Monthly Archives: March 2017

Prosecutors in Norway are demanding three darknet drug dealers to pay the penalty in Bitcoin. Read more...

Bitcoin has been portrayed as the most favored currency among the criminal kind. Thanks to increased usage of the likes of Bitcoin among the darknet marketplaces. However, the pseudonymous nature of Bitcoin leads to criminals getting caught on a regular basis. But usually, those who face the trial usually end up having their cryptocurrencies, devices confiscated, sentenced to jail time with or without a monetary penalty slapped on them.

The penalties paid by the dark net drug or weapons dealer caught in the act is usually in the form of fiat currency, but not in Norway. Recently, reports have emerged that the Norwegian prosecutors are demanding three convicts, charged with dealing drugs on dark web marketplaces, including the Silk Road to repay the profits in Bitcoin. If the court does allow the prosecutors to have it their way, then the dealers will be forced to pay about 120 bitcoins, which is worth around $140,000. But it doesnt end here. They are also demanding 3.1 million in the countrys native fiat currency, Norwegian Kroner as well.

The case dates back to the Silk Road days, and the three men were arrested way back in June 2015 for running an online drug distribution ring. The arrests were the result of a 2-year long investigation by Norways law enforcement authorities along with other international investigators. The arrests which took place in Oslo, Norway, also resulted in the seizure of a considerable amount of narcotics, computers and even an indoor marijuana farm.

News articles on media outlets state the prosecution saying that they have enough evidence for the sale in Bitcoins to convict the drug-dealing trio. However, the demand for profit repayment in Bitcoin is heard for the first time in the Norwegian judicial system. The demand made by prosecutors could soon set a precedent for other courts within and beyond the region to adopt a similar practice.

The governments interest in seeking Bitcoin payment, which is not even a recognized currency in Norway also sets a milestone in Bitcoins timeline, pushing it one step closer to recognition as a mainstream currency.

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Norway Asks Online Drug Dealers to Pay up, in Bitcoin - newsBTC

Moreover, people need to keep in mind not every altcoin is a bitcoin competitor.

No one can deny the cryptocurrency is thriving right now. Some people want to see more money flow to bitcoin and other currencies at a quicker pace, though. One interesting trend is how bitcoins percentage of the total cryptocurrency market cap is going downhill. Right now, that percentage sits close to 81%, whereas it used to be over 95% in January of 2014.

For the longest time, bitcoin has been the dominant cryptocurrency. That is only normal, as it is the only one to gain some market traction. However, several altcoins have proven to be a favorite among speculators and traders as well. Albeit very few of these currencies have use cases, they are perfect vehicles for value speculation. As a result, some money is flowing from bitcoin into the altcoin sector on a regular basis.

This trend is not alarmed by any means. In fact, diversification of a cryptocurrency portfolio is a good thing. While bitcoin still represents the vast majority of total market capitalization of all cryptocurrencies, its share is dropped. In fact, it has been dropping for quite some time now. Back in January of 2014, bitcoin represented 96% of the total cryptocurrency market cap. Fast forward that day, and that number has shrunk to just 84%. Not a big change according to some people, yet it goes to show something is changing behind the scenes.

Looking at the charts, bitcoin has gone through this cycle before. Its market cap percentage dropped below 80% in January of 2015, June of 2016 and Late 2016 as well. Bitcoin rebounds successfully every time, though, and it is expected this pattern will repeat itself once again. After all, there is no reason to ditch bitcoin holdings In favor of any altcoin right now, even though some investments may look appealing.

One contributing factor to the demise of bitcoin is the high transaction fee problem. With fees increasing rapidly, altcoins are becoming more popular due to lower costs. Then again, none of these networks have been tested to handle the transaction volume bitcoin processes every day. Until that happens, it is impossible to tell which currency can keep the costs down in the end. Reducing bitcoins fees would be a good start, though, that much is certain.

Moreover, people need to keep in mind not every altcoin is a bitcoin competitor. Ethereum, for example, is not positioned to be a currency like bitcoin. Neither is Ripple, as it is a competing technology that appeals to banks. Dash and Monero can compete with bitcoin, although the anonymity features may put off some people. Only time will tell how these percentages evolve over the next few months, though.

