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Antminer Firmware Update -April 2017

There is a new controversy regarding a feature in the firmware of Bitmain’s Antminer series of Bitcoin miners which allegedly claims that Bitmain can remotely shut down Antminers. This feature was designed and coded by the same team that is responsible for the firmware of Antminers. As the firmware has always been open-source, the feature was never intended to be malicious.

We need to clarify the intention of having this feature. We planned to add this feature to the code to empower customers to control their miners which often times can be hosted outside their premises. This was after more than one incident of miners being stolen from a mining farm or being hijacked by the operator of the mining farm:

  1. In 2014, around 1,000 Antminers were withheld from the owner by a hosting service provider in Shenyang, China.
  2. In 2015, around 2,000 units of Antminers were withheld from the owner by a hosting service provider in Georgia.
  3. In 2017, Bitmain’s own miners were withheld and sold without its consent in Canada.

This feature was intended to allow the owners of Antminer to remotely shut down their miners that may have been stolen or hijacked by their hosting service provider, and to also provide law enforcement agencies with more tracking information in such cases. We never intended to use this feature on any Antminer without authorization from its owner. This is similar to the remote erase or shutdown feature provided by most famous smartphone manufacturers.

However, this feature was never completed. We started to develop this feature since Antminer S7 and wanted to finish its development on the Antminer S9. We hoped to make it a useful feature that we could advertise to our customers. But, due to some technical problems, we were unable to finish the development of this feature and shut down the testing server in December 2016.  It is a bug to leave the code there before the feature is fully complete and acknowledged to the users. This bug has now been pointed out in context of Bitcoin’s scaling roadmap debate and has caused considerable misunderstandings within the Bitcoin community. We apologize for this.

Following are the models affected by this bug:

  • Antminer S9
  • Antminer R4
  • Antminer T9
  • Antminer L3
  • Antminer L3+

Since MITM and DNS hijacks can exploit this bug we would like to apologize to our customers for a degraded level of security caused by this. We should also note that the existing stratum protocol is vulnerable to MITM and DNS hijacks, and that the mining industry needs to work together on design of the next generation mining protocol.

Moving on, we have released the new updated source-code on GitHub and new firmware on our website which removes this bug. We recommend all Antminer owners to upgrade their firmware to the updated firmware from the list below and strongly advise to not download any firmware provided by a third-party which can lead to unexpected outcomes in function and can also be potential phishing attacks.

Antminer S9 firmware
Antminer T9 firmware
Antminer R4 firmware
Antminer L3 firmware
Antminer L3+ firmware

Source code on GitHub

Source-code for Antminer S9, T9 and R4:
Source-code for Antminer L3 and L3+: which includes inside.

Alternatively, we advise owners of mining farms that run Antminers to set the DNS record on their routers of to in the /etc/hosts file by the following method:

1. Use ssh to login to the miner
2. Run command:   echo “” >> /etc/hosts
3. Run command:   sync


The controversy around this code has brought our attention to improve the design in order to address vulnerabilities that were pointed out by the community recently. For this, we thank the community for pointing out bugs and contributing to our open-source codebase. We would also like to take this opportunity to express our solidified belief in the open source community and express our renewed commitment to improving the quality and testing methods of our code.

We will continue the development of this feature to provide a technical protection for mining rig owners to host their miners in remote locations. We will add a switch to this feature, and this switch will be closed by default. Customers will be able to set up and configure their own authentication server. Before we finish this development, such a code will not be in the firmware we release from now on.

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Regarding Recent Allegations and Smear Campaigns


When the concept of Bitcoin was first introduced on a cryptography mailing list by Satoshi Nakamoto, certain developers purported to have already “proven that decentralized consensus was impossible”. Today, the same developers offer a similarly specious “proof” that the implementation of long-published ASIC optimizations is some kind of “attack” on the Bitcoin network.

We’d like to clear the air.

Bitmain has tested ASICBOOST on the Testnet but has never used ASICBOOST on the mainnet as implied in Gregory Maxwell’s proposal. We ask conclusive proof from whoever claims this to be false because such baseless claims are toxic for the Bitcoin space. We also believe the math used by Gregory Maxwell is incorrect and that the method is not practical in a production environment.

