[ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open

[grandmama]

Check this out. Looks cool. I will be presenting DNotes here:

Silicon Dragon NY 2015

Nasdaq MarketSite
4 Times Square

June 22, 2015 5:30 PM (EDT)

http://www.getvamos.com/events/silicon-dragon-ny-2015/9828147

That to me looks like a busy place with bright lights shining, just like you will be shining when you present!

[Chase]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I'm not an expert, but here's how I would approach it.

1. Set up a set of standards related to website security, amount of funds backing up user accounts, insurance coverage (if there ever is such a thing), and various other reasonable precautions that large sites which hold user funds should be taking.
2. Next, set up a grading system of some sort. So an A rated company adheres to the strictest standards, whereas a C or D rated company adheres to more lenient standards.
3. The conditions which must be met for each grade are clearly and publicly posted so everyone knows.
4. Companies can post their grade based on what standards they are following. Potential users see it and can make an informed decision based on their own risk tolerance. Some consumers may choose to only deal with A and B companies. Others may be fine with doing some business with C and D companies.
5. Adhering to these standards is completely voluntary. No one forces any business to meet those standards. However, if they don't meet them, they don't get to advertise themselves as an A rated company. They may lose a lot of potential customers but most likely save on their up front costs. Companies can at any time "upgrade" to a higher grade by meeting that grade level's standards.
6. Standards would be determined by some sort of group of knowledgeable industry leaders and whoever else might make up these types of groups.
7. There is some sort of neutral auditing group whose job it is to review companies and determine which standards they are meeting and issue them their "grade." This auditing group also posts all participating companies and their grades on a website that anyone can read, so that companies claiming to have a certain grade can be checked against the auditing group's list. That site could also be educational about what the standards mean and why they are important, and can also warn people about certain types of sites which are plain never going to make the grade and why (Bitcoin doublers, for example).
8. Everything is done as transparently as possible.
9. A company that uses other companies (for example a retail site that has a 3rd party payment gateway) should have a page where all their third parties and their grades are posted as well.

The bottom line is that in my opinion, the kind of "regulation" that really serves the public is standardization which makes it very clear how a service measures up in terms of various conditions the general public would or should care about. A service can either make the grade or not but it has the right to exist and conduct business regardless. But the company making the grade is likely to attract more customers.

I'm not a huge fan of companies being "forced" to make a certain standardization grade, because I believe that potential customers have the right and ability to make an informed decision. I do believe that such criteria should be well known and it should be very transparent how grades are determined and given out and then the public decides which companies to patronize based on those grades. Basically, the government or some kind of regulatory body can really help everyone by setting and enforcing standards (or at least overseeing that process), and making it clear how businesses measure up. But then leave the choice to the consumer. Maybe I will only trade on an A rated exchange but someone else might be fine with a B rated exchange because the fees are lower. Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting. They would have to work harder to earn their customers' trust but at least they could be conducting business while raising funds to meet various criteria. A reputable online business is going to voluntarily take certain precautions to make sure their customers' accounts and funds are as secure as possible, but probably won't be able to start off using the absolute most state of the art security systems. That should be fine as long as what they do have (and don't have) is clearly disclosed, or at least what grade they have.

"Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting."  I think the whole concept of levelling up is brilliant, wiser!  Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

[Chase]

For anyone who is new to DNotes or hasn't been following the forum lately, DNotes is the only digital currency at Silicon Dragon NY 2015.  Way to go Alan and DNotes!!!

      


Silicon Dragon NY 2015
Nasdaq MarketSite
4 Times Square

Monday at 17:30 (EDT)

Silicon Dragon NY 2015: GLOBAL INNOVATION REVOLUTION - LED BY THE WORLD'S LEADING TECH TITANS, CHINA & THE U.S. (+ India, Israel)

DEALMAKER PANEL
Jim Robinson, Co-founder/Managing Partner, RRE Ventures
Pat Kenealy, Managing Director, IDG Ventures USA
Alessandro Piol, Partner & Co-founder, Alphaprime Ventures
Annemarie Tierney, VP, Strategy & New Markets, NASDAQ Private Market
Claudia Iannazzo, Partner, Pereg Ventures
Moderator: Rebecca Fannin, Silicon Dragon / Forbes

INNOVATION SPOTLIGHT: Digital Currencies
Francesco Rulli, Founder, BitLanders & BitCharities
Sarah Martin, VP, Digital Currency Council
Alan Yong, Founder, DNotes
Moderator: Porter Bibb, Managing Partner, MediaTech Capital Partners

TECH CHATS
Mark Hookey, CEO, DemystData
Ronald Li, Founder, Novoheart
Ding Ding, Founder, SayWhat
HIGHLIGHT
Mobile photos of Beijing every day life taken through the lens of China tech guru Frank Yu  
MODERATORS: Christine Lu, Founder, 8x8; Bill Holstein, Business Journalist and Author

[DNotes]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I'm not an expert, but here's how I would approach it.

