Inside Bitcoins NYC Day 1: Bitcoin 2.0 Takes Center Stage
Tom Sharkey | Published on April 8, 2014 at 00:26 BST | Events, News
More than 2,000 digital currency enthusiasts gathered at the Javits Center in New York City on 7th April for the city’s second Inside Bitcoins conference and expo, produced by Mediabistro.
Attendees traveled to New York from more than 30 countries and 38 US states to hear speeches from industry leaders about the usual topics like the future potential and big-picture implications of bitcoin for consumers and the financial markets.
As the day progressed, though, panelists began to emphasize the opportunities of Bitcoin 2.0 and applications of the Bitcoin protocol beyond currency, and notably turned attention to the topic of governmental regulation of digital currencies.
The event kicked off with Alan Meckler, the CEO and Chairman of Mediabistro, who welcomed the crowd and noted the dramatic increase in attendance from last year’s Inside Bitcoins NYC event, which he said had just over 150 attendees.
A “buzzing” crowd
Even before Circle’s Founder and CEO Jeremy Allaire kicked off his opening keynote address – which centered on bringing bitcoin to mainstream audiences, Inside Bitcoins NYC conference programmer Stewart Quealy commented on the energy in the room, saying:
“It’s great to be in this room and feel the energy of the crowd. There’s a certain buzz in the air of everyone who is excited about the potential in this industry.”
This was evidenced by the number of startup companies who signed up as exhibitors and showcased their work in a variety of fields like mining, cloud storage and regulatory compliance consulting.
Conference attendees lined the exhibition hall during the lunch break to learn more about the diverse offerings of exhibitors, and even participated in a live bitcoin trading session hosted by the Bitcoin Center NYC.
Screen Shot 2014-04-07 at 7.29.29 PM
Diverse topics and opinions
Day one of the conference played host to a diversity of topics discussed by a wide range of industry professionals. Panels focused on issues like regulation, mainstream adoption, the startup ecosystem and security, among others.
Unsurprisingly, the variety of topics brought with them a variety of opinions and viewpoints.
More than once when questions were fielded from the audience, members of the panel made a point to speak up in opposition of their fellow panelists’ perspectives.
In a panel titled “Moving Bitcoin Forward: Bringing Trust, Legitimacy and Transparency to the Market,” moderator Michael Terpin, co-founder of BitAngels, asked for a show of hands as to which area holds the most importance for increasing the number of bitcoin users: ease of use, security, regulation, public perception or economics and liquidity?
While there were votes for each of the five areas of concern, there was a clear majority consensus that bitcoin’s ease of use is the most important factor in growing the industry; members of the panel agreed.
A maturing industry
One recurring theme across the board from Monday’s panels and keynote speeches was the notion that the digital currency industry is rapidly evolving, and that it has already come a long way since its humble beginnings in 2009.
During a panel titled “New Ideas in Bitcoin,” speakers highlighted the emerging ideas in digital currencies that expand beyond bitcoin’s use solely as a currency.
Ryan Charleston, founder and CEO of Bitcorati, used the Internet as a metaphor for bitcoin’s potential:
Regulation and education
The topic of regulation was a primary focus in many of Monday’s panel discussions. A number of different viewpoints on regulation were presented from panelists, but the popular stance seemed to be that some level of regulation will be necessary in order for bitcoin to achieve mainstream adoption.
Jacob Farber, senior counsel at Perkins Coie LLP, noted the contrasting attitudes that the bitcoin community holds about regulation, stating:
“I’m struck by the seemingly mass acceptance of regulation in this room. There are contrasting interests between the original crowd who are averse to regulation and the new innovators working on Bitcoin 2.0.”
Other panelists, like Izzy Klein of Podesta Group, believe that regulation is inevitable.
As such, Klein argued that there needs to be more consensus among regulators in their approach to dealing with digital currencies:
Educating regulators about bitcoin’s underlying technology and its value for the global economy is paramount for productive and meaningful regulation, Klein said.
Closing remarks
The first day of Inside Bitcoins NYC drew a large crowd with diverse interests and opinions, and the variety of panelists and discussions ensured that the conference offered something to appeal to everybody’s interests.
Topics like regulation and entrepreneurial opportunity held a particular focus throughout the day, and though not everybody shared the same opinions, it was clear that attendees felt that they were part of a rapidly evolving and disruptive industry.
Topic: BITCOIN NEWS EVRYDAY! From multiple sources. - page 2. (Read 51244 times)
Dutch Regulator Says Bitcoin is Technology, Not Money
Kadhim Shubber (@kadhimshubber) | Published on April 7, 2014 at 18:05 BST | Europe, News, Regulation
Bitcoin won't replace the euro says Dutch regulator
Bitcoin is not money, the deputy director of the Dutch Payments Association has declared.
Comparing the digital currency to tulip bulbs, which famously rocketed in price during the ‘Tulip Mania’ bubble of the early 1600s, Gijs Boudewijn dismissed suggestions that bitcoin could be currency:
“Bitcoin is not a claim and therefore not money … If you and I agree to pay each other in tulip bulbs then we have established a private currency and the same applies to bitcoin.”
The comments, made in a wide-ranging interview with Dutch bitcoin news site deBitcoin.org, come as European regulators begin to grapple with creating a unified approach to digital currencies.
Bitcoin is a limited prospect
Bitcoin has two almost distinct personalities. The first is the political revolutionary, destined to disempower government. The second is more prosaic; bitcoin is simply a better way of transferring money, a technology easily co-opted by a banking system seen by some bitcoiners as the enemy.
For the majority of society, Boudewijn argued, bitcoin will be the latter, a useful technology for specific transactions and no more than that:
“For specific purposes [bitcoin] is convenient. But eventually – and that’s why you have exchanges – you want to redeem them for something that’s state-backed, and that is central bank money … The functionality and the technology are extremely interesting. The question is, do you want that in a cryptocurrency or can you apply that with the euro as well?”
The comments come weeks after the Dutch Minister for Justice and Security said bitcoin would not be banned, and echo a recent UBS report that suggests that banks can adopt “a bitcoin-like technology” to create a new foundation for payment services that would prop up, instead of pull down, the existing banking system.
Boudewijn said he doubts that bitcoin can become a widely-used currency, and argued that the need for government to provide confidence in a currency means bitcoin would be a limited prospect:
“The underlying fundamental discussion is what the functions are of money in society. In the end it is just a social convention that we agree on together in that we have one legal tender here, and we call it the euro. And a central authority is supervising that. They issue it and guarantee that if [a bank] goes bankrupt … savers get their money back.”
Banks need to get used to bitcoin
Of course, one of the core political arguments behind bitcoin is that the confidence provided by the government isn’t good enough.
The banking crash in 2008 and subsequent economic crisis have shown governments’ powerlessness and even complicity in failing to protect consumers, some argue, pointing to Cyprus’ 2013 levy of up to 10% on all savings accounts.
That event was attributed to a spike in popularity of bitcoin, as people looked to the digital currency as a way of controlling their money and keeping it beyond the reach of government.
In the same interview, Chris Buijink, Chairman of the Dutch Association of Banks (NVB), somewhat conceded the point, saying, “Well, we do everything we can to avoid this from happening again, and that’s the reason for what we’re now discussing in Europe around the bank union.”
Buijink admitted that banks need to start getting used to bitcoin:
“If a concept proves to be good, then we will hear more about it the coming years, and then structures, who are not used to it, will have to think about it and adjust themselves.”
Both Boudewijn’s and Buijink’s comments are not wholly unexpected. Across the world it is increasingly clear that governments and regulators are sceptical – perhaps doubtful for reasons of self-interested – about the idea that digital currencies could replace fiat currency entirely. At the same time they’re waking up to the opportunities offered by the bitcoin technology.
The problem, says Boudewijn, is that payments systems will never be able to move as quickly as a rapidly emerging new technology needs it to.
“In niches like bitcoin you can innovate rapidly, but if you’re in the mainstream market – in a two-sided market where customers are with different banks and you’re in a network industry – it is very difficult. It also ensures a certain slow pace in innovation because it has to work everywhere. That makes it difficult, but that’s inherent to the traditional payment market. And there we can learn from the [digital currencies] of this world.”
Kadhim Shubber (@kadhimshubber) | Published on April 7, 2014 at 18:05 BST | Europe, News, Regulation
Bitcoin won't replace the euro says Dutch regulator
Bitcoin is not money, the deputy director of the Dutch Payments Association has declared.
Comparing the digital currency to tulip bulbs, which famously rocketed in price during the ‘Tulip Mania’ bubble of the early 1600s, Gijs Boudewijn dismissed suggestions that bitcoin could be currency:
“Bitcoin is not a claim and therefore not money … If you and I agree to pay each other in tulip bulbs then we have established a private currency and the same applies to bitcoin.”
The comments, made in a wide-ranging interview with Dutch bitcoin news site deBitcoin.org, come as European regulators begin to grapple with creating a unified approach to digital currencies.
Bitcoin is a limited prospect
Bitcoin has two almost distinct personalities. The first is the political revolutionary, destined to disempower government. The second is more prosaic; bitcoin is simply a better way of transferring money, a technology easily co-opted by a banking system seen by some bitcoiners as the enemy.
For the majority of society, Boudewijn argued, bitcoin will be the latter, a useful technology for specific transactions and no more than that:
“For specific purposes [bitcoin] is convenient. But eventually – and that’s why you have exchanges – you want to redeem them for something that’s state-backed, and that is central bank money … The functionality and the technology are extremely interesting. The question is, do you want that in a cryptocurrency or can you apply that with the euro as well?”
The comments come weeks after the Dutch Minister for Justice and Security said bitcoin would not be banned, and echo a recent UBS report that suggests that banks can adopt “a bitcoin-like technology” to create a new foundation for payment services that would prop up, instead of pull down, the existing banking system.
Boudewijn said he doubts that bitcoin can become a widely-used currency, and argued that the need for government to provide confidence in a currency means bitcoin would be a limited prospect:
“The underlying fundamental discussion is what the functions are of money in society. In the end it is just a social convention that we agree on together in that we have one legal tender here, and we call it the euro. And a central authority is supervising that. They issue it and guarantee that if [a bank] goes bankrupt … savers get their money back.”
Banks need to get used to bitcoin
Of course, one of the core political arguments behind bitcoin is that the confidence provided by the government isn’t good enough.
The banking crash in 2008 and subsequent economic crisis have shown governments’ powerlessness and even complicity in failing to protect consumers, some argue, pointing to Cyprus’ 2013 levy of up to 10% on all savings accounts.
That event was attributed to a spike in popularity of bitcoin, as people looked to the digital currency as a way of controlling their money and keeping it beyond the reach of government.
In the same interview, Chris Buijink, Chairman of the Dutch Association of Banks (NVB), somewhat conceded the point, saying, “Well, we do everything we can to avoid this from happening again, and that’s the reason for what we’re now discussing in Europe around the bank union.”
Buijink admitted that banks need to start getting used to bitcoin:
“If a concept proves to be good, then we will hear more about it the coming years, and then structures, who are not used to it, will have to think about it and adjust themselves.”
Both Boudewijn’s and Buijink’s comments are not wholly unexpected. Across the world it is increasingly clear that governments and regulators are sceptical – perhaps doubtful for reasons of self-interested – about the idea that digital currencies could replace fiat currency entirely. At the same time they’re waking up to the opportunities offered by the bitcoin technology.
The problem, says Boudewijn, is that payments systems will never be able to move as quickly as a rapidly emerging new technology needs it to.
“In niches like bitcoin you can innovate rapidly, but if you’re in the mainstream market – in a two-sided market where customers are with different banks and you’re in a network industry – it is very difficult. It also ensures a certain slow pace in innovation because it has to work everywhere. That makes it difficult, but that’s inherent to the traditional payment market. And there we can learn from the [digital currencies] of this world.”
Enthusiasts and Sceptics Debate Bitcoin at London’s O2 Venue
Roop Gill (@roopgill) | Published on April 7, 2014 at 18:28 BST | Analysis, Events, Feathercoin, Lifestyle
A panel comprising of both bitcoin enthusiasts and sceptics discussed everything from awareness and education to regulation and entrepreneurship at a panel discussion held at London’s O2 venue on Saturday, 5th April.
Titled ‘How Bitcoin Can Fight Back Against the Hackers and Recent Setbacks’, this discussion took place before the much-awaited Bitcoin Fight Night kickboxing event, and was co-organised by CoinScrum, Firestartr.co and HardBTC.org.
Bitcoin-Panel-Discussion
Hosted by Chris Ellis, bitcoin enthusiast and co-founder of feathercoin, the goal was to have developers, philosophers and bankers engage in a dialogue about bitcoin.
Sadly, the event didn’t quite go as planned, with technical difficulties with a live stream from the US and the resulting delay shrinking the size of the panel from the original seven to four, which included the last minute enrolment of Simon Dixon from Bank to the Future.
The final lineup was as follows:
Chris Ellis – co-founder of feathercoin
Ben Dyson – bitcoin sceptic and founder of Positive Money
Gautam Dhillon – founder of the Treasury Outsourcing Company and former employee of Lloyds Bank and JP Morgan Chase.
Simon Dixon – CEO and co-founder of Bank to the Future
Bitcoin Panel Discussion: Chris-Ellis
Chris Ellis, feathercoin co-founder, hosted the discussion
Although the panel was smaller than expected, Ellis, Dyson, Dhillon and Dixon were able to cover a wide array of subtopics from within the cryptocurrency realm.
Security concerns
The main theme of the debate was to address security concerns around bitcoin and other cryptocurrencies. In the shadow of the Mt. Gox fiasco, Ellis started off by mentioning that some people who had a good grasp of bitcoin and were smart investors also lost money on Mt. Gox:
“I think there is a lot of awareness (about bitcoin) right now, but there isn’t an awful lot of understanding.”
“I am not sure how much awareness there is,” countered Dyson. “I was reading a reddit thread of Mt. Gox horror stories and one guy lost his kids’ education fund and another borrowed his wife’s live savings to put into Mt. Gox. All this is typical bubble behaviour.”
He added:
“People need to understand that bitcoin is more like gold. If somebody takes cash out of your wallet, you aren’t going to get it back.”
Commented Dixon: “When you are dealing with banks, the bank takes care of security. But, peer to peer, the peer has to take care of security. So, it’s a challenge because people need to be aware of how to store [their coins].”
Expectations from the entrepreneurs
On the topic of increasing education on the pros and cons of bitcoin, Dixon said that it was the responsibility of entrepreneurs to solve issues that consumers don’t want to engage with.
