BitGo Announces Launch of BitGo Instant for Zero-Confirmation Bitcoin Transactions

Bitcoin Magazine
BitGo Announces Launch of BitGo Instant for Zero-Confirmation Bitcoin Transactions

BitGo Inc., a multi-signature security company, announced the release of its newest product, BitGo Instant, which removes transaction delays completely.

Along with its announcement of BitGo Instant, the company has also announced its launch partners for instant transactions.

“At the beginning of this week, we had six partners. At the end, we had 10. It’s not all exchanges,” Ben Davenport, CTO of BitGo, told Bitcoin Magazine . “We have a few consumer-facing apps like Fold App. All of these guys are signed up to receive BitGo transactions. Anyone with a BitGo wallet will be able to send to these businesses instantly and be credited on their exchange trading account.”

The company announced that it had signed up Bitfinex, Bitstamp, CoinHacko, Fold, Korbit, Kraken, SFOX, ShapeShift, Genesis Trading, and Unocoin.

When a bitcoin transaction is sent, it is not considered safe until it has been included in a block of transactions (“confirmed”) by a miner and been published to the network. The more confirmations that a transaction has, the harder it is to alter that transaction.

The problem is that a confirmation takes approximately 10 minutes, which is the average time it takes for a miner to find a block. For high-value transactions, many Bitcoin companies require 6 confirmations of a transactions, which should take about an hour.

BitGo Instant works on the same multi-signature technology that BitGo uses for security. Each BitGo Instant wallet has three keys. One is held by the user, one is held by BitGo, and the final is held by a third-party key recovery service (KRS). Any time that a transaction takes place, it necessitates two signatures: the user and BitGo. To commit a double spend, a user would have to collude with the KRS.

“What this allows us to do is, since we have a relationship with the KRS, they will have to communicate with BitGo before they execute an action for a user. As long as the KRS is being the disaster recovery, we’re not worried,” Davenport explained. In essence, if the KRS is used to sign a transaction, it will have to tell BitGo, which will then lock the wallet from participating in BitGo Instant.

Because BitGo is so confident in its ability to offer instant transactions without the fear of double spends, BitGo is willing to cover the cost of any bad transactions.

“What we actually do is, when we sign one of these transactions, we produce a cryptographically signed guarantee with financial backing, which is available to the recipient. If that transaction fails to get confirmed within a certain timeframe, for whatever reason, then they’re eligible to make a claim against BitGo and be compensated,” Davenport said. He went on to say that this differed from its insurance policy, which is meant to protect against theft on a BitGo wallet. “We have not had any claims on that. This is separate. This is backed by BitGo directly.”

Arbitrage Opportunities Become Available

One use case for BitGo Instant is the possibility for arbitrage between exchanges. The price of Bitcoin can vary between different exchanges, so there’s an opportunity for a trader to make a profit by buying at one price and selling at another. Traders can miss out on these opportunities when transferring from one exchange to the other because of the waiting time needed for confirmations in the blockchain.

Davenport explained that, while this isn’t the primary use case, it is certainly one that they had considered because there are so many exchanges that use its technology.

“Kraken and Bitstamp have signed up to allow their customers to do direct withdrawal. You would be able to move bitcoin instantly from Bitstamp to BitFinex, and from Bitfinex to Kraken and then to any of our other BItGo Instant partners,” Davenport said.

But while the ability to move bitcoin from one exchange to the other would provide some level of arbitrage for selling bitcoin, there remains the fiat problem for arbitrageurs.

“We recognize this doesn’t completely solve the problem for arbitrageurs because there is the fiat currency side of arbitrage. Unfortunately, fiat still moves at the Old World speed,” he said.

“I think what makes BitGo Instant different is transactions are on-Bitcoin-blockchain (no additional new blockchain or hardware); our network is open access. Anyone can get an Instant-send-capable wallet. Anyone can receive it. And the technology is available today and is easy to integrate,” Davenport said.

