Overview

This summer, my family decided to add a bitcoin-only twist to our annual trip to New Hampshire for the Porcupine Freedom Festival (PorcFest). We had no clue if cross country travel on bitcoin was possible, but our love for adventure and crypto currency inspired us to find out. Last year we challenged ourselves to spend no Federal Reserve Notes (FRNs) at Porcfest, and it was a smash success. We used silver, bitcoin, and barter for food, childcare and other needs during the festival. At the time, a bitcoin was worth around $20.

During the course of the past year, we watched Bitcoin grow from an obscure form of barter into a major global economic player. Currently a bitcoin is worth over $600. The currency had spiked in value so much in the past year that it has been considered the best investment of 2013. This drastic rise in value created a burst of innovative and creative ways to utilize it. We felt the time was right to attempt an experimental journey.

Preparing for the Journey

My first and most tedious task was to figure how to pay for gasoline with bitcoin along the 4,400 mile journey. I was introduced to a company called CoinFueled that allows you to purchase gift cards for major gasoline providers with bitcoin. I sat at a computer for hours mapping out each stop and calculating how much gas we would need to pump in each city.  I decided we needed to purchase $500 in ExxonMobil gift cards and $300 in BP gift cards.  We later discovered the massive amount of vendor items in our trunk and the tent on our roof created a major miscalculation in gas mileage.

Nonetheless, our gift cards arrived via FedEx just days before our departure. The service requires a two week processing time, so it is important to plan way in advance if you want to plan a bitcoin-only road trip. As technology evolves and more companies begin to accept bitcoin directly, this time factor will change. Eventually we can expect to pay for gasoline directly with bitcoin. For now, in the days of early adoption, bitcoin travel requires great logistical forethought.

Traveling with two toddlers requires lots of snacks and activities for the car. I decided to order our favorite organic treats in bulk from Amazon. While Amazon does not accept bitcoin directly, you can purchase gift cards through a service called Gyft. I selected a wide variety of snacks, a new stroller with two reclining chairs, and two removable car seat activity trays to be delivered before we left. Unfortunately, the activity trays did not arrive on time and I had to arrange to have these items forwarded to our fourth stop along the journey, the Bitcoin in the Beltway Conference in Washington, D.C.

Texas to D.C.

When we left our apartment the morning of June 16th, I was truly a walking zombie from our all night car loading marathon that lasted until the wee hours of the morning. We pumped our first tank of gas with our CoinFueled gift cards and took off toward our first destination, Baton Rouge, Louisiana. Before we got out of town, we realized our car charger adapter had been left in the loaner car our dealer had given us while they did pre-trip maintenance on our minivan. I was live blogging the trip from my tablet and absolutely needed the adapter to maintain enough power to keep a lively blog pace. This required a detour to a local Target so we could purchase a new one with a Target gift card purchased with bitcoin through Gyft.

As we plowed east we relied heavily on Gyft for our food and hotel purchases. We enjoyed several stops at Whole Foods for lunch and groceries, dinner at restaurants like Logan’s Roadhouse, and hotels in Baton Rouge and Atlanta through GlobalHotelCard.com. Our first stressful moment on the road happened in Mobile, Alabama. We arrived at a TGI Friday’s that no longer existed. We then sat in the car with two hungry toddlers while we searched for another restaurant we could eat at through Gyft. Once we arrived at Applebee’s, our daughter had fallen asleep and our son was incredibly slap happy. My husband John and I were exhausted and grumpy, but decided to roll with the punches and accept the obstacles as they came.

Before we left Atlanta we decided to spend some time at the BitPay Headquarters. BitPay is a bitcoin payment processor for companies like Gyft. They allow merchants to easily accept bitcoin as a payment option, even allowing them to immediately convert all or part of the bitcoin payment into cash. BitPay has grown so much in the past year that they had to move to a new space and have opened additional offices around the globe. Their Atlanta office was bright and full of positive energy. We were welcomed by the staff and showered with BitPay merchandise. Our family enjoyed a catered lunch as we sat in awe of the successful Bitcoin business.

Our next stop was in Asheville, North Carolina where we conducted a screening of our reality show, Sovereign Living, for some participants in the Blue Ridge Liberty Project. These folks are trying to attract like-minded people to move to the area and are passionate about peaceful parenting and voluntary living. We really connected with this crew and felt heartbroken to part ways as we left for the night. We decided to branch out and try using Expedia to book our hotel directly with bitcoin. This ended up being a major mistake and resulted in a cascading debacle of problems and failed solutions. We later learned that CoinBase, a bitcoin payment processor similar to BitPay, had servers go down at the exact time we had booked our room, which led to our initial problems that night. While we had a very constructive conversation with management at Expedia later in our journey, it did not make our late night arrival to our Asheville hotel any easier on our family.

We finally arrived in Washington, D.C. where we were able to spend three days in one place. The conference was a wonderful opportunity for us to share our “uncoinventional” experiences to date. I spent little time at the actual conference and decided to take the kids to as many free or bitcoin-friendly events in D.C. as possible. This meant running the fountains and watching Legally Blonde II in a nearby park. We were even able to to pay bitcoin directly for lunch at a local D.C. establishment called Thomas Fooleries. The wonderful young man behind the counter did have to call his boss to make sure the payment had gone through. John initially sent the wrong amount, so good thing he checked.  We suggested they set up their business with BitPay so they could send an invoice directly with the exact amount.

It was in D.C. that we realized our gas calculations were off. We decided to order another gas card from CoinFueled and have it shipped to our campsite at Porcfest. Dante rushed the order, which allowed us to receive the card in time for our return journey home.

D.C. through Porcfest

During our trip we had changed our route to include New York City, so we could stay at the Holiday Inn Express in Brooklyn. This hotel recently decided to launch a bitcoin pilot program, and they were excited to have us as their first guests. While we were at the Bitcoin in the Beltway Conference, we were also invited to screen the bitcoin episode of Sovereign Living at the New York City Bitcoin Center.

As we drove to New York, a city we had not initially planned to visit during our trip, we were confronted with a major obstacle: toll roads. Had we considered this in our initial planning phases, we may have been able to work out a “proxy,” or someone who could buy us a toll pass with cash and have us reimburse them in BTC. Because we made a mid-trip decision, we were not able to make our new destination purely on bitcoin. We spent our first FRNs as we discussed innovative ways the Bitcoin community could get around this obstacle to bitcoin-only travel.

We arrived late at night to the Brooklyn Holiday Inn Express and easily made payment with bitcoin through BitPay. That morning we had several media interviews, then took off with our friend, Danny Panzella of TruthSquad.tv, and his son for lunch at a bitcoin-friendly restaurant in Brooklyn.

The woman behind the bar knew we were coming, but after our meal was complete, she was not actually prepared to take our bitcoin payment. John spent over 20 minutes on the phone with the owner trying to figure it all out. He eventually received a CoinBase invoice, and pushed the “Pay Invoice” button. To his surprise it automatically took the BTC from our nonprofit CoinBase account, which was not what John had intended to do. Thankfully, we had received donations specifically for this trip in that account, so it worked out fine. Be aware that this quirk exists – when you get the invoice via email and select “Pay Invoice,” it does not give you further payment options if you are logged into any account.

After a full day of walking through the streets of Brooklyn and playing in the park, we hopped on a subway. The subway pass had been purchased with cash by Charlie Shrem, an infamous Bitcoin advocate, who we paid back in bitcoin. We had to use a proxy several more times on this trip when bitcoin payment was not an option.

We made it to the NYC Bitcoin Center and simply stood in awe of the facility and community they have brought together. Just a half block from the Wall Street Trading floor, the Bitcoin Center was a symbol of freedom from corporate and government manipulation.  We conducted our screening as our children slept in the stroller, and John was able to ring the bell for the bitcoin trading floor. We ducked out early to grab a bite to eat at TGI Friday’s using Gyft, then to pick up our car so we could head into Massachusetts for some rest before we arrived in New Hampshire for PorcFest. If we had known how long our night was about to be, we would have stayed another night at the Brooklyn Holiday Inn.

After we got off the subway, we had about six more blocks to walk on foot. John noticed a tall blonde turn the corner ahead of us followed by a male in a white t-shirt. John got a bad feeling and told me to stop when we reached the crossroads. We stood and watched as the man began to run, then grabbed the woman, and ran off with something in his hands. I ran to her asking if she was OK. She was shaking and crying, totally terrified, but unhurt. He had stolen her phone just three buildings from her destination. We called the police at her request and escorted her to her boyfriend’s house. We sat with her until the police arrived, then continued the remaining three blocks of our journey. We discussed the importance of looking up while walking in public places, something I had not been doing as I updated our live blog from my tablet. We loaded our sleeping babies into the car and took off on the next leg of our destination.

This begins the next segment of our saga with Expedia. They had offered us a travel voucher to make up for our bad experience in Asheville. It wasn’t properly applied to our account, and we spent many long hours on the phone being shuffled from one customer service representative to another. Eventually, they applied the travel voucher, found us a room in Massachusetts, then told us we could not pay the remaining balance in bitcoin due to a flaw in their current system. We then tried to book the hotel directly on their website, but it was after midnight and their system would not let us book a hotel for that night. In tears we paid the $21 remaining balance with our credit card, an amount they would later refund after I published an article titled “Our Nightmarish Experience Using bitcoin on Expedia.”

This ordeal lasted until 3:00 a.m. Thankfully our children slept through it all. The late night required a late morning, which resulted in me missing the Women in Bitcoin panel I had organized and was supposed to moderate at Porcfest. Thankfully, the show went on, and Stephanie Murphy of Let’s Talk Bitcoin moderated in my place.

When we arrived at PorcFest, we were about eight hours behind schedule. This meant we had to race the clock to have our vendor and personal tents set up before dusk. We had our first bitcoin dinner from a vendor on site and settled into what we thought would be a relaxing week of vending and playing with our kids.

Wrong. John and I had purchased a SkyHook bitcoin ATM at the conference in D.C. Our brilliant idea was to have the ATM set up at our site to attract customers and provide them easy access to bitcoin. This was our first year with a campsite at the very bottom of the hill, and we were not prepared for the lack of internet connectivity. Here is one of the major flaws of the Bitcoin ecosystem: it is highly dependent on having an Internet connection.

Basically, John spent the first three days staring at this ATM trying to figure out how to keep an internet connection. We paid for the net through the campground; it didn’t work.  We paid through a hot spot service offered by another vendor; it didn’t work. We tried tethering our own phones, tethering other people’s phones, sharing other people’s hotspots, but nothing remained stable until Ruben, the Editor of Bitcoin Magazine, showed up with a Verizon Internet hotspot that he set up right next to the machine.

While John fiddled with the machine, I tried to balance watching the kids and vending our other bitcoin-centric items.  It simply was not a pleasant experience for me at all. By the time we actually had an internet connection, the campers at the event had figured out there were other ATMs with better internet and simply bypassed our booth when it came to bitcoin purchases. The rain didn’t help, either.

I ended up missing the second panel I was supposed to be on because my daughter burned her fingers just minutes before it was supposed to start. Because of the rain, we had invited some friends to vend their hot food in our 30-ft long covered tent. This may not have been the most brilliant idea in hindsight for two reasons. First, their power usage kept shorting out the power strip and killing our bitcoin ATM, causing our connectivity issues to worsen.  And second, because we have two toddlers that we now had to watch around hot cookware.  Case in point, our daughter climbed up on the picnic table and touched their hotplate, causing three second-degree burns on her fingers.

I opted to watch the Bitcoin Magazine panel from the audience while comforting my daughter. My husband, John, was on the panel and did a really great job. The audience was very engaged and asked lots of great questions about Bitcoin and the magazine itself. Afterward Bitcoin Magazine hosted a beer keg party that allowed the readers and writers to mingle and get to know each other.

By the time the event was over, I was actually excited to leave. Porcfest is one of my favorite places to be every year, but this year’s Bitcoin ATM / vending experience had tainted it in many ways.

New Hampshire back to Texas

The two days after Porcfest were a much-needed break. We stayed with some friends in southern New Hampshire that John had met through activism in previous years. They always put us up and treat us like family. They took us to breakfast both mornings and refused repayment, not only in bitcoin, but of any sort. They also cooked us very wonderful dinners the two nights we were there. When we took off for the next leg of our trip, we felt replenished and rejuvenated.

This marked the beginning of the more relaxing and stress-free portion of our journey. By now we had figured out many of the quirks involved with bitcoin travel and felt confident in what we were doing. At this point, we decided to make another change to our travel plans: instead of a stay in Erie, Pennsylvania, we were going to stay in Cleveland Heights, Ohio.

This change was inspired by the founder of Bitcoin Boulevard US, Nikhil Chand, when he sent me a tweet asking if we were going to stop and see what they had built. We immediately changed our plans so we could stay a night and experience their thriving bitcoin economy. We drove a full day to Buffalo, New York, where we booked a hotel directly with bitcoin through CheapAir.com. That night I published my article on Expedia, and by morning it was blasting all over the interwebs. We spent the morning at Niagara Falls, then took off for Ohio. When I opened my tablet, I found that Expedia and CoinBase had contacted me to discuss the issues we had with their services on the road.

We had very productive conversations with both businesses as we drove west toward our next stop. We discussed the need for a call center training curriculum on Bitcoin, and I linked the two of them up to help make this happen. Expedia returned our $21 and gave us a $200 travel credit we would later use in Saint Louis. We also scheduled an interview for John’s podcast that I could use as a basis for a follow-up article on the solutions we found together.

When we arrived in Ohio, we were feeling empowered and excited to experience what they had created in Cleveland Heights. Nikhil and his wife Rebecca, were waiting for us in their driveway with their dog when we arrived. They warmly greeted us, then we all walked a few blocks to our dinner destination, The Travel Co. We talked to a reporter from an Ohio publication and enjoyed one of the best meals we had experienced on the trip.

John easily paid for the meal with bitcoin through BitPay, but Ohio regulations do not allow bitcoin purchases for alcohol. Because of this, John paid for all the food with BTC, and Nikhil paid for all the booze with cash. Our children were totally insane the entire meal, and I felt so bad for the other customers. I took them out early for a stroll down the Bitcoin Boulevard before we all reconvened at SweetieFry, a delicious homemade ice cream shop that also accepts bitcoin through BitPay.

The next morning we stopped at the Katz Club for breakfast. This was hands down the best breakfast I have ever had. Locally sourced meats and produce accompanied a variety of gluten free options. This is not a cheap place to eat, but it is worth every penny. They easily accepted payment in bitcoin through BitPay, and then we were on our way to St. Louis.

We decided to use our $200 travel voucher from Expedia on a hotel that was across the street from the Saint Louis Arch. A buffet breakfast was included with the room, then we made a quick visit to the Arch before we left for our next destination of Kansas City. We were on a tight time crunch so we could see my father play the clarinet in the Parkville Community Symphonic Band for the Fourth of July. We decided to get lunch on the go through Menufy, a service that allows you to order carry out or delivery meals online with the option to pay in bitcoin. We picked up our food in Columbia, Missouri, and had a picnic lunch in the quad of my Alma Mater, the University of Missouri. We decided to add a quick Target stop on Gyft to get a picnic dinner to eat during the fireworks and to buy some clean clothes as we had not packed for this leg of the trip very well.

We arrived at the concert in the middle of the first song. We enjoyed listening to the band play, then spent quality time with Grandma and Grandpa waiting for the fireworks display.  The next days were filled with friends and family. My mother served as a proxy for us several times, getting us into a swimming pool, buying us breakfast, and pumping gas for us when our last gas card ran out. We returned the favor by buying her a meal at T Rex with a gift card we bought on Gyft. I went to happy hour at On the Border with a friend from high school, and we bought our drinks with bitcoin through EGifter. Because I didn’t have a bitcoin wallet on my tablet, I emailed the total to my husband and he bought the gift card for us. It was simple and easy, yet not your typical method of making payment! Because we ran out of gas gift cards when we arrived in Kansas City, my mom bought us a $100 card the morning we left, and we are sending her one through CoinFueled to replace it.

Our last stop on our journey was a hotel in Texarkana, Arkansas. We decided to give Expedia one last chance as we still had a $50 travel voucher through them. No matter what hotel we selected, not a single one had the option to pay in bitcoin. They had explained to us on the phone that some states have different laws, so we tried the Texas and the Arkansas side. After about 40 minutes of trying to use Expedia again, we decided to go with CheapAir.com. It took about three minutes to find a room and book the hotel through their service.

On our last day of travel we stopped at a restaurant in Dallas owned by a friend, a delicious cajun music joint called The Free Man. They don’t technically accept bitcoin, but his t-shirt business does. He worked with his wife to send us a CoinBase invoice, and we enjoyed our last meal on the road by paying directly with bitcoin. When we arrived home it felt like a dream. We picked up our cats and ordered Chinese food before we snuggled into our beds.

Overall the experience was great. We learned firsthand the practicality of travel on bitcoin and look forward to trying it again next year. By then technology will have evolved and more places will be accepting bitcoin directly as a form of payment. We found applications like Gyft to be extremely convenient and plan to use them in our everyday lives. Since we returned home we were able to set our office landlord up to receive bitcoin through BitPay and found out our favorite coffee shop set up BitPay during our trip. Our apartment landlord said he is about to start accepting bitcoin as well!

It’s been said that sending an email is like sending a postcard—you should assume that it’s viewable by many others. While this is true, it’s only true because trusted third parties—that is, the email providers—have been discovered to either be viewing message contents themselves, or revealing them to additional third parties (e.g. governments or advertisers). It’s a classic result of the “problem of trust.”

For those of us who value privacy (and privacy isn’t just for people with “something to hide”), it’s become necessary to go one step further in our communication: encryption.

Cryptography is a mathematical process, and it’s one of the features that makes the Bitcoin blockchain secure against attackers. In addition to the blockchain, cryptography can also be used to secure the contents of a simple message. If you know what a Bitcoin payment address looks like, then you know what an encrypted message looks like: gibberish (also called “cyphertext”).

The encryption of emails, however, is notoriously difficult. In fact, it’s been reported that when Edward Snowden was preparing to send his leaked NSA documents to The Guardian, he first had to make a 12-minute instructional video on email encryption for recipient Glenn Greenwald.

Private communication is beholden to the “network effect”—that is, the more people who use it, the more valuable it is (just like Bitcoin). When trying to communicate securely, you’re not likely to get many takers if you and everyone you know have to be confused by a 12-minute video first. That’s where far easier to use encrypted chat apps come in.

An explanation of my review criteria:

Open Source: Ideally, an encrypted chat app (or any software, for that matter) will be completely open source. This means that all the code used in the program is published and available for review and even improvement. This is also the only way to ensure that a given program really does what it claims to do and nothing more. It’s the only way to ensure that there are no “backdoors” in the software. Backdoors are pieces of code that would allow the developers to access your private information without your knowledge.

Information Required: You may know the feeling—you make it all the way through a website with a single goal, only to get “infowalled”: you’re required to create an account and give a bunch of personal information before proceeding. It’s annoying and decidedly non-private.

Peer-to-Peer: Part of the beauty and strength of peer-to-peer software is that it removes a central server as a single point of failure (or corruption). Bitcoin and all cryptocurrencies are peer-to-peer, and some encrypted chat apps are, as well.

Here are the (current) best and brightest in encrypted chat apps (click table to enlarge):

[Gliph, Telegram, Bitmessage, Tox, TorChat, TextSecure, surespot]

As a final note, it’s worth mentioning that there is also an encryption protocol called OTR (Off-The-Record), which can be applied to several popular instant messaging clients including Facebook and Google Talk. There are many providers of OTR.

So stop sending all your messages on the equivalent of postcards. Download an app or two listed above, tell all your associates about it, and take back the joy that is unobserved human communication.

Oh, and did I mention? All of these apps are free.

Wardyński & Partners_Virtual currency_report summary_July 2014

Whenever you hear, “That currency is not backed by anything!,” it’s almost always meant as criticism. Hard-money enthusiasts are quick to point out the horrible track record of fiat currency. Nearly without fail, currencies “backed by nothing” get heavily devalued through inflation, and they often collapse within decades.

The best solution, so far, has been to tie currency to a commodity whose supply can not be arbitrarily inflated by governments or central banks, or to use that commodity directly as a currency. Gold and silver have served this purpose best, and they have been used successfully for millennia. Backing any currency in precious metals restrains the possibility for inflation.

But, when we look deeper, the connection between being “unbacked” and being at risk for inflation is not a necessary connection. It’s a reasonable connection to make, especially given the history of fiat currency, but it’s conceivable to think of a currency which is inflation-proof and not backed by anything. It might sound fanciful, but thanks to Satoshi Nakamoto, it’s not just possible – it currently exists, and it’s called “Bitcoin.”

Bitcoin is not backed by anything; you can’t “redeem” your Bitcoin for gold at a bank. And it’s not even “backed” by declaration of law. To hard-money folks like myself, that sounds like a recipe for inflationary disaster. But, as implausible as it sounds, Bitcoin is not susceptible to arbitrary inflation. It was intentionally designed this way.

Inflation ultimately happens for one reason: central control over the power to create new money – whether it’s a government trying to pay its debts, or a central bank trying to ease monetary policy. This is one reason why Bitcoin avoids arbitrary inflation: its supply is not controlled by any central authority. The supply is regulated by software and mathematics, not politics. Power in the Bitcoin world is decentralized over an enormous network of computers.

In fact, the software is so precise, we can predict a hundred years into the future almost exactly how many bitcoin will be in existence. You can’t say that about any other currency which is “not backed by anything.”

But it’s not only the production of Bitcoin which is decentralized; it’s also their record of ownership. Every single Bitcoin which has ever been created can be traced back to its inception – including every transaction and change of ownership. This ledger, called “the blockchain,” is publicly viewable, and it is practically set in stone. The ledger is not stored on a central server; it’s not controlled by a few gatekeepers. It is stored on every single computer serving as a node around the entire globe. I’d suggest there’s nothing else you can own which comes with such a clear proof of ownership.

All put together, this means you can’t forge Bitcoin records; you can’t fake ownership; and you can’t create new Bitcoin out of thin air. And it’s all possible through complex mathematics – no trust in a third party, government or corporation is required. In a sense, if Bitcoin is backed by anything, it’s backed by the strength of clever mathematics.

Bitcoin might represent the first currency which is not backed by a physical good and still prevents arbitrary inflation. It has expanded the limits on our traditional conception of money. So, next time you hear “Bitcoin is not backed by anything!” understand it as a deep compliment to the ingenuity of Satoshi Nakamoto.

 

Seedcoin and startups BTC.sx, BitcoinATM360, bitSIM, CoinSimple, meXBT share exciting news this Fall!

Hong Kong – October 21, 2014 – Continuing their steady pace in launching innovative products and being involved at the forefront of the bitcoin industry, Seedcoin and its startups BTC.sx, BitcoinATM360, bitSIM, CoinSimple and meXBT have exciting news to share during the Autumn months.

BTC.sx: The world’s first and exclusive platform for trading Bitcoin-only trading, BTC.sx sponsored the Inside Bitcoins London conference (Sept 15-16) alongside Seedcoin recently. The company has since launched a revenue sharing referrals scheme, allowing customers who recommend their friends to earn 20% of BTC.sx’s revenue from traders they have referred. Further expanding its global presence, BTC.sx announced yesterday it has integrated its trading platform with the global bitcoin exchange itBit, which has locations in Singapore and New York. BTC.sx will be announcing more new industry partnerships shortly. Co-founder and COO George Samman was also at Inside Bitcoins Las Vegas (Oct 5-7) speaking about Bitcoin, Remittances and the Developing World.

BitcoinATM360: Ignite Financing is now BitcoinATM360. The new brand and site was launched with BitAccess, Genesis Coin and Lamassu BitcoinATM sales, with many more brands coming soon. BitcoinATM360 continues to provide industry first managed services and financing worldwide.

bitSIM: Vennd.io and bitSIM recently announced a partnership to create a platform for listing and trading assets on Counterparty. BitSIM will enable anyone with a mobile phone to securely own digital assets, streamlining access and giving users complete control.

CoinSimple: CoinSimple was one of 20 startups chosen to present at CoinAgenda, the bitcoin investor conference in Las Vegas, October 8-9. Since its public launch on beta September 15, CoinSimple has made significant functionality and user interface improvements. The company also will soon release its first plugin for the WordPress platform, allowing website owners to sell goods and services directly from their website using CoinSimple’s API. CoinSimple is in discussions for the first beta tester of the plugin.

meXBT: The company recently took part in various activities including: launching cash-in in seven countries of Latin America; being invited to talk about Bitcoin at the Fintech Latam Conference held in Miami; joining the discussion about Alt Coins and their future at Inside Bitcoins Vegas; and being selected to present at the first CoinAgenda startup competition.

Seedcoin: The following experts will speak at Inside Bitcoins Paris November 20-21 : Seedcoin CTO HakimMamoni (Decentralized Technologies: Lifeboats for Society) ; Seedcoin Chief Startup Officer Eddy Travia, Jetcoin Creator and Co-Founder Eric Alexandre (Jetcoin and Sports: A Match Made in Crypto Heaven) ; and Jetcoin Institute Advisor Bernard Lietaer, Research Fellow, Center for Sustainable Resources of the University of California at Berkeley and author of The Future of Money, will be the keynote speaker in the morning on November 21. See http://www.insidebitcoins.fr.

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About BTC.sx

With offices in New York City, London and Singapore, BTC.sx has an innovative, intuitive and proprietary platform that allows users to easily trade Bitcoin derivatives. This flexible resource permits long and short positions, Bitcoin hedging (to prevent losses from a drop in the price of Bitcoin), automatic liquidation and stops for convenient position management, and without complex margin maintenance requirements. For more information about BTC.sx, please visit http://www.btc.sx

About BitcoinATM360

BitcoinATM360, previously Ignite Financing, provides first in class worldwide sales, services, financing andresources for the BitcoinATM industry. For further information visit http://BitcoinATM360.com or e-mail[email protected], or for partnership and business development opportunities :[email protected].

About bitSIM
bitSIM provides easy access to Bitcoin for anyone with a cell phone; bitSIM has created a SIM overlay solution that acts as a fully encrypted Bitcoin Wallet. Visit: http://www.bitsim.co/.

About CoinSimple

CoinSimple makes it extremely simple for professionals and online merchants to accept bitcoin, get the most competitive services from among bitcoin payment processors and review comprehensive sales data. For further information, please contact Nikos Bentenitis at [email protected], +1-512-861-1972, +44-20-3695-5392 and +852-5808-4399 or visit coinsimple.com.

About meXBT

Providing digital currencies for serious traders and simple enough for beginners, meXBT’s goal is to provide the best and most secure service to traders of digital currencies. MeXBT is combining state of the art technology with a rock solid legal and fiscal structure on a single platform called meXBT.com, the Crypto Exchange of the Americas, the place to be when exchanging cryptos. http://www.mexbt.com

About Seedcoin

Seedcoin is the world’s first seed-stage Bitcoin startup virtual incubator, whose objective is to invest in the creative entrepreneurs of the cryptocurrency economy and help them develop the future services, products and applications re-shaping the way we interact with money on a daily basis. Visit http://www.seedco.in/ for more information.

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Press Contact:

[email protected]

New York, NY (PRWEB) October 21, 2014

Today, New York City-based recording studio, announced that it is changing the music industry by offering the first in-studio music seminars, and by announcing its acceptance of the controversial digital currency ‘bitcoin.’ Premier Studios serves the industry elite, is aimed at working with students, or others interested in pursuing a career in music production.

In another pioneering move, Premier Studios announced the launch of their much-anticipated, intensive preparatory seminars. Individual ones range from $200-$400 and are being accepted now. If you accumulate approximately 15 seminars at a total cost of $5,000 (seminars are paid for when they are taken so you do not have to pay the $5,000 in 1 lump sum) you will receive a Certificate, which states you have completed the Premier Studios Session Seminars Program. Within 30 days, you will considered to be an intern at Premier Studios, and 30 days later, an assistant engineer. These impactful sessions are focused on preparing students for work in studios and are led by famous music engineers and producers.

Until the recent development and unveiling of music production courses were only offered at the university level. These courses are highly priced, ranging from $20,000 to $200,000 and are highly theoretical, making it difficult both for students to become producers and engineers and for graduates to succeed in a practical work environment. Premier Studio owner, Sandy Schneiderman, estimates that he refuses to hire “up to 90% of interns” due to their lack of preparation for a true studio work atmosphere. Seminars are intensive, practical seminars with a focus on real world applications. They are divided into two categories: basic and advanced, and include topics like ”Real Studio Environment”, “Balancing Mixes Using Dynamics and Placements, Songwriting and Production” and Master Music Production Techniques. Applications for the first Session Seminars are being accepted now.

Understanding the importance of embracing change, Premier Studios is proud to announce its status as the first major music recording studio to accept the digital currency ‘bitcoin’ for its services. Now, superstars like Rihanna, Coldplay and Nas – who is famous for supporting bitcoin – can pay their way using the digital money. The suggestion came from Tatiana Moroz of Tatiana Coin and formerly the business manager at Premier, who had much success using Bitcoin to fundraise. The decision to use Bitcoin through Bitpay came quickly to the studio’s owner, who said it took him ‘60 seconds to decide’ on.

About Premier Studios NY

Premier Studio is a world-class facility, serving the elite of music, film & television celebrity clientele and is formally known as Quad Recording. Premier Studios NY recently completed a $500,000 USD refurbishment of all their studios. The studio contains four fully-loaded rooms to accommodate writers, producers and performers and is located on the 6th and 8th floors at 723 7th Avenue in New York, New York. For more information, visit http://premierstudiosny.com http://www.PremierStudiosNY.com or contact [email protected] for more info.

Bitcoin… we are all the blockchain

Since the first great jump in Bitcoin’s exchange rate in early April 2013, speculative trade has stolen the limelight as the main Bitcoin story. Tweets of “To the moon!” echo like a rallying cry, selling what amounts to a collective vision statement. But what’s the vision? A respected VC assures us it’s “still headed to 10k” as if Bitcoin was a prize thoroughbred being written down by the Bookies, but still had a few Derbies left in her… Is that all this is about?

Whatever one feels about the ‘profiteer mentality’ so evident across the Bitcoin movement, it is clear that without this driver, this long overdue financial systems innovation may not have taken hold. So we may as well accept that the ‘greed factor’ is serving a greater purpose. However, whenever the Bitcoin price slides, editorials claiming the demise of Bitcoin demonstrate that both the detractors and the devotees are focusing on an artifact of the system rather than the system’s innate value.

It’s about all of us…

Bitcoin’s real value is closely related to the manner in which its transactions are validated across a highly distributed network in what amounts to a collaborative process. This inclusive decentralized validation process is, after all, one of the key differences between Bitcoin and centralized financial systems. It must be understood that decentralization is inherently attractive to people because it’s about all of us.. and the promise of guaranteeing impartiality and fairness. It is Bitcoin’s greatest achievement to date that its version of decentralization, being achieved in an area as tricky as financial transactions, actually works at all.

However, the real value of Bitcoin is not reaped at an individual level. If a few thousand of us get rich, is that what Bitcoin is about? Are we heading towards replicating the wealth disparity evident in western capitalism in the digital currency space too? If we are, perhaps we should pause and take a few breaths.

We are all the block chain, metaphorically

The real value of Bitcoin resides and is apparent at a group level. We are all the blockchain, metaphorically. Technically, miners may process the transactions by computing and embedding blocks into the blockchain, but it’s the people who make the transactions that drive the system. But what kind of transactions? This question hints at a conflict issue within the way the existing system is working, i.e. if Bitcoin continues to be hoarded and transaction volumes are mainly associated with cashing in and out of Bitcoin on exchanges, we are indeed mainly treating it as a commodity, rather than leveraging from its utility, like hoarding a limited supply of gasoline instead of using it to fuel a car to go from A to B.

Alternatively, we could be asking: ‘What can Bitcoin do that traditional currency systems cannot?’ Simply buying things with Bitcoin instead of normal money is still a very basic use of the technology, as it doesn’t really begin to exploit the full potential of the medium. But like most innovations, when they first arrive they tend to be associated with legacy systems: the ‘Horseless Carriage’; the ‘Electric Candle’; the ‘Digital Super Highway.’ In other words, we inevitably tend to match them with existing concepts that we are familiar with. This is where most of us still are with Bitcoin… even the devotees.

One just has to look at the plethora of startups and VC backed businesses in the alt-currency space (with a few notable exceptions) that are only focused on the handling or holding of Bitcoin rather than leveraging from its innate characteristics to drive innovation in other sectors, to know that we are still very much in a Bitcoin 1.0 world.

To grow Bitcoin adoption, we don’t really need endless ‘money handling’ applications competing with each other, we need mass market applications that offer new forms of value facilitated by Bitcoin transactions, millions and millions of them. But what has been the reality so far?

Like the great Railway boom and land grab in the USA in the 1850s and 60s

Since early 2013 the Bitcoin/cryptocurrency space has resembled a kind of land grab by those who quickly saw the Bitcoin revolution as an unpopulated parallel monetary universe with vacant land as far as the eye could see. Yes it has indeed been like the early days of the web, but perhaps more like the great Railway boom and land grab in the USA in the 1850s and 60s. Back then, just like in this current cryptocurrency frenzy there was technology innovation, dramatic new efficiencies, opportunism, greed and yes… those legendary ‘snake oil’ salesmen.

The explosion of interest in Bitcoin has been like a large room full of empty chairs: someone opens the doors, a crowd floods in and everyone tries to grab a seat. In this group there is the wider community of bitcoin users, the Crypto-Developer Community, the anti-government Libertarians, Crypto-Anarchists, Bitcoin and Alt-Coin Entrepreneurs, Bitcoin friendly VCs and of course the ‘Investopreneurs’ at the BitAngels. It’s a diverse bunch, and they are not all driven by a common philosophy.

The inevitable search for a multiplier, in a realm where copies cost nothing…

Most successful business people learn to look for a ‘multiplier’ when evaluating business opportunities. A multiplier is a way to achieve economies of scale, to pump out widgets that are in demand, and to fill that demand. Think: rolls of Kodak film, tubes of toothpaste, CD blanks that cost less than a dollar but sold for $20.

So it has been inevitable with the sudden advent of a new technology like Bitcoin, that was in effect a ‘money protocol’ and an idea that could be fairly easily duplicated, that a bunch of enterprising folks would want a piece of that for themselves. But herein lies the problem… There is a growing but relatively limited demand for cryptocurrencies, yet we already have (at time of writing) apparently 985 tradeable crypto coins and an indeterminable number of vaporware ‘crap coins’ being pumped out, before most people have properly understood, or in some cases, even heard of Bitcoin.

It’s almost reminiscent of that scene in Aliens when Sigourney Weaver’s character ‘Ripley’ stumbles on the Alien hatchery.

We now have what amounts to parent alt-coins that enable enumerable child alt-coins, and parent ‘crypto-crowd-funding marketplaces’ that can be used to give birth to enumerable child ‘crypto-crowd-funding marketplaces’… It’s almost reminiscent of that scene in Aliens when Sigourney Weaver’s character ‘Ripley’ stumbles on the Alien hatchery. Its the pandemic (coindemic) idea of something that is rapidly duplicating and escalating out of control.

In contrast to just over 12 months ago, the teams working on alternate cryptocurrencies, app-coins and coin generating marketplaces, now massively outnumber those working on pure bitcoin projects and the core bitcoin protocol. In many ways, what we are seeing is an endemic cookie-cutter approach to the Bitcoin phenomenon by teams trying to duplicate and (sometimes) improve on Bitcoin, but sewing the seeds of massive fragmentation in the process.

When something can be copied at near zero marginal cost, it will inevitably become valueless

As Kevin Kelly pointed out in 2007 on his influential blog The Technium, the Internet has made the cost of making copies near zero, and so everything from web pages to books to music to movies are copied and distributed at near zero marginal cost.

Kevin Kelly: “Copies are worthless; sell what can’t be copied”

Kelly’s observations relate to what economists call ‘zero marginal cost economics’. With traditional physical goods, marginal costs tend to rise over time due to constraints; with digital goods the marginal cost of goods tends to drop toward zero. The music industry is a classic example. From CD sales to Napster to iTunes to Spotify we have seen the price of music to the consumer effectively fall close to nothing at all, because the cost of that reproduction has become negligible. However, in contrast to tech savvy musicians working in today’s music industry who are still economically constrained by legacy industry structures imposed by record companies and the RIAA, it’s the class of people who are adept at working with computers and software in new areas like the alt currency movement that are prevailing in digital markets.

Tyler Cowen in his book Average is Over argues that: “As computer based digital goods start to dominate the economy, their odd zero marginal cost economics will loom larger and larger. Computers will accelerate our existing trend toward a more stratified society. People adept at teaming up with computers will get richer, while those who aren’t will get left behind.” ¹

As everyone in the field knows, there will be a finite maximum of 21m Bitcoins mined. It’s a big world, so as an illustration, if for instance everyone in Australia would end up only owning one bitcoin each, there goes your 21 million. Too bad for the other 7+ billion people in the world right?

So, to maintain Bitcoin’s pre-eminent status there will be an inevitable division of Bitcoin into smaller and smaller but increasingly valuable fractions, and the utility of Bitcoin will be extended, but its integrity maintained by systems that are benign to Bitcoin rather than competitive with it. The Sidechain project by Adam Back and Austin Hill of Blockstream to create pockets of crypto-innovation, double pegged to the main Bitcoin blockchain, is an obvious example of a project that strengthens the core of Bitcoin. The 900+ tradeable crypto coins are, regrettably, pulling in the opposite direction.

We have already seen a number of instances of crowd sales of alt-coins with many orders of magnitude higher eventual numbers of coins than Bitcoin, i.e. MaidSafe’s crowd sale of 400m Safecoins being “only 10% of all Safecoins that can ever be produced!” ² purchased at the ratio of 23,800 to 1 BTC. The inducement being the prospect of massive capital gains, like the gains we all witnessed with Bitcoin, which of course would be less and less likely with each successive competitive alt coin.

However, it is the practice of using Bitcoin as the preferred medium of exchange for these alt currencies that is particularly revealing. Not only as evidence of Tyler Cowen’s prophesy (above) that “People adept at teaming up with computers will get richer, while those who aren’t will get left behind,” but also as testament to which crypto-currency is clearly being perceived as having the most innate value and the least ‘value-risk.’

The promise of a perpetually exploding crypto universe…

As crypto-entrepreneurs hoover up thousands of Bitcoin from enthusiastic early adopters in exchange for the promise of a perpetually exploding crypto universe (who more than likely purchased their small holdings of Bitcoin with hard earned fiat currency), are we seeing the beginning of an era where it is the tech elite that will own the vast majority of Bitcoin, while the devout legions of early adopters will be left with crypto wallets full of tokens with values unlikely to be sustained by the scarcity that will continue to underpin Bitcoin?

This is a problem worth considering. Because if Bitcoin is indeed ‘about all of us’ because we are all metaphorically its blockchain, do we risk a collapse of confidence in the ‘idea’ of cryptocurrencies due to this fragmentation and dilution, or will the alt-coin leaves fall off the tree, to leave the Bitcoin trunk intact and strong?

Clearly market forces of demand and supply will always have the effect of injecting liquidity back into the Bitcoin economy from the ‘have lots’ to the ‘have nots,’ but that precious goal of the ever increasing exchange rate of Bitcoin to the US dollar will be much more likely to occur if it is built on real participation by a growing global constituency of users experiencing genuine value, unique to using Bitcoin, rather than speculation in it as a new kind of commodity.

Permalink: http://bitcoinmagazine.com/17439/bitcoin-we-are-the-all-the-blockchain

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1. Nathan Taylor, praxtime.com

2. Hill, Kashmir (8 April 2014). “Beyond Bitcoin: Crypto-Ownership Companies Hope You’re

Ready To Decentralize Everything On The Internet”. Forbes. Retrieved 30 July 2014.

October 20, 2014 10:40 ET

21 Top Bitcoin and Digital Currency Companies Endorse New Digital Framework for Digital Identity, Trust and Open Data

CAMBRIDGE, MA–(Marketwired – Oct 20, 2014) –

• MIT Media Lab Spin-Out ID3 Spearheads Group to Build an Open Source Secure and Trusted Platform to Advance Digital Currency Transactions
• Group to Advance Global, Industry-Wide Initiative Based on Windhover Principles

ID3 (Institute for Data Driven Design), a research nonprofit founded out of the MIT Media Lab, today teamed with nearly two dozen leading digital currency firms to announce theWindhover Principles, a new principles-based framework collaboratively written with public and private stakeholders to ensure secure personal identity, trust and access to shared open data on the Internet. Key advocacy and support was generated by DATA (Digital Asset Transfer Authority) in building the coalition.

The Windhover Principles are being implemented on an open source platform, foundationally based on ID3’s contribution of its Open Mustard Seed (OMS) software platform. As the cornerstone of the new principles and framework, ID3 announced support from a wide range of digital currency and Bitcoin-related companies and individuals: BitPay, BitReserve,Bitstamp, BTC.sx, Coinsetter, DATA, Delta, Epiphyte, Erik Voorhees, Hub Culture Group/Ven Currency, LaunchKey, Personal, Personal Black Box, Ripple Labs, SnapSwap, Swarm, Trefoil Labs, Vaurum, Xapo, ZipZap and 37coins.

The Windhover Principles for Digital Identity and Trust are deeply rooted in the belief that individuals should have control of their digital personal identities and personal data. Underlying this core value is the principle of ensuring innovation in trust and privacy. Concurrently, the industry group’s support of transparent, proportionate and risk-based regulation will allow stakeholders to meaningfully leverage new technologies for enhanced governance, auditing and enforcement needs. Implementation of the core Windhover Principles on the inclusive OMS open source platform as a sustainable industry step, paired with MIT-designed Living Labs, underscores a results-driven ethos supported by the group of companies and supporters.

Framing the issues, ID3 Chief Scientist and Co-founder Dr. Alex “Sandy” Pentland, Toshiba Chair Professor at the MIT Media Lab and co-lead of the Big Data and Personal Data & Privacy Initiatives at the World Economic Forum, said, “The Windhover Principles support my view that it is time for us all to take charge of our personal data. Technologies such as OpenPDS and ID3’s Open Mustard Seed provide a new technical solution to a rapidly growing societal problem. Our work at MIT will continue to influence ID3 and the emerging industry-supported OMS open source project — not only in technology, but also in method, as we assist in architecting MIT Living Labs test beds to understand and optimize these new solutions.”

OMS is a trusted compute platform for developing and deploying secure cloud applications to collect, compute on and share personal data. It enables the development and deployment of web apps in a secure, user-centric personal cloud. Just as the original HTML code gave rise to the World Wide Web and new types of bottom-up social communication and collaboration, OMS can be understood as a new “social stack” of protocols. The framework provides a stack of core technologies that work together to provide a high level of authentication, security and ease of use when sharing and collecting personal and environmental data. This enables the control of web-enabled devices, and engagement with others to aggregate information and view the results of applied computations via protected services. The Windhover Principles serve as the cornerstone of this framework.

“The next phase of Internet growth requires a re-tooling, with identity and trust at the foundation, to bring the ownership and control of personal data back to the individual. Doing so will spawn a new stage of collaboration and open data exchange,” said ID3 Managing Director Dan Harple, Internet pioneer, serial entrepreneur and MIT Entrepreneur in Residence. “The Windhover Principles, coupled with an inclusive open sourced Open Mustard Seed project and MIT-influenced Living Labs, are tremendously positive steps toward an industry-wide solution. Our vision for OMS is as an inclusive platform to transform how we, as collective Internet users, can take back our personal data, and share it in a trusted and secure way — not only for Bitcoin and digital currency transactions, but for other data and media types as well.”

With the digital currency industry’s support, ID3 and participating firms plan to iteratively test, implement and deploy granular technical solutions to trust, privacy and governance on the OMS open source platform. Leading digital currency firms are committed to future, collaborative development of legal and technical frameworks — along with subject matter experts, government bodies and the private sector — to implement the core Windhover Principles through rigorous testing in MIT-type Living Labs.

Balancing regulatory requirements with the increasing need for privacy and secure identity is a core component of the Windhover Principles and OMS. “Illustrating how a new form of autonomous industry governance can emerge using open source methods to solve large systemic problems, this industry-wide collective includes some of the world’s foremost thought leaders and innovators on today’s Internet and their companies,” said ID3 Co-founder and Executive Chairman Dr. John Clippinger, an internationally recognized research scientist at MIT Media Lab. “The increasing complexity of technical systems render effective and balanced regulation of identity and personal data — including KYC (Know Your Customer) and risks of AML (Anti-Money Laundering) — a deeply complex and rapidly changing global process that cannot be sustained by current governmental and private sector practices. New forms of engagement are needed by all stakeholders that combine innovative digital technologies with new regulatory practices and intensive testing to drive viable privacy — and security-preserving solutions for the 21^st century.”

The Windhover Principles were collaboratively written by the industry group of companies and their advisors, and included dialog with financial regulators. “In Europe as well, Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) requirements are getting stricter and stricter, and we will pretty soon run out of tools to deal with these requirements adequately and efficiently. The MIT/ID3 Platform, together with the Windhover Principles, constitute an excellent opportunity to build the AML/CTF tools we will need tomorrow whilst at the same time allowing individuals to have control over their personal data — a key tenant of privacy,” said Jean-Louis Schiltz, IT lawyer and Luxembourg’s former Minister of Communications and Defense.

“The advent of digital ledger technologies, when coupled with digital identities, has the potential to extend financial access to everyone in the world, rather than just those lucky enough to be banked,” said Ripple Labs Chief Compliance Officer Karen Gifford. “For everyone, these new technologies better support security sought by law enforcement, trust sought by merchants and privacy rights of individual consumers. We’re excited to be a part of ID3’s initiative to build a global framework for identity as a value-added layer to the initial financial innovation started by virtual currencies.”

“The blockchain and other distributed technologies call on us to reimagine our existing world in ways that carefully balance public policy goals in the 21^st century world — the global impact of the Internet on shifting norms of interaction and transaction presents serious challenges to traditional paradigms of the governance process and geographically localized regulatory regimes,” said Constance Choi, founding board director of DATA and Seven Advisory, who advises a broad spectrum of entities and policymakers in the digital asset industry. “Policymakers and private industries are beginning to understand the opportunities in these complex dynamics and collaborative work is underway to ensure self-determination and inclusion, and increase trust and viability. This is at the heart of the Windhover Principles and the OMS reference platform.”

About ID3

ID3 is a research and educational nonprofit with a mission to develop a new social ecosystem of trusted, self-healing digital institutions. Addressing the severe structural limitations of existing institutions by empowering individuals to assert greater control over their data, online identities and authentication, the organization is committed to enabling the design and deployment of a new generation of trusted digital institutions and services globally. Additional information on ID3 is available at www.idcubed.org or by sending email to[email protected].

The Windhover Principles and Open Mustard Seed are trademarks of ID3. All other product names are trademarks of their respective owners.

The Windhover Principles for Digital Identity, Trust and Data

1. Self-Sovereignty of Digital Identity and Personal Data:

Individuals and groups should have control of their digital personal identities and personal data.

Today we communicate, share and transact digitally over the Internet. Individuals who make use of the Internet for these purposes should have control over their digital identities, ensuring individual autonomy, trust in their communications and counter parties, as well as in the integrity of the data they share and transact with.

Individuals, not social networks, governments, or corporations, should control their identity credentials and personal data. Control of one’s identity and personal data means that people should have unfettered access to their personal data, the ability to verify attributes of their personal identity profiles, and the ability to prevent unauthorized public and private access.

We support the collaborative open source development of systems that embody these principles and recognize the need to address the requirements of legacy regulatory mechanisms, including by evolving innovative digital technologies to improve privacy, governance and enforcement.

2. Proportionate Enforcement and Risk-Based Regulation:

Enhancing / improving personal privacy while promoting effective governance and accommodating legitimate auditing and enforcement needs.

We encourage innovation in identity, trust, security, and data technologies and policies to provide effective methods to address governance and enforcement concerns. Governance includes the concepts of transparency and accountability necessary to protect digital transactions from abuse. We believe these technologies can address public policy interests by enabling appropriate access and verification of identity data. Entities and individuals, acting on the basis of verifiable approvals, including due process and appropriate warrants, should be able to access such data through specific and auditable means. New and evolving digital technologies make it possible to protect an individual’s privacy while providing authorized government access to customer identification, due diligence and transaction monitoring information for legally authorized needs.

3. Ensuring Innovation in Trust and Privacy:

An effective, autonomous identity system reiteratively furthers trust, security, governance, accountability and privacy.

Protecting privacy and fostering trust and governance are foundational Windhover Principles that support a fully functional identity system designed to collect and analyze data in a network in which identities are continuously and independently authenticated. These core principles are intended to foster development of more trustworthy, effective and resilient products and services to minimize the risks and costs of fraud, money laundering, terrorist financing and other criminal activity.

4. Open Source Collaboration and Continuous Innovation:

An inclusive, open source methodology to build systems that embody these principles.

Supporters of the Windhover Principles agree to cooperate to build systems that deliver these requirements and to participate in Living Labs to develop strong and innovative technical product solutions that interoperate to meet these challenges.

PARTNER QUOTES

“Hub Culture has been working with ID3 since 2013 to develop the first consumer application layer using Open Mustard Seed technology through the development of HubID, a unique identity product that enables members of the Hub Culture network to own and manage identity services. HubID represents a big step forward in new AML/KYC approaches, works globally with the Ven currency and features characteristics built with the Windhover Principles and other sustainable governance systems in mind.”

Stan Stalnaker, Founder and CEO, Hub Culture Group/Ven Currency and Impala

“It’s great to see MIT applying the bitcoin technology in new and novel ways. This project shows that it’s possible to protect online privacy and, at the same time, provide tools that are effective at combating criminal abuse.”

Stephen Pair, Co-founder, President & CEO, BitPay

“I couldn’t be more excited to see the digital currency industry taking individual data rights, integrity and collaboration seriously. This marks a giant step forward for all of us and a great improvement over anything that exists in the traditional finance world.”

Joel Dietz, Founder & CEO, Swarm Corp.

“These principles, and the growing voice in their support, are evidence of the positive steps we are gaining toward our ability to establish and benefit from personal data independence.”

Haluk Kulin, Founder & CEO, Personal BlackBox

“Decentralized identity technology will allow the bitcoin industry to increase user privacy and create new paths for cheaper and more effective compliance. We are solving global regulatory issues with an ethical solution that simply works better.”

Jaron Lukasiewicz, CEO, Coinsetter

“We are living in exciting times indeed. Technological innovations are enabling us to challenge and successfully redefine and reinvent old structures and paradigms. For the first time in history, it is today possible to transfer value over the Internet instantaneously, inexpensively, globally and securely, and to digitally and incorruptibly register assets and property titles around the globe. The ID3 project adds another fundamental component to our digital evolution as humans — an unprecedented way to protect the human right to our privacy and identity. It is certainly one of the most exciting projects I have ever been involved with.”

Juan Llanos, Chief Transparency Officer, BitReserve

“As a company that works so strongly toward providing privacy and security, LaunchKey is excited to be a part of the collaborative effort promoting these values as they have been embodied by the Windhover Principles.”

Yo Sub Kwon, Co-founder & COO, LaunchKey

“We live in a time when the sophistication of international data thieves seems steps ahead of the best defenses of even our most well-resourced, rigorously audited, and locked-down organizations, both private sector and government, and the PII of possibly a majority of law-abiding Americans and many additional Internet users has been compromised and is now available on data black markets, while important classified military and national security data is in the hands of foreign powers. Our modern data security architecture is fundamentally flawed; hence, we applaud MIT’s ambitious ID3 project to rethink how PII and sensitive data is compartmentalized and secured, and look forward to doing what we can to support and advance the project.”

Vaurum

“We at BTC.sx believe in the Windhover Principles as it outlines an approach to give full control of an individual’s personal data back to the person it belongs to. In a paradigm where personal data sharing is becoming a prominent part of our increasingly technology dependent culture, controlling the distribution of your most sensitive and secure data is becoming essential. We are seeing the growth of an industry that is being built on the intrinsically decentralised nature of Bitcoin’s design. As a result, the fiduciary responsibilities of businesses operating in this space have never been more important. What ID3 is working on is a framework for Bitcoin businesses that work tirelessly to comply with AML/KYC responsibilities globally to conform whilst maintaining the integrity of their customers’ user data.”

Joe Lee, Founder & CEO, BTC.sx

“Identity is a key concern for our bank customers. For banks and other financial services companies, the complexity of KYC/AML and safeguarding customers’ private information has been the number one barrier to providing services cost-effectively. This has effectively priced banks out of providing services to much of the world’s population — creating massive global unbanked population without access to basic banking services. This includes 10 million households in the US alone and many hundreds of million more globally.”

Edan Yago, CEO, Epiphyte

“Online media properties and data brokers collect an unprecedented amount of information about consumers which could be easily abused. ZipZap fully supports the open source platform proposed by the ID3 team which lays out the groundwork to shift the control of personal information back to the individuals as the rightful owners, while not preventing legitimate commercial or government access. It provides a path for a perfect balance between the need to know and the need to protect a citizen’s personal information.”

Alan Safahi, CEO, ZipZap Inc.

CONTACT INFORMATION

• Media Contact:
  Chris Carleton
  CHEN PR for ID3
  m: 857.891.2989
  o: 781.672.3115
  Email Contact

The term “Just in Time Inventory” was coined to refer to the efficiency businesses could gain by not tying up their funds in inventory that sat around on warehouse shelves until the product was needed. The problem of maintaining inventory is that it ties up cash you might otherwise need for productive uses. Sitting on shelves waiting to be purchased or used in assembly is not. New efficiency models started in the 1950s Japan to proceed with new processes and rules that aimed for perfect timing for all business operations. The term “Just in Time” was eventually popularized to be applicable at all points of the business process.

Having your inventory days approach zero was the ultimate but, thought to be impossible, goal. Then the Internet came along. It became possible to have negative inventory rates. This means that you could take an order for a customer and have it paid in full for before you even have the parts or product itself. Dell computers was able to undercut competition using this new efficiency. Amazon.com could sell books without ever needing to stock them. Although, the book can be oversold for their preset printing run and become out of stock – but these were inefficiencies from the source, not their own. A paradigm change happened because of the new online business models. They reduced variation in price and stability, which improved product lines and quality. A new breed of retailers were born disrupting the old standbys.

