Boring Bitcoin Report

The New York Department of Financial Services (“DFS”) has heard the industry’s cries and extended the comment period for the proposed BitLicense regulations, the most comprehensive and impactful government regulations ever proposed to affect bitcoin.  The Chamber of Digital Commerce and Chinese Bitcoin Exchanges released their comments to the public just a few days before.  Superintendent Lawsky gave a tell-all interview with CoinDesk, and ESPN accepted their first bitcoin payment. Just a few of last week’s events in the not-so-boring world of bitcoin.

Government Initiatives:

DFS Extends BitLicense Comment Period

After receiving numerous petitions from the Chamber of Digital Commerce and others, DFS extended the comment period from September 8 to October 21, 2014.  In his timely interview with CoinDesk, NY Superintendent Ben Lawsky acknowledged that correspondence received from individuals and organizations, such as the Chamber of Digital Commerce, did play a factor in the DFS’ decision to extend the comment period. More generally, Lawsky claimed that much of the law has been misinterpreted. For instance, he reiterated that software providers were not intended to be covered under the rules. Lawsky also pointed out that should any material changes be added to the BitLicense regulation, an additional 30-day comment period will be opened.

Chamber Of Digital Commerce Submits BitLicense Comments

The Chamber of Digital Commerce submitted their comments to DFS last Tuesday and made them publicly available on their website. The Chamber suggested a small business exemption and requested an extension of the 45-day comment period, which they say is a severely inadequate timeframe for regulations of this magnitude.

“We have been very vocal in encouraging the industry to submit comments to the DFS.  The Chamber’s comments are posted on our website and the industry is welcome to use them as a resource” said to Perianne Boring, President of the Chamber.  Now that the comment period has been extended by another 45-days the Chamber is “looking forward for opportunities to work, and help the industry work, with DFS, to put forward proposals that meet DFS’ goals without stifling beneficial innovation.”

Chinese Exchanges Submit Comments On BitLicense

As a testament to the international importance of the NYDFS’s proposed landmark regulations, three of the largest Bitcoin companies outside of the US have reached out to the NYDFS with a letter. The three CEO’s of the Chinese Bitcoin exchanges addressed the far reaching implications of the “BitLicense Regime.” Regulations, especially those emanating from New York, have significant influence, both domestic and international. Concern for the top trading pair CNY/BTC and the potential damage to overseas businesses should be a leading consideration of NYDFS.

Australia Taxation Office Releases Guidance on Cryptocurrencies

Last Wednesday, the Australian Taxation Office (ATO) released a federal-level tax guidance outlining Australia’s future treatment of all cryptocurrencies. Thus far, the ATO still does not view Bitcoin as a legitimate foreign currency. Under the proposed guidelines, individual users would be free from capital gains taxes; however, Australian Bitcoin businesses might be charged a 10% Goods and Services Tax, which might even happen two times.

Industry Initiatives

Chain Raises $9.5 Million In VC Investments

Chain, an API that makes it easy to interact with the Blockchain data to build further applications, just raised $9.5 million in venture capital funding.  The funding round was led by Khosla Ventures and also included RRE Ventures, Thrive Capital, Pantera Capital, SV Angel, and Barry Silbert, among others.

The Bitcoin community is still in its early phase, developing the basic infrastructures. Chain is dedicated to helping create products to make Bitcoin a more user-friendly experience, and will promote mainstream adoption of Bitcoin. Chain has only been open for about six months and has already hired over a thousand developers.  And of course, now that they just locked in another round of funding, they’re currently hiring.

Wedbush Wedbush Study Finds Benefits In Bitcoin’s Volatility

A report by Wedbush Securities says Bitcoin’s price volatility will continue, which will benefit both investors, and consumers. Gil Luria, author of the report, stated that volatility is valued by traders, citing the connection between volatility and trading volume in equities. More advanced trading tools such as derivatives, margin trading, and computer trading, are now being introduced into the Bitcoin market, which makes it easier for advanced traders to enter the Bitcoin trading market.

Former US Mint Director Says Credit Cards’ Biggest Competition is Bitcoin

Former director of the US Mint, Edmund Moy, stated in an op-ed in Newsmax that “using bitcoin instead of credit cards could put up to $50 billion back into the pockets of merchants and consumers, and create 300,000 jobs every year.”  Adopting Bitcoin could offer businesses billions of dollars in transaction fee savings.  For companies operating on small profit margins, especially small business, accepting Bitcoin could increase their profitability by 14.6 percent. Bitcoin is also safer and more efficient than credit cards. Consumers worried about getting their identity stolen, card cancelled, or denied would know that their identity is safe using Bitcoin.

