BITCOIN NEWS EVRYDAY! From multiple sources.

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Warren Buffett Urges Investors to ‘Stay Away’ from Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on March 14, 2014 at 17:42 GMT | Companies, Investors, News

Renowned investor and Berkshire Hathaway CEO Warren Buffett spoke out about bitcoin for the second time in as many weeks, calling the digital currency “a mirage” in an interview with CNBC on 14th March.

The comments follow Buffett’s first statements on bitcoin on the network on 3rd March, when he suggested that bitcoin was not a currency, writing it off as a passing fad.

Buffett was similarly dismissive of bitcoin again in his latest interview, at least as an investment opportunity, advising investors to “stay away from it”. He added: “It’s a mirage basically.”

Buffett did however allude to the underlying technology of bitcoin as a payments network, comparing it to checks and money orders as a “very effective” and “anonymous” way to transmit money, adding: “It’s a very fast money order”.

However, he also seemed to infer that were bitcoin to be used primarily for this purpose, its value would then be questionable, just as checks and money orders do not possess any value.

“I hope bitcoin becomes a better way of doing it, [but] the idea that it has intrinsic value is a joke.”

Full statements

The bitcoin question that arose around the nine-minute mark was an aside to the larger conversation, though it did spark a brief roundtable discussion of bitcoin and its ledger technology.

In the interview, Buffett covered a range of topics from his $1bn prize for this month’s NCAA college basketball tournament to the ongoing crisis in Ukraine.


Buffett spoke more generally about investments too: commenting on the state of the US economy, as well as the investment benefits posed by stocks and bonds.

Influence

Though it’s unclear from the statements how deeply Buffett has assessed bitcoin or its underlying technology, these statements are likely to have an impact in the financial community.

Buffett’s influence is perhaps best summed up by his Investopedia profile authored by Richard Loth, who wrote: “Buffett has yet to write a single book, but among investment professionals and the investing public, there is no more respected voice.”

However, accounts of his investment style suggest bitcoin would not be a high priority for Buffett, as he favors predictable earnings, understandable ideas and strong franchises. For example, Buffett is famous for avoiding tech stocks, even those as promising as Facebook.

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[MICRO]

Chamath Palihapitiya to Speak at CoinSummit San Francisco
Pete Rizzo (@pete_rizzo_) | Published on March 14, 2014 at 18:23 GMT | Events, News

Noted early tech entrepreneur Chamath Palihapitiya has been added to the speaker list for CoinSummit San Francisco, an upcoming two-day, invitation-only event to be held on 25th and 26th March at the Yerba Buena Center for the Arts.

Palihapitiya, one of the largest individual bitcoin investors and a prominent early executive at Facebook and AOL, joins an already impressive lineup of industry talent that includes keynote speaker and early software pioneer Marc Andreessen; Naval Ravikant, founder of AngelList; Chris Larsen, CEO of Ripple Labs; and Nejc Kodrič, CEO of bitcoin exchange Bitstamp.

Additional speakers include David Lee, partner at SVAngel; Tony Gallippi, CEO of BitPay; Brian Armstrong, CEO of Coinbase; and Jackson Palmer, co-founder of Dogecoin.

Palihapitiya has emerged as one of the more credible investors advocating for bitcoin in recent months, memorably speaking out on the digital currency’s behalf at TechCrunch Disrupt last October.

The comments were seen by many as a key vote of confidence at a time when many in the mainstream were questioning whether bitcoin was a speculative bubble that would soon burst.

The result was that TechCrunch forecasted that Palihapitiya would soon become “one of the most prominent advocates for the digital currency”, a development that seems to be coming to pass with his addition to CoinSummit San Francisco.

What to expect

For the event, Palihapitiya will be interviewed by Brad Stone, a senior writer for Bloomberg Businessweek and author of The Everything Store: Jeff Bezos and the Age of Amazon. Stone co-authored a feature on bitcoin which made the front cover of a January edition of Bloomberg Businessweek.

Speaking at TechCrunch Disrupt, Palihapitiya grabbed headlines when he estimated his personal bitcoin holdings to be worth $5m and suggested he would look to double or triple this investment.

Palihapitiya focused much of the conversation on bitcoin as an investment, as well as the underlying technology, topics that are both likely to be on the docket for CoinSummit.

About Palihapitiya

Born in Sri Lanka, Palihapitiya is mostly known for his work at high-profile tech companies, beginning with ICQ Messaging, which was later acquired by AOL. Palihapitiya went on to work on AOL Instant Messenger (AIM).

Founder and partner at The Social+Capital Partnership, a Palo Alto-based VC fund made up of philanthropists and technologists, Palihapitiya notably invested $15m in Barry Silbert’s alternative investment platform SecondMarket, which is working on launching a regulated bitcoin exchange in New York this year.

Further, he is the current owner of the Golden State Warriors NBA franchise, which has added credibility to rumors that the franchise may accept bitcoin soon.

As noted in his profile in BusinessWeek, Palihapitiya was integral in helping Facebook grow from just 50 million users to more than 750 million users.

Bitcoin users can only hope his support helps the digital currency achieve similar results.

[MICRO]

Bitcoin Scoops Linux Media Award at CeBIT 2014
Nermin Hajdarbegovic | Published on March 14, 2014 at 19:12 GMT | Events, News

Bitcoin has won a Linux award at CeBIT 2014 – Europe’s premier tech trade show.

The award was handed out at the Linux New Media Awards 2014, where bitcoin was named the ‘most innovative open-source project’.

The open-minded, open-source community behind Linux has a soft spot for innovation, encryption and apparently privacy.

In addition to bitcoin, the audience also decided to hand out further awards to email encryptor GnuPG and the Tor project, along with developers’ tool Git.

Most innovative of them all

Thousands of Linux enthusiasts and readers of leading Linux publications took part in the vote, reports Linux-magazin.de.

However, bitcoin received the distinction of being the most innovative open-source project. Open-source advocate Thomas Uhl praised the role of digital currencies and said he is a bitcoin user and a fan.

The award was accepted by Oliver Flaskämper from Bitcoin Germany GmbH, the company behind bitcoin.de.

Here to stay

Flaskämper said bitcoin.de is the biggest marketplace for bitcoin in Europe, and that the exchange is in good health – probably in an effort to distance himself from now-bankrupt bitcoin exchange Mt. Gox.

He likened bitcoin to several online services that have transformed the online landscape in the past, such as Wikipedia and social networks, and suggested that bitcoin will revolutionise the global financial system.

This is not bitcoin’s first tech accolade this year. Back in February, TechCrunch awarded it the Best Technology Achievement 2013 award, or ‘Crunchie’. The award was accepted by Peter Vessenes, Chairman of the Bitcoin Foundation.

In its summary of the award, TechCrunch concluded that bitcoin is “almost mainstream” and that it seems likely it is here to stay.

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Avalon ASIC’s 40nm Chip to Bring Hashing Boost for Less Power
Daniel Cawrey (@danielcawrey) | Published on March 14, 2014 at 19:50 GMT | Avalon ASICs, Butterfly Labs, KnCMiner, Mining, Technology

A newly released report reveals details of Avalon ASIC’s upcoming third-generation bitcoin mining chip.

According to the preliminary report, the 40nm ASIC – which Avalon is calling the A3233-Q48 – will have 7 GH/s of power per integrated circuit, which is a substantial performance increase from Avalon’s previous 55nm node chip.

Furthermore, that boost will come with reduced power consumption because of the decreased node size – welcome news for miners struggling with high electricity bills.

The chip will come in a 7 x 7mm form, which has not changed from the second-generation version.

Smaller and shorter paths will endow the chip with lower power consumption, but increased heat density – hence the decision to stick with the same overall dimensions.

Avalon was the first company to manufacture and deliver ASIC chips for bitcoin mining, but it has experienced problems with shipment delays in the past, which they have tried to put behind them.

ASIC Evolution

When asked about the new chip, Yifu Guo, co-founder of Avalon, told CoinDesk:

“[With the] last generation, we had 120 hash cores in the chip design, 1.5 GH/s per chip, 2 watts per GH/s, on 55nm standard cell design. This generation we have 768 hash cores, 7 GH/s per chip, 0.75 watts per GH/s, on a 40nm full custom design.”

The new chip will be able to hash much faster, while increasing power efficiency by a factor of 2.5. For comparison of specifications, Avalon’s second-generation A3255-Q48 chip preliminary report can be found here.


Avalon A3233Q48 architecture, which appears similar to its predecessor. Source: Avalon Datasheet
The Avalon A3233-Q48′s architecture appears similar to its predecessor. Source: Avalon Datasheet
 

Focusing on chips

Guo said that pricing for the A3233-Q48 has not yet been determined, but he made it clear that Avalon’s focus is on selling quantities of ASIC chips to sophisticated buyers:

“Pricing is not yet determined. We are focusing mainly on chip sales, and producing some of our design as prototypes to demonstrate the chips.”

