Bitcoins and Gravy EP 27: The End Of Money, Counterparty & Singapore!
On Today’s show…
We go to the land down under to speak with German filmmaker and media entrepreneur, Torsten Hoffman, producer of the soon to be released Documentary, The End of Money AS We Know It. Yes friends finally we have a Bitcoin documentary that is so well explained your grandmother could understand it!
Midway through we hear from our Guy on the Ground, “Captain” Kirk Phillips,
who comes to us once again from Bitcoin in the Beltway. There he
interviews Adam Krellenstein of Counterparty. Counterparty is a Bitcoin
2.0 protocol and currency that uses the Bitcoin blockchain to provide
users with features in peer to peer finance. Oh and it also allows users
to safely store their LTB Coins using a Counterparty wallet! This is
the future folks, so grab the handle of your coffee cup and hold on for
the ride!
And finally we travel East… way past the Jersey Shore to speak with
Neal R. Blackburn, an American living working and promoting Bitcoin in
Singapore. Neal gives us some insight into what’s going on with the
Bitcoin scene in Asia. He talks to us about the ACCESS group in
Singapore – the Association of Cryptocurrency Enterprises and Startups
for Singapore and he tells us what it’s like to actually live in
Singapore… using Bitcoin.
Source : http://crypto-news.com
Russia and Argentina raise obstacles to Bitcoin while France plans regulation
Bitcoin is the center of attention in at
least three different countries at the moment. But while two of these
nations intend to raise obstacles to the local Bitcoiners and
crypto-businesses, the other one is planning something very different.
On one side there is Russia and its Ministry of Finance, who recently announced a proposal to ban the issuance of Bitcoin and any operations involving cryptocurrency in the country. According to the government’s regulation website, the ministry is drafting a Bitcoin-related bill that will implement jail time for people dealing with BTC in Russia.
“According to Article 27 of the Federal
Law ‘On the Central Bank of the Russian Federation’ (Bank of Russia) the
official Russian currency is ruble. The issuance of monetary surrogates
in Russia is forbidden as well as the introduction of other monetary
units. However, monetary surrogate has no standard definition in the
Russian legislation”, reads the online announcement.
Besides banning the “issuance of monetary surrogates in Russia”, the government agency also plans to restrict access to websites that enable people to buy, sell, transfer and use cryptocurrencies, Coindesk reports.
In the meantime, in South America,
things are not looking better for the local Bitcoiners. The Argentinian
cryptocurrency exchange Unisend has halted all customer deposits and bank transfers this Monday (4th) after Banco Santander Río and Banco Gailicia suddenly closed the company accounts.
Unisend has received written notifications from both banks during last week. According to Coindesk, the documents cited Article 792 of Argentina’s code of commerce:
the article says that a banking relationship can be terminated at the
request of a bank or its client provided 10 days notice is given.
José Rodriguez, one of Unisend’s partners, guaranteed that the exchange does not expect its services to be affected for long. “We
have other banking relations and are working to open new ones in case
any other contingency arises. Operations are continuing as usual”, he
announced.
Still, it is important to note that the
letters were sent just a few days before the implementation of new
banking rules imposed by the Unidad de Información Financiera (UIF),
Argentina’s anti-money laundering agency.
However, there are also good news for the Bitcoin community coming from France. A new report titled “Regulation in the face of innovation: public authorities and the development of virtual currencies” was released this Tuesday (5th) by the French senate, hinting at the possibility of regulation.
The document reports the meeting held in
23rd July by the French finance committee, also including details of a
meeting between members of the French treasury, Bank of France, money
laundering department Tracfin, the senate, intelligence agency DNRED,
and the CEO of Bitcoin exchange Paymium, CoinFinance reports.
According to the report, the general opinion is that Bitcoin does need to be regulated, but at the same time it is also important to approach regulations carefully so not to harm innovation.
Source : http://bitcoinexaminer.org
Bitcoin Regulation is Inevitable - Black and White Bitcoins Explained
The
concept of “black” and “white” Bitcoins are a solid prediction of the
implications laws and regulations could have on the way cryptocurrency
is used in different contexts.
Reddit user whitslack posted to /r/bitcoin
predicting and explaining the emergence of “white” and “black”
bitcoins. I wholeheartedly agree with everything in the post and think
it offers previously unforeseen insight into how cryptocurrency payments
might integrate with state regulation and laws in future. “Black” and
“White” bitcoins are technically identical, existing on the same network
and Blockchain, but the context of which they will be used will be
different.
How are White and Black Bitcoins different?
White Bitcoins
Bitcoins
that are held and pass through “registered addresses” that are in some
way associated to an identifiable individual or businesses.
Black Bitcoins
Bitcoins
that are held and transacted through addresses that are not connected
to an identifiable owner and are effectively anonymous.
To What Ends?
There
are likely to be two opposing forces when it comes to Bitcoin
classification moving forward. Governing bodies who’s prerogative it is
to regulate and ultimately have a degree of control over circulated
cryptocurrencies and their respective networks and those who want to
retain the open and potentially anonymous nature of cryptocurrency for
reasons political, personal or legal.