BitGo Instant Open to All

“Anybody can query if a transaction is guaranteed by BitGo even if you don’t have a BitGo wallet. That side is completely free,” Davenport explained. By utilizing the BitGo API, any business could integrate with BitGo Instant to open up the potential for 0-confirmation transactions backed by BitGo.

“There is a charge on the sender side. When you want to send the BitGo Instant transaction, there is a 0.1 percent fee paid to BitGo. Anything below 1BTC is free.”

Fundamentally, what BitGo is offering is its assurance that it will be able to catch every attempt at a double spend, thus preventing individuals from defrauding others with 0-confirmation transactions.

“People just want to know that someone has their back on a transaction, and that’s all they want. They know that BitGo stands behind its transactions,” Davenport said.

Jacob Cohen Donnelly is a consultant and journalist in the Bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief .

The post BitGo Announces Launch of BitGo Instant for Zero-Confirmation Bitcoin Transactions appeared first on Bitcoin Magazine.

21 Bitcoin Community Holds First Hackathon; Develops Bounty Project Git Money

When 21 Inc. introduced its first product, the 21 Bitcoin Computer, it was targeted at developers who could use the company’s hardware and software tools to create applications built on Bitcoin infrastructure. And since the company launched the product in November, there has been a vibrant community in the company’s Slack group, with developers exchanging project ideas and tips.

Hackathons are one of the most common events that developers participate in because it creates an exciting, competitive atmosphere. Last night, for close to nine hours, developers from the 21 Bitcoin community participated in the first ever hackathon.

and we’re off! Join the @21 #Bitcoin Computer Hackathon at https://t.co/LjQqHv4nEU! pic.twitter.com/Y2zR6v8dXn

— Andrew DeSantis (@desantis) January 18, 2016

Boilerplate

Leading up to the hackathon, several of the participating developers offered up a $400 bounty for the first person to build a way to order pizza through the Bitcoin Computer. This challenge was significant because the first recorded purchase with bitcoin was a transaction to buy two pizzas. Ultimately, the team realized that the Dominos APIs were antiquated, so pizza was ordered the old fashioned way.

The hackathon started with the goal of creating a graphical user interface to allow developers to quickly get started with the 21 Bitcoin Computer, also known as a boilerplate.

If you think of it like a starter kit for people that want to make apps on the 21 BTC computer. It’s a really quick way to get up and running to build an app that sort of leverages the 21 libraries and brings up that functionality into a GUI that you can feel and touch,” said Mason Borda, a software engineer at BitGo.

Right now, when a developer wants to use the 21 Bitcoin Computer, he has to use a command line interface. For many, that’s ideal; however, for other developers, having a nice graphical user interface makes it easier to get started.

Bitcoin Trades Power for Privacy

After getting started on some tasks for the graphical user interface, the conversation changed from projects to the philosophy of bitcoin; not as an economic innovation, but a technological one.

Right now, when we visit a website, we are inundated with ads and cookies, resulting in a slower Internet. Bitcoin creates the potential for a user to reclaim their privacy so that they don’t have to be tracked around the Internet.

In the developing world, you will see all kinds of opportunity to open up new commerce and create micropayments for digital services that weren’t previously possible,” said Will Binns, a member of the 21 team.

But it was another developer—who requested to remain anonymous—that focused on how commerce was going to become bidirectional once bitcoin became more widely adopted. Whereas now, users are tracked, in the future, consumers will be able to charge companies for their information. “The companies will ask for information to make the apps stronger and the consumers can demand payment for that,” he predicted.

Git Money Bounties

But all of this discussion ultimately culminated in the creation of a brand new project called Git Money. As the night went on, one of the users brought up the potential of crowdfunding projects. His hope was that people might be able to fund other people’s ideas around the world.

