Thursday, September 3, 2015
Chinese Capital Controls May Create Next Bitcoin Boom
SEP 3 DIGEST: Proposed California Bitcoin Bill Adds New Reporting Requirements and Coinbase Expands to Singapore
Wednesday, September 2, 2015
Wikipedia Bans Hundreds of Editors Who Extorted Bitcoin Casinos, Others
Blythe Masters and Wall Street Opt for ‘Permissioned’ Non-Bitcoin Blockchains
Major banks and mainstream financial institutions are warming up to the blockchain technology that powers Bitcoin, and launching internal experiments and pilot projects to find out how they can use the blockchain.
However, most banks frown at the chaotic anarchy of public “permissionless ledgers” like the Bitcoin blockchain, where any individual anonymous user can join and contribute hashpower to verify transactions without having to ask anyone’s permission. Instead, they would prefer “permissioned ledgers” owned and by the banks, which can be operated only by vetted players. Think of “BankCoin” blockchains that only the banks and the authorities have access to.
Since this trend appears to be rising fast, many startups are developing infrastructures for permissioned ledgers.
SETL is a permissioned ledger system that aims to be as palatable to top-tier banks as possible, with a view to moving cash and assets immediately and achieving settlement finality of transactions, International Business Times reports. The brainchild of hedge-fund investor Anthony Culligan and Peter Randall, former CEO of leading equities market Chi-X Europe, the SETL blockchain system runs alongside and can be integrated into existing systems.
“If you make the assumption that the nodes are actually basically benevolent to each other, which they are, of course, if you have got identity attached to it, then the type of cryptography and, therefore, the time it takes gets a lot easier,” said Randall, who is persuaded that vetted identities and capacity within a blockchain system are usefully related. “[I]f you are not talking in the tens of thousands per second, and possibly hundreds of thousands per second, in terms of transactions for financial services globally, you are crazy.”
Following this logic, Randall sees a possible scenario where the major financial players operate their own private blockchains, “a UBS chain and a Deutsche Bank chain and a Morgan Stanley chain and a JP Morgan chain and so on.” But he is persuaded that the BankCoins would eventually have to become interoperable for global reach and increased efficiency.
SETL’s network would work in the same way as the bitcoin blockchain, generated from each participant’s server. The ledger of transactions would be stored on these servers, with encryption, but regulators or auditors would be given access to identify the parties involved. “We want to unlock the power of the blockchain for financial markets,” Randall said an interview as reported by Reuters. The technology will be regulator-friendly and “permissioned,” meaning that participants’ identities can be derived by regulators and auditors if required.
A similar position was recently formulated by two Accenture representatives.
“To be used by financial institutions, including capital markets firms and insurers, blockchains must supplant the costly methods introduced by bitcoin with a mechanism that guarantees security, privacy and speed without paying for anonymous consensus,” they said.
Bloomberg Business is running a profile of Blythe Masters, which is also the cover story in the October 2015 print edition of Bloomberg Markets. Masters, a financial superstar and a former JPMorgan executive, is the CEO of digital economy startup Digital Asset Holdings. In June, Digital Asset Holdings acquired Hyperledger, a company that developed distributed ledger technology to allow banks and other financial institutions to clear and settle transactions in real time. The company’s technology enables financial institutions to create multiple private blockchains across a known group of participants. Unlike other distributed ledgers, Hyperledger does not have an inbuilt cryptocurrency and uses a proven consensus algorithm capable of thousands of transactions per second.
Masters is persuaded that Hyperledger’s private, permissioned blockchain technology will permit developing “gated communities” where trusted users will be able to process transactions themselves rather than depend on the open bitcoin blockchain, which in her opinion is required for mainstream adoption. “With private chains, you can have a completely known universe of transaction processors,” Masters says. “That appeals to financial institutions that are wary of the bitcoin blockchain.”
The Bloomberg article notes that Masters is determined to make the financial system more efficient, using a technology that was initially designed to bypass the financial system – the technology of Bitcoin – without the troublesome openness and potential for privacy.
But it’s wise to bear in mind one simple fact – Bitcoin works. While closed, permissioned blockchains and BankCoins might theoretically work tomorrow, Bitcoin works in practice today, and perhaps the chaotic anarchy of the Bitcoin network is the very reason it works.
