QUARTERLY ROUNDUP – Q4 2014

BITCOIN

bitcoin_logo_small-150x150

The 5th of October in Bitcoin Price History

2010: $0.06

2011: $4.90 +82x

2012: $12.75 +2.6x

2013: $121.49 +9.5x

2014: $304.16 +2.5x

Konrad S. Graf

 

Transactions / Price

* Average daily bitcoin transaction volume at all time high – Barry Silbert

* If bitcoin price had gone in a straight line from 1yr ago to now (~$200-325), story would be about the amazing ecosys dev we’ve seen in 2014 – Dan McArdle

* There is not a neuron in my brain that believes the price in 5 years time is going to be as ridiculously low as it is now. I’m all euphoria at this moment, seriously. – bitcoin.txt

 

Merchant Adoption

600%+ annual growth in merchants and retailers accepting bitcoin. 10,000 to 80,000, not bad.

On pace with website growth from 1994-1995 – Jeremy Allaire

Microsoft

There might be life in the old beast yet: Microsoft now accepts Bitcoin as a payment option on its Windows and Xbox stores — which means you can now use Bitcoin to purchase a new copy of Windows, the latest installment of Call of Destiny: Master Chief Edition, or even to buy the latest season of your favorite TV show – Sebastian Anthony

Time

TIME inc. subscriptions confirmed. Fortune magazine has bitcoin option prominently displayed –artfully_doges

TIME inc. is now accepting Bitcoin as payment from their 130 million consumers across multiple platforms – Roger Ver

PokerStars

*The largest online poker room in the world, is preparing to accept Bitcoin – Dan Cypra

* My prediction is that within five years, half of the top 10 gaming operators will be Bitcoin only – Jon Matonis

 

Investment Banks Call Out Bitcoin

2013-01-27T172850Z_1_CBRE90Q1CKA00_RTROPTP_2_MARKETS-STOCKS

* Bitcoin is going to try and eat our lunch. And that’s fine. That’s called competition, and we’ll be competing. – Jamie Dimon, Chairman and CEO of JP Morgan Chase

* You have to be respectful in the face of new technologies like Bitcoin, but you don’t capitulate, you adjust and take advantage. Consumers feel better putting their money with a brand they recognize. We have capabilities and resources that are very powerful – James Gorman, CEO of Morgan Stanley

 

We’re Not Going Back to The Old Way

We have a chance to rebuild the system. Financial transactions are just numbers; it’s just information. You shouldn’t need 100,000 people and prime Manhattan real estate and giant data centers full of mainframe computers from the 1970s to give you the ability to do an online payment.

You would not today, starting from scratch, invent any of these financial businesses in the same way. To me, it’s all about unbundling the banks.

We’re not going to go backward. When people start doing things a better way, it kind of doesn’t matter what the old way was – Marc Andreessen

 

Bitcoin Has Already Won

When people write the history of this thing, of bitcoin, they are not going to write the story of 6 million to a billion (users).

What is truly remarkable is the story of zero to 6 million.

It has already happened! And we’re not paying attention! That’s incredible. That’s what had one chance in a million, and it already happened – Wences Casares

 

 

ALTCOINS

Counterparty (XCP)

Global e-commerce giant Overstock.com has hired the developers behind peer-to-peer decentralized exchange Counterparty to develop a new stock market platform powered by cryptocurrency technology.

The developers will work on a platform called ‘Medici’, an evolution of Overstock’s previously announced ‘cryptosecurity’ offering that will allow not only Overstock, but other businesses, the ability to issue cryptosecurities to the investing public.

With the announcement, Counterparty founders Robby Dermody and Evan Wager told CoinDesk that they have now turned their focus primarily to the Medici project, though this will entail work for Counterparty as Medici will be built on top of the Counterparty protocol. Dermody and Wagner are now working to find replacement candidates to cover their duties at Counterparty while working on Medici.

