By 2020, currency will look very different

Although Bitcoin is thought by many to be on the fringes of society and global economy, a recent study has shown that by the year 2020, one out of five businesses in the United Kingdom will be using some form of digital currency in order to complete trades. The study only covered the United Kingdom but we can assume that the global economy will reflect similar results. It’s a smart idea to get in now.

Since its introduction in 2009, Bitcoin has grown exponentially. Now,
however, it seems as though its rise in popularity is due to continue
in the the United Kingdom after a new report found that a fifth of U.K.
employees believe that their organizations will be accepting Bitcoin and
similar digital currencies as payment by 2020.

The study, Beyond Digital,
by Infomentum looked at the feedback from 1,000 office workers
examining how they believe office technology is set to evolve over the
next few years. According to the report, during the past five years
digital transformation and technological change have seen companies
rethink the way they do business, whether on or offline.

In 2014, Infomentum produced a report titled Generating Success with Generation C,
enabling businesses to understand the expectations of the connected
customer and how those expectations were making their way into the
workplace. In 2015, a report called Talking Transformation was released, looking at how CEOs could restructure their organizations before the market disrupted them.

latest report is aimed at helping businesses look beyond digital
transformation as it focuses on what else Generation C ? made up of
young, tech savvy consumers ? wants over the next few years, enabling
businesses to prepare their organizations for 2020 based on the analysis
and views from leading experts.

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Taking the internet to the next level

IBM, one of the largest technology companies in the world, is taking a closer look at Blockchain technology and naming it the revolution that it truly is. IBM is looking for new ways to incorporate blockchain into their methods and how to help this technology move along on a more widespread kind of scale. Check this out.

The Aite Group projects the blockchain market could be valued at
$400 million by 2019. For that reason, some of the biggest names in
banking, industry and technology have entered into the space to evaluate
how this technology could change the financial world. 

IBM and
Linux, for instance, have brought together some of the brightest minds
in the industry and technology to work on blockchain technology through
the Hyperledger Project. 

The Hyperledger Project is under the
umbrella of the Linux Foundation, and seeks to incorporate findings by
blockchain projects such as Blockstream, Ripple, Digital Asset Holdings
and others in order to make blockchain technology useful for the world’s
biggest corporations. IBM has also contributed its own code to the

According to John Wolpert, IBM’s Global Blockchain
Offering Director, when IBM and Linux began working together on the
blockchain project, Linux made clear it wanted to “disrupt the
disruption,” in part with their findings, as well as the data gathered
by projects such as Ripple, Ethereum and others exploring the

The Linux foundation announced its Hyperledger
project on December 17, 2015. Just one day later, 2,300 companies had
requested to join. The second-largest open source foundation in the
history of open source had only 450 inquiries.

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Bitstamp could be taking off very soon

Bitstamp, a very prominent Bitcoin startup is very close to receiving its official license for European exchange. This is exciting news, as it is another step closer to legitimizing and establishing Bitcoin as the global exchange that it is designed to be. Here’s what that could mean for the Bitcoin world.

One of the world’s largest bitcoin exchanges is reportedly close to
announcing a new deal with the Luxembourg government that would enable
it to launch regulated and licensed services across Europe.

According to sources, Bitstamp may have secured a payment institution (PI) or electronic money institution (EMI) license from Luxembourg regulators,
a move that the company has reportedly said would allow it to become
“the first regulated and licensed bitcoin exchange for all 28 countries
in the EU”.


in 2013 and originally based in Slovenia, Bitstamp has long been one of
Europe’s largest bitcoin startups, offering bitcoin trading and gold
buying services to investors. The company is registered in the UK, the
US and Luxembourg, where its Bitstamp Europe SA entity is based.

Such a move would come nearly two years after Luxembourg first opened dialogue with the industry, and weeks after blockchain-based payment app provider Circle received an e-money license in the UK.

Bitstamp is currently the fourth largest exchange by total US dollar trading volume, according to data from Bitcoin Charts,
behind Bitfinex, BTC-e and Coinbase. The exchange saw just shy of 4,000
BTC traded in the last 24 hours, representing $1.6m in trades. Notably,
it does not yet offer EUR trading.

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New practical Blockchain resesarch

Blockchain technology, although practically available in many different
platforms currently, necessitates further research for it to fulfill its
whole potential and this is finally occurring. Pairing up with a new
prestigious Bitcoin start up, MIT has begun practical research projects
designed to help propel Blockchain technology into the present.

