BITCOIN NEWS EVRYDAY! From multiple sources.

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Search Engine DuckDuckGo Integrates Bitcoin Price Quotes
Nermin Hajdarbegovic | Published on April 7, 2014 at 14:10 BST | News, Technology

Privacy-loving search engine DuckDuckGo has started displaying price quotes on bitcoin-related search queries.

Launched in 2008, DuckDuckGo is a relatively fresh-faced search engine headed up by Gabriel Weinberg. The driving force behind the service is privacy – thus, integrating bitcoin price quotes seems like a logical move for the young outfit.

The search engine is designed for people who would rather not have their personal data tracked online. Since it doesn’t store any user data, the site does not offer personalised search results – or personalised ads for that matter.

In 2013 alone, DuckDuckGo had one billion search queries and is gaining traction fast.

DuckDuckGo goes bitcoin

The implementation of the price listing, as first spotted by NewsBTC, appears to be rather rudimentary. The new feature only shows up when you enter specific queries like “bitcoin price” or “BTC to USD”. The price quote then links to Blockchain.info, specifically to the market page.

duckduckgo

However, if you try searching for “bitcoin quote” or even “bitcoin price quote” the quote box does not pop up. This is not the case with other price search engines that have started quoting bitcoin, so DuckDuckGo might want to polish its solution.

Google still lacks bitcoin integration

Search giant Google does not offer a bitcoin quote box and it is unclear whether it plans to do so. However, Microsoft’s Bing search engine and Yandex, the biggest search engine in Russia, have already integrated bitcoin functionality, including automatic price conversion.

For example, Bing will work out the value of bitcoin on the go, provided the user enters a search that can be figured out by the engine. This basically means that you can enter a search like “1 BTC to USD” and Bing will automatically convert it.

The same is true of Yandex, which displays the exchange rate using the CoinDesk Bitcoin Price index and it also allows a convenient price conversion tool. Wolfram Alpha also offers a simple bitcoin look-up tool.

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DigitalBTC Signs Bitcoin Mining Hardware Deal with BitFury
Nermin Hajdarbegovic | Published on April 7, 2014 at 12:02 BST | Investors, Mining, News

DigitalBTC has inked a strategic hardware supply agreement with BitFury, one of the leading manufacturers of bitcoin mining equipment.

The company is owned by Australian investment firm Macro Energy, which acquired Digital CC and its subsidiary digitalBTC last month. Thanks to the acquisition, the firm became the first bitcoin-related business to be listed on the Australian Stock Exchange (ASX).

Mining plans

At the time Macro Energy said it plans to raise AU$9.1m and to invest the money in the expansion of digitalBTC operations, including bitcoin mining. Soon after digitalBTC entered a strategic partnership with CloudHashing.com.

Under the terms of the agreement CloudHashing.com software will be deployed on digitalBTC hardware, which will also be managed by CloudHashing.com. The hardware will apparently be installed in CloudHashing.com data centres in Iceland and Texas.

The companies pointed out that the deal is a win-win situation for all parties – digitalBTC gets valuable expertise on the technical issues of the business, while CloudHashing.com gets access to digitalBTC’s trade desk.

DigitalBTC’s Executive Chairman Zhenya Tsvetnenko said the partnership will allow digitalBTC to concentrate its resources on retail-focused mobile applications and other operations.

CloudHashing.com CEO Emmanuel Abiodun told CoinDesk that the relationship is mutually beneficial and that he is pleased to team up with digitalBTC, which has strong capital backing and a proven track record in bitcoin trading.

Abiodun added that CloudHashing.com expects to generate $7.5m-$10m worth of bitcoins a month.

Enter BitFury

DigitalBTC has not shared much detail about the BitFury deal, nor did it mention CloudHashing.com. However, the company did state that the first instalment of the new bitcoin mining hardware is already in operation and started generating revenue in March.

The revenues will be used to fast-track the development of digitalBTC’s retail products. The company stressed that retail products are a key focus for its business model. There is still no word on the precise quantity and type of hardware ordered by digitalBTC, but the company did say that the first batch cost $2m.

“Under this agreement, BitFury will supply a significant quantity of its most advanced bitcoin mining hardware to digitalBTC, backed by manufacture assurances. This will significantly advance digitalBTC’s bitcoin mining capacity,” the company said.

DigitalBTC points out that about 40% of the bitcoins so far produced were mined with BitFury chips. Furthermore it states that the hardware it acquired has secured it a “significant proportion” of the current bitcoin mining network, thus making digitalBTC one of the largest bitcoin mining operations in the world.

Big earner

The first installation of new BitFury hardware has earned digitalBTC more than 680 bitcoins since it was deployed, earning the company $330,000 during its first 13 days of operation between March 20th and April 2nd.

DigitalBTC said:

“DigitalBTC has committed to two tranches of hardware – this first installation of $2m of state-of-the-art bitoin mining hardware that is currently in operation, and a second tranche planned to be delivered and operational in May 2014.”

Tsvetnenko said the agreement is backed by “attractive” manufacturer guarantees and that it allowed digitalBTC to quickly expand its mining capacity. Furthermore, the company plans to continue expanding its bitcoin operations, including mining, trading and consumer focused retail applications.

Said Tsvetnenko:

“The bitcoin system continues to rapidly mature, evident by significant backing from very large investment firms. Bitcoin focused investment funds of approximately $150m in capacity are now being formed. In addition, there has already been in excess of $100m of investments made into the bitcoin system. This magnitude of investment is set to drive bitcoin into ever wider acceptance and use.”

Tsvetnenko said the next step is to enable development of the consumer-friendly software and applications that the system needs. DigitalBTC plans to be a contributor to this retail push, he explained, through its consumer-oriented retail applications.

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Swedish Kickboxer Wins Bitcoin Fight Prize, Max Keiser KO’s ‘Bankster’
Roop Gill (@roopgill) | Published on April 7, 2014 at 16:12 BST | Events, Lifestyle

Seven kickboxers from around Europe competed in the first Bitcoin Fight Night on Saturday, 5th April.

Held at the iconic O2 Arena in London, a prize of bitcoin worth £5,000 was on offer to the tournament victor.

Before the actual tournament kicked off, six fighters competed in the warm-up rounds, including two female combatants.

Sweden-based Meran Zangana was the big winner of the event, scooping the digital currency prize as his reward for beating the UK’s Kevin Ward in the final fight of the night.

Youtube link: https://www.youtube.com/watch?feature=player_embedded&v=zuyaeUCvSBs
Bitcoin Fight Night prize

With over 700 tickets sold, the tournament was the biggest UK-based bitcoin event yet.

Organiser Patrick Carroll explained that the idea for the Bitcoin Fight Night came about while attending a meetup group run by CoinScrum in central London.

While the indigO2 arena in the O2 was packed on the night, not everyone was there to support cryptocurrencies – the audience was a mix of bitcoin enthusiasts and kickboxing fans.

The die-hard fight crowd were there to cheer for their favourite fighters, and many bitcoiners came for a special interval act – a staged fight between broadcaster and proponent of digital currencies Max Keiser and ‘The Bankster’ represented by a trained kickboxer.

Keiser’s crowdfunding venture StartJOIN was co-sponsoring the event. He explains how he got involved:

“The kickboxing and bitcoin guys came to StartJOIN and they said ‘we want to put the project on StartJOIN’, which is a crowdfunding site. We immediately got involved and then they said, ‘why not have Max come along?’ So I reluctantly agreed to do this.”

Maxcoin defeats paper money

Prior to the fight, he told CoinDesk about his plans: “I come out and we are going to have a little match with somebody representing paper money and the banking cartel – the evil, the true evil in this world.”

