Bitcoin News Roundup - May 24th, 2015 – Bitcoin News


Bitcoin News Roundup - May 24th, 2015

Bitcoin News Roundup is a weekly digest email in which Jake recap the week’s bitcoin news, interesting stories, and articles.


After announcing the close of a $115 million fundraise earlier in the year, the much-speculated-on, ultra-stealthy startup 21 Inc. broke their two year period of silence this week, with an announcement from cofounder Balaji Srinivasan that the firm is now officially “open for business.” Channeling Bill Gates, the announcement’s ambitious title, “A bitcoin miner in every device and in every hand,” appears to hint at the company’s broader goals, but still did little to alleviate the confusion surrounding 21’s plans.

“After much hard work, we’ve created an embeddable mining chip which we call the BitShare that comes in a variety of form factors. The 21 BitShare can be embedded into an internet-connected device as a standalone chip or integrated into an existing chipset as a block of IP to generate a continuous stream of digital currency for use in a wide variety of applications.” Srinivasan goes on to list several possible use cases for the chips, including micropayments, giving chip makers a way to monetize ordinary chips (since they claim the “BitShare” [leaked slides here] can be embedded in an existing chipset), decentralized device authentication (like using your phone to unlock your front door), and “machine twitter” (any bitcoin-enabled device can write to a global ledger).

The popular consensus is one of skepticism mixed with indecision about whether the brains behind 21 are geniuses or just insane. These chips could either be a waste of time for the end user, a drain on battery life and an inefficient way to mine bitcoins, as many have been quick to point out; or they could be laying the foundations for the coming internet of things: “…Our team of PhDs in EE from MIT, Stanford, and CMU has built not just a chip, but a full technology stack around the chip — including reference devices, datasheets, a cloud backend, and software protocols.” I’m not so quick to dismiss 21 as being misguided; whatever they are planning on doing was compelling enough to convince some of the most respected investors in Silicon Valley to give them the largest fundraise of any bitcoin company to date.

And I think the business model is a bit more complex than just turning everything into a bitcoin miner, as many are supposing it is. Balaji also wrote, “conceptually, we believe that embedded mining will ultimately establish bitcoin as a fundamental system resource on par with CPU, bandwidth, hard drive space, and RAM. That is, one can imagine the ultimate thin client in which a system designer consciously chooses a relatively slow CPU but a relatively strong 21 mining chip, using the bitcoin generated therein to purchase computation in the cloud.”

Also in the announcement: Cisco Systems, which has been pushing the “Internet of Everything” idea since 2013 is now an investor; Ben Horowitz (as in Andreessen Horowitz) has joined their board of directors. Former World Bank Chief Economist and Secretary of the Treasury Larry Summers has also joined the advisory board of 21, making him the highest ranking former government official to join a bitcoin company (the former director of the US Mint and the former chairwoman of the FDIC are also involved with bitcoin companies).

+ FT: 21 Inc. and the Plan to Kill the Free Internet

+ Someone claiming to be working on 21’s chip joined the WhaleClub teamspeak chat to clarify some misconceptions, saying “everyone assumes humans will be driving the transactions. Not the case.” This led to a very interesting bit of speculation in a Reddit comment thread about how 21 could be building a global economy of interconnected computing devices that bid on the spare resources of one another. Ambitious, no doubt, but still a better idea than toasters that mine bitcoins.


New York’s top financial regulator and pioneer of the BitLicense, Ben Lawsky, announced that he will step down from his post next month. The NY Post reports that Lawsky will be starting his own consulting firm with the aim of advising companies on matters of cyber security and digital currencies.

Last week, Nasdaq announced the launch of a pilot program which will see the blockchain (yes, the blockchain) used to record share issuances and transfers on their Nasdaq Private Markets platform, which allows investors to trade shares in privately-held companies.

“Instead of using bitcoin, NASDAQ will apply this technology to securities bought and sold on a market for private companies. Shares in these companies are often bought and sold using a slow, informal system in which lawyers must manually verify transactions, according to the Wall Street Journal. The blockchain could significantly increase the pace at which trades can be executed.”TIME

+ CoinCenter: Wall Street is using Bitcoin, not just the blockchain.

+ American Banker: Nasdaq Signals Confidence in Bitcoin, Not Just the Blockchain. 

Days later, the NYSE announced the launch of a bitcoin price index. NYSE president Tom Farley is quoted as saying, “We are now going to use our name, reputation and global index provider stature to provide bitcoin values that the rest of the market can look to.” 

+ The NYSE Bitcoin Index (NYXBT)

+ V1.0 Methodology [PDF]. Currently the index only pulls data from one source, Coinbase exchange.


