Tuesday 23rd September

BITCOIN

Trading: OTC / Retail Outlets / Exchanges

Merchants & Wall Street

BitPay and Coinbase DO NOT sell Bitcoin on exchanges. There is a huge OTC market going on which is actually where most blocks are sold. Wall Street, ect are not going to exchanges they are buying from brokers like Second Market, Pantera, BitPay and others who buy and sell BTC in blocks. In fact, BitPay and Coinbase sell to each other as well.

Second Market is simply 1 example. A lot of buying I’m seeing is unofficial. For example today I introduced a miner who sold 500 BTC to a friend of mine (Morgan Stanley vp). The rate was 2% under bitstamp.

 

Mining Operations Sell Bitcoin OTC

Same goes as above. Most large miners and mining corps that I know (which is more than half of them) have contracts and deals with brokers. These miners sell to brokers for 1-5% (sometimes more) under spot every day for cash/wire transfers. Large miners simply don’t use exchanges, its too cumbersome, takes days to get your money.

 

Long term holders/understand tech/obsessive fans/etc.

These buyers and sellers will use retail outlets like Coinbase, LocalBitcoins and Circle before going to exchanges.

The prices are set by exchanges. Bitstamp, Bitfinex, Huobi, ect. and the retail companies like Coinbase, BitPay, Circle follow the exchange price.

There is a huge OTC market, potentially bigger than that on the exchanges currently. Today the OTC markets are going crazy. There is much more demand than supply currently, I have more buyers asking me to introduce them to sellers. Sellers dont wanna sell because the exchange says the prices are too low, but in reality there is huge demand.

Charlie Shrem

 

More Pain for Bitcoin Prices; Are Chinese Miners to Blame?

It is the China theory– and it is only a theory — that is most intriguing, in part because it explains a striking anomaly in the bitcoin system: That the summer-long price fall  has coincided with an explosion in bitcoin mining. Over the same three-month period in which the price dropped from above $600 to below $400, there has been a doubling  in the “hashrate,” a measure  of the network-wide computational power with which bitcoin miners compete to solve a mathematical puzzle and win the right to a fresh issuance of 25 new coins at 10-minute intervals. There’s an arms race going on in bitcoin mining. But that begs the question: why would anyone rush to buy mining rigs and pay for ever-greater electricity consumption when both the proportional share and value of the bitcoins you can earn are plummeting?

The China theory is one of the few that seems to makes sense of those competing trends.

The idea is that some Chinese citizens see bitcoin as a vehicle for bypassing capital controls, which limit them to foreign exchange purchases of more than $50,000 a year. With Chinese bitcoin exchanges scrutinized by officials and with banks barred from servicing them ever since a crackdown in April, yuan-funded investment in mining could be an easier, below-the-radar way to obtain bitcoins and sell them for dollars.

Is this happening? Well, we  know a lot of the new mining equipment is coming online in China, where a large number of new ASIC (application-specific integrated circuit) mining rigs are made. Sources have told us of large mining operations surreptitiously installed by employees of state-owned enterprises (SOEs) in factories that enjoy state-subsidized electricity. In some cases, these people say, the rigs are even charged to the company as “computing equipment.” If the state’s paying for both your equipment and your power bill, the price of bitcoin doesn’t matter so much.

But why now? One argument is that a slowing Chinese economy is driving Chinese investors to seek opportunities in better-performing markets overseas. With government-controlled banks paying deposit rates below inflation, Chinese savers had traditionally put their money in real estate. But for the first time in decades, housing prices are falling, in line with signs of a broader economic slowdown. Note, too, that a recent survey found almost half of all Chinese with a net worth above $1.5 million plan to depart the country in the next five years. Bitcoin allows them to transfer their wealth overseas before they leave – Michael J. Casey & Paul Vigna

 

 

MINING

Mining Difficulty

If you are a bitcoin miner of any scale you have just gone underwater

When people say that the price has been here before they are correct, but the mining difficulty hasn’t been here before.

