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Blockchain announced today that it has secured a record $30.5m Series A funding deal, co-led by Lightspeed Venture Partners and Wicklow Capital.


The figure is one of the largest ever single investments in a bitcoin company, after BitPayannounced a new record with its $30m Series A round in May and Xapo achieved the gold standard for total funding with $40m over two rounds in Marchand July.


Blockchain is the world's most popular bitcoin wallet provider, search and technical information source with 2.3 million wallet accounts and a total $26bn in transaction volume.


Today's news marks its first funding round from external investors. It was previously bootstrapped by founders including Roger Ver, who remains with the company.


Blockchain president Peter Smith said:

Quote:"The company has grown exponentially in every way over the last 18 months. We are honoured to add investors and partners to the team with deep expertise in financial services and consumer technology."

Future Plans
According to a report in the New York TimesLightspeed partner Jeremy Liew will take a seat on Blockchain's board.
Blockchain will use the extra funding to grow its product and engineering teams, and expand and invest in developing markets. Wallet services would be the "central nexus of value creation" in the digital currency industry, said Liew.


Founder and CEO Nicolas Cary told CoinDesk he was looking forward to the opportunities such an investment would bring. He said:


Quote:"This is the first outside capital in Blockchain. We've accomplished a lot with a little. So now we're even more excited about what we can do. We have a very compelling product roadmap and we're eager to share it with our users over the coming months."

Blockchain produces software tools for merchants to accept bitcoin, and acquired bitcoin price and data provider ZeroBlock last December. It also manages the premium domain name bitcoin.com, which it uses to introduce bitcoin to total newcomers.


Key bitcoin player
The announcement from one of bitcoin's oldest and more respected service providers is bound to warm hearts in the bitcoin world, amid news dominated recently by price drops and market anomalies.


Blockchain is notable for practicing the cryptocurrency ethos it preaches. Its mission is equal parts growth of its own business and building an international bitcoin ecosystem.


Fervently decentralized and traditionally bitcoin only, Blockchain's international staff have received salaries in bitcoin and the company has until now done its deals, including acquisitions, in bitcoin.


It is also one of the only major bitcoin companies to not have a bitcoin trading or even a buying platform, preferring to focus on making bitcoin accessible and useful to everyone.


Rapid expansion
Blockchain's growth reflects the rise of bitcoin's own popularity and awareness levels. The company, which was a one-man operation from its August 2011 beginning until the spring of 2013, and operated with only a handful of employees as recently as seven months ago, now has a total 21 employees in various locations around the world.


It recently announced its two millionth wallet account (there are now 2.3 million), more than half of which are from sign-ups made this year. At the beginning of 2013, it had just 110,000 accounts and by the end of October that year it had 500,000.


The Blockchain mobile app's relaunch on both Android and iOS, together with its re-admission to Apple's iOS App Store in July, are in part responsible for those numbers.


Other investors in this funding round included Mosaic Ventures, Prudence Holdings, Future Perfect Ventures, and a number of angels including Rafael Corrales of CRV, Amit Jhawar of Braintree and Nat Brown, among others.

Read More Read More, Posted by: sync19
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The Bitcoin Foundation has issued a fraud alert over fake websites that are attempting to steal innocent visitors' bitcoin.
The bitcoin advocacy organisation said in a statement that it knows of two cloned websites, bitcoincompensation.com and bitsecuretransfer.com, which are cloning the legitimate Bitcoin Foundation site and spoofing web addresses and domains.


"Neither of these domains have anything to do with the Bitcoin Foundation," the foundation stressed.


How the scam works
Bitcoiners are directed to a fake page that looks like the legitimate Bitcoin Foundation website, where they are asked to submit their bitcoin address in order to receive a "gift" or compensation for losses incurred by the bitcoin price slump.


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CoinDesk used a dummy bitcoin address to find out what happens next.
Firstly, the site brings up a notification that the user has won a certain amount of bitcoin, in our case 17.4439042675 BTC. They are then asked to "login with Blockchain"


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The site then forwards visitors to a site (blockchcain.com) that mimics that of bitcoin wallet and data provider Blockchain. Users attempting to log in and redeem their 'free' bitcoin will actually be giving their password to the scammers.

It is worth noting, however, that the text on the fake Bitcoin foundation site is poorly written and likely not the work of a native English speaker. This makes it simpler for visitors to identify the site as a scam.


Appeal for vigilance
The Bitcoin Foundation urges users to report other similar sites they may come across to webmaster@bitcoinfoundation.org, with the subject line "SCAM SITE" and also suggests there may be fake sites in languages other than English.


The foundation said:

Quote:"We are taking steps available to us to help remove these offending websites from the Internet. While we only know of the two, we are continuing to monitor any other additional scam sites."

This is merely one in a long list of bitcoin scams, but what makes these sites notable is the sheer audacity of the perpetrators, who are trying to pass themselves off as some of the biggest names in bitcoin.

Read More Read More, Posted by: sync19
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It has been a terrible couple of weeks for bitcoin wallet provider Blockchain.


First, the firm’s product lead got into an online spat with a Coinbase engineer on Reddit. Then, Blockchain's wallet was pulled from Bitcoin.org, an informational website managed by bitcoin core developers and community members, for poor security.


The company found itself publicly promising to reimburse customers after a random number generator flaw that led to hundreds of addresses being compromised. Further, unsubstantiated online reports suggested that bitcoins had been stolen as a result of the issue.
So, what went wrong, and what’s going to happen next?


