Happy Friday, Idiots!
With a monster news day comes a bit of sad news. TBI news curator, Dennis Huang, is retiring from his post after a solid four month run of excellent synopses. He’s off on a recon mission (internship) in the enemy trenches (boutique investment bank) to learn about their evil alchemy (how deals work) and report back. You can always drop him a line if you want a young, sharp finance grad and bitcoin expert as an intern during the school year next year (he’s a senior). I’m happy to endorse him. Drop him a line at dennis.y.huang@gmail.com. Thanks Dennis!
So about that monster news day. BitPay just raised $30M at a $160M valuation from Index and Richard Branson; the proposed plan to revive Mt. Gox has received a key preliminary nod of approval; Bitcoin campaign donations have been green-lit from the FEC; and the Winklevoss Twins announced their plans to list their ETF on the NASDAQ. Wow, wow, wow, and wow.
The links and additional summaries are below in the Tid Bits section.
Just a reminder, if you’ve enjoyed these daily missives, please vote for me as “most insightful journalist”. I’d love the award, especially since it comes with a bitcoin bounty. Hey - speaking of shamelessly begging for money, international flights are expensive, so please also consider helping me defray the cost of Amsterdam by donating to my travel fund. I’m happy to auction off the real estate on my sizable forehead to any corporate sponsors.
Make BTC payable to the “blogging-is-for-poor-people” fund: 151RFDQNQkJCjjGQ4ASudY6yyWBVnY8Ngi
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We’ve been long, long overdue for some Friday Feedback given all of the crazy things I have written recently, so let’s jump right in. Thank you as always for pushing back on the stupid things I write and for giving me new perspectives to consider.
Regarding my post on Brock Pierce…
"Just wanted to thank you for writing this. It was a courageous move, but I think very important. I don’t know what to make of this whole story, and I feel terrible for Brock if he’s just a victim in all this as well. But, we just can’t afford more scandal for the industry or the foundation in particular right now."
[I had only a couple of pieces of negative feedback, but neither critic wanted me to post their comments. I was compared to Newsweek, called a media whore (yawn) and my sobriety was questioned in occasionally more colorful language.]
"TBI, you’re ballsy, but if Silk Road 2.0 ever mass-markets murder-for-hire, you’re gonna be one of the first crowd-funded targets."
TBI Note: I almost ate the post after speaking with Brock, because he’s a good dude and has been terrific for the industry. I think he’ll be a phenomenal addition to the board if elected, and I even endorsed him previously. But I went back to the Gox downfall and remembered thinking ‘how the hell did so few people know all of these stories about Karpeles?’ It’s because we as a community tend to get sucked into the to-the-moon potential and rarely do tough gut checks. I was careful to separate my personal opinions from my analysis of the BTC Foundation election - based on feedback from others who said they were going to reconsider their votes. I wasn’t trying to sway the election or create unnecessary controversy, and I certainly didn’t do it for personal gain.
And getting murdered would suck, but assassination is something to aspire to. The difference, I believe, is in press coverage.
Regarding bitcoin marketing campaigns in light of the Dogecoin NASCAR sponsorship…
"If I had a lot of money to spend on marketing, I’d just send som bitcoin to a bunch of public policy makers (regulatory, politicians, etc). Just coinapult it to their email or something, issue a press release and then watch them figure out how to file taxes on it, etc. Then just enjoy the mayhem :)"
"We’re going to sponsor a college bowl game this year, and it’s going to be awesome. If bitcoin has another good year, maybe we’ll even have a couple of Super Bowl commercials."
"We’re going to give $10 to every college student with an .edu address…wait. wait! WAIT! Some people have figured out how to create 100 accounts and move all the money to a separate address? Time out!"
TBI Note: I like all of these ideas, but took liberty with the last quote, which wasn’t actually sent to me, but my best guesstimate as to how the Coinbase guys must have felt after a mad rush of college kids signed up for their free bitcoin.
Regarding Dark Wallet and regulated vs. unregulated Bitcoin…
"What did Satoshi’s white paper say, it was only 12 pages, let us know when you do the remedial work."
"I believe the use of tumblers and dark wallets simply earns more taxes for the tax authorities who already have the means to find persons with no visible means of support living in their jurisdictions. For example, using a tumbler prevents you from proving that you paid a certain amount of fiat for the bitcoins. Lacking such proof, in USA, the tax basis of such an asset when sold is zero and capital gains taxes apply on the entire amount."
"Anonymity is the bulwark against white-lists. The government should not have the power to deactivate my life-savings because someone else committed a crime."
"What are cowardly point of view this guy has."
"Sorry but regulations are just another firm of thievery by the politically well connected. (Think big banks, Monsanto, etc.) The point is that you either believe in freedom or you don’t. And freedom is voluntarism and the non-initiation of violence, the opposite of government."
