Bitcoin Foundation Continues Legal Offensive With Request for Clarification on Liberty Reserve

The Bitcoin Foundation took a decisive turn in its strategy for defending Bitcoin three weeks ago when the organization wrote its reply to a cease and desist order from California’s Department of Financial Institutions. Rather than meekly asking the government how the nonprofit advocacy group was acting as a money transmitter, the organization delivered a seven-page reply in which it laid out an argument that not only was the organization itself not doing selling bitcoins in any way, but in fact even if the organization was selling bitcoins the act does not constitute money transmission under present California law. After making this argument, the Foundation went so far as to specifically “request that your office issue an opinion that, for the reasons explained above, the sale of a bitcoin is not regulated under the California Money Transmitter Act.” Now, Foundation legal counsel Patrick Murck has made his second move.

Two months ago, Liberty Reserve, an alternative payment processor known for its very weak know-your-customer policies, was shut down and its owners arrested by the United States government. In a press conference following the shutdown, FinCEN attorney Prret Bharara focused heavily on “anonymity” as a major reason behind Liberty Reserve’s shutdown, and weeks later a FinCEN Notice of Finding criticized the entire category of irreversible digital payment systems. “The fact that transactions are irrevocable, meaning that they cannot be reversed or refunded in the event of fraud, makes it a highly desirable system for criminal use and a highly problematic one for any legitimate payment functions. Revocability protects users and merchants from fraud and is a common feature of legitimate payment systems,” the report claimed. Many have taken these words as a sign that, since the currency has a considerably degree of anonymity and is almost completely irreversible, Bitcoin is next. FinCEN director Jennifer Shasky Calvery came out to reassure Bitcoin users and investors, saying that legitimate businesses that follow the relevant laws “have nothing to fear from Treasury”, but even still many in the digital payments space seek a stronger reassurance.

It is under this background that Murck has sent another request for clarification, this time to US federal regulator FinCEN itself. The subject of the letter is a notice of proposed rulemaking announcing a set of steps that FinCEN intends to take in order to shut down Liberty Reserve transactions around the world. The actions are targeted around Liberty Reserve itself; the first action listed is that “Section 1010.660(b)(1) of the proposed rule imposing the special measure would prohibit covered financial institutions from establishing, maintaining, administering, or managing in the United States any correspondent account for or on behalf of a foreign bank if such correspondent account is being used to process transactions involving Liberty Reserve, including any of its branches, offices or subsidiaries.” However, especially in the context of the Notice of Finding, the Bitcoin Foundattion is concerned that “although the special measures contemplated by the Proposed Rule are explicitly targeted at Liberty Reserve, many of the statements in the Proposed Rule and Finding could be misread to apply more broadly to transactions involving virtual currencies generally.”
The core arguments that the letter makes are the following:

• Maintaining consistent definitions is important. Quoting the letter: “For example, the Finding describes Liberty Reserve as a “web-based money transfer system, or ‘virtual currency.’” In doing so, FinCEN infuses virtualcurrency with a new definition – namely, a web-based money transfer system. This definition of virtual currency is inconsistent with the definition FinCEN issued in its March 18, 2013Guidance … By equating virtual currency with “web-based money transfer system” in the Finding and the Proposed Rule, FinCEN risks muddying the analysis required byits own Guidance.” The letter instead recommends that FinCEN use its own language from its own March 18 guidance, perhaps calling Liberty Reserve the administrator of a centralized virtual currency system.
• Anonymity is not necessarily criminal. Once again from the letter: “The Finding and Proposed Rule broadly state that ‘Liberty Reserve’s system is structured so as to facilitate money laundering and other criminal activity,’ and cite, among other things, theanonymity of the system as evidence of that illicit structure. The Bitcoin Foundation is concerned about the broad use of the term ‘anonymous’ and about FinCEN’s generalcharacterization that all ‘anonymity’ is designed to facilitate money laundering and other criminal activity.” Here, the foundation is taking a brave turn, not taking the usual strategy of defending Bitcoin by claiming that it is not anonymous, but rather arguing that even anonymity itself is not necessarily criminal. This is a highly beneficial strategy for Bitcoin advocacy going forward; if Bitcoin becomes more anonymous in practice through developments like Zerocoin or decentralized mixers, the defense that “Bitcoin isn’t that bad” may not cut it anymore. Questioning what is bad in the first place, on the other hand, stands a solid chance no matter what the changes in technology.
• Neither is irreversibility. Contrary to what the Notice of Finding implied, irreversibility is a valuable feature for a payment system to have and, as Jon Matonis argues, it is in fact necessary for a number of applications. Matonis (not quoted in the letter) writes: “As an industry that suffered a high degree of customer disputes, online gambling is instructive because when certain customers lost in the casino and ‘changed their mind,’ it became necessary for these merchants to accept only payment methods with finality.”

