Tag Archives: bitcoin adoption

Why Bitcoin may re-write banking practice

(BusinessTech) Bitcoin has grown from an experiment in digital cash to a vibrant,
global economy supporting multi-million dollar companies with a market
cap of $10 billion.

“While the road has been bumpy, and quite a rollercoaster ride, it is
still nascent and holds immense promise to change the world in
unprecedented ways,” said Simon de la Rouviere, speaking at the recent
Nedgroup Investments Cash Solutions Treasurers Conference.

“In 2013, the hockey-stick growth often found in the technology space
kicked off for Bitcoin, seeing adoption increase worldwide.”

De la Rouviere, a technology entrepreneur who develops cryptocurrency
applications, believes that Bitcoin’s global, public, distributed asset
ledger is a fundamental innovation that could upset various industries –
from banking to public records.

“Any business in the field of recording information fit into a ledger
that charges fees to be a middleman is at risk of becoming obsolete,”
he said.

As copy of Bitcoin’s ledger exists on every network participant’s
computer, and is continually updated, reconciled and synchronized in
real-time. Each member can make entries into the ledger, which records
transactions of a certain amount of currency from one participant to
another.

Each entry is propagated to the network, so that every copy on every
computer is updated near simultaneously and all copies of the ledger
remain synchronized.

“This blockchain technology could easily be adopted to work with
title deeds, physical keys, private equity, derivatives, escrow, dispute
mediation, passports, wills, domain names, and sim cards – to name but a
few,” De la Rouviere said.

The future

Looking farther ahead, the technology could potentially bring about a
new apolitical reserve currency that allows programs and machines to
own forms of value without the requirement of human intervention.

This could herald an almost sci-fi era, where machines earn their
keep by providing services to humanity at an even more cost-efficient,
break-even level than currently possible, De la Rouviere said.

“By thinking of Bitcoin not as a currency, but as a single solution
to a previously unsolved algorithmic problem in distributed systems,
colloquially known as the Byzantine Fault Tolerance, humanity can create
global systems of consensus powered by mathematics.”

Bitcoin is a grand experiment, currently at the forefront of showing
the equalizing force that the internet brought about. “It might still
one day fail,” he added, “but rest assured, it is spurring innovative
thinking across the board.”

Sean Segar, head of cash solutions at Nedgroup Investments, said that
while the bank  believes in staying abreast of trends or fads that may
affect the industry, “we have no plans to launch a Bitcoin fund”.

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Satoshi

Four charts that suggest Bitcoin value could be at 10,000 USD next year

(CryptoCoinsNews) Has the Bitcoin Value
bubble burst? Looking at the most recent prices, we seem readier for a
gentle nosedive than a new rollercoaster ride to the top. Many altcoins
are heading down too: Litecoin, Peercoin and your beloved Dogecoin
are all in a steady slide to the drain of the cryptocurrency world. But
looking at the charts below, many would argue that Bitcoin is up for a
new rise to 10,000 USD. This recent bubble wasn’t the first bubble, and
it won’t be the last for Bitcoin.
Bitcoin price chart in USD
Bitcoin price in USD from begin 2013 to June 2014.
You see that tiny top in April 2013? That was a bubble just like the
most recent big one. It was playing out on a lower price level, but the
percentage rise was equally big. There have been more bubbles in
markets ever since markets were invented. All start with a slow rise in
price, then a parabolic jump to the top, and the inevitable crash and
rebound. At the end of every bitcoin bubble, the value is about 2x
higher than what it was. Every time.
To see this trend in action, we have to display the price on a
logarithmic scale. This is useful for values that grow exponentially.
The chart below shows us the Bitcoin/USD value over the same 2013-2104
period on a logarithmic scale.
Long-term Bitcoin price in USD (logarithmic scale)
Bitcoin price chart in USD on a logarithmic scale.
This is the very same chart, but on a different scale. You can see
exponential growth, more or less stable over the years. In 2012 the
price grew from $5 to $13. In 2013 from $13 to $800. If we make a
similar jump in 2014, we come to the (crazy) price of 10,000 per bitcoin. For this the value only has to continue its trend. Following the full 2012-2014 chart on bitcoinwisdom,
one can see continious valleys followed by spikes. We are currently in a
valley, which is very good news. What will be the value in 2015? The chart below takes an educated guess:
Bitcoin price prediction for 2015
Bitcoin price prediction for 2015

