DGC – Page 10 – — Covering digital currencies, precious metals and online payments

Bits and Pieces 29thMar13

Julia Dixon on March 29, 2013

The BRICS nations, 43 percent of the world’s population, are working on a new “development bank” set to bypass the World Bank and the IMF.

“There’s a shift in power from the traditional to the emerging world.”

The move is seen as a way for BRICS to protect themselves from the US and Europe’s financial trouble and as a way to increase their global financial influence.

Details here and here.

Russia to ban cash transactions over $10,000

Bitcoin’s market capitalization briefly hits $1Billion!

Texas want’s its gold back from the Fed.

Will FinCEN attempt to regulate virtual currency exchanges outside the US?

Julia Dixon on March 27, 2013

We’ll just have to wait and see, but it looks like they might try. In a ‘guidance’ issued in February last year FinCEN believes that a business may qualify as a Money Services Business “based on its activities within the United States, even if none of its agents, agencies, branches or offices are physically located in the United States.”

DollarVigilante: World’s First Bitcoin ATM Heading to Cyprus

Julia Dixon on March 26, 2013

“While European politicos negotiate in Brussels, deciding the fate of other people’s money in Cyprus, the free market has already moved in to help Cypriots get access to their money via other means.”

The Dollar Vigilante‘s editor-in-chief and Bitcoin ATM CEO, Jeff Berwick, is planning the first Bitcoin ATM. “If we did this now, and we are moving quickly to make this so, we would be the only functioning ATM on the island.”

The planned ATM will allow users to deposit fiat and receive Bitcoin as well as send Bitcoin and receive fiat in return.

Bitcoin & The Banking System: Not Just Different, But Entirely Incompatible

Julia Dixon on March 22, 2013

Commercial banking is a money making endeavour; literally. Sure there’s a complex set of rules, but the short story is commercial banks create money. A button is pressed and congratulations, your loan has been approved and $50k of brand new digital Dollars are now sitting in your bank account.

As you might imagine, creating new money is a very handy little trick for banks. In fact, the commercial banking business model is dependent on the variable nature of national fiat currencies which makes this possible. But this trick only works on fiat currencies, replace the US Dollar with Bitcoins, and the banking system as we know it today ceases to exist.

What FinCEN’s guidance could mean for Bitcoin

Julia Dixon on March 21, 2013

As you would expect the Bitcoin world is abuzz with commentary and speculation about the consequences of the FinCEN paper. Some of the more interesting theories on its implications are below…

FinCEN’s guidance may lead to Bitcoin businesses being required to obtain separate money transmitter licenses in 48 states; a difficult and very expensive task. Payment Source.

Could FinCEN’s target be Bitcoin’s anonymity? Might they target Bitcoin mixing services? The Ümlaut.

The guidance may imply that every person who has ever had any virtual currency and exchanged it for ‘real’ currency can now be considered a money transmitter. The Bitcoin Foundation.

FinCEN Issues “Guidance on Virtual Currencies”

Julia Dixon on March 19, 2013

This guidance was issued to “provide clarity and regulatory certainty for businesses and individuals engaged in an expanding field of financial activity.” Or put another way, FinCEN explains who exactly they intend to regulate.

FinCEN covers their bases here discussing “users, administrators, and exchangers… persons creating, obtaining, distributing, exchanging, accepting or transmitting” virtual currencies, both centralized and de-centralized, e-currencies and e-precious metals.

FinCEN sees those dealing in virtual currencies as their regulatory responsibility
Users, and Bitcoin miners seem to be exempt from regulation for the moment
Buying or selling virtual currencies for “any reason” can make you a money transmitter and subject to FinCEN regulation
Virtual currency dealers are NOT necessarily foreign exchange dealers
FinCEN rules can also apply to those dealing in e-precious metals
However, Prepaid Access rules do NOT apply to virtual currencies

Summary below.

Bank robbery in Cyprus; depositors set to have up to 10% of funds seized

Julia Dixon on March 18, 2013

Like most of Europe, Cyprus and it’s banks are in trouble.

In a bailout deal with the Eurozone Cyprus’s bank account holders are being forced to pay the bill…not troubled bank bond holders, depositors. “The illusion that depositors don’t need to yank their money out of threatened banks because they’ll be protected has been shattered.”

Come Tuesday morning Cyprus’s bank account holders could see their balance shrink as much as 10%.

GoldMoney Reduces Fees

Julia Dixon on March 15, 2013

Storage fees for gold stored at all VIA MAT vaults will be reduced by a third to 0.12% per annum.

Storage fees for silver stored with VIA MAT Switzerland will be reduces by half to 0.49% per annum or 0.39% per annum for more than 50,000 ounces of silver.

Minimum storage fee will be reduced to only 0.001 grams per month for gold, platinum and palladium, and 0.001 ounces per month for silver.

The changes, beginning in April, also include a reduction in metal-to-metal exchange fees and new bar registration & storage options.

Check out all the details here.

Voucher-Safe, a Next Generation Digital Currency – Part III

Julia Dixon on March 13, 2013

Part I looks at the motivation behind Voucher-Safe, the evolution of digital currency and how Voucher-Safe transactions work.

Part II examines the Voucher-Safe economy, trust, security and software.

This final part looks at Voucher-Safe’s interaction with Bitcoin, Issuers and OnionPay.

Bitcoin’s Blockchain Drama

Julia Dixon on March 13, 2013

Last night Bitcoin’s blockchain, the public ledger recording all transactions, forked. For a few hours there were two versions of the blockchain. Big Problem.

The Issue was caused by the 0.8 upgrade. It seems the blocks it was generating were too long for 0.7 to recognize them. The versions diverged with each building a different blockchain.

The problem was quickly spotted and resolved within about 6 hours. However, many exchanges and businesses halted transactions during this time and the Bitcoin exchange rate took a hit. One Bitcoin is now trading at about $43 USD.

The solution was for miners using 0.8 to switch back to 0.7 until a solution for the 0.8 version is found and released. For Bitcoin users the problem is resolved, you can transact with Bitcoin as usual. For further information you can read a play by play of yesterday’s events from The Bitcoin Trader here, or read Bitcoin Magazines review of the situation here.