How Koinify and also Melotic Strategy to Bring Order to Crypto Crowdsales

Though the crypto 2.0 sector of the bitcoin area is growing, the part of the industry principally concerned with non-financial or advanced blockchain applications has battled to establish a steady marketplace for its jobs.

In the lack of solid VC interest, or probably in the spirit of pressing the limits of advancement, lots of decentralized applications (DApps) are seeking to fund themselves through what might arguably be the blockchain’s most convincing usage past currency, decentralized product support in the vein of Kickstarter.

DApps look for to harness the capacity of blockchains to produce symbols, which could then be distributed as well as utilized to incentivize the item’s development and fostering. One of the most significant example could be MaidSafe’s $7m crowdsale, which this summer was greeted with controversy and also suspicion in both the mainstream media and also the wider neighborhood as it dealt with market forces as well as liquidity issues.

Even those who are trying to offer market remedies recognize that in bush West of bitcoin, DApps are still a relatively uncharted territory.

“If you were simply to consider the crypto 2.0 room as well as see all the possessions folks are providing on Counterparty or NXT or any one of these 2.0 systems, the spirit of decentralization is openness as well as openness,” claimed Jack Wang, founder and CEO of digital property liquidity exchange Melotic. “The flip side exists’s a lot more capability for people to press undependable items.”.

To resolve this market issue, Wang and his business are entering a brand-new partnership with DApp crowdfunding platform Koinify. With each other, Koinify as well as Melotic are looking for to curate an industry that could allow the successful launch of new products and also the ultimate exchange of their symbols on a competitive market.

“Formerly when you acquired something in Kickstarter, it was merely a contribution or purchase, so there was no liquidity,” Koinify Chief Executive Officer as well as creator Tom Ding stated. “In a token economic climate, you get a more sustainable charity, you could sustain a software but you can also have leaves.”.

Ultimately, both platforms think that with each other they could develop a decentralized AngelList, one that allows neighborhoods to sustain and grow innovative jobs, while appreciating new liberties over the cash they choose to offer.

Reducing the signal-to-noise proportion.

Both Ding and also Wang talked to CoinDesk regarding the collaboration, recognizing that their primary goal is to bring quality to a currently lively crowdsale marketplace, one that they assert has been turning away possibly interested participants.

“The issue is the signal-to-noise proportion is truly high,” Ding claimed. “There are way too many sounds as well as it ends up being really difficult for people that would like to invest or acquire great, high-grade tasks, tokens, to distinguish an excellent from a bad one.”.

Ding stated that Koinify will likewise seek to add transparency to the DApp funding process, guaranteeing that tasks are vetted and appropriately incentivized.

“If the job markets out, makes $6m and also acquired all of it in cash money or bitcoin, they may not have the motivation to provide a product,” Ding continued. “Part of our work is to help them set up things like multisig and also create milestones-based vesting to see to it that designer motivations are in line with just what they promised.”.

Wang kept in mind that Melotic aims to supply the second part of this pipeline, making sure that there is liquidity in the DApp exchange markets by trying to find moneying sources for tasks, consisting of bigger sources of capital.

Striving for self-regulation.

Ding additionally noted the current rumors that the US Stocks and Exchange Compensation (SEC) could be taking a better take a look at the crypto 2.0 industry, asserting that until official guidelines are more clear, the area should try to implement its very own customer protections.

“I think also several of the regulative rumors recently could be a positive thing during that it requires folks to assume more difficult,” he continued. “Is it fine to reveal the principle and start elevating cash? Or should developers supply something much more solid?”.

Meanwhile, he said, this demand for self-regulation indicates that Koinify should be discerning regarding the projects it onboards, also if that needs it to become a much more central supervisor of its platform.

“If you have a limited choice, the amount of resources that enters those markets is top quality,” he stated. “When you have an actually open market, with an actually high criterion or tasks coming in, the issue will certainly resolve itself. We wish to urge talented designers into decentralized applications.”.

Ding indicated that Koinify will additionally seek to enlighten designers, spending time and also sources now to help them browse the facilities for developing DApps.

Very first launch announced.

Koinify and also Melotic will begin testing their market strategy with the launch of Koinify’s very first project on 1st December, the token sale for decentralized social messaging service Treasures, which was revealed at Within Bitcoins Tel Aviv this October.

Ding made use of Treasures as an instance to show how Koinify intends to sheppard projects to effective launches, keeping in mind that the job satisfied a determined 30– 40 diligence questions that covered every little thing from modern technology to team framework.

“We had a great deal of discussion regarding just what is a fair design for dispersing Gems symbols, then we worked on establishing the milestones that Treasures need to deliver,” he stated, including that Koinify even flew to Israel to meet with the Treasures team.

Ding indicated that Treasures’ initial milestone will certainly be the iOS model of its app, the 2nd its Android variation as well as the third the shipping of its advertisements system. As soon as gotten to, each turning point will certainly permit Gems to receive a brand-new part of the funds it raises in its pre-sale.

“We might have a community-based ballot where unless you provide a strong beta variation, we will certainly not launch the bitcoin that you have actually raised,” Ding included, speculating on just how Koinify may take care of criminals on its system.

High-stakes launching.

Though both Ding and Wang talked at length about exactly how their platforms could possibly disrupt or supplement conventional VC funding, they both acknowledged that the threats will be high for both of their brands early on.

“The risks are considerably greater,” Wang detailed, “due to the fact that there are considerably less jobs. However, we’re searching for out if firms could acquire extra worth from token sales that permit their company model to alter as well as permit them to money their suggestions as well as principles separate from a VC model.”.

Ding took place to propose that a few of the projects it is talking with are seeking to raise funds both from VCs and also from token sales, noting that there is an idea that a successful token sale could even improve VC passion.

However, both stressed that, for now, token sales give developers with a luring way to expand their userbase, something Ding anticipates will certainly be a powerful incentive that will certainly enable Koinify and also Melotic to increase.

“Every startup knows that the hardest part is zero to 1,000 individuals; 1,000 to 10,000 customers. 10,000 users could possibly very easily come form this sort of pre-sale. If you can acquire your very first 10,000 users to crowdfund you, that’s probably an advantage to improve.”.

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Multigateway: The First Decentralized Cryptocurrency Exchange

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Disclosure: I own stake in a variety of the assets related to Supernet projects.


Soft launch of the Supernet v0 wallet was announced November 14th by James on the Slack channels with a cheerful:

“Supernet v0 launched yesterday, took everyone by surprise. gotta love decentralization :)” -JL777

Users of the Supernet may now withdraw Bitcoin, Litecoin, Peercoin and NXT directly out to Visa and Mastercards around the globe! Payouts are done in US dollars and local banks set fiat exchange rate. This is a server provided by Coinomat.

