Daily Crypto Update: The Contradictions of Bitcoin

Well, it’s been another few contradictory days in crypto land….

The much maligned Bitcoin Foundation continues to take shots from within after it was revealed that the Foundation had attempted to release altered minutes. It wouldn’t be so laughable if one of Bitcoin’s main drawcards was transparency.

But in such a innovative industry it was inevitable that another entity would step up to the plate and attempt to represent the community in some way. Now, MIT has offered to set up a Bitcoin Standards Center. It’s the view of MIT Media Lab director Joi Ito that financial interests became involved in Bitcoin before standards were cemented.

Coupled with this, the price has sunk back down after a small rally to $250. TwoBitIdiot takes issue with those who say this is evidence of stabilisation, tweeting

“Price of has gotten boring recently. Waiting for people to say it’s a sign is stabilizing. Don’t believe these false prophets.”

But, despite this ongoing (and probably necessary) drama, the ecosystem continues to attract top talent. Rusty Russell, a Linux kerner hacker has joined the bitcoin dev club that is Blockstream.

LinkedIn founder Reid Hoffman is also a big fan, and has been for a while now. Entrepreneur magazine details the reasons why he invested in Bitcoin.

Big ecommerce players are either coming on board, like PayPal merchants, or services are adapting Bitcoin to their markets, like OneBit app that enables bitcoin payment whereever Mastercard is accepted. OneBit has followed in the footsteps of Latin America’s AdvancedCash.

There’s also a call for whole industries to adopt Bitcoin, with The Coming Poker Revolution pushing the case for wide adoption in the face of recent crippling regulation.

Interestingly, there’s also been a discernible increase in positivity in one sector of crypto, and that’s the Alt Market. Twitter has recently been abuzz with renewed ‘moon times are back’ calls in a number of Alts. Lets hope it precedes the return of the Bitcoin Bull.

Daily Crypto Update: Blockchain vs Bitcoin

The most controversial theme of Bitcoin 2.0 has been the rise of the ‘blockchain not bitcoin’ meme. The purists are offended and dismissive, the proponents resolute and over the last few days there has been a fair amount of heated discussion around the topic. Today’s update begins on the theme:

One proponent is Preston Byrne of Eris Industries who argues that anyone can create their own blockchain and a native token is unnecessary. He says that from a commercial standpoint using a blockchain as a data structure is enough. Preston makes reference to Tim Swanson’s (known Bitcoin ‘skeptic’) paper doing the rounds. Tim’s point is that institutions or companies can just pick out the best bits from Bitcoin and move on. American Banker also wrote about the ‘cherry picking’.

Andreas recently had a lengthy Twitter debate with Byrne. The purists all say that without a native token to secure & incentivise the blockchain there is no decentralisation, no trustless transfer. That is pretty much my take as well; without the decentralised distributed ledger you need to place trust in a Third Party.

One company that may not be spouting the bankster line in regards to the blockchain is Microsoft. They’ve applied for money transmission licenses in all US states. Do they plan on going head to head with ApplePay as a payments platform or is this part of the long term strategy they mentioned when they began accepting bitcoin? Certainly seems like a forward thinking move…

Bitcoin itself is of course a forward thinking technology, but the Bitcoin Foundation certainly didn’t plan ahead effectively. The accusations have been flying and BitJourno of the year, TwoBitIdiot, has penned a piece calling for the dismantling of the BCF, which he believes he should have pushed ahead with last year

So it would be fair to say that the crypto industry is going through some changes. It’s political and many purely see a profit motive. Not altogether unlike every other industry on earth – but does it need to be this way? BraveTheWorld’s scathing video ‘Bitcoin Is Not A Honey Badger’ doesn’t hold back and it makes healthy, sobering viewing

Overstock.com continues to push Bitcoin’s barrow. Their Director of Communications reckons Bitcoin only sales & discounts are coming soon

Mining manufacturer BitMine AG is facing multiple lawsuits from customers

Speaking of Bitcoin and crime (then adding the fact that prohibition doesn’t work), here’s Info Wars discussing the discrepancies of the Silk Road trial with Ross’s mother, Lynn.

