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payments

Police arrest suspect in WeChat ransomware attack

Reading Time: 1 minute In June 2018, he allegedly created malware capable of stealing Alipay passwords to transfer a victim’s funds.  Original Link

R3 Announces Global Payment App With XRP as Base Currency

R3 Corda

R3 has unveiled a new app on their international blockchain, a global payment platform that uses Ripple’s XRP as its initial base currency.

The app, dubbed Corda Settler, continues R3’s track record for pursuing  ambitious blockchain projects, and it is allegedly “purpose-built to allow for payment obligations raised on the Corda blockchain platform to be made through any of the world’s payment systems, both traditional and blockchain-based.” The press release clarifies that XRP will be the first cryptocurrency specifically supported by Settler, but also stated outright that it would not be the only one in the foreseeable future.

In the release, Richard Gendal Brown, R3’s Chief Technology Officer, offers some clarification on his company’s choice of XRP specifically.

“The deployment of the Corda Settler and its support for XRP as the first settlement mechanism is an important step in showing how the powerful ecosystems cultivated by two of the of the world’s most influential crypto and blockchain communities can work together,” said Brown in the press release, adding that “while the Settler will be open to all forms of crypto and traditional assets, this demonstration with XRP is the next logical step.”

R3’s Corda blockchain has already demonstrated its ability to handle a variety of different apps for different use-cases, and the Settler app will continue to operate on the same standard. According to the release, Settler will allow payments of all sorts to be “settled via any parallel rail supporting cryptocurrencies or other crypto assets, and any traditional rail capable of providing cryptographic proof of settlement.”

The press release concludes by describing a new functionality of Corda transactions, without specifically naming Corda Settler: namely, that parties in payment obligations now have the ability to request funds specifically in XRP. The team working on these updates at R3 evidently has some genuine confidence in XRP’s appeal as a cryptocurrency and payment vehicle, despite having legal troubles with Ripple in the past.

The new app is hardly their first attempt to use a financial blockchain to reach clients all over the world, and they have had a solid track record in that field to boot. Earlier this year, R3 launched a test of a Know Your Customer (KYC) app on Corda, which went off without a hitch as it dealt with various banking institutions on several continents.

This article originally appeared on Bitcoin Magazine.

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Bitfury Is Implementing Lightning Into Crypto Payment Platform Paytomat

Bitfury Paytomat Lightning

The Bitfury Group has recently announced a partnership with crypto payment processing system Paytomat, working to bring the Lightning Network to Paytomat’s participating merchants.

According to a recent Medium post made by LightningPeach, “Bitfury’s in-house specialized Lightning Network engineering team,” the Bitfury Group is pouring its resources into Paytomat’s wallet and vendor system, enabling “users and merchants on the Paytomat system to send and receive bitcoin payments over the Lightning Network almost instantly.”

“Both Bitfury and Paytomat participated in the Blockchain Expo in Amsterdam in June, and, after meeting, we began discussing our potential partnership opportunities,” Pavel Prikhodko, the head of LightningPeach, told Bitcoin Magazine.

The partnership between the two companies seems like a natural fit. Bitfury specializes in building blockchain hardware and tools (such as mining chips), and Paytomat has a large base of customers and merchants already lined up.

Per the partnership, Bitfury will be incorporating Lightning directly into Paytomat’s platform. As Prikhodko described it, “Bitfury’s LightningPeach team integrated Lightning Network in Paytomat. Bitcoin Lightning payments are now built in to Paytomat’s merchant dashboard, allowing users to make instant and low-fee payments in Bitcoin.”

The Lightning Network has generated a great deal of fame in the cryptocurrency space for its promise of instant and feeless microtransactions, but, as with many promising technologies, adoption can become a major hurdle. Prikhodko seems fully confident, though, in Paytomat’s ability to give Lightning and bitcoin sufficient exposure to its network of merchants.

“You can find a list of merchants that are already working with Paytomat in their partnership section. Bitcoin Lightning payments on Paytomat will be made available to more than 300 merchants around the world.”

On the aforementioned partnership section of Paytomat’s website, the company lists a wide range of vendors across Europe from the Iberian Peninsula to the Lower Countries and even as far as Ukraine. In addition to the wide geographic range of vendors, Prikhodko also said there is a diversity of these vendors themselves, stating that “Paytomat works with many kinds of merchants, including restaurants/cafes and clinics.”

With this partnership introducing the Lightning Network to a hitherto unexposed audience, it could open up the payment solution to an entirely new user base and provide a use-case with real worldwide leverage. To date, Lightning’s main implementations and use cases have been limited to web activity and online merchants, though the network has grown significantly in the latter half of 2018.

This article originally appeared on Bitcoin Magazine.

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BitPay Integrates PAX Stablecoin Into Cryptocurrency Payment Platform

BitPay Integrates PAX Stablecoin Into Cryptocurrency Payment Platform

Bitcoin payment platform BitPay is now going to allow payments with the Paxos Standard token (PAX), which it calls “the fastest growing stablecoin and the highest trading volume of any U.S. dollar-backed stablecoin.”

Although BitPay has previously integrated a number of different cryptocurrencies in its platform, such a widely trafficked stablecoin (the first of its kind to see support from the payment platform) holds certain distinct advantages, namely regulatory compliance and a stable value. Seeing as each PAX token represents $1, merchants and customers might feel more comfortable transacting the token in lieu of other cryptocurrencies, which are often subject to volatile price swings.

An important credential that comes with PAX’s name is its regulatory compliance, as it is “issued directly by a regulated Trust company and is approved for issuance by the New York State Department Financial Services.” Although there are several prominent stablecoins in the space, Paxos is the first to have this level of authenticity.

The release commented little on the future plans of BitPay’s new partnership, but the adoption of a prominent stablecoin is a logical next move. Stablecoins have recently been drawing the interest of the space, with more and more attempts to launch cryptocurrencies that can successfully maintain a peg with fiat.

Combining the most prominent sales platform for cryptocurrency with a fast-growing and well-regulated stablecoin is an advantageous match, one that would ideally attract more merchants and consumers to the platform now that they have a price stable cryptocurrency to transact.

This article originally appeared on Bitcoin Magazine.

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A Year After Launch, BTCPay Has Grown Larger Than Its Creator Expected

BTCPay

First hinting at his project in a reply to a BitPay tweet on August 2017, Nicolas Dorier boldly claimed that BTCPay would make one of crypto’s most popular payment processors obsolete.  

In an r/Bitcoin post two months later, he clarified that his brainchild isn’t meant to “take the place of BitPay.” Rather, BTCPay is poised as a new and improved alternative, a decentralized stand-in for merchants who wanted an easier way to accept bitcoin.

A year later, the project has grown larger than Dorier anticipated. With a community of open-source developers at its back and growing demand from a faithful user base, the payment processor has expanded its support past bitcoin and has integrated with many of the web’s most popular point-of-sale (PoS) plug-ins.

It has become a meteoric success. But for what started out as a hobbyist’s side project, this success has, in some respects, become unwieldy.

A Fork in Response to a Fork  

Dorier launched BTCPay at a time when a contentious proposed Bitcoin hard fork was sending tremors through the community. BitPay’s approach to this hotly contested fork, Dorier told Bitcoin Magazine, was part of the reasoning behind BTCPay’s creation.

“BTCPay was created when BitPay was trying to force all their merchants to use another altcoin instead of Bitcoin. The priority for BTCPay was to make sure that all software written to work on BitPay will work on BTCPay with minimal (or no) change.”

The “altcoin” Dorier refers to is B2X, the unsubstantiated product of the failed Segwit2x hard fork. A controversial proposal at the time, the protocol change intended to double Bitcoin’s block weight limit. While proponents saw this as a necessary scaling solution, opponents argued it would open up security vulnerabilities, and many of these same opponents distrusted the invite-only, conspiratorial meeting that gave birth to the planned fork.

Incidentally, the fork never really made it off the ground. Still, a number of Bitcoin-related companies around the world supported it, and BitPay was part of a not-inconsequential list of companies that said they would treat Segwit2x as Bitcoin, given enough community consensus.

Dorier was not a fan. A part of the NO2X movement himself, the developer decided to create BTCPay in the face of what he viewed as an uneven, centralized decision in BitPay’s commitment to B2X.

His alternative in BTCPay is meant to offer the convenience of BitPay’s payment processor API without the counterparty risk or centralized custody inherent in its parent technology. To create this alternative, Dorier simply forked BitPay’s open source code.

“Redeveloping all of it would have consumed lot’s of my time. By using the same API shape as BitPay, I can basically fork their open source work and easily make it work on BTCPay.”

With BTCPay, users never relinquish control over their private keys, and they can even host their own node to buttress the platform’s services. As Dorier put it, this opens up the potential for “new things becoming easily possible,” such as integrating the Lightning Network or atomic swaps.

With a New Platform, New Services (and Coins)

For those who are less technologically savvy, BTCPay won’t leave them behind.

Node hosting on Microsoft’s Azure provides 1-click deployment for the average merchant, who can pay a third party to host a BTCPay node on their behalf. Dorier stated that this node hosting service is the most popular and oldest available, though a rising competitor is cutting into its dominance. Luna Node is gaining traction among BTCPay’s merchants, mainly because it is cheaper to host on the service ($10/month as opposed to $60/month for Azure). On top of this cost reduction, it also accepts bitcoin as a form of payment and has a more intuitive setup wizard, Dorier claims.

On the topic of merchants, BTCPay’s most integrated plugins are Drupal, WooCommerce, Magento and PrestaShop. Dorier told us that Shopify “is the most asked [for],” though he said that it’s difficult to “get a foot in the door” with them unless you’re a big company.

For those merchants that leverage BTCPay, they have access to more payment options than the platform’s counterpart in BitPay. Though BTCPay is “mainly focused on Bitcoin,” as Dorier put it, community developers have also added support for litecoin, dash, dogecoin, monacoin, bitcoin gold, feathercoin, groestlcoin, viacoin and polis. Dorier believes that there is enough interest for stratis, monero and ether to see their own support as well, though he emphasized that “the burden of integration is in the hands of the altcoin communities,” as he himself will not go out of his way to add them.

With Growth, Growing Pains and Limitations

Even with its fast-growing success, BTCPay has its tradeoffs and limitations.

One of these is lack of a fiat on-ramp. One benefit of BitPay’s centralization and custodial services is that it can support seamless crypto-to-fiat conversions. For a decentralized BTCPay, this feature has been markedly absent from its platform.

Still, Dorier is working to bring this liquidity to the platform, though he did say the solutions were still too underdeveloped to discuss seriously.

One of these solutions is an exchange integration that would allow merchants to forward transactions and autosell them on fiat-ramp exchanges. “Doing this, though, is a headache accounting-wise for businesses,” he cautioned, so the platform would also need to “provide a good accounting feature.”

In another model, “exchanges would host BTCPay on behalf of their user and automatically convert to fiat like BitPay is doing. This would solve accounting issues,” Dorier said, although this function also veers toward the same centralized, custodial services that BTCPay was built to avoid.

Fiat support troubles aside, BTCPay’s success was sprung on Dorier to a point. As we briefly mentioned, the platform began as a side project. Now, the formerly one-man job has turned into a wellspring of open-source development, and Dorier, who holds down two contractor positions at Metaco and DG Lab, said he is “reaching his limit.”

“My current challenge is about not being a bottleneck … Nowadays, I can’t keep up with the number of issues and pull requests to review. I find it hard to spend more time on developing features I want because of this.”

Still, a group of Bitcoin-faithful developers have helped to lighten his load, most notably the pseudonymous BitcoinShirt, Rockstardev and Kukks. With their work, these developers have also increased awareness, something that no doubt adds to Dorier’s burden as BTCPay grows.

Of course, this growth, while cumbersome, means the platform is thriving. And Dorier has plans to expand its offerings further, adding such features as a crowdfunding app, shareable invoices, atomic swaps and a wallet restoration function.

As BTCPay expands, Dorier hopes to continue to lengthen the already impressive strides of the 1-year-old payment processor, with the end goal of overtaking the industry’s frontrunner.

“BTCPay is giving back the power directly to the user. And I want to prove that we can compete, and even overtake the ease of use of centralized services … Ironically, centralized services are making themselves more and more difficult to use because of KYC/AML regulations. BTCPay is becoming easier and easier because we are solving a user-experience problem, not a regulatory one.”

This article originally appeared on Bitcoin Magazine.

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Blockstream’s Liquid Network for “High Value” Bitcoin Payments Is Live

Blockstream’s Liquid Network Is Officially Live

The Liquid Network is up and running.

More than a year after its conceptual introduction at the Blockchain Association of Canada’s Government Forum in Ottawa, Blockstream’s bitcoin scaling solution made its public debut on October 10, 2018, after going live among its partners on September 27.

Described by its creators as “an inter-exchange settlement network,” Liquid is Blockstream’s complement to Lightning. However, whereas Lightning is designed for micropayments, Blockstream’s COO Samson Mow told Bitcoin Magazine, “Liquid is designed to facilitate fast and reliable high value transfers.”

“Liquid allows parties to send funds to any destination, without the need to establish channels ahead of time. Funds in Lightning are ‘hot’ (private keys are online), whereas you can store Liquid Bitcoin in both hot or cold wallets. Liquid also has the ability to have Lightning added as a second layer as well, so we view these two technologies as complementary and both important for the ecosystem.”

Unlike its counterpart in Lightning, which is a secondary layer, Liquid was built as a Bitcoin sidechain. Though not exclusive to Bitcoin, you can think of a sidechain as an extension of the Bitcoin blockchain. It allows users to swap coins from the main blockchain to its sidechain in a 1-to-1 parity, usually to tap into a feature that the main network doesn’t provide.

For Liquid, that feature is fast transactions with a special emphasis on trading mass sums between exchanges, financiers and market makers. As such, Mow says that exchanges and members of the Liquid network will be the main providers of liquidity, since they will be the ones keeping a balance of L-BTC which, in turn, they would allow their users to swap for.

This design is a bit of a spin on the original ideation of a sidechain. The concept was initially pitched as an avenue for trustless swaps, but Liquid’s iteration, which requires intermediaries to execute these swaps, may be called a federated sidechain.

“The members of Liquid secure the network by running functionary servers that run the Liquid blockchain as well as maintaining the two-way peg to the Bitcoin blockchain,” he said. He drew the comparison that “Liquid functionaries are like miners” who “generate new blocks to add to the Liquid blockchain.”

To leverage sidechain’s features, users have to exchange mainnet BTC for Liquid Network’s L-BTC using peg addresses.

“When someone wants to move BTC to the Liquid sidechain,” Mow explained, “they send it to a unique peg-in address. When someone is ready to move their money back to the Bitcoin blockchain, they can make a peg-out transaction that will tell the [Liquid members] to send Bitcoin to the desired address.”

After Launch: Looking Forward

Upon launch, the project has 23 partners lined up to serve as Liquid members, namely Altonomy, Atlantic Financial, Bitbank, Bitfinex, Bitmax, BitMEX, Bitso, BTCBOX, BTSE, Bull Exchange, DGroup, Coinone, Crypto Garage, GOPAX (operated by Streami), Korbit, L2B Global, OKCoin, The Rock Trading, SIX Digital Exchange, Unocoin, Xapo, XBTO and Zaif.

Moving forward, Liquid hopes to expand its membership and build out its services. These services could include Issued Assets (IA), Mow explained, what amount to “native tokens within the Liquid blockchain.” These IA could be security tokens, tokenized commodities/real-world assets or even Ethereum.

More than IA, Mow stated that Liquid has “a lot of things coming down the pipe” following its launch. These include a Liquid Testnet that is anchored to Blockstream Signet (Blockstream’s testnet for Bitcoin), GreenAddress integration, a Liquid mobile wallet for mobile platforms, a user interface for Issued Assets, a Liquid Block Explorer and hardware wallet support. He expects these features to be fully functioning by 2018, with more coming in 2019.

In the short term, Blockstream will focus on building out these features to ease Liquid’s introduction to and use in the wider cryptocurrency community. In the long term, Mow said the the company hopes to see Bitcoin at the epicenter of a nexus of sidechains that allow for a seamless, interconnected exchange of the industry’s many assets.

“The end game is a platform for the trustless exchange of many assets, with Bitcoin at the center,” said Mow. “We knew that having a high speed inter-exchange settlement network with privacy features would be something the market would respond well towards, but we’ve seen an incredible interest from parties interested to issue tokens and assets on Liquid as well. They’ve just been waiting for a secure and reliable solution to do so.”

