Vivid History: ‘How Money Got Free’ Is the Untold Story of Bitcoin

An early bitcoin developer and entrepreneur, Alex Waters served as COO and CIO for bitcoin exchange startup BitInstant. Later going on to start several bitcoin ventures, he was also at the forefront of efforts to boost its regulatory compliance.

In this opinion piece, Waters reviews “How Money Got Free: Bitcoin and the Fight for the Future of Finance” (Oneworld Publications), arguing it captures the zeitgeist of the original cryptocurrency and the sprawling – all too human – movement that helped it reach the masses.


I have long suspected, owing to its sheer brilliance and idiosyncratic beauty, that bitcoin was in fact brought here by aliens from another planet.

Brian Patrick Eha’s vivid history of bitcoin, “How Money Got Free: Bitcoin and the Fight for the Future of Finance,” which captures in thrilling journalistic fashion what I experienced in my years working on this remarkable technology, only confirms my suspicions.

I regret not recording what I saw and felt while working on bitcoin — the fleeting moments of intense joy and dismay that once seemed too meaningful ever to forget. But at the time, it was all I could do to keep up with the pace, and my life became a blur of 80-hour working weeks devoted to the engineering project of a lifetime.

As the years passed, and the blockchain industry exploded, it seemed that these beautiful moments of intellectual adventure would remain only as fading memories, slowly dimming as I aged.

The idea that an author could capture the essence of that stirring time seemed impossible even in my most optimistic moments. Yet, just as I had initially done with bitcoin, I came to find in reading Eha’s book that I had underestimated once again.

From the top

Eha starts at the beginning, sparing no detail.

The era he eloquently describes was an alternate reality which brought together the brightest, hardest-working and most ideologically extreme individuals I have ever known. We shared common goals and an outsider camaraderie that only grew stronger as we made progress in the early years of bitcoin’s ascendance. Looking back, it’s sobering to realize that some of us were imprisoned or otherwise suffered as a result of the desire to improve and promote this new kind of money.

For some of my fellow pioneers, the intensity of their ideological commitments became a prison in itself.

Early bitcoiners collectively witnessed the radical dismantling of tribal and national affiliations, and the formation, in their place, of a new global citizenry. The birth of bitcoin and its blockchain was an important moment in human history – one whose legacy deserves to be documented.

“How Money Got Free” is precisely what I was yearning to read.

The fascinating detail and precise vocabulary of Eha’s writing provide a sense of closure for me personally. It feels cathartic to now possess a tome which records the visceral thrill of bitcoin’s rise, the earthshaking import of its innovations. As I read, I felt as though I were in the room witnessing the breakthroughs made by the first bitcoin pioneers.

The truth is, I have crossed paths with many of the characters depicted in the book.

Some of them were in close proximity to me for nearly a decade. Until now, I didn’t know why these people had joined the bitcoin community or how fate had guided us to share in this wonderful experiment. While I was busy working on cash remittance at BitInstant, I had very little insight into what others were working on in parallel. The challenges faced by Coinbase, Blockchain, BitPay, SecondMarket and others were just brief news headlines to me at the time, like billboards flashing past on the highway.

I had little appreciation for the depth of their intensity or the richness of the stories behind those headlines – all of which is conveyed in full through Eha’s narrative.

Consequently, “How Money Got Free” has changed my perspective on many of those people, some of whom I once thought of as competitors. What I’ve since learned is that we were all in the same boat, whatever our individual aims. Bitcoin itself is, in some sense, our parent organization, and its furtherance benefits us all.

Eha interviewed me for his book, as he did many of my former colleagues and acquaintances. When I asked what had motivated him to write it, he said that he wanted to shine a light on the pioneers and preserve the history of bitcoin’s formative years. (His book, which is both a work of investigative journalism and a tremendous feat of storytelling, focuses mainly on the period from 2009–2015, though Eha also examines bitcoin’s precursors, and an epilogue brings his narrative almost to the present day.)

The martyrs, explorers, creators, and pariahs who champion new technologies and advance society, Eha told me, are often overlooked or soon fall into obscurity. While every frontier has to be settled eventually, the lessons learned during the rough-and-tumble days are important – so that future projects are inoculated against failure by the hardships of the past.

Untold stories

“How Money Got Free” transports readers to the meeting rooms, startup couches, conference halls, online discussion boards and proverbial watercoolers where the cryptocurrency and blockchain industry took shape. It guides readers through the history of bitcoin’s implementation and explains its potential for the future.

Whether you are a bitcoin believer or a skeptic, Eha’s work will arm you with a deeper knowledge not only of the technology but of the human motives behind it. It is inspiring, evocative, and imbued with empathy for the dreamers – the “crazy ones,” as Eha puts it in the book’s dedication, echoing Steve Jobs – who move society forward.

As the book makes clear, bitcoin would not be where is it today had it not been for all of the people who clicked on a link, who read an article, who discussed, built, argued and invested. Small in themselves, each of these actions shaped our future; they contributed to the momentum of where we are going.

Naturally, our past informs our choice of what to write, what to click, with whom to argue and what to say.

Just so, early bitcoiners tended to have philosophical or political reasons for being drawn to cryptocurrency, and Eha is splendid at delving into primary sources and tracing the wellsprings of these convictions.

As we express ourselves through the use of these new technologies – the Internet, email, text messaging, social networks, blockchains – we stand to benefit from weighing the long-term implications of even our smallest interactions.

It is crucial for us to recognize and reflect on the journeys made and efforts undertaken to bring us our current way of life. But while some figures loom larger than others, every person who participates in bitcoin, even conceptually, is taking an implied risk. It carries social, legal, and financial consequences regardless of success. That risk and the willingness to take it, in the interest of furthering humanity, is what binds us together.

Eha’s book reminds me of something Faulkner once wrote: “The past is never dead. It’s not even past.”

Even now, it informs our actions, and we need to understand it if we want to understand where we are going. “How Money Got Free” conveys the essence of bitcoin’s past – not preserved in amber but alive with color and controversy.

For non-geeks, reading this book may be the first step toward acceptance of our inevitable future. It can serve as a permanent record for those who weren’t around to witness the events first-hand, and as an inspiration for all the dreamers still captivated by a transcendence which rivals the internet itself.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has ownership stake in BitPay, Blockchain and Coinbase. 

Old books image via Shutterstock



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Ledger Launches Blockchain Wallet for Smart Contract Era

Ledger, the French company known for its range of bitcoin hardware wallets, has launched a new extension of its product line: the Ledger Blue.

Billed as “the most advanced hardware wallet on the market today”, the Ledger Blue is a significant departure from the thumbdrive style of Ledger’s previous products. With a 320 x 480 pixel screen (along with BlueTooth and near-field communication (NFC) capability), it’s a handheld touchscreen device that can run a number of different applications.

In a video call, Ledger CEO Eric Larchevêque talked to CoinDesk about the product’s evolution, design philosophy and target market.

Support for smart contracts

Ledger launched its first product, the Ledger Nano, in December 2014, marketed at the time as a small, secure and low-cost hardware wallet.

Then, earlier this year, the Nano S was released – a line extension that included both a small LED screen and support for other cryptocurrencies like ethereum and litecoin. (Ultimately, it was hailed as a more affordable competitor to the popular Trezor wallet).

The launch of the Blue now comes as as a response to the increasingly complex needs of an ecosystem that now includes smart contracts, token exchanges and other types of asset trading – creating a situation where transactions and contracts can involve multiple parties and variables, each of which the signatory needs to verify.

“Say you want to develop smart contracts on ethereum, at the moment it’s hard to validate everything on a small screen,” said Larchevêque. “But the Ledger Blue allows you to build your own application to validate a specific smart contract.”

The amount of screen real estate means that an application can present multiple data fields for inspection before the final confirmation is given, an essential step when a contract will then automatically execute itself.

“With the blockchain, so much of the security relies on the endpoint – that’s why it’s really important to know that what you see is what you sign,” Larchevêque said.

