What Happened to Bitcoin And David Seaman?

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What Happened to Bitcoin And David Seaman?

The past couple years have been interesting. I’ve stood by and watched a number of rumors about my personal life circulate and die. You cannot address every conspiracy theory or half-baked reddit post about yourself once you become a public personality. Once you get into that tit for tat, it’s game over for your peace of mind… and your free time.

There’s no need to clear up the record, but I want to. As a public personality, one of my favorite quotes is “if you want to be understood, explain.” The public demands that, as they should. And as my health appears to be in decline, I don’t want dishonest people writing my life’s story.

LOS ANGELES

I moved to Los Angeles from south Florida after a show idea I had was successfully crowdfunded, raising more than US $6,000 on the Internet to produce a season of a grassroots YouTube show dedicated to many of the political and economic issues raised from my bedroom in Florida, where the original audio podcast was “headquartered.” I loved that period of my life in Florida, interviewing local politicos and self-help gurus and bartenders. If I could go back to that, I would.

Because it was perfect.

In Los Angeles, I aligned with a toxic personality who billed himself as an attorney. In reality, his attorney status had been revoked after a couple DUIs in the state of California, but since an acquaintance Joe Rogan had vouched for the guy, I allowed him into my world. What a mistake. He squandered a significant portion of the crowdfund and excitement around the show; we parted ways shortly after realizing he wasn’t the real thing, despite his baseless threats of retribution.

His personality defects were ultimately my fault, because I was desperate to have a contact “on the ground” in LA before getting there, and on paper he was everything I wanted – not the fraudulent alcoholic he actually was, but the grounded legal mind I knew I needed during that volatile, growth-oriented period of my media life.

Aside from that, Los Angeles was transformative. Joe Rogan told me I would be his podcast’s “politics contributor” and would be on every couple months to share the latest political scandals with his audience. That turned out to be a bald-faced lie; when Bitcoin, which I had championed, dropped into the $300s, then $200s, Mr. Rogan stopped replying to my emails and text messages. His producer Brian Redban implied on Twitter I was mentally unwell, and I was – abandoned, in debt, attacked personally in ways that made my days reporting on the N.S.A. seem downright splendid by comparison.

I left Los Angeles as a result of economic necessity and moved to Colorado. In Colorado, I found a place to recover and rehabilitate my image, but not a lot of free love. Colorado may have legal weed, but it’s no Haight-Ashbury love in – even in 2016, it’s do or die, do it for yourself, Midwestern frontier ethic. And in retrospect, I like that. I needed that Midwestern sensibility. LA had made me spoiled: beautiful women, incredible former close friends including the screenwriter Ally Maynard and country legend Shooter Jennings and a couple of young billionaires up north in the Bay Area. I loved San Francisco and its energy.

I needed Colorado, though.

It was very humbling in Colorado, for me. Bottoming out and rebuilding from scratch, alone… The crypto markets were decimated at that point in time; I was worth less than a homeless person, but proud. I applied for jobs at Walmart and Target, receiving rejections. When a Walmart opening had me in mind, I gratefully accepted, driving out there as fast as I could. An email from a longtime reader I read in the parking lot caused me to tell my training manager I’d have to respectfully decline the job offer for greeter. Other life plans.

CANADA

I flew up to Canada to learn more about BitGold, and its parent Goldmoney. An entrepreneur around my age, Roy Sebag, had grown the publicly traded Goldmoney and built its popular subsidiary BitGold into a million-plus community of users transacting in verifiable, insured physical gold. We became friends and I used it as an opportunity to learn as much about the business as possible. Goldmoney had hired former PayPal Canada CEO Darrell MacMullin to helm its BitGold unit, and attracted a number of other thought leaders in the space, including Peter Schiff’s SchiffGold, which was recently acquired by Sebag’s company. The company is funded by a number of savvy financial elites including precious metals entrepreneur Eric Sprott and the legendary Soros family.

The deeper I dug, the more admiration for the self-made Sebag, both personally and as a sound money supporter.

Sebag, a former hedge fund manager, set his sights fully on fixing the fractured financial system. And to him, building a payments network on the immutable, ancient first currency – gold – just made more sense, not only ideologically, but mathematically: you can move gold ownership around the world faster and cheaper than fiat currency, which was Sebag’s breakthrough realization after years of working within the traditional financial system and profiting from it. It’s a realization that could net Sebag and his Colorado born co-founder Josh Crumb a number of devoted users in the years ahead.

