Original author: Dan Palmer
Coin News
Original author: Emily Spaven
Original author: Nermin Hajdarbegovic
Two months after its launch, world’s first Bitcoin Boulevard in The Hague is still attracting users of the digital currency keen to use their funds in the real world.Bitcoin enthusiasts from within the Netherlands and the world over have travelled to the Dutch city to spend their digital money on delicious meals or chilled beers.So, it’s no wonder that I and Kadhim Shubber ended up there when the CoinDesk team was in the country for Bitcoin2014 on 16th to 17th April.The Bitcoin Boulevard is a project started by Hendrik Jan Hilbolling and Peter Klasen who convinced 10 merchants – many of them their friends – along one canal in The Hague to start accepting bitcoin.On 20th March, the businesses on the two streets running along the canal in the city – Bierkade and Groenewegje – started accepting bitcoin. The original Bitcoin Boulevard comprised of nine restaurants and an art gallery. 
Two streets along the canal in The Hague – Bierkade and Groenewegje – make up Bitcoin BoulevardMany of the participating merchants were new to bitcoin, but Hilbolling and Klasen explained the many benefits of accepting bitcoin.Along with the fact that they would be attracting new customers and gaining publicity, Klasen said he told them that it would be an important statement for the city, explaining:“If they would accept bitcoin, it would be a statement for the city or the nation. That statement would be that we are open for new technology.”New changesDuring the two months that the programme has been up and running, it has garnered media attention from all over the world. However, merchants have also expressed some annoyance with the procedures surrounding the acceptance of bitcoin into their personal wallets. Then life got a little simpler for some of the merchants, when Bit My Money‘s Robert-Reinder Nederhoed started introducing his company’s new point-of-sale system on the boulevard.Nederhoed explained why Klasen and Hilbolling sought out his help:“With the price drop [...] the merchants asked the organisation to come up with a better solution.”Bit My Money’s interface made it not only easier for shops and restaurants to accept bitcoin, but it also reduced the risk of dealing with the volatility of the digital currency.“They get a proof of payment immediately and we take the risk,” said Nederheoed. “They get a signal that it has been paid. They get the exact amount at the end of the week […] there is no risk of fluctuation.”He has visited more than half of the businesses already and installed the Bit My Money POS system in two stores so far.Other cities follow suitKlasen and Hilbolling told us that bitcoiners from other cities in the Netherlands, including Amsterdam, have reached out to them because they want to set up their own Bitcoin Boulevards. 
The Bitcoin Boulevard in The Hague has inspired other Dutch cities to set up something similar.Arnhem, a city closer to the German border, is hosting Arnhem Bitcoincity on 28th May, during which many of the city’s restaurants and cafes will be accepting bitcoin for the day.bitcoin boulevardmerchantsnetherlandsPOS
Two streets along the canal in The Hague – Bierkade and Groenewegje – make up Bitcoin BoulevardMany of the participating merchants were new to bitcoin, but Hilbolling and Klasen explained the many benefits of accepting bitcoin.Along with the fact that they would be attracting new customers and gaining publicity, Klasen said he told them that it would be an important statement for the city, explaining:“If they would accept bitcoin, it would be a statement for the city or the nation. That statement would be that we are open for new technology.”New changesDuring the two months that the programme has been up and running, it has garnered media attention from all over the world. However, merchants have also expressed some annoyance with the procedures surrounding the acceptance of bitcoin into their personal wallets. Then life got a little simpler for some of the merchants, when Bit My Money‘s Robert-Reinder Nederhoed started introducing his company’s new point-of-sale system on the boulevard.Nederhoed explained why Klasen and Hilbolling sought out his help:“With the price drop [...] the merchants asked the organisation to come up with a better solution.”Bit My Money’s interface made it not only easier for shops and restaurants to accept bitcoin, but it also reduced the risk of dealing with the volatility of the digital currency.“They get a proof of payment immediately and we take the risk,” said Nederheoed. “They get a signal that it has been paid. They get the exact amount at the end of the week […] there is no risk of fluctuation.”He has visited more than half of the businesses already and installed the Bit My Money POS system in two stores so far.Other cities follow suitKlasen and Hilbolling told us that bitcoiners from other cities in the Netherlands, including Amsterdam, have reached out to them because they want to set up their own Bitcoin Boulevards. The Bitcoin Boulevard in The Hague has inspired other Dutch cities to set up something similar.Arnhem, a city closer to the German border, is hosting Arnhem Bitcoincity on 28th May, during which many of the city’s restaurants and cafes will be accepting bitcoin for the day.bitcoin boulevardmerchantsnetherlandsPOSOriginal author: Roop Gill
Original author: Daniel Cawrey
Original author: Jaroslaw Adamowski
Power curve: Difficulty on the Bitcoin network over the past year. Source: BlockchainThis has, in effect, concentrated bitcoin’s confirmation power, leaving it in the hands of only those who can afford thousands of dollars of ASIC hardware.Bad actorsBitcoin largely solves the double-spending issue. Despite that, remarkable technical achievement, it doesn’t cater for mistakes, theft and fraud quite so well.The anonymous digital currency has sometimes attracted the wrong types of people – those looking to prey on others who fall under the spell of a never-ending upward trend for bitcoin’s price.Whether it’s illegal online marketplaces, pump-and-dump schemes or shady crypto exchanges, they all create a black cloud over the industry. And, every time there is another bitcoin robbery or scam, it draws attention from the mainstream. 
