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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 WeUseCoins.com.

Bitcoin Latest News

Major Magazine Publisher to Accept Bitcoin Payments

Posted on 18 December 2014 | 12:43 pm

Microsoft accepts Bitcoin

Posted on 11 December 2014 | 5:06 am

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 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

Mt.Gox Statement

Posted on 3 March 2014 | 3:44 am

Bitcoin Price Weekly Analysis – Primed For Lift-Off - newsBTC


newsBTC

Bitcoin Price Weekly Analysis – Primed For Lift-Off
newsBTC
Bitcoin price traded higher, and the idea of buying dips in the last technical analysis worked perfectly. However, the price remains below the 100-day simple moving average on the daily chart (data feed from HitBTC). There is a bullish trend line ...

and more »

Posted on 13 February 2016 | 11:00 pm

21 Inc offers free resource to help optimize bitcoin fees - Brave New Coin


Brave New Coin

21 Inc offers free resource to help optimize bitcoin fees
Brave New Coin
Attaching a bitcoin transaction fee can be a tricky business. Depending on the wallet or service you are using, it can be hard to know the exactly how much to pay for a quick confirmation. Paying too much can be a waste, while too little can delay a ...

Posted on 13 February 2016 | 6:47 pm

Bitcoin Roundtable Announcement Thwarts Bitcoin Classic Launch - Bitcoin Magazine


Bitcoin Magazine

Bitcoin Roundtable Announcement Thwarts Bitcoin Classic Launch
Bitcoin Magazine
Bitcoin Classic, the Bitcoin implementation set to double Bitcoin's 1 megabyte block size limit by a hard fork, suffered a significant setback shortly after its official release this week. A group of prominent exchanges, mining pools and other industry ...
Is The Looming Bitcoin 'Hard Fork' Illegal?Forbes
Bitcoin Revolution Gets on Its Way But Many People Reject the New VersionSoftpedia News
A Bitcoin Hard Fork Can Get Developers In Legal TroubleThe Merkle (blog)
CryptoCoinsNews
all 6 news articles »

Posted on 13 February 2016 | 6:20 pm

Why Bitcoin Governance is a Competition (And That's a Good Thing) - CoinDesk


CoinDesk

Why Bitcoin Governance is a Competition (And That's a Good Thing)
CoinDesk
A former counsel to committees in both the US House and the US Senate, he served as Global Policy Counsel for the Bitcoin Foundation in 2014. In this article, Harper discusses the challenges of applying traditional open-source development practices to ...
How Decentralized Applications Could Bring the Blockchain to New IndustriesBitcoin Magazine

all 2 news articles »

Posted on 13 February 2016 | 8:55 am

Bitcoin Price Hits Resistance - CryptoCoinsNews


CryptoCoinsNews

Bitcoin Price Hits Resistance
CryptoCoinsNews
Bitcoin price breached the 4-hour 200MA in most exchange charts today as buyers eagerly piled into advance. At the time of writing, the market has become quiet, and if a larger decline will grip the market, then the time is now. This analysis is ...

Posted on 13 February 2016 | 8:09 am

Approximate Hardware Design and Bigger Bitcoin Mining Profits - CryptoCoinsNews


CryptoCoinsNews

Approximate Hardware Design and Bigger Bitcoin Mining Profits
CryptoCoinsNews
Research led by Dr. Rakesh Kumar at the University of Illinois at Urbana-Champaign addresses how approximate hardware might be used to reduce the difficulty and improve results of bitcoin mining. CCN spoke to Dr. Kumar to learn more about this ...

Posted on 13 February 2016 | 3:09 am

US Deputy CTO Weighs In On Bitcoin And Policy - Forbes


Forbes

US Deputy CTO Weighs In On Bitcoin And Policy
Forbes
A person touches the screen of a bitcoin ATM of Bitchain Spanish company in a shopping center in Barcelona on July 10, 2015. Bitchain Spanish company sent today to Athens a bitcoins ATM that will allow Greek citizens who use this digital currency to ...

Posted on 12 February 2016 | 12:57 pm

European Union Leaders Seek Greater Oversight of Bitcoin Activity

A group of European heads of state are pushing for greater oversight of digital currency activity in the European Union.

Posted on 13 February 2016 | 8:00 am

SEC Seeks $10 Million Default Judgment Against GAW Miners

The Securities and Exchange Commission is seeking more than $10 million from the cryptocurrency mining firms GAW Miners and ZenMiner.

Posted on 12 February 2016 | 2:31 pm

Ripple Settles $1 Million Lawsuit With Former Executive and Founder

A months-long legal dispute involving distributed ledger tech startup Ripple and its co-founder Jed McCaleb has come to an end.

Posted on 12 February 2016 | 12:00 pm

Nasdaq to Launch Blockchain Voting Trial for Estonian Stock Market

Stock market giant Nasdaq has announced it is developing a shareholder voting system based on blockchain tech.