Let’s take the most recent issue first. The firm was forced to make a security disclosure on its blog and on Reddit, admitting that a development error had led to a problem with the generation of private keys. Private keys (effectively the private addresses used to hold bitcoin) were generated with a low degree of entropy, making them easy for attackers to retrieve.


Online blowback
Blockchain offered to reimburse all customers for lost funds, but the online blowback was still huge, with commenters accusing the company of bad development work and managerial problems.


Commenters on Bitcoin Talk criticised Blockchain for several things, including letting developers push code to a production environment.


One Reddit commentator said:

Quote:“This is seriously simple stuff. Web business 101. A developer should literally not have the ability to put anything near production, because if they do they will eventually do something stupid.”

“I don’t think that’s accurate to say that this is a real criticism on Reddit,” Blockchain CEO Nicolas Cary told CoinDesk, about accusations of poor development processes.


He added:

Quote:“I think a few outspoken community members that have a lot of their own personal brand at stake are making some accusations. We’re listening to those. We know that we have to do better. We have a very strong development team."

"We have built a huge amount of software," he continued. "We have released safely all the time, we have quality assurance leads. We have a security team. The real message to the community is that we are going to get better. We know we need to do a better job. At the same time, we have the humility to do what's right and take care of our users when there are issues."


Core bitcoin developer Peter Todd also criticised the company for only having a manual testing repository in its GitHub repository, rather than a fully automated test suite.


Blockchain’s senior executives did not offer a formal response to Todd’s tweet. Neither did they confirm that there was an automated test suite in the company, discuss their development process or comment about the $30.5m Series A funding deal Blockchain completed in October.
Redditors had criticised the firm for failing to tighten security issues with the money. Sources close to the company privately pointed out that it takes time for a freshly funded company to use that money and make the necessary internal changes.


The Bitcoin.org delisting
All of this happened just days after the organisers of Bitcoin.org took Blockchain off the list of wallets that it provides for bitcoin users, with commenters suggesting that "it should be revisited with reasonable criteria at least as demanding as other wallets".
In the discussion within the GitHub pull request concerning the wallet’s listing on Bitcoin.org, site maintainer Saïvann Carignan highlighted several factors. The first was bugs and losses, of which there have been several, he said.


The second was backup and password security. "[Blockchain] hasn't adopted security features which are slowly becoming standard in other wallets (e.g. BIP32, random passphrases, backup on setup, rotating addresses, 2FA by default),” he said.


He also criticised the company for not being transparent enough, and not resetting the app’s source code, adding:

Quote:“To be fair, each of these issues would have blocked or delayed listing Blockchain if the wallet was submitted today. Accordingly, I think the logical next step to incentivize security and reduce risks for the user is to raise the bar for Blockchain like other wallets”.

Ben Reeves, Blockchain’s CTO, posted a response in that GitHub discussion addressing the complaints and promising several changes. This was praised by the other participants, on the basis that the initial criticisms concerned the track record of the Blockchain service. So, the consensus remained to delist the wallet for at least 60 days, and to let Blockchain resubmit it after that.


Carignan acknowledged complaints that there was no set policy for listing or delisting wallets from Bitcoin.org, and opened another discussion to develop a standard process.


"We are eager to resubmit there. We respect their decision, but ultimately we have made a lengthy defense for our position. We are still the only open-source company," said Cary, who added that the company is making changes to its software, and that people should expect "exciting things coming to market in 2015".


A wider FinTech problem
Blockchain has made its mistakes, but Emin Gün Sirer, an associate professor of computer science at Cornell University and an expert in bitcoin security issues, warned against a witch hunt.


He said:

Quote:"To their credit they have realised that their processes were broken when they made some personnel changes internally to bring different people in charge of security. I have had private conversations with them and it sounds like this is a bunch of people trying very hard to patch the flaws as they appear."

These security issues are a sign of a wider problem in the cryptocurrency space, warned Sirer.
"There is no room for the smallest screwup, and we’re finding out that standard practices that are normal in Silicon Valley are unacceptable in the bitcoin world because there’s so much at stake," he said, arguing that the rate of security failures is high across the bitcoin industry.


Online spat
Cary also called the timing for this whole affair "suboptimal". That seems accurate, given an online spat that broke out between Coinbase and Blockchain executives earlier this month over bitcoin wallet security, in which Blockchain staff criticised Coinbase’s operating model.
It all started with a Reddit post by Charlie Lee, the creator of litecoin, who took a job at Coinbase18 months ago. Lee, now engineer manager at the company, wanted to set the record straight about security at the centralised wallet service.


Lee described what the service has done for the security of its users. Among those he listed were default requests for two-factor authentication (using something you have, such as a phone, in addition to something you know, like a password) if making transactions above $100. The service also included a bitcoin vault for its users, and stores 97% of its own coins in cold storage, said Lee (CoinDesk has covered some of Coinbase’s security before).


All this information is part of the public record. The interesting part came in one part of Lee’s post, in which he compared CoinBase’s security to that of Blockchain. One part of the post (later removed) read:

Quote:“Over the past year though, Coinbase kept introducing new security features while Blockchain wallet's security has stayed exactly the same, and arguably became worse.”

This led to an angry riposte by Keonne Rodriguez, product lead at Blockchain, who criticised Lee for chasing his own agenda, and likened him to “a shady lawyer chasing an ambulance”.


