Apr 272017
 

Blockchain is here to stay. And that means that people in the financial sector are starting to worry about their job security. But do they have good reason to worry? And wouldn’t a technological breakthrough like this create jobs rather than start a wave of redundancies?

We’re well aware that no matter what industry you’re in, automation is a genuine concern in terms of job security, but of course, some jobs are far more likely to be taken over by machines than others. Blockchain, however, which certainly does remove the need for a number of human processes, is not a wholly automated technology…yet.

But before we go any further let’s first explain what blockchain is for those who are unfamiliar with the technology.

In simple terms, blockchain is like a digital ledger that is hosted from every user’s computer. There is complete transparency for all users with all transactions viewable and verifiable at all times. This makes it incredibly difficult to make fraudulent transactions and is a boon to those dealing with large sums of money particularly with overseas clients.

What blockchain is doing to the financial sector is opening it up and doing away with many of the mysterious procedures that those outside the industry had no understanding of. In effect, it is rendering many of these processes redundant.

And of course, fewer processes means less demand for employees to carry out such tasks. But just like many industries adapted to automation so too will the financial industry readjust itself.

In fact, several major banks have joined Swift’s blockchain project proving that they are indeed embracing this new technology. And with financial institutions taking such steps, they are creating new positions within their workforce.

Many have likened the rise of blockchain as something of a ‘dawn of the internet’ moment in financial history. Just like the internet, as blockchain evolves, and more institutions not only make use of it but embrace it, a new wave of job titles and positions will appear.

As the technology develops, there will be a need for security experts and those with encryption skills as companies seek to protect their records and ensure that this seemingly fraud-proof technology is as bulletproof as it claims to be.

There will also be endless applications of the technology that will require specific software, and so you can expect a wave of blockchain startups to crop up over the next few months and years. So as you can see the potential for job creation is quite encouraging.

Perhaps even the jobs currently under threat in the financial sector won’t just disappear but will actually evolve to incorporate blockchain-related tasks and responsibilities. Just like the print editor of bygone days is the online content editor of today so too could the international banking specialist of today become the blockchain expert of the future.

While financial professionals are right to expect change, it might just be that they too are part of that change and that all their fears of unemployment are unfounded.

 

Photo Credit: Wikimedia

Dec 062016
 

irs-logo

The U.S. government has always taken a somewhat hands-off approach concerning Bitcoin. With some countries around the world flirting with the idea of recognizing Bitcoin as legal tender, or officially adopting it, U.S. financial regulators instead classified the cryptocurrency as a commodity. This means that it’s viewed in a similar way to a stock or precious resource, rather than as a peer for the dollar or any kind of foreign currency.

That doesn’t mean Bitcoin has free reign, however. In fact, the Commodity Futures Trading Commission cracked down on cryptocurrency trading when it made the ruling that Bitcoin was a commodity, requiring trading platforms to comply with its own registration and regulation processes. But this didn’t really constitute any kind of direct government involvement or endorsement of Bitcoin.

This is in keeping with policies we see around the world, despite the aforementioned tendency of a handful of nations to get more involved. As one analysis of Bitcoin’s place in world markets put it, countries do not accept Bitcoin as a transactional currency between individuals and the state, even if they allow it to be used as an alternative to everyday currency. This is the case for several different reasons—among them the idea that many governments are wary of the fact that Bitcoin can be used as an “imaginary” currency aimed at purchasing illegal goods.

Interestingly enough, while Bitcoin cannot be used in financial transactions with the government, the government still wants to keep an eye on what exactly people are doing with it. A couple of years ago, the IRS referred to Bitcoin as property, which was significant in that the acquisition and sale of property must be tracked for taxing purposes. The alternatives were for Bitcoin to be taxed as capital gains, as currency, or not at all. But now it’s expected that anyone mining or being paid in Bitcoin must record the amounts (in U.S. dollars) as pieces of property.

Now, things are getting a little bit more complicated. Because Bitcoin grew so rapidly and wasn’t initially addressed by the IRS or the U.S. government, there are a few years’ worth of uncertain data that the IRS suddenly wants to get its hands on. Recently, the organization has ordered the release of customer records from Coinbase—the largest provider of Bitcoin services in the United States. While the IRS has not accused Coinbase itself of any wrongdoing, it stated that there may well be Bitcoin users who have (presumably either knowingly or unwittingly) committed tax fraud by failing to comply with policy regarding cryptocurrency.

