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WTF Is The Blockchain? A Guide for Total Beginners

WTF Is The Blockchain? A Guide for Total Beginners

Blockchain: the single most confusing term since Bitcoin. Everyone has a vague idea of what it does. It’s either the ultimate evolution of financial technologies, or a ditzy fad that can be summed up in the disconcerting phrase: “dogechain.” In reality, major companies around the world have already shown favor to the burgeoning money exchange system and it may become firmer and tighter to stay away from the financial dark art.

In reality, it is all relatively effortless to understand. The Blockchain is a public ledger where transactions are recorded and confirmed anonymously. It’s a record of events that is collective inbetween many parties. More importantly, once information is entered, it cannot be altered. So, if the blockchain is the public record, what is being recorded? What are all of these “transactions”?

Cryptocurrencies, like bitcoin, are currencies that exist solely in digital. There are no physical golden coins with a big “B” on them. Moreover, possessing these non-real coins entails a fresh idea of “ownership.” You don’t literally have it in your forearms, or even in your bank account, but you have the capability to transfer “ownership” to someone else simply by creating a record in the blockchain. Rather than using bills, your transfer is unspoiled data.

Where exactly is this chain located? Due to the open nature of cryptocurrencies, and the importance of the public having access to other blocks, the blockchain isn’t located on just one fellow’s large computer. For example, the bitcoin blockchain is actually managed by distributed knots. These knots all have a copy of the entire blockchain. Knots will forever come and go, synchronizing their own copies of the chain with those of other users. By distributing copies and access, the chain can’t simply “go down,” or vanish. It’s a decentralized system that is both sturdy and secure.

All of your dogecoins are in a row, but what do you do with them? Whether you’re using them IRL or online, the blockchain makes it happen. There are many reasons people are falling in love with cryptocurrencies: it’s anonymous, decentralized, and there are no fees or third parties attempting to grab a percentage. However, if there were absolutely no regulations in place, the fresh currency would quickly become a greedfest of users attempting to screw each other over. The public nature of the blockchain means that anyone can check it. It is effectively anonymous, yet public, at the same time, and it is in the best interest of users if it remains so.

A DIY Bitcoin mining equipment, by Paul Anderson.

You can accept and trade coins, or you can mine for them. Miners can spend thousands of dollars on the right equipment just to mine coin. But what do they truly do? What miners do is fairly similar to real-world miners in that they are actively looking for something. Their computer repeatedly works through complicated calculations to find a very specific reaction.

Miners solve problems, but how in the world is that helpful? Brief story, miners are actually verifying that transactions posted by other users are legitimate, and the numbers all add up. Long story…

Miners collect transactions and put them into a single block. A block generally contains four chunks of information: a reference to the previous block, a summary of included transaction, a time stamp, and Proof of Work that went into creating the secure block. The blocks are strung together into a chain—a fluid chain that does not permit for any inconsistencies; this means there are no “bad cheques” in the system, and transactions entered are necessarily valid and can be processed. By checking the blockchain and confirming transactions, the entire system is effectively self-regulated and fully secure. No, that doesn’t mean some kid cooped up in a basement can just click “okay” and confirm a billion dollar transfer. Blocks generally need numerous independent confirmations, and the equations are intended to be hard to crack. Not to mention, the hardware required is far more specialized than the average laptop. Eventually, what’s to stop someone from simply going back and editing existing blocks? Each block is securely hashed—meaning it is rendered into seeming gibberish and almost unlikely to invert or undo. Once it’s in the blockchain, it’s there forever.

A rough idea of what a block chain may look like, courtesy of Yevgeniy Brikman

So, why waste time and resources helping other people, or the blockchain? Why not let someone else do all that “confirmation stuff,” while you just mine? Because, you don’t necessarily have a choice. Confirmation of the blockchain is central to mining. It’s part of the actual mining process; however, miners are generally given incentives. For example, after solving a problem (and creating a fresh hash) they are rewarded with coins.

Will you be eyeing a blockchain-styled ledger in your future? Brief reaction: oh yes. Blockchain and cryptocurrencies have caused fairly a stir over the past years. However, it seems their real importance has yet to be fully realized. The future isn’t just in businesses around the globe sporting glad “Now Accepting Bitcoins” signs, but rather emerging companies (and revolutionary existing ones, too) finding fresh uses for the cutting edge technology. VC firms and investors are placing their bets on the blockchain because there is untapped potential. Identity management, international contracts, and all sorts of complicated bank transactions can be greatly altered with the public ledger system. The process could (in an ideal world) work seamlessly, crossing boundaries where banks, logistics or a plethora of other obstacles once existed. They could be combined with the Internet of Things to create a more connected and automated world. Future companies may be able to absorb mountains of fresh data, or even digitize real-world things that are hard to quantify. Unluckily, many big companies are remaining mum on the studies in the blockchain field for evident reasons.

However, it is public skill that nine major banks (including JP Morgan and Goldman Sachs) recently joined a partnership to develop blockchain technologies. That’s not to say major companies are getting in on the cryptocurrency game; rather, they realize that the blockchain system, itself, could be a powerful implement for efficiency. With a system as versatile and secure as the blockchain, there may many unexpected innovations in the coming months and years.

Related video:

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens budge. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a dearest device for hackers requiring a ransom for a ordinary reason: You can begin accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To begin accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it stiffer for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens stir. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a beloved implement for hackers requiring a ransom for a elementary reason: You can embark accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To commence accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it tighter for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens budge. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a dearest instrument for hackers requesting a ransom for a elementary reason: You can begin accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To embark accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it stiffer for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens budge. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a beloved implement for hackers requesting a ransom for a ordinary reason: You can embark accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To embark accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it stiffer for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens stir. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a dearest device for hackers requiring a ransom for a plain reason: You can commence accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To commence accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it stiffer for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

What Is Bitcoin? All About the Mysterious Digital Currency

The Fresh York Times

May 15, 2017

Here is a look at the basics behind the electronic currency, which has come under latest scrutiny after hackers behind a global ransomware attack demanded payment in Bitcoin.

What is Bitcoin?

Bitcoin is a digital token that can be sent electronically from one user to another, anywhere in the world.

Bitcoin is also the name of the payment network on which the Bitcoin digital tokens stir. Some people differentiate inbetween Bitcoin capitalized, as the token, and bitcoin lowercase, as the network. Unlike traditional payment networks like Visa or American Express, no single company or person runs the Bitcoin network. Instead, it is a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the decentralized network of servers that makes the internet work.

Because there is no central authority running Bitcoin, no one has the authority to force fresh users to expose their identities. The network was designed this way to create a currency and a financial network outside the control of any government or single company.

The computers that join the network and track Bitcoin transactions are motivated to do so by the fresh coins that are released to the network every ten minutes and are given to one of the computers helping to track the transactions and maintain the network.

Why are hackers using Bitcoin?

The digital currency Bitcoin has emerged as a dearest implement for hackers requiring a ransom for a ordinary reason: You can begin accepting Bitcoin anywhere in the world without having to expose your identity.

For criminals, this makes Bitcoin much more attractive than systems like Western Union, which generally require customers to provide identification before opening an account and receiving transferred money.

How do you buy Bitcoin?

There are companies in most countries that will sell you Bitcoin in exchange for the local currency. In the United States, a company called Coinbase will link to your bank account or credit card and then sell you the coins for American dollars. Opening an account with Coinbase is similar to opening a traditional bank or stock brokerage account, with lots of verification of your identity needed.

For people who do not want to expose their identities, there are services like LocalBitcoins that will connect local people who want to buy and sell Bitcoin for cash, generally without any verification of identity required.

To commence accepting Bitcoin is even lighter. One needs only to create a Bitcoin address, which can be done anonymously by anyone with internet access.

The price of Bitcoin fluctuates permanently and is determined by open-market bidding on Bitcoin exchanges, similar to the way that stock and gold prices are determined by bidding on exchanges.

Can the authorities track criminals using Bitcoin?

All Bitcoin transactions are recorded on the network’s public ledger, known as the blockchain. Law enforcement or financial authorities can sometimes use the blockchain to track transactions among criminals. But as long as the criminals do not associate a real-world identity with their Bitcoin address, they are generally safe. Complicating matters further, there are increasingly sophisticated Bitcoin laundering services, known as tumblers, which mix large quantities of transactions together in order to make it firmer for the authorities to track the transactions.

Where it can get more difficult for hackers is when they want to convert the Bitcoin they have received into a traditional national currency. Most companies that convert Bitcoin to dollars in the United States require that their customers provide identification. If a criminal registered with a company like that, it would be relatively effortless for the police to track them down.

But there are many Bitcoin exchanges outside the United States that do not require customers to register with a real-world identity. LocalBitcoins also makes it effortless to find someone in any city around the world who will meet you in person and pay cash for Bitcoin without requiring any identification — a sort of Craigslist for Bitcoin exchanges. It is also getting lighter to buy goods online using Bitcoin, without ever converting the digital currency into dollars or euros.

What’s happening with the price of Bitcoin?

The price of Bitcoin has been rising, and recently hit a high above $Two,000. Like gold, the price of Bitcoin has always been driven by the scarcity of the digital tokens. When Bitcoin was created in 2009, it was determined that only twenty one million coins would ever be created.

Technology investors have purchased coins and shoved up the price out of a belief that the tokens and the system will be a sort of global digital currency and financial network for the future.

While real-world transactions have been slow to take off, Bitcoin has continued to be popular for black market uses like ransomware and online drug markets like the Silk Road and its successors.