He said:
“Bitcoin will be a success when people don’t have to know how it works. No one looks inside their iPhone and scrutinizes how it works. No one looks inside his or her TV or credit cards; they just work. When bitcoin becomes close to adoption, it will be because entrepreneurs have invested into things that make it so that you don’t need to know how it works. That’s one of the things that is holding back adoption right now.”
Bitcoin Panel Discussion: Ben Dyson
Ben Dyson takes the mic
While some of the panellists were discussing how to increase the usability of bitcoin, Dyson was more vocal about his scepticism regarding the technology as a whole.
“There are design flaws in bitcoin,” said Dyson. “It’s a prototype and when you create a prototype, you quickly learn there are problems with that, so you change those and bring something new.”
He added:
“Here’s what bothers me about bitcoin: the first version of the Internet was basically connecting few different universities in California. Now, we are using a better design. With bitcoin, everyone is still stuck on first design and first version.”
That conversation turned into a discussion of various cryptocurrencies currently in existence. Ellis himself is the founder of an altcoin called feathercoin. He pointed out that it can take about a week for someone to study the code and create their own cryptocurrency.
Said Ellis:
“Asking ‘how many cryptocurrencies there would be’ is like asking how many bloggers there would be.”
Towards the end of the talk, the panel engaged with the audience and took questions from the attendees. Furthermore, there was allotted time for networking after the event.
Attendees of the meetup also had access to discounted tickets for the first Bitcoin Fight Night, where they could see an evening of kickboxing, as well as a stunt by broadcaster and MaxCoin founder Max Keiser who symbolically took on a fighter representing traditional currency (see the video).
Roop Gill (@roopgill) | Published on April 7, 2014 at 18:28 BST | Analysis, Events, Feathercoin, Lifestyle
A panel comprising of both bitcoin enthusiasts and sceptics discussed everything from awareness and education to regulation and entrepreneurship at a panel discussion held at London’s O2 venue on Saturday, 5th April.
Titled ‘How Bitcoin Can Fight Back Against the Hackers and Recent Setbacks’, this discussion took place before the much-awaited Bitcoin Fight Night kickboxing event, and was co-organised by CoinScrum, Firestartr.co and HardBTC.org.
Bitcoin-Panel-Discussion
Hosted by Chris Ellis, bitcoin enthusiast and co-founder of feathercoin, the goal was to have developers, philosophers and bankers engage in a dialogue about bitcoin.
Sadly, the event didn’t quite go as planned, with technical difficulties with a live stream from the US and the resulting delay shrinking the size of the panel from the original seven to four, which included the last minute enrolment of Simon Dixon from Bank to the Future.
The final lineup was as follows:
Chris Ellis – co-founder of feathercoin
Ben Dyson – bitcoin sceptic and founder of Positive Money
Gautam Dhillon – founder of the Treasury Outsourcing Company and former employee of Lloyds Bank and JP Morgan Chase.
Simon Dixon – CEO and co-founder of Bank to the Future
Bitcoin Panel Discussion: Chris-Ellis
Chris Ellis, feathercoin co-founder, hosted the discussion
Although the panel was smaller than expected, Ellis, Dyson, Dhillon and Dixon were able to cover a wide array of subtopics from within the cryptocurrency realm.
Security concerns
The main theme of the debate was to address security concerns around bitcoin and other cryptocurrencies. In the shadow of the Mt. Gox fiasco, Ellis started off by mentioning that some people who had a good grasp of bitcoin and were smart investors also lost money on Mt. Gox:
“I think there is a lot of awareness (about bitcoin) right now, but there isn’t an awful lot of understanding.”
“I am not sure how much awareness there is,” countered Dyson. “I was reading a reddit thread of Mt. Gox horror stories and one guy lost his kids’ education fund and another borrowed his wife’s live savings to put into Mt. Gox. All this is typical bubble behaviour.”
He added:
“People need to understand that bitcoin is more like gold. If somebody takes cash out of your wallet, you aren’t going to get it back.”
Commented Dixon: “When you are dealing with banks, the bank takes care of security. But, peer to peer, the peer has to take care of security. So, it’s a challenge because people need to be aware of how to store [their coins].”
Expectations from the entrepreneurs
On the topic of increasing education on the pros and cons of bitcoin, Dixon said that it was the responsibility of entrepreneurs to solve issues that consumers don’t want to engage with.
He said:
“Bitcoin will be a success when people don’t have to know how it works. No one looks inside their iPhone and scrutinizes how it works. No one looks inside his or her TV or credit cards; they just work. When bitcoin becomes close to adoption, it will be because entrepreneurs have invested into things that make it so that you don’t need to know how it works. That’s one of the things that is holding back adoption right now.”
Bitcoin Panel Discussion: Ben Dyson
Ben Dyson takes the mic
While some of the panellists were discussing how to increase the usability of bitcoin, Dyson was more vocal about his scepticism regarding the technology as a whole.
“There are design flaws in bitcoin,” said Dyson. “It’s a prototype and when you create a prototype, you quickly learn there are problems with that, so you change those and bring something new.”
He added:
“Here’s what bothers me about bitcoin: the first version of the Internet was basically connecting few different universities in California. Now, we are using a better design. With bitcoin, everyone is still stuck on first design and first version.”
That conversation turned into a discussion of various cryptocurrencies currently in existence. Ellis himself is the founder of an altcoin called feathercoin. He pointed out that it can take about a week for someone to study the code and create their own cryptocurrency.
Said Ellis:
“Asking ‘how many cryptocurrencies there would be’ is like asking how many bloggers there would be.”
Towards the end of the talk, the panel engaged with the audience and took questions from the attendees. Furthermore, there was allotted time for networking after the event.
Attendees of the meetup also had access to discounted tickets for the first Bitcoin Fight Night, where they could see an evening of kickboxing, as well as a stunt by broadcaster and MaxCoin founder Max Keiser who symbolically took on a fighter representing traditional currency (see the video).
Bitcoin Mining Hardware Maker AMT Facing Court Over Delays
Jon Southurst (@southtopia) | Published on April 7, 2014 at 17:34 BST | Companies, Mining, News
Mining hardware manufacturer Advanced Mining Technology, Inc. (AMT) is the latest to face a class-action lawsuit from customers alleging products were not delivered on time, according to a report in the Delaware County Daily Times.
There are concerns lawsuits could soon become more common in this field, in which small startup companies race to design and build cutting-edge and specialist hardware, dealing with processes that can challenge even large chip manufacturers.
Just over a week ago, a Texas judge granted a court order to ‘freeze’ the bitcoin wallets of another ASIC mining manufacturer, HashFast, as part of a lawsuit claiming late delivery.
Fast obsolescence
Timing is perhaps even more critical in the world of bitcoin mining, where expensive machines delivered even a month or two late are rendered obsolete with no other useful purpose once mining becomes impractical.
The plaintiffs filed a complaint in the US District Court for the Eastern District of Pennsylvania last Wednesday, claiming the Haverford, Pennsylvania, startup is a “sham” company unwilling or unable to deliver its ASIC mining hardware on time.
The class action brings together plaintiffs from Florida, North Carolina and Utah, all of whom claimed they purchased ASIC hardware from AMT in November and December 2013, which was never delivered. They also claim there are hundreds of other AMT customers in the same boat.
They are requesting a jury trial based on claims of: “unfair, deceptive and fraudulent business practices, breach of contract, breach of express warranty, common law fraud, negligent misrepresentation, breach of the duty of good faith and fair dealing, unjust enrichment, and various state consumer protection laws.”
Still communicating
A quick check of online forums indeed reveals some dissatisfied customers, and hints that the small company has struggled to meet the demands of large-scale customer service. On those same forums, however, AMT claims it is shipping products and has been posting regular updates in its official company news thread.
AMT, whose website slogan is ‘Coin Mining on the Level’, also sells on Amazon and has a catalogue that ranges from a compact 80 GH/s miner for $1,499 to a 3.2 TH/s beast for $14,999, with 20 units scheduled to ship on 15th April. It also sells its 28nm ‘Coin Craft A1′ chips and has said in forum posts it intends to offer a hosted mining option in future.
CoinDesk has reached out to AMT for further comment on this story, and will include it in an update if/when it arrives.
Sponsored by: www.bitcoinlottery.co.nf
Jon Southurst (@southtopia) | Published on April 7, 2014 at 17:34 BST | Companies, Mining, News
Mining hardware manufacturer Advanced Mining Technology, Inc. (AMT) is the latest to face a class-action lawsuit from customers alleging products were not delivered on time, according to a report in the Delaware County Daily Times.
There are concerns lawsuits could soon become more common in this field, in which small startup companies race to design and build cutting-edge and specialist hardware, dealing with processes that can challenge even large chip manufacturers.
Just over a week ago, a Texas judge granted a court order to ‘freeze’ the bitcoin wallets of another ASIC mining manufacturer, HashFast, as part of a lawsuit claiming late delivery.
Fast obsolescence
Timing is perhaps even more critical in the world of bitcoin mining, where expensive machines delivered even a month or two late are rendered obsolete with no other useful purpose once mining becomes impractical.
The plaintiffs filed a complaint in the US District Court for the Eastern District of Pennsylvania last Wednesday, claiming the Haverford, Pennsylvania, startup is a “sham” company unwilling or unable to deliver its ASIC mining hardware on time.
The class action brings together plaintiffs from Florida, North Carolina and Utah, all of whom claimed they purchased ASIC hardware from AMT in November and December 2013, which was never delivered. They also claim there are hundreds of other AMT customers in the same boat.
They are requesting a jury trial based on claims of: “unfair, deceptive and fraudulent business practices, breach of contract, breach of express warranty, common law fraud, negligent misrepresentation, breach of the duty of good faith and fair dealing, unjust enrichment, and various state consumer protection laws.”
Still communicating
A quick check of online forums indeed reveals some dissatisfied customers, and hints that the small company has struggled to meet the demands of large-scale customer service. On those same forums, however, AMT claims it is shipping products and has been posting regular updates in its official company news thread.
AMT, whose website slogan is ‘Coin Mining on the Level’, also sells on Amazon and has a catalogue that ranges from a compact 80 GH/s miner for $1,499 to a 3.2 TH/s beast for $14,999, with 20 units scheduled to ship on 15th April. It also sells its 28nm ‘Coin Craft A1′ chips and has said in forum posts it intends to offer a hosted mining option in future.
CoinDesk has reached out to AMT for further comment on this story, and will include it in an update if/when it arrives.
Sponsored by: www.bitcoinlottery.co.nf
Jeremy Allaire: ‘Bitcoin Needs Greater Governance to Reach Mass Adoption’
Pete Rizzo (@pete_rizzo_) | Published on April 7, 2014 at 17:03 BST | Analysis, Circle, Investors, News, Regulation
Circle CEO Jeremy Allaire gave the opening keynote address at Inside Bitcoins New York on 7th April as part of a talk entitled ‘Mainstreaming Bitcoin: The Next Phase of Digital Currency Growth & Value Creation’.
The two-day conference will feature a number of notable speakers from the industry, including Blockchain’s Nicolas Cary, GoCoin’s Steve Beauregard and Kraken’s Jesse Powell, and is expected to draw roughly 1,000 attendees.
Inside Bitcoins, Jeremy Allaire, Circle
The second annual Inside Bitcoins New York conference and expo kicked off on 7th April with a keynote address from Circle CEO and founder Jeremy Allaire that addressed how the industry should seek to take bitcoin and its many benefits into the mainstream.
During the half-hour speech, Allaire bristled through a big-picture vision of, not only where bitcoin is today, but the steps he feels it needs to take to reach the mass-market acceptance of other technological breakthroughs like the Internet.
The most notable of Allaire’s many points was perhaps his emphasis on the fact that reaching this goal is likely to require the bitcoin community to make fundamental changes, while at the same time becoming more open to involvement from stakeholders, such as governments and commercial banks, that may have traditionally been treated adversarially by the community.
The future, according to Allaire, will require bitcoin to work with traditional financial institutions so that the technology can reach its full potential.
Explained Allaire:
“Bitcoin needs greater levels of governance around it. I do not believe this industry will grow without collaboration from governments around the world.”
At the same time, Allaire also stressed that such changes will need to take time.
For example, he drew notice to the fact that e-commerce makes up just 5.8% of retail sales, and that though many have been heralding the death of broadcast television, it has not yet been replaced by new technologies.
‘We’re in 1994′
Allaire likened the state of the bitcoin industry to the Internet of 1994, but the comparison was not entirely positive, as he stressed that “these transformations take a really long time”.
The keynote speaker noted that bitcoin is still waiting for a killer app, and that bitcoin has still achieved only limited consumer adoption.
Allaire estimated that 90% of bitcoin users are holding the digital currency as a speculative investment, and that few are using it for everyday payment.
‘Architecture will need to scale’
The Circle CEO also noted how the fundamental bitcoin technology has still not caught up with the larger ideas proliferating in the space.
Specifically, he stated that, today, bitcoin can handle only about nine transactions per second.
Said Allaire:
“That’s not going to scale and not going to work. The fundamental aspects of the architecture will need to scale.”
Further, he indicated that the companies that use the technology will need to evolve to associate identity with transactions, thus providing all governments and businesses the ability to enforce laws while the system maintains anonymity.
He also discussed the future of mining, suggesting that this industry will need to evolve toward an industrial scale while incorporating hobbyists, adding: “I believe that as [...] the monetary base gets into the trillions, governments will introduce regulations for global mining.”
‘We need mainstream commercial banks’
Despite recognizing these shortcomings, Allaire also offered bold predictions about bitcoin’s potential should it meet these challenges.
For example, he noted that he believes major online processors such as Chase Paymentech, First Data and PayPal will have adopted bitcoin within three to five years’ time.
In his talk, Allaire stressed the need for added governance in the community. However, he notably used governance as a broad term, extending beyond government enforcement to encompass the steps the community at large will need to make to ensure consumers can use bitcoin.
But, Allaire also attacked early bitcoin adopters, who he characterized as looking to capitalize on the increasing value of bitcoin, while at the same time harbouring ill will toward the institutions that would allow them to capitalize on exchanging their bitcoin for capital.
Allaire indicated that these users should see the middle ground that he believes the industry will need to establish, one that balances the privacy of cash with the needs of governments and authorities, and recognizes that paper currency is not likely to go away.
About Jeremy Allaire
A tech entrepreneur since the mid-1990s, Allaire was notably the CEO of online video platform Brightcove until 2013, when he stepped down to start a bitcoin company, Circle Internet Financial.
Allaire has been outspoken about the need for increasing regulation in the bitcoin space, and given his prior business success, has quickly assumed a leadership role in the industry.
After a long tenure as bitcoin’s most notable stealth startup, Circle unveiled new details about its business model on 26th March, along with $17m in new Series-B funding.
