A new European Parliament draft report on digital currencies calls for the creation of a task force specifically devoted to the technology.
Incumbent payment companies are becoming the latest firms to attempt to catch the blockchain bandwagon.
The head of Australia’s top securities watchdog said earlier this month that blockchain technology will have “profound implications”.
Bitcoin Classic is an implementation of an alternative Bitcoin protocol that would cause a hard fork with a 75 percent activation threshold in order to increase the block size limit from 1 megabyte to 2 megabytes.
During the interview, Andresen said Bitcoin Core developers are not listening to miners and the entities that are creating many of the transactions on the Bitcoin network. He also discussed his future plans as a developer in the Bitcoin ecosystem.
The Market Will Decide What’s Best
Coinbase CEO Brian Armstrong has routinely referred to the Bitcoin Classic vs. Bitcoin Core debate as an election, and Andresen appeared to agree with this sentiment during the interview. In terms of the possibility of Bitcoin Classic taking over as the reference implementation of the Bitcoin protocol, Andresen noted:
“The market will decide. That’s kind of where the rubber meets the road with Bitcoin is what software people decide to run.”
Although it’s practically impossible to operate Bitcoin as a direct democracy (and may not be a good idea), support for changes to the consensus rules are often measured via miner support. Miners can broadcast their support for a particular change via a coinbase transaction.
Is Bitcoin Core Listening to Its Customers?
When asked about his main disagreement with the rest of the Bitcoin Core development team (which Andresen is still technically part of), the Bitcoin Classic developer talked about Core’s unwillingness to listen to its users. He stated:
“The root of my issue with [Bitcoin] Core is I just think that they’re not listening to their customers. I don’t think that they’ve been listening to the miners, and I don’t think that they’ve been listening to the people that do the bulk of the transactions on the network.”
The idea that Bitcoin Core is not listening to miners seems somewhat debunked based on the recent Bitcoin Roundtable meeting in Hong Kong, though it should be noted this took place after Andresen’s interview on Let’s Talk Bitcoin was recorded. As a result of the meeting, representatives of roughly 80 percent of the network hashrate were able to come to consensus with a handful of Bitcoin Core contributors on a future hard fork to increase the block size limit. It should be noted that it is unclear whether the agreement from the Bitcoin Roundtable will also reach consensus among the rest of the Bitcoin Core development team.
The level of communication between Bitcoin Core and some of the main creators of Bitcoin transactions, such as Coinbase and Blockchain.info, remains unclear, although Blockstream President Adam Back has publicly invited Coinbase CEO Brian Armstrong to the upcoming Satoshi Roundtable, which will have a few Bitcoin Core contributors in attendance.
Companies Taking Matters Into Their Own Hands
With support from Coinbase and Blockchain.info’s Peter Smith, Bitcoin Classic could be an example of these companies taking matters into their own hands. Andresen hinted at the unrest among some Bitcoin companies during his interview:
“We’ve long said that if companies aren’t happy with what Core is doing, then they should either get developers involved in Core or they should start their own projects. And I think companies haven’t been happy with the direction Core is going and haven’t been happy with the priorities that Core has set — as expressed by, kind of, the code that they’re producing.”
Andresen mentioned that exchanges and wallet providers are some of the loudest proponents of larger blocks due to the way the issue is negatively affecting their companies right now. Indeed, Coinbase CEO Brian Armstrong has been a major supporter of Bitcoin Classic on Twitter and Medium.
Andresen Ready to Contribute to All Bitcoin Projects
When it comes to Gavin Andresen’s own plans for the future, it appears he’s ready to help any Bitcoin project, including Bitcoin Core. He explained:
“I’m happy to contribute to lots of different projects. I think my contributions will wax and wane based on whether I’m researching some interesting new area of computer science that catches my eye or am I done researching and I decide that I actually want to write some code people might actually decide to use.”
Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow@kyletorpey on Twitter.
The post Gavin Andresen: Bitcoin Core Is Not Listening to Its Customers appeared first on Bitcoin Magazine.
This article is by Rebecca Campbell.