Chinese Bitcoin Exchanges Hold Over 100 Percent Reserves  

OKCoin Bitcoin exchange recently published results of an audit that details that they have 104% of Bitcoin reserves for customer balances. The exchange plans on implementing a system for customers to individually verify their account balances. Other Bitcoin exchanges such as Kraken, and Bitfinex are also releasing audits of their Bitcoin reserves, making this practice an industry standard. This practice should alleviate the concerns consumers have over liquidity of the exchanges, and avoid industry disasters like Mt. Gox.

The traditional financial system came crashing down in 2008 much because banks are allowed to loan their reserves. This house of cards also perpetuates the boom-bust business cycle.  Bitcoin exchanges holding over 100 percent reserve is very profound because depository institutions with net transactions accounts that are between $12.4 million and $79.5 million are only required to hold 3% reserves.

Overstock Incorporates Bitcoin Into Global Payments

Overstock, the online retailer, plans to accept bitcoins for its international customers. Currently, bitcoin payments account for one quarter of one percent of Overstocks sales or about $15,000 a day. Patrick Byrne, Overstock’s CEO, is staunch advocate of the digital currency and has even headlined some Bitcoin events. By accepting bitcoin on the company’s international site, O.co, Overstock plans to save 8 percent in processing fees.

Coinbase Acquires Block Explorer Blockr.io

Coinbase just acquired the block explorer Blockr.io.  Two of Blockr.io’s team members, Sašo Matejina and Samo Drole, a software engineer and designer respectfully, will join Coinbase’s San Francisco office. They will work on Coinbase’s API “for developers who want to build on top of bitcoin.” Coinbase said that they liked Blockr.io’s design and API and had been following the company since earlier this year. Blockr.io will remain as is for now until the two make their transition to Coinbase.

ESPN Accepts Bitcoin Via Bitcoin Bowl Sponsorship

BitPay purchased the sponsorship of ESPN’s annual postseason college football bowl in St. Petersburg, FL earlier this year.  At a press conference this week, BitPay divulged that they paid for the $1.5 million 3-year sponsorship in bitcoin. Now called the Bitcoin Bowl, the first bowl game will take place on December 26, 2014.  In addition, BitPay also successful encouraged the St. Petersburg Museum to start accepting bitcoin.

Bitcoin ATMs Flourish In NYC, Despite Regulation Drama

Lamassu Bitcoin Ventures is not holding back on expanding operations in New York, despite the huge regulatory risk posed by New York’s proposed BitLicense regulations, which might apply to ATM operators. Lamassu just put their latest ATM machine in the heart of the West Village in New York City.

Matt Russell, chief marketing office of PYC Inc., the ATM service provider, told Bailey Reutzel of PaymentsSource, “We’re prepared to abide by it [BitLicense]; we’re a company that wants to bring Bitcoin to the masses and we want to do it legally.”

Picture of the Week: Matt Russell

Our picture of the week is of Matt Russell outside of Flat 128, the newest Bitcoin ATM home in Manhattan.

Quote of the Week: Perianne Boring

“Ask not what Bitcoin can do for you – ask what you can do for Bitcoin.”

This Friday, August 29th is the first-ever Bitcoin Education Day, hosted by the Chamber of Digital Commerce. BBR’s Quote of the Week comes from the Digital Chamber’s very own, Perianne Boring, Founder and President of the non-profit, and bitcoin activist.

Plug of the Week: Support John Scianna for Draper University

John Scianna is currently a student at the University of Florida studying business and has been nominated to attend Draper University, an entrepreneurship program founded by venture capitalist and bitcoin enthusiast Tim Draper.

Scianna was first introduced to bitcoin in 2012 during a study abroad program at the University College Utrecht, where he studied the Cyprus banking crisis.  He is a bitcoin miner, investor, contributor to Bitcoin Magazine, volunteer at the College Crypto Network, and intern at the Chamber of Digital Commerce.

You can help John take his fledgling bitcoin career to the next level by donating to his cause here.

BitLicense Update:

There are only 19 days left to comment on the New York Department of Financial Services BitLicense proposal. BitLicense is the first state-wide proposed regulation for virtual currencies and would have far-reaching effects on the bitcoin industry. We have been very critical of the proposal because we believe that, as written, BitLicense will hinder innovation, choke off small businesses and start-ups, and will have international implications.

Inaugural Congressional Bitcoin Education Day

The Chamber of Digital Commerce is holding a Bitcoin Education Day on August 29, 2014 on Capitol Hill in Washington, DC and is currently looking for participants. If you are interested in helping spread the word about bitcoin, please send an email to [email protected] with the following information:

First and Last Name:

Company and Associations:

Address:

Phone number:

Email:

Who is your US Representative (you can check here: http://house.gov):

For more information about the event email [email protected].

Bitcoiners are also encouraged to sign the Chamber of Digital Commerce’s BitLicense petition here.

