Ben Lawsky, NY Regulator working on Bitcoin agrees to do
Blockchain Bites: BitLicense at 5, Lawsky’s Fallacy and
My Letter to /u/BenLawsky about draft NYSCRR title 23
Btc.sx - Bitcoin Wiki
DD on Ripple's Board of Directors
My thoughts on Ben Lawsky's proposal from the point of view of a startup with no funding
EDIT: http://en.wikipedia.org/wiki/Safe_deposit_box When you store money in a safety deposit box essentially, you, the bank and the government have signature on the box. With the government having final say on seizing the funds. EDIT: Are we actually securing virtual currency?- i'm not so sure. Our users backup one of their keys offline and hold the password to decrypt the other one. essentially, THEY are securing it. So, Ninki Wallet enters alpha testing then, this bomb drops:
(n) Virtual Currency Business Activity means the conduct of any one of the following types of activities involving New York or a New York Resident: (1) receiving Virtual Currency for transmission or transmitting the same; (2) securing, storing, holding, or maintaining custody or control of Virtual Currency on behalf of others; (3) buying and selling Virtual Currency as a customer business; (4) performing retail conversion services, including the conversion or exchange of Fiat Currency or other value into Virtual Currency, the conversion or exchange of Virtual Currency into Fiat Currency or other value, or the conversion or exchange of one form of Virtual Currency into another form of Virtual Currency; or (5) controlling, administering, or issuing a Virtual Currency.
In the development of Ninki Wallet we wanted to bring a new level of security and usability to Bitcoin, we decided on a 2 of 3 multi-signature architecture in order to give the user of the wallet ultimate control, provide a layer of services ourselves via countersigning and at the same time limit our exposure in the event of a server hack, ie. even if they get our key, they can't spend our user's funds. Under the definitions proposed by Mr. Lawsky
(2) securing, storing, holding, or maintaining custody or control of Virtual Currency on behalf of others;
I am not 100% sure, but it does appear we fall into the above category, as do other web wallets Storing: we technically store 2 of the 3 private keys but can only access one. The other is AES256 encrypted by the user's password via a salted pbkdf2 and using a CSPRNG to generate the IV for the encryption itself. ie. from our point of view we are storing nothing! Question: Is storing encrypted data the same as storing data? Are we actually storing virtual currency? Securing: We are definitely securing virtual currency Transmitting: We countersign the transactions and broadcast them to the Bitcoin network, we are definitely transmitting. It appears we need a Bitlicense, even if one of our users in Japan sends Bitcoin to a user in New York, we are in breach of these regulations. Given our wallet can send and receive to/from external Bitcoin addresses, how can we possibly ever comply! Someone sets up a wallet account, provides their address and ID, full compliance etc., then someone sends them money from a Bitcoin qt client running in NY which is received in our wallet, we are in breach! So, where to go from here: Option 1: Exclude US IP addresses altogether Users can always use VPN to use our service. All it would take is one incident of a NY user using our site, and we are in breach. Option 2: Try and comply. The demands are way too much for what is essentially a project that aspires to develop into something bigger, we are not in a position to appoint compliance officers etc. I mean, get real! Some of the demands could be automated quite easily, things like reporting transactions over $10,000 involving a NY resident, however we then need to take an address and ID from every user who joins our site- just to prove they don't live in NY! We are not in a position to do that, i mean, think about the logistics there. All kinds of ID from all over the world. Option 3: Give up. Not an option. Also, I guess once these come into effect, blockchain.info and other web wallets, bitgo etc. will be breaking the law as they currently don't ask for addreses/identification. Does anyone have any ideas?
