From Shutter Island (last week) to Bitcoin Island today. Bitcoin is second nature at this quirky tiny self-governed land called the Isle of Man. Find out why, not to mention why Visa is backing the blockchain, how bitcoin blackmail is an increasing threat to banks, and how a new Visa-branded virtual debit card wants to make it easier to cash in those bitcoins for dollars, pounds and Euros at thousands of merchants in this week’s Bitcoin Tracker.
Last week in PYMNTS’ Bitcoin Tracker, we told the story of how the writer of the book that became the movie “Shutter Island,” Dennis Lehane, was adapting the story of Silk Road into a potential box office hit.
[pullquote] On Mann, bitcoin has become a popular currency for many businesses, many of which are of course small businesses and locally owned. [/pullquote]
This week, we’re traveling to a little place called the Isle of Man, which has landed its place in the mainstream media headlines this week for being known as “Bitcoin Island.” To us, this sounds like the next Leonardo DiCaprio flick.
The story of this strange little island shows why bitcoin is, and always will be, viewed as a little quirky with popularity popping up in a variety of unconventional places. A Bloomberg narrative on the Isle of Man, commonly known as Mann, provides colorful details on the odd 221 square-mile island that’s just a short flight from London.
Like the fact that it has four-horned sheep and its native cat species don’t have tails.
Sounds like bitcoin fits in perfectly.
This island is self-governing (but dependent on the British government), which shows another reason why bitcoin might have a better time breaking in there.
[pullquote] We have a balance between the importance of regulation and being open for business. [/pullquote]
On Mann, bitcoin has become a popular currency for many businesses, many of which are of course small businesses and locally owned. The Manx government (how they describe themselves) now would like this tiny island to become a financial tech hub where VCs pump in money to advance the cause of bitcoin and the blockchain.
In fact, there are already 25 or so digital currency-based startups that use blockchain tech. And that’s just the tip of the iceberg. But the government is already working to keep up with tracking the companies via a register — which will, of course, be stored on the blockchain.
And, that makes it the first government in the world to use the blockchain to store data, Nick Williamson — an American bitcoin backer who moved to Mann — told Bloomberg.
“It just demonstrates our bona fides,” Brian Donegan told Bloomberg in that same story. He’s one government official working with the digital currency plans with the blockchain data pilot for Mann‘s Department of Economic Development.
“But it also signals that we have a balance between the importance of regulation and being open for business,” he added.
That’s, in one sense, the beauty of this little self-governing island. If they want to see how they blockchain can be used to innovate financial, or government systems, they just do it. They don’t hire consultants and draft documents about how they should discuss innovation in the blockchain. They just dive right into testing.
And, of course, they’re aware of the criminal nature of bitcoin and how money laundering is a go-to reason that attracts criminals to the digital currency. But because the cryptocurrency exchanges must register, they are held accountable for their actions.
“To keep crime out and protect the consumer is our absolute priority,” Donegan said.
That same sentiment was echoed by Charlie Woolnough, who helped establish CoinCorner, a bitcoin exchange, on Mann last year. He also formed the Manx Digital Currency Association. He agrees that having “an intelligent regulatory regime” is the only path to take in order for bitcoin to get mainstream consumers, businesses and government agencies on board.
“Otherwise, bitcoin could become just the plaything of the dark Web,” he noted.
And then of course there’s the economic perk for Mann, which has seen continual economic growth. And the natives on the island tend to agree that looking toward innovative ways to move and exchange money is one manner in which consumers and governments can shield themselves from economic woes — like Greece’s Debt Crisis.
[pullquote] To keep crime out and protect the consumer is our absolute priority. [/pullquote]
“It’s a global currency that can’t be manipulated by any government, [it] can’t be devalued on a whim,” Isle native Adrian Forbes told Bloomberg. “You have these debt crises going on; these things couldn’t happen if everyone used bitcoin.”
And now you know why a growing number of bitcoin and blockchain startups have found home in the little, strange place called the Isle of Man.
[bctt tweet=”Bitcoin is a global currency that can’t be manipulated by any government, it can’t be devalued on a whim.”]
Love ’em? Hate ’em? Wall Street can’t seem to make up its mind about bitcoin, virtual currencies and the blockchain.
