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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at

Bitcoin Latest News

Mozilla accepting Bitcoin

Posted on 20 November 2014 | 1:55 pm

PayPal and Virtual Currency

Posted on 23 September 2014 | 9:52 pm

Wikimedia Foundation Now Accepts Bitcoin

Posted on 30 July 2014 | 3:14 pm

German Newspaper "taz" accepts Bitcoin

Posted on 22 July 2014 | 1:32 pm

airBaltic - World’s First Airline To Accept Bitcoin

Posted on 22 July 2014 | 11:03 am

Expedia to accept Bitcoin payments for hotel bookings

Posted on 12 June 2014 | 12:41 pm

Bitcoin Core version 0.9.1 released

Posted on 8 April 2014 | 4:27 pm

Bitcoin taxfree in Denmark

Posted on 25 March 2014 | 5:46 pm

Bitcoin v0.9.0 released

Posted on 19 March 2014 | 6:44 am

Bitcoin-Qt v0.9.0rc3 released

Posted on 13 March 2014 | 3:21 am

Bitcoincharts and SSL

Posted on 4 March 2014 | 2:21 pm

Tyler Winklevoss: Gemini will have a positive effect on price of Bitcoin - International Business Times UK

International Business Times UK

Tyler Winklevoss: Gemini will have a positive effect on price of Bitcoin
International Business Times UK
Tyler Winklevoss, one half of the ownership of just opened New York Bitcoin exchange Gemini, is hopeful its compliance conscious approach will provide an on-ramp to big blue chips and push up the price of Bitcoin. He told IBTimes: "I think that if we ...
Tyler Winklevoss Gemini is basically a Nasdaq for bitcoin buying and sellingEconoTimes
Bitcoin Weekly Recap 10-9-2015DCEBrief (press release)

all 4 news articles »

Posted on 9 October 2015 | 11:44 am

Dorian Nakamoto Goes On Epic Tirade About Bitcoin & Global Economy - CryptoCoinsNews


Dorian Nakamoto Goes On Epic Tirade About Bitcoin & Global Economy
Dorian Nakamoto's life was turned upside down with Newsweek journalist Leah Goodman published an article proclaiming the Los Angeles area man the founder of Bitcoin. Dorian recently pursued legal action against Newsweek proclaiming the story hurt ...
Dorian Nakamoto Talks About Bitcoin, Life in AMAFinance Magnates

all 3 news articles »

Posted on 9 October 2015 | 7:54 am

Hearing for Sask. Bitcoin mining firm delves into politics - Regina Leader-Post

Regina Leader-Post

Hearing for Sask. Bitcoin mining firm delves into politics
Regina Leader-Post
REGINA — Political intrigue and hints of hacking crept into a Regina securities hearing focused on an upstart Bitcoin company. “Do you have anything against the Conservative Party?” lawyer Cloudesley Rook-Hobbs asked Thursday in cross-examining the ...
Bitcoin Mining Company Fights Charges of Securities ViolationsFinance Magnates

all 6 news articles »

Posted on 9 October 2015 | 7:07 am

What's In A Name? The Blockchain-Bitcoin Conundrum -

What's In A Name? The Blockchain-Bitcoin Conundrum
So much that the mainstream banks are talking about the concept of how to leverage its technology without actually having to talk or touch the concept of bitcoin. That's where the blockchain comes back into the mix — aka the swan of the blockchain ...
The Bitcoin Price Move No One Predicted – and What It Tells UsMoney Morning
NewsBTC Canada Acquired by Bitcoin Co-opnewsBTC
The Blythe Masters Philosophy: Pay no Attention to BitcoinInside Bitcoins
all 7 news articles »

Posted on 9 October 2015 | 6:00 am

Remittance Firm Toast Pivots from Bitcoin, Raises $850000 - CoinDesk


Remittance Firm Toast Pivots from Bitcoin, Raises $850000
Singapore-based remittance startup Toast, previously known as Cryptosigma, has pivoted away from bitcoin and blockchain technology and reportedly raised $850,000 (S$1.2m) in seed funding. The startup – which seeks to facilitate remittances for Filipino ...

and more »

Posted on 9 October 2015 | 5:15 am

Russia's Largest Search Engine Interested in Bitcoin - newsBTC


Russia's Largest Search Engine Interested in Bitcoin
Yandex, Russia's largest search engine and internet services provider, recently expressed its interest in integrating bitcoin in its financial platform Yandex.Money. In doing so, it could allow merchants on this portal to accept bitcoin payments. This ...
Russian internet giant Yandex shows interest on BitcoinEconoTimes

all 3 news articles »

Posted on 9 October 2015 | 5:00 am

Bitcoin enthusiasts now focus on the technology, not the currency -

Bitcoin enthusiasts now focus on the technology, not the currency
With the help of some world-class advisers, it took them less than a year to give up on bitcoin itself and focus on the technology that underlies the virtual currency. Their company, Fluent, is building a blockchain-based system that large companies ...

Posted on 8 October 2015 | 11:16 pm

Bitcoin exchange Gemini safe and legal: Founders - CNBC


Bitcoin exchange Gemini safe and legal: Founders
Cameron and Tyler Winklevoss, famous for their legal spat with Facebook founder Mark Zuckerberg, launched bitcoin exchange Gemini on Thursday. While the currency has received criticism for its role in exchanges such as online black market Silk Road ...
Winklevoss Twins on the Launch of Their Gemini Bitcoin ExchangeFox Business

all 4 news articles »

Posted on 8 October 2015 | 2:37 pm

Commonwealth Central Bankers Raise Bitcoin Policy Questions

Commonwealth central bankers say they want to look closely at the potential impact of digital currency before adopting a stance toward the technology.

Posted on 9 October 2015 | 2:30 pm

Bitcoin in the Headlines: Gemini’s Stellar Debut

What has been said and by whom? CoinDesk has rounded up the top bitcoin and blockchain related headlines from across the world.

