Category Archives: Bitcoin

Searching for the future of currency, major companies try Bitcoin technology – PBS NewsHour

HARI SREENIVASAN: Im walking on Wall Street with author Don Tapscott. Hes written a dozen books on technology and sees one that could change everything around us. Hes not the only believer. While the Dow Jones Industrial Average is up about 20 percent in the past year, Bitcoin, a digital currency, is up more than 700 percent, with a total value of near $80 billion. Thats more than American Express. The surge has people wondering whether Bitcoin is in a bubble.

For Tapscott, that question is missing the real story.

DON TAPSCOTT, AUTHOR BLOCKCHAIN REVOLUTION: The real pony here is the underlying technology called the blockchain.

HARI SREENIVASAN: Tapscott and his son co-wrote a book called Blockchain Revolution, named after the technology that supports bitcoin and other so-called cryptocurrencies. Theyre called that because of the cryptography, or computer code, that makes them secure.

Tapscott says the technology is the key to creating trust in peer-to-peer transactions, like sending or receiving money without a bank or a credit card company in between.

DON TAPSCOTT: Trust is achieved not by a big intermediary; its achieved by cryptography, by collaboration and by some clever code.

HARI SREENIVASAN: Heres how the blockchain works: when you send or receive an asset, the transaction is recorded in a global, public ledger. A network of millions of computers store copies of that ledger and work to validate new transactions in blocks. When each block is verified, its sealed and connected to the preceding block, which in turn is connected to every block that has ever been validated, creating a secure blockchain.

DON TAPSCOTT: There is now an immutable record of that transaction. And if I wanted to go and hack that transaction, say to use that money to pay somebody else, Id have to hack that block, plus the previous block, in the entire history of commerce on that block chain, not just on one computer, but across millions of computers simultaneously all using the highest level of cryptography while the most powerful computing resource in the world is watching me. The way I like to think of it is that is a blockchain is a highly processed thing sort of like a chicken nugget, and if you wanted to hack it, itd be like turning a chicken nugget back into a chicken. Now someday someone will be able to do that. But for now, its going to be tough.

HARI SREENIVASAN: Tapscott predicts these global ledgers, or blockchains, could affect several parts of the economy during the next decade, in particular, the financial industry.

HARI SREENIVASAN: In a blockchain future, what happens to the New York Stock Exchange?

DON TAPSCOTT: Well, a likely scenario is it becomes a fabulous museum, and it is a beautiful building when you think about it. But buying and selling a stock can be done peer-to-peer now using new blockchain platforms.

HARI SREENIVASAN: He says routine transactions, like using a credit card or making online payments with PayPal or Venmo, could be replaced with instant, peer-to-peer blockchain transactions, speeding up how long it takes and shrinking the costs.

DON TAPSCOTT: Think about something like you tap your card in a Starbucks and a bunch of messages go through different companies. Some of them using, you know, 30-year-old technology, and three days later, a settlement occurs. Well, if all of that were on a blockchain there would be no three-day delay. The payment and the settlement is the same activity. So it would happen instantly and in a secure way. So thats either going to disintermediate those players, or if those players are smart, theyll embrace this technology to speed up the whole metabolism of the financial industry.

HARI SREENIVASAN: Beyond upending financial transactions, Tapscott imagines a future where a blockchain could be used to transfer any kind of asset, from a users personal data to intellectual property.

Some of that has already begun. This is Consensys, a technology start-up in Brooklyn, New York. Joseph Lubin founded Consensys and helped develop the Ethereum blockchain, the second biggest blockchain in the world after Bitcoin. Ethereum launched in 2015.

JOSEPH LUBIN, CONSENSYS: Ethereum is by far the most powerful blockchain platform out there. It has the most expressive programming language.

HARI SREENIVASAN: Meaning Ethereum can do something pretty radical: it allows for what are known as smart contracts to be built into the code. So it can also transfer a set of instructions or conditions.

DON TAPSCOTT: Its kind of like what it sounds like its a contract that self-executes, and it has a payment system built into it. Sort of like a contract that has built in lawyers and governments and a bank account.

