MtGox does way more that just provide a platform for trading Bitcoins. They are also in the money transmission business according to their TOS. If I can copy and paste these terms so can an officer at the US DHS. https://mtgox.com/terms_of_service. PLATFORM TRANSACTION PROCESS FOR BITCOIN TRANSFER TRANSACTIONS Members may at any time transfer any amount of Bitcoins to any other Members as well as any other Bitcoin users even if they are not Members (the “Transferee”). Bitcoin Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their bitcoin address. Members shall be solely responsible for ensuring that any transfer of Bitcoins to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations. Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the Bitcoins transferred. When conducting Bitcoin Transfer Transactions with a Bitcoin user who is not a Member, Mt. Gox’s responsibility shall be further limited to ensuring the transfer of the necessary technical data to the Bitcoin peer-to-peer network. No Commission of any kind will be charged by Mt. Gox for Bitcoin Transfer Transactions. PLATFORM TRANSACTION PROCESS FOR CURRENCY TRANSFER TRANSACTIONS Members may at any time transfer any amount of currencies held on their Account to any other Members (the “Transferee”). Transfers to third parties who are not Members is not possible. Currency Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their Account name. Members shall be solely responsible for ensuring that any transfer of currencies to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations. Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the currencies transferred. No Commission of any kind will be charged by Mt. Gox for Currency Transfer Transactions, except when the Account of the Transferee is set up in a currency different than the currency transferred (in which case the 2.5% Commission shall automatically apply). I will leave it to reader to judge if Karpeles did lie after reading the above. |
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Governments are the main reason that Bitcoin will become highly successful.
In order to kill Bitcoin governments only need to do one thing however: Make it possible for a money services business to register in one jurisdiction (say one state of the United States) and then by agreement between all the regulators worldwide make that one money services business registration valid worldwide.
My personal expereince is that I have only deposided fiat cash into one Bitcoin exchange namely Virtex. Virtex requires that one be both a Canadian citizen and resident in Canada to do business there. Now when when it comes to purchasing goods and services with Bitcoin it has always been with businesses that are not based or resident in Canada or with individulas that are not Canadian citizens or residents.
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Convenient yes, but also very expensive. Most airport locations are expensive and that means over paying for everything. A Bitcoin ATM located at an airport will have to either charge an additional fee or offer a less favourable exchange rate than one located somewhere else just to cover the additional overhead of being located at an airport.
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This is ridiculous and probably a bad idea (think bit-rot) but I've thought that storing BTC on a cassette tape like the old TRS-80 computers could use would be really slick. http://oldcomputers.net/pics/trs80-i.jpgThis is even more generations back. The question is how to get the data onto the cassette tape. Find a computer that can read both 5.25in floppies and cassete tape?. Serial port connection? An old dailup modem? A 286 can read 3.5in floppy disks and so can the most modern computers via a USB floppy drive. As for 5.25in floppies many computers under 10 years old support the drives. Bitrot is a concern with any technology both old and new. Actually CDs are among the worst for this. The answer is an active approach of renewing and testing the backups on a regular basis and do not just rely on one kind of technology. Multiple technologies from different times is best. |
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Now I know your age because of the 5.25in floppy disks and the old 286. You're somewhere between 50 and 200 years old.  Living to age 200 would be kind of cool however that means having to store Bitcoin keys in a replica of the steam powered analytical engine. http://en.wikipedia.org/wiki/Analytical_engine. Of course with an ample supply of super heated steam one can scald an attacker who tries to steal the Bitcoins. |
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I think it's probably a good idea to encrypt everything.
