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4401  Economy / Services / Re: [0.5 BTC Bounty!] Design PrimeDice's new signature advertising ad! on: April 03, 2014, 12:43:12 PM
I am making one Smiley

4402  Economy / Gambling / Re: Cloudbet.com - 100 NEW GAMES! bitcoin sportsbook and live dealer casino on: April 03, 2014, 12:35:13 PM
Cloudbet have rly nice affiliate system. But today i got 2 referrals and they did not shown .

Also would be nice if we can see results on our bet slips , on dashboard, its says only pending or completed , doesn't show results of games so i don't know what i missed.

Hi MICRO,

Can you please check your affiliate panel again? It may be that you were looking at the previous month's stats. If you are still seeing issues, please can you send us a screenshot via email to support@cloudbet.com

As for results, this is something we are working on, but it will take some time. I'll keep you posted!

Cheers,
Cloudbet

Yeah it won't switch to next month, this is what i see:
4403  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 11:59:12 PM
Anyways i am out of here coz, here nobody will find pd in my sig Cheesy hahaha.... See ya guys .
4404  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 11:56:49 PM
Quote
I can't see the rates increasing much more
Well with BTC slipping and more campaigns starting, I think we may see 0.002+ in the near future.

I don't think they will try to adjust rates based on price of bitcoin. Not even sure how many people actually find pd or any other casino by clicking on signature. But they know best, if its worth it then they pay it . Smiley
Apparently 4 people have signed up for the casino I'm advertising in the last two days. No bets so far though..

That's my point Cheesy . Not many people actually click links in signatures . Cheesy

New people click on them trust me, I had clicked about 6 signatures already on this forum.  It works  

I agree, I had 100 referrals in three days on PrimeDice. Shame I got no referral bonus for it but it's nice to know that people do click it. Hope they didn't lose too much money if they did gamble though!
Well if that's so, then i guess they will keep this campaigns Cheesy . So more for us Cheesy
4405  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 11:51:16 PM
Quote
I can't see the rates increasing much more
Well with BTC slipping and more campaigns starting, I think we may see 0.002+ in the near future.

I don't think they will try to adjust rates based on price of bitcoin. Not even sure how many people actually find pd or any other casino by clicking on signature. But they know best, if its worth it then they pay it . Smiley
Apparently 4 people have signed up for the casino I'm advertising in the last two days. No bets so far though..

That's my point Cheesy . Not many people actually click links in signatures . Cheesy
4406  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 11:49:44 PM
Quote
I can't see the rates increasing much more
Well with BTC slipping and more campaigns starting, I think we may see 0.002+ in the near future.

As long as BTC price keeps going down, the Ad campaigns will have to continue to adjust rate structures.

Same as if BTC price skyrockets, I'm sure they'd lower them a bit.

Why would they if lets say pd making 100 btc per day now and continue getting it at 1btc= 1000$ they don't need to adjust , i hate to look at btc compared to $ or any other , we need to look at it as separate currency.
4407  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 11:46:32 PM
Quote
I can't see the rates increasing much more
Well with BTC slipping and more campaigns starting, I think we may see 0.002+ in the near future.

I don't think they will try to adjust rates based on price of bitcoin. Not even sure how many people actually find pd or any other casino by clicking on signature. But they know best, if its worth it then they pay it . Smiley
4408  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 02, 2014, 11:20:34 PM
Online Payment Provider PayStand Exits Beta, Announces Bitcoin Support
Pete Rizzo (@pete_rizzo_) | Published on April 2, 2014 at 17:25 BST | News, Startups, US & Canada

California-based online payment processor PayStand has launched out of private beta to provide US-based websites and mobile applications another way to accept payments such e-checks, credit cards and bitcoin.

With the announcement, PayStand also revealed $1m in new investment as part of its initial seed-funding round.

Founded in 2009, PayStand aims to be a multi-payment gateway that eliminates merchant transaction fees, in part by supporting digital currency acceptance.

Said PayStand in its official announcement:

“PayStand is the first and only payments service to easily allow bitcoin and other digital [currencies] as well as more traditional payments all at the same time and eliminates merchant transaction fees with a unique ‘payments-as-a-service’ model.”

The Santa Cruz startup boasts an easy setup process and flexible commitments for merchants who want to test the waters with something new. The company notes its service “does not require any extra hosting accounts, payment processors, merchant accounts, programming [or] order management software”.

Notably, the news comes as more major payments tech startups are embracing bitcoin.

Within the last two weeks, web and mobile payments provider Stripe and mobile point-of-sale (mPOS) industry leader Square have both revealed new bitcoin initiatives.

Digital currency roots

Jeremy Almond, PayStand’s CEO, has indicated that the idea for his company grew out of his own investing and experiments with digital currencies.

However, although he was enthusiastic about the potential of bitcoin and its alternatives, he chose to incorporate additional services into PayStand, believing standalone solutions would not be widely adopted.

Even so, Almond is understanding of the big-picture implications of digital currencies, telling TechCrunch:

“We believe that the process of money movement is going through a massive evolution, and our goal is to support this broadly.”

How PayStand works

With PayStand, online merchants pay a monthly fee for the payment software, thereby avoiding transaction fees associated with its more traditional payment options. Merchants do not pay any added costs on bitcoin transactions.

Likewise, consumers enjoy a one-click payment process, meaning they don’t experience the added friction imposed by passwords and other security methods.

Unlike merchant processors such as BitPay or Coinbase, however, PayStand users who want to accept bitcoin need to first set up a bitcoin wallet address. Merchants can then have bitcoin deposited to their personal wallets or sent to an exchange to be converted into fiat currencies, reports say.