The letter concludes: “The Bitcoin Foundation supports a strong and vibrant financial system in the United States and isnot objecting to the imposition of special measures in this particular case. At the same time, the Bitcoin Foundation urges FinCEN to be precise when it describes the growing virtual currency industry, and when issuing findings and making rules affecting the industry, to avoid any inadvertent implication that all virtual currency related businesses (including compliant ones) are somehow more predisposed to facilitate money laundering than other money services businesses.” All in all, this is an example of the solid Bitcoin advocacy that the foundation was created for. Rather than simply acting as a sitting duck waiting for it and its member businesses to be sued, the foundation is actively, and at the same time respectfully, seeking to engage in dialogue with federal regulators and actually turn digital currency regulation in a more favorable direction. It is only recently that Jon Matonis was named the new executive director of the Bitcoin Foundation; perhaps under his influence we will see more steps like this in the months to come.

Source : http://bitcoinmagazine.com

Bitcoin developer Jeff Garzik on altcoins, ASICs and bitcoin usability

Last week, CoinDesk caught up with bitcoin core developer Jeff Garzik about his perspective on Satoshi Nakamoto and the future of Bitcoin. This week, we reveal Garzik’s thoughts on alternative digital currencies, ASIC miners, and getting everyday users on board for bitcoin.

On altcoins

Some people do like the idea of including more features in the native protocol. Projects like Zerocoin have been looking for altcurrencies to adopt their technology for making a cryptocurrency truly anonymous, and when it comes to math-based currencies, Garzik is all for diversity. He’s happy to see the proliferation of other coins.

“It’s a fantastically good thing,” he says. “Experimentation is wonderful. It’s been disappointing that the overwhelming majority of altcoins have been pump and dumps or premine-type schemes.” he calls that the first generation of coins, but thinks that the landscape for altcoins is maturing.

The second generation is far more interesting, with fewer “lazy clones” and more experimentation, he argues, singling out PPCoin for its work with proof of stake, and Freicoin for its exploration of demurrage.
But, apparently, all of this has its place – and it’s underneath bitcoin. “I don’t think it’s likely that the second generation will produce any useful, viable long-term cryptocurrency, but I do think that all this experimentation will absolutely inform the Bitcoin ecosystem, and any features or really novel developments can likely just be incorporated into Bitcoin itself.” That may not sit well with the creators of other currencies, some of whom hope to establish a greater foothold in the area.

He welcomes diversity within the bitcoin community, though, pointing to other bitcoin clients such as Bitcoinj. “I wrote two – one in python, called pynode, and one in the C language, called picocoin. Gavin and I think that from that perspective it’s healthy. We’re trying to avoid a software monoculture where everyone is running the same version of the software.”

There’s a caveat to that, however. He calls Bitcoin the first protocol to solve the distributed consensus problem, and every alternative client must follow the Bitcoin protocol rules, he says, including any bugs that may have been in the Satoshi reference implementation. “If you don’t, you introduce fork risk. So it’s a real balance of engineering benefits and costs.”

Why ASICs will rule the world – and that’s no bad thing

All of the bitcoin clients that mine have to run on something, and many are starting to use ASICs.