HARI SREENIVASAN: At Consensys, one project applies this idea to music.

JESSE GRUSHAK: Click buy album

HARI SREENIVASAN: Jesse Grushack is the founder of ujo, a music platform for artists to distribute their music through the blockchain. Artists decide what price to sell their music and pocket more from their intellectual property.

JESSE GRUSHAK, UJO MUSIC: Were looking at how to make the music industry more efficient, but at the end of the day, our top level goal is getting artists paid more for their work and all their creative content.

HARI SREENIVASAN: But ujo is not yet easy to use. There is only one album on the platform, and it requires users to buy music with ether, the cryptocurrency used on the Ethereum blockchain.

JESSE GRUSHAK: The blockchain is still in its infancy right now. Its still kind of in the Netscape phase, really, of the internet. You dont have that AOL, you dont have that landing page that opens the world up to you. Its still a little nerdy, its still a little technical but were working really hard to kind of make it usable, make the user experience seamless because really this technology we want to be in the hands of everyone.

HARI SREENIVASAN: When he said, a little nerdy, he wasnt kidding. In order to get an idea, I went out and bought some crypto-currencies online and the process was not easy. Certainly not as easy as going to the bank to get cash or calling a stockbroker to buy a stock. But then, using my first email account in the early 90s, that wasnt easy either.

DON TAPSCOTT: I think were in 1994. And in 94, we had the internet and most people were using it for a single application, email. And thats kind of like Bitcoin is today. The application is called a currency, but were starting to see the rise of the web as we did in 94. A general purpose platform for building applications that changed many, many industries.

HARI SREENIVASAN: Youve literally written the book on the blockchain. How do you know that this is actually working, that people are believing in this, investing in this, understanding the potential in this?

DON TAPSCOTT: In every single industry now, companies are starting to implement pilots to explore how this technology can change their operations.

HARI SREENIVASAN: Tapscott points to retailer Walmart, which has done a pilot using a blockchain to track food safety, and manufacturer Foxconn, which is experimenting with using a blockchain to track its supply chain.

Still, this blockchain believer acknowledges it has a lot left to prove.

HARI SREENIVASAN: Theres several critics out there that kind of look at this and say, This is like tulip mania. This cryptocurrency stuff, this is a bubble, bigger than Ive ever seen before. Theres a bunch of people that dont know a thing about whats going on that just want to see something go up.

DON TAPSCOTT: Well, for sure theres a hype cycle that were into now. But the biggest impact will be that blockchain itself is going to change the fundamental operations of banks, of retail companies of supply chains, of manufacturing companies, of governments, and of every institution in society.

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Searching for the future of currency, major companies try Bitcoin technology – PBS NewsHour

Bitcoin $5,000: Currency Hits New Record High | Fortune.com – Fortune

The price of the world’s best known digital currency briefly crossed the $5,000 mark on a major index for the first time on Friday evening ET, before retreating about 5% in subsequent hours.

The idea of Bitcoin breaking the symbolic milestone of $5,000 would have been unthinkable to most people at the start 2017, when the price topped $1,000 for the first time. If you’re keeping track, the digital currency is up 500% this year, and nearly 2200% since mid-2015, when it was in the doldrums at around $220.

There appears to be no single reason for the recent run-up. Instead, it can likely be explained by the same factors driving this year’s cryptocurrency bull run: Publicity-driven speculation; New financial products creating unprecedented liquidity; Trading surges in Asian markets; Institutional investors treating digital currency as a permanent new asset class.

Meanwhile, the $5,000 milestone is likely to trigger a new round of chatter that Bitcoin and other cryptocurrencies are in a bubble and vulnerable to a major price collapse. Bitcoin has experienced a series of spectacular crashes in the past (most recently in 2014 when it dropped around 75%) but has always recovered.

