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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at

Bitcoin Latest News

Major Magazine Publisher to Accept Bitcoin Payments

Posted on 18 December 2014 | 12:43 pm

Microsoft accepts Bitcoin

Posted on 11 December 2014 | 5:06 am

Mozilla accepting Bitcoin

Posted on 20 November 2014 | 1:55 pm

PayPal and Virtual Currency

Posted on 23 September 2014 | 9:52 pm

Wikimedia Foundation Now Accepts Bitcoin

Posted on 30 July 2014 | 3:14 pm

German Newspaper "taz" accepts Bitcoin

Posted on 22 July 2014 | 1:32 pm

airBaltic - World’s First Airline To Accept Bitcoin

Posted on 22 July 2014 | 11:03 am

Bitcoin Core version 0.9.1 released

Posted on 8 April 2014 | 4:27 pm

Bitcoin taxfree in Denmark

Posted on 25 March 2014 | 5:46 pm

Bitcoin v0.9.0 released

Posted on 19 March 2014 | 6:44 am

Bitcoin-Qt v0.9.0rc3 released

Posted on 13 March 2014 | 3:21 am

Bitcoincharts and SSL

Posted on 4 March 2014 | 2:21 pm

Mt.Gox Statement

Posted on 3 March 2014 | 3:44 am

Bitcoin exchange Cubits launches instant, no-fees crypto donation service for ... - International Business Times UK

International Business Times UK

Bitcoin exchange Cubits launches instant, no-fees crypto donation service for ...
International Business Times UK
German Bitcoin exchange and wallet provider Cubits is offering a charitable donation service in Bitcoin, to help deal with the current refugee crisis in Europe – minus credit card transaction fees. Cubits has done tie-ups with four refugee charities in ...

Posted on 7 October 2015 | 3:39 am

Crowdsourcing Week Europe 2015: Shaping the Future of Bitcoin? - Inside Bitcoins

Inside Bitcoins

Crowdsourcing Week Europe 2015: Shaping the Future of Bitcoin?
Inside Bitcoins
The Bitcoin ecosystem extends far beyond the realm of finance and money; there are so many use cases for the blockchain technology underpinning the digital currency. While developers and engineers try to come up with creative ways to integrate the ...

and more »

Posted on 6 October 2015 | 10:49 pm

Bitcoin Price Hits Highest Level Since August - CoinDesk


Bitcoin Price Hits Highest Level Since August
BTC VIX, organizer of the bitcoin trading forum Whale Club, speculated that traders would now be looking to determine whether the market would continue to support a $245 bitcoin, suggesting that should support consolidate, the price could break toward ...
Bitcoin Price Technical Analysis for 7/10/2015 – The Momentum Grows StrongernewsBTC

all 2 news articles »

Posted on 6 October 2015 | 3:41 pm

73% of Finance Pros Think Blockchain Tech Can Thrive Without Bitcoin - CoinDesk


73% of Finance Pros Think Blockchain Tech Can Thrive Without Bitcoin
"Nearly three-quarters of participants in the [study] believe the blockchain can be put to good use without bitcoin. This result doesn't scream controversial. But while capital markets professionals (who make up most of our sample) are convinced, those ...
When Will Bitcoin Cross 'The Chasm'Brave New Coin

all 3 news articles »

Posted on 6 October 2015 | 12:29 pm

Bitcoin Price Prints a Recovery High - CryptoCoinsNews


Bitcoin Price Prints a Recovery High
Bitcoin price has been wasting everybody's time while the market conceded to jittery [high volume] trade in the CNY exchanges. China may be the world's second largest economy, but it is not the first. US traders and their European prodigenators can ...

Posted on 6 October 2015 | 12:16 pm

Blythe Masters Says Forget Bitcoin, Embrace the Blockchain - Bloomberg


Blythe Masters Says Forget Bitcoin, Embrace the Blockchain
Blythe Masters, chief executive officer of New York technology startup Digital Asset Holdings, doesn't care much about bitcoin. "I never became particularly enamored with cryptocurrency," Masters said at the Bloomberg Markets Most Influential Summit in ...
Ex-JP Morgan exec seeks to raise $25M for bitcoin-like businessNew York Post

all 4 news articles »

Posted on 6 October 2015 | 9:47 am

21 Inc Pledges Support to Bitcoin's Vanishing Nodes - CoinDesk

21 Inc Pledges Support to Bitcoin's Vanishing Nodes
21 Inc, the best-funded company in bitcoin, has pledged to support the network's declining number of nodes. In a blog post co-authored yesterday, CEO Balaji Srinivasan said the firm wants to maintain and incentivise the "critical mass" of full nodes ...

Posted on 6 October 2015 | 7:42 am

Feds auction last batch of Silk Road's seized bitcoins - CNNMoney


Feds auction last batch of Silk Road's seized bitcoins
This is the last treasure trove of bitcoins seized from the now-defunct website Silk Road, which the FBI shut down in 2013. In total, the FBI confiscated about $33.6 million in bitcoins as it seized all assets of Silk Road. The bitcoins were taken from ...
US Marshals to auction last remaining Bitcoins seized from Silk RoadEngadget
US government to auction $10m worth of bitcoins from Silk Road seizureInternational Business Times UK
Bitcoin's First Appearances On Mainstream MediaCryptoCoinsNews
CoinDesk -newsBTC -Reuters
all 36 news articles »

Posted on 6 October 2015 | 6:08 am

Winklevoss Twins Win Approval to Open Bitcoin Exchange - New York Times


Winklevoss Twins Win Approval to Open Bitcoin Exchange
New York Times
After a long buildup, Cameron and Tyler Winklevoss have won approval to open their Bitcoin exchange, Gemini, later this week. The twins, famous from their legal battles with Facebook's co-founder Mark Zuckerberg, announced on Monday that they had ...
With Gemini, Winklevoss brothers seek respect in bitcoinFortune
With Winklevoss Bitcoin Exchange, Digital Currency Grows UpWIRED
Bitcoin Exchange Gemini Approved for Launch in New YorkCoinDesk
Mashable -Insurance Journal -New York Post -Gemini
all 115 news articles »

Posted on 5 October 2015 | 11:13 am

Bitcoin Price Hits Highest Level Since August

The price of bitcoin on the CoinDesk USD Bitcoin Price Index rose to a high today of $247.57, its highest total since 18th August.

Posted on 6 October 2015 | 3:40 pm

Japan's Top Think Tank Launches Blockchain Study

The Nomura Research Institute will study blockchain technology to assess its use in the securities sector.

Posted on 6 October 2015 | 2:50 pm

US Law Commission to Debate Model Digital Currency Bill in DC

The Uniform Law Commission is set to discuss a draft version of a model law for regulating virtual currencies such as bitcoin this week.

