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Brian Klein is partner at the litigation boutique Baker Marquart LLP and chair of the Bitcoin Foundation’s legal advocacy committee. Klein has co-authored this piece with Jay Weill, a partner at Sideman & Bancroft in San Francisco representing people and entities in both civil and criminal matters involving the IRS. Weill was the former Chief of the Tax Division at the US Attorney’s Office in San Francisco. __________________________________________________________Death and taxes are the two certainties of life, so the old saying goes. On 25th March, three weeks before the US 15th April tax filing deadline, the US Internal Revenue Service (IRS) finally issued guidance regarding the taxation of bitcoins and other digital currencies in what the IRS, in typical IRS-speak, calls Notice 2014-21.One could almost have believed that the IRS had forgotten about bitcoins and other digital currencies. But really, everyone should have seen this day was coming. Indeed, it was long overdue.The IRS could have treated digital currency as either currency or property. It chose to treat it as property, imposing the general tax principles relevant to property transactions on those of digital currency. This means that digital currencies will be taxed as ordinary income or as assets subject to capital gains taxes, depending on the circumstances. The choice has far-reaching tax implications that will affect anyone who uses digital currency.In the notice, the IRS co-opted FinCEN’s definition of digital currency:“Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.”It goes on:“The sale or exchange of convertible digital currency, or the use of convertible digital currency to pay for goods or services in a real-world economy transaction, has tax consequences that may result in a tax liability.”This is very understated. The tax consequences are far-reaching and depend on how one uses digital currencies. The following provides a thumbnail sketch of certain tax consequences for US taxpayers.Employers and employeesEmployee wages in digital currency are subject to federal and state income tax withholding, and by law should be reflected on both employers’ and employees’ tax returns. Such payments are required to be reported to the IRS on your business and payroll tax returns and must further be reflected on IRS Forms W-2 issued to each employee and filed with the IRS. In turn, the employee must report to the IRS and state tax authorities the wages he or she receives in digital currency on his or her personal tax returns.For each, the reported amounts – the wages reported paid or received and the payroll taxes withheld – will be calculated using the fair market value of the digital currency in US dollars on the date paid or received.Independent contractorsBusinesses paying independent contractors with digital currency must report amounts on Form 1099 – the document used to report other forms of income than wages or salaries – and supply the forms to tax authorities and their independent contractors.Like employees, independent contractors are taxed in the same manner as if the amounts were received in US dollars. They must report amounts received as income on their tax returns and pay self-employment tax.InvestorsThe IRS’ treatment of digital currency as property is a boon to taxpayers holding it as a long-term investment – that is, holding it for more than a year. This is so because when investing in or undergoing transactions in foreign currency, the gains are taxed at the ordinary income tax rate; whereas with digital currency treated as property, the taxpayer can benefit from the lower capital gains tax rate.Moreover, like any other commodity, if the digital currency loses value instead of making gains then the taxpayer can claim a capital loss, which would help lessen the tax bill. The character of gain or loss generally depends on whether the digital currency is a capital asset in the hands of the taxpayer.According to the IRS, if the taxpayer holds digital currency as capital – such as stocks or bonds or other investment property – gains or losses are realized as capital gains or losses. But where such currency is held as inventory or other property mainly for sale in a trade or business, then ordinary gains or losses are generally incurred.MinersTaxpayers who obtain digital currency through mining must include the fair market value of the digital currency, as of the date of receipt, when reporting their gross income on tax returns.This creates an enormous task for frequent miners who have to go back and see what the values of the bitcoins were on the dates they were mined. If the mining activities make up a trade or business, and the miner is not an employee, then the net earnings resulting from the activities constitute self-employment income that’s subject to self-employment tax.Exchanges When an exchange sells digital currency to a customer as a part of a trade or business, its gross income will equal the value for which the digital currency was sold.Catch-all for payorsAny disposition of digital currency is a taxable event, including the use of digital currency to acquire another asset, to pay for services, in retail transactions and investments where the merchandise received or investment has a higher value than the payor’s basis in the digital currency.And, payments made using digital currency are subject to the same tax reporting and backup withholding as