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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at WeUseCoins.com.

Bitcoin Latest News

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Posted on 20 February 2018 | 12:17 am

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Regional Government in Russia to Test Blockchain Payments

Russian development bank Vnesheconombank has partnered with Kaliningrad's regions government to pilot blockchain-based payment solutions.

Posted on 20 February 2018 | 12:00 am

New Bitcoin Code Will Finally Boast Full SegWit Support

An upcoming Bitcoin Core software release is finally making it easier to use a code change called SegWit in the software's standard wallet.

Posted on 19 February 2018 | 9:05 pm

California Bill Would Legally Recognize Blockchain Data

A new bill introduced to the California Assembly seeks the legal recognition of blockchain data and smart contracts.

Posted on 19 February 2018 | 7:50 pm

Bitcoin Price Analysis: Bitcoin Tests Pivotal Resistance Levels Following Strong Rally - Bitcoin Magazine


Bitcoin Magazine

Bitcoin Price Analysis: Bitcoin Tests Pivotal Resistance Levels Following Strong Rally
Bitcoin Magazine
After a strong rally from the $6,000s, bitcoin ultimately saw a near 100% growth in market value as it now sits atop its rally in the low $11,000s. Currently, the market is testing well-known, strong resistance levels and is seeing quite turbulent ...

and more »

Posted on 19 February 2018 | 3:24 pm

Bitcoin Price Analysis: Bitcoin Tests Pivotal Resistance Levels Following Strong Rally

Bitcoin Price Analysis

After a strong rally from the $6,000s, bitcoin ultimately saw a near 100% growth in market value as it now sits atop its rally in the low $11,000s. Currently, the market is testing well-known, strong resistance levels and is seeing quite turbulent shakeouts and rallies as it decides what the next market move will be. On a macro view, we can see that bitcoin is testing the strength of the daily 50 EMA:

fig1Figure 1: BTC-USD, Daily Candles, Macro Trend

The red square at the top of the trend represents a macro distribution trading range that ultimately led to the decline in value of the last couple months. At the time of this article, we are currently testing the lower boundary of this trading range:

fig2Figure 2: BTC-USD, 4-Hour Candles, Retest of Distribution Trading Range

In a typical markdown phase of a market cycle, it is quite common for a distribution trading range to break down through the bottom, see a strong drop in price, and then see a rally that leads to a retest of the lower limits of the prior distribution trading range.

The markdown from the top of the market cycle has been well defined by the red, dotted channel sloping downward in the image above. This current rally has the price pushing beyond the limits of the channel and shows a break of the current downward trend.

One thing that should be noted however is that a breakdown of a downward trend doesn’t necessarily mean that it will become an uptrend. It’s entirely possible that a break from the downward trend could lead into a consolidation period that yields a new downward trend — we’ve seen this time and time again.

At the time of this article we are currently seeing turbulent swings in price as the market decides what its next move will be. At the top of this rally from $6,000 to the $11,000s, we see a trading range starting to form:

fig3Figure 3: BTC-USD, 30min Candles, Possible Trading Range

A bullish case for this trading range could be considered if we manage to break above it and find support on the top of the trading range. This sign of support would be a bullish signal to the market that we are no longer interested in lower values and that the market is ready to continue its markup campaign.

However, if we break above this trading range and fall back inside the trading range, it would be a very bearish sign that the we are actually forming another distribution trading range, indicating that the top of the current rally is over. At that point we could expect to begin a new markdown campaign in the following days and weeks.

Thus, this current resistance level is pivotal and will serve to mark either the end of the uptrend or the beginning of an even stronger move to higher values.

Summary:

  1. Bitcoin has seen a strong rally since it bottomed out around $6,000.
  2. Currently, it is finding turbulent market activity as it tests well-known and established resistance levels.
  3. If we manage to find support on the trading range outlined in Figure 3, this will be a strong indication of a continuation to higher highs. However, if pushing upward we don’t find support on the top of the trading range and manage to fall back inside the trading range, this is a strong bearish signal that a potential markdown in price is in store in the next few days and weeks.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.


This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 3:20 pm

Actor Steven Seagal Endorses Questionable 'Bitcoiin' ICO

Action film star Steven Seagal has become the brand ambassador for a controversial cryptocurrency ahead of an initial coin offering (ICO).

Posted on 19 February 2018 | 3:20 pm

Bitcoiner Faces Charges After Selling BTC to an Undercover Cop

Bitcoiner Faces Charges After Selling BTC to an Undercover Cop

On February 9, 2018, officials from U.S. Immigration and Customs Enforcement (ICE), the investigative arm of the Department of Homeland Security, arrested Morgan Rockcoons (aka “Morgan Rockwell” or “Metaballo”), CEO at Bitcoin, Inc. and an entrepreneur behind several other bitcoin startups, at his home in Las Vegas, Nevada.

Rockcoons was charged with money laundering and operating an unlicensed money transmitting business, according to court records.

According to those same records, in Southern California, between December 30, 2016 and January 8, 2017, Rockcoons allegedly exchanged around 10 bitcoin (worth around $9,200, at the time) for $14,500 in cash with an undercover law officer. That officer allegedly told Rockcoons in advance that the cash came from the manufacture and distribution of “hash oil,” which contains tetrahydrocannabinol, a controlled substance at the federal level.

Money laundering happens when a person takes ill-gotten money and turns it into “clean” money that cannot easily be tracked back to its source. Thus, if Rockcoons knew the cash was dirty, but traded it for bitcoin anyway, that would constitute money laundering.

Rockcoons was also allegedly operating an unlicensed money-transmitting business in Southern  California “from a date unknown” through August 30, 2017. Money transmitters are required to register with the Financial Crimes Enforcement Network (FinCEN).

The warrant for the arrest was issued by the Chief Magistrate for the Southern District of California on November 8, 2017, which indicates it may have taken authorities three months to track down Rockcoons, possibly because he moved out of the original jurisdiction.  

A Different Story

In private messages with Bitcoin Magazine and a series of public tweets, Rockcoons, who is actively seeking donations to pay for his legal fees, which he expects to be between $150,000 - $300,000, tells a different story than what is reflected in court records.

Where the court document says that the the cash given to him was already dirty, he claims that bitcoin he sold to the buyer became dirty after it left his hands.

“Someone bought a machine that makes cannabis oil with the BTC they purchased from me,” he said to Bitcoin Magazine. “I guess I'm not allowed to sell Bitcoin as a U.S. citizen for cash especially if [responsibility for] what people do with that money lies on me.”

In communication with Bitcoin Magazine, Rockcoons said that the buyer told him via text message that the bitcoins would be used to buy a “medical hash machine.”

He added, “Buying equipment in California is not illegal especially medical equipment in a medical State that's been a medical state for 25 years. [A] controlled substance does not have anything to do with the equipment because CBD oil can be extracted from Cannabis and that doesn't have anything to do with Tetra Hydro cannabinol.”

Both Rockcoons’ tweets and his subsequent communication with Bitcoin Magazine seemed to imply, initially, that he had no idea he was selling bitcoin to a law enforcement officer.

