Circle Internet Financial, Ltd., a long term go-to place to buy small amounts of bitcoin with a credit or debit card, is no longer going to be a go-to place to buy bitcoin at all. According to an ultra-confusing blog post on the topic, they have decided they are "more than ever" not a bitcoin exchange and as a result will be reallocating resources that support bitcoin trades to do something else unrelated and handing their bitcoin business over to Coinbase.

If that summary doesn't provide crystal clarity, give their opening statement a try:

Today we’re announcing the launch of full messaging features in Circle’s apps and higher deposit limits for customers, forthcoming support for sending and receiving money between Circle and The Philippines and Korea, and the introduction of Spark, a new blockchain-based protocol to facilitate trusted, compliant money transfers between participating individuals and institutions over the Bitcoin network. As part of this launch, we are also eliminating the ability for customers to buy and sell bitcoin directly on Circle, and introducing a new preferred bitcoin exchange partnership with Coinbase.

Sounds like good news for Coinbase anyway. However, this pretty much ends any use of Circle for many users, yours truly included. I used Circle strictly for purchasing bitcoin and as a mobile wallet so as a result of this new direction the company is taking, I will no longer be using Circle for anything at all.

Instead Circle plans to steer the company into the overcrowded person-to-person money transfer business saturated with mobile apps and online services. The only difference is that Circle intends to continue making use of the Blockchain (bitcoin) to facilitate this. Which is cool and all, but we have to point out that this is a different target group of customers so whereas this is still somewhat supportive in the industry, this leaves a large customer base hung out to dry.

Bitcoin Exchange Model

Without any knowledge of the inner-workings at Circle it's impossible to speculate past what the blog post states, however, the direct bitcoin sales at spot costs with a minuscule margin of profit has been perplexing for some time. In general, buying bitcoin with a credit card is an endeavour that one can expect a steep margin of anywhere from 10% to 30% with various markets and re-sellers, yet Circle was doing this for about 2%. Combine that with the fraud prevention and compliance with regulatory frameworks, its hard to see where the profit was. Perhaps this change allows them more room in that regards and as a result, they'll be more profitable.

The blog goes on to talk about messaging apps and a Spark framework among other things, but you have to get past the "slap in the face" of the opening statement to consume the additional information and for many Circle users, there's just no point in doing so since they don't use or have no plans to use other applications the company offers.

Circle has hinted a few times to the fact that they were heading in this direction and have finally made good on their intentions. 

They do make an attempt to explain how they will still be involved in the industry and continue to be supportive of its innovation to the point of even using the blockchain for their new applications, however, the summary of the announcement is overwhelmingly eclipsed with a "Circle is out of the bitcoin business" tone.

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Josh Garza, the man behind the Ponzi-Garza implosion, GAW Miners and Paincoin (oops, I mean PayCoin), has one less legal worry. Garza is under investigation by the Securities and Exchange Commission (SEC) for fraud, however, a group of investors who had named him in a civil suit has now dropped him from a complaint according to documents filed in the U.S. District Court for the District of Vermont.

Stuart A. Fraser, a former vice chairman at Cantor Fitzgerald, is the remaining a defendant.

"Through Fraser's ownership of GAW Miners and ZenMiner and his longstanding personal and business relationship with Garza, Fraser had the power to direct or cause the direction of the management and policies of GAW Miners and Garza" - attorneys for the plaintiffs.

In the new filing the attorneys for the plaintiffs note that they have engaged in "discussions with Homero Joshua Garza." without further detail. Sounds like someone is about to squeal.

According to the original suit, filed on June 15, 2016, Garza and Fraser defrauded up to 10,000 customers by selling mining gear and operating a Ponzi scheme, hence the Ponzi-Garza tag we commonly use on and as we all know the SEC is pressing a 10 million dollar judgement against Garza to which his attorneys recently filed a motion requesting a 60-day extension of the proceedings.

