ARK Press and News, Investing in Disruptive Innovation

ARK ETFs, TEAM, AND INVESTMENT PHILOSOPHY IN THE NEWS

ETF.com, July Nineteen, 2016

Bloomberg Radio Interview

October 29, 2015

“Are See-through Managed ETFs The Future? Fund Manager Cathie Wood Is Betting On It”

Samantha Sharf, Forbes

December Ten, 2014

IN THE NEWS ARCHIVE

Broadcast

Press and Online

ARK Press Release

For further information about ARK ETFs, or to request interviews or information, we ask that members of the press please contact:

ARK Active ETFs

ARK Index ETFs

Investor Material

Investor Education

In The News

About ARK

Investors should cautiously consider the investment objectives and risks as well as charges and expenses of an ARK ETF before investing. This and other information are contained in the ARK ETFs’ prospectuses, which may be obtained by clicking here. The prospectus should be read cautiously before investing. An investment in an ARK ETF is subject to risks and you can lose money on your investment in an ARK ETF. There can be no assurance that the ARK ETFs will achieve their investment objectives. The ARK ETFs’ portfolios are more volatile than broad market averages. The ARK ETFs also have specific risks, which are described in the ARK ETFs’ prospectuses.

Shares of the ARK ETFs may be bought or sold across the day at their market price on the exchange on which they are listed. The market price of an ARK ETF’s shares may be at, above or below the ARK ETF’s net asset value (“NAV”) and will fluctuate with switches in the NAV as well as supply and request in the market for the shares. The market price of ARK ETF shares may differ significantly from their NAV during periods of market volatility. Shares of the ARK ETFs may only be redeemed directly with the ARK ETFs at NAV by Authorized Participants, in very large creation units. There can be no ensure that an active trading market for ARK ETF shares will develop or be maintained, or that their listing will proceed or remain unchanged. Buying or selling ARK ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment comes back. Not FDIC Insured – No Bank Ensure – May Lose Value

All statements made regarding companies, securities or other financial information on this site are rigorously beliefs and points of view held by ARK Investment Management LLC and/or ARK ETF Trust and are subject to switch without notice. Certain information on this site was obtained from sources that ARK believes to be reliable; however, ARK does not ensure the accuracy or completeness of any information obtained from any third party. The information on this site is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The information on this site is general in nature and should not be considered legal or tax advice. An investor should consult a financial professional, an attorney, or tax professional regarding the investor’s specific situation.

Certain hyperlinks or referenced websites on this site may, for your convenience, forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services do not constitute an endorsement, authorization, sponsorship or affiliation with ARK with respect to any linked site or its sponsor, unless expressly stated by ARK. Any such information, products or sites have not necessarily been reviewed by ARK and are provided or maintained by third parties over whom ARK exercises no control. ARK expressly disclaims any responsibility for the content, the accuracy of the information, and/or the quality of products or services provided by or advertised on these third-party sites. ARK reserves the right to terminate any hyperlink or hyperlinking program at any time.

ARK Investment Management LLC is the investment adviser to the ARK ETFs.

Foreside Fund Services, LLC, distributor.

© 2017. ARK ETF Trust. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

ARK Press and News, Investing in Disruptive Innovation

ARK ETFs, TEAM, AND INVESTMENT PHILOSOPHY IN THE NEWS

ETF.com, July Nineteen, 2016

Bloomberg Radio Interview

October 29, 2015

“Are Semi-transparent Managed ETFs The Future? Fund Manager Cathie Wood Is Betting On It”

Samantha Sharf, Forbes

December Ten, 2014

IN THE NEWS ARCHIVE

Broadcast

Press and Online

ARK Press Release

For further information about ARK ETFs, or to request interviews or information, we ask that members of the press please contact:

ARK Active ETFs

ARK Index ETFs

Investor Material

Investor Education

In The News

About ARK

Investors should cautiously consider the investment objectives and risks as well as charges and expenses of an ARK ETF before investing. This and other information are contained in the ARK ETFs’ prospectuses, which may be obtained by clicking here. The prospectus should be read cautiously before investing. An investment in an ARK ETF is subject to risks and you can lose money on your investment in an ARK ETF. There can be no assurance that the ARK ETFs will achieve their investment objectives. The ARK ETFs’ portfolios are more volatile than broad market averages. The ARK ETFs also have specific risks, which are described in the ARK ETFs’ prospectuses.

Shares of the ARK ETFs may be bought or sold across the day at their market price on the exchange on which they are listed. The market price of an ARK ETF’s shares may be at, above or below the ARK ETF’s net asset value (“NAV”) and will fluctuate with switches in the NAV as well as supply and request in the market for the shares. The market price of ARK ETF shares may differ significantly from their NAV during periods of market volatility. Shares of the ARK ETFs may only be redeemed directly with the ARK ETFs at NAV by Authorized Participants, in very large creation units. There can be no assure that an active trading market for ARK ETF shares will develop or be maintained, or that their listing will proceed or remain unchanged. Buying or selling ARK ETF shares on an exchange may require the payment of brokerage commissions and frequent trading may incur brokerage costs that detract significantly from investment comebacks. Not FDIC Insured – No Bank Ensure – May Lose Value

All statements made regarding companies, securities or other financial information on this site are rigorously beliefs and points of view held by ARK Investment Management LLC and/or ARK ETF Trust and are subject to switch without notice. Certain information on this site was obtained from sources that ARK believes to be reliable; however, ARK does not ensure the accuracy or completeness of any information obtained from any third party. The information on this site is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The information on this site is general in nature and should not be considered legal or tax advice. An investor should consult a financial professional, an attorney, or tax professional regarding the investor’s specific situation.

Certain hyperlinks or referenced websites on this site may, for your convenience, forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services do not constitute an endorsement, authorization, sponsorship or affiliation with ARK with respect to any linked site or its sponsor, unless expressly stated by ARK. Any such information, products or sites have not necessarily been reviewed by ARK and are provided or maintained by third parties over whom ARK exercises no control. ARK expressly disclaims any responsibility for the content, the accuracy of the information, and/or the quality of products or services provided by or advertised on these third-party sites. ARK reserves the right to terminate any hyperlink or hyperlinking program at any time.

ARK Investment Management LLC is the investment adviser to the ARK ETFs.

Foreside Fund Services, LLC, distributor.

© 2017. ARK ETF Trust. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Related video:

Announcing the Thunder Network Alpha Release – Blockchain Blog

Announcing the Thunder Network Alpha Release

At Blockchain, we’re on a mission to create an open, accessible, and equitable financial future. Since our inception, we have focused on building products that make it effortless for everyday people to use bitcoin to store and transfer value all over the world. We make Bitcoin usable and useful. We’ve been able to do that because we develop with a user-focused mandate.

A swifter, cheaper, and more functional network would produce real value to our users, so we were excited by the growth of research into payment channel technology on the bitcoin network and innovative uses of this technology . We were particularly interested in the idea of using brainy contracts to build what are basically super-charged payments networks, as outlined in a white paper by the lightning.network team . Last year, we hired a talented engineer, Mats Jerratsch, who had been pioneering innovation in this vertical to work with our engineering team and lead research and development on a network based around these ideas.

Lightning networks have been purely conceptual, research based, and only in test nets and labs – until now. Today, we release the alpha version of our Thunder Network, the very first usable implementation of the Lightning network for off chain bitcoin payments that lodges back to the main bitcoin blockchain.

Thunder has the potential to facilitate secure, trustless, and instant payments. It has the capability to let out the power of microtransactions, to permit the bitcoin network to treat intense fountains, and to increase user privacy. In this Alpha version, we prove that it can be done. From a feature perspective, there is both a knot and a wallet (with GUI) present. Even more importantly:

  • Settlement to the bitcoin blockchain
  • Scale: According to our tests so far, we can achieve better-than-Visa scale (100,000 TPS) with only a few thousand knots on the network
  • Enormously cheap payments: fees will develop naturally, due to the free market in an open and permissionless network and will fundamentally be lower than on-chain payments
  • Encryption and Authentication: All communications inbetween all knots and wallets are encrypted using AES-CTR and take place only after completing authentication.
  • Seed Peers and automatically provide them with network topology using a basic gossip protocol similar to the one used in the bitcoin network, which permits sophisticated routes over numerous hops
  • Payment Channels can be opened and closed at will, with transactions lodging onto the bitcoin blockchain
  • Payment Debate: Across the route each hop will renegotiate a fresh status with the next hop, as a payment makes its way through the network with cryptography in place to prevent fraud
  • Relaying Payments: TN will relay payments over numerous knots in the network automatically, using encrypted routing. No one knows who made a payment, permitting for more privacy
  • Lodge payments automatically, no manual intervention needed. The settlement will ripple back through the network to provide proof-of-payment
  • Instant Payments that are irrevocable the moment you see them

Until both CSV and SegWit are implemented on the bitcoin blockchain, transactions are not enforceable at the bitcoin protocol level. So, the current Thunder prototype is best suited for transactions among a trusted network of users. Attempt this amongst your dev team or amongst your trusted internet friends, but don’t use it for real payments. Reminisce: this is alpha testing software.

So why release this now? We believe it is critical to get something in the forearms of users as soon as possible to build up feedback that will enable us to be ready when the network is. So review it, test it out, open an issue on GitHub, or send us an email. If you want to work on tech like this total time, head here and apply to join our team.

Related video:

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., private investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to explosion this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s commence with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a puny dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a slick rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comes back using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a constant increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comebacks.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor hop for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good embark. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, demonstrating how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also displaying promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which emerges as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they display more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., private investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to explosion this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s embark with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a puny dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a sleek rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a constant increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comes back.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor hop for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good begin. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, however still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Three,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, showcasing how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also demonstrating promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which shows up as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they showcase more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should reminisce that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., individual investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to geyser this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s commence with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve most likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a petite dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a slick rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a sustained increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the leap occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comebacks.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen eyed a minor leap for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good begin. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enhanced by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it emerges that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, displaying how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also demonstrating promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily comeback). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily comeback, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comes back, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which shows up as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they display more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Analyzing Ethereum, Bitcoin, and one thousand two hundred other Cryptocurrencies using PostgreSQL

Analyzing Ethereum, Bitcoin, and 1200+ other Cryptocurrencies using PostgreSQL

Cryptocurrencies are fueling a modern day gold rush. Can data help us better understand this evolving market?

Update: Thank you everyone for making this #1 on Hacker News!

Lately it seems like money has been growing on trees.

We live in the age of digital currencies, with cryptocurrencies birthed within the decade. Yet already, there are more than a thousand cryptocurrencies in the market and an initial coin suggesting (ICO) almost daily.

As we embrace this fresh, proliferous market, it’s significant that we attempt to understand what’s going on. There are many risks to observe at both the micro-level (e.g., individual investments) and macro-level (e.g., prevention of market crashes and major loss of capital). That’s where we come in.

We’re data people. Specifically, we’re the developers of TimescaleDB, a fresh open source time-series database built up from PostgreSQL. And we thought it would be insightful (and joy) to analyze the cryptocurrency market using PostgreSQL and TimescaleDB (plus R for data visualization).

For this analysis*, we looked at historical OHLCV price data on over one thousand two hundred cryptocurrencies (as of 6/26/2017; courtesy of CryptoCompare). While our current dataset represents only a daily record of rates, TimescaleDB scales lightly to much finer-grained historical data. With the constant influx of fresh coins and exchanges, TimescaleDB can provide a reliable foundation for time-series data in the cryptocurrency market.

Here’s what you should take away from this post:

  • Several high-level insights into the cryptocurrency market
  • A better understanding of how TimescaleDB + PostgreSQL make time-series data analysis lighter
  • Instructions on how to flow this dataset yourself and draw your own insights (and perhaps find your own arbitrage opportunities!)

So if you had invested $100 in Bitcoin seven years ago, it would be worth…

Let’s embark with some good old-fashioned FOMO. If you know anything about cryptocurrencies, you’ve very likely heard of Bitcoin, the “granddaddy” of all cryptocurrencies. Turns out that if you had invested $100 in Bitcoin in July 2010, it would be worth over $Five,000,000 today.

