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Europe a De-Facto Bitcoin Haven

Europe continues to be a hotspot for Bitcoin opportunity. Despite all those “warnings” and misrepresentations by a totally clueless EBA, European countries themselves continue to be  mostly Bitcoin-friendly. Many have established rules the Bitcoin industry can reasonably rely on. Most notably, Germany, France, Switzerland, Austria, Denmark, the Netherlands as well as the three Baltic states have developed into “very Bitcoin-friendly” places.

On top, if a European country happens to be less than what you expected in Bitcoin-friendliness, then in comes that general rule of freedom to do business in all of the EEA (European Economic Area, which includes not only the EEC or EU member countries but also the additional EFTA countries plus Switzerland), and an affected Bitcoin business would be able to re-locate to another member country offering “greener pastures”.

Still, this business and innovation-friendly situation should not be taken for granted either: it is something to be cherished and to be defended against possible future deterioration. Particularly during the early Bitcoin years its significance is not to be under-estimated, for it allows Bitcoin “room to breathe” and develop largely unhampered by needless bureaucrat intervention.

Why You Might Not Want to Buy from Amazon Marketplace

Amazon.com has been all the rage for many years now. Notorious for burning through investor money and venture capital for a period of over ten years, Amazon.com have broken into most every market for consumer products there is, and have increasingly established themselves as The Number One in online shopping.

That this has been achieved largely by killing off everything that even remotely looks like “competition” to the still growing giant — and at a high cost to Main Street boutiques, employment, and small business in general — is not meant to be a matter of concern here. Though regrettable, it could also be argued that this is “a normal development” in the market (at least it has been done without government money and subsidies) and it has a limited amount of advantages for the average buyer too: convenience of shopping from home and saving the time and gas expense for a trip to the local mall or garden centre. Killing off those only slightly-frequented but still area-consuming unsuccessful branches of certain big-box stores may also seem advantageous both from an efficiency and environmental point of view. Let us some day re-forest these extra acres and make our urban, suburbian and even rural  surroundings a bit greener again!

Still, there are huge drawbacks even for the presumably-prospering buyer when it comes to using Amazon.com.

In an attempt to grow and grow again their business even further, Amazon.com have discovered third-party sales and opening their platform to small and large outsiders. While this is a good thing from a selection point of view and combines lots of eBay-style attractions with hassle-free Amazon.com fulfillment, it also means eBay-style dishonesty and scammers have long entered the magnificent and apparently controlled Amazon.com environment.

Just as eBay is notorious for being susceptible to offering stolen goods or scrap of no value hyped up and presented as the latest must-have at some “bargain price”, Amazon.com’s marketplace is heavily contaminated with forgeries, low-quality copies and pirated brand items of all sorts. Amazon.com cannot, or will not, do anything to effectively police this situation in order to protect their unsuspecting customers. This is particularly despicable when it comes to food, nutritional, and general health items that can pose significant dangers of bodily harm to victims of these less-than-wonderful “marketplace” sellers. A current case is pending in the courts where certified organic foods meticulously checked for heavy-metal contamination and other toxins and then sold under a trusted label (if authentic), have been commercially re-produced by a New Jersey pirate company and sold under a forged version of that widely-respected label. The pirated items are diluted down using cheap glucose syrup fillers instead of the wild berries intended and paid for by the customer; or they are made of cheap imported raw materials from China, highly contaminated with cadmium and other heavy metals, instead of the laboratory-checked ones the buyer is willing to pay extra for.

As Amazon.com, obviously keen to not cut into their commission-generating business model, contend that these forged items are not illegal by themselves (because there are, curiously, no established USDA or FDA limits for heavy metals in those particular types of food), it is apparent that they don’t care about item quality the way a good merchant should. There are also  other examples where it has become equally clear that Amazon.com do not care about what you and I might take for granted, but only look at their self-interest and revenue stream instead.

All this means that Amazon.com should not even be considered for sourcing certain kinds of goods, particularly not “important” ones or something you are going to put in your body, and that they might well be in the process of ruining their own revenue model after all, albeit in a different way.

It still pays to not blindly click through Amazon.com for those “other items” after ordering that book or computer parts, but use a trusted and proven smaller vendor instead.