CALIFORNIA / TORONTO

As fascinating as the re-utilization of gold as currency is to a researcher like me, I was also intrigued by the emergence of “Bitcoin 2.0” technology Ethereum, which was headlined at several meetups I had attended in Toronto and back in California. Turing Complete and invented by a trio of crypto geniuses, everyone from Microsoft to Chris Dixon had been saying good things about Ethereum publicly, so I knew I had to dive in.

I became friends with co-founder Taylor Gerring, interviewing him on my YouTube channel several times and showing him around Toronto when he was in town. Mr. Gerring is a different
kind of techno-industrialist. Having built the better mousetrap along with colleagues Vitalik Buterin, Anthony Di Iorio, and Roman Mandeleil, Mr. Gerring always seemed more interested in making sure that anyone who wanted to understand why it’s better could be shown that, without alienating anyone who doesn’t yet perceive the importance of blockchain-based commerce. I sensed a level of compassion and original vision desperately lacking in most other areas of the crypto economy.

PARENTS

I’m amending this section out of respect to my parents, but the fact remains, they didn’t have my back when I needed it. You don’t forget that, family or not. And you do not forget when a long time friend or family member loses confidence in you. Crypto has not been the easiest ride, but it has been the ride I’ve been waiting for all my life. A chance to create something new in the wake of the broken, senseless old stuff.

And it’s all good, to be honest, even the bad moments. I wouldn’t trade the lessons I’ve learned for a million dollars. But I know that if a million or two is all that’s ahead for me, well, that’s not the reward any of us were after. It’s still about building a better, more sensible world. As millennials, we do not have to be perfect. We simply have to be moving toward a better, more sensible world – we will build it, and our children will play in it. That’s worth fighting for.

TELEVISION

I was blessed to be a weekly panelist on the now defunct national cable program, Take Part Live. Minutes from my apartment in LA, it seemed a dream come true – I was allowed to talk about Bitcoin, gold, monetary freedom, surveillance and corruption weekly. Their host, Cara Santa Maria, was gracious, intelligent, and a friend to me.

Inexplicably, the show was canceled after that season, I was never invited back, Santa Maria and her co-host were fired (he later got a contributor role at MSNBC), and they were replaced with a fat, entitled, intellectually empty Meghan McCain, the daughter of senior United States Senator John McCain from Arizona. So unpopular was the “Meghan season” of Take Part Live, the show and network were shuttered after that season.

Disclosure: At time of publication, I hold some ether, bitcoin, gold, and US Dollars in my long-term portfolio.

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What Is Bitcoin’s Barry Silbert Doing?

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What Is Bitcoin's Barry Silbert Doing?

I continue to believe strongly, and publicly state whenever convenient to do so, that Barry Silbert’s “Ethereum Classic” scam is, well, a scam.

I try to honor as many different beliefs and views as humanly possible – that’s part of what being a researcher, journalist, and investor entails in the 21st century.

But try as hard as I might, Silbert’s “Ethereum Classic” strikes me as little more than a cryptographic scam. I didn’t particularly like how Microsoft Corp rolled out Windows 10; does that mean that “Microsoft Corp Classic” will rise to parity with legitimate Microsoft shares? No, of course not.

I don’t like much of what Google has been doing the past… three years? Or so. I don’t like Eric Schmidt’s face, either. I don’t like Google’s many failed speculative projects. Does that mean that if I create a cryptocurrency with minimal hashrate I can announce “Google Classic” and achieve parity with the market capitalization of regulated Google Inc shares? Probably not. Certainly not.

We can agree and disagree on a bunch of points, but Silbert’s “Ethereum Classic” redefines the boundaries of sensible property ownership in a way that is sure to stir up regulatory interest. And that’s bad for cryptocurrency, to be sure, but more importantly it is bad for Barry Silbert’s Digital Currency Group.

Silbert’s Classic pump has been senseless, unnecessary, and sloppy. Consider the vast disparity in messaging:

That was on August 7th. What changed Mr. Silbert’s mind so drastically versus on August 3rd, when he tweeted the following mess:

Paging the United States Department of Justice. Anyone home? Guys? This is just another pump and dumper. I’m not worried at all about the increased trolling I’ve received after publishing my stories about Mr. Silbert. This is newsworthy and The Huffington Post isn’t in the business of slowing editorial for the benefit of subjects we report on. In fact, all the heat we’ve taken over this Silbert story leads one to believe we are dropping inconvenient bombs over an inconvenient target.

And that will continue.

Read more: Why did CoinDesk promote “Ethereum Classic”?

Disclosure: At time of publication, I hold some bitcoin, ether, US dollars, and gold in my long term portfolio. As I held ether at the time of the fork, I also have a “Classic” position by default but have not sold any – Classic is a scam and I am uninterested in profiting from the sale of duplicate tokens.