A serious approach
Name calling and criticising doesn’t help anyone, suggested Michael Perklin president of Bitcoinsultants, and a specialist in bitcoin security. Perklin, also a director at the Bitcoin Alliance of Canada, has a background in security within other industries.
“I enjoy accurate discussions based on the merits of the argument,” concluded Perklin. “But whenever anyone throws mud at someone else, they have to get themselves dirty first.“


Those comments all occurred before Blockchain’s latest security debacle. What does Cary have to say about it now? He is still eager to draw distinctions between the two models.


Cary said:

Quote:“We have a lot of respect for what Coinbase are doing. We’re not here to start a mud-throwing contest with anyone. We want to have a company that basically has a long-term vision for the success of bitcoin, and takes consumer protection very seriously, and takes care of consumers where there are problems, but also continues to take a non-custodial approach to managing risk.”

Cary said that the company was eager to actively engage and listen. “We take all of these things super-seriously. We are here for the long term,” he concluded.

Read More Read More, Posted by: sync19
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A white-hat hacker who was able to take 255 BTC from Blockchain wallets following a security flaw earlier this week has returned the funds.
Bitcoin Talk member 'johoe', an account 1.5 years old but with only 21 posts, had always stated that he or she was taking the funds for safekeeping and would return them, writing on the forum:


Quote:"There were a large bunch of new broken addresses today (several 100s in one day). I took the liberty of saving some funds before they got swiped by others. If you can convince me that they belong to you (signing a message with the address is obviously not enough; the private key is already known), I will send the funds back."

Johoe then posted a page of 1,019 addresses said to be compromised, and invited users to check if theirs was one of them. Blockchain CEO Nicolas Cary confirmed to CoinDesk that the funds had been received.


Even before the funds were returned, Blockchain had admitted it was at fault and promised to reimburse any users who had lost money.


Random number flaw
The problem that led to the vulnerability was reportedly wallets generated with previously used 'R-values' in formulas that generate random numbers, meaning a hacker could use the public address to calculate its private keys. If R-values are unique, this should be impossible.
For the technically-inclined, Blockchain CTO Ben Reeves has pointed out the mistake in code on Blockchain's GitHub page here.


Blockchain posted in a statement that the issue affected web wallet users who had created a new wallet address or sent funds from an existing address during the period the vulnerability was live.


According to johoe, Reeves sent an email asking him to send the funds to this address, which johoe duly did, posting a photo of a Trezor wallet sending the transaction.
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Still solving the problem
Customers on Bitcoin Talk and Reddit, while relieved their funds were swept by someone with good intentions, are now contacting Blockchain to prove their losses and have them returned.


At this stage, however, it is not 100% confirmed that all funds removed from Blockchain wallets were under johoe's control. At least one user has claimed that nearly 100 BTC missing from his wallet have gone elsewhere.


Blockchain is in the process of examining "thousands" of customer claims and support tickets for authenticity before reimbursing.

Read More Read More, Posted by: sync19
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Bitcoin's Wild West days may be numbered, or so the headlines would have us believe.


This week saw the release of the final version of the BitLicense, New York's long-awaited, and still heavily debated, state-specific regulation for bitcoin businesses. Unsurprisingly, the news was extensively covered in the media, and often heralded as a milestone in the evolution of the emerging technology.


Many stories used legitimizing language and headlines that foreshadowed that bitcoin had taken yet another step toward inclusion in the wider financial world.


However, the technology's growing pains were still on display this week, as it continued to be associated with illicit Deep Web-based activities and development issues dogged one of its most well-funded startups.


Milestone legislation
The victory lap for the BitLicense came swiftly following its 3rd June release, with the mainstream narrative all but arranged to trumpet the government's stamp of approval.


The Wall Street Journal's Michael J Casey wrote a piece, which noted:

Quote: "Outgoing New York Superintendent of Financial Services Benjamin Lawsky released sweeping new rules for licensing digital-currency businesses in the state Wednesday, staking part of his legacy on launching a specialised regulatory regime for an industry that many experts believe could play a significant role in the financial system."

In the article, Casey quoted Lawsky's statements in which he voiced his belief that the legislation struck the appropriate balance between protecting customers and rooting out illicit activity, while showing commitment to not "doom promising new technologies before they get out of the cradle".
"Whereas some have questioned why existing money transmission regulations can't be used for virtual currency businesses, Mr Lawsky said those Civil War-era laws simply wouldn't work for digital currency, a technology unlike anything we had ever seen before," said Casey.


More marginalized were the many dissenting voices who occasionally appeared in such content, arguing that the BitLicense would discourage the same spirit of innovation that propelled the early Internet.


Extensively covered by Western mainstream media, the news 
was also picked up by less likely outlets around the world, showcasing the technology's growing appeal abroad.

Kommersant, a Russian Daily, ran a headline which implied bitcoin had been legitimised as a digital currency; a loosely translated version read: "Cryptocurrency Recognised A Full Part of The Financial Market".


The article said:

Quote:"The key provision of the new rules is that now all the companies that work with cryptocurrency, you must have a special license from the Department, which should improve the safety of customers and transparency of operations cryptocurrency."

Such articles could no doubt have an influence on coming conversations regarding regulation that is seeking to ban the technology in Russia under rules for monetary surrogates.


Nail in the bitcoin coffin
It wasn't all good news for bitcoin.


Following Silk Road creator Ross Ulbricht's life sentence last week, it was not surprising to see how the debate around bitcoin's use in illicit activities was reignited.


Forbes published a piece by Jason Bloomberg in which the author outlined the digital currency's link to the Deep Web.