Users can also be relieved to trade on the first live decentralized crypto currency exchange!

The software is available for download at the Multigateway website and functions similar to the NXT wallet client, with the exception of some Supernet magic.

The Multigateway (MGW) is not only safer, but it may also be the cheapest. It charges no deposit fees and the withdrawal fees equal the minimum transaction fee per coin. Currently, users must convert their coin manually, be it Blackcoin or Dogecoin to NXT, in order to transfer to another crypto coin. But will soon change with InstantDEX which expected to allow 3 second or less conversions, programmable trade bots and much more!

Investors can invest in MGW, but the real ROI is expected from InstantDEX which will have competitive fee and leverage MGW’s minimal fees and tech.

Under the hood

MGW works by creating assets on top of NXT’s long standing decentralized asset exchange.

Coin assets such as mgwBTC are traded for deposits of Bitcoin, Blackcoin, Viacoin, etc. at a ratio of 1 to 1. MGW is a full reserve, decentralized exchange with live proof of solvency!

Deposited crypto currencies are stored on server clusters of 3. These are secured through multisignature transactions, where 2 out of 3 servers must agree for withdraws to occur.
Each server is monitored and secured by an independent party, partnered up with the Supernet.

The number of Multisignature parties is not limited by MGW, but by the the Bitcoin protocol.

According to JL777, core Bitcoin devs have coded multisignature transactions beyond m of 3 as non standard. This means miners and nodes need to compile these manually or enable this feature on their own accord, which most don’t. It is not enabled by default. This may be driven by concerns of blockchain bloating.

Because of this, it takes a long time for greater multisig transactions to be confirmed by the BTC network, which would not allow MGW to operate properly and would be the end of InstantDEX. If this was to change or if coins that have solved this problem were to join the MGW then further distributed clusters could be set up, and the possible combinations are stellar.

Though going from 1 out of 1 one key or a central trusted party, to 2 out of 3 may seem like not that much of a change, it is actually massive. Its the difference between a central point of failure and a network. It is perhaps the simplest differentiation between a centralized and decentralized model. However, collusion among parties is still a concern, which is why reputation may be essential to this experiment of multi signatures.

With that in mind, I will highlight the core parties that have stepped up to secure the core MGW cluster as of time of publishing.

MGW clusters

There are two MGW clusters. MGW#0 controls BTC, LTC, DRK, BTCD and VRC coins. This is the main Supernet cluster and is secured by Coinomat, MyNXT.info team and Frohike.

Coinomat is an automatic crypto coin and fiat exchange that serves as a gateway from Visa and Mastercard to crypto currencies. It also provides instant conversions among various crypto currencies such as Bitcoin, Litecoin and Peercoin.
The second key holder of MGW#0 is MyNXT.info “a group of 15 people between investors, advisors, developers and designers,” says abuelau, a Sr. Member of the NXT community, early adopter, and member of the team. MyNXT.info is an NXT blockchain explorer, mobile wallet and web advertizment agency, fully powered by NXT.
MyNXT were motivated to join “after we saw the hacks on MtGox and Bter,” said abuelau, adding: “Every time I need to exchange NXT or other coins I am nervous with the possibility of losing my coins while they are at the exchange, so anything that helps make it more secure is welcome.”

Frohike is “a German unix server administrator. He specializes in server hardening and security. He’s been involved since June in the team… working with James and recently he joined SuperNET as server admin for the forum and websites,” said VanBreuk, Hero Member of the NXT community and general manager of the MGW development process.

I reached out to Frohike for comment but he did not reply but publishing time.

Unlike cluster number two, live proof of solvency for MGW#0 is not active yet, since they are migrating coins and assets to production servers. The website and api for this monitoring is expected to be available, soon according to VanBreuk.

The second cluster called MGW#2 is responsible for controlling Blackcoin, Viacoin and Dogecoin!

This one is secured by Cobaltsky, Hero Member of the NXT community, artist and developer. Along side Marcus03 Sr. Member who is also developing an NXT mobile wallet and Jeffdiesel, also a Hero Member.

Live proof of solvency for MGW#1 can be currently found here.

For more information on the progress of MGW clusters, follow the main NXT thread.

Decentralizing everything

Anyone can set up their own MGW cluster, as you would expect from a community focused on decentralization. However, for the time being, interested parties must reach out to JL777 or other core Supernet developers to be given access to the private repo. This might change in the future after the main development is finished.

Coin developers, businesses and individuals interested in joining the Supernet are welcome to reach out at the Supernet forums publicly or contact JL777 directly through a private message.

More blockchain technologies wanted!

The Supernet is putting out a call for innovative and active crypto coin communities. Its very difficult to be noticed and compete as a crypto coin these days; there’s over 500 coins on coinmarketcap and great coins may be getting lost among the masses.

The Supernet has some general standards by which to review coins. A solid answer to the question “What value can your crypto coin tech bring to customers?” may be all you need to join.

NXT Phasing

Keep in mind, however, that MGW is still in its beta stages. Compared to 1 out of 1 cold storage solutions for the average exchanges, or deposit accounts for bank like crypto coin organizations, MGW is many times more decentralized, both for its trading platform and its distributed multisignature servers.

However, until NXT releases its “Phased transactoins” feature, the NXT asset side of things will not support multisignature. This means that the coin assets that mirror each crypto coin are controlled manually and could be exploited by dumping them on the market.

MGW beta will end when phasing is live on the NXT network. Until than, each MGW key holder is responsible for a third of a hot wallet with relevant coin assets. The amount of coin assets on the hot wallet are the average expected volume per coin.

The remaining ‘unbound’ assets, which are not expected to be traded for the crypto currencies yet are currently being held in escrow by anon136’s renown escrow services.
Its time to take distributed finance to the next level, and the Supernet’s Multigateway has just raised the bar.

Worth a Tip? NXT-UWQK-YZ7T-GDS6-GMW8P


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The Satoshi Nakamoto Mystery

The Satoshi Nakamoto Mystery

bitcoinSince the creation of Bitcoin, many have wondered who Satoshi Nakamoto, the pseudonymous creator, actually was. The mystery was deepened recently when on March 6, 2014, Newsweek published an article which identified a man named Dorian Prentice Satoshi Nakamoto as the Satoshi Nakamoto who created Bitcoin. Dorian Nakamoto is a 64 year old Japanese American male who lives a modest lifestyle in Temple City, California and also likes to collect model trains. It appears as though if he is the creator of Bitcoin, he has not spent any of his riches.

