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What is the state of bitcoin and blockchain technology as of early 2016? This question was originally answered on Quora by Susan Athey.

In an interactive branded paper on their website, Deloitte singles out blockchain as being the “Enigma. Paradox. Opportunity.” Deloitte, being an internationally recognized firm that provides audit, consulting, tax, and advisory services to some of the largest companies in the world clearly wants in on the potential action. Discussion continues to swirl around Bitcoin and […]

The post Deloitte Delves Into The Blockchain Conversation with Interactive Branded Paper appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

CoinDesk examines the current bitcoin scaling debate through the eyes of Bitcoin Core, the project's main developer team.

Imagine a world where personal data isn’t just something that consumers give away – a world where terms of service agreements read more like shareholder agreements or term sheets, a world where your data makes you money.

Earlier this week during a lecture on Bitcoin Engineering at Stanford University, 21.co CEO, Balaji S. Srinivasan, presented this exact world, one in which data is owned and monetized by the individual. He laid out an in-depth use case whereby Instagram could become the world’s largest stock photography site – with each user making money.

Personal Data as an Asset Class

In 2011, the World Economic Forum, in collaboration with management consulting firm Bain & Company, published a report targeted at executives in the telecommunications industry titled, “Personal Data: The Emergence of a New Asset Class.” In the report, they described “personal data as the new oil of the Internet and the new currency of the digital world.”

To substantiate their claim the authors present an estimate which states, “by 2020 the global volume of digital data will increase more than 40-fold.” They go on to say that, “beyond the sheer volume, data is becoming a new type of raw material that’s on par with capital and labour.”

The implications of data as an asset are profound. When data is currency, cash is expendable. Success is measured by growth, not profits:

• “Twitter Finally Turns a Profit, but User Base Growth Is Slowing”
• “Facebook Turns a Profit, Users Hit 300 Million”
• “Amazon Never Makes Money but No One Cares”
• “YouTube: 1 Billion Viewers, No Profit”

If data is the new currency, it leads one to conclude that the companies who store our personal data are themselves actually banks.

Breaking the Bank

Web searches, page visits, online purchases, tweets, SMS messages, emails, phone calls, photos, videos, GPS coordinates – this is the data that makes up our digital lives.

For the past decade consumers have sacrificed their privacy, building giant banks of data for companies without any upside exposure to the value that they have created. Thanks to the Bitcoin Protocol and the 21 Bitcoin Computer this no longer has to be the case.

Billions of photos are shared every day by hundreds of millions of people using smartphones. Between the rapid development of high quality camera phones and the decreased cost for cloud storage, sharing photos from all around the world has become effectively free. Building a library of stock photos once required an army of photographers working around the globe; now this naturally occurs over social networks such as Instagram.

In 2012, Instagram came to the above realization and updated their terms of service:

You agree that a business may pay Instagram to display your photos in connection with paid or sponsored content or promotions without any compensation to you.—2012 Instagram Terms of Service change (since reverted)

The idea of selling users photos without their consent and without compensation wasn’t very popular and the company quickly reversed their decision.

“What Bitcoin brings to the table is a programmatic way of doing small, fast, international payouts to anyone on the Internet. If you can take a photo on Instagram, you can get paid for it in bitcoin. You can take your own data and turn it into your own money.” Dr. Srinivasan told the class.

Bidirectional Payments

In addition to allowing consumers to monetize the data they produce, Bitcoin has created a world where the consumer doesn’t have to trade personal data for content. Consumers can instead pay for content up front in small amounts of money known as micropayments. This has previously not been viable because credit cards are not capable of handling such tiny transactions.

Even if these companies wanted to pay for personal data, the international banking system doesn’t have the infrastructure in place to process small transactions. This is why so many companies, such as Google with its AdSense program, put revenue thresholds that must be reached before a payout.

With Bitcoin, highly granular transactions can be executed with ease. Further, every piece of content on a web page can be charged a different amount. Using this article as an example: When someone views the article, payments could be sent directly to the photographer, the author and the publisher, who are likely three separate entities.