Troubles of Small-Scale Crypto Coin Mining

Whether for Bitcoin or Alt coins, Crypto coin mining or the operation of computing equipment for delivering the proof of work necessary to “create” virtual currency, has become “hot” during the past year and a half. With Bitcoin making headlines in late 2013 for breaking above $1000 — albeit for a very short time so far — attention has been drawn to the overall Bitcoin sector.

First-movers had long been mining bitcoins. When additional currencies both using the SHA-256 algorithm as Bitcoin itself (such as Peercoin) or the wider Alt coin selection headed by Litecoin (and based on the less resource-incentive Scrypt algorithm) started coming along, so did the first dedicated coin mining machines or ASICs (application-specific integrated circuits or usually arrangements of multiple such chips).

The result has been a dramatic increase in mining efficiency as well as profits achievable by operating such equipment. A side-effect is the constant, and accelerating, increase of network difficulty which basically means that a growing number of miners also means higher requirements and more investment of computing power before a new “block” can be “discovered” (or successfully calculated by someone’s machine).

During the first half of 2014, profits in Crypto coin mining have been good, or very good, with plenty of coins to choose from in both algorithms, SHA-256 as well as Scrypt.

The explosion of both stupidity (by way of yet more silly-sounding “coins”) as well as hashing power (with the release of very powerful Scrypt-specific ASICs), however, quickly and dramatically pushed up network difficulty to a point where daily (or monthly) profits are dwindling. Many Scrypt-based coins have seen their early-2014 profitability shrink to about a quarter or less. Even Lightcoin itself with its relative stability due to enormous total network hashing power has sunken to less than one third of its May 2014 profitability levels.

To counter the ever-growing “pump and dump” group of “miners”, a number of coins even have moved to drastic measures. These include talks by Potcoin to move to Scrypt-N (which at that time was believed to be ASIC-resistant) or pegging the Dogecoin network difficulty to the one of big and mighty Litecoin. The Feathercoin and Guncoin developers have actually hard-forked away from Scrypt and are now using the X11 algorithm for which there are no powerful ASICs in existence as of this writing.

The overall result for Crypto coin miners as well as users and coin developers is that choice is decreasing: choice of highly profitable and easy-to-mine coins, choice of coins for longer-term holding or similar real-life uses, and choice of “useful” algorithms for developers and operators of a coin who want to protect their invention and help it grow to meaningful every-day use by ordinary people.

Canada Re-Considering Its Hitherto Open Stand on Bitcoin

Canada, while being hailed as one of the best countries worldwide for Bitcoin businesses, is on record for having a hands-off and very open approach to the overall Bitcoin and digital currency phenomenon.

Still, the country recently appears to be moving toward more regulation. This would be in line with the country’s track record to steam ahead and then revert in order to please its southern neighbour, the overregulated and increasingly stagnant United States.

Whether or not it is good news then, the Canadian Senate is hearing witnesses and experts on Crypto currencies in order to decide future legislative action. Although the committee chairman appears to be enthusiastic and very open about economic and technical chances brought about by Bitcoin, the fact that at least some regulation will result from the hearings is bad news for Bitcoin already. For no regulation is always easier than some regulation, however well-meaning it may be. Had the internet been regulated or censored in the early 90s, it is doubtful that it would have evolved to the ubiquitous tool it is today.

Expert testimony delivered by Andreas Antonopoulos is included below (a full-length recording of the hearings). During his testimony, Antonopoulos made it very clear that the very structure of Bitcoin as a push payment system does not need any regulation and that imposing regulation derived from the conventional pull payment systems that are common today (banks, credit cards etc) would mean a fundamental misunderstanding of both Bitcoin and also the individual’s ability to act in their own best interest, generally without any government interference whatsoever.

Switzerland: Hands-Off Approach Toward Bitcoin

The Swiss Bundesrat has decided to uphold Switzerland’s hands-off approach to Bitcoin. It has explicitly been stated that Switzerland does not regulate Bitcoin now, nor that the country is llikely to do so in the near future. The decision comes after months of deliberation and hearings on what Crypto currencies are actually all about and what they are likely to achieve and be used for in a world financial system of the future.

Expert testimony has been taken into account, and state-of-the art writings, white papers and other publications about Bitcoin and Crypto currencies have been sifted through in an effort to arrive at a both politically and economically reasonable solution.

