This is the first installment of Coin Brief’s “Digital Currency Weekly Rundown”. This should become a normal feature of Coin Brief, and will cover the highlights from Coin Brief, as well as other news, if anything important was missed.
Coin Brief’s Staff
Coin Brief’s staff writers are always great, and we are very appreciative of what they do. Here is a brief overview of some of the articles they have published over the past week or so.
1. Ethereum Raises
$6.4m in First Quarter of Genesis Sale $15m+ in First Half of Genesis Sale
On August 3, Coin Brief’s Sean Wince wrote about the Ethereum presale that, at this point, has just over 22 days remaining. When Sean first reported on the sale, 21.6 million ETH had been sold for a total of ~11,000 Bitcoins. Now that total has risen to 51,730,369 ETH sold for 25,995.0657248 BTC, or ~$15,080,000 based on the current Bitstamp rate.
Ethereum has been getting a lot of attention lately, and it’s presale has shattered all previous “IPO”s for digital currencies. In fact, it is quite likely that this presale has already received more bitcoins that all other cryptocurrency-based presales combined. This is understandable, with the considerable amount of hype that has been built around this currency over the past 6 months or so, but whether the Ethereum team can develop a system to reach their lofty goals is yet to be seen.
2. Xapo’s Disappointing Bitcoin Debit Card Rollout
Evan Faggart explained the shortcomings of the Xapo Bitcoin Debit Card, which was recently released. Originally, the card was to be available worldwide, and would have removed fees that are typical of traditional debit cards.
Unfortunately, Xapo did not deliver on either promise. The fees from Xapo’s Bitcoin card are just as bad as traditional banking debit cards in many ways, and in some cases are even worse than a typical card. Beyond that, the Xapo debit card is not available in the United States, which was not announced beforehand. Users did not find out that they were ineligible to receive a card until AFTER they had already signed up. Disappointing is an understatement.
3. Argentina’s only Bitcoin Exchange Lost it’s Bank Accounts
Evan reported on Unisend’s recent problems, which resulted in both of their banks closing their accounts. However, the “problems” were not because of any sort of mismanagement or failures on Unisend’s part. Instead, the closures were more likely related to new regulations passed by the Argentinian government that created a lot of additional overhead for any Bitcoin related MSBs, and potentially threats the Argentenian government has made regarding Bitcoin in the past.
Evan speculates that the closures could be simply the result of the banks no longer having financial incentive to support Unisend, as the new regulations could very well cost more than the banks were receiving from the business arrangement. If this is the case, Unisend may be able to resolve their issue, but likely at great expense that would probably be passed on to their users, in order to support the cost of meeting new regulations.
4. Jim Harper of the Bitcoin Foundation Responds to the BitLicense Proposal
Jim Harper recently requested an extension to the public commenting period for the proposed BitLicense regulations. While that sounds like a legitimate request on the surface, Evan argues that the very act of requesting this is “tacitly accepting Bitcoin regulation”. Evan commends Mr. Harper for using TBF’s influence to communicate with the regulators, but was quite unhappy that Mr. Harper did not express a desire for economic freedom in Bitcoin, nor condemn the current overreach in the proposed regulations.
However, it is possible that Mr. Harper’s letter was nothing more than a hollow public statement from someone who understands that it truly does not matter what argument is made, the government regulators will do what they wish. I say this, because he retweeted Evan’s article without comment. I do not know if that means he agrees with Evan, or can see it from his point of view as well, but it was a nice gesture either way.
Making a public statement to extend the time to commenting period could be nothing more than just a method of stalling while the industry being built around Bitcoin continues to grow more powerful. Erik Voorhees said it perfectly in his recent interview:
Ultimately just keep building. I mean if you have a Bitcoin project, just keep building it. They can’t stop a world of builders. So that’s all you really need to do — if you want to try to fight them on the political margins, go for it. But build your business … write your software, change the world, and the politicians will be left in dust anyway.
5. The Implications of BTC.com Being Sold to Josh Garza of GAW Miners
Josh Garza, the CEO of GAW Miners, recently purchased BTC.com for ~$1,000,000. While most people seemed to focus on the price tag, which was actually quite low in my opinion, very few seemed to pay much notice to who the buyer is.
