Cryptoequity “Phase In” Explained – Swarm Version

July 30th, 2014

Raw Leafy Kale Nasty Hot

In terms of kale chips and gym memberships… at least this is something that Dave can understand.

I’ve been hung up on that whole Jobs Act death of crowdfunding and still stinging from that whole Occulus Rift Facebook equity rift riff, Candace Klein/Somolend end trend.  Now I get it.  Same bait and switch but this time the bait was kale chips.  For the record, Dave hereby volunteers to represent all the Swarm “investors.”

The backstory:  http://tradewithdave.com/?p=21413

Here’s the link: https://bitcointalk.org/index.php?topic=664071.msg8093799#msg8093799

Re: [ANN][SWARM] Swarm – Cryptoequity Crowdfunding – Official Thread
Today at 01:14:51 AM

#374
Quote from: merockstar on July 29, 2014, 10:49:01 PM
I’m honestly kind of confused.

The original plan was to distribute all the coins that didn’t get sold in the fundraiser back to investors, right? that’s the plan I signed up for but people apparently said in the vote that you could start now and hold some back to do a second round later (sigh).

That’s right. We originally said that we would do a typical one shot takes all fundraiser, but then people voted to lock some coins and make them available for future fundraisers. I think it was assumed by some of the Swarm founding team members that we would distribute all of the 24mm coins to whomever participated in round one on the basis of their SWARMPRE holders, but this wasn’t discussed as a team and so our communication on this point was not  consistent.

Although it seems nice to have more coins, it’s not clear that this positively affects the value of the coins either in the immediate term or in the long term. There are various arguments to be made about having a higher coin market cap, and the potential negative price movements that can happen when you have an asset split (which is effectively what we we are doing). So some founding team members thought we should work out some other solution.

Since Counterparty now has an asset burn feature, this was proposed as an option. Obviously it’s not fair to burn unsold coins but leave the founders with a larger share, so we also discussed and agreed to burn our own share.

That said, it’s still not overwhelmingly obvious to me at least that this is the best option. Among other things, there’s a clear communication gap since some people were expecting us to distribute more coins at the end of the fundraiser. I’m not sure what percentage of the overall coin holders thought this was going to happen though. I assume it is higher here on bitcointalk since these issues were discussed more throughly and since I was primarily handling the communication and assumed (perhaps naively) that this was the best solution.

As for my part, I was never completely convinced of the burning proposal, but I don’t think it is unreasonable if the founders burn their coins in the same proportion to the folks who participated in round one.

That said, I think any shift in direction this complex requires a lot of discussion and a vote.

The best option I see at present is to actually shelve this discussion for a bit and focus on building the platform and our next couple coin launches. The team is gathered, our office is nearly setup, budgeting is set, accounting is nearly up to date, and we have our first few launches lined up.

Btw, this also brings up the larger goal I wrote up on one of my longer pieces on cryptoequity, of having an elected representative of swarm coin holders who participates in the decision process of swarm and periodically audits our books to make sure we aren’t doing stupid things with the money we’ve raised or violating the interests of swarm coin holders.

I’m not sure if there is anyone here who is interested in volunteering for this role at present, but I think it would be good if there was someone who served as an interface for the interests of people who have swarm coin. This person would also be responsible for shaping any proposal that goes up for a more general vote, so that we don’t inappropriately structure a proposal to serve only our own interests.

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Re: [ANN][SWARM] Swarm – Cryptoequity Crowdfunding – Official Thread
Today at 09:44:28 AM

#375
The only real reason for this burn idea was to increase the percentage of swarmcoin available for the second sale. Burn some of the investors stake. Burn some reserves but the only way we are going to be able to pay for gym memberships over the next 5 years is to have a larger reserve (second sale coins) which we can sell for Bitcoin.
Why wait. Have the vote now, but you already know the answer you will get.

Original plan with a vote on what to do with the second sale.

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Re: [ANN][SWARM] Swarm – Cryptoequity Crowdfunding – Official Thread
Today at 09:56:38 AM

#376
Quote from: fragout on Today at 09:44:28 AM
The only real reason for this burn idea was to increase the percentage of swarmcoin available for the second sale. Burn some of the investors stake. Burn some reserves but the only way we are going to be able to pay for gym memberships over the next 5 years is to have a larger reserve (second sale coins) which we can sell for Bitcoin.
Why wait. Have the vote now, but you already know the answer you will get.

Original plan with a vote on what to do with the second sale.

Agreed.  Smiley Get this out of the way as soon as possible to get investor confidence back and then continue building the platform and launching the start ups (hell, I just want some Kale Chips) .  As suggested before regular updates, screen shots etc.. for the community would be a really good idea.  I think having an investor representative is a great idea.  A board of investor representatives would be a much better one.

end

 

Don’t understand the Jobs Act?  Here’s the key… just act like it’s a job: http://tradewithdave.com/?s=%22jobs+act%22+

Pulse Globally… Nuke Locally

July 30th, 2014

File:Q2ARALibertad.jpg

 

Dave does not run a $25 billion hedge fund.  Dave does not shampoo with Head & Shoulders.  Dave has never foreclosed on an Argentine battleship (does Argentina have battleships?), but Dave has engaged in his share of tin foil hat theories.  Like the time that Dave wrote about the 9-11 World Trade Center disaster only to be called a “Truther.”  Seriously… it hurts to be called a “truther”… I mean wouldn’t you rather be called the opposite of a truther… uhhh… I guess that’s “a liar” or maybe lie-er.

Take this guy for example… what is he thinking and who is he anyway… Representative?  Representative of what?  After reading 28 pages of a classified 9-11 report; “As I read it, and we all had our own experience, I had to stop every couple of pages and just sort of try to absorb and try to rearrange my understanding of history.” “It challenges you to re-think everything. I think the whole country needs to go through that.”  Technically, this group should be classifed as “re-thinkers” not necessarily truthers.  If it can be re-thought then maybe lies can be the new truth… there, fixed it.

Who said that “Twenty-four percent (24%) of Democrats and 29% of those not affiliated with either major political party believe the government knew about 9/11.”  Rasmussen?  Who are these guys?  Are they the same ones that recently reported that “Forty-one percent (41%) of Republicans believe Obama is not an American citizen.” Where do they get off saying stuff like this?  Rasmussen-ler… sounds like a some Vince McMahan WWE fictional character. Are they trying to steal Dave’s tin foil hat attracting thunder with real scientific reporting?

http://www.rasmussenreports.com/public_content/lifestyle/general_lifestyle/july_2014/have_we_got_a_conspiracy_for_you_9_11_jfk_obama_s_citizenship

Not only are congress persons and pollsters trying to get in on the conspiracy theory bandwagon, now we have the hedge funders trying to shoulder their heads into the limelight of the Fukushima glow.  Take Paul Singer for example.  He does run a <$25 billion hedge fund and he did foreclose on an Argentine naval vessel and he does know the “most significant danger” in the world… even if he doesn’t stay at Holiday Inn Express like Dave.

