Bitcoin Weekly 2014 October 29: Bitcoin sidechains, the Bits debate, identify scams and frauds, G+ Bitcoin community
This week in Bitcoin is still overshadowed by last week’s Bitcoin sidechains AMA by the authors of a vastly popular whitepaper on this technology that might fundamentally change how the Bitcoin protocol can be used.
Scams can be fairly prevalent in the wild, wild west of BTC–even as it slowly gains mainstream adoption (or perhaps because of that approach to the mainstream) so its important to know how to tell who is good and who is bad so we take a look at BadBitcoin.org.
The G+ Bitcoin Community surpassed 100,000 members and SiliconAngle briefly interviewed Avatar X, the community host, as to its future.
The Bitcoin market has been seeing a continued downward trend since the last Bitcoin Weekly falling to around $340 from almost $385. Last week around Oct 22 the market value of BTC had reached $385, but then quickly dropped to a band around $355; however today, the value fell even further to around $340.
This and more in this Bitcoin Weekly.
Bitcoin sidechains: What they are and what they aren’t, with Blockstream
Last week, two Bitcoin core devs and other extremely smart people made a splash in the Bitcoin community with the release of a white paper on Bitcoin sidechains: a concept that allows the construction of blockchains that provide external functionality to Bitcoin but remain entangled with Bitcoin itself.
The whitepaper announcement came along with the revelation of Blockstream, a business co-founded by several of the authors of the whitepaper dedicated to innovating around the idea of sidechains.
The sidechain whitepaper and Blockstream both have a very strong lineup of people involved including Bitcoin core developers Gregory Maxwell and Pieter Wuille. While the authors of the whitepaper and Blockstream’s founders are not entirely the same people, there is some overlap.
The whitepaper announcement opened with a Reddit AMA and this led to a sweep of the news media and community with articles from SiliconAngle, CryptoCoinsNews, TechCrunch, and CoinDesk. As well as blogs working to demystify the entire meaning of and concepts behind sidechains such as this excellent article by Gendal.
BadBitcoin.org: Building a scam list for the Bitcoin community
Scams happen. It’s important for anyone getting into or experienced in the Bitcoin ecology to develop a strong scam-radar and there’s a few tools out there to assist. One of those tools, BadBitcoin.org, tries to upkeep a list of suspicious sites that users should be on the lookout for.
It would appear that BadBitcoin has a hair trigger; however, the frontier of Bitcoin is an extremely fertile ground for scams so this could be seen as a good thing. A quick sampling of the most recent alerts is more or less a scattershot of sketchy sites—and looking at a random sampling it’s obvious why BadBitcoin thinks they’re suspicious.
The site includes a full blown “Bad List” and even tips on how to avoid scams and how to identify iffy sites. The site operators also run a Twitter account that emits recent scams in bite-sized notices as well as point to blog posts about the current temperature of the community.
The only criticism really for this site is that it would be useful for the site to provide some sort of factual presentation of what landed each site as a scam on the list. For the most part the Bad List contains snarky one-liners either calling the site a scam or noting some tidbit. Although some of the more egregious offenders do appear to receive a rogues gallery treatment (such as one interestingly named Michael Moriarty) but this is not the norm for entries.
BadBitcoin is useful but could be easily overtaken by a Snopes-like operation.
Remember: BadBitcoin.org is only one of a constellation of tools that Bitcoin users should use when assessing the safety of a Bitcoin-related investment, exchange, or merchant. Keeping in mind this basic guide from Dr. Bitcoin is a good start for anyone new (or old) involved in the Bitcoin community.
The Bits Debate
Currently 1 BTC is approximately $355 and the result of this is that a $2 coffee is therefore around 0.0056 BTC. Many people believe this is an unwieldy number and solutions persist such as speaking in mBTC (one-thousandth of a bitcoin) or other variants; but the most recent topic of discussion is Bits (one millionth of a bitcoin, alluded to by core developer Gavin Andresen in a recent Reddit AMA.)
At the current rate a $2 coffee would be approximately 5634 Bits.
As is the way of these things a Reddit discussion cropped up around the suggestion to address the usage of Bits instead of BTC. As a “bit” is essentially 1 uBTC (one microBTC) it could be forwarded as the colloquial term for a microbitcoin rather than having to say the entire unwieldy word.
There is already precedent in some of the Bitcoin community for using metric bitcoin values. BitcoinAverage.com has, for almost a year now, allowed a display in both BTC or mBTC (milibitcoins) to judge the current average market value of bitcoins. This is useful because it may be easier to judge the value of a bitcoin purchase when 1 mBTC is $0.56 versus 1 BTC being $355.
The psychological reason to adopt a metric bitcoin fraction is because many people have difficulty participating in bitcoin transactions when small fractions of a single bitcoin must be transferred for most daily uses. Most currencies, such as dollars, are exchanged in bulk for services and products such as $100 for a TV; which becomes cumbersome when someone needs to supply 0.281 BTC for the same product.
Debates over mBTC, Bits, etc. have not been uncommon in the community and no consensus has yet been reached on how to handle the issue. To become a cultural phenomenon, however, developers of exchanges, merchant financial services, mobile apps, etc. will have to buy into widespread use of mBTC, Bits (uBTC) or whatever other standard before any sort of adoption can take place.
G+ Bitcoin Community exceeds 10,000 members
Earlier this month, the G+ Bitcoin community surpassed 10,000 members making it the de facto community on G+ for Bitcoin enthusiasts.
The milestone was hit October 15, 2014 and the community has continued to grow since and now reaches over 10,685 members. The community has been running since 2012 on G+ and is a constant source of Bitcoin news, amusement, and discussions travelling through bitcoin circles. A must-visit for anyone interested in Bitcoin with a Google account.
“I had to not just manage the community but also be the ‘host’ and one of the most active users of it,” Avatar X, host and founder of the community, said in a message to SiliconAngle about curating the Bitcoin Community. “That way content did got in daily. And in turn attracted people to join and post.”
Avatar started the community in 2012 and has been one of the most common posters ever since. His careful gardening work has led to a bustling community brimming with news and good information. He explains that his high level of activity isn’t because he wants to dominate the conversation, but because he wanted to to attract good content from other users (who certainly have taken up that mantle over the years.)
He maintains a host position to curate information to keep the spammers at bay; but also his constant attention provides the framework for the community to shine bright on G+ and thus bring in more participants.
Avatar hopes that within a year he can back off from posting daily and let the community run relatively on its own with him only posting once a week. He also looks forward to announcing the 150,000 member milestone.
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