Posted on 9 October 2015 | 12:46 pm

Quiz: This Week in the World of Bitcoin

Are you up to date with the latest bitcoin and blockchain news? Test your knowledge with our quiz for the week commencing 5th October.

Posted on 9 October 2015 | 10:37 am

Could Card Networks Take Bitcoin Mainstream?

Ed Boyle and Daniel Delshad argues that, in order to cross the chasm into mass adoption, bitcoin needs to connect with existing debit card networks.

Posted on 9 October 2015 | 3:21 am

BNY Mellon: Blockchain Tech Could Transform Payments

Blockchain technology could potentially transform payments, says a new report by American multinational banking corporation BNY Mellon.

Posted on 8 October 2015 | 9:01 am

GemCoin Investors Seek $100 Million in Class Action Lawsuit

An $100m class action lawsuit has been filed on behalf of victims of an alleged Ponzi scheme involving the fake cryptocurrency 'Gemcoin'.

Posted on 8 October 2015 | 3:42 am

Lightning, Duplex and the Search for Scalable Bitcoin Micropayments

CoinDesk speaks to developers seeking to update the functionality of bitcoin's technology to allow for cost-effective micropayments.

Posted on 7 October 2015 | 4:59 pm

Royal Bank of Scotland Trialing In-House Cryptocurrency

Royal Bank of Scotland (RBS) is experimenting with its own in-house cryptocurrency, says the bank's technology chief.

Posted on 7 October 2015 | 10:56 am

Symbiont Adds FinTech Veterans to Advisory Board

Symbiont has added Maureen O'Hara, chairman of Investment Technology Group and a former US Treasury official to its board of advisors.

Posted on 7 October 2015 | 9:29 am

5 Mainstream Finance Figures Embracing the Blockchain

Who's said what and why? CoinDesk has rounded up some of the most interesting crypto related comments made over the last year.

Posted on 7 October 2015 | 5:22 am

Bitcoin Price Hits Highest Level Since August

The price of bitcoin on the CoinDesk USD Bitcoin Price Index rose to a high today of $247.57, its highest total since 18th August.

Posted on 6 October 2015 | 3:40 pm

Japan's Top Think Tank Launches Blockchain Study

The Nomura Research Institute will study blockchain technology to assess its use in the securities sector.

Posted on 6 October 2015 | 2:50 pm

73% of Finance Pros Think Blockchain Tech Can Thrive Without Bitcoin

A new survey suggests that many finance professionals see a bright future for the blockchain – just not one involving bitcoin.

Posted on 6 October 2015 | 12:25 pm

BitPay Creates Bitcoin POS Solution for Ingenico Devices

BitPay has partnered with payments giant Ingenico to allow brick and mortar stores to take bitcoin payments via a traditional point-of-sale terminal.

Posted on 6 October 2015 | 11:16 am

Russia’s Largest Search Engine Yandex Interested in Integrating Bitcoin

Russia’s largest search engine and Internet-based services provider Yandex is interested in integrating bitcoin to its financial platform Yandex.Money, to allow its merchants to accept payments in bitcoin.

At the Finnopolis FinTech Forum held in Kazan, Yandex.Money CEO Maria Gracheva announced that the company is looking forward in supporting bitcoin payments. In an interview with Bitcoin Magazine , Nora Kirkizh, media relations manager of Yandex.Money further explained that bitcoin fits perfectly with the payment solutions offered by Yandex.Money, ranging from the online payment solution used by more than 76,000 online stores, e-wallets, online banking services, etc.

“We are definitely paying close attention to cryptocurrencies,” the Yandex team told Bitcoin Magazine.

“The technology on which they are based can be used as the foundation for lots of different products,” said Kirkizh. “For example, Yandex.Money offers online stores Yandex Payment Solution. With this service they can accept payments from customers via bank cards, e-wallets, online banking accounts and other possible payment methods. Currently, over 76,000 online stores use Yandex Payment Solution to process their payments. Indeed, bitcoin would fit this range of methods perfectly. If it was one of the options in Yandex Payment Solution, users could easily use it to pay for goods on any website. Nevertheless, until cryptocurrencies are regulated by Russian law, we cannot work with them viably.”

Legality of Bitcoin

Despite the company’s interest in bitcoin and its advantages, the legality of bitcoin in the country is still undecided. While the Russian Central Bank prohibits the use of bitcoin, Russian president Vladimir Putin announced that bitcoin can probably be used in “some account.”

Due to this uncertainty, the Yandex team plans to wait until the authorities and the government approve the use of bitcoin for corporations and organizations.

“Different institutions have different attitude to bitcoin. Russian Central Bank prohibited this currency in the country, for instance, although other organizations were interested in bitcoin and suggesting to know it better. We still do not know what bitcoin will be in the near future, and there is not an opportunity to work with it legally,” said Kirkizh.

Yandex.Money currently has more than 22 million users, with more than 12,000 new accounts opened daily. Yandex believes that bitcoin’s efficiency in processing payments and transactions could greatly benefit its financial platform and could be offered as an alternative to credit card and bank payments.

“Cryptocurrencies have their pros and cons. On the one hand, it’s an inexpensive technology and it’s very easy to implement, and so as soon as it becomes legal to work with them, basically any payment service will be able to quickly implement the technology,” continued the Yandex team.

However, the Yandex.Money team is still worried that most of their users will not want to take the initiative to convert fiat-money to cryptocurrencies. Yandex will consider integrating bitcoin across their platforms as soon as bitcoin becomes legal and the bitcoin industry in Russia starts to grow.

“The audience for cryptocurrencies is still quite small and it seems like making simple and easy-to-understand products based on “real” money will still be the logical thing to do for some time to come. In order to convert live money to cryptocurrency, users will need some sort of extra motivation and a good amount of time. That will hold back the growth of blockchains,” said Kirkizh.

