Bitcoin News

The latest article by columnist and Bitcoin Foundation board member Jon Matonis (@JonMatonis) is on how Bitcoin is the only real disruptive technology in the payments space but is disruptive in a way that others might be missing.  Excerpts:

“We are witnessing something unique in money and payments.  For those that do invest and successfully navigate the potential traps, the reward is a first-mover advantage for a new international monetary unit.”
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”Here’s the important part. Disruption in the unit of account is the way to disrupt the payments space.”
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“With a nonpolitical monetary unit, many new possibilities become apparent structurally that would not have been contemplated before, such as: peer-to-peer mobile applications that don’t require permission from legacy transaction carriers; global remittances that don’t require high-fee currency conversion; merchant categories that are no longer disallowed due to fraud and chargeback risk; and merchant reach into countries that are not even on the map for Visa, MasterCard or PayPal.”
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“Disruptive technology disrupts. That is its mission. It annihilates any substandard process or product in its path and it originates outside of the established paradigm. You don’t see it coming.”
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“A payments startup that ignores Bitcoin in its strategic plan is like a publisher ignoring the Web in 1999. Certainly, innovators can design routes around Bitcoin and established players can dismiss it as insignificant, but that won’t make the elephant go away.”

 - http://bit.ly/17tznX5
 - http://bitcointalk.org/index.php?topic=191021.0 (Further discussion of the article)

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E-money researcher and Bitcoin Foundation board member Jon Matonis (@JonMatonis) describes how financial privacy of individuals is being trampled upon.  Excerpts:

“‘Private individuals should have more privacy [than politicians would be afforded], as they have not placed themselves into the political arena. They have not agreed to give up their privacy,’ [says Attorney Jenice Malecki (@SecuritiesLawUS)]. However, she also concedes that when it comes to offshore numbered accounts, ‘it does seem that banking secrecy is eroding. Slowly, but surely, banks are releasing information for governmental investigations.’”
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“Decentralized cryptocurrencies such as bitcoin arrived on the scene in early 2009 and now provide an outlet for personal wealth that is beyond restriction and confiscation. The exchange rate for government fiat currencies may be volatile now, but as the market price eventually finds equilibrium and stabilizes, bitcoin will become an important store of value.”
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“Think of bitcoin as your own personal financial safe haven or offshore bank.”
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“Future regulatory and confiscatory attacks on safe havens and banking secrecy will become irrelevant, because bitcoin provides for a personal ‘offshore center’ under direct and sole control of the individual.”
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“Legitimacy is a politically charged term. One person’s legitimacy may be another person’s aggressive and unjustifiable overreach. Also, what a certain government sees as legitimate may be viewed in other parts of the world as a violation of fundamental human rights. This is clearest in authoritarian regimes that impoverish and imprison their political opponents for so-called crimes against the state.”

 - http://bit.ly/150p0Ly
 - http://bitcointalk.org/index.php?topic=174567.0 (Further discussion of the article)

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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) posts on the latest developments in Cyprus and how Bitcoin has a role.  Excerpts:

“‘Only put money in the banking system that you can afford to lose,’ advises financial commentator Max Keiser. This is no more true than last weekend in Cyprus when bank depositors had electronic transfers blocked and were initially told to prepare for a confiscatory levy of up the 9.9% of their deposit balances across the board.”
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“Capital controls are about government keeping your money within easy reach should they ever want it. A decentralized and nonpolitical currency like Bitcoin starts to look attractive by providing a safer destination for wary depositors, allowing them to store their money securely in a digital account on their own computers, away from the big governments and politicians’ reach.”
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“The emerging trend towards bitcoin as a flight to safety seems to be accelerating despite the recent regulatory guidance from FinCEN (Financial Crimes Enforcement Network).”
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“‘Gold is a great way to preserve wealth, but it is hard to move around,’ added [James Rickards, author of Currency Wars]. ‘You do need some kind of alternative and Bitcoin fits the bill.’”

