Log inRegister

Coin News

complianceservice
The California-based company Identitymind that helps prevent fraudulent transactions is offering low-cost regulatory compliance services to bitcoin startups.Identitymind’s IGNITE allows new bitcoin businesses to get up and running with compliance quickly. Neal Reiter, product manager for Identitymind, said in a statement:“Our goal is to provide start-ups the compliance help they need to focus on growing their business, not AML [anti-money laundering]”.What IGNITE doesThe $150 monthly fee lasts the first six months. Startups using IGNITE will get monitoring for up to 5,000 transactions for compliance as part of the package.“Transaction monitoring can be three different things: it can be bank account to wallet, wallet to wallet and wallet back to bank,” Reitner told CoinDesk.IGNITE will also offer the company’s know your customer (KYC) service as well, which makes it a complete compliance-as-a-service package for startups – something the bitcoin industry needs in order to gain legitimacy with customers, banks and venture capital investors.11/ Compliance-as-a-service is a fantastic area to build a startup because it’s amenable to pure software and solves obvious, real problems.— Balaji S. Srinivasan (@balajis) March 31, 2014Banks and bitcoin exchangesIdentitymind already has experience helping banks and bitcoin firms in compliance as customers. This gives it a lot of credibility in the cryptocurrency industry, which it desperately needs in order to get the banking industry on board with bitcoin.The majority of banks still will not accept bitcoin businesses as clients, at least not yet.Identitymind says that it already works with some of the largest bitcoin exchanges by volume right now. Said Reiter:“We reduce risk for banks. We work with banks right now, to give them visibility into their bitcoin exchanges’ clients, so they can see the transactions.”And while companies like BlockScore offer incredibly simple ID verification for a range of companies, Reiter told CoinDesk that Identitymind takes compliance further by being a complete service offering. “We do what they [BlockScore] are doing, plus about twelve other things,” he said.About IdentitymindIdentitymind has raised capital, but did not wish to disclose any specific funding for this story. The company has over 30 employees.Anti-fraud has been its core focus since it was founded in 2009. However, its premise at the time of inception was preventing gaming cheats on the social platform Zynga, not on fraud issues related to virtual currency.But trying to catch poker cheats on Zynga helped the company at its early stages. Identitymind was able to build something that it now calls a “fraud engine,” a system that scans through transactions tracking reputation and looking for suspicious events that might be illegal, such as money laundering. Money laundering is the largest financial suspicious activity the US government see. Source: FinCENThe largest suspicious financial activity reported to the US government is money laundering. Source: FinCENBitcoin startupsIdentitymind says that IGNITE’s low cost and simple signup process reduces the number of regulatory issues that startups have to deal with when getting off the ground. The company’s long-haul plan is to ease the task of building a bitcoin business. Said Reiter:“We’ve got a full team of people here. Now it’s just growing bigger and helping the [bitcoin] ecosystem grow as a whole.”Startup accelerators such as Plug and Play and 500 Startups in Silicon Valley are beginning to incubate cryptocurrency-related businesses. Boost VC, the first accelerator to accept bitcoin companies, plans to incubate 100 new bitcoin companies over the next three years.Data protection image via ShutterstockbanksBlockScorecomplianceIdentitymindIGNITElawregulationStartups
Original author: Daniel Cawrey

duckduckgo
Privacy-loving search engine DuckDuckGo has started displaying price quotes on bitcoin-related search queries.Launched in 2008, DuckDuckGo is a relatively fresh-faced search engine headed up by Gabriel Weinberg. The driving force behind the service is privacy – thus, integrating bitcoin price quotes seems like a logical move for the young outfit.The search engine is designed for people who would rather not have their personal data tracked online. Since it doesn’t store any user data, the site does not offer personalised search results – or personalised ads for that matter.In 2013 alone, DuckDuckGo had one billion search queries and is gaining traction fast.DuckDuckGo goes bitcoinThe implementation of the price listing, as