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Megabank Joins Coinbase's Record $75 Million Funding Round
Coinbase has raised $75m as part of a Series C funding round backed by a host of impressive first-time bitcoin investors including the New York Stock Exchange (NYSE), Fortune 500 financial services group USAA, Spanish megabank BBVA and Japanese telcom giant DoCoMo.
The round, which smashes the previous record for a bitcoin company, was led by Draper Fisher Jurvetson (DFJ) Growth Fund, of which noted bitcoin investor Tim Draper is a partner, and included long-time bitcoin-friendly investment groups Union Square Ventures, Ribbit Capital and Andreessen Horowitz. Former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer contributed personal investments.
Coinbase CEO Brian Armstrong sought to frame the funding as one that will help shift the mainstream perception of bitcoin during what has so far proven a rocky year for the industry.
Armstrong told CoinDesk:
”I think this just really changes the conversation. There’s smart money out there that is betting big on this and is totally unphased by the whims of the price and what the market is doing. They’re much more concerned about the fundamentals of what’s happening in the network ... and across those metrics, everything is looking great.”
He went on to explain that all the participants in the round are excited about innovations in the bitcoin space, and that they want to leverage their investment in Coinbase to learn more about what might lie ahead.
“A lot of these companies they want to invest in category leaders,” Armstrong continued, “and we made a convincing case that that was us.”
Coinbase intends to use its new capital to grow its employee base, while focusing on improving its mobile product as it eyes entry into developing markets.
“We want to expand responsibly,” Armstrong said. “We’re in 19 countries now and our goal is to be in 30 by the end of 2015.”
The $75m figure is by far the largest ever raised by a bitcoin company, doubling the $30.5m raised by bitcoin wallet provider Blockchain and equaling roughly 23% of the public capital raised by the entire digital currency industry in 2014.
To date, the California-based company has raised $106m.
Eleven new countries
While Armstrong didn’t mention Coinbase’s new target markets, he talked generally about the types of markets the company is seeking to capture with its new funding, putting a particular emphasis on the global underbanked.
“In India, there are 100 million phones that are connected to the Internet, 2% of those people have a credit card or bank account and those people don’t have a desktop computer and they don’t have email,” Armstrong said.
He also noted that Coinbase needs to tailor its product to the needs of this customer base, translating the app into new languages, optimizing for slower Internet connections and enabling know-your-customer (KYC) due diligence without a reliance on more familiar identifiers like email addresses.
A sizable amount of the funds, Armstrong added, will be used to meet Coinbase’s regulatory burden in its new jurisdictions, a factor he called a “continued pain point”.
Still, Armstrong believes that Coinbase will also find market share outside the developing world, even if that will be in ways perhaps not expected by early adopters.
“Bitcoin will take off in areas that are underserved by traditional payment systems right now, areas where people’s next alternative is dramatically worse,” he said, citing microtransactions, cross-border payments and peer-to-peer lending as examples of verticals he believes will be profoundly impacted by bitcoin.
Doubling down on tech
Armstrong also continued to emphasize that he believes Coinbase can best secure a long-term future by providing a foundational platform to a new generation of developers through its API platform, Toshi, which it launched in September.
Notably, he suggested that developers might be bitcoin’s most enthusiastic market yet, making the API service a potentially key indicator of Coinbase’s future success.
“There’s a lot more experimentations, and if you go to GitHub, the number of bitcoin projects exceeds those on Stripe, Braintree and PayPal put together,” he said. “Bitcoin has captured the hearts and minds of developers around the world and they’re all trying to build cool stuff with it.”
Armstrong voiced his belief that Coinbase stands to gain by enabling the continued growth of bitcoin beyond payments, empowering developers with the tools to create new behaviors and new use cases for distributed ledgers.
Coinbase claims to have captured 47% of the market with its API, a development he cited as “huge” given that he believes many applications of the technology have yet to be uncovered.
Real user growth
Yet, while Coinbase has certainly improved its platform in many key areas, one issue that is continually dissected by the mainstream press is the overall lack of consumer adoption that has occurred despite bitcoin’s visibility in the tech and financial press.
Armstrong indicated that the company now has more than two million wallet users, and that the firm's metrics suggest user growth does not correlate with the price of bitcoin.
Still, Armstrong asserted that Coinbase’s investors aren’t concerned about the company’s current user base, but are instead focusing on how it can grow in the long term.
“These are the kind of questions that investors were asking, they wanted to see if the fundamentals of this infrastructure that you’re building are there, but not just us, the bitcoin network,” Armstrong noted. “They’re looking at this short-term stuff as a distraction,”
Overall, Armstrong seemed largely conservative when talking about how the bitcoin ecosystem would continue to develop, suggesting he sees the technology’s road to wider adoption as being one that will require persistence and patience.