Posted on 6 October 2015 | 1:45 pm

73% of Finance Pros Think Blockchain Tech Can Thrive Without Bitcoin

A new survey suggests that many finance professionals see a bright future for the blockchain – just not one involving bitcoin.

Posted on 6 October 2015 | 12:25 pm

BitPay Creates Bitcoin POS Solution for Ingenico Devices

BitPay has partnered with payments giant Ingenico to allow brick and mortar stores to take bitcoin payments via a traditional point-of-sale terminal.

Posted on 6 October 2015 | 11:16 am

21 Inc Pledges Support to Bitcoin's Vanishing Nodes

21 Inc, the best-funded company in bitcoin, has pledged to support the network's declining number of nodes.

Posted on 6 October 2015 | 7:42 am

Santander InnoVentures Adds $4 Million to Ripple’s Series A Round

Ripple has received an additional $4m in funding from Santander InnoVentures, bringing its Series A total to $32m.

Posted on 6 October 2015 | 3:43 am

Commonwealth Central Bankers to Discuss Bitcoin's Role in Remittances

Finance officials from the Commonwealth are set to discuss bitcoin and digital currencies within the context of global remittance flows.

Posted on 5 October 2015 | 3:01 pm

Europol and Interpol Partner to Fight Digital Currency ‘Abuse'

Europol and Interpol have agreed to work together on issues related to the criminal use of digital currencies.

Posted on 5 October 2015 | 11:50 am

Fed Chair: Bitcoin's Popularity Unrelated to Central Bank Policy

US Federal Reserve chairwoman Janet Yellen said the popularity of bitcoin doesn't relate to the public's perception of its monetary policy.

Posted on 5 October 2015 | 10:15 am

Bitcoin Exchange Gemini Approved for Launch in New York

Gemini has received approval to open its New York-based bitcoin exchange to US customers.

Posted on 5 October 2015 | 7:30 am

Ukraine's National Bank Issues Bitcoin Warning

Ukraine's National Bank has warned against the associated risks that come with digital currencies such as bitcoin.

Posted on 5 October 2015 | 6:50 am

The CFTC’s Not-So-Hidden Message: Traders Beware

Bitcoin law experts Brian Klein and Geoffrey Aronow explore recent rulings by the US CFTC and how they affect bitcoin traders across the world.

Posted on 3 October 2015 | 2:50 am

Dutch Central Bank Research Head 'Not Opposed' to Bitcoin

De Nederlandsche Bank (DNB) head of research Jakob de Haan has issued new responses to pointed questions about the role of bitcoin in global finance.

Posted on 2 October 2015 | 3:25 pm

Nasdaq Blockchain Chief: Bitcoin's Currency and Ledger are 'Two Innovations'

In a new interview, Fredrik Voss, head of blockchain strategy at Nasdaq, expands on his organization's developing thesis on the emerging technology.

Posted on 2 October 2015 | 1:50 pm

Bitcoin in the Headlines: R3's Blockchain Dream Team

This week's headlines have mostly been about banks' love for blockchain, sparked by R3CEV's announcement that 13 new banks had joined its project.

Posted on 2 October 2015 | 12:03 pm

Transparent Bitcoin Applications like OKLink Are a Huge Market in China, Says OKCoin's Jack Liu

OKCoin's new superwallet allows bitcoin as a background method of money transfers not only across borders, but across currencies as well.

Jack Liu, head of international at OKCoin, recently discussed bitcoin in China and as an alternative payment system in an interview with Bloomberg Business.

Liu referred to the dramatic price crash of bitcoin in 2013 as a good thing, because it forced developers and entrepreneurs to think of creative applications of bitcoin and its underlying blockchain technology instead of focusing uniquely on the price of bitcoin. As a result, there are now large venture capital investments and lots of startups building infrastructure.

“The people behind the industry used to be very libertarian, very political in nature, and wanted to push an alternative currency and an alternative lifestyle,” said Liu. “You are now seeing the bitcoin players receive venture capital and work with banks closely, trying to create a more harmonious financial system integrating the traditional financial system with the Bitcoin network, and that’s going to be much more powerful.” and , two separate companies owned by the same investors and focused respectively on Chinese and worldwide digital currency trading, were founded in 2013 with a $1 million angel investment from Ventures Lab and Silicon Valley venture capitalist Tim Draper, and received a $10 million series A funding round in March 2014. OKCoin is perhaps the largest exchange in the world with 20 percent of daily trading volume, said Liu.

“As a native speaker of both English and Chinese, and as someone who has worked in traditional finance and at a U.S.-based bitcoin exchange, I hope to bring both international and institutional perspective to OKCoin and to shed more light on the Chinese market with the global Bitcoin community,” said Liu when he joined OKCoin as Director of institutional strategy and sales in November 2014. “I view OKCoin now as an international company, not as a Chinese one.”

According to Liu, the most interesting applications use bitcoin and the blockchain as a transparent intermediate step for fund transfers in fiat currencies, making sending and receiving money as easy as sending and receiving email.

“We can hide bitcoin technology in the background, and that’s what we have launched with a product called OKLink, in the spring, that was the first ‘superwallet’ in the world,” said Liu. “A superwallet is really a mobile wallet that allows you to hold a more comfortable type of value, like the USD or the CNY, but transact over the Bitcoin network.” Liu added that OKLink transactions aren’t affected by the volatility of bitcoin. “Because you are doing instant buy of bitcoin and sell of bitcoin, you are not affected by the bitcoin price,” he said.

OKCoin launched the OKLink “superwallet” in April. OKLink is an open digital wallet, which allows national and digital currencies to transact cross company, cross border, and cross currency in an instantaneous and free manner. OKCoin gives an example of consumer-to-consumer transaction in fiat currencies channeled transparently through the blockchain:

“Paul, an American, and Tom, a Canadian, are good friends. Paul is a Circle user while Tom uses OKLink. Tom would like to borrow from Paul $100 USD worth of Canadian dollars (CAD). Tom opens his OKLink Superwallet and shows his QR Code to Paul. Paul through scanning the QR code with his Circle Superwallet, sends Tom $100 USD. The Circle Superwallet buys exactly $100 USD worth of bitcoins from a U.S. dollar Bitcoin exchange and then via the Bitcoin network sends the bitcoins to Tom’s OKLink account. Tom has instructed as default that incoming funds should be received as CAD. OKLink Superwallet takes the received bitcoins and sells it on a CAD Bitcoin exchange for CAD. In the end, Paul sent $100 USD to Tom, and Tom received it as CAD to use.”

Besides consumer-to-consumer transactions, OKLink can be used for business-to-business, consumer-to-business, and business-to consumer transactions.