With its hands-off approach, Switzerland has decided to step back and watch the digital currency phenomenon grow without regulatory interference.

It appears that the Swiss have begun to understand the state of the current and dollar-based world currency system. The country’s Bitcoin decision comes at a time when Switzerland has decided to open itself up to direct Chinese renmimbi trading and amidst preparations for a referendum on whether or not the Swiss National Bank should be mandated to hold at least 20% of the country’s foreign currency reserves in gold. The latter would significantly decrease the country’s exposure to the dollar which, as with most central bank, is currently the number one reserve “asset” (or, rather, liability).

Switzerland’s decision on Bitcoin appears to be part of an overall move toward at least a partial system of Sound Money, one which is likely to increase the importance of gold for long-term holdings and both paper and virtual currencies for transactions and trade.

Russia: Now Potentially the Most Bitcoin-Averse Place

Russia may turn out to be the most hostile place for Crypto currencies such as Bitcoin and others.

A far-reaching ban on Crypto currencies in Russia has been announced earlier today by the Russian central bank. While that ban may be one thing (and is being discussed throughout mainstream and special interest media anyway), there are some other other aspects to the Russian central bank’s statement worth mentioning for showing utter ignorance of overall monetary matters and facts.

The Central Bank of Russia claims that:

“Bitcoin is an independent currency which is not regulated by a government and therefore carries a high risk in devaluation.” [Emphasis ours]

Economic history shows that government-regulated paper — or fiat–currencies are the ones which have failed throughout all of human history. There is not one single exception since ancient Egypt. In light of Russia’s track record after 1990 alone, the central bank’s point on “devaluation risk” is truly hilarious. (It may be worth — or even fun — to note here that Russian currency has been devalued by a factor of 5,000,000,000,000,000 [fifty quadrillion, you read right] since the 1917 revolution.)

“Due to the anonymous nature of virtual currencies, (…)” the geniuses in both general technology and IT at the Russian central bank continue [that there are some percieved risks of yada-yada-yada].

The fact that Bitcoin is not anonymous at all defies the whole point and, therefore, even the argument about those feared risks: Bitcoin is not “anonymous” but in reality weakly pseudonymous, which is a very different thing.

Those who do not know more about it should refrain from commenting on it, period.

Bitcoin is, in fact, the most accessible pile of data on any sort of financial transaction a government could ever get or want. Maybe that is one reason why Bitcoin is not popular for illegal, let alone terrorist, use. Crypto currencies can be made more private by certain additional measures and careful use, the same as with cash or certain ways of making bank transfers, but these measures go beyond the ability of most people and are not normally applied by Crypto coin users.

A Satoshi-Like Figure: This Time Under a Viking Helmet?

Iceland launching Auroracoin, a private Crypto currency

Iceland has been in the news on several topics over the last few years: from being a model on how to bankrupt US dollar-style paper currencies and the overall country behind it to granting WikiLeaks asylum to how an apparent “recovery” after financial collapse can turn out fake — these are just a few examples of the news items around Iceland.

Here comes another one though: the creation of a nation-wide — though apparently privately proposed and run — Crypto currency for the entire Icelandic population, called Auroracoin.

Icelandic auroracoins to start on 25 March 2014

The new Crypto coin has been proposed by Baldur Friggjar Óðinsson, a name that could turn out to be another pseudonym just like Satoshi Nakamoto, and will start operation on 25 March 2014. Every Icelander, or about 330,000 persons, will receive AUC 31.8 for free at launch time. Eligibility will be checked against a national database of Fødelsenummror (or “birth numbers”, a Scandinavian-style register of — actually quite dehumanising — personal number keys assigned upon birth certificate issuance). Even Óðinsson himself points out that he recognises the ‘unfortunate fact” of there being such a nasty bureaucrat register but tries to make the best of it by using it for fairly spreading the new Auroracoin currency among eligible initial participants.

Óðinsson’s approach is a remarkable attempt to help lifting Iceland out of its financial mess and failed recovery. As the plan appears to be based on private initiative rather than government policy, the view of the government is not known. Good reason for using a pseudonym indeed.

