Editor of Naation: Communicating to the world the advantages of financial technology, Bitcoin, Ethereum, sidechains, and blockchain in general. Founder of Etherplan: The global wealth management network. Co-founder and advisor of Global Financial Access: Helping people everywhere access assets issued anywhere in the world. Previously, was founder of McIntyre S.A., Dineronet, and Senior Vice President at Morgan Stanley and Vice President at UBS Securities.
The basic functionality of Bitcoin is to store, send and receive the digital currency, but on top of this other functionality can be added to support what are called smart contracts and smart property.
The idea is to eventually provide services like lending, property registries, distributed exchanges, share IPO’s and more all on top of the Bitcoin network that not only includes the block chain, but also an ever increasing information processing capacity through the Bitcoin miners.
In this interview Ron Gross talks about one of the projects seeking to create these new protocols to expand the functionality of Bitcoin: Mastercoin.
We spoke about:
– Ron’s background and role in Mastercoin.
– What is Mastercoin?
– Is it formally organized as a non-profit?
– Is the protocol open source?
– What is the Mastercoin currency?
– What functionality is being built on top of Bitcoin?
– How does it use the Bitcoin block chain?
Juan Llanos, member of the Regulatory Affairs Committee of the Bitcoin Foundation, and I agree that yesterday was a turning point for Bitcoin and digital currencies in general.
In a hearing at the US Senate Committee on Homeland Security and Governmental Affairs with Senator Thomas Carper a panel of high ranking government officials expressed the same concept: “digital currencies are legal and we must support innovation”.
However this idea was communicated with a reasonable condition: “but all new services and new digital currency providers must comply with the law, get registered and get proper authorizations, licenses, and establish the required internal compliance processes.”
Juan was present at the hearings in Washington and in this interview he talks about the key concepts and the highlights of the testimonies and Q&As.
We spoke about:
– What is the importance of this particular Senate Committee?
– The positive attitude of Senator Thomas Carper.
– Who were the government officials testifying?
– What were the key concepts expressed?
– Is Bitcoin declared legal?
– What is the tone now going forward?
For the last four years the Future Of Money & Technology Summit has been gathering the best minds, entrepreneurs, investors, and executives in finance to discuss how the industry of money is shaping the future.
This year the gathering will be all about crowdfunding, Bitcoin and other digital currencies, new payment systems, and the speed of change (and lower costs) in global money transmission.
In this interview Brian Zisk, founder and Executive Producer of the summit, talks about the conference and when and where it will be held.
We spoke about:
– Brian’s background and why he started the summit.
– How many people will attend and who should go?
– What are the topics and how is the conference structured?
– Who are the panelists and are there new finance startups presenting?
With Bitcoin’s popularity on the rise more and more people around the world are asking how to start using it and what are the best tools available.
The basic features with many services are the abilities to store, send, and receive bitcoins, but once this is solved the next natural step is to find a place to buy and sell the digital currency.
Coinbase and Bitstamp are two of the most popular exchange services especially among American users.
San Francisco based Coinbase is known as “the PayPal” of Bitcoin and its main focus is to provide easy access through simple and intuitive services for individuals, merchants, and investors.
Bitstamp is located in Slovenia and its mission is to be an efficient Bitcoin exchange solution with robust trading services and easy deposit and withdrawal of traditional currencies.
How do they compare?
Buy and Sell: Both services provide bitcoin/US dollar exchange services, but they differ in their style. Coinbase users buy and sell bitcoins directly from the company. They publish their bid and ask prices on their service and users can go to the “buy/sell” page to enter their orders. In the case of Bitstamp the company acts as an exchange where users buy and sell between themselves at the best prices offered on the system.
Link Bank Account: On Coinbase US customers can link their bank accounts to move dollars between their financial institutions and Coinbase. Once this is done the deposits and withdrawals are automatic each time they buy and sell Bitcoins. On Bitstamp this service is available for EU customers, US users can deposit and withdraw dollars by wire transfer.
Instant Orders: Once the accounts are setup and funds deposited users of both services can buy and sell bitcoins and both companies offer Instant Orders. This means that when users enter their buy and sell orders they are executed immediately at the best price available at that time.
Limit Orders: These orders consist of buying and selling at specific prices indicated by the users. Coinbase doesn’t support this type of order. On Bitstamp users can enter limit orders that stay open until they are either cancelled by the client or executed in the market.
An order book is a screen where all the bid and ask orders are published with the price and volume information so all buyers and sellers can see the depth and breath of the market. Bitstamp offers this feature in a chart and in list format. Because Coinbase doesn’t handle customer orders they only publish their own bid and ask prices with no volume information.
Holds Bitcoins: This is the ability to store and hold users’ bitcoins in their service. On both Coinbase and Bitstamp they hold and store Bitcoins for their customers. Users can also check their balances and account activities on both services.
Holds Dollars: This is the ability to store and hold customers’ dollars in their accounts. In the case of Bitstamp customers can deposit, store, and withdraw US dollars whenever they want. Because of compliance reasons Coinbase doesn’t yet hold dollars on their customer accounts. Each time users buy and sell bitcoins the dollars are deposited and withdrawn from their clients’ accounts in their financial institutions using the ACH automatic transfer system.
