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Silk-Road-Article-Banner-v3 A year on from the arrest of Silk Road’s alleged founder, CoinDesk takes a look at how the man at the centre of the scandal is dividing opinions in the bitcoin space. A lot of people in the bitcoin realm have strong opinions on Ross Ulbricht. To some, he’s a libertarian hero, to others, he’s a villain, intent on making his millions off the back of murder, narcotics and other nefarious goods and means. Arrested a year ago this week, Ulbricht – if you listen to the FBI’s version of events – masterminded and operated anonymous online drug bazaar Silk Road under the pseudonym ‘Dread Pirate Roberts’ (DPR). The site didn’t only facilitate the purchase of drugs (using bitcoin), but weapons, fake passports, the services of hitmen and much more. Differing opinions ross-ulbricht The FBI’s portrayal of Ulbricht as a dangerous criminal couldn’t be further from the picture painted by 30-year-old’s friends and family. Those who know Ulbricht describe him as highly intelligent, kind, peace-loving and generous. His nearest and dearest assert that he had never before had even the slightest brush with the law, with his housemate René Pinnell telling The Verge there must be a case of mistaken identity. “I don’t know how they got Ross wrapped into this, but I’m sure it’s not him,” he said. #FreeRoss was arrested 1 year ago today.365 days in a cage for an unconvicted, non-violent man w/ no priors. @ActivistPost @alxwinter @ageis — Free_Ross (@Free_Ross) October 1, 2014 Despite the protestations of Ulbricht’s friends and family, the Texas native has been incarcerated for a year now and is currently awaiting trial, charged with narcotics trafficking, computer hacking and money laundering. He has protested his innocence all along, claiming he is not DPR. Bitcoin’s big names weigh in Some big names in the bitcoin industry are divided when it comes to their opinions on Ulbricht and the site he supposedly controlled. Roger Ver is one of Ulbricht’s staunchest supporters, having pledged $160,000 to the Ross Ulbricht Legal Defense Fund. Ver believes that, if Ulbricht is indeed behind Silk Road, he should be applauded, not condemned, for creating a platform that enables people to buy and sell what they please without restriction or surveillance. “Ross is accused of providing a platform that allowed peaceful people to engage in peaceful and voluntary trade with others, beyond the purview of the state. Serving even one day in prison for creating such a wonderful tool to advance human freedom would be unjust,” he said. This is a view shared by Erik Voorhees, founder of bitcoin gambling site SatoshiDice. He said that, if Ulbricht is the person the government is alleging, the only thing he’s guilty of is “being an entrepreneur who provided a voluntary service to peaceful people”. “Does such behavior warrant life in prison? Of course not, but history is replete with examples of peaceful people being locked in cages by men with guns who dislike their peaceful behaviour,” he added. Erik Voorhees and Roger VerErik Voorhees and Roger Ver are strong supporters of Ross Ulbricht. Source: CalvinAyre.comA positive step for bitcoin While some in the space see the closure of Silk Road and the incarceration of its alleged founder as an abomination, others view it as one of the best things that has happened to bitcoin. Stephanie Wargo, BitPay‘s VP of marketing, believes the closure of Silk Road helped the bitcoin cause and feels cryptocurrency’s reputation has improved since the episode. “While bitcoin is in the early stages, the market has grown significantly over the past year. And throughout it all, both the currency and the network continue to thrive in so many areas,” she explained. A spokesperson from the Bitcoin Foundation cited the prompt increase in the price of bitcoin following the closure of Silk Road as a signal that the bitcoin community regarded the site as a “liability”. coindesk-bpi-chart (1)The price of bitcoin fell immediately after the closure of Silk Road, but then rose significantly.Like Wargo, the spokesperson doesn’t believe the Silk Road fiasco had too much of a negative impact on the wider world’s perception of bitcoin. She explained that, in 2013, VC’s invested approximately $100m in bitcoin businesses. In 2014, after the Silk Road closure, VC’s invested over $100m in the first two quarters alone. “Silk Road’s takedown paved the way for the building of the ecosystem’s infrastructure,” the spokesperson said, adding that it actually did bitcoin a favour as it illustrated cryptocurrency is not a “magic cloak for criminal behaviour”. No deterrent Voorhees disagrees with the idea that the FBI’s closure of Silk Road and arrest of its alleged founder has acted as a deterrent against the creation of similar sites. “It was clearly not a deterrent,” he said. “Here we are one year after Silk Road was closed. Did online drug e-commerce dwindle after that? No, it has expanded.” Voorhees cited Silk Road 2.0 as an example and said it’s bigger than its predecessor ever was, adding: “This is just the tip of the iceberg. There are a few dozen other competitors that have sprung up over the past year. So the online drug trade is considerably stronger today