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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at WeUseCoins.com.

Bitcoin Latest News

Smart Regulation Could Make Russia Next Major Bitcoin Market - CoinTelegraph


CoinTelegraph

Smart Regulation Could Make Russia Next Major Bitcoin Market
CoinTelegraph
Several analysts have speculated that the launch of CryptoRuble would likely lead to a nationwide ban on Bitcoin and other cryptocurrencies. However, according to Putin, that is not the case and the Russian central bank has plans to regulate Bitcoin ...
Battle against Bitcoin: Russia launches own cryptocurrency dubbed the CryptorubleExpress.co.uk
Putin Orders the Issue of Russia's National Cryptocurrency – the CryptorubleBitcoin News (press release)

all 72 news articles »

Posted on 17 October 2017 | 6:52 pm

'Red Lyra' No More: Bank Blockchain Group Rebrands

Alastria, formerly known as Red Lyra, is a Spanish blockchain consortium that has grown to more than 70 members since its launch in May.

Posted on 17 October 2017 | 4:05 pm

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Ether Price Analysis: Eve and Adam Could Be Turning Back the Bulls

Ether Price Analysis

Since bottoming out around $200, ether has spent several weeks bouncing back and forth inside an ascending channel:

Figure_1 (15).JPGFigure 1: ETH-USD, 4-Hour Candles, Ascending Channel

For the last month and a half, ether’s trend has been contained within the bounds of this ascending channel, where it has continued its bullish rally. However, today (as of the time of this article) it is starting to make moves to aggressively test the lower boundary. Specifically, as ether tests this channel, it is forming a potential reversal pattern called an Eve-and-Adam Double Top.

Figure_2 (12).JPGFigure 2: ETH-USD, 1-Hour Candles, Eve-and-Adam Double Top

At the time of this article, ether is attempting to break the neckline (the pink dashed line) of the massive reversal pattern. Should ether break this neckline, the measured move from this pattern is a $30 move downward, which would ultimately shove ether outside the bullish ascending channel it has been trending within. The price target of the Double Top breakout would bring the ETH-USD price into the upper $200s.

On a macro scale, ether has support along the following Fibonacci levels:

Figure_3 (12).JPGFigure 3: ETH-USD, 4-Hour Candles, Fibonacci Levels

Should the ascending channel break, the above Fibonacci levels will provide support and will need to be tested in order to prove a bearish continuation. As of the time of this article, the Double Top mentioned in Figure 2 is sitting right on the 23 percent retracement values where it is making attempts at breaking it. There is strong support at these values, so if ether can break and hold below $315, it will send a strong bearish signal to the market.

Should the Double Top complete, we can expect a test of the 38 percent retracement values following the break of the ascending channel. At this time, the 4-hour MACD is showing strong bearish momentum on a macro scale, and the market is picking up sell volume.

Summary:

  1. For weeks, ether has been trending within an ascending channel.

  2. Ether is currently in the process of making a strong test of the ascending channel via an Eve-and-Adam Double Top reversal pattern.

  3. If the Double Top breaks downward, we can expect a break of the multi-week bullish channel and a test of the 38 percent Fibonacci Retracement values.

Trading and investing in digital assets like bitcoin, bitcoin cash and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.


The post Ether Price Analysis: Eve and Adam Could Be Turning Back the Bulls appeared first on Bitcoin Magazine.

Posted on 17 October 2017 | 3:45 pm

Broadridge Pilots Blockchain for Repo Trades With French Banks

The investor services firm worked with Natixis and Societe Generale on the pilot, which was based on the Hyperledger Fabric codebase.

Posted on 17 October 2017 | 3:00 pm

This family bet it all on bitcoin - CNBC


CNBC

This family bet it all on bitcoin
CNBC
Didi Taihuttu, his wife, three kids and their cat bet all they have on bitcoin. The Dutch family of five is in the process of selling pretty much everything they own — from their 2,500-square-foot house, to their shoes – and trading it in for the ...

and more »

Posted on 17 October 2017 | 1:34 pm

UBS Tells Clients How to Place Bets on Blockchain Tech

A new report from UBS says that firms and early adopters should be considered by investors hoping to ride the "blockchain wave"

Posted on 17 October 2017 | 1:30 pm

Web Creator Tim Berners-Lee: Blockchain Builders Should Beware Misuse

Sir Tim Berners-Lee encouraged the blockchain space to think about the unintended consequences of its actions in a talk at Ripple's Swell conference.

Posted on 17 October 2017 | 12:40 pm

Brazil Central Bank Chief Compares Bitcoin to Pyramid Scheme - CoinDesk


CoinDesk

Brazil Central Bank Chief Compares Bitcoin to Pyramid Scheme
CoinDesk
The head of Brazil's central bank took a harsh position toward bitcoin earlier this week, comparing the cryptocurrency to a pyramid scheme. According to RttNews, central bank president Ilan Goldfajn was dismissive of recent price appreciation in the ...
President Of Brazilian Central Bank Berates BitcoinETHNews

all 3 news articles »

Posted on 17 October 2017 | 11:50 am

Brazil Central Bank Chief Compares Bitcoin to Pyramid Scheme

The president of Brazil's central bank compared bitcoin to a financial scam, according to newly published statements.

Posted on 17 October 2017 | 11:45 am

CFTC Aligns With SEC: ICO Tokens Can Be Commodities

The Commodity Futures Trading Commission (CFTC) has published a new primer on cryptocurrencies, which includes statements about ICOs.

