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sobota, 22 listopada 2014


bitcoin price underwater

The price of bitcoin is approaching new territory: deep, deep underwater. Investors will see year-over-year prices lower — much lower — than 12 months ago. How that will affect the already flimsy foundation that the cryptocurrency’s price is built upon will likely be a topic of much discussion.
One year ago, the price of bitcoin was on a mad dash straight uphill, closing November 11, 2013 about where it is today: in the $350s. Then the flight higher began. A week later it was approaching $550. Another week and it had soared to over $1,000, reaching nearly $1,200 before beginning its December descent. By mid-month, bitcoin was back into the mid-$500 range.
Without another run, year-over-year investors are going to see brackets around their returns, an unfamiliar sight.
The experts have weighed in on where they believe the price is going. Generally, optimism still rules. But in the meantime, bitcoin believers may be thinking about long-term capital losses at tax time, rather than short-term capital gains.


bitcoin centralization

NEW YORK (InsideBitcoins) — Earlier this year, there was panic in the bitcoin community due to GHash.IO’s large share of the bitcoin network hashrate. The control over the majority of bitcoin hashing power could have potentially led to GHash.IO attempting to double spend their own transactions or block other transactions on the network. This is known as a 51% attack.
The concerns surrounding this control over bitcoin’s method of processing transactions led to bitcoin developer Peter Todd selling half of his bitcoin holdings. Although the fight against bitcoin mining centralization should not be viewed as finished, the industry has become a bit more decentralized over the past few months. GHash.IO has mined roughly 19% of the bitcoin blocks over the past four days, which is less than half of their output from just a few months ago.
There are a few different theories that could explain why this distribution of mining power has taken place, but the reality is that no one can really know the true source of the shift away from centralization.
Discus Fish takes control
Discus Fish actually overtook GHash.IO as the largest public bitcoin mining pool a couple of months ago. The mining pool is based in China and has experienced rapid growth over the course of 2014. 25% of the total blocks mined over the past four days have been found by Discus Fish, and the bitcoin community is bound to start a new campaign against the Chinese mining pool if it continues to gain more control of the network hashrate.
Then again, there could be another pool to replace Discus Fish in the near future, much like Discus Fish replaced GHash.IO as the top dog. Discus Fish co-owner Wang Chun has also stated that the pool operators would likely use mitigation techniques, such as higher fees, to persuade miners to join other pools if Discus Fish started to get close to a 51% share of the bitcoin network hashrate.
Hiding in the unknown?
Although the public record of block rewards shows that GHash.IO’s share of the network hashrate has dropped below 20%, that statistic doesn’t tell the whole story. Roughly 25% of the blocks mined over the past four days have been found by unknown miners, and one of those unknown miners could be GHash.IO. Although these sorts of allegations are downplayed as nothing more than conspiratorial by some, the fact of the matter is this would be a perfect method for GHash.IO to hide some of their excess hashing power.
Bitcoin’s Achilles heel
The centralization of mining has long been bitcoin’s achilles heel; however, it seems unlikely that this will eventually lead to the complete collapse of the digital currency. Economist Kevin Dowd recently claimed the structure of incentives in the bitcoin network would ultimately lead to a mining monopoly, but it’s important to remember that miners (and other businesses in the bitcoin space for that matter) have an incentive to push for decentralization, too. After all, bitcoins won’t be worth very much if they’ve lost their censorship-resistant properties.



Tox, an encrypted instant messaging platform, has plans to experiment with Bitcoin micro-payments. Tox connects users to one another directly and uses advanced cryptography to encrypt all chats. Users of the platform will be able to voice call, instant message, video call, and exchange files, all with top-notch security and privacy in all conversations. The lead developer of Tox announced plans to possibly integrate Bitcoin payments through the platform in the future.
Currently, the platform is in early development, though users can still download the software that works quite well and test it out with friends. In addition to the cutting edge security and privacy with Tox, the platform is also completely free to use and ad free.
I got a chance to interview the lead developer of Tox to learn more about the platform as well as plans in development.
What are your responsibilities with Tox?
I’m the lead dev of Tox, I work on toxcore, maintain the uTox client and manage the whole project with help from others.
Tell me a little bit about Tox.
Tox is a secure, distributed, peer to peer messenger that uses various NAT hole punching techniques to connect you directly to the people you are speaking with. Tox uses the NaCl ( crypto library for all the crypto used in Tox. People in Tox are represented by their public keys. To add someone you add their Tox ID which is their public key with some other anti spam info attached. This is what a Tox ID looks like: (56A1ADE4B65B86BCD51CC73E2CD4E542179F47959FE3E0E21B4B0ACDADE51855D34D34D37CB5) for example this is the id of groupbot, a bot that we use to test group chats. Everything sent to someone with Tox is encrypted with temporary keys exchanged during the handshake meaning if someone steals your keys they can’t decrypt any of your previous chats.
How does Tox differ from other services such as Skype?
Microsoft is known to spy on skype users by recording everything that goes through it. A couple years ago, Microsoft bought skype and centralized it making it possible for them to record everything everyone said on skype. With Tox, everything is encrypted so nobody except yourself and the people you are speaking to can know what you are saying. Tox is fully distributed meaning it doesn’t require any central servers unlike almost all the other chat services that chose to go the easy centralized route. Most encrypted chat services only support text chats while Tox supports A/V chats and file transfers. The chat application market seems to be overcrowded with centralized text only that pass unencrypted text through their servers. Telegram for example at first glance seems ok but then you realize that only their “secret” chats that most users probably never use are end to end encrypted. The normal chats can be easily read by their central server. With Tox, everything is end to end encrypted and there is no way to disable the encryption so our users are forced to use it securely.
What are the benefits of using Tox over other chat services?
It’s easy to use, no setup required, works well, has fast file transfers, audio/video support, group chats that now support audio and everything is end to end encrypted.
Do you plan on integrating Bitcoin micro-payments into the software?
We plan on experimenting with Tox services that people can pay for in the future once Tox is more mature. Bitcoin being by far the most popular fully distributed currency looks like the logical choice for the payment system.
In your opinion, how important is it for chats to be encrypted?
There’s no reason for chats not to be encrypted. In 2014 the computing devices people use have enough processing power to encrypt everything they send and receive. In my opinion, any well designed communications software must have encryption as there are no drawbacks to encrypting everything. Encryption means your users don’t have to trust anyone but themselves with the contents of their conversations. It also prevents certain entities from conducting large scale surveillance of users by looking for keywords in your chats with other people.
What are your future plans for Tox?
Add more features like video group chats, device syncing, etc… and try to get a professional audit of the toxcore source code done.
tox platform