“This is a huge market, especially in China,” continued Liu. China already owns around 50 percent of bitcoin mining hashpower and 60 percent of exchange volume, and Chinese people – especially students – are frequently abroad and need efficient cross-border payments. Chinese consumers are already used to “a beautiful payment experience” with WeChat and Alipay for domestic payments, and they expect the same for cross border payments.

Interestingly, the Bank of America (BoA) recently filed a patent application titled “System and Method for Wire Transfers Using Cryptocurrency” for an alternative to traditional wire transfers, where the funds are first transferred to a cryptocurrency exchange, then converted to a cryptocurrency such as bitcoin, then sent to another exchange, and finally converted into another currency for the recipient.

In other words, BoA wants to patent the concept of using a cryptocurrency as a transparent intermediate step for fiat currency transfers, but it seems that OKCoin got there first.

The post Transparent Bitcoin Applications like OKLink Are a Huge Market in China, Says OKCoin's Jack Liu appeared first on Bitcoin Magazine.

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Winklevoss Twins Announce the Launch of Gemini Bitcoin Exchange

Investors have been watching and waiting for the launch of Gemini, the bitcoin exchange launched by Cameron and Tyler Winklevoss, since it was first announced on January 23. The wait is over.

Customers have been begun receiving instructions for onboarding and will be able to officially begin trading on the Gemini exchange starting Thursday, October 8 at 9:30 a.m. EST.

The nine months it took for Gemini to go from announcement to launch is due to a belief in the need to “ask for permission, not forgiveness.” However, on September 23, Gemini Trust Company received approval for its Articles of Organization and was further granted an exemption from the deposit insurance requirements of Section 32 of the Banking Law.

Due to its corporate structure as a limited liability trustcompany (LLTC), it is able to service both individual and institutional customers, which is important because many believe that banks are curious about trading bitcoin.

“The reality is that institutions will bring the most amount of capital to the exchange,” Cameron Winklevoss, president of Gemini Trust Company, told Bitcoin Magazine in an interview and demo. “Every major bank in the world has people looking at bitcoin.”

The downside of being an LLTC is that the company itself cannot provide FDIC insurance for its accounts. That being said, Gemini revealed at launch that Signature Bank, based in New York, was one of its primary partner banks that would hold all fiat currency transferred to Gemini. Through Signature, the fiat currency is eligible for FDIC insurance.

Four Silos of Success

In an interview with Cameron Winklevoss, he revealed that the company operates on four silos that they drive toward for success.

The fastest way for a user to lose trust in a company is for security to be insufficient. Because of that, security is the company’s primary objective. They hired Cem Paya, the former security lead at AirBnB, to be the chief security officer at Gemini. Further, all bitcoin is held by Gemini in a cold, geographically dispersed network of servers. When the Winklevoss Bitcoin ETF, COIN, launches, all of its bitcoin will be held by Gemini.

Taking it a step further, though, the company has put in place a rule that prohibits any links in emails. For example, in its “Gemini is open for business!” launch email, there is no link to Gemini. To prevent phishing attempts whereby a hacker gains access to a user’s account, the individual has to manually type in to register.

Following security came compliance. Since the company is based in New York, that meant working with the New York State Department of Financial Services (NYFDS). According to Winklevoss, NYSDFS seemed open to working with Gemini. Compliance was also required for the remainder of the country.

At launch, users in California, Colorado, Delaware, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota,Mississippi, Missouri, Montana, New Hampshire, New Mexico, New York, North Carolina, Ohio, Rhode Island, South Carolina, Tennessee, Utah, Vermont,Washington, D.C., and Wyoming can use Gemini starting on Thursday.

The third component of the Winklevoss’ four silos is banking. There have been too many instances where a bank won’t cover a bitcoin company because of the concern about auditing. “It didn’t take a lot of selling to convince the bank to work with us,” Winklevoss said. “They liked the team and the product.”

Only after security, compliance and banking were handled did the product become a priority. And if any of the four silos had to suffer, it would be product.

“You have to have all four right to succeed, but if you’re missing a little bit on product, it’s not going to be catastrophic,” he explained. “Rather than building a rocket shop in the air, we built it in the hanger, tested it, and tested it again, and then we have liftoff.”

In his interview with Bitcoin Magazine, Winklevoss talked at length about the risk tolerance of banks and the simple fact that they hate risk.

“It’s better to have the regulatory framework figured out because the risk appetite of banks is conservative. People don’t recognize how important regulation is these institutions. Banks care,” he explained.

And because it is the big institutions that are bringing the majority of the capital, it was important to the team to have that regulatory framework squared away. “There is a lot of dark pool trading, because it is easier, that will go on exchange when they are regulated.”

Gemini wasn’t the first to market, but Winklevoss said that wasn’t important to him.

“Market centers [like Gemini] will build up reputation and credibility with participants over time. A month does not make or break your business,” he explained, referring to other exchanges that had already launched in New York City.

Trading on the Exchange

The exchange opens for trading on Thursday 9:30 a.m. EST, but users can begin the process of signing up today.

Part of the registration process is a knowledge-based authorization. The system will attempt to verify a user’s identity through a Social Security number and then questions about that user’s credit. For example, it will ask if they have ever owned a house on a particular street if that appears on the credit report. This is meant to speed up the authorization process for that user.

In our demo, Winklevoss stressed the importance that he wanted Gemini to become the favorite of both institutions and individuals.

“Early community is certainly very important because they are the most vocal and they are the ones who will touch the product more,” he explained.

The team went with a very clean look, using as much white space as possible. Further, the system was built with visualization engines that enable the user to identify what impact their particular trade will have on the order book.

For example, in the image above, if a user decided topurchase 0.631 BTC at a limit of $237.71, the blue portion of the order book would fill in darker where that purchase takes place. This is meant to show what the average price would be for the user.

At launch, it will be free to deposit and withdraw fundsfrom Gemini. However, the company will charge a 25 basis points fee for both buyers and sellers who trade on the exchange. There will also be APIs for individuals who are more interested in programmatically trading to participate.

Photo TechCrunch / Flickr

The post Winklevoss Twins Announce the Launch of Gemini Bitcoin Exchange appeared first on Bitcoin Magazine.

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Dutch National Police Set Sights on Blockchain-Based Cloud Services

The Dutch National Police have taken an interest in Blockchain-based cloud services. A presentation given over the summer reveals a new focus on Storj and Filecoin.

Members of the Dutch National Police and UNIJURIS gave a presentation in July titled “Technical and Legal Challenges of Criminal Law Enforcement in the Digital Age .” This is an update of a presentation given in 2013 titled “The merits & challenges of distributed least authority data storage .”

The presentations explain how cloud storage and file hosting "Data is cut up in a hundred pieces. Pieces are spread over a hundred servers, in dozens of countries, over a multitude of hosters.”

