Monthly Archives: March 2015

Requests for Bitcoin Startups

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We’re seeing a wide variety of startups build Bitcoin applications using our APIs. The four types of Bitcoin applications that are most clearly emerging worldwide to date are p2p tipping, cross-border payments, international microfinance and reputation platforms.

There are many other types of Bitcoin applications that we’re excited about but haven’t seen consumers widely adopt yet. Here’s 10 ideas for Bitcoin startups that we would love to see more developers working on:

Email- Email applications that eliminate spam by requiring bits for email delivery

Video- Video applications that require one-click micropayments to view video content

News- News sites that eliminate advertising for users by requiring bits for time spent viewing content

Crowdfunding- Global crowdfunding applications that allow project creators to raise funds from around the world

Payouts- Applications that allow creators or service providers anywhere in the world to get paid out from a global audience

Remittances- Global remittance applications that enable worldwide cross-border payments

Ecommerce- Bitcoin focused merchant directories that offer a beautiful UI for bitcoin-focused consumers

Communication Networks- Applications that incentivize nodes to provide resources to communications networks by rewarding bits for participation (reducing consumers dependence on large, centralized companies to communicate)

Identity- Distributed identity applications that give people control of their own identity, built on top of a distributed identity protocol (e.g. Open Name)

Attribution- Attribution applications that allow users to prove ownership of data, built on top of an attribution protocol

These ideas are intended to help stimulate thinking about what can be done with Bitcoin and the blockchain. We think its likely that some of the most successful Bitcoin applications will be ideas that we haven’t thought of yet and our goal is to support the next group of entrepreneurs by providing the infrastructure that makes it easy to build consumer and merchant-oriented Bitcoin applications.

With over 7000 developers now using the Coinbase APIs, we’re excited to see what new applications continue to emerge.

10 Bitcoin Misconceptions The Average Joe Makes

Although a number of us may identify as crypto-currency pioneers or trailblazers, it is without question that the industry as a whole is very young. The self-proclaimed “gurus” may know the ins and out of Bitcoin, but what about your average joe? Because the every-day person knows so little about crypto-currencies, it is easy for misconceptions and myths to spread like wildfire. As many traders are probably aware, these fallacies can then affect the already volatile market of crypto-currencies. So without further ado, here are the 10 biggest misconceptions and myths about Bitcoin.

1.) Bitcoins are essentially worthless

While it may be true that bitcoins are not “backed” by anything, neither is the US dollar. However, bitcoins are not a fiat currency either (that being a currency that is declared value from the government). So what really is it that gives bitcoins value at all? There isn’t a simple answer. Firstly, bitcoins can be viewed as an investment. Although there are differences between a bitcoin and a stock, each can be invested and traded. Supply and demand will ultimately fuel this aspect of bitcoins’ value. At the same time, bitcoins can–and are–used in other ways. Bitcoins, like any other form of currency, can be spent in exchange for goods and services.. Bitcoins are similar to the US dollar in the sense that there is a “faith” that is needed for them to be used. That faith maintains the “worth” of bitcoins, and will ideally continue to grow with stability and a growing sense of confidence in the industry.

2.) Because anyone (in theory) can make bitcoins, there will be heavy inflation.

For those who are unfamiliar, bitcoins are made through the process of “mining.” Although this is an oversimplification, computers are actively attempting to solve complex math equations. When the answer is found, the individuals running the computers– or the “miners”–receive the bitcoins. Because the computers are competing against other computers, the every-day computer user would most likely never profit from attempting to mine bitcoins. Extremely fast machinery is needed to solve the equations, and that’s without mentioning the electrical costs to running those computers. So back to the question: why won’t there be heavy inflation? The answer is straightforward. The amount of available bitcoins to “mine” decrease by 50% every 4 years, and will eventually cap off at 21 million bitcoins. Therefore, the controlled supply will equate to a deflation effect–avoiding inflation all together.

3.) Bitcoins are illegal.

While it is true that bitcoins are practical and often used for illegal goods and services (let’s not forget the infamous Silk Road), they serve many viable–not to mention legal–functions. Bitcoin has been widely popularized as a form of remittance, as workers attempting to send money home are often slapped with high fees from companies such as Western Union. Although there are a number of countries that have made bitcoins illegal, it is few and far between. A complete list can be found here.

4.) Bitcoins are easily stolen and unsafe to hold. 

Although the industry has definitely had its fair share of disasters and thefts, such as the “disappearance” of over $450,000,000 worth of bitcoins on the Mt. Gox bitcoin exchange, bitcoins aresafe to hold and use.

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Just like any other currency, there are risks that a person takes. Just like money can be lost, bitcoins can too. That is why passwords to online bitcoin “wallets” should be written down somewhere offline, and offline wallets should be backed up. More information can be found here on how this is done.

5.) Bitcoins create more opportunities for criminals and thieves.

In life, there will always be people who attempt to take advantage of others. Just like credit cards and other payment systems, bitcoins can be abused and stolen. With that being said, it is much easier for a criminal to steal credit card information than bitcoins. As long as one’s bitcoins are securely stored, he or she is  not at any risk.

6.) The industry for Bitcoin has peaked; there is nothing left to offer. 

While the case may be made that crypto-currencies have seem astronomic growth in the last few years, the general consensus is that the industry is in its baby stages. Just like the 90’s boom with the internet, the best is yet to come.

7.)  Bitcoin is a pyramid scheme.

