Last week I linked to a countdown timer that Coinbase put up on their website, titled “Lunar,” containing the text “to the moon” in the page source, and accompanied with some epic space music from Interstellar. Needless to say, there was a lot of hype surrounding the countdown. A few hours before the timer hit zero, it was revealed that the new product was a fully-compliant exchange product, to be available in 25 states around the US (you can see a map of available locales here).
The exchange is differentiated from Coinbase’s core service by the addition of an order book and API trading capabilities — aimed more at those interested in active trading than the consumers who simply want to buy and sell bitcoin that Coinbase has traditionally targeted. From what I’ve seen, it looks like a really nice platform, but unfortunately it’s not available in my home state and I am not able to even view the interface from my account.
Until now, most Americans interested in trading bitcoins have been forced to do so on overseas platforms, so the emergence of a regulation-compliant, US-based trading platform with backing from major financial institutions seems to be a pretty significant development for bitcoin.
+ Video: Coinbase founder & CEO Brian Armstrong discusses the exchange on Bloomberg.
Czech Republic-based Satoshi Labs made waves when they first launched the Trezor, a fully open source hardware wallet that, at the time, was the first of its kind. The Trezor was an immensely popular product among those in the bitcoin world looking for an easy and secure way to store their bitcoins offline. A little more than a week ago, an anonymous Chinese company calling themselves BWallet announced their clone of the Trezor (literally copying the Trezor circuit design and firmware source code — and adding a few suspicious lines of code along the way) that they sell for a third of the price.
Sketchy? No doubt. But it was also entirely allowed under the LGPLv3 software license that Satoshi Labs had released the Trezor under, so the emergence of a cheap knockoff clone device should have been seen as an inevitable progression for the company. The reaction from Satoshi Labs, however, managed to alienate the community in a very short amount of time. Satoshi Labs founder Marek “Slush” Palatinus posted a scathing review of the device – full of valid points, mind – slamming the BWallet for being insecure and sold under intellectually dishonest terms.
What really upset people, though, was when Satoshi Labs quietly changed the software license of the Trezor to the less-open and far more restrictive Microsoft Reference Source License. Not only did they change the license of the code for future iterations, but they attempted to scrub history by retroactively applying the change to previous releases of the code on GitHub, which would give the false impression that the Trezor had used this license all along.
The bitcoin community has a long tradition of strongly defending libertarian principles and Free & Open Source Software, so the backlash against Satoshi Labs for changing the license should have come as no surprise to anybody. Many in the community decried the decision as being hasty and emotionally-based. After being slammed for days on online message boards, Satoshi Labs gave in to the pressure, reverting the license change and apologizing: “When exactly this happened, we reacted by changing the license, while keeping the auditability and security of the device unaffected. This reaction was perhaps emotional and impulsive, but it was a genuine statement of how we felt about the matter. Our ideals were being crushed.”
For what it’s worth, the Trezor is still the frontrunner when it comes to hardware wallets (although I’ve really been enjoying my new Ledger Wallet), and although Satoshi Labs may have handled the whole situation poorly, I have to respect that they listened to the desires of their customer base and reverted the license change. Further, the BWallet really is a cheap and sketchy copycat, and likely posed no existential threat to Trezor’s business.
“Furthermore, the growth of any Bitcoin business is limited ultimately by the growth of Bitcoin itself. Since the number of coins is strictly capped, the currency must grow with its price. This means that few businesses, if any, can be expected to earn a much better return than the coin itself over time. Entrepreneurs should therefore invest in coins, not businesses, because coins are where the profit is. In addition, if Bitcoin fails, then the Bitcoin businesses fail—so Bitcoin is less risky than any Bitcoin business too. Thus, Bitcoin entrepreneurs should be less interested in making money than in making bitcoins into money. An entrepreneur who follows that precept should generally be expected to be more successful than otherwise because the potential for Bitcoin itself is so much greater than any Bitcoin business he could invest in.” The Correct Strategy of Bitcoin Entrepreneurship, by Daniel Krawisz.
“Besides, even if the algorithm is safe, there is always the danger of waking up to the realisation that one’s bitcoin stash was e’looted during the night. And if one entrusts one’s stash to some company with better firewalls and computer security, what happens (in the absence of a bitcoin Central Bank) if that company goes broke or simply disappears into the Internet’s darker crevices (with its customers’ bitcoins)?” No one has ever lost money that they kept in a bank, right? Greece’s new minister of finance slammed bitcoin in an essay called Bitcoin and the Dangerous Fantasy of “Apolitical” Money. For a country plagued by central bank-created financial strife, I find this just a tad rich.
“Kurzweil suggests that the progress of the entire 20th century would have been achieved in only 20 years at the rate of advancement in the year 2000—in other words, by 2000, the rate of progress was five times faster than the average rate of progress during the 20th century. He believes another 20th century’s worth of progress happened between 2000 and 2014 and that another 20th century’s worth of progress will happen by 2021, in only seven years. A couple decades later, he believes a 20th century’s worth of progress will happen multiple times in the same year, and even later, in less than one month. All in all, because of the Law of Accelerating Returns, Kurzweil believes that the 21st century will achieve 1,000 times the progress of the 20th century.” Not bitcoin related, but a fascinating read nonetheless: The AI Revolution: The Road to Superintelligence
BITS & PIECES
A bill introduced to the New Hampshire House of Representatives would require the state to start accepting bitcoin for tax payments. This thing probably doesn’t have a chance in hell of becoming law, but then again, if anywhere were going to pass something like this, it would be New Hampshire.
Coin Center, a Washington D.C. bitcoin think-tank (the fact that this even exists still kind of amazes me), published the results of their first Bitcoin Public Sentiment Survey. The survey was completed using Google Consumer Surveys (which was actually one of the most accurate polling tools in the 2012 US presidential election), and found that 65% of Americans are still “not at all familiar” with bitcoin. The Center plans to repeat the survey monthly to track long-term changes in awareness and opinion.
Reddit let go of their in-house cryptocurrency engineer, Ryan Charles. That kind of dashes my hopes for seeing the currency natively integrated with the site. Bummer.
United States representative Bob Goodlatte (R-VA) stated publicly (apparently) that he owns bitcoin and uses Coinbase.
According to a leak by the Wall Street Journal, Ripple Labs is finalizing a $30MM Series B funding round. And an Israeli startup building on top of the blockchain, Colu, raised a $2.5MM round. This brings the amount of funding in the digital currency space for 2015 to more than $100 million, already a third of the 2014 total.
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