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Bitcoin isn’t a currency, Bitcoin advocates argue

washingtonpost.com / Brian Fung / August 1 at 10:12 AM

You may know Bitcoin as a kind of digital cash that can be spent just like the U.S. dollar and can’t be traced to a person’s specific identity. Maybe you’ve even heard it described as a virtual “currency.”

Well, Bitcoin supporters are now distancing themselves from the word — at least as it’s used in Florida law.

Advocates of the payment technology are defending two men who earlier this year were accused of using Bitcoin in a money laundering scheme. According to documents filed in state court, Pascal Reid and Michel Abner Espinoza were approached months ago by an undercover Miami Beach police officer and a Secret Service agent. The law enforcement officers told Reid and Espinoza that they were interested in buying bitcoins to obtain stolen credit card numbers.

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RNLI will now accept Bitcoin Donations

cryptocoinsnews.com / PJ Delaney / 31/07/2014

The Royal National Lifeboat Institution has just announced that it is to test accepting donations by Bitcoin. It now claims to be “the first major charity in the UK or Ireland to accept Bitcoin”.  Leesa Harwood, the RNLI Deputy Director of Fundraising and Communications, explained that it is her belief that:

“The RNLI has a history of innovation in fundraising, holding the first street collection in 1891. Bitcoin is an innovative new kind of currency and we believe that accepting Bitcoin will result in donations we may not otherwise receive, as well as connecting us with new types of supporters.”

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Bitcoin Price: When News is and Isn’t Important

By @Doug88888 [CC BY-NC-SA 2.0], via Flickr

coinbrief.net / Evan Faggart / July 31, 2014

In the last two weeks, since Dell’s announcement that it would accept Bitcoin as payment from its customers in the United States, the Bitcoin price has been falling and the community has been clamoring to find out why. People all over the Internet have embarked upon wild goose chases in order to find the cause of the current Bitcoin price decline, myself included. This decline has led many people to the belief that news—one of the most important movers of the Bitcoin price—really has no effect on the markets. They point to the fact that the Dell announcement had no impact on the price and in fact, a few days after the announcement, it actually began to fall.

However, it simply cannot be denied that news developments do indeed have impacts on the Bitcoin price. While the most major pieces of news have the largest directional influence in the market, every single piece of news—positive or negative—has some impact on prices. Even if it is to convince individuals to refrain from buying or selling. Therefore, the perceived lack of influence that recent, positive news stories have been having on the Bitcoin price are unfounded; they have at least contributed to a foundation of confidence that could serve to cut down on some Bitcoin price volatility.

Furthermore, using the Dell announcement as evidence that news has no impact on the Bitcoin price is laughable, as the announcement had a definite impact on the price that has seemed to have been overlooked by the majority of the community. So, I decided to point this movement out in my latest Bitcoin price analysis. Approximately an hour and a half after the Dell news hit the community, the price rose by 2.26%, peaking at $634 and settling in the $620s before beginning its decline.

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Ecuador: The First Nation to Create its own Digital Currency

cryptocoinsnews.com / Venzen Khaosan / 31/07/2014

Over the weekend, CCN reported on the government of Ecuador’s decision to ban Bitcoin, along with all other cryptocurrencies, via a National Assembly majority vote on July 23rd.

An outright ban placed on Bitcoin by one nation, or another, has always been inevitable. What is more interesting (and unexpected), in the case of Ecuador, is its concurrent announcement of plans to create its own national cryptocurrency.

Ecuador is small South American country situated in the Andes, between Peru and Colombia. The country’s booming mining economy and hydro-electric output is sizable and in 2013, Ecuador’s economic growth surpassed that of it’s giant neighbor, Brazil.

Glossing over the practical benefits such as a public record of government transaction, elimination of counterfeiting, reduction of public sector corruption, etc., the announcement is significant because it apparently defies two key principles of the cryptocurrency domain, namely:

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Coinapult eliminates Bitcoin volatility with ‘Locks’

siliconangle.com / MELLISA TOLENTINO / JULY 31ST

One of the biggest hindrances in the wide adoption of Bitcoin is its price volatility. No one wants to invest, say $1,000, today and have that value drop by tomorrow. But neither has anyone attempted to address this issue and save investors a pretty penny – until now.