Sponsored by : www.bitcoinlottery.co.nf
Pete Rizzo (@pete_rizzo_) | Published on April 7, 2014 at 17:03 BST | Analysis, Circle, Investors, News, Regulation
Circle CEO Jeremy Allaire gave the opening keynote address at Inside Bitcoins New York on 7th April as part of a talk entitled ‘Mainstreaming Bitcoin: The Next Phase of Digital Currency Growth & Value Creation’.
The two-day conference will feature a number of notable speakers from the industry, including Blockchain’s Nicolas Cary, GoCoin’s Steve Beauregard and Kraken’s Jesse Powell, and is expected to draw roughly 1,000 attendees.
Inside Bitcoins, Jeremy Allaire, Circle
The second annual Inside Bitcoins New York conference and expo kicked off on 7th April with a keynote address from Circle CEO and founder Jeremy Allaire that addressed how the industry should seek to take bitcoin and its many benefits into the mainstream.
During the half-hour speech, Allaire bristled through a big-picture vision of, not only where bitcoin is today, but the steps he feels it needs to take to reach the mass-market acceptance of other technological breakthroughs like the Internet.
The most notable of Allaire’s many points was perhaps his emphasis on the fact that reaching this goal is likely to require the bitcoin community to make fundamental changes, while at the same time becoming more open to involvement from stakeholders, such as governments and commercial banks, that may have traditionally been treated adversarially by the community.
The future, according to Allaire, will require bitcoin to work with traditional financial institutions so that the technology can reach its full potential.
Explained Allaire:
“Bitcoin needs greater levels of governance around it. I do not believe this industry will grow without collaboration from governments around the world.”
At the same time, Allaire also stressed that such changes will need to take time.
For example, he drew notice to the fact that e-commerce makes up just 5.8% of retail sales, and that though many have been heralding the death of broadcast television, it has not yet been replaced by new technologies.
‘We’re in 1994′
Allaire likened the state of the bitcoin industry to the Internet of 1994, but the comparison was not entirely positive, as he stressed that “these transformations take a really long time”.
The keynote speaker noted that bitcoin is still waiting for a killer app, and that bitcoin has still achieved only limited consumer adoption.
Allaire estimated that 90% of bitcoin users are holding the digital currency as a speculative investment, and that few are using it for everyday payment.
‘Architecture will need to scale’
The Circle CEO also noted how the fundamental bitcoin technology has still not caught up with the larger ideas proliferating in the space.
Specifically, he stated that, today, bitcoin can handle only about nine transactions per second.
Said Allaire:
“That’s not going to scale and not going to work. The fundamental aspects of the architecture will need to scale.”
Further, he indicated that the companies that use the technology will need to evolve to associate identity with transactions, thus providing all governments and businesses the ability to enforce laws while the system maintains anonymity.
He also discussed the future of mining, suggesting that this industry will need to evolve toward an industrial scale while incorporating hobbyists, adding: “I believe that as [...] the monetary base gets into the trillions, governments will introduce regulations for global mining.”
‘We need mainstream commercial banks’
Despite recognizing these shortcomings, Allaire also offered bold predictions about bitcoin’s potential should it meet these challenges.
For example, he noted that he believes major online processors such as Chase Paymentech, First Data and PayPal will have adopted bitcoin within three to five years’ time.
In his talk, Allaire stressed the need for added governance in the community. However, he notably used governance as a broad term, extending beyond government enforcement to encompass the steps the community at large will need to make to ensure consumers can use bitcoin.
But, Allaire also attacked early bitcoin adopters, who he characterized as looking to capitalize on the increasing value of bitcoin, while at the same time harbouring ill will toward the institutions that would allow them to capitalize on exchanging their bitcoin for capital.
Allaire indicated that these users should see the middle ground that he believes the industry will need to establish, one that balances the privacy of cash with the needs of governments and authorities, and recognizes that paper currency is not likely to go away.
About Jeremy Allaire
A tech entrepreneur since the mid-1990s, Allaire was notably the CEO of online video platform Brightcove until 2013, when he stepped down to start a bitcoin company, Circle Internet Financial.
Allaire has been outspoken about the need for increasing regulation in the bitcoin space, and given his prior business success, has quickly assumed a leadership role in the industry.
After a long tenure as bitcoin’s most notable stealth startup, Circle unveiled new details about its business model on 26th March, along with $17m in new Series-B funding.
Sponsored by : www.bitcoinlottery.co.nf
Swedish Kickboxer Wins Bitcoin Fight Prize, Max Keiser KO’s ‘Bankster’
Roop Gill (@roopgill) | Published on April 7, 2014 at 16:12 BST | Events, Lifestyle
Seven kickboxers from around Europe competed in the first Bitcoin Fight Night on Saturday, 5th April.
Held at the iconic O2 Arena in London, a prize of bitcoin worth £5,000 was on offer to the tournament victor.
Before the actual tournament kicked off, six fighters competed in the warm-up rounds, including two female combatants.
Sweden-based Meran Zangana was the big winner of the event, scooping the digital currency prize as his reward for beating the UK’s Kevin Ward in the final fight of the night.
Youtube link: https://www.youtube.com/watch?feature=player_embedded&v=zuyaeUCvSBs
Bitcoin Fight Night prize
With over 700 tickets sold, the tournament was the biggest UK-based bitcoin event yet.
Organiser Patrick Carroll explained that the idea for the Bitcoin Fight Night came about while attending a meetup group run by CoinScrum in central London.
While the indigO2 arena in the O2 was packed on the night, not everyone was there to support cryptocurrencies – the audience was a mix of bitcoin enthusiasts and kickboxing fans.
The die-hard fight crowd were there to cheer for their favourite fighters, and many bitcoiners came for a special interval act – a staged fight between broadcaster and proponent of digital currencies Max Keiser and ‘The Bankster’ represented by a trained kickboxer.
Keiser’s crowdfunding venture StartJOIN was co-sponsoring the event. He explains how he got involved:
“The kickboxing and bitcoin guys came to StartJOIN and they said ‘we want to put the project on StartJOIN’, which is a crowdfunding site. We immediately got involved and then they said, ‘why not have Max come along?’ So I reluctantly agreed to do this.”
Maxcoin defeats paper money
Prior to the fight, he told CoinDesk about his plans: “I come out and we are going to have a little match with somebody representing paper money and the banking cartel – the evil, the true evil in this world.”
He added:
“Unlike some of these markets, like JP Morgan’s activities or Goldman Sachs, which are entirely rigged, this is only partially rigged.”
During the interval of the tournament, Keiser took to the ring and the gloves came off, literally. However, no real blows were exchanged. Some intense yelling seemed to intimidate his opponent and, as a final blow, Keiser flashed his MaxCoin T-shirt. ‘The Bankster’ immediately fell to the floor.
Keiser explains why he thought this interval act was more than just a gimmick:
“The fight in this arena is a good metaphor for what’s happening in the geopolitical front. Countries are now on a war footing. The battle is heating up. People are looking to preserve wealth and they will naturally go to bitcoin gold and silver.”
He also had some predictions for bitcoin:
“Metaphorically, bitcoin is the hero in the new currency arena and I think it will dominate the currency trading going forward. I think it will capture a significant part of the FOREX market. I think price will rebound in 2014 and hit an all-time high.”
Before the Bitcoin Fight Night, a panel discussion on the topic ‘How Can Bitcoin Fight Back Against the Hackers’ took place at the venue, chaired by Chris Ellis, the co-founder of feathercoin.
Both events were sponsored by Firestartr.co, which provides seed-stage capital and aids startups in their early stages.
Sponsored by : www.bitcoinlottery.co.nf
Roop Gill (@roopgill) | Published on April 7, 2014 at 16:12 BST | Events, Lifestyle
Seven kickboxers from around Europe competed in the first Bitcoin Fight Night on Saturday, 5th April.
Held at the iconic O2 Arena in London, a prize of bitcoin worth £5,000 was on offer to the tournament victor.
Before the actual tournament kicked off, six fighters competed in the warm-up rounds, including two female combatants.
Sweden-based Meran Zangana was the big winner of the event, scooping the digital currency prize as his reward for beating the UK’s Kevin Ward in the final fight of the night.
Youtube link: https://www.youtube.com/watch?feature=player_embedded&v=zuyaeUCvSBs
Bitcoin Fight Night prize
With over 700 tickets sold, the tournament was the biggest UK-based bitcoin event yet.
Organiser Patrick Carroll explained that the idea for the Bitcoin Fight Night came about while attending a meetup group run by CoinScrum in central London.
While the indigO2 arena in the O2 was packed on the night, not everyone was there to support cryptocurrencies – the audience was a mix of bitcoin enthusiasts and kickboxing fans.
The die-hard fight crowd were there to cheer for their favourite fighters, and many bitcoiners came for a special interval act – a staged fight between broadcaster and proponent of digital currencies Max Keiser and ‘The Bankster’ represented by a trained kickboxer.
Keiser’s crowdfunding venture StartJOIN was co-sponsoring the event. He explains how he got involved:
“The kickboxing and bitcoin guys came to StartJOIN and they said ‘we want to put the project on StartJOIN’, which is a crowdfunding site. We immediately got involved and then they said, ‘why not have Max come along?’ So I reluctantly agreed to do this.”
Maxcoin defeats paper money
Prior to the fight, he told CoinDesk about his plans: “I come out and we are going to have a little match with somebody representing paper money and the banking cartel – the evil, the true evil in this world.”
He added:
“Unlike some of these markets, like JP Morgan’s activities or Goldman Sachs, which are entirely rigged, this is only partially rigged.”
During the interval of the tournament, Keiser took to the ring and the gloves came off, literally. However, no real blows were exchanged. Some intense yelling seemed to intimidate his opponent and, as a final blow, Keiser flashed his MaxCoin T-shirt. ‘The Bankster’ immediately fell to the floor.
Keiser explains why he thought this interval act was more than just a gimmick:
“The fight in this arena is a good metaphor for what’s happening in the geopolitical front. Countries are now on a war footing. The battle is heating up. People are looking to preserve wealth and they will naturally go to bitcoin gold and silver.”
He also had some predictions for bitcoin:
“Metaphorically, bitcoin is the hero in the new currency arena and I think it will dominate the currency trading going forward. I think it will capture a significant part of the FOREX market. I think price will rebound in 2014 and hit an all-time high.”
Before the Bitcoin Fight Night, a panel discussion on the topic ‘How Can Bitcoin Fight Back Against the Hackers’ took place at the venue, chaired by Chris Ellis, the co-founder of feathercoin.
Both events were sponsored by Firestartr.co, which provides seed-stage capital and aids startups in their early stages.
Sponsored by : www.bitcoinlottery.co.nf
DigitalBTC Signs Bitcoin Mining Hardware Deal with BitFury
Nermin Hajdarbegovic | Published on April 7, 2014 at 12:02 BST | Investors, Mining, News
DigitalBTC has inked a strategic hardware supply agreement with BitFury, one of the leading manufacturers of bitcoin mining equipment.
The company is owned by Australian investment firm Macro Energy, which acquired Digital CC and its subsidiary digitalBTC last month. Thanks to the acquisition, the firm became the first bitcoin-related business to be listed on the Australian Stock Exchange (ASX).
Mining plans
At the time Macro Energy said it plans to raise AU$9.1m and to invest the money in the expansion of digitalBTC operations, including bitcoin mining. Soon after digitalBTC entered a strategic partnership with CloudHashing.com.
Under the terms of the agreement CloudHashing.com software will be deployed on digitalBTC hardware, which will also be managed by CloudHashing.com. The hardware will apparently be installed in CloudHashing.com data centres in Iceland and Texas.
The companies pointed out that the deal is a win-win situation for all parties – digitalBTC gets valuable expertise on the technical issues of the business, while CloudHashing.com gets access to digitalBTC’s trade desk.
DigitalBTC’s Executive Chairman Zhenya Tsvetnenko said the partnership will allow digitalBTC to concentrate its resources on retail-focused mobile applications and other operations.
CloudHashing.com CEO Emmanuel Abiodun told CoinDesk that the relationship is mutually beneficial and that he is pleased to team up with digitalBTC, which has strong capital backing and a proven track record in bitcoin trading.
Abiodun added that CloudHashing.com expects to generate $7.5m-$10m worth of bitcoins a month.
Enter BitFury
DigitalBTC has not shared much detail about the BitFury deal, nor did it mention CloudHashing.com. However, the company did state that the first instalment of the new bitcoin mining hardware is already in operation and started generating revenue in March.
The revenues will be used to fast-track the development of digitalBTC’s retail products. The company stressed that retail products are a key focus for its business model. There is still no word on the precise quantity and type of hardware ordered by digitalBTC, but the company did say that the first batch cost $2m.
“Under this agreement, BitFury will supply a significant quantity of its most advanced bitcoin mining hardware to digitalBTC, backed by manufacture assurances. This will significantly advance digitalBTC’s bitcoin mining capacity,” the company said.
DigitalBTC points out that about 40% of the bitcoins so far produced were mined with BitFury chips. Furthermore it states that the hardware it acquired has secured it a “significant proportion” of the current bitcoin mining network, thus making digitalBTC one of the largest bitcoin mining operations in the world.
Big earner
The first installation of new BitFury hardware has earned digitalBTC more than 680 bitcoins since it was deployed, earning the company $330,000 during its first 13 days of operation between March 20th and April 2nd.
DigitalBTC said:
“DigitalBTC has committed to two tranches of hardware – this first installation of $2m of state-of-the-art bitoin mining hardware that is currently in operation, and a second tranche planned to be delivered and operational in May 2014.”
Tsvetnenko said the agreement is backed by “attractive” manufacturer guarantees and that it allowed digitalBTC to quickly expand its mining capacity. Furthermore, the company plans to continue expanding its bitcoin operations, including mining, trading and consumer focused retail applications.
Said Tsvetnenko:
“The bitcoin system continues to rapidly mature, evident by significant backing from very large investment firms. Bitcoin focused investment funds of approximately $150m in capacity are now being formed. In addition, there has already been in excess of $100m of investments made into the bitcoin system. This magnitude of investment is set to drive bitcoin into ever wider acceptance and use.”
Tsvetnenko said the next step is to enable development of the consumer-friendly software and applications that the system needs. DigitalBTC plans to be a contributor to this retail push, he explained, through its consumer-oriented retail applications.
Nermin Hajdarbegovic | Published on April 7, 2014 at 12:02 BST | Investors, Mining, News
DigitalBTC has inked a strategic hardware supply agreement with BitFury, one of the leading manufacturers of bitcoin mining equipment.
The company is owned by Australian investment firm Macro Energy, which acquired Digital CC and its subsidiary digitalBTC last month. Thanks to the acquisition, the firm became the first bitcoin-related business to be listed on the Australian Stock Exchange (ASX).
