My thoughts from the Bitcoin Conference

[keelba]

The conference was great. There were many people there for many different reasons. Everyone there was smart, they must have been if they were there. Everyone seemed to have some idea on how to launch a new business or make a lot of money with Bitcoin. I don't want to list them to you here because I don't know if these people want me publishing their ideas. I will say, however, that the most prevalent business pitches involved starting up new exchanges.

Probably the coolest thing I saw there, from my perspective anyways, were the Bitcoin ATMs. It looks like there is still some work to be done to really make them practical (taking debit cards and converting to Bitcoin, and/or taking Bitcoin and converting to money).

There seemed to be an under-appreciation for MSB regulations. This topic was taken seriously, and there were a number of people going to these topic related conferences, however, there were far more that didn't seem the least bit concerned about them. I listened to them and it sounds like the government's knee-jerk reaction is to simply call all of us criminals and leave open the possibility of sorting it out later. ANYONE currently converting fiat to Bitcoin and back to fiat MUST be registered in one way or another, as far as the regulations are concerned. The consequences could be very dire and I'm sure many people will be made an example of. Yet, this didn't seem to bother many people there.

Mt. Gox did not have a booth but they were kind enough to supply lunch for us. You'd think it would be the least they could do. Maybe the zealots scared them too much to make an appearance.

More than anything, I came away with a new understanding of our current financial system and some answers to another post I asked about a little while back: Why does the government have to fear Bitcoin? After talking with certain forward thinking individuals, I began to realize the possibilities of certain crimes that we sort of take for granted nowadays, due to the fact that the current system is so locked down it is hard to pull off these crimes. For example, the ease at which a kidnapping/ransom could be done. Or, perhaps someday when Bitcoin is everywhere and everyone has some, it would be very obvious that certain high society types had a lot of Bitcoin and all one would have to do is follow a wealthy individual back to his home and rob him of all of his coin that surely he has and has access to 24 hrs./day. When crimes like these happen, we WANT the various government forces to come to our aid but Bitcoin seriously mitigates their ability to help. Obviously, Bitcoin makes funding terrorism much easier, allows drug lords easy methods of moving money, and aids considerably in money laundering.

I'm sure none of this is new news to most people on these forums. I see the benefits of Bitcoin, privacy, and anonymity, but now I can see both sides of the "coin" too. It's easy to shake your fist at the government and call them bad, but when our house is on fire we want the fire department to come put it out. When we get robbed, extorted, ransomed, etc., we want the government's help in finding the perpetrators and hopefully helping us get back our money and our loved ones. The anonymity and privacy of Bitcoin creates new problems just as it fixes old ones.

Overall, it was an eye-opening experience. I learned much more about Bitcoin, its future and rough road ahead. It was very cool to hear all the peoples' ideas for dealing with the challenges to come.

[keelba]

I didn't get a chance to ask that of Robocoin but I did ask that of Lamassu and their response was something like, "That's your problem." I wasn't too thrilled with that answer. I would think if you're selling a product like an ATM it ought to be turn-key and not having those kinds of answers for their potential customers is definitely not turn-key. It seemed like they were more of a technical bunch and lacking in business acumen. Both products were nice in what they could do and pretty, though.

The bigger issue is finding a merchant processor allowing you to access the other guys' networks. Right now, apparently, no merchant processor will touch Bitcoin. But that could change soon and I will be taking that project on.

[BTC Books]

I didn't get a chance to ask that of Robocoin but I did ask that of Lamassu and their response was something like, "That's your problem." I wasn't too thrilled with that answer. I would think if you're selling a product like an ATM it ought to be turn-key and not having those kinds of answers for their potential customers is definitely not turn-key. It seemed like they were more of a technical bunch and lacking in business acumen. Both products were nice in what they could do and pretty, though.

The bigger issue is finding a merchant processor allowing you to access the other guys' networks. Right now, apparently, no merchant processor will touch Bitcoin. But that could change soon and I will be taking that project on.

I saw roughly the same answer on the convention livecam a couple days ago.

In a way though, it makes sense.  If the ATM people get all the regulations covered, they'd have to do it in every state in the US, and in every country (Cyprus?).  That's hundreds of thousands of dollars per state for MSB licenses, minimum.  God knows how much for other countries - plus bribes.  And then they'd also have to pay the lawyers and accountants who would actually do all that stuff for them.

OTOH, if some guy in California bought five or six ATMs, he'd deal with the laws in Cali, and nowhere else.  And, as a resident, he'd have the existing connections to deal with it efficiently.