Circle Founders Voice Thoughts On BitLicense

Jeremy Allaire and Sean Neville (co-founders of Circle, a digital banking company that utilizes bitcoin) expressed their thoughts on New York’s Department of Financial Services’ BitLicense. (Recap: BitLicense is the first attempt by a state to regulate Bitcoin and could have far-reaching effects as other states adopt similar models.) The founders are cautiously optimistic that the NYDFS will amend its current BitLicense proposal. In its current form, BitLicense could mean bitcoin based businesses will shun New York for other locations, while businesses that deal in bitcoin may decide from doing any business in the state.

Other Government Initiatives on Bitcoin:

Consumer Protection Agency Warns Consumers About Digital Currency Use

The Consumer Financial Protection Bureau announced recently that they are accepting complaints on digital currencies such as Bitcoin, and Dogecoin. In the newest Consumer report, the bureau detailed warnings regarding the use of these digital currencies. The CFPB stated that the Bitcoin’s exchange rate is volatile, which could make users fear loss of investment due to depreciating value. Hackers can steal one’s money from an exchange or wallet, and users can be scammed through fraudulent exchanges, intermediaries, or traders. Some Bitcoin companies may not have the sort of consumer help that a traditional bank may have.

The industry quickly responded to yet another government the boilerplate warning.

“On the heels of NYDFS’s proposed BitLicense regulatory scheme, this is yet another example of why the Chamber of Digital Commerce was formed – to help educate federal (and, when warranted, other) regulators and policy makers and guide them into smart regulation. This advisory confirms that there is real urgency for the sector to support the work of the Chamber. There is abundant evidence that our concern is in no way alarmist,” said Perianne Boring of the Chamber of Digital Commerce.

European Court of Justice Considers Bitcoin VAT

The European Court of Justice (ECJ) is currently considering whether or not value-added taxes (VAT) are owed by digital currency exchanges that charge a fee for their services. The question was presented to the ECJ by Sweden back in June of this year. Estoban van Goor, a European tax lawyer, cautioned that the ECJ could take up to two years to make a decision, and the resulting decision could be broad legislation for all of the European union. Elsewhere in Europe, the United Kingdom explicitly stated in March that Bitcoin trading would be exempt from VAT.

Bank of Canada Incorrectly Suggests that “Cryptocurrency Arbitrage Doesn’t Exist”

A new paper from the Bank of Canada, titled Competition in the Cryptocurrency Market claims “cryptocurrency arbitrage doesn’t exist.” However, the paper has been criticized for using only daily closing rates (Bitcoin exchanges do not close like traditional markets) and only looking at a handful of European exchanges, even though arbitrage usually requires an international backdrop to be detected.

Furthermore, CoinDesk’s Joon Ian Wong dug a little deeper and found several examples where arbitrage has taken place in bitcoin markets. For example, “there was 20-40% arbitrage [opportunity] between European and Chinese exchanges trading at considerable premiums. The reverse, where China traded cheaper than Europe, was also witnessed [this spring] when [China’s central bank] made announcements relating to banks dealing with bitcoin exchanges,” according to Arthur Hayes of BitMEX, a bitcoin derivatives exchange.

Singapore’s Monetary Authority Welcomes Bitcoin

In a recent interview with Centralbanking.com, the managing director of Singapore’s Monetary Authority, Ravi Menon, said Singapore will not ban Bitcoin and is taking a wait-and-see regulatory approach while only regulating “virtual currency intermediaries.”

“It is hard to divine how technology and practices will evolve, 20 or 30 years from now. I would say virtual currencies have a role to play, but I doubt they will replace the fiat money that central banks issue – but I could be wrong,” said Menon.

Singapore has always been pro-bitcoin and will continue to be a hotbed for startups, given its global financial center of gravity.

Bitcoin Industry Initiatives:

AirBnB, Uber, eBay: Just A Few Companies Quietly Looking At Accepting Bitcoin

PayPal (part of eBay Inc.) has been quietly looking at integrating bitcoin (and other virtual currencies) into their Braintree payments subsidiaries. Braintree provides payment-processing software for big mobile apps like Uber and AirBnB. No official agreements have been met yet, despite constant talks with bitcoin payment companies like Coinbase, Inc.

Overstock’s Adoption of Bitcoin Aids Company Earnings

The adoption of Bitcoin is expected to add 4 cents a share to Overstock’s earnings this year. The online retailer is expected make roughly $6 to $8 million in Bitcoin sales in 2014. Overstock uses a San Francisco based Bitcoin payment processor, Coinbase, which gives 2 to 3 percent savings in transaction fees. Overstock operates on thin margins for profits, and Bitcoin is an innovative way to reduce costs. Dell, Dish Network, and Newegg, an electronic retailer also recently announced that they would accept payments in Bitcoin.

Are Merchants Accepting Bitcoin Solely For Marketing Purposes?

