SEP 9 DIGEST: ShapeShift Raises $1.6 Million; Nick Szabo Says Banks Need Permissionless Blockchains to Survive

Instant cryptocurrency exchange ShapeShift has completed its fund-raising of US$1.6 million; Nick Szabo says banks must go permissionless to get all of blockchain’s benefits, and more top stories for September 9.

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SEP 9 DIGEST: ShapeShift Raises $1.6 Million; Nick Szabo Says Banks Need Permissionless Blockchains to Survive

Instant cryptocurrency exchange ShapeShift has completed its fund-raising of US$1.6 million; Nick Szabo says banks must go permissionless to get all of blockchain’s benefits, and more top stories for September 9.

ShapeShift Raises $1.6 Million

Instant cryptocurrency exchange ShapeShift has announced that it completed its fund-raising of US$1.6 million. Lead investors in this round were Barry Silbert’s Digital Currency Group and Roger Ver. Bitfinex, Bitcoin Capital led by Max Keiser and Simon Dixon, Mardal Investments, Bruce Fenton, Trevor Koverko, and Michael Terpin also invested in the funding round.

Zane Tackett, Director of Community and Product Development at Bitfinex said:

“ShapeShift demonstrated an entirely new way to think about asset exchange […] We’ve known Erik for a while now and he’s knocked it out of the park with this one.”

Nick Szabo Says Banks Must go Permissionless if They Want Blockchain Benefits

Legendary cryptographer and digital money guru Nick Szabo says the only way to realize seamless, automated, and global financial integrity is if banks embrace permissionless blockchains. If banks were to embrace permissionless blockchains they could participate as well or better than the newcomers, Szabo said.

Szabo:

“But their bureaucracies are so heavily invested in the expertise and importance of local regulations and standards that it's extremely difficult for them to cut the Gordian knot and implement seamless global systems. […] So they keep trying to re-inject points of control, and thus points of vulnerability, into blockchains, e.g. through 'permissioning'; but this nullifies their main benefits, which come from removing points of vulnerability.”

Bitcoin XT Miners Face DoS Attacks

Some miners running Bitcoin XT are faced with Denial-of-Service attacks, which overwhelm their system with incoming traffic. Most notable among the victims is Czech company SatoshiLabs, which runs Slush Pool. Alena Vranova, director of SatoshiLabs, said the company received a message saying that the attack would end once it turned off the ability for users to sign blocks in favor of Bitcoin XT and an increased block size. SatoshiLabs complied with that demand because the attack was powerful enough to knock its services offline.

Vranova said:

“This is a destructive behavior […] I would admire someone who stands out, explains, and promotes his idea. This is just cowardly.”

PayPal Pulls Out of Puerto Rico; Creates Huge Opening for Bitcoin

Online payment platform PayPal has decided to leave the populous island of Puerto Rico next month. The commonwealth has imposed a 2 percent take on any money transmission, forcing PayPal's hand. According to CoinTelegraph's Evander Smart, Bitcoin would make a perfect substitute for PayPal. Not only would it work in a faster and more secure fashion completing within 10-60 minutes instead of 1-7 days, but it would be fairly difficult for these cryptographic funds to be taxed by government.

PayPal Pulls Out of Puerto Rico; Creates Huge Opening for Bitcoin

Westpac CEO Believes It's Too Soon to Panic About Bitcoin

Brian Hartzer, CEO of Australia's second-largest bank Westpac Group, has claimed that it is “too soon” to panic about bitcoin and blockchain technology. At a strategy briefing in Sydney Hartzer said the future of the technology – which has a number of “limitations” – is currently uncertain, but has a lot of potential.

Hartzer said:

“I think it is a bit too soon to panic about it. It is potentially quite powerful from an efficiency point of view. It is one of the things we are keeping an eye on.”

Mega Suffers Hostile Takeover by Chinese Fraudster, Hollywood and New Zealand Government

Free cloud storage and file hosting service Mega, which was founded by German-Finnish Internet entrepreneur Kim Dotcom, is said to have been taken over by a Chinese fraudster, Hollywood and the New Zealand government. As such, Dotcom doesn’t think data hosted on Mega is “safe” anymore.

Dotcom explained:

“The company has suffered from a hostile takeover by a Chinese investor who is wanted in China for fraud […] He used a number of straw-men and businesses to accumulate more and more Mega shares. Recently his shares have been seized by the NZ government. Which means the NZ government is in control.”

Mega Suffers Hostile Takeover by Chinese Fraudster, Hollywood and New Zealand Government

Former US Advisor Says Blockchain Systems Could Threaten Privacy

Long-time White House advisor and US government official Dr. Harald Malmgren believes blockchain technology is likely to be used by the world’s central banks to create a “universal cashless system.” Malmgren touched on the policy push by many governments worldwide to move transactional systems from those dominated by cash to those comprised of digital, trackable transactions. In his view, central banks, private companies and governments desire blockchain-like systems because of the data that would be accessible to them.

Malmgren explained:

“The people now intensively working on a mechanism for a cashless society are building it around the concept of blockchain technology. In essence, there would be a single ledger that records each expenditure or revenue event (the block), linking them chronologically with every other subsequent purchase, sale, or revenue event in a recorded chain.”

Remittance Startup Rebit Partners with Mobile Money App ZipZap

Philippine rebittance service Rebit.ph has partnered with California-based global transaction network and mobile money transfer app ZipZap. The partnership will allow Filipinos in Canada to use the ZipZap mobile app, connect it to their bank account, and send money back to the Philippines using their smartphones without having to know anything about Bitcoin as a transfer mechanism.

Rebit.ph's John Bailon said:

“We’re excited and proud to be working with the ZipZap team. We believe this partnership is a perfect example of how blockchain technology can be used beneficially without any risks to the end user, who in this case are our fellow Filipinos in Canada. ZipZap provides a great service that we believe will greatly benefit our service and vice-versa.”

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