DGC Founder Discusses His New Book, The Digital Currency Challenge

Carl Mullan is DGC’s founder, former editor and publisher of DGCMagazine with more than 50 past issues online. His new book, The Digital Currency Challenge – Shaping Online Payment Systems through US Financial Regulations, is now available on Amazon.

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Bitcoin – A Jack of All Trades is the Master of None

As cybercommerce begins it will lead inevitably to cyber-money.– James Davidson, The Sovereign Individual, 1996

The hype surrounding Bitcoin has gone off the charts in the past year.  For those of us who have been involved with digital currency systems since the 1990’s, it is interesting to see how people caught up in the hype think Bitcoin is wonderful but in many cases cannot clearly see the reason why.  Other enthusiasts think that Bitcoin is the ultimate solution for all payments.

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A Customer’’s Review of Kraken

Kraken, by Payward, is a new bitcoin/altcoin trading market based in Sweden, which has been trending on Angel List for the past few months.

krakenKraken allows members to fund their accounts and trade using Euro, USD, Won, Bitcoin, Ripple, Litecoin, Namecoin and Ven.

Kraken’’s trading books allow USD trades for five crypto-currencies, as well as a pairing of Bitcoin with Litecoin, and trading Bitcoins against the other two fiat currencies (Euros and Won).

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Bitcoin and the Online Gambling Industry

Bitcoin is a revolutionary new currency. Everything about it is so new and different that we do not always know what to expect next. We have, however, seen a great degree of success so far in many areas. It is already possible to buy just about anything you can think of with Bitcoins. There are some technical aspects, but in general, anyone can open up their wallet and send any amount of money across any border for a virtually nonexistent fee. This could all be done in a matter of seconds.

pokerOne area where all of these benefits have made a huge difference is in the Bitcoin casino arena. Before Bitcoin, websites were forced to deal with old-fashioned fiat currencies like the US dollar and the euro. Dealing with that sort of money often incurs significant fees and opens the door to all kinds of fraud. Some online casinos have chosen to simply accept and deal with these issues, but it still costs them more than it should to do business.

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Networks will form and needs will be met. The mechanics of Bitcoin adoption.

Bitcoin is fast, secure, nearly free, has a stable supply and has a high level of user control… its just plain better than the banks. You have to wonder why the hell everyone isn’t using it? But the Bitcoin economy is still fragmented and dependent on payment processors and exchangers.

loopMerchants accept bitcoin only to convert it back into their local fiat currency, and who can blame them? There just aren’t enough bitcoin accepting businesses out there and they have suppliers and landlords to pay. But bitcoin was meant to be a peer-to-peer currency, not a peer to exchanger to bank to bank to exchanger to peer currency.

Crypto will win the currency wars, but it may be a while before it reaches your home town. Bitcoin is better, but change is hard.

 

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Your bitcoins are good on the Seventh Continent

It’s a business platform, a digital commodity market, a business game and an autonomous economy that may just work its way into the ‘real’ world. Seventh Continent is a 3D virtual world where you can set up and run a business for real profit in Bitcoin or fiat.

7C logo“The idea is to offer a new ‘continent’, the ‘Seventh Continent’, to the Bitcoin community where Bitcoin users can do fair and corruption free business,” explains CEO Gregory Harmati. The Seventh Continent is an “independent, free market restricted only by supply and demand”.  It aims to create an economy based on freedom, transparency and fair play.

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What a landmark legal case from mid-1700s Scotland tells us about the fungibility and the very nature of money– and why we should care in light of the recent CoinValidation controversy.

As posted to the Bitcoin subreddit by goonsack

 
Although the case in question (Crawfurd v. The Royal Bank) happened in the mid-1700s, I think it is highly relevant and bears nicely on the recent controversy surrounding Coinvalidation. This post will also be of interest to anyone fascinated by the history and/or theory of money.

While this particular case involved paper banknotes (which arguably are irredeemably flawed) rather than a ‘hard currency’, it still illustrates nicely the rationale behind a decision which impacted a widely used currency at the time. Of primary consideration in this case was how its resolution would affect the usability of the currency (i.e. a facet from which currency largely derives its value).

As we’re probably all aware of by now, CoinValidation’s plan, if successfully implemented, would presumably lead to the blacklisting of some coins based on their past transfer history (e.g. having at some point been sent to/from deep web contraband marketplaces, having been paid as ransom to malware operators like those of CryptoLocker, having been stolen, having been allegedly ‘laundered’, having been associated with scams/ponzis, &c). In effect, this would destroy the fungibility of bitcoins. Some ‘clean’ coins would be easier to spend and transact with, while other ‘less clean’ or downright ‘tainted’ coins would be more difficult to use. Thus we would be left with a difficult-to-navigate and frustrating-to-use system whereby some coins are worth more than others (due to their varying spendability). And this largely defeats the purpose of a currency as a facile medium of exchange in the first place.

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Bitcoin Money Supply and Money Creation

Many articles mention, that the limited Bitcoin money supply is a major advantage of this digital currency. The reasoning usually goes like this. Since Bitcoins can only be created through mining and there is an upper limit of 21 million, Bitcoin is supposed to be inflation proof. This article for instance says, Bitcoin “theoretically eliminates inflation”. If this was true, Bitcoins would not lose purchasing power. The Bitcoins I own today would buy me the same amount of goods and services tomorrow. Or a larger amount in the case of deflation.

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900% increase in Bitcoin merchants

Bitcoin-accepted-here-printableBitPay has announced the approval of its 10,000th merchant while at this time last year the company had just reached 1,000 merchants. That’s an increase of 900% for the leading payment processor.

While BitPay is only one option available to merchants it is the largest Bitcoin payment processor and these numbers give a glimpse into the Bitcoin economy.

BitPay’s merchants are still largely ecommerce, 90%+, but they have experienced increased growth in non-US merchants. Earlier this year 40% of BitPays merchants were located outside the US, however these latest numbers show a 10% increase to 50% of customers based outside North America.

In line with the growth in merchants, the volume of Bitcoin sales through the business has also had a dramatic increase. “The month of August was another record month for BitPay, processing over 10,000 merchant transactions worth over $6.4 million.  Year-to-date in 2013, over $34 million worth of bitcoins have been spent on goods and services through merchants using BitPay’s platform.”

The Bitcoin economy may be small, but it’s growing rapidly!

eBay flirting with Bitcoin

It seems that the online commerce giant eBay has its eyes on Bitcoin. This is of course a bit surprising as eBay is the owner of PayPal which has a lot to loose from Bitcoin’s success. However, in the past week two indications of eBays interest in Bitcoin have popped up.

First eBay added, and then removed, ‘Virtual Currency’ to its categories of items for sale.

But even more interestingly eBay appears to have produced a video about Bitcoin which they posted to their blog.  The post is titled What’s the Deal with Bitcoins anyway? And curiously is presented without a date, seems to be only accessible directly via the URL and with this disclaimer at the top, “*This video was created for informational and educational purposes.”

The video does present Bitcoin in an unbiased and educational fashion.

The post and the video asks “What do you think? Are bitcoins the real deal?” however, comments are not allowed. … What’s the deal with eBay and Bitcoin?