The invitation-only Satoshi Roundtable conference is set to convene for the second year in a row, this time at an undisclosed location in North America.
To be held from 26th to 28th February, the event[1] follows the inaugural edition of Satoshi Roundtable, which garnered criticism[2] at the time of announcement for an alleged lack of transparency and air of secrecy. Though it eventually opened its doors to limited media presence, this year’s event, by contrast, will be closed to the public.
Among the 60 attendees will be representatives from the mining and development sectors of the bitcoin industry, including MegaBigPower CEO Dave Carlson, KnC Miner CEO Sam Cole and developers representing both of the major scaling initiatives, Bitcoin Core[3] and Bitcoin Classic[4].
In interview, organizer and Bitcoin Foundation[5] executive director Bruce Fenton indicated that the event is to include “TED Talk”-like presentations, longer keynotes and speeches by individuals outside the bitcoin and blockchain community.
Notably, given the participants, Fenton said that the long-standing question of how the bitcoin network should be scaled[6] to increase transaction capacity would also be discussed by event participants.
Fenton said:
“The event was planned long before the most recent developments in [the] bitcoin discussion, but given the timing and attendees, block size will be an important agenda item.”
The attendee list also includes bitcoin startup CEOs such as BTCC[7]‘s Bobby Lee and Align Commerce[8]‘s Marwan Forzley, as well as representatives from Bain Capital Ventures and Fidelity Labs.
The US Department of Justice (DOJ) convened a first-of-its-kind conference on digital currency and the blockchain in San Francisco today.
According to the agency, the goal of the event was to unite the private and public sector in discussions centered on strategies for limiting cybercrime perpetrated with the emerging technologies.
The unpublicized event, organized by the DOJ’s Digital Currency Task Force and held at the Federal Reserve Bank in San Francisco, saw 175 industry participants engage in panel discussions that sought to emphasize its core theme from the point of view of entrepreneurs, law enforcement officials and regulators.
Though no participants were named in formal release, Twitter images from the event show speakers included Xapo[1] CEO Wences Casares, Coinbase[2] founder Fred Ehrsam and Ripple[3] CEO Chris Larsen, among others.
In remarks, US Attorney Brian J Stretch positioned the event as one that sought to forge a common ground between representatives of the government and the distributed financial technology sector:
“As emerging technologies such as digital currency and blockchains expand into new and legitimate applications, it becomes all the more critical for industry leaders and government agencies to share insights and perspectives in order to combat the illicit use of these technologies.”
Further addressing the need for dialogue was FinCEN Director Jennifer Shasky Calvery, who noted that despite her department’s early efforts to understand the industry, continued discussions are needed due to the evolving nature of the technology.
“We only opened the door for the hundreds of other questions beyond our anti-money laundering perspective,” Calvery said.
The event was previously hinted at by DOJ Digital Currency Crimes Coordinator Kathryn Haun in an interview with CoinDesk[4] in September in which she spoke at length about the multi-agency task force and its goals.
At the time, Haun sought to stress that the US government was broadly seeking to engage the digital currency and blockchain industry in discussions that would provide clarity on key issues for all ecosystem participants.
Following the first Block Chain Summit this April – a widely publicized affair held at Sir Richard Branson’s private Necker Island, lead event sponsor BitFury has organized a less talked about follow up in the United Arab Emirates.
Though information on the event is scarce, the event is currently ongoing, running from the 7th to 10th October in Abu Dhabi, the capital of the UAE.
According to posts[1] by attendees such as BitFury advisor and former US Department of Justice official Jason Weinstein[2], the summit will include “informal sessions and discussions” on blockchain technology and its potential global impact.
No further information can be found about the event online, though BitFury did confirm it was hosting unidentified “distinguished guests” for the occasion.
BitFury CEO Valery Vavilov said in a statement:
“The purpose is to continue educating global decision-makers on the power of blockchain technology.”
Vavilov suggested the event had already held talks on potential use cases for a public blockchain, how it could be used as a platform for the Internet of Things and whether it could be used to open up “new market opportunities”.
