Written By Creative Curiosity
DECENTRALIZED CRYPTOCURRENCY Why Use It?
DigiByte is a professional & transparent decentralized cryptocurrency that has been designed to address several of the weaknesses of Bitcoin & Litecoin. As the Bitcoin & Litecoin marketcaps grow it is likely there will be even more price volatility and commodity speculation, resulting in fewer transactions for goods and services as was originally intended with crypto currencies. As such, we as the development team felt it was best to create Digibyte with a total coin supply of 21 Billion DGB. This will help reduce price volatility once DigiByte is tied directly to the USD and or Euro/Yuan while keeping in parity with the number 21 success of Bitcoin. This will help encourage DigiByte to be adopted as a transactional currency and not as a speculative commodity. We are now seeing the death of the common home based Bitcoin miner, and the emergence of large ASIC mining companies. We as a development team feel this centralization of hash power goes against the main principles upon which Bitcoin was created.
Zynga Dips A Toe Into The World Of Bitcoin Payments
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Games company, Zynga, is testing digital cryptocurrency Bitcoin as a payment method in a number of its titles. Zynga made the announcement on the Bitcoin subreddit and noted that the test would apply to the Zynga.com titles FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille. The implementation of the digital currency is via BitPay —
Given this reason and others we have decided to use Scrypt with Digibye. Scrypt is a tried and tested algorithm that has experienced much success in the crypto community. We feel there is no need to re-invent the wheel here. From our research we have concluded that even if ASIC scrypt miners are developed they will not give anywhere near the difficulty boost that was seen with Bitcoin and likely will not be cost effective to develop or purchase. Just as Facebook overtook MySpace and Chrome over took Internet Explorer so too will a scrypt based coin over take Bitcoin. Bitcoin has done very well and paved the way but it will not be the king of crypto currencies forever. It is facing several issues right now including: slow transactions, limited coin supply and centralization of hash power. When studying new internet technologies the first to market ever stayed on top for long. Lycos was overtaken by Google; Napster has since been replaced by many others.
a third-party digital currency service. Over the last few years, Bitcoin has been gaining traction as a currency. However, The volatile nature of Bitcoin’s value is a concern to those considering using it as part of their business. An article in The Atlantic referred to is as “a currency designed for deflation”, noting that until the value stabilises the currency incentivises saving not spending — “Why spend bitcoins today
when they might be worth much more tomorrow?” There’s also the worry that the Bitcoin value could plummet as well as climb which would be a blow for both merchants and consumers. Zynga’s implementation is only a test, currently, although if it appears to work you’d assume the company would roll it out across their titles. -Philippa Warr
DigiByte is Blazing fast! Much faster than Bitcoin & Litecoin, and fast enough to buy coffee from a merchant in just a few seconds with the press of a button on a smart phone!
Transactional Currency:With 21 billion coins, DigiByte will primarily become a worldwide currency traded for goods & services, and not a volatile speculative commodity like Bitcoin. DigiByte has a natural ratio of 1BTC:1000DGB to Bitcoin. This means that if Bitcoin is worth $1,000 DigiByte should be worth $1 -$10.
DigiByte was planned and designed for over a month before launch. Since then, the community around DigiByte has continued to grow and contribute to its success.
DigiByte was announced more than 3 days ahead of time. It was delivered at the exact minute advertised with a countdown timer for a fair launch. Over a half million dollars in hardware were thrown at the network in the first few minutes alone.
The pre-mine of DigiByte is publicly posted and is used to further the long-term success of DigiByte.
NAME You store data in megabytes & gigabytes. Why not store money in DigiBytes?
Written By Brid-Aine Parnell
Illustration By Steve Argyle
hundreds of folks ready to sue bitcoin exchange mtgox Brit-based firm says it’s getting ready to file hefty class action lawsuit
Conjured Currency Abstraction of a trading card from the game, Magic the Gathering; it is meant to allude to the situation
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Over 400 people have expressed an interest in joining a class action lawsuit against Bitcoin exchange MtGox, according to a British-based law firm. Selachii has been gathering up investors stung by the collapse of the exchange and the prospect that it may have lost 750,000 of its customers’ Bitcoins and 100,000 of its own, totalling around $480m. The firm said on its blog that “a class action by investors seems to be the only logical action that can be taken”. MtGox is already being sued in the US for alleged negligence and fraud. Selachii is planning to take the parent company of MtGox, KK Tibanne, and MtGox chief Mark Karpeles to court in London after it finishes finding potential claimants on Friday this week. Richard Howlett, the co-founder of the law firm, told Reuters that there were more than 400 people already signed up “from every country you can think of”. He said it was impossible to say at this point what had caused the Bitcoin exchange to collapse, but the suit would take issue with the lack of disclosure by the exchange and the deposits made by customers right before the collapse. “One of the problems and main issues that is leading to suspicion is the lack of information coming from MtGox,” he told The Reg. “It is unknown at this stage if fraud is involved but this is something that will come out in disclosure.” MtGox has admitted on its website that it may have lost hundreds of thousands of Bitcoins “through the abuse of a bug in the Bitcoin system”. The exchange is still only talking about the possibility of the Bitcoins having been stolen, though most users have already accepted that whatever happened, their Bitcoins are likely gone for good. The exchange has claimed to have 127,000 creditors and liabilities of 6.5bn ($64m), with assets of just 3.84bn ($38m).