Perhaps most notably, the company states on its website that bitcoin acceptance may be part of further services in digital currency space, as it calls bitcoin just “the first digital currency in line for our eCash payment option”.
4409  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 02, 2014, 11:19:45 PM
Bank of Montreal Open to Rekindling Partnerships with Bitcoin Businesses
Pete Rizzo (@pete_rizzo_) | Published on April 2, 2014 at 21:49 BST | News

The Bank of Montreal, one of Canada’s “Big Five” banks and the fourth-largest in the country, issued new statements on 1st April suggesting that it may be open to working with bitcoin businesses again, provided it receives regulatory clarity from the nation’s lawmakers.

The comments were made by CEO Bill Downe as part of an interview at Bank of Montreal’s annual general meeting in Toronto this week.

Speaking to his company, Downe said:

“If you wanted a Swiss franc transaction or a Japanese yen transaction or a U.S. dollar transaction, we can do that for you. If bitcoin [can be] a reliable medium of exchange, then at that point in the future, we would be able to [conduct business] with bitcoin.”

The comments are particularly noteworthy, however, given that Bank of Montreal abruptly cut ties with Vancouver-based bitcoin exchange Cointrader earlier this February.

This decision, according to Cointrader, was part of a larger move by Bank of Montreal to end relations with all of the bitcoin businesses it served. At the time, Bank of Montreal did not comment publicly as to whether it had plans to freeze all of its bitcoin customer accounts.

Past bitcoin relationships

While the news has been positioned as if Bank of Montreal is looking to perhaps enter the bitcoin market, talks with major Canadian bitcoin businesses reveal it already has a history of working in the sector, one that changed earlier this year amid increasingly harsh government rhetoric.

A spokesperson for Toronto-based bitcoin exchange Vault of Satoshi told CoinDesk that it is no longer working with Bank of Montreal, though it said the company was “nothing short of fantastic” while they were in business together.

Said the representative:

“While we were working with the Bank of Montreal, they changed their stance on Bitcoin related-business recently and decided to halt their operations in that field until there is further regulation; not much unlike our decision to temporarily withdraw our US operations.”

A representative from Cointrader indicated that the recent statements from Bank of Montreal’s CEO were consistent with responses it received from the banking provider.

“They wanted to wait for clarification on regulation. But, the problem is, how long does that take? It could take years.”

He added that he believes Bank of Montreal is no longer working with bitcoin businesses, but that at one point, it was the go-to bank for such services.

Regulation in Canada

Notably, the news follows a report last week from The Ottawa Citizen, which stated that the latest version of Canada’s 2014 Federal Budget Implementation Act included new directives regarding digital currencies.

The budget act, if passed would require “dealers of virtual currencies, such as Bitcoin, to report suspicious transactions, or those over $10,000, to a government watchdog”.

Canada has been rumoured to be working on regulating digital currencies, however, Finance Minister Jim Flaherty, the official who was perhaps most active publicly on this front, recently resigned on 18th March.

Promising signs

Despite the tough talk on the regulatory front, Canada’s digital currency community has seen some encouraging signs recently that may signal less aggressive regulation may be forthcoming.

For example, on 26th March, Vault of Satoshi received its full money services license.

Further, the local industry is showing it has been able to innovate even in the face of challenges.

Vault of Satoshi announced its coin-to-coin trading system on 2nd April, which allows users to trade altcoins directly without first converting to LTC or BTC, while PocketPOS launched a new merchant-friendly point-of-sale tool meant to increase merchant adoption of bitcoin.
4410  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 02, 2014, 11:19:11 PM
Congressional Hearing Explores Costs, Benefits Of Small Business Bitcoin Use
Stan Higgins | Published on April 2, 2014 at 22:32 BST | Analysis, News, Regulation, US & Canada

The US House of Representatives committee on small business held a hearing on 2nd April to discuss the growing use of bitcoin by the country’s small business owners (SMBs), and the pros and cons that using this technology as a payment option offers the demographic.

Entitled “Bitcoin: Examining the Benefits and Risks for Small Business”, a panel of experts spoke about the benefits and costs of the use of bitcoin by SMBs while also touching on hot topics like Silk Road and the recent IRS decision on the tax treatment of digital currencies.

Committee Chairman Sam Graves noted in his opening remarks that a great deal of uncertainty remains for small businesses thinking about accepting bitcoin as a form of payment, but that the hearing was meant to increase information about the topic.

Explained Graves:

“We hope that by providing information about bitcoin, small businesses will be in a better position to know whether adopting bitcoin as a payment system might be a way for small businesses to gain more customers. This hearing will also inform [congress] Members as we consider implications of policies affecting the use of virtual currency.”

In addition, he cited the collapse of Japan-based bitcoin exchange Mt. Gox and the prevalence of digital black markets which accept bitcoin as barriers for widespread adoption.

Overall, Graves struck a cautious tone for the hearing that was echoed by its panel of experts.

Bitcoin’s benefits

Jerry Brito, a senior research fellow at the Mercatus Center at George Mason University, suggested that the use of bitcoins can help SMBs avoid certain types of payment fraud that can result in significant repercussions, including the loss of access to card networks. Further, he said that businesses can tap into potential new markets simply because they can accept transactions from regions that are not included in current global payment networks.

Still, Brito noted that volatility remains a key barrier to adoption, but that he believes the technical aspects of bitcoin do not lend themselves to the currency’s well-known price swings.

Said Brito:

“There is nothing inherent in bitcoin’s design that makes it naturally volatile. Its volatility is likely attributable to the fact that it is a new currency, still in the process of discovering its stable price. Additionally, as a nascent currency, it is very thinly traded and as a result a single large-enough trade can affect the exchange price substantially.”

Bitcoin’s risks

Capital markets and risk management expert Mark T. Williams of Boston University’s Finance Department pointed out that bitcoin’s position as a payment system – as well as its price – is determined largely by current users.

Should these parties decide to move away accepting virtual currency, “bitcoin [would] become worthless,” Williams said.

Williams also said that, compared to other risky investments worldwide, bitcoin poses a much bigger threat to SMBs who lack the capital or infrastructure to withstand potential losses.

“It could be argued that small businesses that blindly accept bitcoin are not actually in commerce but are in the high-risk speculative trading business.”

