On July 6, 2015, Bitcoin Magazine reported that the Factom Foundation had launched Release Candidate 1 (RC1), a crucial step for launching the Factom network. Over the ensuing 5 weeks, community developers and programmers have been testing and debugging the network in order to reach all the goals set out in Factom’s Milestone 1.
Today in a blog post, Factom has announced the launch of the Release Candidate 2 (RC2) version of the Factom Beta. Again, it is asking for developer input as it works toward its next milestone: Factom Genesis.
According to Factom’s post, RC2 includes the following:
Better Factom block syncing & downloading
Tested for high numbers of entries
Improved server to client messaging and error handling
Some limited code refactoring and reorganization
Once Milestone 1 is achieved, funding from the software sale will be released. At this point, holders of Factoids will be able to utilize their tokens on the network and to exchange them on Cryptsy and ShapeShift.
To celebrate the network’s progress, Factom will be hosting a launch party in Austin, Texas on Tuesday, September 1, featuring speeches from Peter Kirby and Paul Snow which will be broadcast to the community, along with a Q&A on Zapchain.
Earlier this year, Tatiana Moroz caught up with Tiana Laurence, chief marketing officer at Factom, to learn more about the project.
Having recently reached its seed-round fundraising goal of $1 million on Bnk to the Future, Factom Inc. has now launched a Release Candidate One (RC1), a critical step for launching the Factom network.
In a blog post on the Factom site, the company is calling on developers and interested participants to join their efforts to help test and debug the beta client in advance of making it available to the broader community. Beta will be released once the release candidate passes all necessary tests and meets all the requirements set out in Factom’s Milestone 1.
According to the blog, Factoids — the Factom currency used to purchase Entry Credits — will become tradable on Cryptsy and ShapeShift initially, with the release of the beta Factom client and the launch of the Factom network. More exchanges will be added down the line. Early contributors and purchasers of Factoids will have access to them once the genesis block has been created, which is part of beta.
Anyone interested in participating in testing the beta client can email Factom for more information or to be included on the developer Skype channel.
American credit-card company Visa has once again showed its interests for bitcoin at WIRED Money held in London.
Jonathan Vaux, executive director of new digital payments and strategy at Visa Europe, who attended the session on behalf of Visa announced: “The one thing I often get asked about is bitcoin. I do see … a separation between the currency and the technology that sits under it. From the point of view of currency, I think that’s interesting. As Visa, that’s what we do – we manage currencies.”
Vaux said Visa is deeply interested in the blockchain technology which stands as a backbone of bitcoin as a currency, and suggested that Visa could implement the technology to ease the settlement and transfer of payments.
“Ultimately, what we’re looking for is the technology and the component parts that we can bring into our platform and into our marketplace, that delivers a richer proposition,” Vaux said.
Like many other financial institutions and establishments, Visa is interested in identification, device fraud and digital receipting – which may be referred to as smart contracts on the blockchain and cloud-based technology to organize and settle online payments. Vaux explained that Visa will actively look into these areas for its customers and to enhance their operations.
Vaux added that Visa is interested in facilitating bitcoin as a currency.
“Like any other currency, although this might not be the best week to discuss it, at Visa we are very keen to facilitate that translation of currencies on a global basis,” he said.
Over the last few months, renowned global organizations and financial establishments have proposed designs, or at least have attempted to implement Bitcoin’s blockchain technology, to encrypt sensitive data or to settle transactions without the association of third-party institutions such as banks.
Continuing the global trend, the MIT Media Lab and two Bitcoin entrepreneurs have developed a prototype of an encryption system called Enigma. Enigma is a Bitcoin blockchain-based encryption system that enables untrusted and anonymous computers to share sensitive information with a third party without putting the data at risk of hacking attacks and breaches.
The system will be able to prevent shared information from being surveilled by government entities or law enforcement, as it can only be decrypted by the holder of the decryption keys.
“You can see it as a black box,” explained Guy Zyskind, one of the developers of Enigma and an MIT Media Lab graduate researcher. “You send whatever data you want, and it runs in the black box and only returns the result. The actual data is never revealed, neither to the outside nor to the computers running the computations inside.”
In a way, Enigma’s techniques and properties resemble a few features of Bitcoin’s decentralized network infrastructure. Enigma encrypts data by disassociating it into several components, and by randomly segregating it to hundreds of computers in the Enigma network, also known as nodes. Then, each node runs calculations on its assigned block of data, until a user merges the results to decrypt a block.