first spotted by NewsBTC, appears to be rather rudimentary. The new feature only shows up when you enter specific queries like “bitcoin price” or “BTC to USD”. The price quote then links to Blockchain.info, specifically to the market page.duckduckgoHowever, if you try searching for “bitcoin quote” or even “bitcoin price quote” the quote box does not pop up. This is not the case with other price search engines that have started quoting bitcoin, so DuckDuckGo might want to polish its solution.Google still lacks bitcoin integrationSearch giant Google does not offer a bitcoin quote box and it is unclear whether it plans to do so. However, Microsoft’s Bing search engine and Yandex, the biggest search engine in Russia, have already integrated bitcoin functionality, including automatic price conversion.For example, Bing will work out the value of bitcoin on the go, provided the user enters a search that can be figured out by the engine. This basically means that you can enter a search like “1 BTC to USD” and Bing will automatically convert it.The same is true of Yandex, which displays the exchange rate using the CoinDesk Bitcoin Price index and it also allows a convenient price conversion tool. Wolfram Alpha also offers a simple bitcoin look-up tool.BingDuckDuckGogoogleYandex
Original author: Nermin Hajdarbegovic

BitFury
DigitalBTC has inked a strategic hardware supply agreement with BitFury, one of the leading manufacturers of bitcoin mining equipment.The company is owned by Australian investment firm Macro Energy, which acquired Digital CC and its subsidiary digitalBTC last month. Thanks to the acquisition, the firm became the first bitcoin-related business to be listed on the Australian Stock Exchange (ASX).Mining plansAt the time Macro Energy said it plans to raise AU$9.1m and to invest the money in the expansion of digitalBTC operations, including bitcoin mining. Soon after digitalBTC entered a strategic partnership with CloudHashing.com.Under the terms of the agreement CloudHashing.com software will be deployed on digitalBTC hardware, which will also be managed by CloudHashing.com. The hardware will apparently be installed in CloudHashing.com data centres in Iceland and Texas.The companies pointed out that the deal is a win-win situation for all parties – digitalBTC gets valuable expertise on the technical issues of the business, while CloudHashing.com gets access to digitalBTC’s trade desk.DigitalBTC’s Executive Chairman Zhenya Tsvetnenko said the partnership will allow digitalBTC to concentrate its resources on retail-focused mobile applications and other operations.CloudHashing.com CEO Emmanuel Abiodun told CoinDesk that the relationship is mutually beneficial and that he is pleased to team up with digitalBTC, which has strong capital backing and a proven track record in bitcoin trading.Abiodun added that CloudHashing.com expects to generate $7.5m-$10m worth of bitcoins a month.Enter BitFuryDigitalBTC has not shared much detail about the BitFury deal, nor did it mention CloudHashing.com. However, the company did state that the first instalment of the new bitcoin mining hardware is already in operation and started generating revenue in March.The revenues will be used to fast-track the development of digitalBTC’s retail products. The company stressed that retail products are a key focus for its business model. There is still no word on the precise quantity and type of hardware ordered by digitalBTC, but the company did say that the first batch cost $2m.“Under this agreement, BitFury will supply a significant quantity of its most advanced bitcoin mining hardware to digitalBTC, backed by manufacture assurances. This will significantly advance digitalBTC’s bitcoin mining capacity,” the company said.DigitalBTC points out that about 40% of the bitcoins so far produced were mined with BitFury chips. Furthermore it states that the hardware it acquired has secured it a “significant proportion” of the current bitcoin mining network, thus making digitalBTC one of the largest bitcoin mining operations in the world.Big earnerThe first installation of new BitFury hardware has earned digitalBTC more than 680 bitcoins since it was deployed, earning the company $330,000 during its first 13 days of operation between March 20th and April 2nd.DigitalBTC said:“DigitalBTC has committed to two tranches of hardware – this first installation of $2m of state-of-the-art bitoin mining hardware that is currently in operation, and a second tranche planned to be delivered and operational in May 2014.”Tsvetnenko said the agreement is backed by “attractive” manufacturer