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30 Nov 1

Infographic: What gives Bitcoin value?

What gives Bitcoin value Infographic HolyTransaction

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jorge
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Articles, belief, bitcoin network, bitcoin value, demand, faith, infographic, Infographics, network effect, scarce, usefulness
Why Are Bitcoin Irreversible
21 Nov 0

Infographic: Why are Bitcoin transactions irreversible?

Why Are Bitcoin Transactions Irreversible Infographic HolyTransaction

 

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jorge
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Articles, bitcoin, bitcoin network, decentralization, infographic, Infographics, irreversible
why are transaction fees necessary when sending bitcoin
6 Nov 0

Infographic: Why are transaction fees necessary when sending Bitcoin?

Transaction Fees Infographic HolyTransaction

Why are transaction fees necessary when sending Bitcoin?

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jorge
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Articles, bitcoin, bitcoin network, decentralization, infographic, Infographics
6 bitcoin myths debunked 01
9 Mar 0

6 (More) Bitcoin Myths Debunked

We’ve all heard them before.
As a groundbreaking innovation, bitcoin naturally attracts skeptics just as strongly as it attracts supporters, and the technical and theoretical complexity of the digital currency can cause a considerable amount of confusion with those who are not ‘in the know’.
The result is that critics of bitcoin oftentimes fall back on one or two euphemisms to express why they think it will never succeed – simplified statements like “bitcoin is a ponzi scheme” that highlight often misunderstood characteristics of the digital currency but rarely fully address the situation.
One of the first articles published on CoinDesk was dedicated to debunking these “bitcoin myths“, and because they still pervade the industry, we’re revisiting the topic.
Here are six (more) bitcoin myths, debunked.

1. It’s just a speculative investment opportunity

Many people first hear about bitcoin in the context of its price. Whether it was the bubble of late 2013 or the recent dip below $300, a good chunk of the general public thinks of bitcoin only in terms of how volatile the price is and how good (or bad) of an investment it could be.
The truth is, of course, that bitcoin goes far beyond its classification as a commodity. The decentralized peer-to-peer payment network made possible by bitcoin is only one example of how bitcoin is breaking down doors. If the price of bitcoin were theoretically to stay the same forever, it would still have utility in many other areas other than as a speculative investment.

2. The blockchain is the real breakthrough and bitcoins are unnecessary

It’s true – the blockchain is arguably the real genius of Satoshi Nakamoto’s invention. The distributed ledger and trustless security of the blockchain is what gives bitcoin its magic, but oftentimes when people first realize this, they discount bitcoin as just one use case of the blockchain.
In reality, mining is the bread-and-butter of the bitcoin protocol, and without miners there would be no blockchain. Consequently, miners need to be rewarded for their work, otherwise they would have no incentive to contribute their time and computing power to maintain the blockchain. As its native reward token, bitcoin is essential to the functionality of the blockchain.

3. The government could/will shut it down

While governments around the world may still be figuring out how to approach digital currencies, many misinformed people fall into the trap of thinking that, like almost anything else we’re used to, bitcoin could be shut down by governments if one or more of them hoped to do so.
Yes, governments have the power to make it very difficult for their citizens to use bitcoin andsome form of government regulation is inevitable as bitcoin matures. Even so, because of its infrastructure, it would take considerable time, money and energy for any government to pose a serious threat to the global bitcoin network, if they even could at all.

4. You can’t buy anything practical with bitcoin

Perhaps as a follow up to myth number one, a lot of people are surprised to hear that bitcoin is more than a speculative investment and that it can actually be used to pay for everyday goods and services.

 

In addition to the retailers above, PayPal has announced partnerships with bitcoin companies and Microsoft recently began accepting bitcoin for a host of digital content like games and videos. Add in the countless small businesses that accept bitcoin either online or in their brick-and-mortar locations, and it’s safe to say there are options when it comes to spending your bitcoin.

