Coin News

Bitcoin nanopayment platform SatoshiPay has announced the completion of its seeding round that raised a total capital investment of €360,000, with blockchain-startup investor Coinsilium bringing in €150,000 to the round. Blockchain technology investor Consilium, a London-based firm known for supporting blockchain-startups at their early stages as companies has revealed its latest investment via a regulatory […]

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The long-lasting block-size dispute has catapulted into the center of attention again. One of the most talked about developments right now is Segregated Witness, of which a public testnet iteration waslaunched last week. The innovation as recently proposed by Blockstream co-founder and Bitcoin Core developer Dr. Pieter Wuille is a centerpiece of a scalability “roadmap” set out by Bitcoin Core.

But relying on Segregated Witness as the next step of Bitcoin’s scalability process is contended by recently launched Bitcoin Core fork Bitcoin Classic. Rather than a Segregated Witness soft fork, Bitcoin Classic prefers to deploy a “cleaner” hard fork in order to increase the block-size limit to 2 megabytes.

To find out where the development community stands on this issue, Bitcoin Magazine reached out to library and wallet developers, those who will need to do the heavy lifting needed to utilize Segregated Witness once rolled out.

In part 1: Blocktrail CTO and BitcoinJS co-maintainer Ruben de Vries.

Segregated Witness

Wuille’s Segregated Witness proposal offers several improvements to the Bitcoin network. The benefit that probably received most attention is its potential to effectively increase the block size to some 1.75 megabytes to 2 megabytes. Interestingly, however, many developers are more excited about the other improvements Segregated Witness has to offer, which they believe makes it well worth the effort.

De Vries, too, emphasized that Segregated Witness offers more than just added block space:

“Even if we wouldn’t use the deployment of Segregated Witness to increase the block size in a nifty way, it fixes various issues that would benefit Bitcoin tremendously, and should be deployed as soon as possible, regardless. Being able to increase the block size as a side effect presents us with a chance we should clearly embrace, especially considering that it can be done on almost the same timeline as alternative block-size increase proposals.”

One of the main arguments against Segregated Witness, is that it presents an “ugly” workaround of existing code. This would lay an added burden on library and wallet developers, as they would need to re-write their code to utilize the innovation.

De Vries believes this effort is manageable, however. Most of the work needs to be done by library maintainers, a group of developers who essentially provide a standard for all wallets using a specific programming language. All other wallet developers using that programming language merely need to add some minor details.

“It’s not very complicated if you already know the ins and outs of the Bitcoin protocol, which a library maintainer will,” De Vries said. “To grasp the concept when you don’t is a bit harder. But then again, if you don’t know the ins and outs of the Bitcoin protocol, there’s no real reason for you to know the details of Segregated Witness in the first place.”

De Vries himself has been developing for the Segregated Witness testnet for several weeks now, and the cross-platform Blocktrail wallet will support Segregated Witness transactions as soon as it is rolled out on the Bitcoin network.

“I started experimenting with the Segregated Witness testnet even before it entered the public phase, in order to start working on support for a bunch of libraries I contribute to a lot,” De Vries said. “Getting as many libraries to support Segregated Witness as soon as possible will help a lot with adoption, and, as a result, will make it so that we can get the increased block-size effect of Segregated Witness as soon as possible.”

On Soft Forks and Hard Forks

Perhaps the most notable difference between Bitcoin Core and Bitcoin Classic is that the former prefers a soft fork increase through Segregated Witness. This can be employed through miner-support only, and is, therefore, considered a safer solution by Bitcoin Core developers. The Bitcoin Classic team, however, believes these risks are overblown, and considers a hard fork more desirable.

For De Vries, the solution is clear-cut, however. He believes a soft fork through Segregated Witness is the best way forward for now.

“Considering how much the Bitcoin Core development team has done for us in the past year, I feel that pushing them aside by forking is an insult to their expertise: They consider a hard fork too dangerous right now,” De Vries said. “Moreover, it could result in them losing their motivation or even quitting. It’s simple, really. Segregated Witness fixes various issues that should have been in Bitcoin from the start, and, as a side effect, we can avoid a hard fork for now, which is great.”

For more information on Segregated Witness, see Bitcoin Magazine’s three-part series on the subject.

