Topic: General bitcoin license for services dealing in bitcoins? (Read 1693 times)

I just wanted to add to this discussion that Gavin once mentioned a very interesting concept:  Bitcoin escrow.  Not the fact that it exists, but the fact that an organization can have partial control over coins through multi-signature transactions, but not enough for anyone to declare they are "in possession" of those coins.  He suggested that this would be legally significant in terms of money handling licenses. I don't know if he was speculating, but it's a relevant concept to consider if it were true.  Basically, it would exempt certain types of services, and businesses might be able to change their CONOPs (concept of operations) to get such exemptions.

Here is another agreement I once drafted (and have successfully used in the past).  This was for selling Bitcoins, not doing business and receiving Bitcoin as payment, but some of the elements (like defining what Bitcoin is) may also be helpful as groundwork.

https://casascius.com/AgreementToDeliverBitcoins.pdf

Some wording like "Payment is only considered made by bitcoin when the full requested amount is shown to be deposited in the blockchian in the given address prior to the payment expiry time given. Any refunds will only be funded by the given address. We are not responsible for funds sent to other address or lost funds due to technical issue with your client or the blockchain. Due to the changing value of bitcoins a given payment request will have an expiry time..."

Something along those lines should cover what it means to be paid/refunded.

I think if you ever ended up before a judge arguing about a payment and the judge says "Uhh, what is a bitcoin???" then a clause like this would go a long way in proving payment/refund.

I'd point to https://fastcash4bitcoins.com/terms.aspx as a good example of a starting point for such a thing.  It defines a Bitcoin and points out that Bitcoin is a network outside of anyone's control and that bad things could theoretically happen and disclaims liability for them.

I wouldn't call it an EULA (End User License Agreement) - this is a term used for software, and makes me think of Microsoft whenever I see the term.  Doing business with a Bitcoin merchant isn't entering into an EULA.

I also wouldn't call it a license.  It's an agreement but not a license.  A license is a grant of legally recognized rights (e.g. Microsoft is granting you a license to use their software, which is protected by copyright, or the city of San Antonio grants you a license to engage in business there, as required by local law).  This isn't happening here, if you buy a soda from a machine, you aren't "licensing" two quarters to the machine, you're giving them as payment.  If you buy a pallet of soda from Costco on credit, you're agreeing to pay for the soda at a later date, but you aren't licensing anything.

FC4B calls it a sales agreement (quite appropriately).

Of course. What a merchant obliges to should only be what their EULA actually states, and they are of course free to include any (if at all) parts of the "General Bitcoin Business License" (or whatever it will be called.) It would just be a set of good examples of things to remember when forming a license.


Maybe it should legally be enough to just reference a particular protocol specification? (Have a link to it or even include as an appendix.) Nobody is going to read it beforehand of course, but in case any legal problems arise, this would be the most certain way to decide whether the parts have fulfilled their obligations.

These would only be suggestions for operating.  Unless a merchant expressly states that it follows these suggestions, there should be no expectation that a merchant would have any obligations or responsibilities related to the suggestions.

The suggestions for operations might be along the lines of:

Payment is considered complete only after six confirmations occur within the longest chain of a node running the latest release of the reference client.  While payment may be recognized by the seller with fewer than six confirmations, only a payment with six confirmations is considered settled.  The seller can release the buyer from a debt obligation with fewer than six confirmations but that would be through an explicit agreement establishing a different threshold.  

If there is a blockchain reorganization and a payment that had six confirmations reverts to having fewer than six confirmations, the seller is still expected to honor the payment as having settled.  If there is a double-spend transaction for a previously sent transaction that had six confirmations, that would be an act of theft and the merchant can and should take appropriate measures to protect its financial interests.

If a transaction is accepted by the latest reference client and gets relayed to other nodes but is not included in any blocks (e.g., because the fee was not sufficient for a miner to consider including the transaction), that buyer cannot assert that payment has been made.

If a transaction is not accepted by the latest reference client the buyer cannot assert that payment has been made.

But there are a lot of assumptions there.

What is the reference client?  What if BitcoinJ becomes the most widely used client, for instance, and it takes certain transactions but the Bitcoin.org reference client does't yet accept blocks with those transactions?

Also, the payment protocol being discussed would be a big component of the suggestion for operations:
 - http://www.mail-archive.com/[email protected]/msg01567.html

I don't think we need any "legal" anything or any sort of licensing, but private training and certification companies would certainly be a good idea. One thought would be to have a company that can audit other companies to make sure they're using bitcoins properly and securely, allowing those companies that pass their inspections to display their seal of approval.

This sounds like the kind of thing the Bitcoin Foundation was meant to do.

Times go by, nobody seems to want to "kill" bitcoin with legislation, so ultimately there are more and more completely legit companies dealing in bitcoins. Both taking payments and paying other parties in bitcoins. Due to the new nature of payments with bitcoin, as opposed to normal payments, many of the companies should be including special clauses into their EULAs. For example, what does it actually mean to pay someone? (i.e, confirmations, connectability to different nodes, basically how to prove that you have paid) What happens if there is a block chain split, how to prove there was a block chain split? Such legal framework would protect both the users and the owners of businesses, maybe it is time we should start writing some basic legal texts to help new companies and users alike?

These would not be any texts or licenses that the bitcoin software comes with, or requires anyone to comply with. These would be very good examples of how to form an EULA for a company that is dealing with bitcoins, to avoid future problems and make any possible future legal processes more clear and easier to settle.

Or maybe there exists something like this already?