Bitcoin can now be bought and sold at Circle.com just as efficiently. Once Circle.com has verified one’s bank for regular bank transfers, cash funds move through the traditional banking methods to get to Circle. After that point, one can buy and sell bitcoin in seconds. They make it as easy as doing cash deposits and withdrawals, with no fees. This now means you can have your bitcoin ‘just in time’ to make your online purchases using bitcoin – even after you’ve made your purchase online and you are in ‘check out’. Merchants have had the advantage of no volatility – there is finally no volatility risk to the customer as well. The merchant had been safe in this regard by selling the bitcoin immediately upon its arrival to utilize the stability of the US dollar. As merchants aren’t typically in the bitcoin speculation business, they have to follow their business plan and that means fiat currency. When you buy it ‘just in time’ the customer has no need either take on the risk. Previously to Circle.com, people would have to purchase bitcoin using an ATM or other exchange and then hope that the equivalent US dollar value would be equal at the time that they spent it But as bitcoiners – we know to keep stashing more than we spend. *wink*

But now it’s changed. One can place the order on Newegg.com (or other online retailers) and not actually own the bitcoin yet. Once you’ve clicked the “pay with bitcoin” you are given 15 minutes to complete your purchase. At this point you can click on over to Circle.com and instruct a payment to be sent. Better yet, don’t spend your bitcoin savings, and just transfer cash from another bank account over to Circle as they credit your account with bitcoin immediately.  Then one can simply forward that money from the Circle wallet to the Newegg.com to complete the purchase. Easy-Peasy. Just in time!

This was done recently with mixed reviews. If there is wallet software on the PC, the Newegg checkout will detect that and will want to transfer the bitcoin from that source first. If it takes more than just a couple of minutes the value of bitcoin to dollar ratio may change somewhat, as it did with me, so that after I purchased my item with the set agreed amount of bitcoin I then had to make a second payment of 88 cents to cover the cost of the difference in price for the last few minutes. Newegg’s implementation of bitcoin payments could improve. It is still a bit clunky. A fifteen minute delay and price spread might work out in your favor or not, but a fifteen minute window of price ‘trust’ would be nice to not have to make multiple payment efforts for the item you just agreed to purchase. Will the opposite be true if the price of bitcoin soars in the 15 minute window giving you the instant discount? In that window of ‘trust’ sometimes you win, sometimes you lose, but it will likely even out so it might be better to just “pause” the outside bitcoin trading world for a few minutes for that one transaction while the payment is completed.

While we are discussing Newegg, their multiple warning screens about paying for items with bitcoin didn’t exactly give me warm and fuzzies. I’ve had good luck with Newegg – so if it’s not right, I trust that they will make it right as they’ve done in the past. I suggest that Newegg and other online retailers can build good-will if they open a new “Bitcoin Customer Service Desk” that bends over backwards to make sure the customer’s experience goes 100% perfect. Until third party arbitrage business models develop, they will be doing the arbitrage on behalf of the “would be” credit card company. Some of the 3% they just saved needs to be put to work building out a department that handles a payment confusion  end of the spectrum. If they don’t get it right, it will set bitcoin back until third party companies come along to handle it. Credit cards actually use that 3% of every purchase to handle these business functions so it is a service somebody is paying for. (Passed along to customers when all things considered).

I’ve not had to rely on a credit card arbitration to force Newegg to behave. But I surmised multiple warning screens about using bitcoin were likely the result of an army of Newegg lawyers not knowing how to deal with unforeseen risk using the experimental currency. I’m ok with that: new technology tends to freak lawyers for the first few years. This tends to go away and relax once there are a few case law precedents they can use to navigate the uncharted waters. We all tend to be a little over cautious as we forge new pathways. Things are always a little rough at first, that’s why we want to get the bugs worked out now – and we are all part of that process and history -my fellow currency and payment system pioneers.

I didn’t have to give my credit card information; this time. I’ve purchased many times from Newegg in the past so my credit card information is still on file on some database somewhere I’m sure. At least a version of it before the Home Depot attack, the K-Mart attack, the Target attack, and my local burger joint  hack attack. Newegg has my credit card history from a year ago, which means it is now four credit card numbers ago thanks to the revolving door of replacement credit cards I’ve received in the mail after each credit card hack attack. It reminds me of the days in the 80’s where you could join a record club to get ten FREE albums for the price of three..  The catch was that you were sent a random full price record each month if you forgot to send back a monthly notice telling them to hold off for that month. That was such a sweet and innocent scam of yesteryear, and I still have a few shiny and unused “Hall and Oats” records to remember it. As far as anybody knows – I did NOT actually purposely order the “Air Supply” album if anybody asks. Let’s just say I’m glad there wasn’t a block chain then to prove it.

So this will be my new method. I’ll shop first at merchants that accept bitcoin – I’ll make my purchase, swap cash for bitcoin at Circle.com just in time to complete the transaction and away it goes. “Just In Time Bitcoin” is going to change things. My monthly credit card statements are going to become a lot shorter.

It’s about time.

We all know that bitcoin is decentralized electronic money that runs on a network that can do all kinds of interesting things. The key question is, what can you do with bitcoin that you can’t do with anything else? What does it mean when bitcoin goes native? Note that the term “native” applied to bitcoin is due to Fred Wilson (a venture capitalist based in New York) and expanded upon by Chris Dixon (another venture capitalist based in San Francisco). 

Wilson writes (in The Bitcoin Hype Cycle): “What’s more interesting is the question of what will lead us onto the slope of enlightenment? I am thinking that we will start to see native applications of Bitcoin. These would be things that simply could not exist without this technology. Donating money to charity with Bitcoin is awesome, and I do it regularly, but it is not a native application of Bitcoin.”

Dixon lists (in Some ideas for native bitcoin apps) five types of native applications: 1) International microfinance, 2) Allocating bandwidth, storage, computing, 3) Marketplaces, 4) Micropayments, 5) Incentivized social software. We will examine each of these and more.

Both of these articles discuss important directions for the potential success of bitcoin. They start to answer the questions I posed at the beginning of this article. While the efficiencies of using bitcoin, for example instead of credit cards are nice, they aren’t the kind of things that are going to cause mainstream adoption. We need to start discussing applications and services that can only exist via bitcoin, primarily via the capabilities of the bitcoin network.

Let’s examine several categories of applications: Micropayments, Peer to peer lending and remittances for the unbanked, asset allocation and sharing, and decentralized security.

Micropayments

Certainly the most discussed “native” application is using bitcoin for micropayments. Proposed as a solution to changing financial fortunes of journalism by Walter Isaacson prior to bitcoin’s existence (or prior to anyone knowing about it), Isaacson wrote in TIME in 2009 about using some, as yet unknown, payment mechanism to pay small amounts for articles. Writing in 2014, Isaacson revisited the concept now pointing to bitcoin as the mechanism that can make these types of small payments practical. I’ve written about micropayments in a prior article as well in “Bitcoin Micropayments a New Enabling Technology”.

Specifically what are micropayments, and how can they be used? If bitcoin micropayments were implemented I could go to a blog and pay authors for their writing. I could go to a site like Vimeo and pay a small fee to see someone’s cool video. Currently for charges less than a dollar, existing payment systems, such as credit cards or PayPal, can’t handle the small charges. They charge too much per transaction and are too heavy weight in their overhead. One would like to be able to pay 5 or 10 cents for small articles or perhaps even to tip someone for a clever tweet. The extremely low overhead and transaction costs of bitcoin make these tiny payments practical.

For a look at the nitty gritty detailed technical basis for bitcoin micropayments see “Rapidly-adjusted (micro)payments to a pre-determined party” in the Contracts section of the Bitcoin wiki.

Another type of micropayment is those occurring inside games and virtual worlds. (Pointed out in Adam Ludwin’s Killer App article) Second Life, in its hey day back in 2006, had many thousands of people building spaces and creating behaviors for sale. They were forced to use the “Linden Dollar” which grew to have an exchange rate with fiat currency and so-called Second Life millionaires were born. One particular Chinese woman became a virtual land baron and a real life US dollar millionaire.

 

The current second wave of virtual reality led by the recent purchase of Oculus by Facebook will likely lead to robust virtual worlds where payments can occur in a much more frictionless manner using Bitcoin. Micropayments can seamlessly pass from one to another for all types of services and virtual goods. The original promise of Second Life with millions of people interacting in a new type of society, which includes economics, just might come to pass this time around.

Also of note, the bitcoinj library (a Java bitcoin library) provides support for micropayment channels. It provides:

“Support for micropayment channels that let you set up a multi-signature contract between client and server, and then negotiate on the channel, allowing fast micropayments that avoid miner fees.”

Brian Armstrong CEO of Coinbase and Chris Dixon (VC) clarify some of the micropayment needs with the blog “A standard protocol for machines to negotiate bitcoin payments for resources”.

Applications for the Unbanked

According to the FDIC approximately 10 million households in the USA are unbanked. The World Bank reports that 75% of the world’s poor — nearly 2.5 billion people — are unbanked. The World Bank states: “”Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s poor,” said World Bank Group President Robert B. Zoellick. “Harnessing the power of financial services can really help people to pay for schooling, save for a home, or start a small business that can provide jobs for others. This new report on the world’s ‘unbanked’ makes the case: the more poor people are banking today, the more they are banking on their future.”

In addition there is a revolution in access to the Internet via inexpensive mobile phone. The uptake in developing countries is astounding. Mary Meeker, noted analyst at KPCB, illustrates mobile growth:

 

The combination of access to mobile internet connected devices and the decentralized financial technology enabled by bitcoin offer a real method to provide modern financial services to the world’s unbanked poor. Let’s look at a couple of these financial services, peer to peer lending and remittances.

Peer to Peer Lending

Peer to peer lending, where individuals make loans to other individuals, has been around for a while and is not unique to bitcoin. It’s not a native application. However, one aspect of peer to peer lending is a native application. As pointed out in Dixon’s article mentioned above, many of the 5 billion people now gaining access to smart phones are unbanked. The combination of a smartphone and bitcoin puts a bank in your pocket (as Gavin Andresen likes to describe bitcoin).  Peer to peer loans can be made to the unbanked easily.

Two prominent service providers are BTCjam and the BitLendingClub. They operate with different parameters: in one case the borrower sets the interest rate and in the other the lender can chose the interest rate. However they both allow individual lenders to loan to individual borrowers with a minimum of paperwork. It’s really permissionless lending with low overhead. Borrowers do pay a small fee to use the service but it’s far less hassle than traditional bank oriented loans — not to mention that the unbanked simply can’t get loans.

Remittances

Financial transactions such as remittances by family members working in one country sending money back home are also possible. The potent combination of bitcoin and a smartphone, which eliminates the majority of those exorbitant cross-border fees, enables the vast majority of the money to reach its intended destination. And this all happens without the recipient needing a regular bank account. Not that having a bank account is so bad, but the infrastructure needed and fees inevitably charged are an impediment in less developed countries.

According to an early service provider of bitcoin remittances, rebittance:

“In 2014, an expected US$436 Billion will be remitted by migrants back to their families in the developing world. The cost of sending all those remittances is estimated at US$47 billion or more than 10% of the entire amount. Using Bitcoin, that number could be reduced to just US$5 billion, or 1.1%”

Now that’s what I call an opportunity!

Asset Allocation and Sharing

As Chris Dixon enumerated in his article, referred to earlier, assets such as network bandwidth, storage, and compute cycles can all be purchased via bitcoin in ways that allow for easy sharing. In addition bitcoin can help the so-called sharing economy by reducing friction and providing transparent auditing. Simply put, there are a bunch of different resources that are for sale. The customer of these resources simply wants to use them in as simple a manner as possible. Logging in, setting up accounts all create friction to the use of these assets. Of course the merchant selling the resources needs to be compensated. Bitcoin payment systems allow for payment without such impediments and proof of payment, important for the merchant, can also be provided.

According to Adam Ludwin (co-founder Chain.com) in Bitcoin’s Killer Apps – A Look Into the Future, one of the coming killer apps is shared assets: things like cars, living space, and computers can be shared much more easily than is currently possible. Some friends might want to share a car. This can be accomplished by assigning partial ownership and keeping track of usage right on the blockchain in a complete and unambiguous manner. 

More interestingly, complete strangers can share the asset. The car, and payments, usage, and time allocation can be tracked and enforced right on the blockchain. If you didn’t properly pay for the car’s time, it might not start (enforced by car interlock systems). You sign up for such a service knowing all the ramifications ahead of time and you are personally responsible for making payments and setting up reservations. Break the rules and the system can enforce and block usage, all with transparent and totally fair mechanisms.

The rules of behavior for how people are supposed to share the car can be encoded into the system via a “smart contract” and these rules become part of the bitcoin network. This may seem a little “1984ish” but the combination of these capabilities will surely evolve into interesting useful systems. Concepts such as proof of existence and proof of work can be used to prove to all interested parties that an asset exists and has been paid for. (There is even an early service for proof of existence at: http://proofofexistence.com/. Think of it as a generalized notary service.) The combination of decentralization, smart contracts, micropayments, and transparency forms a powerful infrastructure upon with new services will be built. And these are services that can not easily exist without the bitcoin network. These are “native apps”.

Network Bandwidth

You walk into a coffee shop and want to connect to their wifi. But it’s not free. Rather than being forced to set up an account and figure out a payment method you simply set up a micropayment channel much like any other type of streamed data. You pay according to the bandwidth used and whatever other access fees, if any, the coffee shop decides to charge. The unique aspects of doing this with bitcoin and the smart contracts it enables are that identity can remain private and business can be conducted with people you don’t trust.

Storage

Dropbox is a success because it makes available cloud based storage in a very convenient manner. One annoying aspect to these cloud based system is that you have to purchase access to a fixed quantity of storage. This is a pain if, for example, you just need a lot of space, more than will fit into your quota. Wouldn’t it be great if you could pay for that additional space on a temporary basis via simple micropayment based on the time and space needed? This could easily be accomplished by whatever payment method you use to pay the cloud storage provider as you already have an account. They could however provide storage services on a more ad hoc basis to people that don’t have accounts via the low overhead and convenience of bitcoin.

Mesh Network

Mesh networks haven’t really been a big commercial success. You can’t just walk around and connect to other network nodes and seamlessly connect to get some or another service. (This is not quite true: “FireChat”, a mesh network based chat service, played a role in recent Hong Kong democracy protests, allowing participants to chat with each other in a manner that could not be blocked by taking down the central server, because there was no central server!) Mesh networks are resilient and have the potential to provide many robust services such as internet connectivity, emergency notifications and other alerts. However, the distributed nature means it’s difficult to pay the owner of a node on the network, that might be you and your cell phone, for the use of your service. Bitcoin micropayments again come to the rescue and each peer can simply set up a payment to the attached peers providing incentive to be part of the mesh and keep the network running. Personally I’d like to see some type of payment made to operators of the bitcoin network (another mesh network) to provide incentive to operate full bitcoin nodes.

Decentralized Security

Bitcoin as a decentralized system containing value also requires the ability to monitor and assure owners that their assets are indeed safe and accessible. Traditional centralized audit capabilities and services don’t really work well, or if implemented, break the bitcoin model and impede its novel functionality. Andreas Antonopoulos, a noted bitcoin advocate, testified before the Canadian Senate and closed his opening remarks with:

“In the new decentralized financial network, we have the opportunity to invent new decentralized security mechanisms based upon innovations such as multi-signature escrow, smart contracts, hardware wallets, decentralized audit and algorithm mechanic proof of reserves. These are the new decentralized regulatory and security tools that are most appropriate for a decentralized digital currency. ”

While the bitcoin blockchain is decentralized, it is also totally transparent. Anyone can browse through the transactions that have occurred, all of them, and even observe the activity in real time. It’s possible to create “read-only” bitcoin addresses that enable one to see the value contained in a particular address without worrying that the value can be stolen, because it’s read only. Strictly speaking, in bitcoin jargon, these are “watch only” addresses. You can observe the money in an address without any danger of exposing a private key on your computer. It’s a great, safe method to keep track of assets.

Multisignature transactions are particularly interesting and useful. It’s just like it sounds: multiple signatures are necessary to complete the transactions. In the bitcoin world however, you can have a richer set of signature possibilities. You can specify, for example, that 3 of 5 people must sign the transaction. Or any number N of M possible signatures can be set up in the rules for completing a transaction. Obviously requiring more than a single individual to sign a transaction increases the security of the transaction. It is another example of decentralized security as the individuals do not have to be in any central location or even have their identity revealed.

Multisignature escrow is a particular application of multisignature transactions that brings the centralized concept of escrow to the decentralized world. From an article about  the company CoSignCoin that offers a multisignature escrow service:

“Multi-Signature escrow works by sending bitcoins to a securely created multi-signature Bitcoin address (Starts with a 3 instead of a 1) that requires two-of-three private keys to send a transaction. In smooth escrow transactions, CoSign Coin won’t get involved at all, as the two parties will be able to use their own private keys to send the funds out of escrow. In the case of a dispute, CoSign Coin would then step in as a second party. Of course, there is still risk that the counterparty and the escrow service could collude; however, that risk is evenly spread on both sides and seldom seen in practice.”

Smart contracts are possible because the bitcoin transactions that receive and send bitcoin value also have the interesting property of executing programmable scripts. This is an amazing capability once you grasp what’s going on. A detailed description of the basis for these contracts is at: https://en.bitcoin.it/wiki/Contracts.

Offering such services as dispute resolution makes these types of systems more appropriate for large financial transactions, and is a sign that bitcoin is growing up. As bitcoin becomes more mature the services described in this article will become robust and lead the way to more mainstream acceptance. Bitcoin applications that are only possible using the transparent, decentralized infrastructure of the bitcoin network are key to making bitcoin a success.

 

How to spot a scam

In the wake of this morning’s Bit-Trader.biz announcement, I thought it was time to finally write an article about spotting scams. I’ve been “doing” Bitcoin fo-re-ver. You haven’t heard of me because, for the most part, I’m a lurker – and I like it that way. But recently, I’ve come out of the closet a bit more loudly in public.

For a little background on me … I’m a marketer. I have handled large brands, small brands, and everything in between. Nowadays, I run my own home security company, Alarm Grid. I’m the director of marketing and an avid Bitcoiner. Those are probably the two activities that I spend the most time on these days. I occasionally jump into the limelight, like last week, when I spoke at Refresh Miami on mobile payments next to one of the co-founders of Square in an absurd outfit consisting of a suit, a bowtie and a hat that said “EA$Y” on it. Such a costume lends to me an air of credibility that suits the internet Monopoly® money we invented and are using.

I have seen every scam come and go: every Ponzi scheme, every so-called hack, and the plain old professional thieves like Neo & Bee. Every time people get scammed, the mantra is the same. The afflicted take to Reddit, cry foul, talk about how someone should have warned them. Then the commenters start saying things like, “serves a person who believes [insert something] right.” The thing is, in the aftermath of a scam, everyone whose hackles were raised when they first heard the scam’s pitch comes out in droves claiming that they knew from day one. Just like when Bitcoin went up, everyone and their mother came out of the woodwork saying things like, “I was just about to invest, but then I didn’t.”

These sorts of statements are antithetical to my personal investment philosophy. But they are also the kinds of statements that indicate a mindset that is ready to be scammed. Very simply, I do not believe one should investing in vehicles that they do not understand. There is a lot of information out there. Some of it is knowable, and some of it is unknowable. There is a spectrum of knowability in there, and somewhere on that magical spectrum as it is applied to public companies in the US is where insider trading begins. If someone is making money on knowable things, their returns will be predictable. If they are making money or even just predictions with regard to unknowable things (like, for example, the day and hour that Bear Stearns will collapse), then they are being fed information. But that’s just how I feel. I don’t believe in oracles.

So anyhow, if you’d like to further explore why I think what I think, feel free to ask any questions in the comment section below. I’ll be around to participate. That said, let me share with you some really simple principles that have kept me from getting scammed over the years.

“If It’s Too Good to be True…” What That Phrase Actually Means

You’ve heard this before. But what does it mean for something to be too good to be true? In the investment world, it’s pretty simple. You have a few baselines that you can measure against. One of the most important is the S&P 500. This has a highly consistent 10%-ish/year rate of return over 30 years. It’s a bit volatile, however, and goes up and down with the markets. That said, its returns are consistent. There are plenty of criticisms of investing in the S&P, but as a benchmark, it’s pretty much the best we have.

So when someone tells you that they have an investment opportunity for you, how can you know it’s “too good to be true?”

It’s not a universal law, by any stretch of the imagination. But if it returns more than 10%, or anywhere near 10% per year, that’s a big red flag. Professional money managers (in spite of what they say) have a hard time returning anything near or above the S&P over long periods of time.

If you’ve ever wondered what a Ponzi looks like, consider looking at one of the greatest Ponzis ever executed. Madoff’s returns were about 15%/year. Many Bitcoin scams promise between 15% and 20% or more each month. People were screaming Ponzi for years when it came to Madoff. In the real world a 15% return is unheard of. Madoff’s return was unprecedented.

A very simple way to gut check this is to apply the very simple rule of 72. If you divide the percentage promised by 72, you can get a good approximation of how much money you will make in an investment. In the case of Madoff, 72/15% per year = doubling every 4.8 years. At between 15% and 20% per month, you’re talking either 72/15% or 72/20% per month = doubling every 4.8 months or 3.6 months. So consider, while real-world investors were suspicious of a doubling of their money every 4.8 years, many Bitcoiners put their money into products that promise to go through 22 doublings in that same time period. So Berney would have turned your $1,000 investment into $2,000 over a nearly 5 year time span. Over that same time period, Bitcoin-Trader.biz – the most recent scam to be uncovered – was claiming that they could turn your $1,000 investment into just under $2.1 billion over the same 5 year time period. I’m not going to cast aspersions, but sometimes if you just run the numbers, the scams are obvious. Just for comparison, if you bought $1,000 worth of Bitcoin at $.20 and sold it at $1,000, you would have made about $5 million. And I think we can all recognize that that is absurd growth (also a pretty good explanation for why financial institutions are pretty suspicious of BTC).

Does It Guarantee Returns?

No one can guarantee anything unless they are doing something that is riskless. There are a few examples of quasi-riskless investments out there, but they are either 1) exploiting inefficiencies that will be closed once a certain amount of money is thrown at them, or 2) returning at or just above inflation. Arbitrage, by the way, falls under number 1. And while a lot of Bitcoiners believe that they are engaging in arbitrage, most of the time, arbitrage is regarded as (almost) risk-free. Bitcoin’s markets have a high chance of failure, themselves, which means that even keeping one’s money in there exposes it to high levels of systemic risk. So even Bitcoin arbitrage isn’t arbitrage.

If someone tells you that you will, almost guaranteed, get some high rate of return on your money, it is probably a scam. What’s a high rate? Well, remember, a riskless investment will probably return about what US inflation returns (3-ish percent). An incredibly high-yield, risky investment might return 10-12%. Understanding this with regard to legitimate investments will help you get a really fast understanding of your exposure to risk in any investment.

By the way, I see the debates about inflation being a false number coming. I can smell them. Even if you believe that, I don’t care. Take the debate elsewhere, this isn’t the forum.

Is Your Money Illiquid?

A lot of investment schemes tie your money up for a period of time. In Bitcoin, a lot of these are Ponzis. But there are a lot of products in the real world that do the same thing. Non-trade REITs, for example, are a great way to run what looks legitimate but acts a lot like a Ponzi scheme. Oftentimes, wealthy people invest in them because their financial advisor recommends the product and they promise big returns. You can’t pull your money out of the product because it requires that you stay invested for some defined term. Locking your money in is a great way to bide time. While some legitimate investments will lock up money, this is a pretty big red flag.

Are You The Sucker? Because Someone Is the Sucker…

I feel like it’s stage 3 of becoming a Bitcoiner. Everyone buys mining rigs. They spend a ton of money on some rig they read about on the internet that promises that bitcoins will shoot forth like one of those infinity-coin boxes in Super Mario Brothers. That’s not how things work.

I believe in the efficiency of markets. Remember what I said about knowable and unknowable information? Well, money is not made by information that everyone can know. Why are mining companies selling you their rigs if they could have made more money simply running the rig? And don’t get all high and mighty on me here. You’re buying the rig which is a validation of that point. You purchase the rig because you believe that mining companies are selling the rig at a price that is so low that you will be able to make money on the purchase.

When I first heard about mining companies selling rigs, the first thing that came out of my mouth was very simply, “those people won’t get their miners for about 8 months.” And I was right. How did I know? Well, I knew because the place where people make their money is in the unknowable information. Do you know how to make an ASIC? No? Well, then you won’t be able to compete with others who do. Just a fact.

In every transaction, there is a trade going on. Hopefully, that transaction intersects at the point where you get a certain amount of value from the purchase, and the seller gets an equivalent amount of value by taking payment for the product or service. In the case where the company is doing something because they are “good guys” who want to help “make others rich” you are on the wrong boat. They are going to be getting a lot of value from your payment, and you will not be getting a lot of value from their product.

Opportunities Are Created Not Happed Upon

Remember, I’m an entrepreneur. I’m a little biased here. But let me tell you about how I’ve turned my investment of a small amount into an investment of a slightly larger amount. I showed up to work every day, I worked 18 hours a day for two years, I lost friendships and other significant relationships, I lost a lot of contact with my family, I stopped watching television and playing video games. I sleep in my car sometimes just to catch up on sleep so that I can go back into the office and work. Some entrepreneurs have it a little bit easier, but, I think if you read about the good ones (not that I’m equating myself with them), most have very similar tales of woe. For those who don’t have the itch, being an entrepreneur is awful. It’s not fun.

So what if I told you you could bypass all that heartache and pain and get wealthy? There is something appealing to the idea that we can all make money or create opportunity without giving up anything. For value to be created, something has to be sacrificed. In the Bitcoin system, it’s energy. In some ways, while more metaphorical than it should be, that’s one of the big philosophical problems I have with Proof of Stake systems that are not acknowledged as centralized systems. In order for value to be created, someone has to sacrifice something.

If someone tells you that they are giving you an opportunity to earn untold wealth, and all you have to do is sit back and enjoy the ride, 99 times out of 100, it’s a scam. Those aren’t real odds. My guess is that the odds of it not being a scam are even far worse.

The Best Scammers are Often Scamming Themselves; Many of Them are Really, Genuinely Good People

The reason this article came into existence at all was because last week at Coins in the Kingdom I made some noise about the Bitcoin-Trader.biz people. I just let everyone know that it was a Ponzi, I made sure to say it every time I saw a person talking to their reps at the center table. I’d walk over and just kindly inform them that I believed this to be a very blatant Ponzi. What was my proof? Math doesn’t lie. The two representatives behind the counter were probably genuinely good people. Both of them said that they had lots of money in Bitcoin-Trader. So with today’s announcement, I’m guessing they are in a pretty bad place.

The truth is, anyone can be scammed. We are all susceptible. Many early Bitcoiners have been through the ringer – scammed multiple times. The two representatives at Coins in the Kingdom were pitching what appears on the surface to be an obvious scam. Why were they so brazenly opposed to acknowledging it? I wish I knew.

I see what I think are obvious scams in this community all the time. But for the most part, these people are not going around trying to scam people. Some of them are – Trendon Shavers AKA Pirate was running a straight-up, unapologetic Ponzi. But there are scams out there that genuinely good people don’t know they are running. I’d say a lot of crypto coins based on personality cults fall into this category. The point here is that just because you met someone who is nice or competent, it doesn’t mean they aren’t pitching a scam.

Always be vigilant. Always be skeptical. And don’t be nice to scammers. Call them out. Because, there are a lot of people who don’t know quite what they’re getting into when they come to Bitcoin. And while it’s a good opportunity to learn for most of us, wouldn’t it be better if we could just ferret out the scammers at the outset?

Thane Richard of Outernet is chatting with me while in a coffee shop (on the anonymous peer-to-peer chat platform Talky). His car is being repaired at the mechanic next door—ah, the woes of the terrestrial world!

Thane, what is Outernet?

I think we should start by saying that there’s a pretty big problem—gap, disparity, whatever you want to call it—in the world right now, that not a lot of people are aware of. That’s that only about a third of humanity right now has access to the Internet. Four billion people cannot access the Internet, which is essentially an enormous library. The largest library ever built. And that library enables you to access so much valuable information that everyday, people like you and me take for granted. Whether it’s news, entertainment (entertainment is an end in itself, I think), health information, weather data for farmers, courseware. What Outernet does is we broadcast the best of the content of this library, from space, for free.

And so anyone within our broadcast footprint, which right now is limited to North America, Europe, Middle East, and North Africa—anybody can build a receiver, which we publish plans to—openly—no one ever has to buy anything from Outernet. In fact, we encourage people to build their own receivers, and we hope that, sort of like FM radio, we can focus on the signal and allow others to manufacture the actual radios that tune in to the signal.

And everything that it is in the library, or in the broadcast, is selected and open for vote. So people can request. We just actually released this last week. It’s called WhiteBoard. You can go and paste a link—we ask that you tell us what the license for the content is—and then people can vote on it. It sort of moves up and down the queue based on demand. So, that is Outernet.

Excellent. With the system of voting, is that because you have only so many megabytes to broadcast per day, so the content must be prioritized?

Right. Right now we’re broadcasting 200 megabytes per day to those locations I mentioned. It’s like BitTorrent from space.

How could Outernet help in, say, a zombie apocalypse, in which a lack of electricity limits connection to the Internet?

[Laughs.] I’m a huge Walking Dead fan, too. Or I used to be at the beginning. I feel like the show’s kind of fallen off.

In the event of a zombie apocalypse—what you always see in the classic zombie movies—is all these little groups working in isolation. Everybody just sort of forms these camps, nobody has any idea what’s going on, the plots are always centered around getting to the “safe zone” but no one knows if it’s been built. It’s almost like we go from the two-thirds of humanity who don’t have access to this library, to everyone. In that situation, Outernet would be the oasis in the desert. We would continue to broadcast, because whatever is happening on earth, whether it’s a zombie apocalypse or tsunami or military conflict, has no effect on our ability to broadcast from space. We’d probably prioritize news, emergency information, how to best prepare and defend yourself from the zombie apocalypse—maybe that book by, who’s the guy who wrote World War Z? His first book about the zombie preparedness guide. Anyway, maybe we’d broadcast that book and a few classic zombie movies so that people can see what works and doesn’t work.

I should clarify—Outernet is not the Internet. It’s not two-way communication. With Outernet, it’s a one-way broadcast. You receive what we broadcast, and you can filter it.

What would it take for Outernet to become a two-way communication system?

More funding. [Laughs.] If we had an unlimited, deep purse, we’d be able to switch on to two-way communication, but there are actually a few reasons why that’s not ideal, and why there should be a one-way broadcast, sort of as a baseline that is always available, and having a two-way broadcast as more of a premium service.

The first is that, when you have a two-way broadcast, you have transmitters, because now you’re not just having an antenna or a dish or a receiver that is purely a receive-only device, which is what you have with, like, an FM radio. Your FM radio can’t talk back to the radio station, so it’s not as heavily regulated. Whenever you start broadcasting information from a device, you’re going to run into enormous hurdles in terms of telecommunication regulation, pretty much in every country. So we’re able to mostly avoid that.

The second is that, because it’s a one-way data stream, it guarantees the end user anonymity of consumption. When you turn on your radio in your car, nobody knows you turned it on and nobody knows what you’re listening to. So same thing with Outernet. Nobody is able to know—we’re not even able to know—how many people have built a receiver, whether it’s on, what they have on it and what they’re reading. So for those who are very concerned with privacy, especially with all the revelations with what the U.S. government has been doing with the NSA, tracking Internet users’ online behavior, that’s not something we’d be able to give access to even if we wanted to. That sort of shield of anonymity is very important.

Do you yet take donations in Bitcoin?

We do! We have been accepting bitcoins for a little while.

How else can people get involved?

There are actually several ways. The first, as you mentioned, is to donate and support our work financially, which we always appreciate. Short of donating, the biggest help would be signing our list. Adding your name and email to our list is casting your vote in support of a world without censorship and with free information access for everyone, regardless of income or geography. It helps us build credibility, raise
funds, and deliver on our mission. The last way is really pretty basic—just support what we’re doing by adding to the discussion. Go in our forums, talk about what you think about Outernet, why you think it’s important, whether you disagree with it. Some people disagree with it, and think we’re a total conspiracy. They think we’re like SkyNet [laughs].

We just released a video that we think is pretty powerful, about this idea of a world without censorship—what would this world look like if everybody had access to this information? So that is a huge help when people share that video. The more people around the world who know that Outernet exists, the better.

Outernet’s Bitcoin donation address is 12BvyAn2wYHzgCKcJvKfapKgo9G7anEcSX. They are currently holding a crowdfundraiser to make the Outernet broadcast completely global.

You have to hand it to the world’s unofficial richest man – Russia’s Vladimir Putin. He’s running a covert financial war against the Western countries so successfully it makes US banks like JP Morgan look like stooges. The Russian covert underground cyber-army is taunting banks and has become so confident in their abilities they can brag about them before they even pull off their cyber-tricks. The newly reported  K-Mart hack attack was just announced recently but the actual intrusion was already several weeks old.

For the Russian mafia – it’s like taking candy from a baby. They can handle their army of hackers like puppets on strings. What can the US do in return? What is the best weapon the powers of the NSA and FBI can throw back in retaliation? The U.S. admits that they can’t retaliate. So for now, they can only use …. Harsh  language.

Wikileaks indicate that the world leaders already understand that the corrupt Russian Mafia and various thugs and police protection surround Putin as their ringleader. Others consider Putin only a glorified Warlord. Bribery using suitcases full of cash run the country which still operates arms traffic, drugs, prostitution slaves, protection rackets, and other common vices the world has suffered for ages. The Russian police are actually paid to be the protectors for the mafia kingpins and spies.

 US banks and credit card users may be pawns in covert money wars. They snipe the accounts, steal the identities, or shop our personal account information around. Then they use the money to pay the corruption, oligarchs and Putin as it reportedly cost 300 billion per year to keep the bribes going. The banks in the US seem to be doing their part to help the Oligarchs. They dutifully create new accounts and issue new credit cards that will soon be available, once more, to the Russian hackers who then break in and steal those freshly minted credit cards practically before the last ones are mailed out. Then the whole thing repeats again and again. Like the mortgage crisis, the money just gets replaced, insurance and the Fed just paper over the problem and print more. We could avoid the trouble and take the shortcut. Why doesn’t the Fed just print stacks of cash, put it in a semi-truck and drop it off at the Russian border with a big bow around it for them to have? Many bitcoiners already know this system is a paradigm ripe for change.

Russia announced new proposed laws that would seek to ban bitcoin and digital currencies. This would be to their tactical advantage as they have exposed the weakness to the Western banks reliance on credit cards. As banks continue to replace the money and credit cards and reactivate the hacked accounts, the banks and customers become recycled targets for the hackers once again. Russian mafia have long been tied to the secret government officials and through them. The flow of money for the Russians all lead to Vladimir. Chinese and Russian hackers have been relentless against ‘soft targets’ of the US financial system. The latest alert from the London Evening Standard exposes a new target plan to steal another one billion dollars from the banking system that is in the planning stages.

Looking at readers’ comments to these news reports, a common reaction is “so what.” Because the banks replace the cards it seemingly is just a slight inconvenience to the card holder. This may be true on the surface level. However, knowing where the money flows and who it benefits makes the matter more complex. A lot of cash is trading hands, and expenses for the credit card industry will just be passed on to the cardholders. It will be money that will show up as “hidden inflation” in the products they purchase as the credit cards and retailers will charge more down the road to make up the difference. One’s personal identity and personal details are available to a shady group of people. If these people realized their lives are simply financial commodities to be bought and sold like cattle, would it make a difference?

Apple Computers has been on a roll. Now with over 160 billion in cash on hand, they are looking to extend their power and influence to now include the ApplePay system for Point of Sale terminals that will use NFC (Near Field Communication). Payment systems insiders also refer to NFC as (Nobody Freaking Cares) as it’s already been available on Android phones for two years but failed to make much difference. This may create new opportunity as the centralization of payment activities and the possible single point of failure for hackers. Apple still denies the leaked celebrity photos were taken from iCloud, however, insiders have warned that Apple knew for months that iCloud had security problems, as was alerted. The strong denials from Apple would be expected as the timing couldn’t be worse. The dawn of the announcement of ApplePay, which uses iCloud to store the credit card and account details, might land with a “thunk” if people feared their financial freedom was vulnerable to a hacked system.

The alleged hackers of Dutch origin could already be on Putin’s payroll by now. The Dutch group denies they were in it for the money, but the Russian mafia have ‘other means’ by which they compel people to perform for them, and might just make them an offer they can’t refuse. This pot of gold at the end of the ApplePay rainbow may be too lucrative to ignore. Once central locations for all the goodies. That is why it may be doomed to failure. That paradigm is likely ending.

Today, many in the public believe that hackers have been just as successful stealing bitcoin. They’ve pointed to a history of bitcoin hacks like the one compiled by The Guardian. They won’t care about the technical differences between the two kinds of hacks. But it will make a difference to Putin. Bitcoin will be a much tougher beast for him to tame as the market adapts to stronger wallet security. Even if Russian people themselves aren’t allowed to use bitcoin, it will be tougher for the hackers to steal enough credit card funds to pay 300 billion a year in bribery fees once the countries they are stealing from switch to bitcoin.

Don’t feel too bad for Putin. He might be able to get along with only Warren Buffet kind of money. Poor fellow.

 

By: Catherine Bleish

I would like to introduce you to a different method of learning, an education system that mirrors many of the strengths found within the Bitcoin network — unschooling.

As Bitcoin is to the Federal Reserve Note, unschooling is to standardized education. This decentralized peer-to-peer method of learning provides students with the opportunity to follow their own interests and capabilities without the negative pressures and influences found within centralized models of education. Bitcoin provides power to the users and unschooling provides power to the students.

When we look at the whole range of decentralized systems, we see the intrinsic value in such models. In fact, decentralized systems can be found all over nature and society. When you take a bird’s eye view, it seems that decentralized systems are the natural, efficient and secure way for people to function.  This brings clarity to the success found in both Bitcoin and unschooling.

What is unschooling?

The concept of unschooling was developed by John Holt, who identified schools as the reason children were failing to learn. “The human animal is a learning animal; we like to learn; we are good at it; we don’t need to be shown how or made to do it. What kills the processes are the people interfering with it or trying to regulate it or control it.” His first two books, How Children Fail and How Children Learn, revolutionized modern thoughts on conventional education.

Unschooling is often also called life learning, and can be described as child-led learning. It allows you to teach your children the fundamentals of reading, writing, math, and science by creating learning opportunities surrounding their unique interests. I have heard it described as “living as if school does not exist.”

Human beings are learning creatures. It’s how we survive and thrive. We take data, process it, and act upon the conclusions we draw. I have never met a person who does not want to learn, only people who do not want to learn specific topics they are told they must. I was this way. I had to fight my school to let me into classes advanced enough to challenge me. In lower level courses I had trouble paying attention, found myself distracted and longing to be elsewhere. In my AP level courses I found myself focused, driven, and doing work beyond that which was assigned.

Lovers of Bitcoin know that its power is in the network. Decentralized, distributed, peer-to-peer and open source, the Bitcoin network provides protection from the problems that national currencies face. These problems include manipulation by governments and central banks, control of the money supply by one or very few authorities, and a cloak of secrecy in decision making. The Bitcoin protocol prevents these types of scenarios by ensuring the power remains in the hands of the users themselves.

Unschooling provides protection against the problems that conventional education systems face, problems many of us who were educated in the modern compulsory school system know all too well: teaching to a test, forced learning of topics of little interest to the students, indoctrination of particular viewpoints that usually benefit the ruling class, the expectation of all students to learn at the same pace, and a lack of decision making power for the students and parents themselves.

Interest Based Groups

Just as the Bitcoin network uses a system of mining pools where machines work with each other, unschooled children are brought together based on interests and help each other learn by working and playing alongside one another. Children who enjoy gardening get together and get their fingers dirty in the soil. Children who enjoy gaming meet up with fellow gamers and build critical thinking skills. Children who simply want to play outside find themselves at the local park or pool learning valuable communication skills.

This tends to be how we group ourselves as adults. This could be in the work environment where adults who want to work for a common cause or are trained in a specific type of work all find themselves in close proximity. Whether it’s churches, interest groups, or community service groups, we find ourselves surrounded by people who are interested in the same things we are, not necessarily the same age we are.

This is in contrast to the standardized education model of grouping children by age. Yes, it is great to have kids around fellow kids, but ultimately we find ourselves around people of all ages, and it is important to teach your children how to function in interests-based groups as opposed to age-based groups. The modern education system forces children to be in close proximity with the same people year after year, no matter their actual interests or skills. They have to wait for extracurricular activities to get this interaction.

Decentralized Models Work

There are successful applications of decentralized systems all over society and nature. Consider ants who forage for food.  When one ant finds something edible, they release a pheromone to let other ants know there is something worth traveling in their direction to get a piece of. Each individual ant responds to their identification of this pheromone and acts accordingly. When bird flocks migrate, they instinctively know how and when to change positions to effectively travel long distances.

Even humans do this. Watch an aerial video of traffic in a country that doesn’t have traffic signals. Cars, bikes, horses and pedestrians all find a way to their destination without a centralized authority telling them when to turn or how to get there. It looks absolutely terrifying to those of us accustomed to traffic lights and speed limits, but statistics indicate these deregulated traffic environments are safer and have fewer accidents.

Decentralized Education

Centralized networks or structures have a singular point of failure. Look at modern education.  From a national level you can see that federally mandated standardized tests create a centralization of resources, energy and brain power. This really became the status quo under the No Child Left Behind legislation passed by Congress in 2001, and more recently, the controversial Common Core Curriculum. What happens when this centralized method of teaching children fails? It trickles down to every single student participating in the massive standardized testing system. In contrast, a distributed education system is far more resilient and effective, allowing students to follow a unique and personal learning pattern that best fits their interests and capabilities.

Parents who choose to unschool their children are there to facilitate learning, not dictate it. This may mean de-prioritizing the so-called fundamentals. Children seem to be more naturally inclined to hyperfocus on issues, and unschooling may mean allowing them the freedom to do that. When you want to learn, you do. It’s as simple as that.

Applications at Home

If your children are already in school, homeschooled or have yet to begin school, you can begin to apply this philosophy into your daily life. Understanding that humans are designed to learn, you can feel confident giving your children the freedom to explore the universe in a less structured fashion. This could manifest in outdoor play time, exploring age-appropriate websites and social media, making crafts, or simply helping you in your day-to-day routine. You can plan family outings to museums, nature centers, or attend a local unschool meetup.

More specifically, to facilitate math skills and financial management, ask your children to pay at the checkout counter. To teach them about health and nutrition, ask them to plan one meal or more per week. Help them shop for and cook their meal to encourage strategic thought and an understanding of chemistry in the kitchen. This will empower your children and help them prepare for life outside of your nest.

What other ways can you create a learning environment for your children? In our house we provide constant access to age and skill appropriate toys, games, books, crafts, and movies. We bring our children with us almost everywhere we go, allowing them to interact with a wide range of diverse people. We attend local unschool and homeschool meetups and make sure to attend community events in our town.

Some parents are resistant to the idea that their children will learn all the necessary skills to function in life without a standardized curriculum. The most convincing opportunity for me was attending the Rethinking Everything Conference two summers ago. I was able to witness hundreds of unschooled children and their families. These children were the most empowered, passionate and creative children I have ever met. Many of the teens have their own businesses and nearly every child was far more advanced compared to their compulsory schooled counterparts.

Attending this conference allowed me to meet adults who were unschooled as children. Not one of them was unhappy or dissatisfied with their educational background. Many entered and attended college, graduating with honors, and were successful individuals. If you are curious about this decentralized method of educating your children, I highly encourage you to expose yourself to these students.

Like Bitcoin, the strength of unschooling is in the network.

If you are interested in unschooling, here is a list of resources you can check out:

• unschooling.com
• sandradodd.com
• daynamartin.com
• thebitmom.com

There are even conferences you can attend to learn more and gain exposure to the beauty unschooling can bring into your life.

• rethinkingeverything.com
• liferocksconference.blogspot.com
• unschooler.com/conferences

Happy decentralized learning!

New York City, NY (October 15, 2014) Launching today, The Beyond Bitcoin Expert Calling Network,(BBECN) is an innovative new service that provides access to thought-leaders and experts, covering a wide range of the Bitcoin ecosystem. It is the world’s first expert calling network devoted to all things Bitcoin – including Altcoins and Blockchain applications – and features well-known experts who speak around the nation, and the world, on the subject.

Bitcoin and the Blockchain may be the most important innovations since the introduction of the Internet. Many businesses, as well as the general public, want to understand this disruptive technology. The BBECN is a web-based service that allows anyone to speak directly to leading authorities in Bitcoin and related digital assets and platforms. It features a hand-selected group of recognized experts in the field, and covers a wide range of game-changing categories that can help callers make more informed business and technology decisions, for multi-sector growth.

“There are many of questions about Bitcoin and the new applications it makes possible. Professional digital currency consulting can be prohibitively expensive for ‘real people’ who run small- to medium-sized businesses, and budgets don’t necessarily allow for companies to attend the growing number of cult-like Bitcoin conferences, so the BBECN provides an affordable entry to high-level understanding.”, stated Rik Willard, CEO of MintCombine, Inc., the BBECN’s Network Sponsor.

The BBECN provides cost-effective access to the same professionals hired by large corporations for many thousands of dollars. It is designed to give callers – especially individuals and small businesses – a better understanding of the Bitcoin ecosystem without breaking the bank. Willard believes that this will let people plan for what is coming more effectively, and armed with timely and relevant information.

BBECN Expert Joseph Lubin, COO of Ethereum says the service is necessary because “… the decentralization revolution is happening in many industries and monetary and political systems around the globe. Pushing knowledge, technology, power and control down to the grass roots of society is forging fairer and more flexible systems. You can see this in peer-to-peer, sharing-economy businesses like Uber, Lyft, Airbnb, and TaskRabbit as they disrupt industries that were somewhat stagnant by streamlining old business models.  Decentralized, blockchain-based, consensus formation technologies, like Bitcoin, Ethereum, and others enable this trend to progress to the next level”.

Following Lubin’s logic, Willard added, “This information is no longer exclusively for the elite tech world, fanboys, and large corporations. Digital currency ecosystems will affect how we transact business, write contracts, interact online, support causes, promote products and grow markets… and it is all happening NOW. Through the BBECN, real people and businesses will finally have direct access to the experts who are defining the way forward.”

BBECN Experts cover a broad range of “mainstream” topics including technology, regulatory issues, marketing, and even the music industry. They were selected based on their ability to translate complex concepts into practical, useful information. The BBECN launch features the following Experts:

Juan Llanos, Nationally acclaimed Anti Money Laundering and Financial Compliance expert, and a TED speaker.

Joseph Lubin, Chief Operating Officer of Ethereum, a “Bitcoin  2.0” entity that recently completed a $15 million raise.

Rik Willard, CEO of MintCombine, which creates digital asset-based consumer engagement programs.

Tatiana Moroz, Singer/Songwriter who issued TatianaCoin, her own digital currency, to help finance her music career.

Ray Garcia, Digital payments expert.

Adam Levine, Founder of Let’s Talk Bitcoin and the LTB Coin.

More experts will be added to the service each month.

The BBECN platform is provided by Fanaticall, Inc. a Washington DC-based company that creates customized Expert Calling  Networks. It is sponsored by MintCombine, Inc., a think-tank and product lab for digital assets including Bitcoin, Altcoin and Blockchain applications for consumer engagement, is the Network Sponsor.

“Digital currencies and their supporting ecosystems are complex, changing rapidly, and will have a profound impact on our lives,” stated Brian Christie, CEO of Fanaticall. “We are pleased to provide the technology that powers the Bitcoin ECN as it showcases how an Expect Calling Network can help make knowledge sharing more accessible to everyone.”

Interested parties can send an email to [email protected] for more information, or call  646-807-8170.

About MintCombine, Inc.:

MintCombine, Inc. is a bespoke digital asset developer for a new world of “Enlightened Consumer Engagement”. With expertise in global branding and advanced technologies, its network of digital and marketing professionals design solutions for clients to help them benefit from emerging digital currency ecosystems. As the BBECN network sponsor, MintCombine sets the benchmark for creating understanding, transparency, efficiency and results for all client stakeholders. Beyond Bitcoin Expert Calling Network^SM and BBECN^SM are Service Marks of MintCombine. Read more at www.mintcombine.com.

About Fanaticall, Inc:

The BBECN platform is provided by Fanaticall, Inc. a Washington DC-based company that creates customized Expert Calling  Networks. MintCombine, Inc., a think-tank and product lab for digital assets including Bitcoin, Altcoin and Blockchain applications for consumer engagement, is the Network Sponsor.

Inside Bitcoins Conference & Expo, the leading trade show for the fast-growing bitcoin and related cryptocurrency, will be launching in Israel later this month after successful events earlier this year in Berlin, New York, Hong Kong, Melbourne, London, and Las Vegas. From October 19-20, thought leaders, virtual currency experts and business visionaries will converge at Kfar Maccabiah Convention Center to lead a discussion on the first digital, decentralized, peer-to-peer based global currency.

Whether you’re a venture capitalist, lawyer, technologist, or entrepreneur, the conference agenda offers a diverse and exciting array of topics that shed light on the implications of bitcoin, along with predictions on the opportunities and challenges that lie ahead.

Featured speakers include:

• Peter Todd, Bitcoin Core Developer
• Meni Rosenfeld, Chairman of the Israeli Bitcoin Association
• Tamar Zandberg of the Israeli Parliament
• Vitalik Buterin, Co-Founder of Bitcoin Magazine and Ethereum

And many more! View the full speaker list here.

Inside Bitcoins Tel Aviv will also feature a bi-directional Bitcoin ATM, which will be placed at your service.

 

 

 

 

 

 

 

 

We’re pleased to announce that Bitcoin Magazine is once again partnering with Inside Bitcoins to offer all readers 10% OFF a full conference pass. Enter code BMAG14 at checkout to redeem your discount. Register now!

 

The initial Storj crowdsale has finally come to a close, and the Storj team is pleased with the results, having raised at least 910 BTC. Although they are still hard at work on furthering development, the funding raised for their decentralized cloud storage platform exceeded their expectations.

Storj, for the uninformed, is designed to allow users to store files over their peer-to-peer network. Using Metadisk, one can upload content to the network for distributed storage across its participating nodes; users either pay for this service in Storjcoin X–known as SJCX, the network’s native currency–or allow the network to store an equivalent amount of data on their own computer. This undercuts traditional corporate cloud storage services by an order of magnitude.

The Storj team promises to put the money from their crowdsale to good use. Some of it will be used to reimburse people for prior expenses paid out of pocket, and pay for salaries for full-time contributors as well as freelance work. The rest will go to further cloud storage development, research into decentralized technology, marketing and PR, community initiatives and projects, and legal counsel.

In addition to helping promote a decentralized Internet and earning Storjcoin X, crowdsale participants will receive early access to DriveShare. DriveShare is another cloud storage application, but its purpose is slightly different from Metadisk: primarily for those who just want to make SJCX and have plenty of hard drive space to spare, it allows users to rent it out to the network. As soon as the beta is live, contributors will be given access in the order in which they contributed, until it’s ready for full public release.

Transparency is very important to Storj, and they have released a full list of their team members upon request. They want to make sure all funding is properly allocated, so you can track all of the bitcoins they raised from the crowdsale at address 132aBrspLgL54cm9eQfGNFLGqXwBRQrugc, as well as the leftover Storjcoin X at 19KvumZgcs2owq9tF2obyg1SBmXDVdzNnW. Most of that will be used to reward users who contribute resources to the network.

Most SJCX has not yet been generated, but the developers plan to use a timelock transaction to ensure they cannot be arbitrarily spent. 75 million of those will be spent on community organization, such as elections. Another 75 million is reserved for platform developers working full-time or those seeking to earn development bounties. The rest will go to bounties encouraging the development of new apps on the Storj platform, and future crowdsales if necessary.

Going forward, the Storj team hopes to to make centralized services like DropBox a thing of the past, and are excited for the future. To get more news and updates as they come, you can subscribe to the Storj newsletter via their website, or register on their forums where there’s an active community to help you. You can email questions or comments to [email protected]

You’ve probably heard it many times if you frequently spread the good word about crypto. “Isn’t Bitcoin volatile? What if the price crashes?” By now, many POS systems offer free fiat conversion, alleviating some concern, but until the volatility of cryptocurrencies is addressed, most people will be unwilling to hold any. We need to find a way to fight the volatility that is inherent in Bitcoin.

This doesn’t necessarily mean Bitcoin has to change; many people prefer to use a deflationary currency, especially those who like to save. Despite the skepticism of many altcoin critics, a currency can be better suited for some applications than others. Financial privacy, for example, is great for political activists, but more problematic when it comes to political campaign finance. We need a stable cryptocurrency designed for use in commerce; unless you’re living paycheck to paycheck, this would be held as only a fraction of your wealth, the rest reserved as other coins like bitcoins.

Backing Cryptocurrency

Some of these methods require a little trust. Using smart contracts on blockchain 2.0 platforms, developers can now build cryptocurrencies backed by items of “real” value. The trusted third party promises to redeem cryptocoins for those items at an ongoing fixed rate; assets like .bit domain names would be simple to do this with, while backing with things like commodities, real estate or other property requires interaction with third parties like the traditional legal system.

Rather than fluctuating wildly with the free market, the values of of these cryptocoins are proportional to that of their underlying assets. You just have to pick the right one: commodities like oil which fluctuate in value throughout the year would not make for a stable currency. GENERcoin is working on a cryptocurrency backed by biofuel pellets–10,000 BTUs of energy-worth per coin. Its value would be related to the value of that much electricity, minus the cost of the energy generation process.

People will surely think of more stable assets in the future. For now, the dollar may still be one of the most stable options. Interestingly enough, cryptocurrencies can be backed by dollars, too, an idea proposed by Realcoin (soon to be called Tether). They will keep a publicly-auditable reserve of USD not less than the value of all Realcoins in existence, which the company will exchange for one another at any time.

This is particularly useful for FOREX traders, who previously had to rely on centralized currency exchanges in order to speculate on currency exchange markets; even if the dollar is destined to crash, there’s profit to be made in shorting it, which will be cheaper and more efficient as smart contracts on the blockchain. Realcoin effectively allows you to do that by mimicking the value of a dollar.

Conversely, when Bitcoin experiences periodic sell-offs, you can exit and re-enter the market without any direct interaction with the traditional banking system. Realcoin could also be used transactionally in times of extreme Bitcoin volatility. In the long term, though, Realcoin will go down in value as surely as Bitcoin will go up, and when the dollar inevitably collapses, we’re going to need a new form of stable currency that doesn’t rely on state control.