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In Bitcoin’s Barry Silbert, A Prosecution Waiting To Happen

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In Bitcoin's Barry Silbert, A Prosecution Waiting To Happen

As readers may already know, I used my space here to draw attention to Barry Silbert’s Ethereum Classic scam. You can read that coverage here and here.

A source assures me Classic meets the loose definition of a scam: it is in no way Ethereum. It is just an insecure orphan chain which is being promoted by a wealthy guy in New York, relentlessly, in a way that would be absolutely illegal if “Ethereum” were a publicly traded company or commodity – which it may well be one day soon, in some form.

Ethereum inventor Vitalik Buterin has publicly pledged “100%” of his support to ETH, the main blockchain for the Ethereum community.

Especially in light of Mr. Silbert’s prior cryptocurrency run-in with the S.E.C., my source suggests a second look from authorities might result in more than a slap on the wrist this time, especially since CoinDesk – a leading cryptocurrency media outlet wholly acquired by Mr. Silbert’s Digital Currency Group recently – has shifted to a “discernible” and “biased” promotional strategy for Classic since the acquisition.

“Kathryn [Haun] owes you a drink,” the source joked, referring to assistant U.S. attorney Kathryn Haun, who heads up the digital currency crimes office for the United States Dept. of Justice in San Francisco.

Nearly a week after our first stories about Mr. Silbert broke, he finally responded to my multiple public inquiries asking for an explanation. “Yeah, I care what you think,” Mr. Silbert tweeted to my personal Twitter account.

It’s not what I think that remotely matters, Mr. Silbert. It’s the Ethereum investors, the Ethereum developers, the American and international corporations developing on Ethereum, and the law enforcement community – they are the ones who want answers, not me.

I couldn’t care less.

Disclosure: At time of publication, I hold some bitcoin, ether, US dollars, and gold in my long term portfolio. As I held ether at the time of the fork, I also have a “Classic” position by default but have not sold any – Classic is a scam and I am uninterested in profiting from the sale of duplicate tokens.



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Bitcoin And Ethereum Are Plummeting: Why?

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Bitcoin And Ethereum Are Plummeting: Why?

No one seems to know why the world’s #1 and #2 cryptocurrency networks Bitcoin and Ethereum are both plummeting today. Well, okay, this might have something to do with it.

In the wake of the Bitfinex exchange hack news, Bitcoin and Ethereum sold off broadly, with Bitcoin down 7.43% over the last 24 hours and Ethereum down a life altering 21.59%. That’s how it is in crypto, though – one day you’re shopping for the Gatsby mansion, and the next day it’s dodgy wi-fi in a tent city, just trying to place that one last trade to get you out of your Bitcoin hole. We’ve all been there.

Bitcoin, man. Not even once.

In all seriousness, though, if the market didn’t sell off after a huge exchange hack and troubling community division over how to handle possible competitor Ethereum, I’d begin to think the markets are artificial.

This is healthy and natural. People are angry and scared. They are selling to perceived higher ground until they can make sense of what is going on. Big exchanges like Bitfinex are not supposed to be losing people money in 2016. Not like this.

I noticed in Bitfinex’s statement regarding the breach they stated that only Bitcoin funds were lost – other “tokens,” including Ether, are allegedly intact.

I’ve been in crypto for too long to lose any sleep, or sweat, over this one.

I bought more of my favorite crypto today, actually. It begins with an E. Perhaps you can fancy a guess as to which one it is. And after what I heard about it this past weekend in California, oh boy. It’s about time crypto found its magnum opus. I’ll leave it there; onward and upward.

Not financial advice. No warranties or guarantees provided. At time of publication, I hold some US dollars, bitcoin, ether, and gold.

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Ethereum Classic: Is The SEC Watching?

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The currency community is tight-knit and passionate, that’s one thing we can all agree on. Shortly after this morning’s piece went up regarding my concerns about Barry Silbert promoting Ethereum Classic, a number of you brought some information to the fore that I was unaware of.

Barry Silbert, founder and CEO of the Digital Currency Group and creator of the Bitcoin Investment Trust, has already faced S.E.C. action over a strikingly similar event that involved the promotion of so-called “BIT Shares.”

Although some sources believe a less connected man would have done jail time, Silbert’s firm managed to extricate itself from the fiasco with only a disgorgement and a cease-and-desist order from the Commission. You can read the full case law here. Although there are several interesting parts, this one is most relevant, found on page 3:

2016-07-31-1469995326-9029849-bitsec.JPG

It is troubling to some in the community that Silbert attempted to divert enthusiasm for Bitcoin, the popular intermediate commodity money mined by computers the world over, into excitement for the “BIT” – which had redemption restrictions and other issues.