Our ASIC chips, like those of some other manufacturers, have a circuit design that supports ASICBOOST. However, the ASICBOOST method has not been used by us on the mainnet. We have not seen any evidence yet on the main net that anyone has used it in the patented way.

Bitmain holds the ASICBOOST patent in China. We can legally use it in our own mining farms in China to profit from it and sell the cloud mining contracts to the public. This, however profitable, is not something we would do for the greater good of Bitcoin.

The mining equipment produced by Bitmain for its own use is in no way intended to be technically superior or more power-efficient than the equipment it sells to the public. The ASICBOOST method has not been employed by Bitmain to increase the power-efficiency of the miners in its own mining farms.

Bitcoin mining equipment depreciates rapidly. Bitmain has constantly been introducing newer more efficient miner models for all. As such the statement that the deployment of ASICBOOST, which can lead to a 20% difference in power efficiency, is some kind of negative development for Bitmain’s business model is false. Bitmain has shown the ability to adapt and thrive in the constantly changing and extremely challenging Bitcoin mining environment. Whether ASICBOOST is used or not, Bitmain will continue to produce more efficient miners.

Bitmain had always supported the Hong Kong Agreement, which means Segwit plus a hard fork to 2MB block size, until we no longer felt that it was going to happen in the foreseeable future. In fact, Bitmain is publicly on record as historically supporting SegWit and Lightning Network in the context of the Hong Kong agreement, and any accusations to the contrary are completely false and specious.

Miners love multi-layer solutions like Lightning Network. To support these off-chain solutions, Bitmain is very supportive of fixing malleability issues. At the same time, we also believe the first layer, which has been well-tested by time, is very important and should not be crippled. We are worried about the policy and precedence set by Bitcoin Core in this regard.

Tothemoon”, an extension blocks plan proposed recently by using a new Bitcon protocol implementation called Bcoin, could be designed to be incompatible with ASICBOOST much like Segwit is. ASICBOOST is not a deterrent to Bitmain’s support of SegWit or Tothemoon. SegWit is not running in production because the conditions made clear in the Hong Kong agreement have not been met, in which we foresee a non-witness block size increase coming together with SegWit. Bitmain’s co-CEO Jihan Wu has clearly expressed support for Tothemoon recently. Tothemoon is a real and standard block size increase, but not through an arbitrary witness discount policy.

Gregory Maxwell’s recent proposal suggests changing 2^32 collision to 2^64 collision to make ASICBOOST more difficult. The result of this would be a loss for the patent owners and the Bitcoin protocol. The patent owners will get nothing and Bitcoin protocol will become more complicated. The only beneficiary will be the technical bureaucrats who are engineering it. The more complicated the protocol is, the higher the cost and barrier to have multiple implementations become. We confirm that we support multiple implementations because they will bring more innovation and better security to the network, while threatening the monopolistic position of certain developers.

Bitmain has continuously been advocating for increasing the Bitcoin block size. Increasing the block size will make the collisions even more difficult, damaging the potential benefits of Bitmain’s gain from the private ASICBOOST assumed by Maxwell’s proposal. The conspiracy theories do not add up here.

There are better ways to resolve the issues that Gregory Maxwell’s proposal seeks to address. Adversarial thinking is not the only way. We suggest working with the patent owners so that the patent could be used by the public. If all mining equipment could use ASICBOOST, it will lower the J/GH cost and the total network hash rate will increase, making the Bitcoin network even stronger. So, the ASICBOOST method is not a “covert attack” on the Bitcoin PoW function. It is an engineering optimization.

The best method to leverage ASICBOOST is by using the Bitcoin block header’s version bits. Patent owner Timo has mentioned it in the patent. Gregory Maxwell’s proposal seems to be missing this point. Usage of these bits was proposed by Timo Hanke through Bitcoin Core’s BIP process but it was declined by Gregory Maxwell and Core developers.

Bitcoin Core is now almost controlled by a small secretive committee. Anyone with a basic sense about human history can tell that this is the starting of a dictatorship. Calling out an optimization an “attack” is playing a political trick to grab power.

The proposal mentions “reverse engineering of a particular mining chip demonstrated conclusively that ASICBOOST has been implemented”. This statement seems directed towards Bitmain. We believe the Bitcoin community needs more constructive contributors than it needs such policing.

