New York Now Accepting Applications for Digital Currency Exchanges
Pete Rizzo (@pete_rizzo_) | Published on March 11, 2014 at 18:26 GMT | Regulation, US & Canada

New York’s Superintendent of Financial Services, Benjamin M. Lawsky, has issued a public order that confirms the state is now accepting applications for digital currency exchanges.

Perhaps most notably, however, was that Lawsky indicated that these new businesses will be regulated under new New York regulation, which he committed to having in place by the end of the second quarter of 2014.

In his remarks, Lawsky struck his usual balance of at once recognizing the promise of digital currencies and stressing that related business activities need to be conducted in a responsible and lawful manner.

Wrote Lawsky in the release:

“The recent problems at Mt. Gox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges, including robust standards for consumer protection, cyber security, and anti-money laundering compliance.

Proposal guidelines

Lawsky also disclosed new information for those seeking to apply for a New York-based exchange, indicating that interested firms can now immediately submit proposals and applications. However, he noted that such submissions represent a formal commitment to the regulatory process.

Further, Lawsky suggested that New York will not be bound by commitments that prevent it from taking what he considered appropriate action to safeguard consumers during this process. Lawsky noted that its policies for digital currency exchanges could be later modified to enhance consumer protection, cybersecurity or anti-money laundering initiatives.

Said Lawsky:

“Turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators.”

Approved applications will need to adhere to the regulatory framework New York plans to introduce later this year.

A long-awaited move

The move puts in motion an idea that first arose during the NYDFS bitcoin hearings in January. There, major digital currency investors made the case that New York should consider hosting such a business, both for its job creation benefits and because the industry was in need of more oversight, though this suggestion has not been without criticism.

The news also confirms what New York-based bitcoin business leaders had previously indicated, that they had been in talks with representatives of the state on the matter on efforts to work toward regulated exchanges.

Has Zillow CEO Spencer Rascoff Adopted a Pro-Bitcoin Stance?
Roop Gill (@roopgill) | Published on March 11, 2014 at 17:42 GMT | Companies, Investors, News

Spencer Rascoff, CEO of online real estate database Zillow, has announced to his 20,290 Twitter followers that he is coming round to the idea of bitcoin.

The entrepreneur indicated yesterday that he was gearing up to embrace digital currencies.


A tweet today from the Harvard graduate confirmed he had taken the plunge and invested in some bitcoins:


Rascoff joins the growing league of executives who have implied their support of bitcoin, including Virgin Galactic’s Sir Richard Branson, ex-Facebook executive Chamath Palihapitiya, and most recently, Wikipedia’s co-founder Jimmy Wales.

Just yesterday, Wales tweeted about bitcoin and indicated that he would discuss bitcoin acceptance with board members.

While Rascoff may seem pro-bitcoin now, he appeared on Bloomberg TV last November openly criticising the cryptocurrecy. He said:

“I am sceptical of bitcoin. I just think there’s too much shadiness associated with the currency that’s not maintained by some sort of government or central bank. And I think it will blow up at some point, with some big scandal where someone loses 50, a 100 million dollars, and I don’t think it [bitcoin] is going to be here in five years.”

Jill Simmons, spokesperson for Zillow, told CoinDesk that while Rascoff may be expressing interest in bitcoin, this doesn’t necessarily mean his company is exploring bitcoin acceptance.

“Spencer’s decision to buy bitcoin was a personal one and doesn’t reflect any upcoming policies within Zillow,” she said.

Zillow’s growth

Zillow is a real estate marketplace helping homeowners, buyers and agents to find and share vital information about homes, real estate and mortgages. Founded in 2005, the Zillow website is one of the most-visited real-estate brands in the US.

Between 2005 and 2011, the company raised funding totalling $92.5m with investors including Technology Crossover Ventures and PAR Capital Management. Zillow began trading on NASDAQ Stock Market in July 2011, raising $4.13m in post IPO funding.

Rascoff was named one of America’s most powerful CEOs 40 and Under by Forbes magazine for the last two years. Before taking up his role at Zillow, he co-founded Hotwire.com, a discount travel website.

US Securities Regulator FINRA Warns of Bitcoin’s Investment Risks
Pete Rizzo (@pete_rizzo_) | Published on March 11, 2014 at 16:57 GMT | Investors, News, Regulation, US & Canada

The Financial Industry Regulatory Authority (FINRA), the largest independent regulator in the US, issued an investor alert about bitcoin on 11th March, calling the digital currency “more than a bit risky” as part of a new warning to consumers and investors.

FINRA said the alert aims to raise awareness about the downsides of bitcoin investments in light of the recent high-profile struggles of bitcoin business.

Read the release:

“FINRA is issuing this alert to caution investors that buying and using digital currency such as bitcoin carry risks. Speculative trading in bitcoins carries significant risk. There is also the risk of fraud related to companies claiming to offer bitcoin payment platforms and other bitcoin-related products and services.”

In particular, the released noted the recent troubles of Japan-based exchange Mt. Gox and Imogo Mobile Technologies, which was suspended by the SEC following its introduction of a bitcoin payment platform in January.

Hacking, volatility top FINRA’s listed risks

FINRA detailed what it referred to as the “numerous risks” associated with buying, selling and using bitcoin, including that bitcoin is not legal tender in the US.

The agency further emphasized how bitcoin is susceptible to fraud, saying:

“Platforms that buy and sell bitcoins can be hacked, and some have failed. In addition, like the platforms themselves, digital wallets can be hacked. As a result, consumers can – and have – lost money.”

Additional comments covered how bitcoin exchanges are volatile and could close at any time, and that bitcoin transactions, by nature of their design, are not reversible like other popular forms of payment.

FINRA solicits tips and information

The announcements follows other notable statements from US policymakers, who have been increasingly outspoken about digital currencies, including US Senator Joe Manchin, top Alabama securities regulator Joe Borg and Federal Reserve Chairwoman Janet Yellen, as well as their intent to follow their progress.