 - http://onforb.es/101vGDz
 - http://bitcointalk.org/index.php?topic=157476.0 (Further discussion of the article)

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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) writes an update on BitcoinFund (from Malta), the first Bitcoin Hedge Fund.  Excerpts:

“Institutional investors and hedge fund managers have secretly sought a regulated investment vehicle for bitcoin placements. Malta-based Exante Ltd. has the solution with their new Bitcoin Fund.”
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“Authorized and regulated by the Malta Financial Services Authority, Exante offers the Bitcoin Fund with an initial minimum subscription of $100,000 and a 0.5% upfront subscription fee.”
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“U.S. persons and U.S. institutions will not be able to access the fund directly.”
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“The fund charges an annual management fee o.5% of Net Share Value payable monthly in order to provide the sophisticated security and wallet management that one would expect with such large amounts at stake.”
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“Using Shamir’s Secret Sharing algorithm, the container password is then split into three parts utilizing a 2-of-3 secret sharing model.”
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“Exante intends to provide a two-way secondary market for the trading of fund shares [which will] provide shorting opportunities without having to own the underlying asset.”

 - http://onforb.es/WyW6Q1
 - http://bitcointalk.org/index.php?topic=150659.0 (Further discussion of the article.)

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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis)’s latest blog post makes an argument defending the need for cash to remain as a way to pay.  Excerpts:

“Let’s not kid ourselves, because the end of money, as we know it, really means the beginning of the transactional surveillance State, which makes this a serious debate about the boundaries of State power and the dignity of an individual.”
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“With ultimate tracking capabilities, how does Wolman decide when a government’s ‘right’ becomes a wrong?”
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“Privacy, especially user-defined privacy, sits on a sliding scale that is defined by the individual. One person’s idea of privacy may be anonymity from all and another person’s idea of sufficient privacy may be privacy from aggressive marketing companies and governments but perhaps not from banks. The point being that it is the prerogative of the individual, not book authors or digital money consultants, to determine where one sits on that personal sliding scale.”
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“As Web anthropologist Stowe Boyd proclaims, anonymous cash equals freedom and we should rejoice in that.”

 - http://onforb.es/YoqjgY
 - http://bitcointalk.org/index.php?topic=146661.0 (Further discussion of the post.)

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Forbes contributor and Bitcoin Foundation (@BTCFoundation) board member Jon Matonis (@JonMatonis) considers the impact a government ban on Bitcoin would have on the fledgling currency.  Excerpts:

“The demand for an item, in this case digital cash with user-defined levels of privacy, does not simply evaporate in the face of a jurisdictional ban.”
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“Ironically, the ban would create something like the Streisand effect for Bitcoin generating an awareness for entire new demographic groups and new classes of society.”
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“[Bitcoin is] a bet that career mobility and independent contractor businesses will eventually outstrip the growth of the corporate wage-slave population.”
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“[The government’s] best response to Bitcoin is irrelevancy, or failing that, extreme gold-like market manipulation for as long as possible. The end game for the State is perpetuating the fiat myth — their fiat myth not the populace’s cryptographic Bitcoin myth. They have always known that faith in money is a mass illusion, however they never considered that they wouldn’t be in charge of the illusion.”

 - http://onforb.es/112nF0u
 - http://bitcointalk.org/index.php?topic=139516.0 (Further discussion of this article)

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Forbes contributor and Bitcoin Foundation (@BTCFoundation) board member Jon Matonis (@JonMatonis) shares some details from leading online gaming services where bitcoins are used as the currency.  Excerpts:

“SatoshiDice reported first year earnings from wagering at an impressive ฿33,310. During the year, players bet a total of ฿1,787,470 in 2,349,882 individual bets at an average monthly growth rate of 78%. […] The odds are calculated to give the house an edge of 1.90% with full transparency because all dice rolls and earnings statistics are verifiable using the blockchain. […] SatoshiDice shares are traded on the MPEx bitcoin [cyber-equities] stock exchange […]. At the current exchange rate of $17.00 per BTC, SatoshiDice is a company valued at $8.9 million.”
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“BitZino reported first year earnings from wagering of ฿10,137. During the year, players bet a total of ฿664,192 in 3.2 million individual bets. […] [From June to December BitZino saw] a period growth rate of 894% or average monthly growth rate of 149%.”
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“Seals With Clubs is dealing about 10,000 hands of poker per day and raking only about 4,000 of them. […] The current rake is 2.5% with a cap of ฿0.10 per hand which is slightly less than half of what other poker sites would charge.”
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“With privacy, efficiency, growth, payment irreversibility, and cost savings as demonstrated by the above, it’s only a matter of time before the mainstream casino operators of Gibraltar and Malta realize the benefits of a gaming economy that leverages the ideal digital casino chip.”