other payments made in property.The character nature of the taxThe IRS notice left many unanswered questions as well.For example, any person or business that receives more than $10,000 in one transaction or a series of transactions must identify the person involved to the IRS via Form 8300. Since digital currencies, like bitcoin, are not recognized as currencies by the IRS, does a car dealer have to report an automobile purchased with bitcoins?US individual and business taxpayers alike should consult with their tax advisors about the implications of their particular digital currency transactions. They will now have to track their digital currency purchases in order to correctly prepare and file their 2013 tax returns due on 15th April, as well as potentially amend 2012 and earlier tax returns.The IRS notice also invites comment from the public. Undoubtedly, the IRS will receive an extensive amount of feedback. In light of the path the IRS chose, one that requires extensive tax compliance efforts, the IRS should expect much of it to be extremely negative – and rightfully so.__________________________________________________________IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with Treasury Department and IRS regulations, we inform you that any federal tax advice contained in this communication is not intended or written by the parties to be used, and cannot be used for the purposes of (i) avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.IRSlawregulationtaxUSA
Original author: Brian Klein

Welcome to the CoinDesk Weekly Review 6th April 2014 – a regular look at the hottest, most thought-provoking and most controversial events in the world of digital currency through the eyes of scepticism and wonder.Your host … John Law.TaxaramaspyNo matter what Ed Snowden says, Americans don’t really fear the NSA. They don’t generally worry much about the FBI or the CIA. But every American ever born, including everyone in those three-letter agencies, fears the IRS. It nabbed Al Capone, after all, and has a reputation to match.So when it speaks, everyone listens. And it has spoken on bitcoin: it is property, not currency, and falls under capital gains tax law. John Law doesn’t propose to go into the implications of this – already very well covered by CoinDesk’s analytic masterminds – except to note that under US law, you can offset up to $3,000 capital gain losses against general taxation, which may be sadly useful just at the moment.However, the IRS ruling does bring up two intriguing points:First, that to be truly compliant under capital gains law, the degree of book-keeping for all transactions can be truly horrendous for the individual. Imagine having to keep a running tally of market rates every time you buy a burrito or tip a blogger, or receive some bitcoin from a pal.Second, because the IRS’s writ doesn’t run outside the US, bitcoin can be taxed as something quite different elsewhere: Bulgaria, for example, says it’s a financial holding, not property. Dealing with international taxation issues is quite bad enough without having the very nature of the thing you’re dealing with change across borders.One answer for the first problem is that bitcoin is the first widespread native digital currency – and it is a de-facto currency, no matter what label the taxman slaps on it for convenience. It only exists in computers, and computers make very good book-keepers. The IRS could issue guidelines, even open-source code, for wallets and other bitcoin transfer software, that automate information gathering and delivery to IRS standards. It’ll be up to people whether to use IRS-compliant software, but the impetus to do so would be very high.It would even be possible, John Law suspects eventually inevitable, for cryptocurrencies to have their own taxation regime. It is a unique invention. The tax system is set up around property and money, two things that have been around for thousands of years, so the problem of introducing an entirely new fundamental concept hasn’t arisen before. It’s a stunning opportunity, a green-field site in a system absolutely crammed with ancient and complex machinery that’s a nightmare to understand and administer.The second issue is a similar opportunity to change the ground rules. The lack of international taxation standards is a serious problem for the global economy; it’s what lets multinational organisations avoid paying a large proportion of taxes in any regime, and supports an entire industry of well-fed specialists dedicated to legally hiding money.Because bitcoin and its ilk are a unique invention that can be considered as such, the chance now exists for a standardised international taxation regime that doesn’t care – for collection purposes – where a transaction takes place. One set of world-wide rules would change everything.Such thoughts are close to heresy, especially for the libertarian persuasion and anyone else who intrinsically fears world government and the intimate insertion of state apparatus into individual lives. They raise enormous issues of privacy, accountability, international politics and state power. But these are problems already, and at some point we the people will have to sort out how to fix the current messes extant in all these areas.So, John Law proposes, now would be a very good time to start having these thoughts, and having them large. Let’s play what-if. Accountancy meets science-fiction:“Luke, I am your tax inspector …”Well, if Darth Vader