On Friday Feb 9, I was arrested in my home by Department Of Homeland Security over a #Bitcoin transaction from nov 2016 and am released under a personal recognizance bond. I am being charged with:

18 USC 1956 - Money Laundering Instrumenthttps://t.co/4w7NJIi4jw

Asset Forfeit pic.twitter.com/5kINtbxH17

— Morgan (@NODEfather) February 14, 2018

According to Rockcoons, the exchange took place in November 2016 (not the first week of January, as listed in court records) while he was living in Northern California (not Southern California, as the records state).

Rockcoons said the buyer found him through LocalBitcoins, an online platform that facilitates direct selling of bitcoin. A user can register as a seller on the platform and be contacted by interested parties. Transactions are done in person or via online banking.

Rockcoons claimed on Twitter that he received $9,200 for the bitcoin, though court records allege the law officer gave him $14,500. Rockoons later told Bitcoin Magazine that he specified to the buyer he wanted less than $10,000, but the buyer insisted on sending him $14,500.

“They tried to entrap me,” Rockcoons told Bitcoin Magazine. “I asked for only less than $10,000, they sent me $14500 [or] refused to send anything and then I sent under $10,000 [worth of bitcoin] to follow the law.”


After agreeing to the terms of the sale online, Rockcoons claims he received a cash payment. He described this payment, in his communication with Bitcoin Magazine, as being received in an envelope sent through the mail. He has not replied to requests for clarification as to whether or not he met with the buyer in person, though he did say that he and the buyer communicated via text messages.


At the time of the exchange, he was camping in the Mendocino National Forest, where he was living in a tent and working on a new project, a voice-operated Bitcoin wallet. Rockcoons said he had been living in the Northern California wilderness since 2015; however, fire and floods were making it increasingly difficult to survive in the area. After another fire ravaged the land, he said he needed cash for evacuation emergencies.

“I was living like a mountain man, so I didn’t really need money but eventually I needed to buy food so I decided to sell some coin; when someone asked me to buy some I usually just always turn it down but I needed cash to eat,” he told Bitcoin Magazine.

He claims the fires were what eventually forced him to move back to Nevada.

Time in Jail

After his arrest in Las Vegas on Friday, February 9, 2018, Rockcoons was locked up over the weekend in Henderson Detention Center in Clark County, Nevada, for three days. He pled not guilty at a Federal Court hearing on February 12, 2018, and was then sent to Clark County Detention Center for two more days for an unrelated charge of failure to appear on a traffic ticket.

“I was in jail for five days with some of the scariest humans on Earth,” he said. “But I [taught] most of them how Bitcoin works, so it was worth it.”   

In his series of ongoing tweets since his release from jail on February 14, 2018, Rockcoons has been portraying the charges against him as an attack on Bitcoin.

It's not my mess, it's everyone on Earths [sic] battle now or you can kiss your access to BTC goodbye,” he wrote in one tweet.

This is a attempt to redefine the regulation and the law,” he told Bitcoin Magazine.

“Bitcoin is my religion,” he wrote in another tweet. “God says I can use bitcoin everyday.”

Rockcoons is also claiming he was targeted due to his relationship with the state and the federal government and his Bitcoin-related startups.

Because of my relationship with the State & Federal Government as well as my relationship with the US military, because of my involvement in creating @BitSwitchIO at @BitcoinKinetics and possibly the opportunity to pull a @CharlieShrem case in California to get the west coast.

— Morgan (@NODEfather) February 14, 2018

He is looking to others to join the “battle” with him, and he is even asking the the Bitcoin Foundation, a non-profit organization that supports Bitcoin adoption and education, to cover 15 bitcoin (worth around $150,000) of his legal costs.

“It seems to me the Bitcoin Foundation has been absent from the Bitcoin Community during troubling times, this would be a good opportunity to show face and show the community that you're here for all of us," he tweeted.


Rockcoons’ arraignment is on February 22, 2018 at the San Diego Superior Court in California. He has hired Las Vegas criminal attorneys David Chesnoff and Richard Schonfeld to represent him. He says he plans to pay them in bitcoin.


(Note: Shortly before publishing this article, Rockcoons blocked the writer from viewing his Twitter account.)

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 3:04 pm

Bitcoin's Developers Are Debating A Change To Its Open License - Investopedia (blog)


Investopedia (blog)

Bitcoin's Developers Are Debating A Change To Its Open License
Investopedia (blog)
Ever since its launch last August, bitcoin has had an antagonistic relationship with its offshoot, bitcoin cash. But their battle may have provided a trigger to seek ways to protect bitcoin's core code from indiscriminate use. If a proposal to change ...
Should You Buy Bitcoin Now?Lifehacker Australia

all 2 news articles »

Posted on 19 February 2018 | 2:43 pm

Visa Created Duplicate Bitcoin Cryptocurrency Transactions - Forbes - Forbes


Forbes

Visa Created Duplicate Bitcoin Cryptocurrency Transactions - Forbes
Forbes
Visa and Worldpay had to make a statement that some duplicate Bitcoin transactions on Coinbase, a cryptocurrency exchange, were their fault and not Coinbase's.
Joint Statement from Visa and Worldpay for Coinbase customers - The Coinbase BlogThe Coinbase Blog

all 17 news articles »

Posted on 19 February 2018 | 12:08 pm

Bitcoin thieves threaten real violence for virtual currencies - CNBC


CNBC

Bitcoin thieves threaten real violence for virtual currencies
CNBC
The currency they were after was virtual, but the guns they carried were anything but. In the beach resort of Phuket, Thailand, last month, the assailants pushed their victim, a young Russian man, into his apartment and kept him there, blindfolded ...

Posted on 19 February 2018 | 11:29 am

HashChain Technology Acquires Blockchain Company NODE40

HashChain Mining Operation Acquires NODE40 Blockchain Technology Company

HashChain Technology Inc. (HashChain) has acquired the blockchain technology company NODE40 for $8 million USD and 3,144,134 common shares of stock in HashChain (TSXV: KASH) (OTCQB: HSSHF).

HashChain is a Canadian-based crypto-mining company that currently operates 100 Dash mining rigs and is in the process of setting up nearly 4,000 more to mine bitcoin. By locating in Canada, they are able to take advantage of both the very low electrical rates for power and the cool climate for data center cooling.

Having recently gone public on the TSX Venture Exchange, the company was looking to diversify their business beyond crypto-mining and have now acquired NODE40, a company that develops Software as a Service (SaaS) products related to cryptocurrency.

HashChain CEO and Founder Patrick Gray said, “The acquisition of the NODE40 Business is an important next step of creating a global blockchain technology company."

On the hardware and mining side, NODE40 runs a managed service for running your own Dash masternode. Masternodes get paid 45 percent of the monthly block reward as incentive for providing services to the network.

On the software side, NODE40 provides the SaaS product NODE40 Balance (Balance), which determines accurate valuations for each input/output involved in a user’s transaction by using cryptocurrency transaction history and analyzing the blockchain. Once a value is assigned to each transaction, then Balance will report the users’ current total asset value, income and any realized gains or loses.

"Cryptocurrency accounting and reporting for tax purposes is a major concern in the industry at the moment,” said Gray. “The recent Coinbase subpoena from the IRS highlights the significant need for the software developed by NODE40."