guarantees and that it allowed digitalBTC to quickly expand its mining capacity. Furthermore, the company plans to continue expanding its bitcoin operations, including mining, trading and consumer focused retail applications.Said Tsvetnenko:“The bitcoin system continues to rapidly mature, evident by significant backing from very large investment firms. Bitcoin focused investment funds of approximately $150m in capacity are now being formed. In addition, there has already been in excess of $100m of investments made into the bitcoin system. This magnitude of investment is set to drive bitcoin into ever wider acceptance and use.”Tsvetnenko said the next step is to enable development of the consumer-friendly software and applications that the system needs. DigitalBTC plans to be a contributor to this retail push, he explained, through its consumer-oriented retail applications.BitfuryCloudHashing.comdigitalBTCMacro Energymining
Original author: Nermin Hajdarbegovic

shutterstock_102425398
Just how much carbon dioxide do we produce when we mine a bitcoin? It’s becoming an increasingly important question. After all, it’s great to disrupt an inefficient and sometimes corrupt incumbent economic system, but most of us would rather not do it at the expense of the planet.The bitcoin network is stuck in a circle that drives up its power usage. People tend to put more computing power on the network so that they can make more more bitcoins. The software underpinning the network reacts by changing a parameter that makes it more difficult to solve the mathematical problem needed to solve a bitcoin block.Because it’s harder to solve the problem, people add even more computing power, and so on. As this cycle increases, it takes more electricity to mine a bitcoin. The hashing power of the network surpassed the world’s top 500 supercomputers almost a year ago, and things have moved along quite a bit since then.Some might call this a vicious circle. Nick Gogerty, who conceived a coin for trading solar energy production called solarcoin, calls it the Red Queen problem.“The Red Queen is originally from Alice in Wonderland. In the Queen’s race everyone runs faster, but you never get ahead,” he says. “The same happens in hashing. All of the participants are co-adapting. You have to keep adapting to keep up.”Gogerty has been trying to put together a model for calculating the carbon cost of a bitcoin, but he admits that it needs work, and he is asking for volunteer help to improve it.Other attempts have been made to nail down the cost of the bitcoin network in terms of carbon emissions and/or energy used, but it’s a tricky business, says Guy Lane, founder of sustainability advisory service Sea O2.Based in Brisbane, Australia, Lane is also the founder of Bitcarbon.org. That site contains his method for tracking bitcoin-based carbon emissions.There are caveats. “Of course, bitcoin is mined everywhere from data centres, distributed locations, working pools, rigs set up in garages and even on PCs that have been hijacked by bots,” Lane says. This makes it very difficult to ascertain the true carbon cost, because there are so many different types of equipment running the mining software.Still, it doesn’t stop him trying. His method is based on the premise that miners will spend up to 90% of the cost of a bitcoin on the electricity used to mine it. That electricity cost will naturally vary with the price of a bitcoin.“In the Queen's race everyone runs faster, but you never get ahead.”The method assumes that 50% of all the mining takes place in China or the US. It uses the most recent estimates from the International Energy Agency for carbon emissions per Kw of mains power in either country, and averages them. The result is that for every Mw of electricity spent mining bitcoins, 0.65 tons (1300lbs) of CO2 are released into the atmosphere, it says.The method maps these figures against average electricity prices, to produce an average carbon intensity of 6.98 kg (15.38lbs) of CO2 for every dollar that is spent on electricity used for mining Bitcoin.Lane last ran this model in December, when bitcoin was priced at $1000, and calculated that the entire bitcoin network was putting out about as much carbon as Cyprus.Lane believes that the estimates could be lower than the reality. For one thing, it doesn’t account for the fact that miners might be willing to spend more electricity mining a bitcoin than the current value of that coin, in the hope that it may increase.Another way to look at carbon output for bitcoin mining is to go and ask a professional miner. If anyone should know how