Imagine
that a country implements a law that states all digital currency
payments have to be sent from and received by addresses that are
connected to a business or individual in some identifiable means or else
face punishment if caught (financial fine, forced closure ect.). This
would mean law-abiding merchants of cryptocurrencies in that
jurisdiction would have to disclose the addresses they use for
cryptocurrency transactions and let customers know they have to pay from
a similarly registered address. These merchants will also likely have
to implement some kind of bounce-back system if somebody attempts to pay
from an anonymous address to protect themselves from unintentional
law-breaking. These kinds of laws and corresponding systems would allow
governing bodies to keep better track of transactions and business
assets than is currently possible with fiat currency. The underlying
decentralized nature of cryptocurrency networks would not affect the
capacity of states to keep track of the surface “white” transactions.
The most upvoted comment in the original thread was made by user Sir_Wabbit and questions the feasibility of the prediction:
“I don’t see this being done, how on earth will “they” (who exactly?) maintain this accurate database? with mixing services, alt coin exchanges, not to mention needing these same regulations across the world, with all the laws the same spanning the globe? Not going to happen. It cant be centralized, it wont be.”
Firstly
it is unclear at this current time how such a database could be kept,
it might not even be centralised and kept across several separate
parties. But it is ignorant to underestimate governing powers and
dismiss such an undertaking as impossible. You can already see the
beginnings of such records on Blockchain.info, for example simply look at the recent transactions.
Although at the current time a couple dozen unidentifiable transactions
will fly past before you can see one involving an address from an
identified business (usually a registered business ‘hotwallet’). This
number would undoubtedly increase and even expand to individual persons
if states implemented a requirement for legal transactions to be sent
form “white” addresses. This record that is already being kept in a
certain capacity on the blockchain could be expanded and added to by
governments that wanted to attempt to track Bitcoin transactions. It is
also a fair point to say that even if one country implemented this type
of law other countries wouldn’t be subjected to it’s implications. But
in the nature of a globalised economy if a substantially economically
influential country implemented such hardline control of digital
currency it would incentivise and even force other nations into
following suit.
Source : http://www.cryptocoinsnews.com
Robocoin Video Offers First Look at Unreleased Banking and Remittance Platform
Las Vegas-based bitcoin financial services provider Robocoin has
released a new YouTube video that offers a first glimpse of its
previously announced banking and remittance platform, Robocoin 2.0.
Revealed on 10th June,
Robocoin 2.0 finds the bitcoin ATM manufacturer seeking to refine its
user experience and broaden its market base in a bid to attract a more
global, mainstream audience.
Robocoin CEO Jordan Kelley
characterized the video as evidence that the company is following
through on its promise to deliver a user-friendly product in line with
these goals, telling CoinDesk:
“A lot of people call [Robocoin] the onramp to bitcoin. So, with that comes an enormous responsibility to get as many people to use bitcoin and make it as useful as possible.”
The three-minute video demonstrates a number of Robocoin 2.0
features, including the platform’s instantaneous bitcoin buying and
selling capabilities, Robocoin.com’s cross-platform money management
features and its remittance capabilities.
Robocoin indicated that while it is eager to share its latest work,
the final product is not yet ready for the general public. The company
said it is conducting internal testing, and that this phase will be
followed by external penetration testing and migration to a
high-security data center before the product finally reaches market.
Building a two-sided global network
Kelley went on to explain how Robocoin will leverage its existing
services, including its ATM operator base, to support its larger goals.
Robocoin will offer two types of wallets, one for its customer
checking accounts and another for its bitcoin ATM operators. In his
remarks, Kelley explained how these two integral offerings will
function together to provide benefits to both parties, saying:
“What we’re doing is our operators are providing liquidity to our customers. They’re selling bitcoin out of their bitcoin operator wallet, and because all we’re doing now is an internal ledger change, we can now provide customers instantaneous access to bitcoin without having network confirmation.”
Operators, Kelley continued, will be protected from speculation through its Robocoin Exchange Connector, an API that connects operators to sources of liquidity around the world.
Kelley added: “With that, operators can connect to Bitstamp, BitPay,
Vault of Satoshi or Cointrader and after every single transaction,
Robocoin will replenish their account from the exchange.”
Equating security with familiarity
A pillar of the Robocoin 2.0 service, Kelley says, will be smaller
improvements that aim to make Robocoin’s service – and bitcoin – more
user-friendly and secure across platforms, from its kiosks to its
desktop and HTML5 wallet.
The video, for example, shows how Robocoin is personalizing its kiosk
service with custom greetings at log-in. While a minor detail, the
feature will serve to further emphasize the company’s palm-vein scanning
technology.
“Now, when a customer walks up to the machine, they go through our
enrollment process, and that palm scan, it’s not just a compliance
feature, but it’s a security feature,” Kelly said. “It’s the mark that
nobody has access to your bitcoin except for you and that is ensured by
your biometric authentication.”
Also on display is Robocoin’s improved web wallet and Robocoin.com
banking service, offerings it aims to bring to more novice bitcoin users
by allowing them to deposit and send money overseas on-the-go and with
ease.
Kelley concluded:
“We’ve been really focused on trying to cater to the 99.9% of people around the world who may be not as tech savvy, but at the same time, we still want to engage them in what bitcoin has to offer.”