The HAL9000 intends to establish a Distributed Autonomous Organization in the State of New York. Such an organization would, for the purposes of this experiment, and as a part of its charter, seek to facilitate the formation of a decentralized storage, computing, and financial network. Using ethereum or some other sundry Bitcoin 2.0 application layer, HAL's programmers expect that once set into motion, the autonomous nature of the organization will preclude any human involvement. They set it and walk away. HAL's work begins, and advertisements begin to appear on web pages for hosted decentralized storage and computing in the amount of 2GB of storage for free, initially. Once a certain threshold is reached, users can opt to pay the 9000 for even more storage and computing serivces, with bonuses for allowing their own computers to join the network and offer shares of their own computing power and hard drive space to the autonomous, decentralized network. Shares are all paid out by the contract, all paid in Bitcoin, to addresses that may or may not change for every single transaction, depending on the individual users' preference. Users/contributors may opt to hop on or off the network at any time, their contributions programmatically moved to other hosts, when this is done. They then temporarily stop receiving payments. When they sign back on to the anonymous peer-to-peer network, the contract begins again, and payments resume. Mr. Lawsky begins to take note of the HAL's growing presence in the cloud computing and storage sector. He issues a cease and desist letter, and a fine, but then realizes that the HAL has no physical address to mail the letters to. The HAL (and its original programmers) have in fact ceased to exist altogether, and in their place a Distributed Autonomous Organization advertises, transmits, collects, redistributes, and publishes all of the individual Bitcoin transactions (numbering in the billions now, for HAL's service has become quite popular) that make the organization run. As an attempt at compliance with New York State BitLicense requirements, and as a joke amongst the original programmers, the HAL is briefly told alter its charter to publish what records it can to the NYDFS. Such records are sent to a printing company, paid in part by a small portion of the organization's Bitcoin profits. Days later, a couple trucks containing 120 million sheets of paper with individual records of the HAL's previous month's transactions arrive at the NYDFS main offices in lower Manhattan. Except none of this makes any sense to the NYDFS, because all of the records appear to be to non repeating Bitcoin addresses. Lawsky becomes infuriated, and seeks to incriminate the HAL under NY state law, pursuant to relevant BitLicense violations. But there is one problem. The HAL doesn't exist anymore. It stopped being part of the network long ago, all of its functions, now a part of the decentralized autonomous organization, now independently run as a part of a completely decentralized network, spanning some 200 million computers worldwide. And the programmers have long since moved on to more interesting projects and organizations, which they intend to program in mere minutes, just like they did with the original HAL. Open the pod bay doors, Mr. Lawsky
My Letter to /u/BenLawsky about draft NYSCRR title 23, Chapter 1, § 200
Dear Mr Lawsky, When I write these words I can only think of the Charles Dickens book that our current mayor talked about, “A tale of Two Cities.” Your sight as a Columbia student was surely looking toward the south and referring to the other side of the northern valley that separated us where Alexander Hamilton had his grangeas the place where to buy drugs; but this is where I lived for 40 years. I (as Law Professor Roomate, a defendant, a plaintiff and a Juror) learned over time that you, lawyers, are great actors full of incertitude and are in constant need of validation.
We recognize that not everyone in the virtual currency community will be pleased about the prospect of a new regulatory framework.
I must say Bravo to a great performance on redit ! All I can tell my fellow in the Crypto-/whatever you call it/ community is “do not fear”, we will defeat Mr. Lawsky overreach I don’t know if it is faith but last month I found a copy of the “Civil Practice Law and Rules of the State of New York” in my apartment building dumpster. That book is full of valuable information and there is a whole passage called Article 78 – Proceeding against body or officer. Taking a page from my Dominicanos, the Bodegeros, bunch of people against NYCDOH - index 653584/2012, I will use my new learned knowledge to stop your proposal. I am a quick learner and I have nothing to lose. When I was 19, after writing several NSF checks, I learned that ignoring the law cost a lot of money; and briefly a millionaire (on paper) I could only get a used car loan at 22% under rule 78. I just recently took American Airlines - index 104867-2011 to court to keep my Credit History clean; one of their employee stole a credit card number and colluded with a travel agent to give me a ticket that I paid cash. So I do know something about fraud and being the recipient of it. I do resent the industry you are obligated to protect. I learned throughout my various endeavor to read the regulation; as a pilot who landed at JFK on a Cessna 172 in the year after 2001 to prove the point that I knew my FARs, as a Travel Agent Specialist the Montreal Convention; as a NYC cab driver, the TLC rules, as a candidate for Mayor of New York City, the public disclosure rules; as a Rent Regulated tenant leaving at 640 Riverside Drive, my rights. Lawyers, Lawmakers and Computer Programmers work the same way. A reference section in the Law, is a Subroutine in Computer Language. The State Legislature clearly defined your job as Superintendent in FIS §102 :
(a) To encourage, promote and assist banking, insurance and other financial services institutions to effectively and productively locate, operate, employ, grow, remain, and expand in New York state; (b) To establish a modern system of regulation, rule making and adjudication that is responsive to the needs of the banking and insurance industries and to the needs of the state's consumers and residents; (d) To expand the attractiveness and competitiveness of the state charter for banking institutions and to promote the conversion of banks to such status;
There is no doubt where your allegiance is. I agree with you that the other paragraphs might lead you to believe that the Virtual Currency is also under your purview. I will argue it is not. Where does the NYS law allow you to define what Virtual Currency for your draft Section 202.2 ?I do not see it, and I will ask the various Crypto-/Watherever you want to call it/, verify that it isn't there. I can only think that the rules you are applying are the same colloquial expression used by Justice Potter Stewart in Jacobellis v. Ohio 378 U.S. 184 (1964) but even that got replaced by the Miller test. What test are you applying here ? Many economic scholar, to the dismay of many in the Crypto-/whatever you call it/ community, seems to be in agreement that whatever this is, it is not currency because it fails some of its tests; The Webster defines “Virtual” as:
: Very close to being something without actually being it : Existing or occurring on computers or on the Internet.
