Friday, August 28, 2015
AUG 28 DIGEST: Major Mining Pools Support BIP100; Tree Signatures Proposed by Blockstream's Pieter Wuille
Life Inside a Bitcoin Mine: Interview with Genesis Mining’s Marco Streng
Thursday, August 27, 2015
Case Announces September 21 Shipping Date for Bitcoin Hardware Wallets
Bitcoin wallet manufacturer Case Inc. has concluded the final phase of testing and announced that the company will begin shipping its hardware wallets on September 21.
“Appropriation of parts is complete and the manufacturing process is nearing its end. Everyone at Case is eager to get our device in the hands of our customers who have patiently waited for their bitcoin wallets,” Case announced on its website. “Providing a secure, easy-to-use bitcoin experience around the world has been our mission from the beginning and we’re excited to finally deliver on that.”
The Case team launched its hardware wallets at TechCrunch NY on June 24 and raised $1.5 million in an equity seed funding round led by FuturePerfect Ventures, participated in by RRE Ventures, High Line Venture Partners and the Rochester Institute of Technology Fund. During a presentation at TechCrunch NY, the Case team promised its investors and its customers to ship their hardware wallets by the end of summer.
“As more important assets move to the blockchain (contracts, property and identity), having a completely secure way to store and transfer those assets becomes even more paramount,” Case CEO Melanie Shapiro told Bitcoin Magazine at that time. “We’re interested in not only servicing the consumer holding bitcoin, but also providing the banks using blockchain technology the power to manage who has the authority to execute transactions.”
Leading Bitcoin Startups Integrate Vogogo’s Risk Management Platform
This week, Vogogo announced in its second-quarter financial statements that leading Bitcoin companies, including BitPay, ChangeTip, Genesis Global Trading and Zinger, have integrated Vogogo’s risk management/compliance products onto their platforms.
Vogogo’s services include customer verification, anti-money laundering and counter-terrorism finance compliance reporting, payment and rules engine and fraud mitigation. Global bitcoin payment services provider BitPay has integrated Vogogo’s AML-CTF global compliance, which validates users against global watch lists and protects the platform from money laundering attempts with advanced analytics and decision-making technology.
“We are seeing significant interest in our risk-management services and payment services from alternative markets,” said Vogogo CEO Geoff Gordon. “Capturing those opportunities will help us drive revenue while we continue to move forward with our plan to be the dominant provider of risk management and payment processing services to the cryptocurrency industry. We are huge believers in blockchain technologies and we aim to play a significant role in anchoring that industry for a long time to come.”
Vogogo also has integrated their compliance technologies onto global bitcoin exchange platform Kraken, as a part of its expansion across Canada.
“We see a lot of opportunity for Kraken in Canada, and we’re counting on Vogogo’s expertise in risk management and payment processing to make it possible for Canadians to move their dollars safely and efficiently to and from Kraken,” announced Kraken CEO Jesse Powell.
Princeton University and Coursera Launch Free Online Course on Bitcoin and Cryptocurrencies
A Princeton University free online course on “Bitcoin and Cryptocurrency Technologies” will be offered by Coursera beginning September 4, 2015.
Coursera is an online education platform for Massive Open Online Courses (MOOCs), which partners with top universities and organizations worldwide, to offer courses online for anyone to take for free. MOOCs give anyone, anywhere, the possibility to acquire a world-class education. Courses include video lectures, exercises and online interaction with teachers and other students. Some courses offer certification as well.
The Princeton Bitcoin course will last six weeks, with the last lecture on November 1, 2015, but students also will be able to follow the video lectures after that date. That’s part of the appeal of MOOCs –students who prefer to learn at their own pace can follow the video lectures asynchronously, when they want, while students who can adapt their schedules to a course’s official timetable have the added benefit of semi-synchronous interaction with the instructors.
“To really understand what is special about Bitcoin, we need to understand how it works at a technical level,” notes the Coursera website. “After this course, you’ll know everything you need to be able to separate fact from fiction when reading claims about Bitcoin and other cryptocurrencies. You’ll have the conceptual foundations you need to engineer secure software that interacts with the Bitcoin network. And you’ll be able to integrate ideas from Bitcoin in your own projects.”