The corporate world has also taken interest in the technology that enables Bitcoin, especially its decentralized financial network and the blockchain, the global ledger where all Bitcoin transactions are recorded. Many banks are making big bets that real-world financial transactions will one day be run on networks similar to Bitcoin, which can operate more quickly, efficiently and securely than traditional financial networks.

There are now many competitors to Bitcoin, like Ethereum, and their value has also been shoved up by growing interest in the Bitcoin technology. But Bitcoin has remained the largest so-called cryptocurrency and is generally the one that people use to buy and sell other cryptocurrencies.

What are the currency’s origins?

Bitcoin was introduced in two thousand eight by a shadowy creator going by the name of Satoshi Nakamoto, who only communicated by email and social messaging. While several people have been identified as likely candidates to be Satoshi, as the creator is known in the world of Bitcoin, not one has been confirmed. So the search for Satoshi has gone on.

Satoshi created the original rules of the Bitcoin network and then released the software to the world in 2009. Whether it is he, she or they, Satoshi largely disappeared from view two years later. Anyone can download and use the software, and Satoshi now has no more control over the network than anyone else using the software.

Related video:

http://www.youtube.com/watch?v=I-iy55WlRRU

What – s the largest issue keeping blockchain from working for financial transactions?

Без кейворда

Lack of a compelling business model.

The problem is that banks would like to use blockchain to make current systems more efficient. The trouble is that the current systems work truly well, and it turns out that the cost of switching over from the current system to a fresh system is far more than the money you would save. It doesn’t help that a lot of the money you would save would come in firing a lot of people that you need to implement the fresh system.

The big benefits from blockchain are likely to come from industries and use cases that don’t exist yet. The problem is that industries that don’t exist yet don’t have the budgets and the money to invest in fresh technology.

It doesn't scale. Bitcoin can accommodate approximately seven transactions per 2nd. The global financial system has many millions of transactions per 2nd.

This is partly because of the blocksize limit, which could be overcome if the economics of Bitcoin didn't force most mining to be done in a country whose internet uplink capacity is limited by government censorship. But more fundamentally its limited by the very idea of using computational cost to prevent fraud. Its exceptionally computationally expensive to mine a block and add it to the chain. That inherently boundaries the scale of the system,

There are many use cases being developed within the financial services arena using blockchain-based technology. The most effective and instant use case coming out in the marketplace presently relates to intentional transfers. For example I live in Sydney, Australia but have cash in the UK – it is quicker for me to fly to the UK (24 hours on a plane) go to my bank and fly back with the cash than it is within the current banking system, which takes three days to transfer cash, charges me $50 for the privilege and gives me an exchange rate Two.5% -4% below market rates. Blockchain-based solutions take around thirty -60 mins to clear with fees in the cents (plus exchange rate fees in and out of the cryptocurrency involved).

The challenges to adoption as I see it are threefold :

  1. scalability – for example the NYSE has around 1.4bn transactions a day. Blockchains because they have a consensus mechanism (where 51% of computers have to agree the block of data before it is agreed) means there is a delay inbetween the transaction happening and being agreed. Many companies are working on this scalability issue – most notable Digital Asset Holdings out of Fresh York (in tandem with the Australian Stock Exchange, amongst many investors) and many are looking at private blockchains to speed up the process as all the parties in the blockchain know each other already and can be trusted (unlike a public blockchain which has parties that do not know each other). Technically there is a long way to go but the cost savings associated with the middle offices processing the ownership and transfer of ownership (which is two days in Australia and longer in other jurisdictions) are potentially massive (check out the original fintech report – July two thousand fifteen by Banco Santander for enhanced explanation)
  2. Conservatism – the innovation divisions of the banks and other institutions are culturally so juxtaposed from those that are operational in nature. There is a quagmire of treacle that exists in inbetween these two – comprised compliance departments, risk departments, audit departments let alone quality assurance. Banks HAVE to get it right – failure means their clients lose confidence and the banks lose face, brand value and their business
  3. Business models – it is only where there are massive amounts of perceived ache – such as the international transfers example above – will the models be adopted quickly. There are slew of models outside of fintech that present clear models – where agony points exist- eg 20% of the world’s population has NO identity – leading to people trafficking and child prostitution. 67% of property has no formalised legal title. These models are all being worked on and will ultimately help financial services in helping refine the capability to take security and advance funds

There are many fine minds globally that are working on these cases and attempting to find adequate solutions. the technology is still very immature but it is getting better and better by the day.

Whilst there are some challenges in the short-term the power of the underlying technology has the potential to switch the form of global banking.

(Ultimately – the blockchain in plain English!)

Related video:

Virtual currency

Virtual currency

Virtual currency, also known as virtual money, is a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community. The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, defined virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily affixed to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”.

Contents

In 2012, the European Central Bank defined virtual currency as “a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community”. [1] :13

In 2013, Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, in contrast to its regulations defining currency as “the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance”, also called “real currency” by FinCEN, defined virtual currency as “a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency”. In particular, virtual currency does not have legal tender status in any jurisdiction. [Two]

In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily fastened to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”. [Three]

In his written testimony to the two thousand thirteen congressional hearing on virtual currencies Ben Bernanke stated “virtual currencies have been viewed as a form of ‘electronic money’ or area of payment system technology that has been evolving over the past twenty years”, in reference to a congressional hearing on the Future of Money before the Committee on Banking and Financial Services on eleven October 1995. [Four] The Internet currency Flooz was created in 1999. [Five] The term “virtual currency” emerges to have been coined around 2009, paralleling the development of digital currencies and social gaming. [6]

Albeit the correct classification is “digital currency”, US government institutions have preferred and uniformly adopted the term “virtual currency”, very first the US Treasury’s FinCEN, then the FBI in two thousand twelve [7] and in the General Accounting Office in its two thousand thirteen report [8] and other government agencies testifying at the November two thousand thirteen U.S. Senate hearing about bitcoin like the Department of Homeland Security, the U.S. Securities and Exchange Commission, the Office of the Attorney General. [9]

Attributes of a real currency, as defined in two thousand eleven in the Code of Federal Regulations, such as real paper money and real coins are simply that they act as legal tender and circulate “customarily”. [Ten]

The IRS determined in March 2014, to treat bitcoin and other virtual currencies as property for tax purposes, not currency. [11] [12] Some have suggested that this makes bitcoins not fungible—that is one bitcoin is not identical to another bitcoin, unlike one gallon of crude oil being identical to another gallon of crude oil—making bitcoin unworkable as a currency. [13] Others have stated that a measure like accounting on average cost basis would restore fungibility to the currency. [13]

Closed virtual currencies Edit

Virtual currencies have been called “closed” or “fictional currency” when they have no official connection to the real economy, for example currencies in massively multiplayer online role-playing games such as World of Warcraft. While there may be a grey market for exchanging such currencies or other virtual assets for real world assets, this is usually barred by the games’ terms of service.

Virtual currencies with currency flow into one direction Edit

This type of currency has been known for a long time in the form of customer incentive programs or loyalty programs. The very first known coupon in history is very likely from the US, attributed to Asa Candler, inventor of Coca-Cola and the free drink coupons in 1887, followed by C. W. Post’s one-cent-off coupon in breakfast cereal boxes in 1895, both to drive sales. The business issuing the coupon functions as a central authority. [14] Coupons remained unchanged for one hundred years until fresh technology enabling credit cards became more common in the 1980s, and credit card prizes were invented. The latest incarnation drives the increase of internet commerce, online services, development of online communities and games. Here virtual or game currency can be bought, but not exchanged back into real money. The virtual currency is akin to a coupon. Examples are frequent flyer programs by various airlines, Microsoft Points, Nintendo Points, Facebook Credits, Ven (currency) [ disputed – discuss ] and Amazon Coin.

Convertible virtual currencies Edit

A virtual currency that can be bought with and sold back for legal tender is called a convertible currency. It can be decentralized, as for example bitcoin.

FinCEN defined centralized virtual currencies in two thousand thirteen as virtual currencies that have a “centralized repository”, similar to a central bank, and a “central administrator”.

A decentralized currency was defined by the US Department of Treasury as a “currency (1) that has no central repository and no single administrator, and (Two) that persons may obtain by their own computing or manufacturing effort”. [Two] Rather than relying on confidence in a central authority, it depends instead on a distributed system of trust. [15]

Ethereum Edit

Bitcoin Edit

Bitcoin is the very first decentralized digital currency. [16] :1 Trust in the currency is based on the “transaction ledger which is cryptographically verified, and jointly maintained by the currency’s users”. The Bitcoin Foundation claims that bitcoin was “designed to be fully decentralized with miners operating in all countries, and no individual having control over the network”, [17] and that bitcoin is “as virtual as the credit cards and online banking networks people use everyday”. [Eighteen]

According to a Forbes journalist, “bitcoin mining has become increasingly centralized”, [Nineteen] and a group of European cryptologic researchers have questioned, if bitcoin is indeed a decentralized currency. [20] To improve bitcoin’s decentralization, they suggest to encourage fully decentralized mining pools, permit only one vote per bitcoin client, and to increase transparency in decision making. [20]

Digital currency is a particular form of currency that is electronically transferred and stored, i.e., distinct from physical currency, such as coins or banknotes. According to the European Central Bank, virtual currencies are “generally digital”, albeit their bearing precursor, the coupon for example, is physical. [1]

A cryptocurrency is a digital currency using cryptography to secure transactions and to control the creation of fresh currency units. [21] Since not all virtual currencies use cryptography, not all virtual currencies are cryptocurrencies. Cryptocurrencies are generally not legal tender. Ecuador is the very first country attempting a government run digital currency -no cryptocurrency; during the introductory phase from Christmas Eve two thousand fourteen until mid February two thousand fifteen people can open accounts and switch passwords. At the end of February two thousand fifteen transactions of electronic money will be possible. [22] [23]

adapted from an ECB work, Virtual Currency Schemes [1] :11

Virtual currency

Virtual currency

Virtual currency, also known as virtual money, is a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community. The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, defined virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily linked to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”.

