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Bitcoin Price Surges Past $3200 to Hit All-Time High – CoinDesk

The price of bitcoin has risen sharply, exceeding the $3,200 level for the first time on the CoinDesk Bitcoin Price Index (BPI).

The market advancebegan after 1:00 UTC, when the price of bitcoin climbed above $2,900, market data shows, crossing the $3,000 line around 3:12 UTC.

Markets hit a high of $3,216.02, according to the BPI, and at press time are currently trading at an average of $3,154.94. Per the BPI, bitcoin's price hasn't been above the $3,000 level since June 12.

The price advance also pushed bitcoins collective market capitalization past the $50 billion mark for the first time. According to the BPI, bitcoins market cap is around $52.35 billion at press time.

As might be expected, market volumes jumped along with the price. Data from Bitcoinity showsmore trade volume during the past several hours than at any other point during the past week.

Hot air balloon imagevia Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

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Coinbase to Let Users Withdraw Bitcoin Cash After Outcry – Fortune

The world's most popular digital currency exchange, Coinbase, reversed course on Thursday and announced it would accept a new bitcoin offshoot that was issued to every bitcoin owner.

The reversal comes after days of tumult as angry Coinbase customers demanded to know why the company had not released their new currency, called Bitcoin Cash, to them. The exchange rate for the currency, which began trading on August 1, briefly reached $700 on Wednesday and is currently trading around $400.

Coinbase announced the decision in a blog post, explaining it wanted to first ensure the company could safely support Bitcoin Cash before developing technology to support it. The exchange said it would start supporting Bitcoin Cash begining on Jan. 1, 2018.

Over the last several days, weve examined all of the relevant issues and have decided to work on adding support for bitcoin cash for Coinbase customers. We made this decision based on factors such as the security of the network, customer demand, trading volumes, and regulatory considerations.

We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time.

While the decision to support Bitcoin Cash may placate some Coinbase customers, others are likely to question why the company will take months to do so, even as other digital exchanges support the new currency.

It's also unclear how Coinbase's announcement will affect a campaign by a group of customers who had vowed to file a class action lawsuit if the company did not permit them to withdraw their Bitcoin Cash.

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In the days preceding the arrival of Bitcoin Coin cash, Coinbase made clear it did not intend to support the new currency and advised customers who objected to the policy to withdraw their bitcoins. This position, however, appeared to trigger a stampede of withdrawals, akin to a bank run, that led many customers to complain about long delays in getting access to their funds.

Meanwhile, reports suggest a large percentage of Coinbase's customer base elected to leave prior to August 1, which is when a so-called fork in bitcoin's underlying software took place that gave rise to Bitcoin Cash. A graph published by analytics company BlockSeer suggests customers withdrew over half of the $1 worth billion bitcoins stored in Coinbase's "vault" storage service:

It's unclear how many of the departing Coinbase customers elected to cash out their bitcoins into dollars or instead to transfer it to other digital wallet services where they would be eligible to receive the Bitcoin Cash immediately. One such company, London-based Blockchain, suggested most customers chose the latter course.

"It's been a record week for Blockchain," said a spokesperson for the company.

An earlier version of this story incorrectly suggested customers had withdrawn half of 1 billion bitcoins, not $1 billion worth of bitcoin.

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Segwit2x and the Tale of Three Bitcoins – Bitcoin News (press release)

As the entire community has been laser-focused on the recent hard fork and Bitcoin network split, many people have forgotten about the Segwit2x plan. Miners who participated in the New York Agreement (NYA) have kept their promise and Segregated Witness will lock-in on the network in roughly two weeks.

Also read:Gwyneth Paltrow Joins Bitcoin Wallet Abra as Advisor

A few more changes are coming to the Bitcoin network in the near future. The Segwit2x plan often referred to as NYA is still following its course towards protocol activation of Segwit. At the time of writing, there are 621 blocks remaining for BIP 141 (Segwit) lock-in, and the plan seems to be running smoothly. The vast majority of miners who agreed to the Segwit2x proposal are still following through with at least half of the plan. The second half of Segwit2x intention involves the 2MB hard fork which is scheduled to occur in November.

