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What is Bitcoin?

Bitcoin is a digital crypto-currency with no single point of failure due to its decentralized peer-to-peer architecture. The source code is publicly available and changes to the reference Bitcoin client are made via concensus within the community. Advantages of Bitcoin include irreversible transactions (i.e. no possibility of chargebacks as with credit cards), pseudo-anonymous, limited and fixed inflation, near instant transactions, multi-platform, no double-spend and little to no barriers to entry and more. It was created by an anonymous person known as Satoshi Nakamoto. Find out more at WeUseCoins.com.

Bitcoin Latest News

Microsoft accepts Bitcoin

Posted on 11 December 2014 | 5:06 am

Mozilla accepting Bitcoin

Posted on 20 November 2014 | 1:55 pm

PayPal and Virtual Currency

Posted on 23 September 2014 | 9:52 pm

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Wikimedia Foundation Now Accepts Bitcoin

Posted on 30 July 2014 | 3:14 pm

German Newspaper "taz" accepts Bitcoin

Posted on 22 July 2014 | 1:32 pm

airBaltic - World’s First Airline To Accept Bitcoin

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Expedia to accept Bitcoin payments for hotel bookings

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Bitcoin Core version 0.9.1 released

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Bitcoin v0.9.0 released

Posted on 19 March 2014 | 6:44 am

Mt.Gox Statement

Posted on 3 March 2014 | 3:44 am

Bitcoin Price Weekly Analysis – Primed For Lift-Off - newsBTC


newsBTC

Bitcoin Price Weekly Analysis – Primed For Lift-Off
newsBTC
Bitcoin price traded higher, and the idea of buying dips in the last technical analysis worked perfectly. However, the price remains below the 100-day simple moving average on the daily chart (data feed from HitBTC). There is a bullish trend line ...

and more »

Posted on 13 February 2016 | 11:00 pm

21 Inc offers free resource to help optimize bitcoin fees - Brave New Coin


Brave New Coin

21 Inc offers free resource to help optimize bitcoin fees
Brave New Coin
Attaching a bitcoin transaction fee can be a tricky business. Depending on the wallet or service you are using, it can be hard to know the exactly how much to pay for a quick confirmation. Paying too much can be a waste, while too little can delay a ...

Posted on 13 February 2016 | 6:47 pm

Bitcoin Price Hits Resistance - CryptoCoinsNews


CryptoCoinsNews

Bitcoin Price Hits Resistance
CryptoCoinsNews
Bitcoin price breached the 4-hour 200MA in most exchange charts today as buyers eagerly piled into advance. At the time of writing, the market has become quiet, and if a larger decline will grip the market, then the time is now. This analysis is ...

Posted on 13 February 2016 | 8:09 am

European Union Leaders Seek Greater Oversight of Bitcoin Activity - CoinDesk


European Union Leaders Seek Greater Oversight of Bitcoin Activity
CoinDesk
The European Council, a body within the European Union composed of heads of state as well as the president of the confederation's executive branch, will propose rules for digital currency exchanges and wallet providers in the region by June, according ...

Posted on 13 February 2016 | 8:01 am

Is The Looming Bitcoin 'Hard Fork' Illegal? - Forbes


Forbes

Is The Looming Bitcoin 'Hard Fork' Illegal?
Forbes
As the Bitcoin community struggles to reach a broad consensus over how to expand the blockchain's block size, thus allowing Bitcoin to scale, a pro-Bitcoin attorney has sounded an important alarm: any hard fork of Bitcoin may be illegal, and ...
Bitcoin Roundtable Announcement Thwarts Bitcoin Classic LaunchBitcoin Magazine
Bitcoin Revolution Gets on Its Way But Many People Reject the New VersionSoftpedia News
A Bitcoin Hard Fork Can Get Developers In Legal TroubleThe Merkle (blog)
CryptoCoinsNews
all 6 news articles »

Posted on 13 February 2016 | 7:29 am

US Deputy CTO Weighs In On Bitcoin And Policy - Forbes


Forbes

US Deputy CTO Weighs In On Bitcoin And Policy
Forbes
A person touches the screen of a bitcoin ATM of Bitchain Spanish company in a shopping center in Barcelona on July 10, 2015. Bitchain Spanish company sent today to Athens a bitcoins ATM that will allow Greek citizens who use this digital currency to ...

Posted on 12 February 2016 | 12:57 pm

UN Paper: Pushing Bitcoin for Third World Issues is 'Techno Colonialism' - CoinDesk


UN Paper: Pushing Bitcoin for Third World Issues is 'Techno Colonialism'
CoinDesk
A new UN working paper argues that the bitcoin community has a tendency towards "techno-colonial solutionism" and "techno-libertarian evangelism" in proposing the digital currency as a solution to issues in the developing world. Authored by independent ...

and more »

Posted on 12 February 2016 | 9:48 am

China's Role In Bitcoin: How Cultural Differences Are Affecting The Technology's Progress - Forbes


Forbes

China's Role In Bitcoin: How Cultural Differences Are Affecting The Technology's Progress
Forbes
For the last year, the Bitcoin community has been embroiled in what is, on one level, a technical debate over how to upgrade the network to accommodate growing transaction volume. The fighting reached a head in mid-January, when a prominent developer ...
The Schism Over Bitcoin Is How Bitcoin Is Supposed to WorkWIRED
A Super Bowl parody outshines this week's State of Bitcoin reportNew York Business Journal
Industry Businesses Pledge to Avoid Bitcoin Network SplitCoinDesk
Financial Times -Cato Institute (blog) -CryptoCoinsNews
all 32 news articles »

Posted on 12 February 2016 | 7:17 am

One of South Korea's Biggest Banks is Developing Blockchain Remittances

South Korea's KB Kookmin Bank is developing a blockchain remittance solution with the aim of ushering in "safer and faster" foreign exchange services.

Posted on 12 February 2016 | 1:01 pm

UN Paper: Pushing Bitcoin for Third World Issues is 'Techno Colonialism'

A new UN working paper providing an overview of bitcoin has criticised the attitudes of some in the bitcoin community towards the developing world.

Posted on 12 February 2016 | 9:48 am

Why Bitcoin Governance is a Competition (And That's a Good Thing)

Former Bitcoin Foundation global counsel Jim Harper discusses the challenges of applying open-source development practices to a blockchain world.

Posted on 12 February 2016 | 9:17 am

ASX Details Blockchain Strategy in Financial Update

The Australian Securities Exchange has revealed its spending as it prepares to build blockchain solutions to improve the Australian equities market.

Posted on 12 February 2016 | 7:35 am

Russian Central Bank Official Predicts Blockchain Future

The deputy chair of Russia’s central bank has reportedly told banking representatives that they should prepare for the spread of blockchain tech.

Posted on 11 February 2016 | 3:10 pm

Stock Market Giant Deutsche Börse Working on Blockchain Prototypes

German stock market operator Deutsche Börse discusses its blockchain strategy and interest in industry startups.

Posted on 11 February 2016 | 2:29 pm

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Industry Businesses Pledge to Avoid Bitcoin Network Split

A group of bitcoin miners, exchanges and service providers have issued a letter stating that they would not back hard forks of the network.

Posted on 11 February 2016 | 1:17 pm

PayPal Blocks Bitcoin Parody of Super Bowl Commercial

A parody of a PayPal Super Bowl commercial that was posted on YouTube has been blocked by the Internet payments company.

Posted on 11 February 2016 | 8:18 am

Linux, IBM Share Bold Vision for Hyperledger Project, a Blockchain Fabric for Business

CoinDesk speaks to some of the driving forces behind Hyperledger, an initiative that aims to create an open fabric for blockchain technology.

Posted on 11 February 2016 | 3:38 am

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Bitcoin Classic Publishes Code That Could Double Bitcoin's Block Size

The first release for the alternative bitcoin implementation of Bitcoin Classic has been published.

Posted on 10 February 2016 | 3:59 pm

IBM Director Declares 'We’re All in on Blockchain'

IBM blockchain director John Wolpert appeared at a conference in San Francisco today where he gave a keynote speech.

Posted on 10 February 2016 | 1:15 pm

Princeton University Releases First Draft of Bitcoin Textbook

The first complete draft of an upcoming Princeton University textbook on bitcoin has been made freely available for download.

Posted on 10 February 2016 | 12:04 pm

Have We Reached Peak Blockchain Hype?

A number of sceptical voices are calling out the blockchain space and the media for over-hyping the potential of distributed ledgers. Are they right?

Posted on 10 February 2016 | 10:26 am

Bitcoin Roundtable Announcement Thwarts Bitcoin Classic Launch

Bitcoin Classic, the Bitcoin implementation set to double Bitcoin's 1 megabyte block size limit by a hard fork, suffered a significant setback shortly after itsofficial release this week. A group of prominent exchanges, mining pools and other industry players organized under the “Bitcoin Roundtable” collective, stated publicly they will not switch to Bitcoin Classic for the present.

Open Letter

An openletter by the Bitcoin Roundtable, including signatories representing major Bitcoin exchange Bitfinex, ASIC-manufacturer and mining pool BitFury, exchange, wallet service and mining pool BTCC, cloud hashing service Genesis Mining, mining pools F2Pool, BW Pool, Ghash.IO and others, states:

“We think any contentious hard-fork contains additional risks and potentially may result in two incompatible blockchain versions, if improperly implemented. To avoid potential losses for all bitcoin users, we need to minimize the risks. It is our firm belief that a contentious hard-fork right now would be extremely detrimental to the bitcoin ecosystem.”

Bitcoin Classic requires a 75 percent hash power activation threshold to activate a block size limit increase. Since the Bitcoin Roundtable collective accounts for more than 60 percent of hash power on the Bitcoin network today, activation seems unlikely unless some of the signatories reverse their positions.

Instead, the letter expresses support for an initial block size limit increase through Segregated Witness. This solution, which was made a first step in Bitcoin Core's scalability “roadmap,” offers an effective block size limit increase of .6 megabyte to 1 megabyte, along with additional improvements. As one of its main benefits, Segregated Witness can be rolled out as a soft fork, meaning only miners need to upgrade, rather than all nodes on the Bitcoin network.

The letter reads:

“We see the need for a modest block size increase in order to move the Bitcoin project forward, but we would like to do it with minimal risk, taking the safest and most balanced route possible. [Segregated Witness] is almost ready and we support its deployment as a step in scaling.”

Bitcoin Roundtable

Bitcoin Classic was firstintroduced a month ago by former Bitcoin Foundation board member Olivier Janssens,FinalHash CTO Marshall Long and Bitcoin miner and developer Jonathan Toomim. Shortly after Bitcoin XT lead developer Mike Hearn very publiclydenounced Bitcoin a failed experiment, the alternative implementation quickly gained support from major Bitcoin industry players including Coinbase, Blockchain and Bitstamp, as well as Bitcoin Core veterans Gavin Andresen and Jeff Garzik.

Several major mining pools initially endorsed Bitcoin Classic as well, but this support has been nuanced since. In the midst of a crisis atmosphere, mining pools and other companies organized several meetings across the world as well as online to discuss the situation. One of these meetings, theBitcoin Consensus Round Table organized by BitFury a day after the North American Bitcoin Conference in Miami, formed the basis of what later resulted in the Bitcoin Roundtable letter.

Speaking to Bitcoin Magazine, BitFury CIO Alex Petrov explained:

“BitFury was ready to support the Bitcoin Classic initiative – but this doesn't mean we planned to immediately start mining in favor of Bitcoin Classic or run Bitcoin Classic nodes. We do believe a hard fork block size limit increase must happen, but we ultimately want to avoid too much confrontation among miners, or a split within the community. This is not helping to move the Bitcoin project forward in any way. Rather, we should have a constructive conversation, start talking, get the perspectives from both sides of the debate. That way everyone can get a deeper understanding of potential issues, and we will be able to find solutions.”

This call for unity was seconded by cloud hashing service Genesis Mining CFO Marco Krohn.

“There is huge split in the community regarding the block size limit. The dispute has been going on for a while, first with Bitcoin XT and now between Bitcoin Classic and Bitcoin Core. But I think it's important to realize that both sides want Bitcoin to succeed; assuming anyone has bad intentions is not helpful,” Krohn said.

And, regarding concrete scaling proposals:

“Segregated Witness is a great idea, and almost everyone supports it. However, it's only a one-time capacity increase. There were several official and unofficial attempts to convince the Bitcoin Core development team to add a 2 megabyte block size limit increase hard fork to the roadmap, and be more specific about its implementation – but to no avail so far. The letter is an attempt to calm the situation, and to continue the constructive conversation with the Bitcoin Core development team. We are optimistic to find a solution which better addresses the needs of the businesses, miners and the rest of the community.”

China

Previously, a subset of the Chinese mining community – most notably including major ASIC-manufacturer and mining pool Bitmain/AntPool – offered Bitcoin Core analternativeproposal. Rather than switching to Bitcoin Classic, involved companies proposed to raise the block size limit to 2 megabytes, but with a 90 percent hash power support requirement. This sentiment was later echoed by Bitmain co-founder Jihan Wu, who said that AntPool willtest Bitcoin Classic butdoes not support rolling out a hard fork block size limit increase in the short term. And, on its ownInternet forum, Bitmain clarified it will not vow loyalty to any development team in specific:

“We applaud the [Bitcoin] Core team's increased communication and willingness to find compromise, but we do not wish to bind ourselves to a document that does not contain concrete technical proposals. We look forward to reviewing Bitcoin Core's updated roadmap and evaluating it on its technical merits, but we do not believe that this should be done to the exclusion of other development efforts.”

One of the driving forces behind the Bitcoin Roundtable letter, BTCC COO Samson Mow, acknowledged he does not expect a sudden switch to support Bitcoin Classic from mining pools, if there is any switch at all. Rather, he explained that the Bitcoin Roundtable has even broader support than the letter suggests.

“Bitcoin Classic often overstates their support, or misconstrues support for 2 megabytes or a hard fork as support for Bitcoin Classic,” Mow said. “Some companies not on the signatory list have given a commitment to not run Bitcoin Classic until we see if Bitcoin Core can adapt. They support the Bitcoin Roundtable, but they would have preferred a more strongly worded request to Core, and so have refrained from signing. That was the compromise we reached.”

Mow agreed the main goal right now is to get more clarity from Bitcoin Core on the proposed scalability roadmap, and said the Bitcoin Roundtable group will help to facilitate as needed.

Mow:

“Everyone is asking for a hard fork, but no one is talking about what exactly will go into the hard fork. Is it cleaning up the code a Segregated Witness soft fork left behind? Is it an increase to 2 megabytes or more? What will be the requirements for activation? We need to have those discussions together.”

Bitcoin Classic

While the Bitcoin Roundtable letter was a setback, Janssens, listed as “facilitator” in the Bitcoin Classic release notes, has not given up hope for Bitcoin Classic.Addressing visitors of ther/btc subreddit, predominantly frequented by bitcoiners in favor of a hard fork block size increase, Janssens made clear that Bitcoin Classic intends to remain active – even if it does not achieve a hash rate majority in the short term.

“Classic is here to stay. We finally have a great competing client with a lot of traction,” Janssens said. “Don't let the recent letter discourage you. We still have double digits coming on board of Classic soon, and the rest will follow quickly when the fee event will take place in the next weeks. We cannot run away from reality, and the time for more talk and debate is over. The block size limit will be hit very soon.”

Additionally, at least one mining pool so far stated public support for Bitcoin Classic. Slush Pool, accounting for some 4 percent of total hash power, has committed to let individual miners vote on a potential block size limit increase.

Speaking to Bitcoin Magazine, Slush Pool operator Marek “Slush” Palatinus explained:

“I still like Bitcoin XT or even solutions which remove block size limit completely, but consider it a politically dead solution, so there's no point in pushing it over and over. I therefore support Bitcoin Classic, as it seems to be a trade-off for both camps. And I'm generally not afraid of hard forks much; I'm even a proponent of regular hard forks – say, once a year – which would be able to reflect recent development in [the] field of cryptocurrencies.”

And the Bitcoin Roundtable signatories, in the end, did not completely exclude a switch to Bitcoin Classic at some point in the future either. If after three weeks the Bitcoin Core development team has not addressed concerns raised by the letter signatories, some of them might still opt to make a switch.

BitFury's Petrov said:

“We don't want to raise any aggression or conflicts with either the Bitcoin Core or Bitcoin Classic development teams. Quite the opposite: We would like to build a communication bridge between them. We are just searching for the most optimal and efficient decision – between all voices and with the least risk. We already set the date for next meeting in the end of February, and we would like to discuss the issue with the Bitcoin Classic team to hear their perspective as well. Right now it seems more logical to roll-out Segregated Witness first, and prepare for a hard fork after that. But the Roundtable Group is comprised of many companies and people with differing views, and as initiators we don't want to make any decisions ourselves.”

The post Bitcoin Roundtable Announcement Thwarts Bitcoin Classic Launch appeared first on Bitcoin Magazine.

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How Decentralized Applications Could Bring the Blockchain to New Industries

This is a guest post by Michael Gord and the opinions represented are those of the author.

From socializing to hailing a cab to finding our way around, there’s an app to help. Now, there is a new and improved model that is revolutionizing the way we build scalable applications called a DApp, or decentralized application.

David Johnston, CEO of the DApp Fund, predicts in his white paper that “decentralized applications will someday surpass the world’s largest software corporations in utility, user-base, and network valuation due to their superior incentivization structure, flexibility, transparency, resiliency and distributed nature.”

What Is a DApp?

A DApp has four characteristics. It must be open source, with all changes made by a majority consensus of the user base. Data must be stored on a public blockchain to avoid a central point of failure. There must be a cryptographic token, referred to as an App Coin, to access the application, and these tokens must be issued according to a standard cryptographic algorithm acting as a proof of the value to nodes that contribute to the application.

Bitcoin is an example of a DApp, as it is an open-source token and uses the blockchain, a peer-to-peer and public distributed ledger, to form a trustless system. In fact, Bitcoin is the most popular DApp, as it simplifies many aspects of the traditional financial system, such as transferring money across the world.

Another application of a DApp is something built as a protocol that uses another blockchain and its own token to function. An example is the Omni Protocol, which “is a protocol built as a layer over Bitcoin that allows you to generate, send, trade, redeem, pay dividends to and make bets with tokens representing any kind of asset,” said Patrick Dugan, who’s a board member of the project, in an interview with Bitcoin.com.

Alternatively, a DApp can be built as an extension to the program. For example the SAFE Network, a peer-to-peer storage network, uses the Omni Protocol to issue “safecoins,” which operate the network. With the SAFE Network, decentralized applications are ensured complete data security, and there are projects such as SAFEpress, similar to WordPress, for the SAFE Network, to help people develop on the Network.

Imagine a DApp becoming the computer operating system (OSX or Windows), the programs used on the system (Photoshop, Dropbox), or specialized software that uses the programs, such as a blog that integrates Dropbox. Bitcoin is only the tip of the iceberg of what is possible with this new type of application.

Can App Coins Have Value?

David Johnston and team define App Coins in another white paper as “tokens that are native to Decentralized applications that have a digital token associated with their use or monetization.”

Tokens can also be developed to behave in a way that Bitcoin cannot, at least for the time being. A Javascript-based programming library called Solidity and another Python-based library called Serpent allow decentralized applications to be built on Ethereum.

In addition, networks can choose to operate exclusively with their network’s coin, such as the safecoin that powers the SAFE Network. Doing anything on the SAFE Network requires safecoins, and developing on the SAFE Network provides additional value to developers.

“I want to host my apps on SAFE and not have to worry about servers,” said Francis Brunelle to Bitcoin Magazine. Brunelle is an app developer and enthusiastic community member who predicts that “safecoins will be valuable because it will be the only way to buy storage space on the SAFE Network.”

A strong user base on an application can be reinforced through a successful integration of App Coins. An application that rewards contributing developers and lead users with tokens that have a monetary value has an intrinsic advantage over one that does not. Furthermore, a large user base that uses an App Coin presents a barrier to exiting to a competing service with a less popular coin.

Finally, App Coins provide monetary choice as an alternative to both fiat currency and to Bitcoin. People have different opinions on monetary policies, especially with the rise of digital currencies. App Coins can adopt any number of monetary viewpoints and allow everyone a vote to their preferred economic policy.

The Consumer Future

DApps will likely soon become “consumer apps,” as there are already many in development. The Safe Network decentralizes Internet services and guarantees privacy to all Internet users. Ethereum provides a decentralized application layer and programming language for DApps to be developed.

Factom is a scalable data layer that simplifies big data management record-keeping. Augur is a decentralized prediction market that allows people to forecast events and be rewarded.

As Johnston says in Johnston’s Law: “Everything that can be decentralized, will be decentralized.”

The post How Decentralized Applications Could Bring the Blockchain to New Industries appeared first on Bitcoin Magazine.

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Slush Pool Introduces Provably Fair Bitcoin Mining

Bitcoin mining today is dominated by mining pools. These mining pools arguably have a strong hold on the Bitcoin network, but also on their own participants. Since mining pools typically operate with little transparency, participants must issue a lot of trust in pool operators not to cheat them out of Bitcoin.

Czech Republic-basedSlush Pool – accounting for some4 percent of total hash power on the Bitcoin network – now believes it has solved this problem. Its “provably fair” mining should take away any mistrust – plus introduce some added benefits.

A Quick Recap on Mining

Miners are the entities on the Bitcoin network that confirm transactions and secure the network with hash power by finding Bitcoin blocks. These blocks include several types of data, most importantly transactions, but also the previous block header (linking blocks together), a timestamp and a random number called a “nonce.”

Using a mathematical trick called hashing, miners combine and scramble all of this data into an unpredictable random number called a hash, which is the “block header,” identifying the block. The same data will always result in the exact same block header, but if even a tiny alteration is made to any of the data, it will result into a completely new hash.

If a miner hashes data ten times, odds are that one of these hashes starts with a zero. If a miner does it a hundred times, odds are one of them starts with two zeros. The Bitcoin network requires a valid block header to start with a certain amount of zeros: the difficulty factor.

Miners essentially keep hashing potential blocks until they find a valid block, or one that meets the required difficulty.

A Quick Recap on Pools

Mining pools – the first of which was Slush Pool back in 2010 – divide the work required to find blocks among all participants. A pool operator constructs a block, minus the nonce, and sends this block to all participants, called “hashers.” (“Hashers” are sometimes simply referred to as “miners” – but they don't do everything typical [solo] miners do.)

Hashers take the block as provided by the pool operator, and simply add a nonce to hash the bundle together. If any of the hashers finds a valid block, it sends this block to the pool operator, after which the pool redistributes the block reward among all connected hashers. (A hasher cannot keep the profit of the block for himself, as the coinbase transaction in the block is already attributed to the Bitcoin address controlled by the pool operator.)

The part of the block reward attributed to each hasher is based on his or her share of hash power contributed to the pool. This share, in turn, is calculated using “almost valid” blocks. If Bitcoin's difficulty requires valid blocks to start with 10 zeros, an “almost valid” block might start with nine zeros, or eight, or seven. Since hashers find these “almost valid” blocks more often, pool operators have a good idea of how much hash power each hasher contributes.

(There is always a slight element of variance – luck – involved, as some hashers might randomly find a bit more almost-valid blocks than others. But as more almost-valid blocks are taken into account, this variance increasingly cancels out.)

The Problem: Pool Operator Control

The problem is that no one but the pool operator knows what percentage of hash power each hasher contributes. While hashers provide the pool operator with a certain amount of almost-valid blocks, they have no way of knowing how many “of the blocks all other hashers found. They have to trust the mining pool to tell them what their share is.

Well, almost. Hashers do know how much hash power they contributed to a pool, they can see how many blocks a pool found, and they can estimate how much total hash power is connected to the Bitcoin network based on how often blocks are found. As such, they can also estimate how much their mining pool contributes to the network, and therefore whether the pool is being honest.

But since pools – and smaller pools in particular – find only a certain number of blocks, it can take a long time to gather enough data to reliably draw a conclusion.

This uncertainty can be abused by dishonest pool operators. A pool operator could claim the total hash power is a bit higher than it really is, and that the pool is on an unlucky streak. He could then issue hashers too little share and skim some profit of the top for himself.

Likewise, if an honest pool operator really does have an unlucky streak, hashers might falsely conclude the total hash power of their mining pool is lower than it really is -- and falsely conclude their share is bigger than the pool operator claims it is.

The Solution: Publish the Blocks

The solution as introduced by Slush Pool is straightforward. Rather than keeping the almost- valid blocks for themselves, Slush Pool will publish them for anyone to see.

Since it's easy to check whether these almost-valid blocks are indeed almost valid (meaning they did require hash power to produce), and due to the much lower impact of variance, it's impossible to fake the public list. And it becomes impossible for a pool operator to pretend the total hash power is more than it really is.

(If hashers keep track of the almost-valid blocks they submit, they could also check whether these are included in the public list – though this shouldn't even be necessary.)

As an added benefit, this solution also offers more transparency, perhaps most interestingly regarding miner votes. With the introduction of Bitcoin XT, soon to be followed by Bitcoin Classic, Slush Pool was the only mining pool to allow individual hashers to vote on their preferred block size limit. But while hashers – and any other interested party – had to trust Slush Pool to actually attribute the right amount of hash power to the preference hashers desired, Slush Pool can now prove that it does.

The post Slush Pool Introduces Provably Fair Bitcoin Mining appeared first on Bitcoin Magazine.

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Hyperledger Project Looks at Options to Build Blockchain Technology with IBM, DTCC, SWIFT, and Others

Earlier this week Bitcoin Magazine reported that the Linux Foundation announced technical updates to the new Hyperledger Project, a formal open governance structure, as well as new members from across the industry.

The Hyperledger Project wants to develop a new open source blockchain separated from the Bitcoin blockchain. Digital Asset Holdings, the fintech startup headed by the financial superstar Blythe Masters, contributed its Hyperledger mark, which it had acquired in June with the purchase of San Francisco-based digital fintech company Hyperledger.

The Hyperledger team, now part of Digital Asset Holdings, developed distributed ledger technology for private blockchains, without a built-in digital currency, to allow financial operators to clear and settle transactions in real time, using a proven consensus algorithm capable of thousands of transactions per second.

The placeholder domain hyperledger.com now redirects to the official Hyperledger website hyperledger.org.

The updated list of Hyperledger founding members consists of 28 top companies in the technology and financial services space. It appears that the Linux Foundation’s Hyperledger Project is moving very fast and is on its way to becoming a leading force in the blockchain technology development space.

Founded in 2000, the Linux Foundation wants to be the organization of choice for the world's top developers and companies to build ecosystems that accelerate open technology development and commercial adoption.

The technology of the original Hyperledger team is independent of Bitcoin, and many companies in the new Hyperledger Project support radical alternatives to Bitcoin. For example, Accenture and Digital Asset Holdings CEO Masters, among others, expressed support for private, “permissioned” non-Bitcoin blockchains.

“To be used by financial institutions, including capital markets firms and insurers, blockchains must supplant the costly methods introduced by Bitcoin with a mechanism that guarantees security, privacy and speed without paying for anonymous consensus,” said two Accenture executives in July.

In other words, Bitcoin should disappear and be replaced by a closed blockchain. So is Hyperledger a first step in that direction?

Bitcoin Magazine reached out to the Linux Foundation for clarifications and further explanations.

"The Linux Foundation believes a shared infrastructure that is open to critical inspection and collaboration will be pivotal in driving global adoption of blockchain for distributed ledgers," Linux Foundation executive director Jim Zemlin told Bitcoin Magazine. "I’m extremely bullish about how the developers involved in Hyperledger Project are openly looking at various architectures, concepts and technologies, aiming to integrate code from a variety of sources to build a neutral technology that can work for all."

Zemlin also answered some specific burning questions about the nature, plans and policies of the Hyperledger Project.

Bitcoin Magazine: Does the Hyperledger Project support a specific (existing or planned) digital currency for payments and financial applications?

Zemlin: No, the scope of the Hyperledger Project is limited to the development of the underlying blockchain fabric that can support a broad range of use cases. Applications and domain-specific frameworks are outside the scope of the project, but will obviously be encouraged to leverage the project's deliverables.

Bitcoin Magazine:Is the Hyperledger Project a replacement for Bitcoin and/or other existing cryptocurrencies?

Zemlin:This project’s mission will be to build and advance a general purpose blockchain framework that can be used across industry sectors, from financial services to retail to manufacturing and more. There is ample room in the market for cryptocurrencies and even multiple implementations of the blockchain, but everyone stands to lose if these don’t interoperate and work together. The hope would be that the fabric produced by the Hyperledger Project can satisfy a broad set of use case ranging from cryptocurrencies, supply-chain visibility, asset transfer, IoT, business contracts and so much more. We'll see thousands of applications and many uses cases, but open source and industry-wide collaboration are essential to realizing the full potential of distributed ledger technology.

Bitcoin Magazine:Do you plan to implement full programmability with a Turing-Complete scripting language to support transactions and smart contracts of arbitrary complexity?

Zemlin: One of the proposals on the table in the technical community supports execution of code written in any language. However, the community has not yet reached consensus on this point.

Bitcoin Magazine: What's your position on the privacy issue?

Zemlin: It is important to realize that the Hyperledger Project is hosted by the Linux Foundation, but the community that has gathered to support and lend their resource and expertise to develop this key technology is just now coalescing and does not yet have a singular point of view.

The Hyperledger Project continues to unfold. Bitcoin Magazine will follow further developments.

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Blockchain Startups Take Aim at Counterfeiting of Luxury Products

This post is by Krystle Vermes​.

The cryptocurrency industry has delivered new technology to the world of luxury commerce, and it’s helping weed out the fakes.

It may seem like a frivolous concern, but counterfeit goods are big business. Stopping them is a significant business cost for manufacturers of the real thing. And for consumers who pride themselves on owning luxury goods, getting the real thing is essential to a way of life.

That's where Bitcoin comes in.

“By linking digital certificates to purchased goods, we are able to provide a much higher degree of confidence to buyers, especially when purchasing from online or second-hand retailers,” says Guy Halford-Thompson, founder of Blockchain Tech Ltd.

The company uses blockchain technology to create a secure registry, tracking who owns designer products. In turn, the database has everything a consumer needs to determine whether the product in hand is actually what it’s supposed to be.

With blockchain technology, individuals can track the entire journey of the item from assembly to vendor.

“While some consumers may be looking to purchase more affordable 'look-alikes,’ the concern comes from consumers who are looking to purchase genuine items, but because of the advances in manufacturing processes, it can be very difficult to distinguish between real and look-alike,” Halford-Thompson continued. “This is not a large concern when purchasing from known high-street stores, but it becomes a huge issue when consumers are looking to purchase new or second-hand items off online marketplaces.”

Although obtaining luxury goods is seemingly easier than ever before thanks to the Internet, not every seller is playing by the rules. Halford-Thompson says that watches, handbags and sunglasses are the most counterfeited items he’s seen on the market. However, he has confidence in blockchain and “smart tagging.”

“Smart tagging will provide consumers with a better brand experience, and a higher degree of confidence in the items they are buying,” Halford-Thompson adds.

And he isn’t the only one who feels this way.

“In five years, encrypted chips will be in all of your luxury consumer goods,” says Ryan Orr, CEO of Chronicled. “It’s not ‘if,’ but ‘when.’”

Similar to Blockchain Tech Ltd., Chronicled is a company that uses smart tags to track authentic sneakers that hit the market. With the Chronicled mobile app, shoe shoppers can scan the smart tag of the product and get all of the information about its authenticity in a matter of seconds.

As of right now, Orr claims that Air Jordan 11s and Yeezys are the most commonly counterfeited shoes. He adds, however, that his company is raising the stakes for counterfeiters by providing even more security to consumers.

“By combining blockchain technology and smart tags, undetectable forgery becomes impossible, and wearing fakes becomes socially risky,” Orr said.

But is doing the “uncool” thing by counterfeiting goods going to be enough to persuade people to stop? In the end, the answer may be “yes” for a majority of consumers.

“Trusted sneaker sellers earn at least a 20 percent premium, and it’s not just the ‘buy’ side of the transaction that affects consumers,” Orr points out. “Most of us don’t even consider trying to sell our authentic used luxury goods on the Internet because we know we won’t get fair value.”

However, there’s no doubt that counterfeiters are getting better.

“Wait until they start 3-D printing,” Orr warns.

Counterfeiters might always have a new trick, but blockchain technology will now be chasing the bad guys. Maybe, in the foreseeable future, it can even get ahead of them.

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Linux Foundation's Hyperledger Blockchain Project Announces New Members and Governance Structure

In December Bitcoin Magazine reported that a group of top tech and finance companies are joining forces with the Linux Foundation to develop a new open source blockchain separated from the Bitcoin blockchain. Digital Asset Holdings, the fintech startup headed by the financial superstar Blythe Masters, contributed its Hyperledger mark.

Last week, IBM started to reveal some details of its blockchain projects and strategy. John Wolpert, IBM’s blockchain offering director, said that Hyperledger code will become an open source industry standard, and developers will be able to build applications on top of Hyperledger. At the forthcoming Block Chain Conference on February 10 in San Francisco, Wolpert will give a keynote presentation titled “How to Make Block Chain Real for Business.” The address will focus on IBM’s point of view in this space and its contribution to the open source community led by the Linux Foundation.

Things are moving fast in the Hyperledger space. The Linux Foundation is announcing new members from across the industry, technical updates to the new Hyperledger Project and a formal open governance structure. “Think of it as an operating system for interactions,” says the new Hyperledger Project website. “It has the potential to vastly reduce the cost and complexity of getting things done.

“The Hyperledger Project has ramped up incredibly fast, a testament to how much pent-up interest, potential and enterprise demand there is for a cross-industry open standard for distributed ledgers,” said Jim Zemlin, executive director at The Linux Foundation. “Working on its own, even the largest global corporation could not match the speed at which our new members are moving blockchain technology forward. Such a broad effort and investment is sure to have a great impact on our personal and professional lives.”

A board of directors will guide business/marketing decisions and ensure alignment between the technical communities and members of the Hyperledger Project. Technical contributions to the project are welcome at any time, from anyone, and will be reviewed by the newly formed Technical Steering Committee (TSC), which is composed of industry-leading technical experts. Nominations are currently open for TSC members.

The announcement notes that the Hyperledger Project is a collaborative effort to focus on an open platform that will satisfy a variety of use cases across multiple industries to streamline business processes. Peer-to-peer in nature, distributed ledger technology is shared, transparent and decentralized, making it ideal for application in finance and countless other areas such as manufacturing, banking, insurance and the Internet of Things (IoT). “By creating a cross-industry open standard for distributed ledgers, virtually any digital exchange with value, such as real estate contracts, energy trades or marriage licenses, can securely and cost-effectively be tracked and traded,” says the Linux Foundation.

The Hyperledger Project has received proposed contributions from several companies, including Blockstream, Digital Asset, IBM and Ripple. Other community members are contemplating contributions of their own.

“The formation of Hyperledger marks a milestone in the advancement of distributed ledger technology,” said Digital Asset CEO Blythe Masters. “Digital Asset believes that it is vital for shared infrastructure to be open to critical inspection and collaboration, and this initiative will be pivotal in driving the global adoption of solutions to real-world problems.”

The updated list of Hyperledger founding members consists of 28 top companies in the technology and financial services space: ABN AMRO, Accenture, ANZ Bank, Blockchain, Calastone, Cisco, CLS, CME Group, ConsenSys, Credits, The Depository Trust & Clearing Corporation (DTCC), Deutsche Börse Group, Digital Asset Holdings, Fujitsu Limited, Guardtime, Hitachi, IBM, Intel, J.P. Morgan, NEC, NTT DATA, R3, Red Hat, State Street, SWIFT, Symbiont, VMware and Wells Fargo.

“The development of blockchain technology has the potential to redefine the operations and economics of the financial services industry,” said Richard Lumb, chief executive of Accenture’s Financial Services. “It emerges at an important time, as the industry strives to be leaner, more efficient and more digital. Open source development will accelerate the innovation and help drive the scalability of this technology, and we are proud to support the Hyperledger Project.”

Other statements by Hyperledger founding members focus on the non-banking applications of blockchain technology.

“We at Fujitsu are confident that blockchain technology will accelerate disruptive change, not only in the financial industry, but also in many other industries where it will be put to active use,” said Fujitsu Senior Vice President Takahito Tokita.