Seems rational to me.

[franky1]

a ATM roll out can be done cheaply.

instead of "international company ATM" buying licence for every state, every province and every country of the world. they simply need to franchise.

where lets say a franchisee works as a subsidiary of "international company ATM" and only pays for the licence of that state they wish to work within.

that way "international company ATM" is then covered in that state and the franchisee can then run the business from that state (refilling the machines, maintenance, and placing the machines in key locations within the state) and they get a nice cut of the spread in return.

think about it 50+ franchisee's in america each just paying for a licence for the state they wish to cover.
The UK as another franchisee only paying for the UK regulatory FSA approval.
all under the umbrella name of the ATM company. making it world wide legal to offer fiat/bitcoin swaps.

[crazy_rabbit]

Probably the coolest thing I saw there, from my perspective anyways, were the Bitcoin ATMs. It looks like there is still some work to be done to really make them practical (taking debit cards and converting to Bitcoin, and/or taking Bitcoin and converting to money).

There seemed to be an under-appreciation for MSB regulations. ...

Did anyone discuss how you can implement ATM's without incurring all kinds of fees due to MSB regulations?

Yes, you can't roll out an ATM without being regulated in the USA or EU.

Although there was one device by lamassu, that isn't an ATM at all. It's more like a bitcoin box. Put in cash, get out Bitcoin. One way device. There will still be some rules regarding how the government might see this, but its not an atm.

[wumpus]

In a way though, it makes sense.  If the ATM people get all the regulations covered, they'd have to do it in every state in the US, and in every country (Cyprus?).  That's hundreds of thousands of dollars per state for MSB licenses, minimum.  God knows how much for other countries - plus bribes.  And then they'd also have to pay the lawyers and accountants who would actually do all that stuff for them.

Yes, it is very rational. He just wants to sell hardware internationally, it's up to the buyers to make sure they can use them legally in their respective country. It's the same with any kind of technology.

For example if you buy a software defined radio, it's up to you to get the necessary permit to broadcast on the frequencies that you are going to use, not to the company building the device.

In principle this is just a box that eats bank notes, scans and recognizes them, and can deposit bitcoins in return. Like any vending machine. It's not forbidden to possess, or trade such technology. Using it or rolling it out in large scale, may be in some countries, but that's not up to the hardware vendor.

[keelba]

I do not expect the guy selling the hardware to be licensed in every state and country in the world. I would, however, expect to be able to get answers to these types of questions:
What does it mean to be compliant?
How much it might I expect it to cost to me to become compliant?
How long it could I expect it to take?
What hoops would I have to jump through?
What would be my limits?
What would be my liabilities?
Who could I talk to for assistance? Could I be pointed in the right direction? Have you made any partnerships with any law firms so that the hundreds of clients you bring in, all wanting the exact same thing, could get a bulk discount?
Have you done any market studies to show just how much of a mark up people would be willing to pay and how many customers' dollars per day a given demographic might spend? (Sure, it's OK to answer no to this question but wouldn't it be a great selling point?)


This is the kind of homework that should be done on their end. Maybe they've spent the last 12 months just building the hardware and haven't had the time yet to take it to the next level. If that's the case, then just say so. Tell me, the potential buyer, that you are just now entering that phase of your business and those answers will be coming. Take my information and follow up with me if you believe me to be a real potential buyer. It's not easy being in business. There is much, much more to it than simply creating a better mousetrap and then sitting back and watching the world clamor for your product. So I still stand by what I said previously, these guys seem to understand the technical aspects of their product and have built a pretty and mostly functional machine but do not have the business acumen to be able to sell them. They are the Woz without the Jobs. If I was to buy a bulk of these machines, I would want to buy from a company that I knew was going to be around and would be able to support my hardware if I had issues. I did not get that sense from either company. The door is still wide open in the ATM space.




 

[jim618]

Bitcoin 2013 was insanely great.

I think I am turning into a Bitcoin conference groupie as I have now been to Prague, London 2012 and this one now. I've actually spoken myself hoarse from all the conversations this weekend. On Sunday night a few if us were chatting in the hotel lobby. Everybody was real tired. We accidentally came up with a business plan: 'convert Venuezalan oil to bitcoin by shipping gpus to Caracas and arbitraging their subsidised electricity'. We were all laughing and then stopped. We realised: yeah, that would work.

I've never seen anything quite like this conference.

[QuantPlus]

Why does the government have to fear Bitcoin?