The Blue also includes support for a range of cryptocurrencies: the device’s technical spec currently lists bitcoin, ethereum, Zcash, Dash and Monero, along with the ability to integrate with other wallet providers like Electrum and Mycelium.

According to Ledger’s description of its custom-built Blockchain Open Ledger Operating System, these different currency handling applications are run in isolation from each other and cannot access memory or storage used by another, meaning that cryptographic secrets should remain safe even if one application is compromised.

Tech-savvy targeted

The Ledger Blue is also built with open-source principles in mind both for software and hardware design.

Whereas most smart devices ship with completely sealed enclosures, the Blue’s case is held in place magnetically and can be detached.

In a video demonstration, Larchevêque showed the case quickly separating and reattaching to reveal the components inside, a design choice which reflects the assumption that this is a product geared toward technically skilled end users.

“We already know that crypto asset enthusiasts want to have a powerful, best-in-class hardware wallet. But the new customers we want to reach with this product are enterprise customers … who are already starting to build solutions on the blockchain using our products,” Larchevêque said.

Some enterprise clients that have already signed up include Monax and Stratumn, two enterprise blockchain platforms which will use the Blue as a hardware endpoint for their services.

With its enterprise SDK included with the product, Ledger is also hoping to attract developers to the platform.

The product, priced at €229 before VAT, is decidedly high-end, but looks to offer a vastly different user experience to anything currently on the market. Once the first units reach consumers, we’ll no doubt be hearing a range of feedback on how it compares.

The Ledger Blue is available for pre-order today, with devices expected to ship by December 18th. Customers can get 20% off for Black Friday weekend only with promo code BBF21.

Images via Ledger 



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Reveal App Channels SnapChat with a Crypto Edge

Name: Reveal

What it is: A social networking question-and-answer app for mobile.

Who’s behind it: Led by the former founders of Kindr and gossip website JuicyCampus, Reveal has raised $1.5m from Boost VC and Digital Currency Group, among other investors.

Cost: Free

Date launched: 16th June, 2015.

Basic summary: Reveal is a SnapChat-like social network that allows users to ask questions and answer via photo or video. The social network uses reveal coin, an asset on the Stellar network, as its “currency of attention”, allowing users a means to incentivize interaction.

CoinDesk rating: 4.5/5

The basics

Like most social networks, Reveal is a somewhat bizarre and often entertaining journey into mundane life, with users dedicating posts to everything from evidence of their omelette-flipping abilities to their thoughts on age-old questions about wealth and fame.

Perhaps most interestingly, the app happens to include a built-in cryptocurrency (reveal coin) that users currently earn based on the number of others they invite to the network (tracked through referrals) and how many likes their content receives. Reveal currently offers 100 RVL for every ‘like’, 1,000 RVL upon enrolment and 10,000 RVL for every new member a user invites, though these figures will change over time, the company says.

In the future, users will also be able to earn off the app’s ad revenue and, potentially, for new actions the company wants to incentivize. Reveal intends to keep 75% of its reveal coin as an investment in the future performance of the asset, which will gain in value as advertisers remove RVL from the system through purchases.

There will only ever be a total of 52bn RVL, with 13bn allotted to app users.

Using the service

Reveal’s signup process is quick and painless, requiring only a few simple steps.

To enroll, a user provides their first and last name and can opt to connect their Twitter account. Next, they are asked to connect an email account and phone number (verified by SMS message), then signup is complete.

Click the gallery below to view more images of the app in use:

Navigating the app

Once inside, users gain the ability to view and navigate posts in three streams, one devoted to friends, the other to trending posts and the final to all posts on the network.

True to its name, the video or photos appear with an exterior layer designed to be peeled away so users can ‘reveal’ the content within. Often, the outside of the posts takes shape with a messy combination of text, emoticons, colors and patterns offered by the app.

Posting content

Following a bit of an exploration, users who want to make an appearance can click a blue-green arrow in the top-right corner, which will access the app’s camera.

From there, users click to take a photo or press and hold to take a video (which can easily be erased with a back click). Videos on the service are limited to 15 seconds, with those who film for too long seeing a red bar signal time is winding down.

Also available on this screen is the option to choose how long the photo or video stays accessible to potential viewers, with users being able to limit this window to 24 hours.

Once the interior content has been created, users are able to draft a cover slide (adding their own messy exterior), then click ‘post’ to share with others.

Asking a question

One of the most advertised features of app is the ability for reveal coin to be used to incentivize other users to answer questions.

For example, fans of Vine stars like the Miuccio brothers (three muscled beach dwellers with 18,000 YouTube followers and 732,000 Vine followers) are able to ask questions with reveal coin attached. The more reveal coin attached, the higher the message appears in the user’s inbox and the more likely they are, in theory, to post a response.

The incentive is also only for a limited time, as after 24 hours, those who post unanswered questions with reveal coin attached are returned the funds.

Users can also answer questions sent to them via the questions tab (accessed by clicking the three horizontal lines on the left side of the screen) or start Ask Me Anything (AMA) sessions that invite other users to engage with them.

Making friends

As with other popular social networks, Reveal users are able to follow others with relative ease, clicking their photo beneath the content to access their profile page.

In line with its mobile-first design, profiles showcase a picture and a one or two sentence ‘about’ section alongside metrics for how many followers the user has gained and how many posts they have made.

The profile also encourages engagement, with a prominent ‘ask’ bar displayed on the page.

Pros

  • Content columns ease navigation
  • Easy to use and friendly for non-technical demographics
  • Elegant design enables feature-rich environment in mobile setting
  • Format encourages creativity and engagement
  • Impressive following ensures stream of new content

Cons

  • Currently no way to withdraw or sell reveal coin
  • Difficult to access reveal coin (requires setting up Stellar account)
  • Some app crashes
  • Lengthy reveal coin materials may turn off young user base

Competitors

Reveal would be best considered a competitor to more established social networks as well as those seeking to appeal to users with ethereal features.

The app also bears some similarity to past attempts at cryptocurrency-based social networks, including projects such as GetGems and ZapChain, though these apps are focused on messaging and tech community discussion, respectively.

Conclusion

For all those who feel the bitcoin and blockchain industry is too serious, Reveal offers a compelling breath of fresh air.

The app positions itself as a precursor to what could be a new wave of projects that prioritize user experience and use cryptocurrency as a way to experiment within established consumer-facing business models.

Beautifully designed and as entertaining (or annoying) as its fervent users, Reveal also successfully piggybacks the anti-Facebook wave of social networking, using a new economic model as a way to show how cryptocurrency can create shared ownership within these platforms.

Today, however, Reveal arguably goes too far in putting cryptocurrency in the background, meaning enthusiasts won’t have much to explore on the app given its limited functionality.

Further, it remains unclear how effective the reveal coin model will be at exposing new users to the technology should the ability to trade the coins for real-world value continue to be cumbersome.

Disclaimer: This article represents the experience of the reviewer. Please do your own extensive research before considering investing any funds.



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Digital Gold is an Invaluable Page-Turner

Title: Digital Gold: Bitcoin and the inside story of the misfits and millionaires trying to reinvent money

Author: Nathaniel Popper

Publication date: 19th May 2015

Summary: Remember the headlines that first mentioned bitcoin, Mt. Gox, the Silk Road and Bitcoin Jesus? Those were fleeting peaks on the events unfolding behind closed doors in the development of bitcoin. Digital Gold is your backstage pass to those events. It’s a compelling and extensive narrative that gives a reader a personal look at the heroes and villains of bitcoin’s brief history.

Digital Gold presents the most extensive history of bitcoin thus far, making it an invaluable page-turner for bitcoin aficionados and newbies alike. It follows the ineptitude of Mt. Gox CEO Mark Karpeles (and his cat), the rise and demise of the Dread Pirate Roberts and bitcoin evangelists Roger Ver and Charlie Shrem. Digital Gold is a must read for anyone interested in understanding what many consider to be the greatest invention since the Internet.