“It’s fascinating to watch the progression of mining technology,” says Garzik, who was among the first to take delivery of an Avalon ASIC miner, and now runs it at home. He says his mining activity is more for interest, and to participate in the day-to-day operation of the network, than for profit.

Some believe that the evolution of ASICs makes the market less democratic, because it makes GPU miners less effective, and increases the cost of basic mining power. He disagrees.

“During the GPU era of mining, it was one company, ATI, which was primarily the supplier of all the mining hardware. If there was an ATI supply disruption, or a pricing problem, then that directly affected GPU mining profits,” he says. “With ASICs there are more companies selling chips, and the barrier to entry of making these chips are very low.”

That’s all relative, of course. KnCMiner has told CoinDesk that it expects its Non-Recurring Engineering (NRE) costs to be at least $3.5m. But for many large firms, that is indeed a low entry point to begin making the equivalent of a printing press for digital currency.

The point is that SHA-256 is easy to do. “Any graduate student could do it, and you have any number of companies that are competing to provide mining chips,” he maintains, adding that we’ll see more upstarts selling ASICs as the market fills out.

The more ASIC mining power the network gets, the better off it will be, Garzik adds. “You have a lot of mining power that’s being spread around many miners across the entire world,” he says, arguing that it decentralizes the mining process. “More mining power makes it more difficult to reverse bitcoin transactions. The more widely spread that is, the more difficult it is to shut down bitcoin itself.”

So no, the development of an ASIC-enabled elite isn’t an existential threat to the bitcoin network, says Garzik – quite the opposite, in fact. What does worry him is cultural inertia. People understand and trust conventional fiat currency, he points out. Part of the bitcoin community’s job is to teach them about the alternative, and why they should consider using it.

Getting everyday users on board

“Bitcoin activists and evangelists like me have a bunch of answers. It’s borderless, it’s irreversible, and there’s low risk of fraud,” he says. “Nonetheless, it’s difficult to get on the radar of your average person.”
Usability is a key issue here. Bitcoin addresses, for example, work very well technically, but can be confusing to users and also have some security vulnerabilities. There is, however, There’s a payment protocol in the works to make the whole thing easier.

“The payment protocol that Gavin [Andresen] and others have been working on uses public key cryptography,” he says. Users will use digital certificates to exchange bitcoins, in a similar way to how websites validate websites.”

Similarly, some enterprising hardware engineers are putting together physical hardware solutions to help with the distribution of bitcoin, Garzik points out. “That’s going to do a lot to bridge that usability hurdle. Bitcoin wallets on the smartphone are almost already there in terms of being a killer app.” BitPay employees pay each other back when someone makes a food run, by pointing their phones at each other and scanning QR codes.

It’s unsurprising that Garzik’s vision for Bitcoin is a grandiose one. He wants it to be a first-class, mainstream currency in its own right. The comparisons he draws speak for themselves.

“It took the nations of the Eurozone ten years or so to deploy the Euro, and that was introducing an entirely new currency,” he says. “We’re trying to do the same thing with bitcoin. We’re trying to roll out a currency from scratch. And as the experience with the Euro showed, it takes an incredible amount of time to change over POS systems and cash registers, to train end of line merchant workers with this new payment system.”

The currency came from small beginnings, but Garzik believes that this is just the start. If his vision comes true, then maybe bitcoin could be as big as the Euro. Only, you know, without centralized banking and dysfunctional national economies gumming up the works.