Bitcoin is forcing us to consider that all Intel processors may be compromised by the NSA.

But back to the nuts and bolts. It is very difficult almost everybody to understand, but here’s a short vid on Bitcoin’s Cryptographic Hash Function

Erik Vorhees Shapeshift.io platform has integrated Monero And Counterparty

Jamie Dimon has spoken of the next financial crisis in his letter to shareholders. He points out that investors generally behave in the same ways in times of turmoil; one wonders if Bitcoin will be an asset institutions and individuals alike flock to in the search for safety accelerated by any crisis.

The IMF has made a 2.5bn Euro profit on its loans to Greece since 2010.

Daily Crypto Update: Bitcoin Foundation Survival Plan

In a leak reminiscent of the famous Gox leak of early 2014, Bitcoin Magazine has published this ‘Bitcoin Foundation survival proposal’, that shows just how much money the Foundation has haemorrhaged over the last few years. The one saving grace among a depressing read is that revenue is starting to turn the corner.

As a response to the firestarter of a forum post by Olivier Janssen, the Bitcoin Foundation has released its official response.

A profile on Coinbase. They seem to be on a bit of a publicity drive of late, with this (wouldn’t look out of place as a Vanity Fair feature) following news that the company is working with regulators to open an exchange in the UK. Two good takeaways: Coinbase don’t mind focusing on centralised services (ie security for consumers), and they’ll focus on products before mainstream advertising, although the latter is coming.

No Blockchain For You! William Dunne goes all Seinfeld in showing that Bitcoin is the real saviour and the Blockchain isn’t necessary for all and sundry.

The HuffPost asks if micro tipping via crypto can change the way we view media?

It’s definitely a trend: Factom hires Morgan Chase manager (who also runs a paper wallet company).

Coinapult has reopened after a recent hot wallet hack. No word as yet on result of investigation. My take is that hackers are stealing ever smaller piles of loot as exchanges and companies  transition to better (not best…yet) security practices.

Fancy yourself as a policy maker? Marco Santori has just the Bitcoin rundown for you.

UPDATE: The Reserve Bank of Australia has released a statement saying that they do not see a need to regulate cryptocurrencies at this stage. Finally a sensible move in Australia after the double GST scenario tried to kill off the industry….

Daily Crypto Update: Wall St positioning continues

There’s been another glut of news released today, most of it following the recent positive trend.

The WSJ states the obvious with ‘Big Investor Involvement Could Boost Bitcoin’. Penned by Bitcoin author Michael Casey it comments on the number of proprietary traders and investors continuing to dip their toes in the cryptocurrency waters. DRW Holdings, Citadel Securities etc may not be known outside of financial circles but their grasp of high speed trading and investment potential may help to boost the price and reduce bitcoin’s famous volatility. Over at leaprate.com they correlate these financial firms involvement with the steadying of the bitcoin price.

(remember: to beat the paywall, copy/paste the headline into a search engine and access it that way)

Bank of New York Mellon is also playing around with crypto, having spent a few months developing a blockchain based application for staff. It may develop into a rewards style program with the benefit being that employees familiarise themselves with Bitcoin in the process. Funnily enough, the senior developer’s biggest hurdle was getting used to Bitcoin’s (decentralised) architecture.

But while bigger firms are testing the waters some of the smaller players already in the space are being forced out. Coindesk today reported that Buttercoin, the $1.3m funded US exchange, is shutting its doors due to lack of VC investment. My thoughts are firstly, being a US exchange is currently very difficult and secondly, exchanges need to have high volume & plenty in the coffers due to fee competitiveness.

Its the regulatory shadow that hovers over the US that so affects the market. For such a global platform like Bitcoin, it doesn’t make sense to stick it out in the US unless you have the capacity to serve the big boys. As the NYDFS drags on, California has drafted a bill designed to regulate Bitcoin businesses in the state. The backlash has started as the bill would criminalize trading without a license. 