Developers are encouraged to build tools facilitating the use of auroracoins, and Crypto coin exchanges have been called upon to include Auroracoin with other Crypto coins traded.

auroracion Iceland nationwide Crypto currency

Of All Places: The Post Office “Facilitating” Bitcoin?

uspsAndBitcoin

The USPS (United States Postal Service) is struggling to keep their fading industrial-age business alive. In a series of papers on the future of postal services in the U. S. (and around the world), postal bureaucrats as well as UPU (Universal Postal Union) functionaries laid out a number of plans to revive their dying business and to find ways of maintaining their prerequisite costly network of branches. Including all kinds of Bitcoin-related services is one of these many proposals.

The postal bureaucrats seem to acknowledge the fact that Bitcoin technology has enormous potential. Looking for any straws to cling to, these representatives of a drowning business are now even willing to go as far as adopting something like Crypto currency which, in fact, is totally against their nature (of not working, making coffee breaks, and overcharge customers for lousy services based on having a monopoly). What they entirely fail to understand is the fact that Bitcoin is already doing very well without the “help” of the geniuses at the post office and that a peer-to-peer situation has little room (nor need) for state-to-state or country-to-country style relations. Representatives of the post seem to think that they can jump onto the Bitcoin bandwagon, a symbol of first-movers into a new technology helping us to finally break free from anachronistic power structures and limitations, by giving us yet another of their more-of-the-same “solutions”.

One might be forgiven having doubts about about postal workers’ ability to live up to the standards usual in the Bitcoin world. Bitcoin is an inherently free-market phenomenon, just like the overall internet. The mentality of a state-run enterprise is right on the other end of the scale. As the old saying goes, “In socialism everything works like the Post Office”.

Bitcoin Security a Primary Concern for Many

Bitcoin Security is a pre-requisite for mass adoption of Bitcoin and all other Crypto coins.

In their continuous quest for “exciting” stories that “sell”, the mass media have, once again, done a good job of spreading mis-information — this time about Crypto coins (like Bitcoin and others). The media’s superficial coverage “breaks” sensational stories of some poor dummy losing hundreds of thousands in Bitcoin by dumping their old computer or others “finding” a fortune in Crpyto coins in a Yard Sale. All these news items suggest that Crypto coins must be terrible when it comes to security: if you can find them, you can lose them, hence overall insecure, right?

Wrong.

There is little doubt among the better-informed that Crypto coins are secure from a technical point of view. As usual with all kinds of IT (and other) security issues, the risks stem from inadequate use by every-day users. And while this may hamper mass-adoption in some ways, it is something that can and needs to be overcome by providing the tools needed for even “dumb users” to handle their Crypto coins securely.

“Being Ones Own Bank” (as Blockchain.info put it), while offering huge advantages, also has a few downsides — and that is security or the lack of it…

The overall “Bitcoin Security” field, therefore, needs to be worked in order to reduce the risks by prudent and as simple as possible means for everyone.

It will help the overall Bitcoin space by fostering mass adoption of this great technology in real life.

Bitcoin Facilitates Transactions and Brings “Web 3.0”

Since the European banking crisis unfolding, Crypto currencies such as Bitcoin, Lietcoin, Peercoin and others have become a refuge for people fleeing from the euro and striving to protect their assets and savings from confiscation.

If you lived in Cyprus and had your savings in euros, you have been fleeced by your friendly government and seen your life savings go to bureaucrats and their banker friends. Other countries throughout the PIIGS region of Europe will follow soon, in all likelihood seconded by the savings of citizens in the “richer” countries as well.

Little reason to continue trusting conventional banks or politicians. Crypto currencies such as Bitcoin and others — while having their inherent systemic risks as well — appear to be safe in comparison. The outlook on paper currencies is, indeed, as bleak as giving Bitcoin and all other Crypto coins an additional boos for this reason alone. This is further enhanced by growing use of Crypto coins in legitimate commerce, including more and more quite conventional products and services, throughout the world.

Many analysts believe that Bitcoin, which facilitates unmediated fund transfers between individuals, poses a potential threat to conventional banking. Bitcoin and other Crypto coins are certainly exposing the weakness of the US dollar as the world’s incumbent reserve currency, as well as all other similarly stricken paper currencies.

“Faster and easier than One-Click Buying on Amazon.com”, but actually for unlimited amounts of money.

Watch the following explanatory video for details about how — and why — Crypto currencies function: