Thursday, June 25, 2015
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European Banks Rumored to be Monitoring and Reporting Transactions Related to Bitcoin
An anonymous Reddit user who self-identifies as bank employee posted a warning saying that his bank received a memo from the national financial institute, with instructions to report anyone who receives more than €1,000 that may be linked to Bitcoin.
The five-page memo outlines how surveillance works, how the network is monitored and says that some bitcoin exchanges have been unwilling to cooperate with the authorities. The memo is accompanied by a report, issued by E.U. law enforcement agency Europol, stating that 84 accounts in the country (which hasn’t been disclosed) have been flagged as suspect, and 52 are under surveillance and investigation.
The poster says that an earlier related report from the national financial institute is available online. The report is in Dutch and was released on May 21, 2015 by the Dutch Financial Intelligence Unit (FIU) — which likely implies that the undisclosed country is The Netherlands.
The report mentions that bitcoin is used by technology enthusiasts and speculators, but also by criminals who use the digital currency to fund illicit activities and launder money. The report mentions terrorism and child pornography. In 2014 the FIU investigated 75 cases in which bitcoin plays an important role. The results, which led to new investigations, have been shared with foreign financial intelligence units.
The poster says that the bank received a list of IBAN accounts that are already constantly monitored because they belong to high-volume traders and exchanges such as Kraken, Bitstamp and BitcoinD. The bank has to report any transfer above €1,000 that involves those accounts. The bank must also report accounts that receive more than €10,500 per year (outside of salary) if it suspects that the funds originate from bitcoin exchanges.
Of course, anonymous reports should always been taken with a grain of salt, but this warning is substantiated by the openly available report by the Dutch FIU, and it makes sense. Now that governments have taken notice of the fact that bitcoin exists and is used by the people, it seems evident that they are trying, or will try, to force the banks to monitor and report transactions to and from bitcoin exchanges, as well as any other transactions that may be linked to bitcoin.
The stated objective of the governments is to fight money laundering and organized crime, and of course they use hot trigger words such as “terrorism” or “child pornography” to persuade the citizens that what they do is right. Almost everyone hates terrorism and child porn, and most people don’t condone money laundering and large-scale tax evasion. But it seems odd that relatively small transfers of €1,000 should be considered suspect.
All bitcoin users should know that if they transfer more than €1,000 to or from a bitcoin exchange they could be investigated or monitored. That’s likely to annoy those who are paid in bitcoin (for perfectly legitimate work) and must cash out to pay bills and buy food. A better way to avoid surveillance, which is becoming easier, is to pay directly in bitcoin for goods and services wherever possible.
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Bitcoin Now Accepted at Established Cloud Hosting Company Cloudways For All Web Hosting Services
Bitcoin Press Release: Cloudways, a leading managed cloud hosting platform established in 2012, is pleased to announce it is now accepting the P2P currency Bitcoin for all customer transactions. Web apps and stores hosted on Cloudways load on average 100% faster due to special optimizations, utilizing the latest in server load balancing technology.
Based on the open source peer to peer internet protocol, Bitcoin has gradually become the most preferred alternate currency in the world. The integration of Bitcoin payment gateway further demonstrates Cloudways’ innovative approach and love for their customers: giving users the payment flexibility they desire. Cloudways now supports MasterCard, PayPal, VISA, and American Express along with the newest addition of Bitcoin for all managed cloud hosting products.
“Cloudways have always believed in innovation and bringing the best to the cloud hosting community. We are proud to introduce Bitcoin as one of our payment options,” Pere Hospital, Co-Founder of Cloudways said. “We, here at Cloudways, always strive on being the people’s favorite and it is hard to deny the popularity that Bitcoin, a ‘free and open’ currency model, has been able to garner so far. This is what makes this integration a perfect fit for Cloudways and Bitcoin.”
Cloudways always ensures that its platform is secure and up to date with the latest OS patches thanks to the auto-update feature of the state-of-the-art cloud console. The console also enables the users to access over 15+ performance-related metrics with a single click. Cloudways’ console has an integrated monitoring mechanism system which generates pictorial reports for the metrics that help users determine how well their web applications are performing.
Web apps and stores hosted on Cloudways load 100% faster because of the special optimization formula that utilizes the powers of Varnish, Memcached, Apache and Nginx.
After the introduction of Bitcoin, Cloudways continues to show its commitment to serve the needs of its customers and embrace emerging technologies.