NEW YORK CRYPTo EXCHANGE In an official statement made last Tuesday, the financial authorities of New York said that they would soon begin accepting applications for virtual currency exchanges. These would include those dealing in Bitcoins. This is a consequence of regulator’s growing interest in the technology. It was Benjamin M. Lawsky, the city’s Superintendent of Financial Services who issued the public order.
Not just exchanges
New York’s interest in virtual currencies isn’t new. The city recently held hearings on the proposed regulatory framework. Financial regulators in the state have been investigating the use of Bitcoin and other virtual currencies since last year. This continuous work culminates in a specially tailored “BitLicense“, given out to virtual currency firms operating in New York. The city is also expected to consider proposals and applications for other types of virtual currency firms beyond exchanges. The cry for regulation comes following the fall of Tokyo-based Mt. Gox. This exchange was the previ-
ously largest place for buying and selling Bitcoins. Mismanagement and a supposed hacking attack made the exchange file for bankruptcy, leaving thousands of people in the cold. Superintendent Lawsky said: “Consumers should understand and receive appropriate disclosures about the potential risks associated with using virtual currencies or any other financial product, but the fact is that virtual currencies are unlikely to disappear entirely. They will likely continue to exist in one form, or another. As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators. The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance.” The Bitcoin Foundation, a nonprofit which advocates for the use of Bitcoin, did not immediately respond to comment on New York’s announcement.
Written By Rob Wile
Illustrated By Socky Trooper
The face of Dogecoin. Doge is a slang term for “dog” that is primarily associated with pictures of Shiba Inus (nicknamed “Shibe”) and internal monologue captions.
DOGECOIN how a thing that started as a joke became the hottest digital currency in the world
this is the most 2013 thing of the year. An Australian brand and marketing specialist and a programmer in Portland, Ore. who have never actually met have successfully combined the year’s two greatest phenomena: Bitcoin, and doge. The result: Dogecoin. And people are actually using it. If you’re not familiar with the doge meme, it’s hard to explain — you sort of have to just see it yourself. Basically, someone on the Internet began posting images of Comic Sans thought bubbles in the imagined syntax of a devastatingly cute Shiba Inu dog. There’s no point to it; it’s just one of those Internet things; but people love it. About three weeks ago, Jackson Palmer, who by day works in Adobe’s Sydney marketing department, and who’d been following developments in the cryptocurrency world, absentmindedly tweeted, “Investing in Dogecoin, pretty sure it’s the next big thing.” He got some replies encouraging him to pursue the idea, and a week later bought the domain Dogecoin.com. Inevitably, it got picked up on reddit, a hotbed of doge activity. Meanwhile in Portland, Billy Markus had been trying to program his own digital currency that would appeal to a broader demographic than the profiteers who’ve flooded into Bitcoin. But the project had gone nowhere. Then he stumbled across Dogecoin.com within a day or two of the site going live. “The first thing I said was, ‘This is so funny.’ Then I said, ‘I should just make this coin.’” He Tweeted at Palmer saying he wanted to go in on it, and before Palmer even responded, started re-
configuring Bitcoin’s sourcecode, which is publicly available, to turn its user-facing elements into the doge meme. Eventually Palmer wrote back, and the partnership was formed. A little more than a week after Palmer’s jokey tweet, Dogecoin was launched. Again it got picked up on reddit, and instantly exploded. It is already the 13th seventh-largest cryptocurrency, according to Coinmarketcap, with a market value (i.e. number of extant Dogecoins X price of $0.00086) of $8 million. It now enjoys its own full blown ecosystem: in addition to the website, it has a dedicated blog and forum, and of course a subreddit. Largely through something called “tipping.” If you’re a geek who “performs” a “good deed” on the Internet, it’s become common practice for people to “tip” you in your digital currency of choice. For instance: that kid who held up up his Bitcoin
wallet’s QR-code during ESPN’s College Gameday got tipped thousands of dollars by the Bitcoin community for such a brilliant stroke of guerrilla marketing. But it’s become somewhat expensive to tip in Bitcoin, so people have turned to Dogecoin. Only about a week after launching, Dogecoin became the second-most-tipped currency, the pair say. They’re hoping Facebook will accept a widget they’ve been working on that would allow friends to “tip” each other with dogecoin.