The Freedom to Tinker website, hosted by Princeton’s Center for Information Technology Policy, notes that a preliminary version of the Princeton Bitcoin course has been publicly available since January, with 11 video lectures, lecture notes and exercises, on the Piazza online educational platform. The new Coursera version includes new lectures, embedded quizzes to test the students’ understanding, and a wider community of students to discuss the lectures with. About 15,000 students already have signed up, and the enrollment is growing fast.
The instructors – Arvind Narayanan, Joseph Bonneau, and Edward Felten from Princeton University, and Andrew Miller from The University of Maryland – are completing the course’s textbook, which will be published by Princeton University Press. The draft book chapters will remain freely available online after the publication of the book, but the instructors recommend buying the book.
The Princeton course is clearly aimed at a technically oriented, hands-on audience of programmers and computer scientists.
“How does our textbook (and course) differ from other books on Bitcoin?” wrote Narayanan in the first Princeton announcement in January. “It’s simple: this is unabashedly a computer science text and course. We connect the ideas we discuss to the rest of computer science, and separate fundamental concepts from implementation details. The hype in the Bitcoin community has sometimes gotten ahead of the technology, and we think that for cryptocurrencies to truly realize their potential, entrepreneurs must go back to the basics, rigorously understand the technology and build on it.”
The course will be very useful to Bitcoin entrepreneurs and job seekers wishing to enter the very hot digital currency sector. In fact, banks and Wall Street companies are rushing to enter the Bitcoin space and fishing for top talent in Bitcoin waters, and online Bitcoin job ads are surging to record highs.
In related news, Stanford University is offering a Cyber Security Graduate Certificate focused on computer systems security, including attack protection and prevention, very important skills in the Bitcoin space. The Stanford course is more intense than the Princeton course and is not free.
World’s First Blockchain-Based Startup Marketplace Set to Launch by Funderbeam
AUG 27 DIGEST: Patrick Byrne Brings Bitcoin Tech to Wall St. with $30M Deal; California Seeks to Avoid a Repeat BitLicense Exodus
The Gox Effect: Japan Slowly Turning Against Bitcoin Exchanges (Op-Ed)
Wednesday, August 26, 2015
Tim Draper Speaks on Global Equity Turmoil: “I Expect People to Run to Bitcoin the Way They Do to Gold.”
It has been a rollercoaster of a ride for global equity investors over the past few days. Besides the month-long slide in the Chinese markets, the Dow plummeted from approximately 16,459 on August 21st to 15,446 on the 24th.
When the going gets tough, investors have historically flocked toward assets that are considered safer, including cash, gold, and treasury bills. Often times, the asset of choice is gold because it is considered the greatest store of value. However, some think that Bitcoin might one day trump gold as a means of protecting against volatility.
Tim Draper, founding partner of Draper Fisher Jurvetson, a prominent Silicon Valley venture capital fund, believes that bitcoin might one day be the preeminent store of value for investors.
“When bitcoin is mature, I expect people to run to bitcoin the way they do to gold when the market gets scary,” Draper said in an email to Bitcoin Magazine. “Currently, there is not enough usage to make people feel comfortable investing in Bitcoin when they come out of the market. I expect that to change.”
Draper suggests that currently, bitcoin is far too speculative an investment for it to be a store of value. According to Investopedia, a store of value means, “any form of commodity, asset, or money that has value and can be stored and retrieved over time. As long as a currency is relatively stable in its value, money (such as a dollar bill) is the most common and efficient store of value found in an economy.”
Fundamentally, the reason people run to cash when the stock market falls is because they view the small inflation to be a small loss in comparison to what could happen in the stock market. Even more, they run to gold because, as Investopedia says, “they can be counted on to retain some value in almost any scenario, especially in those cases where the store of value has a finite supply (like gold).”
For bitcoin to be considered an efficient store of value, the price of it would need to start rising and stay relatively consistent rather than having significant volatility. Draper explained that the bitcoin ecosystem isn’t in a place, yet, for this to happen.