An accessible account

In April 2013, New York Times technology and finance reporter Nathaniel Popper described the Winkelvoss twins as “the first prominent figures in the largely anonymous bitcoin world”. This was the first time Popper had covered bitcoin, but would not be the last.

The bitcoin world is less anonymous today, but until Digital Gold, we’ve lacked an accessible account that traces today’s growing bitcoin industry back to the early days. Digital Gold is the perfect resource for the reader interested in the work that preceded bitcoin and the extent of its uses today.

Bitcoin is constantly editorialized; while some write its obituary (again and again), others envision its revolutionary future. Nathaniel Popper approaches the scene as a curious observer who condenses the passionate voices of bitcoin visionaries and nemeses into a detailed narrative.

He first began covering it when the Winklevoss twins started purchasing large quantities of bitcoin in 2013. Since then, he has maintained a remarkably objective tone in his reporting. His continued reporting on bitcoin through the past few years has helped bring bitcoin’s saga into mainstream media and equipped him with the experience to write this book, the first of its kind.

The beginning of the adventure

The adventure begins in old chat rooms, where cypherpunks pioneered public/private key cryptography, and picks up steam from there. It explores the first bitcoin transactions, the first bitcoin giveaways and the early stage discoveries, giving an intimate account of bitcoin’s protagonists that lets the reader watch over their shoulders.

Following the characters from news headlines makes for a nervous first hand ride as we watch the rise of the Silk Road and Mt. Gox, with all the early problems that each faced.

A great strength of the book is not just the extensiveness of the research, but the way in which it is fit together. It both maintains the intimacy of exploring bitcoin’s past with the main characters and weaves the different threads in and out of each other as the bitcoin community grows in size. One of these cases comes from bitcoin’s use in an Argentine black-market currency exchange (a teaser is available here).

Seeking to curb inflation, the Argentine government put in place currency exchange controls to stem the flow of dollars out of the country. They placed no such restrictions on bitcoin and so “bitcoin … was on display in Buenos Aires, at the first conference hosted by Bitcoin Argentina”.

With conventional banking services, event organizer Diego [Gutierrez Zaldivar] would receive 595 pesos for a $100 ticket after a 20 day wait. However, using Argentine startup BitPagos, each $100 ticket yielded around 920 pesos. No longer a thing of speculative uses, bitcoin is now used by freelancers and businesses working with foreigners.

These currency controls are response to a larger problem in Argentina; chronic inflation which regularly destroys family savings. This life experience is what stirs Argentine entrepreneur Wences Casares to action and what draws Popper into leaning heavily on his perspective.

A candidate for most interesting man in the world by Popper’s account, Casares acts as the first high profile bitcoin evangelist. He introduces many notable players to bitcoin, each of which will lead the reader to say ‘ah-ha’ out loud. Casares also argues for the widespread adoption of bitcoin as a digital asset (a perfected version of gold), making for a rather uncoincidental title of the book.

He serves largely as the protagonist of Popper’s work and his involvement goes well beyond organizing the first Argentine Bitcoin Meetup and running what was for a time the best funded bitcoin startup.

Around the world

Popper uses Argentina to describe real uses in a unique political economy but also jumps around the world to Japan, China, and Tahoe to describe the many other niches of bitcoin’s development. In doing so, Popper never fails to include a bit of bemused comedy.

He follows the rise and fall of the comically inept Mt. Gox CEO Mark Karpeles (“He was two years into running the world’s largest bitcoin exchange, but had still not attended a single bitcoin event abroad – a fact that he blamed on the sickness of his cat, Tibane, who needed daily shots that Mark believed only he could administer”) and the rise (and fall) of Silk Road (the customer review of anonymous merchants fed a “feedback loop [that] created a remarkably engaged online community in which pot and heroin highs were discussed with the same level of analytical detail that Consumer Reports brought to its toaster reviews”).

Popper briefly describes the spending habits of the new bitcoin elite, illuminating the seedy underbelly that turned many away from bitcoin. Not whitewashing the behavior of the some early adopters, Popper covers the rise and fall of BitInstant and Charlie Shrem (“bitcoin’s first felon”) as well.

Popper uses this opportunity to show a transformation in much of the bitcoin community away from the early crypto anarchists who supported bitcoin for philosophical reasons, towards a growing desire from governments, individuals, and those looking to build bitcoin businesses for sensible regulation. Much to the relief of the reader, Popper never brings up tulips. While they were mentioned in his first article on bitcoin, Popper has avoided the temptation that traps so many. Bitcoin, he alludes, is here to stay.

Eager anticipation

Unraveling the story you already partially know, each page of Digital Gold is read with eager anticipation. It builds from unfamiliar territory before bitcoin was in the news and with each chapter it slowly tilts the focus from the past to the future. This pivot comes late in the book as Popper hurriedly tries to tie up loose ends while maintaining the objectivity that makes the rest of the book so excellent. It leaves the reader wanting more, sparking a curiosity about the many things that have happened since mid 2014.

This abruptness is notable when Popper introduces M-Pesa (a mobile money) only fleetingly. Many bitcoiners excitedly prophesy that bitcoin will help bank the unbanked and supplant remittance services like Western Union. Popper mentions these cases and their supporting voices, but sheds no light on the use of bitcoin in the developing world.

If many in the community are so convinced this is bitcoin’s killer application, why doesn’t Popper explore it further? A compelling alternative would be to introduce these ideas (among others) in an epilogue that looked towards the future of bitcoin and explained these use cases a bit more.

While Popper undoubtedly wished to discover mysterious bitcoin forefather, Satoshi Nakamoto, Digital Gold makes clear that it doesn’t matter much who Satoshi really is. He/she/they might own a significant number of coins, but just as bitcoin mining and transaction confirmation is decentralized, so is the work and effort which has brought it along this far.

Nakamoto set the ball in motion but Popper shows that the fate of bitcoin is now in the hands of investors and ideologues who continue to work on bitcoin and the infrastructure around it.

Bitcoin is no longer driven by Silk Road purchases, unregistered gambling sites, and the passionate crypto anarchists who made it viable in the the early years. Today, bitcoin is slowly gaining respect with industry leaders and, reading between the lines, Digital Gold coyly hints what may be around the next corner.

Digital Gold: Bitcoin and the inside story of the misfits and millionaires trying to reinvent money is available on Amazon or from Overstock.

Book image via Shutterstock.



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GetGems iOS App Glitters But It’s Still Seeking Gold

Name of product: GetGems.

What it is: Mobile messaging app with built-in, bitcoin-based incentivization token.

Made by: GetGems.

Who’s behind it: Israeli developer Daniel Peled, with $400,000 in strategic investment from Magma VC and $780,000 raised in its initial crowdsale.

Cost: Free to download.

Date launched: 29th April 2015.

Basic summary:

GetGems is a decentralized social messaging app built on open-source software provided by popular encrypted messenger Telegram. The app allows users to send and receive both bitcoin (BTC) and its native digital token, GEMZ.

Billed as “the first messaging app that pays you”, users earn GEMZ by helping to grow the network, with rewards of 25 GEMZ given for every referral that generates a new participant. Additionally, 27,500 GEMZ are distributed to users daily, with users receiving a part of this amount proportional to the number of users they have invited to the network.

As the app is updated, users will have more ways to earn, including viewing in-app ads.

A token created on top of the Counterparty protocol, GEMZ are currently traded on exchanges such as BTER and Poloniex at a press time value of $0.01 per GEMZ.

CoinDesk Rating: 3/5

The basics

After downloading the iOS app, GetGems launches with an animation that showcases one of the messaging service’s biggest strengths – its visual appeal. Before users can explore, however, there is a somewhat lengthy sign-up process.

Users first provide their name and profile picture and choose whether to allow the app to send push notifications or access their contacts. Next, a wallet PIN number is set and confirmed, a feature that is used to safeguard consumers from sending unwanted transactions.

GetGems then asks users to name who invited them to the service, should this be applicable. As part of this referral program, the individual would receive a referral award in GEMZ.