BitFury did not disclose further information about the conference, or the reason for the secrecy surrounding the event.
Company representatives were unable to point to resources where more information was available, and at press time, its public communications channels[3] were not promoting the event.
The conference comes on the heels of continued growth for the major bitcoin mining company, which recently announced it would invest $100m in a new 100MW data[4] center to be based in the European nation of Georgia.
Billed as a potential venue for debate on more heated issues surrounding the long-term viability of the bitcoin network, Scaling Bitcoin saw a who’s who of developers decamp to Montreal to talk about the underlying technical issues facing bitcoin yesterday.
Often reduced in conversation to mentions of its price or market cap, Scaling Bitcoin[1] succeeded at showcasing the breadth of challenges posed by bitcoin’s approach to incentivizing disparate parties to maintain a common and equally beneficial distributed resource.
Held in Montreal, day one of the much-anticipated event focused more on how incentivizes for network participants should be balanced and less on the positives and negatives of any of the competing proposals – whether Bitcoin Core, its alternative BIP proposals or Bitcoin XT[2].
The more vitriolic parts of the discussion were confined to afternoon workshops on topics including the level of trust and privacy the bitcoin network requires between users and how relations between miners and developers should be managed.
Held under Chatham House Rules[3], the discussions were transcribed, though no names were able to be assigned to the content. Nonetheless, some of the more direct statements to the significance of bitcoin’s challenges were made during the presentations on these roundtables.
There, one prominent academic appealed to the overall spirit of the event, stating:
“In bitcoin, technical decisions actually have real economic consequences. Science compels us to hold these conversations to a higher standard, but those technical decisions should be made by actual measurements and not appeals to emotion.”
Others spoke to the value of the day’s denser, earlier topics including the need for a greater knowledge of how often inefficiencies in the mining network[4] – such as orphan blocks[5] not ultimately included in the chain – are produced, and the communications delays that result in miners in different locations globally receiving delayed information about the network state.
Elsewhere, the need for continued communication among stakeholders at events such as Scaling Bitcoin was addressed.
“It’s not just about changing the blocksize,” a participant said. “It’s about proving that when critical issues arise we can resolve them.”
Bitcoin-NG debuts
Perhaps the most newsworthy event of the day came during the “Testing, Simulation and Modeling” section of the day’s content when Cornell computer science post-grad Ittay Eyal[6] presented Bitcoin-NG, a new proposed solution to scaling the bitcoin network.
Developed by Adem Efe Gencer, Emin Gün Sirer[7] and Robbert Van Renesse, Bitcoin-NG seeks lower latency, higher throughput and better security on the bitcoin network by proposing changes to the bitcoin mining process.
The proposal recommends breaking up the process by which miners are provided both a reward for finding a “nonce”, the arbitrary number that decides who wins the 25 BTC[8] reward distributed every 10 minutes, and the process by which those winning miners determine the transactions added to the blockchain.
Bitcoin-NG would create two types of blocks: key blocks, which contain no content but elect a “leader”; and microblocks, which would contain only transaction content.
“Only the leader can generate the private blocks,” Eyal explained. “The interval between the key blocks would be 10 minutes, while ‘microblocks’ come in every 10 seconds.”
Under the system, keyblocks would be given the rewards from the mining block, while 40% of fees would go back to the leader and 60% to those who submit microblocks.
The proposal is still in its early stages and no white paper has yet been released.
Economics and incentives
The economics and incentivizes portion of the day saw three talks by BitTorrent creator Bram Cohen[9], physicist and entrepreneur Peter R and researcher Miles Carlsten.
All three talks focused on how miners – the parties on the bitcoin network that process transactions – should be compensated, and how the larger network can expect these parties to behave when as existing incentivize structure may alter, whether that’s as expected under the current bitcoin design or under an alternative proposal.
Cohen’s talk, entitled “How Wallets Can Handle Real Transaction Fees”, focused on exploring how the bitcoin network might be shaped should the number of transactions sent to miners routinely passes the 1MB cap for information included in new blocks.
