Monthly Archives: February 2017

Cryptocurrency will cripple governmental ability to collect taxes, and they wont see it coming. When its already happened, expect major changes to take place in how society is organized on a large scale but also expect governments to act in desperation to retain control.

As bitcoin launched in 2009, most early adopters saw its disruptive potential. While bitcoin has stalled for some time approaching a valid use of the term stagnation, cryptocurrency in a larger context is still just as disruptive. In 2011, I stated that bitcoin (cryptocurrency) will do to banks what e-mail did to the postal services. This is not just true, but it will be even more brutal to governments, and by extension, governmental services.

Now, governments love anything that smells like innovation, because it means jobs, this magic word that smells of magic unicorns to anybody in government. Therefore, people who like innovation are nurturing this bitcoin thing, this cryptocurrency thing, this ethereum thing (as if governments made a difference, but still). Lots of startups in tip-of-the-spear financial technology means that their government may get a head start over other governments. They have no idea that cryptocurrency will radically scale back the power of government, not just their own one, but also all those other governments over which it seeks a competitive edge.

Individual people in government can also love bitcoin because it gives them something to do. More specifically, it gives them something to regulate. Fortunately, other people in government see that this gives them something to do, which is to hold those government regulators with an overdeveloped sense of order somewhat in check. Youll hear no shortage of wannabe regulators saying that bitcoin is bad because its being used in crime and contraband trade!, to which I usually respond, well, bitcoin is a currency, so I mean you put it in relation to the US Dollar, which then is not used in crime and contraband trade, is this the argument youre using to support your position?, at which point the discussion generally changes topic.

This completely disregards the observation that bitcoin and cryptocurrency were designed to not submit to regulation in the first place. Well, at least not governmental regulation. It is heavily regulated but by its source code, and by its source code alone.

The reason this will cripple todays governments todays idea of what a government is and does is because todays economy is built on one layer doing actual work and three layers of abstraction on top.

At the first and bottom layer of our economy are the individual people doing all the actual work.

The second layer on top of the first is the abstraction we call corporations, which is a way to organize our economy and optimize transaction costs.

The third layer on top of the second would be banks, which handle money for corporations and individual people in a middleman gatekeeper position.

Finally, the fourth layer is the government, which takes advantage of the banks gatekeeper position to siphon off taxes from money flows in order to fund itself and governmental services. In other words, layer four completely depends on layer three for its operations or at least for the relative simplicity of funding its operations.

Now, what bitcoin and cryptocurrency do is make away with the banks cutting them out of the loop entirely, making them redundant, obsolete, dinosaurified. This resulting absence of anything where banks used to be creates an air gap between the functional part of the economy people and corporations and governments who want funding.

The way governments want to tap all money flows in order to fund itself is not entirely unlike how the surveillance agencies want to tap all information flows in order to have an information advantage. In this way, the deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance. The government can no longer reach into money flows and grab what it wants, but will be dependent on people actively sending it money. The government cant point a gun at a computer and have it give up its money; you can only make a computer operator feel very sorry for not voluntarily producing the keys to that money. So the government is no longer able to collect taxes without the consent even if coerced and forced consent of the people being thus collected.

The deployment of cryptocurrency is to tax collection what deployment of end-to-end encryption is to mass surveillance.

Governments, and individual people in government, have no idea about this bigger picture. Theyre far to wrapped up in things-as-usual to notice. They wont see it coming until its already happened.

When this happens, there will be no shortage of people in government who suddenly want to regulate cryptocurrency only to find out it will be as effective as regulating gravity. When this happens, government as we know it will be redefined from a coercive Colossus able to take what it wants and do what it wants into a construct that actually depends on people wanting to fund it. This will be a very interesting time to live in. While todays governments will see themselves as getting crippled, I suspect most citizens will regard it as unquestionably healthy that governments will actually begin to depend on the approval of the people at large.

Were just beginning to see the changes to society that the Internet brings. This is one of them.

(Note: I write cryptocurrency and not bitcoin on purpose here, just as Id prefer proclaiming the success of social media over the success of Myspace.)

Rick is Head of Privacy at Private Internet Access. He is also the founder of the first Pirate Party and is a political evangelist, traveling around Europe and the world to talk and write about ideas of a sensible information policy. Additionally, he has a tech entrepreneur background and loves good whisky and fast motorcycles.

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How cryptocurrency will cripple todays governments and ...