The proposal does not mention Bitmain, however, an orchestrated troll army within the community was effectively able to spread rumors around Bitmain. Most Bitcoin companies currently have a strong fear of such notorious assets working for certain people. Bitcoin’s value of liberty is in danger.

The Bitcoin community suffered a grave misfortune when Maxwell lead the coup against Gavin Andresen and removed his Github commit access. It is now incumbent upon us as a community to figure out how to find a new core developer group that does not busy itself with attacking one of Bitcoin’s largest investors (Ver), one of its largest exchanges (Coinbase), and its largest mining equipment provider (Bitmain).

There is a history of character assassinations against those who have spoken against SegWit or Core’s roadmap. Gregory Maxwell’s latest round of attempts follow his previous patterns. Maxwell has previously attacked one of most important Bitcoin maintainers Gavin Andresen, one of the earliest public Bitcoin advocates and investors Roger Ver, founder and CEO of one of the largest Bitcoin exchanges Brian Armstrong, the first author of Lightning Network Joseph Poon, and now Bitmain’s co-CEO Jihan Wu. He has even called his fellow Core contributors who signed the Hong Kong agreement “dipshits”. Such hostility is destructive for Bitcoin.

We have very firm belief that the block size of Bitcoin will be increased. It is the Bitcoin that our co-founders signed up for, it is the roadmap designed by Satoshi and it is the destiny of Bitcoin. We will protect it at any cost.

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ConnectBTC Launches Bitcoin Mining Pool To Public

ConnectBTC, the Bitcoin network’s newest mining pool is announcing today its launch to the public.

ConnectBTC pool is developed and operated by Bitmaintech Israel, Bitmain’s first R&D center outside of China, working to innovate pooled mining services, and deliver advanced capabilities to bitcoin mining operations of all sizes.

Being the newest product out of Bitmaintech Israel’s lab, the ConnectBTC pool puts the latest in pooled mining services directly in the hands of miners. ConnectBTC’s pool provides highly detailed real-time information and analytics to miners, and gives mining operators a better understanding of their performance, without having to develop custom internal monitoring tools.

“Our role as pools is to provide miners with liquidity and stability. We provide miners with real time data in an easy to use UI, while keeping payment plans simple and stable. In recent years, pools have come up with imaginative new payout methods that confuse customers and displace risks back to the miners” noted ConnectBTC’s Manager Mr. Gadi Glikberg. “High subsidies on regular PPS plans allow miners to benefit from the increase in transaction fees while avoiding any risks” he added.

Miners who wish to join the new pool can register at and start mining immediately. There’s no configuration or setup required. ConnectBTC automatically sets-up workers, liberating mining operators from having to maintain two sets of configuration both locally and at the pool.

ConnectBTC was fully developed by Bitmaintech in Israel, independently of any other pool. Operating under a robust infrastructure and employing the latest cutting-edge technologies to ensure members can maximize their profit and minimize the work required of them, ConnectBTC aims to be the new home for miners.


Press Contact:

Gadi Glikberg

17 Hatidhar, Ra’anana, Israel

+972 (0)77 346 3410

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BitPay Says Alternatives Not as Compelling as the Bitcoin Blockchain

BitPay co-founders Stephen Pair and Tony Gallippi have been around Bitcoin for about as long as anyone else in the industry. The company was founded in 2011, and their actions generally indicate the future direction of the industry.

“When we started in 2011, we would be excited to get five or six transactions through BitPay in a day.” said Pair in a fireside chat with Gallippi, held during the recent Distributed: Markets 2017 conference in Atlanta.

BitPay would go on to cut deals with the likes of Microsoft, Newegg, Expedia and other major corporate customers to provide payment processing services.

Challenges for Bitcoin’s Use in Consumer Payments

While many early Bitcoin adopters claimed the P2P digital cash system was going to replace the use of credit cards and completely overthrow the banking system in 2013, things haven’t exactly panned out that way — at least not yet.

Bitcoin is currently dealing with some issues as a consumer payments platform, mainly because the system is experiencing growth at a rate faster than it can safely scale.

“We have seen an increase in customer service inquiries because of transaction confirmation delays for bitcoin purchasers,” Pair told Bitcoin Magazine in an interview. “We’re also seeing substantially higher transaction fees on our own settlement transactions.”

Recently, BitPay decided to stop covering Bitcoin network fees on invoice payments.

