Banks
are reluctant to work with bitcoin, that fact has been well known in
the community for some time. Until now, though, few concrete reasons
have been given as to why.
New statements from a senior banking practitioner in Australia
working in anti-money laundering (AML) and counter-terrorism financing
(CTF), compliance could go some way to providing an explanation.
Banks around the world, particularly in the US, have been closing down accounts of bitcoin startups and even bitcoin-accepting businesses for over a year now. Even those that do work with bitcoin businesses are reluctant to be named in the media.
More conspiratorial theories say bitcoin’s destiny is to replace banks, and banks fear the competition. The real answer, however, could be the more mundane one of regulatory risk.
Worldwide regulatory environment
Australia’s banking and investment laws are similar to those in other
Western, developed economies, so the reasons presented here are likely
to be similar around the world.
The Financial Action Task Force on Money Laundering (FATF/GAFI) is an intergovernmental organization started in 1989 by the G7, and now has 34 members plus several regional associates.
Tasked with combating the financing of terrorist organizations, it is
a key factor in AML/CTF regulation and policy setting among its
members, meaning banks in those countries face similar legislative
environments.
A banker gives reasons
The senior banking practitioner, who asked not to be named, attended a
recent Bitcoin Professionals meetup in Sydney, organized by lawyer
Reuben Bramanathan and entrepreneur Jason Williams of the Bitcoin
Association of Australia. The banker explained the following: It is
extremely risky and costly for banks to have bitcoin businesses on their
books at the moment.
In addition to existing know-your-customer (KYC) requirements, the
banker said, banks in Australia have a “know your customer’s customer”
requirement.
New Customer Due Diligence
rules, which started 1st June this year, impose a high standard on
banks to identify their customers (including the difficult process of
identifying beneficial ownership and control) and to maintain ongoing
customer due diligence (CDD) and monitoring.
There are additional CDD requirements for accounts concerning “politically exposed persons“, or individuals with prominent public functions and their associates who may be susceptible to corruption.
Bitcoin and the definition of money
The problems for bitcoin begin with its legal status as ‘money’ or otherwise.
At present, the Anti-Money Laundering and Counter-Terrorism Financing
Act in Australia does not include bitcoin businesses under its
‘designated services’ category. As a non-national currency, bitcoin
would likely be defined as ‘e-money’ – and this is limited to “an
internet-based electronic means of exchange that is backed by bullion or
precious metal and is issued by a government body”.
The current law was written in 2006, before bitcoin had been released.
This limited definition of e-money means there can be no regulatory oversight from the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s primary regulator for AML/CTF issues.
This, in turn, means banks must play the role of regulators
themselves, creating an enormous amount of extra work as they monitor
and supervise their own due diligence.
More work, higher costs, bigger risks
The anonymous banker explained that extra work creates extra costs
and, from a commercial point of view, the profit banks make from
businesses does not cover the compliance costs.
Add to that the significant penalties they face if anything goes
wrong, the lack of oversight increases risk levels to a point where
banks consider it extremely dangerous to have a bitcoin business on
their books, unless that business can show it is itself voluntarily
compliant with all the AML/CTF rules.
If large banks struggle to deploy these kinds of resources, bitcoin startups will too.
Lawyer and digital currency specialist Amor Sexton told CoinDesk
that, given all this, banks take the simpler option of just avoiding
bitcoin altogether.
She said:
“Some, but very few, of the banks, are taking a rational
and fair approach by assessing each businesses on a case-by-case basis.
Others have decided that it is easier to exit all bitcoin businesses. This is a very real and urgent concern for the bitcoin industry, as
access to banking is an essential requirement for any business.”
The wall facing bitcoin
Banks in smaller countries, like Australia, must also comply with
regulations in larger ones if it maintains relationships or has
subsidiaries in other countries. Non-US banks must comply with US
regulations if they have customers who are US citizens or formal
relationships with US businesses, all of which adds another layer of
compliance – and its associated costs and risks.
Although these reasons may not come as a surprise to many bitcoiners,
especially those from the traditional finance industry, hearing them
directly from a banking representative could help startups understand
the prevailing attitude.
Bitcoin businesses, still a new phenomenon in the economy, have some
way to go to prove their industry is every bit as trustworthy as others,
and that will take time as well as campaigning.
In the meantime, industry groups like the Bitcoin Association of Australia and the newly-formed business lobby Australian Digital Currency Commerce Association (ADCCA) will be pressing the case locally, sharing their experience with associates worldwide.
Source : http://www.coindesk.com
Hailo CEO: Bitcoin Could Benefit Our Customers and Taxi Drivers
Hailo founders, with CEO Jay Bergman at centre
Taxi app Hailo is “actively” looking into allowing its customers to pay with bitcoin, according to company CEO Jay Bergman.
The company, which lets users hail taxis via its own app, could even
allow bitcoin to be sent directly to drivers, he said in an interview
with CoinDesk, a move that would set the company apart from other bitcoin-accepting businesses.