Basket Case

Before returning to the question of how to automate the authorities in our lives, it’s worth talking a little bit about the idea of basket coins. Essentially, basket coins are the same as value-backed cryptocurrencies, except that they are backed by more than one item. They can be traded as normal on the blockchain via a 2.0 platform; choosing the right combination of items to represent a basket coin can give it interesting properties.

The basic reason critics are skeptical of altcoins is that they fear the dilution of the cryptocurrency market: altcoins currently get most of their capital from previous Bitcoiners, not by converting new people to crypto. This is the unfortunate result of technology advancing faster than mainstream culture, and our common drive to be first at everything. As convenient as it is for branding reasons, however, a new flagship cryptocurrency must emerge.

The only good way to test the dilution theory–and more importantly, avoid the consequences if it’s correct–is a basket currency consisting of all the major cryptocurrencies, tied together via smart contracts on a 2.0 platform. A smart entity known as a DApp would have addresses for all of these, where it holds enough coins to reimburse those wanting to exchange for their basket coins. A basket coin would be worth a number of each cryptocurrency proportional to its total market share, and inversely proportional to its total number of coins–basically, the (weighted) average of every significant cryptocurrency on the market.

This is great for those who want to invest in crypto with less speculation, especially once we include things like equity in decentralized autonomous corporations. However, if cryptocurrency as a whole fluctuates for whatever reason, adoption for use in commerce will still suffer. What we’d need in that case is a coin backed by a perfect, continuously-adjusted combination of deflationary and inflationary cryptocurrencies that evens out to 0% inflation in total.

Even with general cryptocurrency baskets, the DApps will have to operate on fractional basket reserves to a small extent, investing with some of the funds saved for basket coin holders in order to recoup costs like data storage and trade fees. Programming DApps to intentionally invest in less profitable coins to maintain 0% inflation will force them to run on even flimsier fractional reserves, which could lead to the equivalent of a bank run if the conditions were just wrong.

In Math We Trust

All of these complications arise because we cannot find just one currency that can maintain stability without inflation. Without some manipulation of the Bitcoin supply, market forces will always cause it to fluctuate wildly in value. History has shown that humans cannot be trusted to manipulate a money supply responsibly, but maybe using the principles of decentralization and the blockchain, we can engineer a smart currency capable of regulating itself autonomously.

The primary means by which we can do this is by adjusting the mining difficulty or reward. Dollars dilute in value because they can be arbitrarily printed; if a currency is diminishing in value, a logical solution would be to reduce the number of coins generated with each block mined. Conversely, increasing the reward could help limit an unstable surge in value, helping to reduce the momentum and reach of price swings.

A major limitation comes to mind: what if the block reward hits 0, and the coins are still inflating in value? This scheme might work better in a proof-of-stake system, where control of the money supply is relative to how many coins one has on reserve. If the reward hits 0, those minting coins will have to rely on transaction fees, which twice-incentivizes hoarding by giving coins to those who stockpile them while taxing those who conduct transactions.

Like any currency, insufficient market demand could render such a system unstable. If enough people want to sell, the price will have to fall. It might be ideal to program the currency to maintain slight deflation, to make for a safer alternative investment to other cryptocurrencies.

No matter what, it will always be a better alternative to fiat in the bank. The executive power governing the currency would be a non-profit decentralized autonomous organization, and the blockchain will never need to raise money for anything from public education to wars abroad. Programmed correctly, it will simply do its job, quite unlike the central banks we have to deal with today.

In 2014 we saw the release of the first hardware Bitcoin wallets. Now the unicorn is real: offline coins that can be spent, using an Internet-connected and even malware-infected computer, all without risk of losing your money.

How is this possible? It’s important to first understand how bitcoins get stolen.

To say that someone’s bitcoins are “on her computer” is actually a misleading statement. What is stored on a Bitcoin-owner’s computer is actually the private key that corresponds to her Bitcoin address (the public key). When the owner wants to spend her funds, her wallet software combines her private and public keys to create a signature—the digital equivalent of signing the back of a check. This digital signature unlocks the funds and they’re now spendable.

This is why storing your private key in an Internet-connected laptop, desktop or phone—or with an online wallet service—always carries risk. It’s always possible that malicious software (“malware”) could enter your device through the Internet, enabling someone to discover your Bitcoin private key and spend your money.

Cold storage savings—that is, sending your bitcoins to a public address whose private key is not stored on any Internet-connected device—provided an answer to this problem. But it was inconvenient. You couldn’t spend from your savings without first importing the private key into Internet-connected software, defeating the whole purpose of cold storage. Could a “hot” wallet (spend-ready) and a secure wallet ever be one-and-the-same? This unicorn—cold storage you could spend from—was what we were all hoping for.

Hardware wallets appeared as the white winged creatures, and the most popular among them is the Trezor.

The Trezor, which is not Internet-enabled, stores your private key. Using the USB cable provided, you connect it to your computer and create a wallet at MyTrezor.com. The Trezor device then generates a seed of 12, 18 or 24 random words (your choice) on its own small screen, which you write down and store away. These words never touch the Internet and can be used to recover your private key if your Trezor is ever lost, destroyed, or stolen.

You can also choose to enable PIN and/or passphrase protection, so that if your device were ever stolen, the thief would also have to know two additional pieces of private information to access your coins.

Worried that your computer could be infected with a keylogger (malware that records your keystrokes)? You’re still safe. If you choose to enable PIN protection, MyTrezor wallet will ask for your PIN before a transaction is sent. The 9-digit number pad is only displayed in cleartext (scrambled out of standard order) on your Trezor itself. Only question marks appear on your computer screen, which you click with your cursor.

You may be wondering: what if I want multiple private keys because I (duh) want to have more than one Bitcoin address? No problem. The Trezor is a deterministic wallet, which means that an unlimited number of public addresses are recoverable from the same, single seed.

The Trezor is the creation of Prague-based SatoshiLabs, which was founded in fall 2013. All the software for the Trezor is open-source and viewable on GitHub, and the device ships for free internationally. At the time of writing, a Trezor costs 0.32 BTC ($119 USD).

If you own or plan to own bitcoins, and if you’re worried about computer security (who isn’t?), consider shopping around for hardware wallets. Store your private keys offline while retaining the ability to spend your Bitcoin easily.

Bitcoin ATMs have become one of the symbols of cryptocurrency, with multiple competing manufacturers and hundreds of units deployed around the world. Despite their growing popularity, however, Bitcoin ATMs are still vastly outnumbered by traditional financial terminals. While more Bitcoin ATMs are undoubtedly on their way, one of the best ways to reduce this disparity is not by building new units, but by converting existing terminals to handle bitcoins.

This is the route being taken by Bitcoin Romania, the operators of one of the world’s busiest Robocoin machines located in Bucharest. “It is our dream to see Bitcoin become a viable payment option in Romania, and to show the rest of the world that it can be done,” said George Rotariu. “We believe that in order to realize this goal we need to leverage existing infrastructure and make bitcoin available to as many users as possible.”

Their company has been partnered since May with CoinTrader, the Vancouver-based international Bitcoin exchange that supplies their bitcoins for sale. It’s operated by the Bitcoiniacs, known for having launched the world’s first Bitcoin ATM at a downtown coffee shop. They enable the exchange of Bitcoin for Romania lei, with an additional fee added when using a terminal or Bitcoin ATM. They conduct similar operations in Singapore, London and Tokyo.

The terminals they’ve chosen to integrate with are run by ZebraPay. They have over 1,000 units operating in Central and Eastern Europe, capable of paying insurance, phone and utility bills, and for gift cards, flight tickets, the lottery or video games. They’re convenient for those lacking home computers, and this latest move allows users to buy bitcoins, as well.

The process is fairly simple once you set it up. “To buy on the terminal you simply select BitCoin Romania, and then either enter your full bitcoin address, or a shortened btcaddr.es address, then put in your money and hit buy. The coins are sent instantly to your wallet. The fee is 4%, and you can buy up to 5,000 RON (approximately $1,400 USD),” explains Jackson Warren, one of the cofounders of the CoinTrader exchange as well as the Bitcoiniacs.

ZebraPay has ambitious plays for the future. “We believe the new Bitcoin feature will be very helpful to our current expansion plan in Latin America, Africa and Asia,” said Adrian Badea, the company’s CEO. His statement seems to suggest they have further Bitcoin integration plans, although no such thing has been confirmed. It would, however, be far more cost effective than building hundreds of entirely new machines just for exchanging bitcoins, and could lead to even more useful features.

The exchange is currently only one way (bitcoins are sold to customers in return for fiat), but Adrian was able to confirm that they plan to add the ability to fund your ZebraPay account with Bitcoin. This would effectively allow Romanians to use Bitcoin to pay for a wide variety of ZebraPay-connected services, bills being one of the more exciting options. If enough Bitcoiners used such intermediary payment services, it would send a clear message to the phone, utility, and billing industries about the value of cryptocurrency adoption.

Until that catches on, CoinTrader and Bitcoin Romania will be happy to supply ZebraPay with exchange services. There’s profit to be had in spreading Bitcoin adoption.

In the 19th century, gold and silver coins were a common currency used as medium of exchange between individuals transacting directly between each other. Although paper money became a convenient way to carry and use as medium of exchange, gold and silver coins were given priority for their trust and safety. Equivalently, not all individuals trusted banks for storing their gold and silver. The combination of bank robberies and bank runs contributed in making individuals weary of storing all of their wealth at the same bank. Many rather preferred to implement a strategy of diversification by being the client of several banks and storing some of their wealth (gold and silver) themselves.

You might be wondering why I’m bringing this up. Well, I’d like you to keep this first paragraph in context while I share this proposal. One of the main issues frequently brought up about Bitcoin relates to scalability. Several concerns emerged regarding storage, bandwidth and capability to handle several thousands of transactions per second. In this regards, I’d like to propose an implementation that would address most of these concerns. But at the same time, this proposal comes at the cost of partially losing the benefit that comes with decentralization that Bitcoin inherently has. Do not worry, the proposal does not change Bitcoin itself.

So let me continue. Imagine a separate block chain (or ledger) handling a high number of transactions, being rapid and efficient but all at the cost of being semi-centralized. This separate ledger, still publicly available to anyone, would be maintained by a handful of companies such as Coinbase and BitPay that are currently already facilitating transactions between consumers and merchants. Currently, Coinbase aggregates its account in various bitcoin addresses, with no specific association between a given bitcoin address identified on the blockchain and their users’ account. When one Coinbase user sends a payment to another Coinbase user, Coinbase’s internal accounting handles this transaction without any involvement of the Bitcoin network. Equivalently, another company in the world might be doing the same thing. However, whereas such internal transactions are possible between users of the same custodian, any exchange between users of different custodians must be handled and recorded on Bitcoin’s blockchain, and subject to its scalability limitations.

Currently, Bitcoin has a certain limit on the size of each block, hence this translates to a limit on the number of transactions per block. With an approximate 1 block every 10 minutes, this imposes a hard limit on the number of transactions per given period. The Bitcoin protocol will be changed eventually to increase this value, and it is suspected that by that time, the Internet bandwidth and storage capacity will have also increased, thus allowing for such change. This subject was brought in a conversation with Satoshi Nakamoto. Until then, we have this limitation which does not impact Bitcoin users for the moment as there are only 3 to 7 transactions per second right now, well under the limit.

As of now, transactions between users of the same custodians are only limited by the capacity of the custodians, which can adapt to follow their customer’s need. But if there was a separate blockchain or ledger as I’m proposing here, that would allow a direct transfer between users of different custodians, without the current limitations of Bitcoin in transfer rate; we would have the capability to handle a high number of transactions. Suddenly, the amount of transactions that we could send per second could rival the amount processed by Visa and MasterCard.

Now, there are multiple ways this could be implemented, one of which would be the selection of 10 custodians that each turn, update this separate ledger for the next hour, or 24 hours, sort of like a temporary “master custodian” with a similar role as miners on the Bitcoin network. Custodians sending the bitcoins would collect the corresponding transaction fees, sending the transaction information to the Master custodians and to other custodians in their mesh network.

Addresses on this network would all begin with say the number 5 and be followed by a 5 letter keyword identifying each custodian. When say, 1.1 BTC is transferred from custodian “Alpha Storage Inc” with keyword ALPHA to custodian “Omega Bitbank Inc” with keyword OMEGA, the following transaction would be recorded:

5ALPHA2jfj38thf82759hsy2   1.1 BTC

To

5OMEGA9kdhj38chkut7wyn

A user of custodian Omega Bitbank would request from Omega Bitbank to generate an OL (Open Ledger) address which will start with “5OMEGA” and will then share it with the user of Alpha Storage for him to send the payment to.

In addition to this, an inventory listing of each bitcoin addresses held by each custodian will be available at all times and be provided by the respective custodians. Anonymity would still be preserved but we will have the added benefit of knowing precisely how many bitcoins are currently held by each custodian. For example, with Coinbase, right now we do not know which bitcoin addresses are under its control, which would not be the case with such implementation. Such implementation will render existing custodians to a more open form of accounting.

Finally, just as with banks today, every night they adjust their accounting by balancing their book with a wire transfer. During a given day, Alpha Storage may have sent a total of 202.44 BTC to OMEGA while Omega Bitbank might have sent 198.33 BTC in payments to Alpha Storage. As such, Alpha Storage would be sending the difference (4.11 BTC) on that night on the traditional Bitcoin network. This is an important requirement as customers of Omega Bitbank might not trust Alpha Storage (or vice versa). It does not have to be done every 24 hours, it could be more often, such as automatically every 6 hours.

In conclusion, just like people were transacting only in gold and silver coins, Bitcoin users who are still concerned about any custodians can stay in the existing Bitcoin network and exchange directly among themselves. At the same time, a great majority of users will be using custodians with a much more open system than we have currently with the traditional banking system. They will benefit with the rapid and high capacity of this custodian ledger network while still be able to benefit from the current Bitcoin network at their own will.

I look forward to reading your comments.

Why we won’t be a part of the Bitnation Crowdsale.

This is an article written by the three most senior members of the Bitnation team (save for the CEO). It’s written from the perspective of each of us individually.

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First, who am I? I’m the guy who got married on the block chain last weekend. I’m a true believer in the Bitnation concept. I’ve owned UnPassport.com and SovereigntyNow.com for years, even though I’ve never actually developed them. You might call me a zealot. Until recently I’ve been an advisor to Bitnation and trying to help to launch it, even though I’ve disagreed with the manner in which it was being handled.

 I can no longer stand by and allow this crowdsale to continue.

First, the manner in which it was conducted, especially in the last 72 hours is offensive. We’ve had people working nonstop for days, people go to hospital from exhaustion, vendors pull out at the last minute due to legal reasons while we’ve continued to obliviously plow forward.  I refuse to be a part of a machine that builds a company on broken bodies. That is what our opponents do, and I won’t be a part of it.

Second, I worry about the legality of the crowdfunding. While we have talked about locking out US investors based on their IP in order to comply with the law, we have not actually done so. It’s unethical, not to mention illegal to continue to raise funds in this manner. While we may not agree with laws or government regulations, they have a weight and a cost measured in thousands of dollars and years of time. It’s unconscionable to put people’s lives and freedoms at risk for the sake of money, or even for a shining vision on the hill. It matters not only what your goal is, but also the manner in which you achieve it.

Third, and most importantly I worry about the investors. I worry less about the “whales”, and more about the poor disenfranchised people of the world. The ones that will contribute their last $5 because they want to see a better future and who will be disillusioned when their money is lost or misspent. I refuse to be a part of anything that will damage the concept of a “BitNation” in the future. As I said before I’m a true believer in the power of Transparent Crypto Ledgers to make the world a better place, and if this implementation fails and is branded another “Gault’s Gulch”, the damage to the concept will take years if not decades to resolve. I simply cannot stand by and watch that happen.

And so on the basis of those three points, on the basis of my conscience and for the future of my children, I urge all of you to not participate in the Bitnation launch at this time. Hopefully in several months or perhaps a year or more this team will come back, stronger than ever and launch a better TCL governance project.

Thank you

David Mondrus

 

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Dear Community,

My name is Nathan Wosnack, I am the former Chief Communications Officer at Bitnation. I was originally hired with the organization to help with spreading the word via media/communications division. Throughout the last month, as we approached the crowdsale launch date, it became ever-increasingly apparent that our organization was not prepared for the crowdsale launch despite the brilliant and dedicated team working tirelessly.

 As time progressed, it also became apparent to me that the crowdsale launch may be breaking securities laws by offering cryptoequity to the public without specific structures in place. The lack of a registered corporation, the lack of a dispute resolution form to accompany our business plan and prospectus, the lack of proper employment agreements with staff, and a lack of a solid business plan at the last moments before the October 10th launch was very concerning to me as a member of the Bitnation team.

Furthermore, the treatment by a leader of our organization towards me when I had a potentially life-threatening situation, the overworking of developers, and the selling of a bill of goods to the public which is deceptive is something I cannot and will not be a part of.

We’re talking about the poor and the developing nations who are struggling to get by. Bitnation as a concept is beautiful and a way out for many in the world, but the way it was executed will not work and only – in my opinion – continue to cause more harm than good for them, the staff, and the cryptocurrency community.  I will continue to believe in the necessity for freeing people from the shackles of the old system using blockchain technology, but it must be done in another way, at another time.

I am honoured to have worked with many of the people I did on our team, to have attended the Coins in the Kingdom Conference in Florida, and to have inspired people to look at blockchain technology in a brand new way for the first time. Even though this didn’t work out as planned, I will continue to march ever-onward in this crypto-space.

Regards,

Nathan Wosnack

 

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Dear Community,

My name is Matt McKibbin.  I have been a part of Bitnation as a communications partner for about a month.  I came on board with the idea because of my passion for how the blockchain will enable and empower individuals all over the world.  I saw this project as a way to help people in developing nations construct and implement governance services they have never had the privilege of having.  The concept of designing applications for land registry, incorporation, and dispute resolution on the blockchain still intrigues me to this day and I think has a bright future in society. However Bitnation cannot be the one to bring those services where they are desperately needed.

Over the past couple weeks it has become apparent to me that our organization is not and was never going to become legally, or structurally prepared for handling funds from the world.  The cryptoequity crowdsale would have been breaking securities regulations in many different jurisdictions.  Furthermore, I cannot allow myself to be a part of something which plays on the idealistic visions of many people all over the world when I know the structure  and management of the organization would not allow it to succeed.

I continue to be optimistic for blockchain technology in the future.  I think once regulatory uncertainty is lifted this technology will be able to prosper to its full extent.  I would like to thank the community for all the inspiration and support which I have seen.

Best Regards,

Matt McKibbin

As someone who spends one to two hours every day reading about Bitcoin, I assumed that the newly released documentary “The Rise and Rise of Bitcoin” wouldn’t have much to offer me. I assumed it would be some sort of primer for people who are unfamiliar with the technology.

Boy, was I wrong.

I wouldn’t have watched it, except that members of the Bitcoin subreddit kept posting rave reviews about it. One redditor even posted, “Just watched ‘The Rise and Rise of Bitcoin’. I immediately bought 5 Bitcoin during the credits.”

A film that stirs almost $2,000 worth of emotion in the soul of a crypto fan is enough to get me interested. So I headed on over to The Pirate Bay (which, to my delight, is going by “The Peace Bay” these days) and partook of a shared copy.

What I thought would be a primer was actually a rich chronicle of highlights of Bitcoin’s young history. But more than a yearbook, the film offered meaning for all of its stories, spoken by the people who lived them.

The documentary is narrated by Dan, a 35-year-old Bitcoin miner, father and computer programmer, as he travels the world for a year to record the history of Bitcoin firsthand. Dan attends Liberty Forum and PorcFest in New Hampshire, where almost every merchant accepts Bitcoin long before crypto fans were courted by the likes of Overstock. He takes us into the cozy Salt Lake City kitchen where Casascius Coins—arguably the most popular image of Bitcoin in the world—are made by hand.

We then visit San Francisco, where a shadow-faced “Mr. Bitcoin” explains how cryptocurrency and the Silk Road have removed much of the danger from his small-time drug trade. Dan visits Charlie Shrem, former CEO of BitInstant, right as his company triples its sales volumes. You can actually see the sweat on the brows of these young entrepreneurs as they fill a giant void in a trading world in which they only had one real competitor: Mt. Gox.

And speaking of Mt. Gox—want to see Mark Karpeles struggle to play piano? How about confront a guerilla journalist who wants his coins back? Or perhaps inside the “vault” where the coins held by Mt. Gox were said to be held? Then you’re in for a treat.

Next, watch Roger Ver single-handedly introduce Bitcoin to a grocer, convince him to accept it, set him up with BitPay and cryptographically purchase an iced tea from him all in one afternoon. See the grocer get a light in his eyes as it dawns on him what a future of decentralized money can mean for his business.

Erik Voorhoos in Panama, Vitalik Buterin camping, Dorian Satoshi Nakamoto during his now-famous “free lunch”: all these key players and more tell their stories in a filmed yearbook that could reasonably be called “Bitcoin’s First Five Years.”

Pièce de résistance is French for “piece of resistance” and is used to describe a highlight or main attraction. While this film is definitely that, there is also something more: resistance itself. Most individuals in the film, in one way or another, resist the paradigm that money must come from a monopoly. In doing so, they’ve created an infrastructure that has the potential to benefit all of humanity.

The film is available through a paywall on the film’s official site, and has also recently been uploaded to YouTube. After I finished viewing my shared copy, I went to the film’s site to donate my thanks to the producers. Unfortunately, they’ve posted no donation address anywhere that I can see.

And so perhaps while the makers of this film continue to promote the idea that money—that is, property—need not and should not be monopolized, they’ll also come to realize that ideas are not property, and that locking them behind “copyright laws” only slows the spread of information and—hence—innovation.

Now go pop some popcorn, gather your non-crypto friends ‘round (especially important), and enjoy this piece of literal resistance.

Update: Further hunting revealed that the film’s Twitter account, @BitcoinDoc, lists their donation address: 19xb2pAzyv7feFkBhbh3n3rtBJ9JPTufm. May we all one day contribute something of such value that people hunt down ways to give us money!

Bitcoin Shop Becomes Provider of Digital Currency Information for ivee, the Voice-Activated Assistant for the Smart Home

Arlington, VA – (October 8, 2014) – Bitcoin Shop, Inc. (OTCQB: BTCS) (“Bitcoin Shop” or the “Company”), an operator of the digital currency ecommerce marketplace www.bitcoinshop.us which is undertaking the build-out of a universal digital currency ecosystem that leverages its ecommerce platform as an on-ramp, today announced that it has become the default provider of digital currency information for ivee, the voice-activated assistant for the smart home.  Additionally, ivee is now available for purchase with bitcoin, litecoin or dogecoin on Bitcoin Shop’s ecommerce platform.

ivee is the first voice-activated home assistant that answers questions, obeys commands and controls other Internet-connected devices. ivee can tell you the weather in any city, control your smart thermostat, provide stock quotes, bitcoin prices and more, all while allowing you to set your alarm or listen to music without touching a single button.  Bitcoin Shop will be ivee’s exclusive provider of information for digital currencies like bitcoin, litecoin and dogecoin.

A video of ivee in action can be found here:  http://youtu.be/aZ4BpywlKGo

Charles Allen, Chief Executive Officer of Bitcoin Shop, commented, “We are thrilled to be partnering with ivee as we believe connecting the Internet of Things to digital currency is a great way to generate awareness and adoption of digital currencies.  ivee allows digital currency adopters to have instant, voice-enabled access to bitcoin, litecoin, and dogecoin pricing and other relevant information.”

“As a forerunner in the connected home space, it’s only natural that ivee’s areas of expertise grow to encompass other new and innovative technologies such as digital currencies,” said Jonathon Nostrant, CEO of ivee.  “We’re pleased to work with Bitcoin Shop and to offer ivee users instant access to digital currency information.”

 

About Bitcoin Shop, Inc.:

Bitcoin Shop, Inc. plans to build a universal digital currency platform with the goal of enabling users to engage in the digital currency ecosystem through one point of access.  We currently operate an ecommerce website (www.bitcoinshop.us) where consumers can purchase products using digital currency such as bitcoin, litecoin and dogecoin, by searching through a selection of over 400 categories and over 140,000 items.  All ecommerce customer orders are fulfilled by third party vendors.  We plan to use our ecommerce platform as a customer on-ramp for a broader digital currency platform.  We have been actively partnering with strategic digital currency companies who have technologies, services or products that are complementary to our business strategy by making investments in them and integrating with them.

Digital currencies use peer-to-peer networks to facilitate instant payments.  They are categorized as cryptocurrencies, as they use cryptography as a security measure.  Digital currency issuances and transactions are carried out collectively by the network, with no central authority, and allow users to make verified transfers.

About ivee:

Interactive Voice Inc. (“ivee”) was founded in 2011 as a consumer-focused, voice-control electronics company. ivee works at the intersection of artificial intelligence, speech recognition, natural language understanding, and the Internet of Things. Since 2011, ivee has made voice-activated devices, which can be found at stores like Best Buy, Staples, Office Depot, and Brookstone.

 

For more information about ivee, please visit the company’s Web site at helloivee.com.

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In May of this year, start-up Coinme released their first Robocoin kiosk at the Spitfire sports bar in downtown Seattle. On October 1st of this year, they added to their fleet with a new machine located on the University of Washington campus. The release event at UW’s “Startup Hall” also coincided with a Bitcoin meet-up for interested people in the local community to come network and listen to speakers talk about their personal projects. There were about 40 people in attendance.

I interviewed the guys behind Coinme when they opened their first ATM and was excited to catch up and see how the business has been doing. According to general manager Nick Hughes, their first machine is seeing use on a “daily” basis and has proven that, in Seattle, “there’s definitely interest here, there’s curiosity.” He added “It’s a niche product in a niche industry…it’s not like a normal ATM that has hundreds of thousands or millions of dollars of usage. We’re seeing usage and growth but nothing out of this world.”

While he was unwilling to give hard figures on daily transaction amounts, Nick said “we sometimes see upwards of double digits of transactions a day. On the low end you’ll see a handful.” When I asked Nick if he had noticed traffic fluctuations based on news or overall price movements “It seems to be more correlated with the price…when you saw the price of bitcoin drop you saw a slightly different usage based on the price. Now, can I say when the price drops people buy or sell? No. Some people want to hop on it when it drops and some people want to sell.”

When I asked Nick what people are most curious about when it comes to the machine he said “The two questions we get is what is it and how do you use it, what do you do with it…Sometimes depending on the person I’m talking to it’s slightly difficult to explain to them. I think the biggest problem with bitcoin to this day still is the clear use case. We’ll get there but we’re not there.”

He added “the biggest hurdle of these machines is still user experience. Robocoin built the software we’re running, it is not very user friendly to a new person. They don’t know what buy or sell bitcoin is. They think of withdraw or deposit. So they are coming out with new software that will help that…We’ve had a few people that don’t fully get what’s going on and they think the machine, like, stole their money. And we’re talking like four hundred, a thousand dollars. They wanted to buy bitcoin but were confused what happened. I had to explain to them what you did was basically you put money in this machine and purchased bitcoin and it’s now on the receipt with a QR code. After a conversation I turned this guy from mad into a huge supporter…but one out of three need a little bit of help. Maybe one out of four.”

Nick hopes that having a kiosk at one of Western Washington’s educational hubs will help people get past this learning curve. Commenting on why they chose this location for their new release he said “we’re excited about this move because it’s putting it in an environment that’s tech-savvy. There’s a student population, there’s an international student population here, and also it gets conversation and research happening on campus, where I think it needs to be happening.” With this installation, Coinme’s kiosk becomes the first ATM operating on a United States university campus that allows for both buying and selling of bitcoin.

Another thing that sets Coinme apart is that they have gone through all the procedures necessary to become a licensed money transmitter, operating closely with the Washington State Department of Financial Institutions (DFI). At the time of the kiosk release, Nick said they had “just finished a 3 month overview with them (the DFI) monitoring the machine” and that they had passed with the DFI being “excited” about the company. Coinme considers itself “a model business and a model company as other companies in Washington State associated with Bitcoin begin operation.”

According to Nick they have a third machine and are looking for a location. They would like it to be on the Eastside because there are already two in Seattle-main, but they have “a few places in mind.“ He also added that Robocoin users should soon be seeing a useful update to their machines. While deposits and withdrawals currently take around 20-30 minutes, Nick said “they will be rolling out a new software update that should shorten that big time. You’ll be able to withdraw in, like, 30 seconds.”

The “mining” industry is bursting with innovation, right now. It started as a way to incentivize people to support the Bitcoin network without allowing any one entity to take control, but has grown with new blockchain technologies. Cryptocurrencies are now being used to incentivize contribution to all kinds of initiatives, like solar energy adoption and the race to cure diseases like cancer. Instead of mining bitcoins by solving a cryptographic math problem, you can mine solarcoins or curecoins by generating photoelectricity or folding proteins, respectively, rather than by wasting processing power. Society could accomplish a lot of great things this way without the need for a central authority, but if we want to have a real impact, we need to get more people using cryptocurrency.

Merchant mining is the process of doing exactly that. Merchants are “mined” by convincing them to adopt cryptocurrency; the idea was conceived by MerchantCoin, which plans for miners and merchants alike to be rewarded with XMC for Bitcoin adoption. This still requires another mining mechanism to secure the blockchain, which in the case of MerchantCoin is handled by Bitcoin miners that utilize the Master Protocol in return for Mastercoins. MerchantCoin tokens are automatically redeemed when a merchant has transacted at least $25 in in BTC, thus stimulating the Bitcoin economy with a supplementary altcoin.

This could do great things for merchant adoption of Bitcoin. MerchantCoin can verify it has signed up many miners (or “advocates” as they call them) via their website, already. The founder has real estate platform and development experience and has already facilitated the sale of some large properties for cryptocurrency. Their team is also developing some other co-projects, such as a decentralized point-of-sale platform, exchange, and multi-coin wallet as they search for a way to generate revenue in the process.

This still leaves unanswered one very important question: how can we validate that cryptocurrency-based commerce has occurred? This led to the development of another new concept called proof-of-commerce. Rather than proving to have solved a SHA256 function or held coins for a certain amount of time–as in proof-of-work or proof-of-stake — proof-of-commerce is the process of validating the use of Bitcoin. Although the technology for this has not yet been developed, several hypothetical methods exist, and the MerchantCoin team is in a convenient position to do this.

Since MerchantCoin runs on Mastercoin, which runs on the Bitcoin blockchain, it can see all bitcoin transactions (and therefore account balances). Bitcoin miners embed information about the Merchant Coin network in blocks alongside Bitcoin data; link a MerchantCoin address to a Bitcoin address, and XMC can be granted to an advocate and merchant when one or more Bitcoin transactions totaling over a certain amount are detected. If Mastercoin was integrated with other cryptocurrencies’ mining networks, it could detect commerce conducted in those, as well, potentially in a trustless manner.

The exact manner in which they plan to proceed isn’t clear yet; although I was given the chance to look at the draft of their white paper, it’s not yet ready to show to the general public. The talk I heard about a decentralized POS system seemed to be a step in the right direction, though. The concept behind it is sound, and if Merchant Coin is going to be as successful as Bitcoin, it will follow the same open source and trust-free principles.

The Congress has a new Platinum partner that is sponsoring cheaper tickets!

Bitcoin 2 Business Congress Brussels will take place on 16-17 October in the B19 Business Club. The event is mainly focused on Bitcoin business and monetary future, debates, speeches by key players in the industry, B2B meetings, networking and start-ups. The event is designed for 100-150 attendees. The main aim is to accomplish more of a personal and friendly atmosphere where everyone will be able to meet with anyone.

From the beginning the organizers setup the prices higher to make sure they will be able to cover all expenses. “It was against our idea of having friendly atmosphere and make our events accessible to everyone. Every Bitcoin Conference has a high ticket prices which goes against the philosophy of the Bitcoin” says the organizing team and concludes that “thanks to a great cooperation with the Transactioncoin, we´ll be able to reduce the prices and make it available to the people that normally wouldn´t be able to pay that amount of money”. The current ticket price is now being only 99 €.

So the company that made this possible is a relatively new coin Transactioncoin. Txcoin is a P2P Crypto Currency with a hybrid proof of work (PoW) system. Txcoin supports two hashing algorithm: SHA256 and SCRYPT. Each algorithm has its seperate difficulty, both targetting 2 minutes. Txcoin can be merged mined with either sha256 or scrypt based altercoins. Now what is interesting and exciting about the merged mining phenomenon is that Txcoin is a “mining side-effect eliminator” a medium that eliminates the side-effects of mining, such as a huge electricity consumption, cost of mining hardware, etc.

Among other things, the attendees can look forward to a friendly atmosphere, great networking, meeting the key players from the industry and enjoying their time in “de facto” heart of the European Union. Among other speakers we can expect Vitalik Buterin from the Ethereum, Moe Levin from BitPay, Lutz Auffenberg, Christian Ander or Stan Wolf. This is officially one of the most accessible events in the Bitcoin world and it is always great to see the growth of the Bitcoin community, especially in Europe.

So come and support the community in Brussels. You can register here and buy your ticket with credit card and with Bitcoin of course. Tickets will be available on place as well but the organizers strongly recommend getting your ticket advanced since the BTC2B Congress has a limited number of attendees and tickets will be more expensive when buying at the venue – 150 €. Get more information on the website http://btc2b.com/

With the rise of Kickstarter, the average person now has a greater opportunity to raise money for his or her ideas than ever before. The Kickstarter model, in which campaigners solicit donations to support a project that produces something they can share with their funders and others at large, is a new technological take rooted in an old idea. For instance, in 1713 Alexander Pope rallied funding to publish English translations of Greek poetry by offering generous donators credits on a page in the finished translated publication, once enough funding was gathered to bring the project to fruition. The crowdfunding method was also employed in 1783 by Mozart who developed a campaign to fund the performance of three new concertos he scored by offering funders copies of the manuscripts, in exchange for live performance funding. And finally with the rise of the Internet, Kickstarter democratized the funding of projects even further by allowing unprecedented connectivity to the common person’s creative endeavors—and by leveraging funding from backers across the world. The site offers streamlined simplicity that empowers the common person located in any of 10 countries throughout the world the ability to quickly raise funding to bring their idea to life. From the standpoint of investors, one advantage of Kickstarter’s funding platform is that funding requires that a project is completely funded before the backers are charged for their contribution. In this fashion, backers are not left on the hook for a partially funded project that may not produce the intended results outlined in the campaign. Kickstarter currently takes a 5% cut of the total funds raised for a particular campaign, and Kickstarter’s credit card processor, Amazon, levies another 3-5% charge on the total funds raised in a campaign. An additional value added tax (VAT) of 1-2% on the total funds raised will also be applied if you happen to run a campaign in the UK. Despite the usual 8-10% charge on the total funds raised in a campaign, the requirement that campaigns need complete funding before backers are charged results in nearly 42% of projects being successfully funded. Additionally, the campaign requirement that something must be produced for others to experience adds a tangible deliverable to the campaign. However, it is important to realize backers’ investments are donations in nature that primarily add capital to the store of human knowledge and innovation—as opposed to offering the investor a share in the equity of a project. One recent success story on the Kickstarter crowdfunding platform involved Ladar Levinson’s “Lavabit Dark Mail Initiative” campaign that raised upwards of $200,000 to deliver open-source, PGP strength encrypted email that also hides message metadata. However, for those who want the freedom to fund any idea they may have, the folks at Kickstarter do place more restrictions on what projects are deemed appropriate for funding, compared to the campaign restrictions placed on a similar crowdfunding platform, Indiegogo.

Indiegogo also empowers the common person by providing the ability to raise funds for ideas that might otherwise fall on deaf ears from the more traditional capital raising institutions. Indiegogo leverages the ability to draw backers from around the world and accepts PayPal in addition to credit cards, as opposed to Kickstarter which only accepts donations via credit cards. Furthermore, Kickstarter only allows campaigns located in 10 select few countries, as opposed to Indiegogo that enables even greater access to the common person by allowing campaigns in over 200 countries. Another interesting feature Indiegogo employs is its use of two campaign funding models. One model requires the campaign to reach its funding goal for any funds to be dispersed and the other allows any funds the campaign brings in to be received by the campaign creator–with the latter involving a higher fee paid to Indiegogo to incentivize reaching the initial funding goal. Once again, it’s time to run the numbers. Under the all-or-nothing campaign model, Indiegogo charges 4% on the total funds received and additional credit card or PayPal processing fees ranging from 3-5%. The flexible funding model, where funds are still released despite the funding goal not being reached, involves an Indiegogo fee of 9% on the total funds raised and credit card or PayPal processing fees ranging from 3-5%. Albeit Kickstarter and Indiegogo do not allow backers a stake in the equity, or ownership, of the finished product of the campaign, they are still powerful tools that allow access to otherwise nonexistent capital that enriches the innovation ecosystem. Overall, Indiegogo offers a compelling comparable crowdfunding option. On the other hand, the future of decentralized crowdfunding and the introduction of crypto-assets beckons on another front.

Swarm is a crowdfunding platform that takes a decentralized approach to the idea of crowdfunding. Simply put, the platform runs on a cryptocurrency known as Swarm Coin that allows campaigns to issue their own separate campaign cryptocurrency tokens that act as shares of equity in crowdfunding campaigns. The Swarm founder envisions the platform will allow vetting of campaign ideas through a decentralized voting process that helps determine which campaigns receive funding on the Swarm platform. A decentralized reputation system will help establish credibility of those who backed successful campaigns in the past and will help guide newer users to decide on what campaign ideas to fund. The campaigns that receive backing by credible members in the Swarm community are in turn given more weight. As for the funding process itself, campaigners generate unique campaign cryptocurrency tokens that are then sold to project backers as assets in the campaign. If a project is successfully funded and the finished product does exceptionally well out in the open market, then the holders of the campaign tokens will share in the wealth of the success via increased valuation of the crypto tokens they purchased. As a result, the added equity incentive in crowdfunding campaigns may help drive the success of future campaigns. Joel Dietz, the founder of Swarm, points to one crowdfunding equity debacle involving the Oculus Rift campaign on Kickstarter that successfully raised over $2 million dollars to develop a virtual reality headset and subsequently a little over a year later the Oculus Rift company sold to Facebook for $2 billion—leaving some of the Kickstarter backers wishing they had the option to invest in an equity arrangement instead.

Another admirable contender in the decentralized crowdfunding ecosystem is the NXT currency platform. It is important to realize NXT is not just another alternative cryptocurrency because it actually makes decentralization possible through a proof-of-stake model, as opposed to the Bitcoin proof-of-work model. On the decentralized NXT platform, anyone can create their own unique asset tokens and sell shares that can support a crowdfunding campaign, among other things. Asset tokens can also be used to represent physical assets, a culmination of other assets known as asset bundles, and can be used to represent a whole range of other assets. Currently, it costs 1,000 NXT, or roughly around $30 worth of Bitcoin at the time of this writing, to issue asset tokens for any particular crowdfunding campaign. Furthermore, the NXT platform also touts a decentralized marketplace that allows anyone to sell any kind of digital good. Overall, it appears the future of commerce and investments will come in a decentralized, cryptocurrency form if the recent trends are an indication of anything.

Regardless of which crowdfunding method is employed, we are entering an age of unprecedented innovation—and the age seems to be one focused on individual empowerment.

Amid the FTC injunction of Butterfly Labs additional insight was gleaned about the operations of the company. Butterfly Labs (BFL) sells high-performance computers that are designed solely for mining Bitcoin. BFL operated primarily on a pre-order basis that meant customers knew they would be ordering a product that would not be ready for some time–but customers were not forewarned of the wait time which according to the FTC would include “delays ranging from from six months to one year.” In the world of mining, time of delivery is one of the crucial factors that miners consider before deciding to invest their hard earned money in mining equipment at any price point.

The nature of the Bitcoin network makes mining rig delivery time such an important factor for mining investments because the Bitcoin difficulty level, or total mining processing power of the Bitcoin payment validation network, determines how easy it will be for miners to compete for bitcoins among other prospectors. Receiving mining equipment with processing power and power efficiency as advertised—and receiving the equipment as quickly as possible–is key in successful mining ventures. If mining equipment is received late, the investor could incur considerable losses because the mining difficulty level of the Bitcoin network goes up exponentially as more high-powered miners come online—thereby making older, less-powerful mining equipment nearly obsolete and unprofitable.

The FTC claims BFL failed to reasonably project accurate timelines during which the customers would receive their purchased mining equipment by which in turn the profitability of the mining rigs may have been reduced. In part, the FTC believes a Return on Investment (ROI) calculator, provided on BFL social media sites and on a company linked blog, might have contributed to incorrect profitability estimates of mining rigs. For example, the ROI calculator estimated mining profitability of mining equipment by using the delivery date and figures such as, mining equipment power consumption, Bitcoin difficulty level, and processing power of the mining equipment. It is possible that the use of incorrect data used in the ROI calculator could have been one of the deciding factors that helped entice customers make their final decision to purchase mining equipment–based on the ROI profitability results.

Samuel Johnston, first a BFL customer in 2012 and later a BFL employee in 2013, was aware of changes in BFL hardware specifications with his firsthand experience of purchasing the BFL $15,000+ mini-rig back in July of 2012. Instead of receiving his rig as one complete unit as pictured in the BFL advertisement, according to Johnston’s FTC testimony he “[received] three separate . . . machines in separate boxes with separate power supplies,” and he further stated “as a result, it consumed six to seven times more power than advertised.” Johnston also stated as part of his FTC testimony as the former Head Burn-in Technician at BFL, the company tested customers mining equipment for quality control in a manner that tested, or burned in, customers’ machines “longer than the usual ten to 30 minutes,” on the actual Bitcoin network instead of on the Bitcoin test network. Johnston said three rooms were filled with customers’ mining equipment being burned-in with units sometimes for as long as two days. Johnston also stated he learned from co-workers “. . . the burn-in process was set up to mine bitcoins for the company’s benefit,” and after asking the BFL production manager about the reasoning behind the practice Johnston described the conversation thusly: “when I asked Mark [the production manager] why the machines were not tested on the testnet, he responded that there was no point in doing so because the company would not make any money from the testing.”

It is not clear if the burn-in bitcoins were being allocated to BFL research and development purposes, but contrary to this notion when BFL introduced one of their new product lines they did a short question and answer section that included the following question: “Why don’t you guys mine? This is a popular question. The answer is pretty simple. Hardware is the focus of our passion. We’re hardware designers.” If the mining were done in a transparent manner with clearly stated intentions for what the funding would be put towards, it is possible consumers may have embraced the practice. However, it should be made clear that customers would have to compete with the BFL burn-in miners on the Bitcoin network as a result—with the possibility of BFL burn-in miners increasing the Bitcoin difficulty level for customers’ own mining operations. According to Johnston, the collective power of the mining rigs being tested at BFL equaled around 3% of the processing power of the entire Bitcoin network in August 2013.

BFL seems to be no stranger to customer complaints. The FTC claimed some customers ordered BFL mining equipment that was never delivered, delivered but arrived so late customers would have realized little profit, or was refunded after escalating complaints through payment processors. Some customers had to go even as far as filing lawsuits against BFL just to receive a refund. For some customers, the BFL refund process became something of a mysterious process, with some customers having no problem receiving a timely refund, while others had not received a refund—instead being stonewalled by BFL after trying to inquire about a refund. Some customers even resorted to posting in forums on how to effectively receive a refund from BFL with successful word-for-word escalation scripts of their refund experiences with payment processors for the benefit of other BFL customers facing refund difficulties.

The FTC injunction of BFL also revealed some insight on what may be perhaps a view of the BFL culture. In medieval fashion, BFL chose to create foam torches and pitch forks with the phrases “BFL is late!” and “Y U NO SHIP?” written on them that seem to deride their customers. They presumably served as the proverbial foam finger showing perhaps not only the spirit of the BFL corporate culture, but possibly the company’s relationship with its customers.

As of October 2nd, the FTC granted BFL the ability to resume its operations on a limited, restricted basis. Despite the FTC freeze on all BFL assets in the states and abroad, one FTC lawyer said the limited reopening of BFL will help to bridge possible funding gaps if there is a need for customer recompense. If the allegations put forward by the FTC turn out to be warranted, then BFL may have to implement sweeping changes to vie for the leading position in the ever-evolving mining industry.

Going forward, it seems those mining hardware companies that have a stronghold in consumer confidence and consistently deliver mining equipment that offers high value to its customers will likely be the next leaders in the cryptocurrency mining industry. Despite negative sentiments in the mining industry from the recent allegations as of late, investors will continue to vote for companies that align with values they hold important, and they will support those companies that do–through their purchases. The companies that can match technological prowess with an equal share of business acumen will be positioned to reap generous rewards in the coming years.

Dr David Andolfatto, who is Vice President of the St. Louis Federal Reserve, has been one of the most forward-looking people at central banks around the world when it comes to crypto-currencies. Here he speaks with Max Rangeley, Editor at The Cobden Centre, and gives his views on what Bitcoin means for commerce, finance, and the dollar itself.

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Max Rangeley: How have you found the reactions to Bitcoin within the Fed?

Dr David Andolfatto: Bitcoin is barely on the radar screen for most Fed researchers and policymakers. This is to be expected, given the large size of the Fed’s balance sheet and the debate over how to conduct monetary policy with the existence of large excess reserves. But I am aware of a small group of researchers scattered throughout the Fed system that seem interested in the Bitcoin phenomenon. Some, like Francois Velde of the Chicago Fed, have written nice primers on the phenomenon. I am also aware of a cryptocurrency workshop that meets monthly at the New York Fed. The reaction of most people (who study it) might be described as “academic agnosticism” in the sense that people are curious, but not enthusiastically in favor or against the idea.

How do you see Bitcoin being used in the future? Do you foresee private currencies being commonly used on the high street alongside state-backed currencies, or remaining largely online phenomena?

Who can say how the future will evolve, especially in this space? My best guess is that Bitcoin will find a niche market. It’s cool to use bitcoin to pay for your Starbucks latte on university campuses (this is what my university is doing). It may very well find a place on the high street, at least among some shops catering to the “cool” crowd. But for advanced economies, at least, it is hard to see how consumers will benefit directly by using bitcoins instead of dollars or pounds. As Satoshi Nakamoto wrote in his seminal 2008 paper introducing Bitcoin, “…the [current] system works well enough for most transactions…”

If the use of private currencies became more widespread, do you think that central banks would ever track monetary aggregates in circulation, even if just approximately, much as M2, M3 etc are tracked now?

Anything is possible, but I doubt it. One issue is that there many of these “wildcat” currencies, with more appearing every day (every online game has its own currency for example, as do most social media sites). In a sense, these currencies are “local” monies (much like the local currencies that have always existed, like the Ithaca hour, for example). I’m not sure how a statistical agency could keep track of all these little local currencies, or whether it would even be worthwhile to do so. But who knows?

If private currencies were to become widely used around the world, do you think that this could have an effect on the business cycle, since central banks would not have as much control over monetary factors?

I do not think it would have much of an effect on the business cycle, which I think is rooted more in “real” and “financial” factors, rather than “monetary” factors, per se.

You mentioned in your presentation on Bitcoin that although supply is fixed, demand can fluctuate significantly, which causes volatility, would you say this is a weakness inherent in private currencies, or is there the possibility that algorithms could evolve to incorporate a degree of elasticity?

Remember that Bitcoin is *more* than a private currency: it is a payment system and monetary policy with *no trusted intermediary* involved. Most private currencies entail the use of trusted third parties. EVE online, for example, an online game founded in 2003 has evidently managed its money supply in a manner that keeps its value relatively stable. It may be possible to code an “elastic money supply” rule in the Bitcoin protocol, but it is not immediately clear to me how this might work. Injecting new money into the system would be easy. The tricky part would be in how to destroy money (having the algorithm debit Bitcoin wallets that are secured by private keys).

You mentioned that you welcome the competition for central banks; if private currencies became widely used, could it chip away at American supremacy, a degree of which is based on the dollar, the so-called “exorbitant privilege?”

In my view, America supremacy is not based on the dollar. The status of the dollar simply reflects American supremacy, which is based fundamentally on the structure of that economy (something “real” not “monetary”). The America dollar already faces stiff competition from a variety of alternative candidates, including the Yen, the Euro, and gold. If gold cannot displace the USD, why would we expect Bitcoin to?

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Max Rangeley is the Editor of The Cobden Centre(http://www.cobdencentre.org/about/our-team/, http://www.cobdencentre.org/about/our-advisory-board/). He is the CEO of ReboundTAG Ltd, which produces microchip luggage tags and has been showcased by Lufthansa and featured on BBC World among other media outlets. Max has a Master’s in economics, following this he was given a scholarship to do a PhD at the London School of Economics, but decided instead to go straight into business.

I attended the Cryptolina Bitcoin Conference in August and got to hang out with Brian Page from BitShares. We talked about Bitcoin, cryptocurrency, and of course, about BitShares. I had seen these guys around at conferences, and like most people, I didn’t understand what they were trying to accomplish.

I was finally able to find out after speaking to Brian about a few things. I hope to clarify what this often misunderstood group within the Bitcoin community is doing.

What is Bitshares?

Bitshares is a brand of open source software based on the same blockchain technology behind Bitcoin. Unlike Bitcoin, which is based on proof of work, BitShares is based on proof of stake, meaning that miners are not utilized.

Bitshares software is used to launch Decentralized Autonomous Companies (DACs), an idea that was first introduced to the industry by its founder, Daniel Larimer. These unmanned companies issue shares in each company, produce profits and distribute those profits to shareholders. There’s no need to trust anyone to do this, as everything is hard coded into the software.

BitShares is about making profitable companies that people want to own those shares in, and creating returns for shareholders.

In my opinion, the crypto industry feels a lot like the early dot com industry. At the time, there were great ideas with huge valuations, but few of the companies ever made any money.

In our industry today, some ideas are valued very high. But they will eventually have to earn a profit and create revenues, or become worthless. We believe fully that the first rule of business is to earn a profit, to earn revenue, and to produce more than is consumed.

BitSharesX is the first DAC launched this year. BitSharesX is a decentralized asset exchange launched by a group out of Hong Kong called DAC Sun Limited, using BitShares open source code.

Other applications that will be launched on BitShares software include voting, domains, and music.

What do you think about Bitcoin?

When Bitcoin was created five years ago, Satoshi came up with the best system we had at the time. It was a great, brilliant technology. The idea was to decentralize Bitcoin as much as possible by allowing it to run on many computers. Unfortunately, it’s no longer decentralized because the hash power is controlled by just a few big mining companies. In this aspect, Bitcoin is not decentralized as it was originally intended to be and requires some amount of trust in these new powers that be. Also, having to complete these complex algorithms and mathematical problems (proof of work) requires so much money, electricity, and expensive hardware; it’s not a green technology. Moreover, its no longer necessary, because we’ve proved as an industry that proof of stake works.

If you add how much all individuals spend to pay miners, buy hardware and pay for electricity, it comes to hundreds of millions dollars a year burned – just to run the Bitcoin system. It’s no longer necessary and based on assumptions that are now five years old.  Since proof of stake requires none of that, all of that money can go to the “shareholders” instead. Hundreds of millions of dollars could go directly in the pockets of those who use Bitcoin if it wasn’t based on mining. Imagine if Bitcoin earned interest! It would go to the people who own the system: the users. By doing this, you can make the Bitcoin idea profitable. That’s what we do, except we apply it to many other industries beyond just “currency.” We believe that proof of stake is the way to go, and Delegated Proof of Stake, our system, is even better.

What is Delegated Proof of Stake?

Delegated Proof of Stake means that instead of decentralizing to every single person who has a stake in the currency, it is decentralized to a certain number of delegates. In BitShares’ case it’s 101 delegates. Delegated Proof of Stake was introduced by BitShares.

The reason you want to do that is because of the costs. The costs get too high when you pay everyone  in the entire system. With our system, delegated proof of stake, you have delegates that are voted into position by everyone who uses the system. Similar to Reddit, you upvote those you support. The top 101 with the most votes become the delegates and help run the system by approving blocks.

Its not unlike a representative democracy, where you have a congress, and the congress represents the people. But the one problem with the real congress in Washington, is that you can’t take them out of office very easily. But with our delegates, you can vote the entire group out, if needed. If enough people don’t like what’s going on with the delegates, they can all be voted out immediately and replaced by the next 101 in line.

In our system, once BitShares becomes the size we believe it’s gonna be, being a delegate will pay very well. Those delegates have an incentive to protect the system that’s paying them. Its similar to being a miner except there’s no waste and the entire process is profitable from day one.

What else are you guys doing?

Since bitcoin is too volatile to be used as a daily currency, we’re developing what we call bit assets, which are pegged to real world assets. This includes bit assets like  bitUSD, bitYuan, bitGold (not the BitGold company), etc. This allows the user to immediately switch from dollars, to gold to even oil or shares of the exchange itself (BTSX), all within one private, secure and nearly free system. This entire system is called BitsharesX. Think of it as your personal vault where you can store these valuable bit assets, and an exchange where you can trade them.   It’s an exchange that itself is more decentralized than Bitcoin. There’s nothing else like it and currently it’s just behind Ripple in terms of overall market cap at #4 in the world. Not bad for being launched two months ago.

We’ve also gotten rid of long public keys by using a new system. This is called TITAN, which stands for Transfer Invisibly To A Name. If you know someone’s username you can send them shares or bitAssets. No need for public keys, all you need is a name, like say, JohnathanSmith or perhaps an anonymous name like techguy233, and you can send and receive shares or bit assets.

Our speed is much faster than bitcoin, with transaction times well under 10 seconds, often only 5 seconds. So we’re hundreds of millions of dollars cheaper, 20 times more decentralized, and ten times faster than Bitcoin.

Add to that a stable bitUSD, which is pegged to the dollar and you have something that is truly next level. No more need for going into and out of crypto constantly as a merchant who doesn’t know if Bitcoin is going to drop like a rock tomorrow in value. You can reasonably expect that 1,000 bitUSD will be worth about $1,000 USD a week, a month or a year from now. BitUSD also pays interest, so just holding and saving in your vault is profitable.

At any point you can get immediately out of the dollar and into another currency like bitYUAN or into bitGLD, tied to the value of one ounce of gold. And this can all be done without ever leaving BitSharesX. The combination of all these solutions makes this the platform with the most potential. Show me companies that solve the biggest problems and I’ll show you the most profitable companies in the world. Profitable or unprofitable solutions. Which would you rather own? Which will the market choose? I believe it will be bit assets.  And BitSharesX is just the first of many, many companies that not only we are launching, but others will be launching using our software.