Coinapult, a company that offers services such as Bitcoin wallets, delivery and payments processing, has announced a new service called Locks which aims to address Bitcoin’s price volatility. The service allows users to peg the value of their Bitcoin to the price of gold, silver, British pounds, US dollars and euros. What this means is that if a person locks $1,000 of Bitcoin, they will always have $1,000 worth of Bitcoin, even if it’s value fluctuates.

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NORWAY COULD BECOME CASHLESS BY 2020 – VALHALLA FOR CRYPTOCURRENCY?

cryptoarticles.com / JP Buntinx / July 31, 2014

A few days ago, I read one of the most intriguing finance-related articles I have seen in a while. Norway, a country in northern Europe, is looking to completely remove the ability to pay with cash , anywhere in the country. Could this be a golden opportunity for cryptocurrency?

As the article states, only 5% of Norway’s daily transactions are paid in cash. Other payment methods, such as bank cards and credit cards , dominate the financial transaction landscape. Five percent is next to nothing to be honest. Here in Belgium, I think it’s about fifty-fifty between cash and cashless transactions on a daily basis.

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A History of Zombie Events

letstalkbitcoin.com / John W. Ratcliff / August 1st, 2014

About a month ago, I posted an article on Let’s Talk Bitcoin entitled “Rise of the Zombie Bitcoins.” In this article, I presented a great deal of data and analysis about the state of the bitcoin blockchain in relation to long-unused addresses. In that article, I argued that the bulk of the bitcoins mined for the first two years have never been moved and, most likely, never will be. I also argued that bitcoins that have sat in particular addresses for an extremely long time with absolutely no spend activity are arguably lost forever. In total, these “zombie” bitcoins represent roughly 25% of the total number of bitcoins that have ever been produced.

This is such a huge quantity that finding out whether they should be considered part of the active economy is an important mystery to investigate. And investigate is what I have been doing. I have discovered, in the data presented in this article, strong evidence that my view may have been wrong. It turns out that someone who mined the earliest bitcoin blocks has been spending them at semi-regular intervals in relatively recent history.

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Merchants Accepting bitcoins for Payment in Africa

Image Courtesy of Salon Supply Store in South Africa

coinbrief.net / Michael Kimani / July 31, 2014

‘Bitcoin for the developing world & unbanked’- a theme that reverberates across online bitcoin communities. In spite of all these discussions, most of the Bitcoin action is seemingly unfolding overseas – North America, Europe & Australia. Sensationalist mainstream media heavily focuses on events in more developed parts of the world (Dell, Gyft, Overstock, Beepi) – rightly so as these events are great for the Bitcoin ecosystem overall.

Still, some light needs to be shed on other parts of the world -like the African continent. A fairly new concept – Bitcoin is unknown in some parts of Africa and simultaneously gaining traction in East, West & South Africa.

Savvy entrepreneurial Africans and businesses recognize the benefits of adopting Bitcoin as a payment method.

I’ll highlight some noteworthy merchants pioneering Bitcoin payments in East, West & Southern Africa.

Merchants Accepting Bitcoins in West Africa

Nigeria

For a long time, Nigerians have encountered friction in financial transactions online beyond the national jurisdiction – partly due to their renowned email scams and online swindling attempts. Despite these barriers, the ecommerce scene in Nigeria is a leader on the continent. Recently, PayPal launched an online payment alternative in Nigeria as part of a company roll out into 10 new markets.

Minku

Minku is a boutique fashion and accessories online start up registered in Nigeria as a company and for tax purposes. Kunmi Otitoju, the founder, designs fashionable high end leather bags sourcing local materials and labour from Nigeria. Minku’s bags and accessories have a market both locally and internationally with clients spanning 16 different countries.

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An Open Letter To New York Financial Services Chief Ben Lawsky About The Proposed Bitcoin Rules

REUTERS/Eric Thayer

businessinsider.com / RYAN SELKIS / JUL. 31, 2014, 2:38 PM

Editor’s note: This post originally appeared on The Two-Bit Idiot. New York Department of Financial Services Chief Ben Lawsky recently released a draft proposal for a BitLicense that would have to be obtained by any New York firm that processing Bitcoin. Dana Syracuse, whom Selkis also addresses is DFS general counsel. 

 Dear Mr. Lawsky and Mr. Syracuse:

My name is Ryan Selkis, and I am a Bitcoin entrepreneur, journalist and former venture capital and investment banking professional.  Thank you for providing me and others from the virtual currency community with the opportunity to submit public comments in response to your department’s recently issued BitLicense proposals.  I would like to commend you and your colleagues for your recent efforts to engage our community and better understand the potential and challenges associated with integrating virtual currencies into the broader financial system.  Now that an initial regulatory framework has been outlined, it is critical that your department iterate on its proposals and listen to the genuine concerns of the broader Bitcoin community.

