The second half of 2015 is filled with the same ups and downs as the first half, although the market value of Bitcoin continues to steadily rise. In this half of 2015 we see more hacks occur, DDoS attacks against exchanges and websites alike, and even an attempt to extort the community with a scam perpetrated on Black Friday.
The debate over the future of the Bitcoin blockchain continues as well with Mike Hearn’s release of the Bitcoin XT client–a client designed to integrate larger block sizes, but also cause a hard fork if enough miners switch to it. While this would give the block size a boost (something that’s agreed upon by the developers and community) the generation of a hard fork in the network would cause tremendous repercussions.
The Bitcoin ecosystem continues to expand with the release of the 21 Bitcoin Computer, a micro form-factor computer with a Bitcoin mining rig attached that allows for autonomous Bitcoin services to be added to the Internet of Things. Also,Microsoft adds more services to its Blockchain-as-a-Service cloud platform (which can include Bitcoin blockchain services). The foundation of the blockchain ecosystem expands as well with the emergence of the R3CEV thinktank and the Linux Foundation open source collaborative blockchain software project.
Then, just as it seems the year will come to a close without too much major drama, Craig Steven Wright gets fingered by Wired and Gizmodo as the inventor of Bitcoin Satoshi Nakamoto (a claim that is almost instantly debunked by the community). Will they ever learn?
Bitcoin started the year under $200 per BTC on the market and ends the year at $430–more than doubling in value and starting to recoup its high that it hit during 2013.
This is part two of a two part series, readers interested in catching up on the first six months of 2015 can start at the beginning.
July: Mike Tyson ATMs appear and the MIT Enigma Project
Bitcoin equity crowdfunding site Bnk To The Future, Ltd. announces that it has passed over $10 million in funds. The site is now also known for having raised $1.8 million for Erik Voorhees’s registrationless altcurrency exchange site ShapeShift AG (reported on previously).
BitTorrent services appear that use bitcoin as incentives such as JoyStream, which will use bitcoin microtransactions to promote torrent seeding, and Coinado.io, a cloud-streaming bittorrent service that now takes bitcoins for subscription.
Massachusetts Institute of Technology’s Enigma Project presents an idea for using a blockchain to provide an encrypted, auditable data storage on a privacy-centric cloud platform. The prototype allows for the computation of encrypted data by third-party processor without revealing the underlying data. The Enigma Project has since gone into beta, with signups available on the website.
An economic crisis in Greece is thought to be behind the recent rise and fall of the Bitcoin market value–which rose above $300 (nearing $315) and then falling once again back below that mark (towards $289). Pundits such as Kim Dotcom appear to suggest that Greece may become interested in Bitcoin; however, it others come out to suggest that while trading volume is up, most Greek citizens either know little about Bitcoin or just don’t have the funds to buy into the market anyway.
Bitcoin cloud mining service Cloudminr.io shuts down admist hack as customer records are offered for sale. The records include details on 79,267 customers, including email addresses, BitcoinTalk names, and information Twitter and Facebook accounts. It appears that Cloudminr did not recover as the site (and company) are still gone to this writing.
Mike Tyson gives his name to a set of ATMs under the control of Bitcoin Brands, a company whose CEO is Peter Klamka. After some investigation, SiliconANGLE writer Duncan Riley determines something is fishy about Bitcoin Brands and Klamka. Many things about the company and the presentation of the ATMs appear to be out of line and it’s questioned as a potential scam.
Spells of Genesis (EverdreamSoft SA), an interesting multiplayer tradable card game concept that places tradable cards on the blockchain, launches a sale of crypto-tokens called BitCrystals. BitCrystals are a cryptocurrency used to purchase cards for the tradable card game (TCG).
August: Bitcoin XT vs the world and the block size controversy
This month the Bitcoin XT controversy strikes the Bitcoin blockchain block size debate with the possibility of a fork splitting the community in debate. This topic comes up in more than one Bitcoin Weekly (August 19 and August 26) because the Bitcoin XT client, while supplying the usual Bitcoin protocol, also supports bigger blocks; however, it does not generate a hard fork for the blockchain until enough miners have started running Bitcoin XT over other clients.
The Bitcoin block chain block size debate has been going on for months at this point and multiple proposals have been put forward.
