Original author: Tanaya Macheel
Coin News
Following weeks of rumors, Braintree has announced that it will soon enable customers to accept bitcoin.
Braintree, a subsidiary of eBay-owned PayPal that was acquired for $800m in 2013, revealed on its blog that it intends to release a software development kit (SDK) developers and merchants can use to add bitcoin to their existing payment methods.
The integration is the result of a partnership with Coinbase, which was first reported to be in talks with Braintree about a potential partnership this August. Further, the news was officially announced at TechCrunch Disrupt San Francisco during a talk given by Braintree CEO Bill Ready.
Ready told TechCrunch:
“This is PayPal making a move to embrace Bitcoin.”
The official announcement also followed a teaser video that caused a stir in the bitcoin community today issued by PayPal itself and suggesting that Braintree’s parent company may move to accept bitcoin.
Coinbase indicated that developers at Coinbase and Braintree will be working together closely over the next few months to complete the integration. No formal timeline for the official launch date was given.
In its blog post regarding the announcement, Coinbase indicated that Braintree businesses will need to open a new merchant account with Coinbase in order to complete the integration upon its release.
However, Braintree merchants that want to get in early on the opportunity can move to contact Coinbase now through a dedicated email address. Further, Coinbase indicated that it will also disseminate future news relating to the launch through this mailing list.
As previously noted, the mobile payments processor supports thousands of high-tech startups, including notable brand names such as Airbnb, Dropbox, Hail-O, Hotel Tonight, LivingSocial, OpenTable, TaskRabbit and Uber and more.
Hat tip to TechCrunch
Braintree offices image via Fast Company
BraintreeCoinbasemerchants
Original author: Pete Rizzo
PayPal has sparked speculation in the wider digital currency community with the release of a new promotional video that makes reference to bitcoin.
The video, titled ‘PayPal Voices’, was published on the company’s official YouTube page today.
The one-minute promo features a string of actors who are described as “the voices of the people economy”, extolling the benefits of using PayPal. Bitcoin is mentioned just 10 seconds into the video in the following voiceover passage:
“Our phone is our wallet. We can spend bitcoin with a tap, without a pocket.”
The news provides the latest evidence that either the eBay-owned company or its mobile payment processing subsidiary Braintree might move to integrate bitcoin into an upcoming project.
First reported by The Wall Street Journal this August, such speculation was given yet another boost today in an article by Re/code that suggested Braintree’s announcement may come as soon as today.
Braintree was acquired by PayPal in September 2013. PayPal itself is a subsidiary of eBay, one of the largest e-commerce companies on the web. Outspoken bitcoin advocate Marc Andreessen sits on the board of eBay.
Speculation mounts
At the time of writing, PayPal’s only reference to bitcoin integration is the excerpt from the video.
Still, speculation has run rampant, with more than 400 comments about the video splattered across YouTube and reddit.
Notable bitcoin investor and SecondMarket executive chairman Barry Silbert has joined in discussing the significance of the video:
Looks like @PayPal is launching bitcoin integration: https://t.co/eMBXipgyw7 “We can spend Bitcoin with a tap” (h/t @TuurDemeester)
— Barry Silbert (@barrysilbert) September 8, 2014
More information needed
Details are still sparse, and even if the video is proven to be authentic, it’s not entirely clear what plans PayPal has for the digital currency.
While the video does not necessarily mean that PayPal will integrate with bitcoin, the timing of both Re/code’s news and the video raises many questions.
The bitcoin community has been vocal about the relationship between PayPal and bitcoin in the past. Many argue that the digital nature of bitcoin lends itself perfectly to PayPal’s business model, while others contend that bitcoin doesn’t need the support of a centralized platform to flourish.
Whatever the case may be, a PayPal-bitcoin integration would certainly shake up the industry and bring the digital currency significantly more visibility with the general public.
CoinDesk is continuing to follow this developing story. At press time, neither PayPal nor Braintree had responded to requests for comment.
Image credit: Denys Prykhodov / Shutterstock.com
BraintreePayPal
Original author: Tom Sharkey
Record of OKPAY’s payments to Mt GoxEarlier assurances
According to customers writing on the Bitcoin Talk forum, OKPay had originally said any funds left un-sent to Mt Gox would be returned to depositors.
