Sunday, July 12, 2015
Mobile Payments: Moving Towards a Trillion Dollar Industry
Saturday, July 11, 2015
Chinese Bitcoin Exchanges: Litecoin Price Volatility Driving Bitcoin Gains, Not Chinese Stock Market
Over the past several days, investors have witnessed sudden gains in volume and extreme price volatility for litecoin. In the last week litecoin has gained over 79 percent against bitcoin, 88 percent against the U.S. dollar and 90 percent against the euro and the yuan.
Much of the rapid increase in volume around litecoin trading was coming from Chinese markets, which is cause for concern at Huobi, a major digital currency exchange based in Beijing.
According to Arthur Hayes, the Cofounder and CTO of BitMEX, a litecoin ponzi scheme may have caused both bitcoin price and volume increases on Chinese digital currencies exchanges in the last few days.
Huobi CEO Leon Li told Bitcoin Magazine that the exchange had taken steps in the wake of the so-called “pump and dump” litecoin scheme.
“We did experience a tough Friday in Beijing because of LTC price volatility. Those promoters are potentially very dangerous, so we post risk warning on Huobi and will start risk revealing mechanism to all our users. An English notice was posted on BitVC.”
Li acknowledged there were also other factors at play, saying “The recent price volatility of litecoin is indeed one of the causes of the price increase of bitcoin. Since the LTC, BTC price is bouncing back from the lowest 1:200 to the recent 1:30 aprox. Many users chose to sell litecoin and buy bitcoin, which is also one of the sources where bitcoin purchasing power comes from.”
Given this week’s turmoil in the stock market in China, it would be tempting to assume that the current increase in bitcoin price and trading volume on Chinese exchanges is a direct result of this alone.
Chinese exchanges confirm that bitcoin trading volume is growing
Jack Liu, Head of International at OKCoin told Bitcoin Magazine, “As the largest exchange in China, we’ve seen a near 50% increase in volume in the past month.”
All three exchanges said the stock market closure had little to do with the increase in volume as this trend started three weeks to a month ago.
Greg Wolfson, Director of Business Development for BTCChina, told Bitcoin Magazine “We’ve seen a sustained increase in trading volume over the last three weeks, roughly coinciding with the Greek referendum. In part, this is driven by speculators and investors seeking safe haven, because global macro events are an important force in the market right now…
“In fact, there is no monetary crisis in China. There is a sharp correction in the stock market, but bitcoin did not play any role in that. The current value of all the bitcoins in circulation globally is insignificant compared to the capitalization of Chinese stock markets. The correction in the stock markets is perceived as resulting from excessive margin lending and the entry of many novice investors. It’s a classic stock market bubble. There is no perception that bitcoin played any role and no evidence to support that.”
Huobi CEO Li put the current situation in perspective saying it still doesn’t compare with the bitcoin price spike of late 2013 and early 2014.
“The price of bitcoin has experienced a rise to some extent. And the exchange volume has also become more active. But this cannot be recognized as significant increases or changes. The volume of bitcoin users has increased about twice than in period of downturn, however there’s still a gap if we compare it to the peak time at the end of 2013 and the beginning of 2014.”
There is some speculation that the upcoming “halving” of litecoin, due in late August, may be driving sales to some extent but not enough to explain the sudden increases in the last week.
With continuing uncertainty in Greece, anxiety over the recent spam attack on bitcoin, and an unfolding litecoin ponzi scheme, the price of bitcoin may be at the center of an almost “perfect storm”.
Photo GoShow / CC BY-SA 3.0
F2POOL Generates Largest Bitcoin Transaction Ever Recorded
F2POOL, one of the largest Chinese bitcoin mining pools has generated the largest bitcoin transaction ever recorded in an attempt to alleviate the massive spam attack launched on the bitcoin network this week, which Bitcoin Magazine previously covered.
An anonymous figure or an organization has sent thousands of micro bitcoin transactions across the network now referred to as “dust,” to temporarily clog up the bitcoin network.
