Bitcoin Forum

Mark Warden, who is running for re-election as a New Hampshire State Representative, has been having strategy meetings about the Bitcoin contributions together with his team. I’m posting this here on behalf of his campaign.

Thanks to the enthusiastic support of the Bitcoin community, the campaign has received over 100 BTC in contributions. This has now become an issue of public interest that the New Hampshire authorities will have to address. We think that's a good thing for Bitcoin.

That being said, as etotheipi and others have pointed out, there are very strict State and Federal campaign finance laws that we must follow. The relevant laws here prohibit the following:

1. Contributing to the campaign on behalf of another individual.
2. Accepting an anonymous contribution of any amount.
3. Accepting any foreign contribution. Contributor must be a US citizen or a US resident.
4. Accepting contributions exceeding 1,000 USD, in aggregate, from any individual.

In order to fully comply with these laws, pending advice from the New Hampshire authorities, Mark has decided on the following course of action:

1. Since most of the contributions to date have been anonymous, all previous contributions will be returned to the original contributing address on Monday, August 20th (today). Important: If you have contributed to the campaign and would not like us to send the funds back to the originating address (for instance, if you have a web wallet), please write us immediately at mark@markwarden.com.

2. If you are a US citizen or resident and would like to contribute no more than 1,000 USD of Bitcoins, we would be honored to accept your contribution. To comply with State and Federal laws, we will have to ask you for your full name and address. For now, please write the campaign at mark@markwarden.com. If you are contributing more than $100 of Bitcoins at current market price, please include your employer name and address and your job title. We hope to get the automated system up soon.

We see this as a small but significant step, establishing the legality of accepting Bitcoins as political contributions. In doing so, we believe it is in everybody's best interest if we go above and beyond the call of duty and ensure that no one can question our transparency and adherence to the letter and spirit of the law.

We apologize for the intrusion into your privacy, but this is the only way we can legally accept contributions. If you wish to not disclose your name and address, there are many other worthy causes, one of which is the New Hampshire Liberty Alliance (http://www.nhliberty.org/) which will use your contributions to fight for freedom of money in New Hampshire. If you have any questions, please PM me or contact the Mark Warden campaign.

It's not cool to return to sending address without stating you might do it upfront.

These people didn't want to donate to a random Gox address.

Thanks, FreeMoney. I was hoping for this kind of feedback.

We haven't sent any money back yet, and that's why we're posting here in order to try and get all the coins back to the right people. We're certainly open to other solutions, but we have to send the money back somehow.

Can you post all the donation addresses used so I can search my transaction history? There was only one or two, right?

They should consider using the service from BitPay.

At the time we collect the donation, we can also collect any Name, Address, email address, phone number, etc that the donor requires.  That information is provided on the receipt to the donor, and on the Account Summary for the recipient.  We have been doing this for about a year now.

https://bit-pay.com/charities.html (https://bit-pay.com/charities.html)

Great question! There were two donation addresses. They are:

1B39L3wqnbVpRa9oHMWY2F6FsZJJAgJQX6
1GYKza1DDdBFTwHD1Hr1hYLd5csRGDvqVZ


I'm not the web master, but this was definitely brought up as an option, and I'll bring it up again.

May I suggest that the money donated thus far sits for a week and allows people to reclaim their balances to a BTC address they specified, with the remaining sum going towards advertising Bitcoin through a trusted third party.

The rules regarding campaign donation was established before you started accepting bitcoins.

Bitcoins cannot always just be easily returned, the sender may have used a one-time address ?

The problem is easily solved though.

1. Write on your web page that all donations will be forwarded to the Bitcoin 100 (http://bitcoin100.org/) unless the donator e-mails you stating the details of the transaction and giving his/her private details.

That way you'd comply with the current law AND contribute to charity.

Can companies contribute more than 1000 USD, is that limit only for individuals ?

Probably the approach necessary will be to have anyone that wishes to have the funds refunded send to you a signed message proving they truly are the owner of that address.  The bitcoin-qt client suports this -- you simply pick one of the adresses that the transaction was from and do Sign Message.  Anyone can then verify.  And if they do that, you might as well just ask them for identity and just keep the payment if that's provided.