“This friction is making us get more creative in how we do user experience design for delayed payment states on the BitPay platform,” said Pair. “Often delays are an educational opportunity to explain how the Bitcoin network works and point people to wallets that use dynamic transaction fees. Copay and BitPay wallet users have been largely immune from transaction delays because their wallets calculate transaction fees dynamically.

“Our designers and engineers are constantly attuned to how we can make using Bitcoin intuitive,” Pair added.

The lightning network is a proposed method of dealing with the issues related to transaction delays and higher transaction fees on the Bitcoin network. The transaction caching layer would effectively enable potentially improved versions of many of the features people have associated with Bitcoin in the past, such as instant transactions at nearly no cost.

“We’re exploring all possible solutions for scalability,” Pair said. “It’s not a surprise to us that Bitcoin needs to scale — scalability is something we’ve been thinking about for years. The only surprise is that while we anticipated short-term bumps in the throughput, we thought that changes for more on-chain throughput would have happened a couple of years ago. This slow movement to increase network throughput is something we did not foresee. At some point we’re going to reach an actual scalability limit that will only be overcome through solutions like these.”

Some have wondered whether companies like BitPay may turn away from Bitcoin and toward alternative options, such as altcoins or permissioned blockchains, due to the historically high U.S.-dollar-denominated fees and general congestion on the network.

“We have carefully studied the most significant alternatives to the Bitcoin blockchain and have concluded that none of them are compelling,” Pair responded.

Bitcoin’s Use in Consumer Payments Is Still Growing

Although Pair admitted Bitcoin has some issues with scaling right now, BitPay is still seeing growth in the use of the technology among consumers.

“Bitcoin is the fastest, most secure and most cost-effective means of doing value transfer on the internet,” said Pair. “We think of ourselves as a payment innovator, and from a functional perspective, consumer payments and B2B payments are no different on the Bitcoin network and on BitPay’s platform.”

At the Distributed: Markets fireside chat, Gallippi claimed that their transaction count has more than doubled over the past year. Much of that growth, he said, has been seen in the areas of digital goods and video games. Specifically, he pointed to digital distribution platform Steam’s acceptance of bitcoin through BitPay as a source of this growth, and pointed out that there is a lot of overlap between the Bitcoin and gamer communities;

Growth for Bitcoin Outside of Consumer Payments

In addition to continued growth in the area of consumer payments, Pair noted that BitPay is also seeing growth in the use of Bitcoin for B2B money transfers.

“We’re seeing significant interest and transaction volume growth from businesses that need to transfer value to other businesses,” said Pair. “Bitcoin is a fantastic solution for these business-to-business transfers, especially when it comes to international payments, where bank transfers are still slow and inefficient.

“They’re using our platform for billing and settling internationally with a lot of their suppliers,” Pair stated during the fireside chat.

Gallippi added that there has been an uptick in the use of Bitcoin for payment disbursements.

“It’s not that easy to pay people on a regular basis to the majority of the world. Eastern Europe, Israel, Africa, India [and] the Middle East — where a lot of these apps are being [developed] — it’s very difficult to pay them,” said Gallippi, as he explained how app stores pay developers who sell apps on their store.

Gallippi noted that for the app store example or digital marketing companies, BitPay can receive one payment from the business and then disburse payments in bitcoin at all of the endpoints.

“We built that product originally because we had our own needs to pay our own employees in bitcoin,” added Pair. “We’ve got a lot of Fortune 500 companies coming to us now every day asking us to solve these kinds of payments problems.”


Written by Kyle Torpey for Bitcoin Magazine | Original article: www.bitcoinmaga….

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Moscow Eyes Blockchain Tech for Infrastructure and Security

The Moscow City Government supports the optimization of the transport infrastructure with the use of blockchain technology through the “shared registry” system when it comes to controlling land-based transportation.

Blockchain technology will help create more transparent, just and reliable models for travel fare payment and system financing.

Sources in the room told Bitcoin Magazine that in a meeting with principal blockchain experts, Maksim Liksutov, deputy mayor of Moscow and head of the Moscow City Transport Agency, stated that the city’s primary task at the moment is to establish and support a safe and reliable data transmission system both within the department as well as with suppliers. He went on to suggest that a blockchain shared registry system would be an appropriate mechanism.