MIT has moved its blockchain research from the blackboard to the real
world through a partnership with distributed ledger tech startup

While MIT
has long been involved in supporting the bitcoin and blockchain
industries through research, the aim of this project is to develop
blockchain, financial services and other enterprise data projects, the
university said.


director David Shrier, of MIT Connection Science, said he expects this
most recent step to attract a wide range of researchers, more than
doubling in size its first six months of operation.

Shrier told CoinDesk:

“It’s one thing to develop a four node test blockchain.
It’s quite another thing to hook up to a large scale global network of

As part of the research, which is currently being conducted by seven
students and professors, MIT is running a validator for the Ripple
Consensus Ledger, its permissioned distributed ledger system. The
validator is a server that confirms transactions on the network on which
the XRP digital asset sits.

Going back to early 2015, MIT has been involved in blockchain tech
most directly through support of bitcoin development through its Digital
Currency Initiative (DCI). Last month, the MIT DCI helped raise $900,000
to support bitcoin developers, with donors to the fund including
venture capitalist Fred Wilson and LinkedIn founder Reid Hoffman

MIT’s decision to use Ripple over alternatives was in part due to
what Shrier called the startup being “very well positioned” in
finance. He added that the university is also interested in exploring
“other different flavors” of blockchain.

Laying the foundation

However, MIT’s embrace of blockchain has roots in its longstanding support of open-source projects in general.

Since 2007, MIT’s Internet Trust Consortium, which includes UBS and
NTT Japan, has been developing open-source projects dedicated to helping
people more efficiently manage their data. Last year, the consortium
was moved under Shrier’s MIT Connection Science and began publishing
blockchain-specific research.

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Why we need more than a few investors

The reason that Bitcoin has had some growing pains is because most people fear change even though they may end up liking the result of the new technology or object much more than how life was before the invention. It is in human nature to resist the unknown out of self preservation and survival instincts but it is also very primitive to do so. With Bitcoin however, some risks need to be taken as this sis one of those ideas that will transform our economy for the better. 

John Biggs is CEO of stealth bitcoin startup Freemit and a former editor at TechCrunch. His work has appeared in publications such as The New York Times, Gizmodo and Men’s Health.

In this opinion piece, Biggs argues that the bitcoin community has become complacent in its quest for financial change, standing by as institutions seek to stamp out its revolutionary impulses.


You say you want a revolution. Fine. But act like it’s coming, not like petulant nerds intent on destroying a burgeoning industry from the inside.

At this point in the bitcoin lifecycle, the fear, uncertainty and doubt (FUD) and naysaying we’ve been hearing is mostly true. The network is abysmally slow. The use cases are half-baked and consumers will receive no implicit benefit from bitcoin over, say, swiping their Visa card.

The bitcoin 1.0 experiment is, in short, over.

But, I would argue – and you will probably agree – that bitcoin and related technologies aren’t an experiment any more than TCP/IP was an experiment or HTML was a shot in the dark. Just as the first web pages looked ugly as sin, the current state of bitcoin is in the same position.

These technologies point the way to the future, but we’re letting that future be controlled by those who will be quickest to destroy it.

Death by distraction

Transferwise, Revolut and the banks with their “blockchain-like contracts” are sucking up the oxygen necessary to go forward with a true Internet of Value.

While we dick around over block size and who is angry at whom, the powers that be are quickly and mercilessly tearing into everything that we have worked hard to build.

I have watched this industry move from “To the moon!” optimism to a world in which big banks pay lip service to [bitcoin creator] Satoshi Nakamoto even as they strip out the best parts of his work for themselves and leave the “uncertainty” to the idiots who still believe bitcoin is a currency.

At the same time, incumbent FinTech plays have gotten into bed with banks and are attempting to replicate bitcoin’s benefits through financial trickery and loss-leader tactics.

False hopes

Then, there are the bitcoin 1.0 companies, the dozens of startups that are nothing more than another crypto wallet.

They’re basically software layers that allow these companies to route around regulation by claiming to be software solutions.

Bullshit. These companies need to put up or shut up.

In short, there are banks who are working hard to steal our ideas and nervous CEOs who refuse to release real products humans can use. Old-timey bitcoin companies are clamoring for the world’s focus even as they fumble the ball when it comes to general bitcoin adoption.

Why are we letting them?

I’m all for happy cooperation between existing financial institutions and bitcoin. This is imperative to move forward.

If big banks want to hire blockchain consultants who will work on routing around the potential damage bitcoin can cause to their fee structure until enough of the old guard retire and enough intelligent blockchain users replace them, then that is just fine. The Internet of Value will be waiting for them.