Some feel Silbert is orchestrating a classic “Pump and Dump” by using his name and connections to legitimize the trading of a failed orphan chain as a viable alternative to Ethereum, and there are concerns that since Silbert’s group has already attracted S.E.C. scrutiny in the past, if he were to dump his Ethereum Classic tokens at any time, it could trigger unwanted additional scrutiny and regulation for the larger cryptocurrency industry.

Now is Ethereum itself a legal asset? Within the highly regulated State of New York, Governor Cuomo himself has stated that some exchanges operating in New York are authorized by the NY State Department of Financial Services (NYDFS) to trade in Ether:

Where does this leave Ethereum Classic? Cryptocurrency is still an unregulated market, but it’s likely that if things don’t end well for Classic token holders, the S.E.C. or other regulators may have more to say about cryptocurrency – and at least for some in the community, attracting regulators’ ire is far from ideal.

If Mr. Silbert was so “philosophically” enchanted by whatever it is he sees in Ethereum’s orphan chain, some industry watchers feel he should have kept it to himself, rather than pumping it from his personal Twitter account:

Ethereum Classic: Is The SEC Watching?

You can read our earlier story on Ethereum Classic and Mr. Silbert here.

Full disclosure: At time of publication, I hold some bitcoin and ether as I research and use both technologies frequently.



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Ethereum Preps For Its Big Upgrade

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Ethereum Preps For Its Big Upgrade

If you use the official Ethereum wallet/browser Mist, community leaders on Reddit say now is the time to upgrade to the newest version ahead of Wednesday’s planned hard fork of the network.

The hard fork will allow the return of more than $50 million worth of Ether to participants in a third party project, the DAO, that uses Ethereum’s blockchain to function. The DAO was hacked, causing the funds to move, but not leave Ethereum’s network.

In the past, hard forks have been orchestrated successfully by Ethereum’s developers. The upgrade to Homestead, the platform’s current iteration, was carried out via hard fork. Ethereum is currently the #2 cryptocurrency network after Bitcoin, with a current market capitalization of about US $910 million as I file this.

I upgraded to the newest version, Mist 0.8.1, with little trouble.

Upon first boot-up of Mist, it helpfully asked me (see sample screenshot below) if I wanted to activate the new chain, scheduled to kick in at Block #1,920,000.

I selected Yes, give me the sweet hard fork already and let’s move on with this monstrously ambitious, global project.

As I like to remind my friends and YouTube viewers, I still like Bitcoin and I still own some bitcoins. But there’s something happening within Ethereum that simply continues to fascinate me. The Ethereum meetups in various cities all over the world are intriguing: there’s a revival feel to them, as if people are waiting for something truly great or long overdue to arrive. Very little discussion of price – it’s considered gauche, in somewhat stark contrast to some other crypto communities. Turnouts are big; rooms heat up from the sheer density of bodies and – alcohol and caffeine products flowing – awkward technical conversations about blockchains, the nature of money, the nature of information typically unfold. Friendships are made. Wallet app QR codes are shared.

But aside from the burgeoning Ethereum community, the amount of brainpower now focused on Ethereum feels immense to me. It feels and looks like Bitcoin did in late 2013, sometime after the big panels in D.C. wrapped up somewhat favorably on cryptocurrency’s side. Except bigger: there’s more confidence this time.

Cryptocurrency and blockchains are no longer grey areas of discussion in fintech: it’s the red hot core everything else orbits around these days.

There are so many young developers at these meetups, coding apps and future digital societies I can barely begin to understand, and they talk excitedly about them.

In part, the ethers I hold at this point are a bet that whatever these insane young people are excitedly talking about will eventually – somewhere, in some form, eventually – come to fruition.

I don’t consider thirty old exactly, but the rate of Web innovation – social networks, social apps, games, ridesharing – is quickly moving beyond my ability to track effectively. The faster it moves, the less I can focus on the new ideas with any degree of certainty. In part, the ethers – whatever they are – are my way of gaining exposure to the crazy ideas the twenty year olds are churning out. They like blockchains, they like tokenized rarity rewarding them for their zany ideas, and I can see how it could all very easily snowball and become massive beyond anyone’s imagination in a year or two, quite frankly.

More than any one use case for Ethereum I’ve seen so far, it’s the ecosystem itself that excites me. Mist is called a wallet and browser for a reason. When you mix entertainment, Internet money, and endlessly ambitious twenty year old coders for long enough, the Ethereum’s combustion engine just might start up, sending us to places unknown technologically in the years ahead.