The company currently has its second-generation chip available for 13 BTC per 2,500 units. At recent CoinDesk Bitcoin Price Index valuations, that’s around $8,200.

That chip operates out of the box at 1.2 GH/s, but it can be overclocked to 1.5 GH/s.

Avalon has also said it is publishing open-source designs for the chips on its GitHub pages to be used for different applications. A USB stick, 2U rack-mount blade and a PCI-e design will be available form factors.

The rivals

In comparison to Avalon’s business model, some ASIC chip designers, like Butterfly Labs, only currently sell full mining units. BFL is currently attempting to bring its 600 GH/s 28nm Monarch blade to market, but has experienced delays.

KnCMiner is also selling only complete miners. Its 20nm design has been taped out, making it the first SHA256 ASIC at that node. Taping out refers to last stage of the design process for an integrated circuit.

As for Avalon, Guo said he expects the bitcoin ecosystem to build complete miners with its chips.

The company is endeavouring to provide a low-cost entry into mining with its future chip designs.

Said Guo:

“We hope the community will take up the production, [so] we can focus on engineering and improving chip design in generation four, while lowering the barrier of entry for mining.”

Turbo mode

Avalon's second generation  A3255-Q48. Source: Avalon
Avalon’s second generation A3255-Q48. Source: Avalon
The A3255-Q48 is able to achieve a 1.5-1.6 GH/s speed by overclocking from its typical core voltage of 0.9 volts to 1.0 V, with a maximum of 1.1 V.

Avalon will have overclocking, or ‘turbo mode’, results available soon for the third-generation chip, Guo says. This will exceed the 7 GH/s normal operating performance when at .075 V. The chip’s core maximum, according to the report, is .09 V. Guo added:

“This is [a] preliminary result. We will be releasing low-power performance mode data, as well as turbo mode data soon as results becomes available.”

The third-gen chip will be produced by Taiwan Semiconductor, which has been Avalon’s fabricator for all of its chips so far.

A release date for the A3233-Q48 has not yet been set, the company says.

Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.

[MICRO]

Menufy Now Supports Bitcoin Payments at 400 US Restaurants
Nermin Hajdarbegovic | Published on March 14, 2014 at 20:52 GMT | Coinbase, Lifestyle, Merchants

US-based online restaurants service Menufy has integrated Coinbase into its e-commerce platform, allowing consumers to spend bitcoin at hundreds of US restaurants.

Menufy didn’t make much of a fuss out of the news, however – the Coinbase deal was announced only on Twitter and reddit.

The company says its service is available in nearly 400 restaurants across 28 states.

The service is free of charge, so any restaurant that wants to enroll can do so freely, with no contracts.

Level playing field

Menufy develops e-commerce software and custom websites for each of its restaurants.  The service is mobile-friendly and allows users to order and pay for food in a few easy steps, even if the restaurant in question doesn’t have its own website.

The approach is rather clever, as most small restaurants still don’t have their own e-commerce platform, and many don’t even have a web presence.

Menufy lets small restaurants sell online without spending a fortune, and, as a result, helps level the playing field with big franchises that can afford to invest in such services.

Room to expand

The news doesn’t mean that 400 restaurants have started accepting bitcoin directly, however, as Menufy handles the whole process through Coinbase.

The proprietors might not even be aware that they are accepting bitcoin payments – in the same way most people don’t know they’re using HTTP when they browse the Internet.

Though the 400 restaurant total sounds impressive, some relatively big states like California and New York are underrepresented.

Texas is not, however, and Texans tend to love both a nice meal and bitcoin, so it’s a match made in heaven, perhaps. Menufy says it is working to extend its reach to other states and expand its portfolio.

[Gladdy]

Just like coindesk ?

[ponjava]

Is mcxNOW turning into a wasteland of altcoins?

 

mcxNOW used to be one of the hottest cryptocurrency exchange around until RealSolid, whose real name is a “hidden secret”, shut it down late fall of 2013 because he experienced too many customer problems. He decided that he would improve the exchange making sure it would not cause problems for his customers again when withdrawing or depositing different cryptocurrencies.

The Re-Launch of mcxNOW

When mcxNOW got back up after a long time left out in the cold, it immediately started to pick up where it had left with a total trade amount of above 1000 bitcoins. The fuel continued to burn when RealSolid decided to add MaxCoin to the exchange.
http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/Maxcoin-bitcoin-mcxnow-.png
MaxCoin failure

MaxCoin, like most of the other coins that are launched with big endorsements, initially peaked then to have what’s called a slow death. Some altcoins manage to revamp their expectations by doing some major changes, but unless there is an economy built around the cryptocurrencies themselves, they won’t survive.

Maxcoin bitcoin mcxnow
The Slowly Death of MaxCoin
The Failure of not adding Dogecoin

RealSolid has time after time told his users of mcxNOW that he would add Dogecoin soon. We even got confirmation after confirmation that “this week is it”. It is now clear to see that RealSolid has a major problem with following up on his promises, including running what we would call a business.

By not adding Dogecoin, one of the most traded altcoins out there, he shows a lack of understanding of basic market economics. It seems like he has given up on mcxNOW and what he wanted to make “the world’s greatest digital exchange”.

When he also sold 5000 of his remaining 10 000 mcxFEEs to sell, he told us that he would not sell his remaining 5000 mcxFEEs for a long time. However after a short period, his last batch was sold. RealSolid is either two or more people, or, well you get the math.

Will mcxNOW come to a halt?

After RealSolid cashed in many thousands of bitcoins on mcxFEEs, he could be suffering from greed and megalomania. This makes the small amount he now makes on his remaining mcxFEEs irrelevant and, therefore, mcxNOW irrelevant.

I would go so far to say that if you have any mcxFEE at mcxNOW now, I would seriously consider selling it for a loss just to get some value out of it and transfer the bitcoins out of the exchange.

If RealSolid doesn’t change his business ethics and methods, mcxNOW will not survive.

What do you think? Write in the comment field below.

[ponjava]

The Bitcoin Foundation: Some Questions


bitcoin foundationI’ve just spend a pleasant evening, nursing a cold beer, looking over The Bitcoin Foundation’s posts and educating myself as to who exactly these people are and what they are bringing, or at least claiming to bring, to the table. Now, I’ve never claimed to be the sharpest knife in the proverbial drawer and for that particular reason I’ve decided that I will take this task slowly and stop to ask a few questions whenever I happen to find myself starting to feel confused. Clearly, the foundation has been put there for our betterment and for that reason I hope you will bear with me on this short journey of discovery.

The foundation’s website states the three primary objectives for fulfilling Bitcoin’s mission to achieve its potential.

Bearing in mind the three stated objectives of: Standardising Bitcoin, Protecting Bitcoin and Promoting Bitcoin and accepting that “Cryptography is the key to Bitcoins success. It’s the reason that no one can double spend, counterfeit or steal Bitcoins. If bitcoin is to be a viable money for both current users and future adopters, we need to maintain, improve and legally protect the integrity of the protocol.” Here is the first question:

The problem of Transaction Malleability has been known about since 2011, so why did the foundation not move to address this issue before the criminals began to exploit it during 2013?

Under the title of “What I hope the Foundation will accomplish“, Jon Matonis states: ” There’s a huge amount of support for the Foundation from many of the people who matter to Bitcoin’s future: Charlie Shrem, Mark Karpeles, Gavin Andersen and Jon Matonis are all starting out on the Board of Directors”. Unfortunately, Mark Karpeles resigned in 2014 as a result of the spectacular collapse of Mt Gox and his far from glorious role in that collapse and that Charlie Shrem resigned following an alleged link to illegal drugs trading. I am pleased to state that the two other directors, Jon Matonis and Gavin Andersen are people of the highest moral character, but:

Bearing in mind the importance of the foundation, (self stated!), how carefully did the Foundation select it’s directors and did anyone check the history of the newly appointed directors, Karpeles in particular?

It has been alleged that in 2011, Mt gox made an appeal to the community that 400,000 bitcoins had gone missing and asked for help. It was decided to provide that help. 150,000 of the missing bitcoins were recovered in 2012 and the plan was to continue this support in 2013 but the sudden, and somewhat unexpected, increase in Bitcoin price during 2013 raised the cost of fixing the problem from a somewhat manageable $3M to a completely unmanageable $15M. A blogger posting on Reddit, disclosed in November that he, could deposit coins with Mt Gox and then withdraw more than he had deposited. Question number 3:

Had the Foundation been bailing Mt gox out since 2011, if so, how much in total was spent? Who was told, who made the decision and was that decision influenced by Karpeles status within the Foundation and how much in total was lost?