This article originally appeared on Bitcoin Magazine.

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Japanese SBI Set to Launch Ripple-Based Mobile App

SBI Ripple

Japanese Fintech heavyweight SBI Holdings plans to launch a Ripple-powered mobile payment application called MoneyTap. In a tweet shared with his followers, Takashi Okita, CEO of SBI Ripple Asia shared the web page of the new payment application, which promises to offer “easy bank transfer application” without fees.

The exact launch date for the mobile app is uncertain, but the site gave an estimated timeline for the release of both the iOS and Android versions for Autumn of 2018.

Earlier this year, SBI Ripple Asia, a joint venture between SBI and Ripple, announced plans to create a “groundbreaking smartphone application” based on Ripple’s blockchain technology which will allow bank customers to settle transactions instantly.

MoneyTap is expected to “provide on-demand payments” to Japanese customers through its consortium. The project is currently supported by the Japan Bank Consortium (JBC), a collection of 61 Japanese banks members brought together by SBI Holdings and SBI Ripple Asia. Some of these banks, namely, SBI Net Sumishin Bank, Suruga Bank and Resona Bank, will reportedly have priority to offer the service to its customers after launch, while the other banks will have access to the technology down the road.

The payment app hopes to increase the flexibility of domestic payments in Japan and eliminate the current time constraints imposed by traditional banking systems.

Once it goes live, the application will allow Japanese customers to conduct domestic transactions round the clock. In addition, the mobile app will eliminate “existing banking and ATM fees” that are currently applied to domestic transfers in Japan, making transfers faster and cheaper for consumers.

When the project was first announced, Okita stated his excitement, heralding that the mobile app and Ripple’s blockchain will “improve payments infrastructure in Japan.”

“Together with the trust, reliability, and reach of the bank consortium, we can remove friction from payments and create a faster, safer, and more efficient domestic payments experience for our customers,” he added.

Emi Yoshikawa, director of joint venture partnerships at Ripple, added to Okita’s excitement.

“We’re proud to provide this production-ready technology that not only improves the international payments experience, but also have applications for domestic payments infrastructure.”

This article originally appeared on Bitcoin Magazine.

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Paxful CEO Ray Youssef Shows How Bitcoin Can Be Used for Social Good

Paxful

Can bitcoin be used for social good? If anyone thinks so, it’s Ray Youssef, the CEO of peer-to-peer bitcoin platform Paxful.

A successful entrepreneur in the crypto and blockchain space, Youssef comes from humble beginnings and understands the importance of maintaining control over one’s finances. Marred by memories of homelessness and extreme monetary strain, Youssef’s journey to build Paxful was an arduous one.

“When my mother got divorced and lost her home that she had put so much into, I went into higher gear,” he explained in an interview with Bitcoin Magazine. “My first two startups were successful, but then I had 11 failed projects in a row. I took risks and kept taking them until my savings were gone, and I was so busy working on Paxful, trying to get it to work, that when I lost my apartment I went for walks at night and slept in a new place when my friends couldn’t bunk me.”

Youssef says things took a positive turn when he and his business partner chose to get serious about entering the crypto scene. “A fellow bitcoin enthusiast told us about how you could sell bitcoins and make a profit,” he says. That encounter made him look more closely at the world of peer-to-peer bitcoin trading.

“We didn’t know its potential back then — we just saw that it worked for us and we wanted to make it even easier for other people to do the same, whether to start a business online or just get extra rent money.”

Today, Paxful is a peer-to-peer online bitcoin platform that connects BTC purchasers with sellers. Currently, the site offers over 300 ways to purchase bitcoin including credit and debit cards, PayPal, Western Union transfers and even Amazon gift cards.

Buyers start out by finding an offer they like. They then work one-on-one with an experienced seller who guides them through the purchase process via online chat. Once everything is set, they pay the seller directly from a selected account to receive their coins.Every seller is verified to offer customers the highest level of safety, and Paxful will soon implement KYC in an effort to further protect buyers.

Once his marketplace was ready, Youssef convinced his closest friends to give it try. Things began to grow from there, but his big break came from a phone call he would receive one fortuitous morning:

“I left my personal mobile number on the website to help people directly, but no one ever called until one lady desperately in need of bitcoins called me at 4 a.m. yelling at me in pain and claiming that she was down to her last $13. I believed her, and the crying baby in the background was the icing on the cake. We had to help her. The problem was she had no bank account, and sites like Coinbase and other bitcoin brokerages had no solution for the unbanked. She had gotten the run around for two days and needed just $5 in BTC.”

Youssef was able to provide the woman with the finances she needed, and the rest is history. He says that the company truly began the day she called.

“She led us to realize that gift cards were the perfect way to onboard the unbanked to crypto,” he says. “She and all the others that followed taught us that bitcoin is the universal currency the world needs, especially the unbanked. They were the people that bitcoin was supposed to help, but no one was helping them or even trying. My co-founder and I did not sleep for a week, and we redid the entire system to make it usable for the non-techy, unbanked user.

“Now, instead of me having to be on the phone with people for an hour to walk them through buying their first bitcoin and sending it to pay for something, people are able to figure it out themselves through Paxful’s tailor-made system. No one in crypto ever took the time to build a simple onboarding market and wallet for ‘normal people,’ let alone the unbanked. We did.”

Paxful has been operating in full-form ever since, and Youssef has never looked back. As the platform onboarded more customers, Paxful has given Youssef and his team the opportunity to extend their bitcoin services to much larger causes.

Among the company’s latest projects is its building a blockchain technology hub in Lagos, Nigeria. Youssef says that bitcoin has become extremely popular in several regions of Africa and has empowered young entrepreneurs to build wealth in ways nobody could have foreseen.

Furthermore, Youssef began #BuiltwithBitcoin in late 2017, an initiative designed to boost the cryptocurrency community’s involvement in humanitarian projects. The project got its start with Youssef donating roughly $50,000 of his own money toward the construction of a new school in Rwanda. This has led to plans for a second institution. Other projects include a scholarship initiative for Afghan refugees, a Rwandan water tank project and food drives in Venezuela, which Youssef confidently states could become the first official “bitcoin nation” in the future.

Youssef describes bitcoin as a “universal currency” whose potential has barely scratched the surface. He says there are “currency wars” brewing in countries like Venezuela and Turkey, and bitcoin is the strongest weapon.

“Wealth preservation is the first use case for bitcoin,” he explains. “People in currency wars can buy bitcoin to store their value and even use it to pay bills in other countries by ‘borrowing a bank account.’ This just means they sell it to a peer on Paxful and they use their bank account to pay a bill for them to another local bank.”

He also lists commerce as one of bitcoin’s biggest factors. People can sell their goods to anywhere they can ship them. They are then paid in bitcoin, which can be converted to fiat currency. There’s also a strong case for bitcoin’s use for remittance, in which someone can send money to family members abroad without processing times and banking fees.

“The best thing about bitcoin is that it’s the core part of the #p2pfinancial revolution, and this means wealth and opportunity for entrepreneurs all over the world that didn’t even think being an entrepreneur was possible,” Youssef comments.

“They can become vendors on #p2pfinance platforms and help onboard their communities to bitcoin while earning profit at the same time. This is how you really make a day-to-day difference in people’s lives. You show the ones most ready to act a better way, and their communities grow around them. There are single mothers who first came to bitcoin in fear and desperation, and now make five figures a month selling bitcoin. This is just the start.”

Overall, Youssef is grateful for his past hardships as they taught him lessons about survival, humility and what was “vital” in life. He says it was these past experiences that showed him how to make Paxful a success and understand where his customers would be coming from, mentally and emotionally.

This article originally appeared on Bitcoin Magazine.

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Abra Supports SEPA Bank Transfers, Enabling Crypto Purchases With Fiat

Abra Supports SEPA Bank Transfers, Enabling Crypto Purchases With Fiat

Abra, the all-in-one digital wallet and cryptocurrency exchange, has announced its support for Single Euro Payment Area (SEPA) bank accounts. European users can now enable direct wire transfers from European banks to purchase any of Abra’s 28 available cryptocurrencies.

Founded in 2014, Abra is working toward providing users with maximum privacy and control. The application is non-custodial, and the wallet’s private keys are never held by anyone other than the actual user. Abra employs no middlemen, ensuring customer funds are never touched, managed or viewed by outside parties. Past and present investors in Abra include American Express Ventures, First Round Capital, Arbor Ventures and RRE Ventures.

Bill Barhydt is the founder and CEO of Abra. Speaking with Bitcoin Magazine, he explains, “Abra’s new European bank transfers will be available to people living in 34 countries if they have a SEPA-supported bank account. We get asked all the time by our users in Europe to try and find ways to make investing in cryptocurrencies easier.”

Abra wallets were initially funded using wire and bank transfers in the U.S. Customers could also purchase crypto using both credit or debit cards. The platform’s integration of SEPA will give several European Union nations the chance to deposit either national fiat currencies or euros into their Abra wallets to invest in cryptocurrencies. Among the countries now privy to this service are Poland, Romania, Cyprus, Austria, Germany and Italy.

Abra’s recent partnership with Coinify — a secure platform for buying and selling bitcoin — is what helps to connect SEPA bank accounts with the Abra app. Once users have deposited funds into their Abra wallets, Coinify transfers the money into BTC based on present exchange rates. Users can then use their bitcoins to purchase any of Abra’s other cryptocurrency offerings.

Furthermore, Abra says it is adding three more cryptocurrencies to its trading system: Cardano (ADA), Basic Attention Token (BAT) and Tron (TRX). Abra also allows users to hold and trade bitcoin, ether, ethereum classic, bitcoin cash, dash and dogecoin among others.

Barhydt states, “We are constantly looking for new ways to help make investing in cryptocurrency more simple and secure. By adding bank deposit support in Europe, we enable millions of people who are just entering crypto [to] gain exposure to this new asset class. We are also working on adding funding support to more countries across the globe. We have a lot of big plans in the next few months that are aimed at reducing some of the barriers to entry for cryptocurrency investors. In addition to that, we are constantly vetting more cryptocurrencies to add to the app.”

This article originally appeared on Bitcoin Magazine.

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You Can Now Pay With Bitcoin Via Lightning at CoinGate’s 4,000 Merchants

You Can Now Pay Through Lightning at CoinGate’s 4,000 Merchants

CoinGate, a bitcoin payment processor, has launched bitcoin Lightning Network payments on its platform, bringing the option to accept Lightning payments to its 4,000 clients.

The Lithuanian company enables merchants to accept bitcoin payments for their products or services. Merchants can keep the funds in bitcoin or CoinGate will convert those funds to Euros or U.S. dollars for customers who want to avoid dealing with bitcoin’s volatility.

In a blog post announcing the launch of Lightning on its mainnet, CoinGate explained that shoppers can pay their affiliated merchants with Bitcoin’s on-chain transactions (a conventional way) or select the option to pay through the Lightning Network, a second-layer solution that works on top of Bitcoin.

Lightning “fits exactly in our vision of what Bitcoin should be in the future,” Dmitrijus Borisenka, CoinGate CEO and co-founder, said in a statement. Still, the network is “in its early days and more suited to advanced users and Bitcoin enthusiasts,” the company notes.

Hailed as the solution to Bitcoin’s scalability problem, Lightning promises faster transactions and lower fees. Bitcoin can only handle seven transactions per second. Transactions on the Bitcoin blockchain take a minimum of 10 minutes to confirm and high fees make small purchases, like coffee, too costly to make sense.

Lightning works via a network of payment channels. As channels open up, different channels get linked together. This allows Bitcoin users to send payments through a far-reaching network. Because the transactions happen on top of the Bitcoin blockchain, they are not subject to normal wait times. Instead, Lightning only settles the final balance on the Bitcoin blockchain once a channel is closed.

CoinGate has been piloting a Lightning Network integration developed by Lightning Labs with a group of 100 merchants since July 1, 2018. The pilot received “overwhelmingly positive feedback” CoinGate wrote in its blog post.

The Lightning Network was the brainchild of researchers Tadge Dryja and Joseph Poon, who first proposed the idea in a 2015 white paper. The goal of the network is to make bitcoin more useful for everyday purchases and micropayments.

It could be some time before the Lightning Network is widely adopted, but CoinGate is a step in that direction and a big win for Bitcoin supporters.

Find out more about the Lightning Network here.

This article originally appeared on Bitcoin Magazine.

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IBM Introduces ‘World Wire’ Payment System on Stellar Network

IBM Stellar

IBM has launched a blockchain-based payment system called Blockchain World Wire. According to IBM, the new payment network uses digital currency on Stellar’s blockchain to “clear and settle cross-border payments” in near real time.

The Stellar network is a distributed, blockchain-based ledger that facilitates cross-asset transfers of value. Like Ripple, Stellar can handle exchanges between fiat-based currencies and digital assets. Using this protocol, IBM wants to make it possible for financial institutions to move money quickly and reliably, while cutting off intermediaries and complexities associated with traditional international payment systems.

Speaking with Bitcoin Magazine, Jed McCaleb, co-founder of the Stellar Development Foundation, said, “IBM’s implementation of the Stellar protocol has the potential to change the way money is moved around the world, helping to drastically improve international transactions and advancing financial inclusion in developing nations.”

To use the new payment system, two financial institutions have to agree on the currency — a stablecoin or any digital asset — to be used as a bridge asset between any two fiat currencies. The companies will use their existing payment system, connected to World Wire’s API, to convert the first fiat into a digital asset. World Wire will then convert the digital asset into the second fiat currency simultaneously, completing the transaction. The details of the transactions will be recorded “onto an immutable blockchain for clearing.”

Earlier this year, IBM partnered with Stronghold to create the Stellar network’s first U.S. dollar-pegged stablecoin called “Stronghold USD.”

At the time, IBM’s Vice President of Global Blockchain Jesse Lund had said, “IBM will explore use cases with business networks that we have developed, as a user of the token. We see this as a way of bringing financial settlement into the transactional business network that we have been building.”

IBM’s latest moves provide competition for Ripple’s products aimed at institutional clients, such as the xCurrent and xRapid. However, there are concerns about Ripple’s appeal to financial institutions due to low scalability and privacy problems.

This article originally appeared on Bitcoin Magazine.

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Pay From Bitcoin Mainnet to Lightning and Back: Submarine Swaps Are Now Live

Pay From Bitcoin Mainnet to Lightning and Back: Submarine Swaps Are Now Live

In order to make payments on the lightning network — Bitcoin’s second layer solution for instant and cheap transactions — users must first fund lightning channels. This process, however, creates a slight disconnect between lightning users and on-chain users. Lightning users can pay lightning users, and on-chain users can pay on-chain users, but they can’t pay one another directly.

To solve this, “Submarine Swaps” allow users to make trustless transactions between lightning addresses and on-chain addresses in either direction. The technology could be a game changer for both Bitcoin lightning and mainnet users, as it would remove the transaction barriers between them.

“[I] think this makes it a lot more attractive to [run] a lightning-only service,” Submarine Swap’s developer Alex Bosworth told Bitcoin Magazine, as on-chain users wouldn’t beexcluded. “You don’t have to […] worry about including the on-chain people,” he said. “You can outsource that to somebody else, and you don’t have to trust them.”

What Are Submarine Swaps?

Using the same cryptographic tricks as those used in the lightning network, Submarine Swaps use a trustless middleman to link a Lightning channel transaction with an on-chain one. This middleman, likely a program called a swap provider, is tasked with settling both the on-chain and off-chain transactions with both users, bridging the gap between Bitcoin’s network and the lightning network.

If one lightning network user wants to send funds to an on-chain user, for example, the middleman will transfer these funds to its own lightning wallet, if (and only if) he sends a transaction with comparable funds on the Bitcoin blockchain to the desired on-chain address. The process works the same in the inverse if an on-chain address wants to send funds to a lightning address.

“There’s lots of different ways it can be used,” Bosworth said. “So let’s say an exchange wants to send to a lightning invoice but it doesn’t have lightning funds, or it doesn’t have a lightning wallet; in that case, it could ask somebody who does have that to assist them, and then they could do so in a way where its locked to their on-chain unit.”

He continued to explain that the feature could ultimately be integrated into wallets, enabling an on-chain client “that doesn’t even know about lightning” to transact with its users.

Bosworth also pointed out that the swap providers could be the one and the same person. “It’s flexible in that respect. So you can have it be either a [third party] or it could even be yourself.”