He wrote:

Quote:"Silk Road kingpin Ross Ulbricht's recent conviction and life sentence was more than simply a crackdown on a massive online black market for illegal drugs. It was a nail in the coffin for the radical new cryptocurrency bitcoin, as bitcoin was the glue that held Silk Road together."

Backtracking slightly, Bloomberg asked how significant the demise of Silk Road was for bitcoin, noting that this was part of an ongoing debate.
"Controversy, however, is nothing new for bitcoin. In fact, it seems the story of this digital currency consists of nothing but controversy," he wrote, adding: "In fact, perhaps the greatest challenge for bitcoin is divining the technology's true purpose. Early innovators often espoused radical Libertarian goals for revolutionising the banking system and with it, the world economy".


Quote:"By disintermediating third parties, bitcoin promised to usher in a new world order free of market commerce," noted Bloomberg.

Despite this, the author proves seemingly negative about bitcoin's performance.
"Bitcoin soon became a haven for criminals – not just Silk Road, but any number of money launderers and other shady types who gravitated toward an anonymous, relatively safe method for conducting financial transactions, in particular across national borders," he said.


'Total crypto breakdown'
Elsewhere, Blockchain struggled to right its news narrative, which has been marked by the kinds of security issues that may be alarming given that it closed $30.5m in funding late last year.


The Guardian ran a piece with an alarmist headline given the small number of users apparently affected, writing:

Quote:"Blockchain has issued an update for the Android version of its bitcoin wallet after discovering a critical failure which breaks the cryptocurrency's security."

Whether intentional or not, the latter seems to imply that Blockchain's bug could potentially affect bitcoin as a whole, as opposed to just users who store their holdings on Blockchain's wallets.


Writer Alex Hern explained:

Quote:"Bitcoin wallet application Blockchain has rushed to release an update after a critical bug left multiple users unaware that they were sharing a bitcoin wallet, leaving their cryptocurrency completely unsecured."

He continued: "The bug affected users running Blockchain’s app on Android version 4.1 or older [...] it resulted in one specific address being generated multiple times, leading to a loss of funds for a handful of users.”


According to Hern, the bug was due to a series of questionable development choices:

Quote:"Bitcoin wallets are typically created by randomly generating a public address and a related private key. As a result, it is important for address and key to be truly random, or else it may be possible to guess the private key by looking at the public address."

It seems that Blockchain used two sources to create the random numbers, pulling a random number from Android's built-in generator, and then connecting to online service Random.org to obtain the second combination.


Hern noted that on some Android devices, the built-in random number generator failed to connect and report back Blockchain's app.
Then, the battering continued.


Michael Mimoso wrote a piece for Threat Post with "Crypto Calamity For Blockchain Android App" as its headline.
Describing Blockchain as one of the busiest bitcoin wallets, the article said: "Shoddy crypto is being blamed for the loss of bitcoin for an unnamed number of Blockchain users."


It seems that New York's plans to regulate digital currency companies, at least for now, will do little to help solve the pain points for companies still struggling to gain wider adoption.

Read More Read More, Posted by: sync19
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Blockchain has officially opened a closed alpha for its new bitcoin wallet.
The launch precedes a formal debut that is likely to be the bitcoin wallet and block explorer provider's biggest announcement since it raised a then-record $30.5m Series A in October 2014. Nearly 3.8 million Blockchain wallet accounts have been opened since launch in 2011, according to its own statistics.


Following its most recent fundraising, Blockchain has been relatively quiet with new announcements, experiencing heavy user backlash amid security issues in December as well as an under-the-radar CEO change.


Alpha users, the company said, were carefully selected with the goal of providing feedback that could improve the product. As such, these users are currently able to get a first look at the service's new security center, improved account management and simplified interface, among other updates.
Blockchain co-founder Nic Cary indicated that the goal of the alpha was to allow the company to iterate the project based on the feedback of influential users.


Cary told CoinDesk:

Quote:"We've set up the alpha program to be a community driven development project. We've been soliciting feedback on what users want out of a future wallet in a live environment."

The company said it expects to update the alpha version of the product weekly ahead of its formal launch.

Read More Read More, Posted by: sync19
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Last week, wallet provider Blockchain represented the bitcoin industry in an official government trade mission.
CEO Peter Smith was one of 31 executives to take part in a trade delegation, led by Prime Minister David Cameron, to promote the UK's FinTech businesses in Southeast Asia.


The FinTech sector, which now employs 135,000 people in the UK and creates $20bn in annual revenue, is a key part of the Conservative Party's plan to stimulate trade and investment.


While the nation received 42% of Europe's FinTech investment last year, trade body Innovate Finance wants to capture an even greater share of a market still dominated by Silicon Valley and predicted to be worth $46bn by 2020.


Cameron's trade mission coincided with the release of the organisation's 'UK 2020' manifesto which calls for the nation to create over 25 FinTech leaders "whether by IPO, global market share or by valuation".


Alongside the key players in the FinTech ecosystem, Innovate Finance also counts bitcoin firms Bitreserve, CoinFloor and Elliptic as members. Elliptic joined several other FinTech startups on a previous trade mission to America with London Mayor Boris Johnson.


Championing business
The Treasury's newly appointed 'special envoy' for FinTech, Eileen Burbidge, is a partner at VC firm Passion Capital, one of the backers behind UK exchange CoinFloor.


Though the government has mentioned bitcoin and blockchain technology in its rhetoric to date, Smith's invitation is more concrete evidence it is championing bitcoin businesses as part of its agenda.