Yesterday Singer clearly communicated the same in his typically depressing call to wake up and smell the Chock Full O’ Scary Nuts scenarios now most commonly referred to as the “The Pulsers” and “The Nuuklers” Conspiracy Theory with Jessee Ventura (“Rassler” turned “Guvner”) who may or may not have lost a barroom fight but truth(er) be told Guv just won a $1.8 million defamation lawsuit so he’s well on his way to catching  up with Elliott… now commonly referred to on Wall Street as “Ell – - – i – - – ott”.

http://upload.wikimedia.org/wikipedia/commons/thumb/1/11/The_Global_Financial_Context_Paul_Singer.jpg/320px-The_Global_Financial_Context_Paul_Singer.jpghttp://upload.wikimedia.org/wikipedia/commons/thumb/c/ce/Jesse_Ventura.jpg/193px-Jesse_Ventura.jpgCoors-Beer-ET-Alien-Phone-Home-Poster

Electromagnetically speaking when adjusted for likelihood of occurrence Head & Shoulders sales may decline but asteroid mitigation is up to Hiroshima-strength while congressional pulse is…. (crickets).

Mr. Singer explains:

While these pages are typically overflowing with scary or depressing scenarios, there is one risk that stands way above the rest in terms of the scope of potential damage adjusted for the likelihood of occurrence. Even nuclear war is a relatively localized issue, except in its most extreme form. And the threat from asteroids can (possibly) be mitigated.

The risks associated with electromagnetic pulse, or EMP, represent another story entirely. It can occur naturally, from solar storms that send “coronal mass ejections,” which are massive energetic bursts of solar wind, tens of millions of miles in a mere few hours. Or it can be artificial, produced by a high-altitude (at least 15 miles) explosion of relatively low-yield (even Hiroshima-strength) nuclear weapons.

Different initiators of EMP have different pulses and different effects. But the bottom line is that EMP fries electronic devices, including parts of electric grids. In 1859, a particularly strong solar disturbance (the “Carrington Event”) caused disruption to the nascent telegraph network. It happened again with similar disruptions in 1921, before our modern power grid came into existence. A NASA study concluded these events have typically occurred around once per century. A repeat of the Carrington Event today would cause a massive disruption to the electric grid, possibly shutting it down entirely for months or longer, with unimaginable consequences.

Only two years ago, the sun let loose with a Carrington-magnitude burst, but the position of the earth at the time prevented the burst from hitting it. The chances of additional events of such magnitude may be far greater than most people think.

The artificial version of EMP, a kind of nuclear attack, would require between one and three high-altitude nuclear explosions to create its effect across all of North America. It would not cause any blast or radiation damage, but such an attack would have consequences even more catastrophic than a severe solar storm. It could not only bring down the grid, but also lay down a very intense, very fast pulse across the continent, damaging or destroying electronic switches, devices, computers and transformers across America.

There is no way to stop a naturally occurring EMP, and nuclear proliferation, combined with advances in weapons delivery systems, make the artificial version a distinct possibility, so the dangers are very real.

What can be done about this risk? Critical elements of the power grid and essential electronic devices can be hardened. Spare parts can be stockpiled for other, less critical hardware. Procedures can be developed as part of emergency preparedness so that the relevant government agencies and emergency response NGOs are ready to respond quickly and effectively to an episode large or small.

Why are we writing about EMP? Because in any analysis of societal risk, EMP stands all by itself. Congressional committees are studying this problem, and federal legislation is laboriously working its way through the process. We think that raising people’s consciousness about what should be an effort by both parties to make the country (and the world) safer from this kind of event is a good thing to do.

So, what is Dave getting at with this birther/truther/pulser/nuukler/rassler/hedge funder thing-a-majig for your power grid.  It’s simple.  Harden your devices.  Stockpile your spare parts.  Prepare for emergencies.  Develop relevant government agencies like FEMA that can do “one heck of a job Brownie” no matter where the next disaster strikes… and whatever we do… protect the hedge funds… because they own the battleships.

http://www.cnbc.com/id/101875747

Barry’s Theory of Forms (Vacation Version)

July 28th, 2014

You’ve probably heard of Plato’s Theory of Forms.  You may have heard of Google Forms.  Dave calls this Barry’s Theory of Forms – vacation version.  Your lawyer’s mission… if you choose to accept it is:

a) re-write the Commerce Clause in the U.S. Constitution.

b) explain to the wife and kids why you won’t be going on vacation.

c) change the capitalist premise from Caveat Emptor to Seller Beware.

Oh, one other thing.  In regard to the somewhat presumptuous statement “demonstrated a willingness to partner with the Bitcoin and the virtual currency community”… Dave’s not so sure it works that way.  Dave’s not sure you can “partner” with Bitcoin and he’s most definitely sure that partnering with the government when it has expressed an authoritarian solution meets the fascist minimum.  Jus’ sayin’…

Letter to the New York Department of Financial Services

.
Mr. Benjamin M. Lawsky
Superintendent of Financial Services
New York Department of Financial Services
One State Street
New York, NY 10004-1511
Dana V. Syracuse
Office of General Counsel
New York Department of Financial Services
One State Street
New York, NY 10004-1511

July 23rd, 2014

Dear Mr. Lawsky and Mr. Syracuse,

The undersigned companies, organizations, and individuals are interested in providing financial services & software products that use or leverage bitcoin and virtual currencies to citizens in the state of New York.

We seek to have all members of the bitcoin community play an active part in submitting thoughtful comments in response to the New York Department of Financial Services rulemaking under Title 23, Part 200: Virtual Currencies or “BitLicense.” Having reviewed the proposal, the undersigned hereby request a minimum 45-day extension to the deadline for filing public comment on the proposed Department of Financial Services rules expected to be published in the New York Registrar on July 23rd, 2014 pursuant to the published guidelines on the NY Department of State website requiring a statutory minimum of 45 or 60 days with additional 30 day period when substantial changes are required.

We believe an extension is necessary if stakeholders and interested parties are to have adequate opportunity to provide constructive feedback on both the broad scope and detailed components of the proposed rules materially impacting an entire nascent industry. Many of us are individuals or small startups operating on limited budgets without access to extensive legal resources. This imposes a substantial burden as we seek to understand the proposed rules and their current and future impacts on our businesses, open-source projects, and educational research.

The Department of Financial Services is requesting comments within the statutory minimum 45 days on 40 pages of focused, detailed, and highly technical company-specific issues. For instance, comments will be required to clarify the inconsistent statements of applicability on the face of the proposed rules to firms that “receiv[e] Virtual Currency for transmission or transmit[] the same” [Section 200.2(n)(1)] and the apparent exception for merchant and consumers that utilize virtual currency for the “sale of goods or services” [Section 200.3(c)(2)].