The acquisition was finalized on February 15, 2018.

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 11:21 am

Long Blockchain Is At Risk for Exchange Removal Again

Long Blockchain announced it would appeal a notice by Nasdaq informing it that its stock was at risk of being delisted.

Posted on 19 February 2018 | 11:20 am

Banks Buy Stakes in Blockchain Startup SETL

Citi joined Credit Agricole, Computershare, S2iEM and Deloitte as shareholders in the blockchain-based payment and settlements startup SETL.

Posted on 19 February 2018 | 10:20 am

Op-ed: How Decentralized Protocols Are Threatening Traditional Business Models

Op-ed: How Decentralized Protocols Are Threatening Traditional Business Models

Corporates, suits and CEOs of traditional companies beware: decentralized protocols powered by blockchain technology are redefining your traditional business models, and you should be worried. Business models of the future are not created equal, and they certainly don’t play by the same rules. In the Venn Diagram of traditional business and decentralized protocols, there are a few overlaps and many differences.

Traditional Businesses vs. Decentralized Protocols

Boiled down to the most simple terms, all traditional businesses are organizations that charge customers a certain price (usually denoted in fiat currency) in exchange for a certain product or service. Starbucks charges $3.28 for a quad, grande, decaf Americano. Netflix charges a monthly $10.99 for unlimited Nicolas Cage streaming. Lover’s charges $20 to “spice things up” in the bedroom.

Ultimately, all traditional businesses –– no matter the product or service –– are driven by the quest for profit. Business owners are incentivized to reduce costs, increase efficiencies and scale carefully to maximize cash flows for shareholders.

The key stakeholders of traditional business are customers, business owners/employees and business financiers.

A decentralized protocol powered by blockchain technology is a network — a network framed by cryptography, distributed ledger technology, decentralization and consensus methods –– but a network nonetheless. The networks created by decentralized protocols aren’t structured like the networks created by any traditional business model.

Decentralized protocols aren’t driven by the need to create future cash flows for shareholders. Instead, they are programmed to facilitate commercial interactions between humans in a frictionless manner. A protocol’s incentives are aligned to benefit users and to achieve the smallest margins possible.

The key stakeholders of decentralized protocols are customers, protocol “community maintainers” and (occasionally) protocol financiers.

Customers

Customers benefit from the traditional business they choose to interact with. For a price specified by the business (in fiat currency), they are entitled to a product or service.

Similarly, customers benefit from the protocol they choose to interact with. For a price specified by the protocol, they are entitled to a product or service.

Generally, protocols are powered by utility tokens. For example, the fictional Planes Protocol facilitates coast-to-coast trips in a Tesla-of-the-skies (electric planes) for 1 PLN token. The PLN token is a medium-of-exchange. Nick, a businessman from Seattle, must pay 1 PLN token for a flight from Seattle to Miami. The plane operator is entitled to 99 percent of the PLN token fee and the Planes Protocol claims the other 1 percent.

Business Owners and Employees

Traditional business owners and employees must be compensated for their work. After all, there is a price to pay for food, water and shelter. Business owners pay themselves with portions of their revenue and pay their employees salaries for their work.

Because protocols are decentralized, the concept of “business owner” does not apply. Instead, protocols are cultivated by those designated as “community maintainers.” Whether the protocol founder is designated as the “community maintainer” is up to the community.

Protocols can facilitate commercial interactions between humans “at cost,” as long as they are generating enough in network fees to cover all required upkeep costs. For example, these can include a centralized unit to guarantee customer satisfaction and hiring of developers, project managers or anyone else necessary to keep the network alive and well. Therefore, a protocol’s margins can be much lower than that of a traditional business.

If a “greedy” protocol is programmed with transaction fees that are unreasonably high, anyone can “fork” the protocol (by using a modified copy of the original open-source code) and create a competing network with lower transaction fees. This will continue until price reaches a near-free equilibrium.

Protocol founders can reward themselves with a certain percentage of all tokens ever minted for creating the protocol; similarly, “community maintainers” are rewarded for their efforts via the protocol’s tokens on an ongoing, salary-style basis. These tokens usually have a related fiat value and can be redeemed on publicly traded exchanges.

Side note: Utility tokens are not a panacea. They face various problems such as publicly traded speculation and token velocity. A utopian, token-centric future will not happen overnight. There is much work to do.

Business Financiers

Many business owners or entrepreneurs traditionally rely on risk-tolerant financiers with capital. In the 1500s, enterprising trade voyagers relied on wealthy financiers to support their journeys. If trade voyagers were successful, financiers earned the lion’s share of the voyagers’ profits.

In 2018, Silicon Valley startup founders relinquish equity/control over their company to venture capitalists (modern day trade financiers) in exchange for seed funding. If startups are successful, venture capitalists earn a return proportional to their shares of the company.

It is important to note that capitalism and traditional business models work well. There are millions of happy customers across a variety of industries. But, in some cases, decentralized protocols provide cheaper access to products or services and better-aligned incentives for all stakeholders.

Founders of protocols have flexibility. Because they are creating a new network powered by utility tokens, they can afford to bypass traditional debt/equity financing.

While 16th century merchants and past Silicon Valley founders played by the rules of their financiers, founders of decentralized protocols are freed from this sort of pressure. Protocols can crowdfund capital by pre-selling their protocol’s utility tokens to accredited VCs and, in some cases, to the general public. Protocols can also give discounted tokens to developers for their skills.

Key Takeaway: Traditional businesses and protocols are not created equal. And decentralized protocols certainly don’t play by the same rules as traditional businesses.

Shifting the Value Paradigm

So, what might value creation in the future even look like? And how does a legacy business survive the decentralized future?

Corporate decision-makers must recognize and understand that:

  • This is a true instance of the often-overlooked “past performance is no guarantee of future results.” Traditional business models cannot be confused with or compared to protocols of the future.
  • Decentralized protocols of the Web 3.0 will not automatically dethrone legacy businesses. And, in some cases, traditional business would not benefit from decentralization. Protocols will not gain the necessary network effects for widespread adoption unless their value proposition is an order of magnitude better than current business models.
  • If your corporation operates on the basis of artificial scarcity or “middlemen economics,” you’re ripe for disruption.

Most decentralized protocols still require certain aspects of centralization to guarantee customer satisfaction. Sorry, libertarians, but certain things must maintain a degree of centralization.

Practical Example: Uber vs. Ride, a Fictional, Decentralized Ride-Sharing Protocol.

In 2018, Uber has 3 key competitive advantages in the ride-sharing market:

  1. Legacy Network: ~ 40 million total monthly, active riders; ~ 1.5 million total drivers
  2. Customer Satisfaction Guarantee: a centralized company able to provide riders/drivers with personalized troubleshooting. For example, when a driver complains that a college student threw up in his Uber, the centralized Uber troubleshooting authority reprimands the rider in the form of a citation and makes the driver whole.
  3. Brand Name Recognition: Uber has achieved ultimate “verb” status. On par with “Googling” something.