“There’s never a moment when [adoption] happens,” he said. “It’s like the Internet, there was huge hype, there was a crash. There’s not going to be a moment where everyone says it’s now mainstream, but there will be interesting milestones.”
The case for Coinbase
Throughout the conversation, however, Armstrong made the argument that Coinbase was able to garner its impressive capital because of strengths that go beyond the underlying power and potential of bitcoin.
“We have Fred Wilson as an investor and he thinks we’re one of the best product execution companies he’s ever seen,” Armstrong said, further describing the company’s ability to set and meet goals as “ruthless”.
For example, Armstrong cited his team’s success at signing up billion-dollar merchants and shipping products like its 'Vault' storage accounts, USD balances and account insurance in 2014, while expanding to 18 new countries at the same time.
“When I look back over 2014, we checked off a lot of items for the company and hopefully bitcoin as a whole,” he stated, adding that while the company hasn’t been perfect, it has largely kept the confidence of its users.
For now, Coinbase also has the confidence of a new class of investors that could enable it to pursue an even bigger and bolder vision for bitcoin in the face of the inherent existential risk that dogs the still-nascent technology.
Armstrong, however, asserted that while the mainstream market may not see the big picture of this latest funding round, they will over time.
“Smart money often makes contrarian bets,” he concluded. “That’s how they win big.”
Bitcoin.de Launches Integration With Fidor Bank Accounts
Bitcoin.de'sg-standing partnership with Fidor Bank has finally borne fruit, with the company claiming it is the world’s first bitcoin trading platform with a "direct connection to the classic banking system".
Bitcoin.de says the arrangement brings far faster service, allowing EUR/BTC trades to be completed within "seconds" when both customers have a free 'FIDOR Smart Giro Account'.
Extra security is also promised, with customers' funds staying within their Fidor Bank accounts, rather than being held by a centralised body, such as an exchange.
In the case of insolvency or security breach, Bitcoin.de points out, those funds are all too easily lost, with no guarantee of return. The same applies should a bitcoin exchange prove fraudulent, as was alleged recently in Hong Kong.
Accounts held at Fidor Bank – which, as a licensed German bank, is highly regulated – are covered by a "standard deposit security of €10,000".
To put this arrangement in place, took over one and a half years of development work, with regulatory requirements being taken into account and a new set of Terms and Conditions being created for the business, according to Bitcoin.de.
'Massively enhanced security'
Oliver Flaskämper, board member of Bitcoin Deutschland AG, said.
“That is not only good news for all bitcoin fans, but also good news for FinTech companies based in Germany. Together with the right partners more is possible in Germany than one might think.”
Fidor Bank CEO Matthias Kröner explained that, in the bitcoin environment, conducting money transactions promptly from one bank customer to another enhances security "massively".
"As such," he said, "Fidor Bank is setting a further milestone in digital banking”.
Bitcoin.de is a peer-to-peer bitcoin trading platform that allows bitcoin buyers and sellers to deal directly with one another, rather than dealing with the company, as is the case with bitcoin exchanges.
Crypto-friendly bank
In October 2013, digital currency exchange Kraken also forged a partnership with Fidor to offer its European customers regulated bitcoin trading services.
Unlike most other banks globally, Fidor seems very open to cryptocurrency business, as well as the technology itself. In May of last year, it became the first bank to integrate Ripple's payment protocol, allowing its customers to instantly send any currency in any amount through the bank's money transfer system.
Kröner said at the time:
"Ripple enables us to securely and instantly send money anywhere in the world at no additional cost and through the same customer facing products and relationships we offer today."
Finding solutions to risks of centralising customers' funds in a single company's bank account seems to be a growing trend. In Hong Kong, bitcoin exchange Gatecoin recently launched, promising segregated bank accounts for customers, and notably covering 40 countries across the globe.
Gatecoin is a licensed Money Services Operator in Hong Kong, meaning it is monitored by the country's Customs and Excise Department.
Vogogo Closes Oversubscribed $8.5M Financing Positions to Bring Effective Risk Management and Payment Services to the Global Cryptocurrency Industry
CALGARY, ALBERTA--(Marketwired - Aug. 5, 2014) -
Editor's Note: There is an image associated with this press release.
Redfall Technologies Inc. ("Redfall") d/b/a "Vogogo", a payment processing specialist, and Southtech Capital Corporation ("Southtech") (a TSX Venture Exchange listed Capital Pool Company) are pleased to announce that further to the press release of Southtech on May 7, 2014, they have completed a brokered and non-brokered private placement of 11,333,333 subscription receipts ("Subscription Receipts") of Redfall at a price of $0.75 per Subscription Receipt for gross proceeds of $8,500,000 (collectively, the "Financing"). The syndicate of agents in respect of the brokered portion of the Financing was led by Cormark Securities Inc. ("Cormark"), and included Salman Partners Inc., Clarus Securities Inc., Beacon Securities Limited and Canaccord Genuity Corp. (collectively, the "Agents").