While the attack appears to have ended, miners are still catching up on the backlog of transactions. At the time of writing, the number of unconfirmed transactions had dropped to 33,000. In order to process these transactions at a faster rate, F2POOL took the unusual step of creating a custom transaction that occupied an entire block
The transaction generated by F2POOL was 999 kilobytes in size, taking up the maximum storage of a block or a packet of transaction data.
Nicholas Weaver, current UC Berkeley computer security researcher told Motherboard, “Overall, quite impressive. But I can still think of things that could further increase the effectiveness of the attacks.” He explained that the individual or the group that have initiated the attack can add rewards to their junk transactions to encourage miners to process their transactions first, “leaving real transactions out.”
15 Amazing Ways Bitcoin Changes the Future of Money
FinTech Digest: Amex Has a Checkout Service, London Startup Funding Sets Record, Greek Island Explores Digital Currency
UPDATE: Greek Island Trials Digital Currency Solution to Boost Economy
Friday, July 10, 2015
‘Overwhelming’ Demand Leads Singaporean Financial Markets Monitoring Startup to Add Bitcoin
Government of Jersey Publishes Consultation Paper on Risks and Regulation for Digital Currencies
The government of Jersey, the largest of the Channel Islands, has published a consultation paper on the risks and regulations for virtual currencies, including bitcoin. The report will be similar to that of Financial Action Task Force previously covered by Bitcoin Magazine. However, the government of Jersey is engaging in a public virtual currency consultation process from July 9 to August 7.
With the participation of virtual currency and cryptography enthusiasts, the government of Jersey is set to publish the final consultation paper after all feedback and responses have been considered.
The document will focus on money laundering risks and terrorist financing risks associated with digital currencies and the possibility of using the blockchain technology to create a standard ledger of records for the island.
Unlike the report of FATF, the government of Jersey will devote a significant part of the document in explaining the potential applications of the blockchain, and its wide range of usages.
“The creation of a business-friendly framework that encourages innovation, jobs and growth in both the financial services and digital sector is a priority for the Government of Jersey,” the document reads. “Virtual Currency systems can be significant building blocks of a modern digital economy. This Consultation Paper highlights the most prominent money laundering and terrorist financing risks that the Government of Jersey believe are associated with virtual currencies in their current form.”
The document explicitly explains the benefits and the technology behind Ripple and its gateway system, and how the technology can be used to benefit the Island of Jersey.
Chinese ‘Pump-n-Dump’ Suspected as Litecoin Passes Bitcoin in Trading Volume
Jonathan Vaux at Wired Money: Visa Deeply Interested in Integrating Blockchain Technology
American credit-card company Visa has once again showed its interests for bitcoin at WIRED Money held in London.
Jonathan Vaux, executive director of new digital payments and strategy at Visa Europe, who attended the session on behalf of Visa announced: “The one thing I often get asked about is bitcoin. I do see … a separation between the currency and the technology that sits under it. From the point of view of currency, I think that’s interesting. As Visa, that’s what we do – we manage currencies.”
Vaux said Visa is deeply interested in the blockchain technology which stands as a backbone of bitcoin as a currency, and suggested that Visa could implement the technology to ease the settlement and transfer of payments.
“Ultimately, what we’re looking for is the technology and the component parts that we can bring into our platform and into our marketplace, that delivers a richer proposition,” Vaux said.
Like many other financial institutions and establishments, Visa is interested in identification, device fraud and digital receipting – which may be referred to as smart contracts on the blockchain and cloud-based technology to organize and settle online payments. Vaux explained that Visa will actively look into these areas for its customers and to enhance their operations.
Vaux added that Visa is interested in facilitating bitcoin as a currency.
“Like any other currency, although this might not be the best week to discuss it, at Visa we are very keen to facilitate that translation of currencies on a global basis,” he said.