Using the service

While GetGems is a redesign of the Telegram messenger in most respects, the novel features of the GetGems app are its built-in bitcoin and GEMZ wallets.

For example, by typing ‘1 GEMZ’ or ‘0.01 BTC’ in the messenger, users are able to quickly transfer value. After typing any value, the ‘Send’ button will change to a GetGems or bitcoin logo, which when tapped will execute the payment. This exchange does not work at present if users send added text as part of the message.

 

Users can toggle between BTC and GEMZ, displaying the value held in each of their GetGems wallets. Clicking on the paper airplane image in the top right allows users to send money by pasting a bitcoin or GetGetms wallet address or by displaying a QR code.

On trial, we sent 0.0002 BTC over the app to a Circle address, the amount of which was quickly detected by the bitcoin blockchain and the wallet provider.

Security

The GetGems app has a simple payments verification (SPV) client built in, meaning the wallet can access the bitcoin network through ‘full’ trusted nodes rather than connecting directly. According to the company, this removes the need for trusted servers while maintaining fast performance on mobile devices.

For privacy conscious users, it should be noted GetGems controls user private keys for in-app wallet addresses, crediting users for GEMZ that have been deposited. This makes transfers instant, but requires them to be completed off of the bitcoin blockchain. Password resets are also not allowed, as private keys are derived from the password.

The passphrase for accessing the wallet is encrypted locally on the device, meaning that funds can be spent only if both the phone and the PIN are compromised by bad actors. Further, after several failed attempts to guess the PIN, the server will lock the account and prevent decryption.

Going forward, GetGems is seeking to enable users to hold multiple GEMZ wallets on the app, a feature requested by larger crowdsale participants, and create a desktop application.

Pros

  • Intuitive messenger allows easy BTC and GEMZ exchange.
  • Notification options allow wide range of customizations.
  • Passphrase recovery feature guards against phone loss.
  • Straightforward wallet system for external BTC and GEMZ transfers.
  • Strong visual elements and appeal.

Cons

  • Infrequent glitches and crashes.
  • Inability to purchase GEMZ in app.
  • Telegram users receive messages sent on GetGems.

Conclusion

Armed with a vibrant pink display, GetGems evokes a playful tone that arguably helps encourage users to overcome some of the app’s less intuitive features.

This sense of discovery propels past issues such as balances that were slow to update or sudden, unexpected crashes or glitches.

The best case for adding GetGems to your iPhone may be to consider the product as a functional social wallet, one that brings you together with other bitcoin users who may be using Blockchain, Coinbase or Circle in an easy and intuitive way, while rewarding you with a secondary set of tokens.

However, the biggest hurdle for GetGems to overcome will be establishing consumer behavior in the way that it envisions.

Should users fail to see any value in exchanging bitcoin while they message, it will be difficult for GetGems, or any competitor, to encourage your social circle to stick around.

Update 20:00 UTC, 5th May: GetGems has indicated that it has since responded to initial crash reports in the days after launch, updating the platform to resolve these errors.

Disclaimer: This article represents the experience of the reviewer. Please do your own extensive research before considering investing any funds.



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Simplicity is Bitcoin Investment App Lawnmower’s Strength and Weakness

Name of product: Lawnmower

What it is: Bitcoin’s take on the popular investment app Acorns, Lawnmower rounds traditional bank card purchases up to the nearest dollar and invests the change in bitcoin.

Made by: Lawnmower.io

Who’s behind it: Three University of Florida classmates Pieter Gorsira, Patrick Archambeau and Alex Sunnarborg and strategic backers Boost VC.

Cost: Free

Date launched: 9th April

Basic summary: Lawnmower provides a painless way for users to start saving bitcoin in incremental amounts.

CoinDesk rating: 3.5/5

The basics: Available as an iOS app and currently in Android beta, Lawnmower creates a Coinbase wallet for users, connecting the address to a bank account or credit card. Lawnmower monitors the user’s traditional purchases, rounding transactions to the nearest dollar, or in the case of a $3.00 transaction, the next dollar, converting this “change” to bitcoin.

Using the service

To install the service, iOS users download the app to their preferred device. From there, sign-up is broken down into a three-step process.

The app is currently limited to users of one of five traditional banking partners, all of whose services can be accessed via financial API platform Plaid. Available banks currently include Bank of America, Chase, Citibank, Wells Fargo and US Bank.

Once selected, users must correctly answer security passwords used in conjunction with their account. Unlike when accessing online banking, users must correctly answer all questions before moving forward. Lawnmower then displays a screen indicating that it has yet to detect any transaction activity, one that is eventually populated with a history of its purchases.

The app requires a minimum of $4 be collected in clippings from purchases before it purchases bitcoin on behalf of the user.

Pros

– Easy signup process for Coinbase users
– Straightforward user interface shows bitcoin accrued, the dollar equivalent and a history of recent purchases at a glance.

Cons

– Limited currently to USD investors
– Requires Coinbase account
– Stats page yet to be developed
– Users currently limited to one investment option.

Security

As for security, Lawmower outsources most of the responsibility to its related third-party providers. Banking transaction data is stored outside the app by API provider Plaid, while users can only sell or send bitcoin through their Coinbase accounts.

Conclusion

Given the overly ambitious aims of many companies in the space, Lawnmower should be lauded for its success at delivering on a simplistic vision. Further, it provides what is most likely the easiest way to purchase bitcoins, requiring only that users to opt in to a program and go about their normal business.

As for how it ultimately delivers on its value proposition to investors, however, that depends on the point of view of the user. Alternative apps, like Acorns for example, offer a wide range of investment options, from government bonds to real estate stocks, diversity that isn’t yet available in the Lawnmower app.

Lawnmower’s ultimate usefulness as an investment tool may be dependent on the wider success of cryptocurrency as an asset class, though whether bitcoin will be enough to attract a large target market of investors looking to grow their savings, and by extension, Lawnmower as a company, remains to be seen.

Disclaimer: This article represents the experience and opinion of the reviewer. Please do your own extensive research before considering investing any funds.

Images via Pete Rizzo for CoinDesk.



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Is Purse’s Discount Really Worth the Hassle?

Name: Purse

What it is: A peer-to-peer marketplace that matches individuals wanting to buy items on Amazon at a discount with others wanting to buy bitcoin with a credit card or via PayPal. The service claims discounts of up to 20% for bitcoin shoppers.

Who’s behind it: CEO and co-founder Andrew Lee, previously an advisor for BuyBitcoin.ph and co-founder at Superior Payments Processing LLC, and co-founder and CTO Kent Liu, formerly an engineer at IBM and Northrop Grumman Aerospace Systems. (See the full team here.)

Roger Ver and BTC China’s Bobby Lee (also an adviser) are both investors in the company.

Cost: I was charged a £0.06 ($0.09) fee for placing an order equivalent to £6.51 ($9.82), or approximately 1%.

Date launched: December 2014

Summary: Purse touts hefty discounts for people shopping at Amazon via its service, but time delays and complexity ruin the user experience. Additionally, limits on discounts available for new users lower incentive to use the platform.

CoinDesk rating: 2/5

How it works: The service is marketed at people who would like to purchase Amazon items with bitcoin, since the digital currency is currently not accepted by the online retailing giant.

The process is similar to other peer-to-peer marketplace such as Brawker, a site that offers discount shopping at all legitimate retailers.

Purse acts as an intermediary by facilitating a user platform, bitcoin wallet and escrow for completing transactions.

Let’s imagine that Alice wants to buy a tablet device from Amazon and get a discount of 8%. In order to do so, she would have to create a wishlist for the item on Amazon and associate it with her delivery address.

Alice would then post her wishlist on Purse, with her desired discount, and upload the cost (equivalent to £100, assuming free delivery) in bitcoin to her escrow wallet address on Purse.

Bob, meanwhile, would like to buy £100-worth of bitcoin with his credit card. He is prepared to pay a premium to be able to do this without having to register with a bitcoin exchange and provide ID and proof of address, thus covering Alice’s 8% discount himself.