Surely miners will switch off and diff will fall ?

That depends on how long it stays sub 390 – Bryce Weiner

 

Bitcoin Price vs Difficulty on Sept 19

2010 – $0.06,  2.1k

2011 – $5.29,  1.7m

2012 – $12.41,  2.8m

2013 – $157.81,  112m

2014 – $389,  29b

Bryce Weiner

 

 

 

ALTCOINS

Altcoins & Appcoins

When Chris Odom was asked about his thoughts on altcoins and appcoins at Inside Bitcoins London, there were many people in the crowd who were surprised by his answer. While some people like to research every altcoin on the market to see what new features it has to offer, the creator of Open Transactions almost seemed bored with the entire concept.

At first, Odom said nothing more than, “I don’t think that altcoins are going to be that relevant compared to Bitcoin.” There was an awkward pause that lasted for the next few seconds, as the audience wanted him to explain his anti-altcoin position on a panel that was supposed to be all about the future of altcoins. Odom was then asked to go into more detail on his position throughout the rest of the panel, and most of his responses were able to illustrate how Open Transactions makes many altcoins “irrelevant.”

After claiming, “Bitcoin is the winner.”, Odom went on to explain how the coins behind certain decentralized apps in the Bitcoin space don’t really have a reason to exist. The man also known by his online alias FellowTraveler claimed, “[Developers] are creating additional functionality and they’re using these appcoins to fund development, but the actual additional functionality that they’re creating would be perfectly viable without the appcoin itself.

Odom went on to state, “Whenever you make a system that uses an appcoin, there’s going to be some comparable system in the near future that doesn’t have an appcoin that has the same functionality.” – Kyle Torpey

 

Open Transactions

It seems that the main reason Chris Odom and many of the supporters of Open Transactions aren’t that excited about altcoins is that they understand what this project can do for Bitcoin. One feature that Odom specifically pointed out is anonymity. Altcoins such as Darkcoin and Anoncoin are looking to take advantage of the fact that anonymity and privacy are two areas where many Bitcoin users would like to see improvements. As a side note about anonymity during the altcoins panel, Odom noted, “Open Transactions uses Chaumian untraceable cash. You don’t need an altcoin to do it.”

In addition to providing enhanced privacy and security measures for any financial instrument issued on the platform, Open Transactions can also be used for microtransactions and instant confirmations. These features are made possible by the fact that Open Transactions is simply a system of federated servers rather than some kind of blockchain technology. While it does not come with the same level of security as a blockchain, there are only certain types of transactions where blockchain-level security is actually needed. A user can always keep savings on the blockchain in cold storage and use an OT server as their hot wallet. It should be noted that voting pools (see video presentation by Justus Ranvier) will make it impossible for a single server to run away with a customer’s bitcoins – Kyle Torpey

 

Ethereum

One of the projects that Odom was not willing to demonize during his opening statements was Ethereum. When asked about his thoughts on the project and their $15 million crowdsale, Odom simply stated, “It’s too early to tell.” Kyle Torpey

 

 

EQUITIES

Valuations

It’s very hard for us to have any meaningful conversation about appropriate equity valuations in a world of long-term zero interest rates – Sam Altman

 

Alibaba: The Biggest IPO in History

* The sale means that Alibaba (NYSE:BABA) raked in $25 billion in its public offering, beating the previous record held by the Chinese banking behemoth, the Agricultural Bank of China, which raised $22.1 billion when it listed on the Hong Kong Stock Exchange in 2010 – Jonathan Shieber

* The sharp demand for shares sent the market value of the e-commerce giant soaring well beyond that of Amazon, eBay and even Facebook – firstbiz

* Alibaba IPO raised nearly as much as all US venture funding in first half of 2014 – Marcus Wohlsen

 

Tesla

Tesla Motors Inc. (NASDAQ:TSLA) may need at least $6-B  in capital as it builds a battery factory to boost production of its premium EVs (electric vehicles).