many hashes and therefore how much power it takes to compute a bitcoin, it’s an institutional miner that makes a business of turning electricity into cryptocurrency.Dave Carlson, founder of Megabigpower, runs a massive bitcoin mining datacentre in Washington state.10 TH/sec (10,000 GH/sec) make 1 bitcoin per day at the current difficulty, he says. His hardware uses one watt per GH/sec, meaning that it takes 10,000 watts (10Kw) to run 10Th of equipment.He runs that 10Kw of equipment for a whole day to mine a bitcoin, which means that he spends 240Kw/h. That’s 24% of a Mw/h.Remember that according to the IEA data, 1 Mw/h of mains electricity produces 1300lb of electricity. Based on Carlson’s figures, that means that the energy he’s using would release 24% of that, or 312lbs, of carbon dioxide into the air per coin.According to the EIA, that’s about the same as burning 15.9 gallons of gasoline, without ethanol.That would be a lot of carbon for Carlson to churn out, if his electricity was produced by fossil fuels – but it isn’t.“We are 100% hydroelectric,” he says, adding that he hopes to announce the largest solar/wind powered mine later this year. “I am also looking at re-investment in wind power generation (mostly as a hedge against power prices rising). We are very aware of our carbon footprint and the likelihood that it will increase.”He isn’t the only one. Over in Sweden, ASIC mining manufacturer KnCMiner uses a co-hosting facility. The electrons it runs on also have a distinctly green hue.“What I can say real quick is that our data centre is run on hydropower. So we are about as green as they get,” says co-founder Sam Cole.So, a lot of bitcoins are being produced with green energy. But if you are burning fossil fuels for your bitcoins, then using just over a sixth of a ton of carbon for a single bitcoin isn’t good, given that the network is churning out 150 of them per hour.It’s important to put this in perspective, though, by understanding what this is relative to, and what we’re getting for this carbon throughput. That’s what we’ll be looking at tomorrow, in the second article of this three-part series.Power plant image via ShutterstockEnvironmentsolarcoin
Original author: Danny Bradbury

The average home in the US uses 10,837 kWh per year.
The price of bitcoin on the CoinDesk Bitcoin Price Index (BPI) has declined in recent weeks on the news that the Internal Revenue Service (IRS) had released complex guidance for digital currency users amid growing uncertainty regarding exchange regulation in China.In the mining world, these price fluctuations can cause ongoing profitability issues, as miners, hardware manufacturers and price are key factors that impact the difficulty.The incentive for people to mine varies with the bitcoin price. A high price makes mining attractive and people invest in costly ASIC rigs. The mining manufacturers then ship newer, more powerful units which raise the difficulty and mean more capital expenditure for miners if they want to keep up with the mining Joneses.Then the price plummets, leaving everyone mining at high difficulty without the ability to cash in their coins at a significant profit.The mining industry is pretty much held hostage to these realities. Call them bitcoin economic factors, if you will. Now, with that unfortunate news out of the way, let’s see what’s been happening since our last roundup.The worst bitcoin miner ever Records televison shows. And now bitcoin transactions. Source: EngadgetRecords television shows well. Mines bitcoin not so well. Source: EngadgetBitcoin mining in the form of SHA-256 hashing requires serious processing power, and the higher the difficulty, the more power needed. That’s why it seems counterintuitive to create ARM-based bitcoin mining malware.Sure, recently discovered Linux-based bitcoin mining malware already seems like a bad enough idea, but the concept of ARM processor mining malware that can infect digital video recorders (DVRs) is just downright inefficient.There is potential for lower-powered chips to mine bitcoin in the future, but that’s only going to happen on smaller nodes of silicon that are using ASICs designed for that specific purpose. Anything else is just going to be a complete nuisance.Also to be filed under pointless mining malware is the one announced on 25th March, that gets your Android device mining for dogecoins – veeery slooowly.City-sized electricity bill for minersFreakonomics recently released a bitcoin podcast that featured venture capitalist Marc Andreessen and Stanford professor Susan Athey.If anyone ever thought that bitcoin was a resource