Launched in January, Counterparty quickly built itself into a market leader using a DIY approach, the bitcoin protocol and Counterparty’s own native currency XCP to facilitate digital asset exchange. “They’re true to the ethics of bitcoin, true to the open-source nature, they’re true to the principles,” Byrne added.

Byrne went on to laud Krellenstein, Dermody and Wager for their dedication to philosophy, math and computer science, as well as their decidedly non-Wall Street approach to finance.

At press time, the value of XCP, Counterparty’s native currency has increased more than 150% on the news. Pete Rizzo

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

 

 

EQUITIES

USG Rigged Fiat Markets: A Massive Dekulakization Experiment

decimation: The other day I was trying to find an etf or stock that didn’t depend on ‘bezzle’ (ie usg fiat finance). I didn’t succeed.

mircea_popescu: this is roughly equivalent to, “the other day, i tried to find a natural process going backwards in entropy. i didn’t succeed.

decimation: yeah I figured it was hopeless, but I wanted to pretend like my bezzlars were not locked in a usg approved cage

mircea_popescu: the thing is, without bitcoin that cage can’t even be made apparent (inasmuch as the most you could do, cca 2010 or before, was to move them into… another cage, worse made)

decimatio: with bitcoin, the ‘free market’ in us finance starts to look like a massive dekulakization experiment

bitcoin-assets

 

“Owning” NYSE Stocks

Purpose-theory is a NYSE stock, it’s a mortgaged home, it’s a webwallet, it’s the appearance of ownership and control where there’s precisely none to be had. If you “own” these things, you are what’s owned. Full stop.

This is one of the primary reasons why Bitcoin is such a big fucking deal: because it makes ownership, as defined by one’s ability and authority to destroy something, possible for a unit of account. Not since physical gold was a thing has this been the case – Pete Dushenski

 

 

COMPANIES / PROJECTS / PRODUCTS

OpenBazaar vs. Alibaba

* OpenBazaar Beta 2.0 was just released: https://blog.openbazaar.org/launching-openbazaar-beta-2-0/ Thanks to the 40 people who contributed code in the past month! – OpenBazaar

* OpenBazaar is operative right now. People buying honey, books and pens. Not as scandalous as WIRED would like – Washington Sanchez

* Decentralized market & currency exchange. Probably only one of the most significant projects on Earth – AnonyOdinn

* Decentralized marketplaces for the masses, using bitcoin, are more important than sidecoins, tokens & crowdfunding – Washington Sanchez

* Alibaba has made more money in the last 20 days than Amazon has made in the last 20 years – Bill Gross

* Alibaba’s market cap of $250bill is higher than Wal-Mart – Lee Banfield

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

 

Magic Leap

The startup, led by CEO Rony Abovitz, announced today the close of its $542 million Series B, featuring investors led by Google, Inc., and including KPCB, Andreessen Horowitz, Obvious Ventures, Qualcomm and Legendary Entertainment.

The list of investors reads like a who’s who of influential companies and individuals across various industries, and Abovitz explained to TechCrunch that the reason for that is that the tech’s potential isn’t limited to any one field, which he says puts its potential market size in the trillions of dollars annually range. That could explain the valuation of Magic Leap, which is north of $1 billion, given that this round is still a minority investment, per Abovitz.

Based on his comments, it sounds like artificial, but extremely realistic images might be projected directly onto a user’s retina to achieve this effect, but we may have to wait until an official reveal to learn more about the nature of the device(s) in use here.

What Abovitz would tell me is that they think of Magic Leap’s capabilities in terms of both the phrases “the world is your new desktop,” and “the world is your new silver screen,” meaning it provides a visual experience not bound by traditional media content consumption devices. The use of both those phrases also hints at some of the potential markets for the tech – silver screen includes Hollywood in the mix, which helps explain why both Legendary Pictures, and Legendary Pictures CEO Thomas Tull personally invested in Magic Leap as part of this round.

