Sizzling Summer Bitcoin Wrap Up – Bitcoin News


Sizzling Summer Bitcoin Wrap Up

Bitcoin had an eventful summer. The currency has had its ups and downs in price as usual. In the news, however, the digital currency has had a different story. So far, the past three months have been sizzling and I’m here to tell you why.

Also read: Bitcoin and Blockchain: A Case for a New Reengineering Revolution

Silk Road Saved Lives

4dc8395b6c9d4bc940343bf1e5129723In the beginning of the summer, the accused owner and operator of the Silk Road, Ross Ulbricht was found guilty on many federal charges. The 31 year-old was given five sentences — two of them being life in prison for the operation of this website. Judge Katherine Forrest of Manhattan’s US district court received a letter from Ross prior to her judgment pleading for leniency. The Judge dismissed the letter that Ulbricht sent her and the arguments of lawyers saying the Silk Road hindered violence. “No drug dealer from the Bronx has ever made this argument to the court. It’s a privileged argument and it’s an argument made by one of the privileged,” she said. This was a sad event for many who championed Ulbricht as a free market advocate. Opposed to this position the Judge had quite a few in the Bitcoin community spoke against her decision. Most notably the double-life sentence was thought to be very unjust by outspoken individuals in the community.

ross-ulbrichtSomeone from the federal courts did not agree with many of the comments made online about Judge Forrest and her decision. The Department of Justice gave the libertarian publication a subpoena seeking the identity of its online commentors. Ross Ulbricht and family have stated that an appeal will take place fighting Forrest’s verdict. A fundraiser held by the the radio broadcast The Crypto Show has taken place to raise funds for the appeal. The top prize was a Ghost Gunner autographed by Cody Wilson and his company Defense Distributed.

BitLicense Cronyism and Apocalypse

Screen-Shot-2015-02-04-at-6.05.18-PMIn early June, the final draft of the much-debated BitLicense was revealed. Ben Lawsky — the once-Superintendent of the New York Department of Financial Services — released the licensing policies with new rules. The businesses who comply with these rules must report various amounts of information to the lawmakers of New York. In a speech held in Washington DC, Lawsky stated that companies working to comply with BitLicense would be doing so for consumer protection reasons. Lawsky also told the media that he planned to step down as superintendent shortly after he revealed the final BitLicense regulation. Some considered this a loophole for the new cryptocurrency consultancy firm he started.

ced4d0d3164bd5179fa7d5c6e4d73778Lawsky’s arch nemesis, Erik Voorhees of ShapeShift, disagreed with the so-called “consumer protection” argument. In a June podcast, Voorhees gave many reasons for the community to be concerned about BitLicense. He basically said that any user of a service would have to give quite a bit of their personal information to the NYDFS. Being against massive data collection, soon after the finalized license was released, Voorhees announced that his company’s services would cease in New York. Following Shapeshift’s service termination, Voorhees also created Please Protect Consumers, a website dedicated to ending mass data collection. It seemed that a majority of services agreed with Shapeshift’s ethical decision and followed in this direction. The measure of rules consisting of 44 pages gave an application deadline of August 8, 2015. Since the announcement of the date itself, droves of Bitcoin businesses stopped servicing New Yorkers. Companies like BitFinex Poloniex announced the end of their services in New York as an entire procession left the state one by one. Erik told Coinbrief in a podcast:

“If the government wants to have private information about people, they need to make a case that that person is at least a suspect of a crime, I would think. They shouldn’t be able to just require everyone’s information just because they write it on paper.” 

Magical Tux Arrested


Japanese authorities arrested former Mt Gox CEO Mark Karpeles on the first of August. Funnily enough, journalists live on TV in Japan called Karpeles the “CEO of Bitcoin.” What really happened is the accused was brought in for questioning concerning manipulating the exchange platform. Allegedly, Karpeles illicitly gained access to an account of $1 million in his name. The arrest of Karpeles has still left a small amount of information on the mystery of the missing Mt Gox Bitcoins.

When the exchange filed for bankruptcy in February, the loss of bitcoins was roughly 850,000 or $450 million at the time of loss. Gox supposedly recovered 200,000 of the virtual currency by finely combing its computer software again. Up until August, Karpeles lived free as a bird in Japan. Not many people heard from Magical Tux since Gox’s demise, until one day he was accused of being the Dread Pirate Roberts in the Ross Ulbricth trial. On Twitter, Karpeles exclaimed that he was not DPR.

Tibanne CEO Mark Karpeles At Mt.Gox Bitcoin Exchange And Bitcoin ImagesThe mysterious missing Mt Gox bitcoins have still not been explained. The Mt Gox founder has always denied theft or inside job accusations. In the hands of Japanese authorities, questioning can often take months before official charges are brought to the accused. So far, Karpeles’ movement of one million dollars has brought this investigation to the forefront.