5. There are no advantages of bitcoin over cash or credit cards

Once people realize that bitcoin can, indeed, be used to buy real things, they may not see what the digital currency has to offer that their incumbent payment methods like cash and credit cards don’t. Luckily it doesn’t take long to debunk this myth.
Some of bitcoin’s most obvious benefits are its low transaction fees. Typically, transacting bitcoin saves merchants 1-3% compared to transacting credit cards, and when compared to services like Western Union, bitcoin is clearly superior – especially for sending money abroad.

6. The only people who would ever use bitcoin are tech nerds and criminals

Some of the earliest adapters of bitcoin may be techies and dark market shoppers, but the same could arguably be said about the Internet – and look who uses that now. Regardless of how esoteric the bitcoin community may be right now (and it’s pretty esoteric), adoption takes time.
As entrepreneurs in the space continue to build consumer-friendly apps with bitcoin and awareness of the digital currency spreads, a more diverse crowd will come to use it in their everyday lives. There’s also another important demographic that many forget about: the millions of unbanked people throughout the developing world who rely on mobile phones as their computer, bank and communication device all in one.
Whether it’s any of the above myths or perhaps one of the 10 we previously debunked, bitcoin is ripe with misunderstanding. For bitcoin to reach its full potential, this knowledge gap needs to be bridged so that the myths and misinformation come to an end.

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Satoshi
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Articles, bitcoin, bitcoin network
mastercoin logo
3 Dec 0

HolyTransaction opens it’s doors to the world of crypto 2.0 with new Mastercoin WebWallet

November 24, 2014 – SANTA MONICA – HolyTransaction announced today that they have extended support on their platform to the Mastercoin Protocol and all of Mastercoin’s Smart Properties which allow their users to host digital tokens recorded on the blockchain.
Since the introduction of Bitcoin in 2009, Decentralized Applications have been creating waves in almost all sectors of the world, especially in finance. HolyTransaction is positioning itself to support any and all developments in this space.
Mastercoin uses the Bitcoin Blockchain to store records/data. It has highly useful feature which allows a party to create their own digital tokens, thereby creating smart properties that can enable online exchange of assets (i.e. stocks, bonds, real estate and various finance and security features) with the security and cost-savings of Bitcoin protocol.
“We believe that digital asset transfer protocols will replace outdated bureaucratic rituals in the near future and are extremely happy to push towards this direction,“ said Andrey Zamovskiy.
HolyTransaction is a transparent, accessible universal cryptocurrency wallet that allows users to store multiple digital assets in one location. HolyTransaction comes with a one-of-a-kind currency exchange feature that allows users to easily convert one asset to another. Francesco Simonetti, co-founder of HolyTransaction, says: “The Mastercoin Protocol can be used for things such as decentralized crowdfunding, asset management, and user currencies all by creating tokens built on top of the Bitcoin Blockchain”.
About HolyTransaction:

 

Typically if you want to hold 10 different cryptocurrencies (Bitcoin, Litecoin, Dogecoin, Peercoin, etc.) you need to have 10 different wallets, which makes cryptocurrency security hard to manage. HolyTransaction, your personal multi cryptocurrency wallet, solves this problem, plus it comes with currency exchange features so that you can easily convert one cryptocurrency to another.

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Satoshi
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Articles, bitcoin network, crypto currency wallet, cryptocurrency, cryptoeconomics, mastercoin, smart contract, update
4 Aug 0

Network security and Proof-of-Work: do we need an alternative?