But one blockchain-based startup just got some major support from some major big names in the financial sector and Wall Street. And one of those big names is Visa. Visa, NASDAQ, Citi Ventures, Capital One, Fiserv and Orange SA agreed to invest $30 million in Chain, a San Francisco-based provider of blockchain technology solutions to financial institutions. Chain works with banks and financial institutions to determine how the blockchain technology can be harnessed in a way that can make it faster and easier to trade and transfer financial assets.
Chain’s newest partners will also be involved in helping create a Blockchain Working Group in an effort to explore the technology and test it in various markets in order to determine how the technology should be approached.
“Technology relationships and investments, such as Chain, allow Visa to evaluate new technology that has the potential to deliver new payment innovation and support clients’ needs. Chain has built a platform that makes rapid prototyping easier, and the company is focused on finding practical enterprise applications of blockchain technology — a goal that we share in our evaluation of the technology,” Jim McCarthy, executive VP of innovation and strategic partnerships at Visa, told PYMNTS.
Bitcoin has made waves in the financial services markets in seemingly countless ways. Once a cryptic mode of payment for cybercriminals and black market deals, the virtual currency is now catching on as a legitimate way to ease payments friction, whether it be through faster settlement times or through easier cross-border transactions.
Now, one major bank wants to take advantage of the blockchain for its own virtual currency of sorts.
Swiss banking giant UBS is working on a virtual currency for other banks and financial institutions to more seamlessly settle transactions within the mainstream market. Market players will likely immediately think of bitcoin in response to UBS’ prototype, a so-called “utility settlement coin.” “But unlike the bitcoin digital currency,” reports said, “the Swiss bank’s proposed ‘utility settlement coin’ would be linked to real-world currencies and central bank accounts.”
The concept of bitcoin ransom —a criminal trend described as the “modern day version of a mob shakedown” — is hardly new, but an elusive cybercriminal group is on an extortion spree and raking in bitcoin payments along the way.
The bitcoin extortionist group DD4BC, which stands for DDoS for Bitcoin, uses the threat of distributed denial of service attacks (DDoS) to blackmail financial institutions into paying big bitcoin ransoms and as Bloomberg reported Sept. 9, the group is now ramping up its activity.
Over the last few months, DD4BC has joined the growing trend of hackers using DDoS attacks to shake down big banks, threatening to render a financial institution’s website useless by jamming the site with traffic if they don’t pay up in bitcoin.
According to the latest research published by Akamai, the group has launched nearly 150 attacks, with 58 percent of those directed at financial service companies such as banks, brokerages and automated clearing houses located throughout Europe, Australia and the U.S.
E-Coin wants to make it easier for consumers to convert bitcoin in dollars, euros and pounds.
That’s why E-Coin rolled out a Visa-branded virtual debit card that’s accepted anywhere Visa cards are accepted. This means that anyone who creates an online account can receive a virtual Visa card number to be used to spent that bitcoin online at thousands of merchants. And with its multi-signature wallet that’s used to store those bitcoins, it provides more peace of mind that that money is safe.
E-Coin virtual debit cards also are said to work with PayPal, and have plans to eventually work with Apple Pay.
“E-Coin is dedicated to the widespread adoption of bitcoin and wants to make things as easy as possible for potential users. Ultimately, we believe that the blockchain and the current financial infrastructure should be merged,” E-Coin representative Dmitry Lazarichev told Bitcoin Magazine.
In a time when payments companies are trying to get consumers to ditch wallets for digital wallets, there’s one bitcoin hardware company trying to get consumers to ditch their wallets for a bitcoin wallet. And it’s got the backing to do so.
Case has raised another $1 million in seed funding, which brings its total funding raised to $2.25 million. The company is seeking more funding to help entice consumers and bitcoin/blockchain firms to embrace Case’s mission of providing a physical bitcoin wallet.
“Bitcoin and other distributed ledger technologies facilitate the transfer of digital financial assets within cryptographically secured, immutable environments. Case acts as a secure signing device that streamlines this process without increasing the risk of compromising sensitive data,” Case CEO Melanie Shapiro told CoinDesk.
For a moment this week it seemed bitcoin’s mini price rally was giving it the much needed boost — hitting $246 just about three days ago (Sept. 8). While bitcoin had held steady about the mid-250s for much of the year, even pushing above $300, it seems those days are just a distant memory now.
As of yesterday afternoon (Sept. 10), bitcoin’s price was hovering around $239, but there’s no telling what it will do in the next few days. But once again, bitcoin has showed its price volatility — giving bitcoin skeptics another week to back their case against the merit of the virtual currency.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More