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Bitcoin technology launches a Swiss start-up scene – SWI

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Bitcoin is the most prominent example of so-called cryptocurrencies: digital currencies that use encryption technics for generating and verifying transactions.

Bitcoin may have fallen victim to volatility, but Switzerland has become fertile ground for start-ups banking on a different, digital future for currencies. And the Swiss franc’s latest activity has only added fuel to the fire.

When the Swiss National Bank (SNB) announced it had un-pegged the Swiss franc from the euro on January 15, sending the franc’s value skyrocketing, bitcoin enthusiasts took to the Web to say “I told you so”.

While the mainstream media had basically proclaimed bitcoin dead outward link after it lost 400% of its value since its height in November two thousand thirteen and was embroiled in a series of security scandals, the community supporting such digital currency – or cryptocurrency – witnessed the SNB’s stir as validation that a de-centralised monetary system is the way forward.

Outer Content

Yesterday the Washington Post said bitcoin needs a central bank to stabilize the currency. Today a decision by t. https://t.co/QrPZqIPgVU

Johann Gevers hails from South Africa but now lives in Switzerland where he goes a start-up called Monetas. He was “very blessed to see” the SNB’s budge which he eyed as unsustainable. The budge, he says, exposes the flaws in the idea of having a few people calling the shots at a central bank, which runs “completely counter” to his business’s philosophy of providing individual citizens control over their financial lives.

Cryptocurrency: a glossary

Bitcoin: The most-used type of digital currency, invented in two thousand eight by a person with the moniker Santoshi Nakamoto. Accepted by hundreds of online vendors worldwide, including Amazon and Cherry.

Cryptocurrency: A form of money that uses cryptography to control its creation and management

Blockchain: The public digital ledger keeping track of all bitcoin transactions

Monetas, in a nutshell, is a global payment system that can transfer any currency or commodity to another person anywhere in the world through a phone app, without a central authority controlling the transaction. To do so, it relies on the underlying technology behind bitcoin transactions. Its ultimate objective is what Gevers calls “the democratisation of finance” across borders and currencies.

On the other side of Switzerland, in the French-speaking city of Neuchâtel, Adrien Treccani is also hard at work on three bitcoin-related companies at another soon-to-be-launched cryptocurrency start-up hub known as Bitcoin Factory. A doctoral student in mathematical finance at the Swiss Finance Institute, Treccani is at home in two surroundings: the high-risk start-up culture surrounding cryptocurrency and the traditional Swiss financial world. When the euro peg was liquidated, he also believed the national bank’s policy had an expiration date and supported the decision – but he found reactions differed depending on which environment he was in.

“I was in favour of leaving the peg and I witnessed that many people in the bitcoin community had the same feeling, but not many people around me [in the finance world] agreed,” he says, chalking up the difference in opinion to cryptocurrency enthusiasts’ dislike of “the central bank’s cheating with the currency”.

Gevers would like to take things further and work directly with central banks “to have them see that the course they have been following so far is simply unsustainable and very dangerous to the social fabric”. For starters, one of his company’s goals is to talk to central banks about using the Monetas system and the cryptocurrency technology behind it in order to more sustainably issue currency.

However, former UBS chief historian Robert Vogler puts that idea in the category of “wishful thinking” and the Swiss National Bank did not comment on its preparedness to entertain such a concept.

For Vogler, the current cryptocurrency investment craze has shades of other movements in history following financial crises. He points to Silvio Gesell’s theories about issuing money at a constant value in the wake of a depression in Argentina in the late 1800s, or the WIR independent currency system that was founded in Switzerland in the 1930s and now also functions as an electronic currency. For him it’s no surprise that ideas for such fresh currencies always pop up following major financial and economic crises.

“These aspirations to eliminate oneself from reality have become a bit symptomatic, believing you can avoid certain dangers in the current system,” Vogler believes.

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And as Boston University finance and management professor Zvi Bodie pointed out to the PBS NewsHour outward link , part of the trouble with bitcoin is that it’s not backed or ensured by any government, third party (like a credit card company) or physical, independently valuable entity (like gold).

No one is denying that bitcoin is volatile or the fact that it’s an enormously high-risk investment, says Treccani. That’s one of the three main things he thinks are holding it back from becoming more mainstream, the others being its accessibility and its security.

Right now, when compared to use of other payment methods like credit cards, bitcoin remains a niche; according to the Financial Times, the bitcoin system processes about 100,000 transactions a day, versus one hundred fifty million for Visa.

But Treccani points out that the cryptocurrency itself and the system it brings with it are two different things.

“You have to separate the bitcoin currency from bitcoin technology,” he says. “Then you begin eyeing the real value in the underlying innovation.”

That’s the innovation fuelling start-ups like those populating Crypto Valley and Bitcoin Factory. And Treccani sees more of his colleagues in the financial sector coming around to the technology.

“They might still not know why it is useful or different from the current system, but they see that bitcoin is a credible next step in financial innovation,” he says. Recently, the surest sign of the traditional financial world’s growing interest in cryptocurrency may have been the $75 million investment investment by the Fresh York Stock Exchange and other playmates in Coinbase, a major online marketplace for trading and storing bitcoin.

Outer Content

Pleased to share we've raised $75M led by @dfjgrowth @USAA @nyse @bbva @docomo and others. Focused on helping #bitcoin grow in two thousand fifteen & beyond

Mike Hearn, a freelance cryptocurrency software developer based in Switzerland, thinks bitcoin-related companies suggest a specific kind of investment chance that’s hard to find these days.

“If you look around in the technology sector there aren’t a lot of areas with high risk, high growth potential,” he says. “But bitcoin began from nothing with one fellow and now it’s this global phenomenon, everybody has heard about it and it’s grown a lot. So why not take a gamble on that?”

But Hearn doesn’t think such large-scale investments as the NYSE’s would have happened in Europe, where he believes people are much less likely to put lots of money into a venture linked to bitcoin’s volatile reputation.

Fabio Federici agrees. The gun-shy investor culture was one reason why he incorporated his start-up in Silicon Valley instead of in Switzerland, where he grew up and went to school. His company is designed to let merchants, investors and others have effortless access to the information stored in the bitcoin blockchain, the digital ledger of all bitcoin transactions.

But Gevers, Treccani and others working to develop the Swiss cryptocurrency start-up sector would argue Switzerland has more working for it than against it when it comes to being an attractive place to launch a company.

For one, the Swiss government and the Swiss National Bank issued a report outward link on regulating bitcoin last year, defining bitcoin as a means of payment like any other currency, outlining guidelines for merchants and traders. “At least they eyed bitcoin coming and have given a clear statement to start-ups and companies about how to deal with this technology,” Treccani says.

It amounts to a clearer regulatory environment for cryptocurrency in Switzerland, Treccani argues, compared with a certain degree of uncertainty in neighbouring countries or in the United States.

Cryptocurrency’s unpredictability is also the most intoxicating thing about it for investors. For now, that makes its future anything but certain and has led its enthusiasts to take its erraticism in their stride.