Nice write-up...
As expected lots of great ideas without considering real world implications.

The Government fears milk...
And regulates it up and down the food chain...
So your 80 yo Grandma doesn't get poisoned.

[cbeast]

You would think that ... but this is Bitcoin.  Just about all the businesses are like that.

There is no way that product is profitable if you have be an MSP with auditors and franchises.

Like every other industry, soon those jobs will all be automated and financial businesses will become much more profitable without human labor costs. The food service industry is in dire need of minimum wage employees and will welcome the displaced auditors.

[SamS]

You would think that ... but this is Bitcoin.  Just about all the businesses are like that.

There is no way that product is profitable if you have be an MSP with auditors and franchises.

Like every other industry, soon those jobs will all be automated and financial businesses will become much more profitable without human labor costs. The food service industry is in dire need of minimum wage employees and will welcome the displaced auditors.

The way you get rid of tax preparers is with transaction based taxation at the time the transaction is run. The way you get rid of auditors is...? That one eludes me as people cheat all the time and all an auditor does is increase the risk associated with cheating and thereby reduce the level of cheating. They don't prevent it.   

[yocko06]

the bitcoin 2013 conference was great. it was well worth the trip over from Australia. I have come away feeling even more confident in bitcoin and the community. there was some very interesting things discussed and alto of people working hard at new ideas. This was great for making contacts and friends who have similar interests and business ideas.
bitcoin 2013 was a huge success.

[cbeast]

You would think that ... but this is Bitcoin.  Just about all the businesses are like that.

There is no way that product is profitable if you have be an MSP with auditors and franchises.

Like every other industry, soon those jobs will all be automated and financial businesses will become much more profitable without human labor costs. The food service industry is in dire need of minimum wage employees and will welcome the displaced auditors.

The way you get rid of tax preparers is with transaction based taxation at the time the transaction is run. The way you get rid of auditors is...? That one eludes me as people cheat all the time and all an auditor does is increase the risk associated with cheating and thereby reduce the level of cheating. They don't prevent it.   

Bitcoin supports triple-entry accounting which is absolutely impossible to "cook." Businesses will adapt automated biometric technologies for ID requirements. I hope future conferences will feature these technologies. The future looks bright!

BTW, I hope there will be video links for those of us unable to attend.

[CryptoJunky]

Good write up, sounds like it was a pretty positive experience. It'll be interesting to see if a true alternative to MtGox opens up in the next year.

[SamS]

You would think that ... but this is Bitcoin.  Just about all the businesses are like that.

There is no way that product is profitable if you have be an MSP with auditors and franchises.

Like every other industry, soon those jobs will all be automated and financial businesses will become much more profitable without human labor costs. The food service industry is in dire need of minimum wage employees and will welcome the displaced auditors.

The way you get rid of tax preparers is with transaction based taxation at the time the transaction is run. The way you get rid of auditors is...? That one eludes me as people cheat all the time and all an auditor does is increase the risk associated with cheating and thereby reduce the level of cheating. They don't prevent it.   

Bitcoin supports triple-entry accounting which is absolutely impossible to "cook." Businesses will adapt automated biometric technologies for ID requirements. I hope future conferences will feature these technologies. The future looks bright!

BTW, I hope there will be video links for those of us unable to attend.

I know many people who look forward to being "chipped." 

[edd]

Good write up, sounds like it was a pretty positive experience. It'll be interesting to see if a true alternative to MtGox opens up in the next year.

From the conversations I had, it looks like the very near future will bring opportunities to decentralize the exchanging of conventional and crypto currencies. Some very intelligent and capable groups of talented individuals are hard at work on it. I believe we will see more than one successful alternative.

[SamS]

You would think that ... but this is Bitcoin.  Just about all the businesses are like that.

There is no way that product is profitable if you have be an MSP with auditors and franchises.

Like every other industry, soon those jobs will all be automated and financial businesses will become much more profitable without human labor costs. The food service industry is in dire need of minimum wage employees and will welcome the displaced auditors.

The way you get rid of tax preparers is with transaction based taxation at the time the transaction is run. The way you get rid of auditors is...? That one eludes me as people cheat all the time and all an auditor does is increase the risk associated with cheating and thereby reduce the level of cheating. They don't prevent it.   

the regulators force you to get auditors.

They do. It saves them enforcement time overall and puts the expense on the business -- clever eh?  It's not like the system doesn't get gamed, sometimes spectacularly. But the theory seems sound if not the practice.