Overall, Cohen was supportive of the idea that the community allows the cap to remain at 1MB on the basis that this would help ascertain whether fees could one day replace block rewards.
“If we hit blocksize limit and get real transaction fees, the idea is you should have a market where some transactions never happen because they don’t pay the fee and you get an equilibrium price. We don’t know what fees should be until we run the experiment and see what prices end up happening.”
Cohen advocated for upgrades to bitcoin wallets that would allow users to more flexibly interact with the bitcoin network by setting minimum and maximum fees and a length of time before the transaction would be canceled should the fee be too low to incentivize its inclusion in a block.
Finding a free market
Another interesting take on issues surrounding the network came during Peter R’s talk on how the economics of the bitcoin network could be expected to work should the community decide to remove a blocksize limit, essentially restoring the network back to its state before the cap was introduced as a way to combat spam.
“Most people think miners find the nonce,” Peter R said. “Miners have another job as well, they produce a new type of digital commodity called block space, or ‘room for transaction data.'”
From there, Peter R delved into the economics of supply and demand, suggesting that the market could be expected to a find an equilibrium even without a cap on block size.
“Economists struggled with this problem, too,” he said. “They postulated a new law called the law of supply. It says producers will only plant more apple trees if they make more money for doing so. Supply and demand intersect at free-market equilibrium. Even though demand can be considered infinite, we still get finite amount of production.”
With this as a backdrop, Peter R ended by calling the blocksize a “political measure” that no longer had a clear benefit for the network other than reducing potential productivity.
He ended the session by announcing the forthcoming launch of Ledger, a peer reviewed bitcoin journal that will seek to highlight the best white papers and research produced by the technology’s enthusiasts.
Part-time miners
The imbalances that could be created by poorly aligned incentives in the network were touched on most directly by Miles Carlsten, who presented research conducted jointly with fellow Harry Kalodner and Arvind Narayanan.
Carlsten discussed the non-network-related issues those who process transactions on the network face, including the cost of electricity and hardware. He evoked the idea of a gap that will occur as miners begin to selectively contribute to the network at times when the expected reward outweighs the cost.
“This issue is made worse by the fact that hardware is becoming commoditized, which increases vulnerability to attack,” he said. “With the majority of miners mining at some gap, if attackers start mining right away, what fraction of the hashrate do they need to perform 51% attack? The fraction of hashpower quickly drops from 50%. This is a real threat to the security of bitcoin, as blocks must be immediately profitable to mine.”
Most notable was Carlsten’s contention that these issues could occur as quickly as in 2016 when the reward the network produces every 10 minutes will decline from 25 BTC to 12.5 BTC.
“We think a gap will be profitable at next block halving,” he said.
Anthropology of open source
Rounding out the day’s session was a talk by activist and author Gabriella Coleman, who provided an overview of how open-source groups have historically responded to governance challenges.
Coleman’s work includes studies on universal operating system Debian[10] and hacktivist group Anonymous.
“I was surprised to hear this was one of the first meetings where developers have come together,” she told the crowd. “It’s pretty rare to have an open-source community that doesn’t meet. Those that don’t meet often crumble and fall away.”
Coleman suggested that, based on historical precedent, bitcoin is unlikely to function on a governance model in which a “benevolent dictator” can sufficiently oversee the project.
“Benevolent dictators can work if there’s a founder, but usually that style of governance is matched with other types of governance,” she said, adding:
“Something like bitcoin where there is this mythical character, you don’t have that kind of person.”
Presentations from the day’s event can be found in both written[11] and video[12] form.
Day one of the CoinDesk Consensus 2015 Makeathon brought together more than 60 developers, industry experts and students with the goal of developing new solutions using blockchain tech.
Held at New York-based co-working space General Assembly and sponsored[1] by Braintree[2], Chain[3], Coinbase[4] and KeepKey, the two-day event involves 16 teams competing to win $5,000[5] in cash or a digital currency of their choosing.
The teams are focused on solutions for financial inclusion or financial infrastructure, with interesting early solutions emerging. At the end of the morning’s brainstorming session, teams had already committed to work projects as diverse as an open accounting protocol and microlending solutions for rural communities.
