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TBI's Daily Bit

Stellar

August 1, 2014
Xapo's debit cards are en route to its early VIPs.  Bitcoin core developer Peter Todd joins the Viacoin team.  Gyft sells to First Data in the largest bitcoin venture exit to date. And Jed McCaleb launches his "secret bitcoin project" to stellar reviews (sorry, had to).     

Stellar News

Jed McCaleb has to be the reigning champion for the "I've got the best vision for bitcoin" award.  The dude created Mt. Gox when exchanging the currency for fiat was its biggest pain point.  Then he created Ripple, which is basically the best of the bitcoin payment rails without the associated arguments over whether an inflationary, deflationary, nationless currency that powers those rails is viable in the long-term.  Then he forked his own project at Ripple because he didn't like the way things were being run, slashing the "pre-mine" and giving away all of the tokens needed to work with his new protocol, Stellar.   

Yesterday, McCaleb, Keith Rabois (early Paypal, former COO at Square), and Patrick Collison (CEO of Stripe) launched the Foundation Development Foundation to promote the protocol, which seeks to end the divide between the virtual and traditional currency worlds.  Stellar maintains a public record of transactions through a decentralized network of computers run by banks and other financial firms, known as “gateway” institutions.  Instead of mining, Stellar is giving away 95% of the currency for free, half to applicants, half to charities in the field of economic development and poverty alleviations that have adopted digital money.  They hope to spur widespread cryptocurrency adoption through this cost-free system of acquiring virtual currency.

Stellar is basically banking 2.0.  Non-anonymous and would seem to crush it in the event that the BitLicense gets passed as is.  Good for those who don't care that big brother is watching them (most of the world, unfortunately).

Starting with a Win

It appears likely that the NYDFS is going to grant an extension to the Bitcoin community to submit public comments.  I think Jim Harper is right on the mark with his recent blog post reacting to that speculation.  He writes on the Bitcoin Foundation's blog about the need for both the clarity and specificity of the European Banking Authority's recent risk assessment, and the proactive engagement and urgency of the NYDFS's initiative with the BitLicense.  Risk assessment without action prolongs uncertainty around Bitcoin's integration into the broader financial system unnecessarily.  Action taken without reasoning or explanation can be dismissed as arbitrary and capricious.  The BitLicense and similar European regulations will require both. 

We'll take the much needed extension for now, although I continue to remain mixed in my feelings about DFS.  Some I have spoken with are convinced that Lawsky merely delegated the draft to subordinates, and may have been surprised himself with the aggressive pushback by even the most measured from within the community.  Others believe (much more dangerously), that he simply doesn't care.  Most agree on one thing, though: the focus of rebuttals must center on job destruction, growth retardation for NY's economy, and the opportunities this creates for illicit actors.  It needs to be politically unpalatable for the DFS to finalize these regulations in there current form.  I think we can get there. 

For Those Playing Catch Up

This is the best and most comprehensive overview of the BitLicense, its provisions, its pitfalls, and how it affects the various actors in the bitcoin ecosystem.  Thanks to Davis Polk for sharing.  (Of course, only lawyers could break down 40 pages of regulations into a 43 page presentation…but it's worth the read nevertheless.)

Pay the Piper Folks, Part II

Thanks to those of you who sent tips yesterday and over the past nine months!  

They are always appreciated, and especially helpful given that the thought of paying for a subscription newsletter is anathema to most of us these days.  I was just going through my bitcoin taxes and I've received 5.5 BTC (cost basis $2,700) in tips to date.  

That's better than most bloggers, but after nine months and nearly 2,500 active readers of the Daily Bit (with pretty solid open and click-through rates), it's pretty clear that micro-tipping for digital media (a supposed perk of bitcoin) is without a doubt a myth.  At least to me, but maybe I'm doing it wrong.

So it's time to start revving up the ads.  I've been reticent to do that to date because I like remaining un-compromised, and fear having my hands tied in the event an advertiser deserves a good solid rebuke.  Decisions, decisions...

Meanwhile in Europe...

I clearly have a US bias and unilingual writing capacity, so apologize for those international folks that are waiting for some news that's a bit closer to home.  I should probably beef up on my non-US bitcoin expertise in case the BitLicense stays as is, anyway.  I also thought of tweeting a bit in Spanish, but I'm afraid that my feed will start to resemble @elbloombito's.

 
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.  Visit their site to learn how you can help or check them out at the North American Bitcoin Conference! 



Today's Tid Bits

Mt. Gox, Ripple Founder Unveils Stellar, a New Digital Currency Project
http://blogs.wsj.com/moneybeat/2014/07/31/mt-gox-ripple-founder-unveils-stellar-a-new-digital-currency-project/
Yesterday, Mt. Gox and Ripple founder, Jed McCaleb launched Stellar, a user-friendly product that aims to end the divide between the virtual and traditional currency worlds.  Stellar maintains a public record of transactions through a decentralized network of computers run by banks and other financial firms, known as “gateway” institutions.  Instead of mining, Stellar is giving away 95% of the currency for free, half to applicants, half to charities in the field of economic development and poverty alleviations that have adopted digital money.  Stellar hopes to spur widespread cryptocurrency adoption through its cost-free system of acquiring virtual currency.
 