This is a continuation of the most frequent questions I am asked by friends, colleagues, and family as I try to teach them more about cryptocurrencys exciting new role in our world. The previous article has already covered the basics from legitimacy to acquisition, I wanted to focus on the questions I get asked after newcomers have gotten some coin.

This is great! But where can I even spend these?

While Bitcoin and other altcoins may not have as wide an adoption by retailers and service providers as various fiat currencies have, there are still many places that accept Bitcoin and other cryptosas a form of payment. Airline booking agencies, computer hardware and software sites, VPN services, and many brick and mortar businesses all accept Bitcoin, with the list growing everyday. My friends and I are gamers, so many of the people who ask this question usually are thrilled when they find out that Steam accepts Bitcoin as a payment option now. Im sure that Steam saw a fair share of my friends coins coming in during the Steam winter sale this past year.

I also explain that Bitcoin and other altcoins thrive as a peer to peer currency as well, for personal debts. For example, this past weekend I was having a few beers with some of my Bitcoin holding friends and I ordered a pizza for the group. One of them didnt have any cash, but we both had our mobile wallets and he sent me some bitcoin to pay for his share of the pizza. This example may be even more powerful than just telling someone they can spend coins with online, because you get to participate in the process with them.

Why is my transaction taking so long to confirm?

This is a problem almost exclusive to Bitcoin. I have no intention on having this post become a catalyst for the blocksize debate, but I do have to field this question often. Usually this problem for the newcomer comes from a lack of understanding how transaction fees work in the Bitcoin network.

Since miners have to process transactions and only so many transactions can be processed in a block, fees are required by the miners to put the transactions through. If you pay too low of a fee (as many of the Bitcoin neophytes I speak with do), the chances of the transaction being painfully slow and/or outright orphaned increase exponentially. While theyve usually paid enough that it will eventually get confirmed, this is can be frustrating for the new coin user.

From my experience, such a mistake is rarely made again. However this is one reason that I usually that the new user does a practice run with a seasoned cryptocurrency user by say, paying for your share of a pizza with Bitcoin. This way the veteran can help out, and usually waiting a bit longer for someone to pay you back for pizza will not break the bank.

Between these two posts, these are the five most common cryptocurrency questions that I encounter. As always, I hope my experiences are helpful to all the other cryptocurrency evangelists out there.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

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Most Frequent Cryptocurrency Beginner Questions Part 2 - The Merkle

BTC trading is relatively anonymous, and many online brokerages will not require any proof of identification when trading this cryptocurrency.

Bitcoin, or BTC, is a cryptocurrency that is traded as a commodity at many online brokerages. It is unique in many ways. For starters, BTC is not subject to central bank policy and it operates outside of the realms of regulation. BTC trading is relatively anonymous, and many online brokerages will not require any proof of identification when trading this cryptocurrency. BTC has revolutionized the way that retailers, buyers, and traders interact with one another and the markets. Many folks are now dabbling in Bitcoin trading in much the same way as they do with traditional currency pairs like the AUD/USD, GBP/EUR and USD/JPY among others. Fortunately, you dont need much trading experience to get involved in digital currency trading since everything is relatively easy to understand. However, novices will want to avoid the following pitfalls:

Most every financial trade can go one of two ways up or down. As a trader, you must be prepared for losses, and you should allocate a bankroll with that in mind. When you trade highly speculative financial instruments like BTC, losses are commonplace. This is especially true for novices who have little experience in currency trading, or digital currencies like Bitcoin. The golden rule is never to invest money that you need for everyday expenses. If youre going to trade BTC online, make sure that you have a diversified financial portfolio to act as a hedge against any losses you may accrue.

Trading currencies, commodities, indices, and stocks is inherently volatile. Trading cryptocurrency is especially volatile. It is extremely important to go into a trade knowing what goals you have in mind. You should always have a figure in mind when you take profits, or a figure at which you cut your losses. You do not want to be trading with an emotional mindset thats a recipe for disaster. Greed is the Achilles heel of many a trader. When a currency is rising relative to its peers, it is normal to want to continue benefiting on the upside, or downside when it appears that there is significant momentum at play. However, greed has led to more losses than anything else. Always keep target prices in mind. One way you may wish to do this is by trading with strategies. A good example of a BTC trading strategy is the trendline strategy. You certainly do not want to be trading in a euphoric state of mind, or in a state of mind where you are despondent. It is better to trade when an asset is rising in price, before it peaks, and before it bottoms out.