1. Set up a set of standards related to website security, amount of funds backing up user accounts, insurance coverage (if there ever is such a thing), and various other reasonable precautions that large sites which hold user funds should be taking.
2. Next, set up a grading system of some sort. So an A rated company adheres to the strictest standards, whereas a C or D rated company adheres to more lenient standards.
3. The conditions which must be met for each grade are clearly and publicly posted so everyone knows.
4. Companies can post their grade based on what standards they are following. Potential users see it and can make an informed decision based on their own risk tolerance. Some consumers may choose to only deal with A and B companies. Others may be fine with doing some business with C and D companies.
5. Adhering to these standards is completely voluntary. No one forces any business to meet those standards. However, if they don't meet them, they don't get to advertise themselves as an A rated company. They may lose a lot of potential customers but most likely save on their up front costs. Companies can at any time "upgrade" to a higher grade by meeting that grade level's standards.
6. Standards would be determined by some sort of group of knowledgeable industry leaders and whoever else might make up these types of groups.
7. There is some sort of neutral auditing group whose job it is to review companies and determine which standards they are meeting and issue them their "grade." This auditing group also posts all participating companies and their grades on a website that anyone can read, so that companies claiming to have a certain grade can be checked against the auditing group's list. That site could also be educational about what the standards mean and why they are important, and can also warn people about certain types of sites which are plain never going to make the grade and why (Bitcoin doublers, for example).
8. Everything is done as transparently as possible.
9. A company that uses other companies (for example a retail site that has a 3rd party payment gateway) should have a page where all their third parties and their grades are posted as well.

The bottom line is that in my opinion, the kind of "regulation" that really serves the public is standardization which makes it very clear how a service measures up in terms of various conditions the general public would or should care about. A service can either make the grade or not but it has the right to exist and conduct business regardless. But the company making the grade is likely to attract more customers.

I'm not a huge fan of companies being "forced" to make a certain standardization grade, because I believe that potential customers have the right and ability to make an informed decision. I do believe that such criteria should be well known and it should be very transparent how grades are determined and given out and then the public decides which companies to patronize based on those grades. Basically, the government or some kind of regulatory body can really help everyone by setting and enforcing standards (or at least overseeing that process), and making it clear how businesses measure up. But then leave the choice to the consumer. Maybe I will only trade on an A rated exchange but someone else might be fine with a B rated exchange because the fees are lower. Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting. They would have to work harder to earn their customers' trust but at least they could be conducting business while raising funds to meet various criteria. A reputable online business is going to voluntarily take certain precautions to make sure their customers' accounts and funds are as secure as possible, but probably won't be able to start off using the absolute most state of the art security systems. That should be fine as long as what they do have (and don't have) is clearly disclosed, or at least what grade they have.

Thank you Wiser, nicely done! It would put the control in the hands of the consumer to make their own informed decision.

[DNotes]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I tend to view the less regulation the better. I understand that most regulators fly the banner of consumer protection but like anything else in government, it tends to swing to corruption, sooner or later.

When corruption can create barriers of entry for the little guy, regulation has lost it's own battle of protecting the consumer. You cannot protect the general public when you protect established companies who run the regulators.

That is what scares me most when Bitcoin companies begin becoming cozy with the regulation establishment.

However, I realize in this political climate where you play ball or go home, many Bitcoin and altcoin companies will play ball. I tend to agree with Andreas's opinions on regulations in Bitcoin. If you don't know, then youtube is your friend

I am interested to see how all of the regulatory mess plays out over the next few years. I predict that it becomes very, very messy.

Thanks OCTOPARTY.

I have seen Andreas videos.

Here is the short version:
https://www.youtube.com/watch?v=hL67jtVimFA

And the long version:
https://www.youtube.com/watch?v=tgEDOBgYg-g

[wiser]

Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

I hadn't thought of that, but I can see it working. Certain markets/exchanges would only be open to grade A businesses, while others might be open to C and D businesses. There's a demand for both, as we've seen with penny stocks. It's just that people buying penny stocks are prepared to take greater risks than those buying stocks of more established companies.

Ultimately, I think the goal of regulation or licensing or standardization should be to ensure that people are buying what they think they are buying. You want to avoid the situation where a consumer believes in good faith that he or she is buying stock of a well established company when he is actually buying something totally different, such as a high risk stock of an upstart company.

I don't know if anyone here has followed the whole GAW Miners story, which I got caught up in, but basically what happened to me was that I bought what I was led to believe was hosted mining equipment, which then morphed into some kind of glorified staking wallet. Regardless of how legitimate the staking wallet is/was, the problem I have is that I bought one thing that turned out to be an entirely different thing. I would have preferred to have bought what I intended to buy in the first place.

Regulation, in my opinion, can help consumers be clear on what they are buying by setting standards for such things. Once everything has been defined and put into its appropriate category, then the choice can be left up to the consumer. I may choose to buy a stock that's designated as high risk (and have to go to the special place to buy it). That is fine. I assume the risk and responsibility for that. What I hope the regulation does for me is help me avoid the scenario where I think I'm buying a stable and low risk S&P 500 stock but what I get instead is a penny stock (and then the stock goes belly up).

[RJF]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I'm not an expert, but here's how I would approach it.

