Industry Reactions to New York’s BitLicense Proposal

The recent publication of ‘BitLicenses’ proposals by the New York State Department of Financial Services (NYDFS) and its superintendent Benjamin Lawsky may be the most controversial talking point to hit bitcoin in its history.

Only a few weeks have passed since the proposals were released, but the response has been strong from New York businesses to those far away.

The NYDFS initially opened a 45-day window for those in the digital currency industry to respond and provide recommendations based on the proposal. The time was noticeably short, given the diversity of affected participants in all geographic locations and the lack of immediate access to legal counsel many would have.

As a result, a petition signed by nearly 500 organizations and individuals has requested that the NYDFS provide more time for the digital currency industry to prepare submissions and opinions. Additionally, some of the biggest companies in the ecosystem, including Coinbase and Circle, are expected to publish their own detailed responses to the proposals imminently.

How Lawsky views the proposals

Interviewed on WCNY’s Capitol Pressroom podcast on 7th August, Lawsky gave strong hints that prevention of money laundering is “one of the most important things” NYDFS addresses.

He also admitted several times that digital currency technology is “powerful”, and expressed a desire to ensure innovation would be “hubbed in New York”.

Admitting that money laundering is widespread even in the ‘traditional’ financial industry, he said the NYDFS should be “an aggressive, but fair, careful, on-top-of-it regulator who’s trying to allow the businesses to thrive”.

The CoinDesk survey

CoinDesk published an article with industry responses to the BitLicenses proposal immediately after its publication.

We have since approached the following representatives from various facets of the bitcoin ecosystem for more detailed thoughts, now that the proposals have had some time to sink in. Those who participated in the interviews include:

• Jacob Farber, Perkins Coie, legal expert
• Patrick Murck, General Counsel, Bitcoin Foundation
• Jordan Kelley, CEO, Robocoin
• Haseeb Awan, BitAccess
• Michael Terpin, BitAngels
• Erik Voorhees, investor
• Tim Byun, Chief Compliance Officer, BitPay
• Jim Harper, General Counsel, Bitcoin Foundation
• Perianne Boring, Chamber Of Digital Commerce
• Christopher David, Coinvox
• Roger Ver, investor
• Will O’Brien, CEO and Co-Founder, BitGo, Inc
• Adam Draper, Boost VC
• Halsey Minor, Bitreserve

While a majority are in favor of some kind of regulation, there is a unanimous opinion that the proposals presented by Lawsky and NYDFS are overly broad and restrictive, and could have a deleterious effect on both financial innovation and New York State’s prestige as a leading financial center.

Others said bitcoin businesses could self-regulate, or that enough ‘regulation’ is already built into the technology itself.

General responses

Patrick Murck, general counsel at the Bitcoin Foundation, said it was too early:

“I think it’s unfortunate, it’s not timely. The industry is very, very young and trying to regulate it now is entirely premature. Like the Internet, you need to give these things time to develop and see where the problem areas are.”

Jacob Farber of legal firm Perkins Coie said he had originally not intended to speak out against the BitLicense proposal, but is now glad he has.

“I think that if the rules proposed in New York are adopted as is, it’s really, really bad, at least for the startups doing the innovation that we care about, the community we all live and work in.”

CoinDesk asked the following questions:

Do the NYDFS proposals create high barriers to entry for new or financially unsupported players?

The respondents were unanimous here in their opinion that regulation definitely raised the bar for entry level by increasing costs for startup proprietors who probably could not afford the legal fees required.

Perianne Boring pointed to specific clauses in the proposals concerning money laundering, saying they were only appropriate for a small fraction of bitcoin companies, such as larger exchanges.

Haseeb Awan said banks only have a low rate of fraud because of their immense scale, with Michael Terpin adding that the hurdles companies would have to jump through are mostly “unnecessary”, and not even required for transmitting cash. Adam Draper agreed, saying fingerprinting requirements are definitely beyond most startups’ capabilities.

Tracking transmissions and keeping ten years of records are also beyond the capabilities of most small businesses, Tim Byun said, adding that even well-funded startups are not entirely immune to the high costs of anti-money laundering (AML) compliance.

Christopher David said the proposed rules would “punish small entrepreneurs and stifle innovation” and called for BitLicenses to be optional.

Roger Ver, a fervent opponent of the proposals, said BitLicenses are “just a guise to protect the banks and other established industries” from competition that bitcoin would bring.

Erik Voorhees suggested NYDFS is raising the bar deliberately to remove smaller players. He said:

“This will eliminate the college dorm room startup. It will eliminate the young entrepreneur who is willing to put in 100 hours per week, but who doesn’t have $100,000 for his first two months of legal bills. It will make innovation the purview of large companies, which is to say, it will diminish innovation.”

Boring went on to say BitLicenses would “inhibit innovation and crush startups”, pointing out that the proposals would restrict bitcoin companies from acting like banks (eg by prohibiting lending) while regulating them the same way they do banks.