However, in 5–20 years, Ride will inevitably come along and attempt to win over Uber’s users and drivers. Ride won’t be structured like Uber’s traditional business model. Its goal won’t be to create future cash flows for Ride shareholders. Instead, the protocol will focus on facilitating transactions between riders and drivers in a frictionless, decentralized manner. Ride’s incentives will be aligned to benefit riders and drivers.

Because Ride isn’t driven by the quest for profit, it doesn’t have to charge drivers ~20 percent for each ride. Instead, they can charge users/drivers fractional transaction fees (by means of the RIDE utility token) for interacting with the protocol. These transaction fees are used to maintain and secure the Ride protocol.

The Ride protocol will raise money by pre-selling their utility tokens via decentralized crowdfunding. The protocol will provide an order of magnitude improvement over Uber’s network, executed by the right team and the right investors. Because of this, Ride will amass a significant network effect, user base and brand name recognition. Of course, the Ride protocol will likely still have aspects of centralization to provide customer satisfaction.

So, How Can Companies Like Uber Survive in 2025?

There are two options:

  1. “Reverse ICO,” or create a decentralized protocol for the service you provide.
  2. Slowly go bankrupt as market share is taken away by your competitors, who are decentralized protocols.

Decentralization will be just one of many difficult topics to bring up at a board meeting. After all, artificial intelligence and automation are advancing every year. Shrinking margins, employee layoffs and re-trainings are also implicit with decentralization. (Maybe it’s best to recruit your interns to volunteer this information to the board, in case this inevitability isn’t well-received by your shareholders.)

Legacy companies are presented with an incredible opportunity to participate in the next evolution of business models and commercial interactions between people. Choose to embrace the future or fall as a victim to social darwinism: the choice is up to you.

This is an opinion piece by Erik Kuebler. The views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 10:03 am

Lithuania's Central Bank Probes 100 Million Euro ICO

Lithuania's central bank has said it is probing Bankera's initial coin offering after determining that the token offered counts as a security.

Posted on 19 February 2018 | 9:00 am

Bitcoin is back over $11000 - BGR


BGR

Bitcoin is back over $11000
BGR
It took Bitcoin more than two weeks to recover the ground it lost in early February when the most popular cryptocurrency in the world plunged below $6,000 for the first time since November. Bitcoin is nowhere near its record highs from mid-December ...
How to Buy and Sell Bitcoin for BeginnersWestchester Magazine
Bitcoin Price Crosses $11000 as Ripple, NEO GainInvestopedia (blog)
Can Cardano Replace Bitcoin and Ethereum?Motley Fool
Cointelegraph (Bitcoin, Cryptocurrency and Blockchain News) -South China Morning Post -Daily Sundial -CNBC
all 63 news articles »

Posted on 19 February 2018 | 8:58 am

Anonymous Bitcoin Buyer Spends $400 Million | Fortune - Fortune


Fortune

Anonymous Bitcoin Buyer Spends $400 Million | Fortune
Fortune
An anonymous trader has sunk $400 million—enough to buy New York State's most expensive home twice with change left over—into the cryptocurrency, raising his or her stake from 55,000 coins to more than 96,000 between Feb. 9 and Feb. 12. And that buy ...
Bitcoin - The Currency of the Internet - RedditReddit
GitHub - BTCGPU/BTCGPU: Current work on BTCGPUGitHub

all 32 news articles »

Posted on 19 February 2018 | 8:41 am

$850 Million Raised in ICO So Far, Says Telegram

Messaging app provider Telegram has raised an initial $850 million in its controversial initial coin offering (ICO), according to a public document.

Posted on 19 February 2018 | 7:20 am

Sidechains: Why These Researchers Think They Solved a Key Piece of the Puzzle

Sidechains and Why These Researchers Think They Solved a Key Piece of the Puzzle

New blockchains are born all the time. Bitcoin was the lone blockchain for years, but now there are hundreds. The problem is, if you want to use the features offered on another blockchain, you have to buy the tokens for that other blockchain.

But all that may soon change. One developing technology called sidechains promises to make it easier to move tokens across blockchains and, as a result, open the doors to a world of possibilities, including building bridges to the legacy financial systems of banks.

In October 2017, Aggelos Kiayias, professor at the University of Edinburgh and chief scientist at blockchain research and development company IOHK; Andrew Miller, professor at the University of Illinois at Urbana-Champaign; and Dionysis Zindros, researcher at the University of Athens, released the paper “Non-Interactive Proofs of Proof-of-Work” (NiPoPoW), introducing a critical piece to the sidechains puzzle that had been missing for three years. This is the story of how they got there.

But, first, what exactly is a sidechain?    

Same Coin, Different Blockchain

A sidechain is a technology that allows you to move your tokens from one blockchain to another, use them on that other blockchain and then move them back at a later point in time, without the need for a third party.  

In the past, the parent blockchain has typically been Bitcoin, but a parent chain could be any blockchain. Also, when a token moves to another blockchain, it should maintain its same value. In other words, a bitcoin on an Ethereum sidechain would remain a bitcoin.  

The biggest advantage of sidechains is that they would allow users to access a host of new services. For instance, you could move bitcoin to another blockchain to take advantage of privacy features, faster transaction speeds and smart contracts.  

Sidechains have other uses, too. A sidechain could offer a more secure way to upgrade a protocol, or it could serve as a type of security firewall, so that in the event of a catastrophic disaster on a sidechain, the main chain would remain unaffected. “It is a kind of limited liability,” said Zindros in a video explaining how the technology works.

Finally, if banks were to create their own private blockchain networks, sidechains could enable communications with those networks, allowing users to issue and track shares, bonds and other assets.

Early Conversations

Early dialogue about sidechains first appeared in Bitcoin chat rooms around 2012, when Bitcoin Core developers were thinking of ways to safely upgrade the Bitcoin protocol.

One idea was for a “one-way peg,” where users could move bitcoin to a separate blockchain to test out a new client; however, once those assets were moved, they could not be moved back to the main chain.  

“I was thinking of this as a software engineering tool that could be used to make widespread changes,” Adam Back, now CEO at blockchain development company Blockstream, said in an interview with Bitcoin Magazine. “You could say, we are going to make a new version [of Bitcoin], and we think it will be ready in a year, but in the meantime, you can opt in early and test it.”

According to Back, sometime in the following year, on the Bitcoin IRC channel, Bitcoin Core developer Greg Maxwell suggested an idea for a “two-way peg,” where value could be transferred to the alternative chain and then back to Bitcoin at a later point.

A two-way peg addressed another growing concern at the time. Alternative coins, like Litecoin and Namecoin, were becoming increasingly popular. The fear was these “altcoins” would dilute the value of bitcoin. It made sense, Bitcoin Core developers thought, to keep bitcoin as a type of reserve currency, and relegate new features to sidechains. That way, “if you wanted to use a different feature, you wouldn’t have to buy a speculative asset,” said Back.

To turn the concept of sidechains into a reality, Back along with Maxwell and a few other Bitcoin Core developers formed Blockstream in 2014. In October that year, the group released “Enabling Blockchain Innovations with Pegged Sidechains,” a paper describing sidechains at a high level. Miller appears as a co-author on that paper as well.