1. Set up a set of standards related to website security, amount of funds backing up user accounts, insurance coverage (if there ever is such a thing), and various other reasonable precautions that large sites which hold user funds should be taking.
2. Next, set up a grading system of some sort. So an A rated company adheres to the strictest standards, whereas a C or D rated company adheres to more lenient standards.
3. The conditions which must be met for each grade are clearly and publicly posted so everyone knows.
4. Companies can post their grade based on what standards they are following. Potential users see it and can make an informed decision based on their own risk tolerance. Some consumers may choose to only deal with A and B companies. Others may be fine with doing some business with C and D companies.
5. Adhering to these standards is completely voluntary. No one forces any business to meet those standards. However, if they don't meet them, they don't get to advertise themselves as an A rated company. They may lose a lot of potential customers but most likely save on their up front costs. Companies can at any time "upgrade" to a higher grade by meeting that grade level's standards.
6. Standards would be determined by some sort of group of knowledgeable industry leaders and whoever else might make up these types of groups.
7. There is some sort of neutral auditing group whose job it is to review companies and determine which standards they are meeting and issue them their "grade." This auditing group also posts all participating companies and their grades on a website that anyone can read, so that companies claiming to have a certain grade can be checked against the auditing group's list. That site could also be educational about what the standards mean and why they are important, and can also warn people about certain types of sites which are plain never going to make the grade and why (Bitcoin doublers, for example).
8. Everything is done as transparently as possible.
9. A company that uses other companies (for example a retail site that has a 3rd party payment gateway) should have a page where all their third parties and their grades are posted as well.

The bottom line is that in my opinion, the kind of "regulation" that really serves the public is standardization which makes it very clear how a service measures up in terms of various conditions the general public would or should care about. A service can either make the grade or not but it has the right to exist and conduct business regardless. But the company making the grade is likely to attract more customers.

I'm not a huge fan of companies being "forced" to make a certain standardization grade, because I believe that potential customers have the right and ability to make an informed decision. I do believe that such criteria should be well known and it should be very transparent how grades are determined and given out and then the public decides which companies to patronize based on those grades. Basically, the government or some kind of regulatory body can really help everyone by setting and enforcing standards (or at least overseeing that process), and making it clear how businesses measure up. But then leave the choice to the consumer. Maybe I will only trade on an A rated exchange but someone else might be fine with a B rated exchange because the fees are lower. Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting. They would have to work harder to earn their customers' trust but at least they could be conducting business while raising funds to meet various criteria. A reputable online business is going to voluntarily take certain precautions to make sure their customers' accounts and funds are as secure as possible, but probably won't be able to start off using the absolute most state of the art security systems. That should be fine as long as what they do have (and don't have) is clearly disclosed, or at least what grade they have.

"Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting."  I think the whole concept of levelling up is brilliant, wiser!  Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

Chase/Wiser; totally agree here. And one thing really stands out, website security. I, personally, would put very little regulation on the "coin" itself and focus more on the security of websites dealing with the public, especially exchanges. I tend to compare crypto with cash when discussing human interaction. I can still hand you a dollar, or one hundred thousand dollars for that matter, in private, you to me, without jumping through any hoops. In other words, I can transfer wealth to you without regulation. The whole regulatory nightmare exists on a previous level where you obtain that cash, and in the banks where you "store" it.

In other words, the end transaction of moving money from me to you, in private has no inescapable regulatory burden. If I remain unbanked and outside the financial system, regulations do not really effect me as long as I don't need to enter that system.

I realize that in real life this is near impossible but, there are plenty people doing it even here in the US. These people live off the grid and outside what you and I consider "society". Not really a bad thing but, not for most of us.

Getting back to the issue at hand, in crypto, its the "last mile" that is the problem. There will always be bad actors, it's human nature and it's easy to take advantage of someone hiding behind a website. Also, I don't believe in KYC and AML laws, basically, they are useless and present an extreme barrier to entry to our our industry. They raise the bar so high over the heads of entrepreneurs that innovation and free thinking are eliminated and replaced with "the same old crap" from established entities pretending to be startups.

My vision of fair and balanced regulation and crypto business startup would go something like this:

Prerequisites for the business,

1. If you want to start an online crypto business, identify yourself. No handles or nicks, use real names.
2. Clean, verified background check, no criminals allowed.
3. Prove you have the resources to cover your proposed operation, put up a bond or guarantee reserves large enough to cover possible customer losses.
4. Have a solid business plan, not just an idea.
5. If more than sole proprietor, incorporate, LLC, etc for legitimacy and your own protection.
6. Apply for and obtain the license described below.  

Government, (I would prefer one licensing agency for the country but, we all know this is not possible)

1. It's ok for states to issue their own license but, the fees must be fair and the wording must include the ability to recognize another states regulations without having to obtain a license in a state other than the one the crypto business resides in. This could be federal but does not have to be. States could form a consortium or similiar agency for uniform regulation across all 50 US states.

2. Be reasonable. It doesn't cost $5000.00 to verify information, make a database entry and issue a piece of paper. And, use a 5 yr renewal base at a lower cost than the initial license.

3. Require the basics not the world. Include 1 through 6 above and allow self policing for AML and KYC requirements. Set a transaction amount where this reporting would kick in but realize that due to the very nature of the technology, traditional reporting is not going to work for most crypto businesses.

