Bitcoin Price Declines But Rallies Above $300

Bitcoin Price Declines But Rallies Above $300......Hemant Jass

Bitcoin Payroll Startup Bitwage Raises $760k

Bitcoin payroll startup Bitwage has wrapped up a period of fundraising, bringing in a total of $760,000 raised between a group of investors including Orange Telecom, Draper Associates and participants on the BnkToTheFuture.com investment platform.

On Monday, Bitwage closed a $200,000 funding round on BnkToTheFuture.com, shares from which were initially purchased by Max Keiser's Bitcoin Capital fund.

The bitcoin payroll startup has spent the past few months raising funds, a process that included participation from Cloud Money Ventures, the venture arm of Uphold, and Saeed Amidi, an investor in Bitwage who was also an early supporter of now-billion dollar companies like PayPal and Dropbox. During that time Bitwage joined the Silicon Valley-based startup accelerator run by Orange, the major French telecommunications group.

In an interview with CoinDesk, Bitwage founder Jonathan Chester said that the company plans to use the funds to build out its infrastructure, with a particular focus on expanding to the European market. Further, he said the Bitwage team plans to expend resources on enhancing its user experience to make it simpler for client integrations to take place.

"What we're doing with these funds is streamlining that process," he said.

Those who took part in Bitwage’s recent funding efforts pointed to its real-world use and potential to kickstart bitcoin usage as reasons for getting involved.

"I think in this case we are betting on the jockeys and not the horse," Keiser told CoinDesk.

BnkToTheFuture.com CEO Simon Dixon said that the Bitwage funding effort drew significant interest from contributors on the platform.

"Bitwage is bringing the power of Bitcoin to international payroll and it was one of the most popular pitches on BnkToTheFuture.com," he said.

Julian Lee, a partner for Cloud Money Ventures, commented that the firm got involved following its previous work with Bitwage, adding:

"Working with Uphold, BitWage is able to solve a number of pressing problems faced by multinationals centered around international payroll and money flow, benefitting from increased speed, greater transparency and significantly lower costs."

Orange Telecom, Draper Associates and Saeed Amidi did not immediately respond to requests for comment.

Payroll image via Shutterstock

Bitcoin Vs Anonymous Digital Currencies- A Brief Historical Comparison

Bitcoin is a digital currency that is quite well-known already, mainly due to various reasons. Upon introduction, bitcoin gained prominence due to its unique features. Bitcoin was believed to be anonymous, mainly due to its decentralized protocol and high standards of encryption. Except for a sequence of characters, the bitcoin network doesn’t have any other unique features that render the user readily identifiable. These special properties made bitcoin popular amongst the deep web users.

The extensive use of bitcoin across the deep web users, followed by the emergence and fall of Silk Road, helped bitcoin gain more prominence. While most of us understand bitcoin and how it “ticks”, there have been other digital currencies with their own set of features. Some of them were introduced way before bitcoin and there are few that emerged following bitcoin’s birth. However, not many could withstand the test of time and there are few that still exist in a form different from the original.

Comparison between bitcoin and other digital currencies.

The list of digital currencies that have come and gone is extensive. The ones listed above have had significant number of users and had to extensively be reported upon. They are different from each other in their own ways and they have had their share of controversies.

Similarities

All these have one thing in common. Unlike fiat currencies, they are all digital currencies and they are community driven. Each of them, except for Linden Dollar has/had certain degrees of anonymity associated with it. However, some of them didn’t last long, in spite of widespread adoption due to technical, legal and regulatory complications.

Anonymity

Bitcoin is considered to be completely anonymous. But in reality, it is pseudonymous, meaning it offers partial anonymity. with enough determination and resources, transactions on Bitcoin network can be tracked. The same holds good for other currencies as well.

Some of the other digital currencies that promised anonymity includes Liberty Reserve which allowed users to sign up with just name, email id and birth date. The absence of cross verification procedure offered a certain degree of anonymity to its users. Liberty Reserve was forced to shut down for facilitating money laundering and operating without proper licensing.

MoneyPak reloadable debit cards turned out to be a failed adoption of conventional payment solution. While MoneyPak was intended to make electronic payments easier, the company did not think about its potential misuse. People could easily buy a preloaded MoneyPak debit card from shops by paying cash without furnishing any identification. These cards could then be used anywhere and it was virtually impossible to track the transactions. The loophole was exploited by many people, leading to rise in reports of MoneyPak frauds and scams. Green dot Corporation was forced to withdraw MoneyPak cards from shops earlier this year.