On the other hand, the proposal seeks comments on numerous broad, complex macro-level issues. For example, members of the bitcoin community will need to provide clarity to the opaqueness of the proposed definition of “virtual currency business activity” and what that might mean for a business or product/service line [Section 200.3].

The NYDFS has demonstrated a willingness to partner with the bitcoin and virtual currency community by making a good-faith effort of publicly engaging the community to collaboratively draft these rules and regulations that will support commerce & innovation while still providing strong consumer protections for those residing in New York and beyond. It would be a natural extension of this approach to extend the public comment period to allow the bitcoin community to provide sound, reasoned, and concrete feedback to the proposed rules.

Thank you for your consideration of this request and we would be happy to discuss these issues at your convenience.

Sincerely,

Barry Silbert, Founder, SecondMarket
Stephen Pair, CEO, BitPay, Inc
Tim Byun, Chief Compliance Officer, BitPay, Inc.
Jeremy Allaire, CEO, Circle Internet Financial, Inc.
Sean Neville, CTO, Circle Internet Financial Inc.
Wences Casares, CEO, Xapo
Karsten Behrend, Chief Compliance Officer, Xapo
Patrick Murck, General Counsel, Bitcoin Foundation
Joseph Lubin, Co-Founder, Ethereum
Adam Draper, Managing Director, Boost VC
Brayton Williams, Co-Founder, Boost VC
James Robinson, Managing Partner, RRE Ventures
Marco Santori, Nesenoff & Miltenberg LLP
Erik Voorhees
Alan Safahi, CEO, Zipzap, Inc.
Greg Kidd, Chief Risk Officer, Ripple Labs
Elizabeth Ploshay, Board Member, Bitcoin Foundation
Alan Silbert, CEO, BitPremier
Avish Bhama, CEO, Vaurum
Byron Gibson, COO, Vaurum
Christopher Camp, Blockchain.Info
Corey Glaze, Bitpay
Fernando Gouveia, Xapo
Chris Hermida, Circle Internet Financial
Max Scholten, Circle Internet Financial
Jacques Reulet, Coinbase
Sarah Hody, Hody ESQ
Mike Harden, Senior Partner, Artis Ventures
Andy Artz, Social Capital Partnership
Alec Petro, Bay Hill Capital Management
Sebastian Serrano, Bitpagos, Inc.
Ryan Singer, Regulation Bitcoin
Elizabeth Stark, Threshold
Austin Walne, Facts About Bitcoin
James Edwards, Coinalytics.Co
Pamir Gelenbe, Coinsummit
Jaron Lukasiewicz, Coinsetter
Marshall Swatt, Coinsetter
Serena Jones, CoinTeller Inc.
Noah Berger, CoinTeller Inc.
Taariq Lewis, Digital Tangible Inc.
Karl Keefer, Digital Tangible Inc.
Ron Gross, Mastercoin Foundation
Christopher David, CoinVox
Adam Krellenstein, Counterparty
Christopher Montaño, Counterparty
Matt Young, Counterparty
Joel Dietz, SWARM
Jonathan Levin, Coinometrics
Andrew Geyl, Coinometrics
Scott Walker, ZenBox
Michael Terpin, BitAngels
Marshall Hayner, QuickCoin
Miron Cuperman, Cryptocorp
Perianne Boring, Chamber Of Digital Commerce
David Berger, Digital Currency Council, Inc.
Adam Stradling, coin4ce. com
Tim Olson, Epic Scale
Lafe Taylor, Cycle of Goodness Cooperative
David Johnston, OffWorldWealth Inc.
Matthew Kenahan, The Bitcoin Society
Sean Cremins, Boston College/Chomping at the Bit
Phil Knirck, Software AG
Matt Decourcelle, LTBcoin
David Dvorak, Wow Such Business, Inc
Simon Rubin, First BITCoin Capital Corp.
Curtis Lacy, Engine, Inc.
Stephen Calnan, Null Hammer Technology Concern
Matthew Elias, The Precedent Protocol
Jeremy Lam, vennd .io
Stephen, Sunderlin, Qikcoin, Inc.
Cameron Gray, Decentral.Bangtown
Patrick Dugan, Crypto Currency Concepts
Dan Elitzer, MIT Bitcoin Project
Jeremy Rubin, MIT Bitcoin Project
Andrew Miller, University of Maryland
Ryan Breslow, Stanford University
Eric Feldman, Stanford University
Andy Bromberg, Stanford University
Phil Brady, Stanford University
Rahil Gupta, Harvard Business School
Daniel Vogel, Harvard Business School
Mark Robinson, Kansas State University
Steven Godbold, University Of Michigan
Sankalp Kulshreshtha, Carnegie Mellon University
Joseph Miller, Rutgers University
Ryan Lanman, Duke University
Elliot Swartz, UCLA
Joe Rivera, Bitcoin Austin
Aaron Williams, Atlanta Bitcoin
Dave Bernardi, Michigan Bitcoiners
David Orban, Dotsub
Ali Goss, Hellobit
Ryan Selkis, TBI Daily
Sandi MacPherson, Quibb
Dev Shuster, Bear Reconciliations
Joseph Krug, Ausum PoS
P. Collin Paran, MuBeta Corporation Inc.
Jason Rosenstein, OSFDA
Bojan Simic, Bitcoin Security Project
Stephen Govoni, CoinShovel
Tina Hui, Follow The Coin
Mickey Costa, Atlas Card
Christopher Smith, Orboros
Nicolò Maria, Tapeke Ltd
Eric Cogen, BitcoinRT.info
William Chung, Network Mapping
Jason Carleski, Prypto Group Ltd.
Bradford Rajani, Horizon Healthcare
Nicolas Courtois, UCL
Joseph Chello, Bitpaintings.com
Mark Norton, BitcoinWarrior.net
Kyle Mahon, Hotham rentals
Michael Cutlip, Real Ideas, LLC
John Carvalho, bitcoin-assets. com
Adam Ettinger, Strategic Counsel Corp.
Matthieu Riou, BlockCypher
Sam Fisher, BTC Mint US
Christine Joy Igpuara, Semtraining.com
Gabe Evans, HashRabbit, Inc.
Chris Shepherd, HashRabbit, Inc.
Matthew Martin, Blossom
Alex Peterson, Vis Nova Ventures LLC
Rachel Cook, Seeds Inc.
Naveed Lalani, Portable Boutique, Inc.
Stefano Capaccioli, Coinlex
Haseeb Awan, BitAccess Inc.
Christopher Morton, BlockScore
Matt Luongo, Card for Coin, Inc
Jacques Voorhees, Verichannel, LLC