“We believe blockchain will quickly mature and spread to more industries,” said Masayoshi Ogawa, President of Hitach’s Financial Information Systems Division.

Other statements are available in the Linux Foundation press release. It appears that the Linux Foundation’s Hyperledger Project is moving very fast and is on its way to become a leading force in the blockchain technology development space.

Founded in 2000, the Linux Foundation wants to be the organization of choice for the world's top developers and companies to build ecosystems that accelerate open technology development and commercial adoption.

Photo Drupal Association / Flickr(CC)

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The Rise of User-Monetized Actions: Bitcoin's Killer Application

This article is an op-ed by Andrew DeSantis and the views expressed are those of the author.

On January 9th, 2007 the world as we know it was forever changed. Apple Computer CEO Steve Jobs took the stage at the Moscone Center in San Francisco and introduced the world to the iPhone.

Nine years later, many have trouble remembering what life was like before the rise of mobile. The average smartphone today is more than one million times smaller, one million times more affordable and one thousand times more powerful than a $60 million supercomputer was 40 years ago. As a result of successive radical innovation, we have truly changed the world, but more important, the world has forever changed us.

In 1998, when asked what keeps him up at night, Bill Gates had a surprising answer. As the CEO of Microsoft, one might have expected him to say Apple, Oracle or even Netscape. Instead he stated: “I worry about someone in a garage inventing something that I haven’t thought of.” Unbeknownst to Gates, at that very moment Larry Page and Sergey Brin were hard at work in a garage in Menlo Park. The fruit of their labor would go on to become Google.

Gates, like many of us, has accepted that change, particularly technological change, is one of the few constants in life and even the smartest among us can be caught by surprise.

Bitcoin Is Born

On January 3rd, 2009, less than two years after Jobs unveiled the iPhone, Satoshi Nakamoto sent an email to the renowned “Cryptography Mailing List” titled “Bitcoin v0.1 released.” The email contained a SourceForge link to the first Bitcoin reference client and the following statement:

“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double spending. It’s completely decentralized with no server of central authority.”

Nakamoto then went on to give a brief summary of Bitcoin’s implementation and explicitly add a disclaimer stating that the included software was still alpha and experimental.

When Jobs introduced the iPhone he had the attention of the entire tech world. Everyone knew the device would be a game changer, but no one could have predicted that five years later the iPhone would catalyze the creation of a ride-hailing application called Uber. Today Uber has an estimated worth of $62.5 billion, higher than that of car makers GM, Ford and Honda, and could very well go on to become the world’s first trillion-dollar company.

Nakamoto’s announcement on the other hand went relatively unnoticed by the public, but a handful of dreamers immediately realized the ramifications of Satoshi’s vision. The first to respond to Nakamoto’s email was cypherpunk legend Hal Finney. Three days later on January 12, Nakamoto executed the first Bitcoin transaction, in block 170, sending 10 bitcoins to Finney.

In May of 2010, roughly a year and a half after Bitcoin’s genesis block was mined by Nakamoto, two members of the BitcoinTalk community forum executed the first real-world purchase. 10,000 BTC for a $25 pizza. Five and a half years have since passed and with a near six-billion dollar market capitalization, it is safe to say that Bitcoin come a long way. But there is still a ways to go.

Bitcoin Grows Up

Since 2013 the Bitcoin industry has to a degree operated in stealth mode. Companies like 21 Inc, BitGo and Blockstream have been hard at work in collaboration with the Bitcoin Core developers to ready Bitcoin for the next and brightest stage of its life thus far. In the words of software legend Joel Spolsky, “Good software takes 10 years. Get used to it.”

21 Inc’s CEO, Dr. Balaji S. Srinivasan, stated the following in a lecture at Stanford Universityprior to founding 21:

“A good founder is capable of anticipating which turns lead to treasure and which lead to certain death. A bad founder is just running to the entrance of (say) the ‘movies/music/filesharing/P2P’ maze or the ‘photo sharing’ maze without any sense for the history of the industry, the players in the maze, the casualties of the past, and the technologies that are likely to move walls and change assumptions.”

So what about Bitcoin is likely to “move walls” and “change assumptions?” While user-monetizable data is of significant importance to Bitcoin’s future, the concept of “user-monetizable actions” is of far greater importance.

The DARPA Network Challenge

At 10 a.m. EST on December 5th, 2009 (this date was picked to commemorate the 40th anniversary of the Internet) the Defense Advanced Research Projects Agency (DARPA), known for creating the ARPANET, a precursor to the Internet and contributing to the onion protocol used by the Tor network, launched 10 red balloons in undisclosed locations across the continental United States. A month earlier DARPA proposed an open challenge to teams across the nation. The first team to locate all 10 balloons and report their findings to DARPA would receive a $40,000 reward. What happened next exceeded the researchers’ wildest expectations.

Less than nine hours after DARPA launched the balloons a team from MIT won the competition. How did they do it? By embracing the concept of user-monetizable actions.

In 2005, Jon Kleinberg, of the Department of Computer Science at Cornell University, and Prabhakar Raghaven of Yahoo! Research published a paper titled “Query Incentive Networks.” In it they state:

“The concurrent growth of online communities exhibiting large-scale social structure, and of large decentralized peer-to-peer file-sharing systems, has stimulated new interest in understanding networks of interacting agents as economic systems. Here we formulate a model for query incentive networks, motivated by such systems: users seeking information or services can pose queries, together with incentives for answering them, that are propagated along paths in a network. This type of information-seeking process can be formulated as a game among the nodes in the network, and this game has a natural Nash equilibrium. In such systems, it is a fundamental question to understand how much incentive is needed in order for a node to achieve a reasonable probability of obtaining an answer to a query from the network.”

Building off the ideas presented in Kleinburg and Raghavan’s research, the team from MIT came up with the following strategy:

“We’re giving $2000 per balloon to the first person to send us the correct coordinates, but that’s not all – we’re also giving $1000 to the person who invited them. Then we’re giving $500 to whoever invited the inviter, and $250 to whoever invited them, and so on.

