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Venture capital firm Blockchain Capital has announced the closure of its second fund used for investments in bitcoin- and blockchain-companies after fundraising $13 million in total. Blockchain Capital, a venture capital firm that set the precedent as the first investment fund for the digital currency industry has sealed its second startup fund for $13 million. […]

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Consensus and governance have been two main topics of conversation in the Bitcoin community over the past year. While making changes to Bitcoin Core may seem trivial to some, the politics associated with certain proposals have caused major issues for the development process.

Bitcoin Developer and Ciphrex CEO Eric Lombrozo gave a talk that mainly focused on potential options for scaling Bitcoin at the Blockchain Agenda Conference in San Diego, and he dedicated a portion of his presentation to the current issues surrounding possible changes to Bitcoin’s consensus rules. Lombrozo covered soft forks, hard forks and a Bitcoin Improvement Proposal (BIP) that could eventually make it easier to deploy soft forks on the network.

Problems with Changing Bitcoin’s Consensus Rules

Before getting into possible solutions, Lombrozo first discussed the current issues with coming to consensus on new rules for the Bitcoin network. Although Bitcoin’s decentralization is what makes the network valuable to its users, the lack of a central decider who can dictate the rules of the network has been an issue. Lombrozo explained:

“Whenever we want to change the consensus rules, this presents a serious problem because we don’t really want to just force new rules on the network. There’s no central authority that can do this really. We need to have a way for the network to adapt to the new rules, decide whether or not it wants to adjust to these rules, and to make sure that everyone still ends up agreeing in the end.”

Some have stated a benevolent dictator is needed for Bitcoin, and former Bitcoin Developer Mike Hearn intended to take on that role for the alternative implementation of the Bitcoin protocol known as Bitcoin XT. While Bitcoin software clients are able to have benevolent dictators behind the code, the ability for users to choose which code to run on their own computers makes the idea of a benevolent dictator of the Bitcoin protocol an impractical notion.

Hard Forks and Soft Forks

Lombrozo next talked about hard forks and soft forks. These forks take place whenever the rules of the network are changed, and they’re currently the only option for updating the protocol.

Lombrozo: “Soft forks happen when blocks that used to be valid become invalid according to the new rules. And with these kinds of forks, if a majority of miners agree that the new rules are going to be in effect, then that particular chain is going to outgrow the other one and it will become the main chain.”

Lombrozo said that the hard fork process is a much more difficult proposition.

“In the case of hard forks, this is not the case. We have invalid blocks that become valid under the new rules, and this creates a network fork that can go on forever. So this is a much, much more difficult situation for us to fix.”

Bitcoin has not experienced any intentional hard forks since the earliest days of its existence. There is currently a large portion of the community that would like to see a hard fork take place in order to increase the block size limit. Bitcoin Classic is an upcoming software release that implements this change.

BIP 9: Version Bits with Timeout and Delay

One of the ways Lombrozo believes changes to Bitcoin’s consensus rules can be made easier is by implementing BIP 9. The proposal intends to make soft fork deployment an easier process by allowing multiple forks to be deployed at the same time. This is achieved through changes to how the “version” field in blocks is interpreted by nodes on the network.

Lombrozo described BIP 9 during his presentation at Blockchain Agenda San Diego:

“One thing that I’ve been working on recently is a thing called version bits, BIP 9, which is a mechanism to allow for simpler soft fork deployments. This allows miners to signal when they’re ready to enforce the new rules, and it allows you to set up a parallel soft fork. So now, several features are being deployed at the same time without necessarily knowing which one is going to be activated first. It provides a warning system, so old nodes can upgrade when they see new rules are going to be [activated].”

Although soft forks may be easier to deploy in the near future, Lombrozo added, “Hard forks are still hard.”

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.

The post BIP 9: Enabling Easier Changes and Upgrades to Bitcoin appeared first on Bitcoin Magazine.

The former CEO of bitcoin gift card service Gyft, has announced that his latest startup venture, Civic, has received $2.75m in funding.

Japanese exchange Bitflyer has announced a 50 million Yen investment into a new fund which will see Osaka-based IoT startup Sivira as the first company to benefit from the fund. According to the exchange, this is in an effort to support and encourage the growth of blockchain businesses in Japan. Bitflyer has termed this new investment activity, “Block Chain Angel […]

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BTCC, one of the world’s largest bitcoin exchanges by market share, has recently reported unusually high transaction volume following the recent slump in values of global stock and commodities.

“The trading volumes we saw over the past few days are not the highest we have seen since 2011, but we expect greater trading volumes in the future as bitcoin increases in popularity among all assets,” BTCC CEO Bobby Lee told Bitcoin Magazine.

According to the trading data provided by BTCC, its exchange has processed more than 46,880 bitcoin over the past seven days, settling more than $1.83 million, at around $391 per bitcoin.

However, Lee told Bitcoin Magazine that the demand of bitcoin among Chinese investors gradually increased due to the underwhelming performance of all asset classes and commodities globally. Because of the economic slump in the United States, the Southeast Asian region, and China, he predicts the demand for bitcoin to continue rising in the upcoming weeks.