Andre Castro, eCoinCashier
Blake Carpenter, BlakeChain
Michael Muller, Enduden Consulting
Mike Johnson, Coin Fire
Shawn Owen, 53 Peaks
Aaron Rosencrants, 757 Bitcoin
Brad Dowhaniuk, 99Pledges
Addison Camp, A. Camp Ventures
Dawn Conner, Altcointoday
Anton Zhadovich, Anton Dds Llc
Tyler Evans, Apstr Inc.
Benjamin Lake, Archose Systems, Llc
Casi Biebl, Arm & Hammerconst
Raymond Cline, Bitcoin Center
Calvin Tran, Bitcoin Center
Guillaume Babin-Tremblay, Bitcoin Embassy Montreal
Spencer Noon, Btcity, Llc
Ilya Subkhankulov, Btx Trader Llc
Josh Cantu, Catnu Inc
John Roets, Createtank
Helene Unland, Cryptor Trust Inc.
Gurinder Bhangoo, Easy Rentals
Chris Sweis, Junowallet
James Evans, Knightsbridge Online
Khoa Pham, Krypto Tribe, LLC
Daniel May, Liberty Mutual
Marc Matthews, Mhc, Inc.
Spencer Ruport, Netor Technologies
Melissa Williams, Pebble
Phil Namdar, Rock’D
Rock Siles Barcellos, Rockincomics
Florio Tiramani, Sherkgroupllc
A.J. Hong, The Bitcoin Society
William Witenberg, Witenberg Investment Company
Branden Petersen, Yesbitcoin
Alex Van Der Peet, Yutani Software
Max Goldstein, Hashbrown
Bernard Rihn, Hashplex Inc
Julio Lanza, TechRepairs4Bitcoin
James Doe, Pomona College
Mark Meredith, M1M Endeavor
Nicolo’ Paternoster
Mark Lamb, Coinfloor
Jon Thomas, Jbrservices
Joachim De Koning, Hybrid Assets
Morten Pedersen, Bitcoin Denmark
Rob Schot, Dutch Coins
Huy Pham, University Of Washington
Andre Infante, Coinreport.Net
Ron Hose, Coins.Ph
Alex Liu, Maicoin
Nimrod Lehavi, Simplex
Stephany Zoo, Leaguex
Jay Villarante, Loud Panda Interactive, Inc.
Lawrence Nahum, Greenaddress
John Bailon, Citadel Industries, Inc.
Jeremy Fraser, Breakblock
Anthony Buck, Elite Withdrawals Llc
Lawrence Nahum, Greenaddress
Chris Cawley, Tech Advisors
Mateusz Kopeć, Hochschule Bremen
Alex Ziebland, Go Communications Systems Ltd
Michael Mott, Michael M . Labs
Daniel Murrell, Coinduit
Derek Minter, Honeybadgr
Paul Paterakis, Ny Bitcoin Group
Hayden Gill, Coin Miner Llc
David Croft, Coin Miner Llc
Brendan O’Connor, Secondmarket Trading
Justin Drake, Anthemis
Troy Bradley, Bitfusion.Biz
Jonathan Rogiest, Nicaragua Bitcoin Foundation
Don Mccollougb
Steven Schram, Chapter 1 Software
Mentor Palokaj, Ninjamask Security
Gregory Schvey, Tradeblock
Hayel Abbassi, Gocheto Financials
Teri Welsch, Verichannel Llc
James Welsch, Verichannel Llc
Andrew Grennan, Colorado Springs Local Brokerage
Mohan Thurairajah, Cointex
Alex Varone, Upportunity
Ilia Goro, Renegade Servers
Matt Roszak, Tally Capital
Halsey Minor, Bitreserve
Nicolo’ Paternoster
Pedro Bueno, UFSC
Mohan Thurairajah, Cointex
Johnny Mayo, Neuroware Inc
Simon Selitsky, Coingyft
Francis Pouliot, Bitcoin Foundation Canada
Jad Mubaslat, BitQuick.co
Nicholas Bottos, BTC Merchant Services, LLC
Peter Klamka, Bitcoin Brands Inc.
Skye Elijah, Coinbeyond
Nathan Wosnack, Crypto Biz Group
Kyle Kilgore, Sharp Seo Services
Javier Dutan, Novaux, Inc
Mykola Babenko, Novetlylab Inc.
David Smith, Cash On Cryptos
Keith Langley, CryptoCoinDaily
Bryce Weiner, Blockchain Technology Group
Eric Han, Integrated Silicon Solutions, Inc.
Paulo Tavares, Xchangebtc Corp
Richard Wagner, Citec
Matan Field, La’Zooz
Andrea Ciceri, Crypto-Kiosk
Mike Walker, Crypto-Kiosk
Jaco Bolle, The Bolle Group
Francesco, Simonetti, Holy Transaction
Andrew Barnard, Bitstop
Richard Goforth, Bitcoin-Trader.Biz
Alessandro Valerio, Twimt
Kipp Watson, Swappermall
Eric Grill, Coinoutlet Inc
Dennis King, Asylum Investments Llc
Jonathan Kapelus, Tuft & Knott
Witold Piorun, Texas Coinitiative
Riley Alexander, Forcoins LLC
Alex Duplessie, Storj
Emiel van Bokhoven, Bitcoin Bok
Johann Barbie, CTO, 37coins, Inc.
Gerald Wilkie, HashMaster Tech LLC
Alice Townes, Townes Law
Stefan Patatu, Bitcoin-Trader.biz
Emanuel Martins
Dennis Patel
Michele Sorenson
Don Skurauskis
Christopher Bean
Ryan Hancock
Emanuel Martins
Dennis Patel
Michele Sorenson
Don Skurauskis
Christopher Bean
Freddy Billqvist
Andrew Mawyer
Justin Hawley
Jo Macdonald
Kerry Sessions
Edward Johnson
Kate Born
Brent Jewell
Daniel Schott
Julian Knewitz
Jen Valerias
Edwin Critz
Marc Mattox
Eric Moon
Anthony Spinelli
Lisa Hester
John Carley
Robert Tiger
Vernon Sanders
Asghar Shah
Johan Broeksma
Alex Hulsman
Michael Caselli
Pete Johnson
Maria Lourdes Diotay
James Hatzell
Vincent Rangel
John Beauregard
Tiago Marques
Phalen Kuckuck
Cameron Deloche
Darren Wilks
Richard Moore
Phil Peterman
Thomas Hughes
Timmothy Ostgaard
Aslan Freeman
Michael Buick
James Sypniewski
Christopher Halbersma
Johannes Gerardus
Chris Edwards
Erik Goff
Bilal Shaikh
John Baric
Jason Dorsett
Parker Frech
David Shares
Jason Hess
William Jacobs
Michael Longoria
Chris Jefferson-Jones
Rob Agnew
Barry Wilson
Aria Eslami
Jake Thesnake
Brian Nicholson
Galiano Tiramani
Drew Breyer
Artem Udeykin
Richard Joerger
Carl Farah
Nathan Bowers
Danielle Bowers
Joseph Farag
Aaron Silvers
Andrew Jarmon
Tim Boulay
Brian Goss
Patrick Killian
Jason Hyacinthe
Theo Chino
Karel Brokes
James Morgan
John Allen
Spencer Penaloza
George Burke
Eugene Jhong
Mark Howard
Charles Lehner
James Barcelona
Rmaen Jain
Sean King
Morgan Sutherland
Jason Kende
Phil Maher
Haixiong Yang
Kosta Zertsekel
Zaki Manian
Susan Miller
Jonathan Schnieder
Daniel Ruskin
Thomas Franken
Gordon Thompson
Justin Tannenbaum

