Boost.vc Diversifies With A Push Into VR

Startup accelerator Boost.vc is diversifying its next cohort of startups, shifting its line-up of accepted startups from focusing solely on Bitcoin to include those working on virtual and augmented reality.

In a chat with TechCrunch last week, Boost.vc co-founder Adam Draper explained the accelerator’s reasoning. “We’re good at building communities around early tech sectors. We bring together investors, entrepreneurs, and builders, and by focusing investments on a category over time, we ourselves become experts in the subject, and thus more valuable to startups that might want to join.”

After two and half years investing in Bitcoin-related startups, Draper says the team decided they didn’t need to only apply those strengths to a single ecosystem. So with their next cohort, or “tribe,” of startups, the accelerator plans to accept a roughly equal number of virtual reality startup as those working to solve problems with Bitcoin.

In addition to mentorship from investors and entrepreneurs with experience in the virtual reality scene, startups that join up in the next group get free housing (for teams of 1-4 people) and $15-25,000 in capital in exchange for ~6% of their company. It’s like the living arrangement on HBO’s “Silicon Valley,” except without an investor hanging around with a bong all day.

As for the kinds of virtual reality startups the accelerator will be investing in, Draper says Boost will not be backing teams working on hardware. Instead, they’re looking for companies building a software infrastructure around the creation and consumption of experiences in virtual reality.

Draper thinks that outside of gaming, the earliest successful VR products will show up on Google’s Cardboard and Samsung’s Gear VR. And with applications like Google’s Expeditions popping up, Draper says he’s “very excited about VR and education technology.”

Source: TC

Former eBay Exec Chris Payne Is A Match For New Tinder CEO

(GNN) - After an announcement months ago that Tinder founder Sean Rad would be stepping out of the CEO role and into a more presidential position, the decision has finally been made on a new CEO for the growing dating app.

Christopher Payne, most recently head of eBay North America and formerly of Microsoft and Amazon, will be taking over as CEO.

“I’ve been looking for a partner for a long time now,” said Rad. “There are a bunch of things that I’m incredibly good at, and there’s a lot of things that I want to defer to someone else. I’m focused on product and marketing. Chris respects product as the center of everything, but his experience will be instrumental in dealing with operations and helping us rapidly scale.”

Rad will continue on as a board member, cofounder, and as Tinder president. Operationally, Rad will report to Payne as CEO, while still having a strategic voice as member of the board, alongside Matt Cohler, Sam Yagan and Greg Blatt.

Payne will take over operations of the company, while Rad will lead product and marketing.

“I’m so impressed with what Sean and the team have built,” said Payne. “I’ve been in tech for 24 years and I think Tinder is the single most exciting innovation in social, mobile, and local all rolled into one. I’ve spent my career at companies that are aspiring to change the world through software, and that’s what Tinder really is.”

The leadership changes, enforced by IAC, were the source of some discord when they were first made clear to Rad in November. Sources told Forbes that Rad’s removal from the CEO role boiled down to a sexual harassment lawsuit filed by Tinder marketing exec Whitney Wolfe that led to the ousting of co-founder Justin Mateen and was later settled out of court.

With optics damaged by the lawsuit, publicly traded IAC (which owns a controlling stake in Tinder) likely felt that a seasoned executive, with experience at publicly traded companies, might be a safer bet than Rad in a CEO role.

That said, the job doesn’t come without a fair amount of scrutiny. But Payne says he’s ready.

“I’ve made my career out of taking big jobs,” said Payne. “This is what I sought out because I want this type of impact, and I’m honored to lead something as special as Tinder. It’s a phenomenal opportunity and job and I feel that I’m prepared for it.”

Payne started his career out at Amazon, where he built out the Electronics and DVD departments under Bezos. He then shifted his services to MSN Search at Microsoft, with much of what he built carrying over into the Bing era. Payne then moved on to eBay after his startup Positronics (which dealt with machine learning and big data) was acquired by the online e-commerce giant. Re/Code reports that Payne was in the running for the CEO position at PayPal before joining Tinder.

Tinder recently launched a premium tier of the service called Tinder Plus, which introduces features like Rewind (letting users go back on their last left swipe) and Passport (letting users search for matches in any location). Tinder Plus is priced based on age, with users under 30 paying around $10/month, and users over 30 paying around $20/month, depending on geography.