Again, the biggest issue I see is the rush towards applying existing, archaic regulations to crypo especially when it is not even possible to meet those requirements. And, right along with this is very real possibility of having 50 different licenses requiring basically the same stuff but all wanting multiple thousand dollar fees for issue. That's crazy. The states need to be uniform in their control and allow out of state businesses to access customers without another license burden as long as the business has a license in it's primary state of residence.

Again, I hate to say it but, perhaps one federal requirement that superseeds the states would make sense though it is highly unlikely that could happen.

[DNotes]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I'm not an expert, but here's how I would approach it.

1. Set up a set of standards related to website security, amount of funds backing up user accounts, insurance coverage (if there ever is such a thing), and various other reasonable precautions that large sites which hold user funds should be taking.
2. Next, set up a grading system of some sort. So an A rated company adheres to the strictest standards, whereas a C or D rated company adheres to more lenient standards.
3. The conditions which must be met for each grade are clearly and publicly posted so everyone knows.
4. Companies can post their grade based on what standards they are following. Potential users see it and can make an informed decision based on their own risk tolerance. Some consumers may choose to only deal with A and B companies. Others may be fine with doing some business with C and D companies.
5. Adhering to these standards is completely voluntary. No one forces any business to meet those standards. However, if they don't meet them, they don't get to advertise themselves as an A rated company. They may lose a lot of potential customers but most likely save on their up front costs. Companies can at any time "upgrade" to a higher grade by meeting that grade level's standards.
6. Standards would be determined by some sort of group of knowledgeable industry leaders and whoever else might make up these types of groups.
7. There is some sort of neutral auditing group whose job it is to review companies and determine which standards they are meeting and issue them their "grade." This auditing group also posts all participating companies and their grades on a website that anyone can read, so that companies claiming to have a certain grade can be checked against the auditing group's list. That site could also be educational about what the standards mean and why they are important, and can also warn people about certain types of sites which are plain never going to make the grade and why (Bitcoin doublers, for example).
8. Everything is done as transparently as possible.
9. A company that uses other companies (for example a retail site that has a 3rd party payment gateway) should have a page where all their third parties and their grades are posted as well.

The bottom line is that in my opinion, the kind of "regulation" that really serves the public is standardization which makes it very clear how a service measures up in terms of various conditions the general public would or should care about. A service can either make the grade or not but it has the right to exist and conduct business regardless. But the company making the grade is likely to attract more customers.

I'm not a huge fan of companies being "forced" to make a certain standardization grade, because I believe that potential customers have the right and ability to make an informed decision. I do believe that such criteria should be well known and it should be very transparent how grades are determined and given out and then the public decides which companies to patronize based on those grades. Basically, the government or some kind of regulatory body can really help everyone by setting and enforcing standards (or at least overseeing that process), and making it clear how businesses measure up. But then leave the choice to the consumer. Maybe I will only trade on an A rated exchange but someone else might be fine with a B rated exchange because the fees are lower. Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting. They would have to work harder to earn their customers' trust but at least they could be conducting business while raising funds to meet various criteria. A reputable online business is going to voluntarily take certain precautions to make sure their customers' accounts and funds are as secure as possible, but probably won't be able to start off using the absolute most state of the art security systems. That should be fine as long as what they do have (and don't have) is clearly disclosed, or at least what grade they have.

"Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting."  I think the whole concept of levelling up is brilliant, wiser!  Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

Chase/Wiser; totally agree here. And one thing really stands out, website security. I, personally, would put very little regulation on the "coin" itself and focus more on the security of websites dealing with the public, especially exchanges. I tend to compare crypto with cash when discussing human interaction. I can still hand you a dollar, or one hundred thousand dollars for that matter, in private, you to me, without jumping through any hoops. In other words, I can transfer wealth to you without regulation. The whole regulatory nightmare exists on a previous level where you obtain that cash, and in the banks where you "store" it.

In other words, the end transaction of moving money from me to you, in private has no inescapable regulatory burden. If I remain unbanked and outside the financial system, regulations do not really effect me as long as I don't need to enter that system.

I realize that in real life this is near impossible but, there are plenty people doing it even here in the US. These people live off the grid and outside what you and I consider "society". Not really a bad thing but, not for most of us.

Getting back to the issue at hand, in crypto, its the "last mile" that is the problem. There will always be bad actors, it's human nature and it's easy to take advantage of someone hiding behind a website. Also, I don't believe in KYC and AML laws, basically, they are useless and present an extreme barrier to entry to our our industry. They raise the bar so high over the heads of entrepreneurs that innovation and free thinking are eliminated and replaced with "the same old crap" from established entities pretending to be startups.

My vision of fair and balanced regulation and crypto business startup would go something like this:

Prerequisites for the business,

1. If you want to start an online crypto business, identify yourself. No handles or nicks, use real names.
2. Clean, verified background check, no criminals allowed.
3. Prove you have the resources to cover your proposed operation, put up a bond or guarantee reserves large enough to cover possible customer losses.
4. Have a solid business plan, not just an idea.
5. If more than sole proprietor, incorporate, LLC, etc for legitimacy and your own protection.
6. Apply for and obtain the license described below.  