For any donations you do not get a refund requrest from then should NOT be returned, as is described above -- many refunds will not likely go back to the intended recipient (the person that sent the funds in the first place).

The options for those unclaimed funds might include donating them to some charitable or apolitical purpose then.  But returning them to the sender's address, without that sender verifying ownership, will cause a number of people to become surprised with the free bitcoins that land in their wallet, and the rest of the coins will be commandeered by the EWallet operators as they have no intended recipient.

Just a thought - at this moment bitcoins are not recognized and regulated by the government as a currency. Unless the campaign fund converts them to USD, no laws can be violated. It's just digitally signed messages stored in a public ledger. If anyone claims laws have been violated, they are recognizing bitcoins as currency, or at least a commodity. On a related note, how are non-monetary donations treated by the state and federal authorities? Can I donate an oil painting? Can Mark Warden sell it afterwards and use the proceeds in the campaign fund? Whose name, address, and citizenship are then taken into account - mine, yours, or the buyer's?

Good points, Stephen. I'm going to talk with Mark, as it's now apparent that the coins can't just be returned the originating addresses. The signing is a great idea, too.


The rules apply to anything of value that is contributed to the campaign, so I think it's pretty clear that they apply to the Bitcoins received.

I'm no lawyer but I would be shocked if non-monetary donations weren't regulated in the same way as monetary ones. Otherwise, someone could donate a yacht or heck even gold bars to a campaign.

What good are they to him if they don't convert USD?

VOTE FOR MEEE I HAZ BITCOINZ!

Just because you send the coins back to the address they came from is not equivalent to returning them to their owner...as others have pointed out, if you withdrew from your brokerage to the campaign address, sending it back to the broker doesn't truly reverse the transaction.

I think you should ask Mark what he would do if the law commanded him to fly to Jupiter every morning. Sometimes laws make no sense or are impossible or silly or wrong to follow. You can either keep your head down or fight it and he doesn't seem inclined to keep his head down. So (and it doesn't impact me at all so take it for what it is worth) it's time to fight, leave the address, people will broadcast whatever tx they want to the network and there is nothing you can do about it. A fight about this would be great imo, finally politicians talking (probably nonsensically still) about something interesting.

If the law really commands that you can't accept bitcoin donations without gathering identity data then you have to be careful never to associate yourself with a bitcoin address or else risk being donated to against your will and have no ability to return or decline them.

Incidentally, the original thread with the notice that donations were being accepted:

 - http://bitcointalk.org/index.php?topic=99968.0

I would suggest just returning to a sender address. It's not a good idea for people to be using large shared wallets longer term, not only for these reasons.

Guys,

I just want to repeat the advice that I gave Mark via email, because it appears that there is a disconnect about returning funds.  I believe it is absolutely critical that:

(1) Funds be returned to exactly one of the addresses it was received from
(2) A large warning is posted on the donation page, notifying that that is the policy and no exceptions will be made

This is in Mark's best interest.  There are two serious issues with returning to different addresses:

(1) With addresses being semi-anonymous, returning to a different address looks suspicious.  It could have been Mark claiming to return the funds to someone, but actually siphoning them off to a secret address he created for himself.  I'm not, in any way, accusing Mark of doing this.  But there's no way to prove that he didn't do that.  The only way for an oversight committee to know for sure that the coins were actually returned is if it goes back to the same address

(2) There's all sorts of money-laundering issues with returning to a different address.  I know it doesn't make much sense for someone to do it, but theoretically someone wants to pay their drug dealer $10k BTC, so they make an invalid donation to Mark's campaign, then has Mark return it to his drug dealer's address.  Mark was now unknowingly an accomplice.  While the possibility of that happening is pretty low, I think there's actually a greater risk of someone setting up something like this in order to blackmail and/or discredit Mark.  

It's just not worth the risk.

If someone donates from an online service, then I still recommend it be returned to the sender, and Mark can send that person the TxID of the return transaction.  Then the user/donor can go sort it out with the online service, on their own time.  They will recover the funds, it just might take some work. EDIT:  Mark's campaign can even provide a signed message to be given to the service that says "Transaction with ID: ... is a return transaction for the following user: ...".   This will make it much easier for the user to recover their funds.