But the longer they wait the longer they will spend money on Quixotic tools because they are afraid.

Old lessons

I’m reminded again and again of a story my friend Roy told me about his experience with the early web. In about 1999, he was tasked with maintaining Web filters for a South Korean company.

The filters cut out everything, from external email to porn. But they kept failing. He would come in every week and find that the filters were literally burning up – all of the porn was burning the filters. He’d order a new server, install it and a week later get another call.

After a few servers burnt out, he’d get a call every few days. Then once a day.

Seoul at that time was far ahead of the US in terms of web access, and users were watching TV, downloading data and communicating in ways that we hadn’t yet dreamed of online. And filters were needed, obviously, to keep workers from connecting with the outside world.

The filter was designed to keep the users from cyberloafing. But the filters actually just caused more downtime, frustrated more connectivity and prevented people from doing real work.

A company that filtered the Internet in 1999 was considered cautious. A company that filters the Internet today is considered dumb.

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How to deal with Bitcoin’s issues of scope

Often, the greatest ideas take quite a while to really take off due to this fun thing called “Scope creep”. It’s when the scope of an idea often escapes the person who came up with it and the full logistics and consequences of implementing the idea begin to creep into existence, inhibiting its growth. This is something that Bitcoin seems to be having some issues with at the moment. Here’s how some people have called to deal with Bitcoin’s growing future. 

Kristov Atlas is a network security and privacy researcher who studies cryptocurrencies. He is currently a security engineer for bitcoin wallet provider Blockchain and co-founder of the Open Bitcoin Privacy Project. 

In this opinion piece, Atlas discusses bitcoin’s ongoing block size debate, arguing that the economic analysis of potential changes to the system has been largely ignored by network developers.

diagram, chart

As many writers have proffered their short-term suggestions for addressing bitcoin’s transaction throughput, I’d like to take a step back and explore how we think about, discuss, and plan the future of bitcoin.

To date, much of the discussion around Bitcoin’s scalability has suffered from two major problems:

    1. We lack a systematic process to set and achieve goals with respect to security, censorship resistance and the overloaded term “decentralization”.
    2. We have a poor understanding of the relationship between engineering decisions and their economic consequences (“cryptoeconomics”). By “we,” I mean myself foremost, but I can fairly include many stakeholders in the ecosystem including some protocol developers, wallet providers, miners, exchange operators, writers, and enthusiasts.

Because we lack these tools, we are ill-equipped to make protocol decisions and to plan bitcoin’s software future.

In this post, I’d like to focus on the second deficit in the list: economics.

What is crypto-economics?

I define crypto-economics as the study of the production, distribution and consumption of goods and services in cryptographic consensus networks. In particular, it is the study of the economic implications of cryptographic design choices in such networks (like bitcoin).

For example, suppose you created a cryptocurrency that did not have a predetermined supply algorithm for the currency units, but was instead determined on a month-to-month basis by majority vote among a few human keyholders.

How would this system compare to bitcoin?

Another example. A wallet client sending a bitcoin transaction must communicate the transaction data to bitcoin miners to be included in a block. What incentive do uncompensated nodes have to relay this data from the client to a miner?

These are questions for cryptoeconomics.

The snooze button

First, I want to acknowledge that economics, like other fields of study, can be very boring. I can appreciate those who would prefer to avoid the topic and focus on other aspects of cryptocurrencies. These systems are so complicated that, less than a decade after their birth, we require specialization.

I would recommend, however, that avoiders of cryptoeconomics get a taste, simply so that they can remain aware of the boundaries of the subject they wish to avoid.

Austrian economist Murray Rothbard said this best:

“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

Economics, to date, has been a very odd realm of study. It is a study of human action, but one conducted by a society deeply in denial about the profound impact of a few economic planners on the decisions of the many.

Economists are like doctors of medicine charged with studying and optimizing the health of a room full of lepers, and then advising the rest of the world on how best to maintain health.

The minority of economists who have dared to challenge preconditions of central planning have had few opportunities to test their theories because there is nowhere in the world to find humans who trade in its absence. This long-standing state of scientific befuddlement has damaged technologists’ trust in the study.

Still, economists have had several centuries to construct basic principles and models of economic interaction, such as the laws of supply and demand, elasticity and marginal utility.

Although the many hours wasted by economists on how best to direct the power granted to human central planners will be useless to bitcoin, many of the fundamental principles of economics will act as lighthouses in efficiently allocating resources in bitcoin.