An article in the New York Times suggest that merchants are only accepting bitcoin as a marketing play. While there are merchants accepting virtual currencies, the number of daily bitcoin transactions has remained relatively stable (around 60,000). One explanation is that it’s still easier for customers to pay with a credit card, than it is for them to purchase with bitcoin.

A lot of smart retailers are getting into bitcoin for market purposes initially, but later find themselves pleasantly surprised by a community of customers they never knew about. This new group of customers also spends more and on average has a higher spend ticket. While the incentive to start accepting bitcoin may currently come from the marketing department, we believe that smart companies will soon see the push come from the accounting department as well.

BitPay Hires New Employees From VISA, PayPal and Jumio

BitPay, the bitcoin payment processor, has hired some new talent from VISA, PayPal and Jumio for its San Francisco office. Sonny Singh, who was formerly Jumio’s (a payment services company) VP of Sales and Business Development, will take over as BitPay’s Chief Commercial Officer. BitPay also hired Gregg Zigler as Senior Software Engineer, Zigler has had ten years working experience on PayPal’s foreign exchange architecture. BitPay services are now used by over 40,000 businesses and organizations and the goal is to reach 100,000 by year’s end.

BitGo Brings Multi-Sig Security To The Bitcoin Foundation

The Bitcoin Foundation announced that it will utilize BitGo’s Enterprise services. BitGo pioneered multi-signature technology for Bitcoin wallets and their Enterprise solutions offer a safe way to manage Bitcoin assets. The Bitcoin Foundation acts as a non-profit trade organization that works for the “development, safety, and promotion” of Bitcoin. The Bitcoin Foundation will now be able to use BitGo’s services for everything from payroll to issuing grants.

Venture Capitalists Are Investing in Emerging Markets

In 2013, the mass majority of venture capital bitcoin investments were made in American companies. This year we are starting to see VC move into emerging markets across Asia, Africa, and Latin America. Chinese Bitcoin exchange BTC China raised $5 million in Series-A funding, and a Mexican exchange recently raised $250,000 from VC investor Barry Silbert.

“Through the use of Bitcoin, Volabit has the potential to radically transform the US-Mexico remittance corridor, one of the largest money transfer corridors in the world.” According to Silbert.

The impact of Bitcoin in an emerging market like Mexico has the vast potential to bring commerce to a population of millions of unbanked and under-banked people. Investment money slowly moving into emerging markets shows that bitcoin is entering into the investment and consumer-ready phases of development.

Venture Beat: Emerging Market Consumer Opinions

A recent survey conducted by Jana researched Bitcoin consumer interest in emerging markets. Seventy-four percent of Kenyans surveyed indicated that they would be comfortable with investing in digital currencies. In Brazil and Mexico that number was just over 50 percent. Bitcoin could be particularly useful for emerging markets, because adoption of digital currencies could insulate users from high inflation. Adam Draper, a Bitcoin entrepreneur stated that when Bitcoin stabilizes, the digital currency could offer the largest impact in emerging markets such as Indonesia, and Vietnam.

Going Green: Bitcoin Mining Company Looks To Save Energy Costs

A German-based startup says they have found the solution to more energy efficient computer “mining.” ASICrising GmbH (which is trying to change their name to CoinBau AG) has invented a computer chip that will cut down a gigahash to almost half, from 0.37 joules to 0.19 jouels. *Note: A gigahash is lots of mathematical equations (aka: hashes) that solve the bitcoin mining process and help create bitcoins. One billion hashes are mined every second, and equal one gigahash.

The company is currently looking for funding to expand operations.

Bay Coins Releases Bitcoin Buy/Sell App

Bay Coins LLC released Bitcoin Bazaar, a bitcoin trading app for Android and iOS. The app works across platforms for local buyers and sellers and for online users. Users of the app can utilize PayPal and online bank transfers, and not have to worry about Bay Coins holding their money. The app has a built-in escrow and a dispute resolution center to provide safety to both sellers and buyers.

Bitcoin Magazine Releases Back-to-School Issue

Bitcoin Magazine has teamed up with the College Cryptocurrency Network (CCN) to release a “Back-to-School with Bitcoin” issue in September. The special edition magazine will feature CCN’s Jeremy Gardner as co-editor, and will focus on youth covering bitcoin. In addition, the issue will feature some of the industry’s top thinkers and their thoughts on the latest innovations in the space.

 

Like it? Send a tip to the Boring Bitcoin Address: 12LFcP4HgHMecskwLQXaRKJuHR21xgvQm8

 

 Written by John Scianna, Contributor

BitGo, the company that pioneered the first multi-signature wallet, is announcing today that the Bitcoin Foundation has elected to use BitGo Enterprise’s security solutions for its operations. The Bitcoin Foundation is a non-profit trade organization and its core values are the “development, safety, and promotion” of Bitcoin.