Bitcoin has had a pretty nice run since then (albeit taking a petite dip recently):

Using PostgreSQL, we’ve queried BTC’s prices at 2-week intervals, analyzing the rates for USD exchanges. (Note that “time_bucket” and “last” in this query are special TimescaleDB time-series data analysis functions not in PostgreSQL.)

But hopefully you didn’t buy in February 2014…

It hasn’t exactly been a sleek rail for BTC. Let’s hone in on the day-by-day volatility of BTC. Here we calculate daily comebacks using the power of PostgreSQL window functions:

As a relatively fresh market, bitcoin prices are notably subject to volatile fluctuations. While a sustained increase in price marks the success of BTC, the highest spike occurred in early 2014. If we zoom in on 2014, we notice that the hop occurred specifically inbetween February and March of 2014. For those who invested at the peak of this market, the price soon stabilized, forcing investors who bought then to hold for a long time to see comes back.

Goodbye China, hello Japan

The cryptocurrency market is global. When looking at trade volumes by currency, we noticed something interesting:

The year two thousand fourteen witnessed a minor leap for Bitcoin rates in China, presumably caused by the devaluation of the yuan and weakening domestic stock market. This was followed by a subsequent boom in two thousand sixteen and early 2017, as Chinese volume predominated Bitcoin trades.

Within a few months, the volumes dropped dramatically.

Why? This is where we had to step out of the numbers and do some old-fashioned research. (And what we found shows how you can’t just rely on quantitative data when attempting to understand this market.)

In early two thousand seventeen the People’s Bank of China began reinforcing regulations and legal liabilities for risky cryptocurrency exchanges. By February, two of the largest Chinese exchanges (OKCoin and Huobi.com) had suspended withdrawals and by mid-2017, Chinese transactions had dried up. From there, Japan became the leader in bitcoin transactions by volume, even going so far as to recognizing bitcoin as legal currency in April 2017.

Now, if you had invested $100 in ETH in January 2017….

Don’t worry if you didn’t hop onto the Bitcoin train in 2010. As volatile as Bitcoin has been, some would argue that Ethereum has been a crazier rail (and the latest “correction” shows it). Let’s look at the Ethereum price over time in Bitcoin (as it’s normally quoted):

But as we know, Bitcoin itself has been fairly volatile, which renders the above chart less useful. So let’s look at ETH prices in fiat currencies, using each day’s BTC to fiat exchange rates. (Taking advantage of Postgres JOINs and some fancy filters):

In its very first year, ETH surpassed any yearly BTC growth rate in all of BTC history — a hefty 530% surge in average closing price from the previous year marked a good embark. Cumulatively, the growth has since fallen to 200% going from two thousand sixteen to 2017, tho’ still an impressively high rate for any other asset. And within the last half year, ETH prices have enlargened by 3000%. So, if you had invested $100 in ETH in January two thousand seventeen (less than seven months ago), it would be worth over $Trio,000 today.

Projecting the price of ETH in these stable currencies (USD, EUR, CNY), it shows up that the trend lines remain consistent inbetween the three fiat monies. A clear progression is apparent in the steep uprise within the last six months and trends reflect a massive growth for the coin when quoted in all currencies, except BTC. Relative to the fiat charts, the ETH/BTC chart is fairly unstable due to the fluctuating price of BTC over the years. As a result, the representation of ETH by BTC price inflates the variability of ETH. Clearly BTC is still too immature to be considered a base currency.

What about the one thousand two hundred other cryptocurrencies??

With that brief examination of BTC and ETH trends, hopefully you have more context into the hectic world of cryptocurrencies. So what do we do with the other one thousand two hundred cryptocurrencies?

Well very first, let’s use our dataset to trace the lineage of these cryptocurrencies:

(Disclaimer: our dataset represents when we very first have recorded data, which may not necessarily correspond to the ICO.)

It’s an evolving market. And one with no clear ceiling, as we can see when we query the number of fresh cryptocurrencies by day. Above are just the most latest twenty records, demonstrating how many fresh currencies amass each week.

Here’s a look at that same day, but counting the number of fresh currencies with data each day:

When we query each of the currencies by their very first set of data (to track its “age”), it’s clear that the market is not simply for investors, but also for creators of these digital assets. Most recently, a flood of fresh coins entered our dataset during May 25–28, amounting to over three hundred fresh cryptocurrency records in less than a week. (Of course, these dates reflect when our data source very first had price data for the currencies, which may not correspond to the ICO.)

Who’s at the head of the cryptocurrency long tail?

There are so many cryptocurrencies that it becomes hard to separate the good ones from the noise. How do we identify which ones worth focusing on? Here’s one metric: total trade volume over the past week.

Quick note on what this query is doing: The BTC and crypto-currency data lives in separate tables. So we have to UNION the two queries. Also, as we established earlier, we want to quote volumes in a fiat currency (e.g., USD) and not BTC. So the 2nd half of the query joins with the BTC table to convert BTC to USD.

Top cryptocurrencies (measuring by transaction volume) are (not remarkably) Bitcoin and Ethereum. But after that, seems like Litecoin (LTC), Ripple (XRP), and Ethereum Classic (ETC) are not far off. As a five-year old coin, Litecoin is almost identical to Bitcoin and is often considered a key player in the market. Meantime, Ripple targets a more specific audience as a banking coin in the global commerce arena, also displaying promise as a progressively superior coin. Interestingly in the top five for our query, both ETH and ETC make appearances, suggesting a major shift towards Ethereum in the market.

What are the most profitable cryptocurrencies?

Another way to sift through the long tail of cryptocurrencies is by profitability (e.g., as measured by total daily come back). Our data contains a set of prices for over one thousand two hundred cryptocurrencies. If we hone in on the highest increase in rate by day, we can see which cryptocurrencies lead the daily market.

Here we identify the cryptocurrency with the highest total daily come back, by day, going rearwards in time. (To do that, we again use a window function to calculate daily comebacks, and then use the TimescaleDB last function to find the cryptocurrency with the highest come back for that day.)

Our output for the last three months shows a numeric lead by AMIS (168x on 6/15), which emerges as the cryptocurrency with the top increase for fifteen distinct days. However, if we look more closely at AMIS’ rates, we realize that this high increase is also due to high fluctuation rates: AMIS tends to drop back to a closing price of zero after each increase.

Likewise, the cryptocurrency YOVI shows up three times in our list of daily leads but has a similarly unreliable trend like AMIS:

While both trends are rather unstable, they demonstrate more promise than ETH’s down-sloping very first year (2015):

(Repeat Disclaimer: TimescaleDB does not endorse any of these cryptocurrencies and is not liable for investments that you make / losses you may incur.)

So money grows on… Merkle Trees?

Here we drew some conclusions from public cryptocurrency datasets, highlighting the power of both PostgreSQL and TimescaleDB. Yet we should recall that the cryptocurrency market will inevitably be different next month, week, even day.

If you’d like to learn more about TimescaleDB, and how it makes PostgreSQL scalable for time-series data, we’d recommend this technical post.

Thanks for reading our post! If you found it helpful, be sure to recommend or share.

If you have any go after up questions or comments, we welcome them via email or Twitter.

And if you’d like to learn more about TimescaleDB, please check out our GitHub (starlets appreciated), and let us know how we can help.

Related video:

AgriDigital pioneers blockchain use with very first farmer-buyer agriculture settlement – The Barrel Blog

AgriDigital pioneers blockchain use with very first farmer-buyer agriculture settlement

History was made on December 8, 2016, when Australian wheat grower David Whillock delivered 23.46 mt to Fletcher International Exports in Dubbo, Fresh South Wales. The transaction was lodged through blockchain, the technology underpinning emerging cryptocurrencies such as bitcoin. And Whillock got his payment instantaneously: a global very first inbetween a grower and a buyer for the agriculture industry.

Blockchain technology is a secured database permitting numerous independent parties to share information and trade using the synchronized and collective ledger.

The deal was “auto-executed” by a brainy contract run by commodity management platform AgriDigital. This brainy contract performed a series of tasks, including valuing the delivery, verifying that the buyer had sufficient funds, and securing the funds in the grower’s name pending delivery.

— Emma Weston, Total Profile CEO

Once the grower made the physical delivery, the title for the grain was transferred to the buyer as the grower’s payment was at the same time created from the reserved funds.

The transaction was done as part of a live pilot, during which AgriDigital was connected to a multi-node private Ethereum blockchain network.

Across the process AgriDigital managed the knots, acting as operator, buyer, and regulator, to create an example of ecosystems that may occur a lot more frequently across commodity markets in the future.

In an interview with S&P Global Platts, Emma Weston, co-founder and CEO of Total Profile, which possesses and operates AgriDigital, talked about this groundbreaking deal and its implications for commodity trading.

Q: What are the main benefits of using blockchain technology for Agri-markets as a entire?

A: Blockchain has the potential to convert the entire agriculture industry.

For a sector that employs 40% of the global workforce, the benefits to be gained from applying distributed ledger technologies are enormous. In particular, blockchain has fat potential in three key areas of the agriculture industry:

1. Provenance and radical transparency

Two. Mobile payments, credits, and decreased transaction fees

Three. Real-time management of supply chain transactions and financing

De-risking the agri-supply chain through real-time settlement of physical commodity transactions has broad benefits for all participants by enlargening efficiency, trust and security.

For growers, blockchain technology provides enormous benefits by providing swift and secure payment.

Typically, payment terms in the Australian grains industry range from two to five weeks, and it is these terms that pose counterparty or credit risk to growers. The elimination of this risk means growers can be secure in their cash flow and better manage their businesses. For buyers, blockchain offers both back office and liquidity benefits.

AgriDigital offers workflow automation (via brainy contracts and integration with key machinery and data collection points such as weighbridges and quality testing instrumentation) as well as auto-reconciliation for inventory, which poses high cost and risk to buyers. Buyers are also reliant on various supply chain finance forms to ease their working capital needs, particularly in high transactions periods like harvest. Blockchain enables more limber supply chain finance options that operate in real-time.

Automation of accessing finance and instant payments are vast improvement on current manual processes and slow turnaround times. An extra benefit of the distributed ledger model is improved access for regulators, quasi-regulators and authorities. Levy and royalty collection and remittance with transparency to the relevant data in respect of those payments is a significant problem that we are now able to solve.

Ultimately, the entire agri-supply chain will have access to verified data on each commodity, meaning consumers can trust where their food comes from.

Q: Can these benefits be repeated in other global commodity markets?

A: While we are presently focused on the grains industry, we have designed our solution to be both cross-commodity and cross-geography. We have instantaneous request from the grain and livestock industries and we are also observing request from aquaculture, horticulture, cotton and wool sectors — the request is global.

We are going to see more and more novel applications of blockchain and blockchain-inspired technologies in the agricultural sector from both incumbents and startups. In 2017, it is likely we will practice the rise of the supply chain use case more generally with enlargened experimentation in this area. We have already seen a lot of concentrate from banks and technology providers in this space and we believe this will increase.

Q: Can you see any obstacles to its deployment across commodity markets?

A: The practical application of blockchain technologies presently relies on integration with existing commodity management software to facilitate the transactions and provide user interface.

Presently, many participants rely on older, legacy software with limited functionality and inter-operability.

Innovative commodity management software solutions are critical to deploying blockchain technologies. We are focused on developing user-friendly interface for ease of adoption, minimizing any need for switch in behavior and mapping our technology solutions to the physical environment — for example with existing infrastructure and commodity life cycles.

More generally, but of critical importance is the influence of regulatory and other market uncertainty. We are committed to continuing our stakeholder engagement in an effort to address these uncertainties and to build pathways for mutual understanding and cooperation around technology standards, governance models and cross-border compliance.

Q: How does your business interact with physical supply chain operators?

A: AgriDigital is designed as a platform for all supply chain participants, and site operators such as bulk treating companies are already able to act on the platform. Freight and inspection services will be incorporated in the future.

Q: Are transactions lodged via blockchain confidential?

A: While the transactions happen in plain glance, each counterparty’s data is encrypted so the content and meaning of it can be downright obfuscated.

Confidentiality of certain transactional data is significant to many of our users and so this is an area we proceed to investigate. There are also blockchain technologies that permit only counterparties to view the information.