When asked if the swapping mechanism would want for liquidity, Bosworth said that he believes transaction rewards will incentivize enough users to front their bitcoin for transactions. “[Users] are incentivized by the swap rate to provide liquidity, I think that will attract more liquidity. This is a low risk operation, so I can either have my coins just sit there doing nothing or I can have them available for swaps and generate some revenue,” he stated.

The Submarine Swaps concept was originally conceptualized by Lightning Labs CTO Olaoluwa Osuntokun — though Bosworth came up with the same idea independently. The technology can be applied in various use cases, as Bosworth envisions.

The technology is still in its infancy, as Bosworth explained, and it’s also contingent on the development of existing lightning network applications.

“I’ve started doing tests on mainnet, and you can try testing it out on Submarine Swaps so you can see a swap in action, but there’s lots of stuff to work out and the LND still needs work; they’re working on a major new release, so things are moving along but I wouldn’t say it’s like super safe because not everything is 100 percent yet.”

This article originally appeared on Bitcoin Magazine.

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Coinbase Seeks Patent for Security-Enhanced Bitcoin Payment System

coinbase patent

U.S.-based digital currency exchange Coinbase has filed a patent on a new Bitcoin payment system designed to make cryptocurrency payments safer. The new platform will provide an added layer of security for users’ keys and allow them to make Bitcoin payments directly from their digital wallets.

A segment of the patent filing states, “It may be a security concern for users that the private keys of their Bitcoin addresses may be stolen from their wallets. Existing systems do not provide a solution for maintaining security over private keys while still allowing the users to checkout [sic] on a merchant page and making payments using their wallets.”

If approved, the system would work by allowing customers to encrypt their passphrases into a master key to create an additional buffer against theft. The master key encrypts customers’ private keys and whatever transactions are made. Once a transaction is complete, the master key is deleted, ensuring no outside party can gain access to the information. A new master key is created for each transaction.

Another novel element of the system is its “freeze logic,” which would allow administrators to suspend the system and prevent transactions from occurring in the event of a theft or cyberattack. The patent reads, “At any point in time after the master key is loaded, the system can be frozen. The system can be unfrozen after it has been frozen using keys from the key ceremony. The checkout process can be carried out when the system is frozen and when the system is unfrozen. The payment process can only be carried out when the system is unfrozen and not when the system is frozen.”

Lastly, the application proposes API integration capabilities, which would enable various websites to run versions of the payment system. The API uses a specific pair of keys – one of which is stored on the corresponding website, the other on Coinbase – that must match for a transaction to be approved and completed.

This is not the first time Coinbase has filed for such a patent. The company had tried for something similar nine times in 2015 alone, leading critics to accuse the exchange of trying to build a monopoly on bitcoin services. CEO Brian Armstrong denied this, saying that the company’s goal was to keep blockchain technology away from “patent trolls.”

“One of the best ways to defend against patent trolls is to build your own portfolio of patents, and this is exactly what we are doing, along with just about every other tech company out there,” he wrote in a blog post. “It is an unfortunate game we all must play, but we didn’t invent the rules.”

The company also filed a patent in 2016 to potentially secure Bitcoin-based private keys.

In addition to Coinbase, several traditional financial institutions have filed for blockchain-based patents. Bank of America filed approximately 50 live patents in the blockchain space, more than any other venture. Software giant IBM also has several under its belt, including one for “node characterization in blockchain,” which would allow a distributed ledger to house a series of nodes characterized by specific functions.

Last year in June, delivery company UPS also filed a blockchain patent for what it calls the “autonomous services selection system and distributed transportation database.” Whenever something is delivered from one point to another, it must go through multiple networks and segments before it reaches its destination. This makes it difficult for logistics services to coordinate with one another. The patented system would generate sets of transportation data that is then stored securely on a blockchain and easily tracked to ensure logistics companies meet handling requirements appropriately.

This article originally appeared on Bitcoin Magazine.

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Wyre Adds MakerDAO Stablecoin Pairing for Global Money Transfers

MakerDao

Blockchain money transfer company Wyre has announced a partnership with MakerDAO, creator of the Dai stablecoin, to offer Dai as part of a fiat-crypto trading pair in more than 30 countries across the world including the U.S.

Under the new framework, Wyre’s regulated money transfer infrastructure will be used to facilitate the instantaneous movement of “fiat currency directly into and out of Dai,” thereby removing the unpredictability of “speculative cryptocurrencies like Ethereum and Bitcoin” and benefiting from the speed and security of the blockchain, a press release for the announcement states. The arrangement is designed to give customers a quick and secure money transfer protocol that offers full regulatory compliance.

“Pairing Dai to Wyre’s trading engine and global fiat on-ramps and off-ramps will enable nearly-instant movement of funds across borders. By decreasing the amount of time it takes to clear payments, businesses can increase the number of payment cycles, therefore increasing revenue. Remittance platforms or crypto services can also settle instantly in Dai rather than using international wires which can take up to 48 hours,” the release continues.

Through the partnership, Wyre now offers prospective users an Access Point Interface (API) to connect their bank accounts to the blockchain through Dai, while taking care of KYC/AML compliance and onboarding concerns. Using the API, users can now trade Dai against many of the world’s major fiat currencies and cryptocurrencies including USD, GBP, EUR and more.

Speaking with Bitcoin Magazine, Rune Christensen, CEO of MakerDAO, said the alliance would be beneficial to API developers who can leverage Wyre’s experience as a regulated money service business and focus on creating access from local currency to Dai to fulfill global transactions.

“Through this partnership, we are now helping API developers leverage Wyre’s experience in banking and compliance so they can take advantage of the stability of Dai stablecoin to build and engage their communities, cutting through the red tape, and leaving the off-chain complications to a regulated money services business,” he stated.

“As it relates to the supply chain, organizations that may have been hesitant to engage in crypto transactions can now go directly from fiat currency into Dai stablecoin without having to take the middle step of converting fiat to ETH and then to Dai.”

For his part, Wyre CEO Michael Dunworth indicated that the partnership offers users around the world a cost-effective means of breaking through bureaucratic red-tape in a compliant manner. In his own interview with Bitcoin Magazine, he said, “We’re committed to developing partnerships with leaders like MakerDAO to enable the blockchain ecosystem to evolve at a faster pace.”

Since its launch in 2017, Dai has maintained its advertised USD valuation, which has earned it the respect and esteem of the crypto community. Unlike other popular stablecoins like Tether and TrueUSD, which are backed by fiat, Dai is crypto-collateralized, backed by coins like ether and bitcoin.

This article originally appeared on Bitcoin Magazine.

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Intercontinental Exchange to Introduce Bakkt, a Crypto Payment System for Retailers

Intercontinental Exchange to Introduce Bakkt, a Crypto Payment System for Retailers

This November, cryptocurrency users will be introduced to Bakkt, a new company designed to give millions of retail merchants the chance to buy, sell and trade digital currencies — and even buy a cup of coffee. The company is being launched by Atlanta-based Intercontinental Exchange (ICE), the parent company to the New York Stock Exchange (NYSE) and a leading operator of clearinghouses, global exchanges, and data and listing services.

Bakkt CEO Kelly Loeffler explained, “Bakkt is designed to serve as a scalable on-ramp for institutional, merchant and consumer participation in digital assets by promoting greater efficiency, security and utility. We are collaborating to build an open platform that helps unlock the transformative potential of digital assets across global markets and commerce.”

ICE is also devising “a 1-day physically delivered Bitcoin contract along with physical warehousing,” according to the official press release. If the offering receives the approval of the U.S. Commodity Futures Trading Commission (CFTC), it will begin trading in November of this year.

Introduced in 2000, Intercontinental Exchange is a Fortune 500 company and Fortune Future 50 company. The venture was built to modernize markets and ease the risks and tensions associated with stocks and futures trading by managing the data houses and exchanges traders regularly utilize.

Jeffrey C. Sprecher, the founder, chairman and CEO of Intercontinental Exchange, believes that as cryptocurrencies venture deeper into mainstream territory, it is ICE’s job to ensure that consumers and merchants alike can use them safely — which has ultimately led to the creation of Bakkt.

“In bringing regulated, connected infrastructure together with institutional and consumer applications for digital assets, we aim to build confidence in the asset class on a global scale, consistent with our track record of bringing transparency and trust to previously unregulated markets,” he explained.

To ensure customer security, executives of Bakkt have announced that they are partnering with software giant Microsoft to implement the company’s cloud solutions. This will create a globally regulated and open marketplace for digital asset users. Thus far, Bakkt has garnered funding from venture funds and Wall Street players including Pantera Capital, Protocol Ventures, Galaxy Digital and Horizons Ventures.

One of the biggest retail merchants to sit at Bakkt’s table will be the Seattle-based coffee king Starbucks, which plans to utilize the company’s payment system so customers can purchase drinks, baked goods and merchandise with cryptocurrency.

In a statement, Maria Smith, the vice president of partnerships and payments for Starbucks, asserted, “As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into U.S. dollars for use at Starbucks. As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”

This article originally appeared on Bitcoin Magazine.

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Coinbase WooCommerce Plugin Makes Crypto Available to Millions of Online Merchants

Coinbase WooCommerce Plugin Makes Crypto Available to Millions of Online Merchants

Coinbase’s latest announcement heralds a WooCommerce plugin that makes it quick and easy to accept bitcoin and litecoin as payment methods on any WooCommerce-powered site.

WordPress-powered WooCommerce is one of the most popular e-commerce platforms on the web, and Coinbase claims that it is integrated with over 28 percent of all online stores. Now, each of these stores has a point-of-sale plugin to begin accepting cryptocurrency payments from customers the world over. The WooCommerce plugin can be found on the Coinbase GitHub account.

The plugin allows its users to transfer bitcoin and litecoin directly from Coinbase Commerce with an easy-to-use payment button. The plugin’s library is currently available in less than 10 lines of code for React and Python, and Coinbase says that client libraries for Node.js, Ruby and PHP are currently being built. While the plugin currently supports just bitcoin and litecoin, the company is working on support for ether and bitcoin cash, as well.

Coinbase sees the plugin as its next step to facilitate more widespread adoption of cryptocurrency and creating a more inclusive, open financial system.

“Note that all payments made through Coinbase Commerce are truly peer-to-peer,” the announcement blog post reads. “When customers send money from their cryptocurrency wallet it’s sent directly to a merchant-controlled cryptocurrency address and processed on-chain by the respective blockchain. This means merchants never have to pay transaction fees to accept payments and always remain in complete control over their funds.”

The Coinbase announcement concludes by noting, “We’re just getting started on our quest to make cryptocurrencies an easy payment option and are continually improving Coinbase Commerce based on your awesome feedback. If you have an idea for a feature or product enhancement, tell us on Twitter at @CommerceCB.”

This article originally appeared on Bitcoin Magazine.

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Op Ed: Venmo Offers the Ultimate Cryptocurrency Experience

Venmo could be the ultimate cryptocurrency experience from a user-experience perspective. Any cryptocurrency that seeks to power the future of global transactions must ensure that it is supported by a payment system that is simple, user-friendly and free — like Venmo.

Bitcoin and Venmo

In the original Bitcoin white paper, Satoshi Nakamoto describes the network as “a purely peer-to-peer version of electronic cash [that allows] online payments to be sent directly from one party to another without going through a financial institution.”

While Venmo will never truly be “peer-to-peer electronic cash” —  transactions require going through the centralized Venmo network — users can instantly pay their friends by opening the app and finding their friends’ profiles. And for many regular users, this is probably all they need.

Indeed, an estimated 10 million unique Venmo users, whether paying for rent or splitting the cost of a late-night McDonald’s splurge, generally agree that the user experience of payments is beautifully frictionless — like paying in physical cash, except digitally. And Venmo is generally free to use. Last quarter, Venmo processed $12 billion in volume.

Cryptocurrency Payment Experience vs. Venmo Payment Experience

For this example, I use Bitcoin as a widely adopted placeholder for a payment system to illustrate the pros and cons of current blockchain-based payment experiences vs. existing centralized payment experiences. BTC volatility is ignored because of the assumption that after a Bitcoin payment is cleared, the receiver either instantly converts the bitcoin into fiat currency or doesn’t care about the volatility (perhaps because he or she expects the price to go up).

Bitcoin

Support: The Bitcoin blockchain supports international money transfer — anyone connected to the internet can send and receive payments.

Disintermediation: The Bitcoin network has no intermediaries and cannot be censored/modified unless there is a significant attack; e.g., Sybil or 51 percent attacks.

Average transactions, fees and times: To send a payment, a user generally has to input a recipient’s Bitcoin address featuring 26–35 alphanumeric characters; e.g., 3CMCRgEm8HVz3DrWaCCid3vAANE42jcEv9.

At the time of writing, the average transaction fee on the Bitcoin blockchain was $1.10 with an average confirmation time of 31 minutes. (This example focuses specifically on the Bitcoin blockchain without the lightning network or other second-layer payment solutions, and does not account for other cryptocurrencies with lower transaction fees or faster confirmation times.)

All in all, while the Bitcoin network supports a robust and censorship-free payment network, the payment experience is not optimal for most users.

Venmo

Support: The Venmo network supports money transfer under three main conditions:

  1. Users must be physically located in the United States.
  2. Users must have a U.S. cell phone that can send/receive text messages from short codes.
  3. If users want to transfer money from their Venmo balance to a bank account, the bank account needs to be in the U.S.

Centralized intermediary: The Venmo network is owned by PayPal. Transactions can be reversed and/or monitored for scams via Venmo customer support. There are also limitations placed on transactions, such as a $299.99 weekly rolling limit for unverified individuals and a $2,999.99 weekly limit for verified individuals ($2,000 per transaction max.).

Limits: Merchants face a rolling weekly limit of $4,999.99 for all transactions. In addition, they can’t conduct more than 30 Authorized Merchant Payments per day. A centralized intermediary is helpful for users looking to cancel funds that they accidentally sent or got scammed out of. Venmo may also terminate or place holds on accounts.

Average transactions, fees and times: To send a transaction, a Venmo user inputs their recipient’s contact name, Venmo @ username or phone number. Venmo transactions are near-instant and are generally free unless linked to a credit card. Credit card transactions are charged with a 3 percent fee. For an instant transfer of their “Venmo balance” to a bank account, Venmo users must pay a $0.25 fee. If the user is willing to wait up to one to three days, he or she can transfer a Venmo balance into a bank for free.

All in all, Venmo represents a more simple and user-friendly payment experience but faces strenuous limitations.

How Close Are We?

While no one cryptocurrency payment system has currently amassed the network effect to become a “Venmo” equivalent, early pioneers are making their mark. To name some examples, Toshi, an app-based Ethereum browser owned by Coinbase, allows users to send ether to their contacts, similar to the Venmo interface. CoinText, an SMS-based platform, allows users to send and receive BCH directly linked with their phone number, no app necessary. Coinbase also allows users to send and receive cryptocurrency (denominated in USD) via email address, but does not feature Venmo-like username integration.

Venmo vs. Cryptocurrency?

Whether or not consumers will value the marginal benefits unlocked by cryptocurrency over the current Venmo fiat currency experience and functionality remains to be seen. Perhaps, if Venmo could loosen stringent restrictions and allow global support in a government-compliant manner, internal USD “ Venmo balances” may be sufficient to power global transactions. Users already trust the PayPal brand and enjoy Venmo’s customer support guarantees that secure their funds and protect them against fraud and accidental spending.

But, if users decide that the benefits of cryptocurrency such as BTC outweigh the benefits of a fiat currency, like the USD, Venmo could adopt a cryptocurrency like bitcoin in the same way it already adopted the USD, eliminating Bitcoin’s slow transaction time and cost difficulties.

Adoption of Bitcoin

Venmo, as a second-layer application above the Bitcoin protocol, could own its users’ total BTC in a wallet they control, and synthetically redistribute the BTC balance between users by immediately updating account balances on Venmo servers, instead of making direct transactions on the blockchain. This would mean instant bitcoin exchange and could theoretically be done for free. The trade-off for users would be that their funds are stored by a centralized intermediary; however, average users don’t care now and probably won’t care in the future.

Alternatively, Venmo could act as an access point for the Bitcoin blockchain, serving purely as a connector between users by assigning Bitcoin wallets “@” usernames and never taking custody of the underlying cryptocurrency.