Brian concludes:

“Bitcoin paved the way for what’s possible in this industry but there’s no example in technology where the first mover always remains the leader. Whether websites, or technology, software or computer hardware, there’s no example where the first big innovation is the one that remains unchallenged.  My argument is that there will be something bigger than Bitcoin to come along in our industry. Whether it’s us or not, I don’t know, I have no crystal ball. But we’re addressing the issues that Bitcoin has presented that no one else seems to be solving effectively: the problem of mining by creating DPOS, the issue of profitability, and the volatility solved by bitUSD. While I don’t think bitcoin is going anywhere anytime soon, I think there will be something that comes along that will be much bigger than Bitcoin and we hope what we’re working on may be just that. It’s a ballsy thing to say but we’re gonna aim high. We want to innovate and bring this technology to the next level and I believe the potential is there with BitShares.”

Check out their website here  (bitshares.org)

 

 

If Bitcoin has its enfant terrible, Amir Taaki is it. Living on a shoestring-budget in squats throughout Europe, Taaki is leading the anarchist Bitcoin-countermovement known as unSystem, has built the alternative Bitcoin-implementation Libbitcoin, and helped to invent the peer-to-peer marketplace DarkMarket (which is taken over and re-branded as OpenBazaar). He is currently best-known as the front-man of the Dark Wallet, a Bitcoin-wallet designed to obfuscate Bitcoin users’ identities.

Amir, your main focus within the Bitcoin-sphere is clearly on the anonymous features of Bitcoin, and keeping the internetcurrency that way. Why do you care about this so much?

Anonymity is important because the current financial system is rigged against us. Right now the state steals from people through taxes and inflation, which not only contributes massively to state power and war, but it enables them to control who gets to accumulate capital. Anonymity will help us to avoid paying taxes, enable us to launder money, and facilitate us to evade restrictions by the state on how to manage our resources. It will protect the small guy.

Isn’t income from taxes used by the state to help the small guy as well? Through public services for instance, or subsidies, or welfare…

Yeah but these are very small things compared to the restrictions on how we live. Welfare in particular is just the by-product of a broken system. The cost of living in our society is artificially high, so if you can’t afford to pay for that your only other option is to go into welfare until you can sort yourself out to be placed on that narrow path that everyone should follow, and become a small part of a large institution or superstructure: work for the man.

But collecting welfare is not empowering, paying rent is not empowering, and working for the man is not empowering. What is empowering is for people to be cooperating together, to form their own businesses, to be independent and autonomous.

Some people do need help of course, but this should be something we provide together within our communities. I’ve lived in all sorts of communities where people help each other all of the time.

The tools you are developing can also be used by arms dealers or terrorists, while there was even an alleged IS-document floating around the web which mentioned the Dark Wallet. Surely these are not things you support?

Look, we can try to always manage our world and strive to purge it of some perceived threat or evil, but I think that in the end that logic is a faulty one. The way to change things is not by trying to create some sort of system with rules and police and courts and judges. If you want to make something that’s effective, it needs to be in the people’s own interest to promote that.

I believe that everything is so f*d up right now because we have been abstracted from our human values. It’s not natural to get up at nine o’clock in the morning only to sit in an office all day being told to fill boxes under strip lighting. When we evolved, we lived in bands of roving people who acted as an economic union. In the wild, the environment was constantly changing, continually facing us with new challenges. We’re fundamentally social and creative creatures. It might seem more comforting to manage the risk to certain levels, but it’s destroying us as human beings. Part of growing as a person is having these lows, these dangers, these dynamisms.

And at the same time, we need to have fun, which is also something we have taken out of our lives. It’s all devoid of passion. We’re all utilitarian people trying to live in comfort with smiles on our faces, but how many of us are really happy beneath that veneer?

Wouldn’t it be wiser to not actually promote Dark Wallet as a money laundering tool though?

Why?

Well, for one, it might get you into trouble with the law. Secondly, most people would probably not consider it the best possible PR either.

But I’m not acting through fear! I’m doing things as I think they are right. I would just be dishonest with myself if I try to play with words or cover up my intent. I want people to know what I think, and as many people as possible, because it’s not just about the technology we’re building. In fact, the technology by itself is worth nothing. What is important is the narrative, or the ideal that is being constructed through that narrative.

Bitcoin is a decentralized and uncensored money with privacy features. As such, it has opened up a new front in the ongoing struggle for freedom.

Moreover, one of the oldest artefacts in the world is the Code of Hammurabi, a Babylonian document dating back to almost 2000BC which deals with contract law. Contract law is the foundation on which civilizations are built. And it is the basis for how we – no, they – have been able to create corporate society. Through contract law, you get access to a set of legal tools in order to incorporate and scale upwards.

With Bitcoin, we now have a new set of tools, that are not based on the law of the state, but based on the laws of mathematics. This enables us to create decentralized law, digital governance, and a wide scope of means for trade and business.

Then why is the narrative so important in and of itself?

Because the design of Bitcoin is not set in stone. It evolves and morphs through the actions of people. There’s this silly honey badger meme going around, like, “Bitcoin doesn’t give a f*k, Bitcoin is the honey badger of money”, but that’s false. Bitcoin is a consensus-system subject to all the different power groups acting upon it. And Bitcoin certainly can be corrupted. In very big ways.

Is Bitcoin being corrupted right now?

In some ways, yes. The Bitcoin Foundation is trying to establish itself as a central point of Bitcoin through which it can fund and steer development, while at the same time working together with the state and Wall Street. What’s going to happen, is that governments will use the Foundation to pressure Bitcoin development in certain directions.

Chief scientist and former lead-developer Gavin Andresen is paid by the Bitcoin Foundation, while his friends are the big Bitcoin-corporations. So, naturally, he’s more favourable towards their outlook of Bitcoin. And if you look at his actions and decisions…

He talks about Bitcoin as a payments-innovation, he developed the payments protocol, and now he’s pushing to increase the blocksize limit which would raise the maximum number of transactions on the network at the cost of even further centralization of mining. That is in effect in direct opposition to the idea of Bitcoin as a decentralized, private and uncensored system.

You don’t really see Bitcoin as a payments-innovation, do you?

No, it’s not very good for that. The Bitcoin-network is currently subsidized through inflation, meaning transactions cost about thirty dollars each. This vision of Bitcoin as a faster, cheaper and better payments-network is simply not tied to any technological grounding of what Bitcoin is really about. If we want to make Bitcoin a competitor to Visa or MasterCard, we would need to increase the blocksize and centralize mining so much that it is basically the same as existing payments networks. And even then, at some point, we’ll reach a limit where Bitcoin is just not cost-efficient. We don’t need to have all these miners crunching numbers just so people can buy a coffee. That’s insane.

If we do not increase the blocksize, however, Bitcoin would merely be able to handle seven transactions per second, meaning its scalability is rather limited…

Scalability, be very careful with that word. If we increase the blocksize limit, the bloated blockchain would make it harder for people to run full nodes. You’d need bigger hardware to store all of the required data, so in that sense it wouldn’t scale nicely at all.

But if we keep the blocksize limited people can always use Bitcoin for payments, they’d just have to pay a bigger fee. This doesn’t need to be a problem, in particular for the functionality of Bitcoin as an instrument to settle debts. The way banks work today is not that every transaction done between two parties is sent directly from one bank account to the other. Instead, they add up all transactions between the different banks, and settle the debts at the end of the day.

In a similar way, Bitcoin could grow to become the backbone of a whole new financial paradigm, as opposed to a payments network that merely papers over the cracks of the existing monetary infrastructure.

And yet, the general public will probably not care about any of this all that much. They just want cheap and fast transactions…

Well, a lot of people within the Bitcoin-community care about mass adoption way too much. They want to reach it at any and all cost. It doesn’t matter to them how much compromise we need to make, because they think Bitcoin will hit some critical point where – BAM – everything is revolutionized. This kind of quick fix mentality is very easy for people to grasp, but is not based around real social change. It’s an illusion.

It reminds me of the Esperanto movement, which had a split in the community. The Fina Venko aimed to one day reach this pivotal point where suddenly there would be some global revolution of people speaking Esperanto. This idea was later rejected by the Raŭmismos. The Raŭmismos appreciate Esperanto as a cultural movement, as a social movement, and as a language in and of itself.

I reject the Fina Venko of Bitcoin. That’s not to say some kind of global revolution can’t happen, but this focus on it is a diversionary tactic from the real thing that matters. Lots of consumers using bitcoin in their day to day lives doesn’t benefit Bitcoin. It might benefit the price, but the two are not the same.

So how would you suggest we move forward on a protocol-level?

I would actually suggest we step back for a second. Let’s really fix the fundamentals of the software, and make resilient and well written Bitcoin-implementations rather than trying to stuff everything into the protocol. I’m very conservative in that regard, because Bitcoin works as it is now.

There are problems, but I think that meddling with it by opening up the protocol is more of a risk than it is a benefit. Especially because a lot of developers don’t see the consequences of their actions. They’re just looking one step ahead when trying to fix problems, while totally ignoring all of the social implications and how it changes the politics.

Bitcoinj- and Lighthouse-developer Mike Hearn, for instance, was just pushing for an extension to the protocol in order to eliminate possible double-spend transactions in point-of-sale situations. He proposed a system in which miners can vote to steal the block reward from other miners if they accept double spends. The problem is that this opens up the possibility for large mining pools to collude against smaller miners, and use this power to blacklist transactions.

And this is just one example, there are many more like it. But it really is insane, it’s ludicrous. Just to be able to buy coffee with our Bitcoin-creditcards, and make it a little bit more convenient, we want to destroy all of the freedom it provides? Lose out on the opportunity to enable people to economically organize themselves over wide geographical areas, between different communities, and different organizations with different financial instruments, with tools we have never before seen in the history of humanity? Do we really want to give that up for a silly dream of a few corporations that want to sell a product to consumers, to pump the price? Come on… We’re really losing a big thing if we sacrifice Bitcoin for that.

You’re obviously very passionate about these issues, and you don’t hold back in voicing your opinions. As a result, you’ve berated some of the Bitcoin-developers before, and in particular because of their cooperation with regulators. Can you understand why they’d be annoyed with your attitude at all?

I’ll explain the mindset of these people. Some of them are just dumb-asses who actually believe we need the government to protect us and all that. But most of them really think of themselves as some kind of libertarian ninja going through the shadows to sabotage the system from within. They believe something in private, but act something else in public in order to build support for Bitcoin, not realizing that Bitcoin itself is subject to change.

And then people who oppose that façade suddenly become a threat, because it doesn’t conform to the front they’re putting on. So the libertarian view now all of a sudden becomes something they have to push out and censor, thinking we need to gain support from powerful actors. But this mindset slowly leads to the corrosion of their ethics, because they start to think that it’s OK to do one evil for a greater good, and somehow rationalize their own actions through this construct.

This is the real path to corruption. It’s not these big decisions, but small day-to-day things. If you compromise once, it becomes easier to compromise again. So you keep going and going and going until you end up with govcoin or corpcoin. We need to be guarded against this.

LAS VEGAS, NV – October 7, 2014 – Airbitz today announced the release of its integrated mobile bitcoin wallet and business directory, now with 3,200+ listings and coverage in 14 countries, at Inside Bitcoins Las Vegas. Airbitz CEO Paul Puey will present a session on “Bitcoin Wallets: Balancing Security, Privacy, and Ease of Use” at the conference on October 7th at 2:00PM.

“In order to increase adoption of bitcoin and grow our ecosystem, we recognized the need to make transactions easier and more approachable,” said Airbitz CEO Paul Puey. “This was our impetus in creating a product with a carefully crafted UI and user experience, and we are extremely proud to bring the Airbitz wallet and directory to the masses.”

The Airbitz Wallet and Business Directory features simple account & wallet creation using just a username, password and 4 digit PIN, making bitcoin as familiar as mobile banking.

Features implemented for robust security, safety, and privacy include:

– Automatic wallet encryption and cloud backup

– Device-to-device account sync across phone, tablet, iOS, Android

– Local, client-side encryption giving Airbitz zero-knowledge and zero-access to user data or funds

– Great privacy through HD Wallets (changing addresses with each transaction)

Additional exclusive features:

– Payments via Bluetooth Low Energy (BLE) without QR code (iPhone only)

– Merchant Mode with the ability to detect partial payments

– User provided transaction data including Payee, Category, Notes and ability to search by these fields.

Airbitz is available for free on Android and iOS mobile devices at http://airbitz.co and in the Google Play and Apple App Stores. The Airbitz source code will be released as open source by the end of October 2014.

About Airbitz

Airbitz was founded in January 2014. Airbitz aim to bring bitcoin to the next billion users through amazingly simple yet feature rich applications focused on ease of use and ease of security. Its focus is to deliver software, services, and products with an amazing user experience, both visually and functionally, simplifying this advanced technology and delivering it to the masses while still retaining Bitcoin’s core principles of decentralization and privacy. For more information, visit www.airbitz.co and follow us at www.twitter.com/airbitz

Though the price of Bitcoin is shaky, and the mood of Bitcoiners is somber, Jason King is throwing quite a party down in Orlando, Florida. Coins in the Kingdom has come to an end after a packed weekend of speakers whose topics spanned the gamut of introductory programming and usage of Storj (Shawn Wilkinson) to the pragmatic applications of smart contracts by a seasoned attorney (Pamela Morgan). The atmosphere of the event was unique in the world of conferences in that: it is located in the heart of American consumerism, it embraces the simplicity of the world as espoused by Disney, and spent most of the weekend showcasing speakers who decry the absurdity of this surrounding circus.

Lower bitcoin prices means less conference attendees, but with the smaller crowd comes an intimate setting. While questions abounded as to whether the benefits of “The Mouse” were a positive or negative contribution to the greater good, all in attendance were in agreement over the benefits of a smaller conference. There is a significantly greater charm in playing poker with your favorite Bitcoin celebrity with YT Cracker rapping at the end of the hall, then there is in being a sardine in the proverbial can amongst a thousand newbies at the back of a giant conferencing warehouse. “Wishes upon a star” as promised, were being delivered.

This year has been a wild ride for bitcoiners (like there’s any year that isn’t). But for the tight-knit group of bitcoiners at the Coins in the Kingdom conference, the recent bubble was a comforting return to the wilder frontier of days gone by. Though the drop from $1100 to $250 was a wall of sadness to the speculators looking to cash out on a get rich quick program, for the veterans, the price drop was merely a chance to catch their breath from the insanity that characterized the last nine months.

Highlights for Saturday included an excellent keynote by Antonopoulos and Tucker, which featured two monologues and a Q&A session with the audience. Antonopoulos’ keynote discussed the ‘whitewashing of history’ that is practiced by historians, and highlighted the tendency of history books to gloss over the bumpy ride to success that characterizes most of society’s technological disruption. Tucker’s monologue was a similarly riveting speech exploring uses of the Blockchain outside of its uses for payment, chief amongst them, the impending Blockchain wedding.

The second day of the conference brought additional talks, a keynote by Bruce Fenton, and the world’s very first Bitcoin wedding. The highlight of the second day’s session was the announcement by Jason King of a mobile app, in development, that would would bring to the homeless a little bit of what Uber brought to the car-less. King’s app, named “Outpost Everywhere”, empowers the charitable to find homeless members of their community, and bring them the blankets, food, and help that they require. The app features an SMS gateway that enables the homeless to declare their location, and what they need. While many in the media choose to deride Bitcoiners for their anarchic Silk-road-esque applications, missing in this coverage is the compassionate disruption of bitcoiners with applications such as Jason’s.

While Paul Krugman gloats over the impending doom of Bitcoin, and the naysayers start their next round of pronouncements that “Bitcoin is dead,” the mood here in Coins in the Kingdom couldn’t be brighter. Counterparty’s XCP is appreciating rapidly, merchandise is selling, and the crowd is amused to see a reluctant Antonopoulos spending fiat at a nearby Mickey Mouse cafe. (Certainly, some small rock in hell has frozen over.)

While the wildest ride here at the Magic Kingdom turned out to be Bitcoin itself, Coins In the Kingdom brought to its attendees a welcoming and educated crowd, an encompassing roster of speakers, and a very smug mouse. Whether Bitcoin or Disney was the star of the amusement park this weekend was unclear, but what was clear was the wonder and magic that was Coins in the Kingdom.

Apple computer’s return from ashes in 1997 began in the public’s mind with one wildly successful ad campaign: “Think Different”.

The story for how the ad campaign came together can be found on forbes.com. Back then, the hemorrhaging Apple Computer Corporation desperately hired back Steve Jobs, who led the company back from the ashes in spectacular fashion. The Apple PCs were then perceived as toys. Yet he established them as a counter-culture revolution. To be taken seriously by business and the public, it needed respect. It needed to show to the world how it was…different. It was an alternative.

Today, Apple is as mainstream as apple pie. They are now the fifth biggest company listed in The Fortune 500.  How long can you say you’re different when everybody else tries to be you? Is it possible for a company to continue to claim to ‘think different” when they are constantly being imitated? Think differently from who? Apple managed to climb all the way back up to the top of its industry and recent estimates indicate it has over 160 billion dollars cash on hand; the reserve is larger than many nations‘. This was all before lines began forming for the latest iPhone release.

The “Think Different” campaign is timeless. The poetic and timeless words were fitting for a company still on the edge of being regarded as a historical footnote.

Bitcoin is not a company, it’s a technology. Many of its initial fans formed into a spontaneous naturally occurring counter-culture movement rather than one being artificially designed by an advertising agency as part of a re-branding effort. Bitcoin has no expensive advertising campaign or budget. Its own culture started in true life back streets and basements of the world – not boardrooms and advertising pitches. The total market capitalization of bitcoin is currently less than 3% of just the available cash on hand at Apple.

In the “Think Different” advertisements, we see black and white images from some of history’s most brilliant people who became the literal poster boys of those that thought differently. Today, placing Steve Jobs on that list would likely not find much resistance. The spirit and achievements of this group have become legendary… and will live on long from now.

We pay homage to this great ad campaign and the spirit of rebellious respect it gives to the past “crazy ones”. Following the original spirit of the creators of the award winning advertising concept, we’ve recreated the message below but with a twist. Today, it seems to be more fitting that a true counter-culture movement be used. Today’s bitcoin leaders (with some creative license) that push forward the latest technology.

Here now are some of the celebrated  “crazy” bitcoin geniuses that have helped get bitcoin this far.

When you first lay eyes on the DarkWallet, you know you’re looking at something unique. For starters, it’s literally dark—the background is jet black. But the color theme is just the beginning of what sets this new privacy tool apart from all other wallets.

For starters, the DarkWallet offers something that no other crypto wallet has before: a stealth Bitcoin address. Because Bitcoin’s ledger of ownership, the blockchain, is available for all to see, the current balance and the full transaction history of any address is totally public. If your Bitcoin address is publicly known, you have little privacy. That’s where a DarkWallet stealth address comes in.

A stealth address is 102 characters long (whereas a traditional Bitcoin address is between 26 and 34 characters long). Unlike the Ledger Wallet, the DarkWallet software comes pre-installed with “spending”, “business” and “savings” pockets. Each pocket has its own stealth address, and you can create as many new pockets as you want.

Funds sent to a stealth address are automatically re-routed by the DarkWallet software. A new traditional address is generated to receive each stealth payment. In other words, the sender of a payment could check the blockchain to see which address his payment went to, but he couldn’t determine which other addresses belong to the stealth user. Aside from this specific payment, the sender has no access to the stealth user’s total number of bitcoins or her transaction history.

Why would anyone want a stealth address? There are likely as many reasons as there are Bitcoin users, but here are just a few examples:

1) You’re an online merchant, and your website doesn’t provide a new sending address for each customer order. All your revenue goes to the same address. Anyone can see your company’s account balance, transaction history and frequency of transactions.

This creates a competitive disadvantage, especially for startups and small businesses. A low account balance may make a business appear less attractive to potential customers. The inability to keep financial records private essentially creates a barrier to entry. A stealth address for receiving customer payments solves this problem.

2) You run a newsletter or site that publishes controversial opinions or content. You rely mostly on donations, and readers of your content are more likely to donate if they know that their donation cannot be traced back to them. Your publication’s freedom of speech is protected because donors can send to its stealth address.

3) You’re an average Joe or Jane, and you’d like to publish your Bitcoin address’s QR code on your business cards, in your outgoing email signature, on your blog and just about anywhere else you can think of. You feel awkward and even embarrassed, however, handing out a business card that’s essentially a free pass to view your current balance and transaction history. Publishing the QR code of your stealth address instead solves this problem and restores your privacy.

In addition to its totally unique offering of stealth addresses, the DarkWallet also provides the service of coin mixing (which is also found in a few other privacy-conscious wallets). Coin mixing swaps the inputs of multiple transactions, so that it’s hard to tell which sender sent to which recipient. Most wallets with this feature, however, require that a user take multiple steps to initiate the process. The DarkWallet, on the other hand, empowers the user to mix his coins with just the click of a button.

Lastly on the DarkWallet’s list of offerings is support for multisignature Bitcoin addresses. A “multisig”, as it’s called, is an address that requires the signatures of multiple private keys before funds can be moved. This is useful for securing money that’s shared by multiple individuals, or as a tool of escrow to protect buyers and sellers. The DarkWallet allows the creation of new multisig addresses or the importation of existing addresses.

The DarkWallet is currently in alpha testing phase. The wallet’s designers recommend that you use testnet coins to try it out, or that if you choose to use real money, do so knowing that it’s still unstable software.

Use of stealth addresses is only possible between DarkWallet users at this time, but if the feature becomes popular, it’s possible and even likely that other wallets will support them in the future. The DarkWallet is completely open-source, so anyone is free to use, improve upon and distribute the code themselves.

So go ahead—try it out by downloading the software. If you like what you see, consider sending a token of support to the DarkWallet’s developers at their multisignature address 31oSGBBNrpCiENH3XMZpiP6GTC4tad4bMy.

As someone who has worked in the publishing side of free to play video games for over seven years, virtual currencies have been part and parcel of my job since about 2007. In this article, I hope to share some of the background of how virtual currencies came to be one of the key ways the games industry monetises itself, and if there’s some applicable lessons to be learned for companies and individuals looking at making a career in the bitcoin economy.

The grandaddy of the modern games virtual currency is a Korean company called Nexon, and their game Maple Story. While it was not the first games company to offer currencies as Microsoft, Nintendo and Sony among others have been doing it for some time, they found the perfect formula to make things work.

Unlike in the West, where we have high street retail network and a history of buying boxed games, in Korea things were a little different. For various historical reasons, Japanese goods weren’t very popular, so video games consoles weren’t there in large numbers. Instead widespread PC adoption, a culture of gathering in venues with lots of networked computers in-place, and massive investment in broadband by their government enabled new business models to emerge.

Selling a PC game was fraught with difficulty. It could be ripped during production, and put on bittorrent before it was officially released, or copied easily and put onto the countless stalls in markets selling counterfeit goods. If this didn’t happen, the game would be cracked quickly, bypassing whatever security they had in.

So instead of selling the full game, they innovated by adopting techniques from the software as a service industry. Now, people registered on their website could then download, install, patch and log into the game client, and play on Nexon’s servers. They could play the game, but where virtual currencies came in is that they could buy items and advantages.

They integrated various payment methods including credit cards, phone calls, SMS, and PayPal and then let people top up their accounts, the same way as with phone credit. They converted this value into a proprietary currency, and in the game they had a shop, where people could choose from costumes, skins or items to help speed up gameplay. These microtransactions from a wallet enabled them to get around high charges from payment providers.

As others saw the tens of million in revenues they were generating and product lifecycles of several years, many copied or innovated further on the model, bringing in a plethora of freemium, free to play, or virtual currency financed models. Some worked, many didn’t, but overall the industry paved the way for mobile games, and apps in general, to be monetised in the form they are today, fuelled by smartphones linked to credit cards or top up cards.

As the addressible market of fans stayed relatively stable and growing modestly, more competitors piled into the space, and the “easy money” time, where getting customers through referrals, publicity or social media – for free – began to wane. With more competitors fighting over the same pool of core users, marketing took centre stage.

As the base product is free, you are relying on a certain percentage of users to monetise at a given rate, for a certain amount of time, and from this earn enough to cover your costs, subsidise the free users and generate a profit. Once you got that right, you could then invest in marketing in earnest and scale up to the levels that some companies have achieved, with tens of millions of dollars of monthly revenues.

Games companies began to compete over search terms, which drove up prices to ridiculously. CPAs began to rise as people outbid each other for a bigger share of the advertising, and affiliate marketing became a core part of many games companies strategies.

When this wasn’t enough, the focus then came onto banner design and copy to draw in higher clickthrough rates, and then a huge amount of landing page iterations to find the right design to convert those pricey paid clicks. This enabled metrics to be defined, and allows people to work out a return on their investment, and distribute their marketing budget accordingly.

As they iteratively went through this process, many of those products which got the formula right often won their categories, until someone else came along and did it better. This was often despite the products not necessarily being reviewed very well, or in some cases, not reviewed at all by the mainstream games media.

So where do companies working with bitcoin stand at this stage of its life cycle? I’d say at the end of the easy money stage. Dumping traffic into the homepage of your site isn’t enough any more. What’s needed is branded cul-de-sac landing pages laser focused on showcasing one thing in its best light, with a big “buy now with BTC” button.

In addition to paid advertising, some companies also pro-actively began to promote themselves through press releases and building relationships with journalists, but a larger number haven’t yet engaged, focused on getting their product right. So the time is ripe for organised teams to get their marketing and communications activities lined up in a row, and execute them to gain market share in this maelstrom of creativity and innovation that bitcoin enables.

I’d really like to hear from people about the kind of things they are trying to get to grips with in the comments below, and I hope you enjoyed reading!

Image Credit (Nexon – Maple Story)

Overstock.com’s CEO, Patrick Byrne, announced today at Inside Bitcoins in Las Vegas, Nevada, that he intends to reinvent the stock market by using blockchain technology.

Based on the bitcoin digital currency, Byrne’s project, code-named “Medici,” will allow large retailers to issue their corporate stock over the Internet using “cryptosecurity” software. Byrne’s move seeks to disrupt traditional stock exchanges such as the NASDAQ by allowing any to potentially issue financial securities.

Byrne took to the stage at Inside Bitcoins to bring attendees through the process of the incredibly centralized and, what he considers to be highly fraudulent, world of stock market trading and settlement.

Many have been made aware of the severely fraudulent practices within both investment banks and their regulators in the aftermath of the 2008/2009 financial crisis. Indeed, Bitcoin is thought to have been born out of this traumatic financial collapse: it’s promise is to allow people to transfer value directly between each other, without going through 3rd party financial institutions.

Why would circumventing 3rd party institutions be important? Byrne walks us through it. The ties between organized crime, regulation and Wall Street giants like Goldman Sachs and JP Morgan Chase, for one (anyone remember the HSBC connection with Mexican drug lords?). The complete lack of transparency and high-frequency trading … for another.

Byrne believes blockchain technology can change this reality.

Byrne is passionate about the need to democratize Wall Street by allowing companies to IPO in a less manipulated, less expensive way. This is not a new passion for Byrne; he has quite a history of pushing for reform in such markets. This time, he is working with regulators to make this happen, although he apparently has not yet secured regulatory approval for his ambitious project. However, he has retained blue-chip law firm Perkins Coie to help bring his vision into reality. Additionally, he has secured an “open chequebook to build” his crypto-finance project from an investor with “deep pockets,” and he has enlisted Counterparty talent to help him.

Byrne’s announcement comes as no surprise to some, as he previously hinted that Overstock would be building such software. But he has confirmed this with his announcement today to an excited crowd of Bitcoin advocates and entrepreneurs. No doubt, this is an excellent piece of news for startups in the space, as it promises to remove the number of middle-men involved between starting a company and taking it public.

Byrne’s blockchain-based project intends to save businesses approximately 20 percent or less of what Wall Street banks are charging to provide these services today.

All trades on Byrne’s stock market will be recorded on the Blockchain ledger. Other players in the Bitcoin space are moving forward with similar efforts, notably a new company that debuted this week at Inside Bitcoins – Blocktech Financial, a subsidiary of the Blockchain Technology Group, a collection of financial and technical experts who are also building a stock market, although not on top of the Bitcoin blockchain. Blocktech Financial is in the pre-approval process for FINRA and has registered with FinCEN.

Byrne’s team seeks to be compliant under all necessary regulations, saying that they can only make changes “from the inside.”

Many others players in the Bitcoin space, including as Pamela Morgan of Empowered Law, BitNation and Ethereum, also have visions of building on Bitcoin to disrupt not just finance, but law, governance and politics. Clearly, many see these spheres as in desperate need of re-work and disruption.

Byrne says he will “build the platform so any company can list, but Overstock will be the first to use it,” in a coin called O-Coin.  The crypto-finance market does not currently have its code listed on GitHub, as it is “still materializing”; Counterparty’s code is open-source and is available for review on GitHub.

Byrne considers this project an “ice-breaker”, doing the “heavy lifting at a multi-million dollar expense” so other alt-markets can follow.

Byrne’s ambitious project may eliminate short-selling, but it certainly does not help insider trading; Counterparty (XCP) increased 46% last night, suggesting significant insider information prior to the ‘official announcement.’ Bruce Fenton speculated on this announcement during a speech at ‘Coins in the Kingdom,’ another Bitcoin conference running simultaneously to Inside Bitcoins. WIRED released their article on this topic earlier than planned, as well.

One thing remains: we can change the way we transfer value, but we cannot change human nature. However, of all the people to lead a project like this, I think Byrne is a fine, fine choice.

What do you think about this project? Do you think it will materialize and disrupt as promised? What are your questions or concerns? Share and comment below.

(ORLANDO, FL) Curious to learn more about Bitcoin? Need help making sure you’ve properly secured your Magic Internet Money? You are invited to participate in a fun, family friendly, hands-on workshop when the Coins in the Kingdom Conference descends on Orlando, October 4-5. The Bitcoin Beginners’ Workshop, hosted by Will Pangman (Tapeke), and Leigh Haynes (Basic Bitcoin), is open to all Coins in the Kingdom attendees and takes place on Saturday, October 4 at 9:30 a.m., in Orlando’s Wyndham Hotel. Participants will receive a paper wallet containing .01 BTC and learn how to import the BTC into their own wallets, for a truly hands-on cryptocurrency experience.

Bitcoin is still in its infancy, but it’s never been easier to get started, and the Beginners’ Workshop is a great opportunity for folks who are curious but would like some in-person support. The goal for this event is to demonstrate that Bitcoin is ready for mainstream use, and to provide a friendly, risk-free setting in which Bitcoin newcomers can safely receive, send, and optionally purchase Bitcoin from a CoinOutlet ATM Kiosk.

Workshop participants will:

● Learn how to create and properly secure a variety of wallet types
● Receive a Bitcoin paper wallet containing a bitcent (.01 BTC)
● Learn how to install a smartphone app to create a personal Bitcoin wallet
● Learn how to sweep the .01 BTC from the paper wallet into their new smartphone wallet
● Learn how to purchase Bitcoin from a CoinOutlet Kiosk

Workshop hosts will demonstrate how to:

● Make a purchase with Bitcoin from BitcoinShop.US (BTCS)
● Donate to a Bitcoin-accepting charity
● Buy and sell BTC on a Bitcoin exchange

Even if you’re not a “Bitcoin Beginner” yourself, come to the Workshop to see some ideas and techniques that can be useful to you (and improved upon by you!) back home for engaging newcomers in your own

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If you’d like to learn more about the Bitcoin Beginners’ Workshop, please contact Will Pangman at (913) 717-9455 ([email protected]) or Leigh Haynes at (415) 448-6115 ([email protected]).

So you love Bitcoin, and you wanna do something great with it to help change the world? That’s wonderful, you’re an idealist with vision, passion and the courage to reach out and DO SOMETHING meaningful and positive for the world, but are you ready to take on the challenge?

Here are a few tips from someone who’s been on the Bitcoin frontline and learned a thing or two about what, and what not to do.

1. Don’t try and do everything yourself!

Bitcoin fundraising is all very well, and if you get a good opportunity to get some publicity, or find yourself in a position to raise some money that’s great: use it wisely.

There are lots of projects and charities out there that are already underway and have good support networks, infrastructure and networks available already. Do you want to try to do something new? or would you be more comfortable joining a larger program or organisation?

Sean’s Outpost and the Bitgive Foundation are both well established charity projects, and there are many examples of charities supported by exchanges like Ice Cubed and the Bitcoin Foundation like Alekenani’s Botswana program and BitPesa’s Donation program for projects in Kibera.

2. Know your limits!

Bitcoin can be confusing at the best of times to the ordinary person, let alone a charity that is pushed for time, resources and/or manpower. Make sure you contact them first and let them know what it is you’re planning.

There are certain rules and procedures that you need to follow in order to make sure the Bitcoins you receive as charity donations are properly accounted for and the amount raised in fiat money is recorded faithfully once converted to fiat.

This is to protect you as a fundraiser and help those who’ve donated the money to you know that their donations are well spent and going to the right place!

Legitimate charities will have an official charity number and proof they are legitimate such as a charity certificate from their local government ministry of department, plus an accountant or responsible member who should insist on having a donation witnessed and signed for.

Another important thing to make sure is that you know what it is you’re donating for, and there’s an understanding of what you expect them to do with the donation in return: preferably in writing.

3. Get a receipt or signed declaration that they’ve received the money from you and have agreed to spend it in the way specified by you, or your donors!

This sounds a little bit crazy, as it suggests that you know better what they need than they do. If this is the case, make sure you know what it is they need most before starting a fundraising campaign!!

A lot of charities don’t know, and don’t care what Bitcoin is. They just want money, so whilst this might seem obvious, don’t count on the fact that they will be able to, or want to treat it as an investment in their future development. Not only could they be sceptical about receiving ‘Internet Funny Money Donations’, since the legal status of Bitcoin is under question in many countries, but also charities may well have a hard time assessing whether or not they’re breaking the law by accepting Bitcoin donations from you.

4. Don’t try to save the whole world!

A lot of us ‘more naive’ Bitcoiners can be accused of suffering from ‘Mary Sue’ syndrome (a throwback to a sixties’ comic about a Super-Heroine whose powers were so great she could literally do anything and everything).

Just like Mary-Sue, Bitcoin evangelists and fanatics often have a tendency to believe that Bitcoin is a Panacea for the world’s problems, and would solve all our woes if everyone was simply to adopt Bitcoin.

Sadly, this just isn’t the case. Bitcoin is a fantastically powerful tool, but it’s only a tool, and an experimental one at that. It relies on a huge amount of faith, a tiny group of core developers, and a micro-community of investors (on a global scale) who have the capacity to crash the market at will, often for their own selfish motives.

This means that you’re stepping on thin ice by putting all your faith in Bitcoin as a currency. The best advice? If you really want charities to accept Bitcoin, talk to them about it, encourage them to accept it, and then send them to BitPay, CoinBase, BitPesa, Ice3X or another exchange that will handle the funds donated for them.

5. Interface with your local Digital Currency Association or the Bitcoin Foundation before you get started and ask for their advice.

Increasingly these advocacy organisations will have people with experience and a set of guidelines for you to follow if you want to start your own Bitcoin outreach or education project. You can find that things get tough when you’re in a foreign environment, surrounded by people who are expecting you to give them money or solve their problems for them, and having help and support from back home can be invaluable.

6. Make sure you pick a team on whom you can rely to help you realise your vision.

All too often the Bitcoin world is made up of dreamy-eyed idealists and flaky kids with lots of vision and enthusiasm, but little idea of how to organise and execute projects from start to finish, especially if they’re complicated projects, which have multiple facets to make them work and especially if they’re likely to take a long time to execute, realise and bear fruit.

Aid work, particularly in the third world, is a full time job and it’s usually done by professional volunteers and nonprofits who are familiar with the local territory and cultures, and the challenges specific to the communities and areas. Work as closely with you can with them to try to help them achieve their goals, rather than expecting to achieve your own goals, even if you believe your goals are the most important ones!

7. Be careful of your own motivations!!!

Are you doing it to boost the public profile or the price of Bitcoin by using the media? Or to promote your own status in the community or your business? If so, be warned: There’s always the possibility that your efforts may backfire. You may find yourself giving to a charity which has a questionable past, and if you don’t take proper precautions, there’s always the possibility you could end up being accused of trying to defraud the Bitcoin community. Remember that the people in the community rely on building trusting and lasting relationships, and maintaining and developing those relationships is crucial to developing a career in the industry. So protect your reputation at all costs by being as open, honest, not-pushy and transparent as you possibility can be, keep records of everything you do and spend on your project.

8. KEEP IT SIMPLE STUPID!

This should almost be the first AND the last rule, just to stress the point. You’re only human, and you can only achieve so much in a given time. How much time are you prepared to dedicate to changing the world with Bitcoin? If you want to dedicate your life to it, that’s great! But remember that charity work is a tough business by its very nature, and it’s very easy to get pigeon-holed as a ‘do-gooder’ who is only interested in raising money to make themselves look good. Some people will react badly to this because they think you’re trying to make yourself look better than them. You may find you find yourself being put in a box and labelled as something you’re not comfortable with.. People may only think you’re interested in talking to them because you want to get them to donate to your own individual cause or purpose. Beware of simultaneously courting business clients for the purposes of charities; you might end up confusing your motivations.

That’s why ‘Keeping it simple” and remaining objective about the project you want to get involved with is so important.

9. Pick specific tasks or goals that you want to accomplish and set a time frame and a metric for success.

So you want to build a water well in Kenya? Or a Computer Lab in a school in a slum? Great!

Choose one project: dedicate yourself to that one thing, and set a date by which you want to have achieved your goal. I know this sounds basic, but you’re setting yourself up for failure if you don’t have a S.M.A.R.T. goal written down on paper which you know you can achieve.

(S.M.A.R.T. Goals stand for: Specific, Measurable, Attainable, Realistic and Time-based).

If your project doesn’t have a ’S.M.A.R.T.’ set of criteria by which you can measure success or failure, go back to the drawing board, put pen to paper, and make sure you know what you’re doing first, so that you can accurately assess the level of your success or failure you achieved after the event. Remember that failure isn’t necessarily a bad thing. You can always learn a lot from failure, provided you have set specific goals and know what you failed to achieve and why!!

If you don’t set a SMART goal, you may simply be setting yourself up for heartache and pain: take it from someone who knows!!!

10. Don’t be put off by people who don’t believe in you or what you’re doing.

There are always going to be people who don’t understand what it is you’re trying to do, or who think you’re doing it for your own ego or to line your own pockets. Ignore them. Hardly anyone out there actually understands Bitcoin (that even goes for a lot of other Bitcoin Enthusiasts, Venture Capitalists, and Bitcoin Journalists!) but more importantly, members of the general public, charity workers and locals may feel that you’re out to pull the wool over their eyes or have some hidden agenda in mind.

Try to keep your goals consistent and maintain your integrity; you won’t have a problem as long as you do your best to put yourself in the situation of the people you’re visiting and try to learn as much about them and their culture as you can, without assuming that Bitcoin is somehow magically going to transform their lives.

Remember that money often brings its own problems, including corruption and issues of trust, feelings of unfairness within communities (i.e. How come so-and-so received a donation but I didn’t?) and remember that, particularly with community projects there will be various power structures already in place (in third world situations these will often be religious organisations vs. government organisations) who have different visions and may be competing with each other for control over local resources and finances, and publicity.

If you want to start your own Bitcoin charity donation project, feel free to get in touch with me by Twitter and pick my brains. I learned from experience that going into a third-world environment can be tougher than you expect, with culture shock and feelings of helplessness often coming as part of the deal, but don’t let that put you off. If you truly believe in what you’re doing, and you plan your project properly, you can create a valuable experience that will not only help others, but also will give you an experience of a lifetime which you’ll cherish forever.

11. Finally: This should go without saying, but I’ll say it anyway: FOCUS ON WHAT YOU LOVE DOING THE MOST.

There’s no point trying to help people who don’t want your help, don’t understand you and don’t care about your goals and motives. If you’re going to do something truly effective, pick a cause you really truly care about and you know you can stick with. I know it sounds obvious, but sometimes we have a tendency to get caught up in the media hype and follow other people’s agendas. STICK TO YOUR OWN PASSIONS AND YOU CAN’T GO WRONG. Not only will this stop you from mixing up your messages, but it’ll help you focus on what’s truly important in your own life too.

@richardboase

www.richardboase.com

 

 

This is a guest post by Luis Buenaventura

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Reinventing Money Transfers with Bitcoin

Bitcoin advocates often emphasise that the cryptocurrency’s greatest impact will be on the “other 6.5 billion” people who have otherwise been excluded from modern financial tools and services. But far from being the magic bullet that Bitcoin appears to be on paper, bringing it to the mainstream in the developing world involves a multidisciplinary initiative capable of surmounting some significant challenges.

Just last month, the Philippines gave birth to its 100 millionth citizen, a baby girl named Chonalyn. The headcount was largely symbolic; in truth, about a hundred other babies were being born at the same time around the country. It was, however, no accident that the press conference announcing the birth was held at Jose Fabella Hospital in Manila, a state-run center known for crowding mothers and their newborns five to a bed.

The population is growing by 3 babies per minute, and with the low-income brackets accounting for over 90% of our citizenry, it’s not altogether surprising that so many of us have to leave in order to find a reasonable wage. Indeed, the Philippines is the 8th largest source of immigrants in the world, and the 3rd largest in terms of sending remittances back home. The flow of funds from the fifty or so nations where the Filipino diaspora has presence comes to about 10% of our country’s GDP.

You couldn’t write a more appropriate problem case for Bitcoin.

With the average remittance cost from the US to the Philippines at 5.3%, Bitcoin is seemingly poised to crush the incumbents. That this isn’t already the case might be surprising to some (Bitcoin remitters in the Philippines have lowered that cost to just 1%), but the situation is actually far more complex than it appears on the surface.

A Global Local Presence

With over 10 million Filipinos currently living outside the Philippines, spreading awareness about a Bitcoin-based alternative is no small task. The diaspora is scattered across many different regions, professions, and contexts, thus making a single broad educational campaign untenable.

Any promotions espousing the benefits of Bitcoin-powered remittance (more succinctly, “rebittance”) also need to leverage the face-to-face nature of our various communities. Filipino migrant workers regularly congregate in parks, malls, and city squares around the world on the weekends, which will force most efforts to go offline with their delivery.

Indeed, the most significant competition that rebittance faces might not even be the established giants like Western Union and Xoom, but the small hyper-local shops that flourish by catering exclusively to these city-specific communities. Most of them charge flat fees (anecdotally, US$5-6 for transaction of under $3,000) coupled with a small margin on exchange rates (between 1 and 1.5%). When measured against these smaller competitors, the advantage that crypto-powered transfers represent is no longer quite as breathtaking

The Exchange Problem

Forgetting, for a moment, the challenge of educating our remote countrymen about the benefits of Bitcoin, the next obstacle then becomes showing them how to actually acquire BTC. In countries like the US, they may be able to fund their wallets via a Coinbase-connected bank account, but in other countries the answer is not as straightforward.

The act of exchanging fiat for BTC inevitably adds costs to the overall transaction, so even with an otherwise svelte 1% remittance fee, the total calculation at the end of the day may no longer be as competitive as we would like.

The Last Mile

Once the bitcoins have been acquired, the problem morphs into one of logistics. BTC is transferred from the customer’s wallet to the remittance provider’s, who then delivers the equivalent amount in local fiat to the specified recipient. Sometimes this is as easy as making a deposit at a local bank; other times, it means engaging a delivery partner to take the funds directly to someone’s doorstep.

There are literally dozens of ways to send money across the Philippines, and with no clear market leader, a Bitcoin remittance provider must integrate with all of them. Living in an archipelago of over 7,000 islands prevents startups from realistically building out their own logistics services, so they must learn to work with the existing infrastructure and deal with its associated costs.

The Argument for Rebittance

Given all the challenges detailed above, it’s important to take a step back and ask ourselves why we even want to go to all this trouble. In international financial circles, remittance providers are considered second-class businesses after all — a proverbial race to the bottom in terms of profitability.

With the average Filipino remittance amount at US$250, it’s likely that our collective activities in the local Bitcoin industry will result in a savings of US$2 to US$3 per transfer. That may seem like a very modest amount when compared with the effort involved, but not when viewed in the context of the bottom-heavy socioeconomic strata of the developing world.

With 90% of Filipino households subsisting on $10 or less per day, to say that every dollar helps is a gross understatement. By saving just US$30-40 a year, for example, the average low-income household could afford to keep their child in the public school system for a year longer. (Although public school tuition is “free,” transportation and materials are not.)

The diaspora plays an important role in poverty reduction because their remittances reroute a small portion of the world’s funds to a sector that would otherwise languish for lack of governmental support and external aid. Bitcoin allows us to optimize the money transfer process further, and squeeze out as much value as possible from a limited resource.

It’s not the most innovative use of cryptocurrency, nor is it the most lucrative. But from the standpoint of financial inclusion, it might just be the most important.

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Photo Attribution

“QR Philippines” by Luis Buenaventura

http://medium.com/@cryptonight

 

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Additional References

http://www.sws.org.ph/pr20110321%20-%20Family%20Income%20Distribution%20by%20Mr%20Tomas%20Africa_FINAL.pdf

http://www.census.gov.ph/old/data/sectordata/2011/sr_of201106.pdf

http://www.migrationpolicy.org/programs/data-hub/charts/immigrant-and-emigrant-populations-country?width=1000&height=850&iframe=true

http://siteresources.worldbank.org/INTPROSPECTS/Resources/334934-1288990760745/MigrationandDevelopmentBrief22.pdf

The rise of the free and open Internet since the early 1990s has led the gambling industry to expand its reach further into new markets. Despite strict and heavy regulatory policies, online gambling firms have managed to comply with a seemingly endless barrage of tighter gambling laws. Likewise, new payment systems have emerged that provide easier ways to lure people into making more bets. One such scheme is the introduction of Bitcoin, which is an open-source system using peer-to-peer technology for online payments. This type of payment system has the ability to bypass certain restrictions in online gambling all over the world, making it a potentially profitable betting tool for online casinos and gamblers.

Placing bets

The advantages of using Bitcoin involve its steadily growing status as a cost-efficient form of cryptocurrency. The main benefit focuses on the cost of making a Bitcoin transaction. Since it is relatively cheap to make a single transaction, more operators are exploring the idea of using them. Bitcoin’s affordable transaction prices contribute to the existence of a viable business model that offers low commissions. Although Bitcoin gambling represents a small fraction of the revenues from online gambling, the industry is pushing to make it more mainstream due to its cost-efficiency.

In 2012, the global market for online gambling recorded €21.73 billion in gross winnings, according to research firm H2 Gambling Capital. By 2015, a 9.13% compound annual growth rate is expected to occur, the company said. This projection is supported by the growing number of demands from consumers to launch new types of gambling platforms such as Bitcoin casinos. SoftSwiss CEO Ivan Montik is one of those that has felt the increase in demand. Montik’s company specialises in online casino software and bitcoin gambling solutions. “We’ve got about 400 requests for the launch of a bitcoin casino in the last six months,” he added. “We constantly have three to five casinos in the set-up phase, and could have had more if we had more resources.”

Other groups such as online sports betting site BitcoinSportsbooks.com have already expressed their confidence in the arrival of Bitcoin as an innovation in online gambling. “The smart money is on a Bitcoin gambling revolution,” according to the website. “It’s time for gamblers to cash in their chips and start mining their Bitcoins because cryptocurrency is about to make conventional money a spent force in gambling.”

Bitcoin may be receiving a lot of hype, but several challenges still face the peer-to-peer technology. As mentioned earlier, regulation will play a key role in the advancement of cryptocurrency. In the U.S., players are forbidden by the law to use bank-processed payments for their online bets. Some gambling entrepreneurs, however, have managed to establish cryptocurrency-based gambling sites such as the Seals with Clubs.

“It would be trivial to circumvent some ban. Seals is open to the world. There’s no banking

at all done on the site. It’s a pure bitcoin poker site, so this is a totally brand new thing,” said Bryan Micon, the website’s manager. ”It’s only been a few years for the legal world and there’s nothing at all that says anything about this protocol.”

ATLANTA, GA – OCTOBER 1, 2014 — Georgia Institute of Technology will be the first university in the world to integrate bitcoin payments into its stadium concession sales and student dining and shopping credit system, announced Wednesday by BitPay, the world’s leading bitcoin payment processor.

Bitcoin point of sale devices will be located in the student section of Bobby Dodd Stadium, and the Barnes & Noble store in Tech Square will be home to a bitcoin-enabled point purchase terminal for student credit BuzzCards. Students who use bitcoin will now be able to purchase food and goods at almost all locations on the Tech campus.

Georgia Tech was founded in 1885 and remains one of the most prestigious public universities in the United States. The university has contributed a great deal of research as well as many notable graduates to the field of applied technology over the years. It continues to engage itself with technological progress through its leading role in university adoption of bitcoin through an innovative deal brokered by IMG, the university’s multimedia rights partner.

As the “key to campus life” on Georgia Tech, the BuzzCard will be an important interface for student bitcoin use. Yellow Jackets fans will also be able to easily and quickly purchase snacks and drinks at Bobby Dodd Stadium with the world’s fastest payment method. These new bitcoin venues, along with bitcoin wallet provider Pheeva’s announcement of a unique “Jacketwallet” for Georgia Tech, hold promise for the role which digital currency may come to play in student life.

“We look forward to working with BitPay to make bitcoin a viable payment option for our students and fans,” Georgia Tech AD Mike Bobinski said. “At Georgia Tech, we are always looking to lead in innovative ways, and this partnership with BitPay gives us an opportunity to do so by integrating this new technology at a sports venue and in the daily lives of our students.

“Georgia Tech is one of the best sources of innovation in the country,” said Tony Gallippi, BitPay Executive Chairman and Georgia Tech alumnus. “BitPay is proud to offer its own innovative bitcoin payment processing to the university and its students.”

In July, BitPay announced a breakthrough partnership with the Georgia Tech Athletic Association. The sponsorship is designed to build awareness to bitcoin by displaying BitPay’s logo along with the bitcoin symbol in Bobby Dodd Stadium and the McCamish Pavilion through the 2014-2015 school year.

 

About BitPay

BitPay is the global leader in bitcoin payment acceptance with offices throughout North America, Europe, and South America. The company has raised over $32 million from top investors including Index Ventures, Founders Fund, and Sir Richard Branson.

About Georgia Tech

The Georgia Institute of Technology, also known as Georgia Tech, is one of the nation’s leading research universities, providing a focused, technologically based education to more than 21,500 undergraduate and graduate students. Georgia Tech has many nationally recognized programs, all top-ranked by peers and publications alike, and is ranked in the nation’s top 10 public universities by U.S. News and World Report. As a leading technological university, Georgia Tech has more than 100 centers focused on interdisciplinary research that consistently contribute vital research and innovation to American government, industry, and business.

 

Part I introduced some of the challenges in the way of the public understanding of how Bitcoin works, and summarized the strategic roles of the open source software model, peer-to-peer networking, and digital signatures. Part II concludes by discussing hashing and the essential roles it plays in the technical structure of Bitcoin, as well how the system has been designed to be self-financing right from the beginning into the indefinite future.

Making a hash of it

Hashing plays a role quite different from digital signatures. It proves that a message has not been altered. Running a hash of the same message always produces the same result. If a hash does not match a previous one, it is a warning that the current version of the message does not match the original.

To illustrate, here is a message from Murray Rothbard. He wrote in Man, Economy, and State that:

“It must be reiterated here that value scales do not exist in a void apart from the concrete choices of action.” —Murray Rothbard, 1962

And here is the SHA256 digest of this message and attribution (the same algorithm that Bitcoin uses):

68ea16d5ddbbd5c9129710e4c816bebe83c8cf7d52647416302d590290ce2ba8

Any message of any size can go into a hash function. The algorithm breaks it down, mixes the parts, and otherwise “digests” it, until it produces a fixed-length result called “a digest,” which for SHA256 takes the above form, but is in each case different in content.

There are some critical properties of a good hash algorithm. First, the same message always produces the same digest. Second, it only works in one direction. Nothing about the message that went in can be reconstructed from the digest that came out. Even the tiniest change produces a completely different digest, with no relationship between the change in input and the change in output. This is called “the avalanche effect.” Third, the chances of producing the same digest from an altered message are miniscule. This is called “collision resistance.” It is impossible to craft an altered message that produces the same digest as the original unaltered message.

To demonstrate, here is the same quote without the two quotation marks.

It must be reiterated here that value scales do not exist in a void apart from the concrete choices of action. —Murray Rothbard, 1962

Which produces this digest:

0a7a163d989cf1987e1025d859ce797e060f939e2c9505b54b33fe25a9e860ff

Compare it with the previous digest:

68ea16d5ddbbd5c9129710e4c816bebe83c8cf7d52647416302d590290ce2ba8

The tiniest change in the message, removing the two quotation marks, produced a completely different digest that has no relationship whatsoever to the previous digest. In sum, a digest gives a quick yes or no answer to a single question: Is the message still exactly the same as it was before? If the message differs, the digest cannot indicate how or by how much, only that it either has changed at all or has not.

How could such a seemingly blunt instrument be useful? Bitcoin is one application in which hashing has proven very useful indeed. In Bitcoin, hashing is used in the lynchpin role of making it impossible to alter transactions and records once they have been recorded. Once the hashes are hashed together within the blockchain, record forgery anywhere is impossible.

Transactions and how miners compete to discover blocks

Wallet software is used to create transactions. These include the amount to be sent, sending and receiving addresses, and some other information, which is all hashed together. This hash is signed with any required signing keys to create a unique digital signature valid only for this transaction and no other. All of this is broadcast to the network as unencrypted, public information. What makes this possible is that the signature and the verification key do not reveal the signing key.

To keep someone from trying to spend the same unit twice and commit a kind of fraud called double-spending, nodes check new transactions against the blockchain and against other new transactions to make sure the same units are not being referenced more than once.

Each miner collects valid new transactions and incorporates them into a candidate in the competition to publish the next recognized block on the chain. Each miner hashes all the new transactions together. This produces a single hash (“mrkl_root”) that makes the records of every other transaction in a block interdependent.

Each hash for any candidate block differs from every other candidate block, not least because the miner includes his own unique mining address so he can collect the rewards if his candidate block does happen to become recognized as next in the chain.

Whose candidate block becomes the winner?