However, weeks before the recent hard fork, a large portion of the user-activated soft fork (UASF) supporters, and Core developers have been vehemently opposing the second half of the NYA plan. Now that Bitcoin Cash exists, this has caused quite a few people to start envisioning three bitcoins; one that has Segwit only, one with both Segwit and the 2MB block increase, and the 8MB Bitcoin Cash.

On August 4 one individual wrote about his concerns about this outcome on the subreddit r/btc called, Core Devs: it is imperative that you endorse Segwit2x. If you dont, then we can end up with three Bitcoins. Please, have a little humility, avoid another contentious hard fork.

The person believes that if Core developers and many other others refuse to follow through with the second part of the plan, then there could be another chain split. Doubling the block size of the Bitcoin blockchain is NOT the end of the world, and it will come with many benefits as well, explains the threads author. One of the Core Bitcoin repository contributors, Luke-jr, reveals his opinion regarding the 2MB portion of the NYA plan.

Forget it Segwit2x is not going to happen If you want my support, get the proposal changed to something sane, explains Core developer Luke-jr. Then Luke-jr replied to the statement of how doubling the block size would not be the end of the world. Yes, it is, the developer adds.

Luke-jr is not the only bitcoin developer that wont agree to the next part of the Segwit2x plan. This includes Greg Maxwell, Wladimir van der laan, Jorge Timon, Eric Lombrozo, and many others.

After the birth of Bitcoin Cash, Jeff Garzik, one of the lead maintainers of the Segwit2x code, confirms that Segwit2x is still on schedule. When asked on Twitter whether the compromise was going forward because big blockers got their wish with Bitcoin Cash, Garzik responds saying;

Segwit2x and NYA have successfully met all goals so far, and continue as planned.

After August 1st the playing field is starting to get veryinteresting, and because the UASF and UAHF were planned in advance, many Bitcoiners had a feeling something was going to happen. Quite a few UASF supporters believe the UASF movement is what managed to push Segwit. However, these samesupporters seem to have also caused some blowback as well with the UAHF (Bitcoin Cash) plan following shortly after the movement started.

Now even though Segwit2x has a large majority of miner support and lots of businesses and infrastructure behind it, we could still see another split. Theres over three months left for the Bitcoin community to work this out, but some believe its looking dreary already.

What do you think about the upcoming plans for Segwit2x? Do you think its possible we could see three sets of bitcoins? Let us know in the comments below.

Images via Pixabay, and Coin Dance.

Need to calculate your bitcoin holdings? Check ourtoolssection.

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Neutrino Is an Italian Bitcoin Blockchain Analytics Service Provider – The Merkle

There area few different companies specializing in Bitcoin blockchain analysis. Every single one of thoseentities seeksto provide law enforcement agencies and other parties with actionable insights on the Bitcoin network. One of these companies isNeutrino, based in Italy. Now would bea good time to check up on what this company provides exactly and how itcould be both a blessing and a curse to Bitcoin users.

It sounds quite interesting if a company claims they can properly analyze the Bitcoin blockchain. Companies such as Neutrino not to be confused with the infamous exploit kit used by criminals specialize in searching for malicious behavior on the Bitcoin network. If criminals were to steal funds or move funds belonging to suspicious addresses, companies like these wouldimmediately track themdown to the best of their abilities.

Contrary to what a lot of people think, Bitcoin is not an anonymous currency. It is true that transactions do not include personal information, but it is a pseudonymous currency which allows anyone to keep tabs on network transactions in real-time. Doing so does not even require specialized software. All it takes is a browser and a mouse to start going through Bitcoin transactions and their histories.

Companies such as Neutrino take this concept one step further. The company uses a proprietary machine learning algorithm known as P-Flow to constantly monitor the Bitcoin blockchain and all activities taking place on it. The software also categorizes money flows and labels risks accordingly. Interestingly enough, P-Flow is apparently capable of analyzing alltransactions, even the obfuscated versions.

