Some random notes before the weekend…
Rereading the full transcript of Pete Rizzo’s Coindesk interview yesterday with Ben Lawsky unveiled a key nugget that I missed on my initial read. When chatting with Rizzo, Lawsky stated multiple times, unequivocally, that the BitLicense would not apply to “software developers”, but rather financial intermediaries and banks.
Here’s the full relevant section (emphasis my own):
"The reg is intended primarily for financial intermediaries and the financial service industry. What we saw fairly quickly that certain provisions were being read by software developers as potentially applying to them, and that could have a stifling development on them, if every time you needed to develop a new piece of code, you’d have to go get a license. When we read the reg we were pretty clear that it wouldn’t apply to software developers, so we were a little surprised it was read that way, but looking back I can see how if there’s a potential that the reg applies to you and you’re talking to your lawyers and you don’t know, these words are ambiguous, that’s something that can occur. I think accompanying the revisions, we’ll do some kind of guidance so people have more clarity as to the breadth of the regs, so software developers aren’t going to have to be sitting around wondering if it applies to them - it doesn’t, it applies to financial intermediaries.”
This implies that wallet providers who avoid storing bitcoin on behalf of users should be off the hook, as would any miner, virtual currency creator or contributor, or bitcoin 2.0 (non-financial) app developer. You should be able to make the same argument on behalf of multi-sig wallet software companies as well, especially when it comes to bonding requirements and reserves. That said, the multi-sig scenario is a bit tricky as companies like GreenAddress and BitGo do maintain custody of at least one private key on behalf of their customers.
Screw the extension. These statements from Lawsky are worth their weight in gold. They’ve repositioned the goal posts for the entire BitLicense conversation. Now we don’t, or at least shouldn’t have to, squabble over the 1st amendment rights of software companies or what constitutes a new regulat-able currency and can instead batter the stifling compliance requirements imposed on the actual financial institutions of our industry - the bitcoin banks and exchanges.
This alone should be cause for celebration and another price rally. As far as I’m concerned, 90% of the BitLicense’s first draft overreach has already been corrected. Even if Lawsky and his colleagues turn around later and contradict themselves with respect to their public clarifications, these quotes will be invaluable for future lawsuits. I mean, the line was drawn by Lawsky himself: software will not be regulated by the NYDFS.
I just hope Rizzo has it on tape, backed up, and stored on the block chain…
***
A little Friday philanthropy…
A University of Florida student, John Scianna, is raising money to attend Draper University. He’s been following bitcoin since fall 2012 when he was at Manchester Business School and later the University College Utrecht (where he studied the Cyprus banking crisis). He’s been a miner, investor, writer for Bitcoin Magazine, volunteer with the College Crypto Network, and most recently an intern at the Chamber of Digital Commerce with Perianne Boring. You can help John take his fledgling bitcoin career to the next level by helping him attend Draper U.
http://www.gofundme.com/johnscianna
This will be the first and last time I post a personal fundraiser like this (so don’t ask), but I like that John was ballsy and reached out, and that he had good people endorse him.
You don’t ask, you don’t get.
***
It’s tough to be a noob…
I’m a rabid NFL fan, but for years have avoided fantasy football. Mostly because it irked me that my friends would often enter the room while I was watching a game and immediately ask “how many yards does peyton have?” instead of “what are the scores?” or even “are there any good games on?” I called myself a purist.
But then my New York Giants started 0-6 last year (finished 7-3 after that - too little, too late), and their games stopped being televised in New England. That’s when I discovered NFL Red Zone, which quickly became the greatest thing in life between March Madness and the Super Bowl. So this year, I decided to try fantasy football for the first time ever.
A funny thing happened, though. I realized many of the leagues I thought I could join had the same group of guys from year to year. Now I’m stuck as an alternate for some friend leagues. And since I refuse to join a league of outright online strangers, I figured I would put out some feelers here.
Let me know if you’ve got an opening in your league. Kickers score a lot of points, right?
Group to Watch
College Crypto Network (@CollegeCrypto)
Back in February, CCN launched with three student chapters dedicated to promoting blockchain education and development at schools across the globe. Today they have 50 chapters, not to mention some serious corporate sponsors. If you are interested in sponsoring student bitcoin initiatives, let me know. I’m helping these kids fundraise because they are the real deal. Visittheir site to learn how you can help or check them out at the North American Bitcoin Conference!