He added:

“Unlike some of these markets, like JP Morgan’s activities or Goldman Sachs, which are entirely rigged, this is only partially rigged.”

During the interval of the tournament, Keiser took to the ring and the gloves came off, literally. However, no real blows were exchanged. Some intense yelling seemed to intimidate his opponent and, as a final blow, Keiser flashed his MaxCoin T-shirt. ‘The Bankster’ immediately fell to the floor.

Keiser explains why he thought this interval act was more than just a gimmick:

“The fight in this arena is a good metaphor for what’s happening in the geopolitical front. Countries are now on a war footing. The battle is heating up. People are looking to preserve wealth and they will naturally go to bitcoin gold and silver.”

He also had some predictions for bitcoin:

“Metaphorically, bitcoin is the hero in the new currency arena and I think it will dominate the currency trading going forward. I think it will capture a significant part of the FOREX market. I think price will rebound in 2014 and hit an all-time high.”

Before the Bitcoin Fight Night, a panel discussion on the topic ‘How Can Bitcoin Fight Back Against the Hackers’ took place at the venue, chaired by Chris Ellis, the co-founder of feathercoin.

Both events were sponsored by Firestartr.co, which provides seed-stage capital and aids startups in their early stages.

Sponsored by : www.bitcoinlottery.co.nf

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Jeremy Allaire: ‘Bitcoin Needs Greater Governance to Reach Mass Adoption’
Pete Rizzo (@pete_rizzo_) | Published on April 7, 2014 at 17:03 BST | Analysis, Circle, Investors, News, Regulation

Circle CEO Jeremy Allaire gave the opening keynote address at Inside Bitcoins New York on 7th April as part of a talk entitled ‘Mainstreaming Bitcoin: The Next Phase of Digital Currency Growth & Value Creation’.

The two-day conference will feature a number of notable speakers from the industry, including Blockchain’s Nicolas Cary, GoCoin’s Steve Beauregard and Kraken’s Jesse Powell, and is expected to draw roughly 1,000 attendees.

Inside Bitcoins, Jeremy Allaire, Circle

The second annual Inside Bitcoins New York conference and expo kicked off on 7th April with a keynote address from Circle CEO and founder Jeremy Allaire that addressed how the industry should seek to take bitcoin and its many benefits into the mainstream.

During the half-hour speech, Allaire bristled through a big-picture vision of, not only where bitcoin is today, but the steps he feels it needs to take to reach the mass-market acceptance of other technological breakthroughs like the Internet.

The most notable of Allaire’s many points was perhaps his emphasis on the fact that reaching this goal is likely to require the bitcoin community to make fundamental changes, while at the same time becoming more open to involvement from stakeholders, such as governments and commercial banks, that may have traditionally been treated adversarially by the community.

The future, according to Allaire, will require bitcoin to work with traditional financial institutions so that the technology can reach its full potential.

Explained Allaire:

“Bitcoin needs greater levels of governance around it. I do not believe this industry will grow without collaboration from governments around the world.”

At the same time, Allaire also stressed that such changes will need to take time.

For example, he drew notice to the fact that e-commerce makes up just 5.8% of retail sales, and that though many have been heralding the death of broadcast television, it has not yet been replaced by new technologies.

‘We’re in 1994′

Allaire likened the state of the bitcoin industry to the Internet of 1994, but the comparison was not entirely positive, as he stressed that “these transformations take a really long time”.

The keynote speaker noted that bitcoin is still waiting for a killer app, and that bitcoin has still achieved only limited consumer adoption.


Allaire estimated that 90% of bitcoin users are holding the digital currency as a speculative investment, and that few are using it for everyday payment.

‘Architecture will need to scale’

The Circle CEO also noted how the fundamental bitcoin technology has still not caught up with the larger ideas proliferating in the space.

Specifically, he stated that, today, bitcoin can handle only about nine transactions per second.

Said Allaire:

“That’s not going to scale and not going to work. The fundamental aspects of the architecture will need to scale.”

Further, he indicated that the companies that use the technology will need to evolve to associate identity with transactions, thus providing all governments and businesses the ability to enforce laws while the system maintains anonymity.

He also discussed the future of mining, suggesting that this industry will need to evolve toward an industrial scale while incorporating hobbyists, adding: “I believe that as [...] the monetary base gets into the trillions, governments will introduce regulations for global mining.”

‘We need mainstream commercial banks’

Despite recognizing these shortcomings, Allaire also offered bold predictions about bitcoin’s potential should it meet these challenges.

For example, he noted that he believes major online processors such as Chase Paymentech, First Data and PayPal will have adopted bitcoin within three to five years’ time.


In his talk, Allaire stressed the need for added governance in the community. However, he notably used governance as a broad term, extending beyond government enforcement to encompass the steps the community at large will need to make to ensure consumers can use bitcoin.

But, Allaire also attacked early bitcoin adopters, who he characterized as looking to capitalize on the increasing value of bitcoin, while at the same time harbouring ill will toward the institutions that would allow them to capitalize on exchanging their bitcoin for capital.

Allaire indicated that these users should see the middle ground that he believes the industry will need to establish, one that balances the privacy of cash with the needs of governments and authorities, and recognizes that paper currency is not likely to go away.


About Jeremy Allaire

A tech entrepreneur since the mid-1990s, Allaire was notably the CEO of online video platform Brightcove until 2013, when he stepped down to start a bitcoin company, Circle Internet Financial.

Allaire has been outspoken about the need for increasing regulation in the bitcoin space, and given his prior business success, has quickly assumed a leadership role in the industry.

After a long tenure as bitcoin’s most notable stealth startup, Circle unveiled new details about its business model on 26th March, along with $17m in new Series-B funding.

Sponsored by : www.bitcoinlottery.co.nf

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Bitcoin Mining Hardware Maker AMT Facing Court Over Delays
Jon Southurst (@southtopia) | Published on April 7, 2014 at 17:34 BST | Companies, Mining, News

Mining hardware manufacturer Advanced Mining Technology, Inc. (AMT) is the latest to face a class-action lawsuit from customers alleging products were not delivered on time, according to a report in the Delaware County Daily Times.

There are concerns lawsuits could soon become more common in this field, in which small startup companies race to design and build cutting-edge and specialist hardware, dealing with processes that can challenge even large chip manufacturers.

Just over a week ago, a Texas judge granted a court order to ‘freeze’ the bitcoin wallets of another ASIC mining manufacturer, HashFast, as part of a lawsuit claiming late delivery.

Fast obsolescence

Timing is perhaps even more critical in the world of bitcoin mining, where expensive machines delivered even a month or two late are rendered obsolete with no other useful purpose once mining becomes impractical.

The plaintiffs filed a complaint in the US District Court for the Eastern District of Pennsylvania last Wednesday, claiming the Haverford, Pennsylvania, startup is a “sham” company unwilling or unable to deliver its ASIC mining hardware on time.

The class action brings together plaintiffs from Florida, North Carolina and Utah, all of whom claimed they purchased ASIC hardware from AMT in November and December 2013, which was never delivered. They also claim there are hundreds of other AMT customers in the same boat.

They are requesting a jury trial based on claims of: “unfair, deceptive and fraudulent business practices, breach of contract, breach of express warranty, common law fraud, negligent misrepresentation, breach of the duty of good faith and fair dealing, unjust enrichment, and various state consumer protection laws.”

Still communicating

A quick check of online forums indeed reveals some dissatisfied customers, and hints that the small company has struggled to meet the demands of large-scale customer service. On those same forums, however, AMT claims it is shipping products and has been posting regular updates in its official company news thread.