Thanks for all the help, etotheipi, it's been invaluable. My understanding is that all funds have been returned to the originating addresses. We're still working on integrating a better system into the contribution page, but that should be up very soon.

It seemed there was a lot of dissent in this thread about that advice.  I wanted to make sure that dissenters understood the basis of that advice, and either confirm it or make further recommendations about how to address the concerns I put forward.  These are legitimate concerns, and I think it's critical that it's done 100% right, for this first swing into the open political scene ("right", from a legal and accountability standpoint).  I'd rather some Bitcoiners be inconvenienced, than have Mark accused of shady campaign financing practices.  Obviously we'd like to avoid both, if possible :)

While I think signing messages with a particular address for the purposes of identifying one's self is a great idea in concept, I don't see how it's currently possible (unless everyone was using Armory).  Last I saw, the message-signing interface in Bitcoin-Qt was weak -- it's not easy to communicate exactly what you were signing, and it's not easy to verify a signature.  The person can send you the message they signed, but it won't work if they accidentally added an extra space at the end, or forgot a punctuation mark.  I made progress on this by creating "signature blocks" (https://bitcointalk.org/index.php?topic=70911.msg813815#msg813815) in Armory, but it isn't compatible with any other program.  I was waiting for Bitcoin-Qt upgrade theirs so I could help design a cross-client implementation.

However, I still believe this is a valid, useful use-case, so I'd love it if the core devs would make this feature easier to use, and then I would make it compatible.  The specific recommendation I was making was that you not only sign a message, but you have a signature block that clearly identifies the signature and the data that was signed.  In Armory, it looks like this:


You only have to copy that block into the Armory message signing dialog and click "Verify" and it will pop up a window like this (http://dl.dropbox.com/u/1139081/dlgSigBlock.png).  I pushed for this a long time when I first made it, but there was little interest in it.  Maybe this is an excellent time for bitcoin-qt to implement something like it so that high-profile use cases (like campaign financing) can leverage it.

Please post comments&objections to the return-to-sender advice I posted (https://bitcointalk.org/index.php?topic=102022.msg1124185#msg1124185) (at the end of the first page of this thread).  I think it is a really important concept to iron out.

But I am not just bumping this thread, I wanted to propose a top-level CONOPs (concept of operations) I proposed to Mark's campaign via email.  Additionally, I have recommended my own program (Armory) for this recommendation, because no other program currently supports deterministic wallets and watching-only wallets and has an intuitive user interface for them (am I wrong?).   I'd appreciate if some other Armory users provided some independent feedback about Armory, so this doesn't look like just a shameless plug for my own software.  In reality, this will become the norm in the far future, but Armory can uniquely enable it right now.

• (1) Arbitrary political campaign creates a deterministic wallet, offline.
• (2) Campaign creates a watching-only copy of the wallet, registers it with an oversight committee
• (3) Potential donor accesses the campaign website, commits their personal details, and gets a donation address
• (4) Donor can put the address into the website of the oversight committee, which will confirm it is one of the officially-registered addresses
• • (4a) If it's not, the donor can report the campaign for shady campaign financing practices
• (5) Donor sends money to received address
• • (5a) Donor sends the final tx ID and amount to the campaign website/email (maybe not necessary, since the donation address was unique)
• (6) Once every X months, oversight committee aggregates the list of donations sent to that wallet, and requests the identifying information for each one (they have the watching-only wallet, so they can see every donation)
• (7) Campaign submits the appropriate documentation for each donor, or issues a return transaction back to the sending address for ones they can't identify

This process seems like it would not only satisfy the spirit of campaign financing laws, but might actually improve transparency.  Donors can verify that the address they are donating to is a monitored address, and the oversight committee can see every donation without actually having spendable access to it.  Even better, donors don't need to use Armory, only the campaign and the oversight committee.

Actually this kind of features of bitcoin scares me a bit. Some here see it as a mean for tax evasion but with monitoring committees it can lead to only monitored funds to count as bitcoin.