Contents

In 2012, the European Central Bank defined virtual currency as “a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community”. [1] :13

In 2013, Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, in contrast to its regulations defining currency as “the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance”, also called “real currency” by FinCEN, defined virtual currency as “a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency”. In particular, virtual currency does not have legal tender status in any jurisdiction. [Two]

In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily linked to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”. [Three]

In his written testimony to the two thousand thirteen congressional hearing on virtual currencies Ben Bernanke stated “virtual currencies have been viewed as a form of ‘electronic money’ or area of payment system technology that has been evolving over the past twenty years”, in reference to a congressional hearing on the Future of Money before the Committee on Banking and Financial Services on eleven October 1995. [Four] The Internet currency Flooz was created in 1999. [Five] The term “virtual currency” emerges to have been coined around 2009, paralleling the development of digital currencies and social gaming. [6]

Albeit the correct classification is “digital currency”, US government institutions have preferred and uniformly adopted the term “virtual currency”, very first the US Treasury’s FinCEN, then the FBI in two thousand twelve [7] and in the General Accounting Office in its two thousand thirteen report [8] and other government agencies testifying at the November two thousand thirteen U.S. Senate hearing about bitcoin like the Department of Homeland Security, the U.S. Securities and Exchange Commission, the Office of the Attorney General. [9]

Attributes of a real currency, as defined in two thousand eleven in the Code of Federal Regulations, such as real paper money and real coins are simply that they act as legal tender and circulate “customarily”. [Ten]

The IRS determined in March 2014, to treat bitcoin and other virtual currencies as property for tax purposes, not currency. [11] [12] Some have suggested that this makes bitcoins not fungible—that is one bitcoin is not identical to another bitcoin, unlike one gallon of crude oil being identical to another gallon of crude oil—making bitcoin unworkable as a currency. [13] Others have stated that a measure like accounting on average cost basis would restore fungibility to the currency. [13]

Closed virtual currencies Edit

Virtual currencies have been called “closed” or “fictional currency” when they have no official connection to the real economy, for example currencies in massively multiplayer online role-playing games such as World of Warcraft. While there may be a grey market for exchanging such currencies or other virtual assets for real world assets, this is usually prohibited by the games’ terms of service.

Virtual currencies with currency flow into one direction Edit

This type of currency has been known for a long time in the form of customer incentive programs or loyalty programs. The very first known coupon in history is most likely from the US, attributed to Asa Candler, inventor of Coca-Cola and the free drink coupons in 1887, followed by C. W. Post’s one-cent-off coupon in breakfast cereal boxes in 1895, both to drive sales. The business issuing the coupon functions as a central authority. [14] Coupons remained unchanged for one hundred years until fresh technology enabling credit cards became more common in the 1980s, and credit card prizes were invented. The latest incarnation drives the increase of internet commerce, online services, development of online communities and games. Here virtual or game currency can be bought, but not exchanged back into real money. The virtual currency is akin to a coupon. Examples are frequent flyer programs by various airlines, Microsoft Points, Nintendo Points, Facebook Credits, Ven (currency) [ disputed – discuss ] and Amazon Coin.

Convertible virtual currencies Edit

A virtual currency that can be bought with and sold back for legal tender is called a convertible currency. It can be decentralized, as for example bitcoin.

FinCEN defined centralized virtual currencies in two thousand thirteen as virtual currencies that have a “centralized repository”, similar to a central bank, and a “central administrator”.

A decentralized currency was defined by the US Department of Treasury as a “currency (1) that has no central repository and no single administrator, and (Two) that persons may obtain by their own computing or manufacturing effort”. [Two] Rather than relying on confidence in a central authority, it depends instead on a distributed system of trust. [15]

Ethereum Edit

Bitcoin Edit

Bitcoin is the very first decentralized digital currency. [16] :1 Trust in the currency is based on the “transaction ledger which is cryptographically verified, and jointly maintained by the currency’s users”. The Bitcoin Foundation claims that bitcoin was “designed to be fully decentralized with miners operating in all countries, and no individual having control over the network”, [17] and that bitcoin is “as virtual as the credit cards and online banking networks people use everyday”. [Eighteen]

According to a Forbes journalist, “bitcoin mining has become increasingly centralized”, [Nineteen] and a group of European cryptologic researchers have questioned, if bitcoin is indeed a decentralized currency. [20] To improve bitcoin’s decentralization, they suggest to encourage fully decentralized mining pools, permit only one vote per bitcoin client, and to increase transparency in decision making. [20]

Digital currency is a particular form of currency that is electronically transferred and stored, i.e., distinct from physical currency, such as coins or banknotes. According to the European Central Bank, virtual currencies are “generally digital”, albeit their suffering precursor, the coupon for example, is physical. [1]

A cryptocurrency is a digital currency using cryptography to secure transactions and to control the creation of fresh currency units. [21] Since not all virtual currencies use cryptography, not all virtual currencies are cryptocurrencies. Cryptocurrencies are generally not legal tender. Ecuador is the very first country attempting a government run digital currency -no cryptocurrency; during the introductory phase from Christmas Eve two thousand fourteen until mid February two thousand fifteen people can open accounts and switch passwords. At the end of February two thousand fifteen transactions of electronic money will be possible. [22] [23]

adapted from an ECB work, Virtual Currency Schemes [1] :11

Virtual Currency

Mashable

Topics

39 Latest Stories

On the spectrum of currency ideologues, gold bugs and Bitcoin enthusiasts occupy equal but opposite positions. They’re both suspicious that governments are going to meddle around with normal money so much that it becomes futile — it’s just that one.

Are you fighting with how to deal with bitcoin on your tax come back? Well, fight no more. The Internal Revenue Service on Tuesday announced that bitcoin and other virtual currencies are treated as property, not currency, for federal tax purposes. .

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Prisoners at a labor camp in northeast China were compelled by guards to play online games in a moneymaking scheme, a former prisoner has told The Guardian. The scheme, a practice referred to among gamers as "gold farming," required some three hundred prisoners a.

Social gaming behemoth Zynga and American Express have just entered into a fresh partnership that will let users pay for Zynga goods using their American Express Membership Prizes points. In addition to using points for game cards or virtual currency.

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Virtual currency

Virtual currency

Virtual currency, also known as virtual money, is a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community. The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, defined virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily linked to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”.

Contents

In 2012, the European Central Bank defined virtual currency as “a type of unregulated, digital money, which is issued and usually managed by its developers, and used and accepted among the members of a specific virtual community”. [1] :13

In 2013, Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, in contrast to its regulations defining currency as “the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance”, also called “real currency” by FinCEN, defined virtual currency as “a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency”. In particular, virtual currency does not have legal tender status in any jurisdiction. [Two]

In 2014, the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily fastened to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically”. [Trio]

In his written testimony to the two thousand thirteen congressional hearing on virtual currencies Ben Bernanke stated “virtual currencies have been viewed as a form of ‘electronic money’ or area of payment system technology that has been evolving over the past twenty years”, in reference to a congressional hearing on the Future of Money before the Committee on Banking and Financial Services on eleven October 1995. [Four] The Internet currency Flooz was created in 1999. [Five] The term “virtual currency” shows up to have been coined around 2009, paralleling the development of digital currencies and social gaming. [6]

Albeit the correct classification is “digital currency”, US government institutions have preferred and uniformly adopted the term “virtual currency”, very first the US Treasury’s FinCEN, then the FBI in two thousand twelve [7] and in the General Accounting Office in its two thousand thirteen report [8] and other government agencies testifying at the November two thousand thirteen U.S. Senate hearing about bitcoin like the Department of Homeland Security, the U.S. Securities and Exchange Commission, the Office of the Attorney General. [9]

Attributes of a real currency, as defined in two thousand eleven in the Code of Federal Regulations, such as real paper money and real coins are simply that they act as legal tender and circulate “customarily”. [Ten]

The IRS determined in March 2014, to treat bitcoin and other virtual currencies as property for tax purposes, not currency. [11] [12] Some have suggested that this makes bitcoins not fungible—that is one bitcoin is not identical to another bitcoin, unlike one gallon of crude oil being identical to another gallon of crude oil—making bitcoin unworkable as a currency. [13] Others have stated that a measure like accounting on average cost basis would restore fungibility to the currency. [13]

Closed virtual currencies Edit

Virtual currencies have been called “closed” or “fictional currency” when they have no official connection to the real economy, for example currencies in massively multiplayer online role-playing games such as World of Warcraft. While there may be a grey market for exchanging such currencies or other virtual assets for real world assets, this is usually barred by the games’ terms of service.

