BitcoinAll comment: Jerry Brito, director of the Coin Center, who called for the promotion and use of Bitcoin and other cryptocurrencies, said Bitcoin still has about five strong years. Coin Ce. Join the conversation!
Coin Center podcast interview on the legal/regulatory/compliance aspects of cryptocurrencies
Coin Center is a nonprofit US thinktank which advocates for noncommercial, permissionless, decentralized blockchain projects. Which, of course, Monero is one. Recently Jerry Brito (Executive Director) and Peter Van Valkenburgh (Research Director) gave an interview on the "What Bitcoin Did" podcast (links below.) There was a lot of solid, basic information conveyed, and if more Moneristas could absorb what's covered in this interview, it would raise the level of community discourse on legally related discussions. I would suggest checking out the whole podcast, but below are highlights, with YouTube links to specific points in the the interview. The introduction includes an explanation of why it's unlikely that the US legal framework will "single out" any particular cryptocurrency and why the First Amendment strongly supports the deregulation of cryptocurrency protocols. In the main section of the interview, Mr. Brito and Mr. Van Valkenburgh outline and discuss 4 broad categories of law which impact cryptocurrency projects and their users.
The only downside of this interview is the host's sycophantic parroting of Bitcoin maximalist positions in order to proclaim his social conformity to that segment of his audience. Everything that the Coin Center guys say, though, is well worth a listen.
SegWit would make it HARDER FOR YOU TO PROVE YOU OWN YOUR BITCOINS. SegWit deletes the "chain of (cryptographic) signatures" - like MERS (Mortgage Electronic Registration Systems) deleted the "chain of (legal) title" for Mortgage-Backed Securities (MBS) in the foreclosure fraud / robo-signing fiasco
SegWit is a "clever innovation" brought to you by clueless / corrupt AXA-owned Blockstream devs;
MERS is a "clever innovation" brought to you by reckless / corrupt Wall Street bankers;
SegWit and MERS both work by simply deleting crucial "ownership data" for transactions.
Of course, the "experts" (on Wall Street, and at AXA-owned Blockstream) present MERS and SegWit as "innovations" - as a way to "optimize" and "streamline" vast chains of transactions reflecting ownership and transfer of valuable items (ie, real-estate mortgages, and bitcoins). But, unfortunately, the "brilliant bat-shit insane approach" devised by the "geniuses" behind MERS and SegWit to do this is to simply delete the data which proved ownership and transfer of these items - information which is essential for legal purposes (in the case of mortgages), or security purposes (in the case of bitcoins).
SegWit allows deleting the "chain of (cryptographic) signatures" for bitcoins - ie, SegWit supports deleting the cryptographic data specifying "who transmitted what bitcoins to whom" (as originally specified in Satoshi's whitepaper defining Bitcoin);
MERS (Mortgage Electronic Registration Systems) allowed deleting the "chain of (legal) title" for real-estate mortgages - ie, MERS supported deleting the legal "notes" specifying "who transmitted what mortgages to whom" (as previously tracked by banks / mortgage lenders / originators / notaries / land registries / "cadasters", etc.)
So, the most pernicious aspect of SegWit may be that it encourages deleting all of Bitcoin's cryptographic security data - destroying the "chain of signatures" which (according to the white paper) are what define what a "bitcoin" actually is. Wow, deleting signatures with SegWit sounds bad. Can I avoid SegWit? Yes you can. To guarantee the long-term cryptographic, legal and financial security of your bitcoins:
You should avoid sending / receiving / holding Bitcoins using the dangerous, new "SegWit" addresses. (As far as I understand, "SegWit" bitcoin addresses all start with a "3".)
You should just use safe, "normal" Bitcoin addresses - and avoid using unsafe "SegWit" addresses. (If I understand correctly, all "normal" Bitcoin addresses still start with a "1", while "SegWit" addresses always start with a "3".)
You can also use Bitcoin implementations which encourage using "normal" Bitcoin addresses. (As far as I understand, implementations such as Bitcoin ABC, Bitcoin Unlimited, Bitcoin Classic are being deployed mainly to support "normal", "non-SegWit" Bitcoin addresses - as well as market-based (bigger) blocksizes and (lower) fees.)
You can avoid Bitcoin implementations which require SegWit. (As far as I understand, SegWit2x, UASF/BIP148 are being deployed mainly to support "SegWit" Bitcoin addresses - as well as centrally-planned (smaller) blocksizes and (higher) fees).
MERS = "The dog ate your mortgage's chain of title". SegWit = "The dog ate your bitcoin's chain of signatures."
By deleting / losing the "chain of title" for mortgages stored in the MERS database (in the name of "innovation" and "efficiency" and "optimization" being pushed by "clever" bankers on Wall Street), MERS caused a legal and financial catastrophe for mortgages - by making it impossible to (legally) prove who owns which properties.
By deleting / losing the "chain of signatures" for Bitcoins stored in SegWit addresses (in the name of "innovation" and "efficiency" and "optimization" being pushed by "clever" devs at AXA-owned Blockstream), SegWit could end up causing a financial (and possibly also legal) catastrophe for Bitcoin - by making it impossible (or at least more complicated in many cases) to (cryptographically) prove who owns which bitcoins.
Wall Street-backed MERS = AXA-backed SegWit It is probably no coincidence that:
Clueless, corrupt bankers from Wall Street used MERS to recklessly delete the "chain of (legal) title" for people's mortgages;
And now clueless, corrupt devs from AXA-owned Blockstream want to recklessly use SegWit to delete the "chain of (cryptographic) signatures" for people's bitcoins.
by supporting the most ignorant developers and "leaders" (lying Blockstream CTO Greg Maxwell and CEO Adam Back, drooling authoritarian idiot Luke-Jr, vandal Peter Todd, etc);
by supporting a massive campaign of propaganda, censorship, and lies (on forums like r\bitcoin and sites like bitcointalk.org - both controlled by the corrupt censor u/Theymos) to try to force SegWit on the Bitcoin community.