Full disclosure: Not financial advice, provided for educational purposes only. Not intended as a recommendation to buy or sell any cryptocurrency or asset. At time of publication, I do hold some bitcoins and ethers in my long term portfolio.

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Unlocking The Secrets Of Cryptocurrency: An Interview With Ethereum Co-Creator Taylor Gerring

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Previously reserved for those living on the fringes of computing culture, digital currencies are quickly gaining popularity. You’ve probably heard of Bitcoin, but have no idea what it is. Simply put, it’s digital money that is completely secure and doesn’t use traditional banking to determine it’s value. It is known commonly as a cryptocurrency.

In 2009 Bitcoin became the first popular cryptocurrency. While bitcoin is commonly attributed to the mysterious Satoshi Nakamoto, no one really knows who he is. Since 2009, many alternative cryptocurrencies have been created. Now we have Ethereum, Bitcoin, Gridcoin, Mastercoin, Auroracoin, Titcoin, among others. While these may sound like street names of drugs, these other cryptocurrencies are frequently called altcoins.

As their popularity grows, currencies like Bitcoin and Ethereum are becoming a viable option as a vehicle for personal wealth beyond restriction or confiscation. With growth and adoption comes a new host of challenges, specifically security, as recent digital heists have tempered enthusiasm and trust in digital currency.

Outspeak caught up with two cryptocurrency experts, Ethereum co-founder Taylor Gerring and crypto commentator David Seaman, to get their thoughts on the evolution of cryptocurrency, and what comes next.

How has the cryptocurrency landscape changed since both of you got involved?

David Seaman (DS): [It’s become] more mature I’d say overall. The hobbyists are starting to look definitely a few degrees out of place; more suits from real companies and banks at meetups. 2013 crypto isn’t coming back. There are arguably less options for risk taking speculators now, less viable alt projects, in my view – but the few that are out there, like Ethereum, offer a lot of promise because of how broad in scope and application they are.

And of course I wouldn’t even categorize Ethereum as an altcoin; it’s an alternative universe. Bitcoin went one way with the blockchain it has, Ethereum is choosing to go in many other ways with its blockchain.

Taylor Gerring (TG): I agree with David: the space has definitely grown up and more professionals are now involved. Just take a look at Microsoft, Deloitte, KPMG, and many financial-services organizations. None of these were involved with crypto early on, but now there’s tons of interest, including from governmental agencies.

Based on his recent public statements, is Australian entrepreneur Craig Wright in fact the undisputed creator of Bitcoin, or are his claims still unverified?

DS: Still very much unconfirmed, so to speak. Although I’m not an expert and haven’t reviewed any of his proof first hand, it seems to fall solidly short of the spectrum of certainty demanded for such a bold claim.

TG: It could be impossible to ever truly know. If Craig is Satoshi, I believe he has the ways to prove it, so why didn’t he? Jumping straight to the logical conclusion would not be sufficient nor would [the addition of] more superficial proof. Proving that someone is Satoshi beyond a shadow of a doubt would require that many proofs are provided since some may be called under question. After 5 or 6 different cryptographic signatures of known keys by Satoshi, I think we’d have to accept that even if Craig was not Satoshi, he had access to Satoshi’s identity. At that point, it would be hard to tell the difference between the original identity and who claims to own that today.

What particular aspects of Ethereum aim to address needs left unaddressed by Bitcoin as a currency?

DS: Complex time-locking of money, royalty payment splits, complex content download/paywall revenue splits, provably fair trust-less gaming, 24/7 medical/health records where all your doctor needs to do is scan a QR code from a piece of paper in your wallet or purse… bring up your whole health history on the blockchain in seconds, decode the data with your permission, check for any allergies, etc.

Passports with a blockchain component; if you lose your passport a simple smartphone app or NFC dongle on your keychain can one day serve as backup. It’ll call up the blockchain, verify you are in fact citizen so and so, and back to your travels you go without the headache of going to your embassy in a panic. Token relays for national fiat currencies; nations can decide to save a lot of time & resources when transacting with each other, while retaining their legacy fiat currency ‘brands’ on the upper layer if they so choose.

These are just a tiny sampling that come to mind of in progress or future use cases that Bitcoin’s blockchain would have enormous trouble rendering in any meaningful way, whereas it’s my understanding Ethereum and the EVM was built to make this stuff child’s play for the right developer or blockchain as a service shop.

TG: Primarily, Ethereum tries to make coding blockchain applications as easy as JavaScript. Conceptually, there are some major changes as compared with Bitcoin, but the overall result is that cryptographic expertise is not required to develop new types of applications on an existing blockchain. With Ethereum, any application can be defined, whether that’s currency, an insurance contract, unlocking a physical door, or many things we haven’t thought of yet.

bitcoin

The Ethereum community has nearly unanimously voted for a Hard-fork. For those not in the know, what does this mean?

