Boring Bitcoin Report

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 Receives Grant for Bitcoin Research

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.”

Europe’s Divide on Bitcoin Taxation Raises Call for Action

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.

Ecuador Bans All Digital Currencies Except Their Own

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.

Industry Initiatives:

Barry Silbert Steps Down From SecondMarket CEO position

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.”

Winklevoss Twins Release WinkDex API

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

goTenna Startup Targets Bitcoin Users for Support

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.

DigitalBTC Reports Earnings

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.

How Bitcoin Will Disrupt Hollywood | Michael Terpin | TEDxHollywood

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.”

Former US Mint Director & Adam Draper to Keynote the Cryptolina Bitcoin Expo

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.

Bitcoin Crowdfunding Campaign for NASCAR Starts

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.

Mexico’s Peso Digital

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.

IdentityMind Global Launches an AML Compliance Program

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.

Bitcoin Foundation Hires New Technical Director

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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This week is Coin Congress, a special gathering of bitcoiners in San Francisco slated to discuss digital currency, monetization, integration, and user acquisition.  Featured speakers include Bobby Lee of BTCChina, Vinny Linghmam of Gyft and George Gilder, author of Microcosm and Telecosm (plus 15 other books on technology).

The Chamber of Digital Commerce will be holding a press conference this morning to issue an official response to New York’s BitLicense proposed regulations.

Last weekend was The North American Bitcoin Conference (TNABC) in Chicago where a number of other industry initiatives were announced.

Here is a not-so-boring week in review:

Government Initiatives:

Bitcoin Gets Its First Trade Association

This week I announced the formation of the Chamber of Digital Commerce, the industry’s first trade association.  Operating from Washington, DC, we will promote the industry’s goals, and its potential to innovate global finance for the benefit of society, to lawmakers, regulators, policy makers and the larger public.

New York BitLicense Proposal Revealed

Last week the New York Department of Financial Services (NYDFS) published the first draft of the BitLicense proposed rules and regulations. Under the proposed BitLicense framework, any Bitcoin company wishing to do business with New York residents would require a BitLicense. The draft is set to be officially published on July 23 and will follow a 45 day comment period, hardly adequate time to for the industry to properly review and respond.

The industry needs guardrails to protect consumers and root out illegal activity, but these proposed regulations are onerous and in many cases simply misplaced, with the potential to seriously injure legitimate applications of this valuable emerging area. Instructions on how to submit comments can be found on the NYDFS website at http://www.dos.ny.gov/info/register.htm.

Industry Initiatives:

Chinese Exchanges Battle It Out Over Features and Services

China’s OKCoin announced at TNABC that they will begin trades denominated in USD. OKCoin.com also released information about its new Financial Information Exchange protocol (FIX) and their websocket API. OKCoin is striving to become the top bitcoin trading platform with safer, more accurate and faster features such as “low-latency trading and market data.”

Just one day later BTCChina issued a competing announcement the very next day stating they have already “collected several million USD worth of deposits” in its trial period and will also start accepting Hong Kong Dollars. International account holders will have the option of depositing USD or HKD and will be processed by BTCChina’s HK affiliate.

This weekend’s Chinese exchange battle highlights the fact that we are in the early days of a feature and services war where exchanges are constantly trying to one-up each other.

Blockchain Launches New Wallet

Blockchain launched a new Android wallet at TNABC this weekend, which is full of eye candy, designed for the next wave of bitcoin adopters, with an easy to use, clean interface. The new Android wallet features a directory of businesses that accept bitcoin. Blockchain’s Keonne Rodriguez played a large part in the development of the app and said they personally called the merchants to make sure they accepted bitcoin.

The next step for Blockchain is the development of an iOS wallet. Since Apple updated their app developers guidelines to allow for bitcoin wallets, developers are shifting resources back to iOS.

Google Adds Bitcoin Exchange Rate to Instant Search Answers

Last Tuesday, the largest search engine in the world added the Bitcoin exchange rate to their list of instant search answers. Google uses Coinbase’s historical USD/BTC exchange rate, then calculates other exchange rates with existing fiat data.

Dell Becomes Largest Ecommerce Business to Accept Bitcoin

Dell and Coinbase announced a partnership this week, ushering a new giant into the Bitcoin ecosystem. With almost $60 billion in annual revenue, Dell is now the largest business accepting Bitcoin. Dell is currently offering a 10 percent discount when paid in Bitcoin on select Alienware products. At the moment, Dell is only accepting Bitcoin payments for US customers. According to Michael Dell, Dell’s founder, the partnership was forged within 2 weeks, highlighting the institutional ease of implementing Bitcoin.

