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In September Bitcoin Magazine reported that nine global banks were pooling resources to fund R3, a next-generation global financial services company focused on applications of cryptographic technology and distributed ledger-based protocols within global financial markets. Several other top banks joined R3 soon thereafter, and five more banks – ING, BNP Paribas, Wells Fargo, MacQuarie and the Canadian Imperial Bank of Commerce – joined in November.

R3 is a next-generation global financial services company focused on applications of cryptographic technology and distributed ledger-based protocols within global financial markets. Supported by most of the world’s major banks (with notable exceptions in China) and powered by a team of high-profile experts, R3 is well-positioned to find and deploy ways for blockchain technology to be used in the mainstream banking and financial world.

Now, R3 Head of Research Tim Swanson says that the company’s software team in London is developing an open-sourced, generic blockchain for banks, The Sidney Morning Herald reports. "Many banks feel they can reduce, or eliminate altogether, various costs, by adopting some sort of common shared ledger and let that proliferate through the industry," said Swanson, who is in Sydney this week to address the Sydney Blockchain Workshops supported by the Commonwealth Bank of Australia.

At the same time, Swanson is persuaded that banks and financial operators need to see solid results before committing to a relatively new and unproven technology.

“It is important not to overhype things, although it is too late on that,” Swanson told The Herald. “At Sibos [the global payments conference held in Singapore last month], everyone was talking about blockchain. Now, deliveries have to be shown to the world in the next 12 months, or people will walk away thinking this is a load of bumf."

Designing the R3 blockchain as open source is a firm decision, but the way in which the new blockchain will operate has not been decided, said Swanson. In particular, it isn’t clear whether the R3 blockchain will be open like the Bitcoin blockchain or a “permissioned” blockchain where only member banks can verify transactions.

Permissioned blockchains would offer the advantages of digital currencies powered by public blockchains – fast and cheap transactions permanently recorded in a shared ledger – without the troublesome openness of the Bitcoin network where anyone can be a node on the network anonymously. Permissioned blockchains for banks and financial operators, supported by Accenture and Digital Asset Holdings CEO Blythe Masters , among others, are being developed by giant Swiss bank UBS , Bitcoin exchange itBit and more.

Swanson said member banks are interested in testing the R3 blockchain for a range of applications, including trade financing, processing syndicated loans, the settlement and clearing of OTC derivatives, and marketplace lending.

"It's a big umbrella," he said. But, even if the banks want to use the R3 blockchain, it will have to get approved by the regulators first.

"Just because you build some tech, it does not mean it will be used by financial institutions or will pass the smell test of regulators," Swanson said. "If neither of those bodies are OK with it, it won't be used. The best way is to start from scratch, and build in [regulators'] specific needs.

"The regulators I have interacted with in multiple countries have been very open-minded in thinking about how some of this tech might be used," Swanson said. "Most regulators I have spoken to are 'cautiously optimistic'; they want to take a rightfully conservative approach to make sure things are delivered. If we do our job right, what this tech can do is allow regulators to have a window into real-time data, which they can read and react to and create policy towards. If regulators have a window into what is going on, they can get a better idea of preventing systemic risks."

Photo Andrew Hart / Flickr (CC)

The post R3 Developing Open Source Blockchain for Banks, says Head of Research appeared first on Bitcoin Magazine.

The North Carolina Commissioner of Banks has released a document specifying in plain English what the virtual currency exemptions are according to its Money Transmitters Act (NC MTA): virtual currency miners; Blockchain 2.0 technologies; multi-signature software; and non-hosted, non-custodial wallets are generally not subject to the NC MTA.

The clarification of its position on virtual currency comes at a time when most states have withdrawn from comment nearly altogether, in a wait-and-see-what-everyone-else-is-doing kind of approach. Or, in the case of New York, BitLicense has addressed some cryptocurrency regulatory issues, though some claim the New York regulations make sweeping generalities on other virtual currency regulatory issues, leaving them wide open to arbitrary interpretation by government officials.