AMT, whose website slogan is ‘Coin Mining on the Level’, also sells on Amazon and has a catalogue that ranges from a compact 80 GH/s miner for $1,499 to a 3.2 TH/s beast for $14,999, with 20 units scheduled to ship on 15th April. It also sells its 28nm ‘Coin Craft A1′ chips and has said in forum posts it intends to offer a hosted mining option in future.

CoinDesk has reached out to AMT for further comment on this story, and will include it in an update if/when it arrives.

Sponsored by: www.bitcoinlottery.co.nf

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Enthusiasts and Sceptics Debate Bitcoin at London’s O2 Venue
Roop Gill (@roopgill) | Published on April 7, 2014 at 18:28 BST | Analysis, Events, Feathercoin, Lifestyle

A panel comprising of both bitcoin enthusiasts and sceptics discussed everything from awareness and education to regulation and entrepreneurship at a panel discussion held at London’s O2 venue on Saturday, 5th April.

Titled ‘How Bitcoin Can Fight Back Against the Hackers and Recent Setbacks’, this discussion took place before the much-awaited Bitcoin Fight Night kickboxing event, and was co-organised by CoinScrum, Firestartr.co and HardBTC.org.

Bitcoin-Panel-Discussion

Hosted by Chris Ellis, bitcoin enthusiast and co-founder of feathercoin, the goal was to have developers, philosophers and bankers engage in a dialogue about bitcoin.

Sadly, the event didn’t quite go as planned, with technical difficulties with a live stream from the US and the resulting delay shrinking the size of the panel from the original seven to four, which included the last minute enrolment of Simon Dixon from Bank to the Future.

The final lineup was as follows:

Chris Ellis – co-founder of feathercoin
Ben Dyson – bitcoin sceptic and founder of Positive Money
Gautam Dhillon – founder of the Treasury Outsourcing Company and former employee of Lloyds Bank and JP Morgan Chase.
Simon Dixon – CEO and co-founder of Bank to the Future
Bitcoin Panel Discussion: Chris-Ellis
Chris Ellis, feathercoin co-founder, hosted the discussion
Although the panel was smaller than expected, Ellis, Dyson, Dhillon and Dixon were able to cover a wide array of subtopics from within the cryptocurrency realm.

Security concerns

The main theme of the debate was to address security concerns around bitcoin and other cryptocurrencies. In the shadow of the Mt. Gox fiasco, Ellis started off by mentioning that some people who had a good grasp of bitcoin and were smart investors also lost money on Mt. Gox:

“I think there is a lot of awareness (about bitcoin) right now, but there isn’t an awful lot of understanding.”

“I am not sure how much awareness there is,” countered Dyson. “I was reading a reddit thread of Mt. Gox horror stories and one guy lost his kids’ education fund and another borrowed his wife’s live savings to put into Mt. Gox. All this is typical bubble behaviour.”

He added:

“People need to understand that bitcoin is more like gold. If somebody takes cash out of your wallet, you aren’t going to get it back.”

Commented Dixon: “When you are dealing with banks, the bank takes care of security. But, peer to peer, the peer has to take care of security. So, it’s a challenge because people need to be aware of how to store [their coins].”

Expectations from the entrepreneurs

On the topic of increasing education on the pros and cons of bitcoin, Dixon said that it was the responsibility of entrepreneurs to solve issues that consumers don’t want to engage with.

He said:

“Bitcoin will be a success when people don’t have to know how it works. No one looks inside their iPhone and scrutinizes how it works. No one looks inside his or her TV or credit cards; they just work. When bitcoin becomes close to adoption, it will be because entrepreneurs have invested into things that make it so that you don’t need to know how it works. That’s one of the things that is holding back adoption right now.”

Bitcoin Panel Discussion: Ben Dyson
Ben Dyson takes the mic
While some of the panellists were discussing how to increase the usability of bitcoin, Dyson was more vocal about his scepticism regarding the technology as a whole.

“There are design flaws in bitcoin,” said Dyson. “It’s a prototype and when you create a prototype, you quickly learn there are problems with that, so you change those and bring something new.”

He added:

“Here’s what bothers me about bitcoin: the first version of the Internet was basically connecting few different universities in California. Now, we are using a better design. With bitcoin, everyone is still stuck on first design and first version.”

That conversation turned into a discussion of various cryptocurrencies currently in existence. Ellis himself is the founder of an altcoin called feathercoin. He pointed out that it can take about a week for someone to study the code and create their own cryptocurrency.

Said Ellis:

“Asking ‘how many cryptocurrencies there would be’ is like asking how many bloggers there would be.”

Towards the end of the talk, the panel engaged with the audience and took questions from the attendees. Furthermore, there was allotted time for networking after the event.

Attendees of the meetup also had access to discounted tickets for the first Bitcoin Fight Night, where they could see an evening of kickboxing, as well as a stunt by broadcaster and MaxCoin founder Max Keiser who symbolically took on a fighter representing traditional currency (see the video).

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Dutch Regulator Says Bitcoin is Technology, Not Money
Kadhim Shubber (@kadhimshubber) | Published on April 7, 2014 at 18:05 BST | Europe, News, Regulation

Bitcoin won't replace the euro says Dutch regulator
Bitcoin is not money, the deputy director of the Dutch Payments Association has declared.

Comparing the digital currency to tulip bulbs, which famously rocketed in price during the ‘Tulip Mania’ bubble of the early 1600s, Gijs Boudewijn dismissed suggestions that bitcoin could be currency:

“Bitcoin is not a claim and therefore not money … If you and I agree to pay each other in tulip bulbs then we have established a private currency and the same applies to bitcoin.”

The comments, made in a wide-ranging interview with Dutch bitcoin news site deBitcoin.org, come as European regulators begin to grapple with creating a unified approach to digital currencies.

Bitcoin is a limited prospect

Bitcoin has two almost distinct personalities. The first is the political revolutionary, destined to disempower government. The second is more prosaic; bitcoin is simply a better way of transferring money, a technology easily co-opted by a banking system seen by some bitcoiners as the enemy.

For the majority of society, Boudewijn argued, bitcoin will be the latter, a useful technology for specific transactions and no more than that:

“For specific purposes [bitcoin] is convenient. But eventually – and that’s why you have exchanges – you want to redeem them for something that’s state-backed, and that is central bank money … The functionality and the technology are extremely interesting. The question is, do you want that in a cryptocurrency or can you apply that with the euro as well?”

The comments come weeks after the Dutch Minister for Justice and Security said bitcoin would not be banned, and echo a recent UBS report that suggests that banks can adopt “a bitcoin-like technology” to create a new foundation for payment services that would prop up, instead of pull down, the existing banking system.

Boudewijn said he doubts that bitcoin can become a widely-used currency, and argued that the need for government to provide confidence in a currency means bitcoin would be a limited prospect:

“The underlying fundamental discussion is what the functions are of money in society. In the end it is just a social convention that we agree on together in that we have one legal tender here, and we call it the euro. And a central authority is supervising that. They issue it and guarantee that if [a bank] goes bankrupt … savers get their money back.”

Banks need to get used to bitcoin

Of course, one of the core political arguments behind bitcoin is that the confidence provided by the government isn’t good enough.

The banking crash in 2008 and subsequent economic crisis have shown governments’ powerlessness and even complicity in failing to protect consumers, some argue, pointing to Cyprus’ 2013 levy of up to 10% on all savings accounts.

That event was attributed to a spike in popularity of bitcoin, as people looked to the digital currency as a way of controlling their money and keeping it beyond the reach of government.

In the same interview, Chris Buijink, Chairman of the Dutch Association of Banks (NVB), somewhat conceded the point, saying, “Well, we do everything we can to avoid this from happening again, and that’s the reason for what we’re now discussing in Europe around the bank union.”