Now-failed Mt. Gox was once the dominant exchange. Source: Pantera CapitalWhen leaders in the bitcoin industry are discouraged over their inability to be banked in the US, bad actors are the ones who should be blamed.The bad actor problem creates a consumer protection issue for bitcoin. When people learn about bitcoin and are lured to products and services that do not follow best practices, as opaque as they may be in this industry, that’s a problem.As a result, some countries are simply playing safe and pushing bitcoin away from their banking systems.Reactionary regulationAccording to CoinDesk’s 2014 Q1 State of Bitcoin Report, 12% of the 73 countries that have taken some regulatory action on bitcoin can be considered hostile or contentious. 
Source: Bitcoin Q1 2014A number of countries taking a stance against digital currencies appear to be more reactionary in their behaviour than seems justified.One example is India, where a bitcoin exchange in that country was raided earlier this year, causing some bitcoin businesses to cease operating.In China, the major operators there are talking about upcoming periods of hardship as the government cracks down on bitcoin activities.Furthermore, amid rumors of a ban on virtual currencies in Russia, organizers recently felt impelled to cancelled a bitcoin conference that was planned to be held there.These actions perhaps reflect more about the banking systems of those countries than anything a government official says. It reveals that many financial systems don’t want to compete with bitcoin; they would rather regulate it out of existence.A patchwork of reactionary regulatory policies helps no one. This is especially true since international borders simply cannot restrict bitcoin, the decentralized nature of which makes it impossible to ban.A better approach could be a wait-and-see attitude towards this new technology, since its advantages could end up befitting everyone. Countries currently taking this kind of approach include Canada and Israel.Poor mobile platform supportSince last year, Apple has taken a proactive stance towards making sure that users cannot send bitcoin via wallets in its App Store. Furthermore, Google does not allow in-app payments with bitcoin.Although this has not deterred some developers from creating mobile applications for bitcoin, it’s harming the ecosystem.These larger technology companies do not want to compete with bitcoin. So they do the same thing as restrictive governments and use their power to regulate it out of existence – within their ecosystem, anyway. 
Will bitcoin grow with the rise of smart devices capable of remote payments? Source: GigaOmBitcoin is excellent as a method of remote payment. It could be a competitive credit card alternative – especially in remote transactions with mobile or wearable devices. And this is a much better way to receive and send payments instead of using of QR codes.Using Bluetooth Low Energy, Near field communication (NFC) or some other wireless technology could change the way people make payments.However, with billions of dollars relying on the outcome, the major players in the technology industry will do their best to restrict innovations that they do not control.Low adoptionGiven all of the above issues, it’s not incredibly obvious why the average person would want to use bitcoin. Sure, there are many theoretical benefits to using a distributed currency.What is the value, though, to the everyday person who just wants to ensure that money is in the bank?One issue is that banks often overstepped boundaries and the global economic situation has brought hardship for many since 2008. The appearance of bitcoin on the scene represents something new and offers hope to people jaded by traditional financial institutions.Circle and Bitreserve are both bitcoin startups that have recently unveiled plans to bring the digital currency to the masses. They plan to do so by bringing the technology’s benefits to the consumer market by not exposing user to the bitcoin ‘layer’ it still depends upon. 
