Crypto Currency Definitions Make it into OxfordDictionaries.com

Over the past few years, the use of crypto currency such as bitcoin has rocketed. Once exclusive to gaming, this currency is now accepted by a number of retailers and the use of crypto currency is set to continue increasing over the next few years.

An indication that crypto currency is becoming more mainstream is the fact that it is now being included in the online Oxford Dictionary. It has been revealed that OxfordDictionaries.com, which is part of the Oxford University Press, has added a number of definitions related to this type of currency. The additions were revealed in a blog post.

One of the newly added crypto currency definitions to be added is for the term ‘blockchain’. This term has been defined by OxfordDictionaries.com as ‘A digital ledger in which transactions made in bitcoin or another crypto currency are recorded chronologically and publicly’.

Another new definition that has been added to OxfordDictionaries.com relates to bitcoin mining. The term ‘miner’ has been defined by the online dictionary as ‘A person who obtains units of a crypto currency by running computer processes to solve specific mathematical problems’. A similar definition has been added for the term ‘mine’.

The actual term ‘bitcoin’ was added to the online dictionary a couple of years ago but since then the use and popularity of bitcoin and other crypto currencies has continued to increase. As time goes on, it is likely that more and more terms relating to this type of currency will be defined and added to OxfordDictionaries.com, which the publisher states is focused on ‘current language and practical usage’.


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CoinWallet, a bitcoin mining service based in the UK, has announced that in early September it will be carrying out a stress test of the bitcoin network that could potentially create a 30 day transaction backlog and would make most of the regular software wallets completely worthless.

Although no exact date has been given yet for the beginning of the stress test CoinWallet has indicated that it will take place at some point in the early part of September.

A similar test of the bitcoin blockchain has already been carried out by CoinWallet where it divided a number of bitcoins into minute amounts of 0.00001 BTC all sent to individual bitcoin addresses. The latest stress test, however, will take 150 bitcoins that are spread over many different wallets and reconsolidated them back into a single wallet.

In one of the example transactions that CoinWallet used to demonstrate how the upcoming stress test will work it explained “As you can see from the transaction, there are 20 tiny inputs, with half going to miner fees, and half going to one of my CoinWallet addresses. This transaction is approximately 3kb, or 1/323rd of a block. In other words, for every ~323 of these I send, I fill up a block. Each of these transactions is for a total amount of 0.0002 BTC (including miner fees), meaning that with my 150 btc that is currently in this state, I will be crafting 750000 transactions, or 2321 blocks, or a 16 day backlog.”

A total of 20 servers that are hosted in the cloud will then be used in the second phase of its stress test in which it will send 0.00001 transactions each of which are 3kb in size to thousands of its various bitcoin addresses.

In relation to the second phase of the test CoinWallet advised “These 20 servers push approximately 1 transaction per second. The plan is to fill them up to 50-100 Bitcoin in total. In theory, if all things go as planned, we will create a nearly 30-day backlog. Of course, this won’t cripple Bitcoin entirely. Those who are smart enough to increase their fees will still manage to push transactions through. However, it will make it prohibitively expensive, and will likely render most standard wallet software, ranging from Multibit, to Mycellium, Blockchain.info and others completely worthless.

It went on to add “I should however note that CoinWallet.eu is relatively immune to this form of ‘attack’ as our fees are dynamic and are set at 3x the standard limit. As always, CoinWallet clients will be unaffected by the test. More details will be posted publicly when the test is imminent.”

Previous plans to create a 200MB backlog in the blockchain only reach about 15% of the intended output after the CoinWallet server crashed and the test had to be stopped prematurely.

According to CoinWallet the main purpose of carrying out these stress tests on the bitcoin blockchain is to show the weaknesses in the current software and to push the core developers into forking the current bitcoin into the new Bitcoin XT currency.

CoinWallet believes that it is ridiculous that fork into the new Bitcoin XT version of the currency, which will increase the size of each transaction block from 1MB to 8MB and allow for the growing demand for the bitcoin currency.

That said, the move to the new bitcoin XT currency has been met with serious opposition from both the development community and a large number of Chinese bitcoin mining groups who unless swayed could lead to this new currency being worthless.