Beyond that, Tinder Plus also introduced a new right swipe limiter, which the company says is meant to encourage better behavior among users who endlessly swipe right without even looking at their matches, just to see who liked them back. It also fights bots and other misuses of the app, but is more aimed at “maintaining the value of a match,” Rad said in an interview last week.

Why Greece Should Not Switch To Bitcoin

(GNN) - Editor’s note: Wences Casares is the founder and CEO of Xapo.

In some discussions about Greece exiting the euro, it has been suggested that Greece should swap the euro for bitcoin. At first glance, bitcoin may appear to be the cure. But if the euro is the problem, switching to Bitcoin would be like trying to cure a headache with a bullet to the brain.

The main problem with the euro is that Greece cannot print more of it; only the European Central Bank can. But at least someone can. In theory, Greece could persuade the European Central Bank to print more euros for them. On the other hand, if Greece were to switch to bitcoin, it would have no ability to control how much of their currency they could issue, and no one could be persuaded to issue more bitcoins (not the European Central Bank, not the U.S. Federal Reserve, not the U.S. Marines, no one).

A defining characteristic of bitcoin is that its supply is fixed and capped. There are 13,882,100 bitcoins today, there will be 20,343,750 bitcoins on January 1, 2025, and there will never be more than 21,000,000 bitcoins.

There are about 10 million people who own bitcoins. If bitcoin is successful, we can expect 1 or 2 billion people to own bitcoins sometime in the next 20 years. The only way 1 or 2 billion people can have 21 million coins is by the price of bitcoin increasing (significantly). An economist would call bitcoin a “deflationary currency.”

Yanis Varoufakis, Greece’s new Finance Minister, agrees that because it is deflationary, bitcoin would be bad for Greece. But he goes on to say that bitcoin is a flawed currency because it is deflationary. This misses the point. Bitcoin is not a currency for a government; it is a global currency for the people. People will generally prefer a currency that goes up in value over time (which is called a deflationary currency, like bitcoin) over one that loses value over time (like all country currencies, which are called inflationary).

It is a bad idea for Greece (or any other country) to renounce their currency and adopt bitcoin. It is akin to adopting gold as a national currency and giving up monetary policy. Monetary policy, used responsibly, has been a step forward for public finances and prosperity. Monetary policy, however, has also been abused by governments that choose to print too much currency.

This has created inflation and devastated the finances of the poorest people in these countries. These people have had no choice but to hold on to their national currency as it loses value, in many cases losing everything.

Bitcoin gives people everywhere an alternative. Anyone with a smartphone can hold bitcoins as a refuge from a currency that is losing value. This sends a message to their governments: “Let’s have our own currency, but manage it responsibly, because now we have a choice.”

If bitcoin is successful, it will not replace any country’s local currency, not even Greece. Bitcoin is poised to become not the currency of any particular country but the global, digital currency of the Internet, by the people and for the people.

The Bitcoin-Litecoin Decoupling, Redux

#GNN Tech - The price of litecoin and bitcoin, two of the most prominent cryptocurrencies, once saw their prices go up and down in something approaching a consistent ratio.

That’s to say that bitcoin was always worth far more than litecoin, but the two coins saw their value rise and fall roughly in step with each other.

In June, that started to fall apart. Noting the decoupling, TechCrunch threw together the following chart, which superimposed their prices and market caps — in USD, data via CoinMarketCap — over time:

The trend isn’t hard to spot, is it?

Let’s talk about the last few weeks. It’s been tough for the “alts,” or the cryptocurrencies that are not bitcoin. Prices are down nearly across the board.

Litecoin, which traded north of $48 inside of the past year, now sells for less than $4.

Bitcoin itself has seen a new negative trend emerge in its price as well, as TechCrunch noted in a recent post.

Our prior data source changed how it charts data, so using CyrptoCoinCharts, here’s a somewhat similar chart showing the decoupling trend continuing:

Bitcoin, being the larger, better known of the two, has seen its price endure the downswing perhaps a bit better than its smaller cousin.

What I think is evident is that whatever short-term luster that litecoin might have once had, is gone.

IMAGE BY JASON BENJAMIN UNDER PUBLIC DOMAIN LICENSE (IMAGE HAS BEEN MODIFIED)

When Payment Processing Becomes A Commodity

#GNN - #Editor’s note: Christoffer O. Hernæs is partner at Core Group, a Norwegian management consulting company. Christoffer is currently engaged by Sparebank1, one of Norway’s largest financial institutions; this analysis is based on public sources and is not connected to any client engagements.