Garza and Fraser have had a working business relationship for well over a decade and apparently a much closer relationship than that overall.

"Garza expressed his gratitude at one point by giving Fraser a Tesla ... . Fraser and Garza regularly went to one another's homes, spent time with one another's families and friends, and engaged in social activities together. Garza and Fraser also regularly sent each other text messages, often about social subjects and often including pictures of themselves. Fraser's wife made him a book that listed the four people Fraser was closest to for Fraser's 50th birthday. The book listed Garza as one of those individuals. In another instance, Garza told Fraser he was having a child. Fraser expressed anger and concern over Garza's decision and questioned whether Garza would continue to devote adequate time to their business ventures." - Attorneys for the Plaintiff.

Fraser is obviously another individual responsible somewhat for the GAW miners disaster that left thousands of customers defrauded, but the SEC hasn't named him in any suit. Yet.

In any case, Homero Joshua Garza is no longer a defendant in this civil matter, but he's still in plenty of hot water with the SEC so he still sucks.

I wonder what happens to this 10 million if the SEC pulls it off? Any customer relief coming from those defrauded? Another story for another day I suppose.

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Over the last 12 hour session, bitcoin hit a 2016 record high of $778.01 on the dinbits index. At 2:30 AM EST the traded volume was at nearly 50 million USD.

This marks the high thus far for the year of 2016 and it's been a rather slow but steady rise all year long.

Exchange Price Change High Low Bid Ask Volume Cap
Quoine $784.88 0 $785.70 $747.70 $785.80 $785.80 15331.24604 $11,771,637.33 $770 9.74 $779.74 $748.69 $770.00 $770.00 644.9916573 $495,237.49
GDAX $767.14 767.14 $0 $0 $767.01 $767.01 5199.260455 $3,992,096.16
LBC $861.74 0.82332 $907.36 $835.12 $907.36 $835.12 4037.1721 $3,099,821.48
Coinfloor $766 17 $783 $740 $768 $768 84.891 $65,181.01
Bitfinex $768.67 8.81 $777.48 $745.41 $768.66 $768.66 15513.65688 $11,911,696.03
OkCoin $767.29 -2.56 $775.94 $743 $767.89 $767.89 4386.762 $3,368,243.60
Bitstamp $764.58 6.45 $771.03 $743.32 $764.58 $764.58 8801.305492 $6,757,818.38
BTC-e $757.01 7.99 $765 $736.47 $757.01 $757.01 5137.39297 $3,944,593.07
itBit $765.79 6.72 $772.51 $746.40 $755.15 $755.15 2695.6876 $2,069,802.85
Kraken $766.81 10.63 $777.44 $752.49 $768.50 $768.50 892.1186668 $684,986.55
Bitquick $812.10 30.19 $781.91 $781.91 $764.58 $764.58 55.67 $42,744.54
Overall Volume 62780.15486 $48,203,858.50
Sampled at 2:29 AM EST Average Exchange Value $767.82 $48,203,858.50
Average True Value $779.33 $48,926,458.09

Additionally the blockchain was equally as active. In a mere 6 hours in 6 blocks nearly 50 million was transferred by 2:00 AM EST.

Block Hours Minutes Transactions Bitcoin
441534 21 1850 22,140.32
441533 22 2781 20,642.26
441532 1 5 1 12.5
441531 1 6 1793 5,365.00
441530 1 9 2295 17,168.07
441529 1 22 2401  3,868.97

                 69,197.12 BTC
   USD          $53,130,932.68

This is the highest bitcoin has been since June 18th, 2016 when it flirted with $770 but remained at $768 only to fall down to $602 6 days later implicating a mere short-term spike. However the price has continued a slow and steady rise to it's current $774.89 (11:00 AM EST). It also marks the highest price since February 6th, 2014 when it hit $802 nearly 24 months ago. Bitcoin since has not seen $700 other than briefly in June of this year and .... now.

Get on it.