Source : http://www.coindesk.com

The Genesis Block - 2013 Mid-Year Bitcoin Review

 This report from The Genesis Block (@TheGenesisBlock) covers the major events from the first half of 2013 and what to look out for in the months ahead.  Excerpts:
"The one outlier in the global bitcoin trading story so far in 2013 has been CNY, with a meteoric rise from near obscurity at 1% in January to more than 6% of global volume at the end of June. This was largely attributable to a brief documentary about bitcoin aired on state-run CCTV."
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"Volatility has presented a number of exceptional arbitrage opportunities for traders. As macro events and news from different exchanges create unique trading dynamics, the price differential across exchanges can become quite significant."
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"As a smallmarket, bitcoin is still heavily influenced by individual micro events, but traders are clearly paying attention to major macro headlines as well."
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"We are also aware of three VC-backed exchanges currently in development."
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"The initial ASICMiner IPO was in August 2012 [raised] over $100,000 for initial ASIC production. As of this writing, shares are trading at 4.25 BTC each, providing initial shareholders a 4,250% return in 8 months and netting IPO investors millions of dollars in gains."
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"The US has unquestionably been the least accommodating with regards to virtual currency regulations. Throughout the rest of the globe, government responses have ranged from deferment to outright encouragement so far this year."
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"We expect more and larger retail players to enter the space, helping the value of the market continue to grow steadily."

Source : http://bitcoinnews.com/

Get Bitcoins Free

 



If you’re looking to get free Bitcoins, we have the information that you want. We suggest you bookmark this page so that you can visit it daily, or even more frequently. While our list of websites that provide free Bitcoins is not the longest one available, we believe it is the best. Why isn’t it the longest? Simple. There are some sites we visited that do indeed give away Bitcoins for free, but while we were on those sites our security systems blocked attempts to download suspicious software onto our computer. We do not want to include any questionable websites in our list.

Additionally, there were some sites that claimed to offer free Bitcoins, but every time we visited those sites, they were “out of Bitcoins at the moment.” It’s one thing to advertise free Bitcoins, it is another to actually give them away so that they are securely in your wallet.

Some of the sites listed below are Bitcoin Faucets, which are basically sites that will provide you with free Bitcoins without requiring you to perform any action other than pasting your wallet address and verifying you’re a person by filling out a captcha. Other sites will require you to perform a simple action, such as visit a web page for a specified period of time (typically 3 to 5 minutes), watch a video, fill in a survey, or vote yes or no on a question.

We’ve provided the list below with our favorite sites listed first. When you use the link we provide, the site will open in another window. Simply follow the instructions at each site to collect your free Bitcoins. Some sites will send the Bitcoins to your wallet very quickly, while others will only send them once per day. The amount you can expect to receive from each site varies from 0.000001 Bitcoin all the way up to 0.1 Bitcoin. Remember, it’s a good idea to bookmark or save this page as a favorite so that you can use this handy list every day.

Free Bitcoin List

http://bitcointree.net
http://bitcoinforest.com
http://www.virtualfaucet.com/
http://www.srbitcoin.com/
http://www.btc4you.com/
http://www.freebitcoinlottery.com/

 

How to Get Bitcoin?

Bitcoin wallets & addresses

 

A user can have one or more bitcoin addresses from which bitcoins are sent or received using either a website or downloaded software often called a "wallet" like a digital wallet. Users can obtain new bitcoin addresses as needed. Many bitcoin services provide addresses tied to a user's individual account to hold funds on the user's behalf.

Specifically, a bitcoin address is a cryptographic public key–– human-readable strings of numbers and letters around 33 characters in length, beginning with the digit 1 or 3, as in the example of 175tWpb8K1S7NmH4Zx6rewF9WQrcZv245W. The matching private key is often stored in a digital wallet or mobile device and protected by a password or other means of authentication. Each bitcoin transaction is signed by the private key of the user initiating the transaction.

Various vendors offer banknotes and coins denominated in bitcoins; what is sold is really a bitcoin private key as part of the coin or banknote. Usually, a seal has to be broken to access the key, while the receiving address remains visible on the outside so that the balance can be verified.

Payment network & mining

 

The Bitcoin network protocol operates to provide solutions to the problems associated with creating a decentralized currency and a peer-to-peer payment network. Key among them is the use of a blockchain to achieve consensus and to solve the double-spending problem.

A bitcoin is defined by a chain of digitally-signed transactions that began with its creation as a block reward through bitcoin mining. Each owner transfers bitcoins to the next by digitally signing them over to the next owner in a Bitcoin transaction. A payee can then verify each previous transaction to verify the chain of ownership.

