Sunday, May 10, 2015
Weekend Roundup: Israel Is a Bitcoin 'Forerunner,' Peter Todd Responds to BitGo's Patenting Dispute
Patriot Act Reform: A Small Victory Against the Government’s Surveillance Distraction
GetDotBit Has Registered Over 700 Decentralized .Bit Domain Names, and Counting
Saturday, May 9, 2015
Mycelium Gear Offers Merchants Direct, No-Fee Payment Processing
Mycelium has announced the launch of a new merchant processor, Mycelium Gear. Merchants can now receive payments directly into a Mycelium or Electrum wallet free of charge by installing a payment widget on their website or by integrating its open-source API into their backend.
In Friday’s announcement on r/Bitcoin, Mycelium Community Manager Dmitry Murashchik states, “Mycelium Gear is a merchant processor which demonstrates something that has never been possible before Bitcoin: the ability for merchants to use a full featured merchant processor to receive payments online, and have the money go straight into their own wallets, even if that wallet is running on their own phone in their pocket.”
According to Murashchik, Gear “generates invoices with unique addresses for every customer, automatically calculates the exchange rate, and sends a payment confirmation to the site’s shopping cart software. Basically, instead of coding a basic thing from scratch on your own, you can use advanced shopping cart software that tracks customers, invoices, addresses, revenues, etc., and add this little plugin to it to allow it to process bitcoin transactions too.”
Gear is built on top of the open-source Straight Server payment processor, originally developed by Roman Snitko in 2014. “It turned out [Mycelium] wanted to build the exact same thing and were looking for people capable of doing that,” said Snitko in an email to Bitcoin Magazine. “They liked that the project was open source and already the most important parts were functioning. So we decided to join our forces on this one.”
Straight Server uses the BIP32 protocol to generate a new bitcoin payment address for each customer order. As a result, merchants are able to receive payments directly from customers without Mycelium ever touching the funds. Once the payment is sent, Gear is able to track it through the Bitcoin blockchain. This capability is the pivotal feature of Gear: it is a tool that watches the blockchain and detects new transactions at the addresses associated with its clients.
From there, Gear offers the same features as most other payment processors: webhooks that notify your website of the transaction, automatic currency conversion, and notification of over- and underpayments. A notable exception to this common ground is that Gear bypasses traditional payout structures associated with other payment processors. Funds are transferred instantly and directly into merchant wallets.
In the comments following the original Reddit post, Murashchik points out that it is also possible to integrate Mycelium Gear with a Trezor hardware wallet, with Ledger support “coming soon.” It is also useful for sites that accept donations in bitcoin.
At the moment, prices can be set in USD and EUR. Bitcoin prices are automatically adjusted based on the price of bitcoin at the time of purchase. Gear has plans to introduce fast EUR withdrawals in the EU in the near future.
“What’s important to emphasize is that there are two things to supporting currencies: setting prices and conversion of received funds,” Snitko explains. “The first one is easier and we plan to introduce many different currencies in a relatively short period of time. The second one is more complicated due to all the regulatory problems and also the fact that by design Mycelium Gear doesn’t touch the merchants money and thus has no ability to convert them at this point.”
Mycelium Gear adds to its trustless, hands-off approach to payment processing by eliminating personal information gathering, approvals, and KYC/AML requirements. According to the company website, “Because Gear doesn’t hold or even touch the money, we don’t need to know any intrusive information about the merchants.”
“Mycelium’s hope is that Gear will encourage even more merchants to adopt bitcoin and completely change the way merchant transactions are done,” Murashchik adds, “thus continuing our goal of decentralizing everything, improving privacy, and eliminating unnecessary third parties in the Bitcoin economy.”
Suril Desai: ‘If the Industry Does It Right, Not Much Regulation Should Be Needed’
France to Tighten Regulations for Financial Instruments ‘Including Cryptocurrencies’
Inflation, Negative Interest Rates and the ‘New Normal’
Jaded Satoshis: An Interview with Kristov Atlas
Friday, May 8, 2015
Andresen Proposes Block Increase, Leading to ‘Very Important Debate’
Post FinCEN Penalties, Ripple Labs Adapts and Moves On
The digital currency company Ripple Labs has adapted in response to recent penalties and fines by FinCEN for reportedly “willful violations” of the Bank Secrecy Act. As industry analysts have pointed out, since the violations, the company has drastically increased its anti-money laundering (AML) efforts. But this might just be the beginning of more strict regulatory actions against digital currency companies.