Any compliance officer looking to assess risk of Bitcoin operations could certainly benefit from a tool such as P-Flow. It enhances AML/KYC checks and sets up customizable red flag alerts based on a blacklist approach. Users can flag any transaction potentially related to Bitcoin obfuscation as a threat as well. It is even capable of ascertaining whether or not a particular BTC transfer has a link to the darknet. All of this makes for an incredibly powerful solution.

Neutrino was founded back in 2016 with a strong focus on cybersecurity in general. Bitcoin quickly became one of itsareas of expertise, as the companyaspires to develop highly specialized cybersecurity solutions for use by partners and companies. Given the increasing popularity of Bitcoin over these past few years, developing P-Flow made a lot of sense. It is also the companys first project to come to market. Blockchain analytics companies are in high demand these days.

Neutrino is the company responsible for tracking the recent WannaCry Bitcoin funds movements. Itsresearch indicated how these funds were transferred to the ShapeShift exchange and converted to Monero. That statement was later confirmed by ShapeShift themselves, although they never indicatedwhetherall of the remaining WannaCry proceeds were laundered in such a manner. This development highlights the value of Neutrino as a Bitcoin analytics company. Anyone trying to abuse Bitcoin for nefarious purposes will certainly now have a difficult time getting away with it.

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New Methods of Controlling Electrons Could be Major in Quantum Computing – TrendinTech

UCLA researchers HongWen Jiang, professor of physics, and graduate student, Joshua Schoenfield have discovered a method for controlling and measuring the valley states of electrons in a silicon quantum dot, an essential key to stabilizing the qubits of a quantum computer. Their full findings are available in the journal Nature Communications.

A *quantum dot is a finite area of silicon that captures electrons, allowing researchers to alter their charge and spin. The valley state, a particular part of an electrons movement where it lays low in the texture of the silicones structure, has only recently been understood to have importance in the information storage of a qubit. If the silicon is imperfect in any way an electrons Valley state can be altered to dramatic and unpredictable effect. The valley state is inherent to the nature and action of a functioning qubit.

Normally, an electrons movement is quick and continual, challenging a researchers ability to keep it in a valley state for study. However, when UCLA scientists cooled a silicon quantum dot to almost absolute zero, the movement of electrons slowed enough for manipulation, measurement, and control. This was done by rapidly pulsing electricity to move individual electrons up and over the valleys.

Additionally, they were able to detect the fractional energy contrast between unique valleys, previously not possible by standard techniques.

Jiang and Schoenfield expect to further develop the technique used in order to have more control of qubits based on interacting valley states.

*Quantum dots(QD) are very smallsemiconductorparticles, only severalnanometresin size, so small that their optical and electronic properties differ from those of larger particles. They are a central theme innanotechnology. Source: Wikipedia

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Letter to Prime Minister Turnbull re Encryption and Human Rights – Human Rights Watch (press release)

August 3, 2017Hon. Malcolm Turnbull MPPrime MinisterParliament HouseCANBERRA ACT 2600

Re: Encryption and Human Rights

Dear Prime Minister Turnbull,

We write to urge you to support the use of strong encryption as essential to security and human rights in the digital age. We call on you to refrain from forcing technology companies to weaken the security of their products or banning the use of end-to-end encryption.

In a July 14 press conference on national security and encryption, you discussed challenges that Australian law enforcement and intelligence agencies faced in accessing encrypted data or communications, even with a lawful court order. You announced your intention to introduce legislation that will in particular impose an obligation upon device manufacturers and upon service providers to provide appropriate assistance to intelligence and law enforcement on a warranted basis, to access data in unencrypted form. While the conference released few details, you stated that the legislation would be modelled on the United Kingdoms Investigatory Powers Act and that you will seek a coordinated approach with international partners, including the Five Eyes intelligence alliance.