FINRA, likewise, suggested it will be monitoring events in the digital currency space.

The regulatory body ended the release by encouraging those who have been defrauded by a securities professional or firm to file a complaint with its representatives or to contact its support lines with tips and information

MtGoxRecovery.com Seeks Reparation From Fallen Exchange
Tom Sharkey | Published on March 11, 2014 at 16:39 GMT | Law, Mt. Gox, News

The backlash from Mt. Gox’s recent bankruptcy filings is now at full throttle, and a new website is building a case against the Japanese exchange with the goal of ultimately filing a lawsuit to recover damages.

MtGoxRecovery.com has gathered information from over 1,600 customers who have lost funds in the aftermath of Mt. Gox filing for bankruptcy in both Japan and more recently in the US.

The website suggests that Mt. Gox CEO Mark Karpeles’ “completely irresponsible actions” have left many of the exchange’s customers with considerable losses, and MtGoxRecovery.com hopes to recover these funds with the help of a Japanese law firm.

Widespread losses

In addition to the 850,000 bitcoins that have gone missing from Mt. Gox, Karpeles revealed the company has more than $60m in outstanding debt owed to creditors and customers.

At one time the industry’s most popular exchange, Mt. Gox undoubtedly held a considerable number of bitcoins, and when the exchange halted withdrawals back in February, many worried that their funds would be forever tied up on Mt. Gox.

Message boards across the Internet have served as unofficial support groups for victims of Mt. Gox’s apparent insolvency. On reddit, an entire subreddit (r/mtgoxinsolvency) dedicated to following the downfall of Mt. Gox has garnered over 200 subscribers, many of whom have reported significant bitcoin losses on the exchange.

One thread dedicated to sharing “horror stories” from Mt. Gox’s bankruptcy was filled with anecdotes of loss:

Mt Gox losses insolvency bankruptcy

Seeking justice

MtGoxRecovery.com was created by tech entrepreneur and Bitcoin Foundation lifetime member Olivier Janssens, who claims to have personally lost more than $5m as a result of Mt. Gox’s questionable operations.

Janssens said he spoke directly with Karpeles in the months before Mt. Gox halted transactions and filed for bankruptcy, and stated in no uncertain terms that he believes Karpeles has acted criminally:

“Mark knew I was a major stakeholder in the bitcoin community, and we discussed solutions for three hours to try to resolve this. At that time he kept telling me he could only send me a very limited amount per month, due to anti-money laundering issues. Obviously, this was a lie.”

One of the major concerns that Mt. Gox customers have consistently voiced is about the exchange’s lack of transparency in its operations, particularly in recent weeks when Mt. Gox halted transactions and eventually filed for bankruptcy.

Janssen pointed to the recent speculation surrounding the movement of $113m around the block chain and how many believe this money is linked with or even owned by Mt. Gox as evidence of Karpeles’ unethical obfuscation of information.

Speaking to CoinDesk, Janssen said:

“It’s very concerning to see assets moving [throughout the block chain] during civil rehabilitation. The legality of it is questionable to say the least, and it should not be done without clear communication to the creditors. Being completely transparent at this point is essential, and this is something that has been lacking at Mt. Gox since the beginning. People should not be given any false hope, nor should extra uncertainty be added.”

Building a case

Together with its lawyers in Japan, MtGoxRecovery.com claims it will file a lawsuit that will “try to recover as much as possible, and additionally press criminal charges against Mark Karpeles personally.”

Janssen says that the website has gathered a substantial amount of information from users that have signed up as plaintiffs in the lawsuit, and in cases where the information is critically important, they plan to pass their case along to the police as well.

One area of focus for MtGoxRecovery.com and its users is Japanese bankruptcy law. Janssens plans to offer a public information session on the subject this week for users who have signed up on the website.

The time and date of this session is yet to be announced, but considering the large number of people who have lost bitcoin on Mt. Gox, the demand for more information is clearly substantial.

Disclaimer: It has not been ascertained that any fraudulent activity was involved in the Mt. Gox collapse. CEO Mark Karpeles has admitted only to losing bitcoins stored at the company via theft. 

Mt. Gox’s Chapter 15 Bankruptcy Won’t Stop US Class Action, Lawyer Says
Pete Rizzo (@pete_rizzo_) | Published on March 11, 2014 at 15:50 GMT | Exchanges, Law, Mt. Gox, News, Regulation

A US bankruptcy judge in Dallas, Texas, granted Mt. Gox’s request for Chapter 15 bankruptcy protection on 10th March, a move that will partly shield the troubled Japan-based bitcoin exchange’s assets from creditors and block at least two lawsuits against the business.

While this may seem like a setback for those hoping to recoup lost funds from the exchange, Edelson law firm partner Chris Dore has suggested that the ruling only protects Mt. Gox KK, its Japan-based entity, from further action, not all of its associated legal entities.

Dore, whose firm is representing the US class action case against Mt. Gox, told CoinDesk the move does not cover other Mt. Gox entities such as Tibanne, its parent company; MtGox, Inc., its US entity; and CEO Mark Karpeles.

Dore said he will seek to move litigation forward against these defendants on behalf of his clients.

Mt. Gox filed for bankruptcy in Japan on 28th February, citing outstanding debt of ¥6.5bn ($63.6m). The most recent US filing listed $37.7m in assets and $63.9m in liabilities.

Baker & McKenzie, the law firm representing Mt. Gox in the US, did not offer comment on the developments.

Mt. Gox mounts a defense

In sworn statements at the courthouse on Monday, Karpeles maintained that issues with the Bitcoin protocol contributed to the demise of his company. The comment is similar to past claims made by the CEO, ones which were roundly denounced by notable members of the bitcoin community.

Said Karpeles:

“The facts known to date indicate that it was caused or related to a flaw in the software algorithm that underlies Bitcoin, and ‘hacking’ attacks of one or more persons.”

The statement suggests that bitcoin’s transaction malleability could be a continued line of defense for Mt. Gox as it looks to ward off criminal accusations.

