Tuesday, September 1, 2015
The Shemitah - Are We Just Days Away From Global Economic Destruction? (Op-Ed)
Monday, August 31, 2015
Commonwealth Virtual Currencies Working Group Issues Statement about Bitcoin’s Potential
This week, the Commonwealth Virtual Currencies Working Group made up of Australia, Barbados, Kenya, Nigeria, Singapore and Tonga, together with the International Monetary Fund and World Bank, concluded a three-day conference in London with a consensus: “Member states should consider the applicability of their existing legal frameworks to virtual currencies and where appropriate they should consider adapting them or enacting new legislation to regulate virtual currencies.”
The group has come up with the consensus because it recognizes the benefits and the disruptive nature of bitcoin and other digital currencies in the financial sector. The conference was joined by experts from the banking sector, academia, virtual currency operators, users and law enforcement agencies, to discuss the unique applications and the risks of criminal misuse.
One of the main members of the Commonwealth Virtual Currencies Working Group, Aminiasi Kefu, Tonga’s acting attorney general explained:
“From Tonga’s perspective, virtual currencies are a phenomena that has already arrived. Today, real estate, buildings and businesses held or owned by individuals resident in Tonga are being advertised for sale on the Internet for virtual currency, namely bitcoin.”
The Working Group received presentations from nine groups involved with virtual currencies, including the U.K. Digital Currency Association, BitPesa, Bitt, Bankymoon, Ripple Labs and Minku.
Many experts and representatives explained to other member states that the decentralized nature of virtual currencies, specifically bitcoin, has been the solution to economic inequality and remittances worldwide.
Bankymoon CEO Lorien Gamaroff explained the importance of virtual currencies in severely underbanked regions such as Africa.
“In Africa, around 80 percent of the population doesn’t have access to banks and are mainly engaged in a cash economy,” said Gamaroff.
Photo The Commonwealth / Flickr (CC)
Barclays to Begin Offering Bitcoin Payments for Customers, Beginning with Charities
Barclays is about to become the first mainstream bank to openly and directly support bitcoin transactions, The Sunday Times reports. The Daily Mail echoed the news for its huge readership.
Barclays has been experimenting with Bitcoin and working with digital currency start-ups for some time. Speaking at the Morgan Stanley European Financials Conference in London, Barclays’ CEO Antony Jenkins warned the “banking sector has not yet felt the ‘full disruptive force’ of technology – but it will.” He elaborated on the growing concern among financial institutions that faster, cheaper payment systems will start to seduce their consumer and business customers in the coming years. In June, Barclays signed a deal with Bitcoin company Safello to explore financial applications of the blockchain technology that powers Bitcoin.
Barclays is not the only bank to express interest in Bitcoin’s technology and launch internal experiments and pilot projects. In fact, as recently reported by Bitcoin Magazine, major banks including Citi, UBS, Santander, BNP Paribas, and BBVA are taking serious note of Jenkins’ warning and committing resources to preliminary blockchain studies.
Now, as reported by The Sunday Times, Barclays plans to test the virtual currency, allowing people to make donations to charities in bitcoin. The bank has gone into partnership with a bitcoin exchange and aims to begin the experiment by the end of the year. Derek White, chief design and digital officer at Barclays, said: “Barclays is enabling the bitcoin exchange to help charities accept bitcoin.”
Barclays has two sites in Notting Hill and Old Street, London, dedicated to researching Bitcoin and blockchain technology, with a combined capacity of 75 staff, and is also operating a blockchain workspace in a revamped warehouse in Whitechapel, east London. The bank “is inviting start-ups, academics, and the government to work at the space to connect with others that are interested in the Bitcoin and blockchain community,” said White.
With this move, Barclays will be the first major bank to help selected customers to receive bitcoin payments directly in their bank accounts, establishing an important precedent. Focusing on charities first seems a very smart decision, which can shield Barclays from the potential regulatory and image problems, giving it time to prove the value of Bitcoin in a context that can’t be easily criticized. It can be expected that, after this first initiative focused on charities, Barclays could consider gradually allowing ordinary business and residential customers to receive bitcoin payments.
The Sunday Times mentions that a Bitcoin company was included in the trade mission to southeast Asia led by U.K. Prime Minister David Cameron a few weeks ago, which underlines the rising status of Bitcoin in Great Britain. On the trade show, Cameron enthusiastically praised the Innovate Finance Manifesto: 2020, issued by Innovate Finance, which aims to advance Great Britain’s standing as a leader in financial technology (fintech) innovation both domestically and abroad and create 100,000 jobs in U.K. fintech.