The Tox platform is a great alternative to Skype, providing cutting edge security and privacy in addition to the great features offered by other chat platforms. In this age, encryption is incredibly important to have, as mentioned in the article, all modern computing devices have more than enough power to encrypt all data sent and received. The Tox platform builds upon the idea that conversations should and can be made private and secure. By connecting users to one another directly, and distributing the network, Tox does not rely on centralized servers. Much like Bitcoin, Tox seeks to decentralize the way things are done and put the power in the hands of individuals. We will keep you updated on the development of this unique platform. You can read more about Tox and download the free software here.
What do you think about the importance of data encryption? Comment below!

David al-Achkar wants to see more people using Bitcoin

This is the second in a series of articles about Lebanese entrepreneurs who took part in the Central Bank’s Accelerate 2014 International Startup Conference.
BEIRUT: When David al-Achkar quit his previous job in management and consultancy at McKinsey in Toronto a year and a half ago, he had no other plans. “I spent six months working on different projects and I stumbled on Bitcoin and I was fascinated,” he says. “The more I dug into it, I realized it is a powerful piece of technology and has the potential, or maybe not, to change the way we transact globally.”
Bitcoin is a form of digital currency, created and held electronically. While it can be used like dollars or euros to buy things electronically, what separates Bitcoin from conventional currency is that it is decentralized. No single institution controls the Bitcoin network and the currency is more or less instantly transferred at a fraction of the cost of other payment methods, according to Achkar.
Last Christmas, Achkar arrived in Beirut to visit his family and a few months later decided to launch “Yellow,” a gateway that allows businesses in the Middle East to accept Bitcoin payments.
“Bitcoin was still on my mind when I arrived in Beirut and I told myself: There is something interesting happening here, so I delayed my flight back home by a week, then two and eventually I never left,” he says., which went online in August, is already providing services to two websites:, a Beirut-based online electronics store and, a crowd-lending platform based in Jordan. The company has also partnered with a Dubai-based travel-booking platform that is set go online soon.
In addition to providing businesses with payment solutions, Yellow is in the process of expanding its products to cater to consumers.
“We are in the process of developing products to make it easy for consumers to get Bitcoins. Ultimately, the goal is to provide a full ecosystem of products that touch the whole value chain ... we are taking one step at a time,” Achkar says.
Yellow has already secured its first round of funding from U.S.-based angel investors, Achkar says, adding that the amount will be disclosed once the deal is officially ratified in the next few weeks.
In the second round of financing, which is most likely to take place six months to one year from now, Achkar says his company is considering investments from MENA-based venture capitalist funds.
Such funds have shown interest in Yellow, he says, despite the limited awareness of the Bitcoin technology in the region. Many are still skeptical of the digital currency, but Yellow is working hard to change that.
For this purpose, Yellow launched – a website dedicated to providing information about Bitcoin and the technology behind the digital currency.
“Some misinformation surrounds the Bitcoin technology,” he says. The technology itself is secure, but some poorly run companies providing payment services may be victim of hacking attacks, Achkar adds.
Bitcoin is safe as a currency, just like the dollar is, but its payment gateways are susceptible to hacking, just like banks or electronic payment processors, he says.