Photo Carlos Delgado / CC-BY-SA
Coinbase Expands to Canada and Singapore to ‘Spur Mainstream Bitcoin Adoption’
Leading bitcoin exchange and wallet provider Coinbase has expanded its services to Canada and Singapore as a part of its project to expand their services globally. Now, consumers in Singapore are able to buy and sell bitcoin for Singapore dollars through Coinbase.
This follows the company’s announcement from ealier this week that Coinbase users based in Canada will be able to buy and sell bitcoin with Canadian dollars instantly, using the Coinbase Wallet. Additionally, users will be able to buy and sell bitcoin with a Canadian bank account directly and trade BTC/CAD on Coinbase’s exchange.
“Our mission at Coinbase is to spur mainstream bitcoin adoption, which we’ve set out to achieve by providing people with a simple, secure on-ramp to the bitcoin world,” Sam Rosenblum, international expansion lead at Coinbase told Bitcoin Magazine. “By expanding our wallet and exchange services to Canada, we’re getting bitcoin into the hands of even more people globally and, by extension, helping to drive growth of the entire Bitcoin network.”
As a celebration for the expansion of their services to Canada, Coinbase will waive conversion fees for Canadian customers until September 9.
“To celebrate the launch, Coinbase will waive its retail conversion fees for Canadian customers of the direct buy/sell service, available at Coinbase.com, through September 6 (11:59 Pacific time). Standard trading fees on Coinbase Exchange apply,” the Coinbase team announced.
Hackathon and Plans
Along with the announcement, Coinbase also has announced its plans to sponsor a hackathon at the University of Waterloo called “Hack the North hackathon.” As a commemoration of their expansion, Coinbase will award the group that best integrates and implements the API of Coinbase with US$1,000 in bitcoin and guaranteed interviews for an engineering internship at the company.
Coinbase has always been a keen supporter of bitcoin and blockchain hackathons worldwide. To date, it has sponsored multiple blockchain hackathons and offered prizes in bitcoin and participated as panelists and mentors.
The company also has recently begun to host its own bitcoin hackathons, dedicated for developers hoping to build innovative applications with bitcoin.
“We’re interested to see apps which highlight new use cases for Bitcoin, making bitcoin easier to use for wider audiences,” the Coinbase team announced.
The winner of the company’s second global hackathon, Mailman, received more than US$70,000 worth of prizes, US$10,000 of bitcoin and a guaranteed place at bitcoin- and virtual reality-focused Boost VC’s accelerator class. Mailman is an email paywall system which allows users to reward timely replies with bitcoin and filter spam using the blockchain, which Coinbase believes “taps into a core benefit of Bitcoin: permissionless innovation.”
Similar to its efforts for its own bitcoin hackathons and other competitions it has sponsored so far, Coinbase plans to actively assist Bitcoin startups in Canada by financing bitcoin hackathons in Canada, and by making it easier for Canadian merchants and bitcoin users to purchase and sell bitcoin easily.
Initially, the company decided to launch its bitcoin exchange to nine of the provinces in Canada, as their blog post reads: “Users in all Canadian provinces will have the ability to buy and sell bitcoin with CAD using the Coinbase Wallet, and those in 9 of 10 Canadian provinces can begin trading on Coinbase Exchange using the BTC/CAD currency pair.” However, James Watkins of Coinbase told Bitcoin Magazine, “We’ll be launching Coinbase Exchange nationwide on Monday as well.”
Swarm Shuts Down as 'Pretty Boy' Co-Founder Blamed for Demise
SEP 2 DIGEST: Bitcoin Devs Pen Open Letter to Community; UK Gov’t Explores Blockchain for Recordkeeping
Darkwallet Developers Go Dark
Ex-Federal Agent Faces 20 Years in Prison for Bitcoin Theft
Tuesday, September 1, 2015
An Open Letter to the Bitcoin Community from the Developers
Editor’s Note: This is a letter to the community written and signed by many of the Bitcoin core developers.
As active contributors to Bitcoin, we share this letter to communicate our plan of action related to technical consensus and Bitcoin scalability.