Do any Core / Blockstream devs and supporters know about MERS - and recognize its dangerous parallels with SegWit? It would be interesting to hear from some of the "prominent" Core / Blockstream devs and supporters listed below to find out if they are aware of the dangerous similarities between SegWit and MERS:
Luke-Jr u/luke-jr - co-founder of and occasional contractor for Blockstream, in charge of Core's "BIP" numbering process, known for his [delusions] and authoritarianism - and for the messy SegWit-as-a-soft-fork kludge - now leading the brainwashed lemmings and sybils of r\bitcoin off the cliff, with his doomed UASF/BIP148;
Core / Blockstream devs might not know about MERS - but AXAdefinitely does While it is likely that most or all Core / Blockstream devs do not know about the MERS fiasco... ...it is 100% certain that people at AXA (the main owners of Blockstream) do know about MERS. This is because the global financial crisis which started in 2008 was caused by:
CDOs - collateralized debt obligations
MBSs - mortgage-backed securities
MERS - the company / database Mortgage Electronic Registration Systems which "lost" (deleted) millions of people's mortgage notes - leading to "clouded titles" which made possible the wave of foreclosure fraud and robo-signing, which eventually cost the "clever" banks tens of billions of dollars in losses.
Loans originated with MERS as the original mortgagee purport to separate the borrower’s promissory note, which is made payable to the originating lender, from the borrower’s conveyance of a mortgage, which purportedly is granted to MERS. If this separation is legally incorrect - as every state supreme court looking at the issue has agreed - then the security agreements do not name an actual mortgagee or beneficiary. The mortgage industry, however, has premised its proxy recording strategy on this separation, despite the U.S. Supreme Court’s holding that “the note and mortgage are inseparable.” [Compare with the language from Satoshi's whitepaper: "We define an electronic coin as a chain of digital signatures."] If today’s courts take the Carpenter decision at its word, then what do we make of a document purporting to create a mortgage entirely independent of an obligation to pay? If the Supreme Court is right that a “mortgage can have no separate existence” from a promissory note, then a security agreement that purports to grant a mortgage independent of the promissory note attempts to convey something that cannot exist. [...] Many courts have held that a document attempting to convey an interest in realty fails to convey that interest if the document does not name an eligible grantee. Courts around the country have long held that “there must be, in every grant, a grantor, a grantee and a thing granted, and a deed wanting in either essential is absolutely void.”
The parallels between MERS and SegWit are obvious and inescapable.
MERS separated (and eventually deleted) the legal information regarding the "conveyance" (transfer) of ownership of "realty" (real estate)
SegWit segregates (and allows eventually deleting) the cryptographic information regarding the sending and receiving of bitcoins.
Note that I am not arguing here that SegWit could be vulnerable to attacks from a strictly legal perspective. (Although that may be possible to.) I am simply arguing that SegWit, because it encourages deleting the (cryptographic) signature data which defines "bitcoins", could eventually be vulnerable to attacks from a cryptographic perspective. But I heard that SegWit is safe and tested! Yeah, we've heard a lot of lies from Blockstream, for years - and meanwhile, they've only succeeded in destroying Bitcoin's market cap, due to unnecessarily high fees and unnecessarily slow transactions. Now, in response to those legal-based criticisms of SegWit in the article from nChain, several so-called "Bitcoin legal experts" have tried to rebut that those arguments from nChain were somehow "flawed". But if you read the rebuttals of these "Bitcoin legal experts", they sound a lot like the clueless "experts" who were cheerleading MERS for its "efficiency" - and who ended up costing tens billions of dollars in losses when the "chain of title" for mortgages held in the MERS database became "clouded" after all the crucial "ownership data" got deleted in the name of "efficiency" and "optimization". In their attempt to rebut the article by nChain, these so-called "Bitcoin legal experts" use soothing language like "optimization" and "pragmatic" to try to lull you into believing that deleting the "chain of (cryptographic) signatures" for your bitcoins will be just as safe as deleting the "chain of (legal) notes" for mortgages: http://www.coindesk.com/bitcoin-legal-experts-nchain-segwit-criticisms-flawed/ The (unsigned!) article on CoinDesk attempting to rebut Nguyen's article on nChain starts by stating:
Nguyen's criticisms fly in the face of what has emerged as broad support for the network optimization, which has been largely embraced by the network's developers, miners and startups as a pragmatic step forward.
Then it goes on to quote "Bitcoin legal experts" who claim that using SegWit to delete Bitcoin's cryptographic signatures will be just fine:
Marco Santori, a fintech lawyer who leads the blockchain tech team at Cooley LLP, for example, took issue with what he argued was the confused framing of the allegation. Santori told CoinDesk:
"It took the concept of what is a legal contract, and took the position that if you have a blockchain signature it has something to do with a legal contract."
Stephen Palley, counsel at Washington, DC, law firm Anderson Kill, remarked similarly that the argument perhaps put too much weight on the idea that the "signatures" involved in executing transactions on the bitcoin blockchain were or should be equivalent to signatures used in digital documents.
"It elides the distinction between signature and witness data and a digital signature, and they're two different things," Palley said.
"There are other ways to cryptographically prove a transaction is correctly signed other than having a full node," said BitGo engineer Jameson Lopp. "The assumption that if a transaction is in the blockchain, it's probably valid, is a fairly good guarantee." Legal experts asserted that, because of this design, it's possible to prove that the transaction occurred between parties, even if those involved did not store signatures. For this reason, Coin Center director Jerry Brito argued that nChain is overstating the issues that would arise from the absence of this data. "If you have one-time proof that you have the bitcoin, if you don't have it and I have it, logically it was signed over to me. As long as somebody in the world keeps the signature data and it's accessible, it's fine," he said.
There are several things you can notice here:
These so-called "Bitcoin legal experts" are downplaying the importance of signatures in Bitcoin - just like the "experts" behind MERS downplayed the importance of "notes" for mortgages.