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Brendan Eich, co-founder of Mozilla and creator of the JavaScript programming language, has developed a new browser that will block unwanted web ads and replace them with ads generated by Brave. Eich’s goal is to make the browsing experience easier, to allow users to see ads they are more likely to want to see, and […]

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The Depository Trust & Clearing Corporation (DTCC), the post-trade clearing and settlement service that powers every single trade in the $22 trillion U.S. stock market has called for an industry-wide collaboration to adopt blockchain technology. A new white paper issued by the DTCC has called for a coordinated effort among the financial industry to realize […]

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“In a telling move about the future of money, PayPal has added a Bitcoin entrepreneur to its board of directors,” CNN Money reports. Fintech entrepreneur Wences Casares joined the board on Tuesday, PayPal announced Wednesday. The move has been interpreted as the beginning of a new phase in PayPal’s timid love story with Bitcoin, which could conceivably culminate in open adoption.

“We’ve entered a period of unprecedented disruption in payments and financial services driven by the mass adoption of mobile technology and the digitization of cash,” said PayPal President and CEO Dan Schulman. “Wences’ long and successful track record as an international fintech entrepreneur with a focus on next-generation payment and cryptocurrency is a perfect fit for PayPal at this time. His unique line of sight into the future of commerce is ideally aligned with PayPal’s vision of transforming the management and movement of money for people around the globe.”

The fact that cryptocurrency and the transformation of money transfer are explicitly mentioned together in PayPal’s official announcement is a telling sign. According to CNN Money , the appointment of Casares to the PayPal board of directors is yet another vote of confidence in Bitcoin’s technology. PayPal, the leading company in Internet-based payments, had already shown interest in Bitcoin payments and the distributed blockchain technology that powers the Bitcoin network, and taken the first cautious steps toward integrating blockchain technology in its operations.

One of the clearest indications of PayPal’s interest in Bitcoin is Paypal’s subsidiary Braintree. The company, which was acquired by eBay (the former parent company of PayPal) for $800 million in September 2013 and became part of PayPal after the split, permits merchants to accept Bitcoin payments seamlessly in partnership with Coinbase. The Braintree Bitcoin payment service is currently in public beta.

“No doubt a financial technology visionary, Casares has become best known for pioneering Bitcoin in recent times and that’s exactly why PayPal has added him to its board,” notes TechCrunch. “It’s exciting to see PayPal, the daddy of online payments and a true disruptor when it started out, open itself up to these new possibilities.” Casares is well positioned to help PayPal in identifying and acquiring promising Bitcoin companies and unlocking new blockchain-based opportunities for its business worldwide.

“I am honored to serve on the board of an iconic global company dedicated to driving the transformation of money on a global scale,” said Casares. “I look forward to working together with the PayPal board and leadership team to continue to deliver their compelling vision.”

Casares is the CEO of Xapo, a Swiss company that offers Bitcoin digital wallets and debit cards. Xapo, which has raised $40 million to date, announced in May that it was relocating its corporate headquarters to Zurich, Switzerland, to take advantage of the country’s strong privacy and banking secrecy. Xapo’s primary deep cold storage vault is also located in Switzerland, with additional secure sites deployed around the globe.

The company takes aggressive initiatives to promote Bitcoin payments worldwide. For example, in April Xapo partnered with social network Taringa!, the second-most-popular social network after Facebook and one of the main destinations in the Latin American Web, to compensate its content-providing members in bitcoins, offering a service that could boost Bitcoin adoption in the region.

Members of the Bitcoin community have wondered if this is just the first of ambitious and aggressive initiatives by PayPal. For example, PayPal could integrate Xapo in its own operations, to complement Braintree’s merchant-facing infrastructure with appropriate consumer-facing services. Another possibility is that Xapo could be acquired and become a PayPal company.

Photo Geoff Livingston / Flickr(CC)

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China’s central bank, the People’s Bank of China (PBOC) has revealed that it is in discussions to launch its own digital currency. What does this mean for Bitcoin? A statement by the PBOC about issuing its own digital currency is making its way around the globe and has people wondering about the consequences..  Here are some of […]

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Bitcoin price has been trading sideways near $400 and 2650 CNY all day, and the price pattern resembles the kind of structure we see prior to both advance and decline. 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 […]

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Blockchain technology has been a huge topic of conversation at this year’s World Economic Forum in Davos, Switzerland, and the subject was brought up by TechCrunch’s Matt Burns during a panel that featured TransferWise co-founder and CEO Taavet Hinrikus and MasterCard President of International Markets Ann Cairns. Both participants on the panel seemed to agree with the popular sentiment of dismissing Bitcoin while embracing its underlying technology, and Cairns even stated that MasterCard is testing the blockchain in its labs.

At one point during the panel discussion, Hinrikus questioned whether MasterCard could eventually be disrupted by blockchain technology.

MasterCard Doubts Bitcoin Longevity

When Matt Burns brought up the topic of Bitcoin, Cairns was quick to dismiss the digital cash system. She started by criticizing Bitcoin’s usefulness as a currency:

“I absolutely see a future for blockchain,” she said. “Bitcoin is just something that uses blockchain, and I don’t think the current construct of Bitcoin particularly has longevity. It behaves more like a commodity than a currency.”

