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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

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-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

Researchers Describe an Easy Way to Crack Bitcoin Brain Wallet Passwords - CryptoCoinsNews


CryptoCoinsNews

Researchers Describe an Easy Way to Crack Bitcoin Brain Wallet Passwords
CryptoCoinsNews
The Bitcoin wallet has been cracked. In a research paper, three researchers have claimed that the Bitcoin brain wallet password can be accessed for less than €49.63 euros or about $55.86 US dollars. Bitcoin first arrived in 2008 on a white paper ...
Decentral Brings Bitcoin to Retail Stores in CanadanewsBTC
Decentral Launches Bitcoin Cards In Canada, Other Digital Currency Cards In The PipelineEconoTimes
Toronto's Decentral Launches Bitcoin Cards NationwideBitcoinist.net
InternetRetailing.net -AllCoinsNews.com (blog) -The Merkle (blog)
all 12 news articles »

Posted on 12 February 2016 | 5:20 am

Bitcoin Price Watch; Keeping Things Simple - newsBTC


newsBTC

Bitcoin Price Watch; Keeping Things Simple
newsBTC
So, with all this said and out of the way, what are the levels we are looking at in today's bitcoin price (European afternoon session) and where will we look to get in and out of the markets according to our breakout strategy today? As ever, take a ...

Posted on 12 February 2016 | 3:54 am

When In Budapest, Take A Taxi, Pay In Bitcoin - CryptoCoinsNews


CryptoCoinsNews

When In Budapest, Take A Taxi, Pay In Bitcoin
CryptoCoinsNews
As the ubiquity of Bitcoin continues to be used in a variety of innovative and interesting ways, often times we forget the convenience the payment system can provide for some of the basics. Well if the thought of a Bitcoin accepting taxi has ever ...
Budapest Taxi Drivers Now Accept Bitcoin Payments Through TheCoinPAYBitcoinist.net
Budapest Taxi Starts Accepting Bitcoin Through CoinPayCoinspeaker

all 3 news articles »

Posted on 12 February 2016 | 3:06 am

Slush Pool Introduces Provably Fair Bitcoin Mining - Bitcoin Magazine


Bitcoin Magazine

Slush Pool Introduces Provably Fair Bitcoin Mining
Bitcoin Magazine
Bitcoin mining today is dominated by mining pools. These mining pools arguably have a strong hold on the Bitcoin network, but also on their own participants. Since mining pools typically operate with little transparency, participants must issue a lot ...

Posted on 11 February 2016 | 12:01 pm

Budapest gets bitcoin taxis - euronews


Budapest gets bitcoin taxis
euronews
Do you need a taxi and don't have cash or a credit card? Well if you're in Hungary's capital Budapest you're in luck if you hold some bitcoin. It is the latest city where you can use the virtual currency to pay your cab driver. Bitcoin is known for ...

and more »

Posted on 11 February 2016 | 10:33 am

Pay for your cosmo with cryptocurrency: Discount drink app Hotspot adds Bitcoin support - GeekWire


GeekWire

Pay for your cosmo with cryptocurrency: Discount drink app Hotspot adds Bitcoin support
GeekWire
bitcoin booth - CES 2015 Bitcoin advocates have long tried to ditch the cryptocurrency's reputation as a means to untraceably pay for illegal mind-altering substances. Paying for legal mind-altering substances may be a good first step. While Microsoft ...

Posted on 11 February 2016 | 10:14 am

PayPal Blocks Bitcoin Parody of Super Bowl Commercial - CoinDesk


CoinDesk

PayPal Blocks Bitcoin Parody of Super Bowl Commercial
CoinDesk
According to the Wall Street Journal, after bitcoin supporters became "riled" at the ad's claim, Shiloh Silverman, owner of video production firm Silver Park Studio, made a new version of the video. His spoof cut in images of people using bitcoin and ...
Video: PayPal Shuts down Bitcoin Parody of Its Super Bowl CommercialCryptoCoinsNews
PayPal scalps a parody of its Super Bowl ad positioning Bitcoin as 'New Money'The Drum

all 5 news articles »