Mining plans
At the time Macro Energy said it plans to raise AU$9.1m and to invest the money in the expansion of digitalBTC operations, including bitcoin mining. Soon after digitalBTC entered a strategic partnership with CloudHashing.com.
Under the terms of the agreement CloudHashing.com software will be deployed on digitalBTC hardware, which will also be managed by CloudHashing.com. The hardware will apparently be installed in CloudHashing.com data centres in Iceland and Texas.
The companies pointed out that the deal is a win-win situation for all parties – digitalBTC gets valuable expertise on the technical issues of the business, while CloudHashing.com gets access to digitalBTC’s trade desk.
DigitalBTC’s Executive Chairman Zhenya Tsvetnenko said the partnership will allow digitalBTC to concentrate its resources on retail-focused mobile applications and other operations.
CloudHashing.com CEO Emmanuel Abiodun told CoinDesk that the relationship is mutually beneficial and that he is pleased to team up with digitalBTC, which has strong capital backing and a proven track record in bitcoin trading.
Abiodun added that CloudHashing.com expects to generate $7.5m-$10m worth of bitcoins a month.
Enter BitFury
DigitalBTC has not shared much detail about the BitFury deal, nor did it mention CloudHashing.com. However, the company did state that the first instalment of the new bitcoin mining hardware is already in operation and started generating revenue in March.
The revenues will be used to fast-track the development of digitalBTC’s retail products. The company stressed that retail products are a key focus for its business model. There is still no word on the precise quantity and type of hardware ordered by digitalBTC, but the company did say that the first batch cost $2m.
“Under this agreement, BitFury will supply a significant quantity of its most advanced bitcoin mining hardware to digitalBTC, backed by manufacture assurances. This will significantly advance digitalBTC’s bitcoin mining capacity,” the company said.
DigitalBTC points out that about 40% of the bitcoins so far produced were mined with BitFury chips. Furthermore it states that the hardware it acquired has secured it a “significant proportion” of the current bitcoin mining network, thus making digitalBTC one of the largest bitcoin mining operations in the world.
Big earner
The first installation of new BitFury hardware has earned digitalBTC more than 680 bitcoins since it was deployed, earning the company $330,000 during its first 13 days of operation between March 20th and April 2nd.
DigitalBTC said:
“DigitalBTC has committed to two tranches of hardware – this first installation of $2m of state-of-the-art bitoin mining hardware that is currently in operation, and a second tranche planned to be delivered and operational in May 2014.”
Tsvetnenko said the agreement is backed by “attractive” manufacturer guarantees and that it allowed digitalBTC to quickly expand its mining capacity. Furthermore, the company plans to continue expanding its bitcoin operations, including mining, trading and consumer focused retail applications.
Said Tsvetnenko:
“The bitcoin system continues to rapidly mature, evident by significant backing from very large investment firms. Bitcoin focused investment funds of approximately $150m in capacity are now being formed. In addition, there has already been in excess of $100m of investments made into the bitcoin system. This magnitude of investment is set to drive bitcoin into ever wider acceptance and use.”
Tsvetnenko said the next step is to enable development of the consumer-friendly software and applications that the system needs. DigitalBTC plans to be a contributor to this retail push, he explained, through its consumer-oriented retail applications.
Search Engine DuckDuckGo Integrates Bitcoin Price Quotes
Nermin Hajdarbegovic | Published on April 7, 2014 at 14:10 BST | News, Technology
Privacy-loving search engine DuckDuckGo has started displaying price quotes on bitcoin-related search queries.
Launched in 2008, DuckDuckGo is a relatively fresh-faced search engine headed up by Gabriel Weinberg. The driving force behind the service is privacy – thus, integrating bitcoin price quotes seems like a logical move for the young outfit.
The search engine is designed for people who would rather not have their personal data tracked online. Since it doesn’t store any user data, the site does not offer personalised search results – or personalised ads for that matter.
In 2013 alone, DuckDuckGo had one billion search queries and is gaining traction fast.
DuckDuckGo goes bitcoin
The implementation of the price listing, as first spotted by NewsBTC, appears to be rather rudimentary. The new feature only shows up when you enter specific queries like “bitcoin price” or “BTC to USD”. The price quote then links to Blockchain.info, specifically to the market page.
duckduckgo
However, if you try searching for “bitcoin quote” or even “bitcoin price quote” the quote box does not pop up. This is not the case with other price search engines that have started quoting bitcoin, so DuckDuckGo might want to polish its solution.
Google still lacks bitcoin integration
Search giant Google does not offer a bitcoin quote box and it is unclear whether it plans to do so. However, Microsoft’s Bing search engine and Yandex, the biggest search engine in Russia, have already integrated bitcoin functionality, including automatic price conversion.
For example, Bing will work out the value of bitcoin on the go, provided the user enters a search that can be figured out by the engine. This basically means that you can enter a search like “1 BTC to USD” and Bing will automatically convert it.
The same is true of Yandex, which displays the exchange rate using the CoinDesk Bitcoin Price index and it also allows a convenient price conversion tool. Wolfram Alpha also offers a simple bitcoin look-up tool.
Nermin Hajdarbegovic | Published on April 7, 2014 at 14:10 BST | News, Technology
Privacy-loving search engine DuckDuckGo has started displaying price quotes on bitcoin-related search queries.
Launched in 2008, DuckDuckGo is a relatively fresh-faced search engine headed up by Gabriel Weinberg. The driving force behind the service is privacy – thus, integrating bitcoin price quotes seems like a logical move for the young outfit.
The search engine is designed for people who would rather not have their personal data tracked online. Since it doesn’t store any user data, the site does not offer personalised search results – or personalised ads for that matter.
In 2013 alone, DuckDuckGo had one billion search queries and is gaining traction fast.
DuckDuckGo goes bitcoin
The implementation of the price listing, as first spotted by NewsBTC, appears to be rather rudimentary. The new feature only shows up when you enter specific queries like “bitcoin price” or “BTC to USD”. The price quote then links to Blockchain.info, specifically to the market page.
duckduckgo
However, if you try searching for “bitcoin quote” or even “bitcoin price quote” the quote box does not pop up. This is not the case with other price search engines that have started quoting bitcoin, so DuckDuckGo might want to polish its solution.
Google still lacks bitcoin integration
Search giant Google does not offer a bitcoin quote box and it is unclear whether it plans to do so. However, Microsoft’s Bing search engine and Yandex, the biggest search engine in Russia, have already integrated bitcoin functionality, including automatic price conversion.
For example, Bing will work out the value of bitcoin on the go, provided the user enters a search that can be figured out by the engine. This basically means that you can enter a search like “1 BTC to USD” and Bing will automatically convert it.
The same is true of Yandex, which displays the exchange rate using the CoinDesk Bitcoin Price index and it also allows a convenient price conversion tool. Wolfram Alpha also offers a simple bitcoin look-up tool.
Irish Company Now Paying Employees’ Salaries in Bitcoin
Kadhim Shubber (@kadhimshubber) | Published on April 7, 2014 at 10:39 BST | Companies, News
An Irish company has begun paying its employees’ salaries in bitcoin.
Dublin-based electronic repairs firm GSM Solutions, which hosts Ireland’s first bitcoin ATM, is now paying five of its employees partly in bitcoin instead of euros.
“We set salaries in euros, so that the euro amount they get each pay period does not fluctuate with the price of bitcoin,” said GSM Solutions’ Managing Director Alan Donohoe in a blogpost.
Although more and more companies are letting their customers pay them in bitcoin, the number of people happy with receiving their salary exclusively in digital currency has remained relatively small.
As you might expect, they tend to be people working in tech jobs, like the employees of Polish web design company El Passion, who were given the choice to be paid in bitcoin last December. The Internet Archive and Coinbase, too, pay some or all of their employees in bitcoin.
But it’s not only tech heads: Tony Vaughn, a small town sheriff from Kentucky, became the first US government employee to be paid in bitcoin.
GSM says it hopes to convert the rest of its employees to bitcoin by the end of the year, which would make it the first company in Ireland to pay all of its employees in the currency.
As well as being a symbolic gesture – nothing says ‘tech savvy’ like ‘we pay our employees in bitcoin’ – the move could help to support the local bitcoin economy by encouraging more spending in the cryptocurrency.
However, paying salaries like this does come with complications for both companies and staff. For companies, extra care needs to be taken to ensure that all the appropriate taxes are accounted for at the correct fiat value, something that BitPay’s Bitcoin Payroll API is designed to make easier.
For staff, fluctuations in the value of bitcoin could mean that your salary gets smaller moments after you receive it, which could explain why GSM is only paying “part” of its employees salaries in digital currency.
CoinDesk has reached out to GSM Solutions for comment and will update when we receive a response.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
Kadhim Shubber (@kadhimshubber) | Published on April 7, 2014 at 10:39 BST | Companies, News
An Irish company has begun paying its employees’ salaries in bitcoin.
Dublin-based electronic repairs firm GSM Solutions, which hosts Ireland’s first bitcoin ATM, is now paying five of its employees partly in bitcoin instead of euros.
“We set salaries in euros, so that the euro amount they get each pay period does not fluctuate with the price of bitcoin,” said GSM Solutions’ Managing Director Alan Donohoe in a blogpost.
Although more and more companies are letting their customers pay them in bitcoin, the number of people happy with receiving their salary exclusively in digital currency has remained relatively small.
As you might expect, they tend to be people working in tech jobs, like the employees of Polish web design company El Passion, who were given the choice to be paid in bitcoin last December. The Internet Archive and Coinbase, too, pay some or all of their employees in bitcoin.
But it’s not only tech heads: Tony Vaughn, a small town sheriff from Kentucky, became the first US government employee to be paid in bitcoin.
GSM says it hopes to convert the rest of its employees to bitcoin by the end of the year, which would make it the first company in Ireland to pay all of its employees in the currency.
As well as being a symbolic gesture – nothing says ‘tech savvy’ like ‘we pay our employees in bitcoin’ – the move could help to support the local bitcoin economy by encouraging more spending in the cryptocurrency.
However, paying salaries like this does come with complications for both companies and staff. For companies, extra care needs to be taken to ensure that all the appropriate taxes are accounted for at the correct fiat value, something that BitPay’s Bitcoin Payroll API is designed to make easier.
For staff, fluctuations in the value of bitcoin could mean that your salary gets smaller moments after you receive it, which could explain why GSM is only paying “part” of its employees salaries in digital currency.
CoinDesk has reached out to GSM Solutions for comment and will update when we receive a response.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
What Is The Carbon Footprint Of A Bitcoin?
Danny Bradbury (@dannybradbury) | Published on April 7, 2014 at 07:22 BST | Analysis, Mining
Just how much carbon dioxide do we produce when we mine a bitcoin? It’s becoming an increasingly important question. After all, it’s great to disrupt an inefficient and sometimes corrupt incumbent economic system, but most of us would rather not do it at the expense of the planet.
The bitcoin network is stuck in a circle that drives up its power usage. People tend to put more computing power on the network so that they can make more more bitcoins. The software underpinning the network reacts by changing a parameter that makes it more difficult to solve the mathematical problem needed to solve a bitcoin block.
Because it’s harder to solve the problem, people add even more computing power, and so on. As this cycle increases, it takes more electricity to mine a bitcoin. The hashing power of the network surpassed the world’s top 500 supercomputers almost a year ago, and things have moved along quite a bit since then.
Some might call this a vicious circle. Nick Gogerty, who conceived a coin for trading solar energy production called solarcoin, calls it the Red Queen problem.
“The Red Queen is originally from Alice in Wonderland. In the Queen’s race everyone runs faster, but you never get ahead,” he says. “The same happens in hashing. All of the participants are co-adapting. You have to keep adapting to keep up.”
Gogerty has been trying to put together a model for calculating the carbon cost of a bitcoin, but he admits that it needs work, and he is asking for volunteer help to improve it.
Other attempts have been made to nail down the cost of the bitcoin network in terms of carbon emissions and/or energy used, but it’s a tricky business, says Guy Lane, founder of sustainability advisory service Sea O2.
Based in Brisbane, Australia, Lane is also the founder of Bitcarbon.org. That site contains his method for tracking bitcoin-based carbon emissions.
There are caveats. “Of course, bitcoin is mined everywhere from data centres, distributed locations, working pools, rigs set up in garages and even on PCs that have been hijacked by bots,” Lane says. This makes it very difficult to ascertain the true carbon cost, because there are so many different types of equipment running the mining software.
Still, it doesn’t stop him trying. His method is based on the premise that miners will spend up to 90% of the cost of a bitcoin on the electricity used to mine it. That electricity cost will naturally vary with the price of a bitcoin.
“In the Queen's race everyone runs faster, but you never get ahead.”
The method assumes that 50% of all the mining takes place in China or the US. It uses the most recent estimates from the International Energy Agency for carbon emissions per Kw of mains power in either country, and averages them. The result is that for every Mw of electricity spent mining bitcoins, 0.65 tons (1300lbs) of CO2 are released into the atmosphere, it says.
The method maps these figures against average electricity prices, to produce an average carbon intensity of 6.98 kg (15.38lbs) of CO2 for every dollar that is spent on electricity used for mining Bitcoin.
Lane last ran this model in December, when bitcoin was priced at $1000, and calculated that the entire bitcoin network was putting out about as much carbon as Cyprus.
Lane believes that the estimates could be lower than the reality. For one thing, it doesn’t account for the fact that miners might be willing to spend more electricity mining a bitcoin than the current value of that coin, in the hope that it may increase.
Mining for answers
Another way to look at carbon output for bitcoin mining is to go and ask a professional miner. If anyone should know how many hashes and therefore how much power it takes to compute a bitcoin, it’s an institutional miner that makes a business of turning electricity into cryptocurrency.
Dave Carlson, founder of Megabigpower, runs a massive bitcoin mining datacentre in Washington state.
10 TH/sec (10,000 GH/sec) make 1 bitcoin per day at the current difficulty, he says. His hardware uses one watt per GH/sec, meaning that it takes 10,000 watts (10Kw) to run 10Th of equipment.
He runs that 10Kw of equipment for a whole day to mine a bitcoin, which means that he spends 240Kw/h. That’s 24% of a Mw/h.
Remember that according to the IEA data, 1 Mw/h of mains electricity produces 1300lb of electricity. Based on Carlson’s figures, that means that the energy he’s using would release 24% of that, or 312lbs, of carbon dioxide into the air per coin.
According to the EIA, that’s about the same as burning 15.9 gallons of gasoline, without ethanol.
That would be a lot of carbon for Carlson to churn out, if his electricity was produced by fossil fuels – but it isn’t.
