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Day: July 11, 2017

The case for investors sticking out the volatility in bitcoin and ethereum – CNBC


CNBC

The case for investors sticking out the volatility in bitcoin and ethereum
CNBC
“We’re now sort of at … a tipping point, where people are now considering bitcoin or ethereum or digital assets as more mainstream,” Dave Chapman, managing director of Hong Kong-based commodities and digital assets trading house Octagon Strategy …

CNBC
The case for investors sticking out the volatility in bitcoin and ethereum
CNBC
"We're now sort of at ... a tipping point, where people are now considering bitcoin or ethereum or digital assets as more mainstream," Dave Chapman, managing director of Hong Kong-based commodities and digital assets trading house Octagon Strategy ...

Alphabay Offline for a Week — Darknet Users Rush to Find Alternatives

darknetThis past week Bitcoin.com reported on the Alphabay darknet marketplace going offline while many speculated an exit scam. It’s been close to a week now with no signs of the underground market coming back online, which could lead to a severe loss of bitcoin for those holding money there. Also read: Protestors Will Watch Mt Gox

The post Alphabay Offline for a Week — Darknet Users Rush to Find Alternatives appeared first on Bitcoin News.

darknet

This past week Bitcoin.com reported on the Alphabay darknet marketplace going offline while many speculated an exit scam. It’s been close to a week now with no signs of the underground market coming back online, which could lead to a severe loss of bitcoin for those holding money there.

Also read: Protestors Will Watch Mt Gox CEO Face Criminal Trial This Week

Alphabay Goes Missing for One Week and Will Soon to Lose Its Position as the Top Recommended Darknet Market

Alphabay Offline for a Week — Darknet Users Rush to Find AlternativesThe infamous darknet marketplace Alphabay has been a darknet leader for a couple of years now as the biggest online market on the deep web that lists illicit goods. According to the Deepdotweb publication, the marketplace has maintained a 93 percent approval rating but has been offline for the past six days. If the underground website is offline for a consecutive two weeks, the Deepdotweb owners will remove the market from its recommended markets sidebar. Additionally, as we reported last week, an Alphabay “public relations guy” named ‘Trappy,’ posted on Reddit and warned users of the appearance of faux Alphabay phishing sites but did not explain the reason behind the market’s current downtime.

Antsy Alphabay Customers Race to Alternative Markets and Search for Their Vendors

Since then other darknet markets like Dream, and Hansa have been catering to a lot more new users. Due to the extreme amount of new registrants, Hansa market stopped accepting new customers and since then some individuals have been offering to purchase accounts from registered users. The dedicated Alphabay subreddit is filled with people telling jokes about exit scams, people looking for their old vendors, and those looking to get into alternative darknet marketplaces. Further people believe customers are particularly antsy because Alphabay has been known for catering to harder drugs while other markets like Hansa peddle more marijuana sales.

Alphabay Offline for a Week — Darknet Users Rush to Find Alternatives

The Two Most Popular Speculated Theories

An OPSec Error

Alphabay Offline for a Week — Darknet Users Rush to Find AlternativesThere have been a couple of theories to what has happened to the largest darknet market since the Silk Road. One individual that goes by the name ‘Kinger’ and was once an Alphabay vendor says he revealed the identity of an Alphabay staff member named ‘Desnake’ to the media. Kinger says he has doxed darknet members in the past and signed the message with his digital signature and described his perception of what went down.     

“Hello, guys Kinger here. I would like to inform you Alphabay has exit scammed because of me,” explains Kinger. “Desnake has been doxed by me because he made an OP-Sec error and after I contacted him about the error, I think he made the decision to burn everything.”

An alleged vendor from Alphabay has also confirmed a possible OP-Sec (Operations Security) leak and details he will be soon providing “hard proof” that “it’s over.”

“Because of a personal security mistake, the admins decided to crumble. I’ve been in contact with someone on the staff, and it sounds like it was a 50/50 split — The money is gone. I highly doubt they will give it back, but I’m willing to put some pressure on them. This one administrator — if he thought hard enough — he would know who I am, and that this is a serious piece of information. I kindly ask that he returns BTC to some vendors who have been loyal to him, and made him rich originally. This is very important. I know there is no such thing as a “good-hearted” person on the Darknet, but at least pay your dues, brother.”

Global Law Enforcement & the Ongoing Darknet Investigations

Alphabay Offline for a Week — Darknet Users Rush to Find AlternativesAnother current theory is how law enforcement may be getting closer to busting staff members of many underground marketplaces. In Quebec, last week members of global law enforcement agencies like the FBI, the Royal Canadian Police (RCMP) and others found some significant darknet market evidence. Computer seizures took place and also a related arrest in Thailand, the RCMP declared. However, the agencies did not disclose what the Quebec operation was officially about except investigators were hunting a worldwide network of connections associated with the “dark web.”