For the competing miners to recognize a block as the next valid one, the winning miner has to generate a certain hash of his candidate block’s header that meets a stringent condition. All of the other miners can immediately check this answer and recognize it as being correct or not.

However, even though it is a correct solution, it works only for the miner who found it for his own block. No one else can just take another’s correct answer and use it to promote his own candidate block as the real winner instead. This is why the correct answer can be freely published without being misappropriated by others. This unique qualifying hash is called a “proof of work.”

The nature and uses of message digests are counter-intuitive at first, but they are indispensable elements in what makes Bitcoin possible.

An example of a mined block

Here is an example of some key data from an actual block.

“hash”:”0000000000000000163440df04bc24eccb48a9d46c64dce3be979e2e6a35aa13″,

“prev_block”:”00000000000000001b84f85fca41040c558f26f5c225b430eaad05b7cc72668d”,

“mrkl_root”:”83d3359adae0a0e7d211d983ab3805dd05883353a1d84957823389f0cbbba1ad”,

“nonce”:3013750715,

The top line (“hash”) was the actual successful block header hash for this block. It starts with a large number of zeros because a winning hash has to be below the value set in the current difficulty level. The only way to find a winner is to keep trying over and over again.

This process is often described in the popular press as “solving a complex math problem,” but this is somewhat misleading. It is rather an extremely simple and brutally stupid task, one only computers could tolerate. The hash function must simply be run over and over millions and billions of times until a qualifying answer happens to finally be found somewhere on the network. The chances of a given miner finding such a hash for his own candidate block on any given try are miniscule, but somewhere in the network, one is found at a target average of about every 10 minutes. The winner collects the block reward—currently 25 new bitcoins—and any fees for included transactions.

How is the reward collected?

The candidate blocks are already set up in advance so that rewards are controlled by the winning miner’s own unique mining address. This is possible because the miner already included this address in his own unique candidate block before it became a winner. The reward address was already incorporated in the block data to begin with. Altering the reward address in any way would invalidate the winning hash and with it that entire candidate block.

In addition, a miner can only spend rewards from blocks that actually become part of the main chain, because only those blocks can be referenced in future transactions. This design fully specifies the initial control of all first appropriations of new bitcoins. Exactly who wins each next block is random. To raise the probability of winning, a miner can only try to contribute a greater share of the current total network hashing capacity in competition with all of the others trying to do the same.

As shown above with the Rothbard quote, a completely different hash comes out even after the slightest change to the message. This is why the protocol includes a place for a number that is started at zero and changed by one for each new hash try (“nonce”). Only this tiny alteration, even if the rest of the candidate block data is unchanged, generates a completely different hash each time in search of a winner. In the example above, it looks like this miner found a winning hash for this block at some point after the three billionth attempt (“nonce”:3013750715), and this was just for that one miner or mining pool, not including the similar parallel but unsuccessful attempts of all the other miners, and all this just for the competition for this one block.

The key point to understand is that finding a hash under the difficulty level is extremely competitive and difficult, but verifying afterwards that one has been found is trivial. The rest of the miners do so and move right along. They use the newly discovered hash of the previous block header (“prev_block”) as one of the inputs for their next crop of block candidates (which assures the vertical integrity of the single chain of blocks) and the race continues based on the remaining pool of unconfirmed transactions.

A powerful, self-financing, verification network

The Bitcoin mining network is, as of late September 2014, running at about 250 petahashes per second and rising at a logarithmic pace that will soon make this figure look small (rate tracked here). This means that about 250 quadrillion hashes are currently being tried across the network every second all the time. This is the world’s most powerful distributed computing network, by far, and has already been steadily extending this lead for quite some time.

Block rewards and transaction fees help promote the production and maintenance of this entire network in a decentralized way. Since block generation is random and distributed on average in proportion to hashing power contribution, it helps incentivize all contributors all the time. Many miners participate in cooperative mining pools so that at least some rewards arrive on a fairly regular basis.

The network is designed to be entirely self-financed by participants from the beginning indefinitely into the future. Early on, new coin rewards are larger and transaction-fee revenue smaller. Finally, only transaction-fee revenue is to remain, with a long and gradual transition phase built in.

If Bitcoin does remain successful over the longer term, by the time transaction-fee revenue predominates, there would likely be many orders of magnitude more transactions per block by which to multiply the average competitive fee per transaction.

This has been a summary look at a few of the key technical elements of Bitcoin. Hashing algorithms and digital signatures are especially counter-intuitive and relatively new inventions, but knowing what they make possible is essential for understanding how Bitcoin works. Each of Bitcoin’s major elements contribute to the central functions of verification, unforgeable record-keeping, and fraud prevention. These technical underpinnings and the functions they support sound about as far from the systematic deceptions of a fraud such as a Ponzi scheme as it would be possible to get.

Adapted and revised from Bitcoin Decrypted Part II: Technical Aspects and reposted from konradsgraf.com and actiontheory.liberty.me.

To read Part I, click here!

About the Author

Konrad S. Graf (@KonradSGraf) writes on Bitcoin and monetary theory. This work so far is collected at konradsgraf.com/bitcoin-theory. He appeared on panel discussions on Bitcoin and economic theory and monetary history at the Bitcoin 2014 conference in Amsterdam, and in 2013, he presented on Bitcoin and social theory at the Mises Seminar Australia in Brisbane and via pre-recorded interview at the Bitcoin Singapore conference. He is currently focusing on additional research and writing in this area.

 

 

Please send Konrad a tip: 174YDzQuMdUgNbd9sQspPdNjZwg7UxQNVi

Travel on bitcoin has become a simple reality. Not only can you find a place to stay with bitcoin, but you can also fly, buy gasoline, and eat food purchased with bitcoin.

Hotel

If you want to spend the night in a hotel, CheapAir and Expedia offer bitcoin as a payment option. CheapAir uses BitPay and Expedia uses Coinbase to process their bitcoin payments. We have found Expedia more difficult to use because only a portion of their hotels are currently available for bitcoin. On the other hand, CheapAir offers all hotels listed on their site for bitcoin.

Gyft.com allows you to buy gift cards for GlobalHotelCard.com (powered by Orbitz). This step adds the process of buying a gift card for GlobalHotelCard.com before booking your room. Gyft.com uses BitPay to process their transactions. The complication here is that gift cards are sold in set increments and the hotel room expense doesn’t always add up. This requires you to often buy a gift card that is over the price of the hotel, leaving a gift card balance.

Some individual hotels allow you to pay in bitcoin once you arrive on-site. The Holiday Inn Express in Brooklyn, NY takes bitcoin at their front desk with BitPay. You can find such hotels by visiting coinmap.org.

Hotel Booking Tips:
To save on your bitcoin-travel expenses, search for a hotel that offers a hot breakfast.

Book your hotel in advance.  Yes, CheapAir and Expedia both offer last minute booking the night you travel. No, you should not pay with bitcoin at the last minute through these sites, if you can help it. Read our Nightmarish Experience Using Bitcoin on Expedia here.

TripAdvisor.com has the best fitering and search options. I like to use TripAdvisor to find the perfect hotel, then book it through CheapAir. My search filters include “free breakfast”, “pet-friendly”, “best value”.

Bed and Breakfast

You can book a Bed and Breakfast by purchasing a gift card for BedandBreakfast.com through Gyft.com.

Room / Guest House

If you are looking for a more laid back experience, AirBNB and 9Flats accept bitcoin as well. These services allow you to rent a room or guest house that someone privately owns.

Simply use these services to reserve your room and select “bitcoin” as your payment option.

Airfare

There are three websites that allow you to book airfare directly: CheapAir.com, ABitSky.com and BTCTrip.com.

You can purchase a giftcard for American Airlines through Gyft.com and Egifter.com.

Gasoline

To go on a bitcoin-only road trip you need to buy gasoline with bitcoin. As of right now, residents of the United States have the option of CoinFueled.com at which you can buy gasoline giftcards for most gas stations across the country. To place an order you need to know the dollar amount and the companies you want. The invoice for your gasoline gift cards will be sent via BitPay. Expect this process to take several weeks, so order well ahead of time!

Gasoline Purchasing Tips

You have to know how much gas you will need before placing the order. We found that driving through mountains, tents tied to the roof, construction traffic, and the weight of your luggage greatly impact gas mileage. Order more than you think you need so you don’t run out!

Food

Our family’s favorite bitcoin food experience has been Whole Foods. We purchase a giftcard through Gyft.com then stop to eat lunch and grab food for snacks and meals throughout our trip. This is an excellent way to kill two birds with one stone (hot meal, groceries). You can also get toiletries and reading materials, and replace that piece of clothing you forgot to pack!

Most food purchases on the road will likely come through Gyft.com or EGifter.com. Those sites carry gift cards for restaurant chains across the country.

If you want a restaurant that accepts BTC directy, visit coinmap.org or use the AirBitz application on your phone/tablet.

I highly suggest a visit to Cleveland Heights, OH if you want to experience a full vacation on BTC. Their Bitcoin Boulevard is jam packed with restaurants and shops that accept bitcoin directly.

Tips for Eating on the Road:

Always call ahead if you are traveling a long distance. We have shown up to chain restaurants we found on google maps, only to find a closed sign on the door. Since we were spending BTC only, we had to spend some time finding the next closest place to eat.

Be prepared for delays if you are purchasing directly with BTC. Several restaurants we visited from coinmap.org did not fully grasp how to accept payment and it took over 20 minutes to help them figure it out!

Enjoy

With bitcoin you can stay in hotels or bed and breakfasts, you can fly or drive, and you will even find the option to stay in resorts, visit casinos and take a cruise.

You can follow our latest bitcoin journey at uncoinventional.com.

Uncoinventional Travel Guide:

Hotels

• CheapAir.com
• Expedia.com
• GlobalHotelCard.com via Gyft (articles about Gyft: 1 2 3)
• Groupon via Gyft
• Hyatt via Gyft or EGifter
• CoinMap.org
• SanLuisRestort.com via EGifter
• BTCTrip.com (articles about BTCTrip: 1 2 3 4 5)

Bed and Breakfasts

• BedAndBreakfast.com via Gyft or EGifter
• CoinMap.org

Rooms / Guest Houses

• AirBNB.com
• 9Lofts.com
• CoinMap.org

Airplane Tickets

• American Airlines via Gyft or EGifter
• ABitSky.com
• CheapAir.com
• BTCTrip.com

Gasoline

• CoinFueled.com (review)

Cruises

• Carnival Cruise Line
• Celebrity Cruises

Casinos

• Golden Nugget Hotel and Casino via EGifter

Travel Items

• Amazon via Gyft

Groceries

• Whole Foods via Gyft or EGifter
• AirBitz.com

Restaurants

• CoinMap.org
• Gyft
• EGifter
• AirBitz.com
• BitcoinBoulevard.us

Entertainment

• Groupon via Gyft or EGifter
• Great American Days via EGifter
• Alamo Draft House via EGifter
• AMC Theaters via Gyft or EGifter
• Aquarium Restaurants via Gyft or EGifter
• TRex via Gyft or EGifter
• Rainforest Cafe via Gyft or EGifter

The Republican reaction to bitcoin has been mixed. Some lawmakers have enthusiastically supported it, while others have unequivocally opposed it. Interestingly, many mainstream Republican positions make amiable bedfellows with bitcoin. In this article, each section begins with a quote taken directly from the 2012 Republican Party Platform, followed by a discussion of how bitcoin can address the issue in question.

Small Business and Entrepreneurship

America’s small businesses are the backbone of the U.S. economy, employing tens of millions of workers. Small businesses create the vast majority of jobs [and] are the leaders in the world’s advances in technology and innovation, and we pledge to strengthen that role and foster small business entrepreneurship.

In a world where resources are preposterously precious and margins are extraordinarily thin, every cent counts. An entrepreneur’s livelihood depends upon his or her ability to squeeze out every last proverbial drop. Credit card acceptance, a necessary addition to any modern business model, is accompanied by processing fees averaging 2-3 percent (and up to 5 percent). In addition, merchants bear the cost of chargebacks, which can range from $25 to $100 each.

In addressing these two issues, bitcoin is a dream come true for entrepreneurs and small business owners. Bitcoin processing fees are significantly lower (0-1 percent); this reduces operating costs and allows merchants to pass the lower prices onto consumers, thereby becoming more competitive. Furthermore, since bitcoin obviates the need for third-party confirmation, merchants don’t have to worry about chargebacks.

Homeownership

Homeownership expands personal liberty, builds communities, and helps Americans create wealth…We must establish a mortgage finance system based on competition and free enterprise that is transparent, encourages the private sector to return to housing, and promotes personal responsibility on the part of borrowers.

An increase in homeownership correlates positively with a single word: access. Under the current state of affairs, lack of credit and underwhelming credit scores prevent many people (especially minorities, the young, and those who have simply made mistakes) from realizing the “American dream.” It’s not the banks’ fault, though: they’re just using the best tool available for assessing risk.

Smart property—property contracts enforced by the blockchain—holds promise for moving us away from trust-based systems. It reduces risk for lenders and eliminates the need for anachronistic credit history reports. For example, imagine a house that locks out its “owner” if mortgage payments go consistently unpaid. Nothing would “promote personal responsibility” more than that. Let’s hope smart property becomes a reality sooner rather than later.

Sound Money and Central Banking

A sound monetary policy is critical for maintaining a strong economy. Inflation diminishes the purchasing power of the dollar at home and abroad and is a hidden tax on the American people. Moreover, the inflation tax is regressive, punishes those who save, transfers wealth from Main Street to Wall Street, and has grave implications for seniors living on fixed incomes.

The Republican Party accurately characterizes the disastrous effects of inflation. At some point, however, it must be understood that “sound money” and “central banking” cannot co-exist either in theory or as policy. So long as control of the currency rests with a central authority, manipulations of interest rates and money supply are meaningless. Inflation and its corollaries will always be present.

On the other hand, bitcoin upends the existing monetary paradigm. For starters, it is a decentralized, peer-to-peer currency, meaning that no central figure (other than mathematics itself) has control over its value or supply. What’s more, bitcoin is inherently deflationary. By design, additional bitcoins introduced into the ecosystem will gradually taper off and be capped in the year 2140. Thanks to a static supply, bitcoin will never be afflicted by inflation.

Foreign Aid

[O]ur foundations, educational institutions, faith-based groups, and committed men and women of charity devote billions of dollars and volunteer hours every year to help the poor and needy around the world. Limiting [government-to-government] foreign aid spending helps keep taxes lower, which frees more resources in the private and charitable sectors, whose giving tends to be more effective and efficient.

Republicans tend to understand the beneficence of private charity better than other political groups. They correctly point out how state aid often fails to help its intended recipients. Unfortunately, this also occurs with private charity. Horror stories abound of institutional organizations bamboozling well-meaning contributors (remember Kony 2012?). It’s commonplace for only a small percentage of your donation to reach the children of Africa (or wherever it was originally destined).

With bitcoin, monetary resources can be sent wholly and directly to the individuals who need it, regardless of location. Money doesn’t need to travel through thickets of bureaucracy–banks, governments, transmitters, intermediaries of all kinds–to arrive at its destination. With the click of a button on a smartphone or computer, I can send my wealth instantly and directly to a tsunami victim in East Asia. Moreover, in the broader sense of third-world empowerment, bitcoin can enable more robust global exchange by reducing the cost of international remittance, aiding the unbanked, and making the worldwide division of labor ever more complex.

Cybersecurity

The government and private sector must work together to address the cyberthreats posed to the United States, help the free flow of information between network managers, and encourage innovation and investment in cybersecurity…[W]e acknowledge that the most effective way of combating potential cybersecurity threats is…protecting the free flow of information within the private sector.

Everyday, the private sector spends inordinate amounts of time and money combating cyberthreats. Merchants pay $2.79 on every dollar lost to fraudulence.

Identity theft and security breaches related to commercial transactions are not possible in a bitcoin world. Investor Marc Andreessen writes at The New York Times that, in addition to addressing online security issues, “Bitcoin’s antifraud properties even extend into the physical world of retail stores and shoppers. For example, with Bitcoin, the huge hack that recently stole 70 million consumers’ credit card information from the Target department store chain would not have been possible.”

The professed aims of the Republican Party discussed above—enabling small businesses, increasing homeownership, promoting sound money, improving foreign aid, and enhancing cybersecurity—are things that people of all political leanings care about. Bitcoin is in a unique position to address each and every one of these issues in a positive way.

Watch for my upcoming article “Why Democrats Should Love Bitcoin.”

 

BitNation is described as offering a “full range of services traditionally done by governments.” Included in this are secure ID systems, block chain dispute resolutions, marriages and divorces, land registries, education, insurance, security and more. BitNation hopes to accomplish all of this through a fully distributed platform. It seems like the buzz word of 2014 is DAO or DAC (distributed autonomous organization/corporation, respectively). Ethereum has gotten a lot of media for their launch, and BitNation is preparing for their own launch, which takes place in approximately 13 days. I spoke with Susanne, the Founder and CEO of BitNation, about her background, interests and what she hopes to achieve with her project.

Victoria: Susanne, what exactly is Bitnation? Can you give us a brief overview of what you’re achieving with this project?

Susanne: Bitnation is a Decentralized Organization (DO), offering Governance 2.0 services: borderless, decentralized, and voluntary blockchain-based governance applications through a user-friendly and cost-efficient platform, including a reputation based ID System, Dispute Resolution, Mutual Insurance, Diplomacy, Security and more. What Bitnation essentially provides people with is a toolbox for Do-It-Yourself (DIY) governance. The platform will be released in Q4 2014 in tandem with our upcoming crowdsale. The platform will be open source for people to share, fork, and create their own Bitnation. There will also be an Application Programming Interface (API) layer for 3rd Party DAPP developers to use to create their own governance DAPPS, and then give it away or sell it through our Governance DAPP Library.

Interesting. Why did you decide to start this project?

I’m from an international family, and I’ve always been moving around a lot throughout my life. To me nations and their arbitrary borders always seemed pointless and I’ve been thinking about different types of voluntary and competitive governance systems for the last decade or so. When I discovered Bitcoin in 2012, I realized it wasn’t maybe as far fetched as a vision as I initially thought, and after spending some time taking a hard look at the Bitcoin technology I realized that most of the fundamental things I wanted to achieve were doable through the blockchain protocol. Additionally, a lot of interesting technologies emerged around the same time, such as Ethereum, Codius, Open Transactions, CounterParty, Coloured Coins, Notary Chains, etc., giving me an unprecedented set of tools to work with to help me realize my vision.

Can you give us some examples of what your work is achieving (Bitmarriage, etc.)?

In the Western Hemisphere most governance services are already provided for by the government, however this is not always the case – take for instance marriage services for the HBTQ and Polyamory communities. Additionally, many people may prefer, for ideological reasons, not to use centralized services offered by governments, and some may want to use our platform for practical and financial reasons – simply because it’s a more efficient and fair system to integrate into their lives.

In emerging and frontier markets, by contrast – in many places – these services do not exist or are nearly impossible to use because overwhelming bureaucracy and corruption. Yet these services are sorely needed; from deeding land, to corporate incorporation, mutual insurance, dispute resolution, and more. Imagine for example Ricardo who owns a house in the favela in Rio de Janeiro, but due to government distrust and corruption he cannot deed it to protect it for his children’s future.

Imagine a phone salesman in Cambodia who can’t open a small back office company because it’s difficult to incorporate due to the significant bureaucratic red tape he has to overcome (the incorporation process takes an average of 104 days). But the phone salesman needs to incorporate to sell equity to raise funds, in order to make his vision come true.

Or take for instance a Christian family living in Riyadh, who won’t settle their disputes in the local courts because they only cater for Sharia Law. The examples of where the existing systems in place, or the lack thereof, are preventing poor and middle-class people worldwide from enjoying political, social and economic mobility are endless!

Very cool. Susanne, what upcoming conferences will you be attending?

We will have a panel presence at Coins in the Kingdom conference in early October at Disney World which includes a wedding ceremony being done on the blockchain; as far as we know it is a first of its kind ever. Other than that, I’ll be speaking at the Brazilian Bitcoin conference in Sao Paulo in November, Anarchapulco in Mexico next year, and I’ll be making a few minor appearances here and there. Since we are a young organization with limited financial and time resources for travelling to events, we haven’t had the time to get full on into the conference circuit yet, but this will most likely change as we grow.

What advice do you have for entrepreneurs in the bitcoin space?

The crypto space is a wild frontier at the moment – it moves quickly and is unpredictable, not just in terms of technological development but also in terms of regulatory parameters and mainstream adoption. While in other fields it may be possible to take a solitary approach to product development with the help of solid market analysis, that is nearly impossible in this sphere due to the speed of development. Hence, the best way to approach crypto-entrepreneurship is to be aware of, and open to, new developments and to collaborate with as many people as possible. Being inclusive will allow you stay on top of the wave much more than doing your own thing isolated from the input, support, and creativity of the community.

What do you see happening in Bitnation’s future?

On October 10th, we’re launching our cryptoequity crowdsale to raise seed capital for the organization. The fundraiser will last for 3 months, until January 10th, 2015, with the price increasing as development benchmarks are met. There will be more information about that on the web-site (www.bitnation.co).

In Q4 2014 we will launch our platform, along with some core services: ID System, DAPP Library, Dispute Resolution System, “Family” Contracts (e.g. marriage and divorce, wills, childcare contracts, land deeds, etc). In 2015 we will also be launching the insurance, diplomacy and security services. We have a lot of work ahead of us, but we have a brilliant team and community helping to make this a reality.

The human ‘architecture’ of Bitnation is at least, if not more important than the technology.

Through building our our Ambassador Network (a network of Bitcoin enthusiasts and entrepreneurs primarily in emerging and frontier markets), we create an ecosystem of on-the-ground assessments for governance needs which feeds up to our product design. In turn the Ambassadors can use it or fork it for their community, and create a better adjusted version for their specific context, and leverage it financially.

We want to empower entrepreneurs around the world to build and implement their own DIY governance tools. Bitcoin adaption is growing in those markets, specially in places with a high volume of remittance payments like Mexico and the Philippines, or places with a perpetually unstable economy: Argentina, Cyprus, Greece, etc.

Our long-term hope is that emerging and frontier market adoption will drive changes in more mature markets who will need to adapt the same governance speed, and flexibility to remain competitive. We believe that the speed and flexibility can only come from a voluntary and decentralized market for governance services.

What is the best lesson you have learned so far in your work with bitcoin?

That everything is possible! Before I knew about Bitcoin I was very disillusioned about the current political and financial system but I couldn’t see any good, practical solution to any of it. But discovering Bitcoin was amazing… it’s incredible how this arcane branch of mathematics, cryptography suddenly produced a new currency; Bitcoin which in just a few years time went from being worthless algorithms traded by only a few geeks, to a globally known currency that is now on the front page of every mainstream publication. Or another example; who would have thought just a few years back that a currency – backed by a silly meme  like “Doge” would start to crowdfund for NASCAR (#98)? And now, well, soon we’ll see the first block chain-based marriages, dispute resolutions, insurances becoming a reality. I truly believe that nothing is impossible in this ever evolving realm!

 

Applications have officially opened for Swarm’s first class with projects to be launched on the 5th of November

Sept 30, 2014 — The Bitcoin­powered crowdfunding platform Swarm (http://www.swarm.co) has announced that its first class of five projects will launch on the 5th of November in the world’s first decentralized demo day. Applications are open until the deadline of October 5th.

Swarm, the “Bitcoin 2.0” platform which in July successfully raised in $1mm in an exchange of Bitcoin for its own in­network currency, is now helping other innovative projects to use its newly released platform to raise money in the same way. This involves the exchange of Bitcoins or regular US dollars for a cryptocurrency that can later be redeemed in a project.

“The world needs a more fluid funding mechanism,” said Swarm founder Joel Dietz. “We believe that using cryptocurrency and crowdsourced project screening will allow innovative projects to be funded much more quickly without having to be run through centralized middlemen.”

Swarm is using this via their decentralized due diligence process, a way in which participants in the Swarm network can participate in the screening of all projects. Many applications have been received since the unofficial announcement on Sept 15th and a few have already advanced to the video interview stage.

The Swarm platform has already been in Beta release with the Bitcoin Comic, the first full length graphic novel that explained Bitcoin, which recently surpassed 50% of its fundraising goal (http://www.swarm.co/comiccoin). Several additional features and tweaks are planned for the 5th of November release.

Says Joel Dietz, in keeping with the V for Vendetta theme of the event, “Remember, remember, the 5th of November.”

 

About Swarm

Swarm is a revolutionary crowdfunding platform that uses Bitcoin technology to give out shares in a project. This allows entrepeneur to raise more funds more quickly, and gives a greater share in the project’s success. www.swarm.co

 

# # #

MEDIA CONTACT

Joel Dietz

Swarm

[email protected]

+1 215 559 9165

 

The Liberty Beat Partners with Genesis Communications Network

FOR IMMEDIATE RELEASE

Contact: John Bush, Owner and Editor in Chief of The Liberty Beat

Phone: 512-773-6102 Email: [email protected]

San Marcos, TX – The Liberty Beat, your daily source for liberty news and activist updates, is announcing a new partnership with the Genesis Communications Network that will greatly expand the reach of the program. The daily news service will also soon be producing three updated editions a day.

Since January of 2013, The Liberty Beat has provided daily top-of-the-hour news that could be heard on LRN.FM and up to 14 times per day on 90.1 FM in Austin, TX.

Now, you can hear the daily news service on the Genesis Communications Network and many of their AM and FM affiliates. The Liberty Beat will be included at the top of every hour during Free Talk Live, the Katherine Albrecht Show, the NutriMedical Report, and will also be downloadable via the GCN podcast feed.

The program has evolved from a one man hobby operation to a full fledged news service that contracts with writers and producers from their office in downtown San Marcos, Texas.

“We’ve come a long way in the quality and depth of our content,” said John Bush, founder of the Liberty Beat. “I used to exhaust myself running the program solo. Since bringing on Derrick Broze and Catherine Bleish as writers and Brian Hagen as our voice talent, we have been able to take it to the next level. With our new partnership with GCN, the sky is the limit!”

Every day The Liberty Beat announces the price of gold, silver and bitcoin, then provides a unique set of daily news topics including features on foreign policy, the rise of the police state, economics and alternative currencies, sustainable living, activist events and action, and more.

In the coming months, The Liberty Beat will be transitioning from a once a day format to delivering regular updates throughout the day in the form of three daily editions. You can contribute to the growth of the Liberty Beat by contacting John Bush to become a sponsor, or visiting www.TheLibertyBeat.com to contribute via PayPal, bitcoin, or other means.

The Liberty Beat Team is planning to celebrate this new partnership with a launch party at Brave New Books in late-October. An announcement will be posted when plans are finalized.

Read the news and join the community: http://TheLibertyBeat.com

Like us: http://Facebook.com/TheLibertyBeat

Follow us: http://twitter.com/TheLibertyBeat

###

The word “crypto” is Greek in origin (from kryptós) and means “hidden” or “secret.” Cryptozoology is the study of hidden and rare animals, cryptography is the study of hidden or secret writings, etc. In contemporary times, the use of crypto as a prefix usually designates a secret identification. While few today would declare their allegiance to the ideals of fascism, it is not uncommon to hear people referred to as “crypto-”fascists. The addition of crypto as a prefix in this case indicates a belief that someone is 1) secretly a fascist or 2) they act in ways to surreptitiously bring about fascism.

The double entrendre of “crypto as a prefix” can help us understand the role of crypto in the broader paradigm of achieving a liberal society. Crypto-Anarchists, I argue, are ideologically committed anarchists who recognize the superior efficacy of utilizing cryptographic means to achieve freedom. The population belonging to this group is, shall we say, narrow. These anarchists are “crypto” in the first sense of the word: they are anarchists who deliberately and intentionally want to recreate society on the basis of decentralized consensus, trustless networks, and strong encryption.

Cryptoanarchists, on the other hand, encompass the whole body of people who are using cryptographic tools without the understanding that they lead to anarchy. They embody the second sense of the word “crypto” – that is, that by using cryptographic tools as a function of their own self-interest, they are ignorantly and absentmindedly promoting an anarchist world. They are popularizing and normalizing tools of trade – such as Bitcoin or OpenBazaar – without any reference to society, politics, or economics. They are, usually, blissfully unaware of the goings-on at the Federal Reserve or the latest attempt by the Dept of Justice to regulate “intellectual property.” They care not for discussions of Internet freedom, and aside from the mass revolt against CISPA/SOPA, they generally do not foray into topics pertaining to digital property, privacy, political freedom and independence, and so on. They are mostly Muggles who, through natural processes of diffusion, have learned from others to use Bitcoin, TOR, TextSecure, GNU/Linux, or other various tools in the Crypto-Anarchist toolbox.

Both of these groups are absolutely vital to the success of crypto-anarchy as a movement. The field of intelligent specialists in cryptography, systems security, digital cash, and peer-to-peer networking is small. Though this group is few in numbers, they provide the much needed ideological zeal to inspire people to devote their time to create these products, often voluntarily. Computer scientists, IT specialists, and software geeks of all types are, like everyone, influenced by incentives. The work they perform is work like any other, and is usually purchased by various companies. Intelligent programmers are normally scooped up by large, centralized companies to tackle specific problems relating to server maintenance, communications, or other projects. Software giants today have little incentive – or perhaps disincentive – to spur their hired coders to create innovative, decentralized networks. Decentralized networks are anathema to the Microsofts and Apples of the world today. Hence, the majority of “software proficient” people find themselves working on puzzles for corporations – they are not geniuses who strike out and break the paradigm.

The ideologically committed Crypto-Anarchists are the ones putting fire in our hearts; they are the ones inspiring and encouraging others to pick up an encrypted weapon and join the fight. They spread anarchy through their natural means: coding. Crypto-Anarchists, like Cypherpunks before them, write code. While writing code, they also write prose that speaks to the souls of fellow programmers and software developers spending 40 hours a week to tweak Skype’s “calling” interface. When approached with dreams of independence and integrity, many devote their volunteer time to building anarchist tools. For all its ideology, Bitcoin is COOL. It is NEAT. It is innovative in ways that surpass economics, computer science, and law. It ushers in a new paradigm of communication and contracts. Bitcoin will do to money what BitTorrent did to information: release it. Money and contracts will no longer be the domain of bankers and lawyers. They are unnecessary, antiquated solutions to collective action problems that existed before decentralized consensus mechanisms were available. In the Bitcoin age, they are dinosaurs, unfit for the new future world. Describing and elaborating on this new world brings excitement. Anything is possible! Programmers now have a small side-interest in working on Bitcoin or Bitcoin-related projects. They saw the computer science implications long before economists saw the economic implications (lawyers have yet to be brought up to speed on the legal implications). The Crypto-Anarchist zealotry is hugely important; it shunts men and women out of their regular daily lives toiling away for centralized institutions and it creates a desire to free the world from software giants and telecom companies.

While they are the firebrand minority, most of the work to be done relies on the cryptoanarchists: the mass crowd of consumers who desire cool stuff. Once Bitcoin crosses the innovation chasm, and regular people realize they can use it in place of stuffy government money, they will become adherents and will support it simply for the amazing things it does: own and control money without tying it to a legal identity, send it to next door or across the world for five cents, and have perpetual access to your account. Of course, if they realize that it destabilizes fiat currencies and central banks, all the better. But that is the domain of Crypto-Anarchists, not cryptoanarchists. So long as they are using Bitcoin or TOR (to evade internet espionage) or Linux (to evade malware), they are promoting anarchy. The critical tie-in, for Crypto-Anarchists, is to create anarchist tools hidden within amazing consumer goods: Smartphones that are completely open-source, communication tools that are end-to-end encrypted, operating systems that leak no information! This is the key! Package the tools to anarchism nonchalantly in new technologies and watch the world transform.

Once consumers start chatting over lines that are end-to-end encrypted by default, dragnet surveillance is over. Once consumers start browsing the Internet through I2P or TOR, Internet espionage is over. Once consumers start using Bitcoin in their purchases, debt payment, remittances, savings, and investment assets, the monetary circus of inflating fiat currencies is over. Without control of money and information, the State itself withers. It cannot tax what it cannot surveil. By popularizing these crypto tools within “normal” consumer electronics, we make anarchy in everyone’s self-interest. No longer need they report their earnings to the IRS because their employer automatically sends a W-2 or a 1099; all earnings and expenditures are on cryptocurrency ledgers.

The Blockchain and other innovations will eradicate any ability for the State to prey on its people. Most advocates for liberty have taken the attitude that mass awareness is required, that without educating and informing people that they are slaves under a worldwide criminal apparatus, there will never be freedom – but this is not so! Simply give people the tools to protect themselves, wrap them in shiny user interfaces, and say nothing more. Let the intelligent users discover the lineage of cryptography and digital cash, and let the typical users enjoy their privacy. Nothing more is needed to undermine the State than mass disobedience through cryptography.

Arthur C. Clarke’s third law famously states: “Any sufficiently advanced technology is indistinguishable from magic.” What Bitcoin makes possible can at first seem almost magical, or just impossible (and therefore most likely fraudulent or otherwise doomed). The following describes the basic technical elements behind Bitcoin and how it brings them together in new ways to make seeming magic possible in the real world.

Clarke’s second law states: “The only way of discovering the limits of the possible is to venture a little way past them into the impossible.” And this, we can see in retrospect, is basically what Bitcoin creator Satoshi Nakamoto did. Few at the time, even among top experts in relevant fields, thought it could really ever work.

It works.

One reason many people have a hard time understanding Bitcoin is that it uses several major streams of technology and method, each of which is quite recent in historical perspective. The main raw ingredients include: an open-source free software model, peer-to-peer networking, digital signatures, and hashing algorithms. The very first pioneering developments in each of these areas occurred almost entirely within the 1970s through the 1990s. Effectively no such things existed prior to about 40 years ago, a microsecond in historical time, but a geological age in digital-revolution time.

Some representative milestone beginnings in each area were: for open-source software, the GNU project (1983) and the Linux project (1991); for peer-to-peer networking, ARPANET (1979) and Napster (1999); for digital signatures, Diffie–Hellman theory (1976) and the first RSA test concept (1978); and for hashing algorithms, the earliest ideas (around 1953) and key advances from Merkle–Damgård (1979). Bitcoin combines some of the best later developments in each of these areas to make new things possible.

Since few people in the general population understand much about any of these essential components, understanding Bitcoin as an innovation that combines them in new and surprising ways, surprising even to experts within each of those specialized fields, is naturally a challenge without at least a little study. Not only do most people not understand how the Bitcoin puzzle fits together technically, they do not even understand any of the puzzle pieces! The intent here is not to enter into much detail on the content of any of these technical fields, but rather to provide just enough detail to achieve a quick increase in the general level of public understanding.

What Bitcoin is about in one word: Verification

It may help to focus to begin with not on the details of each field, but at how each part contributes strategically to Bitcoin’s central function. This is to create and maintain a single unforgeable record that shows the assignment of every bitcoin unit to addresses. This record is structured in the form of a linked chain of blocks of transactions. The Bitcoin protocol, network, and all of its parts maintain and update this blockchain in a way that anyone can verify. Bitcoin revises the Russian proverb, “doveryai, no proveryai,” “Trust, but verify,” to just “verify.”

If a single word could describe what the Bitcoin network does, it would be verification. For a borderless global currency, relying on trust would be the ultimate bad idea. Previous monetary systems have all let users down just where they had little alternative but to rely on some trusted third party.

First, the core Bitcoin software is open source and free. Anyone can use it, examine it, propose changes, or start a new branch under a different name. Indeed, a large number of Bitcoin variations with minor differences have already existed for some time. The open source approach can be especially good for security, because more sets of eyes are more likely to find weaknesses and see improvement paths.

Open source also tends to promote a natural-order meritocracy. Contributors who tend to display the best judgment also tend to have more of their contributions reflected over time. Unending forum discussions and controversies are a feature rather than a bug. They focus attention on problems—both real and imagined—which helps better assure that whatever is implemented has been looked at and tested from diverse angles.

Many computers worldwide run software that implements the Bitcoin protocol. A protocol is something roughly like a spoken language. Participants must speak that language and not some other, and they must speak it well enough to get their messages across and understand others. New protocols can be made up, but just as with making up new languages, it is usually rather unproductive. Such things only take off and become useful if enough others see a sufficient advantage to actually participate.

Second, as a peer-to-peer network, there is no center. Anyone can download core Bitcoin software and start a new node. This node will discover and start communicating with other nodes or “peers.” No node has any special authority or position. Each connects with at least eight peers, but sometimes many more. Some faster and always-on nodes relay more information and have more connections, but this conveys no special status. Any node can connect or drop out any time and join again later. A user does not have to run a full node just to use bitcoin for ordinary purposes.

It is common to say that Bitcoin is “decentralized” or doesn’t have a center. But then, where is it? Thousands of active peering nodes are spread over most countries of the world and each one carries an up-to-date full copy of the entire blockchain.

Some nodes not only relay valid transactions and blocks, but also join the process of discovering and adding new blocks to the chain. Such “mining” activities both secure the final verification of transactions and assign first possession of new bitcoin to participating nodes as a reward. Understanding basically how mining works requires a look at the distinct functions of several different types of cryptography.

Bitcoin cryptography dehomogenized

Bitcoin relies on two different types of cryptography that few people understand. Both are counter-intuitive in what they make possible. When most people hear “cryptography,” they think of keeping data private and secure through encryption. File encryption can be used to help secure individual bitcoin wallet files, just as it can be used for the password protection of any other files. This is called symmetric key cryptography, which means the same key is used to encrypt and decrypt (AES256 is common in this role). Encryption may also be used for secure communication among users about transactions, as with any other kind of secure traffic. This is called asymmetric key cryptography, which means a public key encrypts a message and its matching private key decrypts it at the other end.

However, all of this is peripheral. Nothing inside the core Bitcoin protocol and network is encrypted. Instead, two quite different types of cryptography are used. They are not for keeping secrets, but for making sure the truth is being told. Bitcoin is a robust global system of truth verification. It is in this sense the opposite of the “memory hole” from George Orwell’s 1984; it is a remembering chain.

The first type of cryptography within Bitcoin is used to create a message digest, or informally a “hash.” Bitcoin uses hashing at many different levels (the most central one is an SHA256 hash run twice). The second type is used to create and verify digital signatures. This uses pairs of signing keys and verification keys (ECDSA sepc256k1 for signatures).

The keys to the kingdom

Despite intuitive appearances to users, bitcoin wallets do not contain any bitcoin! They only contain pairs of keys and addresses that enable digital signatures and verifications. Wallet software searches the blockchain for references to the addresses it contains and uses all the related transaction history there to arrive at a live balance to show the user. Some of the seemingly magical things that one can do with bitcoin, such as store access to the same units in different places, result from the fact that the user only deals with keys while the actual bitcoin “exists,” so to speak, only in the context of the blockchain record, not in wallets. It is only multiple copies of the keys that can be stored in different places at the same time. Still, the effective possession of the coins, that is, the ability to make use of them, stays with whoever has the corresponding signing keys.

While software designers are working hard to put complex strings of numbers in the background of user interfaces and replace or supplement them with more intuitive usernames and so forth, our purpose here is precisely to touch on some technical details of how the system works, so here is a real example of a set of bitcoin keys. This is a real signing key (do not use!):

5JWJASjTYCS9N2niU8X9W8DNVVSYdRvYywNsEzhHJozErBqMC3H

From this, a unique verification (public) key is cryptographically generated (compressed version):

03F33DECCF1FCDEE4007A0B8C71F18A8C916974D1BA2D81F1639D95B1314515BFC

This verification key is then hashed into a public address to which bitcoin can be sent. In this case:

12ctspmoULfwmeva9aZCmLFMkEssZ5CM3x

Because this particular signing key has been made public, it has been rendered permanently insecure—sacrificed for the cause of Bitcoin education.

Part II will discuss hashing and the essential roles it plays in the technical structure of Bitcoin, as well how the system has been designed to be self-financing right from the beginning into the indefinite future.

To read Part II, click here!

About the Author

Konrad S. Graf (@KonradSGraf) writes on Bitcoin and monetary theory. This work so far is collected at konradsgraf.com/bitcoin-theory. He appeared on panel discussions on Bitcoin and economic theory and monetary history at the Bitcoin 2014 conference in Amsterdam, and in 2013, he presented on Bitcoin and social theory at the Mises Seminar Australia in Brisbane and via pre-recorded interview at the Bitcoin Singapore conference. He is currently focusing on additional research and writing in this area.

 

 

Please send Konrad a tip: 174YDzQuMdUgNbd9sQspPdNjZwg7UxQNVi

 

Out of all of the Bitcoin-accepting charity representatives I’ve had the pleasure to interact with, Anne Connelly was the most sincere. Although she admits it started as a publicity stunt, she claims her interest grew the more she learned about it, and hopes to make it a significant source of funds. She reached out to the VanBex marketing company to ask for help in finding Bitcoin donors and discuss sponsorship opportunities, and was referred to the Bitcoin Co-op, which handles non-profit projects. In the short time since we’ve partnered with them, I’ve gotten to understand their perspective on Bitcoin’s charitable impact, and how we can amplify it even further.

Dignitas International is a Canadian-based international charity dedicated to fighting AIDS in poor communities. They have received millions of dollars in donations and high-level government recognition, making them one of the most renowned charities to adopt Bitcoin so far. Unlike other charities, which attempt to have a regional or global presence, Dignitas chooses to set up shop in and focus on a single country. Their country of choice–Malawi–is one of the most afflicted places on Earth, with AIDS patients occupying 70% of hospital beds, and countless more perishing in the streets.

The Dignitas staff have been able to form close relationships with the locals there, and are focused on a community-driven approach to treatment and prevention. This has been the most effective way of tackling the epidemic in a nation where literacy rates are too low to support the required number of doctors, and professional programs are unaffordable. According to Anne, much of what money they do have goes to antiviral treatments, which they’re using successfully to prevent expecting mothers from passing the HIV virus onto their children by limiting its concentration.

 

 

By focusing on a small region over the last few years, Dignitas has managed to produce vital new research in the process: careful monitoring of the success rates of various programs in a more controlled population has allowed them to advance health policy and treatment protocols in over 25 academic papers. Despite these innovations, they still pay 2-5% when accepting donations via credit card, which adds up to a substantial amount for the average Malawian. Although they currently get very few Bitcoin donations compared to their massive existing donor base, they pay nothing to accept via CAVirtEx for the first $100,000, and less than 1% thereafter.

The real benefits come in when it’s time to move that money overseas. Sending it from Dignitas’ headquarters in Toronto to their clinic in Zomba District incurs even greater fees, due to Malawi’s poor financial infrastructure. This also means Malawians are largely unbanked, and which makes them a prime target for Bitcoin adoption. Unfortunately, Malawi seems to lag behind other African countries like Kenya in cellular technology, and few have access to even the most basic devices required to utilize cryptocurrency. Services such as MPesa are only just beginning to bring it to the African mainstream, which has more pressing concerns to deal with.

Anne says that leaves it up to organizations like MPesa and Dignitas International to act as middlemen for the time being. Unfortunately, her superiors are cautious towards the idea–phones or tablets are likely to be stolen and sold for necessities like food, and electricity and the Internet are both unreliable. If we can prove that Bitcoin is a serious and viable way to bolster their operation, maybe they can help set up the first Malawian Bitcoin exchange one day. They give tax receipts unless you prefer to remain anonymous, so please donate via their Bitcoin webpage to help!

 

1P48yFKxUKFhd62sS3tFVE6RG9So7UgBeY

Part I can be read here along with this CoinDesk Article on why we changed Camp Bitcoin to Camp Dogecoin

---

 

“What is this–that Bitcoin bulls*t?!” were the words I awoke to my first morning at Burning Man. A large burly man declaring himself as “Papa Bear,” who was also in charge of placement of our camp, came out with teeth bared. We had set up camp about 10 feet in the wrong direction, and he found an excuse to ream us out for not agreeing with his brain.

Our camp organizer, Gary Lachance, instantly sprung out of his tent, fully postured to face the noise.  “Camp Dogecoin,” Gary said in his calm collected monotone voice, trying to calm the beast. Papa Bear was upset with our camp theme, claiming we were trying to commodify Burning Man with cryptocurrency. Decommodification is one of the core principles of Burning Man he swore to protect.

“It’s the decommodification of money,” Gary calmly insisted.  I stepped in briefly, exclaiming “It’s a liberating technology!” But Papa Bear didn’t care. “The thought of money at Burning Man makes me want to puke on his shoes!” He spat to Gary, referring to me.

He gave us one last warning and parted, ”I’m just letting you know that there’s going to be some people around here who don’t agree with what you’re doing, I don’t give a f*k what happens in the default world, this is Burning Man.”  Oh boy, had we come to the wrong place?

Welcome to Black Rock City – Burning Man 2014

It was a long and arduous drive with several missions interspersed between. The Decentralized Dance Party temporarily purchased a 2008 Burgundy Dodge Caravan, that we instantly dubbed The Doge Caravan–a fitting name for Burning Man 2014’s theme of Caravansary. We had come equipped with full Doge propaganda, including stickers, buttons, and a flag. After strapping the obligatory Shibe rocket to the roof of the Doge Caravan, we headed down from Vancouver to the American border.

Previously, I had been convinced that the Dogecoin community was the most subversive culture on the planet, but when finally entering the gates, we found an equally impressive sub(versive)-culture at Black Rock City: Burner Culture.

Let’s recap for those who don’t already know: Burning Man is more than a festival; in fact, festival is an understatement. It’s a makeshift city that is erected for a week in the middle of the Nevada desert. There’s an entire culture, ethos, economy, and history that goes along with this place.  That’s why we were a little rattled after our encounter with Papa Bear–had we crossed the line of what for many is a sacred pilgrimage?

Despite the initial adversity, we had set forth with the intention of spreading the word of Decentralization prefaced by the face of our Lord and Saviour. We came here on a mission–a mission from Doge.

My first night out, I went alone to take it all in. I can only try to describe what it’s like out there; walking into Deep Playa at night is like walking into a mysterious yet playful void of boundless neon art. Imagination unfurled, I’m biking through the psychedelic cosmos that only those who’ve played Rainbow Road in Mario Kart would understand.

Coming from the the “default world”, as Burners call it, to Black Rock City, is extremely overwhelming–think of the culture shock you get when traveling to a new exotic country and multiply that by 100.

One of the most beautiful things in Black Rock City is the thriving gifting economy; this means no trades, no bartering, no cash transactions. Or in other terms, not giving a good or service and expecting a good or service in return.

This really rubbed off on me. For instance, I was biking around in the hot Nevada desert, and out of nowhere a man with a bicycle cooler starts handing out ice cream–granted, he made me scream for it. Other gifted items included: clothing, neon lights, meals, buttons, velcro, alcohol, and entheogenic substances.

The first thing me and Gary did was make acquaintance with Darrell Duane, The Mayor of Anahasnana Village and member of Camp Contact. Darrell had been hosting the Bitcoin Meetups at Burning Man for a couple of years, and is well versed in the deeper intricacies of crypto. Our camp helped set up their dance floor, and they let us use one of their Domes for our Decentralization talks. Darrell, if you’re reading this, thank you for supporting us and letting us camp in the village.

 

Our first talk we had was small but included Corey, Joshua Katen of the North Bay meetup in Santa Rose, Thomas Hunt of Mad Bitcoins, Gary Lachance and I. It was refreshing to finally run into some more cryptocurrency-obsessed nerds like myself–at that point, I was in heavy withdrawal.  We were also eventually joined by Jim Lowry of Storj, and many others.

One of the problems was that since we took the camp over last minute, our Decentralization talks weren’t in the Burning Man Program. However there were still a few Camp Bitcoin events scheduled in the program, so for our third talk we had over 50 people in our Dome. This was quite encouraging to see; we proudly raised our Dogecoin flag and gave them the lowdown on Decentralized tech and trustless systems.

 

Halfway through our trip, we met with Manu, an architecture technologist from Indonesia who came to Burning Man seeking more crypto-minded friends. Manu is currently working on architecture for a reputation system revolving around a concept called “proof of human.” We quickly bonded and spent many days in the Full Circle Tea House conversing about philosophy and Decentralization. When we heard that EFF founder John Gilmore, co-creator of the bootstrap protocol, was literally in a camper behind the tea house, we politely intruded.

John was kind enough to give an hour of his time to let us blabber on about Decentralization; we mentioned Maidsafe, Ethereum, DAOs and incentivized mesh networks. He seemed extremely skeptical at first (I’m guessing he’s read a lot of flopped whitepapers in his time), but thanked us for shaking him up a bit about the subject.

Throughout the whole week, Gary and I patrolled Black Rock City, making sure the Doge’s presence was felt in every quadrant, for one must first see the Doge before one can be the Doge. It was an honour and moral imperative to get the shibe out there.

 

 

Two Decentralists that eventually made it to camp were Dlight Sky and Paul Hughes. Both are experienced Burners and proponents of Decentralization; in fact, they created the facebook page Radical Decentralization. Dlight is working on a protocol that he says would fix the problems of Bitcoin; the project is aptly named “Kryptonite”.

Having finished another Radical Decentralization talk in the dome with our two new friends, Paul Hughes and I went on an all-night adventure exploring our possible future. Paul has been advocating Decentralization for over 20 years, long before Bitcoin existed.  He told me that his new thing was Radical Abundance. This is the idea that with technological innovation, we can create a society which is devoid of artificial scarcity in all forms: resources, food, tools, shelter, and much more.

He told me that we can’t have Radical Abundance without Radical Decentralization–one shouldn’t be without the other.  After a night of thoroughly blowing my mind, we watched the sunrise and parted ways.  I highly recommend anyone who is into Decentralization, please, go and check out his writings.  Not to mention Gary Lachance’s writings on Decentralization.

I can say that by the end of the week I was eventually acculturated into Burner society. In fact, I felt like a Burner. All of the strangeness, all of the absurdity was now normal, and leaving this world for the default world would be even stranger.

And it is.  I can tell you writing here in my campervan, modern life is strange and absurd. People on automatic, starting and then stopping, droning into malls, barely keeping their heads up. Working 9-5’s, enslaved to bills and debts. Drifting along, following the somber steering of the man we had so vehemently and symbolically burned only a week prior.

In hindsight, I can see exactly where Papa Bear was coming from. The descent into commodification is a signpost that a sub-culture is beginning to lose its grip to the immense and vacuous blackhole of the machine–it destroys it. But now that we have distributed consensus, I firmly believe that Crypto and The Doge have their own gravity that is potentially stronger than the machine, and we will suck it in. And just as Burning Man has created its own vortex of love, respect, and otherworldliness, we can all aid and add to its power.

Please do not take this article as anywhere near a complete experience of Burning Man. In fact I encourage anyone who is even slightly interested to go for themselves because you really have to go there to fully “get it.”

Next year we will be organizing a “Radical Decentralization” camp. All those interested in helping or participating please contact me @Amble_Greene or @GaryLachance. We’re hoping to make this a pivotal event for Decentralization and Open Source, an experience that people can take home and share with their worlds.

Coinarch is pleased to announce the launch of its latest product, the Maximiser. The Coinarch Maximiser is a bitcoin-linked investment which allows users to earn high rates of interest in a flat or upward trending market, bringing a new dimension to the world of bitcoin investing.

“We are really excited to have the Coinarch Maximiser up and running,” said Coinarch CEO Jeremy Glaros. “Including the Maximiser in our suite of products means our customers can now generate attractive bitcoin-linked returns even in sideways markets, something which up to now has not been available in the bitcoin space. Given the relative stability of the bitcoin price from mid-June through to early August, we think the Maximiser will be attractive to a number of our users.”

By investing in a Coinarch Maximiser, users either earn up to 50% p.a. interest or buy bitcoins at a discount to the bitcoin price at the time of investment. This product is recommended for those who:

1. Believe the bitcoin price will remain stable in the short term
2. Would like to earn interest now so they have more to invest in the future
3. Would like to buy bitcoins should the price fall

According to Mark Hergott, Co-Founder of Coinarch, “Investing in a Maximiser is simple. All users need to do is choose how much they want to invest, how long they want to invest for and the price they are prepared to buy bitcoins which we call the strike.”

When the Coinarch Maximiser reaches maturity, one of two things happen: if the bitcoin price finishes above the strike, the investor receives the Maximiser cash settlement amount and earns a high rate of interest; if it finishes at or below the strike, the investor receives the bitcoin settlement amount which is like using the cash settlement amount to buy bitcoins at the strike. In this way, investors either receive a high interest rate on their Maximiser position or purchase bitcoins at a discount to the initial market price.

“The Maximiser product is a commonly used investment tool in equity, FX and commodities markets to allow investors to generate profits even in sideways or upward trending markets, but until now has not been available to bitcoin investors,” said Coinarch Co-Founder Mark Hergott. “When you combine the Maximiser with our Long and Short Booster products, we now have solutions for our users which suit all market conditions.”

The Coinarch Maximiser is available for investment terms of 14, 30 or 60 days and with strikes ranging from 85% to 98% of the bitcoin price at the time of investment, with the level of interest earned dependent on the term and strike chosen. Investors are able to unwind their Coinarch Maximiser position at any time through their Coinarch account.

About Coinarch

Coinarch was co-founded in late 2013 by Mark Hergott and Justin Tang. The management team was formed with the appointment of Jeremy Glaros as CEO, Gary Weng as COO and David Winder as CTO earlier this year. Jeremy and Mark have extensive experience in the world of finance, with Mark having managed the exotic derivatives book of an investment bank out of Hong Kong and Jeremy having managed the financial products structuring business for an investment bank in Asia. Justin, Gary and David have extensive development backgrounds, with Justin having extensive experience in high end web development, Gary having moved into web development after earning his PhD at Sydney University and David being an industry expert in systems architecture.

The products currently offered on the Coinarch platform allow users to profit in rising, falling or sideways markets. Coinarch plans to introduce a number of additional products not currently available for bitcoin in the following months.

 

For further information or to obtain a copy of our Media Kit, please contact:

Mark Hergott

Co-Founder

[email protected]

+61 452 428 489

 

The continent of Africa, in particularly Ghana, is set to open doors of opportunity to a land perceived as hopeless in the eyes of many.

The internet has provided decentralized information that allows some of these marginalized populations to educate themselves, and the development of the blockchain represents decentralized wealth controllable by the people.

Africa will be getting Dreamcoins.

Dreamcoin is a community cryptocurrency being designed for merchants and consumers in sub-Saharan Africa.

