Weekly Bitcoin Update – 11-10-14

Posted by: DeepDotWeb

November 10, 2014

Providing the week’s biggest Bitcoin stories from around the web

Up in Flames

A bitcoin mining facility in Thailand caught fire this past month. Kabir Chibber of Quartz writes that the loss of the five-megawatt operation actually disrupted the entire bitcoin network. While the cause of the fire has yet to have been confirmed, Gizmodo has offered the possibility that flammable acoustic foam within the facility caught fire and could not be contained due to the lack of an indoor sprinkler system, a standard tool found in similar American buildings. Sarah Zhang of Gizmodo states this recent event “might just be a wakeup call to all the startups trying to mine Bitcoin on the cheap.”

Industry

BitPay has launched a new application that will allow for cryptocurrency users to make in-store payments. According to Jonathan Shieber of TechCrunch, the company’s Bitcoin Checkout application, initially launched at Money20/20 in Las Vegas, features “multi-employee checkout, tipping, and tip reporting.” The application, which features over 40 languages, is available on Android devices. However, the company also plans to launch an application for the iOS platform in the near future. The main strength of the Bitcoin Checkout application is its “one tap payment feature,” which will allow users to receive bitcoin payment instructions on their mobile phones. As Shieber writes, the company believes it will make the application “easier to use” than other payment options.

Are hobbyists still able to make a buck through bitcoin mining, or have mining pools taken the fun away from the common techie? Danny Bradbury of CoinDesk reports that bitcoin industry experts find that “rising difficulty and falling bitcoin prices” are “killing home-based hobbyist mining.” One of the main factors affecting the disparity between bitcoin hobbyists and institutional miners is the cost of electricity. Retail electricity United States run at an average price of 10 cents per kilowatt hour, meaning a hobbyist would have to mine bitcoin for a year in order to break even on their investment. In some states, like Massachusetts, bitcoin hobbyists would simply be unable to break even. Meanwhile, institutional miners have an easier time breaking even due to lower electricity costs.

Being the “king of Bitcoin” would be a desirable position for some, but not for the Bitcoin Foundation’s Chief Scientist, Gavin Andresen. According to Kim Hjelmgaard of USA Today, Andresen, “the geek-in-chief of the organization,” only wants to be the individual that completes important work at a “(technical) level.” Hjelmgaard notes that Andresen has become the “de facto face” of the cryptocurrency due to the fact that the true identify of its inventor, Satoshi Nakamoto, remains a mystery. Andresen also noted that the Bitcoin Foundation will now be focusing on the weaknesses of the cryptocurrency, determining and taking the necessary steps to facilitate its growth.

Outside of the Cryptocurrency Realm

Could Bitcoin’s famous blockchain technology be used to enhance mobile security? Embattled cellular telephone company BlackBerry may be willing to find out. Cantech Letter‘s Nick Waddell writes that Lee Cocking, a former BlackBerry employee, has recently detailed the ways blockchain technology could be use for verification purposes: “What if every mobile device, email, file transfer or firmware update is entered into the blockchain and can be independently and mathematically verified?” BlackBerry has consistently been at the forefront of mobile security development, gaining an advantage over Apple’s Secure Sockets Layer (SSL) protocol. As a result, Cocking finds that BlackBerry could be an ideal fit for the usage of blockchain technology for the purpose of mobile security.

Preventing and Exposing Fraud

Texas resident Trendon Shavers has been charged in the first-ever Bitcoin Ponzi scheme. Donna Leinwand Leger of USA Today writes that Shavers is facing “charges of securities and wire fraud after promising 7% interest weekly” through his Bitcoin Savings and Trust Company. The Texas man was found to have cheated over 100 investors out of their Bitcoin holdings, totaling at least 764,000 bitcoin. At the peak of his operations, Shavers controlled 7% of all circulated bitcoins. He will now be forced to pay $40.7 million in illegal profits and interest stemming from this civil suit.

Due to recent regulations, Bitcoin ATM Robocoin will no longer be able to facilitate anonymous transactions. Ruth Reader of VentureBeat reports that the company’s ATM operators will now be implementing “Know Your Customer/Anti-Money Laundering (KYC/AML) software and hardware) in order to comply with regulations outlined by the Financial Crimes Enforcement Network. The response to the announcement amongst Robocoin ATM operators has been less than positive. As Reader notes, “One Robocoin ATM operator went so far as to suggest a boycott against Robocoin,” encouraging ATM operators to consider using an open-source platform developed by the company’s competitor, Lamassu.

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Updated: 2014-11-10