From the Front Page - Legal Activity

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    A Chinese Lawyer's Thoughts on Crypto

    February 28th, 2015 by totteplott

    China has recently surpassed the US as the world's biggest economy, and although China has had problems with its shadow banking system, corruption and more, it has shown to be surprisingly open about cryptocurrencies. This may seem surprising coming from a country that is communist, at least on paper. In order to get better understanding of how the Chinese are reasoning about this topic, here is an interview with Roland Sun (孙铭), a leading cryptocurrency lawyer in China.

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    Erik Voorhees Explains Why Some Bitcoin Companies Are Blocking American Users

    October 14th, 2014 by Kyle Torpey
    Although Americans generally believe that they live in the home of free markets, the United States’ role as a leader of economic freedom has been declining for decades. The United States ranked 12th on the latest version of the Heritage Foundation’s economic freedom index and is now relegated to the designation of “mostly free.” The myth of unbridled economic freedom in America is being exposed by Bitcoin. Read More
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    Independence Bancshares Studying Virtual Currencies

    October 5th, 2014 by Brian Cohen

    Independence Bancshares - a publicly traded (albeit thinly on the OTC:QX), FDIC-insured, community-based bank in Greenville, South Carolina - seemed poised to become the first bank in the United States to embrace Bitcoin payments, according to three patents published by the United States Patent and Trademark Office. However, after speaking with Chief Executive Officer Gordon Baird, Let's Talk Bitcoin has learned that Independence Bancshares has clearly distanced themselves from Bitcoin, but is "studying virtual currencies."

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    United States to Monitor Canadian Border for Illicit Drug-Related Bitcoin Transactions

    September 11th, 2014 by Brian Cohen

    Recent publications by the US federal government indicate that Bitcoin will likely be used in illicit cross-border transactions, and that the Office of National Drug Control Policy (ONDCP) is ramping up efforts to detect and interdict bitcoin transactions. There is a special focus on Canada and the United States.

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    Categories: General, Legal Activity

    Long-Arm Lawsky, Part II: Interstate Commerce

    September 7th, 2014 by wildjo

    The BitLicense is getting a lot of attention these days because it is the first significant regulatory attempt by a US authority to proscribe activity in the Bitcoin space. Not surprisingly, this first attempt is fundamentally flawed.

    Last week, I demonstrated that the regulations proposed by the New York Department of Financial Services (DFS) were unlawful because the DFS lacked the statutory authority to regulate Bitcoin. This week we tackle the constitutionality of the regulations and come to a similar conclusion: the BitLicense violates the Commerce Clause of the US Constitution and is, therefore, unlawful.

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    Categories: General, Legal Activity

    Long-Arm Lawsky, Part I: Statutory Authority

    August 30th, 2014 by wildjo

    Editor: Cheryl

    Original:

    There are a lot of reasons to dislike the BitLicense regulations proposed by Ben Lawsky and his New York Department of Financial Services (DFS). Two of the more potent arguments that have the greatest potential to strike down the proposed regulations, if they are not first withdrawn or extensively and materially modified, are: 1) lack of statutory authority, and 2) unreasonable interference with interstate commerce. Today, in this Part I, I discuss the issue of DFS statutory authority, or lack thereof, as it specifically relates to virtual currency and bitcoin.

    In order for a state agency like the DFS to take any action, it must have authority to do so. Typically, such authority comes from state law. If the agency seeks to act outside its statutory authority, it does so unlawfully. That is precisely the situation we face with the DFS and its BitLicense scheme.

    If you have read the proposed regulations, you may have noticed the phrase at the top (right after the table of contents and before the introduction); Statutory Authority: Financial Services Law, sections 102, 104, 201, 206, 301, 302, 309, and 408. This is a reference to the state law that the DFS believes gives it the power to propose the BitLicense. A closer look at this enabling legislation reveals that the DFS has been far, far too ambitious.

    Under the flawed proposed regulations, the DFS prohibits any unlicensed Virtual Currency Business Activity (VCBA) that involves a New York resident. VCBA is defined as receiving or transmitting virtual currency; securing, storing, holding, or maintaining virtual currency on behalf of others; buying or selling virtual currency as a business; converting virtual currency to fiat or any other store of value; or, controlling, administering or issuing a virtual currency.

    However, under its relevant statutory authority, the DFS has only been empowered to regulate financial products or services. We may, at first glance, assume we know what financial products or services means and conclude that virtual currency and VCBA sounds like it might fall within that assumed definition. However, state agencies lack the authority to assume. Instead, they must look to the exact language of their enabling statutes. So, what does this phrase financial products and services really mean?

    Not surprisingly, the statue is too vague. The phrase is tautologically defined in Section 104 of the Financial Services Law as:

    any financial product or financial service offered or provided by any person regulated or required to be regulated by the superintendent pursuant to the banking law or insurance law or any financial product or service offered or sold to consumers&

    Clear as mud, eh?

    Seeking clarification from New Yorks Banking Law is equally fruitless as it contains no definition of a financial product or a financial service. (it merely defines banks, bank-like institutions, and bank mechanisms such as demand deposits). It neither defines financial product or financial service nor mentions virtual currency or virtual currency business activity. Instead the statute is utterly silent.

    A common tactic in statutory construction or interpretation is to refer to definitions contained in similar statutes to help define a term used in a law or regulation that is otherwise silent or vague. We dont have to look far to find a relevant definition of a financial product or service under federal law. Section 5481 of Title 12 of the United States Code contains the definitions relevant to federal banking law. Section 5481(15)(A)(i)-(xi) defines a financial product or service as (paraphrasing):

    1) extending credit and servicing loans; 2) extending/brokering leases of real or personal property that are essentially purchase finance arrangements; 3) check cashing, collecting, or guaranty services; 4) providing real estate settlement services; 5) providing appraisal services 6) engaging in deposit-taking activities or acting as custodian of any financial instrument; 7) offering stored valued instruments where the offeror controls the terms; 8) providing payments or financial data processing products; 9) providing financial advisory services; and 10) engaging in consumer credit reporting activity.

    In a nutshell, the definition describes a bank and traditional bank products and services. Since the definition defines the same phrase used in the New York statute and since both statutes regulate the banking industry, it is perfectly appropriate to assert that the DFS statutory authority is limited to this more specific definition. That is, the DFS is authorized to regulate certain traditional banking activity, and nothing more.