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Finally, it should be noted that Bitcoin crossed $5,000 on an index used by the trade publication Coindesk, but not by other major indexes. This is significant because Coindesk’s BPI index includes prices from several Asian exchanges, where prices are typically higher than US or European one. Here’s a screenshot showing the milestone (the time shown is GMT):

A more conservative price estimate can be found on an index created by the Winkelvoss twins, are among the world’s biggest holders of Bitcoin. Known as the Winkdex, the index only draws data from U.S.-dollar denominated exchanges. As you can see, the index’s calculation shows how Bitcoin prices approached the $5,000 mark, but did not break it:

Bitcoin is not the only cryptocurrency to achieve new highs this week. Ethereum nearly crossed the $400 mark for the first time while another smaller rival, Litecoin, briefly broke through the $90 mark.

As of Saturday late morning ET, Bitcoin was trading between $4,500 and $4,600.

This is part of Fortunes new initiative, The Ledger, a trusted news source at the intersection of tech and finance. For more on The Ledger, click here.

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Bitcoin $5,000: Currency Hits New Record High | Fortune.com – Fortune

Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required – newsBTC

It appears as if the Bitcoin mempool is virtually empty once again. This is a positive development for anyone looking to move BTC on the network. Up until this point, there have been several issues with transaction delays. However, it appears those problems are finally coming to an end as we speak. Users should adjust their transaction fees accordingly to avoid overpaying. Theres no reason to pay too much, after all.

It is good to see the Bitcoin mempool clear itself out. More specifically, now is the best time to move Bitcoin on the network. An empty mempool means fees can be kept to an absolute minimum. That is good news for the network as a whole. Bitcoin miners may not like this development too much, though. Their earnings will decrease slightly when network fees drop off. Then again, we have seen multiple incidents involving an overly full mempool these past few months.

The positive side to all of this is how theres no need for high transaction fees. Using the default setting in ones wallet should be just fine. However, it appears some wallets are still charging too much as we speak. It is worth the effort to manually adjust fees whenever possible. Wallet estimation tools are still pretty awful to this very day. It is unclear if this situation will change anytime soon, though. Using the default Bitcoin Core client may be ones best option in this regard for the time being.

This also shows how there is no spam attack against the Bitcoin network right now. Many people had feared that would happen eventually, but it turns out things are just fine for now. This situation may change at any given moment, though. Spam transactions can be launched in mere minutes and flood the network pretty quickly as a result. For now, the mempool is still empty and continues to be for some time to come, hopefully. It has been around 30 days since we last had an empty Bitcoin transaction backlog.

With Bitcoin Cash effectively splitting off, it seems those high fees are a thing of the past now. Everyone who wants bigger block sizes can effectively switch over to BCH. Everyone else hopes for either SegWit or SegWit2x to make a big difference in the coming months. It will be interesting to see how this situation will play out in the long run. It is now up to wallet developers to successfully lower their network fees properly. Whether or not what will happen, remains a big mystery for the time being.

Header image courtesy of Shutterstock

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Bitcoin Mempool is Empty and High Transaction Fees are no Longer Required – newsBTC

Literally just one huge chart showing bitcoin’s incredible rise to $4800 – MarketWatch

Eight days.

Thats how long it took bitcoin BTCUSD, -5.34% back in April 2013, to rise from $100 for a single bitcoin to $200.

Fast forward four years and the cryptocurrency has reached an all-time high of $4,890.40 and has been scaling $100 milestones in a matter of hours on a routine basis. On Tuesday morning, the price of a single bitcoin was around $4,400; by Tuesday afternoon it had shot up to briefly top $4,700 for the first time. Friday, it scaled above $4,800 and has $4,900 in its sights.

While these milestones have become lesser and lesser accomplishments as bitcoin has continued to blaze along its upward path bitcoin would now only need to rise 2.1% to go from $4,800 to $4,900, compared with 100% when it doubled to $200 it is also indicative of just how astonishingly fast the digital currency has been rising this year. So fast we were barely able to fit all the milestones onto this whopper of a chart.

Vote: What will we see first: Dow 30,000 or bitcoin $30,000?