Posted on 12 February 2016 | 11:15 am

UN Paper: Pushing Bitcoin for Third World Issues is 'Techno Colonialism'

A new UN working paper providing an overview of bitcoin has criticised the attitudes of some in the bitcoin community towards the developing world.

Posted on 12 February 2016 | 9:48 am

ASX Details Blockchain Strategy in Financial Update

The Australian Securities Exchange has revealed its spending as it prepares to build blockchain solutions to improve the Australian equities market.

Posted on 12 February 2016 | 7:35 am

Russian Central Bank Official Predicts Blockchain Future

The deputy chair of Russia’s central bank has reportedly told banking representatives that they should prepare for the spread of blockchain tech.

Posted on 11 February 2016 | 3:10 pm

Stock Market Giant Deutsche Börse Working on Blockchain Prototypes

German stock market operator Deutsche Börse discusses its blockchain strategy and interest in industry startups.

Posted on 11 February 2016 | 2:29 pm

Industry Businesses Pledge to Avoid Bitcoin Network Split

A group of bitcoin miners, exchanges and service providers have issued a letter stating that they would not back hard forks of the network.

Posted on 11 February 2016 | 1:17 pm

Why Bitcoin’s Scaling Debate is An Opportunity Not a Flaw

Writer Nozomi Hayase looks at how bitcoin's scalability debate should be seen as just another phase in the growth of the digital currency.

Posted on 11 February 2016 | 10:00 am

PayPal Blocks Bitcoin Parody of Super Bowl Commercial

A parody of a PayPal Super Bowl commercial that was posted on YouTube has been blocked by the Internet payments company.

Posted on 11 February 2016 | 8:18 am

IBM Director Declares 'We’re All in on Blockchain'

IBM blockchain director John Wolpert appeared at a conference in San Francisco today where he gave a keynote speech.

Posted on 10 February 2016 | 1:15 pm

Princeton University Releases First Draft of Bitcoin Textbook

The first complete draft of an upcoming Princeton University textbook on bitcoin has been made freely available for download.

Posted on 10 February 2016 | 12:04 pm

Online Retailer Overstock Spent $8 Million on Blockchain Projects in 2015

Online retailer Overstock.com has announced that it spent $8m last year on its blockchain-backed securities trading initiative.

Posted on 10 February 2016 | 11:02 am

Have We Reached Peak Blockchain Hype?

A number of sceptical voices are calling out the blockchain space and the media for over-hyping the potential of distributed ledgers. Are they right?

Posted on 10 February 2016 | 10:26 am

21 Inc Launches Bitcoin Transaction Fee Prediction App

21 Inc has launched a free web app that can help bitcoin users determine what level of fee will ensure a transaction is confirmed.

Posted on 10 February 2016 | 7:36 am

How Decentralized Applications Could Bring the Blockchain to New Industries

This is a guest post by Michael Gord and the opinions represented are those of the author.

From socializing to hailing a cab to finding our way around, there’s an app to help. Now, there is a new and improved model that is revolutionizing the way we build scalable applications called a DApp, or decentralized application.

David Johnston, CEO of the DApp Fund, predicts in his white paper that “decentralized applications will someday surpass the world’s largest software corporations in utility, user-base, and network valuation due to their superior incentivization structure, flexibility, transparency, resiliency and distributed nature.”

What Is a DApp?

A DApp has four characteristics. It must be open source, with all changes made by a majority consensus of the user base. Data must be stored on a public blockchain to avoid a central point of failure. There must be a cryptographic token, referred to as an App Coin, to access the application, and these tokens must be issued according to a standard cryptographic algorithm acting as a proof of the value to nodes that contribute to the application.

Bitcoin is an example of a DApp, as it is an open-source token and uses the blockchain, a peer-to-peer and public distributed ledger, to form a trustless system. In fact, Bitcoin is the most popular DApp, as it simplifies many aspects of the traditional financial system, such as transferring money across the world.

Another application of a DApp is something built as a protocol that uses another blockchain and its own token to function. An example is the Omni Protocol, which “is a protocol built as a layer over Bitcoin that allows you to generate, send, trade, redeem, pay dividends to and make bets with tokens representing any kind of asset,” said Patrick Dugan, who’s a board member of the project, in an interview with Bitcoin.com.

Alternatively, a DApp can be built as an extension to the program. For example the SAFE Network, a peer-to-peer storage network, uses the Omni Protocol to issue “safecoins,” which operate the network. With the SAFE Network, decentralized applications are ensured complete data security, and there are projects such as SAFEpress, similar to WordPress, for the SAFE Network, to help people develop on the Network.

Imagine a DApp becoming the computer operating system (OSX or Windows), the programs used on the system (Photoshop, Dropbox), or specialized software that uses the programs, such as a blog that integrates Dropbox. Bitcoin is only the tip of the iceberg of what is possible with this new type of application.

Can App Coins Have Value?

David Johnston and team define App Coins in another white paper as “tokens that are native to Decentralized applications that have a digital token associated with their use or monetization.”

