Boring Bitcoin Report

The Bitcoin Galaxy lit up last week with many stellar events. Here’s the latest from the Boring Bitcoin Report: The US Federal Trade Commission brought yet another case against a Bitcoin company, that same agency issued a consumer warning on bitcoin, the US military probed Bitcoin in wake of the Isis crisis, and the first politician was elected into public office running solely on a Bitcoin campaign. We’ve also added a new section to the report this week, the Boring Bitcoin Calendar, with a list of industry events. The details are below.

Click on the headlines for links to the full stories.

Summary of Government Related Initiatives

Federal Trade Commission Sues Butterfly Labs

Last Monday, the US Federal Trade Commission brought a civil lawsuit against Butterfly Labs, and along with the US Marshals Service, shut down the Kansas City Bitcoin mining manufacturer for unfair and deceptive business practices. This is at least the fourth lawsuit brought against Butterfly Labs in the past two years. Butterfly Labs is now under the control of a court-appointed receiver. In a response made public by Butterfly Labs, the troubled firm claimed the FTC was going to war with Bitcoin, but claimed to be working with the appointed receiver. 

FTC Warns Consumers About Bitcoin

Last week, the FTC released a 306 word advisory to help consumers “stay current” on bitcoin and other virtual currencies.  The boilerplate document warns that there is no insurance on Bitcoin deposits (like FDIC insurance) or legal protections. The FTC also suggests encrypting and backing up wallets.

US Military Probes Bitcoin In Wake Of ISIS Crisis

The Bitcoin Foundation met with US military personnel in Tampa, FL last week to discuss how terrorists groups (ISIS, Al-Qaeda, etc.) might use cryptocurrencies to fund terrorist schemes. ISIS (currently touted as the “richest terrorist group in history”) has been heavily involved in a “dark network” of the Internet, “although ISIS itself is ‘principally funded through means other than virtual currency.’ ” Business Executives for National Security organized the meetings.

Ben Lawsky Interviews on Bloomberg TV About BitLicense

In an exclusive interview with Bloomberg TV, NY Department of Financial Services (DFS) Superintendent Ben Lawsky spoke about bitcoin and his proposed BitLicense regulations, which are currently under a public comment period. Lawsky first stated that block chain technology is powerful and that bitcoin could “cause the rest of the payment systems world to really up their game and really improve things.” He then went on to say that “we would like to have regulation that is the lightest touch possible to promote innovation… but not so light that you allow the proliferation of money laundering.” Hopefully the industry can hold him to these words. A re-write of BitLicense would be required to fulfill these promises.

Leading Texas Gubernatorial Candidate Embraces Bitcoin

Republican Gubernatorial Candidate, Greg Abbott, is embracing bitcoin contributions for his political campaign. Abbott has served Texas as Attorney General for the past 12 years and wants to keep taxes low and reduce regulations so that Texas’ technology sector can continue to flourish as Governor. Texas has a deep history in the technology sector, and Bitcoin will play a significant role in the state’s future.

Swedish Member of Parliament Wins Election Solely Through Bitcoin Donations

Deputy Mayor of Norrköping, Mathias Sundin, was just elected into Swedish Parliament and ran his entire campaign solely on bitcoin donations. He refused to accept Euros, Swedish Kronor, and US Dollars. His mission in Parliament is to resist any “knee-jerk” regulation of Bitcoin and other digital currencies and to promote a regulatory environment favorable to startups. This marks the first successful candidate to win a significant election based on a Bitcoin platform.

Summary of Industry Initiatives

Greenpeace Accepts Bitcoin Donations

The prominent NGO environmental activism group, Greenpeace, announced they support donations in bitcoin through BitPay. Bitpay has a team member dedicated to teaching non-profits about Bitcoin, and how Bitcoin can help charities like Greenpeace thrive through lower transactions cost. This comes just days after United Way announced they are accepting bitcoin donations via CoinBase.

BitFlyer Partnership Brings Bitcoin to 48,000 Japanese Merchants

GMO-GP, Japan’s largest payment processor, just partnered with BitFlyer to enable their 48,000 online merchants to use bitcoin if they so choose. GMO-GP will be the first payment operator to offer bitcoin payment services in Japan, which is set to become available in November. In addition to the partnership, GMO has also agreed to invest in bitFlyer in what bitFlyer’s CEO Yuzo Kano called a “business and capital alliance”.

Atlas ATS, Bitcoin Trading Platform, Offers ‘Price Lock Guarantee’ To Hedge Volatility

Atlas ATS has introduced a new service, Price Lock Guarantee, which “provides short-term volatility protection” by guaranteeing a quoted price for 60 seconds. Volatility has long been a criticism of bitcoin. ATS’s price lock guarantee offers merchants and payment processors that needed stability,” said Shawn Sloves, CEO and co-founder of Atlas ATS.

Why Mark Cuban Has Not Invested In Bitcoin

Mark Cuban, billionaire investor and owner of the Dallas Mavericks, told USA Today that he has not “invested in Bitcoin yet.” He believes bitcoin is “great as an encryption technology,” but is not a good currency and if he were to invest in bitcoin, it would be for “fun” (like buying baseball cards).