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Market data courtesy:
Block data courtesy:

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...and so the saga ends. 

An announcement was made by Loanbase, who was previously BitLendingClub who re-branded as Loanbase only to revert back to BitlendingClub while keeping Loanbase and redirecting Loanbase users to BitLendingClub so that Loanbase could be something new and remain the same by using BitLendingClub and morphing into duel websites ... Loanbase and BitLendingClub. 

Sound a bit confusing? Well, this should clear everything up. They just closed the doors, shutting down stating regulatory issues.

"We've worked extremely hard to build a platform and a community which is uniquely positioned to provide the Bitcoin ecosystem with a greatly needed service. However, over the last year or so, the regulatory pressures has been increasing to the point that it is no longer feasible to maintain the operation of the platform. We are regretfully announcing that we will have to begint terminating the services effective immediately. Of course, we will maintain some minimal functionality in order to allow our existing users to repay their loans and withdraw their funds"- Loanbase/BitLendingClub

The statement made in an early Wednesday email said pressure from regulations is the factor forcing them out. Strange considering nobody else seems to have a problem with it. 

No website, no worries. Problem solved and we'll be free of trying to figure out the strategic thinking, or lack thereof, behind all of the bait and switch moves performed by the organization.

30 Days to Repay and Withdraw

The website will give users 30 days to finish up paying off loans and withdrawing funds, which sounds to me like they just guaranteed a bunch of defaults on Lonabase/BitLendingClub loans. Let's hope that's not the case and there wasn't any mention to mitigation of this in the email blast.

According to Loanbase, they're "sad" about the move, however judging on the barren platform that's been increasingly decreasing in use since the hack, it doesn't appear as if anybody else is.

The website says they're open .. at least there's a dude standing there with a sign that says so anyway. Their BitLendingClub website doesn't say they're closing either. However, you can read the email blast on their blog.

It appears that only the BitLendingClub service is going away and this move was likely planned long ago. They've been inching away from bitcoin for some time now. "Regulation pressure" is likely just an excuse that sounded good enough to slap on an email blast so they could do away with the few customers left on the platform and Loanbase may still keep going, albeit not in this industry.

What's in store for the entity now? Honestly at this point, I don't think anybody cares.

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It's safe to assume that Saturday pretty much sucked for the San Francisco Municipal Transportation Agency (SFMTA). They were met with another fine example of how malicious programmers with nothing better to do can cause some serious headache and try to enrich themselves at the same time.

This time to the tune of 100 bitcoins (roughly $74,000 US at press time), which is the ransom being demanded by the hackers to undo the encryption locking plaguing their computer systems.

Over 2100 of the 8000 some odd systems operated by SFMTA were infected reading only:

You Hacked, ALL Data Encrypted. Contact For Key( ,Enter.

 Seriously? You guys want 75k for that shitty message? At least have the common courtesy to speak better English or least understandable English. Really, is that to much to ask? How the hell is anyone suppose to have a clue what to do if they can't understand a word you're saying?


Well it didn't get any better. Upon contacting the email supplied, an auto-generated response returns:

If You are Responsible in MUNI-RAILWAY ! All Your Computer’s/Server’s in MUNI-RAILWAY Domain Encrypted By AES 2048Bit! We have 2000 Decryption Key ! Send 100BTC to My Bitcoin Wallet , then We Send you Decryption key For Your All Server’s HDD!! We Only Accept Bitcoin , it’s So easy! you can use Brokers to exchange your money to BTC ASAP it’s Fast way!

Ummm. Yeah. Getting some bitcoin may be easy, but communicating with this individual might require a linguist that understands "intentional-bad-English-to-make-it-sound-like-i-don't-know-English". Grammatically perfect or not, what the hell's with the random capitalization? If you're trying to be cute, do it the old fashion way. Or at least buy a cool font. If you're making that kind of jack you can at least buy a cool font.

Like this! This is called making an


It's not exactly rocket science, but I digress.