“I wish bitcoin were more stable, but you never know when even very stable national currencies can abruptly go crazy,” says Hearn.

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Bitcoin Payments with Sources

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Bitcoin Payments with Sources

Use Sources to accept payments using Bitcoin, the popular digital cryptocurrency.

Stripe users in the United States can accept Bitcoin for USD payments from customers using Sources—a single integration path for creating payments using any supported method.

During the payment process, a Source object is created and your customer is given a receiver address to send the required amount of bitcoin to. Your customer uses this information with their Bitcoin wallet service or app to send the bitcoin amount needed. After completing this, your integration uses the source to make a charge request and accomplish the payment.

Bitcoin is a push-based and single-use method of payment. This means your customer must take activity to send the required amount of bitcoin to you. The pushing of funds may take a few minutes since your customer must do this outside of your checkout flow, but the amount is instantaneously available as soon as the funds have been received. Once the source is chargeable, there can be instant confirmation about the success or failure of a payment.

Quickstart using Checkout

The simplest way to accept Bitcoin is with Checkout. After integrating Checkout for card payments, only one code switch is needed to begin accepting Bitcoin payments—the addition of data-bitcoin=”true” in the form’s code:

After specifying the amount in USD that you want to receive, Stripe treats displaying the converted amount in BTC that your customer needs to pay. Once a Bitcoin payment is received, Checkout submits the form with the following extra fields:

  • stripeToken : The ID of the chargeable Source object
  • stripeTokenType : The type of token returned—the value is source_bitcoin
  • stripeEmail : The email address provided by the customer

You can then instantaneously make a charge request using the source.

Step 1: Create a Source object

Stripe.js reference

This guide supplements our Stripe.js and Elements documentation with specific usage for Sources. Refer to this if you need further information on using Stripe.js or Elements.

If you want to build a custom-made integration for accepting Bitcoin, a Source object can be created client-side using Stripe.js or server-side using the API.

To create a source with Stripe.js, very first include the library within your payment page and set your publishable API key.

Once included, use the following source.create method to create a source, providing the following information:

Server-side source creation

The use of Stripe.js to create this type of source is optional, but very recommended. If you forgo this step and pass the information directly to Stripe when creating a Source object, you must take adequate steps to safeguard any sensitive information that may pass through your servers.

Using either method, Stripe comebacks a Source object containing the relevant details for the specified method of payment.

Error codes

Source creation for Bitcoin payments may comeback any of the following errors:

Step Two: Have the customer thrust funds

When creating a source, its status is primarily set to pending and cannot yet be used to create a charge. Your customer must send the specified amount of bitcoin to make the source chargeable. Customers thrust bitcoin to the address provided within the receiver[address] attribute. The bitcoin[amount] specifies the amount, in BTC, the customer needs to send.

There are three lumps of information you should display to the customer:

  • bitcoin[amount] : The amount (in Satoshi) that the customer must send. This amount, like all amounts used by the Stripe API, represents the smallest unit of currency. There are ten 8 (100,000,000) satoshi in one bitcoin, so the returned bitcoin[amount] must be divided by 100,000,000 to present the amount in BTC.
  • receiver[address] : The bitcoin address that is specific to this receiver
  • bitcoin[uri] : An encoding of the amount and address. If you encode this URI as a QR code, some Bitcoin apps can scan it. If this URI is introduced as a hyperlink, customers can click on it to activate their preferred Bitcoin client, if installed.

Step Three: Charge the Source

Using webhooks

Your integration needs to use webhooks to be notified of status switches on Source and Charge objects.

Once the customer has shoved the necessary funds, the source’s status transitions to chargeable and it can be used to make a charge request. This transitions happens asynchronously as confirming a Bitcoin transaction on the blockchain can take minutes.

For this reason it is essential that your integration rely on webhooks to determine when the source becomes chargeable in order to create a charge. Please refer to our best practices for more details on how to best integrate payment methods using webhooks.

Webhooks

The following webhook events are sent to notify you about switches to the source’s status:

Source expiration

A Bitcoin source must be used within six hours of becoming chargeable . If it is not, its status is automatically transitioned to canceled and your integration receives a source.canceled webhook event.

Similarly, a Bitcoin source’s ensured exchange rate expires after ten minutes, after which point it is canceled. Your JavaScript handler is called client-side and the source’s status transitions to canceled . Any fund received after a source is canceled are automatically refunded back to the customer.

Once a source is canceled, the customer’s bitcoin payment is refunded automatically—no funds are moved into your account. For this reason, make sure the order is canceled on your end and the customer is notified once you receive the source.canceled event.

If you receive that callback, you can instruct your servers to create a fresh source, then update the payment page with the fresh receiver’s information and begin polling.

Make a charge request using the source

Once the source is chargeable, from your source.chargeable webhook handler, you can make a charge request using the source ID as the value for the source parameter to accomplish the payment.

Bitcoin Sources are single-use and cannot not be used for recurring or extra payments. Refer to our Sources & Customers guide for more information on how single-use Sources interact with Customers.

Step Four: Confirm that the charge has succeeded

Since the customer has already shoved the funds at the time the Source is chargeable , unless there is an unexpected error, the Charge will instantaneously succeed.

You will also receive the following webhook event as the charge is created:

We recommend that you rely on the charge.succeeded webhook event to notify your customer that the payment process has been finished and their order is confirmed. Please refer to our best practices for more details on how to best integrate payment methods using webhooks.

Refunding Bitcoin payments

Bitcoin payments can be refunded through either the Dashboard or API. However, the Bitcoin address where to come back the funds needs to be provided by the customer. By default, we automatically contact the customer at the email address provided during source creation when a refund is created (or the source is canceled and funds need to be returned). Once the customer provides us with their Bitcoin address, we process the refund automatically.

Some users may want to manage the collection of the refund addresses themselves. Please contact us to learn more about this option.

Treating mispayments

The customer is responsible for sending the correct amount of bitcoin to pack the source. While uncommon, it is possible for a customer to send an unexpected amount that prevents a payment from being completed—resulting in a mispayment. This can happen when:

  • The customer sends too few bitcoin so the payment cannot be finished
  • The customer sends too many bitcoin and needs to be partially refunded
  • The customer sends the correct amount of bitcoin but they send it after too long a delay, or there’s a network error such that the source token is never posted to your server

All mispayments are treated automatically by Stripe. When a source is charged, any unused bitcoin received in excess will be returned to the customer automatically (after collecting their refund address as described in the previous section). Similarly, if a source is never charged, it is eventually canceled and any unused bitcoin is also returned the customer automatically.

You can help avoid the third possibility of mispayments through the use of webhooks. You can configure your integration to receive source.chargeable events, then subsequently create charges from those sources.

Testing Bitcoin payments

When creating a Source object using your test API keys, use one of Stripe’s test email addresses when you need to test Bitcoin payments under different conditions.

Related resources

Questions?