Williams, known for his often inflammatory critiques of bitcoin, went on to say that bitcoin is perhaps better used by Wall Street trading firms that have experienced staffs that can handle the associated risk.

IRS ruling

Later in the hearing, both Williams and Brito voiced support for the IRS decision to designate virtual currencies as a type of property for tax treatment.

Brito noted that the IRS looked at the characteristics of bitcoin and judged it as more of a commodity compared to a currency. Looking ahead, he suggested that Congress and federal regulators could create a special tax category for virtual currencies that takes into consideration the extraordinary aspects of bitcoin.

Adam White, director of business development and sales at Coinbase, and L. Michael Couvillion, associate professor of economics at Plymouth State University’s College of Business Administration, also addressed the committee.
4411  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 02, 2014, 11:17:50 PM
Chinese Bitcoin Exchanges OKCoin, FXBTC Report New Deposit Freezes
Pete Rizzo (@pete_rizzo_) | Published on April 2, 2014 at 20:27 BST | Analysis, Asia, Exchanges, News, Prices, Regulation

Following on the heels of the news that China-based bitcoin exchange BTC38 would suspend fiat-to-digital currency trading, rival China-based exchanges OKCoin and FXBTC have received official notices from financial partners notifying them that certain accounts will be terminated.

The new announcements are the latest indication that China’s central bank, the People’s Bank of China (PBOC), may be following through on its decision to more actively enforce prior rulings related to how domestic financial service providers can interact with the bitcoin exchanges.

For example, while OKCoin was contacted by its third-party processor, FXBTC has been contacted by commercial banking providers.

China previously banned third-party payment services from dealing with bitcoin exchanges this past December. However, its domestic bitcoin exchanges had found a workaround for this issue by accepting payment into corporate accounts.

A new report from The Financial Times has suggested that the PBOC is now looking to close this loophole.

Notifications received

OKCoin revealed via its website that it had been contacted by one of its third-party payment processors, and that as a result, it will stop servicing deposits via prepaid card. Debit cards and yuan withdrawals, however, are not affected.

FXBTC’s situation at press time was perhaps more dire. It posted an emergency notification on its website that noted that it has received word from commercial banking partners who are looking to terminate certain accounts.

FXBTC indicated that it would stop debit card deposits as of 3rd April, and temporarily halt withdrawals after Sunday, 6th April. As of press time, however, it said its third-party processing channel – operated by Tencent’s TenPay – was still active.

Huobi reported that it had not received official notification that any of its accounts were affected.

Still no official notice

Together with the day’s earlier announcement from BTC38, the reports suggest that the PBOC may be pressuring the country’s commercial banks and payment companies to close bitcoin trading accounts.

Earlier reports had suggested that all accounts would need to be shut down by 15th April. However, the PBOC has yet to make an official announcement regarding any changes in policy.

This official notice may be unlikely, however, as BTC China CEO Bobby Lee has indicated that the PBOC is simply following a “stricter interpretation of the written rules” regarding bitcoin and digital currencies.

Community reaction and prices implications

Reaction to the news on reddit was still skeptical, with many indicating that the announcements don’t actually confirm that the PBOC will be looking to enforce the broad crackdown that has been suggested.

As of press time, the price of bitcoin on the CoinDesk USD Bitcoin Price Index (BPI) was down 8.41% on the news, having fallen $40 from the day’s opening total of $478.

Screen Shot 2014-04-02 at 2.33.34 PM

Prices in China were affected similarly, according to the CoinDesk CNY BPI, which at press time was down 7.25% from the day’s open of ¥2,861 at ¥2,653.74.
4412  Economy / Services / Re: [PrimeDice] [Highest Paid Signature] Earn up to 2.4 BTC/Month by Posting on: April 02, 2014, 02:24:30 PM
Guys stop spamming this thread !!! Cheesy
4413  Economy / Gambling / Re: PrimeDice.com | 500M+ Bets | 300k+ BTC Wagered | Free BTC | 1% Edge | Instant on: April 02, 2014, 01:34:40 PM
So what if I have a total balance a 1mil coins in primedice? I know there's a tiny chance to do it but will you be able to pay out within 15 minutes as well?

Our current max profit on win is 20 Bitcoins. If we lost all our Bitcoins, except 10, our max profit will change to 10 instead of 10. You can't win more than the amount of Bitcoin PD currently holds.

So if the max profit is 10 BTC and I win 10 BTC and another player win 5 BTC.. then your 5 BTC short right? Then the winnings is above PD's holdings.
How do you manage this scenario?

That just won't happen , pd have only on house edge about 3500 btc, with this max, that will be nearly impossible to win and i guess his bank is much bigger, so i don't see point in talking about that scenario that simply won't happen Smiley
4414  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 02, 2014, 12:11:17 PM
Judge Orders Mark Karpeles to Submit to Questioning in US
Jon Southurst (@southtopia) | Published on April 2, 2014 at 03:19 BST | Companies, Exchanges, Law, Mt. Gox, News

Mark Karpeles, the CEO of troubled Japan-based bitcoin exchange Mt. Gox, must travel to Dallas, Texas, this month to take part in his formal deposition, a form of sworn testimony that will lay the groundwork for his future defense.

Karpeles had previously suggested that the deposition take place in Taipei, Taiwan, though this motion was strongly opposed by lawyers representing US-based former exchange users.

Further, Karpeles will have compelling reason to make the trip, as the judge suggested that the journey will be necessary if he wants an extension of the company’s bankruptcy protection in the US.

A Reuters report today quoted US Bankruptcy Judge Stacey Jernigan as saying:

“If he avails himself of this court, my God, he is going to get himself over here.”

More details

Under Chapter 15 of US bankruptcy law, protection from creditors is not granted or extended automatically. However, Mt. Gox KK, the company’s Japanese entity was granted an initial stay by the courts earlier this March. The stay has thus far prevented lawsuits from threatening this part of the company’s assets and shielded it from fact-finding.