In a lawsuit that has dragged on since September 2014, the Kansas-based Bitcoin company presold computer hardware that was optimized for mining Bitcoin, charging as much as $30,000 for the specialized hardware.
According to the U.S. trade watchdog FTC, Butterfly Labs was taking orders for Bitcoin mining machines, but very few machines were actually shipped, as Butterfly Labs was building and using the hardware to mine bitcoin for itself. In the few cases that the machines were shipped to customers, they had already been used by the company beforehand, generating valuable bitcoin for Butterfly Labs instead of the customer who had already paid for the hardware.
The charges filed against Butterfly Labs include that it failed to disclose to customers that it was using the machines, and that it kept upfront payments from customers even when it failed to deliver the hardware.
“BFL tested equipment on the live network generally from less than two hours to two days in the event units were in production over a weekend,” Butterfly Labs said in a statement. “This insured that customers received reliable and working equipment avoiding unnecessary down time. Customer shipments were not delayed for burn testing.”
After the FTC received 500 complaints from customers who failed to receive their orders, Butterfly Labs was temporarily shut down. It is alleged that the company took around $50 million in orders it failed to deliver. As a consequence, the FTC obtained a court order freezing the assets of Butterfly Labs in 2014. The company was later reopened following court approval in 2015. Despite this, BFL says that it successfully engineered, manufactured and shipped more than 50,000 Bitcoin machines through five product generations over four years to thousands of customers.
In a bid to wrap the case up and to provide refunds to customers, the FTC has forced the company into a $39 million out-of-court settlement. However, that out-of-court amount will be suspended once the company pays $15,000 and co-founder Sonny Vleisides pays an additional $4,000. Darla Drake, Butterfly Labs general manager, will also have her judgment of $135,878 suspended once she surrenders the cash value of all bitcoins she attained using machines from the company.
But while the judgements were suspended based on the defendant’s inability to pay, they will become due should the defendants be found to have lied about their financial situation.
“Even in the fast-moving world of virtual currencies like Bitcoin, companies can’t deceive people about their products,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “These settlements will prevent the defendants from misleading consumers.”
It has been alleged that the three named members of Butterfly Lab’s board of directors – Drake, Nasser Ghoseiri and Vleisides – spent millions of dollars of the company’s revenue on non-business expenses such as guns and saunas instead of focusing on many orders from customers that were delayed or unfulfilled.
Furthermore, amid the alleged fraud, Butterfly Labs has been accused of printing foam pitchforks to make fun of its intensely frustrated customers.
Helen Wong, an FTC attorney said:
“…instead of fulfilling orders immediately, Defendants used their customers’ machines to mine bitcoins for themselves before shipping the now-used machines to their customers. … Further demonstrating Defendants’ disregard for their customers, they used corporate funds to make and mass order red foam pitchforks mocking their own customers, emblazoned with the words, “Y U NO SHIP – BFL IS LATE!”
While the company is operating, the settlement with the FTC means that the defendants have been prohibited from making any misleading claims about their Bitcoin mining products in the future and are banned from taking upfront payments from customers unless the products are available and will be delivered within 30 days. If they fail to do this, they must provide a refund.
Butterfly Labs continues to dispute FTC’s suit and is focusing on refunding customers.
“BFL continues to believe that the FTC case had no merit, but agreed to settle for $15,000 to avoid ongoing litigation expenses and conserve remaining assets for payment of refunds to consumers,” a BFL spokesperson stated.
In a statement from January, Butterfly Labs claims to have “insufficient funds to pay out all refund requests at the present time.” That same statement goes on to say that in 2014 and 2015 the company had refunded a total of $16.6 million to customers; however, a lack of finances at present had significantly impacted paying refunds.
The post Bitcoin Mining Company Butterfly Labs Settles Case With Federal Trade Commission for $38.6M appeared first on Bitcoin Magazine.
On March 5th and 6th, the MIT Bitcoin Club is hosting its annual Bitcoin Expo in the Samberg Conference Center on the MIT campus. It is the largest annual project undertaken by the club and is one of the only academic Bitcoin conferences run entirely by students.