Other Currencies: For deposits and withdrawals Bitstamp supports US dollars, British pounds, and Swiss francs. In the case of Coinbase for now they only support US dollars within the United States.
Coinbase offers full wallet services that include the ability to send and receive bitcoins by email and SMS. In the case of Bitstamp users need to get wallet services from 3rd parties, but they can link them to their Bitstamp investing accounts.
Which one should I use?
If you live in the US and prefer an easy to use service with the ability to buy and sell bitcoins then Coinbase is your best option.
If you are seeking more advanced trading services with the ability to deposit and withdraw in other currencies as well then Bitstamp is your best alternative.
Based in Montevideo, Uruguay, with great enthusiasm and a clear business strategy, entrepreneur and Moneero co-founder, Steve Morell, gave me the impression they are building what I would call a “PayPal 2.0” for Bitcoin, but on steroids!
Packed with features like easy Bitcoin address names, SMS transfers, the ability to assign Twitter handles, Facebook names, and email addresses to Bitcoin accounts, the company is thinking of all possible use cases for all regions globally.
In this interview Steve talks about the company and his vision for a true and easy to use digital currency product.
We spoke about:
– Steve’s background and how he got involved with Bitcoin.
– Why Uruguay?
– What are Moneero Social and SMS?
– How does the Moneero BTM work?
– The Moneero exchange, a buy side service?
– How are they helping “new-to-Bitcoin” customers with the BTC Experts?
If you are a Bitcoin entrepreneur anywhere in the world you need to watch this interview with Juan Llanos, member of the regulatory affairs committee of the Bitcoin Foundation.
In many cases it doesn’t matter where your company is located, what matters is where your customers reside!
Also, if you are a Bitcoin enthusiast and customer of new Bitcoin services, this concerns you too. The rules are strict and if your wallet or exchange providers are not properly licensed you could lose your money.
We spoke with Juan about these topics:
– What is FinCen?
– How do startups go about registering on a federal level?
– What is the cost?
– What are the requirements to register on a state by state level?
– What are the different “styles” of regulation between states?
– What are the implications for international startups?
Pay day lending alternative platform LendUp announced it received a new round of funding led by Google Ventures.
The company’s value proposition is to lend up to $250 for up to 30 days letting its customers select the re-payment date so it’s not necessarily linked to the pay day itself nor debited automatically from users’ paychecks.
The other advantage they offer is to actually approve borrowers loans in minutes and even depositing the money into customers’ accounts immediately.
But the best part of the company’s service is their focus to help users build their credit with their “LendUp Ladder” where customers get bigger loans as they show their good track records and this information is submitted to national credit bureaus.
In this Interview Sasha Orloff, LendUp’s co-founder and CEO, talks about the new funding round and the plans for the near future.
We spoke about:
– The $14 million round and the investors: Google Ventures, QED, and Data Collective.
– Recap: What is LendUp?
– How does the service help borrowers build credit?
– How will the new money raised be used?
– Expanding nationally?
Bitcoin is not only a new form of money, but also a great solution for societies with unstable economies and populist tendencies where governments restrict access to foreign currencies to make up for their fiscal undoings. It is no wonder then that in Latin America the crypto-currency is developing fast as well.
Diego Gutierrez Zaldivar, President of the Argentine Bitcoin Foundation, is one of the big promoters of Bitcoin in the region and in this interview he talks about the first Latin American Bitcoin Conference (laBitconf) to be held in Buenos Aires.
We spoke about:
– When is it going to be held?
– Who can attend?
– Who are the panelists?
– What topics are they going to talk about?
– Will there be Latin startups presenting?
– How are the levels of adoption in Latin countries?
When Satoshi Nakamoto created the Bitcoin protocol he envisioned the system not only as a way of moving money from one owner to another, but also as a broader mechanism to manage agreements and instructions.
The way he implemented this was by creating a space within Bitcoin transfers where users could enter scripts stating conditions for their transactions.
This functionality opens a whole new game where service providers and startups can build on top of the Bitcoin network to create new products and services with innovative business models.
In this interview Mike Hearn, Google Engineer and Bitcoin Core Developer, explains what was Satoshi’s idea and what applications he envisions for the future of Bitcoin.
We spoke about:
– Mike’s background and how he started with Bitcoin.
– How can “instructions” be entered into Bitcoin transactions?
– Smart contracts.
– Smart property.
– Potential applications.
Slovenia based Bitstamp is one of the world’s top Bitcoin exchanges ranking 3rd in volume as of this writing after Chinese exchange BTC China, the Japanese Mt.Gox, and above Russian exchange BTC-e.
Individuals and institutions can open accounts to buy and sell Bitcoins on Bitstamp provided they verify their identity according to company and European compliance standards.
Bitstamp in general has a very good and responsive customer service and the deposit and withdrawal times are generally within normal parameters of between 2 and 5 business days for dollars, euros, British pounds, and Swiss francs.
Bitcoin vs US Dollar Trading
For now the service only provides trading of bitcoins against US dollars.