Google Trends on Bitcoin

The fact that we are in a valley is confirmed by Google. Google
trends shows us how popular a keyword is. It tracks the number of
searches for ‘Bitcoin’ and other keywords, and displays that in a graph
over time. The resulting chart of user interest shows peaks and valleys
corresponding in time with the peaks of the price, as can be seen in the
excellent research in this forum post.
Google searches for 'Bitcoin' chart
Google searches for ‘Bitcoin’
Does this mean more user interest increases the price? Or does a
higher price generate more user interest? We can’t be sure, but it is
clear that they go well together. We are currently in a valley of user
interest, which means another top is in the make. Bitcoin news is
widespread, but how many people do you know that own one? According to wallet counts, the number of current Bitcoin users has hardly reached more than one million yet. Bitcoin is at it’s very infancy.

“Bitcoin is still in the earliest phases of industry
development. The first years of Bitcoin were about building the
infrastructure. Bitcoin entrepreneurs were busy setting up the most
basic but fundamental aspects, including wallet and mining services.
Today, Bitcoin is just starting to enter the investment phase, where
venture capitalist, hedge funds and other financial firms are starting
to invest money and capital into this nascent technology. Bitcoin isn’t
quite ready for the consumer phase, where end users begin to utilize the
services. If the entire history of Bitcoin was a clock, we’re still in
the very early time. I would say were maybe in the second second of the
entire history.” Nicholas Cary, CEO of Blockchain.info (source)

The next jump in price could be ignited by the Winklevoss brothers bringing Bitcoin to the Nasdaq, or by the SecondMarket Bitcoin Investment Trust handing
over Wall Street dollars. But wherever it comes from, the charts are
definitely bullish. My advice is simple. Buy now, and wait.

Disclaimer: The (funny) definition of an economist is “Someone that can use economic theory today to explain why he got all his predictions wrong yesterday“. The market is unpredictable and I can’t always be right

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Satoshi

Shakil Khan: cryptocurrencies are here, embrace them

Whether it’s Bitcoin, or another name, cryptocurrencies are
already disrupting payments and won’t be stopped, serial investor
Shakil
Khan
told the audience at Wired Money 2014. So get on board
with change.