    This assertion is also strongly supported by the statutory purpose contained in New Yorks Financial Services Law. Section 102 is long, but is worth reprinting in full here:

    The legislature hereby declares that the purpose of this chapter is to consolidate the departments of insurance and banking, and provide for the enforcement of the insurance, banking and financial services laws, under the auspices of a single state agency to be known as the department of financial services and to accomplish goals including the following:

    (a)  To encourage, promote and assist banking, insurance and other financial services institutions to effectively and productively locate, operate, employ, grow, remain, and expand in New York state;
    (b) To establish a modern system of regulation, rule making and adjudication that is responsive to the needs of the banking and insurance industries and to the needs of the states consumers and residents;
    (c)  To provide for the effective and efficient enforcement of the banking and insurance laws;
    (d)  To expand the attractiveness and competitiveness of the state charter for banking institutions and to promote the conversion of banks to such status;
    (e)  To promote and provide for the continued, effective state regulation of the insurance industry;
    (f)  To provide for the regulation of new financial services products;
    (g)  To promote the prudent and continued availability of credit, insurance and financial products and services at affordable costs to New York citizens, businesses and consumers;
    (h) To promote, advance and spur economic development and job creation in New York;
    (i)  To ensure the continued safety and soundness of New Yorks banking, insurance and financial services industries, as well as the prudent conduct of the providers of financial products and services, through responsible regulation and supervision
    (j)  To protect the public interest and the interests of depositors, creditors, policyholders, underwriters, shareholders and stockholders;
    (k)  To promote the reduction and elimination of fraud, criminal abuse and unethical conduct by, and with respect to, banking, insurance and other financial services institutions and their customers; and
    (l) To educate and protect users of banking, insurance, and financial services products and services through the provision of timely and understandable information.

    In other words, the main purpose of the Financial Services Law was simply to consolidate the banking department and insurance department into a single agency (the Department of Financial Services) and to help these industries remain competitive in the state.

    Setting aside for now the cynical notion that the DFS just might be meeting these obligations by trying to kill bitcoin with the BitLicense, it is plain that the DFS authority extends only to the banking industry and bank-like financial products and services (as defined above). The authority to regulate virtual currency and virtual currency business activity outside the banking industry is found nowhere in the relevant New York statutes.

    Even if, for the sake of argument, the DFS did have the statutory authority to enter this new sphere of virtual currency business activity, the proposed regulations still go too far.

    Those who study bitcoin understand that its use as a virtual currency is only one of a multitude of actual and potential uses that are not inherently financial products or services (e.g. domain name registration, smart contracts, and notary services). Yet, the DFS does not distinguish between these non-financial uses of the technology. Instead, any business utilizing the blockchain could be found by the DFS to be engaging in the transmission of a virtual currency as defined in the proposed regulations.

    For example, if a New Yorker uses a service that assists him/her in transferring a fraction of a bitcoin to establish proof of existence on the blockchain for some digital creation, they have engaged in a transaction that would require a BitLicense, despite the fact that nothing about the business arrangement is financial in nature. Taking the example a step further, suppose that digital creation was valuable and worth over $10,000.00 at the time the transfer was made. Under the BitLicense scheme, the DFS could argue that the transfer requires compliance under the anti-money laundering provisions of the regulations due to the value ostensibly transferred on the blockchain.

    There are far more examples of this type of non-bank, non-financial use of bitcoin/blockchain technology than there are for virtual currency uses. Yet, the DFS, through its flawed proposal, is seeking to rake it all in.

    The DFS cannot unilaterally extend its reach into the virtual currency sphere without the New York legislature first authorizing it to do so through new legislative action. The state agency does not have the subject matter jurisdiction that the BitLicense proposal, as written, would require. Simply put, the DFS is utterly without statutory authority to proceed in the proposed manner, and the BitLicense would be ultra vires and unenforceable.

    Not only does the DFS lack statutory authority to issue BitLicenses, doing so would be an unreasonable interference with interstate commerce as every transaction on the blockchain is, by its very nature, an interstate activity. I will cover this argument next week in Part II.

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    DEA Seizes Bitcoin: Seizure Points to Earlier Mistaken Identity

    August 29th, 2014 by Brian Cohen

    Hi Brian. William Suk here. I just wanted to say that your article popped up in my feed just now -- I'm an occassional editor. Great reporting. I always like your stuff. I have one small editorial suggestion -- put your claim front and center in one or two lines at the start of the piece. (I know it's partially in the title.) You began by mustering your evidence, and it's a great narrative, but I think it would be good to tell readers immediately what the newsworthyness is. Something like "The DEA has been implicated in a case of mistaken identity during its recent bitcoin seizure." Then tell your story.

    You know, I have been interested in this idea of confiscated bitcoin. From a sociological viewpoint it is very interesting to me that the Silk Road coins makes the US government a major "stakeholder" in Bitcoin. It's one of the largest wallets if I'm not mistaken. You would know better.

    Also, the DEA's reticence to release information is not surprising. My suggestion: FOIA the heck out of them. The FBI, NSA and other agencies could have carried out bitcoin siezures as well. I've done a couple of FOIA requests with other agencies and I'd love to get my hands dirty with the DEA.

    The Drug Enforcement Agency(DEA)appears to be involved in a case of mistaken identity in regards to last year's Bitcoin seizure. A new seizure notice that was just issued with an identical wallet address which had previously been listed as belonging to "Eric Daniel Hughes" now is associated with an "Unknown" user.

    On June 23, 2013 I broke the first ever Bitcoin seizure story with Let's Talk Bitcoin Editor in Chief Adam B. Levine and his crack team of investigators Dan Roseman, David Perry, Justus Ranvier and George Ettinger.

    The article, Users Bitcoins Seized by DEA garnered international coverage and initially ran on LTBs Tumblr.

    The article began:

    The Drug Enforcement Administration posted an Official Notification that Bitcoin (i.e. property) belonging to Eric Daniel Hughes was seized for forfeiture pursuant to 21 U.S.C.

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    Categories: General, Legal Activity

    The Blockchain, the BitLicense, and the High Costs of Compliance

    August 22nd, 2014 by wildjo

    Editor and proofreader: Cheryl Copy of original:

    Since the release of the proposed New York Department of Financial Services (DFS) BitLicense regulations on July 23, 2014, the crypto community has been concerned, but there hasnt been enough discussion of the specific implications such regulation would have. Its about time we put some flesh on those bones. Specifically, what would compliance with the regulations as written actually cost?

    The goal of this post is to provide some answers, but, first let me tell you a quick story about how I started thinking about it.

    The other night found me alone, sitting in my favorite chair, watching transactions in the bitcoin blockchain. It was a slow night, but my expectations were low.

    I pulled up the Blockchain.info block explorer and focused my screen on the flow of current transactions. I have to admit, it was somewhat enchanting to watch the constant stream of bitcoin commerce. Satoshi really gave us something to marvel at here.

    It wasnt long before the first large transaction rolled through. And they kept coming, and they kept getting bigger. After about an hour, I had seen everything from a $0.00 transaction with a $0.10 transaction fee to a $775,000.00 transaction with a $0.05 transaction fee.