Avoid Ransomware

Look folks, here's a thought ... why not backup your computers periodically instead of whining about things like this when they happen? A simple backup daily makes this entire problem an annoyance for about an hour while you restore your drive. This isn't the only thing that can happen to your drive either you know. You could drop it, it might explode, a homeless man might mistake it for a Christmas ham and head for the hills with it. It might just die for no reason, they don't last forever. 

Point being, if you backup, you won't ever have this problem.

As far as SFMTA and their little glitch. My advice? Pay the damn ransom. it's by far the cheapest option here. 

Don't want to? Give me a call ... but keep that bitcoin handy.

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Anytime something incredible comes around, the band-wagon fires up and people start jumping on board. With blockchain things are no different albeit becoming an increasingly diluted term that confuses people. Many have attempted to clarify things while others have tried to intentionally cloud them.

The "clouders" merely want to sell software and/or cloud subscriptions to their offerings, so naturally they denounce others and this is why things further necessitate clarity that explains the division between a networks like bitcoin's blockchain or Ethereum and database software that companies are trying to sell using the word "blockchain" without using a global network. There's a danger when companies new (Chain, Ripple, Bloq, etc...) and old (Microsoft, Deloitte, IBM, etc...) begin offering software and/or tools to promote "blockchain" without necessarily using a global blockchain.

It's much like saying you want a "coke"when you mean a "soda" because Coca-Cola (Coke) became the industry standard long ago and now all soda's are often called "coke" when in fact the requesting party may mean a Pepsi. Which is humorous when considering the one thing both entities share is the "Cola" part yet everyone latched on to "coke" instead of "cola". Point being, if someone asks for a Coke and you give them a glass of Milk, they are going to be rather disappointed in the end.

With blockchain this is worse when promoters of commercial software pitch to those familiar enough with bitcoin, the blockchain, and it's unmatched security but lack the technical depth of understanding to realize that with a global blockchain comes that security, immutability, and absolute, however, with cloudware and private block-things it's nowhere close to the same.

It is important to note that many are using global blockchain networks. For example, most of Microsoft's work and offerings are around Ethereum which is most certainly a global network. 

The Blockchain Verses Blockchain

Two levels of identity have evolved over time. One, "The Blockchain" still and has always meant the bitcoin network and two, "blockchain" also identifies networks such as the litecoin blockchain which is also identified as an altchain.

Both are blockchains from a technical perspective. A blockchain simply means a network (not necessarily a database) that provides a trust using nothing more than itself as that trust. This trust does not have to be provided by consensus, however, its just the only way it has currently been implemented on a global scale successfully. In addition to consensus, bitcoin, litecoin. and others also use ledgers (again, not really a database) and cryptography for recording and security purposes. 

Let look at those words for a minute. "Consensus" is best viewed as a "vote", however it's not a vote , it's an agreement with other programs running the same software that everything is accurate according to their shared informational knowledge and that the result of a required task has been satisfactorily presented as such.

Figure A: blockchain transaction broadcast

Figure A (above) shows a broadcast transaction with other nodes in agreement that the transaction is valid that be done in numerous ways but in the case of bitcoin and litecoin, the networks use cryptography and a ledger to secure and validate the transaction. When the initial transaction is broadcast, it is received immediately, however, is not confirmed until reported back as "in agreement" as shown above. However this is not just back to the node broadcasting the transaction, it is to the entire network of programs talk to each other as shown below in Figure B (below).

Figure B: network communication

When the network doe not agree with a transaction for whatever reason it may be the process looks more like what is shown in Figure C (below).

Figure C: over 51% reject transaction

Which results in a failed transaction as the one and only acceptance is in agreement that there are too many discrepancies and the transaction is invalid.

Figure D: blockchain transaction failure

How does something like this happen anyway? It's rather simple, the transaction may have been broadcast earlier incorrectly or even maliciously with a secondary transaction broadcast to rebroadcast, mimic, or replace it. This is exactly how a successful double spend would theoretically work if it could be accomplished with 51% of the network required to make it even feasible, much less unnoticeable.