Customers Still Crossing Their Fingers but the Outlook Seems Grim

There have been many speculations across the market’s forums, and nobody knows the real story. Some still think the marketplace will return and others simply believe it’s been way too long, and Alphabay staff walked away with millions worth of bitcoins and monero. Even though the deep web market was the biggest, it didn’t offer multi-signature wallets and other security benefits smaller markets provided. For instance, the third most popular darknet market Hansa has multi-signature wallet protection and has also paid customers 10 BTC bounties to find bugs in the market’s system. 

Moreover, people are watching many wallets that have been allegedly associated with the Alphabay’s operations by speculators. Some of which contain thousands of bitcoins but until a lot of customers come forward with loss reports, it’s hard to say the extent of the damage if the market has officially exit scammed. For now, even after one week with no word from official staff Alphabay customers are crossing their fingers hoping their favorite market will return, but the outlook seems grim.

What do you think about Alphabay going offline for a whole week with no official reports from staff members? Let us know in the comments below.

Images via Shutterstock, Pixabay, the Deepdotweb, r/alphabaymarket.

Show the world how cutting-edge you are with a bitcoin T-shirt, hoodie, bag, key-ring, even a Trezor hardware wallet. Shipping all over the world, quality merchandise and, of course, a payment system that makes people say “wow!”

The post Alphabay Offline for a Week — Darknet Users Rush to Find Alternatives appeared first on Bitcoin News.

The Definitive Guide to Casino Payments

payment optionsOne of the most important features of an online casino is the payment and withdrawal options offered to its users. The more options available, the more choices you have. It is important that there is a variety of choices, because not every user has access to the same payment options. For example, an online casino that offers bank tellers as the single payment method will not be able to reach the desired number of customers: There are many countries and banks that do not allow transfers abroad. In this article, we will mention both the most commonly used payment methods

payment options

One of the most important features of an online casino is the payment and withdrawal options offered to its users. The more options available, the more choices you have. It is important that there is a variety of choices, because not every user has access to the same payment options.

For example, an online casino that offers bank tellers as the single payment method will not be able to reach the desired number of customers: There are many countries and banks that do not allow transfers abroad. In this article, we will mention both the most commonly used payment methods and what the most advantageous ones are. Do not forget that the concept of “payment method” is bidirectional: You can use the methods mentioned in this article not only to deposit money but also to withdraw money.

How to Make Deposits and Withdrawals

Each online casino allows you to access these transactions from your account page. In other words, you must first become a member of the casino. Follow these steps to deposit and withdraw:

  1. Open your account page: The design will be different for each casino, but you will see an option called “deposit” or “payment”. Do not be surprised if you cannot see the “withdrawal” option, you still have to use the “deposit” page to reach this option in some casinos.
  2. In any case, after you find the appropriate link, click on it. Another page will appear where a number of payment methods are involved.
  3. Once you have selected the method that works best for you, proceed.
  4. After that, it will be different according to the method you choose. If you’re using a bank account, credit card, or debit card, you’ll be prompted to enter your digital information. For other payment methods, we can say that there will be a screen requesting similar information.
  5. Make sure the lock icon on the left side of the address bar of your browser is green and closed. This means that your connection (i.e. your personal and financial information) is encrypted.
  6. Once you have set the amount you want to deposit or withdraw, complete the transaction.
  7. According to the method you use, your will see the money in your account in a few seconds or a few days. In uncommon methods such as postal coupons, it can last up to 14 days.

The Most Popular and Most Expensive Method: Credit Cards

You can use all VISA or MasterCard credit cards in online casinos. Because they are perhaps the most popular way of payment in the world, they all can be used in online casinos too. The advantage is that the process is completed within a few minutes. However, there are two disadvantages: The first is that the transaction fees (commissions) are quite high. In general, you have to pay 2% of the amount you deposit or withdraw as a commission. The upper limit of this process is usually 2 dollars/euros. If you make regular deposits and/or withdrawals, the total amount of commission you pay will be quite high. The second disadvantage is that they cannot be used from any country. Some countries prohibit the use of credit cards on online casinos due to gambling laws.

The Long, Expensive, but Trustable Method: Bank Transfer

Bank tellers are at least as common as credit cards. The processing time is about 2-3 business days. So you cannot use the money you deposited right away. Transaction fees (commissions) are the same as credit cards, and sometimes even more expensive. It is one of the most reliable payment methods because all transactions are under record. However, some banks limit foreign money transfers to a certain amount. In addition, all transactions are reported to the Tax Office.

The Easy, Practical, but Inefficient Method: E-Wallets

By e-wallets, we mean PayPal, Neteller, Skrill, Paysafecard, debit cards, and similar methods. This is one of the most common among casino deposit methods. It is easy to use and the process takes only a few minutes. The commission is low, but it may vary depending on the amount you deposit. If you deposit/withdraw low amounts such as 10 dollars/euros e-wallets are the advantageous choice.