The network timestamps transactions by including them in blocks that form an ongoing chain called the blockchain. Such blocks cannot be changed without redoing the work that was required to create each block since the modified block. The longest chain serves not only as proof of the sequence of events but also records that this sequence of events was verified by a majority of the Bitcoin network's computing power. As long as a majority of computing power is controlled by nodes that are not cooperating to attack the network, they will generate the longest chain of records and outpace attackers.

The network itself requires minimal structure to share transactions. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will. Upon reconnection, a node will download and verify new blocks from other nodes to complete its local copy of the blockchain.

Source : Wikipedia

What is Bitcoin?

Bitcoin (sign: ; code: BTC) is a cryptocurrency where the creation and transfer of bitcoins is based on an open-source cryptographic protocol that is independent of any central authority. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution. The concept was introduced in a 2008 paper by pseudonymous developer Satoshi Nakamoto, who called it a peer-to-peer, electronic cash system.


The processing of Bitcoin transactions is secured by servers called bitcoin miners. These servers communicate over an internet-based network and confirm transactions by adding them to a ledger which is updated and archived periodically using peer-to-peer filesharing technology.^[2] In addition to archiving transactions, each new ledger update creates some newly minted bitcoins. The number of new bitcoins created in each update is halved every 4 years until the year 2140 when this number will round down to zero. At that time no more bitcoins will be added into circulation and the total number of bitcoins will have reached a maximum of 21 million bitcoins. To accommodate this limit, each bitcoin is subdivided down to eight decimal places; forming 100 million smaller units called satoshis per bitcoin.

Bitcoin is accepted in trade by merchants and individuals in many parts of the world. Like other currencies, illicit drug and gambling transactions constitute some of its commercial usage. Although the bitcoin is promoted as a digital currency, many commentators have criticized the bitcoin's volatile exchange rate, relatively inflexible supply, and minimal use in trade.







a History of Bitcoin

Bitcoin is the first practical implementation of a cryptocurrency, a form of money that uses cryptography to control its creation and management, rather than relying on central authorities. However, not all of the technologies and concepts that make up Bitcoin are new; Satoshi Nakamoto integrated many existing ideas from the cypherpunk community when creating Bitcoin.

Timeline

• 2008–2009
  • In 2008, Satoshi Nakamoto posted a paper describing the Bitcoin protocol on the internet.^{[1][10][21][22]}
  • In 2009, the Bitcoin network came into existence with the release of the first open source Bitcoin client and the issuance of the first bitcoins.

• 2010
  • The prices for the first bitcoin transactions were negotiated by individuals on the bitcointalk forums. One notable transaction involved a 10,000 BTC pizza.
  • On 6 August, a major vulnerability in the Bitcoin protocol was spotted. Transactions weren't properly verified before they were included in the transaction log or "block chain" which allowed for users to bypass Bitcoin's economic restrictions and create an indefinite number of bitcoins.
  • On 15 August, the major vulnerability was exploited. Over 184 billion bitcoins were generated in a transaction, and sent to two addresses on the network. Within hours, the transaction was spotted and erased from the transaction log after the bug was fixed and the network forked to an updated version of the Bitcoin protocol. This was the only major security flaw found and exploited in Bitcoin's history.

• 2011–2012
  • In June 2011, Wikileaks and other organizations began to accept the bitcoin for donations. The Electronic Frontier Foundation temporarily suspended bitcoin acceptance, citing concerns about a lack of legal precedent about new currency systems, and that they "generally don't endorse any type of product or service.". The EFF's decision was changed in 17 May 2013.
  • In late-2011, the exchange rate of the bitcoin crashed from over $30 in June to below $2 in October.
  • In January 2012, Bitcoin was featured as the main subject within a fictionalized trial on the CBS legal drama The Good Wife in the third season episode "Bitcoin for Dummies". The host of CNBC's Mad Money, Jim Cramer, played himself in a courtroom scene where he testifies that he doesn’t consider bitcoin a true currency, saying “There’s no central bank to regulate it; it’s digital and functions completely peer to peer.”
  • In October 2012, BitPay reported having over 1000 merchants accepting Bitcoin under its payment processing service.

