Las Vegas had a trifecta of Bitcoin conferences last week with Inside Bitcoins, CoinAgenda, and Haser’s United. Overstock and Counterparty announced a strategic partnership to build the first decentralized, peer-to-peer stock exchange. And CoinDesk issued their State of Bitcoin Report for Q3. Lastly, blockchain.info raised $30 million in venture funding, which is the largest haul ever for a bitcoin company.
Click on the headlines for links to the full stories.
Summary of Government Related Initiatives
The US Commodities Futures Trading Commission (CFTC) held a public meeting about Bitcoin on Thursday, which was meant to be educational only. This meeting was conveniently staged on the same day TeraExchange executed the first bitcoin derivative transaction after a six months process of becoming self-certified by the CFTC.
Ross Ulbrich’s trial begins next month, where he will face charges related to operating the Silk Road website. Last week, Judge Katherine Forrest rejected Ross’ pre-trial motion to dismiss the charges because his Fourth Amendment privacy protections were violated when the FBI “hacked” Silk Road servers without a warrant. The Judge stated that since Ulbrich didn’t sufficiently claim that the server belonged to him, “he has not provided the Court with the minimal legal basis necessary to pursue these assertions.” According to Civil Liberties Stanford Law professor Jennifer Granick, the FBI’s ability to hack a website abroad without a warrant has never been established in court and is a blow to the privacy rights community.
The Canadian Senate Committee on Banking, Trade, and Commerce held their 11th meeting on bitcoin last week and Andreas Antonopoulos was the sole witness. Members of the Committee grilled him for nearly two hours about innovation, security, and regulation. Antonopoulos impressively laid out a legitimate case to forego government regulation of bitcoin, “We cannot protect consumers by removing their ability to control their own privacy and then asking them to entrust it in the same intermediaries who have failed them so many times before,” he said.
The Bitcoin Foundation filed comments with the New York Department of Financial Services on the proposed BitLicense rules and regulations last week, where they propose “technology-specific” regulation that makes clear distinctions between blockchain technology and traditional financial services providers. Back in August, the Foundation also requested from DFS a copy of the “[e]xtensive research and analysis” performed that validates the need for such regulations. DFS has not yet supplied it, but said they may release it in December, well after the comment period is closed.
Summary of Industry Initiatives
Blockchain, the largest bitcoin wallet provider and blockchain explorer, just announced a $30 million venture capital funding round. Led by Lightspeed Venture Partners and Wicklow Capital, this was Blockchain’s first funding round. Blockchain’s president Peter Smith said for “the first time ever, we are going to spend money on marketing.” The team will use the new funds to build up their engineering team.
Bitfury, the Bitcoin mining hardware manufacturer, announced last week that they raised $20 million in a pre-Series B round to help develop its new and improved 28nm ASIC chip. The mining company plans on expanding its mining facilities to 100 megawatts, compared to other mining companies like MegaBigPower, which has mining centers between 1 and 5 megawatts.
Snapcard, a Bitcoin startup that allows users to use Bitcoin for purchasing goods and services online that currently do not accept digital currencies, has raised $1.5 million in funding from Tim Draper and Insikt Capital. The payment processor accepts Bitcoin, Litecoin, Dogecoin, and Ripple, and in return sends the merchant their fiat currency of choice. Snapcard faces heavy competition from more established payment processors, BitPay, and Coinbase. However, Draper said that Snapcard’s innovative product, and its global ambitions, make it a “force to be reckoned with in the payments space.”
Patrick Byrne, CEO of Overstock.com, announced in his Keynote at Inside Bitcoins Las Vegas that Overstock is partnering with Counterparty on the front-end portal of the decentralized stock exchange. Recently, Counterparty hired new developers to work on this project, plus others. Patrick Byrne was one of the earliest public CEO’s to embrace Bitcoin and has been interested in this concept since June 2014. The stock exchange’s codename is Medici and already both Robby Dermody and Evan Wagner of Counterparty have moved to Utah, where Overstock is headquartered, to work on the project.
Libra Raises $500,000 To Build Bitcoin Tax Compliance Software
Almost coincidentally coinciding with the October 15 tax extension deadline (that many bitcoin users have taken advantage of), Libra just announce that they raised $500,000 in seed funding to further build up their tax compliance software, LibraTax. Since the IRS has stated that bitcoin should be treated as property as opposed to currency for federal tax purposes, capital gains and losses must be reported and taxed. LibraTax will offer reporting services for CPAs and individuals to help make this process less burdensome and time consuming. Liberty City Ventures, Raport Ventures’ James Pallotta, and BitGo’s Ben Davenport all participated in the seed round.
Last week eSpend and Cryptsy announced a new partnership that will bring roughly 90 altcoins to the Ripple network. Ripple is an open-sourced payments protocol (kind of like bitcoin), eSpend is a financial technology company, and Cryptsy is an altcoin exchange. Paul Vernon, CEO of Cryptsy, said ““We have been wanting to get XRP on Cryptsy for a long time now.” XRP is Ripple’s native currency.
Bloomberg reports that the Internet Watch Foundation “has discovered almost 200 [child porn] websites that accept bitcoin… and more than 30 sites accept only bitcoin.” Headlines reminiscent of the early Internet, Bitcoin continues to face reputational challenges. The Digital Economy Task Force, which fights online child exploitation, is requesting that countries apply anti-money laundering laws to digital currencies.
Photo of the Week
Our photo of the week is a screen shot from the iTunes store with the The Rise and Rise of Bitcoin as the number three top documentary.
Quote of the Week
“Bitcoin’s decentralized nature affords consumer protection in the most powerful and direct way – by allowing bitcoin users direct control over the privacy of their financial transactions.” – Andreas Antonopoulos
Tweet of the Week
— Counterparty (@CounterpartyXCP) October 7, 2014
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