“We are 100% hydroelectric,” he says, adding that he hopes to announce the largest solar/wind powered mine later this year. “I am also looking at re-investment in wind power generation (mostly as a hedge against power prices rising). We are very aware of our carbon footprint and the likelihood that it will increase.”
He isn’t the only one. Over in Sweden, ASIC mining manufacturer KnCMiner uses a co-hosting facility. The electrons it runs on also have a distinctly green hue.
“What I can say real quick is that our data centre is run on hydropower. So we are about as green as they get,” says co-founder Sam Cole.
So, a lot of bitcoins are being produced with green energy. But if you are burning fossil fuels for your bitcoins, then using just over a sixth of a ton of carbon for a single bitcoin isn’t good, given that the network is churning out 150 of them per hour.
It’s important to put this in perspective, though, by understanding what this is relative to, and what we’re getting for this carbon throughput. That’s what we’ll be looking at tomorrow, in the second article of this three-part series.
Danny Bradbury (@dannybradbury) | Published on April 7, 2014 at 07:22 BST | Analysis, Mining
Just how much carbon dioxide do we produce when we mine a bitcoin? It’s becoming an increasingly important question. After all, it’s great to disrupt an inefficient and sometimes corrupt incumbent economic system, but most of us would rather not do it at the expense of the planet.
The bitcoin network is stuck in a circle that drives up its power usage. People tend to put more computing power on the network so that they can make more more bitcoins. The software underpinning the network reacts by changing a parameter that makes it more difficult to solve the mathematical problem needed to solve a bitcoin block.
Because it’s harder to solve the problem, people add even more computing power, and so on. As this cycle increases, it takes more electricity to mine a bitcoin. The hashing power of the network surpassed the world’s top 500 supercomputers almost a year ago, and things have moved along quite a bit since then.
Some might call this a vicious circle. Nick Gogerty, who conceived a coin for trading solar energy production called solarcoin, calls it the Red Queen problem.
“The Red Queen is originally from Alice in Wonderland. In the Queen’s race everyone runs faster, but you never get ahead,” he says. “The same happens in hashing. All of the participants are co-adapting. You have to keep adapting to keep up.”
Gogerty has been trying to put together a model for calculating the carbon cost of a bitcoin, but he admits that it needs work, and he is asking for volunteer help to improve it.
Other attempts have been made to nail down the cost of the bitcoin network in terms of carbon emissions and/or energy used, but it’s a tricky business, says Guy Lane, founder of sustainability advisory service Sea O2.
Based in Brisbane, Australia, Lane is also the founder of Bitcarbon.org. That site contains his method for tracking bitcoin-based carbon emissions.
There are caveats. “Of course, bitcoin is mined everywhere from data centres, distributed locations, working pools, rigs set up in garages and even on PCs that have been hijacked by bots,” Lane says. This makes it very difficult to ascertain the true carbon cost, because there are so many different types of equipment running the mining software.
Still, it doesn’t stop him trying. His method is based on the premise that miners will spend up to 90% of the cost of a bitcoin on the electricity used to mine it. That electricity cost will naturally vary with the price of a bitcoin.
“In the Queen's race everyone runs faster, but you never get ahead.”
The method assumes that 50% of all the mining takes place in China or the US. It uses the most recent estimates from the International Energy Agency for carbon emissions per Kw of mains power in either country, and averages them. The result is that for every Mw of electricity spent mining bitcoins, 0.65 tons (1300lbs) of CO2 are released into the atmosphere, it says.
The method maps these figures against average electricity prices, to produce an average carbon intensity of 6.98 kg (15.38lbs) of CO2 for every dollar that is spent on electricity used for mining Bitcoin.
Lane last ran this model in December, when bitcoin was priced at $1000, and calculated that the entire bitcoin network was putting out about as much carbon as Cyprus.
Lane believes that the estimates could be lower than the reality. For one thing, it doesn’t account for the fact that miners might be willing to spend more electricity mining a bitcoin than the current value of that coin, in the hope that it may increase.
Mining for answers
Another way to look at carbon output for bitcoin mining is to go and ask a professional miner. If anyone should know how many hashes and therefore how much power it takes to compute a bitcoin, it’s an institutional miner that makes a business of turning electricity into cryptocurrency.
Dave Carlson, founder of Megabigpower, runs a massive bitcoin mining datacentre in Washington state.
10 TH/sec (10,000 GH/sec) make 1 bitcoin per day at the current difficulty, he says. His hardware uses one watt per GH/sec, meaning that it takes 10,000 watts (10Kw) to run 10Th of equipment.
He runs that 10Kw of equipment for a whole day to mine a bitcoin, which means that he spends 240Kw/h. That’s 24% of a Mw/h.
Remember that according to the IEA data, 1 Mw/h of mains electricity produces 1300lb of electricity. Based on Carlson’s figures, that means that the energy he’s using would release 24% of that, or 312lbs, of carbon dioxide into the air per coin.
According to the EIA, that’s about the same as burning 15.9 gallons of gasoline, without ethanol.
That would be a lot of carbon for Carlson to churn out, if his electricity was produced by fossil fuels – but it isn’t.
“We are 100% hydroelectric,” he says, adding that he hopes to announce the largest solar/wind powered mine later this year. “I am also looking at re-investment in wind power generation (mostly as a hedge against power prices rising). We are very aware of our carbon footprint and the likelihood that it will increase.”
He isn’t the only one. Over in Sweden, ASIC mining manufacturer KnCMiner uses a co-hosting facility. The electrons it runs on also have a distinctly green hue.
“What I can say real quick is that our data centre is run on hydropower. So we are about as green as they get,” says co-founder Sam Cole.
So, a lot of bitcoins are being produced with green energy. But if you are burning fossil fuels for your bitcoins, then using just over a sixth of a ton of carbon for a single bitcoin isn’t good, given that the network is churning out 150 of them per hour.
It’s important to put this in perspective, though, by understanding what this is relative to, and what we’re getting for this carbon throughput. That’s what we’ll be looking at tomorrow, in the second article of this three-part series.
Mark T Williams on the Flaws and Opportunities of Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on April 7, 2014 at 04:29 BST | Analysis, Lifestyle, News
Mark T Williams isn’t shy when mentioning his “steed” – the unassuming white bicycle parked in front of the Noodle Street cafe in Boston, Massachusetts, shining in the sun near some melting remnants of the winter’s snow.
He diverts attention to it: wanting me to know that it’s a choice model; that it would be complemented should the right person stop eating their pad thai, look through the smudgy window above our corner table and notice it. He goes on about it, telling me it’s just one of his bikes, that the others are built for snow, for harsh conditions.
If it’s his way of directing questions away from himself, it isn’t exactly effective. You can surmise a lot about a person, particularly a capital markets professor, from the temperatures they’re willing to suffer as they bike through traffic-laden streets.
As soon as this question arises, though, a waitress arrives and Williams is suggesting the pineapple fried rice, donning an impish grin. It would be the first thing you’d notice about him, this air of general amusement, if he’s wasn’t wearing a full lycra biking outfit, complete with the biking shoes. Distracted, I order the fried rice.
In hindsight, I shouldn’t have been surprised by Williams’ physical presence. The Boston University faculty member and published author is known for invoking strong reactions. He is, after all, the bane of bitcoin message boards, the reigning king of bitcoin bad-mouthing, the most boastful of all of bitcoin’s blustering haters.
bike
For the uninitiated, Williams rose to prominence around the time of the New York Department of Financial Services hearings on virtual currencies in January. He was a late addition, not even on the original schedule.
If his attendance didn’t turn heads, his statements did, when he notably claimed bitcoin to be tremendously overvalued, and predicted it would crash to the single digits in value this year.
The backlash was swift, and TV networks and news outlets ate it up, rushing his comments to print.
Entire reddit threads were dedicated to dissecting his subsequent articles, and calling him out on his blasphemous predictions.
It’s clear what Williams adds to the conversation: he’s the one needling the balloon. What’s less clear is what’s in this for Williams, what does he get out of playing with the needle?
Pete Rizzo: So, I think we were on the subject of you being a hater …
Mark T Williams: In general, I think it’s easiest to put people in boxes, saying someone’s pro and someone’s con, or someone’s a hater and someone’s not.
Markets don’t function well when there isn’t good information. I always felt that bitcoin had the upper hand, and that the markets weren’t transparent. I think regulation creates that transparency. I always felt consumers were disadvantaged. I don’t think I’m a hater, I think I’m an advocate for consumers who want to buy virtual currencies.
In my hearing, I warned about a lot of unaddressed risks and some of those are coming true.
If you read my testimony, I spent a lot of time talking about the exchanges, and what does Mt. Gox do? Blows up. So that’s it – I’m not a hater.
“I think I see virtual currencies as something of the future.”
Rizzo: Well, Warren Buffett seems to agree with you.
Williams: Yeah, his number two guy, Charlie Munger, he was asked about bitcoin. He said it’s “rat poison“. I went on TV, or Fox or Bloomberg; I said it’s not rat poison, that’s not fair.
I think people when they buy into bitcoin, they think they’re buying into a movement. It’s emotional, right? Not only is it a physical investment, but an emotional investment, and I think that’s what I’ve spurred a lot of resentment about.
People just look at me, and they say “Why doesn’t this guy get it?”
Rizzo: Do you read the comments?
Williams: Sure, some of them are ridiculous. I get people who send me emails.
If you’re a smart investor, you want to look at those who are in your camp, but also those with dissenting views, sometimes you can learn a lot from the counter argument.
Rizzo: So, is your goal to make bitcoin better?
Williams: I think I see virtual currencies as something of the future.
Rizzo: Just not good right now?
Williams: I think there are a lot of design flaws, I wrote a piece for Business Insider, and I said that bitcoin’s DNA is flawed. I’m not talking about the block chain. I describe bitcoin as the locomotive and then there’s the payment system itself. The payment system is the rails. What I think we’ve seen here is that we were told that the infrastructure was strong through January, and Mt. Gox showed us it was weak.
Rizzo: It seems like they were using their own implementation of the protocol.
Williams: Infrastructure is much wider. The infrastructure is not just the peer-to-peer, the infrastructure is all those people that have bolted on to the exchange. What I’m trying to articulate is that the highway itself today has a lot of third-parties.
The system can only be as strong as the weakest link. Mt. Gox was weak …
Mt.-Gox-bitcoin-Mark-Karpeles1
Rizzo: So, let’s say you’re Mark Karpeles and you’re running a trading card exchange, and, over the course of a year, your firm becomes a multi-billion-dollar company, can you really blame the guy for not implementing enterprise-grade consumer protections?
Williams: He should have. He should’ve cared about his customers. It was a black box, and it will come out – he did a lot of fraudulent stuff, because he had control of the information. As a consumer, when you bought, he not only got a fee for the transaction, but he got to see the transaction history throughout the day.
I’m sure he cooked that, I’m sure he also set the price for his exchange. I did a lot of analytical studies of that exchange, and it was always 8% to 10% higher than other exchanges.
Why is that? If he was having financial problems, by putting the price higher on his exchange, he’d encourage more people to come.
Rizzo: It seems that by limiting the number of people who could leave, more people stayed in, and that the price became higher, so people took advantage of that.
Williams: Well, if you run an exchange, and you can keep on moving the price up, then you’re encouraging more business. I call him a boiler-room broker. If you house that broker function, you’re not an exchange.
Coinbase has three businesses it’s doing right now, and one of its functions is a conflict of interest. They’re trying to reduce price risk for people like Overstock, yet they’re trying to be an exchange on the other side.
Rizzo: There’s a lot of opportunity in the space right now.
Williams: Yeah, but there’s conflict. I think you have to have controls in place to make sure consumers can’t be taken advantage of.
Rizzo: So, if you had a chance to redesign the system, what would you do?
Williams: I’ll leave it to the computer geniuses, but it needs to be regulated. State banking examiners are going to regulate it. You’re going to have a national financial regulatory body, you’re just going to have standards and that’s not a bad thing.
This conversation has been edited for length and clarity.
Pete Rizzo (@pete_rizzo_) | Published on April 7, 2014 at 04:29 BST | Analysis, Lifestyle, News
Mark T Williams isn’t shy when mentioning his “steed” – the unassuming white bicycle parked in front of the Noodle Street cafe in Boston, Massachusetts, shining in the sun near some melting remnants of the winter’s snow.
He diverts attention to it: wanting me to know that it’s a choice model; that it would be complemented should the right person stop eating their pad thai, look through the smudgy window above our corner table and notice it. He goes on about it, telling me it’s just one of his bikes, that the others are built for snow, for harsh conditions.
If it’s his way of directing questions away from himself, it isn’t exactly effective. You can surmise a lot about a person, particularly a capital markets professor, from the temperatures they’re willing to suffer as they bike through traffic-laden streets.
As soon as this question arises, though, a waitress arrives and Williams is suggesting the pineapple fried rice, donning an impish grin. It would be the first thing you’d notice about him, this air of general amusement, if he’s wasn’t wearing a full lycra biking outfit, complete with the biking shoes. Distracted, I order the fried rice.
In hindsight, I shouldn’t have been surprised by Williams’ physical presence. The Boston University faculty member and published author is known for invoking strong reactions. He is, after all, the bane of bitcoin message boards, the reigning king of bitcoin bad-mouthing, the most boastful of all of bitcoin’s blustering haters.
bike
For the uninitiated, Williams rose to prominence around the time of the New York Department of Financial Services hearings on virtual currencies in January. He was a late addition, not even on the original schedule.
If his attendance didn’t turn heads, his statements did, when he notably claimed bitcoin to be tremendously overvalued, and predicted it would crash to the single digits in value this year.
The backlash was swift, and TV networks and news outlets ate it up, rushing his comments to print.
Entire reddit threads were dedicated to dissecting his subsequent articles, and calling him out on his blasphemous predictions.
It’s clear what Williams adds to the conversation: he’s the one needling the balloon. What’s less clear is what’s in this for Williams, what does he get out of playing with the needle?
Pete Rizzo: So, I think we were on the subject of you being a hater …
Mark T Williams: In general, I think it’s easiest to put people in boxes, saying someone’s pro and someone’s con, or someone’s a hater and someone’s not.
Markets don’t function well when there isn’t good information. I always felt that bitcoin had the upper hand, and that the markets weren’t transparent. I think regulation creates that transparency. I always felt consumers were disadvantaged. I don’t think I’m a hater, I think I’m an advocate for consumers who want to buy virtual currencies.
In my hearing, I warned about a lot of unaddressed risks and some of those are coming true.
If you read my testimony, I spent a lot of time talking about the exchanges, and what does Mt. Gox do? Blows up. So that’s it – I’m not a hater.