Jim Harper was more neutral on the topic, but agreed any regulation by nature raises barriers to entry. He said:

“The question is whether the proposed regulations have benefits that justify these costs. It’s certainly possible that they do.”

The NYDFS needed to publicly release the research it conducted in constructing the proposals, in order for the community itself to decide if those costs and burdens on startups are justified.

Is the NYDFS definition of ‘virtual currency’ and ‘virtual currency business activity’ too broad?

“Likely,” said Will O’Brien.

Yes, not all digital tokens are the same, added Michael Terpin. Those used for transactions and as stores of value are different to the kind that aim to validate contractual rights on a block chain. Tim Byun agreed, pointing out that the NYDFS defines ‘virtual currency’ as a digital unit in a similar way to the IRS’ ‘property’ definition, but still requires Currency Transaction Reports (CTR), which now apply only to money.

Broad definitions are probably deliberate, said Haseeb Awan, with Christopher David agreeing that regulators are rarely specific when drafting laws for new technologies. Specific categories of companies and optional regulations, he added, are better.

Awan said:

“The goal here is to catch bad actors and right now those people don’t have to jump through hoops. I think that’s the point of being broad.”

“Bitcoin is real, not virtual,” said Jim Harper, which is the reason NYDFS felt it necessary to draft the proposal in the first place. Insufficient consideration of the bitcoin protocol and technology likely caused the broad definitions which can hopefully be fixed by the notice-and-comment period.

Adam Draper pointed out that there are many different types of bitcoin businesses, saying:

“An exchange shouldn’t be regulated the same as a wallet and a wallet shouldn’t be regulated the same as a payment processor. They are all different businesses.”

Erik Voorhees said the government has no right to dictate how people use this new distributed technology, as they are “the same people who preside over and bless the morally repugnant legacy financial system, and turn a blind eye to the biggest financial scam in history (central banking)”.

Releasing a new digital currency at all without a licence and compliance would now be illegal, Voorhees said, adding that businesses would only get approval after becoming tools of surveillance.

Is user anonymity/privacy something the bitcoin community should safeguard?

Reactions to this question were mixed and qualified, showing the largest diversity of opinion. Most were of the view that a balance is required.

“No,” said Adam Draper, without elaborating.

“Yes and no,” said Tim Byun. Yes because existing norms surrounding consumer privacy, physical security and protection from fraud and identity theft demand it; but no because bitcoin should comply with the existing risk-based know your customer (KYC) and other reporting rules that the fiat currency world already has to comply with.

Jim Harper said surveillance of transactions is at odds with both bitcoin users’ and consumers’ privacy demands, and the level of privacy they could expect is similar to that dictacted by deals between corporations and governments in the fiat currency realm.

He added:

“Many see an opportunity in bitcoin to restore user-defined privacy without giving up the benefits of financial services and commerce.”

Governments should be able to examine transactions in narrow instances where it truly feels it is stopping terrorism or other crimes, said Michael Terpin. But thousands of cash transactions happen every second without an ID requirement, and police are not legally allowed to force themselves into homes at night randomly to ensure no crimes occur. There needs to be just cause for adding these conditions to digital currency.

Christopher David pointed out that the theft of millions of customers’ personal data from Target is one reason to fear the centralization of personal data, and that users should be free to decide what information they provide.

Will O’Brien argued in a similar vein, saying the public ledger of bitcoin holdings and transactions could also be examined by a nefarious party. BitGo‘s BIP32 ‘Hierarchical Deterministic’ (HD) wallets could address this, he said.

Not surprisingly, voluntary society proponents Voorhees and Ver came out most fervently in privacy’s defense. Ver said:

“Financial privacy is a fundamental human right.”

Bitcoin doesn’t provide anonymity anyway, said Voorhees, but added that anyone not accused of a crime has a right to privacy in finance just as they have the right to lock their doors and put shades on their windows.

“Creeping surveillance of innocent people is wrong. It’s wrong when North Korea does it. It’s wrong when Saudi Arabia or China does it. It’s wrong when Benjamin Lawsky and NYDFS does it.”

Perianne Boring also reminded everyone that bitcoin is only pseudonymous, comparing it to the ‘numbered’ accounts of Swiss banks that hold detailed client information on which customers rely for their secrecy for protection (often for political and human rights reasons). Transactional secrecy is also necessary for some business purposes, she added.

Will startups now exclude New York customers and otherwise avoid the jurisdiction of New York whilst they get off the ground?

“Bitcoin is not local. The NYDFS is trying to make it local, which is impossible,” said Awan.

Opinions here range from “that would be a tragedy” to “we’re already seeing it”. Draper said he hopes another state, perhaps Texas or Colorado, might seek to attract business away from New York with more favorable regulatory conditions. This competitive governance could then see New York change its rules if it sees job losses.

Halsey Minor, of BitReserve, seconded Texas as a potential future financial center, saying “the world is a very competitive place for companies and jurisdictions”. He expressed hope that few other states or countries would ever follow New York’s lead after seeing the results.

Several respondents said they are already aware of businesses either preparing to move out of New York or (for those outside the state) planning to block any customers whose IP addresses are located there.