    The blockchain statistics indicate that $800.00 was the average transaction amount during the twenty-four hour period in which I was watching. This was far higher than I had previously assumed. Clearly, a lot of value is moving effortlessly (e.g. cheaply) through the blockchain, which is precisely why the DFS wants to get involved.

    And this brings us to one of the meatiest and costliest parts of the proposed regulations.

    Section 200.15 requires all regulated entities to implement a full Anti-money laundering (AML) and U.S. Treasury Office of Foreign Asset Control (OFAC) compliance program. In subsection (d)(2), the regulations require a licensed entity to report within twenty-four hours all transactions (whether individual or cumulative) that exceed $10,000.00 in a single day. Subsection (g)(4) goes further and requires that a licensed entity track single transactions that exceed $3,000.00, with the implication that such transactions are suspicious. Subsection (d)(3) requires the immediate reporting of any suspicious activity regardless of dollar amount. This may not seem that bad or that costly, but I assure you it is.

    During my night in the blockchain, I conducted a very informal and unscientific test. I set my timer for three minutes and counted all the transactions greater than three thousand dollars during that time. After multiple rounds, the average was fifteen, with half of those being greater than $10,000.00. This would theoretically translate into a total of 7,200 transactions per day that could be subject of either a Currency Transaction Report (CTR) or Suspicious Activity Report (SAR). Thats well over two and a half million reports per year, and bitcoin is just in beta! Its a staggering amount of paperwork for bitcoin businesses to produce and for the regulator to actually make use of. But what would it cost?

    There is very little detailed information in the literature regarding AML compliance costs. One 2005 study estimated that regulated entities in the United States spent $1.8 billion (yes, thats a b) in annual AML compliance costs.1 The Financial Crimes Enforcement Network (FinCEN), reports that there were 15.8 million AML compliance reports filed in 2005.2 Doing some simple math for a down & dirty estimate suggests that each report filed in 2005 cost regulated industry $114.00. That kind of makes you feel bad for the banks until you realize that they simply pass those costs on down to us, which is exactly what the bitcoin community would have to do with this potential $820,000 daily bill.

    While possibly generating the greatest financial burden on the bitcoin space due to day in and day out application, Section 200.15 is not the only section to impose significant costs on BitLicensees.

    Section 200.5 requires that each BitLicense applicant submit a nonrefundable application fee. The proposed regulations dont state any amount, leaving it up to the discretion of the DFS, but we can make an educated guess. Every other market-entry license issued by the DFS requires a $12,500.00 application fee. Its no stretch to assume that the BitLicense will cost an equal amount.

    Section 200.4(a)(4) requires background checks for each Principal Officer and Principal Stockholder. In the New York market, these background checks run $650 a pop.

    Sections 200.14(a) and (b) require the submission to the DFS of quarterly financial statements and audited annual financial statements. It is the latter one that is the most costly. I recently had a moderately sized corporate client contract for their first audited financial statement and the final bill was around $35,000.00. Recall that this would be an annual expense under the proposed regulations.

    From here on out, estimating costs get a bit more speculative.

    Section 200.8(a) requires that each BitLicensee be sufficiently capitalized to ensure financial integrity. The sufficient amount of capital is solely determined by DFS. It could be a little number. It could be a big number. Your guess is as good as mine, but only the DFS guess counts.

    Section 200.9(a) requires that each BitLicensee maintain a bond or trust account in an amount acceptable to DFS. Again, it could be a little number. It could be a big number. Your guess is as good as mine, but only the DFS guess counts.

    Section 200.13(a) requires that each BitLicensee submit to biannual examinations. It is not quite clear what this would exactly entail, but it is a safe bet that each BitLicensee will want to prepare, which means accountant and legal costs, as well as lost opportunity costs associated with staff devoted to compliance rather than engaged in direct market making activity.

    Last, but not least, Sections 200.16(c) and (f) requires each BitLicensee to employ sufficient cyber security personnel, including a Chief Information Security Officer. Sections 200.16(d) and (e) require an annual cyber security audit by a qualified and independent third-party. The way these regulations read, one person isnt going to be able to be a jack of all trades and wear multiple regulatory hats. These regs require dedicated cyber security staff and third-party consultants, and both are expensive.

    We have now covered all of the vaguely enumerated costs of compliance contained in the proposed regulations. These are big, daunting numbers: $12,500 just to apply; $35,000 annually for an outside audit; $114 for each AML report (and you better be liberal in your reporting so as not to miss something and risk being assessed a penalty); $650 for each background check of each executive staff or investor; obtaining sufficient capital; posting sufficient bond; and on and on. But, theres more to it.

    Each applicant will necessarily incur the general consulting costs of developing all of the policies and procedures required under the proposed regulations, as well as preparing all of the disclosures, background information, business practices and strategy descriptions, marketing plans, advertising samples, etc., etc. that are also required to be disclosed with the application. In other words, there will be significant costs for simply putting the multi-layered application together. Lawyers and accountants will charge a lot of money for their guidance. Industry data shows that the average associate attorney in the New York market charges $400.00 per hour (with partners pulling in $1,000.00 or more). In a specialized field such as bitcoin licensing, you can assume that the fees are going to be above average. Even the smallest of the potential BitLicensees should plan on thousands of dollars to simply put the application together, with larger ventures approaching six figures. These will be sunk costs with no guarantee that the application will ever be approved.

    It should be clear at this point that the proposed DFS regulations would not simply make business in the bitcoin space do a lot of unpleasant stuff; they are going to make businesses in the bitcoin space pay a whole lot of money to do Them. That will have two consequences: it will set up obstacles to entering the space that only the most resource rich players can afford; and, it will introduce financial friction into the system and increase transactions costs. There is a strong argument that these consequences are antithetical to the fundamental principles underlying the bitcoin protocol. The crypto community has cause for concern.

    Sources:

    1. Yeandle, Mark, et al., Anti-Money Laundering Requirements: Costs, Benefits and Perceptions, June 2005
    2. FinCEN Annual Report Fiscal Year 2005

    Cover image courtesy of LittleShibe.

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    Categories: General, Legal Activity

    Death and Bitcoin

    August 15th, 2014 by wildjo

    Editor: Edward
    Proofreader: Cheryl

    For too many people, the answer to the question "What happens to your bitcoins when you die?" will include some variant of "lost." Of course, that does not have to be the case if we use the legacy estate law of our home jurisdictions. These legacy systems, however, have the same disadvantages of the financial system we are trying to make obsolete with cryptocurrencies: trusted third parties and gatekeepers.

