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Bitcoin Might Lose Cloak of Anonymity to 2 New Upstarts

Bitcoin has risen to international prominence as an alternative to fiat currencies because it provides a degree of privacy not found in fiat currencies. You don’t need to reveal your name or any other details of your personal identity when you use Bitcoin for transactions. In fact, transaction details are converted into a string of letters and numbers designed to protect the identity of both buyers and sellers.

The anonymity cloak helps to keep Bitcoin decentralized and devoid of government control or interference. However, Bitcoin transactions are not completely anonymous because each transaction is recorded permanently in a public ledger. Now, Bitcoin users have to grapple with the reality that modern investigative and analytic techniques have started to make it possible to peel away the covers of anonymity in Bitcoin transactions.

Sadly, the fact that Bitcoin might not be as anonymous as previously imagined is already causing the emergence of new cryptocurrencies with better cloaks of anonymity. This article examines two of the latest Bitcoin wannabes.

Meet Zcash, offering confidential transactions

zcash-logoZcash is a new cryptocurrency launched last month as ” an open and programmable financial system” that has a special focus on privacy because “companies need privacy in order to conduct their business; and we believe that privacy strengthens social ties and social institutions, protects societies against their enemies, and helps societies to be more peaceful and more prosperous. ”

Zcash’s emphasis on privacy has made it an overnight success causing the value of a unit ZES to rise all the way to $5000 soon after the launch last Friday—it has since settled to about $500. Interestingly, the founders of Zcash admit that the cryptocurrency’s emphasis on privacy could make it a choice means of exchange for illegal activities in much the same way that Bitcoin was the defacto legal tender on Silk Road before it was shut down.

Nonetheless, the Zcash founders have generalized that

“bad guys will use anything. Bad guys use cars, bad guys use the Internet, bad guys use cash, bad guys use the current banking system. Our goal is not to invent something that bad guys can’t use, it is to invent something that can empower and uplift the billions of good people on this planet.”

Zcash Genesis Block

Meet Monero, offering untraceable transactions

monero-logoMonero is a cryptocurrency that claims to be “secure, private, untraceable currency. It is open-source and freely available to all.” The main selling point of Monero is that transaction details are kept private in sharp contrast to Bitcoin where transactions are stored in a public ledger.

Monero also goes to great lengths to ensure that transactions cannot be traced to any user by leveraging ring signatures, which are a group of cryptographic signatures with at least one real participant, thereby making it practically impossible to know the person who spent or receive funds.

Monero – How it works and Current Market Status

Final words…

However, both Zcash and Monero are still in their early days and it is somewhat hasty to pronounce any judgment on how they are likely to fare against Bitcoin. Bitcoin enjoys a first-mover advantage in the cryptocurrency market and it is not likely to cede marketshare over to newcomers overnight. More so, Bitcoin is time-tested and proven after withstanding series of mishaps that could have rendered it useless as a currency.

More importantly, Bitcoin has been able to find fair value against the U.S. dollar after it went through some impressive skyrocketing and crashes in its value. Hence, people are more likely to use Bitcoin for the stability it offers instead of going through the stages of acceptability with every new currency that debuts.

Bitcoin Gets a Chance to Prove Itself in Switzerland

If you are heading out to Europe, Switzerland to be precise, you can expect to have another opportunity to buy and sell Bitcoin. Breaking news suggests that Switzerland’ railway firm, SBB will start using its ticket machines to sell Bitcoin. Bitcoin is steadily building up momentum as an alternative currency that can take the place of fiat currency. Bitcoin’s appeal as an alternative currency lies in the fact that is a decentralized cryptocurrency free from the influence of central banks. Central bankers tend to print money out of thin air and the current globally monetary system is a hoax at best.

Switzerland national railway firm to start selling Bitcoin

sbb_logoStarting from November 11, customers of Switzerland’s national railway line, SBB can expect the launch of a new service to buy and sell Bitcoin. On Oct.28, SBB announced that it would commence a two-year pilot program in which it would see how well Swiss people have embraced the use of Bitcoin. Under the pilot program, you can easily trade in your Swiss francs for Bitcoin at the prevailing market rate.