We are confronted with two opposing ideas Do we need to have a judge try to figure this it out or should we draft something together? Something that we can present to the legislator or the electorate to vote on? Something that could be enshrined in law? Something that could be the showcase of how the democratic process of the 21st century should be? Mr. Lawsky, the crypto-/whatever you want to call it/ community might be small in New York State, but it has the backing of the global village. And as a political activist, I will galvanize that community and I will bring this issue to the people of New York during the election cycle. Please do forgive me if I do not trust you; I still vividly remember Mike Bloomberg sitting on his throne listening for three days his fellow New Yorkers knowing perfectly that he was going to sign the Term Limit extension. In 90 days you will be in the same position and it will be more difficult then to reverse course. I cannot blame you if you are fulfilling your job as defined in FIS §102 (a). At least it does gives me great hope because you are recognizing that our community could be a treat to the community you are legally bound to protect. You are doing your duty. I did write many fighting words and I really do not want to go to court; but I hope that my tirade above give you the unequivocally impression that I will file the paperwork and those below the experience to draft a somewhat decent document. I do believe we could work together but you will first need to remove it from New York State Register and make a true effort to start fresh again. Something this important cannot be done hastefully. After 9/11, I do remember participating in a Online Consultation with many other fellow New Yorker about the future of the World Trade Center. You should look at that interesting experiment as a something to repeat. On a philosophical level, your draft is simply a repeat of A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001) Fourteen years later, we're still at it. An old coworker of mine, Zoe Keating wrote about the whole royalty scheme on her blog Keep at it fellow weirdos & What I want from Internet Radio"Please do not model internet royalties after the broken terrestrial performance rights system" The same way she ask her industry not to model Internet royalties after a known broken system, we ask you not to model the Internet Crypto-/Whatever You call it/ after the broken Banking system. If you feel the urge to smile at the naïveté purposely displayed in this letter, please do so; but I do know enough of the process to cause damage. I hope to have proved it in the various attachments to this reddit document My name is Theo Chino(If you live in Chicago, looking for me, I am not him.)
Worked for a small startup called Cybersource, Inc in San Jose, CA.
and the list goes on; In short, I am a certifiable pain in the assand I know that there are quite a few more in the New York State Bitcoin community; each with their own experience. I beg you not to force me to follow Michael A. Newdow Elk Grove Unified School District v. Newdow, 542 U.S. 1 (2004.) suit. Why not try something novel in politics and in regulation crafting. Something that can renew the people's faith in their government. You took the first step by asking reddit; why not continue ? I ask you to solemnly shred this regulation draft and start fresh. I am willing to tutor you on what Bitcoin is. With my extensive computer knowledge, I am still amazed about how much I have still have to learn; and I am not the only one. Instead of clamping down on our community, you could join it, understand it, and then, after extensive understanding, soul searching, lead the group in drafting a real framework that will really protect the NYS consumer. My heart goes to my next door neighbor who recently sank $15'000 in the Telexfree Scam. What about the interest he still has to pay to the banks for the money he borowed to give it to Telexfree ? or what about the non profits that are bankrolled by the same banks to exert shame on those wanting to declare bankruptcy ? Day in and day out, I listen to those stories ... and each time, it break my heart; and each time, its the same story about their lack of education financial matters; and those are the people you are supposed to protect ! And you clearly don't ! Look at the work of fellow Bitcoiner https://github.com/onenameio/proposed-bitlicense-regulations ... Why not work with us ? Create an hybrid special round table mimicking what then Borough President Scott Stringer did with the Immigration panel in Manhattan. Include folks from New York State as well as the online forums. I do not want to be in the placed in the position to run an illegal business in the city I love and where I grew part of my life. I beg you to reconsider. How many times does the chance to redo the world for the best come in a lifetime ? With the utmost regards, Theo Chino Political Activist, founder of an Ad Hoc mounvement Article78AgainstNYFSD.com Founder of Chino, Ltd, a Delaware corporation Isn't Empire State of Mind an exhilarating song, invigorating both us to go and fight with the mutual belief that will both win. The reality is that only one; it could be you, it could me .... but in the words of my grand father; you leave me no choice than to go for broke.