The Bitcoin protocol is designed using a proof of work mechanism, which determines who is permitted to sign the transactions that need to be verified.
A proof of work (PoW) is a piece of data which is computationally difficult to achieve, meaning that it required a lot of either time or hashing power (or both) to find the solution, but it’s easy to verify that this work was actually completed. Bitcoin uses a proof of work algorithm called hashcash, which has been around a lot longer than bitcoin itself, and was created with the purpose of being an anti denial-of-service (DOS) measure. Hashcash is fairly versatile and can be implemented with a number of functions; bitcoin uses hashcash-SHA256^2.
The proof of work consists in finding a target number that is below a certain target value, and in doing so the miner essentially “proves” that she performed a certain amount of “work” in trying various inputs. If I input a string into the SHA-256 hash function, there is no known way of determining what the output will be. Trial and error is the only way to find an input that will generate a hash that fits the desired criteria. In theory, you could nail it on the first try, but the probability of this happening is very small.
Given the current combined hashing power of the network, on average a solution is found every 10 minutes, at which point the block has been mined and the bitcoins are released as a reward. Every 2016 blocks, which ends up being approximately every two weeks, the algorithm moderates itself and either increases or decreases the difficulty of the problem. In practical terms, this means that it either increases or decreases the target value, so it’s easier or harder to find a value below it. This ensures a relatively smooth rate of release for newly mined bitcoins, and avoids flooding the market with coins at any given time.
It doesn’t matter whether I am using a supercomputer or a laptop to do the proof of work, it’s simply that with a supercomputer I can go through the attempts much faster, which means I have a higher chance of solving the problem before anyone else and therefore claiming the reward. The only thing that is important is how many hashes I can go through per unit of time, which is why the power of mining hardware is measured in MH/s, GH/s or TH/s (mega, giga and terahashes per second).
Some people in the cryptocurrency community have voiced the concern that miners may not be incentivized to continue mining if the price of bitcoin plummets, or simply because the reward for solving a given block decreases over time. Both are valid concerns but deserve to be addressed separately. In the first case, the assumption is that the reward amount would be too low for it to be worthwhile financially, and once all 21 million bitcoins have been mined this reward goes away entirely. Currently miners are primarily incentivized by the coinbase reward rather than the transaction fees, which is why many blocks end up with few transactions. Miners profit from the transaction fees, and the more transactions they include in a block, the more money they can make, but the opportunity cost of continuing to work on that block rather than go after a new one is high, as a competing block may win, rendering their work a waste of time and computing power.
Let’s assume that for whatever reason the price of bitcoin collapses, and therefore it is significantly less lucrative (net negative, once you factor in the cost of electricity) to mine. If miners are rational actors, most of them will stop mining, which is a problem for the network. The unintended consequence, however, is that mining would become dramatically less competitive, and therefore substantially more lucrative for those miners who continue to mine — at least in the short term. As I mentioned earlier, the algorithm self regulates to keep the average pace at which blocks are solved at around 10 minutes per block. As the bitcoin developer guide explains, Every 2,016 blocks, the network uses timestamps stored in each block header to calculate the number of seconds elapsed between generation of the first and last of those last 2,016 blocks. The ideal value is 1,209,600 seconds (two weeks).
Based on a comparison to the ideal value, the algorithm either increases or decreases the difficulty of the problem to solve, essentially recalibrating to try and get as close to 1,209,600 seconds as possible. To date, the difficulty has increased as more and more advanced ASIC miners continue to be developed, and more computing power is needed to have a chance at being the first to solve a block. However, the algorithm can also self-regulate in the opposite direction, making it easier to solve the problem by increasing the target value. Difficulty can be decreased by as much as 75%. This component of the protocol is particularly brilliant in design, as it basically guards itself against market shocks that could be produced by sudden swings in the mining power being inputted at any given moment.
Even if the bitcoins they are mining are worth substantially less post crash, if the miners believe that the expected future value of their bitcoins is significantly greater than it is at present, then it would make sense to continue mining. Alternatively, if a large percentage of miners quit because they didn’t anticipate the future value of bitcoin to make their present expenditure worthwhile, the new environment could still attract a new class of miners who are not currently mining because they don’t have the hashing power needed to make it lucrative, but if competition decreased dramatically, it would be. Presumably at this point other miners who had been mining previously would also see this and start getting back into the game, which would ultimately increase competition and start driving things in an upward direction again.
The likelihood that we see a huge drop in the price of bitcoin also decreases substantially over time, as it becomes less probable as the network expands. One of the main reasons bitcoin prices have been fairly volatile to date is that the network (by which I mean the number of consumers with wallets and merchants who accept bitcoin as a form of payment) is still relatively small. Bitcoin’s market cap has been hovering between 7 and 10 billion dollars, which means that any hedge fund worth its salt could take a position and dramatically swing the market. Bridgewater Associates, for instance, is the world’s largest hedge fund with $150 billion in global investments under management. In theory, they could buy ALL the bitcoins that have been mined to date 19x over, and still have enough left to throw in six Instagram acquisitions in for fun. And that’s only one of the top funds. Because the market cap is small, bitcoin to date has been subject to the whims of large actors; as the cap increases, there’s a strong chance that this will change.