The mathematical algorithms are designed by the developers of Enigma, and the nodes execute calculations only on the blocks of data that it is assigned to.
The ownership of data, or chunks of information, is then stored as metadata in the Bitcoin blockchain, which prevents the ledger of ownership from being forged or altered.
“I can take my age, this one piece of data, and split it into pieces, and give it to 10 people,” says Zyskind. “If you ask each one of those persons, they have only a random chunk. Only by combining enough of those pieces can they decrypt the original data.”
What Enigma’s Encryption System Can Bring
If Enigma’s encryption system works out flawlessly like the developers promise, it would create a whole different ecosystem where private databases can be hosted without threats from third-party entities, such as governments or law enforcement trying to surveil the information.
While cloud databases and platforms such as Dropbox and even Facebook are obligated or often forced to pass on sensitive data at governments’ will, the same cannot be done for Enigma’s cloud services, because the data simply cannot be revealed without the decryption keys which only its owners hold and control.
Enigma would also allow users to safely share all kinds of information with companies without any risks of releasing sensitive data. “No one wants to give their data to some company when you don’t know what they‘ll do with it,” explained Oz Nathan, Enigma’s co-creator. “But if you have guaranteed privacy, data analysis can be a lot more powerful. People will actually be willing to share more.” Photo Security/Photopin
Financial technology company Anthem Vault today launched HayekGold (the ‘hayek’), a digital token that enables more people to own and spend gold. Each hayek represents 1 gram of gold stored in the secure, world-class vaulting facility in Salt Lake City, Utah, and will be purchased at the market value at the time of the transaction.
“We use the latest, most secure technology – the Bitcoin blockchain – that fuels hundreds of other crypto-related platforms,” said Anthem Vault founder and CEO Anthem Blanchard. “The hayek coalesces the most trusted store of value in history, gold, with the world’s most secure exchange network, Bitcoin. Gold is hardly volatile and can help create a more anchored currency and savings plan.”
Blanchard, a lifelong advocate of decentralized sound money, is the son of James U. Blanchard III, who helped restore Americans’ right to own gold bullion. The Hayek name leaves no doubts about Blanchard’s political leanings. “First of all, we love F. A. Hayek, one of the greatest contributors to the Austrian School of Economics,” states the HayekGold website. “He wrote a number of valuable books and articles about the free market, price theory, and more throughout the 20th century. Second, Anthem Vault’s CEO is named Anthem Hayek Blanchard. His parents loved F. A. Hayek’s work so much that they named their son after him!”
Anthem Vault’s initiative was previously referred to as HayekCoin. Anthem Vault decided to change the name to HayekGold to help clarify exactly what the crypto-asset is and how it works.
“When most people talk about cryptocoins, they are referring to a digital currency that can be mined (created) with a computer,” notes the HayekGold website. “HayekGold, however, does not involve any digital mining. Sure, the physical gold has to be mined in the traditional sense (by digging into the earth!), but the digital tokens can never be created out of thin air. They can only come into existence when real gold is deposited into Anthem Vault.”
Presumably, the company also wanted to avoid associations with “altcoins” of dubious reputation and trustworthiness. In fact, HayekGold runs on the Counterparty infrastructure, which is a layer on top of the Bitcoin network. That means that HayekGold is not an altcoin but a part of the Bitcoin ecosystem, and every transaction is recorded on and secured by the real Bitcoin blockchain.
Anthem Vault provides individuals with an efficient and liquid way to buy, own and sell physical, 100 percent fine gold and silver bullion. All metals are securely stored with an independent world-class vaulting facility in Salt Lake City, Utah and are insured for loss by theft or natural disaster. Anthem Vault’s offices and operations team are based in Las Vegas, Nevada. The company is incorporated as a Nevada corporation and regulated as a precious metals dealer by the U.S. Treasury.
Other gold companies are discovering Bitcoin. In May, BitGold, a Canadian corporation with offices in Toronto and Milan and a network of secure vaults for gold storage, announced the public launch of the BitGold platform, a software service that connects gold storage with payment networks, resulting in a banking-like platform for gold.
The Bitcoin Sidechains paper envisages an ecosystem of “sidechains” separate from the main Bitcoin blockchain but interoperable with it. A sidechain can carry bitcoin as currency, in which case users will be able to seamlessly transfer bitcoin between the sidechain and the main blockchain. At the same time, the sidechain can implement changes from Bitcoin Core. For example, a sidechain can implement more powerful scripting features or more watertight privacy.