Federal probe

Bloomberg reports that Manhattan US Attorney Preet Bharara and the Federal Bureau of Investigation are allegedly currently investigating whether Mt. Gox and its associated legal entities may have committed any wrongdoing during the shutdown of the company.

The media outlet indicated that a representative for Bharara would not comment on the investigation.

A temporary restraining order hearing against Tibanne, Mt. Gox Inc. and Karpeles will be held today, according to Dore.

The next hearing in the developing case is set to take place on 1st April, when Mt. Gox will seek to extend its protection until its bankruptcy in Japan is resolved.

MultiBit Bitcoin Wallet Leapfrogs Coinbase to Reach 1.5 Million Downloads
Nermin Hajdarbegovic | Published on March 11, 2014 at 15:21 GMT | News, Wallets

Bitcoin wallet provider MultiBit has passed an important milestone – its one millionth download.

In fact, since nobody was actually keeping track, their one-million milestone came and went without anyone noticing and the current figure is much higher.

When the MultiBit team was recently asked how many downloads had occurred since launch, they crunched a few numbers to reveal that the wallet had in fact been downloaded a total of 1,517,000 times since April 2011.

“The figures have been adjusted down to take into account various DoS attacks and are based on the overall bandwidth attributed to the various installers rather than an arbitrary hit count, which is quite misleading,” the team pointed out.

MultiBit also said that it does not have records from the early days when it was only used by the bitcoinj mailing list. However, the team believes that the download figures for this period were below 100 per month.

Version 2.0

The MultiBit development team is currently working hard on the next version of the wallet app, dubbed MultiBit HD.

MultiBit HD is designed for mainstream bitcoin users across the world, but there is still no word on the launch date, or which new features are to be integrated.

MultiBit is one of the few bitcoin wallets to feature support for multiple languages and, in its latest release, it supports more than 35.

The wallet is available for Windows, Mac OS X and Linux and is free to use – although it is ‘donation ware’, with  the team suggesting a donation of 0.01 BTC from those who find it useful.

Ahead of the competition

Oddly enough, with 1.5m downloads, MultiBit seems to have shifted significantly more wallets than Blockchain.info and Coinbase, which both recently announced the passing of their one-million wallet milestones.

Both MultiBit and Blockchain.info saw a massive spike in the number of downloads in the second half of 2013.

Blockchain started the year with fewer than 100,000 wallets and ended it with about a million. MultiBit’s monthly download chart speaks for itself.

DC Veterans Jim Harper and Amy Weiss Join Bitcoin Foundation
Nermin Hajdarbegovic | Published on March 11, 2014 at 13:00 GMT | Bitcoin Foundation, Companies, Events, News

The Bitcoin Foundation has added two new high-profile members and experienced political operators to its team: Jim Harper and Amy Weiss.

Harper has been director of information policy studies for the libertarian Cato Institute for almost a decade, while Weiss is a former White House Deputy Press Secretary. She currently runs strategic communications firm Weiss Public Affairs.

Jim Harper will be the foundation’s new Global Policy Counsel and he will work to identify political impediments to bitcoin adoption. Harper has plenty of experience in the field, as he served as counsel to various committees in the US House of Representatives and the Senate.

During his time in Washington DC, he provided counsel on PayPal, VeriSign and other companies in the payments space. Jon Matonis, Bitcoin Foundation’s executive director said:

“Bitcoin is rapidly maturing and we are actively building out a world-class team of highly experienced professionals. Jim’s experience with Cato and past experience with PayPal in addition to Amy’s experience with the United Nations Foundation and the White House are invaluable to our efforts around the world and in DC.”

Building a voice

Harper said the Bitcoin Foundation is already a credible voice in Washington DC. He believes he can build on the foundation’s success and improve global financial inclusion and strengthen financial privacy for law-abiding consumers.

“The consensus policy that the foundation has produced – maximizing the benefits of Bitcoin while managing the risks – is something we’ll work to see governments around the world adopt,” he added.

Amy Weiss will join the foundation’s public affairs team and assist global communications and media efforts. In addition to her White House job under the Clinton administration, Weiss also worked for the Recording Industry Association of America, the United Nations Foundation and the Better World Campaign. “Bitcoin will soon be recognized as one of the most important economic and social innovations of our times,” said Weiss, adding:

“The Bitcoin protocol is poised to do for international commerce and financial services what the World Wide Web did for communications. Working with the Bitcoin Foundation during this exciting and formative time is a once in a lifetime opportunity.”

Weiss also served as the communications director at the Democratic National Committee and a press secretary for the Clinton/Gore campaign in 1992.

Interestingly, the Clinton administration was instrumental in the popularisation of another ground-breaking technology two decades ago. The administration worked to enact no-nonsense legislation which paved the way for the internet boom in the late nineties.

Bill Clinton was the first US President to send an email, while Al Gore became the subject of many a joke for his statements regarding internet legislation, which were used to imply that Gore claimed credit for creating the internet.

Gore is no longer active in politics, and it remains to be seen which US politicians will champion bitcoin’s cause on the road ahead.

Huobi CEO Addresses ‘Fake’ Trading Volume Rumours
Rui Ma (@ruima) | Published on March 11, 2014 at 12:08 GMT | Asia, Exchanges, News

Rui Ma is an early-stage investor in technology companies with the global accelerator program and seed fund 500 Startups. Residing in Beijing, she is an active member of China’s bitcoin community.

Some bitcoiners might still remember when BTC China was the dominant bitcoin exchange in China. Well, those days are long gone.

These days, newer exchanges Huobi and OKcoin regularly top the charts for trading volume. Monday, for example, their 24-hour volumes are at 106,942 and 126,973 respectively, third-place CHBTC is at 35,349, while BTC China lags far behind at 4,344.

Huobi, in particular, has garnered more international attention than OKcoin, perhaps due to its inclusion on the Bitcoinity.com charts and the grumblings that OKcoin juiced its trading data (an accusation that has been levied at Huobi as well).