Satoshi said that a bitcoin is a "chain of digital signatures" - but these "Bitcoin legal experts" are now blithely asserting that we can simply throw the "chain of digital signatures" in the trash - and we can be "fairly" certain that everything will "probably" be ok.
The "MERS = SegWit" argument which I'm making is not based on interpreting Bitcoin signatures in any legal sense (although some arguments could be made along those lines).
Instead, I'm just arguing that any "ownership database" which deletes its "ownership data" (whether it's MERS or SegWit) is doomed to end in disaster - whether that segregated-and-eventually-deleted "ownership data" is based on law (with MERS), or cryptography (with SegWit).
Who's right - Satoshi or the new "Bitcoin experts"? You can make up your own mind. Personally, I will never send / receive / store large sums of money using any "SegWit" bitcoin addresses. This, is not because of any legal considerations - but simply because I want the full security of "the chain of (cryptographic) signatures" - which, according to the whitepaper, is the very definition of what a bitcoin "is". Here are the words of Satoshi, from the whitepaper, regarding the "chain of digital signatures": https://www.bitcoin.com/bitcoin.pdf
We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership.
Does that "chain of digital signatures" sound like something you'd want to throw in the trash??
The "clever devs" from AXA-owned Blockstream (and a handful of so-called "Bitcoin legal experts) say "Trust us, it is safe to delete the chain of signatures proving ownership and transfer of bitcoins". They're pushing "SegWit" - the most radical change in the history of Bitcoin. As I have repeatedly discussed, SegWit weakens Bitcoin's security model.
The people who support Satoshi's original Bitcoin (and clients which continue to implement it: Bitcoin ABC, Bitcoin Unlimited, Bitcoin, Bitcoin Classic - all supporting "Bitcoin Cash" - ie "Bitcoin" without SegWit) say "Trust no one. You should never delete the chain of signatures proving ownership and transfer of your bitcoins."
We define an electronic coin as a chain of digital signatures.
So, according to Satoshi, a "chain of digital signatures" is the very definition of what a bitcoin is.
Meanwhile according to some ignorant / corrupt devs from AXA-owned Blockstream (and a handful of "Bitcoin legal experts") now suddenly it's "probably" "fairly" safe to just throw Satoshi's "chain of digital signatures" in the trash - all in the name of "innovation" and "efficiency" and "optimization" - because they're so very clever.
Who do you think is right? Finally, here's another blatant lie from SegWit supporters (and small-block supporters) Let's consider this other important quote from Satoshi's whitepaper above:
A payee can verify the signatures to verify the chain of ownership.
Remember, this is what "small blockers" have always been insisting for years. They've constantly been saying that "blocks need to be 1 MB!!1 Waah!1!" - even though several years ago the Cornell study showed that blocks could already be 4 MB, with existing hardware and bandwidth. But small-blockers have always insisted that everyone should store the entire blockchain - so they can verify their own transactions. But hey, wait a minute! Now they turn around and try to get you to use SegWit - which allows deleting the very data which insisted that you should download and save locally to verify your own transactions! So, once again, this exposes the so-called "arguments" of small-blocks supporters as being fake arguments and lies:
On the one hand, they (falsely) claim that small blocks are necessary in order for everyone to be run "full nodes" because (they claim) that's the only way people can personally verify all their own transactions. By the way, there are already several errors here with what they're saying:
Actually "full nodes" is a misnomer (Blockstream propaganda). The correct terminology is "full wallets", because only miners are actually "nodes".
Actually 1 MB "max blocksize" is not necessary for this. The Cornell study showed that we could easily be using 4 MB or 8 MB blocks by now - since, as everyone knows, the average size of most web pages is already over 2 MB, and everyone routinely downloads 2 MB web pages in a matter of seconds, so in 10 minutes you could download - and upload - a lot more than just 2 MB. But whatever.
On the other hand, they support SegWit - and the purpose of SegWit is to allow people to delete the "signature data".
This conflicts with their argument the everyone should personally verify all their own transactions. For example, above, Coin Center director Jerry Brito was saying: "As long as somebody in the world keeps the signature data and it's accessible, it's fine."
So which is it? For years, the "small blockers" told us we needed to all be able to personally verify everything on our own node. And now SegWit supporters are telling us: "Naah - you can just rely on someone else's node."
Plus, while the transactions are still being sent around on the wire, the "signature data" is still there - it's just "segregated" - so you're not getting any savings on bandwidth anyways - you'd only get the savings if you delete the "signature data" from storage.
Storage is cheap and plentiful, it's never been the "bottleneck" in the system. Bandwidth is the main bottleneck - and SegWit doesn't help that at all, because it still transmits all the data.
Conclusion So if you're confused by all the arguments from small-blockers and SegWitters, there's a good reason: their "arguments" are total bullshit and lies. They're attempting to contradict and destroy:
Satoshi's original design of Bitcoin as a "chain of digital signatures":
"We define an electronic coin as a chain of digital signatures. Each owner transfers the coin to the next by digitally signing a hash of the previous transaction and the public key of the next owner and adding these to the end of the coin. A payee can verify the signatures to verify the chain of ownership."
Satoshi's plan for scaling Bitcoin by simply increasing the goddamn blocksize:
Satoshi Nakamoto, October 04, 2010, 07:48:40 PM "It can be phased in, like: if (blocknumber > 115000) maxblocksize = largerlimit / It can start being in versions way ahead, so by the time it reaches that block number and goes into effect, the older versions that don't have it are already obsolete."
The the notorious mortgage database MERS, pushed by clueless and corrupt Wall Street bankers, deleted the "chain of (legal) title" which had been essential to show who conveyed what mortgages to whom - leading to "clouded titles", foreclosure fraud, and robo-signing.