E-gold was a digital gold currency platform that allowed its users to convert their funds to gold and use it to transfer the value instead of paying with fiat currency. User funds on e-gold platform were backed by equivalent value in gold deposit. Users could assume any name to operate an E-gold account, offering a certain degree of anonymity to the users. However, the transaction records could still be used to track back the users. Like bitcoin, E-gold was pseudonymous at the best. E-gold was widely adopted across the United States before the government cracked down on the company, forcing it to shut down amid rising instances of frauds and scams.

Perfect Money is another P2P and P2B money transfer platform which initially filled the vacuum left behind by E-gold. The platform initially allowed users to anonymously register and transfer money. Initially, the people behind Perfect Money were unknown and the anonymity it offered was widely appreciated by many. However, it was later established that one Andrew Draper was behind Perfect Money. The company which was said to be registered in Panama now has Kowloon, Hong Kong as its address. It has also gone ahead and cleaned up its act by blocking access through Tor proxy.

Monero uses modified CryptoNote protocol based on ring signatures and stealth addresses for enhanced privacy. Monero’s opaque blockchain offers better privacy and more control over access to transactional data in comparison to bitcoin’s transparent blockchain. Monero claims to be a truly anonymous cryptocurrency. However, it has its own drawbacks when it comes to multi-signature protection and mining capabilities. Monero doesn’t have significant traction yet, and whether it can survive the regulatory regimen is still unknown.

There are other digital currencies like Dash,CloakCoin and AnonCoin which promises complete anonymity. However, their market capitalization and user adoption is far from desirable to attract attention at the moment.

References:Bitcoin vs Digital Money [http://cgap.org]Evaluating User Privacy in Bitcoin [Elli Androulaki, Elli, et al.]Digital Laundry: An analysis of online currencies, and their use in cybercrime [Raj Samani, EMEA, McAfee, Francois Paget and Matthew Hart, McAfee Labs]

The post Bitcoin Vs Anonymous Digital Currencies- A Brief Historical Comparisonappeared first on NEWSBTC.

Send Bitcoin Payments To Any Email In The World Via The Brand New LakePay!

LakeBTC.com is one of the “big 4” bitcoin exchanges. Jeremy Cho, LakeBTC’s communication division representative, has just shared with NewsBTC that his company has just launched a new service named “LakePay” that enables its users to send bitcoin to any email address in the whole world. Lakepay is also expected to include other cryptocurrencies in the near future.

LakeBTC was started in March 2013 by a group of financial industry veterans. Initially, it was like a side project for a small group of professional capital market traders from investment banks and hedge funds. Later, that year the team decided to incorporate and officially run the exchange under the current domain name. Unlike many other companies in this sector, LakeBTC was born with strong risk management genes and customers’ assets have been always in good hands with us. Today, LakeBTC is dedicated to bring the latest technologies into the financial services industry and serve users from all over the world. LakeBTC support trading services between cryptocurrencies and FIAT currencies, and their wallet service is secure, reliable, and free.

Lakepay is expected to increase the popularity of bitcoin payments, especially among markets that always look for payment systems that support micro-payments including freelancers’ markets, crowdsourcing platforms and tipping applications across various social networks. In my opinion, such bitcoin email payment services can enkindle another wave of increasing popularity of cryptocurrencies, the same way tipping services, such as changetip and dogetipbot, popularized cryptocurrencies across facebook, twitter and reddit.

How Prediction Markets Could Guide Bitcoin Future

While opinions on Bitcoin's future differ, most agree that the current scalability debate has become a mess. Trolling, misinformation, populism, vote manipulation, vocal minorities, censorship and other distractions have made it hard to find a signal above the noise.

And importantly, if protocol development is going to be driven by what seems like popular opinion on message boards, this could potentially ruin the whole Bitcoin project.

The essence of this problem, Yale researcher and Truthcoin Chief Scientist Paul Sztorc argues, is that “talk” does not scale.

“The real function of a debate is for people to examine each others' reasoning, and find some area of agreement, or maybe highlight areas where they don't agree,” Sztorc toldBitcoin Magazine.

“But debates do not scale,” he said. “It's literally O(n^2) scaling: With five people, you need at least 10 conversations in order to know that everyone is on the same page … with 50 people, you need at least 1,225 connections. If someone changes their mind or learns something new, that’s all reset. So it’s no surprise – to me – that the conversation is becoming socially dysfunctional at around this time.”

Luckily, Sztorc believes there is a solution for this problem: prediction markets.

Prediction Markets

The concept of prediction markets is not new, Bitcoin legend Hal Finney advocated themyears ago.