However, for higher transactions, you pay more commissions than credit cards. Their biggest advantage is that they allow you to limit your budget. Because your budget is limited to the money you have previously invested in the e-wallet option, you cannot spend more even if you want to. But you have to do two things every time: First, you deposit money into the e-wallet and then into the casino. So it is an inefficient solution and can become tedious in the long run.

The Next Generation Method: Bitcoin

Bitcoin is an encrypted and electronic currency. There is no centralized server. All users in the system are represented by a series of letters and numbers. So nobody knows how much money you have and cannot prevent you from using it for the same reason. Bitcoin, which provides full anonymity, is the most advantageous payment method. All transactions are completed within a few seconds. You do not pay any commission

It is also possible to pay with a mobile phone without using the casino account page. Tax Offices cannot follow transactions. It is also an investment method at the same time, your money in the system will continuously gain value. To tell the truth, Bitcoin is the best way to pay and withdraw money if you know how to use it. Moreover, many online casinos offer various bonus campaigns to promote this payment method.

ContentCoin Makes Monetization Easier for Content Creators and Offers Flexibility to Advertisers

The online publishing industry is heavily dependent on revenues from advertisements. At the same time, the increased usage of internet for virtually everything has made online advertising a desirable platform for businesses and advertisers. However, most of the online advertisers these days opt for centralized platforms like Google AdWords and AdSense, which can be quite … Continue reading ContentCoin Makes Monetization Easier for Content Creators and Offers Flexibility to Advertisers

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The online publishing industry is heavily dependent on revenues from advertisements. At the same time, the increased usage of internet for virtually everything has made online advertising a desirable platform for businesses and advertisers. However, most of the online advertisers these days opt for centralized platforms like Google AdWords and AdSense, which can be quite … Continue reading ContentCoin Makes Monetization Easier for Content Creators and Offers Flexibility to Advertisers

The post ContentCoin Makes Monetization Easier for Content Creators and Offers Flexibility to Advertisers appeared first on NEWSBTC.

Study: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. Gox – Bitcoin Magazine

Bitcoin MagazineStudy: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. GoxBitcoin MagazineAccording to a recent study by researchers from the University of Tulsa and Tel Aviv University, the massive increase in the bitcoin price i…


Bitcoin Magazine
Study: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. Gox
Bitcoin Magazine
According to a recent study by researchers from the University of Tulsa and Tel Aviv University, the massive increase in the bitcoin price in late 2013 was caused by suspicious trading activity on the now-defunct Mt. Gox Bitcoin exchange. The study ...

and more »

Study: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. Gox

Study: Late 2013 Bitcoin Bubble Caused by Suspicious Trading Activity on Mt. Gox

According to a recent study by researchers from the University of Tulsa and Tel Aviv University, the massive increase in the bitcoin price in late 2013 was caused by suspicious trading activity on the now-defunct Mt. Gox Bitcoin exchange. The study, which is titled “Price Manipulation in the Bitcoin Ecosystem,” indicates that 600,000 bitcoins were acquired by agents who did not pay for them, and the bitcoin price rose by an average of $20 on days when the suspicious trading activity took place.

“Based on rigorous analysis with extensive robustness checks, we conclude that the suspicious trading activity caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months,” the study states.

At the center of the study is the infamous Willy bot that was first publicized on a Wordpress blog back in May of 2014.

The paper details the data used for the study, identifies the suspicious trading activity and notes that these sorts of manipulative practices may still be possible today, especially in the altcoin markets.

The Data Used for the Study

This study regarding price manipulation in the Bitcoin markets is based on a data leak of CSV files that included the trading activity on Mt. Gox from April 2011 to November 2013. The researchers behind the study then supplemented that data with more information from bitcoincharts.com.

“We performed additional sanity checks of the data utilizing publicly available historical Mt. Gox trading data from bitcoincharts.[com],” reads the report. “We are confident that the data are high-quality.”

Suspicious Trading Activity

In the leaked data, the report notes that there are suspicious accounts in which the country and state fields are filled in as “??” Many red flags are then found upon further inspection of these accounts.

In the case of one account dubbed “Markus,” the report states that no trading fees are paid and the prices on trades are seemingly random.

“In the end, we have concluded that Markus did not actually pay for the bitcoins he acquired; rather, his account was fraudulently credited with claimed bitcoins that almost certainly were not backed by real coins,” states the report. “Furthermore, because transactions were duplicated, no legitimate Mt. Gox customer received the fiat currency Markus supposedly paid to acquire the coins.”

According to the study, Markus acquired a total of 335,898 bitcoins in the 225 days the account was active.

Screenshot 2017-07-10 at 8.11.23 PM.png

Another entity noted by the study is known as “Willy”; however, Willy controlled many different accounts. According to the study, Willy appeared roughly seven hours after Markus became inactive.

The data cited by the report indicates that Willy would purchase 10–19 bitcoins at a time until an amount equal to $2.5 million worth of bitcoins had been purchased. Willy would then make a new account and repeat the process.