Buijink admitted that banks need to start getting used to bitcoin:

“If a concept proves to be good, then we will hear more about it the coming years, and then structures, who are not used to it, will have to think about it and adjust themselves.”

Both Boudewijn’s and Buijink’s comments are not wholly unexpected. Across the world it is increasingly clear that governments and regulators are sceptical – perhaps doubtful for reasons of self-interested – about the idea that digital currencies could replace fiat currency entirely. At the same time they’re waking up to the opportunities offered by the bitcoin technology.

The problem, says Boudewijn, is that payments systems will never be able to move as quickly as a rapidly emerging new technology needs it to.

“In niches like bitcoin you can innovate rapidly, but if you’re in the mainstream market – in a two-sided market where customers are with different banks and you’re in a network industry – it is very difficult. It also ensures a certain slow pace in innovation because it has to work everywhere. That makes it difficult, but that’s inherent to the traditional payment market. And there we can learn from the [digital currencies] of this world.”

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Inside Bitcoins NYC Day 1: Bitcoin 2.0 Takes Center Stage
Tom Sharkey | Published on April 8, 2014 at 00:26 BST | Events, News

More than 2,000 digital currency enthusiasts gathered at the Javits Center in New York City on 7th April for the city’s second Inside Bitcoins conference and expo, produced by Mediabistro.

Attendees traveled to New York from more than 30 countries and 38 US states to hear speeches from industry leaders about the usual topics like the future potential and big-picture implications of bitcoin for consumers and the financial markets.

As the day progressed, though, panelists began to emphasize the opportunities of Bitcoin 2.0 and applications of the Bitcoin protocol beyond currency, and notably turned attention to the topic of governmental regulation of digital currencies.

The event kicked off with Alan Meckler, the CEO and Chairman of Mediabistro, who welcomed the crowd and noted the dramatic increase in attendance from last year’s Inside Bitcoins NYC event, which he said had just over 150 attendees.

A “buzzing” crowd

Even before Circle’s Founder and CEO Jeremy Allaire kicked off his opening keynote address – which centered on bringing bitcoin to mainstream audiences, Inside Bitcoins NYC conference programmer Stewart Quealy commented on the energy in the room, saying:

“It’s great to be in this room and feel the energy of the crowd. There’s a certain buzz in the air of everyone who is excited about the potential in this industry.”

This was evidenced by the number of startup companies who signed up as exhibitors and showcased their work in a variety of fields like mining, cloud storage and regulatory compliance consulting.

Conference attendees lined the exhibition hall during the lunch break to learn more about the diverse offerings of exhibitors, and even participated in a live bitcoin trading session hosted by the Bitcoin Center NYC.

Screen Shot 2014-04-07 at 7.29.29 PM

Diverse topics and opinions

Day one of the conference played host to a diversity of topics discussed by a wide range of industry professionals. Panels focused on issues like regulation, mainstream adoption, the startup ecosystem and security, among others.

Unsurprisingly, the variety of topics brought with them a variety of opinions and viewpoints.

More than once when questions were fielded from the audience, members of the panel made a point to speak up in opposition of their fellow panelists’ perspectives.

In a panel titled “Moving Bitcoin Forward: Bringing Trust, Legitimacy and Transparency to the Market,” moderator Michael Terpin, co-founder of BitAngels, asked for a show of hands as to which area holds the most importance for increasing the number of bitcoin users: ease of use, security, regulation, public perception or economics and liquidity?

While there were votes for each of the five areas of concern, there was a clear majority consensus that bitcoin’s ease of use is the most important factor in growing the industry; members of the panel agreed.

A maturing industry

One recurring theme across the board from Monday’s panels and keynote speeches was the notion that the digital currency industry is rapidly evolving, and that it has already come a long way since its humble beginnings in 2009.

During a panel titled “New Ideas in Bitcoin,” speakers highlighted the emerging ideas in digital currencies that expand beyond bitcoin’s use solely as a currency.

Ryan Charleston, founder and CEO of Bitcorati, used the Internet as a metaphor for bitcoin’s potential:


Regulation and education

The topic of regulation was a primary focus in many of Monday’s panel discussions. A number of different viewpoints on regulation were presented from panelists, but the popular stance seemed to be that some level of regulation will be necessary in order for bitcoin to achieve mainstream adoption.

Jacob Farber, senior counsel at Perkins Coie LLP, noted the contrasting attitudes that the bitcoin community holds about regulation, stating:

“I’m struck by the seemingly mass acceptance of regulation in this room. There are contrasting interests between the original crowd who are averse to regulation and the new innovators working on Bitcoin 2.0.”

Other panelists, like Izzy Klein of Podesta Group, believe that regulation is inevitable.

As such, Klein argued that there needs to be more consensus among regulators in their approach to dealing with digital currencies:


Educating regulators about bitcoin’s underlying technology and its value for the global economy is paramount for productive and meaningful regulation, Klein said.

Closing remarks

The first day of Inside Bitcoins NYC drew a large crowd with diverse interests and opinions, and the variety of panelists and discussions ensured that the conference offered something to appeal to everybody’s interests.

Topics like regulation and entrepreneurial opportunity held a particular focus throughout the day, and though not everybody shared the same opinions, it was clear that attendees felt that they were part of a rapidly evolving and disruptive industry.

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Gavin Andresen Steps Down as Bitcoin’s Lead Developer
Kadhim Shubber (@kadhimshubber) | Published on April 8, 2014 at 11:09 BST | Bitcoin Foundation, Bitcoin protocol, News

Bitcoin’s lead developer Gavin Andresen is stepping down, and handing the reins over to colleague Wladmir van der Laan, also a very experienced bitcoin core developer.

Andresen, who was responsible for maintaining the core code that underpins the bitcoin ecosystem, said he was taking a step back to focus on broader bitcoin issues as Chief Scientist of the Bitcoin Foundation, the body that standardizes, protects and promotes the use of bitcoin across the globe

In a blog post published yesterday, Andresen wrote:

Today, I find it harder and harder to keep up with all of the great Computer Science or Economics papers related to bitcoin and other crypto-currencies […] to be clear: I’m not going to disappear […] I’ll just spend a little less time writing Bitcoin Core release announcements, and a little more time catching up on the latest bitcoin-wizards thinking on how best to implement transaction history pruning.

Wladmir van der Laan, a Dutch computer scientist with a PhD in computer graphics from University of Groningen, will be taking over as Bitcoin Core Maintainer.

Past experience

Van der Laan, who has already been working full-time on maintaining the core code, is the most prolific bitcoin contributor with the highest number of commits on GitHub (although, of course, when it comes to development it’s not all about quantity).


Previous projects by van der Laan include Dropship, which in 2011 enabled the sharing of private files on DropBox and thus exposed the poor security practices of the service. DropBox moved to kill the project, asking van der Laan to remove it from Github and then filing DMCA notices against people who mirrored the files on their own Github accounts.

Van der Laan and Andresen were unavailable for comment.

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Bitcoin Core Version 0.9.1 Fixes Heartbleed Vulnerability
Nermin Hajdarbegovic | Published on April 9, 2014 at 11:50 BST | Bitcoin protocol, Technology

Bitcoin Core Version 0.9.1 is out and it has addressed the Heartbleed OpenSSL vulnerability, also known as CVE-2014-0160. The vulnerability has been patched by major bitcoin exchanges in a matter of hours.

In case you missed it, Heartbleed is a pretty big deal in the security community. The crypto bug in OpenSSL (an open-source implementation of the SSL and TLS internet security protocols that encrypt and secure internet traffic) has opened up two thirds of the web to eavesdropping. It was uncovered earlier this week and many observers described it as nothing short of catastrophic.

