The Weekly Decrypt No. 5: February 1-5, 2016

The Weekly Decrypt No. 5: February 1-5, 2016

The Daily Decrypt is an independent member of the Let’s Talk Bitcoin network and offers daily weekday video casts to its listeners on a wide variety of cryptocurrency and blockchain technology topics.

The Daily Decrypt began the week of February 1, 2016, with an episode detailing how to use Purse.io to pay with cryptocurrency and save up to 20% on orders at Amazon. Purse.io provides a service matching people looking to spend cryptocurrency at Amazon with people looking to buy cryptocurrency by fulfilling Amazon orders with fiat.

Start by creating an Amazon wishlist containing the items you’d like to purchase. Be sure that the wishlist contains your shipping address and that the ‘Don’t spoil my surprises’ box is left unchecked. Copy the link to your wishlist and head to Purse.io and log in or sign up if you need to. You’ll see a space near the top where you may paste the link to your wishlist. After your wishlist has loaded you’ll be able to select the discount you’d like to request from potential buyers and place your order. You can pay with Bitcoin via Coinbase or with a qualified altcoin via Shapeshift. Purse.io holds your cryptocurrency in escrow until someone has bought your order and you confirm that your order has been delivered to you. Upon satisfactorily receiving your order, you complete the process by logging in to Purse.io and releasing your cryptocurrency from escrow to the buyer.

On Tuesday, host Amanda interviewed Christopher David of Arcade City. David drove for Uber for a couple of months in late 2015 in Portsmouth, New Hampshire, where the city council had passed an ordinance essentially banning services like Uber. David continued to drive despite the ordinance and subsequently found himself in some legal trouble after some instances with the local police department, earning him the title ‘illegal Uber driver’. He commenced an activist campaign called ‘Free Uber’ in an attempt to change the ordinance. He met a lot of other Uber drivers and discovered that almost all of them were more dissatisfied with how they’d been treated by Uber than with the ordinance itself.

It then struck David that perhaps he’d been granted an opportunity to do better than Uber by organizing and developing a decentralized ride service. The service began with the group offering free rides on New Year’s Eve in circumvention of the local ordinance while the software and the code were developed. This garnered David and his group a load of media attention and catapulted them into the spotlight where they began to devise a way to actually compete with Uber.

A website was built and put out the call for 100 or more drivers to join the movement before the service’s launch which is scheduled for Valentine’s Day on February 14, 2016. Over 1600 drivers have signed up to participate in the launch which will service the area surrounding Portsmouth.

The app and service is called Arcade City and upon launch will accept payments via Stripe, a service which processes both fiat and Bitcoin payments. The long-term vision for Arcade City is to integrate its app and service with the Ethereum blockchain.

The problems with Uber that Arcade City seeks to solve are largely problems of centralization. Uber was the target of criticism when they cut service rates in several cities overnight without warning, leaving many drivers with up to 40% less income than they’d been earning and depending upon.

Arcade City hopes to implement a solution where service rates are determined between the driver and the customer with two different payment modes. Peer-to-peer payment mode allows the customer and the driver to communicate directly and determine both ride details and an acceptable form of payment – whether it be cash, Bitcoin, Dogecoin, silver, or any other store of value. This mode does not require that payment take place through the app which does not take a fee. The other payment mode requires that payment is done through the app which takes just a 10% fee.

After its launch in February, Arcade City will continue to refine its app and its service to implement and tweak features such that its peer-to-peer and decentralized nature is enhanced. For more information or to get involved, you may wish to visit Arcade City on Facebook. Look for Arcade City to soon be disrupting Uber in a city near you.

Wednesday’s episode was filmed live at a press event hosted by the Free State Project where the project announced it had reached its goal set forth 13 years ago to obtain 20,000 signatures from people pledging to move to New Hampshire. Those 20,000 people now have 5 years to make arrangements to move to New Hampshire and participate in the world’s first intentional liberty community.

New Hampshire has already been dubbed the Bitcoin Capital of America. Host Amanda asked several early movers about cryptocurrency in an attempt to decipher the likelihood of New Hampshire becoming the Bitcoin Capital of the World. Most of the early movers had heard of cryptocurrency, had used it in some form and had positive things to say so the future for New Hampshire is looking bright.

Thursday’s episode detailed this week’s news that Blockstream, which is the primary financier of Bitcoin Core developers, had accepted $55 million in investment capital from several large multinational corporations just six days after announcing a strategic partnership with PriceWaterhouseCoopers.

Blockstream’s involvement in Bitcoin Core development has troubled many who would like to see Bitcoin increase its block size. Perhaps due to its financial ties to large multinational corporations, the company appears to be suppressing any movement towards an increase in the Bitcoin block size. A smaller block size provides use cases for the off-chain solutions under development at Blockstream.

It is becoming clearer each day that a smaller block size is more likely to favor governments, banks, and corporations with their proprietary off-chain solutions while a larger block size is more likely to allow Bitcoin to scale with increasing demand and remain a peer-to-peer network for and by the people.

For the final episode of the week on Friday, host Amanda was joined by Charlie from CryptoCompare.com to discuss mining cryptocurrency via contract mining and how to avoid scams in this popular sector of the cryptocurrency economy.

Contract mining is when you contract and pay someone else to operate and maintain cryptocurrency mining hardware on your behalf and share the profits. Companies operating mining hardware in this way usually sell contracts representing a share of the proceeds.

Because mining can be profitable and fun, yet difficult for those who are not tech-savvy, contract mining is a good idea and, therefore, popular. However, as is the case with most popular things involving money, there are numerous unscrupulous people out there posing as companies and running off with investors’ money and running Ponzi schemes disguised as contract mining companies. Because affiliate websites promote contract mining websites constantly without doing their own due diligence, it can be difficult for many to determine which companies are legitimate and which ones are scams.

The more information a company provides about itself and its operations via its website, the less likely it is to be a scam. Look for videos, pictures and the option to have a live video conference with a representative from the company. Charlie reports having had good experiences with contract mining companies HashFlare and HashCoins and an especially good experience with Genesis Mining.

Typically a mining contract is purchased with an upfront fee corresponding to the contract’s specified hash power and then maintained via an additional daily fee. It is important to verify that the length of a mining contract matches your profitability expectations. For example, if you’ve determined that your Litecoin mining contract will pay for itself in 9 months you’ll want to make sure that you don’t accidentally purchase a contract that is only good for 6 months. It is also a great idea to examine the fine print of any mining contract to determine whether it terminates should its daily fee ever exceed its profitability.

Once you’ve found a reputable company and perused the options for mining contracts they offer, it is imperative to keep in mind that mining profitability can fluctuate significantly due to the volatile nature of cryptocurrency markets. A mining contract determined to be profitable at the time of purchase may ultimately turn out to be costly if the price of the coin being mined crashes throughout the course of the contract. On the other hand, the contract could turn out to be wildly profitable if the value of the coin being mined increases throughout the contract. Of course, you can always hold your mined coins for as long as you wish and choose when, if ever, to sell.

Although there is indeed a bit of a learning curve associated with and some due diligence required of mining cryptocurrencies, Charlie still recommends it to those who are interested because it is fun, potentially profitable and a great way to get acquainted with the interior mechanics of a blockchain.

All episodes of The Daily Decrypt published to date can be found on their YouTube channel and weekly summaries will continue to be made available here at CORE Media.