Is bitcoin stuck in the early adopter chasm? Source: BiznologyMany startups in the bitcoin space tout the ‘wow’ factor of bitcoin. Yet negative events over the past year have left consumer sentiment less positive than the industry hoped for and this, in turn, has caused tension with policymakers.In the end, it is possible the best way to get bitcoin’s benefits into the hands of people might be to not talk about it at all.Evil eye image via ShutterstockAppleCirclecrimeexchangesminingmobileMt. GoxpaymentsregulationOriginal author: Daniel Cawrey
Michael Jackson, former COO of Skype and current venture capital investor at Mangrove Capital Partners, explores how bitcoin companies can learn from the early struggles Skype had with regulators across the globe.
For all the differences between Skype and bitcoin, there are many similarities.Both products use fundamental changes in technology to enable new opportunities, and they both remove the existing organizational hierarchy of their respective industry. As such, parallels can be made and valuable lessons can be learned from the early days of Skype.The bitcoin industry seems to be adamant that bitcoin is a currency and bitcoin companies are financial institutions. This was very much in evidence at Bitcoin2014, where all major actors were describing their progress to ‘regulatory compliance’. But is this necessary?From the inception of Skype, we could have said that the firm is a telco (telecommunications company). We could have decided to apply for telecoms licences all around the world and customize the product to both match and support the vagaries of different rules and directives.It would have been the logical thing to do and it is similar to the route many bitcoin actors are taking today. However, if Skype had done so, it would have been the worst strategic mistake it ever made.At that time, the world had changed from large, government-owned telcos to a new paradigm. Had we tried to establish Skype as a telco, rules and perversity would have appeared, driven by a dangerous combination of lack of knowledge, good intentions and political pressure.We would have entered the same world that many bitcoin operators appear to have chosen, a world in which our ideals would have been suppressed by forces outside our control.Let’s try and learn from previous successes. Let’s see if we can navigate the complexities of the legal and regulatory situation, using some of the experiences and techniques that were adopted by Skype – techniques that could help reduce any regulatory influence or restrictions on bitcoin.Regulation is not a givenAs a congressman in the US told me one day, something that looks like a duck and quacks like a duck must be treated like a duck. If Skype looked like a phone company and sounded like a phone company, then it must be a phone company. But Skype was never a phone company, and never will be.There are many technical arguments as to why this was so, but the most relevant here is that Skype was simply a piece of software. It was a piece of software that was developed by a company and released directly to the users.The users created the network and the existence of Skype as a network was independent of Skype as a company. Skype simply provided a part of the network.To argue otherwise would be to argue that anyone who makes cables, or handsets, or even the bricks and mortar and relays and batteries for telephone exchanges is also a phone company. This would be truly absurd. If Skype, the company, closed down, the software would still be in the wild and the whole world would still be able to talk for free.Sound familiar?We, the bitcoin community, need to make these arguments better. The default position of the products and services derived from bitcoin must be that they are not to be regulated. They need not be, and the existing rules need not apply. They may apply in intent, but often the wording is poor, unsuitable and can be argued to be irrelevant.To put it bluntly – every bitcoin actor should be reading the law very carefully and finding the loopholes. You should all invest a great deal of time in this – it is hugely important. For example, are you really moving ‘currency’ or are you simply exchanging some sort of token?Life is going to be a lot easier if we take the latter position, as there are no rules that prevent the exchanging of keys. Likewise there are no rules that say keeping a string of data in a cold storage vault makes a business a bank.So far, many of the proponents of bitcoin have been taking entirely the wrong approach – making claims that attract a raft of unwanted rules and regulations.Untouched by regulation?
