Community Responds to BitLicense Regulation Proposal
The Bitcoin Community has responded to the state of New York’s much-anticipated BitLicense proposal in many different ways. The Chamber of Digital Commerce asked Ben Lawsky, superintendent of New York’s Department of Financial Services and author of the proposal, to extend the comment period through December 31, 2014 and issued a call to action from the bitcoin community to submit comments.
An open letter written by Austin Walne has received scores of signatures from prominent members of the Bitcoin community such as Barry Silbert, Jeremy Allaire, Pamir Gelenbe, and others. The letter, which is addressed to Ben Lawsky and Dana Syracuse of the New York Department of Financial Services, calls for a minimum 45-day extension to the public comment filing period.
Immediately after the BitLicense text was made public, some community members uploaded the complete text of the proposal to Github. The Bitcoin Foundation’s Patrick Murck, as well as others in the community, then annotated the potentially innovation-stifling parts of the proposal. The result? Several different BitLicense proposals created from the shell of Lawsky’s proposal.
Bruce Fenton, an international Bitcoin advocate, suggests that the community shouldn’t engage Ben Lawsky, whom Fenton refers to as having a “corrupt relationship with banks.” In speeches delivered at Bitcoin conferences and summits across America, Fenton has expanded on his viewpoint that “We have a person who was not elected by anyone, trying to create laws that no one asked for, for problems that don’t exist.” Fenton cites a New York law that forbids unelected officials, such as Lawsky, from creating regulations that would stifle jobs in New York. As such, Fenton suggests that the community engage NY Governor Cuomo to reign in Lawsky, who has overstepped his boundaries.
Arvind Narayanan, computer scientist at Princeton University, received a $500,000 grant from the National Science Foundation for his research “TWC: Small: Addressing the challenges of cryptocurrencies: Security, anonymity, stability.” The research is aimed at addressing privacy and security concerns of existing crypto currencies with improvements that would be “immediately and incrementally deployable.”
Sweden’s Supreme Administrative Court has issued a request for a “preliminary ruling with the European Court of Justice (Case C-264/14), asking whether the exchanging of Bitcoin for fiat currencies, and vice versa, is a transaction liable to VAT.” Germany believes Value Added Taxes are applicable when Bitcoin “denominated” transactions between taxable persons take place, while Poland believes that all bitcoin transactions should be subject to tax. One thing’s for certain: the EU’s slow stance to provide clarity among its nations has become confusing, allowing for differing treatment of the asset between countries.
The Ecuadorian National Assembly recently passed a monetary reform bill specifically targeted towards “digital money.” In the bill, Ecuador prohibits the use of any digital currency that isn’t emitted by the Central Bank. The Ecuadorian Central Bank will soon release their own state-sponsored digital currency, an interesting development considering Ecuador’s continued use of the US Dollar. The Bitcoin Community of Ecuador has sent an open letter to the National Assembly to challenge the legislation on the grounds that the restrictions are unconstitutional.
Barry Silbert is stepping down from his position at SecondMarket, but will remain CEO and Chairman of the parent company, SecondMarket Holdings, Inc. Silbert said the move would allow him to “focus 100% of my energy on our digital currency business.” Silbert has invested in over 30 Bitcoin related companies and said his “intention is to formally separate the two business lines at the appropriate point in time.”
The Winklevoss twins have released an API for the pricing index WinkDex, a bitcoin price index. The goal is to make WinkDex the standard. WinkDex aims to decrease near term volatility by having a price averaged index. The twins do not know what people will build with the index API, but “that’s the fun part.”
BBR Exclusive: Arianna Simpson Joins BitGo as Account Specialist
Thanks to Bitcoin, more companies are embracing the ideals of the cryptocommunity such as privacy, peer-to-peer technology and encrypted services. Enter goTenna, a new startup that allows encrypted messages to be sent via your cellphone to other goTenna users, without the use of cellular service (users can be no more than 3 miles away.) goTenna says their services are ideal for use in locations where there is no cell service, or in densely packed locations where cellular networks can be overburdened. The company is taking preorders for its product at 50% off on its Shopify site (accepts bitcoin), and is expected to ship the devices late this fall.