was to come to life anywhere, it would be in the IRS.Paper chasenewspaperThe Chicago Sun-Times now accepts subscriptions in bitcoin. It’s not that big a story as it stands – just an alternative way to pay for an old-fashioned paywalled block of access. As many have noted, the real game-changer would be with bitcoin-based micropayments, letting content providers sell pages of info for the equivalent of pennies or fractions of a penny. That could be finessed further: serve a page instantly for microcash, or let the punter see it for free after a second.For cash-strapped journals, such ideas sound a lot nicer than the current choice of giving it away and trusting to advertising, or hiding your best stuff from the punters until they pay. And advertisers might like it, paying readers to interact with their content.Social media services like Twitter and Facebook could create whole internal reward systems between readers and writers – voluntary, but if you join by putting a dollar’s worth of bitcoin in your account, you’ll get whatever rewards your readership generates. But could the bitcoin system stand up to the tsunami of tiny transactions such a system could generate?Well, yes. A protocol extension scratches that particular itch by creating a trusted channel between buyer and seller that’s purely local and doesn’t convert to a full transaction until the channel is closed or a time limit is reached. An initial agreement is set up between the two sides and then incrementally changed as whatever is being microbought is sent over. When the session’s finished, the final amount is calculated and committed. In effect, it caches the cash.You can read a more technical (OK, OK, accurate) description, and the author notes the new system has been included in bitcoinj, the standard Java implementation. It uses standard bitcoin protocols and cryptography, and copes with vanishing servers and other annoyances.Of course, a lot more work needs to be done to test this out in practice, create ways to let buyer and seller easily set up the transaction, and in adding the relevant magic to content management systems. Shouldn’t take long.Based on the hit rates to John Law’s publishing empire across blogs, social media and comments, he calculates he’ll be able to retire from paid work sometime in 2056. If he types a lot faster.And finally …gamesThis week’s free gift is the Advanced Bitcoin Simulator. It lives up to its name, accurately charting your progression in the bitcoin world from naive newbie to – well, you’ll have to play it to find out.You’ll need a sense of humour, some experience of pointless computer games, an experimental streak, a degree of patience and the willingness to cheerfully survive catastrophe with remarkable resilience.It may well be the most lifelike simulator John Law has ever experienced.Have fun.John Law is an 18th Century Scottish entrepreneur, financial engineer and gambler. Having reformed the French economy, invented paper currency, state banks, the Mississippi Bubble and other ideas essential to modern economics, he took 300 years off in a small cottage outside Bude. He has returned to write for CoinDesk on the foibles of digital currency.Spy, Dog, and Gamer images via ShutterstockChicago Sun-TimesIRSweekly review
Original author: John Law

france, bitcoin
InnoCherche, a France-based think tank dedicated to fostering innovation in the European nation, held an event composed of seven of its peer organisations on 3rd April as part of a discussion that touched on some of the biggest digital trends, including data visualization, electronic healthcare and digital currencies.Onhand to inform the influential community members about the benefits of bitcoin and its available alternatives was local bitcoin trader and financial writer for the forthcoming newsletter BitcoinWeekly, Stanislas Marion.Though his talk was limited to under a half hour, Marion reported that he was able to inform his local community about the benefits of bitcoin, including its use cases in digital contracts, the remittance market and for the underbanked.Overall, Marion indicated that the panel members were not very educated about bitcoin, and as a result, he had to defend against the spectre of the now-defunct Japan-based bitcoin exchange Mt. Gox and the implications that digital currency exchanges were and are unsafe for the general consumer.The result, however, was that Marion says he was able to engender new interest in this influential part of the French community, even if it only represents a small step for the ecosystem as a whole.Said Marion:“A few of them asked me to point them to some resources so that they could read up. None of them asked how to get involved though, they’re still in a discovery phase.”Marion told CoinDesk that this is indicative of a change in tone occurring in France, where despite media articles that portray bitcoin as a pyramid scheme, the general public is beginning to slowly become more open-minded and interested in digital currency.Structuring the talkBefore speaking at the InnoCherche event, Marion indicated that he spent considerable time determining how to best explain bitcoin and its potential to the assembled think tanks, even drawing feedback from the reddit community.Marion notes that he started with the basics, touching on bitcoin’s distributed nature and the complexities of the general payments system before moving on to what he considered to be the three areas where innovation is most needed – security, usability and accessibility.Explained Marion:“Basically, here I wanted to shed the [fear, uncertainty and doubt] (FUD) about anonymous transactions that only suit drug dealers and terrorists and explain how bitcoin is no more anonymous than the Internet but actually offers something that is completely new [that provides] transparency as a competitive advantage for politicians, charities, companies, etc.”Starting a discourseMarion indicated that the think tank members provided some interesting feedback during the event’s Q&A session.For instance, they asked Marion questions about how consumers could use bitcoin to become their own bank, how bitcoin mining worked and whether a company like Google would be able to quickly enter and dominate the market.Unsurprisingly, it’s here where questions about Mt. Gox first surfaced.Said Marion:“I had to explain that exchanges and most wallet services are not built in a way that gives people access to their bitcoins and that securing private keys is hard.”Bitcoin in FranceResearch from the US Law Library of Congress has indicated that France has been among the more active countries when it comes to debating bitcoin and its regulatory needs.So far this year, the country’s Senate Finance Committee has held hearings on bitcoin, while the French Prudential Supervisory Authority has issued statements clarifying the status of bitcoin and bitcoin exchanges.Still, Marion indicates that France has a long way to go before its ecosystem catches up with those abroad, stating:“The main thing that’s slowing down France right now apart from its traditional risk aversion is the absence of clear regulatory guidelines like those that have been issued in the US, UK, etc.”He added: “Clear guidelines would go a long way to bolster a new wave of merchants, consumers and businesses to work with bitcoin.”Of course, this will necessitate that community members like Marion continue to generate awareness for this need.Image credit: View of Eiffel Tower via ShutterestockEuropeFranceinvestors
Original author: Pete Rizzo

Regulatory attitudes towards cryptocurrencies around the world are shifting. Hardly a day goes by without a central bank issuing a warning on the digital currency. However, it’s not all bad news – as some authorities are taking a much more positive approach. In CoinDesk’s regulation roundup, Certified Public Accountant and ACFE Certified Fraud Examiner Jason Tyra examines the most significant digital currency news from the world’s regulators and law courts over the past two weeks.USA: Bitcoin is property, says IRStaxThe US Internal Revenue Service issued a notice in late March that classified bitcoin as property for purposes of taxation, clarified that mined bitcoins are taxable at the time they are received, and specified that bitcoins received in connection with a trade or business or as wages are subject to withholding and/or payment of Medicare or social security taxes.The reaction among US bitcoiners was mixed. Treatment as a capital asset grants access to preferential capital gains rates for bitcoins held longer than a year and a day, but imposes the burden of tracking basis and gain for every bitcoin received or spent.This is good news for US taxpayers using bitcoin as a store of wealth, but terrible news for those who might use it as a means of exchange.The subtleties and implications of the IRS notification are likely to fuel debate among US bitcoin enthusiasts for months to come: for example, the IRS did not specify whether taxpayers exchanging bitcoins for other crypto-currencies would be entitled to defer taxable gain under like-kind exchange rules.Rejection of non-functional (otherwise known as ‘foreign’) currency treatment by the IRS has also created uncertainty as to the implications, if any, for FinCEN’s designation of bitcoin as a monetary instrument.TexasUSA: Texas following NY example?The Texas Department of Banking released a letter this week addressed to “virtual currency companies operating or desiring to operate in Texas” that declared that, “because cryptocurrency is not money under the Money Services Act, receiving it in exchange for a promise to make it available at a later time or different location is not money transmission” in the state.However, since the Texas Department of Banking is a state-level agency, its declaration has no impact on FinCEN’s federal registration requirements.Texas has aggressively cultivated a business-friendly climate in recent years, poaching a number of high-profile companies from higher tax and higher regulation states. Austin, Texas is especially well known as a progressive hub for technology companies, including many bitcoin startups.USA: If bitcoin isn’t money, can it be laundered?On 1st April, the attorney for Ross Ulbricht, alleged mastermind of the now defunct contraband trading site known as Silk Road, submitted a motion to dismiss some of the charges against his client on the grounds that “bitcoins are not money”, thus obviating the possibility that money-laundering statutes could apply.Denmark: Yippee, no taxestax take 2After months of delays, Denmark declared last week that bitcoin trades by individuals are exempt from taxation in that country.The Danish taxing authority based its decision on the novel idea that bitcoins cannot be considered ‘real’ money, essentially rendering bitcoin activity (gains and losses alike) a non-event from a tax perspective. However, bitcoin-related