The anonymity of the Internet provides a nice place to exist. Yet, almost everything needs to touch the real world from time to time and Skype was no exception.We chose to connect to the existing phone network. Similarly, some parts of the bitcoin ecosystem need, at least for the time being, to interface with existing financial systems. However, the minute these interfaces exist, the same minute the product becomes touched by existing rules and the need for partners arises.In any world, these partners are worried too. The first companies that connected Skype to the phone network took risks. These partners need clear arguments around why they are safe and why the service they provide is in compliance with the rules.These arguments need to be clear and based on fact and legal opinions. Rhetoric has no place. Banking institutions, burnt by the financial crisis and subsequent AML (anti-money laundering) and KYC (know your customer) fines need solid facts, not lofty ambitions.Skype is not a replacement phone service, it doesn’t claim to be, and in fact it emphatically tells users that it is not. This positioning is important. It tells users not to expect certain things and, as a result, some people may choose not to use the product.At Skype, we would have loved to have had incoming numbers for everyone all over the world and to have provided an amazing 911 service based on text, video and status messaging, but the existing rules don’t permit that. So we provided none, and forewent the opportunities of a seamless interface into the existing world – all the time. Though for the greater good.How can it be made easier?Firstly, those in bitcoin companies should make sure that any regulated activities are headquartered and operating in one place – that way, there should only be one set of folk to deal with.Business owners can also use these rules to their advantage – the rules of international commerce, taxation and regulation. Well-intentioned bitcoin businesses exist to provide great services to the mass market and to unlock the huge potential of the transformations provided by cryptographic tokens.For all the negative press the NSA gets, it isn’t the enemy to bitcoin businesses. The enemy is the bureaucracy, which asks for volumes of data, licence requirements and bad old-fashioned paperwork. Bureaucrats, trying to understand a new technology and with plenty of time on their hands.The enemy is time and getting the product to market early. Businesses should also be open to engaging with regulators, simply to keep the debate on the right side. It should be no more than that and certainly shouldn’t be central to any company’s external communications.No exceptionsThese arguments need to be consistent across a company: if the firm believes its activities shouldn’t be regulated, it should be able to argue this point and stay true to it. Companies should not make any allowances, but realise there will always be people who want them to make an exception.In some countries, companies may only be asked to fill in the simplest of forms, but even the simplest of exceptions can be used by others. The biggest challenge of the industry is consistency. The clear message that must be sent from the entire community is that most activities are not regulated.Some businesses in the bitcoin space will find they require some crossover with existing regulated services and they may find these services operate rules they don’t want to obey. Tough luck. Try and change the rules instead – it isn’t that difficult.As an example, the ‘Pulver order’ moved VOIP regulation in the US from state level to federal. Jeff Pulver ran a small company – and he won. I changed mobile access rules in Europe myself, as a single individual and without the help of lawyers. It takes time and patience, and you might have to buy a suit, but it can be done.Reducing the impact of regulationThere’s a reason many of the most well-known companies are split into various operating units, and it isn’t tax – it’s regulation.Bitcoin firms should make sure they put the parts of the business that are going to be controlled into one company and everything else in another. It’s an awful lot easier to manage a regulated entity if it has virtually no employees and few activities.“Companies need to just carry on doing what they are doing, if they can make a case for themselves that they don’t need regulation, they shouldn't even go near it.”Let’s say you run an exchange, for example. It exchanges fiat for cryptocurrency and then sends the proof of ownership of these tokens to the other side of the world. Some regulation requires that any company doing monetary transactions needs to report all transactions.The answer is to split the company: perhaps one part does the fiat to crypto transaction and the other part sends them on. Then you only have to apply the regulations to a smaller part of the company, and can maintain the flexibility of the other half.If the egress point needs regulation in a specific country, set up a small entity to do that there. Efforts should be made to ensure that a regulator doesn’t need to consider what happens in a different country over which they have no jurisdiction.Don’t ask permissionCompanies need to just carry on doing what they are doing, if they can make a case for themselves that they don’t need