The post Russia’s Largest Search Engine Yandex Interested in Integrating Bitcoin appeared first on Bitcoin Magazine.

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Globalizing Digital Currency — Trends, Gaps, Opportunities

This is a guest post by Michael Haley, Operations Manager at AlphaPoint.AlphaPoint is a financial technology company that powers digital currency exchanges and provides institutions aggregate access and order routing to digital currency markets.

Right now, there are active digital currency markets running 24/7 in at least 45 national currencies.1 That is, there are digital currency markets in one quarter of the 180 national currencies recognized as legal tender by the United Nations. 2 Seven years into the onrush of Nakamoto’s protocol, we think it makes sense to ask: Why does this matter? Why is closing the gap on the remaining three quarters important? What opportunities reside there?

Why It Matters

It matters in the first case because the geographic distribution of these markets is misaligned with the distribution of bitcoin market potential. At any given point in time, it is difficult to establish a bead on the aggregate global exchange count. Small exchanges crop up with little media presence and volunteer-run indexes have difficulty staying current.

The pattern, nevertheless, is clear enough: Europe and North America are each serviced by more than 30 exchanges, and East Asia by roughly 20, concentrated in China. Conversely, South Asia, Africa, the Middle East, and Latin America have nothing approaching this density. Further, exchange volumes today correlate with exchange count, with the staggering majority of digital-fiat conversion hosted in the Chinese yuan, U.S. dollar, and euro. The overwhelming majority of bitcoin-fiat trades is against the yuan, virtually all of it at zero-fee exchanges, creating masses of volume whose validity is difficult to pinpoint.3 Beyond this, American dollars and euros come second and third, respectively. Other currencies in aggregate scarcely register.

1 This number is per publicly available data from bitcoin charts , Bitcoin Average , bitcoinity , Coin Market Cap , and elsewhere. An asterisk: Of course there are national markets for Litecoin, Ripple, and the like, and of course there are reasons to believe DAAP coins will become a bigger part of volumes in the near future. But the fact remains that Bitcoin’s market capitalization dwarfs that of its competitors. Currently BTC capitalization is fifteen times that of XRP. And of course there are informal and P2P markets for digital tokens of all kinds. But here I am defining ‘active markets’ as those serviced by at least one order matching service (one exchange), because informal markets tend to be erratic, illiquid, and difficult to quantify. 2 Source: United Nations Treasury 3 See, e.g.80% of bitcoin is exchanged for Chinese yuan ” (Mar. 10, 2015 -Quartz)

And yet, digital currency’s greatest mainstream potential and most compelling use cases tend to reside outside of North America, Western Europe, and East Asia.

Instead, the greatest potential beneficiaries tend to be concentrated in national markets whose fiscal, political, and infrastructural histories have rendered basic financial services out of reach for many businesses and individuals: Venezuela, Zimbabwe, Belarus, etc.

Economist Garrick Hileman provides a useful snapshot of this distribution in his Bitcoin Market Potential Index (2014). Of the highest-ranking markets in the index, more than half are based in sub-Saharan Africa and Latin America. Likewise, there are indicators that regulatory clarity is improving in these regions -- in Chile and Nigeria particularly -- at the same time beneficial frameworks continue to elaborate themselves in more established hubs -- places such as Singapore, the United Kingdom, or Luxembourg.4

“We’re working in markets where it’s impossible for companies to sell online without giving away more than 5 percent of their business to payment processors,” said Gabe Abed, co-founder and CEO of Bitt, a non-bank financial institution (NBFI) and universal Bitcoin services firm based in the Caribbean. “Individuals sending money from one island to another routinely lose 12 percent on fees. Credit card acceptance is low, and yet there’s a very high penetration rate for mobile Internet -- so there’s this gap, which is precisely what we’re aiming to fill.”

Opportunities Across Global Markets

This gap between solutions offered by legacy systems and those made possible by the blockchain is falling into sharper relief for consumers and enterprises alike, and the opportunity is massive.5

4 Thanks to Adam Vaziri, Director at London-based DIACLE, for his input. 5 Particularly given how closely exchange distribution correlates with the distribution of the network itself and of merchant adoption.

To put matters in perspective: More than 50 countries host over $1 billion in daily foreign exchange volume. 6 In sum, there is more than $5 trillion in global FX trading per day. Even 1 percent of this total is $50 billion -- more than 1,500 times the current daily total for digital currency trading.

“In the Bitcoin community, we’re used to talking about underbanked people,” said Gabriel Miron, CEO of Mexico City-based meXBT. “But more and more, we’re finding that underbanked businesses are key.” In moving funds between Mexico and, say, China or Brazil, banks perform FX conversion at a loss through the U.S. dollar. “And if you’re not one of a bank’s largest customers, this process can take weeks. Using bitcoin as the rails, we can settle in under 24 hours. Existing bank infrastructure can’t get close to that.”

“We’re seeing that larger firms are particularly interested in more efficient settlement,” said Jesse Chenard, founder and CEO of MonetaGo, adding that smaller enterprise clients are more interested in availing arbitrage opportunities in bitcoin markets to drive down fees. “On a recent $13,000 intracompany transfer, we saved the client $600 in fees they would have otherwise had to pay to Bank of America.” In so many words, the needs and corresponding solutions are diverse, a point recently echoed by Andreas Antonopoulos.7

Globalizing Digital Currency — Trends, Gaps, Opportunities

The opportunities we see can be spaced across two fronts: (1) making digital currencies more widely available, and (2) leveraging them to streamline international transfers. Yet we see these as part of the same movement, as two sides of the same coin -- both predicated on active, stable markets across effectively all national currencies.

More often than not, the speed and cost benefits offered by digital currency will be most dramatic in south-south transfers (between countries in Africa, Latin America, South Asia, etc.), where bitcoin (or other digital currencies) can facilitate FX conversion without needing to move through the U.S. dollar, radically reducing both costs and settlement times.