Will O’Brien, the CEO and co-Founder of BitGo, stated that the Bitcoin Foundation’s “adoption of multi-sig is a case study for the world. As stewards of the core protocol code and influencers in other important areas of the ecosystem, the Foundation must have business continuity and operational scalability.”

The news comes at a time when security of bitcoin assets has become a top priority in the community. BitGo Enterprise’s platform utilizes multi-signature security and hierarchical deterministic (HD) wallets that allow for master public keys and master private keys.

Simply put, Multi-signature technology requires multiple parties to sign off on transactions and HD wallet addresses are generated from a master seed or “parent key.” From the parent keys, child keys can be generated where the parent can have access over the child accounts but not vice versa. This is perfect for companies, as the legal department or sales department can have their own funds and sub-funds to use their allocated capital accordingly. So, the CFO, CEO or audit team could then hold the master/parent keys to manage over the company’s funds.

The multi-signature and HD wallet technology gives customers of BitGo Enterprise the security they need while having the ease of using their bitcoins in day-to-day transactions. For the Bitcoin Foundation, this means they can use BitGo’s financial and management tools for “payroll, technical grants, and other activities.”

O’Brien, said “Multi-sig and HD are foundational standards that will make it safer to store and transact in bitcoin, and therefore accelerate bitcoin adoption.”

According to Jodie Brady, Bitcoin Foundation’s Director of Operations, “BitGo is the first in the ecosystem to provide a sophisticated wallet for securely managing spending authority at an institutional level. BitGo are truly innovators, in that they are bringing functionality traditionally provided by conventional banking services to the Bitcoin ecosystem.”

Having raised $12 million in a Series-A funding round earlier this year, BitGo is one of the most well-funded companies in bitcoin. BitGo Enterprise’s features include 24/7 monitoring and industry leading alerts, along with spending limits, approval for large transactions and more. In addition, BitGo’s service gives users full-control over their bitcoin assets and acts simply as a “security layer and co-signer, similar to how a safe deposit box works” said O’Brien.

Bitcoin technologies are exhibiting more and more each day the wonderful applications they can be applied to, from making simple transactions to managing key accounting components of large organizations.

This week bitcoin-ers are preparing for the Cryptolina bitcoin conference in Raleigh, North Carolina on Friday and Saturday, August 15 and 16. Perianne Boring, BBR Editor in Chief and President of the newly formed Chamber of Digital Commerce, is giving an update on the state of New York’s BitLicense Regulations. Headlining is Edmond Moy, former Director of the US Mint (2006-2011) who has recently become semi-bitcoin famous by getting vocal about bitcoin over his social media channels. This will be Moy’s first bitcoin conference.

Update on BitLicense Initiatives:

The New York Department of Financial Services published their proposed BitLicense Rules and Regulations on July 17. We are three weeks into the 45 day comment period where the industry has the opportunity to express any concerns they may have. Thousands of people have submitted comments to the DFS and last week a spokesperson from DFS said “we are open to [extending the comment period]”, which we find encouraging.

Along with the Chamber of Digital Commercepetition, there are several petitions circulating the web regarding New York’s proposed BitLicense regulations, including Fix BitLicense Coalition, and Boost VC’s petition on FixTheBitLicense.org.

Concerned parties are also encouraged to submit personal comments directly to NYDFS Office of General Counsel Dana V. Syracuse, New York State Department of Financial Services, email: .

CoinDesk: Industry Reactions to New York’s BitLicense Proposal

A collection of interview from industry CEOs and compliance officers.

Chamber Of Digital Commerce Will “Bridge the Gap” Of Political Uncertainty

After launching the Chamber of Digital Commerce at The North American Bitcoin Conference in Chicago last month, President and Founder Perianne Boring vows to bridge the gap between political uncertainty and public perception of bitcoin. “As Steve Stockman remarked at the TNABC, policy makers tend to over-regulate the unknown due to uncertainty and a sense of ‘public duty.’” The Chamber recently launched a petition on their website asking New York DFS to extending the comment deadline on their proposed BitLicense Regulations. (You can read and sign the petition here.)

Boring: NY BitLicense Would Tell Bitcoin Companies Where To Invest Profits

In an interview with Pocket Full Of Apps, Perianne Boring, Founder and President of the Chamber of Digital Commerce, addressed her concerns about New York’s proposed BitLicense regulations. She believes “BitLicense has the potential to choke off small business.” Boring also highlights Section 200.8 (b) of the proposal, and says if Lawsky’s BitLicense is passed, the regulations would force “Bitcoin companies to invest their profits into traditional investments and prohibit companies from investing profits back into the industry they are operating in.”

Here’s To Another Not-So-Boring Week:

Andrew Hemingway Becomes First Candidate for Governor To Accept Bitcoin

New Hampshire’s youngest gubernatorial candidate ever, 32 year old Andrew Hemingway, is also the first candidate running for governor to accept bitcoin campaign donations. Already, 20 percent of the GOP candidate’s donations have come in bitcoins. (Recap: In May the Federal Election Commission legalized bitcoin donations, capped at $100.) If elected, Hemingway hopes to make New Hampshire the first state to allow residents to pay their state taxes in bitcoin.

