‘Micky’ Malka on How Bitcoin Can Help the World’s Unbanked
Carrie Kirby (@carriekirby) | Published on March 31, 2014 at 16:01 BST | Analysis, Bitcoin Foundation, Coinbase, Investors, News, Regulation,

Meyer ‘Micky’ Malka – a director at the Bitcoin Foundation – has been a financial industry entrepreneur since the age of 18, first in his native Venezuela and later in Europe and the US, where he most recently founded mobile payments company Lemon Inc., now part of LifeLock.

Also founder of Ribbit Capital, Malka says he wants to use the firm “as an agent for change in the ossified and slow-to-change financial services category.” Besides investing in five companies in the space, Ribbit is investing directly in bitcoin – reportedly, along with Social+Capital Partnership, controlling 5% of the bitcoins currently in existence.

Malka sat down with CoinDesk at CoinSummit San Francisco to talk about why his firm is leading the charge to invest in the bitcoin space, how bitcoin can help people all over the world, and what needs to happen before bitcoin is ready for prime time.

Hands with coins

CoinDesk: How has your experience with hyperinflation and bank failures in Venezuela influenced your interest in bitcoin?

Malka: In Venezuela for the last 12 years, it’s been prohibitive to buy dollars, and it’s an economy where everything works in dollars. It’s become a giant black market. There’s an official exchange rate if you are importing medicine and basic goods, another exchange rate if you are a tourist, there’s another exchange rate if you are a businessman. There is another exchange rate if you want to buy dollars. It’s crazy.

There is no price if you want to hold assets outside of your country – in theory you can’t. It’s crazy that in 2014 we still have places like that.

What bitcoin can do and has been doing is: one, embracing transparency in a country where there isn’t any. It’s an asset for when you do not trust your government, which is a real aspect of what’s going on down there right now. And, two, allowing the economy to have to escape valves – ways to let this pressure out of the market.

Are there bitcoin startups in Venezuela filling this need?

No. There are no formal companies. It’s more informal entrepreneurs trying to start. Right now Venezuela is in crisis mode. It’s very hard to find people who are wiling to back entrepreneurs and fund companies when you’re in the middle of this. However, LocalBitcoins and Bitcoin Venezuela, gatherings, meetups and exchanges are coming up informally all over the country.

How does the interest in Venezuela compare to in the US?

It’s different because [here in the US] people think of bitcoins as speculation. Over there they think of it as a way to store value. There’s a big difference of mentality … what you can do with this.

When you don’t trust your government and you don’t trust their currency, the whole concept of having some sort of asset that is decentralized, that no one controls, that is scarce or limited, it’s very refreshing.

People like cars as an asset. My first car – my parents gave it to me – cost $6,000. I sold it for $11,000. That mentality is very different from what we have here.

So because bitcoin is so potentially useful to Venezuelans, does a larger portion of the population there know what it is?

No, not yet. Mainly because the country is going through so much crisis that no one is paying attention to it. But you’re starting to see more and more momentum.

You have warned that because bitcoin is in its infancy, no one should invest in it more than they can afford to lose. Yet, you have also spoken very confidently about the future of bitcoin, and Ribbit has purchased a large amount of bitcoin. Are you less cautious than you advise other people to be?

I am that cautious. I think this is an experiment in society. This is not a currency experiment. Can society trust an electronic ledger more than they can trust other aspects of life? Can they trust a ledger the same way they can trust gold or the governments printing money? That’s a big experiment. It doesn’t happen overnight. It took gold thousands of years to become what it is. It took governments three, four hundred years to become who they are.

You cannot expect bitcoin at four years old to take all that responsibility and act like a grown-up. It is still a toddler. That is a reality of this. Only as you see more people embracing it is it growing up. We’re not there yet. We’re super early. This is something you do from a venture capital perspective, something you do with what you’re willing to lose. This is not where you put your savings. That’s the difference.

I have a mandate. I’m getting paid by my investors to find asymmetric risks. That’s what a venture investor does. I cannot find anything more compelling than bitcoin to deliver that. But I also have to be able to go back to my investors and say, “Sorry, it didn’t work.” There’s nothing other than bitcoin that has that asymmetrical return right now in financial services. And also at the same time, it’s something that can really change society for the good.

At peak in the world there were a billion landlines. Now we have six billion mobile lines. It’s no coincidence that there are a billion bank accounts, but there are seven billion people. What are the chances of the banks banking the other six billion people, and what are the chances of something like bitcoin helping solve financial problems for that six billion? It’s just too big of an opportunity. That’s why I find nothing more interesting than this right now.

Are you disclosing how many bitcoins Ribbit is holding now?

No. It’s a very large position.

Will Ribbit buy more bitcoins?

No, because our mandate is to find the companies. When we bought our bitcoin position, it was in a time when there were no entrepreneurs or companies that were worth backing. Right now we’re seeing a great number of entrepreneurs and business ideas, and more interest from the ecosystem, so we’d rather back those.

Can you walk us through Ribbit’s investments in the digital currency space – what companies, how much is invested in each, and why you chose them?

We’ve announced four out of the five that we’re funding. Coinbase, Xapo, BTCjam and Pantera. Coinbase because it’s the most trusted brand in the US for consumers to buy into bitcoins. Xapo is the ultimate and the best storage solution for bitcoins in the world right now – it gives you protection and insurance. BTCjam is building the first worldwide lending network on top of bitcoin. Pantera is the largest bitcoin currency fund in the world and is structured as a hedge fund.

In aggregate, we are probably the venture investor with the most exposure in the world to bitcoins, between those investments and the coins, of course.

What are your further plans for investing in the space through Ribbit? What are the big unmet needs that you would like to see new companies filling?

Right now we need a combination of two things:

More companies that are helping customers embrace bitcoin. We need more customers in this ecosystem. We need to add zeros. Whatever is building trust in the consumer, and making them understand what bitcoin can do for them, that’s what we’re interested in investing in. Ribbit is a fund that only invests in consumer financial services. We only invest in companies that are disrupting the consumer experience with financial products. That’s our mandate, the only thing we look at. We’re very consumer-centric.

Once that happens – and it hasn’t happened yet – the second thing is using bitcoins as a protocol, not so much as a service but as a protocol. That’s something that hasn’t been done yet in things that will matter to consumers. One company that we are backing super early is creating a lending network around the world. They’re using bitcoin not as a currency, not as an asset, but as a protocol to allow people to invest and borrow from other people all over the world. That’s a user case. Somebody in India is saying I need to borrow money, and someone in Germany is willing to lend them money. You put them together.

You were recently elected to the board of the Bitcoin Foundation. Why did you want to be involved with the organization, and do you have goals for your tenure?

Meyer Micky MalkaI’ve been a serial entrepreneur in this space for 20 years. I built four companies. I’ve been regulated by eight central banks. I lived in Europe, I lived in Latin America, I now live in the US. I thought that if I really believe in bitcoin, I had to also contribute back to it. Being part of the foundation with that kind of background was a good way of getting involved in trying to shape how regulators think of bitcoin and how to expand the foundation to something global, not something US-centric.

You have said that Mt. Gox’s failure was more a case of one bad apple than a sign of a troubled system. Can you explain why you see it that way?