 

If you want to sign up, here’s the link:

https://docs.google.com/forms/d/1-LvRo-LJlrfDMgA1wlXtDNyuhmP1gx6RGECeGz0jAHE/viewform

 

Dave on Ben: http://tradewithdave.com/?p=21461

http://tradewithdave.com/?p=20832

You lie!…. ahead

July 27th, 2014

Is the immigration of Bitcoin into the financial system experiencing its Joe Wilson moment?  At least this time you can’t erase the blockchain.  Jon Matonis explains Bitcoin Beyond Buzz Lightyear’s infinity or Ben Lawsky’s 45 days… whichever comes first.

 

Looks like that Robert Frost thing-a-majig that Bitcoin has encountered and Dave has been harping on for a while has resulted in not only staring at the crossroads, but setting up a park bench to wait 45 days or until the leaves change to yellow whichever comes first.  This is a truly amazing (at least to Dave) look into the heart of Bitcoin philosophically and politically.

 

John Matonis is absolutely correct IMHO to focus on the issue as framed by Vinay Gupta. Jon highlight Vinay’s statement of:

“It (Bitcoin) cannot be divorced from pre-existing political theory.”  Vinay Gupta

“How do you do strong property rights within the system and no property rights to operate the system as a whole. So it had to be anarchist infrastructure producing a libertarian trading environment and I don’t think any anybody understood that problem clearly until very recently. Until you solve that problem you can’t decentralize the control of the currency but still have a single uniform agreement that everybody is playing on.”  V.G.

Vinay then goes onto connect it with climate change and this is Dave’s point all along.  The blockchain is the perfect tool to means test your carbon footprint in real time and to essentially act as an overlord in a resource based economic and justice system.

 

But where is Vinay lying about the immigration of Bitcoin even if he has holes in his philosophical border fencing that aren’t of his making resulting in plausible deniability because he hasn’t been reading Dave or listening to the Guvna of the Bank of England.  There’s going to be a divorce alright.  Where Dave believes that really smart folks like Vinay are missing out on the “settlement agreement” is that it’s going to divide the currency right down the middle separating the double coincidence of needs from the store of wealth component.

You, meaning we, don’t have to divorce entirely from pre-existing political theory, we just have to redefine money… democratically.  You know like the Rothschild meme of “money as a technology” like a Staple’s Easy Button… just push it… like pushing buttons on a mobile phone.  We’re moving from an economics of scarcity to an equanomics of measurement as we divide the space with Dieter Braun’s “differential bet” and as long as no one knows that there’s a measurement problem and they think that the purpose of a Mandelbrot set is to make cool Youtube videos, we should be able to lie and not lie at the same time.  Think of it as a quantum truth/untruth that only Cass Sunstein and Samantha Powers could explain both economically and politically and still get paid.

If you like your pre-existing political theory… you can keep your pre-existing political theory… just pick the half you want to keep and remember when it comes to couches you should consider King Solomon’s wisdom before you take a chainsaw to your Jennifer Convertible and expect to end up with 50% of the value (ref: 1 Kings 3:25).

Choose one:

a) “In God We Trust” slogan printed on every Federal Reserve Note (it wasn’t Dave’s idea… it was Janet’s)

or

b) In Technology We Trust or “Technology has the answer” as explained by Maidsafe’s David Irvine:  http://blog.maidsafe.net/2014/06/18/technology-has-the-answer/

We won’t witness a wholesale divorcing from pre-existing political theory or Keynes or say the second law of thermodynamics or quantum physics.  What we will witness is a splitting of that theory along the lines that Roberto Unger or Lee Smolin or Russell Brand for that matter are proposing (see the previous post on the religion of Bitcoin: http://tradewithdave.com/?p=21494).  This IS the divorced currency system that Mervyn King introduced and its probably the single most written about subject matter on this blog for the past half decade.

Here’s Jon’s insightful article which is the strategic equivalent of building a park bench at the crossroads while you wait for Ben Lawsky and Barry Silbert (and his attorneys who have no doubt cancelled their vacations) to set up the New York Bitcoin Exchange of which no doubt the JPMorgans and Goldman Sachs will want their piece of the pie.

http://www.coindesk.com/beyond-new-york-lies-ahead-bitcoin/

Now the following interview with Jinyoung Lee Englund (director of marketing and communications for the Bitcoin Foundatiton) was completely mind blowing for Dave.  Truly… amazing.  This interview left me speechless, not in its commentary on financial inclusion but on the bravery of the speaker.  I think I have a new hero in the Bitcoin space and it looks like Roger Ver may have some competition when it comes to being named Bitcoin Jesus with uh… Jesus.

How does Dave feel about a resource based system?  Well, if you read the blog then you know, but if you don’t Dave’s promoting abundance, not scarcity.  Is the blockchain designed to allow us to move from a democratization of people to Andy Perry’s democratization of money.  Vinay’s comments on “one man ~ one vote” (i.e. a Rochdale model) devolving into a “one coin ~ one vote” democratization of money was the subject this week of an interesting exchange facilitated by Chris Foster on Twitter.

 

 

 

 

 

 

 

 

 

Dave on “divorced currency”:  http://tradewithdave.com/?s=%22divorced+currency%22

Dave on “resourced based economy equanomy”: http://tradewithdave.com/?s=%22resource+based%22

Dave on the measurement problem:  http://tradewithdave.com/?s=%22measurement+problem%22+

Money as a technology: http://tradewithdave.com/?s=%22money+as+a+technoloGY%22+

Religion Of The Future? The future IS a religion…

July 27th, 2014

 

Unger gets it half right when it comes to his claim that we are “context-bound and context-transcending.”  Dave would say we are “context-bound or context transcending.”  Did you notice the difference?  It’s that double-slit experiment yet again.  Pick one slit… not both… remember you have free will as long as the “new structure” isn’t pre-determined.  Unlike Unger’s claim that we can in our own power form a central “institutional” imagination via the law, Dave would say that in our own original power we are able to kill… or more specifically Cain is able to kill Abel which incidentally resulted in one of the first ten laws since Abel was the first person ever born and he got murdered, the trend was bad from the outset.