The Future of Payment Systems

Technically, all payment systems can support any currency (barring regulation). Even Bitcoin, which supports the BTC currency natively, could for example support USD or EUR through colored coins. Perhaps more importantly, while Bitcoin is not currently a user-friendly payment system, it doesn’t have to be, because the underlying BTC currency can be used in other payment systems as well.

Either way, global payment systems of the future will create a frictionless, easy-to-use system. Consumers’ preferences will mold these future payment systems and dictate whether or not their transactions will be censorship-resistant or censorable, free or with transaction fees, and centralized or decentralized.

This is an opinion piece by Erik Kuebler. Views expressed are his own and do not necessarily reflect those of BTC Media or Bitcoin Magazine.

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Development of Lightning Mobile Wallets Promises Faster Bitcoin Payments

Since the turn of the year, the price of bitcoin has been battered with investors left to lick their wounds. Behind the scenes though, the development of Bitcoin has continued to defy market movements with the continuous development of the Lightning Network (LN), which has led to the creation of several bitcoin LN wallets.

The Lightning Network ushered in the promise of easing network congestion by moving on-chain transactions to the second-layer protocol.

Here are some of the mobile wallets currently in development.

Eclair

Developed by Paris-based ACINQ, Lightning-ready Bitcoin wallet Eclair currently has 3,000 wallet downloads, and it came about as a result of three years of working on Lightning. The Eclair wallet is a real Lightning node not a remote control app for a node running on a server. Users can transfer money from a checking to a savings account by closing channels, generate Lightning invoices, and pay Lightning invoices through QR codes or Lightning invoices.

Dominique Padiou, a software engineer at Eclair, told Bitcoin Magazine that payment route computation is made by the wallet itself, which creates better privacy, similar to the way a node on a server would.

At the moment, the wallet is outbound only. This is a deliberate move as the company believes users need a mobile Lightning wallet to make payments but not necessarily to receive payments. There are plans, however, to add a receiving feature in the future.

For now, funds stored in LN channels cannot be backed up through the app. Padiou said the company plans to “improve the performance of the wallet in the future, make it secure and add a backup mechanism for the LN channels.” This wallet is only available on the Google Play Store.

Bitcoin Lightning Wallet

Bitcoin Lightning is an SPV BIP37-based wallet developed by Anton Kumaigorodski. It features full Lightning Network support that provides for both on-chain and off-chain network transactions and is available in both testnet and mainnet.

Processing is local for both on- and off-chain transactions. Users can send and receive bitcoin almost instantly through dedicated channels. One unique quality of this wallet is that it uses a system of storage tokens to store channel backups and delay refunding transactions anonymously.

This process is important, since “having a mnemonic phrase won’t get your lost channel balance back unless you have a backup,” Kumaigorodski stated. The potential for funds to go missing due to inconsistencies remain, but Kumaigorodski added that “the wallet offers off-chain data loss protection by automating the channel.” This wallet is available on the Google Play Store.

Rawtx

Rawtx, short for “raw transactions,” is a mobile Lightning Network wallet for Bitcoin that allows users to send and receive testnet bitcoins on the blockchain and Lightning Network. The lead developer, known by the alias “raw tx,” told Bitcoin Magazine that they created the wallet for users who wanted to test out and get familiar with Lightning technology.

He went further to explain what makes the wallet unique. “It is the easiest to start with. One of the first things we show the user is a way of opening a channel with Lightning faucet.” The Rawtx wallet is built on lnd which is one of the most stable Lightning implementations out there.

The app currently supports mainnet transactions but enabling it is not entirely straightforward. The developer told us that the current app available for download is only on testnet, but mainnet testing has begun and it looks promising.

The iOS version of the Rawtx wallet is scheduled to be released later this month while the Android version can be found here.

Other bitcoin Lightning wallets that have been released include LND Thin Wallet developed by Union 7 Labs, Swift Lightning Project and Shango Lightning Wallet. They offer similar features with very little difference in structure and how they process off-chain transactions.

Usability Issues

While Lightning has grown since it was first proposed back in 2015, there is still a long way to go in making these apps easy to use for everyday payments for the average person.

At the time of publishing, there are currently 2,135 open nodes and 5,566 channels. While there is lots of excitement and optimism about what the Lightning Network represents, users are expected to be cautious as the technology is still in development and surprises are possible.

There are also usability issues which could affect the speed of its adoption unless they are fixed. This is most evident in the channel creation process. A user has to go through a series of confirmations before a new channel is accepted, which means the user has to monitor the channel carefully.

You can read more about the Lightning Network here.

Bitcoin Magazine currently does not endorse any of these wallets. While we have no concrete reason to believe they are insecure, all Lightning software is still in very early stages, and we cannot guarantee they will work as advertised.

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Bitwage Launches ICO Advisory Firm and New Payment Solutions

Bitcoin payroll and invoicing platform Bitwage, with operations in the U.S and the U.K., has launched two new products: Inwage, an advisory firm that creates and deploys solutions for launching initial coin offerings (ICOs); and Ether Inputs, an invoicing platform that allows ICO companies to pay employees in their preferred currency.

“The world of cryptocurrency is ever changing. While we strongly believe that Bitcoin is the greatest store of value ever seen, we also recognize the value of new forms of digitized assets,” said Jonathan Chester, president of Bitwage and Inwage, in a statement. “With our new ICO and Ethereum solutions, we are excited to help move this part of the industry forward.”

Inwage

ICOs offer alternative opportunities for companies to raise funds for their startups, but the process of creating and running an ICO project is often risky, complicated and expensive.

Inwage, created as an advisory firm, provides easy-to-deploy services for companies of all sizes to launch their ICOs. It offers a turnkey solution that comes with several features, including technical support, which ranges from smart contract development to initialization; security compliance and advice; and help with marketing and visibility of an ICO project.

Running an ICO often means dealing with large sums of money; this means the company could become a target for hackers. While Inwage offers companies the tools needed to process and hold their funds, it can also provide additional security consulting solutions by helping ICO companies set up enterprise-grade security protocols. Furthermore, it offers recommendations to avoid failures of smart contracts, as well as website security to protect all transactions carried out in the ICO.

Chester told Bitcoin Magazine, “Bitwage has processed $50 million with 0 hacks and has insurance for errors and omissions and cyberliability. An additional $50 million has been processed through the Inwage platform. Together, Bitwage has processed about $100 million.”

Finally, Inwage offers marketing services through its network of partners, targeting the U.S., European, Middle East and East Asian markets.

Ether Inputs

Bitwage has also launched Ether Inputs, a solution that allows ICO companies to pay workers in their preferred currency, which is especially useful in cases in which their employees are unable to hold bank accounts.

Chester said, “The new Ether Inputs will enable ICO companies to navigate a world that is not based solely on cryptocurrency.”

Companies can use Ether Inputs to fund their payroll using ether or bitcoin. Employees can also decide the percentage of their salary to be paid in either fiat or cryptocurrency.

The service was soft launched with successful ICO companies Aragon and Status in January 2018. Chester said, “Workers from Ether Inputs were receiving money in USD, Euro, GBP, ARG, and BRL” during the soft launch.

Bitwage has more products on the horizon, including cryptocurrency transactions and retirement solutions for U.S. crypto investors.

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Alipay opens Future Pharmacy supporting facial recognition payment in Zhengzhou

Alipay opens Future Pharmacy supporting facial recognition payment in Zhengzhou · TechNode

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Argentinian Bank Allows Cross-Border Payments with Bitcoin

Banco Masventas in Argentina announced via its Facebook page that it is introducing a new program that will allow customers to make cross-border payments using bitcoin. The institution has partnered with the Latin America–focused exchange startup Bitex — founded in 2014 — to potentially compete with SWIFT, a global, bank-owned messaging network.

SWIFT, which stands for the Society for Worldwide Interbank Financial Telecommunication, is built to handle and process international bank payments. Unfortunately, the project has been suffering from security issues since it first entered the monetary arena.

Banco Masventas is now the first financial establishment to base its cross-border payment system on the Bitcoin network. The website states that the service is set to enable international transfers to as many as 50 countries and that payments can be processed in 24 hours or less. Translated from their website, the service “allows you to reduce costs associated with international transfers, as there are no international banks [serving] as intermediaries.” The move was reportedly inspired by the bank’s goal to enhance its digital services and lower transaction costs.

One of the establishment’s principal shareholders, José Dakak, stated that the bank is also looking to grow its list of international customers. “One of the actions was to contract Bitex as a strategic partner in the implementation of the Bitex platform for payments and collections operations for our clients abroad,” he explained.

Dakak then added, “The customers will ask the bank to do an international payment, and the bank uses Bitex as a provider. For the customer, it’s transparent, they don’t touch, they don’t see the bitcoin. We are a provider for them, and they are not touching bitcoin.”

Aside from accelerating transaction times, Bitex — according to its website — will provide heightened security for customers by enforcing “strictest compliance rules,” including know-your-client (KYC) measures. The company has also contracted one of the “Big Four” accounting and audit firms, Deloitte, to review and report on specific procedures, operations and balance funds.

Argentina’s blockchain and cryptocurrency ambitions have witnessed regular growth over the past several months, and the Argentinian government has been relatively welcoming to the technology. Earlier this year, for example, new legislation paved the way for approximately 4,000 bitcoin ATMs, which are now being installed throughout the country. In April, Argentina became one of the first countries to declare an official “Bitcoin Day.”

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Merchants Will Soon Be Able to Accept Lightning Payments Through CoinGate

CoinGate, a payment gateway for cryptocurrencies, is planning to launch Bitcoin Lightning Network payments on its platform. As explained in an update published by the company on Reddit, the company is currently testing the technology, and users are invited to join in the tests.

The Lithuanian company serves over 4,000 merchants globally by allowing them to accept bitcoin and altcoin payments which can then be converted into BTC, EUR or USD as payouts.

Utilizing the Lightning Network, merchants could accept payments instantaneously at reduced transaction fees.

CoinGate has been preparing for the integration of Lightning for a while. In 2017, it was an early implementer of Segwit addresses, which fixed the scriptSig malleability problem, thereby making the Lightning Network less complicated to implement.

The company has been experimenting with Lightning payment processing in its sandbox as further tests are being carried out to ensure the stability of the system. Lightning is currently available on its testnet, but there are plans to run live pilot integrations on the mainnet three months from now with a select group of merchants that wish to test the service. The testnet version released to the community is merely for collecting feedback and testing for bugs within the network and in its implementation on CoinGate.

A CoinGate representative told Bitcoin Magazine that the company believes “the Lighting Network is the scaling layer Bitcoin needs.” As a payment processor, CoinGate expects to see an increase in the number of transactions as cheaper transaction fees mean more people will be able to transact and use bitcoin and altcoins accepted on the platform. The ability to receive payments instantaneously will also have “an enormous effect on the convenience of bitcoin payments in both online and retail locations.”

Thaddeus Dryja and Joseph Poon first proposed the Lightning Network in a 2015 white paper as a solution built on Bitcoin. The goal of the network is to make bitcoin more of a day-to-day currency that can be useful for daily trade and micropayments.

Find out more about the Lightning Network here.

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Project Jasper Reveals Proof of Concept for Accelerated Payments

Payments Canada, the Bank of Canada, TMX Group and Accenture have shown — through their collaboration on Project Jasper — that it is feasible to instantaneously clear and settle securities on-ledger, and have demonstrated for the first time that both central bank cash and assets can be tokenized to complete instant equity settlements via distributed ledger technology (DLT).

Payments Canada owns and operates the country’s payments clearing and settlement infrastructure, and works to ensure the privacy and security of Canada’s financial transactions. Every day, the company processes roughly $200 billion in payments, while the Bank of Canada — the country’s central bank — instills monetary policies to lower inflation and promote financial stability.

TMX Group operates cash and derivatives markets and clearinghouses for asset classes like equities and fixed income. The organization provides trading facilities to Canada’s financial community, while Accenture offers solutions in strategy, technology and operations to improve business-client relations and to create sustainable value for stakeholders.

Project Jasper is a collaborative research initiative between the four institutions to understand how DTL could transform the payments system, and to experiment with a DLT-based integrated securities and payment platform. Jasper III, a continuation of a March 2016 venture, is a proof of concept that explores the benefits of DLT on Canada’s financial systems.

Gerry Gaetz, the president and CEO of Payments Canada, commented, “This proof of concept shows that it is possible to deliver payments in a way that has never been done before — by directly swapping cash from buyers to sellers, resulting in instant settlements. We continue to see how the application of distributed ledger technology can help extend the vision of payments innovation in Canada and potentially, one day, help promote financial market integration both nationally and internationally.”

At first, Project Jasper focused primarily on approving and resolving high-value interbank cash payments using the technology behind distributed ledgers. The program is now being reformed to explore integrated payments and securities and to push a “delivery versus payment” system to cut out future counterparty risks and collateral blockades.

Jasper III is the only proof-of-concept development that provides transaction histories to parties specifically involved in those transactions. Other participants are prevented from accessing this data, ensuring that the privacy of market participants is maintained. A white paper further detailing Jasper III’s findings will be released later this year.

“Maintaining privacy, as well [as] integrating other assets onto the same ledger as payments, would provide important benefits for the financial system from the use of a DLT-based wholesale payment system,” said Carolyn A. Wilkins, senior deputy governor at the Bank of Canada.

“Indeed, a key lesson from prior phases of Jasper was that the benefits of a DLT-based wholesale payment system likely lie in its interaction with the broader FMI [financial market infrastructure] ecosystem. Such benefits would come from reaping economies of scope and reducing costs to participants.”

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Chinese millennial founders challenge the status quo by making companies for their generation

Chinese millennial founders challenge the status quo by making companies for their generation · TechNode

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Vaultoro’s Bitcoin-to-Gold Exchange Implements Lightning Network Payments

The world’s first crypto-to-physical-gold exchange, ​Vaultoro​ has announced that it is now the first bitcoin exchange with an implementation of the Lightning Network as an instant deposit method.

The company allows customers to trade gold with bitcoin directly, all the way down to 0.1 gram in quantity. Customers can hold the asset for seconds or years, with their ownership certificate securely stored on the blockchain. All gold holdings are physically stored by Pro Aurum in Switzerland and audited by BDO. The physical gold can be requested by customers or left in the vault, where it is also insured. Vaultoro is also working on a gold-backed debit card.

According to Vaultoro CEO Joshua Scigala, “Lightning makes bitcoin so fast that if you want to buy an order out of Vaultoro’s order book, you can hold the bitcoin in a wallet on your phone, set the order on Vaultoro, get a QR code and send the bitcoins through the Lightning Network, directly purchasing the order.”

Normally a user would have to upload their bitcoins to Vaultoro and wait for six confirmations. During that time, the bitcoins are exposed to a hot-wallet counterparty risk. “With Lightning,” said Scigala, “the bitcoins won’t need to sit in our hot wallet; rather, they instantly make the trade. Market makers will still need to hold coins in our hot wallet because their orders have to sit there waiting to be taken.”

The Android bitcoin wallet Eclair is the first to support Lightning functionality, so it is recommended for this new Vaultoro functionality. The procedure would be to install Eclair, send bitcoin to it, open a Lightning channel, get your confirmation and then send transactions on the network virtually instantaneously.

It is important to note, however, that Lightning is still in beta and Eclair is the only option other than rolling your own wallet. Because Lightning is still beta, Scigala warns that users employ it it at their own risk.

“Bitcoin is one of the greatest peaceful revolutions the world has ever seen,” Scigala told Bitcoin Magazine. “Why? Because it’s voluntarily bringing people back to asset-based money and giving them a way out of controlled debt-based fiat currency. Many won’t understand this important difference, but it doesn’t matter as they will come in due to mad gains in the speculative markets or basic borderless utility.”

The Lightning Network takes bitcoin mainstream in terms of speed, privacy and utility. It’s the icing on this evolutionary cake and it’s beautiful to watch unfold. I’m super proud to make Vaultoro a little part of this story.

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WikiLeaks Store Loses Coinbase Support, Still Processing Sales

WikiLeaks has had to find alternative solutions for its online shop. On April 20, 2018, the whistle-blowing document depository revealed in a tweet that Coinbase has shut down the WikiLeaks’ online store account.

Even with  Coinbase out as a payment processor, WikiLeaks’ online shop is still able to use  CoinPayments.net for cryptocurrency payments, accepting both bitcoin and a variety of altcoins. The organization also still accepts donations in bitcoin, litecoin, ether, monero and zcash.

Coinbase Bails on WikiLeaks

The organization claims that Coinbase sent them a memo “without notice or explanation” indicating that it would no longer have access to the platform.

