Bitcoin Foundation Announces Bitcoin 2014 Event in Amsterdam

Pete Rizzo (@pete_rizzo_) | Published on February 25, 2014 at 11:00 GMT | Bitcoin Foundation, News

The Bitcoin Foundation has officially announced “Bitcoin 2014: Building the Digital Economy”, an international exhibition centred on digital currencies.
The event will be held at the Passenger Terminal venue in Amsterdam, The Netherlands, from 15th-17th May. Registration is now open at bitcoin2014.com.
Bitcoin 2014 follows last year’s inaugural event in San Jose, California, which drew more than 1,000 attendees over the course of its three-day run, and covered the future of payments as its overarching topic.
Speakers for this year’s event have not yet been announced, however, attendees in 2013 included principals of Winklevoss Capital Management Cameron and Tyler Winklevoss; Bitcoin Foundation chief scientist Gavin Andresen; and BitPay co-founder and CEO Tony Gallippi, among others.
Jon Matonis, executive director at the Bitcoin Foundation, said this year’s event will be a “must attend” for not only bitcoin industry professionals, but those from the broader financial technology industry as well:

“It’s where we facilitate  the cross-pollination of traditional executives with industry experts and where we collectively envision and practically develop a roadmap to the future.”

The venue

If the choice of venue is any indication, the Bitcoin Foundation anticipates a higher turnout for this year’s proceedings, as Passenger Terminal can accommodate up to 3,000 event visitors.
The official city port for cruise ships, Passenger Terminal is located just outside of the centre of Amsterdam and boasts impressive views of the nearby canals.
The venue is located just 19 minutes from Schiphol Amsterdam Airport by car, and is also accessible by public transportation.
For more information on accessing Passenger Terminal by car and public transport, visit Amsterdam Cruise Port’s guide here.

The itinerary

The official release disclosed only a rough outline of the event’s content, noting that feature presenters will “cast vision for the long-term potential of bitcoin”, while panel discussions will address “immediate challenges”.
Notably, day one will be partly devoted to helping the Bitcoin Foundation further its international partnerships, with related proceedings taking place in the morning and ending at lunch time.
The organisation added its first two international affiliate chapters in December.

Last year’s event

Though the release provides a broad outline for the event, what remains to be seen is how sharply Bitcoin 2014 will differ from its predecessor, which gave representation to recently labeled “fringe elements” of the community, such as libertarians and medical marijuana activists.
This could be a sensitive subject, since January’s bitcoin hearings in New York saw major investors distance themselves from such groups.
Less controversial will likely be the inclusion of corporate booths meant to inform attendees about more basic elements of bitcoin.
While not confirmed, the presence of vendors – such as last year’s lineup of Coinbase, OpenCoin and CoinLab – as well as other major corporate names in bitcoin, can likely be expected.
Passenger Terminal image via Shutterstock

New Banking Task Force to Study Digital Currencies

Jon Southurst (@southtopia) | Published on February 22, 2014 at 10:40 GMT | News, Regulation, US & Canada

The Chairman of the US Senate’s Homeland Security & Governmental Affairs Committee (HSGAC) which investigated digital currencies in November has responded positively to the creation of a new state bankers’ task force to perform its own study into what sort of regulation is necessary.
The new “Emerging Payments Task Force” comes from the Conference of State Bank Supervisors (CSBS), a national meeting group of regulators from all states “dedicated to advancing the state banking system” in the US at a federal level. It aims to study the impacts and potential consumer protection issues arising from new payment method technologies, including bitcoin, among several others.
HSGAC Chairman Senator Tom Carper (D-Del) issued a press statement earlier approving the move, saying he wanted to ensure governments “are adequately protecting consumers and addressing lawbreakers without hindering innovation”.

“That’s why I am encouraged that the Conference of State Bank Supervisors is paying attention to this evolving technology and looking for ways to better coordinate oversight to protect consumers and local communities.
While there is still more work to be done, this is an important step. I encourage federal and state agencies and local entities, including banks, to further their collaboration so consumers and businesses can understand the rules of the road and be well served by them.”

Digital currency stakeholders

The Task Force will speak to a “broad range of stakeholders” in the virtual currency and payments sphere, including state and federal regulators, people in the industry, and other experts. It too believes there must be enough regulation to protect participants but not at the expense of progress.
“State regulators welcome a robust and focused dialogue about the benefits and risks of innovations to payment systems,” said CSBS Chairman and Kentucky Department of Financial Institutions Commissioner Charles A. Vice. “We seek an environment where technological innovation can be developed, but also regulated in a clear manner.”
The Task Force will include state regulators from nine states, including Superintendent of New York State Department of Financial Services Benjamin Lawsky, who oversaw that Department’s recent hearings into digital currencies and who also promotes special ‘BitLicence’ money transmitter regulations specific to such systems.
On its website, the Conference of State Bank Supervisors introduces itself thus:

“Our regulator membership sets us apart from other Washington organizations. Our strength lies in bringing all state banking departments together to present a unified voice in Washington. Through CSBS, state bank regulatory agencies continue to champion a system that offers competitive chartering options and efficient and effective – and local – supervision.”