To-date most merchants have chosen bitcoin payment solutions that convert bitcoin directly to fiat currency.
“We have [always] sought to find independent ways to provide benefit
to our drivers and our passengers. I believe strongly that bitcoin is
one of these ways. Absolutely, like many other things, we actively
looking into it,” said Bergman.
Payment option
Stressing that his comments were made in a personal capacity, he said
that bitcoin could become an optional way of settling your bill with
Hailo, but that it wouldn’t replace the current user-authorisation
process, which requires a credit or debit card.
“I don’t envisage [bitcoin] to be necessarily a primary way of people accessing the service [...] but
it would be your optional way of settlement. We would be able to take
the money from your bitcoin wallet and transfer it to us, or even the
driver directly.”
To set up such a service, he said, Hailo would seek to connect with
an existing bitcoin wallet provider instead of hosting wallets itself.
The experience would be similar to paying with a credit or debit card,
where the bill is settled automatically by pulling money from the
customer’s account, said Bergman.
This would require partnership with a bitcoin wallet service that holds their users’ private keys.
Driver boost
A major advantage of accepting bitcoin payments, Bergman said, was
the potential to help some drivers avoid remittance fees when sending
their income to family or friends abroad.
“Bitcoin could provide benefit to our suppliers as well
as our passengers. If you think about the way to do this, you might do
it in such a way that you opened up a bitcoin wallet for your driver at
the same time as connecting one for your passenger.”
Drivers who then chose to receive bitcoin directly could transfer
that bitcoin internationally, virtually for free, or use one of a
handful of new bitcoin remittance companies, which convert into local currencies and charge far lower fees than legacy payments companies like Western Union.
“Some of our drivers are spending significant amounts of their income
remitting money,” said Bergman. “What if we could help them solve that
problem and therefore change their cost structure by 10, 20%, that would
be huge. So why wouldn’t we? That’s the real question.”
Disrupting an industry
As well as fierce competition from rivals like Uber, Hailo has faced
opposition from London black cab drivers in recent months. The app,
founded by Bergman and two other black cab drivers, previously only
allowed users to hail black cabs, but has now extended its service to
private hire vehicles also. In May, the company’s offices in London were vandalized.
Bergman rejected the suggestion that bitcoin payments were a
distraction when Hailo has more important challenges to address, saying,
“I don’t think anything that could provide that substantial level of
benefit to our drivers alone is a distraction.”
He declined to comment on when Hailo would begin accepting bitcoin
payments, but said he wasn’t concerned about beating Uber or Lyft to
being the first taxi app to accept bitcoin.
“We roll out things because it’s the right time and it’s
right for our focus on our priorities, not just because we want to beat
the other guy.”
Source : http://www.coindesk.com
BTC China Launches USD, HKD Bitcoin Trading Accounts
Shanghai-based
bitcoin and litecoin exchange BTC China has announced the launch of USD
and HKD deposits and withdrawals, becoming the latest China-based
exchange to publicly extend its services to the international community.
The news follows Beijing-based OKCoin’s announcement at The North American Bitcoin Conference (TNABC) that it would be adding USD deposits this
week as part of a broad push to court an international market that, for
now, remains absent of large, professional US exchanges.
Addressing the announcement, BTC China CEO
and Bitcoin Foundation board member Bobby Lee framed the product as a
way for the company to give back to its users and the community, saying:
“As a global company, BTC China is pleased to accommodate the demands of our users, both domestic and international.”
The launch was preceded by an invite-only testing period, during
which BTC China says it “collected several million USD worth of
deposits”.
The first bitcoin exchange in China, BTC China recently also expanded
its product offerings for international users, launching a mobile
bitcoin wallet in June.
Updated account offerings
BTC China indicated that the move was its first step in what could be
broader support for additional currencies, as exchange users had been
previously limited to deposits and withdrawals in Chinese yuan. As such,
the company expects the new offerings to resonate in its home market.
Current users who want to take advantage of the newly supported
currencies will need to open an international account in addition to a
domestic account, the company said.
Hong Kong emphasis increases
The announcement also finds BTC China leveraging its position in Asia
to work around the restrictions imposed in China. The company says all
orders on the service will be processed via its registered Hong Kong
affiliate, as Hong Kong has to date been more accommodating to digital
currency businesses due to its status as a special administrative region.
The Chinese bitcoin market has faced continued uncertainty in recent months, following statements
from the country’s central bank, the People’s Bank of China, that aimed
to separate the companies from the traditional financial services
sector.
Owing to the country’s unique regulatory structure, formal guidance such as the kind proposed in New York may not ever be drafted to ease uncertainty. However, representatives from the central bank have stated publicly that they do not seek to ban digital currency altogether.
China courts US market
The announcement is notable given the recent emphasis bitcoin’s China-based businesses are placing on the international market.
