http://www.zerohedge.com/news/2014-01-14/wells-fargo-americas-largest-bank-market-cap-pushing-offer-bitcoin-services
Wells Fargo, America's Largest Bank By Market Cap, Pushing To Offer Bitcoin Services
Earlier we pointed out that mortgage origination at Wells Fargo - the bank's bread and butter - is crashing at an unprecedented pace, and as per the conference call, Q1 isn't looking any better. Naturally, it stood to reason that the bank would seek alternative business and product lines to supplant the declining revenue it used to generate when it would originate some $100 billion in mortgages every quarter, now half that number. However, not even in our wildest dreams did we predict just what this "alternative" product would be. Because, as the FT reports, Wells Fargo, the largest US bank by market cap, is currently exploring Bitcoin as just that revenue replacement source. Per the FT: "Wells’ anti-money laundering chief, Jim Richards, has launched a group to examine how it might safely offer Bitcoin-related services or banking arrangements to virtual currency entrepreneurs, according to people familiar with the initiative."
More:
Wells chief executive John Stumpf said it was the bank’s practice to examine financial innovations.“We have made enormous investments as a company and as an industry in a payments system that is secure, and we need to be sure we are up to speed with what other things are going on and their risks and rewards,” he said.“We want to make sure we understand what it is, what it does and what it does not . . . . The world is changing and will continue to change. Whether Bitcoin will be a big part of that, who knows?”
As the FT accurately points out, "the difficulty in persuading financial institutions to offer bank accounts has become one of the biggest difficulties facing Bitcoin entrepreneurs in the US." Which of course means it is also a great opportunity for the first entrant, such as what almost certainly appears to be Wells:
Wells’ public-private group, comprising more than a dozen members, was scheduled to meet in San Francisco on Tuesday to debate the security issues surrounding banking and Bitcoin. One possible aim would be to produce a set of anti-money laundering principles for established financial institutions to follow when dealing with virtual currency start-ups, according to a person familiar with the event.
Naturally, the US government's desire to increasingly regulate Bitcoin has pushed it to scramble in clearing up what the legal status of Bitcoin is: "last month the Congressional Research Service circulated a report on virtual currencies for policy makers, setting out a list of areas where the legal and regulatory approach to Bitcoin remains unclear. These range from national tax issues, because Bitcoin profits are not recorded within the traditional financial system, to concerns among individual states."
However, as HSBC and various other criminal banks have shown, if a client is willing to pay for a service, regulations and/or laws is the last thing banks are concerned with, so while the US Congress and Fed dither on how to treat Bitcoin first Wells and soon all other banks will provide some Bitcoin-related services.
Then the only question becomes whether the people who have used Bitcoin in the past precisely because it remained at more than arms length away from the big money centers, will continue to do so now that BTC is for all intents and purposes just another institutionalized asset, if not quite currency just yet.
Get Paid in Bitcoin With BitPay’s New Payroll API
What’s the easiest way to get bitcoins into your wallet? Answer: Get paid in bitcoin. BitPay, the world’s largest digital currency payment processor, now lets employees do that with the beta release of itsBitcoin Payroll API for employers.
“For the longest time the hard question was ‘How do I buy bitcoin?’” said Tony Gallippi, co-founder and CEO of BitPay.
“Now the answer is easy: ‘Ask your employer.’”
American W-2 employees (see below) can elect to have all, or part, of their salary paid in bitcoin for every pay period. It works as a net payroll deduction, meaning taxes and garnishes are removed from an employee’s gross income first, and the bitcoin portion is deducted from take-home pay.
What about the IRS?
This system works better for employees worried about how they might be affected by tax issues.
Skyhook’s Open-Source Bitcoin ATM Will Cost Under $1,000
Published on January 13, 2014 at 14:00 GMT | News, Technology
There are a surprising number of bitcoin ATMs currently on the market for entrepreneurs willing to make an investment.
Companies like Robocoin andLamassu are building and selling ATMs that can exchange government-backed currencies for bitcoin all over the world.
While hardware and software are readily available, the potential roadblock for many of these ATMs is compliance. In many countries the regulation of virtual money transmitters is still something of a grey area.
Additionally, some governments do not appear to be interested in hosting virtual currency ATMs at all. CoinDesk recently reported that Robocoin was shipping its machines over to Hong Kong and Taiwan at the very beginning of this year, however Taiwan decided to block the ATMs soon after.
Building an ATM
Jon Hannis, founder of Skyhook, told CoinDesk that it would only take one large operator to establish itself in the market for the bitcoin ATM floodgates to open.
His effort, the Skyhook ATM, is currently in development and expected to be available soon. The idea behind the machine was to build a low-cost ATM using open-source hardware and software.
Hannis’ Skyhook project can be seen in the video below:
The goal for Skyhook, according to Hannis, is not to make money from the sales of the ATM units. The concept is more community driven, the idea being that if bitcoin ATMs are widely available for people to use, bitcoin adoption will proliferate.
“I was looking at the technology, and was considering getting one of the Lamassu ATMs. I looked into the hardware required for that, and the more I looked into it the more I realized it was very difficult.”