The study notes that there are indications that the owner of the Willy accounts was a Mt. Gox insider. For example, Willy was able to trade while the Mt. Gox API was offline, and the user ID numbers used by Willy were high for the time period they existed.

The study on price manipulation in the Bitcoin ecosystem indicates that Willy acquired 268,132 bitcoins in exchange for $112 million. Much like Markus, Willy did not actually pay for his bitcoins.

“Hence, together, these unauthorized traders ‘acquired’ around 600,000 bitcoins by November 2013,” says the study. “Perhaps unsurprisingly, this is very close to the number of bitcoins (650,000) that Mt. Gox claimed to have lost when it folded in early 2014.”

According to the study, Markus accounts for 12 percent and Willy accounts for 6 percent of the total trade volume on the four major Bitcoin exchanges on the days they were active.

In addition to the possibility of an inside job, the study also notes that an early Bitcoin adopter could have artificially driven up the bitcoin price via a security vulnerability on the exchange in an effort to increase the value of his or her own holdings.

“We do not know for sure which, if either, of these scenarios reflect what actually happened,” says the report. “But that is largely beside the point. Our goal is to demonstrate that these fraudulent trades did in fact significantly impact the price of bitcoin.”

According to the New York Times, former Mt. Gox CEO Mark Karpeles admitted to operating the Willy bot in a Japanese court on Tuesday.

Altcoins Open to Manipulation

The researchers behind the study indicate that the importance of price manipulation in digital asset markets will increase as this technology continues to go mainstream. The study indicates that many altcoins are open to this same kind of price manipulation right now.

“Similar to the bitcoin market in 2013 (the period we examine), markets for these other crytocurrencies are very thin,” says the report. “Our analysis suggests that manipulation is quite feasible in such settings.”

Civic CEO Vinny Lingham shared a similar sentiment during a recent talk where he compared altcoins to pump-and-dump penny stocks. “With altcoins, [pump-and-dump schemes] are super easy,” said Lingham.

“Regulators may want to begin taking an active oversight role as the Bitcoin ecosystem becomes more integrated into international finance and payment systems,” concludes the study.

The post Study: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. Gox appeared first on Bitcoin Magazine.

Study: Late 2013 Bitcoin Bubble Caused by Suspicious Trading Activity on Mt. Gox

According to a recent study by researchers from the University of Tulsa and Tel Aviv University, the massive increase in the bitcoin price in late 2013 was caused by suspicious trading activity on the now-defunct Mt. Gox Bitcoin exchange. The study, which is titled “Price Manipulation in the Bitcoin Ecosystem,” indicates that 600,000 bitcoins were acquired by agents who did not pay for them, and the bitcoin price rose by an average of $20 on days when the suspicious trading activity took place.

“Based on rigorous analysis with extensive robustness checks, we conclude that the suspicious trading activity caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months,” the study states.

At the center of the study is the infamous Willy bot that was first publicized on a WordPress blog back in May of 2014.

The paper details the data used for the study, identifies the suspicious trading activity and notes that these sorts of manipulative practices may still be possible today, especially in the altcoin markets.

The Data Used for the Study

This study regarding price manipulation in the Bitcoin markets is based on a data leak of CSV files that included the trading activity on Mt. Gox from April 2011 to November 2013. The researchers behind the study then supplemented that data with more information from bitcoincharts.com.

“We performed additional sanity checks of the data utilizing publicly available historical Mt. Gox trading data from bitcoincharts.[com],” reads the report. “We are confident that the data are high-quality.”

Suspicious Trading Activity

In the leaked data, the report notes that there are suspicious accounts in which the country and state fields are filled in as “??” Many red flags are then found upon further inspection of these accounts.

In the case of one account dubbed “Markus,” the report states that no trading fees are paid and the prices on trades are seemingly random.

“In the end, we have concluded that Markus did not actually pay for the bitcoins he acquired; rather, his account was fraudulently credited with claimed bitcoins that almost certainly were not backed by real coins,” states the report. “Furthermore, because transactions were duplicated, no legitimate Mt. Gox customer received the fiat currency Markus supposedly paid to acquire the coins.”

According to the study, Markus acquired a total of 335,898 bitcoins in the 225 days the account was active.

Screenshot 2017-07-10 at 8.11.23 PM.png

Another entity noted by the study is known as “Willy”; however, Willy controlled many different accounts. According to the study, Willy appeared roughly seven hours after Markus became inactive.

The data cited by the report indicates that Willy would purchase 10–19 bitcoins at a time until an amount equal to $2.5 million worth of bitcoins had been purchased. Willy would then make a new account and repeat the process.

The study notes that there are indications that the owner of the Willy accounts was a Mt. Gox insider. For example, Willy was able to trade while the Mt. Gox API was offline, and the user ID numbers used by Willy were high for the time period they existed.