How Sidechains Work

One important component of sidechains is a simplified payment verification (SPV) proof that shows that tokens have been locked up on one chain so validators can safely unlock an equivalent value on the alternative chain. But to work for sidechains, an SPV proof has to be small enough to fit into a single coinbase transaction, the transaction that rewards a miner with new coins. (Not to be confused with the company Coinbase.)

At the time the Blockstream researchers released their paper, they knew they needed a compressed SPV proof to get sidechains to work, but they had not yet developed the cryptography behind it. So they outlined general, high-level ideas.

The Blockstream paper describes two types of two-way pegs: a symmetric two-way peg, where both chains are independent with their own mining; and an asymmetric two-way peg, where sidechain miners are full validators of the parent chain.

In a symmetric two-way peg, a user sends her bitcoins to a special address. Doing so locks up the funds on the Bitcoin blockchain. That output remains locked for a contest period of maybe six blocks (one hour) to confirm the transaction has gone through, and then an SPV proof is created to send to the sidechain.

At that point, a corresponding transaction appears on the sidechain with the SPV proof, verifying that money has been locked up on the Bitcoin blockchain, and then coins with the same value of account are unlocked on the sidechain.

Coins are spent and change hands and, at a later point, are sent back to the main chain. When the coins are returned to the main chain, the process repeats. They are sent to a locked output on the sidechain, a waiting period goes by, and an SPV proof is created and sent back to the main blockchain to unlock coins on the main chain.  

In an asymmetric two-way peg, the process is slightly different. The transfer from the parent chain to the sidechain does not require an SPV proof, because validators on the sidechain are also aware of the state of the parent chain. An SPV proof is still needed, however, when the coins are returned to the parent chain.

Search for a Compact Proof

In a sidechain, a compact SPV proof needs to contain a compressed version of all the block headers in the chain where funds are locked up from the genesis block through the contest period, as well as transaction data and some other data. In this way, an SPV proof can also be thought of as a “proof of proof-of-work” for a particular output.

Inspiration for the compact SPV proof comes from a linked-list-like structure known as a “skip list” developed 25 years ago. In applying this structure to a compact SPV proof, the trick was in finding a way to skip block headers while still maintaining a high level of security so that an adversary would not be able to fake a proof.

In working through the problem, Blockstream showed an early draft of its sidechains paper to Miller, who had been mulling over compact SPVs for a few years already.

In August 2012, in a post on a BitcoinTalk forum titled “The High-Value-Hash Highway,” Miller described an idea for a “merkle skip list” that a Bitcoin light client could use to quickly determine the longest chain and begin using it. In that post, he described the significance of the data structure as “absolutely staggering.”

When Miller read through the Blockstream draft, he spotted a vulnerability in the compact SPV proof described in the paper. Discussions ensued, but they “couldn’t find a way to solve that problem without compromising efficiency,” Miller said.

Miller’s non-trivial contributions to the Blockstream paper ended up being a few paragraphs in Appendix B that describe the challenges in creating a compact SPV proof.

It should “be possible to greatly compress a list of headers while still proving the same amount of work,” the section reads, but “optimising these tradeoffs and formalising the security guarantees is out of scope for this paper and the topic of ongoing work.”

That ongoing work remained stuck for three years.

Making It Non-interactive

During that ensuing time, researchers at IOHK began taking a more serious interest in sidechains. Plans were taking shape for Cardano, a new proof-of-stake blockchain that IOHK had been contracted to build.

Cardano would consist of two layers: a settlement layer, launched in September 2017, where the money supply would be kept, and a smart contract layer. Those two layers would be two sidechain-enabled blockchains. In this way, the settlement could remain simple and secure from any attacks that might occur on the smart contract layer. But if IOHK was to get Cardano to work as intended, it needed to solve sidechains.

In February 2016, Kiayias, then a professor at the University of Athens, and two of his students, Nikolaos Lamprou and Aikaterini-Panagiota Stouka, released “Proofs of Proofs of Work with Sublinear Complexity” (PoPoW).

The paper was the first to formally address a compact SPV proof. Only, the proof described in the paper was interactive; whereas, to work for sidechains, it needed to be non-interactive.

In an interactive proof, the prover and the verifier enter into a back-and-forth conversation, meaning there could be more than one round of messaging. In contrast, a non-interactive proof would be a simple, short string of text that would fit neatly into a single transaction on the blockchain.

The PoPoW paper was presented at BITCOIN’16, a workshop affiliated with the International Financial Cryptography Association’s (IFCA) Financial Cryptography and Data Security conference. Miller, who was at the conference, approached Kiayias and shared an idea for making the protocol non-interactive.

It was a “nice observation,” Kiayias told Bitcoin Magazine, but making the proof secure was “not obvious at all” and would require significant work.

Zindros, who had just started working on his PhD under Kiayias, was also at the conference, and he needed a topic for his thesis. Kiayias saw a good fit, “so we pressed on, the three of us, and adapted the PoPoW protocol and its proof of security to the non-interactive setting,” Kiayias said.

In October 2016, Kiayias officially joined IOHK, and a year later, Kiayias, Miller and Zindros released “Non-Interactive Proofs of Proof-of-Work,” introducing a compact SPV proof five years after sidechains had first been talked about on Bitcoin forums.

“If it were interactive, I don’t know if it would have worked; with a non-interactive proof, it is really smooth,” Zindros told Bitcoin Magazine.

More Work to Be Done

Even with NiPoPoW, sidechains are still not fully specified. Several questions remain, including, how small can the proofs be made? After a transaction is locked up on one chain, how much time needs to pass before it can be spent on the other? And, will it be possible to move a token from a sidechain directly to another sidechain?

“A lot of theory still needs to be defined,” IOHK CEO Charles Hoskinson said in speaking to Bitcoin Magazine.

Also, while NiPoPoW is designed to work for proof-of-work blockchains, some believe that if blockchains are to take their place in the world on a grand scale, the future rests in proof-of-stake protocols like Ouroboros, Algorand or Snow White, which promise to be more energy-efficient than Bitcoin.

In particular, if Cardano, which is based on Ouroboros, is to work according to plan, IOHK researchers still need to discover a non-interactive proof of proof-of-stake (NiPoPoS).

Hoskinson is confident. “We can definitely do that,” he said. “We can definitely have a NiPoPoS. The question is how many megabytes or kilobytes is it going to be? Can we bring it down to 100 KB? That is really the question.”

This article originally appeared on Bitcoin Magazine.

Posted on 19 February 2018 | 7:12 am

Record Retest? ETC Looks Poised on Double-Digit Climb

A prominent alternative to the ethereum blockchain is showing signs of building a higher base amid a period of strong market activity.

Posted on 19 February 2018 | 6:45 am

Australian Watchdog Received 1,200 Crypto Scam Complaints in 2017

The Australian Competition & Consumer Commission reportedly received over 1,200 complaints about cryptocurrency scams last year.