Today’s Tid Bits
FireEye Founder: Bitcoin Could Secure Our Global Payments Infrastructure
http://www.coindesk.com/fireeye-bitcoin-secure-global-payments-infrastructure/
FireEye fouder, Ashar Aziz, a cybersecurity entrepreneur and founder of the noted malware protection solutions provider, in July invested in PeerNova, a bitcoin mining company. In an interview with CoinDesk, Aziz, a bitcoin enthusiast labeled, today’s payment infrastructure as “archaic,” and believes that with proper security, bitcoin can become a “secure platform for exchange.” Aziz commented on companies in the payments space being in a period of “research and fact-finding” when it comes to digital currency, but that eventually bitcoin payments systems and legacy payments systems will coexist.
Wedbush: Wall Street Sees Opportunity in Bitcoin’s Volatility
http://www.coindesk.com/wedbush-wall-street-sees-opportunity-bitcoins-volatility/
Wedbush Inc., a leading financial services and investing firm, recently released a report suggesting that bitcoin’s price volatility is necessary for its maturity and market growth. The report is titled Embracing Volatility: Trading as Bitcoin’s First Killer App. Gil Luria, the author of the report writes, “Volatility in the price should not impede retailer acceptance of bitcoin…as merchants and payments processors are entirely shielded.” The report goes on to make a bullish price prediction that 1 BTC could one day be worth $1m, and comments on how bitcoin’s volatility will attract more traders. The entire report can be found here.
Bitcoin Center NYC Aims to Create Start-Up Incubator
http://newsbtc.com/2014/08/21/bitcoin-center-nyc-aims-create-start-incubator/
New York City’s Bitcoin Center, which usually hosts cryptocurrency related events and holds live trading sessions, announced yesterday that it plans to “help fund, manage, and cultivate momentum for Bitcoin related startups.” The Center will be accepting applications immediately for interested companies. Recently, several bitcoin startup incubators have been created including one in Paris’s Bitcoin Center.
UK Banks Are Killing Bitcoin Startups
http://cointelegraph.com/news/112326/uk-banks-are-killing-bitcoin-startups
Despite British Chancellor, George Osborne’s plan to make Britian the “global center of financial innovation” through the commissioned research of cryptocurrencies, UK-based bitcoin startups are struggling to open up bank accounts. MetaLair, a UK based bitcoin startup, shared its experiences of being refused bank accounts stating that an “AML team” had refused their application. As of March, UK’s Financial Conduct Authority said it will regulate digital currencies, but since digital currencies are not legally recognized as a means of payment in the UK, banks will more than likely continue to deny support for crypto-related accounts.
QwikBit Launches Isle of Man’s First Bitcoin ATM
http://www.coindesk.com/qwikbit-launch-isle-mans-first-bitcoin-atm-today/
Yesterday, QwikBit launched The Isle of Man’s first bitcoin ATM at a pub, the Thirst Pigeon, in the island’s capital, Douglas. The Thirst Pigeon began accepting bitcoin for food and drink two weeks ago, and according to the pub’s owner, bitcoin business is booming. Before the launch, QwikBit updated its software to comply with the Isle of Man’s forthcoming regulatory framework. The Isle of Man will host its first annual Crypto Valley Summit in September.
First Bitcoin ATM Opens for Business in Manhattan
http://nypost.com/2014/08/21/nycs-first-bitcoin-atm-to-open-for-business/
Yesterday, Manhattan’s first (Lammasu-made) bitcoin ATM launched, inside the store Flat 128, a luxury store that sells UK-styled jewelry and home goods, on Christopher Street. Currently, the ATM only operates one-way, allowing for users to insert cash to be transferred to their bitcoin wallets. However, this is subject to change in the upcoming months. Another New York City bitcoin ATM opened earlier this month, operated by CoinCafe in Brooklyn.
Upcoming Events
Inside Bitcoins Conference (September 15-16 in London and October 5-7 in Las Vegas)
Inside Bitcoins London and Las Vegas are the latest Media Bistro conferences on the calendar following shows this year in Berlin, Hong Kong, and New York. For more information on the London show, visit here. For more information on Vegas, you can sign up here.
Tips Are Always Appreciated
Financial tips: https://coinbase.com/twobitidiot
News tips: email 2bitidiot@gmail.com