The study on price manipulation in the Bitcoin ecosystem indicates that Willy acquired 268,132 bitcoins in exchange for $112 million. Much like Markus, Willy did not actually pay for his bitcoins.

“Hence, together, these unauthorized traders ‘acquired’ around 600,000 bitcoins by November 2013,” says the study. “Perhaps unsurprisingly, this is very close to the number of bitcoins (650,000) that Mt. Gox claimed to have lost when it folded in early 2014.”

According to the study, Markus accounts for 12 percent and Willy accounts for 6 percent of the total trade volume on the four major Bitcoin exchanges on the days they were active.

In addition to the possibility of an inside job, the study also notes that an early Bitcoin adopter could have artificially driven up the bitcoin price via a security vulnerability on the exchange in an effort to increase the value of his or her own holdings.

“We do not know for sure which, if either, of these scenarios reflect what actually happened,” says the report. “But that is largely beside the point. Our goal is to demonstrate that these fraudulent trades did in fact significantly impact the price of bitcoin.”

According to the New York Times, former Mt. Gox CEO Mark Karpeles admitted to operating the Willy bot in a Japanese court on Tuesday.

Altcoins Open to Manipulation

The researchers behind the study indicate that the importance of price manipulation in digital asset markets will increase as this technology continues to go mainstream. The study indicates that many altcoins are open to this same kind of price manipulation right now.

“Similar to the bitcoin market in 2013 (the period we examine), markets for these other crytocurrencies are very thin,” says the report. “Our analysis suggests that manipulation is quite feasible in such settings.”

Civic CEO Vinny Lingham shared a similar sentiment during a recent talk where he compared altcoins to pump-and-dump penny stocks. “With altcoins, [pump-and-dump schemes] are super easy,” said Lingham.

“Regulators may want to begin taking an active oversight role as the Bitcoin ecosystem becomes more integrated into international finance and payment systems,” concludes the study.

The post Study: Late 2013 Bitcoin Bubble Fueled by Suspicious Trading Activity on Mt. Gox appeared first on Bitcoin Magazine.

Monster Byte ICO Nearly 80% Subscribed

monsterbyte icoThe Monster Byte ICO General Sale opened up on July 6th and had such incredible demand the payment processor Monster Byte was using to accept altcoins could not sustain the heavy traffic and subsequently throttled Monster Byte’s API access within minutes of the ICO opening. Both teams were able to resolve this issue very early in the morning of July 7th. While this turn of events did subdue the ICO’s momentum; as of July 11th, the Monster Byte ICO is nearly 80% subscribed. Over 350 investors have purchased over 7,735,00 tokens providing Monster Byte with over $780,000 in capital raised,

monsterbyte ico

The Monster Byte ICO General Sale opened up on July 6th and had such incredible demand the payment processor Monster Byte was using to accept altcoins could not sustain the heavy traffic and subsequently throttled Monster Byte’s API access within minutes of the ICO opening.

Both teams were able to resolve this issue very early in the morning of July 7th. While this turn of events did subdue the ICO’s momentum; as of July 11th, the Monster Byte ICO is nearly 80% subscribed. Over 350 investors have purchased over 7,735,00 tokens providing Monster Byte with over $780,000 in capital raised, all within just 5 days!  

Monster Byte’s ICO does have a hard-cap, with just over 2 million tokens currenrtly available for sale on MonsterByte.io. Each token is $0.11 and investors can purchase with Bitcoin, Litecoin, Dashcoin, Waves, and Ethereum.

What is Monster Byte

Monster Byte Inc. is a technology company which owns a suite of long-standing and profitable Cryptocurrency Gambling websites, all of which have been custom-built with proprietary technology owned by Monster Byte. Since its inception in 2013, Monster Byte has been on a mission to become the world’s premier destination for cryptocurrency gamblers to not only wager on sports, but also bet on games of chance like Blackjack, Roulette, and Baccarat. These websites include BitcoinRush.io, PeerBet.org and Bit777.com.

Funds raised during the Monster Byte ICO will go towards strengthening their consumer websites, as well as entering into the B2B wholesale sector, reselling their proprietary casino and sportsbook software to both traditional and cryptocurrency operators.  

Some highlights of their near term roadmap found in their whitepaper are highlighted below:

New Sportsbook

BitcoinRush.io will launch a new Sportsbook with a sophisticated risk-management system in place which will enable them to earn anywhere from 2.5% to 4.0% on all wagers placed, regardless if the players win or loses. In addition to this new backend platform, they will introduce a new UI/UX built with mobile users in mind.

PeerBet Relaunched

PeerBet.org, one of the oldest dice sites around, will be relaunched with a far more modern look and feel; built with a responsive design for mobile and tablet play.

More Coin Support

Just ahead of the US NFL season, Monster Byte will begin accepting other cryptocurrency coins on BitcoinRush.io, include Waves, Ethereum, Litecoin, Dash, and others.