The notorious SegWit soft fork / kludge, pushed by clueless and corrupt AXA-owned Blockstream devs, allows deleting the "chain of (cryptographic) signatures" which is essential to show who sent how many bitcoins to whom - which could lead to a catastrophe for people who foolishly use SegWit addresses (which can be avoided: unsafe "SegWit" bitcoin addresses start with a "3" - while safe, "normal" Bitcoin addresses start with a "1").
Stay safe and protect your bitcoin investment: Avoid SegWit transactions.
[See the comments from me directly below for links to several articles on MERS, foreclosure fraud, robo-signing, "clouded title", etc.]
Let’s take a look what world press write about JPM Coin
There’s a lot of buzz around JPM Coin, both in the crypto community and in traditional finance. While some in the media call the digital coin the “XRP killer” or even the “Bitcoin dream killer”, others have remained skeptical, reminding the public that JPM Coin is not a “true” cryptocurrency. Below, we examine the arguments of both parties. So what media write about it: Non-crypto media seem most excited about the JPM Coin announcement. Bloomberg went as far as to claim that JPM Coin boosted Bitcoin’s price, allowing it to reach $4,000 on February 19th — a full 5 days after J.P. Morgan’s announcement. Ben Walsh from Barron’s claims “JPM Coin just killed the Bitcoin dream”. The Washington Examiner was more subdued, calling JPM Coin “an alternative to Bitcoin”. Forbes was not as enthusiastic, and appealed to readers to not to call the coin a cryptocurrency, for the reasons we previously explained. The crypto media did not hold back their two-cents’ worth. Scoring up Dimon’s remarks against crypto (he famously said that Bitcoin is a fraud that will blow up) CCN.com even branded JPM Coin a “fake cryptocurrency” Jerry Brito, executive director at Coin Center, shares this opinion: “I see folks referring to it as a cryptocurrency. It’s not a cryptocurrency. A cryptocurrency is one that is open and permissionless.” Bill Barhydt, CEO of cryptocurrency-based payment platform Abra, didn’t confine himself to JPM Coin criticism, and claimed that “all enterprise blockchains are nonsense, (and are) going to fail miserably”. It’s complicated to say if JPM Coin is a good idea or not. I can’t reach a consensus by my own. What do you think about it? source: https://coin360.com/blog/jpm-coin-explained
“Registering a copyright is just filing a form. The Copyright Office does not investigate the validity of the claim; they just register it. Unfortunately there is no official way to challenge a registration. If there are competing claims, the Office will just register all of them.”
According to the news release, Wright is making moves to establish himself as Bitcoin’s creator “after being dismayed to see his original Bitcoin design bastardized by protocol developer groups.” It is believed that Wright is planning to assign the copyright registrations to the Bitcoin Association. The businessman is currently the chief scientist at a startup known as nChain. The entrepreneur has been known for attracting controversy, with major crypto platforms recently beginning to boycott bitcoin sv (BSV,) the fork of bitcoin cash (BCH) which he backs.
Self-Proclaimed Satoshi Craig Wright Files US Copyright Registrations for BTC White Paper.
https://preview.redd.it/2w5i71wwwu031.png?width=740&format=png&auto=webp&s=ae7f558bbda4dfb855f6f856de5914ff2f297a02 Craig Wright has filed United States copyright registrations for the Bitcoin (BTC) white paper authored by Satoshi Nakamoto. Court documents show that the U.S. Copyright Office has registrations with Wright as the author of the white paper, as well as most of the original code used to build Bitcoin. The Australian entrepreneur has long claimed to have written the cryptocurrency blueprint under the pseudonym. A news release from May 21 claims that U.S. officials have received confirmation that Wright is indeed Satoshi Nakamoto, but the news has been met with skepticism from some crypto commentators. Jerry Brito, executive director at non-profit organization Coin Center, tweeted: “Registering a copyright is just filing a form. The Copyright Office does not investigate the validity of the claim; they just register it. Unfortunately there is no official way to challenge a registration. If there are competing claims, the Office will just register all of them.” According to the news release, Wright is making moves to establish himself as Bitcoin’s creator “after being dismayed to see his original Bitcoin design bastardized by protocol developer groups.” It is believed that Wright is planning to assign the copyright registrations to the Bitcoin Association. The businessman is currently the chief scientist at a startup known as nChain. The entrepreneur has been known for attracting controversy, with major crypto platforms recently beginning to boycott bitcoin sv (BSV,) the fork of bitcoin cash (BCH) which he backs.
Token Taxonomy Act Includes De Minimis Tax Exemption for Crypto
The recently reintroduced Token Taxonomy Act (TTA) will create a de minimis tax exemption for crypto transactions under $600, according to the executive director of Coin Center, Jerry Brito, at Consensus 2019 on May 13. The de minimis tax exemption stipulates that if a crypto owner experiences a capital gain up to $600 of crypto, then that owner is not required to report the gain to the Internal Revenue Service (IRS), the United States’ tax authority. Brito notes that this situation parallels how small gains on foreign currencies were treated prior to a de minimis proviso that was introduced in the 1990s by Congress. Before then, if someone purchased foreign currency to take a short vacation in another country, any capital gains experienced over the course of holding that currency would technically have to be reported. Brito added that one could technically be obligated to report capital gains when using cryptocurrencies to purchase simple things like a laptop, plane tickets, or even in writing a smart contract, which requires the expenditure of a small amount of ether (ETH) or other so-enabled cryptocurrencies. Legally, Brito noted, regulatory authorities could choose to require reporting these small expenditures. As previously reported by Cointelegraph, the TTA, if passed, would also exclude cryptocurrency from classification as a security. The TTA would also delimit the jurisdiction of the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC), as well as provide regulatory certainty for the compliance and enforcement of crypto statutes. Trade Bitcoin and other cryptocurrencies with up to 100x leverage. Fast execution, low fees,available only on Bitseven https://preview.redd.it/7fgfqt1kx2y21.png?width=585&format=png&auto=webp&s=37cea15c68a445ca69ba0526aea2910088581549
Battle Over Bitcoin: China Backs US Startup Coinbase And US Falls Behind In Virtual Currencies.