During the collapse of Mt Gox and accepting the volume of the losses:

Did the foundation have access to make withdrawals on a priority basis when other investors were being denied this right?

Finally, as we have gone through a period of monumental losse, and poor publicity,  a period affecting ordinary investors:

What actions will the Foundation undertake, going forward, to ensure a future for not only the Foundation, but also Bitcoin; what have we learned from the Mt gox debacle?

I would be grateful to have these small points addressed to ensure that confidence is restored and knowledge gained.

[ponjava]

Sponsored Article: Execoin – Scrypt ASIC Resistant


execoin logoExecoin is a new altcoin with a promising future. To appreciate the role and value of Execoin, we need to understand the significant changes that are about to sweep the scrypt altcoin domain.

Execoin represents a move away from the generic scrypt altcoin formula – and for good reason. The developers have taken care to analyze existing trends in scrypt mining and, in response, have implemented a progressive variation of the scrypt algorithm to ensure Execoin’s longevity and value. Their work is a significant departure from the standard scrypt implementation and distinguishes this coin from its peers.

Takeaway

Execoin is scrypt ASIC resistant and has built-in multipool resistance. These features secure Execoin’s network and protect its value. It is expected that Execoin’s value will increase as a wave of generic scrypt ASICs sweeps the altcoin market and forces GPU miners to migrate to a few ASIC resistant cryptocoins. Execoin has a clean altcoin design with several innovative features and is ideally positioned for the coming changes in the altcoin market.

 

Generic Scrypt

The scrypt algorithm, introduced to the altcoin domain by Litecoin, protected Litecoin from the hashing onslaught of ASICs.

The rise of Application-Specific Integrated Circuits (ASICs) was inevitable as special purpose devices were developed to progress FGPU and GPU hashing to the logical next step. This, especially, made sense for Bitcoin, which had by then, achieved a hash rate of 160 TH/s and a massive difficulty target, necessitating entire datacentres dedicated to it’s mining.

Hence, a major design objective of Litecoin was to cater to those miners, whom, despite their significant investment in hardware, were left high-and-dry by the hashing leap imposed by ASICs. By introducing scrypt, Litecoin was able to give GPU mining rigs a new lease on life. The proliferation of Litecoin clones – scrypt altcoins – could be directly attributed to that historical dynamic.

 

How many GPU rigs are mining Bitcoin? It’s an ASIC-only zone now. – Execoin developer

 

Scrypt ASICs

A year later, it’s apparent that a new breed of scrypt-capable ASIC is rising and that it threatens scrypt mining in the same way that ASIC had changed Bitcoin mining in 2013. The Execoin team have smartly anticipated the coming scrypt ASIC boom and their design implementation of Execoin can both take advantage of the coming scrypt hashing leap, as well as make Execoin resistant to the new breed of ASICs.

Progressive-N Scrypt

By basing Execoin on a scrypt innovation, called Progressive-N Scrypt, the coin developers effectively cause Execoin to set its scrypt memory requirement higher than the current ASIC operational level. This means that when more powerful scrypt ASICs are released they will be unable to mine Execoin.

Additional ASIC resistance is implemented via customized binaries of the most popular mining applications, such as cgminer and CUDAminer. These combined innovations ensure that Execoin can only ever be mined via GPU devices and with compatible GPU mining software. The ASIC resistance is total and pervasive.

Bigger, Better?

In the case of Bitcoin, once ASICs came on the scene, their adoption increased the network hash rate and ramped up difficulty as the Bitcoin protocol adapted to the higher rate at which blocks were being found. Most GPU miners found themselves unable to compete at the higher hash rate imposed by ASICs and hence their mining was either unprofitable or pointless. As we saw, Litecoin came to fill the gap by introducing the scrypt algorithm which, at the time, was resistant to that generation of ASICs.

Litecoin’s sourcecode is the basis of most altcoins out in the wild. This includes Dogecoin, Auroracoin, Worldcoin, and so forth. The generic scrypt algorithm is, therefore, what has protected the most popular altcoins from first generation ASIC mining. However, when the new generation of scrypt ASICs is made commercially available, the uptake of these devices can be expected to skyrocket. Manufacturers will drive down prices in an effort to compete for their share of the sizeable scrypt mining market. We say “sizeable”, because the purchasing power of this market is evident from the fact that it stripped the retail sector of AMD R9 series GPUs in 2013, and almost derailed AMD’s Gaming card marketing strategy, thereby temporarily giving Nvidia a lead in the gaming GPU race.

As happened with Bitcoin before, the ASIC ramp-up will once again leave GPU miners in a void, as their ASIC’ed fellow miners take most of today’s popular altcoins to new dizzy hash rates and levels of difficulty. It is in this scenario that Execoin is positioning itself by implementing the newer generation ASIC resistance early and ensuring that it will present a value proposition to GPU miners, going forward. I asked the Execoin team for their thoughts about developments in the GPU domain:

CCN: What does the Execoin team think about developments in High Bandwidth Memory and what are your expectations for Nvidia and AMD’s GPU race?

Execoin: AMD and Nvidia… both players are interested in the growing cryptocoin market and especially in GPU mining to stay profitable. So the ASIC threat is a problem for them too. High Bandwidth Memory is a significant technological improvement that will impact mining speeds. Technologies will go forward and the race will keep going to give us more powerful and sophisticated GPUs. However, even the most powerful, sophisticated and advanced GPUs won’t threaten the decentralized nature of crypto currencies’ networks as much as ASICs do, so GPU mining will stay our safe zone in the future.

Multipool Mining

Execoin’s designers also made provision for the “multipool mining” phenomenon, whereby groups of powerful miners focus their efforts on a few, select altcoin pools, mine large volumes of coins; and then dump these in the market. The result for the target coin is often a drastic reduction in market value as well as detrimental effects on the hash rate and difficulty, often rendering the mining pool useless. From the Execoin communique:

In addition, when a powerful multipool switches to another coin it leaves the previous coin’s network with higher difficulty and lower actual hash rate and this negatively impacts reliability and security of the network.

 

When a large and powerful multipool cartel of miners moves in, there is also the major risk of a 51% attack on the specific altcoin’s network. Execoin has implicit protocol protection which resists multipool attacks, and this renders the coin more secure and better able to sustain its market value. I asked the Execoin developers about their specific strategies to deal with multipool mining.

CCN: Multipool mining has been an unpleasant, yet, unavoidable part of scrypt-based altcoins since their inception. Can you talk some more about the multipool resistance you have
implemented in Execoin… do you, for example, use Kimoto Gravity Well?

Devs: In fact, we understand the importance of KGW, especially for a coin which is not backed by huge mining power yet. That’s why we are already in the final stage of its testing and KGW will be implemented in Execoin in the next few days. Benefits of KGW go far beyond the multipool resistance and KGW does not provide absolute immunity to multipools, since any ordinary scrypt coin with KGW still can be multipool-mined. For example, in standard KGW implementations, the minimum number of last blocks which contribute to the evaluation of the new per-block difficulty is 144 blocks, so a standard scrypt coin with KGW is suitable for very short cycles of mining on a not-so-large multipool.

The whole idea of multipool implies that the same miner, with the same parameters on the miner’s side, can mine any scrypt-based coin. Multipool switches currencies and this process is completely transparent and requires no interaction on the miner’s side. However, Execoin requires custom miners with custom parameters and those miners are not compatible with multipools. Therefore, unlike other coins with KGW, Execoin’s approach is not to mitigate consequences of multipooling, but to make multipool mining impossible with Execoin at all.

Good Prospects

Execoin will be coming into its own during the rest of 2014. The stronger the ASIC onslaught, the better for Execoin. This makes it a strategic coin for both mining and investment. The Execoin team discussed this in some detail:

CCN: Execoin is one of a new breed of coins that are positioning for the coming scrypt ASIC invasion. The Execoin team have clearly analyzed current market trends and what you see has led you to make a value proposition for the event horizon when many keen and dedicated GPU-based rigs will be pushed out of their comfort zone. Do you see it this way? And which other coins do you see as your competitors (so to speak) in this new market reality?

Execoin: Well, it’s obvious that the newer ASICs for scrypt coins will significantly change the cryptocoin market and this process has already begun. How many GPU rigs are now mining Bitcoin? It’s an ASIC-only zone now. We’re constantly seeing new announcements of more and more powerful scrypt ASICs and we expect a massive invasion starting by this fall. En Masse migration of GPU mining operators to Execoin and other ASIC-proof coins will start this summer/fall and will keep going with each new release of ASICs. This process cannot be stopped since millions of dollars have already been invested into scrypt ASICs, so scrypt coin mining will be completely occupied by them – it’s just a matter of time. Regarding other coins that could share the new market we can name Vertcoin, of course!