However, the North Carolina move toward being more explicit in virtual currency regulation is in part thanks to the efforts of the Chamber of Digital Commerce.

“North Carolina has taken a leadership role in state-level virtual currency debates and is setting an example to other states to take a more thoughtful and deliberate approach to regulating this nascent industry,” said Perianne Boring, president of the Chamber of Digital Commerce (CDC), in a statement.

The CDC sought to improve understanding on the emerging digital currency technologies and does not want overregulation to drive out innovation by the grass-roots innovators that often bootstrap their technology on modest budgets.

In a prepared statement, the CDC offered its opinion on the proposed regulations:

The North Carolina legislature is considering a bill, at the request of the Commissioner of Banks, that would update the state’s existing Money Transmitter Act to expressly include virtual currency businesses. The Chamber has been actively involved in this process, expressing concern over the proposed legislation’s broad language that could potentially be interpreted to capture certain virtual currency business models that are clearly not engaged in money transmission and should not be regulated as such. The Chamber believes that taking a broad interpretation of money transmission would subject small businesses, start-ups, and technology companies to onerous reporting requirements and hundreds of thousands of dollars in fees and bonding requirements.

The exemptions expressed in the NC MTA offer some of the most unequivocal regulation on how miners, Blockchain 2.0 technology and how other cryptocurrency technology will be regulated in North Carolina. Under the NC MTA, North Carolina miners are not regulated as per the NC MTA FAQ section:

. . . the NC MTA regulates the transmission of virtual currency. It does not regulate the use of virtual currency. A “user” is someone who uses virtual currency to buy or sell goods and services. A merchant who accepts virtual currency as payment for goods or services is a user and does not require a license. A “miner” is someone who receives virtual currency as payment for verifying transactions, typically by providing computer resources to process data. Once the miner has completed its work, the miner generally becomes a “user” of virtual currency.

In contrast, the New York BitLicense does not expressly exempt New York miners from regulation, with one particularly broad statement citing any one of the following activities of “controlling, administering, or issuing a Virtual Currency” as falling under New York regulation.

Under this reading, it not only potentially leaves New York miners in limbo, but also Bitcoin 2.0 technologies wishing to be implemented in New York that involve asset or currency issuing technology, such as colored coins and multi-signature technology that involves partial control over virtual currency.

The NC MTA offers a more direct approach to these issues by expressly generally exempting Bitcoin 2.0 technology and exempting multi-signature software. The NC MTA FAQ section states:

... Blockchain 2.0 technologies refer to the use of the blockchain (or other similar virtual distributed ledger system) to verify ownership or authenticity in a digital capacity. This technology includes such software innovations as colored coins (i.e. coins that are marked specifically to represent a non-fiat-money asset), smart contracts (i.e. agreements implemented on a virtual distributed ledger), and smart property (i.e. property that is titled using a virtual distributed ledger). These uses of the blockchain generally do not involve the use of virtual currency as a medium of exchange. As a result, these software innovations are not regulated by the NC MTA.

... Multi-signature software allows a virtual currency user to distribute authority over his or her virtual currency among multiple different actors. This software requires multiple actors to authorize a virtual currency transaction before the transaction can be consummated. Specifically, a multi-signature provider holds one of two or more private keys needed to authorize transactions. Because the multi-signature provider cannot authorize a transaction alone, this provider is not holding virtual currency on behalf of another, and does not engage in virtual currency transmission by signing transactions on behalf of the user.

Also, the NC MTA explicitly states that it will generally regulate wallet providers:

... A hosted, custodial wallet provider is in the business of storing a user’s virtual currency on a remote computer until such time as the user desires to spend or exchange the user’s virtual currency. The hosted wallet provider typically agrees to safeguard the user’s private keys and make them available at some later date. This custodial function is regulated under the NC MTA.

In contrast, a non-hosted, non-custodial wallet is typically outside the scope of the NC MTA. A non-hosted wallet is a piece of software deployed on the user’s own computer or device that makes the user’s private keys easier to use by the user. In a non-hosted, non-custodial model, the software provider never gains access to the user’s private keys and does not agree to transmit the user’s virtual currency at a later time.