Posted on 17 October 2017 | 10:45 am

Swiss City of Zug Backs Blockchain Asset Trade Group

The government of the Canton of Zug is supporting a newly launched blockchain trade group

Posted on 17 October 2017 | 10:00 am

GoldMint and the Future of the Gold Trade

GoldMint Header

As a precious metal, gold is often associated with wealth, prestige and power. And as a commodity it has long been considered a prized asset for scores of investors throughout the world.

Beginning with bitcoin in 2009, cryptocurrencies have also seen their prominence rise due to some of the qualities that they share with gold, the most prominent of which is their scarcity.

One of the big issues that has continued to hamper gold as a physical asset is that it can often be difficult to transfer from one place to another. Moreover, the managing and handling of gold can be quite logistically challenging and laborious.

With the emergence of today’s digital age, a startup called GoldMint is seeking to alter this trend with a new means of exchange for physical gold, with transactions occurring over a blockchain-based platform.

This gold-based venture aims to assist investors and traders in managing volatility risks and gaining competitive commissions on commodities sold via GoldMint to financial institutions, pawn shops, and other business and individual stakeholders.

GoldMint’s platform will leverage the private and individual gold trading market, including potentially the management of larger physical stocks such as those in central banks. It will also deliver an electronic payment solution tethered to physical gold, as well as a gold-backed peer-to-peer lending system.

The GoldMint ecosystem is fueled by two types of tokens, GOLD and MNT.

The GOLD cryptoasset is an investment tool that is 100 percent backed by physical gold and/or an exchange-traded fund (ETF). One GOLD token represents one ounce of gold on the London Bullion Market Association (LBMA).

MNT  is GoldMint’s native cryptocurrency, which is used to confirm GOLD cryptoasset transactions. For GoldMint miners, the amount of MNTs reflects how many assignments, or transaction blocks, they can accept.

Fostering Digital Gold Trading

There are two options for trading GOLD for fiat or cryptocurrencies. First, there is a method for seeking a GoldMint-guaranteed buyback. And second, a loan can be requested. For either option, the process is as follows:

      Through the use of a special app which is not yet available, GOLD can be transferred as collateral to a designated GoldMint account.

      GoldMint utilizes the current price of gold, as set by the LBMA, to fix the rate of a loan.

      GoldMint requires the customer to undergo its know-your-customer (KYC) process as well as consent to GoldMint’s loan terms to receive the loan. Various repayment options for the loan amount and the means of repaying it are then offered.

      If a customer defaults on repayment, their GOLD cryptoassets are transferred to GoldMint.

GoldMint also has a process for converting gold into GOLD tokens and reconverting these tokens into gold for cross-border passages. This is designed to alleviate the hassles associated with carrying gold from one country to another, often resulting in untold expense and aggravation. By converting gold into GOLD, this hassle can not only be avoided, but a person can retrieve 100 percent of the value of their gold at the end of their travels.

“Custody Bot” is GoldMint’s decentralized storage unit, which computationally identifies and stores gold jewelry, small ingots (up to 100 grams) and coins. In this case, it functions as a DApp, a decentralized application that runs rapidly and efficiently without the need for a third-party intermediary to control it. Through the use of cutting-edge technology, Custody Bot inspects and assesses the value of incoming gold to ensure its purity and quality.

GoldMint ICO Accelerates Ahead

On September 20, GoldMint launched its initial coin offering (ICO), allowing users to send bitcoin or ether and receive MNTP (MNT pre-launch) tokens, issued on the Ethereum blockchain at a price of $7 per token.

The value of these tokens is expected to grow, because MNT is limited in its supply and is used in the Proof-of-Stake (PoS) consensus algorithm. Participation in the GoldMint crowdsale involves more than the purchase of cryptocurrencies. It involves a stake in the consensus algorithm that will be utilized by the GoldMint blockchain post-launch.

Owning MNT allows users to achieve 75 percent from commissions earned when transactions are validated through the GoldMint blockchain. The number of MNT tokens owned determines the number of transactions that can be validated.

 

The post GoldMint and the Future of the Gold Trade appeared first on Bitcoin Magazine.

Posted on 17 October 2017 | 9:06 am

Two Factors Influencing Bitcoin's Price Right Now - Investopedia (blog)


Investopedia (blog)

Two Factors Influencing Bitcoin's Price Right Now
Investopedia (blog)
It has been a year of highs for bitcoin and cryptocurrencies. After surpassing the $5,000 mark, bitcoin is poised to surpass $6,000 next. (See also: Bitcoin Prices Hit Record High.) As of this writing, bitcoin is trading at $5,592.56. Cumulatively, it ...
Tell us what you think: Where does bitcoin go from here?CNBC
TD Bank Prevents Customers From Buying Bitcoin and Other CryptocurrenciesThe Merkle
What If You Could Have Bitcoin Without The Problems Of A Blockchain? IOTA May Be The Solution.Forbes
CryptoCoinsNews -TheStreet.com -CoinTelegraph -The Independent
all 94 news articles »

Posted on 17 October 2017 | 8:32 am

JPMorgan Integrates Zcash Privacy Tech Into Quorum Blockchain

The developer of zcash has announced the first integration of its zero-knowledge privacy tech into JPMorgan's enterprise grade Quorum blockchain.

Posted on 17 October 2017 | 7:00 am

Top Secret? Microsoft Opens Door to Government Blockchain Use

Government secrets on a blockchain? Following recent security upgrades, Microsoft has launched a platform specifically for that purpose.