than prior to Silk Road’s closure.” Crypto-anarchist Cody Wilson agrees that Silk Road’s closure didn’t act as a deterrent. He said it served only to show aspiring dark market operators what not to do. The solution, he said, is to not have a central point of failure – to follow bitcoin’s example and create a distributed marketplace that has no central administration. Wilson, who founded Defense Distributed, an online, open-source organisation that designs firearms, said: “With instances like OpenBazaar, there are serious attempts to have distributed, p2p markets that excise the whole one-admin, one-host problem that crippled Silk Road.” The bigger picture Voorhees acknowledges that the FBI’s intention in arresting Ulbricht may have been to act as a deterrent, but he stressed the driving force behind the whole saga is the US government’s war on drugs. The Panama resident claims this war steals billions of dollars from taxpayers in order to harm and imprison people for making voluntary choices with their own bodies. He doesn’t believe it can go on for much longer, though: “It is a campaign that will be viewed unfavorably by future generations, and what DPR did was bring that future closer to us.” Ver is also vocally opposed to the war on drugs, and he believes the US is already on the path to failure. “Thanks to bitcoin, and blockchain technology, the war on drugs is 100% certain to be lost by the violent men calling themselves the state,” he said. Ver explained that distributed new technologies like OpenBazaar will enable people to anonymously buy and sell whatever goods they please, even if the authorities class them as illegal. It seems the FBI disagrees, with an FBI spokesperson telling Forbes this time last year: “No one is beyond the reach of the FBI. We will find you.” Whether or not this is true, and whatever the prevailing opinion about Ulbricht, DPR and Silk Road, one thing is for certain – it’s the juiciest story to come out of bitcoin yet and there’s no doubt it will go down in the cryptocurrency history books. Click below to view an interactive timeline of Ulbricht’s legal battle. This article is part of CoinDesk’s Silk Road: One Year On series. Keep checking back for new additions to the series. Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay. Good/evil image via Shutterstock. Ross UlbrichtSilk RoadSilk Road: One Year On
Original author: Emily Spaven

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As sportswear giant Nike expands its wearable technology applications, it will need more data to feed its gadgets and software. To do that will be a simple matter in the future. A Nike executive will simply pull up a list of sensors operated by a private weather station, selecting the ones from which she would like to buy data. With a click, the executive will pay individual sensors – perhaps thermostats mounted in a Central Park pathway particularly favoured by joggers – for their data, using bitcoin. The weather sensors will be just one part of a future market filled with data collected by machines on the ‘Internet of Things’. The only difference would be that humans will now be able to pay the machines directly for their work, in bitcoin. Turning sensors into data-hawkers That’s the scenario described in a new paper by two researchers in Switzerland, titled, When Your Sensor Earns Money: Exchanging Data for Cash with Bitcoin. The paper was presented at UbiComp, an annual conference on ‘ubiquitous and pervasive’ computing organised by the Association for Computing Machinery. The event was held in Seattle last month. The paper sketches a theoretical framework for sensors to interact with the bitcoin block chain and to receive payments in exchange for their data. This would solve the current problem of growing but silo-ed sensor networks whose owners have no incentive to share their data, the paper says. The authors write: “There is no way for third parties to leverage today’s sensor deployments considerably. [...] Attaching a bitcoin address to a sensor could empower the sensor immediately to take part in a worldwide data market.” The paper’s authors are Dominic Wörner and Thomas von Bomhard, researchers at the Bosch Internet of Things and Services Lab at the University of St. Gallen. Helping sensors get paid The authors describe a framework consisting of software for the sensor and the human data customer, the bitcoin network and a sensor repository that would list all sensors who wish to sell their data and their bitcoin wallet addresses. A data would check the sensor repository to browse the available data. Once a piece of data has been selected, she would send bitcoin to that sensor’s wallet. When the sensor has received payment, it would send the data to the buyer over the bitcoin network using the OP_RETURN field. The data would be written to OP_RETURN and included in the block chain. The authors say this is a framework for ‘sensing-as-a-service’, a play on the popular software-as-a-service model deployed by firms like Salesforce.com. They point out that their current framework has several problems, including bloating the block chain with sold data and leaving the data open to free-riding because it’s publicly viewable on the block chain. Still, they remain optimistic about the chances for a “world-wide data market”, concluding: “We expect it is only a matter of time until machines not only exchange data but also money. This opens up a whole new dimension for ubiquitous computing.” Bosch, an engineering and electronics conglomerate headquartered in Stuttgart, Germany,  is not the only corporation looking at bitcoin and the Internet of Things. Technology giant IBM revealed last month that it too is developing an open-source platform called Adept that will use block chain technology. Image via Shutterstock Internet of Thingsresearch
