Wednesday, June 3, 2015
Decentralized Prediction Market Augur Reaches XCS Finals in ‘Breakthrough’ Category
KnCMiner Deploys ‘More Environmentally Friendly’ 16 nm Bitcoin Mining Chips
Karpeles Warns of another Mt. Gox, but BitFinex might have the Answer
JUN 3 DIGEST: KnCMiner Unveils New 16 NM Chip, Lawsky to Discuss Bitcoin Regulation in Washington DC
Trezor Offers Password-less Login to Other Websites; Adds Dash
Tuesday, June 2, 2015
Finding Answers in the Bitcoin Block Size Debate Using Prediction Markets
The Battle for Mobile Cash: An Interview with Bill Barhydt, CEO of GoAbra
With the current onslaught of bitcoin-related applications and services it’s an interesting time to be a part of the greater digital currency community. The blockchain possesses a seemingly infinite number of use cases, and those who can think creatively and be the first movers in a certain sector are pioneering some of the those brilliant ideas into our everyday lives.
The creation of many of these apps allow for the seamless and frictionless transference of value in a myriad of ways. GoAbra, founded by its CEO Bill Barhydt, is currently preparing to disrupt the status quo and bring the future of cash to anyone with a mobile device. Bitcoin Magazine recently spoke with Barhydt on his personal history, and gained some intel on the vision of his company’s mobile payment/remittance service, Abra.
Barhydt is a veteran in the payments technology/mobile industry, and has been working in the field for more than 20 years, going back to his days at Netscape directing business development; working on projects throughout the years in e-commerce, and mobile wallets almost 10 years ago. Barhydt has historically been ahead of his time, and spoke a bit about the company:
“I got the idea for Abra quite a long time ago. The holy grail is to be able to store cash on a smartphone and take it anywhere. I always knew what I had to do in a hyper-connected world. But there were a lot of underlying issues: handset compatibility, cost of bandwidth in developing markets, cost issues. I had an ‘aha’ moment where I realized all the tools were finally available for a global network. This was the impetus.”
The tools are all here. But the Bitcoin blockchain is the one essential piece of the puzzle that is finally enabling a service such as Abra to finally exist.
We asked Barhydt what his initial reaction was when learning about bitcoin and the Bitcoin white-paper:
“I was one of the first people to read the white-paper. I’ve been on these mailing lists since back in my ’90s long-hair days. I had been tracking it and staying current. When I saw the link, initially the title grabbed me, and I had done enough work to know anything mentioning ‘decentralized’ is a big deal. People just thought ‘Bill’s off on another one of this tangents.’ I had printed it out and I poured over it late into the night. I knew it was a total game-changer.”
Finally having these tools in place, Barhydt knew what he had to do. But what ultimately lead him to come up with the idea for “Abra” and what does he think of the other emerging remittance platforms in the bitcoin industry?
“Don’t look at ‘Abra’ like it’s a remittance platform. Remittance is just a use case. Remittance is more a man-in-the-middle transfer solution. It’s a notable business, yes, but with Abra we’re turning phones into banks. And, because you store from your phone, you can do P2P transfer with anyone without a intermediary.”
This is a great example of how Abra is differentiating itself from the competition that simply wants to aid in the transfer of funds digitally. Barhydt went on to discuss a few more points”
“Once you have a P2P (Peer-to-Peer) model it’s no longer remittance, it’s a P2P transfer banking solution. Eliminating intermediaries makes for a cheaper, more secure and robust system with less middlemen. One of the goals of Abra is make the best money transfer and payment solution in the world, replacing them with a P2P model for moving money around. At some point Abra is going to have the ability to make payments as well. Banks are not at risk from us; we don’t do credit, service loans, not a notary, etc. Our plan is to more so replace cash than banks. PESA in Kenya is a good example of this. The first generation of consumer Bitcoin apps will replace cash-based systems. “
Something such as Abra that seeks to use the blockchain to provide more freedom back to the people from a financial standpoint is seen as a positive and is reminiscent of a recent post on Fortune. Using blockchain technology allows for a more distributed financial system that lends power back to the people who need it the most.
The blockchain is great for building next-generation financial applications. But what else is Abra’s system going to do to maintain its major differentiation? Barhydt shared what success looks like in the short term for Abra.
“I want to see Abra Tellers live in dozens of countries in the next year with millions of consumers transacting with each other.”