There were too many signals for too long that they were really inefficiently running their business. This is a company that a year ago had troubles with the law in the US; the government froze their money. They started to impede deposits and withdrawals eight months ago. It was like a slow death. It was not like overnight something blew up and trust got destroyed. This was a slow motion movie of a company going under for awhile. It shows that this is a problem of early entrepreneurs not being backed by the right investors, not having checks and balances, not working with regulators, not being transparent to their customer base. They were never transparent. They never communicated what was going on.

When you look at Coinbase’s weekly blogs or Bitstamp’s communications or Bitpay’s investors or Xapos’ insurance policies, it’s a whole different system. There are much better entrepreneurs and companies out there.

What are the biggest problems that need to be worked out with bitcoin before it can reach its potential?

Number one, we need more entrepreneurs willing to work with regulators. You cannot only depend on the foundation to solve your regulatory issues.

Two, you want to see more simple user cases that are daily life, not corner cases. We need to see more simple usages of bitcoin solving real daily problems. The ecosystem is not behaving like that, still. You need more financial institutions willing to embrace bitcoins. They don’t know if bitcoin is a friend or a foe.

With those things in place, venture capital will keep coming in, and then you create this ecosystem.

A lot of the talk about bitcoin is about who might get rich from it. Given your background in banking and low-cost financial services, can you talk about bitcoin’s promise for low-income people internationally?

This is the way I think about it: six billion people have the same device I have [Malka holds up his phone]. Can they buy a $1 app the same way you and I can? They can’t, for a few reasons. Sometimes they make $1 salaries, so they cannot afford a $1 app. Second, they don’t have a bank account to buy a $1 app. They have the same device, but they can’t use it the same way. Would they buy that app if it cost 1 cent? Probably yes. Can somebody charge 1 cent? Probably not, because Visa and MasterCard and bank transactions are more expensive than that. Can bitcoin solve that issue? Definitely. Microtransations for the six billion people. So there’s a clear user case right there, which is simply letting anybody in the world buy the same apps you and I buy, which is not happening right now.

The other one is, people want to store value in something other than gold or dollars, or something other than local currency. This has a chance of being one of those solutions.

This article has been edited for length and clarity.

$46k Spent on Mining Hardware: Who Will Deliver the Goods?
Dario Di Pardo (@dariodipardo) | Published on March 31, 2014 at 14:38 BST | Analysis, Cointerra, KnCMiner, Mining, Technology

Manufacturers of digital currency mining equipment have become notorious for their long delays in shipments and poor customer service. But is this general perception actually the case?

In this personal mining hardware roundup, Dario Di Pardo gives us his insight into the world of the frustrated miner, after personally dealing with a number of mining hardware makers over the last five months, and dealing with widely varying levels of delay, customer services and offers of compensation or refund.

Black Arrow

Prospero X3

Product: Prospero X-3 (2 TH/s)
Price including shipping: $4,978
Order date: November 18th, 2013
Anticipated shipping date: February 24th, 2014
Expected delay: 2-3 months

After ordering in November and expecting delivery in February, shipping has now been delayed till May 1st due to power consumption issues with Black Arrow’s 28nm ASIC chip.

To compensate for the delay, however, the company offered free cloud hashing power for six months – effectively worth 25% of the purchased hashing power.

Tape-out of the improved chip was completed on February 23rd, and no further issues that could endanger the new shipping date are foreseen.

Customer support has been somewhat slow, but still reasonable.

HashFast

Hashfast minerProduct: Sierra (1.2 TH/s)
Price including shipping: $6,696
Order date: November 18th, 2013
‘Guaranteed’ delivery date: February 15th, 2014
Expected delay: 2.5 months

In December, a production update was communicated via email. Unfortunately, it also contained the email addresses of all HashFast customers, thus compromising their privacy, as well as mine.

My initial order confirmation gave February 15th as the ‘guaranteed delivery date’ (deliveries after this date entitle buyers to a refund). In January, however, I received an email giving March 31st as the new ‘guaranteed delivery date’. The email came without any complementary information whatsoever.

I received a further email on 28th March concerning shipping updates. Basically in my case (Batch 3), I must accept another month of delay (May shipment) or I can ‘upgrade’ my order to the new Sierra EVO (2 TH/s).

The latter option would also mean later shipment (end of May) and because it will be a kit, I would have to buy my own power supplies.

Ironically enough, people who placed an order for the Sierra EVO (available as of 20th February) will seemingly get theirs before I do, in April, this is despite the fact that I ordered mine three months before them.

Bitcoin refund requests from early customers who paid their order in bitcoins were refused and offered refunds in fiat at USD hardware pricing at the time of purchase instead. According some displeased customers, who are now considering legal action against HashFast, the terms of service clearly stated that orders paid in bitcoins would be refunded with the same amount of bitcoins.

Facing a one-week backlog, their customer support strikes me as questionable: some emails are ignored, while others are answered with generic replies.

No compensation for the delivery delay has been offered at this time.

Virtual Mining Corporation (VMC)

VMC miner

Product: Fast-Hash One Platinum Edition (1 TH/s)
Price including shipping: $6,479
Order date: November 24th, 2013
Anticipated shipping date: January 2014
Delay: 8 months?

Production of VMC’s consumer mining machines is subject to a significant delay, due to underperformance of the 28nm ASIC chip manufactured by eASIC.

According Kenneth E. Slaughter, CEO of VMC, which is a subsidiary of Active Mining Corporation, customers who wish to cancel their pre-order will be refunded in full.

Strangely enough, this delay is not being communicated to the company’s customers, neither by email nor via the website. One can only discover this information by checking the forums.

Considering the delay and lack of communication, I decided to apply for a refund on January 10th.

The only refund method is by cheque, and I received mine about a month after my application. Unfortunately the cheque came with a misspelling in my name, so that cashing it in was impossible.

The cheque was sent back with an accompanying letter clearly stating the correct spelling of the recipient’s name, just to be sure.

However, mid-March a new cheque arrived containing the same misspelling and, this time, it wasn’t signed either. At this point I started to wonder whether these errors were being done on purpose to delay the refund.

Declining my request to have the funds wired to my bank account instead, VMC will now be sending a third cheque (after receiving the unsigned one back from me).

So, maybe with some luck, some four to five months after applying for a refund, I will actually get my money back.

Despite all this, their customer service team has pretty good response times to email inquiries.

Bitmine

Coincraft minerProduct: CoinCraft Desk (1 TH/s)
Price including shipping: $5,758
Order date: November 28th, 2013
Anticipated shipping date: February (week 1)
Expected delay: 2.5 to 3 months

After a three months’ delay, Bitmine began shipping their first CoinCraft Desk units on the 12th of February.

According to CEO Giorgio Massarotto, exactly one month thereafter, about 250 units were delivered, which would average out at a production capacity of 12 units a day.

Some customers have claimed the slow production rate is due to a deal Bitmine made with PETA-MINE, allowing them to cut in front of the delivery queue, causing extra delay for ordinary customers. This has not been confirmed, however.

In addition, Bitmine is currently experiencing a shortage of 1300W power supplies, which are needed for a fully populated (1 TH/s) CoinCraft Desk. Also a result of the PETA-MINE deal, according to some commenters.

