Chamath Palihapitiya: Bitcoin is Moving Past ‘Amateur Hour’

Carrie Kirby (@carriekirby) | Published on March 26, 2014 at 21:52 GMT | Companies, Events, Investors, News

In a wide-ranging, pointedly honest and often funny on-stage interview with Bloomberg BusinessWeek writer Brad Stone at CoinSummit San Francisco on Wednesday, 26th March, venture capitalist and former Facebook and AOL executive Chamath Palihapitiya reflected on the future of bitcoin and on the changes the bitcoin ecosystem is undergoing right now.

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Though he had just flown in from Toronto for day two of CoinSummit San Francisco, Chamath Palihapitiya immediately opened his fireside chat on 26th March with a quote that arguably summed up the feeling of the conference, saying “I feel like I’ve traveled to Mecca” in a quip that garnered laughs from the packed crowd.

BusinessWeek’s Brad Stone followed by asking Palihapitiya to bring the audience up to speed on his recent investments, and he quickly illustrated that he remains bullish on bitcoin, stating his belief that “everyone in the world should have 1% of their assets in bitcoin”.

Palihapitiya took big topics head on out of the gate, dismissing all other digital currencies by emphasizing that his previous statement referred only to bitcoin, not other alternative currencies, and stating that the Internal Revenue Service (IRS) guidance issued on 25th March was in fact a boon not just for the industry, but for the general investing public.

“For anyone who thinks this is a bad thing, it’s actually a really good thing. There has been tax policy that has been exploited by rich people for years that have allowed us to wash taxes on anything we own.”

Has-beens and also-rans

The troubles of Mt.Gox and several other recently failed bitcoin companies are “awesome for bitcoin,” Palihapitiya said.

“We’ve got to flush out all the has-beens and also-rans. There’s a bunch of amateur hour bullshit in the bitcoin ecosystem.”

“They will get replaced by a more systematic approach to problem-solving, the right checks and balances, the right regulatory participation,” he said. ”The fact that the price stabilized after is even more important, because it shows the growing maturity of the bitcoin market,” Palihapitiya added.
CoinSummit, has a more business-focused mood than some past bitcoin events, with a notable absence of panels on libertarianism or floating extra-national communities.
This shift is exactly what bitcoin needs, Palihapitiya asserted.

“All of the folks that want to have a libertarian bent or some other political agenda and strap it in on top of bitcoin – it’s really bad for us. You need to replace them with people who have a technological motive or a financial motive.”

Bitcoin’s apolitical agenda

Palihapitiya made it clear that this is an important point to him, returning to it when asked about his biggest worries as a bitcoin investor:

“We need to divorce ourselves from all the political rhetoric. I don’t think this is meant to be a mechanism to evade taxes, a mechanism to push back on government structure.
If we can drop the ego-driven part of wanting to thumb our nose at the establishment, then what we’re left with is actually a Trojan horse that replaces the establishment. And that’s good enough.”

What he is not concerned about is the use of bitcoin for illicit transactions, like on the now-defunct Silk Road marketplace.
In the future, Palihapitiya said, bitcoin will be more crime- and terrorism-resistant than cash, because it will likely get to a place where bitcoin addresses are associated with real names – or even Facebook accounts. But even right now, US dollars are used for more illicit purposes than bitcoins, he stated.

“The CIA drops bushels full of money at the feet of Afghan warlords. What do you think they’re doing with that, buying bread and fucking cheese? That’s not what they’re doing with it. They’re harvesting heroin and killing people.”

Golden State Warrior

Palihapitya swore freely during his interview, usually drawing chuckles from a clearly admiring crowd. Stone jokingly asked when Palihapitiya, a partial owner of the NBA franchise the Golden State Warriors, would start accepting bitcoin for ticket sales.
“We’re working on a stadium, and are about to plow three-quarters of a billion dollars into the San Francisco economy. … As soon as we figure that out, we’ll talk to BitPay,” he said.
Becoming more serious, Palihapitiya said that big retailers such as Walmart will eventually want to accept bitcoin because it will cut their credit card processing costs and provide customers with fraud protection.
Here are some of the other topics Palihapitiya touched on in his lively conversation with Stone.
On Mark Zuckerberg’s opinion of bitcoin:
“I think he thinks it’s cool. I don’t think they’re going to do anything in the near term. I’m speculating. Here’s a  great thing that would be awesome, is if Facebook figured out how to partner or launch a secure wallet, and then how to apply their identity on top of it to create a whitespace within the blockchain so that transactions, buying between people who were willing to be named, have some mechanism to have an easier way of doing things, acknowledged by governments and tax authorities, etc. That would be a game changer for bitcoin overnight.”
On the true identity of Satoshi Nakamoto:
“Who cares? The only reason to care is because that person or group of people should be celebrated. … We’re all going to mythologize this now to kingdom come. It’s almost better if this person or group of people never became public, because then it’s really all of ours – and that’s what we want.”
On why he advocates for everyone owning at least a little bitcoin:
“When we look back after 30 years and these things are at $1m (dollars) a coin, I think it would be better if many people had shared in that appreciation instead of a few. That’s why I’m so evangelical about it. You can own one bitcoin, you can own five, you can own a few satoshi. Everyone should just have a little taste of it.”
Images via CoinDesk