The article was written by Leah McGrath Goodman, and gives several pieces of evidence to suggest that Dorian is the real creator of Bitcoin. Apparently, Dorian Nakamoto was very good at math and also had a background in engineering and knew how to program. Much of his career, which includes work for the U.S government, is shrouded in secrecy. The greatest piece of evidence is the statement given by Dorian Nakamoto at the time of the interview: “I am no longer involved in that and I cannot discuss it. It’s been turned over to other people. They are in charge of it now. I no longer have any connection.”

This statement was later confirmed by police. However, in a later interview, Dorian denied being the creator and said that his quote was taken out of context. He apparently though that the interviewer was talking about his classified work for the U.S military. He would also deny having anything to do with Bitcoin, saying he had just recently heard of it. The mystery was deepened even further when on March 7th Satoshi Nakamoto’s profile on the P2P Foundation posted: “I am not Dorian Nakamoto.”

Other issues remain with the Newsweek story, such as why the writing style and skill of Dorian Nakamoto is so much different than the Bitcoin creator’s writing skills. Satoshi Nakamoto wrote in a very technical tone and with very good English skills. As evidenced by earlier emails and letters written by Dorian, his writing is nowhere near as good. Because of these issues, many in the Bitcoin community met the article with skepticism. Many were also concerned with Dorian Nakamoto’s lack of privacy and exposure which, regardless of whether he really created Bitcoin, may put him in danger.

While many may still be inclined to believe that Dorian Nakamoto is the creator of Bitcoin, it seems as though he is serious about denying it. A law firm hired by Dorian Nakamoto released a statement that said: “I did not create, invent or otherwise work on Bitcoin. I unconditionally deny the Newsweek report.” The fact that Dorian hired a law firm may mean that he is contemplating action against Newsweek. Regardless of what happens, the mystery of Bitcoin’s anonymous creator will continue on.

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Bitcoin as a Solution to E-Commerce Pain

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Bitcoin as a Solution to E-Commerce Pain

Written By: Ashok Misra of Alina Consultants

Introduction

Bitcoin as a Solution to E-Commerce Pain

Bitcoin is a decentralized virtual currency whose valuation and use has grown dramatically since its inception in January 2009.

Some thinkers view bitcoin as a viable alternative to sovereign currencies; however, e-commerce was the original use case for bitcoin in Satoshi Nakamoto’s epic paper in 2009 on the proposed “Peer to Peer” cash system.

Unfortunately, a lack of authoritative articles exist on the precise benefits of bitcoin vis-a-vis payment methods involving credit cards for purchase of goods and services on the Internet.

In this paper, we address in practical terms the precise advantages of using bitcoin as a payment method for Customer Not Present (CNP) transactions made over the Internet.

E-commerce Payments (“e-payments”)

E-payments are digital payments for goods and services that are made over the Internet on online merchant websites. E-commerce serves multiple vertical lines of business for physical and digital goods. Dominant verticals in shipped physical goods purchased over e-commerce channels by retailers are books, apparel, and electronics. Examples of digital goods purchased over the Internet are music, streaming media, and e-books.

Some key drivers for e-commerce are: residential broadband penetration; access to consumer payment instruments suitable for online commerce; and distribution and delivery channels for physical goods.

The worldwide e-commerce market has grown by 20 percent year after year for the last several years. Global B2C Ecommerce Sales are projected to hit USD1.5 Trillion in 2014, driven by growth in emerging markets.

The more mature e-commerce markets such as the United States, the UK, and Germany, where citizens enjoy a strong purchasing power and widespread access to broadband Internet, see about 10 to 15 percent of online share to total retail trade, whereas less mature e-commerce markets such as Poland see only about 3.8 percent of online retail volume to total volume. However, many regions such as Poland are witnessing a tremendous rate of growth in e-commerce. Poland, for example, has a population of 38.5 million, out of which 26.2 million are Internet users and 12.6 million are online shoppers.

Payment Methods

Payment methods used by consumers for online purchases vary considerably by region, depending upon their availability and consumer attitudes. They expose a unique set of advantages and risks for online commerce. They can be broken down as follows:

Credit and Debit Cards

Credit and debit cards were originally intended for “card present” merchants. The cards were designed for physical use at the point of sale, where the magnetic stripe card is “swiped” and read by a terminal. The cardholder is authenticated by methods such as a wet ink signature on a printed receipt, a signature captured on a touch sensitive POS screen, a secret PIN number, etc.

Such cards have been adapted since the birth of e-commerce by merchants and processors for use on the Internet. The number on the card is entered by the consumer on a web form during the order process. Authentication is carried out using information such as billing zip code, expiration date, etc.

Fraud with credit cards is a serious concern on account of the weak authentication and inherently insecure mechanics. However, it must be noted that consumers are typically protected against fraudulent purchases on their credit cards. For transactions made in a “Card Present” manner, the consumer’s bank bears the fraud loss, whereas in the e-commerce CNP use mode, the online merchant bears the fraud loss.

Security for credit cards in a “Card Present” environment has improved progressively. That notwithstanding, there have been recent cases of large breaches involving retail stores. The United States lost 5.33 billion USD to fraud in 2013. This was up 14.5% from the previous year. Of the 5.33 Billion, issuing banks in the United States lost 3.41 billion USD. The United States accounted for 47.3 % of global card fraud losses on only 23.5% of total volume.

All industrialized countries outside of the United States have migrated magnetic stripe credit cards to EMV1 technology. EMV cards have a microprocessor chip embedded in the plastic that communicates with the POS device. It is possible to embed the EMV chips form factor on mobile phones to communicate with proximity readers. EMV cards are virtually invulnerable to tampering, duplication, etc. Banks and card brands in the United States have announced their intent to move to EMV technology, and rollout is currently underway in a phased manner. It is expected that fraud on e-commerce channels will increase after the EMV rollout in the United States as fraudsters typically attempt to exploit the weakest attack surfaces.

It must be noted that EMV technology does not impact the mechanics of the e-commerce use case. Credit card numbers will still have to be entered on websites in the same manner as they are for magnetic stripe transactions.

Alternative Payment Methods

Credit card penetration in some regions (like the European Union, for example) has been limited due to negative sentiments on the part of consumers with the use of credit payment instruments.

That notwithstanding, e-commerce growth in several of these regions has progressed, as non-card payment tenders have been adopted. Examples of alternative payment methods are

Direct Debit (Germany), Ideal (Netherlands), and Boleto (Brazil). Alternate payment systems generally have more friction in purchase paths than credit cards. This friction usually stems from more robust authentication.