Robocoin aims to release the final product by the end of this summer.
Source : http://www.coindesk.com
“The Banking System is mostly not needed” - 38th Director of the US Mint, Edmund Moy
Edmund Moy is a former Director of the United States mint
and well known economist. Mr. Moy has a background in both small
businesses, working in his parents’ restaurant as a youth, and along
with being Director of the Mint he served as Special Assistant to
President George W. Bush and served on the transition for the new
Department of Homeland Security.
Mr. Moy also became interested in Bitcoin early in its development
and continues to study the new paradigm by diving in himself. He is also
scheduled to keynote at the Cryptolina Bitcoin Expo on August 16.
Coin Telegraph: How did you first become acquainted with cryptocurrencies?
Edumnd Moy: I first became aware of
cryptocurrencies when I was Director of the United States Mint. There
was a footnote in my coin demand forecasting report mentioning Satoshi
Nakamoto’s paper and in a later report, another footnote about the
release of the open-source software. During my tenure from 2006-2011,
there wasn’t much cryptocurrency activity and certainly not enough to
impact coin demand.
CT: You recently purchased Bitcoins. What has been your experience so far?
EM: It was easy peasy. The exchanges I used were very user-friendly and self-explanatory for anyone who has bought products or services online.
CT: What problems do you see that are inherent in our current centralized economic system?
EM: Once sovereign governments stopped having their
currencies backed by gold and began down the path of fiat currency,
they’ve discovered how easy it is to create more currency with little
restraint or accountability.
This problem has been exacerbated by the 2008 global financial crisis
when most countries opted for monetary stimulus instead of austerity.
Accommodative monetary policy almost always leads to lowering the value
of currency.
The second problem is that sovereign nations are not just economic
entities, but are also political ones. So while currency is mainly used
for economic transactions, countries manipulate their currencies to help
support their political goals. China is a prime example. They
artificially keep the Yuan low to make their exports more competitive.
That’s because one of their goals is to become the world’s largest
economy, which is part of their broader goal of pushing the United
States off its pedestal of being the world’s only superpower.
CT: Do you think virtual currencies like Bitcoin can help alleviate or even solve some of these problems, and if so, how?
EM: Because cryptocurrencies are decentralized, the
market determines its value, not government fiat or sovereign nations’
political agenda. Because businesses use it for transactions, it seems
to me a much more authentic and rational way to determine value. And
because only 21 million bitcoins can be mined, that takes inflation (or
devaluing) mostly out of the equation.
CT: What future do you see for Bitcoin in the world economy framework?
EM: Sovereign nations are not going to give up their
monopolies on currency without a fight. There simply is too much
institutional momentum and infrastructure built to support the current
system. That will make it difficult to change overnight, let alone
evolve over many years.
However, developing countries could adopt Bitcoin much more quickly.
For example, many African countries have leapfrogged over landlines to
directly to smart phones. Add that to the high cost of manufacturing
currencies due to lack of economies of scale, and I think you have the
right environment to have broad-scale adoption of Bitcoin or other
cryptocurrencies.
One big advantage that cryptocurrencies like Bitcoin have globally is
that it is a protocol in addition to being a currency. For example,
because Bitcoin transactions are peer-to-peer, the banking system is
mostly not needed and nor are their hefty transactions costs. P2P also
transmits payments much faster. And because Bitcoin is decentralized,
there are no exchange rates and accompanying expensive foreign exchange
transaction fees. That means less friction in international trade.
“[…] because Bitcoin transactions are peer-to-peer, the banking system is mostly not needed and nor are their hefty transactions costs. P2P also transmits payments much faster.”
CT: What problems do you expect Bitcoin to encounter as it grows in acceptance?
EM: First, as Bitcoin’s use increases, so will the
regulatory scrutiny. While it is hard to kill something that is
open-source and decentralized, aggressive bad regulation can slow the
rate of acceptance, especially among the general populace.
Second, nobody fights over a graveyard. Greater acceptance will
attract greater attention, especially from hackers who will want to
compromise it and criminals who will want to steal it.
Third, there will be capacity and functionality issues. The rather
small and fragile Bitcoin ecosystem works pretty well now, but no one
knows how well the ecosystem will scale.
CT: Can it become a real alternative for fiat money?
EM: Yes. But an alternative is different than a
substitution. I believe that the notion of cryptocurrencies is
revolutionary but currency and payments systems are pretty much
evolutionary - when the two clash, the likely outcome is somewhere in
between.
For example, the transition from a gold standard to a fiat currency
took 45 years and yet there still is a role for gold in the modern
economy (as bullion). Also, I grew up using cash, writing a lot of
checks, and sending money orders but now use credit cards, wire
transfers, and electronic banking. And I have just bought my first
Bitcoin and have spent some.
All these payment systems and forms of currency exist in the market
because users derive some value in them that they can’t get anywhere
else. But the proportion of market share will change and some will
eventually fall out of favor. My point is that if history is any
indication, people will use whatever payment system and form of currency
is most convenient for each transaction. There will always be a role
for notes and coin, though that will likely diminish over time. And
there will be a role for cryptocurrencies like Bitcoin, which will
inevitably increase over time.