B2B APIs

The Casino and Sportsbook APIs will be available for consumption by third party operators that want the benefit of Monster Byte’s no-risk sportsbook, and provably fair casino platform..

How to purchase?

Visit https://www.MonsterByte.io/ico

Questions?

Join the slack and talk to the team – https://join.slack.com/monsterbyte/shared_invite/MjA2Nzg1MTIwNTMyLTE0OTg5MzI5MjEtYzAyNmE1ZTgzZA

Bitcointalk ANN thread  https://bitcointalk.org/index.php?topic=1980482

Disclaimer: This is a sponsored post and does not necessarily reflect the opinions of any The Merkle employees. This is not investment or trading advice, always do your own independent research.

Op Ed: Why SegWit2x Makes No Sense

Op-ed: Why SegWit2x Makes No Sense

A number of Bitcoin companies and miners have agreed to run code that will implement a hard-forking increase to the non-witness data in blocks roughly three months after the activation of Segregated Witness (SegWit). According to some of its proponents, the proposal, known as SegWit2x, is said to be the only viable solution to the Bitcoin scaling debate.

However, agreeing to initiate a hard fork without knowing how speculators will react to such a change comes with risks. If there is not full support for the hard fork from bitcoin holders, the end result could be a split of Bitcoin into two separate cryptocurrency networks, which could cause extreme brand confusion among the general public (depending on the severity of the split).

In addition to the potential risks of a permanent split of the community, SegWit2x also ignores tools that could be used to get the intended benefits of this particular hard-forking increase to capacity without the possibility of a network split.

Perhaps most troubling, SegWit2x ignores the reasons as to why Bitcoin is useful in the first place.

Speculators Call the Shots

While the original Medium post regarding the New York Agreement claimed the signatories accounted for $5.1 billion worth of monthly on-chain transaction volume (more than half of the entire network for April), the general view of SegWit2x from bitcoin holders is unclear at this time. Companies representing large amounts of bitcoin holdings (Digital Currency Group, Coinbase, Xapo, etc.) have signed onto the agreement as well, but we have yet to see speculators have the chance to set a price for the hard-forked chain.

As of now, the hard-fork portion of SegWit2x appears to be contentious, which means exchanges are likely to list both the original chain and the chain with a hard-forking increase to the block size limit. Companies that take custody of their users’ bitcoins will need to allow their users to withdraw both coins.

Although more than 80 percent of the network hashrate has agreed to run the SegWit2x code, it’s possible that speculators will prefer the non-hard fork chain. It’s also possible that a futures market could illustrate this point before the hard fork takes place.

Of course, miners could decide to mine at a loss and not listen to the market, which would theoretically go against the incentives of the Bitcoin system. If miners abandon the chain preferred by users, it’s possible that a proof-of-work change will be needed, as faith in the current miners may be lost.

Such a scenario could be disastrous for Bitcoin, which means miners (and everyone else in the ecosystem) should be incentivized to avoid it. But we’ll have to see what happens.

If These Companies Control Bitcoin, Then a Public Blockchain is Not Needed

The point of Bitcoin is that it allows everyone to have full control over their money without the need for a trusted third party. There is no third party in Bitcoin because no one controls the consensus rules. If someone is in control of Bitcoin’s consensus rules, then they’ve effectively become the third party that the system was designed to avoid in the first place.

With the New York Agreement, the signatories are basically saying they control the rules of Bitcoin (or at least the fork of Bitcoin that they’ve all agreed to run). If that’s the case, then the need for a public blockchain is less clear. Users would effectively be trusting these institutions with the rules of the system and ordering of transactions because they could decide to completely change the rules via a hard fork at any point in time. If the system is no longer trustless, Sybil attacks on the state of the blockchain can be thwarted by having trusted entities sign blocks rather than miners.

With that in mind, it may make more sense to launch a federated sidechain pegged to Bitcoin’s main chain instead of trying to turn the main chain into a trusted system. This would allow the main chain to retain Bitcoin’s core value proposition of permissionless money while the sidechain can process the microtransactions these companies desire.

The signatories of the New York Agreement could become the functionaries of the sidechain, where they’d control the consensus rules and sign blocks. This sort of setup makes much more sense if users are supposed to trust these entities anyway. A much more efficient transaction network can be created when proof-of-work and decentralization are thrown out the window.

In fact, this is exactly what Blockstream’s Liquid sidechain is supposed to achieve early next year. Ironically, some of the signers of the New York Agreement are supposed to be participants in Blockstream’s upcoming federated sidechain.

If there are no goals for SegWit2x other than increasing capacity on the Bitcoin network, then a federated sidechain is a much better alternative. There’s no risk of a chain split, capacity can be increased exponentially higher than the twofold increase offered by the hard-fork portion of SegWit2x, and other features, such as Confidential Transactions and faster block times, can also be implemented.

Put in this perspective, SegWit2x is completely nonsensical. I’m not sure what the New York Agreement will lead to over the next few months, but it appears to be unnecessarily risky.