“I was an Oculus Rift investor, and they’re certainly doing some amazing things,” Tull explained in a separate interview with TechCrunch. “Magic Leap takes a completely different approach, and all I can say is that as I got to know Rony [Abovitz] and we got to really know and like each other this past year, and I went to their headquarters and I spent half a day immersed in [their technology], I just couldn’t get the smile off my face.” – Darrell Etherington

 

Uber is having quite the week…

* $1.2 billion in new funding, which values the company at $40 billion

* Banned in the Netherlands

* Banned in Spain

* Banned in Thailand

* Banned in Delhi, India

* Operations suspended in state of Nevada

* Sued to stop operating by city of Portland, Oregon

Bradley Leimer / Ben Popper

—————————————————————————————————————————————–

* On pace to generate $2 billion in revenue – Ben Popper

* In just one year, Uber has gone from operating in 60 to 250 cities, and from 21 to 50 countries – Travis Kalanick

* Uber is in direct competition with a very bad government service, and it is winning – Jeffrey Tucker

* Millions of people may decide that they no longer need to own a car because using Uber will be cheaper –Travis Kalanick

* If you invested $10,000 in Uber’s seed round, it would be worth roughly $80 Million today – Semil Shah

* I think Uber could be largely decentralized. Reputation bootstrap might be the trickiest part. Could leverage open trusted functionaries – Andy Alness

 

 

PRIVACY / SECURITY

Tor

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

 

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

 

The Dawn of Trustworthy Computing

“Block chain computer” (not just “block chain”) & “fiduciary code” very helpful concepts for building mental model – Richard Gendal Brown

The most elegant explanation of on-chain computing, well, ever. By Nick Szabo – Stephan Tual

This Nick Szabo post on the ‘rise of trustworthy computing’ is one of the top 10 things I have read on blockchains – Antonis Polemitis

The most important breakthrough in computing since the Internet. “The Dawn of Trustworthy Computing” by Nick Szabo – Bill Barhydt

This new Nick Szabo article “The dawn of trustworthy computing” is a roadmap to about a dozen new companies – BTCplainEnglish

Today’s computers are not very trustworthy, but they are so astronomically faster than humans at so many important tasks that we use them heavily anyway. We reap the tremendous benefits of computers and public networks at large costs of identity fraud and other increasingly disastrous attacks.

Recently developed and developing technology, often called “the block chain”, is starting to change this.

A block chain computer is a virtual computer, a computer in the cloud, shared across many traditional computers and protected by cryptography and consensus technology. A Turing-complete block chain with large state gives us this shared computer.

QuixCoin is a recent and Ethereum is a current project that has implemented such a scheme. These block chain computers will allow us to put the most crucial parts of our online protocols on a far more reliable and secure footing, and make possible fiduciary interactions that we previously dared not do on a global network

Much as pocket calculators pioneered an early era of limited personal computing before the dawn of the general-purpose personal computer, Bitcoin has pioneered the field of trustworthy computing with a partial block chain computer.

Bitcoin has implemented a currency in which someone in Zimbabwe can pay somebody in Albania without any dependence on local institutions, and can do a number of other interesting trust-minimized operations, including multiple signature authority. But the limits of Bitcoin’s language and its tiny memory mean it can’t be used for most other fiduciary applications, the most obvious example being risk pools that share collateral across a pool of financial instruments.

A block-chain computer, in sharp contrast to a web server, is shared across many such traditional computers controlled by dozens to thousands of people. By its very design each computer checks each other’s work, and thus a block chain computer reliably and securely executes our instructions up to the security limits of block chain technology, which is known formally as anonymous and probabilistic Byzantine consensus (sometimes also called Nakamoto  consensus).

Trust-minimized code means you can trust the code without trusting the owners of any particular remote computer. Regardless of where any of the computers or their owners are, the block chain computer they share will execute as reliably and securely as consensus technology allows, up to the aforementioned limits. This is an extremely high level of reliability, and a very high level of security, compared to web server technology.