    There are alternatives within and on top of the Bitcoin protocol that can overcome these legacy estate law disadvantages. This article identifies two and suggests a mechanism in which they may be employed to provide simple estate-like planning in a decentralized, autonomous way without the time cost and monetary expense of traditional strategies.

    [The above was written by the original author. I assume it was meant to be used as an excerpt/preview for the article. I made some minor edits.]

    ----------------------------------------------------------------------------------------------------------------------------

    What happens to your Bitcoin when you die?

    For some of us outliers in the U.S. cryptocurrency communitythat is, those of us who didnt grow up with a computer in the home and are old enough to have learned how to type on an actual typewriterthe twin certainties of death and taxes are on our minds more than others. In this regard, crypto presents unique challenges. How do we pass on our Bitcoin wealth and legally avoid unnecessary estate expenses, while also protecting our private keys while we are still alive?

    The world of estate law (the law governing the management of a persons assets, with an eye to how they will transfer after he or she dies) has some ideas, but, not being crypto devotees, those ideas center around how to wrangle crypto into their non-crypto world.

    For example, the proposed Fiduciary Access to Digital Assets Act (FADAA) would simply give trusted-third parties enhanced rights (and liability protection) to force a software or hardware company to provide anothers private information. That may be necessary in some situations, but Im sure the crypto community can come up with a better and more generally applicable decentralized and autonomous solution that minimizes the need for trusted third-parties and gatekeepers (and their associated privacy risks and fees).

    Why is the status quo unsatisfactory? The main problem with legacy estate law is that it requires the disclosure of private keys to trusted third-partiesexecutors, trustees, agents operating under a power of attorney, conservators, and personal representativesso that they may access the decedents wallet and distribute the decedents digital assets. Thus, we reintroduce the trust factor back into an area of the cryptocurrency arena that was doing just fine without it. Not only must we trust that these third-parties wont access our wallets while we are living, but we must also trust that they will keep the private keys secure and provide continuity of care in the event they predecease us. Continuity of care requires the introduction of even more third-parties, but is necessary, if not required under some state professional responsibility codes, when attorneys and other professional fiduciaries are involved.

    Another deficit of the legacy estate system is that it necessitates the inclusion of gatekeepersprobate courts/judges, magistrates, executors, attorneys, and state agencies (e.g. vital statistics departments). In even the simplest of situation where all the necessary information is known and all the heirs are getting along, these gatekeepers impose costs in terms of both time and money. Where information is absent and heirs disagree, those costs can be extraordinarily high. Sadly, the latter scenario is far too common.

    Estate law is a required course in law school. I suffered through it and swore I would never practice it when I became an attorney because it can capture the human species at its very worst. The cases usually have the same last name on each side of the v., as in Jones v. Jones and Smith v. Smith, because some relative feels they got the short end of the inheritance stick and decides the only way to be vindicated is to blow up the family. These fights rage on because both sides are empowered by a legal system and legal profession that stands to profit from the dispute. Family relationships are devastated and family assets dwindle in the process. Insert the technological difficulties and relative unfamiliarity of crytpocurrency and you are simply adding heavy fuel to those fires; fires that can only be snuffed out with the loss of additional time and money.

    No. Satoshi was right. We need to continue to keep trusted third-parties and gatekeepers out of our digital financial lives as much as possible, both during our lives and after our deaths. The problem is, however, that there is no clear way to accomplish this within the Bitcoin protocol. Or is there?

    Im no coder, and my computer competency is just deep enough to make me dangerous. Still, we need to start considering this question, so allow me to kick it off and allow other, more sophisticated, members of the community to take it further.

    In my view, what we are looking for is a mechanism that allows a wallet holder to send a percentage of their wallet balance, whatever that balance may be at some indeterminate time, to another wallet(s) upon the death of the first wallet holder. There are a couple elements here that we need to parse out.

    First, the transaction needs to take place in the future. As I understand it, this function (or something very similar to it) already exists within the protocol. It is called LockTime and is a major feature of distributed blockchain contracts that allows a payment to be made from one address to another after the specified period (n) has passed. Without more, such a function could be used as a crude estate planning tool by selecting a date beyond which is the reasonable life expectancy of the initiating party. However, that means that the initiating party could never change their mind and that the beneficiary might have to wait years before they receive the asset. A lot could happen in that intervening period to make such a transaction unpalatable.

    To make this function better for autonomous estate planning purposes, we would need to modify the LockTime functionor build on top of itto allow us to modify the transaction date repeatedly. If this were possible, we could set up transactions to our heirs on New Year's Day of each year to be distributed, for example, on January 1st of the following year. If we pass away within that period, then transaction propagates. If we dont, then we modify the transaction on New Years Eve to take place in another year, repeating the process until we are no longer around to do so and the transaction kicks in. In the meantime, this flexibility allows us to adjust who our beneficiaries are, the amount they would receive, or to suspend the transaction altogether at any time. In other words, it gives us the flexibility of the existing estate law system (e.g. rewriting a will) with the autonomy of the Bitcoin protocol.

    The second element to address is the amount transferred. With the current LockTime function, the amount of the coin transferred must be specified and it is removed from the wallet. However, in the new estate planning space we are creating for ourselves, while we want our heirs to inherit what is left over, we might want to spend some of our Bitcoin in the meantime. Having to deplete our wallet balance, even if temporary, in order to make a contingent LockTime transaction, could be inconvenient. But, what if we could modify the function to allow for a percentage of the then existing wallet balance to be transferred? For example, I set a transaction to my daughter to be completed a year from today and the amount is set at twenty-five percent of the balance existing in my wallet at that specific time. I could then accommodate multiple heirs with set percentages and not have to worry about changing the transaction each time my wallet balance changed.

    In this scenario, I could set up empty wallets for each of my beneficiaries, teach them how to use the technology, make sure the private keys were preserved (e.g. in a safe), and instruct them to get their own wallets and move their distribution out of that interim wallet and into their own, secure wallet upon my death. This prevents the private keys to my account from being compromised, while minimizing the period of time that the interim account is vulnerable (it will not be used except on the moment the contingent LockTime transaction is ultimately made and then transferred out to the beneficiaries' own wallet) while also ensuring that the LockTime transaction can be recovered (private keys kept in safe place known to me and relevant beneficiary). All of this accomplished autonomously, with only me and my beneficiaries playing an active role.

    Another use of a system of this nature would be to safeguard wallets in the event of lost private keys. For example, on my birthday each year, I could create a TimeLock transaction that would transfer my balance (0-100%) to another address on my following birthday, unless I rescinded it at any time before that magical date arrives. In the interim, if I lost my private key, there is a contingency in place that would allow me to recover my balance in the new wallet and all I would need is a little patience.