Indeed, virtual currencies are nothing new to the Chinese. For example, more than 100 million people on the social platform QQ have used the Q coin for more than 10 years. And after China’s state-run China Central Television, or CCTV, ran a half-hour-long documentary on bitcoins, downloads of apps for processing and “mining” bitcoins soared in the world’s second largest economy. Bitcoin, long the plaything of the Western ubernerd, now appears poised to grow substantially in China and other markets, like the euro zone, where government meddling in native currency valuations has left many distrustful of the money in their bank accounts. Americans don’t have this problem -- yet. And that may be a problem in itself. According to bitcoin proponents, if the U.S. tries to ignore the nascent currency, writing it off as a financial fad with less value than the seemingly stable dollar, Americans risk ceding to the Chinese and others control of the future of what could be the most disruptive force in monetary exchanges since the credit card. In turn, the dollar and the ability of the U.S. to navigate global currency conflicts could be seriously weakened. “Here’s the bottom line: Bitcoin has much higher popularity outside the U.S. and much higher potential outside the U.S.,” observed Andreas M. Antonopoulos of the Bitcoin Foundation. “If you go to an American and say, ‘Hey, there’s this new thing, bitcoin,’ they say, ‘Well, what’s wrong with the dollar?’ That question is different in other countries.” Bitcoins are a finite, Web-based currency created in 2009 by a group of hackers working under the nom-de-Internet Satoshi Nakamoto. Exactly 10,952,975 bitcoins are in circulation, all of which have been purchased on exchange networks or mined. The currency is mined using software that processes transactions on the bitcoin network, adding groups of transactions, called blocks, to the chain. Miners are paid about 25 bitcoins per block. That digital money can then be used to purchase a variety of goods online, from legitimate software to heroin on the infamous virtual black-market Silk Road. Bitcoin surged in value to $266 last month, thrusting the currency into the mainstream spotlight as investment poured in from sources as diverse as the hapless Brothers Winklevoss (of Facebook infamy) and Union Capital Ventures principal Fred Wilson (an early investor in Zynga, Twitter, and Kickstarter). Suddenly, everyone was talking about buying bitcoins. But the bubble burst in late April, and in the U.S. at least, bitcoin faded from the news. That was not the case in China, where Antonopoulos said downloads of bitcoin clients have eclipsed those in the U.S. Bitcoins are mined in several steps. After downloading a bitcoin client, such as Coinbase (which serves as a wallet in which to store the bits of code that constitute the digital money), miners often join pools where they share computing power to decode algorithms in which bitcoins are hidden. The concept of bitcoins and bitcoin mining is cryptic for many people, even some otherwise forward-thinking American investors. The irony is that, for now, American startups are leading the bitcoin charge, and the U.S. government was the first to issue guidance on using the currency as payment -- a seemingly tacit recognition of bitcoin’s validity as legal tender. Why China Poses A Threat Feng Li, the IDG partner who chose to fund Coinbase, said the Chinese have yearned for access to a virtual currency since the central government cracked down on the use of Q coins. Q coins were introduced in March 2002 by Tencent Holdings Ltd. (HKG:0700), the parent company of the country’s most popular instant-messaging service, QQ , and they currently average an annual transaction value of more than 1 billion yuan ($163 million). That value is growing at about 15 to 25 percent each year. Q coins, purchased with yuan, are predominantly used to buy virtual products and services in QQ and its related online games and social media. Originally, Tencent regulations prevented Q coins from being traded between users or converted back to yuan, but allowed users to trade points and purchase Q coins with their game accounts, then use the black market to convert them into cash. That caused concerns at the People’s Bank of China, China’s central bank. In January 2007, converting game points to Q coins was banned, and Tencent reiterated that Q coins constitute a product, not a currency, which seemed to satisfy the concerns. “There has already been proof with the Q coin,” Feng said of the Chinese likeliness to start using bitcoin. “It’s been very well circulated and very well adopted.” Already, shops on Taobao -- the Chinese equivalent to eBay Inc. (NASDAQ:EBAY), owned by Alibaba.com Ltd. (HKG:1688) -- accept bitcoins as payment for goods, as does the similar service, Tencent’s PaiPai.com. The Chinese are embracing bitcoins in other ways. The first bitcoin fund began to raise money in June, with the goal of raising 20 million yuan. The fund’s investment threshold is 10,000 yuan, and it will mature in four years. Q coin’s popularity isn’t the only reason bitcoin has appeal in China. As it turns out, China is the perfect place for bitcoin mining. While much of the developed world is well into the transition from personal computers to mobile devices, China’s PC market is still thriving, which provides the necessary computing power to run a successful business converting electricity into mined coins. Price caps on electricity already create wasteful use of energy in China, so running a code-crunching computer for hours on end isn’t as costly an investment as it would be in the U.S. And so-called “gold-mining” or “gold-farming” businesses already exist in China’s cybersphere. None of that will come as a surprise to any “World of Warcraft” player: Gamers in Chinese urban sweatshops are known to sit in front of glowing blue screens for hours, slaughtering players in the game for their spoils or mining gold deposits found in the sprawling milieu of Blizzard Entertainment’s international blockbuster. Those treasures are then sold to players in the game for real money. China has a heavily controlled currency, which also makes bitcoin attractive. “The more controlled the currency is, the harder the transactions are, the more friction there is in the national currency, the more appealing the coin is,” Antonopoulos said, noted that the most appealing place to use bitcoin would be a country whose economy is a veritable train wreck -- like Zimbabwe, except that the southern African nation lacks the necessary technology. “I would say China is