Tokens can also be developed to behave in a way that Bitcoin cannot, at least for the time being. A Javascript-based programming library called Solidity and another Python-based library called Serpent allow decentralized applications to be built on Ethereum.

In addition, networks can choose to operate exclusively with their network’s coin, such as the safecoin that powers the SAFE Network. Doing anything on the SAFE Network requires safecoins, and developing on the SAFE Network provides additional value to developers.

“I want to host my apps on SAFE and not have to worry about servers,” said Francis Brunelle to Bitcoin Magazine. Brunelle is an app developer and enthusiastic community member who predicts that “safecoins will be valuable because it will be the only way to buy storage space on the SAFE Network.”

A strong user base on an application can be reinforced through a successful integration of App Coins. An application that rewards contributing developers and lead users with tokens that have a monetary value has an intrinsic advantage over one that does not. Furthermore, a large user base that uses an App Coin presents a barrier to exiting to a competing service with a less popular coin.

Finally, App Coins provide monetary choice as an alternative to both fiat currency and to Bitcoin. People have different opinions on monetary policies, especially with the rise of digital currencies. App Coins can adopt any number of monetary viewpoints and allow everyone a vote to their preferred economic policy.

The Consumer Future

DApps will likely soon become “consumer apps,” as there are already many in development. The Safe Network decentralizes Internet services and guarantees privacy to all Internet users. Ethereum provides a decentralized application layer and programming language for DApps to be developed.

Factom is a scalable data layer that simplifies big data management record-keeping. Augur is a decentralized prediction market that allows people to forecast events and be rewarded.

As Johnston says in Johnston’s Law: “Everything that can be decentralized, will be decentralized.”

The post How Decentralized Applications Could Bring the Blockchain to New Industries appeared first on Bitcoin Magazine.

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BitPay's Stephen Pair: Community Needs to Become Proficient at Managing Bitcoin Forks

As opposing sides in Bitcoin's long-lasting scaling dispute seem to be inching closer, one of the remaining sources of contention is not whether, but how to achieve a small block size bump.

TheBitcoin Core development team wants to increase the maximum block capacity through a Segregated Witness soft fork, which has since been embraced by a large part of Bitcoin’s development community and a significant segment of the Bitcoin industry.

Others, like CEO of major payment processor BitPay Stephen Pair, believe the perceived benefits of soft forks over hard forks are being overstated.

Speaking to Bitcoin Magazine, Pair explained:

“I think soft forks aren't the panacea that many people perceive them to be. It's true that not all nodes on the network need to upgrade at the same time with a soft fork. But once the majority of hashing power has adopted new consensus rules, anyone running a full node should probably want to upgrade to validate the new transaction semantics. And this is especially true when you consider that SPV-nodes make the assumption that peers are performing full validation to keep miners in check.”

A centerpiece of Bitcoin Core’s scalability “road map,” Segregated Witness is set to increase the effective block size to some 1.6 megabytes to 2 megabytes by moving signature data into a new data structure. Pair is skeptical, however, that Segregated Witness should be considered a short-term scaling solution.

“Segregated Witness would completely change the structure of a Bitcoin transaction, and shouldn't be rushed,” Pair said. “It needs a lot of time to be tested and widely supported. I'm not certain how contorted the implementation has to be to deploy it as a soft fork, but this is code we'll have to live with for a long time. The more complex the Bitcoin validation code becomes, the more vulnerable it will be to various types of attack. A cleaner implementation done as a hard fork might be preferable.”

On Hard Forks

Pair himself initially signed an industry letter in support of BIP 101, the proposal by former Bitcoin Core lead developer Gavin Andresen intended to increase the block size limit to 8 megabytes, then doubling every other year for the next 20 years. He later said he preferred Blockstream president Adam Back's “BIP 248,” an informal proposal to raise the limit to 8 megabytes over four years. And more recently, Pair pitched his own solution: a dynamic block size cap to automatically re-adjust based on recent transaction volume. Additionally, the BitPay CEO is willing to accept a one-time block size increase, such as a hard fork block size limit increase as proposed by Bitcoin Classic.

Pair did add, however, that a hard fork shouldn't be thought of too lightly:

“The big risk of a hard fork is that non-upgraded nodes would go off on a defunct fork and they would be vulnerable to double-spend attacks. With a hard fork, you need to make sure people have plenty of time to upgrade. There is a need to come up with good engineering solutions to managing either type of fork; Version Bits as described in BIP-9 is a good start.”

On Firm Forks

An alternative proposal to increase the block size limit is sometimes referred to as a “firm fork” or a “soft hardfork.” This could allow a majority of miners to change any consensus rules, including those that would typically require a hard fork. But as opposed to both hard forks and soft forks, it would render non-upgraded nodes completely unable to detect any new transactions.

“While the additional complexity of implementing it may not be worth the effort, you could perform a hard fork where miners effectively DOS old nodes by merge mining empty blocks under the old consensus rules,” Pair explained. “I think that would make hard forks a lot safer. People will still have to upgrade, but for those that neglect to upgrade, it will be immediately apparent as it will seem that no transactions are being included in their chain.”