This article is a guest post by Kyle Torpey. It does not necessarily reflect the views of BTC Media or Bitcoin Magazine.

The post Op Ed: Why SegWit2x Makes No Sense appeared first on Bitcoin Magazine.

Op-ed: Why SegWit2x Makes No Sense

A number of Bitcoin companies and miners have agreed to run code that will implement a hard-forking increase to the non-witness data in blocks roughly three months after the activation of Segregated Witness (SegWit). According to some of its proponents, the proposal, known as SegWit2x, is said to be the only viable solution to the Bitcoin scaling debate.

However, agreeing to initiate a hard fork without knowing how speculators will react to such a change comes with risks. If there is not full support for the hard fork from bitcoin holders, the end result could be a split of Bitcoin into two separate cryptocurrency networks, which could cause extreme brand confusion among the general public (depending on the severity of the split).

In addition to the potential risks of a permanent split of the community, SegWit2x also ignores tools that could be used to get the intended benefits of this particular hard-forking increase to capacity without the possibility of a network split.

Perhaps most troubling, SegWit2x ignores the reasons as to why Bitcoin is useful in the first place.

Speculators Call the Shots

While the original Medium post regarding the New York Agreement claimed the signatories accounted for $5.1 billion worth of monthly on-chain transaction volume (more than half of the entire network for April), the general view of SegWit2x from bitcoin holders is unclear at this time. Companies representing large amounts of bitcoin holdings (Digital Currency Group, Coinbase, Xapo, etc.) have signed onto the agreement as well, but we have yet to see speculators have the chance to set a price for the hard-forked chain.

As of now, the hard-fork portion of SegWit2x appears to be contentious, which means exchanges are likely to list both the original chain and the chain with a hard-forking increase to the block size limit. Companies that take custody of their users’ bitcoins will need to allow their users to withdraw both coins.

Although more than 80 percent of the network hashrate has agreed to run the SegWit2x code, it’s possible that speculators will prefer the non-hard fork chain. It’s also possible that a futures market could illustrate this point before the hard fork takes place.

Of course, miners could decide to mine at a loss and not listen to the market, which would theoretically go against the incentives of the Bitcoin system. If miners abandon the chain preferred by users, it’s possible that a proof-of-work change will be needed, as faith in the current miners may be lost.

Such a scenario could be disastrous for Bitcoin, which means miners (and everyone else in the ecosystem) should be incentivized to avoid it. But we’ll have to see what happens.

If These Companies Control Bitcoin, Then a Public Blockchain is Not Needed

The point of Bitcoin is that it allows everyone to have full control over their money without the need for a trusted third party. There is no third party in Bitcoin because no one controls the consensus rules. If someone is in control of Bitcoin’s consensus rules, then they’ve effectively become the third party that the system was designed to avoid in the first place.

With the New York Agreement, the signatories are basically saying they control the rules of Bitcoin (or at least the fork of Bitcoin that they’ve all agreed to run). If that’s the case, then the need for a public blockchain is less clear. Users would effectively be trusting these institutions with the rules of the system and ordering of transactions because they could decide to completely change the rules via a hard fork at any point in time. If the system is no longer trustless, Sybil attacks on the state of the blockchain can be thwarted by having trusted entities sign blocks rather than miners.

With that in mind, it may make more sense to launch a federated sidechain pegged to Bitcoin’s main chain instead of trying to turn the main chain into a trusted system. This would allow the main chain to retain Bitcoin’s core value proposition of permissionless money while the sidechain can process the microtransactions these companies desire.

The signatories of the New York Agreement could become the functionaries of the sidechain, where they’d control the consensus rules and sign blocks. This sort of setup makes much more sense if users are supposed to trust these entities anyway. A much more efficient transaction network can be created when proof-of-work and decentralization are thrown out the window.

In fact, this is exactly what Blockstream’s Liquid sidechain is supposed to achieve early next year. Ironically, some of the signers of the New York Agreement are supposed to be participants in Blockstream’s upcoming federated sidechain.

If there are no goals for SegWit2x other than increasing capacity on the Bitcoin network, then a federated sidechain is a much better alternative. There’s no risk of a chain split, capacity can be increased exponentially higher than the twofold increase offered by the hard-fork portion of SegWit2x, and other features, such as Confidential Transactions and faster block times, can also be implemented.

Put in this perspective, SegWit2x is completely nonsensical. I’m not sure what the New York Agreement will lead to over the next few months, but it appears to be unnecessarily risky.

This article is a guest post by Kyle Torpey. It does not necessarily reflect the views of BTC Media or Bitcoin Magazine.

The post Op Ed: Why SegWit2x Makes No Sense appeared first on Bitcoin Magazine.