Original author: Joon Ian Wong

The FBI shut down black marketplace Silk Road a year ago. This hidden website was used for the sale and purchase of items and services such as drugs, weapons, fake passports and other forged documents. To refresh your memory of the full Silk Road story, check out our interactive timeline below: This article is part of CoinDesk’s Silk Road: One Year On series. Keep checking back for new additions to the series. Road image via Shutterstock Silk Roadtimelines
Original author: CoinDesk

Australian Senate chamberAustralian Senate chamberThe Australian Senate’s Economics References Committee announced this week it would hold an inquiry into bitcoin and digital currency implications, aiming to present its findings to parliament in March 2015. Chaired by Senator Sam Dastyari of the Australian Labor Party, the committee will examine the potential economic impact of digital currencies across various industries, including banking and retail. A further aim is to help decide Australia’s framework for regulating and taxing digital currency-related activities, in the hope that legal clarity will see the country take a leading role in developing the new technology. Australian Senator Sam DastyariAustralian Senator Sam Dastyari, Chair of the Economics References CommitteeIndustry support Ronald Tucker, who heads industry lobby group the Australian Digital Currency Commerce Association (ADCCA), welcomed the news and praised both Senator Dastyari and the Economics References Committee for its foresight on the matter. In a statement, Tucker said: “ADCCA recognises the need to bring digital currencies under the auspices of appropriate regulatory bodies such as the Australian Transaction Reports and Analysis Centre (AUSTRAC) to ensure the highest standards of consumer protection and safeguard national security.” By encouraging innovation and entrepreneurship, he said, Australia’s parliament will help create more jobs and make the country a financial technology leader. Tucker also called for “a correction” to Australia’s current tax treatment of bitcoin provided by the Australian Tax Office (ATO) in August. Many in Australia’s bitcoin industry expressed dismay at the definition of digital currencies as a taxable supply, a condition that adds 10% to the price of bitcoins sold on Australian exchanges and forces businesses to keep detailed records of transactions and price fluctuations. Tax issues In August , the ATO defined bitcoin and digital currencies under existing tax laws, which subjects them to Australia’s Goods and Services Tax (GST) for sales and Capital Gains Tax (CGT) in a manner similar to assets such as equities. Exchange and payment processor CoinJar posted on its blog that bitcoin sales to customers would include 10% GST starting 3rd October. For customers converting bitcoin to Australian dollars, it said, “the guidance is more complicated”. People converting bitcoin for personal use up to $10,000 would not be subject to tax, but anyone selling bitcoin on behalf of a GST-registered business would need to keep tax invoices for every transaction. CoinJar also joined the call for changes to tax rules: “In many ways the guidance has brought clarity to the position of bitcoin users in Australia. However, we don’t believe the ATO’s guidelines are ideal for bitcoin in this country. We believe in a simpler financial system, and we will continue work with the ATO to help them discover a fairer position.” Call for self-regulation The ADCCA is promoting a self-regulatory approach to digital currency industry governance, stating the following in a newsletter: “An emerging common consensuses is that a self-regulatory model through countries industry associations, along with healthy government oversight, may be the most practical and effective means of addressing the need for an international conversation as well as eventual framework on global FinTech matters, such as bitcoin and other digital currencies.” Australia will host a summit for G20 nations in Brisbane this coming November, and Tucker sees this as a great opportunity to discuss issues surrounding new currency concepts in a formal setting; hopefully, he said, with Australia as the leading voice. The ADCCA also participated in last month’s Responsible Finance Forum in Perth, organised in part by the World Bank, IMF and G20. Digital currencies and surrounding issues were “very much a hot topic” at the event, the association said, adding that was a forerunner to the main summit. Australian Senate image via Shutterstock ADCCAAustraliaTax
Original author: Jon Southurst