This proposal has itself sparked some controversy, to the point where some dubbed it an “evil soft fork.” Since users would no longer be able to opt-out of a change, they'd have to follow the rules as decided on by miners – or create a new chain.

Pair is not too worried about these consequences, however:

“A user would either want to follow the longest chain, or explicitly go off on a weaker fork. Either way, he would need to upgrade. A firm fork would ensure that the old chain is no longer functional. But whether it's hard forks or soft forks or firm forks... the important thing is that we, as a community, need to become proficient at managing changes of consensus rules.”

The post BitPay's Stephen Pair: Community Needs to Become Proficient at Managing Bitcoin Forks appeared first on Bitcoin Magazine.

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Hyperledger Project Looks at Options to Build Blockchain Technology with IBM, DTCC, SWIFT, and Others

Earlier this week Bitcoin Magazine reported that the Linux Foundation announced technical updates to the new Hyperledger Project, a formal open governance structure, as well as new members from across the industry.

The Hyperledger Project wants to develop a new open source blockchain separated from the Bitcoin blockchain. Digital Asset Holdings, the fintech startup headed by the financial superstar Blythe Masters, contributed its Hyperledger mark, which it had acquired in June with the purchase of San Francisco-based digital fintech company Hyperledger.

The Hyperledger team, now part of Digital Asset Holdings, developed distributed ledger technology for private blockchains, without a built-in digital currency, to allow financial operators to clear and settle transactions in real time, using a proven consensus algorithm capable of thousands of transactions per second.

The placeholder domain hyperledger.com now redirects to the official Hyperledger website hyperledger.org.

The updated list of Hyperledger founding members consists of 28 top companies in the technology and financial services space. It appears that the Linux Foundation’s Hyperledger Project is moving very fast and is on its way to becoming a leading force in the blockchain technology development space.

Founded in 2000, the Linux Foundation wants to be the organization of choice for the world's top developers and companies to build ecosystems that accelerate open technology development and commercial adoption.

The technology of the original Hyperledger team is independent of Bitcoin, and many companies in the new Hyperledger Project support radical alternatives to Bitcoin. For example, Accenture and Digital Asset Holdings CEO Masters, among others, expressed support for private, “permissioned” non-Bitcoin blockchains.

“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,” said two Accenture executives in July.

In other words, Bitcoin should disappear and be replaced by a closed blockchain. So is Hyperledger a first step in that direction?

Bitcoin Magazine reached out to the Linux Foundation for clarifications and further explanations.

"The Linux Foundation believes a shared infrastructure that is open to critical inspection and collaboration will be pivotal in driving global adoption of blockchain for distributed ledgers," Linux Foundation executive director Jim Zemlin told Bitcoin Magazine. "I’m extremely bullish about how the developers involved in Hyperledger Project are openly looking at various architectures, concepts and technologies, aiming to integrate code from a variety of sources to build a neutral technology that can work for all."

Zemlin also answered some specific burning questions about the nature, plans and policies of the Hyperledger Project.

Bitcoin Magazine: Does the Hyperledger Project support a specific (existing or planned) digital currency for payments and financial applications?

Zemlin: No, the scope of the Hyperledger Project is limited to the development of the underlying blockchain fabric that can support a broad range of use cases. Applications and domain-specific frameworks are outside the scope of the project, but will obviously be encouraged to leverage the project's deliverables.

Bitcoin Magazine:Is the Hyperledger Project a replacement for Bitcoin and/or other existing cryptocurrencies?

Zemlin:This project’s mission will be to build and advance a general purpose blockchain framework that can be used across industry sectors, from financial services to retail to manufacturing and more. There is ample room in the market for cryptocurrencies and even multiple implementations of the blockchain, but everyone stands to lose if these don’t interoperate and work together. The hope would be that the fabric produced by the Hyperledger Project can satisfy a broad set of use case ranging from cryptocurrencies, supply-chain visibility, asset transfer, IoT, business contracts and so much more. We'll see thousands of applications and many uses cases, but open source and industry-wide collaboration are essential to realizing the full potential of distributed ledger technology.

Bitcoin Magazine:Do you plan to implement full programmability with a Turing-Complete scripting language to support transactions and smart contracts of arbitrary complexity?

Zemlin: One of the proposals on the table in the technical community supports execution of code written in any language. However, the community has not yet reached consensus on this point.

Bitcoin Magazine: What's your position on the privacy issue?

Zemlin: It is important to realize that the Hyperledger Project is hosted by the Linux Foundation, but the community that has gathered to support and lend their resource and expertise to develop this key technology is just now coalescing and does not yet have a singular point of view.

The Hyperledger Project continues to unfold. Bitcoin Magazine will follow further developments.

The post Hyperledger Project Looks at Options to Build Blockchain Technology with IBM, DTCC, SWIFT, and Others appeared first on Bitcoin Magazine.