Shopify Allows Merchants to Choose Between BitPay and Coinbase

Since November of 2013, Shopify has provided merchants with the ability to accept bitcoin through BitPay payment processing services, and thousands of merchants have signed up to do so. On July 15^th Shopify announced their integration with Coinbase, which will allow Shopify merchants ‘more ways to accept Bitcoin payments online’. Shopify who have signed on to Coinbase payments includeincluding Soylent, Leap Motion, and IOgrapher. Shopify has a total of over 75,000 merchants.

LinkedIn Co-founder, Reid Hoffman, is Focused on Bitcoin

In a recent interview with CNBC’s ‘Squawk Alley,’ long time tech entrepreneur, Reid Hoffman, shared his thoughts on Bitcoin. Instead of suggesting viewers jump onto the latest wearable technology or home automation craze, Hoffman admitted that he has “increasingly focused on Bitcoin.” Hoffman has invested in Xapo, a Bitcoin wallet, and currently sits on their board of directors. He emphasized that Bitcoin’s true innovation will be its platform, its “most interesting layer.”

South African Payment Gateway, PayFast, Accepts Bitcoin

South Africa’s PayFast announced a partnership with South Africa’s biggest Bitcoin exchange, BitX. With PayFast, South African merchants can accept Bitcoin payments and receive South African rands in their account. The service is currently in beta testing mode, but PayFast makes sure to emphasize Bitcoin’s ease of use to its existing merchants.

Bitcoin Mining Pool, Ghash.io, Promises To Stay Under 40% of the Total Bitcoin Network Hashrate

Twice this year, so far, Bitcoin mining pool, Ghash.io, has approached 50% of the total Bitcoin network hashrate, representing an unnecessary threat against Bitcoin’s network security. Previously Ghash.io has refused to self-regulate to remedy the problem, but after a closed-door meeting with industry heads, they have promised to implement a 39.99% ceiling. Ghash.io has promised to post warnings, but not raise fees, if the situation occurs again.

Bitcoin Charity Feeds Over 100,000 Meals To The Homeless

Sean’s Outpost, the largest charitable Bitcoin organization, led by philanthropist Jason King, announced they have fed over 100,000 meals to the homeless community in Florida. This initiative was mostly funded in bitcoin and other digital currencies. Sean’s Outpost is dedicated to serving the homeless community and also manages Satoshi Forest, which provides a place for homeless people in Pensacola to legally stay. Increasing regulation against “loitering” has created even bigger hardships to the homeless population, putting many of them in jail for the crime of being penniless.

So…Sean’s Outpost just fed our 100,000th meal to the homeless. Thought you would like to know. Thanks #bitcoin

— Sean’s Outpost (@SeansOutpost) July 18, 2014

This guest post is by Eddy Travia, Co-Founder of Seedcoin, a global Bitcoin startup virtual incubator with partners in Hong Kong, Singapore and London.  Travia is currently helping develop eight seed-stage Bitcoin startups around the world. Formerly, Travia worked in private equity in China. 

A common mistake observers make when witnessing the emergence of a new technology is to underestimate society’s capacity and celerity to adapt to it. In world-changing industries such as luxury cars and mainframe computers, the main actors in these markets have severely misevaluated the demand for their products and market trends in the last century. The former initially focused on chauffeur-driven cars and the latter failed to foresee the advent of personal computing. This lack of foresight opened doors for new players and removed the incumbents until the newcomers became the behemoths. From the industrial revolution to the IT revolution, we can see that the cycle repeats itself.

When Bitcoin started making headlines in the mainstream media in Spring 2013, it spurred a new wave of supporters and entrepreneurs. Bitcoin evangelists had understood early on the profound changes Bitcoin has the power to bring to financial and economic systems. Since May 2013, hundreds of new crypto-currencies, blockchain-based projects and asset classes have been created, and millions of dollars of VC and investment funds have been channeled into crypto startups. This has all happened in little more than one year’s time, in a world ruled by crypto-sceptical governments, dominated by change-averse, uncooperative banks, in a year during which the largest Bitcoin exchange failed and took with it 6% of the bitcoins in circulation.

In a public talk about Bitcoin a few months ago, someone asked how long it would take for people (in general, not just crypto startup team members) to accept salaries in bitcoin. Answers varied from 5 years to 20 years. Although this was only a few months ago, answers would be dramatically different today, because as time goes by we re-evaluate our own vision of the future, and we and re-assess the impact new technology such as crypto-currencies will have on our lives. As an investor in Bitcoin startups and a believer in the power of crypto-currencies, I have preferred to stay away from predictions about bitcoin price or adoption figures, but there is one vision that drives my focus, time and energy: the entrepreneurial ecosystem being created by crypto-currencies. From May to September 2013 the number of linkedin profiles including the term ‘bitcoin’ doubled and in April 2014 reddit’s r/Jobs4Bitcoin subreddit reached 5,000 subscribers. These metrics are testament to the incredibly fast growth of the crypto sector in the professional, and notably, the entrepreneurial worlds.