The automaker led by founder-Chairman/CEO Elon Musk is targeting a 100,000-unit production pace by late next year and has a goal to sell at least 500,000 EVs annually.

Tesla plans on building the factory to provide cheaper lithium-ion cells for its vehicles and has said the facility may cost as much as $5-B. In March, it raised about $2.3-B toward the plant, which is being built outside Reno, NV.

The shares had risen 75% this year through Thursday New York close – Paul Ebeling

 

 

COMPANIES

Hampton Creek

A team of recently hired mathematicians is building an online database that one day could catalog the behavior of practically every plant protein on earth—a collection of digital information that could allow Hampton Creek to model the creation of new foods using computer software.

Backed by funding from Microsoft founder Bill Gates and Li Ka-Shing, perhaps the richest man in Asia, Hampton Creek isn’t out to genetically modify your food. Instead, the 63-person startup wants to reconstruct it using what nature already has given us. “There are other companies using synthetic biology and genetic engineering to create whole new food ingredients,” Zigmond says. “We are exploring the vast world of plants to discover natural compounds that can revolutionize food.”

Mixing and matching proteins found in the world’s plants, the tiny startup already has created a reasonable facsimile of the chicken egg—an imitation of the morning staple that’s significantly cheaper, safer, and possibly healthier than the real thing—and now it’s working to overhaul other foods in much the same way – Cade Metz

 

 

PRIVACY

Stealth Addresses

I’ve added support for Dark Wallet-style stealth addresses to bitcore2. Ability to find and spend still coming. https://github.com/ryanxcharles/bitcore2/blob/master/lib/expmt/stealthaddress.js

Ryan X. Charles

 

Ricochet

A program for encrypted instant messaging that uses Tor hidden services for the protected transmission of communications.

To build Ricochet, Brooks patterned his program on something that already existed—TorChat, a peer-to-peer instant messaging program released in 2007 that used Tor hidden services to transmit communications. TorChat had a number of implementation problems when it came out, however, and has largely been abandoned by users and its developers. Brooks vastly improved the concept.

Ricochet doesn’t communicate with central servers like Wickr and doesn’t allow direct connections like Tox. Instead, each desktop client operates as a Tor hidden service and uses the Tor network to transmit encrypted and anonymous communication. The client generates a random 16-character public key or ID to authenticate the user and establish the channel for secure communication in a simple way that doesn’t require users to install Tor separately. Generating the public key occurs with a single click, and the key is stored on the user’s machine, or on a USB drive so a user can communicate with Ricochet from different machines.

“It is idiot-proof and anonymous,” says Gray – Kim Zetter

 

Ricochet vs. Wickr

Although a number of encrypted communications solutions already exist for email and chats, many are not entirely secure or are difficult to use. What’s more, few solutions purport to eliminate the metadata problem. Ricochet’s absence of metadata, and its ease of use, means it has a good chance of going mainstream in a way others have not.

Wickr, for example, is a competing encrypted chat program that doesn’t preserve the communication or metadata of users, so there’s nothing recorded by default for spy agencies or law enforcement to collect from Wickr with a court order. But unlike Ricochet, it uses central servers to transmit the communication, which Brooks says make users vulnerable to timing attacks. Anyone tapping the connections to Wickr’s servers could conceivably map the parties who are communicating and establish relationships between them.

“[I]ntel agencies can watch the traffic going in and out, and just the timing of those messages will probably be enough to tell you which IP address is talking to this IP address,” Brooks notes.

Wickr CEO Nico Sell says the company has implemented a number of solutions, including proprietary ones that she declined to identify, that prevent timing attacks from occurring. So far, however, Wickr is only available for the mobile platform, though Sell says they’re expanding to other platforms soon – Kim Zetter

 

 

PLACES

Hangzhou: Boom Time in the Alibaba Tech Hub

You might be millionaires, but please spend wisely.  We’ve worked so hard, but not for the sake of turning into a bunch of uncouth new rich – Jack Ma, Alibaba Founder 

The eastern city of Hangzhou is famed for its beauty in the form of its pagoda-dotted West Lake, long celebrated by classical Chinese poets and often visited by tourists. It is also home for some who have benefited from Alibaba’s success.

