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A bitcoin wallet startup based in India has raised $1m in Series A funding from a group of angel investors.

Editor's Note: This is a guest post by Jed McCaleb, co-founder and CTO of Stellar.org.

Stellar is a fully decentralized payment network that allows anyone to send and exchange any currency. It can act as a decentralized exchange for bitcoin.

Why Stellar? After years of working in the fintech space, I realized that the world’s financial infrastructure is fundamentally broken, leaving billions without resources. As a result, Joyce Kim and I co-founded Stellar.org to create an open standard for financial technology. Since anyone can participate in the network, it can be particularly helpful for the 2 billion unbanked people worldwide.

Since the launch of Stellar, we’ve announced several partnerships, spoken at the United Nations and unveiled a new consensus algorithm and codebase. Along with other contributors to Stellar Core — Professor David Mazieres, Graydon Hoare and Nicolas Barry — I had the task of designing this new codebase. I’m excited to share some of the motivations behind the design decisions and to talk about projects that Stellar’s future might hold.

Upgrade to a simple, modular network

One of the key principles that facilitated organic growth of the Internet was its low-level simplicity. With this in mind, we designed the upgraded network with complexity moved to the edges. With simple primitives that can be composed in different ways, the system is robust and maintainable, yet still expressive and powerful.

The upgraded Stellar network is more secure, scalable and modular. We separated the network’s responsibilities into multiple components to make them easy to understand, maintain and extend. Stellar Core is now less than half the size of the previous codebase. It stores data in a standard SQL database, making it easier for people to get information out of the Stellar network and interact with it using standard tools and libraries. Graydon’s presentation provides granular details on the movement and locations of data in the Stellar system.

Safety first

One of the main reasons we refactored the code was to implement the new Stellar Consensus Protocol (SCP), which has a unique, provably correct federated consensus algorithm. Distributed systems are complex, and achieving consensus in a decentralized network is even more complex — it requires a fully understood and proven consensus algorithm like SCP, which ensures the network will not fork.

For maximum safety, we simulated many failures through unit and integration tests. We also used an interface and model that connects Stellar Core to Kyle Kingsbury's Jepsen tool for testing distributed systems against network partitions. In all these cases, the network halts until quorum can be re-established, at which point it picks up and carries on. The network must halt in these conditions. The other option is to fork, meaning two sides of the network disagree about the state of the world. Not forking is a critical feature of any distributed, decentralized consensus algorithm and the one we've spent the most time trying to get right.

Smart contracts

Following our overarching design philosophy, we focused on creating simple components that users can combine in complex ways to get the behavior they need. Our approach to smart contracts has been to keep most of the logic outside of the core system so that Stellar Core can scale globally.

The two key components of smart contracts on the Stellar network are multi-signature support and the ability to batch operations. Accounts can now have multiple signers with various weights, so you can simply set up m-of-n accounts or other, more complex, access schemes.

Transactions are now a series of operations that affect the state of the world. For example, a single transaction can trivially say A sends to B if B sends to C. These abstractions, coupled with the network’s distributed exchange, produce a surprisingly rich vocabulary for contracts. Bonds, escrow, collateralized debt and the Lightning Network are all possible on the network.

Community-run network

The live network is entirely run by community participants outside Stellar.org. We want to ensure that the network does not wind up operated or administered primarily by us. Stellar.org contributes to the open-source core protocol, but everything beyond that — everything that actually makes the network useful and valuable — is up to the community!

Looking toward the future

We're currently developing tools and protocols that live above the base Stellar protocol and support future features such as messaging and private transactions.

I have a long list of interesting ideas for things that could be built on Stellar. I jotted down a few of my favorite ones here: https://github.com/stellar/docs/blob/master/other/things-to-build.md

Honestly, I'm most excited to see what people come up with on their own — I know there will be amazing ideas that we haven't even thought of yet.

Jed McCaleb is co-founder and CTO of Stellar.org. In 2000 he developed e-Donkey, one of the largest file-sharing networks of its time. He later created Mt. Gox, the first bitcoin exchange, which was subsequently sold and re-coded by its current owners. Find Jed online on GitHub, LinkedIn, and Twitter.

The post Stellar's Jed McCaleb: What's New on the Upgraded Stellar Network appeared first on Bitcoin Magazine.

Bitcoin posted its most stable year in 2015. Does the emergence of regulated bitcoin exchanges have something to do with it? Cameron Winklevoss, president and co-founder of Gemini, thinks it does.   As an officer for a regulated exchange, Winklevoss is not an unbiased observer. Nonetheless, Finance Magnate deemed his input relevant in exploring what impact regulated exchanges […]

The post Gemini’s Winklevoss: ‘Institutionalization’ Of Bitcoin Trading Has Begun appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

2015 was the year of the blockchain for banks.

