Thursday, September 3, 2015
Gov’t in U.S. First to Record Survey on Bitcoin's Blockchain
GameCredits to Integrate Digital Currencies in TurboCharged Racing and Other Video Games
GameCredits, a cryptographic payments platform for gamers and game developers is set to integrate digital currencies including its own altcoin called GMC in three video games, one of which was released on September 2.
“GameCredits is the first free open source gaming currency made by gamers for gamers and game developers,” explained the GameCredits team. The company believes that the integration of cryptocurrencies in video games could help increase digital currency adoption, and spur mainstream adoption for many alt-coins.
“We at GameCredits are breaching this chasm and are baldly exploring those uncharted waters – all in the name of providing crypto currencies the mainstream adoption they deserve,” GameCredits Monetization Expert Silvio Gucek explained.
The video game industry is one of the few markets that could benefit greatly from the block chain’s ability to send out micro transactions, or small transactions worth less than a dollar.
The market cap of the currency (GMC) that GameCredits will integrate in its games is currently US$1,574,294, which is substantially smaller than most alt coins in existence. However, the company believes GMC is the right fit for its games, as it has a max number of GMC that will ever exist, like bitcoin.
The first game to adopt the company’s currency is TurboCharged, a hybrid racing game which enables users to bet GMC for races and missions.
“As we launch our initial venture, I expect Turbocharged to act as a catalyst for innovation in this field. TurboCharged permits us to properly vet our betting system and in-game transaction platform, which shall be implemented at a much larger scale in our upcoming game ‘EON,’ currently in development,” announced GameCredits Project Manager Victor Alejandro.
itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project
In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.
On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.
Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.
The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.
“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Tim Harper.
It seems likely that Alter’s move to itBit might be criticized in the same grounds.
“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”
“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”
Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.
Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”
“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”
Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.
CoinWallet Begins Pre-test of Bitcoin Network, Schedules Largest Stress Test to Begin on September 10
The Bitcoin network took a hit yesterday as CoinWallet ran its “stress pre-test” for about thirty minutes resulting in a “2-day delay and a 50 MB backlog” according to CoinWallet CCO James Wilson.
Reports are still coming in but it seems like most bitcoin exchanges and wallet companies were able to take the test in its stride.
Wilson also told Bitcoin Magazine today that the company will be running a major stress test on the Bitcoin network on Thursday, September 10 starting at 10 a.m. GMT.
The purpose of these stress tests is to see if the Bitcoin network can handle a barrage of very small transactions that will act like a DDOS attack but most observers see this as a “political” statement and CoinWallet’s contribution to the ongoing block size debate.
When Wilson confirmed that CoinWallet ran a preliminary pretest yesterday, he noted:
“The pre-test lasted only about 30 minutes and created a 2-day backlog. As you can imagine, September 10th will indeed be stressful.”
CoinWallet will be analyzing what happened yesterday and what the response was and will let us know the results in a few days.
The test is part of the ongoing debate that is dominating the bitcoin space as companies and communities weigh in on different solutions to the Bitcoin block size.
On September 12 and 13, the first of two Bitcoin scalability workshops “for Bitcoin’s engineering and academic community” will be held in Montreal, Canada, sponsored by a dozen digital currency companies, to try and find consensus on the best block size for bitcoin.
CoinWallet (which is a UK-based Bitcoin mining and wallet) has said in the past that they are concerned that the current block size is inadequate to handle the volume of transactions in a growing bitcoin market.
As reported last week, Bitcoin exchanges and wallet companies are taking steps to prepare and most that we talked to seemed ready and able to handle the expected disruption.
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.”
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