This concept evolved into Git Money, which converts issues on GitHub into payable bounties. A bounty could be anything from a piece of code, to a graphic or an article. Every issue that is created on a GitHub repository could have a bounty associated with it. Utilizing a bitcoin address, anyone from around the web could help crowdfund it if they felt that the issue was important.

Another use case would be a repository owner offering a bounty for a particular issue to be fixed. A company might not have the development resources for a project, so the company could post a bounty on their repository with people sharing their code.

It’s not about where you are from as a developer. It’s about how good your code is. With this system, your code speaks for itself,” said one of the participating developers.

With each pull request submitted to that issue, the contributor would include their bitcoin address. If that request was merged into the project, the bitcoin in the issue address would be transferred to the bitcoin address of the contributor automatically.

Ultimately, the goal of a hackathon is for developers to get together, share ideas, and work on projects. And last night, developers from all over the country and world shared their ideas on projects that could be built over the 21 Bitcoin Computer.

Jacob Cohen Donnelly is a consultant and journalist in the Bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief.

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BitPhone Offers Encrypted Voice and Video Calls Paid with Bitcoin

This post is by Evander Smart.

Freedom of association. Privacy. Free speech. Basic rights that many of us take for granted are under increased governmental scrutiny in today’s digital age. Private emails, phone calls and now web-based video calls are all routinely inspected in the name of national security, at least in Western cultures like the U.S. and Great Britain. The Guardian reports that Skype has provided “backdoors” to state-run surveillance programs like PRISM for years. In light of these disclosures, the tech and cryptography communities have stepped in to develop encrypted alternatives designed to preserve privacy, such as encrypted messaging like Telegram and Signal or financial privacy with Bitcoin and the blockchain.

BitPhone has started the new year off with an encrypted video “Web Call” feature that may help users beat the Skype surveillance blues, letting freedom ring once again.

Via BitPhone’s encrypted Web Call system, Bitcoin Magazine caught up with founder Gavin Stephens. The discussion focused on how quickly BitPhone has grown since the public launch of Bitphone Beta in July. With the new year, the company has already unveiled new BitPhone features based on customer demand. For example, besides encrypted video web calls, BitPhone now allows users to pay with altcoins in addition to bitcoins to stay in touch wherever users have an online connection.

“BitPhone calls have been placed to over 55 countries, and users have paid for calls with Bitcoin and a variety of cryptocurrencies, thanks to our ShapeShift.io integration,”Stephens told Bitcoin Magazine .“Many users were concerned about their privacy because public switched telephone networks are susceptible to snooping and eavesdropping. Our new Web Call feature connects users peer-to-peer and enables fully encrypted audio and video conversations. These Web Calls can be an audio conference bridge, a streaming video platform, a paid video broadcast or a private conversation. Your video calls never go to any server, so they cannot be monitored or eavesdropped on.”

Web Calls are currently two cents per minute for the caller, and the caller can set the receiver to either get the call free or be charged, a benefit for business applications. This means Bitphone users can build a business around a pay-per-minute or pay-per-call service. Whether it is a legal practice that wants to provide a preliminary consultation to tech startups or a new business with partners and customers on opposite sides of the globe, the possibilities are endless for this sort of paid, online functionality.

User safety and security are paramount in the value equation, or callers might as well use a centralized service like Skype or Google Hangouts. The contents of Bitphone’s Web Calls are not accessible by any potential government agency since these encrypted files don’t have a centralized server, much like Bitcoin.

“Collecting Bitcoin from Web callers is an excellent way to make money without subjecting your users to endless commercials and ads,” says Stephens. “We’ve also added a Web Call widget that enables users to call you using Bitphone technology from your own website. Web visitors can simply click a ‘Click here to call me’ link that uses their browser to call your private number. For a limited time, all Bitphone users who register and maintain a private URL will get free Web Call hosting for life.”

Bitphone’s fully encrypted phone calls and web video calls seem like a great option for the growing digital currency community, either for business or personal use. Who couldn’t use a little more privacy?

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