We’re always blessed to help with code or other questions you might have! Search our documentation, contact support, or connect with our sales team. You can also talk live with other developers in #stripe on freenode.

Bitcoin Payments with Sources

Payments

Subscriptions

  • Overview
  • Quickstart
  • Account Types
  • Accounts Overview
  • Standard
  • Express
  • Custom-built
    • Updating Accounts
    • Identity Verification
    • Required Info
  • Processing Payments
  • Creating Charges
    • Direct Charges
    • Destination Charges
    • Separate Charges and Transfers
  • Account Debits
  • Using Subscriptions
  • Numerous Currencies
  • Account Balances
  • Bank Payouts
  • Best Practices
  • Migrating
  • OAuth Reference
  • Webhooks
  • Testing

Radar

Account

Atlas

Bitcoin Payments with Sources

Use Sources to accept payments using Bitcoin, the popular digital cryptocurrency.

Stripe users in the United States can accept Bitcoin for USD payments from customers using Sources—a single integration path for creating payments using any supported method.

During the payment process, a Source object is created and your customer is given a receiver address to send the required amount of bitcoin to. Your customer uses this information with their Bitcoin wallet service or app to send the bitcoin amount needed. After completing this, your integration uses the source to make a charge request and accomplish the payment.

Bitcoin is a push-based and single-use method of payment. This means your customer must take act to send the required amount of bitcoin to you. The pushing of funds may take a few minutes since your customer must do this outside of your checkout flow, but the amount is instantly available as soon as the funds have been received. Once the source is chargeable, there can be instantaneous confirmation about the success or failure of a payment.

Quickstart using Checkout

The simplest way to accept Bitcoin is with Checkout. After integrating Checkout for card payments, only one code switch is needed to begin accepting Bitcoin payments—the addition of data-bitcoin=”true” in the form’s code:

After specifying the amount in USD that you want to receive, Stripe treats displaying the converted amount in BTC that your customer needs to pay. Once a Bitcoin payment is received, Checkout submits the form with the following extra fields:

  • stripeToken : The ID of the chargeable Source object
  • stripeTokenType : The type of token returned—the value is source_bitcoin
  • stripeEmail : The email address provided by the customer

You can then instantly make a charge request using the source.

Step 1: Create a Source object

Stripe.js reference

This guide supplements our Stripe.js and Elements documentation with specific usage for Sources. Refer to this if you need further information on using Stripe.js or Elements.

If you want to build a custom-made integration for accepting Bitcoin, a Source object can be created client-side using Stripe.js or server-side using the API.

To create a source with Stripe.js, very first include the library within your payment page and set your publishable API key.

Once included, use the following source.create method to create a source, providing the following information:

Server-side source creation

The use of Stripe.js to create this type of source is optional, but very recommended. If you forgo this step and pass the information directly to Stripe when creating a Source object, you must take adequate steps to safeguard any sensitive information that may pass through your servers.

Using either method, Stripe comebacks a Source object containing the relevant details for the specified method of payment.

Error codes

Source creation for Bitcoin payments may comeback any of the following errors:

Step Two: Have the customer thrust funds

When creating a source, its status is primarily set to pending and cannot yet be used to create a charge. Your customer must send the specified amount of bitcoin to make the source chargeable. Customers thrust bitcoin to the address provided within the receiver[address] attribute. The bitcoin[amount] specifies the amount, in BTC, the customer needs to send.

There are three chunks of information you should display to the customer:

  • bitcoin[amount] : The amount (in Satoshi) that the customer must send. This amount, like all amounts used by the Stripe API, represents the smallest unit of currency. There are ten 8 (100,000,000) satoshi in one bitcoin, so the returned bitcoin[amount] must be divided by 100,000,000 to present the amount in BTC.
  • receiver[address] : The bitcoin address that is specific to this receiver
  • bitcoin[uri] : An encoding of the amount and address. If you encode this URI as a QR code, some Bitcoin apps can scan it. If this URI is introduced as a hyperlink, customers can click on it to activate their preferred Bitcoin client, if installed.

Step Trio: Charge the Source

Using webhooks

Your integration needs to use webhooks to be notified of status switches on Source and Charge objects.

Once the customer has shoved the necessary funds, the source’s status transitions to chargeable and it can be used to make a charge request. This transitions happens asynchronously as confirming a Bitcoin transaction on the blockchain can take minutes.

For this reason it is essential that your integration rely on webhooks to determine when the source becomes chargeable in order to create a charge. Please refer to our best practices for more details on how to best integrate payment methods using webhooks.

Webhooks

The following webhook events are sent to notify you about switches to the source’s status:

Source expiration

A Bitcoin source must be used within six hours of becoming chargeable . If it is not, its status is automatically transitioned to canceled and your integration receives a source.canceled webhook event.

Similarly, a Bitcoin source’s ensured exchange rate expires after ten minutes, after which point it is canceled. Your JavaScript handler is called client-side and the source’s status transitions to canceled . Any fund received after a source is canceled are automatically refunded back to the customer.

Once a source is canceled, the customer’s bitcoin payment is refunded automatically—no funds are moved into your account. For this reason, make sure the order is canceled on your end and the customer is notified once you receive the source.canceled event.

If you receive that callback, you can instruct your servers to create a fresh source, then update the payment page with the fresh receiver’s information and commence polling.

Make a charge request using the source

Once the source is chargeable, from your source.chargeable webhook handler, you can make a charge request using the source ID as the value for the source parameter to finish the payment.

Bitcoin Sources are single-use and cannot not be used for recurring or extra payments. Refer to our Sources & Customers guide for more information on how single-use Sources interact with Customers.

Step Four: Confirm that the charge has succeeded

Since the customer has already shoved the funds at the time the Source is chargeable , unless there is an unexpected error, the Charge will instantly succeed.

You will also receive the following webhook event as the charge is created:

We recommend that you rely on the charge.succeeded webhook event to notify your customer that the payment process has been ended and their order is confirmed. Please refer to our best practices for more details on how to best integrate payment methods using webhooks.

Refunding Bitcoin payments

Bitcoin payments can be refunded through either the Dashboard or API. However, the Bitcoin address where to comeback the funds needs to be provided by the customer. By default, we automatically contact the customer at the email address provided during source creation when a refund is created (or the source is canceled and funds need to be returned). Once the customer provides us with their Bitcoin address, we process the refund automatically.

Some users may want to manage the collection of the refund addresses themselves. Please contact us to learn more about this option.

Treating mispayments

The customer is responsible for sending the correct amount of bitcoin to pack the source. While uncommon, it is possible for a customer to send an unexpected amount that prevents a payment from being completed—resulting in a mispayment. This can happen when:

  • The customer sends too few bitcoin so the payment cannot be ended
  • The customer sends too many bitcoin and needs to be partially refunded
  • The customer sends the correct amount of bitcoin but they send it after too long a delay, or there’s a network error such that the source token is never posted to your server

All mispayments are treated automatically by Stripe. When a source is charged, any unused bitcoin received in excess will be returned to the customer automatically (after collecting their refund address as described in the previous section). Similarly, if a source is never charged, it is eventually canceled and any unused bitcoin is also returned the customer automatically.