“I kind of gave up for a little while there, but I eventually came across Python drivers that would work on Linux for a specific type of bill acceptor. And so I ordered a few of those to test with. And then I figured, wow, I can get the parts and everything, even a steel case powdercoated, for below $1,000,” he said.
Open Source
The ATM’s retail price will be $999, and Skyhook will be accepting bitcoin as payment. The idea is to open-source the ATMs once they are ready, which is what Hannis and a small group of developers are working to complete.
Everything, including the hardware, can be modified, according to Hannis. “Even as far as opening up the hardware and all the other requirements so people can make their own mistakes, if they want to do that,” Hannis said.
“The reason I haven’t opened it yet is because I want to get production to a point where I’m able to keep up with whatever demand will be there once we decide to start advertising. We have a long list of people [interested]. But just those interested in helping development are getting access to the units right now.”
Keeping prices low
While a Lamassu unit will set you back $5,000, and a Robocoin model nearer the $20,000 mark, the Skyhook ATM team have used low-cost hardware to keep the unit’s price down.
“The brains of it is actually Raspberry Pi. So it’s a lightweight ARM distribution of Linux. It’s a Nexus 7 tethered to a Raspberry Pi,” explained Hannis.
Although price was a key factor for Harris, security was something his team also kept in mind. The unit itself is made of steel and will have mounting capabilities to prevent a smash-and-grab theft. The development team have also put in place software security measures:
“If the power gets cut, it has a RAM disk with the session data. And you have to enter the password when you first power on the unit.”
Hannis’ site for the project, btcpdx.com, is still under construction. But he hopes to go live when the ATM units are available for pre-order. Skyhook itself is currently in a limited beta, open only to developers. However, interested parties are encouraged to email: skyhook@btcpdx.com
“We haven’t taken any pre-order money for these devices. Once we’re at a point that we can ship out within 5 business days, we’ll be officially accepting orders,” Hannis said.
Colorado Marijuana Dispensary Uses Bitcoin to Evade Federal Laws
Published on January 12, 2014 at 08:35 GMT | Companies, Lifestyle, Merchants,Regulation, US & Canada
At least one marijuana dispensary in Colorado has reportedly begun accepting bitcoin.
Colorado’s decision to legalize cannabis has been filling headlines for weeks, and the hype is still going strong.
Investors have been piling up in the marijuana market, ranging from reputable medicinal marijuana companies to highly speculative penny stocks.
The general public seems to be very interested indeed – outside some dispensaries the queues of pot lovers are incredibly large, resembling the lines frequently formed in front of Apple Stores following an iPhone launch.
However, there are a number of problems. Demand has been so strong that many dispensaries are having trouble getting enough marijuana to sell, although this is likely a temporary issue.
Banks playing it safe
A somewhat bigger problem for dispensaries lurks in federal law. They cannot accept credit card payments, so all purchases must be in cash – or bitcoin.
Bloomberg’s Matt Miller believes that this is because banks are simply not willing to enter the market, which is understandable.
Most US credit card companies are headquartered in Delaware rather than Colorado – and cannabis is still very much illegal in Joe Biden’s home state.
Banks and credit card companies are playing it safe. They must comply with federal legislation and although it might be possible to come up with a workaround, they do not appear interested at this point.
Federal law has forced dispensaries to accept cash, and cash only – but bitcoin is a tempting alternative. Anonymity does not matter, since recreational marijuana is legal in Colorado, but with no credit cards in the mix, it is practically the only alternative.
Sales of recreational marijuana in Colorado are reportedly exceeding $5m a week, and banks simply cannot enter the fray until regulators give them the green light.
Drugs, cash and prohibition
Some pundits are comparing Colorado’s decision to legalize marijuana to the demise of the 18thAmendment, which prohibited sales of alcohol in the US back in the roaring twenties.
When the 18th Amendment was enacted, the government lost a fair slice of tax revenue, but the prohibition also loosely coincided with the introduction of federal income tax in 1913. In other words, the government could afford to lose a bit of revenue in order to appease the temperance movement.
The prohibition did not work, as it forced millions of Americans to break the law on a daily basis, becoming scofflaws. It also ushered in a golden era for organized criminals running rum from the Caribbean, whisky from Canada or distilling potentially deadly bathtub ‘moonshine’.
The 18th Amendment was repealed at a time when the US needed as much tax revenue as possible, just as the country was starting to emerge from the Great Depression.
Bitcoin’s critics like to point out that digital currencies are often used for illicit transactions, like buying illegal drugs. This is, of course, the case with practically every currency on the planet.
Drugs are the reason why the largest denomination of the US dollar is the Ben Franklin-themed $100 bill.The Nixon administration discontinued all larger denominations in 1969, arguing that the move would make it more difficult for drug traffickers to transport and launder their profits.
Bitcoin boom
There are about 350 licensed dispensaries in Colorado, and many analysts believe annual marijuana revenue could be as much as $500m, which is relatively high for a population of 5.2 million people (no pun intended).