Boring said the current proposals risk cutting New Yorkers out of a crucial aspect of the digial economy, creating what she called a kind of “Cyberia” which could even injure New York’s standing as the world’s financial capital.

The Chamber of Digital Commerce‘s official statement on the matter reads:

“These regulations do not even highlight the distinction between digital assets and digital currencies. Without representing the difference between the two, the NYDFS is issuing indiscriminate guidelines that threaten to destroy bitcoin. Numerous businesses have told me they are ready to block out all New York IPs from their servers, and will not do business in this jurisdiction if these proposed regulations are enacted.”

Ver and David also claimed to know several examples of bitcoin businesses planning to move out of New York or even the US altogether. Ver pointed out that US residents are already blocked from acquiring the Xapo bitcoin debit card.

David added:

“The consensus among bitcoin entrepreneurs at our recent conferences in Chicago and San Francisco has been to block New York customers rather than comply with the regulations.”

Terpin and Byun said it is “quite likely” or “quite possible”, and could get worse if businesses simply decided to shut down or block US customers altogether and that it is natural for businesses to choose the most favorable conditions if given a choice.

Voorhees went a step further, vowing to “block New York entirely if the BitLicense passes in its current form,” and added that most other bitcoin entrepreneurs he knows feel the same. “Prudence and principle” dictated the blocking of jurisdictions where one was legally forced to spy on innocent people, he said.

Harper questioned whether businesses would follow through, saying:

“The threat to exit a jurisdiction is often made in haste, and most businesses will want to serve New York customers. But bitcoin businesses see themselves as serving a worldwide clientele, so losing the New York market is not as big a concern is it might be for US-only companies.”

Do the promised business benefits of increased regulatory certainty (eg banking relationships) outweigh the costs of compliance?

Some respondents debated whether regulatory certainty actually produces benefits. Voorhees said the question is “somewhat misguided”, adding that tenuous relationships between bitcoin businesses and banks are due to risks associated with existing KYC/AML regulations.

It isn’t bitcoin’s unregulated status that makes bitcoin businesses risky to existing financial institutions, he claimed. The industry is so heavily regulated today, and in danger from unanticipated interpretations or retroactive rules, that it makes any financial innovation seem perilous.

O’Brien added that comparing regulatory benefits to costs was “too simple a trade-off”, pointing to Texas as an example of bitcoin companies complying with existing laws instead of being burdened with new ones. Draper also cited Texas’ example, repeating that it, like Colorado and California, offers more attractive alternatives.

Terpin suggested bitcoin has regulation built into its very structure, saying:

“The original reason for most financial regulation is to stop fraud and theft. The block chain has mathematical methods to prevent most of the crimes that happen routinely on Wall Street, so it should require less regulation, not more.”

Boring and Draper agreed that sensible and proportionate regulation is necessary. Draper said that BitLicenses are the result of “everyone in the state adding a rule to the list”, while Boring’s opinion is that a lack of understanding of the technology and concepts involved in bitcoin could lead to overbearing rules that could eliminate economic benefits.

Traffic lights are a good example of effective, unintrusive regulation, Boring added.

Byun said time would tell, but the current proposal “as-is” could be too heavy and outweigh the benefits, with David adding it would “force everyone into the same one-size-fits-all scheme”. Water it down and make it optional, he maintained. Awan said it “may be too early for this sort of licensing”.

The trade-off is irrelevant anyway if regulation is illegitimate, continued Ver. He said:

“At the end of the day, human beings have a fundamental right to engage in whatever sort of peaceful financial transactions they want, and don’t require the permission of other human beings who they have never met.”

Is there a specific area of the proposal that you strongly disagree or agree with?

“Too many to list,” said CoinVox’s David.

He, Byun and Terpin all agreed that the rules put early-stage startups and entrepreneurs at a disadvantage with its burdensome compliance and security costs, thereby killing innovation.

The breadth of the requirements and amount of data collecting are also primary concerns, with bitcoin businesses appearing to suffer greater regulation than other payment methods.

“The United States Postal Service sells money orders up to $3,000 without any ID,” said Byun, and various reloadable prepaid cards required no KYC compliance for up to $1,000 in the US and €2,500 in the European Union. BitLicenses’ Virtual Currency Transaction Reports (VCTR) should be eliminated since virtual currencies are just ‘digital units/assets’, and only required when exchanging for fiat currencies in amounts over $10,000.”

“Would Mt. Gox still have happened [with these regulations]?” asked BitAccess’ Awan, saying only proof-of-solvency would have protected user deposits there.

The Bitcoin Foundation may raise the issue of BitLicenses being too technology-specific, said Harper, sweeping in software companies that never handled actual funds. Keeping detailed records of every transaction also had “privacy consequences”, he added.

Terpin also included among his concerns the provision that businesses cannot deal with any company without a physical address, and said the rule banning bitcoin businesses from keeping any profits in bitcoin are “ridiculous and likely unlawful.”