The manifesto is focused on generic fintech innovation and doesn’t mention Bitcoin- and blockchain-based digital currencies explicitly. However, Great Britain is on its way to becoming a global hub for bitcoin and other digital currencies, with both the government and Bank of England having made recent moves designed to stimulate the development of digital fintech.
Ukraine May Soon Legalize Bitcoin
AUG 31 DIGEST: Barclays to Enable Charitable Bitcoin Donations; BTC Businesses Prepare for Next 'Stress Test'
Gok!llo: Kickstarter & Indiegogo ‘No Longer Suitable for Modern Crowdfunding’
Sunday, August 30, 2015
FinTech Digest: Bitcoin Transactions In Cuba, The Debut Of Coin 2.0, Coinbase Tests New Service In Europe
Bitmain Announces Launch of Next-Generation Antminer S7 Bitcoin Miner
Bitmain, the Bitcoin mining ASIC provider, Sunday announced the release of its next-generation Bitcoin miner, the Antminer S7, using the recently announced BM1385 ASIC.
The company argues that “this machine is not only our most efficient ever, using less than half the energy per gigahash of the S5, but it is also our most powerful miner to enter mass production.” It had released the S5+ in limited supply, which offers nearly 3,000 more GH/s than the announced S7.
“It’s true that the S5+ had a greater overall hashrate, but the S7 squeezes more juice from a smaller, more power efficient package,” said Jake Smith, Bitmain’s head of North America, in an interview with Bitcoin Magazine. “When comparing hashrate to weight, size, or power consumption, the S7 comes out ahead.”
The Antminer S7 is a denser mining rig than previous models. Whereas the S5 used 60 chips per miner, the Antminer S7 uses 162 of the BM1385 chips. Each S7 will be able to generate upwards of 4,850 GH/s while only needing approximately 0.25 J/GH of power.
Part of the reason the chip is so much stronger is because the company went away from using standard design flow methods. “From the BM1385 onwards, we’ll be using full-custom design flow,” Smith explained. While full-custom design flow is more work intensive and does have a greater margin of error, it results in greater efficiency, which is where profit can be found.
“It’s difficult to predict the how long our new chip will take to bring to market, but development on our next chip began almost as soon as this one was completed. Our next chip, the BM1387, will be our second full-custom chip, and our first chip built on a 16-nanometer process node,” Smith said.
With each new chip released miners have to weigh their options on whether to upgrade. Smith said that there has been considerable interest in the S7 by current Bitmain miners, in particular because older hardware may become obsolete. “The inevitable large deployment of S7s will cause network hashrate to rise and some older hardware to be forced offline. More recent hardware like the S5 will still be profitable, but to a lower degree than at present,” Smith said.
‘We’ll continue to make our machines available to Joe Miner …’
Bitmain has deployed a different strategy than other Bitcoin hardware companies has. Other companies have focused their development efforts on creating miners for internal use rather than widespread adoption. For example, Bitcoin Shop (BTCS) announced that it would be merging with Spondoolies-Tech, which would give BTCS access to Spondoolies’ latest miner to give it a competitive advantage. Bitmain, on the other hand, continues to sell its hardware to the general population.
“We’re very strong believers in keeping Bitcoin decentralized. Until recently, most mining was done by so-called average users and not by large mining operations,” Smith said. “It would be a real shame to see this dedicated group left without options for supporting the network in their own way, and perhaps even present a dangerous situation for the network to be secured only by large and well-capitalized firms.”
As mining does continue to get more expensive, only those companies that have the resources to create large operations will be able to survive. The fewer operations that are mining, the more likely it is that one, single source could take a majority of the hashrate, creating potential security problems.
“We will continue to make our machines available to Joe Miner for as long as we are making hardware,” Smith said. “It’s an unfortunate situation that we’re the only big ASIC manufacturer selling directly to consumers right now; we’d love to see more competition in this space and for the miners themselves to have more options available.”
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.