hog, take this comment from Athey as an idea of how much energy mining might use:“So it’s just burning a lot of electricity, enough to power many, many homes. I’ve heard estimates as high as 3 million homes could be powered with the electricity that goes to bitcoin mining.”Athey’s number for bitcoin mining’s electrical consumption is just an estimate, but given ever-increasing network power, it’s likely to end up being far higher than that.As a result, technologies that can improve the efficiency of miners are going to become highly important, which brings us onto …Spondoolies Tech now shipping power efficient miners Spondooliestech Sp10 Dawson, still in the box. Source: MineforemanSpondooliestech Sp10 Dawson, still in the box. Source: MineforemanIsrael-based manufacturer Spondoolies-Tech has begun shipping units of its new power-efficient miner.Called the Sp10 Dawson, this rig should produce 2.1 TH/s per kilowatt of energy, claims the company – a figure that Spondoolies-Tech reached by reducing the toggle rate of its 40nm ASICs.However, Neil Fincham from Mineforman reviewed one of these units and found that the miner hashes at 1.49 TH/s. The SP10 Dawson does draw at less than 1 Watt per gigahash, though – adds up to 1388W while running.The unit weighs in at 14kg, which gives it the heft of a regular server and means it needs to be housed in a proper rack.Solar-powered bitcoin mining The unit has a battery for cloudy days, Source: Solarminer.The unit has a battery for cloudy days. And those pesky nighttime hours. Source: Solarminer.Some people try to locate miners in places where there they can find cheap prices for all that power their miners will eat up, but if you don’t want to move to Iceland or the US’s Pacific Northwest, you could opt to go green.Solarminer is now selling a USB hardware product that the company says uses nothing more than sunlight in order to operate.The device uses three 150W solar panels and 288Wh LFP batteries to harvest and store energy, and costs $889.Solarminer customers do have to buy USB miners for the unit’s 16 slots. However, there are a lot of different USB mining options available, and using something like, for example, the BitFury RedFury USB miner you could hash at 40 GH/s from one of these, just with sweet sunlight.The ‘Bitcoin Baron’ Selling at every single peak. Source WiredSelling at every single peak. Source: WiredWired recently ran a story on a couple of data geeks, Kai Chang and Mary Becica, that took the leaked Mt. Gox data and made a bunch of visualizations from that information. One user that stood out was referred to as the ‘Bitcoin Baron’ – a Mt. Gox exchange trader that mostly sold BTC at the top of every market peak.The speculation is that the Bitcoin Baron might be a big-time miner, or perhaps a pool operator. Many (but not all) of those who operate large bitcoin mines or pools are hesitant to divulge any information regarding operations. But if this chart is true, it shows that big-time miners are always closely looking to make the best fiat profit that they can.2.5 TH/s Bitfury Razz BitFury's slogan is BitFury’s slogan is “Extreme Performance. Source: BitfurystrikesbackBitFury, a chip manufacturer that claims it powers 20-30% of the bitcoin network, is now selling mining units.The ecommerce site Bitfurystrikesback is offing the 2.5 TH/s ‘Razz’ unit, which sucks up 3kW of power for its hashing ability.The Razz costs €7,250, or about $9,947. Interestingly, it is marked as a ‘used’ model, which would logically lead one to assume that BitFury has used these Razz units to mine prior to putting them up for sale.When CoinDesk asked Bitfurystrikesback’s CEO Niko Punin about the used status of the machines, he offered no comment.However, Punin did say that there would be another version of the Razz for sale soon with even better specs.1.2MW, liquid-cooled, bitcoin mining container Industrial mining evolved. Source: Allied ControlIndustrial mining evolved. Source: Allied ControlFor those inclined to study data centre architecture and design, the concept of the modular container has been considered one of the best ways to pack servers into a small area. Google did it in secret for a while, and then Facebook open-sourced it.Allied Control, which is a startup partnering with 3M on a special type of cooling fluid, has written a paper on modular bitcoin mining design.It involves immersion cooling using six 200-240kW flat-rack tanks and is designed so that ASIC boards can be easily swapped when they become obsolete.Each of these modular units can support a whopping 1.2MW of power. That is a figure that even Allied Control admits would not have seemed fathomable in bitcoin mining a year ago, but has become a harsh reality.Got a cryptocurrency mining tip for future roundups? Contact us.Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.Electrical lines image via ShutterstockBitfurycontainer miningminingSolarminerSponoodlies TechSusan Athey