CT: Bitcoin being used by criminals is a huge issue. Is Bitcoin any different than fiat currency in this respect?
EM: From one perspective, Bitcoin and fiat currency
are both used by criminals to conduct illegal transactions and thus
function in a similar fashion. But they are also different. As a big
positive, the blockchain offers more transparency than cash
transactions. But there are also big negatives. Bitcoin’s peer-to-peer
transactions avoid using third parties like banks, which must comply
with extensive regulations intended to catch criminal or terrorist
activity.
Regulators fear the transactions they can’t see, which is in conflict
to some who believe this is part of the advantage of using Bitcoin.
Bitcoin also allows for larger value transactions outside the banking
system by criminals or terrorists without the logistical problem of
transporting the bulky equivalent of cash or gold.
I also think it is a double standard
that when a criminal uses Bitcoin, it’s front-page news but when they
use cash, it’s a non-story. Then regulators and the uninformed talk
about banning Bitcoin but not cash. But this is the reality that we
operate in and until Bitcoin shakes the unfair image of being the
currency of criminals, it will have a harder time being accepted by the
general population.
- Mr. Moy himself
CT: What are your thoughts on the Bitlicense and virtual regulation in general?
EM: I know the Bitcoin community has strong opinions
about this topic. Let me say that as a former federal regulator, I’m
disappointed that this was
the best product New York State could come up with after a year of
information gathering. For those who care about working within the
regulatory environment, they need to comment on these proposed
regulations to even have a chance at modifying them.
More broadly, if the Bitcoin community wants to influence the
regulatory environment, then much more education of Congress and their
staffs, and regulatory agency staff needs to take place. And some other
industries have a better regulatory environment because they do a better
job self-regulating. I know that is tougher to do in a decentralized
environment that cryptocurrencies exist in. There also needs to be a
greater understanding that the federal government is not monolithic with
its regulatory authority.
Instead, it is dispersed to a loose federation of agencies that don’t
necessarily coordinate (and sometimes compete) with each other. Lastly,
if federal regulators move too slowly, then you will see more states
stepping up. That results in a patchwork environment different in all 50
states, much like how health insurance is regulated.
CT: How can Bitcoin startups make the transition from fiat to virtual currency easier for users?
EM: There are already a lot of user-friendly aspects
to Bitcoin applications but more progress is needed. People will use
Bitcoin only if it is more convenient, cheaper, and safer than any other
alternative for that particular transaction. All the venture capital
and private equity money going into Bitcoin will result in better products and services that will be even easier to use.
CT: Besides Bitcoin, are there any other virtual coins that you are interested in or watching?
EM: I’m still pretty new at this but it seems to me
that the Bitcoin is the most important of this generation of
cryptocurrencies. It certainly is the largest in market capitalization,
has the biggest name recognition, and received the most investment. So
if there is any one cryptocurrency that has the best chance of becoming
mainstream, it’s likely Bitcoin.
But it is also possible that this generation may not make it, and it
won’t be until the next generation that cryptocurrencies becomes
mainstream. A good analogy might be with how the first generation of
search engines like Netscape eventually gave way to Google.
CT: Would you recommend people to invest their money in cryptocurrencies?
EM: Bitcoin is many things including being an
investment. I would personally treat it as a speculative investment and
only invest if you are willing to take a loss. While I think Bitcoin has
tremendous upside, I would not make that the centerpiece of my
portfolio. So depending on your investment goals, age, and appetite for
risk, a Bitcoin investment is something to consider.
Expert commentary:
Rik Willard:
I think Mr. Moy is pretty much spot-on across the spectrum of Bitcoin issues. He makes three points that have a particular resonance: first, he acknowledges that as banks embrace the further digitization of money, we will most likely see a hybrid of the efficiencies of Bitcoin merged with more traditional financial practices. Second, Moy sees Bitcoin as a market entry brand - so, while it has the most momentum of any other cryprocurrency in existence, it may not necessarily be what we end up actually using ten years from now. Third, he observes that people will use the payment method that is easiest at the point of sale... I agree with him, but with the caveat that we will see currencies that are developed for specific use-cases and relevant to that use, which makes it easier in a different way. One can envision a coin for children's groups, for homelessness, for almost anything where people are engaged in a cause. It is the nature of capitalism to seek out markets, and these "engagements" are actually economies waiting to happen. We now have the ability to create a vast array of clustered, federated and decentralized micro-markets which do not necessarily affect the totality of economic endeavor - but nevertheless, serve very specific economic concerns. To me, this is one of the really special gifts of the cryptocurrency movement.
Source : http://cointelegraph.com
Take Bitcoin Price Predictions with a Grain of Salt
Bitcoin price predictions are fun exercises, but you should take them with a grain of salt.
Bitcoin
price predictions are a staple topic of discussion in the
cryptocurrency community. However, it is important to remember that
although speculating about the Bitcoin price is fun, it is far from an
exact science.
Bitcoin Price Predictions
Bitcoin
price predictions are immensely popular. A quick Google search for the
term yields 377,000 results, an astounding number for a technology that
gained mainstream recognition less than a year ago. Their soaring
popularity stems from the fact that despite Bitcoin’s increasing
acceptance and credibility, the Bitcoin price still fluctuates,
sometimes wildly.