It should be noted though that the SBB doesn’t yet accept Bitcoin as payment for tickets. Rather, the SBB wants to leverage is nationwide coverage to provide people with easier access to the cryptocurrency. In a statement, the SBB maintains that “There have been few possibilities to obtain bitcoins in Switzerland until now…With its 1,000-plus ticket machines, SBB operates a dense, around-the-clock distribution network that’s suited for more than just ticket sales.”

SBB also revealed that it would be working with digital payments company, SweePay to provide a physical location for people to top up their Bitcoin wallets. If you want to buy Bitcoin with Swiss Francs on any of the SBB ticket machines, you’ll need to have a Bitcoin wallet and you also need to Swiss mobile phone. If you have the wallet and a phone, you can start buying up Bitcoin and you can buy between 20 Francs and 500 Francs of Bitcoin in each transaction.

purchase-sbb-tickets-with-bitcoin

Here’s why SBB wants to become a Bitcoin distributor

Interestingly, the inherent features of Bitcoin makes it easy for the cryptocurrency to serve as a better alternative to fiat currencies. To start with, Bitcoin has very negligible transaction costs that provides both buyers and sellers with savings that would have normally gone to third-party payment processors. The SBB’s decision to start a Bitcoin service stems from it’s a strong suspicion that Bitcoin could emerge as a major global currency.

Secondly, Bitcoin provides freedom and easy of transaction and it could easily serve as a means to bring the ‘unbanked’ or ‘underbanked’ into the financial markets. It is quite easy to set up a Bitcoin wallet and you often do not need to go through the circuitous process that banks require before they can open a bank account for you. More so, Bitcoin is also free from the interference of the government and its agents; hence, people don’t have to worry that an intermediary ill freeze their account, place a limit on their transactions, or even seize their funds.

Bitcoin sales with SBB railway service

This start up is about to revolutionize how billions in retail dollars are spent

The gift card problem

“After carefully studying the gift card industry it has become clearly evident that it is time that new technology be utilized to enhance the customer experience. Perhaps the biggest change in gift-giving is the rise of the virtual gift, in the form of e-gift cards. These transactions will all be conducted online and new forms of delivery and security will need to be implemented as recipients find new ways to use the gift cards.” Centz President, Swen Swenson

The Gift card industry has traditionally positioned itself as another marketing channel that merchant’s use to increase sales at very little expense. They are often sold to consumers, offering them different denominations and promoting them as great gift ideas. Most gift card holders do not pay enough attention to the stored value on their cards and many times vendors count on consumers to either lose them or not use the full amount, leaving the retailer with increased profits and the consumer with diminished value. This is why Centz is launching a multi-faceted disruptive business model that will radically change the gift card issuing and redemption marketplaces.

The gift card market

The Gift Card Market

The Gift Card industry is huge and is estimated to have a market cap of around $160 Billion. Last year alone, over 2 Billion gift cards were purchased  in the USA, which tallies it to 6 gift cards per person. With an estimated $435 million in transactions forecasted for gift cards every day, the coming year looks promising for the industry. Historically the industry counts on 20% of gift cards (roughly equivalent to $34 billion) to be left unused.

Popular Gift Card Types

Centz’s gift card solution

Understanding the potential of this market, Crypto startup Centz is looking to provide gift card holders with the option to make them fungible. The average US household has $300 in gift cards that remain unused owing to various constraints. Centz aims to give the consumers complete control over their gift cards by letting balances be transferred.

Centz's gift card solution

Roger Aitken, a Forbes contributor recently had this to say about Centz technology in his piece titled: Disruptive ‘Crypto’ Startup Centz Eyes $160Bn Gift Cards Market

The start-up firm’s patent-pending technologies include a multi-stage security system, which is part of their ‘secret sauce designed to eliminate gift card fraud, and a gift card mobile wallet. By combining these technologies Centz provides consumers what it touts as “control over their gift cards”.

Effectively, the Centz gift card multi-stage fraud and security system takes control of each and every credit and employs digital encryption for security. On top of that, Centz utilizes what is dubbed a unique “machine learning layer” as part of the protocol.

As regards Centz developing a digital wallet, this will enable users to store all their digital credits in one place. More importantly, it is claimed that this ensures that the consumer never leaves their digital credits behind. Centz is pairing their “disruptive vision” with future gift-giving from day one.