Started here in 1999, Alibaba has followed the model of Microsoft, Google and other American technology companies, generously handing out stock to all levels of workers, from senior executives to receptionists. It has created a wealth diaspora rarely seen in China, where the economy is still dominated by state-owned enterprises, and private companies generally reserve riches for executives at the upper echelons.

The vibe was unmistakably Silicon Valley, as dozens of young programmers hunched over computers and others napped on an air mattress or inside a pup tent. “People here really value bold thinking and risk-taking, and the government is also pretty good, which is a rarity in China,” said Mr. Lai.

Although luxury car dealers and property developers are hoping the Alibaba I.P.O. will prompt a spending bonanza, several employees with significant stock holdings said they would probably defer big purchases and instead use their money to finance start-ups. Mr. Su, the former Alibaba product manager, said he had no plans to trade his two-year-old Ford Mondeo for a more expensive car – Andrew Jacobs & Neil Gough

 

Hangzhou was described by Italian traveler Marco Polo as “the most magnificent city in the world.”

* Unesco called Hangzhou “one of the most livable cities” in the world.

* Among Hangzhou’s attractions, the West Lake was declared a Unesco World Heritage Site in 2011. A freshwater lake, this body of water, which spans about 6.5 square kilometers,* was described by Unesco as having “influenced garden design” in China, Japan and Korea.

* The Grand Canal, the oldest and longest man-made waterway in the world, runs from Beijing in the north to Hangzhou in the south. More than 2,000 years old, it was also declared a Unesco World Heritage Site on June 22, 2014 – Chay F. Hofilena

 

 

THE SINGULARITY

Made in Space

A private Dragon cargo ship built by SpaceX arrived at the International Space Station today (Sept. 23) to deliver more than 2 tons of astronaut supplies and experiments for NASA, including the first 3D printer in space.

The 3D printer built by Made in Space will churn out a few initial test parts and send them back with Dragon. Researchers with the California-based Made in Space and its partners at NASA’s Marshall Space Flight Center in Huntsville, Alabama, want to learn as soon as possible how the quality of items printed in microgravity compares with the quality of parts made on Earth – Megan Gannon

 

When the astronauts aboard the ISS use the 3D printer, they will become the first humans to carry out off-world manufacturing. It’s not quite the Moon- or Mars-based factory that we’ve always dreamed of, but it’s a very important first step towards manufacturing goods outside of Earth’s gravity, and thus the eventual colonization and industrialization of the Solar System.

We’ve known for a long time that anything we can manufacture off-world — tools, machined components, rocket fuel, water — is a huge, huge step towards long-term human exploration of the cosmos. Sending large amounts of stuff up into space via rockets just isn’t workable — we either have to find another way of getting stuff into space (like the mythical space elevator, or fusion engines), or we have to make the stuff outside of Earth’s gravity – Sebastian Anthony

 

Virtual Reality

By any account, 2014 is a momentous year for virtual reality.

Oculus unveiled the latest developer version of its Rift headset and collected just about every trade-show award possible; the buzz grew so loud that Facebook bought the company in March for more than $2 billion. Game development for VR accelerated dramatically. Sony announced its own VR peripheral, known for now only as Project Morpheus. Samsung joined Oculus to develop the Gear VR mobile headset. Hollywood even jumped aboard: Comic Con International in San Diego saw VR experiences from Sleepy Hollow and Pacific Rim.

This spring, after seeing what Framestore and marketing company Relevent Partners created with Ascend the Wall, Marriott approached Relevent to explore creating the first virtual travel experiencePeter Rubin

 

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Follow me on Twitter @leebanfield1

Bitmessage: BM-2cXjeAykLT7gbjzNHZFnCxdawvyryyb4Nf

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