Posted on 17 October 2017 | 6:00 am

Downplaying 'Digital Assets': Blockchain Reigns at Ripple's Swell Event

An upstart financial conference yesterday saw discussion of digital assets – though so-called "unregulated" cryptocurrencies were the butt of barbs.

Posted on 17 October 2017 | 5:30 am

Pump or Progress? Bitcoin Cash Nears $400 on Korea Trading Surge

Bitcoin cash saw a big boost today, spurred like many recent rallies by strong volumes from South Korea's local exchanges.

Posted on 17 October 2017 | 5:07 am

Former Bitmain Chip Designer Seeks to Revoke Mining Giant's Patent

A former employee is engaged in a tit-for-tat battle with mining giant Bitmain over the alleged misuse of intellectual property.

Posted on 17 October 2017 | 3:00 am

The New Classic? Protesters Are Already Plotting Alternative Ethereums

An Ethereum hard fork wouldn't be complete without a protest movement or two. But what do the latest rebels want?

Posted on 17 October 2017 | 2:00 am

Sibos Highlights Swift's Complicated Relationship With Blockchain

Day one of Swift's annual Sibos conference found the interbank messaging platform under pressure from the rising tide of cryptocurrencies.

Posted on 16 October 2017 | 4:10 pm

An Australian University Is Giving Out Ether to Students

The University of New South Wales' consumer loyalty research effort will pay students in ether for making purchases at on-campus retailers.

Posted on 16 October 2017 | 2:45 pm

Bank of America Report: Bitcoin's True Value 'Impossible to Assess'

A new research note from Bank of America explores the investment implications of cryptocurrencies.

Posted on 16 October 2017 | 1:30 pm

Bernanke at Ripple Event: Blockchain Has 'Obvious' Benefits in Payments

Former Fed chairman Ben Bernanke said blockchain technology has the opportunity to innovate in payments during Ripple's Swell conference.

Posted on 16 October 2017 | 12:30 pm

Ethereum's Gavin Wood Is Calling for More 'Conservative' Hard Forks

One of the founders of ethereum is calling for the network to learn its lesson from Monday's fork, arguing better upgrade processes are needed.

Posted on 16 October 2017 | 10:45 am

Bitcoin is finally buying into US real estate - CNBC.com - CNBC


CNBC

Bitcoin is finally buying into US real estate - CNBC.com
CNBC
It is already in retail and restaurants; it was only a matter of time before bitcoin took on real estate.

and more »

Posted on 16 October 2017 | 8:23 am

Yes, Bitcoin Can Do Smart Contracts and Particl Demonstrates How

Particl Thumb 3

The Bitcoin blockchain is not known for its ability to enable smart contracts. In fact, most developers creating smart contracts use a different blockchain, like Ethereum.

 

But the truth is that the Bitcoin protocol can be used to create smart contracts. Particl.io, the blockchain eCommerce platform, is doing just that by using Bitcoin-based smart contracts to manage funds in their trustless escrow: Mutually Assured Destruction (MAD) escrow.

 

For Particl, Bitcoin provides the ideal mix of smart contract functionality — enough to make smart contracts easy to implement but without the security and privacy risks of a more complicated platform like Ethereum.

Smart Contracts Overview

A smart contract is an agreement that can be enforced through a blockchain. Rather than relying on trust or a legal framework to ensure that each party that enters into a contract will adhere to its terms, you can use the blockchain to create a contract that is automatically enforced, between two people, in a decentralized fashion.

 

Ethereum has become the most popular blockchain for creating smart contracts. One of the major design goals of the Ethereum platform was to support smart contracts. From the start, this set Ethereum apart from Bitcoin, which was created first and foremost as a digital currency platform.

Smart Contracts on Bitcoin Codebase

As the Bitcoin protocol has evolved, it has gained support for smart contracts. Smart contract functionality is not as programmable and extensible on Bitcoin as it is on Ethereum. However, using features added to Bitcoin through improvement proposals, certain smart contract functionality can be achieved through Bitcoin scripting.

 

For Particl, the most important smart contract feature in Bitcoin is the OP_CHECKLOCKTIMEVERIFY opcode, which was introduced by Peter Todd as Bitcoin Improvement Proposal (BIP) 65. The opcode makes it possible to write scripts that prevent funds in a multi-signature wallet from being spent until a certain signature pattern is implemented or a certain amount of time passes.

Particl, Smart Contracts and MAD Escrow

MAD escrow is a technique that effectively prevents fraud in a transaction without requiring the oversight of a third party. In a MAD escrow contract, a buyer and seller both place funds into escrow. The seller starts by depositing an amount they want the buyer to match to symbolize a virtual handshake. This could be between 0 and 100 percent of the item’s purchase price. The buyer then deposits an amount equal to the handshake amount plus the price of the item they are buying. The escrowed funds are not released to anyone until both parties confirm that the transaction has been completed satisfactorily. The technique prevents either party from profiting through cheating in a transaction.

 

Particl uses the BIP 65 opcode to enable MAD escrow contracts by locking funds in a multi-signature wallet until all of the parties sign off on the transaction. With this approach, buyers and sellers on Particl’s ecommerce platform can operate without worrying about fraud or paying unnecessary fees.

 

They also don’t have to sacrifice privacy because no third party is involved in the transaction. Furthermore, and perhaps most significantly, because there is only basic scripting involved, security concerns are minimal.

 

Particl’s approach to MAD escrow smart contracts is arguably better than building smart contracts on a platform like Ethereum. While Ethereum provides more extensible support for smart contracts, that flexibility comes with a higher risk of security and privacy threats. The more code that goes into a smart contract, the greater the risk of introducing a vulnerability that could enable an intrusion.