Here’s a killer app candidate with a lot of potential. After bitcoin developer Jeff Garzik posted a tweet introducing the service to the rest of the world this week, the developers behind Streamium decided to launch ahead of schedule. It’s an open-source platform that allows anyone to stream video to an audience and get paid by the minute (in bitcoin, naturally). The potential use cases for this are many: online tutoring, video game broadcasting (Amazon bought streaming site Twitch for nearly a billion dollars), citizen journalism, and a huge market conveniently not mentioned on the site, adult webcam streaming services. Check out the site: Streamium

The service is not ready for mainstream adoption just yet — there’s no directory of feeds (you have to obtain a feed link manually somehow), and the video streaming runs over direct connections from streamer to viewer, meaning it’s not ready for broadcasting to thousands of people simultaneously as is common on streaming sites now. But Streamium being an open source platform, and not a company, I imagine it’s only a matter of time before enterprising developers come up with solutions to these problems. Another thing I found interesting is that this app is built in Argentina. Coupled with recent reports about Argentines turning to bitcoin to move money around, and popular Latin American social network Taringa! giving every one of their users a bitcoin wallet, seems like things are getting pretty interesting over there.

Many years ago, the forefathers of the internet wrote into the building blocks of HTTP a “402 – Payment Required” error message. Like similar requests, “403 – Forbidden” and “404 – Page Not Found”, this error prevents a user from viewing a certain piece of content, in this case until payment has been received. But prior to the advent of digital currencies no one had found a way to make use of this code to erect digital paywalls (instead relying on centralized account solutions, like requiring one to purchase a monthly subscription and log in to access certain content) and the code remained largely dormant. This week I saw someone using the 402 code with bitcoin for the first time, in the form of a clever comic strip that requires one to pay 0.001 BTC in order to view the last panel.

+ Here’s how it works.

CryptoSteel is a device made to store any string of data (but made with bitcoin private keys in mind) in a durable stainless steel enclosure. Waterproof, fireproof, and zombieproof. The creator of the CryptoSteel, a Polish metalsmith named Wojtek, is crowdfunding the first batch of wallets now.

BitcoinDial – make VoIP calls to any country from your browser, pay with bitcoin. More info in comments on Reddit.


The hot wallet of Hong Kong-based bitcoin exchange BitFinex was hacked, leading to the theft of just over a thousand bitcoins. The exchange apparently had good security practices in place, storing most of their bitcoins in cold storage, meaning that the theft represents around half a percent of total coins stored on the platform.

The oldest and largest bitcoin discussion forum, BitcoinTalk, had its servers compromised — again — this time through a social engineering hack. User account details and password hashes were made vulnerable. When the site comes back online, anyone with an account on the forum should change their password immediately.

The North Carolina House of Representatives passed a bill seeking increased oversight of digital currency activities. The bill will now go to the senate for voting. Interesting to note that the bill was introduced by a state representative who also serves as a vice president at Wells Fargo.

The government of Honduras is apparently going to use Factom, a data service built on top of bitcoin, to create a new land title registry, although so far all statements on the matter have come from Factom themselves with no word from the Honduran government. via Reuters.

+ Factom discussed this project on Reddit.

BitPesa expanded service into Tanzania, further growing their network of bitcoin-connected African countries. Intra-African remittances are a big market and BitPesa could be a real disruptor in the space.

San Francisco-based Ripple Labs, who operate a centralized digital currency in competition with bitcoin, finally closed a long-rumoured $28 million Series A round. Among the investors was Seagate, one of the world’s largest data storage providers, who said that their investment is in part because they are taking blockchain technology seriously. With international giants like Qualcomm, Cisco, IBM, Intel, and Seagate having all made recent forays into the digital currency space, it feels like things are heating up.

The Russian government is apparently lightening their stance on bitcoin: a judge ordered bitcoin related website blocks lifted.

Ross Ulbricht’s defense team asks for leniency in sentencing, claiming that the Silk Road saved lives and offered a safer way for people to purchase drugs. via WIRED

“In the end, it’s the possibilities of pervasive, global, high-volume cryptocapitalism, not Bitcoin’s current market valuation, that makes it so interesting. Soon, a technology like Bitcoin will be creating value that may exceed what the internet has created to date. Of course, pioneers often disappear. Sometimes that idea that has venture capitalists reaching for their wallets and others taking a pass ends up being AltaVista. Sometimes, it ends up being Google.” LinkedIn founder Reid Hoffman in WIRED: Why the Blockchain Matters

Fred Wilson: “A lot of people ask me “are you still bullish on Bitcoin” and that question irritates me. Because it suggests that Bitcoin is simple. Bitcoin is not simple, it is not going away, and it continues to fascinate me more than almost anything out there in the tech sector. I’m excited to have a chance to talk about it in public with people who understand it better than I do.” 


I give this kid 50/50 odds that in ten years his isn’t the most embarrassing senior quote in his yearbook.


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