Also read: 22 internet memes that let you relive bitcoins historic rise

If that chart isnt making bitcoins staggering ascent abundantly clear, here are some more stats that should do the job:

One year ago, on Aug. 31, 2016, bitcoin was trading at $576.

Which means bitcoin is up over 740% over the past 12 months.

It closed 2016 trading at about $954.

So, thus far in 2017, it is up over 400%.

Bitcoin started the month of August at $2,738.

And has hit record after record this month, surging 77%.

There have been nine days in 2017, five in August alone, in which bitcoin has scaled past several $100 milestones in a single day.

At current levels, bitcoin has a market cap of $79.38 billion, larger than such companies as Starbucks Corp. SBUX, +0.13% and American Express Co. AXP, +0.05%

(Bitcoin prices according to CoinDesk.)

This is where well remind you that as the elder sibling of the cryptocurrency gang, bitcoins numbers actually pale in comparison to some of its brethren:

Ether has soared more than 4,600% this year. Its total market cap stands at $36.7 billion.

Bitcoin Cash, an offspring created in response to bitcoins transaction-size issue, has a market cap of $10.4 billion. (Though it is down about 26% from an all-time high above $860, hit on Aug. 19.)

Ripple, at about $0.25, is up nearly 3,900% this year. Market cap at latest check: $9.5 billion.

Litecoin, at about $79, is up over 1,800% since the beginning of this year, when it was trading at just over $4. Its market cap now stands at just over $4.1 billion.

Despite the records, cryptocurrency trading has been extremely volatile this year. Bitcoin recently dropped more than 10%, briefly putting it into correction territory before it subsequently rebounded. Still…

The combined market cap of all digital currencies is above $175 billion, according to CoinMarketCap.

And it has grown by more than $20 billion in the past eight days.

At current levels, the crypto market cap amounts to nearly one-tenth the value of the physical stock of official gold.

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Literally just one huge chart showing bitcoin’s incredible rise to $4800 – MarketWatch

Bitcoin’s nearly five-fold climb in 2017 looks very similar to tech … – CNBC

When charted, bitcoin’s rapid gains resemble how stocks surged into the tech bubble before collapsing.

David Ader, chief macro strategist at Informa Financial Intelligence, matched a graph of the Nasdaq Telecommunications Index at its peak in 2000 to bitcoin’s five-year run to all-time highs.

“This is the price chart for an overly frothy market, in my opinion. I just don’t see anything quite as comparable to this in bubblelicious terms,” said Ader, a former top-rated bond market strategist.

Bitcoin climbed more than 3.7 percent Thursday to a record of $4,802.74, up nearly five times in price this year and about 67 percent higher for August, according to CoinDesk.

Source: Informa Financial Intelligence

“I think it’s going to come to a sorry ending,” Ader said. “I don’t know anybody who’s actually used a bitcoin for any purpose legal or otherwise. This looks like an overly frothy market and frothy markets lose their froth.”

Ader said he used the Nasdaq telecom index since many of those stocks led the Nasdaq composite’s overall gains during the tech bubble. The Nasdaq telecom index shot up more than 700 percent from 1995 to 2000, before collapsing 90 percent in the next two years. The index remains about 75 percent below its record high.

Bitcoin’s meteoric surge this year comes as many on Wall Street are becoming more interested in the digital currency and the blockchain technology behind it. New digital asset investment funds are rolling out and the Chicago Board Options Exchange is planning to launch bitcoin futures.

Many investors also bought bitcoin this month after it survived a relatively uneventful split on Aug. 1 into bitcoin and bitcoin cash, an alternative version supported by only a few developers. Bitcoin cash is up about 180 percent from its Aug. 1 low, to Thursday’s price of $588, according to CoinMarketCap.

However, bitcoin could split again this fall because there’s another upgrade proposal, and others have warned that the speculative forces behind bitcoin could quickly turn against it.

Here are a few of the alarm bells sounded this summer:

By percent change, analysis from Bespoke Investment Group shows how bitcoin’s surge has already well surpassed that of any major stock market bubble.