Bitcoin players quick to address Heartbleed

Luckily the news quickly translated into industry-wide action: patches are being implemented across the world as we speak.

Bitcoin exchanges and wallets are targeted by hackers on a daily basis, so serious bitcoin outfits keep track of zero day exploits, new attack vectors and a host of other vulnerabilities.

The Bitcoin Core team says version 0.9.1 is a maintenance release to fix an urgent vulnerability (ie Heartbleed), and all users should upgrade as soon as possible. Most have heeded the call and as a result the vast majority of major bitcoin sites and exchanges have implemented the fix.

What is Heartbleed all about?

OpenSSL is the most popular code library for HTTPS encryption. It is not used by Microsoft IIS, so Windows-based systems cannot be directly affected.

While this is good news for most desktop users out there, IT departments would rather have it the other way around. OpenSSL is used on Linux, BSD and numerous custom server platforms. Mac OS X is affected, too. The bug does not affect all versions of OpenSSL, either. Some major banks like Chase and Schwab rely on Microsoft IIS. Others rely on Linux/Apache, Java and other systems.

Ars Technica reports the bug is the result of a “mundane coding error” in OpenSSL. The bug essentially allows attackers to gain access to chunks of private computer memory that handles the OpenSSL process.

The contents of said memory chunks may include authentication credentials or even private keys that can undermine the website’s entire cryptographic certificate.

Hence, website operators need to patch their servers with OpenSSL version 1.0.1g and update their security certificates. The problem is that the OpenSSL patch is just the first step. Users need to think about replacing their X.509 certificates once they apply the OpenSSL update.

All admins and users are advised to change their passwords as a precaution as activity is traceless, and this scale of vulnerability is unprecedented in OpenSSL.

[MICRO]

Bitcoin Price Drops 10% as Chinese Exchanges Stop Bank Deposits
Jon Southurst (@southtopia) | Published on April 10, 2014 at 09:26 BST | Asia, News, Regulation

Bitcoin prices crashed today as Chinese businesses began receiving official deposit shutdown notices from banks, confirming recent suspicions of an impending crackdown. Exchanges will stop account recharging via bank accounts between now and 15th April.

Even though the news has been anticipated for over a week now, bitcoin prices sank under $403 from a high of $450.74 on the CoinDesk Bitcoin Price Index after companies began making public announcements on their sites.

coindesk-bpi-chart

Exchange BTCTrade.com made an announcement just before lunchtime in China, followed shortly after by BTC100.org and Huobi. Interestingly, it appears Chinese banks started with smaller exchanges before working up to those with larger trading volumes.

The announcements have all come via the banks themselves, as the PBOC has still not provided exchanges with any official announcement ‘on paper’.

BTCTrade’s statement read:

“With a heavy heart we make this announcement, that BTCTrade just received a telephone call from our bank the Kejicheng (Tech City) branch of China Agricultural Bank Hangzhou, that if we do not stop using our bank account to conduct bitcoin related businesses by 4/15 our account will be frozen. Therefore, we are forced to stop all RMB deposits by 4/15 midnight, although withdrawals will not be affected at [present].”

BTC China CEO Bobby Lee said his company would not be changing any of its banking arrangements until it receives some form of official notice, which hasn’t arrived yet.

“So far, we still have NOT received any official notices from Banks or the PBOC,” he said.

“I have indeed heard that some other exchanges apparently have received notice, but we have not.”

BTC38.com, which specializes in altcoin trading, suspended account funding via bank deposits on 4th April.

At that time, prices of digital currencies other than bitcoin dropped by 20% or more. Hardest hit were megacoin (MEC) and TAGcoin (TAG), which each lost around 50% of their value, while quark fell by 40% and dogecoin around 25%.

Even litecoin, which is traded on most major platforms and is not considered an altcoin per se in China, fell by over 20% in value last week. It is currently trading on BTC-e for just $10.22.

Focus elsewhere

OKCoin and FXBTC also stopped some account funding options after receiving notices from their banks and payment processor partners, but promised to continue trading otherwise after April 15th.

OKCoin CEO Star Xu said, however, that the company was focused more on future expansion plans, and would maintain regular daily operations otherwise.

Said Xu:

“OKCoin’s margin management, risk management, and cash withdraw and coin withdraw functions are working properly at this moment, OKCoin’s English version site will be up quickly, OKCoin will establish overseas offices and move servers there if needed.”

Community unperturbed

In fact, much of China’s bitcoin community shares that spirit and does not seem perturbed by regulatory moves.

“OK is always here, rumor-spreaders can leave now, we already have plans for April 15th,” said OKCoin’s Vice President He Yi.

The industry so far has shown nonchalance in the face of previous government bans, whether implied or actual, since last December, and have developed new ways for customers to move money in and out of exchanges without direct access to bank accounts. These have included a variety of third-party payment processors, pre-paid cards, and a voucher system.

Even BTCTrade’s announcement today ended on a positive note, informing of the company’s intentions to expand overseas in the near future.

“BTCTrade has always set our sites on the global market since coming online, and we have already registered companies in mainland China, Hong Kong, Japan and the US. We are planning to commence USD services soon, and the Japanese version of our website is already online and operational, and a new version will be online before 4/15.”

“Very soon we will publicly reveal our cold wallet address, and utilize 100% proof of reserves, in order to ascertain that the platform does not engage in any transactions, and that user assets are safe, open to public scrutiny.”

CoinDesk will continue to monitor and update this developing story.

[MICRO]

Canadian Senate Meets Bitcoin Community in Fact-Finding Session
Victoria van Eyk (@VictoriavanEyk) | Published on April 10, 2014 at 11:05 BST | Bitcoin ATM, Events, Law, News, Regulation, US & Canada

What is Canada’s place in regulating bitcoin? This is the theme running through the Canadian Senate’s Standing Committee on Banking, Trade and Commerce’s study on the use of digital currency.

The Bitcoin Strategy Group, BitAccess and CAVirtEx sat before the senators on 9th April to demonstrate how bitcoin is purchased and stored. Their representation marks the first presence of bitcoiners in the Senate sphere.

The Canadian Senate has already heard from the Bank of Canada, the Department of Finance, economic historians and other academics. On Thursday, April 10th, the committee will hear directly from the Royal Bank of Canada, the Canadian Bankers’ Association and the Canadian Payments Association.

The mission of this study is to understand virtual currencies. In bitcoin’s case, the question is “How do we treat this? Do we regulate this?”

The panel covered a range of topics, including wallets and bitcoin storage, the three ways of acquiring bitcoin (peer to peer, exchanges and bitcoin ATMs), and allowed for targeted testimony from Canada’s largest virtual exchange – CAVirtEX – and Ottawa-based bitcoin ATM manufacturer BitAccess, who both offered their unique perspective as business owners working daily with bitcoin on the need of government regulation.

Unfortunately, the committee hearing was cut short by a Senate vote. As a result, the first half of the presentation was testimony, followed by a live ATM demonstration.

Christopher Reed, Policy Assistant to Senator Irving Gerstein, the Chair of the Committee, was the first individual to purchase bitcoin from an ATM within session in parliamentary history when he inserted C$100 into the BitAccess machine.

Demonstration session

The Senate is at the beginning of its 18-month long study with the objective of researching and learning about bitcoin. Seeing person-to-person transactions, as demonstrated by Kyle Kemper, a partner at the Bitcoin Strategy Group and Victoria van Eyk, a bitcoin consultant, and an in-person demonstration using the ATM was integral to this understanding as it made bitcoin more ‘tangible’ and accessible.