GAW Miners is currently dominating the Scrypt Mining Industry, as well as chipping away at Bitcoin Mining, but that is not the important part. GAW is a growing family of companies, and has been around since before Bitcoin’s inception. I recently interviewed Mr. Garza, and his response when I asked about “Project Prime” really stuck out for me:
Top secret : )
All I can say now is that it’s going to completely revolutionize the way people think about and interact with cryptocurrencies. It’s part of the reason I started this company. Stay tuned!
While that doesn’t tell us anything, one can’t help but wonder if BTC.com is part of this attempt to “revolutionize the way people think about and interact with cryptocurrencies.” At the very least, after spending $1,000,000 on the domain, I am sure he has something special planned for it.
6. Ecuador Becomes the First Country to Approve an Official, Government Sanctioned Cryptocurrency
One of Coin Brief’s authors, Vesper Aeon (yes, his real name), described the history of “National” Cryptocurrencies, starting with Auroracoin, and ending with the newest legislation passed by Ecuador’s “Asamblea Nacional”.
It is yet to be completely explained, or named, but Ecuador will have an official, government backed cryptocurrency. However, in the same legislation that approved the creation of this new currency, the Ecuadoran government also effectively banned Bitcoin, and other digital currencies. This is a story that is still in the early stages, but it will certainly be interesting to see how it unfolds.
7. Refutation of the Bitcoin Analysis Performed by ETH Zürich Researchers
We promise that Evan isn’t always a confrontational guy! However, he tends to write most passionately about issues that he disagrees with. That was certainly the case here, as this was only part 1 and ended up at over 4500 words.
I cannot do justice to his article in a short summary, but I highly suggest reading it. He is absolutely correct that the “research” really did not provide much insight that hasn’t been apparent to, and discussed in, the Bitcoin community for years. Beyond that, he explains how they are missing a few really big piece of the puzzle when it comes to Bitcoin’s “value”, notably that the “cost” of mining is not a very useful base valuation, as the “cost” of mining varies directly with the Bitcoin price.
Increasing the cost of mining 1 Bitcoin would not necessarily increase the cost of 1 Bitcoin, but a reduction in the price of Bitcoin will almost certainly reduce the cost of mining 1 Bitcoin, as miners with high electricity costs, or out of date machines, would likely turn them off, thus causing a decrease in difficulty. Mining cost is determined by Bitcoin’s price rather than Bitcoin’s value, or price, being derived from the cost of mining. Also, the researchers failed to consider the impact of negative news, such as Mt. Gox’s insolvency, or governments heavily regulating, or outright “banning” Bitcoin.
8. Sean Wince Outlines 4 Reasons Why the Hive Bitcoin Wallet is Revolutionary
Sean reviewed the Hive Bitcoin Wallet once before, and was very impressed with it then. Now, it has been upgraded, and he really loves it. He outlines the increase in security, support for multiple currencies, the app store, and a proposed “Feature-Based Crowdfunding.”
Personally, I have stuck with the boring, plain Bitcoin wallets thus far. However, he is doing a good job of convincing me to give Hive, or one of the other feature rich wallets that are being developed, a shot.
Our New Coin Representatives
As many of you may know, we have launched a Coin Representative program that allows members of the various cryptocurrency communities to write about their currency of choice. So far they have been doing a great job, and some of them have succeeded in winning my support via purchasing the currency they are supporting. Here are a few from the past week:
1. Myriadcoin’s Solution to Merge-Mining
Neuromode has written quite a few articles now (and typing this sentence reminds me that I need to get him to use his name!), and they have all been extremely well written and engaging. However, this is my favorite. Myriadcoin has always interested me, as the idea of multiple mining algorithms running concurrently is really great. However, this article explains a benefit of that type of system that I did not consider before.
Using concurrent mining algorithms, a coin could be merge mined with only one, or a few, of the algorithms. Depending on how the block reward for each algorithm was set, among other parameters, this could allow a more symbiotic relationship between parent and child currencies that are engaging in merged mining. Most merged mining in the past has resulted in the parent coin dominating the child coin, in an almost parasitic way.