 

Ethereum might be a strong foundation for writing very complex smart contracts, or ones in which security and privacy are not priorities, but Bitcoin provides a simpler and more reliable scripting framework for the private escrows that Particl requires.

Contributing to Bitcoin’s Future

 

Particl’s choice of Bitcoin as the backbone for its smart contracts is also a reflection of the team’s efforts to build a completely private platform on top of the Bitcoin codebase, arguably the most secure, battle tested and contributed to protocol on the market.

 

There are many dozens of Bitcoin-based blockchain projects out there, but most are simply building cryptocurrencies forked from Bitcoin. They’re not taking advantage of Bitcoin’s potential to create the foundation for a completely decentralized platform that supports a multitude of DApps and programmable functionality.

 

In this sense, Particl is helping to ensure that Bitcoin’s future will evolve more than just creating another cryptocurrency. Privacy enhancements Particl has already implemented onto the latest Bitcoin codebase such as Confidential Transactions and RingCT can just as easily be one day adopted upstream to further harden Bitcoin.

 

The post Yes, Bitcoin Can Do Smart Contracts and Particl Demonstrates How appeared first on Bitcoin Magazine.

Posted on 13 October 2017 | 9:18 am

A Bitcoin Beginner’s Guide to Surviving the Bgold and SegWit2x Forks

coin-split2xgold.jpg

This is an updated version of A Bitcoin Beginner's Guide to Surviving a Coin-Split specifically addressing issues associated with the upcoming Bitcoin Gold and SegWit2x forks.

It looks as if Bitcoin will experience at least two more “coin-splits” soon, which (more accurately) will result in the creation of new coins. On October 25, Bitcoin Gold (Bgold) will split off from Bitcoin to create an ASIC-resistant cryptocurrency. A few weeks later, a significant group of Bitcoin companies wants to hard fork according to the SegWit2x plan as defined in the “New York Agreement” (NYA), which will probably result in yet another new coin.

If this all plays out, there could be three distinct blockchains and three types of coins within about a month of publication of this article. One blockchain would follow the current Bitcoin protocol; for the purpose of this article, that coin will be referred to as “BTC.” The second blockchain will follow the Bgold protocol; in this article, that coin will be referred to as “BTG.” The third blockchain will follow the SegWit2x protocol; that coin will be referred to as “B2X.”

The good news is that each BTC will effectively be copied onto both the Bgold and the SegWit2x blockchains. If you hold Bitcoin private keys at the time of the forks, you should be able to access your BTG and B2X coins as well.

The bad news is that such forks can be somewhat messy and risky. If you’re not careful, it’s easy to lose your BTC or B2X, and maybe your BTG.

This guide will provide you with the basics to keep your funds safe during the upcoming forks and help to ensure you make it to the end of next month with your BTC, BTG and B2X intact.

Author’s note: If you want to play the markets as soon as possible and you are fine with taking risks, and/or you really know what you are doing, this article is probably not for you: it's a beginner's guide. Also please note that everything in this article is just advise, based on our best understanding of the situation. Much is still uncertain and subject to change.

Before the Forks (That’s Now)

First of all, be aware that coin-splits can be somewhat risky — especially controversial ones like the SegWit2x fork. While it seems unlikely for now, there is a chance some kind of cyber-battle will break out, perhaps even escalating to the point where all exchange rates drop sharply. If you want to make sure not to be caught in any crossfire, it’s best to not hold more value in bitcoin than you are willing to lose.

If you do decide to hold on to your bitcoin, make sure you are prepared before October 25, and preferably sooner. This is the day the BTG equivalent will be distributed to all BTC balances. B2X will follow a couple of weeks later, around mid-November (the exact date is not yet known).

If you are storing your bitcoins on an exchange, in a custodial service like Coinbase, Circle or Xapo, or on any other service that holds your private keys for you, you may or may not eventually receive BTC, BTG and B2X. This is not yet very clear, and if you want to keep storing your coins on such services, you should at least see if your exchange or custodial service of choice has made an official statement on the forks, perhaps on their company blog. If not, contact them to ask.

That said, if you want to be absolutely sure to be able to access your BTC, BTG and B2X, you should really control your private keys yourself. That way you don’t need to rely on any third party.

If you’re currently using a custodial service to store your bitcoins, you need to create your own wallet instead. Send or withdraw your bitcoins from the custodial service to this new wallet; this wallet then holds your private keys.

What kind of wallet you want to use is up to you. For this specific purpose it’s best to use a wallet that lets you easily access your private keys directly. (Some wallets make this easier for you than others.) But technically, any wallet that lets you control your private keys should be fine.

With that in mind, here are some basic solutions:

If you don’t care about transacting with BTC, BTG or B2X anytime soon, and really just want to keep all of them as long-term investments, a paper wallet is a good option. It should be noted, however, that this option is only really secure if you follow strict security precautions, which you can find here.

Regular wallets are about as secure as your computer (or phone). Since most computers and phones are not all that secure, these are not ideal for large amounts. With that in mind, all mobile and desktop wallets listed on bitcoin.org will store your private keys. Electrum is a good pick if you want easy access to your private keys directly.

A full-node wallet like Bitcoin Core or Bitcoin Knots is also a good pick, as it’s not too hard to access your private keys with these wallets either. As a bonus, these wallets give you a little extra security on the Bitcoin blockchain (shortly) after the SegWit2X fork, because these wallets enforce all of Bitcoin's current protocol rules. However, these types of wallets are more resource-intensive to use, compared to most other wallets.