World-renowned speakers will be in Cambridge, Massachusetts for the event, including Shual Kfir, CTO of Digital Asset Holdings; Joseph Poon, co-author of the Lightning Network; and Jonas Schnelli, one of the Bitcoin Core developers.
The club’s mission is to “provide forums where Bitcoin-related ideas, projects, programs, events, and businesses can be studied, discussed and developed,” and the Expo is an extension of this goal. It creates a forum that brings together an international community to study the technology and discuss future implications.
Bitcoin Magazine spoke with Nchinda, a third-year computer science student who is the president of the club and the executive director of the conference, to provide more details about the event.
When asked about the goal of the event, Nchinda explained what makes this annual expo unique:
“The expo is not a mishmash of related concepts, there is a definite function to its form. There are three things that make the MIT Bitcoin Expo a different experience from other Bitcoin conferences I’ve seen:
1) It is a product of a 100 percent student-run organization. It is an academic event, and we don’t seek a profit off of it; we raise only as much as we need.
2) Tickets are cheap compared to most other conferences. We don’t want money to be a barrier to entry. Last year, student tickets were free, this year I’m trying out the idea of ticket refunds in Bitcoin.
3) There is no cost to become a speaker. This is something I am very firm on; no amount of money can buy you a position as a speaker. We ask speakers to comepro bono, which creates an interesting meld of established companies and fledgling startups.”
Nchinda explained that the theme of the first day of the Expo is primarily technical.
“I want to start the Expo by looking at the challenges that Bitcoin is tackling. Then we’ll move to related work inspired by Bitcoin. Bitcoin development has many parallels to the development of Internet, so Day One closes with looking at the relationship between the two.”
Nchinda continues that Day Two will move into the financial and business aspects of blockchain technology.
“The sequence moves through examining the relationship between Bitcoin and traditional finance. We’ll recognize the effort put in by financial companies to understand and develop blockchain technology. By the end of the afternoon we’ll leave most of the technical discussion behind and attendees will get a dose of speculation on the future.”
The MIT Bitcoin Club has been consistently leading grassroots movements to grow Bitcoin adoption on campus and is one of the most active chapters in the Blockchain Education Network. In 2014, the club hosted the first Bitcoin Airdrop, which they called the MIT Bitcoin Project, after they raised $500,000 to give out $100 to every incoming freshman. It also launched the MIT BitComp to inspire and motivate MIT students and alumni to develop Bitcoin-related apps, with $15,000 in prizes that were awarded to the most impressive projects.
Nchinda is encouraging club members to promote Bitcoin and related technologies from whatever angle interests them, whether from the perspective of finance, mining, cryptography or marketing.
The post MIT Hosts Annual Bitcoin Expo March 5 and 6 to Explore Challenges Facing Bitcoin appeared first on Bitcoin Magazine.
The US government now believes a corrupt Secret Service agent may have stolen additional bitcoins during the Silk Road investigation.
Bitt has launched a blockchain-based version of the Barbadian dollar it hopes will appeal to the country’s underbanked.
The Vanbex Report is a periodic summary of the blockchain industry’s top news stories from the biggest companies, as well as the most promising newcomers.
The ‘one currency to rule them all’ debate has existed ever since the first set of altcoins — Bitcoin alternatives — started appearing in the digital currency ecosystem.
Also Read: IBM Joins with Linux Foundation’s HyperLedger Project to Advance Open-Source Blockchain Tech
The typical argument ranges between the necessity, or not, to further decentralization through incorporation of altcoins. Bitcoin enthusiasts rely on the cryptocurrency’s infrastructure as the single most important reason why no other digital currency could rival it.
However there’s another, more organized, surmounting challenge: Governments, worldwide.
As the past week of news and headlines illustrates, banks and governments are pursuing, or have already pursued, their own digital currencies. If this doesn’t present a greater threat to Bitcoin’s existence or subsistence than anything else, it should.
Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, revealed a couple of weeks ago that it was developing its own digital currency called MUFG-coin, which went on trial in fall. Attached to it will be a smartphone application also nearing its completed state.