Victoria van Eyk demonstrates use of a bitcoin ATM to the Senate
Victoria van Eyk demonstrates use of a bitcoin ATM to the Senate
CAVirtEx’s newly hired Advisor, former Ottawa mayor Larry O’Brien, represented the exchange’s view that Canada needs to act on regulation, and fast. Regulating the ‘on and off-ramps’ of bitcoin is required to transform exchanges into serious businesses, with proper checks-and-balances in place to give consumers confidence in transacting with the digital currency.

Due to the last-minute vote, significant content was omitted, however.

““Canada has become one of the leading countries in the world in terms of bitcoin entrepreneurship and innovation.””

The Bitcoin Strategy Group hopes to return in the future to focus on the day-to-day benefits of digital currencies that we can all relate to, including the opportunity for cost savings in the remittance world – where Western Union pocketed $1.1 billion in 2013 for transferring funds, mostly to developing nations – the future of micropayments and ‘social tipping’ for the arts and online content, and the huge benefit for retailers when using bitcoin to transact with.

In a further demonstration, the Group purchased cupcakes from local Ottawa bakery The Flour Shoppe to show the Senate first-hand that local retailers are getting on board with the digital currency, and that it is easily tradeable.

The latter part of the hearing was a robust question and answer period. Many Senators questioned the specific need for regulation.

Senator Paul J. Massicotte questioned the need for bitcoin regulation, asking if it undermined the essence of bitcoin in the first place. Joseph David, CEO of CAVirtEx responded quite quickly, stating that, if Canada hopes to remain in the bitcoin exchange business, banks need to cooperate, and that requires government regulation.

He added:

“Our only other option is going offshore.”

Education and understanding

CAVirtEx’s stance on regulation drew questions from the Senators, who wondered if the very act of regulating undermined bitcoin’s libertarian roots. One senator also brought up the possibility that regulating the currency would add so many costs that the benefits would disappear.

Kyle Kemper called for Canada to “become a global leader on the bitcoin opportunity” and pressed for increased education and understanding before implementing any regulation.

Kemper explained:

“Canada has become one of the leading countries in the world in terms of Bitcoin entrepreneurship and innovation. Before we can come to any conclusions, we must understand what Bitcoin is, how it works, and what the future with Bitcoin may look like.”

Overall, the present Senators had a better-than-average understanding of the currency and the protocol, and were actively engaged throughout the entire presentation. Their questions also touched on HST and taxation concerns, volatility risk with merchant purchases, and bitcoin’s impact on the current Canadian dollar money supply.

Regulation questions

The question from the Senate remains: “What is necessary from us?”

Influential bitcoiners like Andreas Antonopoulos, Chief Security Officer at BlockChain.info, regularly oppose regulation, citing the ability of the community to self-regulate as sufficient for the industry.

Additionally, it was mentioned that there are already regulations in place that keep bitcoin ‘in check’, including FINTRAC – an independence agency that reports to the Ministry of Finance. Many large bitcoin businesses, including panelists CAVirtEx and BitAccess, follow FINTRAC regulations.

However, some senators disagreed with the idea of self-regulation, citing government regulation as “necessary” for bitcoin to succeed. Joseph David requested that bitcoin be considered a foreign currency and regulated in the same way. This comment drew interest from the assembled senators, as it was the first time the idea had been raised.

Regulation is currently a hot topic for bitcoin, as it becomes more mainstream.  The recurring theme at the recent Inside Bitcoins New York conference was regulation. Indeed, the US government is also educating themselves on bitcoin: is it a coincidence that a Robocoin ATM was installed and demoed on Capitol Hill on 8th April, while Canada’s Senate were introduced to the local bitcoin ATM on the 9th?

Funnily enough, there was a complete lack of press at the Senate committee hearing tonight, as compared to the overwhelmingly attentive journalists capturing every moment of Congressman Jarod Polis’ purchase of bitcoin on Capitol Hill.

Either way, government is interested. Canada is currently in a unique position to be a leader in the bitcoin space. The country has made it this far without any regulations, however it’s time to be proactive on establishing a policy framework for regulators who are looking for guidance with this sphere.

What happens next is anyone’s guess.

View the full video of the Senate of Canada’s Standing Committee on Banking,

[MICRO]

KnCMiner Offers New Incentives for Neptune Mining Rig Delays
Stan Higgins | Published on April 10, 2014 at 00:02 BST | KnCMiner, Mining, News, Technology

Sweden-based digital currency mining hardware developer KnCMiner has announced that customers waiting for their Neptune mining product to ship can opt to receive a modified Jupiter rig instead.

The Neptune sports 3 TH/s of hashing speed and carries a price tag of $9,995. The 20-nm miner is based on the Jupiter design, but consumes 30% less electricity at an estimated rate of 0.7 watts per GH/s.

The announcement, published on the company’s website, offers KnCMiner customers an alternative to waiting for the production of the Neptune line of mining hardware.

Technology swap available

The modified Jupiters, according to KnCMiner, are capable of achieving the same 3 TH/s estimated for the Neptune line. KnCMiner is offering this alternative free of charge and with immediate shipping.

The company outlined the alternative in a statement:

“If more than 400 people want to have the conversion, we will ship in order of payment for the original Neptune order. This offer will be open for seven days for people to contact us.”

After the seven-day period, KnCMiner will close submissions and reach out to those who requested the modified Jupiter unit.

Assuaging customer concerns

KnCMiner has a history of offering alternatives to its customers in the event of a delay of the Neptune line.

Earlier this year, the company released a “Plan B” which enabled customers to receive refunds in US dollars or 3 TH/s worth of mining power hosted at a Sweden-based data center. Last September, KnCMiner announced that Jupiter buyers who faced delays would receive upgraded units that provide additional processing power.

The announcement is notable in light of the frequent delays experienced by consumers who order personal mining equipment. For more on the extent of this industry problem, read our most recent report here.

[MICRO]

Lawyers Want Bitcoin Money Laundering Charges Dropped on Technicality
Nermin Hajdarbegovic | Published on April 10, 2014 at 14:12 BST | Crime, News, Regulation, US & Canada

Lawyers representing two Florida men charged with bitcoin-related money laundering want to have the charges dropped on a curious technicality.

Adber Espinoza and Pascal Reid were arrested in February following an undercover sting operation. Police made the arrests after undercover officers took to LocalBitcoins.com posing as credit card fraudsters.

Officers were looking for someone to launder their cash and buy bitcoins needed to fund illegal activities, namely to buy stolen credit card data. Having allegedly agreed, Reid and Espinoza both stand accused of laundering money and running an unregistered money service.

Can’t launder without money

The Internal Revenue Service recently classified bitcoin as property rather than currency. Even before the IRS statement bitcoin was not considered money, at least not in the eyes of the law.

Lawyers representing Reid and Espinoza figured out a way of using this technicality to their advantage. The suspects pleaded not guilty and their defence is now looking to have the charges dropped, since bitcoins are not defined as money, hence money laundering legislation should not apply to them.

However, Miami-Dade County prosecutors disagree. The prosecution insists money laundering charges can stick and it believes they fit the alleged crime, Fox News reports.

Legal precedent?

According to IRS bitcoin guidance, issued on 25th March, digital currencies will be treated as property rather than currency. However, the IRS guidance only applies to federal taxes – bitcoin and other digital currencies are treated as property for US federal tax purposes, but general rules for property transactions still apply.

Miami-Dade State Attorney Katherine Fernandez Rundle says this is the first time any state decided to bring money laundering charges in a case involving bitcoin.

Earlier this month a similar case was made by Joshua Dratel, Ross Ulbricht’s defence lawyer. Ulbricht is of course facing serious charges stemming from his association with online drugs bazaar Silk Road.