businesses will be subject to normal income tax rules on gains booked in the normal course of business.At the time of the announcement, Denmark was thought to be the only country in the world that has definitively taken a pass on taxing bitcoin. Early reactions by European bitcoiners were positive, though the wider implications of the announcement have yet to be seen. If bitcoins are not ‘real’, do they still enjoy protection as private property?palaceBulgaria: Tax loophole?Taking the opposite position from Denmark, the Eastern European nation of Bulgaria announced this week that bitcoin trading would be subject to ordinary income and corporate income tax rates, but did not issue regulations requiring gains to be documented or reported, raising the issue of potential money laundering through digital currencies.In response, one commentator, Bulgarian enthusiast Stamen Gorchev, suggested that the country might join other EU members in looking to European regulators to draft more comprehensive regulation.Bulgaria’s announcement means that bitcoiners now have the full spectrum of potential tax treatments available to them in western countries, creating potentially lucrative transfer pricing opportunities for companies with the resources to exploit them.chinaChina: Rumours of bank crackdownBitcoin isn’t really banned in China, or is it? Rumors of an imminent crackdown in China continue to dog bitcoin, as well as altcoins.Just as much of the appreciation in price during the latter half of 2013 was attributed to wider adoption and investment by the Chinese, possible regulatory action by the Chinese government or central bank have also been blamed for bitcoin’s recent decline.Though the precise reason for the allegedly imminent crackdown is not known, bitcoin’s fungibility is likely to threaten capital controls to some extent in the nominally Communist state.Additionally, its network is thought to be highly resistant to the kind of government control and censorship that have long plagued Chinese internet users.treeColombia: Bitcoin ban?Colombia’s Ministry of Finance, in cooperation with the country’s central bank and Superintendancy of Finance, may ban bitcoin transactions, according to a report by Colombian publication El Tiempo.Colombia recently joined the growing list of nations that have warned their citizens away from bitcoin, advising citizens that they are not backed by the Colombian central bank.The government’s objection is unlikely to relate to bitcoin’s novelty, as the South American country is not known for the kind of financial innovation that is likely to be a destabilizing influence on its economy. Rather, the issue is likely to be bitcoin’s potential criminal uses.Colombian security forces continue to struggle with the twin issues of narco-trafficking and Communist rebels, both of whom may see value in bitcoin as a means of payment for illicit transactions.However, barring Colombian banks from handling bitcoin-related business is unlikely to have a significant impact on organizations that are essentially international in their conduct of business (narcotics for export and weapons for import).manIsle of Man: No licence requiredOn 26th March, the Isle of Man has announced that its licensure requirements do not apply to bitcoin exchanges operating there.The Financial Supervision Commission, the Isle of Man’s financial regulator, confirmed in a written statement that bitcoin exchanges are neither investment businesses nor money transmission services as defined by current law.The island is a self-governing dependency of the United Kingdom, and its citizens are nominally British citizens. Furthermore, it is known as an offshore haven due to its unusually low tax rates, which include a cap on tax payable by individuals and a corporate tax rate of 0%.Liberal banking and tax rules have made offshore banking a large part of the island’s economy.House image via ShutterstockBulgariaChinacolombiaDenmarkIsle of ManregulationRoundupTexasUS
Original author: Jason Tyra

neobitcoin
Cyprus-based bitcoin savings and payment network Neo & Bee resumed trading on Havelock Investments today amid turmoil surrounding the company and its CEO.At 5PM EST on 4 April, buy and sell orders for Neo & Bee on the private bitcoin-only investment exchange platform resumed after six days of suspended trading.Neo & Bee saw high volume at the outset of resumed trade activity, with a plunge in prices from 0.002 BTC ($0.89) down to 0.0001 BTC ($0.05). Source: Havelock InvestmentsSource: Havelock InvestmentsQuestionable activityOn March 28, Havelock halted trading of the NEOBEE fund on its site due to what was then referred to as “questionable trading activity”.Havelock Investments made an announcement earlier today that the ticker name for Neo & Bee would be changed from NEOBEE to NEOBEEQ.In the announcement, Havelock noted it has not received an update from Neo & Bee as of yet:“Financial information on the status of the company [Neo & Bee] has not been released. The units of this Fund will continue to trade even if the company will file for bankruptcy.”About Neo & BeeFounded by Danny Brewster, Neo & Bee is a savings and payment processing infrastructure for bitcoin, and started doing business in Cyprus with plans to expand to the larger European market.Neo is the company’s banking arm, with physical branches. Bee is the payments portion of the business, thus the Neo & Bee name as two separate functions working together as