Most Bitcoin-centric jobs have been provided by startups, although that is gradually changing with established financial institutions and big 4 auditing firms recently posting job offers for ‘Bitcoin-savvy’ candidates. Most Bitcoin projects are small startups, with a few receiving in excess of $10 million funding and most having raised less than $1 million.

At Seedcoin, the global virtual Bitcoin startup incubator I co-founded in July 2013, we receive two to three applications per day from creative crypto entrepreneurs around the world. I believe this is just the tip of the iceberg. As outlined in Tim Swanson’s Guide to Smart Contracts, Smart Property and Trustless Asset Management, there are numerous applications of decentralized organizations and blockchain asset management that will disrupt entire sectors of our economy, including the public sector.

In addition to crypto startups’ high potential in job creation, the blockchain, this simple yet extremely powerful decentralized protocol for storing assets and data, can disrupt key components of the public sector such as the management of deeds, company incorporations or any sensitive data that should be both public and validated. Currently the government administration and professionals with a government granted authority, such as public notaries, are the trustable third parties. Tomorrow the blockchain may fill this role at a much lower cost for society and enabling easy access to sensitive data, as stated by David A. Johnston in his eponym law, “Everything that can be decentralized, will be decentralized.“

Well-known VCs such as Marc Andreessen have compared Bitcoin to the Internet. As a modest participant and an observer during the Internet years back in the 90s, I agree with this parallel. I feel the same energy and enthusiasm, and it seems Bitcoin supporters share the feeling that we are living in world-changing times. One of the differences with the ’90s is that the Crypto movement is not just about money or being first to market. The new generation of entrepreneurs have a broader social agenda. Facilitating remittances from migrant workers to their relatives and enabling the unbanked to join the global network of electronic payments and financial services via crypto-currency based services are examples of the objectives of these new startups, such as Seedcoin-backed meXBT in Mexico. These entrepreneurs can also rely on new methods to raise funds such as issuing shares on the blockchain using different protocols such as ‘colored coins’, or issuing tokens using the Master protocol such as Maidsafe’s crowdsale.

My definition of Bitcoin is not limited to the currency/protocol features, I see Bitcoin as a disruptive technology redefining our relationship with money and triggering a wave of entrepreneurs with access to new funding opportunities. Although it is too early to grasp the extent of its impact on society, we can already feel the first shockwaves of Bitcoin.

This week the Bitcoin Community is gearing up for the North American Bitcoin Conference in Chicago on July 19 and 20. This conference is slated to be the largest and one of the most influential ever held. 50 of the top CEOs / entrepreneurs in bitcoin are scheduled to attend and speak.

Here is a review of Bitcoin’s not-so-boring week last week.

Bitcoin Government Initiatives: 

New York BitLicense Proposal Expected In 2 Weeks

Benjamin Lawsky, New York State’s first Superintendent of Financial Services, announced on Twitter that New York’s Department of Financial Services is “making good progress on virtual currency regs” and should release their proposal on Bitcoin regulation within a week or two. This proposal will be the first state licensing program specifically for Bitcoin transmission and trading, and is highly anticipated, as many other states are expected to follow suit.

Bitcoin Foundation Hires Lobbying Firm

The Bitcoin Foundation has retained Thorsen French Advocacy to lobby the US Congress in Washington, DC.  Jim Harper, Global Policy Counsel for the Foundation, said “You can expect to see us do the same in Europe and do the same in major capitals around the world.”  The Foundation has suffered serious reputational and credibility challenges in recent months, as a number of board members have been found unfit to serve and forced to step down.

Thorsen French Advocacy covers a wide range of clients, from ASCAP to PhRMA, to Western Union, a competitor to Bitcoin.

On the same day of this announcement highly respected Bitcoin evangelist, Andreas Antonopoulos tweeted that he is resigning his membership from the Foundation.

I can no longer have even the smallest association with the Bitcoin Foundation, because of the complete lack of transparency

— AndreasMAntonopoulos (@aantonop) July 9, 2014

 

Japan Forms a Self-Regulating Organization for Digital Assets

The Japan Authority of Digital Asset (JADA) has recently been established and will serve as the self-regulating organization for bitcoin and digital assets in Japan.  According to Jon Southurst of CoinDesk, the Japanese government does not intend to regulate digital assets and will lean on JADA to establish security protocols and consumer protections for the industry.  JADA has been established with help from Kraken, who also played an integral role in forming the Digital Asset Transfer Authority (DATA) in the US.  DATA, although in its infancy, has not prevented the US government from regulating digital assets.

