Bitcoin Boxing the Dollar

Today, being both the day after Christmas and a Saturday, is not a day to work, so let's have an easy post. How about a composite image as in the Halloween post Bitcoin : Trick -or- Treat? (31 October 2015).

Sure, that might work, except it's not really Christmas -- it's the day after -- so the moment has passed for a Christmas post. How about a Boxing Day post as in Boxing Day [Wikipedia]:-

Boxing Day is a holiday traditionally celebrated the day following Christmas Day, when servants and tradesmen would receive gifts, known as a "Christmas box", from their masters, employers or customers. [...] In the liturgical kalendar of Western Christianity, the day is dedicated to St. Stephen, so is known as St. Stephen's Day to Christians (especially Anglicans, Lutherans and Roman Catholics), and to the population generally in Italy, Ireland, Finland, Alsace and Moselle in France. It is also known as both St. Stephen's Day and the Day of the Wren or Wren Day in Ireland. In some European countries, most notably Germany, Poland, the Netherlands and those in Scandinavia, 26 December is celebrated as the Second Christmas Day.

Since I didn't know any of that, I'm now a little more knowledgeable. An image search on 'bitcoin boxing' brings up mostly Mike Tyson photos, as in Boxing Legend Mike Tyson Launching Bitcoin ATM. Exclude the word 'Tyson' and voila...

Google image search on 'bitcoin boxing -tyson'
(Sorry, Mike!)

For me, the most interesting images in the composite are the cartoons. The T-shirt (and the related cartoon next to it) in the top row goes to Bitcoin vs Money Boxing Fight Retro Design T-Shirt:-

The Greatest Fight in History World Currency Championship Fight BITCOIN Challenger vs. FIAT MONEY Champion * Ringside is where it's at * No home TV * No radio *

The image to the left of the second row goes to Bitcoin Stock Vector [dreamstime.com], captioned 'Bitcoin is boxing with dollar'. Dreamstime it is; a drawing depicting David vs. Goliath would be more realistic. What will next Christmas bring for bitcoin?

Bitcoin in the News - Oct/Nov 2015

Continuing to catch up with news that has been reported since I started this blog, let's look at the two full months following Bitcoin in the News - Q3 2015. In both months there was one story that stood out above the others.

October:

• Bitcoin exchange Gemini safe and legal: Founders (cnbc.com, *) • 'Cameron and Tyler Winklevoss, famous for their legal spat with Facebook founder Mark Zuckerberg, launched bitcoin exchange Gemini on Thursday.'
• Winklevoss Exchange Gemini Struggling to Win Bitcoin Traders (coindesk.com) • 'Gemini, the long-awaited New York-based bitcoin exchange founded by Cameron and Tyler Winklevoss and billed as the "Nasdaq of bitcoin", finally debuted on 8th October.

November:

• This convicted Ponzi-schemer may be responsible for bitcoin's massive price spike (businessinsider.com) • 'Bitcoin is ripping higher these days, and a report from the Financial Times suggests that a convicted Ponzi-schemer's latest enterprise could be behind the surge.'
• Bitcoin Fluctuates (techcrunch.com) • 'If you haven’t stared at the price of bitcoin over the past few days, you’ve missed some excitement.'

A useful graph showing recent bitcoin price movements can be found at Bitcoin Price Index Chart (coindesk.com).

Another story that garnered attention was EU clamps down on bitcoin, anonymous payments to curb terrorism funding (reuters.com). Negative stories on bitcoin are nothing exceptional, e.g. Ben Bernanke: Bitcoin Has 'Serious Problems'. It's worth paying attention when a former Federal Reserve chairman talks about money. What are those 'serious problems'?

"It hasn't shown to be a stable source of value" [...] and its role as "a vehicle for illicit transactions, drug selling or terrorist financing or whatever".

This sort of story often generates sharp comments from the bitcoin community and in this case there were more than 150. Most of them focused on the concept 'stable source of value' in contrast to the U.S. dollar.

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(*) NB (to myself for later action): The CNBC page gave me a message that I hadn't seen before -- 'The audio or video on this page requires DRM software that Firefox does not support' -- along with an accompanying link, Watch DRM content on Firefox.

Bitcoin in the News - Q3 2015

Continuing with Bitcoin in the News - June 2015, I continued exploring the bitcoin world by catching up with the news for July, August, and September of this year. I noted about 70 stories, although September was problematic, because Google News Alert emails became sporadic around the beginning of that month. The upshot was less repetition, but more chance of overlooking something small and quirky.