One of the big subjects of discussion in the banking industry earlier this year was the publication of the Millennial Disruption Index, stating that millennials view banks as irrelevant and placing traditional retail banking at the highest risk of disruption compared to other B2C industries. Accenture’s Banking 2020 report confirms this and draws a parallel to the challenges the telecom industry faced 20 years ago and states that non-banks will take a third of incumbent banks revenues by 2020.

With the rise of mobile wallets, peer-to-peer payment, micro lending and various personal finance tools, the banking industry faces a new breed of competitors from the technology industry. Notable examples include eBay which has been in the payment space for a long time with PayPal, and is now strengthening its foothold in mobile payment by integrating Apples fingerprint reader into PayPal.

Google has tried entering the payment space with the discontinued Google Checkout and Google Wallet. Amazon is targeting the mobile payment space through acquisition of GoPago, as well as challenging Square with a planned launch of a similar payment processing solution. Facebook, on the other hand, is targeting the $500+ billion global remittance market.

The common denominator for the challengers is that the majority of the companies are targeting the payment processing space. Both Bank of America and Capital One say not to worry, since this is old news and it only disrupts the peripherals of the banking value chain. But the real implication as with any form of value chain disruption is the probability of payment processing becoming a commodity.

A catalyst for a commoditization of payment processing is the introduction of cryptocurrencies and new payment protocols like bitcoin and Ripple, which renders clearing obsolete and dramatically lowers the transaction cost for merchants. As a comparison, the transaction cost for payments through Visa/Mastercard/PayPal is ranging between 3-5 percent depending on the transaction size. The transaction cost for bitcoin on the other side is as low as 1 percent with continuing efforts to reduce transaction fees from the bitcoin community.

To accelerate the development Bitpay recently announced removed the transaction fees on the starter plan, offering free unlimited payment processing to merchants accepting BitCoin. With eBay considering integrating bitcoin into PayPal and Apple reentering bitcoin wallets like Blockchain into the App Store cryptocurrencies as a default payment method becomes an alluring option for profit-seeking merchants looking for cost effective solutions. This places the challengers in a sweet spot somewhere between the banking and the retail industries through digital wallets and disruptive payment platforms.

A commoditization of payment processing will require new business models where cash no longer is king, but analysis of the information gathered through transactions is the new competitive advantage in the digital payment processing space. Ovum’s report, “Loyalty and Location Based Payment Services” predicts that loyalty and analytics is the primary growth driver for mobile payments. It states that this will require new partnerships between payment providers, merchants and third-party analytics vendors like Oracle and IBM, where the latter already has entered a partnership with Monitise in order to deliver cloud-based mobile solutions for the financial services industry.

Starbucks is one example of the business potential in combining loyalty programs and payments and reports that mobile payments stands for over 15 percent of U.S. sales from the third quarter, and is considering selling its software to other merchants.

These changes to combined with increasing sector complexity due to industry convergence, capital requirement regulations, industry consolidation and diminishing ROE (Return of Equity) compared to before the financial crisis poses great challenges for banks in the years to come and creates a perfect storm seemingly favoring new entrants and the technology industry’s inherent ability to experiment and willingness to try and fail.

Despite an entrepreneurial spirit and independence from antiquated legacy systems, barriers to entry are rising. Glen Fossella states in an interview with American Banker that regulatory complexity and compliance demands will become such a growing burden for new entrants, that it is both faster and cheaper for incumbents to acquire or partner with startups. Square learned this the hard way and was fined $507,000 in Florida for operating without a license. He also advises banks to invest in startups, acquire and hire entrepreneurs or hire talent from technology companies.

The leading example when it comes to preparing for the rise of digital payments is Visa. Visa CEO Charles W. Scharf stated that the leading payment network is counting on new digital services to power future growth, although Visa presented an 11 percent rise in third-quarter earnings from global payments. One of these initiatives is the creation of Visa Digital Solutions with a wide array of offerings.

This includes the launch of Visa Checkout, the successor to V.me, Visa Cloud Payment Solutions and, more exciting, the tokenization service that substitutes traditional credit card numbers with a digital token. Visa also opens up for collaboration with developers and technology companies with these new services. In addition Visa revealed an investment in LoopPay, a mobile payments solution accepted at the majority of point-of-sale terminals.