Q: Are counterparties required to use bitcoin to trade?

A: For the AgriDigital pilot, however transaction settlement occurred via a distributed ledger, ultimately the grower received payment in local currency (in this case Australian dollar) to its nominated bank account. The settlement on the distributed ledger created a message file to the bank to make the payment using traditional methods on a same-day basis. The initial treatment we have taken, permits for ease of adoption and there is no need for users to hold a cryptocurrency. With the advent of digital currencies that are fiat backed or issued by central banks, we anticipate that smoother settlement and payment methods will be built out in AgriDigital.

Q: What are your plans for expansion?

A: We plan to execute a similar pilot in the Canadian grains industry in two thousand seventeen and expand into other commodities. We have deliberately commenced at the beginning of the supply chain with our farmers. It is crucial that the primary transaction in the supply chain be accurate and validated to ensure informational integrity as the commodity passes through the chain.

Our concentrate in two thousand seventeen is on expanding AgriDigital in the Australian and Canadian grain markets, building our financing platform, and, commercializing the blockchain component of our solution. Beyond this, we will be investing our efforts in provenance, coming in the global markets and other commodities.

Applications for blockchain are becoming clearer as use cases and tailored solutions begin to emerge around the world, with the aim of helping trade become quicker, cheaper and more efficient.

The highest profile case is Swiss trader Mercuria, which is working on the settlement of a large oil transaction with ING and Societe Generale, Reuters quoted Mercuria CEO Marco Dunand in Davos last month.

Cotton trading platform The Seam announced in January that it was working with IBM to “lead an industry-wide collaboration initiative” to create a supply chain and trading ecosystem based on blockchain. This budge comes hot on the high-heeled shoes of a blockchain-settled trade inbetween Wells Fargo and Commonwealth Bank of Australia for a shipment of cotton from the US to China in the final quarter of 2016.

Another Australian startup, Blockfreight, is aiming to bring similar efficiencies to global container freight markets.

Improved cargo traceability through blockchain could help avert fraud such as the Qingdao port scandal, where in two thousand fourteen real or imagined physical volumes of copper, alumina, steel and other metals where used as collateral for numerous loans.

Trading practices can be slow to switch in some of the more conservative commodity markets, but given the range of applications that blockchain offers, it is hard to believe that it won’t play a role of some sort in the near future.

Related video:

A Brief History of Bitcoin, Virtual Currency Before Bitcoin, InformIT

A Brief History of Bitcoin

This chapter is from the book

This chapter is from the book 

Albeit Bitcoin is the best-known virtual currency, it wasn’t the very first. In fact, Bitcoin is just the latest of a multitude of schemes designed to supplement or substitute traditional money.

One of the very first virtual currencies was E-gold, founded in 1996. E-gold was unique in that its virtual currency was backed by real, honest-to-goodness gold bullion. In essence, trading E-gold was basically the same as interchanging gold ownership, but anonymously.

At its peak, in 2008, E-gold claimed more than five million user accounts. However, the anonymous nature of the currency made the service very attractive to crime syndicates looking to launder their dirty dollars into cleaner cash. Powerless security systems also contributed to an influx of hacking and fraud from these same crime syndicates.

All of this led the U.S. government to get involved, and in two thousand eight the company’s management pleaded guilty to money laundering and operating an unlicensed money transfer business. The Feds froze all user accounts, amounting to more than $86 million in E-gold. The company itself closed its doors the following year.

By the way, E-gold was just one of several similar virtual gold payment systems back in the day. Competitors included GoldMoney and e-Bullion, which appeared identically shady. (E-Bullion’s possessor was eventually arrested on charges of running an illegal money transfer business and of paying three hit dudes to stab his wifey to death. Good folks there.)

Beenz and Flooz

In 1998, an interesting fresh website called Beenz.com was launched. The idea behind Beenz.com is that you could earn virtual currency (called Beenz) for performing a multitude of online activities, such as visiting certain websites or shopping online. The Beenz you earned could then be spent on various online goods and services.

The site attempted to position itself as “the web’s currency” that would challenge the world’s traditional currencies. That it didn’t succeed is now evident. In fact, Beenz had a very brief life, closing its virtual doors in 2001. It never got past the challenge of persuading governments around the world that it truly wasn’t establishing a fresh currency, or of persuading users that it wasn’t all a big scam.

Similar to Beenz was Flooz, which was promoted by none other than comedian Whoopi Goldberg. Flooz was as big a joke as Beenz was, and operated in much the same style, attempting to establish a unique online currency for use with Internet merchants. Flooz launched in one thousand nine hundred ninety nine and closed in 2001, never having attracted much of a user base.

Q Coins

The Chinese Internet service provider Tencent has a very successful instant messaging service called QQ. Back in 2002, QQ developed its own internal virtual currency, called Q Coins, that customers could use to purchase various virtual goods and services, such as extra storage space, virtual pets, and online game avatars.

Over the next few years, various non-QQ online merchants began accepting Q Coins for real-world goods and services. More than one hundred million Chinese ended up using Q Coins, generating a trading volume in Q Coins of several billion yuan a year. Eventually, Q Coins ended up being so popular that they were being traded on China’s black market for whatever it is that the Chinese trade on the black market. This so worried the Chinese government that it eventually cracked down on the real-world trading of Q Coins—albeit they’re still used today within the QQ service.

(China’s practice with Q Coins no doubt led to their latest crackdown in Bitcoin trading. They’ve been through all this before.)

Linden Dollars

The concept of virtual currency makes a lot of sense within online virtual worlds. Case in point, the virtual world of 2nd Life and its very popular virtual currency, Linden Dollars.

For those unacquainted with virtual worlds, these are online communities that take the form of interactive simulated environments—kind of like a massive multiplayer movie game. Users inhabit the world’s graphical three-dimensional environment and interact with one another via cartoon-like avatars, often participating in virtual activities and—this is significant—economies.

The economy part comes in when users want to buy things within the virtual world, such as virtual clothing for their avatars, virtual housing, virtual entertainment, you name it. For this reason, most virtual worlds have their own unique virtual currencies that can be spent only within the restricts of the online world.

Thus it was with 2nd Life, which was one of the—if not the—most popular virtual worlds. 2nd Life was developed by a company called Linden Lab back in 2003, and its proprietary virtual currency was dubbed Linden Dollar. Users could purchase Linden Dollars (abbreviated L$) using U.S. dollars and other real-world currency on 2nd Life’s LindeX exchange, or from other users or independent brokers.

Buying Linden Dollars in 2nd Life.

2nd Life and its Linden Dollar currency became so popular that tons of real-world companies, including American Apparel, Reebok, and Ford, established presences within 2nd Life. These companies accepted payment for both virtual and real-world goods and services in Linden Dollars.

The growth in 2nd Life and its virtual currency eventually led serious investors to speculate in Linden Dollars. In fact, virtual investment banks arose to facilitate 2nd Life currency trading.

All good things come to an end, however. In 2007, 2nd Life virtual investment bank Ginko Financial collapsed, leaving users incapable to retrieve approximately $750,000 worth of Linden Dollars that had been invested. This led to Linden Labs officially banning all virtual banks in 2nd Life, as well as removing all objects related to in-world virtual banking.

Over the next several years, interest in 2nd Life began to wane. 2nd Life is still around, but it’s a shadow of its former self. You can still trade Linden Dollars for U.S. dollars (and other currency), but you’d be hard-pressed to find many buyers.

Facebook Credits

In-world virtual currencies are not the foot province of online games and virtual worlds. Many bit-time social media sites have at least experimented with the concept of their own proprietary virtual currencies.

Take Facebook, for example. In two thousand nine Facebook began testing the concept of Facebook Credits, which could be used to pay for in-game goods and services on the Facebook site. Facebook Credits went live in January 2011, and users could purchase ten Facebook Credits for one U.S. dollar.

Purchasing Facebook Credits in 2011.

Much to Facebook’s chagrin, Facebook Credits never truly took off. Facebook killed the project in June of 2012, converting all remaining Facebook Credits into standard dollar (or other currency) credits to users’ accounts.

And More.

As you can see, a plethora of various virtual currency schemes have been floated (and mainly drowned) over the past fifteen years or so. In addition to the currencies already mentioned, you run across others such as Dexit, DigiCash, eCache, eCash, InternetCash, Pecunix, and WebMoney. (Google them if you’re interested.) What all these virtual currencies have in common is that they are failures. For one reason or another, none of these virtual currencies managed to make it into the mainstream; at best, some existed within their own virtual worlds, but that’s the extent of it.

That doesn’t mean that all virtual currencies are destined to fail, however. Which brings us to the next stage in our history lesson: the birth of Bitcoin.

The concept of in-world or in-game virtual currencies is an interesting one—especially when you layer in the capability to trade online goods for real-world currency. Here’s what happens.

Game players want to buy virtual things in their virtual worlds, but don’t want to (or can’t) build up the currency via normal in-world means. So they pay other players real-world cash for the in-game currency that the other players have built up by playing the game. In other words, if you want to level up, you can pay for some other player’s tokens that get you to that level.

The problem comes when individuals or groups of individuals commence doing this for a profit—that is, selling their in-game credits for real money. This is called gold farming, and it’s a real thing. (And a big enough deal that many games ban the practice.)

It’s also a source of something resembling gimp labor. Evidently, work camp inmates in China have been compelled to play online games to accumulate online goods and credits that are then sold for real-world currency. It’s kind of a virtual sweatshop, when you think about it.

A Brief History of Bitcoin, Virtual Currency Before Bitcoin, InformIT

A Brief History of Bitcoin

This chapter is from the book

This chapter is from the book 

Albeit Bitcoin is the best-known virtual currency, it wasn’t the very first. In fact, Bitcoin is just the latest of a multitude of schemes designed to supplement or substitute traditional money.

One of the very first virtual currencies was E-gold, founded in 1996. E-gold was unique in that its virtual currency was backed by real, honest-to-goodness gold bullion. In essence, trading E-gold was basically the same as interchanging gold ownership, but anonymously.

At its peak, in 2008, E-gold claimed more than five million user accounts. However, the anonymous nature of the currency made the service very attractive to crime syndicates looking to launder their dirty dollars into cleaner cash. Powerless security systems also contributed to an influx of hacking and fraud from these same crime syndicates.

All of this led the U.S. government to get involved, and in two thousand eight the company’s management pleaded guilty to money laundering and operating an unlicensed money transfer business. The Feds froze all user accounts, amounting to more than $86 million in E-gold. The company itself closed its doors the following year.

By the way, E-gold was just one of several similar virtual gold payment systems back in the day. Competitors included GoldMoney and e-Bullion, which appeared identically shady. (E-Bullion’s holder was eventually arrested on charges of running an illegal money transfer business and of paying three hit boys to stab his wifey to death. Good folks there.)

Beenz and Flooz

In 1998, an interesting fresh website called Beenz.com was launched. The idea behind Beenz.com is that you could earn virtual currency (called Beenz) for performing a multitude of online activities, such as visiting certain websites or shopping online. The Beenz you earned could then be spent on various online goods and services.

The site attempted to position itself as “the web’s currency” that would challenge the world’s traditional currencies. That it didn’t succeed is now demonstrable. In fact, Beenz had a very brief life, closing its virtual doors in 2001. It never got past the challenge of coaxing governments around the world that it indeed wasn’t establishing a fresh currency, or of persuading users that it wasn’t all a big scam.

Similar to Beenz was Flooz, which was promoted by none other than comedian Whoopi Goldberg. Flooz was as big a joke as Beenz was, and operated in much the same style, attempting to establish a unique online currency for use with Internet merchants. Flooz launched in one thousand nine hundred ninety nine and closed in 2001, never having attracted much of a user base.

Q Coins

The Chinese Internet service provider Tencent has a very successful instant messaging service called QQ. Back in 2002, QQ developed its own internal virtual currency, called Q Coins, that customers could use to purchase various virtual goods and services, such as extra storage space, virtual pets, and online game avatars.