For many, the NC MTA serves not only to provide guidance to the virtual currency industry in North Carolina, but also to the greater virtual currency ecosystem in the United States.

Photo Jayron32 / Creative Commons

The post North Carolina Issues Specific Money Transmitter Exemptions for Some Bitcoin Companies appeared first on Bitcoin Magazine.

UK Only Article:  standard article Issue:  Playing with fear Fly Title:  Bitcoin’s schism Rubric:  A split of the digital currency now seems unlikely, but problems remain Location:  HONG KONG “IT’S time for a group hug,” one of the participants joked at the end. After a long and lively exchange, programmers, who write the software behind bitcoin, and “miners”, whose computers mint the digital currency, had indeed found some common ground. But the rapport between the two camps still seemed tentative. At one point a developer asked whether miners, who now mostly hail from China, would ever collude to steal bitcoin. Suspicions between developers and miners were not the only ones on display at “Scaling Bitcoin”, a conference in Hong Kong this week. Developers themselves have been feuding, too. The event was intended to end a dispute about how to expand the capacity of the bitcoin system. Currently, it can only handle seven transactions per second—a fraction of what conventional payment systems can ...

Bitcoin price corrected sharply after pushing to a new advance high, yesterday. Currently, price is once again advancing. This analysis is provided by xbt.social with a 3-hour delay. Read the full analysis here. Not a member? Join now and receive a $29 discount using the code CCN29. Bitcoin Price Analysis Time of analysis: 14h30 UTC BTCC 1-Hour Chart From the analysis pages of xbt.social, earlier today: The 1-hour chart shows price moving into the space created by two rising Fib lines. The launch higher commenced at 13h00 UTC but quickly ran out of momentum before price could make a new […]

The post Bitcoin Price Up, But No New High appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

 I’ve started trying to pay a lot more attention to New York so I’ve been running a small series of meet ups in Manhattan and Brooklyn for all y’all to come on down and chat. Next week there will be two – the first meeting of BTCBrooklyn and the first “official” startup meeting at WeWork Chelsea. Come to one or both! The bitcoin event will be held at Coinspace… Read More

Whether it's a hacker or a law enforcement official, there's a lot at stake for whoever figures out who Satoshi Nakamoto is.

eCurrency Mint (eCM), a Dublin-based company that has pioneered a new technology that enables central banks to issue digital fiat currency, has received an undisclosed amount of Series C funding from Omidyar Network, a global investment firm launched by eBay founder Pierre Omidyar. The investment helps sets the stage to establish digital fiat currency, which portends numerous benefits over physical currency for bankers, merchants and consumers. The Wall Street Journal also has an article  noting that eCM has met with 30 central banks which are exploring digital currency backed by governments since it lowers the cost of currency. Jonathan Dharmapalan, […]

The post Digital Fiat Currency Technology Nabs Investment, Makes Inroads With Central Bankers appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Someone claiming to be Satoshi Nakamoto has denied being Asutralian Craig Wright in a post to the bitcoin-dev mailing list.

If you don’t want to get sucked into a scam, subject your funds to cyber attack or lose value to currency fluctuation, the Connecticut Better Business Bureau warns you to be wary of bitcoin. The bureau has released a warning to businesses, investors and consumers about using virtual currency. It warns virtual currency is subject to minimal regulation, is susceptible to cyber attacks and is not backed by any government. It warns that con artists are hawking investment swindles with it. Hundreds of thousands of merchants, including major retailers, now accept bitcoin, the bureau notes in its press release. Bitcoin […]

The post Connecticut Better Business Bureau Warns Businesses, Investors And Consumers Against Bitcoin appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

London is where the money is right now, and Britain's London-centric economy doesn't look like changing any time soon, according to a new report from consultancy group EY.

The authors say that pace of economic growth in the capital has been higher than anywhere else for the last three years, and is going to keep outstripping every other region in the country for at least three more.

That may be good for the capital, but not for those in Northern England, as the gap between the north and south is going to keep getting bigger for the time being.