Australian Manufacturer Debuts First Cashless Bitcoin ATM

Jon Southurst (@southtopia) | Published on March 24, 2014 at 11:53 GMT | Bitcoin ATM, Companies, News, Startups

An Australian company says it has produced one of bitcoin’s holy grails: a cashless ATM that allows users to buy bitcoins using a credit card, and sell bitcoins via a direct deposit to their bank account.
The first fully functional Diamond Circle ATM arrived from its manufacturer in Brisbane this week. Unlike competing ATMs and vending machines that rely on QR codes and cash, Diamond Circle’s solution is based on near-field communication (NFC) technology with paper receipt backups.
This unique approach is the brainchild of CEO Stephen Rowlison, a seasoned FinTech (financial technology) entrepreneur with 30 years of IT experience in Australia, Asia and the US. Before founding Diamond Circle, Rowlison was working on various projects developing NFC payment and loyalty card systems for retailers. He said:

“I was interested in NFC technology and payments, but just needed a unit of transfer. After learning about bitcoin, I figured I could combine the NFC chip with the ATM idea.”

He added: “What I’ve really done is just brought together two existing technologies: contactless NFC and BTC. QR code payments have been outlawed in China and have no inbuilt card security, which is why using contactless technology makes so much sense.”

Wallet tags

Although Rowlison is exploring other NFC devices for his ATMs, he has decided to focus on a ‘wallet tag’ for now, which is a small disc that can be used as a pendant or keychain.

“It’s got the same smarts as banking technology except we mandated a Personal Identification Number for all tags that are registered online.”

It’s the same contactless technology being deployed in some countries by Visa’s PayWave and Mastercard’s PayPass. Australia’s point-of-sale debit card network EFTPOS, which uses PC compatible devices, has also begun using NFC chips.

This all means Diamond Circle will be in a dominant position to launch its second phase: POS integration that will enable retail merchants to accept payment in bitcoin using devices they already have.
The ‘wallet tag’ devices function as cold storage wallets that communicate with the cashless ATMs. Customers also have the option to print out paper receipts and use them with more traditional smartphone or desktop wallet clients. The paper receipt can also be used as a backup for wallet tag users.
Diamond Circle customers can use the NFC ‘wallet tag’ device with a number of smartphones to check bitcoin balances and broadcast their public address.

More secure storage

Diamond Circle provides customers a secure way to store and use bitcoins. The company does not provide online bitcoin wallets that are often susceptible to theft. Diamond Circle wallets and private keys are stored only on the wallet tag devices and paper receipt backups.
“Even if we get hacked, there’s nothing to take,” Rowlison said.
Diamond Circle will save a fortune by not handling physical cash. Once a machine needs to handle paper (or in Australia’s case, polymer) dollar bills it reduces the value proposition by increasing the costs of its production, materials and maintenance.
He insisted the technology itself was a lesser challenge, since it uses mostly off the shelf components that have already been tested in other payment systems.

“Once we ironed out the problems of bitcoin, the value proposition for consumers and the entire supply chain becomes obvious. instant cheap international money transfer and payments.”

Working with the current financial system

Often the bigger test faced by Diamond Circle and other bitcoin startups is learning to function within the regulatory environment. Rowlison said his focus has been on developing a compliant product with all KYC/AML regulations built in, meaning Diamond Circle ATMs are fully compliant.
This focus has helped the company form the necessary partnerships with banks and other financial institutions, though there has still been some resistance.
“It hasn’t been easy, we’ve had two rejections from major banks,” Rowlison continued.

“They just need to understand risks can be managed, it’s just a matter of getting that through to them. I don’t see it as an ‘Us vs Them’ situation, bitcoin is just another currency, we can coexist. We need to figure out how we can cooperate.”

He said there had also been “a bit of pushback on locations” from larger shopping malls worried about the product being delivered. The company may need to prove its technology first in a smaller location, like the coffee shops and cafes that house bitcoin ATMs elsewhere, then move to larger centers.