Ver again maintained that regulations by their very nature are illegitimate, while Voorhees said he believes in strong regulation, but only if that regulation is market-based.

He added:

“However, if I were to choose what is most problematic about the proposal, it is the unabashed spying upon users of bitcoin. Forcing every bitcoin company to spy on users, and feed this surveillance to the State, is horrendous.”

The authors of the proposals showed “Orwellian tendencies” and “should be ashamed”, he continued. “The bitcoin industry should fight this on every front.”

David also disagreed with the centralizing of user data with the government, especially since bitcoin’s very power comes from its decentralization. Lawsky employs the traditional negotiating tactic of tricking stakeholders into debating extreme ‘throwaway’ provisions in order to pass the others, which are just as restrictive.

He singled out Lawsky personally for criticism, saying:

“This is a political, careerist power grab on Ben Lawsky’s part and he needs to be held accountable for distracting the bitcoin community from productive efforts. Every minute spent arguing about government regulations is a minute not spent innovating and pushing the world forward.”

“Ben Lawsky thinks he has a right to interfere with the natural evolution of block chain technology. He and everyone like him need to be shown the error of their ways, and held accountable for slowing our progress.”

Will the BitLicense prove to be a boon or a burden for the industry?

Given their previous answers, it is unsurprising that most respondents chose “burden”, with Byun, Terpin, David and O’Brien all declaring that only a significant modification of the current proposals would mitigate this.

They maintained the theme that business would avoid New York, with Awan saying:

“Here is something to think about: If there are no bitcoin startups, the NYDFS can’t regulate anything.”

David added:

“The alleged benefits are nothing we as a community could not have earned ourselves through self-regulation and a continued maturation process. The NYDFS proposal as written will criminalize thousands of entrepreneurs who refuse to comply, forcing otherwise legitimate businesses into the black market.”

“Like all business licensure laws, it will be a boon for the established players, and a burden for the rest of humankind,” said Ver.

Voorhees added that New Yorkers would find themselves “ring-fenced out of the most important wave of financial innovation in America’s history”.

“But hey,” he concluded, satirically alluding to one of bitcoin’s negative associations, “at least they’ll be protected from terrorists”.

Source : http://www.coindesk.com

Mexican Bitcoin Exchange Bitso Launches 10% Referral Bonus

Mexican bitcoin exchange Bitso has exited beta with a number of initiatives to attract new users in the country.

The company first went live in April as the first exchange aimed at Mexico’s burgeoning bitcoin ecosystem, with features designed specifically for locals.

“As we are not a ‘cookie cutter’ exchange, we’re really able to offer services tailored to the particular needs of the Mexican market,” Bitso chief technology officer Ben Peters told CoinDesk.

For instance, the exchange is fully integrated with Compropago, a local payments service that allows Bitso users to fund their account with cash at over 130,000 terminals across Mexico, including some 7-Elevens and Walmarts.

As for its exit points, Bitso will charge 1% commission on all trades – previously free in beta. Bitcoin deposits and withdrawals, Mexican peso withdrawals by SPEI transfer and use of the platform’s Ripple gateway will remain free.

Most exciting to the team is Bitso’s new referral program, which pays users 10% of the trade commission generated by each new customer they bring to the platform.

Peters said:

“The market in Mexico is still very nascent, and so we’re doing everything we can do encourage participation. The referral scheme is a terrific way to directly involve our regular users in promoting this new economy in an inclusive way.”

The first Ripple gateway in Latin America

Peters said the company aims to boost Mexican interest in the fundamental benefits that cryptocurrency systems – not just bitcoin – can bring to the country.

“Our vision is to help Mexicans harness these technologies in ways that can make a profound difference to their lives,” he explained.

The platform claims to be the first Ripple gateway in Mexico and the Latin American region.

According to chief executive Pablo Gonzalez, Bitso’s partners see a symbiotic relationship between its Ripple Gateway and its bitcoin exchange, focusing on the value proposition the Ripple network offers outside its native currency, ripple (XRP).

He told CoinDesk:

“This is something we’ve found extremely helpful for bringing bitcoin liquidity to the Mexican market as it allows our market makers to quickly move in and out of Bitso.”

Playing for the same team

As the first Mexican bitcoin exchange, Gonzalez said he and his team have benefitted greatly from their first-mover advantage over the last four months.

Upon mentioning the progress of bitcoin exchanges MexBT and Unisend, alongside brokers Volabit and CoinBatch, he added that Bitso doesn’t view the other players in Mexico’s bitcoin economy as opponents:

“We are very glad to see these companies in Mexico as they cater to first-time bitcoin users, which helps grow bitcoin adoption in Mexico. We are looking forward to working with these companies in future.”

Gonzalez reiterated the company’s intent to instil and sustain knowledge of cryptocurrency and its technology and the ability to use the relevant tools to learn and help grow the crypto-economy.

Further, Gonzalez is a key participant in Mexico’s digital peso project, currently working to demonstrate the abilities of block chain technology by digitizing the fiat peso.