Speaking to CoinDesk at The North American Bitcoin Conference (TNABC),
representatives from both OKCoin and Huobi suggested that given that
restrictions of China’s market, the country has emphasized bitcoin’s use
as a financial instrument rather than a payment method, and that
because of this demand, they are uniquely suited to extend services
internationally.
Further, OKCoin CTO Changpeng Zhao stated at TNABC that the company
aims to provide 24-hour phone support to international customers, though
it stopped short of openly encouraging US consumer use of its platform,
saying that it is not registering for a money transmission licence in
the US at this time.
BTC China has not commented on whether it will offer this guidance.
Source : http://www.coindesk.com
Australian Tax Office Releases Further Information on Bitcoin Tax Rules
Taxpayers in Australia have been waiting patiently for a rulebook of sorts coming from the Australian Tax Office (ATO) on how they should properly address their bitcoin holdings on income taxes.
And while a full guidance hasn’t been released, the ATO has brought the matter up again on a “Completed Matters” page on their official website.
Without any further commentary, here is what has been published as it appears on the ATO website:
Status: Consultation completed Purpose: To seek input from a business community
perspective about the impacts of differing taxation treatments of
Bitcoin and other crypto currencies on the Australian business
community. Description: Industry representatives from
professional and Bitcoin associations, and leading businesses involved
in the emerging Bitcoin community, met on 29 April 2014. Attendees
provided valuable information about their business models and how
different tax treatments would impact their clients, members and
businesses. Who we consulted: Industry representatives from profession and Bitcoin associations. Outcomes: The group provided valuable feedback on
ATO propositions that have been part of our deliberations for an
Australian position on this tax treatment. We have sought further advice
from external legal counsel, which has delayed the release of the
guidance paper. It remains our priority to provide the community with
the final guidance paper in time for people to complete their 2013–14
income tax returns. The key information that a taxpayer will need about
each transaction or event with Bitcoin is the date, the amount in $A,
what it was for, and who the other party was (their Bitcoin address, at a
minimum). Contact: [omitted]
As noted here, a final guidance paper is expected, though no indication as to when that might happen is available.
We’re at an interesting point in time in the development of
cryptocurrencies — namely bitcoin — in that even governments are making
their own taxation rules. If you needed any more proof cryptocurrencies
are here to stay, here it is.
Source : http://newsbtc.com
OpenBazaar: Blazing The Trail For Bitcoin Commerce Without Barriers
Described as the “BitTorrent of eCommerce”, OpenBazaar is a fork of
DarkMarket. Like it’s predecessor, OpenBazaar is an open source
proof-of-concept decentralized marketplace that aims to be highly censorship resistant. OpenBazaar leverages the Bitcoin protocol as the means to accomplish this via peer-to-peer nodes loosely based on Kademlia.
What’s more, is that there will be no fees involved
to trade within the OpenBazaar marketplace; whereby allowing sellers to
escape the restrictiveness and unheavenly fees imposed by eBay.
CCN
OpenBazaar Ricardian Contracts
Another
intriguing aspect that separates OpenBazaar from other similar
solutions in development is that literally any web site can essentially
become an OpenBazaar marketplace, by the way of Ricardian Contracts.
These
extremely compact contracts (~4 kb file) can be sent to and/or
downloaded from anywhere. Once downloaded, they can then imported into
the OpenBazaar client, which takes it from there. To the greatest extent
possible, the idea behind this is to empower sellers by not restricting
them to a specific commercial site platform.
In
this regard, OpenBazaar effectually becomes a distributed network very
similar to BitTorrent; except distributing contracts as the file type.
Ricardian Contracts for physical goods will also be supported, as well
as user-definable custom data fields that either the OpenBazaar client
or a custom app can parse.
Because OpenBazaar uses Ricardian Contracts to manage trades, potential support for autonomous agents is certainly feasible. Similar to autonomous Open Transactions Nyms, these autonomous agents could:
Write OpenBazaar contracts,
Digitally sign and issue them on on the OpenBazaar marketplace,
Search for and accept contracts that suit their needs,
And enter into trades on their own.
OpenBazaar Security & Privacy
The
OpenBazaar Dev Team is proactively implementing a robust combination of
anti-fraud measures such as multisig/voting pools, arbitration, surety
bonds, good performance bonds, as well as other highly desirable
risk-mitigation technologies. A few examples include:
Encrypted Messaging:
Encrypted messaging will be included in OpenBazaar, as well as the
ability to place secure communication data (i.e. GPG key, Bitmessage
address, etc.) on a seller’s store page if they prefer out-of-band
chatting.
Contract Encryption:
Contracts can be encrypted via the recipient’s public key to preserve
privacy . Moreover, if there’s a MiTM attack, any contract modifications
will be immediately detectable by the recipient when the OpenBazaar
client performs a routine check of a contract’s digital signature;
whereby checking to see if the contract public key matches the public
key of the sender Nym.