Abra “Tellers” are a pivotal part of Abra’s magic in making money transfer more seamless. The tellers allow for you to add cash, or withdraw from your Abra app by finding the nearest trusted Abra teller and exchanging cash. You can also deposit cash into your account via a debit card.
Barhydt seems assured his short-term goal is achievable. But the long-term goals of an innovational organization such as Abra should always be considered.
“We gotta sell it [Abra] to consumers first. An incredible number of technical challenges still await while we continue building Abra. Smart contracts, user experience, building out our trusted-teller networks, actively engaging with regulators to explain how Abra works to gain more approval; it’s a never-ending process.
“Tellers are realizing they can make money. There are many pre-registers in multiple countries already. And, there’s no current marketing or PR right now. Abra Tellers can make more money with the same cash they have. Faster is the incentive here. We’re creating a positive feedback loop of making money over time. People are getting that, slowly. Time will tell. There exists a chicken and an egg problem we have to solve.”
What everyone else in the Bitcoin community will care most about is the execution during the launch of this platform. We all love new features, however. So, we asked if there is anything in the pipeline we can look forward to as they continue to spread to other locations with their new innovative service.
“Payment APIs have been the number one request. ‘When can online merchants and etc. use Abra as a payment vehicle?‘ is a question we get often. We’ll be releasing that in the next few months. There are a bunch of other goodies, too, that we’re not quite ready to announce yet as well.”
Abra is revolutionary: no transfer fees, a secure and private system that is instant and convenient, no foreign exchanges risks or bank account required.
We also asked Barhydt what other initiatives in the Bitcoin space he’s most excited about.
“Exchanges are good, they create the ecosystem. I also read about a company called Streamium, I’m very impressed with them and excited for that use case. There aren’t enough startups solving consumer problems and negative affairs. We designed Abra to rid the consumer of pain. Using bitcoin came second. Nothing was better than using bitcoin.”
A blend of Streamium’s real-time streaming service and Abra’s upcoming payment API would be a positive move for the bitcoin industry. It makes for a sensible combination of complimentary services. Both are great examples of platforms using blockchain technology to empower people.
At the end at the end of our extended discussion, Barhydt shared this food for thought about Abra:
“As a company, we believe in the rights of the consumer and taking a part in commerce with their money. At Abra, we believe the right to the consumer comes before the government. We believe there are bad people out there who will do bad things, and government plays the role of being that intermediary; but that should not be at the expense of human rights. We’re staunch proponents of consumers rights, and we’re engaging with governments and regulators and understanding their perspectives and insights to reduce surprises. Regulators have not been a real issue thus far, with exceptions of that Ripple nonsense. Things are early. We think gaining mindshare and being transparent will eliminate the possibility of pushback.”
This author, personally, is very excited for the future of digital cash.
All images courtesy of Abra.
Economists Disagree on Proposals for Alternative Currencies in Greece
The Greek crisis and the prospect of Grexit – the exit of Greece from the Eurozone and perhaps even from the European Union – continue to make headlines. The government of Alexis Tsipras and his euro-skeptic, anti-establishment party Syriza, is trying to negotiate solutions for the struggling economy of Greece that would keep the country in the E.U. and the Eurozone, but the worst-case solution – Grexit – continues to be seen as a perhaps inevitable alternative option.
Greece’s Finance Minister Yanis Varoufakis wrote a blog post in February proposing a similar IOU-based currency, which he dubbed Future Tax Coin (FT-Coin). Varoufakis is not impressed by bitcoin as a currency, but he is persuaded that its underlying technology could be put to effective use in troubled economies.
“[T]he technology of Bitcoin, if suitably adapted, can be employed profitably in the Eurozone as a weapon against deflation and a means of providing much-needed leeway to fiscally stressed Eurozone member-states,” said Varoufakis. His post explained in detail how Greece could create an FT-Coin payment system with a Bitcoin-like algorithm to make it transparent, efficient and transactions-cost-free.
Recently, CNBC contributor Brian Kelly, the author of “The Bitcoin Big Bang: How Alternative Currencies Are About to Change the World,” proposed a similar bitcoin-like solution for Greece’s troubled economy. Kelly notes that Greece could stay in the Eurozone and begin repaying its debt, but for that it needs a method to monetize state-owned assets while still maintaining ownership. Kelly is persuaded that a digital currency based on blockchain technology could provide the solution.
