Bitcoin In-Fighting Doesn’t Matter: Gavin Andresen Weighs in

BITCOIN ACCEPTANCE

January 30, 2016 – Gavin Andresen, former head Bitcoin Core maintainer, posted a short treatise on the issue of consensus infighting among the Bitcoin implementations on the Svbtle writing network. The squabbling between the different dev teams has caused a deal of speculation and nervousness about the future of Bitcoin, but Andresen sees the issue a bit differently.

Also Read: Bitcoin Network Reaches 1 EH/s For First Time

Andresen: The Worst Case Isn’t That Bad

In his post, he proposes a short thought experiment, outlining the trajectory of a split on consensus rules in the bitcoin specification, something that seems more likely as the debate escalates on what direction to take moving forward. He appears to think this supposedly worst-case scenario wouldn’t hurt Bitcoin much at all:

“What would happen if some minority of mining hash power and maybe a merchant or exchange decided to stay with, or move to, different consensus rules than everybody else?

Would there be two different flavors of Bitcoin? Would it cause massive disruptions to the Bitcoin economy? Would your coins be safe?
(spoiler alert if you’re in a hurry: no, no, and yes)”

While it is refreshing to see a more optimistic perspective in the midst of doomsday profecy and wild speculation about how and when Bitcoin will change, his reasoning makes a lot of sense. Extreme changes would essentially become an altcoin, going the way of CLAMS, and the sort of ‘civil war’ scenario he outlines would end quickly and bloodlessly, the victor being the specification with the most hashing power. The Minority branch’s value would drop to zero, and the hashpower and coins in old blocks would get transferred back over to the main branch as this becomes apparent. In short, it wouldn’t be that big a deal:

“That is the real disincentive for miners to stick with the minority branch; in the three days it takes for their newly minted minoritycoins to mature they are very likely to see the price they can get for those coins drop to almost zero.”

Andresen’s understanding of Bitcoin lends credibility to a lot of his extrapolations, and the fact he’s not worried about its collapse makes you wonder what all the hysteria is even about. Most likely, all it’s achieving is development delays and introducing politics into a process that should be purely technical.

Bitcoin’s Unique Situation

Bitcoin’s P2P nature makes central control efforts problematic

 

Bitcoin has fundamentally and irrevocably changed commerce and finance, and our thinking about investments has to change accordingly in the context of cryptocurrency. Bitcoin Isn’t a company, doesn’t have a central bank, and bitcoin owners aren’t shareholders. Lack of a united front can at best be seen as competition bringing the best to the forefront of Bitcoin as software, or at the worst be seen as irrelevant. Bitcoin is worth a lot, but the developers working on it aren’t CEO’s or a Federal reserve. Bitcoin’s value comes from its decentralization and the amount of people using and trading in it. Outside of that, not much else matters long-term.

Because the devs are as close as people can get to a centralized authority on Bitcoin, they attach a lot of importance to what they say and do in the community. Bitcoin’s nature makes exertion of individual interest close to meaningless, though. Andresen’s write-up exposes the fallacy of the vying for control over any decentralized system. Even in a split designed to harm or change the network forever, majority adoption wins out, and things come to equilibrium fairly quickly. I propose the best course of action for the bitcoin community is to let the developers do their jobs without interruption, so they can address real potential points of failure in the software — not speculative ones on social media.

What’s your take on bitcoin development and the balance of community input? Be sure to let us know in the comments!

Weekly Bitcoin Price Review: The January Drop

The beginning of the week, on January 25, 2016Bitcoin price was at the level of $397. On Tuesday,January 26, 2016 due to dropping oil prices we have seen another decline in Asian stock markets, but it had no effect on Bitcoin.

Until January 28 BitcoinCT r:  8 was trading at around $400. On January 27 the Federal Reservereleased its decision to leave interest rates unchanged, which led to the strengthening of the USDollar in foreign exchange markets, putting pressure on the price of Bitcoin.

BTC price dropped to $382.

Continuing the decline, on January 29, 2016 Bitcoin dropped to $366, but during the same day it returned to a price of $382. This became the price at the beginning of the weekend.

This week is the last of January. We can summarize that this month Bitcoin lost $50, as earlier this month Bitcoin price was $432 and by the end it is $382.