They posted the following earlier message from OKPay Support:
“We want to assure you that your recent payments are on the internal MtGox account in the OKPay System, and, if the MtGox company cease to exist without fulfilling its obligations to customers, we will send your recent payments back to your OKPay account; so your funds will not be lost or stuck without any reason when we receive a confirmed report on the situation.
“We will appeal to MtGox to address this issue and keep you abreast of the situation. We will do everything possible to ensure that our clients either receive the service they paid for or get their money back to the OKPay account.” [sic]
Although several customers expressed a willingness to take legal action against OKPay, others explained such an attempt would be pointless given the payment took place under a court order.
Creditors must wait
CoinDesk reached out to the Mt Gox bankruptcy trustee’s office for comment, but had not received a reply at the time of publication.
While no official reason has been given for the BVI litigation, the trustee would likely consider the extra funds property of Mt Gox to be returned to creditors in some form at the case’s conclusion.
Mt Gox creditors, however, have expressed displeasure at fees the bankrupt exchange has paid since its February 2014 demise, including $200,000 to parent company Tibanne, also owned by CEO Mark Karpeles.
OKPay’s bitcoin headaches
OKPay had suspended transactions involving bitcoin exchanges including Mt Gox as early as May 2013. At the time, Mt Gox was still the world’s most popular bitcoin trading platform with a 70% market share, but had suffered setbacks including cancelled transactions by payment processor Dwolla in May 2013 and a brief suspension of trading in April 2013 for a “market cooldown”.
OKPay explained that its banking partners were “not comfortable with bitcoin and want payments to these firms restricted”. It later reviewed that decision, and currently processes payments to and from a number of different bitcoin exchanges.
Image via OKPay
Mt. GoxOkpay
Original author: Jon Southurst
Vishal Gupta speaks at the Bitcoin Alliance of India student seminarBitcoin in India is showing plenty of promise at the grassroots level, as demonstrated by 250 undergraduate students who attended a seminar at the HR College of Commerce and Economics in Mumbai last Thursday.
Those present already demonstrated a basic knowledge of bitcoin and some of its technical aspects such as block chain transparency and mining, according to Vishal Gupta of the Bitcoin Alliance of India, who headed the presentation.
Gupta told CoinDesk he was impressed at the level of interest, saying:
“College faculty informed me that it was the highest attendance recorded for any visiting guest [to] date as it was an optional class and there was no compulsion on any student to attend the class.”
Topics and questions of interest
The seminar covered both the history and future of money in an almost two-hour session, of which one hour was devoted to questions and answers.
“We ourselves were surprised with the kind of questions students asked,” said Gupta, explaining that most of the students must have read about bitcoin on the Internet, since there is still not much information on bitcoin publicly available in India. The Bitcoin Alliance of India’s website, he said, typically receives about 150 visitors per day.
The Bitcoin Alliance of India student seminarThey also questioned the speaker about the reasons for Mt Gox’s failure, the transparency of transactions on the block chain and predictions for a future when the bitcoin system reduced or stopped payouts to miners.
Gupta said that, after this initial success, he plans to take the student seminar initiative to other colleges in Mumbai. One of India’s premier educational institutions, St Xavier’s College, has already requested a bitcoin lecture of its own.
Student attendees’ views
Helping to organize the event was Raunaq Vaisoha, a finance student who told CoinDesk he had been monitoring bitcoin’s progress since 2012, after coming across it on YouTube. He originally saw it as a volatile investment option but, he said, “I later discovered the multitude of opportunities that it enables otherwise and have been hooked ever since”.
He is currently involved with at least five bitcoin-related startups.
“As is evident from our recent conference in HR College which saw the likes of over 250 people, I am not alone in my interest towards bitcoin. I believe that if well publicised, bitcoin could reach unprecedented heights in India.”
Another participant, student Pulkit Bornani, reported that although he had never used bitcoin previously and had been unsure about it, he now couldn’t wait to get started.
Bitcoin’s properties gave it some unique advantages in his home country, he wrote.
“I really see a future for bitcoins in India where people in villages cannot get to a bank easily and microfinance is somewhat of a taboo. Bitcoin might just be the answer.”
Hurdles facing bitcoin acceptance
The Bitcoin Alliance of India, like similar advocacy groups around the world, is committed to the task of spreading bitcoin awareness – though it still faces some hurdles in its home country with both communication and regulation.