There’s also the issue to consider that even in the absence of a price crash, incentives to mine naturally decrease over time as the amount of bitcoin received as a reward for mining a block is halved every 210,000 blocks, or approximately every four years. Theres is reasonable cause for concern that without the incentives provided by block rewards the network will no longer be secured, in that the transaction fees will not be sufficient to support the cost of securing the network. This is a manifestation of the game theory concept of the “Tragedy of the Commons” in which no individual actor wants to perform work or contribute to the community because he believes that she can reap the benefits regardless, but when everyone behaves this way, the system ends up collapsing and leaves everyone worse off. No one wants to pay transaction fees, but if everyone avoids paying them, the miners will have no incentive to keep security levels high, which could result in a systemic collapse.
To some extent, the point in time at which this problem becomes a reality will depend on the price of bitcoin, and no one can accurately predict when the network will reach that point, but even if prices continue to grow this is likely only a case of delaying the inevitable. If a bitcoin today is worth $600 and I receive 25 when mining a block, and in ten years I only receive 6.25 bitcoins for doing the same work, yet each one is worth $100,000, mining still makes a lot of sense. Even considering the investment in mining equipment, assuming that the amount of electricity I will have to expend will be higher, and discounting for 2-3% annual inflation, there’s still a substantial potential upside. There are a number of external factors (exact cost of electricity, price of ASICs or other mining equipment, etc) that will play into this and influence whether the network incentives to mine remain high enough, so it is worthwhile considering other mechanisms, prominent amongst which is proof of stake.
Proof of stake (PoS) is an idea that came about as an alternative solution to proof of work, primarily as a safeguard to some of the original protocol’s perceived shortcomings. Apparently it was first proposed in 2011 in the bitcoin talk forum by “QuantumMechanic”, and since then several models for implementation have been developed. A proof of stake scheme is similar to proof of work in that it is also a mechanism for determining who will sign the transactions in a given block, but instead of relying on hashing power, it uses ownership as the deciding factor. Simply put, if Alice holds 5% of all coins, she has the ability to mine 5% of the blocks. Theoretically this should increase network security by making it more difficult to mount a 51% attack. In order to do so, someone (probably a mining pool) would have to control over half of all coins in existence, which is much harder to do than controlling 51% of the hashing power. It’s worth considering that this isn’t impossible, as a large centralized pool could form and come to control over half the coins in circulation through a combination of owned coins and loans, for example. Realistically, however, in a proof of stake situation it wouldn’t make much economic sense to mount this type of attack. It would substantially reduce confidence in the network’s security, and likely cause the price to plummet. By crashing the value of a coin in which it is so heavily invested, the malicious mining pool would essentially be shooting itself in the foot. To some degree this is also true in a PoW scenario, but the disincentive is much stronger where PoS is being applied.
Although there’s no way to know exactly if and when an alternative to proof of work will become necessary due to a lack of mining incentives, a proof of stake scheme could also be a desirable solution for environmental and efficiency reasons. Since the proof of work process does not actually solve real-world problems, the energy is essentially burned without a real return, which is suboptimal. Implementing PoS, either in the form of a fork from the main proof of work blockchain or via the use of an altcoin that uses it (ie Peercoin, or something similar) could be significantly less costly than bitcoin mining as it currently stands, because the current system gobbles up a huge amount of electricity. Because PoS uses far less energy, as almost none is expended in the mining process, it would be substantially cheaper to make a profit mining than in a PoW scenario. It would also meaningfully reduce transaction fees in the long run, as miners wouldn’t have to charge high fees in order to cover their power and hardware costs.
We still lack a perfect solution to all these issues, and PoS is not a panacea either. One problem I see with implementing a PoS mechanism is that it could cause illiquidity in the market and lead to great concentrations of wealth. Miners would be incentivized to hold their bitcoin in order to be allowed to mine more, and therefore large concentrations pools of currency would accumulate. Currently, miners have an incentive to convert some of their mined bitcoins into dollars by selling them, but this is largely true because of a) price volatility – it is still risky to hold everything in bitcoin and b) there are still many assets that cannot be purchased using bitcoin. If PoS were implemented, and as both a) and b) become less relevant as the network expands, this could lead to a vast majority of coins being held by very few.
Despite the considerable improvements that proof of stake offers over proof of work in certain spheres, ultimately neither proof of work nor proof of stake offer a perfect solution to long-term network security concerns. Still, both clearly have useful characteristics which, applied in conjunction, could help overcome some of their own shortcomings. Just as I was wrapping up this writeup, Ryan Selkis passed along a fascinating paper by Bentov, Lee, Mizrahi, and Rosenfeld which proposes a third option, called Proof of Activity (PoA). PoA is predicated on the belief that neither PoS nor PoW are flawless, and seeks to pull in some of the better aspects of both. Given that this piece has already gotten quite lengthy in just looking at proof of work and proof of stake, I’ll write about the PoA paper separately sometime soon. The paper, titled “Proof of Activity: Extending Bitcoin’s Proof of Work via Proof of Stake”, is fairly technical, but it’s very thorough and for those who are so inclined I definitely recommend a read.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Satoshi
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Articles, bitcoin network, mining
26 Jul 0

