A Growing Interest in Bitcoin & the Blockchain

ewf_headshot

Exciting technology and business personalities are exposing a wider audience to bitcoin. Experience in cryptography and blockchain technology are growing increasingly important for advising decision makers on crypto-currencies. These new faces come from diverse financial, business, and regulatory backgrounds. The Obama Administration’s newly appointed Deputy U.S. Chief Technology Officer, Edward Felten, has experience discussing the nuances of bitcoin in a public forum.

A Princeton professor and cryptography proponent, Edward Felten was appointed the White House’s Chief Technology Officer on May 11th, 2015. His research has led to many aspects of the Bitcoin protocol, with a focus on mining behavior and Game Theory. Published articles regarding crypto-currencies reflect Felten’s opinion on various digital currency topics:

  • In 2013, Felten co-authored a 20 page research paper exploring the economics of bitcoin mining. The paper examines a bug in an early bitcoin version, that caused a fork on March 2013, and the lessons that were learned. The detailed report examines the structure of the Bitcoin protocol and the effects of a 51% attack.
  • As the Director of Princeton’s Center for Information Technology Policy, Felten published blog articles discussing the importance of cryptography and bitcoin.
  • Felten held the position of Chief Technologist for the Federal Trade Commission. While at the FTC, Felten authored a report to congress urging to increase transparency in data collection. Additional papers co-authored by Felten show a wealth of knowledge on the topics of privacy, computer security, and technology law and policy.

Richard Branson’s Blockchain Summit on Necker Island

8054892855_4500f86600_k

Richard Branson hosted the Blockchain Summit last week to an audience of Bitcoin executives, columnists of popular media outlets, and financial advisers. Bitfury debuted a light bulb that mines bitcoin demonstrating alternative applications of the technology. Tweets indicate the event covered Property Rights, Elections, Digital Identities, and Internet of Things applications. At the end of the summit, Branson was dubbed an honorary member of the Digital Chamber of Commerce for his contribution to the Bitcoin community. As the sun set on the Blockchain Summit legislators finalized drafts for businesses using bitcoin and other digital currencies back in the United States.

Updates to Legislation Shows INTEREST in bitcoin BUSINESSES

Lower_Manhattan_Skyline_at_night_from_the_Jersey_side_August_2009

California, New Jersey, and New York released proposals regarding crypto-currency legislation, reigniting the debate of how much regulation is necessary in a decentralized environment. After many months of discussions and testimonies from various industries and experts, regulators are beginning to realize bitcoin’s innovative and disruptive potential. Conversations about bitcoin are shifting toward blockchain technology and many are trying to separate the two to create personal blockchain networks. The attention toward blockchain technology sheds light on misconceptions of bitcoin that still need addressing.

The value and confidence of the blockchain derives from the amount of verified transactions and the computing power of the bitcoin network. Each transaction validation expands the ledger and strengthens the value of bitcoin as a reward is given to miners performing validations. The amount of computing power required by the network increases over time as difficulty rises and the ledger expands. The limited supply of bitcoin also creates a growing incentive for miners to validate transactions.

The Bitcoin protocol hash-rate is approximately 336,000,000 GH/s. That amount of computing power can not be replicated to gain an overall consensus to manipulate the blockchain. Creating a new blockchain without bitcoin has higher risks of failure because the threshold of computing power to validate those transactions would be much lower. Financial markets see the strength of bitcoin and have created innovative uses of the technology using colored coins.

NASDAQ recognized the strengths of an immutable ledger, and are now testing a market to distribute colored coins for private equity. We are excited to see the new uses for the blockchain to create new markets across the world. The impact bitcoin has on those without banking services demonstrates the need to encourage these discussions and inform government bodies of the importance of promoting innovation.

Subscribe to our mailing list to get updates on our products and learn how bitcoin is cultivating a new global exchange.

A Growing Interest in Bitcoin & the Blockchain

Case launches pre-sale at TechCrunch Disrupt!

We’re so excited to have launched the pre-sale of Case at TechCrunch Disrupt. It was such an honor to take part in the event, and we’re thrilled to finally open up our pre-sale of 1,000 individually numbered wallets! Make sure you place your order promptly because a limited number of devices are available for the first shipment this Summer.

Engineering a truly secure and simple bitcoin wallet has been a long process, and we have been eager to finally reveal the first generation of Case. Back in late 2014 we manufactured our first small batch of devices, and have continued to run more small batches in the first few months of 2015. Just last week we were in New York demoing the device to Inside Bitcoins conference attendees, which was the very first time that we had unveiled Case to the community.