Source : http://www.coindesk.com

The Swedish can purchase Bitcoin through smartphones

 

 

bitcoincasino.info / August 10, 2014

Safello, a Swedish Bitcoin exchange, teams up with payment service Swish. This partnership will enable Safello users to purchase Bitcoin using their mobile devices. There is also another option that Safello clients get access to – faster and easier BTC transactions.

All one needs to do to become a Safello user is bind their bank account to their smartphone and download a special app. The app is available for all Android-, iOS- and Windows-based mobile devices.

One of the features of BTC payments through Safello is that they are verified no less frequently than once a day, which means all mobile transactions should be completed within just 24 hours. Sending and receiving bitcoins via Safello is commission-free.

Safello representatives say the collaboration with Swish is a step forward towards the innovation and convenience of their clients. Now, to make free instant transactions in Sweden, it is enough to open an account in any bank and download the application to the smartphone.

Source : http://www.thebitcoinchannel.com

Bitcoin 2 Business Congress will also host a Start-Up Show!

Bitcoin 2 Business main Focus Will Be on Bringing Together Entrepreneurs, Investors, Start-ups and the Most Interesting Personalities in the Industry

Brussels will hold the very first Bitcoin 2 Business (B2B) Congress on 16th – 17th October. It will be the first event with a B2B format meant only for entrepreneurs, investors, VCs and companies. Agenda will be also dedicated to support Start-ups and their projects.

“Boost your startup and get the attention your idea deserves!” is the motto for the Start-up show. Congress is a perfect chance to promote ideas by presenting it in front of well-known entrepreneurs, investors and VCs in Crypto community. Talk to the investors, get the exposure via media partners and expand your business in the Bitcoin industry. To apply for the show, buy at least one Congress ticket and apply with your project to congress@btc2b.com. By the end of September, the organizers will choose one Startup with the most interesting project that will also get an exclusive Promotional Meeting Desk worth 2 000 EUR at the Congress for free! 

“Part of our Agenda will be dedicated specially to Start-ups. They will have time to present their projects and approach the investors” says the organizing team and concludes “Start-ups in any stage of development are invited!”

Start-Up show is definitely a very interesting added value to the Congress. Among other confirmed speakers aka Topic Supervisors you can find well known personalities and Bitcoin ambassadors such as Matthew Roszak, Moe Levin from BitPay, Vitalik Buterin or Jacob Hansen from CrowdCurity which recently raised$1 Million to Crowdsource Security for Bitcoin Startups and many others. 

Agenda is now available on the official Congress website. Topics are designed to cover the most important issues concerning monetary future, business, merchant adoption of Bitcoin, regulation, investment etc. Every topic is expected to raise debates and some will include panel discussions to make sure we get the general point of view. 

So if you are a company, entrepreneur, start-up or investor looking for great networking and to meeting the key players from the industry, don´t miss your chance to be a part of this amazing and first of its kind event and get your ticket as soon as possible while the Earlybird prices last.

www.btc2b.com

congress@btc2b.com

Source : http://thebitcoinnews.co.uk 

Dell Receives $50K Hardware Order Paid in Bitcoin

Less than a month after it first began accepting bitcoin, Dell has received 85 BTC (over $50,000) for a PowerEdge server order.

NewsBTC first reported the story after Dell CEO Michael Dell tweeted the following:

It’s not known exactly who placed the order, but since Dell’s off-the-shelf Poweredge servers range from $299 into the thousands, someone likely now has a whole farm acquired with bitcoin.

One Twitter user pointed out how much Dell had saved by sealing the deal this way:

Bitcoin and serious hardware

While Overstock’s bitcoin customers have bought mainly sheets, cell phone accessories and audio-visual equipment, the nature of Dell’s core business meant some serious hardware purchases were more likely.

Dell is by far the largest enterprise accepting bitcoin in the world at this point, with $57bn in annual revenue. The previous record holder was DISH Network, with roughly 25% of Dell’s income.

The Texas-based computer hardware giant also marked its digital currency debut with a 10% discount for anyone purchasing its gaming-oriented Alienware machines with bitcoin. The company accepts bitcoin payments for US customers on any item on its Dell.com store site.

Dell’s CIO Paul Walsh hinted last month that Dell may pursue more extensive involvement in the bitcoin space, adding that accepting bitcoin was part of the company’s overall plan to align itself with technological innovation.

He continued that he expected many other merchants to join in soon, indicating a growing legitimacy for bitcoin among companies in the mainstream economy.

Source : http://www.coindesk.com

Blockchain Passes 2 Million Bitcoin Wallets

Blockchain now has over two million bitcoin wallets in the wild, having added roughly one million over the last six months alone.

The company tweeted the latest milestone late Sunday night, cementing its position as the world’s most popular bitcoin wallet provider.

Peter Smith, Blockchain’s COO, said:

“Being the first bitcoin company to reach two million wallets is an exceptional honour [...] The endorsement of the now millions of bitcoiners who have chosen to use our wallet is a distinction that truly humbles us as a team.”

Smith added that strong growth coupled with price stability is an indicator that the industry is moving towards a “transactions paradigm.”