DreamCoin creator Phillip Agyei Asare explains it:

“Dreamcoin is a purely African initiative, unlike Kipochi which was backed by Danes, and BitPesa that is backed by Americans and Britons. Dreamcoin partners are in Ghana, my home country, as well as members from Botswana, Uganda, and most recently Sierra Leone. This is a powerful and meaningful achievement, given that Dreamcoin, therefore—even in its early stages—represents broader ethnic and linguistic diversity within its core Dreamcoin community, than that of Western Europe or the Americas.”

Dreamcoin is backed by the commitments from participating merchants to accept Dreamcoins at an assigned fixed value, such as 1 US Dollar, 1 Euro, etc.  The assigned value will be a function of initially expressed and identified interests.

DreamCoin is an implementation of non-profit organization Conscious Entrepreneurship Foundation (CEF)’s Coins For Causes initiative.

Charles Evans, founder of the CEF, explains the idea for Dreamcoins:

“The idea is to use something like Counterparty to issue vouchers that can be redeemed for, e.g., $1 worth of goods and services from participating merchants. A supporter could raise an endowment fund and stand ready to buy the vouchers, in order to put a floor under their value. For example, if you knew that someone would buy the things from you at $1 each, you might be more inclined to hold them, and you more or less would be able to predict their value in the near future. DreamCoin is slightly different in that the initial supporters do not have thousands of dollars in cash sitting around, but each member of the core group of supporters is willing to give away some goods and services in exchange for the vouchers, in the hope that this will make them attractive to prospective users and enable them to bootstrap a market in them.”

The Dreamcoin operation started out relatively small, and if the initial experiment succeeds, then it could be enough to prime the pump.

Philip Nana Asare has been busy developing a non-profit organization called The Dream-Bitcoin Foundation (DBF), which was officially registered in Ghana on September 9, 2014.

“The Dream-Bitcoin Foundation will help empower and unite the youth in Ghana, and Africa in general, to successfully enter entrepreneurship through acquiring an education in Bitcoin and the Blockchain and cryptocurrencies and creating their adoption throughout the country. Together with partners from other African nations, the adoption of Bitcoin will be made easier via SMS.”

Philip is also working on a website that will offer Bitcoin payment processing that will be used in selling African products online to the international market.

“Africa will become a pioneer in the adoption of cryptocurrencies, and benefit accordingly in this new, emerging economy,” says Philip.

Philip is a graduate of Central University College in Ghana, where he studied Bsc. Administration (HRM).   He is the Founder and CEO of Pak Universal Services, which offers quality service including bulk messaging solutions; Internet/information, marketing consultancy and training; domain registration and hosting; fashion and design, web design; and general printing.

“PAKSMSGH is an arm of Pak Universal Services and is one of the leading Short Message Service (SMS) gateway providers in Africa, and is No.1 in Ghana for customized bulk SMS text messaging, delivering to over 600 networks in over 200 countries all around the world. PAKSMSGH is a web-based mobile communication platform that allows you to send text messages from your computer or internet-enabled devices, to literally thousands of mobile phones at once. PAKSMSGH offers you the least expensive and yet most effective SMS solutions, and is known for delivering quality service,” says Philip.

Philip and his partners are working closely with different members of the Bitcoin community and inviting willing participants to come to his land to explore the great potential that is Africa.

Dream-Bitcoin Foundation is currently raising funds in bitcoin [see bottom of article] for projects that will enable young entrepreneurs in Africa to establish their various bitcoin businesses online, in effect giving them access to a new international market.

Dreamcoin is currently working closely with individuals in the West/North, including Dr. Charles Evans of the Conscious Entrepreneurship Foundation in South Florida; Song E. Lee and Johann Barbie of 37Coins in Sunnyvale, California; Bitcoin Bear in Rescue, California; Tim Tayshun of http://www.ezcoinaccess.com/; and Rob Agnew of Coinapult in Panama. They are interested in working with any other interested cryptocurrency organizations.

“One problem with Bitcoin is its short-run volatility,” says Charles Evans. “The hope is that DreamCoin will be useless as a speculative game, because of its stable value, and useful as a cash-like asset for small-scale entrepreneurs in the Emerging Middle-Income Countries (EMICs).”

Cryptocurrency is proving to be a stronger binding tie among nations of the world than legacy colonial borders.

Ghana Dream Bitcoin Foundation is proud to present the first Regional Bitcoin Seminar at the Kumasi Polythenic.  Join DBF from the 5th of December until the 7th of December. The event will include inspiring lectures, insightful knowledge and endless networking with students and young professionals in Ghana.

“Information will be disseminated about Bitcoin and other Cryptocurrencies,” says Phillip. “This event will feature tremendous speakers and panels on the ideas behind a free society and the actions necessary to implement them. In addition, free meals and drinks and an evening social event will be included for your FREE registration. Don’t miss out on your chance to be a part of this great event.”

The use of Cryptocurrency technology can cause an evolution in human relations. Since tribal ties in Rwanda and Kenya are so much stronger than national ties, most interactions between the two often end in violence. When two groups are enabled to work more closely with each other by utilizing a stable method of exchange, the prospect of prosperity for both parties will encourage further cooperation.

“This will allow us to work with neighbors whose doors are literally within walking distance of our own, and with brothers and sisters who are foreign to Africa.”concludes Philip. “This will, in turn, enable Ghana, and then Africa in general, to fulfill her dreams and potential in the global community.”

Ultimately, blockchain technology will help in bringing wealth to a land plagued by poverty.  A decentralized system like bitcoin will spur interconnected hubs of prosperity that function beyond national boundaries.

 

Visit the new Foundation website here.

 

1CPGByjASvkLN7mLZP9cz4nRaaUXHsEXtp

Donate to this cause in BTC by using the address or QR  above.

Coin.mx is the first bitcoin exchange to accept credit cards to make an initial deposit to fund a customer’s account. We offer mobile trading, API trading, and peer to peer fund transfers internationally. Coin.mx is AML, KYC, and PCI compliant. Our members and merchants are able to cash out via ACH or a wire transfer.  We also offer the widest range of deposit methods including cash and credit cards.

We offer the first easy pay widget which allows merchants to generate payment urls for their customers. Their customers will instantly be able to purchase coins from coin.mx and the digital coins will be sent directly to the merchant. The following is a sample of our merchant payment system: https://coin.mx/merchant/generate_url  

We offer $15 for every friend that you refer and makes a deposit. In the near future, Coin.mx will be offering more trading pairs in other cryptocurrencies.

What Coin.mx Offers:

• Over 30,000 active members
• 0.1% trading fees for API users.
• Deposits by Cash, ACH, Credit Card & Wire.
• We accept Members internationally.
• We offer 4 different pairs and will be adding to this monthly.
• Our API can be found here – https://coin.mx/coinmx_api_en.pdf
• Our Easy Pay Widget that does not require an account can be found here-  https://coin.mx/merchant/generate_url
• Earn $15 per friend referred with our referral/ affiliate program which can be found here – http://affiliates.coin.mx/

For inquiries, please contact, Mark Chung, Director of Business Development

855-712-6466 Tel

[email protected]

www.coin.mx

2940 E Park Ave

Tallahassee, FL 32301

 

 

Written by: David Mondrus

“For better or worse, till death do us part, because the blockchain is forever – Joyce and David, 10/5/14”

I met Joyce in the Philippines in the spring of 2007. We were introduced by a mutual friend, and we both immediately decided that there was NO way we could ever get along. She came dressed in baggy pajama pants and a sweatshirt, with a hat pulled low over her eyes. My immediate reaction wasn’t positive. Joyce also wasn’t thrilled with what she saw. I frowned constantly. Who would want to be with such a grumpy man?

But our friends persisted and the next day convinced us to go snorkeling. On our return trip Joyce sat next to me and asked me if I wanted some pineapple. I declined. She ignored me and held a pineapple piece to my lips. How could I refuse such an invitation? And so she fed me and then herself, me and then herself as I incredulously wondered, “What woman in NYC would do this?” That was the beginning of my life with Joyce.

In 2008 I moved to the Philippines to be near her and to work at Bigfoot.com, my alma matter and one of the first email providers transformed into a Film and Fashion power house by Michael Gleissner. When in 2010 he asked me to buy OneModelPlace and to run it in the States, I knew I couldn’t do it without bringing her. And that of course meant PAPERWORK. Measured in INCHES.

We of course persevered, and in January of 2010 we landed in the US. The first thing we had to do was get married very quickly in order for Joyce to be able to stay. So off to the courthouse we went, and more inches of paperwork we completed. And unfortunately because Joyce’s parents are on the other side of the planet in the Philippines, they didn’t get to see their only daughter get married.

Think about how crazy this is. Two people who love each other must spend thousands of dollars, months or even years of time and inches of paper to TWO governments for the privilege of moving across imaginary lines. And that’s the best case scenario. If we described it to an outside observer in that way, I’m sure they’d think we’re crazy. Not only that, but the marriage is only legal in the country you file. So when we got married in the US, the government of the Philippines had no idea about it. It was only after we had travelled to the embassy, filled out MORE paperwork and waited that it was OFFICIALLY recognized over there. Let me tell you, it was painful.

Now imagine a world without borders, without paperwork, without governments. A world where you can commit to each other without needing permission, and in a way where it’s visible to everyone always. That is the promise of the blockchain. The Bitcoin protocol not only allows us to send money frictionlessly across the world without banks being involved, but it also allows us to commit to each other in a public, transparent way, and in a way that it will be enshrined forever. As long as there is bitcoin our commitment will be visible.

This is the promise of Bitnation, the first “Virtual” nation. Now you also can “register” your marriage as well. But unlike governmental systems Bitnation allows you the flexibility to define and design your marriage any way you want. Prenups, postnups, child care contracts, even multi-party marriages can all be designed the way YOU want using the legal code that suits you best. THAT is freedom.

 

When it comes to creating jobs, don’t mess with Texas. The state has had stronger job growth over the last 13 years than any of the other 49 states, and even though the state will soon have a new governor, Texas will continue to be poised as a leader in job growth, while other states stifle innovation with regulation.

Here’s why:
Texas has embraced companies with a clear regulatory environment and that is not just for big oil. Texas is home to a large aerospace industry and a booming technology sector that could take bitcoin to the moon. You may think California is the bitcoin capital of the world and it is in terms of investment and innovation, but bitcoin companies are considering moving from Silicon Valley to the Silicon Prairie and Silicon Hills for the lower costs of doing business and tax incentives. Texas is ranked 11th on the State Business Tax Climate Index for 2014, while California is 48th and New York is dead last.

Dustin Trammell, Bitcoin Venture Capitalist and entrepreneur, says that “Given the contradictory guidance regarding Bitcoin regulation that’s been provided by U.S. Federal agencies, and no desire by the Fed to settle the differences, how to handle Bitcoin is being worked out by some states.”

This is where the opportunity lies. While some states have said that virtual currency regulation already falls within the scope of existing regulations, others have suggested the need for new virtual currency specific regulations such as New York Department of Financial Services’ (DFS) BitLicense.

Many prominent figures and businesses in the Bitcoin community have already come out against Ben Lawsky, the unelected superintendent of New York’s Department of Financial Services, for his proposed BitLicense. These industry leaders and companies include Circle CEO Jeremy Allaire, Xapo CEO Wences Casares, Coinbase and Max Keiser, among more.

While New York seems to be pushing away bitcoin business, others states, like Texas, are seeing this as an opportunity to bring more jobs to their state.

Government:
Texas offers $19 billion in tax incentives to businesses, the highest of any state, and has low taxes. Last year, Texas recorded a 5.5 billion dollar budget surplus.

Greg Abbott, Texas’ Republican Gubernatorial Candidate, who is positioned to be the next governor, is accepting bitcoins for his campaign and will likely be one of the first governors to win an election accepting bitcoin.

“I made the decision to accept Bitcoin because I believe that it represents the free-market economic principles that make Texas a national leader in innovation and entrepreneurship. As Governor, I will keep taxes low, government small and reduce regulations so Texas’ booming technology sector will continue to flourish,” said Abbott.

Abbott is leading in the polls by a 12.6 percent margin, a sizable lead considering there is only one debate left on September 30. Abbott has served Texas as Attorney General since 2002 and knows the potential bitcoin can bring to his state.

Texas has a strong technology friendly history. Jack Kilby invented the integrated circuit while working at Texas Instruments in Dallas in 1958. Texas played a large part in the dot com era, and it hosts large technology companies like Dell and Texas Instruments. Texas can also support these businesses with a highly skilled workforce with the roughly 578,000 students enrolled in Texas’s 36 largest universities. These veterans from the dot com era along with a growing educated workforce will play a major role in Texas’s Bitcoin future.

US Representative Steve Stockman (TX-36) is also a public supporter of bitcoin. Rep. Stockman was the first Member of Congress to introduce a piece of Bitcoin legislation back in May 2014. The Virtual Currency Tax Reform Act aimed to treat virtual currencies as currency instead of property for federal tax purposes.

“It’s good to see Attorney General Abbott embrace virtual currencies like Bitcoin. It’s an emerging technology, and one that opens the doors for small businesses to sell globally.  Texans have always embraced innovation. We created the modern economy by giving birth to the petroleum revolution, we led the world into the space age and now Texans are at the cutting edge of economic evolution,” said Rep. Stockman.

Bitcoiners:
Regardless of political affiliations, most bitcoiners would like to see the advancement of Bitcoin technology and the values Bitcoin represents. The fact that many political figures are taking their stances on Bitcoin by accepting seems promising.

“As a Bitcoin enthusiast living in Texas, I am encouraged when our leaders and representatives support Bitcoin and encourage the development of technologies based on the blockchain. Keeping regulations reasonable will insure Texas will be at the center of developing this new technology,” according to Paul Snow, President of the Texas Bitcoin Association.

While accepting bitcoin for political contributions is a great first step, what the Bitcoin community really wants and needs is smart regulation that promotes the acceptance and use of digital currencies. After all, actions speak louder than words.

“If a politician wants to be serious about promoting and normalizing using Bitcoin, he or she will introduce legislation which allows me to pay for my property taxes and parking tickets with it. That would be much more beneficial to me, the citizen taxpayer, instead of merely benefiting a candidate’s campaign,” said Tod Beardsley, Engineering Manager at Rapid7, Dogecoin Shibe.

Being able to pay taxes in bitcoin would certainly be a game-changer, but is not anywhere on the US government’s agenda. However, the Isle of Man’s chief executive of economic development said that residents of the Isle could soon be able to do just that.

Texas vs. New York
One thing is for sure: New York’s proposed BitLicense companies will look at Texas’ regulatory environment and lower cost of living, and set up business because of the reduced barriers to entry.

“In some cases, the contrast between these various laboratories of economics are becoming quite stark, such as between economically conservative and even libertarian leaning states like Texas versus states like the New-York-nanny-staters and their proposed BitLicense,” said Dustin Trammell, Bitcoin Venture Capitalist & entrepreneur.

It’s quite ironic seeing the Start-Up NY commercials stating that “The new New York is open, open to innovation, open to ambition, open to bold ideas … We’re New York, if there’s something that creates more jobs and grows more businesses, we’re open to it.”

Where New York talks the talk, Texas walks the walk. From 2000 to 2013 Texas has had a well above average percent change in employment in every wage quartile.

 

Is More Regulation Needed?
Not all bitcoiners agree that Bitcoin regulation is fine as is. Many over the years have been hurt from the collapse of exchanges, mining manufacturers not delivering, and outright scams. However, many would argue that these problems would not exist if those businesses had proper consumer protections in place and followed better business practices, and if they were monitored to the same level of scrutiny as other institutions holding customer funds.

“Bitcoin itself is also almost wholly unregulated. There is an IRS ruling that treats Bitcoin like property, but people treat it like a commodity or like a currency, depending on the situation. Cryptocurrencies have features of all these things, but it is fundamentally a new, international, decentralized, techno-financial tool,” said Tod Beardsley, Engineering Manager at Rapid7, Dogecoin Shibe.

What may be more beneficial to the community than implementing new untested regulations is if the government would provide clarity on how bitcoin falls into these existing frameworks and enforce existing consumer protection laws.

Bitcoin Industry
There are a lot of applications bitcoin can be used for and Texas’s bitcoin community will surely take advantage of them. From financial services to solving problems associated with The Internet of Things, entrepreneurs are finding use cases for bitcoin wherever they can.

“Austin is home to quite a number of Bitcoin startups, and even one of the few established regional Bitcoin conferences, the Texas Bitcoin Conference held every March in Austin, Texas. We have the momentum here in Texas, and we want to build on that, not suppress it with counterproductive regulation,” according to Paul Snow.

One problem bitcoin can solve in Texas is to help the vast amount of the population that is unbanked. Texas is ranked fifth in the country for having the largest percentage of unbanked and underbanked residents: 11.7% of Texas’s population is unbanked and 24.1% is underbanked.

(Unbanked refers to having no checking or savings account and underbanked refers to a person who has a checking or savings account, but continues to rely on alternative financial services, like check-cashing services, payday loans, rent-to-own agreements or pawn shops.)

Bitcoin’s no-to-low cost of providing financial services can help aid this population. In addition, Bitcoin can help the large Hispanic-Latino community, which uses remittance services to send money back home to their families of which Mexico is the largest destination by volume.

Mexico received $22 billion in remittance payments in 2013, mostly from the US, making it the fourth largest destination of remittances in the world behind India, China and the Philippines. Texas has the second highest amount of Mexican-Americans in the US totaling over 7.9 million or about 31.6% of Texas’ population in 2010 growing from just over 5 million or 24.3% of the population in 2000.

Texas Will Lead The Way
In summation, Texas will continue to embrace its history in the technology sector and organically grow jobs. Entrepreneurs, young and old, in the state will help solve relevant issues the state has and innovate the industries they operate in with new services and products that utilize bitcoin. This will all happen with a supportive government that is in line with the majority of the state’s residents while some states worry about regulating the bitcoin industry to death to support their interests in the current system.

Whilst Hedqvist’s lawyers are finalizing the formal proceeding to the Court of Justice of the European Union received on the case is C-264/14, Belgium Tax Authority (Service Public Fédéral Finances) answered to Belgacoin (www.belgacoin.com) about VAT on bitcoin, litecoin and dogecoin with a ruling (GTVA20141533/TL/MP emitted on 05/09/2014).

The Tax Authority preliminary considered Bitcoin as a “virtual payment system”.

The Belgium VAT code exempts (Art. 44, § 3, 7°) the transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection and the Tax Authority retains that the virtual payment system fall under this exemption deeming “virtual payment system” equivalent to “receivables, securities and other effects.”

The ruling takes into consideration the discussion in the VAT Working Group of the VAT exemption of virtual payment system and states that the situation could evolve in different ways and with different interpretations but, however, any new interpretations will not be retroactive.

The actual situation is that Member States continue to rule on VAT on bitcoin, while waiting for Decision of European Court of Justice.

I can summarize the alternative reasons to sustain VAT exemption on bitcoin, starting from the assumption that the purpose in exempting financial services from VAT in Article 135.1(b)-(g) is to avoid the difficulties which occur when imposing VAT on financial services:

1. Legal tender is not compulsory for VAT exemption of currency, so bitcoin can be considered equivalent to money under VAT Directive.
2. Bitcoin can be considered as a system of payment so the transactions of bitcoin fall under the exemption concerning debt and other negotiable instruments.
3. Bitcoin can be considered as an “other security not representing good” under the VAT Directive as this concept does not refer to ‘security’ in relation to a financial security such as a share or a bond but it can refer to “a document (security) that does not represent goods”.

 

Earlier this year, Bojan Simic, the founder of the Bitcoin Security Project and Aegis Wallet, released a new, free, and open source bitcoin wallet.

He has recently implemented Android Wear support onto the wallet, it’s called Aegis Wallet Wear.

This is the first ever of its kind. Its features include a new watch face that shows you your current Aegis Wallet balance and the current price of bitcoin, and it also allows you to pull up a QR code from a watch for receiving bitcoin payments.

The watch app notifies you of transactions occurring on your Aegis Wallet. This pioneering idea is sure to catch on as smart watches and other wearable technology gain popularity.

“I came up with the idea for a wearable Bitcoin app when I saw the new Android watches coming out over the last month or so,” says Bojan. “I got tired of checking the bitcoin price and my wallet balance on my phone so I decided to add the wearable feature to Aegis Wallet.”

I asked Bojan about his thoughts on the future of wearable tech.

“I think wearables and the concept of the “Internet of Things” is going to be huge over the next few years. We are already seeing watches, bracelets, and even devices put inside humans! For example, there is a device that is the size of a grain of rice that fits under a diabetes patient’s skin that monitors their blood sugar levels 24/7. For Bitcoin in particular, I think that wearable devices are going to be used as a 2 factor method of authentication rather than an insecure password or PIN.“

I asked Bojan if there were any other interesting projects he was working on.

“I’m currently busy with HyprKey, a Bitcoin startup I co-founded with a great team here in NYC. Of course my passion always includes working on open source projects like Bitcoin and wallet technologies like Aegis Bitcoin Wallet so I make sure to find the time to participate in those as much as I can. Besides that I’m always trying to spread cyber security awareness with the Bitcoin Security Project throughout the development and Bitcoin communities. I think that as we become more connected with technologies such as wearables and mobile devices, our information will be more and more public and security will be more important than ever.”

Bojan has also recently added a new SMS feature to the Aegis Wallet.

“Now if you don’t know a person’s Bitcoin address,” says Bojan,  “you can just put in their mobile number and they will receive an SMS telling them to reply with their Bitcoin address. Once they reply, Aegis will take the address and ask you to confirm. The Aegis Wallet app does not read your SMS messages or send them to any place.”

“The Aegis Bitcoin Wallet and the Bitcoin Security Project are both open source and free forever,” concludes Bojan. “ I would like to invite developers and anyone else who would be interested in contributing to making these projects better to do so.”

 

In the previous article, Scottish Independence, we highlighted Scotland’s referendum for independence and a few notes about what it may mean.

On Thursday the 18th of September, 2014, the Scottish people voted No to independence, choosing to remain within the union of the United Kingdom. According to gov.uk the majority vote won with a count of 55.3% to 44.7%.

A significant factor about the voting turnout was the sheer number of people who did vote, 84.5% of the eligible voters. With the current dissolution with politics within the United Kingdom and globally, this was an astounding turnout.

Another point to note would be the ratios of the voters: as can be seen via the research thanks to the Mirror, the majority of Yes voters were younger people, from poorer areas.

We are highlighting this to show the interest in a decentralised political environment. Another 5 to 10 years and these factors and numbers may be even more pronounced if the current state of affairs (loss of jobs, cost of living rising) continues.

Decentralised Governance

Following the calls for independence in Scotland, even though it failed, the Northern Cities and the rest of Britain have watched with great interest. At the end of August the five northern cities, Leeds, Liverpool, Manchester, Newcastle upon Tyne and Sheffield publish One North, a report calling for investment into their transport infrastructure, to create jobs, inspire growth and help rebuild their economies.

The economy of Greater Manchester is larger than that of Wales,” says Leese. “The idea that we should have any less control over our own affairs is just not sustainable any more. ~ The Guardian.

The southwest of England has also been watching with keen interest; talk to anyone here (disclaimer: I am from the Southwest) and it is the rare person who thinks our UK politicians should continue to have as much power as they have and take as much as they do (disclaimer: I have not met one person in this locality who thinks like this; those that edge more along these lines of thoughts are the elderly who often intersperse their comments with mention that they do not want anything to change).

Unfortunately for those who wish for nothing to ever change, and for us to remain forever in the 1980’s (as sometimes it feels), change is inevitable – sometimes slower than it should be through enforced ignorance (dark ages), though eventually a revolutionary will always inspire climatic changes.

And following the Scottish referendum Wales has called for more powers to self govern, to finance their own matters more, improve jobs, and restore their own economy. Can it be said that even though the Scots failed, their attempt has shown a crack in the United Kingdom’s united front, and that in fact various powers around this nation are seeing a light at the end of the tunnel?

Wales needs its own say on taxation, policing, rail franchising, large energy projects and much more. Any further dithering on these powers will cost Wales dearly. ~ The Daily Post.

It does cross my thoughts whether Wales and the Northern Cities would also be threatened with the taking away of the pound and the various other threats of financial stability that plagued the Yes camp from the Better Together campaign.

And should we dare to even bring up Northern Ireland which has had the IRA fighting against English dominance for as long as I can remember, though sadly, in a much more violent fashion than the recent Scottish referendum.

The interest in devolution from the Northern Ireland Assembly will surely soon be heard by those in Westminster. And it is doubtful that Northern Ireland would be fazed by the financial threats and arguments from a Better Together campaign as Ireland already uses the Euro (and previously used the Irish Pound).

What Happens Next

Ed Miliband (leader of Labour, the UK version of the US Democrats) has already promised the minimum wage in the UK to rise to £8 in 2020 (it is currently £6.31). Though of course this would mean that public would have to vote Labour into power in the next general election (2015) and the 2019 general election.

And with 6 years away and the rate of inflation (thank you QE), it is debatable whether £8 in 2020 will buy you even less for your money than £6.31 today.

Whilst David Cameron already is in disputes about promises of continued funding to Scotland and greater powers, his own Tory MP’s already declaring that they would oppose any such moves.

The pledge has met with a furious response from Tory MPs including the rail minister, Claire Perry, who said Scotland should not be given “financial party bags” paid for by English taxpayers. ~ The Telegraph.

And that straight after the No vote, Cameron has been stating that Scottish MP’s would have no say in English matters, thereby conveniently eliminating 40 Labour MP’s from opposing the Conservatives, and thereby eliminating the Labour majority over the Conservatives (Conservatives carry a combined majority with the Liberal Democrats, but a pure Conservative vote can be opposed by the majority of Labour MP’s).

A Future Application of Blockchain Technology

In 2010 the Liberal Democrats Leader (Nick Clegg), with Decentralisation Minister Greg Clark, set out plans for a decentralised Britain.

One of the potential promises of Blockchain technology is its use as a political tool for voting, by giving more access to voters to each raised issue, rather than these issues being centralised and therefore not truly reflective for each area of state. And these votes could very likely be fully transparent and accountable via the method’s own Blockchain, visible for all.

This Bill marks the beginning of a power shift away from central government to the people, families and communities of Britain. ~ Nick Clegg.

Could a decentralised United Kingdom manage its various areas more conveniently and fairly with a virtual democratic voting process that was more inclusive than anything before? Potentially.

Scotland has opened the cracks in the power of control in Westminster; whether anything will come from this, we have yet to see.

In case you missed last week’s exciting panel discussion held at prestigious Premier Studios in New York, look no further. Bitcoin Magazine had the camera rolling and caught the whole thing. Our very own Tatiana Moroz was featured on the panel and was able to interview several other panel members at the event.

Panelists consisted of the face of Tatianacoin, Tatiana Moroz; music industry icon Phil Quartararo; CFO and Co-Founder of Ribbit.me Gregory Simon; and was moderated by Rik Willard of MintCombine.

With the help of BitPay, Premier Studios has become the first recording studio in the world to accept bitcoin, on a mission toward revolutionizing the music industry. Exploring the possibilities of how digital currency will change the ways people pay for music, how artists are rewarded and how digital currencies can be used to change an environment that has had little innovation in the past decade.

The times are changing.

Check out the exclusive videos below:

http://www.premierstudiosny.com/

This is just a glimpse of what bitcoin and the blockchain can make possible within the music industry. What’s next music lovers?

Some people say money is the root of all evil. Others say its a necessary evil. Most can agree that it’s an important human innovation.

But it hasn’t been widely acknowledged that the human desire for money can actually be used to peer into the future.

A Prediction Market (PM) is a place where people can bet on the outcome of an event. If they guess correctly, they win money. If they guess incorrectly, they lose money.

People care about their money, so the market price of an event gives us a good answer to the question “Will this outcome happen or not?”

It’s not magic. It’s the economics version of the “wisdom of the crowd”.

Intrade became the first provider of this form of market online. It was closed down last year.

Paul Sztorc has begun to develop Truthcoin, a prediction market based on the blockchain.

Part 1 of Paul’s 5 part introduction to prediction markets highlights some of the problems of traditional Prediction Markets:

“There are several problems with PM’s: mainly the fact that when persuading others of something complex, [people tend] to highlight true statements when they support their own argument, and hide them away when they support an alternative argument.

[Also], If you make a bet with someone, you have to trust them to pay up. Tradable-Predictions, defined as “assets with a definite future value based solely on their future accuracy” have never existed. Instead, the value of PM-Predictions depended substantially on the behavior of the counterparty (ie, the guy holding the money). You can’t “own” a prediction, only a paper claim to money held by the PM administrator. The PM administrator has proven to be unambitious at best (accepting only a few bet-topics) and unreliable at worst (losing funds and/or going out of business, see Appendix). PM-admins rely on trust (as they hold their customer’s money) yet are prevented from accessing trust-forming institutions (law-enforcement, brands/advertising) because of their regulatory/legal/awareness challenges.”

He goes on to say:

“Bitcoin operates independently of a nation’s legal framework, and might avoid closure or regulatory interference. If so, competing “Bitcoin InTrades” would appear to fulfill market demand. Unfortunately, PMs require a way to store up money and pay it out based on a real world outcome, which implies trusting a third-party with your money. Use of supra-national Bitcoin would prevent the use of any legal guarantee (to justify this trust).”

Bitcoin demonstrates that a blockchain can provide scalable, censorship-resistant, and trustless solutions to value-transfer problems. Blockchain solutions also generate efficiency by cutting out middlemen and avoiding overhead costs (no brick-and-mortar, compliance, administration, etc.). They are egalitarian and immortal. “

Paul expanded on these ideas and told me a little more about himself by answering these questions I had for him.

What is Truthcoin?

A marketplace for the creation and trading of ‘event derivatives’, which have a final value based only on the-state-of-the-world (such as election results or stock prices) and nothing else.

Truthcoin’s markets might resemble “smart contracts”, where the focus is not on “performing the math calculation of the contract”, but instead on “getting accurate reports from people”. Where a user would ask Ethereum to solve an equation using some algorithm, a user might ask Truthcoin to honestly-uncover “what was the solution to that equation” from users. Although users would be free to lie about what that solution was, an incentive mechanism discourages this. The emphasis is on “the solution itself”, not on “the process of solving”.

How was it formed?

InTrade.com was possibly my favorite website on the internet, but, tragically, it was forced to close for a variety of reasons. I felt that the closure of InTrade resembled the closure of Liberty Dollar and e-gold. Just as the latter inspired Bitcoin, the former inspired me to try to do something similar for Prediction Markets. I thought about it for a while, and wrote down some code and a whitepaper at the beginning of this year.

What is your professional background?

I double-majored in Economics and Psychology (undergrad) and then dual-degreed (graduate) in Operations and Finance at CWRU. I’ve worked at Interactive Brokers and GE/NBC in technical/programming roles, worked on Six Sigma operations consulting, and Healthcare IT consulting. I currently work as a ‘Statistician’ or ‘Visiting Scholar’ doing grant-supported research (unrelated to Truthcoin) at the Yale Department of Economics.

What are you currently busy with?

Currently, a few people want to raise money for Truthcoin, or work as volunteers. Figuring out who is a good fit, exactly what I can reasonably promise to investors, what I should do with people who have already put in work, who I can trust to do a good job, and how to reward all of those people, are questions that consume my time. I also have a communication problem where most people (despite the whitepaper and code) don’t “get” the project. Right now I would like to make more demos, slides, infographics or videos.

What is your vision for Truthcoin?

The short term dream would be that people who know C++ Bitcoin very well would find Truthcoin, decide how to combine the pieces (the existing Bitcoin code + the new parts which I’ve coded), and help me release and maintain a version for discussion.

The medium term dream would be widespread discussion of the costs and benefits of the core idea. Can the risks be mitigated (with sidechains/treechains, some kind of firewall, a multi-round test process)? Are the benefits substantial? Ideally, this would lead to the question: do enough people feel that it is sufficiently-valuable to actually switch from Bitcoin to this (or transform Bitcoin into this)? Currently, few have discovered Truthcoin at all, so such an ambitious question can’t even be asked.

The long term dream is nothing short of a second Scientific Revolution restoring the virtue of empiricism to the public discourse. A world with optimally-accurate forecasts (“Will X be a problem in the future?”), optimal advice (“Which of X would produce more Y?”), stable-value cryptoassets (“BitUSD”), a world where CEOs and politicians have to work competitively for a living, where organizations of all kinds are unable to lie to the public, where smart contracts are widely available, where Public Goods can be financed quickly and at low cost, and where anyone with an internet connection has access to the combined intellectual powers of all mankind.

 

Check out these Truthcoin resources below.

Forum: forum.truthcoin.info

Documents / FAQ: https://github.com/psztorc/Truthcoin/tree/master/docs

Outcome-Resolution Demo: http://forum.truthcoin.info/index.php/topic,134.0.html

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

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

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

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

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

Featured speakers include:

• Patrick Byrne, CEO, Overstock.com
• Bobby Lee, CEO, BTC China & Board Member, Bitcoin Foundation
• Daniel Larimer, Founder, Bitshares.org
• Perianne Boring, Founder & President, Chamber of Digital Commerce

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

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

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

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

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

What’s it all mean?

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

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

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

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

Only the beginning

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

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

 

Recently, I was introduced to a new social network for the Bitcoin community called ZapChain. Started by Matt Schlicht, ZapChain is a community platform where the bitcoin obsessed can congregate to answer questions and discuss ideas for bitcoiners and non-bitcoiners alike. The Bitcoin Magazine team put forward a question and to our very pleasant surprise, we received 44 answers, proving that the ZapChain community is energetic, responsive and engaged.

Our question was:

“What is the biggest advancement bitcoin has experienced in the last 6 months? How does this event change the future of bitcoin?” Keep in mind we kept bitcoin lower-case, signifying that the question is about advancements to the currency, and not to the distributed consensus ledger or payment system.

Questions are ranked in terms of favorites, which people within the platform can vote on. The most popular answer, that has received the most amounts of votes, is shown at the top. Sankalp Kulshreshtha’s answer garnered the most votes and said that a big advancement to bitcoin was”‘a bit misguided”, but that Bitcoin is incremental, getting better “slowly over time.” Funny, I was pretty excited about the Braintree integration and the announcement of Apple Pay, since that will get people used to using their phones to transact value.

Derek Minter, the founder of new Bitcoin jobsite HoneyBadgr, sees Tim Draper’s “sweep of the Silk Road Bitcoin auction” as the most notable event bitcoin has experienced in the past 6 months. He says it was essentially a “statement from the government that Bitcoin was ‘legal’ and reaffirmed the growing interest of VC[‘s]…in the space.” Tim Draper’s entry into the bitcoin space is indeed an exciting event, and his son’s accelerator program called Boost VC also deserves mention.

Ben Parr, Managing Partner at @DominateFund’s answer came in next, and he agreed with my thoughts that “PayPal’s decision to integrate Bitcoin into Braintree” was the biggest advancement to the currency in the last 6 months. He continued, “PayPal is the biggest name in online payments, and Braintree is used by a TON of online retailers.” Parr sees the integration as beneficial as it “[makes] it easier for…retailers to accept Bitcoin”, thus increasing the size of the Bitcoin ecosystem.

Matt Schlicht, founder of ZapChain, also threw in his .02c (in bitcoin) and agreed with Minter on the increased VC interest, stating “the Bitcoin industry has experienced a huge influx of venture capital over the the 6 months.” He continues to say that “over $260 million of venture capital has been invested in Bitcoin companies, over 50% of that happening in 2014 alone.”

Some others see technical advances, like multisig, as one of the biggest events.  Leigh Phillips says “multisig ushers in yet another flood of applications addressing trust in the bitcoin ecosystem.”

Others commented on the increased number of merchants accepting the currency, the number of users on LocalBitcoins, and the number of events happening in and around bitcoin as notable events.

One thing is clear – if we at Bitcoin Magazine had asked this question on Reddit, there would be a ton more swearing and ad hominem attacks than we experienced on the ZapChain community platform (which is a win). ZapChain appears to be a legitimate way to congregate digitally and discuss bitcoin with key influencers. It is proving to be a great tool for journalists and contributors alike to access great minds within the sphere and tap into a key knowledge base. Engaging with people on the ZapChain network will enable everyone to gain clarity, seek knowledge, and hear answers directly from those who understand the technology the best. If you haven’t checked out ZapChain yet, do so now and let us know what you think!

 

 

LAKE BUENA VISTA, FL, SEPTEMBER 22 – The value of Bitcoin is about to become life changing for one couple, who will use Bitcoin technology to register their marriage on the blockchain, as one of the governance services provided by Bitnation.

This hi-tech wedding is the first of its kind, and will take place at the Disney World Coins in the Kingdom Bitcoin Conference on October 4th and 5th at The Wyndham Lake Buena Vista on The Walt Disney World Resort.

David Mondrus is a serial entrepreneur, CEO of RedboxJewels.com, and advisor at Bitnation, who met Joyce Bayo while he was researching new business opportunities in the Philippines. She stole his heart when she fed him pineapple on a boat. He stole a kiss from her the following night and she has been trying to get it back ever since.

“We believe that like the blockchain, our love and marriage are forever and that our relationship is not defined by governments or the church.  So enshrining our commitment to each other in the blockchain in front of our friends is very dear to us.” said David Mondrus, the groom.

The blockchain is a cryptographically secure public ledger distributed amongst all of its users, which records all transactions on the the Bitcoin Network.  When one address signs a transaction it is broadcasted to the network and recorded forever.  The blockchain cannot be changed or edited unless there is a consensus within the community of people from all over the world who help maintain the ledger and at this point that numbers above 7000+.  The blockchain allows people to be able to always go back and verify when a transaction has a occurred, where it was sent from, and the address which received the transaction.

One way of utilizing this public ledger technology is to embed messages or contracts inside of a transaction.  These contracts or messages can be seen by anybody looking at the blockchain as long as it exists.  Pondering what type of records one usually documents publically, a variety of uses come to mind such as marriages, titles, notarized documents, shareholder agreements, and even votes.  Once embedded within the blockchain, it is easy to determine who owns what utilizing a tool called a block explorer and all without the necessity of a central physical location to store the documents.  In effect the blockchain is a record of all of our actions and achievements stamped permanently in time. The blockchain is a transparent time capsule for all to see.

The wedding will take place at 10:30am Sunday October 5th during the Bitnation panel at the conference, and will be entered onto the blockchain via the exclusive technology found on a CoinOutlet Kiosk. These kiosks are Bitcoin ‘ATMs’, soon to be installed across the US for easy public access to buying and selling bitcoin – and CoinOutlet is delighted to be the provider of services for the first ‘Blockchain Marriage.’

Blockchain marriages are ideal for couples who want to record their commitment to each other in a secure and permanent place, but whose relationship may not fit the current governmental system, or any governmental system at all. Some examples might be gay couples or polyamorous groups whose idea of marriage may not so easily conform to the current rules set by governments. Officiating this first Bitmarriage will be Jeffrey Tucker; author/publisher, and the founder of Liberty.me.

Bitnation governance 2.0 is a borderless, decentralized and voluntary type of blockchain-based governance service provider. The Bitnation platform is set-up to host an ID system based on reputation, a dispute resolution system, and places to store all your blockchain based contracts, such as land deeds, wills, childcare contracts, marriage contracts, corporate incorporations, and more. The ecosystem of secure identities, multiple contracts, and asset management makes it ideal for marriage – because it means a couple can tie their wedding contract to a shared savings account – a Bitcoin wallet – to a childcare contract, a land deed, or other relevant thing for a secure future together.

Additional Links:

• Bitnation: www.bitnation.co
• Coins in the Kingdom, and a livestream of the wedding:www.coinsinthekingdom.com

 

For all media enquiries: Nathan Wosnack (CCO) – [email protected]

 

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

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

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

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

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

How do we solve this problem?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

About Kryptokit

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

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

 

 

Here’s Part 1: The Value Foundations of Bitcoin

While gritting teeth and shaking hands with Bitcoin is necessary, Austrian economists should flash a toothy smile and embrace it warmly. Bitcoin is, after all, Rothbardian money. I say this because Bitcoin digitally manifests the optimal attributes given to money by Austrian School economist Murray Rothbard. Because of the distributed nature of its protocol, Bitcoin is, in fact, superior to its alternatives: fiat money and a return to precious metals. The comparative advantages Bitcoin provides are staggering and therefore those who champion higher standards of living, radical liberty, and privacy should champion Bitcoin.

There have been a number of attempts at digital currency in the past. Why is Bitcoin any different?

1. Bitcoin is resistant to fractional-reserve banking.

Bitcoin is accessible at all times by regular people in regular circumstances. No longer is there any need to trust centralized third parties to safeguard one’s money. With fiat money and precious metals, transporting, safeguarding, and using large amounts is difficult; third parties like banks and financial institutions are required through the use of warehouse receipts and digital representations. With Bitcoin, all money is digital – and so carrying the value of a million dollars in your pocket is just as easy and safe as carrying the value of one dollar. This is because the only thing that needs to be held is a private key, which is usually about 64 characters long. So long as this key is secure, one can spend all the bitcoins belonging to that address. Furthermore, every bitcoin unit in the network is accounted for in the blockchain. Every bitcoin that exists belongs to some address; there is no ambiguity over control. Because of this transparency, there cannot be any systemic risk of overissuance of notes “unbacked” by specie. In fact, there’s no need for money substitutes at all! There is never any discrepancy with regards to ownership as bitcoin wallets, though they perform identical functions, are strictly differentiated from each other by cryptography, and only the private key known to the owner of the wallet will allow one to sign transactions. It is by definition a 100% reserve currency. When one acquires Bitcoin, what one purchases is space on a finite ledger. To own one bitcoin means to exercise control over 1/21 millionth of all bitcoins. The promise of someone taking your bitcoin and offering a token “just as good” as the bitcoin itself would send shivers up any bitcoiner’s spine.

Mt. Gox, the largest Bitcoin exchange of its time, was purportedly engaging in fractional reserve tactics when they filed for bankruptcy. This situation is an unfortunate consequence of owners depositing bitcoin in wallets on centralized servers. Far from being necessary, it only exists insofar as people allow intermediaries to retain control of their bitcoin. Holding bitcoin on an exchange or a web wallet without being given the private key is essentially surrendering money for an unenforceable claim to money. The inability of Mt. Gox customers to withdraw USD, and eventually BTC, created an enormous price spread between Mt. Gox and other Bitcoin exchanges. That Bitcoin was trading at a premium on Mt. Gox reflects the risk market participants sensed by retaining assets on the exchange. The spectacular failure of Mt. Gox has raised public consciousness regarding the need to personally safeguard one’s holdings. Bitcoin as a next-generation peer-to-peer platform obviates the need to rely on trusted third-parties like Mt. Gox to facilitate trade or store funds. Individual people can enjoy the benefits of bank-like security for free, on their own person, without investing significant amounts of time or labor.

2. Bitcoin is mathematically scarce.

In addition, Bitcoin is much more scarce than any known competitor. Bitcoin’s scarcity is secured by mathematics, instead of geology or institutional trust. While future gold reserves may yet be found on asteroids or created in laboratories, Bitcoin will never surpass 21 million units. Almost complete consensus would be required to change such a fundamental component of the currency – as opposed to being determined by the discretionary powers of a chairman or the limits of our science.

Bitcoin, being a purely digital entry, can be further subdivided by an order of 100,000,000. Bitcoin is thus far, far more divisible than gold. Whereas breaking gold into pieces smaller than a gram is infeasible in practical settings, Bitcoin can be broken down infinitesimally. Wallets also automatically split and aggregate pieces of Bitcoin that are spent and received, and the act of “making change” for a transaction is therefore entirely unnecessary. Bitcoin allows for international trade just as easily as trading in person. The costs for any transaction – ten dollars to ten million dollars – are about five cents as of 9/18/14 –  and are verified cryptographically within ten minutes. Compare this to the costs and delays of shipping precious metals – from transport to insurance to customs to delivery, perhaps assaying – and one can easily see the benefits of the digital newcomer.

3. Bitcoin is antifragile.

In any number of categories one lists, Bitcoin succeeds over its alternatives: fiat money and precious metals. Because we can recognize the advantages users of Bitcoin enjoy, we can expect more people to become users, other things being equal. The adoption process will happen gradually, one person at a time, as more members are brought into the network by witnessing family or friends use it, hearing celebrities endorse it, or being convinced by intellectual discourse. Once more hands enter the network, Bitcoin becomes even more liquid, and thus encourages more hands to enter. A small minority of early adopters can project new value, culture, and technology into mainstream living.

Of course, the argument continues, before Bitcoin becomes mainstream, it will presumably succumb to regulators and/or corporate interference, which will seek to sanitize it of any potentially wayward indiscretions it may have committed in its youth. Various government boards are implementing tax rules and transmitter regulations on Bitcoin businesses, and this will discourage mass adoption. With all the boulders the State puts in the way, Bitcoin surely cannot make it.

Two points are needed to rebut this objection. One is simply to recognize that Bitcoin is stateless; it is international and answers to no legal statutes. If tax jurisdictions feel compelled to fight (people using) Bitcoin through legislation and regulation, Bitcoin technology will simply move elsewhere. This situation produces interesting game-theoretic conclusions: if Bitcoin productivity flees oppressive climates, then States that are laissez-faire, let alone States that encourage Bitcoin, will attract this capital, other things equal. Because Bitcoin simply represents information over the Internet, there is no friction of movement where there is with labor or conventional financial capital. As every State will come to recognize this incentive structure, their own support base for prohibiting Bitcoin will become weaker and weaker. How many people today would support obviously unfair restrictions or prohibitions on Internet access? To do so would not be to heroically join arms with international agencies to root out the extremists on this “anarchic” information-sharing system. Instead, support to control the Internet is met with very violent opposition in town squares. Almost everyone today recognizes Internet access as an extremely beneficial good regarding our standard of living, and so returning to a period of time without the Internet is politically completely out of the question. Massive financial and consumer support will bend public opinion and essentially the legal structures of various States to likewise support Bitcoin. Bitcoin will create mass appeal by offering people a financial safe haven that is outside the abilities of governments to counterfeit or rob.

The second point is logistical. Even if certain States decide to ban Bitcoin, despite its popular support, they are proving more and more incapable of actually enforcing these laws. The speed of technological – and especially cryptological – development is quickly rendering the government impotent. For all their resources, State intelligence agencies such as the NSA are not populated by powerful math wizards – they control and surveil Internet data through predictably broken systems, i.e., twisting Google’s arm, exploiting weaknesses in Windows, siphoning from Facebook, etc. The surveillance capabilities of billion-dollar intelligence agencies are severely undermined when tools like Bitcoin, TOR, Bitmessage, GNU/Linux, and Diaspora* are used. Witness the complete failure the State experiences in its quest to impose intellectual property laws. Peer-to-peer file-sharing technology is ubiquitous and decentralized. The Pirate Bay, the largest library of media on the Internet, is a BitTorrent website that allows quick downloading and uploading of any media you want, for free. It has existed for a number of years, but even if the Pirate Bay should go under, BitTorrent technology is completely decentralized and thus impossible to combat. New hosts will emerge as surely as the sun rises. The architectural structures of Bitcoin and BitTorrent effectively make them “anti-fragile.” Chaotic shocks and stressors actually enhance the performance of these networks instead of breaking them. The unimpeachable presence of file-sharing and digital cash technologies is truly inspiring; their history is a history of repeated attempts, failure, and reworking. Centralized institutions like Napster or e-gold were inferior arrangements to provide for these services. They were met with incredible legal force. Because these technologies live on the Internet, future geniuses are able to pick up the pieces and retool the application in a way that is resistant to the downfall of its father. Over time, file-sharing and digital cash technologies became completely peer-to-peer. The reliable institutions that support these nascent technologies – such as The Pirate Bay or OpenBazaar – are further built in anti-fragile ways. Attacks on these structures may or may not destroy them, but they will surely spur the evolution of stronger, more resistant methods of peaceably interacting against the wishes of the State. This is not to mention the attacks on fiat currencies Bitcoin will encourage.

The success of the Internet and file-sharing technology specifically indicates the enormous benefits people around the world gain from these services, and that further they are not willing to give them up without a fight. In this day and age, the fight isn’t physical, nor is it political or social. The fight is technological. Great minds around the planet are solving ways that criminal agents can break these valuable systems; coin mixing is improving, decentralized marketplaces are coming, Bitcoin transactions can pass through radio or sound waves where Internet access is low. Any conceivable attack on the use or enjoyment of Bitcoin is being anticipated and eventually solved. That’s not to say we are in the clear entirely, but the greatest danger already lies behind us. It gets easier from here.

Completely independent organization Greenpeace announced today that it now accepts donations in bitcoin, becoming the latest charitable institution to adopt the digital currency into its operations.

Greenpeace devotes its efforts to ensuring a “healthy planet for current and future generations.”

The organization states that it does not take money from corporations or government, and hence relies on individual donations, a fact that will surely be warmly accepted by the bitcoin community, which has largely libertarian roots.

Their blog reads: “A majority of our support comes from individual donations made by thousands of people across the country…[m]eaning that we have to be constantly evolving to ensure that donors are able to support our important work in the way that’s most convenient for them.”

Naturally, bitcoin is a perfect fit for Greenpeace.

Greenpeace’s move into the digital currency is a positive move. Greenpeace will now receive charitable donations from anywhere in the world for a fraction of the cost compared to other traditional methods. Their blog continues to say that “decentralized digital currency basically means that transactions are processed without a bank or other financial institution taking a processing fee, typically 3 percent.” The organization is still accepting traditional forms of payment, like PayPal and credit cards.

The integration of bitcoin is made possible by BitPay’s merchant tools, and comes just a week after United Way announced its acceptance of bitcoin as donations.

BitPay recently made a significant change in its plans, allowing 0% processing fees forever, making it a perfect fit for organizations and companies who wish to accept money and avoid the costly transaction costs typically associated with doing so.

Furthermore, Bitcoin offers the possibility of small, casual transactions, making it now economically feasible to send micropayments to charities. Surely, BitPay and Greenpeace’s joint announcement will open the doors to a new way of charitable giving.

Charitable giving is already at the centre of the bitcoin community, with successful projects like Sean’s Outpost and Women’s Annex Foundation reporting success in accepting the digital currency.

Greenpeace joins the list of philanthropic organizations to move into the bitcoin space, alongside United Way, which announced last week that it is now accepting bitcoin donations, and Wikipedia, a large non-profit.

To make a donation to Greenpeace in bitcoin, please click here.  

It seems that there may be too much focus on the price of bitcoin as its only attribute. Many have indicated on various forums that one would have to pry their bitcoin from their cold dead virtual fingers or something to that effect. They hold deeply held expectations that their precious invisible currency will reach prices measured in six figures one day. Does having tens of thousands of misers help their cause? When bitcoin was owned by less than 100 people, would this ever work? Could it be valuable if only 1,000 people in the world owned any? What about 100,000 or only one million? For all the promises about the abilities of bitcoin, the dichotomy is it will only become more valuable if you spend it and spread the wealth and ownership. You can’t have your cake and eat it too. However, unique to the cause of bitcoin this might be somewhat possible, at least for a while, if you buy more as soon as you’ve spent it.

One of the biggest knocks on bitcoin is the transaction volume. A glance at the transaction volume report on the website blockchain.info shows the average rate of transactions is decreasing. Other than a few temporary spikes, the volume has actually gone down over the last two years despite a huge increase in wallets and presumably the number of people owning bitcoin. Bitstamp and Coinbase are signing up new merchants at record pace, yet transaction volume stays the same? What’s in your wallet?

The bitcoin network is currently throttled at about seven transactions per second. That’s 420 per minute, about 25,000 per hour and over 600,000 transactions possible per day. Today’s volume is about 15% of the peak. The artificial throttle in the bitcoin code is pegged at seven transactions to limit the blockchain size, but could be made much higher if there were demand. Visa’s typical transaction volume does this every few seconds. Many of these transactions in bitcoin are simply balance transfers from one to another without actually changing ownership as opposed to Visa which likely does relatively little volume of balance transfers. If only a small portion is actually passing through merchants, why should merchants be compelled to sign up when they see little demand?

Many Bitcoiners believe that eventually, the technology will be the obvious preferred payment mechanism for most merchants because of the intrinsic protection against identity fraud. Perhaps the IT security folks at Home Depot will be embarrassed enough to reconsider. They lost control of the ID protection of 56 million customer accounts since April. Will this finally motivate them to find another solution? For the record, this author predicted and warned of these events in an article for Bitcoin Magazine about the same time this Home Depot hack attack was reported to have begun. In addition, more articles were written regarding this problem in March and January as well. Anybody still running Windows XP anywhere on their network after April 8, 2014, which was Microsoft’s cut-off date for Windows XP support. Unpatched and unsupported, XP in now the Swiss Cheese of operating systems and hackers are actively exploring every one of them. A unsupported Windows XP machine sitting on a network?  You might as well put out the welcome mat.

And yet, thousands of merchants are likely having their networks raided today for even more credit card hacking that you might not learn of for several more months unless you see it on your own bank records first. It is known that many companies now buy back their own secrets on the black market to keep it quiet. How often are banks going to reissue credit cards during the next several months before they start to wonder if there might be a better way? Albert Einstein was credited for describing insanity as “doing the same thing over and over and expecting different results.”

What merchants need is the good old fashioned “carrot and a stick” approach. They have the stick of punishment continuing to hit their backside from hackers. This makes CEO meetings with investors uncomfortable, while the CEO still has a job that is. We said goodbye to Target’s previous CEO Gregg Steinhafel after the Target hack attack. Will Supervalu’s CEO Sam Duncan claim his $500,000 bonus when he walks out the door? Will Cerberus Capital Management,  the huge multinational conglomerate owners of the effected Albertson’s grocery store chain allow it?   It probably will be no surprise to learn Home Depot CEO Frank Blake “coincidently” picked a good time to bolt for the back door about the same time they discovered their own compromised credit card security. Have the constant reports of major hacking theft rings become so commonplace it has become white noise for the public? Should one expect to see replacement credit cards in the mail each month? Each time they resend credit cards they are simply plugging the leaking dike with more fingers, yet the dam continues to crumble before them.

Bitcoiners, what they need is a carrot; also known as the rewards. You own the carrot. Lead them to the promised land of bitcoin. When they see transaction volume rising, it will give them faith in the network. The public and CEOs of most big retailers will only believe what they can see – and they will see the power in the form of transaction volume. Those Bitcoiners sitting greedily on their bitcoins are only strangling the life out what could be thought of as a golden goose. The community will have to actually spend their bitcoin so that the currency flywheel can get spinning. Once it is spent, if you don’t have a big nest egg – just buy more bitcoin, right then. This action greases the wheels in the payment network by letting bitcoin run through your wallets and on to the merchants which will then sell it back to the payment processors where you buy it again. Replace what you’ve just spent and yes you’ve paid a small fee for your trouble (unless the retailer has given you a discount for your trouble). If we all do a little the cumulative effect will do a lot. Rinse and repeat. Support bitcoin businesses every chance you get if you want your net holdings to increase in value. For those Bitcoiners sitting on large stockpiles, consider that you will eventually need to spread that wealth so it can become popular. The math on 7 billion people owning 21 million bitcoin shows equal distribution to be .003 bitcoin each.