Posted on 19 February 2018 | 4:45 am

Bottom Confirmed? Bitcoin at 20-Day High Near $11K - CoinDesk - CoinDesk


CoinDesk

Bottom Confirmed? Bitcoin at 20-Day High Near $11K - CoinDesk
CoinDesk
Over the weekend, CoinDesk's Bitcoin Price Index (BPI) rose to $11,279.18, its highest level since Jan. 29. As of writing, the BPI is seen at $10,800 - up 1.59 percent in the last 24 hours. However, a bout of profit taking seems to have pushed the ...

and more »

Posted on 19 February 2018 | 3:34 am

Bottom Confirmed? Bitcoin at 20-Day High Near $11K

Bitcoin seems to have found a bottom below $6,000, although a long-term bull revival is still not certain, according to the price charts.

Posted on 19 February 2018 | 3:15 am

Bancor Bounce Back? ICO Is Winning Adoption

Despite early skepticism on its tech amid a record-setting ICO, millions of dollars is now being traded each week by blockchain project Bancor.

Posted on 19 February 2018 | 2:00 am

PC Giant Lenovo Seeks Blockchain Validation Patent

New patent filings from Lenovo indicate the technology company hopes to use a blockchain-based system for the authentication of physical documents.

Posted on 19 February 2018 | 12:00 am

Wall Street Has Solved A Big Problem For Bitcoin - Forbes


Forbes

Wall Street Has Solved A Big Problem For Bitcoin
Forbes
Wall Street has solved a big problem for Bitcoin: market volatility, paving the way for the people's currency to gain broad acceptance among merchants as a medium of exchange. That's a bullish development for the “people's currency.” Starbucks and ...

Posted on 18 February 2018 | 6:31 am

No, Not All ICOs Are Securities

A recent op-ed paints all ICOs with the same brush, claiming every one of them offers securities subject to SEC scrutiny. That is simply not the case.

Posted on 18 February 2018 | 4:20 am

In 10 Years We Won't Have Blockchains

Instead, we may have something that does what a blockchain does, only faster, cheaper and scalable. It'll look more like a graph than a linear chain.

Posted on 17 February 2018 | 4:00 am

Swiss Regulator Gives Clear Guidelines for Launching ICOs

Swiss Regulator Gives Clear Guidelines for Launching ICOs

On February 16, 2018, the Swiss Financial Market Supervisory Authority FINMA put the world on notice by being the first major economy to set out clear guidelines on initial coin offerings (ICOs). In an announcement, the Swiss regulator addressed plans to apply financial market legislation to different tokens as well as lay out how ICO organizers can get proper input from FINMA when planning or launching their initial coin offerings.


The guidelines, offered as a downloadable PDF, show market participants what information is needed to help the Swiss regulator adequately address all issues presented in inquiries to the regulator, as well as how FINMA intends for current financial market legislation to be applied to ICOs. The published guidelines are intended to complement FINMA Guidance 04/2017, which in September 2017 addressed regulatory treatment of initial coin offerings.  

Important to note is FINMA’s concern over creating transparency. According to the regulator, “Creating transparency at this time is important given the dynamic market and high level of demand.”

FINMA also cited an increase in the number of inquiries corresponding with a sharp increase in the quantity of planned and executed ICOs in the country as a motivating factor for the move.

The regulator’s concern over transparency is clearly illustrated when they state in the guidelines that “ICOs raise a variety of legal issues for which there is no relevant case law and no consistent legal doctrine. Given the wide variety of types of token and ICO set-ups, it is not possible to generalise. Circumstances must be considered holistically in each individual case.”

The press release on the guidelines also provides useful information. The Swiss regulator highlighted that they would focus “on the underlying purpose of the tokens” and that the tokens were “tradeable and transferable.”

The release also showed how FINMA categorizes the tokens into three types — payment tokens, utility tokens and asset tokens (allowing for tokens to possibly take on aspects of more than one group) — and ascribes definitions for organizers to better understand their tokens’ potential assessment.  

Another major emphasis in the press release was on the guidelines’ role in displaying how FINMA will handle ICO inquiries regarding Anti-Money Laundering (AML) and securities regulations compliance. In the release, they referred market participants to the diagram on page 8 of the guidelines (as shown below), which distinguishes the regulator’s stance based on which of the three categories the tokens are put in.

Swiss Regulator Gives Clear Guidelines for Launching ICOs chart

While the press release does finish with a note to investors about the risks associated with investing in ICOs, the most important part of the announcement is the portion where FINMA highlights the “innovative potential” of blockchain technology. In it, FINMA CEO Mark Branson stated:

The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework. Our balanced approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.

While regulations on ICOs are either ambiguously evolving or demonstrating outright hostility in other countries, FINMA has given a clear signal that it wants to provide transparency, open communication and certainty (where possible) to those launching ICO projects within the Swiss Confederation.

This article originally appeared on Bitcoin Magazine.

Posted on 16 February 2018 | 4:20 pm

Decentralized Exchanges Stake Their Claim in the Cryptocurrency Ecosystem

Decentralized Exchanges Stake Their Claim in the Cryptocurrency Ecosystem

The cryptocurrency ecosystem has continued to take some major hits lately, causing many investors and holders to rethink the way they trade their crypto assets. Several high profile cryptocurrency hacks have made the news in the past few years. In one of the most recent hacks, the Japanese cryptocurrency exchange, Coincheck lost more than $500 million dollars worth of digital coins, adding to a growing perception that cryptocurrencies are particularly vulnerable to hackers.

Yet, as the total market capitalization of cryptocurrencies continues to increase (now above $4 billion), the most recent Coincheck hack may finally be a wake up call for crypto investors and holders.

As the vulnerability of centralized cryptocurrency exchanges is becoming more and more apparent to the cryptocurrency community, some are looking to alternatives in the form of decentralized exchanges.

Unlike a centralized exchange system that handles the trading of cryptocurrencies for its users, decentralized exchanges allow users to control their own funds within their own wallets. Decentralized exchanges do not rely on a third party service to hold a user’s funds, making them less vulnerable to large hacks. This also means that trades on a decentralized exchange happen directly between users in a peer-to-peer manner. These features make decentralized exchanges less vulnerable and much more transparent than centralized exchanges.

Decentralized exchanges such as AirSwap, Bisq, EtherDelta and Hodl Hodl — the newest player to enter the scene — have sparked the interest for crypto enthusiasts looking to control their own assets with little hand holding involved. Users on these decentralized exchanges keep their own private keys and transact directly with each other, demonstrating a truly decentralized form of trading crypto assets.

“We believe that there will be a huge liquidity migration from centralized exchanges to decentralized exchanges when it comes to token-to-token trading,” AirSwap strategist, Sam Tabar, told Bitcoin Magazine. “AirSwap’s mission is to let people trade crypto assets without a middleman involved and blockchain technology allows for just this.”

He pointed out that AirSwap doesn’t hold any user assets. The platform uses the Ethereum blockchain and atomic swaps based on smart contracts to make sure assets cannot be traded without another asset coming to a user.  

“In a way, centralized exchanges act as a bank, broker and clearing house because they hold all your money and charge fees. This is problematic though, and hacks are happening quite often because of this model,” said Tabar.

What About Crypto to Fiat Trades?