Verify Account: To use the account in any way it needs to be verified. The process is very simple and consists of entering additional identity information including full name, address, date of birth, and scanned copies of your government issued ID and proof of residence.
Send Money: Once your account is verified you can send Bitcoins, euros, dollars, Swiss francs, or British pounds. The Bitstamp account supports dollars and Bitcoins so if you send any of the other currencies they will be exchanged into dollars at no extra charge. The methods to deposit are:
Bitcoin: Transfer to the Bitcoin address they provide for your account. No fees charged.
Euros: Transfer through the SEPA system to the account number they provide. No fees charged and they are credited in 1 to 3 business days.
US dollars, British pounds, and Swiss francs: Wire transfer to their account and then they convert to US dollars if applicable and deposit to your Bitstamp account. They charge in all cases a 0.1% deposit fee on their side with a minimum of $15 and funds are credited within 2 to 5 business days.
Buy and Sell:
Once your money is credited you can start trading bitcoins immediately. The exchange operates 24 hours a day 7 days a week. You can buy and sell to the limit of your account value.
Instant Orders: If you want to buy or sell bitcoins at the current market price you can enter what they call instant orders. They will execute your order at the best price on the exchange.
Limit Orders: If you want to buy or sell bitcoins at a specific price then you can enter the order at that level and they will publish it on the order book and execute it when someone else wants to buy or sell at that price.
Commissions: They charge between 0.50% and 0.20% per trade depending on your monthly volume.
The order book is a great feature because it’s where the exchange shows all the open orders it has from its clients.
The first part of the order book is a chart that represents all the orders organized by type (bid or offer), price, and volume. This is a very efficient way of looking at the market depth and also analyzing the open interest so you can decide how to set and manage your orders.
Also, below the chart is their list of all the open orders organized in two columns (bids and offers) with the same data of the chart with respect to volume and price for each order.
Withdrawals: To withdraw money is as easy as to deposit. You can draw your money in Bitcoins, euros, dollars, Swiss francs, or British pounds:
Bitcoin: You can enter your private Bitcoin wallet address and withdraw your bitcoins from your Bitstamp account at no charge.
Euros: To withdraw euros your dollars will be exchanged into euros and then they will charge 0.90 euros for your SEPA transfer. It takes from 1 to 3 business days and the minimum is $10.
US dollars, British pounds, and Swiss francs: They will exchange your dollars to the destination currency if applicable and charge a 0.09% transfer fee with a minimum of $15. It takes from 2 to 5 business days and the minimum is $50.
Bitstamp is a well known and reputable Bitcoin exchange. Its efficiency and excellent customer service has won the business not only of individual and institutional traders and investors, but also of many Bitcoin startups and companies that use it as their default exchange partner. This has helped the company grow in volume and share within the market.
If you are looking for an easy to use and professional service to start buying and selling Bitcoins then Bitstamp is an excellent option.
Coinkite has a longer term approach to the crypto-currency business and they define themselves as a crypto-bank rather than a wallet service only.
Their value proposition is unique because in one single wallet users can have separate accounts and in different denominations. Also, their merchant services are advanced in features and hardware.
Send and Receive: This is part of the basic digital currency network functionality all wallets provide.
Buy and Sell: Users need to use third party exchange services, but they can link their addresses to receive their coins in their Coinkite wallets.
Debit Card: This is one of Coinkite’s key differentiators. Users can request a debit card that they can link to any of their Coinkite accounts (Bitcoin, Litecoin, or any other they might have). When they go to merchants that support this payment system they can use them to buy their products and services.
Litecoin, Other: The Coinkite wallet service also supports Litecoins and they will include more digital currencies in the near future. This makes their service a “multi-digital-currency” service. Regardless of what denomination your money is in you have all your accounts and addresses under one wallet.
Merchant Services: They provide services for merchants to get paid in Bitcoins and other crypto-currencies online and offline. Each merchant gets a private web page to track their accounts and users can go and pay there too.
Merchant Hardware: This is another of Coinkite’s key differentiators. They manufacture and provide a POS style machine for merchants to be able to charge when their clients use the digital currency debit card mentioned above. The machine works like a traditional credit card machine and also shows a QR code when customers want to pay with their phone apps instead.
Link Bank Account: As mentioned above their service is limited to crypto-currencies so they don’t provide links to regular bank accounts.
Pay by Email: Users can send and receive digital currencies using their email.
Web and Mobile: All their services are accessed through their website which is “responsive” meaning it adapts to users’ screens when accessed through mobile devices, therefore all functionality is available on all devices.
Keys Backup: Users can backup their private keys, but they charge a small fee because they prefer the keys to be kept in their encrypted servers rather than on their users’ devices which may be compromised more easily.
You Control Keys: They keep their clients’ keys encrypted in their servers so only users can access them, therefore users have full control of their keys.
Coinkite has three account plans, none charge the mining fees for faster transaction processing since the company assumes those costs. Their “Simple, fair pricing” levels are:
Mini: This is based on withdrawal fees where they charge a 2.47% per withdrawal except for the first one which is free in case the user didn’t like the service. Users can get up to 2 sub-accounts per currency account, there is no free debit card in this plan and merchants don’t have access to a point of sale (POS) hardware device. When users pay at merchants who have their POS device there are no withdrawal fees.