Vogogo
Vogogo provides comprehensive risk management, security, compliance and payment services, enabling cryptocurrency businesses to transact seamlessly with traditional banks and Fiat currencies. Transacting with traditional banks has been a major hurdle for crypto businesses to date and is seen as critical to the wide spread adoption and proliferation of these innovation technologies.
Due to their key positioning, Vogogo captured and effectively services the Canadian crypto industry. Vogogo's technology and services enable crypto currency businesses to meet strict compliance and risk mitigation requirements of conventional banks and regulators. With effective risk management, compliance, and security in place, Vogogo has assisted in making Canada a reputable region for crypto businesses. An expansion into the U.S. market is now underway and expected to go live in the coming months.
Vogogo CEO Geoff Gordon said of the announcement, "This is a another milestone for Vogogo and an endorsement of our potential. The ability for the global crypto industry to meet the stringent requirements of regulators and traditional banks is one of the most significant challenges for the crypto space. Vogogo unlocks potential for growth, collaboration and innovation in the crypto space."
Qualifying Transaction
Upon the satisfaction of all conditions to the completion of the amalgamation (the "Amalgamation") between Redfall and Southtech to form "Vogogo Inc." in accordance with the amalgamation agreement dated May 7, 2014, as amended on July 31, 2014, between Redfall and Southtech, including, without limitation, the receipt of all required shareholder and regulatory approvals (the "Escrow Release Conditions"), each Subscription Receipt shall automatically convert and be exchanged, for no additional consideration or action on the part of the holder thereof, into one (1) common share ("Vogogo Shares") of Vogogo. The common shares of Redfall into which the Subscription Receipts will convert will be exchanged for 11,333,333 Vogogo Shares as part of the Amalgamation.
The gross proceeds from the sale of the Subscription Receipts has been delivered to CST Trust Company and will be held in escrow pending the completion the Amalgamation. If the Amalgamation is completed on or before 5:00 p.m. (Calgary time) on September 16, 2014, the net escrowed proceeds will be released to Vogogo.
If the Escrow Release Conditions are not satisfied on or before 5:00 p.m. (Calgary time) on September 16, 2014, or the Amalgamation Agreement is terminated at an earlier time or if Redfall or Southtech has advised Cormark or announced to the public that it does not intend to proceed with the Amalgamation (each a "Termination Event"), holders of Subscription Receipts will receive a cash payment equal to the offering price of the Subscription Receipts and any interest that was earned thereon during the term of the escrow.
In connection with the Financing, Redfall agreed to pay the Agents and certain arm's length finders a commission equal to 7% of the gross proceeds raised by the Financing (the "Commission"). The Commission is being held in escrow and will be released to the Agents and certain finders upon satisfaction of the Escrow Release Conditions being satisfied. In the event a Termination Event occurs, the Commission held in escrow will be used to refund the offering price of the Subscription Receipts to the holders of the Subscription Receipts, and the Agents and finders will not be entitled to any Commission. In addition, Vogogo will issue to the Agents and certain finders, compensation options which entitle the Agents and such finders to receive, in connection with the Amalgamation, options to purchase 793,333 Vogogo Shares, which options will be exercisable up to two years from the date of issuance at an exercise price of $0.75 per Vogogo Share.
Shareholder Meetings
Redfall and Southtech will be mailing a joint information circular dated July 31, 2014 (the "Circular") in respect of the shareholder meetings of each of Redfall and Southtech to be held on September 10, 2014. A copy of such Circular may be found under Southtech's profile on SEDAR at www.sedar.com. Shareholders of Southtech are encouraged to review the Circular carefully for additional details in respect of the Amalgamation. Southtech has applied for, and received, an extension from the TSX Venture Exchange (the "TSXV") until September 17, 2014 in order to complete the Amalgamation, which will constitute Southtech's "qualifying transaction" pursuant to the policies of the TSX Venture Exchange. In the event the Amalgamation is not completed by September 17, 2014, assuming approval of disinterested shareholders of Southtech, Southtech will be transferred to the NEX board of the TSXV and 2,000,000 Southtech Shares issued to non-arm's length parties shall be cancelled.