Main Players in Credit Card E-commerce Payments

Consumers are issued payment instruments by their card issuers. These instruments are credit or debit cards.

Issuers are banks that provide credit or debit instruments to consumers.

Merchants are businesses that sell goods or services to consumers.

Acquirers are banks that underwrite merchants.

Brands are the associations, such as Visa, MasterCard and Discover, that maintain the network of Issuers and Acquirers. Visa and MasterCard are now public companies.

Payment Service Providers (PSPs) are entities who provide transaction and settlement services for merchants.

Costs of E-commerce Payments with Credit Cards

The costs of e-commerce payments are borne primarily by merchants. Whereas there has been regulation that precludes merchants from directly passing on credit card processing costs to consumers, one can conjecture that costs for payment processing are reflected in SKU prices.

Costs for credit card processing are broadly divided into two categories:

  • Non-negotiable costs
  • Negotiable costs

Non-negotiable costs are pass-through costs levied by the brands and collected by acquirers. These costs make up more that 85 percent of total payment acceptance costs. The largest component of the non-negotiable cost is credit card interchange. Credit card interchange varies depending upon the type of card product. For example, an airline mileage card may attract 50 basis points of additional interchange fees over a non-rewards card. Other non-negotiable fees are assessments, cross-border fees, etc.

Negotiable fees are service fees paid by merchants to gateway service providers. Merchants with smaller processing volumes may be set up by their processor to pay a single-blended fee that includes interchange and gateway service fees.

Typical Process Flow for CNP Commerce

Screen Shot 2014-11-13 at 8.45.04 AM

  1. Consumer visits merchant website and loads a shopping basket.
  2. Checkout flow captures payment information and shipping address.
  3. Merchant sends authorisation to credit card gateway for final amount with shipping and handling.
  4. Credit card gateway routes transaction to consumer’s credit card issuer and obtains authorisation.
  5. Merchant indicates to consumer that the process is completed, and goods will be shipped or available for download.
  6. Merchant sends a settlement instruction to credit card gateway, which, in turn, routes it to the issuing bank.
  7. Merchant gets paid by acquirer.
  8. Transaction shows up on customer’s billing statement.

Bitcoin Basics

Bitcoin is a software-based online payment system described by Satoshi Nakamoto in 2008 and introduced as open-source software in 2009. Bitcoin payments are recorded in a public ledger using its own unit of account which is also called bitcoin. Payments work in a peer-to-peer manner without a central repository or single administrator, which has led the US Treasury to call bitcoin a decentralized virtual currency. Although its status as a currency is disputed, media reports often refer to bitcoin as a cryptocurrency or digital currency.

Bitcoin is created as a reward for payment processing work in which users offer their computing power to verify and record payments into the public ledger. Called mining, individuals or companies engage in this activity in exchange for transaction fees and newly created bitcoin. Besides mining, bitcoin can be obtained in exchange for fiat money, products, and services. Users can send and receive bitcoin electronically for an optional transaction fee using wallet software on a personal computer, mobile device, or a web application.

E-commerce Purchase Paths Using Bitcoin

E-commerce purchase paths using bitcoin as a payment method can be developed using two basic methodologies, namely:

  1. Purchase paths using a Bitcoin processor
  2. Purchase paths made without the use of a Bitcoin processor

Bitcoin Processors

Bitcoin processors such as Coinbase and BitPay offer an abstraction layer into Bitcoin. A merchant desirous of accepting bitcoin from consumers, but at the same time desirous of being paid in fiat currency, could integrate with a service like BitPay. From the consumer’s point of view, the order flow would be exactly similar to a purchase with a credit card until the point of payment. Upon reaching the point where the payment is to be made, the website generates and displays a Bitcoin public address for the merchant. This Bitcoin address may be rendered in a QR code. Also, the order amount is converted to BTC and displayed to the consumer. The processor determines the price point to BTC conversion rate based upon industry real-time analytics. The consumer pays for the order amount using his or her Bitcoin wallet. BitPay provides the technical implementation to notify the merchant’s website when the payment has been completed as a signal to initiate delivery of the purchased goods to the consumer.

Merchants who choose to accept and hold bitcoin2 do not technically need a payment processor. In the direct integration method, the merchant creates a unique Bitcoin address for the customer’s shopping cart. The customer pays for the order total using his or her own wallet.

The merchant polls the Bitcoin network periodically to determine if the payment is completed, after which goods can be delivered.

Pain Points Solved by Bitcoin

Receipt of Funds by Merchants.

Credit Cards

With credit card payments, consumers see the funds withdrawn from their account (or credit floor reduced) immediately after the e-commerce payment has been completed. As described in the flow diagram, the merchant is paid through a settlement process that takes from one to several days. During the time that the funds are in transit, the merchant is technically forced to extend credit to her acquirer. It is likely that merchants do not enjoy the same credit on their account payable vendors.

Bitcoin

As we have seen, bitcoin payments are instantaneous3 for both parties, and there are no settlement delays involved. Thus, the funds disbursed by consumers are available immediately to the merchant.

Credit Card Chargebacks

A consumer may dispute a merchant charge within a certain window after a transaction is

completed. A dispute may arise due to non-receipt of goods or services, fraud, an incorrect amount billed, etc. The consumer’s transaction is temporarily reversed at the initiation of the dispute process. During this time, the acquiring bank “funds” the disputed amount to the consumer. Thereafter, there is a resolution process wherein the consumer and merchant present documentation to resolve the dispute. If the transaction is resolved in the consumer’s favor, the charge is reversed permanently. If resolved in the merchant’s favor, the temporary adjustment made to the consumer at the start of the dispute process is reversed.

Bitcoin

With bitcoin, there is no guarantor for transactions. No party can reverse a completed payment. From a merchant’s point of view, there is no exposure to disputes that will reverse payments.

Merchant Credit Card Acceptance Underwriting

As described earlier, a merchant desirous of accepting credit cards needs to secure a relationship with an acquiring bank. This could involve an “underwriting procedure,” as the acquiring bank guarantees payments for the merchant. Should the merchant become insolvent, it is the acquiring bank who protects the payment in the event of consumer disputes. Merchants who do not have a processing history, such as startup businesses, usually face difficulties during the underwriting process for obvious reasons.

Bitcoin

With Bitcoin there is no centralized banking institution involved. The underwriting process is eliminated completely. Also, merchants who do not have a business history can begin payment acceptance immediately.