Gupta said privately arranged bitcoin trades remained more popular than exchange-based trades, while many of the popular online options are still limited in their ability to process deposits and withdrawals via banks.
All bitcoin exchanges need to be registered with the government and deposits cleared through the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), the same as commodity and stock exchanges.
Future plans for digital currencies
The country’s various bitcoin groups and businesses have previously held discussions over the possible formation of a chapter of the Bitcoin Foundation in India, and have also worked on a formal white paper to present to the Indian government.
Gupta said he and Vaisoha were also working to open a ‘bitcoin cafe’ in India, to demonstrate digital currency use in an everyday retail setting. Furthermore, Gupta is also involved with more advanced projects to develop the digital ecosystem in the future.
Images courtesy Bitcoin Alliance of India
AsiaBitcoin Alliance of IndiaIndia
Original author: Jon Southurst
For mobile payments pioneer and venture capitalist Carol Realini, the financial world is divided into three camps: those who believe in bitcoin, those who don’t understand it and those have yet to consider or study its technology.
Realini identifies firmly as a bitcoin believer, though she’s not surprised many of her peers don’t share her sentiment.
After all, the former CEO of Obopay – a mobile payments application provider that raised more than $140m, but whose profile declined amid increased interest in mobile wallets – has a blazed a unique trail in the world of payments. This has found her maintaining a focus on financial inclusion, even as the various technologies that could best help her to work toward this goal have changed.
For Realini, it’s her decade of experience striving to empower consumers in emerging markets that she believes allows her to see the full potential of what bitcoin – both its community and its underlying payment platform – could help achieve for global finance more clearly.
Speaking to CoinDesk, Realini framed bitcoin as a way for global innovators to sidestep many of the longstanding issues with legacy payment systems, systems she believes have been unsuccessful in emerging markets due to a fundamental weaknesses in technology.
Realini told CoinDesk:
“If you think about bitcoin in emerging markets, it’s creating a leapfrog opportunity. It’s open, it’s modern, it’s innovative and it isn’t bogged down with all the legacy stuff that supports a minority of the people in these societies.”
Realini isn’t just theorizing about this potential reality, however. She’s also made it clear she wants to support the bitcoin ecosystem.
Of the 100 companies she estimates she’s worked with this year, she’s made an angel investment in only one, emerging market-focused bitcoin services provider BitX, joining the company’s S$1m ($824,000) seed funding round this August.
Legacy systems fall short
Throughout the interview, Realini drew on her expertise in emerging markets, providing a unique perspective gleaned most recently through her book, co-authored with serial entrepreneur and PlaySpan founder Karl Mehta, Financial Inclusion at the Bottom of the Pyramid.
Emerging markets, Realini asserted, are being underserved by traditional financial players due to their inability to grasp the true challenge of the market. She pointed out, that in most of the developing world, ATMs aren’t found on every street corner and debit cards aren’t found in every wallet.
Mobile phones, she explained, offered financial innovators a new path forward in the 2000s, but, even then, the technology wasn’t enough. What happens when innovators have tried to harness the power of mobile phones to attack financial problems, she believes, is that legacy banking systems still form a serious obstacle.
Realini said:
“When you move to mobile, you start to hit up against these infrastructure issues and that these bank products and services are super inflexible and in most cases they don’t fit the needs of the mass markets. They don’t fit the needs and functionality and they’re complicated in most cases – that’s just the reality of emerging markets.”
Fulfilling the vision of mobile
Realini went on to suggest bitcoin could realize the broader vision of early mobile payments entrepreneurs, creating a better platform for the next-generation financial products needed throughout much of the world.
In particular, she cited the fact that many financial products that are commonplace in the developing world, simply will not translate successfully to emerging markets:
“You can just take a Bank of America checking account, introduce it and have it be successful, it just won’t work.”
For example, she cited statistics that suggest that while the average consumer uses a debit card 18 times a month in developed countries, in India this figure falls to just over one time each year. That figure is confirmed by research from the Reserve Bank of India, and provides evidence of Realini’s assertion that financial incumbents are falling short on providing essential financial tools to much of the world.
Realini said:
“If you look at the banks, they’re trying to change this, but the legacy technology and the legacy business is holding them back. They’re moving at a banana slug’s space.”