Governments have a human rights obligation to investigate and prosecute crime and thwart terrorist attacks. However, any policy response should not do more harm than good, while also be effective at achieving its aim. Forcing companies to weaken encryption or effectively forbidding the use of end-to-end encryption fails on both counts, and would undermine human rights worldwide.

Strong encryption is the cornerstone of cybersecurity in the digital age. Todays cybercriminals are increasingly sophisticated, targeting Internet companies, credit card and identity data, critical infrastructure, and even nation-state intelligence agencies.[1] Strong encryption built into private sector technology protects the dataand the human rights and securityof billions of Internet users worldwide against these growing security threats. You yourself have acknowledged that you use encrypted applications like Wickr and WhatsApp because traditional communication methods are not secure.[2]

Weakening encryption for any purpose effectively weakens it for every purpose, including malicious hacking, financial fraud, and for other illicit purposes. And unfortunately, weak or partial encryption provides not just weak or partial protection, but no protection at all against sophisticated repressive regimes and capable criminals. Some companies that manufacture encrypted apps or devices do not have the ability to disclose conversations or data to law enforcement because that information is encrypted end-to-end and companies do not have the decryption keys. A requirement of assured decryptability for all data would force such companies to redesign their products without security features like end-to-end encryption or to introduce deliberate vulnerabilities, or back doors, into their software.

The overwhelming consensus of information security experts, along with some former Five Eyes intelligence officials, is that there is no technical solution that would allow specific law enforcement agencies to decrypt communications without creating vulnerabilities that would expose all users to harm.[3] Europol has also warned that solutions that intentionally weaken technical protection mechanisms to support law enforcement will intrinsically weaken the protection against criminals as well.[4] Determined cybercriminals and rival foreign intelligence agencies will find and exploit such back doors, for profit or abuse. This would undermine cybersecurity for all users, including billions that are under no suspicion of wrongdoing.

For human rights defenders and journalists, the harm can be even more serious. Activists and media organizations with whom we work in places like Hong Kong, Vietnam, Thailand, and across the Middle East rely on encryption built into phones and chat applications to protect sources and victims from reprisals. In 2015, the UN special rapporteur on freedom of expression, David Kaye, recognized that encryption enables the exercise of freedom of expression, privacy, and a range of other rights in the digital age.[5] Countries like Russia, China, and Turkey need no encouragement, they are already blurring the line between human rights activism and terrorism in order to justify surveillance and repression of human rights activists.

While strong encryption may limit some existing surveillance capabilities, weakening such security features will only increase the vulnerability of billions of ordinary people to cybercrime, identify theft, and malicious hacking. Such harm would be broadly disproportionate to any gains in law enforcement capabilities that undermining encryption would achieve.

It is also unlikely that limiting strong encryption in Australiaor even in all Five Eyes countries would prevent bad actors from using it. As a recent global survey of encryption products confirms, terrorists and criminals could easily shift to the many available foreign alternatives that would not be subject to Australian law.[6]

Technology companies face an escalating digital arms race to secure their software and devices against cybercriminals, and encryption is a key part of their arsenal. Instead of hindering efforts to protect ordinary users, we urge your government to invest in modernizing investigation techniques and increasing resources and training in tools already at their disposal, consistent with human rights requirements.[7] For example, any limitations encryption poses to police capabilities are greatly offset by the explosion of new kinds of investigatory material enabled by the digital world, including location information and vast stores of metadata that are not encrypted. And encrypted data can often be accessed in unencrypted form through cloud-based backups or by directly accessing it on devices with hacking or forensic tools. Of course, these alternative approaches should also be necessary and proportionate to legitimate security goals, regulated in public law, and subject to strict safeguards to ensure respect for privacy and other rights.

Australias approach to encryption will be emulated by other countries facing similar challenges. Your government can demonstrate true leadership by adapting to a world with strong encryption instead of fighting the gains the private sector has made in shoring up security and human rights in the digital age.