Original author: Daniel Cawrey

Bitcoin
An Irish company has begun paying its employees’ salaries in bitcoin.Dublin-based electronic repairs firm GSM Solutions, which hosts Ireland’s first bitcoin ATM, is now paying five of its employees partly in bitcoin instead of euros.“We set salaries in euros, so that the euro amount they get each pay period does not fluctuate with the price of bitcoin,” said GSM Solutions’ Managing Director Alan Donohoe in a blogpost.Although more and more companies are letting their customers pay them in bitcoin, the number of people happy with receiving their salary exclusively in digital currency has remained relatively small.As you might expect, they tend to be people working in tech jobs, like the employees of Polish web design company El Passion, who were given the choice to be paid in bitcoin last December. The Internet Archive and Coinbase, too, pay some or all of their employees in bitcoin.But it’s not only tech heads: Tony Vaughn, a small town sheriff from Kentucky, became the first US government employee to be paid in bitcoin.GSM says it hopes to convert the rest of its employees to bitcoin by the end of the year, which would make it the first company in Ireland to pay all of its employees in the currency.As well as being a symbolic gesture – nothing says ‘tech savvy’ like ‘we pay our employees in bitcoin’ – the move could help to support the local bitcoin economy by encouraging more spending in the cryptocurrency.However, paying salaries like this does come with complications for both companies and staff. For companies, extra care needs to be taken to ensure that all the appropriate taxes are accounted for at the correct fiat value, something that BitPay’s Bitcoin Payroll API is designed to make easier.For staff, fluctuations in the value of bitcoin could mean that your salary gets smaller moments after you receive it, which could explain why GSM is only paying “part” of its employees salaries in digital currency.CoinDesk has reached out to GSM Solutions for comment and will update when we receive a response.Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.Bitcoin image via ShutterstockBitPayGSM SolutionsIrelandjobs
Original author: Kadhim Shubber

Mark T Williams
Mark T Williams isn’t shy when mentioning his “steed” – the unassuming white bicycle parked in front of the Noodle Street cafe in Boston, Massachusetts, shining in the sun near some melting remnants of the winter’s snow.He diverts attention to it: wanting me to know that it’s a choice model; that it would be complemented should the right person stop eating their pad thai, look through the smudgy window above our corner table and notice it. He goes on about it, telling me it’s just one of his bikes, that the others are built for snow, for harsh conditions.If it’s his way of directing questions away from himself, it isn’t exactly effective. You can surmise a lot about a person, particularly a capital markets professor, from the temperatures they’re willing to suffer as they bike through traffic-laden streets.As soon as this question arises, though, a waitress arrives and Williams is suggesting the pineapple fried rice, donning an impish grin. It would be the first thing you’d notice about him, this air of general amusement, if he’s wasn’t wearing a full lycra biking outfit, complete with the biking shoes. Distracted, I order the fried rice.In hindsight, I shouldn’t have been surprised by Williams’ physical presence. The Boston University faculty member and published author is known for invoking strong reactions. He is, after all, the bane of bitcoin message boards, the reigning king of bitcoin bad-mouthing, the most boastful of all of bitcoin’s blustering haters.bikeFor the uninitiated, Williams rose to prominence around the time of the New York Department of Financial Services hearings on virtual currencies in January. He was a late addition, not even on the original schedule.If his attendance didn’t turn heads, his statements did, when he notably claimed bitcoin to be tremendously overvalued, and predicted it would crash to the single digits in value this year.The backlash was swift, and TV networks and news outlets ate it up, rushing his comments to print.Entire reddit threads were dedicated to dissecting his