Government, (I would prefer one licensing agency for the country but, we all know this is not possible)

1. It's ok for states to issue their own license but, the fees must be fair and the wording must include the ability to recognize another states regulations without having to obtain a license in a state other than the one the crypto business resides in. This could be federal but does not have to be. States could form a consortium or similiar agency for uniform regulation across all 50 US states.

2. Be reasonable. It doesn't cost $5000.00 to verify information, make a database entry and issue a piece of paper. And, use a 5 yr renewal base at a lower cost than the initial license.

3. Require the basics not the world. Include 1 through 6 above and allow self policing for AML and KYC requirements. Set a transaction amount where this reporting would kick in but realize that due to the very nature of the technology, traditional reporting is not going to work for most crypto businesses.

Again, the biggest issue I see is the rush towards applying existing, archaic regulations to crypo especially when it is not even possible to meet those requirements. And, right along with this is very real possibility of having 50 different licenses requiring basically the same stuff but all wanting multiple thousand dollar fees for issue. That's crazy. The states need to be uniform in their control and allow out of state businesses to access customers without another license burden as long as the business has a license in it's primary state of residence.

Again, I hate to say it but, perhaps one federal requirement that superseeds the states would make sense though it is highly unlikely that could happen.

Excellent job all, this would certainly be on the right track. Accountability for crypto businesses and reasonable requirements for consumer protection.

[DNotes]

Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

I hadn't thought of that, but I can see it working. Certain markets/exchanges would only be open to grade A businesses, while others might be open to C and D businesses. There's a demand for both, as we've seen with penny stocks. It's just that people buying penny stocks are prepared to take greater risks than those buying stocks of more established companies.

Ultimately, I think the goal of regulation or licensing or standardization should be to ensure that people are buying what they think they are buying. You want to avoid the situation where a consumer believes in good faith that he or she is buying stock of a well established company when he is actually buying something totally different, such as a high risk stock of an upstart company.

I don't know if anyone here has followed the whole GAW Miners story, which I got caught up in, but basically what happened to me was that I bought what I was led to believe was hosted mining equipment, which then morphed into some kind of glorified staking wallet. Regardless of how legitimate the staking wallet is/was, the problem I have is that I bought one thing that turned out to be an entirely different thing. I would have preferred to have bought what I intended to buy in the first place.

Regulation, in my opinion, can help consumers be clear on what they are buying by setting standards for such things. Once everything has been defined and put into its appropriate category, then the choice can be left up to the consumer. I may choose to buy a stock that's designated as high risk (and have to go to the special place to buy it). That is fine. I assume the risk and responsibility for that. What I hope the regulation does for me is help me avoid the scenario where I think I'm buying a stable and low risk S&P 500 stock but what I get instead is a penny stock (and then the stock goes belly up).

Sorry to hear you got caught up in the GAW mining fiasco. That is a good example of why we need consumer protection and regulation.

[wiser]

Sorry to hear you got caught up in the GAW mining fiasco. That is a good example of why we need consumer protection and regulation.

I didn't suffer too badly from it. It was a valuable learning experience. The most important lesson I learned was that even if everything does turn out to be legit, having drama in a company is actually very expensive for the investor--expensive enough that you really do want to avoid investing where there is drama. After a few times of poring through GAW's forum trying to sort out what was what in all the drama... well, let's just say that rediscovering CryptoMoms and DNotes (which up to that point had been kind of in the background for me) was a real breath of fresh air.

EDIT: For those who might be interested, I did write about my experience and what I learned in my blog. It's a bit OT, but since I mention DNotes as being a good solid no drama investment, I guess it's not entirely OT.

[Dyna]

Sorry to hear you got caught up in the GAW mining fiasco. That is a good example of why we need consumer protection and regulation.

I didn't suffer too badly from it. It was a valuable learning experience. The most important lesson I learned was that even if everything does turn out to be legit, having drama in a company is actually very expensive for the investor--expensive enough that you really do want to avoid investing where there is drama. After a few times of poring through GAW's forum trying to sort out what was what in all the drama... well, let's just say that rediscovering CryptoMoms and DNotes (which up to that point had been kind of in the background for me) was a real breath of fresh air.

EDIT: For those who might be interested, I did write about my experience and what I learned in my blog. It's a bit OT, but since I mention DNotes as being a good solid no drama investment, I guess it's not entirely OT.

"having drama in a company is actually very expensive for the investor--expensive enough that you really do want to avoid investing where there is drama." Wiser, June 16, 2015

That is precisely why DNotes' First Rule of Engagement is "DO NOT ENGAGE." We owe it to our stakeholders not to create drama to feed our own ego and be stuck in the mud. What this community has accomplished in a little over a year is quite remarkable. If we have a trade secret for DNotes' success that may be it. No drama.

[wiser]

"having drama in a company is actually very expensive for the investor--expensive enough that you really do want to avoid investing where there is drama." Wiser, June 16, 2015

That is precisely why DNotes' First Rule of Engagement is "DO NOT ENGAGE." We owe it to our stakeholders not to create drama to feed our own ego and be stuck in the mud. What this community has accomplished in a little over a year is quite remarkable. If we have a trade secret for DNotes' success that may be it. No drama.