Gyft Acquired by Leading Payment Service Provider First Data
http://cointelegraph.com/news/112189/gyft-acquired-by-leading-payment-service-provider-first-data-
First Data, a leading provider of payment processing and electronic commerce services, has acquired digital gift card provider, Gyft.  Gyft allows consumers to manage their gift cards digitally through their mobile phones and accepts bitcoin. Gyft will remain a standalone brand, and will continue to expand.  The terms of the acquisition have yet to be disclosed.
 
Peter Todd Joins Viacoin Development Team as Chief Scientist
http://www.coindesk.com/peter-todd-joins-viacoin-development-team-chief-scientist/
Peter Todd, Bitcoin Core developer and current Coinkite advisor, has joined the Viacoin development team.  Todd will serves as the chief scientist for Viacoin’s Bitcoin 2.0 technology concept project and ClearingHouse, a decentralized smart contract platform that is being developed alongside Viacoin.   Todd’s main focus will be treechains, a concept he created that allows for block chain scalability, side-chain coordination, and mining decentralization.  Previously, Todd was involved with the development of mastercoin, Counterparty and coloured coins.
 
Bitcoin to Gold: Coinabul Faces ‘Class Action’ Alleging Fraud
http://www.cryptocoinsnews.com/news/bitcoin-gold-coinabul-faces-class-action-alleging-fraud/2014/07/31
Coinabul, a company that claims to be “the first Bitcoin to gold service,” has been accused of committing fraud and now faces a ‘Class Action’ lawsuit.  A man named Yazan Hussein claims to have paid 1,654.54 bitcoins for gold last year and has yet to receive any, he filed a Federal complaint last Friday.  The problem now appears to be widespread. Coinabul has said to receive millions in payments since June of last year, without sending out any gold.

Xapo’s Debit Card Finally Released
http://www.cryptocoinsnews.com/news/xapo-easy-bitcoin-wallet-secure-vault-convenient-debit-card-finally-released/2014/07/31
According to Xapo’s Chief Strategy Officer, Ted Rogers, it’s first shipment of debit cards went out on Tuesday, July 29th.  Xapo’s debit card will allow users to spend their bitcoins at any merchant (online or offline) that accepts debit cards, without the merchant knowing you’re spending Bitcoin.   Xapo’s wallet and debit card service are free, with the exception of a $15 original charge to get the actual debit card.
 
WikiLeaks Remained Afloat Thanks to Returns on Bitcoin Investments
http://newsbtc.com/2014/07/31/wikileaks-remained-afloat-thanks-returns-bitcoin-investments/
Julian Assange, WikiLeaks founder, has revealed that despite being barred by PayPal, VISA, and MasterCard, the controversial journalistic outlet managed to remain in operation due to “strategic investments” in bitcoin.  The two bitcoin price spikes in 2013, when the digital currency was worth $200 in April and $1,000 at the end of the year, allowed WikiLeaks to reap the return on their bitcoin donations, which funded their site.  According to WikiLeaks’s public bitcoin address they have received 3,859 bitcoins (worth around $2.26 million), with a remaining balance of 3.88 bitcoins.
 
Circle Offering Some Users $50 For Credit Card Issues
http://newsbtc.com/2014/08/01/circle-offering-users-50-credit-card-issues/
Previously, Circle users who bought bitcoin with their credit card were being charged hefty fees by financial institutions for taking out cash advances.  Circle responded by giving some users $50 who may or may not have been affected by the fees.  Bruce Fenton, Atlantic Financial President, posted a screenshot to reddit showing an email from Circle giving him $50 in bitcoin “just in case” he was affected by the inconvenience. 


Upcoming Events

Cryptolina Bitcoin Expo (August 15-16 in Raleigh, NC) 
Frequently cited as a “New Silicon Valley” of the East Coast, the Research Triangle region is a natural fit for the expo due to the thousands of high-tech jobs and many industry leading firms who call it home.  Keynote speakers Ed Moy, 38th Director of the US Mint and Adam Draper of Boost VC will lead the conference.  Additional attendees will include representatives from BitPay, Mycelium, Bitshares, yBitcoin, Duke University, College Crypto Network and other prominent legal and investment firms.

APEX: Digital Currency Partnerships (September 8-9 in San Francisco)
APEX is the latest conference aiming to bridge the divide between the traditional finance industry and digital currency innovations.  The conference will feature panels that discuss 
digital currencies as transactional currencies, investment vehicles, protocol platforms and the underpinning of financial services for mainstream and underserved consumers.  Don't forget to nominate the College Crypto Network as the "most impactful organization"!

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.

 
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I'm not going to beg, but if this "pay for value" model works for Louis C.K., then it works for me.