Over recent years, digital currencies such as bitcoin have become increasingly popular in mainstream circles, with more and more people using cryptocurrency for a variety of transactions. However, despite this, only one bank has stepped up and accepted the rocketing growth in its use. Fidor Bank in Germany in the only mainstream bank that has been brave enough to take steps to keep up with the popularity of this type of currency, and has now partnered with bitcoin.de, the German bitcoin exchange, to provide a service known as ‘bitcoin express’.

As the CEO of Fidor Bank, Matthias Kroner, stated, this type of currency has become part of a global digital lifestyle. With our increasingly shift into the digital era, the growth in digital currency has always been inevitable and this is something that Fidor Bank has readily accepted. The Bitcoin Express service is an instant one that will even provide 100,000 euro deposit insurance on transactions.

In an interview, Kroner stated: “When we approach an issue we ask ourselves, ‘why can’t this be done any better’, or ‘is that really the final solution’, or if there is a segment like the crypto issue, ‘why is this not being executed by a normal bank? We simply think that everything which is coming along with crypto or even bigger with the blockchain is a more or less a natural part of the digital environment or the digital lifestyle.”

While many people are keen for regulators to allow mainstream banks to hold bitcoin, this is something that could still be a very long way off according to Kroner. He said that due to the volatile nature of cryptocurrency regulators were nervous when it came to sustainability.

With the German bank having taken the first steps amongst the mainstream banking industry when it comes to bitcoin, it may just be a matter of time before other banks follow suit.

The filing of a provisional patent for an electronic cryptocurrency management system was recently announced by the Connecticut-based technology company NXT-ID Inc, which specialises in biometric technologies. The company will also be looking to launch a new smart wallet having gained the public funding it required following a recent public offering.

The idea behind the new system from NXT-ID is to provide users with a standardised method of managing all payments including cryptocurrency like bitcoin which could potentially push the digital currency even further into mainstream use as it would make easier to use and this would make it far more popular with the general public.

As well as allowing users to manage various different types of regular accounts it will also allow users to manage a range of cryptocurrency accounts including bitcoin. Users should be able to send and receive bitcoins with this technology as well as access currency exchanges and initiate transfers between different accounts. Using this new smart wallet device will not only allow users to make purchases online but also allow them to make payment in regular high street shops and it does this by downloading an abbreviated blockchain which it stores on the device and then synchronises intelligently whenever transactions and balance requests are made.

Its first push into making cryptocurrency wallets that are more user friendly is the Wocket® which is smart wallet that has been designed to replace the need for carrying around lots of different debit and credit card in a regular wallet whilst at the same time helping to protect a users’ identity. This device could move bitcoin and various other cryptocurrencies further into the mainstream by using the abbreviated blockchain stored on the device to validate any transactions made allowing users to make purchases in shops in much the same way as the traditional debit and credit cards.

The chief technology officer for NXT-ID, David Tunnell advised “What’s unique about this patent is that it introduces what we believe is the first payment experience that makes crypto-currency uniform across all payment transactions and payment methods, which is a chief inhibitor to wide scale acceptance of crypto-currencies like Bitcoin.”

He went on to add “With this technology, a common smart wallet platform can be used by an individual to manage not only all of their conventional financial accounts (e.g. debit cards, check cards, credit cards, etc.), loyalty cards, membership cards and the like, but also provide for the secure management of a multiple alternative currency accounts, thereby facilitating the real-time use of one or more crypto-currencies as a method of payment, receiving crypto-currency payments, and crypto-currency exchange. This technology also enables Bitcoin to be used across multiple payment mediums including magnetic stripe, NFC, and other emerging payment methods.”

NTX-ID has announced that all the net proceeds gained from its recent public funding effort will go towards its marketing activities and as working capital for its key product the Wocket smart wallet.

Gino Pereira, NXT-ID’s CEO advised in a statement “We continue to build out our patent and IP portfolio as the payment industry evolves. This technology is another important step of how we intend to build the payment solution of the future.”

It seems that these days the only time the mainstream news sites talk about bitcoin is when the prices go through the roof or through the floor, and of course when something bad happens with the digital currency.

Since its creations back in 2009 the bitcoin has seen everything ranging from highs to monumental highs on to massive drops followed by the slow but steady decrease and occasional increase that we see today. The problem is that unless you are a currency trader it probable the right time now to look beyond the value of the digital currency and instead look at what bitcoin (and possibly other cryptocurrency) is actually capable of achieving.

