Bitcoin News For 2014 With SiliconANGLE

It’s nearing the end of 2014 and the Bitcoin economy has seen a lot of different changes in the way that people think about the technology as currency. One way that it has been changing is the continual evolution of services that surround Bitcoin, the rise of Circle, BitPay adding on partners, and now Coinbase is changing its Vault product to enable multisig capabilities.

Mining pools have always been central to the Bitcoin technology so when it looked like BTC Guild would be shutting down a lot of people got caught up in the news—fortunately the situation is not so dire and the pool owner is just moving the operation, not shutting down or selling it.

One of PayPal’s European office execs left the company recently to pursue a career in Bitcoin with Bitstamp.

The end of October saw the Bitcoin market index drop to near $325, where it stayed for the beginning of November, but Nov 4 and 5 it began an uphill climb again. Today the average appears to be hovering around $340 (BitcoinAverage.com), which is about where the index had fallen once again after breaking $400 in mid-October.

Coinbase builds multisig capability into Vault

A few months ago, Coinbase, Inc. released a product called Vault intended to allow users to securely store large amounts of bitcoins in a long term, highly secure storage. The system promised a number of security features include 2-factor authentication, a waiting period, and a 48-hour withdrawal window. The newest upgrade to Vault includes multi-signature capabilities that permits Coinbase users to control their own private keys.

Our new Multisig Vault gives the customer complete control of their own private keys. Coinbase has no ability to move funds (which means you are safe from Coinbase being hacked, going bankrupt, or anyone seizing your bitcoin). It also means that you as a customer have much greater responsibility in storing your backup key securely. If you lose this backup and forget your multisig password, Coinbase cannot help you recover your bitcoin. For this reason, we only recommend this feature for advanced users.

Since customers have control of the co-signing keys no transfer can happen out of a Vault wallet without the express interaction of the customer. This also means that Coinbase itself is incapable of moving those bitcoins without the customer’s involvement—and, in the case of Coinbase becoming insolvent, it’s possible for customers to get the bitcoins out without ever consulting Coinbase.

To prove trust in this system, Coinbase released a free open-source tool for retrieving bitcoins from the MultiSig Vault if Coinbase becomes unavailable or goes offline.

The MultiSig Vault also allows for interesting variations on co-stewardship model for wallet ownership. Vaults can be built with multiple members, that require 2 of 3 or 3 of 5 keys in order to access the stored bitcoins. Coinbase suggests this would be excellent for families or institutions that want to democratize access to the funds.

In all cases of group Vaults, Coinbase does not hold any of the keys: only group members can move or access the bitcoins.

Coinbase Vault and its mutlisig variant is free and accessible today.

BTC Guild mining pool is moving, not shutting down or being sold

News about BTC Guild has been in something of a tumult since an announcement Saturday, November 1st, claiming the mining pool would be shutting down; mere hours later an update appeared suggesting that buyers would be taking over the operation; and finally Tuesday, November 3rd, a more recent update reported that the mining pool would not be shut down or sold, instead the pool would be moving.

Owner and administrator of BTC Guild, eleuthria posted the final news to BitcoinTalk bringing a vast sense of relief to the readers of the thread dedicated to the mining pool. In the post, eleuthria mentions consulting colleagues and lawyers about moving the pool to a different country—BTC Guild is situated in the US—to mitigate regulatory issues that may arise from running a Bitcoin mining pool.

“This may involve taking on a partner, but I would maintain the primary role in the management and operations of the pool itself,” eleuthria writes. “More on this will be made available as it develops.”

The initial “BTC Guild is closing,” announcement included a number of other issues aside from regulation including the possibility of a future successful attack against the pool. To date, the BTC Guild mining pool has never been successfully hacked. To fix this issue, eleuthria suggests that the pool will likely significantly reduce the total funds on hand.

Finally, miners may see a transition to Coinbase payments—to further reduce risk and total funds on hand—but this is just a tentative possibility.

Updates will continue as this story evolves; SiliconAngle has contacted BTC Guild for further insight. Stay tuned.

PayPal exec leaves to join Bitstamp

CoinDesk is reporting that PayPal chief compliance officer (CCO) Jean-Baptiste Graftieaux is leaving to join Bitstamp as the exchange’s new compliance officer.

“I have been attracted by the culture of Bitstamp and also by its people,” Graftieaux told CoinDesk about his decision to move. “The Bitstamp employees that I have met are committed, optimistic and passionate and we share the same passion for the bitcoin ecosystem.”

Graftieaux has served more than five years as a director and CCO of PayPal’s Europe, Middle East and Africa (EMEA) division but feels that by joining Bitstamp he can follow his passion for cryptocurrency and the industry.

Q&A with Avatar X, Owner of the G+ Bitcoin Community

Last Friday, SiliconAngle had the pleasure of talking to the owner of the Google+ Bitcoin Community, Avatar X, about his experience and the answers were rather enlightening. Just last week, Bitcoin Weekly ran a blurb about how the Bitcoin Community recently exceeded 10,000 members and the social media group has continued to grow ever since.