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Bitcoin Security Pioneer BitGo Raises $12 Million in Series A Financing from Redpoint Ventures, Stratton Sclavos and Syndicate of Leading Bitcoin Investors
Former Verisign CEO and Other Online Finance Luminaries Join Forces With BitGo to Shape Future of Digital Money
BitGo™, the leading Bitcoin security platform, today announced it has raised $12 million in Series A financing led by Silicon Valley venture capital firm Redpoint Ventures. Previous investors Bridgescale Partners, Jeff Skoll, Bill Lee, and Eric Hahn participated in the round. New investors include Radar Partners, Founders Fund, Barry Silbert’s Bitcoin Opportunity Corp., Liberty City Ventures, Crypto Currency Partners, Ashton Kutcher & Guy Oseary’s A-GRade Investments, and a number of top Bitcoin industry executives and angel investors. This financing makes BitGo one of the most well-funded companies in the Bitcoin ecosystem and positions the company for significant growth.
BitGo also announced that Jeff Brody, founding partner of Redpoint, and Stratton Sclavos of Radar Partners will join its board of directors. Mr. Sclavos was the CEO of Internet security firm Verisign from 1995 to 2007, and has served on the boards of public companies Intuit, Juniper Networks, and Salesforce.com.
“Bitcoin has opened a new frontier much like the advent of the commercial Internet in 1994,” said Stratton Sclavos, Partner at Radar Partners and former CEO of Verisign. “This new industry simultaneously promises endless possibilities while facing meaningful security threats. We believe that Bitcoin’s inherent advantages over existing financial services infrastructure, combined with BitGo’s best-in-class security platform, will accelerate the adoption of digital money as fundamentally as the Internet changed global communication and publishing.”
BitGo (www.bitgo.com) operates a Bitcoin security-as-a-service platform based on its patent-pending multi-signature technology. The company currently offers the world’s most secure online Bitcoin wallet for individuals, and BitGo Enterprise™ (bitgo.com/enterprise), the first multi-sig, multi-user solution for corporations and financial institutions to manage their Bitcoin holdings with enterprise-grade security. The company also enables exchanges, marketplaces, and e-commerce players to use its platform to facilitate secure, multi-party transactions that are secured with BitGo.
BitGo’s founding team is comprised of financial technology, online security, and digital currency veterans Will O’Brien, Mike Belshe and Ben Davenport.
Given a sufficient level of security, Bitcoin is a game-changing technology for global commerce and capital markets. With its decentralized, peer-to-peer ledger of transactions and clearing system, Bitcoin is poised to disrupt traditional payments and money transmission by reducing transaction fees and eliminating fraud and chargebacks. In the developing world, Bitcoin is being adopted as a viable alternative to legacy currencies for storing and transferring wealth.
“We are still in the early innings of the Bitcoin revolution,” said Will O’Brien, chief executive officer and co-founder of BitGo. “BitGo’s mission is to secure the world’s Bitcoin. By solving Bitcoin’s early security concerns for our customers and industry partners, BitGo is excited to help the Bitcoin industry grow with what we believe will be a speed and scale comparable to the Internet itself.”
ENTERPRISE-GRADE BITCOIN SECURITY WITH MULTI-SIG
BitGo offers a complete platform featuring enterprise-grade security, multi-signature wallets, transaction signing policies, private key generation and management, and robust authentication.
Prior to BitGo’s market entry in 2013, Bitcoin wallets were backed by one private key, creating the single point of attack that led to many of the well-publicized security breaches in recent years. BitGo developed a “2-of-3 key” multi-signature wallet in which three keys are issued and any two are required to sign a transaction – the digital equivalent of a bank safe deposit box.
The company has created a range of innovative security products that leverage and strengthen emerging industry standards, including BIP16 (P2SH) and BIP32 (hierarchical deterministic wallets).
ABOUT BITGO, INC.
Silicon Valley-based BitGo launched the first ever multi-signature Bitcoin wallet in 2013, and continues to create innovative security services on top of emerging industry standards. The company operates a security-as-a-service platform that powers the industry’s most secure, online Bitcoin wallet and enterprise solutions for corporate treasury and key management.
BitGo was founded by veterans in online security, digital currency, and financial technology. Investors and advisors include elite Silicon Valley venture capitalists and angels, and Bitcoin industry insiders who have backed successful companies like PayPal, Netscape, Red Hat, Proofpoint, Verisign, Juniper Networks, Yammer, and Tesla.