Over the next few years, various non-QQ online merchants began accepting Q Coins for real-world goods and services. More than one hundred million Chinese ended up using Q Coins, generating a trading volume in Q Coins of several billion yuan a year. Eventually, Q Coins ended up being so popular that they were being traded on China’s black market for whatever it is that the Chinese trade on the black market. This so worried the Chinese government that it eventually cracked down on the real-world trading of Q Coins—albeit they’re still used today within the QQ service.

(China’s practice with Q Coins no doubt led to their latest crackdown in Bitcoin trading. They’ve been through all this before.)

Linden Dollars

The concept of virtual currency makes a lot of sense within online virtual worlds. Case in point, the virtual world of 2nd Life and its very popular virtual currency, Linden Dollars.

For those unacquainted with virtual worlds, these are online communities that take the form of interactive simulated environments—kind of like a massive multiplayer movie game. Users inhabit the world’s graphical three-dimensional environment and interact with one another via cartoon-like avatars, often participating in virtual activities and—this is significant—economies.

The economy part comes in when users want to buy things within the virtual world, such as virtual clothing for their avatars, virtual housing, virtual entertainment, you name it. For this reason, most virtual worlds have their own unique virtual currencies that can be spent only within the restricts of the online world.

Thus it was with 2nd Life, which was one of the—if not the—most popular virtual worlds. 2nd Life was developed by a company called Linden Lab back in 2003, and its proprietary virtual currency was dubbed Linden Dollar. Users could purchase Linden Dollars (abbreviated L$) using U.S. dollars and other real-world currency on 2nd Life’s LindeX exchange, or from other users or independent brokers.

Buying Linden Dollars in 2nd Life.

2nd Life and its Linden Dollar currency became so popular that tons of real-world companies, including American Apparel, Reebok, and Ford, established presences within 2nd Life. These companies accepted payment for both virtual and real-world goods and services in Linden Dollars.

The growth in 2nd Life and its virtual currency eventually led serious investors to speculate in Linden Dollars. In fact, virtual investment banks arose to facilitate 2nd Life currency trading.

All good things come to an end, however. In 2007, 2nd Life virtual investment bank Ginko Financial collapsed, leaving users incapable to retrieve approximately $750,000 worth of Linden Dollars that had been invested. This led to Linden Labs officially banning all virtual banks in 2nd Life, as well as removing all objects related to in-world virtual banking.

Over the next several years, interest in 2nd Life began to wane. 2nd Life is still around, but it’s a shadow of its former self. You can still trade Linden Dollars for U.S. dollars (and other currency), but you’d be hard-pressed to find many buyers.

Facebook Credits

In-world virtual currencies are not the foot province of online games and virtual worlds. Many bit-time social media sites have at least experimented with the concept of their own proprietary virtual currencies.

Take Facebook, for example. In two thousand nine Facebook began testing the concept of Facebook Credits, which could be used to pay for in-game goods and services on the Facebook site. Facebook Credits went live in January 2011, and users could purchase ten Facebook Credits for one U.S. dollar.

Purchasing Facebook Credits in 2011.

Much to Facebook’s chagrin, Facebook Credits never truly took off. Facebook killed the project in June of 2012, converting all remaining Facebook Credits into standard dollar (or other currency) credits to users’ accounts.

And More.

As you can see, a plethora of various virtual currency schemes have been floated (and mainly submerged) over the past fifteen years or so. In addition to the currencies already mentioned, you run across others such as Dexit, DigiCash, eCache, eCash, InternetCash, Pecunix, and WebMoney. (Google them if you’re interested.) What all these virtual currencies have in common is that they are failures. For one reason or another, none of these virtual currencies managed to make it into the mainstream; at best, some existed within their own virtual worlds, but that’s the extent of it.

That doesn’t mean that all virtual currencies are destined to fail, however. Which brings us to the next stage in our history lesson: the birth of Bitcoin.

The concept of in-world or in-game virtual currencies is an interesting one—especially when you layer in the capability to trade online goods for real-world currency. Here’s what happens.

Game players want to buy virtual things in their virtual worlds, but don’t want to (or can’t) build up the currency via normal in-world means. So they pay other players real-world cash for the in-game currency that the other players have built up by playing the game. In other words, if you want to level up, you can pay for some other player’s tokens that get you to that level.

The problem comes when individuals or groups of individuals begin doing this for a profit—that is, selling their in-game credits for real money. This is called gold farming, and it’s a real thing. (And a big enough deal that many games ban the practice.)

It’s also a source of something resembling sub labor. Evidently, work camp inmates in China have been coerced to play online games to accumulate online goods and credits that are then sold for real-world currency. It’s kind of a virtual sweatshop, when you think about it.

Related video:

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our purpose is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol commenced running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, tho’ it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, tho’ its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also commencing to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good mitts.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A contraption for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services commenced pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also witnessed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a powerfully regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must conform with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a gargle to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly ruinous to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people embarked realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our objective is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol began running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual directive prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street commenced in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more demonstrable and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services began ripping off bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also spotted the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress embarked accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more earnestly but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen witnessed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China coerced Chinese banks to close the bank accounts of major Chinese exchanges, tho’ many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly disruptive to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a constant ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a gargle to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, tho’ it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual instruction prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Trio and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it flawless for online black markets. That year spotted the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an gig of the “The Good Wife” that focused on bitcoin.

Other consumer services were also kicking off to emerge. WikiLeaks embarked accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good arms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street began in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A implement for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security proclaimed Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen spotted hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pile of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents display it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deep-throat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS proclaimed Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The desire of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable ordinary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The fattest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people began realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on tempo to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a suck to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People commenced talking earnestly about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

A History of Bitcoin – Smith Crown

A History of Bitcoin

This article is a brief history of Bitcoin. Our aim is to give the reader a reliable abbreviated overview of Bitcoin. We will reference places where the interested reader can learn more about specific topics or dive deeper.

The history will be structured around Bitcoin’s trade price (as a reflection of market sentiment) and page views of wikipedia (as a reflection of broader awareness).

2008/2009: Bitcoin’s birth

In November 2008, someone going by the user name ‘Satoshi Nakamoto’ released a paper to a cryptography mailing list. The 9-page paper was entitled “Bitcoin: A Peer-to-Peer Electronic Cash System“, and it laid out a vision for a distributed digital money system.

In January 2009, Satoshi Nakamoto released the very first version of the open-source bitcoin core software on SourceForge and the bitcoin protocol embarked running. Nakamoto mined the very first fifty bitcoins. The protocol was a breakthrough in cryptography, however it drew on developments that had preceded it but hadn’t been combined yet.

Bitcoin ran calmly in the background—a topic of excitement and fascination for a dedicated crowd of coders but largely off the world’s radar. Discussion was distributed across different forums, and it wasn’t until the end of the year that the very first dedicated forum was established. This helped coders could more lightly coordinate with other coders as the underlying code got tweaked. By mid-2009, people other than Satoshi Nakamoto were actively contributing to the open-source codebase in Github.

The protocol was a breakthrough in cryptography, however it drew on many cryptography innovations that preceded it. A community of cryptography experts and privacy advocates known as the Cypherpunks (cypher not cyber) played a key role in recognizing the technical genius of Bitcoin and understanding its implications. Many members of this community would become torchbearers later in Bitcoin’s history.

As two thousand nine ended, Bitcoin did not have a ‘trade price’ and three hundred nine people viewed the Wikipedia page.

2010: Bitcoin’s very early years

The Bitcoin ‘ecosystem’ was largely just a record of Bitcoin transactions (the blockchain), a set of online forums where users communicated and organized transactions, and the open-source software code. There were no wallet services, payment processors, or real user interface beyond actual guideline prompts and raw code. This limited involvement to a dedicated and savvy crowd who organized transactions through online forums and initiated them on the blockchain with code. For example, the very first commercial transaction took place in May 2010: a programmer in Florida spent Ten,000 BTC on a pizza.

However, beginnings of a market support system began to emerge. In early 2010, the very first exchange opened, which permitted structured trading of bitcoins. The very first “article” on bitcoin appeared on Slashdot and stoked interest beyond the initial insider cryptocurrency crowd. Users grew. In late 2010, Mt. Gox launched as the 2nd exchange and became the superior place to trade Bitcoins for a duo years.

As two thousand ten ended, the price of one Bitcoin was $.Three and three hundred nine people viewed the Wikipedia page.

2011: Bitcoin finds niche uses and awareness grows

In 2011, Bitcoin began to mature as a digital payment system, however its use was limited by the aspirations of early adopters.

The perceived anonymous nature of the digital currency made it ideal for online black markets. That year eyed the emergence of the Silk Road, an ebay for illicit goods (predominantly drugs) that used Bitcoin as a payment method. The Silk Road was one of the public’s primary introductions to Bitcoin, prompting several politicians cast the currency as a vehicle for money laundering and drugs.

Mainstream media also began covering it. Forbes, Bloomberg, and TIME all wrote articles. Politicians warned against it. Academics wrote about it. At the end of the year, CBS aired an scene of the “The Good Wife” that focused on bitcoin.

Other consumer services were also beginning to emerge. WikiLeaks began accepting Bitcoin donations. An iPad app was launched. Bitpay, a service that let merchants accept bitcoins over the phone, was founded and claimed to have one hundred merchants. More exchanges opened, letting people trade bitcoins for other currencies.

The Bitcoin code also underwent a major switch. Through 2011, Satoshi Nakamoto had overseen the maintenance of the codebase. Satoshi never called or met anyone and only communicated on forums and direct messages. In April 2011, Satoshi Nakamoto wrote his last verified email, leaving Gavin Andreson in charge of the project, and left, never to be (verifiably) seen or heard from again. Andreson quickly selected four others to share this responsibility and introduced some structured ways of updating the underlying code.

“He told myself and Gavin that he had moved on to other things and that the project was in good forearms.”

Also in 2011, the very first alternative digital currency or “altcoin”, Litecoin, launched.

The world was in an awkward time in which financial markets were doing well but workers were not. Occupy Wall Street embarked in September and soon Occupy protests had taken place in almost one thousand cities worldwide. It is effortless to see how the idea of a bankless currency could take root.

By the end of the year, the world was deeply ambivalent about the digital currency. A currency for the 21st Century that could topple banks? A device for laundering money and buying illicit substances?

As two thousand eleven ended, the price of one Bitcoin was $Four.60 and two thousand one hundred eighty five people viewed the Wikipedia page.

2012: Bitcoin matures

Bitcoin was railing a wave of legitimacy in many circles, and these were having conflicting effects.

The currency became a popular target for hackers and thieves. Mt. Gox had been hacked in 2011, and now more major attacks on exchanges and other databases led to millions of dollars worth of Bitcoin theft. Several Ponzi schemes ended with theft.

Black markets utilizing bitcoin as a payment method continued to operate. It’s estimated that $15 million worth of Bitcoin passed through the Silk Road this year. A popular online gambling site, Satoshi Dice, launched and flooded the bitcoin network with very puny gambling transactions (bets worth less than $.0001). This sparked a debate on how to deal with such ‘transaction dust.’

More generally, the community was feeling the impacts of having no central authority. There were no dedicated funds to support core development of the code and no sanctioned gathering places places other than online forums.

The Bitcoin Foundation was also established. Its role was to fund core development, represent the currency to governments, and conduct outreach and education. Late that year, a Bitcoin exchange Bitcoin-central.net was licensed similar to a bank in Europe.

As it garnered the attention of more governments, its legal ambiguity became more visible and more awkward. People were trading it like an asset, using it like a currency, and downloading it like open-source software. Gambling and the Silk Road didn’t help. Some services embarked pulling down bitcoin out of fear of its legality.

Broadly, this is a year in which the industry also eyed the promise of banking the unbanked with Bitcoin. Forbes runs one of the very first mainstream articles discussing Bitcoin’s use in remittance payments. WordPress commenced accepting Bitcoin, explaining that traditional payment processor limitations were preventing international bloggers from participating in the blogosphere.

As two thousand twelve ended, the price of one Bitcoin was $13.44 and two thousand eight hundred nine people viewed the Wikipedia page.

2013: The world wakes up to bitcoin

2013 was one of the most tumultuous years for Bitcoin. It had two period of incredible volatility in which people literally woke up to almost 100% price increases.