“There will be pressure on Bitcoin pricing as there is supply to sell as miners get more bitcoin, and less demand to buy as the use cases evolve,” Draper explained. In essence, miners need to sell their bitcoin more to pay for electricity than hoarders and users need to buy. This results in a drop in the price.
“I expect this phenomenon to turn around in about 6 months as use cases become apparent,” Draper went on to say.
Due to the understood finite supply of bitcoin—there will only ever be 21 million coins released—as usage increases and the supply stays relatively constant, the only place for the price to go is up. As the price goes up, investors will potentially see bitcoin as a functioning store of value, which will perpetuate its value.
Jacob Donnelly is a full-time product manager and journalist covering finance and bitcoin. He runs a weekly newsletter all about bitcoin and digital currency called Crypto Brief.
Photo Disney | ABC Television Group / Flickr (CC)
Bitcoin Interest Grows in India From Cross-Border Payments and Corporate Support
Tech giants including Microsoft and IBM have been supporting Bitcoin startups, conferences, accelerators and developers in India. The efforts of these companies are beginning to pay off, as India has seen a gradual increase in the number of developers and freelancers in the Bitcoin ecosystem.
“There is lot of interest from freelancers in India who suddenly are now getting bitcoins from U.S.-based companies, and then they scramble to understand what is bitcoin,” Indian Bitcoin startup Blockonomics founder Shiva Sitamraju told Bitcoin Magazine.
The increase of Indian freelancers’ and developers’ involvement with Bitcoin startups and organizations has created an efficient environment for local people to buy and purchase bitcoins instantly.
“From publicly available sources that display data transparently, like LocalBitcoins and Coinsecure, we see about $4 million-$5 million USD moving in bitcoin in India every month. Apart from that, the forums see few 100 BTC being traded as well,” India’s prominent Coinsecure founder Benson Samuel explained.
Barriers Toward Adoption
Indians are skeptical toward new technologies. It took years for the Internet and smartphones to take off in the country, and it may take even longer for bitcoin to reach mainstream adoption in India.
But, Sitamraju told Bitcoin Magazine, once bitcoin is adopted by a substantial part of the Indian population, it could really explode across the country, especially in rural and underbanked regions.
“Indians are slow technology adopters, and we are far behind China/U.S. in bitcoin adoption. … [O]nce the early adopters/risk [takers] adopt it and enough user-centric applications [sprout]… this stuff really explodes in India. Indians are second-biggest users of blockchain.info, and today, we are seeing growing merchant adoption,” said Sitamraju.
Some of the Indian population’s skepticism towards bitcoin may be due to the Indian government’s tight regulations and restriction for the finance/banking sector. Currently, fewer than 35.5% of households in India maintain bank accounts, and less than 20 percent of the Indian population owns credit cards or debit cards.
“More education and good press coverage is necessary. India has a tightly regulated finance/banking sector and so people/government is a bit weary of new financial instruments,” explained Sitamraju. “It is important to stress than bitcoin is not evil. Tipping people [in] bitcoin so that they can themselves experience the power of the technology is an easy way. Also if major Internet merchants here accept bitcoin it would be a major driving force, as e-commerce companies like Flipkart, Amazon are now booming in India.”
Bitcoin’s Potential
The number of Internet users has been growing at an annual rate of 32 percent, as the cost of smartphones with 3G and 4G data plans and Wi-Fi access have decreased substantially over the last two years. Today, India has more than 300 million Internet users, and the majority are mobile users.
Because of widespread smartphone penetration in India, many users have begun using mobile bitcoin applications such as Blockchain.info and Coinsecure. To continue to this trend, extraordinary bitcoin startups such as Blockonomics emerged over the last few months, to ease the use of bitcoin for the Indian population.
Blockonomics is a simplified wallet watcher that allows users to track transactions and balance of many public bitcoin addresses at one place. Through Blockonomics, users can receive instant notifications and quick overview of pending and confirmed transactions in their wallets.
However, “We are not planning a wallet service, as we believe that the major strength of bitcoin is decentralization and that people should retain control of their own coins,” Sitamraju told Bitcoin Magazine. “We are planning to be a one-stop destination for managing crypto finances having advanced graphs/analytics and eventually becoming the Mint.com of bitcoin.”