DS: Basically it means the community is deciding to upgrade to a new software version for the currency itself, which will require people to upgrade their wallet versions. This method has been used before to push meaningful updates to Ethereum.

TG: What we’re observing is that the community is openly discussing a whole handful of possibilities to deal with anticipated problems. This was true when we hard-forked from Frontier to Homestead, adding new features to the protocol and will remain true if the chain is forked to handle a malicious actor. In either case, it demonstrates a willingness of the community to act during important times. This is something that the Bitcoin community has been struggling [with] for the better part of a year. Although their halving has passed, the Bitcoin protocol is backlogged with transactions due to a 1MB block size cap. Forking is important for all open source software and communities should welcome new ideas rather than entrenching themselves on “the way it used to be”.

Is the marriage of Blockchain tech and physical gold an inevitability? If so, what happens when this occurs?

DS: We’re already there in the sense that BitGold, owned by the publicly traded and globally regulated Goldmoney, accepts Ether and Bitcoin as payment for physical gold. This creates a very intimate connection between the price of certain cryptocurrencies and the massive multi-trillion dollar gold market.

To answer the other part, what happens: it makes cryptocurrency more “real” in my view to have a quick ability to buy real gold with my Ether or Bitcoin balance. Users will start to treat these currencies more seriously as a result. If you think about it, it’s a perfect kind of synergy, because whereas cryptocurrency only has about seven years of economic history tied to it, gold has 5,000+ years of historical value. Gold can tie crypto to humanity’s financial past and its future.

TG: Blockchains are generally superior to precious metals as a value transfer mechanism. This is because they enable uniqueness without ceding control to a central issuer (such as gold or silver). If the Global Financial Crisis continues and we have a complete deadlock amongst traditional financial institutions, how will people move money around the world? Suitcases of cash? Gold bars? Internal blockchain transfers would be much more effective than any traditional instruments as long as we still have network connectivity.

cryptocurrency


How does the average ‘outsider’ get involved in the mining and acquisition of cryptocurrencies like Bitcoin or Ethereum. What sort of ‘starter kit’ does one need?

DS: my very simple answer is don’t even start with the whole mining road. Unless you have significant resources and time to learn, it’s probably easier to just get your favorite cryptocurrencies by doing some work for them if you can find someone willing to pay you in crypto, or by purchasing some with your old school fiat money. I continue to recommend Coinbase as an easy way to buy Bitcoin and Ether.

TG: The the layperson, “mining” simply is no longer worth the effort. This has been professionalized to the degree that most modern equipment is expensive and runs in data centers. Today, many people swap fiat for crypto on an exchange, but there may be more opportunities to get involved in providing a network resource through disk-sharing, bandwidth-sharing, or once the transition to a new validation protocol (proof-of-stake) takes place. In my ideal world, you can get started by turning your computer on for 15 minutes and having enough tokens to, for example, start paying micro transactions for content.

bitcoin

Any suggestions or advice for people looking to get educated on cryptocurrencies?

DS: Start small, don’t put in more than you can afford to lose, yadda yadda. Seriously though, this space can be a lot of fun, and very rewarding. Do your research, take your time, understand one layer before jumping to the next. And while crypto is still risky, it’s not reckless. It’s not a reckless use of your time: this very well could change the world, and all you’re doing is swapping one default currency you’re allowed to use by virtue of your birth/citizenship with another voluntary currency you’re allowed to use by virtue of having an Internet connection and a free piece of software, the wallet. So at least for me, when part of my paycheck goes into crypto speculation, there’s no remorse any more: we’re improving and fine tuning currency, not throwing our money away on the silly things many people in their 20s and 30s throw their money away on. So, it’s fine, as long as you’re having fun.

TG: Look for a local cryptocurrency Meetup community near you. There are hundreds around the world encompassing tens of thousands of people. YouTube is an excellent source of informational videos as the industry is advancing rapidly. Diversify your news, and if you choose to hold crypto tokens inform yourself about the differences between them rather than just “playing the numbers”. We’re still at an early stage for this technology, so there is plenty of time to get involved slowly as time & interest allows. In this industry we joke about “falling down the rabbit hole”. If it’s any indication of the excitement in this space, I fell in 4 years ago and still haven’t wanted to find my way out.

Thanks guys! Find David on Twitter and YouTube, and find Taylor on Twitter.