As explained by Citi senior vice president Ian Lee, the makeathon intends to explore areas of the technology that haven’t yet been developed by startups.
Lee said:
“A lot of startups have focused on remittances but there have been more than a dozen trying to do it, but there’s services – credit, lending – in emerging markets that have yet to be explored.”
“We’re hoping people will come up with creative and new ideas beyond kidt core payments and settlement,” he added.
Elsewhere, makeathon mentors were on hand to help teams move their ideas from concepts to prototype stage for presentation at tomorrow’s final day. Mentors including Skuchain CEO Srinivasan Sriram and Bitspark[6] COO Maxine Ryan suggested that their goal was to expose teams to their respective APIs and solutions, while also helping them move past the challenges that can crop up during the process.
“One of the biggest things that people have asked me is ‘How does [the technology] work?'” Ryan told CoinDesk. “But, they’re also looking at how you can build a product for someone in the third world or an emerging market.”
Final presentations will be judged on the relative newness of the idea, how impactful the solution could be and whether the idea necessitates the use of a blockchain, among other factors.
Teams will follow the venture design program developed by makeathon partner IDEO Futures[7], which aims to encourage participants to think of the business model and brand that could emerge from their prototype.
“We believe in thinking about ventures from the get go,” IDEO portfolio director and business designer Matt Weiss told attendees. “You should be thinking about the organizational structure and brand at the center, as well as who you’re designing it for.”
Though the verdict is still out on the proposed ideas, day one of the event was able to bring together a diverse set of participants.
Startup founders
One notable contingent at the event were founders of early-stage projects in the bitcoin space.
Pierre Gerard, founder of blockchain-based compliance management startup ScoreChain[8], for example, said he chose to attend the makeathon to share ideas and learn from professionals with diverse backgrounds.
“Bitcoin needs to reach out to people who don’t know much about bitcoin, so it’s great to connect with people outside the bitcoin ecosystem,” Gerard told CoinDesk.
Mario Salazar, founder of blockchain-based resource management network Akiles Coin[9], was another startup veteran seeking to extend his expertise, though his intent in attending was more focused on highlighting his personal and professional passions.
“My area of expertise the financial situation in Puerto Rico, nobody is bringing anything and I want to be the first one to bring this to the table. It’s cool that I was able to bring my concept and now I’ve got coders working on it,” Salazar said.
For the makeathon, Gerard’s team is working on a peer-to-peer (P2P) credit scoring system, while Salazar’s is more focused on resource management.
Students and graduates
Some of the more tech-focused participants at the event were students seeking to explore the technology as a means to improve their skills for potential employers.
Charles Crain, a recent University of California Santa Barbara graduate, has recently been attending hackathons to explore how his experience in building applications could be applied to projects such as bitcoin and decentralized application platform Ethereum[10].
“I took a distributed systems class in college and I learned about this idea of the blockchain as this huge consensus network, I was like, ‘Whoa this is crazy. How did someone come up with this?'” Crain recalled.
Deepak Atal, a New York University computer science major, however, was new to the hackathon circuit, this being the first time he’s attended such an event.
“I wanted to explore the field of bitcoin and wanted to start here in a place to know about these things to meet experts,” he said, adding that his team is seeking to apply blockchain solutions to the mortgage industry.
One of the more passionate attendees was Vermont Law School’s Melissa Kent who is seeking to understand applications of blockchain technology in the legal field.
“I know that there is a lot of different types of confidentiality issues that can be solved by using the blockchain,” she said. “For instance, I can have a PGP key and communicate privately with my client and encrypt that and use the blockchain to help me keep all that information private.”
Kent’s team is now working directly on these concepts.
Financial professionals
Equally present at the event were members of traditional financial institutions including Citi and the Commonwealth Bank of Australia.
Thulasi Janardhanan, an associate at Citi’s Portfolio Risk Management division, came to the makeathon to “see what people are talking about” in regards to the new technology.