That stay was not granted to Mt. Gox Inc., its US entity, Tibanne KK or Mark Karpeles personally.

A hearing is scheduled for 20th May to decide whether Mt. Gox deserves to continue with such protection, and courts are likely to view the matter less favorably if they don’t have Mt. Gox management’s full cooperation.

Karpeles will have to appear at the offices of Baker & McKenzie, the firm representing Mt. Gox both in the US and Japan, in Dallas on 17th April, according to Jernigan’s order.

Mt. Gox’s Chapter 15 bankruptcy was filed in Dallas, though depositions are informal and generally take place outside of a court.

A reluctant witness

To date, Karpeles has shown a strong reluctance to appear personally in the US since his once-dominant bitcoin exchange imploded in February, though he did allegedly meet with lawyers in the US around the time of Mt. Gox’s initial bankruptcy filing.

Karpeles had offered to hold the deposition in Taiwan instead, suggesting US representatives unable to question him there could use a video link instead.

The bankruptcy hearings are separate to Mt. Gox’s other legal problems in the US, such as Illinois resident Gregory Greene’s class action suit. Mt. Gox also wants to delay any US action until after its bankruptcy proceedings in Japan are completed.

Further, these cases are joined by its as-yet-unresolved dispute with former partner Coinlab, which dates back to early last year.

Losing patience

There was a hint of frustration in Jernigan’s words, particularly when Baker & McKenzie attorney John Mitchell said Mt. Gox may replace Karpeles as its ‘foreign representative’ in US bankruptcy court. “He filed the case,” she replied.

Mt. Gox has been fulfilling its local legal obligations and doing most of its communicating in Japanese first recently, but its largest customer base by far was the US.

Karpeles, who was born in France and lives in Japan, speaks English as a second language and may be unsettled at the prospect of facing questioning from a US court, or even angry US customers in person. He is, however, probably also the only person with any idea of what truly happened to Mt. Gox’s finances.

According to previous reports from company employees, who were all on short-term contracts, no-one outside management had any access to the Gox’s records and attempts to ask Karpeles to prove the company’s reserves were rebuffed.
4415  Economy / Gambling / Re: Cloudbet.com - 100 NEW GAMES! bitcoin sportsbook and live dealer casino on: April 02, 2014, 12:09:46 AM
Cloudbet have rly nice affiliate system. But today i got 2 referrals and they did not shown .

Also would be nice if we can see results on our bet slips , on dashboard, its says only pending or completed , doesn't show results of games so i don't know what i missed.
4416  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 01, 2014, 10:28:36 PM
Central Bank of Colombia Says ‘Bitcoin is Not a Currency’
Pete Rizzo (@pete_rizzo_) | Published on April 1, 2014 at 22:57 BST | News, Regulation

On Tuesday, 1st April, Banco Central de Colombia, the central bank of the South American nation, issued new statements regarding bitcoin, confirming that the digital currency is not considered a currency or a means of legal tender in the country.

The news comes roughly one week after the Superintendencia Financiera de Colombia (SFC), the government body with jurisdiction over the Colombian financial system, issued a ruling that domestic banks would be barred from holding, investing in or brokering bitcoin transactions.

Said the central bank, according to reports:

“The bitcoin is not a currency in Colombia and, therefore, not a means of payment of unlimited legal tender with a discharge power. Then there is no obligation to receive it as a means of fulfilling the obligations.”

The central bank also reiterated the SFC’s 26th March finding that bitcoin does not meet the definition of a currency because it is not backed by a central bank.

Colombia’s bitcoin discussions continue

Colombia has been increasingly active on matters relating to digital currencies in recent weeks, following the 20th March rumors that the SFC would move to ban bitcoin transactions altogether.

This report later turned out to be exaggerated, as Colombia issued guidance similar to that originally posed by China and Mexico, barring its banks from interacting with the sector.

Speaking to CoinDesk, members of the local Colombian digital currency community were optimistic at the time that this represented a first step in relations between regulators and local enthusiasts.

Community reaction

Roman Parra, CEO and founder of Colombia-based bitcoin buying and selling service Bitcoin Suramérica, confirmed the statements were a continuation of past guidance. However, Parra found them particularly troubling given that they represent what he considers a lack of interest from the government in developing or building the local bitcoin ecosystem.

Still, he notes, the question of whether bitcoin is money in Colombia does have an impact on local business.

According to Parra, as in much of the world, it’s still unclear how bitcoin transactions completed in Colombia should be treated for tax purposes.

Explained Parra:

“We are trying to find out the best way to handle this legal topic. At the present time we are acting like a commerce company.”

Bitcoin in South America

Research from BitLegal suggests that only a few South American governments have spoken out about bitcoin and digital currencies. Its records show Colombia. Brazil and Argentina have all issued guidance to their local communities.

Further research from the US Law Library of Congress indicates Chile has also issued formal statements.

However, even countries that haven’t addressed digital currencies, such as Venezuela, have seen a recent rise in bitcoin enthusiasm, suggesting more countries in the region may need to follow suit.
4417  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 01, 2014, 10:28:00 PM
Bitcoin User Files White House Petition to Amend Latest IRS Notice
Pete Rizzo (@pete_rizzo_) | Published on April 1, 2014 at 22:23 BST | News, Regulation, US & Canada

A petition to amend Internal Revenue Service (IRS) Notice 2014-2, the new guidance released on 25th March that announced digital currencies would be treated as property for tax purposes, has been filed on WhiteHouse.gov.

Managed by the presiding presidential administration, the official website of the White House allows for the filing of public petitions on all manner of subjects, from whether Election Day should be a designated holiday to whether Alaska should secede from the US and join Russia.

Petitions that cross a certain threshold of signatures then generally garner a White House response.

