Instant Cryptocurrency Exchange ShapeShift Raises $1.6 Million

Bitcoin Magazine
Instant Cryptocurrency Exchange ShapeShift Raises $1.6 Million
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ShapeShift announced today that it had completed its fundraising of $1.6 million USD. ShapeShift is an exchange that allows users to transfer Bitcoin for dozens of other cryptocurrencies without any accounts or personal information being shared.

Barry Silbert’s Digital Currency Group and Roger Ver were the lead investors in this round. Bitfinex, Bitcoin Capital led by Max Keiser and Simon Dixon, Mardal Investments, Bruce Fenton, Trevor Koverko, and Michael Terpin also invested in the funding round.

“ShapeShift demonstrated an entirely new way to think about asset exchange,” said Zane Tackett, Director of Community and Product Development at Bitfinex, in a statement. “We’ve known Erik for a while now and he’s knocked it out of the park with this one.”

According to the company, the exchange has experienced 100x growth since its launch in August 2014. In July, it had over $2 million in USD-equivalent volume, which was a record for the company.

What makes ShapeShift unique is that exchanges are instantaneous and require no personal information. Further, ShapeShift doesn’t actually hold any of the currencies; it simply facilitates the trade from one coin to the other. At present, there are over 40 different digital currencies. This means that ShapeShift offers over 940 different trading pairs. That is greater than any single exchange on the market.

However, one type of currency cannot be traded. ShapeShift has a strict “no fiat” policy, which means that if a user wanted to buy bitcoin with US dollars, they’d be unable to. Instead, the user would have to first buy it from another company and then they could trade on the ShapeShift exchange.

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Back to the Future: Adam Back Remembers the Cypherpunk Revolution and the Origins of Bitcoin
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Bitcoin Knowledge Podcast host Trace Mayer interviewed legendary cryptographer Adam Back on his role in the creation and deployment of some of the most potent privacy software to ever affect the world of Bitcoin. A transcript of the podcast is published in We Use Coins.

Trace Mayer is an entrepreneur, investor, journalist, an expert on the Austrian School of economic thought of Murray Rothbard and Ludwig von Mises, and a staunch defender of freedom of speech.

Adam Back is the inventor of Hashcash, the proof-of-work system used by Bitcoin and other cryptocurrencies as part of the mining algorithm. “To implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proof-of-work system similar to Adam Back’s Hashcash,” wrote Satoshi Nakamoto in the original Bitcoin white paper.

Back is also one of the authors of the Bitcoin Sidechains white paper “Enabling Blockchain Innovations with Pegged Sidechains,” released in October, and one of the founders of Blockstream.

Blockstream, which in November closed a $21 million seed-funding round with nearly 40 high-profile investors, develops open-source software to implement sidechains and accelerate developments in the cryptocurrency space.

Blockstream recently announced Sidechain Elements, a sidechain development framework with open-source code and a developer sidechain for testing, featuring intriguing new possibilities such as confidential transactions. Blockstream also is working on lightning networks, a somewhat-related concept that shows great potential for Bitcoin scalability.

“We’re going to be having a full week with [Back] on the podcast discussing confidential transaction, sidechains and the lightning network along with some of his other innovations and thoughts on bitcoin and where it’s going,” Mayer announces at the end of the interview.

In fact, the conversation doesn’t go – yet – deep into ongoing technology development. Rather, it’s a recap of the history of cryptography and P2P technologies in the last couple of decades, and – especially – a thoughtful and passionate defense of the techno-libertarian ideas that are dear to both Mayer and Back. Today, with the original pro-privacy, anti-bureaucracy spirit of Bitcoin is threatened and cornered by governments, banks and sanitized “permissioned” blockchains, it’s refreshing to follow Mayer and Back – to the future.

Cryptography pioneers and “cypherpunks” such as Phil Zimmerman, David Chaum, Nick Szabo, Hal Finney, Wei Dai, Stefan Brands, and other affine spirits since the days of Alan Turing, wanted to make society better – by writing code. Phil Zimmerman’s PGP was one of the first cryptographic codes able to change society for the better.

“[PGP was] a way for you to have privacy or anonymity via email,” says Back. “So it’s a simple piece of technology, but they have this kind of mantra cypherpunks write code, which is to say, you know, you can go lobby all you want but what ultimately changes the game is deployment of technology.”

Back tells the story of Hashcash, PGP, David Chaum’s DigiCash and Stefan Brands’s electronic cash system, Bitcoin precursors such as Nick Szabo’s bit gold and Wei Dai’s B-Money, leading to Nakamoto’s Bitcoin white paper.

“So they were a number of people in the cypherpunks list who were talking about designs, and some of them were anonymous because it’s cypherpunks, and they developed the remailers so they were kind of practicing their own technology,” said Back. “So there was some kind of jovial or joking comments from anonymous people that are actually insightful, technical, cryptographic protocol comments from anonymous people.  And, of course, we don’t know who they were. Potentially some of them Satoshi, right?”

“Unless you are Satoshi,” says Mayer at that point.

“No comment on that,” replies Back. “Don’t like to speculate on who Satoshi might be.  I think it’s probably a good thing that Satoshi is anonymous because you know there’s a lot of political pressure that could land on somebody who is seen to somehow have control and all sorts of things.”

Toward the end of the podcast, Back mentions privacy-preserving cryptocurrencies and recent developments in cryptography that could be applied to new version of Bitcoin, including Zerocoin, Zerocash, and zero-knowledge Succinct Non-interactive ARguments of Knowledge (zk-SNARKs).

It’s interesting to speculate on the possibility to implement Zerocash as a sidechain interoperable with Bitcoin. Hopefully, Back will say more in the forthcoming podcasts.

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South Korean Law Enforcement to Launch Investigations on Altcoin Pump-and-Dump Schemes
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Chosun, the largest and most popular online news publisher in South Korea has reported that law enforcement is about to begin investigations on altcoin pump-and-dump and bitcoin Ponzi schemes.

The Bank of Korea will support local law enforcement and agencies with the investigation and will provide the necessary infrastructure and technology to search for scam bitcoin projects and programs.

The joint investigation will also focus on the trading of altcoins that have no value, or are suspected of being a pump-and-dump scheme.

“According to our sources, there are 676 altcoins, including bitcoin, listed on coinmarketcap.com. However, only 309 of them have a market cap of USD$10,000, and others are almost worth nothing. Furthermore, there are 550 altcoins that have extremely low daily trading volumes,” said the article.

The Bank of Korea and the local police already have started looking into several different altcoins that have been used over the last few months and are discussing with local enforcement whether to launch a full investigation on these altcoins and on the individuals or organizations that have been promoting the use and trading of altcoins that have recorded substantially low daily trading volumes over the past 48 hours.

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