The reasons behind Bitcoin’s price fluctuations
are not always clear, especially to people who are not high-volume
traders and do not have countless hours to monitor Bitcoin price charts.
Many people rely on Bitcoin price prediction models to forecast the
value of their investment. Others use them to determine when the Bitcoin
price will reach its cheapest point, so they can buy it at a relative
discount, and when it will reach a peak, so they can sell it for maximum
profit.
CCN recently explained some of the major factors affecting the Bitcoin price. Economists use these generalized factors, among others, to create both short-term and long-term
Bitcoin price predictions. Unfortunately, these predictions are almost
always proven wrong, upsetting those who blindly followed their advice,
ignoring disclaimers warning that predictions are mere speculation. Even
the most accurate Bitcoin price prediction tools can only boast relative short-term precision.
Why Bitcoin Price Predictions Fail
Bitcoin
price predictions fail because humans have limited mental capacities
and can never comprehend the intricacies of the Bitcoin economy. At
present, there are 1,521,704 Bitcoin
addresses with balances higher than $1 and an average of more than 3,000
Bitcoin transactions per hour, according to BitInfoCharts.
It would be ludicrous to believe economists can comprehend the
motivations and psyche of every person participating in the Bitcoin
ecosystem, and as Bitcoin use grows, the ecosystem’s complexity will
increase.
Granted, there are
overarching factors that influence investor speculation, such as
merchant acceptance and regulation, but the the Bitcoin economy’s
ultimate drivers are factors much smaller than economists can see.
Unexpected medical expenses force a man to sell his bitcoins to pay for
his surgery; a woman decides to convert her quarterly bonus check
into a Bitcoin investment. Though on an individual level they do not
have the impact of Dell’s decision to accept Bitcoin, millions of minor decisions decide the direction of the Bitcoin economy.
F.A. Hayek observed that no economist possessed the ability to comprehend an economy’s complexity.
Though
he did not live to encounter Bitcoin, famed economic theorist F.A.
Hayek alluded to humanity’s inability to make economic predictions
throughout his writings.
[N]o man or group of men possesses the capacity to determine conclusively the potentialities of other human beings and that we should certainly never trust anyone invariably to exercise such a capacity.
Elsewhere, he adds:
The more civilized we become, the more relatively ignorant must each individual be of the facts on which the working of his civilization depends.
Hayek argued that because economies are
inherently incomprehensible, governments should not attempt to
manipulate them through policies designed to spur spending and growth.
Thankfully, Bitcoin’s current decentralization precludes government
attempts to plan the economy, but Hayek’s observation about the
limitations of economists should influence how we view Bitcoin price
predictions.
Take Bitcoin Price Predictions with a Grain of Salt
Despite
their clear pitfalls, it is doubtful investors will cease to use
Bitcoin price predictions. This is not necessarily a bad thing; Bitcoin
price predictions can serve as a helpful tool for understanding what the
Bitcoin price charts mean, and there is nothing wrong with seeking an
informed opinion about whether the Bitcoin price will go up or down in
the future. However, it is important to remember future price
speculations are nothing more than tools and opinions based on
generalizations and aggregations. They cannot account for the
multiplicity of factors affecting individual Bitcoin-holders.
As P.J. Delaney elucidates, the definition of an economist is “Someone that can use economic theory today to explain why he got all his predictions wrong yesterday.” While economists’ Bitcoin
price predictions may sound intelligent and attractive today, they may
not look so informed tomorrow. Take them with a grain of salt–or
several.
Source : http://www.cryptocoinsnews.com
Bridging the Talent Gap in the Bitcoin Industry
For a new industry to grow, it needs smart, dedicated
The simple fact is, although many startups are founded and initially
run by small, experienced teams, bitcoin entrepreneurs must hire skilled
staff in order to execute their company’s vision. BitPay, for example,
one of the industry’s largest merchant processors, is now in the midst
of expanding its team by 70 employees.
Adam Draper, whose startup accelerator Boost VC
incubates bitcoin-related companies, has observed other bitcoin
companies dealing with the challenge of talent acquisition firsthand.
Speaking to CoinDesk, Draper said that despite enthusiasm surrounding
bitcoin, the fact is many people simply don’t have the skills necessary
to succeed in the industry:
“So many bitcoin companies are emerging in the startup space, but when it comes to hiring after co-founder status, all companies are competing very heavily for a very small pool of talent.”
Further, given the bitcoin industry’s issues explaining its message
to the broader consumer public, a portion of the qualified applicants
may be getting turned away.
Michael Gronager, chief operating officer of San Francisco-based exchange Kraken,
said that, even in the technology nexus of the Bay Area, many job
opportunities in the cryptocurrency space might still seem like a gamble
to prospective job seekers, adding:
“It is always hard to attract talent to startups, and it is even harder to attract talent to a startup in a new ‘risky’ technology.”
This need for top-tier talent, in a wide range of specialities, was also on display at recent Bitcoin Job Fair events. Held in San Francisco and New York, the meetings drew hundreds of job seekers along with top industry companies such as BitPay, Coinbase and Xapo.