unnamed More than 20 merchants in Madrid’s busiest shopping district will open for a Bitcoin Boulevard-style event today. While streets in Arnhem, The Hague and Cleveland have all hosted similar bitcoin awareness initiatives, organiser Félix Montero says his event, Calle Bitcoin, will be the world’s biggest yet. Around 200 bitcoin users are expected to attend the two-day spectacle, which is to feature a pub crawl, Easter egg hunt and photo competition, alongside giveaways in the digital currency. While Spain’s bitcoin community is small, Montero hopes the outdoor event will showcase the currency’s purchasing power and utility to those in the “offline” world. “We thought a bitcoin street was the best way to prove that bitcoin payments stand up even to the pressure of a crowded bar or shop in speed and flexibility,” he said. Gold mile The ‘calle’ itself is located at luxury shopping hotspot Serrano Street – also known as the city’s ‘Gold Mile’. Besides the usual coffee shops, bars and restaurants, the 1.5 km area also features an international fashion boutique, a design hotel, an architect practice and – bizarrely – a gynecologist. Montero explained: “Once merchants saw that the bar next door was sporting a ‘Bitcoin Accepted Here’ sticker … they lost all fear and wanted in!” Experimental event The event is largely experimental, involving all kinds of payment mechanisms, apps and processors, both better- and lesser-known, Montero said. Though BitPay, Blockchain and Coinbase are ‘gold’ sponsors, smaller local startups such as Coinffeine, Avatar BTC and Bitcoin Spain, owner of the country’s first Robocoin ATM, will be out in force to greet passers-by. Nicholas Cary, Blockchain’s CEO, praised the event for its commitment to the local bitcoin community, stating: “Calle Bitcoin is a perfect example of how grass roots efforts are making a big difference locally.” Moe Levin, director of European business development at BitPay, echoed this sentiment – adding that events like this underscore both the technology’s ethos and its community: “There is no other payment system in the world as open-source and community oriented as Bitcoin. These are two very unique traits.” Tech-savvy supporters Calle’s 13 volunteers have been instrumental in getting the project off the ground, often taking time out of their full-time jobs to visit prospective merchants and give tutorials on bitcoin point-of-sale systems. Volunteer Santiago Márquez Solís has even made a Flappy Bird-inspired android app to help engage visitors. Unlike the original however, when you die (almost always very soon), you’re met with information about the shops participating in the event. In the spirit of open-source development, the project has been documented on popular forum Bitcoin Talk since its inception. Montero hopes that fellow Spanish-speakers will use these conversations as a blueprint to create their own future events. But, what will become of Calle Bitcoin after the event? According to Montero, each merchant has promised to continue accepting bitcoin for at least three months. He is confident some will stick with the currency past this point, and hopes to scale up in 2015, adding: “Hopefully, next year we can do it with 100 merchants.” Image via Callebitcion; VICTOR TORRES / Shutterstock.com Bitcoin BoulevardSpain
Original author: Grace Caffyn

Silk-Road-Article-Banner-v3 A year has passed since the FBI shut down black marketplace Silk Road and arrested its alleged founder, Ross William Ulbricht. Much has happened in the bitcoin world since these events, yet the shadow of Silk Road still hangs over the industry. Twelve months later, Silk Road remains an influence on bitcoin’s mainstream perception, the proposed regulation targeting the industry and the entrepreneurs and developers working in the space. Whether you believe Silk Road to be another speed bump on bitcoin’s road to mass adoption or a black mark that could threaten its future, it is never far from the discussion. Meanwhile, Ulbricht’s case is still ongoing and online, bitcoin-enabled drug bazaars are flourishing more than ever. This week, to mark the anniversary of Silk Road’s end, CoinDesk takes a look at how the site rocked the bitcoin world and created shockwaves that are still being felt today. Silk Road: One Year On will bring you a collection of features, interactive timelines and articles about Silk Road, Ross Ulbricht and the mysterious world that is the dark web. You’ll gain insight into what the big names in the bitcoin space really think about Ulbricht’s ongoing legal battle and you’ll hear from his mother, Lyn, about why, one year later, she won’t stop fighting for her son’s freedom. Not only that, but you’ll get the chance to learn more about the dark web and how this corner of the Internet appears to be growing, despite Silk Road’s demise and the attempts of law enforcement agencies. Look out for part one of Silk Road: One Year On later today. To refresh your memory of the full Silk Road story, check out our interactive timeline below: Silk RoadSilk Road: One Year On
Original author: CoinDesk