Dratel argues that at least one count of money laundering against Ulbricht should be dismissed, citing FinCEN and IRS guidance as proof of his argument. However, the case against Ulbricht to that involving Reid and Espinoza – as they allegedly accepted cash for their services, while Ulbricht stands accused of dealing solely in bitcoin.

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Legg Mason’s Bill Miller: Buffett is Wrong on Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on April 10, 2014 at 15:32 BST | News, Prices, Technology

In an interview on CNBC’s popular morning program ‘Squawk Box’, Legg Mason’s Bill Miller dismissed Warren Buffett’s statements on bitcoin as flawed.

The former Legg Mason CFA, chairman and CIO, and current portfolio manager for the Legg Mason Capital Management Trust reiterated his support for bitcoin, directly addressing the legendary investor’s opinions on the subject in the process.

Buffett has been outspoken in his views about bitcoin as an investment, calling its value a ‘mirage’ and urging investors to ‘stay away‘ from the digital currency, though his statements have suggested he sees value in bitcoin’s underlying technology.

In contrast, Miller has been open about owning bitcoin and what he sees as its potential to maintain and grow its value long-term.


Overall, Miller was respectful when disagreeing with Buffett, though he suggested that the investor’s thinking on the matter was misguided, stating:

“I have enormous regard for Warren, but I think there’s a logical flaw in his thinking here. It may very well be the case that bitcoin is worth nothing, but I think it’s a really interesting intellectual and technological experiment.”

Miller’s support is also notable considering that he has actually lost money investing in bitcoin, as he reported that his BTC holdings have declined 20% to date.


 

Bitcoin is not a check

In his 14th March interview on CNBC, Buffett compared bitcoin to checks or money orders, arguing that since its primary value was as a payment system, the idea that it could be a worthwhile investment was incorrect.

However, notably, Miller took direct aim at these statements on CNBC:

“[Checks] have no value because they are infinitely creatable. There are 12m bitcoins out there and there will [only ever] be 21m. If there were 21m checks in the world and that was all there were, and all transactions went through checks, checks would be very, very valuable.”

Still, Miller agreed with Buffett on his point that the main benefit of bitcoin was its use as a payment system.

“I think he had it exactly right in that its main value, potentially, is as a payment system. [It's] potentially disruptive as you can send it anonymously, you can send it without paying the interchange fees and that kind of thing.”

Bitcoin will be the lasting digital currency

Miller also weighed in on the subject of whether bitcoin could face competition from any of its available alternatives, citing the popular theory of path dependance, which attempts to explain why the first-to-market solution is often the one that becomes most widely used.

Miller listed historical examples of this phenomenon, noting that the most efficient or best ideas don’t always win out. Specifically, he cited the fact that “beta was better than VHS”, and that “the QWERTY keyboard was not the most efficient way to type”.

Explained Miller:

“Once you reach a certain state, it becomes very difficult to dislodge that. I think bitcoin has probably won that, less so cryptocurrencies.”

Miller also weighed in on why bitcoin is a preferable investment to gold.


About Miller

Miller has achieved notable successes during his lengthy career at Legg Mason, most recently when overseeing the Legg Mason Opportunity Trust, a fund that focuses on assets with large gaps between price and intrinsic value.

In 2013, the fund was number one in The Wall Street Journal‘s ranking of diversified US-stock mutual funds with more than $50m in assets for three straight quarters, according to MarketWatch.

Historically, Miller’s track record has also been impressive. From 1991 to 2005, the Legg Mason Capital Management Value Trust, which Miller co-managed, achieved the unlikely feat of beating the S&P 500 Index for 15 straight years.

[HCLivess]

Jsut use Feedly
problem solved

[MICRO]

Jsut use Feedly
problem solved

Yeah i use it to. But like u see by the poll people love to have news this way.

[MICRO]

Study: Nearly 6 Million Bitcoin Wallets Attacked in 2013
Stan Higgins | Published on April 10, 2014 at 19:50 BST | Crime, Mining, News, Technology

Nearly 6 million malware attacks were launched against bitcoin wallet users in 2013, according to a new report released by cybersecurity firm Kapersky Labs.

Entitled “Financial Cyberthreats in 2013″, Kapersky’s report looked more broadly at a range of cyberattacks – from phishing to mobile malware, but put a special emphasis on examining how digital currency wallet users are being targeted by criminals online.

Perhaps most notably, Kapersky found that 1 million wallet owners fell victim to a malware attack in 2013, up from less than 600,000 in 2012. Attacks on digital currency wallets constituted roughly 20% of all attacks that involved financial malware last year.

Read the report:

“Among all finance-related malware, tools associated with bitcoin demonstrated the most dynamic development.”

The full, 35-page report provided additional information on malware that targets wallet data, as well as programs that secretly upload mining software to the victim’s computer.

The report draws on information collected from Kapersky’s global security infrastructure.

Attack figures rise with bitcoin’s price

The number of wallet attacks in 2013 rose significantly compared to 2012 levels, when according to Kapersky, less than 2 million such attacks were detected. This figure includes all observed attacks, including those that were not successful.

Kapersky reported a more modest increase in the amount of malware attacks that uploaded mining software to affected computers, rising from roughly 500,000 in 2012 to more than 2 million in 2013.

Almost 800,000 users suffered a mining software-related attack in 2013, compared to less than 200,000 the year before. Overall, mining attacks accounted for 8.9% of all attacks.

The report noted that beginning in October 2013, the number of detected mining malware attacks fell while the number of wallet-targeting programs started to climb. It said:

“This could be the result of the above-mentioned idiosyncrasy of the Bitcoin system, where the more ‘coins’ that are generated, the more difficult it is to generate new ones. This could also drive malicious users to focus on searching for and stealing bitcoin wallets holding already-generated cryptocurrency.”

Attacks on wallets began to rise sharply in September 2012, according to the data. During 2013, the number of attacks peaked in August 2013, with additional periods of heightened activity during April and November-December of that year.

This finding suggests that the number of attacks increased with the price of bitcoin, as prices hit new highs during both these periods.

Malware’s growing threat

Malware that targets both wallets and home computers used by miners poses an increasingly serious threat to the digital currency ecosystem.

Earlier this year, Dell SecureWorks identified 146 types of bitcoin malware currenty circulating on the internet. Due to the risk, some have turned to paper wallets as a way to securely store their bitcoins.

Two apps previously available on Google Play were identified by a cybersecurity team which turned affected Android devices into litecoin and dogecoin miners. Further, in late March, Symantec noted an increase in the number of mining malware attacks which targeted Linux-based computers.

[MICRO]

Bitcoin Core Developers Weigh in on Side Chain Proposal
Danny Bradbury (@dannybradbury) | Published on April 10, 2014 at 20:31 BST | Bitcoin protocol, News, Startups, Technology

These days, everyone wants to add new features to the bitcoin block chain, but now one team thinks that it’s found a way to do it responsibly – by creating “side chains” that can interact with bitcoin.

The process, known as ‘two-way pegging’, has some hefty backing. It is supported by Adam Back, the developer of the HashCash, the algorithm bitcoin uses to generate and verify currency.

On the business side, it has Austin Hill, a Canadian entrepreneur and angel investor who in 1997 founded Zero-Knowledge Systems, an anonymous networking and privacy technology company. Hill, who raised more than $80m for the endeavor, likes to say it was Tor, before Tor was invented.

Block chain 2.0

Clearly, the money and the technical know-how are there. So, how will it work?

“Once adopted, people could try out speculative and innovative changes, while enjoying the network effect of bitcoin's substantial adoption.”

