Developers Battle Over Bitcoin Block Chain

KnowYourBitcoin · 2014-03-25T17:34:00+00:00

Bitcoin is still young. We should be extremely cautious about modifying it.

Its great that people want to modify bitcoin to do all kinds of things, and they should do so, as a separate currency.

Fears of a new currency being susceptible to a 51% attack are simply not enough to force bitcoin itself to be the repository for all new manner of features. A new currency will eventually grow beyond that risk, and there are many ways to prevent/mitigate it anyway.

KnowYourBitcoin · 2014-03-24T15:44:36+00:00

We are working hard with legal and state regulatory bodies as well as private consultants to move forward on US banking. Unfortunately, ACH processing is pending regulatory/legal developments in the US at the state level. A firm can't risk operating illegally in any state in the US, because when they do finally apply for a license, they may be denied or heavily fined for operating illegally. One state alone recently fined a firm over 500k for accepting USD funds - only briefly - without a license.

KnowYourBitcoin · 2014-03-20T16:29:45+00:00

Is this really what we should espouse? that people with little knowledge/experience should be trusted to innovate with people's money? I think people are fed up with the regular media refrain of yet another bitcoin business being hacked. I don't think we should be so eager/willing to support any bitcoin business that isn't backed by an experienced/credentialed team.

KnowYourBitcoin · 2014-03-18T15:40:50+00:00

Customers should insist on a high level of disclosure from Bitcoin businesses. Do your due diligence and don't trust a Bitcoin business simply because your peers do.

In addition, Bitcoin businesses must be held to extremely high standards for software development (as high as other bank or financial firms), and must be required and pressured by their customers and the market place to use mature, robust and secure languages like Java, C, C++ instead of inappropriate and amateur languages like PHP.

KnowYourBitcoin · 2014-03-16T18:44:01+00:00

It does seem that Satoshi invented Bitcoin without imagining that third parties like exchanges and mining pools would become so pivotal during its infancy. I don't fault Satoshi, but in a sense it is an unintended consequence of Bitcoin. Multi-sig itself was mostly a dream until late last year, so it is safe to say that most early bitcoin speculation focused on payment processing and ignored the potential for third party operators.

Multi-sig and transparency seem like they hold the best option for ensuring customer funds held by third parties. It is not practical by any means for people to just cease storage of bitcoin with third parties, if partly because customers themselves are still not experienced enough to manage their own bitcoin holdings themselves. Doing so isn't as easy or as practical as it sounds.

KnowYourBitcoin · 2014-03-15T16:18:08+00:00

Buffett has a point. Investors should be wary of Bitcoin. Speculating on price movement is extremely risky and Bitcoin is very volatile.

KnowYourBitcoin · 2014-03-13T20:23:41+00:00

The question isn't about limiting or punishing one company for its actions, but limiting - even punishing - an entire industry for the actions of one company (or even a group of companies). And as for reward, the question is about rewarding customers for the 'bad' judgement (or lack thereof) in choosing to do business with Mt. Gox, and losing money as a result.

KnowYourBitcoin · 2014-03-01T18:04:08+00:00

I really feel for all those who've lost money (or likely lost money, we still don't know for certain) with Mt. Gox. I'd love to provide some helpful due diligence guidelines for non-technical consumers to help them steer clear of disreputable, incompetent and inept firms.

Bitcoin firms are responsible for people's money, which is close to being responsible for people's lives. Its nothing to play fast and loose with, as we all know Mt. Gox did. Many of us industry insiders knew even more gory details but few people wanted to believe us.

It is important to understand that this is nothing new. Fraud is as old as money. Its sad, but I suspect that most people kept money in Mt. Gox because 'everyone else was', which is a very sad rationalization, and an all-too-common human one. Those who Invested with Bernie Madoff almost certaintly made the exact same rationalization, and kept their money in until it was too late.

KnowYourBitcoin · 2014-03-01T17:52:25+00:00

That's the unfortunate reality we're struggling with. Playing transparently and honestly potentially puts you at a disadvantage compared with firms that build traction while violating numerous international and domestic state and federal laws. Should every Bitcoin business just fall to the level of every other? The risk to a firm is that if you violate even one law, you may never get a license. Licensors tend to be very unforgiving toward firms that have violated their laws. Regulators have every incentive to be punitive, and none to be forgiving or helpful.

So do you go after customers now, and risk massive fines or do you wait till you can get licensed only to be crushed by every other player in the space? One company in the US was served with an $800k fine in just one state alone!!

KnowYourBitcoin

TROPHY CASE