Virtual currencies with currency flow into one direction Edit

This type of currency has been known for a long time in the form of customer incentive programs or loyalty programs. The very first known coupon in history is most likely from the US, attributed to Asa Candler, inventor of Coca-Cola and the free drink coupons in 1887, followed by C. W. Post’s one-cent-off coupon in breakfast cereal boxes in 1895, both to drive sales. The business issuing the coupon functions as a central authority. [14] Coupons remained unchanged for one hundred years until fresh technology enabling credit cards became more common in the 1980s, and credit card prizes were invented. The latest incarnation drives the increase of internet commerce, online services, development of online communities and games. Here virtual or game currency can be bought, but not exchanged back into real money. The virtual currency is akin to a coupon. Examples are frequent flyer programs by various airlines, Microsoft Points, Nintendo Points, Facebook Credits, Ven (currency) [ disputed – discuss ] and Amazon Coin.

Convertible virtual currencies Edit

A virtual currency that can be bought with and sold back for legal tender is called a convertible currency. It can be decentralized, as for example bitcoin.

FinCEN defined centralized virtual currencies in two thousand thirteen as virtual currencies that have a “centralized repository”, similar to a central bank, and a “central administrator”.

A decentralized currency was defined by the US Department of Treasury as a “currency (1) that has no central repository and no single administrator, and (Two) that persons may obtain by their own computing or manufacturing effort”. [Two] Rather than relying on confidence in a central authority, it depends instead on a distributed system of trust. [15]

Ethereum Edit

Bitcoin Edit

Bitcoin is the very first decentralized digital currency. [16] :1 Trust in the currency is based on the “transaction ledger which is cryptographically verified, and jointly maintained by the currency’s users”. The Bitcoin Foundation claims that bitcoin was “designed to be fully decentralized with miners operating in all countries, and no individual having control over the network”, [17] and that bitcoin is “as virtual as the credit cards and online banking networks people use everyday”. [Legitimate]

According to a Forbes journalist, “bitcoin mining has become increasingly centralized”, [Nineteen] and a group of European cryptologic researchers have questioned, if bitcoin is indeed a decentralized currency. [20] To improve bitcoin’s decentralization, they suggest to encourage fully decentralized mining pools, permit only one vote per bitcoin client, and to increase transparency in decision making. [20]

Digital currency is a particular form of currency that is electronically transferred and stored, i.e., distinct from physical currency, such as coins or banknotes. According to the European Central Bank, virtual currencies are “generally digital”, albeit their suffering precursor, the coupon for example, is physical. [1]

A cryptocurrency is a digital currency using cryptography to secure transactions and to control the creation of fresh currency units. [21] Since not all virtual currencies use cryptography, not all virtual currencies are cryptocurrencies. Cryptocurrencies are generally not legal tender. Ecuador is the very first country attempting a government run digital currency -no cryptocurrency; during the introductory phase from Christmas Eve two thousand fourteen until mid February two thousand fifteen people can open accounts and switch passwords. At the end of February two thousand fifteen transactions of electronic money will be possible. [22] [23]

adapted from an ECB work, Virtual Currency Schemes [1] :11

Related video:

Top ten Bitcoin Apps for Android

Top ten Bitcoin Apps for Android

Did you just pick up a fresh Galaxy phone that uses Android? Well, it is time to fountain it up with killer Bitcoin apps.

Did you just pick up a fresh Galaxy phone that uses Android? Well, it is time to explosion it up with killer Bitcoin apps. Just because you’re on the go doesn’t mean you can’t make use of your stash of Bitcoins. Here we look at ten Bitcoin apps that are very rated by users, effortless to use, and free. Let’s begin with one that was just updated last week on Google Play.

Mycelium Wallet

Mobile Bitcoin wallets are hot on Android, especially with the issues Apple has had with Bitcoin apps over the last two years. For many Bitcoin paramours, Apple shoved them into Android devices just to get excellent Bitcoin apps, and the fresh Mycelium Wallet is one of them.

A total of 89.9% give this Bitcoin app four or five starlets, and its abundance of useful features makes it effortless to see why. It helps you find people to trade your BTC with. Mycelium “super knots” make for prompt connections to the Bitcoin network, and love cold storage capability for maximum bitcoin security. Plus, you don’t have to download the entire block chain to get fully connected, providing you functionality right away. Effortless to see why this Bitcoin wallet is so popular.

Bitcoin Billionaire

For the Bitcoin gamer in you, this app lets you mine virtual bitcoins in a virtual world, with a tapping activity you’ll love. Embark off as a miner at an office behind a desk, customize your character, and build your way up to Bitcoin billionaire riches. Over 86% give this app four starlets, and it has been downloaded almost one million times.

Bitcoin Ticker Widget

If you are the kind of user who is always checking the BTC/LTC price, check out this ticker widget from XBT Apps. It monitors many of the world’s top bitcoin exchanges, including Bitstamp, Bitfinex, BTCe, BTC China and BitPay Best Bid. Customize app alerts to trigger when there are major switches in the market, so you can stir quickly.

Free Bitcoins

Bitcoin Aliens’ app sends out thousands of satoshis reliably every hour, so it’s a superb way to get began with Bitcoin. Whenever you need a hit of bitcoins, Free Bitcoins is ready. It’s one of the highest-rated apps in Google Play, with 91.4% providing it four starlets or more. It’s hard to find a faucet that is reliable, but this one does the trick every time.

Bitcoin Map

This app by Davide Gessa combines services to get you information on bitcoin merchants in your area. It uses OpenStreetMap, coinmap.org and Google Maps to find businesses in your area that sell goods and services in bitcoin. It has done very well with users, but is fairly fresh to the market. Rating: twenty seven out of thirty two users give it four starlets or more.

Bitcoin Checkout

From the minds at BitPay, this app gets merchants, whether they are brick-and-mortar or mobile, to accept bitcoin quickly and lightly right from the smartphone. The feature set includes customizable tipping, instant payment verification, and BitPay protection of merchants from Bitcoin price volatility. It gets an overall Four.6 rating out of five starlets from users.

Bitcoin Flapper

This might be a knock-off of the Angry Birds phenomenon, but it works for the gamers using it. Win prizes in bitcoin for flying these birds through the labyrinth of piles. Play head-to-head, or in tournaments, and send your winnings to any bitcoin wallet you choose. Over 88% approval rating on Google Play.

Bitcoin Paranoid

There are undoubtedly some of us who are addicted to the price of bitcoin versus their local currency, and this app is for you. Refreshed pricing alerts can come every ten seconds (Paranoia Mode), or set it for 1-minute, 15-minute and 1-hour refreshes. Can work through many exchanges, including Coinbase, and a weighted worldwide rate. Almost Two,400 out of Two,573 reviews give it four starlets or more.

Bitcoin Casino Slots Showcase

Love to play casino games? The Bitcoin Casino Slots Showcase from Fire Camp can get you numerous gaming practices in one convenient app. Superb graphics, and all the op casino games, from poker to roulette, to Blackjack. No bitcoins or credit cards are needed, if you want to play for free. Users love this app, with a whopping 96.1% providing it four starlets or more.

zTrader

zTrader is a secure trading client for the largest Bitcoin and altcoin exchanges, capable of trading hundreds of digital currencies on seventeen different exchanges, zTrader has everything you need to trade right from your Android device. Utilize total trading capability with seamless switching inbetween exchanges and currencies. A utter market overview, like Coin Market Cap, and secure, encrypted storage of API keys. Features a 92% approval rating from users on Google Play.

What Bitcoin app is your beloved? Share above and comment below.

Top ten Bitcoin Apps for Android

Top ten Bitcoin Apps for Android

Did you just pick up a fresh Galaxy phone that uses Android? Well, it is time to stream it up with killer Bitcoin apps.

Did you just pick up a fresh Galaxy phone that uses Android? Well, it is time to geyser it up with killer Bitcoin apps. Just because you’re on the go doesn’t mean you can’t make use of your stash of Bitcoins. Here we look at ten Bitcoin apps that are very rated by users, effortless to use, and free. Let’s commence with one that was just updated last week on Google Play.

Mycelium Wallet

Mobile Bitcoin wallets are hot on Android, especially with the issues Apple has had with Bitcoin apps over the last two years. For many Bitcoin paramours, Apple shoved them into Android devices just to get excellent Bitcoin apps, and the fresh Mycelium Wallet is one of them.

A total of 89.9% give this Bitcoin app four or five starlets, and its abundance of useful features makes it effortless to see why. It helps you find people to trade your BTC with. Mycelium “super knots” make for rapid connections to the Bitcoin network, and love cold storage capability for maximum bitcoin security. Plus, you don’t have to download the entire block chain to get fully connected, providing you functionality right away. Effortless to see why this Bitcoin wallet is so popular.

Bitcoin Billionaire

For the Bitcoin gamer in you, this app lets you mine virtual bitcoins in a virtual world, with a tapping activity you’ll love. Embark off as a miner at an office behind a desk, customize your character, and build your way up to Bitcoin billionaire riches. Over 86% give this app four starlets, and it has been downloaded almost one million times.

Bitcoin Ticker Widget

If you are the kind of user who is always checking the BTC/LTC price, check out this ticker widget from XBT Apps. It monitors many of the world’s top bitcoin exchanges, including Bitstamp, Bitfinex, BTCe, BTC China and BitPay Best Bid. Customize app alerts to trigger when there are major switches in the market, so you can stir quickly.

Free Bitcoins

Bitcoin Aliens’ app sends out thousands of satoshis reliably every hour, so it’s a excellent way to get began with Bitcoin. Whenever you need a hit of bitcoins, Free Bitcoins is ready. It’s one of the highest-rated apps in Google Play, with 91.4% providing it four starlets or more. It’s hard to find a faucet that is reliable, but this one does the trick every time.

Bitcoin Map

This app by Davide Gessa combines services to get you information on bitcoin merchants in your area. It uses OpenStreetMap, coinmap.org and Google Maps to find businesses in your area that sell goods and services in bitcoin. It has done very well with users, but is fairly fresh to the market. Rating: twenty seven out of thirty two users give it four starlets or more.