Numerous solutions named BIP 100, BIP 101, BIP 102, BIP ??? and others—BIP stands for “Bitcoin Improvement Proposal.” Another proposed solution has been Gavin Andresen and Mike Hearn’s Bitcoin XT client, which supports bigger blocks, but also poses the possibility of a hard fork for the Bitcoin protocol and network
Japanese authorities arrest Mark Karpeles, CEO of now defunct Mt Gox, on charges in connection to the 2014 collapse of the Bitcoin exchange. This follows up an investigation by Japanese police into Karpeles’s involvement with the slow embezzlement of funds from the exchange before it crumbled.
A spoofed TX (transaction record message within the Bitcoin protocol) tricks Blockchain.info, a Bitcoin transaction tracking website, into showing that bitcoins minted in the Genesis Block had been moved. As Satoshi Nakamoto, the mysterious inventor of Bitcoin, could be the only person who could move those bitcoins, this became an overnight sensation. Blockchain.info was quick to note the mistake (as it was a spoof) and fixed the website not to show the transaction.
A Bitcoin market flash crash occurs on the Hong Kong-based Bitfinex exchange caused by a runaway margin trade–the global value of Bitcoin falls from $250 to $211 in under 24 hours. On Bitfinex the flash crash runs to a minimum of $162.
September: Block size debate continues and the R3 thinktank emerges
The blockchain block size debate continues in earnest in September with the introduction of a letter to the community from numerous members of the Bitcoin Core development team. Notably absent from the letter are Mark Hearn and Gavin Andresen (creators of the Bitcoin XT client) and Hearn even posts a reply of his own to the letter.
Oxford Dictionaries Online adds “blockchain” to the lexicon.
September also marks the arrival of the notorious R3CEV, LLC, a thinktank joining nine of the world’s largest banks including Goldman Sachs, JPMorgan, Credit Suisse, Barclays, Commonwealth Bank of Australia, State Street, RBS, BBVA and UBS. This group of banks will work together to share data, research, ideas and technology involved in the production of a fintech solution using blockchain-based technology.
The last week of September is thick with news such as Circle (Circle Internet Financial Limited), a Bitcoin wallet and financial services company, becomes the first Bitcoin company to apply and receive regulation under New York’s BitLicense. In a move that darkens the Bitcoin community, Coinbase applies for nine Bitcoin-related patents, much to the dismay of many and distrust from the community at large. Coinbase’s CEO, Brian Armstrong, argues that this is a defensive move to protect Bitcoin from patent predators outside the industry.
Finally, 21, Inc.–memorable as the “Bitcoin toaster” company–release the 21 Bitcoin Computer, a Raspberry Pi-like machine with a Bitcoin miner attached. The 21 Bitcoin Computer acts as a tiny form-factor machine that can mine and use bitcoins, it will even connect to a marketplace that can allow the machine to act as a part of an Internet of Things or an autonomous service with an exposed API.
October: Gemini Bitcoin exchange launches and Blockstream releases “Liquid”
The Winklevoss Twins announce the launch of the Gemini Bitcoin exchange (Gemini Trust Company, LLC), which would serve 26 U.S. states and Washington D.C. as well as comply with all regulation relating to money transfers. As a run-up to the exchange’s launch, Cameron and Tyler Winklevoss held a Reddit AMA.
Blockstream releases its first Bitcoin sidechain, “Liquid,” as the first service of the company. The Liquid sidechain is designed to “improve capital efficiency and market liquidity by facilitating rapid and secure transfers between accounts held at any participating exchange or brokerage.”
In a connection between Bitcoin and gaming this month several gaming and entertainment companies partner with Bitcoin-industry companies. Lionsgate (Lions Gate Entertainment Corporation) partners with Bitcoin processing company GoCoin Pte. Ltd. G2A.com Limited, a global marketplace for video game enthusiasts, partners with BitPay Inc. to add bitcoin payments to G2APAY. Kinguin (Kinguin Limited) gaming marketplace also announces a partnership with BitPay.
November: 21 Bitcoin Computer ships and Bitcoin Black Friday suffers a scam
This month heralds a boost to the Bitcoin market value as it begins to flirt with $500; the price during this week rose to $466 on BitcoinAverage.com. It also appears that Bitcoin will be soon receiving its own Unicode symbol with “U+20BF BITCOIN SIGN” (PDF proposal).