CCN: Given your market positioning, your defensive strategy of resistance, and the high probability that the market will play into your hand in the coming months and years,
can you summarize why you believe Execoin will thrive?

Execoin: Execoin is one of the very few ASIC-resistant coins, it’s fast, reliable, solid-coded, has dedicated development team and we’re doing our best to let people know about it and about the future of the crypto market ahead of the new ASIC invasion. Execoin is likely to be successful as one of the first coins offering an alternative to the all-ASIC world. We would like to focus our further development on real-world applications for Execoin, so that it would be accepted in many places as a method of payment.

[ponjava]

Google Director says cryptocurrencies are inevitable



Google Direct of Ideas Jared Cohen calls cryptocurrencies inevitable
Google Direct of Ideas Jared Cohen
In an appearance at SXSW yesterday, Google’s Director of Ideas issues a statement that cryptocurrencies like Bitcoin and several altcoins aren’t likely to be disappearing soon. “I think it’s very obvious to all of us that cryptocurrencies are inevitable”, said Cohen during a conversation with Google Chairman Eric Schmidt. While being positive about the value of cryptos, Cohen also claimed that there remains a danger as long as the coins aren’t being regulated. “Even though the future of Bitcoin seems to be assured, it’s unclear how the technology will develop in the future, as it’s still a pretty new space”, reports TechCrunch.

Google Ideas works as a think tank that spends most of its time dealing with oppressive governments.  It explores how technology can enable people to confront threats in the face of conflict, instability or repression. Since it has nothing to do with any product development, Cohen’s statement should not be mistaken for a sign that Google is thinking about accepting Bitcoin, or any other cryptocurrency, in the near future.

Public opinion

However, Cohen and Google Ideas are still an important part of the internet giant’s business group, which clearly shows us that Google takes cryptocurrencies serious. In fact, they’re taking a positive stance towards it, publically. Something other companies refuse to do. This is an important step. Bitcoin’s reputation has taken a few big hits during the last weeks. Among regular stories of theft and money laundering, the whole MtGox debacle made things even worse, and public opinion has been suffering over this. If a respected company, like Google, claims that cryptocurrencies are ‘inevitbale’, that is a pretty big endorsement for the whole concept.

And their love for the ‘concept’, rather than for Bitcoin itself was made clear when Cohen asked Schmidt whether “Bitcoin is the model, or the master of cryptocurrencies?.”

Bitcoin was the first and right now is the most popular of all cryptos, but that doesn’t necessarily make it the best. With the recent wave of altcoins, it became clear that anyone can take the Bitcoin model and adapt it to make their own digital currency. Some succeed in establishing themselves, as Litecoin and Dogecoin, while others fail to make a difference and simply drown in an ocean of altcoins. Since normal people can create altcoins, this means that financial institutions can do the same. Who knows what companies are secretly working on a future altcoin that will remove Bitcoins flaws and will try to get one step closer to being the perfect cryptocurrency?

Removing the flaws

Having said all that, Bitcoin’s weakest point remains its inability to guarantee a safe and secure way to store them. Sure, there are ways but when it comes to giving ‘common people’ (the ones that just heard of Bitcoin and have no extensive computer knowledge, the ones we need to reach to make Bitcoin go mainstream) a full-proof opportunity to safely store their Bitcoins, there’s still some work to be done. Despite this flaw, the coin still retains its strength.

Ending his conversation, Cohen restated that Bitcoin has an urgent need for regulation. “There’s a danger to it not being regulated in some form”, he insisted.

Even so, it remains to be seen whether or not it’s possible to do so. The whole regulation is a debate that has been going on for years and a definitive outcome is not to be expected soon. In fact, no realistic proposals have been made thus far, and until that happens, the end is not in sight.

[ponjava]

Mt. Gox Hackers Extorting BTC for Customers’ Personal Information


Mt. Gox Hackers Extorting BTC for Your Personal Information
Russian hacker Nanashi claims to have a database of Mt. Gox customers’ personal information.
About a week ago, Russian hacker “Nanashi” leaked the entire source code for Mt. Gox. Unsurprisingly, considering how unprofessional Mt. Gox has been, the code is pretty bad.

Some random red flags:

- There’s a class with the name of the application. (Issues: Scope, SRP)
- There’s a class with 1708 lines of code. (Scope)
- There’s a switch-case statement that runs over 150 LOC (readability, maintainability)
- There’s a string parsing function in the same class as transaction processing (Separation of concerns)
- There are segments of code commented out (are they not using source control?)
…
Now, it seems like Nanashi and the rest of his/her group have turned to extortion. If you were a Mt. Gox customer, Nanashi claims to have your personal information, including passport scans, and will sell it unless you send 0.25 BTC (~$160 at the time of this post). Apparently 20% of the customer database has already been sold to two unknown buyers, and the rest will be sold sometime this week. If a customer was part of the 20% already sold, “it’s too late for you.” However, Nanashi outlines the following steps for everyone else who wants to remove himself/herself from the database before it’s sold.

Email nanashi___@freemail.hu with the email you used with mtgox.
I will check file already sold, if you are not part of that I will send you unique bitcoin address. If you don’t get response it means your data has already been sold in first batch or we have finalized sale of all data.
After you have sent .25 bitcoin payment, email us again to inform us of this.
Thats all, we will delete your personal data and passport scan from all copies of database.
Furthermore, Nanashi states, “do not email us asking to confirm what information we have about you,” after receiving over 3000 emails asking for confirmation within the last 36 hours. Instead, the hacker simply states,

“If gox had it, we have it, and as you can read on boards we have confirmed possession of this dump for many people. We let you use our same email for this as all other gox hack communication so you know we are same people.”

One reddit user sent a fake email to Nanashi claiming to be a rich Saudi Mt. Gox customer, and asked if his information had been sold yet. Nanashi replied with the following: Nanashi response

Of course, this could mean that the hackers actually do not have the database and that this is just one huge scam. On the other hand, the email states that any data associated with the fake email has not been sold, which is a true statement since there is no data to sell. Nanashi stated that he/she checks the email against a list of addresses that were a part of the “sold” list instead of checking against a list of all people in the database. Furthermore, even if Nanashi does actually have the database, there is nothing to stop him/her from selling it even after people send the 0.25 BTC ransom. After all, how can you trust an extortionist?

Unfortunately for Mt. Gox customers, this seems like a no-win scenario.

[ponjava]

Overstock CEO Sheds Light On Wall Street Greed and Bitcoin’s Value as the New Currency.



I saw an alert on BitcoinTalk about an email from the CEO of Overstock.com. It was sent to all 41 million plus US customers.
As you can see here, it is another good one from him with a link to the story Wired did on him recently.

Overstock
Overstock
“Dear Valued Customer,

Enclosed, please find the Wired Magazine article, “Meet Patrick Byrne: Bitcoin Messiah, CEO of Overstock, Scourge of Wall Street”. It concerns the decade-long battle Overstock has waged to expose Wall Street mischief.

The backstory is as follows: Overstock went public in 2002. Between 2002 and 2005 I found myself mingling with various Wall Street bankers, hedge funds, and journalists, and began to form an impression (and hear) of unsavory activity. I made it my hobby to study it, and in 2005, I went public about what I had learned. For several years thereafter, the New York financial press derided and distorted my claims, often to the point of appearing to engage in a cover-up. When in 2008 what I had been saying became indisputable, Wall Street went silent about this episode. The enclosed Wired article recounts that history, and explains how it is related to Overstock’s recent decision to accept Bitcoin.

I understand that you may not be interested in tales of corruption in Wall Street and Washington, DC, and if so, please simply enjoy the coupon above. However, if you read this piece from Wired, which effectively ends a cover-up regarding the Battle of Overstock versus Wall Street, I think you will understand why I chose to share this article with 41.7 million of my closest friends.
Your humble servant,
Patrick M. Byrne, CEO
“Scourge of Wall Street”

https://thebulletwire.com/wp-content/uploads/2014/02/Patrick-Byrne-CEO-Overstock.jpg

As you can see it links to a Wired article and what caught my eye was the very first line from Cade Metz.

Patrick Byrne says the zombie apocalypse is coming, and there’s one thing that can save us: bitcoin.

With Overstock recently reporting Bitcoin sales in excess of 1 million dollars in such a short time, and the average Bitcoin purchase being higher than the average standard currency purchase not only is that sentence telling, but it is also proving out to be on the way to being correct, as well.

With Patrick Byrne’s contentious history with Wall Street, he has made a lot of detractors but also a lot of supporters and with his latest venture into Bitcoin he is proving once again to be a savvy businessman who is also plugged in to what is going on in the tech world.

I think not only do his words and actions send a clear message to Wall Street that Bitcoin is here to stay and is viable he is proving it as well with hard numbers and record sales.