Source: Bespoke Investment Group

That said, some well-respected names on Wall Street have also issued positive reports on the digital currency.

Lee and Moas both reason that bitcoin can climb to those levels if even a fraction of the trillions of dollars in gold or other traditional investments move into the digital currency.

Bitcoin has a market value of about $78 billion, and digital currencies overall are worth $170 billion, according to CoinMarketCap.

That makes the value of all digital currencies less than 5 percent of the more than $4 trillion inflation-adjusted value of stocks during the tech and telecom boom, said Chris Burniske, author of the upcoming book, “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond.”

“If people think this is the ‘big bubble,’ then they don’t have an appreciation for how big the idea of cryptoassets really is,” he said.

Many digital currency enthusiasts agree there is speculation in the digital currency. But they note that, just like the dot-com bubble, companies that were able to utilize the underlying technology then became global giants.

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Bitcoin’s nearly five-fold climb in 2017 looks very similar to tech … – CNBC

As bitcoin surges in price and popularity, so do the complaints – CNBC

Virtual currencies such as bitcoin are becoming more and more popular as an alternative investment thanks to their rising value, but as more consumers engage with it, so are the number of complaints against tech companies offering digital currency products.

The number of complaints about virtual currencies filed with the U.S. Consumer Financial Protection Bureau (CFPB) has increased from seven last year to a projected 425 this year, according to a report from online loan refinancing marketplace LendEDU, published on Tuesday.

“In 2017, virtual currency transactions account for 0.0019 percent of the total complaints received by the CFPB. The CFPB is on pace to receive 425 complaints in 2017, up 5,971 percent from the seven complaints received in 2016,” Jeff Gitlen, content marketing analyst at LendEDU, said in the report.

The report analyzed 145,948 complaints made against 2,731 different companies this year. Complaints to the CFPB cover a range of personal finance issues, including bank accounts and services, credit cards, debt collection and money transfers. The report did say it was possible that some complaints related to digital currency transactions could be tagged with a different category, such as “bank account.”

The report highlighted Coinbase, a market-leading wallet provider for cryptocurrencies in the U.S., as being behind a number of the complaints. Six complaints were filed against Coinbase in 2016 and 288 complaints have been filed so far this year. LendEDU predicts it will receive 442 complaints this year, for various reasons and in various categories.

These are just complaints filed with the CFPB. Coinbase enjoys a marking leading position with nearly 10 million users, according to its website, but a scan of complaints made against the company on social media indicates a number of dissatisfied customers: Posts on Twitter to the company’s customer support account shows some users attempting to resolve issues raised weeks ago.

Many of the complaints raised concern problems regarding verifying accounts, withdrawing money and making transactions.

Part of the problem, according to the report, is that regulators have placed greater restrictions on companies such as Coinbase in order to prevent money-laundering and other crimes, which have a knock-on effect for consumers.

“Regulators have forced exchanges, like Coinbase, to place tight restrictions and limits on users due to anti-money laundering concerns. Coinbase, and other exchanges, now require an in-depth verification process to withdraw money,” Tyson Cross, an attorney with Cross Law and a specialist in bitcoin, said in the report.

Coinbase did not immediately respond to requests for comment when contacted by CNBC.

Regulations have tightened as cryptocurrencies such as bitcoin have become more popular. Bitcoin’s price reached a fresh all-time high of $4,703.42 on Tuesday, up nearly 70 percent for the month of August. It is currently trading at around $4,598 for one bitcoin.

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As bitcoin surges in price and popularity, so do the complaints – CNBC

Here is how Indians are minting a fortune in bitcoins – Economic Times

BENGALURU: When 32-year-old Harshad Gawde first invested in bitcoins in 2013, he couldn’t have expected the returns from it to sponsor an all-India tour, beginning with a six-month trip through Roopkund hills in Uttarakhand. He will be living off $15 daily payouts from that investment.

“I invested in bitcoin when one coin was worth Rs 28,000, one-tenth of what it is today,” the Mumbai-based Gawde said. On August 30, one bitcoin was worth Rs 2,91,822its value skyrocketing since Donald Trump’s election as the US president in November and spawning an industry of auxiliary services for people rushing in to find gold in the virtual currency.