Liksutov was also enthusiastic about the potential for blockchain technology to facilitate the application of biometric information techniques, especially in terms of security solutions. He noted that with its data verification abilities, blockchain technology’s distributed nature could mean easier verification for travelers, while providing widespread confirmation of identities where necessary.

“Using blockchain technology in transactions between users and machines (which requires a high level of trust and permissions) is a question of time. This technology could be used also as an unprecedented anti-terror system,” the lead coordinator of Blockchain International, Alexander Mikheev, told Bitcoin Magazine.

According to the Mayor of Moscow, Sergey Sobyanin, these steps will become a part of a wider initiative the government will take to ensure advancement of new technologies. “Such projects are only begging to be realized in various areas, and we, without a doubt, owe it to ourselves to keep, in that respect, leading the array of cities across the globe,” Sobyanin said in a televised public address.

Among the other industries that will benefit from the integration of blockchain technology are the property sector, banks, health services, electrical power systems, digital commerce and tourism. “The users will just have to input their personal data once (or the company data), after which the information will be verified in the blockchain network in all the governmental and private structures, including banks and insurance companies,” Sobyanin said.

Written by Peter Chawaga for the Bitcoin Magazine | Original article: www.bitcoinmaga….

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One Bitcoin Just Became Worth More Than One Ounce of Gold

One bitcoin has now, at least briefly, been worth more than one ounce of gold, hitting $1239.9 at the bitcoin exchange Bitstamp, while an ounce of gold was priced at $1238.67.

The last time a single bitcoin might have been worth more than an ounce of gold happened in November 2013, more than three years ago. Having taken place based on Mt. Gox pricing models, possibly manipulated due to internal Mt. Gox trading bot(s), the legitimacy of bitcoin’s first dance with gold parity faces continued scrutiny. Regardless, the price of gold in bitcoin terms is now trading at an all-time low.

When, according to Mt. Gox, the bitcoin price exceeded that of an ounce of gold, it had just broken through the $1,000 threshold. Similarly, the bitcoin price crossed the $1,000 mark January 1 before gold-bitcoin parity in the first week of January 2017.

Everything You Need to Know Before SEC Bitcoin ETF DecisionIn April 2011, bitcoin realized parity with the US dollar. It later reached parity with silver (so nicknamed the “devil’s metal” for its ties to populism) at approximately $29.65 per bitcoin on February 19, 2013.

Bitcoin Outshines Troy Ounce of Gold in 2016

Bitcoin, long called ‘digital gold’ due to its strict coin creation protocol involving a computational process dubbed ‘mining,’ performed as a better safehaven, perhaps, than gold bullion.

Gold demand stoked by Negative Interest Rate Policies (NIRP) in Japan led to stalwart demand for the ‘yellow metal’ by July 2017. Gold fell nearly 20% for the remainder of the year.

Bitcoin increased more than 125% over the course of 2016. Fiat crises throughout 2016 in emerging or underdeveloped markets like India, China, Venezuela, and Greece is perceived to have benefited bitcoin more than gold.

Bitcoin: Gold’s “Digital Counterpart”

In “An Analysis of Bitcoin Exchange Rates,” economist Jacob Smith, who calls bitcoin a “digital counterpart” of gold,  “highlights the similarities between the traditional commodity and its new digital counterpart.” He writes:

…the most appropriate way to think about bitcoins is as digital gold. While nominal bitcoin prices are extremely volatile and seemingly uncorrelated with other nominal exchange rates, relative bitcoin prices or implied nominal exchange rates are indeed highly cointegrated with conventional market exchange rates. This mirrors the relationship between physical gold and conventional nominal exchange rates…

One Bitcoin is Now Worth More Than One Ounce of Gold for First Time
Casascius gold bitcoin.

The bitcoin and gold markets have long been intertwined. One of the most popular companies early in bitcoin’s existence, Casascius, produced the most expensive physical bitcoin ever produced, one of which sold for $1,000,000 in 2013.