BitNodes and CoinMap , respectively. We would argue the connection is not simply correlative but causal, that mining and exchanges are preconditions for broader use. 6 Source: Bank for International Settlements Triennial Survey (April 2013) 7 IDEO Futures podcast Episode 21.5 (August 2015)

As markets expand and access improves, and as regulatory frameworks fall into sharper relief, we believe more and more businesses and individuals will recognize these benefits, that south-south trade will help drive adoption forward in the months and years ahead, and that this demand will help make digital currencies more available to the populations that stand to benefit from them most.

The post Globalizing Digital Currency — Trends, Gaps, Opportunities appeared first on Bitcoin Magazine.

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The Who, What, Why and How of the Ongoing Transaction Malleability Attack

For the past several days*, the Bitcoin network has been plagued by a so-called “transaction malleability attack.” Bitcoin users have experienced a number of annoyances, causing confusion and frustration. And while the transaction malleability issue is well-known and has plagued the Bitcoin network before, to many it is still unclear what it is, why it is a problem, who is causing the attack right now, and what can be done about it.

*According to the claimed attacker (see below), the attack is currently paused at the time of writing, but could and probably will be continued at any time.

What is transaction malleability?

In order to understand the transaction malleability attack, it helps to first understand the basics of how Bitcoin transactions work. In simplified form, each transaction over the Bitcoin network consists of different types of data. This includes transaction inputs (refering to the addresses bitcoin come from), transaction outputs (refering to the addresses bitcoin are sent to), the amount of bitcoin sent, and more. All of this data is cryptographically signed, combined, and scrambled (“hashed”) into a unique and smaller piece of data: a hash. This hash is essentially the transaction ID. If a miner confirms the transaction, the transaction ID is included in a block and stored in the blockchain.

The problem that enables transaction malleability, however, is that effectively identical signatures can result in completely different hashes. The specifics of this are deeply cryptographic, and are very hard – if not impossible – to explain in plain English. But as one extremely simplified example to get an idea of the problem, a comparison would be that the numbers “145” and “0145” are effectively the same number in many cases. But when hashed, “145” and “0145” might actually produce completely different results.

In the case of the ongoing transaction malleability attack, the attacker picks transactions from the Bitcoin network, and tweaks signature data. As a result, all sorts of transactions have two completely different transaction IDs circulating on the Bitcoin network. And since a specific transaction can confirm only once, just one of the transaction IDs will be included in a block, while the other will be ignored.

Are transaction malleability attacks a problem?

The essence of the transaction malleability problem arises when someone uses the transaction ID – and nothing but the transaction ID – to check whether a transaction has been included in a block. This is a problem, of course, because the transaction ID may have been changed by the attacker, and his new transaction ID could have been included in the block rather than the original transaction ID. It might then seem as if the transaction itself never went through – though it effectively did.

This can be problematic for several reasons.

For one, it complicates writing wallet software. This is a problem in particular for Bitcoin companies that use their own software, which several of the bigger businesses in the space do.

The best-known and most infamous example of such a company would be Mt. Gox, the world's first bitcoin exchange that spectacularly failed in 2014 as it claimed to have lost most of its customers’ funds. Mt. Gox claimed it lost this money because it fell victim to a long-lasting malleability attack, which messed up its bookkeeping. With it seeming as if transactions never confirmed, users are said to have been able to withdraw more bitcoin than they owned. Whether this is really why Mt. Gox lost so much of its customers bitcoin remains unclear, but it could – at least theoretically – be true.

This is an extreme example, as Mt. Gox asserts to have automatically re-sent bitcoin merely based on the transaction IDs – not a smart thing to do. But transaction malleability could complicate matters for Bitcoin companies with a more sensible payout policy, too. If they, like Mt. Gox, run software that keeps track of transaction IDs for bookkeeping, the transaction malleability attack could severely damage their records. Even if they do not automatically resend transactions, and, as such, don’t lose any, it’s still a nuisance.

A less urgent but potentially bigger problem is that transaction malleability impedes on chained transactions. Chained transactions are transactions that use an unconfirmed output as its own input, or in other words: They spend bitcoin balances that have not been confirmed yet. But if they spend transactions of which the transaction IDs are changed, they – and all subsequent chained transactions – become invalid all at once.

Chained transactions come in a lot of shapes and forms. The most common might be bitcoin spent from change addresses. But chain transactions also form the basis of more fancy bitcoin use cases, such as payment channels. Indeed, the transaction malleability issue is one of the reasons advanced scaling solutions such as the Lightning Network are not quite ready to be deployed yet.

It bears noting, however, that transaction malleability is no existential problem for Bitcoin. Only the transactions IDs can be changed, not the transactions themselves; no one can steal funds from anyone else, and no one can reverse or block transactions. Moreover, the current transaction malleability attack doesn’t really make the deeper problems with transaction malleability worse. These risks would have existed with or without the current attack.

Why is the Bitcoin network being attacked?

A short answer would be that it's hard to know for sure, as it is hard to determine who is carrying out the attack – let alone why. user “amaclin,” however, has claimed to be behind the attack. Amaclin, who is probably Russian (or at least speaks Russian), announced his involvement in the malleability attack shortly after it was first noticed on October 1.

Amaclin says he has carried out the attack, essentially, out of boredom. Additionally, amaclin argues that Bitcoin is fundamentally broken. He specifically points out that the incentive structures of Bitcoin’s development process do not align well, as users are not incentivized to reward developers for their work building and maintaining Bitcoin. By attacking the network, amaclin believes he is revealing that only a small number of developers can fix the issue, while most Bitcoin users expect them to do so for free. That is an unsustainable proposition, amaclin says.

Amaclin claims that he is not attacking the network in order to gain financially in any way. He also denies attacking any specific business in order to defraud them or otherwise. He has, however, posted two donation addresses in his forum signature: One is labeled a vote for the attack, while the other is labeled a vote against. At the time of writing, both addresses have had one transaction sent to them, adding up to 300 bits, worth less than 10 cents in total.