The very first occurred in early 2013. A bail-out deal inbetween the EU and Cyprus included a levy on bank accounts with sizeable sums of money, inspiring Cypriot account holders to buy bitcoin en masse. The Bitcoin price almost doubles, and Cypress sets a precedent for using Bitcoin as a means of capital flight.

Bitcoin survived one of its very first major crises of legitimacy this year: the shutting down of the Silk Road and the arrest of its founder. The government seized all assets and helped cement public association of Bitcoin with online black markets. After a quick price drop, the price quickly recovered, but Bitcoin has lived in the Silk Road’s shadow ever since.

Globally, governments began to take Bitcoin more gravely but reactions were mixed.

  • The People’s Bank of China, after originally approving Bitcoin, banned financial institutions from using it or working with customers whose businesses involve it.
  • The US Department of Homeland Security announced Mt. Gox a ‘money transmitter’ (a strongly regulated entity) and moved to seize some of its assets.
  • US Financial Crimes Enforcement Network (FINCEN) issued some of the world’s very first bitcoin regulation in the form of a guidance report for persons administering, exchanging or using virtual currency. In particular, exchanges must obey with money laundering laws and register as Money Services Businesses.
  • The US Senate held a hearing which was (to the surprise of many) open to the long-term prospects of Bitcoin.

The 2nd period of volatility occurred in November. In thirty days, the price went from just over $100 to just over $1200. Searches for bitcoin spikes. News outlets covered it. In thirty days, it went from a successfully digital currency proof-of-concept to a fresh technology in the eyes of the world. The price plummeted back down in December, but it never stayed below $200 again.

The erect of popularity led to an explosion of “altcoins”—digital currencies based on modified or different underlying protocols. Litecoin had been the very first, back in 2011, but two thousand thirteen eyed hundreds of these fresh altcoins launch. Many turned out to be scams, but many are also still traded today.

As two thousand thirteen ended, the price of one Bitcoin was $764 and twenty six thousand three hundred fifty four people viewed the Wikipedia page.

2014: Bitcoin beyond cryptocurrencies and cryptocurrencies beyond Bitcoin

In early 2014, Bitcoin survived another major crisis of legitimacy: the closure of Mt. Gox. Mt. Gox had been the longest-running and most successful virtual currency exchange to date. It was a pole of both the bitcoin economy and the community. In February, Mt. Gox abruptly shut trading, and leaked documents demonstrate it had lost 744,000 BTC (approximately $40 million). Bitcoin naysayers had a field day on forums, and it was widely seen as a deepthroat to the digital currency’s capability to operate securely without any oversight or regulation.

Governments began to pass regulation this year. The wild end to two thousand thirteen woke many regulators up to the volatility of this currency. The IRS announced Bitcoin to be taxed as property. The People’s Bank of China compelled Chinese banks to close the bank accounts of major Chinese exchanges, however many exchanges exploited legal loopholes to keep operating. Fresh York announced its Bitlicense: a legal licensing framework for businesses that interact with Bitcoin and cryptocurrencies. This is largely decried by the cryptocurrency community. The wish of unregulated cash was quickly fading.

The currency also traveled more into the payment mainstream, and a wave of major retailers accepted the currency. Overstock, Tiger Direct, Newegg, Dell, and Microsoft all announced acceptance of Bitcoin. Near the end of the year, a subsidiary of PayPal announced it will work on integrating Bitcoin on their platform.

Another development in the world of cryptocurrencies is that many many people began imagining Bitcoin without the digital currency part: how could the underlying technology be used for other purposes?

A wave of fresh protocols emerged with applications beyond digital currency, presaging a so-called “Bitcoin Two.0” era in which people would repurpose blockchains (Bitcoin’s and others) to store all kinds of information. Some notable ones included

  • Ethereum, a platform for software that could run on a distributed network.
  • Maidsafecoin, a protocol to permit distributed file storage built on top of the Bitcoin blockchain
  • Factom launches to create a data layer on top of the blockchain to enable elementary, verifiable, and secure record keeping.

This reflected the rising awareness of what early enthusiasts had thought: the technology of cryptocurrencies could be the foundation of the next Internet. Today is like the early 90s, and in the coming years, blockchains could remake everything. The idea was planted, but with it, a sobering realization: this process would take time.

Despite these developments, Bitcoin’s price began a slow decline this year that would bottom out in early two thousand fifteen below $200 and stay relatively dormant for months. Part of this decline was a shift in capital from bitcoin to other digital currencies. Bitcoin’s contribution to the total market value of all cryptocurrencies fell from a higher of 95% in August to 78% in December. Another was the realization that upending global financial markets wouldn’t happen overnight. Bitcoin was not above the law, and financial law was very complicated. Bitcoin had the potential to be disruptive but disruption can be slower than founding visionaries hoped. In many ways, cryptocurrencies faded from the public eye.

AS two thousand fourteen ended, the price of one Bitcoin was $314 and six thousand one hundred sixty two people viewed the Wikipedia page.

2015: The business blockchain

The basic features of this industry mostly continued. Hacks and theft continued, including a high-profile loss of close to $Five million from a major exchange at the beginning of the year.

Regulators around the world continued to explore the implications of this technology while also proving that users of Bitcoin are not beyond the reach of the law. Ross Ulbricht, founder of The Silk Road, is sentenced to life in prison without parole for deeds that were “terribly devastating to our social fabric.” Mark Karpeles, CEO of Mt. Gox, is arrested in Japan. Two federal agents who stole Bitcoin during the Silk Road investigation plead guilty.

The thickest shift came from banks and industry. Many industry executives began talking about “blockchains” and “distributed ledgers” rather than Bitcoin. Microsoft launched blockchain-as-a-service (BaaS) on its Azure cloud-computing platform. This permits companies to experiment with blockchains and explore how they could be used in different areas of their business.

This likely contributed to the growth in interest in Bitcoin among the broader public and among traders. Bitcoin’s price began a sustained ascent as people commenced realizing Bitcoin and blockchains were still around.

However, a crisis was brewing in the form of the “block size debate.” The Bitcoin protocol was designed to process approximately seven transactions per 2nd; the blocks in the blockchain were not large enough to store more. Members of the community realized Bitcoin was on rhythm to reach that in 2015. If nothing was done, it could stymie the currency’s growth in popularity.

What followed was a bitter and divisive debate about whether to increase the size of the Bitcoin blocks (permitting more transactions per 2nd) or to reposition the Bitcoin blockchain as a ‘settlement layer’ while permitting other services to process transactions that happen off-chain. In Bitcoin, there are no democratic rules, public sanctioned spaces to gather, or Robert’s rules of order. Reddit, Bitcointalk, and a duo other online forums were serving as venues for ‘public’ discussion, and the Bitcoin Foundation began hosting events toward the end of the year.

No one could agree, and the debate was fierce. This deadlock struck a deepthroat to Bitcoin’s perceived legitimacy. If it couldn’t deal with a challenge like this, how could it deal with others? People began talking gravely about other currencies that might be viable alternatives to Bitcoin. Ethereum topped that list, and in early 2016, its price would increase tenfold.

As two thousand fifteen ended, the price of one Bitcoin was $426 and four thousand seven hundred thirty people viewed the Wikipedia page.

2016: A Year of Promise

It is too early to tell the story of two thousand sixteen for Bitcoin. Many of the trends that coalesced in two thousand fifteen continued: more enterprise and corporate interest in blockchain technology, more uncertainty over the block size debate, and some price volatility.

Security remains an issue. Just this year, Gatecoin, a major exchange based in Hong Kong, lost $Two million and suspended trading. Shapeshift, a major US-based exchange, suffered a series of hacks in a saga that reads like a crime novel.

Broadly, industry players in finance and technology remain bullish on blockchains and ambivalent about Bitcoin. More and more startups are branding themselves as blockchain companies rather than bitcoin companies. A fresh ambivalence about Bitcoin has emerged: not as a dangerous quasi-legal currency but as a good proof-of-concept that ultimately won’t be ready for primetime. As they say, “the pioneers get the arrows, the settlers get the land.” At a premier industry conference, some compared Bitcoin to Netscape.

Related video:

A Blockchain Currency That Hammers Bitcoin On Privacy – IEEE Spectrum

A Blockchain Currency That Strikes Bitcoin On Privacy

In October, I was in a van in Denver with Zooko Wilcox, the CEO of Zcash, a company that was soon to launch a fresh blockchain-based digital currency of the same name. On the floor next to me was a bunch of recently purchased computer equipment. I knew we were going to a hotel but didn’t know which one. I only knew that I’d be there for the next two days straight and that it would be my job to see, ask questions, stave off sleep, and document as much as I possibly could.

That day began a cryptographic ceremony of sorts, one that could make or break a fresh digital currency. Zcash is identical to Bitcoin in many ways. It’s founded on a digital ledger of transactions called a blockchain that exists on an army of computers that can be anywhere in the world. But it differs from Bitcoin in one critical way: It is fully anonymous. Albeit privacy was a motivating factor for ­Bitcoin’s flock of early adopters, it didn’t produce the goods. For those who want to digitally replicate the practice of slipping on a ski mask and handing over an envelope of unmarked bills, Zcash is now the way to go.

The problem with Bitcoin today is that the entire history is public. If users are not enormously careful, network analysis can expose the real identities of the people behind the accounts

To supply on this anonymity, however, the Zcash protocol requires an initial dose of randomness, a set of parameters that functions as a reference point for the rest of the software. But the process comes with an unfortunate by-product. The software that generates the parameters also creates lumps of a cryptographic key, which if combined could be used to generate fresh coins out of skinny air. The ceremony I was being carted off to was serving as a public demonstration that the cryptographic fragments were being created and disposed of in such a way that the accomplish key would never come into existence.

But why make a currency that faces its very first existential threat at the very moment of its creation? Because for the subset of people who like their currency digital and free from government control, anonymity truly matters.

“Zcash is truly titillating because it’s the very first combination of the blockchain properties with the encryption properties,” says Wilcox. This layer of encryption means that with Zcash, transactions will leave no trace on the blockchain of who spent a coin or in what digital pocket it landed. All that will be visible is that a transaction occurred.

Bitcoin, the very first and most widely used digital currency, established the blockchain as a revolutionary technology. Blockchains provide a way for disparate, mistrustful parties to jointly maintain a public ledger of transactions and to do so in a way that renders all entries permanent.

The problem with Bitcoin as it is implemented today is that the entire history is public. Transactions are attributed to random identifiers that in themselves carry no information about the person controlling the accounts. But if users are not utterly careful, network analysis can expose both the financial behavior and the real identities of the people behind the accounts. (Several companies, such as Chainalysis, now provide such a service.)

Zcash also has a blockchain that records and publicly broadcasts every transaction ever made with it. But it hides all identifying information about who made the transactions and how much was spent.

“Zcash solves this privacy problem by encrypting each transaction. We use standard, modern, high-tech ­encryption, which is the same kind of encryption that is used to protect websites and emails and everything on the Internet,” says Wilcox.

This, however, creates a fresh problem. In Bitcoin, having all the details of transactions available without encryption enables miners—the people running the software that updates and secures the blockchain—to validate fresh spending requests by referencing previous transactions in the record. When those data are hidden from view, validation becomes more complicated and requires a special kind of computation called a zero-knowledge proof. That computation enables users to prove that they own the coins they want to spend without exposing any information about where the coins came from or where they are going. Such proofs are used in many other contexts around the Internet. For example, zero-knowledge proofs permit you to type in a password on a website and have it verified by the site’s server without actually transmitting the password.

The broad strokes for Zcash were designed in two thousand thirteen at a Johns Hopkins University applied cryptography lab led by Matthew Green. The currency system was later enhanced by Eli Ben-Sasson, a computer scientist at the ­Technion, and a group of researchers at MIT and Tel Aviv University. They developed a fresh zero-knowledge proof, called a zk-SNARK, that is much less computationally intensive and thus crucial for scaling the currency.

Now Zcash is in the palms of Wilcox. Privacy is an issue that is near to his heart. As a teenager, he delayed going to college to work with cryptographer David Chaum on DigiCash, an early implementation of a privacy-centric digital cash. When that project crashed in the 1990s, ­Wilcox continued the crusade.