How does a politician proof he is not accepting illegal donations? You showed it. Watching only wallet at the authorities.
How does a company proof it is paying its taxes? Just the same way. Watching only wallet at the authorities.
How is a private person proofing to pay taxes? Just the same way. Watching only wallet at the authorities.
Next step would be to accept donations to the US politicians only from wallets registered with the US authorities because only these are clean coins?
…

Yes I like it for the political campaigns but you see what I'm scared of.

My guess is that it's going to be prohibitively difficult cost-wise for any government to do that.
By the time they recognize Bitcoin as a currency (they have to do it if they want to regulate it) the authorities won't have enough coins to hire needed amount of people to monitor everything.
Right now they can print nice green papers out of their a$$ and pay CIA, FBI, NSA and others to spy on you.
With Bitcoin they will have to come up with a better way to spend their precious coins.
Libertarians will be the ultimate financial power in the world due to Bitcoin early adoption, so no worries here.
Fasten your seat belt and enjoy the ride!

//Inspired by: http://www.youtube.com/watch?v=0XxWGBjGMco

I think this is brilliant.  I'm an Armory user, but I don't know what feedback to offer other than that I've created several offline wallets with watching-only properties on other systems and I absolutely love the functionality of it.

Don't let the fear interfere with clear thinking. Things you are describing are pretty much already a norm with usd transactions. The awesomeness of Bitcoin is in its openness and symmetry of power: anyone can read and write the blockchain. You could vote for those who will instate watching-only wallets for government accounts. The public could then keep representatives accountable for how public funds are managed. Things that scare you could easily be turned around and used as a weapon against corruption and abuse of power. Transparency is already there today, but only as a one-way mirror, a mass-surveillance Panopticon. I see Bitcoin, Wikileaks, and similar phenomena as tools of restoring the balance of power, making transparency work both ways.

I'm surprised to see MikeHearn and etotheipi saying to send back to sending addresses.

I would be really upset if I used my bitcoins to donate to Mark and they ended up in MtGox or instawallet's slush fund.

There isn't a way to safely return bitcoins and I don't think Mark blasting off what people gave him to who knows where in order to maybe satisfy potential bureaucrats complaints is terrible. Worse than never accepting them at all by long shot.

How about this:

Bureaucrat says: Mark we see what you did, pretending to return all of those coins by sending them to the sending address recorded in the blockchain, now you need to prove to us that you don't own any accounts which are attached to those receiving addresses. For all we know you made deposits to 1000 instawallets and 5000 MtGox deposit addresses before announcing that you were accepting bitcoin donations. You fully knew that some people would be paying from those popular wallet services and chances are that some of the coins would be paid from accounts with addresses associated to your accounts. So you 'returned' the coins to some of your own addresses. It's clever Mark, but not clever enough. The possibility that you retained any of those coins invalidates your campaign for breach of XXXX regulation.

Mark: .......

I don't understand.  Those sending addresses are not black holes.  The coins are not lost.  It just has to be sorted out with Gox customer support, etc.  Having a transaction ID and a signed message from Mark should be enough.

Plus, this is a condition that shouldn't happen -- there should be a huge warning on the donation page about it.  If donors don't pay attention to the warning, then their punishment is dealing with Mt Gox support to recover the funds.

Perhaps for donations that happened so far, before people realized this, they can be returned via user-supplied address.  That would be justifiable as "growing pains" of figuring out this process -- especially because it's not a ton of money Mark has received so far.  However, future donations should follow this policy, and there should be some explicit warnings about it on the donation page.

Oh, I think I misunderstood you. You mean after he puts up a warning it is ok, I agree. Same as satoshi dice etc.

I was thinking about the situation where they didn't do that and want to get rid of the coins.

I know they aren't black holes, it could be an address assigned to another user (or Mark! as in my hypothetical) or an intermediate/cold storage address of the wallet provider.

Slightly different point also, you cannot in general assume that paying to an address is equal to paying a person unless they explicitly agree it will count as payment because they may have lost the private key or not be looking there anymore or sold it to someone in a foolhardy firtsbits collecting scheme.