In a quarterly report, DigitalBTC sold AUD $1,508,000 worth of coins and announced a total operating and investing cash flow of AUD -$2,613,000. Digital BTC also reported an AUD $4,873,000 of cash at the end of the quarter, which they say mostly came from the proceeds of shares issued. DigitalBTC was listed on the Australian Stock Exchange (ASX) only a few months ago, in March, through a Share Purchase Agreement. DigitalBTC has mined over 8,600 BTC to date, and is predicted to offer more consumer services as it moves away from mostly mining.
Terpin, CEO of crypto PR firm Transform, warns his audience: “you don’t want to be the person who’s selling 8-track tapes in an iTunes world.” He says bitcoin can allow you to cut out the middle men in movie distribution, by paying the owners of the footage directly. Terpin predicts there will be artist coins in the future (like the now-defunct Coinye West). He says Netflix and YouTube can be blocked by blockchain technology, and replaced by companies like Counterparty and Mastercoin. “It will change Hollywood, because it’s going to change the world.”
Only a few weeks after he bought his first bitcoin, Edmund Moy, the 38th Director of the US Mint, will keynote the Cryptolina. Moy’s sense of humor will most likely extend to his keynote address. When asked on twitter if he would tell his friends to buy bitcoin, Moy said, “They’re too busy inflating stocks prices w/cheap Fed $$$!” Moy recently commented that China’s ban on bitcoin validates bitcoin, saying “it’s time banks got competition. [It’s] time for cryptocurrencies.”
I bought my first bitcoin last week. Easy peasy.
— Edmund Moy (@EdmundCMoy) July 15, 2014
Adam Draper, founder of Boost – a startup accelerator, will also keynote. Boost is becoming a Bitcoin startup accelerator, with about a third of the companies related to Bitcoin. Draper is the son of Tim Draper, the investor who purchased all the bitcoins in the first auction of the bitcoins seized from Silk Road.
After the success of the dogecoin community’s sponsorship of Josh Wise, BK Racing’s Alex Bowman has started a campaign to get funded through bitcoin donations. Aptly titled ‘bitcoin23’, after the #23 car that he races, Bowman’s funding goal is $100,000. If Bowman reaches his goal, then he, his crew and his car will sport bitcoin themed race apparel on August 31st at Atlanta’s Motor Speedway. Crowdfunding for this campaign is being raised on Crowdtilt.
In Mexico, Luis Daniel Beltrán, CEO of Microbit, met last March with members of the Bank of Mexico, to talk about how the government could utilize Bitcoin technology. Some of the members of the community presented the bank officials with a proposal for a digital version of the Peso, called “Peso Digital”. On the Peso Digital website, the initiative claims it could help the 60% of Mexicans who are unbanked, decrease the dependence on banks, reduce the costs of government and make taxation easier. Mexico has no plans to officially implement “Peso Digital” yet, but officials are meeting with the Bitcoin community again in September to review other applications for Bitcoin.
Many banks fret the idea of dealing with Bitcoin businesses because they have to abide by strict Anti Money Laundering and Know Your Customer policies. These policies not only require banks to know who they are dealing with, but banks have to know who their customers are dealing with. IdentityMind’s IGNITE program is touting itself as the first AML Compliance Program to be specifically designed for Bitcoin startups, for a flat rate of $150 per month for the first six months (payable in bitcoin). “IGNITE provides the full protection, processes, visibility, and reporting you need, with simple set-up.” This development is crucial for Bitcoin start-ups, because establishing a banking relationship is tough, even if a merchant accepts bitcoin. IGNITE also helps validate bitcoin as a legitimate tool for financial transactions.
This past Friday, the Bitcoin Foundation announced the hire of a new Technical Director, Andrew Lampe. Lampe is a staunch supporter of Bitcoin, remarking that “Bitcoin is pure technological genius. Its convenience as well as ability to allow private and secure transactions is seemingly so simple, yet so wonderfully elegant.” Prior to his recent appointment, Lampe worked at NASA’s Goddard Spaceflight Center and also at Monster.com. He will be responsible for the technical grant program, corporate technological infrastructure, and will be unveiling a new Bitcoin Foundation website sometime next week.
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