Enhancing financial privacy will likely enhance the capability of criminals to go about their business undetected, and that’s a legitimate fear. Bitcoin itself found its first—and arguably thus far only—killer app when sellers and buyers realized that they could use it for illegal purchases in “dark Web” markets.

But Wilcox, who regards privacy as a right, argues that there are significant, legitimate reasons why someone would want to use an anonymous currency.

“There are regulatory and commercial and moral reasons for privacy from all sectors,” he says. To give a commercial example: Apple wouldn’t want Samsung to be able to track its transactions and build up valuable competitive intelligence.

Or the motivating factor could be regulatory compliance. Numerous laws in the United States and the United Kingdom, such as the data-­privacy rules of the Health Insurance Portability and Accountability Act of 1996, require companies to keep consumer information hidden from view, a feature Zcash can reliably suggest.

There are also stringently technical considerations that make strong privacy a necessary feature in a digital currency. Ideally, for the system to function, coins should be fungible, which is to say that each coin should be indistinguishable from the next. When a coin carries the history, and potentially the wipe, of every past transaction—as bitcoins do—this can be difficult to achieve.

“The laws of economics are almost as immutable as the laws of physics. And good money means that every unit of that money is the same as any other unit of that money. The only way to have that be the case for digital currencies is to have it be private,” says Roger Ver, a Zcash investor who considers fungibility a central concern.

But perhaps the most intriguing feature of Zcash is that users can toggle the level of privacy it provides. Albeit the Zcash protocol encrypts all information about transactions by default, people can selectively disclose this data, and they have control over what parts get exposed as well as who gets to see them.

Let’s say I’m in college and my parents are funding my studies. They could send me Zcash, and then I could lift the veil on all the transactions I make with that money in a way that only they could see.

Adam Back, a cryptographer who has himself endeavored to strengthen Bitcoin’s privacy assures with a scheme called Confidential Transactions, says that Zcash is able to suggest this degree of plasticity because, unlike Bitcoin, it starts with the strongest privacy-guarantee contraptions available.

“It’s very hard to build something stronger on something that’s feeble,” he says. “If you begin with a ideal electronic cash system building block, then you can build an electronic cash system with selective weakening in a way that makes sense for society.”

But cryptographers like Back do have reservations. There is, of course, the problem of requiring that one moment of infallibility on the part of human beings—the destruction of the key fragments—to assure its security.

Also, the zk-SNARK computations that validate transactions are fairly exotic, at least compared with the well-worn standards used in Bitcoin. “The number of people who understand and have read the math and could develop an attack would be very puny, maybe a dozen researchers worldwide. And so you run the risk that maybe not enough people have looked at it to have the insight of what’s wrong with it,” says Back.

The Zcash company, which developed the open-source software, is itself a bit of an experiment. It has a direct stake in the coins that are generated by the Zcash protocol. As with Bitcoin, miners periodically create fresh coins. But with Zcash, the miners get to keep only ninety percent of those coins. The rest gets dumped into accounts managed by the Zcash company, which has stated that it will divvy up these earnings among founders, private investors, and a nonprofit foundation responsible for working on future versions of the protocol. But it is up to the company to transparently report on where that money flows.

One of the fattest unknowns is whether enough people care deeply enough about privacy to bring Zcash into the mainstream. When DigiCash proclaimed bankruptcy in 1998, the failure was attributed partially to a lack of interest in financial privacy on the part of the everyday consumer. Buoyed by unsolicited encouragement both online and in person, Wilcox is certain that it will be different this time around.

A Blockchain Currency That Hammers Bitcoin On Privacy – IEEE Spectrum

A Blockchain Currency That Hammers Bitcoin On Privacy

In October, I was in a van in Denver with Zooko Wilcox, the CEO of Zcash, a company that was soon to launch a fresh blockchain-based digital currency of the same name. On the floor next to me was a bunch of recently purchased computer equipment. I knew we were going to a hotel but didn’t know which one. I only knew that I’d be there for the next two days straight and that it would be my job to observe, ask questions, stave off sleep, and document as much as I possibly could.

That day began a cryptographic ceremony of sorts, one that could make or break a fresh digital currency. Zcash is identical to Bitcoin in many ways. It’s founded on a digital ledger of transactions called a blockchain that exists on an army of computers that can be anywhere in the world. But it differs from Bitcoin in one critical way: It is fully anonymous. Albeit privacy was a motivating factor for ­Bitcoin’s flock of early adopters, it didn’t supply the goods. For those who want to digitally replicate the practice of slipping on a ski mask and handing over an envelope of unmarked bills, Zcash is now the way to go.

The problem with Bitcoin today is that the entire history is public. If users are not utterly careful, network analysis can expose the real identities of the people behind the accounts

To supply on this anonymity, however, the Zcash protocol requires an initial dose of randomness, a set of parameters that functions as a reference point for the rest of the software. But the process comes with an unfortunate by-product. The software that generates the parameters also creates lumps of a cryptographic key, which if combined could be used to generate fresh coins out of skinny air. The ceremony I was being carted off to was serving as a public demonstration that the cryptographic fragments were being created and disposed of in such a way that the accomplish key would never come into existence.

But why make a currency that faces its very first existential threat at the very moment of its creation? Because for the subset of people who like their currency digital and free from government control, anonymity truly matters.

“Zcash is truly titillating because it’s the very first combination of the blockchain properties with the encryption properties,” says Wilcox. This layer of encryption means that with Zcash, transactions will leave no trace on the blockchain of who spent a coin or in what digital pocket it landed. All that will be visible is that a transaction occurred.

Bitcoin, the very first and most widely used digital currency, established the blockchain as a revolutionary technology. Blockchains provide a way for disparate, mistrustful parties to jointly maintain a public ledger of transactions and to do so in a way that renders all entries permanent.

The problem with Bitcoin as it is implemented today is that the entire history is public. Transactions are attributed to random identifiers that in themselves carry no information about the person controlling the accounts. But if users are not utterly careful, network analysis can expose both the financial behavior and the real identities of the people behind the accounts. (Several companies, such as Chainalysis, now provide such a service.)

Zcash also has a blockchain that records and publicly broadcasts every transaction ever made with it. But it hides all identifying information about who made the transactions and how much was spent.

“Zcash solves this privacy problem by encrypting each transaction. We use standard, modern, high-tech ­encryption, which is the same kind of encryption that is used to protect websites and emails and everything on the Internet,” says Wilcox.

This, however, creates a fresh problem. In Bitcoin, having all the details of transactions available without encryption enables miners—the people running the software that updates and secures the blockchain—to validate fresh spending requests by referencing previous transactions in the record. When those data are hidden from view, validation becomes more elaborate and requires a special kind of computation called a zero-knowledge proof. That computation enables users to prove that they own the coins they want to spend without exposing any information about where the coins came from or where they are going. Such proofs are used in many other contexts around the Internet. For example, zero-knowledge proofs permit you to type in a password on a website and have it verified by the site’s server without actually transmitting the password.

The broad strokes for Zcash were designed in two thousand thirteen at a Johns Hopkins University applied cryptography lab led by Matthew Green. The currency system was later enhanced by Eli Ben-Sasson, a computer scientist at the ­Technion, and a group of researchers at MIT and Tel Aviv University. They developed a fresh zero-knowledge proof, called a zk-SNARK, that is much less computationally intensive and thus crucial for scaling the currency.

Now Zcash is in the palms of Wilcox. Privacy is an issue that is near to his heart. As a teenager, he delayed going to college to work with cryptographer David Chaum on DigiCash, an early implementation of a privacy-centric digital cash. When that project crashed in the 1990s, ­Wilcox continued the crusade.

Enhancing financial privacy will likely enhance the capability of criminals to go about their business undetected, and that’s a legitimate fear. Bitcoin itself found its first—and arguably thus far only—killer app when sellers and buyers realized that they could use it for illegal purchases in “dark Web” markets.

But Wilcox, who regards privacy as a right, argues that there are significant, legitimate reasons why someone would want to use an anonymous currency.

“There are regulatory and commercial and moral reasons for privacy from all sectors,” he says. To give a commercial example: Apple wouldn’t want Samsung to be able to track its transactions and build up valuable competitive intelligence.

Or the motivating factor could be regulatory compliance. Numerous laws in the United States and the United Kingdom, such as the data-­privacy rules of the Health Insurance Portability and Accountability Act of 1996, require companies to keep consumer information hidden from view, a feature Zcash can reliably suggest.

There are also stringently technical considerations that make strong privacy a necessary feature in a digital currency. Ideally, for the system to function, coins should be fungible, which is to say that each coin should be indistinguishable from the next. When a coin carries the history, and potentially the wipe, of every past transaction—as bitcoins do—this can be difficult to achieve.

“The laws of economics are almost as immutable as the laws of physics. And good money means that every unit of that money is the same as any other unit of that money. The only way to have that be the case for digital currencies is to have it be private,” says Roger Ver, a Zcash investor who considers fungibility a central concern.

But perhaps the most intriguing feature of Zcash is that users can toggle the level of privacy it provides. Albeit the Zcash protocol encrypts all information about transactions by default, people can selectively disclose this data, and they have control over what parts get exposed as well as who gets to see them.

Let’s say I’m in college and my parents are funding my studies. They could send me Zcash, and then I could lift the veil on all the transactions I make with that money in a way that only they could see.

Adam Back, a cryptographer who has himself endeavored to strengthen Bitcoin’s privacy assures with a scheme called Confidential Transactions, says that Zcash is able to suggest this degree of plasticity because, unlike Bitcoin, it starts with the strongest privacy-guarantee implements available.

“It’s very hard to build something stronger on something that’s powerless,” he says. “If you embark with a flawless electronic cash system building block, then you can build an electronic cash system with selective weakening in a way that makes sense for society.”

But cryptographers like Back do have reservations. There is, of course, the problem of requiring that one moment of infallibility on the part of human beings—the destruction of the key fragments—to ensure its security.

Also, the zk-SNARK computations that validate transactions are fairly exotic, at least compared with the well-worn standards used in Bitcoin. “The number of people who understand and have read the math and could develop an attack would be very puny, maybe a dozen researchers worldwide. And so you run the risk that maybe not enough people have looked at it to have the insight of what’s wrong with it,” says Back.

The Zcash company, which developed the open-source software, is itself a bit of an experiment. It has a direct stake in the coins that are generated by the Zcash protocol. As with Bitcoin, miners periodically create fresh coins. But with Zcash, the miners get to keep only ninety percent of those coins. The rest gets dumped into accounts managed by the Zcash company, which has stated that it will divvy up these earnings among founders, private investors, and a nonprofit foundation responsible for working on future versions of the protocol. But it is up to the company to transparently report on where that money flows.

One of the largest unknowns is whether enough people care deeply enough about privacy to bring Zcash into the mainstream. When DigiCash proclaimed bankruptcy in 1998, the failure was attributed partially to a lack of interest in financial privacy on the part of the everyday consumer. Buoyed by unsolicited encouragement both online and in person, Wilcox is certain that it will be different this time around.

A Blockchain Currency That Strikes Bitcoin On Privacy – IEEE Spectrum

A Blockchain Currency That Hits Bitcoin On Privacy

In October, I was in a van in Denver with Zooko Wilcox, the CEO of Zcash, a company that was soon to launch a fresh blockchain-based digital currency of the same name. On the floor next to me was a bunch of recently purchased computer equipment. I knew we were going to a hotel but didn’t know which one. I only knew that I’d be there for the next two days straight and that it would be my job to observe, ask questions, stave off sleep, and document as much as I possibly could.

That day began a cryptographic ceremony of sorts, one that could make or break a fresh digital currency. Zcash is identical to Bitcoin in many ways. It’s founded on a digital ledger of transactions called a blockchain that exists on an army of computers that can be anywhere in the world. But it differs from Bitcoin in one critical way: It is entirely anonymous. Albeit privacy was a motivating factor for ­Bitcoin’s flock of early adopters, it didn’t produce the goods. For those who want to digitally replicate the practice of slipping on a ski mask and handing over an envelope of unmarked bills, Zcash is now the way to go.

