Weekend Roundup: Bitstamp Troubles, Lighthouse Project Beta, and More Paycoin Controversy

Bitcoin Weekend Roundup from CoinTelegraph.

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Weekend Roundup: Bitstamp Troubles, Lighthouse Project Beta, and More Paycoin Controversy

1. Bitstamp Warns Users to Stop Depositing at the Exchange, Cites Problem with Hot Wallet

Alyssa Hertig reported Monday that the Bitstamp exchange warned users to halt any deposits because of a hot wallet issue. We later found out that hackers stole more than US$5 million from one of the exchange’s hot wallets. On Friday, Ian DeMartino reported that Bitstamp came back online.

2. Lighthouse Beta Launch To Challenge Bitcoin Foundation's Control of Core Funding

Charlie Richards reported Thursday that Mike Hearn’s long-awaited Lighthouse project is preparing its beta launch.

“Mike Hearn, one of the Bitcoin project's core developers, is preparing to launch the beta of the Lighthouse crowdfunding platform, one which looks set to change how core Bitcoin development is funded.

“Making use of an under-implemented conditionality function built into Bitcoin's central code, Lighthouse opens the door to users easily creating contractual and crowdfund-style Bitcoin transactions.”

3. Paycoin Attempts To Explain Away Pay Floor, But Deleted Statements Appear To Tell A Different Story

Ian DeMartino has been all over the Paycoin story, as its many dimensions unfold.

“At the center of the Paycoin controversy is the disagreement among critics and GAW over [whether] the US$20 price floor was ever actually something they promised to enforce. The company recently released a statement explaining their side of the argument.

“They claim that the US$20 figure was based off of figures ‘very much like a mathematical equation’ and that their plan of  ‘expanding market capitalization, and crafting the mechanisms to ensure the market did not grow faster than the rate of adoption among users, the overall growth rate’ should have been enough to hold the US$20 price point, and blames the lower price on ‘dumpers.’ (Paycoin currently sits at US$ 4.05 according to CoinMarketCap.)

“Nowhere in the updated statement does it talk about Paybase using its market to influence the coin's price, nor plans to use the Coin Adoption Fund to help keep ‘stability,’ as was previously spoken about.”

4. Dish Network Launching IPTV Service Payable in Bitcoin

Carlo Caraluzzo reported Thursday that Dish, formerly Dish Network, is launching an online television service, with bills payable in bitcoin.

“The service will operate separately from standard Dish lineups. Users will be able to buy packages that allow them to stream their favorite shows over the internet, if they have an existing cable or satellite subscription.

“The new program by Dish is available for streaming on computers, IOS and Android devices, Amazon Fire TV, and Chromecast. Several channels will be offered at launch, with others added at a later date. Subscriptions cost US$20 per month.”

5. Magma Venture Invests US$400K Seed Funding in ‘Value 3.0’ GetGems Project

Cheryl Hulseapple reported Monday that the team behind Gems received additional funding.

“People say ‘Bitcoin is risky,’” Ran Achituv from Magma VC told Hulseapple:

“At the end of the day the worst case scenario is you lose 100% of your investment. You know the statistics in venture [capital]. So you should be afraid of the bleeding edge. However you need to employ strong logic and business sense. ...

“In the Gems case, it's a full house on all parameters. We're not investing in Bitcoin at all. Some might confuse it. We invest in cryptocurrency, the blockchain and what it enables from a user and ecosystem perspective.”

Two quotes taken out of context

“Full disclosure: I paid 50 cents in fiat, twice, to use the restroom in Arnhem Central station.”

— Allen Scott, “My Experience in Bitcoin City in Arnhem

“Most drug dealers, for an example, still communicate with simple text and phone conversations.”

— Ian DeMartino, “No More Burners

This section is really just a ploy to highlight some of the good reporting CoinTelegraph’s writers have done this week. Read the two stories above when you get the chance, as well as Carlo Caraluzzo’s reporting on IP issues regarding the term “Bitgold.”


  • Whether serious or trolling, Coin Fire received a death threat on Friday morning, and the outlet says it has “sent the comment and all logs associated with it to law enforcement officials.”
  • Rick Falkvinge, wrote in an article for TorrentFreak: “A Pirate Party representative is writing the European Union’s official evaluation of the copyright monopoly, and listing a set of necessary changes.”

Market activity

Bicoin Price

Number of Transactions

The normal charts we use from Blockchain.info are acting up this week, so we are referencing Coinbase’s price and number-of-transactions charts instead.

The week started with a quick climb in bitcoin prices, from about US$276 on Sunday, to US$287 on Monday, to US$298 on Tuesday. After Tuesday’s peak, prices cooled to a fairly stable range in the US$280s until Saturday morning EST, when we saw a dip back down to US$276, where the week started.

The price rise — and the news about the Bitstamp hack — on Monday coincided with an unusual early-week spike in the number of transactions, and there were more than 95,000 unique transactions confirmed that day. On Thursday and Friday, numbers broke through the 100,000 mark. According to Coinbase, the 107,000-plus on-blockchain transactions are a new high-water mark for the network.

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