in San Mateo, California, as part of the Bitcoin startup accelerator program Boost VC. They are using the opportunity to further develop their business and to network with other Bitcoin companies.

In the upcoming year, the company will be signing deals with exchanges in Europe and then other parts of the globe. They wish to bring the same “bitcoin-in-the-background experience” to more countries around the world.

The Bitcoin airtime merchant also will be releasing an API that will allow any Bitcoin business to integrate Bitrefill into its website.

March 27, 2015 at 05:19PM

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The Bitcoin Investment Trust (BIT) Goes Live with Ticker GBTC

A few weeks ago Bitcoin Magazine reported that the Bitcoin Investment Trust (BIT) was about to become the first publicly traded Bitcoin fund. On Thursday, the BIT received formal approval for listing on the OTC Markets Group’s OTCQX exchange. The fund is listed with the symbol GBTC, and trading is expected to begin early next week.

Barry Silbert announced on Twitter that the BIT fund is live and waiting for eligible shareholders to deposit their shares and sell.

The BIT is the first product from Silbert’s new Grayscale Investments, a digital-asset management firm being launched concurrently by his Digital Currency Group. The Wall Street Journal notes that the BIT is the latest addition to the growing number of bitcoin trading platforms that aim to expand bitcoin investments beyond the volatile spot exchanges and attract a new class of investors.

Each share of BIT is worth approximately one-tenth of a bitcoin. Holders of BIT shares won’t hold bitcoin in their names, but they will hold shares of the fund, which itself holds bitcoin. Since the value of BIT shares will fluctuate with the exchange rate of bitcoin, the fund will be a convenient investment vehicle linked to bitcoin – in particular, investors will be able to short the fund and profit from drops in the price of bitcoin. The availability of traded funds linked to bitcoin and investment vehicles such as options, futures and other derivatives is expected to contribute to stabilizing the value of bitcoin.

The BIT skipped the lengthy SEC registration process by taking a shortcut approved by the Financial Industry Regulatory Authority (FINRA). Without SEC registration, the BIT can’t formally be considered as an Exchange Traded Fund (ETF), but other funds are seeking SEC approval for listing on the NYSE or Nasdaq. The Winklevoss twins are planning a Bitcoin Exchange Traded Fund (ETF), the Winklevoss Bitcoin Trust ETF, which will be available to investors on NASDAQ with the ticker COIN.

The BIT will open bitcoin investing up to the wider world of capital markets and traditional investors who prefer not to trade bitcoin as currency because they are scared by bitcoin’s wild price swings.

“Over the past three or four months, a handful of banks have started to experiment,” said Silbert. “Some of them are experimenting around trading, some around using the blockchain for settlement, and some are interested in deploying capital as investors.”

The Grayscale website notes that digital currencies are poised to radically transform our financial system, but it won’t happen overnight.

“At Grayscale, we believe investors deserve an established, trusted, and accountable partner that can help them navigate the gray areas of digital currency investing,” the website says. “That’s why we are building transparent, familiar investment products that facilitate access to this burgeoning asset class, and provide the springboard to invest in the new digital currency-powered ‘internet of money.’”

“The hope within the bitcoin community is that BIT and future publicly traded bitcoin investment vehicles will improve liquidity and thus help smooth out some of the price volatility that has plagued bitcoin in its early years,” notes PandoDaily. “The fact that BIT is also now a regulated entity should help calm the (justified) fears of many prospective bitcoin investors. A more stable bitcoin market is seen as being a necessary pre-condition for widespread adoption as a payment vehicle.”

Image via Grayscale Investments.

March 27, 2015 at 03:29PM

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Neteller Adds Bitcoin Funding to Prepaid Mastercards

In a surprise move, e-wallet provider and payment processor Neteller quietly started to accept bitcoin deposits at zero fees. Neteller customers will now be able to top up their accounts by exchanging Bitcoin into one of the currencies offered by Neteller.

Neteller, owned and operated by publicly traded British global payments company Optimal Payments PLC, is used by millions of consumers in more than 200 countries and especially popular in the foreign exhange and online gambling sectors.

This announcement follows the entering into of an agreement between Optimal Payments and Bitcoin payment processor BitPay.

“We recognize the important role that cryptocurrencies play in the future of payments,” said Optimal Payments President and CEO Joel Leonoff, “and we look forward to working with BitPay as the acceptance rate grows.”