Another option is to get a hardware wallet. Any of the hardware wallets listed on bitcoin.org will keep your private keys secure. However, these wallets typically don’t let you easily access your private keys directly. It’s not clear that all these wallets will let you access BTG in particular, and not all of them have given a guarantee for B2X either. So while these wallets will safely store your private keys, it could be a bit more tricky (but probably not impossible) to get ahold of all three coins later.

In any case: Be sure to make backups of your keys! Most wallets require you to do this when installing; don’t skip this step.

Shortly After the Bitcoin Gold Fork (and Before the SegWit2x Fork)

The Bitcoin Gold fork is sometimes referred to as a “friendly fork.” This is mainly because it has no intention of claiming to be the “real” Bitcoin, and it plans to implement strong replay protection.

In short, this replay protection means that you won’t accidentally send your BTG when you mean to send BTC (or the other way around). So even after you’ve spent your BTC, you can still access your BTG.

If you want to transact with your BTC before the SegWit2x fork, it could come in handy later to write down which of your Bitcoin addresses and/or private keys had BTG attributed to them — in other words, which of your Bitcoin addresses had any BTC on them at the time of the Bgold fork on October 25th.

But there’s no rush to actually access your BTG. In fact, it will probably take at least a week before this is even possible, and maybe longer. It’s therefore probably best to ignore this fork until after the SegWit2x fork. That way you’ll only need to go through the process of claiming all your new coins once.

After the SegWit2x Fork

Unfortunately, the SegWit2x fork could play out a bit more messily.

For one, several of the companies backing SegWit2x consider this fork an upgrade of Bitcoin itself. They therefore currently have no intention to adopt a new name for it. Some of them will call or list (what this article refers to as) SegWit2x and B2X, as "Bitcoin" and "BTC". Meanwhile, they might call or list (what this article refers to as) BTC as "B1X", or another ticker.

And of course, all coins will command their own exchange rates. So as different exchanges list a different coin as "BTC", the price for "BTC" could differ vastly across exchanges: they're actually different coins! You should therefore not buy or sell any coin listed as "BTC", unless and until you are very sure which coin your exchange lists as "BTC".

Additionally, it currently seems SegWit2x will fork without strong replay protection. This means that post-fork, BTC transactions and B2X transactions will look identical and could both be valid on both blockchains.

Therefore, spending coins on the BTC blockchain could make you accidentally spend the “equivalent” B2X on the SegWit2x blockchain, and the other way around. Instead of paying someone only BTC, you may unintentionally send B2X as well — or vice versa. The BTCs and B2Xs are initially “stuck together.”

To be on the safe side, you should probably not spend an coins after the SegWit2x fork at all. As explained below, you'll first need to "split" your coins.

Furthermore, some light wallets (mobile wallets) will display whichever blockchain has more hash power attributed to it. This means that the balance on your screen could be a BTC balance or a B2X balance, and there will be no way to tell the difference. (Even if the wallet says it’s a BTC balance!)

To be on the safe side, you should not accept any payments with light wallets, since you could receive B2X when you’re expecting BTC, or the other way around. At the very least, you should make absolutely sure that your wallet displays what you think it displays. (Wallets like Electrum and GreenAddress should display BTC as "BTC" regardless of hashpower distribution.) If you use a full-node wallet like Bitcoin Core or Bitcoin Knots and you want to accept BTC, that should also be fine.

Depending on how much hash power is dedicated to each chain, it is possible that transactions will confirm (significantly) slower than usual for some time and will require higher fees to confirm at all.

Claiming Your Coins

If all three chains survive, and you control your private keys, you should be able to access BTC, BTG and B2X around mid-November.

Claiming your BTG should be relatively easy, assuming there are wallets available for it. Most likely, you’d simply need to insert your private keys (or private key seed) into such a wallet.

However, there are some security and privacy risks in doing so. It’s too soon to tell exactly what these risks will look like as it’s unclear which wallets will support BTG. (It’s not even certain that any wallets will.) But in general, you’ll first want to move your BTC (and B2X) to new addresses or whole new wallets before accessing your BTG.

Since there’s no need to rush, it’s probably best just to wait on claiming your BTG until there is more clarity. By that time, Bitcoin Magazine will publish a follow-up article explaining how to do this.

Securely accessing and using your B2X (and BTC) might prove a bit more tricky, mostly because of the risk of replay attacks. This requires that the BTC and B2X are split from each other, which will be possible but could prove a bit complex.

Some wallets might split the coins for you, but it's too soon to know which wallets will. Additionally, exchanges will likely set up coin-splitting services and take care of most of this complexity behind the screens. You’d then just need to send your BTC or B2X to an exchange, and the exchange will credit your account with both BTC and B2X. (They should even replay the transaction for you to make sure they indeed receive both your coins and can split them for you.) There may also be other solutions to split your coins, but that remains to be seen.

By mid-November, there will probably also be dedicated wallets for both BTC and B2X. Of course, you may need to upgrade your existing wallet or download a new wallet. This also remains to be seen.

Further specifics on what to do after the forks will be announced on Bitcoin Magazine once the forks have occurred and we have a better understanding of the post-fork situation.

So, to Recap ...

1. It’s best to control your private keys yourself before October 25, and hold on to them until after the SegWit2x fork, mid-November.

2. To be on the safe side, avoid buying or selling any "BTC" and don't make any transactions shortly after the SegWit2x fork.