Indeed Unger’s claim that the individual is infinite is a powerful claim and capable of unleashing revolution in and of itself, but for what purpose.  At least Marx in his revolution gave a man back the product of his labor or at least in theory he did until that labor was NAFTA’d and then Foxxconned and now roboticized.  Unger states that we are “the infinite imprisoned within the finite.”  Close… we are the infinite set free from the finite if we so choose.  Unger claims that his philosophy is not deterministic,  but I disagree.

Unger does turn Kant on his head and Unger is correct that no social institution can contain us no matter how much they may shape us, but he presumes that “we” can imagine a new structure (a more comfortable prison is you ask Dave) that measures up to the infinite nature of the individual. No such structure can or ever will exist within the mind of man no matter how much man attempts to reference natural philosophy man cannot unlock the keys of nature.

Dave would suggest that the spirit Unger refers to is not an “embodied spirit” but rather on Unger’s infinite timeline it is a non-constituent spirit and when that spirit is free of prison it is the Holy Spirit and this is why the Word says “and the government will be on his shoulders. And he will be called Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace.”

Unger’s claim is a genuine threat to the system.  When you hear folks like Russell Brand espousing a wristband revolution and Chris Hedges calling for plastic pitchforks, Unger’s strategy is essentially what they are calling for… a controlled demolition of the left/right paradigm because it has run its course and it’s wholesale replacement with systems of three dimensional accountability such as those expressed in the blockchain.  As Professor Dieter Braun said about the fixed exchange rate between money and anti-money  “It is like finding an inherent contradiction right inside banking. And something we could not use before computers.” (http://tradewithdave.com/?p=21429)

What Unger is imagining in his new structure is a deterministic smart contract and smart oracles to administer them as he strives to address (a) escape, (b) humanization, and (c) confrontation.

(a)  Jesus has overcome the world.

(b) Justification is by faith not of works.

(c)  It’s not about achieving an “increased share” of love as God’s love is infinite so any share is a full share.   Unlike Unger’s collaborator Lee Smolin’s book  which proclaims “Time Reborn” (also 50% correct in its attack on the quantum condition), just ask Nicodemus.

 

Roberto Unger on the future of religion known as The Religion Of The Future:

“to be faithful to what made this orientation persuasive and powerful in the first place, we must radicalize it against both established institutions and dominant beliefs.”

“The goal is not to humanize society but to divinize humanity.” It is “to raise ordinary life to a higher level of intensity and capability.”

http://www.law.harvard.edu/faculty/unger/english/docs/religion.pdf

 

 

If you’re going to take a swing at Immanuel Kant, Dave would suggest you take an axe to the root:  http://tradewithdave.com/?s=kant

If you’re going to take a swing at Karl Marx, at least you would have gotten paid by the swing, today not so much as we have an automatic axe machine:  http://tradewithdave.com/?s=%22karl+marx%22

Trade Generations With Dave

July 26th, 2014

Molly Kate Kestner – Soon to be 10 million views on Youtube… then again I guess 12 views would have been sufficient.

https://www.facebook.com/mollykatekestner/app_256012207815369

Ancient Chinese Proverb: Where profit is… loss lies hidden nearby.

July 24th, 2014

https://twitter.com/Vlad_Roberto/status/491762022770417665/photo/1

 

Here comes everybody… at least the rich people who trust hedge fund operators.

http://www.logicoins.org/6-new-hedge-funds-seeking-bitcoin-returns/

 

And the Winkelvii on the Winkdex… it’s all about the community… and cool tools:

“We’ve spent a lot of time trying to build a really cool tool. Obviously the index will be big for us because it will be used to price any future ETF. But, we also wanted to build on this for the betterment of the bitcoin community.”

Scarecoin: If it only had a brain

July 23rd, 2014

Trying to see if we can pound some cents into this e-scrow Dorothy.

 

Dave’s been down on the crypto farm with Greg Brockman of Stripe learning a thing or two about Bitcoin and if there’s one thing I learned it’s that Greg is no dummy.  For the past couple of years Dave has been harping on two reasons why Bitcoin would be challenged for adoption on Main Street (Lawsky’s Law withstanding).  The first had to do with how long it takes to ring up a credit card transaction and receive approval in a brick and mortar retail environment and the second has to do with chargebacks.  Dave having started and run retail businesses for over thirty years knows a little bit about both these issues.

I’ve written about issues relating to “acceptance” and “honor” in particular as they relate to bank cards and the development of networks such as those pioneered by Dee Hock of Visa.  Dee’s a big thinker in the “chaos” and “order” space so much that he got some peanut butter in his chocolate when he tried to coin something known as “chaordic.”  Chaordic is the type of concept one comes up with when they attempt to ply the space between Heisenberg’s wave and the particle, Schrodinger’s cat-in-a-box or between zero and Michael Woodfords zero lower bound.

I actually knew a guy in the car business once that referred to his “pre-owned” lot as “newsed” cars… like new… only used… newsed which is similar to @RustyRockets Trews or what the news would be if it were true.  It’s tough to be two things at once such as being the President of the United States (POTUS) and Golfer of the United States (GOTUS).  Sometimes you simply have to choose how to spend your time and money, then sometimes you don’t have to spend money, but time gets spent either way.

I’ve also written quite a bit about the currency of reputation and how there is no forgiveness in the blockchain and that this is going to require an entirely new form of reputation management that revolves around “no-do-overs.”  It’s probably been two or three years since I first corresponded with Craig Newmark of CraigsList.com about the next generation of trust-based systems (or trustless networks) and how they would most likely develop.  Dave disagreed with Craig that there was something called a “culture of trust” (http://tradewithdave.com/?p=10567), but Dave most definitely does not disagree with Greg about the consolidation of trust.

Here’s what Greg of Stripe.com had to say in his recent article (emphasis Dave):

Ultimately, the message Visa delivers to consumers is that if they see the Visa logo, they are safe. If something goes wrong (such as the merchant delivering a bad product), the consumer will be made whole. This results in many transactions happening that otherwise would not, and makes the whole ecosystem more valuable.

And so, unless we solve decentralized reputation (which people are starting to think about), the Bitcoin ecosystem will see the emergence of a few centralized consumer “trust providers”.

You can already start to see the need for this with the emergence of Bitcoin escrow services. However, escrow isn’t actually a solution to trust—it’s a way not to trust. It makes sense only for a certain segment of purchases, and requires you to jump through stressful hoops like completing an inspection of the goods before irrevocably releasing the funds.