Sincerely,

Elaine PearsonAustralia Director

Cynthia WongSenior Internet Researcher

CC:

Senator the Hon. George Brandis QC, Attorney-General

Mr. Michael Phelan APM, Acting Commissioner of the Australian Federal Police

[1] See, for example, Sam Thielman, "Yahoo hack: 1bn accounts compromised by biggest data breach in history," The Guardian, December 15, 2016, https://www.theguardian.com/technology/2016/dec/14/yahoo-hack-security-o... (accessed August 2, 2017); Nicole Perlroth & David Sanger, "Hacks Raise Fear Over N.S.A.s Hold on Cyberweapons," New York Times, June 28, 2017, https://www.nytimes.com/2017/06/28/technology/ransomware-nsa-hacking-too... (accessed August 2, 2017).

[2] Eliza Borrello, "Malcolm Turnbull confirms he uses Wickr, WhatsApp instead of unsecure SMS technology," ABC News, March 2, 2015, http://www.abc.net.au/news/2015-03-03/malcolm-turnbull-uses-secret-messa... (accessed August 2, 2017).

[3] Nicole Perlroth, "Security Experts Oppose Government Access to Encrypted Communication," New York Times, July 7, 2015, https://www.nytimes.com/2015/07/08/technology/code-specialists-oppose-us... (accessed August 2, 2017); Mike McConnell, Michael Chertoff and William Lynn, Why the fear over ubiquitous data encryption is overblown, July 28, 2015, https://www.washingtonpost.com/opinions/the-need-for-ubiquitous-data-enc... (accessed August 2, 2017); John Leyden, "Former GCHQ boss backs end-to-end encryption," The Register, July 10, 2017, https://www.theregister.co.uk/2017/07/10/former_gchq_wades_into_encrypti... (accessed August 2, 2017).

[4] Europol and ENISA joint statement, "On lawful criminal investigation that respects 21st Century data protection," May 20, 2016, https://www.enisa.europa.eu/publications/enisa-position-papers-and-opini... (accessed August 2, 2017).

[5] UN Human Rights Council, Report of the Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, David Kaye, A/HRC/29/32, May 22, 2015, http://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/29/32 (accessed August 2, 2017).

[6] B. Schneier, K. Seidel, and S. Vijayakumar, A Worldwide Survey of Encryption Products, February 11, 2016, https://www.schneier.com/academic/archives/2016/02/a_worldwide_survey_o.... (accessed August 2, 2017).

[7] Orin Kerr and Bruce Schneier, Encryption Workarounds, March 20, 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2938033 (accessed August 2, 2017).

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Zscaler Finds Hackers Using SSL Encryption in Malware to Hide … – eWeek

Malware authors and operators are increasingly using Secure Sockets Layer (SSL) encryption to hide their communications and escape detection, with the use of SSL for malware communications doubling in the first six months of 2017, security-in-the-cloud firm Zscaler said in its latest threat report.

On average, the company has seen 600,000 encrypted malicious activities every day, including calling back to command-and-control servers, phishing attempts and malware delivery. About 60 percent of the malicious activities were related to banking Trojans and a quarter related to ransomware, the Zscaler analysis stated.

I think we are heading in the direction where SSL will become [a de-facto measure taken by attackers], because it provides an additional layer of security for them to cover the C&C communications, Deepen Desai, senior director of research for Zscaler, told eWEEK.

Even today, they will not do command-and-control over plain text; they will use custom encryption. SSL just adds another layer on top it.

The company found that as many as a quarter of all new malware executables analyzed in its cloud sandbox communicated over SSL and transport layer security (TLS) in 2017.

Malware authors have always found different ways to hide their programs communications, such as using the TOR network or going through covert channels using DNS queries. Yet, SSL is a Web standard and so is very common on corporate networks. In 2016, security firm Blue Coat found that malicious SSL activity jumped by a factor of 58.

Exploit kits, malware, adware and C&C communications have all been observed using SSL encryption to hide the content of the communications. More than 300 Web exploits per day use SSL as part of their infection chain, the company said.