Basically, prediction markets are markets for so-called “event derivatives,” which represent a possible future event. “Hillary Clinton will be elected president of the United States in 2016” could be such an event, for example. The relevant derivative might then be redeemable for one dollar if Hillary Clinton is indeed elected, but will be worthless if she is not elected. Up until the election, this derivative will be tradeable on the prediction market. As such, it will command a market price.

It then holds that this price would reflect the likelihood of Clinton becoming the next president, according to the market. If the Clinton token is worth 40 cents, the market gives her a 40 percent chance of winning the election. After all, if market participants expected a higher chance of her winning, they would buy these derivatives “at a bargain,” and the exchange rate would go up. And if market participants would expect a lower chance of her winning, they would sell (or short) these “expensive” derivatives, and the price would go down.

“The great thing about markets,” Sztorc explained, “is that they are incredibly decentralized – anyone can partake. This is good because, by definition, you don’t know who has what information, and people won’t want to give valuable info away for free. At the same time, markets present information that is unanimously and constantly acceptable. If you have a room full of 5,000 people, those who agree with the current rate would just do nothing. The price is ‘good enough,’ as far as they are concerned. Yet any person with a strong enough conviction can edit the price by buying or selling the event derivative, and update the exchange rate. They can improve the forecast and make money at the same time.”

The Great Noise Filter

Furthermore, prediction markets could be a great filter for uninformed opinion, or “noise.” Unlike message boards, chat rooms and mailing lists, partaking in a prediction market would come at a cost. Sztorc, therefore, expects that people who didn't invest the time and effort to really, deeply understand an issue won't get involved at all, as they would be unwilling to invest money, too.

Talk is cheap,” Sztorc argued. “But people who really don't know anything, or know how complicated a situation is, will probably not want to put their money down. And even if they do, even if a fool pushes the price around, there is now money to be made by well-informed people who can pull the market back toward realistic expectations.”

“The same is true for manipulation,” he said. “Everyone wants more money, while only a few people will want to knock a market in a certain direction. As such, markets inherently resist dishonesty. Unlike anything else, there is a force pulling the market rate towards reality. They just plain do a good job of getting the right answer, over time.”

Joint probability

Prediction markets can show us the expected future. But, much better, they can also be used to compare multiple expected futures.

Through funky constructions, it's possible to make predictions about specific scenarios. For instance: “If Hillary Clinton is the next president of the United States, then the stock market will rise.” Now, if Clinton is not elected president, anyone who bet on that scenario will get their money back, regardless of what the stock market does. It's only if she is elected, that the stock market comes into play. If Clinton is elected and the stock market then indeed rises, whomever predicted that correctly wins money. But if Clinton is elected and the stock market drops, they will lose money.

This also means that market participants can insure themselves against future events. Someone who holds stocks can insure himself against – say – a Donald Trump presidency, by betting that the stock market will drop if Trump wins. The bettor might still lose money on the stock market, but win money on the prediction market at the same time, canceling out his losses.

And, of course, these market rates will also be public for anyone to see. So now, prediction markets are not just predicting possible events, but consequences of possible events. While a ll presidential candidates will probably claim that the stock market will rise if they are elected, prediction markets reveal who the market believes is right. Rather than empty promises, voters can base their vote on market information.

Bitcoin Governance

So how is any of this relevant for Bitcoin's governance process?

Let’s take the block-size dispute as an example, and assume that everyone wants the exchange rate to go up. (Note that this is not necessarily true; some people value Bitcoin for other properties than its price. However, even then, the expected price could inform specific aspects of the debate, such as the security offered by the value of the mining reward.)​

First, a prediction market regarding bitcoin's price as resulting from the block-size limit could be utilized as a “hard fork insurance.”Lets say, for instance, that someone named Greg believes that bitcoin's exchange rate will drop if the block-size limit is increased. Greg doesn't want the bitcoin exchange rate to drop, because he holds a bunch of bitcoin. Therefore, Greg bets that if the block size is increased, the exchange rate will drop. If the block-size limit is then indeed increased, and the exchange rate indeed drops, Greg will win money. He would have effectively insured himself against that scenario.

That would be an advantage for Greg personally, as he wouldn't risk losing money. But it would also help the rest of us. After all, by making the trade, Greg has effectively stated his opinion, which is reflected in the exchange rate. Moreover, Greg could tell other people to insure themselves, or simply make his own insurance public. If people trust Greg's expertise enough, they will follow his lead, which adjusts the exchange rate even further.