There have been two different approaches to expanding bitcoin’s functionality in the past. One has been to introduce new features that piggyback on it, using the bitcoin block chain’s existing resources. Counterparty is one example of this, and Mastercoin is another.

The other is to just create whole new frameworks for next-generation cryptocurrencies outside of bitcoin. Examples of these are NXT and the still-unlaunched Ethereum proposal.

The problem with completely separate altcoins and frameworks, says Hill, is that they they are not interoperable. They create new “races for scarcity”, with each one representing a new asset in short supply.

But, there are several problems with bitcoin, too, says Hill, which is why exchanges like Coinbase generally run their own transactions outside the block chain.

Hill told CoinDesk: “There is a practical reason why some of those things can’t operate on the block chain, and that’s because at peak, they’re doing more transactions than bitcoin can support right now.”

Instead, Back and Hill want to ‘shard’ the block chain, creating another block chain, which has a two-way relationship with bitcoin’s own.

This will have two major benefits, Hill suggests: functionality, and scalability.

“We could have US and Canadian dollars, smart derivatives, option shares, and future contracts. A whole series of programmable trust instruments. A lot of people had talked about these things, and how the block chain could be adapted for this, but I hadn’t seen anyone lay out how it would come to pass.”

And secondly: “By sharding, you can have orders of magnitude faster transaction processing and you can start to scale bitcoin.”

Two-way pegging

In October, Back had proposed a concept called one-way pegging, in which bitcoins could be ‘moved’ from the bitcoin block chain to another block chain called a side chain, that was merge-mined with bitcoin. Bitcoins would be marked in the bitcoin block chain as having been transferred. Another coin in the new block chain would be marked as a representation of the transferred bitcoin.

Then last year, bitcoin core developer Greg Maxwell figured out a method for two-way pegging, in which bitcoins could be moved back and forth between the side chain and the block chain.

This would allow them to be transferred at will, so that the bitcoin network wouldn’t lose its bitcoins forever when they were transferred, but could get them back if the owner decided to transfer them back into the bitcoin block chain.

Bitcoin would be ‘firewalled’ from the side chain, meaning that any security issues that arose in a side chain wouldn’t affect people who were only involved in the bitcoin block chain.

This opens up some interesting possibilities, says Back:

“You can have multiple competing side chains that compete at the bitcoin level. Perhaps one that’s optimised for micropayments. You could move bitcoins into the micropayments sidechain, and then back again and then into the smart contract sidechain.”

The advantage here is that, unlike altcoins, they would all be interoperable, with the bitcoin block chain (or, as he calls it, the “main chain”, used as a common point of transfer.

Throughput

So, that takes care of functionality. But what about throughput? The current transaction rate on the bitcoin network is relatively low, at something under seven-to-nine transactions per second, which is why all of those off-chain transactions happen, in exchanges and elsewhere.

The downside of that is that they become difficult (but not impossible) to audit in any publicly visible way.

Says Hill: “You are still having to extend and move your coins off the block chain into a trust me security model. That has led to huge amounts of theft.”

So, that’s the proposal. What do core developers think?

“In particular the notion that a different chain might be designed to natively support things like smart contracts is funny, given that Bitcoin already supports them,” argues Mike Hearn, the brains behind BitcoinJ, and a core developer since bitcoin began (he spoke about them as early as 2012, arguing that all the pieces of the puzzle were in place).

The recent introduction of 40 extra bytes into bitcoin transactions for arbitrary messages (such as those associated with smart property or smart contracts) supports that view, although third parties have asked for more space.

Hearn also doesn’t think that alternative side chains can solve the scalability problem, which in any case is solvable purely within the bitcoin network, he argues.

“It’s not as if there’s some impossible limit beyond which Bitcoin can’t go,” he protests, pointing to the Bitcoin Wiki’s scalability page, which breaks down how much further we can push the network.

“With some fairly straightforward software improvements, bitcoin should be able to handle tens of thousands of transactions per second or more. To quote Satoshi, ‘it never really hits a scale ceiling’,” he says.

Gregory Maxwell, who first proposed two-way pegging, says that it could provide some relief for bitcoin, though:

“I don’t think this will remove the need to increase bitcoin’s throughput entirely, but if the technology matures fast enough it may allow for a more conservative approach that increases size only when its very clearly safe to do so.”

Bitcoin core developer Jeff Garzik argues that off-chain transactions are an enabler, not a problem.

“In the real world, millions of USD transactions happen every day that are not directly or immediately reported to a bank or governmental authority.”

Garzik describes himself as a fan of off-chain transactions and points to his own side project, payment channels, as an example of setting up high-volume transactions with other systems outside the bitcoin network.

Approval

So, some experts believe that two-way pegging could provide some useful respite for bitcoin from a scalability perspective, if side chains were able to connect with audit-able, fraud-proof private chains designed for high throughput. Those side chains could also be many and varied, each designed with their own specific properties for tasks like microtransactions and derivatives, say.

But, for two-way pegging to work, changes have to be made to the Bitcoin protocol. Will Back and Hill’s venture be accepted by the bitcoin open source community?

Said Garzik:

“One thing open source developers try to avoid is pre-approval based on some future supposition.  We have no idea what the future will bring, any more than anyone else.

Once a concrete proposal appears in a pull request, then we can give a reasonable comment based on engineering evaluation.”

If the changes necessary to allow bitcoin to talk to other side chains are made, then it could relieve the bitcoin developer community of requests to tweak the blockchain to suit third-party purposes.

Maxwell calls it the one change to rule them all.

“Once adopted, people could try out speculative and innovative changes, while enjoying the network effect of bitcoin’s substantial adoption, without having to go ask anyone— not developers, not the community— for permission.”

Hill and Back, who claim to have some core developers supporting their venture, plan to announce the full details – and its official name – by mid-May.

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[MICRO]

Investor Group Offers to Buy Mt. Gox for One Bitcoin
Stan Higgins | Published on April 10, 2014 at 22:55 BST | Exchanges, Mt. Gox, News

A group of investors has offered to buy bankrupt Japan-based bitcoin exchange Mt. Gox, as part of a bid that will require the approval of its Japanese bankruptcy court.

The investors are offering to pay 1 BTC for the troubled exchange, an amount which, at press time was worth $383, according to the CoinDesk Bitcoin Price Index (USD BPI).

The Wall Street Journal reported that the investor group would assume all of Mt. Gox’s liabilities and obligations.

In documents submitted to the Japanese bankruptcy court, the group reportedly outlined plans to resuscitate Mt. Gox, which included proposals for customers who hold outstanding claims against the exchange.

Jumpstarting Mt. Gox

The single-bitcoin valuation is based on the premise that the true value of Mt. Gox is difficult to determine.

Wrote the Journal:

“According to people familiar with the plan, the group is justifying the low price because of the ‘information vacuum’ over Mt. Gox’s 550,000 missing bitcoins, currently worth about $220 million. It isn’t possible to place a value on the lost coins, they said.”

Creditors will have two options. They can either receive a prorated amount from the 200,000 bitcoins recovered by Mt. Gox equal to roughly 20 percent of their claim, or obtain an equity stake of that amount in the revitalized Mt. Gox exchange.

The investor group pledged to set aside 50% of transaction fees to pay back creditors over time.

Diverse group seeks ownership

The investor group behind the bid includes venture capitalist Brock Pierce, founder of a number of bitcoin-related businesses including KnCMiner and GoCoin, and the creator of a prominent bitcoin syndicate.

Other members of the group include John Betts, a former Morgan Stanley and Goldamn Sachs executive who would serve as the new Mt. Gox CEO, and William Quigley, managing director for Clearstone Venture Partners, a VC fund based in Santa Monica, California.

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