perfect,” he said. “It’s got the penetration, it’s got the smartphones, it’s got the Internet and the people are familiar with virtual currencies. And, it’s got the not-as-appealing national currency.” Regulation In The U.S. Guidance issued in March by the U.S. Treasury Department said that companies issuing or exchanging online cash, including bitcoin, would be subject to the same scrutiny as traditional firms such as the Western Union Co. (NYSE:WU) to prevent money laundering. Less than two months later, the Department of Homeland Security proved that edict had teeth. Federal officials obtained a warrant Tuesday to seize an account tied to Mt.Gox, the Tokyo-based exchange company that handles about 80 percent of all bitcoin trades. Authorities accused Mt.Gox’s U.S. subsidiary, Mutum Sigillum LLC, of failing to register as a money-services company with the Treasury’s Financial Crimes Enforcement Network. An account held by the online-payments firm Dwolla was subsequently seized. Many feared the warrant execution could cast a chill over the bitcoin industry as a sector centered on a borderless, decentralized money came under the scrutiny of the federal government. That proved not to be the case, Coinbase’s Ehrsam said. “For bitcoin to go mainstream, or as it goes mainstream, it will be used in a higher and higher amount of transactions,” he said, adding that Coinbase is registered as a money-services firm. “There’s no way there will be all this money flowing through an unregulated system.” Chris Larsen -- the CEO of OpenCoin, a fellow San Francisco-based payment platform that processes most national currencies as well as bitcoin and its own virtual cash, Ripple -- agreed. “They definitely are regulating them, [and] we actually think that’s a really good thing for the industry,” he told IBTimes. “I thought the guidance was a good idea. One of the things the guidelines seem to make clear for the first time is that a virtual currency could be used for goods and services.” The Price Of Regulation But such regulation is a slippery slope, said Jerry Brito, a senior research fellow at the Mercatus Center at George Mason University. Perhaps it begins with measures to prevent money-laundering, he said. But what measures would the government take to prevent the untraceable currency from being used for child pornography or human trafficking? “Bitcoin has the potential to be a disruptive technology that would be beneficial to the economy, and we don’t want to kill off that potential to get at the other potential for bad stuff,” he observed. Brito, who plans to speak next month at a conference on virtual currencies organized by the National Center for Missing and Exploited Children, added: “We’re already the first country to enforce money-laundering laws against bitcoin. But the U.S. would be shooting itself in the foot if it went too far [with regulations] and either outlawed bitcoin or made the legal guidelines impossible to comply with.” Will China Step In? So far, Chinese bitcoin merchants have little to fear. For many, the CCTV segment on bitcoin seemed to be a signal from Beijing, which heavily controls the channel’s content, that the currency is worth exploring. Some of those interviewed speculated that the Communist Party wants to see bitcoin stockpiled in China, allowing the government to invest in it if, or when, the dollar is shaken from its perch as the world’s reserve currency. It remains to be seen whether -- or, more likely, when -- China will intervene in the trade of bitcoin in its own economy. But for the U.S. to experience widespread adoption of the currency, which is considered a necessary step for gaining a grasp on the bitcoin market, limited government control will have to allow the money, like the Internet that birthed it, to develop organically.
Question: Is the Coin Center protect the Small Business bitcoiners or not ?
I am a New York City small bitcoin business and used to have 150 stores processing Bitcoins until the Bitlicense came about. I decided to fight and I have been fighting for two years now. I came about this entry about the a Coin Center having a Gala and I became upset and started this twitter Hashtag : #BoycottCoinCenterGala - https://coincenter.org/entry/blockchain-s-night-out-the-coin-center-annual-dinner-is-back I feel that the Coin Center has not been advocating for the Small Business but for themselves. When Judges start dissecting bitcoin they clearly see that the law doesn't apply (Florida Case as an example.) Jerry Brito, and other from the Coin Center were part of the Bitcoin Foundation and wrote compelling letters to NYDFS, but then were never heard from again once it was enacted.
Most of the people at the Coin Center are New Yorkers like me (and some are even lawyers) so reading trough a legal brief is not too hard, even badly written. They could have supported the action, etc ..... but nothing. The bitcoin community need to hold them accountable if they don't protect Small Businesses and before I start rushing, I would like to hear from the Bitcoin community. Regards, Theo Chino @TheoBitcoin http://www.article78againstNYDFS.com
Trump bans Venezuela’s new national cryptocurrency
This is the best tl;dr I could make, original reduced by 28%. (I'm a bot)
President Donald Trump has issued an executive order to ban Venezuela's new national cryptocurrency, the petro. His order also makes reference to Venezuela's National Assembly being in opposition to the launch of the petro. In February, Venezuela launched the petro, allegedly raising $735 million, according to Maduro's tweet. Many experts have expressed doubt over the digital currency, which Maduro has proposed as a means for Venezuela to "Overcome the financial blockade," likely in reference to sanctions imposed by the US and the EU. Venezuela's actual national currency, the bolivar, suffers from quadruple-figure inflation, and one bolivar is currently worth 0.00003 USD. The executive order to ban the petro isn't that surprising, considering the US's current sanctions on Venezuela. The US Treasury warned domestic investors back in February not to touch petro in case it violated sanctions, saying "The petro digital currency would appear to be an extension of credit to the Venezuelan government" and "Could therefore expose US persons to legal risk." "While Venezuela's attempt to issue a cryptocurrency is novel, there's nothing new about the US restricting financial dealings with sanctioned countries," says think tank Coin Center executive director Jerry Brito, "Issuing a cryptocurrency is not going to help Venezuela escape sanctions."