Bob goes on to purchase the item for Alice from Amazon using his card for £108.

Once the item has been delivered to Alice’s address, she notifies the Purse platform and her bitcoin is released from escrow and arrives in Bob’s wallet.

This way, both customers have a need fulfilled by Purse’s service.

The company makes revenue by charging both parties a small fee.

See the company’s explanatory video below:

Purse Promo Video from PurseIO on Vimeo.

Using the service

Registering

Purse requires users to have an Amazon account.

To register on Purse, consumers are required to provide a user name or email address and a password.

Once the user has signed up to Purse, he or she will have to create an Amazon wishlist.

Amazon automatically creates a wishlist URL, which will need to be imported into Purse.

The user will also have to transfer funds from their personal bitcoin wallet into their Purse-hosted wallet.

Placing an order

Purse enables the user to choose the desired discount of up to 20% once the bitcoin funds have been transferred to its platform.

It is important to note, however, that first-time buyers are limited to a maximum discount of 8%.

Once the level of discount has been selected, the consumer receives a breakdown of the Amazon total, the fee charged by Purse and the total amount saved.

The user can then place the order.

purse wishlist imported

Delivery

Once the order has been placed and accepted by the bitcoin buyer, the user receives a notification at the email address provided during registration.

The bitcoin remains in escrow until the user notifies Purse that the order has been successfully delivered.

Reflecting on the process

I encountered a series of issues with my order, which comprised of some sticky notes and a pack of ball pens.

My order was initially accepted by a buyer, who then rejected it. To try and understand why, I looked on the Purse marketplace page and realised that most smaller offers were still awaiting a buyer.

Two days later, I received a notification stating that another buyer had accepted the order.

The buyer contacted me to let me know that Amazon was only able to ship part of my order – the sticky notes.  I was not entirely sure as to why this was the case, but Purse indicated that it had something to do with not selecting third party shipment on Amazon, which I had, as this is set to default.

A ‘dispute’ was raised for the order, and a tedious exchange of messages between the Amazon buyer, Purse and me began.

Purse confirmed that I would receive a partial delivery and that I would be refunded for the undelivered item.

I received my order approximately a week after the order was placed and proceeded to confirm the shipment so that I could get my refund.

Purse refunded me relatively quickly. However, I was charged a fee of 0.1% for withdrawing my bitcoin back into my Coinbase wallet.

I struggled to understand why a service would charge you for withdrawing funds that have previously been refunded to you. However, a spokesperson from Purse said that this was merely the standard miners’ fee – awarded for confirming transactions on the bitcoin network – and was not kept by the platform.

Overall, despite my order arriving in good condition, I was left wondering if the hassle was really worth it for such a small discount.

Pros

  • Purse offers relatively generous discounts to people wanting to buy Amazon items with bitcoin
  • Being able to modify the level of discount to attract buyers is a benefit
  • The service enables you to communicate with a Purse representative and the bitcoin buyer, keeping you updated throughout the process
  • Purse respond to user requests relatively quickly and resolves issues in a timely manner
  • Bitcoin buyers and sellers are able to review each other and award points.

Cons

  • It can be difficult to find a buyer for a relatively small order
  • As a basic level user, you are initially limited to a 8% discount, although the front page of the site strongly promotes a figure of 20%
  • The buying process is somewhat convoluted and can be confusing at times
  • Not being able to receive my full order – although this seems to be an issue with Amazon not shipping multiple orders, rather than a problem with Purse
  • The order arrived a full seven days after it was placed and I had to spend a considerable amount of time liaising with the buyer and Purse. I don’t feel that the discount obtained justifies the time spent talking to both parties.

Competitors

Brawker is very similar to the service offered by Purse, but allows shopping at any online retailer (see the CoinDesk review).

Users are also able to spend their bitcoin by purchasing gift cards for e-commerce sites. Companies such as eGifter, Gyft and Gift Off. enable customers purchase digital gift cards with bitcoin (and sometimes other cryptocurrencies) and then spend those cards at sites like Amazon, iTunes, Spotify and many others.

However, unlike Brawker and Purse, these services do not currently offer any discounts.

Conclusion

post its
The delivered product

Being able to spend bitcoin at Amazon is a huge step forward for general adoption, and the potential discounts offer an extra incentive to shop with the digital currency rather than credit/debit cards or PayPal.

The service is also useful for people who wish to purchase bitcoin with their credit or debit card – especially for those that do not want to register with ID and proof of address at an exchange.

While I do not plan to use the service again for smaller orders (the incentive is just not big enough), I would consider doing so for more expensive items where the discount results in a more notable saving.

Disclaimer: This article represents the experience of the reviewer. Please do your own extensive research before considering committing any funds to the service.



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Haasbot 2.0 Brings Automated Trading to the Next Level

Name: Haasbot 2.0

What is it: Haasbot is a sophisticated bitcoin trading bot suite designed primarily for bitcoin trading professionals, but amateur traders and hobbyists could find it useful too.

Who’s behind it: Haasbot started life as a personal project created by Stephan de Haas, but eventually the small team behind the bot decided to commercialise their product. The core team includes de Haas, lead developer and founder of Haasonline; marketing manager Phil Donsbach; developer Lander Vanhaverbeke; and support specialist Theo Goodman.

Cost: Haasbot 2.0 is available in three different pricing tiers. Haasonline uses a subscription-based model. A three-month ‘Beginner’ licence costs 0.22 BTC, the ‘Simple’ licence is priced at 0.30 BTC, while the full ‘Advanced’ licence costs 0.45 BTC. The company also offers 6- and 12-month licences. Payments in fiat currency are not accepted.

Product Launched: January 2015.

Summary: Haasbot 2.0 provides users with a wide range of choice, with three basic bots, all of which feature a number of different presets, as well as a range of user-customisable options. Depending on the licence, users can set up several interconnected bots capable of performing a range of different functions.

CoinDesk rating: 4.5/5

The Basics

While Haasbot is a relatively familiar name in some circles, bitcoin users may not have heard of it. It is a niche software solution for bitcoin traders rather than mainstream users, a professional tool for people that know what they are doing.

In its latest incarnation, Haasbot 2.0 offers a number of new features, but the big news is the entirely reworked user interface (UI) that should improve user experience over 1.x versions.

haasbot-phil-chart

The basic functionality remains unchanged and Haasbot 2.0 still offers three types of standard bot: Trade, Arbitrage and Maximum Order. Trade bots are supported by a range of technical analysis indicators, safeties and insurances. The 2.0 update also brings customisable Script bots and other new features.

The Advanced licence enables users to create an unlimited number of bots and use all available safeties, insurances and indicators. The Simple licence is limited to three bots from each category for a total of nine bots, while the Beginner licence supports two bots from each category, allowing the user to create a total of six bots. Beginner and Simple licences also offer a limited choice of safeties, indicators and insurances on trade bots.

The team also claims transparency and prides itself on providing support via forums and a wiki page, as well as integrating some features requested by users.

Haasbot 2.0 currently supports Bitfinex, Bitstamp, BTC-e, CEX-IO, Cryptsy, Huobi, Kraken and a few smaller exchanges. Users can track prices on one exchange while trading on another, so if they spot a trend on one particular exchange, they can gain ahead start on another exchange.

Using the service

As mentioned, Haasbot 2.0 is not aimed at mainstream bitcoin users. The target audience is people who understand the markets and trading. However, this does not mean that Haasbot 2.0 is not user-friendly and cannot be used by hobby traders. As always the caveat is, do not trade with any coins you are not prepared to lose.

With three different licence tiers, three standard bot classes and a practically countless combinations of safeties, indicators and insurances that can be assigned to individual bots, getting to grips with Haasbot 2.0 could be problematic for users who have no previous experience with trading bots.

This is one of the reasons Haasonline maintains a very comprehensive wiki, complete with detailed guides, walkthroughs and other useful resources. There’s also a support forum for user inquiries, suggestions and more. The sheer number of options also means that we could not test every scenario in any sensible timeframe. Haasbot 2.0 is a professional trading tool and we simply could not cover the full functionality.

