With Trouble At Home, Kraken Looks Overseas
After a rocky start to doing business outside of the Eurozone, where Kraken is the largest exchange for bitcoin buyers and sellers, CEO Jesse Powell announced Tuesday that the San Francisco-based company has reached an agreement to team up with payment service company PayCash to offer customers additional USD and GBP trading facilities for bitcoin purchases and sales orders.
Kraken was met with a weak reception by financial services firms in North America earlier this year after attempting unsuccessfully to ingratiate itself into what is a deeply cut-throat and hugely compliance-heavy market niche. Since August, multiple investment bankers have complained to CoinSpeaker that Kraken’s senior management team is difficult to do business with since the executives at the exchange comprises only people with technology backgrounds. “Not one of them has even a vaguely competent grasp of the financial services industry – you end up talking to yourself in the end,” maintains a banker for a multinational public-listed US investment bank who asked that neither he nor his employer be named.
Kraken plans to tend to its European trading operations, which it is expanding into the UK, as well as to open an office this month in Japan
A Look At Sidechains, Ethereum & Zerocash
Sidechains, Ethereum and Zerocash are three new technologies under development amidst the $5-billion, 300 quadrillion hash annual blockchain processing system.
The technology allows users to transfer virtual currencies between blockchains by using a two-way peg system that eliminates the need for creating new digital currencies.
Sidechains simply “peg” to the bitcoin blockchain, leveraging the depth of the liquidity of bitcoin’s market and the extent of processing power available as a result of bitcoin mining activities. Thus, there might be thousands of sidechains “pegged” to Bitcoin with different aims and characteristics.
Ethereum is a blockchain platform with a built-in Turing-Complete (TC) programming language for decentralized applications and smart contracts, which includes multiple signatures and escrow transactions. The project is intended to merge and enhance the conepts of altcoins, on-chain meta-protocols and scripting.
TC programming language is designed to power not only programmable money, but voting systems, identity registries, financial derivatives, reputation systems, decentralized autonomous operations as well. They recently raised 30,000 BTC ($14 million) by trading “ether”, their own currency. The project is set to be launched in winter.
Unlike the blockchain, ethereum blocks store a copy of the most recent record and individual transaction history. The difficulty and the block number are also included in the block.
Zerocash is the blockchain protocol based on the decentralized anonymous payment (DAP) scheme that keeps all the users totally anonymous. It doesn’t store any data on the amount transferred, addresses or payment’s origin.
InPay Crowdfunds IPO
Poland-based InPay recently made its shares available for purchase in the first crowd-funded IPO of the virtual currency landscape after getting the go-ahead from domestic financial regulatory authorities. The sale of stock was launched on the crowdfunding site Beesfund.com.
InPay is selling a stake of 5% in what will comprise 5000 shares at 40 zloty ($1.20) per share. The company intends to raise about 200,000 zloty ($60,000). More than 100 investors have already acquired subscribed to the offer, which the company expects to wrap up by mid-November.
Former SEC chief Levitt Goes Digital
Two bitcoin companies, BitPay and Vaurum, announced today that Arthur Levitt, former Chairman of the US Securities and Exchange Commission (SEC), will serve as advisor to both enterprises. BitPay is the world’s largest bitcoin payment processor, while Vaurum is an institutional bitcoin exchange.
Levitt, the longest serving Chairman of the SEC, will work closely with both companies to monitor business practices as well as help develop new ways to market and refine this new form of currency.
“Bitcoin is a fascinating new product in the rapidly changing world of financial service,” said Levitt in a statement to the press. “I hope to help BitPay and Vaurum blend their new business models with core monetary methods and transparency practices in order to ensure their long term success.”
BitPay Launches Open Source Gimmick As Rumors Fly
BitPay, the payment gateway that services merchants who want to accept bitcoin as a payment mechanism without holding physical BTC, announced this week it was working on an open-source program designed to facilitate peer-to-peer interaction – comercial and social – in the virtual currency landscape. The program is called Foxtrot.
The announcement comes on the back of growing speculation in corners of the market – especially among exchange chiefs – over the true health of the company’s purported cash-flow problems. While BitPay has raised $32 million from notable investors including Richard Branson and Roger Ver, some of those working on virtual currency exchange floors who see the actual transaction volumes being carried out by merchant payers maintain that BitPay’s tiny fees combined with a lackluster uptake of users paying for everyday items such as food, clothes and books in bitcoin has meant for dwindling cashflow just as the company’s core holdings, most of which are in bitcoin, have begun to taper off in value.
“A Bitpay fallout is likely if the situation goes on as is – the European operations are a mess,” one employee of a North America based exchange told CoinSpeaker. The employee asked not to be identified by name for fear of harming his personal reputation in the industry. The employee referenced a professional bitcoin market maker for exchanges who confirmed the rumor, but he also asked not to be named or quoted.
Early stage investor Roger Ver denied the claim and insisted that the company was doing “better than good” when asked about the comments last month in a private interview with CoinSpeaker’s editorial managers.