Credit Card Security

Security with payment cards relies upon protecting the credit card payment data (16-digit credit card number) and authentication data (billing address, expiration date, cardholder verification codes, etc.).

The Payment Card Industry Data Security Standard (“PCI DSS”) was developed to encourage and enhance cardholder data security and facilitate the broad adoption of consistent data security measures globally. PCI DSS provides a baseline of technical and operational requirements designed to protect cardholder data. PCI DSS applies to all entities involved in payment card processing—including merchants, processors, acquirers, issuers, and service providers, as well as all other entities that store, process, or transmit cardholder data.

Bitcoin Security

Attack surfaces for Bitcoin are primarily at the endpoints. There is no useful information for a hacker that can obtained by observing transactions in flight. The Bitcoin protocol, in fact, relies on transaction information being public.

Since the consumer does not “deposit” symmetric payment and authentication information to the merchant, there is no way for a maleficent agent who is privy to the communication channel or to the merchant’s infrastructure to use that information to exploit the consumer at some later time.

At the merchant end, there is no need to maintain any sensitive information on front-end webservers. The infrastructure to handle the merchant’s bitcoin obtained from consumer payments can be completely delinked from the commerce website.

There have, in fact, been recent incidents where bitcoin have been stolen. It is worth emphasizing that these cases without exception involved theft at end-point infrastructure. Thus, they were not attacks on the protocol. There are various technologies (out of the scope of this article) to secure bitcoin on hardware appliances.

Caveats

Volatility

Screen Shot 2014-11-13 at 9.07.10 AM

As seen in the chart above, price fluctuations in the bitcoin to USD rate on bitcoin exchanges vary considerably over even short periods in time. We have seen bitcoin highs and lows in the range of $1,200 to $100 in the last twelve-month period. The volatility is likely due to the fact that currently bitcoin purchase is driven largely by speculation and there is no robust way of evaluating an appropriate USD to BTC rate. Also the perceived value of the cryptocurrency fluctuates with news and announcements from financial regulators on the manner in which they intend to regulate bitcoin. This volatility is not conducive to e-commerce and some stability needs to set in for mass adoption.

Consumer Protection – There are several cautionary advisories from government agencies about the risks associated with virtual currencies. It is certainly true that Bitcoin offers no protection for consumers, and it is unlikely that governmental consumer agencies will protect consumers for bitcoin purchases in the same manner as they do for regular bank instruments. That notwithstanding, from the consumer risk management point of view it brings up the question if the higher reflected sku costs associated with credit card transactions are proportional to the protection offered. If the costs of protection were offered using free principles, the costs would likely be lowered. For low value transactions over the internet, consumers may choose to embrace the risks associated with bitcoin for lower SKU price points, particularly for repeat purchases from the same merchant.

It is conceivable that trusted third parties could broker bitcoin transactions and offer consumer insurance. The Bitcoin protocol supports the contract to enforce financial agreements; Bitcoin supports contracts using the same decentralized and distributed architecture used for financial transactions. These constructs can be used to reduce the risks of dealing with unknown entities in commerce.

Legal Issues – Needless to say there are serious risks on further growth of bitcoin on account of the uncertain legal status of bitcoin as a financial tender type. Some jurisdictions have deemed bitcoin to be a commodity whereas others treat it as currency. Some countries have outlawed bitcoin altogether and treat the possession of bitcoin as a criminal activity.

At the time of writing the United States treats bitcoin as a commodity. Any agency involved in the transfer of bitcoin with fiat currencies comes under the purview of banking and money laundering laws and requires licensing in every state, thus there is a high entry bar for exchange activities. For consumers, the act of purchasing a commodity in bitcoin is a taxable event. This treatment certainly hinders wider adoption.

Regulators clearly see the bitcoin features of anonymity, decentralization and lack of a central control as detrimental to control. However, it is fair to assume that a complete ban on bitcoin would continue to take place only in totalitarian jurisdictions. In western countries, it is unlikely for governments to impose a categorical ban on bitcoin. It is more likely that tax reporting, VAT, etc. would be based on some kind of honor system. There are some successful examples of parallel currencies that are recognized as legal tenders. An example is the WIR franc developed in Switzerland in 1934 and still in use at this time.

Conclusion

Bitcoin offers a unique and powerful payment mechanism for all participants in e-commerce payments. It eliminates many of the inefficiencies present in traditional web payments. Bitcoin is not purely an academic subject anymore. Some mainstream web properties such as Expedia, Overstock.com, Dell, and WordPress have been accepting bitcoin as a form of payment. Bitcoin has an extremely low entry bar and should expect its usage to grow rapidly

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Exactly how Koinify and also Melotic Plan to Bring Order to Crypto Crowdsales

Though the crypto 2.0 segment of the bitcoin community is maturing, the part of the market mostly worrieded about non-financial or state-of-the-art blockchain applications has actually had a hard time to develop a stable industry for its jobs.

In the absence of strong VC passion, or perhaps in the spirit of pushing the borders of innovation, many decentralized applications (DApps) are looking for to money themselves with what could probably be the blockchain’s most convincing use past currency, decentralized product backing in the capillary of Kickstarter.

DApps look for to harness the capability of blockchains to produce tokens, which could then be distributed as well as made use of to incentivize the product’s advancement and also fostering. One of the most notable instance might be MaidSafe’s $7m crowdsale, which this summer season was welcomed with dispute and also uncertainty in both the mainstream media and the larger area as it experienced market forces and also liquidity concerns.

Also those which are trying to supply market options acknowledge that in bush West of bitcoin, DApps are still a relatively undiscovered territory.

“If you were simply to check out the crypto 2.0 area and see all the properties individuals are noting on Counterparty or NXT or any one of these 2.0 platforms, the spirit of decentralization is openness and openness,” claimed Jack Wang, creator as well as CEO of electronic property liquidity exchange Melotic. “The other hand is there’s a great deal even more capability for people to push undependable items.”.

To solve this market trouble, Wang as well as his company are going into a new collaboration with DApp crowdfunding platform Koinify. With each other, Koinify and also Melotic are seeking to curate an industry that can enable the successful launch of brand-new products as well as the ultimate exchange of their tokens on a free market.

“Formerly when you acquired something in Kickstarter, it was merely a contribution or acquisition, so there was no liquidity,” Koinify CEO and creator Tom Ding said. “In a token economy, you acquire an even more lasting charity, you could support a software however you could additionally have leaves.”.

Eventually, both platforms think that with each other they could form a decentralized AngelList, one that allows neighborhoods to sustain as well as grow ingenious jobs, while enjoying new freedoms over the money they opt to offer.