About Vogogo
Vogogo is a payment services company with an expertise in software development. Founded in 2008, Vogogo designed, built and launched a web-based payment processing technology while growing their expertise in software development, payments, risk management, and related financial services. Vogogo developed the technology to support multiple electronic payments for both the U.S. and Canadian markets. The platform started out with successful integration into several large web based (E-commerce) businesses. To date, Vogogo has successfully processed more than $1B in US and Canadian payments and the software is praised by its users for its simplicity, efficiency and ease of use.
Maintaining the original principles of offering payment and financial solutions that are easy, effective and efficient, Vogogo intends to execute on its plan to sell to global markets. The plan focuses on niche market opportunities where Vogogo believes it has a competitive advantage due to its technology.
With a full portfolio of payment and financial services secured by risk management technology, Vogogo is poised to be a competitive full-service payments and financial services provider in global markets.
About Southtech
Southtech was incorporated under the Business Corporations Act (Alberta) on April 4, 2011, and is a "reporting issuer", as defined in applicable Canadian securities legislation, in the provinces of Alberta, British Columbia and Ontario. The common shares of Southtech are listed for trading on the TSXV under the trading symbol "STU.P" and Southtech is classified as a "capital pool company" pursuant to Policy 2.4 of the TSXV. As a capital pool company, the current business of Southtech is to identify and evaluate potential acquisitions of commercially viable businesses and assets that have the potential to generate profits and add shareholder value. Except as specifically contemplated in the policies of the TSXV, until the completion of a Qualifying Transaction, Southtech will not carry on business, other than the identification and evaluation of companies, businesses or assets with a view to completing a Qualifying Transaction.
Trading Halt
Southtech Shares will remain halted pending receipt of applicable documentation by the TSXV.
What Does it Take to Succeed as a Decentralized Autonomous Organization?
The concept of a Decentralized Autonomous Organization/ Corporation is an idealistic outcome of the crypto-tech revolution.
Its roots originate in themes on organizational decentralization that were depicted by Ori Brafman in Starfish And The Spider (2007), and ones about 'peer production', aptly described by Yochai Benkler in The Wealth of Networks (2007).
But these two themes were recently joined by the advent of cryptocurrency-related technologies by Dan Larimer who observed that Bitcoin is the original DAC, and Vitalik Buterin who expanded on that construct by generalizing it further as a DAO, noting that the DAO has "internal capital".
The deregulation of crowdfunding and unbundling of services were two additionally paired themes that added to this combustion, and the whole thing was turbo-charged by a crypto-tech governance layer of technologies and trust-based automations to allow DAOs to run, as Stan Larimer says, "without any human involvement under the control of an incorruptible set of business rules."
Screen Shot 2015-02-04 at 8.41.27 AM
A few thought leaders and visionaries explained the theory and vision of DAOs/ DACs, but missing from the literature are real experiences and a deeper dive into the realities of operating a DAO. Certainly not all DAOs will be born by following a cookbook. And there will be variations and shades of purity in DAO principles, for practical purposes.
So how do you get there, and what are the pieces of the puzzle from an operational/ practical view?
Just because we can add crypto-tech doesn’t mean that the DAO will be successful. As a play on words, a DAO is DOA (dead on arrival) until the market starts to validate its assumptions.
Evolutionary Paths to DAOs
Although it is possible to aim for a DAO from day one of planning, it is also possible to evolve towards it, and it’s equally feasible to incorporate parts of a DAO construct into a traditional organization.
If the DAO is the actual nirvana in terms of autonomous agents doing their work via artificial intelligence or smart programs, then we could imagine a path to an evolutionary sequence, where each subsequent stage builds on the functions of the previous one, as depicted in the following graph:
Screen Shot 2015-02-04 at 2.33.16 PM
Participative – users voluntarily and independently participate in loose tasks.
Collaborative – users collaborate and add value towards common goals or objectives.
Co-operative – users expects some shared gains to be returned.
Distributed – starts the propagation of these functions by multiplying them across a wider net.
Decentralized – further scalability is reached by instilling more powers to the edges.
Autonomous – autonomous agents, smart programs, and (later) increased levels of artificial intelligence and AI algorithms will provide self-sustainability in operations and value creation at the centers, edges and arteries of an organization.
The Operational Framework for a DAO
In this post, I just wanted to lay out a framework for booting-up and operating a DAO, so there are no illusions about what it will take for be successful. My objective was to simply lay out the various pieces so you can think about them in a methodical manner, perhaps as an implementation guide or checklist that you gradually tackle.
There are six functional parts and they interrelate with one another:
Scope
Stake
Value
Governance
Gains
Technology
Screen Shot 2015-02-04 at 8.42.15 AM
What Scope?
The users are at the center of this evolution, and so is the architectural backbone to support these user actions. Note that the participative/collaborative/cooperative functions are user-based, whereas the distributed/ decentralized/ autonomous ones are architecture-based.