Early recipients of the hardware have also reported that the Desk’s ‘turbo mode’ doesn’t work as advertised. For a 1 TH/s Desk ‘turbo mode’ would allow hash rates up to 1.5 TH/s. In reality it doesn’t even come close to that number, they said.

Those who have ordered a CoinCraft Rig unit will have to cope with yet more delay, in the sense that shipment of these units has yet to be started. A recently published news update on the company website says this is expected in early April.

To compensate for the delay, Bitmine has a customer protection plan in place, which the company says consists of the following:

1) Shipment can be late up to a maximum of 10 days from the agreed shipment date.
2) For each subsequent 10 days of late shipping, we will add for free 10% more hashing power to your order as penalty.
3) After the 61st day of late shipment, you have the right to request a full refund and we will pay you an additional penalty of 10% of the initial order amount.

However, Bitmine recently announced on its official forum (just before it was closed down for about a week due to personal insults towards the CEO) that the maximum bonus hashing power was limited to 50% – a fact not mentioned in their customer protection plan.

This fact, in addition to the PETA-MINE story and the CoinCraft Desk’s ‘turbo mode’ issues, has led to many upset customers.

From the end of February till mid-March emails were answered with a delay of one to two weeks. During this period it was also very difficult to get a support representative on the phone.

Bitmine has worked through its support tickets backlog, however, and you can now expect a response time of about one day.

So far, Bitmine has been unable to provide an estimated shipment date for my order.

KnCMiner

KNCminer

Product: Neptune (3 TH/s)
Price including shipping: $10,175
Pre-order date: January 7th, 2014
Anticipated shipping date: Q2 2014
Expected delay: None

Having taped out their 20nm ASIC chip in February, KnCMiner seems on track for the Q2 delivery of the 3 TH/s SHA-256 mining rig.

In case a delay should occur, KnCMiner has said it will compensate customers with a free hosted hashing package as part of its so-called ‘Plan B’.

Alpha Technology

Alpha Viper minerProduct: Viper (Scrypt) Miner (90 MH/s)
Price excluding shipping: £5,450 ($8,984)
Pre-order date: January 10th, 2014
Anticipated shipping date: July 2014
Expected delay: None

Shortly after the KnCMiner 100 MH/s scrypt miner announcement on March 3rd, Alpha Technology struck back with updated specifications for both of its upcoming miners.

The hash rate of the 5 MH/s scrypt miner has increased to 16 MH/s, while the 25 MH/s rig will be mining at 90 MH/s. Prices have not increased as a result.

Regular development updates contribute to a good customer experience so far.

CoinTerra

CoinTerra miner

Product: TerraMiner IV (2 TH/s)
Price including shipping: $6,569
Order date: January 12th, 2014
Anticipated shipping date: May 2014
Expected delay: None

CoinTerra’s January and February batches were shipped out with a delay of about a month.

Because hardware specifications have been lower than anticipated – with a hash rate up to 1.72 TH/s instead of the advertised 2 TH/s and a 20% power draw increase – early customers were offered a 15% discount coupon redeemable against their next CoinTerra hardware purchase.

Seemingly now on track for delivery of later batches, they are working on improving the miner’s performance and power efficiency to meet its initial specifications.

IRS Bitcoin Ruling May Have a Bright Side
Jon Matonis (@jonmatonis) | Published on March 31, 2014 at 13:28 BST | Analysis, News, Regulation, US & Canada

Last week’s guidance from the IRS on tax treatment for bitcoin transactions may have temporarily impeded one avenue in a single jurisdiction, but it has opened up another more significant avenue.

An IRS “property” classification for bitcoin reaffirms it’s status as “digital gold” because it tacitly encourages one type of monetary activity (store of value) over another (medium of exchange).

If bitcoin is digital gold, then gold is analog bitcoin. Both commodities have a significant economic role to play going forward because one is a consensual store of value based on chemical properties and the other is a consensual store of value based on mathematical properties.

This ruling was a lose-lose scenario for the IRS because an alternative tax ruling for treating bitcoin as a currency would have placed it in direct transactional competition with the US dollar. The Department of the Treasury was loath to do that at least from a tax perspective.

The big picture

In the big picture of so-called monetary transactions, economies support three basic types of transactions: person-to-business (P2B), business-to-business (B2B), and person-to-person (P2P). One could also include business-to-person (B2P), but I tend to leave that in the category of P2B.

These classifications hold up whether transactions are physical or digital and also whether transactions are domestic or international.

“Even prior to the Internet, practical monetary transactions demanded easy divisibility and reasonable carry costs.”

Regarding tax treatment in various jurisdictions, the only transaction classes affected would be P2B and some B2B in the jurisdictions enforcing merchant compliance for customer identity reporting. Hence, merchant compliance becomes a point of enforcement for authorities.

This is important because any tax rulings that bestow preferential treatment on bitcoin as a commodity will tend to nudge bitcoin (XBT) in the direction of a store of value perhaps backing alternate types of currency issuance or handling predominately large cross-border transactions – exactly the role played by gold (XAU) today.

Since gold and bitcoin are both monetary commodities that don’t represent another party’s liabilities, they become a medium of last resort for transactions without counterparty risk.

The two most prominent monetary metals in the world are gold and silver and while they might have established themselves initially in physical hand-to-hand exchanges, their usage has evolved beyond that. Even prior to the Internet, practical monetary transactions demanded easy divisibility and reasonable carry costs.

Dual properties

Bitcoin has the advantage of being both a potential long-term store of value and a useful medium in ordinary day-to-day transaction settings. The fact that bitcoin accommodates both makes its ultimate outcome more a function of jurisdictional treatment than commodity properties.

Remember, two of bitcoin’s medium-of-exchange advantages over gold are its near-infinite sub-divisibility and its near-zero transportation cost over long distances.

Cypherpunk hacker juno moneta tweeted:


What does this statement mean? Who wants to transform bitcoin?

To understand the answer to that, one must understand how PayPal willingly transformed itself in the regulatory sphere to get mainstream adoption. If the bitcoin innovators end up with a PayPal-like system saddled with third-party choke points, what has really changed in the payments world? Our twitter commentator states that the current IRS ruling happily steers bitcoin in the opposite direction.

Whereas PayPal never had the capability to evolve in the opposite direction, the distributed bitcoin network and its corresponding unit of value bitcoin certainly does. This is where the really big boys play.

The IRS ruling is also likely to elevate digital gold bitcoin into some form of reserve currency status and the vehicle of choice for large cross-border transactions. It would not be unusual to see this emergence as different jurisdictions will undoubtedly have varying treatments for “official” bitcoin classification.

Additionally, this outcome would support the thesis that larger international exchanges operate like bitcoin clearing houses while the domestic or regional exchanges satisfy the local markets.

About reserve currency

reserve

Reserve currency status refers to the use of a favored monetary instrument or commodity that is commonly held by nation-states and institutions for foreign exchange reserves and large cross-border transactions.

Reserve currencies, like gold, can also be used for the ultimate backing of a government’s own monetary regimes as in the currency substitution cases of Panama, Barbados, Bermuda, and Uruguay.

Bitcoin as a reserve currency asset has appeal because it is non-governmental and global in nature. Its sustainability will not be affected by regional political instability and it has the potential to outlast certain countries and their form of government. Bitcoin is governed by the laws of mathematics.