21.co Uses Bitcoin To Reinvent And Optimize Sales And Marketing – HuffPost

21.co Uses Bitcoin To Reinvent And Optimize Sales And MarketingHuffPostIn 2010, a developer purchased two pizzas using the forum Bitcointalk.org. He paid 10,000 bitcoins for the pizza. The price of Bitcoin today is 2X the price of ounce of Gold. Had th…


21.co Uses Bitcoin To Reinvent And Optimize Sales And Marketing
HuffPost
In 2010, a developer purchased two pizzas using the forum Bitcointalk.org. He paid 10,000 bitcoins for the pizza. The price of Bitcoin today is 2X the price of ounce of Gold. Had the developer kept his 10,000 bitcoins, he would have had $25 million ...

and more »

BLACKROCK: The bitcoin chart looks ‘pretty scary’ – Business Insider

BLACKROCK: The bitcoin chart looks ‘pretty scary’
Business Insider
NEW YORK, July 11 (Reuters) – BlackRock Inc’s global chief investment strategist on Tuesday suggested that loose monetary policy may have aided speculation in digital currencies like bitcoin, but he said the risk to the broader financial system appears …

and more »

BLACKROCK: The bitcoin chart looks 'pretty scary'
Business Insider
NEW YORK, July 11 (Reuters) - BlackRock Inc's global chief investment strategist on Tuesday suggested that loose monetary policy may have aided speculation in digital currencies like bitcoin, but he said the risk to the broader financial system appears ...

and more »

Startup of Dubai launches ICO to develop applications based on blockchain technology

The Royal Kingdom Enterprise presents projects founded on Crypto’s billionaire market economy by providing participation in the results. Since Blockchain technology has become the holy grail of the technology sector and its implementation possibilities have influenced the development of solutions in diverse industries, the company has initiated the process of creating projects to accompany this … Continue reading Startup of Dubai launches ICO to develop applications based on blockchain technology

The post Startup of Dubai launches ICO to develop applications based on blockchain technology appeared first on NEWSBTC.

The Royal Kingdom Enterprise presents projects founded on Crypto’s billionaire market economy by providing participation in the results. Since Blockchain technology has become the holy grail of the technology sector and its implementation possibilities have influenced the development of solutions in diverse industries, the company has initiated the process of creating projects to accompany this … Continue reading Startup of Dubai launches ICO to develop applications based on blockchain technology

The post Startup of Dubai launches ICO to develop applications based on blockchain technology appeared first on NEWSBTC.

The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000

CoinbaseThe IRS will no longer target a wide-range of Coinbase users via its information request, which it filed on Coinbase back in March. Instead, the agency made concessions to seek account data of individuals who transacted — meaning they bought, sold, sent, or received — $20,000 worth of bitcoin in any transaction type.  Also read: Israeli

The post The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000 appeared first on Bitcoin News.

Coinbase

The IRS will no longer target a wide-range of Coinbase users via its information request, which it filed on Coinbase back in March. Instead, the agency made concessions to seek account data of individuals who transacted — meaning they bought, sold, sent, or received — $20,000 worth of bitcoin in any transaction type. 

Also read: Israeli Official Urges Regulators to be More ‘Paternalistic’ Regarding ICO’s and Bitcoin

The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000
Coinbase logo

A July 6 court document revealed the request: “The United States seeks information (delineated below in 3a-f) for users (“covered users”) with at least the equivalent of $20,000 in any one transaction type (buy, sell, send, or receive) in any one year during the 2013-2015 period.

The IRS is seeking a variety of information on these “covered users.” It is requesting addresses, drivers license and passport information, all wallet addresses and public key details.

Early Concessions and Coinbase User Push Back

The IRS made concessions to only go after these heavier users after they received ample push back last week from Coinbase and several anonymous users. This caused DOJ attorney Amy Matchison to narrow all requests for information. Both the John Doe users and Coinbase argued the data request was over-broad and unnecessary. It could actually put users at risk.

Bitcoin.com covered the story last week, saying,

In a June 22 “Motion to Intervene” court document, the plaintiffs mentioned that all the excess personal information requested by the IRS could easily be retrieved by hackers. This would compromise personal account information from Coinbase users. The document cited the IRS has not been careful with other people’s documents, and they lose sensitive information to nefarious entities too often.

Originally, the IRS sought a plethora of information, ranging from all users. They wanted vault data, account information, security settings, monetary transfer details, and a number of other things.

Will the IRS Request More Information?

However, according to the most recent court document, the IRS could still seek more information regarding certain users. The document detailed, “The United States reserves The IRS Narrows Data Request to Coinbase Users that Transacted For $20,000the right for the Internal Revenue Service to issue Summonses in individual examinations of Coinbase users for the information that it no longer seeks in this proceeding.”

In other words, the IRS could call upon individual Coinbase users who transacted in any amount of Bitcoin. Nonetheless, the IRS may use the present proceeding as a foothold to gather more data in their hunt for people who use Bitcoin or other digital currencies.

Do you believe the IRS will seek more information at a later date? Should Coinbase continue to push back? Let us know in the comments below.

Images via Shutterstock and coinbase.com

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