Leetcoin Announces Bitcoin Support for League of Legends

Leetcoin, online bitcoin gaming platform, now supports the internet phenomenon League of Legends, which has over 67 million active monthly users. Traditionally, online gaming competitions have been reserved for elite gamers playing for multi-million dollar prizes, but now through Leetcoin, any gamer can play for bitcoin – a digital asset that can be used outside of virtual reality. “Our team is paving the way for the next generation of competitive gaming,” said Leetcoin’s Founder and CEO, Kingsley Edwards. Bitcoin is a natural pair for these competitions because it allows quick and secure transactions, making online gaming more competitive, professional, and even profitable.

Georgia Tech Students Get “The Jacket Wallet”

Students at Georgia Tech now have access to their very own digital wallet. Launched by Love Will, Inc. (masterminds behind Pheeva bitcoin wallet), “The Jacket Wallet” only requires a campus email address to enroll. Representatives from Pheeva, BitPay, and campus group [email protected] were all present during the official kick off on September 24th. Users will be encouraged to join and contribute through gamification incentives.

Use Those Vacation Days, The Bitcoin Way

Want to take the perfect vacation, using only bitcoin? CoinDesk has laid it all out for you. Travel bugs and companies alike have been quick to adopt bitcoin as a form of payment. Bitcoin prevents the hassles of an abruptly cancelled credit-card due to potential fraud activity, foreign transaction fees, and pickpockets. So go ahead. Take a vacation. You earned it.

Boring Bitcoin Calendar

Chamber of Digital Commerce and Heritage Foundation Bitcoin Briefing

Wednesday, October 1, 2014, Washington, DC

The Heritage Foundation and the Chamber of Digital Commerce and will hold a public congressional briefing on Bitcoin and its regulatory environment this Wednesday. Speakers include Perianne Boring, President and Founder of the Chamber of Digital Commerce; Carol Van Cleef, Partner at Manatt, Phillips & Phillips, and George Gilder, Chairman of the Discovery Institute. The lecture will cover how Bitcoin operates and what potential regulations should look like.

Coins in the Kingdom

October 4 – 6, 2014, Walt Disney World Resort, FL

The First Bitcoin Wedding

October 5, 2014, Lake Buena Vista, FL

The Bitcoin Blockchain is a public ledger that records all transactions on the Bitcoin network, which also enables one to inscribe messages and contracts within a transaction, such as a marriage certificate. Next week will be the first time a couple will seal their vows on the blockchain. Blockchain marriages might be preferable for individuals and groups that do not conform to current governmental regulations on marriage. Jeffrey Tucker, the author, and publisher of Liberty.me will officiate the marriage, and the first, ‘Blockchain Marriage” will be provided by CoinOutlet.

InsideBitcoins Las Vegas

October 5 – 7, 2014, Las Vegas, NV

The Inside Bitcoins Conference will be held next week at the Flamingo Hotel & Casino. Topics for the conference range from Bitcoin startups, investing, mining, equipment, altcoins and more. The first 300 paid attendees will receive $50 in Bitcoin. Speakers include Patrick Byrne, CEO of Overstock.com, Bobby Lee CEO of BTC China, and Perianne Boring, the President and Founder of the Chamber of Digital Commerce. Perianne will be speaking on a panel called, “Building an Effective Compliance Program and Managing Regulatory Expectations” on October 6th at 4:00pm. The Chamber of Digital Commerce is happy to announce that they are partnering with the Inside Bitcoins Conference and Expo, and if readers are interested in attending they can enter code CHAMBER to receive 10% OFF Gold and Silver Passports. Register Now! http://insidebitcoins.com/las-vegas/2014/register?utm_source=boringbitcoinreport&utm_medium=email&utm_campaign=partneriblasvegasboring (Register now url)

CoinAgenda Investor Conference

October 7 – 9, 2014, Las Vegas, NV

CoinAgenda will debut the first conference dedicated exclusively to bitcoin and cryptocurrency investors. CoinAgenda will comprise two events in one. The first is a high-end conference for accredited and sophisticated investors seeking the latest knowledge and trends in bitcoin investing, and will be taught by some of the biggest names in the Bitcoin industry. The second is a concurrent event sponsored by BitAngels, the world’s largest angel network for investing in bitcoin companies. The focus will be on investment in bitcoin and cryptocurrency companies, but it will also serve as the first global conference for the 500-person angel group.

CFTC Public Meeting on Bitcoin

October 9, 2014, Washington, DC

The Commodities Futures Trading Commission (CFTC) will hold their first public meeting on bitcoin to discuss the Commission’s role in regulating derivatives contracts that use bitcoin. The meeting is open to the public for viewing either in person, or through a live video stream at www.cftc.gov.