International interest

The company is an ‘Enrolled Money Transmitter Business’ and is run by a team with extensive C-Level experience in various fields of compliance in Australia and in the US.
Diamond Circle has received international interest in their ATMs already with queries from customers in in the UK, Canada, USA, Asia and the Middle East, and says it has already sold two of its ATMs within Australia and one to the UK.
The company is listed on cryptostocks.com under the ticker XDC, a direct pass through to their underlying shares, which helped them raise initial seed capital.
Images via Diamond Circle

GBBG Bitbillions is All About Believing in Blockchain

March 22, 2014

By bitadmin

GBBG|Ware Development

In November of 2013 GBBG|Ware, our software development services division, landed their first major project. Since that time, we have attracted 3 major projects and a hand-full of minor projects. Project managers are reporting 2 of our major projects will progress into beta testing stage in April 2014. We expected one of them to move into this stage in March 2013, but it was delayed due to additional security and stability enhancements.
While we are unable to disclose the identities of the clientele we are developing these projects for, we do want to shed a bit of light on their importance.
One of the projects is in the online gaming industry and similar projects have grossed over $10.0 million within their first 6 months of operations. We expect the project we are working on to be superior to any bitcoin related product currently on the market in this category from both a technical and entertainment stand-point.
Another of the projects we are developing is in the e-currency exchange industry. Similar projects have grossed hundreds of millions in revenue over the past few years. Again, we expect our project to be superior to many of the other e-currency related products currently on the market, especially from a technical and security standpoint.
It is important to note that GBBG|ware is developing these software platforms for 3rd party clients. We will not own or operate these businesses, however, we will be able to brand the “Powered by software developed by GBBG|ware” statement on their websites. We fully expect the entire bitcoin industry to take notice of the quality of our work. It is our expectation that more and more bitcoin industry clients will come to GBBG|ware as they see the robust, technically superior, security enhanced nature of our development skills.
50% of revenue generated through GBBG|ware development services will be poured into the member matrix pools. We expect to see the impact of this revenue increasing the matrix pools within 30 to 60 days.

Steady Growth

From the publication of “The Long Overdue Post” on January 30, 2014 we have continued to experience a consistent, steady growth in membership, Co-Founder upgrades, and Premier upgrades on each earnings source. GBBG is already operating profitably, and these profits are consistently increasing. While we would obviously prefer a slightly increased pace for growth, we are fully able to manage operations and development milestones with current levels.
So, THANK YOU for the continued support and dedication! Because of our loyal, dedicated membership, GBBG is building a foundation from which we expect many profitable revenue streams to emerge.
A few of our growth highlights for the first quarter of 2014 include:

1. New customer service division
2. Stand-alone product support division
3. Increased software development staff
4. Premium advertising sales division

Premium Advertising Sales

As most members are aware, GBBG added premium banner advertising positions to all our websites in March. From the launch of bitbillions through March 1st, 2014 the company generated a sum total of less than $10 in advertising revenue through the a-ads.com system and a few other ad networks we tested. Since we added our own premium banner ads platform, we have already generated several thousand dollars in advertising revenue in March alone. We are currently in the final stages of negotiations with a handful of major advertisers that we feel will dramatically bolster advertising sales revenue in the future. Two of these upcoming premier advertiser negotiations are in the tens of thousands of dollars.
Through our network of websites, GBBG is generating over 1 million unique visitors per month and well over 10 million impressions. These numbers are growing consistently. Therefore, we fully expect premium banner advertising revenue to increase consistently.
50% of revenue generated through premium banner advertising sales will be poured into the member matrix pools. We expect to see the impact of this revenue increasing the matrix pools within 30 to 60 days.

New Upcoming Earnings Source

Sometime before April 1, 2014, we will introduce a brand-new earnings source to our line-up. We are very excited about this new development. This new earnings source will be very different from our current offerings. First, those who participate will be earning commissions, and being paid, weekly. Second this source involves the promotion of a real, physical product critical to the acclimation of true wealth. Third, this new source will allow members to attain 5,000 GBBG points each month without viewing ads, watching videos, clicking links, or any online action that takes time. Participants will simply earn GBBG points by actively involving themselves in a product central to true wealth.
Keep your eye on our Blog and the Earnings page for upcoming details regarding this amazing new opportunity!

New Financial Transparency

In April 2014 we plan to release brand-new transparency reporting on all our sites. Rather than displaying a Bitcoin address with the balance held, we will supply fully transparent financial accounting to all members. On each site, members will be able to see the entire sales revenue generated, commissions paid out, contest winnings paid out, and amounts contributed to the various Matrix and referral upgrade pools. It is our goal to allow every member to have complete access to the entire financial picture of GBBG.
By revealing transparently every aspect of our financial picture, we intend to instil trust and rapport. Members will be more confidently able to tell others about GBBG because they can verify to their referrals the financial condition of the company in real-time. New referrals will easily be able to see the company pays its compensation plan on time, and has the resources in store to continue doing so. We feel this will be a major, useful tool for our membership when promoting our products to others.