Why now?

Bitcoin creator Satoshi Nakamoto set a powerful precedent for bitcoin by making economic thought a centerpiece of its design.

For example, Satoshi improved on the design of fiat currencies by establishing a predictable currency supply. However, he also created many points of economic rigidity into the initial design.

These points of rigidity have worked well enough, but will increasingly reveal themselves as the number of participants in the system grows. One of the points of rigidity, introduced as a temporary security mechanism, has been repurposed as an economic control. In spite of Satoshi’s legacy of holding economic considerations as a primary value, this has not persisted with all of his successors.

Prior to 2009, practically everyone in history who made decisions about the design of other people’s currency arrived there through a political process.

Bitcoin was the first successful software project that allowed economically meaningful interaction according to rules set in an open-source software ecosystem. This advent is not just an opportunity – but a mandate – to apply free market principles to software consensus rules.

Other currencies can compete with bitcoin at a historically low cost; any currency that fails to apply efficient market mechanisms will underperform and eventually become defunct.

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New Industry Event in New York

Because of all the information that floats around the media surrounding Bitcoin, there is a new conference in which industry leaders meet to discuss the no-nonsense practical uses and applications of Bitcoin and Blockchain technology. Will you be there?

Post-trade financial services giant DTCC has announced it is to host a blockchain event next month in New York City.

Called the Blockchain Symposium, the day-long event will explore the business applications of blockchain technology for financial market infrastructures and the industry.

The firm told CoinDesk in an email:

“The aim of the program is to cut through the hype, discuss collaboration and use cases, and imagine what innovations the future may bring.”

The 29th March event will feature Blythe Masters, CEO of blockchain startup Digital Asset Holdings, and J Christopher Giancarlo, Commissioner at the US Commodity Futures Trading Commission.

The news follows DTCC’s release of a report that, while recommending industry stakeholders experiment with blockchain implementations, cautioned against the growing hype surrounding the technology.

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United Nations Talks Blockchain

The United Nations is a large diplomatic organization that allows world leaders to meet and discuss reform policies that better lives for all citizens globally. It is no surprise that the delegates of the United Nations have now discussed blockchain technology and how it could be used to assist other countries in many other humanitarian efforts. Check out a bit of this white paper that was discussed at the UN. 

More and more high profile financial and political institutions are taking notice of the blockchain technology of distributed ledgers, starting internal investigations and issuing position papers.

In January, Bitcoin Magazine reported that the International Monetary Fund (IMF) released a paper titled “Virtual Currencies and Beyond: Initial Considerations” at the World Economic Forum in Davos. Similar papers have been issued by other mainstream institutions.

The RAND Corporation, an influential global policy think tank with strong U.S. defense and homeland security ties, released a report titled “National Security Implications of Virtual Currency.” A recent report issued by the U.K. Government Office for Science, titled “Distributed ledger technology: beyond block chain,” explores how distributed ledger technology can revolutionize public policies and advocates the use of blockchains for a variety of public services.

A recent working paper released by the United Nations Research Institute for Social Development (UNRISD), titled “How Can Cryptocurrency and Blockchain Technology Play a Role in Building Social and Solidarity Finance?,” explores the potential of distributed ledgers to help create a global world order fairer and more sustainable than the current one, and wonders  how blockchain technology can be harnessed for community empowerment and solidarity-based finance.

The UNRISD is an autonomous research institute within the U.N. system that undertakes multidisciplinary research and policy analysis on the social dimensions of contemporary development issues. The author of the UNRISD paper, Brett Scott, is an independent researcher and consultant on alternative finance and financial reform. Scott is the author of The Heretic’s Guide to Global Finance: Hacking the Future of Money.

According to Scott, it’s important to test the potential of Bitcoin and blockchain technology for building truly empowering social and solidarity-based finance.

“This paper provides a primer on the basics of Bitcoin and discusses the existent narratives about the technology’s potential to facilitate remittances, financial inclusion, cooperative structures and even micro-insurance systems,” says Scott. “It also flags up potential points of concern and conflict, such as the tech-from-above ‘solutionism’ and conservative libertarian political dynamics of some of the technology start-up community that surrounds Bitcoin. As a way of contrast the paper considers ‘blockchain 2.0’ technologies with more overtly communitarian ideals and their potential for creating ‘cooperation at scale.'”

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What are DApps?

Apps are decentralized applications. Bitcoin is an example of a DApp. There are so many possibilities that applications which fall into this category can completely revolutionize. What does it mean to be decentralized? What are the qualifications? Check out this wonderful in-depth look at a prediction of the future of decentralized applications. 