 - http://onforb.es/10DVrxq
 - http://bitcointalk.org/index.php?topic=138032.0 (Further discussion of this article)
 - http://tcrn.ch/Wgetql (Related article on TechCrunch)
 - http://bit.ly/W06gXC (Related article on The Verge)
 - http://ars.to/10QcVYw (Related article on Ars Technica and Wired.co.uk)
 - http://bit.ly/10JloM3 (Related article on Boing Boing)

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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) shares the argument by Austrian economists that price deflation is nothing to fear.  Excerpts:

“Deflation is not a problem in the traditional monetary system and it will not be a problem in the bitcoin economy.”
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“Although the supply of [bitcoins] will be relatively static with the exception of attrition through permanently lost coins, I will refer to the monetary phenomenon as deflation because as bitcoin’s asset value increases compared to political numéraires, its effect on price expression will be seen as deflationary.”
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“An economy with a monetary unit that increases in value over time provides significant economic benefits such as near zero interest rates and increasing demand through lower prices.”
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“‘During an inflation, you want to get rid of the money. You want to consume. You want to spend. But you don’t become wealthy by spending and consuming; you become wealthy by producing and saving’ [writes Doug Casey, of Casey Research]”.
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“‘Deflation puts a break–at the very least a temporary break–on the further concentration and consolidation of power in the hands of the federal government and in particular in the executive branch.” [writes German economist Jörg Guido Hülsmann]”.
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“Ultimately, the market will reach an equilibrium between investment and savings because in the absence of an equilibrium the benefits of a savings-only strategy would evaporate. Proper economic growth through sound investments will lead to a productivity-driven deflation.”

- http://onforb.es/V03gqW
- http://bitcointalk.org/index.php?topic=133079.0

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Bitcoin Foundation board member and Forbes contributor Jon Matonis (@JonMatonis) in a post on the Bitcoin Foundation’s forum gives reasons for individuals and organizations to support the Bitcoin Foundation (@BTCFoundation).  Excerpts:

“The Bitcoin Foundation is an educational and software research organization offering annual memberships and a standard donation program.”
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“Some of the significant initiative areas where we are already having a measurable impact: 
 - Human Rights and Social Justice
 - Privacy
 - Sound Public Policy
 - Math and Science”

 - https://bitcoinfoundation.org/blog/?p=41
 - http://bitcointalk.org/index.php?topic=126763.0 (Further discussion of this post)

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Forbes contributor and Bitcoin Foundation board member Jon Matonis (@JonMatonis) wrote a post on the announcement that WordPress now accepts bitcoin payments.  Excerpts:

“Leading web publishing service WordPress.com announced that they will begin accepting the nonpolitical cryptographic money Bitcoin as a payment method for various upgrades.”
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“WordPress spokesperson Andy Skelton said, ‘Unlike credit cards and PayPal, Bitcoin has no central authority and no way to lock entire countries out of the network. Merchants who accept Bitcoin payments can do business with anyone.’ And thus the planet becomes immediately open to their products and services.”
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”’[Credit cards and PayPal are] unusable for those bloggers [under restrictive regimes] because they expose the payer’s physical identity.’ With user-defined anonymity and identity privacy, bitcoin offers unparalleled safety to dissident bloggers and free speech advocates.”
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“WordPress may not stand as the lone giant for very long since Reddit CEO Yishan Wong hinted last week at the social news site’s willingness to begin transacting in Bitcoin for Reddit Gold subscriptions.”
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“[Considering this move by WordPress, other] merchants will increasingly be asked: ‘What’s your Bitcoin strategy?’”

 - http://onforb.es/Xgv0Nv
 - http://bitcointalk.org/index.php?topic=124482.0 (Further discussion of this WordPress development)

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