On July 2nd, a conference was held in London for Bitcoin venture investors, entrepreneurs and hedge fund professionals.
On the agenda:
Some thoughts on Bitcoin and money
A tour through the strange and wonderful world of decentralized finance Panel Discussion: The rising stars of the Bitcoin start-up ecosystem
Panel session: regulatory and legal challenges.
Start-up Pitches, VC panel – investment opportunities in the Bitcoin space
Why Iceland should adopt Bitcoin as its national currency
Fireside chat with Shakil Khan, Angel Investor and founder of Coindesk, Charlie Shrem, Founder and CEO BitInstant, and Peter Vessenes, Founder and CEO of Coinlab and Chairman of the Bitcoin Foundation
Bitcoin as an asset class?
Merchant opportunities in the Bitcoin Space
The online news tech blog called, Tech Crunch
, posted an article stating that Europe is in a much better position to create Bitcoin startups than the U.S. “This message coming out of Bitcoin London today, the first major conference in London to address startups, investors and business models of the online currency. Covering the broad sweep of businesses, technologists and institutions involved in the Bitcoin space, the conference heard that the US may have made a fatal strategic mistake in classifying Bitcoin as if it were money so early on in its development.”
Bitcoins have been classified as if it were a startup entity of its own, and they feel that the EU has a better approach. “Because these are no regulatory regimes there is a lot of room to work out which rules might fit in and what rules should apply.” Constance Choi, General Counsel with Payward
In the UK the Financial Services Authority doesn’t consider Bitcoin to be ‘fiat’ money or eMoney. And at a wider European level, the European central bank has taken the view that Bitcoin is not money and doesn’t require regulation yet. That turns out to be a huge advantage for Europe.”
“Her comments were backed up at the conference by Bitcoin Foundation’s General Council Patrick Murck, who said competition between US government agencies to regulate Bitcoin was creating barriers for the ecosystem to thrive. Certainly there appears to be early signs that Bitcoin startups may desert the US for less regulated climes.”
website states; Freeing people to transact on their own terms. “Bitcoin standardizes, protects and promotes the use of Bitcoin cryptographic money for the benefit of users worldwide.” There mission statement as follows; Developing a more open economy. Their mission is to standarize Bitcoin, protect it, and promote it. The U.S.
has issued a regulation on Bitcoin per my previous article here
Bitcoin Foundation’s Response
to the state of California Department of Financial Institutions California Business, Transportation and Housing Agency, Assistant General Counsel, Ms. Tara L. Murphy.
It seems the state of California is under the belief that the foundation is a money transmitter
, hence the letter to the foundation. But the foundation is a non-profit, and not a laundry service for Bitcoins, nor do they transact. It seems they are devoted to the idea of Bitcoins, promote it and a vow to protect it as a currency. Never in my life have I ever seen anything like this. The idea to protect it and promote it as a currency boggles my mind through a non-profit. They seem quite zealous and serious.
E-Gov Link Enables Local Governments to Accept Bitcoin;
Municipalities who use the e-government suite of tools from E-Gov Link
can now accept Bitcoin as payment for numerous city services including permits, utilities, class or event registration, shelter reservations, or even parking tickets. According to E-Gov already 60% of the states have cities that use their technology to offer connection to the public (the website lists 36 cities across 20 states as examples.)
Currency vs. Virtual Currency; “FinCEN’s regulations define currency (also referred to as “real” currency) as “the coin and paper money of the United States or of any other country that [i] is designated as legal tender and that [ii] circulates and [iii] is customarily used and accepted as a medium of exchange in the country of issuance.”3 In contrast to real currency, “virtual” currency is a medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency. In particular, virtual currency does not have legal tender status in any jurisdiction.
This guidance addresses “convertible” virtual currency. This type of virtual currency either has an equivalent value in real currency, or acts as a substitute for real currency.” What does the text I highlighted in bold tell you? That the U.S. has already accepted Bitcoins as a value, a commodity, a currency, as long as it falls under a SEC filing for a company and you have a license.
The London conference states that the U.S. has made a mistake in regulating Bitcoins, however, I believe they are smarter than these people think. The EU has not addressed regulating the currency yet, but here and there businesses will take it in lieu of cash. I think the U.S. regulating it means they know this is coming and they want to keep control, make money, (hedge fund guys included). If you corner the market on Bitcoins, then if the standard market were to crash, whoever is left standing holding the Bitcoins wins. Remember there are only so many Bitcoins that will be issued
. That, is the bonus plan.
The Winklevoss twins
have revealed plans to float a fund based on the digital currency. “Winklevoss Bitcoin Trust would, they said, initially sell $20m of shares, with each share worth a fraction of a Bitcoin. The shares are aimed at investors looking for a “cost-effective and convenient means to gain exposure to Bitcoins”, according to a filing with US regulator, the Securities and Exchange Commission.
Why Iceland should adopt Bitcoin as its national currency; Sveinn Valfells, another Bitcoin Angel, is calling for investors and computer programmers to attend the Bitcoin Conference in London.
He wants to promote Bitcoins
as the new form of currency in Iceland. This idea stems from the fact that his family has a history of doing just that. His grandfather started a construction company, this came at a time when most people living in Iceland were building their own homes. They decided to use vouchers in construction materials instead of using cash. The money systems in Iceland have a way of never really becoming stable.”It became very popular on payday, and our company would issue the certificates. One day the company got a call from the inland revenue asking if we had issued these vouchers.
We confirmed it, but asked why they wanted to know. The official said somebody was trying to use the vouchers to pay his taxes.” The country finally accepted this form of payment in lieu of cash. Its all about what the value of a commodity is for a country and what it is really worth. If you have something someone considers valuable, then you have a currency….period.
“or acts as a substitute for real currency”
This next paragraph from this article gave me goosebumps. “City sources say major financial institutions have started hiring researchers to analyze the market, the theory being that if the price rises above $400, Bitcoins will have become valuable enough for them to plough money into. Others, however, feel that will create an even bigger bubble, and potentially undermine the embryo of a decent idea.”
Just the fact alone, that people have had their heads turned by Bitcoins, seriously enough to even contemplate investing millions of dollars, here in the U.S. and in the EU. To take it beyond some crazy far-flung idea and take it as far as a huge London conference is enough to give me goosebumps. This is coming, whether you believe in a bubble or not. When you have investors and hedge fund guys interested enough to poor money into it, trust me, its gonna take wings-and fly.