Finalizing measured and effective regulations is incredibly important for the health of virtual currencies.  Not only will the New York BitLicense help legitimize Bitcoin in the financial capital of the world, but it will also set the standard for how other state and national regulators choose to oversee virtual currency related businesses in the future.  As a bitcoin entrepreneur, widely-followed industry analyst and former financial services professional, I believe I am uniquely qualified and positioned to suggest modifications that will help strengthen and streamline these important regulations.

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Bitcoin-to-Gold Service Faces Class Action Over Alleged Fraud

coindesk.com / Nermin Hajdarbegovic / July 31, 2014 at 20:25 BST

Bitcoin-to-gold website Coinabul LLC is facing a serious federal class action alleging that it defrauded some of its clients.

The leading plaintiff is Yazan Hussein, who claims he transferred 1,644.54 BTC to Coinabul last year, but did not receive the gold he ordered.

The federal complaint was filed in Illinois on 25th July. It names Coinabul and its CEO Jason Shore as defendants. Hussein demands a jury trial.

Hussein turned to Edelson law for representation, the same firm heading the Mt. Gox class action in the US. Chris Dore, a partner at the firm, told CoinDesk that Hussein reached out to the company after trying to resolve the Coinabul dispute for close to a year.

Dore explains:

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The Wall Street Crypto Show – July 31st, 2014

The Wall Street Crypto ShowPublished on Jul 31, 2014

Bitcoin’s “Political Neutrality is a Myth” – Amir Taaki Interview

cointelegraph.com / Kenny Spotz / 2014-07-31 09:36 AM

Amir Taaki is a skilled programmer and one of the leading minds behind Dark Wallet, an app that will allow Bitcoin users to easily conduct anonymous transactions. He also happens to have strong feelings about some other important actors in the cryptocurrency community.

On July 24th, he posted this thread on Reddit’s /r/Bitcoin forum where he called out Bitcoin developer Mike Hearn as a “crony”, accused the Bitcoin Foundation of doing “jack shit for Bitcoin”, and pondered why web wallet/broker Circle had not responded to developer Peter Todd’s inquiries about whether they would be implementing censorship or surveillance technology.

I contacted Amir to see if he would be willing to expand his thoughts on Bitcoin corruption past what he wrote in the thread, as well as to learn more about his visions for a crypto-anarchist future. Here are his responses.

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#Bitcoin2014 – Panel: Technical Possibilities of Bitcoin Exchanges

Bitcoin FoundationPublished on Jul 31, 2014

bitcoin’s potential in Kenya (featuring bitcoin-related startups in Kenya)

thenomad.info / YOUNG / AUGUST 1, 2014

The majority of the countries in Africa have had problems with payments for a long time. The difficulty of sending payments across borders has been a major problem for most African countries, and a solution to this problem was urgent. Luckily, bitcoin was introduced, and countries like Kenya are seeing a rapid growth of the bitcoin industry and community.

“Thanks to bitcoin, it’s about to become a lot easier to move money in Africa.”

“ M-Pesa, a successful mobile money platform in Sub-Saharan Africa, is embracing bitcoin. The service will give rise to transactions with negligible fees (~$0.04), and could dramatically slash revenues of existing money transfer services like Moneygram, Western-Union and Paypal. That is, if the famed digital currency catches on.”

“i see bitcoin kenya growing very fast.”

Startups

MamaMikes

A Kenya based retail and Wholesale eCommerce company Mamamikes recently started to offer bitcoin as a payment option to their users allowing anyone in Africa to buy a wide range of goods and services including: electronics, kitchen accessories, payments, gifts, clothes and much more.

CEO of Mamamikes, Segeni Ngethe, explained :

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David Silva Smith of So What’s Bitcoin @ Coin Congress

Money & TechPublished on Jul 31, 2014

David Silva Smith, author of ‘How I Will Retire In Two Years By Investing In Bitcoin’ and Owner of ‘So What’s Bitcoin’, talks with Money & Tech’s Rebecca Ahn at Coin Congress in San Francisco. They discuss So What’s Bitcoin, a educational website aiming to help businesses, developers, and everday people better understand the nascent digital currency. During the convention, Smith presented on the Bitcoin Mass Adoption panel, so they also talk about ways the community can further these goals going forward to reach 1 billion users and beyond.