The problem with Bitcoin today is that the entire history is public. If users are not enormously careful, network analysis can expose the real identities of the people behind the accounts

To supply on this anonymity, however, the Zcash protocol requires an initial dose of randomness, a set of parameters that functions as a reference point for the rest of the software. But the process comes with an unfortunate by-product. The software that generates the parameters also creates lumps of a cryptographic key, which if combined could be used to generate fresh coins out of lean air. The ceremony I was being carted off to was serving as a public demonstration that the cryptographic fragments were being created and disposed of in such a way that the accomplish key would never come into existence.

But why make a currency that faces its very first existential threat at the very moment of its creation? Because for the subset of people who like their currency digital and free from government control, anonymity indeed matters.

“Zcash is truly arousing because it’s the very first combination of the blockchain properties with the encryption properties,” says Wilcox. This layer of encryption means that with Zcash, transactions will leave no trace on the blockchain of who spent a coin or in what digital pocket it landed. All that will be visible is that a transaction occurred.

Bitcoin, the very first and most widely used digital currency, established the blockchain as a revolutionary technology. Blockchains provide a way for disparate, mistrustful parties to jointly maintain a public ledger of transactions and to do so in a way that renders all entries permanent.

The problem with Bitcoin as it is implemented today is that the entire history is public. Transactions are attributed to random identifiers that in themselves carry no information about the person controlling the accounts. But if users are not enormously careful, network analysis can expose both the financial behavior and the real identities of the people behind the accounts. (Several companies, such as Chainalysis, now provide such a service.)

Zcash also has a blockchain that records and publicly broadcasts every transaction ever made with it. But it hides all identifying information about who made the transactions and how much was spent.

“Zcash solves this privacy problem by encrypting each transaction. We use standard, modern, high-tech ­encryption, which is the same kind of encryption that is used to protect websites and emails and everything on the Internet,” says Wilcox.

This, however, creates a fresh problem. In Bitcoin, having all the details of transactions available without encryption enables miners—the people running the software that updates and secures the blockchain—to validate fresh spending requests by referencing previous transactions in the record. When those data are hidden from view, validation becomes more complicated and requires a special kind of computation called a zero-knowledge proof. That computation enables users to prove that they own the coins they want to spend without exposing any information about where the coins came from or where they are going. Such proofs are used in many other contexts around the Internet. For example, zero-knowledge proofs permit you to type in a password on a website and have it verified by the site’s server without actually transmitting the password.

The broad strokes for Zcash were designed in two thousand thirteen at a Johns Hopkins University applied cryptography lab led by Matthew Green. The currency system was later enhanced by Eli Ben-Sasson, a computer scientist at the ­Technion, and a group of researchers at MIT and Tel Aviv University. They developed a fresh zero-knowledge proof, called a zk-SNARK, that is much less computationally intensive and thus crucial for scaling the currency.

Now Zcash is in the mitts of Wilcox. Privacy is an issue that is near to his heart. As a teenager, he delayed going to college to work with cryptographer David Chaum on DigiCash, an early implementation of a privacy-centric digital cash. When that project crashed in the 1990s, ­Wilcox continued the crusade.

Enhancing financial privacy will likely enhance the capability of criminals to go about their business undetected, and that’s a legitimate fear. Bitcoin itself found its first—and arguably thus far only—killer app when sellers and buyers realized that they could use it for illegal purchases in “dark Web” markets.

But Wilcox, who regards privacy as a right, argues that there are significant, legitimate reasons why someone would want to use an anonymous currency.

“There are regulatory and commercial and moral reasons for privacy from all sectors,” he says. To give a commercial example: Apple wouldn’t want Samsung to be able to track its transactions and build up valuable competitive intelligence.

Or the motivating factor could be regulatory compliance. Numerous laws in the United States and the United Kingdom, such as the data-­privacy rules of the Health Insurance Portability and Accountability Act of 1996, require companies to keep consumer information hidden from view, a feature Zcash can reliably suggest.

There are also rigorously technical considerations that make strong privacy a necessary feature in a digital currency. Ideally, for the system to function, coins should be fungible, which is to say that each coin should be indistinguishable from the next. When a coin carries the history, and potentially the wipe, of every past transaction—as bitcoins do—this can be difficult to achieve.

“The laws of economics are almost as immutable as the laws of physics. And good money means that every unit of that money is the same as any other unit of that money. The only way to have that be the case for digital currencies is to have it be private,” says Roger Ver, a Zcash investor who considers fungibility a central concern.

But perhaps the most intriguing feature of Zcash is that users can toggle the level of privacy it provides. Albeit the Zcash protocol encrypts all information about transactions by default, people can selectively disclose this data, and they have control over what parts get exposed as well as who gets to see them.

Let’s say I’m in college and my parents are funding my studies. They could send me Zcash, and then I could lift the veil on all the transactions I make with that money in a way that only they could see.

Adam Back, a cryptographer who has himself endeavored to strengthen Bitcoin’s privacy ensures with a scheme called Confidential Transactions, says that Zcash is able to suggest this degree of plasticity because, unlike Bitcoin, it starts with the strongest privacy-guarantee contraptions available.

“It’s very hard to build something stronger on something that’s feeble,” he says. “If you embark with a ideal electronic cash system building block, then you can build an electronic cash system with selective weakening in a way that makes sense for society.”

But cryptographers like Back do have reservations. There is, of course, the problem of requiring that one moment of infallibility on the part of human beings—the destruction of the key fragments—to assure its security.

Also, the zk-SNARK computations that validate transactions are fairly exotic, at least compared with the well-worn standards used in Bitcoin. “The number of people who understand and have read the math and could develop an attack would be very petite, maybe a dozen researchers worldwide. And so you run the risk that maybe not enough people have looked at it to have the insight of what’s wrong with it,” says Back.

The Zcash company, which developed the open-source software, is itself a bit of an experiment. It has a direct stake in the coins that are generated by the Zcash protocol. As with Bitcoin, miners periodically create fresh coins. But with Zcash, the miners get to keep only ninety percent of those coins. The rest gets dumped into accounts managed by the Zcash company, which has stated that it will divvy up these earnings among founders, private investors, and a nonprofit foundation responsible for working on future versions of the protocol. But it is up to the company to transparently report on where that money flows.

One of the thickest unknowns is whether enough people care deeply enough about privacy to bring Zcash into the mainstream. When DigiCash announced bankruptcy in 1998, the failure was attributed partially to a lack of interest in financial privacy on the part of the everyday consumer. Buoyed by unsolicited encouragement both online and in person, Wilcox is certain that it will be different this time around.

Related video:

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken gravely, I invest a significant amount of individual money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other palm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been utterly similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a enormous factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not enormously yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a simpleness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a hefty amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my individual thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most elementary way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Reminisce to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for bearing discomfort.

The article has been translated: На русском

9 reasonable cryptocurrencies to invest in – Paul Miller – Medium

9 reasonable cryptocurrencies to invest in

After my Ethereum investment grew 45x (as per Sep 21, 2016), I determined to do a similar research on alternative cryptocurrencies.

Since an advice without skin in the game should not be taken earnestly, I invest a significant amount of private money into all the projects listed here.

I think of pouring money into cryptocurrencies as an accessible scheme of a venture investment. U.S. regulations prohibit an investor from purchasing ownership interests in companies that are not publicly listed on a stock exchange — unless he / she has at least $200K of a yearly income. This is very unfortunate and closes those fine instruments from the general population.

Cryptocurrency investment, on the other arm, is not presently regulated by SEC — or similar agencies. Keeping this in mind, investing in Ethereum development in middle-2014 has been enormously similar to a venture investment. And, well, it played out — permitting ETH team to grow rapidly.

Any investment may grow by a hefty factor. Or, it may become worth nothing. It’s your take whether to go after the advice, or to overlook it. There are many cryptos out there which are just sophisticated ponzi schemes determined to enrich their creators. Similarly, currencies which do not bring any innovations to the table have been excluded from the list.

The simplified list

  • Ethereum: Had 40x growth rate over the last two years. Permits to build fully-functional applications on blockchain without middlemen. Utterly promising currency, solid team (take a look at what Vitalik Buterin is doing right now). #Two crypto right now — but still 1/Ten of the Bitcoin value. So even while being conservative, thinking that any crypto would not grow higher than BTC, it may grow 10x. Still 10x is a puny amount — compared to other solutions on the market. So, not utterly yummy for a mid-game. Long-term, I am keeping most of the cash here.
  • Monero: Anonymous / private Bitcoin. Now, you may think, “What are you talking about, the BTC is anonymous already?” — which is a very unfortunate albeit popular misconception. All BTC transactions can be seen by the public. For example, by providing out your wallet address to someone, the person is able to see all the payments you’ve received and sent. The black market (drug dealers and weapon manufacturers) created a solution for this: basically a software that mixes your coins with other coins. Nevertheless, the software needs to be trusted and may not work correctly. This is pretty bad when your freedom depends on it. Monero has the mixing system built-in — which makes it very delicious for any kind of black market. This is how the currency got its very first big growth boost — basically a popular darknet market adopted it. Moreover, the transaction privacy is a necessity for any kind of widely adopted currency, which makes me think it may even overtake BTC. The market capitalization of Monero is presently 1/100 of BTC, which makes it a better investment in my opinion. This is where I put most my of my “new” investment batch in.
  • Factom: A blockchain-based system that’s optimized to store millions of realtime records with a single hash. Useful for all kinds of business apps. Runs on top of Bitcoin.
  • Counterparty: A plain description of it may sound like an “Ethereum competitor backed by Bitcoin blockchain”.
  • Siacoin: Distributed data storage. An alternative to Box, Google Drive. The big corporations would not have any access to your data in this point.
  • Lisk: A JavaScript-based Ethereum competitor that aims to make the deployment and development effortless. Interesting solution for an internet of things device from a plainness perspective.
  • Ripple: A protocol which basically permits to reduce financial transaction fees by a big amount (to a duo cents) — and makes the settlement almost instant. Already backed by some VCs and used inwards big banks. The currency itself tho’ is different from others: it’s premined and centralized.
  • STEEM: A decentralized platform which permits to prize content creators lightly.
  • Zcash: crypto, which aims to solve the same problem Monero does. Some venture capital is pouring in. I am unconvinced — a plain backdoor at this point can compromise the entire system in the future. Nevertheless, my private thoughts don’t matter here — what the market thinks is much more significant; i’d very likely pour some cash once the inflation rate would become stable.

The investment process

The most plain way of investing is buying the Bitcoin with real money on any exchange, then selling the BTC for any currency from the list.

I’ve used Poloniex to buy BTC and other currencies; which has all the pairs from the list.

I would advice to not keep any significant amount of assets on an exchange. After buying the currency of your choice, send it to a wallet without an internet connection. Recall to do some googling and research to ensure your storage is solid and secure.

Prepare yourself to not brief the investments with yet another market fright. Largest points in an investment game are awarded for suffering discomfort.

The article has been translated: На русском

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7 regulatory challenges facing blockchain – BBVA NEWS

seven regulatory challenges facing blockchain

MarГ­a Tena

When the subject of blockchain is addressed, it is usually to hail it as a technology that will overhaul entire industries. “It is a revolution because blockchains can record identities, financial transactions and all kinds of legal operations”, says tech guru Chris Skinner. Nonetheless, the technology and its applications are still subject to explore, and remain in a very nascent stage, particularly in the banking sector where regulators are charged with coordinating and assuring industry stability.

With this in mind, BBVA Research has ready a report entitled “Blockchain in Financial Services: Regulatory Landscape and Future Challenges for its Commercial Application”, in which Javier SebastiГЎn, Digital Regulation Manager at BBVA, evaluates the regulatory challenges that the technology still needs to overcome before it can be used in the world of financial services.

Banks in lead as various players jockey for position on blockchain, BBVA’s Sieber says

1.- Legal framework regarding the legal nature of blockchains and collective distributed ledgers. This includes territoriality (issues of jurisdiction and applicable law) and liability should something go wrong. By definition, collective distributed ledgers (or DLT) have no specific location. In terms of jurisdiction and applicable law, territoriality constitutes a problem, as each network knot may be subject to different legal requirements, and there is no “central administration” responsible for each distributed ledger, the nationality of which might act as an “anchor” in terms of regulation. Following this same reasoning, liability also represents a concern, as there may be no party ultimately responsible for the functioning of distributed ledgers and the information contained therein.