That's why it works and establishes a trust using nothing more than itself as that trust by participation in it's network by mining companies and hobbyists who are paid for their contributions in bitcoin, litecoin, other compensation, or comparable token. This is not to be confused with tokenization technology which does occur on the bitcoin blockchain as well whereas bitcoin is both the token and the tokenization, however, not necessarily what node participants have to be compensated in. It's also important to point out that tokenization can occur on the bitcoin blockchain without bitcoin being the token and bitcoin is merely the compensation.

Figure E: blockchain tokenization

In tokenization as shown in Figure E (above), bitcoin can be the incentive, the compensation for the network participants, while the tokenization is something else such as another digital currency or asset or a data or transaction key to another network, sidechain, or database. This of course would then rely on the power and strength of security of the sidechain or subsystem being the key to that token but the actual transaction record itself as entered n the blockchain is absolute thus if the token identifier and blockchain transaction identifier are both used in the subsystem it can be definitive. However the data tied to that combined identifier in the subsystem is only as absolute as designed and maintained by the subsystem and if that subsystem is not a global blockchain, such as an enterprise or private system, then the data itself is still subject to security concerns and manipulation which is a vulnerability with these types of systems when used in this fashion including private blockchains or sidechains and permissioned based applications such as internal database or ERP software. 

That's where the danger of private systems is currently present and why when used correctly with recording on global implementations such as bitcoins or Ethereum, the risk is mitigated somewhat but still exists on the subsystem. Regardless, there are advance techniques that can be used to further reduce risk on the subsystem and when used with a global chain make it less subject to manipulation since the global chain record is absolute.

Public Verses Private, Universal Verses Enterprise

Public blockchains don't really exist per say. They are open to participation by, and contributions from, anyone on earth, however, they are not truly open where anyone can simply write or read anything they want to out of the system or edit ledger data. Theses systems are generally very secure and all anyone can do is participate by contributing to the network or source code (which usually required consensus).

The bitcoin network allows anyone to read a transactions existence, time, bitcoin units, and status of that transaction but there's not much else available to the public and certainly nothing that may be linked to it. 

The source code is readily available for anyone to use, however upon code changes and implementation it becomes an altchain and not part of the bitcoin network unless it's adopted by nearly all miners which as we know from the 1 MB block-size debate, is a monumental task. This is a positive thing because this should be monumental to make a major change even if it is a bit annoying at times.

Private networks source code can be available (such as Hyperledger) however it's participation is limited to those chosen by the implementation party and/or other participants. Purely private networks provide the little security and are most vulnerable to manipulation which makes them poor choices for assets or other important records according many in the industry, however, they do serve other purposes like inter-office procurement (buying office supplies or furnishings) for example where multiple approvals are required from different departments. This sort of task can also be done with workflow systems.

With blockchain technology, some compare "public" to "enterprise" and "private" to "public". The latter is correct of course, there is either private or public. Public vs. Enterprise really wouldn't be accurate. Enterprise systems can be public as well. Universal might be a better comparison, however, the term global is used in this info-graphic Figure F (below) and an enterprise system is described as a workflow system, sidechain, or distributed ledger.

Figure F: blockchain technology

One thing to be cognizant of is that a global or "universal" chain, such as bitcoin, can be used on any level from small business to international enterprise. In the Figure F diagram the use-case is downward compatible, meaning the global blockchain system can be used on any level below it, however, other systems may not necessarily be compatible with any other grade and none would be comparable to a global system.

Permissioned Verses Permissionless

Bitcoin is considered a permissionless system and that's the core technology of blockchain. In fact it's the abstract as described in the 2008 Satoshi Nakamoto whitepaper "Bitcoin: A Peer-to-Peer Electronic Cash System", widely considered the first and original documented design of a blockchain which states a third-party required  to govern a transaction renders the system something other than a blockchain as it loses its benefit. 