Financial institutions became obsessed with figuring out how to use the blockchain — the software that underpins bitcoin — for everything from "smart" contracts to issuing shares to clearing payments.

Blockchain is a name for the software underpinning bitcoin that uses complex cryptography and distributed ledgers — copies of records in multiple places — to regulate, record, and enable transactions using bitcoin. In effect, it lets users — the "crowd"" — police the monetary system without any central bank or regulator.

Over 40 top investment banks have joined an industry-wide consortium looking at how the technology can be adapted to traditional finance and Goldman Sachs has declared that the technology could change "well, everything."

William Mougayar, a partner at new Toronto-based venture capital firm Virtual Capital Ventures, says the technology has the potential to be the "new internet" for financial services, heralding a huge wave of innovation and re-invention. (He's not the only one who's compared blockchain to the internet.)

Mougayar has authored an extensive slideshow on what exactly the impact of blockchain and blockchain companies could be on financial services, complete with advice for banks on how to tackle the tech. He offered to share it with BI — check it out below.

Bitcoin use in Venezuela and Brazil is increasing, but the populations use the currency in different ways.

According to Rodrigo Souza, core developer at Blinktrade, the exchanges in both countries have more than 10,000 registered users.

At a glance: Brazil

The Brazilian exchange is FoxBit. FoxBit is a result of partnership between FoxBit Serviços Digitais and BlinkTrade Inc, a technology provider for Bitcoin exchanges around the world.

According to Blinktrade, the majority of bitcoin users in Brazil are either using bitcoin to invest in the technology, to trade for profit, or to purchase bitcoin in order to trade them for U.S. dollars, often because they have a bill to pay in American dollars or plan to travel).

In Brazil, there are four other bitcoin exchanges leading Bitcoin use in the country. The people of Brazil are generally more skeptical and curious about Bitcoin than those in Venezuela, according to Souza..

“As of now,” says Souza,”Brazilian regulators said that they won't regulate Bitcoin because regulating also means that the government is placing a stamp of approval; they also believe the technology is currently in its early stages and doesn't represent a risk to the financial system.”

The central bank of Brazil in the past has said that bitcoin currency is too volatile and not backed by any government. Additionally, the Brazilian tax authorities have stated that traders should declare their bitcoin and should report any capital gains.

Of the five largest Brazilian banks, three of them haven’t announced their position on bitcoin. The two other banks are very against bitcoin, and have shut down or blocked bank accounts for trading bitcoin.

At a glance: Venezuela

The Venezuelan exchange SurBitcoin is a result of partnership between VK Inversiones/Vipples and BlinkTrade.

“Venezuelans on the other hand, are a completely different story. In order to understand Venezuela we have to understand that our numbers only reflect 10 percent of what is going on in Venezuela,” says Souza.

Venezuela is home to a vibrant bitcoin community, where people often trade goods and services for bitcoin. “Bitcoin is generally viewed by Venezuelans as a positive innovation,” adds Souza.

“Venezuela has much bigger problems to solve in their country than their Brazilian counterpart,” Souza said.

Venezuelan government officials have never communicated their stance on the technology, but Venezuelan law is very clear on its definition of money, and bitcoin doesn't fit in that definition. Bitcoin is considered property rather than money in Venezuelan law.

SurBitcoin was approached by Venezuelan authorities under the allegation of illegal money exchange.

“Since Bitcoin is not considered money under Venezuelan law, we were fine,” says Souza, “They did not take further action.”

Since the creation of SurBitcoin Exchange in August of 2014, SurBitcoin has given new users 100 bolivares worth of BTC upon opening an account in order for them to learn how the technology works. In 2014, the 100 bolivars represented close $1.30. Today,15 months later, SurBitcoin still provides users with 100 bolivares, but that amount is now worth $0.11. The average salary at that time was close to $250 per month. The average salary in Venezuela is close to $20 per month. Even ATMs in Venezuela limit withdrawals to 20,000 bolivars, or about $22 USD at time of publication.

“But since the Venezuelan economy contains such strong price controls,” says Souza, “this also means they pay the cheapest electricity bill in the planet. We know a mining farm operator who has close to 1 petahash of power and his electricity bill is close to $20 per month. The average electric bill for 320kw consumption is close to 6 cents. This means that a person mining bitcoins with old equipment at home makes more money than an engineer working 160 hours a month.”