Indeed, the company has witnessed rapid expansion in recent months.

Back in January 2013, Blockchain boasted more than 100,000 wallet users. The 500,000th wallet was created in late October and the company rewarded the lucky user of its 500,000th wallet with 10 BTC.

Blockchain passed the one million mark in January 2014 and by April it had about 1.5 million wallets. In other words, the organisation has doubled its wallet downloads in roughly six months.

Smith pointed out that downloads “exploded” in July, after its iOS wallet was re-launched and made available on the Apple App Store. Earlier this summer, the company also updated its Android wallet with a number of merchant-friendly features.

The competition

Blockchain is not the only bitcoin company to boast such figures. Back in February, San Francisco-based wallet provider and payments processor Coinbase entered six-digit territory and announced that it had more than a million wallets. The company had started with just 13,000 wallets in early 2013.

Bitcoin wallet provider MultiBit also passed the one million mark in March 2014. However, MultiBit cautioned that the statistics were not complete, as data on early adopter downloads dating back to 2011 was lost.

There is, however, an important caveat. A significant number of downloaded and installed wallets does not necessarily translate into active bitcoin users.

Wallets are frequently downloaded by people with a casual interest in bitcoin, which means a large number are inactive or abandoned. Blockchain.info charts shed more light on bitcoin user statistics, but it is still difficult to say how many truly active wallets are out there and how many have been abandoned.

Blockchain told CoinDesk that it is currently handling tens of thousands of transactions every day. An estimated $22bn in bitcoin transactions were made using Blockchain software so far.

Source : http://www.coindesk.com

Dignitas International: Bitcoin Holds Promise for Non-Profits

The global fight against HIV and AIDS is gaining ground, but the war is far from over. Around 6,000 people are infected with the virus each day and 19 million across the globe remain unaware of their HIV-positive status. Additionally, treatment – and by extension, survival – is something of a lottery.

A recent statement from UNAIDS executive director Michel Sidibé warned of a “fragile five-year window” to address the discrepancies in healthcare services worldwide, adding:

“Ensuring that no one is left behind means closing the gap between people who can get services and people who can’t, the people who are protected and the people who are punished.”

On the frontline of this daily struggle is Dignitas International, a Malawi-based charity that has provided medical assistance to 200,000 residents in the land-locked nation since 2004.

How bitcoin can help

Driven by a desire to promote human dignity, the charity takes a three-pronged approach to tackling HIV: at the lab, on the ground and in the meeting rooms of local government.

However, the organisation is now turning its attention to a challenge of an entirely different kind: transaction fees.

“Dignitas has to deal with high credit card and transaction fees on all of our donations [...] which can range between 2-5%,” explained Anne Connelly, the charity’s director of fundraising and marketing. She added:

“Every donation dollar we lose in a currency exchange or a transfer fee is a dollar that is not going to help someone in need.”

It is this frustration with existing third-party payment processors and credit card companies that fuelled the charity’s recent decision to accept bitcoin.

With the initiative, Dignitas hopes to reach a whole new pool of donors for whom bitcoin technology can help pass these incremental savings on to life-changing projects in the region.

“[We're seeking] people who want to fully integrate bitcoin into their daily lives – including their charitable giving,” Connelly said.

Non-profits who have already taken the plunge have witnessed a generous response from the bitcoin community, just this week Wikipedia received over $140,000 in bitcoin in its first seven days of accepting the digital currency.

Tax savings and anonymity

Although payment processors Coinbase and BitPay have waived fees for non-profits in the US, Dignitas, which is headquartered in Toronto, uses Canadian exchange Virtex to convert the bitcoin it receives into Canadian dollars.

On average each conversion charges the charity a fee between 0.2% and 0.75%, significantly less than via traditional means.

But how does a charity accepting a relatively anonymous and non-refundable digital currency avoid compromising the legitimacy or legality of its donations?

Connelly says Dignitas plans to treat bitcoin donors like those who pay by cash or credit card. In order to receive a tax receipt, bitcoiners can opt to disclose their personal information, including their email, name and location, which the charity will keep on file.

Alternatively, users can stay anonymous – well, pseudonymous – and donate directly via the Dignitas wallet address, a potential draw for the privacy-conscious.

Bitcoin in Africa

Reducing fees on donations within Canada is only half the battle, however, as the charity still faces a whole host of charges when transferring funds out to its Malawi projects.

A quick calculation on popular remittance platform MoneyGram reveals that sending CA$10 to Malawi will incur a CA$10 fee. This means the recipient collecting cash at one of Lilongwe’s local MoneyGram agents will only receive around MWK 3,323 (Malawian Kwacha), a cut of 50%.

Although higher amounts will incur smaller charges, on average remitting $200 to the region will encounter fees of 12%, twice the global average.

However, Africa’s bureaucratic cash payment systems are under threat. Mobile money networks like Kenya’s M-Pesa have seen a boom in popularity offering a cheap, fast and accessible alternative to cash. These services let users send and receive funds via SMS and even offer the ability to pay bills or take out micro-loans. 