Blockchain Reaches Two Million Wallets

Blockchain.info is celebrating crossing the two million dollar e-wallets line.  The number of e-wallets has increase eight times year-over-year according to Mary Meeker’s Internets Trend Code Conference.  E-wallets continue to grow exponentially.

Rushwallet Releases In-Browser Wallets

Canadian based technology company, Kryptokit, which specializes in digital currencies and encryption services, has released a new HTML5 in-browser wallet. The wallet is integrated with OneName.io, a service that ties usernames to bitcoin wallet address, so sending payments can be as easy as typing @UserName in the recipient address. You can access your wallet from anywhere by typing in the URL in your web browser.

Wikimedia Rakes In $140,000+ In Bitcoin

One week after deciding to accept bitcoin donations using Coinbase, the Wikimedia Foundation had raised more than $140,000 worth of bitcoins. Wikimedia Foundation is the non-profit that runs Wikipedia, the free online encyclopedia. Coinbase offers 0% processing fees for non-profits like the Wikimedia Foundation, which is does not display ads, and is funded through donations. The move was surprising because back in March the co-founder of Wikimedia, Jimmy Wales, in a subreddit post bemoaned the fact that offering more payment options led people to donate less.

ChangeTip Expanding Operations

ChangeTip is a service that allows people to send bitcoin micropayments as tips to people on different social media outlets.  Users tip by mentioning @changetip (or /u/changetip on Reddit) in the comment section stating the tip amount they would like to give to the author of the post.  Users can also choose to tip someone for the amount of a coffee or other items.  Micropayment services, like ChangeTip, have the potential to revolutionize the media industry by decentralizing the need for advertisements.  Instead of media companies having to support advertisements to fund their services, readers and viewers can “tip” the authors directly, cutting out a middle management process.

ChangeTip is currently servicing Twitter, Gitbub, Reddit and StockTwits and recently announced they are expanding operations to YouTube, Tumblr, and Google+.  To start tipping visit https://www.changetip.com/ and set up your account.

Huobi Acquires Two Companies To Expand Services

The Chinese exchange features and services war heats up: Chinese exchanges are constantly trying to one-up each other as the competition grows – a healthy challenge that benefits consumers.

Huobi, one of China’s largest bitcoin exchanges, just acquired two companies Quickwallet and Qukuai.  Quickwallet is a multi-signature wallet company that will bring greater security to Huobi customers.  Qukuai is a bitcoin block explorer which tracks bitcoin transactions in the blockchain. These acquisitions will extend Huobi’s product line which now includes its traditional exchange, BitVC – a margin trading and interest bearing account platform, and now multi-signature wallets and a block explorer.

Vogogo Gets $8.5 Million In Funding

Payment services company, Vogogo, has raised $8.5 million in funding. Vogogo offers payment processing technology with a focus in software development, risk management and compliance services. The company plans on expanding into the US market in the next few months, in addition to their current Canadian market. In a recent press release, CEO Geoff Gordon said that Vogogo will help the “global crypto industry to meet the stringent requirements of regulators and traditional banks.”

Global Payments Inc. Signs Referral Deal With Bitpay

Global Payments Inc. is one of the largest payment processors in the world, servicing the healthcare, retail, government, and financial services industry, among others. On August 6, Global Payments announced they signed a referral deal with Bitpay, one of the largest bitcoin payment processors, to offer bitcoin payment services to Global Payments merchants. Tony Gallippi, Bitpay co-founder, said “This partnership with Global Payments allows ecommerce and retail merchants to easily accept bitcoin payments.” Notably, both Bitpay and Global Payments are both based out of Atlanta.

Public Perception Of Bitcoin Is Changing – For The Better

According to a report from ETH Zurich Department of Systems and Designs, David Garcia (a lead researcher in the report) says, “bitcoins were something for hackers and computer nerds. Today hipsters pay for their drinks with it.” The report found a positive correlation between social media trends (think tweets and Google searches) and the price development of bitcoin.

WSJ: “Learning To Love A Boring Bitcoin Market”

Bitcoin’s price is starting to flatten out, and while this might not sound like news, it’s a big deal to some. Many believe that in order for Bitcoin to prove itself as a reputable form of currency, the index price needs to flatten out. Bitcoin spiked on June 1st ($676.75), and had numerous ups and downs with media-frenzied episodes like the Silk Road and Mt Gox scandals. In their weekly Bitcoin report, Dan Morehead and Ron Glantz (Pantera Capital) “expect this to create a positive feedback loop in which volatility declines and consumers become increasingly comfortable holding and using bitcoin in their daily lives.”