Filed on 28th March, the new petition argues that the IRS’s recent ruling on digital currencies is “overly burdensome,” and that by imposing capital gains on all transactions, the policy will hurt innovation in the sector. The positioning is not unlike the one voiced by major industry investors when defending against the prospect of new regulation earlier this year.

Reads the petition:

“This treatment of VC is overly burdensome as it will create onerous record-keeping issues and unnecessary costs that will stifle the development and advancement of this important technology.”

To date, the IRS ruling has garnered varying responses. Bitcoin Foundation director Jon Matonis has said that the classification affirms bitcoin’s status as digital gold, though others allege that the IRS notice will adversely affect many aspects of bitcoin ownership and use.

More details

Perhaps the biggest impact the ruling will have is on bitcoin’s role in payments, as each transaction will require capital gains reporting.

While even bitcoin’s detractors view its underlying technology as perhaps its biggest advantage, the guidance seems to discourage its use as a payment system, a fact that the petition acknowledges.

Reads the petition:

“Under this interpretation, when Bitcoin is spent, the owner will have the tenuous responsibility of calculating their capital gains or losses, as well as the Seller of the goods or services.”

Community response

The petition gained significant attention on Reddit this weekend, garnering nearly 200 comments from bitcoin users who greeted the initiative with varying amounts of enthusiasm. Many voiced uncertainty that the petition would be ultimately effective, while others took issue with what they considered the poor wording and limited argument of the petition itself. The petition was still circulating on social media as of 1st April.

Still, others like SecondMarket and Bitcoin Investment Trust CEO Barry Silbert suggest this ruling was the best possible outcome for the bitcoin community.

Speaking to CoinDesk, he acknowledged the ruling represents a short-term burden for the industry, but he says innovation will help bitcoin users abide by the new rules.

“It clearly creates a new record-keeping requirement which in the near term is going to be overly burdensome, but I’m highly confident that by tax time a year from now, there will be plenty of automated solutions that will eliminate any headaches of managing this process.”

To date, the petition has received only 403 signatures. Its goal is to obtain 100,000 signatures by 27th April.

IRS asks for comment

Though the filing is a noteworthy sign of community concern, it is unclear how useful it will be given that the US Treasury Department and the IRS have asked the public for comments on the measure. Though, the petition could theoretically come to the attention of the IRS should it reach a sizable amount signatures.

The IRS would not comment on whether such a petition would or would not impact its decision, but stated that it considers information from a variety of sources when soliciting feedback for notices that have yet to become final rules.

Bitcoin users who are interested in providing feedback to the IRS may be better served by sending feedback via standard mail or by email to the government tax body. All entries will be posted for public inspection in their entirety.

For more information on the recent IRS ruling and its implications for the industry, read our full report here.
4418  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 01, 2014, 09:25:47 PM
ZipZap CEO: Argentina’s Volatility Makes Bitcoin Look Stable
Jon Southurst (@southtopia) | Published on April 1, 2014 at 16:47 BST | Analysis, Companies, Investors, News, Regulation

CoinDesk spoke to Alan Safahi, CEO of cash-to-bitcoins service ZipZap, about its big entry into the Latin American market, bitcoin as a ‘leapfrog technology’ in the world’s more volatile economies, and whether the company’s recent issues with payment processor PayPoint would have any impact in future.

Safahi

Alan Safahi has just come back from San Francisco’s CoinSummit where he says he spent far too much time fending off questions about whether his company would continue operations, after recent media articles.

“Rumors of our death were exaggerated,” he laughs, paraphrasing Mark Twain. “I was surprised at the power of the press.”

On the contrary, ZipZap is looking to expand in many new areas, while maintaining existing ones. Last month’s issue was simply one of a payment processor who expected a slow trickle of bitcoin-related business, but instead got a tsunami – too much of a good thing, if you will.

ZipZap is still working with PayPoint to address the processor’s concerns about bitcoin’s exact legal status in the UK, while at the same time diversifying its options both commercially and geographically.

Into Brazil

ZipZap already operates in five countries, and has just quietly slipped into a sixth and major one: Brazil. Having run first a closed, and then open, beta there for a few weeks, the service went live last week, with a Portuguese language site inviting locals to try it out.

The company has also worked as a payment option supporting exchange partners in the country for about two years, including the now-defunct BitInstant.

All without doing much marketing to promote it – yet.

ZipZap decided to move out of the background and promote its services under its own name, doing its own KYC (know your customer) procedures and allowing consumers to buy bitcoin directly. Exchanges often just aren’t in the business of new customer acquisition, Safahi indicates.

“We talked to exchanges and a lot of them really didn’t want to go after Latin America,” he said. “Everybody’s focused on Europe and Asia.”

“We have a very aggressive plan to educate and acquire new customers. We thought Brazil would be a good market for that, it’s a huge powerhouse in Latin America,” he added.

Commercial street in São Paulo
Commercial street in São Paulo
“Brazil has a bitcoin-friendly environment, with banking and so forth,” Safahi continued. “And we think there’s a lot of good potential use cases with remittances for Latin America that Brazil could help us get into.”

As is often the case with bitcoin, much of the promise lies in weaknesses with current financial and economic structures: instability, poverty, and lack of access to banking services – including credit cards, even for large sections of the middle class.

“I see a lot more potential in Latin America,” he said. “Eighty-five per cent in some countries are unbanked. In these unbanked economies, people will just jump over the existing payment options, like Visa and MasterCard, and just go to the next generation: digital currency.”

Said Safahi:

“It’s just like in Kenya and other places where they don’t have landline phones. But they have a lot of mobile phones; it’s easier for them to just leapfrog one technology, go to the next one. So I think that’s what’s going to happen in Latin America.”

What volatility?

There’s no point talking about the risks of bitcoin’s volatility to the people of Latin America, as most of them have experienced far worse with their own national currencies.

“We see a lot of pent-up demand for bitcoin in Argentina.” said Safahi. “I was there a couple of months ago – people in the streets come up to you and try to convert your dollars into bitcoin. They say ‘cambio, cambio’; they know how to do currency conversion with bitcoin.”