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Bitcoin's Market Cap Percentage Continues To Shrink Due To Mounting Transaction Fees - newsBTC

Government officials have always been keen on linking bitcoin to money laundering and terrorist financing. Even though none of those claims have ever been proven or verified, very few people seemed to make a fuss about it. A new UK report into this matter goes to show there is no reason to think bitcoin is involved in these malicious schemes by any means.

Ever since bitcoin started gaining popularity, claims have been made as to how this anonymous currency facilitates terrorist financing. That has always been a very disturbing claim, even though there was never any solid evidence to back up these claims by any means. In fact, this particular UK report goes to show how cryptocurrency is not used by terrorists, and most likely never will.

It is evident government officials overreact when they are greeted with new and innovative technologies. Particularly when these innovations take place in the financial sector. Terrorist financing has been a thorn in the side of government officials for quite some time now, yet they are no step closer to finding out where the money is coming from. Blaming bitcoin and other cryptocurrencies for this issue is a logical conclusion, even though officials are incapable of providing this is happening.

These claims started to become more apparent earlier in 2017. Indonesias AML and CTF agency claimed they uncovered a bitcoin transaction between various members of Daesh. While it is not unthinkable some of these users indeed own bitcoin, they are as likely to own Euros, US Dollars, and other national currencies. For some reason, no one seems to make a problem of those facts, yet the government is focusing a lot of resources to making bitcoin look bad.

Additionally, the EU Parliament is looking to pass a new legislation that will bring exchanges under stricter AML and CTF regulation. All bitcoin exchanges already conduct user identity verification procedures, thus it is a bit strange to think about what could happen in the future. Do keep in mind this new regulation will not prevent people from using cryptocurrencies, yet it will allow centralized companies to increase their due diligence measures.

While these concerns can somewhat be justified, the truth of the matter is how terrorist financing via cryptocurrencies is not a big threat right now. Creating a measured response should be the first priority, rather than making decisions that would hinder growth for bitcoin and other cryptocurrencies. Most of the reports regarding bitcoin and terrorist financing are speculative and unspecific at best. In parallel, terrorists are embracing digitization at an accelerated pace, and cryptocurrencies could become a favorable tool for terrorist organizations in the future.

Interestingly enough, the government is most concerned about mixers and tumblers. These platforms exist to provide more anonymity to bitcoin users, as they clean funds in the process. That said, the most popular funding methods for terrorist activities remain accessible financial services. Student loans, public benefits, cash, and even bank transfers through corrupt institutions are among the most commonly used methods. Traditional finance poses a far bigger threat to funding terrorist activity than bitcoin ever will, that much is certain.

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Bitcoin Does Not Facilitate Terrorist Financing, Report Says - The Merkle

Bitcoin Unlimited, the new grassroots client, reached 39.6% over a 24 hour period earlier this week, its highest ever. Now standing at more than 30% over the longer one week period.

Bitcoin Unlimited reaches almost 40% network share over the past 24 hours image from nodecounter

The new client aims to increase bitcoins transaction capacity to meet growing demand and reduce fees as they now average $1 per transaction. It further aims to return more predictable transaction times which currently can be delayed from hours to days.

It has found much support from miners with Antpool, bitcoins biggest mining pool, switching to Bitcoin Unlimited on Tuesday. The decision was somewhat surprising, but discussions of a flag day soft fork to force segwit appears to have incentivized the miner to move.

There are now in total ten mining pools on Bitcoin Unlimited, with just one further pool sufficient to allow for near 50% temporary share due to variance. One such pool is to be expected as Chandler Guo, a digital currencies miner, is to open a new pool that will mine on Bitcoin Unlimited.

It is not known if any business is running the new client, but Blockchain.info, Coinbase, Bitpay, Bitgo and many other bitcoin businesses, have advocated for bigger blocks in general and have complained regarding delays.

Critics say Bitcoin Unlimited gives power to miners regarding blocksize decisions and its emergent consensus system is untested. Supporters argue that all nodes decide on the blocksize and the emergent consensus system has been live tested during the increase of the soft limit from 250kb to 500kb to 750kb and then 1MB.

There are arguments on whether the system allows for re-organization with Charlie Lee, Litecoins Founder and Coinbase employee, stating that if at any point, the [Bitcoin Core] chain grows longer (in PoW) than the [Bitcoin Unlimited] chain, the BU client will reorg to the [Bitcoin Core] chain.