Bitcoin Brands Inc. Hopes To Capitalize on ‘Microloans’

Microloans were created for the self-employed and for startups looking for loans not exceeding $35,000. Now, three companies are hoping to simplify the process even more by offering their micro-lending services to the masses. TrustLeaf hands out microloans through private crowdsourcing (friends and family members only), while PayPal Working Capital fixes microloan repayments on a percentage of total monthly sales, and Bitcoin Brands offers microloan services through Bitcoin.

Lake Tahoe Home Sells For 2,739 Bitcoins…$1.6 Million

Only a handful of properties have been sold in bitcoin, since the peer-to-peer currency hit the market. A 1.4 acre porperty in Lake Tahoe now joins the ranks. BitPay processed the transaction.

BBR Trend: What We’re Reading…

Bitcoin Pandemonium: The Onging Economic, Public, and Legal Debate over the Nature and Impact of Bitcoin by Nicolas Wenker

Bitcoin Pandemonium offers an in depth analysis on bitcoin and the history of regulation behind it.  The book reaches both a mass audience, with simple explanations and definitions. “One of Bitcoin’s biggest challenges in becoming mainstream is the lack of regulatory clarity. Bitcoin Pandemonium brings a sense of cohesiveness to Bitcoin’s fragmented regulatory efforts,” says Perianne Boring, Founder and President of the Chamber of Digital Commerce.

 

All eyes are on New York. Since the New York Department of Financial Services published their BitLicense proposal on July 17, the bitcoin community has been scrambling to provide comments to their severely inadequate 45-day comment period. The BitLicense proposal is 40 pages of regulations that are broad based and have the potential to choke out small business and stifle further innovation to blockchain technology. New York often sets the stage for federal and other state financial pubic policy so it is imperative New York gets this right. Last week I spoke at the NY Bitcoin Center at length on this very issue, CoinTelegraph has the interview.

What can you do?

Sign the Chamber of Digital Commerce petition asking Superintendent Benjamin Lawsky, to extend the comment period through the end of 2014.

The Digital Chamber also encourages submitting personalized comments directly to NYDFS Office of General Counsel Dana V. Syracuse, New York State Department of Financial Services, email: .

Here’s a not-so-boring week in bitcoin: 

Government Initiatives:

NYDFS Willing To Extend BitLicense Public Comment Period

A spokesperson for the New York Department of Financial Services (NYDFS) said their office would be open to extending the public comment period on the controversial proposed BitLicense regulations. This is hopeful news for many bitcoin activists, who believe the current 45-day comment period is too small a timeframe to pass such monumental regulations.

The NYDFS statement comes on the heels of multiple, widely-supported calls for an extension. Since the public comment period opened on July 23rd, the NYDFS office has already received thousands of comments on their proposed regulation. Both regulators and Bitcoin enthusiasts will need to work together to ensure both sides interests are protected. In the meantime, despite their openness, the NYDFS says they’ll march on ahead as planned.

US House Congressmen Host ‘Bitcoin Demo Day’ On Capitol Hill

Last week, Rep. Jared Polis (D-Co.), Rep. Mick Mulvaney (R-S.C.), and Rep. Bob Goodlatte (R-Va.) co-hosted a Bitcoin Demo Day for US Members of Congress and invited various Bitcoin startups to come help explain Bitcoin to their colleagues. Coinbase, BitPay, BitGO, and Expedia all sent representatives to participate. This is what’s called “advocacy” or education type work, which is important. This industry still needs formal representation in Washington to set up firewalls to mitigate political and regulatory risk. As lawmakers become more familiar with digital currencies, they may be more open to input from the industry in regards to regulation.

Argentina’s First Bitcoin Exchange’s Bank Accounts Closed

Last week, Unisend, Argentina’s first Bitcoin exchange, received written notice of account closures from their banks. The Argentinian subsidiaries of Santander bank and Galicia bank informed Unisend of their account termination, but did not provide a reason why. Last month, the Argentina’s Financial Intelligence Unit passed a resolution that would require all financial institutions to report digital currency transactions to counter money laundering and terrorism efforts. The new law went into effect on August 1st.

Russia’s Ministry Of Finance To Introduce Bill Banning Bitcoin

According to Russian news sources, the Ministry of Finance said they were in the process of drafting a bill to ban digital currency. The proposed bill will amend existing laws to specifically allow Russia’s Central Bank to ban digital currencies such as bitcoin. In addition, Russia plans to block websites that allow users to buy, sell, or use non-Russian virtual currencies. According to WSJ, earlier this year, Russia’s Central Bank announced that it would not block Bitcoin usage.