His calling out of Wall Street that he was so vilified for turned out to be prophetic with the 2008 market fall and the subsequent details of many of the behind the scenes goings on of the big banks and Wall Street traders came to light.

His loud claims of naked trading were met with derision, years later after the fall of so many banks the SEC made rules to stop this in it’s tracks.

His championing of Bitcoin and thinking beyond to using the Bitcoin framework for transferring securities as well shows forward and innovative thinking.

This all bodes well for Bitcoin and crypto currencies as large players in the game are going to follow his lead into it. Some may go kicking and screaming such as Wall Street. Wall Street dislikes it for being unable to control it and does not understand it. Others like Overstock, Tiger Direct, Virgin Galactic and so many others are embracing it with open arms.

Patrick M. Byrne, CEO
Patrick M. Byrne, CEO “Scourge of Wall Street”
All the places that accept Bitcoin are the one’s I look to first when I am going to buy something. I am glad to see it grow and have such a vociferous champion as Patrick Byrne his faults, and all as he is no Mark Karpeles. Patrick fights for his customers he does not steal from them like Karpeles does.

It is an exciting time to be involved in Bitcoin and crypto currencies.

[ponjava]

Configure P2Pool for Execoin

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/Gold_Selection_11Mar14_1933-300x159.png

p2pool logoP2Pool is a decentralized mining pool that creates a peer-to-peer network of miner nodes. Each node joins the p2p pool by running the p2pool software.

Execoin is a new scrypt ASIC and multipool-ming resistant cryptocurrency that can be effectively mined via P2Pool.

This guide will show you how to configure p2pool for Execoin, how to join the P2Pool network and establish your node as a mining operator peer. We will be using a fork of the original Bitcoin p2pool software, called zen2pool, that has been optimized for scrypt-based altcoins.

If you’d rather try P2Pool by just mining at an existing pool, rather than installing and configuring your own node, go ahead and download a customized Execoin version of your favorite miner and point it at this P2Pool node. Miner command line parameters are given below.

Requirements

Some prerequisites need to be installed (Windows installation instructions), and the rest of this guide will illustrate the process for Ubuntu Linux. It is assumed that you already have a local instance of the execoind daemon running with the following parameters:

$ ./execoind -daemon -server -rpcallowip=127.0.0.1
The P2Pool software will later connect to the execoind in server mode and will relay mining software RPC communication via the localhost.

Install Linux package dependencies:

$ sudo apt-get install git python-zope.interface python-twisted python-twisted-web
Now clone the zen2pool source code from GitHub to a local directory (git will automatically create the source directory):

$ git clone https://github.com/venzen/zen2pool.git
Change into the directory and have a look around:

$ cd ./zen2pool
$ ls -l
Build the Scrypt modules

Both the generic and progressive-N scrypt modules are included. Let’s build both while we’re at it:

cd litecoin_scrypt
sudo python setup.py install

cd ../vertcoin_scrypt
sudo python setup.py install
At this point, we are ready to start the P2Pool node, but for the sake of readers who may be configuring existing p2pool installations, we need to provide the Execoin specific configuration settings. These are pre-configured in zen2pool so you can skip the next section if you’re not customizing an existing p2pool software installation.

Execoin P2Pool Network Parameters

Execoin-specific configuration settings need to be placed in two files in p2pool. Your p2pool installation includes a p2pool/ subdirectory, which, in turn, contains a bitcoin/ subdirectory. We will be adding dictionary items to two files (both called networks.py) in these subdirectories. Add the code below after the first (usually bitcoin) entry for convenience.

The file p2pool/networks.py contains definitions that determine how p2pool will build the Execoin sharechain. Some of these settings can be tweaked to the mining operator’s context, but for now some failsafe values to get started.

p2pool/networks.py (example)

    execoin=math.Object(
        PARENT=networks.nets['execoin'],
        SHARE_PERIOD=9, # seconds
        CHAIN_LENGTH=24*60*60//10, # shares
        REAL_CHAIN_LENGTH=24*60*60//10, # shares
        TARGET_LOOKBEHIND=200, # shares
        SPREAD=40, # blocks
        IDENTIFIER='755F8AD0DD49380A'.decode('hex'),
        PREFIX='31357EF0ECB3C1BC'.decode('hex'),
        P2P_PORT=9172,
        MIN_TARGET=0,
        MAX_TARGET=2**256//2**20 - 1,
        PERSIST=True,
        WORKER_PORT=9173,
        BOOTSTRAP_ADDRS='5.255.87.165'.split(' '),
        ANNOUNCE_CHANNEL='#p2pool-exe',
        VERSION_CHECK=lambda v: True,
        VERSION_WARNING=lambda v: 'Upgrade Execoin to >=0.8.5.1!' if v < 80501 else None,
    ),
The critical value that should remain unchanged in the file above is

P2P_PORT=9172
This is the port over which the Execoin P2Pool network communicates the sharechain, and in order for your node to join the network, this port number needs to be the same on all nodes.

Also, notice that the PERSIST setting should be set to “True”.

The p2pool/bitcoin/networks.py file tells the p2pool software about the cryptocurrency parameters of Execoin – its block time, subsidy amount, and so forth. Notice that this file also defines the execoind port, as well as the execoind RPC port. These settings should not be changed without good reason.

p2pool/bitcoin/networks.py (example)

    execoin=math.Object(
        P2P_PREFIX='fabfb5da'.decode('hex'),
        P2P_PORT=9989,
        ADDRESS_VERSION=33,
        RPC_PORT=9988,
        RPC_CHECK=defer.inlineCallbacks(lambda bitcoind: defer.returnValue(
            'execoinaddress' in (yield bitcoind.rpc_help()) and
            not (yield bitcoind.rpc_getinfo())['testnet']
        )),
        SUBSIDY_FUNC=lambda height: 50*100000000 >> (height + 1)//840000,
        POW_FUNC=lambda data: pack.IntType(256).unpack(__import__('ltc_scrypt').getPoWHash(data)),
        BLOCK_PERIOD=45, # s
        SYMBOL='EXE',
        CONF_FILE_FUNC=lambda: os.path.join(os.path.join(os.environ['APPDATA'], 'Execoin') if platform.system() == 'Windows' else os.path.expanduser('~/Library/Application Support/Execoin/') if platform.system() == 'Darwin' else os.path.expanduser('~/.execoin'), 'execoin.conf'),
        BLOCK_EXPLORER_URL_PREFIX='http://altexplorer.net/block/',
        ADDRESS_EXPLORER_URL_PREFIX='http://altexplorer.net/address/',
        TX_EXPLORER_URL_PREFIX='http://altexplorer.net/tx/',
        SANE_TARGET_RANGE=(2**256//1000000000 - 1, 2**256//1000 - 1),
        DUMB_SCRYPT_DIFF=2**16,
        DUST_THRESHOLD=1e8,
    ),
Start the node

Make sure execoind is running as described at the start of the guide and determine the RPC username and password that execoind would have prompted you to create upon the first run:

$ cat ~/.execoin/execoin.conf
rpcuser=execoinrpc
rpcpassword=<longrandomcharacterpassword>
Make sure you’re in the zen2pool application root directory. We are going to start zen2pool with the following parameters:

--net execoin execoinrpc <longrandomcharacterpassword>
–net tells zen2pool to use the ‘execoin’  definition in the networks.py files and the last two parameters are your execoind RPC username and password as defined in ~/.execoin/execoin.conf

Execute the complete command:

$ python run_zen2pool.py  --net execoin execoinrpc <longrandomcharacterpassword>
You should see zen2pool starting up and making connections to execoind as well as the wider P2Pool network.

If zen2pool complains about “bitcoind” taking a long time – make sure execoind is running and that you are not passing it a -maxconnections= parameter.

If you see the message “Success” and lots of sharechain messages with “???” declarations, don’t worry, this is normal – zen2pool is bootstrapping the sharechain, and we have yet to point a miner at this node. Bootstrapping can take anywhere from a few minutes to an hour. We’ll continue setting up while this process runs.

Mining via your P2Pool node

Firstly, due to its built-in ASIC resistance, Execoin needs to be mined with specially compiled versions of most popular mining software. Binaries are available on the Execoin website.

zen2pool wants to pay you as soon as the network nodes (or you!) find a block, so you have to provide zen2pool with a wallet address to which payments will be sent. You do this by providing a wallet address as your username in the miner software parameters. The password needs to be sent but it is irrelevant and you can simply use “pass”:

$ cgminer --scrypt -o http://127.0.0.1:9173 -u mywalletaddress -p pass
P2Pool does not react to mining software in the same way as other mining pool software does, so you  may have to scale back on the intensity of GPU setting parameters.

Start your mining software and keep an eye on its output – it will not connect until zen2pool has finished downloading the sharechain – anywhere from a few minutes to an hour, so this is a good time to grab some coffee!