EY's data predictions centre around Gross Value Added (GVA), a measure of how much individual areas, and sectors contribute to the economy. The data show that London's economy has not only easily outstripped the rest of the UK in terms of growth for the last few years, but will also continue to do so until at least 2018.

Mark Gregory, EY's chief economist in the UK said "It’s more of the same for dominant London over the next three years thanks to the city’s outstanding professional services, technology and communications sectors, the return to growth in financial services, and the boost from inward migration."

The report is a pretty big blow to chancellor George Osborne and the government in general, who have been pushing hard to implement their plans for the so-called Northern Powerhouse, a series of measures to devolve power to cities in the north and help drive big economic growth.

The government has invested billions in infrastructure projects like HS2, as well as putting significant resources into devolving power to major northern cities like Manchester, Liverpool, and Sheffield.

"From our projections, it’s clear that we don’t expect the government’s Northern Powerhouse ambitions to have a radical economic impact during our forecast period through to 2018. At best the economic boost will be felt more in the next decade than this one," the report's findings reveal.

London's economy is expected to grow by 3% in the coming three years, nearly twice the 1.6% expected in the north east of England.

What is striking about the graphs provided by EY is that they essentially represent a sliding scale of growth the further away from the capital you get. Scotland, Northern Ireland, Wales, and the north east — the four regions furthest from London are those expected to see the slowest growth in the next three years. Regions nearer to London like the south west, and midlands will see growth levels closer to those in the capital.

London's rampant economy may be bad news for the north of the country, but the ripple effect of success in the capital will be felt in the cities and regions& closest to the capital in the next few years. Other than London, the two biggest growth regions in the coming years will be the south east, and east of England, which will see growth of 2.5% and 2.4% respectively, EY predicts.

Cities within commuting distance of the capital will also get a boost from London's growth, with Gregory citing Reading, Luton and Cambridge as places that will "perform strongly to 2018 as investment continues."

Thursday's report is not the only indicator pointing to London's economy easily outstripping the rest of Britain. It follows on from a big data dump by the Office for National Statistics on Wednesday which showed that London's economy has grown by more than 2.5x the average of other major UK cities since 2009.

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NOW WATCH: How ISIS makes over $1 billion a year

Fresh from launching its Ethereum-powered blockchain platform for customers of its cloud platform Azure, Microsoft has revealed it intends to add Ripple, an interledger protocol to its blockchain-based toolkit. Microsoft originally made the announcement to offer an Ethereum-blockchain solution for its customers after striking a partnership with ConsenSys toward the end of October. The objective was simple. Collaborate with the Brooklyn-based startup to grant Microsoft’s enterprise users the necessary tools to use the Ethereum Blockchain-as-a-Service (BaaS). The applications would allow Azure customers to experiment with blockchain in a sandbox, without any substantial costs or crypto expertise. At the time, two […]

The post Microsoft Looks to Expand Blockchain-Based Toolkit with Ripple Integration appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Fresh from launching its Ethereum-powered blockchain platform for customers of its cloud platform Azure, Microsoft has revealed it intends to add Ripple, an interledger protocol to its blockchain-based toolkit. Microsoft originally made the announcement to offer an Ethereum-blockchain solution for its customers after striking a partnership with ConsenSys toward the end of October. The objective was simple. Collaborate with the Brooklyn-based startup to grant Microsoft’s enterprise users the necessary tools to use the Ethereum Blockchain-as-a-Service (BaaS). The applications would allow Azure customers to experiment with blockchain in a sandbox, without any substantial costs or crypto expertise. At the time, two […]

The post Microsoft Looks to Expand Blockchain-Based Toolkit with Ripple Integration appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

North Carolina has carved out new regulatory exemptions for select bitcoin and blockchain businesses.

Authorities are investigating Craig Wright, the man believed to be bitcoin creator Satoshi Nakamoto, but the reasons why remain murky.