This makes it a fruitful environment for mining bitcoin. Most bitcoin sold in Venezuela are either mined in Venezuela or sent by Venezuelans living abroad to help their families.

“I would say that 10 percent of our 10,000 users are de-facto bitcoin miners. Additionally, a lot of people buying bitcoins in large quantities on SurBitcoin are buying because it is the only way for them to import new miners,” says Souza.

Additionally, many of SurBitcoins’ users are people turning their savings into bitcoin. Many of their users buy bitcoin in very small portions consistently in order to save money. Since the only way to get U.S. dollars in Venezuela is through the black market, there are many scammers who take advantage of the situation to rob people.

“If authorities find out people are doing this, they will not stop the operations, but rather ask for a bribe to pretend they never saw it…. purchasing bitcoins turns to be the only safe, legal investment in Venezuela where people can safely buy using their bank account,” Souza said.

The post Bitcoin in South America: Why Venezuela Has an Active Bitcoin Mining Community appeared first on Bitcoin Magazine.

Gem, a Venice, California-based blockchain platform provider, announced today that it had completed its Series A funding, raising $7.1 million led by Pelion Venture Partners. KEC Ventures, Blockchain Capital, Digital Currency Group, RRE Ventures, and other investors rounded out the fundraising round.

“We are using the funds to grow the company to meet the growing mainstream demands for blockchain technology and expertise,” said Micah Winkelspecht, CEO and Founder of Gem, in an interview with Bitcoin Magazine.

Gem enables companies that might not otherwise have an advanced understanding of blockchain technology to easily deploy it with a modular platform that scales. The company was launched in 2014, and its first product was a multisignature API for developers. Now, the company is focusing its energy on promoting the technology in healthcare, finance and other industries.

“We have been monitoring the blockchain industry looking for a company that could bridge the divide between enabling developers and their projects, while also advancing blockchain use cases in larger enterprises After spending time with Gem team and their customers, we became convinced they have the foresight, traction and leadership necessary to connect the enterprise with the efficiencies and benefits of blockchains,” said Ben Dahl, a partner at Pelion Venture Partners, in a released statement.

Along with the fundraising, Dahl and Scott Kriz, CEO of Bitium, have been appointed to Gem’s board of directors.

2015 was the strongest year from a fundraising perspective for bitcoin and blockchain companies. This announcement makes Gem the first company to raise money in 2016.

“I’m really excited about blockchain ledger systems, and Gem is a great example of a company that’s full leveraging the potential of that technology to transform the services industry,” said Jeff Parksinson, partner of KEC Ventures, in a statement.

All told, Gem has raised $10.4 million in seed and Series A funding.

Jacob Cohen Donnelly is a consultant and journalist in the Bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief.

The post Gem Raises $7.1 Million in Series A to Meet Demands for Enterprise Blockchain Technology appeared first on Bitcoin Magazine.

Bitcoin trading is prolonging the sideways price path despite several opportunities, during the past few days, to break out of the consolidation into either advance or decline. What is the market waiting for? This analysis is provided by xbt.social with a 3-hour delay. Read the full analysis here. Not a member? Join now and receive […]

The post Bitcoin Trading Cautiously Into XT Implementation Day appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Bitstamp has partnered with precious metal traders Moro & Kunst to provide its customers with the option to purchase gold using bitcoin.

Microsoft’s blockchain -as-a-service (Baas) endeavor now sees four new partners signing up for the service that will be made available for the software giant’s clients on Azure, its cloud platform. Microsoft has been on a heightened drive lately with signing up new partners for its BaaS offering. In its most recent update, the software giant […]

The post BitPay Joins Microsoft’s Blockchain Platform Among New Partners appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

The idea is to create a single worldwide network that can not only unite all digital currencies, but all companies and individuals who use those currencies.

The post The Plan to Unite Bitcoin With All Other Online Currencies appeared first on WIRED.

This writer has received more complaints about Cryptsy since his last story on the subject than he has billing notices. Seriously. Some of them were messages of support, some were further complaints. Most of them had a common theme: Cryptsy won’t let the customer withdraw his or her funds. Within the last 24 hours, Cryptsy […]

The post Cryptsy: Mt. Gox Junior? appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

  Indian bitcoin startup Zebpay has raised $1 million in funding from several investors in the country. The funds will be used to promote the cryptocurrency in the country of over a billion people and in the setting up of a dedicated blockchain laboratory for research. Indian bitcoin wallet startup Zebpay, has successfully raised a […]

The post Indian Wallet Startup Zebpay Raises $1 Million to Promote Bitcoin appeared first on CCN: Financial Bitcoin & Cryptocurrency News.