This is for the most part very true but there is one senario where it is not namely estate planning. The idea is to make your Bitcoins available to the executor of your estate after one death but not make them avalible to anyone while one is still alive. I have given this some thought to this and came with the following concept. Store the decyption keys on one or more 5.25in floppy disk(s) and place the floppy disks in one or more bank safety deposit boxes. Advise one's executor and family members where the floppies are stored. Now after ones death the bank safety deposit box(s) are opened and the executor of the estate gets access to the floppy disks. A yes it will take some effort and time for the executor put together the hardware and software in order to read the old 5.25in floppy disks quite likely a few weeks; however in this senario this is not a real problem since it can take months to probate an estate in any case. One the other hand if the bank safety deposit box is compromised while one is still alive, then the obsolete 5.25in floppy disks will slow down an attacker long enough to allow the owner of the Bitcoins to empty the wallet before the attacker can read the old floppy disks even though the attacker has the floppy in their possession. |
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Here are some places I use as part of a highly redundant Bitcoin backup strategy.
1) 3.5in floppy disks
2) 5.25in floppy disks
3) The hard drives of multiple computers from the most recent to some very old computers including a 30 year old 286, and an old Pentium 1 computer running Windows 3.1. The latter is the only computer running a version of Microsoft Windows that I use for anything related to Bitcoin.
4) Removable USB 3 hard drives
5) 1) + 4) stored in a bank safety deposit box
6) Encrypt the file and store it on multiple email and cloud services in different jurisdictions worldwide.
The idea is to be able to recover the Bticoins under many different scenarious from the mundane hard drive failure to a disaster affecting one's local community or country where not only is one's home wiped out but also one's bank safety deposit box etc.
2) is one of my favorites and is particularly suitable for storing unencrypted private keys. The idea is that if the floppy is stolen one has time to empty the wallet while an attacker is still figuring out how to read the 5.25in floppy disk. To further slow down an attacker one can hide the floppy containing the Bitcoin keys among many old 5.25in floppy disks forcing an attacker to have to read multiple old floppy disks in order to find the golden needle in the obsolete digital haystack.
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It is not that great a deal for a 43m 2 apartment. I would not be surprised if in a few years 409 BTC would get me something far more luxurious and in a far more expensive market. A mansion in the west side of Vancouver, a penthouse in New York, or maybe a prime piece of real estate in Dubai, Tokyo, London or Paris. PS: A market share for Bitcoin comparable to that of GNU/Linux on the desktop would do the trick. |
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The letter said: "Your entity is not, at this time, engaged as a money services business in Canada as per the Proceeds of Crime (Money Laundering) and Terrorist Financing and its associated Regulations.
"In fact, your entity doesn’t provide the services of remitting and/or transferring funds for the sake of the service. The transfer of funds is simply a corollary of your actual service of buying and selling virtual currency. Therefore, you do not have to register your entity with us." This is how I interpretted it originally ... basically bitcoin exchanges facilitate the buying/selling of virtual currency ... much like a commodity exchange ... if people want to use those assets to transfer value that is a corollary (and not something the exchange has any control over). Basically, the laws surrounding "lawful money" do not apply to virtual currencies. That whole FinCen 'guideline' sounds like a hand-wavy fix-up because they just wanted to back fit a prosecution on to Gox's Dwolla account. The FINTRAC position is essentially the same as that of the US regulator FinCen. The key difference is that the Canadian exchanges are limiting themselves to the trading of BTC for fiat while MTGox is not. Take a look at this from https://mtgox.com/terms_of_service: PLATFORM TRANSACTION PROCESS FOR BITCOIN TRANSFER TRANSACTIONS Members may at any time transfer any amount of Bitcoins to any other Members as well as any other Bitcoin users even if they are not Members (the “Transferee”). Bitcoin Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their bitcoin address. Members shall be solely responsible for ensuring that any transfer of Bitcoins to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations. Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the Bitcoins transferred. When conducting Bitcoin Transfer Transactions with a Bitcoin user who is not a Member, Mt. Gox’s responsibility shall be further limited to ensuring the transfer of the necessary technical data to the Bitcoin peer-to-peer network. No Commission of any kind will be charged by Mt. Gox for Bitcoin Transfer Transactions. PLATFORM TRANSACTION PROCESS FOR CURRENCY TRANSFER TRANSACTIONS Members may at any time transfer any amount of currencies held on their Account to any other Members (the “Transferee”). Transfers to third parties who are not Members is not possible. Currency Transfer Transactions may be initiated at any time from the following page: https://mtgox.com/index.html. Transferees shall be identified by their Account name. Members shall be solely responsible for ensuring that any transfer of currencies to a Transferee shall be a valid and legal transaction not infringing any laws including money-laundering laws and regulations. Mt. Gox’s responsibility shall be limited to using reasonable technical efforts to ensure the receipt of the currencies transferred. No Commission of any kind will be charged by Mt. Gox for Currency Transfer Transactions, except when the Account of the Transferee is set up in a currency different than the currency transferred (in which case the 2.5% Commission shall automatically apply). If this is not a red flag in front of the US regulators and clearly indicates a money transfer business as opposed to an exchange business, I do not know what is. If a Canadian Bitcoin exchange tried that same I would not be surprised if the Canadian regulators were all over them also. The issue here is not that there is a material difference between United States and Canadian regulations in this case, there infact is not, but rather than the Canadian Bitcoin exchanges are not also engaging in the transfer of money, like PayPal, e-gold etc on the side. |
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If I understand this correctly what Ripple provides is a very efficient mechanism for the issuance, trading and redemption of IOUs. The best analogy I can think of is bank notes issued by individual private banks, as opposed to central banks, against their reserves. These notes become a bearer instrument and are then used as currency. At one point in the early 20th Century this was common but it is now rare. A good example that remains is Scottish pounds https://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling. A similar example in Canada is Canadian Tire money http://en.wikipedia.org/wiki/Canadian_Tire_money In this case the currency is backed by store credit at Canadian Tire and it has been used as currency outside of Canadian Tire. Just as the examples above Ripple IOUs are only as good as the credit of the issuer, and in order for them to become liquid and easy to trade one needs an issuer large enough to have very good credit in the marketplace. The dangers with Ripple are in reality the very same dangers that are present in world banking. In particular when IOUs are used as collateral for the issue of more IOUs there is the ever present danger of overall collapse if the credit of a significant portion of the IOUs becomes questionable. In addition if the underlying asset is Bitcoin or gold rather than say USD, EUR etc then it is not possible for a central banker to come to the rescue by printing more USD, EUR etc. My take is that the issuers of Ripple IOU's are going to be subject to the same type regulation as banks and the likes of Paypal etc., because that is what they are in reality. I expect that the financial regulators will, quite unlike the situation with Bitcoin, have a field day with Ripple, since it is debt based and regulating debt is their primary mandate. |
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I would say corporations using their market share against Bitcoin is by far the greater threat. Apple with their censored closed garden has already far more damage than the actions of any state and yes this includes the recent warrant by the United States DHS. The key difference is that the actions of Apple are capricious and with no checks and balances. States on the other hand are subject to their own courts and laws with all the checks and balances that proper legal process provides.
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There are many of us who simply have no use for Facebook. I personally particularly dislike the closed proprietary nature of Facebook. Now if there were a way do dislike Facebook on bitcointalk.org. While I am at it way to dislike Apple would also be good.
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... The fact that it’s Android-only shows that we’re still a long ways off for bitcoin in the mainstream, as it’s going to take a lot for Apple to one day accept any type of wallet integration into its own apps. ... This is not true. The fact that Bitcoin apps have not passed the Apple censor board does not mean that Bitcoin is not mainstream, it does mean, however, that in the process of becoming mainstream Bitcoin may have to take down Apple since Apple's primary business model based upon censorship, control and stifling innovation. The biggest obstacle in the way of Bitcoin is not "the state" or "the banking system" but rather the lockdown of people's computing devices with DRM by companies like Apple. One simply cannot have truly disruptive innovation in an environment where one has to get permission in order to innovate. |
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There is nothing really new here. Take a file that requires an activation code, key or other action to unlock the content, software etc., and distrubute the locked file via BitTorrent. A lot of "crippleware" software has used this method for years. It is in reality a DRMed file distributed via BitTorrent nothing more.
PS: Can Bitcoin be used as a payment method to unlock crippleware? Absolutly.