BitPay: ‘Silicon Valley is Becoming a Bitcoin Hub’
Saturday, August 29, 2015
Bitcoin Block Battle: Top Corporations Support BIP 101 as Debate Rages On
Andreas Antonopoulos Thinks Bitcoin ATMs Need to Be Completely Redesigned
Mastering Bitcoin Author Andreas Antonopoulos recently gave at talk at Harvard’s i-lab, spending much of his time in front of a small audience describing the various issues with Bitcoin as a brand. He noted many problems with the terminology[add link to bitcoin terminology is broken and wrong piece] used in Bitcoin, and he also focused on specific products or services in the Bitcoin space that seem to be doing a disservice to potential users.
At one point during the presentation, Antonopoulos turned his attention to Bitcoin ATMs, asking the audience how many of them had used one of the machines in the past. While a few people raised their hands, those hands went down when Antonopoulos then asked how many of them enjoyed their experience with the Bitcoin ATM.
How Traditional ATMs Work
To explain the user experience issues with Bitcoin ATMs, Antonopoulos first talked about the setup of traditional bank ATMs:
“When you interact as a person with an ATM, 1. you have a pre-existing relationship with the bank or financial institution; 2. you have a pre-existing balance; 3. your primary objective is to get in, get cash, [and] get out. Twenty seconds is too long. Three clicks is too long.”
In other words, there is no need for long explanations or user-onboarding with traditional ATMs. Everyone who uses them already has a debit card, and they’ve already interacted with the corresponding bank in the past. The process can be simple because the user already has his or her bank account setup.
Bitcoin ATMs Have Nothing in Common with Traditional ATMs
According to Antonopoulos, many Bitcoin ATM developers have been looking too closely at how traditional bank ATMs work when designing their own machines. He noted that Bitcoin ATMs have “absolutely nothing” in common with the ATMs that are currently used by banks, and he went on to describe the experience an average person has when attempting to use a Bitcoin ATM for the first time:
“The average user of Bitcoin ATM is someone who has never seen bitcoin before. It is a person who doesn’t understand what bitcoin is, and the ATM is their first introduction to this currency. It is a person who does not have a pre-existing relationship with anyone in the Bitcoin space. It is a person who does not currently have a wallet because they didn’t know they needed one – because they don’t know what a wallet is (it’s a keychain). And so they walk up to this machine, and this machine has been designed by engineers to simulate the experience of an ATM, even though the experience shares absolutely nothing with the use case we’re putting it to. So you walk up and the ATM tries to give you bitcoin in as few clicks as possible with a minimum amount of interaction. Is that a way to build brand loyalty? Is that a way to build user experience? Is that a way to introduce new users? I mean, it just throws it at you, and you’re not ready for that. But, ‘Please open your phone and display your QR code.’ Like, what? What’s a QR code?”
In an effort to solidify the point that Bitcoin ATMs should not be operating in the same manner as traditional bank ATMs, Antonopoulos then went through a long list of questions that a user would likely have while attempting to use a Bitcoin ATM for the first time.
The Right Model for a Bitcoin ATM
After describing the problems with currently available Bitcoin ATMs, Antonopoulos explained how he would design such a device:
“If I was designing a Bitcoin ATM, first of all, I’d put it in bodegas. Secondly, it wouldn’t have a lick of English on it. It’d be all-Spanish because I’m going to really push the remittance model. Thirdly, the first function on the ATM would be ‘Send money to Mexico City.’ That’s it. Because I want people to use the bitcoin for something. [Fourthly], I’d have a big button on the front that says ‘Talk to a human.’ I’ve got an Internet-connected device with a forward-facing camera and a tablet screen, and I’m not using it to do video customer service? Are you kidding me?”
It’s clear that the device Andreas Antonopoulos is imagining is completely different from a traditional ATM. In addition to the focus on international remittances, Antonopoulos also expanded on the idea that the Bitcoin device needs to teach the user about the peer-to-peer digital cash system:
“I don’t want to interact for fifteen seconds. I want to interact for two hours . . . And it tells me where I can spend [bitcoin]. It gives me suggestions on wallets, and it can send them directly to my phone. It’s building loyalty, brand and experience. That’s not a 15-second interaction.”
This is a perfect example of how sometimes simply applying the old ways of doing things to Bitcoin will not work. The most impactful innovations in the Bitcoin space have been the ones that created something completely new rather than thinking about how things worked in the past. Developers and entrepreneurs should try to avoid simply replacing the carriage with an automobile. It’s time to get rid of the horse.
Photo BTC Keychain / Flickr (CC)
BIP 100 Support Grows; 21% Attack Worries Remain
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