Picture of the Week

Tweet of the Week

 

If you think #Bitcoin adoption is not happening, think again. Don’t make the mistake of following the price vs usage! pic.twitter.com/mGLBc9n4pX

— Brock Pierce (@brockpierce) September 26, 2014

 

Quote of the Week

“I made the decision to accept Bitcoin because I believe that it represents the free-market economic principles that make Texas a national leader in innovation and entrepreneurship.” Texas GOP Governor Candidate, Greg Abbot

In Bitcoin fashion – send a tip to the Boring Bitcoin Address: 12LFcP4HgHMecskwLQXaRKJuHR21xgvQm8

The market price of bitcoin took a big hit this past week – decreasing over 15 percent. In addition, the US Securities and Exchange Commission successfully prosecuted a man in Texas for allegedly running a bitcoin ponzi scheme. In Washington, DC, the industry has provided an additional one million dollars to launch a new public policy organization for bitcoin, a sign of market maturity; and a small British Crown dependency is poised to become the Bitcoin capitol of the world. The details are in the descriptions below.

Click on the headlines for links to the full stories.

Summary of Government Related Initiatives

SEC Prosecutes Trendon Shavers For Running ‘Ponzi Scheme’ And Fines $40m

While the Securities and Exchange Commission has yet to provide any guidance regarding digital currencies, they did manage to prosecute a second bitcoin related case. On Friday, a US federal judge issued a summary judgment against Trendon Shavers to pay a $40.7 million fine to the SEC for allegedly running a ponzi scheme. Trendon will be remembered as a bitcoin scammer, but truth be told, Shavers was not given a chance to plead his case and the industry will never hear the full story.

According the Jason Seibert, of F. J. Seibert, LLC “the SEC brought their heavy-handed playbook against Shavers. Before he had a chance to mount an adequate defense the SEC froze every asset… What the SEC did, and what the court allowed, wasn’t equitable, was a contravention to the law, and potentially denied Shavers his constitutional protections.”

Federal Reserve Bank of Boston Issues Paper Outlining Bitcoin’s Potential

In a research report written by a Boston Fed senior economist and Harvard economist, the bank tipped a hat to the disruptive power of block chain technology. In summary, the report states “the lasting legacy of Bitcoin most likely lies in the technological advances made possible by its protocol for computation and communication.” This is not the first time Fed officials have publically showed support for bitcoin – a positive sign that the government recognizes the potential digital currencies could bring to monetary and fiscal policy.

Coin Center Launches In Washington, DC

Last week a new public policy organization for Bitcoin launched in Washington, DC. Coin Center’s mission is “to build a better understanding of these technologies and to promote a regulatory climate that preserves maximum freedom of action for digital currency innovation.” Coin Center’s executive director, Jerry Brito, is the former senior research director of the Mercatus Institute of George Mason University. The Chamber of Digital Commerce “is delighted to welcome an additional voice for Bitcoin to Washington.”

Louisiana Republican Party Accepts Bitcoin Donations

The Louisiana Republican Party began accepting bitcoin donations on their website last week. A representative of the party stated that a public announcement of the decision will be released in the near future. Louisiana’s Libertarian Party also accepts bitcoin; however, the Louisiana Democratic Party does not.

Summary of Industry Initiatives

Market Price Of Bitcoin Drops Over 9 Percent

According to Winkdex.com, the market price of bitcoin dropped 15.78% last week from $477.32 on Sunday, September 14 to $401.98 Sunday, September 21. The authors behind the Wall Street Journal’s Bitbeat offer a few explanations. One theory says that there have been less “big buyers” on exchanges in the past few months, “which has given sellers an excessive impact on price,” driving prices downward. Another more elaborate theory argues that Chinese bitcoin miners are dumping mined bitcoins for US dollars to acquire more foreign assets (see Alibaba story below). Two of the largest bitcoin exchanges, BitStamp and BTC China, saw significant increases in trading volume, which also helped push Bitcoin’s price down more than $40 on Friday.

Alibaba IPO Might Have Affected Bitcoin Price

Alibaba Group Holding Limited (BABA), China’s largest e-commerce company (think Amazon, EBay, PayPal, and FedEx all in one), issued an initial public offering (IPO) on the New York Stock Exchange this past Friday, which turned into the largest IPO in US history. Starting at $68 per share, reaching a high of $100 and closing at $93.89, BABA’s valuation closed at over $231 billion.

Although no one knows for sure, this contributed to the declining price of bitcoin last week because investors were freeing up capital in bitcoin to invest in Alibaba.

Coinbase Launches Toshi – An Open Source Bitcoin Node

Coinbase announced the launch of Toshi, an open-source full Bitcoin node that aims to make it easier for developers to build web applications using blockchain data. Toshi allows developers to access information on addresses and transactions, broadcast new transactions, and get stats on the blockchain like confirmation time and block height. In that sense, Toshi is similar to several blockchain APIs like BitPay’s Bitcore, Chain’s API and Block.io’s APIs. Toshi was written in Ruby and developers can contribute to the project via GitHub if they notice any issues.

BitPay’s New API Has String Of Features

BitPay has released their new open-source Application Programming Interface (API) built on top of Bitcore. The API has merchant features that have the ability to implement refunds to any bitcoin wallet. In addition, the new API automates the submission of Bitcoin Bills through the API and can send requests for payments via email. The new API is available in several coding languages for developers: Node.js, C#, Java and PHP. BitPay also announced that they have made BitAuth, their decentralized authentication API for security, open-source.