“Neteller has recognized the growing strategic importance of bitcoin,” notes the BitPay website, “and we will be working with them to help further drive mainstream adoption of bitcoin.” Sonny Singh, BitPay’s chief operating officer, added that the relationship with Optimal Payments will help BitPay to drive merchant acceptance on a global scale.

A few days ago, Optimal Payments announced the forthcoming acquisition of the biggest Neteller competitor Skrill (formerly Moneybookers.) It seems therefore likely that bitcoin deposit options may be added to Skrill as well in the coming months.

Neteller, which is listed as an “Authorised Electronic Money Institution” with the U.K. government’s Financial Conduct Authority (FCA), is headquartered in the Isle of Man, a leading Bitcoin hub poised to attract digital fintech businesses, entrepreneurs and developers. The recent announcement of new Bitcoin-friendly regulations in the Isle of Man may have contributed to Neteller reversing its previous choice to block digital currency activities.

Besides paying the merchants that accept Neteller payments directly from their accounts, Neteller users have a prepaid “Net+” MasterCard that can be recharged from the wallet and used to pay all merchants that accept MasterCard, and withdraw cash from ATMs.

Two features of Neteller bitcoin deposits seem especially important.

First, Neteller is accepted by nearly all online gambling operators. Therefore, nearly all online gambling operators are able to accept bitcoin payments via Neteller. Unfortunately for gamblers based in America, current U.S. regulations against online gambling prevent Neteller from offering the service to customers based in the United States.

“All serviced countries except the United States can deposit with Bitcoin,” notes the Neteller website.

Second, all Neteller users now can link a prepaid Net+ MasterCard to their Neteller accounts, with the option to deposit bitcoin to recharge the card. In other words, Bitcoin users are suddenly able to withdraw their funds from all ATMs that accept MasterCard (read: nearly all ATMs) and pay all merchants that accept MasterCard (read: nearly all merchants), online or at points of sale. Optimal Payments’ upcoming acquisition Skrill also is a provider of prepaid debit cards.

Prepaid debit cards that can be recharged with bitcoin deposits, and therefore permit bitcoin payments anywhere, are becoming commonplace. In Australia, the CoinJar Swipe card permits spending bitcoin at most merchants and withdrawing bitcoin as cash at most ATMs. In Germany, holders of a Fidor Bank “Smart Giro Account” can sell bitcoin to other account holders, have the money instantly credited to their account, and spend or withdraw their money with their Fidor credit card, which in practice is equivalent to a card that can be recharged with bitcoin.

With the acquisition of Skrill, Neteller will be the biggest competitor of leading payment processor PayPal, which has already begun experimenting with Bitcoin.

March 26, 2015 at 05:15PM

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Designers Compete to Create Global Cryptocurrency Brand

by Jacob Donnelly on March 26, 2015 { }

Many people know the symbol of Bitcoin. Many people might know the symbol of Litecoin. Even fewer know the symbol of a Dogecoin. There are hundreds of cryptocurrencies that have been developed, but what’s the symbol for “cryptocurrency?”

Brand Me Crypto, a design contest sponsored by Vogogo and Cryptsy, is hoping that one concise brand can be created that will epitomize the true brand of cryptocurrency.

“I found myself and our designers struggling to visually articulate cryptocurrency as a whole without inundating our designs with 5+ more coins just to communicate the overarching cryptocurrency conversation and message,” said Chantel Meeley, head of marketing and creative at Vogogo.

But it wasn’t as simple as just hiring a design firm to come up with a few different concepts. It was important that Brand Me Crypto kept true to the culture that has sprung up from cryptocurrencies. As it says on its website, it needed to be “designed by the people, for the people.”

The two companies joined forces and launched the Brand Me Crypto initiative on October 28, 2014, inviting designers from around the world to submit their concepts. At the end of the contest, designers from 89 countries across five continents had submitted their ideas of what the brand should be.

The contest is now in its final stages. Five designs are being voted on from around the world. Anyone is eligible to vote on the design. More than 7,000 votes have been tallied, and voting ends on March 31, 2015 at 11:59 MDT.

The winner will receive $10,000 in USD or the cryptocurrency of their choosing as well as recognition on open creative licensing rights.

“I am excited to see that the final brand the world population selects and looking forward to having one visual identity that represents this new currency,” Meeley said.

Cast your vote today at brandmecrypto.com.