Installation and setup

The new 2.0 update brings a complete overhaul of the UI and an all-new web server interface. The installation process is relatively straightforward and the developers recommend Google’s Chrome browser as the best platform for the Haasbot Trade Server. Once that is installed, it is just a matter of entering licence and API information and you are ready to start trading.

With Haasbot 2.0, you easily keep track of all active bots and set up various notifications, straight from your browser, using a convenient dashboard. The only downside is that mobile functionality remains limited, so if you happen to be on the road you may have a harder time managing your bots.

haasbot-screen-dashboard

Creating trade bots, order bots and arbitrage bots is just as easy, it’s a one-click affair, but setting them up and tweaking all the parameters may take a while. Effectively, it all depends on what you want your bots to do – and when.

Script bots are an entirely new feature introduced with Haasbot 2.0 and they are completely customisable and programmable in C#. They do, however, require a bit more time and knowledge to set up.

The latest update also brings a new price comparison feature, along with a white server framework for more accurate and faster price tracking.

Haasbot 2.0 also comes with three new trade indicators: Elliot prediction, Fibonacci and IchiClouds, and is now available in English, German and Dutch languages.

Types of available bots

Haasbot 2.0 offers three basic bot categories, configurable out of the box.

Trade bots use a combination of indicators, safeties and insurances selected by the user to act as a buy or sell signal. The signal is cross-referenced with the current position and the trade is executed if all criteria are met. The bot will also consider the insurances created by the user, as well as safeties.

haasbot-bot-1

The most frequently used safeties are Dynamic Drop Loss and Static Drop Loss, which monitor prices for a sudden drop and trigger trades based on thresholds set by the user.

A wide range of indicators is available, depending on the type of licence you choose. The most popular insurance is ‘Overcome Fees’, which ensures that trades are not executed unless the profit is greater than the fee.

haasbot-bot-3

Order bots operate depending on a number of conditions or pre-orders. A number of conditions can be combined in a single bot to create customised bots, allowing traders to emulate support and resistance levels.

haasbot-bot-2

Arbitrage bots can be employed on exchanges with multiple currency pairs, allowing the trader to generate a profit through exchange rate variations. In such a scenario, the bot is configured to use a base currency and then monitors price differences related to the base currency, allowing automated low-risk transactions.

Configuring bots

There are myriad ways to configure bots, allowing users to create very elaborate strategies, such as virtually interconnecting bots and setting up bots that can automatically take over from less profitable bots in certain scenarios. Of course, this involves significant planning, along with some level of trial and error.

‘Backtesting’ allows users to see how their trade bots would have performed in action over the last 3 hours to 32 weeks, using historic market data. This feature speeds up the setup and helps remove ambiguities. Backtesting can be used on trading and arbitrage bots.

haasbot-screen-2-backtest-lr

Users can set various indicators to execute buys or sells, or both. Trade signals can be reversed as well. In case your strategy loses money in backtesting, you can simply reverse the indicators and proceed. Script indicators allow traders with programming skills to devise their own completely customised algorithms.

To set up an arbitrage bot, the user needs to select a base currency in which profits are to be generated. The bot works with three user-selected currency pairs, such as USD/BTC, USD/LTC and BTC/LTC. In periods of high volatility, the bot will be able to find price differences between the pairs and execute trades. The bot automatically takes fees into considerations and will not trade unless profit covers the fee.

Order bots are basically pre-programmed bots allowing users to create buy and sell orders in advance, based on price thresholds. They can also be strung together to form dependencies. Order bots can be dependent on other order bots, ensuring that the most profitable trade is executed. For example, if you have a trade bot set up to sell at $250 and another bot set up to sell at $265, the first bot won’t take action if the second bot is able to sell at a higher price.

Let the trading begin

Since we are dealing with an automated service, there is really not much to report. Everything works as advertised and the end result depends on what you decide to do with your bots.

As you can see, the CoinDesk test bot worked, but did not make a fortune for a number of reasons (limited time and unrealistic setup to name two).

haasbot-screen-sample-trade-bot

Perhaps the biggest change with the Haasbot 2.0 update is the browser interface, which I found user-friendly and relatively simple to use, given the complexity of the suite. It also adds a bit more functionality, allowing users to control their bots with less effort.

It is also possible to use a VPS (virtual private server) in order to access the interface on mobile devices, such as smartphones, tablets and notebooks.

Pros

  • The new web interface is user-friendly and looks good. It is a big improvement over Haasbot 1.x in terms of appearance and functionality.
  • Wide range of indicators and addition of new ones in 2.0 update, along with new features like script bots.
  • Haasonline tends to keep things personal and is in constant touch with users via its support forum, wiki and direct contact. Developers routinely add features and tweak the platform based on community input, so if you come up with a good idea, the team may well implement it.

Cons

  • While the web interface is accessible from mobile devices via VPS, support for mobile devices leaves much to be desired. The company is considering developing iOS and Android apps that would provide vital notifications and allow users to shut down bots on the go.
  • Haasbot 2.0 licences are not cheap. Though this is subjective – depending on how serious you are about trading and how much you are willing to invest, the licences could be either too expensive or a negligible cost considering your potential gains. Once again, this is a specialised platform and it’s not designed for inexperienced users.

Competitors

There are already a few bitcoin trading bots on the market. Some are free, some offer free trial periods, while others use a subscription-based model. CoinDesk took a closer look at a number of trading bots in a feature last June.

These include Butter Bot, CryptoTrader and Acacia Trading, but it’s hard to directly compare the platforms due to a number of reasons. Be that as it may, Haasbot 2.0 tends to offer more functionality than competing solutions, but at a premium price.

Conclusion

Haasbot 2.0 is more than an incremental update, as it offers a number of new features, namely the all-new web interface. The platform also offers three basic types of bots, along with new script bots that can be customised.

The extensive choice of options, safeties, indicators and interactions between the bots allows traders to devise elaborate trading strategies, provided they choose to buy the Advanced licence with no limitations. The downside is the cost of the top-tier licence, but cheaper licences are available too, which means you don’t have to spend much to try the service for a limited time.

It should also be noted that Haasonline was forced to increase pricing due to the low price of bitcoin. Remember, the company does not accept fiat payments.

However, for serious traders used to trading dozens or hundreds of coins on a regular basis, the Advanced licence at 0.45 BTC for three months probably doesn’t sound like much.

Bottom line – Haasonline raised the bar with the Haasbot 2.0 update and the competition has some catching up to do.

Disclaimer: This article represents the experience of the reviewer and is not a recommendation or financial advice. Please do your own extensive research before considering investing any funds.



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Brawker Let’s You Buy ‘Almost Anything’ with Bitcoin

Name: Brawker

What it is: Brawker is a site that offers discount shopping at all legitimate web retailers. The firm says users can buy “almost anything” online with bitcoin. It also enables people to semi-anonymously purchase bitcoin by shopping for others with their credit/debit cards or PayPal.

Who’s behind it: Co-founder and CEO Cyril Houri previously founded Infosplit, the first company to provide geolocation based on IP address, and Navizon, a firm specialising in wireless geolocation. He designed and patented some of the technology that is now commonly used to geolocate website visitors. He remains chairman of Navizon.

Cost: 1% of transaction for each of the two parties.

Date launched: April 2014.

Summary: Brawker provides a very useful service for those who want to spend their bitcoins online. It’s easy to use, but it is a lengthy process, so not ideal for the time-strapped. 

CoinDesk rating: 4/5

The basics

Brawker is an online marketplace that matches people who want to buy bitcoin with others who want to purchase items online with bitcoin and gain a discount for doing so.

To sum it up as simply as possible, Alice, say, has seen a $50 scarf online and wants to buy it using bitcoin, but the site doesn’t accept payment in digital currency.

On Brawker, a user called Bob is willing to buy the scarf for Alice, in return for her bitcoins. And because he can buy bitcoins with a credit/debit card or PayPal without having to register his ID and address with an exchange, he is willing to pay a premium for those coins.