Overstock to Pay Employee Bonuses in Bitcoin

mashable.com / TODD WASSERMAN / July 31, 2014

Overstock, which began taking bitcoin in January and posted $1 million in sales two months later, is so enamored with the currency that it plans to offer employee bonuses in bitcoin too.

Judd Bagley, a rep for Overstock, says the company is trying to figure out how to offer bitcoin bonuses by the end of the year. If an employee opts for such a bonus, they’ll get a premium over what they’d get if they take cash instead, he said.

Bagley added that Overstock’s bitcoin sales just recently eclipsed $2 million. “We experienced an initial surge, there was a lot of excitement,” he said. “It settled into something a little more predictable.” Bitcoin sales account for about a 0.25% of the average day’s sales, he says. Overstock posted revenues of $673.7 million in the first half of 2014.

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Beyond Bitcoin – 11 – The NXT Economy

Published on July 31st, 2014 by Arthur S. Falls

This episode Bas Wisselink, an NXT community organiser joins me again to discuss what’s going on in the next ecosystem. From a little grand theft crypto to a new altcoin adapter for the next asset exchange, there is a ton of interesting stuff going on and Basis always great value.

Why the head of Mt. Gox Bitcoin exchange should be in jail

arstechnica.com / Cyrus Farivar / Aug 1 2014, 3:00am PST

Mark Karpeles left France months before being tried, convicted in absentia.

While Mt. Gox owner Mark Karpeles was growing what would become the world’s largest Bitcoin exchange, he should have been serving time in his home country of France. He was sentenced to a year in custody in 2010 on fraud accusations.

A newly obtained French court document shows that Karpeles has a civil and non-civil judgment pending where, in addition to custody, he also owes €45,000 ($60,000). The document is being published jointly for the first time by Ars Technica and the French publication Le Monde. (Read the French original here and an English translation here.)
The case was brought by a former employer who accused Karpeles of stealing customer user names, customer passwords, and a domain name, among other grievances. Under French law, Karpeles is not considered a criminal but rather “un délinquant,” a delinquent offender. It’s a lesser label than “criminal,” because that word is reserved only for very serious crimes within the country.

The 2010 decision shows that Karpeles lost by default, and he was found liable of “fraudulent access to an automated data processing system” and “fraudulent changes to data contained in an automated data processing system.” The document also states that Karpeles admitted to French authorities that he had “pirated” a server.

At the time, Karpeles was living in Japan. But a year after the judgment, he’d taken over Mt. Gox, well before the exchange and digital currency had become a household name. The French court documents acknowledge that he was never notified of the case and did not defend himself—hence, he lost by default. Karpeles’ own blog states he moved to Japan in 2009, and it appears he hasn’t returned to France since.

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Argentina Debt Default — Bitpay Zero Fees — Wikipedia Bitcoin — Overstock Bitcoin Worldwide

MadBitcoins, Published on Jul 31, 2014, 

SecretBitcoinProject.com goes Stellar! But… why?

letstalkbitcoin.com / Mike Roncone / August 1st, 2014

No I’m not referring to the Incubus song, although I like where your head is.

Rather, Jed McCaleb’s new project (formerly secretbitcoinproject.com) has finally come to fruition. Today users who signed up to be alpha testers received an email which introduced the new project: “Stellar”.

Before we begin, I would like to caution you that this article is not intended to give a full technical breakdown of any of the protocols described within. The information presented is intended to convey a very basic level of understanding and many aspects of the programs have been left out. There is also quite a bit of conjecture on my part. Though I have tried to be relatively unbiased and present the facts where there are facts and my interpretation of events where interpretation is needed, you may see things differently. I encourage you to post those differences in the comments so that we can talk about them further! I have a financial stake in both the Ripple network and the Stellar network.

For anyone who is familiar with Ripple, Stellar will sound quite familiar to you. This is because Stellar is essentially a carbon copy of the Ripple project of which Jed was a founding member. Ripple was Jed’s biggest pet project after selling Mt. Gox. Though it has received seemingly infinite amounts of scrutiny, it has also arguably seen quite a bit of success in its resiliency.

The question is: Why would Jed ditch Ripple and create basically an exact copy of it? To answer that, we have to speculate a bit.

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