“Upon careful review,” the message reads, “we believe your account has engaged in prohibited use in violation of our Terms of Service and we regret to inform you that we can no longer provide you with access to our service. We respectfully request that you follow the on-screen instructions presented when you log into your Coinbase account to send any remaining balance offsite to an external address.”

In the message, Coinbase points out that it “is a regulated Money Services Business under FinCEN (FinCen.gov),” making it “legally obligated to implement regulatory compliance mechanisms.” However, the exchange offers no further details on what regulations or Terms of Service WikiLeaks violated to invite a ban.

Responding to the developments, WikiLeaks tweeted that it will call for an international boycott of Coinbase next week, calling out the exchange “as an unfit member of the crypto community.”

Ironically, WikiLeaks began funding its organization with cryptocurrencies after banks and payment services stopped processing donations to it in November 2010. As Visa, Mastercard, Bank of America, PayPal and Western Union shuttered their support, the renegade group turned to virtual currencies that better conformed to its cypherpunk, anarchist roots.  

By December 2016, WikiLeaks had raised 4,000 bitcoin worth roughly $3,000,000 at the time.  The flooding of funding was enough to keep WikiLeaks afloat during the blockade, and as Andreas Antonopoulos points out, “Coinbase has repeated history” by effecting the same ban that sparked “many people’s interest in bitcoin.”

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Santander Launches International Payment Service Built On Ripple’s xCurrent

Santander Launches International Payment Service Built On Ripple’s xCurrent

Banco Santander is launching a new international payments service, dubbed “OnePay FX,” based on blockchain technology. The service is available to retail customers in Spain, U.K., Brazil and Poland, and will be rolled out across more countries in the coming months. The OnePay FX app is available from the App Store for iOS devices.

Banco Santander is one of the world’s largest banks with 133 million customers, 13,700 branches and 200,000 employees. With the launch of OnePay FX, Santander will become the first bank to offer a blockchain-based international payments service to retail customers in multiple countries simultaneously. The bank intends to make OnePay FX significantly faster than existing international payment services and to introduce instant international payments in other countries, besides the four countries supported at this moment, before the summer.

“Transfers to Europe can be made on the same day and we are aiming to deliver instant transfers across several markets by the summer,” said Ana Botín, Executive Chairman of Banco Santander. “Our goal is to help the thousands of people who use international payments services every day, and we will be adding more currencies and destinations in the coming months.”

Botín told the Financial Times that she was particularly keen to encourage the project — which took two years to develop — after seeing her son using a rival service to rapidly transfer money into Spain, adding that the Santander group aims to eventually make OnePay FX available as a standalone app that could be used by customers at other banks.

OnePay FX is built on xCurrent, Ripple’s enterprise software solution for cross-border interbank payments with end-to-end tracking. The xCurrent platform allows banks to message each other in real-time to confirm payment details before initiating a transaction, and to confirm delivery once it settles.

With xCurrent, Ripple wants to offer a flexible, real-time, cross-currency settlement solution that enables banks to differentiate themselves by offering new cross-border payments services while lowering their total cost of settlement. “The solution is specifically designed to meet the needs of banks by fitting within their existing risk, compliance and information security frameworks,” notes a Ripple solution outline. “Ripple’s software is installed within the bank’s infrastructure and is built to interface with the bank’s systems.”

“Ripple’s products, including xCurrent, help financial institutions across the globe enhance their customer experience by making the global movement of money more fluid,” said senior Ripple VP Marcus Treacher. “With OnePay FX, Santander customers in can now send payments across borders in a fast and simple way.”

xCurrent, is built around an open, neutral protocol, Interledger Protocol (ILP), which enables interoperation between different ledgers and networks. According to Ripple, xCurrent offers a cryptographically secure, end-to-end payment flow with transaction immutability and information redundancy.

“OnePay FX uses blockchain-based technology to provide a fast, simple and secure way to transfer money internationally — offering value, transparency, and the trust and service customers expect from a bank like Santander,” continued Botín. “From today, customers in the U.K. can use OnePay to transfer money across Europe and to the U.S. In Spain, customers can transfer to the U.K. and U.S., while customers in Brazil and Poland can transfer to the U.K.”

In a 2015 paper titled “The Fintech 2.0 Paper: Rebooting financial services,” Santander Innoventures, the $200 million fintech venture capital fund of Santander Group, issued “a call to action to banks, financial institutions and financial technology (fintech) businesses to work together to undertake a fundamental ‘reboot’ of the core processes, systems and infrastructure of the banking industry.”

Santander Innoventures is an investor in Ripple. “Santander has long been an advocate for modernizing banking infrastructure,” said Mariano Belinky, managing partner of Santander InnoVentures, commenting on the announcement of the fund’s investment in Ripple. “We believe Ripple possesses the talent, technology and momentum to address many of these scenarios.”

In a 2016 pilot project, Santander U.K. tested Ripple’s blockchain technology for international payments. The iOS app used in the pilot project worked in connection with Apple Pay.

“Blockchain technology offers tremendous opportunities to improve the services we offer our customers, and the launch of Santander OnePay FX is the first of many potential applications,” concluded Botín. According to Ripple, frictions in global payments will be eliminated as more financial institutions like Santander adopt and build upon Ripple solutions.

This article originally appeared on Bitcoin Magazine.

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BitPay Raises $40M in Series B Funding to Expand into Emerging Asian Markets

While the price of bitcoin continues to loom around the $7,000 range, Bitcoin payments seem to be holding strong in various parts of the world. In particular, emerging markets in Asia looking to facilitate low-cost payment solutions for cross-border commerce are benefiting from cryptocurrency transactions.

This has become apparent as BitPay, the largest global blockchain payment provider, just closed its $40 million extended Series B funding round. Notable new investors include Menlo Ventures, along with a number of investors based in Asia like Capital Nine, an Asian fintech corporation. Other participants from the region include Christopher Klaus, the founder of Internet Security Systems (ISS), and Alvin Liu, co-founder of Tencent.

To date, BitPay has raised a total of over $70 million in capital. In 2014, BitPay raised $30 million in its Series A round from investors including Index Ventures, Founders Fund, Felicis Ventures, RRE Ventures and Sir Richard Branson.  

“BitPay had a record 2017 as we processed over $1 billion in bitcoin payments. Since then, we’ve brought on new investors who can help BitPay scale globally to meet customer demand,” said Stephen Pair, CEO of BitPay. “Our goals include key hires in engineering and regulatory licensing, as well as expansion into emerging markets in Asia — one of BitPay’s fastest-growing regions for transactions and wallet adoption.”

Aquiline Capital Partners initially led the Series B round but extended it due to increased investor demand.

“We were only planning to raise a $30 million round, but due to high demand, we extended the round to $40 million in January. Interestingly enough, this was also during the same time the price of bitcoin started to drop,” BitPay’s chief commercial officer, Sonny Singh, told Bitcoin Magazine. “Moreover, this was also the first time Menlo Ventures has ever made an institutional crypto investment.”

BitPay now joins the Menlo portfolio alongside leading companies such as Uber, Betterment, Roku, BlueVine and Warby Parker.

“We gravitated towards BitPay because we felt the company had identified a killer use for crypto in facilitating low cost payment solutions for cross-border commerce and B2B payments, which is a massive market poorly served by the existing payment rails,” said Tyler Sosin, a partner at Menlo Ventures, in a statement. “We are impressed with the company’s execution — it has demonstrated extremely efficient growth and a stickiness with merchants and consumers that is the hallmark of many great payment service providers.”

Why BitPay’s Funding Round Is So Impressive

The key factor behind the $70 million in capital raised has to do with the technology. Using Bitcoin as a form of payment, rather than as a trading asset, is revolutionizing B2B payments for cross-border commerce — particularly in Asia.

“Bitcoin’s popularity is spreading rapidly throughout Asia and BitPay has an opportunity to extend its technology solutions across Asia,” said Sam Lin, director of Capital Nine, in a statement. “BitPay’s cross-border payment solution helps businesses pay or receive international payments faster and more economically.”

Last month, BitPay announced a partnership with Bithumb, one of the world’s largest crypto exchanges. BitPay and Bithumb have since launched a blockchain-based, cross-border payment solution to help South Korean businesses pay and receive international payments in a faster and more cost-effective manner than traditional bank wires.

Bitcoin and Bitcoin Cash payments dramatically reduce the friction, cost and time of cross-border business-to-business payments. Businesses that select the BitPay solution pay a fee of 1 percent per transaction and receive the cross-border confirmation in one business day. The average bank wire to or from South Korea could take three to five business days and could cost approximately 4 percent, depending on the foreign exchange rates and each bank’s wire rates.

Moreover, the security behind Bitcoin payments is also impressive, as all transactions are recorded on the blockchain. This notion appealed to one of BitPay’s newest investors, the renowned security expert Christopher Klaus. Klaus founded Internet Security Systems (ISS) and turned it into one of the first large internet security companies, which was sold to IBM for $1.3 billion in 2006.

“Security is extremely important to the blockchain network and BitPay,” said Klaus, in a statement. “I have been watching the cryptocurrency space and believe BitPay is able to disrupt the financial services worldwide through payment processing and cross-border payments in large part because of the security built into blockchain.”

As a result of the technology provided by BitPay, hundreds of thousands of businesses around the world are now able to accept bitcoin payments. Popular brands like Microsoft, Newegg, Namecheap, Gyft, Takeaway.com and Virgin Galactic use BitPay. The BitPay Wallet consumer adoption is also growing, with a monthly average of more than $3 billion in transactions. And as more attention is focused on bitcoin as a form of payment, rather than an asset for trading, its value could increase dramatically in terms of revolutionizing payment systems.

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Newegg to Accept Bitcoin Payments from Canadian Customers

Newegg Inc., the online e-commerce site that is rivaling Amazon for sales in technical equipment and electronics, is expanding its payment options to include bitcoin for its customers in Canada.

Apparently unfazed by recent price volatility and citing “the increasing mainstream awareness of cryptocurrencies,” Newegg is showing its confidence in the future of the cryptocurrency by extending its current policy of accepting bitcoin payments from U.S. customers to Canadian customers.

BitPay manages Newegg’s bitcoin-related transactions in the U.S. and will now manage all Canadian bitcoin payments with what Newegg calls “the most powerful bitcoin API in the industry.”

BitPay’s CEO and co-founder, Stephen Pair, said in a news release:

“Newegg was an early e-commerce adopter of bitcoin, and that leap of faith the company took in 2014 put Newegg on the map as a bitcoin-friendly place for tech enthusiasts to shop.”

He added, “We’re seeing a lot of traction in Canada, and we’re happy to see Newegg extend its bitcoin payment option north of the border.”

Newegg uses BitPay’s API to create and manage invoices, manage bills, issue refunds and view merchant ledger entries. Newegg noted that “BitPay’s singular focus on building enterprise-grade merchant tools helped the company achieve 99.99% uptime — unrivaled reliability in the industry.”

Recently BitPay announced a partnership with the South Korean exchange Bithumb to enable businesses there to issue invoices in bitcoin.

Newegg, a California-based retailer, first started accepting bitcoin from American customers in August 2014 and has never looked back.

According to the company, bitcoin payments from the U.S. have represented “a small but growing stream of purchase transactions.”

“In 2014 Newegg was among the first major companies to offer customers a bitcoin payment option,” said Danny Lee, CEO of Newegg.

“Since that time the value of bitcoin has skyrocketed and customers holding bitcoin have considerably more purchasing power. We believe the time is right to broaden our acceptance of bitcoin to our customers in Canada.”

According to Newegg, it is the leading tech e-retailer in North America with customers in more than 50 countries in Europe, Asia, Latin America and the Middle East, and has more than 36 million registered users.

The company says it is consistently ranked as one of the best online shopping destinations and regularly earns industry-leading customer service ratings.

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Serverless Payments with Stripe and AWS Lambda

In this tutorial, we will build a serverless payment application with Stripe and AWS Lambda.

Try the Live Demo! The source code for both backend and frontend is available on GitHub.

Note that this is a bare-bones implementation and is not production ready.

What is Serverless?

When we say “serverless,” it doesn’t mean servers are no longer involved. It means that you no longer need to think about them.

Serverless is an approach that aims to eliminate the need to manage infrastructure by:

  • Using a managed FaaS compute service such as AWS Lambda, Webtask, Google Cloud Functions, and IBM OpenWhisk to execute code,
  • Leveraging third-party services and APIs, and
  • Applying serverless architectures and patterns.

By making use of third-party services, developers can build loosely coupled, scalable, and efficient architectures quickly. Instead of building things from scratch, we connect prefabricated parts together. Today, we can rely on an abundance of third party services for payments, email, analytics, and many more.

This ecosystem of services accelerates software development. We can focus more on our core value propositions instead of secondary capabilities such as email infrastructure and server maintenance.

Serverless frees the software developer from deployment concerns so you can move fast, iterate quickly, and scale.

Functions-as-a-Service (FaaS)

FaaS providers such as AWS Lambda offer a new kind of platform that lets you deploy and invoke ephemeral (short-lived) function processes via events to handle individual requests.

Ephemeral function processes are created when an input is received, and disappears after the code finishes executing. The platform handles the provisioning of instances, termination, monitoring, logging, and so on.

Think of Serverless functions as ‘MeeSeeks’ of cloud computing.

Meeseeks are creatures created to serve a singular purpose for which they will go to any length to fulfill. After they serve their purpose, they expire and vanish into the air.

– From the ‘Rick and Morty’ Wiki

Like MeeSeeks, function processes vanish once executed.

Capacity Planning in FaaS

With traditional deployments, you can over-provision and under-provision compute capacity. This is especially true when your traffic load is unpredictable.

Capacity planning

When you over-provision, you’re wasting money on idle compute time. When you under-provision, you can’t adequately serve your users. Compute capacity is usually over-provisioned, and for good reason.

With FaaS, the provisioned capacity will always be equal to the actual usage. There is no under or over provisioning. Each request spawns an ephemeral function process that executes your function. The FaaS provider handles the horizontal scaling automatically. If your system needs to be processing 100 requests in parallel, the provider will spawn that many function invocations without any extra configuration on your part. You only pay for the compute capacity used.

PaaS vs. FaaS

The table below highlights the differences between PaaS and Faas:

Platform-as-a-Service (PaaS) Function-as-a-Service (FaaS)
Startup time Starts in minutes Starts in milliseconds
Running time Runs 24 / 7 Runs when processing an incoming request
Cost Monthly billing cycles Pay for usage, in invocations and duration
Unit of code Monolithic app Single-purpose, self-contained functions

In summary, FaaS providers offers developers the ability to build services that react to events, that auto-scale, that you pay for per-execution, and that take advantage of a larger ecosystem of third-party services.

Prerequisites

If you’d like to follow along, make sure you’ve completed the following steps.

1. Stripe

Stripe is a platform for handling online payments. Make sure that you’ve signed up for Stripe, and access your dashboard.

Your Stripe API dashboard

Toggle the Test mode and obtain the following from the API dashboard:

  • Your publishable API key
  • Your secret API key

We need both keys for our application. The publishable API key is used to tokenize customer cards, and the secret API key is used to process charges via the Stripe API.

2. Serverless

The Serverless framework (serverless) is a Node.js command-line interface (CLI) that helps you develop and deploy your serverless functions, along with the infrastructure resources they require.

The Serverless framework

serverless makes it easy to organize all the relevant resources your application needs in order to run. Write your function code, add event triggers, and deploy it with the help of serverless to the FaaS provider of your choice. Functions are automatically deployed and events are compiled into the syntax your FaaS provider understands.

serverless is provider and runtime agnostic, so you are free to use any of the supported FaaS providers and languages.

Install the serverless node module with npm or yarn. In your terminal, do:

> yarn global add serverless

Let’s check that serverless has been installed:

> serverless --version
1.13.2

3. Amazon Web Services (AWS)

We’ll be using AWS as our FaaS provider. If you haven’t already, sign up for an AWS account.

The next thing we need to do is to create an AWS user which has administrative access to your account. This lets the Serverless Framework configure the services in your AWS account.

  1. Login to your AWS account
  2. Go to the Identity & Access Management (IAM) page

  1. Click on the Users sidebar link
  2. Click on the Add user button
  3. Enter serverless-admin, tick the Programmatic access Access type checkbox, and click Next:Permissions

  1. Click Attach existing policies directly, tick Administrator Access, and click Next: Review

  1. Review your choices, then click Create user

  1. Save the Access key ID and Secret access key of the newly created user

Done! We’ve now created a user which can perform actions in our AWS account on our behalf (thanks to the Administrator Access policy).