Types of Ownership Stake
There are three ways to be involved in a DAO. You can buy shares/ cryptocurrency/ tokens, or they can be granted to you, or you can earn them.
The earning part is interesting because it involves some work that is active or passive. An example of active working includes delivering on bounties for specific projects such as finding bugs, developing software, ethical hacking, or any task that is required by the DAO.
Passive working is typically accomplished by sharing something, such as your computer processing cycles, Internet access, storage, or even your data.
Units of Value
What you receive in return for your stake can also take many forms. Of course, the traditional instrument is a share (or a warrant/ option for shares), but value can also come in points, tokens, rewards or a cryptocurrency. Note that tokens could have multiple purposes, as they can represent product usage rights or ownership rights tied to some intrinsic value.
Transparency in Governance
Getting governance right is not easy, but it must be done.
Autonomy doesn’t imply anarchy, so you’ll need to think about the various parts that make up governance, whether or not stakeholders are involved actively (e.g. voting, managing, creating rules, checking rules, decision-making, reporting, regulations), or passively (e.g. feeling empowered, valued, respected, fairly compensated). Regardless, transparency in governance must prevail.
Gains Appreciation
In the traditional sense, we’ve had profit sharing or dividend participation as a form of collective gain re-distribution. But in a DAO these benefits might include voting/ special rights, or being given a special status. Ultimately, there has to be value growth via internal capital appreciation in the form of cryptocurrency or cryptographically secure tokenization of some sort.
Crypto-based Technology
The blockchain and cryptocurrency-based protocols and platforms are just enablers for the consensus mechanism. Typically, these are open source decentralized consensus and decentralized trust protocols that enable the irrefutability, verifiability and veracity of all transactions and smart programs.
These protocols can be general-purpose (eg Ethereum, bitcoin), or special-purpose (eg La’Zooz for decentralized transportation or MaidSafe for decentralized storage). There are 3 additional functional components that should be included in the technology platform:
a) A user data layer, with an assumption that data is owned by the user, and only accessible in a specific aggregate or blind form by the DAO.
b) Smart programs which are the actual transaction engines.
c) Various API’s to interface with value-added services or partners that are ancillary to a DAO.
Innovation in Value Creation
Let there be no mistake that the key objective of a DAO is value creation or production, and to make that happen, there needs to be a specific linkage between user actions and the resulting effects of those actions on the overall value to the organization, as symbolized by the value of the cryptocurrency that is underlying it.
That’s where entrepreneurial creativity needs to take place, and where business models will be concocted. Usage without value linkage is a waste and will result in a failure backlash.
But there’s a warning here. Many of these DAOs will be theoretical in their inception stages. A pre-sale only enables the DAO to start on a path. At the end of the day, a new DAO is like a startup. It requires a product/ market fit, business model realization and a lot of users/ customers. Early on, a lot of assumptions are made, and the DAO may resemble science-fiction until the product/ service hits the market forces realities. The "proof of success" will be sustainability in the market, not the pre-sales success.
I believe that getting to a DAO is a stepwise, gradual building block process that is made-up of several pieces. I think DAC/ DAO is a construct which will have degrees of purity in its implementation. There will be cases where only a % of a company is a DAC or operates like one.
If you thought that spinning a DAO is a walk in the park, it won’t be. There will be different ways to skin a DAO. And there will be various ways to operate a DAO.
This article originally appeared on Startup Management. It has been republished here with permission.
Expedia Exec Says Bitcoin Spending Has Exceeded Estimates
You can pay for your vacation on Expedia with sweet BTC!
Washington-based online travel booking giant Expedia announced it would begin accepting bitcoin for payments on 11th June, and in a new interview the company confirms that its first foray into the ecosystem is already a success.
Speaking to CoinDesk, Expedia's executive vice president of global product Michael Gulmann declined to release firm figures regarding the total bitcoin sales the company has seen so far, but reported that they have exceeded estimates.
Gulmann told CoinDesk:
"We did some estimates based on the size of Overstock and the size of Expedia, and came up with our own estimates of what we could expect, and we're meeting and exceeding those."
Further, Gulmann moved to dismiss suggestions that Expedia may simply be testing bitcoin as a payment method, and that it doesn't yet have plans to integrate the payment more broadly. He stated that hotel bookings were rather a logical starting point for adding bitcoin due to the fact that the offering accounts for the lion's share of the company's sales, adding:
"Certainly, there are people who want to book airline tickets with Expedia, but it made sense from a technology standpoint, from a business standpoint and from a customer demand standpoint to jump out with hotels first."
Gulmann went on to suggest that, should it have been considering bitcoin payments as a trial, it has already received the feedback it sought.