In what has become a staple of the Inside Bitcoins conferences, leading Bitcoin experts will be judging the demos of five companies from South Korea in this year’s Startup Competition. The event takes place at 3 p.m. Korea Standard Time on December 10.

The companies taking part are Bitholla, KoreanBuddy, WageCan, Epsilon Technologies and Coin Trade. The judges are Simon Dixon, Andrew “Flip” Filipowski, Hans Lombardo and Roger Ver.

As a whole, the South Korean bitcoin ecosystem is relatively small when compared to nearby countries such as China and Hong Kong.

“Bitcoin exchange in South Korea is present but is insufficient, bid/ask is very small in quantity yet to deal with large volumes,” said Mike Hwang, CMO of Coin Trade, one of the presenting companies, in an interview with Bitcoin Magazine. “Coin Trade has [a] plan to launch the global Bitcoin exchange platform service from this January 2016,” Hwang explained.

Like many other wallet/exchange providers, Coin Trade is attempting to create an onramp for those who have yet to own bitcoin, plus provide them with the ability to store their bitcoin in a secure wallet and trade it as they desire.

“In South Korea, there are two early movers that dominate the ecosystem, and they are Korbit and Coinplug,” Paul Bugge, co-founder of Bitholla, told Bitcoin Magazine. “Korbit is the most-used exchange, while Coinplug is providing multiple services such as Bitcoin ATMs and selling bitcoin through retail convenience stores. Aside from these two tech companies, the new batch of companies are small pre-seed startups like ourselves.”

Bugge explained that Bitholla is a social networking platform that first launched back in July 2015. “Since that time we have focused more on continued development of the product than pushing for traction,” he explained. “Using Bitholla you can set your own wallet, receiving payment address, make payment requests and send messages. Bitholla is a proximity service so it shows users nearest to you for convenience of paying people around you.”

All bitcoin may need for Korea to adopt it is for it to reach critical mass in other parts of the world.

“Korea is a follower country,” Chris Williams, co-founder of Korean Buddy, told Bitcoin Magazine . “Koreans need to see other countries using bitcoin, or a major company domestically adopt bitcoin or a couple of big celebrity endorsements for the normal person to start using bitcoin.”

He also explained that the ambiguity of regulation in South Korea could be interfering in adoption.

“Is it legal? How is it going to be taxed? Do businesses need a license to accept it?” Williams said, suggesting this uncertainty could be impeding others from trying the technology.

But that hasn’t stopped him from creating a product he believes will help adoption. KoreanBuddy “is a virtual Korean shopping agent service. With this service people will be able to buy anything in Korea with bitcoin. We are a commission-based shopping agent. The shoppers tell us what they want … and we order and ship the items to them.”

He compared his service, which he expects to launch on January 4, to tourist info centers where people go in foreign cities. “We want to be the [tourist info centers] to all foreigners who want to shop online here in Korea. The Korean online shopping info center.”

The market may be small in Korea, but the excitement is intense. Day 1 of Inside Bitcoins had topics that covered bitcoin as an investment, blockchain technology for nontechnical people, and bitcoin trading and analysis. Day 2 of the event, which will include the competition, will have panels on rate of adoption, blockchain loyalty and customers, and a panel on why bitcoin commerce is broken.

Jacob Cohen Donnelly is a consultant and journalist in the bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief. Subscribe to receive a hand picked roundup of the best bitcoin and cryptocurrency news, opinions, and analysis every week sent to you on Monday mornings.

The post Inside Bitcoins to Hold Startup Competition at South Korean Bitcoin Conference appeared first on Bitcoin Magazine.

BTCC Chief Operating Officer Samson Mow indicated that the leading Chinese mining pool and exchange supports an incremental increase of Bitcoin's block-size limit to 8 megabytes in order to buy time for alternative solutions to be developed.

Moreover, Mow believes the Bitcoin industry might opt to raise Bitcoin's block-size limit even if no consensus is found among the Bitcoin Core development community.

“If there is no consensus soon, I could see a situation where stakeholders make a decision to implement a small increase,” Mow said. “Without bigger blocks, a fee market will develop, increasing the cost of transactions, and we believe it’s too soon for that to happen.”