Meanwhile, there’s quite a play being made in Japan, with Quoine aiming to dominate the market after the Mt Gox fiasco. With 6,000 clients and former employees of Merrill Lynch, Credit Suisse, UPS and HSBC onboard, things are looking up.

Over in India the scene is also growing and firms are looking to tie up the burgeoning market. Here’s an interview with Coinsecure

If anyone new to Bitcoin is reading this, CoinTelegraph have written up an easy to explain beginners guide to the understanding the Bitcoin ecosystem.

Jeff Garzik wants to integrate OP_CHECKLOCKTIMEVERIFY into bitcoin. Check out BIP 65 on github.

How to generate a bitcoin address on a calculator

Bitcoin will not be adopted but forced upon you. By Pierre Rochard.

The DarkNet, in particular drug sites Middle Earth and Agora, have been under attack over the past few weeks. Both sites are being DDo’S attacked, possibly from an hence unknown TOR exploit.

Larry Summers thinks the US may have lost its gatekeeper to the global economy role

Daily Crypto Update: The BCF is bankrupt, Bryce Weiner, Venmo, 2FA.

You’re at the forefront of a major computing breakthrough. You’re well funded. You’re a group of intelligent people; lawyers, innovators, tech guys, entrepreneurs.

How does it get so f#cked up?

That is the question everybody in the Bitcoin community is asking right now, if they hadn’t been asking it before. Some, like Cody Wilson, have for a long time declared your irrelevance. But now, with the publication of ‘The Truth About The Bitcoin Foundation’ by recent Bitcoin Foundation elect Oliver Janssens, it looks as if TBF is on its last legs; near bankrupt, mismanaged, bereft of ideas and lacking direction. But, it must be said, things seem awfully political and the fallout from this post will be felt for a while to come.

UPDATE: Here’s Olivier’s original post on the foundations forum. The comments section contains Gavin’s views as well as a response from Patrick

From CoinReport comes this profile of one of the crypto community’s most polarising figures, Bryce Weiner. He’s Change-Tipped ISIS, dev’d a bunch of coins, worked at BlockTech, been a frequent podcast guest and participated in many Twitter flame wars.

CoinTelegraph article on security being more than a password. The ‘Go-Figure’ stat: only 27% of users enable 2FA if they are not forced to by a service. This is really a sign of an industry that as not yet matured. Until 2FA, multisig etc are industry standard and normalised, people / exchanges will continue to be hacked. Slowly but surely……. PSA – This is Bitcoin, Secure Your Shit.

A Columbia University student has been arrested for selling drugs on campus and accepting payment using Venmo. Pretty hilarious in a how-dumb-could-you-be-way. The student allegedly even wrote an op-ed piece in the university paper.

Mobilepaymentstoday.com asks ‘What is this Bitcoin thing?’

Daily Crypto Update: B2B, Forbes takes Andreas’ lead & Bitcoin community backs Snowden

For mine, it seems like the initial big wave of publicity from the Dec-Jan 2014 price spike and the subsequent dramas surrounding Gox is finally bearing fruit. All those headlines put Bitcoin in the view of millions worldwide. Now, after a year of figuring out specific beneficial use cases, many companies are announcing their first forays into blockchain tech.

The big news coming down today is that AlignCommerce is to begin offering B2B payments using the blockchain. Their reasoning? Fees, transparency and speed. This is another morsel in the fleshing out of the Bitcoin economy; business to business is huge and doesn’t rely on speculation or adoption etc. It’s just an efficient way to conduct business.

One of those business leaders that has come around to Bitcoin is Steve Forbes himself. He announced today that Bitcoin could end world poverty. While the headline may seem like just another wild statement, the reasoning behind it (that mobile marketplace penetration is set to allow billions more access to finance) isn’t so pie in the sky; it’s something Andreas has been on about for a few years now.

BitPay continues to impress. The company noticed that the open source community had created several libraries for their API in Google’s ‘Go’ language, however some hadn’t used the cryptographically secure BitPay API. So, BitPay worked on it and integrated better access to the secure version.