The announcement that Expedia would accept bitcoin through Coinbase added yet another billion-dollar company to the ecosystem, providing new evidence to support Coinbase's prior assertions that as many as 10 companies of that size could begin accepting bitcoin in 2014.
Global hotel expansion
To date, Expedia only offers bitcoin payments for hotel bookings to US customers, and only as part of its 'Pay Now' payment option for which it accepts payment on behalf of the customer. This allows the company to offer bitcoin payment services for all 45,000 of its hotels, "in one fell swoop".
But Gulmann suggested that the company is likely to extend the payment method to its other offerings, including flight bookings, car rentals and more.
He implied the addition of the company's bitcoin payment option for all global hotel services could be the next step in expanding the service, stating:
"I think we've already seen what we've needed to see, now it just comes down to timing. The primary [goal] would be to get it up globally for our hotels."
This would require the addition of the payment option for hotel bookings on all or a greater number of the company's global sites.
Expedia also offers a 'Pay Later' option for hotel bookings, in which customers can select to reserve lodging with its services, but pay proprietors directly on arrival. In this case, Expedia does not facilitate payment, so its bitcoin services are not applicable.
expedia, coinbase
Customer habits
Gulmann also provided an insight into whether he feels bitcoin would be suited for wider use in the travel industry, given that credit cards not only successfully target the industry through rewards programs, but may also come with additional insurance options.
He said that he suspects that bitcoin's lack of these features would not be a deterrent to customers, saying:
"We've never seen the form of payment to be something that the customers use as a way to protect themselves. [...] It's not something that we've heard, or that is a big concern right now."
He added that bitcoin buyers can take advantage of the company's additional insurance packages for hotels in order to add protection.
Any bitcoin refunds will be handled by Coinbase, according to Expedia's terms and conditions. Refunds are issued for the USD value of the booking, and are converted into bitcoin based on the exchange rate set by Coinbase.
bitcoin, expedia
No more dangerous than cash
Gulmann also indicated that the decision for Expedia to take bitcoin was not without its resistance internally, though he likened the discussion to the one happening more broadly around the globe.
The Expedia executive said he worked to educate those in the company who might have been influenced by bitcoin's sometimes negative media perception, saying:
"I explained it and what it really is. The simplest analogy is, it's no more dangerous than cash. Cash is more anonymous than bitcoin at the end of the day."
He further stated that bitcoin makes sense for Expedia given that, beyond providing travel services, Expedia is also a technology company.
"It was the perfect combination of the ability to do something really, really interesting from a technology standpoint, work with our hotel partners, really close that gap between customer demand and helping fill hotel rooms for our hotel partners," he added.
Images via Expedia
Right Exactly the point - make some heavy returns here on the stock!
Winklevoss Twins Plan Regulated US Bitcoin Exchange
The Winklevoss brothers have revealed plans for a fully-regulated US bitcoin exchange called Gemini, saying they will be financing the venture from their own pockets.
The company, named after the Latin word and zodiac sign for twins, as well as NASA's precursor to the moon-shot Apollo program, promises to be a "next-generation bitcoin exchange".
Gemini is aimed squarely at the sensibilities of individual and institutional US customers who have had reservations about bitcoin's legitimacy or are reluctant to wire money overseas to obtain it.
Appeal for US investors
The exchange is "New York born and bred", according to its website, and works only with American banks so "your dollars never leave the country".
Compliance is also a key marketing feature. The site promises the company will launch "in full compliance with all bitcoin regulations and consumer protection laws".
The brothers have hired engineers from top hedge funds and built at least relationship with a New York State-chartered bank, according to The New York Times.
Gemini is also touted as a "security-first" exchange to allay investor fears that bitcoin is vulnerable to hackers.
Cameron Winkevoss wrote on the company blog:
"It’s true that bitcoin's promise is a new, frictionless money, but that all becomes academic if we don't build towards an ecosystem that is free of hacking, fraud and security breaches."
Chief compliance officer for the new exchange is Michael Breu, former head of information security in the research department at hedge fund Bridgewater Associates. Chief security officer Cem Paya comes from the same position at Airbnb.
Due to its banking partnership, dollars kept on Gemini will be eligible for FDIC (Federal Deposit Insurance Corporation) insurance and are as "safe and secure as they are in your bank account today", the exchange claims.
The staff lineup of about a dozen people, mostly engineers, are country-wide but work mainly from the offices of Winklevoss Capital near Madison Square Park. Only the final approval of the New York State Department of Financial Services (NYDFS) is needed before Gemini can open for business.
Early adoptors
The Winklevosses, believed to be among the largest holders of bitcoin in the world, have been promising to jump into the bitcoin business as soon as regulatory conditions were favorable.