You can help avoid the third possibility of mispayments through the use of webhooks. You can configure your integration to receive source.chargeable events, then subsequently create charges from those sources.

Testing Bitcoin payments

When creating a Source object using your test API keys, use one of Stripe’s test email addresses when you need to test Bitcoin payments under different conditions.

Related resources

Questions?

We’re always blessed to help with code or other questions you might have! Search our documentation, contact support, or connect with our sales team. You can also talk live with other developers in #stripe on freenode.

Related video:

Bitcoin Gambling Investments Three

Bitcoin Gambling Investments Trio/12

It has now been three months since we began our Bitcoin Gambling Investments experiment and we have now made a 16.9% comeback on a Bitcoin basis and a 37.43% come back on a USD basis. In aggregate our initial five Bitcoin Investment is now worth Five.83987 Bitcoins, or on a USD basis our $3000 investment is now worth approximately $4123.

So albeit our total Bitcoin Investment dropped in value slightly from the previous month the rise in the value of Bitcoin has helped the investment grow significantly.

In the third month we did some further investigation into Satoshi Dice and MoneyPot and determined to discontinue our Bitcoin investments on their sites. We will go into further details on this decision later in this article (focusing on Satoshi Dice this time).

With the Bitcoins we took out from these sites we invested more Bitcoins into SafeDice and we also added Bitvest to our list of investments.

A summary of the investment comebacks on the current Bitcoin Gambling sites held is tabulated below:

Bitcoin Gambling Comes back After three Months

If you have been following the posts from the commence of this experiment you will know that MoneyPot and Satoshi Dice have been very disappointing. If you have missed the last posts they are below:

Why Pull Out Of Satoshi Dice?

Even however other sites have been up and down, Satoshi Dice has been plane or negative the entire time. The Bankroll is well over Three,500 Bitcoins however the amount wagered over the last three months is approximately one thousand five hundred Bitcoins. With a house edge of 1.9% you would expect 28.Five Bitcoins in Profit over the three months and half of that for investors at 14.25 Bitcoins.

14.25 Bitcoins in profit from a bankroll of Trio,500 Bitcoins gives a theoretical comeback of approximately 0.4% or 1.6% over a year. Absolutely not worth the risk in our opinion. With no sign that the site will improve we determined to pull out of Satoshi Dice.

What Happened To Satoshi Dice?

Satoshi Dice was the very first successful Bitcoin business the team at BGR had become aware of. When Erik Voorhees was promoting the site and when it was eventually sold for 126,315 Bitcoins in early 2013, we had to delve further.

We were so affected by the site, its was provably fair (a game changer for online gambling), it had a low house edge and was the most popular Bitcoin site around.

Hop forward almost three years from the sale of Satoshi Dice and they have been overtaken by their competitors on most of the competitive advantages they had just three years earlier. Satoshi Dice has now become the Myspace of business – overtaken by competition and left behind.

Such a petite amount of Bitcoins get wagered with regards to the size of the bankroll at Satoshi Dice that the comes back real or theoretic, make it one of the worst Bitcoin gambling sites to invest in presently.

Today Satoshi Dice has the worst house edge of all Dice sites. It has been down for uncountable days over the last month as constant DDOS attacks question the security of the site. It does not even suggest investors and players 2FA which is the low tech requirement for security these days. To top it off the Customer service can be very slow and vague on the Bitcoin Talk Forums.

While our frustration is pretty demonstrable in Satoshi Dice in this post, the issues it is having are very lightly motionless and we used to love Satoshi Dice, so we want to see a switch! I’m sure most of the fixes to make it popular again could be done in a day and to make it one of the best Bitcoin dice sites around again, arguable within a month.

These would include making the house egde 1%, adding 2FA, add better customer service, and to get the big high rollers in, give investors the capability to leverage their investment (making the max win compare to other sites). Add some good old marketing and you have a solid Bitcoin gambling site again.

If anyone from Satoshi Dice is reading this article – think about it

Bitcoin Gambling Investments Three/12 Summary

Overall the total comeback after three months of 37.43% on a USD basis has been exceptional, even tho’ the third month was slightly down on the 2nd one (on a Bitcoin basis). With our latest portfolio switch removing Satoshi Dice and MoneyPot and adding Bitvest we believe we are even better placed for the next nine months of growth. That is assuming one of the sites does not go down!

Related video:

Bitcoin Fork: Things You Should Do Before one August, Buy Bitcoins

Без кейворда

1 August, 2017. If you are an avid Bitcoin user, you understand how significant this date is for Bitcoin. It is when Bitcoin developers, along with miners and users will be conducting the first-ever soft fork on the currency through BIP one hundred forty eight – User Activated Soft Fork (UASF).

The soft fork is more popularly referred to as the ‘Segregated Witness’, whereby a fresh rule is implemented onto the Blockchain – in this case, enlargening block size boundaries on the Blockchain to improve the speed of confirming Bitcoin transactions.

If you use Bitcoin regularly, or have Bitcoin either in your wallets or on exchanges, it must be noted there are things you need to do before this soft fork occurs on one August. Very first of all, it is significant that you don’t scare as you observe the potential cyber-battle inbetween the communities who support and do not support this soft fork. This may potentially affect the value of Bitcoin but we can never know for sure, we can only speculate. The value may rise due to improved security, swifter transactions, etc., or it may drop.

The potential cyber-battle inbetween these two communities is strapped to occur on various social media, forums, and news agencies. It is significant that you stay peaceful amidst the arguments, doubts, and the potential drop in Bitcoin’s value. Selling your bitcoins in funk would not help anyone. If you think you would commence to funk, just be sure not to hold more than you are willing to lose while all this is happening.

Blockchain Split?

However, this is not the real issue you should be worried about. The real issue is the fact that some wallet services might face problems during and after the soft fork. This is in regards to some miners not signalling support for the Segregated Witness, ultimately resulting in the separation of the blockchain into two different networks, bringing two very similar yet different cryptocurrencies much like Ethereum and Ethereum Classic.

Albeit, if majority of miners signal their support for Segregated Witness on or before one August, the update will be activated flawlessly and you wouldn’t have to prepare for anything at all. However, it is always good to be fully ready for something that you are not downright sure about.

Don’t Lose Your Bitcoins!

So far, no wallet services have given any kind of assure of what is going to happen after the soft fork so be sure to stay updated and budge your coins to your own wallet where you have utter control of your private keys. It is significant that you have total control over your own private keys; otherwise, there is a risk of you losing your hard-earned bitcoins.

This can be done through using hardware wallets, paper wallets, and/or regular desktop or mobile wallets. Here’s a list of some wallets which give you a utter control over private keys. If the chain ever splits and we end up getting two very similar yet different types of Bitcoin – the fresh and the old – be sure not to purchase, sell, or trade, any old or fresh bitcoins until the situation has been lodged. Keep up-to-date with Bitcoin news to ensure that it is safe for you to transfer your bitcoins.