Decreasing the signal-to-noise proportion.

Both Ding and Wang spoke to CoinDesk regarding the partnership, acknowledging that their main ambition is to bring clarity to an already dynamic crowdsale industry, one that they argue has been turning away potentially interested participants.

“The trouble is the signal-to-noise proportion is actually high,” Ding claimed. “There are way too many noises as well as it comes to be truly tough for people who wish to spend or acquire great, high-grade tasks, symbols, to set apart a great from a bad one.”.

Ding stated that Koinify will certainly likewise look for to include openness to the DApp funding process, making certain that tasks are vetted and appropriately incentivized.

“If the task markets out, makes $6m and also acquired all of it in money or bitcoin, they may not have the incentive to provide an item,” Ding continued. “Component of our job is to help them establish points like multisig as well as create milestones-based vesting to make certain that developer rewards are in line with exactly what they assured.”.

Wang kept in mind that Melotic objectives to supply the 2nd component of this pipeline, making sure that there is liquidity in the DApp exchange markets by trying to find funding sources for projects, including larger sources of resources.

Pursuing self-regulation.

Ding additionally noted the current rumors that the US Securities and Exchange Compensation (SEC) could be taking a closer take a look at the crypto 2.0 industry, insisting that up until formal guidelines are much more clear, the room must try to apply its own consumer securities.

“I assume even a few of the regulatory reports just recently might be a favorable thing because it compels folks to assume harder,” he proceeded. “Is it all right to announce the concept and also begin elevating cash? Or should developers deliver something a lot more strong?”.

For now, he claimed, this need for self-regulation implies that Koinify must be selective concerning the tasks it onboards, even if that needs it to come to be a more centralized manager of its system.

“If you have a minimal choice, the quantity of resources that comes into those markets is excellent quality,” he said. “When you have a really competitive market, with an actually high standard or jobs coming in, the problem will certainly solve itself. We wish to motivate skilled designers right into decentralized applications.”.

Ding suggested that Koinify will likewise seek to educate designers, investing time and also sources now to help them browse the facilities for creating DApps.

Initial launch announced.

Koinify and Melotic will begin testing their market approach with the launch of Koinify’s first task on 1st December, the token sale for decentralized social messaging solution Treasures, which was revealed at Inside Bitcoins Tel Aviv this October.

Ding used Gems as an instance to show how Koinify intends to sheppard projects to successful launches, noting that the project satisfied an estimated 30– 40 persistance inquiries that covered everything from innovation to group structure.

“We had a great deal of conversation regarding just what is a fair design for dispersing Gems symbols, then we worked on developing the turning points that Treasures ought to provide,” he said, adding that Koinify even flew to Israel to meet with the Gems team.

Ding suggested that Gems’ very first milestone will be the iOS model of its application, the 2nd its Android model and also the third the shipment of its ads system. As soon as reached, each turning point will certainly allow Treasures to get a new portion of the funds it elevates in its pre-sale.

“We can have a community-based vote where unless you supply a strong beta variation, we will not release the bitcoin that you’ve raised,” Ding included, speculating on exactly how Koinify might deal with bad actors on its platform.

High-stakes launching.

Though both Ding and also Wang spoke in detail about exactly how their systems could possibly disrupt or supplement standard VC financing, they both acknowledged that the threats will be high for both of their brand names early on.

“The stakes are a lot greater,” Wang clarified, “since there are considerably less jobs. However, we’re searching for out if companies could gain additional worth from token sales that permit their company model to alter and enable them to money their suggestions as well as principles different from a VC design.”.

Ding went on to recommend that several of the projects it is talking to are seeking to elevate funds both from VCs and from token sales, keeping in mind that there is an idea that an effective token sale can even raise VC passion.

Nevertheless, both pressured that, meanwhile, token sales offer designers with a luring method to grow their userbase, something Ding anticipates will be an effective reward that will certainly allow Koinify and Melotic to grow.

“Every start-up understands that the hardest part is absolutely no to 1,000 users; 1,000 to 10,000 users. 10,000 customers could quite quickly come kind this type of pre-sale. If you could obtain your initial 10,000 users to crowdfund you, that’s most likely a benefit to improve.”.



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In conventional fiat cash systems, governments simply print more money when they should.

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In bitcoin, cash isn’t really printed at all– it is uncovered. Computers around the world “mine” for coins by taking on each various other.

So, Exactly how Does Mining Occur?

People are sending bitcoins per various other over the bitcoin network continuously, yet unless somebody keeps a record of all these purchases, no-one would have the ability to track which had paid what. The bitcoin network take care of this by accumulating each one of the purchases made during a set period right into a listing, called a block. It’s the miners’ task to validate those transactions, as well as compose them right into a general ledger.

Making a Hash of it

This basic journal is a lengthy listing of blocks, referred to as the block chain. It can be used to discover any transaction made between any kind of bitcoin addresses, at any kind of point on the network. Whenever a new block of deals is developed, it is added to the block chain, producing an increasingly extensive list of all the transactions that ever took place on the bitcoin network. A constantly updated duplicate of the block is provided everyone and gets involved, to make sure that they understand exactly what is going on.

Yet a basic ledger has to be relied on, and all of this is held electronically. Exactly how can we make sure that the block chain stays in one piece, and also is never tampered with? This is where the miners can be found in.

When a block of transactions is developed, miners placed it with a process. They take the information in the block, as well as use an algebraic formula to it, transforming it right into something else. That another thing is a much shorter, seemingly random sequence of letters and also numbers known as a hash. This hash is kept together with the block, at the end of the block chain.

Hashes have some intriguing properties. It’s very easy to produce a hash from a collection of data like a bitcoin block, however it’s virtually difficult to exercise exactly what the data was merely by looking at the hash. As well as while it is quite easy to generate a hash from a huge amount of information, each hash is one-of-a-kind. If you transform simply one character in a bitcoin block, its hash will certainly alter entirely.

Miners do not merely use the purchases in a block to produce a hash. Other items of information are made use of too. One of these items of data is the hash of the last block kept in the block chain.

Because each block’s hash is made making use of the hash of the block just before it, it ends up being a digital variation of a wax seal. It verifies that this block– and every block after it– is legitimate, since if you tampered with it, everybody would certainly recognize.

If you tried to fake a deal by transforming a block that had actually already been stored in the block chain, this would certainly transform that block’s hash. If an individual examined the block’s authenticity by running the hashing feature on it, they would certainly find that the hash was various from the one currently saved together with that block in the block chain. The block would certainly be phony!