How Centz works

Swen Swenson, President of Centz described the vision as follows:

“Perhaps the biggest change in gift-giving is the rise of the virtual gift, in the form of e-gift cards. These transactions will be conducted online and new forms of delivery and security will need to be implemented as users find new ways to use gift cards.”

Banking on the decentralized network, Centz is introducing a digital currency: Centz Gold Bucks (CGB’s) to facilitate its services.  The platform enables the consumers to combine all the gift cards into one single lump that can be stored as Centz Gold Bucks (CGB’s). Through CGB’s consumers will be able to spend their gift card money easily whenever they want at places where gift cards are used. This is basically letting consumers use any gift card balance as they would with  traditional currency, aka fiat.

The venture has already filed two patents around the modus operandi of the network and its security. How this unique innovation shapes up to disrupt the gift card industry will be an interesting journey to watch.

Participate in the Centz token crowd sale

Centz token crowd sale

In the new age of digital currency, crowd-funding has become easier than ever before so for this purpose Centz  has teamed up with OpenLedger for their highly anticipated token crowd sale. OpenLedger makes this possible through blockchain technology, smart investments and the good will of people. If you would like to stay informed or participate in the token crowd sale, you can sign up here:  Centz ICO coming soonThere will be an Early Bird Special buy-in for those who do.

Get Centz! Intro Video

New York is Gradually Losing its Shot at Becoming a Global Bitcoin Hub

Bitcoin is a modern cryptocurrency that evokes mixed reactions and feelings in the traditional monetary and financial sectors. However, while the rest of the world was struggling to understand Bitcoin and its potential for disrupting the global economic landscape, New York was setting up regulations that would make the city a global hub for Bitcoin.

In fact, in 2015 New York’s Department of Financial Services (DFS) created rules that made it easy for Bitcoin to thrive and flourish in the city. One of the rules made to enable Bitcoin in the city was the requirement that all virtual currency firms in the state get a “BitLicencse”. The BitLicense was a sort of regulatory approval for them to hold customers fund and for them to provide exchange services for dollars and other currencies for virtual currencies such as Bitcoin.

New York has only issued 2 Bitcoin Licenses in Almost 2 years

Interestingly, the BitLicense can be used as a gauge of how well New York has succeeded in its bid in to become the Bitcoin Hub of the world.  However, Reuters reports that New York seems to have lost its drive to champion the cause of Bitcoin; at least, based on inferences from the state’s issuance of BitLicenses.

Reuters reports that since 2015 when New York made the rules that would guide the operation of Bitcoin, the city has only issued two (2) BitLicenses. The more worrisome part is that the city has 15 pending BitLicense applications, four firms have withdrawn their applications, and four applications have been denied. One would think that New York would be crawling with firms dealing in virtual currency by now, but it appears that the city doesn’t have the momentum to stay the course of supporting Bitcoin.

However, in September, Deloitte said New York was in the third position behind London and Singapore as a fintech destination or hub. Of a truth, the fact that Bitcoin is a digital cryptocurrency that provides privacy in financial transactions has placed it in the black book for financial authorities. However, the fact that Bitcoin has many apparent advantages over fiat currencies makes it hard for financial regulators to dismiss or denounce it altogether. Hence, most financial hubs are choosing to group Bitcoin as a type of FinTech.

Why is New York losing momentum to champion Bitcoin?

One of the reasons behind New York’s lag in creating a Bitcoin hub is the exit of Benjamin Lawsky who headed the DFS last year when the rules were being created. Lawsky’s exit also led to the exodus of some key staffers who were knowledgeable about building regulatory framework for virtual currencies.

Patrick Murck, a lawyer and fellow at Harvard University’s Berkman Klein Center for Internet & Society observes that “by putting the regulations together and having key staff members leaving almost thereafter, they really put the industry behind the eight-ball in terms of competing with traditional service providers.”

The second reason New York has not been able to dominate the FinTech scene with a special emphasis on Bitcoin is that its regulatory process is cumbersome. The application fee costs a whooping $5000 and the documentation is reportedly about 500-pages long. It appears that the process for getting Bitlicenses is designed to ‘extract’ maximum information about users – a move which runs afoul to the founding principles of Bitcoin.

Bitcoin and the NY Bitlicence proposed regulations