Bitcoin wallet startup Blockchain is today launching an option for users to create ethereum software wallets, a move that marks the first time the startup has integrated a new cryptocurrency since it launched in 2011.

Announced today, the launch also coincides with a new partnership with cryptocurrency exchange service ShapeShift that will enable users to transition funds between their bitcoin and ethereum wallets, without first needing to send funds to a centralized service.

But while Blockchain executives largely kept the focus on how this would enable retail users to continue to experiment with cryptocurrencies, in comments, they also hinted at the possible business applications that could be available should the service.

CEO Peter Smith said in a statement:

"As popularity of ethereum has grown, so has the desire from our customers to have the option to manage multiple digital assets within their blockchain wallets. We are thrilled to introduce this new functionality to our community and will continue to find ways to make interacting with digital assets even easier."

Elsewhere, the company said it is open to offering other services to ethereum users, hinting its data tools could soon see an overhaul. Also mentioned was the possibility that a software wallet could be available to business users.

The company said its release today is not designed for developers or companies.

Nonetheless, such advancements could be propelled forward by new funding. Blockchain recently raised $40 million in a Series B funding round, drawing from a group of investors that included billionaire Richard Branson. The startup has raised more than $70 million to date in venture funding, according to CoinDesk data.

More broadly, it's also the latest sign bitcoin businesses are now adapting their business models to support multiple blockchains.

Other services have moved to integrate ether in recent days, including cryptocurrency exchange Bitstamp and Falcon Private Bank, a Swiss-based private bank that added support for ether just over a month after it first began offering bitcoin services.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockchain and ShapeShift.

Peter Smith image via CoinDesk

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Bitcoin's much-anticipated Lightning Network is now compatible with seven different payment networks.

Today, blockchain services firm Bitfury and payments network provider Ripple are releasing new code that makes it possible to conduct Lightning-style transactions across a range of both blockchain and legacy payment networks. While still in its early stages of deployment, it's believed the Lightning Network could one day expand bitcoin's capacity to millions of transactions by moving those transactions off of the main bitcoin blockchain.

However, today's news arguably goes a step further, adding weight to the idea that the top-layer payments network isn't just a tool for bitcoin.

The two companies released a demo showcasing how the new technology can be used to make a transaction between bitcoin and litecoin, the two blockchain networks which have arguably made the most progress in developing the Lightning Network.

Since Lightning is increasingly perceived as a necessary layer for blockchain transactions, the companies view this as a big step toward a future where users won't have to worry about which payment method they're using.

Ripple CTO Stefan Thomas told CoinDesk:

"I shouldn't have to care which particular coin you use or like. If you're on PayPal and I'm on Alipay or if I'm on bitcoin and you're using a bank account, I'll still be able to send you money and not worry about it. That's the long-term goal."

Interledger addition

Honing in on Ripple and Bitfury's work more specifically, the companies have released code that integrates the Lightning Network with Interledger, a protocol designed by Ripple for making transactions between different types of blockchains.

This means it's compatible not only with public blockchains like bitcoin or ethereum, but with permissioned protocols managed by only a few companies, as well as traditional payment methods such as PayPal. Interledger aims to support transactions between all of these services by offering a type of "payment-agnostic" escrow service.

The W3C initiative made its first successful transaction across these various types of payment methods earlier this summer, but the new part here is that the Lightning Network can now sit on top of this infrastructure.

"Lightning natively supports transactions across different blockchains, but it cannot make transactions to any central ledger or to PayPal. That's why integration of Interledger is very, very useful for Lightning," said Bitfury researcher Viacheslav Zhygulin.

Because litecoin and bitcoin already support test versions of the Lightning Network, the group successfully tested transactions there. (And, you can try it out using the open-source software, too.)

Right now, it only works on the "testnet," a sandbox version of the blockchain used to trial new features and applications, but Thomas said that the functionality will work similarly on mainnet (the live bitcoin network) once it's safe to deploy it there.

In the process of developing the product, the two companies also developed a different testnet – what Thomas called a "permanent testnet for testnets" – that cuts across different blockchains as well.

Missing ingredients

Still, while the technology has now been released, there's work to be done to make the technology usable. For example, there are currently no Lightning Network implementations deployed on top of permissioned blockchains that could take advantage of this newfound interoperability.

Bitfury representatives argued, though, that the framework sets up the necessary infrastructure for the future.

Additionally, Thomas noted that future success of the protocol depends on how many clients ultimately choose to adopt Interledger and Lightning Network technology.

Still, the two companies described it as a big step towards moving money across different types of payment networks. And, since bitcoin and litecoin have near-completed Lightning Networks to work on the mainnet, it might not be long before users make real transactions between the two.

Longer-term, Thomas indicated that the goal is to move beyond the payment networks that Interledger currently supports to encompass perhaps all of them.