Finally, we’ll pass the user’s API Key & Secret to serverless. With the serverlessframework installed on your machine, do:

serverless config credentials --provider aws --key <your_aws_key> --secret <your_aws_secret>

4. Yarn

We use yarn in place of npm.

Hands-On

Using card information with Stripe is a two-step process:

  1. Securely collect payment information using tokenization (Performed in the Frontend using the Stripe publishable API key)
  2. Use the payment information in a charge request or save it for later (Performed in the Backend using the Stripe secret API key)

When a user enters their payment information on the Stripe Checkout embeddable form, client-side tokenization occurs.

Client-side tokenization is the method Stripe uses to collect card information directly from your customers in a secure manner. During this process, a token representing this information is returned to your backend server for use in a charge request (or to save the card details for later use). Tokens can only be used once and expire within a few minutes.

Tokenization ensures that no sensitive card data ever needs to touch your server so your integration can operate in a PCI compliant way. If any card data were to pass through or be stored on your server, you would be responsible for any PCI DSS guidelines and audits that are required.

Frontend Application

Frontend

The frontend is responsible for securely collecting card information from your customers. It’s written in Next.js and React.

Below is the PayButton component that is core to our payments flow.

import fetch from 'isomorphic-unfetch';
import PropTypes from 'prop-types';
import React from 'react';
import StripeCheckout from 'react-stripe-checkout'; import config from '../config'; class PayButton extends React.Component { constructor(props) { super(props); this.onToken = this.onToken.bind(this); } async onToken(token) { // On a successful tokenization request, const res = await fetch(config.stripe.apiUrl, { // POST to our backend server with the token and charge details method: 'POST', body: JSON.stringify({ token, charge: { amount: this.props.amount, currency: config.stripe.currency, }, }), }); const data = await res.json(); console.log('onToken'); console.log(data); } render() { return ( <StripeCheckout name="Serverless Stripe Store Inc." token={this.onToken} amount={this.props.amount} currency={config.stripe.currency} stripeKey={config.stripe.apiKey} // Stripe publishable API Key allowRememberMe={false} /> ); }
} PayButton.propTypes = { amount: PropTypes.number.isRequired,
}; export default PayButton;

After a successful tokenization request to the Stripe API, we make a POST request containing the token and payment details to a URL where our backend lives.

Backend Application

The token returned by our frontend is used by our backend to process the actual charge (through a Stripe API call.)

Our serverless ‘nanoservice’ is composed of single-purpose, granular functions. The Serverless framework uses a DSL that describes the shape of our services. Take a look at the serverless.yml which describes our project:

# Serverless.yml is the configuration the CLI
# uses to deploy your code to your provider of choice
service: serverless-stripe-backend # Configuration variables
custom: secrets: ${file(secrets.json)} # The `provider` block defines where your service will be deployed
provider: name: aws runtime: nodejs6.10 stage: dev profile: personal region: ap-southeast-1 environment: STRIPE_SECRET_KEY: ${self:custom.secrets.stripeSecretKey} # Stripe secret API key # The `functions` block defines what code to deploy
functions: createCharge: handler: functions/createCharge.handler # The `events` block defines how to trigger the handler.createCharge code events: - http: path: charges method: post cors: true

Our service has a single function createCharge whose source code is in /functions/createCharge.js and can be triggered by HTTP POST events to the/charges route.

The three key abstractions of serverless applications are Functions, Events, and Resources:

  • Functions are pieces of single-purpose code deployed in the cloud. When deciding what should go in a function, think of the Single Responsibility Principle or the Unix philosophy.
  • Events are set up to trigger your functions. On AWS, these events include infrastructure events such as an AWS API Gateway HTTP endpoint request (useful for HTTP APIs) and an AWS S3 bucket upload (useful for file uploads).
  • Resources are infrastructure components which your Functions communicate with. Because functions are stateless, we need some way to capture and store state (in an AWS DynamoDB table or an AWS S3 bucket for example.)

Next, let’s look at the createCharge function. This is the function that takes in a Stripe token and uses it to create a Stripe charge:

const stripe = require('stripe')(process.env.STRIPE_SECRET_KEY); module.exports.handler = (event, context, callback) => { const requestBody = JSON.parse(event.body); const token = requestBody.token.id; const amount = requestBody.charge.amount; const currency = requestBody.charge.currency; return stripe.charges.create({ // Create Stripe charge with token amount, currency, description: 'Serverless Stripe Test charge', source: token, }) .then((charge) => { // Success response const response = { statusCode: 200, headers: { 'Access-Control-Allow-Origin': '*', }, body: JSON.stringify({ message: `Charge processed succesfully!`, charge, }), }; callback(null, response); }) .catch((err) => { // Error response const response = { statusCode: 500, headers: { 'Access-Control-Allow-Origin': '*', }, body: JSON.stringify({ error: err.message, }), }; callback(null, response); })
};

An AWS Lambda (Node.js) handler function takes takes three arguments:

  • event – AWS Lambda uses this parameter to pass in event data to the handler.
  • context – AWS Lambda uses this parameter to provide your handler the runtime information of the Lambda function that is executing.
  • callback – You can use the optional callback to return information to the caller, otherwise return value is null.

In the createCharge function, we retrieve the payment details from the HTTP request body and call Stripe’s API to process the charge. We then return an HTTP response containing the created charge object.

Deployment

To deploy our serverless application to AWS, do:

git clone git@github.com:yosriady/serverless-stripe-backend.git
cd serverless-stripe-backend
serverless deploy

The serverless CLI will translate serverless.yml into a provider specific language such as AWS CloudFormation and set up your cloud infrastructure.

$ serverless deploy
Serverless: Packaging service...
Serverless: Uploading CloudFormation file to S3...
Serverless: Uploading artifacts...
Serverless: Uploading service .zip file to S3 (18.17 MB)...
Serverless: Updating Stack...
Serverless: Checking Stack update progress...
..............
Serverless: Stack update finished...
Service Information
service: serverless-stripe-backend
stage: dev
region: ap-southeast-1
api keys: None
endpoints: POST - https://kpygs0yhak.execute-api.ap-southeast-1.amazonaws.com/dev/charges
functions: createCharge: serverless-stripe-backend-dev-createCharge
Serverless: Removing old service versions...

Since we’ve specified an HTTP event trigger for our createCharge function in serverless.yml, we get a URL endpoint https://kpygs0yhak.execute-api.ap-southeast-1.amazonaws.com/dev/charges we can use to trigger our function. Behind the scenes, serverless created an AWS API Gateway resource and a mapping between our HTTP route and lambda function. This is the backend url that our frontend application communicates with.

Testing

Since each our functions only does one thing, it’s a unit and by definition unit testable! Check out createCharge.test.js:

const LambdaTester = require('lambda-tester');
const nock = require('nock'); const createCharge = require('../../functions/createCharge'); const testJsonBody = '{"token":{"id":"tok_1AXRROEFsRbbjUA2h7qgz1nD","object":"token","card":{"id":"card_1AXRROEFsRbbjUA2qznZttIr","object":"card","address_city":null,"address_country":null,"address_line1":null,"address_line1_check":null,"address_line2":null,"address_state":null,"address_zip":null,"address_zip_check":null,"brand":"Visa","country":"US","cvc_check":"pass","dynamic_last4":null,"exp_month":12,"exp_year":2020,"funding":"credit","last4":"4242","metadata":{},"name":"test@email.com","tokenization_method":null},"client_ip":"103.224.167.33","created":1498123050,"email":"test@email.com","livemode":false,"type":"card","used":false},"charge":{"amount":200,"currency":"USD"}}';
const testEvent = { body: testJsonBody
}; beforeAll(() => nock.disableNetConnect());
afterAll(() => nock.enableNetConnect()); describe('createCharge', () => { describe('success cases', () => { beforeEach(() => { nock('https://api.stripe.com/v1') .post('/charges') .reply(200, { success: true }); }); test('returns response', () => { return LambdaTester(createCharge.handler)
.event(testEvent)
.expectResult((data) => { expect(data).toMatchSnapshot(); }); }); }); describe('error cases', () => { beforeEach(() => { nock('https://api.stripe.com/v1') .post('/charges') .reply(500); }); test('returns response', () => { return LambdaTester(createCharge.handler) .event(testEvent) .expectResult((data) => { expect(data).toMatchSnapshot(); }); }); });
});

We use the Jest test framework, lambda-tester to invoke our functions locally, and nock to stub external APIs. We use Jest snapshots to simplify the process of generating test cases.

Summary

Congratulations! You’ve gone serverless!

We’ve built a scalable payments system by leveraging an external compute service and third-party APIs. Along the way, we learned:

  • What serverless is about, and why it’s compelling
  • How a payment flow works with Stripe on both frontend and backend
  • The basic abstractions of serverless: Events, Functions, Resources
  • How to create a Serverless backend with Node.js and AWS Lambda
  • How to set up event triggers for functions
  • How to deploy functions
  • How to write and run unit tests

Thank you for reading!

Source Code

Feel free to clone and check out the source code:

  • Backend written in Serverless and AWS Lambda.
  • Frontend written in Next.js and React.

Pull requests and feedback are most welcome.

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Bitcoin Transaction Fees Are Pretty Low Right Now: Here’s Why

The relatively high transaction fees on the Bitcoin network were a major topic of conversation last year, but these fees have been plummeting so far in 2018. According to data from CoinMetrics, bitcoin miners are now collecting less than a third of the value they were collecting in fees at one point in December 2017.

So what’s causing this decline in the costs of on-chain transactions? Is it as simple as declining demand leading to a lower price? Are there other factors at play? Let’s take a closer look.

The Simple Explanation for Lower Fees

In 2017, the congestion on the Bitcoin blockchain led to a bidding war over block space, especially as speculative interest in bitcoin continued to rise over the course of the year.

According to CoinMetrics, bitcoin transaction fees started 2017 at an average of $0.30, but they eventually peaked at over $40 in December. As the price tripled during a month-long stretch from mid-November to mid-December, those who were purchasing bitcoin for the first time simply did not care about how much they were paying in on-chain transaction fees.

coinmetrics1

This chart from CoinMetrics shows the bitcoin price and average transaction fee.

As the speculative frenzy around the bitcoin asset has calmed a bit in 2018, the number of transactions broadcast to the Bitcoin network has also declined. According to data from Blockchain, the number of transactions added to the mempool per second has declined by nearly 50 percent from the December highs.

tx rate

The number of transactions added to the mempool per second is at the same levels as May 2016. Data via Blockchain.info.

It’s possible that bitcoin fees are now lower simply because the FOMO around getting some bitcoin before the price goes to the moon has subsided, leading to a decline in demand for block space.

Since transaction fees are denominated in bitcoin, a falling bitcoin price can also mean a decrease in U.S.-dollar denominated transaction fees.

coinmetrics2

This chart from CoinMetrics shows the level of correlation between transaction fees denominated in bitcoin and U.S. dollars.

Other Factors at Play?

Although the reasoning behind the drop in transaction fees seems pretty straightforward, there could also be other factors at play.

One explanation that has been floated on social media is that a large amount of new hashing power has come online, which has increased the frequency at which blocks are found. This would effectively increase the capacity of the network.

The average number of blocks mined per day should be around 144, based on the 10-minute block time target, but around 164 blocks were mined per day in the month of January 2018. However, this is not a new phenomenon.

As BitGo engineer Mark Erhardt recently pointed out on Twitter, Bitcoin has long operated at a rate faster than 10 blocks per minute due to the fact that adjustments to the mining difficulty are only made every two weeks. As more hashpower is added to the Bitcoin network during nearly every difficulty adjustment period, the pace at which blocks are mined increases until the difficulty is eventually readjusted once again.

Having said that, the 164 blocks per day number from January 2018 is a bit more than normal, and 162 blocks were mined per day in December 2017 as well. For 2017 as a whole, the average number of blocks mined per day was around 153, which is near the historical average per day.

So, if an extra 10 blocks were being mined per day in December 2017 and January 2018 (as compared to the all-time average), then there was effectively an increase in the supply of block space by more than 600MB over that time, as blocks have been a little over 1MB in size each.

In addition to the increased supply of block space by way of more blocks mined on a daily basis, there have also been a number of efficiency improvements enabled in terms of how the blockchain is used by those who wish to create transactions. Bitcoin writer and researcher David Harding recently wrote on this topic on the Bitcoin Wiki. Some methods of cutting down on transactions fees mentioned by Harding included transaction batching, Segregated Witness (SegWit), dynamic fee estimation and UTXO consolidation.

Transaction batching is when a payment is sent to multiple recipients via one on-chain transaction. Data made available by outputs.today appears to show an increase in the use of batching over the course of 2017, including an noticable increase starting in late November 2017.

Another article written by Harding indicates this technique could enable transaction fee savings of up to 80 percent.

Another way to lower transaction fees for everyone is to use SegWit, which is a soft fork that has enabled an increase to the block size limit (and thus the supply of block space). That increase to the block size limit is only enabled if users take advantage of the feature. At press time, around 14 percent of transactions were using SegWit.

While there was an increase in SegWit transactions over the weekend, this appears to have been caused by users taking advantage of the currently low fees to move their funds to SegWit addresses.

In addition to batching and SegWit, other methods of using the blockchain more efficiently, such as UTXO consolidation and dynamic fee estimation, may also be leading to generally lower transaction fees.

Some Bitcoin Wallets Haven’t Gotten the Memo

While fees paid on the network have clearly declined, some bitcoin wallets have not taken advantage of the new state of the transaction fee market.

Relatively new website transactionfee.info allows bitcoin users to check the price efficiency of any recent transaction. Users of the site can also let others know which wallet, exchange or other bitcoin service was used to generate the transaction. This allows visitors to get a better idea of which services are best at estimating an efficient transaction fee price.

On the homepage, digital asset brokerage Coinbase is often listen as a sender of transactions that could have been sent for an 80 to 90 percent lower fee.

According to the site, other bitcoin services that routinely use much larger fees than what is necessary include ShapeShift, Xapo, Electrum and Gemini.

Coinbase has received some criticism due to the fact that the extremely popular bitcoin custodian has not implemented batching or SegWit. Having said that, Coinbase CEO Brian Armstrong recently tweeted that the company is working on both methods of lowering fees for their customers.

Putting all of this information together, it becomes easier to understand why bitcoin transaction fees have been falling so quickly this year. However, the large number of different variables at play make it difficult to say there is one reason that fees have declined. As these variables change again in the future, fees could rise rather quickly once again.

Original Link

Episode 147: Okay Google, manage my home

At CES I made the decision to traumatize my family and swap out the Amazon Echo for the Google Home despite Wi-Fi challenges. We kick off this week’s show explaining why, and discussing some new tricks the Home has. From there, we hit the partnership between Maersk and IBM to create a digitized supply chain using the blockchain. Then we talk about a startup that might help with that effort. Add in news bits ranging from BMW acquiring ParkMobile to a new low power wide area network module that can last 15 years, and we round out the first half of the show. We also answer a listener question about radiation from IoT devices.

Port of Algeciras, Spain. Image courtesy of Maersk.

Our guest takes us back to the topic of IoT networks and the future 5G holds for the internet of things. Chetan Sharma is the founder of Chetan Sharma Consulting, and is a widely respected telecom analyst. He talks about what networks are likely to succeed and why, and then also digs into his thoughts on how we should rethink competition and M&A in the digital economy. He also asks if it’s too late to regulate anticompetitive data practices in the U.S. I hope you enjoy the show.

Hosts: Stacey Higginbotham and Kevin Tofel
Guest: Chetan Sharma of Chetan Sharma Consulting
Sponsors: PointCentral and CBT Nuggets

  • The Google Home has a secret API
  • IBM and Maersk ask what blockchain can do for shipping
  • What 5G means for IoT and which flavor arrives first
  • Things to know when picking a LPWAN
  • Our anticompetitive regime is built for the 20th century, not the 21st

Original Link

Grab nabs Paytm engineering head to be new payments CTO

GrabPay CTO Vikas Agrawal. Photo credit: Grab.

Grab has appointed Vikas Agrawal as chief technology officer (CTO) of its mobile payments unit GrabPay. His arrival is the latest in a string of hires and acquisitions that the company has made as it moves beyond ride-hailing to build its credentials as a payments platform.