(Wired) Khan explained how he has seen the growth of Bitcoin from a
much-misunderstood, unstable currency, to a more mature offering
that is finding its place in ecommerce and investor portfolios. So
rather than focus on regulation, which will only delay the
inevitable, the financial sector needs to focus on supervision and
take on the opportunities cryptocurrencies provide.
Khan, interviewed on stage at the Wired conference by editor
David Rowan, has invested in Spotify and YPlan, and advised teen
founder of Summly Nick D’Aloisio. But it was in 2012, when he first
heard about a payment company attempting to tackle the Bitcoin
ecosystem, that the cryptocurrency crossed his path. In the
following years, he found himself becoming a point-of-contact for
investors, suddenly intrigued by a currency that went from $10-25
per Bitcoin in 2012 to $260 in 2013.
“At that stage I got a lot of inbound emails from VCs and
entrepreneurs asking who is this company Mt Gox? Not because I was
the smartest person, but because there was a different wave of
people who weren’t publicly talking about Bitcoin. Morgan Stanley
was phoning me not because we had a relationship, but because
people were calling them and asking advice, and they were coming to
me.”
Most recently, Khan was part of a $510k investment round into peer-to-peer payment solution
BitPay. That’s a lot of hard cash for a currency that dips and
peaks dramatically according to government opinion — for instance
when the FBI referred to it as a currency, Bitcoin became stronger;
when China restricted exchanges and warned it would keep an eye on
the currency, its value tumbled.
“I don’t have the answer to this but no one is asking the
average consumer to participate in this — it’s the same as
stocks,” said Khan. We in the tech industry are more than familiar
with Bitcoin, beyond the Silk Road headlines, and those in the
financial sector have followed suit. But it is not yet something
that is impacting the average banking customer. “Right now, it’s
something that’s not for the faint hearted, just like stock trading
where people make 3 percent gains one day, and 25 percent losses
the day after.”
This kind of threat, is not enough to stall the progress being
made in the cryptocurrency ecosystem — and this is because, as
Khan reiterated onstage, there is a “fundamental problem with
payments”.
“I can sit here and make and send an audio or video message in
three seconds. But if I want to pay someone 200 kroner online it’ll
cost be $32 and might take four days for the payment to arrive.
That makes zero sense, and cryptocurrencies solve this
problem.”
We are seeing the cryptocurrency ecosystem rapidly evolve as a
result of this, says Khan.
“Two years ago the conversation was very much Silk Road and pizza. Now VCs are investing in risk — we have
Andreessen Horowitz, Fred Wilson and Redpoint. This is a sector
everyone knows is going to get disrupted, and they need to be part
of that journey. Companies like Bit Pay were very early, now we
have ecommerce companies starting accepting Bitocin. Amazon has its
own plans on virtual currency.
“People once said the fax machine would never get disrupted,
then we had email. We’ve seen this over and over, and if you have
passion and an appetite for risk, why wouldn’t you? I don’t want to
turn around and five years say why wasn’t I part of this.”
We are seeing this interest in the ecosystem spread, as
evidenced by the stories being published by Khan’s own site
Coindesk, which are picked up by the likes of the Wall Street
Journal
and Dow Jones. “Over the last 12 months it’s
much less of Silk Road, and more of Visa setting up a group looking
into cryptocurrencies and Western Union or Ebay looking into
Bitcoin.”
On the question of the legality, or government discomfort with
Bitcoin, Khan points out that the US $100 note is the chosen
currency of the criminal world — it’s what they’ll find in raids,
and its what the CIA drops in bales of cash into Afghanistan.
“They’re not sending smartphones, they were sending US dollars.”
Recently, the US government sold off the 30,000 Bitcoin it seized
during the Silk Road shutdown. Khan points, “I don’t remember the
US government selling cocaine seized from raids, so you can’t say
it’s illegal and shouldn’t be allowed.”
The government is always going to have some issues because when
you don’t understand something, you get fearful of it.”
The cost those 30,000 bitcoins sold for, is evidence enough that
there is something attractive here for investors — Khan says the
coins, currently priced at $650 each, went for above that
value.
We need to stop holding on to traditional money as though it is
not broken. “I’m guessing there are laser printers out there
devaluing that money quicker than the paper can be printed,” Khan
said.

“We know change is coming. Regulation will not shut this down,
it might just prolong this little a bit. You need to embrace
cryptocurrenices and try to understand why the core technology
could help what you’re doing.”

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Satoshi

One auction bidder claimed all 30,000 Silk Road Bitcoins

The US Marshals Service (USMS) has announced that a single,
undisclosed bidder claimed all of the roughly 30,000 bitcoins seized
from online black market Silk Road and sold in its recent auction.
The winning bidder outbid all other parties for the 10 auction
blocks, according to the USMS. Further, the bitcoins have already been
transferred to the winner, according to Blockchain.
US marhsalsThe USMS previously said that it would begin notifying bidders as to
whether they had secured any of the blocks on 30th June. The auction
took place on Friday, 27th June over a 12-hour span.
In a statement, the USMS said:

“The US Marshals Bitcoin auction resulted in one winning
bidder. The transfer of the bitcoins to the winner was completed today.”

The auction was structured into 10 blocks, with the first nine consisting of 3,000 BTC and the last one featuring 2,656.51306529 BTC.

Results trickle in

The news follows an earlier announcement
from the USMS on 30th June, when the agency said that 45 registered
bidders took part in the process. At the time, the federal agency didn’t
have a clear number on the final amount of winning bids.
The USMS released the
auction date and procedural details last month. At the time, the
federal agency outlined how participants could express interest in the
roughly $18 million worth of bitcoin.
Since then, a number of key bidders,
including SecondMarket founder and CEO Barry Silbert, have outlined
their participation in the auction. Silbert later announced via Twitter
that his auction syndicate, which consisted of 42 bidders for a total of
186 bids, was outbid on every bitcoin block.
The syndicate formed just part of a broader pool of known or possible bidders, a number of which were inadvertently released
by the USMS. Other bidders included Pantera Capital and Bitcoin Shop,
both of which have confirmed that they did not enter the winning bid.