one organization. Danny Brewster. Source: TwitterDanny Brewster. Source: TwitterHowever, the company has been experiencing turmoil as of late. On 31 March, the company’s shares were suspended from trading on Havelock due to some strange trades. Brewster, the CEO, made a statement on 2 April in order to reassure the company’s investors.The Cyprus Mail reported on 4 April that Brewster was facing fraud charges stemming from two customers that claim they never received bitcoin that they had paid for from Neo & Bee. Brewster has made it known to the bitcoin community that he is currently not in Cyprus.About HavelockHavelock Investments bills itself as a bitcoin-based source for “private companies looking for venture capital”, according to its website. Source: Havelock InvestmentsSource: Havelock InvestmentsSince the NEOBEEQ trading symbol went live for Neo & Bee trading, the Havelock site has been experiencing intermittent outages with CloudFlare proxy placeholders often taking the place of active webpages.The two largest companies currently on Havelock by market cap are Crypto Financial, which provides fiduciary services within the cryptocurrency industry, and an ASICMiner shares fund.Havelock Investments makes money via fees on its all-bitcoin platform. There is a a 0.4% trading fee and it also charges users 0.0010BTC, with 0.0005 BTC being paid as a network transaction fee, for withdrawals.This story is still developing. CoinDesk will monitor and provide updates as new details become known.Neo bank image via Cyprus MailCyprusDanny BrewsterHavelock InvestmentsNeo & BeeNEOBEEQ
Original author: Daniel Cawrey

Avalonic Bit-Store iOS
Note: The activities described in this article involve running software on iOS devices that is experimental and that has not been approved by Apple. Please use caution and install software only from third-party developers you are sure you trust, especially if your device already has bitcoin wallet, banking, or other sensitive apps installed.__________________________________________________________A mobile app development team says it has found a novel workaround to Apple’s bitcoin wallet ban and strict App Store regulations: Its own native app store that allows users to download and install any app they like on an iOS device.Developer Andrew DeSantis first announced the new store, a product of the Birmingham, Alabama, company Avalonic he co-founded with business partner Tyler Evans, on Twitter and reddit today.If it works as he claims and his legal advice is correct, it could represent a breakthrough for both iOS and bitcoin users.Still in betaAt the moment, the independent app store, still an invite-only beta, has a focus on bitcoin solutions and is even called the ‘Bit Store’. It does not require the device to be jailbroken, and the apps available are not web-based, instead using a combination of HTML5 to render app interfaces and back-ends written in C.The plan is for the store to include all kinds of apps in time, with bitcoin serving as the payment system. The apps themselves will be cross-platform and will function on any mobile platform once a version of the store is released for it.The Bit Store beta currently has just a few simple apps available, including a bitcoin wallet and a news aggregator/company directory. The ‘Wallet’ app uses the Coinbase API to send and receive bitcoins to any address, with values denominated in BTC or USD.Cross platformDeSantis told CoinDesk he came up with the idea for the Bit Store about six months ago, while he was trying to develop an app to run on iOS, Android and Windows Phone. Doing so required expertise in those platforms’ three different programming languages: Objective C, Java, and C#.“About six months in I found it took a lot of effort to do, and it was unnecessary,” he said in Avalonic’s introductory video.Reaction to his announcement on reddit was overwhelmingly positive with wishes of good luck and requests for other cryptocurrency apps like litecoin and dogecoin.Some, however, expressed skepticism that Apple would allow such rampant freedom of choice to continue for very long.Walled gardenApple is protective of its closed infrastructure, and could use both engineering and legal means to prevent circumvention, especially if it becomes popular. There’s also the 30% commission Apple receives from all sales on its own App Store, now a substantial revenue stream.DeSantis wrote that he had actually worked for Apple in the past, learning enough to reverse engineer the system to install unofficial apps using protocols intended for enterprise, but staying within Apple’s legal guidelines.Originally intending only to develop an independent and cross-platform app platform, he switched his focus to bitcoin after Apple banned wallet apps from its own store.Said DeSantis:“I used to work for Apple, was even flown out to the mothership in Cupertino. As a part of training, we learned about all of the iOS protocols. After I quit I had the idea for a multi-platform store and by knowing everything that was legally possible on the iPhone I was able to figure out how to install apps without having to install apps.It took nine months of work and wasn’t originally intended for bitcoin, but after they removed Blockchain from the App Store it seemed like a perfect fit!”He added that he hadn’t signed any agreement prohibiting the work he’d done, that it was a new technique no-one had tried before and that his company had been in contact with