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Why Ethereum Is So Advanced

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Why Ethereum Is So Advanced

If you’ve ever downloaded the Bitcoin-qt client or another of the mainstay wallet clients available to Bitcoin users, you probably know the adrenaline rush experienced the first time the blockchain catches up and your BTC balance actually loads: you’re firmly in the future. This is nothing like your bank account, nothing like the dollars or euros in your wallet. This is Blade Runner crypto bank stuff, from your couch.

Well, the first time I booted up Ethereum’s wallet/browser Mist, I felt that – only 10x. I felt that I was playing around with a clunky, precocious prototype of what cryptocurrency would naturally evolve into sometime circa the year 2020 or 2022, let’s say. And that was at version 0.5; Mist is now up to 0.8 with some juicy new built-in futuristic features, including Stake Voice. The feature is described as “a generic polling app, intended to be able to give Ether Stake holders an opinion on any controversial topic. It doesn’t keep any ether, and all it does is verifies that a key holder indeed agrees or disagrees with that statement. The votes and balances are then tallied by the app itself and the tally is updated if any of the currently voting accounts change their balance.”

Mass real-time polling of the Ethereum community; again, this stuff feels a bit like where decentralized cryptocurrency would end up in four to six years, only we are getting to play with it today, in prototype form.

And thankfully, so far the mass polling feature has also been used for some lighthearted 2016 present day stuff: one user sought to establish consensus as to whether Nutella hazelnut cocoa spread is, in fact, overrated.

In a recent Q&A with developers at the London Ethereum meetup (video embedded above), a woman asked Ethereum’s creator, Vitalik Buterin, if he could share a bigger picture insight into the crypto technology he invented with the help of some other leading minds.

“I’m not a coder, but I think what you’re doing is going to change society at a very deep level. I was wondering if you could share your vision for the next five or ten years,” she asked when the microphone got to her.

“Ummm,” Vitalik Buterin replied initially, his typically humble Internet persona true to form at a real world meet up.

Then came his rapid fire answer: “I personally focus a lot on the mobile technology side, for the vision for Ethereum we want to create a scalable, fast, world computer that’s powerful enough that a large portion of the world’s financial, supply chain, identity, whatever infrastructure can actually run on top of it and ideally sort of create a network that can power a large part of the “internet of value” as much as we like or dislike that particular slogan on basically nothing but a few million consumer laptops.

Watch the rest of his reply to her question and other questions at the meetup on Ethereum’s YouTube channel here.

Whatever your current stance or understanding of Ethereum may be, one thing is certain aside from the size of the project’s ambitions: public interest is steadily growing.

Of all the videos on my YouTube channel, more than 200 of them, the most popular by far right now is an explainer of what makes Ethereum different from Bitcoin. A number of other Ethereum-related videos and discussions have seen a sharp uptick in views over the last couple months, and subscriptions to my paid weekly newsletter about Ethereum & the cryptocurrency industry have veritably skyrocketed over a similar time frame.

Although I have concerns that the recent DAO hack may have somewhat undermined short term confidence in Ethereum and dampened excitement for the nascent smart contracting field, I think slightly longer term – even a month or two out, post hardfork… if that’s the route that the community ends up going – it could be back to boom times, in terms of development timelines. In fact, it seems the developers haven’t take a breath – 0.8 was pushed out even in the midst of DAO drama.

And if you watch the whole clip embedded above from Ethereum London, it should become clear to you as well – that’s my hope, at least – that an awful lot of thought and testing has gone into this project so far, and likely will continue to go into it based on current valuation.

Will there be future bugs? No doubt in my mind. But I also think the scope of eventual innovation and commerce Vitalik’s creation opens up makes it worthy of future coverage, research, and usage. My view is bolstered by a recent post from the co-founder of Coinbase praising Ethereum as the “forefront of digital currency”, posted around the same time Coinbase announced acceptance of Ether on their exchange.

Full disclosure: At time of publication, I do hold some bitcoins and ethers for the long term. I’m a long term researcher and user of these currencies.



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Is The Future Of Business A Company Without Workers, Managers, Or A CEO?

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These days, it’s hardly surprising to hear that a hot new startup has received gobs of money from eager investors. But a new company called the DAO (short for “decentralized autonomous organization”) is not your average startup.

The DAO, designed to serve as a kind of venture capital fund for the cryptocurrency community, is the first of a new breed of business. It has no CEO and no staff; indeed, it has no human management at all. The company itself is simply software that runs on a blockchain, the technology that powers digital currencies like bitcoin. Through its first three weeks, the DAO raised over $130 million from tens of thousands of global investors, and it’s not done yet. But regardless of how the company fares, its mere existence portends profound changes for business, government, and the roles that people play in our economy.