Last Friday afternoon, I caught up with Leon (Lin) Li, the CEO and founder of Huobi, for some insight into why he thinks his platform has so quickly ascended the ranks of the Chinese exchanges, and to discuss his future plans for the company.

Huobi is a well-known name in China and Li is often interviewed there, but due to the fact that neither he nor his co-founder are particularly fluent in English, they are rarely featured in Western media, save for a few correspondences that he’s had with reporters over email.



Though I was introduced to Li a few months back, when the company was raising angel funding, Friday was my first time meeting him face-to-face. Li attended Tongji University as an undergraduate and Tsinghua University for his Masters, graduating sometime in 2007.

Both are top universities in China, with the latter being consistently the top-ranked engineering university in the country and the alma mater of a large number of influential Chinese internet entrepreneurs. His concentration was in electronics automation. He then worked for a few years in Oracle’s R&D department in China, and met co-founder Jun Du through friends.

Jun worked at Discuz!, an internet forum software company that was acquired by Tencent in 2010. Before starting Huobi, Li had taken a stab at both the social networking and group-buying business models, but, Huobi, it seems, is his first real venture of note. Li first got into bitcoin in mid-2011, but didn’t think of doing any business there until 2013.

He began development early that year, and raised angel funding from notable Chinese angel investment fund Zhen Fund (headed by celebrity superangel Xu Xiaoping) in Q3. Zhen Fund led the round, and was joined by Discuz! founder Zhikang Dai, who is now the General Manager of Tencent’s e-commerce business line.

They are also due to announce a large Series A funding, which Li tacitly acknowledged to be true, but refused to give any more details.

Trade volume questions

I immediately asked Li about the volume of bitcoin trades that are made on his exchange, which has been written about before and has been openly questioned by many in the community, both domestic and overseas.

Similar to previous conversations, he emphatically denied any faking of trading data, and noted once again that the zero-transaction fee structure of his platform makes it pointless to compare trading volumes against his competitors, particularly those who still charge a fee.

When I asked him to estimate how much the lack of fees might distort the trading volume, he said that he could easily see a “5-times increase” in trades because high-frequency traders can make profits off of much narrower spreads.

Instead of just volume, Li believes that customers should evaluate exchanges based on their liquidity, depth, and the size of the company. At least these are the metrics that he is measuring Huobi against competitors:

“We have been able to excel on all of these fronts, and coupled with our focus on marketing and customer service, we think that we will continue to give our competition a good run for their money.”

Why no fees?

So what is the reasoning behind Huobi’s commitment to a policy of “zero transaction fees, forever” on the platform?

“Zero transaction fees is the future,” Li said. According to him, the freemium business model is the new norm of the twenty-first century, and no industry, not even financial services, is safe from its disruption.

In fact, he says that there are now traditional securities brokers in China who have launched no-fee services, such as this one by Tencent and Sinolink Securities, and he predicts that in three years, the no-fees model will become the norm.

Basically, Li thinks that a platform will need to make its revenues from value-added services rather than trading, which he sees as a basic service and a commodity that should be free for consumers.

He was emphatic that even as Huobi expands internationally, they will continue to offer free trades. Speaking of international expansion, Li thinks that Huobi will be ready to launch into overseas markets sometime in the second half of this year, probably beginning with support for the US dollar markets.

Prior to this he will be focused on vertical expansion, and is gearing up to launch several of those value-added products he believes are the key to his business model. He’s ready to partner with bitcoin-related services that might benefit from being on his platform, and even offers to invest in promising startups as a strategic investor, either in bitcoin or fiat.

Office visit

When I visited Huobi’s office, in the Shangdi area of Beijing’s Haidian district near tech giants Baidu and Lenovo, Li had just come back from a visit with senior bankers who also lecture at the PBC School of Finance at Tsinghua University, the premier institute of learning for China’s policy bankers.

The team was also getting ready to move into its new offices (just from one wing of the enormous office complex to another) as it had quickly grown to over 50 employees. Huobi prides itself on customer service – and now boasts over 20 customer service personnel.

When I asked Li how he was securing the Huobi platform against hackers and other attackers, he said that the team is extremely focused on security and is constantly monitoring potential loopholes in its systems.

He has third-party cybersecurity firms under contract, such as some of the ones listed here, constantly evaluating for potential breaches. Li says he would rather sacrifice some speed for better safety, as in the case of duplicate deposit and withdrawal requests, which the system automatically will prompt for human/manual verification. He also gets internal audits of their books at noon on a daily basis, weekends included, to make sure “everything balances.”

And of course, he only has 2% of Huobi’s funds in its ‘hot wallet’ and 98% in cold storage.

While this might mean that it might take longer for some users to retrieve bitcoins, Li would rather be safe than sorry. Li told me that things have “definitely cooled down” from the height of the bitcoin fervor in China in November 2013.

While he didn’t divulge the exact number, he did say that new user registrations are one-third of what they were four months ago. When I asked him what he thought the government’s future policies on bitcoin might be, he gave a laugh and said:

“You and I both know there is no point in guessing. The government will do what it will do, and it is impossible to predict. And you see too that other countries are also taking this wait-and-see approach.”

I would have to agree with him. There is no telling where the Chinese government will go with regards to cryptocurrencies, and at least for Huobi, whose ambitions reach far beyond Chinese borders, it may not matter that much.

Big Fish Games to Integrate Bitcoin Payments on all Titles
Nermin Hajdarbegovic | Published on March 11, 2014 at 11:01 GMT | Bitcoin Gambling, Merchants, News

Big Fish Games has teamed up with Coinbase to bring bitcoin payments to its extensive line-up of casual games.

This small, private company is a relatively big player in the casual gaming arena and is the publisher of the Mystery Case franchise and Big Fish Casino, along with over 3,000 casual games from more than 500 developers.

Although the company isn’t as big as Zynga, it serves over 1,500,000 downloads a day and it has 700 employees.