Still, what’s so great about Dogecoin? Technically speaking, it’s more of a variation on Litecoin, which runs on a cryptographic program called Scrypt. Like Litecoin, the time it takes to process a Dogecoin transaction is much shorter than for Bitcoin. There are also many more Dogecoins that will come into existence — 100 billion versus 21 million. But it’s the culture that’s sprung up around it that’s really driving it forward. Palmer says it comes down to having a lower barrier of entry for people who might be interested in cryptocurrencies but are turned off by either the price of or so-far dubious culture that surrounds Bitcoin.
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“It’s not taking itself as seriously, it’s not being used by people worrying about whether they’ll become rich,” Palmer said. “It’s something to share for thanks or kudos.” Markus says his wife, who at first was turned off by his interest in Bitcoin, has started mining Dogecoin herself — something you can do with your basic computer, unlike mining Bitcoin, which now requires industrial-strength processors. The pair says they have no intention of competing with Bitcoin, and both are still fervent believers in its potential to change online banking. “It’s a revolutionary technology, absolutely revolutionary,” Markus says. “And it works as a store of value because it’s deflationary, there will be a cap [on Bitcoins created]. It’s just highly speculative, which makes it hard to use, to spend and spread it.” How can you tell the Dogecoin phenomenon is not a joke? This morning, Bitcoin and most other altcoins are up about 20%.
Dogecoin? Up 250% and counting. Wow.
Written By Robert McMillan
Bitcoin rejects ‘real’ Satoshi Nakamoto in favour of leaderless ideal
in the hours after newsweek claimed to have discovered the identity of the mystery-shrouded creator of the bitcoin cryptocurrency — pointing fingers at a 64-year-old retired engineer named Dorian Satoshi Nakamoto — a gaggle of reporters showed up on the man’s lawn in Southern California. And when he hopped into a blue Toyota Prius with one reporter, the rest of them piled into their own cars and chased him through the streets of downtown Los Angeles, desperate to get the story behind the myth of Bitcoin’s founding father. But those at the heart of the Bitcoin community responded quite differently. The lead developer of the software that drives the Bitcoin system was angry that Newsweek had gone after this man and his family, publishing his license plate number and a photograph of his house, and many others agreed. Even before the Associated Press reported that Dorian Nakamoto had denied any involvement with
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the digital currency, the Bitcoin faithful were sure that Newsweek was mistaken. At the online discussion forum Reddit, one person immediately pointed out that at approximately the same time that Bitcoin was released, Dorian Nakamoto was online writing letters to a model train magazine. “I don’t think it’s him,” Bitcoin enthusiast Fred Friis told us soon after the Newsweek story broke, with no further explanation. The Bitcoin community has now rejected the Newsweek article because so much evidence has piled up against it. But underpinning the immediate and categorical rejection of Dorian S. Nakamoto is another phenomenon: Bitcoin is — by design — a leaderless project. The digital currency runs best that way. Though many are curious about the real identity of the man who founded the project under the name Satoshi Nakamoto, many are also very comfortable with his
anonymity. In fact, this anonymity has become an essential part of Bitcoin’s evolution. If Bitcoin exists to manifest the libertarian ideal that money can be exchanged far from the prying eyes of governments and corporations, then the anonymous Satoshi — too smart to ever be ID’d, too cool to even spend his estimated $400 million (£240 million) in Bitcoins — is the real-world John Galt. Bitcoin’s public ledger of digital transactions doesn’t exist in any one place. It exists everywhere on the network. Bitcoin works by consensus. The Bitcoin Foundation’s Gavin Andresen (who now says he regrets talking to Newsweek about the story) may be the closest thing that Bitcoin has to a leader, but if the Bitcoin miners don’t like the software he and his team of Bitcoin hackers create, they don’t have to install it. “It’s peer to peer. It’s open source. It’s consensus-driven. And I think the idea that there’s any one person that’s a leader or a controller is antithetical to the nature of Bitcoin,” says Jean-Jacques Cabou, a partner with Perkins Coie, a law firm that advises many Bitcoin companies on regulatory issues.
