Monthly Archives: August 2013

Marco Santori – Bitcoin Law In The U.S., Part I

Marco Santori – Bitcoin Law In The U.S., Part I:

Marco Santori, Chairman of Bitcoin Foundation (@BTCFoundation)’s Regulatory Affairs Committee, gives a basic primer on the state of US law as it applies to digital currency entrepreneurs.  Excerpts of the post on Coindesk:

If the last few months have taught us anything, it is that there will soon exist a new and evolving body of law: The Law of Digital Currency, or, as some would prefer it: Bitcoin Law.”

”[…] ‘virtual currency’ is something of a loaded term, and bitcoin may not even be best described as a currency at all.”

“[In addition to regulators FinCEN and the SEC, the] consensus among legal professionals is that two more government agencies might soon have a hand in the market as well: the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).”

“Some have called [FinCEN’s issuance of guidance] bitcoin’s ‘watershed moment’ because of its clear, unequivocal positive message: bitcoin is not illegal. The negative consequence, though, was just as obvious: Many bitcoin businesses models are illegal.”

“In effect, the [Bank Secrecy Act (BSA)] deputizes financial institutions, requiring them to act as the government’s foot soldiers in its war on money laundering.”

 – http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know
 – http://bitcointalk.org/index.php?topic=276614.0 (Further discussion of the article)

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Fixes For Android Mobile Bitcoin Wallets Released

Fixes For Android Mobile Bitcoin Wallets Released:

Correspondent for IDG Jeremy Kirk (@Jeremy_Kirk) published a report providing an update on the security vulnerability affecting nearly all mobile Bitcoin wallet apps for Android.  Excerpts:

“Four Android Bitcoin clients — Bitcoin Wallet, Blockchain, Mycelium Bitcoin Wallet and BitcoinSpinner — have been fixed, according to an updated notice on Bitcoin.org.”

“In some cases, the supposedly random numbers were the same for different transactions, which could allow an attacker to determine someone’s private key and steal their bitcoins.”

“Tens of thousands of other [non Bitcoin-related] Android applications may be vulnerable, Symantec wrote. The company found more than 360,000 applications that use the SecureRandom class in the same way as the affected Bitcoin applications.”

“Symantec noted that applications running on Android version 4.2 and up may not be affected […]”.

 – http://bit.ly/1eJldmp
 – http://bitcoin.org/en/alert/2013-08-11-android
 – http://bitcointalk.org/index.php?topic=271831.0 (Further discussion of the fix)

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Podcast: Inside Bitcoins (NYC) Freedom Of Speech Panel

Podcast: Inside Bitcoins (NYC) Freedom Of Speech Panel:

Published on media service LetsTalkBitcoins (@LetsTalkBitcoins) is the panel discussion from Inside Bitcoins (NYC) from last month that had covered Bitcoin and Freedom of Speech.   Moderated by Marc Hochstein.  Panelists: Trevor Timms (executive director, Freedom of the Press Foundation), Jonathan Mohan (organizer, Bitcoin NYC), Stephanie Murphy (radio and podcast host), Alan Safahi (CEO, ZipZap) Michael Terpin (Co-Founder, BitAngels).

 – http://bit.ly/13DT3rw (mp3)  Length: 53 minutes

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Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money

Kashmir Hill – Federal Judge Rules Bitcoin Is Real Money:

Forbes.com contributor Kashmir Hill (@KashHill) highlights a new development regarding ways existing laws can be applied to Bitcoin-related activity.  Excerpts:

“In defending himself against the SEC suit, Shavers argued that Bitcoin isn’t actually money and that the SEC shouldn’t be able to prosecute him.”

“‘Shavers also contends that his transactions were all Bitcoin transactions and that no money ever exchanged hands.’”

“‘It is clear that Bitcoin can be used as money,’ writes Judge Mazzant in a ruling on Tuesday. ‘It can be used to purchase goods or services, and as Shavers stated, used to pay for individual living expenses.’”

”’[Bitcoin] can also be exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and Yuan,’ writes Mazzant. ‘Therefore, Bitcoin is a currency or form of money, and investors wishing to invest in BTCST provided an investment of money.’”

 – http://onforb.es/14z4dAx
 – http://bitcointalk.org/index.php?topic=269612.0 (Futher discussion of this legal memorandum)

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Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

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Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

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Wired – Bitcoin's Street Sellers

Wired – Bitcoin’s Street Sellers:

Wired writer Robert McMillan (@bobmcmillan) makes some face-to-face, in-person trades and describes the experience.  Excerpts:

“Welcome to the quickest, most private way to buy the internet’s most successful digital currency: in-person and face-to-face.”

“Buttonwood meetups started in New York a few months ago and fanned out to San Francisco and Los Angeles. Buttonwood is an allusion to the May 17, 1792 agreement, struck under a buttonwood tree at 68 Wall Street, that set down the rules for what became the New York Stock Exchange.”

“After some haggling, Light types Copley’s Bitcoin address into his mobile phone and transfers just over half a Bitcoin ($50) to Copley’s digital wallet [for payment of silver bullion]”.

He used to buy and sell on a (temporarily shuttered) marketplace called Bitinstant. But a few months ago, ‘it started to ask for too much of my information,’ the student says. Given the nature of his business, he wants to buy Bitcoins without being tracked.

These are the kinds of deals that have regulators worried.

It’s traditionally been tough to quickly buy Bitcoins with U.S. dollars, and recently it’s become tougher.  […] That [regulation has] led to a pretty healthy off-the-books market for Bitcoin traders. […] Buyers and sellers can also hook up over Internet Relay Chat at #bitcoin-otc”

“Buyer’s Best Friend will give you Bitcoins back for cash, much like you can get cash back from a credit card, but you are supposed to purchase something first.”

“Though trading an obscure crypto currency may sound very modern, the whole transaction has a decidedly old-fashioned and human flavor to it.”

 – http://www.wired.com/wiredenterprise/2013/07/buttonwood
 – http://bitcointalk.org/index.php?topic=261116.0

All News – Daily E-mail Subscription – Twitter: @BitcoinNews

Matthew Lynn – Gold Isn't Only Alternative To Paper Money

Matthew Lynn – Gold Isn’t Only Alternative To Paper Money:

In an article on Marketwartch, writer Matthew Lynn (@MattLynnWriter) describes how gold’s role as a store of value alternative to paper money will be seeing competition from digital currencies.  Excerpts:

“As the American [dollar] grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.”

“Gold is nothing if not a long-term investment [however] the most important threat is the rise of alternative digital currencies such as bitcoin.”

“As a rival to paper money, gold has had the market to itself. Now it will have competition, and that always drives down the price of any product.”

“Financial sophisticates might dismiss digital currencies as a craze. But plenty of other industries have been taken apart by the Internet — there is no reason why the money market should be any different.”

“In many ways, digital currencies may be a better alternative to paper money than gold.”

 – http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17
 – http://bitcointalk.org/index.php?topic=257880.0 (Further discussion of the article)

All News – Daily E-mail Subscription  – Twitter: @BitcoinNews