Big Fish allows users to try the games before they make the purchase and many of its games allow traders to buy and sell virtual items.

Cutting costs

While it may be smaller than Zynga, the bitcoin rollout announced by Big Fish is quite a bit more comprehensive.

Zynga limited bitcoin support to FarmVille 2 and a few other titles, while Big Fish plans to allow bitcoin payments for all 3,000 titles in its portfolio. Furthermore, consumers will be able to make in-game purchases with bitcoin.

This is what sets it apart from Zynga, as the rollout is not a test run, reports Venture Beat. Zynga also opted for BitPay over Coinbase as its payment processor of choice.

Big Fish Games’ founder and Chief Executive Officer Paul Thelen pointed out that about 8% of the company’s gross revenue is eaten up by transaction fees.

The integration of bitcoin payments is aimed to bring this figure down, as Coinbase demands no fee on the first $1m of transactions, and just 1% thereafter.

The fees are clearly a big deal, as the company generates half of its revenue through its e-commerce system. Big Fish netted $266m of revenue last year.

Enthusiastic employee

Oddly enough, it appears that the company’s decision to look into bitcoin came about after a single employee started advocating for it. One of the company’s engineers is apparently a bitcoin enthusiast and it appears that he made a rather good case for the digital currency.

As far as in-game purchases go, the rollout will apparently be limited to Big Fish Casino and a couple of other games for the time being. However, all the company’s games will be available for purchase with bitcoin.

Interestingly, the company considered reinvesting the savings into bitcoin-related projects, but it eventually decided to stick to its core business and keep churning out casual games.

Using bitcoin for purchases is relatively simple, and Big Fish has provided a step-by-step video guide on YouTube too:
https://www.youtube.com/watch?feature=player_embedded&v=PWGE2MtaaVc

Bitcoin ATM Company Refused Account by Bank of Ireland
Kadhim Shubber (@kadhimshubber) | Published on March 11, 2014 at 10:08 GMT | Bitcoin ATM, Companies, Europe, News, Regulation

Ireland’s first bitcoin ATM company suffered a setback yesterday as the Bank of Ireland rejected their application for a bank account.

In addition, the Dublin cafe where Ireland’s first ATM was due to be installed pulled out citing “complications” in hosting the machine.

BitVendo, an Irish bitcoin ATM provider, had intended to launch their first ATM at Hippety’s Café this week, but have now relocated to a nearby electronics store GSM Solutions, where they had been testing the machine. BitVendo’s CEO Megan Dolan said:

“We were only informed as we tried to install the machine. We were told staffing became a concern, it came as a massive shock to us, with no prior notice. We think there is a lot more to it, but can’t expand.”

The sudden change of plan came alongside another blow as the Bank of Ireland told BitVendo they would not allow them to open an account due to “the nature of your business”. Dolan clarified:

“[The bank] informed me that: ‘Your account application has been rejected due to the nature of your business. We’re not comfortable with it.’”

Up the ladder

Dolan says their business advisor at the Bank of Ireland claimed instructions came from on high.

Alan Donohoe of the Irish Bitcoin Foundation, who has been working with Dolan, corroborated BitVendo’s version of events, claiming the business advisor said: “The people above me are rejecting the application due to the nature of [the] business.”

Donohoe said it was the first time he had encountered an Irish bank rejecting a business because it was involved with bitcoin and called on Irish banks to embrace, not reject bitcoin:

“We urge banks in Irelands to consider the future and how bitcoin can help the economy. Its not about competing with government currency, its about the technology and how it can spur growth.”

In tweets to BitVendo, the Allied Irish Banks, one of the “big four” in Ireland, said that in contrast to the Bank of Ireland they do allow bitcoin businesses to open accounts:



Dolan confirmed that the company would attempt to open an account with AIB sometime today.

CoinDesk is monitoring this developing story, and will post updates as they become known.

Activist Takes Old-School Approach to Bitcoin Promotion
Danny Bradbury (@dannybradbury) | Published on March 11, 2014 at 05:34 GMT | Lifestyle, News

There are plenty of videos and infographics online explaining what bitcoin is and how it works, but now, a bitcoin activist in the US is planning an old school approach to promoting it. Activist bitcoin-focused marketing agency Bitcoin Bigfoot plans to distribute 100,000 promotional packs to activists around the country. But why?

Paper wallets aside, bitcoin is an aggressively digital phenomenon. Coins are mined, not printed, and they are spent only by sending transactions across the decentralised electronic network. Yet Curtis Fenimore, who together with colleague Jake Tital founded Bitcoin Bigfoot this year, wants to engage new users using a trifold brochure.

“The Internet has a huge reach, but it still doesn’t reach everything,” Fenimore says. “There’s still very much a need for face to face communication and physical promotional materials. YouTube videos alone can’t do it. If that was the cue, adoption would be beyond the roof.”

Fenimore will target new bitcoin users; those who have heard of it but don’t really understand it, and don’t know how to get involved. The project was inspired by several meetings he had with such people, which would invariably end with them asking him how to get a wallet, followed by him scribbling URLs on the back of a napkin. There had to be a better way, he decided.

A grassroots effort

The brochure includes information about how to get and spend bitcoin, including links to large retailers who are now taking it. He will distribute it via regional bitcoin activists who ask for the leaflets in bulk. The brochures will include spaces for those activists to list local merchants taking bitcoin, in an attempt to spark grassroots support for the digital currency.

He has raised around 26 bitcoins, which he says should be enough to finish the design, printing, and distribution of the coins. A self-proclaimed “bitcoin believer”, Fenimore is paying for as much of the project is possible directly in bitcoin. Only the postage will have to be paid in fiat, as sadly, Uncle Sam has elected not to take bitcoin payments for processing the mail.

“The Internet has a huge reach, but it still doesn't reach everything.”

Distribution starts on April 1, and will run for 90 days, but this won’t be the only production run. He will already be thinking about an update to the leaflet before the distribution phase ends, he says, because the bitcoin situation is changing so quickly. There will already be new merchants who should be included, for example. He hopes to have distributed 500,000 of the leaflets by the end of the year.