To sum it up, be sure not to scare and stay quiet during and after one August, even in the event of the value of Bitcoin decreasing– this is totally normal and the market will stabilise eventually – as we have seen with Ethereum and its hard fork. Most importantly, recall to be in total control of your private keys before the one August by moving your bitcoins to your private wallets.

Related video:

Bargeld: Bitcoin statt Euro, ZEIT ONLINE

Bargeld : Bitcoin statt Euro

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  2. Seite Two — Wie sicher die Digitalwährungen sind, ist umstritten

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An U-Bahnhöfen und einigen Parkautomaten funktioniert es längst: Einfach Bankkarte einstecken, schon wird das Geld abgebucht und das Ticket ausgedruckt. Auch im Supermarkt oder im Klamottenshop wird bereits häufig mit Kreditkarte bezahlt. Nur beim Bäcker und beim Zeitungskiosk muss man noch nach Kleingeld kramen, und der Kellner im Café ärgert sich, wenn man nicht wenigstens ein paar Münzen für ihn liegen lässt. Ansonsten funktioniert unser Leben schon ganz gut ohne Bargeld. Und vielleicht werden wir uns schon bald daran gewöhnen müssen, dass es gar keine Scheine und Münzen mehr gibt. Den 500-Euro-Schein will die Europäische Zentralbank ab two thousand eighteen nicht mehr drucken. Außerdem prüfen einige Zentralbanken bereits, wie eine Zukunft mit rein elektronischem Geld aussehen könnte.

Aber was wäre die Folge? Geben die Zentralbanken künftig nur noch virtuelles Geld aus, in Form von Nullen und Einsen? Die würden dann von den Zentralbankrechnern zu den Bankrechnern tickern und von dort auf die Girokonten der Bankkunden gebeamt. Wer künftig am Geldautomaten steht, bekäme dann keine Banknoten mehr, sondern eine Ladung Bits und Bytes auf seine Karte gespeichert, die er von den Läden dieser Welt wieder heruntersaugen lassen kann. Die Zentralbanken müssten keine Scheine mehr drucken und mit Lastwagen im ganzen Land verteilen. Der Kunde hätte vielleicht auch weniger Arbeit und könnte seine Bankkarte womöglich sogar am heimischen Computer mit Kryptogeld aufladen, oder sein Handy, oder seine Smartwatch.

Es könnte ähnlich funktionieren wie beim Bitcoin, den es als Computerwährung seit sieben Jahren gibt. Rechner in aller Welt generieren Bitcoins mit einer speziellen Software. Indem sie eine komplizierte mathematische Aufgabe lösen, schicken sie ständig neue Einheiten dieser Digitalwährung in die Welt. Nur mit enormer Rechenpower lassen sich neue Bitcoins schürfen, und nach rund twenty one Millionen Bitcoins ist Schluss, das haben die Entwickler festgelegt. Derzeit sind rund fifteen Millionen Bitcoins im Umlauf mit einem Wert von umgerechnet gut sechs Milliarden Dollar.

Der Bitcoin ist nicht preisstabil

Jeder, der den Gegenwert laut aktuellem Umtauschkurs dafür bezahlt, kann sich ein paar Bitcoins auf seinen Rechner laden und damit in vielen Läden und Onlineshops weltweit bezahlen. Was die Digitalwährung für viele so interessant macht: Jede Transaktion wird über ein großes Rechnernetzwerk abgewickelt. Im Moment der Datenübertragung (also auch der Geldübertragung) tauschen alle Rechner anhand der winzigen Datenpakete, die auf ihnen abgelegt sind, Informationen aus und bestätigen, dass der Bezahlvorgang seine Richtigkeit hat. So ist garantiert, dass der Bezahlende über das nötige Geld verfügt und der Empfänger es auch bekommt. Blockchain heißt die zugrundeliegende Technologie – eine Art dezentrales, praktisch fälschungssicheres Logbuch aller jemals getätigten Transaktionen. Anders als oft behauptet ist Bitcoin kein anonymes Zahlungssystem. Aber immerhin ist es unabhängig von staatlichen Stellen.

Das wäre ein Euro-Bitcoin natürlich nicht, denn der würde von Zentralbanken ausgegeben. Eine wirkliche “virtuelle Währung” wäre er damit nicht, sagt ein Sprecher der Bundesbank. Den Euro gebe es ja auch ganz real. Konkrete Pläne für eine digitale Währung existieren bei der Bundesbank noch nicht: “Sie dürfte auch in naher Zukunft nicht zu erwarten sein”, so der Sprecher. Sollte allerdings künftig ein Digital-Euro auf Basis der Blockchaintechnologie angedacht werden, wären noch viele Fragen offen:

Wer sendet die digitalen Daten auf die vielen Rechner? Wer hätte Zugriff auf die Rechnerkette – wäre sie für alle offen und damit manipulationsanfällig, oder kämen nur ausgewählte Nutzer dran? Wer verwaltet die Daten und pflegt Änderungen ein? An solchen Fragen arbeitet man in Frankfurt: “Die Bundesbank befasst sich derzeit vor allem mit der zugrunde liegenden Blockchain- und Distributed-Ledger-Technologie, um eine mögliche Anwendung im heutigen Zahlungsverkehr besser bewerten zu können”, sagt der Sprecher. Mit der Technologie können Zahlungen sehr schnell abgewickelt werden – ohne Intermediäre wie Banken oder Börsenhandelsplätze.

Einen Knackpunkt sieht die Bundesbank aber bereits: “Notenbanken geben grundsätzlich Zentralbankgeld aus und zwar in Form von Bargeld (derzeit sind im Eurosystem knapp 1,1 Billion Euro in Umlauf) sowie in Form von Buchgeld (die Guthaben von Kreditinstituten bei den Eurosystem-Zentralbanken betragen quick six hundred Milliarden Euro).” Wenn die Notenbanken das Zentralbankgeld ausgeben, sind sie an die Regelungen des EU-Vertrages gebunden. Sie müssen unter anderem Preisstabilität gewährleisten, dazu haben sie sich verpflichtet. “Dieses konnte in den zurückliegenden Jahren auch erreicht werden. Im Gegensatz dazu zeichnen sich virtuelle Währungen – wie Bitcoin – durch starke Kursschwankungen aus, die eben keine stabile Wertentwicklung bedeuten”, schränkt die Notenbank ein. Die fehlende Stabilität ist die große Schwäche des Bitcoins, dessen Umtauschwert seit two thousand fourteen zwischen one hundred eighty und six hundred seventy Dollar schwankte. Für Deutschlands Notenbanker gibt es daher nur eine Schlussfolgerung: Eine digitale Währung auf Basis der Blockchaintechnologie könne nur eine digitale Variante der herkömmlichen Währung sein. Ein digital verarbeiteter Euro sozusagen.

