November 2014

MONTHLY REPORT: NOVEMBER 2014

BITCOIN

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The Separation of Money and State

Removing money from monopolistic state control is the single greatest thing that could ever happen to the cause of human freedom.

It won’t cause the state to fall, of course, but the nation state lives on its money monopoly above all else. That’s it main source of power. That’s why BTC matters – Jeffrey Tucker

 

Growth

* Bitcoin number of transactions (excluding popular addresses):

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* Bitcoin number of unique addresses used:

Nick Szabo

 

Blockchain

Blockchain just passed 2.4 million users, and in fact in the last three weeks we’ve been seeing record tractions across the entire network. We’re seeing more and more people using bitcoin and their wallets to transact on a daily basis – Nic Cary, Blockchain CEO

 

2014 Price 

Bitcoin price continues to bounce with another USMS auction coming up soon. As time winds down $817 by this Christmas seems increasingly unlikely supporting the idea that on price, this is just a lost year for Bitcoin. Of course a lost year in price growth is a chance to build infrastructure for the next climb. – Bingo Boingo

 

Coinbase Raising Giant New Investment at $400mill Valuation

Coinbase is expected to take in between $40 million and $60 million in the new investment. Venture capital firm DFJ is expected to be a new investor in this round, and most likely contribute the most funds.

Coinbase, founded by Brian Armstrong and Fred Ehrsam, has already raised more than $30 million, including a $25 million Series B round led by Andreessen Horowitz. Union Square Ventures, Ribbit Capital and SV Angel have also invested in the San Francisco-based company – Jason Del Rey & Liz Gannes

 

Pierre Rochard: This means Coinbase is worth 1/10th of bitcoin. I would argue Bitcoin is severely undervalued, not the opposite.

Mortuss Bestia: This isn’t smart money. Investment in a business that requires the success of BTC, just put it in BTC.

Pierre Rochard: I couldn’t agree more, though an element of venture philanthropy is necessary: The Correct Strategy of Bitcoin Entrepreneurship

 

Zeke: Mr. Rochard is right. Coinbase is doing valuable work, but why would I give up bitcoin (resilient, anti-fragile, zero counterparty risk bitcoin) for some stock and contractual investors’ rights in a company whose value is closely correlated with btc market cap (and may not even be generating a USD profit)? Same upside, much greater risk.

It’s so easy for a company to fail. It’s not so easy for btc to fail. For investors sitting on piles of USD, it would be better to purchase a btc hoard, and then use remaining USD to seed efforts to increase the value of btc. If I were Union Sq Ventures, I would ask my LPs for permission to commit as much money to buying btc itself, as is allocated to financing btc-related companies.

 

 

ALTCOINS

Counterparty / Ethereum

What a coup! CounterpartyXCP,

* Grabs the good stuff – Ethereum tech

* Ditches the bad stuff – Wonky economics, new chain. This is precisely what I’ve been telling people to do since Ethereum appeared. Ethereum has good tech, broken economics, and useless chain.

Core ethereumproject mistake: They let the fund raising dictate the tech. Ass backwards. Did not put product first. “Coin IPO” now locks ethereumproject into separate chain, even if not the best tech (it is not). Short term seed dictates long term design.

Jeff Garzik

 

Ethereum

Pierre Rochard: Ethereum will have to overcome Bitcoin’s liquidity advantage, take on risks of a rewrite from scratch, and implement complex features. The first challenges economic law, the second two are Herculean feats of software engineering. God speed.

Oh and they have to do it all before their theoretical competitive advantages are eroded by incumbents and challengers –

Jimmy Song: Don’t forget all the coin cloners that have access to the same open source code

Pierre Rochard: yes, that makes their pre-sale especially amazing

 

 

COMPANIES / PROJECTS

Federated Wiki

Federated Wiki is one of the most important projects going on right now. Get involved! – Bret Victor

Why Does Communication Break?

This sort of thing happens almost every day — someone somewhere has the information or insight you need but you don’t have access to it. Ten years from now you’ll solve the problem you’re working on and tell me about the solution and I’ll tell you — Geez, I could have told you that 10 years ago.

We need to look more deeply into this because this is THE problem of our century.