Standard: This one is base on a monthly or yearly fee of BTC 0.03 or BTC 0.3 respectively. Users get 10 sub-accounts per currency account, 1 free debit card, 1000 free withdrawals per month, and if they are merchants they can buy the POS hardware device to get paid with the Coinkite debit cards. All withdrawals at merchants with the POS device are free.
Business: This plan costs BTC 0.09 monthly or BTC 0.9 annually and users can get unlimited sub-accounts, unlimited free withdrawals, up to 10 free debit cards, unlimited free withdrawals at POS, an extra discount on merchant terminals, and priority email support.
With more than 500,000 users as of this writing (and growing fast) Blockchain.Info is one of the most widely used Bitcoin wallet services world wide. It is a perfect service for users who prefer full control of their wallet keys as well as comprehensive information about the Bitcoin network and the market.
Send and Recieve: This is part of the basic Bitcoin network functionality all wallets provide.
Web: Blockchain.Info is a pioneer Bitcoin wallet and information service. Users count with full web acces to their wallets and comprehensive block chain information. Their live market price and charts service is very advanced and sourced from multiple exchanges.
Mobile App: They provide both Android and iPhone apps. All wallet services are included and they are synchronized with the web application meaning whatever you do in the app is immediately reflected on the website.
Key Backup: Blockchain provides full backup functionality. Users can download their wallets to their computers, back them up on DropBox or Google Drive, send them by email, or print them.
You Control Keys: The company’s policy is to manage as little data as possible. They hold encrypted copies of their users’ keys so they don’t have access to their accounts. This means users have full control of their wallet keys.
Market Information: They provide live prices, volume, and transaction information from multiple exchanges.
Buy and Sell Bitcoins: Users need to use third party exchange services, but they can link their addresses to receive their Bitcoins in their Blockchain wallets.
Block Chain Explorer: They provide comprehensive Bitcoin network information including analytic charts and block chain statistics.
Link Bank Account: Their service is limited to the Bitcoin currency so they don’t provide links to regular bank accounts.
Pay by Email/SMS: They only provide regular Bitcoin send and receive services, no email or SMS transfers.
Merchant Services: Users need to use third party merchant services, but they can link their addresses to receive their Bitcoins in their Blockchain wallets.
Decentralization is one of the key characteristics that makes Bitcoin so attractive, but government’s natural needs for regulation, the normal dynamics of market forces in the mining sector, and even the protocol development process are all types of activities that tend to centralization.
This issue is one of the top priorities for Elizabeth Ploshay, recently elected board member of the Bitcoin Foundation. With regards to the relationship with governments she stressed the need for communication and also education about Bitcoin for government officials, but at the same time she is of the opinion that the community “cannot and should not compromise” its distributed model of governance and development.
In this interview we spoke about:
– Her background and previous experience working in Congress.
– What is the mission of the Bitcoin Foundation?
– What is the reach and who does the foundation represent?
– How do they balance the tension between decentralization and centralization?
– What is “organized decentralization”?
– How are relations with Government?
Interview with Juan Llanos Of The Bitcoin Foundation
Just as I realize that Bitcoin is such a world changing technology, government agencies and regulators are also realizing how risky it may be.
It’s not about government obstructionism, it’s about money laundering, terrorism financing, and the integrity of the financial system. These issues are top priority in Capitol Hill and the White House and we just have to live with it.
Juan Llanos is member of the Regulatory Affairs Committee of the Bitcoin Foundation and a veteran anti money laundering expert. In this interview he opened my eyes as to what are all the risks involved in starting a Bitcoin or digital currency business.
Yes, FinCen has laid out guidelines in March of this year, but the issues are more profound and more government agencies, federal and state, are looking at crypto-currencies and analyzing their nature to decide whether to establish more controls or not.
My personal opinion is that FinCen settled the “money transmitting” and “exchange from digital to fiat” issues, but the other questions are: Is Bitcoin an investment security? Where are bitcoins deposited? Is the block chain the “bank”? Should the block chain itself be regulated just like financial institutions are?.
Of course the best scenario would be to regulate the layer of the services operating on top of the Bitcoin network instead of Bitcoin itself, but the issues are still open and thus so are the risks. This includes trading risks.
Millions of people around the world have heard and are curious about Bitcoin. Many are already using the digital currency and many more are planning to start using it in the near future. But the question everybody asks is:
What Bitcoin wallet should I use?
There are several solutions in the market, but currently there are two leading the way with value added services on top of the base Bitcoin protocol.
These two services are Coinbase currently serving 329,000 wallet users and Blockchain.Info which just in the last few days surpassed 500,000 wallet users.
Coinbase is a private company based in San Francisco, California, that provides web and mobile Bitcoin services. Their mission is to provide Bitcoin value added products for consumers and merchants. Coinbase is recognized as “the PayPal” of the Bitcoin Network.