French Senate Considers Different Countries’ Bitcoin Regulations

The French Senate has recently released a report titled, Regulation in the face of innovation: public authorities and the development of virtual currencies. France’s Minister of Finance, Michael Sapin, has stated that France’s approach to Bitcoin regulation will be “halfway between the strictest regulations [from] China, Japan or Russia or the lightest regulations adopted by countries such as the United States, Canada or Israel.” Specifically, the report suggests that Bitcoin regulatory framework should be built with all of Europe, if not all of the world, in mind.

Industry Analysis:

Visa Flip-Flops On Bitcoin

Visa’s CEO Charlie Scharf said the credit-card giant is able to accommodate bitcoin. This comes several months after Visa’s CEO Charlie Scharf said bitcoin was not a significant threat to him, “Visa is not a currency, it’s a network. We can process real or virtual currencies to the extent that it makes sense…but we are not thinking about it today.” As more and more trusted brands begin accepting bitcoin, like Dell and New Egg the financial services giants are being to take bitcoin seriously.

Update on Silk Road Defense Case Calls Search “Indiscriminate Rummaging”

Ross Ulbricht, the man charged with operating Silk Road, an online marketplace for illegal drugs, says his Fourth Amendment rights have been violated. At least his lawyers think they have. They want the judge to throw out most of the evidence brought against Ulbricht, which they say was indiscriminately rummaged through. “The wholesale collection and study of Mr. Ulbricht’s entire digital history without limitation — expressly sought in the warrants and granted — represent the very type of indiscriminate rummaging that caused the American colonists so much consternation,” according to the papers filed late Friday in federal court in Manhattan.

Xapo Ships And Addresses Fee Confusion

Xapo (the most well funded company in bitcoin) began shipping their much anticipated debit cards last week, but not without one small hiccup. Their somewhat complicated fees and limits schedule caused skepticism among a few reporters about the terms of services. Xapo quickly clarified the issue in a blog post, stating they do not “intend to charge monthly fees or fees for everyday spending.” Disclaimer: ATM fees are still possible since they also apply to bank-issued debit cards.

Debit and credit cards are highly regulated. There is a lot of red tape Xapo has had to cut through to offer this product to the community. There are bound to bumps along this road, but Xapo is greatly contributing to the long-term acceptance and use of bitcoin.

PlayersAuctions Accepts Bitcoin With Coin.co

PlayersAuctions, one of the largest gaming marketplaces has partnered with Coin.co, a bitcoin payment processor based in New York, to accept bitcoin. The gaming company is a peer-to-peer exchange for gamers, who purchase everything from really awesome gaming chairs to virtual assets.

“As a tech-savvy sector, both video gamers and innovative companies like PlayerAuctions are realizing great benefits of utilizing and accepting Bitcoin.Coin.co and PlayerAuctions are happy to be making bitcoin as a payment option available to this market,” said Brendan Diaz, CEO of Coin.co.

PlayersAuction fits right in with the bitcoin community, as gamers were some of the first people to use the digital currency. Example: hardcore gamers turned their graphics cards into mining machines before new ASICs bitcoin hardware became available.

Stellar

Jed McCaleb (original founder of Mt Gox, co-founder of Ripple Labs) just unveiled his ‘secret bitcoin project’ called Stellar. Stellar is “a decentralized protocol for sending and receiving money in any pair of currencies.” Basically, this means a user in Europe can send Euros and have a recipient in Mexico receive Pesos. Stellar is very Ripple-like but hits what Ripple missed on in terms of allocation; however, that could mean they could face funding problems that could hinder future development.

Coinapult Locks

Panama-based wallet service provider Coinapult has launched Coinapult Locks. ‘Locks’ are marketed at those who are afraid of deflation – they are the perfect Keynesian solution to bitcoin volatility. Users can peg the value of their bitcoin or “lock their bitcoin” to other assets such as the US Dollar, Euro or gold.

For example, if I “lock” my bitcoin at today’s exchange rate of $600 and if the exchange rate falls to $300, Coinapult would credit my account to two bitcoins. However, if I “lock” my bitcoin at today’s exchange rate of $600 and the exchange rate doubles to $1,200, I would now only have .5 bitcoin in my Coinapult account.

As someone that is long and bullish on bitcoin, I will not be utilizing this service, however, I will recommend it to those who think deflation will keep bitcoin from ever being a unit of account.

CheapAir.com Bitcoin Sales Top $1.5 Million

CheapAir.com, the first U.S. online travel agency to accept bitcoin (followed quickly by Expedia), has processed over $1.5 million in bitcoin payments. This includes things like flight, hotels and Amtrak fares. The company caught wind of the digital currency back in November 2013, after a customer asked if he could use it to pay for a flight. Lightbulb moment. We think he might be onto something…

Don’t forget to sign the Digital Chamber’s BitLicense Petition and submit personal comments directly to NYDFS Office of General Counsel Dana V. Syracuse, New York State Department of Financial Services, email: .

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The Boring Bitcoin Report Address: 12LFcP4HgHMecskwLQXaRKJuHR21xgvQm8