Case creates more opportunities to use bitcoin by employing GSM networks to relay transactions in over 100 countries, without having to rely on your phone or computer for an Internet connection. We’ve also equipped Case with biometric authentication, which adds an additional layer of security and allows you to establish ownership of your device. Ownership of a physical key increases the protection and security of your bitcoin. The key on the device is generated on first-time setup; we never ship devices with pre-generated private keys. Case Wallet_Product Location_Stephen S Reardon Photography_08190 copy

We’re also excited to announce that we’ve partnered with Third Key Solutions to offer you optional key storage services that safeguard your recovery key. In the unfortunate situation where your device is damaged or lost, Third Key Solutions will assist Case with migrating your funds to a new wallet. Third Key Solutions has the reputation and dedication to ensure a secure recovery process. If you’d prefer, we also offer you the option to import your own third private key.

We’ve worked very hard on Case and we know there is more work to do. We know that the Bitcoin community is very passionate and involved, and we welcome their feedback so that we can continue working hard to make the best Case possible.

Thank you so much for your continued support – we look forward to getting Case in your hands.

TechCrunch Disrupt NY 2015 is TechCrunch’s sixth annual conference in New York City. The format combines top thought-leader discussions with new product and company launches. Morning executive discussions debate technology-driven disruptions in many industries, while the afternoons are reserved for the Startup Battlefield, where some 30 new companies will launch for the first time onstage, selected to present from numerous applications received from around the world. The winning company will receive a $50,000 grand prize and the Disrupt Cup at the conclusion of the conference. The conference is May 4-6, 2015 at the Manhattan Center, 311 West 34th Street (at 8th Ave.) Manhattan.

Case launches pre-sale at TechCrunch Disrupt!

Bitcoin Increases Financial Inclusion

Case recognizes the importance of financial inclusion. Our device is available in 120 countries at launch, and that number is fundamental to the creation of new global consumers. 2.5 Billion adults are unbanked because they do not own enough assets to participate in a traditional banking system. These 2.5 billion people own goods that are valuable in local markets, but will not have the same value globally. Bitcoin is the vehicle that gives value to various goods on a global scale. A small landowner in Kenya cannot create a tangible claim to his property if he cannot create a document proving ownership that is universally accepted. The blockchain assigns value to assets that can be exchanged globally.

How bitcoin holds valueBitcoin Value

Bitcoin is a viable form of currency because it meets the defined characteristics of money. The characteristics of money are defined as scarcity, divisibility, portability, durability, fungibility, and recognizability:

  • Scarcity: There will only be 21 million bitcoin ever created
  • Divisibility: Bitcoin is divisible by 8 places (Unit Table)
  • Portability: Bitcoin has both digital and physical forms. You can carry a higher value of bitcoin than silver for example
  • Durability: Storage capabilities of wallets allow long term storage of bitcoin. Keys give the final authorization to exchange bitcoin held inside of a paired wallet. A key can be stored in a safety deposit box, on a cloud server, or on the wallet device itself for an extended period of time
  • Fungibility: A bitcoin is worth the same as another bitcoin. Users in the bitcoin economy accept each bitcoin by a majority consensus. There are no ‘safe’ or ‘bad’ bitcoins. All coins are valid and prices of an individual bitcoin are interchangeable
  • Recognizability: Block explorers display transactions that transmit to the blockchain. This trust-less network of validated funds maintain a record of the amount of bitcoin in each wallet. Each transaction is signed by both parties recognizing the amount of bitcoin being sent to the specified address

Scarcity creates a predictable rate of how many bitcoins will enter the market. If demand does not match the level of inflation, the price will fluctuate. Bitcoin’s overall market share is relatively small, which causes the price of bitcoin to shift when significant amounts of money are exchanged. Bitcoin’s price adjusts based on supply and demand, and the number of transactions (transaction volume) is a direct reflection of bitcoin adoption.

HacksilverIf bitcoin as a currency does not reach a high level of adoption, it will still hold value. Hacksilver was used by the Vikings as a means to exchange currency, and it still holds value today even though it is no longer in circulation. As long as there are people using bitcoin it will always hold value. The usefulness of bitcoin boils down to trusting the reliability of transactions recorded on the decentralized ledger. These validated transactions are referred to as blocks. It takes approximately ten minutes to solve, or validate, a block. Each validated block increases the validity of previous transactions.

It is difficult to translate how bitcoin works to those with lackluster technology experience. An analogy is a great way to parallel features of the blockchain in terms that are easier to understand. Andreas Antonopoulos gives a relevant analogy describing the scaling difficulty of validating blocks relating to Sudoku puzzles.