Bitcoin Checkout

From the minds at BitPay, this app gets merchants, whether they are brick-and-mortar or mobile, to accept bitcoin quickly and lightly right from the smartphone. The feature set includes customizable tipping, instant payment verification, and BitPay protection of merchants from Bitcoin price volatility. It gets an overall Four.6 rating out of five starlets from users.

Bitcoin Flapper

This might be a knock-off of the Angry Birds phenomenon, but it works for the gamers using it. Win prizes in bitcoin for flying these birds through the labyrinth of piles. Play head-to-head, or in tournaments, and send your winnings to any bitcoin wallet you choose. Over 88% approval rating on Google Play.

Bitcoin Paranoid

There are undoubtedly some of us who are addicted to the price of bitcoin versus their local currency, and this app is for you. Refreshed pricing alerts can come every ten seconds (Paranoia Mode), or set it for 1-minute, 15-minute and 1-hour refreshes. Can work through many exchanges, including Coinbase, and a weighted worldwide rate. Almost Two,400 out of Two,573 reviews give it four starlets or more.

Bitcoin Casino Slots Showcase

Love to play casino games? The Bitcoin Casino Slots Showcase from Fire Camp can get you numerous gaming practices in one convenient app. Fine graphics, and all the op casino games, from poker to roulette, to Blackjack. No bitcoins or credit cards are needed, if you want to play for free. Users love this app, with a whopping 96.1% providing it four starlets or more.

zTrader

zTrader is a secure trading client for the largest Bitcoin and altcoin exchanges, capable of trading hundreds of digital currencies on seventeen different exchanges, zTrader has everything you need to trade right from your Android device. Utilize total trading capability with seamless switching inbetween exchanges and currencies. A utter market overview, like Coin Market Cap, and secure, encrypted storage of API keys. Features a 92% approval rating from users on Google Play.

What Bitcoin app is your dearest? Share above and comment below.

Related video:

http://www.youtube.com/watch?v=EsFJ_OMcTbQ

The Worst Way to Buy Bitcoin – The Motley Idiot

The Worst Way to Buy Bitcoin

Investing in bitcoin isn’t effortless. It’s an online currency for the tech-savvy, difficult to buy and perhaps even stiffer to store securely. Thus, many investors and speculators have turned to an lighter way to own bitcoin, the Bitcoin Investment Trust (NASDAQOTH:GBTC) .

The Bitcoin Investment Trust was designed to make holding bitcoin as effortless as buying a stock or exchange-traded fund. Traded over the counter, the trust holds about 0.093 bitcoin for each share outstanding. Wielding a share is thus the equivalent to wielding about one-tenth of a bitcoin.

But like anything, shares of the Bitcoin Investment Trust are governed by the laws of supply and request, and impatient speculators are willing to pay more for each share than the trust’s bitcoins are worth. The fund recently traded for $531 per share, or 105% more than the underlying bitcoin is worth, according to my calculations.

Why this happens

It isn’t unusual for closed-end funds to trade at a price that differs from their net asset value. Some funds trade at premiums, while the majority trade at a discount. But what is unusual is the size of the premium — a 105% premium is a massive outlier to the rest of the closed-end fund world. Historically, closed-end funds have traded for a Four.5% discount to their net asset value, on average.

Bitcoin Investment Trust investors could lose money, even if bitcoin prices keep enlargening. Picture source: Getty Pics.

The sponsor of the trust, Grayscale Investments, recently filed to list the trust on the NYSE Arca exchange, where you’ll find most legitimate ETFs. At the same time, it suspended the creation of fresh trust units, which means that there won’t be any fresh shares created, at least not any time soon.

Even when it was actively issuing fresh units, creation wasn’t keeping up with request. Securities and Exchange Commission filings showcase it created only 31,400 shares in two thousand seventeen in the days leading up to its S-1 filing. With no fresh supply and an enlargening amount of request, the premium has widened quickly. Shares have traded at an average premium of 39% to underlying value of the bitcoin, according to my calculations.

Photo source: Author.

A big risk

Speculators who pay a premium to buy shares of the trust are taking a big risk by assuming that the supply and request imbalance is permanent. But things could switch, and quickly: Bitcoin could fall out of favor, or speculators could find lighter ways to buy and sell bitcoin quickly and in quantity. After all, as recently as April 13, shares traded at a mere 8% premium to NAV.

I find the premium difficult to justify. If anything, I’d argue shares should trade at a discount, given the trust’s 2% annual management fee that leisurely licks away at the bitcoin backing each share per year.

Closed-end fund investors often capitalize high management fees at ten times when valuing a fund. A fee of 2% per year capitalized at ten times means shares should theoretically trade at a 20% discount to the market value of the underlying bitcoin. The share price would have to fall by as much as 60% to get to a 20% discount to their net asset value, assuming no switch in the price of bitcoin.

I have no particular insight into where bitcoin will go from here, but I do know one thing: Fund premiums to net asset value have a tendency to revert to the mean. Investors who hold Bitcoin Investment Trust shares could thus stand to lose money even if bitcoin prices keep moving higher. Buyer beware.

Jordan Wathen has no position in any stocks mentioned. The Motley Idiot has no position in any of the stocks mentioned. The Motley Idiot has a disclosure policy.

Related video:

The True Cost of Bitcoin Transactions – Money and State

The True Cost of Bitcoin Transactions

It seems the Bitcoin community is not correctly tallying the true cost of Bitcoin transactions.

The belief is that Cost = Miner Fee. We’ll display why this is wrong, but the fee is of course part of the cost, so let’s examine it first…

Fees are presently averaging in the range of $0.30 to $1.00 per transaction. Here’s an anecdotal sample as I’m writing this:

Block #451871 $1,287 in fees / one thousand three hundred forty seven txs = $0.95 avg fee

Block #451872 $1649 in fees / two thousand one hundred sixty one txs = $0.76 avg fee

Block #451873 $1,497 in fees / one thousand four hundred fifty txs = $1.03 avg fee

Block #451874 $1,209 in fees / one thousand five hundred eighty two txs = $0.76 avg fee

Block #451875 $1,591 in fees / two thousand one hundred eighty txs = $0.73 avg fee

Total: $7,233 fees / eight thousand seven hundred twenty txs = $0.83 avg fee

83 cents per transaction on average…

Is that “too expensive?” That’s a judgement call, and genuine people can disagree about what is “too expensive.” It depends what one uses Bitcoin for.

Some people, indeed, are using Bitcoin to budge “normal” amounts of money around (ie – like a “peer-to-peer cash system”). This doesn’t refer to “micro transactions,” which are fractions of a dollar and have been impractical in Bitcoin for years, rather it refers to casual payments of $1-$50 in value, which make up the vast majority of human economic activity broadly, and a good deal of Bitcoin activity, specifically. An $0.83 fee doesn’t matter for a $Two,500 payment, but it matters if you’re sending $7 to a friend. Indeed, it will actually preclude a $Three daily wage payment.

Consider that a superb way to make Bitcoin centralized is to reduce its utility to only the world’s richest.

And those who imagine such users to be using Bitcoin “wrong” are perhaps not understanding what consequences that sentiment invites: such users, finding less utility in Bitcoin, will be incentivized to go to other platforms or just stick with the status quo: fiat. How tragic that someone would actually choose fiat, but many will if Bitcoin is too expensive to use as a peer-to-peer cash system.

So on the topic of the explicit miner fee, maybe $0.83 is too high, and maybe not. It depends what a user is attempting to accomplish.

But $0.83 isn’t the true cost… and this is a point most observers are missing.

The true cost of a Bitcoin transaction can be better considered as:

Cost = Fee + Time taken to determine fee + Risk of uncertainty. What do I mean by this?

Those people who are using Bitcoin today pay more than a miner fee, they pay in time and uncertainty (risk). As blocks are utter, users often need to switch the fee they add to their transaction (before or after they send it). Some wallets do an okay job of this, but most don’t (and before you vilify wallet creators, realize that “smart fee policy” is nowhere near a science yet, and switches all the time). So, in addition to the $0.83 miner fee, the user presently has to also spend Time to determine that it ought to be $0.83 in the very first place.

A highly-skilled Bitcoiner can figure out an adequate fee in a minute, but Bitcoin cannot be imagined as a platform only for highly-skilled Bitcoiners. If that is the target market, then the project is fated. A normal user (meaning most users) fight with the fee estimation (hell, I’ve been doing Bitcoin for six years and I’m not the most graceful at fee calculation myself).

Many casual (read: normal) users of Bitcoin get horribly confused, and if they even bother attempting to figure it out, they may wander over to /r/bitcoin to ask advice.

Look at this comment on Reddit to a user who was confused about transaction delays and fees:

We should realize how awkward and confusing that is for a normal Bitcoin user (ie – a non-technical person who wants a system that is effortless and convenient).

And at least that comment was attempting to be helpful. Many users get responses more like this:

Jesus. Add in the misery of dealing with people like /u/MinersFolly and it’s amazing Bitcoin is gaining users at all.

So back to our equation, the true cost of a transaction is: $0.83 (maybe?) + time to determine $0.83 + Risk of uncertainty.

What do I mean by uncertainty? Well, even if a user figures out a recommended fee, there is no assure it will be confirmed in the next block. Using a recommended fee gives zero assure of delivery time.