France Implements New Tax and Reporting Requirements For Bitcoin

France’s finance ministry has announced plans to implement new regulations for bitcoin requiring financial institutions to verify the identity of their customers. These proposed regulations will not affect most industry players because most credible exchanges are already compliant with anti-money laundering reporting requirements. The finance ministry also implemented a capital gains tax that would tax profits made from the sale of bitcoins, similar to the tax regulations of the US and UK.

Argentine Financial Regulator Implements Bitcoin Reporting Requirements

Argentina’s Unidad de Información Financiera (Financial Intelligence Unit) has directed financial service providers to report bitcoin activity. The UIF’s decree made amendments to previous regulations involving anti-money laundering concerns and terrorist and criminal financing.  The UIF will require companies to give a monthly report on digital currencies. Argentina has been tightening its stance on Bitcoin as the country faces a struggle to pay its debt.

Congressional Candidate Announce He Will Only Accpet Bitcoin Donations

Dan Elder is running for US House of Representatives in Missouri District 1 and announced on his facebook page that he will only accept bitcoins for his political campaign. This would make Elder the first US politician to solely accept bitcoin.

“I’d love to see the Fed [Federal Reserve] audited and eventually phased out, but until then we should find other ways to do our business. Thankfully, we have alternatives today, and one of them is bitcoin.” said Elder in a post.

Since the Federal Elections Commission has limited bitcoin contributions to $100 per person, Elder has put himself at a financial disadvantage against his competitors.  This will be an uphill battle for Elder, but will make him a Bitcoin champion.

Sweden’s First Bitcoin-only Politician

Mathias Sundin is running for Sweden’s parliament and announced last week that he will only accept bitcoin donations for his campaign.  The Sundin campaign platform includes:

• Resist knee-jerk regulation of Bitcoin, other digital currencies, and disruptive innovation in general.
• Continue the education reforms in Sweden.
• Help develop a tax system that promotes fast growing, innovating companies.
• Defend privacy rights

Industry Analysis:

Bitcoin Gets Its First Fully Regulated Bitcoin Investment Vehicle

Global Advisors Jersey Limited (“GAJL”), an investment management company based in Jersey, recently received regulatory approval for the Global Advisors Bitcoin Investment (GABI) Trust fund and will launch August 1, 2014.

Daniel Masters, Director of GABI, will be operating his fund in Jersey, a UK Crown Dependency in the British Isles. Jersey runs a self contained regulatory financial center which has helped enable this rapid move.  GABI will not be servicing American clients.

Pantera Launches BitIndex to Track Bitcoin

Pantera Capital launches a BitIndex to track bitcoin growth over the medium term. The BitIndex uses seven factors to determine Bitcoins value:

Developer interest on GitHub

Merchant adoption

Wikipedia views

Hashrate

Google searches

User adoption as measured by wallets

Transaction volume

The index was created to help determine Bitcoins value without looking at the price, which has been largely influenced by large traders and negative news.

itBit moves to NYC

itBit the bitcoin exchange for ‘serious traders’ once focused in Singapore is moving its headquarters to New York City. The move comes at the precipice of the looming Bitcoin ETF’s that are still awaiting approval. Although Singapore is a global hub for finances, the US has taken the lead in Bitcoin trading.

“We wanted to start an exchange that would operate on the same level of sophistication as the global exchanges of traditional finance: powerful enough to trade large volumes, protected by bank-level security, powered by state-of-the-art technology, and most importantly, regulatory compliant and trustworthy.” – Chad Cascarilla

Rich Teo will stay in charge of the operations in Asia while Chad Cascarilla will take on the role of CEO.

Xapo Leads the 4-Horsemen, Raising Another $20 Million

Xapo announced last week that they have raised another $20 million in a series A-1 funding.  The company had previously raised $20 million in a Series A back in March. This brings Xapo’s total funding to $40 million making them the most well funded bitcoin company.  Xapo’s bitcoin debit cards are expected to be released this month.

The “Four Horsemen” of Bitcoin are Xapo, BitPay, CoinBase and Circle, the only companies with over $20 million in Venture Capital funding.