Zscaler and Blue Coat are not the only companies to see the increasing obfuscation of communications by attackers. On Aug. 3, security firm Kaspersky Lab published an analysis of current trends in steganography, a communications technique that embeds messages or data in other trafficmost often, images.

The company stated that steganography has become popular with the developers of malware and spyware, but that most anti-malware tools have trouble detecting the payloads.

So far, the security industry hasnt found a way to reliably detect the data exfiltration conducted in this way and the goal of our investigations is to draw industry attention to the problem and enforce the development of reliable yet affordable technologies, allowing the identification of steganography in malware attacks, Alexey Shulmin, security researcher at Kaspersky Lab, said in a statement.

Zscaler warned companies that the increase in SSL encryption should prompt firms to focus on inspecting SSL traffic.

The company also noted other trends in its threat report, including the increase in network-connected devices in the enterprise. Such devices connected to the so-called Internet of Things are often vulnerable to attack. The most common IoT devices are focused on entertainment, comprising 30 percent of all devices detected, security (27 percent) and health (13 percent).

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PR: InvestFeed Showcases First Version of Cryptocurrency-Based Social Investment Platform – Bitcoin News (press release)

This is a paid press release, which contains forward looking statements,and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Launch comes mid-TGE and well ahead of product roadmap

New York, NY August 4, 2017 investFeed, the social investment network that dropped equities for cryptocurrency, has rolled out the first version of its new platform midway through its Token Generation Event. The beta, initially scheduled to be released within 90 days of its August 7th TGE close, was fast-tracked to give participants and potential users a taste of the unique cryptocurrency-based marketplace and a first-look at live tickers and weighted average price charts. The New York based tech company made the controversial pivot from equities to cryptocurrency due to repeated requests from their users, as well as the explosive growth of the $100 billion USD cryptocurrency industry. Their Token Generation Event, initiated July 23rd, is designed to help fund the development of the new platform, as well as provide users a utility token for accessing popular investing ideas, peer-to-peer price predictions, investor insights and Boosting or promoting individual content.

CEO of investFeed, Ron Chernesky said, Our development team has been working around the clock to roll out the first version of the platform and it looks beautiful; its like Facebook, cryptocurrency and the Bloomberg Terminal met for the very first time. One of our goals was to give mainstream users a simple, aesthetically pleasing UX and remove the technical barriers and complicated language associated with blockchain and cryptocurrency.

Several months ahead of the technical schedule outlined in their white paper, investFeeds new platform, thanks to a newly formed data partnership with market leaders, Bravenewcoin.com (BNC), now showcases a list of 235 high-performing, highly liquid cryptocurrencies and their associated price tickers, channels, pairings and weighted averages in USD. Users can now start messaging each other, post comments and share cryptocurrency market insights, and soon access buy and sell functionality directly within the platform.

Just like we linked every top online stock trading brokerage to our original platform, we will begin to form relationships with digital asset exchanges so that users can link their accounts on investFeed and make informed decisions, using the most accurate market data possible. The end-goal is to become the one-stop shop for everything cryptocurrency, and unite a growing community in one of the most nascent industries of our generation.

BNCs CEO Fran Strajnar stated Were always excited to see top tier teams build fantastic products and look forward to supplying further value add data and analytics as investFeeds users demand grows.

In the very near future, more features will be unlocked and added to the new investFeed platform, including instant notifications on user-assigned price alerts, as well as alerts on moves made by peers and high performing traders.

Meanwhile, former top advisor to Ethereum and founding advisor to Lisk, Steven Nerayoff has joined investFeeds advisory board. In 2008, Steve Nerayoff founded Maple Ventures, a venture capital firm primarily focused on emerging technologies including blockchain and cryptocurrency, and is one of the most influential and well-respected advisors in the industry.