“[A]t any point, whoever is holding these coins on the sidechain can send them back to the Bitcoin network by creating a special transaction on the sidechain that immobilizes the bitcoins on the sidechain,” explains Gendal Brown. “They’ll disappear from the sidechain and become available again on the Bitcoin network, under the control of whoever last owned them on the sidechain.”
In February, developers Joseph Poon and Thaddeus Dryja released a first draft version another much-discussed paper, proposing a decentralized Bitcoin Lightning Network where related transactions can take place instantly on “micropayment channels” off-chain, and only the final settlement is processed by the blockchain. According to the authors, lightning networks would enable bitcoin scalability, efficient micropayments, and near-instant transactions.
The implementation of lightning networks would also require appropriate tweaks to Bitcoin core. Some developers have noted that there is a certain degree of affinity between sidechains and lightning networks.
“Other approaches seek to modify Bitcoin protocols in various ways,” wrote Robert McGrath. “For example, Sidechains aim to create alternative blockchains hanging off the main blockchain, which would help limit the costs of the main blockchain. Another variant is the Lightning network, which aims to allow some transactions to be performed “on the side,” and on send the results to the main blockchain.”
Rusty Russel, an Australian developer known for his work on the Linux kernel, wrote a series of blog posts about interesting features of lightning networks. “The key revelation of the paper is that we can have a network of arbitrarily complicated transactions, such that they aren’t on the blockchain (and thus are fast, cheap and extremely scalable), but at every point are ready to be dropped onto the blockchain for resolution if there’s a problem,” he said. “This is genuinely revolutionary.”
Now it appears that the development efforts for sidechains and lightning networks are coming together. Russel, who joined Blockstream a few weeks ago, is working on lightning networks, and one of his first actions was to set up a Blockstream-hosted mailing list for “Discussion of the development of the Lightning Network, a caching layer for bitcoin.” The new mailing list archives are freely accessible.
“They hired me,” Russel said on Reddit. “We agreed I’d be working on developing lightning. I set up a mailing list and am developing a toy prototype to explore the ideas. Will put on github once that’s ready (two weeks?) but it’s a long long way from anything someone could use. I’m excited about lightning, but it’s a marathon, not a sprint.”
Jacob Dienelt is the latest Morgan Stanley veteran to leave Wall Street and join the Bitcoin industry. Following the likes of former JPMorgan Chase executive Blythe Masters and former JPMorgan Managing Director Paul Camp, Dienelt has made the move from traditional banking at Morgan Stanley Private Wealth Management to join the emerging digital currency industry as head treasurer of Factom .
Factom, a Bitcoin 2.0 company creating a notarized audit trail with blockchain technology, has hired Dienelt as part of its focus on bitcoin asset management for its software token sale. Dienelt brings his experience managing a Futures Specialists desk at Morgan Stanley’s New York office to the nascent Bitcoin industry. He graduated from Kenyon College in 2003 where he majored in Game Theory. After graduation, he worked at a private real estate asset management company performing REIT analysis.
On leaving his Wall Street job, Dienelt states, “After two years traveling to Bitcoin conferences, mining, and running a paper wallet company, I’m glad to have found a home in the space.
“Factom is the first non-financial application of the distributed ledger technology that will, over the next decade, change how people prove their data is authentic, and so much more. I spent almost ten years at Morgan Stanley, and I’ll miss my friends and clients dearly. I just couldn’t miss an opportunity to help shape such an important ecosystem as it develops. I’m very excited to be working with [founders] Paul, David, Peter, and the rest of the team.”
Factom has been featured recently for their series of partnerships involving Bitcoin price stability with Tether, documenting gold exchange trades with Serica, and providing notarized audit trails for the Internet of Things with Rivetz.
David Johnston, Chairman of the Factom Foundation, welcomed Dienelt to the team, saying, “As the world’s large companies and institutions begin adopting blockchain technology, it naturally follows that their top people will get involved in projects such as Factom in order to be leaders in that transition.”
Johnston is referring to the recent trend of Wall Street executives who have left to join Bitcoin companies despite the public skepticism Bitcoin has received from banking executives. Jamie Dimon, CEO of JPMorgan Chase, was quoted last March stating that ‘Bitcoin [is] a terrible store of value that could be replicated over and over.’