Image via Wikipedia

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Philippines get its first Bitcoin ATM

(CoinTelegraph) The Philippines welcomes its first Bitcoin ATM. Brought by Satoshi Citadel Industries and Bitmarket.ph,
the machine will be ordered from Skyhook and will cost $US 999. ATMs
are no longer exciting news, yet this one is a lot smaller in size and
it will speak to the success of Bitcoins on a global scale. The ATM will
appeal to a wealth of people and cultures with money to trade and
transactions to process.

A better understanding of Project Skyhook

What is Skyhook? Skyhook is an open-source Bitcoin ATM.
Selling Bitcoins was once difficult, and many people were tired of
depending on exchanges and centralized banks to buy Bitcoins. Skyhook
changed everything. The company developed a tiny and secure machine
everyone can use to exchange Bitcoins.
It comes with a hefty security mounting plate and a password-on-boot
options. It someone steals it, you have nothing to worry as your
Bitcoins will be safe. The ATM accepts Australian, US, and Canadian
dollars, as well as Argentinean Pesos, Yuan, Euros, and numerous other
currencies.
Easy to set up, Skyhook comes with a detailed guide you should use to
get started. Buyers will require a Wi-Fi or wired internet connection, a
power cable, and Bitcoins to sell. The touch-screen graphical interface
of Skyhook will ease your job to buy Bitcoins and make use of the QR code for wallet address recognition.
Skyhook sets Bitcoin prices automatically using major exchanges.
Afterwards, it adds a minimum price protection so that you can get paid
for using Bitcoins. The ATM machine is excellent for vendors,
storefronts, bars, meet-ups, and merchants. Set your rate and start
trading.

Bitcoin, a global phenomenon now available in compact size in the Philippines

Unlike the other two popular Bitcoin machines, Lamassu and Robocoin,
Skyhook is a lot smaller, and of course, less expensive. Owned by a
Filipino company known as Bitmarket.ph, locals will finally be able to
trade Bitcoins with Philippine pesos and not have to worry about
exchange rates. To use Bitmarket.ph all you have to do is activate and
access your account. Next, type your transaction’s details (details of
the buyer and item for sale). Enter your selling price and exchange it
in Bitcoins immediately.
Generate a QR code and use the code to share it with clients.
Bitmarket additionally offers cash settlements where you can convert
Bitcoins into Philippine pesos daily. Bitcoins provide fast, real time
transactions to customers. Trading Bitcoins keeps people away from
chargebacks, bank fees, and commissions. Unlike other forms of exchange,
Bitcoins provide transparency where you can track each one of your
transactions in real time. Vendors accepting Bitcoins are essentially
adding value to their business by gaining a competitive advantage as a
first adopter and cutting costs.
Now that the Philippines is finally welcoming its first Bitcoin ATM,
people will “dispense Bitcoins for Pesos on the spot in a matter of
seconds at competitive and fair rates.”

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Satoshi

Imagine a Bitcoin Valley…!

(Politico) The popular recipe for creating the “next” Silicon Valley goes something like this:
  • Build a big, beautiful, fully equipped technology park;
  • Mix in R&D labs and university centers;
  • Provide incentives to attract scientists, firms and users;
  • Interconnect the industry through consortia and specialized suppliers;
  • Protect intellectual property and tech transfer; and,
  • Establish a favorable business environment and regulations.

Except … this approach to innovation clusters hasn’t really worked. Some have even dismissed
these government-driven efforts as “modern-day snake oil.” Yet
policymakers are always searching for the next Silicon Valley because of
the critical link between tech innovation, economic growth and social
opportunity.