Although the majority of Malawians live in rural households with little to no access to electricity, more than half now have access to a mobile network. Connelly is optimistic about bitcoin’s potential in the region for this reason:

“The ability to transfer funds through mobile phones is widespread [...] so, I would predict fast adoption of cryptocurrencies when they hit the continent.”

Indeed, residents who have never had a traditional bank account already use e-money on a day-to-day basis. Though bitcoin usage on the continent remains low, it holds a promising target market for bitcoin services like 37Coins, a universally-compatible SMS bitcoin wallet, as well as bitcoin remittance platforms like BitPesa.

Charity 2.0

The relationship between bitcoin and charity doesn’t stop at donations and payments. Dubbed ‘charity 2.0′, a new breed of cryptocurrencies are tackling causes within their very code.

Gamified altcoin projects like solarcoin incentivise users not for their ‘proof of work’ but for their ‘proof of good’. Users are rewarded with coins when they produce electricity via photovoltaic solar panels, as the project aims to promote renewable energy. 

Researchers are also investigating how the bitcoin network’s cumulative computing power can be harnessed for scientific purposes.

Projects like Folding@home, for example, uses idle processing power from a network of volunteers to simulate the folding – and crucially, misfolding – of proteins. In turn, these calculations inform research and drug design for a number of diseases, including Alzheimer’s, Cancer, Diabetes and Malaria.

The charity sector has much to benefit from this crossover with open-source technologies. For organisations like Dignitas, now in its 10th year, the possibilities are seemingly endless:

“The charitable sector has the most to gain from technologies like bitcoin [...] We’ve just started to scratch the surface of what it can help us achieve.”

Source : http://www.coindesk.com 

Bitcoin Growing Rapidly in Emerging Markets 

 

Min-Si Wang is reporting on the growth of momentum in Bitcoin use within emergent markets. While the level of Bitcoin adoption has slowed somewhat within the developed world, it has gained significant momentum within developing countries. While the currency can be somewhat volatile in nature, particularly as an investment asset, it is seen as having considerable value as a means of payment and money transfer. This Bitcoin momentum trend is all the more pronounced in countries where traditional payment methods remain somewhat underdeveloped.

Bitcoin has the advantage of almost instant payment by means of peer to peer technology. Bitcoin transfers are generally completed in minutes regardless of the location of the two parties. This is in addition to the presence of the public ledger that ensures both transparency and trustworthiness.

As a result of the growing Bitcoin Momentum, an ecosystem of support is quickly evolving to support the digital currency. Many new companies are: “building exchanges, trading and payment platforms, wallets, and storage and remittance services.” Currently, the trading volume stands at, circa, 65,000, and the amount of Bitcoins in circulation is around 13 million. Giving an approximated Bitcoin value of $590, that accounts for an estimated transaction value of $8 billion.

As shoppers, worldwide, become more familiar with the concepts that support Bitcoin, the level of confidence within developing markets, such as many African countries, is even greater. The consumers are familiar with the use of other cash free payment solutions, such as M-Pesa’s mobile money are already popular. Ms. Wang reports that: “ in A recent survey by mobile payment company Jana, over half of respondents from Asia and Africa expressed confidence in investing in Bitcoin. Consumer confidence is especially high in Kenya, home of M-Pesa, and 74 percent of Kenyan respondents said they would feel comfortable investing in digital currency.”

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The World’s first Bitcoin exchange, Vietnam’s VBTC, continues to offer a wide range of trading services, including multi signature wallets and BTC storage. The high rate of inflation in Vietnam makes Bitcoin an attractive alternative to the national currency. VBTC remains extremely bullish on the future potential of digital currency within Southeast Asia.

BTC China, one of the world’s largest digital exchanges provides both trading services and exchange services. BTC China also offers their customers a wallet app, Picasso. The PBOC has acted to restrict the transfer of bitcoins within China.

The World Bank estimates that remittance flow, or the amount of money sent home by economic emigrants, hit $414 billion in 2013 and is projected to peak at $540 billion by 2016. As Bitcoin becomes increasingly better known and easier to acquire, a migrant population can complete international transfers via a technology that is faster and cheaper than more traditional methods such as banks and Western Union.

Kenya-based Bitpesa serves the African migrant community in the UK and charges a remittance service at only 3% per transaction. By contrast, Western Union and banks often charge transfer fees of between 9 and 20 percent. PayPal, a popular and relatively inexpensive transfer method in developed countries, is not available in Kenya.

The Argentinian payment processor, BitPago, which targets Latin America, charges 5% to process transfer payments. Another South-American payment processor, Moneero, has a facility to allow Bitcoin payments and offers secure wallet services.

Approximately 80% of Bitcoin trading takes place from Dollar accounts but China’s volume rose from 0.4 percent in 2012 to 4.7 percent in 2014. BTC-e, one of the World’s top trading and transfer platforms, is based in Bulgaria.

As Bitcoin usage continues to increase, it is apparent that the future of the digital currency, at least in the medium term, seems somewhat assured.