Two.- Legal framework for recognition of blockchains as immutable and tamper-proof knots, ensuring the veracity of information contained therein. A legal framework is required for using blockchains as unique and trusted sources of identity. Before this is possible, standardized regulation is necessary on data protection and authenticating the identity of legal persons.

While there is broad consensus among the cryptographic and IT community regarding the practical immutability of blocks in a well-defined blockchain, either because it is technically unlikely to modify blocks in “work test” systems or other kinds of controls linked to consensus mechanisms, there is as yet no legal recognition of this aspect of blockchains, and therefore it could not be wielded as a legal argument in court.

At present no tribunal has issued any ruling recognizing blockchains as tamper-proof and immutable ensures of veracity.

Three.- Regulation regarding interpretation of the “right to be forgotten”, as the “tamper-proof” characteristic of blockchains “clashes” with said right, granted under European regulation to protect individual data. The fact that a blockchain is immutable may represent a problem, as it might conflict with other rights recognized by politicians, governments and/or regulators. One example is the “right to be forgotten” granted to each citizen under European regulation, which permits any European citizen the right to have information stored in outer databases, either on paper or in electronic format, deleted should they so wish.

The only solution to reconcile such rights with the very nature of blockchains may be to substitute the right to have information “deleted” with a right to “prohibit the use” of private information by third parties. This could be achieved by a combination of automatic data encrypting when certain conditions are in place (which could mean use of wise contracts) or alternative solutions to prevent said information being accessed when an individual determines to exercise their right.

Four.- Legal framework regarding the legal validity of documents stored in blockchains as evidence of possession or existence. Similar to the recognition of blockchains as unique immutable sources of veracity, a 2nd level of recognition is required before blockchains can be used in certain businesses. This regards not only recognition that the information cannot be modified, but also recognition that inclusion in a blockchain of a deed proclaiming ownership or the existence of an asset represents genuine proof of ownership or the real existence of said asset.

However, assuming that the verification process regarding the property/existence prior to inclusion of the document in the blockchain is reasonably sound, and we are certain of the efficacy of the cryptographic mechanisms used in blockchain technology, then recognition of blockchains as immutable sources of trust implies that documents located in blockchains truly can be used as proof of existence or ownership. However, it is another matter whether the courts of a given country might accept this. Again, there is no jurisprudence for us to fall back on.

Five.- Legal framework regarding the legal validity of financial instruments issued in blockchains. When blockchains are used as a platform to define “native” financial instruments, such as bonds or derivatives, recognition is required of the legal validity of said financial instruments by regulators and supervisors. Obviously, one key financial instrument that could be issued in blockchains is money. Native money issued in blockchains could have serious implications for monetary policy and macroeconomics, and warrants a deeper analysis that goes beyond the remit of this document.

6.- Legal framework for wise contracts generally speaking, and for international trade in particular, including applicability in the real world, territoriality and liability. В The issues mentioned in point one regarding territoriality and liability are likewise applicable to wise contracts, but require a series of extra considerations:

Clever contracts: blockchain-based contracts that don’t require lawyers

As far as jurisdictional issues are worried, there is not only the issue of whether the distributed ledger itself has a specific location, but also the issue of signatories to the contract being subject to different laws under their respective jurisdictions. Regarding liabilities, numerous parties are involved in brainy contracts: not only the parties to the contract, but also the creator of the same (usually some kind of encoder) and the custodian of the contract (ideally there would be no need for the latter party). As well as the evident possibility of one of the contracting parties breaching the contract, there is a chance that the contract itself may be flawed, either due to coding errors or design errors. Thus, when a brainy contract fails to work as expected, which party would be liable?

7.- Regulation on the use of blockchains as a valid regulatory registry for the Internet of Things. It has been said that blockchains could be particularly useful for the Internet of Things. In the Internet of Things all connected devices have an identity. It would therefore be truly useful to establish a collective registry storing the “identity” and details of each connected thing, while permitting them to conduct transactions inbetween each other, including M2M (machine-to-machine) payments.

The idea of having one or several “collective distributed ledgers” for the Internet of Things seems to be gaining traction, and would require a legal framework recognizing distributed ledgers as valid regulatory registries. All of the above challenges regarding territoriality, liability and the applicability of wise contracts are, of course, also pertinent to any blockchain associated with the functioning of the Internet of things.

Javier SebastiГЎn

Javier SebastiГЎn CermeГ±o, Digital Regulation Manager at BBVA, identifies and evaluates digital trends and their influence on financial services. His work concentrates primarily on fresh business models and regulatory requirements. LinkedIn

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6 Reasons Why Blockchain is Worth Getting Excited

six Reasons Why Blockchain is Worth Getting Excited

If you keep tabs on the fintech, then you’re already well familiar with the hype machine known as blockchain. But, there are still slew of folks who have either never heard of the blockchain or misunderstand the technology and it’s potential.

What’s the big deal, then?

Even if you’re not interested or involved with fintech, the blockchain has the potential to influence your life both personally and professionally. This isn’t just hyperbole. The blockchain is going to be the next thing.

And, that’s why it’s vital that you get caught up to speed on its past, present and future.

What is blockchain and where did it come from?

One of the simplest explanations of the a blockchain is from Gizmodo: “The blockchain is a ordinary digital platform for recording and verifying transactions so that other people can’t erase them later — and anyone can see them.”

For the techies out there, the blockchain is an anonymous peer-to-peer payment system that relies on secure cryptographic protocols. It uses a public ledger and database to record all record transactions. However, it’s decentralized. This means that there is no governing figure controlling the blockchain.

If that sounds like bitcoin to you, then you’d be correct. The blockchain was built using the bitcoin system that was released by Satoshi Nakamoto" in 2009. Albeit, the idea of cryptocurrency can be traced back to the work of David Chaum and his invention known as DigiCash back in the 1980s.

“The blockchain ledger helps to provide transparency for transactions. Albeit many bitcoin transactions are in some ways anonymous, the blockchain ledger can link individuals and companies to bitcoin purchases and ownership by permitting individual parties, called miners, to process payments and verify transactions. Rather than a central company presiding over the use of bitcoin, these blockchain originators serve central roles in the management and administration of this alternative currency system," Techopedia further explains.

In other words, the blockchain is actually composed of single transactions known as “blocks.” Each block links together and forms a accomplish bank history of transactions. Once a block is linked, it cannot be edited.

Unlike bitcoin, the blockchain is permanently evolving and can extend beyond cryptocurrency. Before we get much further, here are a duo key pointers to reminisce from BitcoinHub:

  • It can transfer value or information in a secure manner.
  • It can facilitate, as well as track, “Brainy Contracts.”
  • Eliminates intermediaries and permits the end user to interact directly with the ledger.
  • Reduces the cost of transferring value and money anywhere in the world for next to nothing.
  • Provides almost instant, secure, and borderless transactions.
  • Can automate payment protocols that are permanent, irreversible and tamper-proof.

Why are people excited about blockchain?

This is a indeed good question. And, there isn’t just one response. Almost everyone can agree that the blockchain is one of the most interesting and disruptive compels to come along in fairly some time. And, that’s because the blockchain is able to:

1. Prevents payment scams.

One of the most talked about advantages involving blockchain technology is how it can prevent future payment scams. For starters, it would protect both buyers and sellers by using “clever contracts.” This procedure would avoid those instances where you purchase an item and the seller doesn’t go after through.

Another way that scams are thwarted is that since all transactions are recorded, a coin can’t be used for double-spending or counterfeited. Once a coin, token or electronic currency is spent, it can’t be used again.

There’s also the possibility that companies and individuals can no longer “cook the books” or price gouge customers. Again, since every transaction is recorded, every cent is accounted for and would prevent an Enron type situation. Price gouging could be a thing of the past since it would protect intellectual property by being collective publicly on the blockchain.

The most discussed perk is how secure the blockchain is. Besides transactions being placed in the ledger, it is secure because transactions are directly inbetween two parties that require a unique signature to authorize the transaction. Without third parties and the signature, coins and token can’t be altered.

Two. Cuts out the middleman.

The blockchain is a peer-to-peer system, meaning that transactions are inbetween you and another party. This plain two party only, could be a real game changer. We use this to be able to facilitate cheap ecash transactions across the world. For example, you could send friends or family money anywhere in the world without having to pay for the transaction or currency fees that traditional banking or financial institutions have used.

Chris Dunn from Skill Incubator is excited about the emergence of decentralized marketplaces. This fresh type of online market can cut out middlemen like Amazon and Ebay. For example, in April of two thousand sixteen OpenBazaar launched their zero percent fee marketplace that offers the use of Bitcoin to buy and sell products. And with trading volume in Japan on the rise, decentralized marketplaces in Asia are primed to reduce friction with international e-commerce.

The technology could also liquidate all of the lawyers, realtors, and banks when transferring a property title or house deed. This would not only save you a bundle in fees, it would also speed the process up from a day to hours.

Three. Lodges transactions in minutes.

Imagine being able to send and receive money from across the globe in just a matter of minutes. How about receiving a signed contract or vehicle title in just a day? No matter the screenplay, blockchain decentralized and the P2P system permits you to lodge any digital wallet transaction quickly, as opposed to waiting days or weeks.

Four. Increases storage.

Cloud storage is an incredible development. But, you don’t have any control of the storage infrastructure. It’s in the forearms of Google, Dropbox, Facebook or Apple. And, that could become a concern if you value your privacy. Since you’ll need an encryption key to access your data, you can rest assure that no one else can access it except you.

Also, companies like Storj offers more cloud storage at a cheaper rate than Dropbox.

6. Prizes users.

Who doesn’t love prize programs? The blockchain can improve loyalty programs by providing customers the capability to trade points among each other since the transactions would be placed in the public ledger. It would also open up the possibility of using points at different vendors. For example, you could use some of your airline points at your dearest coffee shop or eCommerce site.

Because of those capabilities, the blockchain will be able to disrupt the following;

  • Finance — Blockchain will liquidate the need for traditional banking and financial institutions by substituting back-office systems with a P2P system.
  • Contracts — Chris DeRose states that ‘clever contracts’ will be used, which is “a financial security held in escrow by a network that is routed to recipients based on future events, and a computer code.” Besides, contracts, deeds, titles, and other significant documentation will be collective on the public ledger.
  • Patents and Copyright — Whether it’s a fresh innovation, gaming app or chunk of music, the blockchain can prove that you had ownership of the intellectual property very first.
  • Voting — When people cast their ballots, it will be recorded during elections.
  • Collectibles — The blockchain could be used to track and validate scarce or limited items like coupons or a chunk of artwork.
  • Bills of Lading — Cryptographic signatures can be used to eliminate distrust on everything from shipped products to switching shifts at work.

As Dominic Frisby ideally states on Cherry.com, “the ownership of just about anything can be recorded and traded using the blockchain.” We’re even eyeing the tech being used for everything from live-streaming to mining light bulbs to creating one digital identity that would substitute all of those usernames and passwords you have.

Because of this, blockchain technology actually has the potential to switch the world. And, that’s why there’s so much whirr surrounding it.

Where is the blockchain headed?

Blockchain is just the beginning. In fact, expect the technology to proceed to improve and evolve in the instant future.

According to Andrew Keys on CoinDesk, keep a particularly close eye on:

  • Ethereum, a public cryptocurrency and a blockchain platform with clever contract functionality, will predominate the industry.
  • Get familiar with "brainy contracts." They’re going to be the future of blockchain.
  • "Merkle tree" and "proof-of-stake" will become buzzwords.
  • Cloud services, such as Microsoft's Azure platform, “will provide a safe place for fresh developers to wrap their goes around concepts such as clever contracts while applying them to their corporation’s ache points.”
  • Regulators and governments will ultimately embark to understand blockchain and embrace it.
  • Don’t expect bitcoin or or any other digital currencies to get much fatter.
  • The hype surrounding blockchain won’t die down. It’s only going to get fatter as more startups and fintech businesses proceed to expand on blockchain tech.

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