Smith told CoinDesk:

Quote:"Our public policy team has been actively engaged with the Prime Ministers office, as they seek to learn about the technology, formulate policy and most importantly, encourage the industry here in the UK."

The CEO said he was "honoured" to be part of the mission around Malaysia, Vietnam, Singapore and Indonesia.
"The highlight was having the chance to explain bitcoin, and our company, to the Prime Minister while we flew between cities," he added.
Alongside SMEs such as RateSetter and Earthport, others in attendance included FTSE-100 insurance company Aviva and Rolls Royce, who signed a £340m deal with Vietnam Airlines during the mission.


Though many of the delegates in attendance had heard of bitcoin, their understanding was limited, Smith said. One of the biggest take-aways from the trip, he said, was the need for better education – which can be something as simple as setting up a bitcoin wallet and receiving funds.


Quote:Newest @Blockchain user! setup @AirAsia founder @tonyfernandes with his first #bitcoin wallet. Cool things coming :) pic.twitter.com/LoXGNpvelz
— Peter Smith (@OneMorePeter) July 30, 2015

Stimulating the economy
In the year since withdrawing his first bitcoin from a bitcoin ATM, Chancellor of the Exchequer George Osbourne announced a landmark plan to regulate digital currencies in the UK.


Under the proposed laws, bitcoin exchanges in the country will be required to adhere to anti-money laundering regulations, meanwhile companies will be able to opt in to consumer protection standards, coordinated with the help of the UKDCA and the British Standards Institution (BSI).
The government is also investing $10m into research on digital currencies, in a joint venture between Research Councils, the Alan Turing Institute and Digital Catapult.


Unlike New York's "inflexible" BitLicense, startups have praised the UK's measures for their light touch. The FCA's regulatory sandbox has proven particularly useful for many startups who cannot afford up-front compliance costs.


In a previous interview, Marco Santori, global policy counsel at Blockchain said:

Quote:"The clarity and research evident in the Treasury's recent publication on digital currencies demonstrates its true desire to get the details right, and to learn along with the industry in the process ... This is in welcome contrast to the blunderbuss approaches we've seen in other jurisdictions."

The government's formal consultation on digital currencies is expected to begin this summer.

Read More Read More, Posted by: sync19
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Yesterday, social media lit up with the news that bitcoin creator Satoshi Nakamoto had emerged from the shadows to make a transaction.


The mysterious figure is estimated to own somewhere in the region of one million coins, all mined during the currency's early months. His fortune, now worth $281.6m, has not moved in six and a half years.


Yet speculation bubbled after a user spotted what appeared to be signs that some coins had moved, according to data from Blockchain.info. The site displayed coins in bitcoin's genesis block, or 'block one', moving to an address created this year.


Despite initial excitement – and concern – from some, other users spotted a data discrepancy across alternative block explorers. Sites including BlocktrailBlockr.io and others did not display the transaction, indicating that perhaps the movement didn't actually happen.


Observers have stated that the issue was due to Blockchain.info's accepting transactions without validating them, eliciting criticism across social media platforms. The company later acknowledged the issue on Twitter, stating that more details would be forthcoming.


Quote:[/url]

 Follow
[Image: rMuSXKi6_normal.png]Blockchain 

@blockchain
Funds attributed to Satoshi Nakamoto have not moved. They are unconfirmed by the Bitcoin network and likely spoofed. More details to follow.
12:17 AM - 5 Aug 2015


  •  

  •  124124 Retweets
     

  • [url=https://twitter.com/intent/like?tweet_id=628615828997586945] 6868 likes




Earlier today a user took to Reddit claiming to have been responsible for the transaction, stating that he is a researcher from Central Europe who wanted to test the response to sending invalid transactions.
When reached for comment, Blockchain CEO Peter Smith characterized the event as a "publicity stunt", arguing that the network would have never validated the transaction.


However, the company has updated its API with a fix that Smith says will prevent a similar situation from developing in the future.
"I think we can do a better job of filtering and we currently employ a lot of custom filtering rules so people don’t use our API for malicious purposes like spamming, dust transactions, etc.," he told CoinDesk. "We’ve already implemented some new rules to make this kind of transaction impossible in the future."


As it stands, it appears Satoshi's coins remain dormant – for now.

Read More Read More, Posted by: sync19
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CoinDesk was last able to retrieve data from the site’s API at 05:44 UTC this morning, with a Reddit usernoting the issue at around 07:00.
At press time, a message on the site’s homepage read: “We will be back shortly. Blockchain.info is currently down for maintenance. For status updates please see Twitter. Apologies for any inconvenience.”


Blockchain co-founder Nic Cary told CoinDesk the downtime was down to the company "installing some new equipment", adding that it has been "growing fast" lately.


The company’s outage follows a six-hour period of downtime experienced by global bitcoin marketplace LocalBitcoins earlier this week.


LocalBitcoins’ community manager 'Max' said in a post on Reddit the problem was related to server issues: "It seems a server got hung up ... We're about to move to new equipment as the current servers are quite old, sad that they had to crash before we moved."

Read More Read More, Posted by: sync19
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Bitcoin startup Blockchain has added a former banking chairman and a former Facebook executive to its team of advisors.
The announcements were issued on Blockchain's blog over the past two days, with former chairman for Merrill Lynch Europe, Middle East and Africa Bob Wigley, revealing his role in a post today.


The news followed a separate post in which Salil Pitroda, who previously worked for Facebook as a corporate development executive, disclosed he has been working with Blockchain as an advisor for the past year.