US House Committee to Hold Virtual Currency Hearing
Has this something to do with mtgox maybe? would also explain why the bubble is building up The US House of Representatives Financial Services Committee is holding a hearing on virtual currencies this week. According to a published memorandum, the Thursday hearing is being hosted by the Terrorism and Illicit Finance Subcommittee, and is entitled "Virtual Currency: Financial Innovation and National Security Implications". Set to appear as witnesses are Jerry Brito, executive director of the nonprofit advocacy group Coin Center; Scott Dueweke, who serves as president of the Identity and Payments Association; Kathryn Haun, assistant US Attorney and Digital Currency Coordinator for the Department of Justice; Jonathan Levin, co-founder of blockchain startup Chainalysis; and Luke Wilson, vice president of business development for blockchain startup Elliptic. The committee, according to the memorandum, will focus on exploring "terrorists and illicit use of ... FinTech, the national security implications of virtual currencies such as bitcoin, and the use of 'blockchain' technologies to record transactions and uncover illicit activities". It goes on: "Witnesses will provide testimony about the exploitation of virtual currency by terrorists and transnational criminal groups, as well as provide risk assessments and policy considerations to mitigate illicit financing but not to impede the development of FinTech innovations." The hearing comes as members of Congress turn their attention toward digital currencies, primarily through the lens of terrorism financing. A House subcommittee focused on intelligence is considering a bill to study the area, and last week, a pair of influential senators introduced a bill of their own that calls for more oversight of digital currency business activities in the US.
Coin Center: US Senate's Digital Currency Bill Is 'Counterproductive'
This is the best tl;dr I could make, original reduced by 45%. (I'm a bot)
An anti-money laundering bill before the US Senate and focused in part on digital currencies "Could upset years of policy and compliance work", according to Washington, DC, advocacy group Coin Center. A new blog post penned by Coin Center executive director Jerry Brito dives into the specifics of the bill, arguing that the Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017 - introduced in late May by a group of influential senators - largely replicates rules put in place by the Financial Crimes Enforcement Network, which first issued guidance on digital currency activities in 2013 and later 2014. "Almost all of the digital currency specific language in the bill is now covered under existing money laundering law, and, if left as drafted, the proposed changes would be counterproductive to combatting money laundering." In the post, Coin Center takes aim at the addition of "Issuer, redeemer, or cashier of ... digital currency ... or any digital exchanger or tumbler of digital currency" to the definition of what constitutes a financial institution under the US Bank Secrecy Act, which was first instituted in the 1970s. According to Brito, the addition is again redundant in the context of FinCEN rules, "Making this section of S. 1241 bill redundant with current law." Coin Center also honed in on fears that digital currency holdings could be subject to declaration and seizure at the US border, with Brito noting that, at present, the bill calls for a report on how customs agents might approach this process.
20 Days Left: Best practices for submitting BitLicense comments to NYDFS
TL;DR: Everyone capable of writing articulate, cogent public comments to NYDFS should take the time to send an email to Mr. Dana Syracuse if you haven't already. Here's how and why: Over the past few weeks, I have highlighted eloquent public responses to the proposed BitLicense framework from Circle executives, the Mercatus Institute, and various individual bitcoin enthusiasts. Many other leading bitcoin companies will respond directly to the NYDFS with carefully crafted comments that highlight their specific concerns in the coming weeks. Of course, I have also contributed my own thoughts via this blog, and will continue to do so throughout the rest of the public comment period. So it might be easy for you, the individual enthusiast, or you, the casual investor, or you, the student entrepreneur, to assume that your feelings and perspectives have been or will be properly covered by the myriad other responses. In truth, it's a fair assumption that the only comments which actually rise to the top of the NYDFS pile for real consideration will be those sent by larger advocacy groups, funded virtual currency startups, institutional investors, and the law firms representing those groups. But that doesn't mean that smart, polished individual contributions are wastes of time. On the contrary, when it comes to many important subjects, such as advocacy for a safe harbor provision for startups and arguments in favor of limited regulation of open-source software, these perspectives will be invaluable. Whether they are read in their entirety initially means very little actually. However, whether you realize it or not, we're already prepping for part two of what will be a lengthy turf war: the BitLicense courtroom battles. The BitLicense lawsuits, "discovery" & "arbitrary and capricious" standards A quick conversation with any of bitcoin's top legal experts or executives will give you a clear indication that many of the BitLicense's proposals are almost guaranteed to be fought in court. As a regulator, you simply don't pare back your initial guidelines drastically, regardless of the public outcry. Maybe the NYDFS clarifies its loosest language and strips its most outlandish requirements, but the core proposals will still be an onerous and crippling overreach of power. And they will have to be challenged aggressively. There's an element of face-saving in play. Politicians and their regulatory cousins simply don't admit fault very easily. This is especially true given the time, energy and resources that this particular department has thrown at crafting these initial proposals. Lawsky and his colleagues seem likely to default to strict rules and overreach because it is easier to be tough on crime than permissive of disruptive innovation - in terms of both talking points and future political (and financial) backing on Wall Street. Thus, we need to start digging in for a prolonged battle when it comes to many of the provisions that matter most to bitcoin's future viability. The Bitcoin community needs to submit droves of comments that can later be referenced in lawsuits against the department related to its "arbitrary and capricious" prescriptions. Every well-spoken entrepreneur or $1,000 bitcoin investor should send comments which bash requirements that overreach relative to existing federal regulations of MSBs, or that restrict unsanctioned releases of open-source software of any kind, or that include non-financial applications under its broad scope. Your comments really only need three things. The first is context. Who are you? Why should your comments be taken seriously (assume by a judge, not the department)? And how will the BitLicense harm you? On the last point, it is key to focus on how the proposals will unfairly and potentially illegally harm you. You need not cover everything wrong with