Coinbase appears poised to fight the Justice Department regarding this order, and it’s likely to become a fairly big story in crytpocurrency circles. The idea of a service releasing specific customer information and transaction records is antithetical to the very purpose of Bitcoin, and what happens in this developing case could set some interesting precedents for how Bitcoin investors operate in the near future.

Jun 082014
 

sharexcoin

Sharexcoin, a new fledgling cryptocurrency exchange has shut down its doors within one week of operations, taking with it all the cryptocurrencies of the depositors. The exchange was a branch-off of Sharecoin, a new PoS cryptocurrency that was given out to the members of Bitcointalk forum. It is unclear at this stage whether this was a well-orchestrated scam or whether the owner was hacked and lost the coins. For continued updates, see the ANN thread of Sharecoin. At the time of this writing, the website is completely inaccessible and there is no way for the depositors to withdraw their funds.

The owner has a Bitcointalk id of ziplibrary and has not logged in since June 3rd 2014.

ziplibrary_sharexcoin

The community is still scrambling about the effects, with some people losing a lot of their Bitcoins/altcoins on this exchange. There has been no official word on this matter from anyone who runs the exchange.

The idea behind Sharecoin was an interesting one, and it was advertised as “The only coin backed by a real business”, the real business being Sharexcoin, an altcoin exchange that listed mostly new coins on its exchange. It was designed to be a Proof of Stake with a 30% stake per year. However, through the revenues generated at the Sharexcoin exchange, the owner promised to give people who ‘lock in’ their Sharecoin for 30 days, an equivalent of 60% stake per year, twice of what you would get in your wallet.

Sharexcoin was pretty popular for new altcoins, like Energycoin and more recently Qora. It appears that there was a huge trading volume for Qora on Sharexcoin before it went down.

Exchanges like these give the whole space a bad name, and it appears, for all intents and purposes that Sharexcoin is a scam exchange that ran away with all the depositors’ coins. There has been no communication from the owner of any other possible theories. It goes without saying that people are angry and disappointed with yet another exchange closing down.

zip_forum01

Did you lose money on Sharexcoin?

 

 

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May 112014
 

Energycoin

Energycoin (official announcement) is the newest kid on the block, with the express intent of promoting energy saving. This comes on the heels of SolarCoin which started this concept and donates SolarCoin to people who actually use solar energy. However, Energycoin is doing something different – it is following a more traditional route of promoting its goals, in creating a fund (2 million energycoin right now) that would be used as a donation to the cause. In addition though, Energycoin is a pure proof of stake (PoS) system, so its creation and network security aren’t too harsh on the energy consumption issue that has been brought up against cryptocurrencies, especially Bitcoin.

Since Energycoin is pure proof of stake, distribution is a very important factor. It was a good step that they didn’t do a paid IPO because a lot of them seem like scams. Energycoin on the other hand did what’s now being called the F-IPO or free-IPO for pure PoS coins, which is definitely better than a regular IPO.

On the technical front, a maximum of 110 million Energycoin were distributed among the participants who qualified for the F-IPO. The PoS system gives 10% interest in the first year, dropping to 8%, 6%, 2% and 1% indefinitely thereafter each year. This seems like a fair interest, although to me seems a bit on the low end (for instance, HoboNickel, a popular proof of stake coin gives 100% the first year and hasn’t seen any runaway inflation for a number of reasons).

Energycoin comes right around the very successful launch of ShareCoin, which used the same distribution model of a F-IPO or free IPO although ShareCoin is also backed by the business of an exchange. This model is becoming more and more popular with coin developers who are serious about their ideas.

The distribution is now complete, but it would be interesting to see how this project evolves over time. Free IPOs can be hard to sustain in the short term as there are a lot of ‘weak hands’ who would like to sell out their positions as soon as possible and get whatever ‘free Bitcoins’ they can get in return. However, those in this for the medium to long term should be able to hold their stake longer. Like I’ve always said, it is very hard to predict the price of altcoins. All we can do is look at interesting concepts and ideas and invest accordingly.

Photo Credit: The Bakken Museum

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Apr 282014
 

Bitcoin Music FestivalIf you’re in New York, there is absolutely no reason not to go to the Bitcoin Music Festival on Saturday, May 3rd 2014. This is being performed by the Ross Mintzer Band, a passionate group who “perform music for the hearts, minds and bodies of people everywhere”. Check out the Facebook page of the event to learn more and make your presence felt.

It’s a great opportunity to network with some fellow crypto-currency enthusiasts at the generous Bitcoin Center in New York at 40 broad street, right next to the New York Stock Exchange. The event starts at 7:30pm and goes until midnight.