Here’s a depressing real world anecdote: A duo months ago I had some friends over for a Civ six LAN party. One man didn’t have the game, so I suggested to buy it on Steam for him (they accept Bitcoin!). I paid the BitPay invoice for the Steam game, and waited. And waited. And waited. Twenty five minutes later it still hadn’t displayed up. Three blocks had already happened. Everyone is sitting around waiting. Ultimately, I just pulled out a credit card and bought the game (paying again) so that we could all play. A year ago, this would not have happened. What went wrong? Was my fee incorrect? (I paid the high fee option in Jaxx wallet). Was the mempool too utter? We just desired to play, so back to the fifty year old credit card technology I went.

There are some in the community who read the above and actually think, “meh, what’s the big deal?” Or perhaps react, “just wait two years for Lightning!” Cool, tell me that when I’m attempting to buy Civ 7.

Back to the present… because of this uncertainty users are facing, one of two consequences happen:

1) the user gets annoyed at the delay, or actually suffers some kind of economic loss, or

Two) the user can’t use Bitcoin for this tx at all because it is time sensitive and user can’t risk the uncertainty.

And be careful not to discount the utility loss to a Bitcoin user, who was getting excited about making a Bitcoin transaction (the future of money!), only to detect his tx is stuck in the mempool for thirty three hours. We’re fortunate if that user ever gives Bitcoin another chance.

Fee + Time + Risk of uncertainty (F+T+Ru). Since T and Ru are not measureable, it seems most engineers in the industry have been totally oblivious to them. The costs are more apparent to an economist, and are very apparent to anyone in business with actual users (there’s a reason why almost every Bitcoin business with more than ten thousand users is very anxious to see both SegWit and a hardfork blocksize increase… but that’s another topic).

As blocks treatment capacity:

1) Miner fees get more expensive

Two) Time/effort to determine fees rises

Trio) The reliability of transactions falls toward zero (risk of hours-long delay for very first confirmation, even with “good fees”)

Many people have only been considering #1, above.

Those who look at a latest tx fee of $0.30 and obnoxiously proclaim, “transactions are cheap, you can’t expect the system to be free!” are truly missing the point and are harming the prospects of this project. The miner fee is only part of the cost that users are dealing with, and if peoples’ time and sanity are worth anything, it is the lesser part.

And let’s end this bimbo false dichotomy of Bitcoin as a “payment system” vs a “settlement system.” Such distinction is a relic of fiat banking networks and has no place with blockchain-based assets. The reality is this: every payment on a blockchain network is a settlement, and the cheaper these transactions, the more widespread uses the platform will find, meaning greater utility, a broader and more decentralized user-base, higher market capitalization, more liquidity, and therefore more hashpower dedicated to it, and more security derived therefrom.

If Bitcoin transactions are too expensive (considering F+T+Ru), people will use other platforms instead for some or all of their economic activity, period. As I tweeted yesterday, I’ve found myself now holding a modest balance of Ethereum merely for the purpose of puny (not micro) payments to friends. It’s just cheaper and more reliable. And I’m doing that with more allegiance to Bitcoin than almost anyone on Earth, how dedicated will a normal person be to a platform that isn’t helpful to them?

The response of some has been, “so what, good riddance.” Such people are being arrogant, naïve, and suffering from a disease common in the business world: not listening to or respecting customers. Such people are free to have that sentiment, of course, just as they are free to end up on a lonely platform.

Now, obviously a blockchain cannot (and should not) treat all the world’s transactions on-chain, but that doesn’t mean we shouldn’t do all we can to acquire as much transaction marketshare as securely possible. This is a platform about network effects, after all. Just because it’s true that Bitcoin’s blockchain can’t treat Visa-level scale on-chain, doesn’t mean we should be convenient and complacent about a five tx/sec threshold today, especially during Bitcoin’s formative years, while the world is still watching and waiting to see if it catches on as the money protocol of the future (those who think Bitcoin’s dominance is “inevitable” are, again, suffering arrogance).

The community needs to take at- or near-capacity blocks earnestly, and yet many have dismissed the issue, telling stupid things like “well when fees rise it’s just the free market at work.” Sure it is, and when users leave Bitcoin, or never bother a 2nd transaction because their very first was obnoxious and unreliable, their preference of alternatives will also “just be the free market at work.” The objective should be to do everything practical to make Bitcoin cheaper and more efficient, because if we don’t, it leaves a meaty chance for Bitcoin’s successor. Bitcoin is free-market money. It competes, and it must be competitive.

As the true cost of Bitcoin transactions rises, utility at the margin falls, and the platform’s fundamental value as a instrument for human economic interaction declines alongside. Reduce the number of use-cases for which Bitcoin makes sense, and the quantity and quality of people willing to hold a portion of Bitcoin declines.

Related video:

My practices with purchasing Bitcoins using a credit card via – Ctrl blog

Ctrl blog

My practices with purchasing Bitcoins using a credit card via Cex.io

Last updated: 2017-05-05

I needed some Bitcoins, a digital cryptographic currency, to pay for a service that only accepts payments in Bitcoin. As a technologist who haven’t touched Bitcoin in some Four+ years, I thought I could navigate the Bitcoin scene and quickly acquire some Bitcoins. Let us just say the Bitcoin exchange market is kind of unpleasant.

Bitcoin exchanges have a bad reputation of fraud and malpractice, so I was fairly skeptical when I desired to purchase a few Bitcoins with a credit card. There is a high risk of fraud on both sides of the transaction with some exchanges tearing off their customers, and bad customers tearing of the exchanges.

Because of financial regulations around the world and the history of fraudulent actors, the exchanges requires a lot of individual information including your passport or other government issued identification. This creates high expectations of the various exchanges regarding security, privacy, and transparency. Cex.io accepts customers from all over the world, excluding the USA.

Having this in mind, I cautiously reviewed the options available to me, read up on reviews and the practices from others customers, and ultimately read the privacy policies and terms of service of the most promising exchanges. I were left with two candidates: Cex.io and Cubits. I’ll review the very first one here, and the 2nd later this week.

I’ll now attempt to paint a picture of my practices with a finish transaction at Cex.io.

Account registration and two-factor authentication woes

The registration was originally fairly slick and followed the familiar pattern of coming in an email address, phone number, setting a password, and then verifying the number and email address.

After completing these steps I was recommended that I enable two-factor authentication (2FA) using either the Google Authenticator app, or an SMS or automated phone call. I was told that I wouldn’t be able to withdraw funds later without very first enabling 2FA, so I proceeded with configuring this extra security precaution.

I attempted using the SMS option, despite NIST ’s call to deprecate SMS as a 2FA, because it’s the most convenient option. I attempted three times to set it up and waited twenty minutes after each attempt for an SMS that never displayed up on my phone.

Failing that I thought I’d attempt setting up the Google Authenticator app on my phone, but quickly ran into another problem: the QR code needed to set up the website within the app wouldn’t display up.

The backend alternated inbetween returning the string “undefined” and links to pictures that returned four hundred four Not Found error messages.

With both of my preferred options failing, I ended up choosing the last option which was an automated robot-caller providing me five numbers. I guess I’ll have to deal with that every time I want to login to my Cex.io account going forward.

Depositing money from your credit card

Instantly after registering, I landed on a page where I could come in how much money I’d like to spend on Bitcoin or how many Bitcoins that I dreamed to purchase. They accept Visa and MasterCard as long as they’re issued by a 3-D Secure financial institution, or international wire transfer. The latter is so ridiculously expensive and unpredictable that I didn’t even consider it as an option.

I opted for twenty Euros worth of Bitcoin (the smallest possible amount available per transaction) and paid for it with Visa. The process was fairly streamlined at very first.

The transaction costs were Three,9 % + 0,20 EUR from Cex.io, and an extra 1,7 % currency conversion fee on top from my credit card provider Visa. The sum total of fees for twenty Euros was 1,37 Euro.

After choosing my amount and confirming, I entered my credit card information directly on the Cex.io website (not through a more trusted payment solutions provider). This took a few seconds, and after verifying the transaction with my bank through the 3-D Secure process (“Verified by Visa”), I was told that my credit card had been charged. My account balance was still zero EUR, however.

Capitulating your ID-papers

Except for the snag with the 2nd authentication factor, the registration and on-boarding process was very straight-forward up until this point.

After Cex.io had charged my credit card and effectively committed me to the process, Cex.io pulled what I can only refer to as “a dick move”. My account balance still demonstrated zero EUR even after charging my credit card, and I was now told that I had to provide my my government issued identification papers.

To be fair, they do disclose that you have to provide them with ID papers in their extended documentation. However, you have to read through a lot of legal text to figure out exactly what is expected. The timing of when they ask for identification ensures their customers are decently motivated to finish the tedious process that many will feel uneasy about performing over the internet. It’s certainly a practice that is good for customer retention, but not customer satisfaction.

The verification process involves photographing yourself along with your credit card will all information clearly visible. You also have to photograph your passport or other government issued identity papers along with your credit card.

I couldn’t find any informational page where Cex.io discloses which outer agencies they use to verify your identification papers or who exactly they share your information with. Their privacy policy only say that they’ve outsourced the task to one or more outward agencies. The information, along with your credit card information, is stored for at least five years after you delete your account. If you don’t delete your account, there is no telling how long they’ll store it. They could share it with anyone and the information could be used to steal your credit card or even your identity, there is just no telling.

More worryingly, the reassuring Help talk widget that had been floating at the bottom of every page disappeared when I got to the verification process. It was still visible on some pages but it was no longer displayed on account or verification related pages.

There were slew of crimson flags going up here around this process, but I shoved ahead.