Multisig Arbitration:
Because OpenBazaar uses Bitcoin multisig, an arbiter can control the
distribution of funds without ever being able to pilfer them. Mediation
only happens if there’s adispute between the buyer and seller;
consequently, buyer protection fees are only paid if mediation is
needed.
Protection Against Sybil Attacks:
To help combat against sybil/sock puppet attacks on the OpenBazaar
marketplace, an optional user-definable artificial cost for identity
creation will be implemented via two options: proof-of-burn and
timelocking.
Timelocking is where a specified amount of
Bitcoin remains unavailable for a certain amount of time; during which
your Nym identity remains valid. You will then be able to redeem the
money once this amount of time has passed.
Proof-of-burn is where
the creation of a Nym corresponds to the provable destruction (i.e.
“burning”) of Bitcoin; specific to that particular Nym. The term
“burning” bitcoins is somewhat of a misnomer, as it’s actually a
donation to every other Bitcoin holder in the world. In the case of
timelocking, the duration of the timelock is publicly visible.
However, in both cases
the amount burned or timelocked is publicly visible. These parameters
then can be applied to determining buyer/seller trustworthiness.
Naturally, this will put a higher value on Nyms that choose the
proof-of-burn model.
Another exciting feature of OpenBazaar is
the ability to add keywords to your listings; searchable across the
entire network, as well as the ability to filter out specific search
terms. The likely direction OpenBazaar will be going, is to encrypt
listings for storage. This has the added benefit of helping insure users
against certain types of heinous events, such as child porn haphazardly ending up on their hard drive.
Source : http://www.cryptocoinsnews.com
CCN Reveals: Timeline of KncMiner’s Struggle With the 20nm ASIC Bitcoin Miners
KnCMiner has previously received a lot of attention as the first
“legitimate” Bitcoin ASIC manufacturer especially after the BFL fiasco,
but has this once widely-touted company lost its touch and turned to the
dark side?
Who is KNC Miner?
KNC Miner is a
Swedish ASIC mining device manufacturer who manufactures both Bitcoin
and Scrypt ASIC devices and is owned and operated by Andreas Kennemar, Marcus Erlandsson, Michael Unnebäck, and Sam Cole. KNC started out by taking pre-orders for Mercury, Saturn, and Jupiter mining ASICs which shipped as the first profitable Bitcoin ASIC devices on the market. KnC blew BFL out of the water as BFL was mining on customer hardware and shipping their customers unprofitable hardware about a year later.
KnC’s Timeline
November 26th, 2013, KnC opened pre-orders on their website for Neptunes.
After being the first company to produce profitable ASIC devices for
Bitcoin, people were thrilled to buy from them. Little did they know
what would happen with their purchases and what their money would buy
for KnC’s company. Neptune was slated to be 2 TH/s on that date, but around December 3rd they boosted their device’s speed somehow. It was from there on to be at least 3 TH/s. KnC
announced Neptune as a 20nm ASIC device when all of their other devices
used 28nm. KnC wanted to be the first to create a 20nm chip, even if
that meant taking over half a year to deliver their products to the
customers. They constantly marketed the fact that it’s low power per hash and the first 20nm chip. Customers had to wait over half a year for their devices that make less than $2,000 a month all so KnC could brag about their chip size.
February 4th, 2014, KnC announced that they were building, in their own words, “one of the world’s largest data centers.”
They stated that they were building it as part of the “Plan B” for the
customer’s benefit in case they fell behind in shipping. They had
scheduled batch 1 for Q1/Q2 (Quarter 1 or Quarter 2) 2014 shipment and batch 2
for Q2 shipment to leave, “about one month after the first batch.” That
means that KnC needed to ship all batch 1 Neptune device by around May
31st 2014 and at least one batch 2 Neptune by June 30th, 2014. In an
effort to stay competitive, the prices have been dropping from $12,995
down to $9,995, and now $5,995 for batch 3 which is slated for shipment
by the end of Q3. KNC also had what the community is calling, “batch 0,”
which was a brief period where previous customers of KnC could buy a
pre-order Neptune at a reduced price, which lasted from November 26th
until November 29th of 2013.
April 8th, 2014, KnC realized that they might not be shipping on time, and they provide alternative options to their Neptune customers.
They were working on developing cutting edge 20nm chips (slow process)
in a fast moving market. The options they provided were the “Plan B,”
also known as “hash while you wait,” convert your order to a 3TH/s
Jupiter (a “Super Jupiter” as the community calls them), convert your order to a Titan and be refunded any difference in price, tough it out and receive a free extra Neptune, or receive a full refund.