It might play out like this. Alice joins the team, and we give her an invite link like http://balloon.media.mit.edu/alice. Alice then e-mails her link to Bob, who uses it to join the team as well. We make a http://balloon.media.mit.edu/bob link for Bob, who posts it to Facebook. His friend Carol sees it, signs up, then twitters about http://balloon.media.mit.edu/carol. Dave uses Carol’s link to join … then spots one of the DARPA balloons! Dave is the first person to report the balloon’s location to us, and the MIT Red Balloon Challenge Team is the first to find all 10. Once that happens, we send Dave $2000 for finding the balloon. Carol gets $1000 for inviting Dave, Bob gets $500 for inviting Carol, and Alice gets $250 for inviting Bob. The remaining $250 is donated to charity.”

In essence the MIT team designed a recursive algorithm executed by willing participants by redistributing the prize money to the participants in such a way that a power incentive structure came to life.

While the MIT team’s accomplishment is significant, particularly from the perspective of academia, it wasn’t the only major insight derived from the DARPA Network Challenge. Hacker George Hotz, known as geohot, in 2007 was the first person to carrier-unlock an iPhone. Hotz later went on to jailbreak Sony’s PlayStation 3. Hotz recently made headlines when he and a writer from Bloomberg Businessweek took a drive around the San Francisco Bay area in a self-driving car he built alone in just a month. An hour prior to the start of the DARPA Network Challenge, Hotz tweeted to his then roughly 50,000 followers asking for their assistance in locating the balloons. Through his network Hotz located four ballons; he was then able to trade information with other teams ultimately bringing his balloon count to eight.

The approach taken by the MIT team displays the raw power that a properly designed algorithm can have outside as well as inside the confines of Silicon. Hotz’s approach, on the other hand, allows us to contrast the academic perspective with that of a single hacker wielding influence over a network of individuals.

If one combines the two approaches, by using Bitcoin to send microtransactions to their own network of followers, what you end up with is a variant of Kleinberg and Raghavan’s Query Incentive Network model that allows one to execute MapReduce-like operations over a large network of willing participants.

The Power of End-User Monetization

We can change our perspective, yet again, and view things through the eyes of an end user performing tasks on behalf of another individual. While this sounds like a new concept it really isn’t. Celebrities have monetized their actions on Twitter and Facebook for years. The musician Jared Leto and socialite Kim Kardashian have reportedly received payments as high as $13,000 per tweet for promoting products that fall in line with their personal brand.

Until now, it hasn’t financially made sense for a user with a few thousand followers to receive payments for endorsements. Additionally, most celebrities tend to rely on agents who cut deals with sponsors on their behalf. Even if the average user put in the effort to build a network of sponsors, it is highly unlikely that a sponsor would want to deal with a user whose follower count is below 100,000. As with most scenarios that rely on the ability to perform microtransactions, the pre-Bitcoin banking system isn’t designed to handle small, fast, international transactions.

Earlier this week Srinivasan presented his thoughts on the future of user-monetizable actions. After presenting scenarios such as the Twitter covered above and derivatives such as a Bitcoin-based, decentralized version of Fiverr, he left two questions to ponder:

  • What would life be like if even while you were asleep an autonomous agent handled requests that earned Bitcoin on your behalf?

  • What would you do with your own personal army of willing, waiting, able and ready individuals?

Final Thoughts

The Bitcoin Engineering class at Stanford University has gone tremendously well. Likely because a majority of the students enrolled in the course have little to no previous knowledge about Bitcoin, they will be able to leverage the abstractions provided by the 21 Bitcoin Computer’s two1 Python3 library and quickly rhapsodize applications into existence without the burden of knowledge (fatigue) many of us have accumulated over the years.

A computer science student named Axel Ericsson hacked together his own tunneling protocol allowing him to securely communicate with his 21 Bitcoin Computer from a web browser. While a future release of the two1 library will likely support browser-to-machine BitTransfers triggered by 402 requests, today the 21 Bitcoin Computer is being used for machine-to-machine transactions. Most likely, Axel executed one of the world’s first 402 request transactions initiated from a web browser in exchange for user-monetizable data.

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World's First Bitcoin Mining IPO Misses Target by AUD $14 Million

This post is by Benjamin Roussey

The first fundraising in the world for an initial public offering of a Bitcoin mining company has raised 5.9 million Australian dollars, (USD $4.2 million) – falling short of its target of AUD $20 million.

Based in Melbourne, the Bitcoin Group announced last week that it had raised AUD $5,927,168.40 in a bookbuild of its Australian Stock Exchange (ASX) listing. The company also announced that it was still progressing though the listing process with ASX.

Even though the amount raised was less than a third of the amount it tried for, CEO of Bitcoin Group Sam Lee called it a “solid result.”

During an interview on CNBC on Tuesday, Lee said the amount raised is sufficient for the company to execute its current strategy of acquiring new mining equipment to expand its footprint.

Although it was scheduled to take place on Tuesday, Bitcoin Group has not yet announced its quote on the ASX. It is expected that the company will trade under the ticker BCG.

The price of shares was at AUD $0.20, with AUD $2,000 as the minimum subscription. There is no maximum subscription. According to the Australian Taxation Office, Bitcoin is an asset for capital gains tax purposes.

This is the first time a publicly listed entity has been led by the Bitcoin Group Management since its incorporation in September 2014. Lee, the CEO, has a background in financial services and digital media.

On CNBC, Nicolas Debock, a venture capitalist at Balderton Capital in London, said he would need to think twice before investing in a Bitcoin mining firm, as it has a number of risks. He added that many venture capitalists have invested in Bitcoin in the last three years, but there still has been no money coming out.

Bitcoin Group produces approximately 1.2 percent of the world’s Bitcoin mining output, with six mining sites in Iceland and China. Due to the affordability of electric supply in China, a large percentage of its operations are conducted in China. However, since it is significantly lacking in diversification, the company could be left vulnerable to changes in regulations resulting from the Chinese stance on Bitcoin.

If the company had raised the AUD $20 million it had hoped for, the plan was to use AUD $18 million as an investment in equipment and facilities for Bitcoin mining. The remaining AUD $2 million was to be used for general corporate purposes, including costs for listing.

On CNBC, Debock said that a large number of people still believe in Bitcoin in the long term, whether it is the technology or the asset.

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February 14, 2016 -
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