In the case of large cross-border transactions, bitcoin has appeal because it knows no political boundaries nor is it hampered by capital controls, orchestrated payment blockades, and foreign exchange restrictions. As these transactions are typically performed by sovereigns or large institutions, the jurisdictional tax treatment will probably not be a concern. Possible use cases include closed-loop diamond brokers settling intra-network trades or even partner countries within a trading bloc seeking a pricing and settlement unit other than USD.

Institutional and sovereign transactions fall under the B2B payments category and they also could provide the valuable underpinning for bitcoin price discovery absent sufficient retail price discovery. Just as end-to-end encrypted email messaging, on-network P2P bitcoin transactions exist in a world of their own.

BTC-e Now Offers Trading in Chinese Yuan
Jon Southurst (@southtopia) | Published on March 31, 2014 at 06:38 BST | BTC-e, Companies, Exchanges, News

Popular digital currency exchange BTC-e announced today it would begin trading in Chinese ‘offshore yuan’ (CNH), becoming the first international bitcoin exchange to offer both US dollars and yuan, and opening a field of new opportunities for currency speculators.

“We are pleased to inform that new trading instruments with Chinese offshore Yuan has been added. Now btc-e clients can trade 3 new instruments. A unique trading instruments that enables you to benefit either from price fall or increase are now available in your btc-e MetaTrader4 and WebTrader platforms under following symbols: USD/CNH (available on WebTrader only), BTC/CNH, LTC/CNH.”

‘Offshore yuan’ (CNH) refers to the amounts of Chinese yuan (CNY), also called renminbi (RMB), available for trade on international markets by businesses, usually at slightly higher value than the official version thanks to the added accessibility.

Offshore yuan is the fourth fiat currency offered for trading on BTC-e, the others being US dollars, Euros, and Russian rubles. It also allows trading between these currencies, as well as bitcoin and a selection of seven alternative cryptocurrencies including litecoin, namecoin and peercoin. To fund a BTC-e account with CNH, users must wire money via a National Australia Bank (NAB) account in Sydney.

BTC-e’s news came just as a local Chinese exchange, Bter, announced it will halt deposits from banks due to advice related to expected stricter controls over, or outright ban on, interactions between digital currency exchanges and Chinese banks.

At publication time, the BTC/CNH price was ¥2594 ($417.5), slightly below the CNY-proper rates of ¥2755 ($443.46) on Huobi and BTC China.

Screen Shot 2014-03-31 at 2.09.38 PM

Limited trade only

Thanks to strict capital controls, yuan is not freely tradable on world forex markets and its value is more rigid. It is not legal tender in Taiwan, Hong Kong or Macau, but often accepted and banks there offer yuan-denominated accounts. Hong Kong started the first offshore market in 2004.

Banks in Singapore and London also allow trading to and from CNH, and Taiwanese banks were permitted to open yuan accounts beginning 2012. Forex convertibility is limited to businesses for trade, investment and borrowing purposes and there are few, if any, chances for individuals to join in.

The Chinese government has allowed the yuan to float within a limited range since 2006, when a US dollar peg was removed.

Bitcoin another option

These controls are often listed as one of the main reasons for bitcoin’s popularity with speculators and wealthy investors in China – it offers them a far easier option to move money out of the country, trade it into another more liquid currency and invest in a wider range of foreign alternatives. Investment opportunities within China itself are limited largely to real estate or to a lesser extent, shares in local companies.

Despite reports last week that the People’s Bank of China (PBOC) was about to clamp down with a complete ban on banks doing business with bitcoin exchanges, companies there have reported no official announcement yet. Still, the international bitcoin price fell below $500 after the news and remains around $445.

BTC-e is one of the world’s three most popular bitcoin exchanges, and also the least compliant in the traditional financial sense, requiring only an email address to open an account and trade in any of the available currencies. Funding accounts with fiat is tricky, however, without going through a more compliant bank or payment processing company.

UK Bitcoin Exchange Bit121 Temporarily Ceases Operations
Nermin Hajdarbegovic | Published on March 31, 2014 at 12:35 BST | Exchanges, News

UK-based bitcoin exchange Bit121 has announced that it will suspend trading and temporarily close today, March 31st. Although the exchange has indicated that the closure is not permanent, it has not said when it will reopen.

Bit121 said most of the site’s functionality was removed on March 26th. However, users have been able to view account balances and statements, withdraw any sterling balance greater than £50 with no fee, and withdraw any bitcoins held with the exchange. All orders have been cancelled.

On Thursday (27th March), the exchange started carrying out withdrawal transactions on every account with a positive GBP balance.

Merely ‘hibernating’

Bit121 had urged all users to withdraw their bitcoins prior to today’s closure. The exchange maintained that it has been making every effort to contact all account holders individually to offer any help and support required.

Said the exchange:

“Despite regretfully closing our doors for now, we like to think we have simply gone into hibernation, and we fully intend to re-open at some point in the near future.  We have learned a great deal and gained a lot of experience in our 4-5 months of running a bitcoin exchange. It has been a challenging few months without a doubt but also a lot of fun. We would like to thank all our customers for your business, your support, your feedback and your understanding.”

Bit121 added that it is closing down in an orderly fashion and that it has already refunded sterling balances. Returning all customers’ bitcoins, however, will take a little longer, as some customers do not hold personal wallets.

Payment issues

When it launched, Bit121 teamed up with payment service provider PacNet Services Ltd, which in turn worked with Barclays PLC. However, since then, the relationship with PacNet Services has broken down.

The exchange told CoinDesk that it decided to close because it was simply taking too long to secure an alternative banking partner.

Bit121 told CoinDesk:

“Rather than have the website sitting dormant with minimal activity, it made sense to temporarily close Bit121 until a suitable banking partner has been secured. The likelihood is that there will need to be some redesign of back-end processes anyway once we re-launch, so the closure will provide us with some time and space to make some necessary changes to our processes and potentially some improvements to both the back-end processes and the bit121 website.

“Our top priority is our customers and the service that we provide to them. We will only re-launch, when we are certain that we can provide a high-quality and competitive service to our customers.”

About Bit121

Never a large exchange, Bit121 launched last November and a month later chief executive Jim Iddiols said daily trading volume was about £100,000, with more than 500 registered users.

The exchange suffered a few teething problems shortly after it was launched, forcing it to suspend trading in on 28th November. Shortly thereafter, Bit121 resumed services after it found that there was, in fact, no glitch at all.

The exchange stored most of its holdings in cold storage and it maintained only a very small number of bitcoins in its hot wallet. No security issues were reported and, for better or worse, Bit121 didn’t make that many headlines – usually a good thing when it comes to bitcoin exchanges.

For Brits despairing at the lack of exchange options, there is good news, however, as the departure of Bit121 coincides with the launch of Coinfloor, a new outfit that seems intent on becoming Britain’s premier bitcoin exchange.

Why Bitcoin Faces an Uphill Battle in the Remittance Market
Pete Rizzo (@pete_rizzo_) | Published on March 31, 2014 at 11:33 BST | Analysis, News, Regulation, Startups

One of the most routinely cited use cases for bitcoin is in the international remittance market – the financial sector worth over $500bn a year that specializes in facilitating transactions across borders at a markup that reduces the total money sent by 9% on average.