Alice wants a discount of 10% on the price of the scarf, therefore she pays Bob $45 in bitcoin and he pays $50 for the scarf, which is delivered to her.

Both parties have a need fulfilled by the service that can be hard or impossible to find elsewhere.

Brawker process

An overview of how Brawker works

Using the service

In the interests of ensuring the service works as claimed, I tested it out from start to finish.

Placing an order

I registered with Brawker using a username, an email address and a password. No ID or proof of address was required, since Brawker claims it doesn’t have to observe know-your-customer (KYC) requirements as it is not a financial institution.

Next, I visited an online store that doesn’t currently accept bitcoin and selected an item – a bottle of sloe gin, which cost £29.90 including delivery – and copied the URL of the page the item was listed on.

Note, Brawker sets no official maximum on the price of a purchase, but the service is commonly used to purchase items priced under $1,000 due to limits set by the credit card companies.

Back on Brawker, I pasted the URL, entered the item price (including postage and any taxes) and my delivery address. Using an Amazon wishlist for the purchase comes with the additional feature of hiding personal details from the buyer.

At this point, I was asked to select a discount rate. Discounts generally range from 0–20%, as above that point there is little incentive for bidders to take up the offer. I opted for a relatively low proposed discount of 5% to encourage users to accept my order without delay.

Theoretically, this could have been the start of a bidding war between multiple bitcoin buyers, who can make counter offers until both parties are happy with the discount rate. For the sake of speed, however, I accepted the first offer at my proposed 5% from user ‘gmajoulet’.

Paying with bitcoin

The exchange rate between the buyer’s currency and bitcoin is determined using figures from bitcoinaverage.com.

I sent the equivalent of £28.40 in bitcoin to a multi-signature address that acts as an escrow between gmajoulet and me.

Screen Shot 2014-11-26 at 14.15.39

Behind the scenes, there were three keys (in effect, passwords) to the escrow address I was provided with: one held by Brawker, one held by me and the other held by gmajoulet. All three are encrypted and two of the three keys are needed to finalise a transaction.

Brawker holding the third key means the company can release the funds to either party at the resolution of any possible dispute.

Brawker stores neither users’ fiat currency nor bitcoin. The company told CoinDesk that all transactions occur “directly on the blockchain, as opposed to being off-chain transactions on our servers”.

As a result, the company claims users’ funds cannot be hacked through their service, as users are in charge of their own private keys.

Awaiting delivery

In my Brawker dashboard, I could see my bitcoin funds waiting to be released. Soon after, the bidder paid for the order and uploaded the payment confirmation email as proof of purchase.

Screen Shot 2014-11-26 at 14.16.12

Once the gin arrived safely, all that remained was to notify Brawker of the delivery, which enabled the bidder’s bitcoins to be released from escrow. The entire process was completed in four days, the bulk of which was taken up with waiting for delivery.

Brawker page

I had no problem with my order, but should that have been the case, there is a ‘File a claim’ button on the site, which starts a dispute process arbitrated by Brawker and based on the information provided by both parties (including payment confirmation, tracking number and so on).

Depending on the outcome of the dispute, Brawker would either refund my bitcoins or pass them on to the bidder.

At the end of the process I was asked to rate gmajoulet and vice versa. These ratings are tracked on the public profile of each Brawker user, similar to eBay’s rating system, and give future users of the service an idea of how reliable the individual is.

Pros

  • Setting up an order is a relatively simple affair taking perhaps 20 minutes for someone with a little experience with bitcoin transactions.
  • Clean, user-friendly website interface.
  • Useful updates sent via email at every stage of the process helped keep track of what needed to be done to keep the transaction moving smoothly along.
  • Brawker enables digital currency enthusiasts to pay for items and services previously only available to customers holding fiat currency. Bitcoiners can pay for items ranging from groceries to electricity bills and parking tickets to student loan repayments, bringing the possibility of living solely on bitcoin closer to reality.

Cons

  • May not be so simple to use for a complete newcomer to bitcoin due to the slight rigamarole of using QR codes and bitcoin wallets to send and receive funds. However, most users are likely to have some experience.
  • Users need to monitor the process regularly so as to be able to accept offers, upload funds to escrow, etc. You can’t just set an order and wait, regardless.
  • What if a 15-year-old tried to buy the same item with bitcoin, or a gun? Does this open up inappropriate products up to youngsters? The company says its aim is not to enable the purchase of items that wouldn’t have been available to buyers otherwise and claims its policy is to remove items that have territorial or age restrictions, such as guns and alcohol (it also claims items made available via the Tor network are blocked). However, this obviously isn’t working, as I just purchased a bottle of gin without an age check.

See a video of how to use an Amazon wishlist to place an order:

Competitors

A service very similar to that offered by Brawker is Purse.io, but this is currently limited to shopping on Amazon.

Gift cards are another option for consumers wanting to spend their bitcoins. Companies such as eGifter, Gyft and Pockio let customers purchase digital gift cards with bitcoin (and sometimes other cryptocurrencies) and then spend those cards at sites like Amazon, iTunes, Spotify and many others. However, unlike Brakwer and Purse.io, these services offer no discounts to users – cards are redeemed on the retailer sites at face value.

Conclusion

Gin

The successfully delivered product

Overall, the ability to use bitcoin at any online store is a huge step forward and the potential discounts offer an extra incentive to shop with bitcoin over credit/debit cards or PayPal.

The service is also useful for those who want to buy bitcoin with their credit card – especially for those that do not want to have to register with ID and proof of address at an exchange. However, they must be prepared to go through the Brawker marketplace process to get their digital currency and put up with the delay encountered with waiting for the item to be delivered.

The multisig technology, while making the service more secure and allowing a fair system for refunds in the event of a dispute, did not make the process noticeably more complex than a user would expect with a standard login procedure.

I should point out, however, that buying bitcoin with a card – something that used to be rare due to the possibility of chargebacks – is becoming increasingly common through companies like Coinbase, Circle and CoinCorner, among others, and the attractive discounts may not be maintainable in the long term.

Even so, Brawker’s service frees up people to spend their bitcoins where they like – a vital step if bitcoin is ever to go mainstream. This is a service that is of benefit to individual bitcoiners and the community as a whole. What’s not to like?

Disclaimer: This article represents the experience of the reviewer. Please do your own extensive research before considering investing any funds.

Shopping basket image via Shutterstock



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Ledger Wallet Nano Provides Premium Security on a Budget

Name: Ledger Wallet Nano

What it is: A USB bitcoin wallet with smartcard security in a very compact package.

Who’s behind it: Three French startups: BTChip, Chronocoin and La Maison du Bitcoin.

Cost: €29.90.

Date launched: December 2014.

Summary: The Ledger Wallet Nano is a relatively affordable bitcoin hardware wallet with a few clever tricks up its sleeve. It also looks good and the company promises to make it even better with a companion mobile app set to launch in 2015.

CoinDesk rating: 4/5

Where to buy: Direct from Ledger or Overstock.com

The basics
Security
Using the device
Pros
Cons
Competitors
Conclusion

The basics

The Ledger Wallet Nano is a new hierarchical deterministic multisig hardware wallet for bitcoin users that aims to eliminate a number of attack vectors through the use of a second security layer. This tech-heavy description does not mean much to the average consumer, though, which is why I am going to explain it in plain language, describing what makes the Ledger Wallet Nano tick. The wallet launched in early December and for more background on the project you can catch up on our launch coverage.

ledger-wallet-nano-review-vires-keyboard

In terms of hardware, the Ledger Wallet Nano is a compact USB device based on a smartcard. It is roughly the size of a small flash drive, measuring 39 x 13 x 4mm (1.53 x 0.51 x 0.16in) and weighing in at just 5.9g.

ledger-wallet-nano-review-box

The box also contains a simple manual, recovery sheet and security card in black faux leather pouch.

ledger-wallet-nano-review-unboxed

USB flash drive on the right included for reference

I have no major complaints about the build quality, although some rough edges are visible upon closer examination. The plastic device features an aluminium swivel cover with a brushed finish like many USB drives. In fact, the design looks eerily similar to Super Talent’s Pico-A series flash drives.