One of the biggest issues with mainstream media these days is that because they only have a small understanding of digital currencies like the bitcoin the only thing they can really focus on is the big changes in its value and of course when there is a huge scandal involving it, like MtGox, Silk road and other similar incidents. This, however, is the only kind of stories that the general public tend to be interested in as most know as much about bitcoin as the journalists writing the articles, hence the often sensationalist news stories.

The key thing that many journalists and in some cases the small groups of doom and gloom technology experts fail to realise is that back in 2009 a single bitcoin couldn’t even buy a daily newspaper whereas now a bitcoin is valued at around £170-£180 or even higher on a good day.

The point being that with the huge price jump to more than $1200 near the end of 2013 the value of the bitcoin has dropped to a much more stable value during 2015 and this is, in large part, to the ever increasing number of transactions being made with the currency.

Back when bitcoin was first created the digital currency was virtually worthless and the reason for that was a combination of no-one wanting it and the fact that no-one accepted it for trade, which in most situations would have caused an endless loop culminating in the death of the new digital currency.

This obviously wasn’t the case and all took was a few visionaries that, albeit after quite some time, saw the value of the bitcoin as an alternative method of payment with global potential and considering this digital currency didn’t have the backing of any banks or government would seem to many as a considerable leap of faith.

Following the first few traders who began accepting bitcoin for their goods and services the road to making the bitcoin more mainstream has been a very slow one with only a small handful of businesses beginning to accept bitcoin but the clear reason behind this reluctance for many companies is that although bitcoin has recently become more stable it is still far more volatile than any other centrally managed currency in any country.

As well as those brave enough to take it on in its early stages the other main driving force behind the bitcoin is the community that has built up around it and it is these people that have made it what it is today and have worked to ensure it doesn’t just become another failed technology or ‘just one of those fads’.

The most interesting thing about the bitcoin and the way it has been developed is that the technology it is built on could potentially make it so much more than just another way to buy things. The blockchain technology behind it and its decentralised nature means that for businesses it could allow funds to be moved around globally for a fraction of the transaction costs of most current methods of payment. The ease of moving bitcoins around the world could also hold huge value for third world countries or even countries like Greece whose banks are still feeling the effects of the global recession.

The transparency of the blockchain would also be of huge value to consumers if more companies began dealing in bitcoin as it would allow them to confirm whether the item they were buying was genuine or not simply but tracing it progress using the blockchain through the whole manufacturing process.

What this all boils down to is that the current volatility of the bitcoin is only of any real value to traders who want to buy and sell the digital currency to make a profit. The stability of the bitcoin will eventually come down to innovators to build systems that make using bitcoin easy enough for even those with no technical know-how to use and for more companies to then start accepting bitcoin and massively increase the number of transactions made with the digital currency.

 

The possibility that the blockchain and bitcoin has the potential to fix a large number of the many problems that the world of payments current faces is something that Brian Billingsley, the CEO of Klarna North America strongly believes to be true.

Even with an ever growing number of startup companies offering online checkout services are starting to use bitcoin as an accepted method of payment Billingsley’s company which is based out of Sweden, covers 18 different markets and has more than 1200 employee is currently not ready to join them. The reasoning behind this is probably the same for many other companies and that is it is still unclear what value the digital technology holds for online commerce and payments technology.

At the Keynote 2015 conference earlier in the week Billingsley mentioned that as part of Klarna’s bitcoin strategy one of the main goals for his company was to get rid of one of the big problems that the bitcoin digital currency still hadn’t overcome and that was friction for consumers using bitcoin to make purchases.

As part of their efforts to introduce bitcoin trading in their business Billingsley mentioned that they were trying to ascertain when consumers would be allowed to trade with over 50,000 merchant partners using bitcoin through talks with Swedish regulators and were also actively tracking the development of any technology to be used for bitcoin.

One thing that Billingsley did stress even though his company was looking to move into the bitcoin arena was that Klarna’s merchant partners would be unlikely to see any rise in sales by taking up bitcoin as a method of payment even though the introduction would appeal to those with an interest in technology.

One of the big issues Billingsley had with the use of bitcoin in e-commerce was, given that there was already a certain amount of friction in the process of making on-line payment, how the barrier of having to first buy bitcoin before it could be used could be removed from the e-commerce process.

Even in those areas where it could prove useful he advised that this would prove to be a stumbling block that would weaken cases for the technology’s usability.