Still, with bitcoin alone, having to manually pay three parties each time you view a Web page is a burden and isn’t likely to be adopted. That’s where 21.co comes in. Their device maintains a continuous supply of bitcoin, allowing users to automatically make micropayments on the Web.

The Bigger Picture

Monetizable data is not just images, articles, reports and videos.

Take your genome, arguably the most valuable and personal data a person has. In the future, it is likely that every person will have a complete copy of their genome. That is data that could be useful to pharmaceutical companies looking to create new, revolutionary lifesaving drugs.

Utilizing the 21 Bitcoin Computer, Joe Pickrell created a gateway for genomic data. In exchange for payment, a researcher could rent one’s genomic data.

Awesome @joe_pickrell developed a #Bitcoin based @21 gateway for genomic data. Want to see my SNP? pay me a Stashoi! https://t.co/cpPPCSIFbc

— Yaniv Erlich (@erlichya) December 4, 2015

One-time payments are not sufficient when it comes to genomic data. If a company is able to find a cure for cancer based on the genome of an individual, that individual should be able to generate dividends off that success.

Final Thoughts

Fundamentally, these ideas are not new. In his 1980 work “Literary Machines,” Ted Nelson (he coined the words “hypertext” and “hypermedia”) introduced the concept of transclusion, a technique computer scientists use to create a large document from snippets of other documents. Nelson originally intended for transclusion to act as a mechanism by which users would make micro-payments to the individual content creators of a document.

Unfortunately, Nelson was 30 years early. Nelson’s original vision for transclusion, similar to the HTTP “402 Payment Required” status code, was not technically possible until the creation of the Bitcoin Protocol by Satoshi Nakamoto in 2008. Further, it was not truly viable in a production setting until the introduction of the 21 Bitcoin Computer late last year.

The post Bitcoin and the Future of User Monetizable Data appeared first on Bitcoin Magazine.

On January 23, Ethereum overtook Litecoin for the first time to become the third-largest digital currency when looking at total coin market cap. This is after a two-week period where the Ethereum market cap has grown by more than 80 percent.

The price of Ethereum is on an equally steep upward trend, growing more than 300 percent since the beginning of January; 24-hour volume has grown from around $300,000 to upwards of $10 million. This is in comparison to the average daily Litecoin trading volume of $1 million and is up to a quarter of the daily trading volume of Bitcoin, which is $39.5 million. It looks like the market cap of Ethereum, which is $280M will soon rocket past the market cap of Ripple, which is $300M and the second-largest market cap for a digital currency, because of Ripple’s lower average daily trading volume of $3 million.

The announcement by Mike Hearn, who recently joined the development team for R3 CEV, that “the bitcoin experiment has failed,” may have been a factor in the demand for alternative digital currencies like Ethereum. R3 also announced that it completed a distributed ledger that connects 11 of the world’s premier banks in a private peer-to-peer blockchain using Ethereum technology and hosted by Microsoft Azure on a virtual private network.

“Ethereum is a well-known open source technology in this space,” Brad Novak, chief technology officer for R3 consortium-member Barclays Investment Bank, commented.

In addition, the Ethereum Foundation’s William Mougayar says, “There are probably a dozen banks doing stuff on Ethereum already without even being part of a consortium. You have to pay money to be part of it [R3], and it’s still at the blueprint architectural stage.”

Ethereum is in a unique position for a digital currency. It is an application layer, where developers can create decentralized applications such as smart contracts using the Ethereum APIs, available for free at GitHub. Ether, which is Ethereum’s digital token, powers the network and is analogous to “gas” that powers the Dapps (Decentralized Apps).

Ethereum eliminates the block size problem that is plaguing the Bitcoin community today, as Ethereum blocks are able to change in size based on the volume of transactions that need to be processed.

Since it was announced last year by Vitalik Buterin, there has been an increasing interest from developers who are testing the Ethereum technology. For example, Augur is a decentralized prediction market built on top of the Ethereum blockchain, where users can get “precise forecasts on any topic – from politics to commerce, from technology to entertainment,” according to the Augur website.