Ross Mintzer has been a regular at the Bitcoin meetups in New York as is passionate about promoting Bitcoin and cryptocurrencies through the medium of music. It provides a great opportunity for him and his team to connect with the ordinary people and make them aware of Bitcoin and what the future holds. The whole community would greatly benefit if are more artists and performers who can reach the common folk through their art and promote and educate people in this area. I am very happy to see Ross take this first step in this direction.

This is the first Bitcoin Music Festival that I am aware of, and it should be a very interesting performance. Come there to show your support for the band and for the promotion of Bitcoin through music. In Ross’ own words, “I created this festival as a celebration of humanity and music, and as an opportunity for the Bitcoin/crypto currency community to bond.” So come there to bond with your fellow community members!

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Mar 032014
 

This is the first guest post on this blog! Please welcome Neil McStevens as the first guest writer on BTC Geek. Here’s his first post.

Bitcoin is here to stay

Following China barring its financial institutions from handling Bitcoin transactions and Russia prohibiting citizens and corporations from using Bitcoin, the question that is in everybody’s mind is: What does the future hold for the cryptocurrency?

When we try to answer the question about the benefits of using Bitcoin for individuals and businesses we need to take into account the fact that the currency is not illegal in almost all of the developed world, including the United States, while it has been banned and restricted in a couple of countries not known for having the most open economies. The answer then, that comes to mind is that the new digital currency is apparently considered potentially beneficial by governments of forward-thinking economies and thus is most likely here to stay.

The first ATMs in the U.S. are already in place, including in cities like Albuquerque, Seattle and Austin. This move followed the success of the Bitcoin ATMs in Canada, one of the first countries to embrace Bitcoin ATMs and allow for a “sit back and watch” attitude towards Bitcoin – a stance increasingly being adopted by other countries.

Some of the benefits include payment freedom, very low fees, fewer risks for merchants, security and control for individual users, privacy, transparency and neutrality (all evidenced by the fact that data on Bitcoin money supply is freely obtainable from the blockchain for anybody to authenticate).

Descriptions of the mentioned benefits by Bitcoin core developers can be found in Advantages of Bitcoin on bitcoin.org.

The two benefits in question which we will discuss in this article are:

  1. Private payments i.e. making payments without tying personal information to the transactions.
  2. Irreversible payments.

Private Payments:

About private payments, there are concerns that they could be employed for unlawful purposes. This, however, reflects an incorrect understanding of the benefit. First of all, according to Bitcoin.org, the internet currency is subjected to similar rules that administer current financial systems. Moreover, the crypto-currency cannot be more anonymous than cash considering its public blockchain and it is likely that it will not be a hindrance to criminal investigations. Jeremy Kirk at PCWorld explains that “Bitcoin offers privacy—as long as you don’t cash out or spend it”.

Besides, Bitcoin is actually engineered to stop a wide range of financial crimes from taking place, an example being chargeback fraud.

Irreversible Payments:

A lot of concerns have been raised on the irreversible payments benefit of Bitcoin, saying this benefit along with the private payments benefit could make the digital currency more attractive to criminals. This again, reflects an incorrect understanding of this benefit, as, again, Bitcoin is subjected to regulations of the current financial systems. According to John Delono at Bitcoin Reviewer:

One of the main reasons that playing poker with Bitcoin is great is the fact the payments are virtually instant and irreversible.

The irreversible property of Bitcoin can prove to be extremely beneficial to online businesses, especially in the areas of e-commerce, gambling, and payment processing.

It should be noted here that the private and irreversible features already exist with the widely-used and well-established wire transfer and cash.

Disadvantages of Bitcoin:

Yes, Bitcoin is not without its disadvantages. But they are there solely because it’s a new currency, and over time, as the currency’s market and technology mature, it could become one of the most popular options, if not the most popular option, for financial transactions. The disadvantages at this early stage of the currency’s life include:

  • Degree of acceptance
  • Volatility
  • Ongoing development

As you can see yourself, the first and the last disadvantages will no more be issues when there is more acceptance of the currency and the technology is improved. The second one – volatility, which will also very likely not be an issue in future when there is a widespread use of the currency, as users, both individuals and businesses, will seek price stability – doesn’t have to be an issue at this stage.

Research conducted by Eli Dourado, an economic research fellow for the Mercatus Center, shows that Bitcoin’s volatility has actually declined over the past three years. He even goes to claim that, “if Bitcoin’s volatility kept falling in half every three and a half years, it would be as stable as the Euro in less than 15 years.”

