This Week In Bitcoin: Investments, E-Commerce Newspapers & Increased Security
This was full of big news. Highlights include the silk road auction winner, the first e-commerce-enabled newspaper, enhanced security, and ongoing bitcoin mainstreaming.
Tim Draper wins U.S. Marshal's Silk Road Auction
Venture Capitalist Tim Draper won the U.S. Marshal's 29,656 bitcoin auction. Draper said he will not disclose the price he paid. Draper said he will use the bitcoins to launch a new product to “provide liquidity to emerging markets.” In particular they will be targeting India, Brazil, Argentina and Turkey because those countries have a high GDP and high inflation.
Chicago Sun Times First E-commerce Enabled Newspaper
The Chicago Sun-Times made history this week by being the first newspaper to run an ad consumers could directly purchase from. One of the exciting bitcoin features is the ability to send money to a QR code. This is primarily done by displaying QR codes on laptops, tablets and smartphones. Other potential applications of this payment technology are e-commerce enabled billboards and magazines, and parking meters that don't require any power.
Winklevoss Bitcoin ETF gets Ticker COIN
The Winklevoss bitcoin ETF moved closer to regulatory approval. The 4th S-1 registration amendment was filed July 1. The amendment includes that the fund will be traded on the Nasdaq exchange under the ticker COIN. Bloomberg now lists the security as “pending listing.”
Coinbase Advances Bitcoin Security with a “Vault”
This week Coinbase announced a new type of bitcoin account is being rolled out to early testers: a vault. The vault will be a place to put large amounts of bitcoin in storage so they cannot be stolen by hackers.
The vault has additional security measures like multiple signers, multiple authorizations, and time delays. Most bitcoin wallet services today use two factor authentication which means an attacker must not only get the wallet username and password, but also get the user's smartphone to steal their coins. The vault's features could make it so the attacker also has to compromise the owner's email, the owner's co-signers accounts, and ensure the owner doesn't notice the fraudulent withdrawal request for two days. Definitely a lot more secure than my bank accounts and credit cards.
BitPay Advances Web Security with BitAuth
Since bitcoin is the first digital cash system it is showing how inadequate modern security procedures are. Multi Signature wallets and hardware wallets are solutions coming to provide unprecedented levels of financial security to consumers using bitcoin.
This week BitPay released free software to the community that eliminates an attack vector. Using their BitAuth software it becomes impossible for a vendor to lose your password, because they never receive it. If this system had been in place at Adobe, they couldn't have leaked 150 million passwords last year, and the Heartbleed vulnerability wouldn't have enabled attackers to steal credentials this year.
Related: Bitcoin Vs. Payment Companies
Overstock Encouraging Vendors to Accept Bitcoin
CoinDesk reported that Overstock CEO Patrick Byrne stated he will be giving “special deals to vendors who want to be paid in bitcoin.” Those vendors may get discounts or favorable terms. Byrne said Overstock is considering offering employees payment in bitcoin.
Newegg Accepts Bitcoin
Joining Overstock.com, TigerDirect, Dish Networks, Virgin Galactic and many others, Newegg began accepting bitcoin this week. Newegg partnered with BitPay to handle receiving the bitcoins. Newegg advertises the benefits to consumers as giving people power and control over their finances, eliminating the risk of identify theft, and being usable across international borders.
Disclosure: At the time of this writing David Smith has a long bitcoin position and owns So What's Bitcoin?
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