Many of the applications that are being developed on Ethereum are still in their early stages, either with betas released or still in their development phase. Anthony Di Iorio, one of the co-founders of the project and the head of the Toronto Ethereum Meetup group, tells Bitcoin Magazine, “It’s great to see the community growing and more and more businesses realizing the potential of Ethereum and incorporating it into their prototypes.”

Michael Gord is the founder of Bitcoin Canada and the McGill Cryptocurrency Club. While at McGill, Michael organized the Bitcoin Airdrop events where he gave hundreds of students their first bitcoin.

The post Ethereum Overtakes Litecoin in Market Cap after Continued Upward Trend appeared first on Bitcoin Magazine.

On January 23, Ethereum overtook Litecoin for the first time to become the third-largest digital currency when looking at total coin market cap. This is after a two-week period where the Ethereum market cap has grown by more than 80 percent.

The price of Ethereum is on an equally steep upward trend, growing more than 300 percent since the beginning of January; 24-hour volume has grown from around $300,000 to upwards of $10 million. This is in comparison to the average daily Litecoin trading volume of $1 million and is up to a quarter of the daily trading volume of Bitcoin, which is $39.5 million. It looks like the market cap of Ethereum, which is $280M will soon rocket past the market cap of Ripple, which is $300M and the second-largest market cap for a digital currency, because of Ripple’s lower average daily trading volume of $3 million.

The announcement by Mike Hearn, who recently joined the development team for R3 CEV, that “the bitcoin experiment has failed,” may have been a factor in the demand for alternative digital currencies like Ethereum. R3 also announced that it completed a distributed ledger that connects 11 of the world’s premier banks in a private peer-to-peer blockchain using Ethereum technology and hosted by Microsoft Azure on a virtual private network.

“Ethereum is a well-known open source technology in this space,” Brad Novak, chief technology officer for R3 consortium-member Barclays Investment Bank, commented.

In addition, the Ethereum Foundation’s William Mougayar says, “There are probably a dozen banks doing stuff on Ethereum already without even being part of a consortium. You have to pay money to be part of it [R3], and it’s still at the blueprint architectural stage.”

Ethereum is in a unique position for a digital currency. It is an application layer, where developers can create decentralized applications such as smart contracts using the Ethereum APIs, available for free at GitHub. Ether, which is Ethereum’s digital token, powers the network and is analogous to “gas” that powers the Dapps (Decentralized Apps).

Ethereum eliminates the block size problem that is plaguing the Bitcoin community today, as Ethereum blocks are able to change in size based on the volume of transactions that need to be processed.

Since it was announced last year by Vitalik Buterin, there has been an increasing interest from developers who are testing the Ethereum technology. For example, Augur is a decentralized prediction market built on top of the Ethereum blockchain, where users can get “precise forecasts on any topic – from politics to commerce, from technology to entertainment,” according to the Augur website.

Many of the applications that are being developed on Ethereum are still in their early stages, either with betas released or still in their development phase. Anthony Di Iorio, one of the co-founders of the project and the head of the Toronto Ethereum Meetup group, tells Bitcoin Magazine, “It’s great to see the community growing and more and more businesses realizing the potential of Ethereum and incorporating it into their prototypes.”

Michael Gord is the founder of Bitcoin Canada and the McGill Cryptocurrency Club. While at McGill, Michael organized the Bitcoin Airdrop events where he gave hundreds of students their first bitcoin.

The post Ethereum Overtakes Litecoin in Market Cap after Continued Upward Trend appeared first on Bitcoin Magazine.

On January 23, Ethereum overtook Litecoin for the first time to become the third-largest digital currency when looking at total coin market cap. This is after a two-week period where the Ethereum market cap has grown by more than 80 percent.

The price of Ethereum is on an equally steep upward trend, growing more than 300 percent since the beginning of January; 24-hour volume has grown from around $300,000 to upwards of $10 million. This is in comparison to the average daily Litecoin trading volume of $1 million and is up to a quarter of the daily trading volume of Bitcoin, which is $39.5 million. It looks like the market cap of Ethereum, which is $280M will soon rocket past the market cap of Ripple, which is $300M and the second-largest market cap for a digital currency, because of Ripple’s lower average daily trading volume of $3 million.