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This is not a threat to Bitcoin at all. I have a very strong belief that the governments worldwide will regulate this into oblivion. Why because the underlying business model in fundamentally no different from that of PayPal or e-Gold and subject to the exact same regulatory risks and costs.
The outcome is:
1) It becomes a PayPal clone but only very late to the market.
2) It suffers the fate same of e-gold at the hands of one or more government agencies.
PS: The alchemists were right all along. It is possible to turn lead into gold. It is called Nuclear Physics not Chemistry by the way.
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Government regulations are not the issue that has been made out to be. A Bitcoin ATM operator only has to be concerned with the government regulations in the one location where the ATM is located. One the other hand the BTC withdrawn from the ATM can be spent anywhere in the world.
The biggest problem associated with government financial regulations is that the regulatory framework is fragmented not only at the international and national level but also at the sub national level. It is this fragmentation in regulation that makes becoming a money transmitter prohibitively expensive in many cases. There is nothing preventing a business that provides a Bitcoin ATM to only deal with one or a handful of jurisdictions thereby keeping the cost of regulatory compliance under control.
Jeff Berwick got the issue of government financial regulations completely wrong.
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I updated the initial post to reflect the current situation. I must say did not expect litigation when I started this thread back in March. Now for the relevant question in the speculation sub forum. What impact will this litigation have on the BTC/USD exchange rate?
Nothing. Such pathetic squabbles are irrelevant to most powerful idea for the internet since the WWW. Over the long term I would agree but in the short term this is quite another matter. |
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I updated the initial post to reflect the current situation. I must say did not expect litigation when I started this thread back in March. Now for the relevant question in the speculation sub forum. What impact will this litigation have on the BTC / USD exchange rate?
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Well, according to CoinLab http://coinlab.com/pressAs an established player in the North American Bitcoin industry—registered and fully compliant with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)— CoinLab provided Mt. Gox with U.S. financial and investment partnerships necessary to drive more U.S. volume and pave the way for institutional investors and high net-worth individuals to buy and hold large amounts of the digital currency.
Being compliant in the United States alone is not enough they also have to be compliant in Canada. As far as I can see Coinlab has made no representations that they are compliant in Canada. |
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I'm tempted to say, I told you so, but at least it seems that my reservations (or rather questions) towards Vess were warranted. Here's an old thread that could be relevant: https://bitcointalk.org/index.php?topic=148147.0;allI don't know what Coinlab is trying to achive by suing MtGox like this. First off, if they intend to do business on the US/Canadian market, they need to have trust in their userbase. Knowing about all the scammy operations in Bitcoin-land, any new player must be super careful to build confidence in the community and with customers. You don't build confidence by suing the largest Bitcoin exchange for 75million dollars. I don't know how hard they've tried to get MtGox to cooperate, as we all know it can be slow getting MtGox do do anything, as they're swamped with requests. But I would think Coinlab has more effective channels of communication than the usual customer service channel. Also - if Coinlab want MtGox to cooperate, then suing them won't make them much more cooperative I would think. So it seems to me that Coinlab is burning bridges and attempting a very opportunistic lawsuit. I also read in the lawsuit that Bitcoin is the most successfull kind of digital money. As Bitcoin has less market share than Paypal for instance, I don't think that's an accurate statement. I'm looking forward to a statement from Mark Karpeles regarding all of this. Edit: Someone else in this thread claims it must be an error in the court document, and that it's not 75 million dollars but 75 thousand dollars. That's quite a difference.. One thing I must mention is that I posted a series of questions regarding the implications of the deal for Canadian MTGox customers and while I was provided with a prompt and appropiate response from MTGox, I have not to this day seen a reponse from Coinlab. I also started a thread in speculaton back in March on this subject https://bitcointalk.org/index.php?topic=154400.0;all. The response from Coinlab was The deal's not in trouble. We've moved a few key customers over, will announce more information soon. We are in the market for a communications person -- send your resume's to support@coinlab.com. I also am wating for the formal response to the legal complaint from MTGox. One thing I must say is that there is a lot more to these kind of contract disputes that first meets the eye so I would not rush to any conclusions before the court has passed judgement. |
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