“I think I see virtual currencies as something of the future.”
Rizzo: Well, Warren Buffett seems to agree with you.
Williams: Yeah, his number two guy, Charlie Munger, he was asked about bitcoin. He said it’s “rat poison“. I went on TV, or Fox or Bloomberg; I said it’s not rat poison, that’s not fair.
I think people when they buy into bitcoin, they think they’re buying into a movement. It’s emotional, right? Not only is it a physical investment, but an emotional investment, and I think that’s what I’ve spurred a lot of resentment about.
People just look at me, and they say “Why doesn’t this guy get it?”
Rizzo: Do you read the comments?
Williams: Sure, some of them are ridiculous. I get people who send me emails.
If you’re a smart investor, you want to look at those who are in your camp, but also those with dissenting views, sometimes you can learn a lot from the counter argument.
Rizzo: So, is your goal to make bitcoin better?
Williams: I think I see virtual currencies as something of the future.
Rizzo: Just not good right now?
Williams: I think there are a lot of design flaws, I wrote a piece for Business Insider, and I said that bitcoin’s DNA is flawed. I’m not talking about the block chain. I describe bitcoin as the locomotive and then there’s the payment system itself. The payment system is the rails. What I think we’ve seen here is that we were told that the infrastructure was strong through January, and Mt. Gox showed us it was weak.
Rizzo: It seems like they were using their own implementation of the protocol.
Williams: Infrastructure is much wider. The infrastructure is not just the peer-to-peer, the infrastructure is all those people that have bolted on to the exchange. What I’m trying to articulate is that the highway itself today has a lot of third-parties.
The system can only be as strong as the weakest link. Mt. Gox was weak …
Mt.-Gox-bitcoin-Mark-Karpeles1
Rizzo: So, let’s say you’re Mark Karpeles and you’re running a trading card exchange, and, over the course of a year, your firm becomes a multi-billion-dollar company, can you really blame the guy for not implementing enterprise-grade consumer protections?
Williams: He should have. He should’ve cared about his customers. It was a black box, and it will come out – he did a lot of fraudulent stuff, because he had control of the information. As a consumer, when you bought, he not only got a fee for the transaction, but he got to see the transaction history throughout the day.
I’m sure he cooked that, I’m sure he also set the price for his exchange. I did a lot of analytical studies of that exchange, and it was always 8% to 10% higher than other exchanges.
Why is that? If he was having financial problems, by putting the price higher on his exchange, he’d encourage more people to come.
Rizzo: It seems that by limiting the number of people who could leave, more people stayed in, and that the price became higher, so people took advantage of that.
Williams: Well, if you run an exchange, and you can keep on moving the price up, then you’re encouraging more business. I call him a boiler-room broker. If you house that broker function, you’re not an exchange.
Coinbase has three businesses it’s doing right now, and one of its functions is a conflict of interest. They’re trying to reduce price risk for people like Overstock, yet they’re trying to be an exchange on the other side.
Rizzo: There’s a lot of opportunity in the space right now.
Williams: Yeah, but there’s conflict. I think you have to have controls in place to make sure consumers can’t be taken advantage of.
Rizzo: So, if you had a chance to redesign the system, what would you do?
Williams: I’ll leave it to the computer geniuses, but it needs to be regulated. State banking examiners are going to regulate it. You’re going to have a national financial regulatory body, you’re just going to have standards and that’s not a bad thing.
This conversation has been edited for length and clarity.
change the name of this topic to ''copy pasting coindesk news'' 
Heh yeah i am sorry was supposed to be multiple sources , but they cover all news, only other that i can do is http://www.cryptocoinsnews.com/ and i will add them soon, now im busy with my website.
change the name of this topic to ''copy pasting coindesk news''
The US Tax Man Speaks For The First, But Not Last Time
Brian Klein (@http://www.twitter.com/brianeklein) | Published on April 6, 2014 at 14:25 BST | Law, News, Regulation, US & Canada
Brian Klein is partner at the litigation boutique Baker Marquart LLP and chair of the Bitcoin Foundation’s legal advocacy committee.
Klein has co-authored this piece with Jay Weill, a partner at Sideman & Bancroft in San Francisco representing people and entities in both civil and criminal matters involving the IRS. Weill was the former Chief of the Tax Division at the US Attorney’s Office in San Francisco.
__________________________________________________________
Death and taxes are the two certainties of life, so the old saying goes. On 25th March, three weeks before the US 15th April tax filing deadline, the US Internal Revenue Service (IRS) finally issued guidance regarding the taxation of bitcoins and other digital currencies in what the IRS, in typical IRS-speak, calls Notice 2014-21.
One could almost have believed that the IRS had forgotten about bitcoins and other digital currencies. But really, everyone should have seen this day was coming. Indeed, it was long overdue.
The IRS could have treated digital currency as either currency or property. It chose to treat it as property, imposing the general tax principles relevant to property transactions on those of digital currency. This means that digital currencies will be taxed as ordinary income or as assets subject to capital gains taxes, depending on the circumstances. The choice has far-reaching tax implications that will affect anyone who uses digital currency.
In the notice, the IRS co-opted FinCEN’s definition of digital currency:
“Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.”
It goes on:
“The sale or exchange of convertible digital currency, or the use of convertible digital currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.”
This is very understated. The tax consequences are far-reaching and depend on how one uses digital currencies. The following provides a thumbnail sketch of certain tax consequences for US taxpayers.
Employers and employees
Employee wages in digital currency are subject to federal and state income tax withholding, and by law should be reflected on both employers’ and employees’ tax returns. Such payments are required to be reported to the IRS on your business and payroll tax returns and must further be reflected on IRS Forms W-2 issued to each employee and filed with the IRS. In turn, the employee must report to the IRS and state tax authorities the wages he or she receives in digital currency on his or her personal tax returns.
For each, the reported amounts – the wages reported paid or received and the payroll taxes withheld – will be calculated using the fair market value of the digital currency in US dollars on the date paid or received.
Independent contractors
Businesses paying independent contractors with digital currency must report amounts on Form 1099 – the document used to report other forms of income than wages or salaries – and supply the forms to tax authorities and their independent contractors.
Like employees, independent contractors are taxed in the same manner as if the amounts were received in US dollars. They must report amounts received as income on their tax returns and pay self-employment tax.
Investors
The IRS’ treatment of digital currency as property is a boon to taxpayers holding it as a long-term investment – that is, holding it for more than a year. This is so because when investing in or undergoing transactions in foreign currency, the gains are taxed at the ordinary income tax rate; whereas with digital currency treated as property, the taxpayer can benefit from the lower capital gains tax rate.
Moreover, like any other commodity, if the digital currency loses value instead of making gains then the taxpayer can claim a capital loss, which would help lessen the tax bill. The character of gain or loss generally depends on whether the digital currency is a capital asset in the hands of the taxpayer.
According to the IRS, if the taxpayer holds digital currency as capital – such as stocks or bonds or other investment property – gains or losses are realized as capital gains or losses. But where such currency is held as inventory or other property mainly for sale in a trade or business, then ordinary gains or losses are generally incurred.
Miners
Taxpayers who obtain digital currency through mining must include the fair market value of the digital currency, as of the date of receipt, when reporting their gross income on tax returns.
This creates an enormous task for frequent miners who have to go back and see what the values of the bitcoins were on the dates they were mined. If the mining activities make up a trade or business, and the miner is not an employee, then the net earnings resulting from the activities constitute self-employment income that’s subject to self-employment tax.
Exchanges
When an exchange sells digital currency to a customer as a part of a trade or business, its gross income will equal the value for which the digital currency was sold.
Catch-all for payors
Any disposition of digital currency is a taxable event, including the use of digital currency to acquire another asset, to pay for services, in retail transactions and investments where the merchandise received or investment has a higher value than the payor’s basis in the digital currency.
And, payments made using digital currency are subject to the same tax reporting and backup withholding as other payments made in property.
The character nature of the tax
The IRS notice left many unanswered questions as well.
For example, any person or business that receives more than $10,000 in one transaction or a series of transactions must identify the person involved to the IRS via Form 8300. Since digital currencies, like bitcoin, are not recognized as currencies by the IRS, does a car dealer have to report an automobile purchased with bitcoins?
US individual and business taxpayers alike should consult with their tax advisors about the implications of their particular digital currency transactions. They will now have to track their digital currency purchases in order to correctly prepare and file their 2013 tax returns due on 15th April, as well as potentially amend 2012 and earlier tax returns.
The IRS notice also invites comment from the public. Undoubtedly, the IRS will receive an extensive amount of feedback. In light of the path the IRS chose, one that requires extensive tax compliance efforts, the IRS should expect much of it to be extremely negative – and rightfully so.
Brian Klein (@http://www.twitter.com/brianeklein) | Published on April 6, 2014 at 14:25 BST | Law, News, Regulation, US & Canada
Brian Klein is partner at the litigation boutique Baker Marquart LLP and chair of the Bitcoin Foundation’s legal advocacy committee.
Klein has co-authored this piece with Jay Weill, a partner at Sideman & Bancroft in San Francisco representing people and entities in both civil and criminal matters involving the IRS. Weill was the former Chief of the Tax Division at the US Attorney’s Office in San Francisco.
__________________________________________________________
Death and taxes are the two certainties of life, so the old saying goes. On 25th March, three weeks before the US 15th April tax filing deadline, the US Internal Revenue Service (IRS) finally issued guidance regarding the taxation of bitcoins and other digital currencies in what the IRS, in typical IRS-speak, calls Notice 2014-21.
One could almost have believed that the IRS had forgotten about bitcoins and other digital currencies. But really, everyone should have seen this day was coming. Indeed, it was long overdue.
The IRS could have treated digital currency as either currency or property. It chose to treat it as property, imposing the general tax principles relevant to property transactions on those of digital currency. This means that digital currencies will be taxed as ordinary income or as assets subject to capital gains taxes, depending on the circumstances. The choice has far-reaching tax implications that will affect anyone who uses digital currency.
In the notice, the IRS co-opted FinCEN’s definition of digital currency:
“Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.”
It goes on:
“The sale or exchange of convertible digital currency, or the use of convertible digital currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.”
This is very understated. The tax consequences are far-reaching and depend on how one uses digital currencies. The following provides a thumbnail sketch of certain tax consequences for US taxpayers.
Employers and employees
Employee wages in digital currency are subject to federal and state income tax withholding, and by law should be reflected on both employers’ and employees’ tax returns. Such payments are required to be reported to the IRS on your business and payroll tax returns and must further be reflected on IRS Forms W-2 issued to each employee and filed with the IRS. In turn, the employee must report to the IRS and state tax authorities the wages he or she receives in digital currency on his or her personal tax returns.
For each, the reported amounts – the wages reported paid or received and the payroll taxes withheld – will be calculated using the fair market value of the digital currency in US dollars on the date paid or received.
Independent contractors
Businesses paying independent contractors with digital currency must report amounts on Form 1099 – the document used to report other forms of income than wages or salaries – and supply the forms to tax authorities and their independent contractors.
Like employees, independent contractors are taxed in the same manner as if the amounts were received in US dollars. They must report amounts received as income on their tax returns and pay self-employment tax.
Investors
The IRS’ treatment of digital currency as property is a boon to taxpayers holding it as a long-term investment – that is, holding it for more than a year. This is so because when investing in or undergoing transactions in foreign currency, the gains are taxed at the ordinary income tax rate; whereas with digital currency treated as property, the taxpayer can benefit from the lower capital gains tax rate.
Moreover, like any other commodity, if the digital currency loses value instead of making gains then the taxpayer can claim a capital loss, which would help lessen the tax bill. The character of gain or loss generally depends on whether the digital currency is a capital asset in the hands of the taxpayer.
According to the IRS, if the taxpayer holds digital currency as capital – such as stocks or bonds or other investment property – gains or losses are realized as capital gains or losses. But where such currency is held as inventory or other property mainly for sale in a trade or business, then ordinary gains or losses are generally incurred.
Miners
Taxpayers who obtain digital currency through mining must include the fair market value of the digital currency, as of the date of receipt, when reporting their gross income on tax returns.
This creates an enormous task for frequent miners who have to go back and see what the values of the bitcoins were on the dates they were mined. If the mining activities make up a trade or business, and the miner is not an employee, then the net earnings resulting from the activities constitute self-employment income that’s subject to self-employment tax.
Exchanges
When an exchange sells digital currency to a customer as a part of a trade or business, its gross income will equal the value for which the digital currency was sold.
Catch-all for payors
Any disposition of digital currency is a taxable event, including the use of digital currency to acquire another asset, to pay for services, in retail transactions and investments where the merchandise received or investment has a higher value than the payor’s basis in the digital currency.
And, payments made using digital currency are subject to the same tax reporting and backup withholding as other payments made in property.
The character nature of the tax
The IRS notice left many unanswered questions as well.
For example, any person or business that receives more than $10,000 in one transaction or a series of transactions must identify the person involved to the IRS via Form 8300. Since digital currencies, like bitcoin, are not recognized as currencies by the IRS, does a car dealer have to report an automobile purchased with bitcoins?
US individual and business taxpayers alike should consult with their tax advisors about the implications of their particular digital currency transactions. They will now have to track their digital currency purchases in order to correctly prepare and file their 2013 tax returns due on 15th April, as well as potentially amend 2012 and earlier tax returns.
The IRS notice also invites comment from the public. Undoubtedly, the IRS will receive an extensive amount of feedback. In light of the path the IRS chose, one that requires extensive tax compliance efforts, the IRS should expect much of it to be extremely negative – and rightfully so.
Offtopic news: I just launched my new website: www.bitcoinlottery.co.nf
DRAWS EVERY 24h at 20:00h-20:50h CET
Tickets from 0.001 btc to 0.1 btc
Every ticket size is separate game, each game separate draw.
Fair draws using www.random.org and LIVE streaming every draw!
Unlimited entrys!
Live chat on contact page!
Prizes:
1. 60% of prize pool
2. 30% of prize pool
3, 10% of prize pool
Note: We take small 1% to 5% fee.
*If there is 50+ tickets bought more places will get prize.
Rules:
-Live draws every day at 20:00h-20:50h CET
-Unlimited tickets per player (more tickets you buy, bigger chance for win)
-You can participate in every game. Every ticket size is independent game.
-And other amount than specified on ticket page, WILL BE CONSIDERED AS DONATION!
-Don't buy tickets in less than 30 min before draw, so i can post final list on winners page for everybody to check.
-Minimum players/tickets: 10 , if we don't have enough players/tickets in 24h all tickets bought will be transferred into next round.