That's a policy I can get wholeheartedly behind. It actually applies to a lot of things in life--church community, family relationships, career, etc. With crypto, though, because of how quickly things move, you can see the devastating impact of not adhering to this principle much sooner than you might notice it in real life. Having come from a background where drama was the norm, I will say that I am glad to have been given the opportunity to learn the truth about drama through the crypto fast track, even if I did learn it the hard way.

[DNotes]

Sorry to hear you got caught up in the GAW mining fiasco. That is a good example of why we need consumer protection and regulation.

I didn't suffer too badly from it. It was a valuable learning experience. The most important lesson I learned was that even if everything does turn out to be legit, having drama in a company is actually very expensive for the investor--expensive enough that you really do want to avoid investing where there is drama. After a few times of poring through GAW's forum trying to sort out what was what in all the drama... well, let's just say that rediscovering CryptoMoms and DNotes (which up to that point had been kind of in the background for me) was a real breath of fresh air.

EDIT: For those who might be interested, I did write about my experience and what I learned in my blog. It's a bit OT, but since I mention DNotes as being a good solid no drama investment, I guess it's not entirely OT.

Glad it wasn't too painful. Yep, I'm sure that is a great indicator of deeper problems in the organization.

[RJF]

"DNotes. No drama, just value." 

[wiser]

"DNotes. No drama, just value." 

Well, we all know that the "D" in DNotes does not stand for Drama

[Dyna]

From CryptoMoms Forum:

Quote from: Ashley on Today at 01:23:39 AM

This is pretty good, it's what the writer thinks might trigger mainstream adoption.


"Cryptocurrency: This Is How Digital Money Will Challenge the Global Economic Order"

https://www.linkedin.com/pulse/cryptocurrency-how-digital-money-challenge-global-economic-casey?trk=hp-feed-article-title

***********************************

Quote From Shepherd:

“Imagine how much wider the use of cryptocurrency would be if a major retailer such as Walmart switched to a blockchain- based payment network in order to cut tens of billions of dollars in transaction costs off the $350 billion it sends annually to tens of thousands of suppliers worldwide.  ………….

If Mexico became the first crypto-focused government, it could turn itself into a crypto-tech hub, encouraging governments of the many other developing nations that it trades with to follow.”

These are exciting possibilities but, in my humble opinion, highly unlikely to happen. A rapid large scale adoption is very risky and massively destructive. Could Walmart quietly acquire $1 billion worth of Bitcoin just to fill the cash requirement pipeline without causing rampant volatilities? Not likely. It could be a logistic nightmare.

However, over the longer term of 5 to 10 years, mass acceptance of digital currency is inevitable, provided that there is a stable trustworthy digital currency. That digital currency may not be Bitcoin.

DNotes firmly believes that it is possible to systematically create a digital currency from the ground up that is superior to fiat currency in meeting the full functions of money as a unit of account, a medium of exchange and a store of value. To be superior as the global digital currency, it must be a stable trustworthy digital currency available for everyone irrespective of financial standings. It must start with a solid foundation with a gradual acceptance at the grass-root level.

Read More:
‘DNotes Will Be Known as the Currency with a Purpose’
http://cointelegraph.com/news/114557/dnotes-will-be-known-as-the-currency-with-a-purpose

[grandmama]

From CryptoMoms Forum:

Quote from: Ashley on Today at 01:23:39 AM

This is pretty good, it's what the writer thinks might trigger mainstream adoption.


"Cryptocurrency: This Is How Digital Money Will Challenge the Global Economic Order"

https://www.linkedin.com/pulse/cryptocurrency-how-digital-money-challenge-global-economic-casey?trk=hp-feed-article-title

***********************************

Quote From Shepherd:

“Imagine how much wider the use of cryptocurrency would be if a major retailer such as Walmart switched to a blockchain- based payment network in order to cut tens of billions of dollars in transaction costs off the $350 billion it sends annually to tens of thousands of suppliers worldwide.  ………….

If Mexico became the first crypto-focused government, it could turn itself into a crypto-tech hub, encouraging governments of the many other developing nations that it trades with to follow.”

These are exciting possibilities but, in my humble opinion, highly unlikely to happen. A rapid large scale adoption is very risky and massively destructive. Could Walmart quietly acquire $1 billion worth of Bitcoin just to fill the cash requirement pipeline without causing rampant volatilities? Not likely. It could be a logistic nightmare.

However, over the longer term of 5 to 10 years, mass acceptance of digital currency is inevitable, provided that there is a stable trustworthy digital currency. That digital currency may not be Bitcoin.

DNotes firmly believes that it is possible to systematically create a digital currency from the ground up that is superior to fiat currency in meeting the full functions of money as a unit of account, a medium of exchange and a store of value. To be superior as the global digital currency, it must be a stable trustworthy digital currency available for everyone irrespective of financial standings. It must start with a solid foundation with a gradual acceptance at the grass-root level.

Read More:
‘DNotes Will Be Known as the Currency with a Purpose’
http://cointelegraph.com/news/114557/dnotes-will-be-known-as-the-currency-with-a-purpose

Most generally the first horse out of the gate is not the winner.  The winner is the, steady as she goes horse, who is about mid-pack.

[grandmama]

For anyone who is new to DNotes or hasn't been following the forum lately, DNotes is the only digital currency at Silicon Dragon NY 2015.  Way to go Alan and DNotes!!!