2. Potcoin Is Where It Is At!
Ben King did a great job outlining all of the projects that are going on in the Potcoin community. He expertly explains that Potcoin is more than what it seems on the surface, and has an extremely active community building a lot of interesting projects and programs around it.
The Potcoin Ambassador Programme, PotLabs, charity-based Potfunder, and multiple smaller projects from community members are growing throughout the community, and the development team is working very hard to make an impact that reaches far beyond cryptocurrency. A very interesting read, and it is always exciting to hear of people finding novel ways to use cryptocurrency to improve the world in one way or another.
3. An Analysis of Bitcoin VS Litecoin and Gold VS Silver
One of our newest representatives, Mike, rehashes the old subject of Litecoin being silver to Bitcoin’s gold. However, he does so in a way that truly analyzes the trends, and attempts to determine if the comparison is accurate. It seems to hold up, as the ratio of Gold:Silver and Bitcoin:Litecoin has followed a similar pattern, even if it is not exact.
He goes on to speculate about the future of both Litecoin and Bitcoin, as well as mentioning a few new developments from Litecoin that have no been widely publicized, including a new “What is Litecoin” video. Altogether, it is a nice read, especially if you like math and numbers for the sake of math and numbers (and I do).
4. The State of Dogecoin – Part 1
This one is actually slightly outside of the past week, but it deserves mentioning anyway, as the next parts would have been published already except the author has experienced some technical difficulties. Once those are straightened out, expect to see these begin to be releases sequentially.
The author, Augustus Clyde, has a style that is unlike anyone else that has written on Coin Brief. The article is short, and is about his experience with Bitcoin, starting with the early days of Local Bitcoins, and going up through his view of Dogecoin, and vague reasons about why he supports it. As I believe this was written to be a short, serial type of article, it ends rather abruptly, but I am excited to see the next part. I have a feeling that Augustus is going to be an interesting author to follow.
Coin Brief’s Other Digital Currency Releases
The Podcast, Short Videos, Coin Brief’s Coin Portfolio, and Streamlining the Coin Representative Application
Outside of the articles, there has been a lot going on at Coin Brief.
1. Coin Brief Podcast #10: Jim Harper vs BitLicense, Bitcoin in Argentina, OpenBazaar Alpha & Xapo Fail
If you want to watch a video rundown of many of the articles that were discussed here, as well as other topics in the Bitcoin, or general digital currency world, then check out the podcast. Evan and Sean have been doing this for quite a while now. It is always fun to watch the guys chat, and I always learn quite a bit listening to them.
However, if you would prefer a shorter segment, the podcast is also broken down into specific topics for easy viewing:
Advancing Bitcoin to the World’s Unbanked Population
Unisend and Bitcoin in Argentina
Outright Ban On Bitcoin Would Be Practically Impossible
Government Cannot & Will Not Protect You From Bitcoin Theft
Bitcoin Foundation’s Jim Harper Asks For BitLicense Comment Period Extension
2. Coin Brief’s (Beta) Coin Portfolio is Now Available, and Supports All Digital Currencies We Have Listed
Our Coin Portfolio is finally ready for beta testing! Using the portfolio, you can enter the public address for all of your cryptcurrencies (along with the amount of coins you have in it), and we will keep track of them for you. Not only that, but for currencies in which we have price information available, it will tally up the value of all of your coins in terms of both BTC and USD, so you can easily check how much your entire portfolio is worth.
Please test this system out, and let us know what you would like to see added, or any bugs you find. It is not currently updating automatically, and we know that price information is not available for every currency, plus we do not have every digital currency listed (I believe we have ~140 or ~150 total), but that will be remedied in the near future.
The Coin Portfolio requires you to be logged in, and can be easily accessed in the drop down menu under your name at the top right of the page.
3. Streamlining Coin Representative Applications
We are always looking for more Coin Representatives, both for currencies that already have representatives, and for currencies that do not. Even new, small currencies are free to apply, as long as the applicant is an active member of that community.
Instructions on how to apply are now easily found on our top menu. Just mouse over “Coin Representatives” and click “Become a Coin Representative Today!“. Also, be sure to check out our Rules and Resources.
Anyway, that is all for now I guess. I hope everyone enjoys our articles and new features. We are always eager to hear from our users, so please don’t hesitate to contact us for any reason!