May 11, 2015- In This Issue:

   

Nasdaq Looks To Track Shares Using Bitcoin Technology

Wall Street might scoff at bitcoin as a currency, but it's very interested in the technology underpinning it. 

 

In fact, Nasdaq is launching a pilot program to see if bitcoin-derived technology might help it track shares in private companies, the Wall Street Journal reported on Monday. 

 

This doesn't mean you should run out and convert your savings into cryptocurrency; Nasdaq is more interested in bitcoin's underlying ledger, the blockchain, than in any form of virtual money. 

 

While bitcoin is a money substitute, what makes it work is a giant distributed ledger called the blockchain. Basically, using cryptography, some computers in the bitcoin network -- called miners -- keep track of everyone's bitcoins. It's this aspect of the protocol that Nasdaq is exploring. 

 

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Price of Bitcoin Creeps Up on Wave of Major Developments

A rapid-fire string of good news over the past week has help nudge up the price of Bitcoin.

 

A week ago the Bitcoin price was hovering around $225, which is somewhat disappointing since just six weeks earlier it was threatening to break through the $300 level.

 

But then we started to get some major positive Bitcoin news. Over the past few days, the Bitcoin price is up about 7%, trading in the neighborhood of $240.

 

The price of Bitcoin hit a 15-month low of $177 in January and has been fighting to rebound ever since.

 

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BitBeat: ItBit Open Shop In U.S. As a Trust Company, Raises $25 Million

The 18-month old startup announced that it has received a trust company charter from  the New York State Department of Financial Services that will allow it to operate in all 50 states as a fully regulated financial-services entity.

 

That was only one of the things the company announced. ItBit also closed on a $25 million funding round, bringing its total capital raising to $32 million, and named several notable people to its board of directors, including former FDIC chairman Sheila Bair and former U.S. Senator Bill Bradley.

 

Taken collectively, the moves signal the start-up's intentions to be a mainstream commercial business, and a mainstream option for investors in the capital markets. It's also the latest in a series of moves that are meshing together the worlds of bitcoin and Wall Street.

 

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Fold Brings Bitcoin to Hong Kong Starbucks Branches

One of the most popular brands in the world is Starbucks. Regardless of whether you like or dislike coffee, most of us have visited a Starbucks shop on more than one occasion. Popular brands such as Starbucks could push Bitcoin adoption to a whole new level.

 

However, Starbucks has never openly declared that it would start accepting Bitcoin payments, even though they would save a lot of costs compared to processing traditional payment methods. Regardless of Starbucks' official stance on Bitcoin, though, Fold will now allow Starbucks customers to pay for their goods with Bitcoin.

 

Fold allows anyone in the world to spend Bitcoin on everyday goods, as long as the store uses the Fold app themselves. Fold has not officially launched just yet, and has only been tested in locations that accept the US Dollar, making Starbucks a most interesting use case in that regard.

 

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German Central Bank Economist Expects EU to Fund Digital Currency Research

Startup Europe organized a "Blockchain and Digital Currencies Workshop" on April 27. Digital Currency Summit founder Alex Puig led the event, with the participation of Bitcoin companies and senior financial experts.

Each European Union (EU) country regards Bitcoin differently, and regulations are constantly evolving. The Startup Europe initiative seems a first step to establish EU-wide coordination of national initiatives for Bitcoin regulation and government-funded research.

Startup Europe aims to strengthen the business environment for web and ICT entrepreneurs so that their ideas and business can start and grow in the EU. Startup Europe is part of Digital Agenda for Europe (DAE), an initiative of the European Commission, and contributes to the Entrepreneurship 2020 Action Plan.

Puig opened the workshop and outlined the possibilities opened up by digital currencies based on blockchain technology, including micropayments, crowdfunding, distributed exchanges, smart property, property registry, ticketing, secure voting systems and more.

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Bitcoin: Currency vs Transaction Tool

 

Fanatics have generally responded to the question of Bitcoin's future by envisioning a world where Bitcoin plays the main role in the global financial system. Bitcoin will be the currency, the primary unit of account and store of value. Everyone will walk around with a Bitcoin wallet on their phones or a Bitcoin debit card in their back pockets. There will be no more central banking or fiat currency.

More moderate observers have argued that Bitcoin cannot realistically be used as an independent currency. Instead, the Bitcoin blockchain can be effectively utilized as a tool for lowering transactional friction. A bank in the United States can convert $100 to Bitcoin, send it over the blockchain to a bank in England, which can convert that Bitcoin to Pounds. This transaction would take days or weeks if done through a traditional wire transfer, with fees eating away a large portion of the $100. With Bitcoin, however, the money will show up instantly, and be confirmed by the network in a matter of minutes, with little to no fees.

On the surface, this debate makes it appear as if Bitcoin's future is approaching a crossroads: will it be an independent currency or an intermediary for currency exchanges? However, if we look a little deeper, we will see that it would be extremely difficult for the moderates' vision to materialize. Bitcoin's use as a transaction intermediary will not be able to supplant its use as a currency because the former relies on the existence of an exchange rate between Bitcoin and fiat currencies.

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