The announcement by Mike Hearn, who recently joined the development team for R3 CEV, that “the bitcoin experiment has failed,” may have been a factor in the demand for alternative digital currencies like Ethereum. R3 also announced that it completed a distributed ledger that connects 11 of the world’s premier banks in a private peer-to-peer blockchain using Ethereum technology and hosted by Microsoft Azure on a virtual private network.

“Ethereum is a well-known open source technology in this space,” Brad Novak, chief technology officer for R3 consortium-member Barclays Investment Bank, commented.

In addition, the Ethereum Foundation’s William Mougayar says, “There are probably a dozen banks doing stuff on Ethereum already without even being part of a consortium. You have to pay money to be part of it [R3], and it’s still at the blueprint architectural stage.”

Ethereum is in a unique position for a digital currency. It is an application layer, where developers can create decentralized applications such as smart contracts using the Ethereum APIs, available for free at GitHub. Ether, which is Ethereum’s digital token, powers the network and is analogous to “gas” that powers the Dapps (Decentralized Apps).

Ethereum eliminates the block size problem that is plaguing the Bitcoin community today, as Ethereum blocks are able to change in size based on the volume of transactions that need to be processed.

Since it was announced last year by Vitalik Buterin, there has been an increasing interest from developers who are testing the Ethereum technology. For example, Augur is a decentralized prediction market built on top of the Ethereum blockchain, where users can get “precise forecasts on any topic – from politics to commerce, from technology to entertainment,” according to the Augur website.

Many of the applications that are being developed on Ethereum are still in their early stages, either with betas released or still in their development phase. Anthony Di Iorio, one of the co-founders of the project and the head of the Toronto Ethereum Meetup group, tells Bitcoin Magazine, “It’s great to see the community growing and more and more businesses realizing the potential of Ethereum and incorporating it into their prototypes.”

Michael Gord is the founder of Bitcoin Canada and the McGill Cryptocurrency Club. While at McGill, Michael organized the Bitcoin Airdrop events where he gave hundreds of students their first bitcoin.

The post Ethereum Overtakes Litecoin in Market Cap after Continued Upward Trend appeared first on Bitcoin Magazine.

Everyone from Nick Szabo, who developed the concept of smart contracts, to Blockchain Capital Managing Partner Brock Pierce has been touting Bitcoin’s value as a vehicle for international money transfers lately, but it appears that TransferWise CEO Taavet Hinrikus has not received the memo. Hinrikus was recently on a panel with MasterCard President of International Markets Ann Cairns at the World Economic Forum in Davos, and he did not seem threatened when asked about the new Bitcoin-based alternatives to his service, such as Align Commerce, that have popped up over the past year.

Although Hinrikus appeared to be bullish on blockchain technology, he said the Bitcoin experiment is nearly over.

Bitcoin Is “Becoming Dead”

When asked directly for his thoughts on using Bitcoin for international money transfers, Hinrikus conceded that the idea sounds exciting in theory; however, the TransferWise CEO believes this digital peer-to-peer cash system will work only if more people have bitcoin wallets. He explained:

“I think [Bitcoin-powered money transfers] are super exciting, and in a world where we all have a bitcoin wallet in our phones, that actually might work. But how do we go from a world where nobody has a bitcoin wallet to a world where everyone has a bitcoin wallet? That’s the question that I haven’t been able to figure out.”

When viewing Bitcoin as a system for money transfers, Hinrikus noted the costs associated with each end of the process. In his view, these added costs make the idea more expensive than originally thought. He stated:

“If you think about it today, getting money into Bitcoin is a pain in the ass. Getting money out of Bitcoin is similarly a huge pain. You end up paying typically half a percent or one percent on both ends. It’s a process which takes multiple days, so I think Bitcoin – I’m kind of sorry to say it but – it seems that experiment is becoming dead pretty quickly.”

This response from the TransferWise CEO does not sound dissimilar from a Medium post made by former Rebit.ph Head of Product Luis Buenaventura. After co-founding and working at Rebit.ph for over a year, Buenaventura came to the conclusion that Bitcoin does not make international remittances cheaper due to the costs associated with the “last mile” on the recipient’s end.