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Blockchain Startups Take Aim at Counterfeiting of Luxury Products

This post is by Krystle Vermes​.

The cryptocurrency industry has delivered new technology to the world of luxury commerce, and it’s helping weed out the fakes.

It may seem like a frivolous concern, but counterfeit goods are big business. Stopping them is a significant business cost for manufacturers of the real thing. And for consumers who pride themselves on owning luxury goods, getting the real thing is essential to a way of life.

That's where Bitcoin comes in.

“By linking digital certificates to purchased goods, we are able to provide a much higher degree of confidence to buyers, especially when purchasing from online or second-hand retailers,” says Guy Halford-Thompson, founder of Blockchain Tech Ltd.

The company uses blockchain technology to create a secure registry, tracking who owns designer products. In turn, the database has everything a consumer needs to determine whether the product in hand is actually what it’s supposed to be.

With blockchain technology, individuals can track the entire journey of the item from assembly to vendor.

“While some consumers may be looking to purchase more affordable 'look-alikes,’ the concern comes from consumers who are looking to purchase genuine items, but because of the advances in manufacturing processes, it can be very difficult to distinguish between real and look-alike,” Halford-Thompson continued. “This is not a large concern when purchasing from known high-street stores, but it becomes a huge issue when consumers are looking to purchase new or second-hand items off online marketplaces.”

Although obtaining luxury goods is seemingly easier than ever before thanks to the Internet, not every seller is playing by the rules. Halford-Thompson says that watches, handbags and sunglasses are the most counterfeited items he’s seen on the market. However, he has confidence in blockchain and “smart tagging.”

“Smart tagging will provide consumers with a better brand experience, and a higher degree of confidence in the items they are buying,” Halford-Thompson adds.

And he isn’t the only one who feels this way.

“In five years, encrypted chips will be in all of your luxury consumer goods,” says Ryan Orr, CEO of Chronicled. “It’s not ‘if,’ but ‘when.’”

Similar to Blockchain Tech Ltd., Chronicled is a company that uses smart tags to track authentic sneakers that hit the market. With the Chronicled mobile app, shoe shoppers can scan the smart tag of the product and get all of the information about its authenticity in a matter of seconds.

As of right now, Orr claims that Air Jordan 11s and Yeezys are the most commonly counterfeited shoes. He adds, however, that his company is raising the stakes for counterfeiters by providing even more security to consumers.

“By combining blockchain technology and smart tags, undetectable forgery becomes impossible, and wearing fakes becomes socially risky,” Orr said.

But is doing the “uncool” thing by counterfeiting goods going to be enough to persuade people to stop? In the end, the answer may be “yes” for a majority of consumers.

“Trusted sneaker sellers earn at least a 20 percent premium, and it’s not just the ‘buy’ side of the transaction that affects consumers,” Orr points out. “Most of us don’t even consider trying to sell our authentic used luxury goods on the Internet because we know we won’t get fair value.”

However, there’s no doubt that counterfeiters are getting better.

“Wait until they start 3-D printing,” Orr warns.

Counterfeiters might always have a new trick, but blockchain technology will now be chasing the bad guys. Maybe, in the foreseeable future, it can even get ahead of them.

The post Blockchain Startups Take Aim at Counterfeiting of Luxury Products appeared first on Bitcoin Magazine.

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Linux Foundation's Hyperledger Blockchain Project Announces New Members and Governance Structure

In December Bitcoin Magazine reported that a group of top tech and finance companies are joining forces with the Linux Foundation to develop a new open source blockchain separated from the Bitcoin blockchain. Digital Asset Holdings, the fintech startup headed by the financial superstar Blythe Masters, contributed its Hyperledger mark.

Last week, IBM started to reveal some details of its blockchain projects and strategy. John Wolpert, IBM’s blockchain offering director, said that Hyperledger code will become an open source industry standard, and developers will be able to build applications on top of Hyperledger. At the forthcoming Block Chain Conference on February 10 in San Francisco, Wolpert will give a keynote presentation titled “How to Make Block Chain Real for Business.” The address will focus on IBM’s point of view in this space and its contribution to the open source community led by the Linux Foundation.

Things are moving fast in the Hyperledger space. The Linux Foundation is announcing new members from across the industry, technical updates to the new Hyperledger Project and a formal open governance structure. “Think of it as an operating system for interactions,” says the new Hyperledger Project website. “It has the potential to vastly reduce the cost and complexity of getting things done.

“The Hyperledger Project has ramped up incredibly fast, a testament to how much pent-up interest, potential and enterprise demand there is for a cross-industry open standard for distributed ledgers,” said Jim Zemlin, executive director at The Linux Foundation. “Working on its own, even the largest global corporation could not match the speed at which our new members are moving blockchain technology forward. Such a broad effort and investment is sure to have a great impact on our personal and professional lives.”