Blockchain.Info is also a private company, but based in York, United Kingdom. The company provides full Bitcoin market and block chain exploring information and wallet services. It is recognized as one of the first information and wallet services in the Bitcoin network and very well respected in the community.
How do they compare?
As shown in the comparison chart above there are several things to take into account when deciding what solution to use. It all boils down to your personal needs and your security preferences. These are the descriptions for each feature:
Send and Receive: The first thing you do when you get a Bitcoin wallet is to acquire your first bitcoins by selling products and services or by buying them. After that you need to be able to transfer them to pay for things or sell them. For this the features of Send and Receive are needed and the two solutions mentioned above provide this. They also have the Address Book functionality that lets you store names and Bitcoin addresses so it’s easier to manage your transfers.
Buy and Sell: If you need to buy and sell bitcoins as an investment or for payment purposes you can use Bitcoin exchanges. For this you need to transfer back and forth bitcoins to and from your exchange accounts. In the case of Coinbase it has this service integrated into its wallet and merchant products. On Coinbase you can easily buy and sell bitcoins directly from your account without having to move them elsewhere. Blockchain doesn’t offer this service, but they do provide links to their partner exchanges.
Link Bank Account: When you link your US dollar bank account with your Bitcoin account you can easily move money between them. Coinbase provides this feature. In the case of the Blockchain Wallet you need to handle the dollar transfers and payments separately from your bitcoin movements.
Pay by Email: PayPal pioneered the ability to send and receive money using your email account. Coinbase is emulating this by providing the same functionality but with your Bitcoin account. By entering an email address you can send Bitcoins to anyone and anyone can send Bitcoins to you using your email address. On the Blockchain Wallet you need to use the 30 character Bitcoin address instead.
Merchant Services: If you use the Blockchain Wallet you can get paid when you sell products and services by providing your Bitcoin address. This is a 30 character code that anyone can use to transfer the digital currency to your account. In the case of Coinbase they have taken this further by providing “Buy”, “Subscribe”, and “Donate” buttons that are linked to your account. These buttons can be installed in your website so your clients can pay just like they would by clicking your PayPal or other payment buttons.
Web: Both services have web based services. This means you can open your Bitcoin wallet and fully manage it and use all their services on their website.
Mobile: Both Coinbase and Blockchain have full service mobile apps that work on Android and iPhone and synchronize with their web services.
Wallet Backup: Only Blockchain lets you download, store on your DropBox or Google Drive, send by email, or print on paper your Bitcoin wallet private and public keys. In the case of Coinbase they host your keys in their servers.
Block Chain Explorer: This is the reason Blockchain.Info gave itself this name. They provide a full view of all the transactions and analytic data of what is happening in the Bitcoin network.
You Control Private Key: To be able to transfer bitcoins in the network you need your public Bitcoin address and your private key which is secret. On Blockchain.Info they generate and keep an encrypted copy of your keys on their servers, but as mentioned above, you also have full access to download or back them up therefore you have control of your keys.
They Control Private Key: In the case of Coinbase they control your private keys. This is because it is the only way they can serve as a gateway to the Bitcoin ecosystem and provide their value added services. It is more or less like a bank account: When you have dollar bills in your wallet you have full control of your money, but when you deposit them in the bank they have control of your money.
Since storing and holding Bitcoins in the network is done through 2 security keys, one public and one private for each wallet, then the question of who holds the keys becomes the main safety issue.
Blockchain.Info: They generate this pair of keys when you open your wallet, but they keep the “custody” of the keys. The advantage they provide though is that you can download, export, or print your keys if you wish to back them up in an external place outside of their servers. This provides an additional level of security because if the company disappears you still have access to your Bitcoins by having your public and private keys. You just need to download or go to another wallet service and import your existing keys there to access your money again.
Coinbase: As mentioned before, because they provide additional services for users and merchants, on Coinbase your wallet is as secure as the company and its technology are. Because users interact with Coinbase and thus indirectly with the network, they need to entrust their security keys to the company just like they would their money with PayPal or with a bank. Because Coinbase is compliant with federal and state regulations and counts with the support of important investors it is considered to be a safe Bitcoin service provider.
For a simple and full service experience Coinbase offers the best alternative. If you want to easily open a Bitcoin account, use it on the web and on your mobile device, and maybe even sell your products and get paid in Bitcoins then the Coinbase Wallet is the best way to start.
For more advanced users who wish more control and flexibility then Blockchain.Info is the best option. Although it doesn’t offer merchant or trading services, its open model permits the Blockchain Wallet to easily interact with third party providers like Bitcoin exchanges and other services.
In our previous video Michael Goldstein explained how the Bitcoin network can be used for more functions on top of the currency transfers. This functionality is called smart contracts and it consists of adding to each Bitcoin transaction some code script to “condition” transfers to external events happening as a requisite to the transfer.
For example “time locking” can be used to determine a future moment in time to execute the transfer, 3 signatures can be established to have third parties verify transactions, or assurance contracts can be determined to enable funding for special projects.
In this interview Michael explains another functionality that can be integrated to Bitcoin transactions: Smart Property.