Conclusion:

It becomes easy to see why Bitcoin will succeed in the long run when we take into account the facts that:

  • The internet currency is to send and receive any sum of money immediately anywhere in the world 24/7
  • There are very low fees
  • As transactions do not contain customers’ information and are secure and irreversible, merchants are protected from frauds and fraudulent chargebacks, and as there is no PCI compliance, merchants can easily expand to new markets, overall benefiting from larger markets, lower fees, and minimal administrative costs
  • Bitcoin users are protected from unnoticed or unwanted charges by merchants, are protected against identity thefts (as they can make payments without tying personal information to the transactions), and can safeguard their money with encryption and backup
  • Bitcoin’s core is completely transparent, neutral, and predictable (as all money supply information can be verified on the block chain)
  • Volatility can be dealt with at this early stage of Bitcoin’s life by converting Bitcoin payments into local currency.

Neil McStevens is a journalism major who was born in Texas, and grew up in New Jersey. He loves Bitcoin because it makes simple tasks like paying your bills a lot easier. His hobbies are creative writing, dancing, and coding.

Photo Credit: Flickr

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Jan 212014
 

BitLegal

If you want to know the regulatory landscape surrounding Bitcoin, here is a great resource to check out – BitLegal. It is a very well designed website and gives a lot of resources for individual countries. I hope they can keep the site up to date with the latest data and information. Such resources are very useful for Bitcoin businesses and users alike. The founder of BitLegal is Zachary Taylor, a web developer from Philadelphia.

I think the map is very well done, and is very easy to navigate. They track about 30+ countries. Like I said, the site would be useful if the data is updated frequently, and I really hope it is. The site can be a go-to resource for anyone looking to know about the regulatory landscape, just like CoinMarketcap has become the go-to resource to check the market caps of crypto-currencies. Good luck to the team behind BitLegal!

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Jan 102014
 

Here’s the best history of Bitcoin that I’ve seen. Bitcoin will go down in history as something incredibly bold and exciting. It is hard to predict the future of such truly disruptive technologies, but looking back, there’s always a nostalgia, always a feeling of “I was there when it happened”. Bitcoin’s history is interlinked to the time that it was invented in. Not even Bitcoin can be free from the shackles of the cultural context in which it was born and grew. The events that you see that are related to Bitcoin don’t happen in a vacuum – they happen in a socio-economic-cultural background of the present.

It is always fun to look back, and think about the development of Bitcoin and how recent the major changes seem. And the challenges that it faced. Bitcoin blockchain forked? Yep, been there. A Billion Bitcoins in existence? You bet! It’s a colorful history. And the site does a very good job of providing all the details in an excellent format.

If you want to create something, and need hosting for the same, find Bitcoin Web Hosting, who value privacy as it should be valued. They are the guys behind this awesome website too.

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Jan 062014
 

NXT is one of those crypto-currencies that evokes a strong response, either good or bad from the community. Anon136, one of the veteran members of BitcoinTalk forums and a NXT enthusiast has published an informative post that he wants to share with everyone, so here’s a shout-out. Read it here. Don’t forget to tip!

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Aug 022013
 

Why do really smart startups do ridiculously dumb things? This isn’t a rant but an honest observation and a sincere tip for a great startup that I like and admire. Coinbase, please stop spamming. No, really.

For those who don’t know, Coinbase is a really neat startup that promotes Bitcoins among merchants and makes it really easy to get paid in Bitcoins and convert those Bitcoins into cash. In fact, the donate Bitcoins button you see to the right is from Coinbase. I like their idea and I really like where they are going. They obtained VC funding from Union Square Ventures already and recently stole a really smart programmer from Google who also happens to be the co-founder of Litecoin. Even Khan Academy is using Coinbase for Bitcoin donations.

Now you know their credentials, here’s my complaint: They cannot handle the simplest of requests on their side: Stop spamming your customers!

Here are the last 6 mails I received from them.

Coinbase_Spam

That’s right, they’ve sent the same mail 20 times! Google makes it easier to handle, but it’s a real pain for my email client on iPhone. Or anywhere else really.

I contacted them twice about this. And no progress at all.

Coinbase_Spam2

Here are some mistakes they’ve already made:

  • Provided no solution, no estimate of the time when this will be fixed or even a workaround.
  • I cannot unsubscribe. If I want to stop the spam, I have to delete my account.
  • The messages and spam are random. I have several deposits into my Coinbase wallet and the mails and spam just randomly show up. No warning.

I wonder how many customers they are losing because of this. How hard can it really be to fix?

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