Customers
were allowed only to choose one of those options and batch 3 customers
never had these options. The “Plan B” option was a sham and customers only got hosted for a few days while they lost their free miner for choosing that option. People who converted to a 3TH/s Jupiter received broken and used equipment that presumably came from failing data center hardware
with their old chips replaced with the 3 TH/s chips. As for the last
three, I opted to receive a Titan upgrade with the difference refunded
to me. KnC processed my refund promptly, and I had my roughly $3,000
refunded to me within days. I’ll keep you updated on how the rest plays
out. Those who opted to “tough it out” will receive their second Neptune
with the batch 3 shipments if all goes well. As for people receiving
full refunds, there’s been a bunch of people who have waited months for a refund.
April 22nd, 2014, KnC started shipping 3 TH/s Jupiters. (This date came from a news article which stated they would start shipping the Tuesday after Easter.)
April 24th, 2014, an article on NewsBTC.com shows the completed KnC data center hashing away.
KnC had previously stated that the data center was for customer use if
KNC had not been able to fulfill their shipping obligations. Was the
data center operational only for testing purposes? Kurt, a KnC
representative who’s highly active on the KNC forums, states indirectly in a comment dated June 17th, that KnC’s data center is, in fact, hashing away for KnC’s profits.
We do not possess 25% of the network. Our data centre is nowhere close to this figure.
Customers
were given “Plan B” hosting for only a few days in June, so why was the
data center hashing at such a high percentage of the network? You can
also see on Blockchain.info that KnC possesses 5% of the total Bitcoin network hash. KnC states on their FAQ page that they will never hash with more than 5% of the amount of hash that they sell to customers.
“Why are you selling the Miners and don’t mine yourself (will you use the miners for mining yourself)? We
are mining ourselves, but we believe in the Bitcoin project, and a
diversified market is the best for all parties. We will continue to
mine, but we do not believe in a monopoly of miners. We will not mine
with more than 5% of the hash rate we sell, and we will never mine with
customer hardware.”
With owning 5% of the network
hash, we don’t even need to calculate how much hash they’ve sold to
customers, as they own 5% of the total Bitcoin network hash!
That includes other ASIC manufacturer’s devices as well. Oh, and let’s
not forget the fact that KnC sold used 3TH/s Jupiters. Where do you
think they got those used devices?
If you’re curious about just how much hashing power 5% of the network is, let’s do the math. BitcoinCharts.com
reports the network hash rate at press time as being 129,643.76 TH/s.
KnC owns 5% of that. (6,482,188 GH/s) I plug those numbers into my Bitcoin calculator,
and it shows KnC’s happy face. KnC is pulling in an estimated profit of
almost $3.6 million each month from their data center alone. That’s a
lot of hooch!
April 28th, 2014, KnC announced that their 3 TH/s Jupiters arrived broken. The fiasco was so bad that Caleb Chen, one of our editors, did a writeup exclusively on that issue.
His article describes so much detail about the situation that I can’t
accurately describe how bad it was without reprinting his whole article.
Rubber bands holding heat-sinks down? Really KnC? I recommend reading
his articles and seeing the included pictures of this mess. At least KnC
was professional enough to ship replacement units for free to everyone
who ordered a 3 TH/s Jupiter from them. Caleb Chen, in his article,
writes:
The entire KnCMiner Super Jupiter ordeal was
concocted to help KnCMiner save face in light of missing their Neptune
deadline; however, with this latest turn of events, KnCMiner should
probably count the entire publicity stunt as a failure.
June 17th, 2014, KnC announced
that they would be shipping their batch 1 pre-order (apparently
inclusive of the pseudo-batch 0 devices), and they would be shipping
batch 2 devices before the end of the month. That goes against what KnC
promised its customers in that it would put about a month of time
between batch 1 and batch 2.
One could argue what the word
“about” even means, but I’ll take it to the extreme and say that
“about,” in this case, means 51% of something. 51% of the 30-day month
of June is 15.3 days. The June 17th post states that they would be
shipping that week. Even if they had shipped batch 1 units that same
day, they would be 1.7 days past the limit of saying batch 2 will ship
“about” one month after batch 1, especially while stating that they plan
to ship batch 2 before the end of the month as well. Customers have
spoken out about the brief amount of time between batch 1 and batch 2 Neptune shipping.
June 30th, 2014, KnC announced that they had run out of wafers for their 20nm Neptune chips. Could KnC have used the chips for upgrading units in their own private data center?
The Fine Print
Aside
from the above timeline of what customers had to go through, KnC has
made some changes in their fine print without announcing it. KNC started
out with a 12-month limited warranty period and offered refunds for all
of their products. On December 30th, 2013, KnC was still offering a 12-month limited warranty. Their hidden Terms and Conditions page (not listed in the header, footer, or product pages) now states that they offer a 3-month limited warranty. In a post dated June 17th, 2014, Kurt states:
In
regards to the change in warranty, we have found that the majority of
ASIC boards that are sent back for replacement to our RMA department
have been overclocked and pushed way past its safe limit, we do not
believe this to be fair. The warranty has been decreased to deter this
from happening. Our upcoming ASIC boards will be much sturdier than our
previous models since we have much more experience in ASIC development
this time around. Thus, 12 month’s warranty will not be needed. Our
technical team are also available to assist you with any issues that may
arise during and after this period.