subsequent articles, and calling him out on his blasphemous predictions.It’s clear what Williams adds to the conversation: he’s the one needling the balloon. What’s less clear is what’s in this for Williams, what does he get out of playing with the needle?Pete Rizzo: So, I think we were on the subject of you being a hater …Mark T Williams: In general, I think it’s easiest to put people in boxes, saying someone’s pro and someone’s con, or someone’s a hater and someone’s not.Markets don’t function well when there isn’t good information. I always felt that bitcoin had the upper hand, and that the markets weren’t transparent. I think regulation creates that transparency. I always felt consumers were disadvantaged. I don’t think I’m a hater, I think I’m an advocate for consumers who want to buy virtual currencies.In my hearing, I warned about a lot of unaddressed risks and some of those are coming true.If you read my testimony, I spent a lot of time talking about the exchanges, and what does Mt. Gox do? Blows up. So that’s it – I’m not a hater. “I think I see virtual currencies as something of the future.”Rizzo: Well, Warren Buffett seems to agree with you. Williams: Yeah, his number two guy, Charlie Munger, he was asked about bitcoin. He said it’s “rat poison“. I went on TV, or Fox or Bloomberg; I said it’s not rat poison, that’s not fair.I think people when they buy into bitcoin, they think they’re buying into a movement. It’s emotional, right? Not only is it a physical investment, but an emotional investment, and I think that’s what I’ve spurred a lot of resentment about.People just look at me, and they say “Why doesn’t this guy get it?” Rizzo: Do you read the comments? Williams: Sure, some of them are ridiculous. I get people who send me emails.If you’re a smart investor, you want to look at those who are in your camp, but also those with dissenting views, sometimes you can learn a lot from the counter argument. Rizzo: So, is your goal to make bitcoin better? Williams: I think I see virtual currencies as something of the future. Rizzo: Just not good right now? Williams: I think there are a lot of design flaws, I wrote a piece for Business Insider, and I said that bitcoin’s DNA is flawed. I’m not talking about the block chain. I describe bitcoin as the locomotive and then there’s the payment system itself. The payment system is the rails. What I think we’ve seen here is that we were told that the infrastructure was strong through January, and Mt. Gox showed us it was weak.Rizzo: It seems like they were using their own implementation of the protocol. Williams: Infrastructure is much wider. The infrastructure is not just the peer-to-peer, the infrastructure is all those people that have bolted on to the exchange. What I’m trying to articulate is that the highway itself today has a lot of third-parties.The system can only be as strong as the weakest link. Mt. Gox was weak …Mt.-Gox-bitcoin-Mark-Karpeles1Rizzo: So, let’s say you’re Mark Karpeles and you’re running a trading card exchange, and, over the course of a year, your firm becomes a multi-billion-dollar company, can you really blame the guy for not implementing enterprise-grade consumer protections? Williams: He should have. He should’ve cared about his customers. It was a black box, and it will come out – he did a lot of fraudulent stuff, because he had control of the information. As a consumer, when you bought, he not only got a fee for the transaction, but he got to see the transaction history throughout the day.I’m sure he cooked that, I’m sure he also set the price for his exchange. I did a lot of analytical studies of that exchange, and it was always 8% to 10% higher than other exchanges.Why is that? If he was having financial problems, by putting the price higher on his exchange, he’d encourage more people to come. Rizzo: It seems that by limiting the number of people who could leave, more people stayed in, and that the price became higher, so people took advantage of that. Williams: Well, if you run an exchange, and you can keep on moving the price up, then you’re encouraging more business. I call him a boiler-room broker. If you house that broker function, you’re not an exchange.Coinbase has three businesses it’s doing right now, and one of its functions is a conflict of interest. They’re trying to reduce price risk for people like Overstock, yet they’re trying to be an exchange on the other side. Rizzo: There’s a lot of opportunity in the space right now. Williams: Yeah, but there’s conflict. I think you have to have controls in place to make sure consumers can’t be taken advantage of. Rizzo: So, if you had a chance to redesign the system, what would you do? Williams: I’ll leave it to the computer geniuses, but it needs to be regulated. State banking examiners are going to regulate it. You’re going to have a national financial regulatory body, you’re just going to have standards and that’s not a bad thing.This conversation has been edited for length and clarity.mark t. williamsMt. GoxNYDFS