Link: http://bitcoinlottery.co.nf/
DRAWS EVERY 24h at 20:00h-20:50h CET
Tickets from 0.001 btc to 0.1 btc
Every ticket size is separate game, each game separate draw.
Fair draws using www.random.org and LIVE streaming every draw!
Unlimited entrys!
Live chat on contact page!
Prizes:
1. 60% of prize pool
2. 30% of prize pool
3, 10% of prize pool
Note: We take small 1% to 5% fee.
*If there is 50+ tickets bought more places will get prize.
Rules:
-Live draws every day at 20:00h-20:50h CET
-Unlimited tickets per player (more tickets you buy, bigger chance for win)
-You can participate in every game. Every ticket size is independent game.
-And other amount than specified on ticket page, WILL BE CONSIDERED AS DONATION!
-Don't buy tickets in less than 30 min before draw, so i can post final list on winners page for everybody to check.
-Minimum players/tickets: 10 , if we don't have enough players/tickets in 24h all tickets bought will be transferred into next round.
Link: http://bitcoinlottery.co.nf/
European Bitcoin ATM Maker PayMaQ to Market €1,000 Models
Stan Higgins | Published on April 6, 2014 at 15:15 BST | Bitcoin ATM, News, Technology
A new line of low-cost bitcoin ATMs has been launched by PayMaQ in major European markets.
PayMaQ is pitching its PayBitcoin ATM as a more affordable solution for individuals and small businesses interested in hosting a digital currency exchange point. One unit costs just under €1000 after VAT and shipping, offering a retail cost savings when compared to $5,000 Lamassu units and $20,000 Robocoin machines.
The PayBitcoin ATM is PayMaQ’s second model, following in the footsteps of a first version that CEO Luis Borrell acknowledged suffered from limitations, including the need for skilled maintenance on a regular basis.
The company has since turned to the development of a cheaper option that it believes is easier for business owners to maintain.
Speaking to CoinDesk, Borrell explained:
“Nowadays, there are new people who want bitcoins and they need easy and nearby access to bitcoins. PayBitcoin … is designed for any person who has a store, gym or similar business in which [they] can offer [it] to their customers buying bitcoins at the moment.”
The company is funding the project via Indiegogo.
Ease of use
The Bitcoin ATM business model seeks to solve a major barrier for consumers that want to start using bitcoins: acquisition.
As such, Borrell put the emphasis on the ease-of-use of PayMaQ’s models:
“This model of ATM can be acquired and operated by any person easily. Logically it has some limitations, but we think it is a good product to extend bitcoin around the world.”
Borrell sees the need for a simple way to get bitcoins as part of the process of broader market adoption:
“Traditional banks charge 1-3% fees of every transaction with credit cards. People will be able to pay with bitcoins in any store, restaurant and in any business in general with no commissions or fees.”
First, however, customers need an easy method of exchange. And since Internet bitcoin exchanges aren’t yet able to provide this service, Borrell believes his units will have a powerful value proposition.
Competition
The market for bitcoin ATMs is seeing more competition, including the launch of the Lamassu ATM earlier this year. Competition is also heating up in the UK and Southeast Asia, and with its low price point, PayMaQ could become competitive in the global market.
For Borrell, this means he also has to consider how his company will compete not just now, but down the road:
“We have plans for the near future. We are now developing new solutions for stores, in a way that they will be able to accept payments in bitcoins. We are continuously developing new products.”
Part of this process includes the development of security measures for the ATMs. Borrell said that security is important but pointed out that the same risks face consumers who use other currencies as well.
“For PayMaQ, security is very important. But we think that the bitcoin market is not different from the traditional market. We don’t see an extra problem in security – you have to implement security updates continuously. It is a part of our work.”
Rising interest in Bitcoin ATMs
Barcelona-based PayMaQ opened its doors in 2005. According to co-founder and Borrell, it originally sold payment systems. After hearing from customers that wanted to deploy ATMs, PayMaQ moved toward developing bitcoin ATMs.
A bitcoin ATM remotely syncs with an online exchange, allowing users to conduct fiat-to-bitcoin or bitcoin-to-fiat transactions and withdrawals without the hassle of creating a personal account and making an in-market purchase and with different levels of know your customer (KYC) and anti-money laundering (AML) compliance.
PayMaQ’s models are one directional and offer little in the way of compliance features, meaning operators who are able to cut costs with its units will have additional considerations to make to ensure their lawful use.
Stan Higgins | Published on April 6, 2014 at 15:15 BST | Bitcoin ATM, News, Technology
A new line of low-cost bitcoin ATMs has been launched by PayMaQ in major European markets.
PayMaQ is pitching its PayBitcoin ATM as a more affordable solution for individuals and small businesses interested in hosting a digital currency exchange point. One unit costs just under €1000 after VAT and shipping, offering a retail cost savings when compared to $5,000 Lamassu units and $20,000 Robocoin machines.
The PayBitcoin ATM is PayMaQ’s second model, following in the footsteps of a first version that CEO Luis Borrell acknowledged suffered from limitations, including the need for skilled maintenance on a regular basis.
The company has since turned to the development of a cheaper option that it believes is easier for business owners to maintain.
Speaking to CoinDesk, Borrell explained:
“Nowadays, there are new people who want bitcoins and they need easy and nearby access to bitcoins. PayBitcoin … is designed for any person who has a store, gym or similar business in which [they] can offer [it] to their customers buying bitcoins at the moment.”
The company is funding the project via Indiegogo.
Ease of use
The Bitcoin ATM business model seeks to solve a major barrier for consumers that want to start using bitcoins: acquisition.
As such, Borrell put the emphasis on the ease-of-use of PayMaQ’s models:
“This model of ATM can be acquired and operated by any person easily. Logically it has some limitations, but we think it is a good product to extend bitcoin around the world.”
Borrell sees the need for a simple way to get bitcoins as part of the process of broader market adoption:
“Traditional banks charge 1-3% fees of every transaction with credit cards. People will be able to pay with bitcoins in any store, restaurant and in any business in general with no commissions or fees.”
First, however, customers need an easy method of exchange. And since Internet bitcoin exchanges aren’t yet able to provide this service, Borrell believes his units will have a powerful value proposition.
Competition
The market for bitcoin ATMs is seeing more competition, including the launch of the Lamassu ATM earlier this year. Competition is also heating up in the UK and Southeast Asia, and with its low price point, PayMaQ could become competitive in the global market.
For Borrell, this means he also has to consider how his company will compete not just now, but down the road:
“We have plans for the near future. We are now developing new solutions for stores, in a way that they will be able to accept payments in bitcoins. We are continuously developing new products.”
Part of this process includes the development of security measures for the ATMs. Borrell said that security is important but pointed out that the same risks face consumers who use other currencies as well.
“For PayMaQ, security is very important. But we think that the bitcoin market is not different from the traditional market. We don’t see an extra problem in security – you have to implement security updates continuously. It is a part of our work.”
Rising interest in Bitcoin ATMs
Barcelona-based PayMaQ opened its doors in 2005. According to co-founder and Borrell, it originally sold payment systems. After hearing from customers that wanted to deploy ATMs, PayMaQ moved toward developing bitcoin ATMs.
A bitcoin ATM remotely syncs with an online exchange, allowing users to conduct fiat-to-bitcoin or bitcoin-to-fiat transactions and withdrawals without the hassle of creating a personal account and making an in-market purchase and with different levels of know your customer (KYC) and anti-money laundering (AML) compliance.
PayMaQ’s models are one directional and offer little in the way of compliance features, meaning operators who are able to cut costs with its units will have additional considerations to make to ensure their lawful use.
Coindesk is a great source for bitcoin news, More of them would be great though.
They basically post all the news only they http://www.cryptocoinsnews.com/ have some different news and don't copy i will be adding them to .
Coindesk is a great source for bitcoin news, More of them would be great though.
Unofficial Apple iOS Store to Allow Bitcoin Wallet Apps
Jon Southurst (@southtopia) | Published on April 5, 2014 at 15:35 BST | Companies, News, Startups, Technology
Note: The activities described in this article involve running software on iOS devices that is experimental and that has not been approved by Apple.
Please use caution and install software only from third-party developers you are sure you trust, especially if your device already has bitcoin wallet, banking, or other sensitive apps installed.
__________________________________________________________
A mobile app development team says it has found a novel workaround to Apple’s bitcoin wallet ban and strict App Store regulations: Its own native app store that allows users to download and install any app they like on an iOS device.
Developer Andrew DeSantis first announced the new store, a product of the Birmingham, Alabama, company Avalonic he co-founded with business partner Tyler Evans, on Twitter and reddit today.
If it works as he claims and his legal advice is correct, it could represent a breakthrough for both iOS and bitcoin users.
Introducing the Bit Store from Avalonic on Vimeo.
Still in beta
At the moment, the independent app store, still an invite-only beta, has a focus on bitcoin solutions and is even called the ‘Bit Store’. It does not require the device to be jailbroken, and the apps available are not web-based, instead using a combination of HTML5 to render app interfaces and back-ends written in C.
The plan is for the store to include all kinds of apps in time, with bitcoin serving as the payment system. The apps themselves will be cross-platform and will function on any mobile platform once a version of the store is released for it.
The Bit Store beta currently has just a few simple apps available, including a bitcoin wallet and a news aggregator/company directory. The ‘Wallet’ app uses the Coinbase API to send and receive bitcoins to any address, with values denominated in BTC or USD.
Avalonic Cross-Platform Bitcoin Wallet from Avalonic on Vimeo.
Cross platform
DeSantis told CoinDesk he came up with the idea for the Bit Store about six months ago, while he was trying to develop an app to run on iOS, Android and Windows Phone. Doing so required expertise in those platforms’ three different programming languages: Objective C, Java, and C#.
“About six months in I found it took a lot of effort to do, and it was unnecessary,” he said in Avalonic’s introductory video.
Reaction to his announcement on reddit was overwhelmingly positive with wishes of good luck and requests for other cryptocurrency apps like litecoin and dogecoin.
Some, however, expressed skepticism that Apple would allow such rampant freedom of choice to continue for very long.
Walled garden
Apple is protective of its closed infrastructure, and could use both engineering and legal means to prevent circumvention, especially if it becomes popular. There’s also the 30% commission Apple receives from all sales on its own App Store, now a substantial revenue stream.
DeSantis wrote that he had actually worked for Apple in the past, learning enough to reverse engineer the system to install unofficial apps using protocols intended for enterprise, but staying within Apple’s legal guidelines.
Originally intending only to develop an independent and cross-platform app platform, he switched his focus to bitcoin after Apple banned wallet apps from its own store.
Said DeSantis:
“I used to work for Apple, was even flown out to the mothership in Cupertino. As a part of training, we learned about all of the iOS protocols. After I quit I had the idea for a multi-platform store and by knowing everything that was legally possible on the iPhone I was able to figure out how to install apps without having to install apps.
It took nine months of work and wasn’t originally intended for bitcoin, but after they removed Blockchain from the App Store it seemed like a perfect fit!”
He added that he hadn’t signed any agreement prohibiting the work he’d done, that it was a new technique no-one had tried before and that his company had been in contact with lawyers for months to discuss possible scenarios.
Possible moves against Bit Store
From plugins that circumvented iTunes copy protection to iOS jailbreak techniques, Apple has previously played cat-and-mouse games with ‘creative’ developers that often ends with the developer moving on to something less frustrating.
It must be said, though, in the case of iTunes DRM it ended with Apple changing its policy by abolishing copy protection in most cases.
DeSantis doesn’t seem particularly concerned about Apple’s technical moves to block the Bit Store either, saying it would be difficult to modify iOS as it exists now to do so. He has back-up plans even if Apples tries:
“Apple can’t prevent our store’s existence because, on iOS, Safari allows applications to be installed to the the home screen. In the event that the implementation we currently have in place is compromised by an update we will modify our code to circumvent the update.
If our seamless implementation is still disabled by such a future update, which while possible isn’t likely to happen in the near future due to the damages this would cause to existing software that has existed since iOS 4, we would revert to an app store that you install with the ‘install to home screen method.
If we can install our store to the home screen, then we can install apps exactly, if not very similar, to how we are installing them now (without having to click ‘install to home screen’). Finally adding one extra step to the app install process will not remove the cloud platform we have created, our bitcoin wallet, the hardware access or the notification features.”
He went on to explain why he regards the Bit Store as legal under Apple’s own rules as they pertain to web applications, which users have always been free to add to their iOS Home Screens.
“Apple’s own documentation states that, ‘A web application is designed to look and behave in a way similar to a native application.’ Although we are taking our implementation a few steps further than the average ‘web application’, in the end we could revert back to such a state and maintain our platform.
Side loading apps on Android are nowhere near as elegant as our iOS install process. This has not stopped third-party app stores from existing on Android and we believe the same will hold true for iOS in the absolute worst case.”
Jon Southurst (@southtopia) | Published on April 5, 2014 at 15:35 BST | Companies, News, Startups, Technology
Note: The activities described in this article involve running software on iOS devices that is experimental and that has not been approved by Apple.
Please use caution and install software only from third-party developers you are sure you trust, especially if your device already has bitcoin wallet, banking, or other sensitive apps installed.
__________________________________________________________
A mobile app development team says it has found a novel workaround to Apple’s bitcoin wallet ban and strict App Store regulations: Its own native app store that allows users to download and install any app they like on an iOS device.
Developer Andrew DeSantis first announced the new store, a product of the Birmingham, Alabama, company Avalonic he co-founded with business partner Tyler Evans, on Twitter and reddit today.
If it works as he claims and his legal advice is correct, it could represent a breakthrough for both iOS and bitcoin users.
Introducing the Bit Store from Avalonic on Vimeo.
Still in beta
At the moment, the independent app store, still an invite-only beta, has a focus on bitcoin solutions and is even called the ‘Bit Store’. It does not require the device to be jailbroken, and the apps available are not web-based, instead using a combination of HTML5 to render app interfaces and back-ends written in C.
The plan is for the store to include all kinds of apps in time, with bitcoin serving as the payment system. The apps themselves will be cross-platform and will function on any mobile platform once a version of the store is released for it.
The Bit Store beta currently has just a few simple apps available, including a bitcoin wallet and a news aggregator/company directory. The ‘Wallet’ app uses the Coinbase API to send and receive bitcoins to any address, with values denominated in BTC or USD.
Avalonic Cross-Platform Bitcoin Wallet from Avalonic on Vimeo.
Cross platform
DeSantis told CoinDesk he came up with the idea for the Bit Store about six months ago, while he was trying to develop an app to run on iOS, Android and Windows Phone. Doing so required expertise in those platforms’ three different programming languages: Objective C, Java, and C#.
“About six months in I found it took a lot of effort to do, and it was unnecessary,” he said in Avalonic’s introductory video.