Most decentralized exchanges allow for crypto-to-crypto trading. While this model is common, Bisq is one of the few decentralized exchanges that lets users buy and sell bitcoins in exchange for national fiat currencies as well as alternative cryptocurrencies.

“Crypto-to-fiat exchange transactions are inherently difficult to decentralize, because fiat itself is under the centralized control of banks and governments,” Bisq co-founder, Chris Beams, told Bitcoin Magazine. “This means that any system designed to automate the process of trading crypto for fiat must get permission from these gatekeepers, and all too often they choose to close their gates to Bitcoin and cryptocurrency-related transactions — just as we saw last month with Visa shutting down all Bitcoin-based debit cards on its network.”

Bisq, however, solves this problem by coordinating out-of-band, manual fiat payments. It’s important to note that Bisq does not directly integrate with banks or other national currency payment systems in any way. Rather, Bisq’s trading protocol orchestrates the process of buyer and seller working together to settle fiat payments outside of the Bisq application — for example, via normal person-to-person SEPA payments in Europe or via a person-to-person payment system like Zelle in the U.S.

Bisq is also impressive in that their peer-to-peer network ensures a high level of user security.

“Centralized exchanges require users to ‘deposit’ cryptocurrency and fiat funds, putting them in the control — or custody — of the centralized exchange. Bisq is entirely non-custodial, meaning that you, the user, stay in control. You never hand over your private keys to a third party, meaning that they cannot be lost or stolen by that third party. This makes Bisq a fundamentally more secure way to exchange,” said Beam.

Most recently, the beta version of Hodl Hodl was launched. Hodl Hodl is another peer-to-peer crypto exchange that allows users to trade directly with each other, without holding user funds.

Instead, funds on Hodl Hodl are locked in multisig escrow.

Each time a contract is created between two parties, a multisig escrow cryptocurrency address is generated. The seller sends cryptocurrency from his wallet to this account and when the cryptocurrency is locked in escrow, the buyer sends fiat to the seller. The seller then releases the locked cryptocurrency from escrow and the buyer receives it directly in their wallet.

Enhanced Privacy

Furthermore, because decentralized exchanges do not hold funds and because the exchanges are all peer-to-peer, there are no AML/KYC requirements for users to set up accounts.

“AML/KYC type of compliance, in combination with the transparent nature of Bitcoin's blockchain, represents a significant loss of privacy,” said Manfred Karrer, founder of Bisq, when it first launched as Bitsquare.

“By piecing together the data collected by these exchanges, it can become trivial to figure out how much someone earns, or saves, or spends, and often even what the money is spent on. That’s not just inconvenient; it really makes Bitcoin unsuitable for all sorts of transactions ‒ including perfectly legal ones.”



This article originally appeared on Bitcoin Magazine.

Posted on 16 February 2018 | 3:11 pm

SEC Suspends Trading of 3 Penny Stocks With Tenuous Ties to Cryptocurrency, Blockchain

SEC Suspends Trading of 3 Penny Stocks With Tenuous Ties to Cryptocurrency, Blockchain

Today, February 16, 2018, the Securities and Exchange Commission (SEC) issued a press release announcing trading suspension of three companies that acquired AAA-rated assets from “a subsidiary of a private equity investor in cryptocurrency and blockchain technology, among other things.”

The three companies in question, PDX Partners, Inc., Victura Construction Group, and Cherubim Interests, Inc., had trading of their stocks suspended for 10 days by the SEC under the auspices of public interest and investor protection. Neither the SEC suspension orders, nor any of the announcements by the companies surrounding the acquisitions, however, seem to actually focus on blockchain or cryptocurrencies. The assets that were acquired were trust units (shares) in a management company for a private equity fund that invests in at least 12 disparate sectors, including blockchain and cryptocurrencies.

According to the orders of suspension by the SEC, the companies all set off alarm bells for the regulators when Victura Construction and PDX Partners issued press releases on January 4, 2018, related to the pending share acquisitions. Cherubim Interests issued a press release on January 3, 2018, to the same effect but was also cited by the SEC for its delinquency in filings with the SEC.

All three companies are helmed by CEO Patrick Johnson, former NFL journeyman wide receiver. All three companies are penny stocks with outdated financial information and unaudited or poor bookkeeping. These so-called “penny stocks” are typically a great concern for U.S. regulators as they are often the subject of attempted price manipulation or fraud.

All of the companies announced near the beginning of the year the acquisition of trust units from NVC Fund LLC, the trust manager of  NVC Fund Holding Trust, which commits private equity investments into everything from natural resources and entertainment to blockchain technology and “fintech cryptocurrency.” According to the NVC fund website, the trust manages assets valued at over $128 billion.

Investments made from all three companies were for sums that far outpaced any estimated market cap or gross profit of the companies. PDX Partners announced a purchase of $350 million in trust units, despite only having $29,000 in operating income at the end of 2016 and negative cash flow from operations.

Cherubim Interests announced a purchase of $250 million in trust units, despite having negative operating income and negative cash flow from operations for their 2016 year-end.

Victura Construction announced a purchase of $100 million in trust units, while they too had negative operating income and operating cash flow for the last year they reported financials in 2014. All told, Mr. Johnson’s companies would be taking on $700 million of investments in NVC Funds.

Instead of focusing on the questionable ability of these three companies to afford the price of these trust units, the underlying valuation of the assets themselves, or the fact that the companies all have limited transparency on their websites in public filings, the SEC devotes half of the press release to warning investors about investing in companies pivoting to blockchain or cryptocurrencies.

Michele Wein Layne, Director of the Los Angeles Regional Office, stated, “This is a reminder that investors should give heightened scrutiny to penny stock companies that have switched their focus to the latest business trend, such as cryptocurrency, blockchain technology or initial coin offerings”. It should be noted that the SEC states that Cherubim Interests executed a financing commitment to launch an ICO. This is the only reference in the suspension orders to the idea that any of the three companies dabbled in the cryptocurrency or blockchain space.

Of course, there may be more clarifying information the SEC has yet to disclose in future actions taken regarding the three companies that would clarify how the acquisitions were directed toward the blockchain and cryptocurrency aspects of NVC Fund’s investments. However, no press announcements by the companies seem to have specifically cited the two sectors, and no factors in the SEC suspension orders suggest that the companies were targeting the NVC Fund investments for those particular two categories.

The stated strategic focuses of PDX partners, Victura Construction and Cherubim Interests are: telecom, disaster recovery and restoration construction, and alternative construction projects, respectively.

This article originally appeared on Bitcoin Magazine.

Posted on 16 February 2018 | 2:38 pm

CFTC Advisory Committee Recommends Creation of Virtual Currency Subcommittee

CFTC Advisory Committee Recommends the Creation of a Virtual Currency Subcommittee

On Wednesday, the U.S. Commodity Futures Trading Committee’s (CFTC) Technical Advisory Committee (TAC) held a public meeting at its Washington, D.C., headquarters. During the meeting, members of the Bitcoin and cryptoasset industry shared information regarding this emerging market and offered guidance on how the CFTC may approach regulating the space in 2018.

Multiple participants in the public hearing made comments to differentiate between different types of cryptoassets and their associated technologies.