He hopes that by that time, bitcoin will have become mainstream and “boring” enough that at least one of the three major delivery companies in the US will be taking payment in it, enabling him to make the whole process fiat-free.

It’s clear that any more has high hopes for bitcoin, but then, he comes from a solidly libertarian background. He was an organiser of the Porcupine Freedom Festival, affiliated with the New Hampshire-based Free State Project, a libertarian-driven movement to gather 20,000 people in the state and create a society promoting limited government.

Fenimore’s approach to bitcoin newbies differs from, say, Gareth MacLeod’s Tinkercoin, which focuses on selling them bitcoins for a 25% markup. But Bitcoin Bigfoot will eventually be a for-profit concern, he hopes. He will begin selling bitcoin merchandise and promotional materials, producing it for clients at competitive rates.

“The niche we’ll carve out is bitcoin supporters and activists. Being known as the company that supports you guys,” he says. “If you have an idea of how we can help you and you can’t do it on your own and it benefits others, then we’ll try to make it available to everyone.”

Until then, however, he’s relying on sponsors, and currently has 18 of them. CoinReport.net, Coinapult, expresscoin, DirectPool.net, LocalBitcoins.com, BIPS, KryptoKit, BitGo, Crypto Communications, and CoinMKT have thrown him some bit coins, as have Let’s Talk Bitcoin, CheapAir, Bitcoiniacs, CoinTrader.net, Bitcoin Buzz, Coinosphere, Coinality, and Bitcoin Magazine.

“Bitcoin represents a paradigm shift on so many levels. We’re living in the future and bitcoin is a taste of that,” Fenimore says. “I don’t need to list for you all the benefits of it but all of those things are pointing towards a brighter tomorrow in which the value of what we use to trade is based on consensus and market rates.”

Yeah that is probably the best. We know its hard to launch site of that scale, everything needs to be perfect. We hope to have it as soon as possible

Ummm.... Pls do ur math again . How much is 1% of 300000 btc ?

But ofc, they win much more than that 1% coz even people who win some , come back to lose it.

Ref program not active atm, will be in pd3

Cryptocurrencies are ‘Inevitable’, Says Google’s Jared Cohen
Nermin Hajdarbegovic | Published on March 10, 2014 at 19:21 GMT | Analysis, News

Jared Cohen
Although Google hasn’t yet made any moves related to digital currencies, the search giant’s Director of Ideas Jared Cohen believes they are here to stay.

Speaking at SXSW – the annual interactive conference and festival held in Austin, Texas – Cohen said it is still unclear how digital currencies will develop, as they are a “pretty new space”, reports TechCrunch.

Jared said the future of digital currencies like bitcoin is clear:

“It’s very obvious to all of us that cryptocurrencies are inevitable.”

No plans… yet

While Google’s entry into the space would be a watershed moment for digital currencies, Jared’s statements should not be interpreted as Google’s endorsement of digital currencies.

Google Ideas is not exactly a skunkworks kind of organisation tasked with developing new projects. It is an interdisciplinary think tank based in New York City and has nothing to do with product development.

Cohen was tapped to head Google Ideas by Google Executive Chairman Eric Schmidt in 2010 and his statements do carry some weight, though.

Furthermore, although Google Ideas is not tied to Google’s core business, it is still a part of Google’s Business Operations and Strategy group and is not merely a philanthropic endeavour.

However, Cohen has a few ideas concerning cryptocurrencies that won’t go down well with all members of the bitcoin community.

Value in regulation

Cohen sees a lot of value in bitcoin, but he also warns that lack of regulation is a challenge, saying:

“There’s a danger to it not being regulated in some form.”

Cohen added that there is an ongoing debate about bitcoin regulation that will undoubtedly continue as bitcoin “plays out”.

However, it should be noted that the bitcoin regulation debate has been going on for years, but it has yielded very little in the way of realistic proposals, let alone actual regulation.

New Napster?

Cohen also cautioned that bitcoin may be just one model of a practical digital currency – likening it to Napster. We still don’t know how it will develop, he said.

Cohen appears to view bitcoin as a precursor to other digital currencies, but he doesn’t appear to be too certain about it. In the end, he merely repeats the question we are all too familiar with:

“Is bitcoin the model, or the master of cryptocurrencies?”

If bitcoin is merely a model that can be expanded and built upon, alternative digital currencies could be created along similar lines, backed by various organisations, from financial institutions to corporations.

The altcoin craze proves there is plenty of room for development and innovation, but for big players altcoins are not nearly as interesting as bitcoin.

On the other hand, if bitcoin continues to expand unchallenged, any new digital currency hoping to replace it would face an uphill struggle, as bitcoin’s infrastructure grows and matures with time.

The window of opportunity is slowly closing.

French Finance Minister Calls for EU Action on Bitcoin Regulation
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 20:34 GMT | Europe, Law, Regulation

France’s Minister of Economy and Finance, Pierre Moscovici, issued a call on 4th March for European regulators to collaborate on digital currency regulation as part of an effort to ease the concerns of financial institutions and policymakers.

In statements to the press, Moscovici has indicated he intends to request that EU member states discuss the matter at the EU Economic and Financial Affairs Council (ECOFIN), the organisation that sets the EU budget and monitors the financial markets in member states.

Said Moscovici:

“This is an imperative topic to be treated not only at national level but also at European level.”

Moscovici also revealed that his own government agency has been studying the issue for a year through the efforts of an inter-ministerial working group.

The working group is set to disclose its findings in April 2014 in a report that will add to France’s contributions to ECOFIN’s broader research efforts.

Regulation in France

France has been one of the more active EU nations on matters relating to digital currencies so far in 2014, issuing guidance that bitcoin exchanges need to register before operating domestically on 29th January, and holding Senate hearings on the topic on 15th January.

