Monitoring Bitcoin – Bitcoin Foundation, GLBSE Closure, and the ASIC Arms Race

(From our collaborator Jon Holmquist, Bitcoin community insider and entrepreneur)

This week in the dramatic and sometimes comedic world of Bitcoin, the internet’s favorite crypto-currency:

1- The Bitcoin Foundation was announced in the last days of September.

The Bitcoin Foundation has proposed three main goals: Standardizing and maintaining the code that is Bitcoin by funding the development of the project, protecting the Bitcoin protocol with both technological and legal work, and finally promoting Bitcoin.

This non-profit organization is aiming to mirror other successful open-source foundations, such as the Linux Foundation. The Bitcoin Foundation has a board populated with the who’s-who in the Bitcoin community. Not everyone is a fan of the foundation, some Bitcoin community members have expressed caution at both this attempt at centralization and the involvement of too much “industry” by the inclusion of several Bitcoin business owners on the board.

2- The Global Bitcoin Stock Exchange (GLBSE) closes

The first attempt at funding Bitcoin businesses using Bitcoin and crowdfunding has been closed by its owner James McCarthy, better known by the username Nefario. This closure occurs in the midst of rumors of an SEC investigation into Bitcoin ponzi schemes. Only a month ago, McCarthy gave an optimistic presentation at the Bitcoin Conference 2012 in London.

The sudden close of the GLBSE exchange has already led the community to appeal for a truly decentralized solution to crowdfunding online. In the Bitcoin world, failures seem to be digested as early and imperfect iterations in the process of finding optimal solutions.

3- Intense competition arises among Bitcoin mining hardware companies

Lastly, the never ending arms race known as Bitcoin mining is heating up again with multiple vendors offering new powerful ASIC mining rigs. Butterfly Labs (BFL), BitcoinFGPA, and Avalon ASIC are the main contenders.  BFL recently updated specifications on their mining rigs. It will be interesting to see which firm delivers their products first, and which firms fail to measure up to their predicted specifications.

What in the wide world of anonymity, drama and payments will Bitcoin bring us next week! Tune in again to find out.



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