Given the situation Mark is in it is impossible to return the coins to the senders, he's not accomplishing the desired undonating. But since he's only trying to convince bureaucrats who won't understand anything that comes with a sentiment of "I'm sorry I did something strange regarding money and I tried my best to undo it" will probably work unless they hate him.

sent 0.25 BTC and an email.

Good luck!

Update here:

New Hampshire Deputy Secretary of State Recognizes Bitcoin Contributions (https://bitcointalk.org/index.php?topic=104544.0)

Everything you mentioned is crazy corner cases.  It would be extremely rare that someone would lose their private key or somehow lose it in a scam.  Even things like Casascius physical BTC are usually swept to your wallet (or imported) before you can send it on.  

That's not to say that it doesn't happen, but we shouldn't let extreme corner cases dominate what is otherwise a perfect solution.  Put up the appropriate warnings, and if the donor absoloutely insists that the sending coins back to the addresses would result in permanent loss or theft, Mark can donate them to charity.

Agreed 100%.

UPDATE:

Mark Warden's new, totally-compliant, Bitcoin contributions page just launched:

http://www.markwarden.com/page/bitcoin-donation

https://i.imgur.com/DowTg.png

Great job!  This is a model that other candidates can follow.  If you support alternative currencies, and you are running for office, you can accept bitcoin and be compliant with campaign finance laws!

This is great. Bitcoin IS suitable for just about anything, for some cases it just requires a service to help make it happen in the right way.

If it needs intermediaries like bitpay to be "totally-compliant", then bitcoin failed. Bitpay deserves honor for all they are doing for bitcoin and there are many businesses that I guess are better off using their service for now but if you really need this middle man to do a donation (hey, here there is no danger of double-spends or volatility to eliminate.) then I can't cheer for joy.

Edit: I get an "internal server error" when i middle-mouse-click aka open in new window the "Bitcoin order now" buttons.

Also it's slightly confusing that the shopping cart accumulates my several clicks. When I clicked the $10 button and it said "approximately $150" I checked at mtgloxlive if BTC just exploded before I realized my shopping cart was full with other donations. The cart content is color:#666; font-size:.9em;. Why? Why not show the customer what he's buying with #0 and 1.3em?

Baby steps...

He could certainly do it without Bitpay but it would require setting up a form and setting up a Bitcoin wallet etc etc.

Some people don't understand that Bitpay will be here, and it will be big, even if Bitcoin becomes a universal currency. It's a service industry that will have demand even if exchanging bitcoins to fiat no longer has! Exchanges will experience less demand than Bitpay in the very long term if Bitcoin really succeeds.

Currency risk is not the main reason to use Bitpay, I'd say convenience is the bigger reason. That will continue to be the case because sometimes outsourcing simply is better even if it could be done in a do-it-yourself way.

Bitcoin doesn't require that people forgo third-parties to be successful, it only enables it.  If Bitcoin users, especially ones with high legal liabilities (such as political candidates that can be ruined by the appearance of shady financing practices) want to pay third parties to help them do it right, then let them do it!  The important part is that they have a choice to do it without third parties.  And other candidates can do it.  Don't call it a failure just because someone was willing to pay a fee to simplify their own operations.

+1

That has been said many times but it requires repeating. Bitcoin by itself will never be convenient enough for everyone. Some organizations and some people will want to use third party services for convenience and other reasons. Bitcoin however enables people to not use third parties if they want to do it themselves. It's a choice that really hasn't existed before.

Very good points.

I would say that at least half of our merchants have tried the "do-it-yourself" way to accept bitcoins before they came to BitPay.   

These businesses are wiling to take a chance on a new technology.

If you want more businesses to accept bitcoin, you have to make it easy for them.  Business owners want to spend time growing their business, not futzing around with learning and automating bitcoind and all the other nuances related to bitcoin.  They are more than willing to pay an expert to manage that for them.

An in-depth explanation of how Rep. Mark Warden accepts bitcoins, and how other politicians can do the same, is posted on our new blog:

http://www.howtoacceptbitcoin.com/ (http://www.howtoacceptbitcoin.com/)

Max Keiser's website mentions Rep Mark Warden and Bitcoin

http://maxkeiser.com/ (http://maxkeiser.com/)