Investments don’t guarantee talent
Owing to the immense potential of bitcoin and its underlying
technology, as well as the now proven abilities of some of its top
companies, the size of the industry’s investment rounds has been on the
rise.
Bitcoin wallet provider Xapo, which has secured $40m in funding over
two rounds, has lead the pack so far in 2014. However, the
California-based company has been closely followed by BitPay and mining
chip manufacturer Bitfury.
But acquiring capital isn’t the hardest part of building a top-tier company, Draper told CoinDesk, saying:
“It is harder to hire than raise money for bitcoin companies.”
Boost VC’s newest accelerator class has 12 bitcoin startups. That’s
more bitcoin companies than Boost VC has ever had previously, and it
means, in due time, those companies will be looking for marketing,
customer operations and, most importantly, software development talent.
Building trust
However, despite difficulties attracting talent – not to mention how
much it costs to hire developers in and around the industry’s central hub of San Francisco, bitcoin observers think the cryptocurrency industry is on the cusp of breaking through.
Bill Tai, an investor, early miner and board member of ASIC manufacturer BitFury, thinks the bitcoin ecosystem has enormous potential to expand:
“Everything about [bitcoin] is very much in its infancy. The aggregate market cap of bitcoin in the whole scheme of the world’s value of all currencies, it’s negligible. You wouldn’t even notice it. It’s like a rounding error.”
Considering bitcoin’s primary competitor right now is fiat money, Tai
says that the attraction to bitcoin-related career opportunities has a
lot to do with how digital currency is perceived by the majority of
people.
He explained:
“I think it takes time for people to build trust and credibility [in bitcoin] both as a currency and as a place to bet your career.”
Fans but not fanatics
There has been plenty of discussion about how bitcoin can
revolutionize a number of sectors ripe for improvement, with financial
services, legal contracts and capital markets being but a few examples.
That’s why hiring managers in the bitcoin industry are looking for
people who want to play by the rules – even though entrepreneurial
cryptocurrency ventures do, of course, require some risk-taking by
nature.
Kraken’s Gronager said:
“We want highly skilled, hard working people that are fans of bitcoin as a technology, and perhaps less as a movement – you need to be able to separate business from politics if you want to operate in the highly regulatory space of financial services.”
A migration is slowly starting to happen – people with development
skills, in particular, are increasingly moving from big technology
companies to bitcoin startups.
Some time ago, litecoin creator Charlie Lee left Google, and he now works as a software engineer at Coinbase. Similarly, Ben Davenport moved from Facebook to become a co-founder at multi-signature startup BitGo.
Tai told CoinDesk that engineering talent migrating to bitcoin
companies might require network effects to take place, citing the rise
of social networking companies in the first decade of 2000 as an
example:
“It wasn’t very common to have the mainstream engineers of that era going to Facebook. It took Facebook, to get that credibility, several years.”
Filling the need
The issues facing bitcoin need to be solved by smart people with the
skills to develop, communicate and strategize its success. At the same
time, though, there hasn’t yet been a mass migration of talent from
social media or enterprise software over to the digital currency.
Even so, the ones who do get in early may have opportunity to create real change – and perhaps receive a windfall.
Kraken’s Gronager said:
“Bitcoin has some issues that need to be resolved in order to unlock the potential for its mainstream use as a payment and ledger technology. The startups will be vastly rewarded for doing so.”
As the adage goes, for success, startups need find a problem and
provide an elegant solution solution. This could well be why there is a
recruiting company in Adam Draper’s most recent Boost VC class trying to
tackle the talent issue.
The startup, called Honyebadgr, is run by three experienced recruiting professionals who focus solely on finding skilled workers for bitcoin companies.
Draper told CoinDesk:
“One of many reasons for Boost accepting a bitcoin recruiting company [is that] the bitcoin services space is heating up with necessary product.”
That ‘product’ Draper is referring to is talent. And there’s not
enough of it – a situation that will probably continue for some
time, especially within the field of computer science engineering.
For bitcoin, at least, Honeybadgr could be a valuable connector in the industry.
“We believe that by exclusively aligning ourselves with a niche
vertical like bitcoin, we can provide a more tailored candidate
experience,” said Ryan Peterson, one of Honeybagdr’s co-founders.
Playing matchmaker
Aside from issues stemming from possible New York regulation and banks shutting out bitcoin companies, finding talent to work in the bitcoin industry is a problem that needs to be addressed.
Cryptocurrency-focused recruitment agencies are one resource to help this, but positive developments, such as Dell accepting bitcoin,
help raise awareness and legitimacy for the digital
currency – especially in tech-oriented crowds that might be looking for
new job opportunities.
Yet, Tai believes that most people don’t want to bet on a job in bitcoin – right now. He said:
“I think it’s because people just aren’t paying attention. To many people, the US dollar is good enough. So they don’t bother [looking for work in bitcoin].”
Honeybadgr’s Peterson said from his experience, however, there are more people working on bitcoin than perhaps some realize.
That’s the reason he co-founded the company, and why Draper has put
Honeybadgr in its latest Boost batch – they can help make career
connections between talented people and bitcoin startups looking to
hire.