2013

• February
  • The Bitcoin-based payment processor Coinbase reported selling $1 million in bitcoins in a single month at over $22 per bitcoin.
  • The Internet Archive announced that it is ready to accept donations as bitcoins and that it intends to give employees the option to receive portions of their salaries in Bitcoin currency.
• March
  • The Bitcoin transaction log or "block chain" temporarily forked into two independent logs with differing rules on how transactions could be accepted. The Mt.Gox exchange briefly halted Bitcoin deposits and the exchange rate briefly dipped by 23% to $37 as the event occurred before recovering to previous level of approximately $48 in the following hours.
  • In the US, the Financial Crimes Enforcement Network (FinCEN) established regulatory guidelines for "decentralized virtual currencies" such as Bitcoin, classifying American "Bitcoin miners" who sell their generated bitcoins as Money Service Businesses (or MSBs), that may be subject to registration and other legal obligations.
• April
  • Payment processor BitInstant and Mt.Gox experienced processing delays due to insufficient capacity.
  • On 10 April, the bitcoin exchange rate dropped from $266 to $76 before returning to $160 within six hours.
  • Bitcoin gained greater recognition when services such as OkCupid and Foodler began accepting it for payment.
• May
  • On 15 May 2013, the US authorities seized accounts associated with Mt. Gox after discovering that it had not registered as a money transmitter with FinCEN in the US.
• July
  • A project underway in Kenya is linking Bitcoin with M-Pesa, a popular mobile payments system, in an experiment designed to spur innovative payments in Africa.

Source : wikipedia

Cara Mendapatkan Bitcoin Gratis

Salam Agan-Sista, setelah di postingan pertama, ane kasih tau apa itu bitcoin, Sekarang ane akan membagikan cara mendapatkan bitcoin secara GRATIS, tetapi sebelum mendapatkan Bitcoin, agan-sista harus memiliki wallet tempat menyimpan Bitcoin yang anda dapatkan. Untuk membuat wallet bitcoin, silahkan ikuti petunjuk dibawah ini :

• Buka situs Blockchain atau klik DISINI.
• Klik Wallet
• Jika mau, anda dapat merubah bahasa dengan bahasa yang anda inginkan.
• Klik Start A New Wallet dan anda akan masuk pada halaman form pendaftaran.
• Untuk mengisi form pendaftaran silahkan mengikuti langkah-langkahnya sebagai berikut :

1. Alias : dapat di isi dengan nama agan-sista atau text lainnya yang berguna untuk membantu login ke wallet anda.
2. Password : password anda harus berisi minimal 10 karakter dengan gabungan huruf, angka dan simbol. Ingat passwor yang anda buat, karena tidak akan ada fitur reset password yang akhirnya dapat membuat anda kehilangan akun wallet anda.
3. Captcha : isi captcha sesuai dengan karakter yang muncul diatasnya.
4. Jika sudah selesai, klik Continue dan anda dapat login ke wallet yang sudah anda buat tadi.

• Setelah anda login ke wallet yang telah dibuat tadi, anda akan diberikan alamat wallet yang menjadi sarana untuk menerima dan mengirim bitcoin. Alamat wallet anda berupa gabungan angka dan hutuf contohnya : 19ZZ8DZsb5qhtchuKPZWET7Uj8rDoj4KgmB.

Jika anda sudah memiliki wallet bitcoin, sekarang saatnya agan-sista memburu bitcoin gratis. caranya macem-macem gan, ada yang hanya dengan masukin address bitcoin, ada yang nyuruh ngeklick iklan, ada yang nyuruh buka video, dan macem-macem. Nanti kalau agan udah masuk situsnya, agan turutin aja apa maunya, biar puas. hehe.. pasti pundi-pundi Bitcoin agan akan bertambah.

http://bitcointree.net
http://bitcoinforest.com
http://www.virtualfaucet.com/
http://www.srbitcoin.com/
http://www.btc4you.com/
http://www.freebitcoinlottery.com/

Nah, agan coba aja dulu, tar kalo udah berhasil, ane kasih link yang lebih banyak lagi..