The 29th January ruling, however, did not regulate all bitcoin activities in France. Delphine Amarzit, a representative of the French Treasury has suggested that digital currency transactions that don’t involve fiat money may also need to be examined due to this limitation.

The Bank of France previously ruled that bitcoin is “neither legal tender nor a means of payment”, a ruling that is contributing to uncertainty on how regulation in France can go further in regulating the currency. The only “legal” currency in France is the euro.

Global impact

The news that the EU may soon issue more guidance is particularly significant given the number of nations that have expressed that they are looking to it for leadership.

For example, the Central Bank of Lithuania told CoinDesk in February it would look to the EU for regulatory guidance, while Greece and Hungary have used past statements by the European Banking Authority to inform its citizens about the risks associated with digital currencies.

As such, any determinations made by ECOFIN as part of the research are likely to have a far-reaching impact on the global community as it seeks to better understand how to put controls on the digital currency.

eBay Patent Filing for Currency Exchange System Included Bitcoin
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 18:28 GMT | Companies, Law, News, Technology

A second eBay patent application has surfaced on the US Patent and Trademark Office database – further highlighting the online marketplace’s interest in digital currencies and digital currency processing systems.

Named ‘System and Method for Managing Transactions in a Digital Marketplace’, the application follows its “gift token” patent revealed on 19th December last year. Filed in December 2011, six months before its gift token filing, this document names bitcoin specifically.

The patent details eBay’s plan to create a currency module configured to manage the exchange of digital currencies, one that might require eBay to maintain or access an exchange rate for conversion.

Reads one patent section:

“The currency module 308 allows a user to trade one form of currency for another form of currency. [...] The digital currency may be used to pay for real-world financial obligations (e.g., bills) as well as for virtual-world obligation.”

The news supports the notion that eBay has been aware of, and thinking strategically about, digital currencies for some time.

eBay currently encourages the sale of virtual currencies on its Classified Ads platforms in the US and the UK, though it permits the sale of such items elsewhere on its site provided they are housed in physical items like hard drives or USB sticks.

Patent lists bitcoin as acceptable currency

Screen Shot 2014-03-10 at 11.21.49 AM

The processing system would not be just for bitcoin alone, but rather a long example list of currencies that could be used on the proposed system.

This included US dollars, eBay bucks, now-defunct Facebook credits and bitcoins:

“A non-exhaustive and example list of currencies capable of being exchanged may include frequent flyer miles, loyalty and reward points (e.g., credit card reward points, hotel loyalty points, retail loyalty points), virtual currency, cash, Bitcoins, Facebook credits, eBay bucks, cash-equivalent currency (e.g., gift cards, travellers checks, cashier’s checks), and any other form of currency.”

Payment system 122, as detailed in the filing, would in turn allow bitcoin users to potentially “accumulate value in a commercial currency” on the site that would later be redeemed for goods and services on the eBay network.

eBay’s bitcoin speculation continues

The patent filing marks the second time in recent weeks that eBay has hinted its broader plans may include digital currencies, and adds to the growing history between the company and the digital currency.

Though he may have been speaking more broadly about digital forms of payment, eBay CEO John Donahoe has indicated as recently as 19th February that PayPal could pursue a digital wallet that holds multiple forms of currency.

Donahoe has been one of the more outspoken executives when it comes to addressing bitcoin. Last November, the exec stated he believes digital currency will become a “very powerful thing” that could one day factor into PayPal’s plans.

Philippines Regulator Issues Warning on Digital Currencies
Nermin Hajdarbegovic | Published on March 10, 2014 at 16:38 GMT | Asia, News, Regulation

Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has issued a warning on bitcoin which echoes similar statements issued by regulators worldwide over the past few months.

BSP acknowledged that digital currencies like bitcoin are “now being exchanged in the Philippines” but stressed that they remain a relatively risky investment.

Additionally, it warned that digital currencies and digital currency exchanges are not regulated by national regulators and thus consumers would not be protected from losses if an entity holding digital currencies went under.

No shortage of concerns

BSP pointed out that there is no assurance that any digital currency would be stable or exchangeable. The value can be highly volatile and digital currencies can be used for illicit purposes, it stated.

In terms of consumer advice, the bank outlines “things to think about before buying, holding or trading”, including: loss of value, theft, lack of consumer protection and the possibility of having assets frozen. The bank stresses that exchange platforms are unregulated and that there is no protection for investors in case of failure:

“At present, there have already been a number of cases where virtual currency exchange platforms have gone out of business or have failed.”

The risk of theft is real and digital wallets are not entirely safe, while at the same time consumers who purchase goods and services for bitcoin cannot rely on consumer protection regulation in case something goes wrong. Volatility is another concern, as is the fact that nobody can guarantee exchange, it stated.

Lastly the misuse of digital currencies can lead to criminal investigations and asset freezes – even investors who acted in good faith can have their assets frozen as part on a wider investigation (ie in case authorities opt to close an exchange platform).

No immediate effect

Like other regulatory warnings on digital currencies, the BSP statement is unlikely to have much of an effect on the country’s bitcoin user base. Although the Philippines isn’t bitcoin’s biggest community, the country remains a very interesting market for a number of reasons, mainly remittances.

Back in January a team of bitcoin enthusiasts launched BuyBitcoin.ph, an exchange geared toward remittances. With good reason – there are an estimated 2.2 million Filipino expats in Asia and the rest of the world, and their contribution to the local economy is huge.

In 2013 alone they wired more than $13.9bn to the island nation. To put this in perspective, the country’s GDP is around $250bn. Eliminating transfer fees in the remittance process could be a boon for many expats and their families back home.

Wikipedia’s Jimmy Wales to Discuss Bitcoin Acceptance with Board Members
Emily Spaven (@emilyspaven) | Published on March 10, 2014 at 15:46 GMT | Companies, Merchants, News

Jimmy Wales, co-founder of Wikipedia, plans to discuss with the Wikimedia Foundation Board of Directors the possibility of the famous Internet encyclopaedia accepting bitcoin.