Source : http://www.cryptocoinsnews.com

Bitcoin - The Chiefly British Coin

 

Britcoin is today’s Random Coin of the Day for its dedication to making a chiefly British cryptocurrency. The new fad in the cryptocurrency market is that of national cryptocurrencies, but Britcoin takes this a step further and has launched a way for British citizens to buy Britcoin directly. Not only can you buy Britcoins with your British bank account, but they’re implementing a way to spend Britcoin anywhere Bitcoin is accepted.

Britcoin Review

The following information was researched on the Britcoin website and BitcoinTalk thread.

Market Cap: $22,026 USD Maximum coins issued: 10 Million Coins estimated in PoW phase (20 million total supply) Hash algorithm: X13 PoW or PoS: Both Is it able to be mined: No (5% Annual Interest on Staked coins) Exchanges: AllCoin, BitTrex, C-CEX, Bleutrade Block explorer: Britcoin.io Launch date: June 27th, 2014

What is Britcoin’s purpose?

Britcoin seeks to be the leading cryptocurrency of the UK. The team launched Britcoin with British ethics and values in mind as their target-market is the UK, but international users may buy and trade the coin as well. Just as with any coin, it relies on people wishing to transact with their coin and places like CoinPayments.net will allow it to be accepted by larger merchants. Britcoin also encourages you to send an email to your favorite British retailers about the benefits of Britcoin and asking for the retailer to accept payments in Britcoin. The more requests like this a retailer receives, the more likely they are to start accepting your payment method, and the faster the coin will grow.

What problem does Britcoin solve?

Britcoin already has a way for British citizens to buy Britcoins directly, but they’re working on a way for people to purchase from any merchant whom already accepts Bitcoin. That’s critical for new coins to take root and become widely accepted. Without merchants willing to accept a coin or exchanges willing to trade it, the coin’s worthless.

What are the coin’s future endeavors and how do they plan on achieving those goals?

Britcoin has already completed their goal of creating an easy way to buy Britcoins directly. Soon any merchant who accepts Bitcoin already will be able to accept Britcoin. The team is also working on adding Bitcoin ATM support for Britcoin, creating a Britcoin P2P marketplace, offering Britcoin gift cards, and more. The team has quite the list of plans for Britcoin in their WhitePaper they released last month. Only a couple other coins have sought to create a P2P marketplace for their coin. With a P2P marketplace, users can instantly find a merchant who’s willing to accept the coin. Could P2P marketplaces for each coin become the next big deal that will propel currencies forward or will a P2P marketplace need to accept all cryptocurrencies to make a difference?

What do you think? Do national cryptocurrencies have any merit, or are they just another fad? What features would you like to see implemented in a coin? Do you have a suggestion for the next Random Coin of the Day? Leave a comment below or comment in the CCN forum.

Source : http://www.cryptocoinsnews.com

PasteCoin.com Allows Bitcoin Users To Buy, Sell and Profit From Code Snippets Worldwide 

 

New Bitcoin market PasteCoin.com allows professional coders, programmers and hobbyists to buy and sell code snippets in exchange for Bitcoin. PasteCoin is a profitable Bitcoin alternative to Pastebin.com – an unprecedented web market hub for buying and selling digital goods worldwide like code snippets, unused accounts, licence keys, texts, links and scripts. PasteCoin operates entirely within the Bitcoin ecosystem enabling completely safe sales and purchases. PasteCoin is an anonymous, convenient and fully encrypted Bitcoin escrow service protecting the buyer from faulty code while also preventing the seller from getting scammed. Tech enthusiasts and professionals alike are free to purchase products with Bitcoin without registration.

Buying products on PasteCoin is as effortless as a click of the mouse for both registered and non-registered members. When the buyer has found a product of interest they simply view the terms and conditions and click to purchase. After the digital product is paid for the customer unlocks their product to see the premium contents in highlighted format at the space of the “buy” button. Customers can then implement their purchased texts, code snippets or links to their website straight away or enjoy their newly bought tech goods. Buyers are entitled to a refund if a bad or faulty paste is detected.

PasteCoin acknowledges the expertise and efforts of global coders and programmers: both professionals and hobbyists. Thus PasteCoin is designed to help them profit from their achievements by earning Bitcoins without needing to set up their own infrastructure, host a shopping cart, or design a site. Vendors can start using PasteCoin effortlessly by creating an account for their profile and services. PasteCoin enables sellers to create both private and public pastes; choose the expiration and exclusivity of a product and get paid in Bitcoin 24 hours after their product was purchased. Sellers can also optimize their sales by hosting an affiliate program for their products. Hence not only can sellers profit from PasteCoin, but anyone can also share affiliate links to receive a percentage of a products sales.

With Bitcoin attracting accomplished people with diverse technical backgrounds, and the Bitcoin community gradually expanding beyond the rim of computer enthusiasts; a market platform for miscellaneous digital goods may very well become the next big thing in the global Bitcoin ecosystem.

Source : http://bitcoinprbuzz.com