This is a continuation of Part 1. PSEUDONYMITY Unlike credit card transactions, in which you give your name, Bitcoin transactions are pseudonymous (a pseudonym being an identifier other than your real name). Instead of having your name on your account, you have a public key, which is just a sequence of letters and numbers, like the one below. 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy That's your pseudonym. People who are concerned with privacy view this as an advantage, since it enables you to make payments without revealing your identity. Critics worry that this system facilitates crime, and proponents counter that cash is much better for criminals. Why? Your account may be represented by some random sequence, instead of your name, but all Bitcoin transactions that have ever occurred are available for scrutiny on a public ledger called the blockchain. This data opens up the possibility of investigative methods to which cash is not susceptible. Also, those who are concerned about criminals may be missing the point. It's sort of like censors in the mid-twentieth century who hadn't conceived of the World Wide Web (preventing kids from being exposed to profanity these days is a bit more difficult, to say the least). The thing they're missing is that Bitcoin is only one of many cryptocurrencies, and others (such as zerocoin) are being developed that will provide much greater privacy. File sharing on the internet is another example of how those seeking to overregulate Bitcoin might be missing the point. Early on, we had Napster, which was shut down due to concerns over copyright infringement. The effect of this shutdown appears to have been essentially the opposite of the intended effect. Instead of stopping illegal file sharing, it accelerated the development of file-sharing technologies that were even more difficult to stop. Since demand still existed, Kazaa came to the fore, and now we have BitTorrent. It's "hard to put the genie back in the bottle," as Ben Lawsky, New York's Superintendent of Financial Services, has pointed out. When it comes to reducing crime, overregulation of Bitcoin could lead to an increased resistance to law-enforcement efforts, as we saw with file-sharing, while at the same time taking away from its many benefits. THREATS TO BITCOIN'S SUCCESS When evaluating Bitcoin's chances for success or trying to understand price fluctuations, it's important to keep several key issues in mind. ADOPTION Both merchant and consumer adoption are important, and both have been growing. On the merchant side, we now have large reputable companies accepting Bitcoin, such as Overstock.com, Expedia, and Dish Network. See, for example, the list of companies working with Coinbase. On the consumer side, one way to track growth is to look at the number of bitcoin wallets (wallets are to Bitcoin what accounts are to the traditional banking system). This number has also been growing steadily. The website http://www.bitcoinpulse.com/ is one place to track such things. Another interesting thing to watch will be the MIT Bitcoin Giveaway, in which $100 in bitcoins will be given to every MIT undergraduate in the fall 2014 semester. ROBUSTNESS OF THE TECHNOLOGY One possible threat is that some kind of bug or design flaw will cause the system to crash. The technology has been around since 2009, and Bitcoin has been resilient so far. For example, it survived a distributed denial of service attack early this year. There are a number of design issues to consider, such as scalability, mining centralization, and so forth, but there are a lot of people working on these issues. In fact, Bitcoin is considered by some to be supported by the largest research and development community in the world. Something like 10,000 of the smartest people in the world are working on issues such as scalability and user-friendliness. COMPETING TECHNOLOGIES There is a chance that another technology that is superior to Bitcoin will emerge to kill it. At present, however, Bitcoin is the clear leader among cryptocurrencies, and it becomes more difficult to overtake as time passes, due to the network effect. Already, Bitcoin is supported by a massive amount of infrastructure, in the form of mining equipment, exchanges, startup companies backed by venture capitalists like Andreessen Horowitz, software applications, and so forth. REGULATION There is some chance that governments could slow the growth of the Bitcoin economy, for example by issuing regulations that make it difficult for exchanges to operate. Regulations in China led to a sharp decrease in the price for a time. Many governments have reacted more favorably. In the U.S., the regulatory outlook has been improving. We've seen increased clarity from the IRS and are expecting favorable regulations to