Web Statistics

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/Gold_Selection_12Mar14_1136-1024x571.png

p2pool web interface

Test your zen2pool web interface by pointing your browser at

http://127.0.0.1:9173
Alternatively, if you’re running zen2pool on a remote server/VPS, substitute 127.0.0.1 with the remote IP address.

Once the sharechain has finished downloading, stop and restart zen2pool. At startup it will display progress of loading the sharechain from its local disk cache and then indicate that its ready for mining by displaying empty local and global P2Pool stats. Start your miner and once it has submitted work for about an hour, the statics will be meaningfully populated, and you can monitor your mining in relation to the wider P2Pool network as well as other useful metrics.

 

Please feel free to make comments or ask questions below.

[ponjava]

Bitcoin madness at SXSW 2014


SXSW hosts many Bitcoin events
Bitcoin was well represented during the 2014 SXSW convention.
SXSW, also known as South by Southwest, is a yearly gathering where every ‘cool’ technology company tries to gain some mainstream media attention. One would think Bitcoin would be well represented over the past years, but the virtual currency acted merely as an underdog, until this year.

Bitcoin-crazy events

The 2014 edition seems to be a turn point for Bitcoin, as it seems harder to find a booth where the crypto isn’t being discussed at all. Aside from the official events where Bitcoin was a subject at SXSW’s largest venues, it was also the buzz at several after-parties that had all the high-profiles from the tech world in attendance.

So what does this do for Bitcoin? The prime example is last year’s informal acceptance of the currency by the Treasury Department. This happened soon after SXSW’s 2013 edition, and it helped send the value of Bitcoin on a rollercoaster ride. During SXSW, the coin was valued at about $50, where after the Treasury Department’s hearing it soared up to more than $250. Obviously, the way up was paired with some crashes as well, but at a steady value of little over $600 right now, it’s clear that Bitcoin made good use of the positive attention. Even more so when you look at the recent negative news regarding Bitcoin, it seems that people are reacting to messages of optimism. That is an important influence on Bitcoin’s long-term viability.

Dreaming big

The techies at SXSW clearly weren’t surprised by all the BTC frenzy. They’re fascinated by virtual currencies and are dreaming of a world with broad applications for it.

“Anyone who has any interest in technology has to be interested in this,” said Russell Castagnaro, who was attending his second SXSW for his job with the Hawaii Information Consortium. Castagnaro was seen at many of the Bitcoin events. He hopes that governments will begin to use the ledger that is a part of the Bitcoin system to transfer property and make payments easier.

Another interesting matchup was at an event that wasn’t even specifically about Bitcoin. A panel discussion on “The Future of Money”, hosted by Yahoo, had one panelist from PayPal and another one from BitPay. BitPay is a company that enables merchants to accept cryptocurrency payments, with some big names on its list.

Next up was rapper Nas, who is known to be a firm believer and investor in Bitcoin. He started talking about the currency during a panel discussion that featured venture capitalist Ben Horowitz. Horowitz is co-founder of Andreessen Horowitz, a firm that has invested about $50 million in Bitcoin-related start-ups. During the discussion, Horowitz called Bitcoin “the Internet of money.”  Nas and Horowitz also recently invested in Coinbase, another Bitcoin company. Coinbase founder Fred Ehrsam was also found at the gathering, stating that “once you get people talking about this, you can’t get them to talk about anything else.”

From zero to hero

Bitcoin entrepreneurs like Ehrsam and many others made a quick rise to stardom. A year ago, Coinbase was barely up and running. This year, at his first SXSW, Ehrsam was a main speaker on Monday afternoon in one of the largest venues. On top of that, he was able to gather a large crowd, showing once again how much interest there is in cryptocurrencies.

During these sessions, Ehrsam, and many others, were continuously asked to talk about the scandals that came up regarding Bitcoin, the Mt. Gox disaster being the number one question. People seem to be skeptical about Bitcoin, but curious at the same time. They believe in its strengths while not shutting their eyes for its weaknesses. “This is a healthy approach, people are willing to accept Bitcoin even after hearing some horror stories over the past weeks. I’d say this is really positive news for cryptocurrencies as a whole.”, a Los Angeles entrepreneur stated after Ehrsam’s session.

Ehrsam argued that Mt. Gox was a company that used Bitcoin, but it was not important to the underlying decentralized network that Bitcoin runs on. As a result, he said, its collapse should not threaten the basic technology that was invented in 2009 to allow digital money to be moved around the Internet. Many of the Bitcoin start-ups at the conference were pitching services that would make virtual currency accounts more secure with things like multiple-signature capabilities.

Bitcoin fans are hoping that the events at SXSW will help broaden the acceptance of virtual currencies beyond the early adopters and speculators who have driven many of the price moves until now. In this fast-changing crypto business, who knows what next year’s SXSW will mean for Bitcoin…

[ponjava]

New York issues order on cryptocurrency exchanges


Benjamin Lawsky announces regulation of Bitcoin exchanges
Benjamin Lawsky fights for regulation of cryptocurrency exchanges in state of New York
In an official statement made last Tuesday, the financial authorities of New York said that they would soon begin accepting applications for virtual currency exchanges. These would include those dealing in Bitcoins. This is a consequence of regulator’s growing interest in the technology. It was Benjamin M. Lawsky, the city’s Superintendent of Financial Services who issued the public order.

Need for stronger oversight

In the light of the demonstrated need for stronger oversight of virtual currency firms, Benjamin M. Lawsky, Superintendent of Financial Services, today issued a public order that the New York State Department of Financial Services (NYDFS) will consider formal proposals and applications in connection with the establishment of regulated virtual currency exchanges operating in New York.

Superintendent Lawsky said: “The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance. We will continue to proceed swiftly and thoughtfully to provide rules of the road for reputable virtual currency firms seeking to conduct business on-shore in a responsible manner.”

This stronger oversight will be made through a proposed regulatory framework which the city of New York plans to enact  for virtual currency firms operating in the state. Estimated time of arrival for this framework would be no later by the end of June. The city wants to act swiftly given that proposals and applications for virtual currency exchanges often take time for firms to develop.

Firms are allowed to immediately submit formal proposals and applications to operate virtual currency exchanges in order to help expedite the process of putting in place greater oversight for this industry. These proposals and applications represent the formal commencement of the regulatory process. They can be modified by the firm through discussions with the authorities to help ensure that they include strong consumer, cyber security and anti-money laundering protections.

Not just exchanges

New York’s interest in virtual currencies isn’t new. The city recently held hearings on the proposed regulatory framework. Financial regulators in the state have been investigating the use of Bitcoin and other virtual currencies since last year. This continuous work culminates in a specially tailored “BitLicense“, given out to virtual currency firms operating in New York. The city is also expected to consider proposals and applications for other types of virtual currency firms beyond exchanges.

The cry for regulation comes following the fall of Tokyo-based Mt. Gox. This exchange was the previously largest place for buying and selling Bitcoins. Mismanagement and a supposed hacking attack made the exchange file for bankruptcy, leaving thousands of people in the cold.

Superintendent Lawsky said: “Consumers should understand and receive appropriate disclosures about the potential risks associated with using virtual currencies or any other financial product, but the fact is that virtual currencies are unlikely to disappear entirely. They will likely continue to exist in one form, or another. As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators. The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance.”

The Bitcoin Foundation, a nonprofit which advocates for the use of Bitcoin, did not immediately respond to comment on New York’s announcement.

[ponjava]

Two-Bit Idiot: A Cautionary Tale


dunce two bit idiot bitcoin
Copyright 2009 Candie N.
My Dad always liked to compare life to poker, “you got to know when to hold ‘em, know when to fold ‘em,” he would say.

Sure, maybe I’m thinking of Kenny Rogers.

Either way, the lesson is one everyone could benefit from learning.

In case you are already familiar with Two-Bit’s recent episode, I believe it to be a symptom of a larger issue within the Bitcoin ecosystem.  This drama is barely surprising considering the long history of public high-stakes meltdowns that have been a part of the Bitcoin community for a long time.  Allow me to elaborate.

Two-Bit Idiot (Ryan Selkis) made a grave, and very public, mistake this weekend when he misplayed his hand in a gambit to force a change in leadership at The Bitcoin Foundation.  Demanding the resignations of Chairman Peter Vessenes and Executive Director Jon Matonis, Two-Bit threatened to release evidence demonstrating systematic neglect by two leaders.  Many criticized his egocentric style, or called Two-Bits ultimatum “extortion,” but from the foundation there was nothing but silence on the subject.

You may remember Two-Bit as the blogger/writer who leaked the documents that exposed Mt. Gox’s plan to defraud customers while the company recouped bitcoin it had lost.