Cex.io has a nice Payment Card Verification Guide that guides you through exactly what is needed to verify your identity. (You may recognize the inspiration for this review’s feature photo on that page.)

After taking some selfies of myself and my papers, I uploaded them directly through the Cex.io website and was told the process would take anywhere from some minutes to hours. Approximately twenty minuets later I got an email informing me that my photos had been rejected.

My selfie were rejected even however my face and papers where clearly visible. I was told that I “needed a three hundred dpi resolution photo”; which I’d like to add is a meaningless metric without specifying a dimension to go with it.

My 2nd attempt, using my phone’s superior back-facing camera rather than the front-facing camera, was approved after just ten minuets. Upon completing the verification process I now had an account balance of twenty EUR.

Lets purchase some coins

I could eventually purchase some Bitcoins! I imagine myself holding the sought after digital currency in my digital wallet and being all like Money Two.0 in no time. The fantasy was quickly cut brief, however.

I entered that I wished to spend twenty EUR to purchase some 0,03663551 BTC. Every step of the way everything demonstrated twenty EUR as the final sum on every confirmation screen. Upon confirming the purchase, however, the receipt now displayed Nineteen,99 EUR instead of the agreed upon twenty EUR and my account now had a dead-weight of 0,01 EUR.

Now, this is very strange watching how Bitcoin is technically and practically infinitely divisible. Cex.io should have been able to charge me twenty EUR exactly as the website and I agreed before the purchase. This “rounding error” meant that they effectively gained 0,01 EUR in abandoned currency as a hidden transaction fee. The minimum purchase sum is twenty EUR, so I can’t use that money. I’ll get back to this point again in the conclusion.

Cex.io also deducted another 0,02 % in transaction fees, but I was made aware of this fee beforehand and [somewhat hidden] in their marketing materials.

Withdraw your Bitcoins? Nope!

I eventually had some Bitcoins! All I needed to now was to transfer the digital funds into my digital wallet. Yeah, that wasn’t going to be painless either.

Locating the withdrawal screen wasn’t hard. It’s featured prominently on every page as a big blue button. Cex.io’s website design had so far been intuitive and effortless to navigate. There have been some friction points along the way, as mentioned above, but generally they convey information in an understandable style.

The withdrawal screen was another story entirely. I can’t accurately describe how it works, but you have to know exactly where to click beforehand to get it to permit you to withdraw your hard-fought-for Bitcoins into a digital wallet. It involves knowing that you have to overlook the most prominent part of the screen and choose BTC as the withdrawal currency from something resembling a calculator on the right forearm side.

As I’d purchased 0,03663551 BTC I wished to withdraw 0,03663551 BTC. However, the input field for the amount to withdraw helpfully informs me that the maximum amount is 0,03663551 BTC. Which should be fine because that is exactly the amount I want to withdraw. Except that, of course, it wouldn’t let me proceed with the maximum amount entered. I had to deduct 0,00000001 BTC (a sum so petite it can’t be represented in most conventional currencies) to get the withdrawal form to accept my sum as a valid entry.

Cex.io also charged a 0,0001 BTC commission (0,02 %) on the transaction in addition to the 0,00000001 BTC I was coerced to abandon in my account.

However, “New accounts are not permitted to withdraw funds in the very first forty eight hours.” Even after obeying with all the extensive and intrusive verification process that I never felt all that good about, I’m still not permitted to withdraw my Bitcoins. My account must be at least two days old before I can withdrawal my virtual currency. Of course, the withdrawal screen only mentioned this after I clicked the button to make the transaction happen.

By this time, it was 03:00 in the night local time and I was fairly pissed off. Two days later I returned for my Bitcoins, paid my last fees, and closed my account with Cex.io — hopefully for good.

Conclusion

Oh, boy where do I embark.

I was annoyed by the appropriately systematic nickle-and-diming (or is it “bit-and-byting”?) during the process. Paying one fee would have been preferable to being charged puny sums all through the process. I don’t even know how to calculate the total fees I ended up paying!

Having the system make you abandon puny amounts of currency in your account is also not very reassuring. One such example would be excusable as a programming error, random happenstance, or a rounding error. However, when it happens at every point in the process it leaves you with a bad feeling about the entire practice. I wouldn’t say Cex.io cheated me, but I do feel wronged when they skimmed off those abandoned funds off the top of my transactions.

Their “Licenses and Certificates” page lists various government and private authorities introduced as endorsements. The problem is of course that they link to documents clearly stating that the certificate or business license can’t be used as an endorsement even however Cex.io presents them to customers as a kind of badge of honor to create the illusion of trust and endorsement.

The lack of transparency about the payment and identity verification agencies used by Cex.io truly makes it hard to establish trust. I don’t know who got a copy of my passport and credit card nor anything about their reputation nor the physical location of their operations. It could be well-known credit card scammers for all I know.

I felt good about the transaction up until the point where I had to verify my identity and readily available support options commenced disappearing from the website. I felt uneasy about every part of the identity verification process, and I don’t feel any better about it now.

Related video:

Geyser of bullion: fresh gold-backed bitcoin is a disaster in waiting – The Edge

Fountain of bullion: fresh gold-backed bitcoin is a disaster in waiting

Exactly one year ago, a bitcoin was worth toughly $101. In November, it was worth $1,100. Today, it’s worth $432. That zigzagging price chart is why the digital currency is often criticized for not being a “stable store of value.” You have no idea what it will be worth tomorrow.

Melvin Ng, who ran the now-shuttered LibertyBit bitcoin exchange, and David Gallo, a data-center operator who took up bitcoin mining, are hoping to fix that problem with a fresh cryptocurrrency called Minacoin. Minacoin is based on the bitcoin protocol, which means it relies on a network of programmers to authenticate transactions and prevent double-spending. But unlike bitcoin, it’s backed by gold.

“Bitcoin is an amazing technology. It’s almost like the internet reinvented again with currency in it,” Ng says. “But the currency can lose its value within a day. Gold has been around for the last Five,000 years.”

Minacoin is backed by two 400-ounce bars of gold

The Toronto entrepreneurs purchased two 400-ounce bars of gold worth $1,050,000 as reserve. The total number of Minacoins will be capped at twenty one million, meaning each coin is worth a nickel. And unlike actual gold, users can send Minacoins back and forward lightly over the internet.

The idea is very similar to E-Gold, the infamous digital currency backed by gold, silver, and platinum that its operators stored in bank vaults in London and Dubai. E-Gold soon became popular with credit card thieves. In 2007, its founders were indicted for facilitating money laundering. After a prayer agreement, the company found that it was unlikely to conform with all the relevant regulations.

Unluckily, Minacoin doesn’t seem to have learned E-Gold’s lesson. Ng and Gallo are not sure whether Minacoin will be structured as a currency backed by a reserve of gold, which would subject it to anti-money laundering regulations, or simply a way to trade gold, which would mean a different set of regulations.

“The original concept was a currency that was not a currency, kind of an IOU backed by gold,” Ng says. “In terms of the technology, it’s there. In terms of the gold, it’s there. But in the last three days we’ve had a lot of issues in terms of legality and dealing with the terminology that we use.”

Unluckily, Minacoin doesn’t seem to have learned E-Gold’s lesson

It’s also unclear whether Minacoin has anything to suggest. It would essentially enable the use of gold for quick transactions, but it’s unclear why anyone would want to do that. Most gold bugs stockpile their loot as a long-term investment rather than use it to buy breakfast (albeit the latter does happen in the forest of Fresh Hampshire at the annual libertarian Porcupine Fest).

“As an economist, I’m almost always skeptical of people that think gold is the one true reaction to all of our problems, so that already raises flags,” says Eli Dourado, a research fellow at the Mercatus Center at George Mason University. “Just looking at it, these guys aren’t ready for prime time.”

If you want a store of value, why not just buy gold? he asks. And if you want a currency, why not just use bitcoin?

“These guys aren’t ready for prime time.”

Minacoin says it believes it is not obligated to collect information on its users, which is basically a siren call to both criminals and the FBI. But again, there is no reason why criminals should use Minacoin over bitcoin.

At least the company doesn’t plan to commence selling coins right away: Minacoin will soft-launch today with preorders, in order to get a sense of the request. Ng and Gallo hope to fully launch in June.

“It’s hard to believe that the company will be able to launch in a month if it intends to target US residents,” says attorney Carol Van Cleef, who was retained by E-Gold to assist in compliance. “The Department of Justice set out its expectations that a gold-backed currency needed to [be] registered as a money-services business and licensed.”

Related video:

Ledger Wallet – Ledger Blue – Private security device

Ledger Blue pre-order batch two

Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.

Looking for another model?

The item has been successfully added to your cart.

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A powerful and nimble device

The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and complicated clever contracts. Its slick yet sturdy casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and nimble operating system.

Packed with hardware features

The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate lightly and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.

Designed for numerous secure apps

Thanks to its modular architecture, the Ledger Blue runs numerous dedicated companion apps in total isolation on top of its firmware. The strong security model permits to add fresh cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The plasticity of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.

Features

Total Plasticity

Battery-powered, Bluetooth* and USB enabled, the Ledger Blue can operate with any computer and smartphone.

  • Battery 500mA LiPo
  • BLE Four.1, USB Two.0 Total Speed, NFC (requires firmware update)
  • Windows, Mac OS, Linux and Chrome OS

COLOR TOUCHSCREEN

The Blue embeds a color display and a large capacitive touchscreen with anti scrape glass, encased in a strong cover.

MULTI-APPS

The Blue is built upon an advanced operating system that supports effortless installation of applications, accessible via a quick-launch dashboard.

