Bitcoin Weekly 2016 February 24: Butterfly Labs FTC slap on the wrist, Ledger segwit approval, Bitcoin Core 0.12

After really messing up the lives of potential customers and finally losing a fraud case to the United States Federal Trade Commission, Butterfly Labs receives a “slap on the wrist” of pennies on the dollar fines compared to the original settlement. Talk of segregated witness has reached the ears of Ledger hardware wallet, one part of the Bitcoin industry which will benefit hugely from this proposal.

This week Bitcoin Core version 0.12.0 announced this most recent release alongside a large number of new features and improvements including Tor hidden services connectivity (and other interesting additions).

Sony is working on education-centric use of blockchain technology that powers apps for PC, Mac, smartphones and tablets designed to make math fun and interesting.

Today the Bitcoin market value sits around $426 ( and for the past week the market price has seen one upwards fluctuation. Market price started out the week around $420, jumped up to $440, and then fell once again back to the $420 range. The overall trend appears to be up from early February, starting around $380 and then rose significantly towards the now-end of the month.

Butterfly Labs owes more than $38.6 million to FTC over scam charges, but cannot pay

Bitcoin mining machine manufacturer Butterfly Labs, Inc. may owe the Federal Trade Commission $38.6 million in damages stemming from an investigation to fraudulent business practices by the company, but the company cannot pay. The result is a “slap on the wrist,” according to SiliconANGLE’s Duncan Riley reporting on the outcome of the case.

The court case took place in September 2014 when the FTC made claim that ASIC Bitcoin mining rigs built by Butterfly Labs were second hand or not delivered on time.

However, due to apparent insolvency within the Butterfly Labs company—leading to an inability to pay up the $38.6 million settlement due—led to a new agreement where Butterfly Labs would have the larger sum suspended if the company pays $15,000 and co-founder Sonny Vleisides pays $4,000.

The company’s General Manager Darla Drake, was fined $135,878; however, that also was suspended on terms that she surrenders the cash value of all bitcoins obtained using company machines.

“Even in the fast-moving world of virtual currencies like Bitcoin, companies can’t deceive people about their products,” FTC’s Bureau of Consumer Protection Director Jessica Rich said in a statement. “These settlements will prevent the defendants from misleading consumers.”

Butterfly Labs, Vleisides and Drake are also prohibited from misrepresenting when products or services will ship to consumers, if a product can be used to produce bitcoins and whether or not a product is new or used.

Why the FTC chose to balk in the face of absolute victory seems strange to Riley, who also reported on the history of Butterfly Labs and the terrible customer service—besides failing to ship on time, the company also mocked customers angry about late shipments.

Sony Global Education is releasing mutli-platform math education quiz and education apps designed to inspire the next generation of students.

Sony Global Education is releasing mutli-platform math education quiz and education apps designed to inspire the next generation of students.

Sony starts developing blockchain technology for education

Sony Corporation announced this week a new initiative to advance blockchain technology for education with a subsidiary called Sony Global Education. The company intends to develop a new, widely applicable educational infrastructure platform to influence and inspire students in STEM (science, technology, engineering and mathematics) fields.

To begin this initiative, Sony has begun working on a project that permits easy sharing of secure documents using auditable, encrypted communication to enable the sharing of academic records between trusted parties.

“Recent developments in technology have given us the opportunity to embrace educational opportunities almost anywhere in the world,” said Sony Global Education, Inc. President Masaaki Isozu. ”Even so, it is still not easy to fulfil the demands that arise from such a diverse range of people.”

To do this, Sony has announced partnerships with the Global STEM Alliance of the New York Academy of Sciences in the United Sates, the Beijing Gifted Talented Education Technology Centre in China and the Japan Prime Math Olympic Committee in Japan.

The two services provided currently by Sony Global Education include the Global Math Challenge (GMC), an online contest for math lovers wordwide, and MathNative, a cross-curricular app for young students designed to help stimulate curiosity and take the perceived challenging stigma out of learning math. Both GMC and MathNative are available for PC and Mac, as well as smartphones and tablets.

Ledger hardware wallet throws in with Segregated Witness

Segregated Witness, or segwit, is a proposition for a soft-fork of the Bitcoin blockchain that would separate the way that transaction signatures are stored on the blockchain. Hardware wallet maker, Ledger SAS has released a beta version of its Leger Wallet Nano that supports the modification to the blockchain and reports that it will do good things for hardware wallets in general.

As a proposal, segwit would lighten the load for bitcoin wallets (and nodes) by separating the signature from the transaction information. In this fashion multiple signatories cannot cause the transaction ID to change by modifying the signature after the transaction occurs (this effect is known as transaction ID malleability). Separating the cryptographic signatures from the transactions also allows for smaller transactions, which means more can be packed into current blockchain blocks.

CEO of wallet company Ciphrex Corp., Eric Lombrozo, explained what segwit is and its benefits in a video attached to a previous Bitcoin Weekly (scroll to the last headline).

Ledger agrees with Lombrozo on this and believe that it will solve several major performance issues.

photo credit: Bitcoin IMG_1924 via photopin (license)

photo credit: Bitcoin IMG_1924 via photopin (license)

Bitcoin Core 0.12.0 released

Bitcoin Core version 0.12.0 is now officially available and this is a major release with new features and other improvements.

Notable changes including signature validation using libsecp256k1 as a library instead of OpenSSL (which had been previously implicated in the now fixed Heartbleed bug). The signature library change should provide a significant boost to validation speed, for example x86_64 architectures could see five times faster speeds. The updates also include a reduction in total upload traffic by allowing operators to set “-maxuploadtarget” as a parameter; while it does not act as a hard limit, it would act as a threshold to minimize outbound traffic.

Using the anonymizing network Tor’s control socket API (available in Tor version and above) it is possible for Bitcoin Core to now use Tor hidden services.

Improvements to how the wallet calculates transaction fees now allow users to set predefined fees with “paytxfee=n” or use “n=0” to use floating fees. By default Bitcoin Core will use floating fees.

Version 0.12 also includes a pruning-mode capability; this will allow wallets to cut disk usage to 2 GB from what is currently around 60 GB. For further details about pruning, see the release notes for version 0.11.0.

Photo: Dawson/Bloomberg News
  • About
  • Latest Posts
Kyt Dotson
Kyt Dotson


Join our mailing list to receive the latest news and updates from our team.


Join our mailing list to receive the latest news and updates from our team.

mm – leading Bitcoin News source since 2012

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. The information does not constitute investment advice or an offer to invest.