“The recent increase in trading volume cannot be traced to any single factor. Rather, there was a confluence of global factors that contributed to increased demand for bitcoin, including the recent slump in global stock and commodity prices,” he explained.

One factor that could have possibly led to the explosive demand for bitcoin in China is the announcement of one of the biggest China stock market crash warnings, as the government stated economic growth in 2015 declined to 6.9 percent.

President Xi Jinping officially requested officials to stabilize short-term growth, as the country’s economic growth was the slowest recorded in 25 years.

“China’s reported growth rate for 2015 raises many questions rather than providing full reassurance about the economy’s true growth momentum,” Eswar Prasad, a professor of trade policy at Cornell University and the former head of the International Monetary Fund’s China division said in an interview.

Legendary Swiss investor Marc Faber, who in the entirety of his career discussed the trending value of precious metals such as gold also expressed his optimism toward bitcoin in a recent interview.

“When you talk about doom and gloom for this year, 2016, I have to point out that in 2015, with the exception of people that held bitcoins, the performance of all asset classes has been poor,” said Faber.

While it is difficult to speculate the trend of bitcoin price and trading volumes in China, Bitcoin experts and exchanges are optimistic about the rising demand for bitcoin and expect a constant increase in trading volume over the next few months. The price of bitcoin at most major bitcoin exchanges have also recovered, to a certain extent, from the Mike Hearn exit, demonstrating a strong performance amid global economic stability and economic slump.

The post BTCC Reports High Bitcoin Transaction Volumes as China’s Economic Growth Hits 25-Year Low appeared first on Bitcoin Magazine.

The ongoing block size dispute has catapulted to the center of attention again. One of the most talked-about developments is Segregated Witness, of which a public testnet iteration was launched last week. The innovation as recently proposed by Blockstream co-founder and Bitcoin Core developer Dr. Pieter Wuille is the 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 opposed by the 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 in order to utilize Segregated Witness once rolled out.

In this, part 3 of a series: Breadwallet CEO Aaron Voisine.

The Other Side of Segregated Witness

Wuille’s Segregated Witness proposal is set to improve the Bitcoin network in several ways. For one, it effectively increases the block size to some 1.75 megabytes to 2 megabytes. But interestingly, many developers are more excited about the other improvements Segregated Witness has to offer.

This is true for Voisine as well.

“Segregated Witness is worth the effort even if it provided no block size increase,” Voisine said. “It has lots of advantages. The thing I think is most interesting about SegWit soft-fork technique is the ability to add new signature types such as Schnorr signatures. This means that if elliptic curve algorithms were broken, for instance by quantum computers in the future, we could fix that with only a soft fork, by adding a new quantum resistant digital signature algorithm. The fact that we get a quick, effective bump in block space is just a bonus.”

As such, Voisine plans to roll out support for Segregated Witness on the popular Bitcoin wallet app for iOS.

“The implementation is not especially difficult, and it’s opt-in for wallet developers,” Voisine explained. “Existing wallets that don’t upgrade will continue to work, they will just need to pay higher fees because their transactions will be larger than Segregated Witness transactions. With Breadwallet, we’ve started working on our implementation and should be ready to try it out on the Segregated Witness testnet over the next few weeks.”

Soft Forks vs. Hard Forks

The most notable difference between Bitcoin Core and Bitcoin Classic is that the former prefers a soft-fork increase in block size through Segregated Witness. A soft fork 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.

Voisine said he sees merit in a soft fork as well – though he notably expressed support for Bitcoin Classic, too.

“I think we should do the Segregated Witness soft fork first,” Voisine said. “It will be quicker to achieve consensus. However, Segregated Witness will only give us something like an 80 percent capacity increase, and hard forks take a long time to deploy. The hard fork needs to be readied, and roll-out started quickly after. While I’d prefer it if Bitcoin Core does that, it appears Bitcoin Classic is the leading option for deploying a hard fork. As such, we do support that project.”

For more information on Segregated Witness, see Bitcoin Magazine’s three-part series on the subject, or part 1 and part 2 of this development series.

The post Breadwallet CEO Aaron Voisine: SegWit Soft Fork First, Block Size Hard Fork Later appeared first on Bitcoin Magazine.

Venture capital firm Blockchain Capital has raised $13m for its second investment fund for bitcoin and blockchain technology ventures.

Japanese bitcoin exchange BitFlyer has created a new startup fund aimed at investing in companies working with blockchain tech.

Bitcoin price slammed down to support early today before embarking on a persistent rise that is now correcting. A directional move is imminent and today’s Fed rates announcement may be the watershed. 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 […]

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Milo Yiannopoulos, the technology editor for Breitbart.com, a global news site for independent and conservative-leaning thinkers, admits he first believed the recent media coverage that bitcoin was dead due to Mike Hearn’s declaration that such was the case. But Yiannopoulos, who is also an entrepreneur, quickly realized that bitcoin’s price has been stable and that […]

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Although bitcoin is often touted as a global currency, the reality is that some countries may find it more useful than others. While moving toward more generalized blockchain technology is the trend in the developed world, there are still plenty of people in certain parts of the world who don’t have much interest in permissioned ledgers.