Digital Currency Council Launches, Offering First Digital Currency Certifications

The Digital Currency Council launched last week, which is a professional association for attorneys, accountants, and finance professionals wishing to broaden their knowledge of digital currencies with certified coursework. DCC CEO, David Berger states that

“The mission of our organization is to educate and set a standard for attorneys, accountants, and financial professionals – those who advise others in exchange for fees – in the digital currency economy.”

Barry Silbert’s Bitcoin Opportunity Fund provided funding for the organization’s launch. The DDC offers four levels of membership, the basic “Explorer” membership is free and you can join .

Isle of Man Vying To Become Bitcoin Capitol

The Isle of Man is vying to become the Bitcoin capitol of the world by incorporating business friendly regulations. The country does not have any capital gains or corporate taxes and has low income taxes, which is attractive to financial services businesses. Other countries, such as Bangladesh and Bolivia, have banned the use of Bitcoin and with jurisdictions like New York proposing heavy regulations, the Isle of Man is posing as a safe haven for the emerging digital currency industry. The island nation has employed this strategy with the online gambling industry, and hopes to achieve the same level of success with Bitcoin.

Scotcoin Survives After Scotland Fails to Secede From Britain

When Scotland was considering seceding from the United Kingdom, some digital currency advocates suggested that the potential new country should adopt Bitcoin, or another digital currency like Scotcoin. Scotcoin was created by Scottish venture capitalist, Derek Nisbi, in hopes that it would become the currency of a newly independent Scotland. Derek Nisbit even gave 1,000 Scotcoins to every Scottish citizen to entice people to use the currency. Although the referendum to secede from the UK failed, the digital coin survived and currently has a market cap of roughly $150,000.

Picture of the Week

Our Picture of the Week was submitted by fellow bitcoiner who captured this sign at Burning Man.

Quote of the Week

“US startups are facing sever difficulties gaining access to banking partnership”

Our Quote of the Week comes from Pete Rizzo of CoinDesk in an article outlining one of the biggest challenges to bitcoin companies – getting a bank account. Many companies have had their accounts closed without explanation or warning.

Tweet of the Week

Bitcoin Tanks, Is Alibaba to Blame? Who cares about blame…sounds like a buying opportunity to me. via @YahooFinancehttp://t.co/iWdUshrZUQ

— Edmund Moy (@EdmundCMoy) September 20, 2014

Plug of the Week

Support John Scianna for Draper University of Heroes

John Scianna is currently a student at the University of Florida studying business and will be attending Draper University next week. Draper University is an entrepreneurship program founded by venture capitalist and bitcoin enthusiast Tim Draper.

John was first introduced to Bitcoin in 2012 during a study abroad program and followed bitcoin through the Cyprus banking crisis. He has since been a bitcoin miner, investor, contributor to Bitcoin Magazine and intern at the Chamber of Digital Commerce.

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

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

Last week was a week of announcements for bitcoin. PayPal announced they will start accepting bitcoin payments, IBM/Samsung quietly announced that they are working on a blockchain/Internet of Things project, and Apple announced a credit card partnership to form Apple Pay, which cuts out bitcoin all together. However, the move towards mobile wallets should provide a step in the right direction to transition consumers to digital currencies.

Click on the headlines below for links to the full stories.

 Summary of Government Related Initiatives:

CFTC Approves First Regulated Digital Currency Swap

TeraExchange created the first financial product based on Bitcoin that has the blessing of US federal regulators. The product is a derivative that allows customers to protect their Bitcoin holdings’ USD value. Plans for the swap were first announced in March, and it took over half a year for TeraExchange to get approval from the Commodity Futures Trading Commission. As part of their product, TeraExchange has formed a Tera Bitcoin Price Index.

Coinbase Submits BitLicense Comments To DFS

San Francisco based Coinbase joined the Chamber of Digital Commerce, Xapo, Circle, and many other champions of Bitcoin this week by submitting comments to NYDFS regarding the proposed BitLicense regulations. While Coinbase applauded the efforts of NYDFS, they remarked “the proposed BitLicense falls short of its stated goals of balancing customer protection and rooting out illegal activity, while encouraging innovation.” Coinbase is one of the largest Bitcoin services for both users and merchants.

Bank Of England On The Emergence Of Digital Currencies

The Bank of England recently published a quarterly report on the payment innovations present in Bitcoin and other digital currencies. Specifically, the United Kingdom’s central bank recognized that the distributed ledger is a groundbreaking innovation in the realm of payments. Recognizing that most financial assets already exist in digital form, the bank report admits that digital currencies are both more robust and more efficient. Previously in the UK, Her Majesty’s Revenue Service has clarified the Value-added Tax situation in favor of Bitcoin users across the country.

Summary of Industry Initiatives:

Breaking: United Way To Accept Bitcoin Donations

Just today, United Way announced that they will start accepting bitcoin donations for United Way’s Innovation Fund via Coinbase. This makes United Way the largest charity to accept bitcoin.