ViaBTCs founder, Haipo Yang, has suggested that miners wait for Bitcoin Unlimited to reach 75% of the networks hardware share to avoid a chain split on the same proof of work chain.

There is, however, a community split. Thus, blockstream employees might PoW fork the chain, but BTC.TOPs founder, Jiang Zhuoer, has stated that $100 million has been set aside to attack any minority chain and make it inoperational.

Any upgrade to bigger blocks is likely to be gradual to give businesses and node operators considerable time. As the client is now nearing 30% share over 1,000 blocks with variance giving it 40%, such upgrade process might begin.

If it nears 40% in the longer 1,000 blocks time-frame, then there might be a shift in attitude as temporary variance would give it 50%. Thus, the client gains serious consideration with activation likelihood considerably increasing.

It is at 50% when, conceptually, it is a done deal. At that point, all businesses will want to be running the BU client. Miners, too, might find it safer, while the general opinion would probably move to ask when, rather than if.

The time frame is probably months, if this year at all. The likelihood of its activation is difficult to predict, but segregated witnesses has stagnated, leaving BU as the only standing option at this point in time.

Once it activates, there is no difference whatever as far as end-users are concerned except that fees would be lower and transaction times would be more predictable. Due to bitcoins current politics whereby Michael Marquardt, r/bitcoins top moderator, applies biased censorship, miners are incentivized to attack the minority chain to avoid any arguments over the bitcoin name. A chain split therefore appears unlikely, but if there is one, there is no difference for end users except that now they hold their coins on both chains.

If Bitcoin Unlimited does activate, it would be the first time ever in the entire blockchain space that a decision in such a decentralized manner without any guidance or leadership has been made.

Image from Shutterstock.

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Bitcoin Unlimited Reaches Almost 40% - CryptoCoinsNews

Buying and selling bitcoin and cryptocurrency in a decentralized manner becomes more important and popular. Peer-to-peer exchange platforms have a big role to play in this regard. Moreover, the number of p2p cryptocurrency exchanges continues to increase every year. Below are some of the top P2P bitcoin trading platforms people may want to take a closer look at.

Although the OpenBitcoinsplatform is not available for actual peer-to-peer trading just yet, it is good to see more of these services being developed as we speak. Users will be given access to a P2P trading environment where escrow protection is offered for every single transaction. Doing so minimizes the risks for buyers and sellers. Moreover, the platform will not charge a commission or fee for trading activity. It is unclear when OpenBitcoins will launch, but the platform offers a lot of promise.

Creating a decentralized bitcoin exchange is not an easy feat by any means. The Coinffeine team set out to create an open source peer-to-peer bitcoin exchange quite some time ago, and launched their platform a while ago. As one would come to expect, users will always be in control of their funds at any point during the trade. Additionally, the peer-to-peer aspect of Coinffeine ensures personal information disclosure is kept to a bare minimum.

What matters even more to most people is how there will be far less operational costs involved with running a peer-to-peer platform. Right now, Coinffeine charges no fees whatsoever, although that situation may change over time. The only downside to platforms like these is how they may struggle for liquidity. If no one uses Coinffeine to execute trades, finding a buyer or seller can be a painstaking process. Moreover, users need to download the software to access the platform, which may be a technical hurdle few people are willing to tackle.

One of the peer-to-peer bitcoin trading platforms getting a lot of attention as of late goes by the name of BitSquare. This open-source desktop application allows users to buy and sell bitcoin and other cryptocurrencies as they see fit. Although installing the proprietary software may be a stretch too far for most novice users, it is well worth looking into P2P exchange opportunities. Moreover, BitSquare has quite a novice-friendly user interface without too many bells and whistles.

One thing that makes BitSquare so appealing is how there is no registration process involved, and there is no central point of failure. Moreover, the BitSquare software never holds onto users funds and does not collect any personal information in the process. It is also one of the most convenient pieces of peer-to-peer bitcoin trading software to be created so far.

LocalBitcoins is the go-to trading platform for peer-to-peer bitcoin trades. Although this platform is not decentralized, it goes to show centralized platforms can benefit P2P trading activity as well. In fact, it appears LocalBitcoins is seeing more volume every week, as new records are set on a very regular basis. With markets available all over the world, LocalBitcoins is the most popular peer-to-peer bitcoin trading platform without question.

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Top 4 Peer-to-peer Bitcoin Trading Platforms - The Merkle