Regulators shut down previous digital currency businesses that violated financial regulations such as Bitinstant, but Ripple Labs has escaped this fate. Many have attributed this to the company’s proactive and aggressive measures to comply with regulations since the 2013 guidelines for digital currency companies published by FinCEN and its willingness to work with regulatory agencies.
“[A]s the government has recognized in today’s agreement, Ripple Labs has cooperated extensively with the government during its investigation and has taken a number of important steps over the years to build and strengthen our compliance programs,” reads a statement by Ripple Labs spokeswoman, Monica Long. “These measures include: registering a subsidiary, XRP II, LLC, as a money service business to handle XRP sales for the company in 2013, in response to and in an attempt to comply with the March 2013 Guidance by FinCEN; hiring a chief compliance officer in January 2014, a general counsel, and a BSA officer in February 2015; and continuously enhancing an anti-money laundering program,”
Banking Partners Are Committed
“Ripple is infrastructure technology for banks to build compliant payment networks. The settlement announced today does not impede our ability to execute on those bank integrations. We’re continuing to focus on working towards an Internet of Value,” said Ripple Labs in a public statement.
Bitcoin Magazine reached out to several banks and financial institutions that are in discussions or partnerships with Ripple Labs to see if the recent penalties have affected their relationship with the digital currency company. Though none were very forthcoming, no one said they are ending their partnership the digital currency company based on the settlement.
Matthias Kröner, co-founder and CEO of Fidor Community Bank, an innovative European Bank which ha partnered with Ripple for international transfers, suggested the bank’s relationship with Ripple hasn’t changed since the FinCEN penalties but wasn’t willing to discuss the matter in detail.
“If we would see a problem with one of our partners, we for sure would discuss such a question confidentially with those partners,” Kröner said.
A similar answer was given by Kristin Kelly, director of global corporate communications at Western Union, who said the global remittance company still stands by their comments made earlier this month. According to those comments, Western Union is in preliminary discussions with Ripple Labs to launch a pilot settlement program.
“Now it looks like Ripple addressed the issues and paid the fine and are moving forward, and that is how it usually works when a bank or a casino or another money-service business is involved,” said vice president for payments and cybersecurity at the American Bankers Association, Steve Kenneally, in interview with American Banker. The fact that the process is working like it would with any other company could work in Ripple’s favor, he said.
Ripple May Be Clear, but Other Bitcoin Companies Could Be Next
For a long time, just like Ripple Labs, Bitcoin companies operated in a sort of financial ‘Wild West’. It was uncertain where these new category of companies fit within the law and current financial regulations. Only recently have digital currency companies received guidance from regulatory agencies on the matter, although some uncertainty still exists.
Carol Van Cleef, co-chair of the global payments practice group at the law firm Manatt, Phelps & Phillips, told American Banker that early Bitcoin companies might face similar penalties for prior regulatory sins.
“FinCEN clearly has the intention to hold entities responsible from the time they flip the switch to turn on their business model. Compliance is expected from the beginning; they make a big point of the fact that [Ripple Labs] was operating for a period of time without being properly registered as an MSB,” she said. “FinCEN is only beginning its enforcement examination process of MSBs in the digital currency space; as with any industry in the first round of compliance examinations, we’re likely to see a number of companies being cited for compliance shortcomings.”
Moonga Game Series to Utilize Blockchain for In-game Assets and Crowdfunding
Mobile games are one of the many technologies that have begun to integrate cryptocurrencies. For example, Shaq Fu: The Legend Reborn has integrated Quarkcoin for in-game payments, and new games based on the blockchain, using Huntercoin and Motocoin, have emerged.
EverdreamSoft, a Swiss mobile gaming company, is a part of this movement, and has committed to using bitcoin with its star franchise. Using the Counterparty protocol, EverdreamSoft plans to place their online trading cards on the Bitcoin blockchain, along with a new cryptocurrency called BitCrystals.
EverdreamSoft rose to popularity in 2010 with the release of their app Moonga, one of the first free-to-play games for iOS or Android. The online trading game has been ranked the top role-playing game in the Japanese App Store, and has been downloaded more than 250,000 times.