"...the main benefits are lost if a trusted third party is still required" Satoshi Nakamoto¹ 

Permission (or permissioned) systems (as currently proposed) require a third party such as a paper agreement or contract, intermediary, or other governance since the network itself cannot provide that trust under which understanding renders a permission based system something other than a blockchain. 

We won't go any further into permission based systems since the concept is completely adverse to blockchain technology's core function and purpose. It doesn't appear as if it can even be considered a blockchain at all. 

There are permissioned systems promoted as blockchains and there's a small debate (mostly by the promoters of permissioned systems) on the topic, however, until proven otherwise we'll avoid this completely since blockchain technology has been a "permissionless system" technology and an industry standard for 8 years paired with the whitepaper clarity of the technology's core function seems to make this a non-topic.

Token Verses Tokenless, Incentivized Verses No Incentive

Tokens and incentives appear very similar, however they are different. Using tokenization is very common in database design whereas incentives are not. Likewise tokenization in blockchain technology is often the incentive itself and thus commonly referred to as both. However they are two different items. Tokens provide unique transaction identity whereas incentives can be anything including something not produced by the network itself. In other words, an electricity provider may elect to provide a 10% discount to miners who support a specific network. This incentive would be purely off-chain and not related to any specific native asset.

Incentives however are currently core requirements for any kind of blockchain above the enterprise grade. Whereas it is technically possible for non-incentive systems to work on a global scale, currently in 2016, it remains improbable for the networks to actually work. 

Even large scale private networks such as the SWIFT, Visa, or Mastercard are incentivized systems whereas all parties involved in a specific transaction are all getting paid a small percent in the way of a credit card or transfer fee. As a consumer, you may not notice, but as a merchant you are fully aware that every credit card charge comes with a 1% to 12% surcharge on top of annual and other fees to process that payment. Along the chain of the organizations involved in that transaction, each gets a small portion of that fee.  

We won't go further into incentives until someone actually implements a working model on a global scale. 

That said, technically it is possible. It's just improbable.

Internet Verse Intranet, Commercial Verses Making Less Money

Let''s just address the real issue. It's all about making money and as much as that as possible. That's why all of these new offerings keep popping up. There are those wary of using networks like the Blockchain (bitcoin) and Ethereum and for each of them there are 10 more companies ready to sell them anything else tailor made for them and call it a blockchain so long as they are paying. Take a look at R3 CEV, this is a conglomerated effort of a bunch of banks attempting to gain more power and make more money. Just let that sink in, this is coming from ... Banks ... who make millions doing essentially nothing (very little). 

Make no mistake, there's nothing R3 or any other commercial interest based organization is doing for the good of the industry or the community. However, don't be too quick to point the finger since after all, it's greed that powers bitcoins blockchain as well.

The lines in the sand seem to be clarifying much like the Internet Vs. Intranet of 20 years ago. There were many that made Intranet attempts at being the Internet but only a few have prevailed, most notably the Internet and a distant second, the Dark Web. The commercial endeavours such as AOL have all but vanished at this point.

The same appears to be going for the blockchain industry whereas there is the bitcoin blockchain (1st) which nothing else on earth is comparable and a few networks like Ethereum (2nd) and Litecoin that are of enough size and power to count. Then there exists the Ripple's, Hyperledger's, and other Altchains of world which are well over 1000 strong, none of which have proven themselves to be anything close to comparable, and some are merely private Intranet type networks more comparable to workflow systems or other database driven technologies. 

Terry Roche, a principal over research at TABB Group said that "there won't be one blockchain" according to technologists and he's likely right. Some technologists on earth somewhere likely did say this. Those technologist are also most likely right, there will be a few global blockchains perhaps and around those will be hundreds or thousands of minuscule Intranet type networks. 

Most would agree with this and I am no different, however with that said, if you look out the window right now ... there is only one big one out there.

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