come out of New York sometime this month, which may make it easier for exchanges to get established in New York. This could lead to more liquidity and would reduce the risk of shock from one exchange going down. Moreover, the U.S. just sold about 18 million dollars' worth of seized bitcoins in an auction, which provides additional legitimacy to the currency. A FINAL NOTE: SOCIAL AND POLITICAL RAMIFICATIONS For better or worse, one thing large-scale technologies seem to have in common is their unpredictability. Who would have predicted that a social media platform called Twitter with a cute little bird logo would end up facilitating political revolutions throughout the Arab world? FURTHER RESOURCES This article by Marc Andreessen gives a good overview. A nice way to get started is also to just check out bitcoin regularly. The users here range from noobs to developers and Bitcoin entrepreneurs. So, you’ll see more technical talk and in depth discussion than you see in typical media stories, and you can ask if you don’t understand. You can also try the Bitcoin 101 Blackboard Series, which I hear is quite good. For a quick video on the technical aspects of Bitcoin, you can try the video Bitcoin Under the Hood or the shorter, less technical version of this video. For another explanation of the technical underpinnings, you might try the Khan Academy videos. If you're looking to purchase your first bitcoin, then depending on where in the world you live, you might consider getting started with Coinbase. It's reputable and very easy to use. Many people will advise you not to store your coins on a web wallet, but buying a few coins (or a fraction of a coin) on Coinbase is a good way to start as a beginner. Please be aware, though, that this is a new industry and purchasing Bitcoin in any form carries risk, so do your research. I wouldn't want to be the one recommending Coinbase just before someone manages to hack it! I hope that helps! Edit: formatting and typos; added quote from Ben Lawsky.
Other Bitcoin sites. Bitcoin Forum Bitcoin Stack Exchange Bitcoin Magazine. Download Bitcoin Core. Bitcoin Core is the backbone of the Bitcoin network. Almost all Bitcoin wallets rely on Bitcoin Core in one way or another. If you have a fairly powerful computer that is almost always online, you can help the network by running Bitcoin Core. Mr Lawsky seems a rational intelligent man, obviously he is not Mother Theresa. Bitcoin is self regulating at our end, we know that 100%, at their end they can't just ignore it as if it doesn't exists. Let's try and minimize this assumed 'need' for regulations by offering valid points and explanations. Bitcoin "(capitalised) refers to both the open source software used to create the virtual currency and the peer-to-peer network formed as a result; 'bitcoin' (lowercase) refers to the individual units of the virtual currency.". Overview Edit. Developed in 2009 by an anonymous programmer or programmers (using the pseudonym Satoshi Nakamoto), bitcoin is a privately-issued, open source (its Btc.sx is a multinational company that engages in leveraged bitcoin trading and brokerage. The company offers a trading platform in digital currency derivatives such as margin trading to retail traders. It was founded in 2013 and is headquartered in London's Silicon Roundabout. ZDNet reports Btc.sx to be one of the first bitcoin companies that voided the necessity of all other currencies other Btc.sx is a multinational company that engages in leveraged bitcoin trading and brokerage.The company offers a trading platform in digital currency derivatives such as margin trading to retail traders. It was founded in 2013 and is headquartered in London's Silicon Roundabout. ZDNet reports Btc.sx to be one of the first bitcoin companies that voided the necessity of all other currencies other
Ben Lawsky releases BitLicense at the BITS Emerging Payments Forum (full video)
The Bitcoin Group #18 (Live) - Mt. Gox (part III) - Bitcoin ATMs - Paypal - Lawsky Winkdex Pandacoin thebitcoingroup. Loading... Unsubscribe from thebitcoingroup? Cancel Unsubscribe. Elon Musk about Tesla, Bitcoin & Ethereum Giveaway, plans for the future Big interview Live Elon Musk 35,887 watching Live now How The Economic Machine Works by Ray Dalio - Duration: 31:00. Live Bitcoin Liquidation Watch: June 1 2020 IntroToCryptos 206 watching Live now Kayleigh McEnany explains what it will take to stop antifa - Duration: 7:26. bitcoin wallet bitcoin to usd bitcoin wiki bitcoin market bitcoin forum bitcoin difficulty buy bitcoin bitcoin central bitcoin faucet bitcoin pool earn bitcoins bitcoin mining pool bitcoin.org ... Bitcoin Evolution My Real Reviews 💥results And side effects 👇👇 Does Bitcoin Evolution Really Work? Please visit the link for more details https://www.sociall...