Ledger Wallet Nano security concept

Ledger’s familiar design is where its similarities to traditional USB drives end, though. Since it does not use cheap NAND memory like the average USB drive, the Ledger should be more reliable. The manufacturer of the EEPROM memory used in the CC EAL5+ compliant smartcard offers a 30-year guarantee on data retention and 500,000 read/write cycles.

ledger-wallet-nano-review-smartcard-closeup

The smartcard has been an industry standard for decades and eliminates a number of security issues that may arise on devices based on multipurpose microcontrollers.

The wallet is obviously not designed as a standalone device, as it relies on the host computer to set up and execute transactions. Since the host computer is the most likely point of failure, the Ledger Wallet Nano is designed to render vulnerable or even compromised computers safe, by introducing another layer of security.

The wallet signs bitcoin transactions internally and aims to prevent man-in-the-middle (MITM) attacks by employing a security card. Without this added security layer, the wallet would be exposed to MITM attacks, as a hacker could, in theory, gain control of the computer and proceed to compromise the wallet. The security card makes such an attack less likely by providing physical two-factor authentication.

ledger-wallet-nano-review-security-card-front

No transaction can be signed without human interaction – each transaction requires the user to visually scan the security card when prompted by the wallet app. The wallet displays the payment address and asks the user to enter codes for four random parts of the address. If the right code is not entered, a transaction cannot take place.

Security card in lieu of dedicated display

The Trezor hardware wallet, which we reviewed a few months ago, employs a screen to tackle this problem, prompting the user to enter the PIN on a pseudo-random numeric pad, visible only to the user. The Ledger team opted for a different approach in the form of a security card with 58 pairs of characters.

The basic idea is the same, but the implementation is a bit different. Using a card in place of a screen obviously allows for a smaller device and keeps the overall cost down.

ledger-wallet-nano-review-security-card

The trade-off is that it also results in fewer possible permutations of the second-factor code. A persistent attacker with complete control over the user’s PC could in theory reconstruct the security card after a few dozen transactions. Each transaction would provide the attacker with more ‘depth’ until sufficient information is collected to fully map and reconstruct the contents of the security card.

As odd as it may sound, using the wallet on a number of different malware-ridden PCs would, in theory, be safer from an anti-MITM perspective than using it to make a few dozen transactions on your own computer.

Ledger is aware of these limitations and is working to develop a mobile companion app that will essentially allow another device to act as a screen for the wallet. The app will be paired to the wallet using the security card, allowing the wallet to display the challenge on the mobile device, along with the target address and amount of BTC. The user will then be able to sign the security challenge and facilitate the transaction. The company plans to release the companion app in January 2015.

Using the device

ledger-wallet-nano-review-inserted

The wallet is designed for use on desktop operating systems on Google’s Chrome browser. I used an Asus Windows 8.1 tablet with a keyboard dock as the test bed.

Installing the Ledger Wallet Nano

The installation process is relatively straightforward, but requires the use of a Google Chrome app. The user merely needs to plug in the Ledger Wallet Nano into a USB port and head over to my.ledgerwallet.com to automatically install the Chrome application, which connects to Ledger’s API server to access the blockchain.

ledger-wallet-nano-review-chrome-app-install

While comparatively popular, Chrome is not the only browser on the market and millions of users still rely on Firefox, Safari and even Internet Explorer. A platform-agnostic approach would have been preferable, but for a number of reasons, including security certificates, it is simply not feasible. Linux users also need to create a set of udev rules to allow access to the device.

Once the app is ready, the user is prompted to enter the PIN. The user can choose the PIN or use one suggested by the installer. Then comes the recovery seed – when the wallet is initialised, it generates a 24-word mnemonic seed which must be stored, preferably on the included recovery sheet.

ledger-wallet-nano-review-recovery-phrase

Don’t try this at home – the seed should be written down and stored safely

The seed is displayed only once and must not be stored on your computer, in digital form. The seed is the only way of restoring the wallet in case of loss or hardware failure. This can be done using a replacement Ledger wallet, but the process also works on alternative BIP39 wallets like Electrum.

ledger-wallet-nano-review-new-wallet

The Ledger Nano must be initialised on an uncompromised computer. One way of doing this is via air gap, using a live OS like Chromium on a USB stick, and the process should not take very long, although it does involve a bit of BIOS tinkering (i.e. changing the boot sequence).

ledger-wallet-nano-review-backup-sheet

In addition to the 24-word recovery phrase, the neatly arranged recovery sheet also includes the security card recovery QR code, which can be used to create a new copy of the second-factor security card in case of loss or theft. If you punch in the wrong PIN three times in a row, the wallet will reset itself to factory condition. This is also the easiest way of wiping the device in case you want to sell or gift it.

Using the wallet

ledger-wallet-nano-review-insert

Once the installation is complete, the user simply needs to insert the device into a USB port and enter the PIN in order to access the wallet.

ledger-wallet-nano-review-receive

However, all transactions must be validated using the security card. The wallet will issue a challenge and the user needs to follow instructions and enter the four-character code to validate the transaction. This is done by entering the corresponding characters from the security card.

ledger-wallet-nano-review-validation-card

The wallet itself is easy to use and anyone familiar with bitcoin wallets should feel at home. The only difference is the added layer of validation with the security card. Fortunately the whole process is simple and fast – usually taking no more than 15-20 seconds per transaction.

ledger-wallet-nano-review-qr-scan

The wallet also features a QR scanner. Despite the fact that QR scanning has limited applications on desktop platforms, I used it to simulate topping up a mobile wallet and it worked fine. It could be quite a time saver in some situations.

Overall there is not much to say about the wallet – and this is a good thing – it’s more or less a regular bitcoin wallet with an added layer of authentication, which doesn’t take up a lot of time.

Pros

  • Very compact and sleek design. The Ledger can fit on any keychain, but don’t forget the security card.
  • Value for money – at €29.90 the Ledger Wallet Nano is rather cheap as far as hardware wallets go.
  • The use of a smartcard in lieu of general purpose microcontroller should boost security and reliability in the long run
  • Validation via security card does not take a lot of effort or time

Cons

  • The device must be installed on a perfectly safe computer and not every user will be keen to use the ‘air gap’ approach.
  • The security card approach has its own pros and cons. While it helps keep the cost down and allows designers to create a truly pocketable device, it also provides slightly lower levels of security than a device with a dedicated screen. However, this issue could to some extent be addressed by the upcoming companion app.
  • Can’t be used on mobile devices, support is currently limited to Chrome browser.

Alternatives

The Trezor wallet features a screen for an added level of immunity, but costs $119.

Conclusion

There is no such thing as absolute security, but the goal of hardware wallets is to make any potential attack more difficult and resource-intensive. Ledger is no exception – it is designed to render attacks impractical by raising the bar.

At €29.90, the Ledger Wallet Nano is good value for money, which means it will appeal to enthusiasts who want to hold bitcoin but don’t want to spend too much money on security, and this is what makes it special in my book. It’s not an expensive, specialised piece of hardware for the select few, it’s geared toward the everyday bitcoin user.

The device can fit on a keychain and the security card in practically any physical wallet, which makes the Ledger very practical. If you lose either component, you can still recover your wallet using your mnemonic seed. The upcoming companion mobile app should boost security and bring Ledger on a par with more expensive solutions.

Update 31-03-2015: The Ledger Wallet Nano is now available from Overstock.

Disclaimer: CoinDesk obtains hardware in order to test the claims of manufacturers and produce informed reviews. CoinDesk does not receive payment for these reviews.

This article should not be viewed as an endorsement of any of the companies or products mentioned. Please do your own extensive research before considering investing any funds.

Where to buy: Direct from Ledger or Overstock.com

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