The winners in this space will instead be companies which inspire consumers to trust those they endorse. They’ll provide consumer protection services like chargeback mediation (and have a direct relationship with the merchant to actually recoup funds for those chargebacks). They’ll gain acceptance among Bitcoin-accepting merchants if they can boost sales:

Because the trust providers’ main assets are their brands, and those brands benefit from network effects, it’ll generally make sense for these companies to consolidate. Ultimately there will be one or a few major players, just like there are in the credit card world.

Other participants in the ecosystem will want to display the brand too. You’ll see gateways cobranding with the trust providers, just like today you see cards cobranded with Visa and their issuing bank.

As a result, the trust providers will be building a network of vetted merchants and gateways. To make sure only good actors are in the system, they’ll need to set and enforce rules and regulations for acceptable behavior—otherwise their brand will become less meaningful. This brings us back to a world of a few entities who get to set the rules.

 

Did you catch that? “Unless we solve decentralized reputation (which people are starting to think about), the Bitcoin ecosystem will see the emergence of a few centralized consumer trust providers.”  Are the advocates for a more fair and just system based on Bitcoin just going to roll over and roll up their straw mats like so many scarecrows who were occupying Zuccotti Park and now that Ben Lawsky has come through with his New York State sickle and cut down the harvest we’re “back to a world of a few entities who set the rules.”

Think about that for a minute.  Is that the “promise” that everyone has been so excited about Bitcoin bringing to the economy equanomy?  Are you convinced that simply because CNBC claims to be “First In Business Worldwide” and that New York City claims to be “the financial capital of the world” that Bitcoin is going to just hang there on that scare pole like it doesn’t even have half-a-brain… or half-a-heart… or half-a-courage… or the electronic ability to satisfy the double coincidence of needs half-of-money while transmitting the results of a means test back to headquarters every time you go through the check out line at Wal-mart with your SNAPcoin card… not to mention the Euro’s ability to function as the store-of-wealth-half  (they do have gold backing the Euro in case you didn’t notice – Deutsche Bank balance sheet withstanding even though it’s Germany’s gold – shoulda pushed those sanctions I guess)… but I digress.

What is going on with all this exactly?  Well, unless Dave gets a beach chair between Henry Kravis and Jeremy Allaire within the next 45 days (make that 44… 43… 42) and unless Barry Silbert and Vitalik Buterin decide to start working on their tans somewhere besides the Jersey shore (channel Islands version), the clock is ticking on Bitcoin when it comes to this side of the pond and that side of the pond while the Isle of Man in the middle is still fair game.  As I was reading Greg Brockman’s piece, I kept feeling a little bit like I was reading a piece about Ripple… not Bitcoin.  Then later on in the piece, Greg wrote this…

“There are a number of cryptocurrencies which already have gateways baked in at a protocol level (such as Open Transactionsand Ripple). However, there are huge network effects in any financial system, and to date these other systems have failed to win the necessary user support.”

Hmmm?  That really makes a scarecrow think.  Add on top of that no mention of Ethereum (clearly skiing outside of the Lawsky Lawski and across the Swiss Alps with their $750k crowdfunded “equity” raise in two hours today – isn’t equity crowdfunding illegal (cough)… guess not if you’re Goldman) and no mention of Hyperledger.com.  Where are we heading exactly Toto?  Dave gets a weird feeling that there are two Yellow Brick Roads that we’re going to be traveling concurrently. One of those roads is decentralized and one of those roads is distributed.

follow… follow… follow… follow… follow the escrow road… (i.e. follow the money)

If Lawsky is going to essentially ring fence the USA, is he going so far as to make sure something like Henry Kravis’ increased investment in First Data and Jeremy Allaire’s relationship with Accel Partners end up with a combined regulatory groomed ski slope such that they are “The winners in this space” as the space was defined so clearly by Brockman.  It doesn’t seem too far-fetched to Dave that First Data would love to get their hands on their own medallion (think the Bitcoin “B” in addition to the MC/V window stickers for merchant acceptance).  Sure “Visa CEO doesn’t see Bitcoin as a threat” (http://www.coindesk.com/visa-ceo-bitcoin-threat/) because of its “complexities” while the established payment providers have “established network rules” and an “understanding of how things operate”… what seems to be the problem?  I guess there isn’t a problem as long as you can trust First Data not to go into competition with you via Bitcoin and if you’re the CEO of McDonald’s I guess you don’t have to worry about Chipolte’ eating your lunch (read 17% SSS increase) while you try to compete with Starbucks by sending every self-respecting construction worker to Burger King while your staff spends ten minutes applying whip cream to your specialty drinks… heck of a job Brownie.

Here’s what OpenPodBayDoorsHal had to say about the Lawski-daddy on Reddit:

It’s worse than that. These regs cannot be followed. Coinbase is supposed to get me to tell them the name and physical address of anyplace I sent Bitcoin from my account, which they then have to keep for ten years. How am I supposed to do that? I bought something from a Bitcoin merchant in Guatemala, how do I know their address? How am I supposed to communicate that to Coinbase? Lawsky knows exactly what he’s doing, he’s doing exactly what his bosses told him to do. Stop Bitcoin and make it look like it’s just regulations.

So, there are some fairly unhappy Bitcointhusiasts out there and there may be some CEO’s who are sitting on Dee Hock’s laurels with a failure to appreciate just what kind of chaos it took to grow those self-similar fractalized laurels, but what’s the real plan?  Getting back to those two Yellow Brick Roads that diverged, distributed and decentralized in the yellow wood… I’m working on that one.  I’m pretty certain that the Euro has a partial yellow (read gold) backing and I’m pretty pretty sure that at least half of the new divorced currency model is going to be based on gold and the other half on the blockchain.  As far as the Bitcoin half, it looks like select places (think Jersey and the Isle of Man – see today’s story: http://www.coindesk.com/isle-man-clarifies-regulation-digital-currency-businesses/) are going to handle the coin cleansing much in the same manner they handled the wash dry and fold of paper money in the past.

Greg Brockman wasn’t the only one who earned their stripes this week, Brett King over at Medium.com did the yeoman’s work when he penned Bitcoin’s Failed Coup of Wall Street which includes an in-depth analysis of the all important payment systems metric of acceptance.

Brett King is Killing It

Here’s Brett expounding on the implications that Bitcoin global transaction volume peaked at US $180 million in June even though more users are downloading Bitcoin wallets they aren’t spending the money that they put in those wallets.

What we need is to get Bitcoin wallets on phones, being used everyday. For that consumers need places to spend their Bitcoin — this is good transaction volume, as opposed to bad transaction volume which curtails adoption growth. The only other way to go is to encourage stable growth as an asset class, so that Bitcoin outperforms the stock market on returns, while being less volatile — given Bitcoin’s nature as a pseudo commodity, that is extremely unlikely. If we encourage Bitcoin as an asset class, then the dreams of supplanting the centralized banking systems of the world dies.