The ‘myth’ of M-Pesa
She also tackled another oft-cited argument in the traditional payments world: that legacy payments can successfully innovate in emerging markets, as evidenced by successful platforms such as Kenya’s popular mobile money platform M-Pesa.
Launched in 2007, the payment service is now used by more than 17 million Kenyans to transfer cash with their mobile phones in what has been widely viewed as the predominant success story in the global mobile payments space.
Still, Realini sees M-Pesa as an anomaly that not only isn’t likely to be replicated, but that could be outpaced by bitcoin-based solutions. The platform’s major weaknesses, she said, are that it is controlled by only one vendor and that it has yet to offer solutions for the business-to-business (B2B) and merchant markets.
Bitcoin’s open platform as more capable of delivering this full range of financial products, she said, adding:
“I’m betting that the bitcoin community will have a better platform. The basic architecture is better and [it has a] more vibrant and open community.”
More broadly, Realini sees M-Pesa as failing to fully deliver on the promise of financial inclusion:
“I want everybody in the world to have access to all the financial products they need to empower their life and work and M-Pesa was a massive success, but it did not accomplish that. They’ve got work to do. I would just bet on an open collaborative community versus a one-vendor closed community.”
Community over currency
In Realini’s view, bitcoin’s real strength is its open payments platform and its community, not necessarily its underlying currency. Realini expects that bitcoin will be used as a currency by some, but be more powerful for its application in new financial products.
Unlike banks, which she categorized as slow to innovate, bitcoin as a community could move to more quickly provide elegant solutions to emerging markets. These solutions, she suggested, are likely to originate in the bitcoin community before being embraced by banks.
Realini said:
“[Bitcoin] is different in that it’s a better platform to solve hard problems. If there’s any disadvantage in the platform, the community is there and they’re making it better every day.”
What bitcoin needs now, Realini said, is entrepreneurs who can identify specific challenges in select markets.
Scarcity of bitcoin startups
Realini further stated her belief that venture capitalists are beginning to see this same future for bitcoin, but that there will be challenges in the short-term that impede progress. For example, she noted that VCs are having difficulty finding the right startups for their portfolios.
Realini cited her long path to joining BitX’s latest funding round as evidence of this, saying:
“I’ve met a lot of bitcoin companies, a lot of very smart people, but [BitX] were the ones that were super smart and had enough experience. They weren’t so experienced that they were clouded by their experience, but they had just enough that they could build on the experience they had.”
Ultimately, Realini’s overwhelming perception was that the BitX team had both an existing platform and long-term market strategy that could be successful, and that the opportunity was just too big for her to pass up.
“I said I don’t want to sit here. I know these guys are going to be successful, I’m going on the board [of directors], but I don’t want to miss the opportunity to put real dollars in,” she said.
Further, this enthusiasm has led her to make bold predictions about bitcoin and its potential in emerging markets:
“I think we’re going to see bitcoin play a significant role in being the platform for coming up with next-generation banking solutions that are going to serve emerging markets.”
Carol Realini will host a live Twitter chat on 9th September from 12:00pm to 12:30pm EST that will address both the short and long-term outlook for bitcoin, as well as its potential for promoting financial inclusion around the globe.
More information about the event can be found on CarolRealini.com.
Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.
Images via Mobile Beyond; Sura Nualpradid / Shutterstock.com
BitX
Original author: Pete Rizzo
Original author: Nermin Hajdarbegovic
Buying bitcoin from exchanges can involve lots of hoop-jumping, as customers navigate complex and tedious registration and transaction processes. Some people are now cutting through the whole tangled mess, and having their employers pay them in bitcoin directly.
Canadian firm Wagepoint has been helping companies do this north of the border, and has just inked a deal with Buttercoin in the US to help it there, too.
Wagepoint, a startup based in Waterloo and Nova Scotia, Canada, offers Canadian and US companies an easy way to process payroll online.
The firm handles payroll deductions for tax purposes and files all the necessary paperwork electronically. It has processed $120m in payroll payments using traditional fiat currency, but now, a growing percentage of customers are taking advantage of its bitcoin payment services, says CEO Shrad Rao.
“We started it in November 2013. It was a side project,” said Rao, explaining that the firm was interested in bitcoin, and pulled the service together quickly.