Since 2013, the twins have been building an exchange-traded fund (ETF) called the Winklevoss Bitcoin Trust, intended to trade on NASDAQ and for which they have filed a registration with the Securites and Exchange Commission (SEC).
Winklevoss Capital has also launched a bitcoin price index called the 'WinkDex' to price the ETF, which made its debut on Bloomberg in July last year.
It's not the twins' first venture into bitcoin exchanges. Via Winklevoss Capital, they also led a $1.5m seed funding round for BitInstant, the company founded by Charlie Shrem.
Upon Shrem's arrest in January 2014, the brothers issued a statement saying they were "passive investors" in BitInstant and "fully support any and all governmental efforts to ensure that money laundering requirements are enforced, and look forward to clearer regulation being implemented on the purchase and sale of bitcoins".
Markets Weekly: Price Jumps $50 in Four Days of Trading
The bitcoin price had an action-packed end to the week, rising in three consecutive sessions to a high of $267.35 yesterday.
The price began its run-up four days earlier at a low of $217.62. Gains were modest for the day's trading, closing just over $2 from the opening price.
But the next two days would see significant gains. The price rose to a high of $240 on Friday before rising a further $20 to hit the following day's peak.
A further $7 would be gained before momentum slowed on Sunday, with trading ending in negative category. The price closed at $234.33, representing a 5% gain over Monday's open.
From peak to trough, the bitcoin price gained nearly $50 in four days of trading. This represented a 23% gain from Thursday's open, as the run-up began.
The price action was largely positive despite a week dominated by news of dodgy dealings at a bitcoin-linked investment platform.
The platform was a Hong Kong firm called MyCoin that claimed to operate an exchange and investment scheme. Headlines blared that some $387m was taken in a Ponzi run by the firm, although that initial estimate, supplied by the South China Morning Post article that broke the story, was slashed to $8.1m according to police estimates.
Exchange volumes decline
Even with a healthy price spike, however, trading volumes have fallen. The amount of bitcoin that changed hands in the last seven days was 20% less than the previous period, standing at 3.07m coins, according to data from Bitcoinity.
Volumes fell across nearly all exchanges tracked by Bitcoinity. The big Chinese exchanges showed drops of 19% and 24% at BTC China and OKCoin respectively.
Exchanges outside China showed smaller losses in trading volume. Bitstamp's volume fell just 1% week-on-week while Bitfinex showed a 14% decline in coins traded.
Bucking the trend was Coinbase, which makes an appearance on the volume leaderboard for the first time. The Coinbase exchange was launched on 26th January as the bitcoin services firm added a significant piece to its vertically-integrated business model.
Coinbase adds exchange piece to puzzle
With the exchange, Coinbase now handles a customer's coins from the time they enter its wallet service through to their being spent using its payment processing platform at a merchant's till. The exchange allows the firm to take care of the conversions between bitcoin and fiat that both merchants and their customers require.
The Coinbase exchange also means that it no longer has to pass on orders for others to fill, while taking a slice of the day-trading pie. It's moving to a maker-taker model starting in April, where liquidity 'takers' will be charged 0.25% of orders filled at the prevailing price.
This means large US dollar and euro exchanges – platforms like Bitfinex and Bitstamp – should theoretically face a slowdown in orders from Coinbase resulting in thinner order-books for themselves.
While Coinbase's volume is still some way off Bitstamp's – by about 50,000 BTC weekly – the former's position as a universal bitcoin services supplier means it should have more room to grow.
Market-watchers like Barry Silbert have already taken notice of Coinbase's rapid ascent up the trading volume charts.
'Super Size Me' Director Explores Life on Bitcoin in New CNN Special
“This whole thing is so bananas."
So says American documentary maker Morgan Spurlock in an early scene from an upcoming episode of CNN's Inside Man that focuses on bitcoin. During the show, Spurlock buys bitcoin at the New York City Bitcoin Center, helps set up new machines at a bitcoin mine and visits now-defunct Silk Road 2.0 black marketplace to purchase a fake Rolex.
The episode debuts on 19th February at 21:00 ET/PT, and like his controversial, Oscar-nominated 2004 documentary Super Size Me, the show centers on the concept of Spurlock surviving on one particular thing – in this case, he lives on bitcoin instead of the dollar.
Over the course of the episode, Spurlock helps mine bitcoin with New York-based CoinMiner, earning a day's wage by assembling new ASIC racks. During a search for coffee shops that accept bitcoin, Spurlock convinces one store to download a wallet and accept bitcoin.
The episode features a number of animated segments detailing how bitcoin mining works, including the distributed ecosystem of miners' role in verifying transactions. Other notable segments include a visit to a coffee shop that charges a minimum of $25 for orders paid with bitcoin. When asked why the charge minimum was put in place, the barista pointed to the volatility in the price of bitcoin.