BitGo, BitGo Enterprise, Secured with BitGo, and BitGo Cold Key are the trademarks and service marks of BitGo, Inc.
To learn more about BitGo, visit: https://www.bitgo.com.
Follow BitGo on Twitter: twitter.com/BitGoInc.
Follow BitGo on Facebook: www.facebook.com/bitgoinc
Access BitGo press resources: bitgoinc.com/press
Visit BitGo’s blog: bitgoinc.com/blog
BREAKING NEWS – In a landmark move, Apple has updated its developer guidelines to officially allow apps that transact in Bitcoin and other virtual currencies.
According to the Developer Guidelines section 11.17:
Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions
This means that developers can now build iOS apps for Bitcoin wallets. And Coinbase, Blockchain, and Fancy can all return their apps to the store.
A Change of Heart by Apple Concerning Bitcoin
Until today, Apple has not been a supporter of Bitcoin apps, and in the past, the company has rejected any app that transmits bitcoins.
News apps like ZeroBlock and BlockStreet were approved for distribution in the App Store, but apps that traded Bitcoin like Coinbase, Blockchain and Fancy were rejected or removed from the store.
These actions led to an uproar by the Bitcoin community in February of this year.
Blockchain.info published a blog post called Blockchain’s Response to Apple, in which they said: “On Wednesday February 5th, Apple attempted to strike a devastating blow to the bitcoin ecosystem on iOS by removing “Blockchain”, the last remaining bitcoin wallet app, from the App Store.” The company criticized Apple for being anti-competitive and practicing censorship.
“By removing the blockchain app, the only bitcoin wallet application on the App store, Apple has eliminated competition using their monopolistic position in the market in a heavy handed manner,” wrote Blockchain.info.
There were dozens of articles that piled on this news, positioning this issue as a Bitcoin v. Apple deathmatch. One Bitcoiner even shot his iPhone with a rifle out of protest.
Blockchain was not the only one impacted by Apple’s former policies.
Coinbase, the popular US-based Bitcoin exchange, launched an iPhone app that was taken down by Apple after a few weeks.
Popular iPhone app Fancy removed Bitcoin payments due to Apple’s request.
It looks like this feud has come to rest. We are excited to see the innovation from Bitcoin entrepreneurs that will come to iOS.
Last night in Seattle, 150 people gathered at Spitfire, a sports bar in the heart of Belltown, to witness the launch of the first Bitcoin ATM kiosk in Washington State.
The launch event was hosted by Coinme, a Seattle-based startup who purchased and installed the Bitcoin ATM kiosk, manufactured by Robocoin. Coinme’s mission is to increase crypto-currency literacy, build the local crypto-currency economy, and provide the safest and most secure solution for buying and selling Bitcoin through their newly deployed Bitcoin kiosks.
“Coinme was created out of the frustration we had with the current state of the Bitcoin market,” said Coinme General Manager Nick Hughes. “In order to reach its full potential, the cryptocurrency industry needs more accountability and consumer protection. The market also needs more leaders who are offering education and community outreach. Coinme was founded with the goal of bringing all of those factors together. The kiosk is just the start.”
The Coinme team, including Hughes and Compliance Officer Neil Bergquist, invited attendees to try out the kiosk and buy or sell Bitcoin, and would be Bitcoiners lined up eagerly to take their turn.
One such newcomer was 71-year-old Michael, a resident of Colorado who was visiting his son in Seattle. He registered with the Bitcoin kiosk in a few minutes and then bought his first bitcoins, $40 worth.
“I was surprised at how easy it was,” said Michael. “Although I had wanted to own some Bitcoin, I had been wary of wiring money to offshore exchanges. This kiosk gave the confidence to trade in some cash.”
A Discussion with Bitcoin Experts
In addition to showcasing the kiosk, Coinme also hosted a panel of Bitcoin experts, featuring Patrick Murck, General Counsel of the Bitcoin Foundation, Will O’Brien, CEO of Bitcoin security company BitGo, and Charles Fitzgerald, Seattle-based angel investor and Bitcoin enthusiast. The panel was moderated by Jonathan Sposato, serial entrepreneur, investor and chairman of Geekwire.