regulation, they shouldn’t even go near it.People do what they love best: regulators like regulations and want to apply them. If they didn’t, they would have a different job. So, asking for advice is framing the discussion. Once again, companies should read the rules, argue why they are not covered by the rules and use that analysis as a defence, but they should only ask for permission if they are sure it is necessary.Furthermore, companies shouldn’t ask a lawyer. Expecting a lawyer to find a loophole in the law and to state it on paper simply won’t happen. People should read, understand and learn it themselves. They can test their argument on a lawyer, indeed on anyone, but should not expect anyone else to come up with it.These principles allowed us to operate Skype across the whole world, with minimal legal costs and no effect on the main parts of the business – yet fulfil the legal responsibilities that we all have when we are running a company and have employees that rely on the company to feed their children.Most importantly, these lessons enabled Skype to become one of the leading tools that people use to communicate and forged the way to achieving our original dream. A dream that has become reality.Today, the whole world can indeed talk for free. Bitcoin companies have the potential to make the same waves in the financial sphere.Telephony button and cellphone with Skype images via Shutterstock.comexchangesregulationSkype
For all the differences between Skype and bitcoin, there are many similarities.Both products use fundamental changes in technology to enable new opportunities, and they both remove the existing organizational hierarchy of their respective industry. As such, parallels can be made and valuable lessons can be learned from the early days of Skype.The bitcoin industry seems to be adamant that bitcoin is a currency and bitcoin companies are financial institutions. This was very much in evidence at Bitcoin2014, where all major actors were describing their progress to ‘regulatory compliance’. But is this necessary?From the inception of Skype, we could have said that the firm is a telco (telecommunications company). We could have decided to apply for telecoms licences all around the world and customize the product to both match and support the vagaries of different rules and directives.It would have been the logical thing to do and it is similar to the route many bitcoin actors are taking today. However, if Skype had done so, it would have been the worst strategic mistake it ever made.At that time, the world had changed from large, government-owned telcos to a new paradigm. Had we tried to establish Skype as a telco, rules and perversity would have appeared, driven by a dangerous combination of lack of knowledge, good intentions and political pressure.We would have entered the same world that many bitcoin operators appear to have chosen, a world in which our ideals would have been suppressed by forces outside our control.Let’s try and learn from previous successes. Let’s see if we can navigate the complexities of the legal and regulatory situation, using some of the experiences and techniques that were adopted by Skype – techniques that could help reduce any regulatory influence or restrictions on bitcoin.Regulation is not a givenAs a congressman in the US told me one day, something that looks like a duck and quacks like a duck must be treated like a duck. If Skype looked like a phone company and sounded like a phone company, then it must be a phone company. But Skype was never a phone company, and never will be.There are many technical arguments as to why this was so, but the most relevant here is that Skype was simply a piece of software. It was a piece of software that was developed by a company and released directly to the users.The users created the network and the existence of Skype as a network was independent of Skype as a company. Skype simply provided a part of the network.To argue otherwise would be to argue that anyone who makes cables, or handsets, or even the bricks and mortar and relays and batteries for telephone exchanges is also a phone company. This would be truly absurd. If Skype, the company, closed down, the software would still be in the wild and the whole world would still be able to talk for free.Sound familiar?We, the bitcoin community, need to make these arguments better. The default position of the products and services derived from bitcoin must be that they are not to be regulated. They need not be, and the existing rules need not apply. They may apply in intent, but often the wording is poor, unsuitable and can be argued to be irrelevant.To put it bluntly – every bitcoin actor should be reading the law very carefully and finding the loopholes. You should all invest a great deal of time in this – it is hugely important. For example, are you really moving ‘currency’ or are you simply exchanging some sort of token?Life is going to be a lot easier if we take the latter position, as there are no rules that prevent the exchanging of keys. Likewise there are no rules that say keeping a string of data in a cold storage vault makes a business a bank.So far, many of the proponents of bitcoin have been taking entirely the wrong approach – making claims that attract a raft of unwanted rules and regulations.Untouched by regulation?