###

CEO of investFeed Ron Chernesky is available for interview

About investFeedinvestFeed is the first incentivized next-generation social investment network for cryptocurrencies. Since the companys inception in 2014, investFeed attracted a community of 15,000+ users, with over 200,000 live feeds, sharing market investing insights. Across Q3 2017, investFeed is pivoting from US equities to cryptocurrencies due to both user demand and the extraordinary growth of blockchain based assets. investFeeds new platform allows the cryptocurrency community to establish professional relationships, promote user content and share rewards-based investing ideas. investFeed is conducting a crowd sale from July 23, 2017 to raise capital for the development of the cryptocurrency-specific platform, and to issue FEED tokens to participants.

Press Contact Email Addressjustin@investFeed.comSupporting Linkhttps://tokensale.investfeed.com/

This is a paid press release. Readers should do their own due diligence before taking any actions related to thepromotedcompanyor any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Bitcoin Has Split Into Two Cryptocurrencies. What, Exactly, Does That Mean? – Slate Magazine (blog)

This picture taken on April 7, 2017, shows a man walking past a signboard informing customers that bitcoin can be used for payment at a store in Tokyo.

AFP/Getty Images

If you owned bitcoin prior to Aug. 1 and slept in a little that morning, you would have woken up to find your stash had doubledsort of.

Before Aug. 1, there was a single bitcoin currency simply called bitcoin, or BTC. Like most cryptocurrencies, bitcoin avoided having a central bank that verified transactions by maintaining a constantly verified ledger of transactions that was distributed across thousands of computers. This ledger is called the blockchain, and up until Aug. 1, there was only one of it. That day, at 8 a.m. Eastern, an alternative coin called Bitcoin Cash, or BCC, was born when the bitcoin blockchain split in two. Bitcoin Core, as the original currency is now called, and Bitcoin Cash have identical ledgers until Aug. 1. Now each currency maintains a separate ledger, and since cryptocurrencies are represented by their blockchains, that means bitcoin has effectively split in half, giving each user a bank account filled with both currencies.

The question of why bitcoin split is a deeply political one, as much about the philosophy of what bitcoin should be as it is about practical concerns of payment speed and per payment surcharges. As David Z. Morris described in Future Tense in June, the dispute centers on the maximum size allowed for any block in the blockchain. This is a technical point, but you can think of it as arguing over how many transactions are allowed on one page of the ledger. The original limit, imposed by pseudonymous creator Satoshi Nakamoto either as doctrine or temporary fillerdepending on whether you support BTC or BCCwas 1 MB of data. This low limit is leading to delays in the amount of time it takes a transaction to be verified, which is itself leading to higher surcharges for premium verification. (For a primer on how this all works, click here.)

If transaction time were the only issue, though, there wouldnt be a three-year-long flame war and a battling subreddits, one for each coin. There are two other issues. One is that the BTH folks think that allowing larger blocks hinders small players from mining bitcoins, centralizing power in the hands of large mining entities. Bitcoin was created as an alternative to centralized currencies, however, so greater centralization is a serious accusation. Point for BTC.

BTC has proposed a size increase of its own, one that comes with an even greater philosophical change. Segregated Witness, also known as SegWit2x, aims to fit more transactions on one page of the blockchain ledger by doubling the size of the page (that is, doubling the blocksize limit), and by reserving all space on the page for transactions. Right now, each page (each block) contains transaction details (Alice gave Bob 2 BTC), and signatures (I, Alice, agree to give Bob these 2 BTC). Instead of making the page much longer, SegWit2x wants to create more space on the page by erasing the signatures and reserving that space for transactions. Many believe this proposal changes the fundamentals of bitcoin more than BCC does, and in terms of structure of the chain, they are right. Thats why some supporters of BCC oppose the name alternative coin, they view what theyre doing as closer to Satoshis vision than BTC. Point for BCC.

However, the Highlander there can be only one approach is a false choice. To understand why, we need to look at the recent history of another cryptocurrency, Ethereum. Back in June 2016, $50 million were siphoned away from the Ethereum blockchain by some clever thieves. However, the thieves werent quite as clever as they thought. Because of the way they drained the money, they had to wait 28 days before they could withdraw it and, presumably, retire to some tropical locale. In that time, Ethereum made a hard choice, one that Gavin Wood, co-founder of Ethereum, called the single most important moment in cryptocurrency history since the birth of Bitcoin. Rather than let the thieves make away with the money, a large portion of Ethereum users forked the blockchain so that the transactions that stole the ETH never happened.