“I believe Bitcoin has a moral imperative to succeed,” Two-Bit replied to those who accused him of trying to manipulate prices during the Mt. Gox scandal, “and that things which harm the ecosystem hurt me financially.”

As Mt. Gox filed bankruptcy, Two-Bit saw another threat to the ecosystem – the leadership of The Bitcoin Foundation.

“War”

The single declarative word at the beginning of Two-Bit’s blog last Friday set the tone for the weekend.

According to Two-Bit:

Only a swift and thorough overhaul of the Foundation’s leadership can preserve Bitcoin’s image with regulators, legislators and the general public.
[...]
Peter Vessenes and Jon Matonis are not scapegoats.  They are not innocent bystanders.  And they are not ethically entitled to remain in their board seats through later this year.

He then states that unless the two resign in 72 hours, a full length article will be published exposing facts that show the leadership at the foundation complicit with the meltdown at Mt. Gox, among other conflicts of interest. I encourage you to read and consider his points, they are valid concerns and have been echoed here at CryptoCoinsNews.

Of course, there was no response from The Bitcoin Foundation, and Two-Bit eventually came clean that he was not prepared to publish the evidence he had.

I started a “war” on Friday that I never should have waged alone.  I did so recklessly, and now I’m eating humble pie.

Two-Bit Idiot conceded the battle, but maintains his stance, and has assured me that his article will come out “eventually.”

The Larger “Problem”

This public drama is not unfamiliar to us Bitcoiners, who have been desensitized by the arrests of both legit and outlaw figures, more major “hacks” than anyone can count, and 50% price swings that depend on the phrasing of one Chinese official.  I believe this incessant drama to be merely a symptom of rapid growth of a decentralized economy.  The rapid expansion of Bitcoin endeavours coupled with the incredibly narrow segment of the population that is involved with Bitcoin has put a lot of people in positions they are not prepared to handle.

Basically, when the price of Bitcoin exploded last year, many “hobbyists” were suddenly starting careers.

Countless exchanges have been exposed as lacking adequate security, companies supplying specialized mining equipment have been crushed under demand, and most trading analysis is best summed up as, “Price moved, WTF?”  All around amateur hour.

It’s not a bad thing entirely; one of the beautiful things about Bitcoin is that its economy does not depend on monolithic companies to homogenize products and people.  Also, as greater levels of venture capital move into Bitcoin we should see greater investment in organizational structure and all around professionalism.

I’m not insulting Two-Bit, because he isn’t a “journalist” and has never claimed to be.  He is passionate, but miscalculated his leverage in the short-term.  However, he is a good example of how easy it can be to take a position for granted, and there is a lesson to learn from that.

Unfortunately, I don’t think this is the last time we will have to learn this lesson as a community.

[ponjava]

MAT Taking Pre-Orders on Scrypt ASICs

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/MAT_Bitcoin_ASIC_6THs-300x192.png

MAT Bitcoin ASIC 6THs
MAT Bitcoin ASIC 6TH/s
Netherlands based company Mining Asics Technologies B.V. (MAT) today announced it would start taking pre-orders for a new range of Scrypt ASIC miners.

MAT is one of the first companies to introduce a wave of powerful new Bitcoin Asic miners and Scrypt ASIC miners for Dogecoin, Auroracoin, Feathercoin, Litecoin and other scrypt cryptocurrencies. Pre-orders are open from 12 March 2014.

Standalone Scrypt ASICs

All of MAT’s ASICs are standalone embedded application devices featuring a Linux operating system running CGminer. The devices can be configured via webGUI from a desktop PC or smartphone.

MAT’s Scrypt Asic miners will allow the mining of Litecoin and all generic scrypt-based cryptocurrencies (Litecoin clones) such as Novacoin, Auroracoin, Feathercoin, Dogecoin and others. However, as discussed with the Execoin team yesterday, progressive-N scrypt cryptocurrency will not be mineable via these ASIC devices.

Dream Chip Partnership

From their press release:

 

For the development and production of the Bitcoin Asic miners, Scrypt Asic miners and Scrypt FPGA miners Mining Asics Technologies B.V. (MAT) has partnered with German engineering firm Dream Chip Technologies GmbH (DCT). Dream Chip Technologies GmbH (DCT) engineering team consist about 40 highly qualified and skilled resources in hardware, software and mechanical engineering capabilities. A state of the art design center is located at the headquarters to undertake hardware, software and programmable logic design work. Dream Chip Technologies GmbH (DCT) is led by a team of highly experienced professionals in its area of specialization. The Dream Chip Technologies GmbH (DCT) design team have worked on several state of the art designs in the areas of software, systems architecture, involving ASICs and FPGAs.

 

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/MAT_Scrypt_ASIC_200MHs-300x160.png

Pre-Order… How Long?

MAT Scrypt ASIC 200MHs
MAT Scrypt ASIC 200MH/s
Due to the disappointing show on pre-orders by companies such as Butterfly Labs, Mining Asics Technologies have lowered the initial deposit amount to 35%, with the balance of 65% to be demanded 3 months before shipping. Payments for orders can be made by Bank Transfer and Bitcoins via BitPay.

Mining Rigs

Titanium 1 – 28 nm Bitcoin ASIC Miner 6 TH/s
€ 6.999,00. 35% Deposit – € 2.449,65
Shipping September 2014

Titanium 2 – 28 nm Bitcoin ASIC Miner 3 TH/s
€ 3.999,00. 35% Deposit – € 1.399,65
Shipping September 2014

Platinum 1 – FPGA Scrypt Miner 10 MH/s
€ 2.999,00. 35% Deposit – € 1.049,65
Shipment planned: August 2014

Platinum 2 – FPGA Scrypt Miner 30 MH/s
€ 5.999,00. 35% Deposit – € 2.099,65.
Shipment planned: August 2014

Excalibur 1 – ASIC Scrypt Miner 50 MH/s
€ 4.999,00. 35% Deposit- € 1.749,65
Shipment planned: Q3/Q4 2014

Excalibur 2 – ASIC Scrypt Miner 100 MH/s
€ 7.999,00. 35% Deposit- € 2.799,65
Shipment planned: Q3/Q4 2014

Excalibur 3 – ASIC Scrypt Miner 200 MH/s
€ 14.999,00. 35% Deposit- € 5.249,65
Shipment planned: Q3/Q4 2014

 

In defense of their 6 month shipping delay until August and September of this year, MAT has the following to say:

 

The whole Litecoin or other Scrypt cryptocurrencies difficulty in 6 months time will be made up only of GPU’s. When we ship our FPGA Scrypt miners or ASIC Scrypt miners it will be more advantageous than any GPU rig, it will be more cost efficient, and much more power efficient.

 

Hang Dai, GPU

This seems to be the consensus view – that the Scrypt ASIC invasion is inevitable and that it’s dominance will be total and pervasive. It is this writers view, that the deafening silence from the GPU giants AMD and Nvidia should not be interpreted as signifying their disinterest in the mining market. On the contrary: the release of High Bandwidth Memory equipped GPU devices around the second half of 2014 should ensure an increase of heat in the blasting room of the Scrypt mines.

[ponjava]

BitPay Drops Central Texas Gun Works; Bitcoin Magazine Drops Headline


Original Bitcoin Magazine article; article has been removed.

Late last night, Bitcoin Magazine published an article about Central Texas Gun Works (CTGW) being “dropped” by their Bitcoin Payment Processor: BitPay.  In response, and due to CTGW owner Michael Cargill‘s commitment to Bitcoin, CTGW has promptly switched to CoinVoice‘s Bitcoin invoicing services to provide guns and gun services in exchange for Bitcoin.

Bitcoin Magazine originally reported that it was unclear whether or not BitPay’s ToS was changed before or after Central Texas Gun Works signed on with BitPay.  That is obviously untrue, as the Internet Wayback machine can verify: BitPay’s ToS has been firmly anti-firearm for years.  As BitPay’s CEO Tony Gallippi told Forbe’s Jon Matonis, now Executive Director of the Bitcoin Foundation, back in 2012: BitPay would stick to its ToS.

Bitcoin Magazine: Where Is The Original Article?

For reasons unknown, Bitcoin Magazine’s breaking article from last night has been removed from their website.  The article was the first piece from Bitcoin Magazine that cast BitPay in a negative light, and it seems to have had a shelf life of just over a few hours.

It is only thanks to the quick work of NewsBTC that the Bitcoin community is aware of this particular Bitcoin Magazine article since it wasn’t publicized much and had an extremely limited twitter run.  Someone pulled the rug out from under this article.

Bitcoin Magazine is one of the oldest Bitcoin news sources and employs wonderful writers such as Ethereum’s Vitalik Buterin.  However, you may not have been aware that the Executive Producer of Bitcoin Magazine is none other than BitPay’s CEO: Tony Gallippi.