PayPal Accepts Bitcoin

Braintree, a subsidiary of eBay that processes credit card payments, announced at TechCrunch Disrupt last week that they have integrated bitcoin payments. Merchants who use Braintree’s v.zero SDK will be able to accept bitcoin in the coming months via Coinbase. PayPal, also a subsidiary of eBay, released a video on youtube stating that users would be able to “spend bitcoin with a tap”. EBay and its subsidiaries have been hinting that they have been working at this, but the video provides confirmation.

IBM And Samsung Will Utilize Blockchain Technology For The Internet of Things

IBM’s Paul Brody told GIGAOM that IBM and Samsung are working together to build a new technology called Adept. Adept would combine blockchain technology, BitTorrent, and a secure messaging protocol called telehash. Adept is not an official IBM product, but Brody said he hopes it will be ready for the Consumer Electronics Show (CES) in January, and that it solves some economic and technical issues associated with the Internet of Things.

Apple Announces ‘Apple Pay’ Mobile Credit Card Partnership

Last week Apple introduced Apple Pay “Your Wallet Without The Wallet”. Apple Pay utilizes the iPhone 6 and iPhone 6 Plus’ near field communication (NFC) technology for contactless payments. Apple Pay offers more anonymity and security than using your credit card because each purchase uses a unique transaction-specific security code and all your information is stored on a separate encrypted chip called the Secure Element. Apple also says that it does not save any of your transaction information.

While Apple has decided to play it safe and only partner with established and regulated credit card companies, bitcoin debit cards, such as Xapo, might be able to be used with Apple Pay. Apple Pay is targeted for mainstream consumers and is a step forward with transitioning consumers to mobile wallets.

Coinbase Expands Services Into 13 More Countries

Coinbase the online provider for bitcoin services such as buying, selling, storing and merchant processing, has expanded into select European Countries. The countries include Italy, Spain, France, Belgium, the Netherlands, Austria, Cyprus, Finland, Greece, Latvia, Malta, Portugal, and Slovakia. The expansion is part of an open beta, which means customers will be limited to 500 euros buy and sell limits per day. Coinbase believes this will help accelerate the 1.6 million customers and 36,000 merchants who are already signed up to use their services.

Venture Capitalist Peter Thiel Hosts AMA

Peter Thiel, co-founder of PayPal and famed Venture Capitalist investor hosted a Reddit “Ask Me Anything.” When asked if he thought Bitcoin will replace the current financial system he stated, that PayPal’s original goal was to create a “new world currency” and that “ Bitcoin seems to have created a new currency (at least on the level of speculation)”. However, “I will become more bullish on Bitcoin when I see the payment volume of Bitcoin really increase.”

While Thiel expressed dissatisfaction with the current volume of bitcoin transactions, his own Venture Capital investments include bitcoin companies such as BitPay.

CNN Money Contributor Publishes Book on Bitcoin

CNN Money columnist Jose Pagliery published a book on Bitcoin, called Bitcoin and the Future of Money. The book covers the creation of Bitcoin, how Bitcoin operates, and the impact of Bitcoin as a technology. Jose Pagliery also includes perspectives from Ron Paul, regulators, and setbacks the technology has faced, including the online bazaar, Silk Road that sold illegal products in bitcoin. The book is available for purchase on Triumphbooks.com in US dollars and bitcoin.

Gem Announces New Bitcoin API For Better Bitcoin App Development

Gem, a Bitcoin startup, announced a new API for Bitcoin applications developers to make it easier to encrypt and backup user’s Bitcoins. The API will utilize multisignature technology, and adds another layer of security for safekeeping one’s Bitcoins. Unlike services similar to Coinbase, Gem does not store your Bitcoin, rather it offers the technology to encrypt your own Bitcoin wallet. Developers interested in developing a Bitcoin app need to be well versed in cryptography, and using Gem’s API alleviates that need by providing a more secure platform for making apps. Gem has raised $2 million in startup funding, and is currently in the beta stage of development.

Tweet of the Week:

Our Tweet of the week comes from Nic Cary, CEO of Blockchain, discussing Apple Pay.

@[email protected]@[email protected] anyone using credit cards to build the financial future will enjoy the same fate as Blockbuster and Kodak

— Nic Cary (@niccary) September 9, 2014

Quote of the Week:

“I’m really proud to be able to say that we’re going to work with Samsung to have a prototype physical network based on this technology — ready (we hope) in time for CES in January.”

IBM’s Paul Broady discussing IBM’s new blockchain based product they’re building with Samsung. h/t: TBI

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

This week Xapo and Circle formed an alliance to challenge the New York Department of Financial Services BitLicense regulations, Sweden might get a bitcoin political party (if it can garner 1,500 signatures), Goldman Sachs is upping their salaries in attempt to retain young employees that are leaving for tech start-ups, and New York University and Duke University now offer courses on digital currencies.

Click on the headlines below for links to the full stories.

 Xapo Joins Circle’s Chorus Against NY’s BitLicense Proposal

Xapo recently posted on their blog that they support Circle’s statements regarding DFS’ proposed BitLicense regulations. Xapo and Circle have now stated that they “will have no choice but to block New York customers from accessing services,” sending a strong message to New York regulators that their proposed regulations will drive the digital economy out of the state.