Both presentations explain how Mega (Mega Limited) replaced the controversial Megaupload cloud storage service. Megaupload was seized and shut down by the United States Department of Justice in January 2012 over copyright infringement claims.

Extradition hearings are currently underway for Megaupload founder Kim DotCom in New Zealand. When the original Megaupload site was seized, federal prosecutors stated, “This action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime.” However, Kim DotCom, founder of Megaupload and Mega, recently distanced himself from Mega, stating over the summer that he would not trust Mega with user data and that he intends to create a third version of the site.

How would you like a new Internet that can't be controlled, censored or destroyed by Governments or Corporations? I'm working on it #MegaNet

— Kim Dotcom (@KimDotcom) February 16, 2015

As the Dutch presentation explains, next-generation technologies such as Mega make it more difficult for law enforcement to seize: “Never mind reading it. Data cannot even be located without the key.”

The presentation from this year was updated to include both Filecoin and Storj (pronounced “storage.”).Filecoin, according to its website, is a “data storage network and electronic currency based on Bitcoin. Users can “Earn Filecoin by renting disk space.” Filecoin was named by both Business Insider and Coindesk as Bitcoin projects to watch in 2015.

Storj, according to its website, is “based on blockchain technology and peer-to-peer protocols to provide the most secure, private, and encrypted cloud storage.” It will allow users to rent out extra hard-drive space and bandwidth using MetaDisk . It is built on top of Bitcoin with the Storjcoin X “SJCX” Counterparty token. According to CoinMarketCap , SJCX has a market capitalization of approximately $735,000 at time of publication.

Bitcoin Magazine spoke with Storj founder Shawn Wilkinson, who said that the presentation did a good job on half the picture:

“Traditionally, law enforcement could knock on the door of a third-party provider for access to information. As this is abused and data becomes more and more abstract and distributed (for economic and reliability) this will become almost impossible. This should lead to a decrease in cybercrimes as well. If governments can't get access to it, neither can attackers.”

Further, he noted that it missed some of the benefits to law enforcement:

“[It] Misses the possible use cases with this type of system in law enforcement. For example, handling of digital evidence in a public and verifiable way. “[This was] Not possible before.”

For example, in a popular dashcam video of a phone theft on Youtube, the detective assigned to the case was eventually provided with a signed (with an indelible ink pen) DVD by the person who captured the video. This seems like an antiquated way to prove authorship.

The presentation offered the following “solutions”:

Regarding Jurisdiction: “Legal duty (based on a warrant, of course) for third parties (companies) to hand over data locally in countries they offer their services in.”

Regarding Enforcement: “Seizure and acquisition moves back to the [end user or] client (not the hoster [or company].) [This creates a] New legal paradigm regarding the ‘location’ of data.”

Wilkinson said that the “P ossible solutions portion won't work at all as these solutions become more and more distributed.” While he disagrees with solutions, he thought the presentation was very forward-thinking and they are “asking the right questions.”

The distributed platform such as that which Storj will provide is a paradigm shift away from traditional centralized services. The past year saw very high-profile hacks of SONY , the Office of Personnel Management and even Ashley Madison . The breadth and scale of these kinds of data breaches are made possible though centrally stored data. While decentralized solutions may make law enforcement’s job more difficult, there must be thoughtful regulation because it might be a service such as Storj’s that will prevent a “cyber Pearl Harbor ” from happening.

Indeed, the authors note that:

“When these technologies, and others like them, converge in the … not so distance future, cloud based security will take a large step forward towards the multi granular least authority approach required for true in-depth cloud security….When looking at the public-order and security aspects of law enforcement, these developments can only be seen as a blessing.”

They also note: “When looking at the same developments from the prosecution and forensics viewpoint however, we see major technological and legal obstacles and challenges arising …”

The Dutch Police have had their hands full lately with a Supermarket Bomber making ransom demands in bitcoin. Earlier this year, The National High Tech Crime Unit of the Netherlands’ police and Kaspersky Lab announced that they would help victims recover from CoinVault ransomware. Earlier this month they arrested two young adults believed to be involved in the CoinVault campaign. They have been playing whack-a-mole with several Silk Road copycats . The Dutch National Police Agency also created a fork on GitHub of John Ratcliff's blockchain: A minimal parser for the bitcoin blockchain .

UNIJURIS, also located in the Netherlands, is a research group on unilateralism and the protection of global interests and has a section on its website called “Extraterritorial jurisdiction on the Internet .” This includes a research paper “The end of territory. The re-emergence of community as a principle of jurisdictional order.”

The post Dutch National Police Set Sights on Blockchain-Based Cloud Services appeared first on Bitcoin Magazine.

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WEF Survey Predicts Bitcoin 'Tipping Point' Happening By 2027

A survey by the World Economic Forum says the tipping point for bitcoin and blockchain adoption will happen by the year 2025.

The majority of 800 executives and experts surveyed by the World Economic Forum (WEF) put the 6-year-old currency bitcoin, as well as the underlying blockchain technology, 10 percent of the world’s Gross Domestic Product (GDP) running through the two technologies by 2025. The WEF was a bit more cautious with its own prediction and put 2027 as year they would reach the “tipping point.”

The WEF described the use of apps such as, a website that allows people to issue programmable contracts that pay out sums of bitcoin when certain factors (set by the creator of the contract) are reached and verified, without the involvement of any middleman, as a “Shift In Action” in society. “These contracts are secured in the blockchain as “self-executing contractual states,” which eliminate the risk of relying on others to follow through on their commitments.”

“[By 2025] 58% of respondents expected this tipping point to have occurred. Bitcoin and digital currencies are based on the idea of a distributed trust mechanism called the 'blockchain,' a way of keeping track of trusted transactions in a distributed fashion. Currently, the total worth of bitcoin in the blockchain is around $20 billion, or about 0.025% of global GDP of around $80 trillion,” read the report.

Positive impacts of bitcoin and blockchain technology reaching a critical tipping point listed by the WEF included: more direct financial transactions with less and less middleman; brand new assets that can be traded; better property records, and more financial inclusion in emerging markets; blockchain-based contacts and legal services used as unbreakable escrow or programmatically designed smart contracts; and increased transparency.

Technological Shifts that Will Change the Future

World Economic Forum’s Global Agenda Council on the Future of Software and Society gathered to identify 21 changes in society caused by software that would shape the future. They then survey business and technological leaders about when the “tipping point” for these technologies would happen and what the possible positive and negative effects of them would be, and published the results in a report titled Deep Shift: Technology Tipping Points and Societal Impact .

The committee featured 18 thought leaders and executives in the technology industry, which included several familiar, or involved, in the bitcoin/blockchain industry. Ron Cao, managing director of Lightspeed Venture Partners, a venture firm that invested in American bitcoin exchange CirclePay and Chinese exchange BTCC (formly BTC China); Primavera De Filippi, research fellow at Berkman Center for Internet & Society, France, and early explorer of bitcoin’s and blockchain’s effect on modern law, among others.