To learn more please go to: http://cloudways.com
About Cloudways
Cloudways is a Europe-based managed cloud hosting provider founded in 2012 by CTO Pere Hospital. With over 1500+ clients under the umbrella, Cloudways is one of the leading cloud-hosting providers in the world that offers a completely flexible, hassle-free hosting solution on the most trusted Cloud Infrastructure providers. Find out more by visiting us at Cloudways.
Media Contact:
Name: Muhammad Saad Khan
Email: pr@cloudways.com
Phone: 443300010338
About Bitcoin PR Buzz:
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The Blockchain Meets Big Data and Realtime Analysis
Analysis by Steven McKie.
Big Data. It’s a popular buzzword that you’ve seen all over the Net the past few years. It’s a very serious billion-dollar industry now — with frontrunners from all different niche avenues of data collection and analytics. With the number of unique data sources available to these data-focused companies, the possibilities for analytics and selling that service to others seems exponential. And, with the rise of worldwide ledger-based systems like that of Bitcoin and other blockchain-based technologies, the lines are blurring between what’s kosher in extrapolating data from the public domain and what isn’t.
There are plenty of reasons to gather large amounts of information, especially in realtime. The ability to identify trends, track data from its source to its endpoint, and making inferred correlations between data points is highly sought after – especially the storing of that data for future analyses and historics, primarily in the business/financial world.
But, what about the data on the most private things we do in our everyday lives? For instance, buying things online and in stores, filling prescriptions, sending money to friends. Surely there exist financial institutions and businesses that monitor that information for security/reporting purposes? And surely they report any suspicious activities to the appropriate authorities for matters of national security (see KYC/AML).
Many regulations already exist that require this level of oversight for financial institutions, especially those in the United States. These data analytics help the government and other agencies have more oversight into a hyper-connected populous.
Fair enough.
But what about when all that information is already in the public domain, and not private? Bitcoin and its distributed public ledger system allows for the entirety of all transactions on the network a certain modicum of “pseudo-anonymity.” Every transaction you make on the network is publicly available, but your particular “wallet address” and identity is uniquely known only to you and whomever else you transact with – or the custodial wallet service you may be using, i.e. Circle or Bitreserve. But if you’re using a newly generated address from your personal home wallet to send funds, or using stealth addresses (learn more here), you are more masked from analytics-based systems that would seek to interpret and make inter-correlations in regard to your transactions.
But who’s working on those types of systems? Bitcoin Magazine had a chance to speak with Bill Gleim, CEO of Coinalytics, who took the time to describe Coinalytic’s realtime analytics platform in his own words:
“I realized, as an early victim of bitcoin thefts, there needed to be a better way to understand blockchain activity,” he said. “My original motivation is a mental framework where participants justifiably trust the blockchain and other cryptoledgers with which they interact, particularly in terms of privacy and security.”
What does “understand blockchain activity” mean, though? Gleim went on to explain his plans for the long-term:
“We want to continue providing actionable insights for customers with widely-varying requirements,” he said. “Currently, our data intelligence layer is focused on financial transactions on the Bitcoin blockchain, and we are excited to expand this data intelligence layer to areas like the Internet of Things and smart contracts in the future.”
Hmm. Sounds, interesting, definitely. But, let’s go a bit deeper.
One of the key components of Coinalytics is a system they are calling “Jarvis”. Jarvis, is described on the Coinalytics site as: “A visual and analytical workspace to perform in-depth investigations across the Bitcoin blockchain. Built on top of the Coinalytics back-end, the user interface allows you to visually interact with an enriched version of the blockchain and focus on transactions and entities of interest to analyze relationships and uncover hidden patterns.”
Now it’s starting to make sense. Coinalytics plans to data-mine the Bitcoin blockchain in order to “uncover hidden patterns,” aka monetize the act of making sure you and businesses are not transacting with bad actors or known criminals. Or by helping larger financial institutions better adhere to differing regulations passed at a state and national level as they transition into adopting digital currencies such as bitcoin, blackcoin, and litecoin.
This solution would ultimately allow banks to better trust the individuals they might be interacting with on the blockchain, or aid a governmental body tracking down a series of “bad” transactions to a particular e-criminal.
To be fair, the data is, in fact, publicly open to interpretation. Surely someone was bound to come along and analyze it on an enterprise level. We asked Gleim specifically whether he planned to work with any governmental agencies with his platform.
“Yes,” he said. “We provide data intelligence software to all kinds of companies and organizations.”
Surely there will be individuals who will be wary and suspicious of such a service, bad actors or not. However, people always find a way to circumvent potential privacy busters such as these.