“men are weak, ideas are bulletproof”
No Julian Assange, Please Bitcoin, the money of choice for anarchists, has managed to become an $8 billion (£4.8 billion) currency without any identifiable leader. And without its own version of Julian Assange or Linus Torvalds, criticisms about Bitcoin naturally become focused on the code and on the people building businesses on top of it. That’s the point of Bitcoin. With Bitcoin, you don’t have to trust anyone. You can just trust the code. The epic failure at Japanese Bitcoin exchange Mt. Gox is an illustration, not a rebuttal, of that idea. Gox failed because its customers had to put their faith in the company, but the Bitcoin network itself was untouched. Two years ago, a Bitcoin fan named “Myrtlewood,” put it this way when people were trying to identify Satoshi: “I hope we never find out who Satoshi is. Men are weak, ideas are bulletproof.” As blogger Timothy Lee has pointed out, having
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an overly strong Bitcoin founder could create uncertainty about Bitcoin’s technical future. A strong leader “would have been a liability in Bitcoin’s early years,” he writes. “As Bitcoin’s creator, Satoshi Nakamoto would have had a unique ability to change the rules of the game and get the Bitcoin community to accept the changes.” This sort of thing could still undermine the digital currency. At the moment, the Bitcoin system will eventually stop making new currency, and no central authority — no government, no Fed — can come in to make more, a move that would devalue bitcoins. But what if the leader returned? What if he called for an expansion of the currency, acting as a de facto Fed chairman? What’s more, if Satoshi is identified, it could cause extreme personal problems for this individual — as the events of yesterday and today have shown. Reporters are still camped out on Dorian Nakamoto’s lawn this morning. A publicly identified Satoshi could be the subject of civil lawsuits or regulatory inquiries. “It’s very easy to get sued once people know who to sue. Whether there’s merit to the suit is another question,” Cabou says. And with the real Satoshi controlling an apparent $400 million (£240 million) in online currency, he could also be targeted by criminals here in the real world.
Deja vu all over again As yesterday wore on, the bitcoin masses only became more convinced that Newsweek was mistaken. They complained that the man Newsweek had fingered as bitcoin’s creator seemed more like a crank than a crypto-genius. The man in Los Angeles appeared to be a guy who was obsessed with model trains and free lunches, who wrote badly written reviews of double-edged razor blades and Danish butter cookies, and who, during his two-hour interview with the AP, repeatedly and mistakenly referred to the world’s most popular digital currency as “bitcom.” And, most of all, they didn’t believe that the founder of bitcoin would have used his real name in starting the project. Curiously, that’s a premise that Newsweek itself was forced to simultaneously accept and reject in its reporting. The “trail followed by Newsweek led to a 64-year-old Japanese-American man whose name really is Satoshi Nakamoto,” Newsweek reports, glossing over the fact that Nakamoto had changed
his name to Dorian Prentice Satoshi Nakamoto back in the 1970s. If Dorian Nakamoto wanted to use his real name, why not put Dorian Nakamoto on the original bitcoin paper? Either way, this isn’t what people who know Bitcoin would expect of the currency’s true founder. Bitcoin’s Satoshi Nakamoto was someone who had divulged almost no personal information about himself — who has not spent any of his Bitcoin fortune because that could give researchers a way to identify him. “I would never have expected that his real name was in fact Satoshi Nakamoto,” said Sergio Lerner, a security expert who investigated some of the early online activity of Bitcoin’s founder. “This does not match with the degree of anonymity he was trying to keep.” “This Newsweek article is no more, or less, credible than other articles supposing to find Satoshi,” says noted Bitcoin developer Jeff Garzik. “It offers zero credible evidence that he designed Bitcoin.” Garzik is right. Newsweek’s evidence is pretty weak. Tracked to his Temple City, California, home, Dorion Nakamoto never actually admitted any involvement in bitcoin to Newsweek’s reporter, Leah
McGrath Goodman (she didn’t respond to our requests for comment). Hounded by reporters, Dorian Nakamoto eventually told the Associated Press that he hadn’t heard of bitcoin until three weeks earlier, when his son was contacted by a reporter. Online, there’s a donation fund that aims to buy Dorian Nakamoto some trains to compensate him for the media horde that has descended on his front lawn for two days running. In some ways, we’re just repeating history. Dorian Nakamoto isn’t the first person to be fingered as bitcoin’s creator. In a 2011 New Yorker piece, Joshua Davis suggested that Satoshi might be a Dublin researcher named Michael Clear. Shortly after Davis’s story was published, a journalist named Adam Peneberg analyzed Satoshi’s writing to conclude that Nakamoto was actually three people: Neal King, Vladimir Oksman, and Charles Bry. But these claims were mostly debunked. By the end of the day yesterday, the Bitcoin community had pretty much unanimously decided that Dorian S. Nakamoto was not the real Satoshi either. So the mystery remains. And Bitcoiners seem to like it that way.