Blockchain Is More Exciting

Hinrikus also echoed some of the same points he made when asked about Bitcoin at last year’s TechCrunch Disrupt. Specifically, he feels the growth of Bitcoin has been mostly driven by greed. He stated:

“It seems to me that what has been driving Bitcoin has been greed – similar to a lot of stuff that has been driving the banking system. People bought bitcoin because they thought it was going to be worth more tomorrow … I kind of don’t have much hope for bitcoin anymore. With blockchain, I think that’s much more exciting. I think about – could we see a world where blockchain disrupts MasterCard?”

Although Hinrikus noted his appreciation for blockchain technology, he made no indication that his company is currently looking at implementing (or even testing) any sort of distributed ledger technology. On the other hand, MasterCard’s Cairns said that the credit card processing giant is currently testing out blockchains for a variety of possible use cases.

BitFury CEO Defends Bitcoin

The day after the panel discussion featuring Hinrikus and Cairns took place, BitFury CEO Valery Vavilov was interviewed in the same exact spot. He took on the role of defending Bitcoin against the pessimism from the TransferWise and MasterCard representatives.

During his interview with TechCrunch’s Matt Burns, Vavilov explained why the public Bitcoin blockchain still has a key role to play in this new world of permissioned, distributed ledgers:

“Bitcoin is the most secure blockchain. The Bitcoin blockchain is the public blockchain. If we split Bitcoin and blockchain – blockchain is the ledger. Blockchain is the database. Bitcoin is the vehicle and the security. Bitcoin is today secured by 750 petahashes of computational power. Let’s look at an analogy. Imagine the top 500 supercomputers in the world. The Bitcoin blockchain security is more than 3,000 times bigger.”

In other words, Bitcoin’s open, permissionless features are not found on any of the private blockchains currently in development by R3, Digital Asset Holdings, or any other startup. Bitcoin is also backed by an exponentially larger amount of hashing power than any other public blockchain.

The only requirement for someone to receive bitcoin is for them to have a bitcoin wallet and access to the Internet. This is a much lower barrier to entry than anything attached to the legacy banking system – at least when it comes to digital payments. Bitcoin’s censorship resistance also makes it useful for getting around capital controls in more economically-restrictive countries.

TransferWise may not see the value of Bitcoin now, but at least three Bitcoin startups (Align Commerce, Abra, and Freemit) believe they’re missing out on a huge opportunity. Only time will tell who has it right.

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 TransferWise on Bitcoin and the Battle for International Money Transfers appeared first on Bitcoin Magazine.

CoinDesk's 2016 State of Bitcoin and Blockchain report summarizes key trends, data and events from 2015 and includes predictions for 2016.

Bitcoin price is under the control of the bears. Cynical sellers are pulling us lower according to their sense of Bitcoin’s value. Bitcoin Core is 100% censorship resistant and will never go away. 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 Price Cynicism Pulling Us Down appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

The People’s Bank of China (PBOC) is studying the prospect of issuing its own digital currency and is aiming to roll out a product as soon as possible, Bloomberg Business reports. PBOC, China’s central bank, is persuaded that a state-backed digital currency could reduce capital outflow, money laundering and tax evasion, make economic activity more transparent and improve the efficiency of global transactions.

The creation of China’s state digital currency was discussed at a meeting in Beijing, attended by digital fintech experts and high level authorities including PBOC Governor Zhou Xiaochuan and Deputy Governor Chair Fan Yifei. The PBOC’s official statement is in Chinese only, but Chinese speakers have confirmed that the automatic translation provided by Google is reasonably accurate and understandable.

A research team including experts from Citigroup and Deloitte has been looking into digital currencies since 2014 and has achieved some encouraging initial results. This team is now expected to “set up clear strategic objectives for digital currencies issued by the central bank, and develop key technologies and applications aimed at an early launch of a digital currency issued by the central bank.”