Similarly, China’s central bank the People’s Bank of China (PBoC) revealed in late January it too is considering issuing its own digital currency, with no particular timeframe but specific wants and qualms (see news story below).
In addition, countries have exhibited the wherewithal to push ahead of the digital curve, in particular, Ecuador. The South American nation of over 15 million citizens pioneered the national adoption of digital dollars in December 2014.
As reported in TechTimes.com, the system is not complicated , “People can simply walk into participating banks and exchange their money for electric currency, which is storable on their smartphones. That currency can then be used to purchase goods or services.”
There are also whispers that Mexico may be developing its own digital currency, a digital peso. As well as the Phillipines’ and its discussed “e-Peso” to be used in online exchanges. Both are also rumoured to be used in conjunction with blockchain technology.
With financial sectors as well as administrations across the globe continuing to explore blockchain technology, the pursuit of a digital evolution in finance, commerce and more is on.
To anti-establishment folk this shouldn’t grate at the prospects for Bitcoin, but to those that hope the cryptocurrency will push into even greater mainstream use, these developments, especially in the wake of Bitcoin’s civil war, should be alarming.
Bitcoin currently sits atop the pyramid in terms of digital currency market cap at around USD$6.5 billion. In other words, one Bitcoin (BTC) is worth about $434 U.S.
Centralized efforts as seen in Ecuador and developing elsewhere around the world increasingly undermine the value of BTC as a legitimate currency, pushing it into the realm of commodities, to be traded like gold or iron (an argument which could also hold some sway under current conditions).
The underlying technology of Bitcoin, the use of a decentralized network that successfully achieves consensus without a central authority, i.e. the blockchain, must be held separate in value to Bitcoin as money.
Money is a medium of exchange to trade for goods and services; must hold some store of value. Volatility is duly problematic in a currency.
With governments developing their own currencies, what value will there be, besides black market use, to possess Bitcoin or any quantity of altcoins?
Presumably, payment for work, goods and services will all be conducted using the centrally regulated national digital currency. The desire, the need, to possess Bitcoin will diminish in the face of digital currencies that possess similar, if not identical, qualities.
Add to that the factor of a centralized, government-backed digital currency to afford a greater level of stability and trust, and it grows difficult to see ordinary citizens wishing to flock to the unregulated counterpart(s).
The worth of currency, like any other good or service, is predicated on the demand and pursuant supply. But demand is crucial to prescribing value.
At the moment there is no other currency that can match the value and infrastructure Bitcoin provides. It has value, as a currency, because you can buy goods and services discreetly, and as an investment capable of converting into “real” currency.
But this can all be rearranged, reordered.
If governments like China, Ecuador and others, move to provide the same convenience and security as Bitcoin affords digital users, and then tie it to widespread, government-approved use there would be little point to possess unregulated or “convertible” virtual currencies save for anonymity or for illicit purposes.
See the trend?
Currencies that are subject to volatility and with no economy, no government, and minimal regulation behind it will be a hard-sell if there are more trusted and secure alternatives.
This would likely contribute in reducing BTC’s value as a currency and perhaps as a commodity.
Further to even suggest Bitcoin as a widespread currency would mean deflating its value because of the current supply constraints placed on the currency. While money supply presents its own set of issues, the limited supply of Bitcoin does as well.
So the current divide in Bitcoin’s development must reach consensus because copycat governments can and are seemingly shifting the balance and discussion from the traditional to digital. In order to survive the Bitcoin community needs to come to an agreement.
The only certainty, invest in hardware wallets, because digital currency is coming, but just like driverless cars, the most popular make and model is yet to be seen, and Bitcoin could play a role, but that role needs to be defined, and quick.
Here were some top news stories from this past week:
China Eyes Digital Currency
PBoC not too enamoured with blockchain tech of today
The PBoC opened up on its initial January 20 announcement in an interview with Caixin Weekly last week.
Governor Zhou Xiaochuan said mobile payments were being considered, cloud computation, secure chip and blockchain tech as a means to create and operate an electronic cash network.
However, Xiaochuan indicated that blockchains today consume “too many resources” in terms of computation and data storage not capable of handling desired transaction volumes, as reported by fintechlab.com.