When you set a stop loss, you are setting an automatic liquidation of your trade. Once the trade hits a certain value, a sell order will be initiated and your trade will be closed out. If you are losing money, the stop loss will prevent you from losing more. The reason stop losses are so popular with traders is that it is impossible to keep your eye on hundreds of trades simultaneously, so the automatic stop loss will sell your losing trade to prevent further losses. Stop losses are important when youre using high levels of leverage. They prevent you from hemorrhaging cash when the trade is not going your way.

Technical analysis and fundamental analysis are important components of your trading arsenal. Even if you have little mathematical or statistical ability, it behooves you to research a little about charts and market trends. Once you understand the basics of chart reading, you will find that your BTC trades are much more successful. Several types of charts are available to you, including candlestick charts which display price movements over time intervals. You will note things like opening prices of BTC, closing prices, low prices, high prices and the trading range.

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Cryptocurrency Trading Techniques for Novices - newsBTC

Ticino, the southernmost canton of Switzerland, is planning to issue its own local digital currency for everyday use. Its circulation may be confined to Ticino territory.

The future cryptocurrency called ticinocoin (TIC) is a brainchild of computer scientists Claudio Rossini and Michele Fiscalini. The developers have already tested the currency: the pilot phase of the project was completed last week, reports Tribune de Geneve. Regional virtual currency based on the blockchain technology is expected to stimulate the local economy offering faster, more transparent and less expensive transactions. According to Fiscalini, circulation of TIC may be limited to local services and products from Ticino.

The expected exchange rate of TIC is one Swiss franc. However, operations with ticinocoin may require obligatory authorisation by FINMA, the Swiss monetary regulator.

Ticinocoin is not the first local currency in Switzerland. In 2015, Lmanic Arc introduced the regional currency Lmans. Now it accounts for more than 100,000 units in circulation. The launch of the electronic version of Lman is due in March. Another Swiss region, Valais, may introduce its own complementary currency Farinet in 2017.

Switzerland, the home of Xapo, Ethereum and ShapeShift, is regarded as a haven for cryptocurrencies and blockchain technologies. In May 2016, the City Council of Zug in the east Switzerland launched a pilot project allowing to pay for municipal services with bitcoin. During the initial phase of the programme, the maximum amount payable with the cryptocurrency was limited to 200 Swiss francs. The city authorities are not opposed to extending the experiment to other cryptocurrencies.

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Swiss canton to launch its own cryptocurrency - Finextra - Finextra

Cryptocurrency hardware wallet KeepKey announced in a press release sent to CoinReport that it has integrated cryptocurrency dash.

Those using KeepKey can now receive, store and send their dash on their KeepKey devices, and via the built-in ShapeShift function, swap between other digital currencies like bitcoin, dogecoin, namecoin and litecoin.

Dash currently has a market capitalization of over $120 million and stands seventh on the most valuable digital asset list. In September and October last year, the median 24-hour volume trading of the cryptocurrency was about $680,000. In November and December, the amount almost doubled. Now, in the first quarter of 2017, its averaging about $2 million per day.

KeepKey founder & CEO Darin Stanchfield

Partnering with Dash is the natural next step for KeepKey since our wallet is purely focused on security, mobility and convenience; attributes that Dash shares, said KeepKey CEO Darin Stanchfield in the release.

KeepKey protects digital assets from hackers by limiting their exposure to the internet. With this integration, we are extending our utility, and adding one more asset users can transfer to or from directly on our device.

Dash director of finance Ryan Taylor said on the occasion, As the ecosystem of services integrated with Dash continues to grow and mature, solutions to ensure user funds are stored as securely as possible is more important than ever. Because of Dashs unique capabilities and the announcement and execution of our software upgrade, weve experienced triple digit price appreciation, so many of our users will love having this option available to secure the growing value of their Dash.

We partnered with KeepKey because we aim to create the best overall experience for our users. The peace of mind and convenience that KeepKey can provide makes them a valuable addition to our family of partners. Their products also align well with our belief that the user experience should be a focus.

This beta release by KeepKey, however, will not support dashs InstantSend and PrivateSend functions.

We like to listen to the community and implement new technology in response to community requests and feedback. While hacks in todays global information age are pervasive, and so too is the rise of cryptocurrency, more and more people are investing in a digital vault for their valuable cryptocurrencies. Crypto assets vary in their characteristics, and attract the use of different audiences for different reasons. One thing we are certain of though is the trend for investing and holding multiple types of assets is becoming increasingly popular and KeepKey helps makes this both simpler and safer, Stanchfield added.