Bhagwan Chowdhry, Professor of Finance at UCLA Anderson School, nominates Satoshi Nakamoto, inventor of the Bitcoin protocol, for the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel—popularly known as the Nobel Prize for Economic Sciences. Unfortunately, as Nobel Prize nominations are supposed to be private, it may mean the nomination did not go through. No doubt, for the tremendous effect that the Bitcoin protocol and the blockchain have and will have on the fintech industry, Nakamoto deserves an anonymous Nobel Prize.
The 21 Bitcoin Computer ships this month and when it hits the market a great deal of interest is generated. The machine, a tiny form factor Linux computer with a Bitcoin mining rig attached, runs approximately $399.99 and is available on Amazon.com.
Coinbase Inc. partners with Shift Payments (Shift Financial Ltd.) to produce the Shift card, a VISA-style card that uses bitcoins held in a Coinbase wallet for debit transactions. Coinbase asserts that this partnership and card are part of a bridge between exchanges and merchants allowing the workaday population to more readily use bitcoins for everyday exchanges (such as buying fast food and products or services from brick and mortar merchants).
Finally this week reports a large number of DDoS attacks against various Bitcoin industry websites including exchanges Kraken and Cryptsy. The DDoS against Kraken included an extortion letter, which the exchange chose not to pay, instead the company set about getting stronger servers and bought into a DDoS mitigation plan. The DDoS against Cryptsy knocked the website offline; however, Cryptsy has also been under scrutiny by the Bitcoin industry for questionable practices (such as slow BTC withdrawals) and was reported to be under investigation in the U.S. for potential fraud.
During November’s Bitcoin Black Friday period (which happens during the end of the month) a new website appeared that was different from the usual. For the past four years, BitcoinBlackFriday.com, founded by Jon Holmquist, surfaced deals in bitcoin for the Black Friday season–come 2015 and a new site, BitcoinBlackFriday.info appeared and when the fateful Friday rolled around it turned out to be a scam.
December: Craig Wright as Satoshi Nakamoto is wrong
In a situation that has been developing for some time, GAW Miners and ZenMiner, bitcoin mining properties founded by Homero Joshua Garza a.k.a. Josh Garza, caught the eye of the U.S. Securities and Exchange Commission (SEC), which placed Ponzi scheme charges against the companies and founder.
Factom, Inc., a company working on an interesting use for the Bitcoin blockchain to store provenance of documents, reports that the land registry deal with the government of Honduras has stalled. The Factom project would prove very interesting to the Bitcoin community as it would provide working proof that the blockchain has a myriad of uses beyond currency and securities.
Microsoft begins adding more to the Azure cloud Blockchain-as-a-Service (BaaS) platform starting with Eris Industries, CoinPrism and Factom—these join already existing partners ConsenSys, Ethereum and Ripple Labs, Inc.
In the wake of interest being directed at the globally distributed ledger that underlies Bitcoin (known to everyone as the blockchain) the Linux Foundation, an open source non-profit group, opens up a collaborative project to produce software for blockchain infrastructure. The group happens to include quite a few major players, including large banks such as ANZ Bank and Wells Fargo, J.P. Morgan and R3CEV (reported above). Technology leaders also join in including VMware and Cisco, Intel and IBM.
Finally, the capstone of the year: the “revelation” of Craig Steven Wright as Satoshi Nakamoto.
Someone, potentially Wright himself, leaked documentation to Gizmodo and Wired that hinted at his involvement in the early days of Bitcoin. Both news organizations began investigations into the possibility that led to the publication of two articles on the same day fingering Wright as Satoshi Nakamoto. Curious readers can find the news at Internet magazine Wired and tech blog Gizmodo.
These reports, while better researched than the equally disastrous “reveal” of Dorian Nakamoto as Satoshi in 2014 from Newsweek’s discredited report, quickly prove to be extremely problematic and are quickly picked apart by the Bitcoin community. Satoshi remains at large.
One of the key pieces of evidence used by both articles is a PGP signature and blog posts—both which are revealed to be fabricated or added after-the-fact by investigators. For example, Greg Maxwell, a Bitcoin core developer, went to Reddit to show the PGP-key connecting Wright to Satoshi is clearly backdated.
In an event that seems almost like zemblanity (the opposite of serendipity) Wright’s home is raided by Australian police mere hours after the articles are published by Wired and Gizmodo. The reveal here is that Wright has been involved in troubled proceedings with the Australian tax authority related to Bitcoin mining.
No doubt many are looking forward to the to-be-debunked “reveal” of Satoshi Nakamoto (again) in 2016.
photo credit: Bitcoin IMG_1924 via photopin (license)
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