lawyers for months to discuss possible scenarios.Possible moves against Bit StoreFrom plugins that circumvented iTunes copy protection to iOS jailbreak techniques, Apple has previously played cat-and-mouse games with ‘creative’ developers that often ends with the developer moving on to something less frustrating.It must be said, though, in the case of iTunes DRM it ended with Apple changing its policy by abolishing copy protection in most cases.DeSantis doesn’t seem particularly concerned about Apple’s technical moves to block the Bit Store either, saying it would be difficult to modify iOS as it exists now to do so. He has back-up plans even if Apples tries:“Apple can’t prevent our store’s existence because, on iOS, Safari allows applications to be installed to the the home screen. In the event that the implementation we currently have in place is compromised by an update we will modify our code to circumvent the update.If our seamless implementation is still disabled by such a future update, which while possible isn’t likely to happen in the near future due to the damages this would cause to existing software that has existed since iOS 4, we would revert to an app store that you install with the ‘install to home screen method.If we can install our store to the home screen, then we can install apps exactly, if not very similar, to how we are installing them now (without having to click ‘install to home screen’). Finally adding one extra step to the app install process will not remove the cloud platform we have created, our bitcoin wallet, the hardware access or the notification features.”He went on to explain why he regards the Bit Store as legal under Apple’s own rules as they pertain to web applications, which users have always been free to add to their iOS Home Screens.“Apple’s own documentation states that, ‘A web application is designed to look and behave in a way similar to a native application.’ Although we are taking our implementation a few steps further than the average ‘web application’, in the end we could revert back to such a state and maintain our platform.Side loading apps on Android are nowhere near as elegant as our iOS install process. This has not stopped third-party app stores from existing on Android and we believe the same will hold true for iOS in the absolute worst case.”Interested users can sign up for an invitation to the Bit Store beta on Avalonic’s home page.

App StoreAppleioswallets

Original author: Jon Southurst


warzoneWhat’s the difference between an HD DVD and a Blu-ray Disc? In a nutshell, one is a loser and the other is a winner.In the late 2000s, the two battled it out on store shelves in what is known as a format war. Which won? Here’s a hint: you won’t be watching Gravity on HD DVD anytime soon.Any cryptocurrency enthusiast looking back at the HD DVD vs Blu-ray format war is bound to wonder: “Must a single coin similarly emerge a ‘winner’ – whatever that means in the context of cryptocurrency?”.The argument in favor of warIf you were to view the cryptocurrency format from this perspective, bitcoin would be the clear front-runner. A few other coins – dogecoin, peercoin and litecoin – would be trailing close behind. Additionally, depending on who you ask, there might be other legitimate contenders to add into the fray.Unfortunately, the wide variety of coins may actually be hindering cryptocurrency rather than helping its cause. When HD DVD and Blu-ray were duking it out to be the industry standard, sales of both were ultimately hurt. Consumers were afraid to buy a player or discs of either one, wary they would commit to the format that eventually lost the fight.“The market for cryptocurrency involves everyone that uses money: it’s everyone.”If this thinking holds true for cryptocurrencies, then the availability of so many coins may deter people (especially non-techies) from buying into any single coin.As a result, many will simply adopt a wait-and-see approach, especially as one cryptocurrency is bound to emerge on top.The alternatives are just too risky for them: if they buy into a single coin, there is a chance that they are betting on the wrong one. If they buy into multiple coins, their chances of picking the right coin increases, but so does the likelihood that they are committing time, effort, and money to others that will be worthless in the future.Thus, the case can be made that altcoins are actually hurting the future of cryptocurrency rather than raising some sort of crucial cultural awareness.In keeping with this, it could be argued that the current diversity of coins is a stage in our evolution we must overcome. For cryptocurrency to see wider adoption, we must make it as easy as possible for people to adopt it: this means one coin.Cryptocurrency is not at warI would not be one of those people.I don’t see cryptocurrency as a true format war. In a true format war, the competing technologies must be in mutually exclusive competition. In the case of HD DVD and Blu-ray, a person had to choose between the two. If you bought a HD DVD player, you couldn’t play films on Blu-ray, and vice versa. Thus, the consumers who bought HD DVD players and movies ‘lost’, while the consumers who bought Blu-ray players and movies ‘won’.The case with cryptocurrency is not so cut-and-dry. Even if one coin emerges as dominant – and bitcoin doesn’t look like it will lose its lead anytime soon – there will never be a true ‘winner’. Unlike hardware, there is no real