Some companies
who offer different types of overclocking hardware, such as PC
motherboards, limit their warranty by stating that overclocking voids
your warranty. For some reason, KnC doesn’t work their warranty this
way, but instead they decreased their warranty period. Another
sad thing to see go is a possible refund. KnC states clearly in all of
their product pages that they do not offer refunds on their units. Kurt states that this is because pre-order money is used to fund the company’s research and development. (R&D)
Thirdly,
we have been transparent and stated that due to the relatively young
nature of scrypt mining, we would not be offering any refunds on the
Titan miner, each customer had been made aware of this at the time they
made their purchase. It is also clearly written that no refunds will be
offered with the Neptune 3rd batch. We understand that this may not
appeal to everyone, but no one is being forced to accept this. We design
ground-breaking, cutting edge products to keep mining competitive, this
takes a lot of hard work and funding for R&D, customers not truly
committed to the purchase can affect the development of the product.
As “DaveCowen” from the KnC forums pointed out, KnC treats every customer as a business customer, as per their terms and conditions page.
1.2
The Products are sold for business use only, and Purchaser hereby
accepts that it has purchased the Products in order to conduct business.
“DaveCowen,” writes:
Put
another way, KnC arbitrarily defines all customers as businesses.
Therefore, they feel they do not have to respect Swedish law and the
Consumer Protection Act and can choose to ignore any requests for
refunds. Even if they ship products that are unsafe and/or don’t work.
Be
aware of the loophole they’ve built into their Terms and Conditions…
they use it as an excuse to steal (how else would you describe $13,200
for something that doesn’t work and they refuse to refund).
Kurt defended KnC by posting the following.
Hi,
Our support team are trying to work with you to replace any items that
are broken. It is impossible for us to issue you with an RMA for any
affected parts if you are not willing to cooperate. No refunds will be
offered; we will ship any items that are defective back to us at our
cost and give you a replacement. The turnaround for the RMA procedure is
extremely fast and in most cases new parts will be sent out the same
day we receive your broken items.
Link Integrity
KnC has a nasty habit of removing forum posts
that hurt their reputation. If you find a dead link above, this may or
may not be the reason for this. I try to make sure that every link I add
to my articles can be viewed by the general public without any trouble. Source : http://thebitcoinnews.co.uk
The trend continues: BTC China adds USD and HKD trading
BTC China has announced that they are adding USD and Hong Kong dollar (HKD) bitcoin trading. This comes days after OKCoin announced its launch of USD trading via OKCoin.com.
With the launch, BTC China says it’s the first such exchange in China to offer trading in 3 fiat currencies.
The
moves come as Chinese exchanges look westward to increase their client
base and expand beyond the grip of the People’ Bank of China (PBOC),
which has placed restrictions on Bitcoin in the country. Hong Kong,
which does not impose such restrictions, is an ideal launching pad
catering to the Chinese, local and international markets.
BTC
China is offering the new service through its Hong Kong-based affiliate.
Such affiliates have been key in allowing exchanges like OKCoin and Huobi to get back into the margin game.
The exchange says that it has already gotten millions in deposits from its invite-only trial period. BTC
China does not charge fees for trades, a selling point they hope to
leverage to attract international clientele currently paying 0.2-0.5% on
trades.
Source : http://dcmagnates.com
Gold price driven downwards – Bitcoin a better bet
Last year, the Winklevoss twins predicted that Bitcoin is set to
become Gold 2.0, right now it’s starting to look as if they might well
be right. Every day, according to estimates, around £220bn of gold
changes hands in London. The gold price has been set since 1919 by the London Gold Fix. but, of late, the gold fix mechanism has been somewhat losing its luster.
There
have been growing concerns that the London Gold Market Fixing Limited,
which is owned by Barclays, HSBC, Société Générale and Scotiabank, may
have been manipulating, or at the very least allowing the gold price to
be manipulated. In a statement to the market, the four banks stated that
they would seek to appoint an independent third party to oversee the
price fix mechanism. One week ago today, gold was trading at $1,345 a
troy ounce, and silver was also showing a 2.3% increase to $21.55 per
ounce. Questions are now being asked about whether this price was, in
fact, artificially inflated by the Gold price fix.
On August 24th, 2011 the gold price peaked
at a high of $1,883.36 per troy ounce. The gold price has been in a
state of gradual decline since then, although in times of uncertainty
people choose to hedge their investments by buying gold bullion. Indeed
many bullion companies
are offering gold for bitcoins; BitGild and Agora Commodities being
just two that I am familiar with, both respectable and professional
companies that are not paying me for mentioning them. When I commenced
this article, the tragic events of Malasia Airlines MH17 had not
occurred and even in so great a tragedy the markets are moved to
respond. Prices fell on Asian, European and American markets as people
moved to mitigate any risks that the developing hostilities in the
Middle East and also the Ukraine might expose them to. Traditionally, in
times of war, oil prices and steel prices rise, and people move
investments from equities and into safer bets such as cash and bullion.