Bitcoin is a decentralised, paperless cryptocurrency invented by Satoshi Nakamoto, an alias for an anonymous programmer in 2009.

Unlike traditional currencies, crypto coins are not produced by a central authority like a bank or a consortium. It is a mathematical formula. These coins are produced by massively souped-up computers, called ‘mining rigs’, that solve complex math problems to obtain these virtual currencies. A ledger records all the transactions. A typical crypto currency mining rig runs round-the-clock, its performance depending on the high-end graphic cards and cooling systems used not an inexpensive proposition at an average Rs 3 lakh a machine. Even so, several online vendors as well as individuals are investing in these machines to mine crypto currencies.

A Chandigarh-based online vendor, who calls himself Letsmine, is one such ‘miner.’ He has built and sold 90 mining rigs through eBay at a base price of Rs 3,00,000 each.

Letsmine has been selling rigs for the past one year, assuring customers that the investment can be recovered in 8-9 months.

Not just building rigs, “we even host rig of others at a monthly cost. We will install your rig at our location in a temperature-controlled room and charge monthly,” said a spokesperson for Delhi-based Gadgets Deal India, which also sells on eBay.

Bitcoins saw explosive growth in India after Prime Minister Narendra Modi recalled high-denomination banknotes in November. Indian bitcoin exchanges have received a lot of traction in the past few months with more than 1 million active crypto-currency users.

“We recently crossed 100,000 active users on our platform, and are adding 10,000-20,000 users a month,” said Hesham Rehman, chief executive of bitcoin exchange Bitxoxo.

The rise in popularity of cryptocurrencies has enabled techies like Saket Nalegaonkar to build services around it. The 28-year-old Internet-of-Things engineer spends his spare time travelling around the country helping enthusiasts set up rigs for mining.

“I saw an opportunity in building rigs,” he said. “So far, I have helped more than 10 people in India build rigs and charge them on a permonth basis for upgrade and maintenance.” Kumar Badgujar, a management graduate, had other ideas for mining crypto-currencies. The 26-year-old rewired five computers in his college lab, making them work in tandem to mine ethereum (another crypto-currency that is on the rise).

“Assimilate the computing powers of five personal computers helps me mine faster,” said Badgujar, who has been clustered mining the past four months to produce both bitcoins and ethereum.

CLOUD MINING Some companies Hashflare, Genesis and Bitconnect among them have even set up so-called farms to collectively mine crypto currencies for individuals unable to assemble their own machines, for a fee. “Cloud-mining is the in-thing now,” said Gwade, who runs a bitcoin support website, bitcoinsupport24* 7, that receives about 10 email enquiries a day related to investments in bitcoin.

Individuals can now spend as low as $2 to start with for mining, and these companies assure fixed returns every month. “These give out fixed payouts… which is what I am going to spend during my trip,” Gawde said.

Given the massive surge in the value of crypto-currencies, real-estate developers, too, are seeking a piece of the action.

Bengaluru-based Nalegaonkar, who helps set up rigs for mining, has been contracted by real estate developers to convert entire floors into mining farms. In the last two months, “I have gotten contracts from two real estate developers to create in-house mining farms in Indore and New Delhi,” he said.

The lack of regulations, though, has cast a shadow over the bitcoin universe.

“Over the last six months, the (Reserve Bank of India) has issued several statements warning consumers about financial and regulatory risks associated with virtual currencies,” said Kannan Sivasubramanian, co-chief of research and advisory firm Aranca.

“Considering the rise in usage of such currencies across the world and in India, the government should look at putting a policy framework in place immediately.”

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Here is how Indians are minting a fortune in bitcoins – Economic Times

Bitcoin Foundation seeks legal protection from US currency regulation – The Independent

LlewClaasen,Executive Director of The Bitcoin Foundation, has announcedthat the organisationhas retained legal counsel to advisein its effort to fight against increasing federal and state regulation in the US. The foundation believes that increases in regulation are attempts to control and stifle the adoption and use of so-called virtual currencies such as Bitcoin.