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Why Some Retailers Are Accepting Bitcoin

Some of the virtual currency's unique characteristics have proven attractive to some businesses.
Bitcoin's broadest impact might happen outside payments, but some retailers are already finding value in accepting Bitcoin for goods and services. A panel of businesses that are taking Bitcoin payments discussed their experiences with the virtual currency at a Money2020 panel this month.
Surprisingly, security was one of the biggest benefits of Bitcoin for two of the businesses represented on the panel: Amagi Metals, a trading site for precious metals, and Newegg, an online computer and electronics retailer.
Typically, fraudsters want to use stolen credit card credentials to buy goods that can be a store of value (like gold, silver, or high-end electronics). Stephen Macaskill, Amagi's CEO, said his company is a constant target for fraudsters. "We always have people trying to make orders with fraudulent credit cards. We have to have a whole department to make sure that all of our credit card transactions are legitimate, so it is expensive for us. We catch people on a weekly basis."
Amagi was hit with chargebacks from fraudulent card transactions in 2012, and it started accepting Bitcoins that year. Thanks to the Bitcoin Blockchain, it doesn't have to worry about any chargebacks with its Bitcoin transactions. The Blockchain, a public ledger of all Bitcoin transactions, makes it impossible to counterfeit Bitcoins. Each transaction recorded in the Blockchain is verified by a third party.
[For more on the Bitcoin Blockchain, check out: Banks, Bitcoin & the Blockchain]
"I don't see a way to end credit card fraud… and we have the highest rate of credit card fraud in precious metals," Macaskill told the audience. "With Bitcoin, we don't ever have to worry about chargebacks."
Security might not be the first benefit that comes to mind when people think about Bitcoin, after incidents like Mt. Gox this year. But the Blockchain technology gives the virtual currency security as a payment mechanism, even if some of the Bitcoin exchanges have proven far less secure.
Ted Rogers, chief strategy officer of Xapo, told Bank Systems & Technology that Bitcoin advocates need to provide a great deal of education about the security benefits of the Blockchain for payments.
"There's a security aspect that's partly educational. Our challenge is explaining why this technology is so secure," he said. "It is easier to steal the Mona Lisa than to steal a Bitocin in a cold wallet."
Soren Mills, Newegg's chief marketing officer, said at the Money2020 panel that the online computer and electronics retailer also found Bitcoin useful for dealing with fraudulent card transactions. But the greatest benefit for Newegg has been in attracting new customers.
"What's been surprising to us is the amount of new customers we have" using Bitcoins, he said. "Our customers expect us to offer products that are at the forefront of technology. This was a way to show our community that we are on the leading edge. And the customers who are transacting in Bitcoin, they are transacting in larger amounts and more frequently. They are looking for outlets to spend their Bitcoins."
And Mills expects Bitcoin to help with Newegg's recent expansion. "We started shipping internationally about six months ago. We think Bitcoin offers us the ability to bring a convenient payment method for that international expansion… Bitcoin offers an opportunity for a standard transaction method throughout the world."

Can bitcoins catch on with consumers? This VC's betting on it

Bitcoin is alive, well, and ready to be spent.
That's the thinking of Adam Draper, 28, who's Boost VC accelerator will now focus exclusively on all things bitcoin, the digital currency that has become notorious for allowing anonymous purchases. Draper is betting bitcoin will soon appeal to mainstream consumers wanting to make secure purchases without expensive bank or credit card fees.
The 2-year-old accelerator, which previously invested in a broader range of technologies, announced Friday that it intends to fund up to 30 bitcoin companies within the next six months. That's on top of the 26 it's already funded. Draper is particularly interested in companies that supply the technical underpinnings needed to run a secure and bulletproof ecosystem of exchanges, service and transfers, he said.
"We made a promise to the bitcoin community to back 100 bitcoin companies in the next three years," he said. "[This new focus] gets us there faster."
Some people also view bitcoins as an investment, buying them in the hope they will rise in value -- much like gold or silver. The price of one bitcoin climbed to around $1,130 at the end of November last year, but has fallen steadily since. It was about $350 on Friday.Draper comes from a long line of venture capitalists, going back to his great-grandfather. He's the son of famous venture capitalist Tim Draper, of VC firm Draper Fisher Jurvetson, who made headlines for his proposal last December to split California into six separate states. The elder Draper is also a well-known bitcoin supporter who purchased nearly 30,000 bitcoins in July after the government auctioned bitcoins seized from black-market website Silk Road.
The real value of bitcoin rests in the technology that powers it and the regulation that will define it, said Wedbush Securities analyst Gil Luria.
"When services are built out and there's clarity around regulations, then we'll start seeing those very significant benefits and services for consumers and retailers," said Luria. When those things come together, "you can achieve secure, very fast, efficient transactions without requiring a central agency like Visa or the Federal Reserve."
The Drapers aren't the only Silicon Valley technorati who are bullish on the currency. Marc Andreessen, creator of the Netscape Web browser, said in an interview last month he wished he had inventedbitcoin.
People look at bitcoin the same way they viewed the Internet in 1993, when it was slow and difficult to access, he said.
"When we tried to get investors for Netscape, most of them said 'you're out of your mind,'" Andreessen said. "This is the thing that's most like that of anything I've seen in the last 20 years."