In a separate article published in The Financial Times, Wigley detailed that he also made an investment in Blockchain for an undisclosed amount.
Wigley wrote in his announcement that he had been approached by other bitcoin startups seeking venture funding, and that his interest in the technology increased as he continued to learn more.


He wrote:

Quote:"Bitcoin strikes me as one of those developments you see infrequently that won’t just change one particular aspect of the way an existing service or product is delivered but has the potential to totally revolutionise world payments."

Pitroda pointed out how bitcoin can have an impact on both consumers and merchants that interact with it.
"For consumers, bitcoin will offer a more efficient, accountable and lower cost way to transfer funds and pay in many use cases," he wrote. "For businesses, the blockchain will allow sharing of information for its participants, trust between unknown parties and greater security and risk management for transactional flows."


Founded in 2011, Blockchain offers a bitcoin wallet service and blockchain explorer product. The company has raised $30.5m in one round of venture funding.

Read More Read More, Posted by: sync19
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While debate remains over the origin and implications of the rising transaction fees on the bitcoin network last week, the sudden increase in network use appears to be creating pressures for industry businesses.


To date, this has mostly manifested in public calls to action by industry CEOs who have taken to blog posts to detail concerns over the current state of the network. Though there’s disagreement on finer points, those wishing to send a bitcoin transaction today are paying higher fees, or else waiting longer to have transactions confirm.


In the midst of this development, bitcoin wallet provider Blockchain has released data that indicates its users are issuing more complaints related to service disruptions, providing a window into how bitcoin’s larger consumer-facing businesses are being affected by the network developments.
Blockchain CEO Peter Smith indicated in a Medium post today that the startup is seeing "new records" for support tickets related to "unconfirmed transactions", however, it did not go into further detail.


Data provided by Blockchain to CoinDesk indicates that support tickets in this category rose 110% from January to February, a figure that dwarfed a 14% increase observed from December to January.


Blockchain co-founder Nic Cary said:

Quote:"In the first week of March, we've set a company-wide record in issue management. We've had nearly as many cases this past week as we did the entire month of [February]."

Cary went on to state that support tickets are being resolved on average in just over two hours, but that this is putting added pressure on the company’s staff and users.


"Many of the of the voices opining on the state of the network and scaling debate do not serve end users and so they don't really know how frustrating it's getting for regular folks trying to make transactions," Cary said.


Larger debate
Still, just how much pressure this is putting on startup business models, and how much of a concern this should be for developers, remains a contentious topic.


Blockchain’s figures come at a time when industry leaders are beginning to speak out on the issue following a private industry meeting from 26th to 28th February in which the topic of how best to scale the bitcoin network was discussed.


Conversation about the event was minimal until a controversial post by Coinbase’s Armstrong on Friday in which he criticized Bitcoin Core developers, calling the team overly ideological and immature. He further advocated for a proposal called Bitcoin Classic that would increase the capacity of transactions the bitcoin network would be able to process in each data block to 2MB, up from 1MB today.


Such comments set off a firestorm of criticism on social media, inspiring blog posts by developers such as Oleg Andreev, who argued that as the blockchain system with the biggest network effect, bitcoin does not need to rush to add users.


Rather, Andreev argued advances from other blockchain-based systems will simply be added to bitcoin, meaning users are unlikely to adopt another system despite added fees and longer wait times for confirmations.


He suggests that the network’s security and integrity should be paramount, and that they should not be risked on short-term gains.


Network pressure subsides
Against this background, data from 21 Inc indicates that the average fee needed for a 30-minute transaction confirmation was in decline on Monday.
Last Thursday, users needed to pay 60 satoshis per byte for a transaction confirmation time of roughly 30 minutes, a figure that was up slightly from than the 50 satoshis per byte observed at press time.
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Data also [url=http://p2sh.info/dashboard/db/blocksize-debate]indicates
 that the number of blocks that are near capacity or filled to capacity is subsiding after spiking last week.
Adding further fuel to the debate are allegations that network activity contributing to last week’s transaction surge should be viewed as "demand", and that a capacity increase is needed to accommodate users who are being denied service.

For example, some observers believe that individuals or entities may be colluding to drive up the number of transactions on the network to sway the ongoing technical debates.


However, Blockchain's data provides evidence that bitcoin’s users are experiencing issues regardless of the root cause.


Cary concluded:

Quote:"Most of these users are not worried about the politics behind technical changes, they depend on bitcoin to be functional and reliable."

Read More Read More, Posted by: sync19
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Bitcoin startup Blockchain has released the first version of a payments channel prototype that finds it moving its research efforts into how transactions on the bitcoin network can be made faster and more effective into the public eye.


The startup, which has raised $30m in one public round of funding, announced the alpha release of the ThunderNetwork today. Best described as a Blockchain-led effort into the implementation of payment channels, the technology seeks to allow bitcoin users a way to conduct off-blockchain transactions that settle against the bitcoin blockchain at a later date.


Given the sometimes high cost of settling against bitcoin’s blockchain, which can fluctuate (sometimes greatly) with demand for block space, the ecosystem has long sought to bridge bitcoin’s ability to be denominated into units as small as one one-hundred-millionth of a bitcoin with the fact that fees to settle such transactions against the blockchain are generally prohibitively higher than such values.


To date, the most prominent effort to bring payments channels to the bitcoin network has been the Bitcoin Lightning Network, an open-source project that has since coalesced into a startup called Lightning, which boasts some of the community’s more notable developers.