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Banks are sold on blockchain, worried about collaboration, American Banker

Banks are sold on blockchain, worried about collaboration

Several ideas are emerging about the adoption of blockchain in the financial services industry that are fairly different than what anyone would have predicted two or three years ago.

The choices banks are making are steering financial blockchains in a direction that is far from the mysterious Satoshi Nakamoto’s conception of it, and closer to more traditional technologies out there today — a Google Docs of sorts for banks with immutability and security built in.

1. Things are moving quicker than expected; blockchain technology should be ready for broad use by banks within a year.

Only last spring, analysts were proclaiming that mainstream adoption of blockchain technology was ten years away. Following the fever pitch of blockchain chatter in 2015, observers expected two thousand sixteen to be the year where expectations were tempered.

But bankers and several other financial blockchain experts at a conference hosted by the Depository Trust and Clearing Corp. Wednesday referred to two thousand seventeen as the year of the blockchain pilot, and two thousand eighteen as the year blockchain technology will be used in production in financial services.

"To use a flying analogy, we’ve got the landing gear out and we’re preparing the final descent," said Emmanuel Aidoo, head of blockchain and distributed ledger strategy at Credit Suisse.

"All of us are focused on making this real in 2017," said Todd McDonald, co-founder and chief operating officer of R3, a bank consortium that has developed a “blockchain inspired” platform called Corda. “We all need to make this real this year into next.”

The list of financial blockchains in or close to prime time is growing.

Digital Asset Holdings, the blockchain technology company founded by former JPMorgan Pursue executive Blythe Masters, plans to have a blockchain product ready for banks to use by the end of 2017, said Chris Church, its chief business development officer.

Northern Trust recently went live with a blockchain for private equity funds, based on technology from the Linux Foundation Hyperledger Project and IBM.

“I believe two thousand seventeen is the year we see live networks versus proof of concepts,” said Jerry Cuomo, fellow and vice president of blockchain technologies at IBM. “I think we’re eyeing the real evidence that blockchain is not going to come, it’s here.”

Microsoft’s Blockchain as a Service, a set of blockchain building blocks that runs on the Azure cloud, is also market ready. Bank of America has been using it to create a blockchain to automate trade finance.

JPMorgan Pursue has developed a blockchain called Quorum that’s based on Ethereum.

In February, the DTCC ended a distributed ledger proof of concept with Digital Asset to better manage the netting process for repurchase agreement transactions. The DTCC also plans to shift its Trade Information Warehouse, which keeps records on derivatives contracts, to a distributed ledger in collaboration with IBM, R3 and other fucking partners.

Two. Bankers see blockchain technology mainly as a way to save money.

It’s not surprising that bankers would want to save money. Most have to reduce their cost and efficiency ratios to get through and stay in regulators’ good graces. But when you think about the original premise of the blockchain — a means of recording anonymous digital currency transactions that would circumvent the traditional payment system and pass under the radar of the government, this is a leap.

Credit Suisse, for one, has conducted ten proofs of concept with blockchain startups to achieve cost reductions.

"We tend to look at projects that can give us, if I’m being fair, 50% or greater cost reductions," Aidoo said. "If I’m being more pragmatic, it’s more like 35%. Anything less than that doesn’t warrant execution."

Northern Trust, which has done twenty proofs of concept for blockchain technology and recently went public with its blockchain for private equity funds, also concentrates on streamlining, which would lead to cost cuts.

“We determined to embark on a mission to improve efficiency,” said Justin Chapman, global head of market advocacy and innovation research at Northern Trust.

During its earlier stages, there was hope that blockchain could be a way to to suggest fresh products and services and automate certain things, like supply chains and international remittances, that in the past couldn’t be digitized with one technology. While some are still pondering revenue opportunities on blockchain, the promise of efficiency is what is driving bankers’ interest today.

Three. The idea of "permissionless" blockchains has pretty much been dropped by the industry.

Looking back at blockchain developments over the past year, Church at Digital Asset Holdings said the financial world agreed to abandon the idea of permissionless distributed ledgers. In other words, blockchains anybody could join. Banks have gravitated toward permissioned blockchains that can only be used by those who are invited — say, counterparties to derivatives contracts or trade finance playmates.

"The permissioned environment is going to prevail because it meets the requirements of this marketplace," Church said. "That was a very significant intellectual understanding people got to."

Four. Integration/collaboration is the fattest perceived hurdle.

Asked what presents the greatest challenge to blockchain adoption — data security, privacy, scalability, business case or integration — about half of the DTCC conference audience picked integration. Last year at a similar conference, about a third of the audience chose this option. Integration in this context seems to mean the capability to work with other banks’ and partners’ blockchain technology.

“Interoperability is key: if you look at visible challenges, privacy and scalability are solved,” Church said. “If you do get interoperability, which will require collaboration, all sorts of things become possible. If you have a single source of truth, services can be built off of that, and there’s a giant market chance. Cross processes permit fresh products and services to be created.”

Aidoo noted that privacy is still tricky, because even with a permissioned, invitation-only blockchain, there can still be certain data elements not everyone on the chain should see.

“We talk about public versus private blockchains, but it’s more complicated than that,” he said. For example, the “Chinese walls” Wall Street firms have to maintain mean people in some parts of the organization should not be able to access certain information.

Aidoo also voiced anxiety about collaboration. “I worry about execution risk, meaning things like, do we have the right playmates, do we have the right ecosystem, do we have the right playmates from a collaboration perspective?” he said.

One thing many agree on: Blockchain technology is inescapable for this industry.

“This is not going to stop,” Aidoo said. “This technology will be as pervasive as SQL servers and databases.”

Related video:

AgriDigital pioneers blockchain use with very first farmer-buyer agriculture settlement – The Barrel Blog

AgriDigital pioneers blockchain use with very first farmer-buyer agriculture settlement

History was made on December 8, 2016, when Australian wheat grower David Whillock delivered 23.46 mt to Fletcher International Exports in Dubbo, Fresh South Wales. The transaction was lodged through blockchain, the technology underpinning emerging cryptocurrencies such as bitcoin. And Whillock got his payment instantaneously: a global very first inbetween a grower and a buyer for the agriculture industry.

Blockchain technology is a secured database permitting numerous independent parties to share information and trade using the synchronized and collective ledger.

The deal was “auto-executed” by a brainy contract run by commodity management platform AgriDigital. This brainy contract performed a series of tasks, including valuing the delivery, verifying that the buyer had sufficient funds, and securing the funds in the grower’s name pending delivery.

— Emma Weston, Total Profile CEO

Once the grower made the physical delivery, the title for the grain was transferred to the buyer as the grower’s payment was at the same time created from the reserved funds.

The transaction was done as part of a live pilot, during which AgriDigital was connected to a multi-node private Ethereum blockchain network.

Across the process AgriDigital managed the knots, acting as operator, buyer, and regulator, to create an example of ecosystems that may occur a lot more frequently across commodity markets in the future.