Kristov Atlas writes an interesting piece on the re-using of usernames and account compromise.

Continuing with the ‘Blockchain not Bitcoin’ theme from yesterday, here’s a very well written and intelligent takedown of the current prevailing meme

The Obama administration effectively made donating to Ed Snowden illegal. The Bitcoin community responded with over 200 unique donations to his Bitcoin address.

Pirate Party founder and Bitcoin early adopter Rick Falkvinge gives a Tedx talk on Spoilers: Bitcoin, the Blockchain, power struggles and a timeframe for mass adoption. A more in depth talk by Rick, including his very cool story of getting into Bitcoin, can be found here

It seems like everyday the DEA / Silk Road story gets better. Today it emerged that Carl Force had a ‘go bag’ of guns, cash and a passport to be used as a spy novel escape tool. He’d also set up an escape plan for DPR.

TechCrunch says ‘the majority of the population is yet to board the Bitcoin bandwagon’.

The likeable David Seaman on Bitcoin as the purest form of money.

Back in 2010 someone created over 180 million bitcoin in the only major security exploitation in Bitcoin’s history via @TuurDemeester

CNBC’s Brian Kelly is still going ahead with his alt-coin NautilusCoin. They’re planning to focus the coin on servicing a few specific industries.

A convicted felon has been arrested trying to buy a gun from a Darknet site. The fact that he used bitcoin to pay loosely connects this with Bitcoin, but really, the worry is buying the unregistered gun.

Paybase is screwed. It’s shutting down permanently. And then there’s the SEC subpoena…..

Japan has admitted fabricating its wage grows stats. While global inflation has reached a 5 year low

Daily Crypto Update – The tide turns, the taxes toll, the fees drop.

Like Star Wars, the saga continues.

Big story of the day is that it may soon be possible to pay your taxes and fees with bitcoin. New Hampshire and Utah currently have bills up for consideration, as does New York that would not only enable this, but also give Bitcoin credibility in the eyes of the public. Not that math needs credibility, but you know what I mean. And hey, it may even boost the price.

Back with DPR again, and Motherboard goes a way to understanding Why evidence of government corruption was suppressed in the Silk Road trial.

Bitcoin heavyweight Jerry Brito has also weighed in on the trials and tribulations of the case, pointing out that government corruption shows how law enforcement uses Bitcoin

Some seemingly asinine sounding institution, the Financial Action TaskForce (FATF), has proposed treating Bitcoin businesses with some modicum of respect. It has floated the idea of treating cryptocurrencies on an individual basis in regards to Anti Money Laundering regulations, after noticing that banks have so far neglected Bitcoin businesses, a stance that has led many to operate in the underground economy.

Scientific American has published an article on the breaking out of the Bitcoin blockchain. Tweeted out via @beautyon, his take is that it represents another sneaky direction change in the ‘Blockchain not Bitcoin’ narrative.

@johnnybitcoin tweeted out a cool link – Now you can use Trezor on your Android device. This is another bitcoin troll argument debunked. Excellent work from the Trezor team – no more hacked phone wallets.

Why Bitcoin matters to computer scientists. A Stanford talk on why away from the hype and drama of daily markets, Bitcoin is exciting a new generation….via @cypherdoc2

Swiss giant UBS plans to open a blockchain research lab in London. They think that the blockchain has the potential to “not only change the way we do payments but it will change the whole trading and settlement topic”.

Funnily enough London, known for its loose regulatory environment, apparently has too stringent banking regulations. At least according to a recent PWC survy.

itBit has announced a fee reduction in its USD withdrawal for international transfers, from $30 to $15. The payment & remittance space is getting extra competitive.

The US Govt has decided if you donate money to Edward Snowden, you may be liable to forfeit all your assets.

Interesting piece on the future of Bitcoin in a world of government backed digital currencies – drawing from Mish Shedlock’s article on how the move to ban cash and transition to fully tracked digital currencies may destroy Bitcoin

Iceland, the little country that could, plans to restrict its commercial banks ability to print money (by creating lines of credit etc), leaving the job solely with the central bank.