Startups such as Blockonomics in HackCoin or bitcoin accelerators recently have been focused on creating Bitcoin applications that could provide users with advanced analytics and data about Bitcoin.
Photo via Coinsecure
Blockstream’s Pieter Wuille Proposes Tree Signatures for Improved and Flexible Multisig Bitcoin Transactions
In June, Bitcoin Magazine reported that Blockstream launched Sidechain Elements, a sidechain development framework with open source code, including an experimental sidechain for developers dubbed Elements Alpha. Now, in the first technical post to appear on the Blockstream blog after the announcement of Sidechain Elements, Blockstream and Bitcoin Core developer Pieter Wuille proposes the intriguing concept of Tree Signatures, an efficient multisig method with enhanced privacy.
Blockstream was formed by renowned cryptography experts, including some Bitcoin Core developers, to accelerate innovation in digital currencies and implement the sidechain concept described in the paper “Enabling Blockchain Innovations with Pegged Sidechains,” released in October. In November, Blockstream closed a $21 million seed funding round with nearly 40 high-profile investors.
Tree signatures, which can be coded only in the extended Alpha scripting language, can implement M-of-N multisig transactions (which required more than one keyholder to participate) more efficiently than Bitcoin scripting. Wuille shows how to combine Merkle trees and Schnorr signatures to implement large M-of-N multisig schemes:
“Merkle tree keys support very large 1-of-N. Schnorr signatures support very large M-of-M. This means that if we can write our spending conditions as a 1-of-(N possible M-of-M’s), we can build a Merkle tree consisting of Schnorr combined public keys.”
An interesting feature of the new multisig scheme is that only the keys actually used for signing are exposed to the public. For example, in a 1-of-N multisig policy, only one key is revealed on spending and the other keys stay hidden.
Wuille gave a talk titled “Key Tree Signatures: A Mechanism for Very Large, Compact, Efficient Multisig” at the SF Bitcoin Devs Group.
“In our first sidechain, Elements Alpha, we introduced several improvements to the cryptography and scripting abilities of Bitcoin,” reads Wuille’s abstract. “In this talk, I will discuss how some of these features can be used to build an improved multisig construction that is more efficient, compact, and flexible.”
A video of the talk will soon be posted online. In the meantime, Wuille posted his presentation slides.
Sidechains are a fundamental innovation because they permit separating the codebase and functionality of a blockchain (sidechain) from its currency. A sidechain can implement all sorts of innovative changes from Bitcoin Core, while still carrying bitcoin as a currency by means of two-way pegs that permit transferring bitcoin to the sidechain and back. Therefore, sidechains permit innovating without threatening the stability of Bitcoin or having to introduce ad-hoc altcoins. Elements Alpha is the first experimental sidechain, and, hopefully, it will be followed by operational sidechains.
Sidechains could put private bitcoin transactions back and adapt to anti-privacy techniques as they are developed. One of the most interesting features in Elements Alpha is Confidential Transactions, a cryptographic tool to improve the privacy and security of bitcoin transactions by keeping the amounts transferred visible only to participants in the transaction. Richard Gendal Brown, an executive architect for banking innovation at IBM UK, who wrote a simple but excellent explanation of sidechains, is persuaded that Confidential Transactions are a good step forward.
“Confidential Transactions are a very clever application of cryptography to hide the value of transactions whilst still allowing them to be fully validated by the network,” wrote Gendal Brown. “Without features like Confidential Transactions (or related technology such as ZeroCoin or ZeroCash), [Bitcoin-like] systems may be unsuitable for those with confidentiality and privacy requirements.” He added that perhaps Confidential Transactions aren’t a full solution, but they are a good start.
It’s important to bear in mind that sidechains will be able to operate with bitcoin as a currency only after suitable hooks are implemented in Bitcoin Core, which might encounter some resistance. A Bitcoin Improvement Proposal (BIP) to allow for bitcoin sidechains is in the works.
Photo by Denise Terry
Interpol Trains Police Officers to Use Cryptocurrency and the Darknet
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