The value of bitcoin is going to be derived from its use as a payment network first. It will have to gain legitimacy here as a tool. Its inherent value must be recognized and utilized. Only when the system is flooded with transactions and needs more bandwidth will the speculation phase of bitcoin’s value end. Its utility value will then be recognized. That’s where amazing things will begin to happen. Look to Overstock.com before Amazon. Give businesses accepting bitcoin your business as a first priority. If we all do a little, we can get the needle moving for the transaction volume on the blockchain.info chart. Make the bitcoin pioneers in retail proud to be the trailblazers.

If you need a refresher course on why you are actually HURTING BITCOIN by not spending them, it may be a good time to refresh the lesson of Aesop’s fable, “The Goose that Laid the Golden Egg”. In this story, a lazy man living on a farm several hundred years ago inherited much land. Rather than working, he sold off pieces of land to pay for his lifestyle of temporary trivial riches until one day he found he had no property or items left to sell. One of the only items remaining was his pet goose. Before he took it to slaughter he found one morning that it had laid an egg made of pure gold. He quickly sold the egg to buy food and clothing to take care of his immediate needs. But the next day he found another golden egg which he used to buy a carriage and horses. The next day yet again another golden egg provided him wealth for a newer fancier home. This went on for some time before the man became greedy. He wanted all the eggs possible without waiting. He cut open the goose but found nothing. He never received another golden egg. His own greed ruined the ability for him to sustain his life. And soon enough his laziness and spending returned him to poverty.

This life lesson is included with an entire collection of important life-lessons in Aesop’s fables including the “Boy Who Cried Wolf” and the “Tortoise and the Hare”. In an effort to show you’ve learned the lessons of the Goose and the Golden Egg, consider spending some bitcoin to order the entire collection of the classic Aesop’s Fables in hardback book form. One place to exercise this option is from Overstock.com and the order page for the book is found here.

Then buy more bitcoin.

Author’s note: The author is not endorsing the purchase of any product from any retailer specifically. The recommendation is to utilize the bitcoin market and the practice of using the payment network in general. Aesop’s Fables book will likely be found for sale at several bitcoin accepting merchants. Overstock.com was illustrated for example only.

 

 

 

Cats are worshipped.  They are the most popular pet in the world. People who own cats have a strange and strong obsession with these furry and elusive creatures. This deep respect, admiration and possible obsession is very noticeable now that we’re all on the Internet.  I think it’s safe to say that the power of the cat on the Internet cannot be overstated.

Take for example the ‘art wave’ of Internet cat videos.  TIFF, a charitable cultural organization whose projects include the annual Toronto International Film Festival in September,  actually showed a nation-wide film reel of popular cat videos, including, but not limited to: Henri: the Existential Cat; L’il Bub; Boots/Cats and many more.  The event was an instant success, with screenings selling out nation-wide almost immediately. In fact, Laureen Harper, Canadian Prime Minister Stephen Harper’s wife, made the trip to Toronto to show her personal love and dedication to this beloved animal.

You are witness to this sensation, too. Have you ever seen a link to a  funny cat video on Facebook? Perhaps this one, of ninja cat.  This video  got over 43 million views on YouTube. It’s great. Or perhaps you have  seen this heroic cat, saving a child from a vicious dog attack.  This  particular video garnered over 22 million hits. Cat videos make us   laugh, but they also show us the protective nature of cats.  Cats are   often brushed aside as aloof and disinterested animals; in fact, they feel for us, love us, and can even protect us when we are in harm.

Our obsession with cats is not a new phenomenon.  We humans have always been this way.  In Ancient Egypt, cats were considered a ‘revered animal’ and were extremely important in both society and religion.  In fact, some cats even received the same mummification after death as humans.

The Greeks, another honoured and respected society, also loved cats. The Greek historian Herodotus wrote that in the event of a fire, men would guard the fire to make certain that no cats ran into the flame. In addition, he noted that “when a cat died, the household would go into mourning as if for a human relative, and would often shave their eyebrows to signify their loss.”

In fact, in the height of both of these great civilizations, human beings were sentenced to death for killing a cat — even accidentally.

However, despite the laughs they give us, we know that not all cats are loved.  If I could feasibly house all the cats in the world to ensure none of them suffered at the hands of other, less-evolved beings, I would! It’s not a viable reality.  So, unfortunately, many cats enter this world to live vicious and brutal lives – facing malnourishment or starvation, attacks by other animals higher up the food chain, or even human-inflicted abuse.  The reason for this is simple: cats breed quickly, and they breed often.  There are too many of them out there to love.

Now, earlier populations like the Egyptians and Greeks had an excuse: they simply did not have access to the proper technology to solve this cat population problem.  Indeed, they would ‘cull kittens’ to keep the amount of cats in reasonable numbers.

Primitive technology disabled earlier populations from effectively controlling the cat population.  However, in 2014, we have the technology to spay and neuter cats and work to ensure that each cat born is born for a purpose – not as an accident, with no where to go, no one to love, and no one to love them.  Even still, however, shelters across ‘developed’ nations like Canada still report surprising figures about the welfare of modern-day cats.

Each shelter is purportedly “bursting” with cats. These shelters can’t take on the responsibility of neutering these cats, though.  As a result, cat population continues to be a problem.  Shelters are sometimes forced to euthanize our friendly critters because they become sick due to overcrowding. Furthermore, neglectful and ignorant humans sometimes abuse the animals they are trusted to love and care for, increasing the pressure on shelters to provide care, and a suitable home, for these harmed creatures.  Shelters transform the fate of cats and offer them love, and a possible happy ‘forever’ home.

Cat population control doesn’t need to be a problem anymore. We know cats breed, but we have the technology to change it.  I can only assume that this continues to be a problem because we are simply not aware of the severity of the cat-population issue, or perhaps we are, but it’s just not at the forefront of our radar, what with life, and all.

However, we do know what Grumpy Cat said in his last Internet-famous meme, and we absolutely know how ridiculously cute Maru is when he slides across the floor into a soda-pop box and stares up at us. We see cats online every day….

Being aware of this clear cultural obsession with cats,  the Canadian Federation for Humane Societies – a collection of national humane societies, the Society for the Protection of Animals  and other interested like-minded organizations -paired up with film festivals across Canada to get people to recognize that  cat population control can’t just be done by humane societies themselves – it is a “community  problem that requires community effort.”

I wondered.  The cat community is a strong one.  So is the bitcoin community.  So strong that we actually sponsor Nascar with DogeCoin – a cryptocurrency based on a dog meme.

Bitcoiners are also a really cool, forward-thinking, humanitarian-oriented group of people.  Some of us are very interested in dismantling old, archaic , even dysfunctional systems that do not serve humanity.  We would rather work to create a better world for us all.

Bitcoiners came together to support Sean’s Outpost nicely, and we also showed our true colours in fundraising for that fat cheque given to wrongfully-accused Dorian Prentice Satoshi Nakamoto. From my point of view, ‘Hardcore Bitcoiners’ appear to believe in ending war,  doing no harm, and in living and let live.  And we just love supporting a good cause.

And our beloved Bitcoin has many functions, two of which include peer-to-peer charitable donations and the ability to micro-pay/tip.

Mat Cyrulo, founder of social-tipping application Cryptiv, agrees with the YouTube Cat video + social tipping power combination. “If Egyptian Pharaohs had smartphones and YouTube, they would have probably posted cat videos, too,” he laughs. “Cats are a metaphor for a unique form of Internet culture.  Reddit loves cats so much, it’s crazy. The Internet also has a unique language, (meme, lulz.) [Now]… we have a currency that will let the people of the Internet join forces when they feel that something needs to be done.”

So, if we enable microtipping on YouTube videos and other online content, and allowed viewers, or even likers, to ‘tip’ their way directly into a Humane Society’s wallet, we could finally solve this ongoing cat-population problem.

But Mat doesn’t see this restricted to YouTube tipping. “Using Cryptiv, you can send a donation to a humane society over Twitter.  Everyone who follows you sees that Tweet.  You look like a nice gal/guy to your followers. Or, if you spend 5 hours making a cat meme/video and you donate all the tips to the humane society, you look like a hero.”

“Thus,” he continues, “ we achieve multiple things: entertaining people, and getting social gratification from our work, and promoting a cause we love/care about.”

Louis CK had great success with this type of fundraising activity: he produced a video, posted it online and asked for donations, and made “more than he could have with HBO.” Mat continues with a RadioHead example: “They released their album online via ‘pay what you can’ and made more money than their last album.”

The key here is that – with crypto – the sums of money can now be any size. “It was impossible to send a penny before, and now you can send a fraction of a penny via a social cue. Pennies can be powerful when there are enough of them,” says Mat.

Imagine the possibilities of including a micropayment tip-application like Cryptiv or ChangeTip to YouTube.  Every time you watch Ninja Cat, or show Grumpy Cat off to your friend, you can tip .01 cent. Or .05. Or even .25. Whatever! It’s really nothing for us who have the luxury of time and ability to laugh at cat videos or memes, and it’s totally worth it, because if we all do it, that number adds up.  That .01 c (equivalent in bitcoin, or perhaps Kittehcoin/CatCoin), is transferred directly to a local humane society or animal shelter.  This activity amounts to some massive money.

Take the numbers generated by NyanCat, for example. This pop-tart bodied cat who flies happily through a rainbow, while singing the same song forever got a whopping +112,000,000 views.  And that’s just the count on one of his/her/its many videos. If the video linked directly to a Humane Society’s wallet, and every viewer spent .01c to enjoy NyanCat’s epic journey, direct charitable givings would have amounted to over $1,000,o00.00 dollars.  How far do you think shelters around the world can go with any extra money, let alone a million dollars? From people enjoying an animated poptart cat?

And that’s just the social tipping side.  With our direct peer-to-peer technology, we now know that every bit of charitable donation (tip)  we are sending is going to a wallet that is in the hands of a humane society.  We can see it.

Bitcoin is financial empowerment.  It enables communities to come together online and pool our resources to make massive change. Those of us who agree that animal abuse is completely unnecessary, let alone in this day and age, can now make this happen using Bitcoin. 

Soon, YouTube will have micro-tipping options for popular content.  YouTube content creators can still earn their significant advertising revenue, so no one loses; indeed, cats win, cat video/content creators win, YouTube wins, and we as an evolved species win.

What can we do?  Educate, educate, educate.  Find your local animal shelter.  Determine for yourself if it’s run up to snuff, and if you would feel good giving them money.  Teach them about Bitcoin.  Create a wallet for them – or better yet, have them go through the process of creating their own wallet with you there.  Empower them.

Then reach out to content creators and educate them, too.  Help them install a social tipping tool, or just paste the QR code to the shelter’s wallet on their YouTube page.  Educate them on why this is good, and what it will do.  Heck, they clearly already love cats enough to make videos about them!  People love to laugh, and as Ethan Buchman of CoinCulture says, “the best way to raise money for charitable causes is by making a joke out of it.” If Potato Salad has taught us anything, it’s that people feel more open to sending money to things that make them laugh.

If this is indeed true, these cats are going to be billionaires.

Tip me below if you enjoyed this article!

 

The panel discussion on Sept 18 in New York’s prestigious Premier Studios in Times Square about the role of cryptocurrencies for innovative business models in the music industry was very illuminating for lots of different reasons. First of all the panelists and the moderator spoke extremely clearly and passionately about the drivers behind the adoption of these new technologies and the power that they give to artists and fans disintermediating the labels and middlemen in general. Second, with most of the audience composed of music industry and content distribution representatives of various kinds, it very clearly illustrated how much we are living in the world succinctly described by Bre Pettis where “things are changing faster then we can die”: while the audience in the room was still trying to get to grips with what is Bitcoin and what the first generation of Blockchain technologies mean, the panel was moving on to describe smart contracts, distributed applications, and how novel implementations of the Blockchain can be more flexible to solve real-world problems that artists face on a daily basis.

Tatiana Moroz eloquently described her experiments with TatianaCoin and a clear understanding of the learning process involved from all sides, her and her technology team, and also on the side of her fans. The securitization of the assets of an artist that was an extremely unexpected move by David Bowie a few years ago, is now available to anybody, so that creative people can leverage their future production promptly. It was amusing how the moderator keenly remarked every time he could that this was not an IPO because the SEC regulations would not allow it.

Phil Quartararo, who is an icon in the music industry made it clear that the power of fans and their ability to send rapid signals back up to the artists would increase radically. His exchanges with the participants were very useful because they spoke the same language, being industry insiders, but still did not bring the many skeptical participants in the audience over to the other side, embracing the exciting new possibilities that have to be experienced in order to be better understood.

Gregory Simon, CFO and Co-Founder of Ribbit.me! highlighted many of these new possibilities, especially oriented to a rapid, and viral adoption of the cryptocurrencies which in his view can be bundled in promotions that have a very low barrier to entry by consumers. Since his platform is shipping in a few months, in December, it is impossible to prove his claim today, but everybody will agree that Bitcoin and the alt coins must become radically easier to use if we want to achieve massive adoption. Ribbit.me!’s bundling approach hits the consumers in their passion at the time of purchase when their defense barriers are lowest and, if the user experience is right, could indeed facilitate large numbers of people becoming acquainted with the advantages of crypto currencies.

The moderation of the panel was conducted with light but sure touch by Rik Willard of MintCombine.

I had the chance of remarking how the music industry has been in the past very successful in moving the balance away from innovation, especially with their victory at the Supreme Court in the Grokster case that criminalized peer-to-peer technologies, shying investors away from financing anybody who would leverage them, and plunging us in an era of suboptimal use of networks which only now is being slowly corrected. The reason why songs cost an amount that never goes lower than a dollar too much is not because artists wouldn’t be happy to sell 1 million songs for $.10 each, but is due to the antiquated payment infrastructure enabled by the credit card technologies belonging to the middle of the previous century. We are mindlessly admiring Apple, Google and other tech giants when they announce their latest investment in multibillion dollar data centers. We should instead be living in a universe where as soon as we meet a group of people our phones should start synchronizing the apps and that the content on each other’s devices. Based on our respective preferences, without having to go thousands of miles across continents through vulnerable connections to spying, poaching and exploitation, this should all be conducted on ad-hoc local mesh networks.

The fact that these conversations occur, obviously is good, and one can only hope that the lawyers in the room were not there so that they could learn how to build the next line of defense or even attack in order to stop this new generation of technologies from gaining ground and giving opportunities to artists worldwide through their democratizing power.

Premier Studios Live:  www.PremierStudiosNY.com

When I first started organizing CoinFest, I never imagined what it would become. It used to be just a simple gathering of less than 100 Bitcoiners at Vancouver’s famous Wave Coffee House, come together to celebrate the love of cryptocurrency. Not long after, the team behind CoinTrader brought the world’s first Bitcoin ATM to the scene, and CoinFest gradually expanded into a decentralized convention across multiple venues. Now it’s expanded around the world, spanning 7 cities and 5 languages so far, but as word of the movement spread, we were confronted with a lot of questions about how and why it works the way it does.

The confusion is understandable: CoinFest operates under a radical set of principles, truly unlike anything attempted by any other Bitcoin convention. Its management will eventually be converted to a decentralized autonomous organization, to which all domain names and other assets will be granted for decentralized, consensus-based control. Because CoinFest exists in the open domain, these aren’t exactly “rules”–they cannot be legally enforced, and we probably wouldn’t even try–but we believe the cryptocurrency community will cherish and respect the spirit of CoinFest, whatever that may become.

The first and most important tradition of CoinFest is that events can only be held at venues that support cryptocurrency. Since the first CoinFest in 2013, we have never been forced to use a venue that required us to directly handle fiat. CoinFest was intended foremost to incentivize and celebrate Bitcoin adoption, and to forget that would be to go against everything CoinFest stands for. We bring customers and reporters, both die-hard and mainstream, and the opportunity to capitalize that has already persuaded more than one business to accept Bitcoin. We’re not stopping, now.

The second tradition of CoinFest is that one cannot charge admission for CoinFest events. We maintain one of the highest percentages of new users at CoinFest, and provide hands-on education in order to grow the crypto community. These are all new customers without prior brand allegiances that sponsors have every reason to want to reach, and between sponsorships and donations, CoinFest has continued to survive without resorting to taxing our guests. If you want to maintain a more elite atmosphere, consider instituting a guest list, or hold one of your events at a very classy (expensive) venue as we plan to try in Vancouver. It should go without saying that CoinFest is non-profit, and all funds should be used to promote cryptocurrency. Complete financial transparency is expected.

The final tradition of CoinFest is to encourage friendly competition. I fully expect you to try to make your city’s CoinFest bigger and better than mine; this is a meritocracy, and the CoinFest Conference–which shall conclude each annual celebration–will come to your city if you appear poised to succeed. Cooperation is key, however, and together we will create a firestorm of decentralized activity so wide it becomes impossible to ignore. More than just a way to make money, we will prove that this is a social movement, connecting freedom advocates around the world without respect for borders or what they imply.

Using the emerging power of the Internet, we can do this instantaneously at the click of a button. CoinFest is a holiday celebrated worldwide, and no matter how far apart we are, our hearts are in the same place. If you cannot make the dates (the next annual CoinFest is slated for February 20-22, 2015), however, feel free to contact me at [email protected] and we’ll try to work out a solution–we’re always willing to increase the duration of the festivities. Everyone has a say in CoinFest, and if you have your own ideas for what would make it great, we welcome you to organize a CoinFest of your own.

For more information about CoinFest, and past and future events, go to www.coinfest.org. Once the tradition of CoinFest has been established, I myself will step down, and finally rest once my role has been made obsolete by blockchain 2.0 technology. To do that, we need your help, however, so if you or anyone you know is willing to organize, volunteer, sponsor or donate, please reach out and let us know. The community will thank you.

Serrano Street – Calle Serrano – a shopping boulevard crossing Madrid that features prestigious international brands like Chanel, Prada and national ones like El Corte Ingles, has been making headlines thanks to the #callebitcoin project. The project aims to turn this street into a resource for Bitcoin users, and hopes to then see the experience replicated in other Spanish cities, setting an example across the Spanish speaking world.

The idea for a “Bitcoin Boulevard” is not new, having been tried before in Netherlands and in the United States, but Serrano St. has became the first in Spain and will be the largest Bitcoin Street in Europe.

The drive to turn Calle Serrano into a Bitcoin haven came from the Bitcointalk forums, where a team of volunteers came together with the common goal of bringing Bitcoin to a group of local businesses in close geographical proximity.

The project had two main goals: first to show to merchants how easy it now is to use Bitcoin for everyday payments, and secondly, it hopes to bring together the Spanish Bitcoin community around a place where it can meet, connect and experiment with different ways of using Bitcoin. It provides a platform for further innovation and experimentation in Spain.

Volunteers have been visiting businesses, handing out flyers, and giving Bitcoin education in stores by advising on the tools and possibilities (paper wallets, Blockchain, Coinbase, Bitkassa, BitPay etc.), handing out stickers (like the well-known “Bitcoin Accepted Here”) and promoting the Bitcoin world through activities and workshops.

As of today, more than 20 merchants are accepting bitcoins in this Madrid thouroughfare and it even has a Lamassu ATM located in the ABC Serrano shopping mall (a Robocoin ATM is also on its way), making it easier for local companies to accept Bitcoin. Participating merchants include several bars and restaurants, a hotel, a law firm, an architectural studio, shops, and even a doctor! The full list can be seen at coinmap.org. Many of them are also featured in this trailer:

The project is sponsored by a number of Spanish Bitcoin startups, as well as giants such as Coinbase, Blockchain, and BitPay. Sponsors have provided T-shirts and merchandise, and will also be giving away some bitcoins on launch day!

The nearby presence of 2 international MBA schools (IE and IEB) and a number of embassies (including USA and Italy) means that there is the potential for merchants to have a permanent and growing base of Bitcoin-using clients.

The #callebitcoin team feels that it is very important to bring everyday Bitcoin use to the real, physical world, bringing both visibility and removing the techy stigma that makes many everyday users cautious of installing a Bitcoin wallet.

Participating merchants, like architect Ana Muñoz Gonzalez, find Bitcoin new and fun and were happy to try it out, finding it “very easy and fun to use thanks to the different possibilities for accepting Bitcoin”, “doing away with intermediaries and performing fast transactions is great” . . . “we are keeping the bitcoins and hope in turn to be able to spend them directly in Serrano street.”

Others, like the restaurant “The Geographic Club”, use payment processors, BitPay POS in this case. They did not know much about Bitcoin before being approached by volunteers from #callebitcoin. “Now we find it easy to use; even my (65 year old) father can use the tablet or smartphone to bill clients. It’s easy.” They feel that it is a perfect fit for their international clientele.

Law firm Abanlex specialized in technology law has been accepting Bitcoin for over a year and feels that it was a logical step for them to be pioneers in this area. They have already received a number of Bitcoin payments. They also offer advice on the legal situation of Bitcoin in Spain.

Most participating merchants see accepting Bitcoin as a way to bring in more clients and are happy to experiment with a new way of doing business. It helps them stand apart as more modern and fun.

The official launch of #callebitcoin, which the team behind this project has labelled EL DÍA B (B-DAY), will be on October 3rd (and last into the 4th). There will be games, giveaways, rewards, and a big party to celebrate the largest Bitcoin Street in Europe and bring together all of the Spanish Bitcoin community. All Bitcoiners and newbies are welcome!

You can learn more about #callebitcoin at callebitcoin.es

Special thanks to Félix Moreno for all the information and help to write this article.

One small step for Apple…

There are moments when technologies break into popular discussion. Often it takes a big company incorporating something new into a product launch. Using their brand and their voice, they introduce the world to a concept that technologists have known about for years.

Apple did that last week. They may, in fact, have done it a few times last week. But they definitely did it for the concept of “tokenization.” In outlining the security and privacy features of Apple Pay, Apple SVP Eddy Cue introduced the average consumer to the idea that our personal information, including our payment information, can be handled in a new and different way. Namely, our information can be altered and adapted so as to be dynamic and situation-specific, instead of saved in static form on servers far and wide. Tokenization achieves this by substituting situation-specific information for static personal data. Your credit card number, for example, is stored not in its raw form but in a modified form that makes it relevant only in a very limited way.

To the Bitcoin community, concepts like this will feel commonplace. Tokenization is one of a series of tools in the family of cryptographic processes that are gaining popularity. Public key encryption, for example, is also a member of that family and is so fundamental to how Bitcoin works that the word ‘tokenization’ popping up in the media’s coverage of Apple Pay will not seem particularly noteworthy. But for cryptography generally, this was a watershed moment. More people are aware of a cryptographic process now than probably ever before. And that awareness will only grow from here, and that’s a good thing.

The math behind tokenization and other cryptographic processes is incredible and worth thinking through. Imagine you have a secret number, a number that you can use to identify yourself and even authorize the payment of money from your bank account. You want to keep that number somewhere, and you want it to be safe. You almost wish you could change the number in a way that obscures it from anyone who happens upon it. Turns out mathematics has made that (and many complicated variations of that) possible.

Just to give you an example of what this looks like, imagine you have a secret number that you use to identify yourself – almost like a password. Let’s say that number is “123456.” A math system that has become more popular of late called “hashing” could take that number and spit out this:

“5994471abb01112afcc18159f6cc74b4f511b99806da59b3caf5a9c173cacfc5”

Amazingly enough (and you’ll have to understand more math than I do to understand why), if instead of “123456″ your secret number had been every number in the phonebook strung together, you would still get a unique 32-digit string. And here’s the catch: it is mathematically impossible to reverse the 32-digit string created by this process. So if you store it somewhere, no one could ever find it and figure out what your secret number is. They would have to ask you to re-enter your secret number and run it back through the same process to establish a match. This is not the exact process that Apple is using, but it is an important foundational example of how mathematics is allowing us to alter and adapt information, the impact of which is an overall decline in the transmission and storage of information in its raw form.

Geeking out over the amazing math behind this aside, the implications are clear:

1. This is not complicated technology at this point, and it does a lot to keep your information safe. We should all demand that businesses that save our information save it in a more modernized way. Apple understands this and has taken a big first step in getting cryptography into the vernacular. There is no reason, at this point, that our passwords, credit cards, social security numbers or any other piece of personal information should be stored in a way that is not (i) encrypted generally and (ii) encrypted in a situation specific way, moreover. If you see any service ever send you or display to you your raw information, your antennae should stand at attention. If your browser bar doesn’t have a green “https” in it when you’re entering important information, you should be asking questions. Increasingly, if you’re not being asked to type in a verification code, scan a fingerprint, or do something else beyond type in a password, you should be thinking twice.
2. This is really good news for everyone. The more comfortable we all are with these concepts and the more they are introduced into new products and services the more confidence we can have. And confidence is key. Confidence will allow us all to interact more freely with new products and services. It will allow developers to invest less time in creating trust on a one-by-one basis and more time developing new and innovative products. Continued acceptance and incorporation of cryptographic processes will massively drive down the costs of establishing trust. The result will be an Internet and a world where we spend less time worrying about protecting ourselves and more time taking advantage of all the great things that can happen when information can flow efficiently (and securely).

The impact of Apple helping shine more light on the tokenization conversation should not be understated in this regard. The average consumer does not need to understand the inner workings of how Apple is tokenizing their credit card information. But they do need sufficient knowledge of what’s going on and of the advances in this field to truly believe that these improvements are worth trusting.

Nicholas Thorne is the co-founder of BlockSign, the first digital signature service powered by Bitcoin’s technology and the CEO of basno, the platform for creating and collecting digital badges.

 

The post was written by Ian Worrall of Sembro Development LLC

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Normally in the Bitcoin world sudden price fluctuations ranging from $10-$30 can be attributed to market manipulation by large holders of the virtual currency. However, when the price changes greater than $30 in a short period of time there is typically something more behind it such as imposed government regulations or technical implications such as a mining pool nearing 51% of the total network hash rate.

Today, September 18, 2014, the price of Bitcoin is down 9.39% ($42.70) at the time of writing this article and has decreased by a whopping 17% this week (≈$70) with no clear indications as to why. Through our analysis we believe we have determined the reason. It has nothing to do with the Bitcoin industry but rather the upcoming IPO of Alibaba, the Chinese e-commerce giant, which is set to go public tomorrow, Friday the 19th, which would bring in a vast amount of support from Chinese investors from banks to individuals who have wanted to showcase that the Chinese market means business for quite some time, and this is their golden ticket to do so.

The Alibaba IPO has generated a lot of noise in the financial markets as the IPO date has drawn closer and tonight the leading Wall Street investment banks are holding a meeting to determine the official share pricing of Alibaba as it hits the markets tomorrow. Originally the price per share was said to be in the $60 range, but earlier this week Alibaba raised that estimate to $66-$68 per share. We believe that the Chinese Bitcoin holders began dumping their holdings earlier this week to free up capital to invest in Alibaba when it goes public.

The largest Bitcoin exchange by volume, BTC China, which covers an average of 38% of the total Bitcoin transactions has averaged around 19,000 Bitcoin per day in trades. Today, the volume is currently up over 52% at 29,400 Bitcoin and rising.

On top of increased volume on Chinese exchanges, the volume on the European exchange platform Bitstamp is up well over 100% today at around 21,400 Bitcoin compared to the monthly average of 9,200 Bitcoin. This is right after many of the leading German analysts from renowned investment banks have indicated that Alibaba is a strong buy.

Based on this information, we have concluded that many large Bitcoin investors from China and Europe have exited their positions in Bitcoin to put into the Alibaba IPO.

Are these investors gone for good? No, many factors will determine how long it is before these investors close their positions in Alibaba and re-enter the Bitcoin market. If the Wall Street banks issue an initial price lower than expected we could see the price rebound slightly as soon as tonight. After that, the key factors will include how the price fluctuates during the public offering tomorrow and Post-IPO early next week. If Alibaba remains strong and continues to grow in value, we may not see this money flow back into the Bitcoin market until a “bump” in the economy occurs.

The U.S. Federal Reserve has kept interest rates low as indicated in their public statement yesterday, but they intend to begin raising them as we head into 2015. If this scenario were to occur mid-2015 would be a definite point in time when the investment money flows back into Bitcoin, and at even greater volume due to the gains achieved by investing in Alibaba long-term.

Is it guaranteed that the money will flow back into Bitcoin? While nothing is ever set in stone, our research has shown a correlation between the price of Gold and Bitcoin price movements. This being said, Gold tends to rise, based on historical records, when the markets start to become unstable. So we do believe that a vast majority of the money invested in Alibaba and the gains associated will find its way back into Bitcoin.

permalink: http://bitcoinmagazine.com/16481/bitcoin-price-dropped-today/

Today, XCurrency has released a brand new trustless mesh network that looks to create revolutionary advancement in privacy, scalability and mobility. This is the final component of the company’s Rev 2 privacy solution and is a single protocol with many possibilities for users and enthusiasts. This new service will allow any node to communicate on behalf of others, without having to trust forwarding nodes.

The addition of XC’s trustless ad hoc mesh networking comes just months after the company announced XMixer, where nodes can earn revenue for the trustless forwarding of transactions. It seems the company is taking large strides toward creating a truly trustless process, one that may play a key role in the advancement of blockchain 2.0 technologies.

How It Works

When someone makes a private payment using the XC application, the transaction is split into several fragments, after which they are sent to other payment nodes. These nodes form mesh networks that only exist for the duration of each transaction. In these types of networks, no node functions as a “hub.” Instead, nodes mix transactions in a manner where no node knows the source or identity of the coins they are forwarding, and there is also no link on the blockchain between sender and receiver.

Due to forwarding, the identities of the sender and receiver are concealed and due to the fragmentation of transactions, the amount sent is also concealed. In other words, an ad hoc mesh network can create true privacy. According to XCurrency, “since all nodes can forward transactions, nodes cannot even tell whether a given fragment originates from the node it receives it from or whether that node forwarded it from somewhere else.”

The company calls this process “trustless multipath mixing,” and serves the purpose of enabling complete transaction privacy. Even further, it has the possibility to set new paradigms for private web browsing, content servers and mobile blockchains. These aspects are at the core of XCurrency’s upcoming Web 3.0 plans.

What the future holds

Many believe that the future of cryptocurrency will be further propelled through continued advancement in cryptographic technologies. This may be true, however, advanced networking technology like the ones created by XCurrency will also play a key role in continued innovation. Before now, one of the most popular techniques for anonymous transactions has been CoinJoin, but the company believes its platform has many implications that put CoinJoin at a disadvantage – so much so that XCurrency is calling its trustless mesh networking platform a “CoinJoin killer.” The company points out some key factors that separate XC from CoinJoin.

• CoinJoin is vulnerable to a denial-of-service attack: if a single node fails (or refuses) to sign a transaction, then every participating node has to re-sign. In contrast, by design XC’s mesh is continually and dynamically altering its topology, and has no trouble of this sort.
• CoinJoin has no intrinsic way of disciplining bad nodes, whereas XC’s mesh is capable of discovering bad nodes and excluding them from the mesh.
• Nodes participating in a CoinJoin transaction generally know the sender, receiver, and amount sent. And even though the blockchain does not record a link between sender and receiver, the information can be extracted from a node. XC’s trustless mixing conceals links between sender and receiver even from forwarding nodes, and its multipath fragmentation conceals the amount. Thus even if nodes are hacked, they cannot reveal sensitive information.

The idea behind trustless mesh networks can also help create a completely private internet browser, one which could replace the popular TOR network. Networks such as these are ideally suited to conceal IP addresses, simply because nodes mix content and are not able to discover the nature of the content, and also, the distribution of the network makes it highly resilient to attacks. XCurrency believes that this will serve as an excellent foundation for next-gen concealment of IP addresses. What trustless mesh networks create is an aspect of the internet that an increasing amount of individuals, especially those in the cryptocurrency space, find very important.

However, these platforms must also be mobile-friendly, an essential piece of the puzzle in order for a cryptographic platform to go mainstream. Early forms of trustless mesh networks in the mobile environment can be seen in technologies like mobile ad hoc networks (MANETs), which are self configuring and have the infrastructure to handle changes in signal strength or location. It may only be a matter of time before we are using trustless mobile mesh networks. However, this will require a continued focus on improving the privacy and mobility of blockchain-based technologies, one we are likely to see as more and more companies focus on blockchain 2.0 innovations. XCurrency appears as though they are focused on exactly that.

XCurrency’s hotly anticipated finalization of its private payments technology will allow nodes to earn revenue for trustlessly forwarding transactions.

XCurrency is set to release its finalised Rev 2 technology on Monday 15 September, and in addition to a yet-to-be-announced “coinjoin killer” feature, XC’s apps will gain the capacity to earn fees for the trustless mixing of transactions. This will incentivise users to bolster the network’s security, increase its capacity to process private transactions, and of course represent remuneration opportunities for XC users.

In contrast to other cryptocurrency projects, XC’s “Privacy Mode” is fully decentralised and does not make use of “supernodes,” as many coinjoin-based projects do. As a result, XCurrency gains true privacy without sacrificing security. XC-based payments are flexibly private, and at a maximum, reveal neither the amount sent, nor the addresses of the sender and receiver. Additional features conceal the user’s IP address and conceal the receiving address even from the sender. As such, XC represents true privacy for payments.

How it works

Early July 2014, XCurrency unveiled trustless mixing, a world-first in cryptocurrency design. For the first time, it became possible for a third party to forward information on one’s behalf without one being required to trust the third party. That is, the third party can either forward coins or not receive them at all. It is not possible for third parties to steal coins. In fact, forwarding nodes cannot even become aware of who’s coins they are forwarding. With XC, however, the idea of a single third party is inaccurate, as transaction-forwarding is distributed, making each participating node a “third-party” to the other nodes. The system is based on a proprietary protocol analogous to coinshuffle.

Multipath: fragmentation

Forwarding removes all record of a connection between sender and receiver; additionally, in order to conceal the amounts sent in a given transaction, transactions are broken into fragments, and each fragment is sent to different third parties to be forwarded. As such, neither the amounts nor addresses of a transaction are revealed. In fact, since private transactions are broadcast in the same way as normal transactions, there is no way to tell whether a given amount originates from the node sending it or has merely been forwarded – and neither is it possible to tell whether it is a fragment or a whole amount.

Expanding XC’s capacity

The trustless multipath mixing of Rev 2 was successfully implemented in July, but in order for it to scale to handle mainstream adoption, decentralized exchange, and a host of blockchain 2.0 apps, it will require massive capacity. However, since mixing can only be between nodes that are currently making private payments, this gives rise to two underlying scenarios that could limit this capacity:

1. There might not be enough nodes making private payments at a given time, causing transactions to wait or be cancelled.
2. Even though there may be enough nodes making private payments, their combined balances might not be sufficient to support forwarding all the fragments of a very large transaction.

To remove this limitation, XCurrency apps will have a new feature, the Xmixer, which has the capacity to forward transactions even when their users aren’t making payments. Xmixers will make use of the same protocol as Privacy Mode, except that they will collect portions of transaction fees as remuneration. In order to take advantage of this, a user would simply create a dedicated wallet from which to run an Xmixer. Then, to ensure that Xmixers contain enough coins to reliably sustain sufficient transaction volume, a minimum of 1000 XC must be paid into it.

Avoiding (semi-) centralization

A minimum balance of 1000 XC will create a healthy amount of buy-pressure on XCurrency, and so its price can reasonably be expected to increase as users progressively set up Xmixers. However, this scenario does not thereby create a small number of specialised nodes that perform mixing on behalf of the others. Thus XC is not analogous to that of a supernode-based system such as DarkCoin, in which only “masternodes” mix transactions, creating a semi-centralised “security chokepoint.” Instead, every XCurrency node – whether an Xmixer or a regular app – participates equally in private transactions and trustlessly forwards fragments. In other words, all XC nodes mix, but only Xmixers participate automatically in private transactions even when their users are not transacting. Furthermore, Xmixers do not require an advanced server setup and will be entirely user-friendly to run, further aiding the continued decentralization of the network.

As such, from Monday onwards, XCurrency will gain the capacity to scale its truly private payments technology without compromising the network’s security. Add to this its still-undisclosed “coinjoin killer” feature, and the future indeed looks bright for those who value privacy.

 

xc-official.com

 

On October 3rd at The SpinBin at 310 Dalhousie St., Ottawa-based not-for-profit Ottawa Charity Ping Pong will become the first organization of its kind locally to accept bitcoin donations. Resilient 21, a local Ottawa-based Bitcoin consulting firm, has set the corporation up using CAVIRTEX merchant solutions.

Many companies are turning to bitcoin as a method of payment due to its many benefits: it’s quick, it’s easy and it is less expensive than traditional payment methods. Charities who operate mostly on a donation basis rely on this source of funding to operate, making every cent valuable. CAVIRTEX takes .75% on transactions when converted immediately to dollars or 0% if kept in bitcoin, which is much less when compared to donations made via credit card, which range from 2-4% on average. It will also enable those who cannot be at the event to donate to the charity from any location. Alastair Mitchell of Resilient 21 notes, “long-term, accepting bitcoin is fantastic. It ensures that more dollars get to the people who need it, and it takes away from fees and administrative costs.”

Mitchell is spearheading the merchant acceptance of bitcoin in Ottawa and says that “merchants who use it absolutely love it.” At the charity event, which will be held on October 3rd, there will be a spot where bitcoin can be donated in person and they can also be donated online today at www.ottawacharitypingpong.com.

The charity is exploring the idea of accepting bitcoin for food and drink, although this has not been confirmed yet. Ottawa Charity Ping Pong is one of the most forward thinking non-profits in the Ottawa area, seeing bitcoin as a natural fit in expanding their donation pool. The organization has already started to receive bitcoin donations via their website, says, Mitchell, explaining that “any charity of any significance will soon be accepting bitcoin” because of these benefits. Ottawa Charity Ping Pong benefits four local charities: Youth Services Bureau; Operation Come Home; Do It For Daron; and Christie Lake Kids. For more information on this event, please visit http://www.ottawacharitypingpong.com/index.html

For media inquiries, questions or concerns, please contact Alastair Mitchell at [email protected]

“Show before you tell” was what I was told when I tried writing fiction at age fifteen on breaks from computer programming.  It’s often harder to engage than explain, something that the Bitcoin world hasn’t succeeded at. This will change with the Bitcoin comic.

Like almost everyone who reads Bitcoin Magazine, I have often struggled to explain my excitement and enthusiasm for Bitcoin to friends and family. I often thought that what we need is more compelling storytelling to share the idea of Bitcoin with a larger audience.

In many ways, it’s important to engage before you seek to explain. To show before you tell.

But the complexities of Bitcoin make it a difficult thing to show. That’s why I couldn’t have been more excited when I came across the Bitcoin comic.

Alex Preukschat’s team in Spain has been tirelessly working over the past year to produce the best single educational piece I’ve seen surrounding Bitcoin. That’s not because it’s the most informative, but because it shows first, and tells second.

One of the great things about storytelling is that it is engaging. One of the problems as I see it in the Bitcoin space is that we’ve done a great job of showing who many of the bad guys are in some sort of corrupt, centralized service, but we’ve done a bad job of storytelling. What do we have to say about “where do we go from here?”  So far no one seems to be able to paint a compelling picture.

Comic books and graphic novels are one of my favorite forms of storytelling because they show not only a clash between good and bad, but extraordinary and even super-human acts of heroism. To me, there is hardly anyone in recent memory worthy of such memory than Satoshi and no better way to present Bitcoin to the world than explaining it to the world in a story format.

The whitepaper may be a great entry point to Bitcoin for a highly engaged technical audience, but it is only in telling stories that we are able to engage more widely, and it is Satoshi himself who has left us the best story of all.

Although in many ways, Bitcoin Comic doesn’t fit into the core strengths of the Swarm network. It’s more of a classic educational project than cryptofuel or any of the other fascinating decentralized technologies that Swarm is currently seeking to facilitate.

But when I saw the Bitcoin Comic, I knew we needed to support it because our needs are the same as all people who have Bitcoins. Our salaries and support all came from the Bitcoin community, and we have a long term vision to help Bitcoin expand. We need material that you can give to your friends and family that will excite them, that will tell them a story that they feel that they can participate in.

One interesting aspect of this is the possibility of getting a mention in the appendix or even a cameo in some part of the book. These cameos are your chance to actually be a part in the story in a substantial way, not simply as an observer but as a participant.

Hasan Karahan of Blackhan.com was the first to support the Bitcoin Comic by getting a cameo in the comic, and had this to say:

“As an early Bitcoin adopter, I’ve always thought that Bitcoin needs projects like this to reach a broader audience. With the Bitcoin Comic I feel like we are at a major breaking point and I wanted to be part of this crucial moment.”

This isn’t just a crucial moment for some of us. It is a crucial moment for all of us, to create a story that resonates with a large number of people and can create positive momentum that will carry Bitcoin forward to broader adoption.

So far we’ve reached about a third of the fundraising goal for the Bitcoin comic, and I’d encourage each person to get at least one copy for themselves, and maybe a couple other copies as gifts for friends or family.

We need to tell a more compelling story to a wider audience. And Alex and his team have given us one excellent tool for doing just that.

At Swarm we have a modest salary of 5 BTC a month, and this month I’m taking 1 of those Bitcoin and putting it in the pot, so that, come Christmas time, my family members can all learn about the Hunt for Satoshi. I encourage you to do the same.

Participate at www.swarm.co/comiccoin

 

The New York State Department of Financial Services has released a proposal for regulating the use of cryptocurrency. It is informally known as “Bitlicense”.

Check it out here.

The puoposal is currently in a “comment period”, where many individuals in the bitcoin industry, including Circle CEO Jeremy Allaire and Bobby Lee, founder of BTC China, have expressed their opinions; they have claimed it to be an innovation blocker.

Many others, however, believe that this is a step towards legitimization for cryptocurrencies.

One individual, Tone Vays, a Bitcoin Analyst and risk analysis veteran on Wall Street, and creator of LibertyLifeTrail has helped provided some new insight on Bitlicense.

“I think the Bitcoin should get a chance and the benefit of the doubt to regulate itself in a free market as it is supposed to do.” says Tone.

The question that Tone proposed is: What if these same regulations were imposed on the Internet in its infancy? Where would it be today? More importantly, where would we be today?

To get a good idea, let’s hop on a time machine to 1994, the early days of the Internet. This is what it would look like if the New York “Department of Commerce and Telecommunications” released the “Intlicense.” Check out the full document here.

The IntLicense was started by Tone Vays and had significant contributions by Julia Tourianski of Brave The World.

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A Trip to the Embassy

There is a large, imposing steel door along a popular street, in the bustling downtown business hub of Buenos Aires. There are no visible markings, or signs, that would indicate to passers-by what is housed inside. And given the time of day, it may take a few buzzes before anyone answers the door. But when someone does get around to letting you in, you’ll quickly find yourself in the nascent epicenter of Buenos Aires’ burgeoning Bitcoin industry.

Once inside, one will find an environment that is frenetic but welcoming. After a brief introduction to some of the building’s chief organizers, along with a tour of the facility, I was a fellow citizen in good standing, in the world of Bitcoin. Introductions aside, I was left alone with my laptop and an Internet connection, and any contribution to the brave new decentralized world was mine to create. This atmosphere seems to be working.

Judging by the piles of construction debris and unfinished cabling strewn on the floor, one wouldn’t be inclined to believe that this is an active work center. The smell of drying paint permeates the halls, and the occasional moments of silence are quickly disturbed by the jarring thunks of carpenters at work. But if you poke past the construction crew, and peer into the rooms lining the hallways, you will find the who’s who of the burgeoning Buenos Aires Bitcoin scene furrowing an eyebrow, and furiously typing on laptops at their desks.

After climbing the entrance stairs, the first floor greets me with a large, almost-finished reception desk and a poster that reads “The people’s currency.” To my right is a small, 40 person auditorium, decorated with posters sporting similarly patriotic memes. Bitpay is on the first floor, though they’ve only barely moved in. Alberto Vega is the regional manager, and an active participant in the construction of the embassy. Though not one to shirk a guest, introductions are kept short. Alberto is busy man who’s typically in a meeting, or on his way to a meeting that’s about to start. BitPay’s business model in Latin America is very similar to the North American model, but their value proposition is more focused on the response time in which their customers are reimbursed in fiat, whereas in the North America their offerings are typically justified by the low fees that are levied. The time at which a vendor is reimbursed for payment via traditional credit card contracts here in Latin America is typically thirty days. However, when inflation climbs to rates as high as 10% in a thirty-day term such ‘confirmation times’ can cause a vendor to lose their entire profit margin by the time fiat payments are deposited into their bank. With BitPay, a vendor can choose to keep their money in Bitcoin to hedge against fiat-volatility, as well as to receive fiat within one business day of the time of purchase. Seemingly, this cash-flow advantage is a particularly attractive selling point in Argentina, and Alberto is quick to pitch it.

After climbing a second set of stairs, on the second floor I found the smaller, but more densely packed offices of BitPagos. BitPagos’ business model is a bit different than Bitpay in that their target customer is typically smaller businesses, for which Bitpagos will process credit card payments, and compensate the business in Bitcoin. This model is in many ways the opposite of what’s being supplied by BitPay. By processing payments in the United States, and compensating in Bitcoin, BitPagos can circumvent many of the onerous taxes and restrictions imposed by the incumbent credit card processors in Latin America. Judging by what I see on the streets, this seems to be a popular service. Coinmelon and ZipZap are also located on the second floor, though their offices haven’t been fully moved in yet. Also on this floor are a few small stealth-mode startups hacking away in their offices. And not far from them, are the beginnings of a hostel-like room with bunkbeds and a shower. The intent of the dorm room is to house the hackers and dignitaries from the international community during their travels. Just like any other embassy, I would suppose.

On the roof is a very large patio, with a wonderful view of the skyline. The Bitcoin embassy is dwarfed in its size by the financial service and IT consulting neighbors on either side, but the location does afford a wonderful view of the bustling city below. There’s a large and imposing IBM building to the east, and there’s typically a smoking construction worker hanging out and enjoying his break on the corner of the roof just in front of it. The roof will eventually host open-aired parties and events, along with a large barbeque area with which to feed its attendees.

Wandering the halls one day, I bumped into James. James is an American, a student from Tufts University, and he has been hanging around the center since construction renovations started. He’s studying international business, and practicing his Spanish language skills. Walking around the city with James, it’s fresh to see an American’s take on the nuances of culture and attitudes towards money here in Argentina. The relationship that Argentinians have with their currency is significantly more nuanced and complex than most any group of citizens in the world.

The Peso

Argentina is a free capitalist democracy, with many freedoms that their government is proud to showcase on its state-sponsored television. But seemingly, out of a growing desperation over its dwindling foreign exchange reserves, official policy over the the money supply have become increasingly onerous. Principally, Argentina has a single, official exchange rate that is used to determine the conversion rate of the local pesos to dollars.This rate is mandated by law for use with all banking, credit card, and official exchange purposes. Unfortunately for Argentinians, this official rate of roughly 8 pesos to the dollar is about 33% lower than the ‘actual’ free-market exchange rates that the rest of the world uses. There are many unofficial rates that are more accurately portraying the market’s view of the worth of the peso, but of the many competing rates, the “Blue” rate is the most ubiquitous. In fact, the “Blue” rate is so ubiquitous that it is featured prominently, each day, in the nation’s newspapers directly alongside the official rate. The spread between the official rate and the blue rate works to the advantage of the country’s treasury; it effectively acts as a tax on imports and exports, wherein the spread between the official rate and the blue rate is added to the country’s foreign exchange holdings. Adding dollars to the country’s reserves both provides the government with the ability to pay its debts in the dollars in which they must be repaid, but additionally, holding foreign currencies in its reserves is done in an attempt to prevent inflation from rising further. Whether it actually achieves this latter goal, is highly debatable.

The Peso as a Payment Mechanism

While walking the streets of Buenos Aires, and conducting transactions with merchants, you’ll notice that there’s more strangeness at work in the economy of Argentina than just exchange rates. Like other countries, vendors in Buenos Aires proudly advertise a long list of accepted payment mechanisms. These mechanisms include the standard Amex, Visa, and Mastercard logos we’re familiar with, and also list a number of competing mechanisms that Americans would not be familiar with (Visa Electron, Maestro, and Argencard being just a few). Unfortunately for patrons, these indicators are largely just a decoration. During the increasing times of uncertainty, merchants typically won’t accept anything but cash-money pesos. Similar to the US, when accepting credit cards, a merchant doesn’t receive their payments until thirty days have passed. While that’s an acceptable wait time in stable economies, for a currency which is inflating at a rate as high as 10% in a single month, this 30-day wait time on funds can destroy the merchant’s profits outright. As such, merchants are quick to declare that their credit card machine “isn’t working” during these periods of excessive devaluation, in an attempt to preserve their wealth.

Though cash money solves much of the cash-flow problems a vendor encounters on a daily basis, it comes with another set of problems. A visitor to Buenos Aires will quickly note that the money itself is of a notable sub-standard quality when compared to Euros and US Dollars. The largest denomination bill that’s printed by the treasury is worth about $8 US, and the smallest bill is worth about 15 cents. Because the denominations of the currency are so small, bills frequently change hands and deteriorate in their construction. Two-peso bills are often ripped and taped, and 100 pesos bills are very typically faded from so much use. The lack of quality in the currency allows for counterfeiters to more easily slip their bills into the market, and counterfeit 100-peso notes are very common. Even banks stumble on detecting counterfeits, and it’s not uncommon to receive a bogus note from an ATM or teller. Coins are rarely used, and typically all transactions are rounded to the nearest one or two pesos. Seemingly, the lack of coins is an attempt to reduce seigniorage costs on the part of the treasury. While the casual observer would suggest that “printing larger denominations” would solve these problems, the treasury is unwilling to do so, as that decision would be a tacit admission of the rise of inflation.

All of these policies, combined with years of mismanagement of fiscal resources, have eroded the public’s trust in the Argentinian currency, and citizens are reluctant to hold pesos for very long, let alone maintain a peso-based savings account of any kind. These problems further beget trust issues, and the peso’s cycle of inflation seems intent on continuing onward without an end in sight. In fact, prices in Buenos Aires change so often that it’s common to see printed menus featuring a blank space where the price should be. In this space will be a penciled-in notation of the current cost of the item, often with a dull coloration behind it caused by the erasings of multiple adjustments from the prior year.

In years prior, citizens were allowed to purchase dollars and Euros, at the official rate, in limited quantities. Typically these purchases were made under the auspices of a need to travel internationally, though in practice these purchases were made by citizens who had no other reasonable path to save their earnings. Though this program is supposedly still in existence, it appears to be largely a figurative gesture of equity by the central bank, as no-one seems to be able to qualify and actually use this program. Instead, as would be expected to arise in an underserved market sector, is a highly organized, albeit completely illegal, shadow banking industry.

The Peso as a store of value

There are two economies fighting in Buenos Aires: the black market economy and the official economy. Their territories are well established, and on the line between them, is Florida street. Driven by the blue dollar exchange rate, and the need to service a store-of-value for its users, a shadow banking industry has arisen around the fair-market denomination of the peso. All over Argentina, nearly everyone has at least some relationship with this black market economy. Principally, this market exists to facilitate currency exchange functions, though speculations abound as to the other customers and services of this system. US Dollars are the primary currency in this market, and they are most typically fed into this economy by international travellers. Upon arriving in Argentina, it’s made very obvious to tourists that the official exchange rate is not to be settled for. And, tourists are quickly funneled into “Florida Street”, which has plenty of obvious exchangers looking to make you a better deal than what you’d find at a brick and mortar exchange. These exchangers, affectionately called ‘arbuelitos’ (little trees) by the locals, are on every corner on Florida street and are shouting “Cambio!” into the air every minute or so, announcing their availability to onlookers. Once a tourist flags this person down, exchange terms are quickly negotiated, and the tourist is presented pesos in exchange for their greenbacks at a near-blue-dollar rate. These transactions are entirely illegal, and while police constantly patrol these areas and clearly witness these exchanges transpire, no action is taken on either the exchangers or the participants. The arbuelitos typically carry very little money on themselves, and between transactions, report and store their reserves at nearby ‘banks’ which operate clandestinely out of small un-advertised apartments or offices. These regional, black-market banks are called ‘cuervos’ (caves), and are the lifeblood of the black market banking system. The cuervos typically take the dollars earned from tourists, and sell them to local citizens who are in need of dollars as a store-of-value for their earned income. Argentinians will typically form relationships with specific cuervo operators, and make regular purchases of foreign currency as part of their relationship with the cuervo bank. This currency is typically hidden away at the Argentinian’s home, where the money will stay for as long as the holder can afford to keep it. The cycle is constant, and a mainstream, if not absurd, part of living in Argentina.

Enter Bitcoin

Standing against all of these improbable institutions, and working tirelessly on the third floor of the Bitcoin embassy, you will find the very ambitious Diego Gutierrez-Zaldivar. If Bitcoin needed a champion in the madness of the streets, it would be hard pressed to find someone as likable and friendly as Diego. By way of will, or mere talent, Diego is the emissary of Bitcoin that has appeared to represent the community to the general public, lawmakers, embassy tenants, and the world at large. Diego’s presence at the embassy is constant. And when he’s not pitching a presentation to investors, settling the fears of politicians, or explaining the workings of Bitcoin to citizens at a meetup, Diego can be found coordinating construction workers, welcoming international travellers, or even taking out the garbage around the embassy. Diego’s embassy is the culmination of a lifetime of experience in the Argentinian IT space and Diego is happy to share his vision with anyone who wishes to hear it. He’s well suited for the job, and it’s an infectious enthusiasm that he offers to everyone around him. His followers include all in attendance there at the embassy, plus the thousands of members in Bitcoin meetup groups all around Latin America to which he travels. Diego clearly sees Bitcoin as a solution for many of the problems that Argentinians currently deal with, but as the face of the embassy, and as its primary ambassador to the government, he has honed a reserved and practiced focus in the way he delivers his message.