People
are moving fast into regulating Bitcoin, and there are already talks of
Black and White bitcoins. Bitcoin price has stabilized since last April
and is currently holding North of £600. There has been some level of
slippage in the past few days, but the Bitcoin price has the advantage
of being set by the market for bitcoins; it is independent of committees
and cartels.
As
the gold price removes from the price fix mechanism, we are entering an
area of floating gold price that has been unknown to us since 1919. I
am not advocating a policy of sell, sell, sell, but I would advise
people to wait and watch what happens. This may turn out to be a time
where the gold price is less concerned with its value as a hedge of
money in times of uncertainty and more concerned with the true price
that we should have been trading. As more and more businesses come on
board the Bitcoin express and regulators move to ‘ legitimize’ us, it
would be reasonable to expect the value, in the coming weeks, to top the
magic $700. It will be interesting to see if it can climb higher in a
post Mt Gox era.
Source : http://www.cryptocoinsnews.com
Satoshi Nakamoto Wants To Teach You The History Of Bitcoin
At the end of 2013 I received an email, purportedly from the
pseudonymous Satoshi Nakamoto, containing an invitation to learn the
history of Bitcoin at HistoryOfBitcoin.org.
While it’s certainly doubtful that this Satoshi Nakamoto has any
relation to the elusive creator(s) of Bitcoin, the approach piqued my
interest.
History Of Bitcoin The site, HistoryOfBitcoin.org,
takes you on a sequential tour of some of the most important
developments in the history of the five year old cryptocurrency.
HistoryOfBitcoin’s journey begins with the murky past of the
developer(s) including the filing of a Bitcoin related patent and the
registration of Bitcoin.org. Eventually the timeline speeds up, covering
everything from early exploits found in the Bitcoin code to the
development of pool mining to Bitcoin first reaching parity with the US
Dollar. The latest entry, a story covering a Cyprus university accepting
Bitcoin for tuition, leaves me wondering what 2014 will look like on
the timeline.
While it may not be Forbes or Bloomberg, HistoryOfBitcoin
manages to communicate the at times complex history of Bitcoin in an
easily digestible manner. Part reference, part entertainment, the
beautifully built HistoryOfBitcoin website is an easy to consume outline of history’s largest distributed computing project.
The Attraction Of Bitcoin
The HistoryOfBitcoin.org site helped me realize why I was originally
attracted to Bitcoin. Bitcoin stood out in a tech world usually
dominated by proprietary software and shiny new gadgets . More of a
rough protocol scratched out on cryptography mailing lists and
corroborated via IRC channels and old school forums, the original
Bitcoin was far from the norm. While Bitcoin has significantly expanded
over the last year or so, its roots as an open source and innovative
project are likely to reverberate for decades to come. For an insightful and somewhat tear jerking look into the early development of Bitcoin I’d recommend reading Hal Finney’s post Bitcoin And Me on Bitcointalk.org. For a lighthearted explanation of Bitcoin check out Jon Bringhurst’s fictional depiction of the life of Satoshi Nakamoto.
Source : http://cryptojunky.com
Qora Announces Second Generation Cryptocurrency Will "Solve Bitcoin's Biggest Problems'
Cryptocurrency, known by frequent users as
‘altcoins’, is perhaps best known to the general public by its most
controversial iteration, Bitcoin. Bitcoin, while popular, is mired in
conceptual flaws that cause its value to fluctuate wildly, and is
subject to mining and other scams that have hit headlines. With
Bitcoin’s development stagnating due to a lack of core coders and
internal political differences, many are looking for alternatives. In a
recent BitcoinTalk Announcement Thread, Qora promises to be the best hope for the future of cryptocurrency.
The Qora Community is
poised to gain market share in the current slew of altcoins, thanks to a
number of innovative features and fast-moving development processes.
Launched on May 16, the new protocol was designed to ‘solve Bitcoin’s
biggest problems while adding promising new features’.
While most other cryptocurrencies have been
built on Bitcoin’s code, Qora was built from the ground up in Java,
using native C libraries to perform the most CPU-intensive tasks.
Qora works on a completely new implementation
of the proof-of-stake algorithm, by which transactions are verified by
coin stakeholders rather than independent miners, contrasting starkly
with proof-of-work coins like Bitcoin and their power-hungry mining
culture. ‘Forging’ (stakeholders securing the network and adding the
latest set of transactions to the blockchain) is possible after just 10
confirmations of balance.
Source : http://www.thebitcoinchannel.com/
Ripple Labs Unveils Proposal for New Smart Contract System
San Francisco-based Ripple Labs, a startup focused on building
payment and digital asset networks, has unveiled a comprehensive plan
for the development of a new smart contract system. Called Codius, the proposed system will be programming language
agnostic and work with existing monetary and contractual systems.