In a press release, Claasen claimed that the organisations first priority is to attempt to build a more open and diverse dialogue with the USCongress. The effort is a response to the planned introduction of a bill thataims to bring Bitcoin into the scope of USmoney-laundering enforcement agencies.

Bitcoin is a virtual currency or “cryptocurrency” thatwas created by an unknown programmer (or group of programmers) under the name of Satoshi Nakamoto in October 2008. Unlike traditional forms of currency, Bitcoin and other cryptocurrencies use encryption techniques to regulate the generation of currency and thetransfer of funds. This means that the currency is decentralised so no single institution controls the Bitcoin network. At the time of writing, one Bitcoin is approximately worth 3,365.27.

Because of encryption, the use of Bitcoin can remain anonymous. Though receipts of transactions are stored in “blockchains”, users of the currency do not have their names, address, or other forms of personal information attached to their Bitcoin profiles. While some high street shops and bars accept the currency, many people associate the use of Bitcoin with the buying and selling of illicit services on the dark web.

Just last month two of the dark webs largest markets “Alphabay” and “Hansa”were seized in a joint effort from European police, Interpol, the FBI and the DEA. The websites users bought and sold drugs and chemicals from one another using Bitcoin to protect their identities.

US Attorney General Jeff Sessions said in response that, This is likely one of the most important criminal investigations of the year. He also claimed that The dark net is not a place to hide. We will find you.

The Bitcoin Foundation is, however, more optimistic about the future and use of the virtual currency. Their vision is to turn Bitcoin into a globally accepted method of exchanging and storing value which will operate without the need for third parties like banks.

In the release, Claasen said that, the increased regulatory push by federal and state authorities, if it continues, is sure to threaten the existence of the fintech[financial technology] industry nationwide.

MrClaasen added: Just as the fintech industrys use of cryptocurrency was stifled in New York by the adoption of the so-called Bitlicence, it is highly likely that increased regulatory and legislative burdens [placed upon Bitcoin] will have a similar negative impact.

The Bitcoin Foundation was founded as a non-profit in September 2012. The body’smission statement is to ensure that every human has the right to privacy in transactions that involve no harm to others and the right to economic participation without a bank account or credit history.

In their efforts to defend Bitcoin, The Bitcoin Foundation has retained the Ciric Law Firm, PLLC for counsel. The firm is currently challenging the US Department of Financial Services Virtual Currency regulation (Part 200 of Chapter 1 of Title 23 of the New York Codes, Rules and Regulations), which was promulgated in 2015 and is also known as the New York “Bitlicence”.

Speaking to The Independent, MrClaasen said, state and federal legislation creates hurdles for innovation, well in advance of knowing what the impact of the technology is going to be or what it enables.

[The Bitcoin Foundations] view is that it is not yet clear what bitcoin and cryptocurrencies are. But by regulating the technology prematurely, you put it into a box it might not fit into later on. Its not that we dont believe theres a time and place to regulate Bitcoin, were just saying that its too early and that regulation will just do harm to very innovative businesses and technologies.

When questioned on Bitcoins potential to be used for fraud, money laundering and the buying and selling of illicit goods, MrClaasen said, Reports by the European commission in June specifically found that there is very little of that activity, particularly there is very little terrorist funding and money laundering.

Claasen added: Bitcoin is too hard for criminals to use at the moment. Its easier for a criminal to use the United States dollar.

Alongside being the foundation’s Executive Director, MrClaasen is a member of the international marketing advisory boards the CMO Council Advisory Board for Africa, the Customer Experience Boardand The Forum to Advance the Mobile Experience. He is also the co-founder of Clicks2Customers, a digital marketing agency with annual billings of over 80 billion.

Claasen made it clear that Bitcoin Foundation, doesnt want to break the system, but it is concerned that the system is already broken.