Comprised of one ounce of fine gold (which was worth about one-third the value of 1,000 BTC when produced), Casascius offered the coins at $5,500. An owner of one such rare coin recently used bitcoin’s price rise as an opportunity to share the rarity on Reddit. The redditor explained how it worked:

“I have a confirmation code that proves that my passphrase unlocks an encrypted private key that maps to the bitcoin address on the coin,” the coin holder wrote. “If I ever sell these coins, I will give the passphrase and confirmation code to the buyer. So the only trust is that Mike Caldwell didn’t screw up and not put the correct encrypted private key under the hologram. So far, Mike’s work has been top notch. But of course, would you trust it with $1M if you have that kind of money? That is for you to decide. Do note that I have not funded these with any BTC.”

Everything You Need to Know Before SEC Bitcoin ETF Decision

At gold-bitcoin parity, the bitcoin market cap ($18 billion) expressed as a percent of gold in circulation ($7 trillion) is currently at about 0.388%. Bitcoiners see this as evidence of bitcoin’s room for growth.

The last time bitcoin approximated the gold price, however, it marked the top of the bull run in 2013 for the digital currency.


Written by Justin Connell for | Original article:…

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Russian Bank’s VP Says Bitcoin is the Only Successful Blockchain

Over the past couple of months, Russian politicians and banks have been changing their tune when it comes to blockchain technology and cryptocurrency solutions. On February 21 Nikita Smirnov vice president of the state-owned bank Vnesheconombank had some positive things to say about the digital currency bitcoin. In fact, Smirnov believes the Bitcoin network is the only “successful” blockchain technology.

‘A New Philosophical Concept’

Russia’s relationship with digital currencies has been confusing, to say the least. Over the past few years, a few Russian bureaucrats have perceived bitcoin use as a criminal activity. Moreover, in the past, there have also been website blockades against bitcoin domains such as BTC-e and Localbitcoins. However, it seems politicians and banks are slowly changing their minds towards the country’s relationship with bitcoin. Just recently Russia’s Deputy Finance Minister, Alexey Moiseev told the public that bitcoin was “not a threat,” and Russia’s largest bank Sberbank has also been bolstering blockchain technology.

Now one of Russia’s well-known state banks Vnesheconombank (VEB) vice president has told the regional publication Kommersant that bitcoin has many benefits. Additionally, Nikita Smirnov says that bitcoin has an indisputable network effect.

“Bitcoin is the only blockchain technology in the world that has widespread adoption,” explains Smirnov. “It has existed for several years already, people tried to hack it, but no one has succeeded. So right now, if you ask whether there’s another algorithm, which established itself as a solution to distributed consensus problem, then the answer is probably NO.”

As of the present moment, the only successful solution to that problem is Bitcoin.

‘Bitcoin Forms a Symbiotic Relationship with Humans’

Meanwhile, the Russian bank Sberbank has been researching and developing its own enterprise-grade distributed ledger prototype for quite some time. Sberbank CEO Herman Gref believes commercial blockchains will be ready in two years and the company is working with the government on this project. However, according to the VEB vice president bitcoin is really the only successful blockchain today and can be considered a positive bacteria in his opinion.

Bitcoin is kind of a philosophical concept. Compare it to a bacteria, which exists separately from humans, but is in a symbiotic relationship with humans. But the word bacteria has a negative connotation, whereas Bitcoin in many ways is a positive thing, which satisfies many necessities, involves people in the process and allows itself to exists in this way.

Vnesheconombank also works with the Russian government managing state debts and pension funds. The bank, instituted in 1922, has grown significantly over the past few years acting as a progressive “Russian Development Bank.” Smirnov’s opinion may not reflect the bank’s official stance towards bitcoin but may push the bank to research the cryptocurrency further.

“[Bitcoin] truly is a new philosophical concept, which isn’t very well understood quite yet,” Smirnov concluded in his interview.

Written by Jamie Redman for | Original article:….

What do you think about the vice president of Vnesheconombanks statements? Do you agree that Bitcoin is the only successful blockchain implementation? Let us know in the comments below.

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Bitcoin in Japan to be a Legal Payment Method Soon

Bitcoin will soon be legally recognized as a method of payment in Japan. The bill with provisions for cryptocurrencies has recently passed through the period of public consultation and will enter into force in April. examines what the bill means and how it could affect Bitcoin with Special Counsel at Anderson Mori & Tomotsune, Ken Kawai, who has held numerous speaking engagements on the legal issues of virtual currency regulations in Japan.