“Taxi drivers there know about bitcoin,” he added. “I’ve never seen a country where people are so in tune with financial services as they are in Argentina.”

Then there are countries like Venezuela and Nicaragua, with their closed economies and strict financial controls that do nothing to encourage real commerce or small businesses.

“Those are the markets where bitcoin volatility actually looks really good!” said Safahi. ”At the conference, people kept asking ‘What can we do to manage the volatility of bitcoin?’ and I said, ‘just take bitcoin to markets where volatility doesn’t look bad’.”

He added:

“There are probably about 60-70% of countries in the world you could go to right now, where bitcoin actually looks stable.”

First-world problems

The problem with developed countries is that there often doesn’t seem to be any urgent need for a new payment system. The average consumer doesn’t understand the economic case for sound, non-government controlled money and local fiat currencies have been stable enough to provide a sense of security.

It’s difficult to get consumers in the developed world to switch to bitcoin, Safahi said, because they’re not particularly inconvenienced now. People may complain sometimes, but they’re generally satisfied with credit cards, both in-store and online.

Even merchants, who may gripe about chargeback fraud and processing fees, seem more comfortable in the current system and aren’t rushing en masse to adopt or encourage bitcoin use. Few offer discounts for digital currency, treating it almost as a favor to enthusiasts or a gimmick to attract a bit more business and attention.

Safahi said:

“Libertarians, die-hard fans, will flock to a store that accepts bitcoin. But that novelty wears off. So what are you going to do, two months later, when another competitor comes in?”

Remittances and micropayments

Safahi sees remittances and micropayments as being far more significant bitcoin use cases to consider than regular e-commerce in developed countries.

“While everyone here is into e-commerce and they get all excited about Overstock.com,” he said, “we’re looking at building railways that can get rid of Moneygram and Western Union.”

Explained Safahi:

“Globally there’s $540bn in remittances, and $70bn in fees. If we could get rid of that, and just do it through bitcoin, [...] then we’d add about $70bn in cash to those countries.”

Even though affordable remittances is one of the more obvious applications for digital currencies, and one that could help humanity, it too is riddled with regulatory pitfalls that have prevented several efforts so far, thanks to money laundering and terrorism financing concerns.

Then there is regular e-commerce on a smaller, yet international, scale. Bitcoin allows small amounts of money to be sent anywhere at almost no cost, which could be a boon for anyone in the developing world with something to sell – whether it’s a manufactured product, creative work or service that can be arranged or delivered online. Even a few more dollars here and there could lift a lot of people out of poverty.

ZipZap’s role

For payments like those above to work, especially remittances, there needs to be reliable on and off ramps at each end. ZipZap aims to be the facilitator for this, working not just with bitcoin, but also Ripple and other digital currencies.

“ZipZap is currently focused only on the on-ramp,” said Safahi, ”but in the next few months we have plans to offer cash-out options, in 90-plus countries.”

money

There’s also a need for education. Money-changers and taxi drivers on the streets of Buenos Aires might love bitcoin, but there’s still a lot of curious people who need to be guided gently into what sometimes looks like a daunting new system.

“When I got into the Internet in the early ’90s,” Safahi said, ”there was a saying that everyone needs a brother-in-law in the Internet business, someone you could go to, to ask all those kinds of beginner questions.”

“Now everyone needs a brother-in-law in the bitcoin business, he continued. “We want to be that person, to educate and teach them. So we’re not going after high-frequency traders, we’re going after noobs, first-time buyers, making it really easy for them to buy their first $15-$20 worth of bitcoin.”

Added Safahi:

“At the [CoinSummit] conference, Andreas Antonopoulos told me he bought his first bitcoins through ZipZap [...] Imagine how many more Andreases we could be cultivating if we were bringing more people into the ecosystem.”

Familiar systems

ZipZap has tapped into an existing payment option that’s very popular in Brazil known as Boleto Bancário or just Boleto – a payment ticket system allowing customers to print receipts and pay with cash at over 3000 convenient outlets like post offices, banks, even some stores. You can also transfer funds online from a bank account.

“Familiarity breeds trust, so if we tap into a system they’re already used to, it’s much easier to gain trust,” Safahi said.

“Brazil’s just our first stop in Latin America, in the next few weeks we’re adding about eight more countries including Peru, Chile, Colombia, Mexico, and others,” he went on. “Our goal is to really go deep and go heavy into Latin America.

“Our goal is to build a network and encourage people to use it for remittances. Even if we don’t go after the remittance market directly, we want other people to build solutions for it on top of our railway.”

Rest of the world

ZipZap is also active in other regions, and is talking to people in places like India and Southeast Asia, to name a few. Safahi says he doesn’t subscribe to the notion that you should find one physical location and focus on it. Bitcoin’s ever-changing regulatory environment makes it unwise for a company to put all its resources in one place.

“That’s what you have to do to build this kind of thing,” said Safahi. “The corridors have to be built on both sides and conditions can turn on a dime. You have to be ready to do business in multiple locations.”

Funding and locations

ZipZap is funded primarily by Blumberg Capital and TriplePoint Ventures. It’s undergoing a seed extension round to facilitate growth in these new markets – not just Brazil, but the UK and even the US. It then hopes to go for Series A funding after a few more months.

This means the new international focus isn’t going to divert ZipZap’s attention away from the UK. On the contrary, it plans to announce a deal with a new payment processor in the coming week and is maintaining its relationship with PayPoint.

On top of that, it’s already formed a new entity in nearby e-commerce and gambling haven, the Isle of Man.

“We’re not down,” said Safahi. “It’s going to take a lot more than that to get us out of the UK. And Isle of Man is really interesting. They’re very friendly with bitcoin.”

The company looked at other small jurisdictions, from Gibraltar to Singapore, but settled on the Isle of Man due to its “progressive” approach to technology and banking, as well as its proximity to the UK and Ireland.