I fervently believe that amazing solutions to so many of our major problems — renewable energy, education, disease — exist out there somewhere, but they are in pieces. You have a piece of the solution and someone in Bangalore has another piece of the solution. And if those ideas find each other in ten years, we’ll save thousands of lives, but if we can help those ideas find each other in ten months, we’ll save millions.

Introducing Federation

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In a traditional wiki, you have multiple people sharing a single server, and the server is the ultimate arbiter of what’s on the wiki. In a federated wiki, everyone has their own server which stores the records associated with them. But the meaning is made in your browser. Your browser pulls wiki records from all over the internet, and makes them look like they exist on a single server.

If you have a background in network theory, I think you’ll see immediately at how this inversion creates a sort of evolutionary ecosystem where we reach consensus not through arguing who gets to control a page on a specific server, but by seeing which versions of a page spread to where.

There are problems with the way social media works now. My hypothesis is that this federated scheme solves many of the problems – Mike Caulfield

 

Google AI

Around 2002 I attended a small party for Google—before its IPO, when it only focused on search. I struck up a conversation with Larry Page, Google’s brilliant cofounder, who became the company’s CEO in 2011. “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?”

My unimaginative blindness is solid evidence that predicting is hard, especially about the future, but in my defense this was before Google had ramped up its ad-auction scheme to generate real income, long before YouTube or any other major acquisitions. I was not the only avid user of its search site who thought it would not last long. But Page’s reply has always stuck with me: “Oh, we’re really making an AI.”

I’ve thought a lot about that conversation over the past few years as Google has bought 14 AI and robotics companies. At first glance, you might think that Google is beefing up its AI portfolio to improve its search capabilities, since search contributes 80 percent of its revenue. But I think that’s backward. Rather than use AI to make its search better, Google is using search to make its AI better. Every time you type a query, click on a search-generated link, or create a link on the web, you are training the Google AI.

When you type “Easter Bunny” into the image search bar and then click on the most Easter Bunny-looking image, you are teaching the AI what an Easter bunny looks like. Each of the 12.1 billion queries that Google’s 1.2 billion searchers conduct each day tutor the deep-learning AI over and over again. With another 10 years of steady improvements to its AI algorithms, plus a thousand-fold more data and 100 times more computing resources, Google will have an unrivaled AI.

My prediction: By 2024, Google’s main product will not be search but AIKevin Kelly

 

 

PRIVACY / SECURITY

FBI Promises A Perpetual, Futile Drug War as it Shuts Down Silk Road 2

* Seized sites represent less than a third of darknet commerce

All told, the latest operation represents a much smaller share of the overall Darknet market than the original Silk Road bust last year. Back then, Silk Road was the only major player in the game.

But the Darknet economy rebounded from that set back, growing to more than double its original size within a year. There’s currently no reason to expect that the same thing won’t happen again this time –Christopher Ingraham

 

Tor

81% of Tor users can be de-anonymised by analysing router information – Martin Anderson

The simple fact of the matter is that Tor was born of the needs of the United States Government’s intelligence community, and continued funding to keep the main Tor developers fed, clothed, and sheltered largely comes from the coffers of those interests.

Everything about Tor and its history should scream to the inquiring reader as loudly as it does toYasha Levine that Tor is far an unencumbered gift offered to civilian users.

Perhaps for one of the Tor foundation’s recommended scenarios, that of dissidents in a regime hostile to the United States seeking to maintain contact across the wire, Tor might work as part of a multi-layered solution. Otherwise anyone considering stepping in to Tor ought to consider that all evidence points towards the Tor network having an “owner” even if not everyone who passes through there gets bitten – Bingo Boingo

 

OpenBazaar

After Silk Road 2.0 Bust, Eyes Turn To ‘Untouchable’ Decentralized Market

* The end of centralized marketplaces is nigh – OpenBazaar

* Estimated a complete version of the software will ship around spring 2015 – Patrick Howell O’Neill

* If you’re thinking about OpenBazaar as Silk Road 3.0, you’re thinking about it much too narrowly. I actually think it’s much more powerful as eCommerce 2.0. – Sam Patterson, OpenBazaar Operations Lead

* Much of the hard work Open Bazaar would have had to do has been done. They are building on very robust platforms and wont have big problems. Open Bazaar is “Silk Road Infinity” It cannot be stopped, or shut down, just like BitTorrent cant be shut down –Beautyon

 

Anonymity in p2p Markets

To achieve real anonymity when chatting with strangers (e.g. blackmarket merchants), one needs to use a combination of these factors:

1) Bitmessage or alike to avoid evesdropping.