The concept for most consumers would be that no matter how simple the technology gets to buy bitcoin most would see little point in doing so and this is a problem that even the biggest companies trying to bring in bitcoin payments would face.

The best model currently available, according to Billingsley, would be for a large number of merchants group together to try and bring down transaction fees similar to the way that the Merchant Customer Exchange (MCX) have.

The greater reach of the smaller merchants globally is one of the possible areas that the blockchain and bitcoin could solve. With the hefty taxation from sales online these merchants could be put in a position where they would need to create a number of different corporate identities worldwide.

This would make one of the biggest problems for many merchants the ability to work out how to scale their business. The idea of using bitcoin for these businesses seems more compelling model compare to the current consumer model where it would be increasingly difficult to move them from their regular currency to bitcoin the less technically knowledgeable they became.

In an effort to provide users with more options new dynamic transaction fees have recently been introduced by BitGo, which is a bitcoin wallet with multi-signature security. The reason behind these new dynamic fees is because of the increase in the volume of bitcoin traffic which has led it taking longer to process transactions. The pricing for the fees will be automatically adjusted based on processing periods that can be predicted and users will be able to choose which price to go for.

According to the BitGo website “Many transactions have taken longer than usual to confirm. As of (this) writing, the number of unconfirmed transactions is now well into the tens of thousands and continues to rise. To the user, this means that important operations such as exchange deposits are being delayed for hours, with no guarantee of confirmation time.”

One example of a surge in transaction fees that the BitGo website noted was an estimated fee of 0.00012502 BTC per kb or $0.03 USD on June 17th 2015 which had doubled in value by the 8th July 2015 to an estimated value of 0.00026823 BTC per kb or $0.07 USD.

The co-founder and chief technical officer of BitGo, Ben Davenport advised “As a response, BitGo has implemented dynamic fee rates on our wallet. The fees will be below standard during times of low bitcoin network congestion and proportionally higher during periods of high congestion. BitGo platform and wallet users will now enjoy the added benefit of having their bitcoin transactions processed in a more expedient and predictable manner. Our initial benchmarks estimate an average confirm time of about 2 blocks (20 minutes) with the enhanced fee estimations.”

When it comes to dealing with the current and potentially growing surge in bitcoin transaction activity there are three things that bitcoin wallets are doing at the moment said Davenport. The first is to just ignore it and hope things settle back to normal at some point. The second is to provide users with a greater degree of control over their fees, although this is just throwing the issue back at the user and the only way this method would work is if users actually knew what the fee should be and in most cases they don’t. The third way is the direction that BitGo has taken and that is to bring in dynamic fees that change based on the congestion conditions on the network. Davenport advised “We think it’s the best path forward – the software ultimately needs to make smart decisions, with some input from the user on the urgency of the transaction.”

He went on to say that a number of other popular markets are already using systems like dynamic pricing or surge pricing so it will be something that consumers on the whole will be used to.

As to whether people will accept a confirmation time of 20 minutes Davenport advised that in practise most people are waiting this long already, if not longer in some cases. He said that it would be likely that BitGo would add the ability for users to specify how urgently they want their transaction to go through as their main platform already has that capability.

Support for an appropriate regulation of virtual currencies was announced at the Group of Seven (G7) summit which was help in Germany in June with the UK present as one if the representative.

Along with the UK Prime Minister, David Cameron at the G7, which was held in Bavaria back on the 7th to the 8th June 2015, were heads of state from the largest economic countries in the world including Germany, Italy, US, Japan, Canada and France.

One of the major concerns that was raised in the summit statement by the G7 group was the use of digital currency like bitcoin to finance terrorist group under the cloak of anonymity and this kind of activity was something it was looking to oversee. The regulation of emerging methods of payment would be part of this process according to the statement which read “We will take further actions to ensure greater transparency of all financial flows, including through an appropriate regulation of virtual currencies and other new payment methods.”

A recommendation was made by the Financial Action Task Force (FATF) that all digital currency exchanges be monitored and before being allowed to operate would be required to hold a license to operate. This recommendation was fully supported by the G7 group in one of its pledges and in terms of efforts to both deploy and develop the various oversight standards in which the group said it would be actively contributing.

According to the group “We will strive to ensure an effective implementation of FATF standards, including through a robust followup process.”

It isn’t easy to figure out exactly what motivates people to use unregulated cryptocurrency like bitcoin or what type of person they are although a bitcoin study has recently been released that tries to elaborate on just who these people are. Based on the various article regarding bitcoin users it may come as no surprise to many that according to data from this report distinct link have been made between bitcoin use, illegal activity and computer programmers.