Despite his enthusiasm, Diego is quick to suggest that Bitcoin has a long and hard road ahead of it in Argentina. While on the surface, Bitcoin in Latin America looks ripe for widespread and immediate adoption, once you look a bit deeper, the path towards adoption is far more complicated than hanging a welcome sign. Capital controls have worked in Argentina primarily due to a very effective border control, and where it has not worked, the entrenched black market is already working with dollars to great success. While Internet broadband rates in Argentina are amongst the highest in Latin America, there is still a large number of Argentinians who have been ‘robbed’ of their savings due to opaque banking systems that they do not understand. This pessimism has caused many Argentineans to be understandably wary of the fantastic claims being made by Bitcoin enthusiasts, who are still viewed as being a bit extreme, if not altogether indifferent to the cultural subtleties of the current regulatory frameworks. Boding well for Bitcoin is a government that has thus far provided no friction against the movement, as well as a large percentage of young adults who have been marginalized by their elders by not having the credit opportunities to own homes and cars, or to start a business. As international tourists begin to flood the market with Bitcoin, either by way of BitPagos, or their own bitcoin wallets directly, it would be expected that public acceptance and adoption will build. Perhaps thereafter, or in tandem, the large service-export sectors of the economy will similarly adopt and leverage Bitcoin for payment when working with international partners.

The Future

It’s Sunday in Buenos Aires, and the people at the embassy have long ago left to watch the World Cup with their friends and family. The plans for economic domination are on hold while a nation comes together to seek validation of their heritage, and their way of life. Baby blue flags are waving in the cars and on the backs of the citizens in the streets, and the absurdity of the daily grind is taking second place to the dreams of an entire nation aligned on a single goal. As the game begins, a microcosm of the surrounding economy takes the form of Visa advertisements on its sidelines and government-funded commercials advertising the creditworthiness of the Argentinian state between periods. Argentina loses, and the nation mourns. But come Monday, the embassy will be once again at work, its citizens tireless in their ambitions. The embassy is looking to stage its grand opening in less than a couple months, and there are still many contracts to hash out, and garbage bags to empty. Diego is down but not out. BitPagos and BitPay are deploying their newest codebase. And a construction worker enjoys his smoke break. Bitcoin is coming, and there’s plenty left to do.

Pictures from July of 2014 by Chris DeRose

 

September 2014

M.K. Lords

bitcoinnotbombs.com

[email protected]

FOR IMMEDIATE RELEASE

 

Coins in the Kingdom Brings Magical Internet Money to the Magic Kingdom

 (ORLANDO, FL) The College Crypto Network has teamed up with Jason King of Sean’s Outpost and M.K. Lords of Bitcoin Not Bombs to bring the exciting world of bitcoin to the happiest place on earth—Disney World. Coins in the Kingdom will be a two day bitcoin conference in Orlando, FL on October 4^th and 5^th followed by an escape into Disney World on October 6th.

The conference will bring together the brightest minds in the bitcoin space, but also feature activities for kids and educational workshops for those new to the technology. After hearing demand for an affordable, accessible bitcoin conference, organizers made sure to keep ticket prices low to encourage new attendees—you can attend the two day conference for only $60 with hotel rooms available for $99 or get a VIP package that includes entry into Disney World on the 6^th, conference attendance, a hotel room, and a Coins in the Kingdom t-shirt all for the price of one ticket to many other conferences.

The theme is a fun one as it will take place in the heart of Downtown Disney in the lovely Wyndham Hotel, and the conference itself will feature intimate panels that allow for more audience interaction. Featured speakers include Pamela Morgan, Jeffrey Tucker, Jason King, Charlie Shrem, Bruce Fenton, Paige Peterson, and Andreas Antonopoulos, and the topics will cover a wide range of possibilities with blockchain technology. Panels and talks will explore everything from best security practices to bitcoin media to how bitcoin can be used in political campaigns with Libertarian Party candidates Lucas Overby and Adrian Wyllie.

Organizers hope that the whimsical environment of Disney will bring bitcoin to a new audience and are playing up the notion that bitcoin is still seen by many as “magical internet money” which is a fitting name given the enthusiasm bitcoiners have for the cryptocurrency. Other functions of the Bitcoin protocol will be explored during this conference as many are unaware that currency is only the beginning of what blockchain technology offers, though there promises to be enough magical internet money sharing to make Scrooge McDuck envious.

For the full line up and to purchase tickets, visit: https://www.smore.com/jkzy5-coins-in-the-kingdom

Have you ever wondered if the price of bitcoins affects bitcoin business? Could this be a reason for businesses not to accept a volatile currency? Do sales plunge when the price drops?

I started doing a little investigating into whether it does or it doesn’t, and I was somewhat surprised by the answer.

Transaction volumes have stayed in the $50 million dollar range over the summer for the most. However, it is hard to tell if the transaction volumes are just people moving bitcoins from one wallet to another or if those transactions represent the exchange of goods or services.

Some businesses may suffer from price fluctuations more than others, mainly mining services. Miners make more money if the price is higher, so it makes sense that mining companies would see a decline in sales if bitcoin’s price dropped.

In my case, I use fiverr.com all the time. It’s great; I get transcription services done for articles, logo designs for my startup, even video editing. I do think about the price in the back of my head, but I figure it’s only five bucks. Plus, I prefer to use bitcoin rather than searching for a credit card and typing in a bunch of numbers. You never know if your computer is corrupted with a keyboard logger or if any company is going to have its data breached.

But that’s only five dollars, a trivial amount. What’s the psychology of consumers spending more? I asked the CEO of Bloomnation, an ecommerce platform for local florists, for his insight on consumer spending and price volatility.

“We have not seen much correlation between the price of bitcoin and the usage of bitcoin. Although price fluctuations cause some people to react, we fundamentally believe in bitcoin and its existence and have made no changes to strategy with bitcoin. Regardless of the price, we feel that this cryptic currency is a great solution for a global currency.” – Co-Founder and CEO of BloomNation, Farbod Shoraka

Customers using bitcoin aren’t that worried about price, because they are often encouraged by promotions. In fact, Bloomnation’s bitcoin users tend to spend 50% more on their purchases. Newegg was offering $100 off when you spent $350 or more with bitcoin, which caused a lot of people to spend their bitcoins.

I wanted to get a better perspective of the market at large rather than just one business, so I asked BitPay’s VP of Marketing, Stephanie Wargo, about price fluctuations and their transaction volumes.

She started off by mentioning that BitPay is “still doing well over a million dollars in transaction volume” a day. This is also due to the fact that BitPay has continued adding merchants.

“As more merchants come on board there’s more options. You get into that everything that you need everyday, the things that you buy online all of the time. Now you’ll be able to pay in bitcoin for those things. That’s just going to continue to keep transactions up and eventually turn into the price continuing to go up,” Wargo continued.

Now that it is past Labor Day, the financial markets are picking up; bitcoin will see new interest spurred by the investment community and new merchants accepting the currency.

“A lot of merchants have been working through the process now, in preparation of announcing that September-October timeframe to capitalize on the November-December spending season,” said Wargo.

Many in the community have noted that merchants converting their bitcoins to fiat and miners who sell their bitcoins have pushed the price downward. But, Wargo doesn’t think this will push down the price during the fall. More merchants are holding on to portions of their bitcoin using a 90/10 or 80/20 fiat to bitcoin rule and the acceptance by new major retailers will further legitimize the digital currency and take the price closer to the moon.

All-in-all, bitcoin transaction volumes in exchange for products will pick up no matter no what the price. Many merchants have been passing down their savings in the form of promotions. As bitcoin becomes just as easy to spend as other payment forms with payment processors and bitcoin debit cards, it will be used just as often.

Anyways, “it should be a very fun fall,” Wargo concluded.

Yes/No to Scottish Independence?

Scotland has recently been trying to gain its independence from the United Kingdom once again. Throughout the last thousand years there have been a few times that Scotland has tried to gain its independence.

In the early 13th Century the Scottish nobility were in dispute after Alexander III, the then King of Scotland, died young without leaving an heir as his three children had died within a short period of years previous to his own death.

King Edward I of England was invited by the nobility to help decide upon a new king. However, Edward betrayed the Scots and took over the country. What followed afterwards was the time of William Wallace and Robert the Bruce fighting for their country’s independence.

Needless to say, Scotland never truly gained its independence, and there were other wars throughout the centuries that tended to meet with failure – such as Culloden, where the Scottish highlanders were slaughtered, though fighting for the English monarchy this time.

And then we come to contemporary days, where such wars between Scotland and England would be inconceivable to most citizens here. This time, the ‘war of independence’ is being fought in the political arena.

There was previously a push for Scottish independence in 1979, which fell short of its required electorate voting numbers; it was at 32.9% when 40% was required. Then there was a second devolution referendum in 1997, which succeeded (with a 60.4% turnout) and granted the creation of a Scottish parliament with devolved powers.

With the 2014 referendum Scotland seeks to fully gain its independence from the United Kingdom. With 97% of eligible voters prepared to vote and countries small and large around the world watching, this may be one of the most significant political events of the early 21st century.

Now you may be asking: what has this to do with digital currencies?

Political Decentralization

Decentralization is an often talked about subject within the digital community, not only decentralization of the control of money, but also of political influence and power, to the betterment of humankind.

Some view the potential independence of Scotland as a strong move towards decentralization of political power.

It has been reported that a few select banks have made statements that they would likely be relocating their HQ office addresses if Scotland was to go independent with a Yes vote. RBS (Royal Bank of Scotland) and Lloyds are fuelling the scaremongering that seems to have been the primary tactic of the No (Better Together) campaign. It should be noted that these banks are already registered within the UK and moving their headquarters’ postal addresses does not affect their corporate tax liabilities, and that RBS has already stated that no jobs or operations would be affected by the movement of their HQ postal address.

The No campaign has stated things along the lines of “Who will defend you (Scotland) if you are attacked?” giving off the implication that the UK would just sit back and watch if Scotland got invaded. Whilst we are simultaneously ‘assisting’ in Iraq, Ukraine, Syria, Afghanistan, but we would not help our closest neighbours who have been part of us for nearly 1,000 years and are our 2nd largest trading partner (behind the US).

The argument for the Better Together campaign often comes back to financial inclusion, or rather, the threat of financial exclusion would be a better description of how the campaign has been run.

Yet, Scotland has the resources (oil), of an estimated £1.5 trillion, and can easily, financially, go it on its own as Alex Salmond, First Minister of Scotland, recently stated to derogatory comments in a live conference about the very recent share prices of Scottish businesses.

“Look at the last 3 years of share value growth, not the last week or two.” ~Alex Salmond.

If an independent Scotland flourishes and grows economically stronger, then will other lands and people seeking their independence from their relative masters grow even more determined to seek independence?

With Scotland’s independence a primary question is the usage of the Pound as their unit of currency, with the potential of numerous states and once kingdoms breaking away, and in the future a proven viable and calculable economic resource (alternative coins in digital currency), able to be created for a given government, then we will see the decentralised political arena fuelled by the emerging decentralised digital currency sector.

And such countries, if they choose to create their own economic backbone, may be able to create predictable alternative currency using the power and foundation of bitcoin network. There is even rumour that northern cities and south-western counties within the UK are watching with keen interest, as these places have continuously been drained of their finances to feed the south-east, specifically London.

If Scotland can gain independence and grow financially strong, provide jobs, rebuild their economy, by breaking away from the control of Westminster, then why can’t they?

As a note, Food banks (where you can ask/beg for food when you have nothing) never existed within the UK 10 years ago; now they are everywhere and every year the amount of people in desperation has increased substantially from the year before.

“13 million people live below the poverty line in the UK” ~ The Trussel Trust

The UK only has a population of 64.1 million.

It is too early to tell, but the makings of the future are bubbling away in the pot. What comes out of it we will likely know within the next 5-10 years.

The Scottish Independence referendum will be on Thursday the 18th of September.

Kryptokit, the company that brought you RushWallet, announced the addition of RushWallet Fundraiser to their list of product offerings. This feature may prove to play an important role in the future of cryptocurrency crowdfunding efforts. When paired with Kryptokit’s RushWallet, which uses HTML5 and allows users to create a secure bitcoin wallet that is compatible on any device, Fundraiser makes it easy to contribute to any bitcoin crowdfunding campaign. In addition to these services, the company also offers a Chrome Extension that provides wallet access, Bitcoin news, encrypted messaging and a Bitcoin directory.

Unlike many popular crowdfunding platforms, RushWallet Fundraiser offers a wide range of features that are unheard of in the industry. What is likely to be most popular and a big selling point for many looking to raise funds is the fact that the service is fee-free, meaning that Kryptokit does not charge fees or take a percentage of your fundraising. Everything that you raise is yours. Additionally, there is no end date. This means that organizations like Sean’s Outpost can hold a continuous fundraiser for their efforts and share it with whomever for however long they wish.

With no restrictions on the type of project and no need to create lengthy videos or descriptions, the platform is very simplistic and allows users to create crowdfunding campaigns in less than a minute. It seems that the people at Kryptokit are on a mission to eliminate barriers to entry and to make crowdfunding fun, decentralized and easy.

In combination with the product launch, popular non-profit organization Sean’s Outpost became the first to use the RushWallet Fundraiser platform with a goal of raising 20 BTC to upgrade their recently acquired 11,000 square foot building, known as Outpost Thrift, which opened in January. The space will be a place for all homeless and disenfranchised individuals throughout the Pensecola area and will allow Sean’s Outpost to continue to provide a high level of service and support to those in need, and in turn, spread the word of Bitcoin.

The organization obtained the building after floods damaged the initial headquarters, the Bitcoin Homeless Outreach Center. The building was previously a thrift shop before becoming Outpost Thrift. The owner also donated all unsold merchandise to the cause, giving Sean’s Outpost a good start in its new location.

Sean’s Outpost on the planned upgrades and services:

“An enhanced electrical system will allow Sean’s Outpost to convert part of the building into a “wanderers” maker space. In that space the homeless and disenfranchised will have access to a wide range of tools and equipment. They will be able to learn new skills, practice a trade, or simply have a place to fix a broken bicycle chain. In addition, the upgrades will bring meeting and classroom space to the building and greatly enhance Sean’s Outpost’s capacity for teaching life and survival skills to the less fortunate of Pensacola.”

Kryptokit Fundraiser could completely alter the crowdfunding landscape. The company has created a platform that simplifies fundraising, with no fees, no restrictions and no need to spend hours creating media and content. Its wide range of uses remains to be seen, but it has filled the missing piece that has existed in fundraising since the beginning: a fast, easy and secure way to raise bitcoin for your business, charity or community projects. Can RushWallet Fundraiser change the way we crowdfund?

 

This article is a guest post written by Valery Kholodkov, Lead Researcher at AVG Innovation Lab in Amsterdam. Valery is on the forefront of AVG’s privacy-related research and he is constantly looking into how emerging technologies impact user privacy.

It’s no secret that Bitcoin and other cryptocurrencies are showing us brand new opportunities in the digital industry and the way things can evolve there, and not only that. If you attended the annual Bitcoin conference in 2014, you may have noticed plenty of enthusiastic and curious faces from all kind of industries that are looking for the answer to what Bitcoin and blockchain technology can do for them. With Bitcoin we’re going back to 1990s: huge opportunities are seen on the horizon and in my opinion it is very encouraging.

Ideas are in the air, but so far they still need to be read between the lines and implementations are immature. Bitcoin, however, is a serious technological advancement and the greatest thing about it is that it is not just a paper project, but it is out there and growing. This article is to separate the fact from fiction and see what this technology could mean for us now and the impact it may have in the future.

There is a set of innovations that Bitcoin brings along that makes it more than a new kind of currency.

New privacy model: While it has only been touched upon in the original paper by Satoshi, I see the new privacy model as one of the most important contributions to the digital industry. In this privacy model all the data and all the transactions are public but links between identities and transactions are private. Instead of securing the ever growing digital environment, Bitcoin’s privacy model focuses on securing links between identities and the rest of the digital environment. This is a completely different way of interacting in the online environment and it is going to change the way we do things in the future.

With the rise of the digital industry we see the rise of significance of a digital identity. In the last decade online businesses discovered the value of digital identity as a fuel for sales and monetization machine.

How did it happen? It started with advent of targeted advertising and struggle for higher ROI, with targeted advertising and personalized web content suddenly becoming particularly valuable as it enabled targeting engines to use context to target consumers better in turn leading to higher ROI. Obviously personalization strongly depends on a user’s identity and what we know about it, so personalized web content played the role of bridging the gap between targeting goals and digital identities until this bridge was removed with advent of behavioral targeting, which no longer uses personalization as a proxy.

Today you no longer specify what content you want to target, but what audience you need, and those who have it sell it to you. The digital identity is being exploited for profit but due to its nature this identity economy is inherently inefficient.

The new privacy model is a way to align interests of online audience and online businesses and get rid of all these surrogates. This will make the online economy more accessible and more enjoyable for us while also making entry easier for online business allowing them to capitalize on upcoming opportunities.

Another aspect of the rise of the digital identity is security. Most of web services today are not designed to protect your identity. Due to the nature of HTTP your personal and identifiable data is transferred back and forth between you and servers around the world. This makes it susceptible to theft and interception. Copying personal data is ultra-cheap. The only way to protect it from leaking is if it never reaches the network to begin with. The fact that most of the interactions in World Wide Web happen inside servers is what makes it so leaky and this makes it impossible to solve the problem by simply patching the holes. We have to redesign the Web from the ground to make it privacy-friendly.

The Bitcoin privacy model (along with anonymizers like Tor) are so far the most significant step in that direction.

Suitability for microtransactions: The Web as a universal ecosystem always missed a universal currency. Online services are universally accessible, but the financial system is still significantly fractioned. This creates a misbalance; today it’s easier to sell than in the pre-web era, but not necessarily easier to settle the trade.

What happens if entry barriers fall on the payment side? Perhaps a paradigm shift of a similar scale and new entrepreneurs rethinking existing business models. In order to implement this we need a payment instrument that can do two things: handle micropayments and make transactions irreversible. This is where Bitcoin comes in.

As an example, let’s consider the case of translation software. In the past you used to buy translation software and install it on your computer. You paid a price set by the developer. This price was relatively high because the developer needed to cover huge development costs that he had already incurred. This created a relatively high entry barrier for consumers who wanted to use the software, but weren’t sure they would consume enough to justify the price, i.e., issue enough translation queries.

Once the digital services moved online the situation changed drastically. Now it was suddenly possible to issue as many queries as you want without buying the entire product. Consumers no longer had to think if they shoot enough translation queries, hence the barriers were gone.

Blockchain technologies seem to go even further than that. The blockchain is capable of accommodating transactions that go beyond financial nature. For example, Twister (http://twister.net.co) is a decentralized microblogging platform. Twister uses the blockchain to guarantee the uniqueness of a user without the need of a central authority. An unsolicited message that must be shown by all clients (i.e. advertising) provides incentive for joining the block generation effort.

NameCoin is a cryptocurrency that also serves as a decentralized DNS with the ability to register domains and later change ownership. NameCoin blockchain contains both financial transactions and domain registrations.

If we combine these capabilities of the blockchain, can we get an ability to create microtransactions-fueled digital ecosystems of any kind? If yes, this will be a huge leap in the way we do business online. We build services so that they fit into existing ecosystems, such as banking systems and distribution channels. Wouldn’t it be more effective to design an ecosystem to solve a problem and to program it to be self-propelling and self-sustainable in the same way Bitcoin is programmed to automatically regulate the money supply rate?

These are the opportunities that microtransactions and the blockchain open up for us to explore.

Decoupling information from the medium: One of the drivers of the cloud-based solution is the fact that consumers are interested in files and not file systems. In other words, it no longer matters where your data is stored, as long as it is properly organized and universally accessible. File systems are thus losing their relevance more and more and blockchain technologies are able to bring this to the next level.

With the blockchain you no longer need the cloud to store your data. The blockchain can perfectly store your account and mutations of your account without requiring any central authority. Your account becomes stored everywhere around the network but nowhere in particular.

When information is stored everywhere and nowhere in particular it becomes decoupled from the medium. It no longer matters where the source of information exactly was and where exactly it is stored now. Wherever you are and regardless of the kind of circumstances you are in, if you have a connection to the Bitcoin network, your keys and a device that is capable of interacting with the Bitcoin network, you can make a transaction on the spot and consequently enact your digital funds.

Now that is a serious advantage especially if we look how badly our ability to use our digital resources depends on reliability of third parties and cracks in agreements between organizations of various kinds.

These are the opportunities that are currently seen beyond the monetary nature of Bitcoin. They are big enough to create a new infospace, like the Web did in the 1990s, but it’ll require dedication and creativity and it’ll see its own heroes. Exciting times are ahead of us!

 

Valery Kholodkov

AVG Innovation Lab

 

After a very successful Central European Bitcoin Expo in Vienna, the new opportunity to build, expand your business partnerships, meet new people and enjoy atmosphere of special event is coming. The same organizers are preparing a remarkable event BitcoinExpo 2014 in Shanghai.

The Expo is going to take place on 19th – 21th September. The Expo has already many confirmed speakers such as Jean-Marie Mognetti, Aaron Koenig, Leon Li, Vitalik Buterin, Martin Westhead, Brett Stapper and many other special people from the world of Bitcoin and Digital Currencies. One of the main aims of BitcoinExpo 2014 is to break new ground for Western companies in China by connecting them to local key players and securing their exposure within the local market. The largest conference and expo acts as a center for prominent local companies to establish valuable relationships with important partners from overseas. BitcoinExpo is focused on knowledge and Bitcoin community.

One of the new big players is also BUMarket, whose aim is to “help network business people all around the world to get future”, as written on the official website. BUMarket is enriching the family of BitcoinExpo and will be also a more strategic partner for the event. Attendees can also look forward to other partners such as Black Arrow, MaCoin BTC ROBOT, SatoshiLabs, Yuanbao Seoul Bitcoin and PRYPTO.

The early birds are sold out; however, there is a good news for you that there are still a few tickets left. If you want to be a part of this unique event do not hesitate to buy them as soon as possible and spend a great time with business partners, investors, entrepreneurs, exhibitors, enthusiast and also the organizers. See you in Shanghai!

 

Breadwallet is the first bitcoin wallet for iOS that offers a direct connection with your assets; no faulty servers to get hacked or go down.

SAN FRANCISCO, CA – September 10, 2014 – Now available, breadwallet is an iOS bitcoin wallet app designed to make sending and receiving bitcoin simple and safe for everyone, not just bitcoin experts.

Breadwallet uses “simplified payment verification,” or SPV, to connect directly to the bitcoin network, removing the need for trusted servers while maintaining fast performance on mobile devices.

One of the first deterministic wallets on the market, breadwallet can recover all your bitcoin addresses and balances from a single unique phrase associated with your wallet. This phrase eliminates the need for continual backups and can restore your wallet on another device if yours is ever lost or broken.

Breadwallet is open source and takes advantage of all relevant iOS security features, providing protection against malware, browser security holes and even physical theft.

“With breadwallet, I wanted to build a beautiful and intuitive bitcoin wallet that real people can use safely.” said the creator, Aaron Voisine. “Bitcoin was made to revolutionize our monetary system, and anyone who wants to participate should have the ability, without fear.”

Breadwallet is available for free on the App Store. For more information on breadwallet and upcoming features like an Apple Watch version and support for Touch ID and NFC, please visit breadwallet.com or the github repository voisine/breadwallet.

Breadwallet is developed by entrepreneur and mobile app developer, Aaron Voisine. In addition to his contributions to the bitcoin community, Mr. Voisine was the iOS lead at Yammer Inc., senior iOS consultant for Banjo Inc., and co-founded Lightt Inc., a social video sharing service.

 

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Press Contact:

Aaron Voisine

(408) 905 6321

[email protected]

Bitcoin: Answer to Ancient Legend?

 

By Mark Rees

The Philosopher’s Stone

Centuries ago the term “Philosopher” was defined as: those that sought for the truth in all things. The prophesied Philosopher’s Stone is not a stone at all. The term “stone” is used metaphorically much like bitcoin is not actually a coin. It is claimed, in ancient legends, to be the source of enormous wealth and contains the ability to extend life itself. Legends that speak of this mysterious substance are found in many cultures by various names dating back to the time of antiquity. The life-long quest for its discovery has consumed many centuries. Countless lifetimes were spent in the quest of its discovery, second only to the quest for the Holy Grail. Are the legends and clues held in volumes of centuries-old manuscripts only an illusion? Or is it possible that there are hints of truth or science buried inside?

Hundreds, or perhaps thousands, of the best scientific minds throughout the last thousand years spent much of their efforts in pursuit of the Philosopher’s Stone. The first mention of the stone has been traced back over 2,000 years ago. A documentary episode from the series Decoding the Past was presented by The History Channel in 2006 called  “The Real Sorcerer’s Stone”.  Several experts were interviewed regarding the legend including Professor Lawrence M. Principe from the Johns Hopkins University, who said:

“Think about someone who can make gold. They could rule the world and tear down old social and political structures.”

Professor Principe also explained that the legend told of the unbelievable quality that could extend the life of anybody who consumes even a part of it.

The Scientists

 

 

 

 

 

 

 

             

History credits Sir Isaac Newton for inventing calculus, defining the first laws of physics and inventing the first reflecting telescope. This was in addition to being in charge of the Royal Society, the Master of the British Mint and creating a new fixed gold standard for currency and world-wide commerce. Not as commonly known was that he also secretly dedicated an even greater portion of his life (by some accounts over one million words) to the discovery of the Philosopher’s Stone using the secret science of alchemy. In this, he joins a long list of some of the brightest scientists of his day. This discovery was made, perhaps ironically, by the father of Keynesian Economics – John Maynard Keynes. He purchased Newton’s volumes in the 1930s. The relatively secret non-published works relating to Newton’s efforts in alchemy were hidden away by the Royal Society over a century earlier.

The mystery scientist of the modern era credited with creation of the Bitcoin protocol and network as well as bitcoin the currency is known by the pseudonym Satoshi Nakamoto. There seems to be no indication that he was trying to create or discover the Philosopher’s Stone. The theory of why the name Satoshi Nakamoto was used was explained by computer scientist, Ted Nelson. Satoshi in Japan means “clear thinking wise”. Naka is “ inside” and Moto is “foundation”.  In total, Nelson interprets the name as:  “I am one who sees in depth”.

Alchemy – The Cryptography of the Past

With the discovery of elements and metal mixing, concoctions of every sort were combined chemically, and the legend of the Philosopher’s Stone evolved into the idea of turning lead, iron and copper into gold. Through the gained knowledge of these activities and processes, alchemy became the precursor of modern chemistry and the scientific method. Many believe the science field of chemistry today owes its existence to the quest for the Philosopher’s Stone.

The kings and government leaders in centuries past were fearful that if the Philosopher’s Stone were to be created it could devalue or destabilize not only their own currency and riches, but could also disrupt the value of all commerce. Because of this, they outlawed the research and the practice moved underground, but continued. Although at this same time, many of the same rulers secretly hired alchemists to create the Philosopher’s Stone for themselves. Finding the recipe was considered to be the Magnum Opus or “Greatest work” of one’s lifetime.

 

 

 

 

 

 

 

As alchemists were creating mixtures and compounds that hadn’t existed before, their powers were seen by the common people to be magic. As in all things deriving from the nature of man – there were good and benevolent men who created medicines and advanced the science, but there were also scammers, tricksters and poisonous murderers who used some of their knowledge for dark pursuits of the occult.

Because of the restrictions by governments, the scientists communicated with each other in code and riddles. This was the cryptography of their day. They also communicated in allegory stories and symbolism. These symbols preceded the table of elements.

Cryptocurrency – The Alchemist of Today

In the modern era, the financial cryptologists have similar goals: the power to create wealth that must be done in secret because those in power would be fearful of the loss of their power over money. Cryptologists communicate in secret using codes as well. They applied and bettered their tradecraft for 25 years. Essentially what the cryptocurrency creators sought was the technology and formula to create gold 2.0 based on cryptography. The ability to harness this technology is essentially the modern day Philosopher’s Stone – although they may not have realized it in those terms at the time.

Crypto Currency “alchemists” would include Adam Beck , David Chaum and Nick Szabo among others. They also wrote in riddled coded language called C++ and PGP that few understand outside their exclusive community. Governments are extremely concerned about the ability of cryptography and those who practice it as it exposes their dirty secrets. The arts and knowledge of cryptography allowed Edward Snowden and Julian Assang to expose unpleasant truths about secret government abilities.

 

Some governments of the world are still fearful that digital currencies such as “Gold 2.0” could make their national currencies devalued. Is there a parallel from today’s leaders to those of the ancient past? Could bitcoin disrupt government currencies in ways that parallel the ancient? Is this just simply history repeating itself or do these actions and reactions transcend through time?

 

 

 

 

 

 

 

 

 

 

Is Bitcoin Really the New Gold?

Bitcoin is commonly compared to gold and holds many advantages. It has economically intrinsic qualities that go far beyond that of the relative uselessness of gold itself as it can be used all over the world and can be publicly accountable. Bitcoin currency has so many common qualities of gold that it is often called the ‘digital gold’, or even more commonly, ‘gold 2.0’.

Bitcoin can be used by anybody with an internet connection to conduct private transactions with anybody else in the world. If required, it can be used discreetly from governments’ control in the ways alchemists of old continued the science while staying out of government interference in countries that required discretion. Digital currencies that adhere to the core principles of bitcoin are increasingly viewed as the future of money. Digital currency may outlast and transcend those governments that would try to ban it as more people discover the freedom from personal privacy invasion. The power described for a Philosopher’s Stone may be more powerful than any one government can control. But like the old scammers and tricksters that used alchemy to remove people from their wealth, bitcoin too has had the same kinds of unscrupulous people that will attempt defraud owners of bitcoin. Some things never change.

How is bitcoin created?  Where is the magic?  Strictly speaking bitcoin is added into existence as an incentive to those running the computer hardware that processes and collectively verifies all of the transactions on the world-wide network. The hardware that does this is transferring energy and electricity by using incredible computing power to maintain the network and in effect create gold 2.0. The computer hardware is constructed with circuits, on motherboards using copper connections inside metal cases. Most of the typical computer is derived from iron, copper and other base metals. In this, one might argue that it continues to fit the descriptions of legend.

Peter Marshall, historian and author of the book entitled “The Philosopher’s Stone”, describes the prophecy regarding the location of the Philosopher Stone as “being everywhere and nowhere at once”. If asked today where bitcoin exists – could there be a better answer? He also says it is complex enough for the smartest men, but simple enough to be considered child’s play. Programming bitcoin took incredible brain power, yet any child can click “buy with bitcoin” on a web browser to use it. Do current scientific beliefs and the laws of matter and motion make such quests for the Philosopher’s Stone now seem silly?

Could the ancient prophecy predicting the Philosopher’s Stone be true? Did Satoshi Nakamoto discover or unknowingly create the Philosopher’s Stone after most of the world quit believing in ancient legends? Bitcoin surely can’t be THE Philosopher’s Stone because it lacks the other vital ability listed in the ancient text: the ability to extend life, right? As was mentioned before, even one small part of it could extend one’s life. That of course could never happen with bitcoin.

Except… it did.

On August 28, 2014 –Hal Finney was declared legally dead. An early bitcoin supporter and adopter, he spent (consumed) some of his early mined bitcoin to purchase equipment and storage needed to put his dying body into cryopreservation. His intention is to be awoken once a cure for ALS (Lou Gehrig’s Disease) is found, thereby extending his life.

Hal made many contributions to the computing world and bitcoin in general during his life. Did his final action complete the final requirement that would allow us to know and recognize bitcoin as the Philosopher’s Stone? Did fate set his destiny so the Philosopher’s Stone prophecy could be fulfilled?

 

Could one predict the ramifications of the possible connection between The Philosopher’s Stone and bitcoin if word of this spreads through a Twitter viral firestorm? Has the nature of human emotion and desire for wealth changed that much in the last 2,000 years? If only one in a thousand people find this theory plausible, the resulting rush to own a piece of the legendary Philosopher’s Stone would create a world-wide historic event remembered throughout the ages. Would the insatiable desire of people to behold the promises of the Philosopher’s Stone be much different today than the last 2,000 years?

People will believe what they choose to believe and follow that which gives them hope. Even the most skeptical, which might view these connections and observations as ridiculous and would put no faith in fate, prophecy or legends…might pause and consider how many of Earth’s seven billion people might get a tingle in their spine and will choose to believe. After all, that’s how money itself works.

 

We believe.

 

 

 

 

Bitcoin 2 Business main Focus Will Be on Bringing Together Entrepreneurs, Investors, Start-ups and the Most Interesting Personalities in the Industry

Brussels will hold the very first Bitcoin 2 Business (B2B) Congress on 16th – 17th October. It will be the first event with a B2B format meant only for entrepreneurs, investors, VCs and companies. Agenda will be also dedicated to support Start-ups and their projects.

“Boost your startup and get the attention your idea deserves!” is the motto for the Start-up show. Congress is a perfect chance to promote ideas by presenting it in front of well-known entrepreneurs, investors and VCs in Crypto community. Talk to the investors, get the exposure via media partners and expand your business in the Bitcoin industry. To apply for the show, buy at least one Congress ticket and apply with your project to [email protected]. By the end of September, the organizers will choose one Startup with the most interesting project that will also get an exclusive Promotional Meeting Desk worth 2 000 EUR at the Congress for free!

“Part of our Agenda will be dedicated specially to Start-ups. They will have time to present their projects and approach the investors” says the organizing team and concludes “Start-ups in any stage of development are invited!”

Start-Up show is definitely a very interesting added value to the Congress. Among other confirmed speakers aka Topic Supervisors you can find well known personalities and Bitcoin ambassadors such as Matthew Roszak, Moe Levin from BitPay, Vitalik Buterin or Jacob Hansen from CrowdCurity which recently raised $1 Million to Crowdsource Security for Bitcoin Startups and many others.

Agenda is now available on the official Congress website. Topics are designed to cover the most important issues concerning monetary future, business, merchant adoption of Bitcoin, regulation, investment etc. Every topic is expected to raise debates and some will include panel discussions to make sure we get the general point of view.

So if you are a company, entrepreneur, start-up or investor looking for great networking and to meeting the key players from the industry, don´t miss your chance to be a part of this amazing and first of its kind event and get your ticket as soon as possible while the Earlybird prices last.

 

Background

Few technologies have been as socially disruptive as the Internet. Before computers, reaching a wide audience required control of printing or broadcasting centers. These have been replaced by home computers, which people worldwide are gaining access to at a phenomenal rate. Message boards, blogs and other websites enabled the two-way flow of information on a massive scale, and through the use of liberating new innovations, we can decentralize the Internet completely.

Peer-to-peer networks are the best example. Previously, files were distributed via dedicated machines designed to handle a massive number of requests; now, one can share files to just a few “peers,” who share it to a few more people (and so forth), until anyone can gain access via a branching web of connections. Who has which chunks of data is tracked by “torrents,” which can be run by clients like FrostWire to upload and download the desired files. Without a central server to confiscate, it’s impossible to find and remove “bad” content or evidence of corruption.

If we use encryption and make these networks complex enough, it can be almost impossible to trace the source of data, rendering it very difficult to block access to “undesirable” news sites and content. This property of P2P networks is utilized by programs like Tor, which funnels data (most commonly webpages) through a long and confusing series of nodes. This makes finding and punishing those who break censorship laws a nightmare, resulting in the further erosion of central authority over online communication.

Now with the advent of cryptocurrencies like Bitcoin, we can use decentralized networks to send money, as well. Instead of music, video or similar files, we send transactions that transfer ownership from one user to another. Unlike file-sharing networks, however, where ownership is not a concern, this required the advent of blockchain technology, which can keep track of who owns what without the need for an arbiter or judge. Besides that, the underlying concept and digital architecture are identical.

As new inventions allow more things to be transmitted over the Internet via peer-to-peer networks, the scope of this decentralization will only increase. Despite these improvements, however, most online traffic is still handled by central servers, and almost everyone on the World Wide Web uses the Domain Name System, which is controlled by an American non-profit corporation. The physical infrastructure is composed mostly of wires owned by monopolistic telecom businesses, and if we want to decentralize society any further, these shackles must be removed.

 

Software

Cryptocurrency has already done a great job of decentralizing the domain name system. Using Namecoin, one can register .bit domain names directly on the blockchain; whomever possesses the private key in control of the domain name provides the IP address to which it forwards. This is a step in the right direction, but only liberates one aspect of the web, ignoring key problems like how online data is stored and delivered. We need a decentralized digital architecture that can handle all online traffic, not just file downloads and domain name forwarding, or else our dreams of a decentralized Internet are just that.

Peer-to-peer technology can solve this problem, as well: if it’s possible to store and send files or money using a P2P network, it should be possible to do so with any type of information. Rather than using a central server to distribute things like web pages, application data, or files stored on the cloud, we can download that content in pieces from various computers on the P2P network. Constantly-updated copies of this data will be distributed across all of these peers in encrypted form, ensuring safe, accurate, and continuous access.

 

The first of these systems is called MaidSafe, and its development began years before Bitcoin went public. Anyone running this open source program will become part of the SAFE Network, some of which will volunteer to become “vaults.” All data on the SAFE Network is stored across these vaults in an encrypted format, which can only be broken using the private key that uploaded the data, or one to which permission has been granted. The network stores a total of exactly 4 full copies of this data at all times, and randomly assigns processing tasks like determining and validating the locations of these chunks to all of the nodes. Nearby nodes are organized into groups, which watch one another and will eject a node that misbehaves.

Nodes are incentivized to become vaults by Safecoin, which is rewarded in proportion to how much resources they contribute to the network, most of that being storage space. You consume safecoins by using resources, and they can be used to purchase goods, services, or other digital currencies. Unlike cryptocurrencies, however, they are not based on a blockchain; account balances are stored on a ledger distributed across network vaults along with the rest of the network data. They can be exchanged via the Mastercoin protocol.

Theoretically, one could host or operate any type of website or application this way. One of the most notable applications to take advantage of this opportunity so far is the API Network, which provides a new means of distributing and calling APIs. For those who aren’t yet familiar with APIs, you can learn about the process in one of our previous articles. Although its native coin–XAP–is stored on the Bitcoin blockchain via Mastercoin, the API Network uses the SAFE Network to store API data and call it upon request, which rewards XAP to the API provider. This decentralizes access to things like Google Maps, cryptocurrency price data, and various useful web apps.

 

 

Storj is a more recent open source platform, and the winner of the Texas Bitcoin Conference Hackathon. Like MaidSafe, it enables a peer-to-peer network that can store and transmit a wide variety of information. Nodes support the network by running the DriveShare application, which rewards users with Storjcoin X for storing encrypted chunks of data uploaded to the network. They operate on the Counterparty protocol on top of the Bitcoin blockchain, which allows them to be exchanged for other coins, used for commerce, or spent on other Storj applications.

The main application for which they’re famous is called Metadisk, and it completely decentralizes cloud storage. Instead of uploading files you want to store online to to a central server, they’re uploaded to the Storj network and stored by those running the Driveshare program. If you’re not running Driveshare yourself, you’ll have to earn Storjcoin from elsewhere to pay for this service; compared to competitors like DropBox, however, the price is insignificant. As a bonus, your information cannot be accessed by third parties without your consent–something which DropBox cannot claim.

Being a post-Satoshi platform, it should come as no surprise that Storj uses the blockchain to keep track of all this. Bitcoin “2.0” platforms like CounterParty allow one to embed more than just financial information in transactions, storing all kinds of data in blocks. Similar to how Namecoin can keep track of who owns what domain name, and projects like Ethereum can assign other property and assets, Storjcoin X stores information about who can access what data, and where it is at any time. Transactions are validated by Bitcoin miners who choose to register CounterParty transactions in return for a small fee, thus avoiding the problem of consensus.

 

Hardware

These technologies will remove the need for centralized networks and servers. We now have a new way of thinking about how the Internet should work, and all of the protocols necessary to make that a reality. One thing that the open source and hacktivist communities cannot easily replace, however, is the physical infrastructure itself: the wires that carry the data sent between nodes are still owned by corporations and governments, which can monitor, restrict, or block your online activities. Even if you’ve managed to build your own cable lines, if you want to communicate with the rest of us, you have to go through one of the central hubs on which most of us rely–even if we’re all using Storj and avoiding central servers.

 

 

The answer lies in mesh networking. The router that currently handles all of your online traffic operates under the assumption that it’s part of a hierarchy: it forwards your requests to and from the machine one level above it, which routes it to and from either another nearby machine or an even bigger hub, which routes massive amounts of data. Instead, the protocols behind mesh networking assume the computers are all connected to each other–either directly or through other other Internet users–without any hubs in-between. A diagram of such a network would look similar to the one of peer-to-peer networks depicted earlier above, except instead of being a virtual network, it assumes that form in reality.

No node is likely to be overwhelmed if we operate as a peer-to-peer network  like MaidSafe or Storj. The main drawback is that this requires all users to carry other users’ traffic, which costs computer resources and bandwidth. The best idea for incentivizing participation so far would incorporate cryptocurrency by either rewarding coins to those who route more traffic than they generate, or charge a fee to those who don’t. The beauty of this solution is that it decentralizes the communications industry, which by its nature is prone to monopoly–conglomerates like Comcast, Verizon or Shaw in North America will be obsolete.

 

 

Unfortunately, there are technical limitations to this. Laying cable lines is rather expensive; we would have to unearth concrete and pavement each time someone moved and lines needed to be moved or upgraded. As wireless technology advances, however, the price of powerful WiFi routers will reach a point where they can effectively replace copper wires for the middle class in relatively urban areas. Instead of connecting to a modem installed by your Internet service provider, these routers connect directly to each other, or to long-range routers designed to reach past unpopulated terrain where no users live. Anyone connected to an ISP can act as a gateway, allowing others to reach content left behind in the historical system.

Once all that has been accomplished, the only point of vulnerability is the manufacturer. One day, we will be able to 3D print our own wireless routers, using open source blueprints free from any intentional security vulnerabilities. For now, however, a wide selection of wireless routers fit for the job are already available online, for anyone dedicated enough to help get the meshnet started. Rumor has it that the meshnet in Seattle is well underway, but our meshnet project in Vancouver appears to have stalled; I’m hoping to start contributing as soon as it starts up again. We can free ourselves from the bindings of cable companies as well as the government.

Earlier this week, Simon Fraser University (SFU) in Vancouver announced that it will now be accepting Bitcoin donations to help fund a project that is sending two SFU students to India this fall, a project that will focus on empowering women. The university has become the first postsecondary school to support Bitcoin in Canada, and may even follow suit by accepting the digital currency in the university bookstore and dining services on its campuses in the Vancouver area.

The decision was made after the project received a $6,000 donation in Bitcoin. SFU Alumnus Scott Nelson and Simon Fraser Bitcoin Club president Mike Yeung made the donations which seemed to have further sparked the university’s interest in Bitcoin and its wide spectrum of possibilities. “We are embracing Bitcoin because it is innovative, open source, entrepreneurial and fits well with SFU’s mission to engage the world,” Yeung remarked in a recent release.

Simon Fraser University is well-known throughout Canada as a place focused on merging innovative education, research and community outreach. Founded in 1965, the university has grown to three campuses throughout British Columbia, with locations in Vancouver, Burnaby and Surrey. SFU offers both Undergraduate and Graduate level programs in a wide range of programs, and who knows, this university may also be the first to allow students to pay tuition via Bitcoin. This may just be a pipe dream, but this type of support may not be too far off.

Bitcoin at the University

Bitcoin appears to have staunch supporters at SFU, which includes a university Bitcoin Club run by Yeung and other students. The club is focused on increasing adoption of the technology, both as a method of payment and its many other possibilities that cryptocurrencies create.

Yeung believes that Bitcoin especially can be molded in ways that benefit individuals and businesses in a variety of aspects – in every part of the globe and every segment of society. The club’s members hope to make an impact toward the successful funding of the humanitarian co-op project to India, and would also like to see SFU join other universities throughout the globe that already are accepting Bitcoin. Postsecondary schools like University of Cumbria in England’s Lake District, the University of Nicosia in Cyprus and King’s College in New York are among those already accepting the cryptocurrency for tuition. The success of this funding effort will likely play a large part in SFU’s future uses of Bitcoin.

Funding the Project

Laurie Macpherson and Lauren Shandley, both Simon Fraser University students, will use the donation for their humanitarian co-op project in the fall. The pair plan to travel to Kolkata, India, where they will spend the fall term working for Destiny Reflection, a social enterprise that empowers victims of human trafficking. So where does Bitcoin play a role?

Not only can students, staff and Bitcoin users donate to the cause, but the two students will also be utilizing the digital currency, seeking out places to spend Bitcoin in India while also using it as a talking point throughout the region. “I want them to go and scour for them and then to document that experience, through blogs, videos and to engage local population on Bitcoin,” Yeung said.

Anyone can get involved and support these two women as they work to not only empower women, but also bring digital currency like Bitcoin to another part of the globe . . . one that, like many other countries, has many unbanked and underbanked citizens. This is where Bitcoin can make a difference, and if support of the project continues, making a difference can become possible.

To make a contribution please visit http://www.sfu.ca/engage50/ways-to-give.html and click “Donate With Bitcoin.”

The Court of Justice of the European Union received on 02.06.2014 the Preliminary Ruling of The Swedish Supreme Administrative Court (“Högsta förvaltningsdomstolen”) on the interpretation of Article 135.1 of the Directive 2006/112/EC on VAT taxation on bitcoin. The number assigned to the case is C-264-14 (published in the Official Journal C 245 on 28.07.2014, p.7).

The preliminary ruling was originated by an advance tax ruling submitted by David Hedqvist (moderator of Section Sweden of bitcointalk.org and founder of www.bitcoin.se), who intended to carry on a business through a switching operation with the virtual currency bitcoin to “fiat” currency.

The Swedish Authority for the Ruling first dealt with the Decision 10.14.2013 (ref. 32-12. / I Mervärdesskatt: Handel med bitcoins) on trade in bitcoins.

The Ruling resolved that the absence of the definition of the term “currency” in the VAT Directive leads to the interpretation of this term as a means of payment.

In the Article 135.1 of Directive 2006/112/EC letter e) (“transactions, including negotiation, concerning currency, bank notes and coins used as legal tender, with the exception of collectors’ items, that is to say, gold, silver or other metal coins or bank notes which are not normally used as legal tender or coins of numismatic interest”) the term currency is not associated to legal tender. The presence of the exception of the “collectors’ items” that certainly were legal tender, but are not normally used as such because they are collectors’ items, is reported only to coins and banknotes. This excludes the concept of “currency” of the need of legal tender.

On the basis of these considerations:

– Exchange of bitcoin requires similar requirements to intermediation of financial services,

– The bitcoins are a means of payment used in a similar way to legal tender,

– The bitcoin have strong similarities with electronic money.

The Authority for the Swedish Ruling held that bitcoin transactions should be considered as transactions concerning currency referred to in Article 135.1. letter e), consistent with the purposes of the exemptions provided for in Article 135.1. (Avoid the difficulties associated with applying VAT to financial services.). Tax Swedish Tax Authority (Skatteverket) appealed the Decision 32-12. / I to the Swedish Supreme Administrative Court that considered the case (Case No. 7101-13) and resolved to submit a Preliminary Ruling under Article 267 TFEU.

The Swedish Supreme Administrative Court reflected that the Court of Justice had never considered how Article 135.1 d), e), f) of the Directive 2006/112/EC must be interpreted with respect to foreign exchange transactions related to virtual currencies. According to the Supreme Administrative Court’s opinion, it is unclear whether any of these exemptions could include those exchange transactions.

The Supreme Administrative Court raised the following questions:

1. Does the exchange of virtual currency with “fiat” currency constitute a supply of service under VAT Directive?
2. In case of positive answer, are the exchange transactions of bitcoin exempt from VAT under article 135.1 of VAT Directive?

On August 21th David Hedqvist published a post on www.bitcoin.se and www.reddit.com/r/bitcoin asking for help funding legal costs for supporting the case hiring a top law firm in Sweden (language of the case is Sweden); the problem was resolved on August, 26^th with an anonymous donor who covered all expenses and let Hedqvist hiring Mannheimer Swartling.

Many lawyers and tax consultants (included me) offered pro-bono assistance to Heqvist because the case will decide if and how VAT should be applied to bitcoin throughout the EU.

The situation in Europe is very heterogeneous and only a few Member States gave interpretations:

 

GERMANY: The German Ministry of Finance, answering (DOK: 2013/0752711 and 2013/0883337) to deputy Frank Schaeffler (No. 409 of July 2013, n. 226, September 2013), resolved that bitcoins are “private money” or complementary currencies, used as a means of payment in the multilateral clearing system and based on private agreements.

The Ministry denied the exemption as coin and/or foreign currencies (Article 4 number 8 letter b of the German VAT Law – UStG) and considered bitcoin VAT exempt pursuant to point c, (Art. 135.1 d Directive 2006/112/EC), as “transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection”; considering that the mere payment does not constitute the provision of the service and therefore not subject to VAT.

 

UNITED KINGDOM: HMCR, with Revenue & Customs Brief 09/14 resolved that:

1. Income received from Bitcoin mining activities will generally be outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes because there is an insufficient link between any services provided and any consideration received.
2. Income received by miners for other activities, such as for the provision of services in connection with the verification of specific transactions for which specific charges are made, will be exempt from VAT under Article 135(1)(d) of the EU VAT Directive as falling within the definition of ‘transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments.’
3. When Bitcoin is exchanged for Sterling or for foreign currencies, such as Euros or Dollars, no VAT will be due on the value of the Bitcoins themselves.
4. Charges (in whatever form) made over and above the value of the Bitcoin for arranging or carrying out any transactions in Bitcoin will be exempt from VAT under Article 135(1)(d) as outlined at 2 above.

 

ESTONIA: The Estonian tax authority (Maksu Tolliamet-ja), in March of 2014, published on its website an interpretation of the taxation of bitcoin, resolving that bitcoin does not fall under any of exemption of article 135.1 of Directive 2006/112/EC, because the financial services are listed and requires certain characteristics that bitcoin does not have. The authority bases its resolution in a strict interpretation of means of payments, electronic money, securities and financial services, considering transactions in bitcoin as provision of services subject to normal VAT taxation.

 

POLONIA: The directors of the local tax authority in Poland (Interpretacja Dyrektora Izby Skarbowej w Łodzi, IPTPP2/443-52/14-6/IR, Poznaniu ILPP1/443-912/13-2/AW, Katowicach, IBPP2/443-762/13/ICz in http://www.epodatnik.pl/) resolved the sale of bitcoin couldn’t be exempted under art. 135.1 of the Directive 2006/112/EC and therefore, as a service, is subject to normal VAT taxation. The interpretations were based on the assumption that the exemptions referred to Directive 2006/112/EC must be interpreted strictly (CJEU Judgment no. C-461/08 paragraph 25) and that the same exemptions (pursuant to art. 131) are subject to the conditions laid down by the Member States, even if is recognized that bitcoin is, at the same time, a unit of account and a payment system, but:

1. The payment system does not have any issuers or any institutions to supervise.
2. The unit of account cannot be considered a currency due to a lack of legal status.

 

FRANCE declared (Report to the French Senate) that it will support at the EU level a VAT exemption for bitcoin, in order to avoid reiterating the unfortunate experience of the massive VAT fraud over CO₂ quotas.

 

The situation is very concerning, not only for bitcoins, but for every kind of complementary currencies that, under VAT Directive, are not dissimilar to cryptocurrencies, so the decision will impact any kind of private / community currencies.

What if every time you used Amazon they gave you money, just for using it?

And what if eBay accepted multiple digital currencies as payment for goods listed on their site?

What a world it would be…

But Wait! The guys at Ribbit.me! (the exclamation mark is part of the company name) are doing this right now, and they are putting the finishing touches on their marketplace.

I met the guys behind this exciting project and had a few questions that they gladly answered. Here’s the whole scoop on Ribbit.me!

What is Ribbit.me!?

Ribbit.me! is the world’s largest completely free to use online marketplace accepting more fiat and digital currencies than anywhere else. On Ribbit.me! buyers and sellers of new and used goods and services can transact in fiat or just about any combination of digital currencies. For example, imagine I list a used digital camera to sell and I want to get paid in Darkcoin. You see the digital camera and decide you want it and you are going to pay in Dogecoin. With Ribbit.me! this is possible, and you and I don’t even have to know what currency [we] were using.

Additionally, buyers and sellers on Ribbit.me! actually get PAID to transact with our patent pending Ribbitcoin cash back rewards program. Every buyer and seller on the Ribbit.me! Marketplace, and other participating marketplaces, receives Ribbitcoin cash back rewards for their transaction. The higher the value of the transaction the more Ribbitcoin rewards they will get. But Ribbitcoin is not just a rewards coin, it is a fully functional digital currency that can be used just [like] any other currency such as US dollars or Bitcoin. As our global ambassador team integrates other marketplaces worldwide into the Ribbitcoin rewards program, Ribbitcoin will become the first truly global universally accepted cash back reward program that can also be used as a currency. We like to think of Ribbit.me! as the eBay you get paid to use, and Ribbitcoin as the PayPal of cash back rewards.

Ribbit.me! was formed when the three founders met in Nicaragua. They wanted to think of an easier way to get digital currencies, create a place where all digital currencies can actually be used as currency, and build in an incentivization scheme to jumpstart the idea. We saw a frog on the side of the road which inspired the frog theme for Ribbit.me! and led to the birth of our mascot, Ribbit.

What helped create Ribbit.me! and what is you guys’ professional background?

Greg Simon’s background is in banking and finance. Sean Dennis’ background is in real estate and retail. Levi Barker’s background is in technology. Each of our unique skill sets complement each other quite well.

What are you currently busy with?

We are very busy! We are currently hiring full time and part time team members. Our team is  finishing off the final touches to the marketplace and the coin to make sure it is perfect for launch. We recently hired Adam Williams as our Chief Global Ambassador. Adam is working with us to build the global ambassador training program. This is a very important part of the Ribbit.me! business model. Global Ambassadors will be responsible for reaching out to marketplaces around the world and integrating them into the Ribbitcoin rewards program. The compensation could be very lucrative. Anyone interested in joining please reach out to us – we need a lot of Global Ambassadors!

What is the vision behind Ribbit.me!?

Our vision is simple: to create the world’s first universally accepted cash back reward coin that can also be used as currency and gives back to the community in the process, enabling positive social change.

“Giving back to the community is a very important part of the Ribbit.me! experience,” concludes Greg. “5% of all Ribbitcoin reward coins will be given to charity. Each month the members of the Ribbit.me! community will vote to decide which charities will receive the reward coins. The Ribbitcoin community is empowered with the decision. The more people use and save Ribbitcoin the more value will go to the charities they vote to support. We like to think of Ribbitcoin as the first money enabling compassion.“

 

Check out Ribbit.me! right here.