The answer is straightforward here, so explanation is short. A pyramid scheme works by having a single main company or organization, which in turn promises profits for the investors. Bitcoin, however, has no authoritative body to do that. It is a decentralized currency.

8.) Bitcoins are nearly impossible to use.

Although this was true in its very early history, vendors and websites accepting bitcoins has grown exponentially–and will continue to do so in the future. Through websites like cheapair.com that allow the consumer to purchase flights with bitcoins, or overstock.com which accepts bitcoins for a wide range of goods such as furniture or watches, the ways to use bitcoins is rapidly expanding.

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9.) The government will shut down Bitcoin.

As previously touched on in #8, countries have taken different approaches to crypto-currencies. While this is true, it is a complete myth that Bitcoin will be shut down by governments. Firstly, it would b a next to impossible to do. The time, money, and effort to “shut down” the industry would be unpractical, so therefore there is no serious threat for Bitcoin to be at risk.

10.) Bitcoins are difficult to purchase.

Similar to the misconception that bitcoins are nearly impossible to use, there is also the myth that they are extremely difficult to purchase. Bitcoins can be easily purchased with credit cards through services such as Virwox or Trucoin. There has also been an increase in popularity of bitcoin ATMs, which allow consumers to purchase bitcoins with cash. Bank transfers are also a viable option for those looking to purchase bitcoins. Money orders, gift cards, and personal checks can also serve as ways to purchase bitcoins. The complete list of ways can be found here.

The post 10 Bitcoin Misconceptions The Average Joe Makes appeared first on CoinBuzz.

Mt Gox’s Mark Karpeles Leaks Damning DEA Agent Emails

Mark Karpeles, CEO of the now defunct Mt Gox bitcoin exchange, has made public an email exchange between former DEA officer Carl Mark Force IV and himself.

 

Screenshots of the emails can be found below.

In one email, Force says, “I wanted to ask you if you could back me on a deal for 250 bitcoin.”

He also sent Karpeles an email where he said he was looking for other work opportunities. He predicted:

The American government and economy will crash in the next five years. I see Bitcoin as the currency of the future.

In the final email, dated 5/15/13, Force says, “Told you [sic] should have partnered with me!”

On Reddit, Karpeles clarified the date displayed on the email:

Actually, his last email appears to be from the 15th, but that is because it is shown as Japanese time. The actual date is “Date: Wed, 15 May 2013 01:11:31 +0000″ (that’s the 14th if you convert to US time – same day dwolla warrant was issued and one day before this hits the news).

 

Redditor paleh0rse posted, “That… is an amazing disclosure! Any idea on if/when you’ll ever be able to tell us your side of the Gox story — government conspiracies, and all?”

Karpeles responded, “One day, I hope. There are things I cannot disclose and also a lot I do not know – events such as yesterday’s news bring a new light on everything.”

 

 

 

A /r/bitcoin user with the name hatch_bbe asked Karpeles about his next steps: “So what you [sic] going to do now? Is there anything you can do?”

Karpeles replied, “Currently considering available options with the involved parties. It might take some time until a course of action is defined.”

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Factom and Factoids: Storing Data in the Blockchain

As of today, the sale of Factoids has begun via Koinify, a market for decentralized applications. The initial sale will last until May 15 and will be separated in the 4 different stages shown below:

  1. Early Bird Mar 31, 2015 08:00:00 PDT

    25% OFF final rate – 2,000 Factoids per BTC.

  2. Open Season Apr 07, 2015 08:00:00 PDT

    Factoid count starts falling by 100 per 7 days.

  3. Never Too Late May 5, 2015 08:00:00 PDT

    Final 10 days at 1,500 Factoids per BTC.

  4. End of Sale May 15, 2015 08:00:00 PDT

Once this pre-release sale is over, Factom will partner with other companies such as ShapeShift to provide instant acquisition via Bitcoins and other crypto currencies. This will mark the beginning of the actual Factom beta release and those who pre-purchased Factoids via Koinify will receive them starting that day.

Factom expects to launch a storefront for direct sale of Factoids and their conversion to Entry credits on Q3 2015 and on Q4 the entire protocol is expected to be up and running, ready for mainstream users.

WHAT ARE FACTOIDS?

Factoids are the cryptocurrency that will both power and give access to the open-source Factom protocol, a data layer built on top of the Blockchain that will allow all sort of users to secure records, documents and any other kind of information as chains of entries stored in single hashes.

The possible applications of the Factom network are staggering: following the decentralized Blockchain standards, it serves as an “immutable audit trail“, a mechanism for communication and the coordination of processes.  The protocol is meant to serve as the backbone of public applications and the team behind Factom has stated they provide some samples for proof of publishing, proof of process, etc. upon launch.

Users in possession of Factoids (which will be freely traded after a launch phase) will be able to use them to acquire Entry Credits into the network and those Factoids in turn will be used to reward the people who lend their machines as Factom servers and help power the network.

Essentially Entry credits are meant as a Factoid extension for those individuals or businesses who would prefer to avoid using crypto currencies directly and will be both non-transferable and destroyed upon use for the placement of entries in the Factom network.

FACTOM IN ACTION

A demo of the Factom protocol was able to store 28,000 books from Project Gutenberg on the Blockchain using only four hashes and the Factom team has put together a series of videos to show how their technology could’ve helped prevent Bank of America from losing $17 billion due to recordkeeping mistakes and even the incredibly-publicized Sony hack.

You can download Factom’s whitepaper here or take a look at their official GitHub repository.

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