The key event this month, and the reason for the sharp decline in Bitcoin price, was the swan-song of former Bitcoin Core Developer Mike Hearn. He left the Bitcoin development community, undermining the fundamentals with ill-will, resulting in a protracted downward trend.

After this Bitcoin dropped to a price point pf 360$ on Asian exchanges. Moreover, the main competitor of Bitcoin – the Dollar has strengthened its positions again in January. US GDP in 2015 grew by 2.4%. Also, consumer spending showed the maximum growth over the past 10 years; this factor also contributed to the lack of growth of Bitcoin.

What will be the market in February, the future will tell soon enough. Bitcoin continues to have a lot of upside in 2016. We can assume that the price of Bitcoin has sufficiently decreased and soon we will see a reversal and resumption of uptrend. What do you think?

How Android And IOS Apps Would Help In Promotion Of Bitcoin?

Everyone has at least one smartphone which can be used to download apps from the Apple Store orGoogle play for different reasons. Now with the spreading of Bitcoin we have witnessed apps that help us to pay for stuff we buy online and we call them bitcoinCT r:  8 wallets, also we have apps that show the funny side of bitcoin, finally there are more experts apps that make the life of a businessman easier and more productive.

Take the app called Bitcoin Business planner , whose goal is to provide all the best links to the world of digital mining. Larry Pantlin is the owner ofCapstone Digital Mining.

He shared his opinion with CoinTelegraphCT r:  31:

“I would say having an app has done little for me in the way of traffic and clicks. Basically it is worth investing the time to build an app and a website but to be honest the best leads are in advertising on other bitcoin site like rotators to get the traffic.

For now i wouldn’t recommend an app, but a site is sure needed for all small business.”

Another expert, Michael Hlavacek, who is an app developer of the well known app Claim bitcoin, in the same matter has commented:

“I see a huge potential in Bitcoin apps. They help to introduce new people to the Bitcoin and make it more accessible to masses. If the ultimate goal  is to spread the global use of Bitcoin, this is the next logical step on the way.”

Both apps can be used with smartphones.These apps are addictive, nice, and informative according  to the comments of users.

We have also sought an opinion from Gary Rowe Ceo from Bitcoin Solutions Ltd (Multibit) and his comments are:

"The mobile world revolves around the use of internet-connected apps and Bitcoin is essentially internet money. Any apps iOS orAndroid that successfully integrate Bitcoin into their service will increase the utility of bitcoin and help to spread its use throughout the world”

A businessman,  Panagiotis Alexandrakis, from the communication company Masterphone has given a full opinion on the matter, regarding the Bitcoin Maps and the apps that are out there.He is working as a sales and marketing manager at Masterphone.

In his opinion the bitcoin maps like Bitcoin World Map, Bitcoin Accepted Here, BitPages-Find Bitcoin, are the most useful tool in his work.

Bitcoin Accepted Here, BitPages-Find Bitcoin" src="http://cointelegraph.com/storage/uploads/view/4adda29f6195d7c7639d81d23af377a4.png" title="Bitcoin World Map, Bitcoin Accepted Here, BitPages-Find Bitcoin" style="box-sizing: border-box; font-family: 'Open Sans', sans-serif; outline: none !important; border: 0px; vertical-align: middle; width: 392px;">

We spoke to him to hear his opinion on the matter:

“The obvious benefit is that they close the gap between the BTC owner and the BTC accepting places in order to spend BTC”.

In conclusion, as the matter is goes on and on, only one thing is certain:  Apps will be more interesting in the future and people’s needs will lead the way to better and more apps. More fun is the key!

Bitcoin 2.0: Fantasy Or Inevitability?

The blockchain – upon which Bitcoin is based – has been the center of heated discussion in recent months. The blockchain is a means of sending digital messages between parties whose purported history can be trusted. 

Bitcoin 2.0 companies and the “promises” of the blockchain have become a recurring theme in the Bitcoin space. Some have discussed how “the greatest potential for Bitcoin may reside in its underlying technology rather than as a currency.” In 2015, talk shift from Bitcoin to the Blockchain, of that there can be no doubt.