    Getting back to our estate planning use, an autonomous system of this nature is similar to the legacy estate planning systems pay on death (POD) or transfer on death (TOD) account. There, an account holder designates a beneficiary and informs the institution holding the account of their identity. During the principals life, the beneficiary has no right to the account, but title and right vests immediately with the beneficiary at the moment of the principals death. This allows the account to be distributed to an heir(s) (the designated beneficiary) outside of probate. The drawback, of course, is that the beneficiary has to obtain and present a certified copy of the death certificate to the bank in order to take possession. This can waste time and money.

    A contingent TimeLock % balance transaction is clearly superior as it accomplishes everything a POD/TOD account does, while keeping the gatekeepers (in this case, the institution issuing the death certificate and the institution holding the account) out.

    There are a lot of nuances to any given jurisdictions estate law and a lot of complexities that go into a persons estate plan. This discussion is, by no means, an attempt to cover any of that ground or to provide legal advice to the reader. Rather, the goal here is to kick off a discussion of a basic wallet/protocol function that could be one strategy in an overall estate plan, and, most importantly, one that minimizes the drawbacks of the legacy estate planning system and its trusted third-parties and gatekeepers.

     

    In other words, Im hoping we can answer the question, What happens to your Bitcoin when you die? with, No worries. Its in the blockchain.

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    International Monetary Fund Asserts Bitcoin Not a Currency in Draft Report

    August 12th, 2014 by Brian Cohen

    Original (dhimmel), accidently modified with intial edits:

    NOte From BrianL Not sure what impact the above statement has on article but I ##have made a few modification on original to 8/13

    The International Monetary Fund (IMF) is currently drafting Monetary and Financial Statistics Manual & Compilation. The document has a Draft watermark and a meta-data creation date of June 26, 2014.

    Chapter four of the manual is entitled "Classification of Financial Assets and Liabilities" (PDF) which includes in part classifications of "Monetary Gold and SDRs" and "Currency and Deposits."

    Under Currency and Deposits we find section 4.36 with Footnote 13:

    Not all electronic payments involve electronic money. For instance, credit cards or debit cards are not electronic money because no monetary value is stored on them; and store cards or internet-based currency (such as Bitcoins [13] or gaming money) are not electronic money because these are not widely accepted as a medium of exchange.

    Scrolling down to the referenced footnote 13 we find:

    Bitcoin also does not meet the definition of a currency as it is not issued or authorized by a central bank or government.

    Therefore we must assume that the IMF presently defines currency as issued or authorized by a central bank or government. Oddly at the same time, the manual states that Bitcoin is and is not a currency. The author chose the term "internet-based currency" rather than the more common terms "virtual currency" or "digital currency." Maybe the IMF is confusing Bitcoin with "Internet-based payment services" which is a commonly used term (and Bitcoin is a payment network in addition to being a virtual currency). The G7 connected FATF (Financial Action Task Force) prepared a document in June 2013 entitled "Guidance For A Risk-based Approach Prepaid Cards, Mobile Payments and Internet-Based Payment Services" (PDF).

    I was able to find reports from 2011 and 2012 from the IMF that define currency in part as "..consist{ing} of notes and coins that are of fixed nominal values and are issued or authorized by the central bank or government."

    July 27, 2012, IMF Staff Discussions Note "What Lies Beneath: The Statistical Definition of Public Sector Debt An Overview of the Coverage of Public Sector Debt for 61 Countries"(PDF) defines "Currency and deposits":

    Currency consists of notes and coins that are of fixed nominal values and are issued or authorized by the central bank or government. Although all government subsectors hold currency, generally only the central bank issues it. Deposits are all claims, represented by evidence of deposit, on the deposit-taking corporations (including the central bank) and, in some cases, general government and other institutional units.

    On May 27, 2011 "Public Sector Debt Statistics: Guide for Compilers and Users (Google Books) was issued by the IMF Inter-Agency Task Force on Finance Statistics which provided the following definition of "Currency and deposits":

    Currency consists of notes and coins that are of fixed nominal values and are issued or authorized by the central bank or government. In some countries, commercial banks are able to issue currency under the authorization of the central bank or government, Currency constitutes a liability of the issuing units. Unissued currency held by a public sector unit is not treated as a financial asset of the public sector or a liability of the central bank. Gold and commemorative coins that are not in circulation as legal tender, or as monetary gold, are classified as nonfinancial assets rather than currency."

    The IMF definition of currency appears to be a derivative work of the European System of National Accounts from the European Commission in 2008. This document (Google Books) was drafted by European Commission, IMF, United Nations, World Bank and the Organization for Economic Co-operation and Development and defined currency as follows:

    "Currency consists of notes and coins that are of fixed nominal values and are issued or authorized by the central bank or government. (Commemorative coins that are not actually in circulation should be excluded as should unissued or demonetized currency.) A distinction should be draw between domestic currency (that is, currency that is the liability of resident units, such as the central bank, other banks and central government) and foreign currencies that are liabilities of non-resident units (such as foreign central banks, other banks and governments.) All sectors may hold currency as assets, but normally only central banks and government may issue currency. In some countries, commercial banks are able to issue currency under the authorization of the central bank or government."

    The Manual provides some history on this document and states that:

    In 2000, the International Monetary Fund (IMF, or the Fund) published the Monetary and Financial Statistics Manual (MFMS), which was the first volume of its kind in the field of monetary and financial statistics.

    The IMF appears to recognize the difficulty in defining or "classifying" certain financial instruments:

    This Manual contains additional discussions on borderline cases in the classification of financial assets and liabilities.

    Further, the IMF is willing to reclassify (i.e. redefine) some of these instruments:

    An important revision concerning financial instruments is the reclassification of the special drawing rights (SDR) allocations to the Fund's member countries, from equity to long-term foreign liability. The change was introduced in August 2009 in the monetary data compiled by countries, with historical data having been revised correspondingly. Previously, SDR allocations were recorded as a unilateral transfer from the IMF to its member countries, and in monetary statistics recorded as part of equity.

    This change is particularly interesting as we have seen headlines such as "IMF Bailout for Ukraine and a New World Currency" from the New American in regards to the April 30th Announcement by the IMF "IMF Executive Board Approves 2-Year US$17.01 Billion Stand-By Arrangement for Ukraine, US$3.19 Billion for immediate Disbursement"

    Robert Wenzel of Economic Policy Journal was quoted by New American as follows:

    It signals fear on the part of U.S. government officials that the dollar is slowly losing its luster as a reserve currency. U.S. officials are trying to nudge the SDR as the alternative to the dollar because they will still maintain significant influence with regard to the SDR, as opposed to some other currency taking hold in parts of the world as a reserve currency (the [Chinese] renminbi?) or gold returning as an important reserve. China and Russia are both presently accumulating gold.