Analysts have questioned whether the DAO is legal or viable. Like any startup, it may fail. It may have attracted investors who don’t understand the risks. Some investors may be speculators in it for a quick buck, in turn, reducing the size of the fund. It may be attracting criminals or terrorists masquerading as entrepreneurs. To be sure, these are important concerns.

But the DAO’s debut is a watershed moment in the history of financial services. It demonstrates that autonomous entities can raise huge sums of money without traditional intermediaries. How will venture capitalists and investment banks respond to these blockchain IPOs that crowd-source hundreds of millions of dollars from a global investor base?

Software could eliminate some of the most vexing problems of management and mass collaboration.

Even more significantly, the distributed autonomous enterprise raises the intriguing possibility that software could ameliorate, or even eliminate, some of the most vexing problems of management and mass collaboration.

Consider the impact of software that automates important aspects of governance and decision-making in a firm. Companies like this have no executive team, board of directors, or assets other than code. This could eliminate the possibility of managerial wrongdoing and incompetence. Such an organization will do what it’s coded to do, which is to act in the interests of those who hold its tokens. In the case of the DAO, the tokens are valued in Ether, the cryptocurrency of the Ethereum blockchain on which the DAO runs.

Meanwhile, stakeholders can review and vote on proposals for how the DAO will allocate its funds. Think about that for a moment. With such a company, there is no information asymmetry between management and stakeholders, because there are no managers. Nor is there room for moral hazard, where managers may behave contrary to the interests of their customers or clients, taking outsized risks for personal gain because they know they won’t suffer the consequences. There would be no way for the heads of an electronics conglomerate to overstate their earnings by $2 billion over seven years, as Toshiba’s did. Sports league officials couldn’t take bribes in exchange for hosting or broadcasting rights to big sporting events, as FIFA’s did. For regulators, there’s a lot to love here.

However, a DAO could act like a regular corporation in many other ways. It could invest in new businesses, support social causes, or back political candidates. It could hire lobbyists and a legal team to represent its interests and advocate on its behalf. Using smart contracts — agreements written in code that self-enforce — a DAO could do pretty much what any organization could do, with one important exception. On the blockchain, there is no way to override agreements, mission statements, corporate values, or operating principles without broad stakeholder discussion and consent. That’s huge.

A DAO also offers perfect financial transparency. This is a tantalizing prospect for engaged and frustrated investors alike. The company’s finances are visible on the blockchain to anyone, not just its accounting department. (Of course, there is no accounting department.) Its corporate charter is enshrined in code for all to see.

That’s only the beginning. The software could also be used as a platform for integrity, a trust protocol of sorts, within traditional corporations. Stakeholders could participate in organizational governance directly and regularly, rather than by proxy or once a year at shareholder meetings.

Such an entity could also hire any human being or group via a smart contract on the blockchain, not through an HR department or procurement. Contractors would know the rules and norms for acceptable behavior and achievement in the collaboration, because they would be encoded in work orders and performance metrics. When they completed the job as specified, they could get paid immediately, not weeks or months later.

Stakeholders could receive dividends immediately, too, since real-time transparent accounting on the blockchain would make year-end reports unnecessary. The organization would hum along according to the trust protocols that governed it.

The company’s finances are visible on the blockchain to anyone, not just its accounting department.

Imagine a global IPO with 100 million shareholders, each contributing a few pennies and voting their shares. That’s governance on a massive scale. At last, investors at the bottom of the pyramid could participate and own shares of a wealth-creating venture anywhere in the world. Anyone could design a corporation without executives — just stakeholders, money, and software.

We are not predicting a future in which there is no need for people in business. Human stewardship will be critical for these new kinds of business to succeed. In fact, in the last few days, surprised (perhaps alarmed) by the staggering success of the crowd-sale, the founders and early investors in the DAO have called for a moratorium on investment proposals for funding by the DAO. Among other things, they worry that bad actors could exploit the DAO to fund undeserving or fraudulent projects, or manipulate the value of tokens at the expense of the DAO as a whole.

So while the DAO code may run itself flawlessly, it is unable (for now) to fix itself in real time. Human problem-solvers can. Time will tell if they will succeed.

We think it is no accident that the DAO’s stated values include democracy and non-exclusion. Time will tell whether it can reach those loftier goals. But if it can, we may finally be able to democratize opportunities for prosperity and wealth. For anyone who cares about the integrity of the organizations that fuel the economy, the DAO is worth a close look as an alternative model of governance, collaboration, and performance.

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This post is adapted from Don & Alex Tapscott’s new book, BLOCKCHAIN REVOLUTION: How the Technology Behind Bitcoin is Changing Money, Business, and the World and originally appeared on Quartz

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