Circle and Xapo are two of the most well-funded companies in Bitcoin, and are committed to regulatory compliance. Both these companies have said BitLicense would be impossible to comply with.

Google Analyst Publishes Report On How To Regulate Bitcoin

Since the NY Department of Financial Services introduced its BitLicense proposal, the Bitcoin community has been discussing what appropriate regulation looks like for this nascent technology. Andy Yee, a policy analyst for Google, recently published “a conceptual framework for regulating bitcoin.” The article was published at Internet Policy Review and Mr. Yee made the statement that he was writing as an individual and not as a spokesperson for Google.

Yee states that “intermediaries in the information layer are appropriate targets of regulation”, as opposed to users or the protocol itself. These intermediaries could include exchanges, wallet services, and payment processors.

However, Evan Faggart of Coin Brief says Yee’s “pro-government, anti-free market stance on Bitcoin regualation” is “misguided”.

British Chancellor To Outline Bitcoin Proposals in 2015 Budget

A representative from Her Majesty’s Treasury (the United Kingdom government department overseeing public finance) told cryptocoins news that the department will publish a Bitcoin study that outlines proposals for the 2015 budget. Chancellor George Osborn, the overseer of HM’s Treasury, is a public supporter of Bitcoin, personally owns bitcoins and declared “we can make London the Fin Tech capital of the world.” London has the majority of Bitcoin businesses in Europe, and recently received more Venture Capital investments than respective American companies in Europe. Consumers have complained about British Banks closing the accounts of Bitcoin businesses, and while the Treasury has not commented on these incidents, it is believed that this will be addressed in the 2015 budget proposal.

Sweden Aims To Start Bitcoin Political Party

A select faction in Sweden is organizing the first Bitcoin political party entitled, bitcoinpartiet. The group is seeking 1,500 signatures to be registered as a political party. The goals of the party are to promote Bitcoin and prevent the government from stifling innovation of regulatory compliant companies. The party wants Bitcoiners to have a voice at the polls to begin to level the playing field with the very powerful traditional banking system. Bitcoinpartiet believes that bitcoin adoption could bring transparency to government spending, especially to the military industrial complex, and bring access to financial services to the un and under-banked populations.

Charlie Shrem Pleads Guilty, Avoids More Serious Charges

BitInstant CEO, Charlie Shrem, on Friday plead guilty to aiding and abetting an unlicensed money transmitter business. As part of the plea bargain, Shrem will hand over nearly $1 million USD to the DOJ. Shrem’s partner in crime, Robert Faiella, pled guilty to operating an unlicensed money transmitter business that helped Silk Road users exchange cash for Bitcoin. The two men could each face up to five years in jail and both will be sentenced on January 20, 2015.  Shrem was initially charged with violation of the Patriot Act and was facing up to 30 years in prison.

NY and Duke University Offer Bitcoin Classes

This school year, two top-tier universities will add cryptocurrency classes to their rosters. New York University is offering The Law and Business of Bitcoin and Other Cryptocurrencies, which starts in the fall.  Starting in the spring, Duke University will offer Innovation, Disruption and Cryptoventures.

America’s Best and Brightest Moving from Wall Street to Bitcoin

International Business Times says millennials would rather work in technology than on Wall Street. IBT found that millennials are attracted to technology startups because they have better working conditions, citing the Bank of America incident where an intern died of a seizure after working 3 straight days. Kevin Roose, a famed author on Wall Street culture notes that even if high-achieving students go to work on Wall Street, they often leave after a couple of years for a tech company. Financial companies such as Goldman Sachs, Bank of America, JPMorgan-Chase, and Citigroup all plan on increasing salaries in order to recruit more of these driven millennials.

Swedish Bitcoin Miner Maker Raise $14 Million In Series A

Swedish bitcoin miner manufacturer, KnCMiner, has raised $14 million in Series A funding. Up until now, the manufacturer has been totally self-funded, but with new plans of developing faster ASIC chips and expanding into hosted mining services, additional capital is needed. KnCMiner plans on having a Series B round next year, and hopes to rake in $70 million in funding.

High Volume Traders Look To Brokers For Bitcoin

Many high volume Bitcoin traders are beginning to use brokers for their Bitcoin transactions. This sort of brokerage trading is referred to by some as over-the-counter (OTC) trading.  Brokers act as a trusted third party intermediary.  Circumventing exchanges could reduce price volatility coming from high volume trading on exchanges. Consumers like the security and privacy that comes with brokers, and believe that they can develop greater trust with an OTC trader than a Bitcoin exchange. The emergence of “bitcoin brokers” is a sign of financial sophistication that could help build the bridge to institutional investors.

BitFury Utilizes BitGo Enterprise For Bitcoin Security

The BitFury Group, bitcoin infrastructure provider and bitcoin transaction processing company, has elected to use BitGo Enterprise for its treasury management solutions. BitGo is a pioneer of multi-signature wallet technology and a leader in providing their bitcoin security platform. BitGo’s platform enables companies to utilize multi-signature technology and hierarchical deterministic wallets, which provides multiple layers of uses and ease of use.