The panel addressed questions ranging from “what is Bitcoin?” to “why will Bitcoin change the world?” to “why is Seattle positioned to embrace the Bitcoin revolution?”
Patrick Murck shared his views about the global opportunity for Bitcoin. “The informal, ‘System D’ economy represents a $10 trillion market opportunity that is largely unaddressed,” explained Murck. “Permission-less global finance using systems like bitcoin gives entrepreneurs the tools to address that market and at the same time help people in the global south create new sources of wealth within their own community.”
Will O’Brien expressed an enthusiasm that Bitcoin is here to stay. “The digital currency genie has left the bottle. Bitcoin will drive much needed innovation in our financial services ecosystem, and adoption is increasing at an incredible pace,” said O’Brien whose company, BitGo, uses multi-sig technology to secure Bitcoin investments and transactions.
Charles Fitzgerald described how Seattle’s can capitalize on this opportunity. “Bitcoin plays incredibly well to Seattle’s strengths. We’re a deep tech, platform software town with a lot of retail and ecommerce talent. And we have no banks.” Fitzgerald, a veteran of Microsoft and long-time investor, is keen to see Seattle become a major driver of financial services innovation.
A Level Playing Field
What made this event special is that it was attended by Bitcoin veterans and rookies alike. The Coinme kiosk leveled the playing field for getting into Bitcoin. Everybody, who wanted to, could walk out that night with more Bitcoin in their digital wallet.
Coinme is accepting appointments for customers to try out the Bitcoin ATM kiosk. Or you can go to Spitfire and use it on your own.
Learn more at www.coinmekiosk.com.
Disclosure: Will O’Brien (referenced in this article) is the owner of On Bitcoin.
New Suite of Services Enables Safe, Easy Commercial Bitcoin Transactions
BitGo, a leader in Bitcoin multi-signature security, today announced BitGo Enterprise™, a new suite of services for businesses and financial institutions operating in digital currency. With features such as spending and velocity limits, user management, and 24×7 monitoring, BitGo’s new offering allows businesses of any size and technical ability to take advantage Bitcoin-based opportunities.
“Until now, many enterprises faced challenges using Bitcoin due to the risks associated with securing and accessing Bitcoin assets. BitGo Enterprise was designed from the ground up to give organizations the power to securely store and effectively manage Bitcoin holdings,” said BitGo CEO and co-founder Will O’Brien, who is presenting today on the topic of multi-sig security at Inside Bitcoins in New York City. “Corporate treasury, key management, and reporting are important considerations for companies using digital currency. As an affordable, scalable and completely secure solution that addresses each of these needs, BitGo Enterprise allows any business to safely and easily embrace the substantial advantages of Bitcoin.”
California-based BitGo launched the industry’s first multi-sig Bitcoin wallet in 2013, and continues to create innovative security services on top of emerging industry standards. The company was founded by veterans in online security, digital currency, and financial technology, and is backed by Silicon Valley investors including Bridgescale Partners, Bill Lee (Remarq, Tesla, Yammer), and Eric Hahn (Netscape, Red Hat, Proofpoint).
BITGO MULTI-SIG WALLET AND BITGO ENTERPRISE™ OVERVIEW
BitGo’s multi-sig wallet leverages two emerging standards in Bitcoin: BIP16 (P2SH) and BIP32 (hierarchical deterministic wallets). BitGo uses a “2-of-3 key” configuration in which three keys are issued and any two are required to sign a transaction. This key management protocol ensures that an organization’s funds are protected from theft and loss while remaining easily accessible for normal business use. When a transaction is initiated, BitGo authenticates a user’s identity, adheres to corporate treasury policies and spending limits set by the organization, and validates the transaction against a robust set of network fraud patterns.
“Many features of our enterprise suite such as the corporate treasury tools are totally unique on the market,” said BitGo CTO and co-founder Mike Belshe. “The ability for organizations to assign spending limits and velocity limits, enact delays on large transactions and whitelist recipient addresses – all under the umbrella of BitGo’s multi-signature security – allows businesses to fully realize the benefits of using Bitcoin as a medium of exchange.”
In addition to BitGo Enterprise, the company is also announcing the introduction of an innovative new approach to cold storage, called BitGo Cold Key™, in which one or more keys in BitGo’s multi-sig wallet are generated and stored offline.