Image via WIRED Money
Nasdaq Dives Deeper into Bitcoin Research and Blockchain Partnerships
In May, Bitcoin Magazine reported that the leading stock exchange Nasdaq would begin experimenting with the blockchain technology that powers Bitcoin. In June, Nasdaq announced a partnership with San Francisco-based Bitcoin API startup Chain to implement the first blockchain technology pilot projects in Nasdaq Private Market, a recently launched marketplace that handles pre-IPO trading among private companies.
In a recent analysis, the prestigious MIT Technology Review notes that, though it’s much too early to tell whether bitcoin is the future of money, the Nasdaq experiment will test whether it can be the future of financial record-keeping.
In the Nasdaq Private Market pilot project, record-keeping via the blockchain will complement a cloud-based data management tool that tracks who owns shares of a given company, and how much they own. Besides the existing record-keeping tool, corresponding entries in the blockchain will contain certain important information about the transaction, such as the timing and number of shares involved.
Errors in financial record-keeping can be costly. “There’s really no great system in place to ensure that this is done accurately along the way and is auditable to the beginning of time,” said Nasdaq’s CIO Brad Peterson. He and his colleagues at Nasdaq think the blockchain can be essential to such a system.
Nasdaq Private Market is not a stock exchange open to the public, but a service that connects private companies with investors. However, Nasdaq stated that the blockchain initiative could ultimately be extended to record trades of stocks in public firms listed on its exchange.
Nasdaq will explore opportunities to implement blockchain technology in other areas of its business, a large part of which is supplying the underlying technologies that run various securities exchanges around the world. However, Peterson is worried about the current uncertainty and controversy over how Bitcoin should evolve to better handle growing transaction volumes.
Current proposals include increasing block size to 20 megabytes, or 8 megabytes, suitably tweaked Sidechains separate from the main Bitcoin blockchain but interoperable with it by means of two-way pegs, or Lightning Networks, where related transactions can take place instantly on “micropayment channels” off-chain, and only the final settlement is processed by the blockchain. Lightning networks could enable bitcoin scalability, efficient micropayments and near-instant transactions.
Once these issues are settled, the Bitcoin blockchain could be an excellent record-keeping tool for Nasdaq private and public exchanges alike. But in the meantime, according to Nasdaq writer David Floyd, Bitcoin has already found a very important real-world application. “Bitcoin is the new safe haven,” Floyd writes on the Nasdaq blog. Referring to the crisis in Greece, he notes that the possibility that a potential Greek default would drive nervous capital into bitcoin is perfectly plausible.
“Rather than buying [bitcoin] solely because it might one day go ‘to the moon,’ topple the global financial infrastructure or any number of other speculative scenarios, people are now using it as they would another risky alternative to fiat currencies – gold, for example,” says Floyd. “In short, Bitcoin is beginning to make sense.”
Floyd adds that the more it becomes compatible with real-world, here-and-now investment strategies, the more likely Bitcoin is to achieve wider adoption and play a role in ordinary people’s financial lives.
Chicago Bitcoin Center Launches at 1871 To Support Blockchain Startups
In an announcement at the Inside Bitcoins Conference in Chicago, Matthew Roszak revealed the Chicago Bitcoin Center, an incubator that will act as the “center of gravity for blockchain-based technologies.”
“Chicago has a rich history and DNA in financial technology, and the blockchain has the potential to provide a new, open-source rail for FinTech innovation. The Chicago Bitcoin Center is open to designers, developers, entrepreneurs, and all those dedicated to building tomorrow’s next chapter of financial technology,” said Roszak in a statement.
The goal of the Chicago Bitcoin Center is to provide office space as well as mentorship by other bitcoin entrepreneurs, investors, and technologists. Further, the Center will also provide public relations and government affairs support.
“The financial industry is a key vertical that is profoundly affected by technology, and the Chicago Bitcoin Center establishes a leadership position for 1871 and Chicago in this important field,” said 1871 CEO Howard A. Tullman, in a released statement.
The inaugural companies for the incubator are Bloq; Glidera, a digital currency merchant service provider; Red Leaf, a bitcoin ATM operator; and OasisCoin, a bitcoin remittance provider.
Image via 1871
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