    In an IMF blog post from September 24, 2009 entitled "Reserve Currencies in the Post-Crisis International Monetary System" (brought to my attention from Bitcoin Magazine article "

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    Banks Issue Bitcoin Report: Bitcoin Community Absent

    August 11th, 2014 by Brian Cohen

    only publish between 3PM and 4AM Pacific Time

    Recently I took out Twitter to note my surprise that only a handful of folks have bothered to watch the "Conference of State Bank Supervisors Public Hearing on Virtual Currencies" on YouTube which was part of a "CSBS Emerging Payments Task Force Public Hearing on May 16, 2014". This was a week after the Federal Advisory Council and the Board of Governors of the Federal Reserve met and discussed Bitcoin at great length at their quarterly meeting. The speakers were announced on May 5. This becomes even more surprising as the U.S. Government Accountability Office linked to the the hearing in its blog report "Risks of Virtual Currencies" in its "Watchblog: Following The Federal Dollar." I guess its a Watchblog with no one watching?

    Only 30 Views - YouTube : Conference of State Bank Supervisors Public Hearing on Virtual Currencies? https://t.co/4IdtSNSipR

    — Brian Cohen (@inthepixels) August 8, 2014 At the public hearing, Megan Burton, Chief Executive Officer, [CoinX ](https://www.coinx.com/)noted the overwhelming obstacles that they encountered with banking institutions. Though you probably wouldnt know this if you read the [transcription of the hearing](http://www.csbs.org/regulatory/ep/Documents/EPTF%20Hearing%20Panel%203.pdf) (PDF) which erroneously credits Annemarie or Annemarie Tierney, EVP Legal and General Counsel, SecondMarket with the comments: >... We've actually been turned down by about 61 banks now. That's overwhelming. We never get to the word cryptocurrency. We state the word MSB and the conversation halts... And further, >I wouldn't say that it's specific to this panel that you see before you today. I think it stems specifically to us being put in a category of high risk. In this meeting, what was fascinating was the fact that when I talk about the transaction flow that we could potentially have, the sheer volume of what would go through...A community bank is typically not equipped to be able to handle that level of transaction volume, nor do they have the insight into my business to know how to gather enough information at the KYC process to know who we're touching and what we're doing. Moreover, >There needs to be a bridge between where we are as a MSB in a high risk category and where the banks are and how they're being regulated to be able to facilitate better communication between the two. Burton's comments on community banks is interesting. When larger institution are rejecting Bitcoin companies applications they are putting additional pressure on smaller banks, i.e. community banks who are being approached to fill this void. And what can community banks use as guidance when dealing with these newfangled Bitcoin companies? Well, on June 23, five weeks after the Conference of State Bank Supervisors Public Hearing on Virtual Currencies, the ICBA or Independent Community Bankers of America Clearing House and The Clearing House (TCH) issued a thorough twenty five page white paper entitled [Virtual Currency: Risks and Regulation](http://www.icba.org/files/ICBASites/PDFs/VirtualCurrencyWhitePaperJune2014.pdf) (PDF). This report is also available as a PDF through short URL at [www.icba.org/virtualcurrency.cfm](http://www.icba.org/virtualcurrency.cfm) as well as the [TCH website](https://www.theclearinghouse.org/publications/2014/tch-releases-white-paper-on-virtual-currencies). The [Independent Community Bankers of America](http://www.icba.org/) is the nations voice for more than 6,500 community banks with nearly 5,000 members, representing more than 24,000 locations nationwide and holds $1.2 trillion in assets, $1 trillion in deposits, and $750 billion in loans to consumers, small businesses and the agricultural community. And further, ICBA member community banks create symbiotic relationships with the communities they serve, favor local decision-making, while adhering to the highest business practices and ethical standards, and support a democratically governed association where each member bank has a voice and a vote& The Clearing House according to its website was {e}stablished in 1853 by the nations leading banks, The Clearing House originally functioned as the de facto central bank for banks in the United States long before the Federal Reserve was formed& and as noted in the white paper, >The Clearing House is the oldest banking association and payments company in the United States. It is owned by the worlds largest commercial banks, which employ over 2 million people and hold more than half of all U.S. deposits. The Clearing House Association L.L.C. is a nonpartisan advocacy organization representingthrough regulatory comment letters, amicus briefs and white papersthe interests of its owner banks on a variety of systemically important banking issues. The Clearing House Payments Company L.L.C. provides payment, clearing, and settlement services to its member banks and other financial institutions, clearing almost $2 trillion daily and representing nearly half of the automated clearinghouse, fundstransfer, and check image payments made in the U.S. The white paper also makes reference to the Conference of State Bank Supervisors: >...A large number of U.S. states currently participate in the Nationwide Mortgage Licensing System (NMLS), a web-based utility operated by the Conference of State Bank Supervisors State Regulatory Registry, through which participating states and the federal government ...has recently been expanded to permit states to utilize the system to administer licensing of payday lenders, money transmitters, check cashers, and other types of consumer financial service providers...The existing NMLS infrastructure could be expanded to include licensure of virtual currency market participants.. Perhaps it is a bit surprising that ICBA was involved in drafting the report because while it was being drafted, Cary Whaley, Vice President of payments and technology policy for ICBA told Bloomberg news in [Bitcoin Breakthroughs Studied by Banks the Currency Is Out to Replace](http://www.bloomberg.com/news/2014-05-07/bitcoin-breakthroughs-seen-copied-by-banks-it-s-meant-to-replace.html) that they had no interest in using Bitcoin: That reputation makes banks reluctant to use the digital currency directly, said Cary Whaley, a vice president at the Independent Community Bankers of America. While virtually none of the groups members are interested in using the digital money, a small number are examining its concepts, he said& However, the regulatory scrutiny that community banks face has been compared to that of virtual currency upstarts in Informationweek Bank Systems & Technology [How New York State Is Looking to Regulate Bitcoin](http://www.banktech.com/compliance/how-new-york-state-is-looking-to-regulate-bitcoin/d/d-id/1296859) as well as PaymentsSource [New York Sees Bitcoin as a Catalyst for Modernizing Regulation](http://www.paymentssource.com/news/new-york-sees-bitcoin-as-a-catalyst-for-modernizing-regulation-3016794-1.html); both of which use NYDFS as a reference. And shortly after the report was released [there were grumblings on BitcoinTalk](https://bitcointalk.org/index.php?topic=689587.0) about banks and in particular community banks interest in Bitcoin. Too big too fail doesnt mean too small to succeed. Community banks importance to the financial system became clearer