      


Silicon Dragon NY 2015
Nasdaq MarketSite
4 Times Square

Monday at 17:30 (EDT)

Silicon Dragon NY 2015: GLOBAL INNOVATION REVOLUTION - LED BY THE WORLD'S LEADING TECH TITANS, CHINA & THE U.S. (+ India, Israel)

DEALMAKER PANEL
Jim Robinson, Co-founder/Managing Partner, RRE Ventures
Pat Kenealy, Managing Director, IDG Ventures USA
Alessandro Piol, Partner & Co-founder, Alphaprime Ventures
Annemarie Tierney, VP, Strategy & New Markets, NASDAQ Private Market
Claudia Iannazzo, Partner, Pereg Ventures
Moderator: Rebecca Fannin, Silicon Dragon / Forbes

INNOVATION SPOTLIGHT: Digital Currencies
Francesco Rulli, Founder, BitLanders & BitCharities
Sarah Martin, VP, Digital Currency Council
Alan Yong, Founder, DNotes
Moderator: Porter Bibb, Managing Partner, MediaTech Capital Partners

TECH CHATS
Mark Hookey, CEO, DemystData
Ronald Li, Founder, Novoheart
Ding Ding, Founder, SayWhat
HIGHLIGHT
Mobile photos of Beijing every day life taken through the lens of China tech guru Frank Yu  
MODERATORS: Christine Lu, Founder, 8x8; Bill Holstein, Business Journalist and Author

And again congrats to the team at DNotes, without everyone putting in thoughts and energy to this we would not be where we are now... and that is with Alan presenting here.  So very proud of everyone who contributes here no matter how large or small every bit of chatter makes one think about the future.

[DNotes]

Interesting concept here, blockchain based gift cards to prevent fraud and theft.

Why The Bitcoin Blockchain Could Make Gift Cards, A Consumer Favorite, Even More Beloved

[...]

Over the years, gift cards such as $10 Starbucks SBUX +0.42% cards, $50 Target TGT +0.72% cards and $100 iTunes cards have become a handy go-to item for gifts and prizes. According to the National Retail Foundation, they’ve been the number one most requested holiday item eight years running. The amount of money put on gift cards in 2014 was about $125 billion, according to CEB TowerGroup, which provides market insights in financial services.

But the industry suffers from a lot of fraud. The current system relies on trust that the processor, distributor, reseller, gift buyer and gift receiver won’t steal the 16- to 19-digit code on a gift card and use it before the recipient can shop with it. It’s basically like handing a key from person to person, hoping no one makes a copy along the way.

But the system has a lot of leakage, from stealing by employees, counterfeiting and skimming of numbers. According to the National Retail Foundation, 78% of retailers have been the victim of gift card fraud. Usually, it’s not possible to tell a code has been compromised until the gift recipient tries to redeem it, and then it’s impossible to identify who the fraudster was.

Using the blockchain would represent an improvement in security over this system. A blockchain-powered process generates a new address for each transaction, even if the ultimate destination is the same. So, a consumer would receive a gift card into her wallet with one address and send that gift card back to the merchant’s wallet with another address. A fraudster can’t reuse any of these addresses to obtain the value from the card.

[...]

http://www.forbes.com/sites/laurashin/2015/06/17/why-the-bitcoin-blockchain-could-make-gift-cards-a-consumer-favorite-even-more-beloved/

[kanus1113]

With the news and talk about regulation going on recently, I believe it may be a good idea if we voice our opinion on what favorable and fair regulation would look like from our standpoint. Many of us know the industry pretty well and understand what the major risk factors are for consumer security with digital currency.

In your own opinion, what would you consider fair regulation to protect consumers without hindering advancement?

I'm not an expert, but here's how I would approach it.

1. Set up a set of standards related to website security, amount of funds backing up user accounts, insurance coverage (if there ever is such a thing), and various other reasonable precautions that large sites which hold user funds should be taking.
2. Next, set up a grading system of some sort. So an A rated company adheres to the strictest standards, whereas a C or D rated company adheres to more lenient standards.
3. The conditions which must be met for each grade are clearly and publicly posted so everyone knows.
4. Companies can post their grade based on what standards they are following. Potential users see it and can make an informed decision based on their own risk tolerance. Some consumers may choose to only deal with A and B companies. Others may be fine with doing some business with C and D companies.
5. Adhering to these standards is completely voluntary. No one forces any business to meet those standards. However, if they don't meet them, they don't get to advertise themselves as an A rated company. They may lose a lot of potential customers but most likely save on their up front costs. Companies can at any time "upgrade" to a higher grade by meeting that grade level's standards.
6. Standards would be determined by some sort of group of knowledgeable industry leaders and whoever else might make up these types of groups.
7. There is some sort of neutral auditing group whose job it is to review companies and determine which standards they are meeting and issue them their "grade." This auditing group also posts all participating companies and their grades on a website that anyone can read, so that companies claiming to have a certain grade can be checked against the auditing group's list. That site could also be educational about what the standards mean and why they are important, and can also warn people about certain types of sites which are plain never going to make the grade and why (Bitcoin doublers, for example).
8. Everything is done as transparently as possible.
9. A company that uses other companies (for example a retail site that has a 3rd party payment gateway) should have a page where all their third parties and their grades are posted as well.