A board of directors will guide business/marketing decisions and ensure alignment between the technical communities and members of the Hyperledger Project. Technical contributions to the project are welcome at any time, from anyone, and will be reviewed by the newly formed Technical Steering Committee (TSC), which is composed of industry-leading technical experts. Nominations are currently open for TSC members.

The announcement notes that the Hyperledger Project is a collaborative effort to focus on an open platform that will satisfy a variety of use cases across multiple industries to streamline business processes. Peer-to-peer in nature, distributed ledger technology is shared, transparent and decentralized, making it ideal for application in finance and countless other areas such as manufacturing, banking, insurance and the Internet of Things (IoT). “By creating a cross-industry open standard for distributed ledgers, virtually any digital exchange with value, such as real estate contracts, energy trades or marriage licenses, can securely and cost-effectively be tracked and traded,” says the Linux Foundation.

The Hyperledger Project has received proposed contributions from several companies, including Blockstream, Digital Asset, IBM and Ripple. Other community members are contemplating contributions of their own.

“The formation of Hyperledger marks a milestone in the advancement of distributed ledger technology,” said Digital Asset CEO Blythe Masters. “Digital Asset believes that it is vital for shared infrastructure to be open to critical inspection and collaboration, and this initiative will be pivotal in driving the global adoption of solutions to real-world problems.”

The updated list of Hyperledger founding members consists of 28 top companies in the technology and financial services space: ABN AMRO, Accenture, ANZ Bank, Blockchain, Calastone, Cisco, CLS, CME Group, ConsenSys, Credits, The Depository Trust & Clearing Corporation (DTCC), Deutsche Börse Group, Digital Asset Holdings, Fujitsu Limited, Guardtime, Hitachi, IBM, Intel, J.P. Morgan, NEC, NTT DATA, R3, Red Hat, State Street, SWIFT, Symbiont, VMware and Wells Fargo.

“The development of blockchain technology has the potential to redefine the operations and economics of the financial services industry,” said Richard Lumb, chief executive of Accenture’s Financial Services. “It emerges at an important time, as the industry strives to be leaner, more efficient and more digital. Open source development will accelerate the innovation and help drive the scalability of this technology, and we are proud to support the Hyperledger Project.”

Other statements by Hyperledger founding members focus on the non-banking applications of blockchain technology.

“We at Fujitsu are confident that blockchain technology will accelerate disruptive change, not only in the financial industry, but also in many other industries where it will be put to active use,” said Fujitsu Senior Vice President Takahito Tokita.

“We believe blockchain will quickly mature and spread to more industries,” said Masayoshi Ogawa, President of Hitach’s Financial Information Systems Division.

Other statements are available in the Linux Foundation press release. It appears that the Linux Foundation’s Hyperledger Project is moving very fast and is on its way to become a leading force in the blockchain technology development space.

Founded in 2000, the Linux Foundation wants to be the organization of choice for the world's top developers and companies to build ecosystems that accelerate open technology development and commercial adoption.

Photo Drupal Association / Flickr(CC)

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The Rise of User-Monetized Actions: Bitcoin's Killer Application

This article is an op-ed by Andrew DeSantis and the views expressed are those of the author.

On January 9th, 2007 the world as we know it was forever changed. Apple Computer CEO Steve Jobs took the stage at the Moscone Center in San Francisco and introduced the world to the iPhone.

Nine years later, many have trouble remembering what life was like before the rise of mobile. The average smartphone today is more than one million times smaller, one million times more affordable and one thousand times more powerful than a $60 million supercomputer was 40 years ago. As a result of successive radical innovation, we have truly changed the world, but more important, the world has forever changed us.

In 1998, when asked what keeps him up at night, Bill Gates had a surprising answer. As the CEO of Microsoft, one might have expected him to say Apple, Oracle or even Netscape. Instead he stated: “I worry about someone in a garage inventing something that I haven’t thought of.” Unbeknownst to Gates, at that very moment Larry Page and Sergey Brin were hard at work in a garage in Menlo Park. The fruit of their labor would go on to become Google.

Gates, like many of us, has accepted that change, particularly technological change, is one of the few constants in life and even the smartest among us can be caught by surprise.

Bitcoin Is Born

On January 3rd, 2009, less than two years after Jobs unveiled the iPhone, Satoshi Nakamoto sent an email to the renowned “Cryptography Mailing List” titled “Bitcoin v0.1 released.” The email contained a SourceForge link to the first Bitcoin reference client and the following statement:

“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double spending. It’s completely decentralized with no server of central authority.”

Nakamoto then went on to give a brief summary of Bitcoin’s implementation and explicitly add a disclaimer stating that the included software was still alpha and experimental.

When Jobs introduced the iPhone he had the attention of the entire tech world. Everyone knew the device would be a game changer, but no one could have predicted that five years later the iPhone would catalyze the creation of a ride-hailing application called Uber. Today Uber has an estimated worth of $62.5 billion, higher than that of car makers GM, Ford and Honda, and could very well go on to become the world’s first trillion-dollar company.

