Bitcoin Weekly 2016 April 13: Storj beta added to Azure BaaS ecosystem, ShapeShift hacked, Kraken Series B …

Looks like blockchain is continuing to get a great deal of attention this week with Intel outlining plans for its “Sawtooth Lake” distributed ledger program and Storj beta being launched on Microsoft’s Azure Blockchain-as-a-Service platform.

In not-so-great news, Erik Voorhees’s ShapeShift cryptocurrency exchange service was hacked and is still offline pending an investigation into how it happened.

Today the Bitcoin market value is at $424.57 USD (Bitcoinaverage.com) and that’s very close to what it was last time the Bitcoin Weekly was published. During the week the price saw a dip down to $415 and it also hovered up near $427. So far the market value has maintained within the $410 to $430 band over the past month.

Intel releases plans on blockchain technology with “Sawtooth Lake”

Globally renown chipmaker company Intel Corp. has been working hard on developing distributed ledger technology (i.e. blockchain technology) and recently outlined its future plans with the “Sawtooth Lake” project.

The Sawtooth Lake project is described by Intel as a “highly modular platform for building, deploying and running distributed ledgers,” and it will be submitted to the open-source Hyperledger Project run by the Linux Foundation.

Intel included the source code for Sawtooth Lake on GitHub under “Experimental Distributed Ledger” and also published an extremely detailed support page on its use:

This project, called “Sawtooth Lake” is a highly modular platform for building, deploying and running distributed ledgers. Distributed ledgers provide a digital record (such as asset ownership) that is maintained without a central authority or implementation. Instead of a single, centralized database, participants in the ledger contribute resources to shared computation that ensures universal agreement on the state of the ledger. While Bitcoin is the most popular distributed ledger, the technology has been proposed for many different applications ranging from international remittance, insurance claim processing, supply chain management and the Internet of Things (IoT).

The data model of Sawtooth Lake acts as a transactional ledger, such as is a blockhain, and it includes a transactional language designed for adding and querying information secured on the ledger.

To start the ball rolling, Sawtooth Lake allows for three transaction families: EndPointRegistry, a transaction family for registering services; IntegerKey, a transaction family for testing deployed ledgers; and MarketPlace, a transaction family for buying, selling and trading digital assets.

These three transaction families provide a proof-of-concept model for an “out of the box” ledger that provides all the functionality needed to run a marketplace for digital assets.

Intel expects that developers will use the SDK and code for Sawtooth Lake to produce their own ledger configurations that would permit a wide variety of applications to run atop the underlying blockchain technology.

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Storj launches blockchain storage beta and joins Microsoft Azure Blockchain-as-a-Service

This week, Storj Labs Inc., developer of blockchain-based end-to-end distributed and encrypted cloud-based storage service Storj, announced that its product goes into beta and it has also been added to Microsoft Azure’s Blockchain-as-a-Service.

First up, Storj announced the services beta on April 9 at the Impact Hub in Salt Lake City, UT. The beta is currently invite-only on a first come, first served basis (signups on Storj.io’s website). It will become open to the public shortly after the initial testing phase.

As a blockchain-based technology, Storj provides a proof-of-concept for linking data objects to a blockchain so that they can be stored in a distributed manner with end-to-end encryption that is secured with transaction-fusing cryptography. The Storj project seeks to link together a community of developers to produce applications that use the blockchain-backend service to store, retrieve and modify objects stored on a blockchain ledger.

Next up, Storj also announced joining Microsoft Azure’s Blockchain-as-a-Service (BaaS) platform, which will bring its product to enterprise-level users as an API accessible via that ecosystem.

Marley Gray, ‎Director BizDev Strategy for Cloud Enterprise Blockchain at Microsoft Corp. said: “Microsoft is excited to host Storj Labs on Azure BaaS, providing our growing community of partners a fantastic distributed object storage application.”

Microsoft Azure’s BaaS platform provides a 1-click deployment mechanism for blockchain-based technologies, which allows Azure users to launch servers preconfigured with Storj libraries allowing instant access to the Storj platform.

Erik Voorhees’s ShapeShift cryptocurrency exchange requires no log in.

Erik Voorhees’s ShapeShift cryptocurrency exchange requires no log in.

Cryptocurrency exchange ShapeShift.io security breach

Earlier this week, Erik Voorhees’s registration-less cryptocurrency exchange ShapeShift AG announced that its service had been hacked. According to Duncan Riley’s coverage at SiliconANGLE, the breach occurred on April 6 and the service went offline immediately thereafter to affect repairs and determine the damage.

As of writing, the ShapeShift.io website is still offline.

Immediately after the initial breach, on April 7, CEO Erik Voorhees went to Reddit to address customers and the public:

Yesterday afternoon, we noticed several pieces of evidence indicating our server infrastructure was compromised and threatened. We made the decision to scrap that infrastructure, and rebuild in a wholly new and safe environment. This is what we are currently engaged in. While we hate having the service offline, it was the safer path.

In an update on Sunday evening, Voorhees published another update to Reddit stating that a forensic examination of the breach would be needed and one would take time. The post also added that the exchange would remain offline another 48-hours (it is almost time for another update).

Voorhees also stressed that ShapeShift’s system is safe by design, “We’ve built customer protection into our platform,” he said. “Hacks may be inevitable, but customer losses should not be. Not a cent of customer funds was lost, nor could they have been.”

Due to the way that ShapeShift works customers do not enter registration credentials when trading—there is no name, e-mail or credit card information even used to be stolen. Trades also only occur when two parties willing to make the exchange are found and ShapeShift does not hold the cryptocurrency during the exchange so customer balances were not at risk.

However, ShapeShift’s hot wallet did lose some funds during the hack. Hot wallets in this case hold immediately ready funds as both Bitcoin and cryptocurrencies in order to facilitate rapid trades.

photo credit: Bitcoin IMG_1924 via photopin (license)

photo credit: Bitcoin IMG_1924 via photopin (license)

Kraken nets further Series B funding from Money Partners Group

San Francisco-based Bitcoin exchange Kraken (Payward, Inc.) announced yet more Series B funding from Money Partners Group for an undisclosed amount. This follows a previous Series B fund from Tokyo-based SBI Investments in what was described as a “milti-million” dollar investment.

Kraken CEO Jesse Powell said, “This investment from Money Partners Group is more validation that our long-game approach to the digital asset exchange business has been the right strategy. Established players in financial services want a partner that knows what they’re doing and delivers — that’s why they choose Kraken.”

Kraken has managed to do well for itself in the Bitcoin exchange market since being founded in 2011. Most recently the exchange acquired two other exchanges–New York-based Coinsetter, Inc. and Canada-based Cavirtex—no doubt this expansion of the company’s reach into the U.S. and Canada has led further interest from investors.

Featured image credit: Dawson/Bloomberg News
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Kyt Dotson
Kyt Dotson

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