The report also included the “sharing economy,” 3D printing, smart cities, wearable devices, the Internet of Things (IoT), among the list of future-shaping technologies.

“Now comes the second machine age. Computers and other digital advances are doing for mental power – the ability to use our brains to understand and shape our environments – what the steam engine and its descendants did for muscle power,” wrote Council Vice-Chair and Director at MIT Initiative on the Digital Economy at Massachusetts Institute of Technology Erik Brynjolfsson in the report.

Blockchain use by governments was another trend that was included in the list. Possible uses by governments included recording land registries, tax collecting schemes, and other improvements in governmental processes. The tipping point decided by the WEF was the first time that tax is collected through a blockchain application and expected it to happen by 2023.

“[By 2025] 73% of respondents expected this tipping point to have occurred. The blockchain creates both opportunities and challenges for countries. On the one hand, it is unregulated and not overseen by any central bank, meaning less control over monetary policy. On the other hand, it creates the ability for new taxing mechanisms to be built into the blockchain itself (e.g. a small transaction tax).”

The WEF remained neutral on whether this would be a net positive or negative, citing corruption, real-time taxation, and unclear role for government in the process, including a state’s central bank, were reasons it could “cut both ways.”

An example given by the report as already underway was a 2016 mayoral candidate of London who has suggested implementing blockchain technology to upgrade the city’s’ ledger for land, as well as for its finances and budget. (Similar experiments are going on in Honduras and the Isle of Man.) “Because these records are kept permanently, there is a strong possibility (without the blockchain) for them to be altered or faulted.”

“The Internet is driving a shift towards networks and platform-based social and economic models. Assets can be shared, creating not just new efficiencies but also whole new business models and opportunities for social self-organization. The blockchain, an emerging technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities,” concluded the report.

Photo World Economic Forum

The post WEF Survey Predicts Bitcoin 'Tipping Point' Happening By 2027 appeared first on Bitcoin Magazine.

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Australian Startups Close Down as Banks End Support for Bitcoin

Australia’s largest banks have ended all financial support and abruptly closed down the bank accounts of at least 17 Australian Bitcoin companies, including the Australian Digital Currency Commerce Association Chairman Ron Tucker’s Australian bitcoin exchange Bit Trade.

“The banks had not advised any of our members. To the best of our knowledge all, or nearly all digital currency businesses have received letters from their bank, or in many cases banks, advising of the closure of their accounts. This includes at least 17, with 13 of these closed permanently,” Tucker told Bitcoin Magazine.

Major Australian banks, including Westpac Banking Corporation and Commonwealth Bank of Australia, have not announced their motivations behind the termination of banking support for bitcoin companies. This incident has attracted the attention of the Australian Competition and Consumer Commission (ACCC) and Senator Matthew Canavan, who sees the sudden pronouncement of the bank as an unlawful act, and has requested the ACCC to launch a full investigation on the banks.

“Whilst we're unable to comment on the banks’ motivations (that is for them to explain) however, the consequences of these moves are becoming more clear. The Australian Bitcoin industry, as part of a larger revolution in financial technology, has seen its growth severely curtailed by this unexplained wave of debanking,” Tucker added.

Startups Begin to Leave Australia

“Unfortunately most digital currency startups have already shut their doors in Australia as no alternative banking solutions were available. In at least one case, one Bitcoin company, Coinjar, did relocate its head office to a more welcoming market in the U.K.,” Tucker told Bitcoin Magazine.

Most Australian Bitcoin startups offer bitcoin exchange services and merchant bitcoin payment processing; two of the few bitcoin-related services which require banking or credit card support. Although some bitcoin startups have begun to search for alternative financial institutions and organizations to maintain their operations, most companies have failed to secure banking service partnerships.

“Presently the industry here in Australia have no alternative options despite best efforts of our members to reach out to various banking sector participants,” added Tucker.

No Clear Justification

Labor Senator and a member of the Senate Economics References Committee Sam Dastyari showed his concerns toward the banks, due to their lack of explanation and justification behind the abrupt termination of banking support.

"I am concerned that there is an allegation that Australian banks are deliberately choking small businesses, while setting themselves up to offer the same services. We don't have a four-pillars policy to allow banks to guillotine emerging industries they are competing with … These small local digital currency companies are essentially competing to provide trading platforms, and develop emerging technologies,” explained Dastyari .

The Australian Digital Currency Commerce Association strongly believes that the banks owe an explanation and a clear justification behind the “debanking” of the companies. Currently, all Australian major banks have terminated banking support for Bitcoin companies.

“Our members have said the banks have been remarkably unwilling to provide explanations for ceasing to provide services for ADCCA members. Our members, some of whom may end up being partners with or competitors to the banks in the future, are currently at the mercy of established financial institutions. At the very least I think our members are owed an honest explanation of why they are being debanked,” Tucker said.

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Beyond Bitcoin: How the Blockchain Can Power a New Generation of Enterprise Software

This is a guest post by Jesus Rodriguez.

Bitcoin has become one of the most intriguing and revolutionary technologies created in the last few years. From a functional standpoint, the cryptocurrency has challenged the most fundamental principles of the world’s financial systems by providing a decentralized, secured and trusted model to process financial transactions. To enable its magic, Bitcoin relies on an architecture powered by a groundbreaking technology known as the blockchain.

While bitcoin has clearly become the most important implementation, it is just one of many practical applications that can be powered by the blockchain. From the conceptual standpoint, the blockchain provides a series of capabilities that can change some of the well-established architectures in the enterprise digital world.

How can the blockchain redefine enterprise?

The decentralized, autonomous, trusted and secured capabilities of the blockchain can redefine the foundational patterns of enterprise applications. While the principles of the blockchain are well-understood patterns in enterprise solutions, until now we have lacked practical implementations that validate its functionality at an enterprise scale. The blockchain opens a new set of opportunities to enterprise scenarios that weren’t possible before. However, in order for blockchain solutions to be embraced in enterprise, they will have to develop a series of key capabilities to get past traditional IT compliance and regulatory practices.

What’s needed to adopt the blockchain in enterprise?

Despite its unique value, the process of adopting blockchain solutions in enterprise is far from trivial. Like many other technology trends, blockchain solutions will have to develop a series of enterprise-ready capabilities to be adopted in mainstream business scenarios. Those enterprise-ready capabilities are called to address many requirements in areas such as management, operational readiness, or compliance, which are essential to adopt solutions on different industries. The following list includes some of the key capabilities required to adopt the blockchain in mainstream enterprise scenarios.