US Law image via Shutterstock

PayPal Likes Digital Currencies? Yawn

Ryan Galt (@twobitidiot) | Published on February 20, 2014 at 13:40 GMT | Analysis, Merchants, News, Wallets

It’s hard to not get frustrated when everyone starts jumping for joy after a televised interview in which eBay CEO John Donahue told Bloomberg that PayPal is building a digital wallet for multiple cryptocurrencies. Because, of course, it is. The e-payments giant would be silly not to.
Paypal, which is owned by eBay, is the pioneer in digital payments and they already accept over 25 foreign currencies – basically, all of the ones that matter, with the exception of the Chinese RMB.
New digital currencies like bitcoin will likely interact with PayPal’s systems in the same manner as existing fiat currencies – when they are big enough. That’s because, like Coinbase and BitPay, you would expect PayPal to lock-in fiat prices for merchants accepting bitcoin.
They would also be likely to batch transactions ‘off-block chain’ in order to cover transaction risks during the 10-minute confirmation window.

What they said

In the interview, Bloomberg’s Matt Miller told Donahue that he thinks digital payments like bitcoin will rule in the internet commerce of the future and have the potential to make PayPal defunct unless the company starts preparing now.
However, it is absurd to infer that PayPal is useless in the long-term, and neglects the fact that PayPal owns some serious e-commerce real-estate. This is like saying that Amazon, after utterly dominating the book industry, would never be able to move into electronics (or any other category that they have since dominated).
Miller speaks with an irritating certainty about bitcoin. It’s safe to call me a fanatic, but Miller is already in outer space on his way to the moon.
Finally, the idea of the “head start” PayPal would get for spinning off now makes some sense until you consider what he is really saying. This is, that PayPal should essentially spin-off to the highest bidder before it dies an inevitable death. Is Miller suggesting a perverse corporate pump and dump?
Donahue’s no fool. He coolly pointed out there’s nothing that’s holding PayPal back from integrating digital payments today as part of eBay, in fact:

“PayPal is pursuing digital payments and is the leading digital payments alternative in many different environments. So it’s not a matter of eBay holding PayPal back.”

What Donahue is really saying of course is: we will do with bitcoin what we want, when we want to, because we are really, really good at payments.
He doesn’t need to utter the word ‘bitcoin’, because that particular currency would be lower volume for PayPal today than the Russian ruble. Miller is like a dog with a bone though: “Until everyone starts using bitcoin, and then there will be no reason to use PayPal.”
Then Donahue responded with the bombshell:

“[That is just what] PayPal is doing in building a wallet that can hold multiple types of digital currency.”

So, we can assume that, as soon as cryptocurrencies are actually worth PayPal’s time and regulatory uncertainties over the commercial use of cryptocurrencies are removed, the company will integrate them into their system. And will very likely be a force from day one.
It’s really not a matter of if PayPal enters the bitcoin industry, but when and, more importantly, how.

Build or Buy?

PayPal has enormous resources at its disposal in terms of financial and human capital, but the company seems to have a much better option than building their own bitcoin products from the ground up – on the merchant side, at least.
If PayPal could acquire BitPay, it would be a great deal for both parties.
Not just because BitPay is the leading bitcoin payment processing company and that PayPal would gain all their expertise, while dotting the global map with locations that accept the virtual currency overnight.
Or because their joint DBA (‘doing business as’ title) is already flawless – what’s not to like about BitPayPal?
But because BitPay’s business model would compliment, not cannibalize, existing PayPal sales.
A lot of people have the misconception that bitcoin will crush PayPal’s margins. That’s not likely.
PayPal could drop their prices for bitcoin transactions overnight by a full percentage point and make the same gross margins, because the company wouldn’t be exposed to the same interchange or credit card fees.
In addition, PayPal could become an instant bitcoin market maker.

Contrasting cultures

BitPay is really two businesses: a SaaS (software as a service) company that offers merchant services and a ‘long’ hedge fund that benefits from jumps in the price of bitcoin.
Multiple sources have told me the company sits on over 40,000 bitcoins. That’s a lot of exposure to price swings, but it is also a valuable asset.
Ownership of BitPay would allow a company like PayPal to kill two birds with one stone via an acquisition: acquire the talent and IP and seamlessly acquire the necessary underlying currency.
Will this acquisition actually happen, though? Probably not. But the move would make a lot of sense for Paypal.
Ryan Galt is a blogger, entrepreneur and freelance opinion writer for CoinDesk. His opinions do not necessarily reflect those of CoinDesk. You may email him at 2bitidiot@gmail.com, or follow him on twitter @twobitidiot.
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
E-commerce image via Shutterstock