He concluded:

"After being involved in the community for so long, I've found that the missing ingredient – the one thing that's missing – is interoperability. Not just with the blockchain, but with central ledgers and more generally interoperability in the financial system."

Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple. 

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[Updated]

Following two days of near sideways trading, bitcoin prices have once again reached record levels.

Since setting its most recent all-time high of $4,483 on August 15, prices have fluctuated in the $4,000–$4,200 range until starting to rise once again Wednesday afternoon.

This morning, however, after a slight drop early on at 3 a.m. UTC, vigorous trading has seen the price of the crypto asset rapidly climb to a new high of $4,501 at around 11 a.m. UTC.

At press time, the price stood at $4,495 – a 1.58 percent gain for the day so far, according to CoinDesk's Bitcoin Price Index.

Bitcoin's market capitalization now stands at over $73 billion, up from $68 billion two days ago.

Looking at wider market, the combined market cap for all cryptocurrencies has also reached a new all-time high of $144.7 billion, according to CoinMarketCap.

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Bitcoin wallet provider Breadwallet has announced $7 million in new funding.

The startup – which debuted in 2014 – raised funds from a group of investors that includes DAS Capital, East Ventures, Globe Advisors, Liberty City Ventures, Maffin Inc, OKWAVE and Saison Ventures. An unnamed group of angel investors and family offices also took part in the round, according to the firm.

Breadwallet indicated it plans to use the funding to expand its business development and marketing teams, as well as invest in new functionality for the bitcoin wallet itself.

Perhaps more notably, the startup has also announced that it is setting up new headquarters in Switzerland.

With the move, Breadwallet joins an increasing number of cryptocurrency and blockchain startups that have made their home in the so-called "Crypto Valley."

Adam Traidman, Breadwallet's founder and CEO, said of the move:

"Switzerland has emerged as a hotbed of digital currency startup activity, and we were attracted by its leadership in conservative financial legislation. Its strong reputation for financial privacy for consumers is the ideal fit for our charter to empower individuals with the benefits of bitcoin."

In statements, investors participating in the funding round struck a bullish tone on the prospects of future cryptocurrency adoption and the potential for the startup.

"We believe that digital currency will become increasingly influential as the industry continues its rapid expansion, and Breadwallet is well-positioned to be a dominant leader in the space," said Shinji Kimura, founder of DAS Capital.

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Cryptocurrency exchange startup Coinbase has been awarded a new patent related to private key security, public records show.

The U.S. Patent and Trademark Office (USPTO) published the patent yesterday, entitled "Key ceremony of a security system forming part of a host computer for cryptographic transactions." Two former Coinbase engineers – James Hudon, who now works for Uber, and Andrew Alness, currently employed at Keybase – are listed as inventors.

At its heart, the patent concept relates to a method for storing and utilizing bitcoin private keys. Coinbase has filed other patents in the past related to private key security.

As the patent document explains:

"A key ceremony application creates bundles for custodians encrypted with their passphrases. Each bundle includes master key share. The master key shares are combined to store an operational master key. The operational master key is used for private key encryption during a checkout process. The operational private key is used for private key decryption for transaction signing in a payment process. The bundles further include TLS keys for authenticated requests to create an API key for a web application to communicate with a service and to unfreeze the system after it has been frozen by an administrator."

Public records indicate that the patent is the fourth to be awarded to Coinbase to date, and is one of a number of concepts the startup has moved to protect. The application for the "key ceremony" patent was originally submitted in May 2015.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase. 

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Australia is moving to introduce a new bill that would extend the country's anti-money laundering (AML) rules to cover domestic cryptocurrency exchanges.

In a statement this morning, the Ministry of Justice announced that the legislation would seek to bring exchanges within the jurisdiction of the Transaction Reports and Analysis Centre (AUSTRAC), the country's chief financial intelligence office.

The effort dates back to mid-2016, when the government released a broad-ranging statement on financial technologies.

As the government explained today:

"The bill will ... close a regulatory gap by bringing digital currency exchange providers under the remit of AUSTRAC; strengthen AUSTRAC's investigation and enforcement powers; increase police and customs officers' search and seizure powers at the border; and provide regulatory relief to industry through the deregulation of low-risk industry sectors."

Australian lawmakers reaffirmed their intention to develop a new law of this nature last year. At the time, the Attorney-General's Department's indicated its support for such a move, calling for existing statutes to receive a legislative update.

It remains to be seen whether the measure – for which a release date has not been revealed – will face opposition once lawmakers begin debating it. As reported by CoinDesk, at least a few legislators in Australia want to see bitcoin named an official currency, indicating that at least some may push back against the AML effort.

The move comes months after Australia ended a much-maligned "double tax" on bitcoin purchases, a policy shift that was long sought by members of the country's cryptocurrency community.

Australian Parliament House image via Shutterstock

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