The MasterCard official then took aim at the transaction speeds on the Bitcoin network. Although Bitcoin transactions are broadcast instantly, it takes an average of five minutes for a transaction to be confirmed in a block (a new block is mined every 10 minutes).

“It’s very slow,” Cairns said. “I mean, you read a lot of stuff in the press, but right now, it takes about 10 minutes to do a transaction. Imagine you’re waiting for a train. Do you just want to go through the barrier and tap your card, or do you want to wait 10 minutes for your bitcoins?”

Although Cairns claims about confirmation times are true, there are a number of workarounds for this problem currently in development. Off-chain solutions, such as Stash and the Lightning Network, currently hold the most promise in this area. There are also plenty of options for merchants to accept unconfirmed transactions.

In addition to her points on the technical workings of Bitcoin, Cairns also discussed the issue of the cryptocurrency’s association with Silk Road and other controversial use cases.

MasterCard Testing Blockchains

When asked about blockchain technology, as opposed to Bitcoin specifically, Cairns’ tone completely changed.

“We’re looking at blockchain right now in all sorts of different ways in our labs because we think blockchain is basically a value transfer system,” she said. “It’s pretty neat, actually. There’s nothing wrong with using new algorithms to actually move money. We think that’s a great thing; it’s just how you actually manifest it and make it work, along with the way you have to handle all of the world’s regulations to make it effective, safe and fast, that is the issue.”

Although Digital Currency Group (DCG) founder Barry Silbert is quite bullish on bitcoin as a currency, that didn’t stop MasterCard from investing in the Bitcoin-focused investment company late last year. MasterCard Chief Innovation Officer Garry Lyons recently told Business Insider, “[DCG] is connected to 15 different others and they have their fingers in the right pies, so we’ve got the right engagement right now to see people experimenting with the underlying tech.”

TransferWise CEO Questions MasterCard President

Much like MasterCard’s Cairns, TransferWise CEO Taavet Hinrikus is more interested in blockchain technology than Bitcoin. In fact, he thinks MasterCard should, perhaps, be worried about this new innovation.

“With blockchain, I think that’s much more exciting,” Hinrikus said during the panel. “I wonder – could we see a world where blockchain disrupts MasterCard?”

Cairns responded that MasterCard would simply adopt blockchain technology if it were that disruptive. “That’s why we’re looking at it,” she said.

The MasterCard president added that the company does not care much about the technology behind payments as long as people continue to use their network.

“It doesn’t make any difference to us if we’ve incorporated it into part of the way we move money [around] our network, the actual swiping, tapping or sending a message over a phone or computer; it’s just a form factor. That doesn’t matter,” she said. “It’s the interconnectivity that matters and the safety and security.”

Any company involved in payments, banking or other aspects of finance now has the blockchain on its radar, but only a handful of them are interested in Bitcoin’s public, open and permissionless ledger. The interoperability between Bitcoin and permissioned ledgers will be a trend to watch in the coming years.

Kyle Torpey is a freelance journalist who has been following Bitcoin since 2011. His work has been featured on VICE Motherboard, Business Insider, RT’s Keiser Report, and many other media outlets. You can follow @kyletorpey on Twitter.

Photo World Economic Forum / Creative Commons

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The Committee of Economic and Monetary Affairs (ECON) will engage in a public hearing to discuss virtual currencies in the European Parliament today. The live stream for the event can be found here. The 90-minute session will include discussion among academics, prominent members of the European digital currency- and blockchain-space and representatives of the banking […]

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Space Kenya Networks Limited,  a Kenyan web development company, recently announced the launch of its blockchain incubator BitHub. CCN spoke with the director of Space Networks Kenya and founder of BitHub to discuss the crypto- and bitcoin-space in Kenya.  In a statement found on the  website, BitHub describes its mission as: “Solving problems using innovative […]

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A widely anticipated US dollar rally is caught between the proverbial Horns of the Bull, leaving the dollar in grid-lock. Meanwhile, the mainstream media turns up the volume of their cries of market woes – just as the decline pauses for a breather. This post is powered by the Bitcoin Trading Network xbt.social – CCN29 […]

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The Cato Institute's Jim Harper discusses how bitcoin needs level-headedness from its community to survive as a non-political digital currency.

Lawmakers in the State of Wyoming have proposed a bill to require that cryptocurrency be treated the same as fiat currency under the state’s money transmitter’s act, according to the Wyoming Tribune Eagle. The purpose of the bill is to encourage bitcoin-friendly companies to want to do business in the state. Under the current law, […]

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