Alternet Systems Inc Enables Bitcoin For Global Commerce

Miami based Alternet Systems, Inc, a Business to Business (B2B) facilitator for digital currency and mobile commerce services, announced a partnership with BitPay to launch its worldwide payment processing business. Alternet Payment Solutions plans to facilitate B2B transactions through Bitcoin and allow their customers to settle in their local currency. “Our strategic agreement with BitPay will allow us to initiate our sales process with several potential clients in Latin America and the Asia-Pacific region,” said Alternet CEO Henryk Dabrowski.

World’s 4th Largest Country Now Better Able To Buy Bitcoin

Indonesian Bitcoin exchange, Bitcoin.co.id, just announced a partnership with Indonesia’s largest convenience store chain, Indomaret. Indonesian Bitcoin users can now go to any of 10,000 Indomaret stores to add Indonesian Rupiah to their Bitcoin.co.id exchange account as easily as they pay other bills. As the world’s 4th largest country by population, Indonesia is currently catching up to countries like China and the United States in terms of Bitcoin adoption.

Picture of the Week

Our picture of the week comes from Dan Elitzer who used bitcoin to purchase this hat at MIT COOP, MIT’s bookstore that started accepting bitcoin payment this week via BitPay.

Tweet of the Week

Our tweet of the week comes from Charlie Shrem who entered a plea deal with the US Department of Justice, costing him $950,000, but shaved at least 25 years off his prison sentence.

 

Happy to be moving forward Exclusive: Bitcoin promoter to plead guilty to unlicensed money transmission http://t.co/zcZhjQtqZM#Bitcoin

— Charlie Shrem (@CharlieShrem) August 29, 2014

 

Quote of the Week

“It [bitcoin] is probably the best form of money we’ve ever seen.”

Our quote of the week comes from Wences Casares, Xapo CEO, in a youtube video titled “Why Bitcoin is Better Than Gold” where he outlines how bitcoin is a better store of value and transfer of payments.

The Chamber of Digital Commerce launches a Political Action Committee, Coinapult announces they are going to give every resident of Dominica bitcoin on pi day 2015, and every Member office of the US House of Representatives has been given educational material on Bitcoin. These are just a few of the not-so-boring events in Bitcoin last week.

 Government Related Initiatives 

 Bitcoin Education Day Visits 435 Congressional Offices

The Chamber of Digital Commerce hosted the first ever Bitcoin Education Day on Capitol Hill Friday.  Over 32 Bitcoin professionals from 12 states flew in to Washington, DC and briefed over 70 Congressional legislative aides, while introducing themselves to the remaining 365 offices.  Bitcoin factsheets were delivered to the office of every Member of the US House of Representatives. According to Rep. Stockman, the Member sponsor,  “Perianne Boring and the Chamber of Digital Commerce have staged a breakthrough event, taking Washington’s grasp of Bitcoin up to a much higher level.”

North Carolina Commission Of Banks (NCCOB) Clarifies How Virtual Currency Is Regulated In NC

In contrast to New York’s proposed BitLicense regulations, which would require virtual currency businesses to apply for a BitLicense, NCCOB folds virtual currency businesses into the existing North Carolina Money Transmitters Act.  According to the NCCOB, any business or individual that receives or holds virtual currency for transmission to a third party should apply for a North Carolina money transmitter license. Questions among the industry remain, including what constitutes a “virtual currency business?”

David Hedqvist Takes On EU Court Of Justice In VAT Tax Case

David Hedqvist, a long time Swedish Bitcoiner, has reached an important milestone in his EU case that will determine whether all EU Bitcoin exchanges, not just those in Sweden, owe VAT taxes. Last week, Hedqvist reached out to the Bitcoin community to raise funds for the upcoming legal proceedings with the EU Court of Justice. This week, Hedqvist announced that an anonymous donor has provided all the funds necessary for the next step in the trial.  He has now hired Mannheimer Swartling, a reputable Swedish law firm, to handle the upcoming submission.

New Poll Finds 65 Percent Of People Believe BitLicense Is A Total Failure

(no summary necessary – click on link above for the statistics)

Chamber of Digital Commerce Launches Political Action Committee

In a move that signals full commitment to bringing the economic and social benefits of digital currencies to the attention of lawmakers, the Chamber of Digital Commerce announced the formation of a Political Action Committee. “Creating a PAC is an important next step for the Chamber, as a crucial way to contribute to, and participate in, the political process,” said Perianne Boring, president of the Chamber.

 

Industry Initiatives 

Domnica To Become “The First Bitcoin Nation” In “Bit Drop” Project

The Caribbean island, Dominica has been chosen for the “Bit Drop.” Partnering with Coinapult, each of the 70,000+ residents will receive at least $10 worth of bitcoin on March 14, 2015 (pi day) via SMS messaging.  The “Bit Drop” project has support from Dominica’s government, which is currently helping educate the population about bitcoin. This experiment will serve as an important use case to expedite bitcoin adoption. The Bit Drop will be a Bitcoin Island Party for the entire nation of Dominica and anyone is invite to attend.