Nakamoto’s announcement on the other hand went relatively unnoticed by the public, but a handful of dreamers immediately realized the ramifications of Satoshi’s vision. The first to respond to Nakamoto’s email was cypherpunk legend Hal Finney. Three days later on January 12, Nakamoto executed the first Bitcoin transaction, in block 170, sending 10 bitcoins to Finney.

In May of 2010, roughly a year and a half after Bitcoin’s genesis block was mined by Nakamoto, two members of the BitcoinTalk community forum executed the first real-world purchase. 10,000 BTC for a $25 pizza. Five and a half years have since passed and with a near six-billion dollar market capitalization, it is safe to say that Bitcoin come a long way. But there is still a ways to go.

Bitcoin Grows Up

Since 2013 the Bitcoin industry has to a degree operated in stealth mode. Companies like 21 Inc, BitGo and Blockstream have been hard at work in collaboration with the Bitcoin Core developers to ready Bitcoin for the next and brightest stage of its life thus far. In the words of software legend Joel Spolsky, “Good software takes 10 years. Get used to it.”

21 Inc’s CEO, Dr. Balaji S. Srinivasan, stated the following in a lecture at Stanford Universityprior to founding 21:

“A good founder is capable of anticipating which turns lead to treasure and which lead to certain death. A bad founder is just running to the entrance of (say) the ‘movies/music/filesharing/P2P’ maze or the ‘photo sharing’ maze without any sense for the history of the industry, the players in the maze, the casualties of the past, and the technologies that are likely to move walls and change assumptions.”

So what about Bitcoin is likely to “move walls” and “change assumptions?” While user-monetizable data is of significant importance to Bitcoin’s future, the concept of “user-monetizable actions” is of far greater importance.

The DARPA Network Challenge

At 10 a.m. EST on December 5th, 2009 (this date was picked to commemorate the 40th anniversary of the Internet) the Defense Advanced Research Projects Agency (DARPA), known for creating the ARPANET, a precursor to the Internet and contributing to the onion protocol used by the Tor network, launched 10 red balloons in undisclosed locations across the continental United States. A month earlier DARPA proposed an open challenge to teams across the nation. The first team to locate all 10 balloons and report their findings to DARPA would receive a $40,000 reward. What happened next exceeded the researchers’ wildest expectations.

Less than nine hours after DARPA launched the balloons a team from MIT won the competition. How did they do it? By embracing the concept of user-monetizable actions.

In 2005, Jon Kleinberg, of the Department of Computer Science at Cornell University, and Prabhakar Raghaven of Yahoo! Research published a paper titled “Query Incentive Networks.” In it they state:

“The concurrent growth of online communities exhibiting large-scale social structure, and of large decentralized peer-to-peer file-sharing systems, has stimulated new interest in understanding networks of interacting agents as economic systems. Here we formulate a model for query incentive networks, motivated by such systems: users seeking information or services can pose queries, together with incentives for answering them, that are propagated along paths in a network. This type of information-seeking process can be formulated as a game among the nodes in the network, and this game has a natural Nash equilibrium. In such systems, it is a fundamental question to understand how much incentive is needed in order for a node to achieve a reasonable probability of obtaining an answer to a query from the network.”

Building off the ideas presented in Kleinburg and Raghavan’s research, the team from MIT came up with the following strategy:

“We’re giving $2000 per balloon to the first person to send us the correct coordinates, but that’s not all – we’re also giving $1000 to the person who invited them. Then we’re giving $500 to whoever invited the inviter, and $250 to whoever invited them, and so on.

It might play out like this. Alice joins the team, and we give her an invite link like http://balloon.media.mit.edu/alice. Alice then e-mails her link to Bob, who uses it to join the team as well. We make a http://balloon.media.mit.edu/bob link for Bob, who posts it to Facebook. His friend Carol sees it, signs up, then twitters about http://balloon.media.mit.edu/carol. Dave uses Carol’s link to join … then spots one of the DARPA balloons! Dave is the first person to report the balloon’s location to us, and the MIT Red Balloon Challenge Team is the first to find all 10. Once that happens, we send Dave $2000 for finding the balloon. Carol gets $1000 for inviting Dave, Bob gets $500 for inviting Carol, and Alice gets $250 for inviting Bob. The remaining $250 is donated to charity.”

In essence the MIT team designed a recursive algorithm executed by willing participants by redistributing the prize money to the participants in such a way that a power incentive structure came to life.

While the MIT team’s accomplishment is significant, particularly from the perspective of academia, it wasn’t the only major insight derived from the DARPA Network Challenge. Hacker George Hotz, known as geohot, in 2007 was the first person to carrier-unlock an iPhone. Hotz later went on to jailbreak Sony’s PlayStation 3. Hotz recently made headlines when he and a writer from Bloomberg Businessweek took a drive around the San Francisco Bay area in a self-driving car he built alone in just a month. An hour prior to the start of the DARPA Network Challenge, Hotz tweeted to his then roughly 50,000 followers asking for their assistance in locating the balloons. Through his network Hotz located four ballons; he was then able to trade information with other teams ultimately bringing his balloon count to eight.