CoinDesk Published Q2 State of Bitcoin Report

CoinDesk’s latest State of Bitcoin report highlights the measurable accomplishments of the Bitcoin community each quarter. In Q2 alone, $73 million has been invested into Bitcoin-related startups by venture capitalists around the world. With data concerning total amount of Bitcoin wallets and Bitcoin-accepting merchants, the report also predicts that there will be approximately 8 million Bitcoin wallets and 100k Bitcoin accepting merchants by the end of 2014.

ZipZap Expands Operations In Latin America

On Tuesday, ZipZap announced that they are now open for business in Latin America. ZipZap had been operating in Brazil since 2013; however, this latest expansion bring ZipZap’s services and bitcoin access to millions more. In June 2014, ZipZap partnered with Payzone, a leading UK consumer payments and cash distribution network, to expand ZipZap operations to the UK. Though their focus is on international markets, ZipZap is headquartered in San Francisco and was founded in 2010. With ZipZap’s network, users in many locations around the world are able to buy digital currencies with cash using ZipZap and one of ZipZap’s exchange partners. Latin America’s thriving Bitcoin population welcomes the new financial services. They will be holding their first Latin American Bitcoin Conference at the end of the year.

Mellon’s  Family Preserving Their Wealth In Bitcoin

The Mellon family’s $12 billion fortune makes them America’s 19th largest family by net worth. Preserving that fortune has been challenging, however, Matthew Taylor Mellon II, heir of Thomas Mellon, entrepreneur and banker of the late 19th and early 20th century, is keeping the family fortune by investing in Bitcoin companies.

“The banks are going to be scratching their heads” said Mellon II in a Forbes interview. Matthew believes “we need to live in a more transparent, free democracy” and that citizens are fed up with current financial system. Subsequently, he has invested two million dollars in Bitcoin startups.

Floating Fees Introduced In Bitcoin Core 0.10

On July 7, Gavin Andresen announced the release of Bitcoin Core 0.10. It will have floating transactions determined by size, priority and other factors. Andresen believes that transaction fees will continue to rise as transaction volumes rise, and to fix this problem some “smart engineers” will have to fix the “bigger blocks take longer to broadcast” problem. This could be a great way to incentivize innovation for traffic, by creating priority on particular transactions.

Mt. Gox Pays Mark Karpeles $200k, Infuriating Customers

A new document filed with the Tokyo District Court shows that Mt. Gox paid Tibanne Co. (Mark Karpeles’ holding company) $200,000 in May 2014 for expenses incurred to keep Mt. Gox alive during bankruptcy proceedings.  While it is important for the carcass of Mt. Gox to remain open to allow for bankruptcy proceedings and investigations to continue, the community is repulsed that even a penny of customer funds have paid out to Tibanne, i.e., Karpeles.

According to John Betts, CEO of Sunlot, which is also spearheading the SaveGox.com initiative,

“This shows the deplorable continuing theft of customer assets. The theft at Mt Gox is a major crime and the interested parties are allowing those responsible to get away without recourse, tacitly encouraging the whole situation to be swept under the rug.”

The Rise and Rise of Bitcoin

The North American Bitcoin Conference is holding a screening of The Rise and Rise of Bitcoin, at Chicago’s House of Blues on July 18.  The film is the first documentary on Bitcoin, and follows some of the early adopters, entrepreneurs, and investors of the industry. This will be the second screening of the film. According to Ben Bledsoe,

“The Bitcoin community has embraced our presence throughout the entire process of filming, letting us into their homes and offices, and supporting us with posts and at meet-ups.  We are currently preparing for distribution and feel that it is important to debut the fully finished film directly to the Bitcoin community.  We are thrilled to have the screening at the House of Blues Chicago for the kick-off of the North American Bitcoin Conference.”

Kryptoradio

A Finnish initiative, Kryptoradio, plans to broadcast the Bitcoin blockchain through DVB-T (Digital Video Broadcasting – Terrestrial) signals. The project aims to start its pilot phase this September 1st and will broadcast the Bitcoin transactions, blocks and currency exchange data to roughly 95% of the Finnish population, about 5 million people.

Broadcasting this data through DVB-T signals would mean that Bitcoin users wouldn’t need internet to make transactions. Other radio technology such as FM can used but the team has decided to use DVB-T because of its widespread use throughout Europe, Africa and Asia.
The costs to run the program will be about 2,000 Euros per month and Kryptoradio is looking for funding and partnerships to keep it running.

George Gilder Is Writing A Book On Bitcoin

Gilder is 45,000 words into writing Bitcoin and Gold, the Information Theory of Money, which builds on his book Knowledge and Power, The Information Theory of Capitalism. Gilder is outlining how the creation of the gold standard is similar to the emergence of bitcoin. He also drawls parallels to Sir Isaac Newton, the discovery of light and bitcoin.