UPDATED 16:01 EDT / MARCH 12 2014

Bitcoin Weekly 2014 March 12: Newsweek ‘finds’ Satoshi Nakamoto, MtGox bankruptcy continues, Big Fish Games gets BTC, 3dcart leads more adoption

bitcoin-weeklyThe dominant news this week revolves around Satoshi Nakamoto being “found” yet again and the fallout surrounding his “discovery.” Of course, unlike every other time someone had been thought to be the founder of Bitcoin, Dorian Satoshi Nakamoto also has the same name.

MtGox continues to face a lot of heat in the community and recently won bankruptcy protection–now if only it will protect the company and its CEO from public anger and hackers. Hackers have broken into CEO Mark Karpeles’s personal blog and Reddit account to release database leaks and the hits just keep coming.

In continuing Bitcoin adoption news: Big Fish Games, casual gaming developer and publisher, has joined with Coinbase to accept bitcoins for gaming fun in the future; and 3dcart is profiled for adding bitcoin integration into their e-commerce shopping cart software.

Newsweek  reporter “found” Satoshi Nakamoto, inventor of Bitcoin

Cover of Newsweek; March 13, 2014

Cover of Newsweek; March 13, 2014

Dorian Satoshi Nakamoto, a 64-year-old physicist, found himself swimming in the spotlight recently after a Newsweek reporter published that he must be the elusive inventor of Bitcoin “Satoshi Nakamoto.” In her news piece, “The Face Behind Bitcoin”, Leah McGrath Goodman published a narrative of her discussion with Dorian Nakamoto and her contact with family members, speaking to the emergence of the cryptocurrency that she credits Nakamoto with creating.

This is not the first time Satoshi Nakamoto has been “found” by a member of the press, but it is the first time the individual cited has had the same name. In October of 2011, the New Yorker published a story suggestion a man named Michael Clear was the Batman of Cryptocurrency.

The discovery of Dorian Nakamoto and his potential connection to Bitcoin is only held together with scant apparent evidence and led to a massive controversy within the Bitcoin community. A great deal of virtual ink has been spilled on the subject, including a dissection of the discovery by SiliconANGLE’s Mark “Rizzn” Hopkins about the likelihood that Dorian Nakamoto is the Satoshi Nakamoto.

Dorian Nakamoto has repeatedly denied being the inventor of Bitcoin.

In short: We know so little about Bitcoin’s Batman that Dorian Nakamoto could be Satoshi Nakamoto. The takeaway: In the end it doesn’t matter. While much of the Bitcoin community would possibly be overjoyed who invented this amazing technology, the technology has taken on a life of its own that Satoshi’s disappearance from the nascent stages perhaps led to its revolutionary cultural power.

Due to the nature of the Internet and publishing in general, Goodman’s article contained more than enough biographical information on Nakamoto for people to easily discern his identity and wearabouts. As a result, Nakamoto has been inundated with fans of Bitcoin, both furious and reverent.

By way of apology, Andreas Antonopoulos, chief security officer for Blockchain.info, set up a bitcoin donation address for Nakamoto. To date the address has received more than 44.4 BTC (approx. $27545.44 USD) and funds continue to pour in.

All of the noise generated by the media attention on Dorian Nakamoto has brought someone claiming to be his brother to Reddit to berate reporter Leah McGrath Goodman and Newsweek.  /u/arthurnakamoto and /u/Nakamotodragon appeared recently on Reddit claiming to be Nakamoto’s brother and cousin respectively. A Twitter account has also been made in Dorian Nakamoto’s name, who’s user is not without humor—as Nakamoto’s model train enthusiast, has been tweeting at Blockchain.info about adding model trains to their stable of resources.

The backlash has also led Newsweek to publish a statement on Goodman’s piece standing behind her investigative work and the outcome.

MtGox drama continues to descend into madness

mtgox-nukedIt’s not a Bitcoin Weekly in 2014 without some sort of update about the collapse of MtGox.

Months of trouble led to the massive exchange melting down, it’s CEO leaving the Bitcoin Foundation, and finally a descent into insolvency. Now, customers of the once-great exchange are wondering what has become of their bitcoins and dollars.

Over the past week, hackers have gained access to databases related to MtGox’s internal bitcoin ledgers. A hacker or hackers gained access to MtGox CEO Mark Karpeles’s personal blog and Reddit account. The hackers used both account to post evidence—allegedly taken from MtGox’s internal ledgers—that Gox may still have access to many of the BTC said to have been lost.

Meanwhile, troubled MtGox has successfully won bankruptcy protection and Bitcoin life goes on.

The aftermath of MtGox’s demise has not led to much catastrophe in the bitcoin economy; several exchanges have risen to take its place and Coinbase has even published a statement as to the continuing health of the cryptocurrency market. Right now the broil in the community is over money lost during the debacle and damage done to its public perception.

Big Fish Games to accept Bitcoin

Big_Fish_Games_logoCasual gaming publisher Big Fish Games plans to accept bitcoins by partnering with merchant processor and web wallet Coinbase. The American-based gaming company made $266m in the past year and is a direct competitor to EA-owned Popcap Games in a market where the use of digital currency makes a great deal of sense.

“This is not a test,” said Paul Thelen, chief executive and founder of Big Fish Games speaking to The Telegraph. “We are excited to offer this new payment method to the nearly 105m annual game players that visit our game app store, with the reassurance that Big Fish is working with Coinbase, one of the most secure and reputable companies in the bitcoin industry.”

Gaming is a particularly effective landing spot for digital currency because many gaming outfits (especially in the casual arena) already model their own currencies in game. Either because they’re massively multiplayer games that mimic virtual economies at scale for the players or because of monetization via microtransaction.

In the current models, gaming companies who do microtransactions have players purchase a bulk amount of currency—this locks players in for a particular amount and while it’s good for making extra money for the gaming company, it can lead to customer dissatisfaction. Bitcoin transactions allow for smaller amounts to be used in single transactions and because they do not use credit processors can come with greatly reduced fees

Earlier this year, Facebook casual gaming publisher Zynga Games also began accepting bitcoins and in the previous year German-based multiplayer gaming outfit Bigpoint Games also started accepting BTC. As expected there is an experimental trend for casual gaming towards bitcoin acceptance and 2014 will probably only see this accelerate.

3dcart continues to lead Bitcoin adoption extends capability to 17k merchants

Casual gaming isn’t the only maket seeing a boost from bitcoin adoption, digital marketplaces has a real need for the capability of accepting cryptocurrency. Online shopping card provider 3dcart is extending the capability to accept bitcoin payments to over 17,000 merchants by partnering with BitPay.

3dcart has been in business since 1997, and have been in the game for a while, meaning that their impact in providing bitcoin integration is fairly deep. The company does everything in-house from dev, product testing, and technical support amid its 80 employees.

3dcart started taking bitcoin payments in August, 2013. Already about 2% of their merchants adopted integration with the virtual currency—during the holiday season it was definitely used for some purchases. This seems to match the current adoption rate in the current market; even companies such as Overstock.com tend to only seen 2-4% of their total revenue come from newly-adopted bitcoin integration.

According to 3dcart, bitcoin payments are trendy in the “adult novelties” industry and also especially for overseas merchants such as those in Europe. Some merchants who sell $1k to $2k clothing items also prefer taking bitcoin because there’s no chargebacks and as a result less change of fraud by the purchaser.


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