Ripple Labs found themselves on the wrong side of FinCEN this week and has been subject to a $700,000 fine for failing to keep up with regulations as a money exchanger. Most notably the fine also comes with requirements that Ripple Labs comply better with anti-money laundering regulations, including better tracking of money transfers.
Gavin Andresen, Bitcoin luminary and core developer, has come out with a series of arguments why Bitcoin’s max block size needs to be increased (he proposes to 20MB by March 2016). This has generated a great deal of talk in the community, see below for links to his posts arguing for the change.
Steve “Woz” Woziak has joined Planet Capital, a milti-function ATM kiosk developer. Low-power, fanless Bitcoin node Bitseed V2 servers are now up for pre-order. And, Case, a hardware wallet prototype with a GSM chip and fingerprint reader, was announced at TechCrunch Disrupt NY.
Welcome to this Bitcoin Weekly.
Gavin Andresen argues that increasing the max block size is urgent
In a blog post aptly titled “Why increasing the max block size is urgent,” Gavin Andresen, Chief Scientist at the Bitcoin Foundation, argues for increasing the max block size, and soon.
Bitcoin works by miners grabbing up transactions and stuffing them into blocks, those blocks are then verified through cryptographically strong mechanisms and attached to the blockchain. As the number of transactions approaches the maximum size of a block, transactions may be dropped and this could lead to longer and longer transaction times. This is an extremely simplified explanation of Andresen’s argument for larger block sizes.
In an index blog post, “Time to roll out bigger blocks”, Andresen seeks to address counter-arguments to his proposition. The first, addressed in the above blog post, is amid seven other arguments that he has yet to address with blog posts. It’s worth keeping this post bookmarked if you’re at all interested in the protocol that runs Bitcoin.
image via http://bitcoinaware.com/
These blog posts were mentioned by Andresen on Reddit in response to questions about a post he made to his personal repository stating, “Hard fork: allow 20MB blocks after 1 March 2016 Allows any block with a timestamp on or after 1 March 2016 00:00:00 UTC to be up to 20,000,000 bytes big (serialized).”
Current posts by Andresen at time of publication are as follows: “Why increasing the max block size is urgent,” “It must be done… but is not a panacea,” “Block size and miner fees… again,” “Will a 20MB max increase centralization?“, and “Big blocks and TOR.”
FinCEN fines Ripple Labs $700,000
FinCEN has fined Ripple Labs inc. $700,000 under the Bank Secrecy Act (BSA) for not registering as a money services business without registration. The complaint by FinCEN further claims that Ripple Labs failed to implement and maintain adequate anti-money laundering (AML) programs.
“Virtual currency exchangers must bring products to market that compy with our anti-money laundering laws,” said FinCEN Director Jennifer Shasky Calvery.
Ripple Labs is a cryptocurrency company that uses a crypto asset called “XRP II” or Ripples to exchange value across the Internet. Through the Ripple system money can be transferred between different participants via a cryptocurrency exchange mechanism. Unlike bitcoins, XRP II was already fully pre-mined before Ripple went to market, but as XRP has cryptocurrency qualities it can be exchanged in the same manner bitcoins can.
As part of the agreement with FinCEN, “Ripple Labs will also undertake certain enhancements to the Ripple Protocol to appropriately monitor all future transactions.”
Speaking to Ars Techinica, Ripple Labs’s spokesperson, Monica Long said that the company was glad to have the issue settled. Long focused on the fact that Ripple Labs exists in “an emerging, undefined fintech category,” and that Ripple has been consistent in supporting a complaint Ripple ecosystem.
Apple co-founder Steve Wozniak joins Planet Capital board of directors
Multi-function ATM and kiosk operator Planet Capital announced recently that Apple co-founder Steve Wozniak is joining the company’s board as advisor and director. Reported by CoinTelegraph, this move appears to signal increasing affiliation between Wozniak and blockchain infrastructure.
““[H]aving an engineer as innovative as Woz around to look over our shoulders and make suggestions is priceless,” said Planet Capital CTO Dan Sokol.
Planet Capital deploys kiosks programmed to act as multi-function payment systems, which simplifies financial transaction activity into an easy to use machine. The ATM kiosks provide traditional ATM functions, bill payments, and even full point of sale functionality.
What will interest Bitcoin Weekly readers is the ATMs also have two-way buy and sell options with numerous cryptocurrencies. Included for buying and selling is Bitcoin, Litecoin, Dogecoin, and any other future derivatives of cryptocurrencies that attain widespread demand.
Bitseed V2 now available for pre-order
Bitseed personal servers are small machines about the size of a thick book with a fully enclosed, fanless design. The machine is designed to run services and applications for customers looking for something obtrusive, which is why Bitseed is offering the Bitcoin Edition that can store and run the Bitcoin Core open source client (bitcoind) and maintain the entire blockchain (which has grown to over 26GB.)
The V2 device launches the bitcoin node automatically on startup and needs only to be plugged into the wall and attached to an Ethernet cable. No display monitor is needed. The OS is Unbuntu 14, with an optional GUI desktop; and it can support a mouse, keyboard, and monitor. The device ships with a 160GB hard drive.
Bitseed V2 currently sells at $149 for pre-orders and there is no information on when it will ship.
Bitseed V2 is also planned to mint flavors for altcoins, but only after an order comes in for 100 Bitseed V2 supporting that specific altcoin, e.g. if Bitseed receives 100 orders for Litecoin units, then single Litecoin units will become available.
Case announced at TechCrunch Disrupt NY
Case Wallet Inc. (aka CryptoLabs) recently presented their product, a bitcoin hardware wallet called Case, at TechCrunch Disrupt NY, the sixth annual technology conference for product and company launches.
Case differs from many of the other wallets on the market by combining a credit-card sized device with a GSM chip for cellular network communication. The device will not require a computer or phone tethered for bitcoin transactions to occur.
Case integrates a multi-signature, multi-factor hardware concept to protect user security by using both the device (in the user’s hands) and a cloud service to deliver enhanced security. With a 2-3 multi-signature setup, the service requires both the device and the cloud service to sign before a transaction can be processed. The cloud-stored key can only be accessed via a biometric fingerprint scanner on the device (sent to the server for verification)
A third key is kept in a secure service by Case for situations when the device is lost or stolen, allowing the user to recover lost wallets.
“As online blockchain technologies evolve as a means for buying and selling bitcoin, they will require devices like Case to ensure security and maintain privacy,” stated Case Chief Technology Officer Stephen Schultz.
As a hardware wallet, Case also seeks to simplify the process of transacting in bitcoin. With the GSM chip and a QR code reader, Case replaces a smartphone wallet with a single-function device that securely interacts with bitcoin and provides ease-of-use.
Case will be will shipping in Summer 2015 with limited availability (only 1,000 units in the first run) for an introductory price of $199. Pre-orders have already started.
Photo credit: Steve Wozniak, Wikipedia photo