March 26, 2015 at 04:42PM

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The Future of the BitGive Foundation: Great Potential Amid Uncertainty

Over the past three days, Bitcoin Magazine has featured stories about the BitGive Foundation; how it began and the work that it has done with charities including Save the Children, The Water Project and Medic Mobile. Its founder and sole full-time staffer, Connie Gallippi, has helped the organization grow to become the first registered tax-exempt bitcoin charity, spreading the word about Bitcoin’s potential for positive change in the world.

“We’ve continuously put out great efforts,” says Gallippi, “and we have a lot of supporters who like our work. The community has been looking for ways to improve its image and reach a mainstream audience. It would be great if we could leverage what we are already doing to accomplish this goal. Our work is making a direct impact today in ways that a mainstream audience can appreciate and relate to.”

Looking forward, the BitGive Foundation has two immediate fundraising goals: its current campaign with Medic Mobile, and support for the Foundation’s own long-term viability.

Medic Mobile is an open-source platform that supports health workers in remote communities of the developing world, using mobile technology.

“Medic Mobile has a mission that connects with our Bitcoin audience,” says Gallippi. “They are giving out thousands of mobile phones in 21 developing and Third World countries to support healthcare.”

Each phone is given to a community health worker who volunteers to take care of approximately 30-50 people in a remote village. It takes hours and days for some to walk to and from the closest doctor or hospital to exchange information.

Using the phones, along with Medic Mobile’s free, open-source platforms, health workers can communicate directly with doctors, saving them from having to walk for days and the dangers that come with it. They can also register pregnancies, track disease, keep vital supplies stocked and literally save lives in the case of emergencies.

Aside from the obvious importance of Medic Mobile’s work in health care, Gallippi saw the potential for building a network of cell phones in remote parts of the world. Early conversations were about hopes that the long-term effect of the phone distribution might also allow for the creation of hubs for bitcoin transactions, bringing financial and remittance services to the unbanked populations as well.

The foundation’s second — and perhaps most pressing — campaign is to raise enough money to keep itself going so that it can continue to take on more projects in the future.

“Right now, I’m the only employee,” says Gallippi, “and the runway is very short for me to be able to stay on full-time.”

Since the inception of the BitGive Foundation in 2013, there has been support from some key founding donors, including BitPay, Perkins Coie, Jeff Garzik, and Roger Ver, to name a few. As the two-year anniversary of BitGive approaches this June, Gallippi will be wrapping up the Founding Donors campaign.

“At the beginning, there was great support,” says Gallippi. “Then the price of bitcoin dropped and things have been pretty slow.”

She is hoping that more companies and individuals will want to take advantage of the opportunity to become founding donors, who will be recognized in perpetuity for their contributions to build the first Bitcoin philanthropic organization, before the end of the campaign.

Besides becoming a founding donor, there are plenty of ways for members of the Bitcoin community contribute to the BitGive Foundation.

1. Become a member. You’ll support the BitGive Foundation’s efforts to offer charitable gifts and campaigns to organizations around the world on behalf of the Bitcoin community. You’ll also receive a T-shirt, discounts on events and a tax receipt.


2. Direct your tips to BitGive. If you have an account with ChangeTip, you have the option to automatically redirect your tips to one of several charitable organizations.


3. Engage in the Amazon Smile program when you shop on io. A donation of 0.5% of your purchase amount will be directed to the charity of your choice (at no extra cost to the purchaser), and BitGive is registered with Amazon Smile. In addition, BitGive has also secured matching donations from Bitcoin organizations. For the next few weeks, all Smile donations through Purse.io will be matched by Chain.com; those matching amounts will be directed to BitGive.


4. Make a tax-deductible donation. Companies and individuals can offset taxable gains by making a tax-deductible donation to BitGive, a registered 501c3, using LibraTax to help optimize gains/losses and make donations go further.


5. Buy a T-shirt or make a one-time donation through the BitGive Foundation website.

Gallippi’s long-term goal is for the foundation to establish an endowment that will protect the organization’s ability to operate to its full potential.

“Right now, we can only support one campaign at a time,” says Gallippi. “But there is potential for things to grow if we have the resources. For now, we have to make our choices very strategically.”

“Our goal has been to establish a global presence, and we’re doing that,” she adds. “Our stated mission is to improve public health and the environment, and we’re providing a way for companies in the Bitcoin space to give back.”

March 24, 2015 at 11:25PM

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