  • Development Platform: The blockchain is a very complex architecture modeled in terms of transactional exchanges. To mitigate that complexity, we need programming frameworks and languages that allow average developers to build general-purpose applications against the blockchain.
  • Monitoring Tools: To be adopted in enterprise settings, the blockchain community should produce solutions that can actively monitor the health of a blockchain network and recover from unexpected failures. These capabilities will allow organizations to monitor the runtime behavior of blockchain solutions.
  • Private Cloud Deployments: Facilitating the deployment of the blockchain in private cloud topologies using mainstream enterprise infrastructures is a key element to facilitate the wide adoption of blockchain solutions in the enterprise. In that sense, the blockchain should work seamlessly with technologies such as Docker, VMWare vCloud, Open Stack among other mainstream enterprise infrastructure platforms.
  • Standards: As organizations start adopting blockchain solutions, the need to have standards will become increasingly relevant. Standards will facilitate the interoperability between different blockchain platforms while also enabling important security and compliance requirements of enterprise solutions.
  • Interoperability with Well-Established Enterprise Platforms: Like any other enterprise software trend, blockchain solutions will be required to integrate with established enterprise platforms like databases, line of business systems, etc. Enabling that interoperability will be essential to power the adoption of blockchain solutions in the enterprise.

10 Enterprise Scenarios that can be Redefined by the Blockchain

Decentralized IoT

The Internet of Things (IoT) is becoming one of the most important trends in modern enterprise software. While many IoT platforms are based on a centralized model in which a broker or hub control the interaction between devices, this model has proved to be impractical for many scenarios in which devices need to exchange data between themselves autonomously. That specific requirement has been the fundamental principle behind decentralized IoT platforms. Those decentralized models are fundamentally powered by a trusted ledger of exchanges between smart devices fundamental to power real-world IoT solutions.

The blockchain provides foundational capabilities of decentralized IoT platforms such as secured and trusted data exchange as well as record-keeping. In this type of IoT architecture, the blockchain will serve as the general ledger, keeping a trusted record of all the messages exchanged between smart devices in an IoT topology.

Keyless Signature

Public Key Infrastructure (PKI) has been one of the fundamental technologies powering data signatures. PKI models rely on a central authority to stamp and validate signatures on a data payload. While PKI models have been incredibly successful, the dependency on a central authority presents serious limitations for large-scale scenarios and is also vulnerable to attacks involving quantum computation.

The characteristics of the blockchain can help to overcome some of the limitations of PKI models with a keyless security infrastructure (KSI). A KSI model uses only hash-function cryptography, allowing verification to rely only on the security of hash functions and the availability of a public ledger commonly referred to as a blockchain.

Data Archiving

Archiving historical data in a secure and trusted manner has been a permanent challenge of enterprise IT. Companies like EMC have become one of the most iconic enterprise software companies in history by providing robust storage and archiving solutions. More recently, cloud platform vendors such as Amazon have provided alternative data archiving solutions. However, in both cases, data archiving solutions rely on a centralized storage model, which has well-known limitations in enterprise scenarios in areas such as security and privacy.

Decentralized and autonomous data archives models, such as the ones provided by the blockchain, can be an interesting alternative to centralized data storage solutions. This model will eliminate the dependency on a centralized authority and will allow distributed and trusted storage across nodes in a blockchain network. More importantly, using the blockchain as a data archive will allow any nodes to validate the authenticity of the archived data without relying on central hub.

Decentralized B2B Auditing

Business-to-business (B2B) exchange models are one of the foundations of modern commerce. In those scenarios, transaction tracking, auditing and reconciliation processes are essential capabilities of B2B processes. Traditional B2B platforms enable these capabilities by providing centralized transaction tracking models that will be used by the different B2B endpoints to log relevant events of a specific transaction. These centralized tracking models have proved to be impractical to address many of the typical challenges of B2B transaction tracking processes in areas such as auditing and reconciliation.

Leveraging the blockchain as a decentralized, secured and trusted transaction ledger could be a more effective model to address the challenges of B2B transaction tracking solutions. Using the blockchain, each party in a B2B process could autonomously track the events related to a B2B transaction without the need to rely on a centralized authority. Additionally, the security capabilities of the blockchain will facilitate the implementation of more sophisticated reconciliation and auditing processes.

Legal Proof of Existence or Proof of Possession

Validating the existence or the possession of signed documents is an incredibly relevant element of legal solutions. The challenge of traditional document validation models is that they relied on central authorities for storing and validating the documents, which presents some obvious security challenges, but also becomes more difficult as the documents become older.

The blockchain provides an alternative model to proof-of-existence and possession of legal documents. By leveraging the blockchain, a user can simply store the signature and timestamp associated with a document in the blockchain and validate it at any point using the native blockchain mechanisms.

Distributed File Storage

Cloud file storage solutions such as Box, Dropbox or One Drive are becoming regular citizens of modern enterprise environments. Despite its popularity, cloud file storage solutions typically face challenges in areas such as security, compliance and privacy in order to be adopted in enterprise environments. Those concerns are all rooted behind the fact that enterprises need to trust a third-party cloud system with their confidential documents.

Security Trade Settlement

Central Security Depositaries (CSDs) have been an essential element of modern equity and bond trading. In the U.S. equity market, following frequent bottlenecks during the late 1960s in the settlement of securities trades, CSDs smoothed the post-trade process for transferring share ownership by eliminating the exchange of paper certificates and recording transactions in central, computerized book-entry systems. The international CSDs Euroclear and Cedel (now Clearstream) played a similar role in the Eurobond market from the 1970s onward.

The centralized nature of CSDs is essential to successful bond and equity trades. However, the settlement process via CSDs is incredibly expensive and slow, averaging two or three days per trade settlement.

The blockchain offers an interesting alternative to traditional CSDs as a decentralized ledger that can keep records of transactions without relying on a central authority. The query capabilities of the blockchain will allow the settlement of trades in minutes or even seconds and at a fraction of the cost of the current CSD solutions.


Counterfeiting remains as one of the biggest challenges in modern commerce. Segments like luxury goods, pharmaceutical or electronics are constantly affected by counterfeiting. As a result, the demand for anti-counterfeiting remains one of the hottest topics in the digital commerce world. Unfortunately, most solutions in the market require a trust in the third-party authority, which introduces a logical friction between merchants and consumers.

The decentralized and security capabilities of the blockchain can enable an interesting alternative to traditional anti-counterfeiting platforms. In that sense, we can envision a model in which brands, merchants and marketplaces are part of a blockchain network with nodes storing information to validate the authenticity of specific products. In this model, brands don’t have to trust a central authority with their product authenticity information and can rely on the security and decentralized trust models of the blockchain.


Governments all over the world are investing deep resources to digitize many of their existing processes. Many of these processes deal with sensitive information that require sophisticated levels of traceability, privacy and security. Inevitably, the digital collaboration process relies on trust on centralized authorities.