Countdown: The Long Awaited Bill

Since Bitcoin’s inception, its legal position in Japan has not been clear. The first bill containing provisions for virtual currencies including Bitcoin was submitted to the Diet last
March. It amends the existing Payment Services Act and the Act on Preventing of Transfer of Criminal Proceeds.

“The revision of the Payment Services Act, which sets out the basic framework of virtual currency regulation, was promulgated last June”, Kawai told The drafts of detailed regulations and guidelines were published in December and the period for public consultation on the bill ended on January 27, he continued, adding that:

The new regulations will enter into force in April 2017.

New Method of Payment but Not Currency

This bill defines virtual currencies including bitcoin and imposes
certain regulations on virtual currency exchange services with the aim to prevent money laundering and terrorist financing as well as to protect users.

While the bill recognizes them as a new method of payment in Japan, virtual currencies are not classified as “currencies” however. Kawai confirmed:

“Virtual currency” is distinguished clearly from “currency” in the regulations.

Even though Bitcoin is not considered a currency, being recognized by the government as a payment method will “likely
have a positive effect on people’s mind and facilitate usage of VC’s [virtual currencies]”, he believes.

Bitcoin usage has already been growing considerably in Japan. Japanese exchange Coincheck revealed significant growth in its user base, rising from 14,000 users last April to 76,400 in January. In addition, the exchange reported gigantic growth in the number of bitcoin-accepting merchants using its service. Also, Japanese giant GMO Internet group has recently announced that it would be developing a bitcoin exchange and wallet service.

Meanwhile, Japan now has the second-largest bitcoin trading volume globally, according to Coinhills.

Bitcoin’s Other Legal Considerations in Japan

While usage as a payment method should not be affected whether bitcoin is legally considered a ‘currency’ or not, Kawai explained that, from a legal standpoint, there are some considerable differences.

“For instance, if they are defined as “currencies”, lending of VCs must comply with Money Lending Control Act (which requires lenders to register as “Moneylenders”) and VCs’ derivatives must comply with the Financial Instrument Exchange Act”, he described.

Some other countries have classified virtual currency as an asset or property for tax purposes such as the U.S. Recently, Israel has issued a draft which considers Bitcoin an asset, therefore imposing Value Added Tax (VAT) as well as capital gains tax on bitcoin transactions.

However, for Japan, this bill does not define virtual currency as “property”. Instead, virtual currencies are defined as ‘proprietary value’, Kawai contrasted, adding that “a precedent of Tokyo District Court denies the concept of having ‘property rights’ of Bitcoin”. Furthermore, “it is not uncertain what is the legal nature of proprietary value in Japanese civil laws”, he clarified, adding that “I do not expect that the government is leaning towards proactively considering it as “property”.


Written by Kevin Helms for | Original article:…

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Will Trump’s New Policies Boost U.S.–Mexico Bitcoin Remittances?

Last week, President Donald Trump signed an executive order to build a wall along the U.S.–Mexico border as he had promised during his presidential election campaign. Aside from the ethical and practical issues of building the border wall, the issue of how it will be financed was also raised by opponents during his campaign. Trump’s proposed solution to funding the wall is either to heavily tax U.S.–Mexico remittances or to fully prohibit them altogether, so that the funds needed to build the wall will stay in the U.S.

According to the World Bank, U.S.–based Mexican immigrants send around $26 billion annually to their families back home in Mexico. Trump’s proposed legislation would hit Mexican families that rely on remittances from their U.S.–based relatives hard. The Mexican economy would also suffer as the multibillion-dollar remittance inflow to Mexico adds substantially to the country’s domestic spending.

In light of Trump’s proposed policies to fund the border wall, remittances from the U.S. to Mexico jumped to a ten-year high after Trump’s election win in November in anticipation of possible legislation restricting cross-border money transfers to Mexico. Remittances in the month of November jumped by almost 25 percent compared to the same month the prior year, according to data collated by the Mexican central bank.

Will Bitcoin Be the Answer if New Legislation Is Imposed?

If U.S.–Mexico remittances using traditional channels such as banks or large money transfer operators (MTOs), such as Western Union or MoneyGram, are to be heavily taxed or severely restricted, then bitcoin remittances could offer a solution.

Bitcoin allows users to send and receive money from and to anywhere in the world at a very low cost using online or mobile wallets to make the transfer. Furthermore, legal restrictions on money transfers could easily be circumvented using the digital currency, as no paperwork needs to be filed when sending money abroad. That way, both documented and undocumented Mexican immigrants would still be able to send money back home without any restrictions, should the new laws be put in place.