Posted on 11 February 2016 | 8:23 am

The Schism Over Bitcoin Is How Bitcoin Is Supposed to Work - WIRED


WIRED

The Schism Over Bitcoin Is How Bitcoin Is Supposed to Work
WIRED
Last month, Mike Hearn—an ex-Googler and one of the biggest names working on the software underpinning bitcoin—made more than a few headlines when he called the digital currency “a failed experiment.” He not only parted ways with the bitcoin ...
China's Role In Bitcoin: How Cultural Differences Are Affecting The Technology's ProgressForbes
Bitcoin's future threatened by software schismFinancial Times
Industry Businesses Pledge to Avoid Bitcoin Network SplitCoinDesk
CryptoCoinsNews -International Business Times UK -EconoTimes
all 28 news articles »

Posted on 11 February 2016 | 5:11 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

Linux, IBM Share Bold Vision for Hyperledger Project, a Blockchain Fabric for Business

CoinDesk speaks to some of the driving forces behind Hyperledger, an initiative that aims to create an open fabric for blockchain technology.

Posted on 11 February 2016 | 3:38 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

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

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

Compliance Expert Juan Llanos Joins Blockchain Analytics Firm

Financial compliance authority Juan Llanos is joining blockchain analytics firm Coinalytics as the executive vice president of business development.

Posted on 10 February 2016 | 6:59 am

Financial Stability Board Seeks 'Better Understanding' of Blockchain Tech

The Financial Stability Board, a group of central bank governors and financial regulators, has begun working on blockchain technology issues.

Posted on 9 February 2016 | 11:14 am

Linux Foundation-Led Blockchain Project Grows to 30 Members

A distributed ledger effort being led by the Linux Foundation now has 30 members, up from 20 when it was announced in December.

Posted on 9 February 2016 | 10:30 am

US Bankruptcy Court Set to Weigh in on Bitcoin's Currency Status

A California bankruptcy court is set to weigh in on when or if bitcoin should be considered a currency in a dispute over a HashFast payment.

Posted on 9 February 2016 | 9:46 am

Why Microsoft Wants 'Every Blockchain' on its Azure Platform

Microsoft's head of technology strategy opens up about the firm's plans to carve out a market position in the blockchain space.

Posted on 9 February 2016 | 4:17 am

Inside Earthport's Bid to Push Banks Past Blockchain R&D

CoinDesk looks at how Earthport is adding blockchain technology to existing product lines through its Distributed Ledger Payments Hub.

Posted on 8 February 2016 | 11:21 am

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 aSegregatedWitnesssoft 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 processorBitPay 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 initiallysigned an industry letter in support ofBIP 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 latersaid he preferredBlockstream president Adam Back's “BIP 248,” an informal proposal to raise the limit to 8 megabytes over four years. And more recently, Pairpitched 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 inBIP-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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Slush Pool Introduces Provably Fair Bitcoin Mining

Bitcoin mining today is dominated by mining pools. These mining pools arguably have a strong hold on the Bitcoin network, but also on their own participants. Since mining pools typically operate with little transparency, participants must issue a lot of trust in pool operators not to cheat them out of Bitcoin.

Czech Republic-basedSlush Pool – accounting for some4 percent of total hash power on the Bitcoin network – now believes it has solved this problem. Its “provably fair” mining should take away any mistrust – plus introduce some added benefits.

A Quick Recap on Mining

Miners are the entities on the Bitcoin network that confirm transactions and secure the network with hash power by finding Bitcoin blocks. These blocks include several types of data, most importantly transactions, but also the previous block header (linking blocks together), a timestamp and a random number called a “nonce.”

Using a mathematical trick called hashing, miners combine and scramble all of this data into an unpredictable random number called a hash, which is the “block header,” identifying the block. The same data will always result in the exact same block header, but if even a tiny alteration is made to any of the data, it will result into a completely new hash.

If a miner hashes data ten times, odds are that one of these hashes starts with a zero. If a miner does it a hundred times, odds are one of them starts with two zeros. The Bitcoin network requires a valid block header to start with a certain amount of zeros: the difficulty factor.

Miners essentially keep hashing potential blocks until they find a valid block, or one that meets the required difficulty.