The bottom line is that in my opinion, the kind of "regulation" that really serves the public is standardization which makes it very clear how a service measures up in terms of various conditions the general public would or should care about. A service can either make the grade or not but it has the right to exist and conduct business regardless. But the company making the grade is likely to attract more customers.

I'm not a huge fan of companies being "forced" to make a certain standardization grade, because I believe that potential customers have the right and ability to make an informed decision. I do believe that such criteria should be well known and it should be very transparent how grades are determined and given out and then the public decides which companies to patronize based on those grades. Basically, the government or some kind of regulatory body can really help everyone by setting and enforcing standards (or at least overseeing that process), and making it clear how businesses measure up. But then leave the choice to the consumer. Maybe I will only trade on an A rated exchange but someone else might be fine with a B rated exchange because the fees are lower. Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting. They would have to work harder to earn their customers' trust but at least they could be conducting business while raising funds to meet various criteria. A reputable online business is going to voluntarily take certain precautions to make sure their customers' accounts and funds are as secure as possible, but probably won't be able to start off using the absolute most state of the art security systems. That should be fine as long as what they do have (and don't have) is clearly disclosed, or at least what grade they have.

"Startup businesses should have the freedom to exist and gradually "level up" on their grades so as not to be priced out of even starting."  I think the whole concept of levelling up is brilliant, wiser!  Maybe they could even be limited to what markets their coin, stock, etc could be sold on similar to the lowest level of the stock market being the OTC / pink sheets.  Everyone knows those are the most risky stocks to buy.

Chase/Wiser; totally agree here. And one thing really stands out, website security. I, personally, would put very little regulation on the "coin" itself and focus more on the security of websites dealing with the public, especially exchanges. I tend to compare crypto with cash when discussing human interaction. I can still hand you a dollar, or one hundred thousand dollars for that matter, in private, you to me, without jumping through any hoops. In other words, I can transfer wealth to you without regulation. The whole regulatory nightmare exists on a previous level where you obtain that cash, and in the banks where you "store" it.

In other words, the end transaction of moving money from me to you, in private has no inescapable regulatory burden. If I remain unbanked and outside the financial system, regulations do not really effect me as long as I don't need to enter that system.

I realize that in real life this is near impossible but, there are plenty people doing it even here in the US. These people live off the grid and outside what you and I consider "society". Not really a bad thing but, not for most of us.

Getting back to the issue at hand, in crypto, its the "last mile" that is the problem. There will always be bad actors, it's human nature and it's easy to take advantage of someone hiding behind a website. Also, I don't believe in KYC and AML laws, basically, they are useless and present an extreme barrier to entry to our our industry. They raise the bar so high over the heads of entrepreneurs that innovation and free thinking are eliminated and replaced with "the same old crap" from established entities pretending to be startups.

My vision of fair and balanced regulation and crypto business startup would go something like this:

Prerequisites for the business,

1. If you want to start an online crypto business, identify yourself. No handles or nicks, use real names.
2. Clean, verified background check, no criminals allowed.
3. Prove you have the resources to cover your proposed operation, put up a bond or guarantee reserves large enough to cover possible customer losses.
4. Have a solid business plan, not just an idea.
5. If more than sole proprietor, incorporate, LLC, etc for legitimacy and your own protection.
6. Apply for and obtain the license described below.  

Government, (I would prefer one licensing agency for the country but, we all know this is not possible)

1. It's ok for states to issue their own license but, the fees must be fair and the wording must include the ability to recognize another states regulations without having to obtain a license in a state other than the one the crypto business resides in. This could be federal but does not have to be. States could form a consortium or similiar agency for uniform regulation across all 50 US states.

2. Be reasonable. It doesn't cost $5000.00 to verify information, make a database entry and issue a piece of paper. And, use a 5 yr renewal base at a lower cost than the initial license.

3. Require the basics not the world. Include 1 through 6 above and allow self policing for AML and KYC requirements. Set a transaction amount where this reporting would kick in but realize that due to the very nature of the technology, traditional reporting is not going to work for most crypto businesses.

Again, the biggest issue I see is the rush towards applying existing, archaic regulations to crypo especially when it is not even possible to meet those requirements. And, right along with this is very real possibility of having 50 different licenses requiring basically the same stuff but all wanting multiple thousand dollar fees for issue. That's crazy. The states need to be uniform in their control and allow out of state businesses to access customers without another license burden as long as the business has a license in it's primary state of residence.

Again, I hate to say it but, perhaps one federal requirement that superseeds the states would make sense though it is highly unlikely that could happen.

It doesn't make sense to me for each state to have different rules and requirements either.

I imagine it will be some day, but I would like the regulations to be separated by the type of the service offered. A hot wallet service being the highest risk, then hot exchange wallet services that don't hold any coins (i really don't know what you call this version, but some services dont store any coins in hot wallets, making them lower risk), then multi signature wallet services, then cold storage services would be the lowest risk.

Most of the regulation today seem to intentionally make the cost of entry high to prevent just anyone from joining. This is a huge disservice to the public and goes against small business while lending monopolized markets.