SETTING A GOLD STANDARD FOR BITCOIN SECURITY
BitGo is recognized by Bitcoin industry leaders for its bank-grade security and flexible enterprise feature set.
Tony Gallippi, CEO of BitPay, a leading Bitcoin payment processor with over 27,000 registered merchants, said, “BitGo has created best-in-class security solutions for the enterprise and is pioneering the commercial adoption of multi-sig. I’d like to see all of BitPay’s merchants protected by multi-sig wallets by the end of 2014.” BitPay plans to promote BitGo’s business wallet to its merchants starting this month.
BitGo enterprise customer Sator Square Partners, a digital currency alternative investment manager created by former Tradehill and Wall Street executives Robert Adler and Jonathan Silverman, has agreed to use BitGo for security and unique back-office solutions.
“We believe that BitGo understands the needs of the growing Bitcoin ecosystem and is developing state-of-the-art security solutions for institutional clients,” said Robert Adler of Sator Square. “BitGo’s highly experienced management team, adaptable core technology and willingness to adapt its solutions for unique client needs make them an ideal partner for digital currency asset managers such as Sator Square.”
In addition, BitGo has support of some of the top companies pioneering Bitcoin adoption for the mainstream.
Vinny Lingham, CEO of Gyft, a leading digital gift card platform that accepts Bitcoin, explained, “BitGo has built bank-grade solutions that enable Gyft to securely store and spend Bitcoin, giving me and my board peace of mind with our Bitcoin holdings.”
BitGo Enterprise is now available for business customers to sign up at https://www.bitgo.com/enterprise.
“I believe there are multiple billion dollar companies that are going to be built in Bitcoin” — Jeremy Allaire, Circle CEO
The Inside Bitcoins conference and expo in New York City kicked off this morning. Mediabistro Chairman Alan Meckler opened the show with remarks about the growth in professional interest for Bitcoin. Over 2,000 attendees are at the show from 30 countries. There are also 42 exhibitors. Compare this scale to last year’s NYC conference with 150 attendees and 3 exhibitors.
Mr. Meckler compared this point in time for Bitcoin to the early days of the commercial Internet. Meckler started the first trade show for the Internet which grew to 75,000 attendees within 3 years. “Bitcoin has a lot of the trappings of those early days of the Internet,” said Meckler.
Jeremy Allaire, Circle CEO, took the stage to deliver the conference keynote.
Mr. Allaire also put Bitcoin in the context of the commercial Internet, comparing Bitcoin’s life stage today to the state of the Internet in 1994. There has been a surge of entrepreneurial activity, with about 2,000 companies formed in the Bitcoin ecosystem, but there is yet to be a “killer app”, like the Netscape browser was for the Internet.
There is very limited consumer engagement, said Allaire, suggesting that 90% of Bitcoin users are buying and holding as an investment.
“The total volume [of Bitcoin transactions] is equivalent to 1 small cap stock,” said Allaire. “But that shouldn’t be a concern for us.” Allaire said that we should expect mainstream adoption to take 10 years, as it did with the Internet and with smartphones.
Allaire’s company Circle has raised two rounds of funding for a total of $26 million. The company has yet to launch a commercial product or service.
Mr. Allaire touched on a few key themes during his keynote.
Technology – Allaire emphasized the importance of developing core Bitcoin infrastructure. The Bitcoin network can currently handle about 9 transactions per second, said Allaire. “In the vision we have for this platform to carry a large percentage of payments and commerce, that’s not going to scale.”
Identity and security – Allaire said he believes that Bitcoin cannot be fully anonymous from law enforcement. Financial privacy can be preserved in the protocol while enabling an audit trail for chasing criminal behavior. In the development of the Internet, the industry moved toward standards and companies, such as Verisign and RSA, formed to provide identity and security infrastructure for the Web. Without those developments, no one would ever feel comfortable entering their credit cards online.
Government collaboration – The technology needs to remain open, said Allaire, like core Internet protocols from HTTP to SMTP. But the industry needs to embrace and collaborate with governments around the world. Without this partnership, mainstream consumer adoption simply won’t happen, said Allaire.
“We’re still on a 1.0 platform,” explained Allaire, “but that shouldn’t discourage us.” Allaire said he personally believes that there will be several billion-dollar companies created to service the Bitcoin industry. And that’s an exciting future.