the BitLicense (others will do that for you), but specificity is key. The second, then, is specificity. Be direct and specific about which elements of the BitLicense are flawed in their language, scope or essence. Use specific examples and highlight precedents from other technological turf wars (the internet, VoIP, etc.), and keep it concise and powerful. Finally, the third is recommendations. It isn't enough to crap on the BitLicense's very existence. (Regulators gonna regulate.) What you need to do is highlight specific language in the proposals and suggest actual improvements or outright redactions. If you haven't yet read Jerry Brito's public comments out of the Mercatus Center, it might inform your own approach. Any public comment which is smart, devoid of rhetoric, and includes these three elements will be valuable in "discovery", the legal procedures used to gather evidence for any future lawsuits. A future plaintiff representing the interests of bitcoin should have dozens of readily available resources which hammer the department for ignoring the reasonable pushback of the broader community on the most outlandish components of the BitLicense. (These documents are easily obtained through a Freedom of Information Act, or FOIA, request.) How then should you actually submit public comments? As a community, we have just 20 more days to submit comments to the NYDFS related to the BitLicense. All of this "testimony" should be electronic and submitted to Mr. Dana Syracuse via email at [email protected]. It appears that we have until close of business on Monday, September 8 to submit comments, but Perkins Coie recommends getting all final comments in prior to midnight on Friday, September 5 just to be safe. The firm has also provided a helpful template for those of you not used to writing business emails to bureaucrats: [Your letterhead including your address and contact info] [Date] Mr. Benjamin M. Lawsky Superintendent of Financial Services New York Department of Financial Services One State Street, New York, NY 10004-1511 Mr. Dana V. Syracuse Office of General Counsel New York State Department of Financial Services One State Street, New York, NY 10004 Tel: (212) 709-1663 Email: [email protected] Re: Regulation of the Conduct of Virtual Currency Businesses – Addition of Part 200 to Title 23 NYCRR Dear Mr. Lawsky and Mr. Syracuse: [Add your comments here] Sincerely, [Your Signature] [Your Name] [Your Company Name] [Your Title] You should sign and scan and email the letter to [email protected]. The text of your cover email could be simply: Please see attached comment letter on the proposed BitLicense rules. Hope this all helps. Cheers, TBI P.S. If you'd like to refer to other high-quality public comments, check out Jerry Brito's at the Mercatus Center, Attorney Sean King's, or my own. Brito's: mercatus.org/sites/default/files/BritoDourado-NY-Virtual-Currency-comment-081414.pdf King's: http://wefivekingsblog.blogspot.com/2014/07/here-are-my-official-comments-on-new.html My own (so far): http://two-bit-idiot.tumblr.com/post/93350027099/the-bitlicense-papers-1http://two-bit-idiot.tumblr.com/post/94029914389/the-bitlicense-papers-2http://two-bit-idiot.tumblr.com/post/94458273399/the-bitlicense-papers-3
Live now: CA Assembly Banking & Finance Committee hearing which will cover Bitcoin. Stream info inside.
EDIT: This hearing has concluded. We will be uploading a recording to CoinCenter.org. The California State Assembly's Banking and Finance Committee is holding a hearing entitled "Innovation and Transformation in Payment Technology." The hearing just started at around 1:30PM PST and is scheduled to run until 4:00PM PST. The fourth and final panel, which will be later in the hearing, covers Bitcoin and is comprised of several leaders in the cryptocurrency space:
According to Coin Center: A new amended draft of California's AB 1326, a bill that would specify the state's licensing regime for digital currency businesses, was released last weekend and it's good news for us and Bitcoin advocates everywhere. Coin Center has been at the forefront of working with California lawmakers to help them better understand digital currencies and craft legislation that will encourage financial innovation in the state. Executive director Jerry Brito, who will be testifying before the California Senate later this evening, explains why the bill looks so promising. Meanwhile: http://www.coindesk.com/digital-advocacy-groups-critical-of-california-bitcoin-regulation/ I am not entirely clear why regulating an already regulated industry is "good news for us and Bitcoin advocates everywhere." Also, I thought that libertarians were actually opposed to new regulation. Did Hayek, von Mises, Rothbard, etc, get it wrong? Perhaps someone cleverer than me can explain?
I recently did a podcast on Bitcoin (with Jerry Brito from the Mercatus Center; very pro-bitcoin). I was curious if a few of you wouldn't mind listening and giving me feedback on what we may have missed? It's something I'm trying to learn about and help promote in the policy world (where I work). I'm doing another podcast in a few weeks as a follow up to this so i'd love to know what I missed! thanks http://media.aei.org/podpress_trac/web/1058/0/Banter131-BritoFULL.mp3
Jerry Brito is executive director of Coin Center, a non-profit research and advocacy center focused on the public policy issues facing cryptocurrency technologies such as Bitcoin. He has testified several times before Congress and state legislatures about cryptocurrencies, and regularly holds briefings for and consultations with policy makers. The UK plan for Bitcoin is a step in the right direction March 18, 2015. U.S. Comptroller of the Currency: Law should adapt to remain relevant March 3, 2015 ‘Age of Cryptocurrency’ is the serious introduction to Bitcoin we’ve been waiting for January 30, 2015. Coin Center brings Bitcoin to DC’s top tech policy conference January 28, 2015 Hi, I'm Jerry Brito, executive director of Coin Center, a DC-based think tank focused on the public policy issues facing cryptocurrencies. This is my personal newsletter with which you can keep up with my media output over the past week. We’re joined by Jerry Brito, Executive Director of Coin Center. Having discovered Bitcoin in 2011, Jerry was among the first lawyers to talk about crypto in the U.S. capital. In 2014, he founded Coin Center, a leading research and advocacy center focussing on cryptocurrencies. Jerry Brito is executive director of Coin Center, a non-profit research and advocacy center focused on the public policy issues facing cryptocurrency technologies such as Bitcoin. Now, steel yourself for some serious signaling and credentialism:
Coin Center Executive Director Jerry Brito on what Coin Center does to protect and foster Bitcoin innovation. Full text available here: https://coincenter.or... Federal agencies will attempt to regulate Bitcoin, according to the Mercatus Center's Jerry Brito. Given that regulation simply cannot control the new curren... youtube channel tip jar: 1FEqW7sQrxqQbVtx3TpYMKYUuLU9CUEfmo Jerry Brito Wants Proof Craig Wright Is Satoshi Executive director at @coincenter. Teach at GMU Law. In Part 8 of the Bitcoin Beginner’s Guide I talk to Peter Van Valkenburgh & Jerry Brito the Director of Research & Executive Director at Coin Center a non-profit focused on the policy issues for ... From Brookings' Beyond Bitcoin event. 1/14/2016