3. As the dust settles after the SegWit2x fork, access and split your coins. (How to do this will be explained on Bitcoin Magazine once there is more clarity.)

This article was last updated on October 14th. This article will be updated as the news develops.

The post A Bitcoin Beginner’s Guide to Surviving the Bgold and SegWit2x Forks appeared first on Bitcoin Magazine.

Posted on 13 October 2017 | 7:22 am

Op Ed: European Blockchain Business is Booming, Even Among Regulatory Concerns

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As cryptocurrencies become increasingly mainstream, governments worldwide are exploring methods for regulating blockchain projects and their methods of funding. While China and South Korea have recently cracked down on ICOs and cryptocurrency exchanges, some nations in the European Economic Area (EEA) have become among the world’s most progressive in embracing this nascent technology. Still, the lack of standards in regulation will prove to be a challenge as blockchain startups seek to develop and mature.Since consensus is easier to realize with a smaller representative body, smaller autonomous territories are more fit to effect rapid change in promoting the establishment of crypto and blockchain companies in their legal jurisdictions. For example, the cantonal laws in Switzerland allow for increased agility when introducing amendments, disclosure and transparency.

Switzerland has emerged as a European hub for cryptocurrency and blockchain development. These efforts have been led by the Crypto Valley Association, a nonprofit dedicated to the research and development of blockchain technologies, has also started to develop an ICO Code of Conduct in light of China’s recent ban. This would establish a clear set of guidelines for companies planning token crowdsales and provide clear, yet versatile, rules surrounding their legality. Anchored by the city of Zug, which has been nicknamed “Crypto Valley” after the numerous blockchain startups based there, Switzerland has remained a friendly environment for burgeoning blockchain and digital currency companies.

Estonia has also proven to be open to blockchain development; it recently expressed interest in creating a national cryptocurrency to be used within its borders. If this materialized, it would rank among the most significant milestones for cryptocurrency to date. In addition, members of Finland’s central bank wrote a paper discussing the outstanding characteristics of Bitcoin.

While Bitcoin is the largest cryptocurrency by trading volume, its leading position among digital currencies does not behave like a traditional monopoly in economic terms. In fact, these economists argue that there’s no need for governments to regulate Bitcoin due to its decentralized infrastructure. This is an interesting stance in comparison to other European nations that have expressed their support for the development of government policies surrounding digital currencies.

In contrast, other countries may either feel that the blockchain space is still too underdeveloped to regulate in earnest or that an appropriate level of research has not been provided on the topic. Despite this, blockchain adoption will continue to become more mainstream than one might expect. Deloitte has reported more than 90 central banks are engaged in discussions about blockchain technology, and that 80 percent of those banks are expected to commence digital ledger projects by the end of the year. The International Monetary Fund has even expressed positive sentiment about the potential applications of blockchain and cryptocurrencies. Their willingness to explore this technology means that regulations in the jurisdictions they serve are likely in the near future.

The EEA’s interest in considering blockchain regulation promises that the future will be bright for startups hoping to do business in these countries. However, gathering consensus around a technology that’s still not widely used or applied will prove difficult. It will require these nations to adopt policies that feature the needed flexibility for the long term. Despite these challenges, the countries that are able to do so will reap significant economic rewards.

This is a guest post by David Henderson. The views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

The post Op Ed: European Blockchain Business is Booming, Even Among Regulatory Concerns appeared first on Bitcoin Magazine.

Posted on 12 October 2017 | 1:46 pm

Op Ed: Is There a Future for Banking in a Cryptocurrency-Dominated World?

Op Ed: Is There a Future for Banking in a Cryptocurrency-Dominated World?

What is the future of banking, central banking and financial intermediation in a world in which cryptocurrency is dominant? Let’s speculate a bit, with the proviso that no one can fully anticipate how these markets will evolve.

We can find hints in the speech by IMF head Christine Lagarde at a Bank of England conference in September 2017. She dropped some words that likely sent some chills down a few spines in the audience. She explained that cryptocurrency is not a passing fad but a genuine innovation in money. The only remaining barriers to widespread adoption are technical, fixable and likely to be overcome as the sector develops. This, she argued, has profound implications for the future of financial intermediation and central banks.

“In the future,” she explained, “we might keep minimal balances for payment services on electronic wallets. The remaining balances may be kept in mutual funds, or invested in peer-to-peer lending platforms with an edge in big data and artificial intelligence for automatic credit scoring … Some would argue that this puts a question mark on the fractional banking model we know today, if there are fewer bank deposits and money flows into the economy through new channels.”

She continued to press the point, as it relates directly to the Bank of England and the Federal Reserve.

“How would monetary policy be set in this context? Today’s central banks typically affect asset prices through primary dealers, or big banks, to which they provide liquidity at fixed prices — so-called open-market operations. But if these banks were to become less relevant in the new financial world, and demand for central bank balances were to diminish, could monetary policy transmission remain as effective?”

She put a question mark after that last sentence, but she might as well have made the statement: Monetary policy cannot be effective in this world. In fact, it is worse. It might not matter at all.

It’s an astonishing thing to consider. For more than a century, academics, regulators, captains of finance and high-level government officials have worked to find the perfect monetary policy to stabilize the macroeconomy, provide liquidity for growth without inflation and otherwise become masters of economic planning.

But this entire machinery is premised on two important conditions. First, the government must have the monopoly on money. It has held this for more than a century. Government prints the money, controls its supply, imposes legal tender and regulates against the enforcement of contracts denominated in unofficial currency. And second, most of this money has to be held in some way in the banking system. If you take away both of those, the cause of central banking has a serious problem pursuing any form of monetary planning at all.