The approach taken by the MIT team displays the raw power that a properly designed algorithm can have outside as well as inside the confines of Silicon. Hotz’s approach, on the other hand, allows us to contrast the academic perspective with that of a single hacker wielding influence over a network of individuals.

If one combines the two approaches, by using Bitcoin to send microtransactions to their own network of followers, what you end up with is a variant of Kleinberg and Raghavan’s Query Incentive Network model that allows one to execute MapReduce-like operations over a large network of willing participants.

The Power of End-User Monetization

We can change our perspective, yet again, and view things through the eyes of an end user performing tasks on behalf of another individual. While this sounds like a new concept it really isn’t. Celebrities have monetized their actions on Twitter and Facebook for years. The musician Jared Leto and socialite Kim Kardashian have reportedly received payments as high as $13,000 per tweet for promoting products that fall in line with their personal brand.

Until now, it hasn’t financially made sense for a user with a few thousand followers to receive payments for endorsements. Additionally, most celebrities tend to rely on agents who cut deals with sponsors on their behalf. Even if the average user put in the effort to build a network of sponsors, it is highly unlikely that a sponsor would want to deal with a user whose follower count is below 100,000. As with most scenarios that rely on the ability to perform microtransactions, the pre-Bitcoin banking system isn’t designed to handle small, fast, international transactions.

Earlier this week Srinivasan presented his thoughts on the future of user-monetizable actions. After presenting scenarios such as the Twitter covered above and derivatives such as a Bitcoin-based, decentralized version of Fiverr, he left two questions to ponder:

  • What would life be like if even while you were asleep an autonomous agent handled requests that earned Bitcoin on your behalf?

  • What would you do with your own personal army of willing, waiting, able and ready individuals?

Final Thoughts

The Bitcoin Engineering class at Stanford University has gone tremendously well. Likely because a majority of the students enrolled in the course have little to no previous knowledge about Bitcoin, they will be able to leverage the abstractions provided by the 21 Bitcoin Computer’s two1 Python3 library and quickly rhapsodize applications into existence without the burden of knowledge (fatigue) many of us have accumulated over the years.

A computer science student named Axel Ericsson hacked together his own tunneling protocol allowing him to securely communicate with his 21 Bitcoin Computer from a web browser. While a future release of the two1 library will likely support browser-to-machine BitTransfers triggered by 402 requests, today the 21 Bitcoin Computer is being used for machine-to-machine transactions. Most likely, Axel executed one of the world’s first 402 request transactions initiated from a web browser in exchange for user-monetizable data.

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World's First Bitcoin Mining IPO Misses Target by AUD $14 Million

This post is by Benjamin Roussey

The first fundraising in the world for an initial public offering of a Bitcoin mining company has raised 5.9 million Australian dollars, (USD $4.2 million) – falling short of its target of AUD $20 million.

Based in Melbourne, the Bitcoin Group announced last week that it had raised AUD $5,927,168.40 in a bookbuild of its Australian Stock Exchange (ASX) listing. The company also announced that it was still progressing though the listing process with ASX.

Even though the amount raised was less than a third of the amount it tried for, CEO of Bitcoin Group Sam Lee called it a “solid result.”

During an interview on CNBC on Tuesday, Lee said the amount raised is sufficient for the company to execute its current strategy of acquiring new mining equipment to expand its footprint.

Although it was scheduled to take place on Tuesday, Bitcoin Group has not yet announced its quote on the ASX. It is expected that the company will trade under the ticker BCG.

The price of shares was at AUD $0.20, with AUD $2,000 as the minimum subscription. There is no maximum subscription. According to the Australian Taxation Office, Bitcoin is an asset for capital gains tax purposes.

This is the first time a publicly listed entity has been led by the Bitcoin Group Management since its incorporation in September 2014. Lee, the CEO, has a background in financial services and digital media.

On CNBC, Nicolas Debock, a venture capitalist at Balderton Capital in London, said he would need to think twice before investing in a Bitcoin mining firm, as it has a number of risks. He added that many venture capitalists have invested in Bitcoin in the last three years, but there still has been no money coming out.

Bitcoin Group produces approximately 1.2 percent of the world’s Bitcoin mining output, with six mining sites in Iceland and China. Due to the affordability of electric supply in China, a large percentage of its operations are conducted in China. However, since it is significantly lacking in diversification, the company could be left vulnerable to changes in regulations resulting from the Chinese stance on Bitcoin.

If the company had raised the AUD $20 million it had hoped for, the plan was to use AUD $18 million as an investment in equipment and facilities for Bitcoin mining. The remaining AUD $2 million was to be used for general corporate purposes, including costs for listing.

On CNBC, Debock said that a large number of people still believe in Bitcoin in the long term, whether it is the technology or the asset.

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February 14, 2016 -
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