Original author: Pete Rizzo

Screen Shot 2014-04-06 at 10.33.53 AM
A new line of low-cost bitcoin ATMs has been launched by PayMaQ in major European markets.PayMaQ is pitching its PayBitcoin ATM as a more affordable solution for individuals and small businesses interested in hosting a digital currency exchange point. One unit costs just under €1000 after VAT and shipping, offering a retail cost savings when compared to $5,000 Lamassu units and $20,000 Robocoin machines.The PayBitcoin ATM is PayMaQ’s second model, following in the footsteps of a first version that CEO Luis Borrell acknowledged suffered from limitations, including the need for skilled maintenance on a regular basis.The company has since turned to the development of a cheaper option that it believes is easier for business owners to maintain.Speaking to CoinDesk, Borrell explained:“Nowadays, there are new people who want bitcoins and they need easy and nearby access to bitcoins. PayBitcoin … is designed for any person who has a store, gym or similar business in which [they] can offer [it] to their customers buying bitcoins at the moment.”The company is funding the project via Indiegogo. Ease of useThe Bitcoin ATM business model seeks to solve a major barrier for consumers that want to start using bitcoins: acquisition.As such, Borrell put the emphasis on the ease-of-use of PayMaQ’s models:“This model of ATM can be acquired and operated by any person easily. Logically it has some limitations, but we think it is a good product to extend bitcoin around the world.”Borrell sees the need for a simple way to get bitcoins as part of the process of broader market adoption:“Traditional banks charge 1-3% fees of every transaction with credit cards. People will be able to pay with bitcoins in any store, restaurant and in any business in general with no commissions or fees.”First, however, customers need an easy method of exchange. And since Internet bitcoin exchanges aren’t yet able to provide this service, Borrell believes his units will have a powerful value proposition.CompetitionThe market for bitcoin ATMs is seeing more competition, including the launch of the Lamassu ATM earlier this year. Competition is also heating up in the UK and Southeast Asia, and with its low price point, PayMaQ could become competitive in the global market.For Borrell, this means he also has to consider how his company will compete not just now, but down the road:“We have plans for the near future. We are now developing new solutions for stores, in a way that they will be able to accept payments in bitcoins. We are continuously developing new products.”Part of this process includes the development of security measures for the ATMs. Borrell said that security is important but pointed out that the same risks face consumers who use other currencies as well.“For PayMaQ, security is very important. But we think that the bitcoin market is not different from the traditional market. We don’t see an extra problem in security – you have to implement security updates continuously. It is a part of our work.”Rising interest in Bitcoin ATMs Barcelona-based PayMaQ opened its doors in 2005. According to co-founder and Borrell, it originally sold payment systems. After hearing from customers that wanted to deploy ATMs, PayMaQ moved toward developing bitcoin ATMs.A bitcoin ATM remotely syncs with an online exchange, allowing users to conduct fiat-to-bitcoin or bitcoin-to-fiat transactions and withdrawals without the hassle of creating a personal account and making an in-market purchase and with different levels of know your customer (KYC) and anti-money laundering (AML) compliance.PayMaQ’s models are one directional and offer little in the way of compliance features, meaning operators who are able to cut costs with its units will have additional considerations to make to ensure their lawful use.Image via PayMaQATMsEurope
Original author: Stan Higgins
  1. The US Tax Man Speaks For The First, But Not Last Time
  2. Tax to the Future, Tip-top Tiny Top-ups, and a Free Gift for Bitcoiners
  3. French Think Tanks Get Tutorial on Bitcoin’s Big Picture
  4. Unofficial Apple iOS Store to Allow Bitcoin Wallet Apps

Page 1646 of 1651