“We have found that many of the ‘smartest people in the room’, so to
speak, are working on bitcoin, albeit from behind closed doors. We can
help coax them out of their shell and turn their passion from a
moonlight hobby into a full time career,” said Peterson.
Source : http://www.coindesk.com
Argentinian Bitcoin Exchange Loses its Bank Accounts
Argentina-based bitcoin exchange Unisend stopped customer deposits
and bank transfers on Monday after Banco Santander Río and Banco
Gailicia suddenly closed its company accounts.
Santander and Gailicia sent Unisend written notification on 28th and 31st July, respectively. Each cited Article 792 of Argentina’s code of commerce,
which says that a banking relationship can be terminated at the request
of a bank or its client provided 10 days notice is given.
Unisend partner José Rodriguez told CoinDesk that the exchange does
not expect its services to be affected long term by the move, stating:
“We have other banking relations and are working to open new ones in case any other contingency arises. Operations are continuing as usual.”
About 90% of users transfer money to Unisend from their bank
accounts. The other 10% deposit cash through payment processors like RapiPago ARS, PagoFacil, CobroExpress and BaproPagos, among others.
For the time being, users can still use their bank accounts to
transact with the exchange as the Unisend accounts aren’t set to close
until later this week. The company aims to have its other accounts ready
for user trading before then.
Government activity
Rodriguez said that the company logged one of its most active trading days on 31st July, the day after Argentina defaulted on its debt. That day saw trading activity hit a month-long high, he said.
He also explained that by his observations, trading activity is closely connected to price changes, and that last week brought the only surge he’s seen in the last 60 days that was not related to price.
Rodriguez said:
“We think it was mostly for users to keep their money safe elsewhere, and not the Argentinian peso. Bitcoin users feel safer in bitcoin […] due to high inflation, unknown economic forthcomings, bank restrictions and capital control, restricting free movement of capital.”
But, the news of the bank account closures also came just days before new rules imposed by Unidad de Información Financiera (UIF), Argentina’s chief anti-money laundering (AML) agency, took effect on 1st August.
Last month, the UIF ordered all financial services companies in the
country to report transactions that involve bitcoin and digital
currency. The document it issued suggested that the agency would act as a
conduit for information to enable greater oversight of such digital
currencies.
“We rather suspect it has to do with the new UIF resolution and
reporting obligations Resolución N0. 300/2014,” Rodriguez said about the
account closures.
The Argentinian bitcoin community
Whatever the reason for the banks’ actions, Argentina still stands as
a country that bitcoin champions have looked to as one that can best
demonstrate the potential of bitcoin. The country has an active and growing community and bitcoin companies with well-established presence.
There is still no mass adoption, Rodriguez said, but people that
understand its potential and reach stay tuned, or attempt to get more
actively involved.
He continued:
“There have been initiatives which are moving faster than the rest of Latin America, like the Argentinian Bitcoin Embassy, Argentinian companies getting funding and growth, professionals focusing and creating projects and companies related to bitcoin, co-working spaces and frequent events around the country. By the end of the year, this could lead to the mass adoption as an alternative economy.”
Latin American presence
Unisend is Argentina’s first homegrown bitcoin exchange,
started by Pablo and Tomas Eterson this January. Rodriguez joined in
March. According to local sources, it may have been the only exchange
service to have had domestic corporate bank accounts, suggesting a
widespread crackdown on the country’s bitcoin businesses may not be
likely.
Other major bitcoin exchanges and buying services catering to the
market include Bitex.la, which has its corporate operations distributed
internationally, and ConectaBitcoin, a peer-to-peer alternative to
LocalBitcoins.
Rodriguez said the team wanted to create a trading platform that
offered person-to-person trading and provided an option for those that
want to connect with their bank accounts, something many bitcoin
enthusiasts oppose.
He said:
“Our plan is to become the first Latin American exchange with local banking relationship in various countries in Central and South America, as well as bringing bitcoin solutions such as payment processors, exchanges and remittances for major adoption.”
The three-man team is replicating its business model in Mexico. Unisend Mexico
is poised to open within the upcoming two weeks. An official launch
date has yet to be determined but it is already open to users for
registration.
“More products and services need to be integrated to the economic
cycle,” Rodriguez said. “This would create a growing alternative
economy, which could be more stable and efficient than the regular one
is right now, and have a wider reach.”
Source : http://www.coindesk.com
Second Round Winners Named in MIT Bitcoin App Contest
The MIT Bitcoin Project has announced the second-round winners in its summer-long app creation competition, the MIT BitComp.
The winners are Tomorrow Market, a decentralized futures market;
Fireflies, a bitcoin-based platform for crowdsourcing goods and service
delivery; and Ethos, a system that establishes decentralized online
identities.
Of the three, Ethos was the only entry that also succeeded in the first round.
The competition began in early June
and is aimed at stimulating development in the small but growing
bitcoin crowd at the storied Cambridge, Massachusetts university.
$15,000 in cash prizes are being awarded to developers within the
community throughout the event.
Contributions to the bitcoin ecosystem
The MIT Bitcoin Project is spearheading a grassroots effort to create what some have called the world’s first bitcoin economy, with the competition acting as a catalyst for up-and-coming developers.