Through these initiatives, Visa sets a leading example for incumbents in the payment ecosystem by showing a try-and-fail mentality, as well as long-term commitment through repeated mobile wallet initiatives, willingness to invest in promising startups as well as collaborating with partners to encourage open innovation. Banks and financial institutions should view Visa as a leading example in order to secure a position in the digital payment ecosystem.

And let’s face it. A bank will never be viewed as cool for the millennial generation. But banks represent safety for the consumer, and it is possible to make banking somewhat less boring through adapting new technology and acquiring new innovations.

IMAGE BY SHUTTERSTOCK USER PETR KOPKA (IMAGE HAS BEEN MODIFIED)

Wikipedia Picks Up $140,000 In #Bitcoin #Donations In One Week

#GNN - In late July, #Wikipedia announced that it would accept donations in bitcoin. In its first week of accepting bitcoin, Wikipedia racked up $140,000 in new funds, according to Coinbase, the service that powers its cryptocurrency influx.

CoinDesk, a publication that tracks bitcoin and other alternative, digital currencies heralds the news as suggesting “the staying power of digital currency donations, owing to the combination of tax benefits and transaction cost savings.” I’m slightly more skeptical, but it is without doubt that the donations are welcome at Wikipedia.

As TechCrunch previously reported, the Wikimedia Foundation — parent to Wikipedia — doesn’t intend to hold bitcoin, but instead convert it to dollars at the time of donation. TechCrunch also noted that the Foundation raised $18.7 million last year, making this $140,000 less than one percent of its prior haul. But one percent in a week could add up to a tidy figure, provided bitcoin donations continue.

Coinbase doesn’t charge non-profits transaction fees.

Recently, bitcoin has faded from the news media as the price of the stuff has settled into a predictable range, and volume isn’t growing. So, there hasn’t been too much to talk about.

What should we expect regarding donations to Wikipedia? That they slow down. How do we know? Bitcoin sales at Overstock.com slowed after an initial burst. Still, bitcoin donations to Wikipedia could make a material difference to its parent group.

IMAGE BY JASON BENJAMIN UNDER PUBLIC DOMAIN LICENSE (IMAGE HAS BEEN MODIFIED)

New York To Bitcoin Startups: Get Permission Or Get Out

Editor’s note: Elizabeth Stark taught technology policy at Stanford and Yale and was a key organizer of the movement against SOPA. She is the founder of Threshold, a company building new ways to fund open innovation. Ryan Singer is an active entrepreneur in the bitcoin ecosystem. Ryan co-founded Tradehill, an institutional bitcoin exchange, and CryptoCorp, a security service for Bitcoin Wallets and applications.

 Bitcoin allows people to build financial technology without asking for permission, but if New York state has its way, this won’t be the case for long.

The New York Department of Financial Services released a series of proposed regulations last week that could shut down the digital currency startup ecosystem as we know it. Deemed “BitLicense,” it may help “Big Bitcoin” go legit, but not the small startups of a few guys and girls in a garage. If only companies that have already raised tens of millions of dollars in funding can succeed, we can say goodbye to the bitcoin startup ecosystem. In effect, New York’s proposed regulations will throw the baby out with the bathwater.

Regulations meant to deal with situations like the Mt.Gox disaster are being applied in a dangerously far-reaching manner across the entire virtual currency ecosystem. Ben Lawsky, the NY State Superintendent of Financial Services who released the proposed regulations, is trying to do the right thing by engaging with the Reddit community and others in the space, but the rules he has proposed are so broad as to potentially force an entire startup industry out of NY state. While we understand his desire to balance innovation with consumer protection, his current proposal does not accomplish that goal. If passed in its current form, it will only allow the regulators to accumulate even more power while stifling an entire industry.

So what exactly do the BitLicense regulations cover? Here are some of our (least) favorite things that they would require small startups to do:

Submit fingerprints of all founders (and employees) to the FBI and disclose personal financial information of founders and officers to NY State.
Require them to hold an undetermined amount of U.S. dollar funds in bonds or trusts. Startups will not be able to predict the bonding or capitalization requirements until after they apply, making it difficult to project expenses or raise money.
Conduct expensive audits and security testing that no small startup could afford.
Hand over any untouched user assets to NY State after five years as “abandoned property.”
Worse, the regulations would require every bitcoin and virtual currency-related startup to get permission from NY state before releasing any new product or service. So yes, if I have a bitcoin technology startup and I want to start selling T-shirts, I would have to get the permission of the state of New York before doing so. And there’s a clear lack of technical understanding in the regulations: for example, they require that people dealing in bitcoin retain the physical address of any recipients of transactions. That’s like saying to an email provider, you must retain the postal address of any recipient of any email. This is just not possible with current bitcoin technology.