“The question isn’t whether we accept it,” Dimon said in a recent interview with CNBC. “The question is, do we even participate in people who facilitate Bitcoin?”
Unlike Bitcoin companies which are focused on Bitcoin’s use as a digital currency for payment solutions which Mr. Dimon is referring to, Factom is only using the technology of Bitcoin – namely the distributed ledger and consensus system that makes up the blockchain. Factom provides a distributed consensus and audit trail leveraging the Bitcoin blockchain. The company’s open source platform stores a compressed and encoded version of data into the immutable blockchain record as a hash. Factom recently began a crowdsale of tokens supporting the development of the platform and has raised over 1000 bitcoins to date. Upon close of the token sale at the end of the month, Dienelt will be taking the lead on managing the bitcoin received during the sale, bringing his wealth of knowledge and experience from Morgan Stanley to Bitcoin 2.0.
Editor’s note: In the interest of full disclosure, Lisa Cheng is an advisor to the Factom project and does not hold any financial stake in the company. She will be participating in the token sale and receiving Factoids.
IBM is considering adopting the blockchain technology behind Bitcoin to create a digital cash and payment system for major currencies, Reutersreports.
The rumor is attributed to “a person familiar with the matter.” So far, official media representatives at IBM and other possibly involved parties, such as the U.S. Federal Reserve, did not respond to Reuters emails about the story.
“It’s sort of a Bitcoin but without the bitcoin,” the unnamed source said. “These coins will be part of the money supply. It’s the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain. We are at a tipping point right now. It’s making a lot more sense for some type of digital cash in the system, that not only saves our government money, but also is a lot more convenient and secure for individuals to use.”
Unlike Bitcoin, where the network is decentralized and there is no overseer, IBMCoin would be controlled by central banks and linked to users’ bank accounts, using wallet software that integrates the banking system with IBMCoin. The unnamed source said that IBM has been talking with a number of central banks, including the Federal Reserve. If central banks approve the concept, IBM will build the secure and scalable infrastructure for the project.
IBM has been doing research on blockchain technology for some time – at CES 2015 it unveiled ADEPT, a system developed in partnership with Samsung that leverages elements of Bitcoin technology to coordinate a decentralized Internet of Things.
If the IBMCoin rumors are true, IBM has chosen the right moment to ride the wave of enthusiasm for Bitcoin fintech in the mainstream financial establishment. From the point of view of states and central banks, the value of Bitcoin lies in its ability to implement cheaper and faster transactions, permanently recorded in a distributed, tamper-proof public ledger.
“We don’t think of bitcoin as being a store of value or an alternative currency or an investment,” said former JP Morgan superstar Blythe Masters, now CEO of digital economy startup Digital Asset Holdings. “We think of it as a medium for exchange and a mechanism for recording information.”
Governments also are warming up to the digital economy, with rumors of “Fedcoin” in the United States and some kind of “Eurocoin” in Europe, especially in financially troubled economies such as Greece’s. In a recent research paper titled “One Bank Research Agenda,” the Bank of England said that Bitcoin could reshape the financial industry and called for further research to devise a system that could use distributed ledger technology without compromising a central bank’s ability to control its currency.
If IBM becomes the preferred partner of governments for next-generation fintech based on blockchain technology, the payoff might be huge. It’s worth noting again that this is not an official announcement, but an unconfirmed rumor.
Commenting on the Bank of England research paper, he recently noted that “[T]he identity of the issuer really matters. And this is where I think a central bank digital currency could make sense on a distributed ledger.”
Counterparty founders have joined with MathMoney f(x) and its founder Mark Smith as co-founders of the new fintech company Symbiont. Symbiont will focus on fostering the symbiotic relationship between traditional financial markets and cryptographic blockchain technology.
“Since we founded Counterparty over a year ago, our focus has consistently been on the creation and positioning of this technology as a solution for structural issues in the larger financial markets,” said Robby Dermody, co-founder of Counterparty and now President of Symbiont.
“Symbiont is the next step in achieving that goal,” Dermody said.
“We’re excited about the positive impacts blockchain adoption will have in the systems that power modern finance, and we look forward to seeing this technology put into use in a way that increases transparency, liquidity and the overall functioning of capital markets,” added Evan Wagner, co-founder of Counterparty and now Managing Director of Operations at Symbiont.