Agrawal was previously a senior vice president at Indian digital payments firm Paytm, where he led a team of 200 engineers. Prior to joining Paytm in February 2016, he was co-founder and CTO at ecommerce startup Fashionara.

He will be based in Bangalore, where Grab has a research and development facility.

Grab group CTO Theo Vassilakis highlighted Agrawal’s tech leadership at Paytm at a time when India has been attempting to reduce its reliance on cash.

“Vikas has steered some of the world’s largest epayments platforms through rapid growth, including during the critical time of 2016’s demonetization of higher value banknotes in India,” he said. “We believe Southeast Asia has the same potential for epayments in the next 12 months.”

Pushing payments

Grab has been investing heavily in the development of its mobile wallet of late, as it seeks to diversify beyond its core ride-hailing business.

Over the past year it has introduced GrabPay Credits – an in-app currency that users can top-up with to pay for rides, or transfer to each other – and GrabRewards, a loyalty scheme which recently paired up with Singapore Airlines’ frequent flyer program.

More recently, Grab has rolled out QR code mobile payments in shops, restaurants, and hawker centers in Singapore, representing its first major play outside of a transportation context. The company said it wants to extend GrabPay for merchants to other Southeast Asian markets next year.

See: Grab launches hawker center cashless payments as part of big play beyond transport

This new emphasis on payments has been driven by M&A – such as Grab’s US$100 million-plus acquisition of Indonesian ecommerce platform Kudo earlier this year – and a flurry of hires.

Former Euronet senior executive Jason Thompson became head of GrabPay in April, while Ongki Kurniawan – previously Line’s national manager in Indonesia – joined as managing director for GrabPay in the country in September. Vassilakis was appointed group CTO last month after serving as development manager for Microsoft’s Azure cloud service in Seattle.

There has been something of a revolving door within Grab’s engineering function as far as executive roles are concerned. Prior to the arrival of Vassilakis, the group CTO post had apparently been vacant since the departure of Facebook alumnus Wei Zhu in 2015. Wei later sued Grab in a dispute over stock options. Grab’s former vice president of engineering Arul Kumaravel quit in August due to personal reasons.

Editing by Steven Millward

(And yes, we’re serious about ethics and transparency. More information here.)

About Jack

Sweltering in Singapore. Email: jack@techinasia.com Twitter: @jacknwellis

Original Link

Sea’s a steady ship, but shares drop after first quarterly results as a public company

Sea chairman and CEO Forrest Li rings the NYSE opening bell. Photo credit: NYSE.

Sea has announced growth in its revenue, gross merchandise volume, and gross billings during Q3 2017. Its net loss has widened, however, and its share price on the New York Stock Exchange (NYSE) continued to fall during after-hours trading.

The Southeast Asian company, the most valuable to list on the exchange in recent memory, released its first quarterly financial results since its US$844 million IPO last month.

Sea grew its ecommerce, payments, and gaming segments. The group’s total GAAP-recognized revenue plus non-GAAP deferred revenue from its Garena digital entertainment business and non-GAAP ecommerce commission income from Shopee was US$151.7 million for the quarter. This translates into 73 percent growth in revenue year-on-year, and 21 percent growth over the preceding three months.

Digital payments platform AirPay reported a gross transaction value of US$448 million, representing year-on-year growth of 172 percent and 29 percent growth on the previous quarter.

NB: Financial figures are unaudited. 1: DE = digital entertainment. EC = ecommerce. 2: DE gross billings = digital entertainment GAAP revenue plus change in digital entertainment deferred revenue. Image credit: Sea.

Speaking today during a conference call, Sea CEO Forrest Li said that mobile drove Garena’s performance during the quarter. “More than half of our billings came from mobile games,” he said. “This is a new milestone as mobile use continues to grow across the region.”

Li attributed Shopee’s growth to its asset-light marketplace model, which he said was perfectly suited to the logistical practicalities of Southeast Asia. “There’s a strong network effect – the more sellers we have, the more buyers we attract, and that attracts even more sellers. It is a virtuous cycle of growth. It means Shopee is now part of the everyday life of our consumers… Shopee is equivalent to 0.15 percent of the region’s GDP.”

He also underlined Shopee’s claim to be the biggest ecommerce player in the region. “[Shopee] is over twice the size of its nearest competitor [by revenue],” he said. “Also in terms of GMV, we’re close to one-and-a-half times the size of our nearest competitor.”

The unnamed rival is presumably Lazada, which was acquired by Alibaba in April 2016. Speaking at Tech in Asia Jakarta 2017, Lazada CEO Max Bittner argued that publicly held Shopee “will have a harder time continuously raising money… At some point, public market investors expect improvements in profitability. The luxury of being [Lazada] is we’re not exposed to that scrutiny.”

There was some indication of that exposure today as Sea’s share price tumbled, from US$15.70 at the start of the day to US$14.78 by the close of the market. It appears that some investors may have been spooked in advance of the company’s earnings release. After-hours trading saw a further decline in share price, influenced by Sea’s US$127 million adjusted net loss for the quarter – more than twice the US$60.2 million loss it reported in Q3 2016.

NB: Financial figures are unaudited. 1: Excludes stock-based compensation. Image credit: Sea.

Costs were also higher year-on-year, particularly with regards to sales and marketing expenses. Speaking on the conference call, Sea group president Nick Nash said that the higher spend is critical for the company’s forward plans.

“We spent more in Q3 as a percentage of GMV than in Q2, but by design, and in line with our budgets.”

“Some of our markets have developed into a two-horse race faster than we expected, and we can tip the market in our favor” through additional marketing investment, he said.

Also, with Shopee now claiming ecommerce market leadership in Indonesia and Taiwan, Nash explained that it makes sense to focus more sales and marketing effort on where the company sees its major opportunities for future growth – namely the Philippines, Thailand, and Vietnam.

Nash also underlined some of the difficulties that Sea faces with completing orders and how this can result in higher costs.

“Our key pain point is in payments – that’s not just for us, that’s a regional issue.”

See: How Shopee plans to reign supreme in Southeast Asia’s fashion ecommerce scene

The Singapore-based company combines financial measures recognized under US accounting standards – “generally accepted accounting principles,” or GAAP – with certain non-GAAP figures to give an overall picture of its performance. Sea says that it and other gaming and ecommerce companies do this due to the nature of their online businesses, where a substantial amount of revenue is deferred and user numbers and trends are seen as important indicators.

Looking more closely at Shopee:

  • Gross merchandise volume (GMV), the total volume of sales over a given period) grew 219 percent year-on-year and 30 percent quarter-on-quarter to hit US$1.06 billion.
  • Gross orders increased 204 percent between Q3 2016 and Q3 2017, and 45 percent quarter-on-quarter to reach 65.9 million.
  • Ecommerce monetization – including GAAP revenue plus non-GAAP income from sales commissions – was US$5.7 million for the quarter, up 111 percent on Q2 2017.
  • Average monthly active buyers grew from 1.7 million in Q3 2016 to 5.9 million in Q3 2017 – up 247 percent year-over-year.
  • There were 3.7 monthly orders per active buyer with an average order value of US$16.20.
  • More than 93 percent of Shopee orders in Q3 2017 were transacted through its mobile app.

As for Garena, Sea’s gaming and digital entertainment unit:

  • Digital entertainment gross billings – comprising GAAP revenue plus the change in digital entertainment-related deferred revenue – increased 62 percent from US$83.2 million in Q3 2016 to US$135 million in Q3 2017.
  • Quarterly active users hit 69 million, representing 54 percent year-on-year growth. There were 42.7 million monthly active users in the last month of Q3 2017, reflecting a 61 percent increase year-on-year. Quarterly paying users grew 38 percent year-on-year to 6.5 million.

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Singaporean payments startup shifts to business clients with $1m fundraise

Copyright: <a href='https://www.123rf.com/profile_racorn'>racorn / 123RF Stock Photo</a>

Photo credit: racorn / 123RF.

Singaporean startup iPaymy has raised US$1 million in a seed round led by Beenext and Digital Garage’s investment arm, DG Incubation.

Starting out as a consumer-focused platform, iPaymy has since pivoted towards serving small and medium-sized enterprises (SMEs), providing a platform for them to use their credit cards rather than cash to pay for expenses like invoices, salaries, and taxes.

The startup’s first product was a payments platform that allowed individuals to pay monthly expenses using their credit card.

It’s just like if you go to a restaurant and charge the meal to your credit card.

“We launched a consumer business to help consumers earn lots of air miles by paying their rent with their credit card,” iPaymy co-founder and CEO Ethan Dobson tells Tech in Asia. “Organically, after a few months, we started hearing feedback from some of those consumer customers who said they run a small business, and it would be great if they could use the same solution there.”

That’s when the startup began working on its new offering, named iPaymy for Business. This platform allows SMEs to add payees and make both one-time and recurring payments using a credit card – even to payees that don’t typically accept such payments.

More than air miles

Small businesses can struggle to access traditional financing products, such as bank loans, that they typically rely on to cover operating expenses. They might not meet the lender’s criteria, or they might have an unsatisfactory or non-existent credit record. Even if they have a decent credit score, they likely face a motherload of paperwork, the need to put up other assets as collateral, and a weeks-long approval process if they apply for a loan.

Something that most Singaporean SMEs do have access to, though, is a credit card. If they have the ability to pay everyday outgoings on credit card, they can free up working capital for spending or investing elsewhere.

The problem is that plenty of payees – in a broad sense, including employees and landlords – don’t accept credit cards. Realizing this, iPaymy co-founders Dobson and Chrystie Dao-Szabo set out to find a solution.

Within the rails

Explaining how the model works, Dobson says that he considers iPaymy to be a tech-driven payments platform, rather than a financial intermediary.  

“We don’t actually touch the cash, by design,” he explains. “We want to work within the existing rails, so we work with various acquisition partners – Stripe being one of them.”

Chief business development officer Chrystie Dao-Szabo and chief executive officer Ethan Dobson, iPaymy’s co-founders. Photo credit: iPaymy.

The startup charges an SME’s credit card with funds settled to an iPaymy trust account. Recipients are then paid directly via a bank transfer from the trust account within four business days, after iPaymy has claimed its one-time, per-transaction fee and completed know-your-customer checks. The SME pays its credit card provider back as normal when its statement arrives at the end of the month.

“We don’t lend, we don’t take on risk in that way,” says Dobson. “It’s just like if you go to a restaurant and charge the meal to your credit card.”

SMEs think that going to the banks is the only way to get capital.

For more complicated payments, such as monthly salaries for a number of employees, business owners can upload a CSV file containing tabulated employee data to the iPaymy platform. The credit card is then charged and the KYC process takes place before iPaymy transfers the funds to the employees’ bank accounts.

There are a few other startups around offering similar solutions to iPaymy, such as fellow Singaporean company CardUp. However, Dobson thinks the biggest challenge facing iPaymy is awareness.

“We’re partners with a number of banks, but other banks are in a way our competitors, because SMEs think that going to the banks is the only way to get capital,” he says. “One of our main goals is to educate SMEs, and that task varies along a pretty big spectrum, from the mom-and-pop shop which is lower on financial sophistication scale, to folks all the way up at the top.”

Pivot, grow

Dobson says that the startup still maintains an extensive portfolio of individual customers for its original consumer solution. However, it is now dedicating all of its development and R&D resources to iPaymy for Business, which it sees as having more growth and scale potential.

In terms of the US$1 million seed funding it has just raised, iPaymy will be spending in three areas – product development, its go-to-market strategy, and potential regional expansion beyond Singapore.

For Dobson, having the expertise and experience of VC firms Beenext and DG Incubation on board is at least as valuable as the capital they’ve injected into iPaymy.

“They are the premier payments VCs in the region,” he says. “These guys know payments – Digital Garage has [payments provider] VeriTrans. Teru [Sato, founder] of Beenext built Beenos in Japan. Their network here is amazing, and in terms of series A and beyond, we’re very aligned on what our goals are. That’s such an enormous tailwind for the company.”

Dobson says that iPaymy is aiming to lock up a series A round by the middle of next year, with the next fundraise already attracting interest from “recognizable names.”

Original Link

India’s top payments app punches back at WhatsApp

Photo credit: Wikimedia.

Following recent incursions by Silicon Valley giants, India’s top payments app is fighting back.

Paytm, with 230 million registered users across the nation, is now rolling out messaging to combat WhatsApp’s upcoming send-money-to-your-buddy feature, which will make its global debut in the fast-growing Indian market. WhatsApp’s cash transfers are set to launch in December.

Google is another new rival for the Indian startup. In September, the firm unveiled a new app called Tez, launched first in India, as a new mobile payments option.

Paytm’s in-app chat is dubbed Inbox, reports The Hindu. “We have realised that besides making payments, our users and merchants also like to communicate with each other,” said Deepak Abbot, Paytm senior vice president, at yesterday’s launch. As well as messaging friends, users can send photos, videos, and their location – plus sending or requesting money.

Chats are encrypted end-to-end – just as they are on WhatsApp.

Money muscle

Amid a rise in smartphone usage across India, consumers are sent to spend US$9 billion on their phones this year – versus just US$1 billion two years ago, says Morgan Stanley.

Paytm’s messaging move is not without precedent. In China, Alibaba’s Alipay app has a tab for messaging where friends can send each other money, request payment, give “red envelope” gifts, and share coupons alongside the more usual fare, such as photo-sharing:

Photo credit: Tech in Asia.

Ant Financial, maker of Alipay, is a major investor in Paytm.

Thanks to the largesse of the Chinese tech giant as well as this year’s US$1.4 billion investment from Japan’s Softbank, Paytm has the cash and resources to fight back hard against the Silicon Valley interlopers.

See: SoftBank’s top 10 deals so far this year

Editing by Jack Ellis

(And yes, we’re serious about ethics and transparency. More information here.)

About Steven

Steven’s interested in ecommerce, mobile, smartphone adoption, gadgets, social media, transportation, and cars. If you have any tips or feedback, contact him on Twitter: @sirsteven

Original Link

Fintech startup Finja breaks new ground in Pakistan with $1.5m series A funding

Finja founders. Photo credit: Finja.

The catalyst for ecommerce and other internet businesses to flourish in China, India, and Southeast Asia is digital payments. This in turn has a multiplier effect on economic growth.

That’s why today’s announcement of US$1.5 million series A funding for Pakistani fintech startup Finja is notable. More so, because Swedish investment company Vostok led the round – the Pakistan startup ecosystem rarely hits headlines for attracting international investment. Dubai-headquartered Gray Mackenzie Engineering Services also participated in the round.

The ID card data is in Urdu, so we had to develop artificial intelligence to match data typed in English with names in Urdu.

Finja is giving a push to digital payments in Pakistan with its SimSim wallet. The Urdu version of the phrase “open sesame,” which opens a cave in the tale of Alibaba and the 40 Thieves, is Khulja simsim – so the name Finja SimSim doesn’t just refer to the sim card of a mobile phone. Coincidentally, Chinese tech giant Alibaba also got its name from the same tale.

SimSim is similarly out to open up a treasure trove in online business in Pakistan. Finja claims SimSim has been doubling its mobile wallets every month to notch up 80,000 accounts since it went live a few months ago. It has clocked transactions worth a total of US$14 million so far.

Finja partnered with Finca Microfinance Bank for regulatory clearance of its wallet. It ran a pilot of the SimSim wallet with the State Bank of Pakistan, which gave a go-ahead for its commercial launch in June this year. It is now connected with other banks and charges no transaction fees to focus on scaling up.

“Finja will start monetization this quarter with a loans marketplace,” co-founder Monis Rahman tells Tech in Asia. It has already piloted 100 loans delivered through its wallet, which can assess credit-worthiness by analyzing transaction data. An ecommerce marketplace, ticketing, mobile top-ups, and bill payments are other products planned around the wallet.

Nadra biometric ID with a twist

SimSim takes advantage of Nadra, a biometric citizen identity card that the Pakistan government has issued to almost its entire adult population, comprising around 60 percent of the total population of 207 million.

Using the identity card digitally is not as straightforward as it sounds. “The ID card data is in Urdu, so we had to develop artificial intelligence to match data typed in English with names in Urdu. There are several thousand permutations for many names,” explains Rahman.

But investing in the technology to do this is paying off. “Opening an account on SimSim takes less than a minute with real-time Nadra identity verification through a mobile phone,” says Finja in a statement.

Apart from the months it took for regulatory clearance of the wallet, integrating it with banks hasn’t been easy. “The snail’s pace with which most banks operate when it comes to innovation has been a challenge, but our rapid execution speed as a fintech startup is a huge advantage as we iterate and launch new features quickly,” says Rahman.