Potential regulation around cryptoasset exchanges was also discussed as a potential area for further regulation, as has been noted by regulators worldwide over the past few months.

By the end of the portion of the public hearing dedicated to virtual currencies, the TAC voted unanimously to recommend that the CFTC create a subcommittee for this new asset class.

Differentiating Between Different Types of Cryptoassets

One of the key points made by those who were invited to speak about the cryptoasset industry was that all of these tokens or coins should not necessarily be treated equally. For example, during his opening remarks, Coin Center Executive Director Jerry Brito discussed the differences between traditional cryptocurrencies, such as bitcoin, and initial coin offerings (ICOs).

“Cryptocurrencies like bitcoin are commodities, of course, as the SEC has previously [said].  Questions remain however about the borders [around] these categories and about how one can responsibly share tokens to future investors,” noted Brito.

Special Counsel Gary DeWaal of Katten Muchin Rosenman LLP went on to discuss the often-mentioned Howey Test and how it helps determine which types of tokens are securities under U.S. law. In DeWaal’s view, the CFTC could offer assistance in differentiating between commodities and securities in the cryptoasset market.

“Ultimately there has to be some clarification. The distinction between a commodity, the distinction between a security, may seem (from a common sense perspective) clear, but there are very, very important issues around those that I think this committee could very much [help clarify],” said DeWaal.

Notably, DeWaal also pointed out that cryptoassets are “critical” to decentralized ledgers.

“They are the mechanism in proof-of-work blockchains where miners are rewarded: In proof-of-state blockchains where fees are paid, these are the ways you incentivize folks to keep the system together. If you’re only talking about centralized ledgers, sure, you don’t need to worry about coins,” DeWaal added.

Regulation of Cryptoasset Exchanges

RGM Advisors’ chief executive, Richard Gorelick, also made an appearance at the CFTC’s public hearing, and he focused on the market structure of cryptoassets during his brief opening presentation (PDF). Gorelick was one of the only people in the room who referred to the subject at hand in terms of “cryptoassets” rather than “cryptocurrencies” or “virtual currencies.”

One of the key areas of focus for Gorelick during his presentation was the problems associated with current cryptoasset exchanges. More specifically, Gorelick discussed the issues associated with connectivity of liquidity between global exchanges.

“Generally speaking, I think trading on these [exchanges] can be challenging, particularly if your goal is to trade across multiple spot exchanges. It’s difficult to weave liquidity across exchanges and jurisdictions due to a number of factors,” noted Gorelick.

Some of the factors limiting the movement of funds between various exchanges pointed out by Gorelick include:

  • Technology
  • Concerns about deceptive trading
  • Lack of standard best practices
  • The fickle nature of banking relationships
  • Capital inefficiency
  • Security and transparency
  • The slow speed at which money and assets can move in and out

In the face of these issues found on cryptoasset exchanges, Gorelick hit on the large scale of the over-the-counter (OTC) markets.

Representatives from LedgerX and CME also provided updates on the state of the Bitcoin futures market later in the public hearing.

After gathering information from representatives of the cryptoasset industry and asking questions, the TAC voted unanimously to recommend that the CFTC create a new subcommittee focused on virtual currencies.


This article originally appeared on Bitcoin Magazine.

Posted on 15 February 2018 | 2:32 pm

Blockchain Startup Po.et Nabs Former Washington Post VP as Its New CEO

Blockchain Startup Po.et Nabs Former Washington Post VP as Its New CEO

Po.et, a blockchain startup that allows content creators to create time-stamped titles for their written, visual and audio work, has announced Jarrod Dicker, who has held positions at the Washington Post, Time Inc. and Huffington Post, as its new CEO.

It may be the perfect match. Po.et wants to change the way content creators manage their work and Dicker has a history of ushering traditional news outlets into the digital age, so they are not solely reliant on advertising and subscriptions.

Dicker left his position as VP of innovation and commercial strategy at the Washington Post to join Po.et.  

“At Po.et, we are constructing what this industry needs  —  a new environment where creators are paid for what they can do instead of what is required of them by an old and broken paradigm,” he wrote in a blog post announcing the move. He explained that he left his former position at the Post because “I believe in that future.”

Dicker’s role at Po.et will be to oversee strategy and engineering and product development on the Po.et platform. He will also oversee Frost, an API and set of development tools that Po.et launched last week for content creators and bloggers.

In a statement, Dicker said he plans to leverage his experience “across media, education and corporate America to elevate this platform as the standard for digital content ownership rights.”

After joining the Washington Post, Dicker helped form the RED team, which stands for research, experimentation and development. Prior to that he worked at RebelMouse, a company founded by the core Huffington Post technology team, where he helped build the company’s future content management system. He also worked at Time Inc., taking the lead on emerging products, and at Huffington Post, originating native advertising.  

“Jarrod’s unique vision enables him to drive creative, scalable products and evangelize innovation,” said Tyler Evans, board member of the Po.et Foundation in a statement. “We look forward to his enthusiasm for media and track record of building cutting-edge technology for publishers to Po.et.”

Po.et. provides tools to publishers and content creators who want to automate the licensing process without involving third parties. All content licensing terms are enforced by smart contracts. Contract details, as well as ownership rights and other descriptions are then hashed and cryptographically registered on the Bitcoin blockchain.

Po.et, which held a token sale on August 8, 2017, now boasts an online community of more than 40,000 developers and creators on social media platforms, such as Telegram, Reddit and Twitter.

In addition to his role as CEO at Po.et, Dicker sits on the board of advisors for Rutgers University Center for Innovation Education and MOGUL Inc., a technology platform that enables women to share ideas and access content based on their personal interests. Dicker also supports a Carnegie Mellon University program on the value of social advertising in publishing. 


This article originally appeared on Bitcoin Magazine.

Posted on 13 February 2018 | 10:34 am

Bitcoin tops $10,000 milestone

Posted on 29 November 2017 | 2:30 am

Bitcoin reaches new all-time high: $3,000

Posted on 12 June 2017 | 1:06 am

CRYENGINE now accepts Bitcoin

Posted on 29 March 2017 | 1:24 am

Consulting firm EY Switzerland accepts Bitcoin

Posted on 26 November 2016 | 12:47 am

Bitcoin Trading Bots

There have been a wide variety of situations in which algorithmic trading programs have proven to be beneficial for investors. However, investors who only trade a cryptocurrency can also take advantage of bitcoin trading bots. Through bitcoin bot trading, traders can become more flexible and prompt, minimize errors and process information more rapidly. At this… Read More »

Posted on 8 November 2016 | 6:20 pm

Steam accepts Bitcoin

Posted on 29 April 2016 | 1:09 am

Major Magazine Publisher to Accept Bitcoin Payments

Posted on 18 December 2014 | 12:43 pm

Microsoft accepts Bitcoin

Posted on 11 December 2014 | 5:06 am

Mozilla accepting Bitcoin

Posted on 20 November 2014 | 1:55 pm

Wikimedia Foundation Now Accepts Bitcoin

Posted on 30 July 2014 | 3:14 pm

airBaltic - World’s First Airline To Accept Bitcoin

Posted on 22 July 2014 | 11:03 am

February 20, 2018 -
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