“We’re doubling down on the UK. We’re not going anywhere.”
4419  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 01, 2014, 09:23:21 PM
Why Goldman Sachs Got it Wrong on Bitcoin
Ariel Deschapell | Published on April 1, 2014 at 17:18 BST | Analysis, Bitcoin protocol, News

“Bitcoin likely can’t work as a currency, but some sense that the ledger-based technology that underlies it could hold promise,” concludes a Goldman Sachs report titled “Top of Mind”.

Bitcoin has attracted major league attention in the finance world, and most seem to share the views expressed in the report. While increased research and interest from Wall Street is good for bitcoin overall, the report misses the mark with its conclusion and underscores several systematically flawed views of the digital currency and its future role in finance.

While credit should be given to Goldman Sachs for taking a more in-depth look at cryptocurrencies, its report showcases inaccurate commentary of bitcoin’s current and future hurdles, often reflecting common argumentative fallacies that have been rampant amongst analysts and pundits alike.

One-sided view

Bitcoin lies at the intersection of technology and economics, and the fallacious arguments against it span both these areas. This is really no surprise, as most economists and financial analyst don’t have extensive technological knowledge, and are prone to making errors in reasoning because of this.

Yet the technological significance of the Bitcoin protocol – in particular, its ability to transmit ownership between individuals without a third party – is hard for even the harshest critics to downplay.

Similarly, the accompanying high-speed and ultra-cheap transactions of this system are real achievements with measurable benefits.

To be fair, the GS report does conclude the block chain ledger system that underlies bitcoin indeed has real promise, not just in monetary transactions but in countless other fields. However, this is where most of the praise stops.

Wrote Dominic Wilson and Jose Usrua, two of the report’s authors:

“Bitcoin currently shows more promise in terms of its payments technology than as a stable store of value.”

They have a point, given the current state of bitcoin. While volatility may be rampant, transaction fees for merchants are much lower, and money movement is much cheaper and faster.

One could argue this makes it likely that bitcoin is destined take on a role more like that of Paypal, than to replace any entrenched currency. In fact, the report even goes on to illustrate the pure potential of the efficiency of these transactional advantages by estimating that the global economy could save more than $210bn annually if bitcoin became the default means of payment and remittances.

Problem solved

Yet despite this staggering number, in regard to bitcoin’s potential as a store of value, Jeffrey Currie, head of commodities research at Goldman Sachs, remarks:

“The replacement of an old commodity with a new commodity typically occurred precisely because the new commodity solved an economic problem that the old commodity could not. For example, coal replaced wood when fuel was needed for steam engines. So the question is: is there an economic problem with gold as a store of value that bitcoin solves? The short answer is no.”

Wood did not fail in itself as a store of energy, coal was simply much more efficient and suitable for growing and changing industrial demands. Similarly bitcoin – as we can clearly see from the Goldman Sachs’ own report – is vastly more efficient, and able to meet the demands of a global economy in a way that a patchwork of national fiat currencies cannot, let alone chunks of gold.

The latter two require trust in third parties – including national governments – as well as clunky traditional financial infrastructure that takes days to transfer funds between owners.

To borrow Curries’ analogy, if the transition from wood to coal is what allowed the industrial revolution to really take off, then the transition from national currencies to cryptocurrency is what will allow an explosion of global trade and development with little precedent.

Highs and lows

Yet detractors would rightly point out that there is still the lingering problem of volatility. A currency that suffers from frequent swings in value on a regular basis can’t, and indeed shouldn’t be adopted by the mass market as a means to move value around.

The average consumer can’t afford to gamble whether they will be able to afford basic necessities tomorrow on the value of a fluctuating currency.

This is the insurmountable problem with bitcoin cited by many economists and financial analysts, and is one of the reasons another of the report’s authors, Eric Posner, remarks:

“Twenty years from now, use of the bitcoin – or other similar, perhaps improved networks – could very well be part of the process where you send money from one place to another, but an unobservable part of the process. In other words, firms that transfer money may find it in their interest to use this technology to transfer money, but it is not going to look that different to ordinary consumers. I think that is the most likely way that this plays out.”

For Posner and many others, the solution is as simple as stripping the ‘technology’ that allows bitcoin to be so frictionless and implementing it in the current financial infrastructure. UBS has recently made similar statements as well.

What they fail to grasp, however, is that Bitcoin the protocol and bitcoin the currency are inseparable. Bitcoins are units that exist only in the block chain, and aren’t tied down to any existing financial infrastructure. It is because bitcoin is separate from the traditional ways of moving money that it is so frictionless.

Cryptocurrencies aren’t going to simply improve the current financial system, they threaten to uproot it completely.

Adoption is key

The Bitcoin protocol can’t function without its own independent unit or share, this is why you can’t use the same technology to move fiat around, and also why volatility isn’t a long term problem.

Merchants are already flocking to bitcoin in exponential fashion due to its low 1% transaction costs. The savings are a no brainer. Meanwhile consumers are adopting it for everything from lowering travel expenses by eliminating the need for expensive and cumbersome currency exchanges, to greater economic and financial freedom.

While the trend is clear, “inevitability is not a strategy” points out Adam Hanft in a recent CoinDesk article, and there are things that can be done to further spur consumer adoption of bitcoin.

As the transactional usage of bitcoin continues to increase, however, taking advantage of the payment system side that Goldman Sachs has identified, the price will undoubtedly continue to stabilize. As this process continues, merchants will feel comfortable keeping some bitcoin instead of converting it immediately to fiat.

This reddit post illustrates how one business is already doing this, and paying its first invoice with bitcoin too. Once this starts happening en masse, and bitcoin begins flowing steadily around the global economy without touching exchanges, the digital currency will truly start to become a stable and independent store of value.

That’s when things will start getting interesting. When this tipping point is reached, there is no reason bitcoin shouldn’t be considered a fully fledged currency – one that is far more efficient and attractive than current fiat monies to boot.