A Quick Recap on Pools

Mining pools – the first of which was Slush Pool back in 2010 – divide the work required to find blocks among all participants. A pool operator constructs a block, minus the nonce, and sends this block to all participants, called “hashers.” (“Hashers” are sometimes simply referred to as “miners” – but they don't do everything typical [solo] miners do.)

Hashers take the block as provided by the pool operator, and simply add a nonce to hash the bundle together. If any of the hashers finds a valid block, it sends this block to the pool operator, after which the pool redistributes the block reward among all connected hashers. (A hasher cannot keep the profit of the block for himself, as the coinbase transaction in the block is already attributed to the Bitcoin address controlled by the pool operator.)

The part of the block reward attributed to each hasher is based on his or her share of hash power contributed to the pool. This share, in turn, is calculated using “almost valid” blocks. If Bitcoin's difficulty requires valid blocks to start with 10 zeros, an “almost valid” block might start with nine zeros, or eight, or seven. Since hashers find these “almost valid” blocks more often, pool operators have a good idea of how much hash power each hasher contributes.

(There is always a slight element of variance – luck – involved, as some hashers might randomly find a bit more almost-valid blocks than others. But as more almost-valid blocks are taken into account, this variance increasingly cancels out.)

The Problem: Pool Operator Control

The problem is that no one but the pool operator knows what percentage of hash power each hasher contributes. While hashers provide the pool operator with a certain amount of almost-valid blocks, they have no way of knowing how many “of the blocks all other hashers found. They have to trust the mining pool to tell them what their share is.

Well, almost. Hashers do know how much hash power they contributed to a pool, they can see how many blocks a pool found, and they can estimate how much total hash power is connected to the Bitcoin network based on how often blocks are found. As such, they can also estimate how much their mining pool contributes to the network, and therefore whether the pool is being honest.

But since pools – and smaller pools in particular – find only a certain number of blocks, it can take a long time to gather enough data to reliably draw a conclusion.

This uncertainty can be abused by dishonest pool operators. A pool operator could claim the total hash power is a bit higher than it really is, and that the pool is on an unlucky streak. He could then issue hashers too little share and skim some profit of the top for himself.

Likewise, if an honest pool operator really does have an unlucky streak, hashers might falsely conclude the total hash power of their mining pool is lower than it really is -- and falsely conclude their share is bigger than the pool operator claims it is.

The Solution: Publish the Blocks

The solution as introduced by Slush Pool is straightforward. Rather than keeping the almost- valid blocks for themselves, Slush Pool will publish them for anyone to see.

Since it's easy to check whether these almost-valid blocks are indeed almost valid (meaning they did require hash power to produce), and due to the much lower impact of variance, it's impossible to fake the public list. And it becomes impossible for a pool operator to pretend the total hash power is more than it really is.

(If hashers keep track of the almost-valid blocks they submit, they could also check whether these are included in the public list – though this shouldn't even be necessary.)

As an added benefit, this solution also offers more transparency, perhaps most interestingly regarding miner votes. With the introduction of Bitcoin XT, soon to be followed by Bitcoin Classic, Slush Pool was the only mining pool to allow individual hashers to vote on their preferred block size limit. But while hashers – and any other interested party – had to trust Slush Pool to actually attribute the right amount of hash power to the preference hashers desired, Slush Pool can now prove that it does.

The post Slush Pool Introduces Provably Fair Bitcoin Mining 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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NBitcoin's Nicolas Dorier: Segregated Witness Fastest Way to Bump Block Size

The long-lasting block size dispute has catapulted into the center of attention again. One of the most talked about developments is Segregated Witness, of which a public testnet iteration – SegNet – was launched in January. The innovation as recently proposed by Blockstream co-founder and Bitcoin Core developer Dr. Pieter Wuille is a centerpiece of a scalability “roadmap” set out by Bitcoin Core.

To find out where the broader development community stands on Segregated Witness, Bitcoin Magazine reached out to library and wallet developers, those who will need to do the heavy lifting in order to utilize the innovation once rolled out.

In part 8 of this series: NBitcoin developer Nicolas Dorier.