Given the high cost the remittance services, it’s no surprise that many in the bitcoin industry take its potential in the space for granted. After all, its underlying technology offers anyone the ability to conduct low-cost, peer-to-peer payments without restriction.

Due to the power of the technology, it can sound like the traditional remittance market is already dead in the water. However, what’s not often considered is that the technology might not be allowed to reach its full potential.

According to Andrew Brown, head of compliance at cross-border payments specialist Earthport, the current high fees in the traditional remittance market aren’t just imposed by greedy service providers.

Brown believes much of these charges come from the added costs of compliance and regulation, costs that won’t just disappear when bitcoin businesses enter the market. His prediction in light of this estimation is grim:

“By the time all those obligations have been applied, I don’t think any apparent advantage [for bitcoin] will be left.”

Although Brown doesn’t specialize in digital currency, testimonials from bitcoin entrepreneurs in the field suggest similar difficulties, if less dire, conclusions.

Tomas Alvarez, CEO of bitcoin remittance startup Coincove, for example, was forced back to the drawing board on his bitcoin remittance plans after being regulated out of the US market.

Explains Alvarez:

“We were banking on bitcoin being unregulated, allowing us to build, test and validate before regulations were enacted in our target countries. Unfortunately, the US beat us by a few months and effectively declared bitcoin as money, making it prohibitive for a startup to get licenses.”

As Alvarez’s story shows, bitcoin businesses are potentially facing a long, uphill battle on the remittance front.

The high cost of failure

Perhaps most notable of Brown’s concerns was that current regulation poses a formidable barrier even to new traditional remittance businesses. For example, Brown notes that the banking networks that service remittance providers are increasingly deciding not to serve aspiring entrants.

Brown cautioned that bitcoin can’t be seen as the “weak leak” when it comes to money laundering, a criticism that has been prevalent of bitcoin among law enforcement officials:

“There is so much invested by governments, international bodies and law enforcement agencies in the regulatory framework around trying to prevent organized crime [...] No government is going to suddenly leave open a back door to let some murky waters in.”

In particular, Brown cited the $1.9bn fine imposed on HSBC for facilitating money laundering through its remittance service in Somalia.

The catch-22 inherent in the current system was perhaps summed up by Forbes, when it wrote:

“Essentially, we can have a banking system with the current rules and regulations about money laundering or we can have a banking system that can handle remittances into Somalia. But what we cannot have is both: for the regulations are too expensive to allow the sending of small remittances into Somalia.”

Mexico, one of the markets in which Coincove is working, for example, has very strict AML guidelines due to the local drug trade, and high penalties for non-compliance. But, Alvarez said that he believes Coincove can adapt around this challenge, saying:

“We believe that as long as we start developing our own AML and KYC framework from this early stage, we will be well-prepared if and when the Mexican government decides to regulate bitcoin.”

Coincove is not considered a money business in Mexico, but it is following the guidelines as a preemptive measure, Alvarez says. Due to these steps, he says his group is now working with domestic payment processors and banks.

Juan Llanos, a risk and compliance expert who serves on the Bitcoin Foundation‘s regulatory affairs committee, however, notes that compliance is different from the risk of money laundering.

He told CoinDesk: “You can be non-compliant and still have low money-laundering risk because of the nature and size of your business.”

Regulatory uncertainty

The foremost reason Brown suggests bitcoin remittance businesses will struggle is because of the different ways digital currencies are being approached by regulators. He noted that in China its use is severely restricted, while in Norway it’s treated as an asset.

Due to these differences, Brown says, regulators will not provide bitcoin remittance businesses with the free reign they may need to innovate.

Alvarez echoed this danger. Coincove is now operating in Latin America, due in part to its slow response on digital currency regulation, providing it exactly this testing ground.

“Given the uncertainties around the state of bitcoin in most countries at this point, it’s probably wise to start off with jurisdictions that you are familiar with.”

However, as an early market entrant, he sees an opportunity to influence regulation through eventual dialogue in these countries.

Brown acknowledged that companies that facilitate remittances between certain lucrative markets may be the most likely to take hold, provided the legislative framework is complementary, and so far Coincove provides evidence to this claim.

However, as Alvarez indicates, it still finds itself locked out of the US, the largest sender of remittances, so such arrangements are inherently limiting to the expansion of his business.

Bank ‘discrimination’

Llanos was more optimistic than Brown, noting that technology always outpaces regulation and that, although there will be challenges ahead, bitcoin can find a way to overcome them.

Still, he mentioned similar challenges to those cited up by Brown, indicating that both Western Union and a new bitcoin remittance startup with no customers and no volume, would still be expected to meet the same licensing and anti-money laundering requirements.

Said Llanos:

“Granted, each is supposed to be treated differently by virtue of the basic and highly-touted ‘risk-based approach’ principle, but that doesn’t necessarily happen. The reality is that regulators and bankers more often than not expect 100% compliance without regard to the likelihood and impact of the risks, the size of the businesses or the reach of a product.”

With the right know-how and resources, he says, licensing can be achieved, but the inability to obtain banking services is yet another hurdle. However, Llanos suggested that the entire financial industry – from remittance to prepaid card providers, is facing these challenges:

“There are very few, too few, banks who are willing to consider opening an account [in these cases]. The regulatory pressures they themselves are under and the business case do not always justify taking the risk of banking this class of business. It’s really incredible, but an entire industry class is being discriminated against, just by virtue of the nature of the business.”

Furthermore, even once banks get on board, liquidity is another obstacle – due in part to the nature of the markets in which remittance businesses operate. Llanos explained:

“Because buyers of digital currency are so few in the biggest payout jurisdictions – Mexico, India, the Philippines, Africa – this is bound to continue to be a big roadblock for some time.”

What lies ahead

Of course, given that bitcoin can be transmitted freely by users without boundaries, it remains unclear exactly what function bitcoin remittance businesses would provide consumers.

Alvarez, however, disagrees with this notion. He believes bitcoin remittance companies will be essential, especially in the early stages, as there is very little overlap between his target market and current bitcoin users.

“From the insights that we gathered about remittance senders and receivers, we can foresee that bitcoin may not be a technology that they’d directly want to interact with for many years to come – many of them don’t even feel comfortable with traditional banking systems or credit/debit card services.”

Alvarez concluded:

“In this sense, I believe that the main value added by remittance businesses would be empathy: developing a product with a deep understanding of the unique needs and desires of the specific market that is remittance senders.”

As for when Alvarez may be able to reach such a goal in a cost-effective manner, Llanos says that is a matter bitcoin’s proponents will ultimately decide.

“The industry needs to band together, speak up and invest in formal and informal efforts to influence policymakers, legislators and regulators to really pay attention to the issues and effect the necessary changes. [...] The Bitcoin Foundation also has committees working on these issues and many other groups are forming worldwide with the same goals.”

Even though he supports this burgeoning industry, Llanos questions whether more traditional remittance businesses based on bitcoin will be necessary given the technology’s ability:

“I see the evolution of remittances from the regulated intermediaries of today to truly peer-to-peer remittances happening very soon.”

The Death of Windows XP Won’t Kill the ATM Industry, or Help Bitcoin
Nermin Hajdarbegovic | Published on March 30, 2014 at 09:09 BST | Analysis, Bitcoin ATM, Technology

Microsoft is planning to cut off support for Windows XP next month, but the move won’t have the major impact on the ATM industry that many pundits believe.