Borrowing from bitcoin

Now can a government theoretically create its own currency using the open-source code of bitcoin? In other words, ‘adapt’ the technology of bitcoin as the authors of the Goldman Sachs report expect is likely? Of course, but then just like any other altcoin it would have to compete in the marketplace.

In fact Eric Posner stipulated that:

“Probably the most important reason why [bitcoin] would not be a good substitute is that we actually do want the government to control the money supply.”

This, of course, is fundamental to the closed nature and centralized decision making of central banks like the Federal Reserve, and the constant annual devaluation of currencies to ‘stimulate’ the economy and endlessly fund expanding government debt.

What Posner doesn’t seem to grasp is that these ‘selling points’, if you can call them that, are irrelevant to the average individual who just wants to save costs and move money around more efficiently. Individuals want a currency for its ability to stimulate trade and store wealth, not so central authorities can test out their monetary theories on an economy.

Maintaining a monopoly

Even if this wasn’t the case, the very argument that annual inflation can stimulate the economy is nonsense. And when the conversion and exchange costs are removed from the Goldman Sachs estimates, global savings from bitcoin increase from $210bn to $326bn annually. If that isn’t an economic stimulus, then what is?

A new coin in the fiercely open and competitive cryptocurrency market based on the centralized and inflationary design of current national currencies would, simply put, be slaughtered. It would lose every time to decentralized coins with a stable and eventually static money supply when it comes to consumer choice.

With a ready and superior alternative like bitcoin available, assuming it can sustain a stable value and widespread merchant acceptance, in the long term there is ultimately no reason to keep using fiat currencies.

The monetary policies that have been all the rage in academia for decades cannot be implemented without a total monopoly of money by the governments. Can governments outlaw cryptocurrency to try and maintain its monopoly on the money supply, and thus control over monetary policy? Not likely.

That nonetheless brings us to an important question. If the only thing keeping fiat currency and monetary policy functioning is forceful use, then which is the real ponzi scheme here again?

Ariel Deschapell is a freelance opinion and news writer for CoinDesk: his opinions do not necessarily reflect those of CoinDesk.
4420  Bitcoin / Bitcoin Discussion / Re: BITCOIN NEWS EVRYDAY! From multiple sources. on: April 01, 2014, 09:21:48 PM
Seedcoin Gives BTC.SX 500 Bitcoins In Funding
Danny Bradbury (@dannybradbury) | Published on April 1, 2014 at 20:09 BST | Companies, News

Bitcoin derivatives trading site BTC.SX has been given 500 bitcoins in funding through seed funding outfit Seedcoin.

The site, which recently had to close temporarily after the demise of partner Mt Gox, is the sixth company to be funded in Seedcoin’s first round, called SF1, which was announced in December.

“Being funded by [SF1] puts us in a great position while we work to build the security, speed and transparency of our trading system,” Joe Lee, the founder of BTC.SX, told CoinDesk. “Being funded means we can proactively work with financial regulators to show them that bitcoin and its growing financial services industry is here to stay.”

BTC.SX’s funding represents a quarter of the entire SF1 fund, which hopes to fund seven companies in all.

Bitcoin payment processor Cryptopay received 100 bitcoins, and Hive, which makes a bitcoin wallet for OSX, received 150. CoinSimple, which allows merchants to receive payments via several different bitcoin payment processors, was given 200 bitcoins, as was zSim, a company still in stealth mode that is preparing some kind of SIM-based wallet.

Mexican bitcoin exchange MexBT was the recipient of the second-largest bitcoin funding package under SF1, receiving 250 bitcoins.

Seedcoin is also negotiating with the last of the seven companies that it chose for the SF1 round: GoCoin. This company provides payment processing services not just for bitcoin, but for Litecoin, too.

GoCoin, which recently received $1.5m in funding from a separate round led by Bitcoin Shop, also received $550,000 last November from a group of investors including BitAngels.

The deal with GoCoin is not yet closed, emphasizes Eddy Travia, co-founder of Seedcoin. Once that funding is complete, it won’t entirely use up all of the bitcoins in SF1. Some will be held back to meet further funding demands for those companies.

SF1 is funded through purchases of ‘units’ via Havelock Investments, an originally Canadian-owned company which is now located in Panama.

89% of the funds collected via Havelock will go into SF1 startups. Seedcoin collects an 11% management fee, and also pays a 5% listing fee, Travia said.

“Bitcoin is still in its infancy, and if you look at the products out there, we haven't even got the exchange infrastructure that we need.”

This latest funding shows the volatile nature of bitcoins. Had BTC.SX secured the 500 bitcoins in December, when the fund was launched, it would have collected the equivalent of $437,500, according to CoinDesk’s Bitcoin Price Index. At today’s price, they’re worth $241,000.

But that assumes that BTC.SX is going to cash out the bitcoins entirely, which seems unlikely, given that it’s a bitcoin-based derivatives house.

“The terms had been agreed only in BTC, not in USD so there is no change regarding our conditions and regarding BTC.SX,” said Travia. “Since it is a bitcoin only business they will most probably keep this in bitcoin as long as they can.”

Lee said that BTC.SX works to remain well-hedged against foreign exchange movements in the market. The risk will be hedged within its internal accounts and managed separately from client funds, he added.

BTC.SX, which reopened for trading on March 12, has processed around $44m in bitcoin-based trades, it said this week. The firm, started less than a year ago by Joe Lee, now has offices in Singapore, London, and New York.

Lee was a one-person operation when he started. Even though the company has grown quickly, there is still a lot to do, he said, arguing that it was difficult even to serve futures and options markets because the lack of an established infrastructure for trading.

“Bitcoin is still in its infancy, and if you look at the products out there, we haven’t even got the exchange infrastructure that we need,” he said.

“The announcement that New York is accepting applications is very exciting for us. That will bring legitimacy, and a lot more trading volume. That will bring us great exchange products. It’s a win-win situation.”
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