The entire digital currency market has almost tripled in value in a year, from $7 billion in January 2016 to more than $19.9 billion now.

Images courtesy of KeepKey via PR firm Wachsman PR

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Cryptocurrency hardware wallet KeepKey integrates dash - CoinReport

BitBay is a free software program that provides the security you need to protect all of your online transactions, especially at places like Craigslist, Hoobly and eBay Classifieds.

After keeping a low profile for some time, BitBay, the cryptocurrency software suite offering unbreakable smart contracts is now back with the most advanced and secure wallet in cryptocurrency space. The software suite is capable of supporting an entire smart contracting interface with decentralized markets and other features.

BitBay is a free software program that provides the security you need to protect all of your online transactions, especially at places like Craigslist, Hoobly and eBay Classifieds. It removes any centralized services from online transactions and allows buyers to interact directly with sellers safely and securely.

The platform offers unbreakable smart contractsfor important real world applications. These contracts are secured by collateral deposits from both parties, making them unbreakable. Further, there is no fear of fraud as the collateral funds will be burnt in case a party cheats or exits the contract with the intention of defrauding the other.

Arbitrators, biased third parties, escrow and even fees have been eliminated on BitBay due to their smart contracts system. Without any middlemen, it can create coins for cash contracts like a decentralized LocalBitcoins, where cash payments are completely trustless. It can also be used to create employment contracts, decentralized eBay-like delivery contracts, and even barter contracts.

The many user-friendly templates on BitBay let people create smart contracts by just entering few details. The pre- existing templates like Cash for Coins are already being used successfully and many new ones like buy/sell anything contract template are to be added to the platform shortly.

BitBay has a decentralized marketplace in place and the completely anonymous marketis built right into the client which allows users to create their own public and private markets. There is also the option to simply check different contracts already available in the main market.

The BitBay software allows communication between users by supporting email with end to end encryption like Thunderbird and it also supports Bitmessage for a more decentralized option.

Finally, BitBay also plans to launch their secret star feature soon, that will eliminate the cryptocurrencys volatility.

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BitBay Resurfaces with the Most Advanced and Secure Wallet in Cryptocurrency Space - newsBTC

One thing a lot of people do not like about bitcoin is how it takes an average of 10 minutes before a transaction receives a network confirmation. Various other cryptocurrencies, also known as altcoins, try to improve this block time by quite a margin. Some projects focusing on faster block times are more successful than others, though.

Litecoin is often referred to as the silver to bitcoins gold. Albeit not everyone may see it that way, Litecoin brings some very intriguing developments in the world of cryptocurrency, that much is certain. Compared to bitcoins block time, Litecoin generates network blocks 4 times as fast on the network. It takes an average of 2.5 minutes for this process to complete, which is quite an improvement.

For a cryptocurrency that offers privacy and anonymity features, Monero has proven to be quite a quick altcoin when it comes to generating new blocks on the network. With an average block time of just two minutes, Monero succeeds in providing users with anonymity features at 1/5th of the time bitcoin generates a block, which does not include any anonymity features.

It is interesting to note Monero used to have an even faster block time at one point in time. The developers decreased the block time to 60 seconds when Monero was first launched, yet they reverted it back to 120 seconds once the network started to settle. While 60 second block times may sound more preferable, 120 seconds does the job just fine for Monero.

Many people believe Ethereum is the worlds fastest cryptocurrency in terms of block generation time, but that is not the case It has to be said, Ethereum is somewhat in a league of its, with the average block time sitting at the 14 second mark ever since April of 2016. It is quite an impressive feat to see Ethereum keep the block time so low. Bitcoin users would like to see a similar strategy introduced by the developers, albeit it is doubtful that will happen anytime soon.

When it comes to generating blocks quickly, there is no competition for Ripple right now. Although Ripple is targeting a very different crowd compared to bitcoin,Monero, or the other coins mentioned above, the technology powering this network has proven to be quite solid. The average Ripple network block is generated in as little as 3.5 seconds.

Considering how Ripple is aiming to change the world of finance by collaborating with financial institutions all over the world, that 3.5 second mark is quite important. Blockchain-based assets are designed to make transactions more efficient. Ripple succeeds in allowing for very fast transfers at minimal fees, whereas bitcoin seems to get slower and more expensive until the scalability issue is addressed.

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4 Cryptocurrencies With Much Faster Block Times Than Bitcoin - The Merkle