"It's so volatile that we could end up kind of getting hurt in the end, so we like to keep a good-sized transaction," the barista told Spurlock.
Spurlock conducts several interviews during the episode, including sit-downs with security researcher Dan Kaminsky, former FBI special agent Christopher Tarbell, West Virginia Democratic Senator Joe Manchin and author and bitcoin advocate Andreas Antonopoulos.
He ultimately points to bitcoin's open transaction ledger as a potential game-changer for how political and financial systems operate, concluding:
"Even if the bitcoin currency bubble bursts, the technology could go down in history as one of the most important inventions of this century. It might even change the world."
Microsoft Updates Bing Search Engine for Bitcoin Currency Conversions
Microsoft revealed on 10th February that its Bing search engine will now automatically convert currency denominations to BTC in response to simple commands.
These include queries such as "$13 to BTC" or "0.45 BTC to euros," which when entered will reveal answers using the most up-to-date price data from San Francisco-based bitcoin wallet provider Coinbase.
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The move is notable as it could represent a willingness on the part of Microsoft to embrace bitcoin. Further, the decision could force Google, the world's most popular search engine, to update its own currency converter.
Microsoft moves toward bitcoin
Microsoft, one of the world's largest software companies, has been silent on bitcoin, though its researchers have been studying it for some time.
Notably, the Washington-based company discontinued its own in-house virtual currency system last year. Before its demise, Microsoft Points allowed users to purchase games and media content on products such as Windows Phones and Xbox consoles.
Bing's BTC conversions will first be available in Australia, Canada, India, the United Kingdom and the United States, before debuting in additional markets.
Bill Gates sidesteps bitcoin questions
The announcement occurred on the same day Microsoft co-founder and technology adviser Bill Gates participated in an Ask Me Anything reddit discussion in which he was asked about his thoughts on cryptocurrencies like bitcoin.
The question, submitted by user shiruken, received 1890 points and quickly became the top question.
Gates did answer, but did not weigh in with Microsoft's position on bitcoin. Rather, he reiterated that his nonprofit, the Gates Foundation, believes that 'digital money' services such as Kenya's M-Pesa mobile service will continue to grow, especially in the developing world over the next five years. Gates elaborated:
"The foundation is involved in digital money, but unlike bitcoin it would not be anonymous digital money."
Google's next move
The decision by Bing could put pressure on Google, which has been similarly silent on all matters bitcoin, though obtained emails suggest that the company is at least taking a passive interest despite its PR silence.
Some media outlets have speculated it could try to one-up its rival by opening the doors to even more virtual currency conversions. Bing currently supports currency conversions for 50 currencies, however, Google supports a far greater number on its service.
Dell Expands Bitcoin Payments to UK and Canada
UPDATE (19th February, 2015 17:00 GMT): Updated with comment from Dell CIO Paul Walsh.
Dell has announced it has expanded its bitcoin payments program to consumers in the UK and Canada.
The announcement was revealed today at eTail West, an annual e-commerce conference, during a keynote address by CIO Paul Walsh.
In remarks, Walsh suggested that the decision was prompted by customer demand and the positive feedback the company had so far received for its US offering.
Walsh said:
“We’re hearing from our customers around the world that they want the option to use bitcoin when buying Dell products, so we are excited to deliver bitcoin as a payment method on Dell.com to our customers in Canada and the UK.”
Dell has been accepting bitcoin for purchases via its US store since July 2014. The company will continue to receive local currency from Coinbase in exchange for bitcoin orders, in this case GBP and the Canadian dollar.
Earning $56.9bn in revenue in 2013, Dell remained the largest merchant in the bitcoin space until December when it was replaced by tech giant Microsoft.
The news also follows the decision by e-commerce leader Overstock to expand its bitcoin payment option to global consumers, though it has since reported struggles encouraging international customers to use bitcoin.
Choice and flexibility
Speaking to CoinDesk, Walsh elaborated on the news stressing that bitcoin's ability to provide consumers with added choice and flexibility was key to Dell's decision to expand the payments program.
Walsh noted that since accepting the program, bitcoin has become a popular purchasing tool for both consumers as well as business customers. "We’re seeing purchases across our full product spectrum," he noted.
He indicated that Dell would not be launching any special promotions for bitcoin users, but said future offers would be posted to Dell.com.
Above all, however, he was positive in his comments about bitcoin as a payment method, adding:
"We will offer bitcoin as long as our customers demand it – it is one method of payment available to them to make purchasing products and solutions from Dell easier and meet them on their terms."
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Bitcoin is innovation - Bit-X is on the right track!