Whether amaclin is telling the truth is hard to verify. But the fact that he could be telling the truth, the fact that a networkwide attack on the Bitcoin network could be carried out by a bored individual with some coding skills, is probably quite telling in itself.

Can the problem be solved?

The good news is that the transaction malleability issue could likely be solved eventually. BIP 62 (Bitcoin Improvement Proposal 62) in particular is intended to prevent malleability attacks by narrowing down the types of data that can be included in Bitcoin transactions. BIP 62 could be implemented as a soft fork, which means that it would then be up to miners to adopt the changes.

The bad news is that the issue is still pretty far from actually being solved. The transaction malleability problem is quite complicated, and some solutions might create other – even bigger – problems for the Bitcoin network. BIP 62 currently is still in draft stage, and not ready to be implemented in Bitcoin Core yet. Moreover, it is far from clear that BIP 62 does or even can tackle all possible malleability issues. It is possible that additional exploits have not yet been found, and have, therefore, not yet been countered by proposals included in BIP 62.

While fixing the malleability issue is widely considered to be a problem that needs solving, it might take a while before a definite solution is ready – if one ever is. For the foreseeable future, wallet software will have to tackle the problem using workarounds.

Thanks to Bitcoin Core developer Peter Todd and Bitonic CEO Jouke Hofman for providing feedback.

The post The Who, What, Why and How of the Ongoing Transaction Malleability Attack appeared first on Bitcoin Magazine.

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Bitcoin Businesses Meet with US Congressman Jared Polis to Find Common Ground

Congressman Polis Bridges Gap Between Bitcoin Companies and Capitol Hill

U.S. Congressman Jared Polis took time out from his busy campaign schedule recently to meet with representatives, including CEOs, from nine digital currencies companies including itBit and Blockchain.

Organized by the Washington, D.C.-based advocacy and education group Coin Center, the roundtable was an attempt to bridge the gap between the world of Washington and Congress and the world of fintech and digital currencies.

Coin Center Executive Director Jerry Brito, who chaired the meeting, was happy with the outcome and told Bitcoin Magazine:

"We visit policymakers in D.C. often to talk about these issues, but there's no substitute for having them come out and meet the actual innovators who are building these great companies and technologies. I think Rep. Polis learned a lot about what these companies do and the regulatory issues they're facing, and they learned a bit more about what it takes to move policy in government."

Rep. Polis is an acknowledged “thought leader” for the digital currency movement and has made a name for himself in the community with his ongoing support for Bitcoin.

Polis was one of the first to take advantage of a Federal Election Commission ruling that political candidates can now accept donations in bitcoin and has “Now Accepting Bitcoin!” on his website.

CEOs from nine digital currencies businesses meet with Rep. Jared Polis to find common ground

"It was a very productive meeting. Polis really 'gets' digital currencies.

He has tech DNA, something that is still too rare in D.C.," Blockchain’s Marco Santori, who attended the meeting, told Bitcoin Magazine.

"Encouragingly, whenever the small group of entrepreneurs and policy experts in the meeting would register generalized grievances, Polis would respond with very specific proposed solutions," Santori said. "I think this kind of meeting will lead to improvements for digital currencies companies in the future."

It’s an election year in the U.S., and Rep. Polis is seeking re-election in Colorado’s 2ndDistrict, but he wants to get started immediately making sure that digital currencies startups are being served by government and not strangled by regulatory red tape.

“We have a policymaker who is genuinely excited about this technology taking the time to meet with the community at the forefront of making it successful," said Brito. "The idea of a U.S. representative taking Bitcoin so seriously was laughable as little as a few years ago. This meeting shows just how quickly it is growing toward the mainstream.

“It's a major indicator of the technology's growing significance that such a meeting took place to begin with. The technology has grown and its industry has become mainstream to the point where congressmen are meeting with leaders from it.”

Congressman Jared Polis and Coin Center Executive Director Jerry Brito meet with representatives from the digital currencies community.

Rep. Polis’s interest in digital currencies comes from a lifelong passion for technology and the Internet.

While in college, Polis started his first tech company, American Information Systems, and in 2006 founded Techstars, a Colorado-based startup accelerator.

“Rep. Polis has been an engaged and vocal supporter of Bitcoin innovation for some time now. This event gives him and the people building on this technology an opportunity to meet, exchange ideas, and learn from each other,” added Brito.

Companies that met with Congressman Polis included AlphaPoint, Blockchain, Case, Chain Code, Digital Currency Group, itBit, Onename, SolidX Partners Inc., and Union Square Ventures.

The post Bitcoin Businesses Meet with US Congressman Jared Polis to Find Common Ground appeared first on Bitcoin Magazine.

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Transparent Bitcoin Applications like OKLink Are a Huge Market in China, Says OKCoin's Jack Liu

OKCoin's new superwallet allows bitcoin as a background method of money transfers not only across borders, but across currencies as well.

Jack Liu, head of international at OKCoin, recently discussed bitcoin in China and as an alternative payment system in an interview with Bloomberg Business.

Liu referred to the dramatic price crash of bitcoin in 2013 as a good thing, because it forced developers and entrepreneurs to think of creative applications of bitcoin and its underlying blockchain technology instead of focusing uniquely on the price of bitcoin. As a result, there are now large venture capital investments and lots of startups building infrastructure.

“The people behind the industry used to be very libertarian, very political in nature, and wanted to push an alternative currency and an alternative lifestyle,” said Liu. “You are now seeing the bitcoin players receive venture capital and work with banks closely, trying to create a more harmonious financial system integrating the traditional financial system with the Bitcoin network, and that’s going to be much more powerful.” and , two separate companies owned by the same investors and focused respectively on Chinese and worldwide digital currency trading, were founded in 2013 with a $1 million angel investment from Ventures Lab and Silicon Valley venture capitalist Tim Draper, and received a $10 million series A funding round in March 2014. OKCoin is perhaps the largest exchange in the world with 20 percent of daily trading volume, said Liu.

