Newly incorporated Isle of Man Bitcoin company Garigus Limited, announces founding shareholders paid their shares in Bitcoin, an element qualified as a key milestone in the development of the island's
Monday, October 13, 2014
Founding Shareholders Pay Shares in Bitcoin in the Isle of Man
Newly incorporated Isle of Man Bitcoin company Garigus Limited, announces founding shareholders paid their shares in Bitcoin, an element qualified as a key milestone in the development of the island's
The Bitfilm-Festival on Bitcoin Now Taking Place on 4 Continents, Schedule Revealed
Back in August, CoinTelegraph reported on the Bitfilm-Festival and the organizers’ plans to take the event globally. Now, the schedule has been unveiled for the festival that is scheduled to take plac
Indysci Founder Isaac Yonemoto: ‘I Was Presented with a Once-in-a-Lifetime Opportunity to Develop a Drug without Patents’
Now CoinTelegraph had an opportunity to explore Isaac Yonemoto's, PhD, personal vision Indysci, Bitcoin along with the new opportunities offered by cryptocurrencies for scientific funding.
Sunday, October 12, 2014
Bitcoin Analysis: Week of Oct 12 (Don’t Blame the Bearwhale)
The week of October 12th Bitcoin Analysis by Tone Vays.
CoinTelegraph in Russian Now Available
Did you know that CoinTelegraph, the go to source for cryptocurrency news and community opinion, is also available in other languages?
Saturday, October 11, 2014
The Alt-Cracks: Altcoin Stories That Fell Through The Cracks
Today, we have problems arising after Darkcoin's Darksend went open source, Charlie Lee dropping big hints about Litecoin, Unobtaium celebrates its birthday and a few releases and NXT is prepping for
Darkcoin Gains Wider European Exposure, Now Trading at Danish Exchange CCEDK
Danish cryptocurrency exchange platform CCEDK announces it has started accepting Darkcoin, allowing the privacy-centered digital currency to gain wider European exposure.
Friday, October 10, 2014
Coinme Brings Bitcoin to the University of Washington
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.”
Merchant Mining and the Proof-of-Commerce Protocol
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.
A New Way to Fund Ideas: Crowdfunding, Crypto-Assets, and the Future of Decentralized Investments
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.
Bitcoin Foundation Urging NYDFS to Provide ‘More Research and Analysis on Bitlicense’
The fight over New York State’s “Bitlicense” proposal continues unabated as the Bitcoin Foundation pressures the state’s Department of Financial Services to follow its own rules.
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