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Embattled bitcoin mining manufacturer Butterfly Labs has announced that it will resume limited business operations following discussions with the Federal Trade Commission (FTC). The Missouri-based company will not be allowed to serve new consumers when it reopens, and will be restricted to fulfilling existing customer orders. Butterfly Labs further confirmed it will remain under the direction of a court-appointed receiver who will oversee the business. Butterfly Labs suggested that it aims to use this opportunity to rebuild its market perception, which it acknowledged has been impacted by the recent FTC actions. The company wrote: “Butterfly Labs views the order as a promising sign for the future of our company, our customers and our employees. This lawsuit has severely damaged our reputation and it is up to Butterfly Labs to attempt to repair that damage.” The announcement follows a report from The Kansas City Star that suggested Butterfly Labs was holding initial discussions with the FTC about reopening its business earlier this week. However, the actions by the FTC may not be a validation of the company and its efforts. In past filings, the FTC has indicated that Butterfly Labs should be awarded ancillary relief only as necessary to reduce the likelihood of consumer injury. Reputational damage Butterfly Labs said that though it is pleased with the announcement, it still finds past statements by the FTC to be contentious. The company wrote: “There are a number of unsubstantiated claims circulating about Butterfly Labs. We intend to address all inaccuracies in due course, including the false claims around burn-in testing and Butterfly Labs inappropriately mining bitcoins with customer equipment.” New documents in the case filed on 27th September levied such allegations against the company, suggesting that Butterfly Labs conducted extended testing of its machines after they were purchased by customers to profit from their production. The FTC has also claimed that Butterfly Labs employees profited from mining rigs that were returned by customers or left in company custody after the consumer was issued a refund. Challenging times Butterfly Labs ended its statements by acknowledging the furor around the company in recent weeks, thanking those who have stood by its business. “Butterfly Labs thanks its many customers, employees and business partners for staying with us during this challenging time,” the statement reads. Prior to its shutdown, Butterfly Labs was besieged by manufacturing delays and customer complaints, however, it was an early market leader, having been in operation since 2010. Butterfly Labs was formally shut down in late September following months of customer complaints that it failed to deliver products as advertised. CoinDesk has reached out to the FTC for comment, but has not received an immediate response. Image via Shutterstock Butterfly LabsMining
Original author: Pete Rizzo

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During an interview on Bloomberg TV‘s “Street Smart” today, Bill Gates responded to new questions about bitcoin and its potential to bring innovation to the payments industry. The technology advisor at Microsoft, founder of the Bill & Melinda Gates Foundation and recently crowned richest man in the world, in turn, provided a short and somewhat muddled response to questions, though Gates addressed bitcoin perhaps more specifically than he has in the past. Calling bitcoin “exciting” because of its relatively low-cost transaction network, Gates told Bloomberg: “Bitcoin is better than currency in that you don’t have to be physically in the same place, and of course for large transactions currency can get pretty inconvenient.” However, while seemingly positive, Gates went on to suggest that though he believes the world needs lower-cost payments solutions, bitcoin is perhaps not the best example of how the market should look to provide this solution. Further, Gates suggested that bitcoin may not appeal to the mass market due to its “anonymity”, as well as its associations with terrorism and money laundering. He added: “The customers we’re talking about aren’t trying to be anonymous, they’re willing to be known, so bitcoin technology is key and you can add to it or you could build a similar technology where there’s enough attribution where people feel comfortable that this is nothing to do with terrorism or any type of money laundering.” The interview took place at Sibos 2014, a banking and financial conference held in Boston, where he also addressed the challenges facing the financial industry and the underbanked. Notably, the first day of the event was dedicated in part to highlighting developments in the digital currency industry, with representatives from Circle, Ethereum and Ripple Labs. Though brief, the statements mark an evolution in Gates’ public statements on bitcoin. This February, the noted technologist and philanthropist participated in an Ask Me Anything on the social network Reddit, where he was asked for his thoughts on bitcoin. At the time, Gates largely sidestepped the issue, choosing instead to focus his praise on digital money networks like Kenya’s centralized mobile money service, M-Pesa. Gates addressed bitcoin only once, saying: “The foundation is involved in digital money, but unlike bitcoin it would not be anonymous digital money.” Hat tip to Bloomberg Bill GatesMicrosoft
Original author: Pete Rizzo
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