“As a native speaker of both English and Chinese, and as someone who has worked in traditional finance and at a U.S.-based bitcoin exchange, I hope to bring both international and institutional perspective to OKCoin and to shed more light on the Chinese market with the global Bitcoin community,” said Liu when he joined OKCoin as Director of institutional strategy and sales in November 2014. “I view OKCoin now as an international company, not as a Chinese one.”

According to Liu, the most interesting applications use bitcoin and the blockchain as a transparent intermediate step for fund transfers in fiat currencies, making sending and receiving money as easy as sending and receiving email.

“We can hide bitcoin technology in the background, and that’s what we have launched with a product called OKLink, in the spring, that was the first ‘superwallet’ in the world,” said Liu. “A superwallet is really a mobile wallet that allows you to hold a more comfortable type of value, like the USD or the CNY, but transact over the Bitcoin network.” Liu added that OKLink transactions aren’t affected by the volatility of bitcoin. “Because you are doing instant buy of bitcoin and sell of bitcoin, you are not affected by the bitcoin price,” he said.

OKCoin launched the OKLink “superwallet” in April. OKLink is an open digital wallet, which allows national and digital currencies to transact cross company, cross border, and cross currency in an instantaneous and free manner. OKCoin gives an example of consumer-to-consumer transaction in fiat currencies channeled transparently through the blockchain:

“Paul, an American, and Tom, a Canadian, are good friends. Paul is a Circle user while Tom uses OKLink. Tom would like to borrow from Paul $100 USD worth of Canadian dollars (CAD). Tom opens his OKLink Superwallet and shows his QR Code to Paul. Paul through scanning the QR code with his Circle Superwallet, sends Tom $100 USD. The Circle Superwallet buys exactly $100 USD worth of bitcoins from a U.S. dollar Bitcoin exchange and then via the Bitcoin network sends the bitcoins to Tom’s OKLink account. Tom has instructed as default that incoming funds should be received as CAD. OKLink Superwallet takes the received bitcoins and sells it on a CAD Bitcoin exchange for CAD. In the end, Paul sent $100 USD to Tom, and Tom received it as CAD to use.”

Besides consumer-to-consumer transactions, OKLink can be used for business-to-business, consumer-to-business, and business-to consumer transactions.

“This is a huge market, especially in China,” continued Liu. China already owns around 50 percent of bitcoin mining hashpower and 60 percent of exchange volume, and Chinese people – especially students – are frequently abroad and need efficient cross-border payments. Chinese consumers are already used to “a beautiful payment experience” with WeChat and Alipay for domestic payments, and they expect the same for cross border payments.

Interestingly, the Bank of America (BoA) recently filed a patent application titled “System and Method for Wire Transfers Using Cryptocurrency” for an alternative to traditional wire transfers, where the funds are first transferred to a cryptocurrency exchange, then converted to a cryptocurrency such as bitcoin, then sent to another exchange, and finally converted into another currency for the recipient.

In other words, BoA wants to patent the concept of using a cryptocurrency as a transparent intermediate step for fiat currency transfers, but it seems that OKCoin got there first.

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Winklevoss Twins Announce the Launch of Gemini Bitcoin Exchange

Investors have been watching and waiting for the launch of Gemini, the bitcoin exchange launched by Cameron and Tyler Winklevoss, since it was first announced on January 23. The wait is over.

Customers have been begun receiving instructions for onboarding and will be able to officially begin trading on the Gemini exchange starting Thursday, October 8 at 9:30 a.m. EST.

The nine months it took for Gemini to go from announcement to launch is due to a belief in the need to “ask for permission, not forgiveness.” However, on September 23, Gemini Trust Company received approval for its Articles of Organization and was further granted an exemption from the deposit insurance requirements of Section 32 of the Banking Law.

Due to its corporate structure as a limited liability trustcompany (LLTC), it is able to service both individual and institutional customers, which is important because many believe that banks are curious about trading bitcoin.

“The reality is that institutions will bring the most amount of capital to the exchange,” Cameron Winklevoss, president of Gemini Trust Company, told Bitcoin Magazine in an interview and demo. “Every major bank in the world has people looking at bitcoin.”

The downside of being an LLTC is that the company itself cannot provide FDIC insurance for its accounts. That being said, Gemini revealed at launch that Signature Bank, based in New York, was one of its primary partner banks that would hold all fiat currency transferred to Gemini. Through Signature, the fiat currency is eligible for FDIC insurance.

Four Silos of Success

In an interview with Cameron Winklevoss, he revealed that the company operates on four silos that they drive toward for success.

The fastest way for a user to lose trust in a company is for security to be insufficient. Because of that, security is the company’s primary objective. They hired Cem Paya, the former security lead at AirBnB, to be the chief security officer at Gemini. Further, all bitcoin is held by Gemini in a cold, geographically dispersed network of servers. When the Winklevoss Bitcoin ETF, COIN, launches, all of its bitcoin will be held by Gemini.

Taking it a step further, though, the company has put in place a rule that prohibits any links in emails. For example, in its “Gemini is open for business!” launch email, there is no link to Gemini. To prevent phishing attempts whereby a hacker gains access to a user’s account, the individual has to manually type in to register.

Following security came compliance. Since the company is based in New York, that meant working with the New York State Department of Financial Services (NYFDS). According to Winklevoss, NYSDFS seemed open to working with Gemini. Compliance was also required for the remainder of the country.

At launch, users in California, Colorado, Delaware, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota,Mississippi, Missouri, Montana, New Hampshire, New Mexico, New York, North Carolina, Ohio, Rhode Island, South Carolina, Tennessee, Utah, Vermont,Washington, D.C., and Wyoming can use Gemini starting on Thursday.