Wales has been experimenting with digital currency, recently setting up a bitcoin wallet with Coinbase and posting his wallet address on Twitter.



Blockchain shows that, since Thursday (6th March), the wallet address has received around 5 BTC, which is currently worth around $3,104.

Wales said he will “of course” donate all of the bitcoins he has received to Wikipedia.

In a Reddit post, the entrepreneur said:

“I’ve been watching bitcoin for a long time, of course, and I thought it past due to test it as a consumer – how hard is it, how confusing is it, etc.”

Wales’ Reddit post continued: “I’m planning to re-open the conversation with the Wikimedia Foundation Board of Directors at our next meeting (and before, by email) about whether Wikimedia should accept bitcoin.

Implications

He explained that one reason Wikimedia hasn’t yet added bitcoin as a funding method is that doing so “has a lot of implications”.

“We know, for example, and you will likely find this counterintuitive, that the more payment options we give people, the less they donate,” he added.

Wales suggested Wikipedia could simply set up an account on Coinbase and publish its wallet address on social media, without integrating it into Wikipedia’s donation screens.

“The BTC community is pretty close-knit and generous, so that’d probably work pretty well,” he concluded.

Currently, Wikipedia accepts donations in a variety of currencies via a number of payment methods, including credit/debit card, PayPal, bank transfer and cheque.

Mt. Gox Files for Chapter 15 US Bankruptcy Protection
Pete Rizzo (@pete_rizzo_) | Published on March 10, 2014 at 14:49 GMT | Companies, Exchanges, Mt. Gox, News

Troubled Japan-based bitcoin exchange Mt. Gox has filed for Chapter 15 bankruptcy protection, an ancillary form of bankruptcy that will complement its primary Tokyo District Court claim issued on 28th February.

US Chapter 15 bankruptcy provides specific protections in cases of cross-border insolvency, and is based on UN model law. Both Japan and the US have adopted Chapter 15 bankruptcy in an effort to better protect the interests of shareholders and maximize the value of debtor assets in cross-border bankruptcies.

At the time of its filing, Mt. Gox claimed an outstanding debt of ¥6.5bn ($63.6m), and indicated that 850,000 bitcoins had been lost or stolen from its exchange.

This is just the latest development in the ongoing legal case against Mt. Gox. Shortly after its original Japan filing, a US class action suit was mounted by Colorado-based Edelson law firm, which specializes in technology cases. The lawsuit is seeking damages, alleging that Mt. Gox was negligent for failing to provide adequate security to its customers.

Edelson did not respond to comments requesting more information on how this filing could affect its case.

What is Chapter 15 bankruptcy?

Upon qualifying for Chapter 15 protection in the US, certain relief could become available to Mt. Gox, including the granting of an “automatic stay” that would prevent creditors from seizing its US assets, though Mt. Gox would have to request such an arrangement in writing. The presiding bankruptcy judge would have the final say on granting the relief.

For more information on Chapter 15 bankruptcy filings, read a full overview here.

Next steps

Following the filing, a recognition hearing will typically be held within 30 days to determine whether the case is a “foreign main” or “foreign non-main” proceeding, distinctions that would affect the handling of the case. Mt. Gox may not necessarily have protection in the interim period before the hearing.

After the determination is made at the hearing, Mt. Gox would be able to carry out its main purpose in filing, which can include liquidating assets, approving its sale or assigning its leases in the US.

Mt. Gox indicated recently in a post on its website that it planned to restructure and restore the business in order to increase repayments to its creditors.

Blockchain Rolls Out Bitcoin Payments App for Merchants
Nermin Hajdarbegovic | Published on March 10, 2014 at 13:05 GMT | Blockchain, Lifestyle, Merchants, News

Blockchain.info has launched a new payments app designed specifically for merchants. Blockchain is by far the most popular bitcoin wallet and just two months ago the company reached its one million milestone.

However, its new offering is a very different beast. The Blockchain Merchant app is designed to allow merchants to accept bitcoin payments at practically any retail location. The app integrates with your wallet and it can be set up to receive payments in a few easy steps.

Nic Cary, CEO of Blockchain.info, explained: “Merchant adoption is something we are very passionate about. We want to build beautiful, simple to use applications for anyone to get started with Bitcoin.”

Easy as 1,2,3

Once the app is installed the user needs to add the receiving address, business name and currency of choice. The user then enters a description and price for items being purchased and the app generates a QR code, allowing the customer to scan it and send the payment.

blockchain-merchant-app

As Blockchain.info explains:

“Our goal was to design an app that would make accepting Bitcoin simple and easy for any business owner. Simply download, install and open the app; set up your 4-digit PIN [...]; add your Bitcoin receiving address, name of your business and currency preference; turn push notifications on and then click save.”

How does it compare?

So what are the selling points? Well, since the app is free, they aren’t exactly selling points, but Blockhain says it has a number of advantages over traditional payment methods and competing bitcoin solutions.

As soon as it is installed and set up, the app can start receiving bitcoin payments instantly via the Blockchain API. There are no fees on payments and the app is already getting good reviews on Google Play. The biggest complaint coming from early adopters and reviewers appears to be the relatively limited choice of currencies.

The application should run on all Android devices running Android 4.0 or a more recent versions.

Of course, the elephant in the room is Coinbase. The company pioneered bitcoin merchant apps, but truth be told bitcoin merchant apps are still very niche. The Coinbase Merchant app still has fewer than 5,000 downloads, which doesn’t sound like much – and it isn’t.

Bitcoin POS (point of sale) and mPOS (mobile point of sale) solutions are still few and far between, but in theory they do offer a number of distinct advantages over traditional payment solutions, including the fact that they are free, offer 0% transaction fees and don’t require specialized hardware.

Apple is still not allowing bitcoin apps on iOS, which is bad news for many merchants who rely on iOS POS solutions, usually on iPads.

However, Cary has a plan: “We’re going to be giving away android tablets as we roll it out around the world. There are already half a dozen on the way to Paris and we’ll announce new launch cities over the coming weeks.”