That is indeed a very different world. And it is no wonder that the ruling class is concerned.

Today, banks like JPMorgan and Goldman Sachs are experimenting with blockchain technology and cryptoassets. And Lagarde’s own statement might be seen to portend the issuance of a new global cryptocurrency to replace the Special Drawing Right. The core problem of these large-scale attempts to reproduce the power of the distributed ledger is that it might be too little, too late. The model of a new world of banking and credit is already revealing itself.

Would Banks Exist?

How is conventional banking affected by cryptocurrency? Lagarde offers that it raises questions about fractional-reserve banking, the practice of keeping fewer deposits on hand than can be immediately paid out to customers at any one time. The practice has been well established for hundreds of years, and yet it can lead to unwarranted expansions of credit and fuel system-wide instability.

Consider the history of banking. What was the purpose of the bank? There have been traditionally three primary functions that banks have provided since the ancient world.

The first has been to provide safe storage for money itself. This is the warehousing function. It is essential and worth paying for. People need a safe place to store their money.

The second is the loan function. The more credible the warehousing function becomes, the more the bank is in the position to leverage its specie holdings for its credit-granting functions. This is the origin of fractional-reserve banking. The bank cannot pay all depositors on demand. Instead, it relies on its financial soundness and a rate of return for depositors who entrust the bank with the responsibility of maintaining its balance sheet.

The third is the clearing system. Because there is always counterparty risk in such transactions — the bank and the depositor must trust each other to tell the truth and make good on promises — the system settles transactions and certifies that all promises to pay have been kept. In the period between the transaction and the clearing, money becomes a credit issued and accepted based on trust.

What happens to these three functions in a crypto-based monetary economy? Let’s go through them.

Warehousing

That money needed a warehouse has always been taken for granted. This was a technological limitation of salt, gold, silver and so on. Specie takes up space. You need a secure space for it. It is also weighty and impractical for moving from space to space by a single individual. Murray Rothbard, in his book “Mystery of Banking,” regrets that these factors even exist and pointedly says that if people had carried coins rather than relying on paper money from banks, we could have avoided a century of financial panic and inflation. That’s a theoretically sound point that runs into practical limitations. The reason for notes to represent specie is to facilitate trade in a way that meets the needs of consumers.

However, thanks to Bitcoin, we can now see that this warehousing service was in demand due to physical factors and not fundamental ones. Bitcoin has all the attributes of traditional money but adds two advantages: it is weightless and takes up no physical space.

The money is “stored” in the cloud on the blockchain. The personal wallet serves the function of providing access via double-key cryptography. If you have your private key — and this can be on physical paper or on a device not even connected to the internet — you have all you need to set up your own private banking empire. Anyone in the world can do it without trust relationships, personal identification or credit history. The institutions that seem like banks — services like Coinbase that hold your key for you — maintain a full-reserve policy or risk losing the trust of their customers.

It is impossible to anticipate what kinds of crypto-derivatives will end up being securitized and traded in the future. Surely, the last nine years of the previously impossible should cause everyone to be humble in their predictive outlook. That said, there is good reason to believe that the diminution of counterparty risk inherent in every non-cash transaction will drive markets toward greater accountability in every sense. And this alone might solve the age-old debate about fractional versus full reserves with the best possible resolution.

The question does not have to be resolved by intellectuals and policies. It is settled by the market, so long as technology permits people to pay for goods and services with a spaceless and weightless money that requires no warehousing.

Clearing

As for clearing, the single most difficult-to-grasp feature of Bitcoin is the manner in which it reduces or eliminates counterparty risk associated with monetary exchange. Transactions are cleared as they are made. This has never before been possible in the history of money and finance on a geographically noncontiguous basis. With traditional money, for clearing to occur instantly, you have to actually be there, trading physical dollars for goods and services.

Cryptocurrency reproduces this exact financial arrangement on a peer-to-peer basis between any two individuals anywhere in the world. You are literally trading your stuff for his or her stuff. Ownership titles are rearranged when the transaction is confirmed in the ledger.

What role is then here for traditional banks to be the guardians of settlement? When it comes to clearing services, so far as I can tell, that role is eliminated for all transactions that are settled in the instant of their confirmation (the time delay involved in moving crypto is nothing more than a delay; it creates no credits).

What About Credit?

We are habituated into thinking that the whole world runs on credit. That’s because it does. This isn’t because we are financially irresponsible, are unable to say no, absolutely adore large financial institutions or are willing to pay high rates of interest. It’s because the sophistication of modern financial technology has been hobbled by old-fashioned payment technology that still operates today the way it did in the time of the Medicis.

In any case, the fundamentals are the same in conventional finance today as compared with the Medicis. It still relies on trust relationships, credit instruments that represent property but do not embody it, and a time delay for transactions to clear. As a result, every transaction that is not conducted in person via cash depends on some extension of credit and thus involves intermediating third parties, and that in turn necessarily involves some counterparty risk.

It is fascinating how little we understand this today, but the truth becomes obvious on close examination: Every transaction today is either based on cash (instant title exchange and clearing) or credit (which involves trust relationships and counterparty risk). Services like Venmo, Google Payments, PayPal or dozens of others are no different in this respect from Visa, Mastercard or American Express. They can be more or less expensive, charge different user fees, and employ different interfaces and security protocols. But in the end, these services all rely on credit terms and do not offer instant clearing. They simply cannot because the decrepit technology of national monies does not allow it.