Reaction to his announcement on reddit was overwhelmingly positive with wishes of good luck and requests for other cryptocurrency apps like litecoin and dogecoin.
Some, however, expressed skepticism that Apple would allow such rampant freedom of choice to continue for very long.
Walled garden
Apple is protective of its closed infrastructure, and could use both engineering and legal means to prevent circumvention, especially if it becomes popular. There’s also the 30% commission Apple receives from all sales on its own App Store, now a substantial revenue stream.
DeSantis wrote that he had actually worked for Apple in the past, learning enough to reverse engineer the system to install unofficial apps using protocols intended for enterprise, but staying within Apple’s legal guidelines.
Originally intending only to develop an independent and cross-platform app platform, he switched his focus to bitcoin after Apple banned wallet apps from its own store.
Said DeSantis:
“I used to work for Apple, was even flown out to the mothership in Cupertino. As a part of training, we learned about all of the iOS protocols. After I quit I had the idea for a multi-platform store and by knowing everything that was legally possible on the iPhone I was able to figure out how to install apps without having to install apps.
It took nine months of work and wasn’t originally intended for bitcoin, but after they removed Blockchain from the App Store it seemed like a perfect fit!”
He added that he hadn’t signed any agreement prohibiting the work he’d done, that it was a new technique no-one had tried before and that his company had been in contact with lawyers for months to discuss possible scenarios.
Possible moves against Bit Store
From plugins that circumvented iTunes copy protection to iOS jailbreak techniques, Apple has previously played cat-and-mouse games with ‘creative’ developers that often ends with the developer moving on to something less frustrating.
It must be said, though, in the case of iTunes DRM it ended with Apple changing its policy by abolishing copy protection in most cases.
DeSantis doesn’t seem particularly concerned about Apple’s technical moves to block the Bit Store either, saying it would be difficult to modify iOS as it exists now to do so. He has back-up plans even if Apples tries:
“Apple can’t prevent our store’s existence because, on iOS, Safari allows applications to be installed to the the home screen. In the event that the implementation we currently have in place is compromised by an update we will modify our code to circumvent the update.
If our seamless implementation is still disabled by such a future update, which while possible isn’t likely to happen in the near future due to the damages this would cause to existing software that has existed since iOS 4, we would revert to an app store that you install with the ‘install to home screen method.
If we can install our store to the home screen, then we can install apps exactly, if not very similar, to how we are installing them now (without having to click ‘install to home screen’). Finally adding one extra step to the app install process will not remove the cloud platform we have created, our bitcoin wallet, the hardware access or the notification features.”
He went on to explain why he regards the Bit Store as legal under Apple’s own rules as they pertain to web applications, which users have always been free to add to their iOS Home Screens.
“Apple’s own documentation states that, ‘A web application is designed to look and behave in a way similar to a native application.’ Although we are taking our implementation a few steps further than the average ‘web application’, in the end we could revert back to such a state and maintain our platform.
Side loading apps on Android are nowhere near as elegant as our iOS install process. This has not stopped third-party app stores from existing on Android and we believe the same will hold true for iOS in the absolute worst case.”
Bitcoin Regulation Roundup: Rumours, Court Cases and Taxing Times
Jason Tyra (@tyracpa) | Published on April 5, 2014 at 12:38 BST | Analysis, Asia, Crime, Europe, Exchanges, Law, News, Regulation, South America, US & Canada
Regulatory attitudes towards cryptocurrencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency. However, it’s not all bad news – as some authorities are taking a much more positive approach.
In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.
USA: Bitcoin is property, says IRS
tax
The US Internal Revenue Service issued a notice in late March that classified bitcoin as property for purposes of taxation, clarified that mined bitcoins are taxable at the time they are received, and specified that bitcoins received in connection with a trade or business or as wages are subject to withholding and/or payment of Medicare or social security taxes.
The reaction among US bitcoiners was mixed. Treatment as a capital asset grants access to preferential capital gains rates for bitcoins held longer than a year and a day, but imposes the burden of tracking basis and gain for every bitcoin received or spent.
This is good news for US taxpayers using bitcoin as a store of wealth, but terrible news for those who might use it as a means of exchange.
The subtleties and implications of the IRS notification are likely to fuel debate among US bitcoin enthusiasts for months to come: for example, the IRS did not specify whether taxpayers exchanging bitcoins for other crypto-currencies would be entitled to defer taxable gain under like-kind exchange rules.
Rejection of non-functional (otherwise known as ‘foreign’) currency treatment by the IRS has also created uncertainty as to the implications, if any, for FinCEN’s designation of bitcoin as a monetary instrument.
Texas
USA: Texas following NY example?
The Texas Department of Banking released a letter this week addressed to “virtual currency companies operating or desiring to operate in Texas” that declared that, “because cryptocurrency is not money under the Money Services Act, receiving it in exchange for a promise to make it available at a later time or different location is not money transmission” in the state.
However, since the Texas Department of Banking is a state-level agency, its declaration has no impact on FinCEN’s federal registration requirements.
Texas has aggressively cultivated a business-friendly climate in recent years, poaching a number of high-profile companies from higher tax and higher regulation states. Austin, Texas is especially well known as a progressive hub for technology companies, including many bitcoin startups.
USA: If bitcoin isn’t money, can it be laundered?
On 1st April, the attorney for Ross Ulbricht, alleged mastermind of the now defunct contraband trading site known as Silk Road, submitted a motion to dismiss some of the charges against his client on the grounds that “bitcoins are not money”, thus obviating the possibility that money-laundering statutes could apply.
Denmark: Yippee, no taxes
tax take 2
After months of delays, Denmark declared last week that bitcoin trades by individuals are exempt from taxation in that country.
The Danish taxing authority based its decision on the novel idea that bitcoins cannot be considered ‘real’ money, essentially rendering bitcoin activity (gains and losses alike) a non-event from a tax perspective. However, bitcoin-related businesses will be subject to normal income tax rules on gains booked in the normal course of business.
At the time of the announcement, Denmark was thought to be the only country in the world that has definitively taken a pass on taxing bitcoin. Early reactions by European bitcoiners were positive, though the wider implications of the announcement have yet to be seen. If bitcoins are not ‘real’, do they still enjoy protection as private property?
palace
Bulgaria: Tax loophole?
Taking the opposite position from Denmark, the Eastern European nation of Bulgaria announced this week that bitcoin trading would be subject to ordinary income and corporate income tax rates, but did not issue regulations requiring gains to be documented or reported, raising the issue of potential money laundering through digital currencies.
In response, one commentator, Bulgarian enthusiast Stamen Gorchev, suggested that the country might join other EU members in looking to European regulators to draft more comprehensive regulation.
Bulgaria’s announcement means that bitcoiners now have the full spectrum of potential tax treatments available to them in western countries, creating potentially lucrative transfer pricing opportunities for companies with the resources to exploit them.
china
China: Rumours of bank crackdown
Bitcoin isn’t really banned in China, or is it? Rumors of an imminent crackdown in China continue to dog bitcoin, as well as altcoins.
Just as much of the appreciation in price during the latter half of 2013 was attributed to wider adoption and investment by the Chinese, possible regulatory action by the Chinese government or central bank have also been blamed for bitcoin’s recent decline.
Though the precise reason for the allegedly imminent crackdown is not known, bitcoin’s fungibility is likely to threaten capital controls to some extent in the nominally Communist state.
Additionally, its network is thought to be highly resistant to the kind of government control and censorship that have long plagued Chinese internet users.
tree
Colombia: Bitcoin ban?
Colombia’s Ministry of Finance, in cooperation with the country’s central bank and Superintendancy of Finance, may ban bitcoin transactions, according to a report by Colombian publication El Tiempo.
Colombia recently joined the growing list of nations that have warned their citizens away from bitcoin, advising citizens that they are not backed by the Colombian central bank.
The government’s objection is unlikely to relate to bitcoin’s novelty, as the South American country is not known for the kind of financial innovation that is likely to be a destabilizing influence on its economy. Rather, the issue is likely to be bitcoin’s potential criminal uses.
Colombian security forces continue to struggle with the twin issues of narco-trafficking and Communist rebels, both of whom may see value in bitcoin as a means of payment for illicit transactions.
However, barring Colombian banks from handling bitcoin-related business is unlikely to have a significant impact on organizations that are essentially international in their conduct of business (narcotics for export and weapons for import).
man
Isle of Man: No licence required
On 26th March, the Isle of Man has announced that its licensure requirements do not apply to bitcoin exchanges operating there.
The Financial Supervision Commission, the Isle of Man’s financial regulator, confirmed in a written statement that bitcoin exchanges are neither investment businesses nor money transmission services as defined by current law.
The island is a self-governing dependency of the United Kingdom, and its citizens are nominally British citizens. Furthermore, it is known as an offshore haven due to its unusually low tax rates, which include a cap on tax payable by individuals and a corporate tax rate of 0%.
Liberal banking and tax rules have made offshore banking a large part of the island’s economy.
Jason Tyra (@tyracpa) | Published on April 5, 2014 at 12:38 BST | Analysis, Asia, Crime, Europe, Exchanges, Law, News, Regulation, South America, US & Canada
Regulatory attitudes towards cryptocurrencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency. However, it’s not all bad news – as some authorities are taking a much more positive approach.
In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.
USA: Bitcoin is property, says IRS
tax
The US Internal Revenue Service issued a notice in late March that classified bitcoin as property for purposes of taxation, clarified that mined bitcoins are taxable at the time they are received, and specified that bitcoins received in connection with a trade or business or as wages are subject to withholding and/or payment of Medicare or social security taxes.
The reaction among US bitcoiners was mixed. Treatment as a capital asset grants access to preferential capital gains rates for bitcoins held longer than a year and a day, but imposes the burden of tracking basis and gain for every bitcoin received or spent.
This is good news for US taxpayers using bitcoin as a store of wealth, but terrible news for those who might use it as a means of exchange.
The subtleties and implications of the IRS notification are likely to fuel debate among US bitcoin enthusiasts for months to come: for example, the IRS did not specify whether taxpayers exchanging bitcoins for other crypto-currencies would be entitled to defer taxable gain under like-kind exchange rules.
Rejection of non-functional (otherwise known as ‘foreign’) currency treatment by the IRS has also created uncertainty as to the implications, if any, for FinCEN’s designation of bitcoin as a monetary instrument.
Texas
USA: Texas following NY example?
The Texas Department of Banking released a letter this week addressed to “virtual currency companies operating or desiring to operate in Texas” that declared that, “because cryptocurrency is not money under the Money Services Act, receiving it in exchange for a promise to make it available at a later time or different location is not money transmission” in the state.
However, since the Texas Department of Banking is a state-level agency, its declaration has no impact on FinCEN’s federal registration requirements.
Texas has aggressively cultivated a business-friendly climate in recent years, poaching a number of high-profile companies from higher tax and higher regulation states. Austin, Texas is especially well known as a progressive hub for technology companies, including many bitcoin startups.
USA: If bitcoin isn’t money, can it be laundered?
On 1st April, the attorney for Ross Ulbricht, alleged mastermind of the now defunct contraband trading site known as Silk Road, submitted a motion to dismiss some of the charges against his client on the grounds that “bitcoins are not money”, thus obviating the possibility that money-laundering statutes could apply.
Denmark: Yippee, no taxes
tax take 2
After months of delays, Denmark declared last week that bitcoin trades by individuals are exempt from taxation in that country.
The Danish taxing authority based its decision on the novel idea that bitcoins cannot be considered ‘real’ money, essentially rendering bitcoin activity (gains and losses alike) a non-event from a tax perspective. However, bitcoin-related businesses will be subject to normal income tax rules on gains booked in the normal course of business.
At the time of the announcement, Denmark was thought to be the only country in the world that has definitively taken a pass on taxing bitcoin. Early reactions by European bitcoiners were positive, though the wider implications of the announcement have yet to be seen. If bitcoins are not ‘real’, do they still enjoy protection as private property?
palace
Bulgaria: Tax loophole?
Taking the opposite position from Denmark, the Eastern European nation of Bulgaria announced this week that bitcoin trading would be subject to ordinary income and corporate income tax rates, but did not issue regulations requiring gains to be documented or reported, raising the issue of potential money laundering through digital currencies.
In response, one commentator, Bulgarian enthusiast Stamen Gorchev, suggested that the country might join other EU members in looking to European regulators to draft more comprehensive regulation.
Bulgaria’s announcement means that bitcoiners now have the full spectrum of potential tax treatments available to them in western countries, creating potentially lucrative transfer pricing opportunities for companies with the resources to exploit them.
china
China: Rumours of bank crackdown
Bitcoin isn’t really banned in China, or is it? Rumors of an imminent crackdown in China continue to dog bitcoin, as well as altcoins.
Just as much of the appreciation in price during the latter half of 2013 was attributed to wider adoption and investment by the Chinese, possible regulatory action by the Chinese government or central bank have also been blamed for bitcoin’s recent decline.
Though the precise reason for the allegedly imminent crackdown is not known, bitcoin’s fungibility is likely to threaten capital controls to some extent in the nominally Communist state.
Additionally, its network is thought to be highly resistant to the kind of government control and censorship that have long plagued Chinese internet users.
tree
Colombia: Bitcoin ban?
Colombia’s Ministry of Finance, in cooperation with the country’s central bank and Superintendancy of Finance, may ban bitcoin transactions, according to a report by Colombian publication El Tiempo.
Colombia recently joined the growing list of nations that have warned their citizens away from bitcoin, advising citizens that they are not backed by the Colombian central bank.
The government’s objection is unlikely to relate to bitcoin’s novelty, as the South American country is not known for the kind of financial innovation that is likely to be a destabilizing influence on its economy. Rather, the issue is likely to be bitcoin’s potential criminal uses.
Colombian security forces continue to struggle with the twin issues of narco-trafficking and Communist rebels, both of whom may see value in bitcoin as a means of payment for illicit transactions.
However, barring Colombian banks from handling bitcoin-related business is unlikely to have a significant impact on organizations that are essentially international in their conduct of business (narcotics for export and weapons for import).
man
Isle of Man: No licence required
On 26th March, the Isle of Man has announced that its licensure requirements do not apply to bitcoin exchanges operating there.
The Financial Supervision Commission, the Isle of Man’s financial regulator, confirmed in a written statement that bitcoin exchanges are neither investment businesses nor money transmission services as defined by current law.
The island is a self-governing dependency of the United Kingdom, and its citizens are nominally British citizens. Furthermore, it is known as an offshore haven due to its unusually low tax rates, which include a cap on tax payable by individuals and a corporate tax rate of 0%.
Liberal banking and tax rules have made offshore banking a large part of the island’s economy.
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