Previous efforts at such clusters failed
for a variety of reasons, but one big reason is that government efforts
alone simply don’t draw people. That’s why a recent crop of experiments
has focused more on building entrepreneurial communities, urban hubs and districts, and hackerspaces. Still, we’re “splitting the logic” on how to create an innovation ecosystem, according to MIT expert Fiona Murray in Technology Review:
We’re either going top-down by focusing primarily on
infrastructure—plunking down an office park next to a university—or
bottom-up by focusing on just the networks. None of these efforts
successfully pursue both paths at once, with government, academia and
entrepreneurial communities proceeding together in lockstep—as was the
case in the development of Silicon Valley.  

But policymakers shouldn’t be trying to copy Silicon
Valley. Instead, they should be figuring out what domain is (or could
be) specific to their region—and then removing the regulatory hurdles
for that particular domain. Because we don’t want 50 Silicon Valleys; we
want 50 different variations of Silicon Valley, all unique from each other and all focusing on different domains.

Imagine a Bitcoin Valley, for instance, where some country fully
legalizes cryptocurrencies for all financial functions. Or a Drone
Valley, where a particular region removes all legal barriers to flying
unmanned aerial vehicles locally. A Driverless Car Valley in a city that
allows experimentation with different autonomous car designs,
redesigned roadways and safety laws. A Stem Cell Valley. And so on.

There’s
a key difference from the if-you-build-it-they-will-come argument of
yore. Here, the focus is more on driving regulatory competition between
city, state and national governments. There are many new categories of
innovation out there and entrepreneurs eager to go after opportunities
within each of them. Rethinking the regulatory barriers in specific
industries would better draw the startups, researchers and divisions of
big companies that want to innovate in the vanguard of a particular
domain—while also exploring and addressing many of the difficult
regulatory issues along the way.
Why this approach? Compared with
previous innovation-cluster efforts where governments contrived to do
something unnatural, this proposal flows from what governments naturally
do best: create, or rather, relax laws.
Another
advantage of this approach is that it’s a way for clusters to
differentiate from each other and successfully compete for resources.
Think of it as a sort of “global arbitrage” around permissionless innovation—the
freedom to create new technologies without having to ask the powers
that be for their blessing. Entrepreneurs can take advantage of the
difference between opportunities in different regions, where innovation
in a particular domain of interest may be restricted in one region,
allowed and encouraged in another, or completely legal in still another.
For example, the laws and guidelines for using drones or taxing bitcoin already vary widely across the globe, just as they do for ride-sharing services across different cities in the United States.
But
the biggest advantage of the 50-different-Silicon Valleys approach
isn’t just in what it affords isolated regions or entrepreneurs—it’s in
accelerating innovation everywhere. Removing regulations across
different regions allows multiple innovation categories to advance
together at once, in parallel, without being bottlenecked by time or
place.
So what are the risks? Well, there’s a real possibility
that advanced regions will essentially outsource or “regulate away”
their own risk at the expense of less advanced ones. To get ahead,
poorer countries may become more tempted to take on the very things
wealthier countries are fencing out of their borders. But as long as the
innovations aren’t life-threatening—and many of the restricted domains
aren’t (the restrictions are often protecting incumbent interests)—a
model like this one provides a much faster and more feasible way for
developing regions to catch up. Especially when you consider the
advantage that previous innovation clusters didn’t have: mobile.

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Satoshi

WinkDex price gets added to Bloomberg

(newsBTC) Ah, the WinkDex. It’s the brain child of both Cameron and Tyler Winklevoss, two of the bitcoin community’s most prominent entities.
This simple but effective bitcoin price composite is the official
price measure of the Winklevoss’ bitcoin ETF, currently awaiting
regulatory approval by the United States Securities and Exchange
Commission.

And according to a post made on the Winklevoss Capital website,
the price data is now available on Bloomberg in a move some suggest may
further legitimize the digital currency in the eyes of traditional
financiers.
“We are honored to be working with Bloomberg to bring a blended
bitcoin price index to their wide-reaching investor community,” the post
read, adding that some new features (of which include an API) will be
unveiled in the weeks upcoming.

According to the announcement, the ticker for the WinkDex is very apt: WINKBTCO.

The Bloomberg terminal is a professional service used by financial
professionals. Each license to the service costs upwards of $20,000 per year.

For more information on the WinkDex, visit their official website.