Still, Blockchain CEO Peter Smith sought to stress that the announcement represents a significant step forward for the bitcoin network given that the technology is useable at a limited scale today. Further, while spearheaded by Blockchain, he emphasized that ThunderNetwork can now be built on by the wider community of bitcoin developers.


Smith told CoinDesk:

Quote:“Thunder is already open-sourced. It’s more functional today [than other versions of lightning networks], because it’s the first network of this style that’s settled back to the main blockchain.”

In a demonstration of the network and its capabilities, Blockchain detailed how Smith and ThunderNetwork lead developer Mats Jerratsch tested how the tech can be used for person-to-person transactions.
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The technology has already received widely positive feedback, with Twitter mentions even from innovators in the private blockchain side of the ecosystem weighing in on the significance of the release.


This enthusiasm was palpable in the startup’s announcement of the news, with the company writing:


Quote:"This is a big deal and we’re excited about the work ahead."

Comparisons to Lightning Network
Announced last August, the Thunder Network is intended to be a “low-trust solution” to payments channels, one that used mostly tools available to bitcoin developers.


[url=https://www.reddit.com/r/Bitcoin/comments/3gldfn/alpha_thundernetwork_a_lightning_network/]At the time
, lead developer Jerratsch contrasted this with Lightning, which he characterized as a “no trust” way to achieve the same functionality. These differences can be seen in the design of ThunderNetwork released, as Blockchain is the only company that runs nodes on the network.
Nodes will route transactions using encrypted onion routing, with transactions moving through multiple nodes without any information about the individuals involved being disclosed to these entities. “It will go from my node to your node, to another person’s node, the basic routing methodology,” Smith said.

The official blog post provided more clarity, indicating that at each hop, the status of the payment will be renegotiated until the channel is closed and ultimately settled.


In interview, Smith sought to position ThunderNetwork as something that can work in conjunction with any implementation of payments channel technology for the bitcoin network.
"I think it’s complementary to any lightning network," he said.


Protocol changes needed
Perhaps most notable about the release is that Blockchain still needs a few changes to be made to the bitcoin protocol so that Thunder transactions can settle against the blockchain.


The first, CheckSequenceVerify (CSV) was recently merged into Bitcoin Core but is awaiting further development as OP_CSV. Secondly, implementing Thunder will require the merging of SegratedWitness, the long in-development scaling solution that would alter how transactions are stored by the bitcoin blockchain.


Today, Blockchain said the network is "suited for transactions among a trusted network of users", while cautioning that it should not be used for real payments.


As for how ThunderNetwork fits into Blockchain’s business strategy, Smith was less clear, though its blog post hinted the startup is currently seeking to expand its team of developers.
Smith concluded:

Quote:"As the tech matures, we’ll have to see what makes the most sense for it as a product. It’s very early, very raw technology."

Read More Read More, Posted by: sync19
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Global private banking blockchain consortium R3 now sees 3 Chinese members.


The operator for China’s official interbank market trading platform has joined New York’s blockchain-based startup R3.
Based in Shanghai, the China Foreign Exchange Trade System (CFETS) is the country’s official platform that covers a number of financial operations including issuance, trading, post-trade processes, exchange rates and more.


As the country’s platform interbank trading between Chinese and international banks, CFETS operates under the guidance of the People’s Bank of China – China’s central bank.


With its membership, CFETS will join a common working group with over 70 of the world’s major financial institutions to explore and develop blockchain solutions for operations.
 
In a statement, CFETS executive vice president Zaiyue Xu added:

Quote:CFETS is committed to establishing technical standards and improving the ecosystem of China interbank market, and we have noticed that blockchain is an emerging technology with great promise to reshape the market.

 
The financial services firm is the third Chinese firm to join the ever-growing ranks of R3’s membership roster. Earlier this year in May, the Ping An Financial Services Group –  the largest non-state-owned financial entity in China with assets of over $765 billion – became the first ever Chinese R3 member. In September, the China Merchants Bank (CMB), a commercial bank wholly owned by corporate legal entities in the country became the second Chinese member to join R3, with assets of over $800 billion to show in 2016.

 
It was only a matter of time before the R3 banking consortium – perhaps the most-known and prominent private blockchain project by the financial industry – began including Chinese members with the country home to the most number of banks in the global top 50.


“Acknowledging the Chinese renminbi’s (China’s fiat currency’s) growing prominence in trading and the crucial role China holds in the global financial markets,” R3 CEO David Rutter welcomed CFETS to the consortium.
 
He added:

Quote:Their expertise will be an enormous asset as we develop universal applications for distributed ledger technology across increasingly globalized financial markets.

 
A Common Banking Blockchain Standard?
Following a year of what was a high-profile and equally well-guarded banking blockchain endeavor, R3’s blockchain software Corda, will go open-source via the Linux Foundation-led Hyperledger Project later this month.


Corda, the software product of R3’s Concord project is the coordinated result of the consortium’s effort to develop a blockchain solution for the financial industry. “We want other banks and other parties to innovate with products that sit on top of the platform, but we don’t want everyone to create their own platform” said R3 chief engineer James Carlyle following R3’s announcement to go open source with its software.


The Corda software, which R3 filed a patent for in August 2016, would see the R3 blockchain gain wider adoption to become the common financial infrastructure among banks and institutions around the world, if R3 had its way.
Carlyle opined:


Quote:If we have one platform with lots of products on top, then we get something that is more like the internet, where we still get innovation but we can still communicate with each other.