Bitcoin is many things to many people. However, the development and maintenance of Bitcoin is a human endeavor. Satoshi sought review and cooperation, and the subsequent work by Bitcoin’s developers has made the system more secure and orders of magnitude faster. The Bitcoin developer community is dedicated to the future of Bitcoin, looks after the health of the network, strives for the highest standards of performance, and works to keep Bitcoin secure on behalf of everyone.
We’re committed to Bitcoin and responsive to the needs of the community. For the past five years, we’ve written code and managed over 50 Bitcoin releases and reviewed more than 45 formal proposals to improve Bitcoin’s performance, security, and scalability. Technical discussions, while heated at times, are always focused on improving Bitcoin.
Much work has already been done in this area, from substantial improvements in CPU bottlenecks, memory usage, network efficiency, and initial block download times, to algorithmic scaling in general. However, a number of key challenges still remain, each with many significant considerations and tradeoffs to evaluate. We have worked on Bitcoin scaling for years while safeguarding the network’s core features of decentralization, security, and permissionless innovation. We’re committed to ensuring the largest possible number of users benefit from Bitcoin, without eroding these fundamental values.
There will be controversy from time to time, but Bitcoin is a security-critical system with billions of dollars of users’ assets that a mistake could compromise. To mitigate potential existential risks, it behooves us all to take the time to evaluate proposals that have been put forward and agree on the best solutions via the consensus-building process.
In the upcoming months, two open workshops will bring the community together to explore these issues. The first Scaling Bitcoin workshop will be in Montreal on September 12-13. The second workshop is planned for December 6-7 and will be hosted in Hong Kong to be more inclusive of Bitcoin’s global user base.
We ask the community to not prejudge and instead work collaboratively to reach the best outcome through the existing process and the supporting workshops. It’s great to already see broad excitement for the event and the high concentration of technical participants attending.
We’re confident that by working together we can agree on the best course of action. We believe this is the way forward and reinforces the existing review process that has served the Bitcoin development community (and Bitcoin in general) well to date.
We welcome your participation as we continue our efforts to bring Bitcoin into the future.
Signed,
Wladimir J. van der Laan
Pieter Wuille
Cory Fields
Luke Dashjr
Jonas Schnelli
Jorge Timón
Greg Maxwell
Eric Voskuil
Amir Taaki
Dave Collins
Michael Ford
Peter Todd
Phillip Mienk
Suhas Daftuar
R E Broadley
Eric Lombrozo
Daniel Kraft
Chris Moore
Alex Morcos
dexX7
Warren Togami
Mark Friedenbach
Ross Nicoll
Pavel Janík
Josh Lehan
Andrew Poelstra
Christian Decker
Bryan Bishop
Benedict Chan
฿tcDrak
Charlie Lee
Jeremy Rubin
Photo Kim Piper Werker / Flickr (CC)
Volume of Bitcoin Trades Continues Surge in Brazil
Volume of bitcoin trades in Brazil increased rapidly in Brazil since May. Over the last few months, the volume of all bitcoin trades have risen from US$1.65 million to US$2.6 million, showing a 158 percent monthly increase in trading volumes across all exchanges.
In August, Mercado Bitcoin, the largest bitcoin exchange in Brazil alone has processed 28.48 percent of all market share or US$740,480 worth of bitcoin trades.
Image via bitValor
According to BaseBit founder Daniel Novy, the majority of bitcoin-related news presented by major news outlets in Brazil is negative and affects the potent Brazilian population that is underbanked and underserved by financial institutions.
Despite the negative image of bitcoin built by the media, many merchants are becoming more open to using bitcoin, due to its low transaction fees and high international exchange rates. With the strict financial regulations in countries like Argentina and Brazil, it is extremely difficult to move the local currency out of the country. Bitcoin in contrast, has a high international exchange rate, allowing merchants to store their income in a liquid currency or asset.
“The problem we have in Brazil is that the only news that becomes mainstream is the bad ones. Bitcoin has a bad reputation here but anyway the merchants are definitely being more opened to it,” Novy told Bitcoin Magazine.
Image via bitValor
Solving Bitcoin Liquidity Issues in India
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