He talked about:
– How the block chain, ledger, mining, proof-of-work, and network consensus work.
– What is smart property.
– Real life examples.
– Public and private key management.
– How property can be registered, transferred, and used on the block chain.
Since Bitcoin is a technology that enables a new type of currency never seen before (a digital currency that behaves like a commodity currency) traditional economic schools, even Austrian, don’t really have yet the theoretical framework to explain it.
This is why the contributions and research around Bitcoin of Peter Surda, arguably the first Bitcoin economist, are a must to understand the digital currency and its prospects for the future.
In this interview Peter talked about some of his findings, research, and opinions about Bitcoin.
We spoke about these topics:
– Is Bitcoin an alternative to traditional fiat money and gold?
– The inelastic supply of Bitcoin, is deflation a problem for Bitcoin adoption?
– Is a lending market with a free fractional reserve system possible?
– If identical forks can be created, like Litecoin, does this mean the supply is maybe unlimited?
Bitcoin is not only a currency and a payments network that is changing the way we manage our money, but also a passion for many of us who follow what’s happening in the space.
It was amazing to read the news today that BitPay, a leading Bitcoin payments service provider (PSP), processed a $1,000,000 transaction for its client, Kansas City-based Bitcoin mining hardware manufacturer, Butterfly Labs.
Tony Gallippi, founder and CEO of BitPay, was kind enough to sit for a G+ Hangout interview to discuss the historic transaction and to explain what is BitPay and how it works.
We spoke about:
– BitPay proccessed a historic $1,000,000 Bitcoin transaction!
– What is BitPay?
– A global service? Can merchants connect their bank accounts?
– Why is Bitcoin a better payment medium?
– Why is BitPay good for international and large transactions too?
– What are the fees for merchants?
With the latest startups the digital currency revolution is entering the “services phase” where the basic functionality of “send and receive” or “buy and sell” are being integrated into more sophisticated (and useful) products.
Coinkite is an example of this new chapter. As Rodolfo Novak, co-founder and CEO, describes it Coinkite is a new kind of provider, it’s a crypto-bank.
But it’s not the traditional kind of bank you would imagine. In this interview Rodolfo explains several aspects of the service they are presently rolling out and what to expect for the future.
– The Coinkite digital currency wallet (web and mobile).
– Supports Bitcoin and Litecoin accounts and will support all relevant digital currencies in the future.
– Multi-digital currency savings accounts.
– Multi-digital currency debit cards.
– Payment machines for stores (POS hardware).
– Online payments.
BIPS has integrated regular currencies (fiat money) with digital currencies in Europe. Their Bitcoin internet payments solutions really works globally, as the digital currency is, but the ability to move money to and from regular bank account is restricted, for now, to the region.
In this interview Kris Henriksen, founder and CEO of BIPS, talks about their current services and his prospects for the near future.
We talked about:
– The BIPS Bitcoin wallet.
– Bitcoin payment processing services for merchants.
– Connection to Euro and Sterling bank accounts.
– BIPS as a currency exchange service built in the wallet.
– Email and SMS send and receive functionality.
There are two major networks redefining money and the way we transfer value around the world: Bitcoin and Ripple. In the case of the former it is a concept similar to gold because it stores value, it is scarce, it can be divided, and passed from one person to the other to settle debts or transactions.
Ripple, rather than being an asset like Bitcoin, is a global network of people and entities who settle debts and transaction by transferring value using their trust connections.
The question is: how does a “trust” network work and let alone globally?
This is what Ryan Fugger, the creator of the Ripple, explains in the interview below.
We spoke about these topics:
– How did he come up with the idea of Ripple?
– Money: from local exchange trading systems, to government money, to trust networks.
– Economic transactions paying with trust rather than money.
– The transfer of IOU’s as a form of payment.
– Scaling it globally!
Satoshi Nakamoto, the creator of the Bitcoin protocol, and other early Bitcoin developers, contemplated the possibility that if their crypto-currency invention took off maybe, just maybe, it could also be used for more complex transactions rather than just the instant transfer of value from one place of the earth to the other at no cost and with no friction.
What if “conditions” could also be added to each transaction on top of the basic bilateral Bitcoin transfers?
Now that Bitcoin is actually taking off many community members are already planning new integrations within the platform following these original and visionary ideas.
All of this is possible because the basic Bitcoin program has spaces where new code scripts can be added so that more functionality can be created to enable these new formats.
In this video Michael Goldstein of Bitstein Consulting explains what new features can be added and what types of “smart contracts” may be enabled thanks to these new features.
We spoke about:
– How encryption is related to security and thus freedom.
– Bilateral money transfer with no need of banks or government.
– Bitcoin (like gold) as sound money.
– Smart contracts:
> Instructions can be added in Bitcoin individual transactions.
> “If then” conditionals can be used to transfer Bitcoin when certain criteria is met.
> 3rd party signatures may be added for the resolution of conflict in contracts.
> Assurance type transactions can be intiated to complete projects like on Kickstarter.
Please watch the video below:
In our next video with Michael we will talk about “smart property” in the Bitcoin network.