There are a few ways of categorizing the news. The most important stories are picked up by the main news services and help to identify the big stories of a particular month. For example,

• 2015-07: Fearing return to drachma, some Greeks use bitcoin to dodge capital controls • Reuters
• 2015-08: MtGox bitcoin chief Mark Karpeles arrested in Japan • BBC News
• 2015-09: Bitcoin Is Officially a Commodity, According to U.S. Regulator • Bloomberg
• 2015-09: Bitcoin: Anything But a Currency, U.S. Government Says • Fortune

I give two examples of that last story, because the cited services specialize in business news and are more focused than general news services like Reuters and BBC. Also relevant are services that specialize in technological news. For example,

• The Bitcoin Schism Shows the Genius of Open Source • Wired
• Recording Nasdaq Trades on Bitcoin Platform: How It Works • MIT Technology Review
• Hacking Team broke Bitcoin secrecy by targeting crucial wallet file • Ars Technica

Two more business news services are worth mentioning because of their prestige. Although less useful because they sit behind a paywall (I'm willing to pay for one service at a time, not ten), the titles offer clues to the same stories on other, open sources.

• IBM Adapts Bitcoin Technology for Smart Contracts • WSJ
• Argentine small businesses turning to bitcoin • FT.com

One story that should have been included above, but missed all the cuts, was

• Bitcoin's forked: chief scientist launches alternative proposal for the currency • The Guardian

For the future of bitcoin, it could turn out to be the most important story of third quarter 2015.

Bitcoin in the News - June 2015

Is that right? This post is dated December 2015, but the title says, 'News - June 2015'. When I first got the idea to blog about bitcoin, I set up a Google News Alert to track the subject. That was at the end of May, when the first news reports didn't make much sense to me. With six months of bitcoin experience behind me, I thought it might be worthwhile to take a second look at the first full month of reports. Would they make more sense now?

Indeed they do. With 30+ days of alerts and Google reporting three bitcoin news items per alert (the alerts include other subjects that interest me), that's nearly 100 news reports to review. Most of the reports weren't particularly interesting -- price movements, scare stories, bitcoin is dead, that sort of thing -- but I short listed ~20 for further review.

The big news of that month was undoubtedly Bitcoin Rules Completed by New York Regulator (nytimes.com), reported by a number of sources. The NYT article started,

With just weeks to go before he steps down, Benjamin M. Lawsky, New York’s top financial regulator, on Wednesday released rules for running a Bitcoin business in the state. In a speech at the BITS Emerging Payments Forum in Washington, Mr. Lawsky announced the final set of rules that govern virtual-currency businesses, concluding a nearly two-year effort to regulate the growing Bitcoin industry. Mr. Lawsky said that the final form of the so-called BitLicense would put in place crucial guidelines for protecting consumers and preventing money laundering.

It doesn't take long to realize that, like oil and water, the ideas behind bitcoin and regulation don't mix well. Later the NYT article noted,

Throughout the process, some Bitcoin advocates have questioned whether Mr. Lawsky was overstepping his boundaries and proposing regulations that could throttle the nascent technology. Critics on the Internet site Reddit satirized the regulator by depicting him atop the Iron Throne from the HBO series “Game of Thrones” with the caption “Hail King Lawsky.”

Note the capitalization of 'Bitcoin' throughout. The full title and address (dfs.ny.gov) of the 44-page PDF is NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES; NEW YORK CODES, RULES AND REGULATIONS; TITLE 23. DEPARTMENT OF FINANCIAL SERVICES; CHAPTER I. REGULATIONS OF THE SUPERINTENDENT OF FINANCIAL SERVICES; PART 200. VIRTUAL CURRENCIES. I downloaded the file and set it aside for a rainy day.

Many of the items served by Google weren't news, but opinion. Sometimes it's hard to tell the difference, as in Bitcoin Rules Divide Wall Street's Digital Currency Community (ibtimes.com).

Bitcoin is facing a coming-of-age moment. The cybercurrency, beloved by techno-libertarians and notorious for financing the Web’s largest black market, will soon come under the formal purview of New York state financial regulators. That’s anathema to bitcoin diehards.

Wall Street is the financial district of New York, which is the financial capital of the USA, which is one of the economic engines of the world, so this story isn't disappearing anytime soon.

Did I really say that scare stories and 'bitcoin is dead' reports aren't particularly interesting? Maybe that's because there are so many of them; for example: Bitcoin isn’t the future of money - it’s either a Ponzi scheme or a pyramid scheme (washingtonpost.com), Lloyd's Report: Bitcoin Will Always Be Risky (coindesk.com), and Matt O'Brien: The scam called Bitcoin (nzherald.co.nz).

No wonder there's so much call for regulation. No one wants to sink hard-earned money into a scam. On the other, positive side of 'the coin', there's a concept of safe haven, as in Greeks are rushing to Bitcoin (money.cnn.com).

With bank doors slammed shut, frantic Greeks are turning to online trading platforms to see if the digital money Bitcoin is a better bet than the euro.

I could go on -- Bitcoin Will Be Money If It Becomes Boring (bloombergview.com), EBA: 51% Attack Remains Bitcoin’s Biggest Problem (coindesk.com), Blockchain Technology Will Transform the Practice of Law (bol.bna.com), and more -- but I'll save that for another time.