Bitcoin Weekly 2014 February 19: MtGox continues to blame Bitcoin, BitPay releases Bitcore, BTC ATMs arrive in the US

bitcoin-weekly-apr-24Last week’s upset with transaction malleability and a Bitcoin network-wide DDoS attempt and ultimately the total shutdown of MtGox (triggering ongoing protests) has pushed the market value of BTC down to the mid $600s but it’s remained mostly there ever since. MtGox had a rocky start in explaining why BTC withdrawals had been frozen and the poor PR is just continuing. Seeing a need to spark further innovation in mobile and web app development, BitPay has released an open source JavaScript library for developers called Bitcore. And Bitcoin ATMs are appearing in the US and all over the world.

This and more in this week’s Bitcoin Weekly.

MtGox continues to lay blame on the Bitcoin protocol

…and the community is just not having it.

“I assume you refer to the malleability issue. We sincerely apologize for this incident; however, please understand that we are NOT the developers of Bitcoin.” MtGox CEO Mark Karpelès said in an e-mail to the Wall Street Journal. “We are very surprised that anyone could fault MtGox instead of the bitcoin software.”

Last week saw a great deal of upset in the Bitcoin industry as a “transaction malleability attack” struck a multitude of major exchanges and wallets. The exploit used by attackers used a protocol-level characteristic documented since 2011 that properly-implemented wallet software could work around. While some wallets and exchanges were unaffected, others felt that they should look into their own codebase and make certain they and their customers would remain untouched.

MtGox initially stopped all bitcoin withdrawals, citing transaction malleability as the reason and blaming the Bitcoin protocol. Bitcoin core developers differed in opinion immediately. That was on February 7th. Since then Coinbase, Blockchain.info, and other exchanges and wallet services have already promoted fixes to their live codebase–and most did so within days of MtGox’s initial outburst.

The reaction to the withdrawal freeze and the subsequent press statements from MtGox’s CEO have done little but fan the flames of controversy over the exchange’s current status. Reddit discussions and BitcoinTalk threads have cropped up all week emanating anger and frustration fueled primarily by MtGox’s first-to-warn and last-to-fix status.

The slow repairs, the bad publicity, and the continuing withdrawal freeze has led many in the Bitcoin industry to speculate that this is essentially the death of the first and biggest bitcoin exchange. Looking at how the company has not held its own against the changing climate of the technology, that may not be a bad thing for Bitcoin at all.

BitPay introduces open-source solution Bitcore

The Bitcoin blockchain and much of the technology that underlies the protocol has been built on the concept of open source—so it’s only fitting that when someone seeks to augment adoption that it be done in an open manner.

BitPay, best known as a merchant-facing bitcoin payment processor, has announced the release of Bitcore. An open source Javascript library based off a fork of Stefan Thomas’ bitcoinjs project that delivers “a complete, native interface to the Bitcoin network, and provides the core functionality needed to develop apps for bitcoin.”

From BitPay’s blog post on the announcement:

At BitPay, we believe that developers contemplating new Bitcoin projects should not have to resort to using proprietary APIs hosted on services running closed software. To encourage more developers to build software that interfaces directly with the real bitcoin network, we are launching Bitcore. Bitcore is an open source JavaScript library for doing anything you can imagine with the Bitcoin protocol. It is designed to run server side on node.js or client side in a web browser and interact with a trusted bitcoin node (i.e. a bitcoind instance).

Like several other companies and projects, BitPay created an internal fork of Stefan Thomas’ bitcoinjs project. We’ve decided to open source that fork and put some effort into ensuring that it had sufficient capability out of the box to attract developers to start using it.

Hook up by getting into the community and grabbing the code at http://bitcore.io.

Bitcore is available on GitHub and is looking for contributors. Perhaps even a developer like you.

Bitcoin ATMs appear in the US, across more of the world

First it was Canada, next the world–or at least the United States and Spain.

One of the most common complaints about bitcoin is that currently the virtual currency is difficult for the usual consumer to procure. If people cannot easily get their hands on bitcoins, how can they use them? The solution to this problem is kiosks that can exchange local money for bitcoins and that gave rise to the concept of the Bitcoin ATM.

In a race to get the first Bitcoin ATM in the United States, Lamassu announced the installation of a tiny little kiosk-machine in Albuquerque, N.M. It became available yesterday, Tuesday, February 18th, and is already dispensing bitcoins.

The first Bitcoin ATM in Spain will come from Bbank, which will distribute machines developed by PayMaQ, who make cash machines. They expect to distribute the machines at shopping malls in Madrid, Valencia and Barcelona. The machines are expected to be installed and operational around February 22nd, 2014. More coverage at Cryptocoins News (en Español).

Last year in October, Canada saw Bitcoin ATMs installed by Robocoin in Vancouver, Canada making Canada one of the first countries in the world to receive bitcoins via kiosk.

The concept of Bitcoin kiosks is still being tested and multiple companies are stepping up to take the mantle.

 Professor Edward Felten does a fairly good job of explaining Bitcoin on CNN

Edward Felten is a profesor of computer science and public affairs at Princeton University who appeared recently on C-SPAN to speak during The Washington Journal‘s segment about Bitcoin. He does a brilliant job explaining the technology and the concept of virtual currency.

However, he only does a fairly good job because he didn’t quite know what happens to the Bitcoin protocol once the hard limit of approximately 21m coins is met. Since miners currently receive 25 BTC when solving a block that’s a major source of income–however, miners also receive transaction fees from every transaction built into that block. Once the coin limit is met and rewards vanish, the transaction fees will be the primary source of revenue for mining.

Otherwise, this is a great video and possibly one of the best the mainstream media has produced to educate the public about what bitcoins are.