And contrary to what some bitcoiners say, it won’t do anything to help the bitcoin economy of the fledgling bitcoin ATM industry, either.

Official support for Windows XP is set to end on 8th April, which has prompted many commentators to conclude that the ATM industry will be in a world of trouble as soon as the clock hits midnight. In some respects this echoes the ‘Millennium bug’ (Y2K) fear, uncertainty and doubt that spread 15 years ago as the year 2000 approached.

These statements also happen to be just as spectacularly wrong as the Y2K scaremongering. While the move by Microsoft is a nuisance and is already causing some problems for ATM operators, the impact of the decision has been greatly exaggerated.

What will really happen

Microsoft XPHere are the facts. Microsoft is going to end support for Windows XP on 8th April. This is not exactly an unexpected decision, Microsoft has delayed cutting off support for a while. In addition, it will not cut support entirely. It will still offer anti-malware updates, although security updates will stop.

Approximately 95% of all ATMs run Windows XP and it is estimated that more than 60% of these will keep running the OS after the cut-off date. However, these worrisome statistics do not paint the full picture.

It is important to understand that ATMs run different versions of Windows XP, and a sizeable number run stripped-down, embedded versions of the operating system. Microsoft is not ending support for embedded XP – support for these units will continue well into 2016.

It is also possible that ATM operators with non-embedded versions will get a temporary reprieve. The fact that Microsoft will end support for consumer products does not necessarily mean that ATM operators don’t have contingency plans that involve an extension of official support past the April deadline.

The logical upgrade path would require many ATMs to move to Windows 7, which might not be practical for some operators due to hardware compatibility problems or financial concerns. Effectively, it would mess up their hardware upgrade timetable and cost them money.

Compliance requirements

ATMs need to meet Payment Card Industry Security Standards (PCI SSC) in order to get a green light. Microsoft has said XP users will be considered “unprotected” after it cuts off support next month.

However, that’s just part of the story. In fact, Windows XP ATMs will still be able to meet the requirements even without a new OS. The industry had plenty of time to prepare for the cut-off.

The PCI SSC clearly states that Windows XP devices will be able to meet its standards after the cut-off, provided their operators make the necessary adjustments. In essence, ATM operators will know what to do when the time comes, as they had plenty of time to prepare.

“The bottom line is: don't buy into the hype. Come April 9th, your local ATM will still spit out cash.”

Even regular consumers and small businesses don’t need to be overly concerned. Lack of official support does not mean that XP boxes will turn into malware-ridden botnet zombies overnight. Apart from the promised official anti-malware releases, security firms will also be offering vendors third-party protection.

Malwarebytes has launched an updated version of its Anti-Malware Premium suite this week, and the company says it will support XP users for life. As many as 20% of Malwarebyte users are still running XP.

Coincidentally, the company recently got a bit of love from the cryptocurrecncy community, after it started accepting bitcoin for its products.

Alternatives to XP

LinuxAs pointed out, Microsoft’s decision to cut support for Windows XP has messed up ATM upgrade timetables. But if an ATM operator has a unit that currently runs XP, but for some reason it cannot be upgraded to Windows 7, there are a number of alternatives.

One is, of course, to patch XP and ensure compliance without Microsoft. This is possible, in theory, although the solution is neither simple nor elegant.

The second alternative is to go for an alternative OS altogether.

This is not as farfetched as it sounds: Linux has a much smaller footprint than Windows 7 and, as a result, some ATM operators are considering a switch to Linux rather than the Microsoft product.

This would not be the first time ATMs have transitioned to a different OS. Before the industry moved to XP, most ATM’s were running IBM’s OS/2 operating system.

Money talks

It’s a matter of economics, not tech. As Computerworld points out, a new ATM costs $15,000-$60,000 and the typical lifecycle is seven to 10 years. This explains why some operators are reluctant to upgrade their hardware – it just doesn’t make financial sense.

The bottom line is: don’t buy into the hype or fall for the FUD. Come April 9th, your local ATM will still spit out cash.

Over the next few months, many ATMs will get a new operating system, or tweaks to the old one, that will enable them to meet compliance standards until they are replaced or upgraded. The vast majority of people won’t notice a thing, apart from a nicer user interface on their local ATM.

People who think most ATMs will simply die without official support are probably the same people who bought into the Y2K hype all those years ago. Besides, even if they did, it wouldn’t have much of an effect on digital currencies and bitcoin ATMs. That’s a case of wishful thinking and nothing more.

What’s more, the fact that bitcoin ATMs are manufactured by small outfits means that in the long run could be in an even worse situation, as small companies don’t tend to offer much in the way of long-term software support.

They simply lack the resources and, in many cases, startups in niche industries don’t survive. That is not a concern for the time being, since bitcoin ATMs are practically brand new.

However, imagine a world with tens of thousands of unstandardised bitcoin ATMs, produced by dozens of companies over the course of a decade or so?

Nermin Hajdarbegovic is a freelance opinion and news writer for CoinDesk: his opinions do not necessarily reflect those of CoinDesk.

Mt. Gox Used Client Money for Operations and Extravagances, Allege Staff
Jon Southurst (@southtopia) | Published on March 30, 2014 at 12:35 BST | Companies, Exchanges, Mt. Gox, News

Mt. Gox allegedly spent money from its clients’ deposits on operating expenses including extravagances as early as two years before it went bankrupt, according to new claims by employees.

In a series of exclusive interviews given to Reuters in Tokyo, the small group of anonymous current and former Mt. Gox employees claim to have approached CEO Mark Karpeles about their concerns in early 2012, but their requests to view the company’s financial records were rebuffed.

Mt. Gox spent money, said Reuters‘ report, on rent in the same high-status Tokyo office building as Hulu and Google, office equipment that included a robot and a 3D printer, and a special edition Honda Civic imported for CEO Mark Karpeles from the UK.

This occurred just as the company, and bitcoin itself, were beginning to expand and gain interest from investors.

Staff kept in the dark

The employees, worried that Gox was spending more money than was coming in, requested a formal meeting with Karpeles and asked for proof that client deposit amounts were protected.

After a one-hour meeting, Karpeles assured them customer money was not being used improperly but would not provide any evidence, leaving them dissatisfied.

It fits with other unofficial reports of a general malaise in the office and personal dissatisfaction with Karpeles, who employees have claimed paid little attention to Mt. Gox’s exchange business and an excessive amount on side projects like the company’s planned Bitcoin Cafe and its transaction processing system.

Legally, Mt. Gox was under no obligation to release any financial details in the time it operated, since it was a privately-held company 88% owned by Karpeles.

Extensions and refusals

In other Gox news, the company website has been updated to announce that the deadline for an examination report issued by the Tokyo District Court has been extended to 9th May.

Late last week it was also revealed Karpeles is refusing to travel to the US for questioning, as part of the Gregory Greene lawsuit.

Greene and Joseph Lack had requested a US judge order Karpeles to the US to testify, “in order to protect domestic creditors.” Karpeles, apparently, has declined to go to the US and offered instead to go to Taiwan, for questioning by lawyers live or via video link.