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Satoshi

Bitcoin will surpass PayPal in US Dollar transactions, according to BVI Hedge Fund

(SBWIRE) Laureate sees the current dip in price at US$522.57 as an opportunity to buy the alternative currency that could increase 50 per cent in price in the near-term as it threatens to overtake PayPal in transactional volume for the first time 2014.
According to bitcoinwatch.com the daily average of bitcoins trading in US dollar transactions is nearly US$300 million.
CEO Peter Tasca of Laureate Trust states, “Whenever you have an instrument that trades over 300 million US dollars a day, it must be recognized. The digital currency works, Bitcoin has greater volume transactions than Western Union and we anticipate it will overtake PayPal later this year.” “In the next one or two years, Bitcoin can surpass the dollar transaction volumes of other established payment companies including Discover, and even American Express, MasterCard, and Visa,” stated SmartMetric CEO Chaya Hendrick.
Laureate Trust provides expert portfolio management that achieves optimal results. The proven trading strategies are based on four principles: diversification, technical analysis, trend following and risk management, which combined have the potential to profit from any economic situation. In 2013 this multiple platform strategy returned +23.01% net of all fees which has outperformed the Barron’s Top 100 Hedge Fund Average, Barclayhedge Fund Index Average and the S&P 500 Total Return Average.

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Satoshi

Malaysian retail giant i-Pmart will hold 100% of its Bitcoin Payments

(CoinDesk) Another e-commerce giant has joined the bitcoin world, with major
Malaysian online mobile phone and electronic parts retailer i-Pmart
adding it to the list of accepted payment methods last week.
CEO
and founder Mart Tang also said the company will hold onto the bitcoins
it earns and watch the price rise, rather than convert them into local
fiat currency.
Although based in Malaysia, the company ships
worldwide from outlets in its home country, plus China and the US. The
bitcoin option was introduced first to the Malaysian site only, though
international customers may still use that version.
All other i-Pmart sites worldwide will start accepting about 20 days from now, as soon as the integration process is complete.

Low-key launch

What’s most surprising about i-Pmart’s
decision is the lack of fanfare with which bitcoin was added to the
list of options. Rather than publicizing it, or even celebrating the
announcement with its 730,000+ fans
on Facebook, the company added the bare-bones line “We accept bitcoin”
and an icon into its long list of existing payment options.
ipmart options
i-Pmart
is also a big seller of litecoin mining equipment, selling GPU-based
rigs both to advanced users to self-assemble with the ‘Savvy Pack’, and a ‘Newbie Pack’ for beginners that includes the option to have i-Pmart assemble, host and even operate the hardware for them.
Despite this, however, the company is not adding litecoin as a payment option yet.

Bitcoin fan

CEO
Tang said his interest in bitcoin came from being an IT entrepreneur
always searching the Internet for the latest tech information and
gadgets.
Shortly after absorbing everything he could about bitcoin
and other digital currencies, he began hearing about merchants in other
countries accepting bitcoin and studied how to become a digital
currency miner himself.
“This gives me more insight into bitcoins and others types of coin on how it works and benefits from it,” he said.

“That’s
how I have started to think if I have customers who want to use bitcoin
to purchase my products online which gives convenience of various types
of payment choice especially those who do not prefer to pay using their
credit card, cash or other mode of payment.”

He then
sat down with his web development team to discuss how to integrate
bitcoin as a mode of payment in the business portal www.ipmart.com
globally.

“[I’m] looking forward to the new world of
virtual payment choice, which I believe can be the future of global
virtual currency that people might embrace, especially the Gen Y.”
“I
am holding the bitcoin. Because having a very big confidence the price
of bitcoin is not the rates of today USD 650, should be higher than this
price very soon.”

Company background

The i-Pmart Group of Companies was founded in 2001, and has focused mainly on the international market since 2005. It has ‘MSC status’ in Malaysia, meaning it is part of the country’s ‘Multimedia Super Corridor’ initiative designed to promote Malaysia as a regional center for world-class technology businesses.
The
group now consists of domestic and internationally-focused retail
sites, plus arms specializing in management, development, and logistics.

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Satoshi