“If you bring a group of people together, I would think they can come up with brilliant solutions,” Janardhanan said, adding that makeathon environments can offer an alternative from the siloed structure of traditional banks.
Members of the bitcoin industry were also present, with some like Tembusu[11] chief cryptographer Pavel Kravchenko and developer Oscar Guindzberg, coming from as far away as Ukraine and Argentina to attend.
Consensus 2015 is working with MIT Media Lab’s Digital Currency Initiative to boost diversity in the cryptocurrency space by offering 50 Consensus Scholarships to young women and people of colour.
A recent CoinDesk study of bitcoin users[1] highlighted the lack of diversity in the digital currency space, with fewer than one in 10 bitcoin owners (8.2%) stating they were female, and over 72% describing their ethnicity as “white”.
Consensus Scholars will attend the digital currency summit[7] on 10th September in New York City and a mentorship session with leaders in the industry. Mentors will be drawn from the high-level technologists, financial executives, public-sector officials, global aid workers and entrepreneurs speaking at the event.
“Our hope is to expose more young people, from a diverse set of backgrounds to the powerful potential of digital currency. The Consensus Scholarships will allow young people to ask questions, gain unique insights and meet with leaders in the digital currency movement,” said Brian Forde, director of the Media Lab’s DCI.
American Banker’s second annual digital currencies conference was also its first to put an equal emphasis on the emerging opportunities posed by bitcoin’s distributed ledger, the blockchain.
The idea that conversation around the technology has altered drastically in the last year was first noted by American Banker editor in chief Marc Hochstein in the event’s opening address. The talk proved forward-thinking in its praise for the promise of more expansive and experimental use cases for the blockchain while acknowledging that bitcoin, as its first application, had kickstarted a new wave of innovation.
“I’m not going to opine on the price, I’m going to talk about bitcoin, because the idea of it has made me a better editor at American Banker,” Hochstein said. “Bitcoin has cast everything that came before it in a new light.”
This tug-of-war between ideologies shaping the technology’s development was on display most prominently in the event’s early offerings, including a solo speaking slot by Eris Industries co-founder Preston Byrne and a panel featuring Symbiont’s Adam Krellenstein, Digital Currency Group CEO Barry Silbert and author Tim Swanson.
The most interesting talks centered around the still evolving question of whether private blockchains pose a threat to public ledgers like bitcoin, or if they are simply another evolution of the technology specialized for more specific use cases. Still, most panels sought to showcase the technology’s place in conversation surrounding larger concepts affecting the financial industry, such as digital identity, data security regulation and recordkeeping.
Representing incumbent banks in this conversation was BNY Mellon[1] managing director Cheryl Gurz, who spoke on a panel meant to highlight future use cases for blockchains. Gurz shed light on the difficulty of mediating a conversation between enthusiastic technologists and sometimes critical economists while trying to uncover whether the technology can offer solutions.
Gruz said:
“We shouldn’t just be listening, we should be challenging. We should be in the conversations with the regulators. So much is being assumed that we’re going to do, so much is driven by others.”
Still prominent was conversation about bitcoin as a currency and its price against the dollar, though some panels and speakers touched on its potential use case in areas where financial services have yet to permeate.
Masters takes the stage
Perhaps the day’s most anticipated session was the opening keynote by Digital Asset Holdings CEO Blythe Masters[2], the former JP Morgan executive.
Masters began her talk by addressing the opportunity she saw in distributed ledger technology as well as the personal journey that led her to get involved in its development.
While she said not every “cool technology” could be a catalyst for change and that real barriers toward wider adoption would prohibit short-term adoption, Masters was effusive in voicing her belief that the blockchain and distributed ledgers pose a significant opportunity.
Masters said:
“It should be fairly obvious that the addressable market for this technology is absolutely gigantic. We’re talking markets that are measured in the trillions, not the billions. However, there are real frictions that exist, like the cash that we use is fiat cash and resides in bank accounts and not on digital ledgers.