“This is probably going to be disappointing for you, but I am not Dread Pirate Roberts”

— Mark Karpeles via twitter

Open Tents and Trade


OpenBazaar got a $1 million dollar seed round from Andreessen Horowitz and Union Square Ventures. The decentralized marketplace will offer a place where users can sell whatever they want using Bitcoin. The developers announced this cash injection back in June, and proposed to use the money for further development. The seed funding will help pay for the developers’ salaries so focus can remain on the project. The marketplace ran off donations prior to the funding round and was primarily community-motivated.

OpenBazaar is an open source attempt to decentralize e-commerce and provide a fee-free place for people to trade goods and services. The team is now backed by a force of investors who believe in the developer’s ability to produce an uncensored market. With the investment of $1 million many eyes are watching this project.

coinffeine-coffeeFor trading Bitcoin in a decentralized manner, Coinffeine has opened its doors to 70 countries around the globe. Founded by four developers and software engineers, the project has robust experience and talent. The business is pioneering the protocol to allow users to exchange Bitcoin without a middleman. Customers can exchange anonymously with strong security on the exchange, with absolutely no third-party or centralization.

The service received funds from the venture capital firm Bankinter, a banking and financial institution from Spain. The spanish bank was the first in its region to invest in a Bitcoin service. The exchange operates in a manner where trades are completely decentralized and safer than storing on central exchanges.

Bitcoin, Blythe, and the Banks Want in

blythemasters-jpmorganThe well-known Wall Street executive Blythe Masters told a crowd that blockchains will change traditional finance. Giving a speech at the Exponential Finance conference, Blythe spoke very positively about distributed ledgers. After this event in June, the former JP Morgan executive started the blockchain company, Digital Asset Holdings. The company will produce two blockchain initiatives called Hyperledger and Bits of Proof.

Santander says Blockchain tech can save banks $20 billion a year in a paper from its Innoventures outfit. The FinTech 2.0 paper called “rebooting financial services” says that ledger technology can cut costs by eliminating centralized activities. The authors’ descriptions show there are many ways this tech can improve the ways of traditional banking.

NASDAQ.svgJust before the start of July, Nasdaq OMX acquired Chain as a blockchain pilot. Chain gives developmental infrastructure to institutions interested in distributed ledgers. Nasdaq will use this technology to track shares and change the way the exchanges operate. The company intends to streamline financial data in a way no other market has done before. Ultimately, the ledger can keep more accurate details of transactions, rather than paying lawyers to operate Microsoft excel.

Big Venture Capital Blazing

Over $750 million has been invested in startups revolving around Bitcoin technology. This year, over $350 million has been injected into the ecosystem. In the first quarter of  2015, Bitcoin venture capital investment already exceeded that of 2014’s overall investment. BitFury, the Amsterdam mining operation, announced that its third round funding exceeded $20 million from investors. The company had previously acquired $20 million last summer in an investment round.

Hewlett-Packard (HP), is showing strong interest in Bitcoin and the technology behind it. The company tweeted out a HP blog article saying “With Bitcoin, the contract is the entire transaction. Period.” The tweet leads to a written blogpost called “The Technology Behind Bitcoin Could Replace Lawyers, Too,” which had a great deal of descriptive narrative on blockchain technology and smart contracts.

The financial system has changed and HP has recognized this. In the HP post, the company said that we’ve all heard the “hype” of bitcoin. However, HP believed the tech behind it is the “real promise.” Namely, the blockchain and its ability to service smart contract management. The writer states:

“In Bitcoin, the contract is the transaction itself: one party sending another funds. But in commercial banking or investments, smart contracts could execute unknowably complex contingencies based on the terms of the contract, all in real-time, with total transparency to the agreeing parties.”

KICKFLIPWith all the capital investment going into Bitcoin, it’s no wonder the protocol is one of the most invested-in technologies this year. Despite giant thefts from the likes of Mark Karpeles, the industry has been in high gear.

It takes a whole lot of venture capital to push forth these fantastic blockchain services. Bitcoin boosters and champions of the digital currency know that after this hot 2015 Summer.

Bitcoin’s not going anywhere.

What do you think of the Bitcoin Summer? Let us know in the comments below!


Tags in this story
Bitcoin, bitcoin exchanges, blythe masters, coinffeine, Free Ross, Mark Karpeles, Marketplace, MtGox, MtGox Bankruptcy, OpenBazaar, Shapeshift

Images courtesy of Shutterstock, pixbay, wikipedia commons, and Redmemes

Jamie Redman

Jamie Redman is the News Lead at News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today.

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