There are a few cryptographic projects currently seeking to build
smart contract solutions, but Codius is perhaps the framework that many
in the cryptocurrency space have been seeking to leverage to build asset
structures.
Stefan Thomas, chief technology officer at Ripple Labs,
told CoinDesk that programmable contracts in digital form will be
ubiquitous someday – and that the company wants to be a steward for this
technology. Thomas said:
“[Smart] contract logic decides who should receive the
money. It can query any internet server to do so, including crypto
networks, web services, etc. Based on the decision, the contract hosts
will allow a transaction sending the money to that recipient to
succeed.”
Smart oracles
As detailed in a blog post and whitepaper on GitHub, the Ripple Labs plan for Codius is ambitious, building off of researcher Nick Szabo’s early work in programmable methods of contract law.
It relies on the use of what is known as an oracle, which is an
instance that can sign a cryptographic key pair if or when a condition
is met, hence the concept of a “smart” contract that can execute itself when it has proper inputs.
“Oracles sign things and the signatures trigger actions in the distributed networks,” Thomas explained.
The Codius project
calls these “smart oracles”, in the sense that they will be able to
operate on an untrusted codebase. This means that there will be
open access to this project for most developers since it will not
require the use of a specific programming language. Thomas explained:
“Compared to conventional oracles [such as for bitcoin],
smart oracles don’t require you to learn how to write code for the
deterministic environments. You can write regular JavaScript, or any
other language that somebody has ported to Codius and treat bitcoin as
if it was your database.”
Smart oracles handle the sandboxing, identification and even hosting
of these digital assets. Furthermore, the system will be able to
integrate with a number of different systems of value: bitcoin, Ripple’s
XRP or even fiat money.
The smart contract economy
Ripple Labs believes an entire industry will be built around smart
digital assets – just like what is happening in the cryptocurrency
realm. One of the earliest business ventures to coincide with
the creation of smart contracts might be hosting platforms for the
technology.
“You run somebody’s code and they pay you for it. I could see hosting
companies starting to add contracts offerings,” said Thomas. “Hosting
VMs [virtual machines] is a very similar business model.” The bitcoin mining sector might find value in getting into the smart contract business as well.
Total bitcoins over time. Source: Bitcoin Wiki
Generating new coins is profitable in bitcoin right now, but this may
not be the case in the future for some mining operations. In addition
to earning revenue for confirming transactions, miners may find that
hosting smart contracts is another lucrative venture down the road. Said Thomas:
“Essentially miners are performing a validation function
for the network in exchange for a reward, again a very similar concept
as running a Codius host and being paid for running contracts.”
Legal ramifications
The use of smart contracts could solve not only the antiquated
problems of using paper for legal purposes, it could also make legal
systems around the globe more efficient. Greg Kidd is Ripple Labs’ chief risk operator, who worked at
Promontory Financial Group prior to joining the company. He told
CoinDesk:
“We see smart contracts as a layer between the
contracting parties and the legal system. Right now, if anything goes
wrong with a contract, you have to go to the legal system, which is
extremely slow and expensive.”
Companies spend billions of dollars every year on various legal
costs. Smart contracts might not be a solution for any sort of disputed
situation. But Kidd, who also previously worked with the Board of
Governors at the Federal Reserve, thinks that the technology has promise
to improve the broader legal system.
Traditional contract enforcement costs time and money. Source: Doingbusiness.org.
“If you can write smart contracts that handle 50% of the possible
ways that a given contract can go wrong, you can save 50% of the
expected legal fees from entering the contract,” he said.
Development continues
There are already a few different cryptographic smart contract
projects in various stages of development, with perhaps the most notable
being Vitalik Buterin’s still unreleased Ethereum. Colored coins, which act as a token on top of bitcoin, are also still
in development. That effort has seen little industry traction so far,
but a company called Coinprism is still trying to advocate its use. “I’m waiting for an actual implementation. We are very excited about
the opportunities arising out of smart contracts and other block chain
technologies, but it’s early days,” said Fabio Federici, whose startup Coinalytics analyzes block chain data for its clients.
Nevertheless, the Codius white paper and its proposed use of Google’s Native Client
to execute a small and relatively secure base of code is novel. The
applications Ripple Labs envisions for the Codius project are numerous.
The list include tools that cover voting, escrow, derivatives, auctions,
property and the equities markets.
In essence, smart contracts have the capability of innovating lawful
agreements in the same way cryptocurrenies are changing existing
concepts of money and value exchange. Kidd added:
“We’re interested in making antiquated systems such as
payments and legal vastly more efficient and democratic using
distributed technology. Codius improves and opens access to the process
of creating and executing legal agreements, so lawyers, judges, etc. can
focus their energies on more complex cases.”
To learn more about Ripple labs, its architecture and its role in digital currency ecosystem
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