Echoing comments raised in a recent article penned by executives at technology consulting firm Accenture, Masters also went on to note some of the more specific questions that she feels need to be addressed, such as how the industry should move toward standardization and deal with property titling issues.
Overall, Masters seemed keen to present a unifying message to the audience, suggesting that the best course of action for the industry is to work to understand the issues faced in the traditional financial industry.
“We need to be communicating with the existing legacy of financial infrastructure. It’s important that we’re respectful of that existing infrastructure, it works today and it has to work,” she said.
Elsewhere, Masters addressed questions from the crowd, with one attendee posing a hypothetical situation designed to test the limits of permissioned or private ledgers. In this case, Masters was asked how a Venezuelan bank might interact with a permissioned ledger.
In response, she issued one of her first public comments on the bitcoin blockchain as a subset of the larger innovation, stating:
“I’m not making claims that the bitcoin blockchain has no useful purpose.”
Separating bitcoin from blockchain
This friction surrounding the idea that certain parties in the industry are attempting to separate bitcoin’s speculative currency from its digital ledger again created sparks in the panel including Krellenstein; Silbert; Swanson; and New York Law School’s Houman Shadab.
It was perhaps Swanson and Silbert that served as the polar opposites around which the conversation pivoted, with Silbert emphasizing the expected high future price of bitcoin and Swanson revisiting his published work critiquing the cost efficiency of the bitcoin network when compared to tokenless blockchains.
“If you’re doing a public network, maybe the only way to do that is a token. But if you’re working with known entities on a private network, you can have contractual obligations to secure this network,” Swanson explained.
He went on to relay an anecdote in which he suggested a bank had asked him whether it would be liable if it was involved in a transaction where the validating miner was perhaps operating in a country sanctioned under US law. Swanson suggested that, with the bitcoin network, answers to questions like this still remain too unclear.
Silbert took the opposite approach attempting to galvanize audience interest in bitcoin by appealing to the speculative value associated with its tokens. His remarks suggested he sees a potential outcome where bitcoin is propelled past alternative blockchains as the use of its network could create new wealth for users.
“You didn’t buy bitcoin because you were trying solve issues with loans, you bought it out of greedy speculation,” Silbert said. “You have a financial incentive to see bitcoin succeed.”
In the midst of these disparate voices was Shadab, who successfully translated the debate into a moderate stance. Shadab argued that blockchains should be seen as transaction platforms that can be designed to offer certain advantages and disadvantages.
Shadab was also agnostic in his view on the bitcoin network, adding:
“These problems can be solved, but there are technological issues that you all will need to deal with it. Is it a token-based blockchain or a permissioned blockchain? As bitcoin grows in size and as transactions grow over time, some of the benefits of bitcoin, low-to-marginal transaction fees, may disappear over time. So there’s trust tradeoffs.”
Elsewhere, Swanson raised eyebrows with his typically confrontational approach to the panel session, suggesting that industry firm ShapeShift was perhaps providing a “money laundering service” due to its approach to regulation.
The blockchain as software
Perhaps best known for its colorful public messaging, distributed ledger startup Eris Industries made a splash with a confident presentation by co-founder Preston Byrne.
Byrne offered what may be some of the first public details on the project, revealing it intends to focus on smart contracts that use code to move and manage digital assets on a blockchain, thereby eliminating the need for a token.
Byrne claimed Eris is already working with “several tier-one banks”, all of whom he says are interested in its centralized approach to the technology. “Decentralization doesn’t work within existing legal paradigms. It causes more commercial problems than it solves,” he argued.
Instead, Byrne sought to assert that the true innovation behind bitcoin was that it had created new database efficiencies, effectively merging a database with its log. “Bitcoin is a very successful piece of software, but it’s just software,” he said.
Byrne also gave insight into the trajectory of the company, which he said built a decentralized Reddit and YouTube in 2014 to prove the data processing capabilities of blockchains.
Still, he stressed that centralized alternatives to public blockchains like bitcoin could possibly be faster today while solving problems for enterprise clients.
“There are no network effects for a database, you’re serving a market,” he said. “Blockchain technology is better now than it was six years ago. You can get confirmations in a block in two seconds. They work in private segments, not necessarily decentralized ones.”