Bitcoin has passed the tipping point

Products and services that are first-to-market often take such a battering that they lose out to competitors with copycat products. Business history is littered with wildly successful products with ultimately spectacular collapses because they lost out to competitors that found a better way of doing things – things they learned at the trailblazer’s expense.

The Sony Betamax is the poster child for products that created a market and lost out to a rival – in this case VHS. Sony created a market for recording TV, but because the tapes where an hour long VHS grabbed the movie rental market.

More recently, Friendster was the first social network to explode, with millions of users in the first 3 months. But it couldn’t manage its growth and lost out to MySpace and of course Facebook.

adoption curve

There are many more examples. Some lost slowly, like the Atari 2600 game console, and some crashed spectacularly like Rio MP3 player. Palm lost to Apple, Netscape to Internet Explorer, WebCrawler to Google, Tivo to the cable companies, and on and on.

So far Bitcoin is an exception to this model. And though it’s been battered by ruinous headlines, including one just this week where the World Bank is calling it a naturally occurring Ponzi scheme, Bitcoin remains resilient.

Kaushik Basu, World Bank economist and author of ‘Ponzis: The Science and Mystique of a Class of Financial Frauds’ argues that most Ponzis today are not always obvious and that today’s Ponzi schemes often don’t have a puppet-master pulling the strings. Bitcoin, he says, is just such a Ponzi. The speculation on the currency raises the demand for Bitcoin making it a bubble.

Bitcoin has hundreds of competitors all built on the Bitcoin model. A handful are gaining some success, like Litecoin which is currently trading at $9, and Darkcoin (I’m not kidding) which is trading now trading at $7.50.

Darkcoin was built to cover perceived flaws in Bitcoin’s anonymity. One reason for the early success of Bitcoin was that it was as anonymous as passing dollars on the street. And while there is a far greater level of anonymity with this electronic transaction than making a purchase with a credit card or PayPal, Bitcoin is not anonymous to those forces who really want to know.

Unlike Bitcoin, Dash mixes up users’ transactions so that it’s nearly impossible to trace a payment to a person. But the promise of Dash’s privacy features solves a problem for only a small subset of Bitcoin users.

Few have heard of other crypto-currencies. If people barely understand Bitcoin, then any competitor has the impossible task of differentiating itself.

In his paper Basu mentioned Bitcoin by name, so did the IRS when it said it was a taxable asset. And this week Benjamin M. Lawsky, the superintendent of financial services for the State of New York, proposed regulations to create a “BitLicense” to include rules on consumer protection, the prevention of money laundering and cybersecurity. That’s akin to Apple successfully rebranding the MP3 to a podcast.

Just search “20 USD in BTC” on Google and you’ll get the exchange rate. It works for any fiat currency. You can’t do that with any other crypto-currency.