The blockchain capabilities provide a robust option to enable the digital collaboration between government agencies and citizens. In this model, different government agencies can store records in blockchain nodes so that it can be accessed and verified by other government parties and citizens in a secure and trusted way.

P2P Commerce

Traditional ecommerce business models are based on the presence of a centralized entity that control activities such as order processing, inventory management, catalog access, etc. In order to buy and sell goods, ecommerce marketplaces need access to sensitive user information such as credit card information, user profile data etc. This information often becomes the target of cybersecurity attacks and many other security and regulatory challenges.

The architecture of the blockchain can enable the first effective peer-to-peer (P2P) ecommerce network in which buyers and sellers can interact directly without the need of a central authority. The absence of a central marketplace eliminates many of the restrictions of ecommerce models such as fees, regulated transactions, etc.


The blockchain represents one of the most important advancements in computer science of the last few years. The ability to enable decentralized, secure, trusted and highly scalable architectures opens the door to a new group of enterprise software solutions on a large number of industries. Blockchain-powered solutions have the opportunity to challenge some of the fundamental architecture principles of enterprise solutions in areas such as security, data storage, trust, etc. Similar to Bitcoin, we should expect to see spectacular platforms in the enterprise software space powered by the blockchain.

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Bitcoin Used to Pay Utility and Credit Card Bills in the Philippines and Australia

Over the past year, bitcoin startups in the Philippines and Australia have begun to target day-to-day expenses and remittances; markets that are in desperate need of instantaneous, secure and cost-effective payment systems.

Startups including Australia-based Living Room of Satoshi and Manila-based, also known as the parent company of Bills Ninja, have been trying to educate the global population to use bitcoin in day-to-day expenses, such as paying utility bills and settling bank payments.

Paying Bills with Ease

Earlier this year, acquired bitcoin bills payment platform Bills Ninja, to allow its users to settle rental, tuition, and electricity and credit card bills abroad. The service has been used by Filipino expats working in countries including Canada, UAE, Singapore, Hong Kong, Austrailia and Canada.

“Using Bitcoin, we've made it easier for Rebit users to send targeted remittances. A good number of remittances coming from overseas Filipino workers are intended for bills payments anyway. By enabling our users with this service, we've made it more convenient by eliminating that second step for them,” CEO John Bailon told Bitcoin Magazine.

An official with Satoshi Citadel, the parent company and investor of told Bitcoin Magazine that the Philippines-to-Canada, -Hong Kong and -Singapore remittance markets are huge, and that there are hundreds of thousands of Filipino employees working in these countries to support their families in their homeland.

Quite often, these expat workers pay utility bills such as water and electricity and credit card bills directly from these countries, using the platform or the platform, which is currently ranked among the top 300 most popular websites in the Philippines., a competitor of has seen a huge success through its partnerships with local banks, remittance outlets and financial institutions. The platform enables users to pay utility bills and cash out bitcoin at any of its supported outlets, including thousands of ATMs from the nationwide Security Bank and remittance outlets from Lhuiller and Palawan Pawn Shop.

However, Bailon told Bitcoin Magazine that its platform is different from services such as, because of its over-the-counter transactions for remittances and bills payments.

“ allows people to load funds into and draw from their mobile money wallet, while Rebit is closer to the current user experience of an electronic over-the-counter transactions for remittances and bills payments,” Bailon explained.

Currently, many local residents and employees prefer to pay bills at local establishments and institutions. However, the team says that the local residents are starting to recognize the advantages of bitcoin and bitcoin bills payment systems.

“There needs to be a paradigm shift in consumer behavior when it comes to electronic bills payments. Most Filipinos still pay their bills in-person at establishments even though they actually have access to more convenient methods. We're getting there, and when more and more people start to realize the convenience of electronic bills payments, Rebit is here to allow them to do it over the blockchain,” said Bailon.

Living Room of Satoshi

Living Room of Satoshi, Australia-based bills payment platform allows anyone to pay any Australian bill using bitcoin. The platform has been providing bitcoin bills payment service in all sectors, including shopping, entertainment, banking, Internet, electricity/gas, rent, tax, insurance and water.

The platform has been welcomed and used by Australian residents across the country. In a recent interview with Bitcoin Magazine, Australian farm Buda Foods founder and CEO Mark Burgunder said:

“We currently have a great service available here called Living Room of Satoshi that allows us to make bill payments and electronic transfers to almost any bank account in Australia using bitcoins. We've been using this service on a number of occasions already with the largest purchases so far having been for chicken feed and for mobile electric fencing.”

Many bitcoin enthusiasts and startups in the Philippines and Australia believe that the key to mainstream success for bitcoin is to educate the general population about its advantages, and encourage people to use bitcoin for day-to-day expenses.


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Building a Risk Market for the Digital Age Using Bitcoin

This is a guest post by Michael Folkson.

The Internet was originally developed as a network for information exchange. Now, a multitude of entrepreneurs and software developers are building the Internet for value exchange. The next logical progression is to build the Internet for risk exchange.

Just as units of currency can be transferred to a third party, insurance contracts transfer risk exposures to a third party. Blockchain technology has the potential to radically transform how the insurance industry operates and how risk exposures are shared and distributed.

While Bitcoin offers a protocol for peer-to-peer value transmission bypassing the traditional banking system, an insurance industry leveraging a public blockchain presents an opportunity for individuals and entities to retain, share or transfer risk exposures without the requirement for risk exposures to sit on an insurance company’s balance sheet.

Science fiction frequently offers inspiration for what an industry could look like in the future. The short speculative fiction titled "Know When to Hold ’Em" by K.G. Jewell is a somewhat dystopian vision of futuristic insurance, but it does explain how the user interface of a peer-to-peer insurance market could operate.

In the story, the lead character, Jonas, acts as an insurer on the platform MicroRisk. Among the microrisks he chooses to provide insurance coverage for are vacation sickness, exam results, fashion (two individuals wearing the same outfit at an event) and being stood up on a first date. He is required to post collateral into his MicroRisk account before insuring a risk and is able to audit claims before paying out on them. The policyholder’s premium and the insurer’s collateral are frozen in escrow until the contract closed.

Some of these risks may be difficult to price due to limited data and increased moral hazard. However, the story does stir the imagination when envisaging what personal risks could be insured if the requirement to go through a conventional insurance company was lifted.

The transfer and distribution of risk dates back to at least to the second millennium B.C. In approximately 1750 B.C. Mediterranean sailing merchants paid their lender an additional sum to agree to terminate their liability conditional on the shipment being stolen or lost at sea.