The third component of the Winklevoss’ four silos is banking. There have been too many instances where a bank won’t cover a bitcoin company because of the concern about auditing. “It didn’t take a lot of selling to convince the bank to work with us,” Winklevoss said. “They liked the team and the product.”

Only after security, compliance and banking were handled did the product become a priority. And if any of the four silos had to suffer, it would be product.

“You have to have all four right to succeed, but if you’re missing a little bit on product, it’s not going to be catastrophic,” he explained. “Rather than building a rocket shop in the air, we built it in the hanger, tested it, and tested it again, and then we have liftoff.”

In his interview with Bitcoin Magazine, Winklevoss talked at length about the risk tolerance of banks and the simple fact that they hate risk.

“It’s better to have the regulatory framework figured out because the risk appetite of banks is conservative. People don’t recognize how important regulation is these institutions. Banks care,” he explained.

And because it is the big institutions that are bringing the majority of the capital, it was important to the team to have that regulatory framework squared away. “There is a lot of dark pool trading, because it is easier, that will go on exchange when they are regulated.”

Gemini wasn’t the first to market, but Winklevoss said that wasn’t important to him.

“Market centers [like Gemini] will build up reputation and credibility with participants over time. A month does not make or break your business,” he explained, referring to other exchanges that had already launched in New York City.

Trading on the Exchange

The exchange opens for trading on Thursday 9:30 a.m. EST, but users can begin the process of signing up today.

Part of the registration process is a knowledge-based authorization. The system will attempt to verify a user’s identity through a Social Security number and then questions about that user’s credit. For example, it will ask if they have ever owned a house on a particular street if that appears on the credit report. This is meant to speed up the authorization process for that user.

In our demo, Winklevoss stressed the importance that he wanted Gemini to become the favorite of both institutions and individuals.

“Early community is certainly very important because they are the most vocal and they are the ones who will touch the product more,” he explained.

The team went with a very clean look, using as much white space as possible. Further, the system was built with visualization engines that enable the user to identify what impact their particular trade will have on the order book.

For example, in the image above, if a user decided topurchase 0.631 BTC at a limit of $237.71, the blue portion of the order book would fill in darker where that purchase takes place. This is meant to show what the average price would be for the user.

At launch, it will be free to deposit and withdraw fundsfrom Gemini. However, the company will charge a 25 basis points fee for both buyers and sellers who trade on the exchange. There will also be APIs for individuals who are more interested in programmatically trading to participate.

Photo TechCrunch / Flickr

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Dutch National Police Set Sights on Blockchain-Based Cloud Services

The Dutch National Police have taken an interest in Blockchain-based cloud services. A presentation given over the summer reveals a new focus on Storj and Filecoin.

Members of the Dutch National Police and UNIJURIS gave a presentation in July titled “Technical and Legal Challenges of Criminal Law Enforcement in the Digital Age .” This is an update of a presentation given in 2013 titled “The merits & challenges of distributed least authority data storage .”

The presentations explain how cloud storage and file hosting "Data is cut up in a hundred pieces. Pieces are spread over a hundred servers, in dozens of countries, over a multitude of hosters.”

Both presentations explain how Mega (Mega Limited) replaced the controversial Megaupload cloud storage service. Megaupload was seized and shut down by the United States Department of Justice in January 2012 over copyright infringement claims.

Extradition hearings are currently underway for Megaupload founder Kim DotCom in New Zealand. When the original Megaupload site was seized, federal prosecutors stated, “This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.” However, Kim DotCom, founder of Megaupload and Mega, recently distanced himself from Mega, stating over the summer that he would not trust Mega with user data and that he intends to create a third version of the site.

How would you like a new Internet that can't be controlled, censored or destroyed by Governments or Corporations? I'm working on it #MegaNet

— Kim Dotcom (@KimDotcom) February 16, 2015

As the Dutch presentation explains, next-generation technologies such as Mega make it more difficult for law enforcement to seize: “Never mind reading it. Data cannot even be located without the key.”

The presentation from this year was updated to include both Filecoin and Storj (pronounced “storage.”).Filecoin, according to its website, is a “data storage network and electronic currency based on Bitcoin. Users can “Earn Filecoin by renting disk space.” Filecoin was named by both Business Insider and Coindesk as Bitcoin projects to watch in 2015.

Storj, according to its website, is “based on blockchain technology and peer-to-peer protocols to provide the most secure, private, and encrypted cloud storage.” It will allow users to rent out extra hard-drive space and bandwidth using MetaDisk . It is built on top of Bitcoin with the Storjcoin X “SJCX” Counterparty token. According to CoinMarketCap , SJCX has a market capitalization of approximately $735,000 at time of publication.

Bitcoin Magazine spoke with Storj founder Shawn Wilkinson, who said that the presentation did a good job on half the picture:

“Traditionally, law enforcement could knock on the door of a third-party provider for access to information. As this is abused and data becomes more and more abstract and distributed (for economic and reliability) this will become almost impossible. This should lead to a decrease in cybercrimes as well. If governments can't get access to it, neither can attackers.”

Further, he noted that it missed some of the benefits to law enforcement:

“[It] Misses the possible use cases with this type of system in law enforcement. For example, handling of digital evidence in a public and verifiable way. “[This was] Not possible before.”

For example, in a popular dashcam video of a phone theft on Youtube, the detective assigned to the case was eventually provided with a signed (with an indelible ink pen) DVD by the person who captured the video. This seems like an antiquated way to prove authorship.

The presentation offered the following “solutions”:

Regarding Jurisdiction: “Legal duty (based on a warrant, of course) for third parties (companies) to hand over data locally in countries they offer their services in.”

Regarding Enforcement: “Seizure and acquisition moves back to the [end user or] client (not the hoster [or company].) [This creates a] New legal paradigm regarding the ‘location’ of data.”