In an interview with S&P Global Platts, Emma Weston, co-founder and CEO of Total Profile, which possesses and operates AgriDigital, talked about this groundbreaking deal and its implications for commodity trading.

Q: What are the main benefits of using blockchain technology for Agri-markets as a entire?

A: Blockchain has the potential to convert the entire agriculture industry.

For a sector that employs 40% of the global workforce, the benefits to be gained from applying distributed ledger technologies are enormous. In particular, blockchain has fat potential in three key areas of the agriculture industry:

1. Provenance and radical transparency

Two. Mobile payments, credits, and decreased transaction fees

Three. Real-time management of supply chain transactions and financing

De-risking the agri-supply chain through real-time settlement of physical commodity transactions has broad benefits for all participants by enlargening efficiency, trust and security.

For growers, blockchain technology provides enormous benefits by providing swift and secure payment.

Typically, payment terms in the Australian grains industry range from two to five weeks, and it is these terms that pose counterparty or credit risk to growers. The elimination of this risk means growers can be secure in their cash flow and better manage their businesses. For buyers, blockchain offers both back office and liquidity benefits.

AgriDigital offers workflow automation (via brainy contracts and integration with key machinery and data collection points such as weighbridges and quality testing instrumentation) as well as auto-reconciliation for inventory, which poses high cost and risk to buyers. Buyers are also reliant on various supply chain finance forms to ease their working capital needs, particularly in high transactions periods like harvest. Blockchain enables more limber supply chain finance options that operate in real-time.

Automation of accessing finance and instant payments are vast improvement on current manual processes and slow turnaround times. An extra benefit of the distributed ledger model is improved access for regulators, quasi-regulators and authorities. Levy and royalty collection and remittance with transparency to the relevant data in respect of those payments is a significant problem that we are now able to solve.

Ultimately, the entire agri-supply chain will have access to verified data on each commodity, meaning consumers can trust where their food comes from.

Q: Can these benefits be repeated in other global commodity markets?

A: While we are presently focused on the grains industry, we have designed our solution to be both cross-commodity and cross-geography. We have instantaneous request from the grain and livestock industries and we are also observing request from aquaculture, horticulture, cotton and wool sectors — the request is global.

We are going to see more and more novel applications of blockchain and blockchain-inspired technologies in the agricultural sector from both incumbents and startups. In 2017, it is likely we will practice the rise of the supply chain use case more generally with enlargened experimentation in this area. We have already seen a lot of concentrate from banks and technology providers in this space and we believe this will increase.

Q: Can you see any obstacles to its deployment across commodity markets?

A: The practical application of blockchain technologies presently relies on integration with existing commodity management software to facilitate the transactions and provide user interface.

Presently, many participants rely on older, legacy software with limited functionality and inter-operability.

Innovative commodity management software solutions are critical to deploying blockchain technologies. We are focused on developing user-friendly interface for ease of adoption, minimizing any need for switch in behavior and mapping our technology solutions to the physical environment — for example with existing infrastructure and commodity life cycles.

More generally, but of critical importance is the influence of regulatory and other market uncertainty. We are committed to continuing our stakeholder engagement in an effort to address these uncertainties and to build pathways for mutual understanding and cooperation around technology standards, governance models and cross-border compliance.

Q: How does your business interact with physical supply chain operators?

A: AgriDigital is designed as a platform for all supply chain participants, and site operators such as bulk treating companies are already able to act on the platform. Freight and inspection services will be incorporated in the future.

Q: Are transactions lodged via blockchain confidential?

A: While the transactions happen in plain glance, each counterparty’s data is encrypted so the content and meaning of it can be downright obfuscated.

Confidentiality of certain transactional data is significant to many of our users and so this is an area we proceed to investigate. There are also blockchain technologies that permit only counterparties to view the information.

Q: Are counterparties required to use bitcoin to trade?

A: For the AgriDigital pilot, however transaction settlement occurred via a distributed ledger, ultimately the grower received payment in local currency (in this case Australian dollar) to its nominated bank account. The settlement on the distributed ledger created a message file to the bank to make the payment using traditional methods on a same-day basis. The initial treatment we have taken, permits for ease of adoption and there is no need for users to hold a cryptocurrency. With the advent of digital currencies that are fiat backed or issued by central banks, we anticipate that smoother settlement and payment methods will be built out in AgriDigital.

Q: What are your plans for expansion?

A: We plan to execute a similar pilot in the Canadian grains industry in two thousand seventeen and expand into other commodities. We have deliberately commenced at the beginning of the supply chain with our farmers. It is crucial that the primary transaction in the supply chain be accurate and validated to ensure informational integrity as the commodity passes through the chain.

Our concentrate in two thousand seventeen is on expanding AgriDigital in the Australian and Canadian grain markets, building our financing platform, and, commercializing the blockchain component of our solution. Beyond this, we will be investing our efforts in provenance, coming in the global markets and other commodities.

Applications for blockchain are becoming clearer as use cases and tailored solutions begin to emerge around the world, with the aim of helping trade become quicker, cheaper and more efficient.

The highest profile case is Swiss trader Mercuria, which is working on the settlement of a large oil transaction with ING and Societe Generale, Reuters quoted Mercuria CEO Marco Dunand in Davos last month.

Cotton trading platform The Seam announced in January that it was working with IBM to “lead an industry-wide collaboration initiative” to create a supply chain and trading ecosystem based on blockchain. This budge comes hot on the high-heeled shoes of a blockchain-settled trade inbetween Wells Fargo and Commonwealth Bank of Australia for a shipment of cotton from the US to China in the final quarter of 2016.

Another Australian startup, Blockfreight, is aiming to bring similar efficiencies to global container freight markets.

Improved cargo traceability through blockchain could help avert fraud such as the Qingdao port scandal, where in two thousand fourteen real or imagined physical volumes of copper, alumina, steel and other metals where used as collateral for numerous loans.

Trading practices can be slow to switch in some of the more conservative commodity markets, but given the range of applications that blockchain offers, it is hard to believe that it won’t play a role of some sort in the near future.

Related video:

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our purpose is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol commenced running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, tho’ it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, tho’ its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also commencing to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good mitts.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A contraption for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services commenced pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also witnessed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a powerfully regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must conform with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a gargle to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly ruinous to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people embarked realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our objective is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol began running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual directive prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services began ripping off bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also spotted the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more earnestly but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly disruptive to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a gargle to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it flawless for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an gig of the “The Good Wife” that focused on bitcoin.

Other consumer services were also kicking off to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street began in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen spotted hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deep-throat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People commenced talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual guideline prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Three and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year eyed the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good forearms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street embarked in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A device for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen eyed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents demonstrate it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people commenced realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a deepthroat to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking gravely about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

Related video:

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken gravely, I invest a significant amount of individual money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other palm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been utterly similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a enormous factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not enormously yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a simpleness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a hefty amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my individual thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most elementary way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Reminisce to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for bearing discomfort.