With as much as half a billion dollars up for grabs, banks will no doubt try to enter the market, but this may not be as easy as it seems. For example, if they get an exemption, the next administration might simply revoke it.
However, Colorado may have a vested interest in getting banks on board. In other words, bitcoin has a chance, but banks will inevitably crack the market sooner or later.
The state wants to raise $70m in tax revenue from cannabis sales this year. However, the figure may end up even higher due to high demand (pun intended).
http://www.zerohedge.com/news/2014-01-12/bitcoin-atms-are-coming-new-york-city
Bitcoin ATMs Are Coming To New York City
With over 1,000 new merchants adopting Bitcoin every week, it is perhaps not surprising that, as NY Post reports, the first Bitcoin ATM is about to debut in New York City. Following success in Canada and Europe, Brooklyn native Willard Ling, 30, is set to introduce the first bitcoin ATM to New York City at the East Village bubble tea shop 'Just Sweet'. State regulators with the Department of Financial Services are expected to hold hearings later this month to discuss how the digital currency should be regulated; and until then, Ling’s bitcoin ATM will sit in his apartment.
Josh Harvey, co-founder of Lamassu, showed off the first bitcoin dispenser at last week’s Consumer Electronics Show and has found quite a bit of interest for the $5,000 machines.
How does the ATM work?
The machine, designed and manufactured in Portugal, looks like a typical deli ATM — butfunctions more like a vending machine. You put in US dollars and receive bitcoins back on your phone.Users first download a bitcoin wallet mobile app — such as BlockChain or Mycelium — and set a password. A black-and-white QR code appears. They press the phone against the ATM’s glass window so it can scan the code, then feed in cash.Presto, the machine sends bitcoins to the phone.
Coming To New York...
Brooklyn native Willard Ling, 30, is set to introduce the first bitcoin ATM to New York City.After scouting locations, he has chosen the East Village bubble tea shop Just Sweet, on 3rd Avenue and 12th Street. He is now in talks with the owners on a rent deal.
But there are still hurdles...
State regulators with the Department of Financial Services are expected to hold hearings later this month to discuss bitcoin and how it should be regulated.Until rules are drawn up, Ling’s bitcoin ATM will sit in his apartment.He thinks New York should get on with it if it wants to still be considered a center of finance.
We would tend to agree since, as Mike Krieger at Liberty Blitzkrieg notes, over 1,000 new merchants are accepting Bitcoin per week (via BitPay alone)...
Earlier today, the Bitcoin news website Coindesk reported that BitPay is adding 1,000 new merchants per week, within an article highlighting the fact that private jet company PrivateFly had just teamed up with the payment processor to accept BTC for its charter flights.
Just to put this into perspective and understand just how staggering this growth it, BitPay only first surpassed 1,000 total merchants in September 2012 and a total of 10,000 in September 2013. At its current growth rate, the company is set to double the milestone of 10,000 merchants every two and a half months. Incredible.
From Coindesk:
“We believe that merchants are starting to see the value that accepting bitcoin can bring to their business,” said BitPay’s Jan Jahosky. “We’re adding merchants at a pace of 1,000 new merchants per week.”“We expect exponential growth in the popularity of bitcoin around the world with both merchants and consumers, and anticipate seeing the biggest growth in China, India, Russia and South America.”
Full article here.
http://www.zerohedge.com/news/2014-01-11/overstocks-first-day-bitcoin-130000-sales-840-transactions-ceo-stunned
Overstock's First Day Of Bitcoin: $130,000 Sales, 840 Transactions, CEO "Stunned"
Submitted by Michael Krieger of Liberty Blitzkrieg blog,
Upon the conclusion of the Senate hearing on Bitcoin this past November, I tweeted that I thought we had entered Phase 2 of the Bitcoin story. A month later, following news that Andreessen Horowitz had led an venture capital investment of $25 million in Coinbase, I wrote:
As I tweeted at the time, I think Bitcoin began phase two of its growth and adoption cycle upon the conclusion of the Senate hearings last month (I suggest reading: My Thoughts on the Bitcoin Hearing).I think phase two will be primarily characterized by two things. More mainstream adoption and ease of use, as well as increasingly large investments by venture capitalists. In the past 24 hours, we have seen evidence of both.
Phase 2 so far is going even more positively than I had expected. Overstock.com accelerated its plans to accept BTC by many months, and the early rollout has been a massive success. The company’s CEO just tweeted:
Morning all,
ReplyDeleteNW good rocket stove link and I really enjoyed reading Nate's update letter too. My rocket stove goal is to make one that fits in the fireplace as a insert first, I do have a pad for a wood stove in the basement maybe eventually I will try to do something with that.
I think you are on to something with the CME and weather link and I'm still visiting Solarham on a regular basis.
Bitcoin's first day on Overstock was interesting, I'm thinking there was some pent up demand by people wanting to "cash in" on their profits. Still decent chunk of change, other retailers must be paying attention. Well not the one I work at :)
Have a great day
Overstock item interesting- i think the number of transactions more so than the dollar amount is the notable news ! I would think other retailers are keeping an eye on bitcoin , while they also try to fix the ongoin point of sale breaches !
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