Steven Woodrow, a lawyer for the plaintiffs in the case, expressed disapproval at Karpeles’ decision, saying anyone seeking protection from US courts should be prepared to enter the country to justify such protection in person.

I am sorry if u got offended by the word "nuked" its just joke about mute . I will not use it again. Sorry.

It was 2 times then i warned u than u done it again. Its ok to offer but not to keep pasting same text over and over again, and looks like u was doing it yesterday also. U can buy btc at any exchange or localbitcoins, pd is not place for it.
But i say again that was not the reason u got muted it was coz u come to chat without saying any word ,just started posting same text, and i warned u, then u done it again, same text without a WORD.

But well i guess u can be unmuted , but pj would need to agree with that.

Actually i muted u, then pj muted u after me coz he did not saw i already muted u.

And i muted u not coz i was thinking that u are scammmer, but coz u keep spamming the same text over and over, even tho i warned u that PD is not trading platform and NOT TO SPAM same text over and over , and u was doing it without saying any other word.

Also what is ur id , so i can be sure that was u?

The Benefits of Bitcoin in International Travel
Nicholas Tomaino (@ntmoney) | Published on March 29, 2014 at 16:34 GMT | Analysis

Nick Tomaino is on the business development team at Coinbase, and is also a first-year business school student at the Yale School of Management.

Prior to that, he worked in venture capital, most recently for Softbank Capital.

_________________________________________________________________

Bitcoin is an open payment network that anyone in the world with an Internet connection can use.

The open, global nature of bitcoin has tremendous advantages over existing financial infrastructure for international travellers. These advantages became clear to me during a recent trip to South America.

Below are some of the problems that international travellers currently deal with.

Hassle of currency conversion

When travelling to foreign countries, it can be a major hassle to convert to local currencies and carry around local cash. I traveled to Buenos Aires, Argentina, and Rio De Janeiro, Brazil, on my trip and had to worry about exchanging currency three times (when both entering and leaving a new country).

Wouldn’t it be great to be able to eliminate one of the major hassles of international trips? As a global currency used by consumers and merchants worldwide, bitcoin eliminates the need for dealing with multiple currency conversions and carrying a lot of cash.

High fees

In addition to the hassle of dealing with currency conversion and carrying cash, it can also be quite costly to get cash and make payments in new countries. During my time in Brazil, I incurred three approximately $15 ATM fees to withdraw Brazilian Reals from a local bank – a $10 charge from my large US-based bank, in addition to $5 from the local Brazilian bank – for each withdrawal. I incurred one $15 ATM fee in Buenos Aires, as well. Additionally, I was charged a fee every time I used my card to make a purchase.

The twelve times I swiped my card to buy something ended up costing me $36 dollars. The high fees I paid ($96 in total) on my trip highlight the massive friction that exists between existing payment networks worldwide.

An open, global payment network reduces friction and fees. As the world continues to become more inter-connected, I think this will become a more obvious benefit of bitcoin.

atm-cash-machine1

Payment fraud

When you use your credit card internationally, you give unfamiliar foreign merchants your payment credentials. These merchants can either intentionally or unintentionally expose those payment credentials to criminals.

While I was in Buenos Aires, I purchased water at a convenience store. The following day, I got a call from my bank telling me I had hundreds of dollars of fraudulent charges made with my debit card.

The unfamiliar merchant in Buenos Aires must have exposed my payment credentials to a fraudster. My bank account was compromised, and while the charges were covered, my bank told me it would take five to seven business days for them to mail me a new debit card. This left me without access to my bank account for a week in a foreign country.

Luckily, I had another card to cover me from the rest of the trip, but I’m not sure what I would have done if I did not. This is a scenario I suspect is all too familiar for many who have travelled internationally.

The solution

Bitcoin solves many problems that international travellers currently deal with. It eliminates the hassle and fees associated with converting to local currencies and carrying cash, and it securely protects the payment credentials of consumers to avoid fraud risk and the potential to lose bank account access in a foreign country.

While it is tough to travel with only bitcoin on international trips at the moment, the rapid merchant adoption of bitcoin is changing this.

Travel-focused merchants such as CheapAir.com, BTCTrip and Pointshound are just a few merchants generating significant bitcoin sales from international travellers. As more travel related merchants accept bitcoin, and consumers continue to realize the huge efficiencies that bitcoin provides, I expect the travel space to continue to lead bitcoin adoption.

Next time I travel internationally, I hope to be able to leave my credit and debit cards at home.

Bitcoin is Key to Empowering Small Businesses
Hemant Taneja (@htaneja) | Published on March 29, 2014 at 14:05 GMT | Analysis, Companies, Merchants, Startups

Small businesses are the bedrock of the American economy. Today, more than half of all workers in the US are employed by businesses with less than 500 employees, and they create some 66% of new jobs as well.

Despite their importance to the economy, however, small businesses have faced serious hurdles in successfully competing on the Internet. Bitcoin has the potential to finally unleash them and fuel their growth, but first we have to ensure that the currency is trustworthy through smart regulation.

Founders looking to build a new company today have access to many effective platforms they can use to go from vision to delivery. Flextronics accelerates product development by assisting companies in managing their supply chains. Once built, companies can sell their products on top of Amazon Web Services, easily scaling their server resources with demand.

Finding customers is much easier because platforms like Facebook and Twitter provide tools to engage potential audiences. Finally, once customers are ready, FedEx and UPS provide full logistics services to ensure that products are available and delivered on time.

While small businesses have had all of these platforms available to them for years, one area has been sorely lacking: payments. Today’s financial infrastructure is ill-suited for the online and mobile commerce that increasingly is at the core of business.

Issues like fraud and identity theft deeply harm small businesses, which can’t easily manage their financial risks. Credit card chargebacks made sense when most commerce was in-person and local, but in a globalized consumer market, such policies are cumbersome. Compared to large companies, small businesses simply don’t have the resources to accept payments online easily across the world.

As I discussed this week at CoinSummit, we now have the payment infrastructure we need with bitcoin. Together with other enabling platforms, bitcoin stands to provide small businesses with the leverage they need to aggressively compete in the marketplace.

This “economies of unscale” means that entrepreneurs from San Francisco to Mumbai can create a business that can rapidly grow with just a handful of people and a dream for the future.

“Compared to large companies, small businesses simply don't have the resources to accept payments online easily across the world.”

This has not been the case since the Industrial Age started two centuries ago. Scale has been the key watchword in building profitable companies, since large enterprises have the resources to develop proprietary systems, giving them unfair power in the marketplace.

They also have the ability to spread the cost of business processes and inefficiency over a greater number of sales. Entire categories of businesses, from manufacturing to the delivery of high-quality services, could only be conducted in near-monopoly conditions, and thus, innovation often fell by the wayside.

That’s why I was excited to meet with so many passionate bitcoin entrepreneurs at this week’s CoinSummit. The world economy is on the cusp of transformation. To get to the promised land though, bitcoin founders are going to have to take a very different approach than they have in the past in supporting the progress of the cryptocurrency.

Unlike the cavalier attitude that built the Internet services we use every day, bitcoin entrepreneurs must instead actively engage with regulators to ensure that consumers (and businesses) are properly protected.