Alternatively to bitcoin, anonymous digital currencies such as DASH, Monero or Zcash could also be used to make cross-border money transfers, should Trump decide to go through with his legislation and attempt to crack down on bitcoin remittances.

Bitcoin in Mexico

The main reason bitcoin hasn’t taken any notable market share of the $500 billion global remittance market is the challenge of transferring fiat currency into bitcoin and then bitcoin back into fiat currency without having to pay too much in bid/offer spread costs. Illiquid local exchanges in developing countries can easily hike up the cost of the remittance to the extent that it would make more sense to use traditional money transfer solutions.

Fortunately, for Mexican bitcoin users, there are several exchanges to choose from when needing to convert bitcoin into pesos or vice versa. Mexico’s main bitcoin exchanges include Bitso, Volabit and LocalBitcoins.

Given the liquidity of both U.S-based, Mexico-based and international exchanges that residents of the two nations have access to, the costs of converting bitcoin to and from fiat currency are reasonable low, making bitcoin remittances from the U.S. to Mexico a viable solution should Trump’s remittance restrictions be enforced. Furthermore, there are bitcoin remittance companies such as Abra and Cashaa that aim to make cashing out bitcoins in local fiat currency easier.

In terms of bitcoin regulation, Mexico has taken a stance similar to many of its international peers. In April 2014, Mexico’s National Commission for the Protection and Defense of Users of Financial Services issued a warning on the risks of using bitcoin stating that it is not legal tender and not regulated by the Mexican authorities. Therefore, the commission warned, “any individual or business that uses or accepts virtual currencies as a means of payment does so at their own risk and on their own responsibility because the use of this type of asset entails high volatility and potential monetary losses.” In other words, bitcoin is not illegal but the commission warns against its use due to the risks involved in dealing in the digital currency.

Not surprisingly, following Trump’s election win in November, bitcoin trading volumes in Mexico on global peer-to-peer exchange LocalBitcoins and on the country’s leading bitcoin exchange, Bitso, increased substantially as Mexican bitcoin users moved funds away from the weakening peso and into a better-performing currency.

Should Trump succeed in imposing strict remittance restrictions from the U.S. to Mexico, this could become the first case study of bitcoin remittance succeeding and actually become a viable means to make cross-border payments.


Written by Alex Lielacher for Bitcoin Magazine | Original article: www.bitcoinmaga…..

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Infringement Announcement

Gigawatt Bitmain Brand Infringement

Bitmain Trademark Infringement

Recently, Bitmain Technologies Limited (“the Company”, “we” or “us”) noticed that Giga Watt has stated on the website of (the “ICO Website”) that “Giga Watt is the first official Bitmain hosting facility, and also the first Bitmain service center in the USA” and that Giga Watt is “Bitmain-Powered” and “the first Bitman service center in the USA” (the “ICO Unauthorized Statements”).

We also noticed that Giga Watt has stated on the website of (together with the ICO Website, the “Websites”) that Giga Watt is “Bitmain-Powered” and that Mr. WU Jihan is the Chairman of Giga Watt (together with the ICO Unauthorized Statements, the “Unauthorized Statements”). We also noticed that our registered trademark, “BITMAIN,” is used on these Websites.

We hereby declare as follows:

We have never authorized and will not authorize Giga Watt as our official hosting facility or our service center in the USA. We have never supported and will not support Giga Watt’s ICO. We have never authorized and will not authorize Giga Watt to use our BITMAIN trademark in any circumstances. Mr. WU Jihan has never been and will not be a member of Giga Watt team.

We believe that it is clear that Giga Watt’s Unauthorized Statements and unauthorized use of the BITMAIN trademark is intended to confuse and misdirect investors. We also believe that such activities are unlawful and constitute intentional trademark infringement to us by Giga Watt. We require Giga Watt to cease the Unauthorized Statements and the infringement of our BITMAIN trademark, and to issue an official public apology to us by January 19, 2017. Otherwise, we will take all necessary legal actions to seek remedies.

This announcement is made without prejudice to the Company’s rights and claims, all of which are expressly reserved.

Bitmain Technologies Limited

January 17, 2017

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