Many banks entered the space. The general feeling in the public mind is these banks were thus investing in the Bitcoin blockchain. Not necessarily the case. Instead, they were learning about something they might design and patent themselves which is similar to Bitcoin. Bitcoin is not patented so there’s no worries there for a bank’s legal departments.

Despite the movement into the space, there are still serious and unanswered questions about the implications of blockchain technology, in particularly distributed ledgers.

Will distributed ledgers become all they’re cracked up to be? Will Corporations of the future be Decentralized Autonomous Corporations (DACs) that answer to transparency and internet protocol as opposed to government incorporation processes? Will nation-states vote on blockchain based voting systems? Will the modes of future media distribution also be decentralized on the blockchain? Will people register their newborns on the blockchain? Will marriages take place on the blockchain? Some people even believe the internet itself, in the future, will be on the blockchain.

So there are massive implications for the future of online life in the wake of the blockchain.  At this point, all this is very theoretical. Where there are working models, there are needs for greater manpower, greater resources, and so on, if some of those abovementioned technologies are ever to become reality within the scope of the so-called “Bitcoin Community.” It’s more likely well-funded large institutions will design much of the tech filed under the umbrella of blockchain since they have the money, organization and wherewithal. Not all of these players will care about Bitcoin like Patrick Byrne.

Ethereum, BitShares and all other Bitcoin 2.0 propositions come as the Bitcoin protocol itself could become the true Bitcoin 2.0 as developers in the space attend conferences called “Scaling Bitcoin” in order to determine how to change the Bitcoin code so it can scale. In other words, it could very well be that Bitcoin-XT – or other variations of the code thought up by designers in the Bitcoin space – will be its own Bitcoin 2.0, Bitcoin 3.0 and so on, and Bitcoin 2.0 technology will thus be rendered to a marketing scheme.

Both Ethereum and BitShares have come with their own sets of problems. Where the BitShares team habitually over-promises and under-delivers, Ethereum loses $9 million because its investment strategy was the wholly one-dimensional and naive strategy of buying Bitcoin. That management of funds should not exactly evoke confidence in the Ethereum team. A better option would have been a diverse investment portfolio designed to make conservative returns for Ethereum and the Bitcoin ecosystem. While there’s no guarantee that would work, it at least is more nuanced.

Those funds could have been re-invested into the grassroots Bitcoin industry. Interest in the blockchain is increasing and Bitcoiners are selling the blockchain as the true power of Bitcoin. Banks are studying the blockchain as well to determine whether or not the systems can improve their banking structure.

This could result in many different blockchains. Private ones. Public ones. Private-Public ones. Whatever. Not all of it bad. Bitcoin will have had a huge effect on the world, just more subtle than typically envisaged as private institutions develop their own alternatives which fit with their models.

What’s for sure, however, is that a large part of what’s been mused about in the Bitcoin community is largely theoretical. Some, moreover, have seemingly been done before, either in Bitcoin itself or with prior technologies like BitTorrent. While bitcoiners think their projects are disruptive and groundbreaking, they might not be correct about their visions.

Steve Albini didn’t see the point in a smart contract, for example, as it is described by much of the Bitcoin industry. It’s not that he didn’t understand, it’s just that it didn’t seem useful to him.

“What most of the underground culture has been based on is not finding an alternative version of something in the mainstream culture, like in [the Bitcoin] example, finance, but making those things we find repellent about the mainstream culture irrelevant,” Albini told Tony Sakich of Decentralize.fm.

“It’s not let’s have our own lawyers and contracts and our own automated version of bill collecting; let’s not have lawyers, let’s not have contracts, let’s not have bill collecting, and not let’s have our own version of exclusive relationships that we police, but let’s not have exclusive relationships and not have any police.”

Many of the Bitcoin 2.0 theories must still be developed further, and that includes the theories propping up the idea.  And whether or not they matter in any significant way won’t be seen until they are developed and have use-cases. Moreover, many of the “amateur” products in the space could see any potential resources drained as financial institutions enter into the space and begin developing their own blockchain technologies thus circumventing the need for the traditional
Bitcoin grassroots.