Now, one of the most prestigious financial news sites analyzes whether the creation of an alternative currency could help toward a solution of Greece’s financial problems. “Could a Parallel Currency Help Save Greece From Drowning?” asks Peter Coy on Bloomberg Business. Coy reports that even German Finance Minister Wolfgang Schaeuble has said that Greece may need a parallel currency if talks with creditors fail, according to sources familiar with Schaeuble’s views.
“One version of the idea calls the second currency a TAN, for tax anticipation note. Another calls it a grec, for government reimbursement exchange credit. There’s also the TCC, for tax credit certificate,” notes Coy, and adds a mention of Varoufakis’s proposal on the FT-coin, “where FT stands for future taxes and coin refers to bitcoin.”
The common idea is to free up Euros to pay foreign debts and to juice economic growth by spreading more money around domestically. The money would be an IOU issued by the Greek government that could be passed from one person to another.
“The government could print a bunch of the new currency (or create electronic ledger entries if the currency is virtual) and spend it on whatever governments buy, including civil servants’ salaries,” says Coy. “People would in theory be willing to accept the money because it could be used to pay taxes. “
The Bloomberg article outlines contrasting reactions of notable economists, ranging from enthusiastic to strongly skeptical. Especially interesting is the observation of Robert Parenteau, owner of investment and economic consultancy MacroStrategy Edge, who has written about the TAN as an electronic parallel currency and advised the Greek government in collaboration with economist Jamie Galbraith, who has worked closely with Varoufakis.
“Maybe the idea will take root in Spain or Italy,” said Parenteau.
Photo epSos. de / CC BY 2.0
Ecuador Pushes Forward on Upcoming Electronic Currency System
The government of Ecuador is pushing forward to establish its national electronic currency, PanAm Post reports. The central bank has given 360 days to all financial institutions in Ecuador to get on board. Top financial institutions with assets of more than $1 billion USD will have only 120 days to comply.
Ecuador’s official Resolution 064-2015-M, announced on May 25, states that all entities of the public, private, and cooperative financial sectors must join the government-run Electronic Currency System as “Macro Agents.” Financial institutions will have to provide an electronic tender option for all the services they currently offer and those they will subsequently offer. The text of the resolution (in Spanish) is available online on the government’s website.
The new resolution comes less than one year after the government asked Congress to approve the creation of the new currency, with the condition that its adoption should be voluntary, El Diario Financiero reports. Though President Rafael Correa criticized the use of the U.S. dollar in the country, because it limits the ability of the government to incentivize falling exportations, he said his administration is not planning to stop using the U.S. dollar.
“The new institutional vision of the central bank considers financial inclusion and the modernization of payment systems as strategic objectives.” states the resolution, which was approved on April 16 but officially published last week. The new electronic currency “seeks efficiency in payment systems to promote and contribute to the economic stability of the country.”
Falling oil prices – oil exportations account for 25 percent is the country’s income – and the rising exchange value of the U.S. dollar due to the recovering U.S. economy have caused a liquidity crisis in Ecuador.
The new electronic currency isn’t related to bitcoin. The U.S. dollar has been the only official legal tender in Ecuador for the past 15 years. Alternative currencies such as bitcoin are banned. The citizens of Ecuador who want to invest in bitcoin or other digital currencies can do so only outside of Ecuadorian territory. Not surprisingly, the strong opposition of the government of Ecuador is motivated by the fact that bitcoin has no regulating or supervisory body.
Bitcoin users in Ecuador criticize the government’s Electronic Currency System because it eliminates privacy from all financial transactions.
“With the electronic currency all transactions are linked to your identity, something which doesn’t happen with physical money, so it seems like a de facto acquired right is being progressively lost,” bitcoin advocate Luis Nuñez told the PanAm Post. “Bitcoin has a decentralized model that has clear rules: It’s transparent and public, it promotes freedom, and it’s adopted freely; the other is a centralized model that seeks to control information, and in which the rules conform to the political vision of the day.”
Other governments are warming up to the idea of digital currencies controlled by the state – of course, with the privacy aspect taken out. There are rumors of “Fedcoin” in the United States and some kind of “Eurocoin” in Europe. Greece’s Finance Minister Yanis Varoufakis wrote a blog post in February proposing a cryptocurrency dubbed Future Tax Coin (FT-Coin).
Photo FamZoo Staff / CC BY-SA 2.0
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