“We didn’t imagine we’d get any uptake,” said the CEO, and initially he was right. Nothing happened during November and December, but then, in January this year, he received his first bitcoin request from a customer, which paid out $2,000 worth of bitcoin in salaries.
Since then, the firm has paid $75,000 in bitcoin on behalf of its customers.
How bitcoin payroll works
Wagepoint makes it as easy as possible for companies to make payments in cryptocurrency. Customers don’t have to handle bitcoin at all. Instead, Wagepoint takes its fiat currency and handles the convergence for them.
In Canada, it uses CA Virtex for the exchange. In the US, its deal with Buttercoin now has $1.3m in funding from people including Reddit co-founder Alexis Ohanian. Buttercoin is still in stealth mode.
Perhaps predictably, tech firms are at the front of the queue when it comes to paying their employees in bitcoin. Structur3D Printing, based in Kitchener, Ontario, produces a system for extruding paste that can be used in 3D printing.
Co-founder and president Charles Mire is targeting everything from cake makers and chocolatiers through to hobbyist ‘makers’ with the product, which can handle everything from silicone to cake icing.
Mire doesn’t take bitcoin payments from the company, but his co-founder and director of research and development Andrew Finkle gets 10% of his salary this way.
He said:
“Andrew was in bitcoin from the beginning, and so Wagepoint’s ability to pay in bitcoin was attractive to my cofounder.”
Taxes
There aren’t many financial benefits to a company paying employees in bitcoin, but there may be recruitment benefits, Mire said. After all, technology employees often have plenty of love for bitcoin, and good skills are hard to find, especially in Mire’s industry sector.
“The more we use it, the more we realise that it’s a nice incentive to recruit people in the tech space,” he said.
For example, the company hired a contractor last summer who handled business development for the firm’s Kickstarter campaign. He also had a mathematics and engineering background, which gave him the specialist skills for the job. Structur3D paid him in bitcoin, too.
“Andrew and I are materials scientists but we have a background in applying that to 3D printing,” he said, explaining that he did his PhD on Australia. “When I came to Canada I was amazed that it wasn’t that widespread.”
Around ten companies including Vancouver-based Bench, and Toronto-based RateHub are using the bitcoin payment option, said Wagepoint staff. 80% of the employees taking the bitcoin payment option collect 100% of their net pay in bitcoin.
Employees who decide to take bitcoin payments will need to be diligent, though. Ryan Lazanis, of Montreal-based Xen Accounting, said that they will probably face capital gains issues.
Xen Accounting specialises in virtual currency tax advice, and is based in Montreal’s bitcoin embassy. It numbers Bylls among its clients.
Employee payroll deductions happen in fiat, before the employees are paid their bitcoins, meaning that they will be paid their net salary in bitcoins, Lazanis explained.
The problem is that the Canadian government doesn’t recognise bitcoin as currency. It is an asset, instead, and the little guidance issued by the Canadian Revenue Agency suggests that people account for it as a bartered good.
The tax rules mean that employees will account for bitcoin salary payments as bartered exchange for their services, he explained.
The sticky part is that employees must pay tax on any gains that they make with it, warned Lazanis.
A bitcoin might be worth $500 when a company pays it to an employee, and $600 nine months later, when he or she comes to spend it. That difference is taxable, he suggested – and the most likely tax to be imposed would be capital gains.
Lazanis recommended that employees use a spreadsheet to keep records of their bitcoin value, both at acquisition and when they spend it, saying:
“You need to track your cost base, and most businesses aren’t even doing that. So there are difficulties there.”
Bitcoin may therefore not be the best form of payment for an employees living from pay cheque to pay cheque and using them frequently for transactions. They would have to account for lots of losses and gains throughout a month.
Bitcoin payments would be more workable for employees treating the payment in bitcoin as a longer-term investment. Mire likened it to payment in stocks, which would sit in an employee’s portfolio for a significant time before he cashed out, saying:
“If you liquidate it it becomes a management burden for personal finances. But as long as you’re not cashing out stocks daily, the overall personal finance maintenance isn’t that high an overhead.”
Will more tech firms flock to bitcoin payments as an option? It’s a delightful thought, but where it does happen, we imagine it’ll be used as an innovative means of making long-term savings, rather than for weekly groceries.
Payroll image via Shutterstock
Canada Revenue AgencyPayrollTaxWagepoint
Original author: Danny Bradbury