Wilkinson said that the “P ossible solutions portion won't work at all as these solutions become more and more distributed.” While he disagrees with solutions, he thought the presentation was very forward-thinking and they are “asking the right questions.”

The distributed platform such as that which Storj will provide is a paradigm shift away from traditional centralized services. The past year saw very high-profile hacks of SONY , the Office of Personnel Management and even Ashley Madison . The breadth and scale of these kinds of data breaches are made possible though centrally stored data. While decentralized solutions may make law enforcement’s job more difficult, there must be thoughtful regulation because it might be a service such as Storj’s that will prevent a “cyber Pearl Harbor ” from happening.

Indeed, the authors note that:

“When these technologies, and others like them, converge in the … not so distance future, cloud based security will take a large step forward towards the multi granular least authority approach required for true in-depth cloud security….When looking at the public-order and security aspects of law enforcement, these developments can only be seen as a blessing.”

They also note: “When looking at the same developments from the prosecution and forensics viewpoint however, we see major technological and legal obstacles and challenges arising …”

The Dutch Police have had their hands full lately with a Supermarket Bomber making ransom demands in bitcoin. Earlier this year, The National High Tech Crime Unit of the Netherlands’ police and Kaspersky Lab announced that they would help victims recover from CoinVault ransomware. Earlier this month they arrested two young adults believed to be involved in the CoinVault campaign. They have been playing whack-a-mole with several Silk Road copycats . The Dutch National Police Agency also created a fork on GitHub of John Ratcliff's blockchain: A minimal parser for the bitcoin blockchain .

UNIJURIS, also located in the Netherlands, is a research group on unilateralism and the protection of global interests and has a section on its website called “Extraterritorial jurisdiction on the Internet .” This includes a research paper “The end of territory. The re-emergence of community as a principle of jurisdictional order.”

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WEF Survey Predicts Bitcoin 'Tipping Point' Happening By 2027

A survey by the World Economic Forum says the tipping point for bitcoin and blockchain adoption will happen by the year 2025.

The majority of 800 executives and experts surveyed by the World Economic Forum (WEF) put the 6-year-old currency bitcoin, as well as the underlying blockchain technology, 10 percent of the world’s Gross Domestic Product (GDP) running through the two technologies by 2025. The WEF was a bit more cautious with its own prediction and put 2027 as year they would reach the “tipping point.”

The WEF described the use of apps such as, a website that allows people to issue programmable contracts that pay out sums of bitcoin when certain factors (set by the creator of the contract) are reached and verified, without the involvement of any middleman, as a “Shift In Action” in society. “These contracts are secured in the blockchain as “self-executing contractual states,” which eliminate the risk of relying on others to follow through on their commitments.”

“[By 2025] 58% of respondents expected this tipping point to have occurred. Bitcoin and digital currencies are based on the idea of a distributed trust mechanism called the 'blockchain,' a way of keeping track of trusted transactions in a distributed fashion. Currently, the total worth of bitcoin in the blockchain is around $20 billion, or about 0.025% of global GDP of around $80 trillion,” read the report.

Positive impacts of bitcoin and blockchain technology reaching a critical tipping point listed by the WEF included: more direct financial transactions with less and less middleman; brand new assets that can be traded; better property records, and more financial inclusion in emerging markets; blockchain-based contacts and legal services used as unbreakable escrow or programmatically designed smart contracts; and increased transparency.

Technological Shifts that Will Change the Future

World Economic Forum’s Global Agenda Council on the Future of Software and Society gathered to identify 21 changes in society caused by software that would shape the future. They then survey business and technological leaders about when the “tipping point” for these technologies would happen and what the possible positive and negative effects of them would be, and published the results in a report titled Deep Shift: Technology Tipping Points and Societal Impact .

The committee featured 18 thought leaders and executives in the technology industry, which included several familiar, or involved, in the bitcoin/blockchain industry. Ron Cao, managing director of Lightspeed Venture Partners, a venture firm that invested in American bitcoin exchange CirclePay and Chinese exchange BTCC (formly BTC China); Primavera De Filippi, research fellow at Berkman Center for Internet & Society, France, and early explorer of bitcoin’s and blockchain’s effect on modern law, among others.

The report also included the “sharing economy,” 3D printing, smart cities, wearable devices, the Internet of Things (IoT), among the list of future-shaping technologies.

“Now comes the second machine age. Computers and other digital advances are doing for mental power – the ability to use our brains to understand and shape our environments – what the steam engine and its descendants did for muscle power,” wrote Council Vice-Chair and Director at MIT Initiative on the Digital Economy at Massachusetts Institute of Technology Erik Brynjolfsson in the report.

Blockchain use by governments was another trend that was included in the list. Possible uses by governments included recording land registries, tax collecting schemes, and other improvements in governmental processes. The tipping point decided by the WEF was the first time that tax is collected through a blockchain application and expected it to happen by 2023.

“[By 2025] 73% of respondents expected this tipping point to have occurred. The blockchain creates both opportunities and challenges for countries. On the one hand, it is unregulated and not overseen by any central bank, meaning less control over monetary policy. On the other hand, it creates the ability for new taxing mechanisms to be built into the blockchain itself (e.g. a small transaction tax).”

The WEF remained neutral on whether this would be a net positive or negative, citing corruption, real-time taxation, and unclear role for government in the process, including a state’s central bank, were reasons it could “cut both ways.”

An example given by the report as already underway was a 2016 mayoral candidate of London who has suggested implementing blockchain technology to upgrade the city’s’ ledger for land, as well as for its finances and budget. (Similar experiments are going on in Honduras and the Isle of Man.) “Because these records are kept permanently, there is a strong possibility (without the blockchain) for them to be altered or faulted.”

“The Internet is driving a shift towards networks and platform-based social and economic models. Assets can be shared, creating not just new efficiencies but also whole new business models and opportunities for social self-organization. The blockchain, an emerging technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities,” concluded the report.

Photo World Economic Forum

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October 9, 2015 -
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