This is recommended reading by Michael regarding smart contracts:
Kraken is a foreign currency exchange that let’s individual traders and institutions in the US and abroad trade fiat currencies like the US Dollar and the Euro against digital currencies like Bitcoin, Litecoin, Ripple, and Ven.
Trading a “pair” means that you can trade Bitcoins (Symbol: XBT) for Dollars (Symbol: USD) and so on.
On Kraken you can currently trade 13 pairs:
XBT/USD (Bitcoins against Dollars)
XBT/EUR (Bitcoins against Euros)
XBT/XRP (Bitcoins against Ripples)
XBT/LTC (Bitcoins against Litecoins)
XBT/XVN (Bitcoins against Vens)
USD/XRP (Dollars against Ripples)
EUR/XRP (Euros against Ripples)
USD/XVN (Dollars against Vens)
EUR/XVN (Euros against Vens)
LTC/USD (Litecoins against Dollars)
LTC/EUR (Litecoins against Euros)
LTC/XRP (Litecoins against Ripples)
LTC/XVN (Litecoins against Vens)
In this video Jesse Powell, founder and CEO of Kraken, gives some details about the service:
Wealthfront is a software based online Registered Investment Advisor (RIA). They provide portfolio management services. When you accept their personalized investment plan recommendation you can open an account and they implement the investments for your. To use it you can go to Wealthfront.com.
The company’s philosophy is very clear: “Every investor deserves sophisticated financial advice”.
The problem was that this advice was personal, impossible to scale, and therefore very expensive for medium and small investors.
To solve this Wealthfront built what is proving to be a very successful investment service which is already managing over $300 million in client assets.
The secret is combining highly sophisticated investment knowledge with well designed software and then distributing it through the internet for everyone to use.
With their platform, not only have they scaled the ability to reach millions of investors with high quality professional advice, but they have done so at a fraction of the cost compared to traditional financial services. Their fees are 0% for amounts of up to $10.000 and 0.25% above that level.
This is Wealthfront’s institutional video:
Features and how the Wealthfront investment process works:
Your investment profile:
Everything starts by understanding your profile as an investor and also your attitude towards risk. For this they have a set of questions that are easy to answer, but also provide them with important information about your financial assets, your objectives, and your potential behavior in different market scenarios.
Investment plan proposal:
Based on your answers in the previous step they recommend a portfolio that is very well diversified and suited to your needs. They include a comprehensive variety of asset classes ranging from domestic, international, and emerging market stocks, to government, corporate, and high yield bonds. They use the Nobel Prize winning Modern Portfolio Theory and their investment strategy group is lead by Burton Malkiel, the writer of A Random Walk Down Wall Street and proponent of the Efficient Market Hypothesis.
Save your plan: Before you actually go ahead and make your investments Wealthfront gives you the possibility of just saving your plan so you can think about it or even implement it in your existing investment account for free. What is unique about this is that you don’t have to register so it’s confidential. If you wish to save your plan you only need to enter your email address and they will send you a link so you can visit your page whenever you want.
Open an account: If your wish to implement your plan with them then you can go through the formal account opening process. The system is a traditional “client agreement” and “know your customer” procedure. Your new account is opened at a partner broker dealer. You can open your investment account when you create your investment plan or anytime after that if you decided to save it instead. When you open your account and you fund it you can invest in your recommended portfolio immediately with the touch of a button.
Change your plan: At any time before you open your account or when your portfolio is already invested you can change your preferences and risk profile. When you do this the asset allocation recommendation changes and you can adjust your portfolio to your new parameters.
Taxable or Retirement: During the profiling and recommendation process you can indicate if you need a plan for an individual taxable account or for a 401(k) rollover, traditional, Roth and SEP IRA accounts. With your same objectives and financial profile they build a portfolio adjusted for each type of investment, but with different securities and strategy depending on their tax consequences.
Only ETFs: Since Wealthfront provides the investment intelligence there is no need to invest in expensive full service mutual funds or managed products. This let’s them select, for each asset class, the best ETFs (Exchange Traded Funds) for your portfolio with the lowest management fees. There are ETFs for all asset classes, they trade in stock exchanges, and thus are the prefect vehicles to implement your diversified investments. ETFs cost only an average of 0.18% a year in additional management fees.
Ongoing asset management: Overtime parts of your portfolio will outperform others. Wealthfront monitors your portfolio continuously and makes adjustments to bring it back to your recommended mix. Before each rebalancing they consider tax implications and they use any new income, like dividends or new deposits, to maintain the correct distribution.
Continuous tax loss harvesting: Tax loss harvesting is the process of selling the worst performing investments to offset capital gains in winning investments. Wealthfront not only does this automatically, but it does so continuously throughout the year for accounts over $100.000 in assets. According to the company continuous tax loss harvesting may increase the returns on your portfolio an average of 1% after taxes. This more than offsets the cost of their service plus the fees of the underlying ETFs.
All questions are answered:
As you can see above Davis Janowski was recently hired to head Wealthfront’s editorial team and Knowledge Center, he was the Financial Technology Editor at InvestmentNews, a leading publication for financial advisors.