SF Block Chain Conference by Lighthouse Partners to Feature More than Just Bitcoin

The Block Chain Conference is a cryptocurrency agnostic conference. Rather than focusing on Bitcoin exclusively, the Block Chain conference focuses on “accelerating the development and deployment of blockchain based approaches by global businesses.”

Also read: Bitcoin Core Launches Social Media Presence

The Block Chain Conference: When and Where

Scheduled to take place on Wednesday, February 10th, 2016, the conference will be held at Mission Bay conference center, located on the campus of UCSF Mission Bay of San Francisco. Produced by Lighthouse Partners, Inc., “a business and technology consulting firm advising on positioning of innovative enterprise technologies,” the conference will feature Peter Harris as Conference Chair.

The Block Chain Conference will be held at UCSF

The conference is tailored for senior business innovation and product marketing executives, as well as senior technologists from companies deploying enterprise IT systems; this kind of people are the ones expected to attend. You must be 18 years or older to attend, without specific dispensation.

The highlight of the conference will come from IBM’s keynote, being delivered by Global Blockchain Offering Director John Wolpert, titled “How to Make Block Chain Real for Business.” Providing IMB’s point of view on the potential that block chain technology has, it will focus on the company’s collaboration with The Linux Foundation.

IBM will also be joined by likes of AlphaPoint, Gem,Overstock.com, and Wall Street Blockchain Alliance, just to name a few.

“A key mission of The Block Chain Conference is to educate business innovators and technology architects from companies deploying enterprise IT on the potential benefits and challenges of leveraging block chains, distributed ledgers and smart contracts, with lots of reality and zero hype. – Conference Chair Peter Harris”

16 additional presentations will be given in addition to the IBM keynote, with topics ranging from Bitcoin’s place in corporate and personal payment settings, Etherum involvement within Microsoft Azure, as well as Factom blockchain technology uses.

As Bitcoin and the block chain both become words that are spoken more often, it is good that we to see conferences like this one pop up with a focus on introducing new people to cryptocurrency technology, compared to conferences that focus solely on Bitcoin. If interested in signing up for the conference, the rate of the entrance is $495 online and $595 at the door.

IMF: Virtual Currencies and Their Underlying Technologies Can Provide Faster and Cheaper Financial Services

On January 20, 2016 at the World Economic Forum in Davos, during the panel on Transformation of Finance, the International Monetary Fund (IMF) released a paper titled “Virtual Currencies and Beyond: Initial Considerations.”

“Virtual currencies and their underlying technologies can provide faster and cheaper financial services, and can become a powerful tool for deepening financial inclusion in the developing world,” said IMF Managing Director Christine Lagarde. “The challenge will be how to reap all these benefits and at the same time prevent illegal uses, such as money laundering, terror financing, fraud and even circumvention of capital controls.”

The paper is presented as a “Staff Discussion Note.” These documents showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate, with the disclaimer: “The views expressed in Staff Discussion Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.” Plausible deniability all the way, but presenting the document at Davos seems to strongly suggest some degree of official support.

A key conclusion of the paper is that the distributed ledger concept has the potential to change finance by reducing costs and allowing for deeper financial inclusion in the longer run, states the IMF press release. This could be especially important for remittances, where transaction costs can be high, around 8 percent. Distributed ledgers can also shorten the time required to settle securities transactions, which currently take up to three days, as well as lower counterparty and settlement risks.

At the same time, notes the IMF paper, virtual currencies based on distributed ledger technology can also serve as vehicles for money laundering, terrorism financing and tax evasion. Achieving a balanced regulatory framework that guards against risks without suffocating innovation is a challenge that will require extensive international cooperation.

A conclusion of the IMF paper is that virtual currencies fall short of the legal concept of currency or money. While acknowledging that there is no generally accepted legal definition of currency or money, the authors note that both are associated with the power of the state to issue currency and regulate the monetary system.

Currently, according to the IMF, virtual currencies are unable to function as money because of the high price volatility, the relatively small size of the virtual economy, and the fact that virtual currencies are hardly being used as independent units of account in a closed-circuit economy. In fact, notes the report, the retailers who accept payment in virtual currency usually quote prices in fiat currency.

After a simplified explanation of distributed ledger technologies for virtual currencies, the paper focuses on regulatory issues.