Nasdaq
The clearest insight into the evolving debate over the technology’s development was perhaps provided by the day’s final panel, which focused on its impact in financial markets.
Dominick Paniscotti, associate vice president of enterprise architecture at Nasdaq, provided the session’s highlights, discussing how bitcoin only “scratched the surface” of the potential of bitcoin as a technology.
He told the crowd:
“You start off with this, ‘Oh it’s a digital currency, should we put up a bitcoin exchange? Could we trade spot bitcoin? We can set up an exchange any time we want to trade bitcoin, the power is to identify this person. I can identify that I sent something to someone and then everyone can look at it and say yeah that occurred.”
Paniscotti went on to suggest he sees bitcoin as being one of a number of competing blockchains, ones that are better optimized for other needs.
Symbiont co-founder Mark Smith and Digital Asset Holdings CMO Dan O’Prey also provided insight in the difficulty of delivering technology to institutions such as Nasdaq, speaking about the “long sales cycle” and lack of education that is holding back efforts.
“When you’re walking into the door and explaining what is bitcoin, you have maybe a year, a year and half sales cycle,” moderator Brendan O’Connor, CEO of Genesis Global Trading, said. “When you walk in there and you’re talking about utilizing bitcoin with this wallet provider, and you start having these kinds of questions, you know they’re giving it more serious thought.”
Smith went on to talk about how the emphasis on the blockchain as a technology had opened more doors to enterprise institutions, concluding:
Multinational technology firm IBM is among the sponsors of a forthcoming India-based hackathon set to focus on bitcoin, the blockchain and FinTech.
Called HackCoin, the two-day event is scheduled for 1st and 2nd August at the Bombay Stock Exchange (BSE[1]). Presented by Zone Startups[2] and local bitcoin advocacy firm Bitstreet[3], the event will engage participants on themes including Big Data, payments and the digital experience.
The aim, according to event press materials, is to introduce more developers to the bitcoin and wider blockchain ecosystem, as well as the available APIs from major providers.
Bitstreet founder Raunaq Vaisoha explained that HackCoin’s choice of venue proved key to its ability to attract sponsors. Notably, Zone Startups is formally affiliated with the BSE Institute, a subsidiary of the parent stock exchange.
Vaisoha told CoinDesk:
“When planning the event in India, I managed to secure the Bombay Stock Exchange as a venue, this detail along with the value add of bringing together the much demanded blockchain community generated enough buzz to attract the sponsors.”
HackCoin is seeking participants well-versed in PHP, Python and SHA, as well as more general skill sets such as HTML and entrepreneurship. Prizes will include a variety of gift packages, as well as pitch opportunities for the event’s most compelling projects.
IBM has previously explored[4] blockchain technologies as part of its Internet of Things (IoT) program. First revealed in January, ADEPT leveraged smart contracts provided by Ethereum and the bitcoin blockchain to envision systems by which smart appliances might be able to be more efficient.
Additional sponsors for the event include India-based bitcoin wallet provider Zebpay[5] and digital payments specialist Citrus[6].
New York-based bitcoin exchange itBit is set to host a private gathering of financial industry professionals on Monday, 27th July.
The all-day, invite-only “Bankchain Discovery Summit” will be held at one of the city’s Convene locations, a meeting space provider operating in both New York and Washington, DC.
Expected attendees are said to draw largely from major banks, brokerages and exchanges.
An invitation obtained by CoinDesk reads:
“Join us for the inaugural itBit Bankchain Discovery Summit. Interact with industry peers, hear from our panel of experts and address topical blockchain use cases that will shape the future of the financial services industry.”
Little is known about itBit’s Bankchain[1] project, which is described as “the first consensus-based ledger system exclusively for financial institutions” on its official website. The company declined to offer specifics on the initiative when previously reached but suggested it would make details public in the near future.
The event is not open to the press, according to an itBit representative.