Coinbase Announces Hot Wallets Are Insured

Coinbase, the hosted bitcoin wallet and payment processor, announced that its hot wallet has been insured for almost a year. The insurance provided by Aon, an international leading insurance broker, covers losses that stem from data breaches, hackers, accidental losses and employee theft. However, hacked personal information is not necessarily covered under the insurance policy. Coinbase, did not clarify if their cold wallet was insured; however, their cold wallet is less vulnerable to these types of risks.

SFOX, The “E-Trade” Of Bitcoin Launches

San Francisco Open Exchange (SFOX), is a new trading platform where people can “buy, sell and invest in bitcoin exchanges kind of like an investor buys and sells stock on E-Trade,” according to TechCrunch. SFOX operates like a trading platform that finds the best price via a number of exchanges. SFOX does not directly buy or sell bitcoins, rather they facilitate trading through their platform. SFOX offers algorithmic trading, stop limits and other standard trading features that one might find in an online stock trading platform like E-Trade. SFOX is backed in Y-Combinator, a seed funder for start-ups that also invested in Reddit, dropbox, Scribd, among others.

BitPay Partners With E-Commerce Platform, Demandware

BitPay, bitcoin payment processor, has become a partner for Demandware, which offers a cloud-based ecommerce solution for higher-end clients. Some of Demandware’s clients include Adidas, Converse, Callaway and Columbia; however, these merchants may choose to accept bitcoin or not. In addition, BitPay released a plugin for Spree’s ecommerce platform their 45,000 merchants to accept bitcoin.

Xapo Updates Debit Card Features

Xapo, the provider of bitcoin debit cards, introduced Xapo Deposit that allows users to wire transfer USD or Euros to their account to acquire bitcoin. The funds are converted to bitcoin and placed directly in users accounts. This update from Xapo enables its users to acquire, store and transact with bitcoins all in one location.

Spanish Bank Conducts Bitcoin Research

One of the largest banks in the world, the Santander Group has announced they are conducting a new study on Bitcoin’s impact on traditional banking systems. The banking giant is looking for experts in the fields of data analysis, banking, academia, as well as Bitcoin enthusiasts. The full report will be released in the latter part of September. Santander Group operates on five continents, employs over 180,000 people, and its reported revenue was €43bn. Santander Group now joins a growing list of financial institutions including the National Australia Bank, ING, and the World Bank, that seek to understand Bitcoin’s potential impact.

North Carolina Conference Calls For More Efficient Bitcoin Algorithm

A recent Bitcoin conference in North Carolina agreed that the need for a more efficient network encrypting system is the most pressing issue facing Bitcoin today. The current system requires that miners, who secure the network with processing power, face large costs with electricity, and hardware, with little profit leftover. Miners therefore have to sell their Bitcoins for traditional currency to pay for expenses. Using a more efficient system such as Delegated Proof of Stake, would allow for more mining efficiency, and keep more Bitcoins in the ecosystem. One alternative coin, BitsharesX, uses this new algorithm, and its market capitalization has spiked to $100 million.

Bitcoin Privacy Initiatives Emerge In Response To Regulation

Concerns about government surveillance and Bitcoin regulation, such as BitLicense has sparked new initiatives to preserve Bitcoin anonymity features. The main method to protect Bitcoin anonymity is to use a process called, “coin mixing,” in which Bitcoins are sent to multiple intermediary wallets, and then to the destination Bitcoin wallet, obscuring the sender and the recipient of the bitcoins. Darkwallet, is a program that that runs on Google Chrome’s browser, or Mozilla Firefox’s, without relying on a third party to operate Bitcoin transactions. Bitcoin Fog is another business that offers the ability to “mix bitcoins,” but through a third party.

Hal Finney, Recipient Of First Bitcoin Transaction, Dies Of ALS

The passing of Hal Finney, early Bitcoin developer, and the first man to receive a bitcoin transaction, has sparked a movement to honor the man by starting the Hal Finney Bitcoin Fund. The Fund will allow the Bitcoin community to vote and decide which organizations will receive funding for ALS research.​ Finney, hoped that one day technology would advance enough to cure his diseasse and had his body cryonically frozen upon his death.

Photo of the Week

Our photo of the week is from the participants of Bitcoin Education Day on Capitol Hill.

Quote of the Week

 “The improvement of understanding is for two ends: first, our own increase of knowledge; secondly, to enable us to deliver that knowledge to others.” – John Locke

Our quote of the week is from John Locke, one of the great English philosophers from the Enlightenment period who was born on August 29, 1632. This past Friday, August 29, 2014 members of the Bitcoin community and members from the Chamber of Digital Commerce shared their knowledge of Bitcoin with representatives of the United States Congress.

Tweet of the Week

Our Big News! First to receive IRS 501c3! Founding Donors Campaign begins w/ @BitPay @xapo @Libra_Tax @rogerkver http://t.co/2ZiWvNbGjz)

— BitGive Foundation (@BitGiveOrg) August 25, 2014

Monday, August 25th, the BitGive Foundation announced that they received approval to be a tax-exempt charity from the Internal Revenue Service (501c3). This landmark announcement enables donors to receive tax deductions for their donations and gives more legitimacy to Bitcoin charities.