The article has been translated: На русском

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken earnestly, I invest a significant amount of private money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other arm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been enormously similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a hefty factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not utterly yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a plainness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a big amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my private thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most plain way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Recall to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for suffering discomfort.

The article has been translated: На русском

Related video:

Five Ways Theme Parks Could Embrace Blockchain (And Why They Should)

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Jegar Pitchforth is a statistician, data scientist and blogger with a background in sophisticated systems analysis.

In this opinion chunk, Pitchforth takes a tour of potential blockchain applications in the theme park industry, presenting five ways the summer entertainment staple could improve by using the tech.

The theme park world has been known to embrace all forms of fresh technology, from virtual reality in rails to recommendation systems on mobile apps and the touchless payment technology that now pervades all major theme parks globally.

But while the methods of delivering the theme park practice are as advanced as they come in any industry, the systems behind all of it are sorely lacking. The practice of booking tickets and organizing the visit is often a lot more strained than it needs to be, and anything that minimizes this process is likely to be well received.

Meantime, the digital world is undergoing a switch in the way it stores information and makes financial transactions. A technology known broadly as ‘blockchain’ is gaining more and more attention amongst development circles, and it promises a fresh way of interacting with data altogether free of server costs or security issues.

You’ve most likely heard of the very first major application of the blockchain known as bitcoin – an entirely digital currency given value by those who use it.

But for all the hype you’ve heard about bitcoin, this is only the very pointy peak of a continent-sized iceberg. The next iteration of cryptocurrency is called ethereum, and its applications to the theme park world are far ranging.

1. Ticketing

Ticketing is very likely the most demonstrable application of the blockchain to the operations of theme parks. There are already a range of interesting ethereum-based ‘dapps’ that promise ticketing services for music festivals and concerts at a fraction of the price.

Because the blockchain only ever permits one copy of a digital property (such as a ticket to a theme park), users can have a password-protected wallet on their phone that contains the digital tickets signed by the park which are scanned at the gate, at which time the payment transfer is finalized inbetween the guest’s wallet and the theme park’s.

No ID, no paper tickets, just a secure decentralized system approved by consensus.

What’s more, these digital tickets don’t have to be bought all at once or even by the same person. A guest who knows they want to go to the park a year out can make a promise to buy a ticket, which they can then pay off at their will over the remaining time they have. The blockchain can lightly store the payment history of the guest without any specific human approval or oversight.

Now that your tickets are digital assets that you don’t need to keep an eye on, you can pretty much permit people to do whatever they want with them.

Ethereum has the capability to run ‘brainy contracts’ (executable code with instructions to carry out deeds based on specific triggers), so any time someone sells on your park’s tickets at a profit you can get a cut. Say you take 50% of any resales as part of the contract when you sell the ticket. On popular days that ticket might go through any number of arms, and you are making money each time without any effort, while also permitting others to make money from their good predictions.

Two. Fastpass tracking and interchanges

Similar to theme park ticketing, fastpass tickets for rail queues like this one at Universal, or the equivalent at Walt Disney World can be entirely managed through wise contracts, providing them much more plasticity than the current systems.

The current system has a entire range of books and forums dedicated to how to game it, with people spending hours attempting to get the best rail times and cover the rest of their dearest rails through careful planning. It surely doesn’t need to be so tense.

What if everything switched over to a bidding system with every guest given equal chance to begin with?

You could provide guests with some tokens to spend on fastpasses when they buy a ticket, then use a demand-based system for the token cost of each rail in the park. The xxx fans can spend all their tokens on the newest rail at the most popular times, while the kids can spend theirs on railing the Jungle Cruise for the five-millionth time.

Now that you’ve established a within-park market for rail times, there’s nothing stopping you from selling extra tokens to guests buying premium packages, or to their relatives wishing them a good holiday.

The cool thing about this is that you get a lot more information about which rails people indeed wished to go on, because you can track the ‘price’ and witness them trading with each other. This would let you embark improving your recommendations to them, providing them indications of rails they might like and good times to rail them that suit their intended schedule.

Trio. Create a theme park currency

You can very likely see where all this is heading: a theme park currency that can be used at any of the park owner’s subsidiary and affiliate businesses.

A majority of people that visit premium parks now download the app before they go so they can organize their day and use the map. It’s not a good step for that app to become a digital wallet that visitors can use in your parks, stores and even online platforms. What makes this a digital currency rather than the old-school version of ‘park dollars’ is that these could be exchanged back into local currency anywhere someone wants to set up an exchange.

On its own, the prospect of having a future corporate currency that could be more stable than many local governments is interesting, but the instant benefits are still compelling. Once you transfer your ticketing, fastpasses, merchandising and digital distribution payments through one channel that doesn’t require a bank, your accounting all of a sudden becomes a lot simpler.

The concept is especially arousing for larger brands who may not have a park, but do have a store in a particular country.

The park currency can be used in all these stores without having to make special banking or business arrangements, permitting for much quicker expansion into fresh markets. With amazingly low transfer costs inbetween countries, theme parks that embrace blockchain would be able to capitalize on the post-visit practice much more effectively.

Four. Audience surveys with meaning

One of the most popular early uses of the ethereum cryptocurrency was as a voting system. Rather than a ‘one person one vote’ treatment, The DAO (the earliest manifestation of an ethereum organisation) used a share-based system where those with more coins had more vote.

While this may not be exactly what you want for your theme park, having a good skill of what the highest spenders in your park are looking for is a useful thing.

On top of that, you might also see a groundswell of grassroots support from lower-spending guests (like Universal witnessed with the opening of Harry Potter worlds in Florida), which would give you an indication that you need to build a rail with high throughput that doesn’t need a lot of stores nearby.

Whatever the outcome, an audience survey with the answers weighted by how much they have invested in your company is a lot more useful than standing around on corners asking people how they feel about things.

Five. Turn everyone into an ambassador

Once you have your audience used to using your park’s currency, and it’s gained some value, there’s more and more benefit to suggesting what are essentially cash prizes for advertising and information about your park.

This could be as basic as forwarding coins to a wallet linked to a Twitter account that posts lost of very retweeted content, or as sophisticated as real-time prizes for advice about park waiting times, incident reports and events. There are already dozens of forums online vying to be the accomplished of one park or another, why not bring it all into your own app ecology and prize your guests for their effort?

You could create ‘flashmobs’ in the park with your most loyal fans by incentivizing them with tokens, as could any guest with enough tokens and approval from the park’s digital protocols. There is no end to the ways people could build secondary and tertiary businesses around your brand, and with the right protocols you wouldn’t need to spend a cent on protecting it.

There’s a massive range of ways which theme parks can use blockchain technology, and it’s titillating to imagine what the future might hold.

What other ways could theme parks use blockchain technology? Or should they be looking at this at all? Let us know in the comments below.

This article originally appeared on the author’s blog, and has been republished here with his permission.

The leader in blockchain news, CoinDesk strives to suggest an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions voiced in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

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