2) Tor to make it harder for recipient to find location of the sender.

3) Low-latency network to make statistical analysis less efficient. Every relaying node (both Tor and Bitmessage) should delay broadcasting messages randomly.

4) Infrequent communication, so it takes time for recipient to gather data. (This is a variant of #3)

5) Change physical location frequently, randomly and rarely reuse them. E.g. connect from various free wi-fi points in cafes, parks, shops, Apple Stores etc.

6) Never reuse identity between people you communicate with. Merchants must have separate Bitmessage and Bitcoin address per invoice (once item is sold, post another item with different identity). Buyers must use different Bitmessage and Bitcoin address for each purchase. This way amount of information available to an adversary will be strictly limited to just one deal. And that deal will be limited to one unique location and a few exchanged messages that hopefully won’t be enough to locate the person. And even if that happens, person couldn’t be charged with more than one sin.

If you communicate with people you trust (friends, family members), you only need #1 and that would be enough.

Oleg Andreev

 

 

PLACES

Bali’s Bitcoin Ecosystem Continues to Expand

Bali Bitcoin Binge | A beach in Bali | The CoinFront Bitcoin News

What does Bali have that every other tropical island doesn’t have?

How about an active Bitcoin community that includes 450 members of the Bitcoins in Bali Facebook group, 30 businesses that accept Bitcoin and an upcoming Bali Bitcoin Binge?

Bali is known as a Bitcoin-friendly island that is going to host the Bitcoin Bali Binge in December, features several local businesses that accept Bitcoin, and also has a Bitcoin ATM where you can exchange fiat currencies for Bitcoin – Heidi Hecht

 

 

THE SINGULARITY

* How impoverished are those who cannot feel a thrill as we explore – David Brin

 

* Fly for 10 years, travel for 6.4B KM and land on a 2.5 sq. mile comet traveling at 36,000 MPH. Damn impressive – Antonis Polemitis

* I now have to leave our Comet Landing party to go drive a rover on Mars. If that isn’t proof we live in the future, I don’t know what is – Mike Seibert, Driver for Mars Rover Opportunity

 

The Singularity is Here

This is such a cool set of facts. The birth of flight to landing on the surface of a moving comet in one lifetime – Rob Barrett

Flight: 111 yrs ago

Man in space: 53 yrs ago

On the moon: 45 yrs ago

Tech on Mars: 38 yrs ago

Comet landing 317,520,679 mi away: Today

SciencePorn

 

Skype Translator: Breaking Down Language Barriers

The Skype Translator, derived from decades of research in speech recognition, automatic translation, and machine learning technologies. We are on the verge of having a tool, available to all, that allows us to speak universally with anyone on the planet.

Imagine being able to speak in German, and have your message conveyed grammatically and semantically correct in English. That future is here. – Peter Lee, Microsoft Research VP

 

Tech’s Pace is Like a Dozen Gutenberg Moments Happening at the Same Time

An exponential trend seems unimportant until it is all important – Balaji S. Srinivasan

Drilling down into the concepts and consequences of our exponential pace, Singularity University’s global ambassador and founding executive director, Salim Ismail, set the stage.

We’re at an inflection point, he said, where we are digitizing and augmenting the human experience with technology. That digitization is accelerating change. The question is: How can individuals and society, more generally, navigate it?

Five hundred years ago, Johannes Gutenberg’s printing press freed information as never before. Ismail framed the current pace of technology as Gutenberg to the extreme, “We’re having about a dozen Gutenberg moments all at the same time.”

Ismail showed a video of someone riding in one of Google’s self-driving cars as it navigated an obstacle course at top speed. The rider is amazed and a little nervous—the video ends with him letting out a little involuntary scream. Today, the world is letting out a little collective Google scream. – Jason Dorrier

 

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Follow me on Twitter @leebanfield1

Bitcoin: 1Jwh6nZiASJf4d3hNytjxqiimWBmEJvJ4S

Bitmessage: BM-2cXjeAykLT7gbjzNHZFnCxdawvyryyb4Nf

 

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