Cryptocurrency as a means of facilitating exchange is different in another respect. Its value is not tied to a nationalized currency at all. Not only that, it has no value as a commodity or asset at all. Its value is based on the use value of services provided by the cloud-based distributed ledger.

The massive use of credit-based exchanges as we see in national monies would not exist in Bitcoin precisely because the technology disintermediates the financial industry, removing both the need for trust relationships as well as clearing services. Might there emerge a market for crypto-substitute monetary derivatives? Only the evolution of these markets can reveal this for sure, but this much remains true. It will not be about creating new money being allowed by the protocol. The distinction between money and money substitutes will be clear and not obscured by retrograde documentation technology.

At the same time, the scaling problem of prevailing blockchain solutions will likely necessitate a convention of using off-chain platforms for smaller transactions, as Nick Szabo has suggested. Such transactions do involve counterparty risk but not credit creation as such; such networks operate more like debit cards. The main blockchains will likely be used for final settlements while “lightning networks” become trust-based credit tools (money substitutes) — by choice but not by necessity.

Additionally, the massive industry associated with credit-based transactions includes a vast machinery of fraud prevention and prevention of identity theft. This is also made unnecessary because identity is cryptographic and not personal.

Credit Markets

All this said, there is still a role for credit markets in cryptocurrency. They emerge precisely as they would in a purely specie-based monetary regime in which everyone carried around their own coins or stored them in the home. If you have excess monetary reserves in your own possession, you may be willing to loan them for others to use and do so at a profit. In order to reduce the risk of default and guarantee your investment, you need collateral; this can take any form. You also need to establish a trust relationship, same as with any other loan market.  

The difference is subtle but foundational. When you loan virtual money, you lose title to that money, just as if you had transferred physical property. Contractual terms would specify the ways in which a later exchange would occur in accordance with the terms of use. Again, the way to think about this is how it works in a cash economy: You loan a friend $20 and hand him cash. You cannot get it back by force. As the lender you rely on establishing a contractual relationship that creates expectations for future payment, along with some measure of risk.

These markets have already developed. Companies like Bitbond and BTCPOP offer services both for lending money and borrowing money, with the terms of exchange favoring both parties. For now, such standalone services are risky simply because the upstart sector is replete with sketchy schemes and fraud (“Lend your BTC to me and I will pay you back, I promise.”).

Much more promising is a simple margin lender service provided by dollar/Bitcoin exchanges themselves. The borrower does not take direct possession of the coins but is rather extended by the exchange at the behest of the customer who wants to earn a regular rate of return. An example is the lending service provided by Poloniex. The trouble these markets have so far encountered is that holding crypto is more profitable than lending it at prevailing rates. This might not always be true.

As these markets develop, it would not be a surprise to discover that the rate of return for the lender would be above the rate one would earn from nationalized money. The risk of default would not be guaranteed in any way as with government-backed financial institutions, much less a central bank that is capable of printing unlimited amounts of money. On the other hand, this would also eliminate the moral hazard of making unwise loans or securitizing debt obligations without proper documentation, such as happened during the housing bubble.

In the century of central banking, we’ve seen interest rates decline inexorably and the terms of credit issuance shifting dramatically to favor longer terms, ever less collateral and ever more confusing titles for ownership. In cryptocurrency-based credit markets, we are likely to see the opposite trend: shorter terms, higher collateral requirements, very clear titles demarcating indisputable rights of ownership and enforcement of terms built into lending protocols.

The Future of Sound Money

Christine Lagarde is right: There are dramatic challenges to the status quo that are being offered up by the advent of cryptocurrency. Monetary exchange will operate the same as cash exchange, and the sophistication of our payment and settlement technologies will sync up with the sophistication of our financial tools.

In some respects, cryptocurrency might appear to be more stingy than our current highly leveraged, unstable and centrally regulated systems. In contrast, the new world will be financially sound, stable, radically disintermediated, decentralized and democratized because anyone, of any financial means and access to financial institutions, can participate within it.

We’ve only begun to think about what a radical change it would be if our money actually gained value over time (as crypto has for nine years, and the dollar did in the late 19th century), so that you actually grow more wealthy merely by not spending. Such a change would be huge, not only for finance but also for the culture at large.

For more than a century, the banking system has been used to fund the state, destabilize the economy, loot private savings, exclude people who don’t have access, promote financial dependency and even make violence possible on an unprecedented scale, all because we didn’t have a different technology for making possible monetary exchange. That monopoly is now being shattered. Sound money is born. The panic of the ruling class has just begun.

This is a guest post by Jeffrey Tucker. Opinions expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

The post Op Ed: Is There a Future for Banking in a Cryptocurrency-Dominated World? appeared first on Bitcoin Magazine.

Posted on 11 October 2017 | 7:42 am

Bitcoin reaches new all-time high: $ 3,000

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CRYENGINE now accepts Bitcoin

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Consulting firm EY Switzerland accepts Bitcoin

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Bitcoin Trading Bots

There have been a wide variety of situations in which algorithmic trading programs have proven to be beneficial for investors. However, investors who only trade a cryptocurrency can also take advantage of bitcoin trading bots. Through bitcoin bot trading, traders can become more flexible and prompt, minimize errors and process information more rapidly. At this… Read More »

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Steam accepts Bitcoin

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Mozilla accepting Bitcoin

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PayPal and Virtual Currency

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German Newspaper "taz" accepts Bitcoin

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Expedia to accept Bitcoin payments for hotel bookings

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October 17, 2017 -
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