Since each block’s hash is used that can help generate the hash of the next block in the chain, tampering with a block would certainly additionally transform the following block’s hash. So damaging a block would make the subsequent block’s hash incorrect, as well. That would continue completely down the chain, throwing everything out of whack.

Competing for Coins

So, that’s how miners ‘seal’ a block. They all compete with each various other to do this, using software created especially to mine blocks. Whenever somebody successfully produces a hash, they get a benefit of 25 bitcoins, the block chain is upgraded, as well as everybody on the network reads about it. That’s the incentive to keep mining, and also keep the purchases working.

The problem is that it’s really simple to generate a hash from a collection of information. Computers are truly efficient at this. The bitcoin network has to make it harder, or else every person would be hashing hundreds of purchase shuts out each second, as well as all of the bitcoins would certainly be extracted in minutes. The Bitcoin protocol intentionally makes it harder, by introducing something called a ‘proof of work’.

The Bitcoin process will not simply approve any sort of aged hash. It demands that a block’s hash needs to look a specific way; it needs to have a particular number of zeroes at the beginning. There’s no chance of informing just what a hash is visiting resemble before you make it, and once you consist of a new piece of data in the mix, the hash will be absolutely various.
Miners aren’t supposed to meddle with the purchase information in a block, but they need to change the information they’re using to produce a various hash. They do this using one more, arbitrary item of data called a nonce. This is utilized with the deal data to create a hash. If the hash does not fit the required style, the nonce is transformed, and also the entire point is hashed once more. It could take several attempts to locate a nonce that functions, and all the miners in the network are attempting to do it at the exact same time. That’s how miners gain their bitcoins.

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Halsey Minor’s Bitreserve

Halsey Minor

Halsey Minor’s Bitreserve Is Designed To Fix Bitcoin Volatility, But It Is Doing Much More

by Ian DeMartino @ 2014-11-21 09:40 PM

When I started writing for CoinTelegraph, Bitcoin was around $800. With my modest lifestyle and three roommates, that was enough for roughly six weeks worth of rent. Today, one Bitcoin wouldn’t cover one month’s rent. Luckily for me, CoinTelegraph pays in Bitcoin but bases the amount on its current USD value, but still, if it wasn’t already obviously apparent to me, I would have quickly learned that Bitcoin was not a safe place to hold money that might be needed for rent or bills.

Writing, contrary to what some may believe, is not a lucrative career. Sure, some people get wealth and accolades from it, but most aspiring writers fail to make ends meet either because they burn out or due to a lack of motivation, discipline or talent, and end up delivering pancakes at IHOP. While the former possibility would be nice, it is rare enough that success is usually measured by simply not falling into the later.

I mention all this not to evoke the writing faux pas of starting this article talking about myself, but to simply point out that I am Halsey Minor’s target audience with Bitreserve. If I kept the majority of my savings in Bitcoin, I would be at risk of losing half of my earnings and could easily find myself in the real life hell that is “Kids Eat Free” Tuesdays at IHOP.

Bitcoin evangelicals can scream all day that “one bitcoin equals one bitcoin” and that is how we should think of it, but when one bitcoin also equals either six weeks or less than three weeks of rent, the reality stands in stark contrast to the platitude.

Halsey Minor’s Bitreserve is meant to fix that. While I think most everyone would agree that Bitcoin is a betterinvestment than the dollar, a usable currency isn’t the same thing as an investment. Any sane Bitcoin advocate will tell people not to invest what they cannot afford to lose, but that ignores the huge number of people who aren’t in a position to invest anything. If the Bitcoin community wants the masses to get on board, it has to be financially viable for them to do so.

Bitreserve has many functions. Most of them are by design, but a few of the use cases companies coming up with using the open API surprised even the Bitreserve team. The main function though, the pillar that Minor is clearly most proud of, is the ability to let people use the Bitcoin network and all the advantages that entails, without having to deal with volatility.

When you sign up for Bitreserve, you are presented with six cards, five representing one of the major currencies Bitreserve supports and one representing Bitcoin. Users can deposit Bitcoin into any of the cards and Bitreserve will hold that amount of money in their system and its connecting, transparent “ReserveChain.” Every Dollar, Euro, Yen, Yuan or Pound held by users in the Bitreserve system is backed by real fiat held by Bitreserve. If they say you have $50, they actually have $50 set aside for you, and it can be tracked on the Bitreserve system. It isn’t loaned out to another user or invested in some risky derivative like it would be at a bank.

What this means is, someone like myself can hold dollars (or euros or whatever currency I want) on the Bitcoin network. I can send that amount of dollars, regardless of fluctuations in Bitcoin’s price, at any time through the Bitcoin network. Bitreserve simply sends the Bitcoin from their own reserves, then buys it back 20-30 seconds later with the money I spent. I tested it out on a merchant that uses Coinbase as its payment processor and noticed no major difference between Bitreserve’s transaction times and my normal wallets.

Ultimately, it is about the convenience of being able to use the Bitcoin network without having to make a currency conversion every time you do it, or having to worry about Bitcoin volatility when you have a significant amount of your disposable income in it.

“When I [go] to England, I do what just about everyone does, for the vast majority of purchases, I pull out a credit card and I don’t think ‘oh gosh, I’m going to swipe this and do a foreign currency exchange’ my bank just handles it for me. I keep money in the form I want, I keep it in my home currency and everybody has a home currency.”

If the majority of people are going to start using Bitcoin, they need a way to put a significant amount of money into it without worrying about it disappearing the next day. That is the advantage of holding money in the Bitreserve system.

“[I]f I hold a thousand dollars, and my rent is a thousand dollars, I don’t have to worry about being evicted because I held a thousand dollars.”

One could say that people should only put what they can afford to lose into the Bitcoin system, but that kind of barrier to entry does not lend itself to commerce for the vast majority of the population.

“There is a certain amount of elitism [in the Bitcoin community] that I’m not sure people are even aware of, that people around the world can afford to have money in a currency that goes down in value [quickly]. I mean, if you are a working mother of three and you are trying to raise your kids and you live on a budget [you can’t afford that]. Most people actually spend more than they make, and there is a sort of thing in Bitcoin that [people feel] like ‘well, that’s your problem, who cares if it goes up and down? You should use it anyway’ and it’s not practical. People do need the money they make.”

Bitreserve was born out of Minor’s own struggles with finances and financial institutions. His financial past is well documented and there is no reason to re-hash it at length here. But the short of it is he founded C|Net, one of the first profitable publicly traded businesses on the internet. He then was an early investor in SalesForce in 1999 and soon was worth billions. Some bad investments, and two bank failures later he was bankrupt in one of the tech world’s fastest and most public richest to rags stories.