BitPay and CTGW

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/michael-cargill-bitcoin-twitter.jpg

Cargill at Texas Independence Day celebration hosted at his gun store.
Cargill at Texas Independence Day celebration hosted at his gun store.
BitPay has stated CTGW is in violation of BitPay’s ToS and CTGW owner Michael Cargill has stated that BitPay froze his accounts without any warning.  Just a cursory look at the BitPay ToS does reveal that firearms are and have been explicitly forbidden for years.  This begs the question: How did Central Gun Works Texas make it through BitPay’s vetting process to begin with?  Cargill has emphasized that BitPay knew all about Central Texas Gun Works’ business model before they signed him on.

To be clear, I don’t think there is anything wrong with a Bitcoin accepting service standing firm by their ToS and refusing to deal with firearms on mere principle. Many observers will recall that such a philosophical stand was taken by DPR of Silk Road, despite the mainstream media’s best attempts to paint the underground marketplace as an assassination market.

Coinbase On Guns And Drugs

Unlike BitPay, Coinbase does not have anti-firearm clauses in their ToS and there is at least one legal firearm dealer in the United States that has signed up under Coinbase.  Despite Coinbase’s seemingly open stance towards legal sale of guns using Bitcoin, they have been less receptive towards the legal sale of marijuana.

Months ago, Kashmir Hill of Forbes reported the story of Seth Green from Pacific Northwest Medical, a legal medical marijuana dispensary in Washington State.  Green was turned down by Coinbase despite the legality of his operation and his securing of a bank account.  On the topic of legal marijuana dispensaries, Coinbase believes that “We can’t service them as a customer because it’s still technically illegal federally.”

In comparison, BitPay’s response to legal marijuana dispensaries was this: “We are unable to offer our services to business that sell drugs.”

 

CoinVoice To The Rescue

http://www.cryptocoinsnews.com/wp-content/uploads/2014/03/coinvoice.png

coinvoice

CoinVoice reportedly worked overtime to provide Bitcoin processing solutions to CTGW when they were removed by BitPay in the last few weeks.  Though this news is just breaking today, CTGW’s website reveals that CTGW made the switch from BitPay to Coinvoice at the beginning of March.  It is not yet clear whether or not CoinVoice will do business with legal marijuana dispensaries in Washington and Colorado or legal medical marijuana dispensaries in 17 states across the country.

[ponjava]

Company takeovers using Bitcoin are trending


Blockchain.info CEO Nic Cary has big plans for the future of Bitcoin.
Blockchain.info CEO Nic Cary used Bitcoins to takeover several companies and plans to announce a major takeover in the next few weeks.
Over the past few years, Bitcoin has grown. What started out as an isolated internet currency, only used by geeks has become a real method of payment. Pizzas, piano lessons, haircuts, it’s possible to find a merchant that accepts Bitcoin for almost anything. 2013 However saw a new trend in the use of the cryptocurrency. Complete enterprises were being bought and paid for with Bitcoins.

Fast Bitcoin deals

Analysts reported to American channel CNBC that they expect more frequent usage of the coin in the future when it comes to selling or buying companies. The first major deal was closed in July 2013, when gaming company Satoshi Dice was sold to an unknown party for 126.315 Bitcoins. When we compare that number to the value of Bitcoin in that particular month, that accounts for a total amount of 10 million dollars. This shows that Bitcoins are usable for every purchase, be it a pizza or a million dollar business deal.

The next take-over came in December 2013, when the well-known Blockchain.info decided to buy Zeroblock. Pricetag for this major deal is unknown, but experts agree that this also was a million dollar sale. Blockchain is a famous company in the world of cryptocurrencies. They are the biggest supplier of online digital wallets where you can store your coins. Zeroblock, on the other hand, was a smaller company. They developed an app that shows Bitcoin’s value on the different exchanges, as well as the latest news regarding the currency.

Because both companies are working with Bitcoins every day, it’s their main trade, it’s not surprising that they financed the merging with Bitcoins. One of Zeroblock’s founders told The Wall Street Journal that the whole deal was made in a mere twenty seconds. An astonishingly fast agreement, considering that most deals of this magnitude take months to succeed. It’s not only about the meetings held in order to reach an agreement, the transfer of such a large amount of money takes time, as well. And once again, this is where Bitcoin shines. The whole transfer was done without any hassle, a matter of a few hours and a gentleman’s handshake.

Legal matters slow things down

Obviously, these advantages carry a few disadvantages with them, as well. Companies are subject to taxes, and in order to comply with the law, Zeroblock had to exchange some of their profits in dollars. This has several consequences that aren’t necessarily Bitcoin’s fault, but it sure makes large deals harder than they should or could be. Another important drawback is the dreaded need for regulation. Common people may like the fact that Bitcoin operates in the wild west, but large companies won’t think about using Bitcoin in big business trades when there’s no legal framework surrounding the cryptocurrency. On top of that, the trades need to be expressed in a paper currency, for taxing purposes. Bitcoin’s value on the exchanges proves to be a bumpy ride sometimes and most companies like a stable coin more.

Despite bad publicity like Mt.Gox’s collapse, the Bitcoin market is still moving in full force. “People are trying to find their spot in this relatively new market, companies are constantly looking for interesting opportunities.”, says Blockchain CEO Nic Carey. Earlier this month Blockchain bought RTBTC, a big Bitcoin exchange. On top of that, in a few weeks, Blockchain claims to be able to announce the biggest takeover ever in the history of Bitcoin. Blockchain makes hundreds of thousand of dollars every month, mostly earned by advertising.

[ponjava]

Dogecoin Forks to Avoid Multipool Exploit, Mandatory Update!



dogecoin has forked
Dogecoin forks to avoid exploitative mining pools.
Yes, you can still teach an old Doge new tricks.

Only three months after the release of Dogecoin, the cryptocurrency based on a meme has cleared its third major hurdle.  After discovering that certain mining groups were exploiting a weakness in the protocol to game the system, the doge-devs are ready to release version 1.6 of the Dogecoin wallet client.

This update is mandatory.

At block 145,000, Dogecoin will automatically fork so that no Dogecoin is at risk of being lost.

The update will change block-rewards, which had been random, to a flat 250,000 DOGE.

Also included in the update is the DigiShield difficulty algorithm, which will allow the mining difficulty to adjust near-instantly.  This was developed by the team at DigiByte, who allowed Dogecoin to use it in a gracious show of community-spirit.  In a rapidly expanding market, such team spirit is rare.

Additionally, mined Dogecoin now takes four hours to mature before being spent.  This allows any potential forks in the future to be dealt with in a more efficient manner.

“Fork you, Multi-pool.”

Multipools are mining groups that use their hashing power to mine whichever coin is most profitable at a given moment.  Miners participating in multipools configure their rigs in an all-purpose manner and the multipool server then calculates the exchange rates of eligible cryptocurrencies, directing the massive mining power to net the miners the greatest profit.

The mercenary nature of multipools is the result of free-market competition, and in many ways is necessary for assuring that there will be hash-rate available to any coin that has demand.

However, a problem arises when a multipool causes a sudden surge of hash-rate, resulting in increased difficulty of mining.  Once the difficulty rises and the coin is less profitable, the multipool moves on, leaving smaller miners struggling through difficult calculations until the next difficulty-adjustment.

Using DigiShield, difficulty adjustment is nearly instantaneous, eliminating the problem of large pools surging in when the difficulty is low and abandoning once it adjusts.  This is a big deal, because this addition sets Dogecoin apart from the cryptocurrency it was cloned from, Litecoin.

The major reason for the sudden Dogecoin 1.6 fork is that the “random” block-rewards had been essentially cracked by multipools.

The multipools were able to figure out the reward sizes of blocks ahead of time and cherry-pick those with large rewards, leaving the scraps to smaller miners.  With the removal of random block rewards, this problem no longer exists.

State of the Coin

Attention paid to Dogecoin, along with its exchange rate, has been neglected since the Olympics ended, and Bitcoin has had the spotlight with scandal after scandal.

Many feel that the multipool gaming of block rewards was the cause of much of the downward price trend, though, as it is common for alt-coin miners to sell their rewards for Bitcoin/fiat immediately.

Shibe-charity is alive and well with the Doge4Water initiative to raise awareness for clear drinking water.

Additionally, as a “Thank you” for the help DigiBytes gave to the Dogecoin development team by lending the use of DigiShield as well as helping to test the new wallet, many shibes are organizing to vote for DigiBytes to be the next Cryptsy market.

Amid this rallying to put DigiBytes on Cryptsy, shibes are flocking en-masse to Kraken, a U.S. based exchange that recently opened trade to the often silly cryptocurrency.  Many shibes feel Cryptsy can’t handle the large volume of Dogecoin trade, as it often halts service during peak hours.