The BitLicense regulations wouldn’t just apply to companies, either. Under the current definition, they could encompass a technology as basic as a Reddit or Twitter tip bot, an app that allows users to send each other small amounts of a currency. They could kill open source projects and community endeavors while potentially subjecting contributors to personal criminal liability.

One of the worst parts is that they would force companies that are innovating in new technology to hold their funds in bonds and trusts when they don’t even hold other people’s money. Ethereum, Blockchain.info, Counterparty and Ripple are only a few projects building an entire new generation of financial technology. What they have in common is that they don’t actually process any financial services. They write software for users to structure their own services. Because of this, they can’t control, steal, or lose your money any more than the company that makes your web browser can. Treating a technology company or a software project like a financial services company is a clear path to kill innovation.

So in order to preserve the virtual currency startup ecosystem, we have a set of proposed changes we’d like to see enacted. There’s a lot more that needs to be changed, but these could serve as a starting point for a discussion as to how to enable startups to prosper.

First, designate a “Startup Onramp,” or a period of time during which new companies are not subject to the regulation. No small company with $20K of funding from an accelerator like Y Combinator is going to be able to afford the hundreds of thousands of dollars, or even millions, needed for compliance. This could even be based on valuation or transaction volume so as to protect small, bootstrapped startups.

Second, create an exception for de minimis amounts of virtual currency transmission, say, for transactions under $500 and accounts under $3,000, so that small companies doing small transactions could stay afloat without being saddled with massive compliance costs.

Lastly, clarify that these rules are only to cover companies that are holding users’ money in the way a bank would, such as wallet services or exchanges, and not just to anyone building technology in the space.

For those who think this is just a New York state problem, California will likely follow suit, as well as a variety of other states, so it’s critically important to get this right. Overreaching and covering the entire startup space, including companies and projects where there’s no public interest in making them register, threatens the future of bitcoin. These policies would serve to bifurcate the market into “Big Bitcoin” — companies that want to deal with NY financial institutions and can afford to comply with heavy restrictions, and the broader startup ecosystem that will have to take pains to avoid doing business with anyone in NY state. Blocking New York IP addresses could become a way of life for virtual currency startups.

BitLicense may help to legitimize bigger companies like Coinbase and SecondMarket, but if enacted, New York will chase virtual currency startups out to Silicon Valley, or out of the country altogether. If New York is serious about maintaining its position as a hub for innovation, it will have to make drastic changes to its proposed regulations. Otherwise, startups will heed its warning and GTFO of New York.

(IMAGE HAS BEEN MODIFIED)

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Mt. Gox revival threatens customer's remaining Bitcoins, says CEO

First, one of the world's largest Bitcoin exchanges went dark, then it filed for bankruptcy, suffered further hacking attacks and even faced a lawsuit. 

Now Mark Karpelès, Mt. Gox's CEO, tells the Wall Street Journal that he's liquidating what's left of the company assets to make ends meet. "As the company head, my mission was to protect customers and employees," he said in the interview, his first public appearance since Mt. Gox collapsed. "I'm deeply sorry. I'm frustrated with myself." A court-appointed trustee now holds all of the exchange's remaining funds and assets, and is preparing to auction off domain names owned by the companies to help repay creditors and keep Tibanne -- Karpelès' other business -- alive. This includes selling bitcoins.com and akb.com. Karpelès didn't say if mtgox.com itself would be up for sale, but he is worried about its future.

Multiple parties are interested in taking over Mt. Gox and rehabilitating the service, Karpelès says, but he's worried these organizations might cannibalize customer's surviving funds to revive it. "Remaining customer money should not be touched," he told the Wall Street Journal, referring to the 200,000 Bitcoins (about $117 million) that were found in an old wallet earlier this year. Karpelès himself is keeping his distance from Bitcoin for now, but he says he wants to return to the community one day so he can tell others to learn from his mistakes. "My experience would be valuable to them, especially if they are thinking of starting up a Bitcoin business. I can tell them what they should do and shouldn't." Check out the full piece at the source link below. (VIA: CoinDesk SOURCE: Wall Street Journal)