Segregated Witness

Nicolas Dorier is the CTO of Metaco, an open asset (colored coin) company that helps financial institutions emit fiat currency on the blockchain. Dorier is also lead developer of NBitcoin, the main .NET library for Bitcoin development, and he wrote a free ebook on Blockchain Programming: Blockchain Programming in C#.

Dorier already implemented full Segregated Witness support into NBitcoin, and launched a basic block explorer and transaction parser and checker on Segnet. He also briefly contributed to Segregated Witness development itself.

“Segregated Witness is a net win, there is not any downside to adopt it at all,” Dorier said. “It is one of the two pieces of the puzzle – the other being OP_CSV – to make Bitcoin scale to millions of users, by making the Lightning Network highly effective. I am also very excited by the new method to sign transactions, which now includes the value of outputs being spent. This is huge from a security perspective for webwallets and hardware wallets, as it prevents [the] user from adding too much fees by mistake. And last but not least, it increases the capacity of Bitcoin. I expect Segregated Witness adoption to follow an ‘S-curve’; wallets will jump on it very quickly.”

While Segregated Witness has been criticized as being a complicated solution, Dorier’s experience suggests otherwise. According to Dorier:

“From an implementation perspective it was relatively easy. I would say it took a little more than two or three days for NBitcoin support. I had to re-factor internal stuff to make it easier for NBitcoin’s users. Once implemented in NBitcoin, adding Segregated Witness to my block explorer was just a matter of updating the relevant package and redeploying it. Smartbit, another block explorer, has already done this as well, and can attest to the simplicity.”

Soft Fork

Roll-out of Segregated Witness on the Bitcoin network is currently scheduled for April. Once a super-majority of miners agrees on the solution, Segregated Witness will be activated, and it can be used by wallet and app software.

Among other benefits, this means that anyone using the new possibilities will use only about two-thirds to half the space in the available 1 megabyte blocks. These transactions get to pay a lower fee, and more transactions can be processed on the Bitcoin network.

But this strategy is being contended by the recently launched Bitcoin Core fork Bitcoin Classic. Bitcoin Classic most likely plans to deploy a block size increase to 2 megabyte blocks through a hard fork once 75 percent of hash power agrees, and a four-week “grace period” for all full nodes on the network to switch to the new rules.

Bitcoin Classic’s strategy has not gathered much support among library and wallet developers, however.

“Let’s be clear: Segragated Witness is the fatest way to bump the block size,” Dorier explained. “The migration to Segregated Witness does not need to be synchronized between service and wallet providers. In other words, anyone can receive Segregated Witness transactions even if their wallet did not upgrade – though in that case you’d have to trust on miners for validation.”

Hard Fork

Dorier does believe the block size limit will need to be increased through a hard fork a bit further down the road.

“Even with 1 megabyte blocks, Segregated Witness, and the Lightning Network deployed, Bitcoin will only be able to cater some 14 million users,” Dorier said. “Thanks to Segregated Witness, such an increase is not strictly needed for another year. But if there is consensus about raising the block size limit – and it’s clear it won’t hurt the network – it should be done nevertheless.”

But Dorier does hope this change will eventually come from the Bitcoin Core development team, rather than Bitcoin Classic, explaining:

“Core has proven to be reliable over the past years. All of their contributions to Bitcoin reached the highest standard of software development. Their commits speak for themselves. So I don’t support any ‘change of governance.’ In my opinion, Bitcoin Classic was pushed for political reasons; to try to get the power out of Bitcoin Core’s hands by some unproven team for unknown purposes. I will personally only support a 2 megabyte hard fork with 90 percent hash power vote, and a grace period of a year. This would make it clear the goal is not to raise a war against Bitcoin’s best contributors.

Even if Bitcoin Core doesn’t commit to a specific date, saying something like, ‘We will propose to do it sometime next year’ would fix a lot of the drama. It would also prevent a disastrous hard fork which could result into a split. What Bitcoin Classic proposes is the most dangerous thing that can happen to Bitcoin right now.”

For more information on Segregated Witness, see Bitcoin Magazine’s three -part series on the subject, or part 1 , part 2 , part 3 , part 4 , part 5 , part 6 and part 7 of this development series.

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February 12, 2016 -
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