See: Paytm founder prepares for his next pivot, which could be the biggest yet

“We’re pleased with the execution of the team in this large untapped market with a high barrier to entry,” says David Nangle, partner at Vostok Emerging Finance. “This financing round by international investors is a vote of confidence in the potential of the Pakistani market,” adds Rahman.

This is a follow-on investment by Vostok, which had invested in Finja through a convertible note last year.

Original Link

Grab users in Indonesia better carry cash as the ride-hailing firm stops ewallet top ups

Photo credit: Grab.

The Indonesian branch of ride-hailing firm Grab is the latest big startup in the country to be forced to deactivate a feature which lets users transfer credit onto in-app ewallets. Grab informed its users about this today on its blog.  GrabPay wallet users can still spend the amount they have already stored.  Some other cashless payment options like credit card are still available. But if you don’t own a credit card or any of the other options, you’re back to paying with cash for each ride.

“Due to GrabPay’s success and in order to extend our services to all Indonesians, we are having intensive discussions with Bank Indonesia (Indonesia’s central bank) to obtain the required licenses,” Ongki Kurniawan, managing director of GrabPay Indonesia told Tech in Asia.

Grab is not the only startup waiting for license approval from the central bank. Ecommerce sites like Tokopedia, Bukalapak, and Shopee have already stopped top-ups to their respective wallets after BI began cracking down on those firms operating ewallets without the right license. At Tokopedia, this has led to the delay of a collaboration with Uber, which sought to introduce TokoCash as a cashless payment option on Uber’s app.

Grab introduced top-ups to its GrabPay wallet at the end of last year. The feature is meant to make it easier for users to pay for rides. Instead of handling cash and waiting for the driver to give change, the correct amount is simply transferred from one app to the other.

Grab competitor Go-Jek’s wallet is not affected by the freeze. Go-Jek already owns an emoney license after acquiring payments company MVCommerce last year.

Editing by Judith Balea

(And yes, we’re serious about ethics and transparency. More information here.)

About Nadine

Startups, smartphones, sci-fi.

Original Link

5 Indonesian fintech startups to watch in 2018

Photo credit: Unsplash.

Indonesia’s startup scene is a hotbed of innovation, and it’s attracting the attention of corporates. This is especially pronounced in the fintech industry. Traditional institutions are recognizing the importance of going digital, and are drawn towards working together with startups to fulfill the changing demands and needs of their consumers..

Collaboration is the theme of fintech conference Finspire 2017. Taking place on October 19 at Soehanna Hall in Jakarta, fintech organizations, financial institutions, regulators and digital experts will come together to share their knowledge, ideas, and insights on the financial services ecosystem.

The event is open to investors, founders, students, aspiring entrepreneurs, and startup communities. For fintech enthusiasts eager to get a glimpse of what’s in store, here’s a roundup of five up-and-coming fintech startups that have caught our eye:

Jurnal-Features

Photo credit: Jurnal

Jurnal is a software provider that helps businesses save time, eliminate unnecessary entries and simplify the process for both enterprise owners and accountants.

The cloud-based accounting software offers features like instant report generation and affordable monthly subscription fees. With 57 million SMEs spread out across the country, Jurnal has a huge market to tap, and it’s seeking expansion through partnering up with companies and government institutions.

Jurnal’s most recent funding was in early 2016, where it raised an undisclosed series A round of investment from East Ventures, Fenox VC, and angel investor Budi Setiadharma. Earlier this year, it participated in Google’s Launchpad Accelerator program in San Francisco.

Photo credit: Cashlez

Targeted at local SMEs, mobile point-of-sale startup Cashlez solves key pain points that hinder these businesses from adopting cashless payment systems. Traditional electronic data capture (EDC) machines require a strong internet connection to process card payments, yet the lack of stable internet is a common problem in many areas across Indonesia. EDCs also require high maintenance costs which means that these machines are limited to high-end businesses.

Through Cashlez’s wireless card readers, local businesses have a chance at using cost-efficient digital payment solutions. A large unmet demand offers huge potential for growth; a significant portion of the 57 million micro, small and medium businesses across the country have yet to adopt cashless payment systems. And while there are 17 million credit cards and 113 million debit cards across the country, there are just about 1 million point-of-sales terminals for card transactions. Cashlez seeks to partner up with banks to distribute its solution.

In mid-July this year, Cashlez announced a US$2 million funding led by Mandiri Capital Indonesia (MCI). It also received funding from individuals and GAN Kapital.

Photo credit: Tech in Asia ID

Snapping a shot of your face and ID card and uploading that along with some personal data may not be the usual process for a loan registration – but that’s all that’s required for users of TunaiKita, a mobile-app-based loan service..

Formed through a joint venture between Wecash Southeast Asia, PT Kresna Usaha Kreatif, and PT JAS Kapital, TunaiKita combines finance, mobile technology, big data and machine learning to address the need for unsecured loans in Indonesia. The country’s growing middle class requires a more efficient approach for helping the underbanked in their loan application process while weeding out potential fraud cases, yet current methods for credit checking aren’t scalable.

TunaiKita steps in with technologies like its Loan Underwriting System, where debtors are evaluated through factors like their timeliness in paying bills and reasons for taking up a loan. Striking up collaborations with financial institutions for online lending partnerships and launching additional loan products are in the works for TunaiKita, as the company strives towards its goal of lending US$3 million by the end of 2017.

A Payfazz agent. Photo credit: Payfazz.

Over half of Indonesia’s population (64 percent) is unbanked – yet 50 percent of the unbanked adult population currently owns a smartphone. Thanks to Payfazz, locals using a smartphone will now have access to mobile banking services.

Payfazz’s digital wallet services let users conduct online transactions for their everyday transactions – from getting pre-paid phone credit to paying for electricity bills. Users hand over cash payments to the startup’s network of mobile bank agents, who complete payments and transfers on behalf of the user.

Similar to how bank branches are peppered all across a city, Payfazz aims to build up an extensive network of agents who can help users to complete transactions – a critical solution in a country where bank branches operate beyond capacity to serve thousands of customers.

Just recently, Payfazz graduated from the summer batch of Y Combinator (it’s the first Indonesian startup to make it to the accelerator). In addition to a seed funding of US$120,000 from YC, Payfazz also received funding from MDI Ventures, a corporate venture capital initiative by Telkom Indonesia, and participated in its incubator program, Indigo Startup Nation.

Since its YC graduation, PayFazz has been working with over 15,000 agents in Indonesia and processing monthly transactions totaling over US$1 million. The startup seeks to expand further by reaching out to relevant markets through Telkom’s marketing channels and partnering up with financial institutions for system and technological support.

Photo credit: Tech in Asia ID

KoinWorks is an online marketplace that connects borrowers and lenders. Similar to other P2P lending sites, KoinWorks targets micro and small enterprises – a group whose needs are underserved by traditional financial institutions.

What sets KoinWorks apart are features like its Protection Fund, which an initiative compensates investors for losses from non-performing loans. Currently made up of 20 to 30 percent of revenue received by the company, KoinWorks seeks to boost its Protection Fund through partnering up with a credit insurance firm.

A 2016 report from the International Finance Corporation and USAID described the SME market in Indonesia as “one of the fastest-growing sectors in the country,” with potential demand for credit among women-owned enterprises totaling at US$6 billion. With most SMEs unable to secure funding from banks due to a lack of collateral, there’s a sizable gap that can be filled by peer-to-peer lending.

Having entered Indonesia’s P2P lending space in March 2016, KoinWorks has received angel funding and is currently in discussions for venture capital investment.

US$1 = IDR 13440

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Exclusive: Omise rival Cashaa, one of world’s ‘top 100’ blockchain firms, launching ICO

Cashaa is a peer-to-peer payments and remittances startup headquartered in the Level 39 Accelerator in London, with its tech team in Mumbai. It’s now registered in Estonia for the launch of its ICO on October 31. The dissolving national boundaries in its footprint is typical of the blockchain technology underpinning Cashaa.

CEO and founder Kumar Gaurav, currently based in Palo Alto, USA, tells Tech in Asia that the pre-ICO activity of bringing in influential investors is starting next week, ahead of the public launch. Cashaa will release 510 million CAS tokens for 150,000 ETH (the cryptocurrency ethereum), says Gaurav. At the current price of ethereum, that would amount to US$44 million.

Unlike many ICOs based on whitepapers, points out Gaurav, Cashaa has a proven product for remittances or money transfers between England and India, as well as Nigeria and Indonesia. It also has a digital wallet and acts as an exchange for cryptocurrency.

The legal preparation for the ICO has taken months and cost hundreds of thousands of dollars… That’s worth it to protect our reputation.

The way its remittance works does not require users to know anything about cryptocoins. They can simply use their national currency to transfer money. A trader on the platform sells bitcoin in exchange for the fiat currency in the country where the transfer originates. Another trader in the receiving country buys the bitcoin, paying for it in the local currency there. This goes to the receiver, who need not know that a bitcoin trade powers the money transfer and exchange rate.

This can bring the power of cryptocoins to 99.99 percent of the people in the world who have no clue about them, says Gaurav. It reduces the cost and time taken for remittances by banks. That’s huge for countries like India and Indonesia with a large diaspora across the world sending money home.

Other companies like Ripple, which connects banks with its private blockchain network, are also trying to use cryptocurrency to reduce the cost of money transfer. One difference with Cashaa is that it will be crytocoin agnostic to improve liquidity, explains Gaurav, unlike Ripple which mainly works with its XRP token.

The money it raises from the ICO will help Cashaa get licences in more countries to increase its remittance channels. But remittances is just the first large use case to demonstrate the value and robustness of the underlying blockchain technology, explains Gaurav. Post-ICO, Cashaa will expand its repertoire to become a broader blockchain-based financial services platform, with products for lending, cross-border investments, and more. The CAS token can be used to execute a trade on the Cashaa platform.

A la Omise coin

The closest to this business model is Thai payments startup Omise that launched an ICO in July to build an ethereum-based OmiseGo product for peer-to-peer payments and money transfers. OmiseGo is expected to be launched in the next quarter.

By the end of last month, the value of the US$25 million worth of OMG token had risen forty-fold to cross US$1 billion, making Omise an ICO unicorn.

Cashaa will be hoping that its CAS token sees a meteoric rise like Omise’s, and not the fate that has befallen many ICOs in China where they were banned earlier this month.

Gaurav welcomes the regulatory scrutiny, provided it doesn’t throw the baby out with the bathwater. He reiterates that Cashaa has a working product with over 12,000 users even before the ICO. Some token crowdsales in China have been get-rich-quick schemes based only on dubious whitepapers, or rushed attempts to hop on the ICO bandwagon that has raised nearly US$2 billion in the past six months.

See: China’s blockchain industry looks overseas as ICO blanket ban stirs fear

One reason why he shifted to the US was to make the CAS token – which will represent Cashaa products and not its equity – legally airtight. The holding company for the ICO is in Estonia, which is more advanced and open-minded in adopting and regulating blockchain and cryptocoins than most other countries. “The preparation for the ICO has taken months and cost hundreds of thousands of dollars,” says Gaurav. “But that’s worth it because we have a reputation to protect as an early adopter and evangelist of blockchain technology.”

Cashaa is currently ranked 60th in a leaderboard maintained by UK-based Rise on the top 100 most influential blockchain companies in the world. Gaurav also figures in an algorithmically generated Richtopia list of the top 100 most influential people in the cryptosphere.

The ICO autobahn

A number of startups in India are weighing the pros and cons of taking the ICO route to raise funds. For Gaurav, the choice was both philosophical and practical. Cashaa was seed-funded and founded in 2016 to demonstrate the power of blockchain technology in real-world use cases, so it’s a natural extension to now raise money with digital coins. The practical side of it is that Gaurav and his co-founders can continue to build the company without diluting their equity or having VCs calling the shots.

Gaurav had earlier founded Darwinsurance, a peer-to-peer insurance platform in Italy after completing his master’s in business management in Milan. This was acquired by Esedra.

His co-founder Celestine Vettical had founded Performix, acquired by Baker Hughes. He had earlier held senior positions at Microsoft, SAP, and Cognizant.

Another co-founder Janina Lowisz is also the co-founder of Bitnation, which characterizes itself as a decentralized nation on the blockchain. The fourth co-founder Felice Covelli is a financial asset manager and a bitcoin pioneer in Europe.

See: Everything you wanted to know about initial coin offerings but were afraid to ask

Cashaa lists MIT research scientist John Henry Clippinger among its advisors. He was also the advisor for Bancor, which raised US$153 million in an ICO in June – the largest ever token sale until then. It was overtaken the next month by a US$185-million token sale by Chinese company Block.one.

Other advisors include Bernard Lietaer, creator of the Euro and author of The Future of Money, as well as Kumar Gaurav’s younger brother Akash Gaurav, who founded blockchain company Auxesis in 2015 during his undergrad studies at premier engineering college IIT Bombay.

Auxesis is building the blockchain infrastructure for a variety of clients, including state governments in India looking to use distributed ledgers for things like land records. For Cashaa, it has built the core private blockchain network, taking care of performance, scalability, and security.

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It’s official: Singapore unicorn Sea files for IPO on NYSE

Nick Nash, group president of Garena at Tech in Asia Tokyo Conference 2016.

Singapore unicorn Sea, formerly Garena, announced on Friday that it has filed a registration statement for a proposed IPO on the New York Stock Exchange. Goldman Sachs, Morgan Stanley, and Credit Suisse will be the bookrunners for the IPO. The number of shares and their price range have not yet been determined, says the announcement.

Sea, which made its mark initially with gaming, diversified into ecommerce and digital payments. Today it has three brands – Garena, Shopee, and AirPay – with a presence in seven markets across Southeast Asia: Indonesia, Vietnam, Thailand, the Philippines, Malaysia, Taiwan, and Singapore.

It rebranded itself Sea from Garena on its eighth birthday on May 8 this year, after a funding round of US$550 million from Hillhouse, Cathay Financial, Farallon, GDP Ventures, JG Summit Holdings, and other investors.

GDP Ventures is run by Martin Hartono, son of Indonesia’s wealthiest family that controls cigarette-maker Djarum. JG Summit is founded by Philippine billionaire John Gokongwei.

Sea’s earlier backers were China’s Tencent, Malaysia’s state investment arm Khazanah Nasional Bhd, Singapore’s Temasek subsidiary SeaTown Holdings International, Japan’s Mistletoe fund of Taizo Son (the younger brother of SoftBank CEO Masayoshi Son), Canada’s Ontario Teachers’ Pension Plan, and US private equity firm General Atlantic LLC. The IPO is great news for all of them as large exits from Asia are rare.

The US$550-million funding this year was aimed at expanding Shopee in Indonesia, where it competes with Lazada and Tokopedia which are both backed by Chinese giant Alibaba. It also prepared Sea for the IPO, which could raise upwards of US$1 billion.

The company was valued at US$3.75 billion at its earlier funding round in March 2016. The valuation for the latest round was not disclosed.

Garena introduced the multiplayer online battle arena (MOBA) game League of Legends (LoL) to Southeast Asia. Today LoL is the most popular MOBA in the world, with 100 million unique visitors a month.

Sea’s diversification with Shopee and AirPay made it a broadbased player targeting the digital market across Southeast Asia, with a population of nearly 600 million people and US$3.0 trillion in GDP in 2016.

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Ripple with Greg Kidd

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Greg Kidd is an advisor to Ripple Labs and Chief Risk Officer at Shift Payments.

Questions

  • What is a distributed payments protocol?
  • How does Ripple’s consensus work?
  • How does Ripple process transactions asynchronously?
  • How does Ripple maintain correctness, agreement, and utility?
  • What is a “last closed ledger?
  • What is Ripple Labs?
  • How are banks integrating with Ripple?
  • What is a transaction lifecycle?

Links

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Payments Engineering with Faisal Khan

Mobile phones, underserved markets, and Bitcoin have created a wealth of new financial technology businesses.

Faisal_Khan_Payments_Consultant

Faisal Khan is a banking, payments, and fintech consultant with a background in electrical engineering.

Questions

  • How does Bitcoin change the business of payments?
  • How is Starbucks iconic of the rapid change?
  • How does Bitcoin compare to Ripple?
  • How should developers choose between Stripe, Braintree, Paypal, and  Square?
  • Where do the complexities of the payments world come from?

Links

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