Bitcoin has the potential to be a store of value thats outside the control of central banks. In the future, we would like to see more adoption of Bitcoin. Its not going to be the only currency, and it wont replace the current system, but among other options its a useful case for the future.

The venture capitalist from Cape Town claims that Bitcoin is not currently at a stage where there are concerns that it will interfere with global monetary policy.

Its immature technology, he claims. There is a perception that it allows unlimited transfer of value, but it can only do three or four transfers a second. The network cannot handle larger transactions.

A key reason Claasen opposes regulation is because, it is not possible for governments to take the view they want to regulate Bitcoin. Its important to understand that a decentralised currency means one which is not under control by anybody.

I understand that regulators need to protect the currency and people from risk. [In the future] regulators will probably regulate at the end points of the cryptocurrency network. I get that, its inevitable. Around the world the view is the same. But governments and financial services are already struggling, as in Venezuela, and people need an alternative way.

Llew Claasen concluded that,Aside from other things, [Bitcoin] is a positive technology. It is not one that seeks to destroy or disrupt. Its a pity when regulators view it as something that is dangerous.

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Bitcoin Foundation seeks legal protection from US currency regulation – The Independent

Why Miners Are Mining Bitcoin Cash and Losing Money Doing It – CoinDesk

Jimmy Song is a bitcoin developer and principal architect at blockchain technology startup Paxos.

In this opinion piece, Song discusses mining patternson the bitcoin cash blockchain, theorizing on what they might indicate about the incentives powering the new cryptocurrency.

Over the weekend, the bitcoin cash blockchain experienced a notable technical change.

Like the bitcoin blockchain from which it forked, bitcoin cash is hard-wired to adjusthow hard it is for miners to claim its rewards, and on Saturday, it saw such a change. As a result, bitcoin cash was made 300% more difficult to mine.

This, in turn, caused the profitability of the coin to decrease dramatically. Many miners left for bitcoin, and for about 10 hours only a few blocks were found.

As a result, emergency difficulty adjustments (a technical mechanism unique to bitcoin cash) were triggered, causing the difficulty to drop enough for miners to begin switching back.

What’s interesting, however, is that at the time, bitcoin cash was stillless profitable to mine than bitcoin by about 20%. Still, many miners, including those using pools like BTC.Top, ViaBTC and AntPool continued dedicating computing power to the blockchain.

This means these miners were likely giving up profit that they could have earned had they been mining bitcoin.So what gives? And why are miners mining at a loss?

This is not an easy question to answer and my analysis here is speculative. But, here are some possibilities:

Miners may be committed to making the new cryptocurrency work, as they may have now accrued a large bitcoin cash position.

Armed with this vested interest, they may believe slow blocks will cause bitcoin cash to tank, so they may be mining to keep the network working smoothly.

The argument against this is that during the 10-hour window after the non-emergency difficulty adjustment, many of the same miners left. If consistent blocks were the major concern, there should have been more mining power on bitcoin during that interval.

The miners mining now may be thinking that the bitcoin cash price will increase in the near future to make mining worthwhile. A 3040percent increase in the bitcoin price relative to bitcoin would certainly make their mining profitable, and they may be waiting until then to sell.

These miners may have insider information about a large buy order or may be just hoping for larger fluctuations of bitcoin cash price.

Another theory is that there may be bitcoin cash supporters that are subsidizing mining in some way, behind the scenes.

This could be something like an over-the-counter market for bitcoin cash where buyers are paying a higher price than the exchanges to incentivize mining. If the buyers demand freshly minted bitcoin cash, this would effectively make it so miners were the only supply that could satisfy this particular demand.

Similarly, bitcoin cash supporters could simply be paying pools to point hash power the blockchain network.

Ultimately, there are now more questions than answers.

We don’t really know why miners are mining bitcoin cash instead of bitcoin. But, we know that at the very least, they aren’t making as much money as they could, and this means these miners are paying some opportunity cost in order to mine bitcoin cash.

Gold panning image via Shutterstock

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Why Miners Are Mining Bitcoin Cash and Losing Money Doing It – CoinDesk