Despite a decline of approximately 40% in bitcoin purchases, Connie Chung, senior payments product manager at Expedia, says the option to pay with the digital currency will remain as long as there is a demand for it.
In interview with CoinDesk, Chung, who helped launch bitcoin payments for Expedia’s US website last year[1], says the decision to accept payments in the cryptocurrency was also a response to demand, and that this is perhaps the most important factor in its selection of payment methods.
It was not, she added, about Expedia making a statement or taking a stance on digital currencies.
She told CoinDesk:
“We accept bitcoin as a way of just allowing customers to pay with whatever method they want to pay. For us, bitcoin is on an even playing field with the other payment types we offer.”
Consumer adoption
Chung noted other merchants had been more affected by what she called a recent decline in bitcoin payments – with some reporting a decrease of up to 90% at various industry events.
For Chung, the general drop in payments can be correlated with bitcoin’s declining price, a reasoning that appears in line with the current narrative about declining interest[2] in bitcoin as an e-commerce tool among major merchants.
To put this into context, according to CoinDesk’s BPI, bitcoin’s price stood slightly over the $600 mark at the time of Expedia’s integration in June 2014. Since then, the digital currency has seen a somewhat dramatic – and widely reported – price drop, hovering mostly around $200 since the beginning of this year. [3][4]
CoinDesk’s recent State of Bitcoin report[5] found that the number of new bitcoin-accepting merchants continued to increase in the second quarter of 2015 but that this growth was below levels seen in previous quarters.
According to the report, the fundamental challenge facing bitcoin as a medium of exchange of legal goods continues to be low consumer adoption and a lack of advantages over credit and debit cards.
However, more niche use cases – such as in international e-commerce – continue to remain of interest[6] to merchants in the e-commerce space.
Industry nuances
Expedia’s bitcoin payments offer – only available for hotel reservations – is restricted by the nuances of the company’s role in the travel industry, said Chung.
“We accept bitcoin on hotels only where we are a merchant of record. So for some of the hotels that we sell we are the merchant, meaning that you, as a customer are the one paying on our site directly when you are trying to book,” she continued.
In these cases, Chung noted, it was possible to offer the bitcoin payment option to consumers because the payment was made directly to Expedia. For ‘pay-later’ hotels – where guests are expected to settle their bill at the venue – that’s a different story.
“Obviously at that point you are restricted to whatever the hotel can take. So if you try to pay with credit card we’ll still take it as a deposit if you are a no-show, but in those cases we would not be able to offer bitcoin because the hotel is the one that’s actually charging you.”
Here she suggested that the lack of overall understanding regarding bitcoin was again an inhibiting factor. “If we give them a bitcoin payment, they don’t know what to do with it, it’s not a currency they understand.”
In terms of airline ticket purchases, Chung explained that Expedia acts as an agency, passing on payment information to the majority of airliners. Similarly to ‘pay-later’ hotels, in these cases, Expedia can only accept the payment types accepted by the airline.
Is this a problem native to the payments industry? Chung doesn’t think so. It is, she said, a problem in the way that the suppliers are set up in the payments sector.
Frictionless payments
Aside from noting the growing interest in mobile payments, Chung placed special emphasis on frictionless payment methods.
“We are going to get higher and higher uptake with whatever there is less friction in payments, people are going to move that way.”
Citing car-ride sharing service Uber[7] – which has no checkout – and PayPal’s One Touch service[8] – which eradicates the need for the user to login every time they wish to make a payment – as examples, Chung noted how consumers are looking for easier options.
Although Chung said the payments space is already moving in the direction of frictionless payments, she suggested that security concerns could potentially hamper this progress. “I think the payments space sometimes, you know, people are really afraid of security lapses.”
As for how bitcoin as a technology could grow to become a larger part of Expedia’s operations, Chung was less specific in her responses, saying:
“We are always actively looking at all different types of payment related implementations that we might have but [there’s] nothing specifically in the works that I could report right now.”
Image via Connie Chung
Connie Chung is speaking at Consensus 2015[9] in New York. Join her at the TimesCenter on 10th September. A list of the event speakers[10] can be found here.