Luckily, with the current release of BlockStream’s open source project, “Sidechain Elements”; the ability to use bitcoin as anonymously as cash will still be possible via sidechains. As well as many other current services that seek to improve the anonymity of bitcoin transactions, such as Dark Wallet, coin mixers, etc. Rest assured, there will always be a solution cropping up that further protects your privacy; that’s the power of open source.
We asked Gleim what his personal views were on Bitcoin anonymity and services as whole.
“As a proponent of personal privacy, I believe anonymity is desirable in many circumstances, and in other circumstances privacy, traceability and reputation is more important,” he said. “I would like to see the market needs for Proof of Identity, Proof of Privacy and even Proof of Anonymity fulfilled by Bitcoin.”
Gleim’s position as Technical Lead at Coinalytics is no surprise. He also has held positions at companies including Google, Motorola, and bitcoin alternative Ripple Labs. It’s great to see that someone who’s developed a system like Coinalytics/Jarvis also understands the importance of anonymity, and how that will play part in its growth, as businesses are built on providing services the blockchain itself cannot fulfill.
The bitcoin transactional flow is shaping up to look like this: major financial institutions transacting openly and transparently via the public ledgers to be regulated accordingly in real-time. And individuals transacting publicly or anonymously via sidechains, stealth addresses or whatever anon-related service they’re privy to.
This contrast is similar to that of current debit/credit card purchases and cash. You give up privacy for mainstream purchases with debit/credit card providers, and then anything private or sketchy can be done via cold, hard cash.
The whole idea of Bitcoin becoming a global financial system is slowly starting to seem a lot more feasible.
It’s great to see the services and systems built around the bitcoin blockchain mature and grow to not only work alongside regulators, but to also see other services/systems emerging to equally subvert them at the same time. And, for those gripping to the eternal libertarian roots of Bitcoin, this is not a fond farewell to the anti-government/privacy-centric ethos you all know and love. This is just a technological compromise.
For now.
Images courtesy of Coinalytics.co
Ripple Discontinues Smart Contract Platform Codius, Citing Small Market
Ripple Labs, maintainer of the digital currency Ripple, has announced it will not continue the development of its smart contract project nearly a year after it was announced, saying the “small and nascent decentralization market” is too immature.
In a blog post, Ripple Labs CTO Stefan Thomas wrote that the company, which recently raised a $28 million funding round, has no plans to work on Codius, a platform that allows people to build distributed applications, and will instead build its own decentralized apps “manually.” He cited a lack of demand as the biggest reason why the project was closed.
“Codius is just a way to make decentralization easier,” Thomas wrote, “it’s an optimization, you don’t need it,” but “If there is demand and corresponding supply there is an obvious incentive for somebody to capitalize on this opportunity.”
Codius’ source code can be found on its Github and is free for anyone to tinker or build with.
Not as decentralized, not as costly
Announced in July, 2014, Codius set out to build a platform that smart contract-distributed apps could be built on top of. Unlike decentralized Bitcoin apps, this platform would use hosting providers, like the ones that run many websites, to host the decentralized applications — not a decentralized network. The Codius project was devised to make the process of setting up your smart contract app in a hosting provider automated and streamlined.
While relying on centralized entities that require trust may not bode well with many bitcoin advocates – unlike Bitcoin’s proof-of-work system – Codius is much cheaper both in terms of computing power and electricity. (Both systems have advantages and disadvantages).
When Ripple announced the project, it said an industry like the one that was created around digital currencies would emerge around smart contracts. That vision hasn’t materialized yet, although there has been recent interest in the space with two smart contract startups having just raised multiple-million dollar funding rounds.
It did get inquiries from a “significant” number of developers and companies, but ultimately, Ripple Labs saw the low demand as not enough to justify continuing the project.
The future
Although Codius 1.0 was released earlier this year, much remains in the way of the advancement of the smart contract platform. In order to make the process further automated and secure, hosting providers will need to verify the programs being run by these smart contracts by certifying cryptographically what code they are running.
Other challenges remain in the highly fragmented world of online standards. Codius relies on being able to automatically pay hosting providers, but without a clear Web payment standard (like Bitcoin), that is a continued challenge. Ripple Labs did say it was looking forward to completion of the work by the World Wide Web Consortium on this front. The other challenge cited by the company was differences in hosting providers’ APIs, causing problems for Codius.
Ripple Labs seems optimistic that a lot of the problems will be solved as the industry matures. The company said it will continue working on its own distributed applications (possibly for all those banks it has been partnering with recently) and advised others doing the same, or interested in doing so, to join the Codius mailing list.
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