Bitcoing Weekly With SiliconANGLE

The news from this week contains a mixture of the usual Bitcoin expectations from developers speaking up, to technologists speaking out, and funding rounds coming to important outfits.

Gavin Anderseen, best known as a Bitcoin core developer, has spoken up about needed changes to the Bitcoin block chain to address issues of scalability in a long blog post on The Bitcoin Foundation’s website. Blockchain.info received $30 million in an investment funding round giving the Bitcoin wallet a solid chunk of cash to compete with other wallets such as Coinbase and Circle. Bill Gates mentioned Bitcoin on Bloomberg TV and had both good and bad things to say about the technology.

Finally, a huge sell order of 30,000 BTC named the “BearWhale” was placed on October 5th and gave rise to an amusing meme.

Welcome to this Bitcoin Weekly!

Gavin Anderesen argues for Bitcoin enhancements

Bitcoin core developer Gavin Anderesen, currently chief scientist at the Bitcoin Foundation, made a rare highly public announcement recently about the future of the Bitcoin block chain and his hopes and expectations for the technology. In a blog post at the Bitcoin Foundation’s website he linked to a proposed set of modifications published on GitHub and talked about plans to address Bitcoin scalability.

The first enhancement notes that currently to get started with Bitcoin a client needs to download the entire block chain, which is over 20 gigabytes. This size may be trivial for most people with solid Internet connections but the entire file must be indexed by clients after downloading and even if storage/bandwidth is good, the time it takes to crunch that is often difficult to bear. Anderseen lists a series of solutions being developed including a BitTorrent mechanism developed by Jeff Garzik, a headers-first method from Pieter Wuille, and a pruned pull-request idea by rdponticelli.

After the technical talk about potential block chain initial download optimization, Andresen addresses the ever-increasing transaction volume.

He argues that the current hardcoded 1-megabyte block size limit means that the Bitcoin network can only support seven transactions a second. This is woefully slow compared to networks such as credit processors. For example, VISA is believed to handle approximately 2,000 transactions per second (see Bitcoin Wiki Scalability.)

Anderseen suggests that the maximum block size must be increased and that the turning point will likely occur during the next price bubble when transaction volumes peak again.

He points to work done by Matt Corallo, who has implemented the first step in supporting larger block sizes.

Blockchain receives over $30 million in funding

Blockchain.info, an extremely popular Bitcoin wallet service, has stepped up from being a cornerstone of the Bitcoin economy to becoming a cornerstone with $30 million in investment. The wallet service announced Tuesday that it had completed a funding round raising a little bit over $30 million from Lightspeed Venture Partners, Wicklow Capital and others.

Also participating in the round were Richard Branson, Mosaic Ventures, Prudence Holdings, Future Perfect Ventures, and angel investors, such as Rafael Corrales of CRV, Amit Jhawar of Braintree and Nat Brown.

In an interview with Techcrunch, Blockchain co-founder and president Peter Smith said that the company would use the money to introduce new features and for the first time ever spend money on marketing.

Bill Gates on Bitcoin

As Bitcoin continues to gain mind share in the minstream media, more and more technology experts are weighing in on its practicality and effect as a tool and currency. Bill Gates appeared on Bloomberg TV’s “Street Smart” last Thursday, October 2nd.

Bill Gates is the technology advisor of Microsoft, but is best known for being the co-founder and ex-CEO of the software giant.

During the interview, Gates described Bitcoin as “exciting” and cited its ability to provide low-cost transactions to anyone with an Internet connection.

“Bitcoin is better than currency in that you don’t have to be physically in the same place, and of course for large transactions currency can get pretty inconvenient,” Gates said.

Although Gates was quick to dampen his apparent positive expectations by bringing up the anonymizing uses of Bitcoin and the currency’s previous media reputation for potential connections to money laundering and terrorism.

The Slaying of the BearWhale on October 6th

Today’s Bitcoin artwork was submitted to Reddit by user /u/mabezard. The artwork is entitled “The Bitcoin Bearwhale,” in reference to a recent large sell order.

Part of what makes this art particularly interesting is the use of candlestick charts to reflect the shape of the waves that the “BearWhale” is breaching to meet the knight with the sword and Bitcoin shield.

The “BearWhale” refers to a massive 30,000 BTC sell order submitted on October 5th on the BitStamp bitcoin exchange. According to an article in Coin Source, the 30k BTC sell order was posted to BitStamp and lasted into the very early morning of October 6th before it was melted away by interested buyers in mere hours.

Posting the 30k BTC at the desired price of $300 means that the BearWhale was cut down with a harpoon of approximately $9 million dollars.

The entire event triggered a massive outpouring of artwork and meme-based commentary about the BearWhale.

Image credit: Reddit user /u/mabezard from http://imgur.com/a/6rk2e#Wz9NE11