But Greg is not the only one betting. Someone named Mike, who believes the exchange rate will rise if the block-size limit is increased, might be betting as well. And people who trust Mike's expertise might follow his lead instead. Now the prediction market reflects a potentially terrific aggregate of expertise, and their expectations of what's best for Bitcoin, offering a great guide for Bitcoin's development.

And there's an additional bonus. Lets imagine that Greg and Mike are talented programmers, working to improve Bitcoin or the ecosystem. Thanks to the prediction market, neither Greg nor Mike need to repeatedly enter into debates on message boards convincing everyone and their grandmother that increasing the block-size limit is either bad or good. After all, they have already insured themselves, and stated their opinion through their trade. Instead of wasting their time on Reddit, they can both get back to work.

No silver bullet

Of course, a prediction market won't solve Bitcoin's governance problem in and of itself. First, since Sztorc's Truthcoin is designed as a Bitcoin sidechain, there is one prediction that it can’t support. If Bitcoin breaks completely, or its exchange rate goes to zero, no payout will be possible, even if predicted correctly. Additionally, Sztorc's proposal relies on “oracles” to insert the truth after an event has happened, which required a bit of trust in these oracles. (Sztorc believes we should be able to find enough reliable people to do this task, to tide us over until his larger “trustless orcale” project is completed.)

But, most importantly, prediction markets cannot govern Bitcoin in and of themselves. They can only advise – and maybe that’s for the best.

Prediction markets don't need to replace anything. You can still have your mailing list, you can still have your forum discussions, and prediction markets won't automatically change Bitcoin's code,” Sztorc emphasized. “But prediction markets do offer something called common knowledge. Everyone will know what the market expects to happen– and everyone will know that everyone knows. And how weird would it be if the prediction market says we'll see a huge exchange rate collapse if we either do or don’t fork to Bitcoin XT, and yet some developers still keep fighting or pushing it?”

For more information on Truthcoin, visittruthcoin.info

The post How Prediction Markets Could Guide Bitcoin's Future appeared first on Bitcoin Magazine.

COINBASE LAUNCHES FIRST BITCOIN DEBIT CARD IN THE U.S

Coinbase has introduced what it claims is the first U.S.-issued bitcoin debit card, the Shift Card. This is aVISA debit card that allows Coinbase users in 24 U.S. states to spend bitcoin online and offline at more than 38 million merchants worldwide, the company announced on its website.

Coinbase has introduced what it claims is the first U.S.-issued bitcoin debit card, the Shift Card. This is aVISA debit card that allows Coinbase users in 24 U.S. states to spend bitcoin online and offline at more than 38 million merchants worldwide, the company announced on its website.

Users can spend funds from their Coinbase or Dwolla accounts any place VISA is accepted, according to the Shift Payments website. Dwolla is an online payment network.

Coinbase and Dwolla currently charge no transaction fees, but both companies can introduce fees in the future, Shift notes.

No Annual Or Transaction Fees For Now

Shift does not have an annual  fee for the card, nor does it charge a transaction fee. There is a $2.50 fee for ATM transactions, a 3% fee for international transactions and a $3.50 fee for international ATM transactions.

There is a daily spending limit of $1,000, but users can contact Shift if they want to increase this limit.

There is a $500 daily ATM withdrawal limit for Dwolla accounts and a $200 daily withdrawal limit for Coinbase accounts.

Eligible states are listed on both the Coinbase and Shift websites.

Adam White, Coinbase vice president of business development and strategy, told Wired that Coinbase wants to make it easy to spend bitcoin, and a mainstream debit card based on bitcoin is key to making this possible.

Shift Payments is a company working to make it as easy to spend digital currencies, cryptocurrencies and loyalty points, according to TechCrunch.

BITCOIN PRICE INDECISION WEIGHS DOWN CHART

Bitcoin price was eagerly sold to a low just above $300 before advancing away from it in equally enthusiastic trade. Apparently stuck in a rut above the $300 security blanket level, the market may not move significantly until the Fed fires the lift-off starter-gun in December.

From the analysis pages of xbt.social, earlier today:

Price corrected downwards, early today, to $310 (Bitstamp) and 2015 CNY before retracing most of the move for the rest of the day.

The move had made no new price low and there are two likely expectations:

1) The market is trying to test $300 but there is strong buying interest even above this level. Once all those who intended to buy have done so, the next sell-off should pull price to $300.

2) The market is consolidating in a trading range between $300 and $340. Today's downward correction has spent most of the bearish energy and the bulls will now continue buying to the upper blue trendline.

If price is bought to above the blue trendline, then buying may accelerate. Failure to get above the trendline may see the consolidative pattern continue - with another sell-off toward $300 and then a subsequent return to the mid $350s.