In July Dell computer announced that they would start accepting Bitcoin for purchase of their products. That is a huge announcement for Bitcoin. Unfortunately, these types of announcements are just not coming quickly enough to stimulate the right type of growth for Bitcoin.

Let’s face it — when a mobile wallet in Kenya, or a coffee company out of Seattle has more merchant acceptance than Bitcoin, you know we have an uphill battle for adoption. Regardless of what you think of the Blockchain, or the fantastic decentralized model behind Bitcoin, consumer adoption and frequency of use is the best indicator of the ability of Bitcoin to disrupt either payments or the value store model of the existing banking system. That is the problem we have to fix if we don’t want to relegate Bitcoin to a hedge commodity in the medium term.

If you believe in Bitcoin — you need to start spending it, not holding it for asset gain. If you’re not spending it, you’re killing Bitcoin.

When Craig Newmark attempted to convince me that there was something called “a culture of trust.”  I answered the same way that the Dos Equis most interesting man in the world answered when asked about rollerblading…. “No.”  Today we have Greg Brockman saying that trust is an inspiration.   “The winners in this space will instead be companies which inspire consumers to trust those they endorse.”  Dave’s not so sure about that idea either.  Then Greg goes onto say “They’ll gain acceptance among Bitcoin-accepting merchants if they can boost sales.”  Now you’re talking.

And finally, Eric Vorhees expresses his opinion on the Lawsky Lawski

 

 

 

 

https://stripe.com/blog/bitcoin-the-stripe-perspective

https://medium.com/@brettking/bitcoins-failed-coup-of-wall-street-621bd309b18

The European Banking Authority recently published their study on a proposed regulatory framework

http://uk.reuters.com/article/2014/07/04/uk-eu-bitcoin-idUKKBN0F919320140704

Dave’s not new to the Bitcoin escrow party – here’s 9 articles on the subject for your consideration: http://tradewithdave.com/?s=escrow+and+bitcoin

On Dee Hock or why old guys rule: http://tradewithdave.com/?s=%22dee+hock%22+

 

Totalitarian With Ben

July 22nd, 2014

And yesterday they thought Dave’s use of the word “totalitarian” was a bit strong and inflammatory.

 

http://www.reddit.com/r/Bitcoin/comments/2b1jpl/dear_ben_lawsky_thank_you_for_the_totalitarian/

Bait Then Tackle

July 21st, 2014

Lawsky's Bitcoin expedition goes all in... hook, line and sinker

It was back on May 18, 2013 when Dave went all Robert Frost and dropped into Jon Matonis email box some cryptic thing-a-majig about "two roads in a yellow wood."  You see, that was precisely when Dave saw the Bitcoin crossroad a comin' and wondered just how an apparently well-meaning, yet possibly unprepared, self-appointed contingent would face what Dave (and Andy Haldane) like to describe as the "grown a third arm" of macroprudential regulation (aka totalitarianism).

 

“We recognize that – as the first state to put forward specially tailored rules for virtual currency firms – continued public feedback will be an important part of finalizing this regulatory framework. We look forward to carefully and thoughtfully reviewing public comments on our proposal.”

Superintendent Benjamin Lawsky ~ New York Department of Financial Services

 

Wondering just who the NYDFS has "tailored" their rules for?  Well, it doesn't appear to be exactly designed for innovation so much as designed for permission (think Dr. Evil "$1 million dollars" https://www.youtube.com/watch?v=jTmXHvGZiSY).  Here's what the self-proclaimed Two Bit Idiot has to say about the proposed regs.

 

The NYSDFS’s definition of “Virtual Currency Business Activity” must either narrow or additional exemptions must be made for businesses who do not provide hosted storage or exchange services.  Currently, any firm providing currency exchange (Coinbase/Circle/itBit), payment processing (BitPay/Coinbase/Stripe), hosted wallets (Coinbase/Circle/Xapo), or investment management services (Pantera, BIT, Winklevii) must register for a BitLicense.  No surprise or problem there.  

But then the department overreaches by including under its purview many services that never actually access user funds.  These include wallets like Blockchain.info, tipping apps like Changetip, and mixing services like CoinJoin.  The inclusion of non-hosted wallets is especially troubling as it essentially outlaws the personal possession of bitcoins for these users.  By imposing impossible reporting requirements on companies that in some cases literally cannot track user identity, the only solution for these services may be to restrict the IP addresses of users from certain locations. 

We can argue that the onus should be on law enforcement to track illicit funds transferred to and from user controlled wallets, but given Ben Lawsky’s comments yesterday and apparent prioritization of the BitLicense’s anti-money laundering provisions, it appears the NYSDFS is going to great lengths to prevent this type of “leakage” regardless of the cost.  This shouldn’t be a surprise given his previously expressed willingness to sacrifice innovation for militant money laundering compliance, but it remains disheartening nonetheless.  

The department is banning people from owning their own digital cash privately.  Not only is this morally questionable, but it would make New York State the most restrictive regulatory environment in the world - and much more restrictive than even its federal counterparts.  Lawsky and the NYSDFS must understand that this is unacceptable if bitcoin is to create jobs stimulate economic activity and foster much needed innovations in financial services.   

and...

Finally, the BitLicense provisions in section 200.10 have the effect of banning all unapproved innovation, an entrepreneurial thought crime with no real legal precedent or positive effect.  The NYSDFS would be asking all entrepreneurs to submit their ideas for review to a regulatory body that appears unlikely to grasp many of the much simpler elements of Bitcoin’s technology.

...and you thought Dave's use of "totalitarian" was an exaggeration.

I think I counted the word "hope" four times in the following insightful (if not naive) article and this comment was particularly interesting; "New currency innovators would be extremely unlikely to launch in the US, and would very likely follow the lead of Ethereum, Counterparty and other organizations in moving their legal operations overseas."  As far as the Two Bit Idiot's suggesting that you're going to "tackle" team Lawsky.  Good luck with that even if Barry Silbert gets his request for a 90 day comment period so that at least the lawyers get to enjoy their summer vacation.

 

Bitcoin at a Crossroads - Tackling the BitLicense

 

http://two-bit-idiot.tumblr.com/post/92143258184/bitcoin-at-a-crossroads-tackling-the-bitlicense

 

http://www.dfs.ny.gov/about/press2014/pr1407171.html

 

https://bitcoinfoundation.org/2014/07/17/early-returns-on-the-bitlicense-proposal-process/

 

Where Dave was coming from in May of 2013... Know Thy Winkelvii:  http://tradewithdave.com/?p=16662

Which side of the double slit experiment is Lawsky closing?  http://tradewithdave.com/?p=20965

Which side of history is Larry Summers siding with?  http://tradewithdave.com/?p=20832