A lot of people were upset by this. It violated the spirit of the blockchain. The purists split off and started their own cryptocurrency called Ethereum Classic (ETC). A year later, both currencies are still used (though ETH is worth far more than ETC) and are fairly stable. In fact, their combined value is greater than the original value.

The same thing seems to be happening with bitcoin. According to Quartz, BCC is already the third most valuable cryptocurrency, behind BTC and ETH. And, just like the Ethereum split, the BTC-BCC market is worth more than the original market was. However, while there can be more than one currency, thats not to say there will be. It took six hours for the first BCC block to be mined, a process which usually takes about 10 minutes on BTC. That block was 1.9 MB, larger that BTC would allow, but the next block on BCC was only .04 MB, stoking fear that not enough miners had adopted BCC. Whether the achievement of BCCs debut as a new cryptocurrency is a Pyrrhic victory for the founders or a resounding success will hinge on the answer to that question.

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New ‘bitcoin cash’ crashes 30% Friday in volatile first week of trading; original bitcoin steady – CNBC

Bitcoin is holding up well against its offshoot rival in its wild first week of trading.

The new "bitcoin cash" plunged 30 percent Friday to below $300, while the original cryptocurrency edged higher and approached $2,900, nearly triple in value for the year.

Bitcoin split into bitcoin and bitcoin cash Tuesday, and the new digital currency has swung dramatically amid limited trading access. Bitcoin cash leaped from around $220 to above $700 briefly Wednesday, before crashing Friday to $287 in early afternoon trade, according to CoinMarketCap, which tracks prices across exchanges.

Digital currency enthusiasts attributed the decline in the last day to an increase in exchanges accepting deposits of bitcoin cash.

Bitcoin cash one-day performance

Source: CoinMarketCap

Investors who held bitcoin on most exchanges as of Tuesday morning, when the split happened, should have automatically received the equivalent amount of bitcoin cash.

A major digital currency exchange, Bitfinex, tweeted Friday morning it now accepted bitcoin cash deposits and withdrawals, while another large exchange, Bittrex, began accepting bitcoin cash deposits Thursday. Popular digital currency wallet, or storage site, Trezor, also announced Thursday that it restored customer access to bitcoin cash.

Coinbase's GDAX exchange initially said it would not give customers bitcoin cash, but announced late Thursday it would support the new currency by Jan. 1, 2018.

"I suspect the price drop is people selling newly minted" bitcoin cash, said Brian Kelly, a CNBC contributor and CEO of BKCM, which runs a digital assets strategy.

Nearly two-thirds of trading in bitcoin cash was being done in bitcoin, and about 43 percent of those transactions were conducted on Bittrex, according to CryptoCompare. U.S. dollar transactions in bitcoin cash accounted for 22 percent, the site showed.

The original bitcoin traded Friday nearly 3 percent higher at $2,894.91, holding near Tuesday's highs, according to CoinDesk. Bitcoin hit a record high of $3,025 in June, briefly more than tripling in value for the year.

Rival digital currency Ethereum traded 2 percent lower near $219, according to CoinDesk. Ethereum has surged more than 2,000 percent this year.

Bitcoin this week

Source: CoinDesk

Bitcoin split into two versions Tuesday morning after a minority of digital currency developers decided to go ahead with their own upgrade process. Bitcoin cash removed compatibility with a more popular Segregated Witness upgrade proposal and expanded the size of the block which limits the speed of transactions in the digital currency from bitcoin's 1 megabyte to 8 megabytes.

Bitcoin cash supporters such as early bitcoin investor Roger Ver say the currency is closer to the original developer's intentions.

Read more here:
New 'bitcoin cash' crashes 30% Friday in volatile first week of trading; original bitcoin steady - CNBC

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