TBI Note: Of course I’ve read Satoshi’s white paper - multiple times. It is a work of art. But not even Satoshi anticipated the emergence of ASICs in mining or the very real clout that authorities have when it comes to hampering bitcoin. The problem is that those clamoring the most for anonymity with be using bitcoin “illegally” at a disproportionate rate to other bitcoin users. Whether you’re talking about civil disobedience or morally reprehensible criminality, it’s still black market usage. And that’s a problem. Also, this is my interpretation of reality, not my utopian bitcoin outlook.
My favorite pragmatic bit of feedback here was the tax insight. If you are a good actor using a Dark Wallet - you’re either going to evade taxes or get slaughtered with them.
On me in general…
"I’m sick of this "idiot". Who cares what he thinks, Bitcoin can’t be stopped."
TBI Note: TO THE MOON!
Now for Today’s Tid Bits:
BitPay Is Raising $30M At A $160M Valuation From Index, Richard Branson
http://techcrunch.com/2014/05/08/bitpay-index/
Huge deal alert! BitPay, a platform that processes payments in Bitcoin for merchants, is raising $30 million on a roughly $160 million valuation in a round led by Index Ventures, with Richard Branson and Yahoo co-founder Jerry Yang participating. Its the biggest deal yet in the Bitcoin space, dwarfing the $26m Circle raised, the $31m Coinbase raised, and the $20m round Xapo raised. Its another sign of the growth and potential of the Bitcoin space, and a testament to BitPay’s early success.
Mt. Gox Plan Still Alive
http://www.coindesk.com/mt-gox-settlement-proposal-granted-key-preliminary-approval/
The proposed plan to revive Mt. Gox has received a key preliminary nod of approval. Jay Edelson, a US lawyer representing the country’s domestic exchange users, indicated that the plan was approved in a Northern District of Illinois court, and that this move clears the way for it to be more formally vetted in Japan. However, the next hearing won’t be until June 17th and no progress on the revival plan will be made until then.
Avalara Becomes A Bitcoin Supporter
http://blogs.wsj.com/venturecapital/2014/05/08/avalara-becomes-a-bitcoin-supporter/
Avalara Inc., a cloud-based service that automatically calculates sales tax for businesses, is supporting Bitcoin. Senior Director of Product Webb Stevens says that “customers should be able to conduct business in whatever currency they choose without worrying about whether they’re in compliance with regulations.” Avalara is trying to make sales tax compliance easier, and it also updated its software to support eight or more significant digits so people can keep track of their tax liabilities in smaller units. An interesting thing to note is that an Avalara investor is Battery Ventures, which recently raised money for Bitcoin start up Vaurum.
Bitcoin Campaign Donations Get Green Light From FEC
http://blogs.wsj.com/moneybeat/2014/05/08/bitcoin-campaign-donations-get-green-light-from-fec/
A much-anticipated Federal Election Commission decision Thursday gave the green light for Bitcoin political contributions… but only up to $100 worth. But if you dig a little deeper, it appears that the rule isn’t exactly set in stone. The different readings appear to hinge on two potentially contradictory aspects of Thursday’s advisory. The first is that the rule for converting Bitcoin into cash is the same as in-kind contributions, but at the same time the advisory does not explicitly define bitcoins as “in-kind” and also formally requires Make Your Laws to convert into cash any Bitcoins that it purchases.
Winklevoss Twins Plan NASDAQ Listing for Bitcoin ETF
http://dealbook.nytimes.com/2014/05/08/winklevoss-twins-to-list-bitcoin-fund-on-nasdaq/
SEC Filing: https://www.sec.gov/Archives/edgar/data/1579346/000119312514190365/d721187ds1a.htm
In a new regulatory filing with the SEC, it was revealed that the Winklevii twins are planning to have their Winklevoss Bitcoin Trust ETF listed on NASDAQ. If the SEC gives its final approval, investors will be able to buy into the fund and participate by owning “shares” of Bitcoins. The Winklevoss Bitcoin Trust was originally registered with the SEC last July, and despite the sluggish approval process it appears that their ETF will be at some point publicly listed for all investors.
US Government Taps Nonprofit to Research Digital Currency Crime
http://www.coindesk.com/us-government-taps-nonprofit-research-digital-currency-crime/
Official Order: https://www.fbo.gov/index?s=opportunity&mode=form&id=15d43de53e969bd779d48252d69c1307&tab=core&_cview=0
The IRS announced that it will award the National Cyber-Forensic Training Alliance (NCFTA), a cybersecurity nonprofit organization, with a contract to research crimes involving digital currencies. The reports says that “on behalf of the US Treasury Department, the Office of Illicit Finance (OIF) and the Office of Intelligence and Analysis (OIA), establishes that the NCFTA would study virtual currency and virtual currency exchanges to provide the federal government with real-time cyber threat intelligence.” Unfortunately, not much more information is available about the contract deal.
Have a terrific weekend, y’all.
Cheers,
TBI
P.S. Don’t forget to patronize Gyft, a generous Daily Bit sponsor and amazing consumer application for bitcoin. You can earn 3% back for all of your bitcoin purchases at retailers like Amazon, Whole Foods, Target, etc.