Bitcoin is currently trading at $600. Not bad for a five year old Ponzi scheme.

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Satoshi
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adoption, Articles, bitcoin, bitcoin network, cryptocurrency, cryptoeconomics
14 Jul 0

A cashless society, in three years ATMs in all majot cities will accepting cryptocurrencies

The consumer financial services company based in North Palm Beach, Florida, Bankrate, predicts that within three years, ATMs in all major cities will accepting digital currencies such as bitcoin.

The report, which assesses the future functionalities likely to be provided by the ATMs of tomorrow, focuses on how mobile payment solutions will play a significant role in terms of the next generation of banking.

With ATMs becoming increasingly flexible when its comes to meeting the needs of customers, Senior Vice President Tom Ormseth of the Chicago-based bank holding company Wintrust Financial says that “banks now need to think like Google, they’ve got to quit being slow adopters.”

INNOVATION ON THE RISE
The ATMs of today now let you talk to a teller on video, make cash withdrawals via your smartphone, and in many cases let you withdrawal as littles a $1. In essence, the need for physically located banks are becoming less necessary with time, which is why many are saying that the ATMs of tomorrow could replace banks all together. A threat that the advent of bitcoin has only made greater.According to Jay Weber, vice president of debit and ATM product solutions at the Jacksonville, Fla ATMs have long been viewed as nothing more than a tool for withdrawing cash on the fly; however, he says that now, the technology is being driven by a younger, more tech-savvy demographic.

The emergence of cardless ATMs, for instance, which are starting to pop-up in major cities throughout the world thanks to the Chicago-based Wintrust Financial group, allow customers to withdrawal cash through your phone without the need for a physical debit card.

Working much like the emerging bitcoin ATMs, you simply request a withdrawal, then within eight seconds, your money is there waiting for you at your local ATM.
THE DIGITAL DIVIDE

According to Frank Natoli, chief innovation officer at Diebold, the banking industry, once seen as a conservative sector is quickly moving ahead. He further predicts, that thanks to the emergence of mobile banking alternatives, using your smartphone to transact will become even more seamless.

Acording to Natoli:
“Within three years, ATMs in major cities also will accept alternative currencies like bitcoin […] a digital currency that exists only in cyberspace, [that] already is starting to get its own ATMs worldwide. And mobile transactions are more appealing to bitcoin users.”

Natoli tells Bankrate that these ATMs are going to play a major role in the next generation of banking, and according to him, will aid in the progression towards “branchless banks.”While Natoli points out that today’s ATMs can only do 70% percent of what a teller can do, he predicts that this is a void destined to be filled by the new waves of ATMs.

The incentives are all there, as on the banks behalf, the expense of running a physical network of branches can be virtually eliminated with the adoption of this new technology. According to the report:“As consumers increasingly bank on mobile devices and online, more branches will be shuttered, leaving ATMs to do more daily heavy lifting.”

As the senior analyst at Aite Group, David Albertazzi explains, “it’s about rethinking and redefining the branch network.”

A CASHLESS SOCIETY
As Wintrust’s Ormseth explains:
“These futuristic ATMs are destined to become bank must-haves. Better security measures such as voice recognition or even biometrics, where you can use your fingerprint to prove your identity, will become commonplace at ATMs too.”As for whats at stake, echoing Ormseth’s predictions, Maclyn Clouse, professor of finance at the University of Denver also believes that given the separation between new technology and old, banks, especially smaller local banks, could soon be left behind. “A lot of transactions will be done on the ATM, which big banks can roll out more profitably than smaller banks,” he told Bankrate.

What will the ATMs of tomorrow look like? According to Clouse — cashless.

Open your free digital wallet here to store your cryptocurrencies in a safe place.