This is part of the company’s effort to keep investors and prospective clients completely informed about their service, investment opinions, and all aspects of managing their money.
Within the investment arena there are several service models that suit different investor profiles. Wealthfront is clearly for “delegators”, investors who prefer to spend their time enjoying life and managing their careers rather than picking stocks or trying to outsmart the markets.
If you are looking for an online investment firm with a top notch investment team, a transparent service, and very low cost for any size portfolio then Wealthfront is for you.
Watch this interview with Adam Nash, COO of Wealthfront, where he talks about the company and how the service works:
The Ripple Network is still in its early stages. It is in “beta” which means they are discovering and fixing bugs and adjusting the user experience. Nevertheless it is worth exploring and getting a Ripple Wallet to buy some XRP and move money around the world for free.
The Ripple Wallet has been around for some time. Last June I got the invitation to open one and OpenCoin Inc., the creators of The Ripple Network, gave me 1000 ripples as part of their global distribution program of the XRP digital currency.
The Ripple Network is a global open payments system that supports any currency including bitcoin. It also has its own native currency (the ripple or XRP) to facilitate money transfers within the system. To learn more about The Ripple Network please read my review or watch my interview with Patrick Griffin, head of business development at OpenCoin Inc..
Last week OpenCoin Inc. contacted Ripple Wallet users again to distribute more XRP, but in this case I had to join a new “gateway” service called SnapSwap.us to get my 1500 new XRP.
This was great because SnapSwap is the first US Ripple gateway. This means now I can move money from my US dollar bank account to my Ripple Wallet, back and forth, through SnapSwap. Before this, my Ripple Wallet was somewhat isolated. The way of “loading” some money was by receiving XRP from an OpenCoin giveaway. The other alternative was buying them from someone else, sending the dollars through other means, so they would send the XRP to my wallet.
Now that my wallet is linked to the US bank system through SnapSwap, I can do much more with it.
Before anything let me tell you that bitcoins, ripples, and other digital currencies have been very volatile. If you use them there is still a significant risk you may lose substantial amounts of money. Having said this I don’t mind using my XRP 2500 which amounts to around $10 and maybe I will upload $100 more to buy things and see how it works.
Registration and security:
To get the wallet you need to go to https://ripple.com/client/#/register to register. You need to select a name for you wallet and then create a pass phrase (password). Be careful here because they make it clear that if you lose your pass phrase the only way of recovering your wallet is by using your secret key. The secret key is obtained after opening the wallet. They let you see the pass phrase you selected and your secret key. You need to back them up in a file or secure place in your laptop. If you lose your secret key and your pass phrase you will lose your wallet and the money you had there. It’s like a real wallet in your pocket!
Activation: Once you open your wallet it is not yet operational. It needs to be activated by depositing a minimum of 75 XRP or by connecting it to the SnapSwap gateway. OpenCoin might give away new XRP and offer promotions in the future, but that is not guaranteed. You can also buy XRP from someone that transfers them to your wallet.
Ripple account address: When you created your wallet not only your secret key was created, but also your public key. This is the one you give others so they can send you money. This key can be found on the “receive” page (see below under “Receive”).
My $ bank account >>> My SnapSwap >>> My Ripple Wallet >>> My SnapSwap >>> My bank $ account.
Like I said before SnapSwap is a gateway. This means you can connect your real bank account to your SnapSwap profile and your Ripple account public key. Once you do this you will be able to send dollars to your Ripple Wallet and vice versa.
Send money: To send money you need the Ripple account address of your counterparty. You enter their address on the “Send” page, select which currency you want to transfer, the amount, and press “send”.
The system is brilliant because regardless of what currencies you hold, you can send any other currency. The Ripple Network will automatically find a seller of the other currency and exchange it at the best price. The receiver will see the other currency deposited in his account automatically in a matter of seconds.
Receive: Like I said above, to receive XRP or any other currency the sender needs your public account address. For this you need to go to the “Receive” page and copy it or to use the QR code of your account.
See your secret key: In the security tab is where you can find your key. These are controled by you and not by Ripple.com or OpenCoin. If you lose them you will not recover your wallet or your money. To back them up you can select “Show my keys” in this section to see them and copy them.
Send bitcoins to bitcoin addresses! On July 2nd Ripple.com announced the Bitcoin Bridge. This means that anybody with a ripple wallet can now send bitcoins to any bitcoin wallet. Like with other types of transfers on Ripple you can originate the transaction in any currency, it will be exchanged into bitcoin at the best rate, and it will be delivered to the bitcoin address you indicated.
The Ripple Network will likely change the way money is handled in the world. By opening a Ripple Wallet everybody gets access to the global currency market including digital currencies like bitcoin.
It works like email, but with money instead of messages. You can send and receive any currency like yens, pounds, rubles, bitcoins or dollars. To and from anyone in the world, direct, for free, and instantly. In one wallet you can hold all currencies, buy and sell them, and pay anything.
Even if it is in its early stages I recommend opening a Ripple Wallet for exploration purposes. You can send a few dollars through SnapSwap, buy some XRP, and even send bitcoins to your bitcoin address. It’s the Gmail of money.