Bitcoin has a plethora of thorny issues that have to be addressed in order for it to reach mass adoption. Consumers need the ability to hold secure digital wallets, and the bitcoin market itself needs better stability mechanisms. Since transactions in bitcoin cannot be reversed, entrepreneurs must develop a framework for adjudicating issues about returns or refunds.

Regulators are not necessarily against change, but they are often understandably worried about unfamiliar technology. Founders should see this as an opportunity and not a threat. Only through the intersection of technology, finance, and government can we be sure to build a system that will meet the needs of all stakeholders.

For these reasons, General Catalyst invested in the Series A round of Circle, which is building out the key infrastructure around bitcoin to make it safe and secure for everyday use. The co-founder of Circle, Jeremy Allaire, who built platform companies in the app server and Internet video markets, believes that Circle can create a two-sided platform that allows consumers to safely buy, store and use digital currency and businesses to accept transactions without risk of volatility.

We also invested in online payments company Stripe, which will soon allow its customers to accept bitcoin payments in lieu of credit cards.

If we can build trust in bitcoin, we can begin to empower the economies of unscale that will ensure that its ubiquity reaches the levels enjoyed by Visa and Mastercard today. That will mean that entrepreneurs across the world can accept payments from anyone, anywhere, with limited fees and headaches. That’s a revolution for small businesses, and our economy as well.

Hemant Taneja is a partner at General Catalyst. The firm has invested in BigCommerce, Circle, Stripe, and ZenPayroll. Follow him on Twitter @htaneja.

Court Grants Order to Freeze Hashfast’s Bitcoin Wallets
Jon Southurst (@southtopia) | Published on March 29, 2014 at 12:42 GMT | Companies, Law, Mining, News

A court in Fort Worth, Texas, has granted a temporary restraining order to freeze the bitcoin wallets of ASIC mining hardware manufacturer HashFast Technologies LLC and HashFast LLC, after a customer claimed it failed to deliver hardware on time or negotiate a refund.

The TRO was part of a wider lawsuit filed against HashFast on 27th March by Cypher Enterprises, who claim it ordered and paid HashFast for several items of bitcoin mining hardware in early October last year. The complaint says HashFast failed to meet its promised delivery date later that month, prompting Cypher Enterprises to cancel its orders.

No refund

Cypher Enterprises had paid for the majority of the orders for the ‘Baby Jet’ mining hardware in bitcoin but said HashFast had failed to offer or pay a refund of any kind, or even reply to the cancelation.

The complaint, which has a Background section with the question “What the heck is a Bitcoin?” also contains an attachment of 30 pages of bitcointalk forum discussion detailing the history of the story from July-August 2013. HashFast had promoted the new hardware on the forum and even invited potential customers to tour their workplace in order to promote transparency.

At the time of the order, on 1st October 2013, 1 BTC was worth around $126.

It continued that HashFast had stated on the forum that in the event a refund was necessary, it would pay in bitcoin. After failing to meet the original delivery date it promised to ship no later than 31st December, a date it also missed.

Changing the game

The granting of a court order to freeze bitcoin assets of mining hardware companies who fail to deliver on time could have ramifications in an industry beset by delays as small and inexperienced participants grapple with issues related to cutting edge hardware design and production.

“Outside of the Mt. Gox bankruptcy proceedings, I’m not aware of any other Texas courts which have entered a restraining order like this,” said Cypher Enterprises’ lawyer, Robert Bogdanowicz.

“It speaks to the legitimacy of cryptocurrencies and a growing understanding of their value and importance to businesses.”

Several mining hardware startups have struggled to deliver product anywhere near the promised time, in a field so time-critical that even a month’s delay can render an expensive purchase worthless due to bitcoin’s constantly increasing difficulty rate.

HashFast, which had been under threat of legal action over the delays since the beginning of this year, was founded just last year and promotes itself on its website as “an industry leader in bitcoin mining technology”.

Well its not rly hard to use vanitygen. But i was to lazy and stupid to do so. Now i made new vanity addy but ofc locally with vanitygen. But well now its to late.
1MicroXV8cAyggKeXRJWhRsv1yZaqtiWTE

Do somebody rely gets referrals by posting here ? I guess we all here already have accounts on pbmining ?

My user name on pb is same as here , ( MICRO ) if somebody wants to include it in link http://pbmining.com?ref= .

Coinbase Launches App Store
Danny Bradbury (@dannybradbury) | Published on March 29, 2014 at 01:12 GMT | Coinbase, Companies

Coinbase has launched an app store, showcasing firms that have integrated with its wallet service.

On the firm’s API page, it explains that it allows submissions from applications conducting “all major bitcoin operations”, that exchange bitcoin to local currency, send and request bit coins via email or bitcoin address, and create bitcoin wallets. It also allows merchant apps, and apps that provide access to raw bitcoin network data. Microtransactions are permitted, too.

Among the first apps to be included in the app store are OSX-based wallet Hive, and Gliph, a mobile app for making bitcoin payments, both of which have integrated with Coinbase. BitTip, the Reddit bitcoin tipping app, and a Coinbase WordPress plugin are also on the site.

And Coinbase Trader, an app that allows for the automated buying and selling of bit coins through Coinbase, is also listed.

The company did not to respond to queries about how closely those using its API would be security vetted, or any other criteria that it was using for inclusion in the store.

This appears to be part of a wider push for Coinbase to build a developer community for its bitcoin infrastructure, which exists off the block chain and includes a wallet, email-based transfers, and a merchant payment processing service. The company recently ran its BitHack competition, in which it awarded $18,000 in prizes. It announced the winners today.

The winner of that app, CoinPlanter, is an Android app that uses geotagging to let people store, share, or retrieve bitcoins based on their location. People can ‘dig’ while at any location to see if someone has left bitcoin to pick up. The tool, which received a $10,000 first prize, has some marketing potential for companies wanting to cash in on the geotagging craze and integrate the concept with their own campaigns.

The second prizewinner, Aircoin, got $5,000. It is a mobile app that lets people send bit coins to others nearby, using a drag and drop visual interface.

Finally, Coinery.io is an online site for selling digital products in bitcoin. The Coinbase-powered site charges no fees, it says. That site got $3,000.

None of these apps were listed in the Coinbase app store, although another entrant to the contest, Bitfluence, was listed on the app store. That service lets you use your Twitter identity to send and receive bitcoin, is listed on the site.

Coinbase has suffered from its own app store woes in the past, falling foul of Apple’s notorious anti-bitcoin stance. Apple removed its mobile iOS app from the app store in November, less than a month after it was launched.

Site is fair anyways, even if u don't change it. But when u change it before every bet, than u would not need to thrust its fair u would know 100% that it is fair.

Umm... Sorry on autobet now , can't refresh, so u saying that client seed changes after refresh but not server seed ?

But u did not done all in and lost on the next bet after refresh. U lost on 12th 13th bet after refresh, u changed ur betting coz of refresh, but u saying u was thinking all is exactly the same as before refresh or u woulda cashout. Doesn't make sense.

Anyways we should not argue more about it. U got reply from Stunna, and u and me just can't agree on this , ever, so there is no point of arguing.

Sorry for ur loss i lost almost whole wallet balance 0.4 btc, on that vanity scam i know how does it feel to lose everything but to be honest i would be much more happy if i lost it on pd .

Yes it changes by 1 number up.

spixel tell me again how u got server seed for the next bet that did not happen ?