There are a number of participants in today’s insurance industry. Brokers act as intermediaries to connect insurance buyers and sellers. Underwriters determine the premiums that should be charged in conjunction with the actuaries who also estimate the reserves required to meet future claims on an ongoing basis. Claims adjusters verify the legitimacy of insurance claims and assess the size of the payout.

There are many parallels between the banking and insurance industries with both sectors rewarded for accepting risk exposures. Rather than lending out funds and (hopefully) receiving them back at a future point in time, insurance companies receive funds in advance and return them contingent on future events.

The peer-to-peer lending model has thrived in recent years with companies such as Lending Club, Prosper and Zopa facilitating more than $1 billion of loans between individuals.

Its success is at least partly explained by re-establishing a direct link between investors and specific credit risk exposures at a time of economic uncertainty, sovereign debt crises and complex too-big-to-fail banking institutions. These direct credit risk exposures allow an investor to diversify her overall portfolio, and there are minimal infrastructure costs in comparison to traditional retail banks.

Similarly, a peer-to-peer insurance platform re-establishes a direct link between investors and specific insurance risk exposures. Today’s insurance companies are so large, complex and heavily regulated that the direct link between an investor and specific insurance risks has eroded. If an investor wants exposure to insurance risk to diversify her portfolio, she has little option but to invest in the shares of an insurance group and be exposed to multiple insurance risks in addition to asset risks such as sovereign bonds.

It is extremely difficult to match an investor’s risk appetite with specific insurance risks such as personal or commercial, home, car, health or travel. Moreover, it is impossible for an investor to opt out of specific risk exposures. The only insurance risks investors can get direct exposure to are credit and catastrophe risk through the issue of catastrophe bonds.

The peer-to-peer insurance model offers investors an opportunity to generate higher investment returns, transparency with regards to risk exposures and the satisfaction of directly insuring individuals or businesses rather than investing in a faceless insurance company. It offers policyholders access to cheaper premiums, faster claim payments and insurance coverage that might not be available through traditional channels.

Satoshi Nakamoto’s primary achievement of preventing users spending the same bitcoin on multiple occasions ("double spending") without a reliance on a trusted third party is a historic feat. However, it is worth emphasizing the obvious that the protocol does not wholly eradicate reliance on trusted third parties for all financial contracts.

For example, escrow mechanisms that are easily built using the Bitcoin protocol may still require dispute resolution if there is a disagreement over whether the goods or services delivered are of sufficient quality.

Nevertheless an escrow transaction built on a Bitcoin-like blockchain could be a template for how future insurance contracts are constructed. The insurance buyer and the insurance seller could transfer the premium and the collateral respectively into a multi-signature (2-of-3) Bitcoin wallet. The third signatory to the wallet would be the arbiter. Funds would be released from the wallet conditional on two parties signing the transaction, preventing the buyer, seller or arbiter from fraudulently seizing the funds.

Just as the execution of a standard escrow contract will rely on an arbiter to resolve disputes between the buyer and the seller, the execution of an insurance contract relies on claims adjusters to verify that incoming claims are valid and if necessary estimate the monetary value of the claim.

This service will vary from reviewing evidence submitted by the claimant to physically inspecting the scene of the insured event depending on the magnitude of the claim. It is currently difficult to automate this function, and artificial intelligence is not yet advanced enough to rebuff all human attempts of fraudulent submissions.

Decentralized platforms heavily rely on the efficacy and dependability of reputation systems. The upside of bypassing centralized services such as eBay, Kickstarter or Uber is that no third party can charge excessive fees, impose restrictive policies, prohibit bitcoin payments or present a single point of failure in the storing of users’ personal data.

However, the downside is that no organization is responsible for maintaining the integrity of the system. Instead a mixture of user feedback, reputation scoring and financial incentives must be combined to construct robust reputation systems. The alternative is to build quasi-decentralized systems that may be an improvement on centralized systems but don’t accrue all the benefits of purely decentralized systems.

For example, the various activities of an insurance company could be unbundled so that some activities are automated while others are outsourced to external providers. It may be the case that quasi-decentralized systems will need to be built as an intermediate step or that optimal systems will never be purely decentralized. However, it makes sense to fully explore all the options and capabilities of this technology before falling back on how current systems already operate.

Although private blockchains (or ‘permissioned distributed ledger systems’) are useful for keeping databases in sync in a more trusted environment, they are an incremental innovation when compared to the potential of public blockchains. Just as Bitcoin opens the floodgates for peer-to-peer transactions and permissionless innovation, peer-to-peer insurance leveraging a smart contracts protocol could provide a platform for matching insurance buyers and insurance sellers for any risk they agree to exchange.

This marketplace would be a radical paradigm shift from today’s centralized and spatially anchored insurance industry. The blockchain provides the opportunity to build a more innovative, expansive and transparent industry that evolves to the needs and requirements of its users.

Photo Pictures of Money / Flickr (CC)

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R3 Blockchain Development Initiative Grows to 22 Banks Worldwide

The international R3 blockchain project to develop blockchain commercial applications and standards for the financial world just got a whole lot weightier as 13 new global banks joined the distributed or “shared” ledger initiative.

R3, the international financial innovation firm, based in New York, London and San Francisco, is a multidisciplinary team including experts from the worlds of electronic banking, new tech startups, and cryptography and digital currencies development, aiming to “define, design and deliver the next generation of financial technology.”

The 13 new banks joining the project are:

  • Bank of America
  • BNY Mellon
  • Mitsubishi UFJ Financial Group
  • Citi
  • Commerzbank
  • Deutsche Bank
  • HSBC
  • Morgan Stanley
  • National Australia Bank
  • Royal Bank of Canada
  • SEB
  • Societe Generale
  • Toronto-Dominion Bank

These banks join current project members Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, J.P. Morgan, Royal Bank of Scotland, State Street and UBS.

“The addition of this new group of banks demonstrates widespread support for innovative distributed ledger solutions across the global financial services community, and we're delighted to have them on board," R3 CEO and former ICAP Electronic Broking CEO David Rutter said in a press release.

"We have placed an emphasis on working with the market from day one, and our partners recognize that a collaborative model is the best way to quickly, efficiently and cost-effectively deliver these new technologies to global financial markets," Rutter said.

As Bitcoin Magazine previously reported , Rutter has recruited Nichola Hunter, former ICAP trading executive; Richard Brown, a technology expert formerly with IBM UK; and Tim Swanson, a U.S.-based cryptocurrencies consultant, to work in a collaborative lab environment or "sandbox" to test and validate blockchain applications, prototypes and protocols.

This major project brings together not only the experts, but also the considerable resources of 22 big banks to collaborate on “research, experimentation, design and engineering to help advance state-of-the-art enterprise-scale shared ledger solutions to meet banking requirements for security, reliability, performance, scalability and audit.”

Photo Clément Bardot / Wikimedia(CC)

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October 7, 2015 -
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