  • Install & liquidate apps with Ledger Manager
  • Free firmware upgrades
  • Enterprise app licensing & support

SECURITY

Your confidential data is never exposed: it is strongly secured and isolated inwards a Secure Element, locked by a PIN code.

  • Secure Element: EAL6+ / ST31
  • BOLOS isolation technology
  • Four to eight digit PIN code

INTEGRITY

Ledger Blue uses WYSIWYS (What You See is What You Sign) to mitigate threats.

  • Malwares, viruses
  • Man in the middle attacks
  • Proof of presence

BACKUP & RESTORATION

The configuration of your device is backed up on a recovery sheet. Effortless restoration on any Ledger device or compatible wallets.

  • Built-in onboarding and configuration
  • BIP39 and BIP44 standards
  • 12, eighteen or twenty four words recovery

Ledger Wallet – Ledger Blue – Individual security device

Ledger Blue pre-order batch two

Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.

Looking for another model?

The item has been successfully added to your cart.

Something went wrong

A powerful and nimble device

The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and sophisticated clever contracts. Its slick yet sturdy casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and limber operating system.

Packed with hardware features

The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate lightly and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.

Designed for numerous secure apps

Thanks to its modular architecture, the Ledger Blue runs numerous dedicated companion apps in total isolation on top of its firmware. The strong security model permits to add fresh cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The plasticity of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.

Features

Utter Plasticity

Battery-powered, Bluetooth* and USB enabled, the Ledger Blue can operate with any computer and smartphone.

  • Battery 500mA LiPo
  • BLE Four.1, USB Two.0 Utter Speed, NFC (requires firmware update)
  • Windows, Mac OS, Linux and Chrome OS

COLOR TOUCHSCREEN

The Blue embeds a color display and a large capacitive touchscreen with anti scrape glass, encased in a strong cover.

MULTI-APPS

The Blue is built upon an advanced operating system that supports effortless installation of applications, accessible via a quick-launch dashboard.

  • Install & liquidate apps with Ledger Manager
  • Free firmware upgrades
  • Enterprise app licensing & support

SECURITY

Your confidential data is never exposed: it is strongly secured and isolated inwards a Secure Element, locked by a PIN code.

  • Secure Element: EAL6+ / ST31
  • BOLOS isolation technology
  • Four to eight digit PIN code

INTEGRITY

Ledger Blue uses WYSIWYS (What You See is What You Sign) to mitigate threats.

  • Malwares, viruses
  • Man in the middle attacks
  • Proof of presence

BACKUP & RESTORATION

The configuration of your device is backed up on a recovery sheet. Effortless restoration on any Ledger device or compatible wallets.

  • Built-in onboarding and configuration
  • BIP39 and BIP44 standards
  • 12, eighteen or twenty four words recovery

Ledger Wallet – Ledger Blue – Individual security device

Ledger Blue pre-order batch two

Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.

Looking for another model?

The item has been successfully added to your cart.

Something went wrong

A powerful and pliable device

The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and sophisticated wise contracts. Its slick yet sturdy casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and pliable operating system.

Packed with hardware features

The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate lightly and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.

Designed for numerous secure apps

Thanks to its modular architecture, the Ledger Blue runs numerous dedicated companion apps in total isolation on top of its firmware. The strong security model permits to add fresh cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The plasticity of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.

Features

Utter Plasticity

Battery-powered, Bluetooth* and USB enabled, the Ledger Blue can operate with any computer and smartphone.

  • Battery 500mA LiPo
  • BLE Four.1, USB Two.0 Utter Speed, NFC (requires firmware update)
  • Windows, Mac OS, Linux and Chrome OS

COLOR TOUCHSCREEN

The Blue embeds a color display and a large capacitive touchscreen with anti scrape glass, encased in a strong cover.

MULTI-APPS

The Blue is built upon an advanced operating system that supports effortless installation of applications, accessible via a quick-launch dashboard.

  • Install & liquidate apps with Ledger Manager
  • Free firmware upgrades
  • Enterprise app licensing & support

SECURITY

Your confidential data is never exposed: it is strongly secured and isolated inwards a Secure Element, locked by a PIN code.

  • Secure Element: EAL6+ / ST31
  • BOLOS isolation technology
  • Four to eight digit PIN code

INTEGRITY

Ledger Blue uses WYSIWYS (What You See is What You Sign) to mitigate threats.

  • Malwares, viruses
  • Man in the middle attacks
  • Proof of presence

BACKUP & RESTORATION

The configuration of your device is backed up on a recovery sheet. Effortless restoration on any Ledger device or compatible wallets.

  • Built-in onboarding and configuration
  • BIP39 and BIP44 standards
  • 12, eighteen or twenty four words recovery

Ledger Wallet – Ledger Blue – Private security device

Ledger Blue pre-order batch two

Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.

Looking for another model?

The item has been successfully added to your cart.

Something went wrong

A powerful and pliable device

The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and complicated clever contracts. Its slick yet sturdy casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and limber operating system.

Packed with hardware features

The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate lightly and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.

Designed for numerous secure apps

Thanks to its modular architecture, the Ledger Blue runs numerous dedicated companion apps in total isolation on top of its firmware. The strong security model permits to add fresh cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The plasticity of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.

Features

Total Plasticity

Battery-powered, Bluetooth* and USB enabled, the Ledger Blue can operate with any computer and smartphone.

  • Battery 500mA LiPo
  • BLE Four.1, USB Two.0 Total Speed, NFC (requires firmware update)
  • Windows, Mac OS, Linux and Chrome OS

COLOR TOUCHSCREEN

The Blue embeds a color display and a large capacitive touchscreen with anti scrape glass, encased in a strong cover.

MULTI-APPS

The Blue is built upon an advanced operating system that supports effortless installation of applications, accessible via a quick-launch dashboard.

  • Install & eliminate apps with Ledger Manager
  • Free firmware upgrades
  • Enterprise app licensing & support

SECURITY

Your confidential data is never exposed: it is strongly secured and isolated inwards a Secure Element, locked by a PIN code.

  • Secure Element: EAL6+ / ST31
  • BOLOS isolation technology
  • Four to eight digit PIN code

INTEGRITY

Ledger Blue uses WYSIWYS (What You See is What You Sign) to mitigate threats.

  • Malwares, viruses
  • Man in the middle attacks
  • Proof of presence

BACKUP & RESTORATION

The configuration of your device is backed up on a recovery sheet. Effortless restoration on any Ledger device or compatible wallets.

  • Built-in onboarding and configuration
  • BIP39 and BIP44 standards
  • 12, eighteen or twenty four words recovery

Ledger Wallet – Ledger Blue – Individual security device

Ledger Blue pre-order batch two

Ledger Blue is the most advanced hardware security gear on the market. It boasts multi application execution, and packs enterprise-level crypto-capabilities into a lightweight handheld device designed and crafted in France. It is architected around a Secure Element, featuring a touchscreen and USB & Bluetooth* connectivity.

Looking for another model?

The item has been successfully added to your cart.

Something went wrong

A powerful and limber device

The Ledger Blue is the latest generation product from Ledger, result of more than two years of research and development. This high-end device embeds a large touchscreen to securely manage transactions and complicated wise contracts. Its slick yet sturdy casing encloses the best-in-class technology built upon the Blockchain Open Ledger (BOLOS) platform, a powerful and nimble operating system.

Packed with hardware features

The Ledger Blue is based on a dual-chip architecture embedding a ST31 Secure Element and a STM32 microcontroller thus achieving a fully isolated environment. It features a LED-backlit color touchscreen to navigate lightly and validate transactions. It is powered by a lipo rechargeable battery and communicates with USB or Bluetooth* devices.

Designed for numerous secure apps

Thanks to its modular architecture, the Ledger Blue runs numerous dedicated companion apps in total isolation on top of its firmware. The strong security model permits to add fresh cryptocurrencies or apps without risk of compromising the master seed. Transaction integrity is ensured by the WYSIWYS paradigm (What You See Is What You Sign). The plasticity of the device enables enterprise level usage: with all major crypto libraries embedded in the firmware, any type of blockchain can be supported.

Features

Total Plasticity

Battery-powered, Bluetooth* and USB enabled, the Ledger Blue can operate with any computer and smartphone.

  • Battery 500mA LiPo
  • BLE Four.1, USB Two.0 Total Speed, NFC (requires firmware update)
  • Windows, Mac OS, Linux and Chrome OS

COLOR TOUCHSCREEN

The Blue embeds a color display and a large capacitive touchscreen with anti scrape glass, encased in a strong cover.

MULTI-APPS

The Blue is built upon an advanced operating system that supports effortless installation of applications, accessible via a quick-launch dashboard.

  • Install & liquidate apps with Ledger Manager
  • Free firmware upgrades
  • Enterprise app licensing & support

SECURITY

Your confidential data is never exposed: it is strongly secured and isolated inwards a Secure Element, locked by a PIN code.

  • Secure Element: EAL6+ / ST31
  • BOLOS isolation technology
  • Four to eight digit PIN code

INTEGRITY

Ledger Blue uses WYSIWYS (What You See is What You Sign) to mitigate threats.

  • Malwares, viruses
  • Man in the middle attacks
  • Proof of presence

BACKUP & RESTORATION

The configuration of your device is backed up on a recovery sheet. Effortless restoration on any Ledger device or compatible wallets.

  • Built-in onboarding and configuration
  • BIP39 and BIP44 standards
  • 12, eighteen or twenty four words recovery

Related video:

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