From socializing to hailing a cab to finding our way around, there’s an app to help. Now, there is a new and improved model that is revolutionizing the way we build scalable applications called a DApp, or decentralized application. 

David Johnston, CEO of the DApp Fund, predicts in his white paper that “decentralized applications will someday surpass the world’s largest software corporations in utility, user-base, and network valuation due to their superior incentivization structure, flexibility, transparency, resiliency and distributed nature.” 

What Is a DApp?

A DApp has four characteristics. It must be open source, with all changes made by a majority consensus of the user base. Data must be stored on a public blockchain to avoid a central point of failure. There must be a cryptographic token, referred to as an App Coin, to access the application, and these tokens must be issued according to a standard cryptographic algorithm acting as a proof of the value to nodes that contribute to the application.

Bitcoin is an example of a DApp, as it is an open-source token and uses the blockchain, a peer-to-peer and public distributed ledger, to form a trustless system. In fact, Bitcoin is the most popular DApp, as it simplifies many aspects of the traditional financial system, such as transferring money across the world. 

Another application of a DApp is something built as a protocol that uses another blockchain and its own token to function. An example is the Omni Protocol, which “is a protocol built as a layer over Bitcoin that allows you to generate, send, trade, redeem, pay dividends to and make bets with tokens representing any kind of asset,” said Patrick Dugan, who’s a board member of the project, in an interview with

Alternatively, a DApp can be built as an extension to the program. For example the SAFE Network, a peer-to-peer storage network, uses “safecoins” to operate the network. With the SAFE Network, decentralized applications are ensured complete data security, and there are projects such as SAFEpress, similar to WordPress, for the SAFE Network, to help people develop on the Network.

Imagine a DApp becoming the computer operating system (OSX or Windows), the programs used on the system (Photoshop, Dropbox), or specialized software that uses the programs, such as a blog that integrates Dropbox. Bitcoin is only the tip of the iceberg of what is possible with this new type of application.

Can App Coins Have Value?

David Johnston and team define App Coins in another white paper as “tokens that are native to Decentralized applications that have a digital token associated with their use or monetization.” 

Tokens can also be developed to behave in a way that Bitcoin cannot, at least for the time being. A Javascript-based programming library called Solidity and another Python-based library called Serpentallow decentralized applications to be built on Ethereum. 

In addition, networks can choose to operate exclusively with their network’s coin, such as the safecoin that powers the SAFE Network. Doing anything on the SAFE Network requires safecoins, and developing on the SAFE Network provides additional value to developers. 

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Defining Blockchain

Blockchain is a key component of how Bitcoin works. It is a technology that is implemented in so many different ways and is a revolutionary new way of securing highly sensitive information, which can be turned into all kinds of platforms that would make many different every day tasks much easier.

As we approach 2016 there seem to be endless discussions about ‘blockchain’. It’s a term that is ever-more frequently cited in even mainstream journalism, while in the FinTech space alone there are a slew of would-be suppliers and would-be users claiming that ‘blockchain’ will revolutionize any number of applications.

This now-common usage suggests it must be something precisely defined and well understood, but this seems to be more a matter of mantra than comprehension.

The echo chambers of the Internet reverberate to many opinions, but attempts to find a precise meaning seem to find a dismaying lack of agreement. To be anything more than marketing hyperbole we really need the answers some questions.

What is it? What isn’t it? What might it be? Can it be something that will allow us to build new and enduring systems? In short, what is the essence of blockchain?

The Satoshi white paper

Almost every discussion of blockchains starts with the Satoshi white paper, but it is this very foundation that starts us on a path to confusion. Neither the terms ‘blockchain’ or ‘block chain’ appear there; there are 67 uses of ‘block’ and 27 of ‘chain’, but zero of ‘block chain’ or ‘blockchain’. This aside though, let’s see where this origin leads us.

The white paper is short; it’s just nine pages long. The first mention of ‘block’ and ‘chain’ starts at the bottom of page 2, section 3, where there is a discussion of a basic timestamp server. Prior to this the white paper describes a series of design goals associated with the bitcoin design, such as the ability to allow two parties to transact without needing to trust a third party.

The statement of the design goals are fundamentally important. They set the scene for an implementation to meet those goals in which characteristics are layered upon each other, but it is informative to look at what each new layer does.

In our quest for the nature of a blockchain we need to be careful to look for things that are its attributes, rather than characteristics of this first implementation.

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