Speaking to Bitcoin Magazine, the COO of the prominent Chinese Bitcoin company formerly known as BTCChina, explained that he believes the long-lasting block-size limit debate is more than a debate regarding the specific block-size parameter. Rather, Mow says, there is a deeper issue at play.

“The core of the issue is actually about what Bitcoin will be,” Mow said. “If we can answer the question of what we all want Bitcoin to be, then the answer to the question of whether the block size needs to be increased will come naturally. Bitcoin can’t be free (as in zero cost), secure, and decentralized all at once and in perpetuity. An extreme view would be: free, secure, decentralized; pick two.”

Given this trade-off, and much like Bitcoin's “decentralists,” Mow considers “secure and decentralized” the most sensible choice in the long term. However, and more closely aligned with proponents of a block-size limit increase, Mow believes that Bitcoin transactions should remain cheap and accessible for now, in order to attract new users. Meanwhile, developers can improve Bitcoin's fee market mechanisms and alternative scalability solutions, such as the Lightning Network.

“Being free and secure is great for getting more people to use Bitcoin and growing the market cap,” Mow said. “As we don’t have a production-ready solution to scale Bitcoin, we should consider increasing the block size so we can drive adoption in the near term.”

An incremental increase to 8 megabytes over four years, as proposed byBlockstream CEO and hashcash inventor Dr. Adam Back, therefore, makes a lot of sense for BTCC. Another favored solution is Bitcoin Core developer Jeff Garzik's BIP 100, which allows miners to vote on the block-size limit up until a hard cap of 32 megabytes.

“The '2-4-8' proposal is a good solution for the short term until we can figure out how to really scale Bitcoin,” Mow explained. “It will let us move incrementally and measure the results carefully. We will only be able to fully understand the impact on the network by scaling block size incrementally. Alternatively, we think BIP 100 is a good option, too, because it is flexible and allows for increases and decreases of the block size as needed. BIP 100 also makes Bitcoin more decentralized in that it reduces reliance on core developers to make adjustments in accordance with market conditions.”

Lastly,BIP 101 is still off the table for BTCC. This proposal, which was implemented in alternative Bitcoin implementation Bitcoin XT last summer, is programmed to increase the maximum block size to 8 megabytes if a threshold of 75 percent of mining power accepts the change. Once activated, this limit is set to double every two years for 20 years, ultimately leading to an 8 gigabyte block-size limit.

While prominent industry members such as Coinbase, Bitstamp and others have publicly backed BIP 101, BTCC believes it will increase the block-size limit too fast and too uncontrollably.

“BTCC will not support BIP 101. It’s simply far too risky to have automatic scaling in the manner proposed,” Mow said. “BIP 101 presumes that its formula for increasing block size is the right one for the next 20 years, which is either incredibly arrogant or incredibly reckless. For me, the key take-away from the talks at Scaling Bitcoin in Montreal is that we really don’t know how the network will perform with larger blocks.”

BTCC was one of the first and is one of the biggest bitcoin exchanges in China, and is available in an increasing number of countries outside of China as well. Additionally, BTCC's mining pool controls some 13 percent of hashing power on the Bitcoin network, while the company also provides a wallet service.

Recently, BTCC launched a new BlockPriority service, which guarantees its customers that their transactions will be included in the first block that the BTCC pool mines.

“BlockPriority was developed to protect our customers from attacks on the network or confirmation delays because blocks are full,” Mow explained. “But the other reason was to emphasize the block-size issue. Although BlockPriority reduces the impact of the block-size debate on BTCC and our users, we still prefer a block-size increase. Ideally, there would be no need for BlockPriority.”

The post BTCC COO Samson Mow: Without Consensus on Block-size Limit, Stakeholders Might Implement an Increase appeared first on Bitcoin Magazine.

Kevin Owocki needed just two hours to create a micropayments tool that could replace ads---and help online publishers make money.

The post Hate Ads? Maybe You Should Give News Sites Some Bitcoins appeared first on WIRED.