incentive for the stakeholders in cryptocurrency to switch over wholesale to a single coin. Thus, many people can – and do – trade in multiple coins.What’s more, and this may sound like a bold pronouncement – unless you’re a true believer – the cryptocurrency market is even larger than the one that HD DVD and Blu-ray locked horns over. That market was people that wanted to watch films in high-definition at home.The market for cryptocurrency involves everyone that uses money. It’s everyone. So in addition to not being in mutually exclusive competition with one another, the various coins are operating in an exponentially larger market. And within that market, the coins tend to cater to different segments, given that each coin has its own strengths and weaknesses, peculiarities and protocols.Why this comparison mattersSo why is it important to invoke the HD DVD vs Blu-ray format war if cryptocurrency is not locked into a similar battle? Too many people treat cryptocurrencies as though the various coins are pitted against one another in a winner-take-all scheme. Thus, they throw their support and enthusiasm behind a single coin, proclaiming it ‘superior’.dogecoinThe truth is: it’s the superior coin for them. Each has its place in the cryptocurrency landscape, so treating any one of them as above the rest is as silly as a stockbroker only advocating for the purchase of one particular stock.Just as stockbrokers take it upon themselves to encourage the importance of investment in general, we must promote cryptocurrency as a whole – through whatever coin or coins people wish to use as their cryptocurrency of choice.Companies in the cryptocurrency space must be similarly open to working with a variety of coins. Yes, it makes sense for them to start with a single coin, which in most cases is bitcoin, but they must view the eventual inclusion of other coins as a boon and not a drain on their business models.Take, for example, mining equipment companies. Many of them, right now, sell just bitcoin miners, but some are looking to release multi-currency mining devices.Work of this sort, that seeks to innovate and enlighten across the cryptocurrency space rather than with just a single coin, is crucial to the development of cryptocurrency. The work acknowledges that our future is not tied to a single coin, but to embracing the diversity of coins that the market offers. I hope that we, the early adopters, are among the first to get on board with this idea as well.Battle image via ShutterstockaltcoinsdogecoinlitecoinPeercoin
Original author: Blake Cantrel

mintchip canada
The Canadian government has announced that it will end its MintChip electronic payment system, and that it will look to sell the business to the private sector.Announced in 2012, MintChip was not a digital currency akin to bitcoin, but rather a digital payment mechanism meant to function as an electronic cash that could be transferred between users.Still, it was widely viewed as an alternative to bitcoin that was famously criticised by Bitcoin Foundation director Jon Matonis for “missing the point” of the technology.A spokesperson for the Canadian Mint confirmed the news to The Wall Street Journal, stating:“The Mint is currently working with the [Canadian] Department of Finance to explore divestiture options. The Mint is also in the process of completing development of MintChip to package the assets for divestiture.”The news is surprising given that as recently as this past September, the government was reportedly working on a second version of its MintChip concept.Further, the development is notable as it was theorized by some in the community that Canada’s potentially harsh rhetoric regarding bitcoin regulation was meant in some way to promote the government-made MintChip, though such a connection was never established.How MintChip worksMintChip used a silicon chip with a unique ID as a store of value, which was then to be sent to brokers who would trade them to consumers and businesses. Users could embed MintChip devices onto USB sticks, wallets, laptops and tablets, or store their digital cash with a third-party service provider.A value of ’1′ on the chip would equal one Canadian dollar.For a more detailed overview of MintChip’s design, click here.Bitcoin in CanadaThe news comes as Canada continues to develop a robust bitcoin ecosystem. Home to the first bitcoin ATM in Vancouver, bitcoin’s profile has been growing within the local community, even as major Canada-based bitcoin exchanges face operational resistance from financial institutions.Just last week, the most recent version of Canada’s 2014 Federal Budget Implementation Act mentioned potential regulations for bitcoin, though the only provision would apply cash-like controls meant to restrict the movement of sums of digital currency of more than $10,000.The country’s domestic bitcoin exchanges have reported difficulties since meeting their banking needs recently, a development they attributed to statements made by the Canadian government, which, like most countries, has yet to introduce bitcoin regulation.Image via Wikipedia CommonsCanadaMintChip
Original author: Pete Rizzo
  1. Money-Spinners: Bitcoin ATMs Make Firsts from California to Congress
  2. Inside Square’s Stealth Approach to Bitcoin Integration
  3. Neo & Bee CEO Danny Brewster Faces Fraud Allegations in Cyprus
  4. Video: Roundup of This Week’s Bitcoin News 4th April 2014

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