“I founded MathMoney f(x) (a SenaHill Partners portfolio company) to address the severe infrastructural problems associated with the emerging math-based currency trading ecosystem,” said Smith, CEO of Symbiont. “After studying the intricacies of [the blockchain] it became clear that blockchains in general, and Counterparty specifically, could solve long-standing, previously intractable problems that exist in modern financial markets. This epiphany made the decision to join forces with the Counterparty team a logical one.”
“Mark has over twenty years of experience in finance, and was one of the core people behind the creation of several large-scale trading platforms,” say the Counterparty founders on their website. “We’re all very excited about the potential positive impacts not only to Counterparty, but to the blockchain’s adoption in the systems that power modern finance.”
Symbiont will be using Counterparty and other blockchain-based technologies to solve specific, identified issues in several segments of the multi-trillion dollar securities market.
Symbiont’s technology platform will be based on Counterparty, but the Counterparty technology itself will remain open source. The Counterparty Foundation will remain unchanged, with both community and third-party industry voices being represented, and Counterparty co-founder Adam Krellenstein will continue to serve as chief scientist of the foundation besides his new role of Symbiont chief technology officer.
Counterparty made multiple headlines in 2014. Its technology was selected as the main software backbone for a new independent stock exchange operating in bitcoin and powered by Bitcoin technology.
The new stock exchange, developed by Overstock and codenamed Medici, could sidestep traditional stock exchanges such as NYSE and NASDAQ and issue corporate stock directly over the Internet.
It was later revealed, however, that the Medici project will include a wider variety of Bitcoin technologies, protocols and blockchains.
In November, Counterparty announced the implementation of Ethereum’s programming language on the Counterparty platform, enabling users to save and execute Turing Complete Ethereum code on the Bitcoin blockchain, without having to go through external blockchains and altcoins. In the near future, Symbiont’s team plans to upgrade Counterparty’s port of Ethereum, and make it ready for operational production.
The Counterparty software suite has matured rapidly with more than 180,000 Counterparty transactions made, often constituting a significant fraction of daily bitcoin transactions. In addition, there have been three comprehensive security audits performed on the codebase.
Symbiont already has raised significant interim funding, which will be followed by a formal Series A round investment of preferred stock.
Bitcoin’s “killer app” has long been a topic of speculation. What is the compelling use case that will cause millions to adopt bitcoin, knowingly or unknowingly? It just might be Abra.
Announced on the final day of Launch Festival 2015, Abra is a company that is looking to take a slice of the $550 billion global remittance market. With legacy companies such as Western Union charging 10 percent and more to remit money internationally, Abra offers the potential for instantaneous money transfers at a fraction of the cost.
At the event, CEO Bill Barhydt said: “Our mission with Abra is to turn every smartphone into a teller that processes withdrawals. This is not just another bitcoin app. The wallet is a full-fledged digital asset management system, and you don’t have to understand it.”
Use of the application is straightforward and relies on a network of people around the world who act as tellers, charging small fees to help people transfer money abroad. A user can deposit funds into his or her account using a debit card or by meeting up with a teller in person and handing them cash. Then those funds can be instantly — the power of Bitcoin — transferred anywhere in the world. The person receiving the money has only to find a teller, show that he or she is the recipient of the funds, and exchange the digital cash (denominated in USD) back for their local currency.
“The teller charges a fee. We take 50 basis points on either side. If the teller doesn’t charge a fee, we don’t charge a fee,” Barhydt explained at the event.
Further, there is no foreign-exchange risk. Once the money is in the account, it holds that value for the first three days guaranteed. This ensures that if someone wants to send $200, all $200 can get to the intended person.
The killer application
What gives it the potential title of “killer app” is the fact that Abra is powered by Bitcoin, but the user has no idea that Bitcoin is what is powering it.
It’s been said numerous times, but how the network works is less important to someone than whether it works. The average individual doesn’t want to know how the pipes work; they want to know that water is going to come out. The same is true for finance.
At the “Bitcoin and the Future of Payments Technology” Fireside Chat held at the Museum of American Finance back in February, the panel talked about how people don’t know how the Internet works, but know that if they hit “send” on an email, it’ll get to where it needs to go. No one knows about any of the protocols making that possible.
“Bitcoin will be the same way,” said Jeremy Allaire, CEO of Circle.
The average person using this application won’t need to know that it’s Bitcoin powering the backend either. All users need to know is that their money transferred in minutes and that the fees are significantly less than what they would pay using a service like Western Union.