Adjusting Difficulty

Sudoku puzzles are easily provable by verifying that there are no repeating numbers between each row and column. A person can not solve a puzzle by inserting random numbers into each space. Imagine a room with 20 people solving the same Sudoku puzzle. The amount of rows and columns in this Sudoku have been formulated to be solved in approximately 10 minutes. An announcement was made that the first person to solve the puzzle will be awarded 25 bitcoin. As the timer begins people immediately start walking towards the front of the room to have their puzzle solution validated. After 9 minutes of continuous attempts, someone discovers the correct solution and receives the 25 bitcoin reward.

The next round begins, and someone solves the puzzle in 8 minutes. The puzzle is made more difficult because rounds are being solved in less than ten minutes. More rows and columns are added to increase the average time needed to solve the puzzle. After a few more rounds, a large crowd enters the room and now 200 people are attempting to solve the puzzle within 10 minutes. More rows and columns are added to the puzzle to adjust for the number of new players. The players continue to randomly guess and check their answers until the correct answer is discovered. That random element is similar to the bitcoin protocol as cryptographic nonces assign difficult mathematical problems to each transaction for verification. Miners are consistently attempting to validate these transactions.

Advantages of bitcoin over other non-traditional currencies

The benefit of bitcoin varies from person to person. Bitcoin will not be the most convenient payment solution for many individuals with already established banking systems. People without access to banking services in the developing world value a currency that is backed by an algorithm and not a central authority. Bitcoin gives unbanked users the ability toM-Pesa assign a global value to their goods. The need to participate in a global economy is forcing unbanked individuals to use unsafe alternative currencies. The lack of a traditional banking system in Kenya created a market using M-Pesa mobile minutes. M-Pesa allows mobile users to exchange money into M-Pesa units and exchange M-Pesa between customers. The increase in exchanging mobile minutes as a form of payment showcases the need for reliable financial services. The financial inclusion that Bitcoin offers is important to the developing world.

Bitcoin use creates a challenging learning curve for new users that want to use the technology properly. The challenge of making bitcoin easy to use and secure revolves around wallet security. Case is leading by example by engineering a secure device that is easy-to-use, especially for users that are not technically savvy. Properly storing your private key is not a compromise that any bitcoin user should make when selecting a bitcoin wallet. We are creating a product that is easy enough for novices to use without compromise important security features.

Follow us to learn more about how Case is creating a secure bitcoin wallet without compromising your security.

Bitcoin Increases Financial Inclusion

Reaching a Higher Security Standard

CCSS Our continued mission at Case is to provide an easy-to-use bitcoin wallet, without compromising security. Throughout the design and development process our engineers have been striving to reach a higher security standard with each milestone. We wanted to share how we measure our own security, why setting a community-wide standard is important, and why those standards are useful to both the end-user and developer.

Security standards are important from a user perspective because it is these standards that allow the user to compare similar services on a common metric, so that they can make an informed decision. As a more mainstream audience starts using bitcoin these standards become especially more important, as it can’t and shouldn’t be assumed that every person with a bitcoin wallet understands what a NIST SP 800-90A compliant DRBG is, or what data sanitization is – and why all of those things are so very important, and affect the security of their bitcoin. Security standards make all of this easier to digest.

Security standards are also important for every single developer building bitcoin products and services. We are protecting people’s money, their identity, their privacy, and a whole heck of a lot we can’t even imagine yet. This obligation and responsibility is HUGE and shouldn’t be something we experiment with. We’re all pretty lucky to be working on something so important, but that comes with incredible risk and security standards help to mitigate that risk. At Case we use the CryptoCurrency Security Standard (CCSS) as guidance for design and development, so that we are constantly reminded of what is necessary to reach the highest level of security. Using these standards as a benchmark helps us build a better, safer product that provides both us and our users with the confidence that we’ve built something truly secure.

The CryptoCurrency Security Standard (CCSS) was created in collaboration with the Crypto Currency Certification Consortium (C4) in the Fall of 2014. These standards are defined by a group of prominent figures in the Bitcoin community. Contributions to the CCSS were conducted voluntarily with the goal to create a security standard for all Bitcoin companies to achieve. There are also multiple certifications offered by C4 to demonstrate various levels of knowledge for aspiring Bitcoin Professionals.

CCSS The CCSS includes a checklist to measure 10 aspects of security with respect to how a company handles bitcoin from a technological and procedural perspective. This full CCSS Security Matrix is a permanent fixture on the desk of our engineers, and gives us all something to work toward. Each level requires satisfactory achievement of all previous metrics.

A greater level of explanation for each defined characteristic can be found on the Github “_data” directory. C4 is in the process of ratifying the CCSS and is working to offer official certification in September of 2015. Meanwhile, here at Case we continue to find the CCSS matrix useful and look forward to more industry-wide security standards being put in place!

Continue to read about our design process and subscribe for updates.

If you have any questions, please drop us a line at contact@cryptolabs.com

Reaching a Higher Security Standard