The conclusion of the first round, which ended in July, saw the distribution of three $250 cash prizes to contestants, and this next round resulted in three prizes worth $750 apiece.
For the second round of the MIT BitComp, entrants were asked to
submit a promotional video detailing their projects and showcasing their
capabilities. The winning videos demonstrate possible use cases for the
apps, setting the stage for the last round when demonstrable versions
of the apps will be judged.
Creativity and innovation
Richard Ni, one of the competition organizers, told CoinDesk that
this round is a good opportunity for entrants to get creative with their
projects, saying:
“We’re very happy with the quality of submissions we received for round two. Making a video doesn’t necessarily contribute to the end product, but our participants put a lot of time into making high-quality videos anyways.”
He added: “It’s exciting to see these projects progress, and we’re
looking forward to seeing even more polished projects for round three!”
The next deadline for the MIT BitComp is 24th August, after which the
panel of judges will select finalists for five categories. Each winner
from the upcoming round will receive $1,500.
Sink or Swim: Bitcoin’s Progress in France
The
French Senate recently published a report on bitcoin which warned that a
continued focus on the digital currency’s risks could distract from its
true potential, especially its “nearly inexistent” transaction fees and
robust security.
Though the document
calls for some level of state regulation, it seems fair to say that the
French government’s approach to bitcoin is becoming increasingly
positive.
But do changes at Senate-level reflect a real shift in French
attitudes towards digital currencies? Is bitcoin really catching on in
the country?
Advocacy centres and hackathons
“The ecosystem isn’t really developed yet, but the scene is starting
to shake up,” bitcoin advocate Thomas France told CoinDesk. If anyone
were to know about it, it would certainly be him: he co-founded the
Association Bitcoin France (ABT) alongside current president Philippe
Rodriguez. He is also part of the team behind La Maison du Bitcoin, Paris’ bitcoin advocacy centre.
The only centre of its kind in Europe, the 220-square metre
space opened on 13th May in the heart of the city. It houses several
co-working spaces and one of France’s two bitcoin ATMs, alongside
monthly bitcoin meetups and regular bitcoin 101 events. Importantly, the
centre is open every working day for anyone wanting to learn more about
cryptocurrencies.
A hackathon the centre organised in June proved to be a success, as Thomas explained:
“It definitely was a great start, and people were full of ideas. We were surprised by the amount of developers who turned up, and happy about the number of talented people willing to invest their time, money and brains on bitcoin.”
While definitely promising, events like this still remain anecdotal:
the interest may be here, but it hasn’t yet turned into a more concrete
reality.
Not just Paris-centric
Ranking 4th behind the US, Germany and the UK, France has 5.18% of
the world’s bitcoin nodes (the relay points that store, verify and
transmit transactions across the network). The country comes 8th in the
world for the number of people who have downloaded the original bitcoin client in the past year.
Despite this, the country lacks brick-and-mortar shops accepting the cryptocurrency: the total figure (as listed on CoinMap) is known to be over 40 but almost certainly below 100.
This doesn’t keep Thomas France from being optimistic about the
future involvement of businesses: there are, he says, a lot of shop
owners visiting La Maison du Bitcoin in order to learn more about the
technology. This includes a restaurant in the same street as a building,
which recently started accepting the currency.
Though Rue du Caire has seemingly become the nation’s bitcoin hub,
this doesn’t mean the rest of France hasn’t been doing some catching up.
There are frequent bitcoin meetups in Lille, Bordeaux and Toulouse
among other destinations, and there are several communities of miners
scattered across France. A quick look at CoinMap also shows that some
local businesses have started accepting bitcoin in smaller towns: they
are still few and far between, but a beginning nonetheless.
A bout of bad news
France’s small but steadily growing community may have hit a road bump, however, given recent bad press in the country’s media.
The first issue arose on 7th of July when two people were arrested and an illegal bitcoin exchange
was dismantled in Cannes and Nice. The police seized a portfolio of 388
bitcoins, in what was the first ever judicial action resulting in the
closure of an illegal exchange for virtual currency in Europe.
Less than a month afterwards, on 4th August, Le Monde ran a comprehensive piece on the multiple failings of Mark Karpeles, the (Gallic) man behind the downfall of one-time biggest bitcoin exchange Mt. Gox.
The newspaper found that before his short-lived career in bitcoin,
the CEO had been sentenced to a year in prison and €45,000 in damages to
his ex-employer on hacking charges.
Government to the rescue?
Though both these stories involve outright criminal behaviour rather
than anything that would be considered normal bitcoin activity in the
community, the harm may have already been done.
Given that cryptocurrencies being used as intended will hardly make
headlines, negative articles may well be the only things many people
have heard about bitcoin. The idea of a virtual currency, in its current
state, may already only appeal to a minority, and negative coverage
from mainstream outlets probably do not help.
This is where today’s Senate report could come into
play: showing that virtual currencies are safe enough to receive some
level of backing from the government may be all that is needed to regain
some public confidence.
This will likely happen before the end of the year, but in the
meantime, bitcoin in France may remain the hobby of a minority for a
little while longer.
Source : http://www.coindesk.com
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