Bitso CEO Pablo Gonzalez was recently interviewed on Trace Mayer’s Bitcoin Knowledge Podcast, and one of the main topics of conversation was why Gonzalez decided to build a Bitcoin exchange in Mexico. Mayer clearly understands Bitcoin’s potential in Latin America, as he noted the following near the beginning of the interview:

“BitPay’s transaction volumes are growing everywhere. They’re growing in North America; they’re growing in Europe; they’re growing in Asia; but far and away, Latin America is where the big growth is coming with BitPay.”

During their conversation, Gonzalez was able to explain why this phenomenon exists, at least from a Mexican perspective.

Latin America Is Waking Up to Bitcoin

Before getting into the specifics of why Bitcoin makes sense for Mexico, Gonzalez briefly touched on Latin America as a whole. At first, he talked about the general lack of Bitcoin adoption in the region, with the notable exception of Argentina:

“Other than Argentina, where there’s a vibrant community and there’s been a vibrant community for a few years, in Latin America the community was very small. At the beginning, the volumes were small and the growth was slow. For the past year, Latin America has been waking up to this technology.”

Although the developed world is used to having relatively stable currencies and mature financial systems, that is not the case in much of Latin America.

“There are so many holes to fix with this technology, and that’s driving a lot of the growth,” Gonzalez noted.

Mexico’s Demographic Is Perfect for Bitcoin

Moving on to why Bitcoin makes sense for Mexico, Gonzalez first focused on the demographics of the country. He explained that Mexicans do not use bank accounts or credit cards anywhere near as frequently as their American counterparts across the border:

“In a place like Mexico you have a very low population that’s banked – seven out of ten Mexicans do not have a bank account and only twelve percent of the population has credit cards. So most of the economy is a cash economy.”

Although banking and credit cards are not prevalent in Mexico, cell phones are everywhere.

“In Mexico, you have extremely high cell phone adoption. Almost every Mexican now has a cell phone,” Gonzalez noted. “Smartphones are growing even faster than in the U.S.”

Xapo CEO Wences Casares has discussed the issues with cash-based economies in the past, and the fact that Mexico has such massive adoption of mobile phones and smartphones means the infrastructure is there for Bitcoin to succeed.

Mexicans Don’t Trust Banks or the Government

The factors behind Mexico’s low adoption of bank accounts do not necessarily include a lack of access to traditional financial systems. Gonzalez noted that there are trust issues in the region when it comes to banks and the government.

“The thing is that people do not trust these institutions – to put their money in these institutions,” he said. “And they feel like they’re being watched. There’s a cultural issue.”

Although Gonzalez noted that the Mexican peso has been one of the most stable currencies in the region in recent history, he did point out that the country has had issues with devaluations in the past. The Bitso CEO pointed out one specific case during the interview:

“We’ve had a couple of times where the Mexican peso, in 1994 for example, went from three pesos per dollar to eleven. So we’ve had a couple times where it’s been really bad.”

Although some Mexicans are unbanked by choice, it is true that gaining access to a bank account or the global financial system can be difficult for many citizens. Gonzalez noted the issues for those Mexicans who do want to be banked:

“There’s also a location issue. If you look at all of the municipalities in Mexico, only half of them have a financial institution in them. Whether it’s a bank or even a Western Union. Even if people want to be banked, they have to travel to these physical locations and get a bank account.”

The popularity of Bitcoin in certain Latin American countries may have been overblown in the past, but it’s clear that both Mayer and Gonzalez are still bullish on the peer-to-peer digital cash system’s chances of widespread adoption in the region. Bitcoin has long been touted as a solution for the unbanked population around the world, but this promise of bringing large numbers of new users from developing countries to the blockchain has not yet come to fruition.

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.

The post Pablo Gonzalez on Why Bitcoin Makes Sense for Mexico appeared first on Bitcoin Magazine.

A Europol report that establishes a review of EU member states and the Europol in the aftermath of the terrorist attacks that struck Paris in November 2015 has found no confirmed evidence that suggest Bitcoin is used for terrorism financing. A report by Europol – the European Union’s law enforcement agency, has aggregated and established […]

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Kaiko's Jon Southurst takes aim at the mainstream media and their reporting, or misreporting, on bitcoin and blockchain tech.

If you had created something that had gained popularity across the world, would you stop working on it? That’s what Satoshi Nakamoto, the anonymous founder of Bitcoin, did. People have many different theories as to why he did that. Numerous news outlets – like Newsweek and Wired – have tried to uncover the real Satoshi […]

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Australian bitcoin miner Bitcoin Group’s official public float on the Australian Securities Exchange (ASX) fell significantly short of its goal of raising $20 million AUD. The cryptocurrency miner raised $367,902.20 AUD. Melbourne-based Bitcoin Group, a miner that has repeatedly attempted to become the world’s first publically floated Bitcoin trading company had the date of closure […]

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Europol has found that there is no evidence to back up reports linking the Islamic State (IS) to the use of bitcoin.