The anonymity of the Internet provides a nice place to exist. Yet, almost everything needs to touch the real world from time to time and Skype was no exception.We chose to connect to the existing phone network. Similarly, some parts of the bitcoin ecosystem need, at least for the time being, to interface with existing financial systems. However, the minute these interfaces exist, the same minute the product becomes touched by existing rules and the need for partners arises.In any world, these partners are worried too. The first companies that connected Skype to the phone network took risks. These partners need clear arguments around why they are safe and why the service they provide is in compliance with the rules.These arguments need to be clear and based on fact and legal opinions. Rhetoric has no place. Banking institutions, burnt by the financial crisis and subsequent AML (anti-money laundering) and KYC (know your customer) fines need solid facts, not lofty ambitions.Skype is not a replacement phone service, it doesn’t claim to be, and in fact it emphatically tells users that it is not. This positioning is important. It tells users not to expect certain things and, as a result, some people may choose not to use the product.At Skype, we would have loved to have had incoming numbers for everyone all over the world and to have provided an amazing 911 service based on text, video and status messaging, but the existing rules don’t permit that. So we provided none, and forewent the opportunities of a seamless interface into the existing world – all the time. Though for the greater good.How can it be made easier?Firstly, those in bitcoin companies should make sure that any regulated activities are headquartered and operating in one place – that way, there should only be one set of folk to deal with.Business owners can also use these rules to their advantage – the rules of international commerce, taxation and regulation. Well-intentioned bitcoin businesses exist to provide great services to the mass market and to unlock the huge potential of the transformations provided by cryptographic tokens.For all the negative press the NSA gets, it isn’t the enemy to bitcoin businesses. The enemy is the bureaucracy, which asks for volumes of data, licence requirements and bad old-fashioned paperwork. Bureaucrats, trying to understand a new technology and with plenty of time on their hands.The enemy is time and getting the product to market early. Businesses should also be open to engaging with regulators, simply to keep the debate on the right side. It should be no more than that and certainly shouldn’t be central to any company’s external communications.No exceptionsThese arguments need to be consistent across a company: if the firm believes its activities shouldn’t be regulated, it should be able to argue this point and stay true to it. Companies should not make any allowances, but realise there will always be people who want them to make an exception.In some countries, companies may only be asked to fill in the simplest of forms, but even the simplest of exceptions can be used by others. The biggest challenge of the industry is consistency. The clear message that must be sent from the entire community is that most activities are not regulated.Some businesses in the bitcoin space will find they require some crossover with existing regulated services and they may find these services operate rules they don’t want to obey. Tough luck. Try and change the rules instead – it isn’t that difficult.As an example, the ‘Pulver order’ moved VOIP regulation in the US from state level to federal. Jeff Pulver ran a small company – and he won. I changed mobile access rules in Europe myself, as a single individual and without the help of lawyers. It takes time and patience, and you might have to buy a suit, but it can be done.Reducing the impact of regulationThere’s a reason many of the most well-known companies are split into various operating units, and it isn’t tax – it’s regulation.Bitcoin firms should make sure they put the parts of the business that are going to be controlled into one company and everything else in another. It’s an awful lot easier to manage a regulated entity if it has virtually no employees and few activities.“Companies need to just carry on doing what they are doing, if they can make a case for themselves that they don’t need regulation, they shouldn't even go near it.”Let’s say you run an exchange, for example. It exchanges fiat for cryptocurrency and then sends the proof of ownership of these tokens to the other side of the world. Some regulation requires that any company doing monetary transactions needs to report all transactions.The answer is to split the company: perhaps one part does the fiat to crypto transaction and the other part sends them on. Then you only have to apply the regulations to a smaller part of the company, and can maintain the flexibility of the other half.If the egress point needs regulation in a specific country, set up a small entity to do that there. Efforts should be made to ensure that a regulator doesn’t need to consider what happens in a different country over which they have no jurisdiction.Don’t ask permissionCompanies need to just carry on doing what they are doing, if they can make a case for themselves that they don’t need regulation, they shouldn’t even go near it.People do what they love best: regulators like regulations and want to apply them. If they didn’t, they would have a different job. So, asking for advice is framing the discussion. Once again, companies should read the rules, argue why they are not covered by the rules and use that analysis as a defence, but they should only ask for permission if they are sure it is necessary.Furthermore, companies shouldn’t ask a lawyer. Expecting a lawyer to find a loophole in the law and to state it on paper simply won’t happen. People should read, understand and learn it themselves. They can test their argument on a lawyer, indeed on anyone, but should not expect anyone else to come up with it.These principles allowed us to operate Skype across the whole world, with minimal legal costs and no effect on the main parts of the business – yet fulfil the legal responsibilities that we all have when we are running a company and have employees that rely on the company to feed their children.Most importantly, these lessons enabled Skype to become one of the leading tools that people use to communicate and forged the way to achieving our original dream. A dream that has become reality.Today, the whole world can indeed talk for free. Bitcoin companies have the potential to make the same waves in the financial sphere.Telephony button and cellphone with Skype images via Shutterstock.comexchangesregulationSkypeOriginal author: Michael Jackson