“The potential for rapid change in the financial industry engendered by virtual currencies is a challenge for financial regulators and supervisors,” note the IMF authors, adding that the absence of effective regulations has contributed to both benefits and risks.

The IMF authors make a difference between cryptocurrencies and “legitimate” uses of the underlying distributed ledger technology: “The growing interest in blockchain technology, independent from a [virtual currency] scheme, a priori raises fewer policy concerns, because the technology would be used in a closed system administered by regulated financial institutions.”

While advocating regulation of virtual currencies, the paper acknowledges that there are unique regulatory challenges, including the fact that the geographically decentralized nature of virtual currency networks like Bitcoin doesn’t fit easily within traditional regulatory models based on local jurisdictions. Another challenge is the fact that the traceability of virtual currency transactions is is limited due to user anonymity and anonymizing service providers that obfuscate the transaction chain.

In fact, the push to increased regulation of virtual currencies is likely to be countered by the emergence of next-generation privacy-preserving digital currencies like Zcash.

The IMF paper concludes with a list of principles that could guide national authorities in further developing their regulatory responses. Besides the guidelines mentioned above, it’s worth noting that the IMF authors realize that new closed-circuit business models, where virtual money is re-used instead of exchanged for fiat, could escape regulations, and propose to extend regulations to wallet providers.

The IMF paper confirms two current trends: Virtual currencies based on distributed ledger technology are increasingly considered by top financial institutions as a necessary part of future mainstream fintech, and at the same time regulatory pressures are increasing.

Five Ways the Developing World Uses Bitcoin

We frequently speculate about the “killer app” that will drive wider adoption of Bitcoin, but rarely do we look beyond Europe and North America. Meanwhile, in developing countries, digital money is already taking root. From Bitcoin on Latin American social media to mobile money wallets in South Africa, digital currency is spreading to communities all over the world. Let’s explore a few intriguing projects:

Taringa! is a popular social media site in Latin America. They’re similar to Reddit: Users share and discuss links to their favorite websites. Targina! recently gave $76,000 in bitcoin to their users. Social media offers a low-barrier opportunity for people to experience using digital financial services, and rewarding content creation with bitcoin could both strengthen this site’s user base and expose new people to digital currencies.The World Food Programme’s electronic cash transfer system enables refugees in Kenya to buy food with their phones. For a refugee in a foreign country with few belongings or resources, funds may be locked away in an inaccessible account back home. The World Food Programme sends refugees money directly for basics like food and shelter. Since direct cash transfer is proven to be one of the most effective means of lifting people out of poverty, the WFP system shows digital money’s potential to improve the lives of marginalized communities like refugees.Nigerian digital money wallet Bitsoko will use funding from the Bill & Melinda Gates Foundation to support digital financial literacy. Bitsoko’s Android app uses blockchain technology to lower transaction costs. The company is encouraging Bitcoin adoption in Kenya by setting up local businesses to accept bitcoin payments.Vumi’s upcoming open-source app will enable young women in South Africa to save money on their phones. The nonprofit Praekelt Foundation is using the Stellar network as infrastructure, which means that the wallet can hold multicurrency (including fiat) balances. The end goal of Praekelt’s project is not just digital savings—their research shows that girls with savings accounts tend to stay in school longer, have better health outcomes, and participate in the formal economy.Women in rural India who were previously banned from owning mobile phones are nowusing phones to manage money. Women use the technology to access credit and save funds, and a few have even launched their own innovative pilot projects.

These projects represent a small fraction of digital money endeavors and apps in low-income countries. Crypto might need a killer app to take hold in the U.S. or the U.K, but in much of the world it’s already enabling affordable access to financial services that make it possible for people to independently improve their lives.

Jed McCaleb believes in consciously leveraging technology to reduce inefficiency and improve the human condition. He created eDonkey, one of the largest file-sharing networks of its time, as well as Mt. Gox, the first Bitcoin exchange. Recognizing that the world’s financial infrastructure is broken and that too many people are left without resources, he cofounded Stellar in 2014. Jed is also an advisor to MIRI, which researches artificial intelligence for positive impact. Find him online on Twitter, GitHub, and his blog.