While I do not know what Minor’s day-to-day life was at the time, I don’t know how comparable his struggles were to the struggles of “normal” people trying to make ends meet, it is clear to me, even in our relatively brief hour long conversation, that his fall from grace has a lot to do with what he is trying to accomplish with Bitreserve. Undoubtedly, Bitreserve is his comeback company, but it also seems like a personal crusade for him. While there are salacious stories about art addictions and other contributing factors, it is clear that he blames at least part of his financial issues on the banks, having one fail while they are building a hotel for you will do that and so it isn’t surprising to see him use Bitcoin as the rocket ship meant to return him to grace. He made millions by capitalizing when the Internet opened up media to the world, how much can he make as Bitcoin opens up the financial world in a similar way?

More than that though, it seems that his personal struggles made him realize how important a stable financial nest egg is. How the vast majority of people out there cannot afford to have their currency drop drastically in value, even if a rebound or massive spike is promised right around the corner. That is something he may have had trouble seeing, if he still had the kind of finances that make rumors of a fine art “addiction” possible. This is something that he is acutely aware of.

“I wouldn’t wish [my financial issues] on anybody and I wouldn’t wish it on myself. But in the end, that doesn’t mean it wasn’t extraordinarily valuable to me in some way. This company and many of its innovations are both a collection of things I learned along the way and stuff that I, being ‘billionaire Halsey Minor’  would have never been able to appreciate.”

But as it turns out, Bitreserve has more functions than just letting people use the Bitcoin network without worrying about volatility. Minor clearly has no love for the banks and doesn’t want Bitreserve to become one. To that end, they created the ReserveChain and BitLedger. This allows for complete transparency for users who have their money in the Bitreserve system. Essentially, they are extensions to the Bitcoin blockchain, letting users see how much money they hold, what currencies they hold it in, when they bought it and what exchange rate they got at the time. Eventually, as the reserve outpaces the liabilities, some of it will be invested in low-risk investments like government bonds. But again, users will be able to see exactly what security was bought, how much was paid for it, when it was bought and where it is presently.

This was designed to give Bitreserve users a way to know, unlike the customers of the banks that lost untold billions, what is going on with their money and not just build trust through transparency, but make trust an obsolete construct in the financial world.

It accomplishes that. But what it also has ended up doing is open up a whole slew of tools for companies using the API to make their companies transparent as well.

“We actually have some next generation exchanges. We provide transparency for them, they are able to show that they are holding either dollars or bitcoin inside of us [. . .] [F]or the first time [we] engineered a company whose business processes can be written out in real-time.”

Which could have implications beyond just Bitreserve and Bitcoin. Minor told me that over 100 fiat currencies are coming to Bitreserve over the next year, with the first of those set to roll out “very soon” according to Bitreserve’s press representative. This would enable companies, not just cryptocurrency companies, around the world to prove their reserve in an open and transparent way to their customers and investors.

“[O]ne company [that approached Bitreserve,] their business partners wanted to know (A) the money they are putting in is safe and (B) they want transparency [. . .] Investors are using sort of the albatross of the non-bitcoin system, everyone wants to see what is going on, and we actually provide that. No bank does that. There is no bank system for transparency. As it turns out, there are all kinds of businesses that actually want to have transparency as part of their business model.”

Ultimately, Minor hopes that this transparency will be adopted by more companies and will eventually “allow different kinds of financial systems to exist” based on the technology Bitreserve provides.

“This verifiable transparency will enable different kinds of business models than [exist] today.”

In regards to its use case in the real world, as I mentioned, I am pretty much the archetype of the market Bitreserve wants to hit: The person who is interested in Bitcoin and is tech savvy enough to understand it, but lacks the financial stability to go all-in on the currency while being able to sleep at night. I have already begun using Bitreserve, and I am able to keep more money right on the periphery of the Bitcoin market by storing it in fiat in the Bitreserve site. There I can keep my “maybe for savings, maybe for spending” money in dollars where I can feel safe about it, but can easily also use it to buy things with Bitcoin (and all the advantages that brings) or quickly invest it back into Bitcoin when I am feeling more bullish on the market. If an unexpected expense comes up, I can still quickly turn it back into Bitcoin and then sell it through Coinbase and Circle and pay rent or bills with it, but in the meantime, I don’t have to worry about it losing value and losing my meager savings.

I am pretty certain that in ten years $100 will be worth less than it is today, but I am more certain that money I save for rent now will still be enough for rent at the end of the month, that can’t be said for Bitcoin. Minor wants to make Bitcoin usable for people other than speculative investors and people willing to gamble on the price. These tools do make it possible, the only question is, will the advantages of Bitcoin, other than the speculative ones, be enough to tempt customers away from traditional financial institutions? Minor thinks so.

Halsey Minor is more than just an savvy investor who hit it big in the technology world. He was a pioneer in the internet space and was one of the first people to prove it could be profitable. Entering into the Bitcoin space, he says the similarities to the early internet days are impossible to ignore. I don’t normally quote at length but his comparison is worth reading in full.

“I have to tell you, this whole bitcoin thing is deja vu all over again. Everyone said ‘oh the internet is for porn’ and ‘oh credit cards are going to get stolen.’ It was just one bad [story after another]. Even in  ’98, the stories about eBay were ‘somebody is selling their kidney on eBay.’ It was one salacious thing after another.

The eBay thing was interesting because when that went nationwide, it was the best thing that happened to them because what it says is: no matter what you want to buy, even if it is a kidney, it is available on eBay.

So this has all the same kind of unsettling beginnings where  people are drawn to [certain things]. The reality was that the first business model on the internet was porn, but that doesn’t mean the internet was designed for porn, obviously. And while people may have used Bitcoin for illegal purposes, it isn’t designed for illegal purposes anymore so than the dollar, maybe less so.

It has the same trepidation and same kind of early negativity that the internet itself had, and it shares with the internet that same sort of notion of being indestructible. [With] the internet, no one can shut it down and no one can stop you from getting on it. With Bitcoin, basically no one can shut it down and no one can stop you from getting on it. And it is that same sort of indestructible nature that means it is something that is going to stick around and is something that is worth paying attention to.”

Minor was able to navigate the treacherous waters of the early internet market and its proceeding bubble and came out on top. As this market matures, regardless of the future success or failure of Bitreserve, it is worth paying attention to what he has to say. He left me with one final thought on the Internet and what it can teach us about Bitcoin.

“Cool stuff happens and you generally want to adopt it when it does”



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