Matrix Software Development

In April 2014 we plan to begin development of our Matrix software. This will be the long-term software that operates every one of our websites and manages the 3×7 forced matrix. Some of the features of our upcoming software include:

• Unified login – you will login to bitbillions.com and be automatically signed into all our websites
• Unified data – statistics and data (such as points and financials) will be unified and reported in real-time across all our websites
• Real-time Genealogy – all members will be placed into our 3×7 matrix automatically, Founders first, Co-Founders next, Reserve members next, and Free members last

We anticipate the development of our Matrix software to take 90 to 180 days to complete. Therefore, we anticipate the ability to move to Matrix stage, from a technical stand-point, before all the Co-Founder positions are claimed. Once the Matrix software is fully developed, we will simply wait for all the Co-Founder positions to be claimed and then, flip the switch.

Major Upcoming Project

GBBG intends to release details of our own major upcoming project in April. We will move into a crucial phase for this project soon. As we said repeatedly in the article titled “The Long Overdue Post”, we are developing serious software with serious technical ability. This is not an overnight project. It will take several months to even have our major project in beta testing stage. In addition, we expect major hurdles to clear in legal, regulatory, and banking areas. We will begin to address these hurdles over the next few months as we roll the concept out to our membership.
To allow members the opportunity to understand the nature of our product we will highlight the following aspects:

• Ability to acquire ANY virtual currency (e-currency) instantly, without a credit card, without a bank account, without a phone, without a computer, and without any electronic device at all.
• Ability to transfer money to anyone on earth without a credit card or even a computer or telephone. This transfer happens instantly and has the lowest costs on earth.
• Ability to accept payments from customers anywhere on earth with the lowest payment processing fees on earth.
• Ability to store money in an online wallet that is so secure we GUARANTEE your funds cannot be stolen. If they are stolen, we will replace them at our own expense.
• The most secure, dependable, customer-friendly, customer responsible payment processing and wallet management system ever built.

We hope this helps members get a glimpse of what we are working on.

Global Blockchain Believers Group

For the past two years, GBBG (Global Blockchain Believers Group) has been working to build a foundation from which we can grow many profitable Blockchain businesses. Bitcoin, e-currencies, and general money/payment related projects are the tip of the iceberg. As a group of experience software engineers, the core leaders of GBBG understand the real genius of “Bitcoin” is not the online money we are all hearing about, it is BLOCKCHAIN.
Over the next few years, we know people world-wide will begin to understand this reality. Blockchain is a protocol that revolutionized online payments. However, this is the very beginning of a major onslaught of tidal waves many industries should prepare for. We fully believe Blockchain will revolutionize the banking industry, legal industry, title industry, mergers & acquisitions industry, entertainment industry, intellectual property, securities and commodities industries, forex, and many, many more industries.
You are involved in a company with a long-term vision. We see the future, and the future is NOT Bitcoin. The truth is, Bitcoin is just a PART of the future. It is the first earth shattering development in many earth shattering developments to come. We intend to spend the remainder of 2014 identifying a handful of truly disruptive ways Blockchain can be used to disrupt other, non-financial, industries. And, we intend to become involved in the development and distribution of products in these industries.
Over the next 10 years, because of Blockchain, things will change most people haven’t even thought of yet. The manner in which books, movies, games, and music are distributed will change entirely. The manner in which the transfer of property (buildings, intellectual assets, etc.) occurs will be revolutionized and industry dinosaurs turned on their heads. We are even discussing involvement in a project that will revolutionize the operations of the entire Internet, taking the Internet into a decentralized peer-to-peer global network that cannot be manipulated or controlled by any government or central “authority” on earth.
In the 1960s the Internet was born. 95% of the population on earth did not become aware of it, or how it would affect their lives, until the mid-1990s. Blockchain was born in 2009. Today, 99% of the people on earth are not aware of it, or what it WILL do to change every life on earth over the next 20 years.
If you are involved in GBBG because you want to turn a quick buck or become an overnight success, please leave. We don’t want you here. You will just detract and discourage members from reality. We are Global Blockchain Believers Group. We understand the reality that we are at the very beginning of something that, over the next 20 years, will change many aspects of life on earth. And, we plan to be involved in those changes.
Over time GBBG and our members will profit greatly. We expect to produce millionaires in the same way Oracle, IBM, Microsoft, Google, and Facebook produced countless numbers of millionaires. Just remember that NONE of them produced these millionaires overnight. They all did so through slow, methodic, consistent growth.
Grow with us. Persevere with us. We are here for the long-haul. Together, we succeed.