during the 2008 financial crisis which illustrated what happens when banks become too big to fail. In July, [the Senate approved an amendment](http://blogs.wsj.com/economics/2014/07/17/senate-approves-move-to-reserve-fed-seat-for-community-banks/) to reserve a seat on the Federal Reserve Board of Governors for an individual with community banking experience. It is interesting to note that OTC Markets Group Inc which operates financial marketplaces for 10,000 U.S. and global securities recently [announced](http://finance.yahoo.com/news/otc-markets-group-welcomes-banks-110000336.html) the first banks to trade on the [OTCQX marketplace](about:blank) under a new streamlined qualification process for U.S. community and regional banks. This also happens to be where [SecondMarket (i.e. Bitcoin Investment Trust) is proposing to launch a bitcoin investment fund](http://online.wsj.com/news/articles/SB10001424052702304026304579449782511589924) for ordinary investors in competition to the [Winklevoss Bitcoin ETP](http://letstalkbitcoin.com/post/55120007013/winklevoss-bitcoin-etf-may-not-be-redeemable-in) commonly referred to as an ETF. A statement of purpose for Virtual Currency: Risks and Regulation succinctly explains the goal of this document: >The purpose of this white paper is to promote consideration of how existing regulatory regimes in the U.S. may be applied to virtual currency, virtual currency system participants and products, and virtual currency transactions. I hand picked some additional quotes from the paper and found the footnotes particularly interesting: >Under the current federal regulatory regime, players in the Bitcoin system are not subject to safety and soundness oversight, and no entity in the Bitcoin system is yet large enough to be subject to oversight as a systemically important institution or utility, even were such regulations applicable. _ >Live market capitalization of 158 convertible virtual currencies can be viewed at [https://coinmarketcap.com](https://coinmarketcap.com/)  _ >Primary sources for this section {The Bitcoin System and Bitcoin Transactions.} are the Nakamoto paper cited at fn. 7, above; CoinDesks A Beginners Guide to Bitcoin (available at http://www.coindesk.com/information/); and Blockchain.info, which hosts the publicly searchable blockchain database and technical information regarding Bitcoin mining. _ >Given the lack of international consensus regarding classification and treatment of virtual currencies, the regulatory approach ultimately adopted by the U.S. is likely to have a significant influence on the shape of the global virtual currency economy in years to come. _ >Notwithstanding the use of the term wallet, it is not necessary that users store their Bitcoins in their wallets. In fact, for security reasons, users are often advised to store a list of their Bitcoin serial numbers [sic] on paper, a USB key, or a non-internet-connected hard drive (all of which are referred to as cold storage or cold wallets) rather than in an online (or hot) wallet. The user must then load the Bitcoin into the wallet prior to using it for a transaction. _ >...in some cases, there will be no wallet provider associated with a Bitcoin wallet. Where there is no wallet provider, there is no entity that can be subject to regulation other than the user. Regulating the user would not likely be viewed as furthering the consumer-protection policy that motivates much of the existing payments regulatory framework. _ >Given the limited size of the virtual currency economy, no virtual currency exchange or wallet currently is likely to satisfy the requirements that must be met to be eligible for designation as a systemically important FMU {Financial Market Utility} or as engaging in systemically important PCS {payment, clearing, and settlement} Activities. _ >It is unlikely that exchanges that accept and maintain fiat currency accounts would be deemed to be taking deposits for purposes of U.S. banking laws, as (i) most exchanges that engage in such activity use a bank custodian model and (ii) most virtual currency exchanges are either located outside the U.S. and/or have established banking relationships with non-U.S. depository institutions. _ >...a team of core developers, led by developers allegedly appointed by Satoshi Nakamoto, has a leadership role in proposing changes to the Bitcoin protocol. However, that team has no authority to force the Bitcoin community to accept such changes. _ >...one existing unregistered virtual currency exchange advertises that it will be offering customers the ability to earn interest on the Bitcoins those customers deposit with the exchange at an attractive rate. In this regard, the exchange could be seen as offering a security (an investment contract) to its customers& _ >...While virtual currency market participants may eventually develop an insurer similar to the FDIC or SIPC, or may even be able to obtain insurance coverage from private insurers in a more de-centralized fashion, in the absence of a meaningful insurance fund, regulators should ensure that consumers and others engaging in transactions on virtual currency exchanges receive adequate warnings of the risks involved in that activity (e.g., that trading in virtual currency products on an exchange is unregulated and risky, and may result in the loss of the consumers investment), similar to disclosures required for penny stocks or even the Surgeon Generals warning regarding use of tobacco products. The white paper in part concludes that: >This white paper has described certain of the risks faced by consumers and others that hold or transact in convertible virtual currencies, and has evaluated certain ways in which U.S. regulatory authorities may consider regulating virtual currency transactions, products and marketplace participants based on their functional similarity to other transactions, products and marketplace participants that are regulated. The failure of Mt. Gox earlier this year, and the value that may have been irretrievably lost in connection with that failure, serves as a perfect backdrop for this white paper. The aggregate number and value of virtual currency transactions and holdings in the U.S. is small relative to most other regulated payments transactions and trading markets. However, the emerging nature of the virtual currency marketplace creates an opportunity to develop and implement a regulatory framework to mitigate risk to consumers and others without unduly burdening innovation and while the structure of the marketplace remains malleable. Image Credit: Cigarette Box is an altered [Flickr Image](https://www.flickr.com/photos/icerazor/5993241070/in/photolist-a8AVLA-aVR53T-Gngjf-muFW3-3f8aeo-7aNiBG-2k9UWE-fhLAKa-4GBm29-7Dy2eJ-83eMFA-83ePrm-gVPtf2-efCSdD-7bwFk4-e1ZxdD-83bEgB-a6hkgi-74ijhw-5fpdU8-adbj3P-hLmfHv-7XqRtY-hMo61U-chEMnw-bRgoQB-5miZHE-acgNkb-acgNk9-ej1Nod-gVVBPY-acgNkd-83bFo4-7SwHUY-a1ZRQj-93BVsy-97cd3t-dXPbrq-bkjPhC-coh5M7-coh5rL-61UemM-4SPd77-tTFai-dhgMTp-8aZBLx-9hLTZn-4GqPLC-8jjukA-4yZefv/) Read More
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    eBay and Microsoft Eye User-Created-Value Platforms Similar to LTB

    August 5th, 2014 by Brian Cohen

    Original (dhimmel):

    !!!!! SENSITIVE TITLE - PASTE IN PLACE BEFORE PUBLISHING: eBay and Microsoft Eye User-Created-Value Platforms Similar to LTB !!!!!

    On July 9th, 2014, EcommerceBytes reported that eBay is considering "Compensating Users to Post on the eBay Boards. This was revealed when eBay held a Weekly Chat with the eBay Community Team on July 2nd:

    This week, the eBay Community team wants to hear your ideas about rewards & recognition for Community participation.