In order to compete with larger and better-funded competitors such as Blizzard Entertainment, EverdreamSoft continues to innovate in hopes of regaining the spotlight. Based in Geneva, the city of private banking, Bitcoin has long been on the company’s radar.
“I believe that blockchain technology will create a profound change on our society,” said CEO Shaban Shaame via Skype chat . “We are at the dawn of complete change in how people exchange value over the Internet.”
EverdreamSoft plans to take advantage of smart properties on the blockchain through its integration with Counterparty. Rare digital game cards in Moonga will be placed on the Bitcoin blockchain so that they can be used in other Moonga games and easily transferred between players by sending a transaction .
The first new video game to take advantage of this ability will be Spells of Genesis. Moonga was a pure card game, requiring the player to build the perfect deck of Spells with which to battle. Spells of Genesis, however, adds an arcade twist, with additional elements of timing and strategy. The Spell cards are represented as orbs, which you must launch at enemies on the playing field to drain their life before they drain yours.
BitCrystals, the cryptocurrency native to Spells of Genesis, will be used to fund the development of these features. One hundred million BitCrystals will be created on the blockchain as Counterparty assets, and 70 million of those will be sold in a presale lasting 30 days.
BitCrystals derive their value from their utility and purchasing power in the Spells of Genesis game. Although you can effectively buy or sell cards in any currency, BitCrystals are necessary to purchase booster packs and bring new cards into the economy. The BitCrystals are then burned or recycled.
EverdreamSoft claims the crowdsale will begin as soon as they gain enough social media traction, and that development is under way. Currently, only testers have access to the alpha version, but a beta version is scheduled to be released next month.
BitSpark Closes Exchange to Focus on Establishing Bitcoin Remittance Service
Asian Bitcoin company BitSpark announced the temporary closure of its bitcoin exchange earlier this month so the company could focus on its pioneering bitcoin remittance service. The company also recently expanded into mainland China through a partnership with Chinese Bitcoin company Melotic.
Melotic recently shut down its own crypto-currency exchange, citing a lack of demand for the service. A company blog post read, “Simply put, we did not experience enough growth in this product to justify the ongoing costs of development, maintenance, and support.” According to BitSpark CEO George Harrap, his company closed their exchange for similar reasons.
“Recently our remittance business has [been] taking off with rising support for our key remittance corridors of the Philippines, Indonesia, Australia, Hong Kong and China. Given this, we have decided to temporarily retire the exchange and shift focus on building our remittance service as it is the best direction for Bitspark at this stage,” read a BitSpark press release.
The First End to End Cash Bitcoin Remittance Service
Speaking with Bitcoin Magazine, Harrap said the company might reopen its bitcoin exchange in the future, but for time being it will focus on what it does best: remittances. BitSpark was the first company to offer a “bitcoin in the background” remittance product, meaning senders and receivers didn’t have to fret with the hard-to-understand digital currency, but still got the benefits.
That “cash-in, cash-out” philosophy has since taken off, with many Bitcoin companies hoping to increase bitcoin adoption and remove the complexities of bitcoin. BitSpark will publicly announce a new remittance product at the Innotribe 2015 Asian Semi-Final showcase, a fintech startup competition run by the SWIFT payment network.
Harrap was short on details about the new product, but he did say this when asked about what was still missing from the company’s remittance offering:
“Onramps and offramps are still very difficult for Bitcoin. If you are in a less developed or small country, it may be very difficult buy or sell bitcoin, making remittance impossible. With a ‘bitcoin in the background’ product users don’t have to worry about that, but, nonetheless, liquidity is an issue and something we’re looking to solve.”
The CEO also shared that though the company set out to help individual senders of remittances, the majority of the company’s customers are businesses sending money to other businesses aboard. Though not its originally targeted customers, the new B2B customers were welcomed, and the company now will focus its efforts on better serving that new demographic. Harrrap added that the extra liquidity brought by the larger customers could help all customers, small and large.
Melotic Partnership
Like BitSpark, Melotic is not calling its quits when it comes to Bitcoin. Though the company has closed its exchange for good, it will be launching a new product, supposedly months in development, soon. Harrap was also unwilling give any details about the nature of his company’s partnership with Melotic, but did said the two companies will be working together extensively in the future.
“We are going to be working together to bring several new and innovative Bitcoin products and services to mainland China,” he said. “The country accounts for the majority of bitcoin trading volume but is still a very untapped market when it comes to bitcoin.”
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