Hao Hong, chief China strategist at the Bank of Communications, said China’s attitude toward digital currency had been shifting, South China Morning Post reports. In 2013, the central government issued negative statements on Bitcoin and limited its use by banks and payment service providers, but now it seems that the wind is changing.

“The attitude toward digital currency in China has been shifting, it has been surprising,” said Hong. “Back then it was quite hostile. Now, facing capital outflow pressure, a digital currency would make it easier to check the capital flow.”

An estimated $843 billion of capital flowed out of China in the 11 months through November, according to a Bloomberg estimate, and capital outflow results in rising interest rates and economic slowdown. Foreign transactions in a digital currency based on blockchain technology would be permanently recorded in a tamper-proof blockchain and traceable back to the persons involved. However, it seems likely that, if the Chinese government introduces an official “ChinaCoin,” wealthy Chinese will just use other means to take capital out of the country, including next-generation privacy-preserving digital currencies like Zcash .

According to the South China Morning Post article, a digital currency could be popular with Chinese consumers, as payments for goods and services are increasingly becoming digital with new applications and online players entering the potentially lucrative sector.

“[A cryptocurrency] can be popular among the people [if] it’s endorsed by the government and convenient to use with new technologies,” said Zhang Weichao, director of mining at leading Chinese Bitcoin operator Huobi.

“Right now it’s too early to see what effect PBOC’s move will have on China’s Bitcoin community,” said Wang Chun, co-founder of the mining pool F2Pool. “They could decide to let Bitcoin co-exist with its own digital currency, or chose to crack down on it.”

Besides being useful as a means to control capital outflow, a state cryptocurrency would also allow China to challenge the hegemony of the U.S. dollar.

“The U.S. dollar has the luxury of pricing everything, every commodity, in U.S. dollars,” said Hong. “That is why it can maintain a power grip on the global economy.” China’s efforts in this direction have made little progress so far, and a state-backed digital currency could help. However, Hong cautioned that would take time.

Ecuador became the first nation in the world to issue a government-backed digital currency last year, telling all of the country’s banks to get on board. There have been rumors of “Fedcoin” in the United States and some kind of “Eurocoin” in Europe. Yanis Varoufakis, the former Greek finance minister, proposed a cryptocurrency dubbed Future Tax Coin (FT-Coin). Other countries including the Philippines are studying the possibility of rolling out official digital currencies. According to some Chinese economists, digital money is the future, and China should take the lead.

“China must seize the first-mover advantage to get on board,” said Hu Zhibing, the chief operating officer at Haoyouqian, a crowd-funding startup in Beijing. “The central bank would be blamed by the whole nation if other countries moved ahead while China lagged behind.”

If Chinese authorities choose to push ahead and proceed with the creation and deployment of ChinaCoin, it seems plausible that the impact could be quite disruptive.

The post ChinaCoin: People’s Bank of China Plans National Digital Currency appeared first on Bitcoin Magazine.

In addition to 15 previously filed blockchain-related patents, Bank of America is now reportedly drafting up another 20 patents that will be submitted to the US Patents and Trademark Office (USPTO) later this month. While numerous reports from regulators, settling houses and even governments talk up the potential of Bitcoin’s underlying technology – the blockchain, […]

The post Bank of America Drawing up 20 More Cryptocurrency & Blockchain Patents appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Bitcoiners like to defend their community by proclaiming it just that – a community. But, what if in a court of law, Bitcoin could be defined as a corporation. What would this mean for Bitcoiners? If the so-called Bitcoin Community were declared a corporation, the precedent would then be set for online creation communities to […]

The post Bitcoin as a Corporation appeared first on CCN: Financial Bitcoin & Cryptocurrency News.

Blythe Masters, formerly of JP Morgan, has raised $54M for her company Digital Asset Holdings. Apparently she changed some of the naysayer’s minds about Digital Asset Holdings. The group focuses on blockchain solutions that address, in Masters’ words, “real world financial problems including settlement latency, risk, managing down operational costs, reducing the need for capital requirements” […]

The post Blythe Masters Takes The Blockchain To Primetime appeared first on CCN: Financial Bitcoin & Cryptocurrency News.