While there is much futurism in many block chain discussions, including many trying to solve problems that aren’t actually solved by the block chain, I will generally stick to low-hanging fruit that could be usefully implemented on Quixcoin, Ethereum, or similar technology in the near future, often interfacing to still necessary parts of traditional protocols and institutions rather than trying to reinvent and replace them in whole – Nick Szabo

 

 

PLACES

Russia

Russia’s $2.1 trillion (£1.3 trillion) economy has shrunk to $1.1 trillion, half the GDP of California –Ambrose Evans-Pritchard

 

Japan

Legendary Japan household savings rates gone: Aging, & spending jump before tax rise, saw rate go negative first time since at least 1955 – Chris Anstey

 

US Government Normalizes Relations with Cuba

A hotel worker in Havana tells a friend of mine who’s there today: “It is a day of jubilation for Cuba.” –David Corn

High time to normalize relations with Cuba. Can’t tell you how many Cuban-Americans I know with business plans ready to go – Ian Bremmer

Free trade, once bestowed and enjoyed by citizens, is not easily taken away again. Cuba could be the next Hong Kong – Jeff Garzik

 

Crypto Valley: Zug, Switzerland 

stadt zug mit zugerse

Many have asked me why I relocated from Texas to Switzerland. Perhaps the best response is a question of my own: Can any software from the United States be safe?

When Yahoo CEO Marissa Mayer was asked why she and her colleagues did not reveal the extent of government-mandated surveillance on email and internet searches, she explained the reason was because they were threatened with prison. No wonder that many crypto innovators—Monetas included—have started setting up shop in Switzerland.

Silent Circle, an innovator in secure communications, just moved their headquarters to Switzerland, a move they characterized as “extremely important.”

Why? “Switzerland’s strong privacy laws, legendary neutrality, and economic business advantages.” Additionally, “Switzerland has the world’s best privacy legislation that is actually written into the constitution.”

Clearly the United States doesn’t meet those standards. Lavabit founder Ladar Levison certainly doesn’t think so. He said, “This experience has taught me one very important lesson: without congressional action or a strong judicial precedent, I would strongly recommend against anyone trusting their private data to a company with physical ties to the United States.”

Monetas is based in Zug, Switzerland. Our software is built to Swiss quality standards, and the privacy and security of our users is paramount. – Chris Odom, Monetas

 

 

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 Near

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

 

How Soon?

Will I live to see it? I’m middle aged. Maybe I won’t.

But on the time scale of human history, whether this happens in 30 years or this happens in 200 years… 200 years is 1/1,000th of the time there has been human beings. It’s a drop of water in the ocean. It isn’t important. On the scale of historical events, this is about to happen – Perry Metzger

 

First Ever Hardware ‘Emailed’ to Space

* Made in Space Email Wrench to the International Space Station.

* So far, 21 objects have been created via the ISS’ 3D printer.

It looks like the first file made on Earth and sent to space was a resounding success! This opens the door to a bright future for space travel and manned trips. If, for example, humanity does ever colonize Mars or go back to the moon, any broken or needed tools can be produced on an as-needed basis –Sarah Anderson

 

Double Amputee Becomes First to Control Robotic Arms with his Mind

 

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

 

Actualizing the Human Imagination

As David Deutsch said in his book The Beginning of Infinity, if you look at the physical topography of Manhattan, the forces of economics, culture, and intent have already trumped geology. Literally the forces of mind create more physical topographical change than the forces of geology. Mind has trumped matter.

And as Ray Kurzweil wrote in his magnificent, magnificent book The Singularity is Near, it turns out that we are central after all. We are not just a pale blue dot.

Our ability to create virtual models in our heads combined with our modest looking thumbs was sufficient to usher in the secondary force of evolution called technology. It will continue until the entire universe is at our fingertips.

Having invented the gods, we can turn into them.

That is the human story.

That is turning ourselves inside out.

That is actualizing the human imagination – Jason Silva

 

My Writing Profile Picture

Follow me on Twitter @leebanfield1

Bitcoin: 1Jwh6nZiASJf4d3hNytjxqiimWBmEJvJ4S

Bitmessage: BM-2cXjeAykLT7gbjzNHZFnCxdawvyryyb4Nf

 

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