Satoshi
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Articles, bitcoin adoption, bitcoin network, future
13 Jul 0

Bitcoin vs. banking: an infographic

There’s no denying that Bitcoin is changing the way we think about the financial market and investors are finally getting on board.
Companies that specialize in buying and selling gold have made announcements that they will be expanding into Bitcoin. According to Richard Waters, a writer in the Financial Times, reported A-Listers in Silicon Valley are climbing onto the bitcoin bandwagon.
Perhaps even more notable is what Hikmet Ersek, the CEO of Western Union, had to say during an interview with Bloomberg. Mr. Ersek expressed a willingness to accept Bitcoin into Western Union’s portfolio if, and that’s a big if, bitcoin becomes regulated like other currencies.
Right now Bitcoin transactions are equal to only 0.7% of the credit card transaction in the U.S alone.
There is still plenty of room for cryptocurrency to grow into. In 2013, there were $11.2 billion dollars worth of transactions in the U.S per day, compared to bitcoins $78.2 million worldwide. That number is up 183% from last year and a whopping 437% from two years ago.
Credit Cards go through four processes before a transaction is approved while bitcoins go through only three. If you store your money in a traditional bank, you risk bank runs, inflation and deflation due to government actions. Bitcoins main concern for risk is someone breaking into a wallet without proper preventative measures, such as encrypting your wallet, and your coins being taken.
All this information and numbers can get confusing and are difficult to find. Thank to Visual Capitalist, you can have it all in one place. Visual Capitalist merge art, data and storytelling to create a coherent and continuous infographic. Recently the people at Visual Capitalist have created an infographic that explores and explains the difference between Bitcoin and traditional banking. The infographic is entitled “Bitcoin vs. Banking” and sports the bold subheading, “How cryptocurrency can and will disrupt the current financial system”.
That’s not the only infographics that the people over at Visual Capitalist have made regarding the subject of Bitcoin. Back in February of this year Visual Capitalist released an infographic entitled, “The Definitive History of Bitcoin” which explores the history of Bitcoin ranging from; the Bitcoin design paper by Satoshi Nakamoto that was published back in October of 2008, the first real transaction with bitcoins, the rise and downfall of Mt.Gox, and ends in December when China announced they would not allow banks to handle bitcoins.
Regardless of how much you do or do not know about Bitcoin, these infographics are helpful for everyone. The majority of us are visual learners and infographics like this help bring information and statistics to us in a visually appealing and memorable way. You can share their infographics via Facebook and Google+, tweet or pin it. For myself, I will be forwarding these onto my friends who keep asking the same question every time, “So what is a Bitcoin?”
Check out Bitcoin vs. Banking below:
bitcoin-disrupt-financial-system-infographic-3

Open your free digital wallet here to store your cryptocurrencies in a safe place.

jorge
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Articles, bitcoin, bitcoin network, Infographics
Bitcoin Trends 630x392
13 Jul 0

How the Bitcoin landscape is evolving in 2014

The bitcoin landscape is evolving so rapidly that it’s hard to believe we’re already halfway through the year.

(CoinDesk) Like any new industry, there are so many areas to explore in the bitcoin space that sometimes make a week’s worth of developmentsit feel like a month or two have gone by.

Bitcoin has certainly seen a lot of action in 2014. The collapse of Mt. Gox, hefty venture capital investments in bitcoin startups and the US government auction of 30,000 bitcoins seized from the Silk Road all generated buzz in the mainstream media.
CoinDesk’s recent State of Bitcoin Q2 2014 report highlights some of the key developments that have influenced bitcoin’s journey over the past few months, providing context for the digital currency’s ever-changing position in society.
While only time will tell what’s in store for bitcoin’s future, a number of trends have emerged in the industry this year that could shape the direction and velocity of bitcoin’s growth.
Here are five bitcoin trends that have emerged in the first half of 2014:

1. Big-name retailers jumping on board

The year started with a bang when Overstock became the first major retailer to accept bitcoin. News of Overstock’s success with the digital currency served as a signal for other large companies to follow suit.
Electronics retailer TigerDirect integrated bitcoin as a payment option by the end of January, and other household names like the Sacremento Kings, Lord & Taylor and REEDS Jewelers got on board soon after.
By the end of June, three companies with at least $2b in annual revenue had begun accepting bitcoin: DISH, Expedia and Newegg.
With smaller businesses also continuing to accept bitcoin at a fervent pace, we estimate that around 100,000 merchants will accept bitcoin by the end of 2014:

State of Bitcoin Q2 2014

2. A warming regulatory climate

While it certainly hasn’t been all smooth sailing between governments and bitcoin this year, it seems like tides are changing and regulators around the world are starting to take a more open-minded approach to the digital currency.
In the beginning of 2014, China’s stance on bitcoin was ambiguous at best. By April, China’s Central Bank Governor said that banning bitcoin was “out of the question,” referring to it as more of an asset than a currency.
Russia, after releasing stern warnings about bitcoin early this year, recently reconsidered its stance on the digital currency.
Gerogy Luntovsky, the deputy chairman of Bank of Russia, explained that his agency is going to take time to examine bitcoin as the industry continues to evolve:
“At this stage, we need to watch how the situation develops with these kinds of currencies. These instruments should not be rejected.”
Progress has also been made in places like California, where Governor Jerry Brown has granted bitcoin ‘legal money’ status, and Switzerland, where similar ‘legal money’ regulations are being considered.
Regulators seem increasingly willing to hold off on impulsive legislation in favor of working with the bitcoin community to find the best resolutions to prevent money laundering and fraud without stifling innovation.

3. VC firms keep betting big

Not everybody is as slow as governments to embrace bitcoin.
Serious venture capital investments in bitcoin companies were already taking place in 2013, but VCs have certainly kicked it up this year, with a total of $150m having already been invested in 2014.
With 2014′s Q2 VC investments reaching $73m (up from $57m in Q1), CoinDesk estimates that by the year’s end, 2014 VC investments in bitcoin companies will have surpassed 1995 VC investments in Internet companies:
Bitcoin VC Investment Compared to the Early Internet

State of Bitcoin Q2 2014

The venture capital flowing into the bitcoin space supports the industry’s infrastructure both explicitly and implicitly: startups gain access to resources that allow them to build much-needed products and services around the Bitcoin protocol, and the investors’ confidence in the digital currency brings legitimacy to bitcoin’s reputation.

4. Building on the block chain

Most people who take the time to really learn about bitcoin realize that the true genius in Satoshi Nakamoto’s invention is not the coins themselves, but rather the block chain.
The term ‘Bitcoin 2.0′ is often used to describe applications that use the technology of the block chain to address issues like smart contracts and identity verification that were once impossible to solve in a decentralized way on the Internet.
Jeff Garzik, one of the bitcoin protocol’s core developers, described the significance of the block chain beyond the scope of digital currencies:
“As a computer scientist, and in computer science in general, when you talked about building distributed systems, there tended to be a purely theoretical view about how computers would talk to each other, how to keep them coordinated. Satoshi and the blockchain really solved that problem in an elegant and unexpected way.”
Block chain-focused startups like BlockScore and BlockCypher have already secured funding this year from investors. As 2014 rolls on, expect to see new uses of the block chain technology solving problems in a uniquely decentralized manner.

5. New emphasis on transparency

The collapse of Mt. Gox, once the biggest bitcoin exchange in the market, was a wake-up call to many in the community.
The former exchange’s CEO Mark Karpeles was notoriously opaque in the months leading to its bankruptcy, causing confusion among users who held bitcoins on Gox.
Ultimately many people lost BTC through the course of Mt. Gox’s downfall. Outcries from the community started pouring in, demanding other big exchanges prove their solvency with professional audits.
Exchanges like Bitstamp, Kraken and Coinbase all agreed to be audited in the aftermath of Mt. Gox’s liquidation.
The demand for more transparency in the industry doesn’t stop at exchange audits, though. Revered bitcoin evangelist Andreas Antonopoulos recently took to Twitter to announce his departure from the Bitcoin Foundation, citing a lack of transparency as a primary concern:
If the first half of 2014 proves anything, it’s that the technology underlying bitcoin is resilient even under catastrophic circumstances (Mt. Gox), and that the community is willing to rally together in bringing bitcoin to mass adoption.
There’s a reason people call it the “honey badger of money.”

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Articles, bitcoin, bitcoin adoption, bitcoin network, cryptocurrency
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