To look at the reasons for people’s interest in bitcoin and its use data from Google Trends has had to be used by the authors of this bitcoin study from the University of Kentucky and this is mainly due to the fact that users of bitcoin have their anonymity protected as is standard with cryptocurrency. This data along with anecdotal evidence and a variety of other existing research has helped to build up a picture of the types of people that are the most likely to take an interest in bitcoin although it has confirmed that the trends data alone would not be enough to provide definitive proof.

Until now research has concluded that profit making, politics or just sheer curiosity have been the driving forces for people looking at bitcoin and other cryptocurrency and on this basis the research has found four possible groups of users, which are investors, lovers of technology, criminals and those with anti-establishment views.

Google Trends was used to look into the various search terms using the word ‘bitcoin’ over the 31 months that this study was conducted. It was initially concluded that social censoring of the Google data would be unlikely even though some activities carried out with bitcoin would have been quite sensitive. The study also concluded that there was a strong link between exchange prices and searches related to bitcoin on Google which reflected on the people that were either closely following bitcoin or actually had an involvement in its use.

In order to separate out the types of bitcoin users the bitcoin study took searches that related to the computer science discipline along with various terms like ‘bitcoin exchange’, ‘bitcoin mining’, ‘bitcoin value and ‘bitcoins’. This set out the tech lover group as bitcoin users.

To look at the interest relating to investors, the libertarian political group and criminal activity it looked at search terms that consisted of ‘free market’, ‘make money’ and of course ‘silk road’.

Although it was no surprise that the Google Trends data confirmed that computer programmers and criminals were the primary types to use bitcoin what was surprise was that no direct links could be found for investors looking to profit from bitcoin or just those looking to separate themselves from the mainstream banking system.

The authors of the bitcoin study wrote “Although many commentators have speculated about motives for using Bitcoin, our study is the first to systematically analyse Bitcoin interest, including the interest of hard-to-observe clientele. We find robust evidence that computer programming enthusiasts and illegal activity drive interest in Bitcoin and find limited or no support for political and investment motives.”

The new manifesto called Innovate Finance Manifesto:2020 has been released by the industry organisation Innovate Finance and seeks to push the UK forward as a key player in the innovation of financial technology (FinTech) both within and outside the UK.

According to the manifesto “Our vision for 2020 is for the U.K. to be the most investment-friendly environment for FinTech globally, attracting $4 billion of venture investment and $4 billion of institutional investment in corporate venture funds, accelerators and innovation programs,” states the manifesto. “Our vision for 2020 is for the U.K. to be the premier location for at least 25 global FinTech leaders, whether by IPO, global market share or by valuation.”

It also advised that a deep pool of both scientific and mathematical specialisation would be required in the UK and an emphasis on increasing in the number of graduates with technical skills as well as a commitment to a higher level of financial inclusion, effective regulation and a more proactive environment for the creation of policies relating to FinTech.

With the increased use of FinTech within the UK it is expected that there will be jobs available for next block of graduates that come out of university with technical qualifications and according to the manifesto an extra 100,000 jobs are expected to be created in the FinTech industry through a greater level of investment along with increased development of FinTech by leading companies around the world.

The new manifesto received a great deal of praise from the Prime Minister David Cameron who was in South Eash Asia with a trade delegation that partially consisted of FinTech specialists including the bitcoin company Blockchain.

Cameron advised “This government wants the U.K. to be the leading FinTech center in the world. That’s why, at the Summer Budget, we appointed a special envoy for this fast growing sector.”

He added “I’m pleased that Innovate Finance’s manifesto has set such ambitious goals, including the creation of 100,000 jobs. This will ensure we are a world leader in the development of financial services technologies.”

Although no mention was actually given to any specific digital currencies that use blockchain, including bitcoin, the move that have recently been made to invest in and develop digital FinTech in the UK by both the Bank of England and the government should definitely put the UK in a strong position to become a global hub for the use of digital currencies like bitcoin.

The only negative view of the manifesto from Cameron is encryption and the cryptographic technology that is the basis for the Bitcoin blockchain. He advised that strong encryption is something that his government intends to ban and this has been seen by many as a move that could seriously damage the UKs economy as well as the lead it currently has in terms of technology.