    EcommerceBytes noted that:

    In response to a question about what the eBay moderator meant, the moderator replied, For example, if eBay were to reward members for their Community participation, what types of participation should we consider? Number of posts? Number of correct responses?

    While EcommerceBytes said the move smacks of desperation, I will offer a different perspective. This is a paradigm shift whereby users will actually create and share value of the network and not just transfer (i.e. reallocate) value across it.

    The scope of eBays reward program eBay Bucks could expand beyond purchasing products into the realm of rewarding message board users. While eBay bucks is currently a walled garden it is possible that we could see it float through the gift token that I discussed over at Bitcoin Magazine in eBay Files Patent Application for Programmable Money. Or less likely but still possible, eBay could let Bucks be freely traded on a platform such as that proposed by IBM (see IBM Building e-Currency Platform, including Bitcoin.

    In what seems to be synchronicity, eBay posted the weekly chat announcement on June 30th which was just a couple days after Lets Talk Bitcoin! (LTB) launched LTBcoin (see the announcement at Introducing LTBCOIN, our new crypto-rewards program for LTB Creators and Community. LTBcoin according to the tokens website is a brand new kind of thing. It is a crypto-rewards system where people who help LTB to be useful are rewarded for their efforts. And its built on Bitcoin! In describing LTBcoin (LTBc), I have said Purchase not required. Participation is (Twitter). In fact, you cant buy LTBc from Lets Talk Bitcoin! However, everyone and anyone who participates in the Lets Talk Bitcoin Network (LTBn) is rewarded and distributed LTBc based on their participation in the network. Content creators receive the most amount of LTBc for their efforts but anyone can submit content (blog posts, podcasts and videos). Similar to eBays value proposition, 2.25 million LTBc were initially distributed to LTB community members with five or more forum posts and that registered a LTBcoin Compatible Address. LTBn is continually innovating and released Magic Words on July 17th in which a magic word is spoken on the podcast and listeners redeem the word on the Lets Talk Bitcoin website and are rewarded five times as many LTBc if they had read an article on the Lets Talk Bitcoin website...Yes, even reading an article on the website is worthy of an LTBc reward.

    According to the LTBcoin website, LTBcoin is a

    user-defined asset using the Counterparty protocol. Counterparty is built on Bitcoin and is secured by the Bitcoin network. Because of this, LTBcoin addresses are exactly the same as Bitcoin addresses. LTBcoin can be traded on the Counterparty distributed exchange for Bitcoin, XCP or other user-defined assets.

    Ethereum

    Ethereum is a distributed application software platform often referred to as Bitcoin 2.0. While Counterparty works on top of the Bitcoin blockchain, Ethereum is not compatible with Bitcoin (also see Overstock.coms o.info How to issue a cryptosecurity. On June 4th, prior to Ethereums ether sale, Ethereum posted a YouTube video of Chief Communications Officer Stephan Tual entitled What is Ethereum?. This video is the explainer that visitors first encounter when entering the Ethereum website. Tual explains that:

    ...another interesting application of this concept {of distributed application software} is that today on Facebook if you help identify artists that subsequently become successful by pressing the like button that value goes to Facebook advertisers not the content producers, not you. On Ethereum on the other hand both the content creator and the early adopter will be rewarded for identifying that artist. Its a brand new revenue model that never been seen before and it can completely revolutionize the way we think about revenue on the internet today.

    Reddit

    One has to wonder what Reddit has in store for their community after it was disclosed on Reddit to much fanfare (i.e. it made the Bitcoin sub-Reddit front page) that Reddit is hiring a couple of Cryptocurrency Engineers. While it is conjecture on my part, the shift towards users not just participating in the network but creating value based on their interaction with it cannot be dismissed.

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    Congressional Research Service Quietly Revises Bitcoin Report

    July 25th, 2014 by Jonathan Silverblood
    Original (dhimmels):

    Last week the Congressional Research Service updated a the Bitcoin: Questions, Answers, and Analysis of Legal Issues document to better reflect current events.

    The document serves as an introduction to Bitcoin and and aims to cover all information necessary for members of the US Congress to make decisions and includes information on many various subjects such as how Bitcoin works on a technical level, Bitcoins benefits and drawbacks, discussions about mainstream usage of Bitcoin and current and future regulation and laws.

    Considering the pace of development, particulary in the regulatory environment, over the last months it is then surprising to see such an important document making only minor updates and completely omitting any information relating to some of the heavier events and debates, such as the Auction of the silk road BitcoinsPittsburgh planning to accept digital currencies, the document about Bitcoin regulation internationally, the current Discussions about NY regulation and current information about the Federal Reserves Bitcoin Policy.

    In fact, the update seems to consist only of statistical updates about prices and market caps and minor changes such as updating the list of current exchanges and a short one-sentence addition about the bankrupty of Mt Gox.

    With truly big companies such as Dell starting to accept bitcoin and a large quantity of smaller companies getting started around bitcoin the amount of people who is working with companies that has a relation to bitcoin should probably be significant, yet there is no information in the article about the number jobs that will get affected by regulatory decisions.

    Proper and good information is the basis of sound decisions and while this document is a decent primer to the technology behind bitcoin and the current tax and anti-money-laundering regulation there is a clear lack of information regarding the social and financial developments as well as informtion on the environmental aspects of handling money.


    Brian Cohen will be receiving 10% of LTBcoin disbursements for this article for his research leading up to the finding of the updated article. Read More
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    MasterCard Files Bitcoin Patent Application with United States Patent and Trademark Office

    June 30th, 2014 by Brian Cohen
    On June 19th, 2014, the United States Patent and Trademark Office (USPTO) published Mastercard International Incorporated’s patent application 20140172633 (13/829421), “Payment Interchange For Use With Global Shopping Cart.”  The application was filed with USPTO on March 14th, 2013. Brian Cohen breaks this devloping story.
     
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    Winklevoss Bitcoin ETF May Not be Redeemable in Bitcoins for Individual Investors

    July 10th, 2013 by Brian Cohen
    By now you must have heard that the the Winklevoss Twins are bringing Bitcoin to Wall Street.  If you need to get up to speed, read  Nathaniel Popper And Peter Lattman’s piece for Dealb%k over at the New York Times “Winklevoss Twins Plan First Fund for Bitcoins.”  And if you want to read the fine print, here is the S-1 filing with the Securities and Exchange Commission for the Winklevoss Bitcoin Trust ETF (Exchange Traded Fund). Read More
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    Users Bitcoins Seized by DEA

    June 23rd, 2013 by Brian Cohen

    The Drug Enforcement Administration posted an Official Notification that Bitcoin (i.e. property) belonging to Eric Daniel Hughes was seized for forfeiture pursuant to 21 U.S.C.

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