Read More Read More, Posted by: sync19
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A Delaware judge is urging institutional investors to use the blockchain as a way of protecting their voting rights, according to a report from The Wall Street Journal.
Last month, Vice Chancellor J. Travis Laster, presented a speech at the Council of Institutional Investors advising shareholders that the blockchain could help to remove the middleman when it comes to how shares are held and voted.


According to Laster, the current system is outdated and too complex making it difficult to determine who actually owns a share and how it’s used in corporate decision making.


At present, shareholders are known as ‘beneficial’ owners despite the fact that their names aren’t listed on the books, according to the WSJ. More effort, therefore, is required to undertake all voting rights. However, Laster states that this process means there are too many middlemen involved to figure out who owns a vote to ensure that a vote has been cast.


As a way of cutting down on the cost of money and mistakes, Laster believes that the use of the distributed ledger would ensure transparency, giving voters the peace of mind to know that their votes had been counted.


Blockchain Voting
The use of blockchain technology for voting purposes has been done before.
Earlier this month, the Abu Dhabi Securities Exchange (ADX) developed an e-voting platform based on the blockchain technology. The aim of it is to allow shareholders of listed companies on the exchange to vote during yearly general meetings.


Bitcoin ATM developer and blockchain technology firm, Blockchain Technologies Corp (BTC) announced that it was creating a tamper-resistant blockchain voting machine called the ‘VoteWatcher.’ Its intention is to ensure that the voting machine captures the voter’s intent correctly and to safeguard voters’ trust that their votes have been counted.


Whereas the Australian government-owned Australia Post unveiled earlier this year that it plans to conduct tests through digital voting through bitcoin’s underlying distributor, the blockchain, in a bid to cut costs and improve efficiency.
Of course, with blockchain technology proving quite popular within many sectors it’s understandable that many will be turning to it for greater transparency.


According to the WSJ, T. Rowe Price found a quirk in the system which meant that it wasn’t able to vote the way that it wanted to during the 2013 buyout of Dell Inc. Laster argues that a blockchain system would have made this process far easier ensuring everything was being followed correctly.
He said:


Quote:This is a carpe diem moment. You can take the lead on distributed ledger technology, or you can let the intermediaries replace one intervening institution with another.

Read More Read More, Posted by: sync19
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As unprecedented charges of rigging have loomed over the U.S. presidential election, much attention has focused on the capability of blockchain technology to make voting more transparent.


Joseph Lubin, the founder of ConsenSys and the co-founder of Ethereum, observed in an article in Futurism that decentralizing technologies have important implications for not only improving elections, but in empowering individuals overall.


In addition to charges of rigging, this year’s U.S. election featured the emergence of foreign and non-state actors wielding the power to influence the election’s outcome. Decentralized actors form Wikileaks to Anonymous have exerted influence over the race.
A foreign controller of a big botnet can create major confusion which can affect events from a distance, Lubin noted. Where the United States has historically sought to police the world, the world has since become capable of exerting checks and balances on the U.S. political system.


Chinese and Russian hacks, meanwhile, are exerting information-based influence on foreign shores. Stuxnet and similar cyber weapons have delivered millions of dollars’ worth of damage.
Blockchain technology’s decentralizing power will deliver tools that can not only disrupt existing systems, but also provide solutions to enable more transparent, predictable and fairer outcomes.


Governance Through Code
When organizations such as rLoop form on the Internet using blockchain-based tools like Boardroom, they are providing successful high-tech projects that support robust, decentralized, real-time decision-making capabilities. Such capabilities include quadratic voting, liquid democracy and wisdom/prediction markets.


Public support for blockchain-enabled solutions might not convince governments to change traditional voting systems, but technology players could still effect change. Some companies already have the ability to find interested jurisdictions and engage in “jurisdictional arbitrage.” Some countries will welcome these initiatives.


National Identity Will Diminish
When the planet’s 7.4 billion citizens can establish blockchain-based, self-sovereign or user-centric identity along with a portable and persistent reputation, each citizen will have the ability to enfranchise themselves into the growing digital economy.


There is a mobile app called uPort that enables people to register their identity on the blockchain, providing an anchor for their digital transactions. This identity serves as a universal login for digital services and a signature for digital transactions. The information is stored in a user-controlled environment and does not rely on legacy institutions.


A blockchain-based reputation can enable an individual to get a microloan from an organization such as EtherLoan.


Legacy Voting To Be Taken To Task
When online voting systems hold legacy voting systems to account, the White House and Main Street become more transparent to one another. It will be possible to view the average citizen’s benefits against the policies pursued by politicians and lobbyists.
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ConsenSys is working on an anti-spoof element that, along with portable reputation and self-sovereign identity, can solve the Sybil Attack problem, which allows fake identities to be established on the Internet.
Solving this problem will overcome a major obstacle to provably fair and decentralized voting.

Incentives Will Expose Corruption
Platforms enabling people to bet on the outcome of any decidable event, known as prediction markets or wisdom markets, present a strong use case for blockchain technology. Gnosis, for instance, is a wisdom market built on Ethereum, in which individuals seeking the truth in certain situations post a consulting fee to find information that could impact a business or political activity.


When people put more value behind the quest for truth, those who were previously not motivated to seek such information could become “wisdom consultants.” Such individuals could earn a consulting fee for finding information.


Accepted fact and actual truth could come closer together, leaving behind the infrastructure that supports systemic corruption.
The prospect of having less corrupt elections could be sufficient to excite 99% of the world’s citizenry.

Read More Read More, Posted by: sync19

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