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Arlington, VA – (Marketwired – February 23, 2016) – BTCS Inc. (OTCQB: BTCS) (“BTCS” or the “Company”), a blockchain technology focused company which secures the blockchain through its transaction verification services business, released a Letter to Shareholders updating current activities and outlining its corporate strategy for 2016, as follows:
Over the past few months, several major investment banks have published research foretelling the significant potential for blockchain technologies to revolutionize industries on a massive scale. Recognizing this potential, much of our work in 2015 focused on building a strong operational foundation to capitalize on the rapidly-evolving blockchain opportunity.
Despite many successes in this effort, our stock continued to decline throughout 2015 and is now trading near its 52-week low. As a significant shareholder myself, I too am feeling the pain of our low stock price, and I firmly believe it is not representative of our accomplishments or potential.
BTCS originally began operations focused exclusively on the Bitcoin ecosystem, and while our revenues today are generated from securing the blockchain through our transaction verification services segment, we plan to evaluate broader opportunities in blockchain consumer solutions. As noted in recently published research from Goldman Sachs, the real opportunity lies in the underlying technology of Bitcoin, the blockchain. Referred to as the golden egg by analysts at Goldman Sachs, the blockchain can not only live outside of Bitcoin, it has the potential to streamline a multitude of businesses.
We believe the work we completed in 2015 has established us as an early mover in this burgeoning market opportunity, positioning us for strong shareholder value improvement in the quarters and years ahead as the use of blockchain technologies begins to revolutionize standard business practices.
Our current transaction verification operation touches every blockchain transaction. Even after doubling our server processing power in January of 2016, we’re currently using just 33% of the expanded power capacity we added in July 2015. The foundation to rapidly scale our operations is in place, and our pending merger with Spondoolies-Tech Ltd. (“Spondoolies”) is poised to provide us a technology advantage that we believe will positively impact revenues over the long-term.
We’ve also strengthened our financial footing, most recently with the completion of a $1.45 million capital raise in December 2015, 1,225% year-over-year revenue growth for the fiscal year ended 2015, and a 25% decrease in cash flow used from operating activities.
Our management team remains dedicated to creating value and protecting our shareholders and continues to demonstrate its commitment to the future of BTCS through positive steps at improving our capital structure.
From management’s voluntarily return of 12.75 million shares of stock valued at $1.15 million in late 2014, which absorbed nearly all of the dilution from our January 2015 funding, to the recent voluntary escrowing of founder shares representing 15% of the outstanding shares of the company, we are literally “putting our money where our mouth is” and plan to continue to work tirelessly to make our company a success.
Looking ahead, there are several key milestones we anticipate achieving in 2016. We believe our transaction verification services business will lead to rapid revenue growth this year, and our pending merger with Spondoolies should further strengthen our financial performance and product offerings. If we complete these and other initiatives, ultimately we believe we will be in a position to up list to a major exchange this year, greatly improving our visibility in the capital markets and setting the stage for further acceleration of growth as blockchain technology spreads across the global economy.
Blockchain technology is still in its infancy, and just as the Internet has become a ubiquitous driver of global commerce in a relatively short period of time, we believe the impending boom in blockchain adoption is nearly upon us.
On behalf of our management team, I want to personally thank you for your continued support.
CEO and Chairman
BTCS secures the blockchain through its rapidly growing transaction verification services business and plans to build a broader ecosystem to capitalize on opportunities in this fast growing industry. The blockchain is a decentralized public ledger and has the ability to fundamentally impact all industries on a global basis that rely on or utilize record keeping and require trust. BTCS continues to evaluate and build additional blockchain technology consumer solutions. BTCS also actively partners and integrates with strategic digital currency and blockchain technology companies who provide products or services that are complementary to its business strategy. For more information visit: www.btcs.com
Certain statements in this press release, including those related to an anticipated merger, constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation those set forth in the Company’s filings with the Securities and Exchange Commission, not limited to Risk Factors relating to its digital currency business contained therein. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.
BTCS Investor Relations:
RedChip Companies, Inc.
(407) 644-4256, ext. 115
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